Slide 1: Prudential plc 2014 Half Year Results
Prudential plc 2014 Half Year Results Delivering ‘Growth and Cash’ 12 August 2014 1 2014 HALF YEAR RESULTS
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: Agenda
Prudential plc 2014 half year results Agenda Business Review Tidjane Thiam - UK Life - Jackie Hunt Financial Review Nic Nicandrou Outlook Tidjane Thiam 3 2014 HALF YEAR RESULTS
Slide 4: Agenda: Group Performance
Agenda Group Performance Asia Jackson UK Life M&G Cash and Dividend 4 2014 HALF YEAR RESULTS
Slide 5: 2014 half year financial headlines
Group Cash & Asia Jackson UK Life M&G 2014 half year financial headlines Performance Dividend Strong performance on all key metrics Change Change £m HY 2014 HY 2013 CER1 (%) AER1 (%) IFRS operating profit 1,521 1,415 +17% +7% Growth New business profit2 1,015 913 +24% +11% EEV operating profit 1,943
Slide 6: Continuation of a strong track record
Group Cash & Asia Jackson UK Life M&G Group Performance Dividend Continuation of a strong track record New business profit1,3, £m IFRS operating profit2,3, £m 3.1x 3.0x CAGR CAGR +15% +15% 1,521 1,415 1,015 1,157 913 1,022 818 756 817 630 693 488 607 611 402 507 326 339 HY HY HY HY HY HY HY HY HY HY
Slide 7: Effective response to challenges
Group Cash & Asia Jackson UK Life M&G Group Performance Dividend Effective response to challenges IFRS operating profit1, £m 2008 2009 2010 2011 2012 2013 2014 • Liquidity crisis • Start of global • Greece and Ireland • Concern over China • US debt ceiling • Concern over China • Asia FX depreciation
Slide 8: Good progress
Group Cash & Asia Jackson UK Life M&G Group Performance Dividend Good progress 2017 Objectives Asia underlying free surplus1, £m Asia IFRS operating profit2, £m Free surplus of £0.9bn to £1.1bn At least 15% CAGR from 2012-17 £1.1bn £0.9bn 1,075 >£1,858m 573 924 484 201 292 302 435 512 525 2012 2013
Slide 9: Strategy
Group Cash & Asia Jackson UK Life M&G Group Performance Dividend Strategy Significant protection gap in Asia Transition of US ‘baby-boomers’ into retirement UK ‘savings gap’ and ageing population in need of returns / income 9 2014 HALF YEAR RESULTS
Slide 10: Disciplined capital allocation
Group Cash & Asia Jackson UK Life M&G Group Performance Dividend Disciplined capital allocation New business strain1,3, £m New business profit2,3, £m 1,015 +152% 913 145 818 100 756 116 630 108 376 311 +13% 97 488 288 298 396 382 402 86 364 235 339 319 337 20 297 22 42 92 35 UK UK 93 45 33 190 180 2
Slide 11: Disciplined capital allocation
Group Cash & Asia Jackson UK Life M&G Group Performance Dividend Disciplined capital allocation Asia Health and Protection APE1, £m Asia insurance margin2,3, £m H&P % 30% of Asia APE 679 640 600 589 501 483 410 392 321 262 251 233 8% 170 145 114 69 2006 2007 2008 2009 2010 2011 2012 2013 2006 2007 2
Slide 12: Disciplined capital allocation
Group Cash & Asia Jackson UK Life M&G Group Performance Dividend Disciplined capital allocation Jackson VA sales, $bn Jackson fee income1, £m 20.9 1,172 19.7 17.5 875 14.7 680 10.0 9.1 506 7.0 6.5 292 324 266 177 2006 2007 2008 2009 2010 2011 2012 2013 2006 2007 2008 2009 2010 2011 2012 2013 1 Compa
Slide 13: Disciplined capital allocation
Group Cash & Asia Jackson UK Life M&G Group Performance Dividend Disciplined capital allocation UK PruFund FUM1, £bn 10.2 9.1 7.5 5.4 4.1 2.5 0.9 0.1 0.3 2006 2007 2008 2009 2010 2011 2012 2013 HY 2014 1 Fund data uses the unsmoothed fund values 13 2014 HALF YEAR RESULTS
Slide 14: High quality earnings
Group Cash & Asia Jackson UK Life M&G Group Performance Dividend High quality earnings Sources of IFRS operating income1, £m CAGR +13% 2,267 2,067 5% 7% 5% 1,752 7% 24% +8% 1,594 7% 1,385 8% 9% 26% 11% 9% 1,097 12% 31% 988 34% 893 14% 33% 829 14% 32% 15% 14% 33% 17% 21% 64% +28% 23% 29% 62% 22% 33%
Slide 15: Relative performance
Group Cash & Asia Jackson UK Life M&G Group Performance Dividend Relative performance Growth in dividend per share1 2006 vs 2013 Prudential 96% UK Life Peers 23% average FTSE 100 -23% Financial Peers average 1 Based on FTSE 100 as of 31 Dec 2013. Rebase of 100 set in 2006. Source FactSet and Prudent
Slide 16: Agenda: Asia
Agenda Group Performance Asia Jackson UK Life M&G Cash and Dividend 16 2014 HALF YEAR RESULTS
Slide 17: Track record of successful execution
Group Cash & Asia Jackson UK Life M&G Asia Performance Dividend Track record of successful execution New business profit1,3, £m IFRS operating profit2,3, £m 2.5x 2.4x CAGR CAGR +20% +19% 525 494 429 440 361 377 313 306 262 246 199 220 HY 2009 HY 2010 HY 2011 HY 2012 HY 2013 HY 2014 HY 2009 HY 2010 H
Slide 18: Single premium sales are sentiment led and volatile
Group Cash & Asia Jackson UK Life M&G Asia Performance Dividend Single premium sales are sentiment led and volatile Asia – Single Premium APE, £m MSCI Asia ex Japan1 214 157 155 146 122 110 91 79 77 68 63 56 46 45 27 23 11 6 9 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 200
Slide 19: Regular premium focus drives resilient growth for PCA
Group Cash & Asia Jackson UK Life M&G Asia Performance Dividend Regular premium focus drives resilient growth for PCA Asia – Regular and Single Premium APE, £m 1,911 MSCI Asia ex Japan1 1,740 1,514 1,391 1,131 1,052 889 723 494 360 340 281 214 206 151 155 122 110 146 157 120 106 23 11 77 27 63 46 45
Slide 20: Asia performance
Group Cash & Asia Jackson UK Life M&G Asia Performance Dividend Performance Regular premium APE1, £m Single premium APE1, £m 900 15% 785 97 -2% 96 HY 2013 HY 2014 HY 2013 HY 2014 1 Comparatives have been stated on a constant exchange rate basis. 20 2014 HALF YEAR RESULTS
Slide 21: Decisive policy actions
