Adding more to life - Prudential plc
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Adding more to life Prudential plc Fact File 2018
Contents
Page
At a glance 2
Our business model 4
Our distribution 6
Our businesses and their performance
Asia8
United States 10
United Kingdom and Europe 12
Africa14
Corporate responsibility 15
Our history 19
How to contact us 20
By helping to take the financial
risk out of life’s big decisions,
Prudential creates long-term value
for our customers, our shareholders
and the communities we serve.
Adding more to life.
www.prudential.co.uk Fact File 2018 Prudential plc 1
At a glance
Group at a glance
We meet the long-term savings and protection needs of a growing middle class and
ageing population. We focus on three markets – Asia, the US, and the UK and Europe
– where the need for our products is strong and growing and we use our capabilities,
footprint and scale to meet that need. In recent years, we have expanded into Africa,
taking advantage of the emerging demand for our products in the region.
Our strategy Asia
ealth & prot
s, h ec
ng ti
vi
on
Sa
Asia
Significant
protection gap
and investment
needs of the
middle class
US UK and Europe
Transition of ‘Savings gap’ and
‘baby-boomers’ ageing population
into retirement in need of returns/
income
S av ings S av ings
We aim to capture three long-term opportunities Prudential Corporation Asia
across our key geographical markets: Prudential Corporation Asia has leading insurance and
asset management operations across 14 markets and
—— serving the protection and investment needs of the
serves the families of the region’s high potential economies.
growing middle class in Asia;
We have been operating in Asia for over 90 years and
—— providing asset accumulation and retirement income have built high-performing businesses with multi-channel
products to US baby boomers; and distribution, a product portfolio centred on regular savings
and protection, award-winning customer services and
—— meeting the savings and retirement needs of an ageing a widely recognised brand.
British and continental European population.
Eastspring Investments is a leading asset manager in Asia
We aim to generate attractive returns, enabling us to provide and provides investment solutions across a broad range
financial security to our customers, invest in growth of asset classes.
opportunities and meet our customers’ high expectations.
Africa
We entered Africa in 2014 to offer products to new
customers in one of the fastest-growing regions in the
world. We aim to provide products that help our customers
to live longer and healthier lives, and save to improve future
choices for them and their families.
2 Prudential plc Fact File 2018 www.prudential.co.uk
In March 2018, the Group announced its intention to demerge its UK and Europe
businesses (M&G Prudential) from Prudential plc, resulting in two separately listed
companies, with different investment characteristics and opportunities. We believe
we will be better able to focus on meeting our customers’ rapidly evolving needs
and to deliver long-term value to investors as two separate businesses.
US UK and Europe
Jackson M&G Prudential
Jackson provides retirement savings and income strategies M&G Prudential is a leading savings and investments
aimed at the large number of people approaching retirement business, ideally positioned to target growing customer
in the United States. Jackson’s pursuit of excellence in demand for financial solutions in the UK and Europe. Our
product innovation and distinctive distribution capabilities vision is a business built for the customer: simple, efficient,
has helped us forge a solid reputation for meeting the needs digitally enabled, capital light, fast-growing and above all
of customers. Jackson’s variable annuities offer a distinct focused on delivery. The combined business benefits
retirement solution designed to provide a variety of from two strong complementary brands, a world-class
investment choices to help customers pursue their investment capability, international distribution and
financial goals. a robust capital position.
£669bn total funds under management
+26m customers worldwide
www.prudential.co.uk Fact File 2018 Prudential plc 3
Our business model
Creating shared value
Our trusted brands and strong distribution channels enable us to understand
the growing needs of our customers for long-term savings and financial security,
and to design innovative products that meet those needs. By helping to build
better lives and stronger communities and to fuel the growth cycle, we create
long-term value for both our customers and our shareholders.
Understanding our markets Driving our business
Asia Customers
Customers are at the heart of our strategy. We proactively listen to both new and
—— Low life insurance and mutual
existing customers to understand and respond to their changing needs. This allows
fund penetration
us to propose financial solutions customised for different groups, whether that is
—— Significant health and young and middle-aged people or those in the retirement phase of life. We are
protection gap expanding our digital infrastructure to enhance our customer experience.
—— Growing working age population
—— Increasing consumer affluence
Products
We offer solutions for customers as they face the biggest financial challenges of
their lives. We consistently develop our product portfolio, designing it around our
customers’ needs and providing them with peace of mind, whether that be in relation
to saving for retirement or insuring against risks of illness, death or critical life events.
US
—— Retiring ‘baby boomer’
generation
Distribution
—— Large and growing retirement Distribution plays a key role in our ability to reach, attract and retain customers
asset pools in different parts of the world. Building out and diversifying our distribution
capabilities, including adding digital tools, helps ensure that we fully capitalise
—— Growing demand for guaranteed
on the opportunities available to us in each of our markets.
income
Investment for growth
We focus on strategic investment in long-term opportunities and capabilities to drive
future growth and value for our stakeholders. We invest to improve relationships with
UK and Europe our customers and distributors, to create innovative products, to improve our operating
platforms and to capture new opportunities and build new relationships. We invest in
—— Ageing population digital capabilities to empower our distributors and improve customer service.
—— Large and growing retirement
asset pools
—— Growing demand for savings
and income Risk management
We generate value by selectively taking exposures to risks that are adequately
rewarded and that can be appropriately quantified and managed. Balance sheet
strength and proactive risk management enable us to make good our promises to
our customers and create long-term value for our stakeholders.
4 Prudential plc Fact File 2018 www.prudential.co.uk
Creating value… …for our stakeholders
Growth We create financial benefits for our investors and
£4,699m
deliver economic and social benefits for our
customers, our employees and the societies in
IFRS operating profit which we operate.
