Prudential : Annual Report and Accounts FY23

Prudential plc Annual Report 2023

For Every Life, For Every Future

A strategy to protect Asia & Africa

We are inspired by our purpose

For Every Life, For Every Future

Our mission is to be the most trusted partner and protector for this generation and generations to come, by providing simple and accessible financial and health solutions.

This report contains references to Prudential plc's website. These references are for readers' convenience only and information included on Prudential plc's website is not incorporated in, and does not form part of, this annual report.

The Directors' Report of Prudential plc for the year ended 31 December 2023 is set out on pages 150 to 197 and 365 to 404 and includes the sections of the annual report referred to in these pages.

Strategic report1

Key highlights for the year4

Our business at a glance6

Investment case8

Chair's statement 10

Our clear and simple strategy 12

Market review 14

Strategy in action 16

Group-wide enablers 22

Strategic and operating review 24

Business model 30

Key financial performance indicators 32

Financial review 34

Segment discussion 47

Risk review 56

Viability statement 72

Risk factors 74

Section 172 and stakeholder engagement 88

Sustainability 97

TCFD 119

Reference tables 128

Non-financial and sustainability information statement 149

Governance 150

Governance at a glance 152

Diversity 154

Our leadership 155

Corporate governance 163

How we operate 165

Risk management and internal control 176

Committee reports 178

Statutory and regulatory disclosures 195

Index to principal Directors' report disclosures 197

Directors' remuneration report 198

Annual statement from the Chair of Remuneration Committee 200

Remuneration at a glance 204

Annual report on remuneration 206

Additional remuneration disclosures 223

Financial statements 226

European Embedded Value (EEV) Basis Results 340

Additional information 364

Index to the additional unaudited financial information 366

Glossary 393

Shareholder information 399

How to contact us 402

Our reporting suite

Annual Report

Image: Father and daughter agency team, Louis and Quiny.

> Find out more about their story atPrudential plc.com

Sustainability Report

Strategic reportGovernanceDirectors' remuneration reportFinancial statementsEEV basis resultsAdditional information

Strategic Report

Strategic Report

Key highlights for the year4

Our business at a glance6

Investment case8

Chair's statement 10

Our clear and simple strategy 12

Market review 14

Strategy in action 16

Group-wide enablers 22

Strategic and operating review 24

Business model 30

Key financial performance indicators 32

Financial review 34

Segment discussion 47

Risk review 56

Viability statement 72

Risk factors 74

Section 172 and stakeholder engagement 88

Sustainability 97

TCFD 119

Reference table 128

Non-financial and sustainability information statement 149

Key highlights of the year

Delivering the next chapter of growth

Financial highlights(1)(3)

New business profit

$3.1bn

+45% CER(2) +43% AER(2)

Adjusted operating profit

$2.9bn

+8% CER +6% AER

Operating free surplus generated from in-force insurance and asset management business

$2.7bn

+1% CER (1)% AER

Operating free surplus generated

2.0bn

(8)% CER (8)% AER

IFRS profit after tax

$1.7bn

up from a loss after tax of $(1.0bn) AER(3) in 2022

IFRS shareholders' equity

$17.8bn

+7% AER(3)

Adjusted IFRS shareholders' equity

$37.3bn

+6% AER(3)

EEV shareholders' equity

$45.3bn

+7% AER

• (1) The financial highlights presented above are the key financial metrics Prudential's management use to assess and manage the performance and position of the business. In addition to the metrics prepared in accordance with IFRS standards - IFRS profit after tax and IFRS shareholders' equity - additional metrics are prepared on alternative bases. The presentation of these key metrics is not intended to be considered as a substitute for, or superior to, financial information prepared and presented in accordance with IFRS Standards. The definitions of the key metrics we use to discuss our performance in this report are set out in the "Definition of performance metrics" section later in this document, including, where relevant, references to where these metrics are reconciled to the most directly comparable IFRS measure.

• (2) CER - Constant exchange rates, AER - Actual exchange rates.See note A1 to the IFRS financial statements for more detail on our exchange rate presentation.

• (3) IFRS Comparatives for 2022 have been restated to reflect the retrospective application of IFRS 17. See note A2.1 to the financial statements for further information and reconciliation.

• (4) The objectives assume exchange rates at December 2022 and economic assumptions made by Prudential in calculating the EEV basis supplementary information for the year ended 31 December 2022, and are based on regulatory and solvency regimes applicable across the Group at the time the objectives were set. The objectives assume that existing EEV and Free Surplus methodology at December 2022 will be applicable over the period.

Our key financial objectives:

These are a very strong set of results in a challenging environment, driven by our focus on execution. It is an illustration of the strength of both our agency and bancassurance channels as well as an affirmation of our leadership position in many of our key markets."

Anil Wadhwani, Chief Executive Officer

Growing new business profit at

15-20 %

compound annual growth between 2022 and 20274

New business profit growth of 45% in 2023

Achieving

double-digit

compound annual growth in operating free surplus generated from in-force insurance and asset management business between 2022 and 20274

Stable in 2023, as we invest in our strategic pillars and new business

Our business at a glance

A trusted partner for millions

Our life and health insurance and asset management solutions benefit over 18 million customers across 24 markets in Asia and Africa. We are headquartered in Hong Kong, and have dual primary listings on the Stock Exchange of Hong Kong (2378) and the London Stock Exchange (PRU).

Our markets

Life insurance - offering a range of products including health and protection Asset management

Our marketsLife business Market ranking1

APE SalesTop 10 asset manager2

Eastspring funds under management or advice3

Africa

Top 5 in 6 markets

$158m

(1) As reported at full year 2023 unless otherwise specified. Sources include formal (eg competitors results release, local regulators and insurance association) and informal

(industry exchange) market share. Ranking based on new business (APE sales, weighted new business premium, full year premium or weighted first year premium) or Gross Written Premium depending on availability of data. Rankings in the case of Chinese Mainland, Taiwan and Myanmar are among foreign insurers, and for India is among private companies. Countries based on nine months ended September 2023: Philippines, Ghana (Africa) and Kenya (Africa) and full year 2022: Laos, Zambia (Africa) and Togo (Africa) and full year 2020: Nigeria (Africa).

(2) As reported at full year 2023. Sources include local regulators, asset management association, investment data providers and research companies (eg Morningstar, Lipper).

Rankings are based on total funds under management (including discretionary funds, where available) of onshore domiciled funds or public mutual funds of the respective markets.

(3) Full year 2023 funds under management or advice based on the country where the funds are contractually managed. Excludes funds managed in Luxembourg.

Strategic report

GovernanceDirectors' remuneration reportFinancial statementsEEV basis resultsAdditional information

Investment case

Delivering for our investors

Given the relentless execution focus in implementing our strategy, we are increasingly confident in achieving our 2027 financial and strategic objectives and in accelerating value creation for our shareholders."

Anil Wadhwani

Chief Executive Officer