pru201111086k.htm
SECURITIES AND EXCHANGE COMMISSION
 
 
Washington, D.C. 20549
 
 
FORM 6-K
 
 
REPORT OF FOREIGN PRIVATE ISSUER
 
 
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
 
 
For the month of November, 2011
 
 
PRUDENTIAL PUBLIC LIMITED COMPANY
 
 
(Translation of registrant's name into English)
 
 
LAURENCE POUNTNEY HILL,
LONDON, EC4R 0HH, ENGLAND
(Address of principal executive offices)
 
 
 
Indicate by check mark whether the registrant files or will file annual reports
under cover Form 20-F or Form 40-F.
 
Form 20-F X           Form 40-F
 
 
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
 
Yes              No X
 
If "Yes" is marked, indicate below the file number assigned to the registrant
in connection with Rule 12g3-2(b): 82-


 
 
 
 
 
Enclosures:   Prudential plc - 3rd Quarter Results
 
 
 
 
 

 
NEWS RELEASE
 
 
PRUDENTIAL PLC
GROUP COMMUNICATIONS
12 ARTHUR STREET
LONDON EC4R 9AQ
TEL 020 7220 7588
FAX 020 7548 3725
www.prudential.co.uk
 
 
PRUDENTIAL PLC THIRD QUARTER 2011 INTERIM MANAGEMENT STATEMENT
 
·  
PRUDENTIAL DELIVERS ANOTHER STRONG QUARTER WITH BOTH NEW BUSINESS PROFITS AND SALES GROWTH

·  
ASIA YEAR TO DATE NEW BUSINESS PROFIT UP 16 PER CENT TO £719 MILLION AND 20 PER CENT EXC. INDIA LED BY KEY MARKETS OF HONG KONG, INDONESIA, MALAYSIA AND SINGAPORE

·  
US YEAR TO DATE NEW BUSINESS PROFIT UP 17 PER CENT TO £622 MILLION - GROWTH ACHIEVED WHILE MAINTAINING FINANCIAL DISCIPLINE

·  
UK CONTINUES TO PERFORM IN LINE WITH CASH GENERATIVE, VALUE OVER VOLUME STRATEGY; YEAR TO DATE NEW BUSINESS PROFIT UP ONE PER CENT

·  
GROUP-WIDE YEAR TO DATE NEW BUSINESS PROFIT UP 14 PER CENT TO £1,535 MILLION: SALES UP 10 PER CENT TO £2,704 MILLION AND 15 PER CENT EXC. INDIA

·  
RESILIENT BALANCE SHEET; IGD SURPLUS ESTIMATED AT £3.9 BILLION; MINIMAL SHAREHOLDER EXPOSURE TO EUROZONE CHALLENGES

·  
GROUP ASSET MANAGEMENT YEAR TO DATE NET INFLOWS REMAIN POSITIVE AT £3.4 BILLION
 
 
 
YTD 2011
YTD 2010
% CHANGE
Q3 2011 
Q3 2010
% CHANGE
GROUP INSURANCE1,2,3
            
NEW BUSINESS PROFIT  
£1,535M
£1,345M
14 %
      
MARGIN - APE %
57 %
55 %
+2PTS
      
             
GROUP APE SALES  
£2,704M
£2,464M
10 %
£880M
£809M
9 %
GROUP APE SALES (EX INDIA)  
£2,631M
£2,297M
15 %
£854M
£761M
12 %
             
INVESTMENT NET FLOWS4 
£3.4BN
£7.9BN
(57)%
£0.5BN
£1.9BN
(75)%
IGD SURPLUS
£3.9BN
£3.4BN
15 %
      
 
Tidjane Thiam, Group Chief Executive, said:
 
"Prudential has delivered strong results in the third quarter in a volatile and challenging environment. Our strong balance sheet, proactive risk management and our leading position in Asia have allowed us to continue to grow profitably.
 
In the first nine months of the year the Group delivered new business profits of £1,535 million, an increase of 14 per cent over the same period in 2010 (2010: £1,345 million), with total insurance sales increasing 10 per cent to £2,704 million (2010: £2,464 million). Our emphasis on writing profitable, capital-efficient business has allowed us to achieve an increased margin of 57 per cent across our insurance operations. 
 
In volatile times, capital, balance sheet and risk management are more important than ever. The Group's balance sheet remains strong and our capital position is robust. Our prudent and proactive approach to capital and risk management has led us to retain a defensive stance since the 2008 financial crisis. Our estimated IGD capital surplus at the end of the third quarter was £3.9 billion. That capital buffer, coupled with our proactive stance in managing our key exposures, means that we can withstand significant further deterioration in market and economic conditions. We also keep a close eye on our Group liquidity position which remains comfortable.
 
Going back to our business performance, in Asia our operations continue to perform well. In the first nine months of the year new business profit grew 16 per cent to £719 million (2010: £621million) and our sales grew eight per cent to £1,147 million (2010: £1,066 million). Excluding India, where the market has been impacted by regulatory reform, new business profit grew 20 per cent and our sales grew 19 per cent in the first nine months. This level of profitable growth was driven by a particularly strong performance in our four leading markets, with sales in Singapore up 38 per cent, Indonesia up 27 per cent, Hong Kong up 17 per cent and Malaysia up 16 per cent. Our new business margins remain strong, year-to-date at 63 per cent. These results confirm the value of our strategic focus on the fast-growing and highly profitable markets of South-East Asia. The momentum seen earlier in the year in our Asia business has continued during the third quarter with our highest ever third quarter of new business sales. Excluding India, third quarter sales growth was 24 per cent, compared to 17 per cent in the first two quarters of the year.
 
In the US, Jackson's strong performance in the first half has continued into the third quarter, despite the increased volatility of US financial markets in that period. New business profit year-to-date is up 17 per cent to £622 million (2010: £532 million) and APE sales are £988 million, up 16 per cent (2010: £850 million) over the same period. This performance, against a challenging macro-economic environment, reflects Jackson's financial strength ratings and a disciplined approach to writing new business. The mix of annuity sales continues to reflect customer concerns regarding the macro-economic environment. Our variable annuity APE sales of £851 million were up 25 per cent in the first nine months compared to the same period last year (2010: £683 million). 
 
The UK continues to perform in line with our strategy. Compared to the same period last year new business profit is up one per cent to £194 million (2010: £192 million) and sales increased four per cent to £569 million (2010: £548 million). We remain focused on our strengths in the individual annuities and with-profits segments. Our strategy of putting value over volume and our unique combination of competitive advantages allow us to continue to deliver market-leading returns on capital employed.
 
Turning to our asset management operations, the Group's net flows year to date totalled £3.4 billion. M&G has recorded year-to-date net inflows of £2.6 billion. Inflows have remained strong particularly in the UK however we are seeing outflows on M&G's European funds, reflecting the difficulties within the eurozone. M&G's total external funds under management are now £87.3 billion, five per cent higher than at the end of September 2010. 
 
During the third quarter of 2011 global financial markets experienced significant volatility brought on by concerns over European and US sovereign debt, as well as concerns about a general slowing of global demand reflecting an increasing lack of confidence among consumers, corporates and governments. If sustained, this environment is likely to have a negative impact on our sector over time.
 
However, our sizeable and unique presence in the growing and developing markets of Asia; our product, geographic and channel diversification; our risk management discipline across the Group; and the strength of our balance sheet position us well to continue to outperform over the medium term". 
 
1    Asia 2010 comparative APE new business sales and new business profit exclude the Japanese insurance operations which ceased writing new business from 15 February 2010
2   Unless otherwise stated all growth rates are on a sterling basis. Growth rates on constant currency are presented on schedule 1B of the Interim Management Statement 
3   The assumptions underlying new business profit are presented in schedule 5 to the Interim Management Statement
4   Investment flows excluding Asia Money Market Fund (MMF) year-to-date net outflows of £0.3 billion (2010: net outflows of £1.8 billion)
 
 
1. Q3 2011 Business Unit financial highlights
 
 
New Business Profit 5 
YTD 2011
YTD 2010 
% change on YTD 2010 
      
Asia - ex India
£704m
£588m
20 %
      
Total Asia 6 
£719m
£621m
16 %
      
US
£622m
£532m
17 %
      
UK
£194m
£192m
1 %
      
Total Group Insurance
£1,535m
£1,345m
14 %
      
 
 
Sales - APE
YTD 2011
YTD 2010
% change on YTD 2010
 Q3 2011 
Q3 2010 
% change
on Q3 2010
Asia (ex India)
£1,074m
£899m
19 %
£378m
£305m
24 %
India
£73m
£167m
(56)%
£26m
£48m
(46)%
Total Asia 6 
£1,147m
£1,066m
8 %
£404m
£353m
14 %
US
£988m
£850m
16 %
£316m
£290m
9 %
UK
£569m
£548m
4 %
£160m
£166m
(4)%
Total Group Insurance
£2,704m
£2,464m
10 %
£880m
£809m
9 %
Total Group Insurance (ex India)
£2,631m
£2,297m
15 %
£854m
£761m
12 %
 
 
Margin - APE %
YTD 2011
YTD 2010
+/- pts change on YTD 2010
      
Asia (Ex India)
66 %
65 %
+1pts
      
Total Asia  
63 %
58 %
+5pts
      
US
63 %
63 %
- pts
      
UK
34 %
35 %
-1 pts
      
Total Group Insurance
57 %
55 %
+2pts
      
 
 
Investment Flows
YTD 2011
YTD 2010
% change on YTD 20108 
 Q3 2011   
Q3 2010 
% change on
 Q3 2010 
Gross inflows
            
M&G
£19.8bn
£19.0bn
4  %
£6,427 m
£5,616m
14  %
Asia Asset Management7 
£6.5bn
£8.5bn
(24) %
£2,172 m
£3,262m
(33) %
Total Group (ex MMF)
£26.3bn
£27.5bn
(5) %
£8,599 m
£8,878m
(3) %
             
Net inflows / (outflows)
            
M&G
£2.6bn
£6.2bn
(58) %
£(288) m
£1,536m
(119) %
Asia Asset Management (ex MMF)
£0.8bn
£1.7bn
(56) %
£775 m
£407m
90  %
Asia Money Market Funds (MMF)
£(0.3)bn
£(1.7)bn
85  %
£(650) m
£(141)m
(361) %
Total Asia Asset Management  
£0.5bn
£0.0bn
1,650  %
£125 m
£266m
(53) %
Total Group
£3.1bn
£6.2bn
(49) %
£(163) m
£1,802m
(109) %
Total Group (ex MMF)
£3.4bn
£7.9bn
(57) %
£487 m
£1,943m
(75) %
             
Funds Under Management (FUM)
            
M&G
£194.4bn
£191.2bn
2  %
      
Asia Asset Management
£49.5bn
£50.3bn
(2) %
      
 
5   The assumptions underlying new business profit are presented in schedule 5 to the Interim Management Statement
6   Asia 2010 comparative APE new business sales and new business profit exclude the Japanese insurance operations which ceased writing new business from 15 February 2010
7    Gross Investment flows excluding Asia Money Market Funds (MMF) outflows
8    Percentages based on unrounded numbers
 
1.1 Asia Insurance operations
 
 
Asia
YTD 2011
YTD 2010
% change on YTD 2010
 Q3 2011 
Q3 2010 
% change on Q3 2010
Sales - APE (ex India)
£1,074m
£899m
19 %
£378m
£305m
24 %
India
£73m
£167m
(56)%
£26m
£48m
(46)%
Total Sales - APE
£1,147m
£1,066m
8 %
£404m
£353m
14 %
             
New Business Profit (ex India)
£704m
£588m
20 %
      
Total New Business Profit   
£719m
£621m
16 %
      
Total Margin - APE % - (ex India)
66 %
65 %
+1pt
      
Total Margin - APE %
63 %
58 %
+5pts
      
 
The long term prospects of the region's life insurance sector remain very attractive driven by strong economic growth, a fast growing middle class, high savings rates and low penetration of insurance products. Prudential's strategic focus continues to be on expanding quality, multichannel distribution with an emphasis on products that meet customers' needs while providing good returns to shareholders. Typically this means a high proportion of regular premium policies and a focus on covering the health and protection needs of our customers.
 
This strategy continues to deliver excellent results with new business profits growing at a much faster rate than new business APE sales. Year to date new business profit growth was 16 per cent at £719 million, principally due to the strong sales performance in our higher margin businesses of Hong Kong, Singapore, Malaysia and Indonesia and the lower proportion of new business from India in the mix. New business profit margins excluding India were higher at 66 per cent. The improved margin is a result of business mix, partially offset by a two per cent reduction as a result of the economic environment. 
 
