Slide 1: Prudential plc 2023 Full Year Results
Prudential plc 2023 Full Year Results 20 March 2024 2378.HK PRU.L
Slide 2: Forward-looking statements
Forward-looking statements This presentation contains 'forward-looking statements' with respect to certain of Prudential's (and its wholly and jointly owned • The timing, impact and other uncertainties of future acquisitions or combinations within relevant industries; businesses’) plans and its goal
Slide 3: Anil Wadhwani, Chief Executive Officer
Anil Wadhwani Chief Executive Officer 3
Slide 4: Key messages
Key messages Excellent financial and operational performance in 2023 & sales growth has 1. continued in the first 2 months of 2024 2. Relentless execution of our new strategy with measurable progress Deployment of capital on new business, enhancing core capabilities 3. and expanding distribution 4.
Slide 5: Excellent Financial and Operational Performance in 2023
Excellent Financial and Operational Performance in 2023 Exceptional growth Strong growth in operating profits +45% +8% 3.1 2.7 2.9 2.1 FY22 FY23 FY22 FY23 New business profit, $bn IFRS operating profit, $bn +37% +17% 5.9 4.3 3.9 4.5 FY22 FY23 FY22 FY23 APE sales, $bn EEV operating profit, $bn Note:
Slide 6: We are Executing our Clear and Simple Strategy at Pace
We are Executing our Clear and Simple Strategy at Pace Organisational model replicating successes at pace and scale Multi-market growth engines Greater China ASEAN India Africa Strategic pillars Enhancing Customer Technology-powered Transforming Health Experiences Distribution business model Group-w
Slide 7: Enhancing Customer Experiences
Strategic pillars Enhancing Customer Experiences Building advocacy for lifetime value Priorities 90-95% Acquisition by 10 89% 86% personalised targeting 3 4 FY22 FY23 2027 objective FY22 FY23 2027 objective Differentiated Customer NPS1 Customer retention ratio2 propositions segmented (no. of busines
Slide 8: Technology-powered Distribution: Agency
Strategic pillars Technology-powered Distribution: Agency Improving activation and productivity +75% +3% +59% >2x 80-90 2.8 FY22 66 68 1.8 FY22 FY23 FY22 FY23 2027 objective FY22 FY23 2027 objective 2027 target range Agency NBP No. of active agents per month, Monthly NBP per active agent1, $,000 tho
Slide 9: Technology-powered Distribution: Bancassurance
Strategic pillars Technology-powered Distribution: Bancassurance Increasing penetration & H&P contribution +23% ex. China & Vietnam +0.2 +1 (8)% ppts ppts 9-11% 10% 7.6% 7.8% 6% 7% FY22 FY23 FY22 FY23 2027 objectives FY22 FY22 FY23 FY23 2027 2027objective target Bancassurance NBP Penetration of bank
Slide 10: Transforming our Health Business Model
Strategic pillars Transforming our Health Business Model Disciplined implementation of best practices Priorities +20% >2x Upgrade Health FY22 Insurance 275 330 Proposition FY22 FY23 2027 objective Health NBP, $m Enable Connected Care through Asset-Light Implemented AI-enabled hospital Approach CEO H
Slide 11: Group-wide Enablers: Critical to delivery
Enablers Group-wide Enablers: Critical to delivery Technology People & Culture Wealth & Investments Converging apps across our Accelerating capability build Improving investment markets onto common platform sourced internally & externally performance Developed data platforms to Building high-perform
Slide 12: 2027 Objectives: Success Metrics
2027 Objectives: Success Metrics Strategic Pillars Enhancing Customer Experiences Top-quartile 90-95% On track Customer NPS Retention ratio Technology-powered Distribution: Agency 80-90k 2.5-3x On track Active agents per month Agency NBP Technology-powered Distribution: Bancassurance ~9-11% 1.5-2x O
