Slide 1: Prudential plc 2021 Half Year Results
Prudential plc 2021 Half Year Results 11 August 2021 1
Slide 2: Cautionary Statements
This document may contain 'forward-looking statements' with respect to certain of Prudential's plans and its goals and expectations relating to its and Jackson’s future financial condition, performance, results, strategy and objectives. Statements that are not historical facts, including statements
Slide 3: Mike Wells, Group CEO
Mike Wells Group CEO 2021 HALF YEAR RESULTS 3
Slide 4: A clear, purpose-led strategy to drive growth
Prudential plc A clear, purpose-led strategy to drive growth Focus on China, India, Indonesia and Thailand Grow H&P by providing access to affordable health Delivering Position Eastspring to lead in Asia & drive ESG agenda Profitable Growth & Social Impact Our Objectives Make it easy for cus
Slide 5: Robust HY21 financial performance
Robust HY21 financial performance Building on track record of delivering sustainable shareholder value New business profit (AER)1,3,5, $m IFRS operating profit (AER)2,3,6, $m 2.2x 29% 4.1x 14% 3,667 10Y CAGR 10Y CAGR 8% 15% 2,201 1,729 1,969 1,176 1,011 912 895 FY10 FY20 HY20 HY21 FY10 FY20 HY20 HY2
Slide 6: Distinct competitive advantages
Prudential plc Distinct competitive advantages 1 China: Access to nearly whole of China 5 Pulse: Compelling digital strategy All-in-one, GDP & >80% personalised and GWP1 on-demand AI-powered app Engage Onboard Fulfilment 2 India: Top 3 Life and Asset Manager2 6 Agency: Leading agency force across th
Slide 7: Enhancing capabilities to accelerate growth
Prudential plc Enhancing capabilities to accelerate growth Broadening distribution Deepening presence Established Pulse capabilities in China ecosystem Enhanced agent quality & 20 branches and improved productivity presence in 99 cities 17 (15)10 Markets5,6 11.6k + % 19 81% Members1 Increase in APE
Slide 8: Strong broad based delivery despite challenging operating backdrop
Prudential plc Strong broad based delivery despite challenging operating backdrop Sharply higher new Covid cases in 2Q/1H 20211 Broad based results delivery2 500 Daily new cases per m people (2wk moving avg) Broad based APE and NBP growth 9 markets Double-digit growth 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 4
Slide 9: Market highlights
Prudential plc Market highlights China Hong Kong Indonesia NBP $ 228 m + 65% NBP $ 306 m -13% NBP $ 57m 17% - Malaysia Singapore Growth markets1 NBP $ 113 m + 59% NBP $ 215 m + 65% NBP $ 257 m 44% + Data as of HY21. YoY growth rates on a constant exchange rate basis 1. HY20 comparative excludes Afri
Slide 10: APE reflects the timing & scale of Covid-related restrictions
Group APE reflects the timing & scale of Covid-related restrictions Asia & Africa APE, % of prior year1 • Significant Covid restrictions continue – including in Indonesia, Malaysia, Thailand and the Philippines Momentum as More stringent • More stringent movement conditions recently introduced restr
Slide 11: Intended separation of the US business
US Intended separation of the US business Notice period Settlement Form 10 effective PLC Circular published Shareholder vote at GM Demerger completes2 6 August 2021 6 August 2021 27 August 2021 13 September 2021 Supplementary circular Prudential plc stock (relating to Interim results)1 commenc
Slide 12: Key messages
Group Key messages • Resilient performance and pandemic reinforces structural demand and social purpose • Enhancing capabilities to build on substantial competitive advantages • On track for proposed demerger of Jackson in September 20211 • Continue to consider raising new equity of around $2.5-3bn
Slide 13: Mark FitzPatrick, Group CFO & COO
Mark FitzPatrick Group CFO & COO 2021 HALF YEAR RESULTS 13
Slide 14: HY21 Financial highlights
Prudential plc HY21 Financial highlights 1. Growing Value 2. Growing Capital 3. Growing Earnings New business profit, $m Operating free surplus generation, Segment IFRS operating profit, $m Life & asset management $m3 +25% +9% +11% 939 1,176 1,017 1,112 1,781 1,969 HY20 CER 1,2 HY21 HY20 CER 1 HY21
Slide 15: Growing value: broad-based HY21 performance
