Prudential PLC 2023 Hy Financial Report en

Prudential plc
2023 Half Year Financial Report
HK Stock Code: 2378
Prudential plc
2023 Half Year Financial Report
At Prudential, it is our mission to be the
most trusted partner and protector for this
generation and generations to come,
by providing simple and accessible
financial and health solutions.
We are Partners.
Looking out for the health of our customers.
Sharing our collective wisdom.
Here to provide peace of mind.
We are Protectors.
Adding value to our communities.
Supporting a sustainable and inclusive future.
Here for this generation and the next.
Contents
Business performance
Our operations
02 Business performance
04 Strategic and operating review
16 Financial review
30 Risk review
48 International Financial Reporting

Standards (IFRS) financial results
96 European Embedded Value (EEV)

financial results
118 Additional information
IFRS financial results

120 Additional financial information
137 Risk factors
150 Corporate governance
151 Disclosure of interests of Directors
153 Shareholder information
04
155 How to contact us
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Our financial
performance
EEV financial results

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MORE 16
Our risk profile

Additional information
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MORE 30
Prudential plc 2023 Half Year Financial Report 01
Business
performance
04 Strategic and operating review
16 Financial review
30 Risk review
02 Prudential plc 2023 Half Year Financial Report prudentialplc.com

Business performance IFRS financial results EEV financial results Additional information
03
Prudential plc 2023 Half Year Financial Report
Strategic and operating review
Our strategy sets out how we will deliver on

our purpose over the next five years to 2027.
We believe consistent delivery of our strategy
will create value for all our stakeholders:
employees, customers, shareholders and
the communities in which we operate.

Prudential has a broad footprint across Asia and Africa that provides Our Strategy
access to a total market that is estimated will generate almost Our strategy sets out how we will deliver on our purpose over the next
$1 trillion1 of incremental annual gross written premium in 2033 five years to 2027.
compared with 2022. We are a well-established brand name2, having
operated for 175 years globally and 100 years in Asia. We have top-3 We believe consistent delivery of our strategy will create value for
positions in 12 of our 14 Asian life markets3 and 4 of our 8 African all our stakeholders: employees, customers, shareholders and the
markets. Overall, 18 million4 customers have had the confidence to communities in which we operate. Our strategy will be implemented
choose Prudential. We are the only large Asian focused insurer to to build a sustainable growth platform, through targeted investment
have scale in both agency and bancassurance, as well as in-house in structural growth markets across Asia and Africa.
investment capabilities with Eastspring managing over $220 billion The implementation of our strategy will prioritise:
of assets.
> Enhancing customer experiences to drive higher acquisition
In February 2023 Anil Wadhwani joined as Group CEO. In his first six and loyalty for lifetime value creation.

months he undertook a thorough strategic and operational review > Technology-powered distribution with a focus on agency
of the Group, meeting our customers, people, distributors, partners, and bancassurance productivity and activation.
regulators, investors and other capital providers. Following these > Unlocking the health opportunity by disciplined
discussions, Prudential is setting out, alongside the 2023 Interim implementation of best practices across all our markets.
Results, our revised purpose and strategy for the Group, reflecting
strategic, operational and capital allocation priorities for the next > More consistent execution across each of our markets,
five years to 2027. driven through changes in our organisational model and
technology platform.
Throughout Prudential’s 175 years in operation, we have a long > Prioritising value creation, focusing on the generation of free
history of evolving to meet the ever-changing needs of the markets surplus that can be used to invest in new business at attractive
in which we operate and the customers we serve. Today we are returns, core capabilities and strategic opportunities as well as
announcing that we will do things differently in the way we run return capital to shareholders via dividends.
Prudential based on clear strategic, operational and capital
allocation priorities. Our strategy comprises the following components:
Our Purpose a) Organisational model. A change in our organisational model will be

Our purpose is our platform to say who we are, what we do and where key to the delivery of our strategy. Today we have 24 life insurance
we are going as an organisation. We have revised it to make it clearer and asset management local market operations that are largely
and differentiate Prudential from others in the market. It defines ‘why’ fragmented with different processes on key customer journeys,
we are in this business and what it is we try to achieve as custodians different standards for measuring distribution performance and

of stakeholder value for the long term. inconsistent execution of our brand. We will implement changes to
this model that we believe will help support the drive for quality sales
Our new purpose is: For Every Life, For Every Future. and improve the economic value we can generate from our business.
Our mission is to be the most trusted partner and protector for this b) Multi-market growth engines. The strength of our capital gives us
generation and generations to come by providing simple and the opportunity to invest in the multiple growth engines across
accessible financial and health solutions. Greater China, our markets within the Association of Southeast Asian
“For Every Life” speaks to our ambition to meet the huge under- Nations (ASEAN), India and Africa. Our approach to these markets
served needs of potentially four billion people5 across our markets is further discussed below.
in Asia and Africa. With the collective wisdom of our talented people, c) Strategic pillars. Three initiatives that will drive our growth:
we will partner with customers to improve their health and financial 1. Enhancing customer experiences;
understanding so that they can build the life they want.
2. Technology-powered distribution; and
“For Every Future” speaks to our ambition to add value to the wider
community, for a more sustainable and inclusive future. We are here 3. Transforming our health business model.
to protect this generation, just as we have previous generations, d) Group-wide enablers:
and those we are yet to meet. 1. Open-architecture technology platform
2. Engaged people and high-performance culture; and
3. Wealth and investments capabilities.

e) Financial value creation. Our financial model means we are
a natural growth compounder, with new business growing our
embedded value that converts into free surplus available for
reinvestment and distribution. We believe our strategy will
accelerate value creation for our stakeholders through operational
& financial discipline.

Strategic and operating review / continued
a) Organisational model > ASEAN

We have an opportunity to drive more operating leverage by – ASEAN includes a diversified range of markets. Collectively, these
replicating best practice at pace and scale across all our markets. markets have a combined population of more than 600 million
This organisational model will be designed using the following people13 which can provide a crucial counterbalance that ensures
key principles: we are not over-dependent on one single geography.
> Designed to have the customer at the heart of what we do; – We have the largest multi-channel distribution franchise in this
> Continued empowerment of local market CEOs and leaders region with more than 40,000 active agents24, or 60 per cent
of the businesses to deliver customer solutions and focus on of the Group’s total active agents. We have established bank
what matters most in each market; partners including Standard Chartered, UOB and VIB.
> The establishment of centres of excellence and shared services – We have a prominent brand and reputation across the region,
across many of the functional groups – for example health, and are among the leading franchises across Singapore14,
technology and data analytics – to deliver economies of skill Malaysia15 and Indonesia16 (including the number one position
and scale; in Sharia across both Malaysia15 and Indonesia16) plus top
2 positions in the fast-developing markets of the Philippines17,
> Collaboration between the local markets and the centre with Vietnam18, Cambodia19 and Laos20.
roles and responsibilities clearly defined; and
– In Thailand, we continue to grow through our bancassurance
> Setting values that will help define the ways of working. business.
The ‘how’ alongside the ‘what’ will therefore be an important
part of our Group reward mechanism. – Our strategy will seek to leverage this leading platform across
these markets.
To deliver on our strategy, we will need to build capabilities,
particularly across our three strategic pillars of customer, distribution > India
and health, with technology and data being common to all three. – In India we will seek to grow our franchises, which will be
important to our scale in Asia. With over 1.4 billion people and
We believe these changes in our organisational model will help us where the share of health expenses paid out-of-pocket are as
drive greater consistency of experience, as well as economies of scale, high as 50 per cent22, India is a compelling opportunity. We are
providing value for both our customers and our shareholders. exploring options to address the health opportunity in India.
b) Multi-market growth engines – We have a successful partner in ICICI Bank and continue to
A key differentiator for our business is the breadth of our access to the work closely with them on both life and asset management.
world’s fastest-growing markets. Our markets are expected to more > Africa
than double in size creating an almost $1 trillion growth opportunity1. – Though making a relatively small contribution to our overall
Growing twice as fast as the rest of the world6, the rapidly rising new business profit today, Africa’s high growth rates present
middle-class population in Asia is expected to increase the awareness a longer-term opportunity.
of, and demand for, protection and wealth management solutions.
– We are focusing on the highest value markets where we have
Asia still has low levels of life insurance penetration relative to more the strongest competitive advantage.
mature markets like the UK7, demonstrating our runway for growth.
State provision of pensions and social security is limited, leading to c) Strategic pillars
vast health, protection and mortality gaps. In Asia, penetration is in 1. Enhancing customer experiences
the low single digits7 with protection out of pocket spend four times In order to succeed in its broader new business profit objective,
larger than the US8, creating a large and growing unmet need. Prudential is committed to evolving from being organised around
products and channels to become the most trusted partner to
Our strategic planning has taken into account how growth our customers.
will be delivered across the following four regions within our
geographical footprint: The priorities are:
> Greater China > Acquisition by personalised targeting: We will focus our data
and technology resources to drive up the quality of leads from
– Throughout this geography we seek to sustain quality growth. social media and our ecosystem of partners so that agents can
– In the Chinese Mainland, we have an established partner, CITIC, more easily identify opportunities for engagement;
which gives us access to over 80 per cent of GDP and licences > Segmentation by life stage: To develop impactful propositions
to operate in 100 cities. We are one of the top three international for our customers we will build an understanding of what our
players9 there with a distinctive multi-channel platform. customers need based on life stages;
We have an opportunity to make our agency channel larger
and more productive, complementing our multiple > Differentiated propositions: To meet customer demand for
bancassurance partnerships. comprehensive solutions we will develop comprehensive solutions
integrating products with health, well-being and wealth services
– In Hong Kong, we have revitalised our business, not only through as a one stop proposition for our target segments; and
the traction seen in the Chinese Mainland visitor segment but
also by ensuring we continue to grow our domestic business. > Simple tech-enabled journeys: To build competitive advantage
With our recently opened Macau branch, we are present in in acquiring and retaining customers over their lifetimes, we will
all 11 cities in the Greater Bay Area10 that has an extended seek to curate a seamless end-to-end journey via a unified,
population of over 85 million people11. scalable technology platform. With PruServices, we are increasingly
able to offer self-service for simple enquiries, service and claims
– In Taiwan we are the number one foreign player12 having anytime, anywhere.
developed a sustainable bancassurance channel with
good margins. Our customer-centric strategy aims to deliver top quartile relationship
net promoter scores by 2027 which will support greater retention
and acquisition of customers. With a retention ratio already close to
90 per cent23, we will focus on expanding our share of wallet with
existing customers over their lifetime.

2. Technology-powered distribution 3. Transforming our health business model
As a leading Asia focused insurer with scale in both agency and There is a major health insurance opportunity in Asia. Across Asia,
bancassurance channels, we are very well-placed for customer access. individuals are reliant on private healthcare providers and have high
These channels will be complemented by our new digital customer out of pocket spend of around 40 per cent7.
interactions and continuous training and development of our agency
force and bancassurance partners. For many years Prudential has had substantial health and protection
businesses in Malaysia, Indonesia, Hong Kong and Singapore.
Agency In 2022, the Group generated over $2 billion in gross earned
Prudential has one of the leading agency forces in Asia, with a total premiums from health insurance.
of over 70,000 active agents24 and 7,000 agents qualifying for Million
Dollar Round Table (MDRT) status38. Our businesses in the Chinese There are substantial opportunities to grow the Group’s footprint
Mainland, Hong Kong, Malaysia, Philippines, Singapore, Thailand across other markets and we believe we can build value in extending
and Vietnam in particular show higher active agent rates than the beyond reimbursement. We want to become a trusted partner to

average across the Group. The future success of our agency channel our customers, playing a much-needed coordinating role across their
will be driven by continuous improvements in productivity and the healthcare journeys.
number of active agents. To drive this, the following five priorities to This ambition will require:
boost productivity for agency have been identified:
> Upgraded core health insurance capabilities. We will equip our
> Upskilling the agency force: Conversion of part-time into full-time distribution force with the knowledge and tools to offer more
career agents; advanced products and value-added services. We will drive
> Refocusing agents from being solely focused on sales to being technical and operational efficiency through data-led risk-based
a trusted adviser; pricing and straight-through-processing in underwriting and
> Quality recruitment: We will focus our recruitment approach into claims. Claims will be further managed by partnering with panels
one centred on tailored and strategic talent sourcing; of preferred medical providers and using Artificial Intelligence
> Training and development: That seeks to ensure we are developing (AI) and data analytics to detect and reduce fraud; and
the next generation of highly productive agents; and > Expanding our role from payer to partner by connecting health
> Enhancing customer servicing and embedding technology: We will care journeys, such as disease prevention, diagnosis, rehabilitation
embed digital tools that allow agents to spend more productive or chronic illness management. Our strategy is an asset-light
time with their customers. approach focusing on digital integration with preferred partners
along the health care continuum.
These changes will support our ambition to increase agency new
business profit by 2.5 to 3 times by 2027 through significantly Delivering this efficiently across our markets will require enhanced
capabilities with best practice replicated across all our markets.

increasing the number of active monthly agents and more than
doubling new business profit per agent. We believe these actions will support our ambition for our health
Bancassurance insurance Net Promoter Score to be top quartile by 2027, driving
Bancassurance provides us with significant scale and is an important retention of existing customers and attracting new ones, and for our
source of new business. It allows us access to large numbers of health new business profit to more than double from 2022 to 2027.
customers in multiple locations using third party infrastructure. d) Group wide enablers
Prudential currently has more than 200 bank partners of which To support the execution of our strategy we will have three groupwide
10 are strategic. We have succeeded in improving bancassurance enablers. We believe this will both support our ambition for growth
margins over time and believe there remains significant growth and management of our in-force business.
runway to increase the penetration of insurance products into this
customer base. 1. Open-architecture technology platform
A strong technology platform is important for all three strategic pillars
For us to drive a successful bank partnership model, it is essential in delivering superior customer and distribution experiences. It is more
for us to: significant today given the pace of change with developments in AI.
> Broaden our proposition to multiple customer segments; Pulse will remain our customer engagement application, but we will
> Engage with our customers when and how they want with hybrid, transform the underlying technology platform using the following
omni-channel platforms; design principles:
> Utilise effective, targeted marketing supported by data analytics; > Open-architecture design that ensures we can quickly adopt new
market innovations and engage with partners’ ecosystems in a
> Reward our bank partners for outcomes that deliver for the
customer and create value; and seamless manner;
> Establish an operating cadence with our bank partners that > A data platform to which we can apply generative AI and data
ensures we deliver all of the above. analytics to create actions and insights;
> Refreshed operating model where there is greater collaboration
Implementing these changes will help drive our ambition by 2027 between the central technology team and local markets; and
to increase new business profit from bancassurance by 1.5 to 2 times.
This will be driven by increasing the penetration of our two major > Appropriate governance and protections for our customer data
strategic partners from circa 8 per cent in 2022 to circa 9-11 per cent and business integrity.
by 2027 and by supporting our margin by increasing the contribution
of health and protection products.