Slide 13: Multi-market Growth Engines
Multi-market Growth Engines Greater China ASEAN India Africa 13
Slide 14: Hong Kong: Market Leading Quality Franchise
Multi-market growth engines Hong Kong: Market Leading Quality Franchise Unrivalled multi-channel distribution platform Translating to strong Agency Banca growth in NBP, and market outperformance ~4x +93% >3x 1.4 FY22 FY23 FY22 FY23 >40x 0.4 MCV Agency new business profit Bancassurance new business p
Slide 15: Chinese Mainland: Re-positioned our Business Mix to create Sustainable Growth
Multi-market growth engines Chinese Mainland: Re-positioned our Business Mix to create Sustainable Growth Enriching our diversified distribution platform Agency Banca +25% +8ppts (40)% 0.4 Banca 0.2 FY22 FY23 FY22 FY23 Agency APE sales Bancassurance new business margin Agency (ex. economics1) FY22 F
Slide 16: ASEAN: Building on our Market-leading Positions
Multi-market growth engines ASEAN: Building on our Market-leading Positions Operating highlights Top 3 Singapore Strong rebound in 2H in NBP, driven by quality of distribution in 8 out of 9 markets Malaysia Growth in sales & NBP. #1 market leader in banca1 Major contributor to Group’s NBP and embedd
Slide 17: India: Strong Franchise Value in Life & Asset Management
Multi-market growth engines India: Strong Franchise Value in Life & Asset Management Significant demand drivers underpinning growth opportunity Life: Scale player1 Asset Management: Leading player2 +28% Scale & capabilities >40k new Access to to capture growth $1.1bn recruits to >200k >20k branches
Slide 18: Africa: Significant Growth Opportunities Ahead
Multi-market growth engines Africa: Significant Growth Opportunities Ahead Enhancing our multi-channel platform & capabilities Focused on the highest value markets where we have the strongest competitive advantage +33% Top 5 by market share in 6 of our markets Broadening our distribution reach – add
Slide 19: Key messages
Key messages Financial objectives Excellent financial and operational performance 1. in 2023 Well positioned to capture significant New business profit 2. growth opportunities CAGR 2022-2027: 15-20% Relentless execution of our new strategy with 3. measurable progress Gross OFSG Double-digit CAGR 202
Slide 20: Ben Bulmer, Chief Financial Officer
Ben Bulmer Chief Financial Officer 20
Slide 21: Agenda: 2023 financial performance
Agenda: 2023 financial performance • Value • Capital • IFRS • Strategy: Report card 21
Slide 22: 2023 financial highlights
Key messages 2023 financial highlights $3.1bn 1,643¢/s • Strong, broad-based NBP growth, driving EEV/share Value 1,289p HK$128 +45%2 +7% • Consistent capital generation; disciplined investment in new business and enhancing core NBP NBP EEV / share capabilities while maintaining a robust balance shee
Slide 23: NBP +45%: Channel and product diversification
Value NBP +45%: Channel and product diversification $2.1bn $0.8bn 3.1bn +75% (8)% $ Agency Banca New business margin 2022 50% 45% Mix2 +4% + 2023 ex econ. 54% +47% ex economics1 Economics (1%) $1.2bn $1.9bn 2023 53% Group +34% +54% H&P Savings Note: Growth rates are on a constant exchange rate basis
Slide 24: NBP +45%: Multi-market model
Value NBP +45%: Multi-market model $1,411m $699m $484m 3.1bn +267% +15% (5)% $ Hong Kong Growth Mkts Singapore + 45% $222m $167m $142m +47% ex economics1 (40)% +8% +16% Group CPL2 Malaysia Indonesia 17 out of 22 life markets increased NBP YoY Note: Growth rates are on a constant exchange rate basis.
