Goldman Sachs11th Annual European Financials Conference
Mark Tucker, Prudential plc, Group Chief ExecutiveJune 2007
2
Agenda
DC Schemes
• Overview of the Group
• The retirement opportunity
• Positioning ourselves for success
• Conclusions
3
Overview of the Group
DC Schemes
• Strong heritage from leadership in UK life insurance
• Building our global presence and Group capabilities
• Driving performance across an international Group
AssetManagementInsurance
Asset ManagementAsset ManagementAsia
UK
US
Where we have come from The Group today
4
Overview of the GroupSignificant profit growth across the Group
EEV basis operating profits1 IFRS basis operating profits1
0
500
1,000
1,500
2,000
2,500
3,000
2004 2005 2006
Insurance Asset Management
0
200
400
600
800
1,000
1,200
1,400
1,600
2004 2005 2006
Insurance Asset Management
1) Before Central costs and excluding Egg: completion of Egg sale to Citi announced 1 May 2007Note:Total Group EEV operating profit before tax; 2004: £1,274m, 2005: £1,712m, 2006: £1,976mTotal Group IFRS operating profit before tax; 2004 £699m, 2005: £957, 2006: £893m
+ 32%
+ 29%
+ 33%
+ 20%
£m £m
5
Overview of the GroupDriven by strong margins and returns on individual life businesses
0
100
200
300
400
500
600
700
800
900
1,000
1,100
2004 2005 2006
Asia US UK
Internal rate of return:
15%14%12%UK
18%15%12%US
>20%>20%>20%Asia
200620052004£m
CAGR 18%
£418m
£208m
£243m
£241m
£144m
£367m
£266m
£259m
£514m
42%41%40%Group average
200620052004
Value added by new business
Margin:
6
Overview of the GroupSupported by real economic and operating benefits of the Group
Systematic risk and capital management1 Other benefits
3.5
2.1
1.4
0
1
2
3
4
Required capitalundiversified
Required capitaldiversified
Capital "saved"
£bn
1) As of end 2005. Economic required capital – AA target confidence level
– Demand-side collaboration
– Exploiting the benefits of scale
– World-class standards & practices
7
Overview of the GroupDelivering superior shareholder value
75
100
125
150
175
200
02/05/05 02/05/06 02/05/07
Prudential FTSE 100 World Insurance
Total shareholder returns since May 20051
– Group to be operating cash flow positive in 2008
– Focus on delivering a growing dividend; growth 5% in 2006
– Two-times cover in medium-term
Cash and dividends
1) Source: Thomson Datastream (TSR Data)
8
855
125
935
858
130
848
1,821
5,572
The retirement opportunityThe largest wave of money-in-motion in history
Shifting demographics1 Gross flows of retirement funds2
Population (mn)
0
1,000
2,000
3,000
4,000
5,000
2005 2025 2055
<40 yrs
>60 yrs
40-60 yrs
68%
22%
10%
56%
26%
18%
52%
24%
24%
1) UK, US and Asia; Source: Economist Intelligence Unit, US Census Bureau 2) UK and US cumulative flows 2006-2010; Source: ABI, IMA, Datamonitor, NOP
Mutual Funds /Managed Accounts
LifeInvestments
IRA/Personal Pensions
Defined Contributions
Defined BenefitsPensions
Annuities
Deposits
Total
£bn
9
The retirement opportunityChanging needs drive opportunities for Prudential
– Fall in state provisions
– Move from defined benefits to defined contributions
– Longevity risk & long-term care
– Search for advice
– Sophisticated risk management capabilities
– Solutions to address retirement needs
– Privileged access to retirement advisors
– Trusted brand known for retirement
Changing Needs What It Will Take to Win
10
Positioning ourselves for successAsia Insurance: A unique platform for doubling 2005 NBP by 2009
Asia new business by channel
133%35Japan
54%13Korea
81%10Thailand
(6%)9Taiwan
15%5Philippines
26%3Hong Kong
6%2Malaysia
56%2China2
(15%)1Vietnam
54%1Indonesia
23%1Singapore
95%1India1
APE Growth 2006
Position Market Share
0
100
200
300
400
500
600
700
800
900
1000
2001 2002 2003 2004 2005 2006
Agency Non-Agency
CAGR 36% over 5 years
CAGR 18% over 5 years
APE£m
1) India: Share of Private Market2) China: Share of foreign JV's
11
0
2
4
6
8
10
12
2001 2002 2003 2004 2005 2006
VAs FIAs FAs Life Curian
Positioning ourselves for successUS Insurance: Premier position to capture growth in the retirement markets
0%
2%
4%
6%
8%
10%
12%
2001 2002 2003 2004 2005 2006
Banks Regional Independent
Rapid growth in retail sales$bn
Variable annuity market share by channel
Variable annuityCAGR 45% over 5 years
JNL is a top-10 fixed indexed and fixed annuity provider
12
Positioning ourselves for success UK Insurance: Delivering value by focusing on our strength
Retirement income
0.0
0.5
1.0
1.5
2.0
2.5
3.0
2007 2012 2017 2022 2027 2032 2037 2042
CorporatePensions
Ex-ScottishAmicable
£bn
Ex-DirectSalesforce
Retirement savings1
38%
44%
23%
14%
41%
64%
0% 20% 40% 60% 80%
Prudential With-Profits Fund
FTSE 100
Average Cash Life Fund
Average Fixed InterestLife Fund
Average With-Profits Fund
Average CautiousManaged Unit Fund
Utilise our multi-asset capability Exit areas where returns are structurally lowNarrow our focusImprove return in Corporate Pensions
Build on proven strengthsInternal vestingsLongevity expertiseBrand
1) Lipper Hindsight – ABI Life Funds: Money Sector Average, total return, net income reinvested; Fixed Interest Sector Average, total return, net income reinvested, Standard & Poor’s – Cautious Managed Sector, bid to bid, total return.
13
Positioning ourselves for successAsset Management: Significant potential based on superior investment performance
0
2
4
6
8
10
12
14
2001 2002 2003 2004 2005 2006
M&G revenues Asia rapid growth in external FUM
Record net inflows in 2006 £6.1bn, + 58% Record net inflows in 2006 £2.5bn, + 91%
Fixed Income
Equities
Property
Private Equity Pru Finance
£bn2006: £471 million
14
Conclusion
• Strong operating performance…
in individual Business Units and at the Group level…
are delivering superior shareholder value
• Advantaged regional platforms and global capabilities…
place the Group in a unique position…
to capture a disproportionate share of the retirement opportunity
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