ii view: Prudential bullish on double-digit growth objective

Full-year results to 31 December

• Annual Premium Equivalent (APE) sales up 7% to $6.66 billion (£5 billion)
• New business profit up 12% to $2.78 billion 
• Adjusted operating profit up 6% to $3.31 billion
• Second interim dividend of 18.89 US cents per share
• Total 2025 dividend payment up 15% to 26.6 US cents
• Capital cushion or free surplus ratio of 221%, down from 234% as of late December

Chief executive Anil Wadhwani said: 

"2025 was a strong year of consistent delivery for Prudential, with double-digit growth reflecting sustained momentum throughout the year. Structural demand for our products in Asia and Africa continued to rise, driven by the increasing protection, retirement and wealth needs of our customers. 

“Looking ahead, our focus remains firmly on high quality, sustainable growth, disciplined capital allocation and delivering long term shareholder value. We carry the momentum of 2025 into 2026 and are confident in our double-digit growth trajectory across our key metrics.”

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ii round-up:

Prudential (LSE:PRU) provides life and health insurance as well as asset management services to around 18 million customers across Asia and Africa.

A constituent of both the FTSE 100 and Hang Seng Composite indices, the financial services company operates across 20 markets including Greater China and India.

For a round-up of these latest results announced on 18 March, please click here. 

ii view:

Celebrating its 175th anniversary in 2023 and including 100 years of business in Asia, Prudential today sells to and serves customers via approximately 65,000 agents and over 200 banking partners. Geographically, Hong Kong, Greater China and Taiwan generated most sales in 2025 at 46%. That was followed by Singapore at 26%. Other growth markets including India and those in Africa at 13%, Malaysia 7%, Indonesia 6%, and the Eastspring asset management business the balance of 2%. 

Management focus includes powering the distribution of products using technology, widening health-related insurance options for customers and growing shareholder returns.  

For investors, elevated energy prices pressuring consumer incomes could see customers reducing savings and insurance outgoings. Exposure to Hong Kong, China and Taiwan is set against a backdrop of heightened geopolitical tensions between the West and China. A forecast price/earnings (PE) ratio above the three- and 10-year averages may suggest the shares are not obviously cheap, while a prospective dividend yield of around 2% at the Pru compares with estimates of over 6% at UK sellers Aviva (LSE:AV.), Legal & General Group (LSE:LGEN) and Standard Life (LSE:SDLF). 

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More favourably, a focus on shareholder returns is expected to include more than $7 billion of share buybacks between 2024 and 2027, with the latest 15% increase in the annual dividend exceeding City forecasts. A multi-channel, multi-market franchise is being pursued, and both economic and sales growth in targeted regions likely to outpace that of the West. Investment in technology, including AI to sift client data for potential new sales, continues. Demand for health insurance may also prove relatively defensive given the product’s requirement no matter the state of the economy.  

In all, and despite continuing risks, a focus on shareholder returns and a consensus analyst fair value estimate above £13.50 per share are likely to maintain long-term optimism.   

Positives: 

• Ongoing focus to improve operational performance
• Exposure to required health insurance across Asia and Africa

Negatives:

• China geopolitical tensions
• Potential currency headwinds 

The average rating of stock market analysts:

Buy