3rd Quarter Results

Prudential PLC 26 October 2005 Embargo: 7.00am Wednesday 26th October 2005 PRUDENTIAL PLC THIRD QUARTER 2005 NEW BUSINESS RESULTS AND GROUP UPDATE For the first nine months of the year: â€¢ Total Group Insurance sales of Â£10.8 billion, up 33 per cent on 2004 â€¢ Total Group Insurance APE sales of Â£1.6 billion, up 27 per cent on 2004 â€¢ Jackson National Life's (JNL) APE sales of Â£401 million, up 17 per cent on 2004 â€¢ APE sales at Prudential Corporation Asia of Â£508 million, up 27 per cent on 2004 â€¢ Prudential UK and Europe APE sales of Â£700 million, up 34 per cent on 2004 â€¢ M&G had record gross fund inflows of Â£5.6 billion, up 62 per cent on 2004 Group Update â€¢ Clear articulation of Group strategy built on maximising shareholder value through mainly organic growth in US, Asia and UK â€¢ Focus on becoming a leader across the three regions in retirement services, in addition to life insurance and fund management â€¢ JNL is a key part of our plans to achieve a leading position in retirement services in the US: increased remittances from JNL to Group â€¢ Asia has sufficient funding to exploit in full the growth opportunities in the region, while remaining on track to become cash positive in 2006 â€¢ We have three strong UK franchises, but there are opportunities for cost synergies and potential revenue benefits from close collaboration â€¢ Egg retained with important role in this broader UK strategy â€¢ Well placed in fund management globally to capitalise on increasing appetite for transparent investment products, access to more global products and the continuing rise of open architecture platforms â€¢ Capital and cash to fund organic growth over the medium term, within our current and developing balance sheet. Commenting, Mark Tucker, Group Chief Executive said: 'All our businesses are showing strong growth and these results are a clear demonstration of the momentum that the Group has built up. They confirm that our businesses are in robust health and the prospects are positive. 'JNL's total APE sales were up 17 per cent, and within that retail sales for the nine months were Â£308 million - that's up 14 per cent on 2004. Improved variable and fixed index annuity sales were partially offset by decreased fixed annuity sales. 'In Asia, we've followed a strong second quarter with a very good third quarter - a quarter that's up 32 per cent on the same period last year. Sales of more profitable regular premium products now represent 89 per cent of APE sales. 'In the UK, growth has been driven mainly by strong sales of unit-linked bonds and bulk annuities. Competition has intensified in some areas in the third quarter, particularly in protection and in elements of the individual annuity market. Despite this, we remain confident that we will achieve our forecast of 10 per cent APE growth in 2005. 'M&G, supported by excellent investment performance had record gross fund inflows for the nine months of Â£5.6 billion - an increase of 62 per cent on the same period last year. Net fund inflows increased 343 per cent to Â£2.7 billion for the year to date. 'Egg reported separately today and their results represent a solid performance at a time when the unsecured lending market remains highly competitive.' Group Update Mark Tucker also provided an update on the future direction of the Group. He said: 'The Group has undertaken a comprehensive review of retail financial services markets in all major geographies, not just Prudential home territories. 'We have one clear standard that we use to guide all of our strategy decisions - the choices we make and the actions we take must consistently generate sustainable value for our shareholders. And our actions must achieve the optimum balance between present and future growth and profitability. 'Taking a broader view has, in many areas, confirmed the existing strategies Prudential has been following as sound. However we see a need, looking to the future to target a broader spectrum of opportunity than just life insurance - important and profitable though we expect that sector to be for us.' JNL is a highly successful and well-positioned participant in a market in which we want to be powerful. We see the US as a very important part of the Group's plans to achieve a leading position in retirement services internationally. As 'Baby Boomers' retire and shift their focus from asset accumulation to income distribution, one of JNL's main aims will be to capture a proportion of these flows - it has all the attributes to succeed. With an emphasis on sales of low capital intensive variable annuity products, solid operating results and strong investment portfolio performance, JNL is capable of self-generating the capital necessary to support its future growth at our required returns and return a growing remittance to the centre. Asia has been the main engine for growth in the Group in recent years and we have no intention of restricting growth in Asia to a level lower than that which we consider commercially optimum and sustainable. We can meet our challenging growth targets and do so within our stated aim of turning cash positive from 2006. The strategy will continue to be to grow primarily by organic means in all markets, but with particular focus on China, Taiwan, Korea and India. To drive this forward, Mark Norbom, Chief Executive of Prudential Corporation Asia, recently announced a number of new roles and enhanced responsibilities across the region. In the UK, the Group has three very strong franchises to build on - M&G continues both to deliver top tier investment performance and accelerate profitability, Egg has demonstrated the power to build a large-scale 'sticky' customer base of over three million and a very powerful consumer brand, while our UK insurance operations continue to deliver against its growth and value targets. Although each of the businesses will continue to target growth in its own sector, we see opportunities for greater collaboration allowing us to capitalise on the strong positions we have in different areas of the market. We have decided to retain and develop Egg. The potential advantages that we can get from owning Egg make it clear that retaining it is the right decision. It fits in with our objective of generating more value for our customers and shareholders. There are four key reasons behind this decision. Egg has built a strong customer franchise with over 3 million younger, more affluent customers - and these customers are a good and very different complement to Prudential's multi-million UK customers. Second, is its brand. Next, Egg's direct distribution model has supported upwards of 20 per cent compound growth since 2000. In a world of increasing intermediation, we believe that maintaining a direct distribution capability remains very important. Finally, Egg also provides the expertise and infrastructure as our entry point into the highly profitable personal savings and loans market. The short-term payback and the lower capital-intensive lending and deposit products are also an important complement to our longer-term capital-intensive retirement offering in the UK. Cost benefit can be won through managing administration and IT infrastructure more closely and by seeking to coordinate our marketing efforts where this makes sense. Revenue opportunities are a potential prize as we work through how best to add value to our millions of Prudential customers by offering a wider range of retail financial services products, banking and loan products manufactured by Egg and extremely attractive medium to long-term savings products manufactured by M&G. We are in the process of a detailed review of how best to realise these synergies. We will be considering whether there is a financial and commercial case for bringing Egg fully into the Group through a share exchange or whether to retain the existing structure. No decision has been made as yet. Prudential has three excellent asset management businesses. We anticipate an increasing appetite for transparent investment products, access to more global products and a continuing rise in open architecture platforms plus a rapidly expanding role for cross-border sales off a common investment platform. As a result of our performance, brand and distinctive investment culture, we are exceptionally well-placed to capitalise on these factors. There are material synergies for us to act on. We have identified three main areas where there are material cost savings from working across the business units. These are capital management, risk management and in the Group's IT infrastructure. For example, work underway on a single global IT infrastructure should provide a saving of Â£20-25 million a year. Capital management is at the centre of the Group agenda. We have taken a very hard look at where our capital is deployed. Our performance and our efforts to improve capital efficiency, have yielded significant improvements over the last year. Over the medium term, we have the capital and cash to fund organic growth within our current and developing balance sheet. There are also further options to increase our capacity in the future through debt and alternative capital sources. Mark Tucker concluded: 'Prudential is a successful business and we will continue to build shareholder value. We're going to sustain the geographical spread that has stood Prudential in such good stead over the last decade. 