Slide 25: Hong Kong: Very strong MCV and domestic performance
Value Hong Kong: Very strong MCV and domestic performance MCV franchise Domestic momentum NBP APE confirmed maintained MCV APE 2023 vs 2018 & 2019 $bn Domestic APE 2023 vs 2022 1.4bn 2.0bn FY23: +36% YoY $ $ 1.5 1.3 1.2 +267% +276% 2018 2019 2023 1Q 2Q 3Q 4Q 2022 2023 Note: Growth rates are on a con
Slide 26: Hong Kong: NBP driven by volume growth and improving mix
Value Hong Kong: NBP driven by volume growth and improving mix NBP Margin 72% (1)%p MCV business normalising MCV APE 2023 by month Increasing H&P share 1.4bn Overall % new policies H&P, 2023 $ 1Q23 2Q23 3Q23 4Q23 61% 61% 58% 58% 53% J F M A M J J A S O N D 1Q 2Q 3Q 4Q FY +267% Domestic H&P share ban
Slide 27: CPL: Actions taken to position for long term growth
Value CPL: Actions taken to position for long term growth NBP APE Margin $0.5bn (36)% 42% (2)%p Strong agency performance Quality focus drives APE 2023 vs 2022 margin increase FY22-FY23 NBP margin +25% 0.2bn 2022 2023 50% +25% 44% 42% $ +23% 1H 2H FY FY22 FY23 @ 31 FY23 @ 31 Dec 22 econs Dec 23 econ
Slide 28: Multi-market engine
Value Multi-market engine Singapore Malaysia Indonesia 2H23: Improving momentum Well diversified, strong banca Growth in agency and banca APE 2023 vs 2022 APE 2023 vs 2022 APE 2023 vs 2022 +18% (3)% +2% +11% (2)% +36% +3% 1H 2H Agency Banca Total Agency Banca 2022 2023 2022 2023 2022 2023 2H23: Reco
Slide 29: EEV Operating profit up 17%
Value EEV Operating profit up 17%1 Group EEV development FY23, $bn 0.3 NBP added: 2.1 (0.3) (0.6) 46.7 • 7% to opening EEV (0.5) 46.2 • 10% to opening VIF (0.9) 4.5 45.3 45.3 3.1 42.2 Operating RoEV 10% (FY22: 9%)3 VIF: 29.4 VIF: 27.3 2 31 Dec. 2022 NBP Expected return Changes Eastspring Central cos
Slide 30: Strong capital position, well placed to invest
Capital Strong capital position, well placed to invest Strong capital position $16.1bn 295% AA- GWS surplus1,2,3 GWS cover ratio1,2,3 FSR4 Considerable financial flexibility $8.5bn $3.5bn 20% Group free surplus5 Holding company cash Moody’s Total Leverage6 Note: At 31 December 2023. 1. Prudential ap
Slide 31: Accelerating value creation
Capital Accelerating value creation Central costs, interest, ordinary dividend and return of surplus capital Allocating capital for growth A Gross Free Surplus Generation New Business Compounding Profit Managing in-force with greater discipline Writing quality new business C B Embedded Value Double-
Slide 32: Compounding free surplus drives cash: $1.4bn life remittance
Capital Compounding free surplus drives cash: $1.4bn life remittance Value compounding Capital generation & cash remittance Development of 2023 life free surplus expected Life free surplus development, FY23, $bn1 31 Dec. 2022, 2017-22, $bn $3.1bn NBP added 2.9 2.7 (0.7) 2023 Remittance FS added Valu
Slide 33: IFRS: Underlying CSM growth +9% YoY
IFRS IFRS: Underlying CSM growth +9% YoY1 CSM movement, net of reinsurance FY23, $bn Net ‘underlying’ CSM increase: $1.7bn +$3.9bn +9%1 1.6 23.9 23.3 (0.6) 23.3 (2.2) 22.3 2.3 21.1 (0.1) 21.0 21.0 20.0 20.0 2 3 31 Dec. 2022 New business Normalised unwind CSM before Economic & other Balance before Re
Slide 34: Diverse insurance profit, lower central costs
IFRS Diverse insurance profit, lower central costs Diversified insurance profit Operating profit +8%2 IFRS insurance adjusted operating profit FY23, $bn Group P&L FY22 % YoY2 $m FY23 Release from CSM CER2 Hong Kong Insurance 3,237 3,249 0 Adjusted CSM Adjusted CSM release release 2.2 Eastspring 280
