Prudential PLC (LSE:PRU) (LSE:PRU) reported a first-half loss of US$4.6bn as it took a massive US$7.5bn writedown in the value of US life insurance business Jackson ahead of its planned demerger next month.
Excluding Jackson, the FTSE 100 life insurer group said the rest of its now mostly Asia-focused business made underlying operating profit from continuing operations of US$1.6bn, up 19%.
This reflected insurance sales growth across all regions apart from Indonesia and Hong Kong, as well as improvements from its Eastspring asset management business.
An interim dividend of 5.37 cents per share was declared, flat compared to a year ago.
Prudential released its results mid-morning and the shares quickly rose 2% to 1,486.5p, not far off the three-year highs achieved earlier this year.
Analyst Nicholas Hyett at Hargreaves Lansdown said: “The writedown in Jackson’s valuation ahead of its demerger dominates reported numbers this half. However, it doesn’t affect any of the underlying fundamentals and we think these numbers show a thriving business underneath."
He said the continued growth in insurance sales in Asia and Africa were "unsurprising after a time of crisis when the importance of planning for an uncertain future have been driven home to consumers around the world. With wealth in these markets still growing steadily the group’s middle class customer base is growing. Meanwhile the premiums collected on these insurance contracts are being funnelled into Pru’s in-house asset manager."
With size being key to competitiveness in asset management, Hyett said growth together with improved investment results "should help Eastspring stem the flow of external investors leaving its funds making it a growth engine in its own right".