pru201511106k.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, 2015

 
 
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-



 
 

 
NEWS RELEASE                                                                                      
 
                                                          PRUDENTIAL PLC
                                                          GROUP COMMUNICATIONS
                                                          12 ARTHUR STREET
                                                          LONDON EC4R 9AQ
                                                          TEL 020 7220 7588
                                                          FAX 020 7548 3725
                                                          www.prudential.co.uk
 
8.15 am (GMT) 10 November 2015
 
PRUDENTIAL PLC THIRD QUARTER 2015 INTERIM MANAGEMENT STATEMENT
 
PRUDENTIAL CONTINUES TO GENERATE STRONG PROFITABLE GROWTH DRIVEN BY ASIA
 
·     Group new business profit of £1,764 million year-to-date, up 13 per cent1,2
 
·     Asia new business profit increased 24 per cent1 to £976 million
 
·     Eastspring total funds under management up 18 per cent1,3 to £82.4 billion
 
·     US separate account assets 4 per cent1 higher at £84.1 billion
 
·     UK new business profit increased 16 per cent2 to £231 million
 
·      M&G third party funds under management lower by 5 per cent, at £127.3 billion, reflecting retail net outflows
 
Mike Wells, Group Chief Executive, said:
 
"Prudential has continued to make good progress in the third quarter, with new business profit for the first nine months of 2015 of £1,764 million, up 13 per cent on a constant exchange rate basis (up 17 per cent on an actual exchange rate basis). This performance reflects strong growth in our Asian and UK life operations and continued new business discipline in the US, reinforcing the diverse and resilient nature of our business during a period of significant global instability.
 
"In Asia, our strategic focus on meeting the protection and savings needs of a growing middle class underpins robust demand for our products. During the first nine months of the year, new business profit increased to £976 million, up 24 per cent on a constant exchange rate basis, reflecting the 27 per cent growth in APE sales to £2,021 million. This demonstrates the strength of our pan-regional platform and our success in optimising country, product and distribution mix to suit prevailing conditions despite short-term macro-economic challenges in some of our key markets. The material volumes of regular premium new business written in each period adds to the highly recurring nature of income generated by our existing portfolio of in-force business. Our Asia asset manager, Eastspring, continued to generate positive net flows in the third quarter despite volatility in many of its major markets, contributing to 18 per cent growth in total funds under management, compared to the prior year.
 
"In the US, separate account assets which are a key driver in determining our ability to generate earnings and cash, were 4 per cent higher year-on-year at £84.1 billion. We continue to write new variable annuity business at attractive economics while managing volumes within our annual risk appetite. In line with this approach, Jackson delivered new business profit of £557 million, down 4 per cent on a constant exchange rate basis (up 5 per cent on an actual exchange rate basis).
 
1  Percentage increases referred to in this news release are stated on a constant exchange rate (CER) basis unless otherwise stated.
2   Following the disposal of the Group's 25 per cent interest in PruHealth and PruProtect in November 2014, the 2014 comparative results of UK insurance operations have been adjusted to exclude results of those businesses.
3   Total funds under management include all internal and external funds.
 
"In our UK life business, new business profit increased by 16 per cent1 to £231 million in the first nine months of the year, reflecting our proactive response to the changes brought about by pension freedom reforms. In our retail business, APE sales were 26 per cent higher, driven by Prudential's market-leading with-profits proposition, which has continued to prove popular with customers, with PruFund APE sales up 84 per cent. At the end of September PruFund assets under management had reached £14.9 billion, 29 per cent higher than at the start of the year. In our wholesale business, we completed two bulk deals in the third quarter, taking the year-to-date total to four, which have generated cumulative APE sales of £149 million and new business profit of £104 million.   
 
 "In asset management, M&G's retail business continued to experience net outflows in the third quarter, mainly reflecting softer consumer sentiment on fixed income assets. This was partially offset by net inflows in institutional business, where M&G retains a good pipeline of new client mandates. Total net outflows in the first nine months of £5.0 billion contributed to a decline of 5 per cent in M&G's third party funds under management to £127.3 billion at 30 September 2015.  
 
"Overall, our strong performance in 2015 continues to demonstrate the successful execution of our strategy in pursuing clearly defined long-term opportunities in Asia, the US and the UK. We remain optimistic about the outlook across the Group, particularly in Asia where the compelling long-term fundamentals of the region are unchanged."
 
1   Following the disposal of the Group's 25 per cent interest in PruHealth and PruProtect in November 2014, the 2014 comparative results of UK insurance operations have been adjusted to exclude results of those businesses.
 
BUSINESS UNIT REVIEW
We continue to comment on our international business performance in local currency terms (expressed on a constant exchange rate basis) to demonstrate underlying performance in a period of currency volatility. We have used this basis in the discussion below for our Asian and US businesses to maintain comparability. It is worth noting that in 2015 the majority of our business operations have experienced favourable currency movements, which produces lower progressions on the constant exchange rate basis than the actual exchange rate basis, contrary to last year. 
 
ASIA
The strength and diversity of our regional platform has ensured the continued delivery of profitable growth despite challenging conditions in some of our key markets. In the first nine months of 2015, new business profit grew 24 per cent to £976 million (26 per cent on an actual exchange rate basis), driven by APE sales growth of 27 per cent (31 per cent on an actual exchange rate basis), despite the impact of moderately less favourable economic conditions.
 
New business performance continues to benefit from our focus on regular premium business, which increased by 31 per cent in the first nine months and accounted for 92 per cent of APE sales. We have seen excellent progress in the agency channel, with APE sales up 30 per cent year-to-date and double-digit growth in eight out of the twelve countries in which we operate. Within the bancassurance channel our five largest relationships, which account for over 90 per cent of total bancassurance volumes, have delivered combined APE sales growth of 17 per cent.
 
In the discrete third quarter, APE sales remained strong, increasing 20 per cent to £655 million, despite significant levels of turbulence in investment markets during the period.
 
Hong Kong's strong performance has continued in the third quarter, contributing to APE sales growth of 73 per cent in the year-to-date. This reflects continued strong momentum in the agency channel, driven by increased manpower and improvements in activity and productivity. We are also seeing good growth in the distribution of our products in the bancassurance channel through our relationship with Standard Chartered Bank (SCB) and higher sales through the broker channel. The long-term drivers of our business in Hong Kong are broad-based, with increasingly material sales of protection business adding to growth in our established par products and strong demand from both our domestic and on-shore Mainland Chinese customers.
 
China APE sales are up 32 per cent in the year-to-date and although growth in the third quarter was lower, at 4 per cent, this principally reflects a marked slowdown in single premium bancassurance sales amid volatility in the domestic stock markets. Regular premium growth remains more robust, up 23 per cent in the third quarter, in line with the year-to-date increase. Our agency business continues to grow strongly, with year-to-date APE sales growth of 36 per cent driven by increases in the agency force and average case sizes.
 
The macro-economic and political environment in Indonesia remains challenging, and includes slower-than-expected progress in government reform initiatives. This continues to suppress consumer sentiment, which is making it more difficult for our agents to close sales. Consequently year-to-date APE sales are 3 per cent lower than the prior year. The long-term prospects for this market remain compelling and we are continuing to invest in building our capabilities and broadening our distribution reach.
 
 
In Singapore, our increased focus on higher value regular premium protection business is enhancing the mix of our agency-sourced sales, with new business profit through this channel increasing 15 per cent in the year-to-date. On a total APE sales basis, the lower average case size of this business combined with the impact of prior year contributions from bancassurance relationships with Maybank and Singpost that were discontinued in 2014, resulted in a 14 per cent decline in the first nine months.
 
Malaysia's success in building its Bumi agency force and activating bancassurance has continued, with year-to-date APE sales up 18 per cent on prior period and Bumi agents now accounting for over 50 per cent of total agency manpower. Sales through our main bancassurance partners in Malaysia, UOB and SCB, have also recorded strong growth driven by the launch of new par products.
 
In other markets, Thailand had a good third quarter with APE sales growth of 29 per cent, including a strong contribution from Thanachart Bank. Our business in the Philippines continues to benefit from the recent refocusing on the agency channel, with increases in active manpower and average case size driving APE sales growth of 19 per cent year-to-date. Agency momentum is also delivering excellent growth in Vietnam with total APE sales up 34 per cent in the first nine months.
 
Our asset management business, Eastspring Investments, has seen net third-party inflows1of £4.9 billion in the first nine months of the year, a record high for this business. Net inflows for the third quarter were more modest than earlier in the year, given the impact of market volatility in this period, although remained positive at £0.4 billion, driven by gross flows that were 26 per cent higher in the period. Overall funds under management2 at 30 September 2015 were £82.4 billion, up 18 per cent on the prior year.
 
1   Net investment flows excluding Eastspring money market funds net inflows of £0.8 billion (2014: net inflows of £0.1 billion).
2  Overall funds under management include all external and internal funds.
 
The scale, resilience and diversity of our business platform in Asia combined with the powerful, structural trends of a rapidly growing and increasingly wealthy middle class population with significant savings and protection needs, continues to underpin our long-term profitable growth prospects in the region.
 
US
In the US, Jackson remains focused on actively managing sales volumes of variable annuities with living benefits to maintain a balanced approach for revenue streams relative to our annual risk appetite. In the first nine months of 2015 Jackson achieved total retail APE sales of £1,227 million, which equates to a 4 per cent decrease compared with the same period last year, reflecting the first half weighting of annual sales in 2014. Including institutional sales, total APE sales were lower by 5 per cent at £1,278 million (up 3 per cent on an actual exchange rate basis).
 
