2003 New Business Figures

Prudential PLC 22 January 2004 Embargo: 07.00 Thursday 22 January 2004 PRUDENTIAL PLC 2003 NEW BUSINESS RESULTS • Total Group insurance and investment sales of £31.5 billion, an increase of 11 per cent at constant exchange rates (CER) on 2002 (5 per cent at actual exchange rates (AER)). • Group APE (Annual Premium Equivalent) insurance sales of £1.6 billion were down 12 per cent at CER (down 16 per cent at AER). • Fourth quarter Group APE insurance sales up 9 per cent at CER (up 5 per cent at AER) on the third quarter; UK APE sales up 10 per cent and Prudential Corporation Asia (PCA) APE sales up 17 per cent at CER (11 per cent at AER) over the same period. • Total external Group investment funds under management of £30.8 billion, up 21 per cent in the year. • PCA insurance sales on an APE basis were up 16 per cent (up 8 per cent at AER). • Jackson National Life's (JNL) total sales of £4.1 billion were 23 per cent down on 2002 at CER (down 29 per cent at AER); variable annuity sales were up 55 per cent at CER (up 42 per cent at AER). • UK insurance sales on an APE basis were down 19 per cent. Fourth quarter sales of £148 million were up 10 per cent on the third quarter of 2003 reflecting strong with-profit bond and corporate pension sales. • M&G total retail and external institutional funds under management of £24.2 billion, up 19 per cent in the year. Prudential's Group Chief Executive, Jonathan Bloomer, commented: 'In the UK, we expect to benefit from savers choosing those companies with clear financial strength. However, while consumer confidence is returning, we remain relatively cautious for the UK in the first half of 2004 due to the uncertainty surrounding the continuing government and regulatory reviews. 'We have seen strong growth in a number of our Asian markets despite the impact of SARS earlier in 2003. In the US, we increased our market share and recorded one of our best years in retail sales. We are optimistic about the growth potential of our Asian and US businesses in 2004. 'Prudential's international diversification and broad range of products and distribution channels mean it is well placed for future growth.' * The narrative below is on constant exchange rates throughout. See Notes to Editors for further details. Prudential Corporation Asia PCA's new business sales on an APE basis for 2003 were £555 million, up 16 per cent on the same period last year. This was a strong result given the economic conditions in the first half of the year. APE sales in the fourth quarter 2003 were £164 million, up 17 per cent on the third quarter 2003. In the established markets of Hong Kong, Malaysia and Singapore, APE sales were up 24 per cent on the third quarter. In Singapore, PCA continues to focus on more profitable regular premium life business with sales of £57 million for 2003 up 32 per cent compared with last year. PCA's Indonesian operation is starting to make a significant contribution, reflecting its market-leading position in unit-linked products combined with an increase in agent productivity; sales on an APE basis for 2003 were £34 million and 75 per cent higher than 2002. PCA's joint venture operation with ICICI in India generated impressive sales growth of 195 per cent, resulting in a £16 million share of APE sales for the full year. PCA Life Japan began the implementation of its strategy to focus exclusively on its financial adviser and bancassurance distribution channels (as announced on 1 September 2003), and consequently experienced a temporary slow down in new business sales in the fourth quarter. PCA Life Korea has developed extremely well in its second year of operation driven by strong sales through its agency and bank distribution channels, and recorded APE sales for 2003 of £32 million, up 239 per cent over 2002. Total investment products funds under management in Asia as at 31 December 2003 were £6.6 billion, up 37 per cent during the year with net inflows of £1.5 billion. Jackson National Life Total sales for the year were down 23 per cent on 2002 to £4.1 billion, due to lower retail sales together with a reduction in sales of institutional products. In 2003, 93 per cent of sales came from products launched since the beginning of 2002. In 2003, JNL's retail sales of £3.6 billion represented its second best year, only 10 per cent lower than the record sales delivered in 2002. JNL delivered record variable annuity sales during 2003. Total sales of £1.9 billion were up 55 per cent on last year. During 2003, 48 per cent of variable annuity sales went into the fixed option compared with 58 per cent in 2002. JNL has improved its market position in variable annuity sales, ranking 14th for the first nine months of 2003, up from 20th for the same period of 2002 (source: The VARDS Report). Due to the continued low interest rate environment in the US and the high rate of election of the