Group Cash & Asia Jackson UK Life M&G Asia Performance Dividend Decisive policy actions Indonesia H2 20131 2014 YTD1 Change in Rupiah/GBP2 -25% +3% Central bank Interest rates Interest rate -43bp3 rises Equity markets4 -11% +19% 1 Movement in rates for H2 2013 from June end 2013 to December end 2013
Slide 22: Structural growth
Group Cash & Asia Jackson UK Life M&G Asia Performance Dividend Structural growth Emerging and developing Asia, Average GDP growth % 1.9 8.5 3x 6.6 Vs Advanced economies IMF Cyclical Potential Forecast1 component2 growth3 1 Source: IMF World Economic Outlook – April 2014. Average GDP growth 2014-201
Slide 23: Bancassurance
Group Cash & Asia Jackson UK Life M&G Asia Performance Dividend Bancassurance Hong Kong, Extended • Region’s most productive partnership Singapore, Thailand exclusivity • Renewal provides long term clarity Malaysia, Taiwan Indonesia Expanded • Strengthens existing relationships Philippines to exclus
Slide 24: Country update
Group Cash & Asia Jackson UK Life M&G Asia Performance Dividend Country update Hong Kong1 Singapore1 • 30% APE and 32% NBP growth in HY 2014 • Market leader for Shield products • Most productive agency sales force • Strong Agency performance • Successful launch of new critical illness • HNW NBP grow
Slide 25: Country update
Group Cash & Asia Jackson UK Life M&G Asia Performance Dividend Country update Thailand1 Philippines1 • Strong performance from Thanachart • Shift to regular premium products (APE +21%) • Doubled market share in 1 year • IFRS operating profits up 38% • IFRS operating profits up 2.5 times to £25m • R
Slide 26: Eastspring
Group Cash & Asia Jackson UK Life M&G Asia Performance Dividend Eastspring Funds under management1, £bn 22% 67 55 HY 2013 HY 2014 1 Comparatives have been stated on a constant exchange rate basis. 26 2014 HALF YEAR RESULTS
Slide 27: Strong delivery
Group Cash & Asia Jackson UK Life M&G Asia Performance Dividend Strong delivery IFRS operating profit1,2, £m Free Surplus Generation1,2, £m 19% 525 19% 302 440 253 HY 2013 HY 2014 HY 2013 HY 2014 1 Adjusted for new and amended accounting standards and excludes Japan Life. 2 Comparatives have been st
Slide 28: Summary
Group Cash & Asia Jackson UK Life M&G Asia Performance Dividend Summary • Structural fundamentals intact • Scale position in sweet spot markets • Strong management team • Confident on delivery 28 2014 HALF YEAR RESULTS
Slide 29: Agenda: Jackson
Agenda Group Performance Asia Jackson UK Life M&G Cash and Dividend 29 2014 HALF YEAR RESULTS
Slide 30: Proactive diversification
Group Cash & Asia Jackson UK Life M&G Jackson Performance Dividend Proactive diversification Jackson VA sales mix, $bn 20.9 19.7 2.4 17.5 31% 14.7 4.0 10.0 14.5 6.5 2008 2009 2010 2011 2012 2013 VA With Living Benefit Elite Access VA Without Living Benefit 30 2014 HALF YEAR RESULTS
Slide 31: Disciplined growth
Group Cash & Asia Jackson UK Life M&G Jackson Performance Dividend Disciplined growth Living benefit VA sales by quarter, $bn 10.0 9.0 8.0 7.0 6.0 5.0 Jackson 4.0 Quarterly average 3.0 2.0 1.0 0.0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2011 2012 2013 2014 31 2014 HALF YEAR RESULTS
Slide 32: Healthy in-force
Group Cash & Asia Jackson UK Life M&G Jackson Performance Dividend Healthy in-force Separate account value by S&P 500 level at policy issue <1% in the money at 30 June 2014 $129bn as of No Optional 30 June 20141 Benefit 9% Guarantee 4% 29% 6% GMDB 7% Below 62% 12% S&P 1400 14% 19% (≤1200) (1200-1300
Slide 33: Successful execution
Group Cash & Asia Jackson UK Life M&G Jackson Performance Dividend Successful execution Cumulative cash remittances, $m 2008 - HY 2014 $2,448m S&P 500 580 530 470 400 280 125 63 1 2008 2009 2010 2011 2012 2013 2014 HY RBC Ratio 438% 417% 483% 429% 423% 450% 1 Net remittances from Jackson include $19
Slide 34: Agenda: UK Life
Agenda Group Performance Asia Jackson UK Life M&G Cash and Dividend 34 2014 HALF YEAR RESULTS
Slide 35: Delivering through regulatory change
Group Cash & Asia Jackson UK Life M&G UK Performance Dividend Delivering through regulatory change Life IFRS operating profit, £m 374 25 New business 332 336 341 retail annuities 303 307 54 332 336 349 303 307 287 HY 2009 HY 2010 HY 2011 HY 2012 HY 2013 HY 2014 35 2014 HALF YEAR RESULTS
Slide 36: Leveraging strengths
Group Cash & Asia Jackson UK Life M&G UK Performance Dividend Leveraging strengths UK Bulk annuity market1 Prudential HY 2014 Bulk annuities, £m Scheme size <£100m >£100m 1,036 and <£250m 182 80 >£250m and <£500m 200 1,364 >£500m 69 Single Premium NBP Total market size: c£1.8tn 1 KPMG high-level ana
Slide 37: The UK business continues to evolve
Group Cash & Asia Jackson UK Life M&G UK Performance Dividend The UK business continues to evolve Market challenges Strategy UK’s ageing demographic & wealth Focus on changing customer needs concentration in the over 50s segment Risk transfer from Government and Broaden Retirement Income corporates
Slide 38: Agenda: M&G
Agenda Group Performance Asia Jackson UK Life M&G Cash and Dividend 38 2014 HALF YEAR RESULTS
Slide 39: Successful diversification
Group Cash & Asia Jackson UK Life M&G M&G Performance Dividend Successful diversification International FUM, £bn 27.9 32% 21.2 HY 2013 HY 2014 39 2014 HALF YEAR RESULTS
Slide 40: Successful diversification
Group Cash & Asia Jackson UK Life M&G M&G Performance Dividend Successful diversification Total FUM, £bn 254 244 228 198 201 174 1.9x External Internal 2009 2010 2011 2012 2013 HY 2014 External % 40% 45% 46% 49% 52% 52% 40 2014 HALF YEAR RESULTS
Slide 41: Strong track record
