Prudential Plc · LSE:PRU
Prudential — Investor Day (2018)
164 slides from Prudential's investor day presentation, 2018
Slide 1: Asia Strategic Overview
Asia Strategic Overview Nic Nicandrou Chief Executive Prudential Corporation Asia 48
Slide 2: Dynamic landscape
Asia Dynamic landscape Regulators Employees Changing accounting Evolving capital Conduct Capabilities/skills Expectations standards framework Customers Environment Growing Connectivity Changing Behaviors Economic Changes Climate Ageing Population Growing Middle Class Market Geopolitical Technology S
Slide 3: Significant long term growth opportunity
Asia Significant long term growth opportunity Demographics1,2 Health and Protection Gap4,5 Working age Over 65 Out of pocket healthcare spend Mortality gap +1m +450m 43% a month 696m $146tn 441m 11% 15% 244m Asia Asia US UK $40tn 2.3bn $9tn 2015 US UK 2.5bn Health protection gap 2005 2017 2030 2030
Slide 4: Asia's demographic trends
Asia Rising underinsured middle class and a rapidly ageing population in this region… US$5tr p.a. wealth creation in Asia, means Ratio of people working to those over 65 years Asia’s demographic trends2 Rising and under insured that 88 percent of the next billion entrants into of age to decline from
Slide 5: Significant challenges for public policy and individual planning
Asia …create significant challenges for both public policy and individual planning Income in Healthcare Elderly care retirement provision provision Size of the retirement savings gap, US$ Estimated health protection gap of US$1.8 trillion in Elderly healthcare expenditure breakdown by trillions, 201
Slide 6: Structural demand for insurance
Asia Structural demand for insurance Life premiums1 Demand drivers 700 5.8x Life premiums 615 3,700 (US$, bn) 600 • Underlying structural trends drive demand 3,500 500 • Risk off proposition 400 Population 3,300 3,312 (m) • Increasing consumer awareness 300 3,100 200 • Lack of social safety net 106
Slide 7: Significant country level opportunities
Asia Significant country level opportunities Insurance penetration2 Health protection gap (2017, %) per household3 (2017, USD) Significant country level PH 1.2% SG 13,776 growth opportunities VN 1.3% HK 9,156 ID 1.9% MY 6,864 CH 2.7% TW 4,823 IN 2.8% CH 1,724 MY 3.3% PH 1,406 TH 3.6% IN 1,382 SG 6.6
Slide 8: Leading pan-regional franchise
Asia Leading pan-regional franchise Pru Asia footprint >600k Life Japan Eastspring Agents11 127m China4 >300 1,416m Korea Life & asset management Taiwan distribution partnerships India5 51m 24m 15m 1,354m Top 3 Top 10 Pru life customers Hong Kong Top 3 Laos 7m Top 3 Top 10 Position in 9
Slide 9: Prudential's quality, resilience and diversification
Asia Prudential’s quality, resilience and diversification Quality Resilience Diversification Distribution4 (% APE) Regular premium4 Life weighted premium income (£’bn)1,2 Other (% APE) 4.9x Banca Agency 94% 15.2 MSCI Asia ex Japan3 13.1 Retention rate4 Product4 (% APE) Renewal Linked 10.9 Non-Par H&
Slide 10: Unique assets
Asia Unique asset Individual medical reimbursement1 Eastpring2 Par Fund3 (FY2017 APE) ID MY SG VN TH CH IN JP KR TW HK Eastspring 7.4 6.5 6.1 6.1 A 5.8 5.4 5.3 H&P Medical B 4.6 Life/Other C Benchmark 27% 17% 23% D E Fund Group F 9% G £1,044m H I 3Y 5Y 3Y 5Y J K Singapore Hong Kong 51% Critical Mark
Slide 11: Meeting customers lifetime needs
Asia Meeting customers lifetime needs 350,000 Prudential life customer & population by age1,2 10,000,000 Customer segments 300,000 2018 eduCARE, designed for parents to save for their Repeat sales3 children’s future education Juvenile 8,000,000 Population 250,000 Qing Ying Ling Hang long term saving
Slide 12: Strong brand appeal
Asia Strong brand appeal Insurance1 Eastspring2 Leading in brand awareness & consideration in 6 markets Strong brand awareness Awareness Consideration Market Market Brand Awareness3 Ranking Brand Consideration3 Ranking Hong Kong 88 2nd Hong Kong 82 1st Asia Brand Awareness Indonesia 98 1st Indonesia
Slide 13: Talented and highly diverse workforce
Asia Talented and highly diverse workforce Headcount1 Years of Service Demographics 25% 25% 13.2K 17% 17% 16% 35 63% 26% 11.7K 12.6K Average Millennials People Age Managers *Millennial: born between 1981 - 1995 <1 1-3 3-5 5-10 10+ 2014 2016 2018 YTD Years of service Gender Profile Whole Ethnicity –
Slide 14: Strategic assessment completed
Strategic assessment completed Future market evolution Future back Today forward Life Taking business to full potential (life insurance solutions) Health (medical reimbursement 2017 profit pools and PCA share Key factors shaping future products) across major markets evolution of markets and estimate
Slide 15: Life insurance opportunity
Life insurance opportunity Profit pools to rise strongly given need for protection and demographic trends Penetration 2017-2022 2017 Life Insurance EEV % of GDP4 CAGR5,6 Key drivers basis new business Drivers of growth • Government stimulus profit1 (£’bn) (HK, SG, ID, MY, Rising underinsured middle
Slide 16: Health opportunity
Health opportunity Profit pool to double due to increased consumer demand 2017-2022 2017 Health medical Penetration5 CAGR7,8 Key drivers reimbursement1 profit pool2 Drivers of growth • Launch of Voluntary Health (£’bn) (HK, SG, ID, MY, CH3, IN4) Large medical protection gap 1.0% ~9% Insurance Scheme
Slide 17: Wealth opportunity
Wealth opportunity Asia will account for 22% of Global AUM and 75% of global flows by 2022 2017-2022 Asia retail into Asia 2017 Penetration1 CAGR2 Key drivers post-tax profit pool (£’bn) Drivers of growth • Large offshore investment and Strong wealth creation momentum 26% ~9% highly affluent onshore
Slide 18: Life, health and wealth opportunities
Asia Life, health and wealth opportunities Relative Attractiveness vs PCA’s market share1,2 Excellent Exploit new opportunities Grow share and presence Extend leadership position Health Ecosystem. CN (L) Digital D2C HK (L) HK (H) Retirement Relative Ecosystem CN (W) IN (L) IN (W) Attractiveness IN (
Slide 19: Life, wealth and health business initiatives
Asia Life, wealth and health business initiatives Extend leadership position Grow share and presence Pursue new opportunities • Optimise and enhance distribution • Extend distribution and drive efficiencies • Digital value added services working with non-traditional partners • Expand to adjacent seg
Slide 20: Varying in-country demand drivers
Asia Varying in-country demand drivers Established, affluent, ageing1,2,3 Nascent, aspiring, young1,2,3 Developing, growing middle class1,2,3 9.0 7.0 350 1,600 8.0 300 1,400 6.0 >65 7.0 >65 >65 250 1,200 >65 5.0 6.0 1,000 5.0 4.0 200 800 4.0 3.0 150 15-64 3.0 15-64 600 15-64 15-64 100 2.0 400 2.0 1.