Third quarter 2011 new business APE of £404 million has risen by 14 per cent over the same quarter last year (24 per cent excluding India) demonstrating the strong momentum in the business. Year to date new business APE has increased by eight per cent to £1,147 million (19 per cent excluding India), 
 
One of Prudential's core strengths in the region is our success in delivering profitable growth from both agency and bank partnerships; excluding India, agency average headcount increased to 185,000, up from 154,000 in the corresponding period last year. Equally important and underscoring our focus on quality is the growth in the number of active agents, which improved by nine per cent in the first nine months of this year compared to last year and also productivity (APE per agent) which improved six per cent. As a result, overall agency sales increased by 15 per cent in the first nine months of 2011. Sales from the bank channel increased by 34 per cent reflecting strong performances from our major partners. Our exclusive regional deal with UOB, signed in the first quarter last year and extended this year to include Malaysia and most recently China, is developing successfully. Standard Chartered Bank with whom we have a leading regional partnership covering ten countries and recently extended to an eleventh, the Philippines, has continued to deliver excellent results.
 
The priority accorded to regular premium policies is reflected by these being 91 per cent of APE, in line with prior year and the product mix, excluding India, also remains in line with prior years with unit-linked and protection both at 31 per cent of total APE and PAR business at 35 per cent.
 
Net insurance flows (excluding India) for Asia remain strongly positive for both the third quarter and the year to date. Third quarter outflows arising from surrenders and partial withdrawals relating to shareholder-backed business are at a lower run-rate than both the first half of 2011 and the equivalent quarter last year, when expressed as a percentage of opening liabilities.
 
Looking at developments of our sales in each major market:
 
 
China
            
 
YTD 2011
YTD 2010
% change
on YTD 
 Q3 2011 
Q3 2010 
% change on
 Q3 2010
APE
£46m
£42m
10 %
£11m
£15m
(27)%
 
In China, Prudential's share of new business volumes for the first nine months of 2011, from our 50 per cent ownership of the CITIC-Prudential joint venture, is £46 million up 10 per cent on the same period in 2010. The growth in agency sales is principally driven by productivity improvements which demonstrate that CITIC-Prudential's disciplined approach to building a high quality agency force in China continues to be effective. Sales through our bank partners have been impacted by the introduction of new regulations earlier this year prohibiting sales through non-bank staff.
 
 
 
 
Hong Kong
            
 
YTD 2011
YTD 2010
% change
on YTD 
 Q3 2011 
Q3 2010 
% change on
 Q3 2010
APE
£229m
£195m
17 %
£78m
£65m
20 %
 
Hong Kong delivered a record third quarter performance with new business APE higher by 20 per cent at £78 million. Year to date APE of £229 million represents growth of 17 per cent over the comparable period. Our continued success in this market is underpinned by both the quality of our distribution and products.
 
Agency APE increased by 11 per cent. Our agency numbers continue to increase principally through organic recruitment initiatives and the year to date average agency headcount was over 5,000. Agency productivity has improved by 14 per cent.
 
Bancassurance sales, principally through Standard Chartered Bank, have increased by 31 per cent and now account for 43 per cent of total sales (2010: 39 per cent).
 
 
India
            
 
YTD 2011
YTD 2010
% change
on YTD
 Q3 2011 
Q3 2010 
% change on
 Q3 2010
APE
£73m
£167m
(56)%
£26m
£48m
(46)%
 
 
In India, the insurance industry continues to adjust to the new regulations which became effective in the third quarter of 2010. ICICI Prudential continues to be amongst the top private sector players and is managing through a significant change in its strategy around distribution and products. ICICI Prudential has significantly diversified away from linked to conventional products with the latter contributing to around 40 per cent of incremental new business from around five per cent previously. The company maintains a balanced distribution mix at around 50:50 between agency and alternate channels.
 
 
Indonesia
            
 
YTD 2011
YTD 2010
% change
on YTD
 Q3 2011 
Q3 2010 
% change on
 Q3 2010
APE
£239m
£188m
27 %
£81m
£59m
37 %
 
Growth in Indonesia continues at a strong pace with the third quarter 2011 of £81 million up 37 per cent over the third quarter 2010. Year to date growth is 27 per cent.
 
The key to Prudential's ongoing success in Indonesia to date is our ability to efficiently recruit, train and activate new agents. Year to date average agent numbers of 108,000 are up 33 per cent on the same period last year.
 
Although agency remains the dominant distribution channel at 93 per cent of APE,we are also having some real success with our bank partners up 139 per cent over the prior year.
 
 
Korea
            
 
YTD 2011
YTD 2010
% change
on YTD
 Q3 2011 
Q3 2010 
% change on
 Q3 2010
APE
£81m
£69m
17 %
£26m
£23m
13 %
 
Our business in Korea has extensively restructured over the past two years to concentrate on high quality distribution and regular premium unit-linked business, given our unwillingness to compete in the low margin, high capital intensive guaranteed products that are prevalent in the mass market.
 
Encouragingly new business APE at £81 million year to date is up 17 per cent over the same period last year driven mainly by increasing productivity of our own focussed and highly professional tied agency force. We are also participating selectively in the bancassurance sector focusing on regular premium unit-linked products.
 
 
 
 
Malaysia
            
 
YTD 2011
YTD 2010
% change
on YTD
 Q3 2011 
Q3 2010 
% change on
 Q3 2010
APE
£150m
£129m
16 %
£59m
£52m
13 %
 
Malaysia continues to perform very strongly producing a record third quarter with new business APE of £59 million up 13 per cent over the same period last year driven by higher agent numbers (year to date up by 11 per cent). Sales mix consists predominantly of regular premium unit-linked with protection.  Takaful accounts for around 15 per cent of the mix.
 
Bancassurance remains small relative to agency but is now growing very strongly, up 183 per cent over the prior year period. Part of this growth has been driven by the strength of our new relationship with UOB; which was launched in May 2011. UOB has already contributed around 40 per cent of total partnership sales this year.
 
 
Singapore
            
 
YTD 2011
YTD 2010
% change
on YTD
 Q3 2011 
Q3 2010 
% change on
 Q3 2010
APE
£163m
£118m
38 %
£60m
£43m
40 %
 
Singapore had an excellent third quarter with new business of £60 million up 40 per cent over last year. Year to date new business APE of £163 million is 38 per cent higher than prior year.
 
Agency continues to perform very well with increases in productivity. In addition, the bancassurance performance has been outstanding with sales APE of £70 million up 106 per cent over the prior year. We have four exclusive partnerships, SCB, Maybank, Singpost and UOB that was added last year. Each of these partners have made a significant contribution to sales this year.
 
 
Taiwan
            
 
YTD 2011
YTD 2010
% change
on YTD
 Q3 2011 
Q3 2010 
% change on
 Q3 2010
APE
£95m
£95m
0%
£36m
£25m
44 %
 
Taiwan is now successfully focused on bank distribution principally with partners E.Sun and Standard Chartered Bank. We had a relatively slow start to the year as we introduced new products, but new business volumes increased strongly in the third quarter with APE of £36 million up 44 per cent over the same period last year.
 
Although year to date sales are flat relative to last year, the volume of protection business in the mix has increased to 20 per cent (2010: 16 per cent). 
 
 
Others - Philippines, Thailand and Vietnam
            
 
YTD 2011
YTD 2010
% change
on YTD
 Q3 2011 
Q3 2010 
% change on
 Q3 2010
APE
£71m
£64m
11 %
£27m
£23m
17 %
 
Prudential's other operations, Philippines, Thailand and Vietnam all continue to perform well. Vietnam's year to date growth rate, when translated to sterling was flat due to the depreciation of the local currency relative to sterling. In local currency terms growing the agency and improving agent productivity resulted in a record year to date new business APE with growth of 16 per cent over the same period last year. In the Philippines year to date new business APE is up 38 per cent over prior year driven by improved agency activity and higher sales through our bancassurance partners. We have also recently extended our distribution agreements with Standard Chartered Bank to include the Philippines. In Thailand, we have sustained our 2010 sales momentum which was boosted by the UOB distribution.
 
Japan
We announced at the start of 2010 that PCA Life Japan ceased writing new business sales with effect from 15 February 2010. New Business sales for Japan in 2010 amounted to £7 million. In order to more accurately reflect the results of our ongoing Asian operations, all of the headline financial metrics included in this announcement exclude the contribution from Japan.
 
1.2 US operations
 
Insurance operations
 
 
 US
YTD 2011
YTD 2010
% change
on YTD
 Q3 2011 
Q3 2010 
% change on
 Q3 2010
Sales - APE 
£988m
£850m
16 %
£316m
£290m
9 %
New Business Profit 
£622m
£532m
17 %
      
Margin - APE %
63 %
63 %
-pt
      
 
High volatility returned to the US equity markets in the third quarter, along with further declines in interest rates. Overall, the US equity markets rose during the first half of 2011, but then declined during the third quarter, with the S&P 500 index ending the third quarter down ten per cent for the year. Volatility in the third quarter was more than double compared to earlier in the year, or 2010.  Rates on 10-year Treasuries reached near all time lows during the quarter, declining to below two per cent, while AA corporate spreads increased from year-end 2010 levels.       
 
Jackson manages equity and interest rate exposure on an aggregate basis in order to ensure that total economic risk is hedged effectively within established policy limits. Jackson continues to adapt its hedging programme to market conditions in order to ensure continued effective risk management. Despite the historically low interest rates, falling equity markets and the high level of volatility in the third quarter of 2011, Jackson's hedging programme continued to perform well, mitigating the impact of the macroeconomic challenges and supporting our robust capital position on both an economic and regulatory basis. Jackson's approach to pricing and hedging has always been to adopt a conservative stance and we believe that this positions Jackson to perform well during periods of market dislocation. 
 
Policyholder behaviour in the quarter continued to trend in line with our expectations. Jackson believes that this uncertain environment continues to provide an advantage to companies with good financial strength ratings and a track record of financial discipline. Companies that were hardest hit by the market disruptions over the last few years still have to work to regain market share as customers and distributors seek product providers that offer consistency, stability and financial strength. Jackson continues to benefit significantly from this flight to quality and heightened risk aversion. 
 
Due to its financial stability and innovative products, Jackson continues to enhance its reputation as a high-quality and reliable business partner, with sales increasing as more advisers have recognised the benefits of working with Jackson.  A significant part of Jackson's growth continues to come from an increase in its distribution penetration with sales through distributors who either did not previously sell Jackson's products or simply did not sell variable annuities.
 
Jackson's strategy continues to focus on balancing value, volume, capital efficiency, balance sheet strength and strict pricing discipline for both variable and fixed annuities. Fixed annuity sales have slowed as a result of the current interest rate environment and as capital is directed to support higher-margin variable annuity sales. 
 
Jackson delivered strong APE retail sales of £968 million in the first nine months of 2011, representing a 14 per cent increase over the same period in 2010. With the addition of modest institutional sales in 2011, total APE sales were £988 million. Jackson has achieved these sales levels, while maintaining its pricing discipline, as it continued to write new business at aggregate internal rates of return (IRR) in excess of 20 per cent. 
 
New business profits were 17 per cent higher at £622 million, reflecting Jackson's strong pricing discipline and a larger percentage of higher margin variable annuity sales. Overall margins were 63 per cent for the first nine months of 2011 (2010: 63 per cent). The overall margins have remained relatively stable, though this is the result of offsetting changes. The adverse impact of lower yields has been offset by the beneficial effect of business mix and product re-pricing. Variable annuity margins have remained high at 67 per cent for the first three quarters (2010: 67 per cent) despite a 60 basis point reduction in yields compared to 30 September 2010, reflecting the beneficial effect of the pricing changes implemented in the last 12 months.
 
Total retail annuity net flows of £5.8 billion for the first nine months of 2011, increased 13 per cent from the same period in 2010, reflecting the impact of increased sales and continued low levels of surrender activity. In the third quarter, retail annuity net flows equalled £1.7 billion and Jackson's separate account and general account assets at the end of the quarter totalled £65.4 billion. Jackson remained the third largest seller of individual annuities during the first half of 2011, with a market share of 8.6 per cent, up from a market share of 8.0 per cent for the full year 20109.
 
Jackson anticipates a more modest rate of sales over the remainder of the year, due to the impact of the recent volatility in the S&P500 and various product initiatives that we implemented during the third quarter. These initiatives were taken in order to optimise the balance between growth, capital consumption and profitability. 
 
