Prudential bullish about 2027 targets after strong profit growth

(Sharecast News) - Prudential has said it's "increasingly confident" in meeting its long-term targets after a strong set of results for 2023, with new business profits rising by almost a half on the back of its ongoing strategic shift to Asian and African markets. The insurance giant reported new business profit of $3.13bn, up 45% year-on-year, helping the company to swing to an IFRS profit after tax of $1.71bn, compared with a loss of $1.0bn in 2022.

According to its five-year plan set in 2022, Prudential is targeting new business profit to grow at a compound annual growth rate of 15-20%, implying a figure of $4.4-5.4bn by 2027.

The company, which has more than 18m customers across Asia and Africa, is also guiding to an operating free surplus generated from in-force insurance and asset management business of more than $4.4bn by 2027. However, this was broadly stable in 2023 at $2.74bn due to ongoing investments into its new strategic pillars.

"The gradual compounding of the new business contribution and improving operating variances will support progress towards our 2027 financial objective," the company said.

Commenting on the results, chief executive Anil Wadhwani said: "These are a very strong set of results while operating in a challenging macro environment, with new business profit up 45% driven by a relentless focus on execution in our markets in Asia and Africa.

"It is also an illustration of the strength of both our agency and bancassurance distribution channels as well as an affirmation of our leadership position in many key markets."

The board approved a second interim dividend of 14.21 cents per share, taking the total dividend to 20.47 cents, up 9% year-on-year.

Looking to 2024, Prudential said sales growth had continued over the first two months of the year. "Given the relentless execution focus in implementing our strategy, we are increasingly confident in achieving our 2027 financial and strategic objectives and in accelerating value creation for our shareholders," Wadhwani said.