China’s zero-Covid policy hits Prudential’s business
London insurance company Prudential today said it had suffered steep losses from its Hong Kong business due to China’s zero-Covid policy.
The Asian focused insurer said profits from underwriting new policies fell 31 per cent in Hong Kong and four per cent in Mainland China.
Covid restrictions in Prudential’s other cornerstone markets – Indonesia, Malaysia, and Singapore – also hit the insurer’s profits, as new business profits fell across all five markets apart from Singapore.
The drop in new sales in Prudential’s main markets was however partially offset by an uptick in new business in the insurer’s growth markets, as profits increased 18 per cent across its business in Taiwan, India, Vietnam, and Africa.
The situation saw Prudential’s actual adjusted operating profits drop six per cent to $1.6bn (£1.32bn) after its new business profits fell seven per cent to $1.1bn.
The British insurance company’s life and asset management profits rose despite the challenges of Covid in its markets which contributed to the volatility.
It announced the first interim dividend of the year at 5.74 cents (4.5p) and looks to cut head office costs by $70m (£58m) at the start of 2023.
“Our resilient operational performance demonstrates the strength of our well positioned and well diversified franchise across the Asia region, driven by our multi-channel, digitally enhanced distribution platform,” said CEO Mark FitzPatrick, highlighting the company’s performance in its Asian markets.
“We expect that operating conditions may continue to be challenging. We remain confident that Prudential has the financial resilience, capital strength and capability to meet the growing health and savings needs of our customers in Asia and Africa.”