2. Engaged people and high-performance culture Our ability to invest at attractive returns will drive our capital
An engaged workforce is critical to deliver our strategy. allocation priorities which are as follows:
We aim to create an environment that allows our people to thrive, > We will continue to target resilient capital buffers such that the
recognised through a top-quartile employee net promoter score for Group shareholder coverage ratio is above 150 per cent of the
our people. We will focus on the following principles to create this: shareholder Group prescribed capital requirements to ensure
the Group can withstand volatility in markets and operational
> Upgraded talent capabilities, particularly within the areas experience;
of Customer, Distribution, Health and Technology;
> Otherwise, our priority for allocating capital will be re-investing in
> Development of a robust internal talent pipeline, facilitate mobility new business. Our resilient capital position allows us to prioritise
and acquire capabilities in the market where they do not exist investment in new business with an aim to write quality new
internally; and business while managing the initial capital strain and capturing
> Values-based leadership and aligned reward structures to help the economic value at attractive returns;
build a culture that is customer-led and performance-driven. > Our next priority is investing around $1 billion in core capabilities,
3. Wealth and investments capabilities primarily in the areas of Customer, Distribution, Health and
Asia’s household wealth stood at over $150 trillion in 202125, Technology;
broadly in line with North America and considerably more than > Our dividend policy remains linked to net operating free surplus
Europe. By 2030 Asia and Africa will represent three-quarters of generation which is calculated after investment in new business
the global working age population. We believe there is scope for and capability investment;
increasing participation in wealth management propositions > We will invest in inorganic opportunities where there is good
across our markets, including differentiated propositions for affluent strategic fit; and
customers. Our wealth capabilities are currently focused in Singapore > All investment decisions will be made against the alternative of
and Hong Kong, while our investment capabilities in Eastspring span returning surplus capital to shareholders but given the abundance
11 markets and manage over $220 billion of assets. of organic and inorganic opportunities ahead of us, we are
We believe that we can further leverage our internal proprietary confident that in the near-term we will be reinvesting capital
capabilities by focusing on the following priorities: at attractive returns.
> Providing distribution support to our top agents with a more To generate capital to allocate to these priorities we will also prioritise
holistic suite of tools to identify the needs of our affluent managing our in-force embedded value to ensure maximum
customers; conversion into free surplus over time. Over the next five years, based
> Customising investment solutions at a much faster on the economic and other assumptions and methodology that
speed‑to‑market than is possible using a third party; and underpinned our EEV reporting at the end of 2022, we expect to
transfer over $11 billion from VIF and required capital to operating
> Improving consistency of investment performance through
free surplus generated from our in-force insurance business at the
high-performance investment teams.
end of 2022. This is before allowing for the incremental effect of
As an asset manager, it is our ambition to deliver outperformance new business and any return on the underlying assets backing
relative to benchmarks. As a responsible asset owner we are that surplus. We will drive improved emergence of free surplus by
supporting a just and inclusive transition to net-zero and we are managing claims, expense and persistency in each market. As set
targeting a 55 per cent reduction in our weighted average carbon out above, this additional free surplus will enable our continued
intensity (WACI) by 203026. investment in profitable new business at attractive returns, as well
as in our strategic capabilities, and support payments of dividends.
e) Financial value creation
Delivery of our new strategy will accelerate value creation through To support our ambition for growth, we have the following
operational and financial discipline, underpinned by improving overarching objectives:
customer, agency and bank partner propositions, as well as capturing
> Over the next five years to 2027 we will look to grow new business
economies of scale through our organisational model and
profits27 across all our markets more consistently, with an objective
technology platform. of 15-20 per cent compound annual growth from the level of new
We are able to invest capital to write new business that generates business profits achieved in 2022*.
three times the amount invested, at internal rates of return above > Also over the next five years to 2027, we will aim for double-digit
25 per cent with less than four-year payback periods. Over the last compound annual growth in Operating free surplus generated
10 years, new business contributed $27 billion of growth to our from in-force insurance and asset management business34,
embedded value, and EEV related to our life and asset management from the level achieved in 2022*.
business almost tripled.

Objectives Summary* Eastspring’s funds under management and advice increased by
New business profit 3 per cent30 to $227.7 billion at 30 June 2023, from $221.4 billion
at 31 December 2022, reflecting inflows from both external clients35
Full Year 2022 Objective 2027 and our life business as well as positive market movements.
Amount $2.2 billion $4.4 –$5.4 billion From 1 January 2023, the Group has adopted the revised
change % (compound annual rate) 15-20% international accounting standard for insurance business, IFRS 17.
Group adjusted IFRS operating profit based on longer-term
Operating free surplus generated from in-force insurance investment returns (adjusted operating profit) for the first half of
and asset management business34 2023 was $1,462 million, 6 per cent28 higher than the first half of
Full Year 2022 Objective 2027 2022 calculated on the new IFRS 17 basis. This reflects a 14 per cent28
increase from our asset management business and a decline in central
Amount $2.8 billion >$4.4 billion
expenses of 11 per cent28, reflecting both lower interest costs and

change % (compound annual rate) Double digit
corporate expenses. IFRS profit after tax for the first half of 2023 was
* The objectives assume exchange rates at December 2022 and economic assumptions made
$947 million (2022: loss of $(1,511) million33 on a constant exchange
by Prudential in calculating the EEV basis supplementary information for the year ended rate basis, loss of $(1,505) million33 on an actual exchange rate basis)
31 December 2022, and are based on regulatory and solvency regimes applicable across the with market movements more muted than in the prior year.
Group at the time the objectives were set. The objectives assume that the existing EEV and
Free Surplus methodology at December 2022 will be applicable over the period. Additional commentary on the performance in the first half of 2023
is included in the operational performance by market section and the
Financial performance for the first half of 2023 financial review below.
New business profit27 from the Group increased 39 per cent28, with
16 of our life markets21 delivering double digit growth28, led by Outlook
Hong Kong. This reflects increased APE sales29 (up 42 per cent28 to We believe a new strategy focused on operational and financial
$3,027 million) partially off-set by interest rate and other economic discipline provides an opportunity to accelerate value creation for
movements reflected under the active basis of our EEV methodology. all our stakeholders and to build a sustainable growth platform,
Excluding these effects new business profit was up 52 per cent28. through targeted investment in structural growth markets across
Asia and Africa.
Our agency channel generated new business profit of $1,002 million
up 74 per cent28 (2022: $575 million28), reflecting an increase in We will deliver this through:
APE sales of 96 per cent28 to $1,507 million (2022: $768 million28) > Enhancing customer experiences to drive growth and
as sales recovered following the border reopening between lifetime value;
Hong Kong and the Chinese Mainland. Reflecting this, our agency
> Upgrading the technology of our distribution forces with

channel contributed 67 per cent of the Group’s new business profit
a focus on improving productivity and activation rates;
(2022: 54 per cent) and 50 per cent of the Group’s APE sales (2022:
36 per cent). Excluding the effects of interest rate and other economic > Seeking to unlock the opportunity in health by disciplined
movements reflected under the active basis of our EEV methodology, implementation of best practices at scale across all our
new business profit from agency business was up 89 per cent28. markets; and
> Driving more consistent performance across each of
New business profit from our bancassurance channel declined to our markets.
$401 million (2022: $449 million28), as a result of lower APE sales
of $1,098 million (2022: $1,125 million28), and adverse economic Consumers in Asia remain resilient despite the challenging
impacts in many markets along with proactive actions taken by environment. While the outlook for Asian markets is mixed, our
our business in the Chinese Mainland, CITIC Prudential Life (CPL). momentum in the first half has continued into the third quarter.
These actions sought to diversify sales in order to achieve both a more This underscores the strength of our multi-market growth engine
balanced product mix and improved margins. Excluding the effects backed by our diversified channel mix, which is key to driving
of interest rate and other economic movements, the bancassurance sustainable value in the long term. Prudential is focused on
new business margin was broadly consistent with the prior year, with delivering this for all our stakeholders: employees, customers,
the positive product mix effects in CPL being offset by product mix shareholders and the communities in which we operate.
in Singapore as the market reacted to increased interest rates.

New business performance by market

The following commentary provides an update on the new business performance for each of the
Group’s segments. Discussion of the financial performance of the Group and its segments, including
adjusted operating profit, is contained separately in the Financial review section of this report.
Chinese Mainland – CITIC Prudential Life (CPL)

Actual exchange rate Constant exchange rate
Half year 2023 Half year 2022 Change Half year 2022 Change
APE sales ($m) 394 507 (22)% 474 (17)%

New business profit ($m) 171 217 (21)% 203 (16)%
New business margin (%) 43 43 – 43 –
Amounts included in the table above represent the Group’s 50 per cent share.
Prudential’s life business in the Chinese Mainland, CPL, is a 50/50 joint Multi-channel distribution
venture with CITIC, a leading Chinese state-owned conglomerate. CPL continues to focus on building a professional, high-quality
CPL was our second largest contributor to the Group’s APE sales in agency force, with a strong understanding of our health, protection
the first half of 2023 which were delivered through a balanced mix and retirement planning products. Following the removal of Covid-19
of agency and bancassurance sales. CPL saw APE sales29 decrease restrictions, APE sales through the agency channel grew 25 per cent28
by (17) per cent28 to $394 million largely driven by lower volumes compared with the same period in 2022. A significant improvement
sold through the bancassurance channel partly offset by double digit in agent productivity was achieved with the APE sales per active
APE sales growth in the agency channel and higher overall health agent24 increased by more than 50 per cent28. CPL had over 800
and protection APE sales compared with the same period in 2022. agents with production levels that qualify for the Million Dollar Round
Table (MDRT) in the first half of 2023.
The new business profit27 for CPL declined (16) per cent28 in the first
half of 2023, compared with the same period in 2022. This was driven CPL’s bancassurance APE sales were impacted by our proactive
by lower sales volumes and adverse economics. Excluding the effects actions to diversify in order to achieve both a more balanced product
of interest rate and other economic movements new business margin mix and improved margins. While we saw an increasing level of
improved by seven percentage points, compared with remaining flat demand from the market for high interest-rate guarantee products,
after the effects of economics. CPL has chosen to rebalance its sales between whole-life products
and higher margin annuity and longer-premium payment term
Delivering customer-led solutions
products. This rebalancing is expected to contribute to both
During the first half of 2023, CPL continued to develop customised increased new business margin and better alignment with the
products addressing customers’ needs at different life stages. retirement regime promoted by the national agenda. CPL further
Whole life protection products were specifically developed to meet continues to build its bancassurance distribution network, adding
the needs of customers and sales doubled versus last year. CPL have six new bancassurance partners over the past 12 months, and the
expanded the retirement and planning concierge village network number of bank branches increasing by more than 7 per cent to over
to cover 22 institutions in seven cities. 6,600 branches across the Chinese Mainland.
Hong Kong
APE sales ($m) 1,027 227 352% 227 352%

New business profit ($m) 670 211 218% 211 218%
New business margin (%) 65 93 (28)ppts 93 (28)ppts
Our business in Hong Kong increased APE sales29 more than four 54 per cent of APE sales in the period36. This performance is indicative
times28 to $1,027 million in the first half of 2023, with growth across of the continued demand and value of Hong Kong life products for
all distribution channels, following the re-opening of the border with Chinese Mainland customers, providing them access to international
the Chinese Mainland and subsequent increase in cross-border traffic. investment opportunities with diversification in terms of currency
We also saw strong growth of 68 per cent28 in our domestic segment and asset class, and access to sophisticated healthcare products.
supported by new product launches and customer campaigns. Our strong multi-channel distribution capabilities have meant
We significantly outperformed the market and increased our market that we are well-positioned to capture the full breadth of customer
share, based on latest available market information31. As a result, demand following the re-opening of the border between Hong Kong
we ranked number one in the offshore business and number one in and the Chinese Mainland.
the agency channel31. New customer acquisitions accounted for some

New business profit27 more than tripled28 to $670 million, largely Multi-channel distribution
driven by the increase in APE sales and a favourable shift in channel Our agency APE sales increased by more than six times28 in the first
mix given the strong growth in agency. This was partly offset by a half of 2023 from the low levels seen in 2022, contributing more than
shift in product mix with a higher proportion of savings products from 72 per cent of APE sales in the first half of 2023. APE sales to both
the Mainland Chinese business and the impact of higher interest Chinese mainland and domestic customers grew substantially in the
rates under the active basis we adopt for our EEV methodology. period. Agency APE sales for domestic customers more than doubled
Excluding the effects of interest rate and other economic movements in the first half of 2023 while business levels for customers from the
new business margin would have been 10 percentage points higher. Chinese mainland recovered to pre-Covid-19 levels during the second
quarter. We recruited nearly 1,200 agents in the first half of 2023
Delivering customer-led solutions and are on track to recruit 4,000 agents by end of 2023. Our active
Our business continues to develop its health and protection business. agents24 increased by 75 per cent with an improvement in agent
In the first half of 2023, we launched a new comprehensive multiple productivity (measured by APE per active agent) by 2.8 times. We are
critical illness product which addresses customers family protection

the leader in the agency channel with a 33 per cent market share based
needs at different life stages. Our multi-currency savings product on the latest available market statistics at the end of the first quarter.
launched in 2022 has attracted strong demand from both the
domestic and Chinese Mainland customers in the first half of 2023. We are a leading major insurer in the bancassurance channel,
Customer segmentation has increased our ability to identify and excluding bank owned operations, and achieved a substantial growth
address specific customer needs, including across the family segment, in both APE sales and new business profit through the bancassurance
the golden-age segment – with peace-of-mind retirement solutions channel during the first half of 2023, underpinned by initiatives to
– and the young adult segment. Cutting across these segments we deepen customer penetration. Our broker channel also delivered
also enhanced our wealth solutions for high-net-worth customers by significant growth in APE sales following the reactivation of our broker
prioritising service, flexibility and liquidity and saw these customers network and return of Chinese Mainland business.
generating around 70 per cent of Hong Kong’s new business profit.
We recently opened our Macau branch, further strengthening our
footprint in the Greater Bay Area, a region with a population of
over 85 million11.
Indonesia

APE sales ($m) 150 110 36% 106 42%

APE sales29 for our business in Indonesia grew by 42 per cent28 benefits including the introduction of telehealth benefits and
to $150 million in the first half of 2023, supported by double-digit28 traditional medicine treatments which were well received by
growth across both agency and bancassurance channels. our customers.
Product innovations helped deliver growth, with APE sales for health
and protection business increasing by 44 per cent28, and growth Multi-channel distribution
in unit-linked APE sales of 37 per cent28. Growth in health and As part of our transformation programme initiated in 2022,
protection APE sales were assisted by repricing actions and medical we accelerated agency channel growth by revamping our sales
riders upgrades. management model, upgrading our training programme, and
redesigning our compensation scheme to incentivise quality
Overall new business profit27 grew by 22 per cent28 to $61 million, sales and productivity growth. These initiatives contributed to a
supported by strong growth in APE sales, offset in part by the impact 51 per cent28 increase in agency APE sales alongside a significant
of the medical rider upgrades which resulted in lower margins. improvement in agency productivity.
Delivering customer-led solutions In the bancassurance channel, we delivered APE sales growth
Our customer-first approach in designing and delivering solutions of 15 per cent28 in the first half of 2023. Sales momentum
contributed to double-digit28 growth in APE sales for our unit-linked was particularly pronounced in higher income customer tiers.
product compared with a decline in the market for this product New business profit from the bancassurance channel increased by
segment. We have revamped our unit-linked product propositions 14 per cent28, reflecting greater APE sales volume including from
with enhanced benefits along with an upgrade to our sales and Privilege Banking customers. Over the longer term we see significant
operational processes in response to new regulations governing the opportunities for growth in all customer segments given low
design, sale, and management of unit-linked products (commonly insurance penetration in the broader market, our existing
known as PAYDI in the market). Further, we upgraded our flagship partnerships and the added potential for new partnerships.
medical reimbursement riders with increased limits and enhanced