Slide 21: Hong Kong: market leading business
Hong Kong Market leading business Hong Kong1 Continuously innovating CI offerings - Leader in the growing health & protection segment >19,800 agents >30% Agency market share (HY18) H&P APE H&P APE >3,700 MDRT mix3 mix4 +19% NBP 18% 26% Total APE +15%, MLC5 APE +23% (discrete Q3) 28% Mainland market
Slide 22: Hong Kong: strong growth momentum
Hong Kong Strong growth momentum across all profit pools APE (£’m)1 New Business Profit (£’m)1 CAGR: CAGR: +31% +46% 2.9x 4.5x Q3 YTD 2018 Q3 YTD 2018 1,431 2,002 1,725 - 3 % 1,427 1,535 + 19 % 984 590 821 342 515 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 Life weighted premium income (£’m)1,
Slide 23: Hong Kong: drivers of demand
Hong Kong Drivers of demand Ageing population1 Increasing wealth, high insurance awareness coupled with need for retirement planning and health protection fuel demand >65 <15 Average age Retirement 52 Domestic 43 Savings 74% Social Security Mandatory Savings & Corporate Pensions Voluntary Savings &
Slide 24: Hong Kong: business initiatives
Hong Kong Business initiatives Extend leadership position Grow share and presence Pursue new opportunities • Continuous proposition innovation and target higher customer holdings through development of • Participate in Government • Provide digital value added modular solutions voluntary savings & in
Slide 25: Singapore: strong performance leveraging market position
Singapore Strong performance leveraging its market position Singapore1 Position2 Policy per customer attachment rate 2.8 Largest agency force REGULAR MEDICAL >4,900 #1 PREMIUM #1 (SHIELD) CONSECUTIVE 2.5 MARKET SHARE 22% 3 YEARS >900k customers 2014 2015 2016 2017 3Q18 Optimising Par Fund AUM (S$bn)
Slide 26: Singapore: drivers of demand
Singapore Drivers of demand Market segment analysis Market Size2,3 Prudential Share2,3 #1 73% $13.8K WORKING GDP PER CAPITA POPULATION % AVERAGE HEALTH ASIA RANK PROTECTION GAP 2017 6 OF TOTAL (15- PER HOUSEHOLD HNW S$700m 1% 64)5 (USD) 1 Wealth per adult (USD)1 Affluent S$600m 8% ~3X MEDICAL INFLAT
Slide 27: Singapore: broadening our capabilities
Singapore Broadening our capabilities Protection Push Successful first-in-market products Opus proposition for High Net Worth • PASV – First of its kind customizable savings • Opus launched in 2018 with APE S$49m (+13.4% • Individual Protection APE is + 32% plan; S$14m sales in just 24 days since la
Slide 28: Singapore: business initiatives
Singapore Business initiatives Extend leadership position Grow share and presence Pursue new opportunities • Optimise efficiencies of current agency & bank channels • Provide digital value added • Enrich and accelerate Enterprise • Expand customer access and services working with non- proposition de
Slide 29: Indonesia: strong structural drivers
Indonesia Strong structural drivers Total Weighted New Business Premiums (IDR tr)1 Indonesia structural demand drivers CAGR ‘13-17 Prudential market share 35.0 6% 2017 9M 31.3 267M 27.9 26.7 27.0 16.4 9% 1% PEOPLE WILL Traditional 11.6 14.2 POPULATION ENTER THE MIDDLE 10.9 11.0 CLASS EACH YEAR 2015-
Slide 30: Indonesia: unique credentials
Indonesia Unique credentials HY18 Total premium1 (IDR bns) FY17 Profit (IDR’bn local basis)2 Indonesia3 Prudential 13,909 Prudential 5,450 A >1.5x A >2.1x B B C C #1 Agency D D E E #1 MDRT in Indonesia F F G G H H >250k agents I I 2.3m customers Agency network Shariah (FY17) 3.3m policies Prudential
Slide 31: Indonesia: re-tooling the business
Indonesia Re-tooling the business Regular premium unit-linked with riders covering all life stages Channels Core products Customer segment Enhanced customer offering Broaden product range Additional investment allocation Unit Higher case size EXISTING Agency linked Additional sum assured bonus 2018
Slide 32: Indonesia: business initiatives
Indonesia Business initiatives Extend leadership position Grow share and presence Pursue new opportunities • Segment and re-tool agency force to drive productivity improvements • Broaden product solutions, • Expand bank distribution • Provide digital value added develop modular propositions and serv
Slide 33: China: significant opportunity and strong footprint
China Significant opportunity and strong footprint Presence in: Access to: Access to: Growth in insurance premium 13% (CAGR % 2018-2028)2 18 85 75% 78% Provinces Cities of population China GDP 98% China Asia ex JP North World Regular premium & CH America (% of APE) SARMRA Contribution to growth in g
Slide 34: China: benefits starting to come through
China Benefits starting to come through New Business Profit (£’m)1,3 H&P Mix (% APE) Linked Q3 YTD 2018 133 Q3 YTD 2018 Non-Par 4x Non-Par 16 Par H&P 65 + % 31 31 33 H&P 42% Par 2013 2017 Linked 2013 2014 2015 2016 2017 Life gross written premium income (£’m)1,2 IFRS operating profit (£’m)1,4 Aug YT
Slide 35: China: expanding contribution to sales
China Expanding contribution to sales APE by Branch APE % Cities Offices (2017) (Sept’18) (Sept’18) 6% 17 17 2013 – 2017 +4 provinces 21% 24 49 24% 33 84 2007 - 2012 +5 provinces 2004 – 2006 +7 provinces 10 (Guangdong) 2000 – 2003 49% 54 1 (Beijing) +2 provinces 2000 2001 2002 2003 2004 2005 2006 20
Slide 36: China: areas of focus
China Areas of focus Extend leadership position Grow share and presence Pursue new opportunities • Grow into footprint and expand to central and western provinces • Expand and drive distribution efficiencies • Access e-Commerce channels • Promote deferred pension in agency and bank channels and non-
Slide 37: Create 'best-in-class' health capability
Asia Create ‘best-in-class’ health capability Using technology to make health accessible and affordable to all Transform the delivery of care from Risk Factor Identification sick care to wellness Prevent Expanded health Expand partnership with providers offering complementary Health & wellness coach
Slide 38: Indonesia health value added service features
Indonesia health value added service features We aim to go live with Babylon and telemedicine services in Q2 2019 before adding further features over time Q2 2019 Q3 2019 Wellness Digital Health Assessment AI Symptom Diagnosis: Self Input Use of AI, e.g. a chatbot, to diagnose an illness from Activi
Slide 39: Retirement opportunity
Asia Retirement opportunity Opportunity1 Pre-conditions for accelerated growth 2015 2050 Deeper investment markets 244m 696m Over 65 years of Government alignment age Tax incentives Increase in population over 65 years % population over 65 years in 2050 Increase awareness on the need to save for ret