1.Growing value Growing Growing Growing value capital earnings Broad-based HY21 performance: 9 markets delivered double-digit NBP growth New business profit HY21, by segment $m China JV Indonesia Singapore +65% (17)% +65% 228 69 215 138 57 130 +25% HY20 CER 1 HY21 HY20 CER 1 HY21 HY20 CER 1 HY21 Hon
Slide 16: NBP growth supported by quality focus and multi-channel distribution
Growing value Growing Growing Growing value capital earnings NBP growth supported by quality focus and multi-channel distribution platform Quality Diversification Growth Value APE, $m New business profit, $m Agency 88% APE APE by regular premium distribution +17% +25% Banca Other H&P Growth mkts 2,0
Slide 17: NBP drives EEV growth
Growing value Growing Growing Growing value capital earnings NBP drives EEV growth Group EEV development in HY 2021, continuing operations $bn1 0.1 0.9 (0.3) 1.8 (0.3) (0.2) 1.2 Group EEV operating profit 44.0 43.5 43.2 43.2 41.9 EEV continuing NBP Expected return, Asset Central costs Group EEV Divi
Slide 18: Eastspring operating profit +10%
Growing value Growing Growing Growing value capital earnings Eastspring operating profit +10% Funds under management, $bn IFRS operating profit, $m 1 Average FuM +6% CER vs HY20 2.2 % Mix +10% 4.5 (0.5) Internal 56% External net flows 254.0 External 33% 247.8 Equity +2.2 162 147 Bonds, other (2.7) E
Slide 19: Reinvestment of OFSG drives compounding value
2.Growing capital Growing Growing Growing value capital earnings Reinvestment of OFSG drives compounding value Every $1 reinvested created ~$4 of New Business Profit Holding company cash flow, HY21 $m Group OFSG, continuing operations HY21 $bn 31 December 2020 1,463 0.1 Total net cash remitted 1,035
Slide 20: GWS transition in-line with expectations
Growing capital Growing Growing Growing value capital earnings GWS transition in-line with expectations Building track record Capital generative Estimated shareholder % LCSM/GWS cover ratio ex Jackson1, 2018-HY21 Estimated shareholder GWS surplus development ex Jackson, HY21 $bn1 370% 383% Cover rat
Slide 21: Resilient GWS position
Growing capital Growing Growing Growing value capital earnings Resilient GWS position GWS resilient to macro stress High quality shareholder asset exposure Estimated group capital surplus ex Jackson, 30 June 2021 $bn1,2,3 Shareholder asset exposure, 2018 Group vs HY21 Asia, $bn Group Impact on HY21
Slide 22: Clear route to enhancing financial flexibility
Growing capital Growing Growing Growing value capital earnings Clear route to enhancing financial flexibility Targeting reduced debt leverage Moody’s total leverage ratio (%)1 31% Moody’s ‘AA’ 30% threshold 30% 25% 20% End 30June June2021, ex US 2021, Potential new equity Potential Potential debt re
Slide 23: Resilient, broad-based growth; H&P drives segment IFRS operating profit
3.Growing earnings Growing Growing Growing value capital earnings Resilient, broad-based growth. H&P drives segment IFRS operating profit Broad-based growth, at scale Compounding H&P business drives 11% growth High quality earnings HY21 IFRS operating profit by segment HY21 IFRS segment operating pr
Slide 24: Positive operating leverage as central costs reduce
Growing earnings Growing Growing Growing value capital earnings Positive operating leverage as central costs reduce Group IFRS result, $m • Segment profit +11%, adjusted op. profit +19% • Central overhead improvement reflects delivery HY20 HY21 % Growth (CER1) of $180m pa savings from 1/1/21. Furthe
Slide 25: HY21 financial performance: strategy translates into growth in value
Prudential plc HY21 financial performance: strategy translates into growth in value • Broad-based HY21 performance: 9 markets delivered double-digit NBP growth • NBP drives EEV growth. Group EEV continuing operations $43.2 billion • Continuing to reinvest at attractive returns; every $1 invested add
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Slide 27: Appendix
Contents: CEO appendix 28 Appendix CFO appendix 43 2021 Interim Results 2021 HALF YEAR RESULTS 27
Slide 28: CEO appendix
CEO appendix 28
Slide 29: Well positioned for further long-term profitable growth