Malaysia
APE sales ($m) 185 172 8% 165 12%

Overall APE sales29 increased by 12 per cent28 to $185 million in the We also launched a new marketplace with more than 1,000
first half of 2023, as sales momentum in our life businesses improved healthcare services from our notable healthcare service providers
during the period. in over 200 locations nationwide, from medical check-up, diagnostic
test, vaccination, and even a subscription programme to improve
New business profit27 increased by 11 per cent28, supported by customer health and promote healthy habits.
the growth in APE sales and a favourable product mix, with a slight
margin dilution reflecting a greater proportion of sales coming Multi-channel distribution
from bancassurance. We continued to drive sustainable growth of our agency through
quality recruits, new agent activations, intensive training, leadership
Delivering customer-led solutions development and digital enhancement. We have a structured
We continue to develop new and innovative products to address programme of support and training for agents and leaders at each
the evolving needs of our customers. For instance, we strengthened stage of their careers. We also focus on training our agents to provide
our health and protection offerings within the Takaful segment, quality advice to our customers. Following these initiatives, our
by introducing a medical solution (PruBSN Damai) that provides agency channel has delivered double-digit28 new business profit
coverages for mental illnesses, preventative care, and treatments growth in the first half of 2023 compared to the same period last
based on advance medical technologies. We also enhanced our year, despite a marginal decrease in APE sales.
unit-linked offerings by launching a Syariah compliant socially
responsible fund (Takafulink Dana ESG Global). Our bancassurance channel delivered strong growth in the first half of
2023 as we continued to collaborate with our bank partners, including
For our mature affluent customers looking for a strong savings Standard Chartered, UOB and BSN, to strengthen our distribution
proposition to either maximise potential returns or offer diversification platforms and offer product solutions to each bank partner’s customer
through a diverse range of local and global funds, we launched an segments. Product launches for bancassurance included a hassle-free
investment-linked savings product (PruElite Plus). For our young protection solution for Citibank customers covering 15 types of
family segment, we launched a pre-natal care plan (PruMY Child Plus) infectious diseases and new credit shield solution that enabled a
for parents who are seeking protection for both mother and infant successful transition of more than 90,000 credit card customers.
at one of most important life stages for the family. The product’s We are well positioned to capture the opportunities from the merger
innovative features include early protection for pregnancy from 13 of UOB and Citibank’s consumer business in Malaysia, which has
weeks onwards, coverage for pregnancy complications, all structural provided potential access to an incremental 600,000 customers.
congenital conditions (first in the market), emergency c-section for
early delivery (first in the market) and child development disorders.
Singapore
APE sales ($m) 386 390 (1)% 398 (3)%

New business profit ($m) 198 244 (19)% 249 (20)%
Overall APE sales29 for our business in Singapore declined by Delivering customer-led solutions
(3) per cent28 to $386 million, with higher interest rates providing a In 2023, we continue to drive our segment-led customer strategy
challenging operating environment especially in the first part of the in each of the high-net-worth, affluent, mass-market and enterprise
period. Sales of single premium participating products through the segments. We enhanced our product offerings in the first half
bancassurance channel were particularly affected by movements in of 2023 to meet the health and wealth needs of our customers.
interest rates in the period, compared with an elevated level of sales We rolled out a suite of product offerings and professional advice
in the comparative period. APE sales from health and protection through our network of financial consultants, financial advisers and
products grew by 11 per cent28 in the first half of 2023 compared our bank partners.
with the first half of 2022.
Within the affluent segment, we relaunched our flagship wealth
New business profit27 declined by (20) per cent28 to $198 million, accumulation products taking into account the voice of customers
reflecting the lower mix of higher margin single premium and improving its overall competitiveness. For younger mass market
participating products, alongside lower APE sales and adverse segments, we are offering affordable plans that guarantees stable
economics. We saw an improvement in product mix in the second income should customers be affected by disability. Our enterprise
quarter as compared with the first, with a higher proportion of benefit business also delivered good growth with APE sales increasing
individual health and protection business. This had a beneficial by 17 per cent28, covering around 3,000 small-to-medium enterprises
impact on margins in the second quarter, a trend which continued and over 200,000 employees.
into July.

We continue to improve our customer experience, leveraging digital Bancassurance APE sales declined by (10) per cent28 in the first half of
and technology in our day-to-day operations. Over 75 per cent of 2023. Increases in interest rates significantly reduced single premium
policies went through instant underwriting engines, which improve participating business, which accounted for a large proportion of
productivity and turnaround time. We have eGIRO in place with sales in the first half of 2022. We have re-activated the sales of
all banks; this allows customers to set up a direct debit to pay their investment-linked plans, which now make up over 23 per cent of
premiums within minutes. The quality of our customer service is APE sales for the channel. We further widened our regular premium
reflected by a high customer retention ratio of over 95 per cent investment-linked proposition and witnessed strong response for our
and improvement in net promoter score across purchasing, servicing new product offerings, improving the resilience of the business and
and claims touchpoints. providing flexibility to our customers over the long term.
Multi-channel distribution Demonstrating the benefit of our multi-channel distribution
APE sales for the agency channel increased by 2 per cent28 in the capabilities and balanced product mix, APE sales from regular
first half of 2023 compared with the same period last year. Sales premium product grew by 49 per cent28 and contributed over

momentum has accelerated in the period, with APE sales in the 86 per cent of APE sales in the first half of 2023.
second quarter being 7 per cent28 higher than the first. Individual
health and protection APE sales grew 24 per cent28 in the second We also entered the fast-growing Financial Adviser (FA) channel
quarter of 2023 compared with the first quarter, demonstrating in April, with over 100 FAs in place. Prudential Financial Adviser
our agents’ continued focus on medical reimbursement and critical is the first financial advisory firm in the Group, and its official start
illness products. of operations marks an important milestone for our business.
Prudential Financial Adviser will offer a wide range of products
and services including general insurance and wealth solutions,
in addition to Prudential’s core solutions.
Growth markets and other

APE sales ($m) 885 807 10% 762 16%


The Growth markets and other segment includes our businesses in Thailand
India, Thailand, Vietnam, the Philippines, Taiwan, Cambodia, Laos, In Thailand, our APE sales grew by 20 per cent28 in the first half
Myanmar, and Africa. Our APE sales29 increased by 16 per cent28 of 2023, reflecting double-digit28 growth in bancassurance through
to $885 million in the first half of 2023, with strong double-digit our partnerships with TTB and UOB, and a substantial increase in
growth28 in India, Thailand, the Philippines, Taiwan and Africa offset the contribution from employee benefit (EB) solutions. We continue
in part by a decline in the APE sales for Vietnam. New business profit27 to be one of the top three life insurance companies operating in the
was up 9 per cent28 to $316 million, largely reflecting the increase bancassurance channel37. New business profit increased driven by
in APE sales, offset in part by a shift in country mix due to lower sales higher APE sales, while the new business margin declined due to lower
in Vietnam. interest rates in Thailand and growth in lower-margin EB business.
India The integration of Citibank’s operations with UOB supported a
Our business in India, ICICI Prudential Life, is an associate in which 14 per cent28 increase in APE sales for the bancassurance channel
we hold 22 per cent voting rights. ICICI Prudential Life is listed on in the first half of 2023. Our EB solutions also experienced significant
the National Stock Exchange (NSE) and the Bombay Stock Exchange growth, adding over 75,000 new lives assured over the period.
(BSE). APE sales for India grew by 15 per cent28, with a well-diversified
distribution network enabling the company to reach a wider We continue to refresh our customer propositions to address the
cross-section of customers to drive growth. New business profit grew evolving health, wealth and protection needs of the Thai population.
in the first six months of 2023 compared with the same period in the Our innovative new health propositions, including family cover,
prior year, reflecting APE sales growth and an improvement in new have been well received by customers. An ongoing focus on excellent
customer experience through digital transformation of our on
business margin.
boarding, servicing and claims processes has lifted our already
ICICI Prudential Life has continued to grow its distribution channels market-leading net promoter score higher.
by recruiting over 17,000 new agents in the first half of 2023. Further,
ICICI Prudential Life entered into over 100 new partnerships during Vietnam
the period, with the total number of partnerships reaching more than The overall life insurance sector was significantly impacted by a fall
990 including 39 banks. in consumer confidence and this resulted in the industry reporting
a (31) per cent sales decline in the first half of 2023. However, our
ICICI Prudential Life has a comprehensive product suite to address business in Vietnam outperformed the market with a (18) per cent28
varied customer needs through different life stages. In the first half of decline in APE sales in the first half of 2023. The decline in APE sales
2023, ICICI Prudential Life launched an innovative long-term savings from the bancassurance channel was partially offset by strong
product (ICICI Pru Gold) designed to enable customers to meet their growth in our agency business with an improvement in agent
diverse income requirements, and a first of its kind debt fund in the productivity. Agents that are qualifying for the MDRT have more
life insurance market (ICICI Pru Constant Maturity Fund) in view of than tripled in the first half of 2023. New business profit declined,
the prevailing interest rates trend. reflecting lower APE sales, offset in part by an improvement in
new business margin from a more favourable channel mix and
economic conditions.

In Vietnam, around 83 per cent of our new business policies are An innovative comprehensive participating product, with protection
processed by smart underwriting engines, providing our customers a benefits or long-term care benefits was introduced to meet diversified
quick and seamless onboarding journey, while three out of four claims needs of customers, especially the young working population.
were processed with the assistance of automated solutions to reduce In addition to a whole suite of customer-centric products, we also
waiting time. launched a new value-added service covering eye-care and medical
transportation service for elderly customers.
We extended our exclusive bancassurance partnership with Vietnam
International Bank until 2036, developing new industry-leading Africa
quality standards and contributing to the healthy and sustainable Despite higher inflation leading to macro-economic uncertainties,
development of bancassurance in Vietnam. APE sales for Africa grew by 31 per cent28 in the first half of 2023,
reflecting a strong performance across all distribution channels
The Philippines with all eight markets achieving double-digit28 growth in APE sales5.
In the Philippines, overall APE sales grew by 13 per cent28 in the first In Africa, Prudential has an established agency force and saw an
half of 2023, driven by growth in our agency channel. We continue to 18 per cent increase in the number of active agents since the
grow our agency channel in the Philippines with a 32 per cent growth equivalent period in the prior year. In addition, Prudential Africa
in new recruits in the first half of 2023. New business profit increased, has access to over 1,000 bank branches, digital, telecommunication
largely reflecting growth in APE sales. and intermediary partnerships. Our ongoing investment in digital
Taiwan innovation and robust systems to digitise processes will allow us to
In Taiwan, APE sales grew 28 per cent28 in the first half of 2023, grow at scale and provide seamless experience to better service our
reflecting growth across both bancassurance and broker channels. customer needs. Our businesses in Kenya, Zambia, and Nigeria all
We have outperformed the market which reported a contraction of launched digital self-service portals to assist in improving customer
(1.3) per cent in the first half of 2023. New business profit increased, service. Improved product mix, alongside the growth in APE sales,
supported by an increase in APE sales, offset in part by a lower led to an increase in new business profit.
proportion of health and protection sales.
Eastspring
Actual exchange rate Constant exchange rate Actual exchange rate
Half year 2023 Half year 2022 Change Half year 2022 Change Full year 2022 Change
Total funds under management

or advice ($bn) 227.7 222.3 2% 222.7 2% 221.4 3%
Adjusted operating profit ($m) 146 131 11% 128 14% 260 n/a
Fee margin based on operating
income (bps) 31bps 28bps 3bps 27bps 4bps 29bps 2bps
Cost/income ratio (%) 53% 55% (2)ppts 56% (3)ppts 55% (2)ppts
IFRS profit after tax ($m) 132 117 13% 114 16% 234 n/a
Eastspring has a presence in 11 Asian markets as well as distribution managed on behalf of M&G plc. A further fund transfer out of
offices in North America and Europe. We are a top-10 asset manager Eastspring by M&G plc of $1.1 billion is anticipated in the second
in six of these markets managing or advising $227.7 billion in assets. half of the year.
The firm is well placed to address the saving and investment needs
of customers across the region through a team of 300 investment Leveraging our integrated investment platform and rigorous
professionals with local market expertise. investment framework, Eastspring’s longer-term investment
performance has improved significantly, with 59 per cent of
Eastspring’s total funds under management and advice funds under management outperforming their benchmarks32
(referred collectively as funds under management below) increased on a three-year basis (June 2022: 41 per cent, December 2022:
by 3 per cent30 to $227.7 billion at 30 June 2023 (31 December 2022: 39 per cent). This reflects the strong relative and absolute returns
$221.4 billion on an actual exchange rate basis), reflecting favourable generated by the suite of strategies managed by in-country teams
net flows from external clients (excluding M&G plc) and our life and equity strategies managed by our regional team in Singapore.
insurance business as well as positive market movements. The overall On a one-year basis 35 per cent of funds under management
asset mix has remained stable and diversified across both clients and outperformed their benchmarks32 (June 2022: 58 per cent,
asset classes. December 2022: 59 per cent), with this measure impacted by the
relative performance of some of our larger multi-asset portfolio
With favourable market conditions at the start of the year, client solutions. The absolute returns achieved by our multi-asset portfolio
interest and sales momentum were positive. The overall net inflows solutions remained positive, and we have observed improved
from third parties (excluding money market funds and funds performance, in both relative and absolute terms, on a year-to-date
managed on behalf of M&G plc) were $1.9 billion during the first basis as new measures to enhance performance in a sustainable
half of 2023. Further, there was a net inflow of $1.4 billion from our manner take effect.
life insurance business. However, this was more than offset by net
outflows of $(7.1) billion following the redemption of the funds

Notes
1 Source: Swiss Re forecast (July 2023). 24 Active agents as of 30 June 2023 and represents agents who have at least sold
2 Source: Kantar survey. one new policy.
3 As reported at full year 2022 unless specified. Sources include formal (e.g. competitors 25 Source: Credit Suisse – Global Wealth Report 2022
results release, local regulators and insurance association) and informal (industry 26 Our investment portfolio includes both listed equities and corporate bonds, where the
exchange) market share. Ranking based on new business (APE sales, weighted full year assets are managed on our main portfolio management system and emissions data is
premium or full year premium depending on availability of data) or total weighted available from our external data provider. Other asset classes were excluded from the
revenue premiums, except for Hong Kong based on in-force premiums. Ranking for calculation in absence of data or industry standard. This also excludes assets held by
FY2020 for Cameroon. joint venture and associate businesses, and assets in unit-linked funds as we do not
4 A life customer is defined as an individual or entity who holds one or more policies with have full authority to change the investment strategies of these. The full scope and
a Prudential life insurance entity, including 100 per cent of customers of the Group’s basis can be found at https://www.prudentialplc.com/~/media/Files/P/Prudential-V13/
joint ventures and associate. Group business is a single customer for the purpose of esg-report/assurance-statement-2022.pdf
this definition. 27 New business profit, on a post-tax basis, on business sold in the period, calculated
5 Source: United Nations, Department of Economic and Social Affairs, Population Division, in accordance with EEV Principles.
World Population Prospects 2022. 28 On a constant exchange rate basis

6 Source: Brookings Institution: The unprecedented expansion of the global middle 29 APE sales is a measure of new business activity that comprises the aggregate of
class (2017). annualised regular premiums and one-tenth of single premiums on new business written
7 Source: Swiss Re No 3/2023: World insurance: stirred, and not shaken – Insurance during the year for all insurance products. See note II of the Additional unaudited
as percentage of GDP. financial information for further explanation.
8 World Health Organisation. Out of pocket as % of Total Health Expenditure. 30 On an actual exchange rate basis
Asia calculated as the average of the out-of-pocket percentages. 31 Source: HKIA Q1 2023 market statistics
9 Ranking among foreign insurers. Source: CBIRC and company disclosures as at FY22. 32 The value of assets under management at 30 June 2023 in funds which outperform
10 Across Hong Kong, Macau and the Chinese Mainland their performance benchmark as a percentage of total assets under management
11 Source: The Guangdong-Hong Kong-Macao Greater Bay Area Development Office at 30 June 2023, excluding assets in funds with no performance benchmark.
12 Source: Taiwan Life Insurance Association FY22 33 Comparatives for 2022 have been restated to reflect the retrospective application
13 Source: Economist Intelligence Unit 2023 of IFRS 17. See note A2.1 to the financial statements for further information
14 Source: Life Insurance Association of Singapore (LIA). Q1 2023 and reconciliation.
15 Source: Life Insurance Association of Malaysia for conventional business and Insurance 34 Operating free surplus generated from in-force insurance business represents amounts
Services Malaysia (ISM) for Takaful business. Q1 2023 emerging from the in-force business during the year before deducting amounts reinvested
16 Source: AAJI Q1 2023 in writing new business and excludes non-operating items. For asset management
17 Source: Philippines Insurance Commission. Q1 23 businesses, it equates to post-tax operating profit for the year. Restructuring costs are
18 Source: Vietnam Actuarial Network data sharing. Q1 23 presented separately from the business unit amount. Further information is set out in
19 Source: Insurance Association of Cambodia (IAC). Q1 23 ‘movement in Group free surplus’ of the EEV basis results.
20 Gross written premiums for 2021 (sourced from Axco Insurance Report) 35 Excluding funds managed on behalf of M&G plc
21 Of our 14 Asia life markets and 8 Africa life markets 36 Individual business only
22 Source: Swiss Re: The Health protection gap in Asia (2018) 37 Source: Thailand Life Assurance Association Q2 2023
23 FY22 Excluding India, Africa, Myanmar and Laos 38 As at FY2022


Financial review
During the first half of 2023, we

delivered growth across many of our
key value measures, with broad-based
growth in new business profit2 driving
higher EEV operating profit and EEV.

