We do life - Prudential plc Fact File 2019
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We do life. Prudential plc Fact File 2019
Prudential helps people de‑risk their lives and deal with their biggest financial concerns.
£657 billion
total funds under management
26 million
customers worldwide
Contents
Page
At a glance 02
Our business model 04
Our distribution 06
Demerger update 07
Our businesses
Asia 08
Africa 11
United States 12
M&GPrudential 14
Our communities 16
Our history 20
www.prudential.co.uk Fact File 2019 Prudential plc 01
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 markets where the need for our
products is strong and growing and we use our capabilities, footprint and
scale to meet that need. In 2018, the Group announced its intention to
demerge its UK and Europe business, M&GPrudential, from Prudential plc.
Our purpose
Prudential helps people de-risk their lives and deal with their biggest financial concerns.
Our strategy
Our strategy is to capture the long-term We aim to do this by: We aim to generate attractive returns,
structural opportunities within our enabling us to provide financial security
—— Serving the protection and investment
markets, operating with discipline and to our customers and deliver sustainable
needs of the growing middle class
enhancing capabilities through growth for our shareholders. Following
in Asia;
innovation to deliver high-quality rigorous review, we believe that this
resilient outcomes for our customers. —— Providing asset accumulation and long-term strategy is best served through
retirement income products to the intended demerger of M&GPrudential.
US retirees;
The demerger will enable both businesses
—— Offering products to new customers to continue to deliver on our customer and
in Africa, one of the fastest-growing stakeholder commitments, but without the
regions in the world; and requirement to compete for resources and
—— Meeting the savings and retirement capital internally.
needs of an ageing UK and continental
European population.
02 Prudential plc Fact File 2019 www.prudential.co.uk
Structural growth over the last two decades has allowed
our non-European business to reach the scale where it has
the ability to self-fund its own long-term goals through
disciplined capital allocation. Prudential plc has a diversified,
but highly complementary, portfolio of businesses with
access to the world’s largest and fastest-growing markets.
Prudential Corporation Asia has leading insurance and asset
Asia management operations across 14 markets which serve the
families of the region’s high potential economies. We have been
Leading pan-regional franchise operating in Asia for over 90 years and have built high-performing
businesses with multi-channel distribution, a product portfolio
£151 billion assets under management centred on regular savings and protection, award-winning
94% of APE sales are regular premium customer service and a widely recognised brand.
£1.2 billion underlying free surplus generation Eastspring Investments is a leading asset manager in Asia and
provides investment solutions across a broad range of asset classes.
Jackson provides retirement savings and income strategies
United States aimed at the large number of people approaching retirement
in the United States. Jackson’s pursuit of excellence in product
Premier retirement income player innovation and distinctive distribution capabilities has helped
us forge a solid reputation for meeting the needs of customers.
US$163 billion separate account assets Jackson’s variable annuities offer a distinct retirement solution
US$2.2 billion variable annuity net inflows designed to provide a variety of investment choices to help
customers pursue their financial goals.
£2.4 billion fee income
We entered Africa in 2014, to offer products to new customers in
Africa one of the fastest-growing regions in the world. We aim to provide
products that help our customers live longer and healthier lives,
and save to improve future choices for them and their families.
The formation of M&GPrudential, joining two
well recognised brands with a strong track record,
has created a leading savings and investment business,
ideally positioned to target growing customer demand
for financial solutions in the UK and Europe.
With over six million clients across 29 markets and £321 billion1 in
M&GPrudential assets under management, M&GPrudential’s vision is a business
built for the customer which is simple, efficient, digitally enabled,
Long-term conviction-led investment approach capital-light, fast-growing and, above all, focused on delivery.
£43 billion total PruFund funds under management The combined business benefits from two strong complementary
brands, a world-class investment capability, international
Operating in 29 markets distribution and a robust capital position.
£321 billion total M&GPrudential funds under management1
Note
1 Represents M&GPrudential asset management external funds under management
and internal funds included on the M&GPrudential long-term insurance
balance sheet.
www.prudential.co.uk Fact File 2019 Prudential plc 03
Our business model
Evolving to serve the future customer
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.
Capturing structural opportunity ... through enhanced capabilities
Serving
Customer service
Customers are at the heart of our strategy. We proactively
customer
listen to both new and existing customers to understand
and respond to their changing needs. This allows us to
propose financial solutions customised for different groups,
needs whether that is young and middle-aged people or those in
retirement. We are expanding our digital infrastructure to
enhance customer experience.
Solutions
We offer solutions for customers as they face the biggest
Asia financial challenges of their lives. We consistently develop
our product portfolio, designing it around our customers’
—— Low life insurance and mutual fund penetration
needs and providing them with peace of mind, whether
—— Significant health and protection gap
in relation to saving for retirement or insuring against risks
—— Growing working age population
of illness, death or critical life events.
—— Increasing consumer affluence
Distribution
Distribution plays a key role in our ability to reach, attract
and retain customers in different parts of the world. Building
out and diversifying our distribution capabilities, including
adding digital tools, helps ensure that we fully capitalise on
United States the opportunities available to us in each of our markets.
—— Increase in retirement age population
—— Large and growing retirement asset pools
—— Growing demand for guaranteed 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 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
digital capabilities to empower our distributors and improve
customer service.
M&GPrudential
—— Ageing population
—— Large and growing retirement asset pools Risk management
—— Growing demand for saving and income 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.
04 Prudential plc Fact File 2019 www.prudential.co.uk
... creating high-quality outcomes ... for our stakeholders.
