Prudential maintains cautious stance over prospects

Prudential has maintained a cautious stance over its prospects in the UK despite a rally in sales over the last three months …

Prudential has maintained a cautious stance over its prospects in the UK despite a rally in sales over the last three months of 2003.

The group warned uncertainty over the outcome of various Government and regulatory reviews would offset signs of a return in consumer confidence.

The improved trading picture was shown in new business figures, as the Pru said strong demand for with-profit bonds and corporate pension sales had lifted fourth quarter UK new business 10% on the previous three months.

Across the whole of 2003, UK sales were down 19% as the sector faced up to a tough year on the stock market and the resulting loss of investor confidence.

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Three-quarters of the Pru's business is now achieved outside the UK.

The group, which improved sales in Asia by 16% in 2003, also said it had increased its market share in the US.

Chief executive Jonathan Bloomer said he was optimistic for the Pru's US and Asian businesses in 2004, but added that the picture was less clear in the UK.

Key changes to the sector are expected from an overhaul of the way the IFA market operates and from the Sandler Review - a Treasury-commissioned study into the problems facing the savings industry.

Across the group in 2003, the Pru announced annual premium equivalent sales - the standard industry measure to iron out volatility - of £1.6 billion, down 12% when based on constant exchange rates.

The performance in the fourth quarter was stronger, improving 9% on the previous three months.