+6%1 on 2016
£3,616m
New business profit
+12%1 on 2016
Cash
£3,640m
Free surplus generation
-1%1 on 2016 Customers Providing financial Investors Growing dividends and
security and wealth creation. share price performance enhance
shareholder value.
Capital
£13.3bn
Solvency II surplus
+6%2 on 2016
Employees Providing an environment Communities Supporting
with equal opportunities, career communities where we operate,
potential and rewards enabling us to through investment in business and
attract and retain high-quality infrastructure, tax revenues and
1 Growth rates on a constant exchange rate basis. individuals to deliver our strategy. community support activities.
2 Growth rates on an actual exchange rate basis.
www.prudential.co.uk Fact File 2018 Prudential plc 5
Our distribution
Our global distribution strength
Our trusted brands and strong distribution channels enable us to
understand the diverse needs of our customers, and respond to those needs.
Jackson Prudential Africa
Strength and flexibility of our Establishing network with
distribution network gives us market-leading initiatives
a distinctive advantage
Largest VA wholesale distribution force in the US 1 +2,200 agents
Most productive VA wholesale 4 exclusive bank partners
distribution force in the US1 Access to +600 bank branches
627 broker-dealers’ selling agreements covering 2 mobile bank partners
226,545 (73%) of total US advisers2
Approximately 700,000 customers
#1 selling variable annuity contract 3
in the independent
channel since 2003
6 Prudential plc Fact File 2018 www.prudential.co.uk
M&G Prudential Prudential Corporation Asia
Diversified distribution model Pan-regional multi-channel network
underpinned by strong brand
£351 billion total assets under management 4
+600,000 agents
Products registered in 24 jurisdictions around the world Multiple established bank partnerships
+7.2 million customers Active in +10,000 bank branches
+300 Prudential Financial Planning partners Eastspring Investments are present in 10 major Asian
markets and distribution offices in US and Europe
Notes
1 Independent research and Market Metrics, a Strategic Insight Business.
2 The Cerulli Report Adviser Metrics 2017 and Jackson research.
3 ©2018 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) is not warranted to be
accurate, complete, or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past
performance is no guarantee of future results. Morningstar www.AnnuityIntel.com. Total Sales by Company & by Contract 3Q YTD 2017. Jackson ranks #1 out of 735 VA
contracts with reported sales in the Independent Channel in 3Q YTD 2017.
4 Represents M&G Prudential asset management external funds under management and internal funds included on the M&G Prudential long-term insurance business
balance sheet.
www.prudential.co.uk Fact File 2018 Prudential plc 7
Our businesses and their performance
Asia
There are compelling structural trends that underpin the long-term
opportunities for savings and protection across the region, and Prudential
is positioned for further growth in these markets.
In Asia, the insurance and savings Distribution
2017 industries are still in their infancy, with Prudential Corporation Asia has one of
average insurance penetration rates at the strongest distribution platforms in the
performance just 2.4 per cent3, well below those seen in region, with a mix of tied agents and bank
highlights the UK. 65 per cent of personal wealth in partners that enables us to reach a broad
Asia is held in cash or deposits, relative to range of customers. Our experience is
14 per cent in the US. There are significant that customers’ preference for face-to-
—— Continued performance in key growth opportunities in addressing these face advice and service from a trusted
metrics: new business profit up concerns, and some key structural trends financial adviser is undiminished, and so
12 per cent1, IFRS operating profit that will increase the demand for savings tied agency and in‑branch bank sales staff
up 15 per cent1 and underlying and protection in future: will remain our primary distribution
free surplus generation up channels. However, we are making
19 per cent1 —— The growing working population
significant investments to ensure we
is predicted to increase by over
exceed our customers’ expectations. For
—— 2017 financial objectives one million per month – between
example, in Singapore our agents are now
achieved 2015 and 2030 some 178 million
equipped with an electronic point of sale
people will reach working age;
—— Eastspring total funds under portal that uses the latest developments
management of £138.9 billion —— The region has significant economic in biometric authentication, and produces
up 18 per cent2 growth potential, with GDP in Asia a detailed quote within three minutes.
predicted to increase significantly. In China, our mobile policy application
—— Operating in 77 cities in China process has reduced customer
Private financial wealth is likely to
with APE sales up 43 per cent1 on‑boarding time from five days to
increase by around US$4 trillion
—— Eastspring named ‘Best Asset per annum from 2016, reaching 30 minutes, and policies can be issued
Management House’ by Asia US$78 trillion by 2021; and within seconds.
Asset Management’s 2018 We believe bancassurance is an effective
—— Mortality and morbidity protection
Awards way to increase insurance penetration,
gaps are expanding; as families’
wealth increases so does the amount and Prudential has an excellent track
of money they need to sustain their record in growing high-quality business
lifestyles in the event of a life- through this channel. We have had
changing event. a regional relationship with Standard
Chartered Bank since 1998 and the
Prudential Corporation Asia has all the ongoing effectiveness of this relationship
key attributes for continuing success, is evidenced by a 12 per cent growth in
starting with a footprint of life insurance APE last year. We have also had great
and asset management business spanning success in securing and activating newer
14 countries and giving us access to relationships, for example, Thanachart
3.3 billion people. We also have unrivalled Bank in Thailand grew APE by 17 per cent
expertise in the region, having been in last year following collaboration on a new
Malaysia since 1924, and pioneered regular premium product, and we have
industry developments in the region recently announced new agreements
such as unit-linked products and with Robinsons Bank in the Philippines,
bancassurance. Our sheer scale is a Siam Commercial Bank and Shinhan
key competitive advantage with over Bank in Indonesia and Vietnam.