During the first half of 2023, we delivered growth across many of our Group IFRS adjusted operating profit8 was $1,462 million, up
key value measures, with broad-based growth in new business profit2 6 per cent4 in the first half of 2023, largely as a result of lower central
driving higher EEV operating profit and EEV. Within IFRS, adjusted costs and higher profits from Eastspring, our asset management
shareholders’ equity3 also increased reflecting the profit for the period business. The Group’s total IFRS profit after tax for the period was
and a higher contractual service margin (CSM). The first half of 2023 $947 million, an improvement on the 2022 loss after tax of
saw a reduction in the macroeconomic volatility with small reductions $(1,511) million on a constant exchange rate basis ($(1,505) million
in government bond yields in many of our Asian markets and with the on an actual exchange rate basis) which largely reflected significant
US 10-year yield falling by 8 basis points to 3.81 per cent. A mixed negative short-term fluctuations from higher interest rates in the first
performance was seen in respect of equity index levels, with the half of 2022. This compared with a relatively smaller decrease in
S&P 500 index increasing by 16 per cent and the MSCI Asia excluding interest rates in 2023. Adjusted shareholders’ equity increased to
Japan equity index by 2 per cent, while the Hang Seng index fell by $36.4 billion (31 December 2022: $35.2 billion6) driven by an increase
4 per cent. Overall 2023 market movements had a relatively muted in IFRS shareholders’ equity (up 3 per cent6) and an increase in the

impact on EEV and adjusted shareholders’ equity3, when compared Contractual Service Margin (CSM) (up 4 per cent6). The CSM
with 2022. benefited from both positive economic and other effects as well as
the contribution from new business and unwind. Using a longer-term
As in previous years, we comment on our performance in local normalised return for Variable Fee Approach (VFA) business, the
currency terms (expressed on a constant exchange rate basis) unwind and new business contribution would have exceeded the
to show the underlying business trends in periods of currency release in the period.
movement, unless otherwise noted.
Our Group’s regulatory capital position, free surplus and central
The removal of all Covid-related restrictions, in particular the liquidity positions remain robust. The Group’s leverage remains
reopening of the border between Hong Kong and the Chinese near the bottom of our target range at 20 per cent, estimated on
Mainland and the rebound of APE sales1, led to new business profit a Moody’s basis9. As a result, supported by a clear and disciplined
increasing 39 per cent4 to $1,489 million. This was underpinned capital allocation policy, the Group is well positioned, with
by a 42 per cent4 growth in APE sales in the first half of 2023, considerable financial flexibility including leverage capacity,
which in absolute terms, exceeded the pre-pandemic levels of 2019. to take advantage of the growth opportunities ahead.
Excluding the effects of interest rates and other economic changes,
given our active EEV reporting basis, new business profit increased The Group capital adequacy requirements are aligned with the
by 52 per cent4. established EEV and free surplus framework by comparing the total
eligible Group capital resources with the Group’s Prescribed Capital
Group EEV operating profit increased by 22 per cent4 to $2,155 million, Requirement (GPCR). At 30 June 2023, the estimated shareholder
largely due to higher new business profits from insurance business, surplus above the GPCR was $15.5 billion10 (31 December 2022:
an increase in the profit from Eastspring, our asset management

$15.6 billion6) and cover ratio 295 per cent11 (31 December 2022:
business, and a reduction in central costs. The operating return on 307 per cent before allowing for the debt redemption in
embedded value5 was 10 per cent compared with 8 per cent in the January 2023).
first half of 2022. After allowing for the payment of the external
dividend and economic effects, such as changes in interest rates, and Our capital priorities have been set out alongside our new strategy.
currency movements, the Group’s embedded value at 30 June 2023 These confirm the focus on managing the in-force portfolio to
was $43.7 billion (31 December 2022: $42.2 billion6), equivalent to support investment in quality new business as well as investing in
1,588 cents per share (31 December 2022: 1,534 cents per share6). core capabilities. We expect to invest around $1 billion in enhancing
The operating free surplus generated from in-force insurance and our core capabilities across our three strategic pillars of Customer,
asset management business7 during the period was $1,438 million, Distribution and Health. This investment will be mostly weighted
down (2) per cent4. Higher investment in new business of between 2023 and 2025. We have maintained our dividend policy,
$(414) million (2022: $(268) million4) from higher APE sales and as described later in this report, and in line with that policy the
business mix effects, led to total operating free surplus generated directors have approved a dividend of 6.26 cents per share (2022:
from life and asset management business7 reducing to $1,024 million 5.74 cents per share6). Recognising the strong conviction we have in
(2022: $1,200 million4). the Group’s revised strategy, when determining the annual dividend
we intend to look through the investments in new business and
The Group implemented IFRS 17, the new accounting standard for investments in capabilities and expect the annual dividend to grow
insurance contracts in the first half of 2023 with comparatives in the range 7 – 9 per cent per annum over 2023 and 2024.
restated accordingly. In line with the preliminary guidance provided
with the group’s 2022 results, the Group shareholders’ equity at We believe that the Group’s performance in the first half of the year
1 January 2022, the date of transition, increased by $1.8 billion to positions us well, as we implement the new strategy, to meet our
$18.9 billion and 2022 full year adjusted operating profit8 fell by financial objectives to grow new business profit and consequently
$653 million to $2,722 million. The full year 2022 saw a loss after tax in-force insurance and asset management operating free surplus
of $(997) million on an IFRS 17 basis. While IFRS 17 is an important generated, as detailed in the strategic and operating review.
accounting change, resulting in changes to the timing of profit
recognition compared with the previous IFRS 4 approach, it does
not change the total level of profit generated. As a result, it does
not change the economics of our business. Our embedded value
framework, which is linked to the Group’s regulatory position and
consequently future capital generation, is in our view more
representative of shareholder value. The Group also implemented
IFRS 9 Financial Instruments from 1 January 2023, with no
material impact on the Group’s financial statements. Further details
on the transition to IFRS 17 and IFRS 9 are included in the IFRS
financial results.

Financial review / continued
IFRS profit
Actual
Actual exchange rate Constant exchange rate exchange rate
Half year Half year Half year Full year

2023 2022 Change 2022 Change 2022
$m $m % $m % $m
Adjusted operating profit based on longer-term investment

returns before tax
CPL 164 132 24 124 32 271
Hong Kong 554 598 (7) 597 (7) 1,162
Indonesia 109 118 (8) 113 (4) 205
Malaysia 165 193 (15) 184 (10) 340
Singapore 270 313 (14) 320 (16) 570
Growth markets and other 374 337 11 323 16 728
Insurance business 1,636 1,691 (3) 1,661 (2) 3,276
Asset management 146 131 11 128 14 260
Total segment profit 1,782 1,822 (2) 1,789 – 3,536
Other income and expenditure:
Net investment income and other items (28) (4) n/a (4) n/a (44)
Interest payable on core structural borrowings (85) (103) 17 (103) 17 (200)
Corporate expenditure (115) (150) 23 (150) 23 (276)
Total other income and expenditure (228) (257) 11 (257) 11 (520)
Restructuring and IFRS 17 implementation costs (92) (154) 40 (152) 39 (294)
Adjusted operating profit 1,462 1,411 4 1,380 6 2,722
Short-term fluctuations in investment returns (287) (2,820) 90 (2,806) 90 (3,420)
Gains attaching to corporate transactions – 62 n/a 62 n/a 55
Profit (loss) before tax attributable to shareholders 1,175 (1,347) n/a (1,364) n/a (643)
Tax charge attributable to shareholders’ returns (228) (158) (44) (147) (55) (354)
Profit (loss) for the period 947 (1,505) n/a (1,511) n/a (997)
IFRS earnings per share
Actual

2023 2022 Change 2022 Change 2022
cents cents % cents % cents
Based on adjusted operating profit,

net of tax and non-controlling interest 45.2 40.6 11 39.9 13 79.4
Based on profit (loss) for the period,
net of non-controlling interest 34.5 (55.1) n/a (55.4) n/a (36.8)
Adjusted operating profit8 reflects that the assets and liabilities Our business in the Chinese Mainland, CPL, delivered 32 per cent4
of our insurance businesses are held for the longer term and the growth in adjusted operating profit to $164 million, primarily driven
Group’s belief that the trends in underlying performance are better by an increase in longer-term net investment result, as it has a higher
understood if the effects of short-term fluctuations in market investment base following increased sales of savings products in
conditions, such as changes in interest rates or equity markets, recent periods. There was also a benefit from improved claims
are excluded. experience in the period. During the first half of the year CPL has
taken actions to diversify its sales in order to achieve a more balanced
Group IFRS adjusted operating profit was $1,462 million, up by product mix, with a higher proportion of annuity and longer premium
6 per cent4 largely reflecting a 14 per cent increase in profit generated payment term products.
by Eastspring, our asset management business and lower central
costs. Adjusted operating profit for insurance business was marginally In Hong Kong, adjusted operating profit was $554 million, down
lower (down (2) per cent4) with economic movements in 2022 (7) per cent4. A higher release of CSM, aided by increased new
reducing the level of longer-term net investment result (which is business sales, was more than offset by both a reduction in favourable
based on opening asset values) and experience variances being claims experience in HY23, as all Covid restrictions were removed,
higher than in the prior year as discussed further below. and a reduced net investment return, reflecting a lower opening asset
balance following adverse market movements in 2022.

In Indonesia, adjusted operating profit was (4) per cent4 lower In Singapore, adjusted operating profit decreased by (16) per cent4
at $109 million, reflecting unfavourable morbidity experience on to $270 million, reflecting the impact of adverse market movements
medical reimbursement products following the removal of Covid-19 in 2022 which suppressed both the opening CSM and investments
restrictions and a reduction in the release of CSM reflecting the balances, resulting in a lower CSM release and a reduced net
maturity of the business given lower sales levels in prior periods. investment return. The business saw increased expenses as it
continued to invest in distribution capabilities and technology.
In Malaysia adjusted operating profit declined by (10) per cent4 to
$165 million, primarily driven by a normalisation of claims experience The businesses comprising our Growth markets and other segment
as the number of medical reimbursement cases returned to generated adjusted operating profit of $374 million, up 16 per cent4.
pre-pandemic levels. This reflects an increase in the CSM release aided by new business
growth and recent product mix changes and the effect of a one off
sales tax provision established in HY22. These effects are partially
offset by higher adverse experience variances as we continue to

invest in distribution and other capabilities.
Insurance business analysis of operating profit drivers

The table below sets out the key drivers of the Group’s adjusted operating profit for the insurance business as described in note B1.3 of the IFRS
financial results.
Actual

2023 2022 Change 2022 Change 2022
$m $m % $m % $m
Adjusted Release of CSM15 1,178 1,212 (3) 1,189 (1) 2,265

Release of risk adjustment 107 98 9 96 11 179
Experience variances (92) (19) n/a (13) n/a (66)
Other insurance service result (85) (134) 37 (128) 34 (204)
Adjusted insurance service result 1,108 1,157 (4) 1,144 (3) 2,174
Net investment result on long-term basis 612 653 (6) 632 (3) 1,290

Other insurance income and expenditure (45) (83) 46 (80) 44 (98)
Share of related tax charges from joint ventures and associates (39) (36) (8) (35) (11) (90)
Insurance business (adjusted operating profit) 1,636 1,691 (3) 1,661 (2) 3,276
The release of CSM is the principal source of our IFRS 17 insurance The other insurance service result of $(85) million (2022:
business adjusted operating profit. The adjusted CSM release15 $(128) million4) reflects losses on contracts that are described under
in HY23 of $1,178 million (2022: $1,189 million4) equates to an IFRS 17 as ‘onerous’, either at inception or because changes in the
annualised release rate of circa 11 per cent, broadly similar to the period result in the CSM being exhausted. It does not mean these
circa 10 per cent release rate seen in 2022 and consistent with contracts are not profitable overall as the CSM does not allow for
the 2023 release expected as at the end of FY22. As we grow real world returns, which are earned over time.
new business profit, in line with our recently announced objective,
we would expect this to compound the growth of the CSM and The net investment result of $612 million (2022: $632 million4) largely
hence lead to adjusted operating profit growth over time. reflects the long-term return on assets backing equity and capital and
long-term spreads on business not accounted for under the variable
The release of the risk adjustment of $107 million (2022: $96 million4) fee approach. The long-term rates are applied to the opening value
represents the expiry of non-market risk in the period. As expected, of assets and so falls in asset values over 2022 saw this income
this release is a relatively stable proportion of the opening balance reduce in the first half of 2023. This effect was moderated by growth
as compared with the corresponding rate in the prior year. in the General Measurement Model asset base from new business
in recent periods and renewal premiums.
Experience variances of $(92) million (2022: $(13) million4) comprise
largely of claims and expense variances (those impacting past or Other income and expenditure of $(45) million (2022: $(80) million4)
current service rather than future service which is reflected in CSM). mainly relates to expenses that are not directly related to an
Claims variances reflect unfavourable morbidity experience on insurance contract as defined under IFRS 17. In the first half of 2022
some medical reimbursement products following the removal of these expenses included a charge for the establishment of a sales
Covid-19 restrictions. Expenses variances reflect higher spend to tax provision that has not been repeated in the current period.
support our continued investment in enhancing our multi-channel
distribution capabilities and in embedding technology to enhance
the customer experience.

