Prudential: Insurance giant vows to stay listed on London stock exchange after posting uptick in profits on pivot to Asia

Prudential today confirmed it intends to remain listed in the City following speculation the 175-year-old insurer had plans to switch the the London Stock Exchange for New York.

A spokesperson for the insurance giant today confirmed to City PM the firm has “no plans” to exit the London Stock Exchange.

It comes after Prudential today hiked its dividend after posting an uptick in its operating profits following its first full year as an Asia and Africa focused insurance business.

The insurer, which was first set up in London in 1848 but has now moved its entire management team to Hong Kong, said it had benefited from the easing of COVID restrictions in China and other its major Asian markets as it posted an eight per cent uptick in its operating profits to $3.75bn (£3.09bn).

The dual Hong Kong and London listed company in turn upped its dividend by nine per cent, to 18.78c for the full year 2022 as it outstripped analysts forecasts in bolstering its income by 7.5 per cent,

The uptick in Prudential’s incomes, to $7.4bn, was primarily driven by a 15 per cent increase in revenues the firm’s insurance business, which generated $3.4bn over 2022.

Prudential chief executive Anil Wadhwani said the insurer had “delivered a resilient performance against a backdrop of Covid-19 related disruption and broader macroeconomic volatility.” 

In pivoting to Asia and Africa, Prudential is hoping to fill a gap in the market and capitalise on a major demographic boom that is set to see Africa’s population double to 2bn by 2050, and see the middle class populations of the two continents grow to 1.5bn people by 2030.

Prudential, in turn, hopes to capitalise on a widening health insurance gap worth $1.8trn due to low levels of insurance penetration in both Asia and Africa.

Prudential business experienced growth in all major markets apart from Indonesia, in which the insurer’s business suffered from an uptick in medical claims following the lifting of the country’s COVID restrictions. 

The insurer’s sales were, however, bolstered by the easing of restrictions in its other major markets in Asia, including China, India, Japan, South Korea, and Taiwan.

In particular, the opening of the border between mainland China and Hong Kong, saw significant numbers of Chinese customers cross the boundary to purchase Prudential’s products, due to the great range on offer in the former British territory.

“The removal of the bulk of Covid-19-related restrictions across the region and the progressive opening up of the Chinese Mainland economy has meant that 2023 has started well with encouraging progress in year-on-year sales,” company chief Wadhwani said.

The Prudential chief noted that sales also increased sharply in the first two months of 2023, due to an uptick in demand for savings products provided by its Hong Kong business following the reopening of its border with China.

Richard Hunter, head of markets at interactive investor, said: “Now fully focused on Asia and Africa, Prudential has been boosted by the recent reopening in China, allowing business to resume its growth trajectory.”

“The insurance and health protection markets within Prudential’s target geographies provide a rich seam of opportunities alongside increasingly wealthy populations with evolving financial needs,” Hunter said.

Hargreaves Lansdown’s head equity analyst, Sophie Lund-Yates, noted investor’s fears about Prudential’s exposure to Silicon Valley Bank had contributed the insurer’s share price falling sharply this morning, despite its “minimal $1m exposure” to the collapsed bank.

At the time of writing, shares in Prudential are down 11.37 per cent.