600,000 agents, access to more than
10,000 bank branches, 15 million life Products
customers, 24 million life policies Prudential has a full suite of products
currently in force and £139 billion of that are tailored to meet individual market
assets under management. requirements and customer needs. Our
priority is to ensure that customers have
8 Prudential plc Fact File 2018 www.prudential.co.ukAdding more to life:
Helen, Prudential Hong Kong
‘I’ve always considered good health to be very important to my
life. It’s great that Prudential offered me access to myDNA Pro,
which has given me key insights into my genetic risk profiles.
The first step was to do a DNA test, which showed my body
to be sensitive to carbohydrate and fat intake due to my
genetic makeup. Based on these findings, the personal
health coach I chose as part of the programme helped me
set a weight loss goal and plan to maintain a healthier
lifestyle, including changing my dietary habits and ensuring
I incorporated more cardio workouts into my exercise
regime. With these, I have been able to maintain a healthy
weight and am now in an overall better shape.
I’ve been very impressed by the genetics-based
recommendations and level of personal guidance provided
by the programme. Huge thanks to my coach and Prudential
for all the support and motivation.’
appropriate levels of protection, and performs a pre-assessment of claims so Institute of Science and Technology; and
then support them with their long-term that low risk ones can now be turned enhancing our institutional coverage by
savings objectives. around in minutes. The turnaround time adding consultants in Asia and the US.
for medical claims has been reduced by We have also recently received approval
While we are already one of the leaders of our business licence as an investment
15 per cent.
in the protection space, continued management wholly-foreign-owned
innovation is essential for our ongoing In addition to improved processes,
enterprise in China.
success. In Hong Kong, we recently customers are increasingly looking for
launched a popular upgrade to our critical value added services. In Hong Kong, Investing for growth
illness product, PRUhealth critical illness myDNA, a service that provides Given the compelling opportunities
multi-care, which provides lifetime customised diet and exercise advice we see in the region, we will continue
multi-claim, lump-sum cover for 113 supported by an app and based on an investing for growth, enhancing our core
disease conditions, including three claims individual’s genetic profile, is very operations and expanding our distribution
for cancer up to a total of 300 per cent of popular and this has also been rolled out reach. We are already one of the leaders
the sum assured. in Vietnam, Malaysia and Singapore. in the health space, but we will investigate
In Malaysia, we have partnered with opportunities to participate more broadly
We are also successfully evolving our
BP Global for their Doctor2U app, which in this area. We will position Eastspring
product ranges within markets. In
gives our customers preferential rates on to play a greater role in managing Asia’s
Indonesia, we have introduced Hebat,
services including online video medical rising wealth, and we will also expand our
a lower premium investment-linked
consultations and the option to have a presence in China.
product at one end of the spectrum for
call-out 24/7. In Indonesia, we have the
emerging customers, and an ‘as charged’ Notes
PRUmedical network covering 45 1 Growth rate on a constant exchange rate basis.
medical product at the other end for
hospitals in 24 cities; our customers 2 Growth rate on an actual exchange rate basis.
higher-net-worth customers. In Indonesia
receive priority admission and discharge 3 Source: Swiss Re Sigma 2015. Insurance
and Malaysia, we have been successfully penetration calculated as premiums as percentage
to reduce waiting times, and are also of GDP. Asia penetration calculated on a weighted
developing Takaful products to provide for
guaranteed rooms. population basis.
the specific needs of Muslim customers.
Eastspring Investments
Customers
Eastspring is well placed for the
Excellent customer service is a
anticipated growth in Asia’s retail mutual
prerequisite for sustained success in the
fund market. It has one of the largest
industry and we are continuously driving
footprints in Asia, with operations in
improvements. For example, in China, we
10 major markets. Recent developments
have introduced WeChat e-claims that
include a broadening and strengthening
have reduced the processing time for a
of our in house investment teams with
seven-day hospitalisation claim from
some key hires; winning the Best Asset
around 18 days to two days; and in
Management House award; new strategic
Indonesia, we have developed PRUcheers,
partnerships with BlackRock, Sustainable
an analytics‑driven business engine that
Growth Advisers and Korea Advanced
www.prudential.co.uk Fact File 2018 Prudential plc 9Our businesses and their performance
United States
Providing an ageing American population
with financial strategies for stable retirements.
The US is the world’s largest retirement development and launch of Elite Access, our
2017 savings market, with approximately investment-only variable annuity, in 2012.
40 million Americans reaching retirement Further demonstrating Jackson’s flexibility
performance age over the next decade alone. This and manufacturing capabilities, Jackson has
highlights transition will trigger the need for an launched Perspective Advisory II and Elite
unprecedented shift of trillions of dollars Access Advisory to serve advisers and
from savings accumulation to retirement distributors with a preference for advisory
—— Cash remittance of £475 million income generation. products. In November, Jackson launched
Private Wealth Shield (PWS), a variable
—— Total IFRS operating profit of However, these Americans face challenges
annuity developed specifically for trusts and
£2.2 billion – up 3 per cent1 in planning for life after work. For many,
private banks. To support this new product,
a financially secure retirement is at risk,
—— Variable annuity total net inflows Jackson also announced the formation of its
due to insufficient accumulation of savings
of £4.7 billion Private Wealth & Trust group, a specialised
and the current combination of low yields
team focused on complex planning,
—— Strong separate account asset and market volatility. Employer-based
investment management and tax mitigation
growth – up 19 per cent1 at pensions are disappearing and
strategies for high-net-worth and ultra-high
US$176.6 billion (£130.5 billion) government plans are underfunded.
net-worth clients.