Slide 40: Eastspring: benefiting from Life flows and third party demand
Eastspring Benefiting from reliable Life flows and third party demand Net flows (£’bn)1 Funds Under Management (£’bn)1 Asia Life Third Party Non 6.0 MMF 5.4 5.4 5.3 5.2 3.8x MMF/ UK / US Life 3.7 3.7 3.2 3.1 2.7 2.6 2.2 1.9 1.6 1.8 1.6 0.9 0.9 0.4 0.0 45 Total net inflows: £57bn 2012 2013 2014 2015
Slide 41: Eastspring: multiple sources of future demand
Eastspring Multiple sources of future demand Cumulative AM industry net new flows by region ('13-’21E)1 Assets Under Management (2017)1,2 Retail: Asia to Asia £1.4T Retail: Asia to Ex-Asia Footprint £0.9T Retail: Retail: Retail: Inst: Asia to Asia to Ex-Asia All to Asia Asia Ex-Asia to Asia Rest of
Slide 42: Eastspring: expanding offerings and capabilities
Eastspring Expanding offerings & capabilities Distribution Market • Established 100% owned • Acquired majority stake in Singapo US & Korea Japan Taiwan Malaysia Indo re & HK EMEA Latam India China Thailand investment management WFOE - TMBAM – pathway to full JV JV WFOE received PFM license ownership
Slide 43: Building for the future: strategic priorities
Asia Building for the future Strategic priorities Create ‘best-in-class’ Enhance the core health capability Broaden flagship product range Narrow mortality protection gap Expand distribution and drive efficiency Grow participation in health and medical segments Collaborate with non-traditional partn
Slide 44: Execution of strategic priorities
Asia Execution of strategic priorities Enhance the core Engagement Purchasing Servicing 8 new banca AskPru E-submissions Channel partnership & Claims >1m new Zhong An ePOS Banca NBP >8,000 customers1 Enhance the core +19%1 qualifiers PGB Unit linked launched 1201 70% E submissions1 Jet claim Product
Slide 45: 2018 performance
2018 performance Adding capabilities while delivering strong performance Active portfolio management and capability expansion May 2017 SGA Fund launch (Apr’18) Korea life sale (May’17) Delivering double-digit growth IFC infra mandate (Jun’17) Pension pilot in 3 cities (May’18) Sichuan entry (Nov’ 17
Slide 46: Summary
Asia Summary Channels Core products Customer segment • Well positioned to benefit from long-term NEW Estate Robo- planning investing Consultants HNW structural opportunities Multi-care multi- stage medical Affluent EXISTING Agency Unit linked cover • Executing on a clear set of strategic priorities
Slide 47: Agenda
Prudential Asia Agenda Strategy & priority update Nic Nicandrou Delivery ahead of customer expectations Insurance operations Lilian Ng Bespoke product Ease of doing Engage and influence solutions business Expansion in China Multi-asset solutions Eastspring Guy Strapp Michelle Qi Colin Graham Health
Slide 48: Asia Insurance
Asia Insurance Lilian Ng Chief Executive, Insurance Prudential Corporation Asia 95
Slide 49: Consistent resilient delivery
Consistent resilient delivery Q3 APE +15% NBP NBP +19% 1,762 Value Generation (NBP) +15% Agency Market NBP +16% Share +24% Accelerating Value Delivery (IFRS) +14%* 8x 22% Value Generation Momentum RM 1bn APE NBP Driving Health +43% and Protection APE PRUElite & +9% Sharia APE We are #1 Segments +36%
Slide 50: Re-imagining and re-designing the core
Re-imagining and re-designing the core Delivering from a position of strengths CORE Customer Digital Business Operations Experience Platform Agility Optimisation Unparalleled Productivity and Efficiency and Innovate and Experience Effectiveness Flexibility Adapt Delivering ahead of customer expectat
Slide 51: Underserved health conscious consumers
Underserved health conscious consumers 7 Drivers of Demand Consumer Needs Increasing medical 67.8 811 funding need Increasing Life expectancy at birth Indemnify medical bills Inability to cover six months’ expenses 50%2 Top Causes of death1 advancement Cancer Choice and Access Medical Rapid increase
Slide 52: Narrowing the health protection gap
Narrowing the health protection gap Top 3 serious illness Integrated approach to close the gap Raise awareness Scalable Deliver new, compelling Propositions Coverage Equip and Reward Distribution Profitable Engaging with integrated campaigns Transforming Customer Fulfilment 2018 INVESTOR CONFERENCE
Slide 53: Always new and compelling propositions
Always new and compelling propositions Continuously innovating Critical Illness (CI) offerings Leader in the health & protection segment 2010 2011 2012 2013 2014 2015 2017 2018 18% 26% H&P APE H&P APE mix1 mix2 Extended for Extra 35% coverage Extra 50% coverage Protection Reset Benefit after Whole l
Slide 54: Engaging with Value Added Services
Engaging with Value Added Services Holistic healthcare platform to engage Prevent Postpone Protect Physical Hospital Chronic doctors visits Telemedicine Digital Health Digital disease Assessments Lifestyle & & video ePrescription, Twin management Triage & wellness Medication Improving Symptom manage
Slide 55: Simple and seamless customer experience
Simple and seamless customer experience Back eFNA & Back eClaim P ePay adv. tech P ePay eKit traditional enhanced dynamic on-device adv. tech office ePOS office 1 2 3 Next Best Offer Smart Underwriting Frictionless Claims Decision Business Propensity Result Behavior Underwriting Automation Artificia
Slide 56: Protection for ALL
Protection for ALL Mass Affluent Alignment to Government’s vision TAKAFUL LIFE Protection for ALL Mass Linked Protection Plans with riders 78% (+5%pt) TAKAFUL Life LIFE Agency Protection Link mix Underserved Health RM 51bn (+6%pt) TAKAFUL LIFE Sum Assured Value Added Services Health coach 2018 INVES
Slide 57: Target segment opportunities
Target segment opportunities US$402bn 12% avg. increase Emphasis on prevention Health and and primary care Mortality protection in health care cost4 Protection gap1 Millionaires in Singapore (‘000) 2018 240 184 217 Demand for diversified Wealth 47% savings 195 US$0.6tn 165 protection and wealth in c
Slide 58: Meaningful and relevant propositions
… with meaningful and relevant propositions Health conscious millennials Health: Peace of mind Protection: Financial independence PRUvital cover Families with dependents Saving for milestones in life PRUActive saver Customised savings options 24% NBP growth1 Lumpsum at maturity 2.8 policies per cust