Group Cash & Asia Jackson UK Life M&G M&G Performance Dividend Strong track record M&G IFRS operating profit1, £m 3.0x 227 204 172 175 122 75 HY 2009 HY 2010 HY 2011 HY 2012 HY 2013 HY 2014 1 Excludes PruCap. 41 2014 HALF YEAR RESULTS
Slide 42: Agenda: Cash and Dividend
Agenda Group Performance Asia Jackson UK Life M&G Cash and Dividend 42 2014 HALF YEAR RESULTS
Slide 43: Free surplus generation
Group Cash & Asia Jackson UK Life M&G Delivering cash Performance Dividend Free surplus generation Free surplus and dividend, £m 2.4x Reinvestment Reinvestment rate 24% rate 26% Reinvestment Reinvestment rate 21% rate 26% Reinvestment 382 396 rate 27% 297 364 337 Reinvestment Reinvestment rate 34% r
Slide 44: Dividend
Group Cash & Asia Jackson UK Life M&G Delivering cash Performance Dividend Dividend Dividend, pence per share 33.57 +15.0% 29.19 +15.9% +5.6% 25.19 23.85 +20.2% 19.85 23.84 +5.0% 18.00 +5.0% 18.90 17.14 +5.0% 20.79 Total dividend 16.32 +5.0% 17.24 17.24 12.91 13.56 Final dividend 11.72 12.30 11.02 +
Slide 45: Agenda
Prudential plc 2014 half year results Agenda Business Review Tidjane Thiam - UK Life - Jackie Hunt Financial Review Nic Nicandrou Outlook Tidjane Thiam 45 2014 HALF YEAR RESULTS
Slide 46: HY14 continued strong performance
Key financial highlights Overview IFRS operating Free surplus generation Other items HY14 continued strong performance profit HY14 vs HY13 £m HY141 HY131 AER3 CER4 IFRS operating profit 1,521 1,415 7% 17% Free surplus generation 1,219 1,152 6% 13% New business profit2 1,015 913 11% 24% EEV operating
Slide 47: Currency translation effect
Currency mix Overview IFRS operating Free surplus generation Other items Currency translation effect profit IFRS operating profit1 Average FX rate movement HY14 vs HY13, % by currency, % HY14 Other Asia UK 17 sterling USD (8)% 21 Asia - US 17 dollar linked HKD (7)% 45 US dollar SGD (9)% Underlying f
Slide 48: Currency translation effect
Currency mix Overview IFRS operating Free surplus generation Other items Currency translation effect profit IFRS operating profit1, £m New business profit1,2, £m HY13 IFRS operating profit3 1,415 HY13 new business profit3 913 2,954 (3)% (47) (3)% (23) Impact of translating result on Impact of transl
Slide 49: Broad based growth
Key financial highlights Overview IFRS operating Free surplus generation Other items Broad based growth profit HY14 vs HY131, constant exchange rates Group Asia US UK M&G3 IFRS operating profit 17% 19% 20% 8% 11% Free surplus generation 13% 19% 23% (8)% 14% New business profit2 24% 15% 31% 45% n/a E
Slide 50: Growing profit and improving quality
IFRS – Group Overview IFRS operating Free surplus generation Other items Growing profit and improving quality profit IFRS operating profit1, £m (CER) Life IFRS1 operating profit up 20%, £m (CER) HY13 1,521 CER 1,285 1,296 Fee income 149 Insurance 188 income 17% Spread 58 income 974 Other 21 income E
Slide 51: Continued strong growth in Asia life profits
IFRS – Asia Overview IFRS operating Free surplus generation Other items Continued strong growth in Asia life profits profit Asia life1, shareholder-backed policyholder liabilities (CER2) Shareholder-backed In-force premium3 policyholder liabilities, £bn flows, £m IFRS operating profit1, by business
Slide 52: Eastspring profit up 24%
IFRS – Asia Overview IFRS operating Free surplus generation Other items Eastspring profit up 24% profit Eastspring, earnings drivers, £m (CER2) Fee income3, £m Cost / income ratio3 111 IFRS operating profit1, by business unit 98 63% 59% 13% £m, CER HY14 HY13 Change HY13 HY14 HY13 HY14 Asia 525 440 1
Slide 53: Jackson Life growth of 28%
IFRS – US Overview IFRS operating Free surplus generation Other items Jackson Life growth of 28% profit Jackson, sources of income2, £m (CER3) HY14 vs 23% 1,361 HY13 IFRS operating profit1, by business unit 1,107 27% +5% Spread 31% 24% +36% Technical 22% £m, CER HY14 HY13 Change 48% +28% Fee 46% Asi
Slide 54: UK Life growth of 10% in challenging market
IFRS – UK Overview IFRS operating Free surplus generation Other items UK Life growth of 10% in challenging market profit IFRS operating profit1, by business unit UK Life IFRS operating profit, £m £m, CER HY14 HY13 Change HY14 HY13 Total annuities 232 192 Asia 525 440 19% New business US 681 569 20%
Slide 55: M&G IFRS profit up 11%
IFRS – M&G Overview IFRS operating Free surplus generation Other items M&G IFRS profit up 11% profit M&G, earnings drivers Underlying fee income2, £m Cost / income ratio2 IFRS operating profit1, by business unit 421 463 54% 54% 10% £m, CER HY14 HY13 Change HY13 HY14 HY13 HY14 Asia 525 440 19% M&G, r
Slide 56: Increasing free surplus generation
Net free surplus generation Overview IFRS operating Free surplus generation Other items Increasing free surplus generation profit Free surplus generation1, £m, (CER2) Life in-force result, £m (CER2) HY14 HY13 Change HY14 HY13 Change Expected return from in-force 1,116 983 14% Asia 433 371 17% Experi
Slide 57: Underpinning cash to Group
Net free surplus generation Overview IFRS operating Free surplus generation Other items Underpinning cash to Group profit Movement in free surplus, £m Movement in central cash, £m x% Free surplus cover 201%1 5,160 202% HY14 HY13 Change (27) Asia 216 190 +14% 1,219 (974) 4,186 US 352 294 +20% 3,968 U
Slide 58: Operating return on EEV of 16%
EEV operating profit (post-tax) Overview IFRS operating Free surplus generation Other items Operating return on EEV of 16%1 profit EEV operating profit2, by business unit EEV Life operating profit2,3, £m (CER4) £m, CER4 HY14 HY13 Change 1,997 HY13 HY14 Total Life 1,997 1,673 19% 1,673 Unwind 647 749
Slide 59: Value creation through increasing NBP – up 24%