Social security was never intended to be
—— Awarded ‘Contact Center World a primary retirement solution and today
Class FCR Certification’ and Distribution
its long-term funding status is in question. Jackson distributes products in all 50
‘Highest Customer Service for Additionally, the life expectancy of an
the Financial Industry’ awards states of the US and in the District of
average retiree has significantly increased, Columbia. Operations in the state of New
by The Service Quality lengthening the number of years for which
Measurement Group, Inc. – York are conducted through a New York
retirement funding is needed. subsidiary. Jackson markets its retail
the 11th consecutive year of
recognition for customer service To overcome these challenges, Americans products primarily through advice-based
performance in both categories need and demand retirement strategies distribution channels, including
that offer them the opportunity to grow independent agents, independent
and protect the value of their existing broker-dealer firms, regional broker-
assets, as well as the ability to provide dealers, wirehouses and banks. For
guaranteed income that will last variable annuity sales, Jackson is the
throughout their extended lifetimes. leader in the independent broker-dealer,
Jackson continues to respond to this bank and wirehouse channels3 and
demand with product innovation and second in regional firms3.
distribution strategies that meet the needs Jackson’s distribution strength also sets
of a growing retirement population, while us apart from our competitors. Our
generating shareholder value. wholesaling force is the largest4 in the
variable annuity industry, and is instrumental
Customers and products
in supporting the independent advisers who
Through its distribution partners, Jackson
help the growing pool of American retirees
provides products that offer Americans
develop effective retirement strategies. Our
the retirement strategies they need.
wholesalers provide extensive training to
These products also offer tax deferral,
thousands of advisers about the range of our
which allows interest and earnings to
products and the investment strategies that
grow tax-free until withdrawals are made.
are available to support their clients. Based
Jackson has a proven track record in this on the latest available data, Jackson is the
market with its market-leading flagship most productive variable annuity wholesale
product2, Perspective II. Jackson’s success distribution force in the US4.
has been built on its quick-to-market
product innovation, as demonstrated by the
10 Prudential plc Fact File 2018 www.prudential.co.ukAdding more to life:
Saundra, Jackson
‘My retirement story is about how I want to spend the
winter of my life. It’s about having fun, enjoying my family,
travelling and having the freedom to do the things I want
to do, like spending time with my grandson.
My relationship with my financial adviser is a wonderful one.
He is like a family member and confidant; easy to work with
and establish goals.
I’m very pleased I chose a Jackson annuity. It gives me the
confidence I need for my retirement. And to just live my life
the way I want to live my life.’
In August 2017, National Planning Holdings, to support the success of various designed products, the continued
an affiliate of Jackson, announced the sale distribution partners in their delivery success through many economic cycles
of the business of the four firms in its of retirement strategies. Because of its of our risk management and hedging
independent broker-dealer network to strong distribution, leadership in the programmes and our effective technology
LPL Financial LLC. Jackson has determined annuities market, best-in-class service platforms and award-winning customer
its overall strategy did not include being and low-cost efficient operation, Jackson service will provide Americans with the
a consolidator in the retail independent is extremely well positioned to take retirement strategies they so desperately
broker-dealer space. Rather, our primary advantage of this opportunity. need, and will enable us to be positioned
strategy is to focus on expanding Jackson’s to capture additional growth during times
success as the leading manufacturer of Investment for growth of transition and into the future.
retirement income products in the country. With trillions of dollars of adviser-
Notes
distributed assets across distribution 1 Growth rate on a constant exchange rate basis.
Regulatory landscape platforms that have not historically been 2 ©2018 Morningstar, Inc. All Rights Reserved.
The information contained herein: (1) is proprietary
The industry has continued to manage a focus, such as the dually registered to Morningstar and/or its content providers; (2) is
through an ever-changing regulatory investment adviser channel, there is not warranted to be accurate, complete, or timely.
landscape. As a result of the US significant opportunity to reach even more Neither Morningstar nor its content providers are
responsible for any damages or losses arising from
Department of Labor (DoL) regulatory American retirees and serve their needs any use of this information. Past performance is
initiative and the uncertainties regarding with annuity products going forward. no guarantee of future results. Morningstar
the application and implementation of its The industry will need to remain flexible www.AnnuityIntel.com. Total Sales by Contract
3Q YTD 2017. Jackson’s Perspective II for base
Fiduciary Duty Rule (Rules), the annuity and cost-effective in making changes to states ranks #1 and Elite Access for base states
industry saw continued pressure on sales products, systems and processes. ranks #8 for Total VA Sales out of 991 VA contracts
in 2017. Sales in the variable annuity We continue to ensure that we understand with reported sales to Morningstar’s quarterly sales
survey as of 3Q YTD 2017.
industry as of the third quarter of 2017 at and make the necessary adjustments to 3 ©2018 Morningstar Inc. All Rights Reserved.
US$70.9 billion5 were down 11 per cent support the needs and demands of The information contained herein: (1) is prop rietary
compared with the same period last year. American retirees into the future. to Morningstar and/or its content providers; (2) is
not warranted to be accurate, complete, or timely.
Even with competitors recently offering Neither Morningstar nor its content providers are
Jackson has implemented changes
fixed index annuities with benefits that responsible for any damages or losses arising from
necessary to meet the requirements of any use of this information. Past performance is
resemble those of variable annuities, sales
the sections of the fiduciary rules which no guarantee of future results. Morningstar
of fixed index annuities along with fixed www.AnnuityIntel.com. Total sales by company
are effective. Jackson has made, and
annuity products were lower as of the and channel 3Q YTD 2017. Jackson ranks #1 out of
continues to consider, changes to its 25 companies in the Independent NASD channel,
third quarter of 2017 at 9 per cent and #1 out of 19 companies in the Bank channel, #1 out
product offerings, entered into new
13 per cent respectively, compared with of 14 companies in the Wirehouse channel, and #2
selling agreements with advisory
the same period last year. Total annuity out of 19 companies in the Regional Firms channel.
providers, and is working with its 4 Independent research and Market Metrics,
industry sales were down approximately a Strategic Insight Business.
distributors to support implementation
11 per cent5 as of the third quarter of 2017. 5 LIMRA/Secure Retirement Institute, US Individual
of the Best Interest Contract Exemption Annuity Participants Report 3Q YTD 2017.