Growth We create financial benefits for our investors and deliver
economic and social benefits for our customers, our
£4,827m
Operating profit1 +6%2 on 2017
employees and the societies in which we operate.
Customers
Providing financial security and wealth creation.
£3,877m
New business profit +11%2 on 2017
Investors
Growing dividends and share price performance enhance
shareholder value.
£7,563m
Employees
Providing an environment with equal opportunities, career
EEV operating profit +19%2 on 2017 potential and rewards, enabling us to attract and retain
high-quality individuals to deliver our strategy.
Communities
Cash Supporting communities where we operate, through
£4,047m
investment in business and infrastructure, tax revenues and
community support activities.
Free surplus generation +14%2 on 2017
£1,732m
Remittances -3%3 on 2017
Capital
£17.2bn
Solvency II surplus +29%3 on 2017
232%
Solvency II cover ratio +30pp on 2017
Notes
1 Adjusted IFRS operating profit based on longer-term investment returns.
2 Growth rates on a constant exchange rate basis.
3 Growth rates on an actual exchange rate basis.
www.prudential.co.uk Fact File 2019 Prudential plc 05
Our distribution
Our global distribution strength
We respond to the needs of our global customers through diverse and robust
distribution channels in all our markets.
Jackson Prudential Corporation Asia
Strength and flexibility of our distribution Pan-regional multi-channel network
network gives us a distinctive advantage
Largest and most productive VA wholesale distribution +600,000 agents
force in the US1 Multiple established bank partnerships
+700 broker-dealers’ selling agreements covering +230,000 Access to +14,000 bank outlets
(74%) of total US advisers2
Eastspring Investments is present in 11 Asia markets and has
#1 selling variable annuity contract3 in the independent distribution offices in US and Europe
channel since 2003
+15 million life customers
4 million customers
Prudential Africa M&GPrudential
Establishing network with Diversified distribution model underpinned
market-leading initiatives by two complementary brands
+4,000 agents £321 billion total assets under management4
6 exclusive bank partners Operating in 29 markets around the world
Access to over 600 bank branches +6 million customers
2 mobile telecommunications partners +300 Prudential Financial Planning partners
+500,000 customers
Notes
1 Independent research and Market Metrics, a Strategic Insight Business: Past performance is no guarantee of future results. Morningstar www.AnnuityIntel.com.
US Advisor Metrics 2018, as of 30 September 2018. Total Sales by Company & by Contract 3Q YTD 2018. Jackson ranks #1 out of 725 VA
2 The Cerulli Report Adviser Metrics 2018 and Jackson research. contracts with reported sales in the Independent Channel in 3Q YTD 2018.
3 ©2019 Morningstar, Inc. All Rights Reserved. The information contained herein: 4 Represents M&GPrudential asset management external funds under management
(1) is proprietary to Morningstar and/or its content providers; (2) is not warranted and internal funds included on the M&GPrudential long-term insurance business
to be accurate, complete, or timely. Neither Morningstar nor its content providers balance sheet.
are responsible for any damages or losses arising from any use of this information.
06 Prudential plc Fact File 2019 www.prudential.co.uk
Demerger update
Creating two leading companies
We are aiming to create two separately listed companies with distinct
investment prospects, capital allocation priorities and customer needs.
M&GPrudential, one of the leading savings and investments businesses
in the UK and Europe, will be an independent, capital-efficient business,
headquartered and premium-listed in London.
Prudential plc will continue to combine the exciting growth potential of
our Asia, US and Africa businesses, as a leading international insurance
and asset management group. We will also remain headquartered and
premium-listed in London.
Prudential plc M&GPrudential
Prudential Prudential Jackson Prudential UK & Europe M&G Investments
Corporation Africa
Asia
Chief Executive Officer: Mike Wells Chief Executive Officer: John Foley
Headquarters: London Headquarters: London
Premium listing: London Stock Exchange Premium listing (intended): London Stock Exchange
Other listings: Hong Kong (Primary), Singapore, New York
Frequently asked questions
What is the rationale for the demerger? How are we progressing? —— We completed the transfer of the legal
Following separation, M&GPrudential will In preparation for the demerger, we ownership of our Hong Kong insurance
have more control over its business strategy have already completed a number of key subsidiaries from The Prudential
and capital allocation. This will enable it to steps, including: Assurance Company Limited
play a greater role in developing the savings (M&GPrudential’s UK-regulated
—— We announced that the Hong Kong
and retirement markets in the UK and insurance entity) to Prudential
Insurance Authority would be the
Europe through two of the financial sector’s Corporation Asia Limited.
Group-wide supervisor after the
most trusted brands, M&G and Prudential,
demerger of M&GPrudential; When will it happen?
while Prudential plc will be able to focus on
the attractive returns and growth potential —— We raised £1.6 billion of debt in We are making good progress on the
of its market-leading businesses in Asia and September 2018. This debt issuance workstreams to enable the legal, operational
the US. contained a substitution clause, allowing and financial separation of the businesses
us to substitute M&GPrudential for and we are committed to delivery with best
Will the businesses stay in the UK? Prudential plc as the issuer; execution. We will provide more details on
Both businesses will be headquartered in timing when it is appropriate to do so.
the UK, and premium-listed on the London —— We established a new holding
Stock Exchange. We expect both company for M&GPrudential and What will happen to your shares?
businesses will meet the criteria for inclusion completed the transfer of the legal Shareholders will retain their shares
in the FTSE 100 index. ownership of The Prudential in Prudential plc and, if the demerger
Assurance Company Limited and completes, receive shares in a separately
M&G Group Limited to this company; listed M&GPrudential.
