PRUDENTIAL posted what it described as a "resilient" 5 per cent drop in first-quarter sales yesterday, as it also disclosed a beefed-up capital surplus in the first three months of 2009.
The Pru revealed that its capital cushion against any worsening of recession-hit insurance markets and corporate bond defaults was £2 billion at end-March, against £1.7bn three months earlier. On the completion of the sale of its Taiwanese operations
, that financial buffer will swell to £2.8bn, the company repeated yesterday.
The group, one of Britain's biggest insurers and fund managers, announced total sales of £697 million – well ahead of a City consensus expectation of £647m. However, UK sales were down 6 per cent to £180m and the Pru's Asian arm, for a long time a star turn, saw sales sli p 11 per cent to £333m.
Mark Tucker, the Pru's chief executive – who recently announced he is retiring later this year – said the company's strategy was not to specifically target increases in sales volumes in the "exceptional global conditions".
Tucker said the quarter's figures were being compared against an "exceptionally strong quarter" in the first quarter of 2008 when there were "one-off sales opportunities" in some Asian markets.
"Overall, comparing Q4 2008 with Q1 2009, sales volumes were broadly stable," he added.
Fund management business M&G saw net inflows of £2.5bn, a rise of 356 per cent, as savers sought a safe home for their money. The Pru's US arm also did better, with sales ahead 12 per cent at £184m.
Some City analysts said that the company's focus on holding capital rather than chasing sales might discourage some investors from buying the shares.
But the Pru's chief executive-designate, Tidjane Thiam, who takes over in September from Tucker, disagreed. Thiam – who will be the first black chief executive of a FTSE 100 company – said: "I feel it's a good time to buy them (Pru shares].
"Our value is in our long-term potential which is not reflected in current prices."
Yesterday, the Pru's shares closed up 6.59 per cent, or 27p, at 436.50p.
The full article contains 362 words and appears in The Scotsman newspaper.
