Prudential China Eastspring Investments

‘Prudential’s Asian strategy has proved very effective. Its success is attributable to our disciplined focus on execution together with a passion to innovate and improve the services we provide to our distributors and customers. We aim to attract, develop and retain the best people in the industry who are highly motivated by the vital role we play in our communities. We are very much an organisation that does well by doing good.’

Barry Stowe
Chief Executive
Prudential Corporation Asia

To find out more about Prudential Corporation Asia

Prudential’s strategy ‘to accelerate’ in Asia is well established and continues to prioritise:

  • Opportunities for profitable growth over the long term;
  • Products that provide effective solutions to customers’ savings and protection needs;
  • High quality, multichannel distribution; and
  • Asset management expertise.

Performance highlights

New business profit

2013: £1,460m, compared to previous 5 years

IFRS operating profit1

2013: £1,0750m, compared to previous 5 years

* Gain on sale of China Life Insurance Company in Taiwan

Net cash remittances

2013: £400m, compared to previous 5 years

Eastspring Investments funds under management

2013: £60bn, compared to previous 5 years
  • Objectives set in 2010 for 2013 have been achieved
  • Continued delivery across key value creation metrics: new business profit up 15 per cent, IFRS profits up 16 per cent2, free surplus generation up 18 per cent2
  • Increased agency activity, up 8 per cent and improved productivity, up 8 per cent
  • Successfully added major new distribution partner with Thailand’s Thanachart Bank
  • Commenced operations in Cambodia, opened representative office in Myanmar
  • Expanded Eastspring Investments’ platform with operation and approvals to distribute funds in Europe

Market overview

Asia’s economic transformation has generated material increases in personal wealth and has created significant demand for products that provide solutions to individuals’ financial planning needs.

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Favourable economic trends

Asia (excluding Japan) is leading the world in terms of Gross Domestic Product growth. Over the next five years it is expected to generate US$5.5 trillion3 of new Gross Domestic Product, more than the US and the other advanced economies combined.

Attractive demographics

Economic growth is translating into the rapid increase of the Asian middle class. Between 2009 and 2020 it is estimated that there will be over 1.2 billion people who will have been elevated from rural subsistence to urban lifestyles. Families are getting smaller, life expectancies are lengthening and the incidence of chronic diseases is increasing significantly.

Growing Asia middle class4

2013: 66% Asia as a percentage of world middle class, 60% Asia as a percentage of world population

Strong demand for savings and protection products

As people move into the middle class, their increased wealth and higher income provide the opportunity to make financial plans. Typically the first stage is to provide protection for the family and establish a regular savings plan through a life insurance policy.

Social welfare provisions vary by market but generally fall well below the levels people need to sustain their lifestyles in the event of a personal tragedy such as the diagnosis of a critical illness. Also, while basic medical services may be provided by the state, there can be a high level of out-of-pocket expenses, creating demand for financial solutions to significantly improve an individual’s experience through access to private medical services. Therefore, critical illness and medical riders are popular additions to life insurance policies.

Traditionally Asians would have relied on their children to provide for them in their retirement, but increasingly people are making their own financial provisions and life insurance policies are a popular part of a retirement plan.

Once the savings and protection solutions are in place, there is the opportunity to invest. Single premium insurance policies are also important in more developed markets and it is also likely that customers will increasingly seek access to different asset classes through mutual funds as their wealth grows and their financial needs become more sophisticated.

Share of medical expenses paid out-of-pocket6, 2011(%)

Us: 11%, UK: 9%, Japan, 16% | Singapore: 60%, India: 59%, Vietnam: 56%, Philippines: 56%, Indonesia: 50%, Malaysia: 42%, China: 35%, Hong Kong: 35%, Korea: 33%, Taiwan: 31%

Evolving regulatory environment

Each Asian market has evolved its own regulatory regime depending on the heritage of the industry, experiences and developmental priorities.

Regulators across the region are generally keen to promote the growth of the life insurance industry, as they appreciate the social utility of providing financial security to individuals and the way insurers channel unproductive cash savings into long-term investments in the economy. However, they are imposing higher standards on the industry and monitoring compliance more actively, with increasing focus on the quality of advice distributors provide and the suitability of the products offered. Although assessments of solvency can vary considerably market by market, there is increasing convergence on risk-based calculations.

Our markets

See below for details of our Asia markets and ‘sweet spot’ markets.

What we do and how we do it

Although Prudential has been operating in Asia for almost 90 years, we began building our business in earnest in 1994 with the establishment of Prudential Corporation Asia. Since then Prudential Corporation Asia has entered new markets, added considerable agency scale and launched bank distribution, developed product capabilities – particularly unit-linked – and built a customer-centric brand anchored on the tag line ‘Always Listening, Always Understanding’.

