Insurer Prudential (LON:PRU) overcame upheaval in the UK pension market to post higher first-half profits and hike its dividend.
The Pru said it faced an unprecedented level of regulatory change in UK pensions following government moves to relax rules forcing people to put their pension pots into annuities.
The changes sparked lower sales of retail annuities by the group, which has a new chief executive following the departure of Tidjane Thiam.
But the Pru said it made up for it with a 25% rise in retail annual premium equivalent (APE) sales to £393bn.
It also completed two “attractively priced” bulk deals in the first half of the year, resulting in a 12% rise in total new business profit.
In asset management, the company’s M&G business made operating profit of £251mln, up 11%, reflecting higher average levels of funds under management.
In the US, the group’s Jackson life insurance division increasing IFRS operating profit by 11% to £834mln, which represented a record at the half-year stage
Success in capturing strong variable annuity inflows at attractive margins drove Jackson’s separate account asset base 11% higher to £85.9bn at the end of June.
In Asia, the Pru is targeting protection and savings business from the growing middle classes through agency force and bank partnerships. Its life and asset management businesses increased combined IFRS operating profit 17% to £632mln.
Life new business profit in the region rose 30% to £664mln, reflecting a 31% increase in APE sales.
Shares in the Pru rose 11.25p to 1,518p.
Chief executive Mike Wells said he believed the group’s strategy was correct. "Looking ahead, despite ongoing macro-economic uncertainties, we are confident that our proven strategy, strong execution and the quality of our people will continue to deliver great products and service to our 25 million customer,” he said.
Hargreaves Lansdown said the group’s positioning in growing economies remained a core attraction.
The broker’s Keith Bowman said: “The company’s targeting of the middle classes in Asia, the retiring US baby-boomers and the increased need for UK consumers to save for their own retirements all offer potential long term growth. For now, and supplemented by today’s 10% increase in the interim dividend payment, analyst consensus opinion continues to point towards a strong buy.”