Post on 27-Mar-2015
Business and Financial Overview
Business and Financial Overview
Mark TuckerChief Executive
Managing Director, Finance, Actuarial & IT
Garth Jones
15th Nov, 2000
Business and Financial Overview
Content
Key messages
PCA’s mandate
PCA’s profitable growth strategy
PCA: Today
PCA: The future
1
Business and Financial Overview
PCA is very well positioned and resourced to takeadvantage of the region’s exciting growth potential
PCA has now succeeded in breaking through the formidable entry barriers
PCA has a pan-regional presence and platform
PCA has a clear strategy & business model for life and retail financial services and a track record of delivery
2
3
4
Key Messages
1 Significant, material & profitable growth opportunities in Asia
2
Business and Financial Overview
Quantum change in pace, size
and return from the Asian region
on a scale which in time will
make a significant & positive
impact on the Group’s results”
“
Group’s 1994 Mandate To PCA
3 Business and Financial Overview
Business and Financial Overview
PCA’s Strategy For Growth: Four Dimensions
Geography
Expand into Asian markets with largest, profitable pools of target customers
Distribution Improve still further
effectiveness of current channels
Expand optionsaccess more
customersmaximise
“stickiness” & productivity
throughcross-selling
Products Continue to meet
customer needs for core life insurance savings products
Offer broader range of RFS products to deepen customer relationship
Professional/Mass-affluent segment
Target Customers
4
Business and Financial Overview
Understanding Our Customers
In depth local research
UK heritage & history
Prudence
A competitive advantage
Trust
&
Credibility
5
Business and Financial Overview
Customer Growth: 1994-2000
1994
2000
6
150,000
Life 100%
1,500,000
Life 80%
Mutual Funds 20%
+1,000%
Business and Financial Overview
Geography: 1994
7 Business and Financial Overview
Singapore
Malaysia
Hong Kong
Business and Financial Overview
Geography: 2000
8 Business and Financial Overview
Thailand
LIFE INSURANCE
India (life)
India (AMC)
China
Singapore
Malaysia
Vietnam
Indonesia
Philippines
Taiwan
Hong KongHK, Singapore
Japan
Business and Financial Overview
Products & Distribution: 1994
ProductsLife -Traditional - Unit Linked
General
DistributionAgency
MalSinHK
9
Geography
Business and Financial Overview
Products & Distribution: 2000
ProductsLife -Traditional -Unit linked
Mutual Funds
General
DistributionAgency
Bank
Broker
Direct
MalSinHK Thai Indo Phil India JapanTaiwanVietnam China
1994 2000
Geography
10
Business and Financial Overview
….. now A Regional Life Insurance Leader
3-5
1-2
None
1-2 3-6 7-8Market presence/licences
Number of markets
among top 5
Aegon Allianz Zurich/Eagle Star Prudential US
9+
Sun Life of Canada New York Life CMG Great Eastern Life
Manulife
RSA CGNU
PCA1994
PCA2000
AXA ING Aetna
AIG
11
Cathay Life
Business and Financial Overview
Summary: Key Drivers Of Growth
Favourable regional economic growth & wealth distribution trends
Success in getting licences Successful JV partnering with respected
local financial brands Building competitive advantage focusing on
quality, productivity and economic value of dominant agency distribution channel
12
Business and Financial Overview
Summary: Key Drivers Of Growth
Excellence in regional brand promotion
Systematic processes rolled out regionally
Consistent application of a delegated “Think regional, Act local” management approach
13
Business and Financial Overview
PCA Today: Overview
A trusted brand across Asia Overcoming barriers to entry - unlocking
opportunities for profitable growth Establishing joint-ventures and alliances
to accelerate profitable growth A vision and operational & management
structure designed for the future with people who can deliver
A financial track record that demonstrates all of the above
14
Business and Financial Overview
A Trusted Brand Across Asia
15
Business and Financial Overview
Overcoming Barriers To Entry
Limited number of licences available
