Prudential has signalled an intention to conduct more business direct with consumers, according to details of the life insurer's full year results.
The life insurance group – which now has operations in the UK, US and Asia – says a team of senior executives set up in May 2005 “with a brief to identify ambitions and business strategy to maximise massive sustainable growth” has concluded while greater concentration of retirement-based wealth is a major opportunity for Prudential, the firm needs to earn more money direct with consumers as well as through its links with financial advisers.
“We must complement our strong and import intermediary links by expanding the proportion of revenue derived from direct customers; and ensure that we build deep lifecycle relationships with our customers,” says the group ceo’s review of business in 2005.
At the same time, Prudential officials believe the business now has a well-diversified distribution for business, and points out the firm is “in a strong position to benefit as the IFA market changes over the next 18-24 months” and through its multi-tie deals.
Prudential launched a business development consultancy service targeted at intermediaries in 2005, which is designed to offer guidance on practice management and the transition from commission to fee-based business.
Such comments were delivered at the same time as information presented in the 2005 full year results this morning revealed the group has seen new business profit increase by 15% to £867m and its group margin rise 41%, and pre-tax profit is up 25% from almost £1.8bn to £2.2bn
This business growth, however, is down in part to stronger performance overseas, particularly as business levels more than doubled the US EEV from £368m to £755m.
In a statement by Prudential, Mark Turner, group ceo, says the UK insurance business increased the annual premium equivalent (APE) sales by 10% to £900m and offshore bond sales rose 15%.
But closer inspection of the figures reveals The European Embedded Value (EEV) of business conducted by the UK life insurance firm has fallen in the last year, from £683m in 2004 to £633m.
Egg, the internet bank, also saw its EEV fall from £61, to £44m while the operating profit fell from £72m in 2004 to £60m in 2005, albeit Prudential argues Egg’s experience in the consumer credit market has been “substantially better” than the market average”.
Speaking at PA360 North
Speaking at PA360 North
Latest data released
Helping people set realistic savings goals