Well positioned for further long-term profitable growth Diversified franchise, with leading presence in markets with favourable macro backdrop HY21 IFRS Life Eastspring Insurance Total health GDP growth adjusted position1 position5 penetration6 protection forecast8 operating gap7 profit China JV $13
Slide 30: Asian markets at different levels of restrictions
Operating environment Asian markets at different levels of restrictions 2020 Restriction measures & timeline 2021 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug China Taiwan Vietnam Thailand Hong Kong Malaysia India Philippines Indonesia Singapore Before Covid restri
Slide 31: Covid-19 vaccinations worldwide
Operating environment Covid-19 vaccinations worldwide Share of total population that has received at least one dose of Covid-19 vaccine 74% 69% 67% 57% 44% 44% 44% 43% 43% 33% 29% 28% 27% 18% 17% 15% 6% 11% 4% 3% Updated as of 1 August 2021 or latest available data. Source: University of Oxford - Ou
Slide 32: Asia: our distinct set of advantages
Asia Our distinct set of advantages Improving agent quality and productivity Expanding bancassurance > 28k 11 11.6k1 + 19% Bank branch access2 Asian markets with double-digit NBP growth Increase in APE 130 8 MDRT members, > up + 77% YoY per active agent2 Asian markets with banca Bank partnerships ma
Slide 33: Asia: our distinct set of advantages
Asia Our distinct set of advantages Extending China footprint Established ecosystem 20 branches and 81% 17 markets2,3 47 digital partnerships2 presence in 99 cities Agency margin Access to >80% of +73% c30m downloads2 $158m APE sales involving China’s GDP and GWP1 Banca NBP growth Pulse4 Market lead
Slide 34: China: leveraging strong strategic platform
China Leveraging strong strategic platform Distinct strengths Execution (Size of bars represents actual in $m; XX% indicates YoY growth) H&P: 26% Banca: Agency: Par: 3% Well 47% 53% PRODUCT CHANNEL Linked: 17% diversified +45% +29% Traditional: APE -5% businesses 54% NBP by channel NBP by product 44
Slide 35: China: our City Cluster model
China Our “City Cluster” Model CPL GWP CPL GWP CPL Banca GWP Mix %2 Agency Citic-Prudential Life (CPL) GWP1 CAGR Market Share % Channel3 Channel3 (1H16- China May-21 # of # of CPL 1H16 # of Agents 1H21) Market YTD Partners6 Outlets 3.2x $2.2bn $2.0bn Rest 41% 27% 54% 0.09%4 0.32%4 7,375 8 1,580 $1.8
Slide 36: India: strong performance in both life and asset management
India Strong performance in both life and asset management ICICI-PRU Life: Market leading franchise with strong momentum ICICI-PRU AMC: Top-3 player with diversified distribution • Strong YoY rebound for APE (+33%) and NBP (+41%) in 1H21 supported • Multi-channel distribution – retail customer Retai
Slide 37: Hong Kong: pivoting to domestic protection
Hong Kong Pivoting to domestic protection and managing all value levers Distinct strengths Execution (Size of bars represents actual in $m; XX% indicates YoY growth) • QDAP: Top 3 with c.15% market share1 Focus on • VHIS: APE >3X higher, following mid-tier VHIS product launch quality • Domestic new
Slide 38: Indonesia: resilience supported by broadening capabilities
Indonesia Resilience supported by broadening and strengthening capabilities Distinct strengths Execution • Total new policies up +67% YoY from higher standalone protection sales (Size of bars represents actual in $m; XX% indicates YoY growth) Growth amid • Standalone protection APE up 2.5x YoY; #1 r
Slide 39: Thailand: capitalising on new distribution opportunities
Thailand Capitalising on new distribution opportunities Distinct strengths Execution Launched Jan 1, 2021 (Size of bars represents actual in $m; XX% indicates YoY growth) • Covers 685 bank branches New • 5,500+ trained bank sellers distribution +44% +8% – TTB • Doubled our sales support team to 240
Slide 40: Singapore and Malaysia
Singapore and Malaysia Continued momentum supported by strong market positions Singapore Malaysia Continued focus on quality Continued focus on quality • H&P APE +31%, driving +65% overall NBP growth • IFRS operating profit +12%, driven by +10% renewal premium growth • Strong customer retention of 9