fixed account option within variable annuities, fixed annuity sales in 2003 of £1.4 billion were 45 per cent below the prior year. Sales of equity-linked indexed annuities of £255 million were up 9 per cent on the prior year. Sales of fixed and equity-linked indexed annuities combined, contracted across the industry during the first nine months of 2003. However, JNL improved its market position in total individual fixed annuity sales for the first nine months of 2003 to fifth from seventh for the same period of 2002 (source: LIMRA International). Regular premium life sales of £13 million compared with sales of £21 million in 2002. The 63 per cent reduction in sales of institutional products reflects JNL's focus on retail markets, and comments made throughout the year that JNL did not expect to sell significant amounts of institutional products in 2003. Curian Capital LLC, JNL's recently launched registered investment advisor channel, continued to build on its strong start. At the year-end, funds under management had grown to £148 million (US$266 million), more than five times the funds under management at the half-year. UK and Europe Insurance Operations Prudential UK and Europe's APE sales for 2003 were £616 million, 21 per cent down on 2002. However, APE sales in the fourth quarter of £152 million were 12 per cent up on the third quarter reflecting strong bulk annuity sales and the highest quarter for with-profit bond sales in 2003. APE sales of corporate pensions through the business to business channel were £176 million, 18 per cent higher than in 2002, reflecting a strong contribution from new schemes. This was a result of Prudential UK's success in worksite marketing, which it believes has an important role to play in helping to encourage long-term savings. According to the latest available ABI figures, Prudential UK had a 16 per cent market share of the defined contribution occupational pension scheme market in the first nine months of 2003 compared with 14 per cent for the same period in 2002. Individual annuity APE sales for 2003 of £176 million were comparable with 2002 and Prudential UK believes it maintained its market leading position in this market during the first nine months of the year. Intermediated sales of Prubond were 32 per cent higher in the fourth quarter of 2003 than the third. This reflected a return to confidence in this market for strong providers such as Prudential, along with the positive impact of new product developments such as the Prospect Bond. This innovative product, launched in September 2003, accounted for 17 per cent of with-profit bond sales in the fourth quarter. In the third quarter of 2003, Prudential UK had a 42 per cent market share of with-profit bond sales distributed through IFAs (source: ABI), which it believes will have grown in the fourth quarter. Partnership agreements with Abbey to sell with-profit bonds, and with Zurich to underwrite annuities, resulted in single premium sales in 2003 of £98 million compared with £11 million in 2002. M&G M&G recorded gross fund inflows of £3.8 billion in 2003, a slight increase on the previous year, reflecting the strength of M&G's diversified product offering in the areas of retail fund management, institutional fixed income, pooled life and pension funds, property and private finance. External funds under management, which represent approximately one quarter of M&G's total funds under management, increased significantly during the year, rising 19 per cent to £24.2 billion. Gross fund inflows into M&G's retail products were £1.2 billion in 2003, a 6 per cent fall on 2002. Net fund inflows for 2003 were £184 million. M&G's institutional business saw gross fund inflows of £2.6 billion in 2003, a 6 per cent increase on last year. Net institutional fund inflows in the year were £1.2 billion. Egg Egg will announce its full year results on 23 February 2004. Prudential announced on 14 January that it is in discussions regarding a possible transaction with respect to its approximately 79 per cent shareholding in Egg. These discussions are continuing. -ENDS- Enquiries to: Media Investors/Analysts Geraldine Davies 020 7548 3911 Rebecca Burrows 020 7548 3537 Steve Colton 020 7548 3721 Marina Lee-Steere 020 7548 3511 Clare Staley 020 7548 3719 Notes to Editors: 1. There will be a conference call today for wire services hosted by Jonathan Bloomer, Group Chief Executive, and Philip Broadley, Group Finance Director at 8.00am (dial-in telephone number: +44 (0) 208 288 4700). Callers to quote 'Prudential' for access to the call. 2.There will be a conference call for investors and analysts hosted by Jonathan Bloomer at 2.30pm (dial-in telephone number: +44 (0) 207 162 0189, US dial-in: +1 334 323 6203). Callers to quote: 'Prudential ' for access to the call. A recording of this call will be available until 28 January by dialling: UK: +44 (0) 208 288 4459, US: +1 334 323 6222, access code 935112. 