EEV operating profit Overview IFRS operating Free surplus generation Other items Value creation through increasing NBP – up 24% profit New business profit, £m (CER1) Movement in NBP, HY14 vs HY13 Volume +11% 1,015 Bulks +8% 69 Bulks Mix / pricing / other +3% 76 817 +45% Economic effect (excl FX) +2%
Slide 60: Summary of movement in shareholders' funds
Equity shareholders’ funds Overview IFRS operating Free surplus generation Other items Summary of movement profit Movement in shareholders’ funds IFRS Equity EEV Equity HY14 % vs HY14 HY14 % vs HY14 £bn HY13 per share £bn HY13 per share After-tax operating profit 1.1 7% 45 1.9 7% 76 Investment varia
Slide 61: Well capitalised and defensively positioned
Balance sheet Overview IFRS operating Free surplus generation Other items Well capitalised and defensively positioned profit Maintained capital strength • IGD surplus £4.1bn equivalent to a cover of 2.3 times (HY2013: £3.9bn) • With-profits estate of £7.5bn1 (1 January 2014: £6.8bn) • Group leverage
Slide 62: 2014 first half summary
2014 first half summary Overview IFRS operating Free surplus generation Other items profit Good progress across key financial metrics • Double digit growth in NBP, IFRS operating profit, free surplus generation and cash • Broad based performance across geographies Improving earnings quality • Increa
Slide 63: Agenda
Prudential plc 2014 half year results Agenda Business Review Tidjane Thiam - UK Life - Jackie Hunt Financial Review Nic Nicandrou Outlook Tidjane Thiam 63 2014 HALF YEAR RESULTS
Slide 64: Summary
Summary • Delivering “Growth and Cash” • Right strategy, right markets, right products • Disciplined execution • Well positioned to capture long term profitable growth from Asia 64 2014 HALF YEAR RESULTS
Slide 65: Q&A
Q&A 65 2014 HALF YEAR RESULTS
Slide 66: 2014 Investor Day
2014 Investor Day 1st to 4th December 2014 Singapore / Jakarta RSVP: Investor.Relations@prudential.co.uk
Slide 67: Appendix
Appendix 67 2014 HALF YEAR RESULTS
Slide 68: 2014 Interim dividend increased by 15%
Dividend 2014 Interim dividend increased by 15% Dividend, pence per share Total dividend 33.57 • Interim dividend increased by 15 per cent to 11.19 pence per share Final dividend 23.84 • Ex-dividend date: 20 August 2014 • Record date: 22 August 2014 • Payment of dividend: 25 September 2014 +15% 9.73
Slide 69: A clear strategy underpinned by clear operating principles
Strategy A clear strategy underpinned by clear operating principles Strategy Operating Principles Balanced Metrics & Disclosures US Build on Strength ASIA Accelerate Focus on Customers and Distribution UK Proactive Disciplined ASSET Focus Risk Capital MANAGEMENT Management Allocation Optimise 69 201
Slide 70: Asia long term opportunity
Asia Long term opportunity GDP per capita in 2010, against the US GDP per capita,1990 US$1 35,000 US GDP Hong Kong per capita 30,000 Singapore • Pan Asian leader: #1 by NBP2 25,000 Taiwan • Top 3 in 7 /11 Asian Countries3 Korea 20,000 • Market leading platform – Over 500,000 agents 15,000 – Access t
Slide 71: Favourable dynamics
Asia Favourable dynamics Prudential customers as a GDP 2015 GDP % of total population2 ($bn)2 growth (%)2 Indonesia (1995)1 0.9% 917 5.4 Philippines (1996) 0.2% 290 6.5 Sweet Spot markets Thailand (1995) 0.7% 397 2.5 Vietnam (1999) 1.4% 180 5.6 Hong Kong (1964) 11.5% 284 3.7 Malaysia (1924) 6.1% 329
Slide 72: Middle class contribution to GDP
Asia Middle class contribution to GDP Middle class in Asia (sweetspot)1, $bn 1,000 Lehman collapse Dotcom bubble SARS scare Mexico: Tequila crisis Asia currency crisis Russian Rouble crisis US Black Monday crash 0 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1
Slide 73: Growing demand for healthcare
Asia Growing demand for healthcare Household consumption by category1, % 100% = $1.3tn 6 Personal items 14 Recreation 3 Education 12 Transportation 3 Communications 5 Clothing 7 Healthcare 5 Household products 100% = $0.5tn 15 Housing 5 14 Discretionary 2 10 2 9 6 Semi-Necessities 6 13 31 Food Neces
Slide 74: Significant protection gap in sweetspot markets
Asia Significant protection gap in sweetspot markets Share of medical expenses paid out-of-pocket1, % 60% 59% 56% 56% 50% 42% 35% 35% 33% 31% 16% 11% 9% USA UK Japan 1 World Health Organisation – Global Health Expenditure Database (2011). For Hong Kong – Food and Health Bureau, Government of Hong Ko
Slide 75: Products meet customer needs and create shareholder value
Asia Life Products meet customer needs and create shareholder value Health and Protection – Out of pocket Annual premium for a customer aged 50 medical expenses1 (indexed) 143 123 19 117 114 100 73 Saving 100 81 27 Spend Without Basic Prudential Prudential Co. A Co. B Co. C Co. D insurance Governmen
Slide 76: Wealth and financial assets ownership
Asia distribution Wealth and financial assets ownership Breakdown of personal financial assets Life 12% 24% Non-Life 9% 39% Asset Mgt 9% 18% 20% 24% Bank 70% Deposits 21% 38% 16% Per capita Up to $2,000 to $15,000+ income level $2,000 $15,000 Source: Oliver Wyman analysis; Prudential analysis. 76 20
Slide 77: Affordable products underpin consumer demand
Asia Affordable products underpin consumer demand Prudential product premium1 Developed markets health insurance spend2 Healthcare spend as % of average annual income2 100% = average annual income 12% 11% 11% Linked 10% 46 premium Premiums paid = 9% of average annual 5.0% income H&P 54 premium Premi
Slide 78: Free surplus and cash remittances