Movement in Contractual Service Margin In a normalised market environment, if the contribution from new
The CSM balance represents a discounted stock of unearned profit business and the unwind of the CSM balance is greater than the rate
which will be released over time as services are provided. This balance at which services are provided, then the CSM balance will increase.
increases due to additions from profitable new business contracts The new business added to the CSM will therefore be an important
sold in the period and the unwind of the in-force book. It is also factor in building the CSM and we expect the compounding effect
updated for any changes in expected future profitability, where from the new business added to the CSM over time to support
applicable, including the effect of short-term market fluctuations for growth in IFRS 17 adjusted operating profit in the future. The recently
business measured using variable fee approach. The release of the announced objectives for EEV new business profit growth will act to
CSM, which is the main driver of adjusted operating profit, is then support such CSM growth.
calculated after allowing for these movements.
The table below sets out the movement of CSM over the period.
Contractual Service Margin – Net of Reinsurance
Half year
2023
$m
Net opening balance at 1 Jan 19,989

New contracts in the period 1,196
Unwind* 760
Balance before variances, effect of foreign exchange and CSM release 21,945
Economic and other variances 289
CSM balance before release 22,234
Release of CSM to income statement (1,177)
Effect of movements in exchange rates (237)
Net balance at the end of period 20,820
* The unwind of CSM presented in this table reflects the accretion of interest on general measurement model contracts, as presented in note C3.2 to the IFRS financial results, together with the unwind
of variable fee approach contracts on a long-term normalised basis. This differs from the presentation in note C3.2 to the IFRS financial results by reallocating $630 million from economic and other
variances to unwind.
Profitable new business in the first half of 2023 grew the CSM by Other movements in the CSM reflect economic and other variances
$1,196 million which combined with the unwind of the CSM balance to update the CSM for changes in expected future profitability
shown in the table above of $760 million, increased the CSM by including the impact of short term market effects of business
$1,956 million. This increase exceeded the release of the CSM to the accounted for under the variable fee approach. In the first half
income statement in the period of $(1,177) million, demonstrating of 2023 ‘economic and other variances’ includes $52 million for new
the strength of our franchise and its ability to deliver future growth riders added to existing base savings contracts. The incremental
in CSM and ultimately adjusted new business profit. value from such sales is not included within the new business
contribution to CSM because our IFRS17 approach considers
insurance contracts as a whole. In contrast, EEV will include this
amount as new business. The remainder of the positive variance
includes the effects of the small reductions in bond yields in many
of our markets. Movements in exchange rates had a negative impact
of $(237) million on the closing CSM. Overall the CSM grew by an
annualised growth rate of 8 per cent.

Asset management
Actual exchange rate Constant exchange rate Actual exchange rate

2023 2022 Change 2022 Change 2022 Change
$m* $m* % $m* % $m* %
External funds under management* ($bn) 88.7 81.5 9 79.2 12 81.9 8

Funds managed on behalf of M&G plc ($bn) 2.4 9.3 (74) 9.6 (75) 9.3 (74)
External funds under management ($bn) 91.1 90.8 – 88.8 3 91.2 –
Internal funds under management ($bn) 107.8 105.4 2 107.0 1 104.1 4

Internal funds under advice ($bn) 28.8 26.1 10 26.9 7 26.1 10

Total internal funds under management
or advice ($bn) 136.6 131.5 4 133.9 2 130.2 5
Total funds under management and advice ($bn) 227.7 222.3 2 222.7 2 221.4 3
Total external net flows** 1,857 (1,786) n/a (1,681) n/a (1,586) n/a
Analysis of adjusted operating profit

Retail operating income 210 196 7 187 12 392 n/a
Institutional operating income 141 136 4 137 3 268 n/a
Operating income before performance-related fees 351 332 6 324 8 660 n/a
Performance-related fees 2 4 (50) 4 (50) 1 n/a
Operating income (net of commission) 353 336 5 328 8 661 –
Operating expense (185) (184) (1) (181) (2) (360) n/a
Group’s share of tax on joint ventures’ adjusted
operating profit (22) (21) (5) (19) (16) (41) n/a

Adjusted operating profit 146 131 11 128 14 260 n/a
Adjusted operating profit after tax 132 117 13 114 16 234 n/a
Average funds under management or advice

by Eastspring $228.8bn $241.8bn (5) $239.7bn (5) $229.4bn n/a
Fee margin based on operating income 31bps 28bps 3bps 27bps 4bps 29bps 2bps
Cost/income ratio17 53% 55% 2ppts 56% 3ppts 55% 2ppts
* Unless otherwise stated.

** Excluding funds managed on behalf of M&G plc and money market funds in case of net flows.
Eastspring, the Group’s asset management business, had total funds Despite the increase in closing FUM discussed above, average FUM
under management and advice12 (FUM) of $227.7 billion at 30 June decreased by (5) per cent4 compared with the same period in 2022
2023, up $6.3 billion from 31 December 2022 (on an actual exchange to $228.8 billion as a result of market movements in the prior year.
rate basis) reflecting positive market movements and inflows from Eastspring’s adjusted operating profit increased by 14 per cent4
third parties (excluding M&G plc) and the Group’s life businesses. to $146 million in the first half of 2023, reflecting a net investment
gain (as compared with a net investment loss in the prior year) on
Third-party net inflows (excluding money market funds and funds shareholders’ investments including seed capital. Excluding the gains
managed on behalf of M&G plc) in the first half of 2023 were
and losses on shareholders’ investments from both periods, operating

$1.9 billion (2022: net outflows of $(1.8) billion6), reflecting strong net profit was (5) per cent4 lower, consistent with the decline in average
flows into retail funds. This was more than offset by the net outflows FUM and the cost/income ratio was marginally higher. Favourable
of $(7.1) billion in the first half of 2023 (2022: $(0.7) billion6) from mix effects from higher retail sales and the investment gains noted
the expected redemption of funds managed on behalf of M&G plc. above contributed to a higher fee margin of 31bps (2022: 27bps).

Other income and expenditure IFRS effective tax rates

Central costs (before restructuring and IFRS 17 implementation In the first half of 2023, the effective tax rate on adjusted operating
costs) were 11 per cent4 lower in the first half of 2023 as compared profit was 15 per cent (2022: 21 per cent). The decrease from the
to the prior period, reflecting the benefit of the targeted reduction of 2022 effective tax rate primarily reflects the recognition of a deferred
head office costs and the redemption of a senior debt instrument tax asset in relation to historical tax losses, due to an increase in
in January 2023. Interest payable on core structural borrowings forecast taxable profit in the UK tax group. Excluding the impact
reduced by $18 million in the first half of 2023 compared with of this credit, the effective tax rate in the first half of 2023 would
the prior period. Total head office expenditure was $(115) million be 18 per cent.
(2022: ($150) million4).
The effective tax rate on total IFRS profit in the first half of 2023
Restructuring costs of $(92) million (2022: $(152) million4) reflect the was 19 per cent (2022: negative 12 per cent), reflecting a reduction
Group’s substantial and ongoing IFRS 17 project, and one-off costs in the level of investment losses on which no tax credit is recognised.
associated with regulatory and other initiatives in our business.
IFRS 17 costs are expected to decrease from 2024 leading to Work is ongoing to assess the potential impact from the Organisation
restructuring costs reverting over time to the lower levels typically for Economic Co-operation and Development (OECD) proposals
incurred historically. to implement a global minimum tax rate of 15 per cent. Some
jurisdictions where Prudential has taxable presence, including the UK,
IFRS basis non-operating items either have implemented the proposals or intend to implement the
Non-operating items from continuing operations in the period proposals effective for 2024 onwards. Other jurisdictions where
consist of negative short-term fluctuations in investment returns Prudential has taxable presence, including Hong Kong, intend to
of $(287) million (2022: $(2,806) million4). These short-term implement the proposals for 2025 onwards.
fluctuations principally arise from the impact of falling interest rates
on both the actual investment return, with the divergence from the
longer term return included in short-term fluctuations, and the
General Measurement Model (GMM) discount rates, which, amongst
other effects, increases the best estimate policyholder liabilities.
Shareholders’ equity
Group IFRS shareholders’ equity
Half year Half year Full year

2023 2022 2022
$m $m $m
Profit/(loss) for the period 947 (1,505) (997)

Less non-controlling interest (3) (3) 10
Profit after tax for the period attributable to shareholders 944 (1,508) (1,007)
Exchange movements, net of related tax (185) (529) (603)
Other external dividends (361) (320) (474)
Other movements 30 (252) (121)
Net increase (decrease) in shareholders’ equity 428 (2,609) (2,205)
Shareholders’ equity at beginning of the period
As previously reported 16,731 17,088 17,088
Effect of initial application of IFRS 17 & IFRS 9, net of tax – 1,848 1,848
Shareholders’ equity at end of the period 17,159 16,327 16,731
Shareholders’ value per share 16
623¢ 594¢ 608¢
Adjusted shareholders’ equity16 36,445 35,211
Group IFRS shareholders’ equity increased from $16.7 billion at the included in other movements. Following the adoption of IFRS 9,
start of 2023 (after allowing for the effects of IFRS 17 and IFRS 9) the income statement is unaffected by this transaction.
to $17.2 billion at 30 June 2023. This largely reflects profit generated
during the period, offset by dividend payments of $(0.4) billion, The IFRS adjusted shareholders’ equity represents the sum of Group
and exchange movements of $(0.2) billion. IFRS shareholders’ equity and CSM, net of tax. Group’s IFRS adjusted
equity increased to $36.4 billion at 30 June 2023 (31 December
In the first half of 2023, the Group completed the disposal of its 2022: $35.2 billion6) reflecting increases in IFRS shareholders’ equity
remaining interest in Jackson, the Group’s former US business, for and the CSM. A full reconciliation to shareholders’ equity is included
cash of $273 million. This gave rise to a gain of $8 million compared in note C3.1 of the IFRS financial results.
to the carrying value of this interest at 31 December 2022 that is

EEV basis results
EEV basis results
Half year Half year Half year

2023 2022 Change 2022 Change
$m $m % $m %
New business profit 1,489 1,098 36 1,069 39

Profit from in-force business 844 1,001 (16) 985 (14)
Operating profit from insurance business 2,333 2,099 11 2,054 14
Asset management 132 117 13 114 16
Other income and expenditure (310) (410) 24 (407) 24

Operating profit for the period 2,155 1,806 19 1,761 22
Non-operating profit (loss) 182 (5,314) n/a (5,307) n/a
Profit (Loss) for the period 2,337 (3,508) n/a (3,546) n/a
Dividends paid (361) (320)
Foreign exchange movements (475) (1,198)
Other movements 19 (258)
Net increase (decrease) in EEV shareholders’ equity 1,520 (5,284)
EEV shareholders’ equity at 1 Jan 42,184 47,355
Effect of HK RBC – 229
EEV shareholders’ equity at end of period 43,704 42,300
% New business profit/average EEV shareholders’ equity for insurance
business operations* 8% 5%
% Operating profit/average EEV shareholders’ equity 10% 8%
* Excluding goodwill attributable to equity holders.

Actual exchange rate
30 Jun 2023 31 Dec 2022

EEV shareholders’ equity $m $m
Represented by:
CPL 3,131 3,259
Hong Kong 17,496 16,576
Indonesia 1,763 1,833
Malaysia 3,557 3,695
Singapore 7,060 6,806
Growth markets and other 7,172 6,688
Embedded value from insurance business excluding goodwill 40,179 38,857
Asset management and other excluding goodwill 2,772 2,565
Goodwill attributable to equity holders 753 762
Group EEV shareholders’ equity 43,704 42,184
EEV shareholders’ equity per share 1,588¢ 1,534¢

EEV new business profit and APE sales
Half year 2023 $m Half year 2022 $m Change % Half year 2022 $m Change %
New New New New New

business business business business business
APE sales profit APE sales profit APE sales profit APE sales profit APE sales profit
CPL 394 171 507 217 (22) (21) 474 203 (17) (16)
Hong Kong 1,027 670 227 211 352 218 227 211 352 218
Indonesia 150 61 110 52 36 17 106 50 42 22
Malaysia 185 73 172 70 8 4 165 66 12 11
Singapore 386 198 390 244 (1) (19) 398 249 (3) (20)
Growth markets and other 885 316 807 304 10 4 762 290 16 9
Total 3,027 1,489 2,213 1,098 37 36 2,132 1,069 42 39
Total new business margin 49% 50% 50%
EEV operating profit increased by 22 per cent4 to $2,155 million, Overall, EEV shareholders’ equity increased to $43.7 billion at 30 June
reflecting a 14 per cent4 increase in the operating profit for the 2023 (31 December 2022: $42.2 billion6). Of this, $40.2 billion
insurance business, largely reflecting higher new business profit, (31 December 2022: $38.9 billion6) relates to the insurance business
a 16 per cent4 increase in the operating profit for the asset operations, excluding goodwill attributable to equity holders.
management business and an improvement in central costs. This amount includes our share of our India associate valued using
The operating return on embedded value5 was 10 per cent embedded value principles. The market capitalisation of this
(2022: 8 per cent6). associate at 30 June 2023 was circa $10.0 billion, which compares
with a publicly reported embedded value of circa $4.3 billion at
The operating profit from the insurance business increased 31 March 2023.
14 per cent4 to $2,333 million, largely reflecting a 39 per cent4 increase
in new business profit to $1,489 million following a strong growth in EEV shareholders’ equity on a per share basis at 30 June 2023
APE sales, partly offset by a (14) per cent4 lower profit from in-force was 1,588 cents (31 December 2022: 1,534 cents6).
business of $844 million. The profit from in-force business is driven
by the expected return and effects of operating assumption changes Group free surplus generation
and experience variances. The expected return was marginally lower Free surplus is the metric we use to measure the internal cash
at $1,117 million (2022: $1,161 million4), reflecting a lower opening generation of our business operations and broadly reflects the
balance to which the expected return is applied, as a result of amount of money available to our operational businesses for
economic movements in 2022. Operating assumption changes investing in new business, strengthening our capacity and capabilities
and experience variances were negative $(273) million on a net basis to grow the business, and potentially paying returns to the Group.
compared with $(176) million4 in 2022. This reflects the elevated For our insurance businesses it largely represents the Group’s available
expenses supporting the continued investment in enhancing our regulatory capital resources after allowing for the prescribed required
multi-channel distribution capabilities and in embedding technology regulatory capital held to support the policies in issue, with a number
to enhance the customer experience together with unfavourable of adjustments so that the free surplus better reflects resources
morbidity experience on some medical reimbursement products potentially available for distribution to the Group. For our asset
following the removal of Covid-19 restrictions. management businesses, Group holding companies and other
non-insurance companies, the measure is based on IFRS net assets
Detailed discussion of new business performance by segment with certain adjustments, including to exclude accounting goodwill
is presented in the Strategic and Operating review. and to align the treatment of capital with our regulatory basis.
Operating free surplus generation represents amounts emerging
The non-operating profit of $182 million (2022: loss of from the in-force business during the year, net of amounts reinvested
$(5,307) million4) is largely driven by lower interest rates and in writing new business. For asset management businesses, it equates
increasing equity markets over the period leading to increased asset to post-tax adjusted operating profit for the year. Further information
values with a consequential favourable impact on future profits. is contained in the EEV financial results.

Analysis of movement in Group free surplus
Half year Half year Half year

2023 2022 Change 2022 Change
$m $m % $m %
Expected transfer from in-force business and return on existing free surplus 1,529 1,446 6 1,410 8
Changes in operating assumptions and experience variances (223) (60) (272) (56) (298)
Operating free surplus generated from in-force business 1,306 1,386 (6) 1,354 (4)
Asset management 132 117 13 114 16
Operating free surplus generated from in-force insurance and asset
management business 1,438 1,503 (4) 1,468 (2)

Investment in new business (414) (279) (48) (268) (54)
Operating free surplus generated from insurance and asset management
business before restructuring costs 1,024 1,224 (16) 1,200 (15)
Central costs and eliminations (net of tax):
Net interest paid on core structural borrowings (85) (103) 17 (103) 17
Corporate expenditure (115) (150) 23 (150) 23
Other items and eliminations (21) (10) (110) (10) (110)
Restructuring and IFRS 17 implementation costs (net of tax) (88) (146) 40 (144) 39
Net Group operating free surplus generated 715 815 (12) 793 (10)
Non-operating and other movements, including foreign exchange (125) (1,805)
External cash dividends (361) (320)
Increase (decrease) in Group free surplus before net subordinated
debt redemption 229 (1,310)
Net subordinated debt redemption (397) (1,699)
Increase (decrease) in Group free surplus before amounts attributable
to non-controlling interests (168) (3,009)
Change in amounts attributable to non-controlling interests (5) (5)

Free surplus at 1 Jan 12,229 14,049
Effect of HK RBC – 1,360
Free surplus at end of period 12,056 12,395
Free surplus at end of period excluding distribution rights and other intangibles 8,409 8,589
Our Group generated an operating free surplus from insurance After allowing for lower central costs and restructuring and IFRS 17
and asset management operations before restructuring costs13 of costs, total Group free surplus generation was down (10) per cent4
$1,024 million, down (15) per cent4. Operating free surplus generated to $715 million.
from in-force insurance and asset management business7 was
down (2) per cent4 to $1,438 million as a result of elevated operating After allowing for short-term market and currency losses, the
variances, reflecting on-going investment in the Group’s multi- redemption of debt (which is treated as capital for free surplus
channel distribution capabilities and unfavourable morbidity purposes), and the external dividend payment, free surplus at 30 June
experience on some medical reimbursement products following 2023 was $12.1 billion in line with the opening balance. Excluding
the removal of Covid-19 restrictions. The cost of investment in new distribution rights and other intangibles, free surplus was $8.4 billion
business increased by 54 per cent4 to $(414) million reflecting the (31 December 2022: $8.4 billion6; 30 June 2022: $8.6 billion6).
increase in APE sales of 42 per cent4 and changes in business mix.