3. Sales for overseas operations have been reported using average exchange rates as shown in the attached schedules. Commentary is given on the results on a constant exchange rate basis. The two bases are compared in the table below. Annual premium equivalent sales Actual exchange rates Constant exchange rates 2003 £'m 2002 £'m +/- (%) 2003 £'m 2002 £'m +/- (%) UK and Europe 616 779 -21% 616 779 -21% US 418 595 -30% 418 547 -24% Asia 555 513 8% 555 480 16% Total 1,589 1,887 -16% 1,589 1,806 -12% Gross Inflows Actual exchange rates Constant exchange rates 2003 £'m 2002 £'m +/- (%) 2003 £'m 2002 £'m +/- (%) M&G 3,797 3,731 2% 3,797 3,731 2% Asia 18,157 13,661 33% 18,157 12,744 42% Total 21,954 17,392 26% 21,954 16,475 33% Total insurance and investment flows Actual exchange rates Constant exchange rates 2003 £'m 2002 £'m +/- (%) 2003 £'m 2002 £'m +/- (%) Insurance 9,503 12,509 -24% 9,503 11,982 -21% Investment 21,954 17,392 26% 21,954 16,475 33% Total 31,457 29,901 5% 31,457 28,457 11% 4. Annual premium equivalent (APE) sales comprise regular premium sales plus one-tenth of single premium insurance sales. 5. Certain investment mandates previously reported as UK corporate pensions are now reported as M&G institutional investment flows. The impact is to reduce UK corporate pensions APE sales by £31 million for the full-year 2002. 6. US institutional products (previously referred to as 'stable value products') consist of guaranteed investment contracts (GICs), funding agreements and medium-term notes backed by funding agreements. 7. By restating 2002 operating profit before amortisation to reflect 2003 exchange rates, the 2002 profit, on the achieved basis of £1,133 million would be £1,085 million and the modified statutory basis profit of £432m would be £417 million. 8. Financial Calendar: 2004 2003 Full-year Results Tuesday 24 February 2004 Ex-dividend date Wednesday 17 March 2004 Record date Friday 19 March 2004 First quarter New Business Figures Wednesday 21 April 2004 Annual General Meeting Thursday 6 May 2004 Payment of 2003 final dividend Wednesday 26 May 2004 2004 Interim Results/ Second quarter New Business Tuesday 27 July 2004 Figures Ex-dividend date 18 August 2004 Record date 20 August 2004 Forward-Looking Statements This statement may contain certain 'forward-looking statements' with respect to certain of Prudential's plans and its current goals and expectations relating to its future financial condition, performance, results, strategy and objectives. Statements containing the words 'believes', 'intends', 'expects', 'plans', 'seeks' and 'anticipates', and words of similar meaning, are forward-looking. By their nature, all forward-looking statements involve risk and uncertainty because they relate to future events and circumstances which are beyond Prudential's control including among other things, UK domestic and global economic and business conditions, market related risks such as fluctuations in interest rates and exchange rates, and the performance of financial markets generally; the policies and actions of regulatory authorities, the impact of competition, inflation, and deflation; experience in particular with regard to mortality and morbidity trends, lapse rates and policy renewal rates; the timing, impact and other uncertainties of future acquisitions or combinations within relevant industries; and the impact of changes in capital, solvency or accounting standards, and tax and other legislation and regulations in the jurisdictions in which Prudential and its affiliates operate. This may for example result in changes to assumptions used for determining results of operations or re-estimations of reserves for future policy benefits. As a result, Prudential's actual future financial condition, performance and results may differ materially from the plans, goals, and expectations set forth in Prudential's forward-looking statements. Prudential undertakes no obligation to update the forward-looking statements contained in this statement or any other forward-looking statements it may make. Schedule 1 PRUDENTIAL PLC - NEW BUSINESS - FULL YEAR 2003 TOTAL INSURANCE AND INVESTMENT NEW BUSINESS UK & Europe US (1) Asia (1) Total FY FY +/- FY FY +/- FY FY +/- FY FY +/- (%) 2003 2002 (%) 2003 2002 (%) 2003 2002 (%) 2003 2002 £m £m £m £m £m £m £m £m Total Insurance Products 4,448 5,808 (23%) 4,066 5,757 (29%) 989 944 5% 9,503 12,509 (24%) Total Investment Products 3,797 3,731 2% - - - 18,157 13,661 33% 21,954 17,392 26% - Gross Inflows (2) ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Group Total 8,245 9,539 (14%) 4,066 5,757 (29%) 19,146 14,605 31% 31,457 29,901 5% ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- INSURANCE OPERATIONS Single Regular Total Annual Equivalents(3) FY FY +/- FY FY +/- FY FY +/- FY FY +/- (%) 2003 2002 (%) 2003 2002 (%) 2003 2002 (%) 2003 2002 £m £m £m £m £m £m £m £m UK Insurance Operations : (4) Direct to Customer: Individual Pensions 9 15 (40%) 9 11 (18%) 18 26 (31%) 10 13 (23%) Life 13 59 (78%) 3 4 (25%) 16 63 (75%) 4 10 (60%) Individual Annuities 657 683 (4%) - - - 657 683 (4%) 66 68 (3%) ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Sub-Total 679 757 (10%) 12 15 (20%) 691 772 (10%) 80 91 (12%) DWP Rebates 280 215 30% - - - 280 215 30% 28 22 27% ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Total 959 972 (1%) 12 15 (20%) 971 987 (2%) 108 112 (4%) ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Business to Business: Corporate Pensions 488 350 39% 127 114 11% 615 464 33% 176 149 18% Individual Annuities 223 212 5% - - - 223 212 5% 22 21 5% ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Total 711 562 27% 127 114 11% 838 676 24% 198 170 16% ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Intermediated Distribution : Individual Pensions 53 85 (38%) 23 34 (32%) 76 119 (36%) 28 43 (35%) Corporate Pensions 67 77 (13%) 6 14 (57%) 73 91 (20%) 13 22 (41%) Life 1,065 2,179 (51%) 22 18 22% 1,087 2,197 (51%) 129 236 (45%) Individual Annuities 828 860 (4%) - - - 828 860 (4%) 83 86 (3%) Bulk Annuities 287 710 (60%) - - - 287 710 (60%) 29 71 (59%) ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Sub-Total 2,300 3,911 (41%) 51 66 (23%) 2,351 3,977 (41%) 281 457 (39%) DWP Rebates 103 90 14% - - - 103 90 14% 10 9 11% ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Total 2,403 4,001 (40%) 51 66 (23%) 2,454 4,067 (40%) 291 466 (38%) ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Partnerships : Life 46 11 318% - - - 46 11 318% 5 1 400% Individual Annuities 52 - - - - - 52 - - 5 - - ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Total 98 11 791% - - - 98 11 791% 10 1 900% ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Total : Individual Pensions 62 100 (38%) 32 45 (29%) 94 145 (35%) 38 55 (31%) Corporate Pensions 555 427 30% 133 128 4% 688 555 24% 189 171 11% Life 1,124 2,249 (50%) 25 22 14% 1,149 2,271 (49%) 137 247 (45%) Individual Annuities 1,760 1,755 - - - - 1,760 1,755 - 176 176 - Bulk Annuities 287 710 (60%) - - - 287 710 (60%) 29 71 (59%) ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Sub-Total 3,788 5,241 (28%) 190 195 (3%) 3,978 5,436 (27%) 569 719 (21%) DWP Rebates 383 305 26% - - - 383 305 26% 38 31 23% ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Total UK Insurance 4,171 5,546 (25%) 190 195 (3%) 4,361 5,741 (24%) 607 750 (19%) Operations ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- European Insurance Operations : (1) Insurance Products 87 42 107% - 25 - 87 67 30% 9 29 (69%) ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Total European Insurance 87 42 107% - 25 - 87 67 30% 9 29 (69%) Operations ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Total UK & European 4,258 5,588 (24%) 190 220 (14%) 4,448 5,808 (23%) 616 779 (21%) Insurance Operations ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- US Insurance Operations : (1) Fixed Annuities 1,375 2,708 (49%) - - - 1,375 2,708 (49%) 138 271 (49%) Equity-Linked Indexed 255 254 - - - - 255 254 - 26 25 4% Annuities Variable Annuities 1,937 1,363 42% - - - 1,937 1,363 42% 194 136 43% Life - - - 13 22 (41%) 13 22 (41%) 13 22 (41%) ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Sub-Total Retail 3,567 4,325 (18%) 13 22 (41%) 3,580 4,347 (18%) 370 455 (19%) Guaranteed Investment 183 292 (37%) - - - 183 292 (37%) 18 29 (38%) Contracts GIC - Medium Term Note 303 1,118 (73%) - - - 303 1,118 (73%) 30 112 (73%) ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Total US Insurance 4,053 5,735 (29%) 13 22 (41%) 4,066 5,757 (29%) 418 595 (30%) Operations ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Asian Insurance Operations : (1) China 7 5 40% 11 8 38% 18 13 38% 12 9 33% Hong Kong 189 140 35% 83 84 (1%) 272 224 21% 102 98 4% India (@26%) 4 4 - 16 6 167% 20 10 100% 16 6 167% Indonesia 27 11 145% 31 19 63% 58 30 93% 34 20 70% Japan 9 9 - 35 39 (10%) 44 48 (8%) 36 40 (10%) Korea 19 - - 30 10 200% 49 10 390% 32 10 220% Malaysia 11 15 (27%) 59 59 - 70 74 (5%) 60 61 (2%) Singapore 181 279 (35%) 57 46 24% 238 325 (27%) 75 74 1% Taiwan 28 14 100% 132 145 (9%) 160 159 1% 135 146 (8%) Other (5) 7 2 250% 53 49 8% 60 51 18% 54 49 10% ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Total Asian Insurance 482 479 - 507 465 9% 989 944 5% 555 513 8% Operations ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Group Total 8,793 11,802 (25%) 710 707 - 9,503 12,509 (24%) 1,589 1,887 (16%) ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Notes to Schedules : (1) Insurance and investment new business for overseas operations has been calculated using average exchange rates. The applicable rate for Jackson National Life is 1.6351 (2002 - 1.5029). A comparison between the results on actual exchange rate and current exchange rate is given in the notes. (2) Represents cash received from sale of investment products. (3) Annual Equivalents, calculated as regular new business contributions + 10% single new business contributions, are subject to roundings. (4) Reflecting the expanded investment business new business analysis on Schedule 2, certain investment fund mandates previously classified from UK Corporate Pensions sales are now reported as M&G institutional funds under management. 