New business profit of £557 million decreased by 4 per cent (up 5 per cent on an actual exchange rate basis), reflecting the lower level of sales volumes and the decline in interest rates compared to the prior period. Although interest rates remain low, the beneficial impact of product initiatives implemented in previous years means that the economics of our business remain attractive. We continue to write highly profitable new business through sales of prudently priced products, with aggregate internal rates of return in excess of 20 per cent and with a payback period of two years.
 
US investment markets continued to be influenced by increased volatility and domestic uncertainties in the third quarter, contributing to a year-to-date decline of 6.7 per cent in the S&P 500 Index and a decrease of 11 basis points in the 10-year Treasury rate. Against this backdrop, Jackson achieved overall net inflows from new business, which more than offset the negative effects of market performance, driving separate account assets 4 per cent higher at £84.1 billion compared to 30 September 2014. The evolution of the separate account asset base remains a key driver of Jackson's earnings and cash.
 
Total variable annuity APE sales for the first nine months decreased by 3 per cent to £1,160 million, continuing to reflect the high sales volumes written in the first half of 2014. Sales of Elite Access, our variable annuity without living benefits, were broadly consistent with those in the prior period at £247 million. Elite Access remains the most popular investment-only variable annuity product in the US market and its success continues to provide diversification to our product mix, with APE sales from variable annuities not featuring living benefits constituting 34 per cent of total variable annuity APE sales (2014: 33 per cent). 
 
Fixed annuity year-to-date APE sales of £35 million were down 20 per cent from the same period last year reflecting the low interest rate environment. Fixed index annuity year-to-date APE sales of £32 million were up 3 per cent.
 
The insurance industry continues to deal with emerging regulatory topics, including the Department of Labor's (DOL) proposed fiduciary standard. Following the public hearings late this summer, there was an additional comment period which ended in September although the outcome remains uncertain at this stage. Jackson, alongside the rest of the industry, continues to engage with key policymakers and awaits the publication of the DOL's final rule.
 
Jackson's fixed income portfolio continues to be positioned defensively to perform well across a wide range of market and macro-economic outcomes and has recorded modest impairments of £17 million in the year-to-date with no defaults. In addition our hedging remains focused on optimising the economics of our exposures over time while maintaining the strength of the balance sheet. Jackson continues to price new business on a conservative basis, prioritising value over volume with its primary focus on delivering earnings and cash. 
 
UK, Europe and Africa
In the first nine months of 2015, Prudential UK delivered a 16 per cent1 increase in new business profit to £231 million and APE sales growth of 21 per cent1 to £762 million. These results reflect our successful response to the new emerging consumer landscape following significant industry reform. 
 
Our retail business achieved strong APE sales growth of 26 per cent1 to £613 million driven by growing demand for our savings and investment products, including our distinctive range of PruFund investments. This reflects the combined strength of our investment proposition and the expanding market for flexible retirement income and pensions products following the implementation of pension freedom reforms in April 2015. Retail new business profit increased by 13 per cent, benefiting from increased sales volumes, partially offset by a lower contribution from individual annuity sales.
 
1   Following the disposal of the Group's 25 per cent interest in PruHealth and PruProtect in November 2014, the 2014 comparative results of UK insurance operations have been adjusted to exclude results of those businesses.
 
Onshore bond APE sales of £186 million increased by 14 per cent and offshore bond APE sales of £53 million rose by 20 per cent in the first nine months. Our ongoing initiatives to diversify and enhance our pensions and retirement propositions continue to show excellent progress, with APE sales in income drawdown more than trebling to £71 million and individual pensions more than doubling to £100 million in the year-to-date.
 
Significant demand for our PruFund multi-asset funds prevails among our target customer base who continue to be attracted by both the performance track record and the benefits of a smoothed return to manage market volatility and reduce risk. Our successful launch in February 2015 of the PruFund range of investment funds within an ISA wrapper has generated APE sales of £48 million with assets under management totalling £444 million at the end of September 2015. In total across all products, PruFund APE sales of £395 million increased by 84 per cent, with total assets under management up 29 per cent since the start of the year to £14.9 billion.
 
Our bulk annuity business completed a further two deals in the third quarter of 2015, taking the year-to-date total to four, generating cumulative APE sales of £149 million and new business profit of £104 million (2014: APE sales of £141 million and new business profit of £88 million). Our approach to bulk transactions in the UK remained one of disciplined participation, focusing on those opportunities where we can bring both significant value to our customers and meet our shareholder return requirements.
 
Through our capabilities in multi-asset investing delivered through the PruFund range, the strength of our brand and diversified distribution, we are well positioned to successfully meet our evolving customer needs in a retirement market that continues to undergo significant change.
 
In Africa, we continue to develop our businesses in Kenya, Ghana and Uganda. We announced long-term bank distribution agreements with Fidelity Bank in Ghana and Standard Chartered in Kenya in August 2015 to complement our fast-growing agency forces.
 
M&G
M&G experienced £2.7 billion of net outflows in the third quarter due to redemptions in the retail market, partially offset by strong institutional net inflows.
 
Retail net outflows in the quarter were £3.9 billion, bringing year-to-date net outflows to £7.3 billion (2014: inflows of £5.3 billion). Flows in the third quarter continued to be influenced by weak investor sentiment for fixed income in addition to high levels of volatility and macroeconomic uncertainties; conditions we expect to persist into the fourth quarter. Our fund diversification strategy, however, continues to drive inflows into M&G's multi-asset and property funds. Total retail funds under management at 30 September 2015 were lower at £63.5 billion (30 September 2014: £73.0 billion).
 
M&G's institutional business generated £1.2 billion of net inflows in the third quarter resulting in cumulative net inflows of £2.3 billion year-to-date (2014: £0.6 billion). We continue to benefit from a strategy focused on delivering a range of higher value added specialist products to our institutional clients. A strong pipeline of new business exists in the form of money committed by clients but not yet invested. External institutional funds under management at 30 September were higher at £63.8 billion (30 September 2014: £61.6 billion).
 
Overall, total M&G funds under management reduced to £247.5 billion from £257.3 billion at 30 September 2014 due to net fund outflows and negative market movements. M&G remains well placed to serve clients thanks to its established strategy of diversification by asset class, product and geography and its focus on long-term investment performance.
 
BALANCE SHEET
Our balance sheet remains resilient and conservatively positioned. As at 30 September 2015, our IGD surplus was estimated at £5.1 billion, after deducting the 2015 interim dividend of £0.3 billion. The IGD surplus is equivalent to a cover of 2.5 times.
 
Solvency II is scheduled to come into force on 1 January 2016. In preparation for this, we submitted our Solvency II internal model applications in June 2015 to the Prudential Regulation Authority (PRA). We have received Matching Adjustment approval and the PRA has indicated that it will conclude its review and approval process of our internal model along with our peers in December 2015.
 
We remain confident that the final Solvency II outcome will confirm Prudential's position as a strongly capitalised group. We will update the market on our Solvency II position at our investor conference on 19 January 2016.
 
OUTLOOK
The Group continues to perform well through 2015, highlighting the quality of our execution and well-defined successful strategy.
 
The material volatility in equity markets in recent months is a reminder that the outlook for global growth prospects remains uncertain and vulnerable to central bank actions. In this context, our significant in-force portfolio provides a material source of high quality recurring income that is a distinguishing feature of all our businesses. This is particularly evident in Asia through the continued provision of long-term regular premium protection and savings products where demand is underpinned by the needs of a fast growing but under-insured middle class population.
 
In the US and UK, we continue to focus on providing products that meet the investment needs of our customers while prioritising earnings and cash. The ability of our businesses to adapt to changing pensions and savings landscapes is a reflection of the Group's long track record in providing customers with evolving and appropriate product propositions.
 
Our businesses are in good shape, our balance sheet remains strong and conservatively positioned and we are confident of being able to deliver strong, profitable growth while providing high quality products and services to a rapidly growing customer base.
 