—— We announced the independent Chair
of M&GPrudential in October 2018; and
www.prudential.co.uk Fact File 2019 Prudential plc 07
Asia
2018 performance highlights
—— New business profit up 14 per cent1, operating profit up 14 per cent1 and underlying free surplus
generation up 14 per cent1
—— Developed over 160 products in 2018 and added 1.4 million new life customers2
—— Signed an exclusive partnership with Babylon Health to provide AI-powered digital health services
in up to 12 markets across Asia
—— Established Eastspring’s wholly foreign-owned enterprise in Shanghai and extended our asset
management presence to Thailand
Our business resulted in an estimated health protection Strategic priorities
It is 95 years since we established our first gap of US$1.8 trillion in 2017 across the Our business achieves high risk-adjusted
operations in Asia, and today our footprint Asia region4. returns by maintaining a disciplined focus
spans 14 markets. We provide insurance on value. Two key distinguishing features
The economic growth potential of the
and asset management solutions that of our sales mix are the contribution from
region is widely recognised and is expected
enable customers of all ages to address health and protection products, which
to translate into rising levels of affluence,
their health, protection and savings needs. collectively accounted for 70 per cent of
with 88 per cent of the next billion entrants
our new business profit in 2018, and the
We have a top three position in eight out into the middle class predicted to be based
high proportion of regular premiums,
of our 12 insurance markets3 and Eastspring in Asia5. Indeed, total annual expenditure
which comprised 94 per cent of APE
Investments, our asset management by Asia’s middle class is forecast to reach
sales. We favour this mix because it
business, remains the largest pan-regional US$37 trillion in 20305, more than double
provides our shareholders with a higher
retail asset manager in Asia, excluding the current amount.
and more stable return across market
Japan. In addition, Eastspring retained
Asia’s economies are also benefiting from cycles. Our success in health and
the prestigious ‘Best Asia Fund House’
a demographic dividend, with moderating protection is underpinned by our
accolade in 2018.
fertility rates and improving life expectancy. comprehensive underwriting processes,
Market opportunity Across Asia, the working age population extensive experience and the technical
Consumers in Asia are both under-insured is forecast to grow by almost one million capabilities of our in-house professionals.
and under-saved during their working people per month between now and 2030 Meanwhile, the high proportion of regular
lives, which leaves them inadequately to 2.5 billion people6. Meanwhile, the premiums ensures we collect a steady
prepared for retirement. Furthermore, number of those aged over 65 is projected stream of revenues across market cycles.
the limited welfare social safety net in many to almost treble by 2050 to 700 million6.
This focus on value is supported by four
of our markets means that out-of-pocket This is expected to create demand for
strategic priorities that we believe align
healthcare spend by people in Asia is three new solutions in markets with ageing
with the evolving sources of demand
to four times the proportion seen in the populations, such as Hong Kong and
across the region and will position our
US and UK. Collectively, these dynamics China, as individuals look to maintain their
business for continued future growth.
standard of living during retirement.
See the panel on page 9 for details.
08 Prudential plc Fact File 2019 www.prudential.co.ukCustomers
We have over 15 million life customers. Strategic priorities
Our strong retention ratio, which
remained in excess of 90 per cent, and We seek to enhance the core of our personal health assessments and
the consistently high proportion of repeat existing business by improving our treatment information, powered by
sales, which last year contributed over customers’ experience. artificial intelligence, which will greatly
40 per cent of APE sales, demonstrate enhance our customers’ access to
—— We have extended our exclusive
the regard and trust our customers have healthcare, particularly for those in
partnership with UOB until the end
in our business. These dynamics mean remote locations, while empowering
of 2034 and agreed to expand its
that we have 24 million in-force policies them to proactively manage their health
scope to include Vietnam and UOB’s
in total. In addition, our focus on health in a flexible and cost-efficient manner.
digital bank.
and protection business is reflected in We plan to accelerate Eastspring
a 7 per cent increase in sum-at-risk per —— We continue to expand and diversify
by expanding its existing investment
policy, which is a leading measure of our distribution reach, with nine new
offering and enhancing its distribution
insurance coverage. Funds managed bank partnerships across six of our
capabilities. We have continued to
by Eastspring grew by 6 per cent to markets successfully activated during
strengthen our in-house investment
£151 billion at the end of 2018, with 2018, including Siam Commercial
teams, which helped us launch 51 new
10 per cent growth among third-party Bank in Thailand and O-Bank,
products in 2018. In September, we
retail clients. the first digital bank in Taiwan.
entered Thailand, the largest mutual
We maintain this advantage by constantly —— We simplify the process of fund market in the Association of
striving to improve the experience of our purchasing a policy by embracing Southeast Asian Nations (ASEAN)7, with
customers, with whom we have over the latest technology and the acquisition of TMB Asset
two million interactions every month. embedding this within proprietary Management. Our on-the-ground team
Our new Jet claims tool, which is currently tools used by our agents and recently launched an Asia Pacific
being used in Hong Kong and Indonesia, bank partners. Property Flexible Fund that obtained
can automatically review, assess and pay inflows totalling US$91 million during the
—— We use digital technology in week-long initial public offering period.
a claim on the same day. We now have servicing policies to improve the
e-claims capability in six of our businesses efficiency of our business and We intend to expand our presence
and have already attained submission enhance customer satisfaction. in China across both the insurance and
rates of almost 40 per cent. In Hong Kong, we developed the asset management sectors.