'We'll continue to build market leading franchises in the US and Asia and build on our strong positions in the UK. We'll do that by organic growth and by building on our proven strengths and in particular we'll take advantage of the global 'retirement financing' opportunity and our strong life insurance and fund management businesses. 'Alongside our ambition to become a leading player in retirement services, we'll leverage our capabilities and assets in all related financial service markets where we are confident we have a basis for advantage.' Update on Group Capital and Cashflow Philip Broadley, Group Finance Director, also provided an update on Group capital and cashflow. He said: 'One of the benefits of the Group's present structure and operations is the diversification benefit we get from the spread of risks we've taken on. Using our internal capital model, our gross capital requirement of Â£3.7 billion is reduced by over Â£1 billion, or about 30 per cent because of the benefits of diversification across the Group. 'As at 31 December 2004, as previously reported, Prudential had a surplus of Â£845 million on the Financial Conglomerates' Directive basis, which we expect to be broadly maintained at the end of 2005.' Taiwan Philip Broadley also gave a summary of the Group's in-force insurance liabilities in Taiwan. Prudential's in-force business in Taiwan includes traditional whole of life policies where the premium rates have been set by the regulator at different points in time for the industry as a whole. Premium rates were set to give a guaranteed minimum sum assured on death and a guaranteed surrender value on early surrender based on prevailing interest rates at the time of policy issue. Premium rates also included allowances for mortality and expenses. Guarantees have fallen over time as interest rates have reduced from a high of 8 per cent to levels of around 2 per cent today. The current low level of bond rates available in Taiwan gives rise to a negative spread against the majority of these policies. The current cash costs of funding in-force negative spread in Taiwan is around Â£30 million a year. With planned growth, Taiwan is expected to become cash positive during 2010 even if rates were to stay unchanged. In line with our strategy to develop the Taiwan business away from traditional business, the current mix of new business in Taiwan is 78 per cent unit-linked and protection. Interest rates have little effect on new business profitability and a 100 basis points fall in interest rates would reduce the new business margin in Taiwan by less than two percentage points. Interest rate risk in Taiwan is allowed for within our economic capital modelling on a stochastic basis. This capital is held in central funds and is not required as local capital in Taiwan. For regulatory capital purposes the FSA has agreed that we should modify the calculation so that the capital requirement in Taiwan under the Financial Conglomerates' Directive can be determined on an economic capital basis that reflects the nature of our in-force liabilities in Taiwan. In achieved profits reporting at the 2005 half year we assumed that Taiwanese bond rates, currently at around 2 per cent, will trend to a long-term assumption of 5.5 per cent by 31 December 2012. Allowance is made for the mix of assets in the fund, our future investment strategy and the market value depreciation of bonds already held by the fund as yields rise to the assumed long-term yields. At the half year this resulted in an assumed Fund Earned Rate that trends from 2.3 per cent to 5.8 per cent by 31 December 2013. There is a slight decline in the Fund Earned Rate in the first few years as the depreciation of long bonds exceeds the corresponding income pick up as rates rise. Taiwan's achieved profits embedded value at the end of 2004 was Â£153 million with sensitivities to bond rates as follows: â€¢a 100 basis point fall in starting bond rates would reduce embedded value by Â£84 million â€¢a 100 basis point increase in starting bond rates would increase embedded value by Â£70 million â€¢a 100 basis point parallel decrease in bond rates with an equivalent adjustment to the risk discount rate would reduce embedded value by Â£204 million â€¢a 100 basis point parallel increase in bond rates with an equivalent adjustment to the risk discount rate would increase embedded value by Â£148 million Prudential restated its 2004 year end achieved profits results to reflect European Embedded Value (EEV) principles on 2 June 2005. In these restatements the capital allocated to Asia was increased in line with the increase in economic capital and resulted in a charge of Â£269 million to embedded value. Prudential will adopt EEV as its Supplementary Reporting basis for its 2005 year end reporting. EEV embedded value has been established using a trended basis to longer-term rates with a prudent allowance for capital on a stochastic basis for the possible scenarios where lower interest rates would prevail. Taiwan remains a key growth market for Prudential and was the largest of our markets in Asia in the nine months to 30 September 2005 in terms of APE sales. Commentary on Nine Months' Results UK and Europe Insurance Operations Prudential UK and Europe APE sales in the first nine months of 2005 of Â£700 million were up 34 per cent on the same period of 2004, driven mainly by strong sales of bulk annuities and unit-linked bonds. This increase in sales includes the acquisition of the in-force pension annuities book from Phoenix Life & Pensions ('PLP') in June 2005. Excluding this transaction, APE sales increased by 7 per cent. Bulk annuity sales in the first nine months of 2005 of Â£193 million were up Â£168 million on the prior year. Excluding the PLP transaction, growth in bulk annuity sales remained strong (up 92 per cent), reflecting Prudential's leading position in this market. Although sales of individual annuities through intermediaries slowed due to the current competitive pricing environment to which Prudential chose not to respond, sales through the Partnerships and Direct to Consumer channels have largely been unaffected. Total individual annuity sales increased by 4 per cent on last year to Â£163 million, demonstrating the benefits of Prudential's diversified distribution capability. APE sales of unit-linked bonds increased 69 per cent to Â£49 million, reflecting continued progress being made by Prudential in the IFA unit-linked bond market. Corporate pension sales have remained challenging with APE sales of Â£117 million in the first nine months of 2005 down 13 per cent on the same period last year. However, a number of larger mandates have been secured for the latter part of 2005, including the group stakeholder pension schemes for Royal & SunAlliance and Goodyear Dunlop. APE sales for Prudential's European operations increased 88 per cent to Â£15 million, reflecting growing bond sales through new and existing distributors. Both PruFund and PruHealth celebrated their first anniversaries in the third quarter. PruFund's initial investors received a total increase in their policy values of 8.4 per cent during the year (after tax and fund charges) reflecting the continued superior investment performance of Prudential's life fund. This strong investment performance