Greater China presence

Prudential has a significant footprint in the Greater China region, with businesses in the Chinese Mainland (through its holding in CPL),
Hong Kong (together with its branch in Macau) and Taiwan.
The table below demonstrates the significant proportion of the Group’s financial measures that were contributed by the Greater China region:
Gross premiums earned* New business profit
Half year Full year Half year Full year
2023 2022 2022 2023 2022 2022

$m $m $m $m $m $m
Total Greater China** 6,478 6,983 13,103 922 503 912

Total Group** 13,051 14,609 27,783 1,489 1,098 2,184
Percentage of total 50% 48% 47% 62% 46% 42%
* The gross earned premium includes the Group’s share of amounts earned from joint ventures and associates as disclosed in note II (vi) of the Additional financial information.
** Total Greater China represents the amount contributed by the insurance businesses in Hong Kong, Taiwan and the Group’s share of the amounts earned by CPL. The Group total includes the Group’s
share of the amounts earned by all insurance business joint ventures and associates.
Dividend Recognising the strong conviction we have in the Group’s revised

Reflecting the Group’s capital allocation priorities, a portion of strategy, when determining the annual dividend we intend to look
capital generation will be retained for reinvestment in organic growth through the investments in new business and investments in
opportunities and for investment in capabilities, and dividends will capabilities and expect the annual dividend to grow in the range
be determined primarily based on the Group’s operating capital 7 – 9 per cent per annum over 2023 and 2024.
generation after allowing for the capital strain of writing new
business and recurring central costs. Dividends are expected to grow Group capital position
broadly in line with the growth in the Group’s operating free surplus Prudential applies the Insurance (Group Capital) Rules set out in
generation, and will be set taking into account financial prospects, the GWS Framework issued by the Hong Kong Insurance Authority
investment opportunities and market conditions. (“HKIA”) to determine Group regulatory capital requirements (both
minimum and prescribed levels). The GWS Group capital adequacy
The Board applies a formulaic approach to first interim dividends, requirements require that total eligible Group capital resources are
calculated as one-third of the previous year’s full-year ordinary not less than the GPCR and that GWS Tier 1 group capital resources
dividend. Accordingly, the Board has approved a 2023 first interim are not less than the GMCR. More information is set out in note I(i)
cash dividend of 6.26 cents per share (2022: 5.74 cents per share8). of the Additional financial information.
The Group holds material participating business in Hong Kong,
Singapore and Malaysia. Alongside the regulatory GWS capital basis,
a shareholder GWS capital basis is also presented which excludes
the contribution to the Group GWS eligible Group capital resources,
the GMCR and the GPCR from these participating funds.
30 Jun 2023 31 Dec 2022
Shareholder Policyholder* Total** Shareholder Policyholder* Total**
Group capital resources ($bn) 23.4 14.0 37.4 23.2 12.6 35.8
of which: Tier 1 capital resources14 ($bn) 16.4 1.7 18.1 15.9 1.5 17.4
Group Minimum Capital Requirement ($bn) 4.6 1.0 5.6 4.4 0.9 5.3
Group Prescribed Capital Requirement ($bn) 7.9 11.3 19.2 7.6 10.1 17.7
GWS capital surplus over GPCR ($bn) 15.5 2.7 18.2 15.6 2.5 18.1
GWS coverage ratio over GPCR (%) 295% 194% 307% 202%
GWS Tier 1 surplus over GMCR ($bn) 12.5 12.1

GWS Tier 1 coverage ratio over GMCR (%) 323% 328%
* This allows for any associated diversification impacts between the shareholder and policyholder positions reflected in the total company results where relevant.
** The total company GWS coverage ratio over GPCR presented above represents the eligible group capital resources coverage ratio as set out in the GWS framework while the total company
GWS tier 1 coverage ratio over GMCR represents the tier 1 group capital coverage ratio.

As at 30 June 2023, the estimated shareholder GWS capital surplus Financing and liquidity
over the GPCR is $15.5 billion10 (31 December 2022: $15.6 billion8), The Group manages its leverage on a Moody’s total leverage9 basis,
representing a coverage ratio of 295 per cent11 (31 December 2022: which takes into account gross debt, including commercial paper,
307 per cent6) and the estimated total GWS capital surplus over the and also allows for a proportion of the surplus within the Group’s
GPCR is $18.2 billion (31 December 2022: $18.1 billion6) representing with-profits funds. The Group’s leverage target is to be between 20
a coverage ratio of 194 per cent (31 December 2022: 202 per cent6). and 25 per cent on a Moody’s total leverage9 basis over the medium
term. Moody’s have not stated how they will calculate leverage under
Operating capital generation in the first half of 2023 was $0.7 billion
IFRS 17 but have indicated that they might consider up to 50 per cent
after allowing for central costs and the investment in new business.
of any company’s CSM as equity. This has yet to be incorporated into
This was offset by the payment of external dividends of $(0.4) billion
Moody’s formal methodology and hence has not been incorporated
to reflect payment of the 2022 second interim dividend and other
into the Group’s target above. At 30 June 2023, we estimate that
capital movements of $(0.4) billion, largely reflecting the redemption
our Moody’s total leverage was 20 per cent (31 December 2022:
of a senior debt instrument in January 2023.

21 per cent6, before allowing for the £300 million senior bonds
The Group’s GWS position is resilient to external macroeconomic redeemed in January 2023). This would reduce to circa 14 per cent
movements as demonstrated by the sensitivity disclosure contained (31 December 2022: 15 per cent6, before allowing for the £300 million
in note I(i) of the Additional financial information, alongside further senior bonds redeemed in January 2023) if a 50 per cent equity credit
information about the GWS measure. for the CSM was provided.
Prudential seeks to maintain its financial strength rating with
applicable credit rating agencies, which derives, in part, from its
high level of financial flexibility to issue debt and equity instruments,
which is intended to be maintained in the future.
Net core structural borrowings of shareholder-financed businesses
30 Jun 2023 $m 30 Jun 2022 $m 31 Dec 2022 $m
Mark-to- Mark-to- Mark-to-

IFRS market EEV IFRS market EEV IFRS market EEV
basis value basis basis value basis basis value basis
Borrowings of shareholder-financed
businesses 3,949 (389) 3,560 4,266 (193) 4,073 4,261 (427) 3,834

Less holding company cash and short-term
investments (3,314) – (3,314) (2,143) – (2,143) (3,057) – (3,057)
Net core structural borrowings of
shareholder-financed businesses 635 (389) 246 2,123 (193) 1,930 1,204 (427) 777
Moody’s total leverage9 20% 21%
The total borrowings of the shareholder-financed businesses from In addition to its net core structural borrowings of shareholder-
continuing operations were $3.9 billion17 at 30 June 2023. After the financed businesses set out above, the Group has structures in place
balance sheet date, the Group redeemed a €20 million medium-term to enable access to funding via the medium-term note programme,
note as it fell due on 10 July 2023. the US shelf programme (the platform for issuance of SEC registered
bonds in the US market), a commercial paper programme and
On 20 January 2023 the Group redeemed £300 million ($371 million) committed revolving credit facilities. All of these are available for
senior bonds as they reached their maturity. In addition, the Group general corporate purposes. Proceeds from the Group’s commercial
has a $750 million perpetual note that reached its first call date in paper programme are not included in the holding company cash
January 2023 at which time the Group’s management elected not and short-term investment balance.
to call it. We retain the right to call this security at par on a quarterly
basis hereafter. The Group’s remaining securities have contractual Prudential plc has maintained a consistent presence as an issuer
maturities that fall between 2029 and 2033. Further analysis of the in the commercial paper market for the past decade and had
maturity profile of borrowings is presented in note C5.1 to the IFRS $529 million in issue at 30 June 2023 (31 December 2022:
financial results. $501 million6).

On 2 March 2023 the Group’s parent company, Prudential plc, As at 30 June 2023, the Group had a total of $2.6 billion of undrawn
transferred all of its borrowings to a wholly-owned indirect subsidiary, committed facilities, expiring in 2026. Apart from small drawdowns
Prudential Funding (Asia) plc. Prudential plc has provided a guarantee to test the process, these facilities have never been drawn, and there
to holders of the debt instruments in the event of default by were no amounts outstanding at 30 June 2023.
Prudential Funding (Asia) plc. Other terms of the borrowings, and
the value recognised by the Group, were unchanged by this transfer.

Cash remittances
The definition of holding company cash and short-term investments was updated, with effect from 31 December 2022, following the
combination of the Group’s London office and Asia regional office into a single Group Head Office in 2022. The inclusion of amounts previously
managed on a regional basis increased holding company cash and short term investments by $0.9 billion at 31 December 2022.
Holding company cash flow
Actual exchange rate
Half year Half year

2023 2022 Change
$m $m %
Net cash remitted by business units18 1,024 1,009 1

Net interest paid (40) (117) 66
Corporate expenditure (155) (124) (25)
Centrally funded recurring bancassurance fees (160) (220) 27
Total central outflows (355) (461) 23
Holding company cash flow before dividends and other movements 669 548 22
Dividends paid (361) (320) (13)
Operating holding company cash flow after dividends but before other movements 308 228 35
Issuance and redemption of debt (371) (1,729) 79
Other corporate activities 282 159 77
Total other movements (89) (1,570) 94
Total holding company cash flow 219 (1,342) 116
Cash and short-term investments at the beginning of the year 3,057 3,572 (14)
Foreign exchange and other movements 38 (87) 144
Cash and short-term investments at the end of the period 3,314 2,143 55
Remittances from our businesses were $1,024 million Cash outflows for corporate expenditure of $(155) million
(2022: $1,009 million6). Remittances were used to meet central (2022: $(124) million6) include cash outflows for restructuring costs.
outflows of $(355) million (2022: $(461) million6) and to pay
dividends of $(361) million. Other cash flow movements included net receipts from other
corporate activities of $282 million (2022: $159 million6 net
Central outflows include net interest paid of $(40) million payments) comprising largely of proceeds received from the sale of
(2022: $(117) million6), which is net of interest and similar income our remaining shares in Jackson Financial Inc. as well as dividends
earned on central cash balances in the first half of 2023, largely on receipts. In January 2023 the Group redeemed senior bonds as they
balances brought into the updated definition of holding company reached their maturity at a cost of $371 million.
cash and short-term investments. In addition, lower interest
payments were made on core structural borrowings in the first The Group will continue to seek to manage its financial condition such
half of 2023 as compared with the same period in the prior year. that it has sufficient resources available to provide a buffer to support
the retained businesses in stress scenarios and to provide liquidity to
service central outflows.

Notes
1 APE sales is a measure of new business activity that comprises the aggregate of 11 Estimated GWS coverage ratio of capital resources over GPCR attributable to the
annualised regular premiums and one-tenth of single premiums on new business written shareholder business, before allowing for the 2023 first cash interim dividend.
during the year for all insurance products. See note II of the Additional unaudited 12 30 June 2023 total funds under management or advice including external funds under
financial information for further explanation. management, money market funds, funds managed on behalf of M&G plc and internal
2 New business profit, on a post-tax basis, on business sold in the period, calculated funds under management or advice.
in accordance with EEV Principles. 13 For insurance operations operating free surplus generated represents amounts emerging
3 IFRS shareholders equity plus contractual service margin net of reinsurance and related from the in-force business during the period net of amounts reinvested in writing new
tax adjustments. See note C3.1 in the IFRS financial results for further information. business and excludes non-operating items. For asset management business it equates
4 On a constant exchange rate basis. to post-tax operating profit for the period. Restructuring costs are presented separately
5 Operating return calculated as operating profit (annualised by multiplying by two) from the business unit amount. Further information is set out in ‘movement in Group free
divided by the average EEV shareholders’ equity for continuing operations. See note II(x) surplus’ in the EEV basis results.
of the Additional unaudited financial information for definition and calculation. 14 The classification of tiering of capital under the GWS framework reflects the different
6 On an actual exchange rate basis. local regulatory regimes along with guidance issued by the HKIA.
7 Operating free surplus generated from in-force insurance business represents amounts 15 Adjusted release of CSM reflects an adjustment to the release of CSM figure as shown

emerging from the in-force business during the year before deducting amounts in note C3.2 of the IFRS financial results of $1 million (Half year 2022: $11 million,
reinvested in writing new business and excludes non-operating items. For asset Full year 2022: $23 million) for the treatment adopted for adjusted operating purposes
management businesses, it equates to post-tax operating profit for the year. of combining losses on onerous contracts and gains on profitable contracts that can be
Restructuring costs are presented separately from the business unit amount. shared across more than one annual cohort. See note B1.3 to the IFRS financial results
Further information is set out in ‘movement in Group free surplus’ of the EEV basis results. for more information.
8 ‘Adjusted operating profit’ refers to adjusted IFRS operating profit based on longer-term 16 See note II of the Additional financial information for definition and reconciliation
investment returns. This alternative performance measure is reconciled to IFRS profit to IFRS balances.
for the period in note B1.1 of the IFRS financial results. 17 See note C5 of the IFRS financial results for further details on the Group’s borrowings.
9 Calculated with no adjustment for the value of contractual service margin in equity 18 Net cash amounts remitted by businesses are included in the holding company cash
and with 50 per cent of the with-profits estate treated as equity. flow, which is disclosed in detail in note I(iv) of the Additional financial information.
10 Estimated GWS capital resources in excess of the GPCR attributable to the shareholder This comprises dividends and other transfers from businesses.
business, before allowing for the 2023 first cash interim dividend. Prescribed capital
requirements are set at the level at which the local regulator of a given entity can impose
penalties, sanctions or intervention measures. The estimated GWS group capital adequacy
requirements require that total eligible Group capital resources are not less than the GPCR.


Risk review
Enabling effective risk-based

decision-making in a complex world.

