Slide 1: Senior Debt Investor Presentation
Prudential plc Senior Debt Investor Presentation Marketing Road Show April 2020
Slide 2: Forward-looking statements
This presentation 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 Prud
Slide 3: Executive Summary
Executive Summary ` • Global insurer and financial services holding company focused in the life insurance and asset management sectors Prudential plc • Over 20 million1 customers worldwide • Issuer senior debt credit rating of A24/A5 from Moody’s and S&P ` Global Brand ` • Serving the protection and
Slide 4: Overview of Prudential plc
Prudential plc Overview of Prudential plc Senior Debt Roadshow April 2020
Slide 5: Prudential plc - Globally Diversified Group
Prudential plc - Globally Diversified Group A diverse global group with leading positions in structural growth markets • Diverse global portfolio of market-leading businesses in markets with good growth potential • Local competitive advantages driven by best-in-class product capabilities, customer e
Slide 6: Prudential plc - Asia
Prudential plc – Asia Leading pan-regional franchise Life Top 3 Pru Asia footprint1 China9 Japan Eastspring Position in 9 of 13 1,434m 127m life markets1,2 >300 India Korea Life & asset management Taiwan12 distribution partnerships 1,366m Top 3 Top 10 51m 24m 1.4m Myanmar New Pru life cu
Slide 7: Prudential plc - US/Jackson
Prudential plc – US/Jackson Well placed to capitalise on market opportunity Structural trends Platform Execution Ageing population1 Market leading distribution Growing in advisory channel Population over 65 footprint • Partnership with DPL Financial Partners - (millions) • Largest annuity wholesalin
Slide 8: Prudential plc - Africa
Prudential plc – Africa Regional footprint and growth prospects Population of Africa1 Ghana 2014 Acquisition of Express Life 2015: Distribution partnership with Société Générale 1.3 bn 2.3 bn 2015: Distribution partnership with Fidelity Bank 2016: Distribution partnership with CAL Bank 2019 2045 201
Slide 9: Active portfolio manager
Group Active portfolio manager – c.$7bn invested in Asia since 20131 2013 Capital allocated to highest value opportunities Strategic exits Investments Renewal of SCB2 banca Entered Africa Acceleration in investment Japan sale # of businesses7 with 1,311 4 8 profits >$150m Entered Laos Stopped writin
Slide 10: Group
Prudential plc Prudential Group Senior Debt Roadshow April 2020
Slide 11: Selected performance metrics: continuing operations
Group Selected performance metrics: continuing operations $m FY18 (CER1) FY19 Change % New business profit 3,460 3,522 2% EEV operating profit2 6,052 6,138 1% Operating FSG2 1,567 1,772 13% Asia Embedded Value 32,0083 39,235 23% Adjusted IFRS operating profit2 2,872 3,276 14% Remittances3 450 525 17
Slide 12: Central cost base to reduce post M&G demerger
Group Central cost base to reduce by c.$180 million post demerger of M&G plc2 in October 2019 Group IFRS result, $m FY18 FY19 Change % (CER) Asia 2,872 3,276 14 US 2,563 3,070 20 Total segment profit continuing operations 5,435 6,346 17 Asia and US segment profit up 17%. No impact from M&G demerger.
Slide 13: Strong liquidity position post M&G demerger
Group Strong liquidity position post M&G demerger Movement in holding company cash $m FY19 Hold co. cash period start 4,121 Net remittance to Group • High 2019 opening cash balance held in preparation for M&G demerger Asia 950 • Post M&G demerger, a lower level of liquidity held centrally US1 509 •
Slide 14: Conservative asset portfolio
Diversified Investments Conservative asset portfolio Breakdown of Asia invested assets1,2, FY19 $bn Breakdown of US invested assets, FY19 $bn Shareholder-backed Shareholder-backed Par funds Unit linked Total Asia Life US life Debt 44.8 5.2 24.6 74.6 Debt 58.5 Equity 29.4 19.0 3.6 52.0 Equity 0.2 Pro
Slide 15: Asia
Prudential plc Asia Senior Debt Roadshow April 2020
Slide 16: Asia Strategy
Asia Strategy Strategic priorities ` • #1 agency force in HK; 35% increase in MDRT qualifiers ex-HK • Reboot of Indonesian distribution and product set Enhance the core • Leader in banca1 – enhanced with UOB (APE +24%)2 & SeABank (20Y exclusive)3 • Broadening product offering: developed >160 product
Slide 17: Key success factors driving growth
Asia Key success factors driving growth Capabilities/Competitive advantages ` ` ` ` Low insurance Par Fund1 Eastspring3 China & mutual fund Large UK-style with profits penetration funds 1st 2 branches 8.0 8.2 $241bn of AUM Access to: 6.8 6.7 c.80% contributing Benchmark2 % 5.6 5.2 Rapid growth of 4.