was recognised in the Cazalet 2005 with-profits report where Prudential's rating increased from 8/10 to 9/10. PruHealth had a good first year with sales growing more than 30 per cent per month in 2005. At the end of the third quarter of 2005, PruHealth had over 200 group clients and covered approximately 13,250 individuals. Premium income for the first nine months of 2005 was Â£5 million, of which Â£2 million was written in the third quarter. Prudential's new lifetime mortgage product, Prudential Property Value Release Plan, has been open for quotations and illustrations since the end of August 2005, and launched for new business earlier this month. This innovative product which gives customers greater flexibility and control over the timing of when they draw down funds, thereby reducing total interest charges over the lifetime of the loan, has been well received by advisers and customers. In September 2005, Bankhall announced that Prudential had been appointed to its multi-tie panel to provide annuities, bonds, pensions, and protection products. Bankhall is one of the UK's largest distributors of financial advice with over 7,500 financial advisers. This followed Prudential's appointment in July to Sesame's regulated multi-tie panel. Prudential was selected as a provider of guaranteed and with-profit annuities, investments, protection, and individual pensions and the panel went live in September. Prudential has been appointed to all but one of the major multi-tie networks announced to date and is strongly positioned to increase its share in the depolarised marketplace as this develops over the next couple of years. Competition in some parts of the UK market remained challenging in the third quarter, in particular for protection and annuities where pricing has intensified. Despite this, Prudential UK remains confident that it will achieve overall growth in APE sales of 10 per cent in 2005. M&G M&G delivered record gross fund inflows of Â£5.6 billion in the first nine months of 2005, an increase of 62 per cent on the same period last year. Net fund inflows increased 343 per cent to Â£2.7 billion year to date. Gross retail fund inflows were a record Â£2.7 billion, more than double the inflows in the same period last year, on the back of strong retail fund performance across all asset classes. Sales of equity funds were particularly strong, reflecting the fact that in equities M&G now has 72 per cent of funds in the top quartile over three years and 84 per cent of funds beating the sector average. M&G's UK retail business delivered gross fund inflows of Â£1.1 billion, already surpassing the whole of 2004. M&G International, which sells funds in Germany, Austria, Italy, Luxembourg and Switzerland, continued to grow very strongly, with gross fund inflows of Â£697 million, compared to Â£229 million for the first nine months of 2004. The South African business generated gross fund inflows of Â£855 million, up from Â£225 million for the same period last year. Net retail fund inflows across M&G's retail businesses totalled Â£899 million, a 484 per cent increase compared to last year. Gross institutional fund inflows increased by 31 per cent in the first nine months of this year, totalling Â£2.9 billion. Net fund inflows were Â£1.8 billion, compared to Â£463 million last year. M&G's Collateralised Debt Obligations (CDO) business continued to develop strongly with net inflows of Â£521 million in the year to date. Institutional funds under management in the areas of segregated fixed income, pooled funds and property have also continued to grow during the year. Jackson National Life Jackson National Life (JNL) has delivered a strong result in the first nine months with total APE sales of Â£401 million up 17 per cent on the same period in 2004, as a result of increased variable annuity, fixed index annuity, and institutional product sales. Total retail APE sales for the first nine months of Â£308 million were up 14 per cent on 2004 as improved variable and fixed index annuity sales were partially offset by decreased fixed annuity sales during the period. For the first nine months of 2005, variable annuity APE sales of Â£187 million were up 27 per cent on the prior year, following on from record sales in 2004. Total sales of variable annuities exceeded $1 billion in each of the first three quarters of 2005, with sales in each consecutive quarter surpassing the last. This result was achieved against a decline in the variable annuity market of 5 per cent for the first half of 2005(1), and reflects JNL's continued success in product innovation and distribution. JNL was ranked as the 12th largest provider of variable annuities in the US market during the first half of 2005, compared with 15th during the same period last year. Its variable annuity assets grew 11 per cent during the first half of the year, compared with total industry growth of 1 per cent1. The rate of take-up of the fixed account option continued to decline at 22 per cent during the first nine months, compared with 28 per cent during the same period in 2004, primarily as a result of continued low interest rates and customers' desire for greater equity exposure. APE sales of fixed annuities were Â£64 million, down 24 per cent on the first nine months of 2004, reflecting continued low interest rates and a relatively flat yield curve in the US, which has made rates on short-term certificates of deposit more attractive to customers. Fixed index annuity APE sales of Â£46 million were up 59 per cent on the first nine months of 2004, reflecting customers' increasing preference for fixed products with the potential for higher returns linked to equity index performance. APE sales of life products of Â£11 million for the first nine months of 2005, were up 10 per cent on the prior year. APE sales of institutional products for the first nine months of the year were Â£94 million, up 31 per cent on the same period in 2004, reflecting several attractive issuance opportunities in the first half of 2005. Curian Capital, which provides innovative fee-based separately managed accounts, had deposits of Â£315 million for the first nine months of the year, up 7 per cent over the same period in 2004. Currently in its third year of operation, Curian has surpassed $1.5 billion of funds under management. Jackson National has delivered impressive sales growth in the first nine months of 2005. The customer friendly annuity products, low-cost structure, relationship-based distribution model, and award-winning customer service have positioned the company well to capitalise on growth opportunities in the US market going forward. Prudential Corporation Asia Prudential's Asian operations have continued the strong growth shown at the half year with total APE sales in the first nine months of Â£508 million, up 27 per cent on the same period last year. For the third quarter of 2005, sales on an APE basis of Â£197 million represent an increase of 32 per cent on the same three month period in 2004 and 15 per cent growth over the second quarter of 2005. Sales of more profitable regular premium products continue to grow and now represent 89 per cent of APE sales. Prudential's Korean life operation has sustained its strong performance recorded at the half year with third quarter APE sales of Â£31 million, an increase of 107 per cent on the same quarter last year. APE sales for the first nine months of 2005 were up 90 per cent on prior year. This increase clearly demonstrates the flexibility of its multi-channel distribution model, with in-house financial consultants and general agents currently the primary distribution channels, supported by contributions from direct marketing and bancassurance. Prudential's Indian life insurance joint venture with ICICI remains firmly in position as the number one private sector life insurance company. Prudential's 26 per cent share of the joint venture's APE sales for the first nine months of 2005 was Â£41 million, up 64 per cent on the same period in 2004. The business continues to extend its geographic reach in India with 74 branches to date and has grown its tied agency force by 72 per cent over prior year. The life insurance joint venture with CITIC in China continues its rapid growth with a 17 per cent increase in third quarter APE sales compared to the second quarter, and a 46 per cent increase