Prudential posts solid profit growth despite China challenges

In 2024, Prudential, a leading insurer focusing on the Asian markets, achieved an 11% increase in new business profit, amounting to 3.08 billion US dollars. This uptick was driven primarily by strong performance in key markets such as Hong Kong, Indonesia, and Singapore. The company’s adjusted operating profit before tax also saw an 8% growth year-on-year, reaching 3.13 billion US dollars. The region's economic environment contributed to significant opportunities in long-term savings and protection products, as insurance penetration rates remain low. Despite these positive results, Prudential's overall growth slowed compared to the previous year, which saw a remarkable 45% profit increase. This deceleration was notable mostly due to challenges faced in the mainland Chinese market, where new business profits halved to 111 million dollars. George Wadhwani, Prudential's chief executive, attributed these challenges to the macroeconomic conditions and reduced long-dated government bond yields affecting the life insurance industry in China. The reassertion of long-term growth trends in the Asian and African markets has served to bolster the company’s outlook amidst these obstacles. Looking towards the future, Prudential maintains a confident stance on its growth trajectory. The company has projected a strong 10% growth in underlying operating profits for 2025, aligning with the same growth figure recorded in 2024. The removal of Covid-19 restrictions in Hong Kong has greatly aided recovery, allowing for a resurgence of demand for insurance and wealth management products. However, Prudential's management acknowledges the global landscape's geopolitical tensions, particularly between the West and China, which could influence market conditions negatively. Richard Hunter from Interactive Investor emphasized that while Prudential appears to be gearing up for significant strides, the external economic climate warrants cautious oversight moving forward.