At Eastspring we use digital tools to ‘Hospital to Prudential’ portal to
—— We recently established a new
help our retail clients set and achieve redefine the way our customers and
branch in Hunan and received
their savings goals. Our partnership medical professionals manage
regulatory approval to undertake
with Alkanza has enabled us to build hospital claims, reducing the time
preparatory work to establish a new
a robo-advisory platform in Taiwan that required to submit a claim to just
branch in Shaanxi. This expansion is
can suggest portfolio rebalancing if three minutes. In China, we have
supported by growth in our agency
performance is off track, and has the extended our award-winning
force, which grew by 7 per cent in
functionality to show the impact of WeChat self-service platform to
2018 to 48,000 agents.
changes in parameters, such as retirement include 90 per cent of all policy
age and contribution amount. administration actions. In Thailand, —— We formed a two-year research
we created a new customer services partnership with the Development
Products touchpoint through PruConnect, Research Centre of the State Council
We offer our customers a broad which enables customers to quickly focused on the development of
range of health, protection and savings access key information such as policy a sustainable pension system.
solutions that are tailored to local market information, premium certificates
—— We opened Eastspring’s wholly
requirements and individual needs. and nearby network hospitals.
foreign-owned enterprise in
Key to our ongoing success is our focus We want to create ‘best-in-class’ Shanghai, which enables us to manage
on upgrading our product suite to add health capabilities and attained new onshore investments for high-net-
innovative new features, and last year business profit growth of 15 per cent worth individuals and institutional
nearly half of new business profit arose from health and protection products in investors in China, complementing
from the 160 products that were 2018. Our strategy is supported by our existing asset management joint
developed in 2018. For example, in distinctive value-added services, such venture with CITIC.
Hong Kong we launched a new critical as the exclusive multi-year partnership
illness product with extended protection we signed with Babylon, a UK-based
for cancer, heart attacks and strokes; and healthcare and technology services
we enhanced our protection product for company. This partnership will provide
www.prudential.co.uk Fact File 2019 Prudential plc 09Asia continued
mothers and unborn children in Malaysia, channels, customers are now more priorities with recent investments, such as
PRUmy child, by expanding the range actively engaging with us through our Babylon, transforming our offering.
of pregnancy complications included online platforms.
Our market-leading position in retail fund
and extending the coverage period
Prudential has over 600,000 licenced tied management reflects our region-wide
for congenital illnesses. We are also
agents across our 12 life markets in Asia. presence and strong operating credentials.
developing products to meet the upcoming
This proprietary distribution channel This positions us well for the future growth
needs of Asia’s ageing populations and
is a core component of our success, in the market that is expected from new
were among the first group of insurers to
accounting for 84 per cent of new wealth creation and the shift we envisage
be granted approval to offer a tax-deferred
business profit, having grown by from deposits to riskier investments. We
pension product in China.
14 per cent in 2018. We place great believe these factors make double-digit
In addition, we develop products with emphasis on the professionalism and growth viable in India, where we are
specialist characteristics that broaden productivity of our agency force, and market leaders, alongside other key
our offering and appeal. We have been facilitate this by providing new and markets such as China and Thailand,
proponents of products that comply with upgraded tools. where we have taken action to strengthen
the requirements of Islamic law for many our position.
We pioneered the strategy of partnering
years, and sales of our Syariah products
with banks in Asia over 20 years ago and
in Indonesia grew by 17 per cent in 2018
now have one of the largest and most
to over £50 million, equivalent to over
successful bancassurance franchises in
20 per cent of our APE in this market.
the region. Our strategic partnerships
This positions us as market leaders in
include multi-national banks, regional
Indonesia’s Syariah market, in addition
banks and prominent domestic banks in
to Malaysia’s Takaful market, with
many key markets including China, India
market shares of approximately
and Taiwan. In total, we have access to
30 per cent in both cases. We have also
over 14,000 bank outlets.
launched PRUvital cover in Singapore,
a first‑in‑the‑market protection plan for We have also started collaborating
customers with four types of common with non-traditional partners, including
pre-existing chronic medical condition DirectAsia, Hiscox’s online property
that previously could act as barriers and casualty business in Singapore, and
in obtaining insurance coverage. Eureka, a data management and analytics Notes
1 Growth rate on a constant exchange rate basis.
platform based in Indonesia. These 2 Excluding India.
In Singapore, we recently launched
mutually beneficial partnerships will 3 Based on full year 2018 or the latest information
Opus, a proposition specifically tailored available. Sources include formal (eg competitors’
enable us to reach new customers and
for high-net-worth customers. This results release, local regulators and insurance
create unique opportunities for our association) and informal (industry exchange)
brings a differentiated experience for
existing ones. market share data. Ranking based on new business
our customers and includes a dedicated (APE sales, weighted full year premium or full year
service team, wealth planners and Business outlook
premium depending on availability of data).
4 Swiss Re Institute: The health protection gap in
external experts covering trust and legal We are well positioned in the traditional Asia, October 2018. Average gap per household is
matters. We also launched PRUworks, life insurance segment, with a market calculated as ‘total health protection gap divided by
our new insurance proposition for the share of approximately 25 per cent8. We
the estimated number of households hospitalised
under the mentioned gap range’. Report excludes
corporate segment, targeting small and forecast that this market has the potential Cambodia and Laos.
medium enterprises. Our PRUworks to continue growing at a double-digit rate 5 Brookings Institution. Global Economy & Development
platform is an all-inclusive platform that Working Paper 100. February 2017. ‘Asia’ represents
over the next five years, due to the Asia Pacific.
comes with a digitally enabled HR solution underlying structural drivers of demand 6 United Nations, Department of Economics and Social
for business owners and their employees, in the region. Our presence, scale and
Affairs, Population Division (2017). World Population
providing access to employee benefits Prospects: The 2017 Revision.
broad product and distribution reach 7 © 2018 Strategic Insight, an Asset International
and services alongside additional services position us well to participate strongly Company and when referenced or sourced
such as lifestyle programmes. in this expected growth.