2002 UK insurance sales now reflect this change in presentation. (5) In Asia, 'Other' insurance operations include Thailand, The Philippines and Vietnam. Schedule 2 PRUDENTIAL PLC - NEW BUSINESS - FULL YEAR 2003 INVESTMENT OPERATIONS Opening Gross Redemptions Net Other Market & Net movement Closing FUM inflows inflows movements currency in FUM FUM movements 2003 M&G (4) M&G branded retail 7,588 1,068 ( 883) 185 ( 14) 1,060 1,231 8,819 investment products Prudential branded UK retail 1,137 143 ( 144) ( 1) - 189 188 1,325 investment products (6) M&G institutional (7) 11,559 2,586 ( 1,417) 1,169 - 1,320 2,489 14,048 ---- ---- ---- ---- ---- ---- ---- ---- Total M&G 20,284 3,797 ( 2,444) 1,353 ( 14) 2,569 3,908 24,192 ---- ---- ---- ---- ---- ---- ---- ---- Asia India 1,372 7,534 ( 6,906) 628 ( 67) 116 677 2,049 Taiwan 2,425 7,488 ( 7,114) 374 - ( 133) 241 2,666 Korea 993 2,339 ( 2,329) 10 ( 25) ( 45) ( 60) 933 Other Mutual Fund Operations 306 724 ( 267) 457 - ( 11) 446 752 ---- ---- ---- ---- ---- ---- ---- ---- Total Asian Mutual Fund 5,096 18,085 ( 16,616) 1,469 ( 92) ( 73) 1,304 6,400 Operations ---- ---- ---- ---- ---- ---- ---- ---- Hong Kong MPF Products (8) 136 72 ( 19) 53 - 7 60 196 ---- ---- ---- ---- ---- ---- ---- ---- Total Asian Investment 5,232 18,157 ( 16,635) 1,522 ( 92) ( 66) 1,364 6,596 Operations ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Total Investment Products 25,516 21,954 ( 19,079) 2,875 ( 106) 2,503 5,272 30,788 ---- ---- ---- ---- ---- ---- ---- ---- Opening Gross Redemptions Net Other Market & Net movement Closing FUM inflows inflows movements currency in FUM FUM movements 2002 M&G M&G branded retail 8,890 1,144 ( 768) 376 ( 108) ( 1,570) ( 1,302) 7,588 investment products (9) Prudential branded UK retail 1,546 142 ( 176) ( 34) - ( 375) ( 409) 1,137 investment products (6) M&G institutional (7) 9,873 2,445 ( 842) 1,603 - 83 1,686 11,559 ---- ---- ---- ---- ---- ---- ---- ---- Total M&G 20,309 3,731 ( 1,786) 1,945 ( 108) ( 1,862) ( 25) 20,284 ---- ---- ---- ---- ---- ---- ---- ---- Asia India 1,072 3,843 ( 3,554) 289 ( 22) 33 300 1,372 Taiwan 2,076 9,208 ( 8,590) 618 - ( 269) 349 2,425 Korea - 270 ( 391) ( 121) 1,134 ( 20) 993 993 Other Mutual Fund Operations 58 265 ( 12) 253 ( 2) ( 3) 248 306 ---- ---- ---- ---- ---- ---- ---- ---- Total Asian Mutual Fund 3,206 13,586 ( 12,547) 1,039 1,110 ( 259) 1,890 5,096 Operations ---- ---- ---- ---- ---- ---- ---- ---- Hong Kong MPF Products (8) 90 75 ( 11) 64 - ( 18) 46 136 ---- ---- ---- ---- ---- ---- ---- ---- Total Asian Investment 3,296 13,661 ( 12,558) 1,103 1,110 ( 277) 1,936 5,232 Operations ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Total Investment Products 23,605 17,392 ( 14,344) 3,048 1,002 ( 2,139) 1,911 25,516 ---- ---- ---- ---- ---- ---- ---- ---- Opening Gross Redemptions Net Other Market & Net movement Closing FUM inflows inflows movements currency in FUM FUM movements 2003 movement relative to 2002 M&G M&G branded retail (15%) (7%) (15%) (51%) 87% 168% 195% 16% investment products Prudential branded UK retail (26%) 1% 18% 97% - 150% 146% 17% investment products (6) M&G institutional (7) 17% 6% (68%) (27%) - 1490% 48% 22% ---- ---- ---- ---- ---- ---- ---- ---- Total M&G - 2% (37%) (30%) 87% 238% 15732% 19% ---- ---- ---- ---- ---- ---- ---- ---- Asia India 28% 96% (94%) 117% (205%) 252% 126% 49% Taiwan 17% (19%) 17% (39%) - 51% (31%) 10% Korea - 766% (496%) 108% (102%) (125%) (106%) (6%) Other Mutual Fund Operations 428% 173% (2125%) 81% - (267%) 80% 146% ---- ---- ---- ---- ---- ---- ---- ---- Total Asian Mutual Fund 59% 33% (32%) 41% (108%) 72% (31%) 26% Operations ---- ---- ---- ---- ---- ---- ---- ---- Hong Kong MPF Products (8) 51% (4%) (73%) (17%) - 139% 30% 44% ---- ---- ---- ---- ---- ---- ---- ---- Total Asian Investment 59% 33% (32%) 38% (108%) 76% (30%) 26% Operations ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Total Investment Products 8% 26% (33%) (6%) (111%) 217% 176% 21% ---- ---- ---- ---- ---- ---- ---- ---- US (10) FY FY +/- 2003 2002 (%) £m £m US Banking Products Total Deposit Liabilities 623 650 (4%) Retail Assets 659 699 (6%) Curian Capital External Funds under 148 - - Management Notes to Schedules : (4) Reflecting the expanded investment business new business analysis above, certain investment fund mandates previously classified from UK Corporate Pensions sales are now reported as M&G institutional funds under management. 