Blueprint
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the month of November, 2016
PRUDENTIAL PUBLIC LIMITED COMPANY
(Translation of registrant's name into English)
LAURENCE POUNTNEY HILL,
LONDON, EC4R 0HH, ENGLAND
(Address
of principal executive offices)
Indicate
by check mark whether the registrant files or will file annual
reports
under
cover Form 20-F or Form 40-F.
Form
20-F X
Form 40-F
Indicate
by check mark whether the registrant by furnishing the
information
contained
in this Form is also thereby furnishing the information to
the
Commission
pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934.
Yes
No X
If
"Yes" is marked, indicate below the file number assigned to the
registrant
in connection with Rule 12g3-2(b): 82-
16
November 2016
Investor conference, business performance and dividend
policy
Prudential is hosting a conference for investors and analysts on 16
November 2016 at the Langham Hotel, London. The event will start at
8.30am UK time, with presentations from management covering the
Group and our businesses in Asia, the US and the UK.
Mike Wells, Group Chief Executive, said: "In today's Investor
Conference, our management teams will provide you with detailed
updates on the operational progress of each of our businesses and
highlight the distinctive capabilities that underpin the
sustainable profitable growth prospects of the Group."
Business performance update
The Group continues to benefit from the favourable structural
opportunities in its key markets and its well established
leadership positions. During the current period of heightened
macro-economic and other external uncertainties, our performance is
well supported by the diversification of our international
operations, our focus on high-quality sources of income and our
broad currency mix. The new business trends experienced in the
first half of the year have continued in the third quarter of 2016,
driven by Asia and selective participation in the US and the UK.
Group new business profit totalled £1,970 million for the
first nine months, with APE sales of £4,550
million.
In Asia, our performance remains underpinned by positive
long-term demographic trends and the effectiveness of our execution
across our diverse regional platform. In the first nine months,
life APE sales increased by 16 per cent (25 per cent on an actual
exchange rate basis), driven by our continued focus on regular
premium sales, which were up 18 per cent and represented 94 per
cent of the total. New business profit was 23 per cent higher (34
per cent on an actual exchange rate basis), reflecting volume
growth and specific management actions to drive value, supported by
increased contributions from health and protection, where new
business profit was up 27 per cent in the
period.
In asset management, Eastspring's total funds under management were £115.3
billion at 30 September 2016, compared to £89.1
billion1
at the start of the year, with
year-to-date external net flows turning positive at the end of the
third quarter.
On 10 November 2016, we announced that the Group has reached an
agreement to sell 100 per cent of its Korean life business to Mirae
Asset Life Insurance Co., Ltd. for KRW170 billion (equivalent to
£119 million2),
subject to regulatory approval. The proposed sale is consistent
with Prudential's strategy of allocating its capital to markets
where it is well positioned to generate attractive long-term
returns for its shareholders.
In a period in which distributors are still adjusting to the
Department of Labor standards,
Jackson remains focused on the
delivery of superior financial solutions and account performance
for our customers. As a result, Jackson continues to experience
overall positive separate account net flows, totalling $4.6 billion
for the first nine months despite variable annuity new premium
levels 28 per cent lower, consistent with the trend observed in the
first half of the year. Together with market appreciation, net
inflows contributed to an 8 per cent year-to-date increase in
separate account assets to $145.6 billion as at 30 September
2016.
Our UK
life business has extended its
successful new business performance of the first half of the year,
driven by the continued popularity of its with-profits product
range. In the first nine months of the year, new business profit
from retail sales was 41 per cent higher, with APE sales from
customers choosing our PruFund retail investment option increasing
by 65 per cent. As a result, PruFund assets under management rose
to £22.8 billion, 38 per cent higher than at the start of the
year.
In the third quarter, M&G's retail asset management business has benefitted
from the positive effects of market appreciation and a reduction in
the level of net outflows, totalling £1.1 billion (1Q 2016:
£4.1 billion net outflows, 2Q 2016: £2.0 billion net
outflows). External assets under management were £136.2
billion at 30 September 2016, compared to £126.4 billion at
the end of 2015.
The estimated Group shareholder Solvency II surplus
at 31 October 2016 was £11.5
billion, equivalent to a capital ratio of 189 per cent (30 June
2016: £9.1 billion, equivalent to a capital ratio of 175 per
cent).
Dividend policy
The Group also announces the following dividend policy
update.
The Board will maintain its focus on delivering a growing ordinary
dividend. In line with this policy, Prudential aims to grow the
ordinary dividend by 5 per cent per annum. The potential for
additional distributions will continue to be determined after
taking into account the Group's financial flexibility across a
broad range of financial metrics and our assessment of
opportunities to generate attractive returns by investing in
specific areas of the business.