Slide 35: Building EEV and IFRS17 adjusted equity
IFRS Building EEV and IFRS17 adjusted equity EEV & IFRS17 adjusted equity EEV & IFRS17 adjusted equity per share 31 December 2023, $bn 31 December 2022-2023, ¢ per share +7% (8.3) 45.3 3.0 1,643 +6% (0.3) (2.3) 37.3 1,534 1,356 1,280 36.9 36.7 36.7 37.3 EEV EEV shareholders' Economic, Economic, othe
Slide 36: Increasing confidence in achieving 2027 NBP and OFSG objectives
Strategic report card Increasing confidence in achieving 2027 NBP and OFSG objectives New business profit Gross OFSG 2022-2027, $bn Indicative trajectory, 2022-2027, $bn Objective: CAGR 2022-27: 15-20%1 Objective: Double-digit CAGR Gross OFSG 2022-20271,2 20% 5.4 >4.4 15% 4.4 3.1 2.8 2.7 2.2 2022 20
Slide 37: Key takeaways
Key takeaways 1. Excellent financial and operational performance in 2023 2. Strong and resilient capital position 3. Capacity to invest 4. Relentless execution of our new strategy with measurable progress 5. Sales growth has continued in the first two months of the year 6. Increasingly confident in
Slide 38: CEO Appendix
CEO Appendix 2378.HK PRU.L 38
Slide 39: Sustainability
Sustainability 1. For more details: https://www.prudentialplc.com/sustainability 39
Slide 40: Diversified franchise with leading presence in markets with favourable macro trends
Diversified franchise10 with leading presence in markets with favourable macro trends HY23IFRS17 FY23 IFRS17 Life Life g Eastspring Insurance Insurance Total health Total health 2022 -2028 2022-28 2022-33 1 6 7 adjusted operating adjusted op. position position1 position position6 penetration penetra
Slide 41: Hong Kong: Intact demand drivers for Chinese Mainland customers
Hong Kong: Intact demand drivers for Chinese Mainland customers Highest intention to visit HK MCV reasons to Financial products likely to since 4Q19 (Next 12 months) visit HK (Next 12 months) acquire in HK (Next 12 months) Intention of MCV visiting HK in the Managing personal Healthcare Any insuranc
Slide 42: Hong Kong: Intact demand drivers for Chinese Mainland customers
Hong Kong: Intact demand drivers for Chinese Mainland customers Financial products likely to MCV preference for MCV preference for acquire in HK (Next 12 months) medical treatment medical treatment CI Medical & Savings Minor illness, % Critical illness, % insurance, % hospitalisation insurance, % in
Slide 43: ASEAN: Building on our market-leading position
ASEAN: Building on our market-leading position Significant growth Enhancing Operating opportunity capabilities highlights Leading diversified multi-channel platform Increase in agency +7% productivity Indonesia Agency Banca +12% # of active agents Other Agency Increase in agency +7% • +7% agency NBP
Slide 44: Strong track record of delivering sustainable shareholder value
Strong track record of delivering sustainable shareholder value Growth Cash Value New business profit1,3,6, $bn Gross operating free surplus Embedded value2,4,5,7, $bn generation2,3,5, $bn 2.2x 2.0x 2.4x 3.1 2.7 43.0 1.4 1.3 17.9 FY13 FY23 FY13 FY23 FY13 FY23 1. Continuing insurance operations. 7. L
Slide 45: CFO Appendix
CFO Appendix 45
Slide 46: FY23: Financial performance by segment
FY23: Financial performance by segment Financial performance by segment 3 CPL Growth mkts New Business Adjusted IFRS EEV SHF Long- New Business $m Profit Operating Profit term business1 Profit, FY23 HK Sing. FY23 %YoY2 FY23 %YoY2 31-Dec-23 Malaysia Indo. CPL3 222 (40) 368 43 3,038 3 Eastspring CPL H
Slide 47: Group NBP driven by volume growth and favourable mix