Q3 2015 Business Unit financial highlights
 
 
New Business Profit (post tax)1
            
 
YTD 2015 £m
  
YTD 2014 £m
  
YTD 2015 v 2014 %
     
AER
  
AER
CER
Asia
976
  
775
  
26
24
US
557
  
530
  
5
(4)
UK - Retail2
127
  
112
  
13
13
Total Group Insurance - excluding UK Wholesale
1,660
  
1,417
  
17
12
UK Wholesale
104
  
88
  
18
18
Total Group2,3
1,764
  
1,505
  
17
13
             
 
Q3 2015 £m
  
Q3 2014 £m
  
Q3 2015 v 2014 %
     
AER
  
AER
CER4
Asia
312
  
281
  
11
12
US
186
  
154
  
21
12
UK - Retail2
47
  
42
  
12
12
Total Group Insurance - excluding UK Wholesale
545
  
477
  
14
12
UK Wholesale
29
  
19
  
53
53
Total Group2
574
  
496
  
16
14
 
 
Sales - APE
            
 
YTD 2015 £m
  
YTD 2014 £m
  
YTD 2015 v 2014 %
     
AER
  
AER
CER
Asia
2,021
  
1,544
  
31
27
US
1,278
  
1,235
  
3
(5)
UK- Retail2
613
  
487
  
26
26
Total Group Insurance - excluding UK Wholesale
3,912
  
3,266
  
20
14
UK Wholesale
149
  
141
  
6
6
Total Group2
4,061
  
3,407
  
19
14
             
             
 
Q3 2015 £m
  
Q3 2014 £m
  
Q3 2015 v 2014 %
     
AER
  
AER
CER4
Asia
655
  
548
  
20
20
US
421
  
364
  
16
7
UK- Retail2
220
  
172
  
28
28
Total Group Insurance - excluding UK Wholesale
1,296
  
1,084
  
20
17
UK Wholesale
32
  
37
  
(14)
(14)
Total Group2
1,328
  
1,121
  
18
16
 
Investment Flows
 
 
 
YTD 2015 £bn
  
YTD 2014 £bn
  
 YTD 2015 v 2014 %5
     
AER
  
AER
CER
Gross inflows
            
Retail
18.0
  
21.6
  
(16)
(16)
Institutional
9.5
  
6.8
  
38
38
M&G - total
27.5
  
28.4
  
(3)
(3)
Eastspring Investments6
16.4
  
10.6
  
55
55
Total Group
43.9
  
39.0
  
12
12
Net inflows (outflows)
            
Retail
(7.3)
  
5.3
  
(238)
(238)
Institutional
2.3
  
0.6
  
305
305
M&G - total
(5.0)
  
5.9
  
(186)
(186)
Eastspring Investments6
4.9
  
3.7
  
33
34
Total Group
(0.1)
  
9.6
  
(101)
(101)
1   New business profit has been calculated by applying the assumptions set out in schedule 5.
2   Following the disposal of the Group's 25 per cent interest in PruHealth and PruProtect in November 2014, the 2014 comparative results of UK insurance operations have been adjusted to exclude results of those businesses.
3  New business profit is calculated using end-of-period economic assumptions. If 2014 new business profit is re-expressed based on 30 September 2015 interest rates the total Group insurance new business profit would have grown     by 17 per cent on a constant exchange rate basis. A more detailed analysis is provided in schedule 4(D).
4  Discrete third quarter CER growth rates are calculated based on the quarterly CER APE sales and new business profit disclosed in schedules 2C and 4C respectively.
5   Percentages based on unrounded numbers in millions.
6   Gross and net investment flows exclude year-to-date Eastspring Money Market Funds (MMF) gross inflows of £70.4 billion (2014: £50.4 billion) and net inflows of £0.8 billion (2014: net inflows of £0.1 billion).
 
 
             
 
Q3 2015 £bn
  
Q3 2014 £bn
  
Q3 2015 v Q3 2014 %1
     
AER
  
AER
CER
Gross inflows
            
Retail
3.8
  
6.8
  
(45)
(45)
Institutional
3.3
  
2.3
  
44
44
M&G - total
7.1
  
9.1
  
(22)
(22)
Eastspring Investments2
4.7
  
3.7
  
27
26
Total Group
11.8
  
12.8
  
(8)
(8)
Net inflows (outflows)
            
Retail
(3.9)
  
1.5
  
(357)
(357)
Institutional
1.2
  
0.2
  
801
801
M&G - total
(2.7)
  
1.7
  
(262)
(262)
Eastspring Investments2
0.4
  
1.2
  
(69)
(68)
Total Group
(2.3)
  
2.9
  
(180)
(181)
 
 
Funds Under Management3
            
 
 YTD 2015 £bn
  
YTD 2014 £bn
  
 YTD 2015 v 2014 %1
     
AER
  
AER
CER
M&G
247.5
  
257.3
  
(4)
(4)
Eastspring Investments
82.4
  
72.6
  
14
18
Total Group
329.9
  
329.9
  
- 
1
External Funds Under Management
            
M&G
127.3
  
134.6
  
(5)
(5)
Eastspring Investments4
28.1
  
22.9
  
22
24
Total Group
155.4
  
157.5
  
(1)
(1)
1   Percentages based on unrounded numbers in millions.
2   Gross and net investment flows exclude quarterly Eastspring Money Market Funds (MMF) gross inflows of £25.3 billion (2014: £18.3 billion) and net inflows of £0.2 billion (2014: net inflows of £0.1 billion).
3   Total funds under management include all external and internal funds.
4  External funds under management for Eastspring excluding money market funds as set out in schedule 3.
 
ENDS
 
Enquiries:
 
Media
  
Investors/Analysts
  
Jonathan Oliver
+44 (0)20 7548 3719
Raghu Hariharan
+44 (0)20 7548 2871
Tom Willetts
+44 (0)20 7548 2776
Richard Gradidge
+44 (0)20 7548 3860
 
Notes:
 
1          Annual premium equivalent (APE) sales comprise regular premium sales plus one-tenth of single premium insurance sales and are subject to rounding.
 
2          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.
 
3          NBP assumptions for the period are detailed in the accompanying schedule 5.
 
4          Period-on-period percentage increases are stated on a constant exchange rate basis unless otherwise stated. Constant exchange rates results are calculated by translating prior period results using the current period foreign
            exchange rate i.e. current period average rates for the income statement and current period closing rates for the balance sheet.
 
5          There will be a conference call today for the media at 09.00 (UK) / 17.00 (Hong Kong) hosted by Mike Wells, Group Chief Executive. Dial in telephone number: (UK) +44 (0)20 3139 4830 (Hong Kong) +852 3068 9834 Pin:
            80144973#.
 
6          There will be a conference call today for analysts and investors at 10.30 (UK) / 18.30 (Hong Kong) hosted by Mike Wells, Group Chief Executive. Dial in telephone number: +44 (0)20 3139 4830 / 0808 237 0030 (Freephone UK)
            Pin: 35089041#: Playback (PIN: 663354#) +44(0)20 3426 2807 / 0808 237 0026 (Freephone UK - available from 12.30 (UK Time) on 10 November 2015 until 23.59 (UK Time) on 9 December 2015). Please follow the link for
            international dial-in numbers - http://wpc.1726.planetstream.net/001726/FEL_Events_International_Access_List.pdf 
 
7          High resolution photographs are available to the media free of charge by calling the media office on +44 (0) 207 548 2466.   
 
8          Prudential plc is incorporated in England and Wales, and its affiliated companies constitute one of the world's leading financial service groups serving around 25 million customers and have £505 billion of assets under
           management (as at 30 June 2015). Prudential is listed on the stock exchanges in London, Hong Kong, Singapore and New York. 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.
 
9          Forward-Looking Statements 

    This document may contain 'forward-looking statements' with respect to certain of Prudential's plans and its goals and expectations relating to its future financial condition, performance, results, strategy and objectives.              Statements that are not historical facts, including statements about Prudential's beliefs and expectations and including, without limitation, statements containing the words "may", "will", "should", "continue",             "aims", "estimates", "projects", "believes", "intends", "expects", "plans", "seeks" and "anticipates", and words of similar meaning, are forward-looking statements. These statements are based on plans, estimates and             projections as at the time they are made, and therefore undue reliance should not be placed 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, including fluctuations in interest rates and exchange rates and the potential for a sustained low-interest rate environment, and the performance of financial markets generally; the policies and actions of            regulatory authorities, including, for example, new government initiatives and the effect of the European Union's 'Solvency II' requirements on Prudential's capital maintenance requirements; the impact of continuing            designation as a Global Systemically Important Insurer; or 'G-SII'; the impact of competition, economic uncertainty, 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, accounting standards or relevant regulatory            frameworks, 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 'Risk factors' heading in its most recent Annual            Report and the 'Risk Factors' heading 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 'Risk Factors' heading of any subsequent Prudential Half           Year Financial Report. Prudential's most recent Annual Report, Form 20-F and any subsequent Half Year Financial Report are/will be available on its website at www.prudential.co.uk.
 
      Any forward-looking statements contained in this document speak only as of the date on which they are made. Prudential expressly disclaims any obligation to update any of the forward-looking statements contained           in this document 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 UK Prospectus Rules, the UK Listing Rules, the           UK Disclosure and Transparency Rules, the Hong Kong Listing Rules, the SGX-ST listing rules or other applicable laws and regulations.
 
 
10       The financial information presented in this Interim Management Statement and accompanying schedules is unaudited.
 
