The Pru raises its dividend as boss departs
INSURER Prudential outpaced its rivals yesterday when it raised its interim dividend and reported a smaller-than-expected drop in first-half profit.
The UK’s largest insurer said its operating profit fell eight per cent to £1.25bn on the widely recognised European embedded value measure (EEV) – which tracks future earnings from life insurance policies – compared to consensus of £1.16m.
“These results demonstrate a continuing strong performance in what everyone knows have been exceptionally challenging conditions,” said outgoing chief executive Mark Tucker.
He added that Prudential’s EEV new business profit had risen by 25 per cent to £691m, thanks to its strategy of pursuing “value over volume”.
The firm said that it would increase its interim dividend payment by five per cent to 6.29p per share, a rise that was driven by a doubling of its surplus capital to £3bn at the end of July.
This is in contrast with rivals Aviva and Legal & General, who last week cut shareholder payouts to save cash.
Tucker played down speculation that Prudential could sell its UK business, saying that it had “performed very well in terms of cash delivery” and is an important part of the insurer’s overall business.
Tucker will step down as chief executive in October, when he will be replaced by current chief financial officer Tidjane Thiam.
TIDJANE THIAM
INCOMING CHIEF EXECUTIVE,
PRUDENTIAL
Currently the Pru’s chief financial officer, Ivory Coast-born Thiam will step into Mark Tucker’s shoes in October. The Insead graduate began his career with McKinsey in London and Paris, after which he returned to the Ivory Coast and joined the government. Following a military coup, he returned to McKinsey, followed by a six-year spell with Aviva.