Group NBP driven by volume growth and favourable mix NBP + 45%1 NBP development FY22-FY23, $m +47% 217 (37) 796 3,162 3,125 2,149 FY22 Volumes Product/Channel FY23 excl. Economics FY23 1 (CER) mix/Other Economics % NBP Margin 50% 4% 54% (1)% 53% 1. Constant exchange rate basis. 47
Slide 48: Diversified NBP performance
Diversified NBP performance Diversified Group NBP margin stable NBP +45% APE, FY23 $m, % Growth YoY (CER1) NBP margin (NBP/APE) FY23 vs FY221 NBP, FY23 $m, % Growth YoY (CER1) 2 2 CPL 2 42% CPL 534 (36)% CPL 44% 222 (40)% 72% HK 1,966 276% HK 73% HK 1,411 267% 51% Indo. 277 15% Indo. 51% Indo. 142 1
Slide 49: History of materially positive operating and economic variances
History of materially positive operating and economic variances Operating experience & Economic experience1 assumption changes1 as % of opening EV as % of opening EV 2011 1.1% 2011 1.2% 2012 1.1% 2012 2.4% 2013 0.9% 2013 -0.5% 2014 0.9% 2014 1.7% 2015 2015 -2.8% 0.7% 2016 1.2% 2016 -0.2% 2017 1.9% 2
Slide 50: Eastspring: $5.5bn retail net inflows
Eastspring: $5.5bn retail net inflows Eastspring: Movement in FUM1,2 3rd party net flows: +$4.1bn 16.9 2.3 5.5 (1.5) (7.6) 237.1 225.5 221.4 220.2 FUM 31 Dec 22 External Retail net External Institutional Internal net flow Outflows related to Mkt movements, FX, FUM 31 Dec 23 flow net flow M&G plc, po
Slide 51: Free surplus: Sources and uses 2023
Free surplus: Sources and uses 2023 Group free surplus development FY23, $bn Expected in-force emergence NBP $3.1bn: FY23: $2.66bn c4x value multiplier 31 Dec. 20221 0.2 0.3 (0.7) (0.4) (0.6) 2.64 2.7 (0.5) 1.4 (0.2) (0.1) (0.4) 10.6 10.5 10.5 Gross OFSG +1% YoY 3,4 10.0 9.4 8.9 8.632 8.518 8.5 8.4
Slide 52: Substantial flexibility to support growth
Substantial flexibility to support growth Holding company cash development FY23, $bn (0.3) 1.6 (0.2) 0.3 (0.5) (0.4) 4.3 3.6 3.5 3.1 3.2 3.2 31 Dec. 2022 Net cash remitted Central & interest Central banca fees Dividend paid Debt redemption Other corporate 31 Dec. 2023 costs activities, FX Note: Tota
Slide 53: Balanced call date/maturity profile supports financial flexibility
Balanced call date/maturity profile supports financial flexibility Prudential plc: Core structural borrowings1 31 December 2023 Next call/maturity schedule US$m 3.125% 2.95% 1,000 4.875% 6.125% 500 5.875% 3.625% 0 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 Senior Subordinated Maturity Next ca
Slide 54: Resilient regulatory capital position
Resilient regulatory capital position Comfortably above risk appetite Resilient to macro shocks GWS shareholder capital position, $bn1 Macro sensitivities to GWS shareholder cover ratio 31 Dec. 2023, GWS shareholder cover ratio, GPCR basis1,4 Base position 295% Risk appetite: Cover >150% 302% 295% r
Slide 55: FY23 Regulatory GWS capital generation
FY23 Regulatory GWS1 capital generation GWS shareholder surplus development, GPCR basis1 FY23, $bn Cover ratio: 302% 295% 2.1 (0.7) 0.3 1.4 (0.5) (0.3) 15.8 16.1 15.2 GWS surplus In-force Group New business Group OFSG Dividend paid Non-operating Other GWS GWSGWS surplus surplus 31 Dec 2022 OFSG inve
Slide 56: CSM measurement models reflect our business mix
CSM measurement models reflect our business mix CSM Balance1,2 At transition, 1 Jan. 2022 Model Variable Fee Approach (VFA) General Measurement Model (GMM) • With-profits • Standalone protection • Unit-linked with low proportion of • Unit-linked with high proportion of Business protection riders pro
Slide 57: Operating and non-operating profit under IFRS17
