Prudential Plc · LSE:PRU
Prudential — Investor Presentation (November 2020)
34 slides from Prudential's investor presentation, November 2020
Slide 1: Prudential Corporation Asia Investor Presentation
Prudential Corporation Asia Investor Presentation November 2020 1
Slide 2: Forward-looking statements
This document may contain ‘forward-looking statements’ with respect to certain of Prudential's plans and its goals and expectations relating to its future financial condition, performance, results, strategy and objectives. Statements that are not historical facts, including statements about Prudenti
Slide 3: Content
Content Key messages Appendix (from HY20 results) 3
Slide 4: Group key take-aways
Group Key take-aways Economic growth Health & Savings Protection Asia Africa Demographics Policy Delivery of Value-added Digital shareholder value services Resilient HY20 Intention to Group to focus Structural Well positioned for results; fully exclusively on demand long-term Fast adapting & separat
Slide 5: Capturing structural opportunities with quality platform and new capabilities
Asia Capturing structural opportunities with quality platform and new capabilities Capturing Accelerating Amplifying High Resilience structural Pulse capabilities to quality through consumer demand rollout meet customer business diversified for H&P demand model platform 5
Slide 6: Capturing structural consumer demand for H&P
Asia Capturing structural consumer demand for H&P Growing awareness and demand for wellness and insurance 91% 46% 58% 59% 60% Hong Kong consumers Asian consumers Asian consumers Asian consumers Mainland Chinese would retain life insurance searched for new desire access to look for more visitors pref
Slide 7: Redefining Health: from insurer to health partner
Redefining Health From insurer to health partner Significant health gap Significant wellness gap Current Insurance All-in-one, personalised and on- Focus demand AI-powered app 3 80% of Asians don’t Enabling Asians 2 have insurance cover1 to live longer, healthier lives 1 Risk Factor Identification 1
Slide 8: Pulse by Prudential: end-to-end health and wellness platform
Pulse by Prudential End-to-end health and wellness platform Engagement through Pulse drives revenue streams through tailored solutions Engage Drive revenue 1 streams Onboard Trusted advisor and navigator - helping individuals achieve their personalised health Broader customer segments, access points
Slide 9: Pulse by Prudential delivery roadmap
Pulse by Prudential Delivery roadmap in first 15 months 22/09/2019 3Q 2020 Oct/Nov 2020 08/08/2019 07/02/2020 25/03/2020 23/04/2020 20/05/2020 Jun 2020 (cumulative Started AI Taiwan, Oct 2020 Available in Launch in Launch in Launch in HK & Launch in Launch in Launch in installs) marketing Myanmar, P
Slide 10: Pulse by Prudential gaining strong traction
Pulse by Prudential Gaining strong traction • Pulse by Prudential live in 13 markets and 10 • Launched 18 digital products including Dengue fever, • PRULeads: converting downloads into leads languages1 Credit Shield, Personal Accident, COVID-19 coverage2 • c.855k leads generated for agents from • 25
Slide 11: Amplifying capabilities to meet customer demand
Asia Amplifying capabilities to meet customer demand ~ 90% 110k 50 > 19k 17 Products can be Agent recruits2 in New products Bank branch access Branches out of 20 sold virtually1 9M20, up +7% launched in New partnerships with TMB, gained market 31% of agency cases sold YoY HY20, primarily SeABank, BF
Slide 12: High quality business model
Asia High quality business model 2m Total new customers $ 11.4 bn + 14% $ 220bn $ 37.3bn 2x Total weighted premiums Growth in IFRS operating profit1 Eastspring FUM Embedded Value Incremental new customers Asia Life FUM +15%2 Up 2x in 5 years3 from direct-to-consumers Total renewal +6%1 to $1.7bn to
Slide 13: Resilient performance through a diversified platform
Asia Resilient performance through a diversified platform against a volatile backdrop 7 14 5 5 Markets improved + 30% H&P APE mix Life businesses with Markets where NBP growth for Markets2 grew in double-digit APE banca APE was up YoY1 94% Sharia1 (Malaysia Takaful & Jun/May (Up 1.5X) growth in 2Q20
Slide 14: Well positioned for long-term profitable growth
Asia Well positioned for long-term profitable growth • Structural opportunities remain intact and have been reinforced by global pandemic • Accelerating consumer adoption of integrated Health and Wellness products and services through Pulse • Amplifying capabilities at pace to meet customer demand a
Slide 15: Content
Content Key messages Appendix (from HY20 results) 15
Slide 16: Leading pan-regional franchise
Asia Leading pan-regional franchise China9 Pru Asia footprint1 Japan >600k Agents 1,434m 127m >300 India10 Life & asset management Korea Taiwan distribution partnerships 1,366m Top 3 Top 10 51m 24m 1.4m New Pru life Myanmar customers11 Hong Kong Top 3 54m Laos 7m Top 3 Top 10 Position
Slide 17: Clear strategic priorities and quality execution in HY20
Asia Clear strategic priorities and quality execution in HY20 Strategic priorities • Leader in banca1 – enhanced with TMB banca agreement; access to >19,000 bank branches Enhance the core • 90% of products capable of virtual sales; 38% of agency cases sold virtually in 2Q • Agent management moving o
Slide 18: Enhance the Core: diversifying distribution partners, segments and products
Enhance the Core Diversifying into new distribution partners, customer segments and products Channels Core products Customer segment New distribution, product & customer segments High Net Worth NEW Estate Robo- • OPUS in Singapore APE of $25m planning investing • 101 Private Wealth consultants Consu