In the face of significant market volatility and uncertainty, Prudential’s Macroeconomic and market environment
Group Risk Framework, risk appetite, and robust governance have The global economy has remained resilient but continues to face
continued to enable the business to manage and control its risk various challenges. Headline inflation has moved down since
exposure dynamically and effectively throughout the first half of mid-2022 on the back of declining food and energy prices, but core
2023, in order to support the Group’s strategy of delivering sustainable inflation has remained above central bank targets after the full
value for all our stakeholders: employees, customers, shareholders reopening following the Covid-19 pandemic, reflecting the strong
and the communities in which we operate. This section explains the demand for services as well as the tight labour markets fuelling wage
main risks inherent in the business and how Prudential manages those gains, particularly in the US and the UK. The improved yet elevated
risks, with the aim of ensuring an appropriate risk profile is maintained. inflation environment has led central banks to continue raising rates.
Further interest rate increases are expected to be implemented to
1 Introduction attempt to rein in inflation, but tighter monetary conditions could
exert downward pressures on growth. In emerging markets, inflation

The Group has been less severe and monetary tightening is broadly expected
Prudential has continued to focus on executing its strategy across to have reached its peak. While inflation, after having reached
Asia and Africa, underpinned by its structural growth markets, decades-high levels in 2022, may have peaked in most markets where
breadth of distribution channels and strong capital base. Going the Group operates, there are structural risks to inflation persistence,
forward, Prudential will be focused on driving more consistent concerns of a wage-price spiral, constraining real incomes and growth
performance and accelerating value creation by changing our to an extent capable of triggering a global recession.
organisation model, building multi-market growth engines, investing
Following the lifting of all pandemic-related restrictions, economic
in our three strategic pillars of customer, distribution and health,
growth in the Chinese Mainland has not been as strong as the
which are supported by our three enablers of technology, people
government’s original plans, which has led to the loosening of
and culture, and wealth and investments capabilities.
both monetary and fiscal policies to improve the momentum of its
The Group Risk, Compliance and Security (RCS) function continues economic recovery. For example, the Chinese Mainland has initiated
to provide risk opinions, guidance, assurance and engagement new policy stimulus with another round of policy easing to boost
with Prudential’s Group-wide supervisor, the Hong Kong Insurance consumption and private sector investment, including targeted
Authority (IA), on critical activities, while overseeing the risks and liquidity injections into the property market, which remains lacklustre.
implications to the ongoing business in order to ensure the Group Moreover, as the Chinese Mainland is a key driver for the global
remains within its approved risk appetite, at all times, against the economy, its weak growth as well as unpredictable regulatory risk
backdrop of increased complexity of the macroeconomic, could weigh on the broader Asia region and the global economy’s
geopolitical and regulatory environments. vitality going forward. Nevertheless, the Group has benefited from
the reopening of the Chinese Mainland’s border with Hong Kong,

The first half of 2023 was characterised by declining though still as evidenced by large increases in sales.
elevated inflation, high interest rates and economic uncertainties,
set against reconfigured national alliances and competition for This environment of higher global interest rates and meaningful
energy and natural resources. The ongoing impacts to the Group recession risk is putting pressure on banks’ balance sheets and
are multifaceted and may be pronounced. These include increased margins, which has also contributed to the demise of three significant
strategic and business risks, as well as increasing insurance, product regional banks in the US and raised concerns of a repeat of the Global
and customer conduct risks. For the Group’s customers, these wider Financial Crisis. The larger banks also have material unrealised losses
geopolitical, macroeconomic and climate change related on bonds due to the sharp increase in rates, and while they are well
circumstances may increase uncertainty over livelihoods, elevate capitalised, the risk of a run on deposits due to social media and
costs of living, and cause challenges in affordability for essential digital banking is heightened. This could result in uncertainties in
needs and services, including insurance products – perhaps at times the credit market with a pullback in both credit supply and credit
when they may be most needed. The complexity of meeting demand and lead to a sharper tightening in global credit conditions.
regulatory expectations on these issues, as governments increasingly This would be broadly associated with weaker global growth, as well
focus on them, is expected to increase. Prudential will need to meet as country-level recessions that are deeper and longer than would
these challenges for its business and those of its customers in a fair otherwise be the case. With interest rates rising, Africa has seen an
and equitable way. At the same time, the Group will be expected increase in external debt servicing costs. The rising debt servicing
to navigate the volatile financial environment to ensure it remains burden could lead to a trade-off for governments in the region
robustly capitalised and its liquidity position is resilient to sustainably between paying down debt obligations and funding longer-term
deliver for the needs of its customers and the societies in which it social projects. The domestic debt exchange programme in Ghana is
an illustration of the impact of tighter financial conditions. Similarly,
operates. These are the key themes underpinning this report.

weaker exchange rates in emerging markets where the Group
Against this backdrop, the Group continues to effectively leverage operates may have an adverse impact on Prudential’s consolidated
its risk management, compliance and security experience in more financial statements upon the translation of results into the US dollar,
mature markets, applying it to its growth markets as appropriate the Group’s reporting currency. While the impact for the Group is
to their respective risks and the extent of their challenges in this immaterial, the devaluation in mid-June 2023 of the Nigerian naira
changed world, and reflective of opportunities, customer issues and is notable.
needs, and local customs. Prudential will continue to apply this holistic
and coordinated approach in managing the increasingly dynamic,
multifaceted and often interconnected risks facing its businesses.

Risk review / continued
The macroeconomic landscape and financial markets are expected The Russia-Ukraine conflict has been protracted and remains
to remain challenging and highly uncertain. Ad-hoc events can uncertain and complex. The direct implications for the Group are
disrupt market conditions unexpectedly. For example, the polarised immaterial, and have been regularly monitored and considered in the
political landscape in the US raised the prospect that the federal Group’s broader scenario analysis and planning. However, challenges
government could be forced into a technical default on its debt if to supply chains, technologies and access to raw materials and
an agreement could not be reached to raise the debt ceiling in May energy will remain where national security concerns are heightened.
2023, which temporarily led to heightened volatility in the markets. Over the longer-term, the conflict, and the diplomatic and economic
The capital and liquidity position of the Group and its local businesses reactions to it, could contribute to an acceleration towards ‘de-risking’
continues to be actively monitored by Prudential as concerns remain specific policy areas such as technology or the divergence of markets
from policymakers and regulators around liquidity and solvency of into more distinct trading blocs, limiting the scope for flows of people,
the financial system. Challenging macroeconomic conditions could capital and data between blocs, increasing the potential operational
also negatively impact the Group’s new business growth, investment and reputational risks for companies continuing to trade and operate
performance, in-force surplus generation plans and expense between these blocs.
management.
Geopolitical developments may trigger important legislative or
Geopolitical landscape regulatory changes that adversely impact Hong Kong’s economy or
The US-Chinese Mainland relationship continues to be a key focus its international trading and economic relationships, and may result
of geopolitical tension in 2023, which resulted in risk-off sentiment in adverse sales, operational and product distribution impacts to the
towards the Chinese Mainland, leading to different degrees of Group due to the territory being a key market which also hosts Group
decoupling affecting world supply chains and creating tougher head office functions.
business conditions. In turn, this has exerted pressure on policymakers
in other geographies, including the Asian markets in which the Societal developments
Group operates. Global economic uncertainties with the rise in interest rates and
elevated inflation, on top of the ongoing challenges of the uneven
The Chinese Mainland diplomacy has become more active following rebound from the pandemic, are increasingly putting pressure on
the Party Congress in March 2023, reflecting the importance it has household affordability and may exacerbate existing structural
placed on trying to stabilise its external environment while managing inequalities within societies. Government and supervisory attention
domestic economic pressures. President Xi’s visit to Russia highlighted is being increasingly focused on the cost of living crisis taking shape
the continuing importance of Russia’s relationship with the Chinese across many of the Group’s markets and the contribution of the
Mainland, and saw no progress to resolve the conflict in Ukraine. corporate sector to government tax revenues. These developments
The Chinese Mainland and Russia are considering expanding the have implications for Prudential in terms of how it engages with
use of local currencies for trade settlements to reduce reliance on the its customers, who will, in some markets, experience real challenges
US dollar. The Chinese Mainland also hosted a number of political in affording or maintaining insurance products at their current level
meetings with leaders from Asia, Europe and Latin America, with of coverage. This may happen at times when that protection is
visits by European leaders in April 2023 and US cabinet members needed most, and when such customers increasingly represent the
in June and July 2023. Tensions over Taiwan remain elevated, vulnerable in society. In Asia, there is an increasing expectation from
in particular after Taiwan’s President Tsai met with US House Speaker governments for private companies to help with affordability issues,
McCarthy in California in April 2023. for example, by introducing moratoria on price increases, to extend
the regulatory definitions of ‘vulnerable’ customers to explicitly
Bilateral relationships between India and the Chinese Mainland
include those in need due to the current economic pressures,
are expected to remain tense, largely due to long-standing border
and to continue to promote financial inclusion in a difficult
disputes. India continues to impose severe curbs on Chinese
economic environment. Prudential will continue to carefully balance
investments and has put material constraints on remittances back
affordability and the impact on customers with the need to reprice
to the Chinese Mainland. India and the US have agreed to enhance
products where necessary.
their defence and trade relationships with an eye on the Chinese
Mainland’s perceived growing assertiveness in the Indo-Pacific region. A high inflation environment, combined with recessionary concerns,
and societal and regulatory expectations of support, may also
heighten existing challenges in persistency for insurers. As has always
been the case, Prudential will continue to engage with governments,
regulators and supervisors on these issues. As a matter of course,
the Group regularly assesses the suitability and affordability of its
products, and aims to reduce their perceived complexity whilst
increasing the transparency of their costs and benefits. These aims,
as well as the Group’s increasing focus on the sustainable digital
distribution of its health and protection products via its digital
platform, help to expand the financial inclusion of Prudential’s
products and improve customer outcomes.

The Group looks to retain the positive changes that Covid-19 Regulatory focus on the financial services industry remains broad
accelerated, including those related to changes in traditional working and often concurrent, and includes areas such as customer conduct
practices and the use of digital services, technologies and distribution and protection, information security and data privacy and residency,
methods to customers, while monitoring and mitigating the potential third-party management, systemic risk regulation, corporate
increase in technology, data security or misuse and regulatory risks governance and senior management accountability. Sustainability
that these may bring. Prudential is exploring new ways of working and climate-related regulatory and reporting developments continue
and, as a responsible employer, is reflecting thematic trends through to develop at pace, both globally and in Asia. Developments in
a coordinated suite of activities related to the upskilling of its domestic and international capital standards continue to move
workforce, and increasing flexibility, inclusivity and psychological forward, for example, the International Insurance Capital Standard
safety in the workplace. The Group continues to monitor emerging (ICS) is being developed by the International Association of
social trends, including those linked to environmental change and the Insurance Supervisors (IAIS) due for adoption in 2025. Changes in
impacts to developing market societies associated with the transition regulations related to capital have the potential to change the extent

to a lower-carbon global economy. A just and inclusive transition is of capital sensitivity to risk factors. The new accounting standard
central to the Group’s strategy and Prudential recognises the interests IFRS 17, effective from 1 January 2023, is mandatory for the Group
from a wide range of stakeholders in the way it manages ESG given its UK domicile and its dual primary listings. Prudential’s
and climate-related risks. The Group continues to recognise the portfolio of transformation and regulatory change programmes have
importance of financial inclusion and the ways in which the Group’s the potential to introduce new, or increase existing, regulatory risks
products and services meet the changing needs of affected societies. and supervisory interest while increasing the complexity of ensuring
Its risk management framework is regularly reviewed to ensure the concurrent regulatory compliance across markets driven by potential
Group is best positioned to manage the changing nature of these for increased intra-Group connectivity and dependencies.
wide-ranging risks, including activities to promote a transparent
culture, and active encouragement of open discussion and learnings In jurisdictions where Prudential operates with ongoing policy
from mistakes. initiatives and regulatory developments which impact the way
Prudential is supervised including demanding corresponding controls
Regulations and maintaining the capabilities of fulfilling the existing or new
Prudential operates in highly regulated markets, and as the regulations. These developments continue to be monitored by the
nature and focus of regulations and laws evolve, the complexity of Group at a market and global level and these considerations form
regulatory compliance (including with respect to economic sanctions, part of the Group Risk Framework and ongoing engagement with
anti-money laundering and anti-corruption) continues to increase government policymakers, industry groups and regulators.
and represents a challenge for international businesses. Geopolitical
tensions have increased uncertainties and the long-term complexity
of legal and regulatory compliance for Prudential’s businesses

operating across multiple jurisdictions. Whilst the complexity of
sanctions driven by the geopolitical conflicts is elevated, the Group
is experienced in managing this and has in place risk tolerance
frameworks to deal with complex and conflicting risk trade-offs
to guide executive decisions.
The rapid pace and high volume of regulatory changes and
interventions, and swiftness of their application including those
driven by the financial services industry, have the potential to increase
strategic and regulatory risks for the Group’s businesses. There has
been an increased regulatory focus by the HKIA, Prudential’s
Group-wide supervisor, in particular on capital and solvency,
customer experience, investment management, governance and
sustainability and climate-related topics. In the Chinese Mainland,
a new regulator, the National Administration of Financial Regulation
(NAFR), officially replaced the China Banking and Insurance
Regulatory Commission on 18 May 2023 to centralise the oversight
of the financial industry with the aim to strengthen and improve its
financial supervision through deepening the financial regulatory
sector reform, enhancing the quality and effectiveness of financial
regulation, and promoting full coverage of financial regulation in the

sector. Customer protection is also centrally supervised by the NAFR.

2. Risk governance Risk culture is a strategic priority of the Board, which recognises
its importance in the way that the Group conducts business.
a System of governance A Group-wide culture framework is under review to support the
Prudential has in place a system of governance that embeds a revised purpose and strategy for the Group. The Responsibility and
clear ownership of risk, together with risk policies and standards Sustainability Working Group supports its responsibilities in relation
to enable risks to be identified, measured and assessed, managed to implementation of the culture framework, as well as embedding
and controlled, monitored and reported. The Group Risk Framework, the culture aspects of the Group’s ESG strategic framework and
owned by the Board, details Prudential’s risk governance, risk overseeing progress on diversity and inclusion initiatives. The culture
management processes and risk appetite. The Group’s risk framework provides principles and values that are embedded in
governance arrangements are based on the ‘three lines’ model. the ways of working across the Group’s functions and locations and
The ‘first line’ is responsible for taking and managing risk, while the defines how Prudential expects business to be conducted to achieve
‘second line’ provides additional challenge, expertise, oversight and its strategic objectives, informs expectations of leadership and
scrutiny. The role of the ‘third line’, assumed by the independent supports the resilience and sustainability of the Group.
Group-wide Internal Audit function, is to provide objective assurance The components of the culture framework support sound risk
on the design, effectiveness and implementation of the overall management practices by requiring a focus on customers, longer-
system of internal control. The Group-wide RCS function reviews, term goals and sustainability, the avoidance of excessive risk-taking,
assesses, oversees and reports on the Group’s aggregate risk and highlighting acceptable and unacceptable behaviours.
exposure and solvency position from an economic, regulatory This is supported through the inclusion of risk and sustainability
and credit ratings perspective. considerations in performance management for key executives;
the building of appropriate skills and capabilities in risk management;
In 2023, continuous efforts have been made to ensure the and by ensuring that employees understand and care about their
appropriateness of the level of Group governance that promotes role in managing risk through open discussions, collaboration and
individual accountability in decision-making and supports the overall engagement. The Group Risk Committee has a key role in providing
corporate governance framework to provide sound and prudent advice to the Remuneration Committee on risk management
management and oversight of the Group’s business. The Group considerations to be applied in respect of executive remuneration.
also continuously reviews the Group Risk Framework to ensure ESG
considerations, which form an integral part of the wider Group Prudential’s Group Code of Business Conduct and Group Governance
governance, including climate risk considerations are appropriately Manual, supported by the Group’s risk-related policies, are regularly
reflected in policies and processes, and embedded within all business reviewed and include guiding principles on the day-to-day conduct of
functions. all its people and any organisations acting on its behalf. Supporting
policies include those related to financial crime, covering anti-money
b Group Risk Framework laundering, sanctions, anti-bribery and corruption and conduct.
i. Risk governance and culture The Group’s third-party and outsourcing policy requires that human
Prudential’s risk governance comprises the Board organisational rights and modern slavery considerations are embedded across all
structures, reporting relationships, delegation of authority, roles of its supplier and supply chain arrangements. Procedures to allow
and responsibilities, and risk policies that have been established to individuals to speak out safely and anonymously against unethical
make decisions and control activities on risk-related matters. The risk behaviour and conduct are also in place.
governance structure is led by the Group Risk Committee, supported
by independent Non-executive Directors on the risk committees of Further details on the Group’s ESG governance arrangements and
the Group’s major businesses. The Group Risk Committee approves strategic framework are included in the Group’s 2022 ESG report.
changes to the Group Risk Framework and the core risk policies that ii. The risk management cycle
support it. The Committee has direct lines of communication, Risk identification
reporting and oversight of the risk committees of the Group’s major In accordance with provision 28 of the UK Corporate Governance
businesses. The Chief Risk and Compliance Officers of the Group’s Code and the GWS guidelines issued by the HKIA, top-down
major businesses and the managing directors of the Group’s Strategic and bottom-up processes are in place to support Group-wide
Business Groups are also invited to the Group Executive Risk identification of principal risks. An emerging risk identification
Committee, the advisory committee to the Group Chief Risk and framework also exists to support the Group’s preparations in
Compliance Officer. The Chief Risk and Compliance Officers of the managing financial and non-financial risks expected to crystallise
Group’s major businesses also attend Group Risk Committee beyond the short-term horizon. The Group performs a robust
meetings on a rotational participating basis. assessment and analysis of these principal and emerging risk
themes through the risk identification process, the Group Own Risk
and Solvency Assessment (ORSA) report and the risk assessments
undertaken as part of the business planning review, including how
they are managed and mitigated, which supports decision-making.
The Group’s emerging risk identification process recognises the
dynamic materiality of emerging risk themes, for example, the recent
antitrust concerns raised within the Net Zero Insurance Alliance
leading to member withdrawals. Such concerns have not spread to
the Net Zero Asset Owner Alliance, of which Prudential is a member.
The concept of dynamic materiality is also considered relevant in the
context of the Group’s monitoring of emerging themes relevant to
ESG and climate-related risks, including reputation risk.