1 As
reported.
2 KRW/GBP exchange
rate of 1,433 at 9 November 2016 used (Source: Bloomberg). The
consideration is denominated in KRW.
Enquiries:
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Media
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Investors/Analysts
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Jonathan Oliver
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+44 (0)20 7548 3537
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Raghu Hariharan
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+44 (0)20 7548 2871
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Tom Willetts
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+44 (0)20 7548 2776
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Richard Gradidge
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+44 (0)20 7548 3860
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William Elderkin
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+44 (0)20 3480 5590
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Notes to Editors:
Investor conference
Today's investor conference is available to view via live webcast
from [8.30]am UK time and the presentation materials can also be
viewed on the Group website from the same time. To register for the
webcast please follow the link below or visit the Group website at
www.prudential.co.uk.
Link to webcast:
http://www.investis-live.com/prudential/580493d9f908861c0010b5b7/jdjg
Agenda
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Time (UK time)
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Topic
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Speaker
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08.30 - 08.50
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Introduction and Group overview
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Mike Wells
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08.50 - 09.10
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Group financial update
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Nic Nicandrou
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09.10 - 10.30
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Asia
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Tony Wilkey
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10.50 - 12.00
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US overview
US distribution and DOL
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Barry Stowe
Alison Reed, Drew Bowden, Seth Harris
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13.00 - 14.45
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US financials, capital and ALM
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Chad Myers
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15.05 - 16.45
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UK
M&G
UK Life
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Anne Richards
John Foley, John Warburton
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16.45 - 17.45
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Final Q&A
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2017 financial calendar
2016 full-year results: 14 March 2017
2017 half-year results: 10 August 2017
New
business performance Q3 year to date
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|
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Actual Exchange Rate
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Constant
Exchange Rate
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Q3 2016 £m
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Q3 2015 £m
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Change %
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Q3 2015 £m
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Change %
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|
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APE Sales
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New Business Profit
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APE Sales
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New Business Profit
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APE Sales
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New Business Profit
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APE Sales
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New Business Profit
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APE Sales
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New Business Profit
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Asia
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2,531
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1,306
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2,021
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976
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25
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34
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2,183
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1,061
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16
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23
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US
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1,148
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485
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1,278
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557
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(10)
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(13)
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1,407
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613
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(18)
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(21)
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UK retail1
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871
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179
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613
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127
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42
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41
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613
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127
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42
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41
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Total Group1
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4,550
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1,970
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3,912
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1,660
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16
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19
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4,203
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1,801
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8
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9
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1 Excluding UK bulk
annuities as Prudential has withdrawn from this market. In the
first nine months of 2015 UK bulk annuities contributed APE sales
of £149 million and new business profit of £104
million.
Basis of Preparation
Period-on-period percentage increases are stated on a constant
exchange rate basis unless otherwise stated. All amounts are
comparable to the nine months ended 30 September 2015 unless
otherwise indicated.
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Average Rate *
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Closing
Rate
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Local Currency: £
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Q3 2016
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Q3 2015
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% Change**
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Q3 2016
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Q3 2015
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% Change**
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Hong Kong
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10.81
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11.88
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10%
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10.08
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11.74
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16%
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Indonesia
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18,547.39
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20,340.23
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10%
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16,953.25
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22,191.09
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31%
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Malaysia
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5.69
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5.80
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2%
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5.37
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6.66
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24%
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Singapore
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1.91
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2.09
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9%
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1.77
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2.15
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21%
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US
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1.39
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1.53
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10%
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1.30
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1.51
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16%
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*Average
rate is for the 9 month period to 30 September.
**Change
represents the appreciation (depreciation) of local currency
against GBP.
The valuation of EEV new business profit for the first nine months
of 2016 represents post-tax profit determined under the methodology
as set out in our 2016 Half Year Financial Report. The non-economic
assumptions applied are consistent with those at 30 June 2016 other
than for the reduction in the UK corporation tax rate to 17 per
cent effective from 1 April 2020, for which the impact on new
business profit is not material.
The key
economic assumptions are as follows:
|
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Risk
discount rate %
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Government bond yield %
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30
Sep 2016
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30
Sep 2015
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30 Sep 2016
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30
Sep 2015
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Asia operations:
1
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|
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Hong
Kong2
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3.1
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3.5
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1.6
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2.1
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Indonesia
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11.1
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13.6
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7.2
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9.8
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Malaysia
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6.0
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6.6
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3.6
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4.2
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Singapore
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3.4
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4.3
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1.8
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2.6
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US operations:
Variable Annuity1,3
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6.1
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6.7
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1.6
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2.1
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UK operations:
4,5
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4.3
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5.6
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1.3
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2.2
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1 For
Asia and US operations the risk-free rates shown are 10-year
government bond yields. For UK operations 15 year gilt rates are
shown.