Early market presence and history critical
Understanding operating and regulatory environment
People constraints; experience and expertise
16
Business and Financial Overview
Establishing JV Partners: Selection Criteria
Financially sound
Strong ethical approach to business
Well trusted brand with good reputation in market
Appreciation of financial services sector and its challenges
Prudential ownership/shared ownership of the customer
17
Business and Financial Overview
Strong Existing JVs/Alliances With Major Financial Institutions
18
Business and Financial Overview
PCA’s Vision
Quantum change in
pace, size and return
from the Asian
region on a scale
which in time will
make a significant &
positive impact on
the Group’s results ”
“
#1 in customer focus
#1 in attracting the best people
To be Asia’s #1 life & retail financial
solutions provider
1994 Today
19
Maximising shareholder value
Business and Financial Overview
PCA’s Operating Structure
Level of market development Scale of operations Depth of management resources
Established Markets - Hong Kong, Singapore, Malaysia
Emerging Markets - Thailand, Indonesia,
Philippines, Vietnam, India
China & Taiwan
Mutual Funds
India
Taiwan
Investment Management
Hong Kong
Singapore
Japan
Life
20
Business and Financial Overview
PCA’s Management Team
21
Mina HsuBrand &
Communications
Garth JonesFinance, Actuarial & IT
Peter BoothHuman Resources
Hugh DaviesAsia Desk
Mike BishopAlternative Distribution
Gary BennettBusiness Development
Mark E Tucker Chief Executive
Investment Mgt
Life Mutual Funds
Dominic LeungTaiwan & China
Dan BardinEmerging Mkts
Tan Suee ChiehEstablished Mkts
Ajay SrinivasanMutual Funds
Toru UedaPPM Japan
Business and Financial Overview
PCA’s Operating And Management Structures
CapitalisingOn Regional
Synergies
Leverage expertise & resources across
borders
Spread corporate values
Develop critical areas of excellence
Make Prudential a household name
22
Business and Financial Overview
PCA’s People: Fundamental To Our Success
Recruitment of core competency talent
PRUflexiben
PRUuniversity
MBA fast-track programme developing management resource pipeline
The financial services employer of choice
23
Business and Financial Overview
PCA:Financial Overview
Business and Financial Overview
PC Asia Financial Performance Strong, Diverse and Sustainable
Very strong growth all round in sales and achieved profits
The diversity of geography, product and type of business
That significant and material shareholder value has already been delivered
1
2
3
25
Business and Financial Overview
New Business: Strong Life Regular Premium Growth
Rebounding from Crisis earlier than expected
£m
0
50
100
150
1996 1997 1998 1999 9 mths 2000
+17%
-34% +34%
+120% on9 mths 99
Established Emerging Taiwan & China
26
Business and Financial Overview
New Business: Strong Life Single Premium Growth
Single Premiums also recovered rapidly from Crisis
Established Emerging Taiwan & China
£m
0
50
100
150
1996 1997 1998 1999 9 mths 2000
+157%
-81%
+333%
+62% on9 mths 99
200
250
27
Business and Financial Overview
160
140
120
100
80
60
40
20
0
New Business: Life APE
1996 1997 1998 1999 9 mths 2000
£m
Full Year 9 mths
CAGR 9 mths 1996 - 9 mths 2000 of 20%
28
Business and Financial Overview
New Business: Life APE
New Business Geographic Mix 9 mths 2000
Taiwan29%
Established61%
Emerging10%
29
Business and Financial Overview
Life Operations: New Business Achieved Profits
Full Year 6 mths
CAGR 6 mths 1996 - 6 mths 2000 of 35%
1996 1997 1998 1999 6 mths 2000
£m
90
80
70
60
50
40
30
20
10
0
30
Business and Financial Overview
Life Operations: NBAP Product Mix 6 mths 2000
Linked 40%
Non-Linked30%
Non Par30%
New business achieved profit on APE 60%31
Business and Financial Overview
Life Operations: Building Core Agency DistributionNumbers of agents ‘000s
Dec 96
25
20
15
10
5
0Dec 97 Dec 98 Dec 99 Sep 00
32
Business and Financial Overview
Agency: Productivity & Persistency
Prudential’s agency force more productive than market
Malaysia +200%Singapore + 28%Hong Kong + 28%