Slide 59: All inclusive solution
All inclusive solution High Net Worth Small Medium Enterprise Advice as a product Preferential VIP Advisor led sales portal Competitive Insurance services Solutions Premium Positioning Premium Positioning 46 Private Wealth Consultants1 Estate planning Rewards & HR & Employee portal Value Added Servi
Slide 60: SME: replicable model to build and expand in Asia
Beyond Replicable model to build and expand in Asia Number of SME Enterprises China Enabling an integrated set 28m of services across Asia SME: 97% of total enterprises Differentiated enterprise Vietnam 3m solutions, stepping away Thailand Philippines 2m 911k from price war Malaysia Extending reach
Slide 61: Indonesia: fundamentals still intact
Fundamentals still intact Drivers of Demand Disruptions Prudential Franchise OJK “Infinity” – drive for Soft markets / pressure 400 sales offices 1 Agents on currency 250k+ Government Digital Innovation emphasis 4 agents per 1,000 population1 FMCG growth lowest point 165 cities 3 Insurance Needs Pol
Slide 62: Innovating for growth
Innovating for growth Investing in Growth & Innovation to expand Progress so far market leadership Agency Digitisation Segmentation Customer 17% 99k Excellence User IDs created Agent # Brand Dominance Elites & MDRTs PRUForce Innovative Customer Customer Solutions Solutions Segments 19% Case size 18%
Slide 63: Customer experience for growth
Customer experience for growth ePrudential Social media PRUonline Blog (web and mobile app) Search engine PRU Medical Corporate Network website Corp Web Trigger Attract Engage Fulfill Service Advocate ATL advertising Awareness programs Customer events E – Submission E-Payment 400 GA offi
Slide 64: The solution that gives more
The solution that gives more PRUbooster investasi 1 Additional allocation for investment from day 1 PRUbooster proteksi additional 5% of Death SA until 55 yo 2 Free Admin Charge With digital and direct debit bank account only Additional Cover Booster Double basic SA for death due to accident First Y
Slide 65: PRUforce agency
FUTUREADY Agency 1 segment # Agent’s Critical Mass Career Agents Elite Agents On-boarding Training e-learning Performance Management Sales tools + 80% Ease Fast Convenient 3x PRUforce PruExpert PruFit •Seamless •Learning System Data driven performance Flexible and interactive Recruits vs next proces
Slide 66: Re-imagining partnership distribution
Re-imagining partnership distribution > 100 partners New wave of partners Strategic MNC and local partners Segment by customer persona Partner Penetrate Segmented Value new approach by wealth Added segments Reach New and Services Growing Segments Engagement Model #1 Pan Asia Broadened Bancassurance
Slide 67: Optimising strategic partners
Optimising strategic partners Significant Penetration Opportunities PRU SCB taking the partnership to the next level +17%2 NBP Mass CITIC Global banca platform - integration of Prudential Bank ~ 3.7m Customers insurance data into SCB bank systems 3% penetration ~80m Mobile online product offering Cu
Slide 68: Re-inventing partnership distribution
Re-inventing partnership distribution New way to partner New wave partner New wave partner Segment distribution partnership 10 year strategic partnership (Telco) Exclusive product and service 180K Digital Bank Customers Special campaigns 15m Customer Customers Value added Establishing network Sales
Slide 69: China: structural growth drivers
Structural Growth Drivers Drivers of Demand Supervision Fostering Sound Development Alignment to economic / social goals Rapid expansion of urban middle class CBIRC - “1+4” Supervisory Policies State Council 57% urbanisation rate1 2x insurance penetration to 5%2 Healthy Development of Insurance Prot
Slide 70: Advantaged platform for value creation
Advantaged platform for value creation Established Multi-Distribution Agency: Active and performance driven 20% # of Agents growth1 兩个巨人 Banca: Insurance specialist tailored to partners 45% Banca NBP Growth1 A Partnership of 2 Giants Corporate – offers group life 31% Group APE Growth1 CITIC PRU Foot
Slide 71: Multi-dimensional delivery
Multi-dimensional delivery 2017 1.1m customers Scale and Discipline Geographical Multi- Operational Building in-depth distribution efficiency talent 18 branches expansion 18 bank partners NBP 2012- 2017 5.9 x APE 5,120 (¥2,321m) 45k agents 34% CAGR(2008-17) 13% / 8% Agency / Total Pre-tax Profit 201
Slide 72: Expanding presence
Expanding presence Life Insurance Health insurance Asset Management Pension “Protection nature” Healthcare spend AUM for insurance industry: Public Pension Gap2: Penetration 3%3 ¥7tn by 20204 ¥17tn1 ¥1.2tn Core business Separate vertical capability Enable wider investment Enterprise annuitie
Slide 73: Seizing the growth opportunity
Seizing the growth opportunity Geographic expansion Future ready distribution Relevant Customer Propositions Agency Identify Talent → Establish “Institution” Professional force Expansion to central and western Data driven performance management Expert advice, Premier CI & Replicable model efficient
Slide 74: Ready for next wave of growth
Ready for next wave of growth Expected: Differentiator: Expectation / Differentiator: NOW NOW TOMORROW Transforming Operation Customer Experience Era of Personalisation - segment led propositions Evolve capabilities Transfer capabilities - re-designing processes - trusted advisor - Efficiency gain -
Slide 75: Eastspring
Eastspring Guy Strapp Chief Executive Officer Eastspring Investments 122
Slide 76: Agenda
Agenda Guy Strapp Accelerate Eastspring – Strategic Update Chief Executive Officer Michelle Qi Enhance Distribution & Coverage – Capture Opportunities in Chief Investment Officer China Colin Graham Expand Investment Offering – Multi Asset Chief Investment Officer Multi Asset Solutions Solutions 123
Slide 77: Leading player in Asia
Leading player in Asia Accelerate Eastspring Asia’s Largest Retail Asset Manager #1 5 out of the past 6 years USD 24 195bn years Asian Fund House Assets Under Operating of the year Management history 3 out of past 4 years Note: ranked the #1 retail asset manager in Asia by Asia Asset Management in 5
Slide 78: 350+ investment professionals in Asia
350+ Investment Professionals in Asia Accelerate Eastspring Equity Fixed Income US $57 billion US $60 billion 69 Strategies 55 Strategies Luxembourg2 Global Global Regional Regional Single Country Single Country United Kingdom2 United States2 Representative office China4 59 Representative office Kor
