Slide 1: CLSA Investors' Forum
Prudential plc CLSA Investors’ Forum Mike Wells - Group Chief Executive 12 September 2017 2017 CLSA INVESTORS’ FORUM 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: Prudential plc
Prudential plc Providing financial security since 1848 Life insurance customers worldwide 25 m Total funds under management £ 635 bn Prudential enters its first African life insurance market 2014 The first UK life insurer to enter the China market. 2000 Prudential acquires M&G, founded in 1901 1999
Slide 4: Premium franchises
Group Premium franchises Asia US UK Premier retirement income Well recognised brands with Leading pan regional franchise player strong track record In Asia since 1923 Founded in 1961 169 years of providing financial security 15m life customers with Top 3 4m life customers 6m life customers position
Slide 5: Clear strategy aligned to significant demand
Group Clear strategy aligned to significant demand Insurance penetration1 Mutual fund penetration2 Penetration Significant Penetration ASIA protection gap and investment needs of the middle class UK 7.5% Europe 75% 2.4% 12% US retirement advisor assets4 Transition of Other VA US National & RIA ‘baby
Slide 6: Delivering profitable growth at scale
Group Delivering profitable growth at scale IFRS operating profit1,2, £m + £1bn 4,256 3,969 + £1bn 3,154 + £1bn 2,937 2,504 2,000 1,811 1,438 1,232 £1bn 1,181 1,077 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 1 Comparatives have been stated on an actual exchange rate basis 2 Comparatives
Slide 7: Translating into strong shareholder returns
Group Translating into strong shareholder returns Dividend, pence per share £ 6.8 bn Total dividends1 to shareholders 2006-16 CAGR 48.78 +10% Special 43.50 dividend 38.78 36.93 33.57 29.19 25.19 23.85 18.90 19.85 17.14 18.00 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 1 Amounts paid 2006-
Slide 8: Headline HY 2017 results
Group Headline HY 2017 results Earnings IFRS operating profit1 2.4 £ bn Broad based performance with double digit growth in Asia Cash 1.8 Free surplus generation1 £ bn 2017 Asia objectives on track, Group objective achieved Growth 1.7 New business profit1,2 £ bn Strong capital position 9.5 Ext
Slide 9: Strategic Priorities
Strategic Priorities Leverage scale Accelerate Asia Expand health & protection Penetrate wealth Access new asset pools in a changing landscape Grow US Utilise ‘best-in-class ‘ capabilities Create a modern, capital light savings business Enhance UK Leverage position to capitalise on trends Allocate c
Slide 10: Asia: Significant growth runway
Asia Significant growth runway 1 Insurance penetration source Swiss Re Sigma 2015. Insurance penetration calculated as premiums in % of GDP. Asia penetration calculated on a weighted population basis 2 World Health Organisation - Global Health Observatory data repository (2013). Out of pocket as % o
Slide 11: Asia: Diversified, high quality platform
Asia Diversified, high quality platform Cambodia India China Laos Population Penetration1 Pru Rank6 Population Penetration1 Pru Rank5 Population Penetration1 Pru Rank4 Population Penetration1 Pru Rank (m) (%) (%) (m) (%) (%) (m) (%) (%) (m) (%) (%) 16 -% 1 1,327 2.7% 1 1,391 2.0% 4 7 -% 3 Malaysia T
Slide 12: Compounding revenues
Asia Compounding revenues New & renewal premiums Prudential growth Life weighted premium income1,2, £bn CER 2007-2016 4x Prudential customers4 12.6 2x MSCI Asia 10.4 ex Japan3 7m 15m 8.8 Renewal 7.5 9.1 6.4 Prudential insurance 5.6 7.6 4.8 6.6 penetration5 4.0 5.5 3.6 4.7 3.1 4.1 3.5 2.5 2.9 New 2.1
Slide 13: Asia: Growing assets
Asia Growing assets Eastspring FUM1,2, £bn 131 118 4.5x 89 77 58 60 52 50 42 37 37 29 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 HY17 1 Comparatives have been stated on an actual exchange rate basis 2 Funds under management includes both internal and external FUM. 2017 CLSA INVESTORS’ FO
Slide 14: Asia: HY 2017 results