Delivering cash Free surplus and cash remittances Underlying free surplus generated1, £m Business unit net remittances, £m +15% 974 +6% M&G 1,219 160 incl 1,152 844 PruCap 1,091 1,031 726 690 921 246 UK 460 609 375 352 US 216 Asia HY 2009 HY 2010 HY 2011 HY 2012 HY 2013 HY 2014 HY 2009 HY 2010 HY 20
Slide 79: Increasing free surplus stock
Cash and capital generation Increasing free surplus stock Evolution of free surplus, £m x% Free surplus cover 1,601 M&G 200 5,160 UK 303 201%4 (382) 202% (27) US 629 4,186 3,968 Asia 469 xxx (974) M&G3 506 M&G3 449 UK 1,130 UK 1,170 Underlying free surplus US 1,074 £1,219m US 1,163 Asia 1,275 Asia 1
Slide 80: UK and other net cash remittances
Net cash remittances UK and other Business unit net remittances, £m CAGR (UK Life + Other) +20% 728 618 496 425 268 263 265 246 237 230 226 197 97 107 HY 2008 HY 2009 HY 2010 HY 2011 HY 2012 HY 2013 HY 2014 UK Life Other 80 2014 HALF YEAR RESULTS
Slide 81: Central cash resources
Cash and capital Central cash resources Development of central cash resources, £m FY 2012 FY 2013 HY 2014 974 (155) 1,341 1,200 605 2,230 2,230 (610) (315) (289) 1,902 (537) Operating holding co 1,380 1,380 (781) cashflow +£209m 1,200 (655) (76) Operating holding co Operating holding co cashflow +£2
Slide 82: Group life APE
New business growth Group life APE Life APE1, £m +17%,CER H1 11: £1,824m H2 11: £1,857m H1 12: £2,030m H2 12: £2,165m H1 13: £2,162m H2 13: £2,261m H1 14: £2,300m 1,158 1,176 1,117 1,124 1,103 1,124 1,066 1,048 1,038 977 964 936 888 880 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3
Slide 83: Group life new business profit
New business growth Group life new business profit Life new business profit1, £m +24%,CER H1 11: £756m H2 11: £780m H1 12: £818m H2 12: £973m H1 13: £913m H2 13: £1,169m H1 14: £1,015m 660 547 529 503 509 486 444 435 426 410 407 383 349 336 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13
Slide 84: Group life returns on new business investment
New business growth Group life returns on new business investment Post-tax new business profit per £ of new business strain1 2.7 2.5 2.3 2.2 1.9 1.4 1.1 HY 2008 HY 2009 HY 2010 HY 2011 HY 2012 HY 2013 HY 2014 1 Free surplus invested in new business; excludes Japan. 84 2014 HALF YEAR RESULTS
Slide 85: Asia new business sales
Cash Asia New business sales Asia APE by quarter1, £m 2008 2009 2010 2011 2012 2013 HY 2014 1,174 1,209 1,501 1,660 1,897 2,125 996 602 569 515 513 513 507 495 489 456 443 435 429 404 403 376 367 359 354 353 325 296 282 279 276 274 248 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q
Slide 86: Asia Life APE by market
Asia Life APE by market Asia APE by market, £m (Constant Exchange Rate) +30% 258 +0% 198 +11% 184 184 172 155 +6% 86 91 -20% +33% +29% -6% +100% 57 60 54 43 48 47 44 +10% -12% 42 42 21 21 23 25 22 Hong Kong Indonesia Singapore1 Malaysia2 China 50%3 Taiwan Korea India 26%4 Thailand Vietnam Philippine
Slide 87: Asia Life APE sales by product
Asia Life APE sales by product Asia APE by product, % 3 3 3 4 2 2 4 3 4 5 3 3 3 3 3 5 4 5 6 5 5 5 7 7 8 7 9 8 9 7 14 18 19 21 17 19 20 23 26 27 29 30 30 28 25 26 33 33 18 33 33 35 34 31 34 34 33 35 35 17 18 38 40 20 20 19 22 30 24 27 27 24 30 27 25 31 29 32 24 34 30 33 34 30 29 32 30 31 29 28 62 60
Slide 88: Asia Life flows and persistency
Asia Life Flows and persistency Asia Life gross flows1,2, £bn Asia Life gross flows (ex-India)1,2, £bn 2.5 2.3 2.2 2.2 2.0 1.9 2.0 1.8 1.6 1.7 1.5 1.5 1.2 6.2% 5.6% 5.1% 5.2% 5.2% 4.7% 5.5% 4.8% 4.8% 1.0 4.4% 0.5 HY 10 HY 11 HY 12 HY 13 HY 14 HY 10 HY 11 HY 12 HY 13 HY 14 Surrenders/withdrawals as %
Slide 89: US retail sales and deposits
US retail sales and deposits HY 2014 Retail sales and deposits, $m HY 2013 = $13,152m HY 2014 = $14,843m $1,456 $457 $1,365 $439 $2 $304 $7,262 $8,711 $957 $2,492 $1,960 $1,532 $1,058 Fixed Annuities Variable Annuities – with living benefits Variable Annuities – w/o living benefits, non EA Elite Acc
Slide 90: US Life VA volumes
US Life VA volumes VA volumes by quarter, sales US$m 27% 28% 53% 46% 45% 42% 50% 46% 6,383 6,352 5,715 •‘Features War’ 5,656 5,473 1,136 1,356 5,258 412 5,189 4,974 218 1,124 1,094 4,553 4,565 991 4,383 4,427 4,176 4,212 715 836 3,686 3,658 3,756 3,335 3,134 2,909 2,368 2,370 2,324 2,250 2,052 1,780
Slide 91: Variable annuity distribution
US Life Variable annuity distribution Variable annuity sales by distribution channel, US$bn HY 2014 includes $2.5bn of Elite Access sales (HY 13, $2.0bn) 12.7 +24% 10.3 8.3 6.5 2.3 1.9 1.9 2.1 HY 2013 HY 2014 IBD RBD/Wirehouse Bank IBD: Independent Broker/Dealer, RBD: Regional Broker Dealer. 91 2014
Slide 92: New business margin
US Life New business margin New business margin (post tax), % APE 46% 43% 44% 24% 21% 12% Variable Annuities US Other HY 2012 HY 2013 HY 2014 92 2014 HALF YEAR RESULTS
Slide 93: DAC impact on results
US IFRS profit DAC impact on results Impact on results of DAC amortisation, £m 2013 HY 2013 HY 2014 Gross profits1 1,716 818 948 New business strain2 (198) (93) (103) DAC Amortisation - Core (485) (219) (249) - (Acceleration) / deceleration 82 20 10 Operating result 1,115 526 606 Core as % of Gross
Slide 94: Policyholder behaviour
US Life Policyholder behaviour Optional benefits elected, % of initial benefits elected (New business) 86% 82% 80% 79% 65% 66% 55% 42% 21% 21% 15% 11% 5% 6% 5% 5% 7% 6% 7% 2007 2008 2009 2010 2011 2012 2013 HY 2014 No benefit GMWB (for life) Elite Access 94 2014 HALF YEAR RESULTS
Slide 95: Asset growth
US Life Asset growth Growth in statutory admitted assets, US$bn HY 14 v 2013 increase: $13.8bn 184.7 170.9 Net Inflows: $7.8bn Market Movements: $6.0bn 142.8 122.2 107.6 108.8 97.5 80.1 81.0 76.7 69.3 70.9 58.8 62.8 48.9 55.6 30.0 33.3 50.9 22.3 20.9 43.0 46.6 14.7 40.2 7.1 10.4 4.4 5.6 5.1 62.7 62.
