Prudential H1 new business profit rises 12% to US$1.26 billion; Singapore second-largest contributor to growth

[SINGAPORE] Prudential on Wednesday (Aug 27) announced that its new business profit – a measure of profitability for insurance businesses – rose to US$1.26 billion for its first half ended Jun 30.

This marked a 12 per cent increase from US$1.12 billion in the year-ago period, on an actual and constant exchange rate basis.

The Hong Kong-headquartered insurer said out of its 19 life insurance markets, 13 recorded growth for new business profit during the six months.

By region, Singapore delivered new business profit growth of 5 per cent. 

Anil Wadhwani, chief executive of Prudential, told The Business Times at a results briefing that Singapore was the second-largest contributor to its new business profit mix. 

He noted that the insurer’s Singapore business grew 10 per cent in the first quarter of 2025. However, market volatility affected its investment-linked offering, a significant part of its operations in the market.

Prudential responded “quickly” within the quarter by launching new products specifically focused on health and protection, as well as high net worth. 

Momentum picked up towards the end of Q2, said Wadhwani, “with the quality of our franchise and the brand that we have in Singapore, combined with the channel mix around strong agency and strong bank partnerships that we formed with Standard Chartered and UOB”.

He expressed optimism that Singapore would continue to deliver robust results, with the pace expected to build in the second half of the year.

On the impact of rising medical inflation and healthcare costs, he said the insurer had effectively addressed both regulatory changes and inflationary pressures, facilitated by its early focus on building a health vertical. 

For example, it has been “very disciplined around medical repricing” across its four primary markets, which are Singapore, Hong Kong, Malaysia and Indonesia. 

The CEO also noted that Prudential is focused on reducing fraud, waste and abuse while using its scale to manage claims costs.

“This is where a private insurer like Prudential can add distinct value to customers”, by helping them think through the escalation in healthcare costs, he said.

New business profit also rose for Prudential’s Hong Kong, Indonesia and mainland China markets, but declined for Malaysia.

The declines for Malaysia were driven by lower agency sales, with medical repricing and regulatory intervention affecting agent sentiment across the market.

Double-digit growth

Wadhwani noted that the insurer delivered double-digit growth across its key financial metrics, consistent with its guidance earlier in the year.

He said the company’s confidence in keeping up its momentum in H2 is “largely on account of the measures that we are putting in force, including a focus on writing high-quality new business, managing (existing insurance policies and their) effectiveness, as well as narrowing our operating variances”.

“This… firmly puts us on track to our 2027 objectives,” he added.

This growth came amid a 5 per cent increase in annual premium equivalent (APE) sales – a gauge of insurance sales – and margin expansion.

Net profit for H1 stood at US$1.36 billion, compared with US$182 million in the previous corresponding period.

Earnings per share (EPS) stood at US$0.492, up from an EPS of US$0.044 in H1 2024.

It posted an interim dividend of US$0.0771 per share, a 13 per cent increase from the prior year’s US$0.0684 per share on an actual exchange rate basis.

The payment date is Oct 16 for Hong Kong and the UK, and Oct 23 for Singapore, after the record date of Sep 5.

For the half-year, adjusted operating profit before tax stood at US$1.64 billion, 6 per cent higher than the year-ago period’s US$1.54 billion on an actual and constant exchange rate basis.

APE sales for the half-year stood at US$3.29 billion, a 6 per cent year-on-year increase from US$3.11 billion on an actual exchange rate basis.

In terms of capital management, Prudential said that its capital position remains strong, with an estimated shareholder surplus above the prescribed capital requirement of US$16.2 billion as at Jun 30, and a cover ratio of 267 per cent.

Given Prudential’s strong capital position, Wadhwani said: “We have reached the inflection point in our capital generation, enabling us to update our capital management programme and increase shareholder returns.”

Prudential said it expects to increase its total ordinary dividend per share by more than 10 per cent for 2025, 2026 and 2027.

Additionally, it aims to return additional capital to shareholders, with a US$500 million share buyback in 2026 and a US$600 million share buyback in 2027.

Prudential has dual primary listings on the London Stock Exchange and Hong Kong Stock Exchange. It has a secondary listing on the Singapore Exchange, and is listed on the New York Stock Exchange in the form of American depositary receipts.

In Singapore, shares of Prudential ended Wednesday flat at US$9.91.