Prudential profits hit by corporate pension sales
Sales of onshore bonds and individual annuities mitigate plunge in revenue at Prudential from new corporate pensions business.
Profits for Prudential’s UK insurance business were down 5 per cent in the first quarter of 2012, due mostly to a 37 per cent drop in sales of corporate pensions.
The company posted a new business profit of £62m in the first three months of 2012, a £3m drop from £65m in the same period of 2011.
Annual premium equivalent sales for corporate pensions were £49m, down 37 per cent compared to the same period last year.
The company’s interim management statement said: “Prudential UK continues to focus on retaining and developing existing schemes, securing new members and incremental business.”
Tidjane Thiam, group chief executive of Prudential, said: “In the UK we delivered new business profit of £62m in the first quarter. We continue to focus on the products where we have a competitive advantage, namely individual annuities and with profits.
“Both of these product lines delivered healthy increases in the quarter, particularly with-profits which is benefiting from customer demand in the current low interest rate environment.”
In contrast, APE sales of onshore bonds rose 28 per cent to £55m, and those of individual annuities grew 14 per cent to £48 year-on-year.
Overall, the company’s new business profit was £536m for the first quarter of 2012, up 8 per cent from £498m for the same period last year.
Investment net flows were £2.1bn, up 12 per cent from £1.9bn in the first three months of 2011.