By Louis Goss
Shares in Asia-focused insurer Prudential continued to slip over the previous day as investors maintained their scepticism towards the firm’s claims its recent losses are simply the result of Covid.
The London listed firm’s shares have lost more than 30 per cent of their value since the start of 2022, as stringent Covid policies across Asia have hammered Prudential’s business.
The 174-year-old firm, first founded in London but later transformed itself into an east Asia-focused life insurance business, posted sharp drops in its new business profits over the first half of 2022 because of China’s zero-Covid policy.
In its most recent results, the insurer claims fast-paced population growth – which is set to see Asia’s population increase by 1.5bn by 2030 – paired with low levels of insurance coverage across the continent, will drive growth in the long term.
In recent years, the insurer has faced calls from activist investment fund Third Point to split itself in two, with a view to freeing up its more valuable Asian business.
However, Prudential warned of “challenging” market conditions over the coming year, despite signs the impacts of Covid-19 are beginning to stabilise.
The firm’s half year results saw it post lower sales in Hong Kong, due to Covid-19, and lower margins in China, on the back of an increase in sales of lower margin critical illness policies, hit Prudential’s profits.
The restrictions aimed at stemming the spread of Covid-19 also slowed Prudential’s sales in its other major markets, including Malaysia, Indonesia, and Singapore.
The “adverse” conditions saw the value of funds managed by Prudential’s asset management arm lose 12 per cent of their value, in the first half of 2022.
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