Morningstar Inc., Standard & Poor’s Inc., and Lipper
Inc. All rights reserved. The information, data,
analyses and opinions contained herein (a) include
Distribution We also anticipate strong growth in the confidential and proprietary information of the
Our experience shows customers have medical reimbursement segment in our aforementioned companies, (b) may not be copied
an overarching preference for face-to- or redistributed for any purpose, (c) are provided
current markets, which we believe will solely for information purposes, and (d) are not
face advice from a trusted financial more than double in the next five years due warranted or represented to be correct, complete,
adviser while also increasingly demanding to increasing consumer demand. We have accurate, or timely.
the flexibility to conduct basic digital 8 Proprietary research/Bain Analysis (2018) covering
estimated that our share of the value pool the following markets: Hong Kong, Singapore,
research and fact-finding themselves. in this segment is currently 9 per cent, Indonesia, Malaysia, China, and India, using sales
While tied agents and in-branch bank which gives us significant scope to expand. data provided by insurance regulators, insurance
associations and industry expert surveys in
partner staff remain our primary distribution This ambition is reflected in our strategic these markets.
10 Prudential plc Fact File 2019 www.prudential.co.ukAfrica
2018 performance highlights
—— +500,000 customers
—— +4,000 agents
—— 6 exclusive bank partners and 2 mobile telecommunications partners
—— Access to +600 bank branches
Sub-Saharan Africa is one of the Products of the family to be covered by the gross
fastest-growing regions in the world, Products currently include educational, amount of the policy, rather than being
and as economies develop, people are farewell, hospital cash plans and term life limited to their specified cover-age limit.
able to start planning for financial stability1. insurance policies that are primarily sold
Prudential Africa has ambitious plans to face-to-face by our agents. Several new Distribution
draw on the Group’s experience around products designed to cater for varying Prudential Africa now has more than 4,000
the world to build a market-leading customer needs across our Africa agents, and is working with bank partners
insurer serving the growing long-term businesses were launched in 2018: that bring access to over 600 branches. Our
savings needs of customers in a range alliances include a 15-year bancassurance
—— Prudential Ghana rolled out education partnership with Standard Chartered Bank,
of African markets, creating thousands
and enhanced farewell products which includes an agreement to work
of high-quality jobs for employees and
through their new distribution closely in Africa to deliver best-in-class
self-employed agents.
agreement with Standard Chartered service to local customers; and long-term
In 2014, we launched our first African Bank; and an income protection plan exclusive partnerships with Société
businesses in Ghana and Kenya. In 2015, that is available via mobile phone Générale, Fidelity Bank and CAL Bank in
we launched in Uganda, and in 2016, distribution for the benefit of informal Ghana. We have also partnered with Zenith
we opened our fourth African business sector workers; Bank, the largest bank in Nigeria, with
in Zambia. In 2017, we entered Nigeria, a network of more than 350 branches,
—— ‘Never lapse’ features were rolled out
Africa’s largest economy with a serving over 1.6 million customers. In 2018,
in Kenya and Zambia, ensuring that,
population of over 180 million. We we signed a long-term exclusive partnership
beyond the first policy year, the policy
acquired a majority stake in Zenith with Zambia’s largest retail bank, Zanaco,
will never lapse or become inactive. This
Life of Nigeria and formed exclusive offering our insurance products and
provides reassurance for customers that
bancassurance partnerships with Zenith services to 1.2 million customers.
unforeseen circumstances that may lead
Bank in Nigeria and Ghana. This further
them to miss premium payments will not
demonstrates our commitment to Africa,
result in the loss of benefits; and Note
and our determination to bring the 1 ‘Life Insurance Markets in Sub-Saharan Africa:
benefits of our products to customers —— Prudential Zambia launched a group capturing the benefits for economic development’ –
across the region. medical plan that allows any member research by the Overseas Development Institute
(ODI), supported by Prudential.
www.prudential.co.uk Fact File 2019 Prudential plc 11United States
2018 performance highlights
—— New distribution relationship with State Farm
—— New collaboration to offer advisory annuities on the Envestnet Insurance Exchange
—— Awarded ‘Contact Center World Class CX Certification’ and ‘Highest Customer Service for
the Financial Industry’ awards by The Service Quality Measurement Group, Inc.
The US is the world’s largest retirement to build wealth through a combination Access Advisory II to serve advisers
savings market with approximately of a base crediting rate that is generally and distributors with a preference for
40 million Americans reaching retirement lower than a traditional fixed annuity advisory products.
age over the next decade. For those crediting rate, but with the potential
In March 2018, Jackson launched
Americans, a financially secure retirement for additional upside, based upon the
MarketProtector and MarketProtector
is at risk. Americans need and demand performance of the linked index.
