Pru H1 beats forecasts, confirms Asia growth target

By Clara Ferreira-Marques

LONDON (Reuters) - UK insurer Prudential (PRU.L) beat forecasts with a 7 percent rise in first-half earnings and confirmed a key commitment to double new business profits in Asia in 2008, despite slower than expected growth in the region.

Shares in Britain's largest insurer by market value have fallen 25 percent this year, largely on concerns that a consumer slowdown in Europe and the United States could hit fast-growing Asia, where Prudential makes roughly half its sales.

Jitters over Prudential's Asian outlook again held back its stock on Thursday, but its strong headline numbers, combined with reassurance over its capital position, helped it to reverse losses to trade up 2.3 percent at 549.5p by 1048 GMT.

Prudential blamed Asia's slower sales progress on tough comparisons for Taiwan and said it still aimed to double 2005 new business profit levels this year, 12 months ahead of initial expectations. It said margins were stable overall and were set to remain "at or around" current levels in 2008.

"They've been trying to flag it can't go on for ever (in Asia) and the first-half last year was up 48 percent," analyst Kevin Ryan at ING said.

"Importantly, the big numbers are not disappointing."

Operating profit for the group, on a European embedded value basis, totalled 1.43 billion pounds ($2.77 billion), ahead of an average forecast of 1.34 billion, largely thanks to progress in the UK and U.S. markets, where analysts had forecast falls.

On a statutory basis, operating profit climbed 13 percent to 674 million pounds, again at the higher end of forecasts.