No recommendation
No news or research item is a personal recommendation to deal. Hargreaves Lansdown may not share ShareCast's (powered by Digital Look) views.
(Sharecast News) - Prudential warned on Thursday that achieving its full-year new business profit growth target would be more challenging than previously expected, as regulatory changes continued to weigh on its Chinese operations.
At the group level, annual premium equivalent (APE) sales fell 6% to $1.6bn in the third quarter due to weaker sales volumes in mainland China, though improving new business margins helped drive a 1% increase in new business profit (NBP) to $709m.
Excluding mainland China, the Asia-focused insurer said NBP would have been up 13% year-on-year, supported by strong demand through its bancassurance distribution channel.
The company said regulatory changes governing bancassurance expenses in China had constrained sales, with the impact exacerbated by strong comparative figures from 2025.
As a result, it now expects NBP in mainland China to fall by 10% to 15% over the full year, with the recovery progressing more slowly than previously anticipated.
Elsewhere, Hong Kong delivered double-digit new business profit growth, while Malaysia and Thailand also performed strongly. Bancassurance new business profit outside mainland China grew by more than 20% in the quarter.
Meanwhile, funds under management or advice at its Eastspring asset management business fell to $285.7bn from $290.8bn at the end of June, despite $5.4bn in net inflows, reflecting adverse market movements and a reduction in its holding in ICICI Prudential Asset Management.
Chief executive Anil Wadhwani said: "Encouragingly, in both September and October, we have seen strong momentum in new business profit at a group level, including in our Chinese Mainland life operations, albeit that the delay in the rate of improvement in momentum in our Chinese Mainland life operations means that achievement of our group 2026 new business profit growth guidance is now more stretching than anticipated at the time of the half-year 2026 results."
Prudential had originally guided to double-digit growth in group NBP this year.
Nevertheless, the company said it remains focused on growing its four key financial metrics - APE sales, Eastspring FUMA, NBP and traditional embedded value - by double digits in 2026, as well as its financial objectives for 2027.
Prudential also confirmed it had repurchased $1bn of shares in the first nine months and remained on track to increase buybacks to $1.5bn by the end of 2026.
The stock was up 0.7% at 972.1p by 1019 GMT.
See latest RNS on Sharecast