2002 UK insurance sales now reflect this change in presentation. (6) Scottish Amicable and Prudential branded Investment Products. (7) Balance includes segregated pensions fund business, private finance flows and M&G South Africa institutional business. M&G institutional funds under management restated in Q2 2003 to include funds managed on behalf of the Prudential Staff Pension Scheme previously categorised as internal funds. (8) Mandatory Provident Fund product sales in Hong Kong are included at Prudential's 36% interest of the Hong Kong MPF operation. (9) Balance restated to include M&G South Africa retail investment operations. (10) Balance sheet figures have been calculated at closing exchange rates. Schedule 3 PRUDENTIAL PLC - NEW BUSINESS - QUARTER 4 2003 VERSUS QUARTER 4 2002 INSURANCE OPERATIONS Single Regular Total Annual Equivalents (3) Q4 Q4 +/- Q4 Q4 +/- Q4 Q4 +/- Q4 Q4 +/- 2003 2003 (%) 2003 2002 (%) 2003 2002 (%) 2003 2002 (%) £m £m £m £m £m £m £m £m UK Insurance Operations : (4) Direct to Customer: Individual Pensions 1 2 (50%) 2 2 - 3 4 (25%) 2 2 - Life 3 8 (63%) 1 1 - 4 9 (56%) 1 2 (50%) Individual Annuities 138 214 (36%) - - - 138 214 (36%) 14 21 (33%) ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Sub-Total 142 224 (37%) 3 3 - 145 227 (36%) 17 25 (32%) DWP Rebates - 20 - - - - - 20 - - 2 - ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Total 142 244 (42%) 3 3 - 145 247 (41%) 17 27 (37%) ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Business to Business: Corporate Pensions 102 26 292% 30 35 (14%) 132 61 116% 40 38 5% Individual Annuities 56 60 (7%) - - - 56 60 (7%) 6 6 - ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Total 158 86 84% 30 35 (14%) 188 121 55% 46 44 5% ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Intermediated Distribution : Individual Pensions 11 11 - 4 7 (43%) 15 18 (17%) 5 8 (38%) Corporate Pensions 29 7 314% 1 2 (50%) 30 9 233% 4 3 33% Life 345 387 (11%) 2 6 (67%) 347 392 (11%) 37 45 (18%) Individual Annuities 233 263 (11%) - - - 233 263 (11%) 23 26 (12%) Bulk Annuities 98 424 (77%) - - - 98 424 (77%) 10 42 (76%) ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Sub-Total 716 1,091 (34%) 7 15 (53%) 723 1,106 (35%) 79 124 (36%) DWP Rebates 43 45 (4%) - - - 43 45 (4%) 4 5 (20%) ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Total 759 1,136 (33%) 7 15 (53%) 766 1,151 (33%) 83 129 (36%) ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Partnerships : Life 1 11 (91%) - - - 1 11 (91%) - 1 - Individual Annuities 23 - - - - - 23 - - 2 - - ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Total 24 11 118% - - - 24 11 118% 2 1 100% ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Total : Individual Pensions 12 13 (8%) 6 9 (33%) 18 22 (18%) 7 10 (30%) Corporate Pensions 131 33 297% 31 37 (16%) 162 70 131% 44 40 10% Life 349 405 (14%) 3 7 (57%) 352 412 (15%) 38 48 (21%) Individual Annuities 450 537 (16%) - - - 450 537 (16%) 45 54 (17%) Bulk Annuities 98 424 (77%) - - - 98 424 (77%) 10 42 (76%) ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Sub-Total 1,040 1,412 (26%) 40 53 (25%) 1,080 1,465 (26%) 144 194 (26%) DWP Rebates 43 65 (34%) - - - 43 65 (34%) 4 7 (43%) ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Total UK Insurance 1,083 1,477 (27%) 40 53 (25%) 1,123 1,530 (27%) 148 201 (26%) Operations ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- European Insurance Operations : (1) Insurance Products 41 8 413% - 9 - 41 17 141% 4 10 (60%) ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Total European 41 8 413% - 9 - 41 17 141% 4 10 (60%) Insurance Operations ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Total UK & European 1,124 1,485 (24%) 40 62 (35%) 1,164 1,547 (25%) 152 211 (28%) Insurance Operations ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- US Insurance Operations : (11) Fixed Annuities 222 730 (70%) - - - 222 730 (70%) 22 73 (70%) Equity-Linked Indexed 71 50 42% - - - 71 50 42% 7 5 40% Annuities Variable Annuities 466 511 (9%) - - - 466 511 (9%) 47 51 (8%) Life - - - 2 4 (50%) 2 4 (50%) 2 4 (50%) ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Sub-total Retail 759 1,291 (41%) 2 4 (50%) 761 1,295 (41%) 78 133 (41%) Guaranteed Investment ( 9) ( 5) (80%) - - - ( 9) ( 5) (80%) ( 1) ( 1) - Contracts GIC - Medium Term Note ( 4) ( 16) 75% - - - ( 4) ( 16) 75% - ( 1) - ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Total US Insurance 746 1,270 (41%) 2 4 (50%) 748 1,274 (41%) 77 131 (41%) Operations ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Asian Insurance Operations : (1) China 2 1 100% 3 2 50% 5 3 67% 3 2 50% Hong Kong 55 51 8% 28 22 27% 83 73 14% 34 27 26% India (@26%) 1 1 - 6 2 200% 7 3 133% 6 2 200% Indonesia 11 3 267% 8 6 33% 19 9 111% 9 6 50% Japan 2 1 100% 2 10 (80%) 4 11 (64%) 2 10 (80%) Korea 14 - - 13 3 333% 27 3 800% 14 3 367% Malaysia 2 4 (50%) 16 22 (27%) 18 26 (31%) 16 22 (27%) Singapore 85 85 - 17 13 31% 102 98 4% 26 22 18% Taiwan 10 2 400% 38 45 (16%) 