Prudential reports strong start to 2014 but cautions on UK annuities

8th May 2014 08:49

Insurer Prudential reported a strong start to 2014 with a 29 per cent rise in new business profit in the first quarter.The Pru attributed the rise to a 20% rise in profit from new business in Asia, a 67% lift in the US and a 90% increase in the UK.But the Pru issued a note of caution, highlighting that three bulk annuity deals had driven the UK figure and it needed to work with the UK government on pension changes.The British government announced last month that people would no longer have to buy annuities automatically to fund their retirement, sparking concerns for the annuity businesses of insurers like the Pru.Chief Executive Tidjane Thiam said: "Prudential is committed to working closely with the UK Government and regulators following the announcements made in the first quarter, to ensure the new savings and investment system that emerges results in appropriate outcomes for British savers."The group's M&G asset management businesses made a positive start to the year, with M&G generating first quarter net inflows of £1.4bn and increasing external funds under management by 8% year-on-year to £129bn.Its Asian asset manager Eastspring increased net inflows by 21% to £1.1bn, including a large institutional mandate to manage Japanese equities.The Pru, which bought Ghana's Express Life in March, said the acquisition would allow it to benefit from long-term opportunities in Ghana and the nascent African life insurance industry. Thiam added: "We remain focused on the disciplined execution of our strategy and on capturing the profitable growth opportunities available to us across the group, particularly in Asia."Shares in the Pru rose 37.5p or 2.7% to 1415p at 09:27 in London.PW