Regardless of the outcome of the Rules, or product changes to the extent those
the regulatory disruption has challenged become necessary before July 2019.
the industry to review the ways in which
Jackson’s competitive strengths are even
investment advice is provided to
more critical during periods of disruption.
American investors. Manufacturers
Our best-in-class distribution team, our
will need to have the ability to provide
agility and success in launching well
product and system adaptations in order
www.prudential.co.uk Fact File 2018 Prudential plc 11Our businesses and their performance
United Kingdom and Europe
Creating a simple, modern savings and investments business.
In August 2017, we combined M&G, our —— In the UK, we manage the savings of
2017 international investment management direct and intermediated customers
business, with Prudential’s UK and through a range of mutual funds.
performance European life insurance business to form We are also a leading provider of
highlights M&G Prudential. We also announced a savings and retirement solutions to
major investment programme in the new direct and advised UK customers,
combined business’s infrastructure to with a 19 per cent market share in life
—— Announcement of merger of improve customer service, accelerate and pensions retail investments as at
M&G and Prudential’s UK and product development and widen end September 2017. We also have
European business customer choice. a large book of UK customers who
own traditional insurance-based
—— Start of major investment M&G Prudential serves two of the world’s
savings products.
programme to improve customer largest savings and investments markets
service, accelerate product with asset pools in the UK and Europe of —— In continental Europe, where we have
development and widen £7 trillion and ¤14 trillion respectively. a leading position in cross-border fund
customer choice Across the region, people increasingly distribution with £44 billion2 in assets
need help to meet their long-term under management, customers in
—— Total M&G Prudential assets
financing goals as responsibility for 17 countries are able to access our
under management1 of
retirement savings passes from state and investment strategies.
£351 billion, up 13 per cent
employer to the individual. They want
—— We manage the pension and other
—— Net investment inflows to mutual easy access to savings and investment
long-term savings of millions of
funds and institutional investment solutions, as well as guidance and advice
people through our relationships with
strategies of £17.3 billion from trusted providers. In addition,
794 institutional clients, including
persistently low rates of return on bank
—— PruFund range reaches £36 billion 70 per cent of the UK’s 50 largest
cash deposits are fuelling demand for
in customer assets under pension schemes.
investment solutions, whether people are
management, up 46 per cent saving for retirement, building a lump sum We see significant opportunities for
—— 45 per cent growth in funds under or protecting their wealth from inflation. continued revenue growth, including
advice from our in-house direct from the synergies available from the
Managing £351 billion of assets1 for
advice service, Prudential combination of our investment
over seven million customers in the UK
Financial Planning, to £5.5 billion management and savings and retirement
and internationally, M&G Prudential has
solutions businesses. We also see an
investment expertise, scale and financial
opportunity to offer customers in our
strength and two well-respected brands.
existing book of traditional savings
With the substantial investment we will
products a new set of propositions
be making over the next five years in
as their needs evolve.
transforming the business’s operations,
including building our digital distribution The expertise of the business in
capability, M&G Prudential is well placed delivering investment outcomes for all
to meet the growing and evolving saving of our customers is demonstrated by the
and investment needs of customers scale of our operations. In total, M&G
across intermediated, institutional and Prudential fund managers invest over
retail direct channels. £187 billion of assets on behalf of
Prudential policyholders, in addition to
Customers the £164 billion of assets for customers
Serving the long-term interests of our invested in M&G mutual funds and
customers is key to the long-term institutional strategies. This combined
performance of our business. We offer investment footprint bolsters our
a range of investment and saving investment solution capabilities,
propositions to different customer groups: allowing us to build the business
12 Prudential plc Fact File 2018 www.prudential.co.ukAdding more to life:
Maureen, M&G Prudential
‘I was in my early 20s when I started investing with M&G
through a monthly savings plan. I found the idea of investing
with other people in different companies fascinating. I still
do, in fact. I wasn’t saving up for anything specific, but I
wanted to put my money to work for the future – either for
a big purchase, like a home, or just for more financial security.
At the end of the day, money can give you choices. You
never know what opportunities or challenges might be
around the corner. And not just for yourself – it’s great to
be able to help your family.
Having grown over the years, my investments with M&G have
given me more options in life. Decades on from the first £10
I put in to one of their funds, I really value still being an investor.’
around our customers and use our some of the extreme ups and downs business and two third-party investors.
experience and insights to meet of short-term investment performance The fund is already financing projects
their needs. to provide a more stable return. It has including a regeneration scheme, green
performed well over the past five years: energy and social housing construction.
Our products for example, customers in the PruFund
Our aim is to provide our customers with Growth Fund have seen growth of Investment for growth
savings and investment solutions which 36 per cent since the start of 2013 against Over the next five years, we will
meet their long-term financial needs and benchmark growth of 30 per cent. be investing circa £250 million of
goals, in the structure which best suits shareholders’ funds in our business,
them. Behind these solutions is a For direct investors in the UK and including a new digital infrastructure which
powerful investment engine: a highly intermediated customers in the UK and will improve customer service, accelerate
skilled team of over 120 fund managers internationally, we offer a range of 75 product development and increase
who put our customers’ money to work open-ended funds. The range offers a customer choice. Strategic partnerships,
by sourcing investment opportunities broad choice of asset types, geographies such as the recently announced Tata
globally across a wide spectrum of asset and investment strategies to help achieve Consultancy Services partnership to
classes, including equities, bonds, credit, a diversified portfolio. Our funds enhance service for our UK savings and
real estate and cash across both private generally aim to deliver a rising income retirement customers, are an important
and public markets. stream, long-term capital growth or a part of these plans to improve customer
mixture of both, and the vast majority are outcomes. With a simpler, more efficient,
Of the total of £351 billion in assets under available in ISA or JISA wrappers to UK digitally enabled business, we will respond
management1 across our entire product direct customers. Almost all of our funds quicker and better to our customers’
range, approximately 60 per cent is now are managed actively for the long term. needs, offer better value and compete at
invested in multi-asset solutions and scale in our markets even more effectively.