 
 
 
Variable annuity
            
 
YTD 2011
YTD 2010
% change
on YTD
 Q3 2011 
Q3 2010 
% change on
 Q3 2010
APE 
£851m
£683m
25 %
£262m
£236m
11 %
 
Variable annuity (VA) APE sales of £851 million in the first nine months of 2011 were 25 per cent higher than the same period in 2010 as Jackson continued to benefit from its customers' and distributors' flight to quality.  Although we do not target volume or market share, these market conditions allowed Jackson's ranking to remain at third in variable annuity sales in the first half of 2011 (latest information available), while increasing its market share to 12.2 per cent from 10.7 per cent for the full year 201010. Jackson ranks first among VA providers for advisor loyalty11. Jackson also earned the top ranking for both external and internal wholesaler support11.
 
 
Fixed index annuity
            
 
YTD 2011
YTD 2010
% change
on YTD
 Q3 2011 
Q3 2010 
% change on
 Q3 2010
APE 
£68m
£84m
(19)%
£26m
£24m
8 %
 
Fixed index annuity (FIA) APE sales of £68 million through the first nine months of 2011 were down 19 per cent from the same period of 2010 as Jackson continued to focus its marketing efforts on higher margin VA products. Jackson ranked 9th in sales of FIAs in the first half of 2011, with a market share of 4.4 per cent, down from 6th and a market share of 5.2 per cent for the full year 201012. 
 
 
Fixed annuity
            
 
YTD 2011
YTD 2010
% change
on YTD
 Q3 2011 
Q3 2010 
% change on
 Q3 2010
APE 
£33m
£65m
(49)%
£10m
£24m
(58)%
 
Jackson's strategy of proactively managing fixed annuity (FA) volumes resulted in 2011 APE sales of £33 million, 49 per cent lower than the same period in 2010. Jackson ranked 12th in sales of traditional deferred fixed annuities in the first half of 2011, with a market share of 1.9 per cent, compared to 8th and a market share of 3.4 per cent for the full year 20109. 
 
Asset management operations
 
Curian Capital, a specialised asset management company that provides innovative fee-based separately managed accounts, had total assets under management of £4.3 billion at the end of September 2011 compared with £3.5 billion at the end of 2010. Curian generated record deposits of £1.4 billion in the first nine months of 2011.   
 
9      Source: LIMRA
10     Source: Morningstar Annuity Research Center ('MARC')
11    Source: Cogent Research Advisor BrandscapeTM 2011. Rankings based upon an online survey of a representative cross section of 1,643 registered financial advisors conducted between April 15 and May 9, 2011.
12   Source: Annuity Specs
 
1.3 UK insurance operations
 
 
UK
YTD 2011
 YTD 2010 
% change
on YTD
 Q3 2011 
Q3 2010 
% change on
 Q3 2010
Sales - APE 
£569m 
£548m 
4 % 
£160m 
£166m 
(4)% 
New Business Profit 
£194m 
£192m 
1 % 
      
Margin - APE %
34 % 
35 % 
(1)pts 
      
 
In the UK, Prudential competes selectively in the retirement savings and income market with a clear focus on balancing the writing of new business with sustainable cash generation and capital preservation. Despite the competitive UK market conditions, the business continues to succeed in this objective by deploying capital to opportunities that play to its core strengths and which generate the best returns. 
 
The business remains a market leader in both individual annuities and with-profits and has a unique combination of competitive advantages including experience and expertise in managing longevity risk, multi-asset investment capabilities, a strong brand and financial strength.
 
Total APE sales of £569 million were up four per cent on the first nine months of 2010, including a bulk annuity of APE £28 million in the first half of 2011. The total margin was 34 per cent for the period, one per cent lower than in the same period in 2010.
 
Retail sales of APE £541 million were down one per cent on the same period last year, a reflection of Prudential's strategy to allocate capital to opportunities that play to the core strengths of the business rather than pursuing top-line sales growth. In the same period, the retail new business margin reduced to 32 per cent, three per cent down on 2010. This was primarily driven by a changing business mix of lower shareholder-backed annuity sales and higher sales of corporate pensions, partly offset by the higher margin on non-profit annuity business due to relatively strong investment performance in the first half of the year. The individual annuity margin has reduced in the third quarter compared to the half year as we have taken a more cautious approach to investment mix in the current economic climate.  
 
Sales of individual annuities of APE £133 million were 17 per cent lower than for the first nine months of 2010 as Prudential UK continues proactively to manage the flow of external conventional new business to control capital consumption. Sales of external annuities of APE £44 million were down 34 per cent on the same period last year, mainly due to the end of a partnership agreement in the second half of 2010. Internal vestings sales of APE £88 million, were five per cent lower than 2010 as the 2010 sales had received a temporary boost from the effects of the change in the minimum retirement age from 50 to 55 in April 2010. In effect there was a spike in sales to the 50 to 55 age group immediately prior to the change in 2010 (creating therefore an unusually high comparative for 2010) and fewer early retirees in the first half of 2011. The proportion of with-profits annuity sales continues to increase, from 22 per cent in the first nine months of 2010 to 25 per cent over the same period in 2011.
 
Sales of onshore bonds of APE £127 million were 15 per cent up on the same period in 2010, including with-profits bonds sales of APE £112 million, which increased by 16 per cent. PruFund comprised 74 per cent of with-profits bond sales, driven by customer demand for products offering smoothed investment returns and optional capital guarantees.
 
Unit-linked bond sales of APE £15 million were 11 per cent up on the first nine months of 2010, helped by the success of PruDynamic, Prudential's risk-graded portfolio funds. Sales into the PruDynamic Funds have totalled over £180 million in 2011, including collectives, and at 30 September 2011 total funds under management were in excess of £300 million.
 
Corporate pensions sales of APE £190 million were 12 per cent higher than the same period last year, with strong sales to new members of existing private sector schemes in the first half of the year due in part to an existing customer transferring members from their defined benefit scheme to the defined contribution scheme.  While continuing to focus on growing existing schemes, we are working with our corporate clients to develop their auto-enrolment strategies in time for its introduction in 2012. For many clients, we will facilitate the use of the National Employment Savings Trust (NEST) to provide a flexible, portable solution for short-term workers. Prudential UK also continues to write profitable sales through the provision of Additional Voluntary Contribution (AVC) arrangements within the public sector. Prudential has been the sole provider of Teachers AVCs for more than 20 years, is one of two providers for the National Health Service and remains the largest provider of Local Government Administering Authorities AVCs, with 67 of the 99 schemes in the UK.
 
Sales of other products of APE £91 million were 14 per cent below the same period of 2010. Individual pensions sales (including income drawdown) of APE £54 million were one per cent above the same period last year. PruHealth's sales of APE £6 million were 36 per cent below the same period last year, reflecting difficult trading conditions for the private medical insurance market and Prudential UK's reduced share, from 50 per cent to 25 per cent, of the expanded business following PruHealth's acquisition of Standard Life Healthcare. PruProtect's sales were up 22 per cent compared with 2010 on a like-for like basis, with record sales achieved in the third quarter of 2011.
 
Wholesale APE of £28 million relates to a bulk annuity buy-in insurance agreement written in the second quarter.
 
1.4 M&G
 
 
Investment Flows
YTD 2011
YTD 2010
% change on
 Q1 2010
 Q3 2011 
Q3 2010 
% change on
Q3 2010
Net inflows
            
Retail business
£2.6bn
£5.1bn
(49)%
£(172)m
£1,742m
(110)%
Institutional business
£0.0bn
£1.1bn
(99)%
£(116)m
£(206)m
44 %
Total
£2.6bn
£6.2bn
(58)%
£(288)m
£1,536m
(119)%
             
Gross inflows
            
Total
£19.8bn
£19.0bn
4 %
£6,427m
£5,616m
14 %
 
M&G is the UK and European fund manager of the Prudential Group with responsibility for investments on behalf of both internal and external clients. M&G is an investment-led business whose aim is to generate superior long-term returns for its third party investors and the internal funds of the Prudential Group. This is achieved by creating an environment that is attractive to investment talent. Over the three years to 30 September 2011, 64 per cent of M&G's Retail funds delivered first and second quartile investment performance. The performance of our actively managed external institutional fixed income mandates also remains very strong with all of mandates meeting or outperforming their benchmarks over the three years to 30 September 2011.
 
With considerable uncertainty over sovereign debts on both sides of the Atlantic and concerns over the lack of global economic growth, the third quarter of 2011 saw the FTSE 100 suffer its worst quarter for nine years, falling 14 per cent from 5,946 to 5,128. M&G's funds under management ('FUM') proved resilient in the face of such significant declines falling only four per cent from £202.2 billion as at 30 June 2011 to £194.4 billion as at the end of September 2011. External funds now represent 45 per cent of the FUM, an increase of five per cent from 30 September 2010.
 
Over the third quarter, gross inflows totalled £6.4 billion representing an increase of 14 per cent on third quarter 2010 levels. At the net level, however, we recorded an outflow of £288 million over the quarter, a clear indicator of the increasing risk aversion of retail investors particularly across Continental Europe. Market data reports show that long-term retail funds across the European industry suffered redemptions of €53.8 billion13 in August (excluding money market funds); the worst month since October 2008.
 
The sales performance of our Retail business relative to the market remains strong due to the robustness of our UK business. In our core UK market, gross inflows of £2.9 billion generated over the third quarter were 13 per cent higher than the same quarter in 2010. We have also continued to generate resilient net inflows in the UK despite the market environment with £1.1 billion being received in the quarter. This performance from our UK distribution channels has helped to offset the difficult conditions encountered in mainland Europe, where risk-averse investors have been withdrawing money from funds. Overall, this resulted in modest total net retail outflows of £172 million over the quarter.
 
M&G's Retail business in the UK has been number one for gross and net retail sales over eleven consecutive quarters based on data to the end of June 201114. The consistency and quality of our performance resulted in M&G being awarded the prestigious 2011 OBSR Outstanding Investment House Award for the second year running.
 
Outside the UK, we have continued to develop our distribution capabilities. To this end, registration of our OEIC range in Norway, Denmark and Finland will be completed over the fourth quarter of 2011. M&G-managed retail FUM sourced outside of the UK now stand at £7.8 billion at the end of September 2011, equivalent to 19 per cent of the total retail external funds managed by M&G.
 
Net flows from the Institutional business were also in negative territory over the third quarter by £116 million. This outflow partly reflects the contractual return of £407 million in capital to investors in mature closed-ended debt structures. On the positive side, M&G's Institutional Public Debt Business continued to attract net inflows which largely offset these contractual outflows. M&G's flagship institutional UK corporate bond fund, with over £3.4 billion of FUM at the end of September, has outperformed its benchmark15 by 1.616 per cent a year since September 2008, the eve of the credit crisis. The excellence of M&G's performance in the institutional fixed income market is evidenced by the recent win of the Fixed Income Manager of the Year Award at the Financial News Awards for Excellence in Institutional Asset Management.
 
Gross year-to-date sales for the total M&G business stand at £19.8 billion, while net sales remain resilient at £2.6 billion to the end of September. With a broadly neutral result from our Institutional Business over this period, retail fund flows have driven this growth.
 
13    Source: Lipper FMI Fund Flash Report (October 2011)
14    Source: Fundscape Pridham Report (August 2011)
15    The benchmark for the fund is the iBoxx Sterling Non Gilts Index
16    Returns are gross estimates on an offer to offer basis
 
1.5 Asia Asset Management
 
 
Investment Flows
YTD 2011
YTD 2010
% change
on YTD
 Q3 2011 
Q3 2010 
% change on
 Q3 2010
Net inflows/(outflows)
            
Retail and institutional business
£0.8bn
£1.7bn
(56)%
£775m
£407m
90 %
Money Market Funds (MMF)
£(0.3)bn
£(1.7)bn
85 %
£(650)m
£(141)m
(361)%
Total
£0.5bn
£0.0bn
1,650 %
£125m
£266m
(53)%
             
Gross inflows
            
Retail and institutional business
£6.5bn
£8.5bn
(24)%
£2,172m
£3,262m
(33)%
 
Prudential's asset management business in Asia has three components; internal life funds, retail funds and institutional funds. Market conditions continue to be challenging in line with the rest of the world.
 
Year to date net inflows for the third party retail and institutional fund management non money market funds of £0.8 billion are 56 per cent lower than last year. This was mainly driven by Japan where we recorded net outflows from equity and bond funds following the March 2011 earthquake, and where high net inflows from a white-labelled equity fund in 2010 did not recur. These net outflows were partially mitigated by robust net inflows into Korea from institutional clients. Including money market funds, year to date total third party net inflows were positive at £0.5 billion compared to negative £32 million in 2010.
 