Slide 96: GMWB policyholder behaviour sensitivities
Resilient balance sheet GMWB policyholder behaviour sensitivities GMWB policyholder behaviour sensitivities, HY 2014 US$bn • Policyholder behaviour experience is continuously monitored and a comprehensive study is conducted on an annual basis 7,000 • For IFRS and Statutory accounting purposes, assum
Slide 97: IFRS impact 'below-the-line'
Hedging result IFRS impact ‘below-the-line’ 2014 half year VA hedge results, net of related DAC, £m 0 (100) (200) 110 (300) (288) 190 (400) (359) (500) (600) (229) (700) Equity hedge VA reserve Interest rate Non-operating IFRS net instruments changes hedges fee income, hedge result net of claims 97
Slide 98: Moving IFRS hedge result to 'economic' result
Hedging result Moving IFRS hedge result to ‘economic’ result 2014 half year VA ‘economic’ hedge results, net of related DAC, £m 50 291 0 20 (50) (61) (100) (150) (112) (150) (200) (250) (300) (288) (350) IFRS net Adjustment Fair value Adjustments to Other ‘Economic’ hedge results to full fees adjust
Slide 99: Moving reserves to 'fair value'
VA hedging Moving reserves to ‘fair value’ Guarantee Benefit Liability Supplemental Disclosure1, net of DAC, £m 200 157 0 (105) (200) (400) (600) (800) 19 (1,000) (1,081) (1,029) (1,010) (1,200) As recorded2 Change in Adjustment Revised liability, Volatility Hypothetical rates3 to full fees4 excludi
Slide 100: Capital, hedging and policyholder behaviour
Jackson Capital, hedging and policyholder behaviour Total adjusted Capital • Hedging programme continues to effectively US$bn mitigate risks 31 Dec 2013 4.8 • Total adjusted capital excludes gains on interest rate swaps: $220m at June 2014 (Dec 2013: loss of $1.2m) Operating profit 0.5 • Earned guar
Slide 101: Source of earnings
Life IFRS operating profit Source of earnings Technical and Spread income Fee income With-profits other margin The net investment The fees net of Profits derived from Our share of bonus return we make investment expenses the insurance risks of declared by the with- primarily on annuity charged on ou
Slide 102: Source of earnings
Life IFRS operating profit Source of earnings Technical and Income Spread income Fee income With-profits other margin Life Expected return on shareholder assets - +/- Expenses Life Acquisition Administration DAC Other costs expenses adjustments adjustments = Life Operating profit 102 2014 HALF YEAR
Slide 103: Source of earnings – Group (1/3)
Life IFRS operating profit Source of earnings – Group (1/3) Source Income Total Life income HY 2013 Life £m HYexcept 2014 reserves £bn+/- (CER) £m 3,075 2,659 16% - +/- Expenses Total Life expenses DAC adjustments Life (1,701) (1,535) (11)% 169 161 5% = Total Operating profit 1,543 1,285 20% Note: H
Slide 104: Source of earnings – Group (2/3)
Life IFRS operating profit Source of earnings – Group (2/3) Source Total Operating profit HY 2013 £m HYexcept 2014 reserves £bn+/- (CER) 1,543 1,285 20% £m except reserves £bn = Total Life income Total Life expenses DAC adjustments - +/- 3,075 2,659 16% (1,701) (1,535) (11)% 169 161 5% Technical and
Slide 105: Source of earnings – Group (3/3)
Life IFRS operating profit Source of earnings – Group (3/3) Source HY 2013 £m HYexcept 2014 reserves £bn+/- (CER) £m except reserves £bn Total Life expenses (1,701) (1,535) (11)% Acquisition costs1 Administration expenses (1,000) (917) (9)% (701) (618) (13)% Admin expense APE 2,300 1,974 17% ratio (
Slide 106: Life insurance - Asia
IFRS operating profit – source of earnings Life insurance - Asia Source Total operating profit HY13 HY14 (CER) +/- 483 406 19% £m except reserves £bn = Total Life income Total Life expenses DAC adjustments - +/- 1,220 1,091 12% (777) (693) (12)% 40 8 400% Spread Technical and income Fee income With-
Slide 107: Life insurance - US
IFRS operating profit – source of earnings Life insurance - US Source Total operating profit HY13 HY14 (CER) +/- 686 538 28% £m except reserves £bn = Total Life income Total Life expenses Expense deferrals - + 1,361 1,107 23% (810) (729) (11)% 374 344 9% - Spread Expected returns Fee income income D
Slide 108: Life insurance - UK
IFRS operating profit – source of earnings Life insurance - UK Source Total operating profit HY14 HY13 +/- £m except reserves £bn 374 341 10% = Total Life income Total Life expenses DAC adjustments - - 494 461 7% (114) (113) (1)% (6) (7) 14% Spread Technical and Expected returns Fee income income ot
Slide 109: Asset management
IFRS operating profit – source of earnings Asset management Source Asset Management HY 2013 Operating profit1,2 £m HYexcept 2014 reserves £bn+/- (CER) 269 238 13% £m except average assets £bn M&G Operating Eastspring profit investments 227 204 11% 42 34 24% Underlying income Other income3 Total expe
Slide 110: Life IFRS operating income – Asia
Life IFRS operating income – Asia Sources of income Asia IFRS operating income1, £m Growth % HY 2014 vs. HY 2013 (CER) 496 +18% 6% +35% 422 3% (25)% 5% 13% +27% 5% 12% 15% +7% 16% 63% +20% 62% HY 2013 CER HY 2014 Insurance margin Fee income Spread income With-profits Expected return on shareholder a
Slide 111: Life IFRS operating income – US