2 For
Hong Kong the assumptions shown are for US dollar-denominated
business. For other territories, the assumptions are for local
currency-denominated business.
3 For
US operations the pre-tax expected long-term nominal rate of return
for US equities was 5.6 per cent at 30 September 2016 and 6.1 per
cent at 30 September 2015.
4 For
UK business, following the implementation of Solvency II on 1
January, the risk-free rate is based on a yield curve. At 30
September 2016 a single risk discount rate based on the yield curve
is shown. At 30 September 2015, the
risk-free rate and discount rates were based on a flat 15-year gilt
rate at the end of the period.
5 Mostly
relates to with-profits business.
The Solvency II estimate at 31 October 2016 has been prepared on a
consistent basis with that set out in the 2016 Half Year Financial
Report under 'Additional Financial Information' Section II c),
which should be read in conjunction with the 'Risk Factors' also
set out in the 2016 Half Year Financial Report.
About Prudential plc
Prudential
plc, which is incorporated in England and Wales, and its affiliated
companies constitute one of the world's leading financial services
groups, serving around 24 million insurance customers. It has
£562 billion of assets under management (as at 30 June 2016).
Prudential plc is listed on stock exchanges in London, Hong Kong,
Singapore and New York. Prudential plc is not affiliated in any
manner with Prudential Financial, Inc., a company whose principal
place of business is in the United States of America.
Forward-Looking Statements
This
document may contain 'forward-looking statements' with respect to
certain of Prudential's plans and its goals and expectations
relating to its future financial condition, performance, results,
strategy and objectives. Statements that are not historical facts,
including statements about Prudential's beliefs and expectations
and including, without limitation, statements containing the words
'may', 'will', 'should', 'continue', 'aims', 'estimates',
'projects', 'believes', 'intends', 'expects', 'plans', 'seeks' and
'anticipates', and words of similar meaning, are forward-looking
statements. These statements are based on plans, estimates and
projections as at the time they are made, and therefore undue
reliance should not be placed on them. By their nature, all
forward-looking statements involve risk and uncertainty. A number
of important factors could cause Prudential's actual future
financial condition or performance or other indicated results to
differ materially from those indicated in any forward-looking
statement. Such factors include, but are not limited to, future
market conditions, including fluctuations in interest rates and
exchange rates; the potential for a sustained low-interest rate
environment, and the performance of financial markets generally;
the policies and actions of regulatory authorities, including, for
example, new government initiatives; the political, legal and
economic effects of the UK's vote to leave the European Union; the
impact of continuing designation as a Global Systemically Important
Insurer or 'G-SII'; the impact of competition, economic
uncertainty, inflation and deflation; the effect on Prudential's
business and results from, in particular, mortality and morbidity
trends, lapse rates and policy renewal rates; the timing, impact
and other uncertainties of future acquisitions or combinations
within relevant industries; the impact of changes in capital,
solvency standards, accounting standards or relevant regulatory
frameworks, and tax and other legislation and regulations in the
jurisdictions in which Prudential and its affiliates operate; and
the impact of legal actions and disputes. These and other important
factors may, for example, result in changes to assumptions used for
determining results of operations or re-estimations of reserves for
future policy benefits. Further discussion of these and other
important factors that could cause Prudential's actual future
financial condition or performance or other indicated results to
differ, possibly materially, from those anticipated in Prudential's
forward-looking statements can be found under the 'Risk Factors'
heading in its most recent Annual Report and the 'Risk Factors'
heading of Prudential's most recent annual report on Form 20-F
filed with the U.S. Securities and Exchange Commission, as well as
under the 'Risk Factors' heading of any subsequent Prudential Half
Year Financial Report. Prudential's most recent Annual Report, Form
20-F and any subsequent Half Year Financial Report are/will be
available on its website at
www.prudential.co.uk.
Any
forward-looking statements contained in this document speak only as
of the date on which they are made. Prudential expressly disclaims
any obligation to update any of the forward-looking statements
contained in this document or any other forward-looking statements
it may make, whether as a result of future events, new information
or otherwise except as required pursuant to the UK Prospectus
Rules, the UK Listing Rules, the UK Disclosure and Transparency
Rules, the Hong Kong Listing Rules, the SGX-ST listing rules or
other applicable laws and regulations.
SIGNATURES
Pursuant to the
requirements of the Securities Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Date: 16
November 2016
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PRUDENTIAL
PUBLIC LIMITED COMPANY
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By:
/s/ Nic Nicandrou
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Nic
Nicandrou
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Chief
Financial Officer
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