Total Funds under Management (FUM) at 30 September amounted to £49.5 billion in line with the prior year as gains since then have effectively been negated by recent market movements.
 
Investment performance across life, institutional and retail portfolios remains stable with the blended performance score of funds that either outperform their benchmark or have peer rankings in the top two quartiles at 61 per cent at the end of September 2011.
 
2. Financial Management
 
The Group remains focused on its balance sheet and risk profile. We continue to impose stringent stress testing on our key capital measures, ensuring we could withstand, both in the short and medium term, significant market shocks.
 
2.1 Capital Management
 
A strong balance sheet is at the heart of our strategy and is a key buying factor for our customers, who have a long-term relationship with us in all our key markets. That strength gives confidence to our customers that we will be there to serve them in the long-term, and allows us to grow strongly and write large amounts of new business without putting our customers at risk. Strict and proactive management and allocation of capital remain a core focus for our Group.
 
Our capital position remains resilient. We have continued to focus on maintaining the Group's financial strength through optimising the balance between writing profitable new business, conserving capital and generating cash. We estimate that our Insurance Groups Directive (IGD) capital surplus was £3.9 billion at 30 September 2011 (after taking into account the 2011 interim dividend of £0.2 billion). This compares to £4.1 billion at 30 June 2011 (before taking into account the 2011 interim dividend) and £4.3 billion at 31 December 2010 (before taking into account the 2010 final dividend of £0.4 billion). The adverse effect of the equity market falls and reduction in long-term yields in the third quarter of 2011, have been broadly offset by strong operating earnings and favourable foreign exchange movements.
 
The proceeds of the $550 million hybrid debt raised in January 2011 are intended to finance the repayments of the Euro 500 million Tier 2 subordinated notes in December 2011. The reported IGD surplus positions at 30 June and 30 September 2011 already factor the repayment of this instrument.
 
We continue to have a number of options to manage both available and required capital. These could take the form of increasing our available capital (for example, through financial reinsurance) or reducing required capital (for example, through the mix and level of new business) and the use of other risk mitigation measures such as hedging and reinsurance.
 
As at 30 September 2011 stress testing of our IGD capital position to various events has the following results:
 
·  
An instantaneous 20 per cent fall in equity markets from 30 September 2011 levels would reduce the IGD surplus by £350 million;

·  
A 40 per cent fall in equity markets (comprising an instantaneous 20 per cent fall followed by a further 20 per cent fall over a four week period) would reduce the IGD surplus by £900 million;

·  
A 100bps reduction (subject to a floor of zero) in interest rates would reduce the IGD surplus by £650 million;

·  
Credit defaults of ten times the expected level would reduce IGD surplus by £600 million.
 
In addition to our strong capital position, on a statutory (Pillar 1) basis the total credit reserve for the UK shareholder annuity funds also contributes to protecting our capital position in excess of the IGD surplus. This credit reserve as at 30 September 2011 was £2.0 billion, equivalent to 8.6 per cent of the fixed income assets backing annuity liabilities. This represents 35 per cent of the portfolio spread over swaps, compared to 45 per cent at 30 June 2011 and 43 per cent at 30 September 2010.
 
The surplus of the UK with-profits fund, which represents a substantial source of capital from both a solvency and economic perspective, is excluded from the IGD calculation. At 30 September 2011, the UK with-profits fund inherited estate was valued at £6.4 billion.
 
2.2 Credit
 
The Group's total debt portfolio on an IFRS basis is estimated at £113.1 billion at 30 September 2011 excluding holdings attributable to external unit holders of consolidated unit trusts. Of this total, £75.0 billion is in the UK, including £45.9 billion within the UK with-profits fund. Shareholders have limited risk exposure to the with-profits fund as its solvency is protected by the inherited estate. Outside the with-profits fund there is £5.9 billion in unit-linked funds where the shareholder risk is limited, with the remaining £23.2 billion backing the shareholder annuity business and other non-linked business (of which 79 per cent is rated AAA to A, 19 per cent BBB and two per cent non-investment grade). No defaults were reported in the third quarter of 2011 for UK shareholder backed business.
 
Asia's debt portfolio totals £9.5 billion, of which £5.4 billion is invested in unit-linked and with-profits funds with minimal shareholder risk and £4.1 billion held by shareholder backed non-linked business.  No defaults were reported in the third quarter of 2011.
 
The most significant area of exposure to credit risk for the shareholder is in the US. Jackson's fixed income portfolio at 30 September is estimated at £26.8 billion. Jackson's net unrealised gains on available-for-sale securities were £1.9 billion at 30 September 2011 (30 June 2011: £1.4 billion).
 
Gross unrealised losses on securities priced below 80 per cent of book value were £0.2 billion at 30 September 2011 (30 June 2011: £0.2 billion). 
 
In Jackson, total amounts charged to profits relating to debt securities in the third quarter were £16 million (2010: £23 million). This is net of recoveries and reversals recognised in the quarter of £24 million (2010: £3 million). This compares to net write downs of £13 million for the first half of 2011. The total charged for the first nine months of 2011 was therefore £29 million (first nine months of 2010: £184 million). In the third quarter of 2011, Jackson's total defaults were £nil (2010: £nil). IFRS write-downs excluding defaults for the third quarter were £40 million compared to £26 million in the equivalent period in 2010.
 
The Group's shareholder exposures to sovereign debt were £2.7 billion to the US, £3.1 billion to the UK, £0.7 billion to Continental Europe and £2.8 billion to the rest of the world, predominantly Asia. Of the £0.7 billion exposure to Continental Europe, 93 per cent were AAA rated, the exposure in respect of Germany was £631 million, Italy was £48 million and Spain was £1 million whilst there was no sovereign exposure to Greece, Portugal, Ireland or France.
 
In terms of shareholder exposures to the bank debt of Portugal, Ireland, Italy, Greece and Spain (PIIGS), we held £381 million at 30 September 2011 (£25 million to Portugal, £14 million to Ireland, £117 million to Italy and £225 million to Spain). This comprised £39 million senior debt, £15 million Tier 1 debt, £215 million Tier 2 debt and £112 million of covered bonds. There was no exposure to Greece in respect of bank debt. In addition exposure to French banks was £188 million at 30 September 2011.
 
Of the £55.9 billion of debt securities backing shareholder business (excluding holdings attributable to external holders of consolidated unit trusts), five per cent (£2.5 billion) was in Tier 1 and Tier 2 hybrid bank debt. In addition to the Tier 1 and Tier 2 PIIGS and French bank exposures set out above we had £454 million exposure to the US, of which £30 million was Tier 1, £703 million exposure to the UK, of which £74 million was Tier 1, and £980 million of other exposures, of which £267 million was Tier 1.
 
 
 
ENDS
 
Enquiries:
 
 
Media
  
Investors/Analysts
  
Edward Brewster
+44 (0)20 7548 3719
David Collins
+44 (0)20 7548 2871
Robin Tozer
+44 (0)20 7548 2776
Andy Rowe
+44 (0)20 7548 3860
 
Notes:
 
1.  
Asia 2010 comparative APE new business sales and new business profit (NBP) exclude the Japanese insurance operations which ceased writing new business with effect from 15 February 2010.

2.  
Annual premium equivalent (APE) sales comprise regular premium sales plus one-tenth of single premium insurance sales and are subject to rounding.

3.  
Present Value of New Business Premiums (PVNBP) are calculated as equalling single premiums plus the present value of expected new business premiums of regular premium business, allowing for lapses and other assumptions made in determining the EEV new business contribution.

4.  
NBP assumptions for the period are detailed in the accompanying schedule 5. All references to NBP margins on pages 1 to 14 of this statement refer to margins on an APE basis, calculated as the ratio of new business profit to APE sales.

5.  
There will be a conference call today for wire services at 9.15am (GMT) hosted by Tidjane Thiam, Group Chief Executive. Dial in telephone number: +44 (0)20 3140 0668. Passcode: 600894#. 

6.  
There will be a conference call today for analysts and investors at 10.00am (GMT) hosted by Tidjane Thiam, Group Chief Executive. Dial in telephone number: +44 (0)20 3140 0668. Passcode: 883377#.

7.  
High resolution photographs are available to the media free of charge at www.prudential.co.uk/prudential-plc/media/media_library or by calling the media office on +44 (0)20 7548 2466.

8.  
Sales for overseas operations have been reported using average exchange rates for the period as shown in the attached schedules. Reference to prior year figures in the commentary is on an actual exchange rate basis unless stated. An alternative method of presentation is on a constant exchange rate basis.

9.  
Prudential plc is a company incorporated and with its principal place of business in England, and its affiliated companies constitute a large global financial services group. It provides insurance and financial services through its subsidiaries and affiliates throughout the world. It has been in existence for over 160 years and has £349.5 billion in assets under management (as at 30 June 2011). Prudential plc is not affiliated in any manner with Prudential Financial, Inc, a company whose principal place of business is in the United States of America.

10.  
Forward-Looking Statements
This statement may contain certain "forward-looking statements" with respect to certain of Prudential's plans and its current goals and expectations relating to its future financial condition, performance, results, strategy and objectives. Statements that are not historical facts, including statements about our beliefs and expectations, are forward-looking statements. These statements are based on current plans, estimates and projections, and therefore you should not place undue reliance on them. By their nature, all forward-looking statements involve risk and uncertainty. A number of important factors could cause Prudential's actual future financial condition or performance or other indicated results to differ materially from those indicated in any forward-looking statement. Such factors include, but are not limited to, future market conditions, fluctuations in interest rates and exchange rates, and the performance of financial markets generally; the policies and actions of regulatory authorities, including, for example, new government initiatives related to the financial crisis and the effect of the European Union's "Solvency II" requirements on Prudential's capital maintenance requirements; the impact of competition, inflation, and deflation; experience in particular with regard to mortality and morbidity trends, lapse rates and policy renewal rates; the timing, impact and other uncertainties of future acquisitions or combinations within relevant industries; the impact of changes in capital, solvency standards or accounting standards, and tax and other legislation and regulations in the jurisdictions in which Prudential and its affiliates operate; and the impact of legal actions and disputes. These and other important factors may for example result in changes to assumptions used for determining results of operations or re-estimations of reserves for future policy benefits. Further discussion of these and other important factors that could cause Prudential's actual future financial condition or performance or other indicated results to differ, possibly materially, from those anticipated in Prudential's forward-looking statements can be found under the heading "Risk factors" in Prudential's most recent Annual Report and in Item 3 "Risk Factors" of Prudential's most recent annual report on Form 20-F filed with the U.S. Securities and Exchange Commission, as well as under the heading "Risk factors" in any subsequent Prudential Half Year Financial Report. Prudential's most recent Annual Report and any subsequent Half Year Financial Report are available on its website at www.prudential.co.uk.

Any forward-looking statements contained in this statement are made only as of the date hereof. Prudential undertakes no obligation to update the forward-looking statements contained in this statement or any other forward-looking statements it may make, whether as a result of future events, new information or otherwise except as required pursuant to the Prospectus Rules, the Listing Rules, the Disclosure and Transparency Rules, the Hong Kong Listing Rules or the SGX-ST listing rules.