Supplementary schedules and appendices
 
Schedule 1A - New Business Insurance Operations (Actual Exchange Rates)
 
 
                                 
   
Single
  
Regular
  
Annual Equivalents(2)
  
PVNBP(2)
   
Q3 2015
Q3 2014
    
Q3 2015
Q3 2014
    
Q3 2015
Q3 2014
    
Q3 2015
Q3 2014
  
   
YTD
YTD
+/- (%)
  
YTD
YTD
+/- (%)
  
YTD
YTD
+/- (%)
  
YTD
YTD
+/- (%)
   
£m
£m
    
£m
£m
    
£m
£m
    
£m
£m
  
Group Insurance Operations
                                
Asia (1a)
  
 1,652
 1,598
3%
  
 1,856
 1,384
34%
  
 2,021
 1,544
31%
  
 10,847
 8,408
29%
US(1a)
  
 12,782
 12,352
3%
  
 -  
 -  
N/A
  
 1,278
 1,235
3%
  
 12,782
 12,352
3%
UK(11)
  
 6,328
 4,991
27%
  
 130
 129
1%
  
 762
 628
21%
  
 6,816
 5,459
25%
Group Total (11)
  
 20,762
 18,941
10%
  
 1,986
 1,513
31%
  
 4,061
 3,407
19%
  
 30,445
 26,219
16%
     
  
      
  
      
  
      
  
  
Asia Insurance Operations(1a)
                                
Cambodia
  
 -  
 -  
N/A
  
 6
 2
200%
  
 6
 2
200%
  
 28
 9
211%
Hong Kong
  
 341
286
19%
  
 768
395
94%
  
 802
 424
89%
  
 4,672
 2,501
87%
Indonesia
  
 186
 193
(4)%
  
 228
 245
(7)%
  
 247
 264
(6)%
  
 986
 1,090
(10)%
Malaysia
  
 79
 70
13%
  
 144
 132
9%
  
 152
 139
9%
  
 889
 899
(1)%
Philippines
  
 119
 84
42%
  
 33
 27
22%
  
 44
 35
26%
  
 223
 167
34%
Singapore
  
 360
 475
(24)%
  
 188
 210
(10)%
  
 224
 258
(13)%
  
 1,604
 1,868
(14)%
Thailand
  
 51
 72
(29)%
  
 64
 53
21%
  
 69
 60
15%
  
 306
 278
10%
Vietnam
  
 4
 2
100%
  
 55
 39
41%
  
 55
 39
41%
  
 228
 161
42%
SE Asia Operations
  
 1,140
 1,182
(4)%
  
 1,486
 1,103
35%
  
 1,599
 1,221
31%
  
 8,936
 6,973
28%
 inc. Hong Kong
                                
China(6)
  
 290
 172
69%
  
 86
 63
37%
  
 115
 80
44%
  
 619
 414
50%
Korea
  
 158
 156
1%
  
 96
 64
50%
  
 112
 80
40%
  
 621
 433
43%
Taiwan
  
 36
 66
(45)%
  
 89
 81
10%
  
 93
 88
6%
  
 316
 336
(6)%
India(4)
  
 28
 22
27%
  
 99
 73
36%
  
 102
 75
36%
  
 355
 252
41%
Total Asia Insurance Operations
  
 1,652
 1,598
3%
  
 1,856
 1,384
34%
  
 2,021
 1,544
31%
  
 10,847
 8,408
29%
     
  
      
  
      
  
      
  
  
US Insurance Operations(1a)
    
  
      
  
      
  
      
  
  
Variable Annuities
  
 9,128
 8,740
4%
  
 -  
 -  
N/A
  
 913
 874
4%
  
 9,128
 8,740
4%
Elite Access (Variable Annuity)
  
 2,471
 2,293
8%
  
 -  
 -  
N/A
  
 247
 229
8%
  
 2,471
 2,293
8%
Fixed Annuities
  
 350
 405
(14)%
  
 -  
 -  
N/A
  
 35
 41
(15)%
  
 350
 405
(14)%
Fixed Index Annuities
  
 324
 280
16%
  
 -  
 -  
N/A
  
 32
 28
14%
  
 324
 280
16%
Wholesale
  
 509
 634
(20)%
  
 -  
 -  
N/A
  
 51
 63
(19)%
  
 509
 634
(20)%
Total US Insurance Operations
  
 12,782
 12,352
3%
  
 -  
 -  
N/A
  
 1,278
 1,235
3%
  
 12,782
 12,352
3%
                                 
UK & Europe Insurance Operations(11)
                                
Individual Annuities
  
 426
 861
(51)%
  
 -  
 -  
N/A
  
 43
 86
(50)%
  
 426
 861
(51)%
Bonds
  
 2,388
 2,065
16%
  
 -  
 -  
N/A
  
 239
 207
15%
  
 2,388
 2,066
16%
Corporate Pensions
  
 84
 76
11%
  
 99
 109
(9%)
  
 107
 117
(9)%
  
 430
 455
(5)%
Individual Pensions
  
 779
 330
136%
  
 22
 16
38%
  
 100
 48
108%
  
 874
 393
122%
Income Drawdown
  
 712
 230
210%
  
 -  
 -  
N/A
  
 71
 23
209%
  
 712
 230
210%
Other Products
  
 451
 16
2,719%
  
 9
 4
125%
  
 53
 6
783%
  
 498
 41
1,115%
Total Retail
  
 4,840
 3,578
35%
  
 130
 129
1%
  
 613
 487
26%
  
 5,328
 4,046
32%
Wholesale
  
 1,488
 1,413
5%
  
 -  
 -  
N/A
  
 149
 141
6%
  
 1,488
 1,413
5%
Total UK & Europe Insurance Operations
  
 6,328
 4,991
27%
  
 130
 129
1%
  
 762
 628
21%
  
 6,816
 5,459
25%
Group Total (11)
  
 20,762
 18,941
10%
  
 1,986
 1,513
31%
  
 4,061
 3,407
19%
  
 30,445
 26,219
16%
 
Schedule 1B - New Business Insurance Operations (2014 at Constant Exchange Rates)
 
Note:    In schedule 1B constant exchange rates have been used to calculate insurance new business for overseas operations for all periods in 2014.
 
 
                               
 
Single
  
Regular
  
Annual Equivalents(2)
  
PVNBP(2)
 
2015
2014
    
2015
2014
    
2015
2014
    
2015
2014
  
 
YTD
YTD
+/- (%)
  
YTD
YTD
+/- (%)
  
YTD
YTD
+/- (%)
  
YTD
YTD
+/- (%)
 
£m
£m
    
£m
£m
    
£m
£m
    
£m
£m
  
Group Insurance Operations
                              
Asia (1a) (1b)
 1,652
 1,641
1%
  
 1,856
 1,422
31%
  
 2,021
 1,586
27%
  
 10,847
 8,635
26%
US(1a) (1b)
 12,782
 13,458
(5)%
  
 -  
 -  
N/A
  
 1,278
 1,346
(5)%
  
 12,782
 13,458
(5)%
UK(11)
 6,328
 4,991
27%
  
 130
 129
1%
  
 762
 628
21%
  
 6,816
 5,459
25%
Group Total (11)
 20,762
 20,090
3%
  
 1,986
 1,551
28%
  
 4,061
 3,560
14%
  
 30,445
 27,552
11%
                               
Asia Insurance Operations(1a) (1b)
                              
Cambodia
 -  
 -  
N/A
  
 6
 2
200%
  
 6
 2
200%
  
 28
 10
180%
Hong Kong
 341
 311
10%
  
 768
 432
78%
  
 802
 463
73%
  
 4,672
 2,725
71%
Indonesia
 186
 186
0%
  
 228
 235
(3)%
  
 247
 254
(3)%
  
 986
 1,050
(6)%
Malaysia
 79
 65
22%
  
 144
 123
17%
  
 152
 129
18%
  
 889
 839
6%
Philippines
 119
 90
32%
  
 33
 28
18%
  
 44
 37
19%
  
 223
 178
25%
Singapore
 360
 477
(25)%
  
 188
 212
(11)%
  
 224
 259
(14)%
  
 1,604
 1,876
(14)%
Thailand
 51
 76
(33)%
  
 64
 54
19%
  
 69
 62
11%
  
 306
 291
5%
Vietnam
 4
 2
100%
  
 55
 41
34%
  
 55
 41
34%
  
 228
 171
33%
SE Asia Operations
 1,140
 1,207
(6)%
  
 1,486
 1,127
32%
  
 1,599
 1,247
28%
  
 8,936
 7,140
25%
inc. Hong Kong
                              
China(6)
 290
 185
57%
  
 86
 68
26%
  
 115
 87
32%
  
 619
 445
39%
Korea
 158
 158
0%
  
 96
 65
48%
  
 112
 81
38%
  
 621
 438
42%
Taiwan
 36
 68
(47)%
  
 89
 86
3%
  
 93
 93
0%
  
 316
 350
(10)%
India(4)
 28
 23
22%
  
 99
 76
30%
  
 102
 78
31%
  
 355
 262
35%
Total Asia Insurance Operations
 1,652
 1,641
1%
  
 1,856
 1,422
31%
  
 2,021
 1,586
27%
  
 10,847
 8,635
26%
                               
US Insurance Operations(1a) (1b)
                              
Variable Annuities
 9,128
 9,523
(4)%
  
 -  
 -  
N/A
  
 913
 952
(4)%
  
 9,128
 9,523
(4)%
Elite Access (Variable Annuity)
 2,471
 2,498
(1)%
  
 -  
 -  
N/A
  
 247
 250
(1)%
  
 2,471
 2,498
(1)%
Fixed Annuities
 350
 441
(21)%
  
 -  
 -  
N/A
  
 35
 44
(20)%
  
 350
 441
(21)%
Fixed Index Annuities
 324
 305
6%
  
 -  
 -  
N/A
  
 32
 31
3%
  
 324
 305
6%
Wholesale
 509
 691
(26)%
  
 -  
 -  
N/A
  
 51
 69
(26)%
  
 509
 691
(26)%
Total US Insurance Operations
 12,782
 13,458
(5)%
  
 -  
 -  
N/A
  
 1,278
 1,346
(5)%
  
 12,782
 13,458
(5)%
                               
UK & Europe Insurance Operations(11)
                              
