Prudential’s first-half profit misses the mark as UK insurer’s accounting loss quadruples
Net profit fell 87 per cent to US$120 million in the first six months after deducting an accounting loss of US$1.08 billion
Prudential’s interim results missed market estimates after changes in the valuation of short-term liabilities in its investment portfolio drove the UK insurer to an unexpected plunge on its bottom line.
Net profit fell 87 per cent from last year to US$120 million in the first six months of 2024 after deducting a short-term investment loss of US$1.08 billion, in stark contrast to the US$1.08 billion net profit expected by analysts in Bloomberg’s consensus estimates.
Prudential’s marked-to-market loss quadrupled from the US$287 million it wrote down last year. The company, which traces its root to 1848 in London, performed well in its core insurance business. Operating profit, or income excluding one-off items or valuation change, rose 9 per cent to US$1.54 billion, in line with estimates.
The short-term investment loss was marked to market due to the interest rate movement, CFO Ben Bulmer said. The insurer will continue to maintain its long-term investment strategies, he added.
Profit from new business, a key measure of sales and the future growth of insurance companies, increased 8 per cent to US$1.47 billion, bolstered by improving sales in Southeast Asia.
The value of new sales rose 3 per cent in Malaysia and jumped 17 per cent in Singapore, while mainland China decreased 18 per cent and Indonesia fell 29 per cent.
