Insurance group Prudential (LON:PRU) said on the European Embedded Value (EEV) basis, operating profit before tax increased by 35% over 2009, to £1.677bn and new business profit for the period was £892m, an increase of 27%. The average margin across the Group was maintained at 54%, excluding Japan where Prudential stopped writing new business this year. In achieving this growth in new business profit, the absolute investment in new business remained broadly flat compared to the first half of 2009 at £337m (2009: £319m). This demonstrates a marked increase in our capital efficiency assales grew significantly during the same period.
IFRS operating profit before tax from continuing operations increased by 41% in the first half of 2010 to £968m (2009: £688m). These results include £123m of variable equity hedge gains in US operations (2009: equity hedge losses of £23m). Excluding these variable hedge gains, there was an increase of 19% in the first half of 2010 to £845m (2009: £711m.
Asset management net inflows were £4.4bn (2009: £10.1bn). Although this is down against the same period last year, which saw exceptional inflows into M&G's bond funds as a result of the financial crisis, this remains a leading performance driven by continuing strong inflows into M&G's retail funds.
The free surplus in the life and asset management operations increased to £3.2bn, up from £2.5bn at the end of 2009 and £0.9bn at the end of 2008. Embedded value shareholders' funds increased 9% to £16.7bn (2009: £15.3bn) and IFRS shareholders' funds rose 14% to £7.2bn (2009: £6.3bn).
The regulatory measure of the Insurance Groups Directive (IGD), the Group's capital surplus was estimated at £3.4bn at end-June 2010 (before any allowance for the 2010 interim dividend). The Group's required capital is covered 2.7 times by available capital.
The Board has agreed an increase of 5% in the interim dividend to 6.61p per share (2009: 6.29p).
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