Individual Annuities
 426
 861
(51)%
  
 -  
 -  
N/A
  
 43
 86
(50)%
  
 426
 861
(51)%
Bonds
 2,388
 2,065
16%
  
 -  
 -  
N/A
  
 239
 207
15%
  
 2,388
 2,066
16%
Corporate Pensions
 84
 76
11%
  
 99
 109
(9)%
  
 107
 117
(9)%
  
 430
 455
(5)%
Individual Pensions
 779
 330
136%
  
 22
 16
38%
  
 100
 48
108%
  
 874
 393
122%
Income Drawdown
 712
 230
210%
  
 -  
 -  
N/A
  
 71
 23
209%
  
 712
 230
210%
Other Products
 451
 16
2,719%
  
 9
 4
125%
  
 53
 6
783%
  
 498
 41
1,115%
Total Retail
 4,840
 3,578
35%
  
 130
 129
1%
  
 613
 487
26%
  
 5,328
 4,046
32%
Wholesale
 1,488
 1,413
5%
  
 -  
 -  
N/A
  
 149
 141
6%
  
 1,488
 1,413
5%
Total UK & Europe Insurance Operations
 6,328
 4,991
27%
  
 130
 129
1%
  
 762
 628
21%
  
 6,816
 5,459
25%
Group Total (11)
 20,762
 20,090
3%
  
 1,986
 1,551
28%
  
 4,061
 3,560
14%
  
 30,445
 27,552
11%
 
Schedule 2A - Total Insurance New Business APE - By Quarter (Actual Exchange Rates)
 
 
 
2014
  
2015
  
 
Q1
Q2
Q3
Q4
  
Q1
Q2
Q3
  
 
 
£m
£m
£m
£m
  
£m
£m
£m
  
Group Insurance Operations
                  
Asia (1a)
 507
 489
 548
 693
  
 681
685
 655
  
US(1a)
 432
 439
 364
 321
  
 400
457
 421
  
UK (11)
 230
 189
 209
 206
  
 169
341
 252
  
Group Total (11)
 1,169
 1,117
 1,121
 1,220
  
 1,250
1,483
 1,328
  
                   
Asia Insurance Operations(1a)
                  
Cambodia
 -  
 1
 1
 1
  
 2
1
 3
  
Hong Kong
 128
 130
 166
 221
  
 246
273
283
  
Indonesia
 86
 98
 80
 121
  
 93
90
64
  
Malaysia
 43
 48
 48
 62
  
 54
51
47
  
Philippines
 11
 11
 13
 16
  
 14
15
15
  
Singapore
 87
 85
 86
 99
  
 72
81
71
  
Thailand
 25
 17
 18
 23
  
 28
20
21
  
Vietnam
 11
 12
 16
 22
  
 13
21
21
  
SE Asia Operations inc. Hong Kong
 391
 402
 428
 565
  
 522
552
 525
  
China(6)
 38
 19
 23
 25
  
 56
33
26
  
Korea
 26
 22
 32
 33
  
 31
43
38
  
Taiwan
 24
 30
 34
 36
  
 28
33
32
  
India(4)
 28
 16
 31
 34
  
 44
24
 34
  
Total Asia Insurance Operations
 507
 489
 548
 693
  
 681
685
 655
  
                   
US Insurance Operations(1a)
                  
Variable Annuities
 317
 297
 260
 216
  
 272
334
307
  
Elite Access (Variable Annuity)
 69
 80
 80
 82
  
 74
92
81
  
Fixed Annuities
 12
 15
 14
 12
  
 11
12
12
  
Fixed Index Annuities
 8
 10
 10
 9
  
 10
11
11
  
Wholesale
 26
 37
 -  
 2
  
 33
8
10
  
Total US Insurance Operations
 432
 439
 364
 321
  
 400
457
 421
  
                   
UK & Europe Insurance Operations(11)
                  
Individual Annuities
 36
 27
 23
 20
  
 14
14
15
  
Bonds
 63
 67
 77
 87
  
 76
80
83
  
Corporate Pensions
 40
 39
 38
 30
  
 33
43
31
  
Individual Pensions
 12
 15
 21
 24
  
 27
35
 38
  
Income Drawdown
 5
 7
 11
 12
  
 14
25
32
  
Other Products
 1
 3
 2
 3
  
 5
27
21
  
Total Retail
 157
 158
 172
 176
  
 169
224
220
  
Wholesale
 73
 31
 37
 30
  
 -  
117
32
  
Total UK & Europe Insurance Operations
 230
 189
 209
 206
  
 169
341
 252
  
Group Total(11)
 1,169
 1,117
 1,121
 1,220
  
 1,250
1,483
 1,328
  
 
Schedule 2B - Total Insurance New Business APE - By Quarter (2014 at Constant Exchange Rates)
 
Note:   In schedule 2B constant exchange rates have been used to calculate insurance new business for overseas operations for all periods in 2014.
 
 
 
2014
  
2015
  
 
Q1
 
Q2
Q3
Q4
  
Q1
Q2
Q3
  
 
£m
£m
£m
£m
  
£m
£m
£m
  
Group Insurance Operations
                  
Asia(1b)
 520
 503
 563
 694
  
 681
685
 655
  
US(1b)
 467
 481
 398
 327
  
 400
457
 421
  
UK (11)
 230
 189
 209
 206
  
 169
341
 252
  
Group Total(11)
 1,217
 1,173
 1,170
 1,227
  
 1,250
1,483
 1,328
  
                   
Asia Insurance Operations(1b)
                  
Cambodia
 -  
 1
 1
 1
  
 2
1
 3
  
Hong Kong
 139
 142
 182
 231
  
 246
273
 283
  
Indonesia
 83
 94
 77
 115
  
 93
90
 64
  
Malaysia
 41
 44
 44
 58
  
 54
51
 47
  
Philippines
 11
 13
 13
 17
  
 14
15
 15
  
Singapore
 87
 86
 86
 97
  
 72
81
 71
  
Thailand
 26
 19
 17
 24
  
 28
20
 21
  
Vietnam
 11
 14
 16
 23
  
 13
21
 21
  
SE Asia Operations inc. Hong Kong
 398
 413
 436
 566
  
 522
552
 525
  
China(6)
 41
 20
 26
 26
  
 56
33
 26
  
Korea
 27
 22
 32
 32
  
 31
43
 38
  
Taiwan
 25
 31
 37
 35
  
 28
33
 32
  
India(4)
 29
 17
 32
 35
  
 44
24
 34
  
Total Asia Insurance Operations
 520
 503
 563
 694
  
 681
685
 655
  
                   
US Insurance Operations(1b)
                  
Variable Annuities
 343
 325
 284
 220
  
 272
334
 307
  
Elite Access (Variable Annuity)
 74
 89
 87
 84
  
 74
92
 81
  
Fixed Annuities
 13
 16
 15
 13
  
 11
12
 12
  
Fixed Index Annuities
 9
 11
 11
 9
  
 10
11
 11
  
Wholesale
 28
 40
 1
 1
  
 33
8
 10
  
Total US Insurance Operations
 467
 481
 398
 327
  
 400
457
 421
  
                   
UK & Europe Insurance Operations(11)
                  
Individual Annuities
 36
 27
 23
 20
  
 14
14
 15
  
Bonds
 63
 67
 77
 87
  
 76
80
 83
  
Corporate Pensions
 40
 39
 38
 30
  
 33
43
 31
  
Individual Pensions
 12
 15
 21
 24
  
 27
35
 38
  
Income Drawdown
 5
 7
 11
 12
  
 14
25
 32
  
Other Products
 1
 3
 2
 3
  
 5
27
 21
  
Total Retail
 157
 158
 172
 176
  
 169
224
 220
  
Wholesale
 73
 31
 37
 30
  
 -  
117
 32
  
Total UK & Europe Insurance Operations
230
189
209
206
  
169
341
252
  
Group Total(11)
1,217
1,173
1,170
1,227
  
1,250
1,483
1,328
  
 
Schedule 2C - Total Insurance New Business APE - By Quarter (2015 and 2014 at Constant Exchange Rates)
 
Note:   In schedule 2C constant exchange rates have been used to calculate insurance new business for overseas operations for all periods in 2014 and 2015 i.e the average exchange rates for the period ended 30 September 2015 are                applied to each discrete quarter for 2014 and 2015.
 
 
 
2014
  
2015
  
 
Q1
Q2
Q3
Q4
  
Q1
Q2
Q3
  
 
 
£m
£m
 
£m
 
£m
  
£m
£m
£m
  
Group Insurance Operations
                  
Asia(1c)
 520
 503
 563
 694
  
 664
679
 678
  
US(1c)
 467
 481
 398
 327
  
 395
458
 425
  
UK (11)
 230
 189
 209
 206
  
 169
341
 252
  
Group Total(11)
 1,217
 1,173
 1,170
 1,227
  
 1,228
1,478
 1,355
  
                   
Asia Insurance Operations(1c)
                  
Cambodia
 -  
 1
 1
 1
  
 2
1
 3
  
Hong Kong
 139
 142
 182
 231
  
 243
273
 286
  
Indonesia
 83
 94
 77
 115
  
 88
88
 71
  
Malaysia
 41
 44
 44
 58
  
 51
50
 51
  
Philippines
 11
 13
 13
 17
  
 13
16
 15
  
Singapore
 87
 86
 86
 97
  
 71
80
 73
  
Thailand
 26
 19
 17
 24
  
 27
20
 22
  
Vietnam
 11
 14
 16
 23
  
 13
20
 22
  
SE Asia Operations inc. Hong Kong
 398
 413
 436
 566
  
 508
548
 543
  
China(6)
 41
 20
 26
 26
  
 56
32
 27
  
Korea
 27
 22
 32
 32
  
 30
42
 40
  
Taiwan
 25
 31
 37
 35
  
 27
33
 33
  
India(4)
 29
 17
 32
 35
  
 43
24
 35
  
Total Asia Insurance Operations
 520
 503
 563
 694
  
 664
679
 678
  
                   
US Insurance Operations(1c)
                  
