Clare Bousfield

CEO Insurance, Prudential UK & Europe

Prudential continues to deliver strong returns for with-profits customers

21 Feb 2017

Prudential has announced that it has added an estimated £2 billion to with-profits policy values in 2016, highlighting the returns available to cautious investors from a financially strong and well-managed with-profits fund.

  • Prudential’s consistent, long-term approach to the management of its With-Profits Fund continued to benefit policyholders during 2016.
  • An estimated £2 billion was added to Prudential with-profits policy values in 2016 (split £0.5 billion Annual Bonus and £1.5 billion Final Bonus).
  • Policyholders will typically see year-on-year increases of between 6 per cent and 11.5 per cent in their accumulating with-profits policy values in 2016.
  • Strong annualised post-tax returns for policyholders over the lifetime of their policy:
    Prudential With-Profits Flexible Investment Plan (20 year, £10,000 single premium) 5.2 per cent *
    Prudential With-Profits Flexible Investment Plan (15 year, £10,000 single premium) 5.9 per cent *
    Prudential With-Profits Flexible Investment Plan (10 year, £10,000 single premium) 4.3 per cent *
    Prudential With-Profits Individual Pension (20 year term, £200 pm RP) 5.5 per cent *
    Prudential With-Profits Savings Endowment (25 year term, £50 pm RP) 5.3 per cent *
    Scottish Amicable With-Profits Savings Endowment (25 year term, £50 pm RP) 5.4 per cent *
    (* Net of tax where relevant and charges. Endowment examples based on male aged 29 at start of contract.)
  • A typical Prudential mortgage endowment maturing in 2016 will have increased in value by 10.3 per cent in its final year.
    An estimated £21.5 billion has been added to Prudential with-profits policy values over the last 10 years.
  • Prudential’s With-Profits Fund has delivered a cumulative investment return of 84.2 per cent over 10 years, compared with the FTSE 100 index (cumulative total) return of 66.9 per cent over the same period.
  • With-profits with Prudential continues to be an attractive medium to long-term investment when compared with many other alternative investment options.

Prudential’s With-Profits Fund has delivered a gross cumulative investment return of 84.2 per cent over 10 years,
compared with the FTSE 100 (total return) index gross return of 66.9 per cent over the same period.

Policyholders will typically see year-on-year increases of between 6 per cent and 11.5 per cent in their accumulating with-profits
policy values, underlining the consistency of the fund management approach.

Clare Bousfield, CEO Insurance at Prudential UK & Europe, said: “This result demonstrates, yet again, that investing
in a financially strong and well-managed with-profits fund can produce strong returns for the cautious investor.

“Despite expectations that interest rates will remain low, the bonuses we’ve announced today mean that the vast majority
of our customers will see increases in the total values of their policies.”

Ned Cazalet, leading industry commentator, observes that: “Over the years, our forward-looking Cazalet With Profits Ratings have consistently listed Prudential among those providers likely to deliver the best returns to policyholders, and we are pleased that Prudential has delivered against these expectations. For example a long-term pension saver making an investment in the year 2000 would have benefited from a 300 per cent increase in the underlying value of the money they invested (considerably more than would have been achieved by investing in a UK stock market tracker fund), with this growth delivered, from a well-diversified and carefully-managed fund, in a smooth and steady fashion – notwithstanding the many ups and downs of financial markets during that time.”

Media contacts

Louise Bryans

020 7004 8280

Louise.Bryans@prudential.co.uk

Darragh Leeson

020 7004 8081
darraghuk.leeson@prudential.co.uk