Prudential Plc Q2 FY2024 earnings call

• Strategic execution: Executed the strategy over the past year, with new business profit growth, operating profit growth, and capital return measures like a $2 billion buyback program and a 9% increase in the first interim dividend for 2024.
• Agency channel: PRUForce platform has great adoption rates, PRUVenture supports quality recruitment with 10% of rookie recruits coming through it contributing 40% of APE from new recruits, and PRULeads enhances agency performance with 2 million leads passed through and 8% conversion.
• Bank assurance: Continues to deliver consistent growth, with a 15% growth in health and protection new business profits, and a partnership with CIMB in Thailand showing promising results. Plans to better integrate into bank assurance partnership platforms and expand agreements across ASEAN.
• Health business: Implemented a new operating model, launched new propositions, undertook disciplinary pricing and cost management strategies, with claims-based pricing and regular repricing discipline in key health markets.
• Technology: Modernizing technology infrastructure, scaling AI with around 100 use cases, and expanding partnership with Google Cloud to create Prudential's AI Lab.
• People and culture: Made 33 strategic appointments to strengthen the leadership team, including a new Chief Agency Officer, contributing to the target of 40% representation of women in the Group Leadership Team by the end of 2026.

Prudential's first half 2024 new business profit grew by 8%, excluding economic effects to 1.5 billion. Bank assurance new business profit increased by 28%. Operating profits grew by 9%. In terms of market performance, Hong Kong saw new business profit growth of 9% ex-economics. Mainland China's CPL new business profit contracted 2% ex-economics, but bank assurance momentum improved. Malaysia's new business profit was stable, while Indonesia's new business profits reduced 18% impacted by regulatory changes and repricing actions. The revenue contribution of different segments is reflected in the growth of new business profit across health, protection, savings, bank assurance, etc.

• Expect new business profits for the full year 2024 to grow at a rate consistent with the trajectory needed to meet the 2022 to 2027 new business profit growth objective.
• Confident in achieving 2027 strategic and financial objectives. From the first quarter 2025 update, will shift to a traditional embedded value (TEV) basis for embedded value reporting.
• Second half of 2024 supported by 6% growth in APE in the first half of 2024 on top of 37% in 2023, sales momentum in June, and broad-based and diversified momentum across markets and channels.

• Regulatory changes: Repositioning business in China to anticipate regulatory and macroeconomic changes.
• Medical inflation: Impacting the health business, requiring disciplinary pricing and cost management strategies.
• Market fluctuations: Interest rate changes affecting embedded value and financial results.
• Macro-economic effects: Impacting sales in certain markets like Hong Kong and Mainland China with high base effects.

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