Prudential has reported a dip in new business during the first half of the year but maintains confidence in achieving its annual targets.
The Asia-focused insurance giant noted that its new business profita crucial indicator of future profitabilitydeclined to $1.5bn (£1.1bn), marking a one per cent decrease from the previous year after adjusting for exchange rate fluctuations.
However, when stripping out the impact of interest rates and other economic factors, the company saw a six per cent increase in new business profit. Additionally, Prudential's adjusted operating profit experienced a nine per cent rise from last year, reaching $1.5bn.
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The insurer observed a three per cent reduction in new business profit in Hong Kong compared to the previous year, which had seen robust growth post-pandemic.
In China, a combination of regulatory changes and the ongoing economic slowdown led to a significant drop in sales, resulting in a 33 per cent fall in new business profit, compared to a 21 per cent decline last year, as reported by .
Despite last year's strong performance due to high demand following the pandemic, making this year's figures appear weaker by comparison, Prudential has experienced a "pick up in sales momentum" since June, which has persisted into the second half of the year.
The company anticipates new business profit growth to align with its 2022-2027 objectives by 2024.
Furthermore, Prudential has declared a first interim dividend of 6.84 cents (5.2p) per share, which is an increase of nine per cent over the same period last year.
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Prudential's chief, Anil Wadhwani, conveyed confidence in the company's prospects, asserting: "We entered this year with a clear strategy and a set of outcomes we are confident in achieving by 2027, namely a compounded annual growth rate for new business profit of 15 to 20 per cent and double-digit for cash generation, both measured from a 2022 base,".
The insurer maintains its optimism regarding meeting these objectives, attributing this confidence to the current economic evolution within its primary market sectors.
"The structural drivers of growth in Asia and Africa for our industry remain intact, with ongoing strong demand in respect of protection, long-term savings and retirement propositions as broader based economic growth returns to our markets," the company expressed.
Commentary from Panmure Liberum's analysts emphasised a positive outlook: "the long-term growth drivers across Asia and Pru's ability to execute them remain intact".
Conversely, Susannah Streeter, the head of money and markets at Hargreaves Lansdown, flagged potential setbacks, cautioning that "continuing Chinese economic headwinds are clearly a drag on its efforts to claw in more profitable business".
Investor reactions were mixed with Prudential's shares concluding the day down 2.4 per cent in Hong Kong, while the London stock has seen a drop of 22 per cent in the 2024 trading period so far.