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PRUDENTIAL PLC JONATHAN BLOOMER GROUP CHIEF EXECUTIVE MERRILL LYNCH EUROPEAN BANKING AND INSURANCE CONFERENCE 8 OCTOBER 2003.

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Prudential plc jonathan bloomer group chief executive

PRUDENTIAL PLC

JONATHAN BLOOMER

GROUP CHIEF EXECUTIVE

MERRILL LYNCH EUROPEAN BANKING AND INSURANCE CONFERENCE

8 OCTOBER 2003


Prudential plc jonathan bloomer group chief executive

This presentation may contain certain "forward-looking statements" with respect to certain of Prudential's plans and its current goals and expectations relating to its future financial condition, performance and results. By their nature, all forward-looking statements involve risk and uncertainty because they relate to future events and circumstances which are beyond Prudential's control including among other things, UK domestic and global economic and business conditions, market related risks such as fluctuations in interest rates and exchange rates, the policies and actions of regulatory authorities, the impact of competition, inflation, deflation, the timing, impact and other uncertainties of future acquisitions or combinations within relevant industries, as well as the impact of tax and other legislation and other regulations in the jurisdictions in which Prudential and its affiliates operate. As a result, Prudential's actual future financial condition, performance and results may differ materially from the plans, goals, and expectations set forth in Prudential's forward-looking statements.

Prudential undertakes no obligation to update the forward looking statements contained in this presentation or any other forward looking statements it may make.


An internationally diversified business

AN INTERNATIONALLY-DIVERSIFIED BUSINESS

UK & Europe

USA

Asia


Prudential plc jonathan bloomer group chief executive

GEOGRAPHICAL DIVERSIFICATION

New business achieved profits

1998 1H

New business achieved profits

2003 1H


Prudential plc jonathan bloomer group chief executive

UK INSURANCE OPERATIONS: FROM SIZE TO SCALE

£27 BILLION SAVINGS GAP

  • Product range focused solely on profitable segments

    • average spread on individual annuities of over 150bps, an increase of nearly 50bps since 1H2002

    • group pensions via business-to-business channel continues to grow

    • leading distributor of with-profit bonds through IFAs; developing next generation products

  • Addition of bancassurance to strong distribution franchise

    • developing wider partnership with Abbey National

    • Zurich partnership successfully launched in May 2003

    • conversations continue with potential bank partners


Uk insurance operations managing costs

UK INSURANCE OPERATIONS: MANAGING COSTS

COST REDUCTIONS ON TARGET

£m

  • £155m of savings realised

  • Annualised value of £180m

  • Mumbai office opened 30 May 2003

  • £200m of annualised savings by end of 2003


Asset management m g

ASSET MANAGEMENT: M&G

ROBUST PROFITABILITY PERFORMANCE

M&G Profits

£m

  • Operating profits up, despite falling equity markets

  • Well-diversified revenue stream

  • Continued life fund out-performance

  • No 2 retail mutual fund provider in UK

  • Building European presence


Egg value per customer continues to trend upwards

EGG: VALUE PER CUSTOMER CONTINUES TO TREND UPWARDS

Revenue per customer has grown steadily, while cost per customer has fallen sharply

Total Egg customers up to 3 million

in UK

Marketing acquisition costs remain at £20-25 per card


Jackson national life overview

JACKSON NATIONAL LIFE: OVERVIEW

US HAS 70% OF WORLD’S RETIREMENT ASSETS

  • Scale player in US life industry

  • Low-cost, flexible infrastructure

  • Excellent product manufacturing and administrative capability

  • Relationship-driven distribution model

  • Strong risk management capabilities and financial discipline


Jackson national life new initiatives

JACKSON NATIONAL LIFE: NEW INITIATIVES

MOVING INTO THE MANAGED ACCOUNT BUSINESS

  • Capitalises on JNL’s strengths

    • distribution

    • technology

    • innovation

  • From $2,000,000 of assets down to $25,000

  • All the advantages of a consultative sale process

    • portfolio customisation

    • automation of tax and paperwork

  • Attractive business proposition for producers and customers in any market climate

  • Continued diversification of JNL’s sales and asset mix


Prudential plc jonathan bloomer group chief executive

THE ASIAN OPPORTUNITY

Population (m)

Long-term GDP Growth Rates

Now

2030

China

India

Indonesia

Japan

Vietnam

Philippines

Thailand

S. Korea

Malaysia

Taiwan

Hong Kong

Singapore

1,259

986

206

126

80

76

62

46

22

22

7

4

1,470

1,380

285

117

110

119

77

53

34

32

8

4

Percentage of Holdings By Asset Class

Savings Rates

Other/Misc

Mutual Funds

Equities

Fixed Income Securities

Pensions

Life Insurance

Cash/Deposits


Prudential plc jonathan bloomer group chief executive

ASIA: LIFE MARKETS OVERVIEW

LIFE PENETRATION INCREASES AS ECONOMIES DEVELOP

Life Penetration

  • North Asian markets dominate in terms of scale

  • Strong correlation between GDP per capita and penetration of life insurance

  • Inflexion point at $10,000

  • Tremendous potential for nascent markets (eg. urban populations in China and India)