Slide 41: Vietnam and Philippines
Vietnam and Philippines Continued momentum supported by strong market positions Vietnam Philippines Enhancing distribution capabilities Enhancing distribution capabilities • Leader in banca with 17% market share1 • Active agents up +53% • SeABank partnership launched & MSB partnership expanded in Ap
Slide 42: Africa: ongoing business momentum
Africa Ongoing business momentum despite more challenging backdrop $66 million of APE sales Agency Bancassurance +15% >13,000 agents +57% APE sales growth1 Distribution +29% APE sales All markets working towards Optimising APE sales growth1 growth1 MDRT qualification strategic partnerships Refreshed
Slide 43: CFO appendix
CFO appendix 43
Slide 44: Diversified portfolio
Diversified portfolio Balanced new business and in-force mix PCA financial performance by segment Growth China JV New Business Adjusted IFRS mkts $m (CER)1 Profit Operating Profit EEV for LT Business4 New Business Profit, 1H21 1H21 1H20 1H21 1H20 30- Jun-21 31- Dec-203 Sing. HK Malaysia China JV 228
Slide 45: Resilience through diverse high quality platform
Resilience Through diverse high quality platform High regular premium mix Advantaged business Segment IFRS adjusted Regular premium (% of APE) Life weighted premiums, ($bn)1,2 operating profit, $m2 +2% 11.7 11.9 88% Hong Kong ($460m, +12%) 4.9 4.3 Singapore ($320m, +16%) 6.8 +12% 7.6 1H21 1H20 1H21
Slide 46: APE, NBP and Life weighted premiums
APE, NBP and Life weighted premiums Growth in 1H21 despite the more challenging environment APE, $m NBP, $m Life Weighted Premiums1, $bn Total: +14% +21% Total: +21% +30% Total: +4% 0% Ex-HK: +35% +27% Ex-HK: +64% +33% Shareholder- backed: +14% +9% 1,191 763 6.7 1,147 6.3 1,043 139 6.1 6.0 980 229 5
Slide 47: Medium term bond maturity profile
Group Medium term bond maturity profile • Balanced call date / maturity profile Prudential plc: debt maturity schedule1, principal value basis 30 Jun 2021 • Facilitates group debt management Maturity Next Call Date Callable Currency Coupon Amount (m) Type • All bonds in the table opposite n/a PERP/C
Slide 48: Prudential EV methodology
Prudential EV methodology EEV vs. TEV approach Prudential adopts EEV principles which: • Increase the transparency and consistency of reporting; • Measure the risk at product group level to better reflect the inherent market risk associated with products and • Improve disclosure around the degree of
Slide 49: PCA EV is built on prudent assumptions
PCA EV is built on prudent assumptions as demonstrated As demonstrated by our track record PCA Operating experience1 as % of opening EV PCA Economic experience2 as % of opening EV 2011 1.1% 2011 1.2% 2012 1.1% 2012 2.4% 2013 0.9% 2013 -0.5% 2014 0.9% 2014 1.7% 2015 0.7% 2015 -2.8% 2016 1.2% 2016 -0.
Slide 50: PCA value in Prudential joint ventures
Asia PCA value in Prudential joint ventures Partner ICICI Bank CITIC Corporation Prudential Share 22.1% 50% Market Value $ 12.3 bn ₹ 910.5bn1 N/A EV $ 3.9 bn ₹ 291.1bn2 $ 6.1bn (at 100%)3 IFRS NAV $ 1.2 bn ₹ 91.1 bn2 Not disclosed GWP $ 4.8 bn ₹ 357.3 bn4 $ 2.2 bn RMB 14.0bn6 (at 100%) Pre-tax opera
Slide 51: Asia and Africa invested assets
Asia and Africa invested assets Asset portfolio Breakdown of Asia invested assets1, 1H21 $bn Shareholder debt portfolio, 1H21 Par funds Unit linked Shareholder-backed2 Total Holding by issuer Debt 58.9 5.8 28.0 92.7 Portfolio No. Av. Max <BBB6 $bn Issuers5 $m $m Direct equities 10.5 13.0 2.6 26.1 So
Slide 52: Shareholder-backed debt exposures
Asia and Africa invested assets Shareholder-backed debt exposures By geography1, at 30 June 2021 By credit rating1,2, at 30 June 2021 Sovereign debt Other government bonds Corporate bonds 3% 13% 22% 13% By market: 26% Rating: 35% 42% United States AAA Thailand AA 14% Vietnam 1% A 35% Other 36% BBB 1
Slide 53: Shareholder-backed debt exposures
Asia and Africa invested assets Shareholder-backed debt exposures By asset type1, 30 Jun 2021 By sector1,2, 30 Jun 2021 Corporate debt exposures 2% 1% 1% By assets: 6% By sector: Sovereign Financial 6% Quasi Sovereign Bonds Consumer, Non-Cyclical Other Public Sector Bonds 7% 34% Utilities Corporate