compared to the third quarter last year. APE sales for the first nine months of 2005 were Â£16 million, up 33 per cent on the same period of 2004. Progress continues to be made in establishing CITIC Prudential as the leading foreign joint venture life insurer in terms of geographic coverage, with six new city licences added during 2005 bringing the total to 10. In Indonesia, APE sales for the first nine months of Â£33 million represent a 57 per cent increase on the same period of 2004. Third quarter sales of Â£13 million were 18 per cent ahead of the second quarter. Third quarter APE sales in Taiwan increased 50 per cent over the second quarter. This was in part due to the successful launch of a new unit linked retirement product in the previous quarter. For the first nine months of 2005, APE sales were up 13 per cent on prior year to Â£120 million. Unit-linked sales in Taiwan continue to grow and now represent 65 per cent of total APE sales in Taiwan on a year-to-date basis. Prudential's Singapore life operation delivered APE sales growth of 21 per cent compared to both the second quarter and to the same nine month period last year, driven in part by the launch of six new investment linked funds in 2005. In Hong Kong, growth in APE sales was 7 per cent compared with the same nine month period last year demonstrating good performance in a challenging market. Third quarter sales of the more profitable regular premium products have continued to grow quarter on quarter over the nine month period due to growth from the bancassurance channels. In Malaysia, Prudential's life business continues to benefit from its market leading agent productivity with total APE sales for the first nine months of 2005 of Â£46 million, up 18 per cent on the same nine month period last year. Year to date aggregate APE sales from the remaining four markets of the Philippines, Thailand, Vietnam and Japan are down 9 per cent compared with the same nine month period last year. In Vietnam, sales for the first nine months of 2005 were down 20 per cent from the same period last year as industry growth continues to be slower than in 2004. Total investment product funds under management are Â£9.3 billion, up 22 per cent on 2004. Earlier this year ICICI, Prudential's joint venture partner in the Prudential ICICI Asset Management Company, agreed to purchase an additional 6 per cent share of Prudential ICICI Asset Management Company. The transaction was completed on 26th August, bringing ICICI Group's share to 51 per cent, while Prudential now holds 49 per cent. As a result, Prudential no longer consolidates Prudential ICICI Asset Management Company as a subsidiary. Net investment product inflows of Â£0.9 billion are up 249 per cent on 2004. Strong net inflows in Japan of Â£836 million and Korea of Â£473 million were partially offset by net outflows in Taiwan of Â£570 million where the bond fund market remains unsettled and of Â£150 million in third party institutional mandates. We are confident of our ability to grow strongly and profitably in Asia. The opportunities in our newer markets, coupled with the strength of our larger operations, should enable us to maintain good sales growth for the remainder of 2005. Egg Egg has separately announced its third quarter results today. Dealing Disclosure Requirements Under the provisions of Rule 8.3 of the City Code on Takeovers and Mergers (the 'City Code'), any person who, alone or acting together with any other person(s) pursuant to an agreement or understanding (whether formal or informal) to acquire or control relevant securities of Prudential or Egg, owns or controls, or becomes the owner or controller, directly or indirectly, of one per cent. or more of any class of securities of Prudential or Egg is required to disclose, by not later than 12.00 noon (London time) on the London business day following the date of the relevant transaction, dealings in such securities of that company (or in any option in respect of, or derivative referenced to, any such securities) during the period to the date on which the offer becomes or is declared unconditional as to acceptances or lapses or is otherwise withdrawn. Under the provisions of Rule 8.1 of the City Code, all dealings in relevant securities of Prudential or Egg by Prudential or Egg, or by any of their respective 'associates' (within the meaning of the City Code) must also be disclosed. If you are in any doubt as to the application of Rule 8 to you, please contact an independent financial adviser authorised under the Financial Services and Markets Act 2000, consult the Panel's website at www.takeoverpanel.org.uk or contact the Panel on telephone number +44 20 7638 0129; fax +44 20 7236 7013. - ENDS - Enquiries: Media Investors / analysts Jon Bunn 020 7548 3559 James Matthews 020 7548 3561 William Baldwin-Charles 020 7548 3719 Marina Novis 020 7548 3511 Joanne Doyle 020 7548 3708 Notes to Editors 1. All comparisons above and in the narrative below are quoted at constant exchange rates (CER). See Notes to Editors for further details. 2. 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 YTD 2005 YTD 2004 +/-(%) YTD 2005 YTD 2004 +/-(%) Â£m Â£m Â£m Â£m UK & 700 521 34% 700 521 34% Europe US 401 346 16% 401 342 17% Asia 508 394 29% 508 401 27% ------ ------ ---- ------ ------ ---- Total 1,609 1,261 28% 1,609 1,264 27% ------ ------ ---- ------ ------ ---- Gross Inflows Actual exchange rates Constant exchange rates YTD 2005 YTD 2004 +/-(%) YTD 2005 YTD 2004 +/-(%) Â£m Â£m Â£m Â£m M&G 5,600 3,451 62% 5,600 3,451 62% Asia 14,380 13,888 4% 14,380 14,472 (1%) ------ ------ ---- ------ ------ ---- Total 19,980 17,339 15% 19,980 17,923 11% ------ ------ ---- ------ ------ ---- Total Insurance and Investment New Business Actual exchange rates Constant exchange rates YTD 2005 YTD 2004 +/-(%) YTD 2005 YTD 2004 +/-(%) Â£m Â£m Â£m Â£m Insurance 10,800 8,150 33% 10,800 8,124 33% Investment 19,980 17,339 15% 19,980 17,923 11% ------ ------ ---- ------ ------ ---- Total 30,780 25,489 21% 30,780 26,047 18% ------ ------ ---- ------ ------ ---- 3. There will be a conference call today for wire services at 7.30am (BST) hosted by Mark Tucker, Group Chief Executive and Philip Broadley, Group Finance Director. Dial in telephone number: +44 (0)20 8609 0205. Passcode: 155439# 4. A press conference will take place at 11.30am (BST) at Governor's House, Laurence Pountney Hill, London, EC4R 0HH. This will be hosted by Mark Tucker, Group Chief Executive, and Philip Broadley, Group Finance Director. Please call the press office on +44 (0)20 7548 3708 if you wish to attend. 5. A presentation to analysts will take place at 9.30am (BST) at Governor's House, Laurence Pountney Hill, London, EC4R 0HH. An audio cast of the presentation and the presentation slides will be available on the Group's website, www.prudential.co.uk. 6. There will be a conference call for investors and analysts at 2.30pm (BST) hosted by Mark Tucker, Group Chief Executive and Philip Broadley, Group Finance Director. Please call from the UK +44 (0)800 358 2705 and from the US +1 866 793 4279. Pin number 487687#. A recording of this call will be available for replay for one week by dialling: +44 (0)20 8609 0289 from the UK or +1 866 676 5865 from the US. The conference reference number is 129574. 7. High resolution photographs are available to the media free of charge at www.newscast.co.uk (+44 (0) 207 608 1000). 8. An interview with Mark Tucker, Group Chief Executive, (in video/ audio/text) will be available on www.cantos.comand www.prudential.co.ukfrom 7.05am on 26th October 2005. 9. Annual premium equivalent (APE) sales comprise regular premium sales plus one-tenth of single premium insurance sales. 10. Total number of Prudential plc shares in issue as at 14th October 2005 was 2,383,761,711 11. Financial Calendar 2005-2006: Q4 New Business Figures 25th January 2006 Full Year 2005 Results 16th March 2006 Q1 New Business Figures 20th April 2006 AGM 18th May 2006 Interim Results 28th July 2006 12. In addition to the financial statements provided with this press release, additional financial schedules are available on the Group's website at www.prudential.co.uk *Prudential plc, a company incorporated and with its principal place of business in the United Kingdom, and its affiliated companies constitute one of the world's leading financial services groups. It provides insurance and financial services directly and through its subsidiaries and affiliates throughout the world. It has been in existence for over 150 years and has Â£187 billion in assets under management, (as at 31 December 2004). Prudential plc is not affiliated in any manner with Prudential Financial, Inc, a company whose principal place of business is in the United States of America. 