Slide 79: Unrivalled footprint in Asia
Unrivalled footprint in Asia Accelerate Eastspring Indonesia Malaysia Singapore Vietnam Thailand China India Japan Korea Taiwan Hong Kong (onshore*) (onshore*) (onshore*) Aberdeen Standard Alliance Bernstein Allianz A.M. BNP Paribas I.P. DWS A.M. Fidelity Franklin Templeton HSBC Global A.M. JP Morga
Slide 80: Eastspring profile
Eastspring Profile Accelerate Eastspring Hong Kong 2% Others^ 2% AUM by Asset Class Vietnam 2% Indonesia 2% Taiwan 4% Singapore 52% Japan 4% China (JV) 4% Eastspring Investments Malaysia 5% USD 195bn Korea 6% September GAA 2018 Thailand 6% India (JV) 11% Quant MAS Alternatives Fixed Income Equity Ab
Slide 81: AUM has doubled in five years
AUM has doubled in five years Accelerate Eastspring FUM movement from 2014 - 2018 12,112 (14,055) (USD'm) 35,150 Source of Assets 12,112 (19,552) 11,232 35,150 29,662 11,232 Eastspring 26,618 Investments 29,662 USD 195bn 26,618 September 2018 Third Party Internal Life 2013 Dec 3P Net Flows Asia Life
Slide 82: Immense opportunity: strong structural growth story
Immense opportunity – strong structural growth story Accelerate Eastspring Asia asset management revenue Asia Tailwinds pool * ($bn) Our strengths % of wealth in cash and deposits 2017 – 2022e CAGR 11% Operating in 65% 120 112 37% 11 Asian markets 14% 100 Asia Pac North Western World class Value Equ
Slide 83: Progress made against key priorities in 2018
Progress made against key priorities in 2018 Progress in 2018 Accelerate Eastspring 18 New senior investment professionals hired Strengthen offering in existing asset classes and diversify Deepen investment styles capabilities Develop strategic product partnerships to complement gaps Capture o
Slide 84: Deepen investment capabilities: strong platform
Deepen Investment Capabilities – strong platform Accelerate Eastspring Fixed Alternatives Equities Multi Asset Quant GAA Income Singapore Singapore Singapore Singapore Singapore Singapore • Value Equities • Equity Income • Monthly Income Plan • Asian LCY Bond • Low Volatility Equity • Global • Asia
Slide 85: Deepen investment capabilities
Deepen Investment Capabilities Accelerate Eastspring Singapore US & Korea Japan Taiwan Malaysia Indo EMEA India China Thailand & HK Latam JV JV WFOE Equity Progress in 2018 Global/Asia investments FI (Offshore) Quant MAS 44 New products launched Others 6 Bespoke solution created for Equity our L
Slide 86: Deepen investment capabilities: continuous innovation
Deepen Investment Capabilities – continuous innovation Accelerate Eastspring 2002 2005 2008 2018 Fixed 1.2% since inception Income Launched 3-year track record 5-year track record First quartile over 3 years 16-year track record USD strategy US $300mn AUM US $800mn AUM US $8bn in AUM Launch Local Cu
Slide 87: Enhance distribution and coverage: TMBAM acquisition
Enhance distribution and coverage – TMBAM acquisition Accelerate Eastspring Asset Management Market Mutual Fund Penetration AUM (USD Bn) (% of AUM/GDP in 2017) TMB 11% 114 • 7th largest bank in Thailand in 340 13% terms of assets (USD26bn) with 265 432 branches and 6.4 million 68 207 62 customers 12
Slide 88: Transforming the way we work
Transforming the way we work Accelerate Eastspring Progress in 2018 Green Package (portfolio Portfolio Risk Tool and PRISM Full Aladdin and BNP Paribas Strategic reporting investment risk reporting) and (start of day risk exposures and middle office solution implemented solution with BNP Data Manage
Slide 89: Agenda
Agenda 1 Accelerate Eastspring – Strategic Update 2 Enhance Distribution & Coverage – Capture Opportunities in China 3 Expand Investment Offering – Multi Asset Solutions 4 Summary 136
Slide 90: Our presence in China
Our presence in China Enhance distribution and coverage JV CITIC-Prudential FMC Established in September 2005 Ranked #29 (excluding MMF) with AuM of USD 17bn* 5 Equity investment professionals with average of 13 years’ investment experience Eastspring Singapore Key funds include: Greater China Equit
Slide 91: Our China strategy
Our China Strategy Enhance distribution and coverage Investment China investors China investors Global investors flow -> investing in China -> investing offshore -> investing in China 2017: Equity Indices ~ US 2017: US $18 Tn Inc AUM Market US$ 193Bn Inclusion $300 bn* Size 2022E: US $30 Tn 2023E: B
Slide 92: Eastspring Shanghai WFOE
Eastspring Shanghai WFOE Enhance distribution and coverage Registered as PFM Launch 1st private fund (A-Share Equity Absolute Return Fund) 11 staff onboard 5 March 2018 By end 2018 2019 onwards 16 October 2018 By April 2019 Build fixed income and multi- asset investment teams Launch subseq
Slide 93: Established high quality growth equity team
Established high quality growth equity in < 12 months Enhance distribution and coverage Michelle Qi, CFA (17 years’ of industry experience) Chief Investment Officer - Equities, China BOCOM Schroders (2007 – 2018): Most recently as Deputy Head of Equity Investment and Head of QFII and QDII. Long-
Slide 94: First private fund launching in Q1 2019
First Private Fund – launching in Q1 2019 Enhance distribution and coverage Eastspring China A-Share Equity Absolute Return Fund Investment Style : - Top down macro/sector views + bottom up stock selection Investment Universe : - Primarily China A-share equities Target Investors* : - High Net Worth
Slide 95: Agenda
Agenda 1 Accelerate Eastspring – Strategic Update 2 Enhance Distribution & Coverage – Capture Opportunities in China 3 Expand Investment Offering – Multi Asset Solutions 4 Summary 142
Slide 96: Multi Asset Solutions is a $10.2 trillion market
Multi Asset Solutions is a $10.2 trillion market - growing at 14% annually 1 $450bn in Multi Asset 3 AuM in 2021 Multi Asset Solutions AuM in 2 Asia is $582 billion 1: Boston Consulting Group December 2016 143 2 : Boston Consulting Group December 2016 3: Source: Spence Johnson – APAC MA Funds, a tri
Slide 97: Competitor logos
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Slide 98: Competitor logos
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Slide 99: Competitor logos
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Slide 100: Asia becomes the largest equity market