Variable Annuities
 343
 325
 284
 220
  
 269
334
 310
  
Elite Access (Variable Annuity)
 74
 89
 87
 84
  
 73
92
 82
  
Fixed Annuities
 13
 16
 15
 13
  
 11
12
 12
  
Fixed Index Annuities
 9
 11
 11
 9
  
 10
11
 11
  
Wholesale
 28
 40
 1
 1
  
 32
9
 10
  
Total US Insurance Operations
 467
 481
 398
 327
  
 395
458
 425
  
                   
UK & Europe Insurance Operations(11)
                  
Individual Annuities
 36
 27
 23
 20
  
 14
14
 15
  
Bonds
 63
 67
 77
 87
  
 76
80
 83
  
Corporate Pensions
 40
 39
 38
 30
  
 33
43
 31
  
Individual Pensions
 12
 15
 21
 24
  
 27
35
 38
  
Income Drawdown
 5
 7
 11
 12
  
 14
25
 32
  
Other Products
 1
 3
 2
 3
  
 5
27
 21
  
Total Retail
157
158
172
176
  
 169
224
 220
  
Wholesale
 73
 31
 37
 30
  
 -  
117
 32
  
Total UK & Europe Insurance Operations
230
189
209
206
  
169
341
252
  
Group Total(11)
1,217
1,173
1,170
1,227
  
1,228
1,478
1,355
  
 
Schedule 3 - Investment Operations - By Quarter (Actual Exchange Rates)
           
 
   
2014
  
2015
  
   
Q1
Q2
Q3
Q4 
  
Q1
Q2
Q3
  
   
 
£m
£m
£m
£m 
  
£m
£m
£m
  
Group Investment Operations
                    
Opening FUM
  
143,916
147,914
153,849
157,533
  
162,380
169,345
163,488
  
Net Flows:(8)
  
2,571
4,123
2,893
2,930
  
2,990
(804)
(2,314)
  
 - Gross Inflows
  
12,146
14,045
12,847
13,670
  
17,512
14,566
11,839
  
 - Redemptions
  
(9,575)
(9,922)
(9,954)
(10,740)
  
(14,522)
(15,370)
(14,153)
  
Other Movements
  
1,427
1,812
791
1,917
  
3,975
(5,053)
(5,809)
  
Total Group Investment Operations(10)
  
147,914
153,849
157,533
162,380
  
169,345
163,488
155,365
  
                     
M&G
                    
Retail
                    
Opening FUM
  
67,202
68,981
71,941
73,012
  
74,289
75,673
69,158
  
Net Flows:
  
1,291
2,493
1,531
1,371
  
558
(3,976)
(3,939)
  
 - Gross Inflows
  
7,305
7,468
6,801
7,414
  
8,592
5,672
3,760
  
 - Redemptions
  
(6,014)
(4,975)
(5,270)
(6,043)
  
(8,034)
(9,648)
(7,699)
  
Other Movements
  
488
467
(460)
(94)
  
826
(2,539)
(1,755)
  
Closing FUM
  
68,981
71,941
73,012
74,289
  
75,673
69,158
63,464
  
                     
Comprising amounts for:
                    
   UK
  
42,199
42,392
41,756
40,705
  
41,143
38,701
36,457
  
   Europe (excluding UK)
  
25,244
27,927
29,622
31,815
  
32,675
28,726
25,388
  
   South Africa
  
1,538
1,622
1,634
1,769
  
1,855
1,731
1,619
  
   
68,981
71,941
73,012
74,289
  
75,673
69,158
63,464
  
                     
Institutional(3)
                    
Opening FUM
  
58,787
59,736
60,830
61,572
  
62,758
63,838
64,242
  
Net Flows:
  
152
275
138
(164)
  
122
921
1,243
  
 - Gross Inflows
  
1,655
2,894
2,295
2,185
  
3,712
2,449
3,312
  
 - Redemptions
  
(1,503)
(2,619)
(2,157)
(2,349)
  
(3,590)
(1,528)
(2,069)
  
Other Movements
  
797
819
604
1,350
  
958
(517)
(1,640)
  
Closing FUM
  
59,736
60,830
61,572
62,758
  
63,838
64,242
63,845
  
                     
Total M&G Investment Operations
  
128,717
132,771
134,584
137,047
  
139,511
133,400
127,309
  
                     
PPM South Africa FUM included in Total M&G
  
4,720
4,815
4,905
5,203
  
5,456
5,108
4,628
  
                     
Eastspring - excluding MMF(8)
                    
Equity/Bond/Other(7)
                    
Opening FUM
  
16,109
16,753
18,259
19,893
  
21,893
25,687
26,017
  
Net Flows:
  
540
1,063
1,127
1,640
  
2,133
2,102
225
  
 - Gross Inflows
  
2,546
3,285
3,583
3,760
  
5,007
6,082
4,439
  
 - Redemptions
  
(2,006)
(2,222)
(2,456)
(2,120)
  
(2,874)
(3,980)
(4,214)
  
Other Movements
  
104
443
507
360
  
1,661
(1,772)
(2,067)
  
Closing FUM(5)
  
16,753
18,259
19,893
21,893
  
25,687
26,017
24,175
  
                     
Third Party Institutional Mandates
                    
Opening FUM
  
1,818
2,444
2,819
3,056
  
3,440
4,147
4,071
  
Net Flows:
  
588
292
97
83
  
177
149
157
  
 - Gross Inflows
  
640
398
168
311
  
201
363
328
  
 - Redemptions
  
(52)
(106)
(71)
(228)
  
(24)
(214)
(171)
  
Other Movements
  
38
83
140
301
  
530
(225)
(347)
  
Closing FUM(5)
  
2,444
2,819
3,056
3,440
  
4,147
4,071
3,881
  
                     
Total Eastspring Investment Operations
  
19,197
21,078
22,949
25,333
  
29,834
30,088
28,056
  
                     
US
                    
Curian - FUM(5) (9)
  
6,781
6,948
7,421
7,933
  
8,557
8,078
4,526
  
Schedule 4A - Total Insurance New Business Profit (Actual Exchange Rates)
 
 
 
2014
  
2015
  
 
Q1
Q2
Q3
Q4
  
Q1
Q2 
Q3
  
 
YTD
YTD
YTD
YTD
  
YTD
YTD 
YTD
  
 
£m
£m
£m
£m
  
£m
£m 
£m 
  
                   
New Business Profit(1a)
                  
Total Asia Insurance Operations
243
494
775
1,162
  
309
664
976
  
Total US Insurance Operations
195
376
530
694
  
153
371
557
  
Total UK & Europe Insurance Operations(11)
88
139
200
259
  
34
155
231
  
Group Total (11)
526
1,009
1,505
2,115
  
496
1,190
1,764
  
                   
Annual Equivalent(1a) (2)
                  
Total Asia Insurance Operations
507
996
1,544
2,237
  
681
1,366
2,021
  
Total US Insurance Operations
432
871
1,235
1,556
  
400
857
1,278
  
Total UK & Europe Insurance Operations(11)
230
419
628
834
  
169
510
762
  
Group Total(11)
1,169
2,286
3,407
4,627
  
1,250
2,733
4,061
  
                   
New Business Margin (NBP as % of APE)
                  
Total Asia Insurance Operations
48%
50%
50%
52%
  
45%
49%
48%
  
Total US Insurance Operations
45%
43%
43%
45%
  
38%
43%
44%
  
Total UK & Europe Insurance Operations
38%
33%
32%
31%
  
20%
30%
30%
  
Group Total
45%
44%
44%
46%
  
40%
44%
43%
  
                   
PVNBP(1a) (2)
                  
Total Asia Insurance Operations
2,690
5,378
8,408
12,331
  
3,643
7,340
10,847
  
Total US Insurance Operations
4,323
8,703
12,352
15,555
  
3,998
8,574
12,782
  
Total UK & Europe Insurance Operations(11)
2,024
3,644
5,459
7,305
  
1,450
4,524
6,815
  
Group Total(11)
9,037
17,725
26,219
35,191
  
9,091
20,438
30,444
  
                   
New Business Margin (NBP as % of PVNBP)
                  
Total Asia Insurance Operations
9.0%
9.2%
9.2%
9.4%
  
8.5%
9.0%
9.0%
  
Total US Insurance Operations
4.5%
4.3%
4.3%
4.5%
  
3.8%
4.3%
4.4%
  
Total UK & Europe Insurance Operations
4.3%
3.8%
3.7%
3.5%
  
2.3%
3.4%
3.4%
  
Group Total
5.8%
5.7%
5.7%
6.0%
  
5.5%
5.8%
5.8%
  
 
Schedule 4B - Total Insurance New Business Profit (2014 at Constant Exchange Rates)
 
Note:   In schedule 4B constant exchange rates have been used to calculate insurance new business for overseas operations for all periods in 2014. The year-to-date amounts for 2015 are presented on actual exchange rates.
 
