Pru UK new business profits up 15%

Prudential has reported UK new retail business profits of £257m, up 15% on last year.

Across the group, Prudential beat expectations to post operating profits of £1.94bn, up £367m from last year's £1.57bn and an increase of 24%.

Forecasters had been expecting a more modest 11% increase to £1.7bn  from restated figures the previous year.

In the UK, total retail and bulk annuity APE sales were £820m, up 13% from £723m in 2009, with retail new business profit of £257m compared to £223m in 2009.

Prudential says the increase reflects improved margins on with-profits bond sales where it has seen volumes 11% higher on improved demand and the strong annuity margins experienced in 2009 continuing into 2010.

Net inflows into Prudential's life businesses were £9.7bn in 2010, an increase from the net £7.2bn received in 2009.

M&G, Prudential's asset management arm, reported £8.9bn of net inflows over 2010 compared with £15.4bn in 2009.

The retail business achieved net inflows of £7.4bn while M&G's IFRS operating profit was £284m, up 19% compared to 2009.

Today's results are the first full-year set since Prudential's failure to land the Asian arm of US group AIG last year, which came after its major investors baulked at the £22.6bn asking price.

However, the insurer has stuck to its strategy of organic growth in Asia.It recently revealed its intention to double the 2009 value of new business profits there – which were £713m – by 2013.

Prudential's full year dividend payments will rise 4p per share, equivalent to an increase of 20%, with a final dividend of 17.24p per share. This brings the total dividend for the year to 23.85p per share (2009: 19.85p per share).

Markets have reacted well to the results. Shares were up 23.5p to 737.50p, an increase of 3.29%.