1 z By 2027……. Asia becomes the largest equity market, 1 overtaking North America 2 Asia (ex Japan) bond market, as large as JGB Today - 415 million Millennials in China and 3 India > US and Western Europe workforce . 1: Morgan Stanley Institute for Sustainable Investing February 2015 report 147 2:
Slide 101: Eastspring Investments
> eastspring investments SS 7 — A member of Prudential plc (UK) g If
Slide 102: Progress update: people
Progress update in < 12 months Deepen investment capabilities – Multi Asset Solutions Colin Graham > 25 years of experience in Global and Asian multi asset solutions People CIO, Multi Asset Solutions at BNP Paribas. Prior to this, Managing Director, Co- Head of Global Multi Asset Strategies, Multi A
Slide 103: Process, platform and product
Progress update in < 12 months Deepen Investment Capabilities – Multi Asset Solutions Process Robust investment process Building on 15 years of asset allocation experience Platform Implementation of Aladdin supports growth ambitions Designing next generation of multi asset capabilities for Product A
Slide 104: Current Multi Asset Solutions offering
Current Multi Asset Solutions offering Deepen Investment Capabilities – Multi Asset Solutions #10 #13 Years Years Global Market Monthly Income Navigator Plan Global equity returns with Income focus - lower volatility Flagship Singapore fund First Quartile over 3 years* First Quartile over 3 years* #
Slide 105: Accelerate Multi Asset Solutions offering
Accelerate Multi Asset Solutions offering Deepen Investment Capabilities – Multi Asset Solutions Multi Asset Global Market Absolute Return Navigator Sustainable Cash +6% with capital preservation Sustainability focus with ESG screen Multi Asset Multi Asset Asian Income China Income solution to fulfi
Slide 106: Key messages
Key Messages Deepen Investment Capabilities – Multi Asset Solutions Changing client preferences Worldclass people, process and platform Increasing demand for Multi Sustainable growth and Asset Solutions revenues Enhancing strong investment offering in Asia Capitalising on structural Asian growth 153
Slide 107: Agenda
Agenda 1 Accelerate Eastspring – Strategic Update 2 Enhance Distribution & Coverage – Capture Opportunities in China 3 Expand Investment Offering – Multi Asset Solutions 4 Summary 154
Slide 108: Key messages
Key messages Accelerate Eastspring Capitalising on strong Asian structural demand story Unrivalled footprint across Asia Successfully executing on strategic priorities 155
Slide 109: Asia Innovation / Partnership Overview
Asia Innovation / Partnership Overview Nic Nicandrou Chief Executive Prudential Corporation Asia 156
Slide 110: Agenda
Prudential Asia Agenda Strategy & priority update Nic Nicandrou Delivery ahead of customer expectations Insurance operations Lilian Ng Bespoke product Ease of doing Engage and influence solutions business Expansion in China Multi-asset solutions Eastspring Guy Strapp Michelle Qi Colin Graham Health
Slide 111: Health showcase: Prudential Health Value-Added Services
Health showcase Prudential Health Value-Added Services 158
Slide 112: Asia's demographic trends
Asia Rising underinsured middle class and a rapidly ageing population US$5tr p.a. wealth creation in Asia, means Ratio of people working to those over 65 years Rising and under insured Asia’s demographic trends2 that 88 percent of the next billion entrants into of age to decline from 9.3 to 3.4 by 2
Slide 113: Rising healthcare demand from chronic diseases
Asia Rising healthcare demand and consumption due to chronic diseases Rising medical costs Asia current health expenditure (2013-2017)1,2,3 (US$bn) 941 Chronic diseases 60% of this burden 829 are expected to 781 will occur in 705 increase 57% by 643 emerging markets 2020 Disease Prevalence Diabetes
Slide 114: Pressure on public and individual resources
Asia Pressure on public and individual resources Most of the cost of healthcare sits in 66% two categories: people and timing Increasing lifestyle diseases from sedentary lifestyles driving Malaysia Non-communicable of costs are salaries diseases (NCD) are the Malaysians are most obese cause for 73%
Slide 115: Health and Protection is an important business priority
Asia Health & Protection is an important business priority Health & Protection new business (£’ APE, 2017) Credentials Other >5m Health customers regionally PRUhealth CI extended care (CIE) covering cancer, stroke & heart Singapore PRUvital Cover attack with mkt unique covering four types of pre- Be
Slide 116: To close the healthcare gap we need to increase awareness
Asia To close the healthcare gap we need to increase awareness Evolve offering from providing cover to wellness, health preservation/ improvement and treatment/recovery. % survivors at each age 100 Current Insurance Focus In a world with 80 over five billion mobile phones, 60 50% of the 40 populatio
Slide 117: Prudential's expanded health and wellness offering
Asia Prudential’s expanded health and wellness offering Using technology to make health accessible and affordable to all Transform the delivery of care from sick Risk Factor Identification care to wellness Prevent Health & wellness coaching Expand partnership with providers Prevent/ Postpone offerin
Slide 118: Exclusive Prudential and Babylon partnership
Asia Exclusive Prudential & Babylon Partnership Background Key Features Exclusive to Prudential Policyholders Company Background: UK-based HealthTech AI-Chatbot Health Personal Health Digital Twin company founded in 2013 by Dr. Ali Parsa Assessment Database Avatar Babylon’s Offering: AI-powered
Slide 119: Putting AI in the hands of the consumer
Asia Putting AI in the hands of the consumer Prudential & Babylon exclusive partnership: Step-change in health services in Asia User-Driven Healthcare Access Engagement Trust Scale Sick care, Personalised Breadth of Available 24/7 Healthcare, medical medical Lifestyle intervention conditions Instant
Slide 120: UK learnings: lower medical consumption
Asia UK Learnings – lower medical consumption and improved customer experience Remote telemonitoring 30-day readmissions 17% 180-day readmissions 13% - 19% Lower admission rates Wireless remote monitoring Admissions A&E 50% Better adherence attendance 12% 63% Efficient use of Bed days resource
Slide 121: Investing in broader health and wellness services
Asia Investing in broader health and wellness services Increasing accessibility to appropriate, quality and affordable care Launched in: Hong Kong Jul 2016 Other healthcare startups we are working with Singapore May 2017 95,000 units Malaysia Aug 2017 Vietnam Nov 2017 Philippines Apr 2018 Singapore