11.  
The financial information presented in this Interim Management Statement and accompanying schedules is unaudited.
 
Supplementary schedules
 
 
Contents
 
  
Schedule 1A
 
New Business Insurance Operations (Reported Exchange Rates)
 
Schedule 1B
 
New Business Insurance Operations (Current Exchange Rates)
 
Schedule 2A
 
Total Insurance New Business APE - By Quarter (Reported Exchange Rates)
 
Schedule 2B
 
Total Insurance New Business APE - By Quarter (Current Exchange Rates)
 
Schedule 3
 
Investment Operations - By Quarter (Reported Exchange Rates)
 
Schedule 4
 
New Business Profit and Margin ( % APE and % PVNBP) (Reported Exchange Rates)
 
Schedule 5
 
EEV New Business Methodology and Assumptions
 
Schedule 6
 
Group Debt Securities at 30 September 2011
 
Schedule 7
 
Basis of preparation
 
 
 
 
Schedule 1A - Reported Exchange Rates
PRUDENTIAL PLC - NEW BUSINESS - Q3 2011
INSURANCE OPERATIONS
 
 
 
Single
  
Regular
Annual Equivalents(3)
PVNBP
 
Q3
 2011
Q3
 2010
+/- (%)
Q3
 2011
Q3
 2010
+/- (%)
Q3
 2011
Q3
 2010
+/- (%)
Q3
 2011
Q3
 2010
+/- (%)
YTD
YTD
YTD
YTD
YTD
YTD
YTD
YTD
 
£m
£m
  
£m
£m
  
£m
£m
  
£m
£m
  
Group Insurance Operations
                        
Asia - ex India(1a) (7)
 972 
627 
55%
976 
836 
17%
 1,074 
899 
19%
5,865 
4,613 
27%
India(1a) (7) (5)
 124 
39 
218%
61 
163 
(63%)
 73 
167 
(56%)
356 
458 
(22%)
Asia  
 1,096 
666 
65%
1,037 
999 
4%
 1,147 
1,066 
8%
6,221 
5,071 
23%
US(1a) (7)
 9,735 
8,335 
17%
15 
17 
(12%)
 988 
850 
16%
9,858 
8,457 
17%
UK
3,615 
3,525 
3%
207 
195 
6%
 569 
548 
4%
4,603 
4,463 
3%
Group Total  
14,446 
12,526 
15%
1,259 
1,211 
4%
 2,704 
2,464 
10%
20,682 
17,991 
15%
Group Total - ex India
14,322 
12,487 
15%
1,198 
1,048 
14%
 2,631 
2,297 
15%
20,326 
17,533 
16%
                         
Asian Insurance Operations(1a) (7)
                        
Hong Kong
121 
59 
105%
217 
189 
15%
 229 
195 
17%
1,421 
1,161 
22%
Indonesia
177 
69 
157%
221 
181 
22%
 239 
188 
27%
921 
688 
34%
Malaysia
60 
29 
107%
144 
126 
14%
 150 
129 
16%
864 
679 
27%
Philippines
76 
39 
95%
14 
12 
17%
 22 
16 
38%
115 
68 
69%
Singapore
246 
206 
19%
138 
97 
42%
 163 
118 
38%
1,264 
865 
46%
Thailand
8 
11 
(27%)
19 
19 
0%
 20 
20 
0%
75 
71 
6%
Vietnam
1 
1 
0%
29 
28 
4%
 29 
28 
4%
101 
106 
(5%)
SE Asia Operations inc. Hong Kong
689 
414 
66%
782 
652 
20%
 852 
693 
23%
4,761 
3,638 
31%
China(8)
41 
80 
(49%)
42 
34 
24%
 46 
42 
10%
227 
242 
(6%)
Korea
62 
36 
72%
75 
65 
15%
 81 
69 
17%
430 
356 
21%
Taiwan
180 
97 
86%
77 
85 
(9%)
 95 
95 
0%
447 
377 
19%
Total Asia Operations - ex  India
972 
627 
55%
976 
836 
17%
 1,074 
899 
19%
5,865 
4,613 
27%
India(1a) (7) (5)
124 
39 
218%
61 
163 
(63%)
 73 
167 
(56%)
356 
458 
(22%)
Total Asia Operations  
 1,096 
666 
65%
1,037 
999 
4%
 1,147 
1,066 
8%
6,221 
5,071 
23%
                         
US Insurance Operations(1a) (7)
                        
Fixed Annuities
329 
652 
(50%)
-
-
0%
 33 
65 
(49%)
329 
652 
(50%)
Fixed Index Annuities
680 
844 
(19%)
-
-
0%
 68 
84 
(19%)
680 
844 
(19%)
Life
8 
8 
0%
15 
17 
(12%)
 16 
18 
(11%)
131 
130 
1%
Variable Annuities
8,511 
6,831 
25%
-
-
0%
 851 
683 
25%
8,511 
6,831 
25%
Wholesale
207 
-
-
-
-
0%
 20 
-
-
207 
-
-
Total US Insurance Operations
9,735 
8,335 
17%
15 
17 
(12%)
 988 
850 
16%
9,858 
8,457 
17%
                         
UK & Europe Insurance Operations
                        
Direct and Partnership Annuities
 264 
 501 
(47%)
-
-
0%
 26 
50 
(48%)
 264 
501 
(47%)
Intermediated Annuities
 180 
 170 
6%
-
-
0%
 18 
17 
6%
 180 
170 
6%
Internal Vesting Annuities
 883 
 930 
(5%)
-
-
0%
 88 
93 
(5%)
 883 
930 
(5%)
Total Individual Annuities
 1,327 
 1,601 
(17%)
-
-
0%
 133 
160 
(17%)
 1,327 
1,601 
(17%)
Corporate Pensions
 161 
 194 
(17%)
174 
150 
16%
 190 
169 
12%
 979 
859 
14%
On-shore Bonds
 1,265 
 1,096 
15%
-
-
0%
 127 
110 
15%
 1,266 
1,097 
15%
Other Products
 579 
 606 
(4%)
33 
45 
(27%)
 91 
106 
(14%)
 748 
878 
(15%)
Wholesale
 283 
 28 
911%
-
-
0%
 28 
3 
833%
 283 
28 
911%
Total UK & Europe Insurance Ops
3,615 
3,525 
3%
207 
195 
6%
 569 
548 
4%
 4,603 
4,463 
3%
Group Total  
14,446 
12,526 
15%
1,259 
1,211 
4%
 2,704 
2,464 
10%
 20,682 
17,991 
15%
Group Total - ex India
14,322 
12,487 
15%
1,198 
1,048 
14%
 2,631 
2,297 
15%
 20,326 
17,533 
16%
 
 
 
Schedule1B - Current Exchange Rates
PRUDENTIAL PLC - NEW BUSINESS - Q3 2011
INSURANCE OPERATIONS
 
 
 
Single
  
Regular
  
Annual Equivalents(3)
PVNBP
 
Q3
 2011
Q3
 2010
+/- (%)
Q3
 2011
Q3
 2010
+/- (%)
Q3
 2011
Q3
 2010
+/- (%)
Q3
 2011
Q3
 2010
+/- (%)
YTD
YTD
YTD
YTD
YTD
YTD
YTD
YTD
 
£m
£m
  
£m
£m
  
£m
£m
  
£m
£m
  
Group Insurance Operations
                        
Asia - ex India(1b) (7)
 972 
 641 
52%
 976 
 835 
17%
 1,074 
 899 
19%
 5,865 
 4,619 
27%
India(1b) (7) (5)
 124 
 38 
226%
 61 
 158 
(61%)
 73 
 162 
(55%)
 356 
 442 
(19%)
Asia   
 1,096 
 679 
61%
 1,037 
 993 
4%
 1,147 
 1,061 
8%
 6,221 
 5,061 
23%
US(1b) (7)
 9,735 
 7,921 
23%
 15 
 16 
(6%)
 988 
 808 
22%
 9,858 
 8,036 
23%
UK
 3,615 
 3,525 
3%
 207 
 195 
6%
 569 
 548 
4%
 4,603 
 4,463 
3%
Group Total  
 14,446 
 12,125 
19%
 1,259 
 1,204 
5%
 2,704 
 2,417 
12%
 20,682 
 17,560 
18%
Group Total - ex India
 14,322 
 12,087 
18%
 1,198 
 1,046 
15%
 2,631 
 2,255 
17%
 20,326 
 17,118 
19%
                         
Asian Insurance Operations(1b) (7)
                        
Hong Kong
 121 
 56 
116%
 217 
 179 
21%
 229 
 185 
24%
 1,421 
 1,101 
29%
Indonesia
 177 
 69 
157%
 221 
 180 
23%
 239 
 187 
28%
 921 
 686 
34%
Malaysia
 60 
 30 
100%
 144 
 129 
12%
 150 
 132 
14%
 864 
 693 
25%
Philippines
 76 
 39 
95%
 14 
 12 
17%
 22 
 16 
38%
 115 
 68 
69%
Singapore
 246 
 217 
13%
 138 
 103 
34%
 163 
 125 
30%
 1,264 
 912 
39%
Thailand
 8 
 12 
(33%)
 19 
 19 
0%
 20 
 20 
0%
 75 
 72 
4%
Vietnam
 1 
 1 
0%
 29 
 25 
16%
 29 
 25 
16%
 101 
 93 
9%
SE Asia Operations inc. Hong Kong
 689 
 424 
63%
 782 
 647 
21%
 852 
 689 
24%
 4,761 
 3,625 
31%
China(8)
 41 
 80 
(49%)
 42 
 34 
24%
 46 
 42 
10%
 227 
 241 
(6%)
Korea
 62 
 36 
72%
 75 
 65 
15%
 81 
 69 
17%
 430 
 360 
19%
Taiwan
 180 
 101 
78%
 77 
 89 
(13%)
 95 
 99 
(4%)
 447 
 393 
14%
Total Asia Operations - ex India
 972 
 641 
52%
 976 
 835 
17%
 1,074 
 899 
19%
 5,865 
 4,619 
27%
India(1b) (7) (5)
 124 
 38 
226%
 61 
 158 
(61%)
 73 
 162 
(55%)
 356 
 442 
(19%)
Total Asia operations
 1,096 
 679 
61%
 1,037 
 993 
4%
 1,147 
 1,061 
8%
 6,221 
 5,061 
23%
                         
US Insurance Operations(1b) (7)
                        
Fixed Annuities
 329 
 620 
(47%)
-
-
0%
 33 
 62 
(47%)
 329 
 620 
(47%)
Fixed Index Annuities
 680 
 802 
(15%)
-
-
0%
 68 
 80 
(15%)
 680 
 802 
(15%)
Life
 8 
 8 
0%
 15 
 16 
(6%)
 16 
 17 
(6%)
 131 
 123 
7%
Variable Annuities
 8,511 
 6,491 
31%
-
-
0%
 851 
 649 
31%
 8,511 
 6,491 
31%
Wholesale
 207 
-
-
-
-
0%
 20 
-
-
 207 
-
-
Total US Insurance Operations
 9,735 
 7,921 
23%
 15 
 16 
(6%)
 988 
 808 
22%
 9,858 
 8,036 
23%
                         
UK & Europe Insurance Operations
                        
Direct and Partnership Annuities
 264 
 501 
(47%)
-
-
0%
 26 
 50 
(48%)
 264 
 501 
(47%)
Intermediated Annuities
 180 
 170 
6%
-
-
0%
 18 
 17 
6%
 180 
 170 
6%
Internal Vesting Annuities
 883 
 930 
(5%)
-
-
0%
 88 
 93 
(5%)
 883 
 930 
(5%)
Total Individual Annuities
 1,327 
 1,601 
(17%)
-
-
0%
 133 
 160 
(17%)
 1,327 
 1,601 
(17%)
Corporate Pensions
 161 
 194 
(17%)
 174 
 150 
16%
 190 
 169 
12%
 979 
 859 
14%
On-shore Bonds
 1,265 
 1,096 
15%
-
-
0%
 127 
 110 
15%
 1,266 
 1,097 
15%
Other Products
 579 
 606 
(4%)
 33 
 45 
(27%)
 91 
 106 
(14%)
 748 
 878 
(15%)
Wholesale
 283 
 28 
911%
-
-
0%
 28 
 3 
833%
 283 
 28 
911%
Total UK & Europe Insurance Ops
 3,615 
 3,525 
3%
 207 
 195 
6%
 569 
 548 
4%
 4,603 
 4,463 
3%
Group Total  
 14,446 
 12,125 
19%
 1,259 
 1,204 
5%
 2,704 
 2,417 
12%
 20,682 
 17,560 
18%
Group Total - ex India
 14,322 
 12,087 
18%
 1,198 
 1,046 
15%
 2,631 
 2,255 
17%
 20,326 
 17,118 
19%
 
 
 
Schedule 2A - Reported Exchange Rates
PRUDENTIAL PLC - NEW BUSINESS - Q3 2011
TOTAL INSURANCE NEW BUSINESS APE - BY QUARTER
 
 
 
2010 
2011 
 
Q1
Q2
Q3
Q4
Q1
Q2
Q3
 
£m
£m
£m
£m
£m
£m
£m
Group Insurance Operations
              
Asia - ex India(1a)(7)
286 
308 
305 
414 
336 
360 
378 
India(1a)(7) (5)
73 
46 
48 
21 
31 
16 
26 
Asia  
359 
354 
353 
435 
367 
376 
404 
US(1a)(7)
255 
305 
290 
314 
322 
350 
316 
UK  
193 
189 
166 
272 
199 
210 
160 
Group Total  
807 
848 
809 
1,021 
888 
936 
880 
Group Total - ex India
734 
802 
761 
1,000 
857 
920 
854 
               
Asian Insurance Operations(1a)(7)
              