48 47 2% 39 45 (13%) Other (5) 2 2 - 15 15 - 17 17 - 15 16 (6%) ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Total Asian Insurance 184 150 23% 146 140 4% 330 290 14% 164 155 6% Operations ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Group Total 2,054 2,905 (29%) 188 206 (9%) 2,242 3,111 (28%) 393 497 (21%) ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- INVESTMENT OPERATIONS M&G (7) Asia Mutual Funds Hong Kong MPF Total Investment Products (8) Products Q4 Q4 +/- Q4 Q4 +/- Q4 Q4 +/- Q4 Q4 +/- 2003 2003 (%) 2003 2002 (%) 2003 2002 (%) 2003 2002 (%) £m £m £m £m £m £m £m £m Opening FUM 23,193 19,597 18% 6,316 3,652 73% 186 121 54% 29,696 23,370 27% Gross inflows 772 750 3% 4,832 3,812 27% 16 17 (6%) 5,620 4,580 23% Less redemptions ( 604) ( 447) (35%) ( 4,346) ( 3,487) (25%) ( 3) ( 2) (50%) ( 4,953)( 3,936) (26%) ---- ---- ---- ----- ----- ----- ---- ---- ------ ---- ---- ---- Net flows 168 304 (45%) 486 325 50% 13 15 (13%) 667 644 4% Other movements - - - ( 38) 1,130 (103%) - - - ( 38) 1,130 (103%) Market and currency 831 383 117% ( 364) ( 12) (2933%) ( 3) - - 463 371 25% movements ---- ---- ---- ----- ----- ----- ---- ---- ----- ---- ---- ---- Net movement in FUM 999 687 45% 84 1,444 (94%) 10 15 (33%) 1,092 2,146 (49%) ---- ---- ---- ----- ----- ----- ---- ---- ----- ---- ---- ---- Closing FUM 24,192 20,284 19% 6,400 5,096 26% 196 136 44% 30,788 25,517 21% ---- ---- ---- ----- ----- ----- ---- ---- ----- ---- ---- ---- Notes to Schedules : (1) Insurance and investment new business for overseas operations has been calculated using average exchange rates. (3) Annual Equivalents, calculated as regular new business contributions + 10% single new business contributions, are subject to roundings. (4) Reflecting the expanded investment business new business analysis on Schedule 2, certain investment fund mandates previously classified from UK Corporate Pensions sales are now reported as M&G institutional funds under management. 2002 UK insurance sales now reflect this change in presentation. (5) In Asia, 'Other' insurance operations include Thailand, The Philippines and Vietnam. (7) Balance includes segregated pensions fund business, private finance flows and M&G South Africa institutional business. M&G institutional funds under management restated in Q2 2003 to include funds managed on behalf of the Prudential Staff Pension Scheme previously categorised as internal funds. (8) Mandatory Provident Fund product sales in Hong Kong are included at Prudential's 36% interest of the Hong Kong MPF operation. (11) Sales for overseas operations are converted to sterling using the year to date average exchange rate applicable at the time. The sterling results for individual quarters represent the difference between the year to date reported sterling results at successive quarters and will include foreign exchange movements from earlier periods. Schedule 4 PRUDENTIAL PLC - NEW BUSINESS - QUARTER 4 2003 VERSUS QUARTER 3 2003 INSURANCE OPERATIONS Single Regular Total Annual Equivalents (3) Q4 2003 Q3 +/- Q4 2003 Q3 2003 +/- Q4 Q3 +/- Q4 Q3 +/- 2003 (%) (%) 2003 2003 (%) 2003 2003 (%) £m £m £m £m £m £m £m £m UK Insurance Operations : (4) Direct to Customer: Individual Pensions 1 1 - 2 2 - 3 3 - 2 2 - Life 3 3 - 1 - - 4 3 33% 1 - - Individual Annuities 138 152 (9%) - - - 138 152 (9%) 14 15 (7%) ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Total 142 156 (9%) 3 2 50% 145 158 (8%) 17 17 - ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Business to Business: Corporate Pensions 102 138 (26%) 30 28 7% 132 166 (20%) 40 41 (2%) Individual Annuities 56 63 (11%) - - - 56 63 (11%) 6 7 (14%) ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Total 158 200 (21%) 30 28 7% 188 228 (18%) 46 48 (4%) ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Intermediated Distribution : Individual Pensions 11 9 22% 4 6 (33%) 15 15 - 5 7 (29%) Corporate Pensions 29 15 93% 1 2 (50%) 30 17 76% 4 4 - Life 345 280 23% 2 3 (33%) 347 283 23% 37 31 19% Individual Annuities 233 206 13% - - - 233 206 13% 23 21 10% Bulk Annuities 98 32 206% - - - 98 32 206% 10 3 233% ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Sub-Total 716 542 32% 7 11 (36%) 723 553 31% 79 65 22% DWP Rebates 43 - - - - - 43 - - 4 - - ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Total 759 542 40% 7 11 (36%) 766 553 39% 83 65 28% ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Partnerships : Life 1 10 (90%) - - - 1 10 (90%) - 1 - Individual Annuities 23 24 (4%) - - - 23 24 (4%) 2 2 - ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Total 24 34 (29%) - - - 24 34 (29%) 2 3 (33%) ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Total : Individual Pensions 12 10 20% 6 8 (25%) 18 18 - 7 9 (22%) Corporate Pensions 131 153 (14%) 31 30 3% 162 183 (11%) 44 45 (2%) Life 349 293 19% 3 3 - 352 296 19% 38 32 19% Individual Annuities 450 445 1% - - - 450 445 1% 45 45 - Bulk