Prudential plc reported a 1.4% drop in new business profit for the first half, hit by slower sales in mainland China, Hong Kong and Indonesia. 

The profitability measure of new policies sold totalled US$1.47 billion , down from US$1.49 billion a year earlier, the group said in an exchange statement on Wednesday. That compared with the US$1.46 billion average estimate of 10 analysts compiled by the company. 

The results underscore the challenge to maintain Prudential’s growth targets, as the effects of pent-up demand unleashed last year after China’s reopening begin to fade. Chief executive officer Anil Wadhwani has been on a mission to reinvigorate the insurer, which has lagged behind rival AIA Group Ltd in new business growth and share price performance. 

Wadhwani unveiled a plan a year ago to more than double full-year new business profit to US$5.4 billion by 2027 versus 2022, implying 20% annual growth. The company announced in late June that it plans to buy back US$2 billion worth of shares by mid-2026.  

Shares of Prudential fell 2.2% in Hong Kong on Wednesday afternoon, taking this year’s decline to 22%. AIA is down about 19% this year, while the Hang Seng Finance index has climbed 5.3%.

New business profit of its China venture Citic Prudential Life tumbled by a third from a year earlier on an actual exchange rate basis, the statement showed. Sales slid 18%, hit by new regulations on expense controls for bancassurance distribution. 

The venture has been shifting its product mix towards more profitable annuity and longer-premium payment term insurance policies. Amid a domestic economic slowdown and falling local interest rates, Chinese authorities have also issued new rules curbing guaranteed investment returns on savings-type policies, prompting its China venture to reprice them.

In Hong Kong, sales declined 7% while new business profit dropped 2.8% against the high base last year, when the resumption of quarantine-free travel unleashed pent-up demand from mainland Chinese visitors to buy insurance in the former British colony. 

Sales in Indonesia tumbled 29%, with a 23% fall in new business profit, reflecting an industrywide slowdown and “short-term challenges” in its own agency business, the insurer said. 

Adjusted operating profit rose 5.6% to US$1.54 billion, after stripping out exchange-rate and equity-market swings. Prudential declared an interim dividend of 6.84 cents, 9% higher than a year earlier.

  - Bloomberg