Slide 1: Prudential Corporation Asia Investor Presentation
Prudential Corporation Asia Investor Presentation June 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: Key messages
Key messages High quality franchise; well positioned for profitable growth Structural long-term trends intensifying in current environment Diverse, high-quality platform aligned to opportunities Accelerating digital development amplifying current franchise and strengths Resilient earnings pr
Slide 4: Agenda
Agenda Context and performance Strategic priorities and progress Track record of disciplined execution Appendix 4
Slide 5: Operating context
Operating context Several markets in restart mode with planned easing measures Restriction measures & timeline Jan Feb Mar Apr May Jun Current status of measures China Easing measures; internal travel and business activity resumed nationwide from 26 March with strict measures in place to respond and
Slide 6: 1Q20 performance
1Q20 performance Distribution Diversity and quality underpins execution Financial performance Operational highlights • 14% profit3 growth in Asia driven by growth in renewal • 15-year strategic partnership with TMB, strengthening premiums ; 8 markets growing at double digits our distribution capabil
Slide 7: 1Q20 performance: Financial highlights
1Q20 performance Financial highlights APE sales, $m New business profit, $m IFRS operating profit 1,292 (33)% (33)% 14% Asia ex HK 986 (24)% 539 & China 544 +1% China & HK 753 442 (41)% 1Q19 1Q20 1Q19 1Q20 1Q19 1Q20 (CER) (CER) (CER) • Asia ex-HK & China sales up +1% • Asia ex-HK & China NBP up +23%
Slide 8: Accelerating Pulse development
PCA performance Accelerating Pulse development Downloads by market Monthly usage of Babylon services Digital policies issued by market1 1.7m 404k 1.2m 20X 205k 201k 0.7m 174k 131k 102k 0.4m <100k <10k Others Hong Kong Indonesia SMEs Philippines Malaysia Others Indonesia Philippines Hong Kong Singapo
Slide 9: Pulse is broadening our customer base
PCA performance Pulse is broadening our customer base, gathering new data and converting into sales Broadening customer base Acquiring customer knowledge… … and converting knowledge into sales 1. Data as of 6 Jun. 2. Aggregate of HK, SG and MY. 9
Slide 10: Wide range of measures to support customers, agents and staff
PCA performance Wide range of measures to support our customers, agents and staff Agents and staff Customers • Established Incident Management Teams at regional • Free Covid-19 lump-sum or per-diem cover on and local levels; flexible working arrangement for staff diagnosis/hospitalisation/death for
Slide 11: Virtualising our business model
PCA performance Virtualising our business model ` ` Virtual sales of products Digital agent management Growth in new recruits in 1Q20, yoy • Virtual sales enabled in all markets; • Agency management moving online products equivalent to 2/3 of APE aides profiling, recruitment, training, are capable o
Slide 12: PCA performance – China playbook
PCA performance – China playbook Rapidly virtualizing our business; good signs of business recovery Strengths of Our Business in China Recovery of CPL’s APE growth2 (10-day moving average) ` ` ` FOOTPRINT CHANNEL PRODUCT Uplift of Wuhan 1st working day after Wuhan lockdown lockdown 20 branches1 Banc
Slide 13: Robust and consistent solvency
PCA performance Robust and consistent solvency, low sensitivities, ample actions and buffer Resilient PCA LCSM1 progression Low LCSM1 sensitivity 311% 333% YE19 LCSM (company) 333% Interest rate -50bp YE18 2Q19 3Q19 4Q19 1Q20 Jan 20 9 Mar 20 Feb 20 Apr 20 Equity -20% Ample actions and buffer to with
Slide 14: Asia invested assets
Asia invested assets Conservative investment approach Breakdown of Asia invested assets1,2, FY19 $bn Shareholder debt portfolio, FY19 $bn Shareholder-backed Holding by issuer Par funds Unit linked Total Asia Life Portfolio No. Av. Max <BBB Debt 44.8 5.2 24.6 74.6 $bn Issuers $m $m Equity 29.4 19.0 3
Slide 15: Agenda
Agenda Context and performance Strategic priorities and progress Track record of disciplined execution Appendix 15
Slide 16: Structural trends
Structural trends Most Asian life markets still below the inflection point Majority of Asian markets remain below the inflection point, US$10k to US$20k GDP per capita, for life insurance penetration Market maturity1 Future sources of growth 1.8x 4.5 Growth contribution 2.5 Asia ex China 28% China R
Slide 17: Leading pan-regional franchise
Leading pan-regional franchise Pru Asia footprint and distribution Market share based on YE2019, China ranking and market share among foreign players only, India ranking and market share exclude LIC; figures in brackets on the map represent population and insurance penetrations as % of GDP based on
Slide 18: Structural demand drivers
Unique capabilities to capture structural growth opportunities Key success factors driving growth Capabilities/Competitive advantages ` ` ` ` Low insurance Par Fund1 Eastspring3 China & mutual fund Large UK-style with profits funds penetration 1st 2 branches 8.0 8.2 $241bn of AUM Access to: 6.8 6.7
Slide 19: Clear strategy
Clear strategy Strategic priorities Strategic priorities Create ‘best-in-class’ Enhance the core health capability Broaden flagship product range Narrow mortality protection gap Expand distribution and drive efficiency Grow participation in health and medical segments Collaborate with non-traditiona
Slide 20: Strategic progress
Strategic progress 2019 achievements Strategic priorities ` 1 • Reboot of Indonesian distribution and product set • Leader in banca1 – enhanced with UOB (APE +24%)2 & SeABank (20Y exclusive)3 Enhance the core • Broadening product offering: developed >160 products, contributing c.16% of NBP • #1 agen