Advisory, two new fixed annuities with
retirement strategies that offer them the
—— Fixed annuity A Jackson fixed index-linked interest. These products
opportunity to grow and protect the value
annuity is a guaranteed product provide consumers with the sought-after
of their existing assets, and provide
designed to build wealth without combination of tax-deferred investment
guaranteed income that will last
market exposure, through a crediting growth, protection from market risk
throughout their extended lifetimes.
rate that is likely to be superior to and the flexibility to adapt to changing
Customers and products interest rates offered from banks or needs in retirement. Both products offer
Jackson provides products that offer money market funds. an add-on living benefit that allows
Americans the retirement strategies they customers to safeguard their financial
These products also offer tax deferral,
need, including variable, fixed and fixed futures with income for life.
allowing interest and earnings to grow
index annuities. tax-free until withdrawals are made. In 2018, Jackson took a lead role in
—— Variable annuity A Jackson variable bringing together 24 of America’s financial
Jackson has a proven track record in this
annuity, with investment freedom, services organisations to launch the
market with its market-leading flagship
represents an attractive option for Alliance for Lifetime Income (Alliance).
product1, Perspective II. Jackson’s success
retirees, providing both access to equity The Alliance’s nationwide, multi-year,
has been built on its quick-to-market
market appreciation and guaranteed integrated educational campaign is
product innovation, as demonstrated by
lifetime income as an add-on benefit. designed to raise awareness and motivate
Elite Access, our investment-only variable
consumers and financial advisers to
—— Fixed index annuity A Jackson fixed annuity, and in response to the trend in
discuss the need for protected lifetime
index annuity is a guaranteed product financial services toward fee-based
income in retirement, which can be
with limited market exposure but no solutions, Jackson has launched
achieved with the use of annuity products
direct equity ownership. It is designed Perspective Advisory II and Elite
such as those provided by Jackson.
12 Prudential plc Fact File 2019 www.prudential.co.ukDistribution distribution, leadership in the annuities diversifies Jackson’s risk portfolio and
Jackson markets its retail products market, best-in-class service and a revenue sources in relation to both
primarily through advice-based low-cost efficient operation, we believe general and separate account businesses.
distribution channels, including that Jackson is well positioned to take
With the ever-changing regulatory
independent agents, independent advantage of this opportunity.
environment described earlier, Jackson
broker-dealer firms, regional broker-
In late 2018, the US National Association has made and continues to consider
dealers, wirehouses and banks. For
of Insurance Commissioners (NAIC) changes to its product offerings, entered
variable annuity sales, Jackson is the
concluded an industry consultation with the into new selling agreements with advisory
leader in the independent broker-dealer,
aim of reducing the non-economic volatility providers, and is working with its
bank and wirehouse channels1 and
in the variable annuity statutory balance distributors to support implementation of
fourth in regional firms1.
sheet and enhancing risk management. the anticipated SEC best interest standard.
Our wholesaling force is the largest2 The NAIC is targeting a January 2020
Jackson’s competitive strengths are
in the variable annuity industry and our effective date for the new framework.
even more critical during periods of
wholesalers provide extensive training to The NAIC also has an ongoing review
disruption. Our best-in-class distribution
thousands of advisers about the range of of the C-1 bond factors in the required
team, our agility and success in launching
products and the investment strategies capital calculation. We believe that
well designed products, the continued
that are available to support their clients. Jackson is well positioned to manage
success of our risk management and
the impact of these regulatory changes.
In October 2018, Jackson announced hedge programmes through many
a new distribution relationship with Investment for growth economic cycles, and our effective
State Farm. In the second half of 2019, With trillions of dollars of adviser- technology platforms and award-winning
authorised State Farm agents will begin distributed assets across distribution customer service will provide Americans
offering a select group of Jackson’s platforms that have not historically been with the retirement strategies they so
variable annuity and fixed index a focus, such as the dually-registered desperately need.
annuity products. investment adviser channel, we believe
In February 2019, Jackson partnered with that a significant opportunity exists to
DPL Financial Partners (DPL) to provide reach even more American retirees and
our protected lifetime income solutions serve their needs with annuity products
to independent registered investment going forward. We continue to seek to
advisors (RIAs). The collaboration understand and make the necessary
expands Jackson’s distribution footprint adjustments to support the needs and
and provides Jackson with access to demands of American retirees into
new opportunities in the independent the future.
RIA channel. In September 2018, Jackson announced
a technology integration collaboration
Regulatory landscape
with Envestnet, allowing Jackson to offer
In 2016, the US Department of Labor
its complete product suite of advisory
(DoL) released a final version of its
annuities on the Envestnet Insurance
Fiduciary Duty Rule (Rules), which
Exchange. The collaboration brings
sought to eliminate conflicts of interest
together a leading provider of annuities
in investment advice. These Rules were Notes
in the US with the leading provider of 1 ©2019 Morningstar, Inc. All Rights Reserved.
rescinded in 2018. However, alternative
intelligent systems for wealth management The information contained herein: (1) is
proposals, such as the US Securities and proprietary to Morningstar and/or its content
and financial wellness. Jackson is working
Exchange Commission’s (SEC) best providers; (2) is not warranted to be accurate,
with Envestnet to make annuities easier complete, or timely. Neither Morningstar nor its
interest standard, remain pending.
to work with inside of a client’s portfolio. content providers are responsible for any
damages or losses arising from any use of this
Regardless of the outcome of the SEC Advisers will be able to create more value information. Past performance is no guarantee of
best interest standard, the regulatory for their clients by holistically considering future results. Morningstar
disruption caused by the now rescinded longevity risk, sequence of returns risk, www.AnnuityIntel.com Total Sales by Contract
3Q YTD 2018. Jackson’s Perspective II for base
DoL Rules has challenged the industry market risk and mortality risk within the states ranks #1 out of 973 VA contracts with
to review the ways in which investment Envestnet wealth management platform. reported sales to Morningstar’s quarterly sales
survey as of 3Q YTD 2018. Total sales by company
advice is provided to American investors.