Asia HY 2017 results Life weighted premium income1,2, £bn New business profit2, +17% £m Scale and diversification of portfolio driving £ 1,092 m value across the cycle 7.5 + 18% 6.4 IFRS operating profit2, Leveraging mix to drive quality growth £m 953 HY16 HY17 £ m Compounding effect of strong persi
Slide 15: Momentum: HY 2017 results
Asia HY 2017 results Premium Mix NBP Growth Regular premium Distribution 18 % APE New business profit1 + % Agency1 + 24 % Banca1 + 54 % 94% Momentum Country Quality 16 8 Countries with at least IFRS double digit growth1 operating profit1 + % Health & Protection % NBP Hong Kong1 + 15 % Agency +31% &
Slide 16: Asia: Long-term performance track record
Asia Long-term performance track record IFRS operating profit1, £m 2x3 2017 objective2 1,644 1,286 2x 1,108 1,058 959 2x 757 579 476 953 266 728 199 226 613 427 504 508 2H 285 350 237 1H 109 89 111 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2009 NBP 2013 2017 objective3 objective3 o
Slide 17: Strategic priorities - Accelerate
Asia Strategic priorities - Accelerate Over 500k agents Leverage scale 10k branches Expand and evolve agency model 2.4 Life Top 3 position in insurance 9 of 12 countries4 Leverage bancassurance % penetration1 3.3bn population With Embed digital capability 2015 2016 access to Expand health 1.6x Premi
Slide 18: Summary: Asia contribution to Group earnings
Asia Summary Asia contribution to Group earnings IFRS operating profit1,2, £m 2006 rebased High quality portfolio of well-positioned companies in the region 2006 Asia 6.4x Profitable, growing back book generating capital and earnings 2016 2006 Products and services aligned with social needs re
Slide 19: US: Strategic priorities - Grow
US Strategic priorities - Grow £ 120 bn Premier retirement income player Largest retirement asset pool in the world2 US £ 2.0 bn $ 16 retirement tr advisor IFRS operating assets1 profit Leverage cost, performance & technology 2015 advantage to access new asset pools Separate Account assets Launched
Slide 20: US: Relative outperformance
US Relative outperformance Separate account assets, $bn Industry VA net flows1, $bn: (15) (20) (18) Rapidly adapting to changing environment 1H16 2H16 1Q17 19.2 Net inflows: $8.6bn 162.0 2.6 Fee business driving earnings growth 2.7 3.3 134.2 Launched fee based VA products FY15 1H16 2H16 1H17 Markets
Slide 21: UK: Strategic priorities - Enhance
UK Strategic priorities - Enhance M&G Prudential - Intention to combine best of breed businesses Leading savings and investment provider Strategically attractive Market trends Complementary expertise: scale, brands, product, distribution and financial strength Combination leverages strengths to alig
Slide 22: UK: Attractive market dynamics
UK Attractive market dynamics Opportunity1,2,3 ISA market value6 Other4 Private Equity4 Retail £ 1.2tn Commercial UK AUM1 Cash property4 0.9tn by 2023 Stocks & 518bn +£ shares 7 £ £ tn Institutional £4.6tn 2015-16 +£ 1.6tn by 2023 Addressable Cash ISA transfers6,7 (£bn) 46.8 40.6 Europe AUM2 ex UK 3
Slide 23: Disciplined capital allocation delivering strong returns
Group Disciplined capital allocation delivering strong returns Strategic choices High quality earnings Strong returns IFRS income by revenue source, % Other 7% Insurance Spread margin income 14% 27% Value over volume 79% 26% Life Fee income 31% 21% Asset Mgt Leveraging strengths Fee income 2016 IFRS
Slide 24: Long-term track record
Group Long-term track record IFRS operating profit1,2,5, £m New business profit1,2,3,4, £m Free surplus generation1,2,3,4, £m 3.9x 4.3x 5.4x 2,358 1,845 1,689 CAGR CAGR 2,044 CAGR 1,615 +15% +16% 1,862 +18% 1,406 1,257 1,186 1,220 1,504 1,150 1,407 1,001 1,101 1,024 899 1,149 806 917 1,013 740 616 8
Slide 25: Key take-aways
Group Key take-aways High quality, broad based performance Asia continues to underpin growth M&G Prudential leverages complementary strengths to unlock further value Strong balance sheet, defensive positioning Well positioned to deliver long-term, profitable growth 2017 CLSA INVESTORS’ FOR
Slide 26: Upcoming investor conferences
Asia Conference, Hong Kong 24th November 2017 Investor Conference, London 16th November 2017 2017 HALF YEAR RESULTS