Penetration, 19991

= $1bn in NB Premiums

12%

10%

S Korea

Japan

8%

6%

Taiwan

Hong Kong

4%

Singapore

Malaysia

2%

Philippines

India

Thailand

Indonesia

China

0%

Vietnam

100

1,000

10,000

100,000

Per Capita GDP2, USD (log scale)

1. Source: Swiss Re; 2. Source: CIA


Well diversified in terms of geography products and distribution

WELL-DIVERSIFIED IN TERMS OF GEOGRAPHY, PRODUCTS AND DISTRIBUTION

South Asia

Greater China

North Asia

Country

Sing

Mal

Thai

Indo

Phil

Vietnam

India

HK

Taiwan

China*

Japan

Korea

Products:

Life: traditional

unit-linked

Mutual funds

General

Distribution:

Agency

Bank

Broker

Direct

Top 5 Positions:

Life (by new business)

Mutual funds (by FUM)

1994

June 2003

* Guangzhou


Long term commitment to the region

LONG-TERM COMMITMENT TO THE REGION

PRUDENTIAL BRAND IS A POWERFUL ASSET

Prudence

UK

heritage and

credentials

Understanding

customer needs

Strong competitive advantage for PCA


A powerful regional presence

A POWERFUL REGIONAL PRESENCE

RECOGNITION THROUGHOUT THE REGION


Prudential plc jonathan bloomer group chief executive

23 BANK PARTNERS ACROSS 11 COUNTRIES


A leading regional life insurance player

  • Nippon Life

  • Cathay Life

  • Samsung Life

  • Aegon

  • Aviva

  • Mass Mutual

  • US Prudential

  • Sun Life

  • Zurich

  • Axa

A LEADING REGIONAL LIFE INSURANCE PLAYER

Number of markets with top 5 Life position

  • Second only to AIG in penetration and overall life market share

  • With the exception of large domestic players such as Cathay Life (Taiwan), Nippon Life (Japan) Samsung Life (Korea) and Great Eastern Life (Singapore and Malaysia) all the principle regional players are North American or European

  • AIG

6-8

Prudential

  • Manulife

  • Allianz

4-5

  • Great Eastern

  • NY Life

  • ING

2-3

0-1

1-2

3-6

7-8

9+

Number of market presences/life licences

As at March 2003

Source: PCA analysis


Prudential corporation asia sustaining momentum

PRUDENTIAL CORPORATION ASIA: SUSTAINING MOMENTUM

  • 4.7m customers, up from 3.5m a year ago

  • India’s largest private sector life company with 37.1% new business market share*

  • PCA Life Japan: focus on financial advisers

  • Launched new Beijing life operations in Q303

  • Product mix actively managed

  • Increasing operating efficiencies

  • Ongoing focus on agency quality

  • Piloting new CRM programmes

  • Updating customer research

Continuing to build scale

Investing for the future

Managing profitability

Strengthening customer relationships

* For private sector – 3.0% share of market new business including LIC


Mutual funds a regional leadership opportunity

MUTUAL FUNDS: A REGIONAL LEADERSHIP OPPORTUNITY

  • Leading positions in India and Taiwan

  • JV with Bank of China in Hong Kong

  • Licensed and operating in Japan, Malaysia, Singapore

  • Second largest fully owned foreign ITMC in Korea

Building a platform to become regional mutual fund leader


Prudential plc jonathan bloomer group chief executive

ASIA: MODEST CAPITAL REQUIREMENT

NET CAPITAL FLOWS

274

  • Total net capital invested 1994 to H1 2003: £890m

  • Net capital requirement of circa £100m per annum until 2005

144

158

143

76

56

22

11

7

(1)


Prudential plc jonathan bloomer group chief executive

ASIA PROFIT PROGRESSION

1998

1999

2000

2001

2002

1H2003

(£m)

(£m)

(£m)

(£m)

(£m)

(£m)

New business achieved profit

56

90

153

255

307

123

Margin

74%

73%

60%

59%

60%

51%

Retail FUM *

69

453

1,649

3,296

5,232

5,886

Operating achieved profit

83

125

213

415

516

162

before development expenses

MSB profit from established

29

31

40

56

79

40

operations

*Includes mutual funds under management and Hong Kong Mandatory Provident Fund


Conclusion

CONCLUSION

MANAGING THE BUSINESS IN A TOUGH ENVIRONMENT

  • Solid start to the year demonstrated in 2003

  • International diversification provides platform for profitable growth

  • Continued growth in Asia

  • Financial strength underpins market presence


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