 
 
2014
  
2015
  
 
Q1
Q2
Q3
Q4
  
Q1
Q2 
Q3 
  
 
YTD
YTD
YTD
YTD
  
YTD
YTD 
YTD 
  
 
£m
£m
£m
£m
  
£m
£m 
£m 
  
                   
New Business Profit(1b)
                  
Total Asia Insurance Operations
 246
 502
 789
 1,175
  
309
664
 976
  
Total US Insurance Operations
 210
 410
 578
 746
  
153
371
557
  
Total UK & Europe Insurance Operations(11)
 88
 139
 200
 259
  
34
155
231
  
Group Total(11)
544
1,051
1,567
2,180
  
496
1,190
1,764
  
                   
Annual Equivalent(1b) (2)
                  
Total Asia Insurance Operations
520
1,023
1,586
2,280
  
681
1,366
2,021
  
Total US Insurance Operations
467
948
1,346
1,673
  
400
857
1,278
  
Total UK & Europe Insurance Operations(11)
230
419
628
834
  
169
510
762
  
Group Total(11)
1,217
2,390
3,560
4,787
  
1,250
2,733
4,061
  
                   
New Business Margin (NBP as % of APE)
                  
Total Asia Insurance Operations
47%
49%
50%
52%
  
45%
49%
48%
  
Total US Insurance Operations
45%
43%
43%
45%
  
38%
43%
44%
  
Total UK & Europe Insurance Operations
38%
33%
32%
31%
  
20%
30%
30%
  
Group Total
45%
44%
44%
46%
  
40%
44%
43%
  
                   
PVNBP(1b) (2)
                  
Total Asia Insurance Operations
2,763
5,525
8,635
12,571
  
3,643
7,340
10,847
  
Total US Insurance Operations
4,670
9,482
13,458
16,726
  
3,998
8,574
12,782
  
Total UK & Europe Insurance Operations(11)
2,024
3,645
5,459
7,305
  
1,450
4,524
6,815
  
Group Total(11)
9,457
18,652
27,552
36,602
  
9,091
20,438
30,444
  
                   
New Business Margin (NBP as % of PVNBP)
                  
Total Asia Insurance Operations
8.9%
9.1%
9.1%
9.3%
  
8.5%
9.0%
9.0%
  
Total US Insurance Operations
4.5%
4.3%
4.3%
4.5%
  
3.8%
4.3%
4.4%
  
Total UK & Europe Insurance Operations
4.3%
3.8%
3.7%
3.5%
  
2.3%
3.4%
3.4%
  
Group Total
5.8%
5.6%
5.7%
6.0%
  
5.5%
5.8%
5.8%
  
 
Schedule 4C - Total Insurance New Business Profit (2015 and 2014 at Constant Exchange Rates)
 
Note: In schedule 4C constant exchange rates have been used to calculate insurance new business for overseas operations for all periods in 2014 and 2015, i.e the average exchange rates for the period ended 30 September 2015 are            applied to each period for 2014 and 2015.
 
 
 
2014
  
2015
  
 
Q1
Q2
Q3
Q4
  
Q1
Q2 
Q3
  
 
YTD
YTD
YTD
YTD
  
YTD
YTD 
YTD 
  
 
£m
£m
£m
£m
  
£m
£m 
£m 
  
 
Post-tax analysis
                  
                   
New Business Profit(1c)
                  
Total Asia Insurance Operations
 246
 502
 789
 1,175
  
 301
 654
 976
  
Total US Insurance Operations
 210
 410
 578
 746
  
 151
 369
 557
  
Total UK & Europe Insurance Operations(11)
 88
 139
 200
 259
  
 34
 155
 231
  
Group Total(11)
544
1,051
1,567
2,180
  
486
1,178
1,764
  
                   
Annual Equivalent(1c) (2)
                  
Total Asia Insurance Operations
520
1,023
1,586
2,280
  
664
1,343
2,021
  
Total US Insurance Operations
467
948
1,346
1,673
  
395
853
1,278
  
Total UK & Europe Insurance Operations(11)
230
419
628
834
  
169
510
762
  
Group Total(11)
1,217
2,390
3,560
4,787
  
1,228
2,706
4,061
  
                   
New Business Margin (NBP as % of APE)
                  
Total Asia Insurance Operations
47%
49%
50%
52%
  
45%
49%
48%
  
Total US Insurance Operations
45%
43%
43%
45%
  
38%
43%
44%
  
Total UK & Europe Insurance Operations(11)
38%
33%
32%
31%
  
20%
30%
30%
  
Group Total(11)
45%
44%
44%
46%
  
40%
44%
43%
  
                   
PVNBP(1c) (2)
                  
Total Asia Insurance Operations
2,763
5,525
8,635
12,571
  
3,556
7,222
10,847
  
Total US Insurance Operations
4,670
9,482
13,458
16,726
  
3,951
8,526
12,782
  
Total UK & Europe Insurance Operations(11)
2,024
3,645
5,459
7,305
  
1,450
4,524
6,815
  
Group Total(11)
9,457
18,652
27,552
36,602
  
8,957
20,272
30,444
  
                   
New Business Margin (NBP as % of PVNBP)
                  
Total Asia Insurance Operations
8.9%
9.1%
9.1%
9.3%
  
8.5%
9.1%
9.0%
  
Total US Insurance Operations
4.5%
4.3%
4.3%
4.5%
  
3.8%
4.3%
4.4%
  
Total UK & Europe Insurance Operations(11)
4.3%
3.8%
3.7%
3.5%
  
2.3%
3.4%
3.4%
  
Group Total(11)
5.8%
5.6%
5.7%
6.0%
  
5.4%
5.8%
5.8%
  
 
Schedule 4D - Total Insurance New Business Profit (2014 at Constant Interest Rates)1
 
Note: The new business profit shown in the financial highlights section of this Interim Management Statement has been determined using the economic assumptions shown in Schedule 5. The profit for the year-to-           date 2014 therefore reflects interest rates at 30 September 2014. The following table provides additional memorandum information to demonstrate how the year-to-date 2015 and 2014 new business profit would            compare if interest rates at 30 September 2014 were the same as at 30 September 2015.
 
 
               
 
YTD 2015 £m
  
YTD 2014 £m
  
YTD 2015 v YTD 2014 %
New Business Profit (post-tax)
    
AER1
CER1
  
 AER
CER
Asia
976
  
749
763
  
30
28
US
557
  
504
549
  
11
1
UK - Retail
127
  
107
107
  
19
19
Total Group Insurance - excluding UK Wholesale
1,660
  
1,360
1,419
  
22
17
UK Wholesale business
104
  
88
88
  
18
18
Total Group Insurance
1,764
  
1,448
1,507
  
22
17
1        2014 new business profit (post-tax) calculated based on 30 September 2015 long-term interest rates.
 
Notes to Schedules 1A to 4D
 
(1)    Prudential plc reports its results using both actual exchange rates (AER) and constant exchange rates (CER) so as to eliminate the impact of exchange translation.
 
 
 
 Local currency: £
  
Q3 2015*
Q3 2014*
Q3 2015 vs Q3 2014  appreciation (depreciation) of local currency against GBP*
 
 Hong Kong
 
 Average Rate
 11.88
 12.95
9%
 
 Closing Rate
 11.74
 12.59
7%
 
 Indonesia
 
 Average Rate
 20,340.23
 19,589.29
 (4)%
 
 Closing Rate
 22,191.09
 19,753.71
 (11)%
 
 Malaysia
 
 Average Rate
 5.80
 5.41
 (7)%
 
 Closing Rate
 6.66
 5.32
 (20)%
 
 Singapore
 
 Average Rate
 2.09
 2.10
0%
 
 Closing Rate
 2.15
 2.07
 (4)%
 
 India
 
 Average Rate
 97.43
 101.36
4%
 
 Closing Rate
 99.43
 100.12
1%
 
 Vietnam
 
 Average Rate
 33,337.29
 35,321.44
6%
 
 Closing Rate
 34,047.79
 34,412.97
1%
 
 Thailand
 
 Average Rate
 51.72
 54.10
5%
 
 Closing Rate
 54.98
 52.57
 (4)%
 
 US
 
 Average Rate
 1.53
 1.67
9%
 
 Closing Rate
 1.51
 1.62
7%
     *Average rate is for the 9 month period to 30 September.
 
(1a)  Insurance new business for overseas operations are converted using the year-to-date average exchange rate applicable at the time (AER). 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.
(1b)  Insurance new business for overseas operations for 2014 has been calculated using constant exchange rates (CER).
(1c)  Constant exchange rates have been used to calculate insurance new business for overseas operations for all periods in 2014 and 2015.
(2)    Annual Equivalents, calculated as regular new business contributions plus 10 per cent of single new business contributions, are subject to roundings. Present value of new business premiums (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.
(3)    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.
(4)    New business in India is included at Prudential's 26 per cent interest in the India life operation. 
(5)    Balance Sheet figures have been calculated at the closing exchange rate.
(6)    New business in China is included at Prudential's 50 per cent interest in the China life operation. 
(7)    Mandatory Provident Fund (MPF) product sales in Hong Kong are included at Prudential's 36 per cent interest in Hong Kong MPF operation.
(8)    Investment flows for the period exclude year-to-date Eastspring Money Market Funds (MMF) gross inflows of £70,377 million (2014: gross inflows of: £50,396 million) and net inflows of £762 million (2014 net inflows of: £58          million). Investment flows for the discrete third quarter exclude MMF gross inflows of £25,304 million (2014: gross inflows of £18,331 million) and net inflows of £153 million (2014 net inflows of: £110 million).
(9)    Excludes Curian Variable Series Trust funds (internal funds under management).
(10)  Total Group Investment Operations funds under management exclude MMF funds under management of £5,514 million at 30 September 2015 (30 September 2014: £4,613 million).
(11)  The 2014 UK and Europe insurance operations comparatives have been adjusted to exclude PruHealth and PruProtect year-to-date APE sales of £20 million and new business profit of £9 million, following the disposal of our 25          per cent interest in the businesses in November 2014.
 