Life IFRS operating income – US Sources of income US IFRS operating income1, £m Growth % HY 2014 vs. HY 2013 (CER) +23% 1,361 1% +175% 1,107 27% +5% 1% 31% 48% +28% 46% 22% 24% +36% HY 2013 CER HY 2014 Insurance margin Fee income Spread income Expected return on shareholder assets 1 Excludes margin
Slide 112: Life IFRS operating income – UK
Life IFRS operating income – UK Sources of income UK IFRS operating income1, £m Growth % HY 2014 vs. HY 2013 410 +8% 381 18% +14% 17% 33% +2% 35% 27% 32% +28% 9% 8% (3)% 12% 9% (21)% HY 2013 HY 2014 Insurance margin Fee income Spread income With-profits Expected return on shareholder assets 1 Exclud
Slide 113: Higher quality earnings
Life IFRS operating income Higher quality earnings “Cash profit”1: Income2 – Expenses (before impact of DAC adjustment), £m 1.5x 1,701 1,703 1,520 1,388 3,075 2,925 1,255 2,448 2,222 1,991 1,374 1,374 1,215 1,222 834 834 928 928 736 736 Life Expenses “Cash Life Expenses “Cash Life Expenses “Cash Lif
Slide 114: Policyholder liabilities – Group
Policyholder liabilities Shareholder backed business – Group Policyholder liabilities1 roll-forward, £bn 6.3 188.1 5.0 (0.2) 180.1 (4.0) 176.1 0.9 Net inflows2 £5.7bn 3.2% of CER opening reserves of which: unit linked & separate account £4.2bn; other reserves £1.5bn Liabilities Foreign CER opening A
Slide 115: Policyholder liabilities – Asia
Policyholder liabilities Shareholder backed business – Asia Policyholder liabilities roll-forward1, £m 2,195 1,030 23,419 21,931 (433) (1,304) 21,498 Net inflows1 £891m 4.1% of CER opening policyholder liabilities Liabilities Foreign CER opening Premiums Maturities, Investment Liabilities 1 Jan 2014
Slide 116: Policyholder liabilities – US
Policyholder liabilities Shareholder backed business – US Policyholder liabilities roll-forward, £m 8,435 3,181 112,009 107,411 (3,560) (3,458) 103,851 Net inflows1 £4,977m 4.8% of CER opening reserves Liabilities Foreign CER opening Premiums Maturities, Investment Liabilities 1 Jan 2014 exchange li
Slide 117: Policyholder liabilities – UK
Policyholder liabilities Shareholder backed business – UK Policyholder liabilities roll-forward1, £m 2,094 2,048 52,687 50,779 (2,234) Net outflows1 £(140)m (0.3)% of opening reserves Liabilities Shareholders’ Shareholders’ Investment Liabilities 1 Jan 2014 Premiums maturities, deaths related and 30
Slide 118: Group 3rd party net-inflows
Asset management Group 3rd party net-inflows Asset Management movement in 3rd party FUM1, £m 3,239 153,849 2,483 150,610 4,211 143,916 Opening 3rd M&G Asia1 Sub-Total Investment Closing 3rd party FUM net flows markets/other party FUM 1 Excludes Asia MMF. 118 2014 HALF YEAR RESULTS
Slide 119: M&G net retail sales
Asset Management M&G net retail sales Average monthly gross and net retail sales, £m 3,000 2,500 2,000 1,500 1,000 500 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 HY 2014 Gross sales Net sales 119 2014 HALF YEAR RESULTS
Slide 120: M&G – retail FUM
Asset Management M&G – retail FUM Retail funds under management, £bn 16% 16% 21% 19% 26% 35% 39% 43.5 44.0 40.4 36.0 33.5 26.1 27.9 23.7 16.0 14.5 9.0 8.2 3.1 5.0 2008 2009 2010 2011 2012 2013 HY 2014 UK / Other Europe X% Europe FUM as % of Retail FUM 120 2014 HALF YEAR RESULTS
Slide 121: IFRS shareholders' funds HY 2014 movement
IFRS shareholders’ funds HY 2014 movement Analysis of movement in IFRS shareholders’ funds, £m +16% 527 10 20 11,235 1,521 (45) (117) (44) (8) 10,625 (279) (610) 9,650 Shareholders’ Operating Short term Amortisation of Cost of Tax Net movement FX impact (net Actuarial loss / Other1 Sub-total Dividen
Slide 122: EEV shareholders' funds HY 2014 movement
EEV shareholders’ funds HY 2014 movement Analysis of movement in EEV shareholders’ funds, £m +7% 432 1,943 10 84 26,503 (368) (66) 25,893 (377) 24,856 24,845 (610) (11) Shareholders’ Domestication of Restated Operating Profit Short term Economic Mark to market Actuarial gain FX impact (net Other Sub
Slide 123: Life operating variances – Group
EEV operating profit Life operating variances – Group Group Life operating variances, £m Experience variances and assumption changes % opening EEV1 0.0% 0.9% 0.3% (0.4)% 0.4% 0.9% 1.2% 1.0% 1.0% 749 706 632 584 566 493 500 432 358 229 221 234 166 101 64 40 (3) (60) HY 2006 HY 2007 HY 2008 HY 2009 HY
Slide 124: In-force performance
EEV operating profit In-force performance Asia in-force1, £338m US in-force, £401m UK in-force, £243m +4% +1% +19% 96 108 113 101 19 14 14 0 (7) (3) Persistency & Mortality / Spread Other Total variances withdrawals Morbidity and items / other Other items HY13 HY14 X% In-force change from HY13 to HY
Slide 125: Life operating variances – Asia
EEV operating profit Life operating variances – Asia Asia Life operating variances, £m Experience variances and assumption changes % opening EEV1 (0.4)% 0.7% (0.4)% (1.9)% (0.8)% (0.3)% 0.1% 0.1% 0.1% 328 315 286 254 250 197 151 113 91 19 10 12 11 (8) (16) (22) (47) (98) HY 2006 HY 2007 HY 2008 HY 2
Slide 126: IGD capital movement during the period
IGD capital Movement during the period IGD capital – movement in first half of 2014, £bn IGD surplus 31 December 2013 5.1 Net capital generation 0.8 Reduction in SHIFT asset allowance1 (0.2) Upfront fee for renewal of Standard Chartered distribution agreement (0.7) Market movement 0.1 Fx impact (0.1
