Prudential: FTSE 100 insurer pledges $5bn in shareholder returns
FTSE 100 insurer Prudential said it had reached its “inflection point” on Wednesday after growing profit and kicking off a hefty program of returns of investors.
The firm recorded a six per cent increase in adjusted operating profit before tax to $1.6bn (£1.2bn). Life weighted premium income, which indicates the volume of new business, increased nine per cent to $13.7bn.
Shares in Prudential were open over one per cent to 985.80 as markets opened.
The group also laid out plans to return $5bn to shareholders by 2027 through its existing $2bn share buyback program and dividend growth of more than 10 per cent.
Prudential announced buybacks of $500m and $600m for 2026 and 2027.
Anil Wadhwani, chief executive of Prudential, said: “We have reached the inflection point in our capital generation, enabling us to update our capital management programme and increase shareholder returns, which validates our business model and its ability to generate sustainable cash returns.”
Matt Britzman, senior equity analyst at Hargreaves Lansdown, said: “Prudential had a decent first half, with solid growth in new business and cash generation across its core markets. Profits improved, helped by strong performances in Hong Kong and Indonesia, and the company raised its dividend while continuing share buybacks.”
Prudential mulls IPO for asset manager
The insurer also expects to return initial net proceeds from an IPO of its asset management company, in partnership with ICICI Bank.
Prudental referenced a listing of ICICI Prudential Asset Management Company, but did not make clear how much it would generate for shareholder returns.
UBS analysts estimated earlier this year IPAMC could be valued at around $3.5bn, or around 15 per cent of Prudential’s market cap. The arm accounts for around five per cent of the group’s earnings.
Elsewhere, the group honed in on a strategic pivot to health and protection products. The divisions help drive higher growth in annual premium equivalent (APE) sales. APE is the standardised measure of new business sales in the insurance industry.
Prudential also highlighted its “ongoing operational transformation” through heavy investment in technology and its digital servicing platform – “PRUservices”.
Wadhwani added: “Reflecting our strategic progress and investments in the growth drivers of the business, we are confident we will carry this momentum into the second half and beyond, keeping us firmly on track to achieve our 2027 financial objectives.”