Prudential posts 25% profit rise on strong Asian growth

by Gill Montia

Story link: Prudential posts 25% profit rise on strong Asian growth

Prudential has recorded a 25% rise in full-year operating profit, to £2.5 billion (£2.1 billion) for 2007.

The insurer’s sales in Asia expanded rapidly last year, accounting for more than half of all new business.

During the year, total new business rose 22% to £1.2 billion. New business profit in Asia rose 34% to £653 million; in the UK the rise was just 4%, to £277 million.

Mark Tucker, the group’s chief executive, sees the overall prospects for 2008 as positive, while admitting that volatility in global markets could result in a “period of less attractive economic growth trends in the US and in the UK than we have seen in recent years.”

In the UK, the company will retain its focus on the retirement and near-retirement population, which it believes will be the fastest growing sector of the insurance market over the next 10 years.

In announcing the results, Mr Tucker took the opportunity of expressing his disappointment at the Government’s decision not to change the taxation of investment bonds.

These will remain taxed at up to 40%, meaning that the new Capital Gains Tax rate of 18% could make them less attractive to investors than unit trusts.