strategies, including the market-leading For our own life funds as well as for
£36 billion PruFund range and the our third-party institutional clients, Notes
we continue to deliver innovative and 1 Represents M&G Prudential asset management
strongly performing £12 billion Episode external funds under management and internal
Allocation range. Our expertise in asset competitive investment strategies. We funds included on the M&G Prudential long-term
allocation is a key part of our investment are leading investors in ‘alternative’ assets insurance business balance sheet.
such as commercial real estate debt, 2 Europe includes AUM in Asia and South Africa.
capability and has again driven substantial
inflows over the last year, as customers infrastructure debt and equity, and
across the UK and Europe have continued direct lending. These private assets In March 2018, the Group announced
to seek the diversification and flexibility are increasingly attractive options for its intention to demerge its UK and
of a multi-asset solution. investors looking for a yield to match Europe businesses (M&G Prudential)
their long-term pension liabilities, and from Prudential plc, resulting in two
Other products include a range of also provide a valuable source of separately listed companies, with
unit-linked and collective investments, competitively-priced funding for new different investment characteristics
and within our corporate pension housing and infrastructure projects. and opportunities. Looking forward,
portfolio we continue to facilitate a range we believe we will be better able to
of auto-enrolment services. Reflecting growing demand from
focus on meeting our customers’
institutional clients for investments
For our savings and retirement customers rapidly evolving needs and to deliver
which make a positive societal and
we offer the PruFund range, which invests long-term value to investors as two
environmental impact, in 2017 we seeded
in our with-profits fund, the largest in the separate businesses.
our first Impact Financing Fund with
UK. The with-profits fund aims to smooth investment from the Prudential life
www.prudential.co.uk Fact File 2018 Prudential plc 13Our businesses and their performance
Africa
Bringing the benefits of our products to customers across the region.
Understanding our markets Three new products targeted varying
2017 Sub-Saharan Africa is one of the customer needs across our Africa
fastest-growing regions in the world, and businesses in 2017:
highlights as economies develop, people are able
—— Prudential Uganda launched Pru
to start planning for financial stability.1
Dollar, an Education Savings Plan
Life insurance helps to make households
—— Around 700,000 customers with premiums and all benefits
financially secure, and complements public
in US dollars. It allows customers
—— +2,200 agents welfare provision. It also creates high and
to save for their children’s education
low-skill employment, including eight
—— 4 exclusive bank partners in a stable currency.
low-skilled jobs for every one high-skilled
—— Access to +600 bank branches job through agency distribution, and —— We rolled out a ‘never lapse’ feature
generates knowledge transfer to national in Ghana, to address one of the main
employees and regulators.1 concerns our customers have – that
unforeseen circumstances might lead
Prudential has ambitious plans to draw on
them to miss premium payments and
our experience around the world to build a
result in them losing their benefits.
market-leading insurer serving the growing
This new feature ensures that, beyond
long-term savings needs of customers in
the first policy year, the policy will
a range of African jurisdictions, creating
never lapse or become inactive. The
thousands of high-quality jobs along the
feature is due to be rolled out in
way, both for employees and self-
Kenya, Uganda and Zambia in 2018.
employed agents. In 2014, we launched
our first African businesses in Ghana and —— Prudential Ghana launched Ultimate
Kenya. In 2015, we launched in Uganda, Farewell Plans, which provide funeral
and in 2016, we opened our fourth benefits for the whole family and
African business in Zambia. incorporate the ‘never lapse’ feature.
We took another step forward in 2017 —— Prudential Kenya launched a
when we entered Nigeria, Africa’s combination savings and protection
largest economy with a population of product through Platinum Plus
over 180 million. We acquired a majority Brokers, which distributes the product
stake in Zenith Life of Nigeria and formed on a group basis and Gen Africa, which
exclusive bancassurance partnerships with is responsible for fund management.
Zenith Bank in Nigeria and Ghana. This
further demonstrates our commitment to Distribution
Africa, and our determination to bring the Prudential Africa now has more than 2,200
benefits of our products to customers agents, and is working with bank partners
across the region. bringing access to over 600 branches.
Our alliances include a recently renewed
Products 15-year bancassurance partnership with
Products currently include educational, Standard Chartered Bank, which includes
farewell, hospital cash plans and term life an agreement to work closely in Africa
insurance policies that are primarily sold to deliver best-in-class service to local
face-to-face by our agents. customers; and long-term exclusive
partnerships with Société Générale,
Fidelity Bank and CAL Bank in Ghana.
Note Our most recent partner is Zenith Bank,
1 ‘Life Insurance Markets in Sub-Saharan Africa:
capturing the benefits for economic development’ the largest bank in Nigeria, with a network
– research by the Overseas Development Institute of more than 350 branches, serving over
(ODI), supported by Prudential. 1.6 million customers.
14 Prudential plc Fact File 2018 www.prudential.co.ukCorporate responsibility
Building stronger communities
We build stronger communities by delivering products that
enable our customers to move ahead in their lives with confidence,
and by investing in the real economy to drive the cycle of growth.
