Prudential PLC announces 1st Quarter Results

In Malaysia the Takaful business continues to grow strongly, up 70 per cent on last year and representing 28 per cent of the total APE, up from 14 per cent last year. Total new business was down six per cent reflecting challenging market conditions. Korea delivered new business APE of GBP59 million, up 11 per cent, in a market that remains highly competitive.

On a comparable basis to 2007, APE sales in China were up by 50 per cent. In recently released market data for 2007, domestic players on average grew by 33 per cent and foreign/joint ventures by 21 per cent.

Vietnam, Thailand and Philippines have continued the strong growth seen in 2007 with collective first quarter APE sales of GBP15 million, up 36 per cent on last year. Unit linked products were launched in Vietnam in January and they represented five per cent of the country's sales in the first quarter.

Prudential has an excellent track record of building a profitable business in Asia and its focus continues to be on profitable and sustainable long-term growth. The business continues to expect to deliver doubling 2005 EEV NBP a year early by 2008.

US insurance operations

Jackson, Prudential's US insurance business, delivered APE sales of GBP165 million in the first quarter of 2008, representing a seven per cent decline from the same period in 2007. This was primarily driven by lower variable annuity sales. APE retail sales in the first quarter of 2008 were GBP124 million, down six per cent over the same period in 2007. On a PVNBP basis, new business sales were GBP1.6 billion.

Total APE sales of GBP165 million and total retail APE sales of GBP124 million both represent the second-highest level of sales during the first quarter in the Company's history. This achievement demonstrates the resilience of Jackson's business model despite volatile equity markets and a deteriorating macroeconomic environment experienced in the first three months of 2008.

Variable annuity APE sales of GBP90 million in the first quarter of 2008 were 13 per cent down on the same period in 2007. During the first three months of 2008, the S&P 500 index reduced by 10 per cent as the significant volatility experienced by US equity markets during the second half of 2007 continued into 2008. Price competition in the variable annuity market has remained intense.

In the first quarter of 2008, Jackson maintained its track record for product innovation by enhancing its variable annuity offering, launching two new guaranteed minimum withdrawal benefits (GMWB) and two new portfolio investment options subadvised by PPM America, Inc. As announced in the fourth quarter of 2007, Jackson is expanding its wholesaling force by adding nearly 70 internal wholesalers and seven sales desk directors by 2009. The initiative is designed to increase Jackson's presence among independent advisers and strengthen relationships with the Company's top producers.

Fixed annuity APE sales of GBP19 million were 46 per cent up on the same period of 2007 reflecting a higher customer propensity towards fixed-rate products in a period of declining equity markets.