Insurance giant Prudential prepares to redouble its commitment to Asia by presenting an ambitious growth plan
Insurance giant Prudential has unveiled ambitious growth and dividend targets under the leadership of new chief executive Anil Wadhwani.
Shares of the FTSE 100 firm rose yesterday after Wadhwani, who took over in February, laid out plans to boost profits and shareholder payouts following a turn to Asian markets.
Hong Kong-based chief Wadhwani revealed the strategy while updating the market on the insurance company’s half-year results, vowing to “do things differently.”
In his first-half results and strategic update since his appointment, Wadhwani said paying dividends was a “priority” as the company set a target of 7 to 9 percent annual dividend growth in 2023 and 2024.
Eastern Promise: Prudential’s shares soared after new chief executive Anil Wadwani (pictured), who took over in February, laid out plans to boost profits and shareholder payouts.
He also outlined an ambitious goal of generating 15 to 20 percent compound annual growth in profits from startups in the five years to 2027.
Richard Hunter, head of markets at Interactive Investor, said the new growth target is “spreading out” and “one by which the company will inevitably be judged.”
Prudential, founded in the UK in 1848, is headquartered in London and is listed on the London Stock Exchange as well as in Hong Kong, and retains its UK domicile.
However, it exited the UK insurance market in 2019 to focus on fast-growing Asian markets.
Wadhwani, the first Asia-based boss, is under pressure to deliver growth as the share price has fallen 22 percent in the past six months amid fears over China’s faltering economy.
As a result, Wadhwani outlined its expansion plans in India and Africa, as well as its existing key markets in Hong Kong, China and Southeast Asia.
“Both China and Hong Kong are going to be absolutely critical to our growth,” he said.
“That being said, we are very interested in ensuring that we are driving a multi-market growth engine model.”
Prudential reported start-up profits up 39 per cent to £1.18 billion in the first six months of the year and said there was a 3.6 per cent increase in operating profit as Chinese investors resumed buying insurance products in Hong Kong following the lifting of Covid. travel restrictions.
The insurer announced an interim dividend of 6.26 cents per share, up 9 percent from the 5.74 cents per share issued in 2022.
Wadhwani added: ‘Today we have announced that we will do things differently in the way we run Prudential.
‘With a clear strategy and capital allocation and operating priorities, we are focused on delivering sustainable value for all of our stakeholders: employees, customers, shareholders and our communities.
“We are excited to write the next chapter of growth at Prudential.”
Matt Britzman, equity analyst at Hargreaves Lansdown, added: “There may be problems in China, but that hasn’t caused any major setbacks in Prudential’s performance.”
The insurer’s share price rose following its earnings release and strategic update, up 1.5 percent, or 15 pence, to 999.8 pence.
Direct Line steals the boss from its rival Aviva
Experience: Adam Winslow will join Direct Line early next year
Struggling insurer Direct Line has landed a chief executive from rival firm Aviva.
Adam Winslow will join early next year, replacing interim CEO Jon Greenwood, who he took over after Penny James was ousted in January.
Winslow, head of Aviva’s general insurance business in the UK and Ireland, will receive an annual salary of £820,000 with a 9 per cent pension allowance and will be eligible for a performance-linked bonus scheme. Direct Line’s shares are down about 23 percent in the past 12 months.
James left after he issued a profit warning and canceled his dividend.
Insurers have been fighting rising inflation, which has increased payments and led consumers to cancel policies to save money.
In January it said there had been a “significant increase” in claims due to freezing weather and auto claims inflation.