Supporting local communities a new smartphone app called the
2017 Our investments in communities are ‘Cha-Ching Challenge’.
designed to support the communities
highlights in which we operate and deepen
In the US, the Jackson Charitable
Foundation has integrated Cha-Ching
engagement with colleagues. As such,
videos and lessons into Junior
—— £25 million total community our community investment programme
Achievement’s third-grade classroom
investment is linked to our strategy and is focused
programme, which is funded by the
around four principal areas: social
Foundation for six years and is expected
—— £500,000 raised through inclusion, education and life skills,
to reach approximately 2.7 million
Prudential RideLondon from disaster preparedness and
students over that time, in 15,000
charity partners and employees employee engagement.
classrooms annually. The Foundation
—— 96,493 hours volunteered We establish long-term relationships also partners with Discovery Education
by employees across the with our charity partners to ensure that to provide free Cha-Ching classroom
Prudential Group the projects we support are sustainable, activities and teacher guides, which will
and we work closely with them to ensure reach more than one million students
—— £412,375 donated by employees
that our programmes continuously across the country.
through payroll giving across
improve. In addition, we believe it is
the Group In the UK, working with Young Enterprise,
important to make a contribution
we have developed an online Cha-Ching
to delivering the United Nations’
educational resource for primary school
Sustainable Development Goals, and
students in England and Wales. The
we are supportive of those priorities.
Quality Mark teaching resource is linked
Cha-Ching – the first global to the Personal Finance Education Group’s
financial education programme Financial Education Framework and has
Developed by Prudential, Cha-Ching is guidance for teachers on how most
the world’s only global financial education effectively to integrate activities into their
platform aimed at primary school-aged teaching, as well as activities for its
children. Now in its seventh year, the home-learning. Since its launch in late
programme has expanded from its origins 2016, the resource has been downloaded
in Asia to each of the four continents over 20,000 times in more than 650
where the Group does business. In all of schools across the UK.
the markets where it has been launched it The online educational resource has also
has been very well received, with positive been used to support the roll-out of the
feedback from parents, teachers, children Cha-Ching programme across our African
and political stakeholders. markets as part of a financial literacy
In Asia, the programme reaches campaign delivered jointly by Junior
households through a multi-distribution Achievement Africa and Prudential
platform including Cartoon Network, and Africa employees; and Cha-Ching was
through a school contact programme that launched in Poland in 2015, with 10 films
has reached more than 300,000 children airing on children’s TV channels, and a
since inception. The standardised website for children and teachers to use
Cha-Ching curriculum developed in in Polish schools.
partnership with Junior Achievement
Commitment to social inclusion
has been well received and rolled out
in the UK through Prudential
to more than 90,000 students in
RideLondon
Indonesia, the Philippines and Malaysia.
In the past five years Prudential
In 2017, Cha-Ching increased its
RideLondon has raised over £50 million
presence on digital platforms, including
for charity and become one of the UK’s
www.prudential.co.uk Fact File 2018 Prudential plc 15Corporate responsibility
largest fundraising events. In 2017, communities better prepare for disasters interesting work and challenging
more than 846 charities benefited from and also, when required, provide opportunities to engage our people we
riders’ fundraising, up from 740 in 2016. immediate emergency response and drive employee engagement through an
Prudential has sponsored the event since longer-term recovery support. array of initiatives across our businesses.
its inception in 2013 and, as part of our The success of our engagement efforts
Prudence Foundation launched its third
renewal of the sponsorship in 2016, we has been recognised externally – for
Safe Steps programme in September
refocused support to concentrate on example, in 2017 M&G Investments
2017. Safe Steps First Aid is in partnership
charity and community engagement. The was ranked number one Asset Manager
with the International Federation of Red
PruGoals programme helps young people in both the HITC Best Places to Work
Cross and Red Crescent Societies (IFRC)
to achieve their goals regardless of social and the RateMyPlacement Top 100
and National Geographic. It builds on the
or economic background by providing employers surveys.
success of its previous two Safe Steps
aspirational challenges culminating in
programmes, which focus on natural Prudential believes that diversity of
taking on the Prudential RideLondon-
disasters and road safety. Safe Steps experience and background is vital to
Surrey 46 mile ride. In 2017, this
First Aid provides essential, easy-to- success, and the Board has made D&I
programme supported 300
understand first aid information to millions one of the strategic objectives for the
disadvantaged young people to take
of people throughout Asia. Company. Our policies and plans support
part in the ride. In 2017, Prudential also
an inclusive culture sensitive to the
supported the ‘Fixing Challenge’, which Prudence Foundation also supports the
needs of all employees. We protect our
followed four people hoping to improve Safe Schools programme, partnering with
employees against discrimination and
their type-2 diabetes, weight issues or Plan International and Save the Children
provide opportunities for our people
weight-related health concerns through in Cambodia, Indonesia, the Philippines,
regardless of their age, caring
taking on the challenge of the Prudential Thailand and Vietnam. The programme
responsibilities, disability status, ethnicity,
RideLondon-Surrey 100 mile ride and places schools at the heart of building a
gender, religion, sexual orientation or
having their journey filmed as part of culture of disaster preparedness within
professional and educational background.
a new documentary. communities. The programme trains
We make appropriate disability
students and teachers in key disaster
Successful volunteering adjustments as required and provide
management skills and supports the
programme – Chairman’s Challenge training and career development
organisation of disaster simulations and
Chairman’s Challenge is our flagship opportunities for all. We give full and
evacuation drills for students and their
international volunteering programme, fair consideration and encouragement
communities. Since 2013, more than
bringing together people from across to all applicants with suitable aptitude
82,000 students and 33,000 teachers
the Group to help in their communities. and abilities.
have participated.
