Prudential Plc · LSE:PRU
Prudential — Prudential Corporation Asia — Investor Presentation (September 2018)
23 slides from Prudential's investor presentation, September 2018
Slide 1: Prudential Corporation Asia
Prudential Corporation Asia September 2018 1
Slide 2: Agenda
Agenda Summary HY18 Results Recap Strategic Update 2
Slide 3: Performance levers
Prudential Corporation Asia Performance levers Entered Cambodia Vietnam CF sale (Jan’18) (2013) Regular premium4 Renewal premium4 Retention rate2,4 Exited Universal Life IM WFOE established business in SG (Jan’2015) Optimisation Orientation (Mar’18) Long Term 94% (of APE) 95% Portfolio £6.1bn, +17%6
Slide 4: Agenda
Agenda Summary HY18 Results Recap Strategic Update 4
Slide 5: Adding capabilities while delivering strong performance
HY18 Results Adding capabilities while delivering strong performance Active portfolio management and capability expansion May 2017 Double-digit growth across Korea life sale (May’17) Hunan entry (Apr’18) key metrics IFC infra mandate (Jun’17) OPUS (HNW) (Apr’18) Sichuan entry (Nov’ 17) SGA Fund laun
Slide 6: Pivot to value with sales momentum recovering in Q2
HY18 Results Pivot to value with sales momentum recovering in Q2 Record 2Q APE NBP APE growth (YoY %) + 6% H1 Agency + 11 % Bancassurance + 14 % - 4% 8 Countries with double digit growth H&P NBP1 + 19 % Q2 17 Q2 18 Health & Protection % NBP Hong Kong + 14% Hong Kong + 13 % Thailand + 53 % China + 15
Slide 7: Resilient growth underpinned by recurring premium, protection focused business
HY18 Results Resilient growth underpinned by recurring premium, protection focused business IFRS Contribution from Insurance margin1 >£ 1 bn for the first time at HY Indonesia +6% 6 Life markets with double digit growth 145 Hong Kong +28% + 13 % Eastspring HY18 131 £723m Singapore +26% 119 Renewal P
Slide 8: Agenda
Agenda Summary HY18 Results Recap Strategic Update 8
Slide 9: Significant long term growth opportunity
Opportunity Significant long term growth opportunity Demographics1,2 Health and Protection Gap4,5 Working age Over 65 Out of pocket healthcare spend Mortality gap +1m +450m 42% a month 696m $146tr 441m 244m Asia 12% $40tr 2.3bn 9% $9tr 2015 2.5bn Asia USUS UKUK 2005 2017 2030 2030 2015 2030 2050 Gro
Slide 10: Leading pan-regional franchise
Footprint Leading pan-regional franchise Pru Asia footprint Life portfolio Asset Management 15m Top 3 China4 India5 Indonesia Philippines Pru life customers Position in 9 of 12 4 1.9% 2.7% 2.8% 1 1 1.2% 3 markets1 1,416m 1,354m 267m 107m Mutual fund Retail fund penetration9 manager ranking10 12% 1 V
Slide 11: The broadest Asian onshore footprint
Footprint Leading pan-regional franchise The broadest Asian Onshore footprint Indonesia Malaysia Singapore Vietnam Thailand China India Japan Korea Taiwan Hong Kong (onshore*) (onshore*) (onshore*) TMBAM Aberdeen Standard Alliance Bernstein Allianz A.M. BNP Paribas I.P. DWS A.M. Fidelity Franklin Te
Slide 12: High return businesses with significant runway
Strategic context High return businesses with significant runway Return on Equity1 Opportunity Market Prudential customers Population2 (m) penetration3 (%) as % of population Asia 32% 3,580 2.4% 0.4% Eastspring 40% Indonesia 62% 267 1.9% 0.9% 4 Hong Kong 58% 7 14.6% 19% Vietnam 30% 97 1.3% 1.5% Chin
Slide 13: Strategic priorities
Strategic priorities Asia Accelerate Leverage scale Expand health & protection Penetrate wealth Create ‘best-in-class’ Accelerate Expand presence Enhance the core health capability Eastspring in China Broaden flagship product range Narrow mortality protection gap Strengthen and expand Grow into foot