Prudential’s persistency also higher than market
33
Business and Financial Overview
£313m net sales for 9 mths 2000 up 46% over 9 mths 1999
Mutual Funds India: Net Sales
1998
300
250
200
150
100
50
01999 9 mths 2000
Full year 9 mths
£m
#1 in Private Sector
350
34
Business and Financial Overview
PCA: Total Funds Under Management
Asian Investment Management businesses all reporting to PCA from 1999
Acquisition of Prudential Taiwan SITE adds a further £1.1bn
Dec96
12
PCA Life
Pensions
£bn
10
8
6
4
2
0
Mutual Funds
UK Life Fund
Dec97
Dec98
Dec99
Jun00
35
Business and Financial Overview
PCA: Total Funds Under Management - June 2000
UK Life Fund62%
Pensions2%
PCA Life30%
MutualFunds6%
Total FUM £10.4bn excluding Prudential Taiwan SITE
36
Business and Financial Overview
Operating Achieved ProfitsCAGR 6 mths 1996 - 6 mths 2000 of 35%
1996
£m120
100
80
60
40
20
01997 1998 1999 6 mths 2000
Full Year 6 mths
37
Business and Financial Overview
MSB Profits
16
14
12
10
8
6
4
2
0
£m
Full Year 6 mths
1996 1997 1998 1999 6 mths 2000
38
Business and Financial Overview
PCA: Value Added To Shareholder Funds
ROE: 28%
Expected Return Value Added
60
£m
19991 Jan - 30 Jun
20001 Jan - 30 Jun
50
40
30
20
10
0
39
Business and Financial Overview
18% of new business achieved profits 6 mths 2000 - up from 15% in 1999
£250m APE sales 9 mths 2000 19% of group-wide total - up from 11% in 1999
PCA Contribution to Group Results
Asia18%Asia18%
US42%US
42%
UK &Europe
40%
UK &Europe
40%
New Business Achieved Profits
40
Business and Financial Overview
PC Asia Financial Performance Strong, Diverse and Sustainable
Very strong growth all round in sales and achieved profits
The diversity of geography, product and type of business
That significant and material shareholder value has already been delivered…. and we are confident it will continue
1
2
3
41
Business and Financial Overview
PCA:The Future
Business and Financial Overview
PCA: 2000-2005 Profitable Growth Objectives
Regional alignment with savings market opportunities
Promote long-term savings through life insurance and value adding product enhancements
Complement life offering with expanded product range and retail financial services customer proposition
Multiple distribution Scale applied to capture operating economies
43
Business and Financial Overview
Challenges - External
Political instability
Economic shocks
Regulatory environment
Competition
44
Business and Financial Overview
Challenges - Internal
Attracting, retaining and developing the best people
Managing in multilingual/ multicultural environment
Integrating acquisitions Maintaining excellent relationships
with JV partners Keeping our unique PCA culture as
we grow
45
Business and Financial Overview
Products & Distribution PCA 2000
ProductsLife -Traditional -Unit linked
Mutual Funds
General
DistributionAgency
Bank
Broker
Direct
MalSinHK Thai Indo Phil India JapanTaiwanVietnam China
1994 2000
Geography
46
Business and Financial Overview
PCA: Sources Of Competitive Advantage
Proven formula for transforming acquired and start-up businesses
Prudential Group’s financial strength: where security of many large regional players in doubt
Success breeds success: PCA’s track record - real advantage in deal-making and partner selection
47
Business and Financial Overview
PCA: Sources Of Competitive Advantage Understanding of customer retail savings
needs
Ownership of key customer relationships
Life agency network and management model
Ownership of successful bancassurance distribution model
Profit consciousness inculcated at all levels of the business
48
Business and Financial Overview
PCA is very well positioned and resourced to takeadvantage of the region’s exciting growth potential
PCA has now succeeded in breaking through the formidable entry barriers
PCA has a pan-regional presence and platform
PCA has a clear strategy & business model for life and retail financial services and a track record of delivery
2
3
4
Summary
1 Significant, material & profitable growth opportunities in Asia
49