Hong Kong
68 
62 
65 
92 
77 
74 
78 
Indonesia
61 
68 
59 
95 
74 
84 
81 
Malaysia
36 
41 
52 
75 
44 
47 
59 
Philippines
5 
5 
6 
7 
6 
8 
8 
Singapore
33 
42 
43 
57 
47 
56 
60 
Thailand
5 
8 
7 
6 
5 
6 
9 
Vietnam
8 
10 
10 
13 
8 
11 
10 
SE Asia Operations inc. Hong Kong
216 
236 
242 
345 
261 
286 
305 
China(8)
14 
13 
15 
16 
18 
17 
11 
Korea
22 
24 
23 
27 
28 
27 
26 
Taiwan
34 
35 
25 
26 
29 
30 
36 
Total Asian Insurance Operations - ex India
286 
308 
305 
414 
336 
360 
378 
India(1a)(7) (5)
73 
46 
48 
21 
31 
16 
26 
Total Asian Insurance Operations
359 
354 
353 
435 
367 
376 
404 
               
US Insurance Operations(1a)(7)
              
Fixed Annuities
18 
24 
24 
18 
13 
10 
10 
Fixed Index Annuities
30 
30 
24 
25 
20 
22 
26 
Life
6 
5 
6 
6 
5 
6 
5 
Variable Annuities
201 
246 
236 
265 
284 
305 
262 
Wholesale
-
-
-
-
-
7 
13 
Total US Insurance Operations
255 
305 
290 
314 
322 
350 
316 
               
UK & Europe Insurance Operations
              
Direct and Partnership Annuities
20 
16 
14 
9 
10 
8 
8 
Intermediated Annuities
6 
6 
5 
5 
5 
7 
6 
Internal Vesting annuities
33 
31 
29 
31 
27 
29 
32 
Total Individual Annuities
59 
53 
48 
45 
42 
44 
47 
Corporate Pensions
60 
62 
48 
51 
78 
69 
43 
On-shore Bonds
33 
36 
41 
56 
43 
41 
43 
Other Products
40 
38 
27 
28 
36 
28 
27 
Wholesale
1 
-
2 
92 
-
28 
-
Total UK & Europe Insurance Operations
193 
189 
166 
272 
199 
210 
160 
Group Total
807 
848 
809 
1,021 
888 
936 
880 
               
Group Total - ex India
734 
802 
761 
1,000 
857 
920 
854 
 
 
 
Schedule 2B - Current Exchange Rates
PRUDENTIAL PLC - NEW BUSINESS - Q3 2011
TOTAL INSURANCE NEW BUSINESS APE - BY QUARTER
 
 
 
2010 
2011 
 
Q1
Q2
Q3
Q4
Q1
Q2
Q3
 
£m
£m
£m
£m
£m
£m
£m
Group Insurance Operations
              
Asia - ex India(1b)(7)
292 
300 
307 
414 
336 
360 
378 
India(1b) (7) (5)
72 
42 
48 
20 
31 
16 
26 
Asia
364 
342 
355 
434 
367 
376 
404 
US(1b) (7)
246 
283 
279 
306 
322 
350 
316 
UK  
193 
189 
166 
272 
199 
210 
160 
Group Total
803 
814 
800 
1,012 
888 
936 
880 
Group Total - ex India
731 
772 
752 
992 
857 
920 
854 
               
Asian Insurance Operations(1b)(7)
              
Hong Kong
65 
58 
62 
90 
77 
74 
78 
Indonesia
63 
65 
59 
96 
74 
84 
81 
Malaysia
39 
41 
52 
76 
44 
47 
59 
Philippines
5 
5 
6 
8 
6 
8 
8 
Singapore
36 
43 
46 
58 
47 
56 
60 
Thailand
5 
8 
7 
6 
5 
6 
9 
Vietnam
7 
8 
10 
12 
8 
11 
10 
SE Asia Operations inc. Hong Kong
220 
228 
242 
346 
261 
286 
305 
China(8)
14 
13 
15 
16 
18 
17 
11 
Korea
22 
24 
23 
28 
28 
27 
26 
Taiwan
36 
35 
28 
24 
29 
30 
36 
Total Asian Insurance Operations - ex India
292 
300 
307 
414 
336 
360 
378 
India(1b) (7) (5)
72 
42 
48 
20 
31 
16 
26 
Total Asian Insurance Operations  
364 
342 
355 
434 
367 
376 
404 
               
US Insurance Operations(1b) (7)
              
Fixed Annuities
18 
22 
22 
18 
13 
10 
10 
Fixed Index Annuities
29 
27 
24 
24 
20 
22 
26 
Life
5 
6 
6 
5 
5 
6 
5 
Variable Annuities
194 
228 
227 
259 
284 
305 
262 
Wholesale
-
-
-
-
-
7 
13 
Total US Insurance Operations
246 
283 
279 
306 
322 
350 
316 
               
UK & Europe Insurance Operations
              
Direct and Partnership Annuities
20 
16 
14 
9 
10 
8 
8 
Intermediated Annuities
6 
6 
5 
5 
5 
7 
6 
Internal Vesting annuities
33 
31 
29 
31 
27 
29 
32 
Total Individual Annuities
59 
53 
48 
45 
42 
44 
47 
Corporate Pensions
60 
62 
48 
51 
78 
69 
43 
On-shore Bonds
33 
36 
41 
56 
43 
41 
43 
Other Products
40 
38 
27 
28 
36 
28 
27 
Wholesale
1 
-
2 
92 
-
28 
-
Total UK & Europe Insurance Operations
193 
189 
166 
272 
199 
210 
160 
Group Total
803 
814 
800 
1,012 
888 
936 
880 
Group Total - ex India
731 
772 
752 
992 
857 
920 
854 
 
 
 
Schedule 3 - Reported Exchange Rates
PRUDENTIAL PLC - NEW BUSINESS - Q3 2011
INVESTMENT OPERATIONS - BY QUARTER
 
 
 
2010 
2011 
 
Q1
Q2
Q3
Q4 
Q1
Q2
Q3
 
£m
£m
£m
£m 
£m
£m
£m
Group Investment Operations
              
Opening FUM
89,780 
96,746 
96,015 
104,451 
111,374 
112,807 
115,216 
Net Flows
1,203 
3,173 
1,802 
2,712 
1,633 
1,660 
(163)
 - Gross Inflows
24,173 
27,182 
25,727 
29,887 
27,689 
25,178 
19,318 
 - Redemptions
(22,970)
(24,009)
(23,925)
(27,175)
(26,056)
(23,518)
(19,481)
Other Movements
5,763 
(3,904)
6,634 
4,211 
(200)
749 
(7,997)
Total Group Investment Operations
96,746 
96,015 
104,451 
111,374 
112,807 
115,216 
107,056 
               
M&G
              
               
Retail
              
Opening FUM
31,059 
34,069 
33,724 
38,232 
42,506 
44,018 
45,603 
Net Flows
1,454 
1,922 
1,742 
2,298 
1,310 
1,486 
(172)
 - Gross Inflows
4,190 
4,450 
3,986 
5,285 
5,474 
4,900 
4,322 
 - Redemptions
(2,736)
(2,528)
(2,244)
(2,987)
(4,164)
(3,414)
(4,494)
Other Movements
1,556 
(2,267)
2,766 
1,976 
202 
99 
(4,004)
Closing FUM
34,069 
33,724 
38,232 
42,506 
44,018 
45,603 
41,427 
               
Institutional(4)
              
Opening FUM
39,247 
42,155 
41,946 
44,694 
46,820 
47,364 
47,747 
Net Flows
435 
863 
(206)
597 
367 
(241)
(116)
 - Gross Inflows
2,151 
2,581 
1,630 
2,099 
1,445 
1,571 
2,105 
 - Redemptions
(1,716)
(1,718)
(1,836)
(1,502)
(1,078)
(1,812)
(2,221)
Other Movements
2,473 
(1,072)
2,954 
1,529 
177 
624 
(1,710)
Closing FUM
42,155 
41,946 
44,694 
46,820 
47,364 
47,747 
45,921 
Total M&G Investment Operations
76,224 
75,670 
82,926 
89,326 
91,382 
93,350 
87,348 
               
Asia
              
               
Equity/Bond/Other(9)
              
Opening FUM
13,122 
14,923 
14,497 
15,825 
16,358 
14,943 
14,565 
Net Flows
166 
1,031 
446 
103 
64 
(272)
713 
 - Gross Inflows
1,713 
3,414 
3,248 
3,423 
2,031 
1,911 
2,088 
 - Redemptions
(1,547)
(2,383)
(2,802)
(3,320)
(1,967)
(2,183)
(1,375)
Other Movements
1,635 
(1,457)
882 
430 
(1,479)
(106)
(1,874)
Closing FUM(6)
14,923 
14,497 
15,825 
16,358 
14,943 
14,565 
13,404 
               
Third Party Institutional Mandates
              
Opening FUM
1,450 
1,549 
1,604 
1,680 
1,807 
1,909 
1,986 
Net Flows
5 
125 
(39)
-
150 
46 
62 
 - Gross Inflows
12 
137 
14 
12 
236 
100 
84 
 - Redemptions
(7)
(12)
(53)
(12)
(86)
(54)
(22)
Other Movements
94 
(70)
115 
127 
(48)
31 
(265)
Closing FUM(6)
1,549 
1,604 
1,680 
1,807 
1,909 
1,986 
1,783 
               
               
MMF
              
Opening FUM
4,902 
4,050 
4,244 
4,020 
3,883 
4,573 
5,315 
Net Flows
(857)
(768)
(141)
(286)
(258)
641 
(650)
 - Gross Inflows
16,107 
16,600 
16,849 
19,068 
18,503 
16,696 
10,719 
 - Redemptions
(16,964)
(17,368)
(16,990)
(19,354)
(18,761)
(16,055)
(11,369)
Other Movements
5 
962 
(83)
149 
948 
101 
(144)
Closing FUM(6)
4,050 
4,244 
4,020 
3,883 
4,573 
5,315 
4,521 
               
Total Asian Investment Operations
20,522 
20,345 
21,525 
22,048 
21,425 
21,866 
19,708 
               
US
              
Curian Capital - FUM(6)
2,708 
2,781 
3,038 
3,457 
3,873 
4,268 
4,291 
 
 
 
Schedule 4 - Reported Exchange Rates
PRUDENTIAL PLC - NEW BUSINESS - Q3 2011
TOTAL INSURANCE NEW BUSINESS PROFIT AND MARGIN (% APE AND % PVNBP)
 
 
 
2010 
2011 
 
Q1
Q2
Q3
Q4
Q1
Q2
Q3
 
YTD
YTD
YTD
YTD
YTD
YTD
YTD
 
£m
£m
£m
£m
£m
£m
£m
Annual Equivalent(3)
              
Total Asian Insurance Operations - ex India
286 
594 
899 
1,313 
336 
696 
 1,074 
India
73 
119 
167 
188 
31 
47 
73 
Total Asian Insurance Operations  
359 
713 
1,066 
1,501 
367 
743 
1,147 
Total US Insurance Operations
255 
560 
850 
1,164 
322 
672 
988 
Total UK & Europe Insurance Operations
193 
382 
548 
820 
199 
409 
569 
Group Total
807 
1,655 
2,464 
3,485 
888 
1,824 
2,704 
Group Total - ex India
734 
1,536 
2,297 
3,297 
857 
1,777 
2,631 
               
New business profit(2)
              
Total Asian Insurance Operations - ex India
170 
372 
588 
864 
207 
455 
704 
India
13 
24 
33 
38 
6 
10 
15 
Total Asian Insurance Operations  
183 
396 
621 
902 
213 
465 
719 
Total US Insurance Operations
175 
361 
532 
761 
220 
458 
622 
Total UK & Europe Insurance Operations
69 
135 
192 
365 
65 
146 
194 
Group Total
427 
892 
1,345 
2,028 
498 
 1,069 
1,535 
Group Total - ex India
414 
868 
1,312 
1,990 
492 
 1,059 
1,520 
 
New business margin (% of APE)
              
Total Asian Insurance Operations - ex India
59%
63%
65%
66%
62%
65%
66%
India
19%
20%
20%
20%
18%
21%
21%
Total Asian Insurance Operations  
51%
56%
58%
60%
58%
63%
63%
Total US Insurance Operations
69%
64%
63%
65%
68%
68%
63%
Total UK & Europe Insurance Operations
36%
35%
35%
45%
33%
36%
34%
Group Total
53%
54%
55%
58%
56%
59%
57%
Group Total - ex India
56%
57%
57%
60%
57%
60%
58%
               
PVNBP(3)
              