Slide 14: Strategic priorities: Enhance the core
Strategic priorities Enhance the core Opportunity Credentials and Capabilities Low Penetration Significant uninsured Top 3 position in 9 of 12 life markets (FY17) Insurance Mortality Gap2 Penetration1 Access to 3.6bn >8,000 15 million life population qualifiers 2.4 % $ 146 tr customers >600k agents
Slide 15: Create 'best-in-class' health capability
Strategic priorities Create ‘best-in-class’ health capability Opportunity Credentials and Capabilities Ageing population Significant uninsured >5m Health customers +65 Asia Health population Protection Gap1 >£800m Premium Income (FY17) + 450 m US$ 1.8 tn >1m Policies repriced (2015-2050) (2020E) Ris
Slide 16: Delivering new, compelling propositions
Strategic priorities Create ‘best-in-class’ health capability – Delivering new, compelling propositions Continuously innovating CI offerings Leader in the growing health & protection segment Hong Kong H&P APE H&P APE mix mix 15% 25% 16
Slide 17: Accelerate Eastspring
Strategic priorities Accelerate Eastspring Opportunity Credentials and Capabilities Cumulative AM industry net new flows by region ('13-’21E)1 Market leading pan >3,500 employees, regional Asian Retail Fund Rest of World Manager >300 investment Asia Pacific expected to provide professionals Top 10 i
Slide 18: Expand presence in China
Strategic priorities Expand presence in China Opportunity Credentials and Capabilities Insurance demand Wealth pool 18 branches, 77 cities >40k agents and 18 bank SARMRA partners #1 in industry Access to around 70% of the 尊享惠康 population (Premier Critical Illness) 100% agency e-sub >1m customers 99%
Slide 19: China: Growing footprint and diversification
China Growing footprint and diversification APE by Branch APE % (2017) 2013 – 2017 +4 Branches established: 6% Shanxi Henan Anhui 2007 - 2012 Sichuan 21% +5 2004 – 2006 Branches established: Tianjin +7 Branches established: Guangxi 24% Fujian Jiangsu Hebei Suzhou Liaoning Shanghai 2000 – 2003 Shenzh
Slide 20: Increasing H&P focus supported by opportunity & regulatory change
China Increasing H&P focus supported by opportunity & regulatory change APE HY18 Non-Par 98 H&P • Launched “Zun Xiang Hui Product 41% Kang” in 2017 - A limited- Regular premium % pay whole life critical 6ppts Par (% of APE) development illness (CI) protection plan + 2011 2014 2017 H&P (% APE) 20% 27
Slide 21: Country snapshots
Asia Country snapshots Hong Kong Singapore Indonesia >19,800 agents Largest agency force #1 Agency (>20% market >30% Agency market share >4,700 share) >3,700 MDRT Double Digit growth Agency Over 405 offices covering 165 APE cities +14% NBP (1H18) #1 in Regular Premium +3% growth in agents +13% APE;+
Slide 22: Country snapshots
Asia Country snapshots Malaysia Thailand Vietnam ~20,000 agents +26% APE 15% market share +7% productivity 1.5m customers #1 (Conventional & Takaful) Double digit Optimising banca growth partnerships 42% H&P Mix (APE) Launched in 2018 Initiated PRUbiz beyond +33% increase in active agents targeting
Slide 23: Summary
Asia Summary Strong financial performance and further pivot to value High quality diversified business delivering resilient growth Continued focus and expansion of capabilities Well positioned to benefit from long-term structural opportunities 23
Prudential Corporation Asia — Investor Presentation (September 2018) on 6ix