Prudential PLC announces 1st Quarter Results

Prudential's lifetime mortgage sales continued their upward trend with mortgage drawdowns of GBP51 million making this the highest quarter to date, up 50 per cent on the first quarter last year. Performance in the first quarter was underpinned by continued strong sales through intermediaries up 43 per cent to GBP33 million, complemented by sales through Prudential's face-to-face specialist consultants increasing by 61 per cent over the same period.

Corporate pension sales of GBP61 million were in line with the same period last year, principally due to continued growth in member uptake and increments on existing schemes. Prudential now administers corporate pensions on behalf of approximately 640,000 members.

Prudential's retail with-profits business performed very strongly across a range of products with total sales of GBP86 million up 17 per cent. Sales of with-profits bonds continued the strong growth seen in 2007, with first quarter APE sales of GBP18 million up 112 per cent on the first quarter of 2007. Sales of PruFund (Prudential's unitised and smoothed investment plan with an optional guarantee) were particularly strong at GBP11 million APE, with cumulative single premiums since launch in 2005 now exceeding GBP400 million. With consumers in the UK seeking to protect themselves from market down-turns, Prudential has seen a significant increase in with-profits sales as more investors choose its with-profits products to protect themselves during volatile and uncertain conditions as well as during market growth.

Sales of offshore products (sold within the UK and Europe) were up 36 per cent on 2007 at GBP19 million APE. There was a particularly strong performance in the UK market where sales increased by 124 per cent. This reflected increased demand for Prudential's open architecture portfolio bond product, with an increasing number of advisers recognising the flexibility, choice and potential tax effectiveness this sort of product can offer to their higher net worth clients. To build on this opportunity further, Prudential International launched a new enhanced offering in March - the Portfolio Account, a single premium offshore portfolio bond.

In the wholesale bulk and insurer back-book market Prudential wrote a minimal amount of business in the first quarter of 2008, reflecting Prudential's stance that it will only write annuity business at rates that are sufficient to meet its return on capital requirements based on its view of future longevity improvements. There continues to be a significant pipeline of potential wholesale deals but competition remains intense with a number of market participants competing for business.

PruHealth sales are not included in the total APE sales numbers. During the first quarter of 2008, PruHealth continued to grow strongly with gross written premiums of GBP20 million up 25 per cent on the same quarter of 2007. This business now covers over 150,000 lives.

These first quarter results reflect the UK strategy as we maintain our value-driven focus on writing only the business that meets our profitability criteria.