Slide 19: Accelerate Pulse Buildout
Accelerate Pulse Buildout Pulse is broadening our customer base, gathering new data and converting into sales Pulse: First-of-its-kind, all-in-one and AI-powered app Broadening customer base Majority of Pulse users are in 18-35 age group 35% 30% 27% Pulse services usage • >6 million Pulse downloads
Slide 20: Eastspring is a unique, structurally advantaged platform
Accelerate Eastspring Eastspring is a unique, structurally advantaged platform Overview Cyclical business but structurally advantaged due to reliable and consistent life business flows5 Unique platform • Top 10 in 7 out of 11 markets CAGR: ($ bn, AER) 14% 241 • Asia’s largest retail asset manager (e
Slide 21: Expand Presence in China
Expand Presence in China Significant growth potential from higher penetration Citic-Pru footprint (Dec’19) NBP3 (US$’m, 100% basis) Access to2 17 Straight ‘A’ score for CBIRC Integrated Risk 2019 524 Rating since 2016 (only JV) 2015 84 Top 10 ranked Chinese Life Insurers by 83% 77% 83% California St
Slide 22: Operating environment
Operating environment Several markets in restart mode with planned easing measures Restriction measures & timeline Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Current status of measures China Easing measures; internal travel and business activity resumed nationwide from 26 March with strict meas
Slide 23: Market highlights – China
Asia Market highlights – China Intact structural demand drivers Expansion of our platform ` Execution7 • Faster growth in GDP than advanced economies1 • Operationalised Shaanxi province • Presence in 20 branches, 97 cities (+3) and 234 APE • Rapid expansion of the middle class; significant (XX% indi
Slide 24: Market highlights – Hong Kong
Asia Market highlights – Hong Kong Intact structural demand drivers Enhancing our distribution capabilities ` Domestic Mainland Execution5 • Ageing population • 69% of MCH customers intend • Virtual sales of all products enabled in agency and (XX% indicates 2020 sales as a proportion of 2019 levels)
Slide 25: Hong Kong: Intact demand drivers for mainland Chinese customers
Asia Hong Kong: Intact demand drivers for mainland Chinese customers MCH visitors’ intention for financial products MCH visitors’ preference for medical treatment MCH visitors’ preference for medical treatment Note: Based on our 2Q20 MCH Sentiment Tracker conducted through online survey using Nielse
Slide 26: Market APE sales trends
Asia Market APE sales trends Markets returned to YoY growth in 2Q Markets with “April low” Markets with “May low” Markets (Thailand, Taiwan and Vietnam) where lockdown Markets (Malaysia, India, the Philippines, Cambodia and Laos) Markets (Indonesia and Singapore) where lockdown measures were introdu
Slide 27: Markets returned to year-on-year growth in 2Q
Asia Markets returned to year-on-year growth in 2Q ` ` ` Thailand Vietnam Taiwan Partnership momentum Enhancing distribution capabilities Profitable growth • 15-year exclusive partnership with TMB • SeABank partnership launched in April • Shift to higher-margin Par products (APE up +81%) • 22 % incr
Slide 28: Markets with 'April low'
Asia Markets with “April low” ` ` ` India Malaysia Philippines Focus on quality Continued to focus on quality Enhancing distribution capabilities • H&P APE +29%, sales mix +14ppts to 27% • 96% of APE from regular premiums • Agent count up 7%3 to 34k • Persistency at 83%, one of the best in industry4
Slide 29: Markets with 'May low'
Asia Markets with “May low” ` ` Indonesia # 1 Singapore # 1 Enhancing & diversifying distribution Overall & Continued focus on quality Overall regular • Agent recruits2 + 50%; agent count +13% to 285k agency3,4 premium sales3,5 • H&P APE +6%, sales mix +8ppts to 29% • # of MDRT +48% to >1,000; large
Slide 30: Indonesia: Broadening our capabilities
Asia Indonesia: Broadening our capabilities Intact structural drivers & premium franchise Enhancing our distribution capabilities ` • Rapid expansion of the middle class; significant Agency segmentation strategy Execution protection gap 1 2 Core agency 3 New / Rookie agents MDRT / Elite leaders Mark
Slide 31: Robust capital position
Asia Robust capital position Shareholder solvency1 ($bn) Total company solvency1,2 ($bn) 253% 308% 333% 312% 6.5 19.6 18.8 4.7 3.0 3.2 8.0 9.4 YE19 HY20 YE19 HY20 Minimum capital requirement LCSM surplus Minimum capital requirement LCSM surplus 1. Estimated position at 30 June 2020. Based on Group M
Slide 32: Asia invested assets: asset portfolio
Asia invested assets Asset portfolio Breakdown of Asia invested assets1, HY20 $bn Shareholder debt portfolio, HY20 $bn Shareholder- Holding by issuer Par funds Unit linked Total backed 2 Portfolio No. Av. Max <BBB5 $bn Issuers4 $m $m Debt 52.7 5.3 24.1 82.1 Sovereign debt 11.4 78 146.2 2,788.7 11.8%
Slide 33: Shareholder-backed debt exposures by geography and rating
Asia invested assets Shareholder-backed debt exposures By geography1, at 30 June 2020 $bn By credit rating1,2, at 30 June 2020 $bn Sovereign debt Other government bonds Corporate bonds 5% 21% By market: 8% Rating: 24% 15% United States AAA 41% Thailand 30% 35% AA 14% Vietnam A Other BBB 18% <BBB 24%
Slide 34: Shareholder-backed debt exposures by asset type and sector
Asia invested assets Shareholder-backed debt exposures By asset type1, 30 June 2020 By sector1,2, 30 June 2020 Corporate debt exposures Government 2% Diversified Basic Technology 3% Materials 7% Financial 3% 35% Corporate Other Bonds Sovereign 2% 47% 47% Consumer, Cyclical 4% Industrial 6% Energy 9%