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Prudential’s new chief executive, Anil Wadhwani, says he will “do things differently” at the FTSE 100 insurer, investing in fast-growing markets in Asia and Africa and prioritizing dividends .
This is the first time Wadhwani has spoken publicly about his plans for the company. Wadhwani took over the group in February, which has undergone a tumultuous restructuring and divested of its US and European businesses.
His comments came as Prudential reported its first-half results on Wednesday. Profit from new business, a key measure of expected earnings from new product sales, rose 39% to $1.5 billion, slightly ahead of analysts’ expectations.
After the end of Covid-19 restrictions, mainland tourists can travel to Hong Kong, where the number surged 218% to 670 million US dollars. But Prudential said sales in mainland China fell 16% to $171 million due to lower sales and “unfavorable economic conditions.”
Shares in Prudential were little changed at HK$98.2 in Hong Kong.
Wadhwani is under pressure to grow at Prudential as the company’s rationale for spinning off its UK and US operations is to focus on fast-growing Asian markets. The insurer said it was “highly optimistic about the country’s medium- to long-term growth potential” despite slow economic growth.
The insurer declared an interim dividend of 6.26 cents per share, up from 5.74 cents a year ago, and said adjusted operating profit rose 6% in constant currency to $1.5 billion.
Prudential Group is the largest insurance company in the UK by market capitalization. Its history can be traced back to 1848. It was jointly listed in London and Hong Kong for the first time. It is headquartered in the UK and retains its UK domicile. Wadhwani is the company’s first CEO based in Asia.
The group, with a market capitalization of £27bn, has shifted its focus to Asia, focusing on mainland China and other Asian markets, with a smaller presence in Africa. The company said there are “huge opportunities” to grow its franchise in India.
But the shift has raised questions about the future of its London headquarters, with activist shareholder Third Point also putting pressure on the company to change its UK domicile.
The strategic shift comes at an awkward time as pandemic restrictions prevent mainland Chinese tourists from entering Hong Kong, a significant source of life insurance sales for the group. With borders reopening earlier this year, analysts expect a rebound in sales to help the group’s fortunes.
Prudential said new business profit rose in Indonesia and Malaysia, but fell 20% in Singapore.
Wadhwani faced scandal just three months into his tenure, with Prudential chief financial officer James Turner resigning following an investigation into his conduct.
Prudential said it had to do with “recent hiring” and that Turner’s conduct “fell short” of its standards, without giving details.
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