Annuities 98 32 206% - - - 98 32 206% 10 3 233% ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Sub-Total 1,040 933 11% 40 41 (2%) 1,080 974 11% 144 134 7% DWP Rebates 43 - - - - - 43 - - 4 - - ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Total UK Insurance 1,083 933 16% 40 41 (2%) 1,123 974 15% 148 134 10% Operations ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- European Insurance Operations : (1) Insurance Products 41 17 141% - - - 41 17 141% 4 2 100% ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Total European 41 17 141% - - - 41 17 141% 4 2 100% Insurance Operations ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Total UK & European 1,124 950 18% 40 41 (2%) 1,164 991 17% 152 136 12% Insurance Operations ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- US Insurance Operations : (11) Fixed Annuities 222 200 11% - - - 222 200 11% 22 20 10% Equity-Linked Indexed 71 72 (1%) - - - 71 72 (1%) 7 7 - Annuities Variable Annuities 466 561 (17%) - - - 466 561 (17%) 47 56 (16%) Life - - - 2 3 (33%) 2 3 (33%) 2 3 (33%) ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Sub-total Retail 759 833 (9%) 2 3 (33%) 761 836 (9%) 78 86 (9%) Guaranteed Investment ( 9) 6 (250%) - - - ( 9) 6 (250%) ( 1) 1 (200%) Contracts GIC - Medium Term Note ( 4) 28 (114%) - - - ( 4) 28 (114%) - 3 - ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Total US Insurance 746 867 (14%) 2 3 (33%) 748 870 (14%) 77 90 (14%) Operations ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Asian Insurance Operations : (1) China 2 1 100% 3 3 - 5 4 25% 3 3 - Hong Kong 55 58 (5%) 28 21 33% 83 79 5% 34 27 26% India (@26%) 1 1 - 6 4 50% 7 5 40% 6 4 50% Indonesia 11 9 22% 8 10 (20%) 19 19 - 9 11 (18%) Japan 2 2 - 2 13 (85%) 4 15 (73%) 2 13 (85%) Korea 14 4 250% 13 6 117% 27 10 170% 14 6 133% Malaysia 2 3 (33%) 16 19 (16%) 18 22 (18%) 16 20 (20%) Singapore 85 45 89% 17 14 21% 102 59 73% 26 18 44% Taiwan 10 9 11% 38 30 27% 48 39 23% 39 31 26% Other (5) 2 3 (33%) 15 14 7% 17 17 - 15 15 - ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Total Asian Insurance 184 134 37% 146 134 9% 330 268 23% 164 148 11% Operations ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Group Total 2,054 1,951 5% 188 178 6% 2,242 2,129 5% 393 373 5% ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- INVESTMENT OPERATIONS M&G (7) Asia Mutual Funds Hong Kong MPF Total Investment Products (8) Products Q4 2003 Q3 +/- Q4 2003 Q3 2003 +/- Q4 Q3 +/- Q4 Q3 +/- 2003 (%) (%) 2003 2003 (%) 2003 2003 (%) £m £m £m £m £m £m £m £m Opening FUM 23,193 22,331 4% 6,316 5,721 10% 186 165 13% 29,696 28,217 5% Gross inflows 772 1,008 (23%) 4,832 4,929 (2%) 16 17 (6%) 5,620 5,954 (6%) Less redemptions ( 604) ( 657) 8% ( 4,346) ( 4,547) 4% ( 3) ( 4) 25% ( 4,953)(5,208) 5% ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Net flows 168 351 (52%) 486 382 27% 13 13 - 667 746 (11%) Other movements - - - ( 38) ( 25) (52%) - - - ( 38) ( 25) (52%) Market and 831 511 63% ( 364) 238 (253%) ( 3) 8 (138%) 463 757 (39%) currency movements ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Net movement in 999 862 16% 84 595 (86%) 10 21 (52%) 1,092 1,478 (26%) FUM ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Closing FUM 24,192 23,193 4% 6,400 6,316 1% 196 186 5% 30,788 29,695 4% ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Notes to Schedules: (1) Insurance and investment new business for overseas operations has been calculated using average exchange rates. (3) Annual Equivalents, calculated as regular new business contributions + 10% single new business contributions, are subject to roundings. (4) Reflecting the expanded investment business new business analysis on Schedule 2, certain investment fund mandates previously classified from UK Corporate Pensions sales are now reported as M&G institutional funds under management. 2002 UK insurance sales now reflect this change in presentation. (5) In Asia, 'Other' insurance operations include Thailand, The Philippines and Vietnam. (7) Balance includes segregated pensions fund business, private finance flows and M&G South Africa institutional business. M&G institutional funds under management restated in Q2 2003 to include funds managed on behalf of the Prudential Staff Pension Scheme previously categorised as internal funds. (8) Mandatory Provident Fund product sales in Hong Kong are included at Prudential's 36% interest of the Hong Kong MPF operation. (11) Sales for overseas operations are converted to sterling using the year to date average exchange rate applicable at the time. The sterling results for individual quarters represent the difference between the year to date reported sterling results at successive quarters and will include foreign exchange movements from earlier periods. This information is provided by RNS The company news service from the London Stock Exchange

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