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 1A - Constant Exchange Rates PRUDENTIAL PLC - NEW BUSINESS - NINE MONTHS 2005 TOTAL INSURANCE AND INVESTMENT NEW BUSINESS UK & Europe US (1a) Asia (1a) Total 2005 Q3 2004 Q3 +/- 2005 Q3 2004 Q3 +/- (%) 2005 Q3 2004 Q3 +/- (%) 2005 Q3 2004 Q3 +/- (%) YTD YTD (%) YTD YTD YTD YTD YTD YTD Â£m Â£m Â£m Â£m Â£m Â£m Â£m Â£m Total 5,848 3,956 48% 3,919 3,340 17% 1,033 828 25% 10,800 8,124 33% Insurance Products Total 5,600 3,451 62% - - 0% 14,380 14,472 (1%) 19,980 17,923 11% Investment Products - Gross Inflows(2) ------- ------- ------ ------- ------- ------- ------- ------- ------- ------- ------- ------- Group 11,448 7,407 55% 3,919 3,340 17% 15,413 15,300 1% 30,780 26,047 18% Total ------- ------- ------ ------- ------- ------ ------- ------- ------ ------- ------- ------ INSURANCE OPERATIONS Single Regular Total Annual Equivalents (3) 2005 Q3 2004 Q3 +/- (%) 2005 Q3 2004 Q3 +/- (%) 2005 Q3 2004 Q3 +/- (%) 2005 Q3 2004 Q3 +/- (%) YTD YTD YTD YTD YTD YTD YTD YTD Â£m Â£m Â£m Â£m Â£m Â£m Â£m Â£m UK Insurance Operations : Direct to Customer: Individual 10 7 43% 6 6 0% 16 13 23% 7 7 0% Pensions Life - With 10 9 11% 1 1 0% 11 10 10% 2 2 0% Profit Bond Life - Other - - - 1 1 0% 1 1 0% 1 1 0% Individual 543 464 17% - - - 543 464 17% 54 46 17% Annuities ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- Sub-Total 563 480 17% 8 8 0% 571 488 17% 64 56 14% DWP Rebates 234 252 (7%) - - - 234 252 (7%) 23 25 (8%) ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- Total 797 732 9% 8 8 0% 805 740 9% 88 81 9% ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- Business to Business: Corporate 160 108 48% 92 103 (11%) 252 211 19% 108 114 (5%) Pensions Individual 151 162 (7%) - - - 151 162 (7%) 15 16 (6%) Annuities Bulk 413 253 63% - - - 413 253 63% 41 25 64% Annuities ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- Total 724 523 38% 92 103 (11%) 816 626 30% 164 155 6% ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- Intermediated Distribution: Individual 50 45 11% 14 16 (13%) 64 61 5% 19 21 (10%) Pensions Corporate 32 127 (75%) 6 7 (14%) 38 134 (72%) 9 20 (55%) Pensions Life - With 119 188 (37%) - - - 119 188 (37%) 12 19 (37%) Profit Bond Life - Other 682 520 31% - - - 682 520 31% 68 52 31% Bond Life - Other 4 - - 5 3 67% 9 3 200% 5 3 67% Individual 786 854 (8%) - - - 786 854 (8%) 79 85 (7%) Annuities ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- Sub-Total 1,673 1,734 (4%) 25 26 (4%) 1,698 1,760 (4%) 192 199 (4%) DWP Rebates 80 92 (13%) - - - 80 92 (13%) 8 9 (11%) ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- Total 1,753 1,826 (4%) 25 26 (4%) 1,778 1,852 (4%) 200 209 (4%) ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- Partnerships: Life - With - 3 - - - - - 3 - - 0 - Profit Bond Life - Other 628 573 10% 3 1 200% 631 574 10% 66 58 14% Individual 145 88 65% - - - 145 88 65% 15 9 67% Annuities Bulk 1,519 - - - - - 1,519 - - 152 - - Annuities ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- Total 2,292 664 245% 3 1 200% 2,295 665 245% 232 67 246% ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- Total : Individual 60 52 15% 20 22 (9%) 80 74 8% 26 27 (4%) Pensions Corporate 192 235 (18%) 98 110 (11%) 290 345 (16%) 117 134 (13%) Pensions Life - With 129 200 (36%) 1 1 0% 130 201 (35%) 14 21 (33%) Profit Bond Life - Other 682 520 31% - - - 682 520 31% 68 52 31% Bond Life - Other 632 573 10% 9 5 80% 641 578 11% 72 62 16% Individual 1,625 1,568 4% - - - 1,625 1,568 4% 163 157 4% Annuities Bulk 1,932 253 664% - - 1,932 253 664% 193 25 672% Annuities ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- Sub-Total 5,252 3,401 54% 128 138 (7%) 5,380 3,539 52% 653 478 37% DWP Rebates 314 344 (9%) - - - 314 344 (9%) 31 34 (9%) ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- Total UK 5,566 3,745 49% 128 138 (7%) 5,694 3,883 47% 685 513 34% Insurance Operations ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- European Insurance Operations :(1a) Insurance 154 72 114% - 1 - 154 73 111% 15 8 88% Products ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- Total 154 72 114% - 1 - 154 73 111% 15 8 88% European Insurance Operations ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- Total UK & 5,720 3,817 50% 128 139 (8%) 5,848 3,956 48% 700 521 34% European Insurance Operations ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- US Insurance Operations :(1a) Fixed 639 838 (24%) - - - 639 838 (24%) 64 84 (24%) Annuities Fixed Index 460 290 59% - - - 460 290 59% 46 29 59% Annuities Variable 1,870 1,471 27% - - - 1,870 1,471 27% 187 147 27% Annuities Life (9) 8 10 (20%) 10 9 11% 18 19 (5%) 11 10 10% ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- Sub-total 2,977 2,609 14% 10 9 11% 2,987 2,618 14% 308 270 14% Retail Guaranteed 306 105 191% - - - 306 105 191% 31 11 182% Investment Contracts GIC - Medium 626 617 1% - - - 626 617 1% 63 62 2% Term Note ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- Total US 3,909 3,331 17% 10 9 11% 3,919 3,340 17% 401 342 17% Insurance Operations ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- Asian Insurance Operations :(1a) China 10 6 67% 15 11 36% 25 17 47% 16 12 33% Hong Kong 201 160 26% 55 54 2% 256 214 20% 75 70 7% India (@26%)(6) 2 4 (50%) 41 25 64% 43 29 48% 41 25 64% Indonesia 36 24 50% 29 18 61% 65 42 55% 33 20 65% Japan 19 12 58% 3 5 (40%) 22 17 29% 5 6 (17%) Korea 12 34 (65%) 90 45 100% 102 79 29% 91 48 90% Malaysia 8 5 60% 45 39 15% 53 44 20% 46 39 18% Singapore 194 155 25% 38 31 23% 232 186 25% 57 47 21% Taiwan 95 67 42% 110 99 11% 205 166 23% 120 106 13% Other (4) 6 7 14% 24 28 (14%) 30 35 (12%) 25 28 (11%) ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- Total Asian 583 474 23% 450 354 27% 1,033 828 25% 508 401 27% Insurance Operations ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- Group Total 10,212 7,622 34% 588 502 17% 10,800 8,124 33% 1,609 1,264 27% ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- Schedule 1B - Actual Exchange Rates PRUDENTIAL PLC - NEW BUSINESS - NINE MONTHS 2005 TOTAL INSURANCE AND INVESTMENT NEW BUSINESS UK & Europe US (1b) Asia (1b) Total 2005 Q3 2004 Q3 +/- 2005 Q3 2004 Q3 +/- (%) 2005 Q3 2004 Q3 +/- 2005 Q3 2004 Q3 +/- YTD YTD (%) YTD YTD YTD YTD (%) YTD YTD (%) Â£m Â£m Â£m Â£m Â£m Â£m Â£m Â£m Total 5,848 3,955 48% 3,919 3,379 16% 1,033 816 27% 10,800 8,150 33% Insurance Products Total 5,600 3,451 62% - - 0% 14,380 13,888 4% 19,980 17,339 15% Investment Products - Gross Inflows(2) ------- ------- ------ ------- ------- ------- ------- ------- ------ ------- ------- ------ Group 11,448 7,406 55% 3,919 3,379 16% 15,413 14,704 5% 30,780 25,489 21% Total ------- ------- ------ ------- ------- ------ ------- ------- ------ ------- ------- ------ INSURANCE OPERATIONS Single Regular Total Annual Equivalents (3) 2005 Q3 2004 Q3 +/- (%) 2005 Q3 2004 Q3 +/- (%) 2005 Q3 2004 Q3 +/- (%) 2005 Q3 2004 Q3 +/- (%) YTD YTD YTD YTD YTD YTD YTD YTD Â£m Â£m Â£m Â£m Â£m Â£m Â£m Â£m UK Insurance Operations : Direct to Customer: Individual 10 7 43% 6 6 0% 16 13 23% 7 7 0% Pensions Life - With 10 9 11% 1 1 0% 11 10 10% 2 2 0% Profit Bond Life - Other - - - 1 1 0% 1 1 0% 1 1 0% Individual 543 464 17% - - - 543 464 17% 54 46 17% Annuities ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- Sub-Total 563 480 17% 8 8 0% 571 488 17% 64 56 14% DWP Rebates 234 252 (7%) - - - 234 252 (7%) 23 25 (8%) ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- Total 797 732 9% 8 8 0% 805 740 9% 88 81 9% ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- Business to Business: Corporate 160 108 48% 92 103 (11%) 252 211 19% 108 114 (5%) Pensions Individual 151 162 (7%) - - - 151 162 (7%) 15 16 (6%) Annuities Bulk 413 253 63% - - - 413 253 63% 41 25 64% Annuities ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- Total 724 523 38% 92 103 (11%) 816 626 30% 164 155 6% ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- Intermediated Distribution: Individual 50 45 11% 14 16 (13%) 64 61 