Today Prudential Corporation Asia is focused on leveraging this platform to grow in a disciplined way for the benefit of our customers, shareholders and communities. Success is defined by metrics that ensure we deliver both volume and value.

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Market participation

Each market is unique and our overarching regional strategy is very specifically tailored to opportunities that reflect the many differences in each country, including its stage of economic development, cultural preferences, regulation, the competitive landscape and our own risk appetite.

Markets with highly attractive economic and demographic characteristics represent the greatest potential for us, which at present we collectively term the ‘sweet spot’. This comprises Indonesia, Hong Kong, Singapore, Malaysia, Vietnam, Thailand and the Philippines. We have strong market positions in all of them, including five countries where we have the leading market share.

The life insurance markets in India and China, while attractive in terms of scale, are more challenging for non-domestic life insurers to participate in. Working within these constraints, Prudential Corporation Asia has two joint ventures with leading market shares in these countries and is very well placed as these markets continue to develop.

Since 2008 we have de-emphasised Korea and Taiwan, as the mass life insurance markets are currently driven by product and distribution options that are not attractive to us and consequently we have concentrated on developing successful niche positions. In 2013 we announced our intention to sell our Japan life business, subject to regulatory approvals. However, the mutual fund industries in these markets are highly attractive and, through Eastspring Investments, we are able to take advantage of exciting growth opportunities.

We also continue to plan for the longer term by selectively investing in new countries where we see opportunities based on positive demographic trends. In Cambodia our new life business has made a good start and the relationship with our distribution partner ACLEDA Bank is working well. We have also opened a representative office in Myanmar.

Life insurance distribution

Prudential Corporation Asia is well positioned in terms of its scale and diversity of distribution. Almost 460,000 agents produce around 60 per cent of sales and the remaining 40 per cent comes mainly from partnership distribution agreements that include access to 15,700 active bank branches throughout the region. At the core of our distribution model is our appreciation of the importance of face-to-face interaction and the need to provide customers with high quality advice.

Our success with agency is driven by a relentless focus on quality and professionalism, starting with the initial recruitment and training. We actively manage agency activity (excluding India, up 33 per cent since 2009) and agency productivity (excluding India, up 13 per cent per annum since 2009).

We have exclusive distribution agreements with a number of banks including Standard Chartered Bank and UOB. In 2013, we also added Thanachart Bank, significantly increasing our distribution reach in Thailand. Success in bancassurance depends on the ability to activate relationships quickly and focus on long-term customer solutions through in-branch, face-to-face advice-based selling.


Our product portfolio is centred on providing a robust financial safety net to customers at a reasonable price. The product mix reflects this with around one third of premiums directed to health and protection products, one third to unit-linked products and one third to participating products. This profile shows that we are de-risking our customers’ lives while also de-risking the business from the shareholders’ perspective.

Over 90 per cent of our new business is regular premium.


Prudential Corporation Asia has over 12 million life insurance customers and 19 million in-force policies. We actively manage customer satisfaction levels across multiple indicators, but key statistics are the numbers of customers who keep their policies (our retention rate is 93 per cent), and the number of customers who buy more policies from us (in 2013, 40 per cent of APE sales were from existing customers). This reflects the success of our advice-driven approach and shows that customers appreciate the value of the products we provide.

Innovations in service are also important to customer satisfaction. Some are technology based such as e-submissions and automated underwriting, but another key component is innovation with the human touch such as Indonesia’s PRUhospital friend.

Asset management

Eastspring Investments, Prudential’s asset management business in Asia, manages investments for Prudential’s Asia, UK and US life companies and also has a broad base of third-party retail and institutional clients. It has extended distribution reach to the US and Europe.

Eastspring Investments was awarded the ‘Best Asset Management Company of the Year – South-east Asia’ at The Asset Triple A Investor and Fund Management Awards 2013. Eastspring Investments also received multiple accolades for its investment capabilities, including five fund managers across four markets rated as top 10 ‘2013 Most Astute Investors in Asian currency bonds’ by The Asset Benchmark Research; and the business in Malaysia was named ‘Best Group in Equity’ by ‘The Edge Lipper Malaysia Fund Awards 2014’.

Corporate social responsibility activities

Prudential is a committed member of the communities where we operate and through the Prudence Foundation, we drive social responsibility activities, with a focus on providing disaster relief, promoting financial literacy, and children’s education.

During 2013, Prudential extended its highly successful children’s financial literacy programme, ‘Cha-Ching’; for example, this has now been adopted in the Philippines as part of the school curriculum.

