Prudential's sales fall to build up capital

PRUDENTIAL announced a 9 per cent drop in worldwide sales yesterday after a weak domestic performance overshadowed the insurer's third-quarter results.

The figures – the first for new chief executive Tidjane Thiam – revealed a 22 per cent fall in UK revenues, to £157 million, as the firm concentrated on value over volume and building up its capital buffer. But the fall in sales to £700m on an annual premium equivalent basis was lower than feared, thanks to a marked recovery in Asia and a record result in the United States.

The Pru said it saw three-quarters of sales come from outside the UK for the first time in its history after a 66 per cent surge in revenues from the US, where it owns the Jackson National Life insurer, and a 4 per cent rise in Asia business.

It benefited from a "once-in-the-cycle event" as many US competitors withdrew from writing new business to preserve capital buffers.

The group said its capital surplus had increased further to £2.8 billion, having almost entirely withdrawn from wholesale – or bulk – sales.

This move, which saw wholesale sales plunge 99 per cent, also acted as a drag on worldwide figures.