5% 19 21 (10%) Pensions Corporate 32 127 (75%) 6 7 (14%) 38 134 (72%) 9 20 (55%) Pensions Life - With 119 188 (37%) - - - 119 188 (37%) 12 19 (37%) Profit Bond Life - Other 682 520 31% - - - 682 520 31% 68 52 31% Bond Life - Other 4 - - 5 3 67% 9 3 200% 5 3 67% Individual 786 854 (8%) - - - 786 854 (8%) 79 85 (7%) Annuities ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- Sub-Total 1,673 1,734 (4%) 25 26 (4%) 1,698 1,760 (4%) 192 199 (4%) DWP Rebates 80 92 (13%) - - - 80 92 (13%) 8 9 (11%) ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- Total 1,753 1,826 (4%) 25 26 (4%) 1,778 1,852 (4%) 200 209 (4%) ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- Partnerships: Life - With - 3 - - - - - 3 - - 0 - Profit Bond Life - Other 628 573 10% 3 1 200% 631 574 10% 66 58 14% Individual 145 88 65% - - - 145 88 65% 15 9 67% Annuities Bulk 1,519 - - - - - 1,519 - - 152 - - Annuities ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- Total 2,292 664 245% 3 1 200% 2,295 665 245% 232 67 246% ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- Total : Individual 60 52 15% 20 22 (9%) 80 74 8% 26 27 (4%) Pensions Corporate 192 235 (18%) 98 110 (11%) 290 345 (16%) 117 134 (13%) Pensions Life - With 129 200 (36%) 1 1 0% 130 201 (35%) 14 21 (33%) Profit Bond Life - Other 682 520 31% - - - 682 520 31% 68 52 31% Bond Life - Other 632 573 10% 9 5 80% 641 578 11% 72 62 16% Individual 1,625 1,568 4% - - - 1,625 1,568 4% 163 157 4% Annuities Bulk 1,932 253 664% - - 1,932 253 664% 193 25 672% Annuities ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- Sub-Total 5,252 3,401 54% 128 138 (7%) 5,380 3,539 52% 653 478 37% DWP Rebates 314 344 (9%) - - - 314 344 (9%) 31 34 (9%) ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- Total UK 5,566 3,745 49% 128 138 (7%) 5,694 3,883 47% 685 513 34% Insurance Operations ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- European Insurance Operations :(1b) Insurance 154 71 117% - 1 - 154 72 114% 15 8 88% Products ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- Total 154 71 117% - 1 - 154 72 114% 15 8 88% European Insurance Operations ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- Total UK & 5,720 3,816 50% 128 139 (8%) 5,848 3,955 48% 700 521 34% European Insurance Operations ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- US Insurance Operations :(1b) Fixed 639 848 (25%) - - - 639 848 (25%) 64 85 (25%) Annuities Fixed Index 460 293 57% - - - 460 293 57% 46 29 59% Annuities Variable 1,870 1,489 26% - - - 1,870 1,489 26% 187 149 26% Annuities Life (9) 8 10 (20%) 10 9 11% 18 19 (5%) 11 10 10% ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- Sub-total 2,977 2,640 13% 10 9 11% 2,987 2,649 13% 308 273 13% Retail Guaranteed 306 106 189% - - - 306 106 189% 31 11 182% Investment Contracts GIC - Medium 626 624 0% - - - 626 624 0% 63 62 2% Term Note ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- Total US 3,909 3,370 16% 10 9 11% 3,919 3,379 16% 401 346 16% Insurance Operations ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- Asian Insurance Operations : (1b) China 10 6 67% 15 11 36% 25 17 47% 16 12 33% Hong Kong 201 162 24% 55 55 0% 256 217 18% 75 71 6% India (@26%)(6) 2 4 (50%) 41 24 71% 43 28 54% 41 24 71% Indonesia 36 27 33% 29 20 45% 65 47 38% 33 23 43% Japan 19 12 58% 3 5 (40%) 22 17 29% 5 6 (17%) Korea 12 30 (60%) 90 40 125% 102 70 46% 91 43 112% Malaysia 8 5 60% 45 39 15% 53 44 20% 46 40 15% Singapore 194 153 27% 38 31 23% 232 184 26% 57 46 24% Taiwan 95 64 48% 110 95 16% 205 159 29% 120 101 19% Other (4) 6 6 0% 24 27 (11%) 30 33 (9%) 25 28 (11%) ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- Total Asian 583 469 24% 450 347 30% 1,033 816 27% 508 394 29% Insurance Operations ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- Group Total 10,212 7,655 33% 588 495 19% 10,800 8,150 33% 1,609 1,261 28% ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- Schedule 2 PRUDENTIAL PLC - NEW BUSINESS - NINE MONTHS 2005 INVESTMENT OPERATIONS Opening Gross Redemptions Net Other Market & Net Closing FUM inflows inflows movements currency movement FUM movements in FUM 2005 M&G Retail 11,613 2,714 ( 1,815) 899 - 1,214 2,113 13,726 Institutional 17,092 2,886 ( 1,050) 1,836 ( 156) 1,262 2,942 20,034 (5) ------- ------- ------- ------- ------- ------- ------- ------- Total M&G 28,705 5,600 ( 2,865) 2,735 ( 156) 2,476 5,055 33,760 ------- ------- ------- ------- ------- ------- ------- ------- Asia India (10) 2,144 8,497 (8,357) 140 (1,186) 314 (732) 1,412 Taiwan 1,797 1,836 ( 2,406) ( 570) - 143 ( 427) 1,370 Korea 1,427 2,239 ( 1,766) 473 ( 21) 275 727 2,154 Japan 1,638 1,138 ( 302) 836 - 68 904 2,542 Other Mutual 583 611 ( 431) 180 - 55 235 818 Fund Operations ------- ------- ------- ------- ------- ------- ------- ------- Total Asian 7,589 14,321 (13,262) 1,059 (1,207) 855 707 8,296 Mutual Fund Operations ------- ------- ------- ------- ------- ------- ------- ------- Hong Kong MPF 244 59 ( 22) 37 - 30 67 311 Products (@36%) (6) Third Party 705 - ( 150) ( 150) - 114 ( 36) 669 Institutional Mandates ------- ------- ------- ------- ------- ------- ------- ------- Total Asia 949 59 ( 172) ( 113) - 144 31 980 Other ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- Total Asian 8,538 14,380 (13,434) 946 (1,207) 999 738 9,276 Investment Operations ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- Total 37,243 19,980 (16,299) 3,681 (1,363) 3,475 5,793 43,036 Investment Products ------- ------- ------- ------- ------- ------- ------- ------- Opening Gross Redemptions Net Other Market & Net Closing FUM inflows inflows movements currency movement FUM movements in FUM 2004 M&G Retail 10,144 1,242 ( 1,088) 154 - 431 585 10,729 Institutional 14,048 2,209 ( 1,746) 463 22 614 1,099 15,147 (5) ------- ------- ------- ------- ------- ------- ------- ------- Total M&G 24,192 3,451 ( 2,834) 617 22 1,045 1,684 25,876 ------- ------- ------- ------- ------- ------- ------- ------- Asia India 2,049 6,519 (6,683) (164) (19) ( 13) ( 196) 1,853 Taiwan 2,666 4,609 ( 5,426) ( 817) - ( 43) ( 860) 1,806 Korea 933 1,625 ( 1,179) 446 ( 33) 12 425 1,358 Japan 411 648 ( 81) 567 - 1 568 Other Mutual 341 318 ( 129) 189 - 15 204 545 Fund Operations ------- ------- ------- ------- ------- ------- ------- ------- Total Asian 6,400 13,719 (13,498) 221 ( 52) ( 28) 141 6,541 Mutual Fund Operations ------- ------- ------- ------- ------- ------- ------- ------- Hong Kong MPF 196 57 ( 21) 36 - ( 1) 35 231 Products (@36%) (6) Third Party 552 112 ( 140) ( 28) - 33 5 557 Institutional Mandates ------- ------- ------- ------- ------- ------- ------- ------- Total Asia 748 169 ( 161) 8 - 32 40 788 Other ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- Total Asian 7,148 13,888 ( 13,659) 229 ( 52) 4 181 7,329 Investment Operations ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- Total 31,340 17,339 (16,493) 846 ( 30) 1,049 1,865 33,205 Investment Products ------- ------- ------- ------- ------- ------- ------- ------- Opening Gross Redemptions Net Other Market & Net Closing FUM inflows inflows movements currency movement FUM movements in FUM 2005 movement relative to 2004 M&G Retail 14% 119% (67%) 484% - 182% 261% 28% Institutional(5) 22% 31% 40% 297% (809%) 106% 168% 32% ------- ------- ------- ------- ------- ------- ------- ------- Total M&G 19% 62% (1%) 343% (809%) 137% 200% 0% ------- ------- ------- ------- ------- ------- ------- ------- Asia 2,503 India 5% 30% (25%) 185% (6142%) 2,515% (273%) 0% Taiwan (33%) (60%) 56% 30% - 433% 50% 0% Korea 53% 38% (50%) 6% 36% 2192% 71% 1% Japan 299% 76% (273%) 47% - 6700% 59% 160% Other Mutual 71% 92% (234%) (5%) - 267% 15% 50% Fund Operations ------- ------- ------- ------- ------- ------- ------- ------- Total Asian 19% 4% 2% 379% (2221%) 3154% 401% 27% Mutual Fund Operations ------- ------- ------- ------- ------- ------- ------- ------- Hong Kong MPF 24% 4% (5%) 3% - 3100% 91% 35% Products (@36%) (6) Third Party 28% 0% (7%) (436%) - 245% (820%) 20% Institutional Mandates ------- ------- ------- ------- ------- ------- ------- ------- Total Asia 27% (65%) (7%) (1513%) - 350% (23%) 24% Other ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- Total Asian 19% 4% 2% 313% (2221%) 24875% 308% 27% Investment Operations ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- Total 19% 15% 1% 335% (4443%) 231% 211% 30% Investment Products ------- ------- ------- ------- ------- ------- ------- ------- US (7) 2005 Q3 2004 Q3 +/-(%) YTD YTD Â£m Curian Capital External Funds 854 441 94% under Administration ------- ------- --------- Schedule 3 PRUDENTIAL PLC - NEW BUSINESS - QUARTER 3 2005 VERSUS QUARTER 3 2004 INSURANCE OPERATIONS Single Regular Total Annual Equivalents (3) Q3 2005 Q3 2004 +/- (%) Q3 2005 Q3 2004 +/- (%) Q3 2005 Q3 2004 +/- (%) Q3 Q3 2004 +/- (%) 2005 Â£m Â£m Â£m Â£m Â£m Â£m Â£m Â£m UK Insurance Operations : Direct to Customer: Individual 2 1 100% 2 2 0% 4 3 33% 2 2 0% Pensions Life - With 4 3 33% - - - 4 3 33% 0 0 0% Profit Bond Life - Other - - - - - - - - - - - - Individual 178 159 12% - - - 178 159 12% 18 16 13% Annuities ------- ------- ------- ------- ------- ------- ------- ------ ------- ------ ------ ------- Sub-Total 184 163 13% 2 2 0% 186 165 13% 20 18 11% DWP Rebates - - - - - - - - - - - - ------- ------- ------- ------- ------- ------- ------- ------ ------- ------ ------ ------- Total 184 163 13% 2 2 0% 186 165 13% 20 18 11% ------- ------- ------- ------- ------- ------- ------- ------ ------- ------ ------ ------- Business to Business: Corporate 46 31 48% 25 28 (11%) 71 59 20% 30 31 (3%) Pensions Individual 54 68 (21%) - - - 54 68 (21%) 5 7 (29%) Annuities Bulk 93 43 116% - - - 93 43 116% 9 4 125% Annuities ------- ------- ------- ------- ------- ------- ------- ------ ------- ------ ------ ------- Total 193 142 36% 25 28 (11%) 218 170 28% 44 42 5% ------- ------- ------- ------- ------- ------- ------- ------- ------- ------ ------ ------- Intermediated Distribution: Individual 11 12 (8%) 5 5 0% 16 17 (6%) 6 6 0% Pensions Corporate 9 10 (10%) 2 2 0% 11 12 (8%) 3 3 0% Pensions Life - With 44 55 (20%) - - - 44 55 (20%) 4 6 (33%) Profit Bond Life - Other 209 206 1% - - - 209 206 1% 21 21 0% Bond Life - Other 1 - - 2 1 100% 3 1 200% 2 1 100% Individual 228 309 (26%) - - - 228 309 (26%) 23 31 (26%) Annuities ------- ------- ------- ------- ------- ------- ------- ------ ------- ------ ------ ------- Sub-Total 502 592 (15%) 9 8 13% 511 600 (15%) 59 67 (12%) DWP Rebates - - - - - - - - 0% - - - ------- ------- ------- ------- ------- ------- ------- ------ ------- ------ ------ ------- Total 502 592 (15%) 9 8 13% 511 600 (15%) 59 67 (12%) ------- ------- ------- ------- ------- ------- ------- ------ ------- ------ ------ ------- Partnerships: Life - With - 1 - - - - - 1 - - 0 - Profit Bond Life - Other 203 234 (13%) 2 1 100% 205 235 (13%) 22 24 (8%) Individual 52 40 30% - - - 52 40 30% 5 4 25% Annuities Bulk 44 - - - - - 44 - - 4 - - Annuities ------- ------- ------- ------- ------- ------- ------- ------ ------- ------ ------ ------- Total 299 275 9% 2 1 100% 301 276 9% 32 29 10% ------- ------- ------- ------- ------- ------- ------- ------ ------- ------ ------ ------- Total : Individual 13 13 0% 7 7 0% 20 20 0% 8 8 0% Pensions Corporate 55 41 34% 27 30 (10%) 82 71 15% 33 34 (3%) Pensions Life - With 48 59 (19%) - - - 48 59 (19%) 5 6 (17%) Profit Bond Life - Other 209 206 1% - - - 209 206 1% 21 21 0% Bond Life - Other 204 234 (13%) 4 2 100% 208 236 (12%) 24 25 (4%) Individual 512 576 (11%) - - - 512 576 (11%) 51 58 (12%) Annuities Bulk 137 43 219% - - - 137 43 219% 14 4 250% Annuities ------- ------- ------- ------- ------- ------- ------- ------ ------- ------ ------ ------- Sub-Total 1,178 1,172 1% 38 39 (3%) 1,216 1,211 0% 156 156 0% DWP Rebates - - - - - - - - - - - - ------- ------- ------- ------- ------- ------- ------- ------ ------- ------ ------ ------- Total UK 1,178 1,172 1% 38 39 (3%) 1,216 1,211 0% 156 156 0% Insurance Operations ------- ------- ------- ------- ------- ------- ------- ------ ------- ------ ------ ------- European Insurance Operations :) Insurance 34 35 (3%) - 1 - 34 36 (6%) 3 5 (40%) Products ------- ------- ------- ------- ------- ------- ------- ------ ------- ------ ------ ------- Total 34 35 (3%) - 1 - 34 36 (6%) 3 5 (40%) European Insurance Operations ------- ------- ------- ------- ------- ------- ------- ------ ------- ------ ------ ------- ------- ------- ------- ------- ------- ------- ------- ------ ------- ------ ------ ------- Total UK & 1,212 1,207 0% 38 40 (5%) 1,250 1,247 0% 159 161 (1%) European Insurance Operations ------- ------- ------- ------- ------- ------- ------- ------ ------- ------ ------ ------- US Insurance 0% Operations :(8) Fixed 229 275 (17%) - - - 229 275 (17%) 23 28 (18%) Annuities Fixed Index 164 136 21% - - - 164 136 21% 16 14 14% Annuities Variable 686 483 42% - - - 686 483 42% 69 48 44% Annuities Life (9) 2 6 (67%) 4 4 0% 6 10 (40%) 4 5 (20%) ------- ------- ------- ------- ------- ------- ------- ------ ------- ------ ------- ------- Sub-total 1,081 900 20% 4 4 0% 1,085 904 20% 112 94 19% Retail Guaranteed 119 75 59% - - - 119 75 59% 12 7 71% Investment Contracts GIC - Medium 10 55 (82%) - - - 10 55 (82%) 1 6 (83%) Term Note ------- ------- - ------- ------ ------- ------- ------ ------- ------ ------- ------- Total US 1,210 1,030 17% 4 4 0% 1,214 1,034 17% 125 107 17% Insurance Operations ------- ------- ------- ------- ------ ------- ------- ------ ------- ------ ------- ------- Asian Insurance Operations : China 5 1 400% 6 5 20% 11 6 83% 7 5 40% Hong Kong 54 53 2% 20 19 5% 74 72 3% 25 24 4% India (@26%)(6) 1 1 0% 14 7 100% 15 8 88% 14 7 100% Indonesia 8 6 33% 12 6 100% 20 12 67% 13 7 86% Japan 8 5 60% 1 2 (50%) 9 7 29% 2 3 (33%) Korea 2 3 (33%) 31 13 138% 33 16 106% 31 13 138% Malaysia 2 2 0% 17 18 (6%) 19 20 (5%) 17 18 (6%) Singapore 77 57 35% 15 11 36% 92 68 35% 23 17 35% Taiwan 23 34 (32%) 55 38 45% 78 72 8% 57 41 39% Other (4) 3 2 50% 8 10 (20%) 11 12 (8%) 8 10 (20%) ------- ------- ------- ------- ------ ------- ------- ------ ------- ------ ------- ------- Total Asian 183 164 12% 179 129 39% 362 293 24% 197 145 36% Insurance Operations ------- ------- ------- ------- ------ ------- ------- ------ ------- ------ ------- ------- ------- ------- ------- ------- ------ ------- ------- ------ ------- ------ ------- ------- Group Total 2,605 2,401 8% 221 173 28% 2,826 2,574 10% 481 413 16% ------- ------- ------- ------- ------ ------- ------- ------ ------- ------ ------- ------- INVESTMENT OPERATIONS M&G (5) Asia Mutual Funds Asia Other Total Investment Products Q3 2005 Q3 2004 +/- (%) Q3 2005 Q3 2004 +/- (%) Q3 2005 Q3 2004 +/- (%) Q3 2005 Q3 2004 +/- (%) Â£m Â£m Â£m Â£m Â£m Â£m Â£m Â£m Opening FUM 31,171 24,442 28% 9,388 6,876 37% 900 765 18% 41,459 32,083 29% Gross 2,021 1,275 59% 4,938 4,176 18% 20 16 25% 6,980 5,467 28% inflows Less ( 966) ( 568) (70%) ( 4,554) ( 4,608) (1%) ( 9) ( 5) (80%) ( 5,529)( 5,180) (7%) redemp tions -------- --------- --------- --------- --------- --------- --------- --------- -------- -------- ------- --------- Net flows 1,055 707 49% 385 ( 431) 189% 11 12 (8%) 1,451 287 406% Other ( 35) 63 (156%) ( 1,161) ( 13) (8831%) - - - ( 1,196) 50 (2492%) move ments Market and 1,569 663 137% ( 316) 110 (387%) 69 12 475% 1,322 785 68% currency movements -------- --------- --------- --------- --------- --------- --------- --------- -------- -------- ------- --------- Net 2,589 1,434 81% (1,093) ( 335) (226%) 80 23 248% 1,577 1,122 41% move ment in FUM -------- --------- --------- --------- --------- --------- --------- --------- -------- -------- ------- --------- Closing FUM 33,760 25,876 30% 8,296 6,541 27% 980 788 24% 43,036 33,205 30% -------- --------- --------- --------- --------- --------- --------- --------- -------- -------- ------- --------- Schedule 4 PRUDENTIAL PLC - NEW BUSINESS - QUARTER 3 2005 VERSUS QUARTER 3 2004 INSURANCE OPERATIONS Single Regular Total Annual Equivalents (3) Q3 2005 Q2 2005 +/- (%) Q3 2005 Q2 2005 +/- (%) Q3 2005 Q2 2005 +/- (%) Q3 2005 Q2 2005 +/- (%) Â£m Â£m Â£m Â£m Â£m Â£m Â£m Â£m UK Insurance Operations : Direct to Customer: Individual 2 4 (50%) 2 2 0% 4 6 (33%) 2 2 0% Pensions Life - With 4 4 0% - - - 4 4 0% 0 0 0% Profit Bond Individual 178 198 (10%) - - - 178 198 (10%) 18 20 (10%) Annuities ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- Sub-Total 184 206 (11%) 2 2 0% 186 208 (11%) 20 23 (13%) DWP Rebates - - - - - - - - 0% - - - ------- ------- ------- ------- ------- ------- ------ ------- ------- ------- ------- ------- Total 184 206 (11%) 2 2 0% 186 208 (11%) 20 23 (13%) ------- ------- ------- ------- ------- ------- ------ ------- ------- ------- ------- ------- Business to Business: Corporate 46 58 (21%) 25 36 (31%) 71 