The acquisition of John Hancock’s group and channel 3Q YTD 2018. Jackson ranks #1 out
Manufacturers will need to have the of 25 companies in the Independent NASD
payout annuity business in late 2018
ability to provide product and system channel, #1 out of 20 companies in the Bank
represents a reaffirmation of Jackson’s channel, #1 out of 16 companies in the Wirehouse
adaptations in order to support the
growth bolt-on strategy and continuing channel, and #4 out of 19 companies in the
success of various distribution partners Regional Firms channel.
commitment to deploy capital at attractive
in their delivery of retirement strategies 2 Independent research and Market Metrics,
return levels. This transaction further a Strategic Insight Business. US Advisor Metrics
that investors need. Because of its strong 2018, as of 30 September 2018.
www.prudential.co.uk Fact File 2019 Prudential plc 13M&GPrudential
2018 performance highlights
—— Total M&GPrudential operating profit up 19 per cent to £1.6 billion, including the effect of updated
longevity assumptions
—— Total assets under management of £321 billion1, including a rise in PruFund assets to £43 billion
from £36 billion last year
—— Major transformation programme already showing improvements in digital service for customers
—— Luxembourg SICAV fund range launched with £21 billion assets under management
M&GPrudential is the UK and Europe Customers in our markets demand distribution channels – all backed by
savings and investments business of easy access to savings and investment the same in-house investment expertise
Prudential plc. It was formed in 2017 solutions, as well as guidance and advice and capability.
through the merger of Prudential’s from trusted providers. In addition, low
Our customers fall into five broad
UK and Europe insurance operations rates of return on bank cash deposits are
categories:
with M&G Investments, Prudential’s fuelling demand for effective solutions,
international asset manager. whether clients are saving for retirement, —— UK retail advised customers who
building a lump sum or protecting their are saving for retirement or who want
In March 2018, the Board of Prudential plc
wealth from inflation. to draw down on their accumulated
announced its intention to demerge
savings. They typically invest in our
M&GPrudential. This will enable our In the institutional market, clients are
market-leading PruFund, which offers
leadership team to focus solely on what is increasingly seeking bespoke solutions
smoothed, long-term returns adjusted
important to our customers, give us direct from asset managers with diversified
for different risk tolerances;
control over our own capital and enable us investment capabilities and global reach.
to pursue growth opportunities without The combination of M&GPrudential’s —— UK retail advised and direct
competing for resources with other expertise in private assets, which are customers who invest for the long
Prudential plc businesses. much in demand in this sector, and our term through our range of M&G-
growing international network of offices branded mutual funds. This group
Understanding our markets means we are well placed to serve includes about 160,000 customers
M&GPrudential serves the world’s these clients. who invest directly with our fund
largest savings and investments markets, management business;
with a focus on UK and Europe. Across Customers
the region, as support from the state We serve a wide range of customers, —— Customers of our traditional insurance
diminishes and employers gradually who share the desire for professional business in the UK. These six million
retreat from guaranteed retirement help to build and protect their savings customers typically hold a Prudential
provisions, more and more people with confidence. Our approach is to offer annuity, which pays an income
need to make their own preparations a broad range of products and services, for life, or an insurance-wrapped
for retirement and other life goals. in a variety of formats, through multiple savings bond;
14 Prudential plc Fact File 2019 www.prudential.co.uk—— Wholesale clients in Europe and Asia, This breadth of our investment capability Distribution
including retail banks, private banks, underpins many of our customer At M&GPrudential, we have two
wealth managers, independent offerings. It reinforces the reliability of the outstanding complementary brands,
advisers and fund platforms. We returns from our £131 billion With-Profits which share a common philosophy of
manage £38 billion on behalf of these Fund, which is one of Europe’s largest aiming to deliver excellent long-term
clients’ own customers; and multi-asset portfolios for retail savers3. customer outcomes.
The With-Profits Fund has produced a
—— Pension funds and other institutional Currently, we choose to serve our
cumulative gross return of 129.5 per cent
clients, who invest on behalf of their customers’ needs through our many
over 10 years4 before tax and charges,
scheme members. We have nearly business-to-business relationships,
compared with a 121.4 per cent return
900 such relationships, including including thousands of independent
from the FTSE 100 index over the
70 per cent of the UK’s largest financial advisers, most of the high-street
same period, not allowing for any
pension schemes2. banks, wealth managers, institutional
management fees. A key component of
investment managers and pension funds.
In November, we made M&G’s range this performance is PruFund, which was
Two years ago, we established an adviser
of mutual funds available for the first time launched over 10 years ago and has since
platform in the UK to give the market
on the Prudential adviser platform and become the fastest-growing savings and
better access to PruFund, and we have
in January, we launched PruFolio, a new investment proposition across the
diversified the range of products on the
range of passive, active and smoothed Prudential Group.
platform to include M&G mutual funds.
return funds.