Operating and non-operating profit under IFRS17 Insurance segmental income statement Economic experience (Illustrative: Not to scale) VFA business CSM amortisation Market movements smoothed over time via CSM release RA release Variances & other GMM business o/w Expected long-term spread1 Adjusted in
Slide 58: IFRS CSM & new business well diversified by market
IFRS CSM & new business well diversified by market CSM by segment, net reinsurance Insurance operating profit by segment 31 December 2023 FY23 Hong Hong Kong Kong Growth markets Singapore $21.0bn $3.2bn Singapore Growth markets 1 CPL Malaysia Indonesia CPL 1 Indonesia Malaysia 1. CITIC Prudential Li
Slide 59: EEV vs IFRS17: Key difference economic assumptions
EEV vs IFRS17: Key difference economic assumptions EEV vs IFRS17 Adjusted Equity ‘Real-world’ economic assumptions based on the expected returns on the actual assets held with 31 December 2023, $bn Assumptions IFRS17 EEV an allowance for risk in the risk discount rate. Updated at every reporting per
Slide 60: EEV NBP vs New business CSM: Key difference economic assumptions
EEV NBP vs New business CSM: Key difference economic assumptions EEV NBP vs IFRS17 New business CSM Assumptions IFRS17 EEV FY23, $m Risk Real Economic neutral1 world1 Non-economic Aligned 2,465 (1,006) 117 New riders, pre tax2 2,119 94 323 New riders, post tax2 3,125 2,348 2,025 EEV NBP Economics &
Slide 61: Limited IFRS & EEV macro sensitivity
Limited IFRS & EEV macro sensitivity IFRS Group shareholders’ equity: Sensitivities IFRS CSM1: Sensitivities EEV insurance2: Sensitivities 31 Dec. 2023, $bn 31 Dec. 2023, $bn 31 Dec. 2023, $bn Base position 17.8 21.0 41.5 Interest rates -50bps -0.3 -2% 0.4 +2% 1.1 +3% Interest rates +100bps 0.0 0% -
Slide 62: Asset portfolio
Asia and Africa invested assets Asset portfolio Breakdown of invested assets1,2 Shareholder debt portfolio 31 December 2023, $bn 31 December 2023, $bn Funds with Holding by issuer Shareholder policyholder Unit linked Total backed 3 participation Portfolio No. Av. Max <BBB-7 $bn Issuers6 $m $m Debt 6
Slide 63: Shareholder-backed debt exposures
Asia and Africa invested assets Shareholder-backed debt exposures By geography1 By credit rating 1,2 31 December 2023 31 December 2023 Sovereign debt Other government bonds Corporate bonds 4% 6% By market: 13% Rating: 23% 30% 31% 11% 16% United States AAA Singapore AA 6% 36% Thailand A Vietnam BBB 2
Slide 64: Shareholder-backed debt exposures
Asia and Africa invested assets Shareholder-backed debt exposures By asset type1 By sector1,2 31 December 2023 31 December 2023 Corporate debt exposures ABS 1% Basic Materials Technology 3% Government related 3% 1% Corporate Bonds Real Estate 41% 8% Financial Consumer, Cyclical 33% Sovereign 6% 55%
Slide 65: CITIC Prudential Life (CPL): General Account portfolio summary
CITIC Prudential Life (CPL): General Account portfolio summary CPL general account General account invested assets in focus invested assets1 Presented on a 50% basis Presented on a 50% basis. At 31 December 2023, $bn Investments 31 Dec. 2023, $bn @50% 2% <1% of total of Prudential plc & 4% 2% Real e
Slide 66: Investment in capabilities to accelerate value creation
Investment in capabilities to accelerate value creation Investment in core capability Priority initiatives • $0.1bn 2023 • Personalised targeting ~$1bn investment in • Remainder weighted to 2024 & 2025 Enhancing • Segmenting by life stage core capabilties • Expensed at business unit level as operati
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