94 (24%) 30 42 (29%) Pensions Individual 54 48 13% - - - 54 48 13% 5 5 0% Annuities Bulk 93 106 (12%) - - - 93 106 (12%) 9 11 (18%) Annuities ------- ------- ------- ------- ------- ------- ------ ------- ------- ------- ------- ------- Total 193 212 (9%) 25 36 (31%) 218 248 (12%) 44 57 (23%) ------- ------- ------- ------- ------- ------- ------ ------- ------- ------- ------- ------- Intermediated Distribution: Individual 11 18 (39%) 5 5 0% 16 23 (30%) 6 7 (14%) Pensions Corporate 9 13 (31%) 2 2 0% 11 15 (27%) 3 3 0% Pensions Life - With 44 42 5% - - - 44 42 5% 4 4 0% Profit Bond Life - Other 209 247 (15%) - - - 209 247 (15%) 21 25 (16%) Bond Life - Other 1 3 (67%) 2 1 100% 3 4 (25%) 2 1 100% Individual 228 288 (21%) - - - 228 288 (21%) 23 29 (21%) Annuities ------- ------- ------- ------- ------- ------- ------ ------- ------- ------- ------- ------- Sub-Total 502 611 (18%) 9 8 13% 511 619 (17%) 59 69 (14%) DWP Rebates - - - - - - - - - - - - ------- ------- ------- ------- ------- ------- ------ ------- ------- ------- ------- ------- Total 502 611 (18%) 9 8 13% 511 619 (17%) 59 69 (14%) ------- ------- ------- ------- ------- ------- ------ ------- ------- ------- ------- ------- Partnerships: Life - With - - - - - - - - - - - - Profit Bond Life - Other 203 228 (11%) 2 - - 205 228 (10%) 22 23 (4%) Individual 52 50 4% - - - 52 50 4% 5 5 0% Annuities Bulk 44 1,450 (97%) - - - 44 1,450 (97%) 4 145 (97%) Annuities ------- ------- ------- ------- ------- ------- ------ ------- ------- ------- ------- ------- Total 299 1,728 (83%) 2 - - 301 1,728 (83%) 32 173 (82%) ------- ------- ------- ------- ------- ------- ------ ------- ------- ------- ------- ------- Total : Individual 13 22 (41%) 7 7 0% 20 29 (31%) 8 9 (11%) Pensions Corporate 55 71 (23%) 27 38 (29%) 82 109 (25%) 33 45 (27%) Pensions Life - With 48 46 4% - - - 48 46 4% 5 5 0% Profit Bond Life - Other 209 247 (15%) - - - 209 247 (15%) 21 25 (16%) Bond Life - Other 204 231 (12%) 4 1 300% 208 232 (10%) 24 24 0% Individual 512 584 (12%) - - - 512 584 (12%) 51 58 (12%) Annuities Bulk 137 1,556 (91%) - - - 137 1,556 (91%) 14 156 (91%) Annuities ------- ------- ------- ------- ------- ------- ------ ------- ------- ------- ------- ------- Sub-Total 1,178 2,757 (57%) 38 46 (17%) 1,216 2,803 (57%) 156 322 (52%) DWP Rebates - - - - - - - - - - - - ------- ------- ------- ------- ------- ------- ------ ------- ------- ------- ------- ------- Total UK 1,178 2,757 (57%) 38 46 (17%) 1,216 2,803 (57%) 156 322 (52%) Insurance Operations ------- ------- ------- ------- ------- ------- ------ ------- ------- ------- ------- ------- European Insurance Operations :(8) Insurance 34 81 (58%) - - - 34 81 (58%) 3 8 (63%) Products ------- ------- ------- ------- ------- ------- ------ ------- ------- ------- ------- ------- Total 34 81 (58%) - - - 34 81 (58%) 3 8 (63%) European Insurance Operations ------- ------- ------- ------- ------- ------- ------ ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------ ------- ------- ------- ------- ------- Total UK & 1,212 2,838 (57%) 38 46 (17%) 1,250 2,884 (57%) 159 330 (52%) European Insurance Operations ------- ------- ------- ------- ------- ------- ------ ------- ------- ------- ------- ------- US Insurance Operations :(8) Fixed 229 245 (7%) - - - 229 245 (7%) 23 25 (8%) Annuities Fixed Index 164 169 (3%) - - - 164 169 (3%) 16 17 (6%) Annuities Variable 686 637 8% - - - 686 637 8% 69 64 8% Annuities Life (9) 2 2 0% 4 3 33% 6 5 20% 4 3 33% ------- ------- ------- ------- ------- ------- ------ ------- ------- ------- ------- ------- Sub-total 1,081 1,053 3% 4 3 33% 1,085 1,056 3% 112 108 4% Retail Guaranteed 119 137 (13%) - - - 119 137 (13%) 12 14 (14%) Investment Contracts GIC - Medium 10 256 (96%) - - - 10 256 (96%) 1 26 (96%) Term Note ------- ------- - ------- ------- ------- ------ ------- ------- ------- ------- ------- Total US 1,210 1,446 (16%) 4 3 33% 1,214 1,449 (16%) 125 148 (16%) Insurance Operations ------- ------- ------- ------- ------- ------- ------ ------- ------- ------- ------- ------- Asian Insurance Operations :(8) China 5 4 25% 6 5 20% 11 9 22% 7 5 40% Hong Kong 54 95 (43%) 20 18 11% 74 113 (35%) 25 28 (11%) India (@26%)(6) 1 - - 14 9 56% 15 9 67% 14 9 56% Indonesia 8 12 (33%) 12 10 20% 20 22 (9%) 13 11 18% Japan 8 6 33% 1 1 0% 9 7 29% 2 2 0% Korea 2 6 (67%) 31 32 (3%) 33 38 (13%) 31 33 (6%) Malaysia 2 4 (50%) 17 16 6% 19 20 (5%) 17 16 6% Singapore 77 72 7% 15 12 25% 92 84 10% 23 19 21% Taiwan 23 48 (52%) 55 33 67% 78 81 (4%) 57 38 50% Other (4) 3 2 50% 8 8 0% 11 10 10% 8 8 0% ------- ------- ------- ------- ------- ------- ------ ------- ------- ------- ------- ------- Total Asian 183 249 (27%) 179 144 24% 362 393 (8%) 197 169 17% Insurance Operations ------- ------- ------- ------- ------- ------- ------ ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------ ------- ------- ------- ------- ------- Group Total 2,605 4,533 (43%) 221 193 15% 2,826 4,726 (40%) 481 646 (26%) ------- ------- ------- ------- ------- ------- ------ ------- ------- ------- ------- ------- INVESTMENT OPERATIONS M&G (5) Asia Mutual Funds Asia Other Total Investment Products Q3 2005 Q2 2005 +/- (%) Q3 2005 Q2 2005 +/- (%) Q3 2005 Q2 2005 +/- (%) Q3 2005 Q2 2005 +/- (%) Â£m Â£m Â£m Â£m Â£m Â£m Â£m Â£m Opening FUM 31,171 30,061 4% 9,388 7,835 20% 900 973 (8%) 41,549 38,868 7% Gross 2,021 1,487 36% 4,938 4,766 4% 20 20 0% 6,980 6,273 11% inflows Less ( 966) ( 1,067) 9% ( 4,554) ( 4,289) (6%) ( 9) ( 157) 94% ( 5,529) ( 5,513) 0% redemp tions -------- --------- ------- --------- --------- --------- ------- --------- ------- ---------- --------- ------ Net flows 1,055 420 151% 385 477 (19%) 11 ( 137) 108% 1,451 760 91% Other ( 35) ( 190) 82% ( 1,161) ( 6) (19250%) - - - ( 1,196) ( 196)(510%) movements Market and 1,569 879 78% ( 316) 1,082 (129%) 69 64 8% 1,322 2,026 (35%) currency movements -------- --------- ------- --------- --------- --------- ------- --------- ------- ---------- --------- ------ Net 2,589 1,109 133% (1,093) 1,554 (170%) 80 ( 73) 210% 1,577 2,590 (39%) move ment in FUM -------- --------- ------- --------- --------- --------- ------- --------- ------- ---------- --------- ------ Closing FUM 33,760 31,170 8% 8,296 9,388 (12%) 980 900 9% 43,036 41,459 4% -------- --------- ------- --------- --------- --------- ------- --------- ------- ---------- --------- ------ Notes to Schedules : (1a) Insurance and investment new business for overseas operations has been calculated using constant exchange rates. The applicable rate for Jackson National Life is 1.84 A comparison between the results at actual exchange rates and at constant exchange rates is given in the press release. (1b) Insurance and investment new business for overseas operations has been calculated using average exchange rates. The applicable rate for Jackson National Life is 1.84 (2004: 1.82). (2) Represents cash received from sale of investment products. (3) Annual Equivalents, calculated as regular new business contributions plus 10% single new business contributions, are subject to roundings. (4) In Asia, 'Other' insurance operations include Thailand, the Philippines and Vietnam. (5) Balance includes segregated and pooled pension funds, private finance assets and other institutional clients. Other movements reflect the net flows arising from the cash component of a tactical asset allocation fund managed by PPM South Africa. (6) New business in India is included at Prudential's 26% interest in the India life operation. Mandatory Provident Fund (MPF) product sales in Hong Kong are included at Prudential's 36% interest in the Hong Kong MPF operation. (7) Balance sheet figures have been calculated at the closing exchange rate. The 2004 balance is shown on a constant exchange rate. (8) Sales are converted 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 (9) US Life sales for 2004 restated to be consistent with the presentation of Full Year 2004 results. (10) On 26 August, Prudential's joint venture partner in the Prudential ICICI Asset Management Company purchased an additional 6% share ownership. As a result, Prudential no longer consolidates the company as a subsidiary. 2004 results are reported at 100%. END -------------------------- (1) VARDS This information is provided by RNS The company news service from the London Stock Exchange

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