Prudential flags inflation risks in South Asia even as quarterly new business profit rises
Prudential’s First-Quarter Performance and Inflation Concerns
By Kumar Tanishk
April 29 (Reuters) - Insurer Prudential Plc reported a nearly 10% rise in first-quarter new business profit on Wednesday, while warning that energy-driven inflation poses risks to its smaller South Asian businesses and could dampen consumer sentiment.
Quarterly Financial Results
The London and Hong Kong dual-listed insurer said its new business profit on a traditional embedded value (TEV) basis was $686 million for the quarter ended March 31, compared with $625 million a year earlier on a constant-exchange rate.
Regional Performance Highlights
Hong Kong
New business profit in Hong Kong, its largest profit contributor in 2025, saw double-digit growth during the quarter, driven by expansion in both agency channels and bancassurance, where insurance products are distributed through bank partnerships.
Indonesia and Malaysia
The Indonesian segment also performed modestly as its bancassurance channel recorded double-digit growth, while the Malaysian segment benefited from optimised product portfolio margins.
Outlook and Strategic Focus
"We remain confident in delivering double-digit growth across our key financial metrics in 2026 and achieving our 2027 financial objectives," Prudential CEO Anil Wadhwani said.
Inflation and Geopolitical Risks
Prudential, however, said it is closely monitoring geopolitical tensions, cautioning that inflationary pressures may influence consumer sentiment and buying patterns across ASEAN nations in the future.
"We think the second-order effects from higher energy costs could begin to show up in late 2Q25, particularly if oil prices remain elevated long enough to erode the strategic reserves of the more exposed ASEAN markets and push up the inflation significantly," said Kenny Lim Yong Hui, analyst, UOB Kay Hian.
Mainland China and Asset Management
CITIC Prudential Life
The insurer's mainland China joint venture, CITIC Prudential Life, delivered robust growth in new business profit, driven by sustained sales momentum, even as margins moderated due to a tilt toward participating products.
"The demand has been driven by wealth inflows from mainland Chinese clients and new migrants to Hong Kong seeking higher‑yielding, U.S. dollar‑denominated products amid persistently low interest rates onshore," Hui said.
Eastspring Asset Management
Eastspring, the company's asset management arm, reported funds under management of $268.9 billion at the end of the first quarter, down from $277.7 billion at the end of 2025.
(Reporting by Kumar Tanishk in Bengaluru; Editing by Jonathan Ananda and Sherry Jacob-Phillips)