In April 2013, the Prudence Foundation announced a series of four multi-country programmes in partnership with Save the Children and Plan International with two main objectives: to enable communities to better cope with disasters, and to help children receive a better start to their education through the First Read initiative. More than 170,000 people in Cambodia, Indonesia, the Philippines, Thailand and Vietnam are expected to benefit from these programmes over a three-year period.

In November 2013, the Philippines suffered one of the worst disasters in its history, Typhoon Haiyan. Prudential has mobilised resources and committed to provide US$2 million (£1.25 million) to the immediate disaster relief and longer-term community rebuilding efforts.

A screen displaying a 'Cha-ching' cartoon

Cha-Ching – money-smart kids

A financial literacy programme that includes three-minute cartoons to teach children four key money management concepts: earn, save, spend and donate.

  • Developed with world-leading experts (Dr Alice Wilder PhD and Turner Broadcasting)
  • One of Cartoon Network’s highest rated shows in Asia
  • 60+ million page views on website
  • Takes the dialogue to children aged seven to 12, engages entire family
  • Over 70,000 children have participated in school engagement programmes


  1. The comparative results have been adjusted from those previously published for the retrospective application of the new and amended accounting standards. In addition, following its reclassification as held for sale at 31 December 2013, operating results exclude the result of the Japan life insurance business. Comparatives have been retrospectively adjusted on a comparable basis.
  2. Excluding the 2012 one-off gain of £51 million from the sale of Group’s holding in China Life Insurance Company in Taiwan.
  3. Prudential estimates based on IMF data – October 2013.
  4. Source: The emerging middle class in developing countries, Homi Kharas – Brookings Institute (March 2010). Prudential estimates.
  5. Source: UN Department of Economic and Social Affairs / Population Division. World Population to 2030. Prudential estimates.
  6. World Health Organisation – Global Healthy Expenditure Database (2011). For Hong Kong – Food and Health Bureau, Government of Hong Kong (2010). For Taiwan – data as of year 2006.
  7. As at 30 September 2013.

Our markets

Map of 'Sweet spot' markets, and other Asian markets

Our ‘sweet spot’ markets

Scene from Indonesia

Indonesia (1)

Indonesian flag

Unmatched platform with scale and geographic reach

  • 327 agency offices in 137 cities
  • 62 per cent of industry’s licensed agents
  • Hi-tech agency training and licensing
  • ‘All-in-one’ product solution combines protection, investment and savings
  • Conventional and Takaful options
  • Value-added services such as ‘PRUhospital friend
Scene from Singapore

Singapore (1)

Singaporean flag

Professional agency complemented by a unique range of bank partners

  • Full year 2013 saw active agency numbers increase by 9 per cent and productivity increase by 10 per cent
  • Fast growing bancassurance with Standard Chartered Bank, UOB and Maybank
  • Market leading Prushield product drives customer acquisition
  • Expanding high net worth segment
Scene from Hong Kong

Hong Kong (4)

Hong Kong flag

Resilient distribution platform

  • Leading insurer with scale in agency and bank distribution
  • Full year 2013 saw 5 per cent increase in active manpower and a 30 per cent increase in productivity
  • Successful partnership with Standard Chartered Bank now in 16th year
  • Product innovations drive new customer acquisition and repeat sales
Scene from Malaysia

Malaysia (1)

Malaysian flag

Well positioned to capture emerging opportunity in Bumi segment

  • 42 per cent of industry’s Bumi agents
  • Pioneer in linked policies with riders for flexible savings and protection
  • 26 per cent7 market share of Takaful (Sharia compliant) life business
Scene from Philippines

Philippines (1)

Phillipines flag

Rapidly scaling up distribution

  • More than doubled agency size in less than two years
  • Expanding across country
  • Improving efficiency – 80 per cent of policies now processed ‘straight through’
  • Market leader in linked with protection policies
Scene from Vietnam

Vietnam (1)

Vietnamese flag

Long-term industry leader

  • Industry number one since 2007
  • 32 per cent of industry’s agents; productivity increased by 16 per cent in full year 2013
  • Building bancassurance: eight partners and access to 260 branches
Scene from Thailand

Thailand (9)

Thai flag

Excellent bancassurance platform

  • Access to over 800 branches nationwide
  • Rapid activation of new partnership with Thanachart Bank
  • Launched 15 new products on first day of partnership

( ) Prudential’s rank in insurance market by new business APE. Based on formal (competitors’ results releases, local regulators, insurance associations) and informal (industry exchange) market share data. Thailand market position and market share are post-acquisition of Thanachart Life.

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