Schedule 5
 
EEV New Business Methodology and Assumptions
 
Valuation of new business
The valuation of new business for the third quarter of 2015 represents post-tax profit determined using non-economic assumptions which are consistent with those at 30 June 2015.
 
The assumed long-term effective tax rates for operations reflect the incidence of taxable profits and losses in the projected cash flows and are calculated by reference to standard corporate tax rates that have been substantively enacted by the end of the reporting period.
 
For UK immediate annuity business and single premium universal life products in Asia, primarily Singapore, the new business contribution is determined by applying economic assumptions reflecting point-of-sale market conditions. This is consistent with how the business is priced as crediting rates are linked to yields on specific assets and the yield is locked in when the assets are purchased at the point of sale of the policy. For other business within the Group, end-of-period economic assumptions are used.
 
Principal economic assumptions
Long-term expected returns on equity and property asset classes and corporate bonds in respect of each territory are derived by adding a risk premium, based on the Group's long-term view, to the risk-free rate. In Asia, equity risk premiums range from 3.5 per cent to 8.6 per cent (30 June 2015 and 30 September 2014: 3.5 per cent to 8.7 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 economic assumptions:
 
 
Asia operations notes (ii),(iv)
                      
                       
30 September 2015
%
China
Hong Kong
India
Indonesia
Korea
Malaysia
Philippines
Singapore
Taiwan 
Thailand 
Vietnam
   
notes
(ii),(iii)
      
note (iii)
 
  
note (iii)
 
      
New business risk discount rate
9.8
3.5
12.7
13.6
5.9
6.6
10.9
4.3
4.1
9.5
13.8
10-year Government bond yield
3.3
2.1
7.7
9.8
2.1
4.2
4.1
2.6
1.1
2.8
7.1
                       
30 June 2015
%
China
Hong Kong
India
Indonesia
Korea
Malaysia
Philippines
Singapore
Taiwan 
Thailand 
Vietnam
   
notes
(ii),(iii)
      
note (iii)
 
  
note (iii)
 
      
New business risk discount rate
10.2
3.9
13.0
12.5
6.4
6.5
11.2
4.5
4.2
9.7
13.6
10-year Government bond yield
3.7
2.4
8.0
8.5
2.5
4.0
4.5
2.7
1.5
3.0
6.8
                       
30 September 2014
%
China
Hong Kong
India
Indonesia
Korea
Malaysia
Philippines
Singapore
Taiwan 
Thailand 
Vietnam
   
notes
(ii),(iii)
      
note (iii)
 
  
note (iii)
 
      
New business risk discount rate
10.6
4.3
13.7
12.6
6.4
6.6
11.2
4.5
4.2
10.3
13.3
10-year Government bond yield
4.1
2.5
8.7
8.7
2.9
4.0
4.4
2.5
1.7
3.6
6.6
 
 
 
Asia Total
 
30 Sep 2015
30 Jun 2015
30 Sep 2014
 
% 
% 
% 
New business weighted risk discount rate note (i)
6.3
6.5
7.3

 
Schedule 5
 
EEV New Business Methodology and Assumptions (cont.)
 
Notes
(i)      The weighted risk discount rates for Asia operations shown above have been determined by weighting each country's risk discount rates by reference to the post-tax EEV basis new business result. The changes in the risk           discount rate for individual Asia territories reflect the movements in Government bond yields, together with the effects of movements in the allowance for market risk and changes in product mix.
(ii)     For Hong Kong the assumptions shown are for US dollar denominated business. For other territories, the assumptions are for local currency denominated business.
(iii)    The mean equity return assumptions for the most significant equity holdings in the Asia operations were:
 
 
 
30 Sep 2015
30 Jun 2015
30 Sep 2014
 
% 
% 
% 
Hong Kong
6.1
6.4
6.5
Malaysia
10.2
10.0
10.0
Singapore
8.6
8.7
8.5
 
(iv)    The standard corporate tax rates applicable for the most significant operations for all periods shown, are as follows:
 
 
 
%
Hong Kong
16.5 per cent on 5 per cent of premium income
Indonesia
25.0
Malaysia
2014 to 2015: 25.0; From 2016: 24.0
Singapore
17.0
 
 
US operations
      
       
30 Sep 2015
30 Jun 2015
30 Sep 2014
       
%
%
%
Weighted average assumed new business spread margins:
      
 
Fixed Annuity business1,2 :
      
   
January to June issues
1.25
1.25
1.5
   
July to September issues
1.5
n/a
1.5
 
Fixed Index Annuity business2:
      
   
January to June issues
1.5
1.5
2.0
   
July to September issues
1.75
n/a
2.0
 
Institutional business
0.7
0.7
0.7
New business risk discount rate:note
      
 
Variable annuity
6.7
7.0
7.1
 
Non-variable annuity
3.8
4.1
4.3
 
Weighted average total
6.6
6.9
7.0
US 10-year treasury bond rate at end of period
2.1
2.4
2.5
Pre-tax expected long-term nominal rate of return for US equities
6.1
6.4
6.5
Standard corporate tax rate
35.0
35.0
35.0
1   Including the proportion of variable annuity business invested in the general account.
2   The weighted average rates at inception shown above grade up linearly by 25 basis points to a long-term assumption over five years.
 
Note
The risk discount rates shown above include an additional credit risk allowance for general account business of 100 basis points and for variable annuity business of 20 basis points for all periods shown.
 
Schedule 5
 
EEV New Business Methodology and Assumptions (cont.)
 
 
UK operations
      
       
30 Sep 2015
30 Jun 2015
30 Sep 2014
       
% 
% 
% 
Shareholder-backed annuity business:note (i)
      
 
New business risk discount rate
6.5
6.4
6.8
 
Expected long-term nominal rate of return
3.3
3.4
4.4
Other business:
      
 
New business risk discount rate notes (ii),(iii)
5.6
5.9
5.8
 
Expected long-term nominal rates of investment return:
      
   
UK equities
6.2
6.5
6.8
   
15-year gilt rate
2.2
2.5
2.8
   
Corporate bonds
3.9
4.1
4.4
Standard corporate tax ratenote (iv)
20.0
20.0
20.0
 
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, a credit risk premium, an allowance for a 1 notch downgrade of the asset portfolio subject to credit risk and an allowance for short-term          downgrades and defaults.
(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.
(iii)    The 2014 new business risk discount rate excludes the sold PruHealth and PruProtect businesses.
(iv)    The UK government made an announcement in July 2015 to reduce future corporate tax rate from 20 per cent to 19 per cent effective 1 April 2017 and from 19 per cent to 18 per cent effective 1 April 2020. The impact of change           has not been factored in the EEV results at 30 September 2015 as it was not substantively enacted by the end of the reporting period. The impact of the reductions in the corporate tax rate on the UK new business profit is not           material.
 
Schedule 6
 
Capital Management
We continue to operate with a strong solvency position, while maintaining high levels of liquidity and capital generation. At 30 September 2015 our IGD surplus is estimated at £5.1 billion after deducting the 2014 final dividend of £0.7 billion and 2015 interim dividend of £0.3 billion. The IGD surplus is equivalent to strong coverage of 2.5 times the requirement. This compares to £4.7 billion at 31 December 2014 (before taking into account the 2014 final dividend of £0.7 billion) and £4.1 billion at 30 September 2014 (after deducting the 2013 final dividend of £0.6 billion and 2014 interim dividend of £0.3 billion).
 
As at 30 September 2015 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 2015 levels would reduce the IGD surplus by £250 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 £1,250 million;
 
 
·     A 100 bps reduction (subject to a floor of zero) in interest rates would reduce the IGD surplus by £1,050 million; and
 
 
·     Credit defaults of ten times the expected level would reduce IGD surplus by £700 million.
 
All of our subsidiaries continue to hold strong capital positions on a local regulatory basis. At 30 September 2015, the value of the estate of our UK with-profits funds is estimated at £7.5 billion. The estate of the with-profits funds in the UK is excluded from the IGD calculation.
 
The values of the shareholders' interests in future transfers from the with-profits funds in the UK are valued at £2.0 billion. No credit has been included in the IGD calculation for these values.
 
In addition to our strong capital position, on a statutory 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 2015 was £2.2 billion, equivalent to 6.4 per cent of the assets backing annuity liabilities. This represents 33 per cent of the portfolio spread over swaps, compared to 41 per cent at 31 December 2014 and 47 per cent at 30 September 2014.
 
 
Schedule 7
 
BASIS OF PREPARATION
 
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 Prudential Regulation Authority 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.
 
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 designed 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.
 
Post-tax New Business Profit has been determined using the European Embedded Value (EEV) methodology set out in our 2015 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.
 
Annual premium equivalent (APE) sales are subject to rounding.
 
 
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 10 NOVEMBER 2015
 
 
PRUDENTIAL PUBLIC LIMITED COMPANY
   
 
By: /s/ Nic Nicandrou
   
 
Nic Nicandrou
 
Chief Financial Officer