Colleagues from across the Group give We aspire that over time our senior
their time and skills to support our global Prudential has been a Group-level
management, including our Board,
charity partners, including Plan supporter of Save the Children since 2010
better represents the experiences and
International, HelpAge International and and is one of the Children’s Emergency
backgrounds of our customers and
Junior Achievement. The programme Fund’s major supporters. This allows us
stakeholders. We recognise that diversity
continues to appeal to colleagues, with to act swiftly when disasters occur in
contributes to effectiveness and is
the number of volunteers signing up any of our markets and provides an
essential for successfully delivering the
increasing year-on-year. From its launch instant, effective fundraising mechanism
strategy of an international Group.
in 2006, volunteer numbers have for employees. In 2017, the emergency
increased by 227 per cent. In 2017, 8,500 fund was used 81 times and reached We are committed to developing a robust
colleagues around the world took part, over a million people in 40 countries. and diverse talent pipeline and increasing
volunteering over 35,000 hours to This included help for casualties of heavy representation of women in senior
support 30 projects. monsoon rains in India, Bangladesh and positions in the Group and on the Board.
Nepal; a mudslide in Sierra Leone; an We were among the first cohort of
Disaster readiness and relief earthquake in Mexico and hurricanes companies to sign the HM Treasury
As a life insurance and asset management in the US. Women in Finance Charter in 2016, and
company, our core business is to help will continue to focus effort toward having
protect and reduce the vulnerability of Valuing our people 27 per cent women in senior management
individuals and their families in the face We strive to foster an environment in by the end of 2019.
of unfortunate events. Asia Pacific is the which employees can derive meaning
and empowerment from their work We are committed to supporting
world’s most disaster-prone region so
and feel that they are making an active women who aim to return to work after
the Prudence Foundation is working
contribution to the organisation. In an extended career break. As an
with humanitarian and private sector
addition to the core principle of providing example of this commitment, in 2017
organisations and governments to help
16 Prudential plc Fact File 2018 www.prudential.co.ukAdding more to life:
Prudential Scholarship programme,
Zambia
Prudential’s scholarship programme in Zambia is run in
partnership with the international charity, Camfed, and was
endorsed by the Ministry of Education. The programme
focuses on educating young girls and people with
disabilities in rural Zambia.
Sara is the sixth born in a family of eight children. Having
completed primary school and achieved impressive results in
her primary leaving examination, she was awarded a place at
secondary school, but her parents did not have the money to
pay the fees and it looked as if she would have to turn down
her place. Fortunately, Sara was awarded a scholarship.
Prudential’s support is enabling Sara to take her final school
leaving examination, giving her the potential to go on and
pursue her dream of becoming a medical professional. She
says: ‘I encourage Camfed donors to continue supporting
other vulnerable children in the same way they have done
for me. When I complete my Grade 12, I wish to work in the
health sector as a medical personnel by studying for Medicine
at the University of Zambia, if possible becoming a surgeon.’
Eastspring Malaysia launched the ‘Career Investing for positive change at least some of those people get these
Comeback for Women’ programme, and As an asset manager and asset owner, we basic amenities, while at the same time
in the US, Jackson sponsored a 10-stop have the ability to affect positive change, helping our customers meet their own
national speaking tour focusing on indirectly through the direction of our vital savings needs.
women’s empowerment. capital and our customers’ capital. We
Our investment teams in Asia, Europe
allocate our customers’ capital into
Performance and reward and the US are all working hard to invest
projects that fuel economic growth and
Our reward arrangements are designed with a positive purpose. In developed
improve the quality of people’s lives,
to attract, motivate and retain high-calibre economies, traffic congestion, electricity
including through investments in
people. Each individual contributes to ‘brown-outs’ and rural broadband
affordable homes, transport programmes
the success of the Group and is rewarded black spots can constrain economic
that cut commuting times, broadband
accordingly. We recognise and reward growth and make daily life frustrating.
networks that connect people and power
high performance and are committed to M&G Prudential’s new Greenfield Fund
stations that use clean energy. These
a fair and transparent system of reward. will enable our clients to participate in
investments translate into strong, reliable
Remuneration is linked to the delivery of infrastructure projects at an earlier stage
returns for our customers and tangible
business goals and expected behaviours than was previously possible, which will
benefits for the communities we serve.
and we ensure that rewards for our people translate into stronger returns and more
The long-term nature of the promises we
are consistent with our values and do not essential projects receiving the funding
make to our customers and clients makes
incentivise inappropriate risk-taking. they need. The UK government in 2017
long-term investments in infrastructure
To enable this, employees are not only recognised our skills in this area by
an ideal way of ensuring we can afford to
regularly assessed on ‘what’ they have appointing M&G Prudential to manage
meet those promises in full.
achieved, but also on ‘how’ they have a portion of its £400 million Digital
done so. In 2017, Eastspring Investments Infrastructure Investment Fund, aimed
announced a significant step forward in at kick-starting better broadband
There are recognition initiatives running our infrastructure investment capabilities. connections across the country.
across our businesses, and we also believe IFC, part of the World Bank, chose
in the importance of giving employees the PPMA, our US asset manager, is helping
Eastspring as its first Asian partner in
opportunity to benefit from the Group’s states such as California and Texas meet
a programme that mobilises funds from
success through share ownership, their ambitious green energy targets and
institutional investors into projects in
operating share plans for employees reduce the risk of future power shortfalls,
emerging markets. This US$500 million
in the UK and Asia. Of all eligible with investments in wind and solar
partnership will help us scale up our skills
employees, 59 per cent participate in the generation. We have also made a recent
in the region. Worldwide, 1.2 billion
Group’s UK Sharesave and 25 per cent in investment in new storage batteries,
people still have no access to electricity
the share incentive plans. which enable consistent power delivery
and 660 million lack a clean source of
from renewable sources.
drinking water. This programme will help
www.prudential.co.uk Fact File 2018 Prudential plc 17You can also read
