Prudential’s Q1 New Business Profit Soars 12% Amid Hong Kong and China Growth Surge

LONDON — Prudential PLC (PRU) delivered a robust start to 2025, reporting a 12% year-on-year rise in new business profit to $608 million for the first quarter, driven by surging demand in its two key markets: Hong Kong and mainland China. The insurer’s strategic focus on Asia, particularly its flagship Hong Kong operations and its growing mainland China joint venture, positioned it to capitalize on regional momentum despite broader economic headwinds.

Hong Kong: The Engine of Growth
Hong Kong, Prudential’s largest market, saw double-digit growth in new business profit, fueled by a rebound in sales volumes and margin expansion. The insurer attributed this success to repricing initiatives implemented in 2024, which adjusted product pricing to improve profitability without deterring customer uptake. A critical driver was the resurgence of mainland Chinese tourists, who account for nearly 40% of Hong Kong’s luxury insurance sales. Their return, following pandemic restrictions, injected vitality into the market, with high-value policies for wealth management and life insurance propelling results.

Mainland China: Sustained Demand in a Challenging Landscape
In mainland China, Prudential’s joint venture with CITIC Group (CITIC Prudential Life) also delivered double-digit profit growth, benefiting from strong first-quarter demand traditionally linked to New Year savings and investment patterns. The insurer highlighted operational improvements in its mainland operations, including expanded distribution networks and digital tools to attract younger, wealthier customers. This growth contrasts with broader macroeconomic uncertainties, such as tepid consumer spending and regulatory scrutiny in the financial sector, underscoring Prudential’s ability to navigate local challenges.

Mixed Performance in Other Markets
While Hong Kong and China were standouts, other regional markets presented a more nuanced picture. Singapore and Indonesia grew steadily through agency and bank partnerships, while markets like Vietnam and Malaysia lagged. Vietnam’s new business profit dipped due to weak consumer confidence, and Malaysia’s decline followed a strong prior-year quarter and pricing adjustments in health insurance. Prudential noted these setbacks as isolated, however, and reaffirmed its confidence in its Asia-centric strategy.

Asset Management Resilience and Leadership Comments
Prudential’s asset management arm, Eastspring Investments, reported $256.2 billion in funds under management (FUM) as of March 31, a slight dip from $258.0 billion at year-end 2024. CEO Anil Wadhwani emphasized that global trade tensions, such as U.S.-China tariff disputes, had not directly impacted Prudential’s operations. “Our focus on Asia’s growing middle class and their insurance needs remains our North Star,” he stated, reinforcing the firm’s commitment to its core markets.

Conclusion: A Positive Outlook, Anchored in Asia’s Potential
Prudential’s Q1 results underscore its position as a beneficiary of Asia’s long-term demographic and economic trends. With Hong Kong and China accounting for over 50% of its new business profit, the insurer’s performance aligns with the region’s rising wealth, urbanization, and demand for insurance solutions. The 12% profit growth and double-digit gains in key markets suggest strong execution of its strategic initiatives, such as product repricing and expanded distribution.

However, investors should monitor risks in secondary markets like Vietnam and Malaysia, where macroeconomic pressures could persist. Additionally, while Eastspring’s FUM remains stable, its slight decline hints at challenges in attracting capital amid volatile equity markets.

For now, the data supports a bullish stance on Prudential. With Asia’s insurance penetration still below global averages and its middle class expected to expand by 40% by 2030, the company is well-positioned to capitalize on this growth. The Q1 results, coupled with Wadhwani’s confidence, suggest that Prudential’s Asia-first strategy is paying off—making it a compelling investment in an otherwise uncertain global landscape.