Slide 122: Asia Health Showcase, Babylon
Asia Health Showcase, Babylon Andrew Wong Dr Ali Parsa Chief Health Officer Chief Executive Officer Prudential Corporation Asia Babylon Health 169
Slide 123: Making healthcare accessible and affordable
We believe it is possible to make healthcare accessible and affordable and put it in the hands of every person on earth 170
Slide 124: Health value-added services implementation roadmap
Prudential health value-added services implementation roadmap Andrew Wong Chief Health Officer, Prudential Corporation Asia Agenda Prudential’s ambition on health value-added services Implementation roadmap across Asia Malaysia rollout 171
Slide 125: Prudential's ambition
Prudential’s ambition To protect people’s health and wealth leveraging Prevent-Postpone-Protect propositions Protect the health and wealth of customers by using AI to access affordable and quality healthcare Our Emerging Health VAS Ambition to Prevent, Postpone and Protect Against Illness 1 2 3 Life
Slide 126: Implementation roadmap
Implementation roadmap Progressively localise and launch in all markets Development of health value-added service features Babylon AI, Wellness, Chronic disease Expanded health Telemedicine Rewards management value-added features The approach is to go live initially with Babylon AI and telemedicine
Slide 127: Malaysia rollout: the market opportunity
Malaysia rollout The market opportunity Malaysia is a fast-growing economy with a young and increasingly digital population… …And we believe that Prudential’s digital health value- 15M #3 added services will provide a number of benefits for 32M POPULATION 45% UNDER 25 LABOUR FORCE HEALTHCARE SYSTEM
Slide 128: Go to market regional playbook
Go to market regional playbook Phased implementation approach to integrate Babylon and other value-added services Activities Addressable base • Government endorsement • Localisation Pre-Launch Employees Pre-Launch • Stakeholders’ engagement SEO • Local VAS partner selection Reviews Collateral + • Pr
Slide 129: Malaysia rollout: systematic implementation
Malaysia rollout Systematic implementation to maximise impact Pre-launch Pilot Launch Accelerate 19th Nov 2018 Feb 2019 Mar 2019 Q2 2019 onwards Activities • Government endorsement • User testing & feedback • Core features launch • Expanded features (wellness, (BNM, MoH) rewards, etc.) • Telemedicin
Slide 130: Malaysia rollout: localised platform
Malaysia rollout Localised platform for easy access to health value-added services Application Landing Page User Registration Page In Application Home Page 4 Splash screens with different Users are able to register using A home page with core function designs to attract different needs email or goog
Slide 131: Prudential app home page
Prudential app home page All health and Prudential information and services at your fingertip Advertisement Slider Quick Navigation This is the ad slider which will be This dropdown menu will allow rotating and show the latest news. direct access to the features available in the app. Getting Treatme
Slide 132: Featured Prudential app healthcare services
Featured Prudential app healthcare services Embedded core Babylon functionalities Access from home page Health Assessment Assesses the user’s current health and predicts future risk for some of the most common diseases, focusing on 4 key portions – body, nutrition, activity and mood. Digital Twin Ge
Slide 133: Closing remarks
Closing remarks Unprecedented demand for healthcare provision Public-private cooperation needed to close health gap New approach needed to increase consumer awareness and engagement Prudential’s use of AI-driven healthtech to make healthcare affordable and accessible 180
Slide 134: Showcases
Asia Showcases Distribution Efficiency Customer Fulfillment E-submissions Next best action & Claims AskPru Reflexive underwriting Agency workbench: Performance report: Point of sale Instant decision Cross-sell / up-sell Digital Servicing: Indonesia Malaysia Singapore Hong Kong David Wong Gerardine L
Slide 135: Asia Financial Update
Asia Financial Update Raghu Hariharan Chief Financial Officer Prudential Corporation Asia 182
Slide 136: Translating strategy into value
Translating strategy into value Multiple performance levers 1 Retention 4 Regular Renewal Jet claim Orientation Long Term premium4 premium8 rate2,4 >8,000 qualifiers Over 95,000 auto review, Launched OPUS in assess and pay units ( in 5 94% (of APE) £11.6bn, +22%7 >90% markets) Singapore (HNW proposi
Slide 137: Long Term Orientation
1 Long Term Orientation 184
Slide 138: Recurring premium income drives resilience
Long-term orientation Recurring premium income drives resilience Life weighted premium income (£bn)1,2 4.9x CAGRs 15.2 +17% MSCI Asia ex 13.1 Japan3 10.9 9.2 11.6 +18% 7.8 9.5 6.6 7.9 5.7 4.9 6.9 4.1 5.8 3.6 4.8 3.1 4.2 3.6 2.5 3.0 Renewal 2.1 3.6 3.7 +14% 2.3 3.0 1.4 1.6 1.8 2.0 New Business 1.0 1.
Slide 139: Consistent broad-based growth in renewal premiums
Long-term orientation Consistent broad-based growth in renewal premiums Renewal premium income (£bn)1 Q3 YTD update1 Contribution by entity2 £’bn 2007 2012 2017 8 markets >10% growth >1.0 0.5-1.0 22% 0.25-0.5 16% 20% <0.25 15% 18% 20% 16% 18% 20% 11.6 19% 9.5 9.2 16% 7.9 7.9 6.9 5.8 4.2 4.8 3.0 3.6
Slide 140: High regular premium mix drives compounding growth
Long-term orientation High regular premium mix drives compounding growth Expected present value of cumulative premiums from the 2017 new business sales (£bn)1 3.7 Total premiums 10% single 0.2 premium 18.1 > 5 times FYRP 3 15.6 Retention rate2 12.6 100% first >90% year regular 3.5 premium 3.5 2017 N
Slide 141: Diversified product mix with attractive economics
Long-term orientation Diversified product mix with attractive economics Product Mix Product cash flows4 Average case size (£)1,2 Cumulative cash per unit of APE by year *Illustrative 3,950 100% 75% 1,480 890 920 50% H&P Participating Savings PCA average 25% APE ~50% ~22% ~28% mix3 0% NBP ~70% ~20% ~
Slide 142: High Quality Growth
(Q@) High Quality Growth - NS,
Slide 143: H&P focus drives NBP growth
High Quality Growth H&P focus drives NBP growth New Business Profit (£m)1 2009-2017 CAGRs H&P NBP mix NBP = 20% 2017 = 70% APE = 16% 2009 = 59% 2,368 2,123 713 1,736 814 1,351 665 1,169 968 448 792 428 667 327 1,655 567 302 1,309 Par & 279 1,071 232 903 Savings 641 741 388 490 335 H&P 2009 2010 2011
