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Prudential posts first-quarter new-business profit rise, reshuffles management
May 18, 2017 / 9:00 AM / 7 months ago

Prudential posts first-quarter new-business profit rise, reshuffles management

LONDON (Reuters) - British insurer Prudential (PRU.L) reported a 25 percent rise in first-quarter new-business profits on Thursday, driven by a strong performance in Asia, and announced the appointment of a new chief financial officer in a management reshuffle.

FILE PHOTO - A ferry sails past an advertisement of Prudential Assurance under foggy weather at the Victoria Harbour in Hong Kong, China March 9, 2016. REUTERS/Bobby Yip/File Photo

The company said in a statement before its annual general meeting that the head of its Asian business, Tony Wilkey, is stepping down in July after more than 10 years with Prudential “to pursue new challenges” and will be replaced by group CFO Nic Nicandrou.

Mark FitzPatrick, currently a managing partner at consulting firm Deloitte, has been appointed as the new CFO.

The moves are the latest in a number of management changes at Prudential since Mike Wells became chief executive in 2015.

Barrie Cornes, an analyst at Panmure Gordon, said in a client note he was “slightly surprised about the change in senior management coming so soon after the last round of changes”.

Regarding its first-quarter performance, Prudential said new-business profits rose to 856 million pounds, including a 26 percent rise in Asia on a constant currency basis, to 561 million pounds.

Jackson, Prudential’s U.S. business, also posted a 26 percent rise in new-business profit to 224 million pounds, while the UK insurance arm’s new-business profit rose 15 percent to 71 million.

M&G, Prudential’s UK fund management arm, saw net inflows from retail and institutional investors of 3.6 billion pounds. Total assets under management rose 4 percent over the quarter to 275 billion pounds.

“We see the company offering relative value, with further growth in the Asian top-line being a catalyst,” analysts at KBW said in a client note, reiterating their outperform rating on the stock.

    Prudential's shares were down 1 percent at 1,714 pence at 1053 GMT, when the FTSE 100 index .FTSE was down 1.4 percent.

    Prudential also published data showing its capital strength without the benefit of so-called transitional measures, following new disclosure requirements under European Union capital rules.

    Bernstein analysts said the impact on Prudential’s solvency capital ratio, showing a 68-percentage-point drop to 103 percent, was “reasonably-sized”.

    Under the rules, a ratio of 100 percent shows insurers have sufficient capital to cope with underwriting, operational and investment risk. Transitional measures remain in place, however, for up to a further 15 years.

    Other major UK life insurers are due to disclose further solvency figures on Friday.

    Reporting by Carolyn Cohn; Editing by Larry King

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