Total Asian Insurance Operations - ex India
1,389 
2,987 
4,613 
6,911 
1,761 
3,690 
5,865 
India
192 
329 
458 
582 
174 
249 
356 
Total Asian Insurance Operations
1,581 
3,316 
5,071 
7,493 
1,935 
3,939 
6,221 
Total US Insurance Operations
2,538 
5,569 
8,457 
11,572 
3,206 
6,689 
9,858 
Total UK & Europe Insurance Operations
1,557 
3,081 
4,463 
6,842 
1,551 
3,264 
4,603 
Group Total
5,676 
11,966 
17,991 
25,907 
6,692 
13,892 
20,682 
Group Total - ex India
5,484 
11,637 
17,533 
25,325 
6,518 
13,643 
20,326 
               
New business profit(2)
              
Total Asian Insurance Operations - ex India
170 
372 
588 
864 
207 
455 
704 
India
13 
24 
33 
38 
6 
10 
15 
Total Asian Insurance Operations  
183 
396 
621 
902 
213 
465 
719 
Total US Insurance Operations
175 
361 
532 
761 
220 
458 
622 
Total UK & Europe Insurance Operations
69 
135 
192 
365 
65 
146 
194 
Group Total
427 
892 
1,345 
2,028 
498 
 1,069 
1,535 
Group Total - ex India
414 
868 
1,312 
1,990 
492 
 1,059 
1,520 
               
New business margin (% of PVNBP)
              
Total Asian Insurance Operations - ex India
12.2%
12.5%
12.7%
12.5%
11.8%
12.3%
12.0%
India
6.8%
7.3%
7.2%
6.5%
3.4%
4.0%
4.2%
Total Asian Insurance Operations
11.6%
11.9%
12.2%
12.0%
11.0%
11.8%
11.6%
Total US Insurance Operations
6.9%
6.5%
6.3%
6.6%
6.9%
6.8%
6.3%
Total UK & Europe Insurance Operations
4.4%
4.4%
4.3%
5.3%
4.2%
4.5%
4.2%
Group Total
7.5%
7.5%
7.5%
7.8%
7.4%
7.7%
7.4%
Group Total - ex India
7.5%
7.5%
7.5%
7.9%
7.5%
7.8%
7.5%
 
 
 
Schedule 5
 
EEV New Business Methodology and Assumptions
 
Valuation of new business
The valuation of new business represents profits determined on the following basis. Non-economic assumptions used in the calculation of the new business contribution for Q3 2011 are consistent with those at 30 June 2011.
 
New business target spreads for US operations reflect assumptions at the end of the period. In determining the new business contribution for UK immediate annuity business, which is interest rate sensitive, it is appropriate to use assumptions reflecting point of sale market conditions, consistent with how the business is priced. For other business within the Group, end of period economic assumptions are used.
 
Principal economic assumptions
For the Group's UK and US operations, the EEV basis results for all periods shown have been determined using economic assumptions where the long-term expected rates of return on investments and risk discount rates are set by reference to period end rates of return on government bonds (the 'active' basis).
 
For Asian operations, the Q3 2010 EEV basis results for Japan, Korea and US dollar denominated business written in Hong Kong were determined on the 'active' basis. For other Asian countries the investment return assumptions and risk discount rates for Q3 2010 were based on an assessment of longer-term economic conditions (the 'passive' basis).
 
With effect from full year 2010, the approach has been altered to determine the EEV basis results for all Asian territories on an 'active basis' of economic assumption setting, in line with the Group's other operations, and reflecting the fact that markets in a number of Asian countries are becoming increasingly developed.
 
Expected returns on equity and property asset classes in respect of each territory are derived by adding a risk premium, based on the long-term view of Prudential's economists, to the risk-free rate. In Asia (excluding Japan), equity risk premiums range from 3.5 per cent to 8.7 per cent as at 30 September 2011 (30 June 2011: 3.5 per cent to 8.7 per cent; 30 September 2010: 3.5 per cent to 8.6 per cent). In the US and the UK, the equity risk premium is 4.0 per cent for all periods shown below.
 
Assumed investment returns reflect the expected future returns on the assets held and allocated to the covered business at the valuation date.
 
The tables below summarise the principal financial assumptions:
 
 
Asian operations note ii
                      
                       
30 September 2011
                      
 
China
Hong Kong
India 
Indonesia
Korea 
Malaysia
Philippines
Singapore
Taiwan 
Thailand 
Vietnam
   
(notes ii, iv)
      
(notes iii, iv)
  
(note iv)
      
 
%
%
%
%
%
%
%
%
%
%
%
New business risk discount rate
10.5 
3.65 
13.6 
12.2 
7.5 
6.8 
13.2 
4.1 
4.9 
10.5 
19.8 
Government bond yield
4.0 
1.9 
8.6 
7.0 
4.0 
3.7 
6.45 
1.6 
1.3 
3.7 
13.1 
                       
30 June 2011
                      
 
China
Hong Kong
India 
Indonesia
Korea 
Malaysia
Philippines
Singapore
Taiwan 
Thailand 
Vietnam
   
(notes ii, iv)
      
(notes iii, iv)
  
(note iv)
      
 
%
%
%
%
%
%
%
%
%
%
%
New business risk discount rate
10.4 
5.0 
13.5 
12.9 
7.8 
7.1 
13.6 
4.8 
5.3 
10.7 
19.7 
Government bond yield
3.9 
3.2 
8.5 
7.7 
4.3 
4.0 
6.9 
2.3 
1.6 
3.9 
12.9 
                       
30 September 2010
                      
 
China
Hong Kong
India 
Indonesia
Korea 
Malaysia
Philippines
Singapore
Taiwan 
Thailand 
Vietnam
   
(notes ii, iv)
      
(notes iii, iv)
  
(note iv)
      
 
%
%
%
%
%
%
%
%
%
%
%
New business risk discount rate
10.5 
4.2 
12.5 
13.7 
6.8 
8.6 
15.75 
6.3 
7.7 
13.75 
15.75 
Government bond yield
7.0 
2.55 
7.5 
9.0 
4.15 
5.75 
9.0 
4.75 
5.5 
7.0 
9.0 
 
 
 
Schedule 5
 
EEV New Business Methodology and Assumptions (cont.)
 
 
       
 
Asia Total
 
30 Sep
2011
30 Jun
2011
30 Sep
2010
 
%
%
%
New business weighted risk discount rate  (note (i))
7.7 
8.2 
8.9 
 
Notes
 (i)  
The weighted risk discount rates for Asian operations shown above have been determined by weighting each country's risk discount rates by reference to the EEV basis new business result.
 (ii) 
For Hong Kong the assumptions shown are for US dollar denominated business which comprises the largest proportion of the in-force business. For other territories, the assumptions are for local currency
denominated business which reflects the largest proportion of the in-force business.
 (iii)  
The risk discount rate for Malaysia reflects both the Malaysia life and Takaful operations.
 (iv)
The mean equity return assumptions for the most significant equity holdings in the Asian operations were:
 
 
 
30 Sep
2011
30 Jun
2011
30 Sep
2010
  
 
%
%
%
  
Hong Kong
5.9 
7.2 
6.55 
  
Malaysia
9.7 
10.0 
11.7 
  
Singapore
7.7 
8.35 
10.7 
  
         
To obtain the mean, an average over all simulations of the accumulated return at the end of the projection period is calculated. The annual average return is then calculated by taking the root of the average accumulated return minus 1.
  
 
 
 
US operations
      
       
30 Sep
2011
30 Jun
2011
30 Sep
2010
       
%
%
%
Assumed new business and spread margins:note
      
 
Fixed Annuity business*
1.9 
1.9 
2.0 
 
Fixed Index Annuity business
2.5 
2.5 
2.5 
New business risk discount rate  
      
 
Variable annuity
6.5 
7.8 
7.0 
 
Non-variable annuity
4.2 
5.5 
4.8 
 
Weighted average total
6.3 
7.7 
6.7 
US 10-year treasury bond rate at end of period
1.9 
3.2 
2.55 
Pre-tax expected long-term nominal rate of return for US equities
5.9 
7.2 
6.5 
             
* (including the proportion of variable annuity business invested in the general account)
      
 
Note
Credit risk treatment
The projected cash flows incorporate the expected long-term spread between the earned rate and the rate credited to policyholders. The projected earned rates reflect book value yields which are adjusted over time to reflect projected reinvestment rates.  Positive net cash flows are assumed to be reinvested in a mix of corporate bonds, commercial mortgages and limited partnerships.  The yield on those assets is assumed to grade from the current level to a yield that allows for a long-term assumed credit spread of 1.25 per cent over 10 years.  The expected spread on new business has been determined after allowing for a Risk Margin Reserve (RMR) allowance of 25 basis points for longer-term defaults for all periods shown above.
 
In the event that longer-term default levels are higher then, unlike for UK annuity business where policyholder benefits are not changeable, Jackson has some discretion to adjust crediting rates, subject to contract guarantee levels and general market competition considerations.
 
The results for Jackson reflect the application of the discount rates shown above, which for 2011 and 2010 reflect the inclusion of an additional allowance for a combination of credit risk premium and short-term default allowance.
 
 
 
 
 
UK operations
      
       
30 Sep
2011
30 Jun
2011
30 Sep
2010
       
%
%
%
Shareholder-backed annuity business:note i
      
 
New business risk discount rate
7.05 
7.35 
7.1 
             
Pre-tax expected long-term nominal rate of return:  
      
 
Fixed annuities
5.0 
5.2 
4.9 
 
Inflation-linked annuities
5.0 
5.0 
5.3 
             
Other business:  
      
New business risk discount rate note ii
5.9 
7.0 
6.35 
             
Pre-tax expected long-term nominal rates of investment return:
      
 
UK equities
6.9 
8.0 
7.5 
 
Gilts
2.9 
4.0 
3.5 
 
Corporate bonds
4.5 
5.6 
5.2 
Post-tax expected long-term nominal rate of return for the PAC with-profits fund:
      
 
Pension business (where no tax applies)
5.5 
6.6 
6.1 
 
Life business
4.8 
5.8 
5.3 
 
Notes
i.  
For Prudential's UK shareholder-backed annuity business, Prudential has used a market consistent embedded value (MCEV) approach to derive an implied risk discount rate which is then applied to the projected best estimate cash flows. In the annuity MCEV calculations, the future cash flows are discounted using the swap yield curve plus an allowance for liquidity premium based on Prudential's assessment of the expected return on the assets backing the annuity liabilities after allowing for expected long-term defaults, credit risk premium and short-term downgrades and defaults.  For the purposes of presentation in the EEV results, the results on this basis are reconfigured.  Under this approach the projected earned rate of return on the debt securities held is determined after allowing for expected long-term defaults and, where necessary, an additional allowance for an element of short-term downgrades and defaults to bring the allowance in the earned rate up to best estimate levels. The allowances for credit risk premium and the remaining element of short-term downgrade and default allowances are incorporated into the risk margin included in the discount rate. The credit assumptions used in the MCEV calculations and the residual liquidity premium element of the bond spread over swap rates for shareholder-backed annuity new business are as follows:
 
 
 
30 Sep
2011
30 Jun
2011
30 Sep
2010
 
(bps)
(bps)
(bps)
Bond spread over swap rates
132 
130 
116 
Total credit risk allowance
34 
36 
37 
Liquidity premium
98 
94 
79 

ii.  
The risk discount rates for new business for UK insurance operations other than shareholder-backed annuities reflect weighted rates based on the type of business.
 
 
Schedule 6
 
Group Debt Securities at 30 September 2011
 
1    IFRS balance sheet fair value                                                                                                                                                                    
 
      The Group's investments in debt securities at 30 September 2011 excluding holdings attributable to external unit holders are as follows:
 
 
   
With-profit
Unit-linked and variable annuity
Other shareholder backed business
Total
   
(note 1a)
(note 1a)
    
   
£bn
£bn
£bn
£bn
 
UK insurance operations (Notes 1b and 1c)
45.9 
5.9 
23.2 
75.0 
 
Jackson National Life (Notes 1d and 3)
    
26.8 
26.8 
 
Asia long-term business 
3.4 
2.0 
4.1 
9.5 
 
Other operations
    
1.8 
1.8 
 
Total
49.3 
7.9 
55.9 
113.1 
 
Notes
1(a)      Shareholders are not directly exposed to value movements on assets backing with-profit, unit-linked, and variable annuity business.
1(b)      Of the £23.2 billion of debt securities for UK annuity and other non-linked shareholder backed business 28% was rated AAA, 16% AA, 35% A, 19% BBB and 2% other.
1(c)      For UK annuity business provision is made for possible future credit related losses. At 30 September 2011, a provision of £2.0 bn was held.
1(d)      Jackson's investment in debt securities comprise:
 
 
 
 
30 Sep 2011
30 Jun 2011
 
£m
£m
Government securities
2,349 
1,758 
Corporate securities (95% investment grade)
18,853 
17,930 
Residential mortgage backed securities (56% government agency; 25% for pre 2006/2007 vintages; £518m for 2006/2007 vintages of which £512m is for the senior part of the capital structure)
2,663 
2,536 
Commercial mortgage backed securities
2,283 
2,274 
Other debt securities
628 
788 
Total
26,776 
25,286 
 
 
2.  
Defaults, losses from sales of impaired and deteriorating bonds and write-downs for non-linked shareholder backed business

2.1  
Jackson National Life
 
In general, the debt securities of Jackson are purchased with the intention and the ability to hold them for the longer-term.
 
