Prudential PLC (LSE:PRU) said the reopening of China has boosted sales at the start of 2023 as it reported a rise in annual operating profit.
The Asia-focused insurer saw adjusted operating profit improve by 8% in the 12 months to December 31, 2022, to US$3.38bn, beating expectations of around US$3.34bn from a company-compiled forecast.
A second interim dividend of 13.04 cents per share was declared lifting the total dividend to 18.78 cents per share, up 9%.
In the results statement, Prudential chief executive Anil Wadhwani commented: “The removal of the bulk of COVID-19-related restrictions across the region and the progressive opening up of the Chinese mainland economy has meant that 2023 has started well with encouraging progress in year-on-year sales, with group-wide annual premium equivalent (APE) sales for the two months ended February 2023 up 15% over the prior year.”
He added: “In Hong Kong we have seen a gradual increase in cross-border traffic from the Chinese Mainland as travel restrictions are eased. Demand for savings products across the Hong Kong business is driving the increase in APE sales in the first two months of 2023.”
Prudential said the rise in operating profit in 2022 reflected a 6% increase from insurance and asset management business and a decline in central expenses of 26%.
APE sales increased by 5% to US$4.39bn with both agency and bancassurance channels delivering APE sales growth in the second half of 2022. But new business profit fell 14% to US$2,184mln with the impact of higher volumes being offset by higher interest rates and business mix effects.
The company said there are signs that COVID-19-related impacts in many of our markets have stabilised, albeit operating conditions may continue to be challenging given the volatile macroeconomic environment and increasing risks of inflation.
“We enter 2023 with a resilient balance sheet and strong capital position, which we believe will enable us to manage these uncertainties and capture the resulting opportunities that arise,” it added.