Slide 21: Enhance the Core
Enhance the Core 1 Diversifying into new distribution partners, customer segments and products New distribution, product & customer segments Channels Core products Customer segment High Net Worth OPUS in Singapore APE of $76m, +46% NEW Estate Robo- 92 Private Wealth consultants planning investin
Slide 22: Accelerating digital buildout
Accelerating digital buildout 2 Attractive services in current environment ` ` Pulse: First-of-its-kind, all-in-one and AI-powered app Pulse: Access and adoption • 4m installs1, up from 0.5m at start of year • 19 new digital partnerships secured1 • Launched online products: Covid-19 cover, Dengue Fe
Slide 23: Pulse ecosystem
Accelerating digital buildout 2 Pulse ecosystem helps customers become healthier and wealthier Using a suite of Health + Wealth + SME products Help customers become healthier and services to acquire customers at scale AI assessment and triage SME – Employee Benefits Lifestyle management and wellness
Slide 24: Accelerate Eastspring
Accelerate Eastspring 3 Proven track record; expanding into new capabilities Strengths of Our Business in China External: $20bn Funds under management1,3 $bn External: $125bn Internal: $29bn Internal: $116bn Unique platform 4.9x Top 10 in 7 out of 11 markets Asia’s largest retail asset manager (
Slide 25: Expand Presence in China
Expand Presence in China 4 Significant growth potential from higher penetration Citic-Pru footprint (Dec’19) NBP (US$’m, 100% basis) Citic-Prudential has significantly expanded its footprint since 2000 2019 524 17 Straight ‘A’ score for CBIRC Integrated Risk Rating since 2016 (only JV) Now with
Slide 26: Agenda
Agenda Context and performance Strategic priorities and progress Track record of disciplined execution Appendix 26
Slide 27: Track record of disciplined execution
Track record of disciplined execution Diversified portfolio, high-quality drivers, conservative assumptions Diversified portfolio, 2019 High quality drivers, 2019 Hong Kong +24% Indonesia (3)% 93% 71% 67% FY19 IFRS Singapore +14% operating $ 3,276m Regular premium Insurance income as % H&P mix in NB
Slide 28: Resilient and compounding life business
Track record of disciplined execution Resilient and compounding life business at PCA Compounding business1,2,3 Resilient growth in OFSG1,2,3 4x 7x 23,845 1,522 CAGR 10% 12% 13% New business 16% Renewal premium 232 5,677 24 2009 2019 2009 2019 Life weighted premium income, $m Free surplus generation,
Slide 29: Consistent in-force earnings growth across cycles
Track record of disciplined execution Consistent in-force earnings growth across cycles IFRS operating profit1, $m 24% CAGR • Asian Financial • 9-11 Terrorist Attack • China & India grow • Global Financial • Eurozone slowdown • Further US • Brexit (2016) • Lower interest rates Crisis (1997- (2001) a
Slide 30: Summary
Summary Resilient platform; significant growth runway Channels Core products Customer segment • Structural long-term trends intensifying in current NEW Estate Robo- planning investing HNW environment Consultants Multi-care multi- • Diverse, high-quality platform aligned to opportunities stage medica
Slide 31: Agenda
Agenda Context and performance Strategic priorities and progress Track record of disciplined execution Appendix 31
Slide 32: China
China Market highlights – 2019 ` ` 1Q20 update Faster growth in GDP than advanced economies1 Structural demand drivers • Preparing for 21st provincial license Significant protection gap2 remain intact • Rapid rollout of virtual sales 350million3 entrants into the middle class will be in China • Life
Slide 33: China: Broadening and deepening presence
China Broadening and deepening presence 2018 2019 CPL Penetration Industry GWP by Province (RMB,m) CPL GWP by Province MS% (RHS) Year Change 400,000 5% (% GWP) No Branch 4% 350,000 Established 2018 2019 Y-Y (bps) 300,000 4% 1 Guangdong 2000 1.5% 1.6% 10 3% 2 Beijing 2003 3.4% 3.9% 54 250,000 3% 3 Ji
Slide 34: Hong Kong
Hong Kong Market highlights – 2019 ` ` Domestic Mainland 1Q20 update Resilient performance Ageing population Attractiveness of HK policies • QDAP 28% of domestic sales supported by structural Significant protection gap Government initiatives: Greater • Agent count up 11% yoy Bay Area demand drivers
Slide 35: Hong Kong: Resilient performance
Hong Kong Resilient performance; proven track record • Strong persistency, with customer retention and premium collection in line with same period last year • Track record of recovery from periods of disruption and consistent earnings growth • Underpinned by recurring premium business model, attract
Slide 36: Indonesia
Indonesia Market highlights – 2019 ` 1Q20 update Enhancing distribution Agency APE + 25%; highest sales since 2015 • PRUworks winning 64 schemes and adding >22k lives insured Elite agents growing sales by +57%, contributing 25% of agency APE capabilities – Quality and sustainable delivery • Agent co
Slide 37: Singapore, Malaysia and the Philippines
Singapore, Malaysia and the Philippines Market highlights – 2019 ` ` ` Singapore Malaysia Philippines Strong market positioning Strong market positioning Pivot to H&P • Top 3 market share & in regular premium • #1 market share in conventional & takaful • Product mix shift to H&P +5ppts to 27% • Best
Slide 38: India, Vietnam, Thailand
India, Vietnam, Thailand Market highlights – 2019 India Vietnam Thailand Pivot to H&P Enhancing distribution capabilities Enhancing distribution capabilities • Product mix shift to H&P +5ppts to 15% • 20-year exclusive partnership with SeABank • Thanachart Bank APE: +22% • NBP margin up 2ppts to 19%