The majority of Jackson's debt securities are classified as available-for-sale under IAS 39. Under this classification realised losses from defaults, sales of impaired and deteriorating bonds and write-downs are recorded in the income statement. Changes in unrealised appreciation and depreciation are recorded as a movement directly in other comprehensive income.
 
Jackson continues to review its investments on a case-by-case basis to determine whether any decline in fair value represents an impairment and therefore requiring an accounting write-down. IFRS requires available-for-sale debt securities which are impaired to be written down to fair value through the income statement.
 
The defaults, write-downs and losses on sales of impaired and deteriorating bonds (net of recoveries) for the three months to 30 September 2011 were as follows:
 
 
 
         
Defaults
Bond write
downs
Recoveries on
 impaired and
 deteriorating
bonds (net of
 losses on sales)
         
£m
£m
£m
 
Residential mortgage backed  securities
      
     
Prime
-
(1)
-
     
Alt-A
-
(1)
-
     
Sub-prime
-
-
1 
   
Other
-
(38)
23 
   
Total
-
(40)
24 
 
 
 
2.2    Other operations

For the Group's operations, other than Jackson National Life, debt securities are accounted for on a fair value through P&L basis with all value movements recorded in the income statement.  There were no defaults in the third quarter of 2011 for other shareholder backed business.
 
3        Jackson National Life - securities in an unrealised loss position
 
For Jackson's securities classified as available-for-sale under IAS 39, at 30 September 2011 there was a net unrealised gain position of £1,910 million. This amount comprised £2,204 million of gross unrealised gains and £(294) million of gross unrealised losses on individual securities. Under IFRS unrealised losses are only applicable for securities which have not been impaired during the period. Securities impaired during the period are written down to fair value through the income statement in full. Note 2.1 shows the element of write downs in the third quarter of 2011. Included within the gross unrealised losses is £(173) million for securities which are valued at less than 80 per cent of book value, of which 17 per cent have been at this level for less than 6 months.
IFRS requires securities to be carried at fair value, being the amount for which the security would be exchanged between knowledgeable, willing parties in an arm's length transaction. The best evidence of fair value is quoted prices in an active market, but if the market is not active then a valuation technique is used to establish fair value.
 
a)  
Movements in the values for the 3 months to 30 September 2011:
 
Movements in the values of available-for-sale securities for the three months to 30 September 2011 are included in the table shown below:
 
 
   
Change reflected directly in shareholders' equity
   
30 September
2011
Movement in Quarter 3
Foreign exchange translation
Quarter 3 including Foreign exchange
30 June
2011
Assets fair valued at below book value
          
 
Book value
3,195 
(412)
95 
(317)
3,512 
 
Unrealised loss
(294)
(19)
(9)
(28)
(266)
Fair value (as included in the balance sheet)
2,901 
(431)
86 
(345)
3,246 
Assets fair valued at or above book value
          
 
Book value
21,664 
673 
643 
1,316 
20,348 
 
Unrealised gain
2,204 
453 
66 
519 
1,685 
Fair value (as included in the balance sheet)
23,868 
1,126 
709 
1,835 
22,033 
Total
          
 
Book value
24,859 
261 
738 
999 
23,860 
 
Net unrealised gain
1,910 
434 
57 
491 
1,419 
Fair value (as included in the balance sheet)
26,769 
695 
795 
1,490 
25,279 
 
b)  
Fair value of securities in an unrealised loss position as a percentage of book value        

 (i) Fair value of securities as a percentage of book value
 
The unrealised losses in the Jackson balance sheet on unimpaired securities are £294 million (30 June 2011: £266 million) relating to assets with fair market value and book value of £2,901 million (30 June 2011: £3,246 million) and £3,195 million (30 June 2011: £3,512 million) respectively.
 
The following table shows the fair value of the securities in a gross unrealised loss position for various percentages of book value:
 
 
 
Fair value
Unrealised loss
Fair value
Unrealised loss
 
30 September
2011
30 September
2011
30 June
2011
30 June
2011
 
£m
£m
£m
£m
Between 90% and 100%
2,329 
(73)
2,794 
(66)
Between 80% and 90%
306 
(48)
186 
(32)
Below 80%
266 
(173)
266 
(168)
 
2,901 
(294)
3,246 
(266)
 
 
 
(ii)   Fair value of sub-prime and Alt-A securities as a percentage of book value 

Included within the table above are amounts relating to sub-prime and Alt-A securities in a gross unrealised loss
position for various percentages of book value of:
 
 
 
Fair value
Unrealised loss
Fair value
Unrealised loss
 
30 September
2011
30 September
2011
30 June
2011
30 June
2011
 
£m
£m
£m
£m
Between 90% and 100%
146 
(6)
114 
(4)
Between 80% and 90%
62 
(11)
76 
(13)
Below 80%
66 
(33)
44 
(23)
 
274 
(50)
234 
(40)
 
c)  
Securities whose fair value were below 80 per cent of the book value

As shown in the table above, £173 million (30 June 2011: £168 million) of the £294 million (30 June 2011: £266 million) of gross unrealised losses at 30 September 2011 related to securities whose fair value were below 80 per cent of the book value. The age analysis for this £173 million (30 June 2011: £168 million), indicating the length of time for which their fair value was below 80 per cent of the book value, is as follows:
 
 
 
Fair value
Unrealised loss
Fair value
Unrealised loss
 
30 September
2011
30 September
2011
30 June
2011
30 June
2011
 
£m
£m
£m
£m
Less than 3 months
64 
(21)
22 
(7)
3 months to 6 months
22 
(8)
9 
(2)
More than 6 months
180 
(144)
235 
(159)
 
266 
(173)
266 
(168)
 
For securities valued at less than 80 per cent of book value, 61 per cent are investment grade. The analysis by category of debt securities whose fair value were below 80 per cent of the book value is as follows:
 
 
   
Fair value
Unrealised loss
Fair value
Unrealised loss
   
30 September
2011
30 September
2011
30 June
2011
30 June
2011
   
£m
£m
£m
£m
RMBS
        
 
   Prime
56 
(23)
45 
(17)
 
   Alt-A
13 
(4)
6 
(2)
 
   Sub-prime
53 
(29)
38 
(21)
   
122 
(56)
89 
(40)
Commercial mortgage backed securities
6 
(30)
9 
(26)
Other asset backed securities
80 
(57)
118 
(79)
           
Total structured securities
208 
(143)
216 
(145)
Corporates
 
58 
(30)
50 
(23)
   
266 
(173)
266 
(168)
 
Balance sheet items for Jackson National Life have been translated at the closing rate for the period, being $1.56 at 30 September 2011 (30 June 2011: $1.61). Jackson National Life income statement movements have been translated at the average exchange rate for the period, being $1.61 for 9 months to 30 September 2011 (30 June 2011: $1.62).
 
 
 
4     Shareholder Sovereign exposures
 
Direct shareholder sovereign exposures to France, Germany, Greece, Ireland, Italy, Portugal and Spain as at 30 September 2011:
 
 
 
Total
 Sovereign
debt
 
£m
France
-
Germany
-
Greece
-
Ireland
-
Italy
48 
Portugal
-
Spain
1 
Total
49 
 
5     Shareholder exposure to Eurozone and United Kingdom bank debt securities
 
Direct shareholder exposures to Eurozone and United Kingdom banks as at 30 September 2011:
 
 
 
Debt securities
 
Senior debt
Subordinated debt
  
 
Covered
Senior
Total senior debt
Tier 2
Tier 1
Total subordinated debt
Total
 
£m
£m
£m
£m
£m
£m
£m
Austria
-
-
-
11 
-
11 
11 
France
10 
24 
34 
92 
62 
154 
188 
Germany
-
- 
- 
29 
-
29 
29 
Ireland
-
14 
14 
-
-
-
14 
Italy
-
12 
12 
90 
15 
105 
117 
Netherlands
-
51 
51 
85 
68 
153 
204 
Portugal
-
13 
13 
12 
-
12 
25 
Spain
112 
-
112 
113 
-
113 
225 
United Kingdom
184 
131 
315 
629 
74 
703 
1,018 
Total
306 
245 
551 
1,061 
219 
1,280 
1,831 
 
 
 
7    New Business Schedules
 
BASIS OF PREPARATION
 
The new business schedules are provided as an indicative volume measure of transactions undertaken in the reporting period that have the potential to generate profits for shareholders. The amounts shown are not, and not intended to be, reflective of premium income recorded in the IFRS income statement. Annual premium equivalent (APE) sales are subject to rounding.
 
The format of the schedules is consistent with the distinction between insurance and investment products as applied for previous financial reporting periods. With the exception of some US institutional business, products categorised as 'insurance' refer to those classified as contracts of long-term insurance business for regulatory reporting purposes, i.e. falling within one of the classes of insurance specified in Part II of Schedule 1 to the Regulated Activities Order under FSA regulations.
 
The details shown for insurance products include contributions for contracts that are classified under IFRS 4 'Insurance Contracts' as not containing significant insurance risk. These products are described as investment contracts or other financial instruments under IFRS. Contracts included in this category are primarily certain unit-linked and similar contracts written in UK Insurance Operations, and Guaranteed Investment Contracts and similar funding agreements written in US Operations.
 
Asia 2010 comparative APE new business sales and new business profit exclude the Japanese insurance operations which ceased writing new business from 15 February 2010.
 
New business premiums for regular premium products are shown on an annualised basis. Internal vesting business is classified as new business where the contracts include an open market option. 
 
New business premiums reflect those premiums attaching to covered business, including premiums for contracts classified as investment products for IFRS reporting.
 
Investment products referred to in the tables for funds under management are unit trusts, mutual funds and similar types of retail fund management arrangements. These are unrelated to insurance products that are classified as investment contracts under IFRS 4, as described in the preceding paragraph, although similar IFRS recognition and measurement principles apply to the acquisition costs and fees attaching to this type of business.
 
New Business Profit has been determined using the European Embedded Value (EEV) methodology set out in our 2011 Half Year Financial Report.
 
In determining the EEV basis value of new business written in the period policies incept, premiums are included in projected cash flows on the same basis of distinguishing annual and single premium business as set out for statutory basis reporting.
 
All data included in this Interim Management Statement (and supplementary statements) is unaudited.
 
Notes to Schedules 1 - 6
 
 
(1a)
Insurance and investment new business for overseas operations has been calculated using average exchange rates. The applicable rate for Jackson for the period to 30 September 2011 is $1.61.
 
(1b)
Insurance and investment new business for overseas operations for 2010 have been calculated using constant exchange rates. The applicable rate for Jackson is $1.61.
 
(2)
New business values are all presented pre-tax.
 
(3)
Annual Equivalents, calculated as regular new business contributions plus ten per cent of single new business contributions, are subject to roundings. PVNBPs are calculated as equalling single premiums plus the present value of expected premiums of new regular premium business. In determining the present value, allowance is made for lapses and other assumptions applied in determining the EEV new business profit.
 
(4)
Balance includes segregated and pooled pension funds, private finance assets and other institutional clients. Other movements reflect the net flows arising from the cash component of a tactical asset allocation fund managed by PPM South Africa.
 
(5)
New business in India is included at Prudential's 26 per cent interest in the India life operation. 
 
(6)
Balance Sheet figures have been calculated at the closing exchange rate.
 
(7)
Sales are converted using the year to date average exchange rate applicable at the time. The sterling results for individual quarters represent the difference between the year to date reported sterling results at successive quarters and will include foreign exchange movements from earlier periods.
 
(8)
New business in China is included at Prudential's 50 per cent interest in the China life operation. 
 
(9)
Mandatory Provident Fund (MPF) product sales in Hong Kong are included at Prudential's 36 per cent interest in Hong Kong MPF operation.
 
 
 
 

 
 
 
SIGNATURES
 
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 
 
Date 08 November 2011
 
 
PRUDENTIAL PUBLIC LIMITED COMPANY
   
 
By: /s/ Clive Burns
   
 
Clive Burns
 
Head of Group Secretariat