Prudential's operating profits up by 22 per cent, pays special dividend

LONDON - Insurer Prudential posted an above-forecast annual pretax operating profit of 4 billion pounds ($5.68 billion) on Wednesday, boosted by strong performances at its British, US and Asian life businesses.

The 22 per cent rise compared with a consensus forecast of analysts for 3.8 billion pounds, Thomson Reuters data showed.

The firm saw a 60 per cent rise in operating profit in its British life business to 1.2 billion pounds, helped by management actions to shore up its balance sheet under the new Solvency II capital regime, it said in a trading statement.

But M&G, Prudential's UK fund management arm, saw a 7 per cent drop in funds under management to 246 billion pounds.

Prudential, which was the first British insurer to announce a solvency capital ratio under new European rules for insurers, of 190 per cent at end-June 2015, said its ratio at end-December was 193 per cent.

A ratio of 100 per cent shows insurers have sufficient capital to cover underwriting, investment and operational risks.

The firm said it would pay a total dividend of 38.78 pence per share, up five per cent from 2014 though below a forecast of 39.69 pence. It also said it would pay a special dividend of 10 pence per share.