PRUmultiple Crisis Cover

Prudential launches it multiple crisis cover product this week and expects the plan to contribute 10% of its new business premiums by the end of next year.

Product Features:

• Multiple claims of up to 3 critical illnesses
• Coverage of 2 instances of cancer
• Protection against death and disability
• Premium is 20% higher than its conventional plans
• PRUwaiver can be attached to waive premiums on diagnosis of first critical illness
• Critical illnesses are categorised into 6 groups
• Once a claim is made from a particular group, the group is excluded from future claims

Source: The Star

Ng Keng Hooi Joins Great Eastern

Prudential's former chairman for Malaysia Ng Keng Hooi has taken up a new role in Great Eastern Singapore as the group CEO effective 1 December 2008. He took over from Tan Beng Lee, 65, who retired recently.

Source: The Star

Reasons for Pru's Double-Digit Growth

Prudential enjoyed a double-digit growth in total new business premiums for the 1st 9 months of 2008 compared with the corresponding period in 2007. The reasons cited by Prudential are:

• Transformation of agency force to wealth planners
• Leveraging on technology, especially PRUway, a point-of-sales system
• Aggressive branding: "The Face You Can Trust"

Source: The Star

PRUretirement Accumulator

Prudential launched a regular premium investment-linked product designed for retirement named PRUretirement Accumulator.

Product features:

Accumulation Phase

• Term of 5 to 40 years
• Minimum premium per month: RM100
• Withdrawal is allowed
• Top-up is allowed

Payout Phase

• Guaranteed monthly income
• Withdrawal is allowed
• Top-up is allowed?
  

Death and TPD cover is avaliable. Earlier this year, Manulife also launched an investment-linked retirement product call Secure Income Plus.

Meanwhile, Prudential UK has announced 5 to 10% cut in its maturity bonus.

Source: Bernama, Telegraph

Prudential has twice the capital required under RBC

Prudential has twice the solvency capital required under RBC. It also achieved 39% new business growth in Q3 2008. For 1st 3 quarters in 2008, new business sales went up 20%.

While consumer confidence will be affected with the recent financial turmoil, Prudential is confident that it can weather the crisis due to its strong corporate governance and risk management.

Source: Business Times, The Star

Prudential Retire-Meter 2008

Some of the findings from Prudential Retire-Meter 2008:

• 40% Malaysians felt the need to continue working after retirement due to insufficient retirement fund
• 36% of people were less confident about their retirement compared to last year
• 81% said inflation had gone up and affected their lifestyles
• 72% said they saved, 77% of this 72% invested in low-yielding savings vehicles
• 41% did not know how much was enough for retirement
• 64% did not separate retirement savings from other savings

The survey was based on 1,024 Malaysians from key urban centres in both East and West Malaysia, with a monthly household income of at least RM3,000.

Source: Business Times

Prudential to acquire AIA?

Prudential apparently is in talks with investors in the Middle East and Asia to raise capital to buy parts of AIG's operations in Asia. It is estimated that this will cost US$15 bil.

We reported earlier that AIG wanted to retain a majority interest in the AIA companies. If this is still the case, it would be very surprising for Prudential to take a minority stake. Prudential is already present in most markets along side with AIA, and most regulators will not allow a company to hold 2 insurance licences in the same market.

The remaining possibility is there is a change in mind in AIG, they may now want to sell off some AIA's units to repay the loan from the Fed. If this is the case and Prudential turns out to be the successful bidder, we will see Prudential replacing AIA as the largest insurance player in Asia.

Source: Telegraph

Insurance Shares Fell Sharply

Shares in ING, Prudential and Aviva slided recently as a result of market turbulence.

In UK, share prices of Prudential and Aviva fell sharply. There are indications that the Financial Services Authority (FSA) may ease the capital requirement of UK insurers with writedowns in their investment portfolios.

In Netherlands, ING reported Q3 losses of around US$670 mil, due to US$2.7 bil in various investment losses, write-downs and bad loan provisions. The ING shares fell significantly.

Source: Insurance Daily, The Star

Prudential's 1H Results

Prudential released its 1st half results recently. Its business performance in Asia is not as good as 2007.

Some Facts (1H 2008 compared with 1H 2007):

• New business APE growth: 14% (2008), 48% (2007). Reason given by Pru: "What's your number?" and variable annuity product were introduced in Taiwan in 2007, contributed to spectacular growth
• New business profit increased by 15% to £336 mil
• Taiwan sales declined by 36% to £97 mil APE
• NB growth in other countries: Indonesia (96%), China (>50%), India (45%), Vietnam (39%)
• IFRS operating profit before tax increased by 28% to £102 mil

Source: Prudential

Partnership with Standard Chartered Extended

Prudential has extended its bancassurance partnership in Asia with Standard Chartered to 2016.

Other details:

• The markets covered has been broadened to include Japan and Thailand in addition to the original Hong Kong, Singapore and Malaysia.
• New products now included in the partnership: A&H aand Takaful products.
• A separate partnership agreement between the two companies covers 3 other countries: China, Taiwan & Korea.

Source: Investment Week

PRUway

Prudential targets to equip 1,000 of its wealth planner with customised laptops co-branded with Dell, loaded with PRUway software, enabling them to do transactions while on the move.

PRUway software is able to recommend a suitable financial solution for clients after evaluating their financial data. Prudential invested RM12 mil in the notebooks with RM3.4 mil in the costs of hardware and a large percentage of the balance in development of PRUway.

Another 1,000 wealth planners will be equipped with the notebooks in 2009. The eventual target is 5,000 over the next 3 to 5 years.

New product in pipeline: Pru-Cash Premier, a 10-year pay product.

Source: The Star & Business Times

Transforming Agents to Wealth Planners

Prudential is in the process of transforming its agents to wealth planners. The wealth planners are similar to financial advisers in that they would assess a customer's financial position and risk profile before recommending a product.

There will be 3 categories of wealth planners: premier, executive and senior, according to the skills, competence and production level.

Prudential currently has life insurance, general insurance, unit trusts, takaful, will and trust services under its brand.

A point-of-sales technology would be launched in July to assist the wealth planners.

Source: The Star

Medical Product with NCD

Prudential may roll out medical products with No Claim Discount (NCD) in Malaysia. There are also 2 to 3 new retirement products in the plan.

The Company will also spend RM2 mil in rebranding, with a 10-week campaign themed "The Face You Can Trust".

Some facts/statistics/strategies:

• New business annual premiums: RM606 mil (2007) vs RM496 mil (2006), growth rate: 23%
• Market share: 21% (2007), 19% (2006)
• Build other distribution channels: direct marketing, online technology and bancassurance
• Agency force 9,000 (current), 14,000 (2010)

Source: Business Times

News in Brief

1. Prudential and Bank AlJazira in joint venture to conduct takaful business in Saudi Arabia. More >>
2. Takaful Ikhlas provides Group PA cover for 104,480 Rukun Tetangga members and paid out RM400,000 claims so far in 2 years. More >>
3. Axa Affin Life launched an online game on balancing wealth and quality of life, with top prize of RM50,000.

Prudential's New CEO

William (Bill) Lisle will be Prudential Assurance Malaysia Bhd (PAMB) new CEO by end of April, apparently pending BNM's approval.

Bill will replace Tan Kar Hor who has been transferred to head Prudential Group's China life insurance business.

3 years ago, Bill was PAMB's general manager of business distribution.

Source: Business Times