Slide 144: NBP drives growth in future value
High Quality Growth NBP drives growth in future value Life Embedded Value - FY08 to FY17 (£bn)1,3 ~4x 0.8 20.9 (3.3) 1.3 5.8 (3.1) 14.3 VIF: 16.8 NBP added = 5.3 £ 11.2bn 2 VIF: 3.7 NW: 4.2 NW: 1.5 2008 closing Contribution of NB to New business strain Expected return Operating variances Cash remitt
Slide 145: Significant stock of future value
High Quality Growth Significant stock of future value Future Free Surplus emergence for long-term business (£bn)1 2017 FY EEV composition Undiscounted FS profile for all business in-force at FY175 Undiscounted NB FS profile3 £20.9bn Investment £484m Free Surplus Undiscounted Pre-2017 IF book 2017 NB
Slide 146: Compounding value and cash
High Quality Growth Compounding value and cash Life Free Surplus (£bn) Undiscounted stock build up1 In-force operating generation2 (excludes Investment in New Business) 37.8 >2x 2017 cohort 2013-2017 CAGR Proportion Stock Future 2016 cohort of new +14% 1.4 originally Free business 1.3 added Surplusa
Slide 147: Operating model drives long-term value
High Quality Growth Operating model drives long-term value at attractive returns Equity New Business Earnings & Cash H&P Mix3 IFRS Op Profit2 Shareholders’ Equity1 ~70% £22bn Reinvestment rate4 £1,975m 1/3 Return on EV2 Cumulative FSG6 Payback Period5 20% £9bn 3 Years 1. On an EEV basis as at 30 Jun
Slide 148: Portfolio Management
3 Portfolio Management 195
Slide 149: Portfolio Management: Hong Kong
Portfolio Management Hong Kong EEV Shareholders Equity (£bn)1,3 NBP (£m)2,3 IFRS Operating Profit (£m)3 8x 5x 3x Savings H&P 346 74% >60% 49% 108 2012 2017 2012 2017 Mix & Quality Product Customer 4.6 MCH Domestic Insurance Margin3 H&P 12x 33x 5x 5x Savings 4x 12x 2x HY 2018 Opening NB Inforce Non O
Slide 150: Portfolio Management: Hong Kong
Portfolio Management Hong Kong Quality of new business Quality of inforce In-force Free Surplus emergence2 MCH Domestic PHKL Value of inforce1 40 year total Average case size (£‘000)1 6 4.8 5.5 £14.8bn 38% No. of policies 125 86 211 62% (‘000)1 H&P APE Mix1 27% 23% 26% (+7ppt)5 (+3ppt)5 (+6ppt)5 Hea
Slide 151: Portfolio Management: Indonesia
Portfolio Management Indonesia EEV Shareholders Equity (£‘bn)1 IFRS Operating Profit (£’m)4 2x 2.6x NB Payback2 Insurance Margin4 2.3x 2 years 457 224 HY 2018 2012 2017 £205m, flat Opening 2012 EEV Closing 2017 EEV Value of inforce1 In-force Free Surplus emergence (£’bn)3 1.7x Yr 1-5 £1.4bn VIF adde
Slide 152: Portfolio Management: China
Portfolio Management China @50% EEV Shareholders Equity (£bn)1 NBP (£m)2 IFRS Operating Profit (£m)2 4x 6x 5x Savings 5x 91 ~40% H&P 62% 12x 18 39% 0.3 2012 2017 2012 2017 Mix & Quality Insurance Margin4 5.3x H&P APE Mix5 Regular Premium6 Opening NB Inforce Non Op Closing 2017 movements3 HY 2018 201
Slide 153: Portfolio Management: Asia excluding HK, China, Indonesia
Portfolio Management Asia3 excluding Hong Kong, China and Indonesia EEV Shareholders Equity (£bn)1 IFRS Operating Profit (£m)2 2x 1.8x 906 ~50% 514 2.6 2012 2017 NBP Mix 42% IFRS Op Profit CAGR4 32% 40% HY 2018 Opening 2012 NB Contribution Inforce growth & Non Op Closing 2017 11% EEV variances Movem
Slide 154: Portfolio Management: Eastspring
Portfolio Management Eastspring Funds Under Management (£bn)1 3.8x 139 Total net inflows: £57bn 45 7.5 22.5 37 27 60% Internal Client Mix 51% Internal 2009 Opening FUM Asia Life Third Party Non MMF MMF/UK/US Life Market movements & 2017 Closing FUM Others Margin on FUM2 Cost / Income Ratio2 Equity M
Slide 155: Value growth translating into earnings
Portfolio Management Value growth translating into earnings IFRS Operating Profit (£m)1 Contribution by entity (incl. Eastspring)2 3.8x £’m 2009 2013 2017 1,975 >350 2009-2017 CAGR 176 2.9x 250-350 1,720 +18% 150-250 149 1,497 50-150 135 1,269 106 <50 1,106 984 82 76 1,799 3.9x Sources of IFRS Opera
Slide 156: Q3 2018 performance
Financial Update Q3’2018 performance APE, £m (CER) NBP, £m (CER) Sales quality Q3 YTD Flat Q3 YTD + 15% Drivers of growth Regular premiums H&P mix + 6% + 9% + 28% + 23% Favourable Mix, Operational3 & Others + 13 ppt 94% 28% 9% 9% Regulatory & Economics + 2 ppt Q2 17 Q2 18 Q3 17 Q3 18 + 1 ppts Q2 17
Slide 157: Balanced portfolio and strong relative performance
Portfolio Management Balanced portfolio and strong relative performance Multinational / regional peer comparison of NBP / EV Equity1 IFRS operating profit and market position (£m)2,3 IFRS operating profit CAGR Market position 12.8% 984 1,975 +15% Eastspring 8% 9% +18% Philippines, Taiwan, Thailand 2
Slide 158: Capability Build
(@) Capability Build : NS,
Slide 159: Capability Build: value generation
Capability Build Value generation Performance levers Financial value1 Core business 1 Improve & optimize agency 2 Reimagine & reinvent partnerships 3 Operational efficiency New New Health & Protection Accelerate Opportunities 4 Narrow health & protection gap Capability 5 Health value added services
Slide 160: Capability Build: value generation
Capability Build Value generation Performance levers Financial value1 Core business 1 Improve & optimize agency 2 Reimagine & reinvent partnerships 10 6 3 5 9 Operational efficiency New 12 New 8 Accelerate Health & Protection Opportunities 4 Narrow health & protection gap 11 7 Capability 5 Health va
Slide 161: Multi-metric KPIs
(s) Multi-metric KPIs ~ —2
Slide 162: Strong progress across KPIs
Multi-metric focus Strong progress across KPIs New Business Profit (£m)1 IFRS Operating Profit (£m)1,2 Operating FSG (£m)1,2 4.2x 3.8x 5.0x 2,368 1,975 1,078 968 984 517 567 516 215 2009 2012 2017 2009 2012 2017 2009 2012 2017 H&P mix Countries > £150m New Business Strain (% of APE) 59% 66% 70% 0 2
Slide 163: Value accretion at attractive returns
Multi-metric focus Value accretion at attractive returns EEV shareholders’ equity (£m)1,2 Return on Embedded Value3 Cash remittance (£m)1 3.8x 16x 20.1% 645 21.9 18.0% 16.3% 341 9.5 5.8 40 2009 2012 HY18 2009 2012 2017 2009 2012 2017 1. Actual exchange rate basis. 2. Long-term business only. 210 3.
Slide 164: Translating strategy into value: Summary
Translating strategy into value Summary Clear performance levers to drive value Resilient business model with compounding future value Balanced regional portfolio of high return businesses Strategic choices are aligned to structural trends and deliver sustainable value 211