PruFund offers individuals different rates In 2018, it was among the fastest growing
For customers of our traditional insurance of smoothed return aligned with their platforms in the UK, reaching £13.3 billion
business, our modernisation programme tolerance for risk. In 2019, we aim to of assets under administration.
is improving service levels. Deployment enhance advisers’ access to PruFund by
Outside the UK, we distribute our
of new digital technology has reduced the significantly upgrading our digital services
investment products with the support of
time it takes to process a redemption from across a range of tax wrappers. Today,
our financial advisers, independent asset
a Prudential savings bond; and customers assets under management in PruFund top
managers, insurers and some of the world’s
can now register for our MyPru online £43 billion, after attracting £8.5 billion of
largest banks. Our international distribution
service in minutes. net inflows during 2018.
network spans 29 markets, with offices
During 2018, we transferred £21 billion The With-Profits Fund has acted as an recently opened in Australia and the US.
of our key European fund offerings incubator for other products, including Our new Luxembourg investment platform
into new Luxembourg-based SICAVs. a range of investment strategies based enables us to distribute our mutual funds
This positions us well to minimise any on private asset investments such as real more efficiently in Europe and beyond
potential disruption for our European estate, infrastructure assets and private by offering our investment strategies in
clients from the UK’s withdrawal from debt, and marketed to clients seeking this the SICAV format favoured by many of
the European Union, while also creating type of exposure. our clients.
a more flexible and robust platform for
During 2018, we continued to expand Our business modernisation programme is
international growth.
our range of mutual funds for retail well advanced and already showing service
investors. These included the innovative benefits for customers. Each day, we move
Our investment solutions
M&G Positive Impact Fund, which widens closer to our model of a simpler, lower-cost,
The core engine of our business is
access to impact investing for retail digital organisation.
a long-standing collaboration between
our fund managers and the strategic asset customers who want to invest in
M&GPrudential remains on track to
allocators who oversee the investment of companies that aim to have a positive
deliver the announced annual shareholder
the Prudential life funds. This enables us impact on society, and the M&G
cost savings of circa £145 million by 2022
to diversify our investment capabilities Sustainable Allocation Fund, a multi-
for a shareholder investment of circa
and to innovate by developing high- asset fund incorporating environmental,
£250 million.
quality products for all customers. social and governance factors. We also
launched an investment trust, M&G
Our investment capabilities span Credit Income Investment Trust, which Notes
the traditional public markets, from for the first time allows UK retail investors 1 Represents M&GPrudential asset management
external funds under management and internal
cash through fixed income and on to to put their money into a combined funds included on the M&GPrudential long-term
international equities. We also have portfolio of public and private debt; and insurance business balance sheet.
a large range of private asset capabilities, the M&G Impact Financing Fund, which 2 Based on the UK’s Top 50 Pension Schemes by size,
S&P Money Market Directory, June 2018.
with £59 billion of assets under was awarded Best New Entrant (Fund) 3 M&GPrudential analysis comparing our largest
management, covering real estate, at the Sustainable and ESG Investment with-profits fund with other European mixed asset
private debt, corporate loans and Awards 2018. funds with data from Financial Express.
4 Performance data for Prudential with-profits fund
infrastructure investments such as excludes hypothecated asset pools of Optimum
broadband and solar energy. Bonus fund and Risk-Managed PruFunds. Returns
are shown before charges.
www.prudential.co.uk Fact File 2019 Prudential plc 15Our communities
2018 highlights
—— £27.3 million total community investment
—— 117,491 hours volunteered by employees across the Prudential Group
—— £479,633 donated by employees through payroll giving across the Group
We want to create a positive legacy from Social inclusion Enhancing later life
all our business activities. We aim to Commitment to social inclusion in the M&GPrudential partnered with Royal
provide value to our customers through UK through Prudential RideLondon Voluntary Service (RVS) in 2018 to deliver
the products we deliver and to our Prudential RideLondon is a mass- the First Time for Everything programme,
shareholders through our positive participation and charity fundraising event. which aims to tackle loneliness and social
financial performance. At the same time In 2018, it raised more than £13 million for isolation by encouraging 2,700 older
we recognise the importance of providing charity, setting a European record for a people across the UK to stay active,
benefits to all our stakeholders, whether cycling event and beating the previous engaged and connected to their
through our community investment year’s record of £12.75 million. There communities. M&GPrudential also
programmes, our environmental impact, was also a sharp rise in the number of launched the ‘Bring People Together’
our engagement and talent development participants riding for charity at 55 per cent campaign with RVS, which seeks to
with our colleagues or our approach to (2017: 44 per cent); and more than 900 encourage and empower more people to
responsible investment. charities benefited from the event. volunteer, particularly those aged 50 to 65.
The campaign aims to inspire people to
Our community investment strategy is Prudential has sponsored Prudential
start their own activities or clubs for older
closely aligned with our business purpose RideLondon since its inception in 2013.
people with the backing of RVS. From social
and with our stakeholders’ concerns and Our community engagement partnership,
activities and hobby classes to running a
interests, focusing on four principal themes: PruGOals, helps young people to achieve
lunch club or providing companionship to
their goals regardless of social or economic
—— Social inclusion; older people in their homes, we want to
background by providing aspirational
—— Education and life skills; encourage pre-retirees to put their talents
challenges, culminating in riding the
—— Disaster preparedness; and and life experience to valuable use by
Prudential RideLondon-Surrey 46. In 2018,
—— Employee engagement. becoming volunteer coordinators. The
PruGOals supported 420 16 to 18 year-olds
programme aims to support the creation of
We establish long-term relationships with from 41 schools across the UK to improve
150 new groups and recruit 500 volunteer
our charity partners to ensure that the their self-esteem, aspiration and educational
coordinators to lead them.
projects we support are sustainable, and outcomes. Post-event evaluation from the
we work closely with them to ensure that charity Teach First revealed that students’ Prudential has also continued to fund the
our programmes continuously improve. ‘resilience’ and ‘determination’ rose by Later Life Links programme with Age UK,
a third after completing the programme. providing long-term companionship,
16 Prudential plc Fact File 2019 www.prudential.co.ukYou can also read