Slide 18: Diversified high quality portfolio
Asia Diversified high quality portfolio Diversified High quality Other Hong Kong +24% Banca Agency Indonesia (3)% 93% 45% FY19 Singapore +14% Channel (% APE) $ 3,276m Regular Repeat sales premium as % Linked +14 Eastspring +18% of APE % H&P Malaysia +10% Non Par Vietnam +20% 90% 67% China +20% Par T
Slide 19: Resilient and compounding business
Asia Resilient and compounding business Compounding1,2,3 Resilient growth in earnings & cash1,2,3 4x 18% 2,993 CAGR 23,845 CAGR 10% ` 2018 to 2019 13% IFRS operating YoY growth, % New business profit, $m 14% 16% 583 Renewal premium 2009 2019 21% 1,522 CAGR ` Free surplus 2018 to 2019 5,677 generatio
Slide 20: Compounding new business profit drives growth in EEV
Asia Compounding new business profit drives growth in EEV Movement in embedded value, $bn 39.2 0.3 2.1 (1.0) 2.3 3.5 32.0 • Regular premium focused EEV Operating return $6.1bn, RoEV 19%2 • H&P and capital-efficient UK style with-profit funds FY18 closing1 NBP In-force return Asset Net Non operating
Slide 21: Resilient in-force growth drives IFRS operating profit
Asia Resilient in-force growth drives IFRS operating profit Insurance margin & fees Renewal premiums, $bn IFRS operating profit, $bn drive IFRS income1 5% 8% 25% +12% +14% 59% 3% 3.3 19.0 2.9 0.3 +18% Spread Fee With-profits Ins. Margin Return SH assets 17.0 Eastspring 0.2 Strong market contribution
Slide 22: US/Jackson
Prudential plc US/Jackson Senior Debt Roadshow April 2020
Slide 23: 2019 sales and distribution highlights
US/Jackson 2019 sales and distribution highlights Sales and deposits, $bn Successful sales diversification • 8% YoY growth, with strong 2H sales 8% • FA/FIA sales grown 6x, representing 23% of total sales (2018: 4%) 22.2 • VA sales down 12%; industry core VA sales down 5% whilst 20.6 2.5 total indus
Slide 24: Preparations for potential minority IPO commenced
US/Jackson Preparations for potential minority IPO commenced • Remittance of $525m - maintained long term track record of delivery • Early-adopted new NAIC framework 2019 • Demonstrated distribution reach across US annuity market Achievements • Deepened management bench - new CEO, CFO, CCO • Meaning
Slide 25: IFRS result
US/Jackson IFRS result US IFRS result1, $m Key drivers FY18 FY19 Fee income +0.8% YoY Fee 3,265 3,292 Average separate account balance +1.6%, average fee margin 182bps (2018: 183bps) Spread 778 642 Spread margin 112bps (2018: 155bps) Lower core spread & reduced income from swaps held for duration ma
Slide 26: Evolution of RBC over 2019
US/Jackson Evolution of RBC over 2019 US statutory surplus & RBC ratio development1, 2019 ($m/%) 458% (75)%p 141%p (37)%p (76)%p (28)%p (17)%p 366% • RBC ratio at 31 December 2019: 366% (50)%p net hedge losses (26)%p increased non-admitted DTA • Early adoption of NAIC framework2, impacted RBC ratio
Slide 27: Latest Developments
Prudential plc Latest Developments Senior Debt Roadshow April 2020
Slide 28: Update on Covid-19 and current market conditions
Latest Developments Update on Covid-19 and current market conditions • Prudential, as a business committed to openness and transparency, will issue regular updates on our response to the varied effects of Covid-19. o In parts of Asia, our colleagues have been living with this outbreak for several mo
Slide 29: Debt and capital
Prudential plc Debt and capital Senior Debt Roadshow April 2020
Slide 30: Outstanding Debt Profile
Outstanding Debt Profile Current debt profile provides significant financing flexibility New 10Y Senior Note fits well within both maturity and call profiles Debt at Face Value1: The total current debt stack by face value consists of: Senior $728m o US$3,725m of USD fixed for life subordinated d
Slide 31: Capital and Capital Sensitivities
Capital and Capital Sensitivities Robust and resilient LCSM capital generation supporting investment in growth FY19 movement in estimated LCSM shareholder LCSM shareholder surplus estimated sensitivities1,5 capital surplus1, $bn Cover ratio Impact on solvency 2 356% ratio 1 January 2019 9.7 1,4 FY19