Slide 127: Invested assets Group overview
Invested assets Group overview Breakdown of invested assets – HY 2014, £bn Total PAR Unit- Shareholders Group Funds Linked Asia Life US Life UK Life Other Total Debt securities 134.2 56.1 9.8 6.9 30.6 28.8 2.0 68.3 Equity 130.6 32.1 97.4 0.7 0.3 0.0 0.1 1.1 Property Investments 11.8 9.4 0.7 0.0 0.0
Slide 128: Group shareholder exposures – Sovereign debt
Invested assets Group shareholder exposures – Sovereign debt Breakdown of the shareholder debt securities portfolio, % SH sovereign exposures by regions & ratings1, £m US UK Europe Asia Other Total AAA - 3,474 356 511 3 4,344 AA-BBB 3,125 - 126 1,745 47 5,043 Below BBB - - 983 - 983 Total 3,125 3,47
Slide 129: Group shareholder exposures – hybrid bank debt
Invested assets Group shareholder exposures – hybrid bank debt Breakdown of the shareholder debt securities portfolio, % Exposure to Tier 1 and Tier 2 hybrid bank debt, £m Other Banks US UK France Germany “PIIGS” Eurozone Other Total Total 2.7% Tier 2 453 644 74 63 23 58 290 1,605 £68.3bn Tier 1 32
Slide 130: Total PIIGS sovereign and bank debt of only £290m
Resilient balance sheet Total PIIGS sovereign and bank debt of only £290m Breakdown of the shareholder debt securities portfolio, % Shareholder invested assets – PIIGS countries as at 30 June 2014, £m PIIGS sovereign Sovereign Bank debt & bank debt Institution Covered Senior Tier II Tier I Total BCP
Slide 131: UK asset quality – credit reserve
Invested assets UK asset quality – credit reserve UK shareholder debt securities portfolio by rating1 Strength of the £1.9bn credit reserve BB or below 2% AAA • No defaults of shareholder-backed debt BBB securities 14% 21% • Allowance for credit risk as at 30 June 2014 materially in line with prior
Slide 132: US asset quality – corporate debt portfolio (1/3)
Invested assets US asset quality – corporate debt portfolio (1/3) US Shareholder Debt Securities Portfolio Market value, £bn £30.6bn Corporate Bond Portfolio, % by rating Other <1 CMBS 2 BB and AAA and RMBS 2 below AA Govt 3 5% 4% HY 1 A 43% Total 39% A or £22.9bn above 52% Corporate BBB IG 22 Bonds
Slide 133: US asset quality – corporate debt portfolio (2/3)
Invested assets US asset quality – corporate debt portfolio (2/3) US Shareholder Debt Securities Portfolio Market value, £bn £30.6bn Investment Grade Corporate Bond Portfolio, % by sector Other <1 CMBS 2 Automotive 2% 2 RMBS Utility Banking Govt 3 Basic • Portfolio spread Industry HY 1 Telecom 13% 6
Slide 134: US asset quality – corporate debt portfolio (3/3)
Invested assets US asset quality – corporate debt portfolio (3/3) US Shareholder Debt Securities Portfolio Market value, £bn £30.6bn High Yield Corporate Bond Portfolio, % by sector Other <1 CMBS 2 2 RMBS Automotive Basic Utility Industry Govt 3 • Portfolio spread HY 1 Telecom 5% 3% 11% Capital acro
Slide 135: US asset quality – RMBS portfolio
Invested assets US asset quality – RMBS portfolio US Shareholder Debt Securities Portfolio Market value, £bn Breakdown of the RMBS portfolio – £bn £30.6bn Other <1 2 Market Value £m FV Price CMBS 2 2006/07 <1 3 RMBS 2005 2 70 Govt 3 Pre 2005 46 89 HY 1 1.6 0.8 0.2 0.1 0.2 0.2 <0.1 Corporate IG 22 To
Slide 136: US asset quality – CMBS portfolio
Invested assets US asset quality – CMBS portfolio US Shareholder Debt Securities Portfolio Market value, £bn CMBS portfolio, % by rating £30.6bn Other <1 CMBS 2 BB and 2 RMBS lower = 1% BBB • Average credit enhancement Govt 3 of the non-agency portfolio HY 1 8% is 32% 22% AAA • 94% of the portfolio
Slide 137: US asset quality – commercial mortgage loan portfolio
Invested assets US asset quality – commercial mortgage loan portfolio Breakdown by property type, % • High level of diversification Other 2% – Average loan size of £6.5m Hotels – Spread across property type 9% Industrial – Geographic diversification 29% • Strong underwriting discipline Retail – Port
Slide 138: Currency mix 2014 half year
Currency mix 2014 half year IFRS operating profit, New business profit, EEV operating profit, Underlying free surplus % % % generation, % Other Asia Other Asia UK sterling Other Asia UK sterling Other Asia UK sterling Asia - US UK sterling dollar linked1 17 19 14 18 15 14 21 11 38 17 37 27 30 40 45
Slide 139: Currency translation sensitivities
Currency mix Currency translation sensitivities IFRS operating profit IFRS operating profit1, £m by currency, % FY13 Other Asia UK FY13 IFRS operating profit3 2,954 sterling 2,954 17 20 Impact of translating result on (3)% (82) 2014 half year average rates Asia - US 19 (4)% (111) 2,698 dollar linked
Slide 140: Currency translation sensitivities
Currency mix Currency translation sensitivities New business profit New business profit, £m by currency, % FY13 UK sterling Other Asia 11 FY13 new business profit3 2,082 24 2,082 (2)% (44) Impact of translating result on 2014 half year average rates 34 (6)% (116) Asia - US 31 US dollar FY13 new busi
Slide 141: Prudential plc 2014 Half Year Results
Prudential plc 2014 Half Year Results Delivering ‘Growth and Cash’ 12 August 2014 141 2014 HALF YEAR RESULTS