The ORSA is the ongoing process of identifying, measuring and Group risk appetite is defined and monitored in aggregate by the
assessing, managing and controlling, monitoring and reporting the setting of objectives for its capital requirements, liquidity, and
risks to which the business is exposed. It includes an assessment of non-financial risk exposure, covering risks to stakeholders, including
capital adequacy to ensure that the Group’s solvency needs are met those from participating and third-party businesses. Group limits
at all times, as well as stress and scenario testing, which includes operate within these expressions of risk appetite to constrain material
climate scenarios and reverse stress testing. The latter requires the risks, while triggers and indicators provide additional defined points
Group to ascertain the point of business model failure and is another for escalation. The Group Risk Committee, supported by the
tool that helps to identify the key risks and scenarios that may have RCS function, is responsible for reviewing the risks inherent in the
a material impact on the Group. The risk profile assessment is a key Group’s business plan and for providing the Board with a view on
output from the risk identification and risk measurement processes the risk/reward trade-offs and the resulting impact to the Group’s
and is used as a basis for setting Group-wide limits, management aggregated position relative to Group risk appetite and limits,
information, assessment of solvency needs, and determining including non-financial risk considerations.

appropriate stress and scenario testing. The Group’s principal risks,
which are reported and managed by the Group with enhanced focus, a. Capital requirements. Limits on capital requirements aim to
are reviewed and updated on a regular basis. ensure that in both business as usual and stressed conditions, the
Group maintains adequate capital in excess of internal economic
Risk measurement and assessment capital requirements, achieves its desired target credit rating to meet
All identified risks are assessed based on an appropriate its business objectives, and supervisory intervention is avoided.
methodology for that risk. Quantifiable risks, which are material and The two measures in use at the Group level are the GWS group capital
mitigated by holding capital, are modelled in the Group’s internal requirements and internal economic capital requirements, determined
model, which is used to determine the Group Internal Economic by the Group Internal Economic Capital Assessment (GIECA).
Capital Assessment (GIECA) and is subject to independent validation
and processes and controls around model changes and limitations. b. Liquidity. The objective of the Group’s liquidity risk appetite is to
help ensure that appropriate cash resources are available to meet
Risk management and control financial obligations as they fall due in both business as usual and
The Group’s control procedures and systems focus on aligning stressed scenarios. This is measured using a liquidity coverage ratio
the levels of risk-taking with the Group’s strategy and can only which considers the sources of liquidity against liquidity requirements
provide reasonable, and not absolute, assurance against material under stress scenarios.
misstatement or loss. The Group’s risk policies define the Group’s
appetite to material risks and set out the risk management and c. Non-financial risks. The non-financial risk appetite framework
control requirements to limit exposure to these risks. These policies is in place to identify, measure and assess, manage and control,
also set out the processes to enable the measurement and monitor and report effectively on material non-financial risks across
the business. The non-financial risk appetite is framed around the

management of these risks in a consistent and coherent way,
including the flows of management information required. perspectives of its varied stakeholders, takes into account current
The methods and risk management tools employed to mitigate and expected changes in the external environment, and provides
each of the Group’s principal risks are detailed in section 3 below. limit and trigger appetite thresholds for non-financial risk categories
across the Group’s locations. The Group accepts a degree of
Risk monitoring and reporting non-financial risk exposure as an outcome of its chosen business
The Group’s principal risks are highlighted in the management activities and strategy, and aims to manage these risks effectively to
information received by the Group Risk Committee and the maintain its operational resilience and its commitments to customers
Board, which also includes key exposures against appetite and and all stakeholders and avoid material adverse financial loss or
developments in the Group’s principal and emerging risks. impact to its reputation.
iii. Risk appetite, limits and triggers
The Group is cognisant of the interests of the broad spectrum of its
stakeholders (including customers, investors, employees, communities
and key business partners) and that a managed acceptance of risk lies
at the heart of its business. The Group seeks to generate stakeholder
value by selectively taking exposure to risks, mitigated to the extent
it is cost-effective to do so, and where these are an outcome of its
chosen business activities and strategy. Those risks for which the
Group has no tolerance are actively avoided. The Group’s systems,
procedures and controls are designed to manage risk appropriately,

and its approach to resilience and recovery aims to maintain the
Group’s ability and flexibility to respond in times of stress.
Qualitative and quantitative expressions of risk appetite are defined
and operationalised through risk limits, triggers and indicators.
The RCS function reviews the appropriateness of these measures at
least annually. The Board approves changes to the Group’s aggregate
risk appetite and the Group Risk Committee has delegated authority
to approve changes to the system of limits, triggers and indicators.

Risk management
Risk identification Risk measurement and assessment

Risk identification covers Group-wide: Risks are assessed in terms of materiality.
Material risks which are modelled are included
a) Top-down risk identification in appropriately validated capital models.
b) Bottom-up risk identification
c) Emerging risk identification
Risk
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as
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Risk governance Business
en
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and culture strategy
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Risk governance comprises the Board, Business strategy and the business plan
sse
organisational structures, reporting provide direction on future growth and
ssm
relationships, delegation of authority, inform the level of limits on solvency,
roles and responsibilities, and risk liquidity and for our key risks. The RCS
ent
policies. The Group-wide culture function provides input and opinion
framework includes principles and values on key aspects of business strategy.
that define how business is to achieve its
strategic objectives, inform expectations
of leadership and guide ESG activities.
Capital Stress and

management scenario testing
Capital adequacy is monitored Stress and scenario testing is
to help ensure that internal and performed to assess the robustness
regulatory capital requirements are of capital adequacy and liquidity,
met, and that solvency buffers are and the appropriateness of risk
appropriate, over the business limits. Recovery planning assesses
planning horizon and under stress. the effectiveness of the Group’s
ol
recovery measures and

ntr
the appropriateness of
Mo
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activation points.
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Monitor and report Manage and control

Escalation requirements in the event of a breach are Risk appetite and limits allow for the controlled growth
clearly defined. Risk reporting provides regular updates of the Group’s business, in line with business strategy
to the Group’s Board and Risk committees on exposures and plan. Processes that support the oversight and control
against Board-approved appetite statements and limits. of risks include:
Reporting also covers the Group’s principal risks.
1 The Risk and Control Self-Assessment (RCSA) process
2 The Own Risk and Solvency Assessment (ORSA)
3 Group-approved limits and early warning triggers
4 Large risk approval process
5 Global counterparty limit framework
6 Critical/Internal incidents procedures
7 Stress and scenario testing, including reverse
stress testing

3 The Group’s principal risks risks, which are not exhaustive, are detailed below. The Group’s risk
management cycle (detailed opposite) includes within its scope the
The delivery of the Group’s strategy in building long-term value for all processes for prioritising and determining the relative significance
our stakeholders, focusing on high-growth business in Asia and Africa, of ESG and climate-related risks, as well as those associated with
exposes Prudential to risks. The materialisation of these risks within implementing the Group’s externally communicated commitments.
the Group or in its joint ventures, associates or key third-party partners The Group’s 2022 ESG report includes further detail on the ESG and
may have a financial impact and may affect the performance of climate-related risks which contribute to the materiality of the Group’s
products or services or the fulfilment of commitments to customers principal risks detailed below, including those related to the Group’s
and other stakeholders, with an adverse impact on Prudential’s operational and financial resilience, data privacy requirements and
brand and reputation. This report is focused mainly on risks to expectations, the regulatory landscape and the implementation of
the shareholder but includes those which arise indirectly through the Group’s strategy. Further details on specific risks faced by the
policyholder exposures and third-party business. The Group’s principal Group are set out in the section headed ‘Risk factors’.

Risks to the Group’s financial situation
(including those from the external macroeconomic and geopolitical environment)
The global economic and geopolitical environment may impact on the Group directly by affecting trends in financial markets and asset values,
as well as driving short-term volatility.
Risks in this category include the market risks to our investments and the credit quality of our investment portfolio as well as liquidity risk.
Global economic and geopolitical conditions

With geopolitical tensions high as national alliances and blocs drive the operating environment and risk landscape for the Group
evolve, the jostling of the current world order and the increasing and the level of its exposure to the principal risks outlined below.
prioritisation of national security (widely defined) have become
key determinants of macroeconomic policy, with geopolitical and Macroeconomic and geopolitical developments are considered
macroeconomic uncertainties being intertwined. Geopolitical material to the Group and can potentially increase operational and
developments and tensions, macroeconomic conditions, and business disruption, regulatory and financial market risks, and have
broad policy-driven regulatory developments (see below), at times the potential to directly impact Prudential’s sales and distribution
networks, as well as its reputation. The potential impacts to the

interconnected in the speed and manner in which they evolve,
Group are included in the disclosures on Risk factors.
Market risks to our investments

The value of Prudential’s direct investments is impacted by > The monitoring and oversight of market risks through
fluctuations in equity prices, interest rates, credit spreads, foreign the regular reporting of management information;
exchange rates and property prices. There are also potentially > Regular deep dive assessments; and
indirect impacts through the value of the net equity of its joint > The Group Critical Incident Procedure (GCIP), which defines
ventures and associates. Although inflation remains at decades- specific governance to be invoked in the event of a critical
level highs in certain global markets, the Group’s direct exposure incident, such as a significant market, liquidity or credit-related
to inflation remains modest. Exposure mainly arises through an event. This includes, where necessary, the convening of a
increase in medical claims obligations, driven by rising medical Critical Incident Group (CIG) to oversee, coordinate, and
prices. This exposure can be effectively managed by the business’ where appropriate, direct activities during a critical incident.
well-established practice and ability to reprice products. Challenges
for insurers linked to affordability and existing challenges in Interest rate risk, including asset liability management (ALM).
persistency are detailed in the Insurance Risks section below. Interest rate risk is driven by the impact of the valuation of Prudential’s
assets (particularly government and corporate bonds) and liabilities,
The Group has appetite for market risk where it arises from which are dependent on market interest rates. Prudential’s appetite
profit-generating insurance activities to the extent that it remains for interest rate risk requires that assets and liabilities should be tightly
part of a balanced portfolio of sources of income for shareholders matched for exposures where assets or derivatives exist that can cover
and is compatible with a robust solvency position. The Group’s these exposures. Interest rate risk is accepted where this cannot be
market risks are managed and mitigated by the following: hedged, provided that this arises from profitable products and to the
> The Group market risk policy; extent that such interest rate risk exposure remains part of a balanced
> Risk appetite statements, limits and triggers; exposure to risks and is compatible with a robust solvency position.
> The Group’s capital and asset liability management committees Sustained inflationary pressures have driven interest rates higher,
and the Group’s asset and liability management policy; these have the potential to increase further in the near-to-medium
> Asset and liability management activities, which include term, and may impact the valuation of fixed income investments
management actions such as changes in asset allocation, bonus and reduce fee income. The Group’s risk exposure to rising interest
revisions, repricing and the use of reinsurance where appropriate; rates also arises from the potential impact to the present value of
> The Group Investment Committee and Group Investment Policy; future fees for unit-linked based businesses, such as in Indonesia
> Hedging using derivatives, including currency forwards, and Malaysia, as well as the impact to the present value of the
bond forwards/futures, interest rate futures and swaps, future profits for accident and health products, such as in Hong
and equity futures; Kong. Exposure to higher interest rates also arises from the potential
impact to the value of fixed income assets in the shareholder funds.

Risks to the Group’s financial situation (including those from the external macroeconomic and geopolitical environment)
continued
Market risks to our investments

(continued)
The Group’s risk exposure to lower/decreased interest rates arises value of funds under management. Exposure also arises from
from the guarantees of some non-unit-linked products with a participating businesses through potential fluctuations in the value
savings component, including the Hong Kong and Singapore of future shareholders’ profits and where bonuses declared are
participating and non-participating businesses. This exposure based broadly on historical and current rates of return from the
results from the potential for an asset and liability mismatch, business’s investment portfolios, which include equities. The Group
where long-dated liabilities and guarantees are backed by has limited acceptance for exposures to equity risk, but accepts the
short-dated assets. When this duration mismatch is not eliminated, equity exposure that arises on future fees (including shareholder
it is monitored and managed through local risk and asset liability transfers from the participating business).
management committees and Group risk limits consistent with
the Group’s appetite for interest rate risk. The material exposures to equity risk in the Group’s businesses
include CPL’s exposure to equity risk through investments in equity
The Group Capital and ALM Committee is a management assets for most of its products, including participating and
committee supporting the identification, assessment and non-participating savings products and protection and unit-linked
management of key financial risks to the achievement of the products. The Hong Kong business and, to a lesser extent, the
Group’s business objectives. The Committee also oversees ALM, Singapore business contribute to the Group’s equity risk exposure
solvency and liquidity risks of the local businesses as well as the due to the equity assets backing participating products. The
declaration and management of non-guaranteed benefits for Indonesia and Malaysia businesses are exposed to equity risk
participating and universal life lines of business. Local business through their unit-linked products, and in the case of Malaysia
units are responsible for the management of their own asset exposure also arises from participating and unit-linked business.
and liability positions, with appropriate governance in place.
Foreign exchange risk. The geographical diversity of Prudential’s
The objective of the local business unit ALM process is to meet businesses means that it has some exposure to the risk of foreign
policyholder liabilities with the returns generated from the exchange rate fluctuations. Some entities within the Group write
investment assets held, while maintaining the financial strength policies, invest in assets or enter into other transactions in local
of capital and solvency positions. The ALM strategy adopted by currencies or currencies not linked to the Group’s reporting/
the local business units considers the liability profile and related functional currency, the US dollar. Although this limits the effect of
assumptions of in-force business and new products to appropriately exchange rate movements on local operating results, it can lead to
manage investment risk within ALM risk appetite, under different fluctuations in the Group’s US dollar-reported financial statements.
scenarios in accordance with policyholders’ reasonable expectations, This risk is accepted within the Group’s appetite for foreign
and economic and local regulatory requirements. Factors such as exchange risk. In cases where a non-US dollar denominated surplus
the availability of matching assets, diversification, currency and arises in an operation which is to be used to support Group capital
duration are considered as appropriate. The assumptions and or shareholders’ interest (ie, remittances), this currency exposure
methodology used in the measurement of assets and liabilities may be hedged where considered economically favourable. Further,
for ALM purposes conform with local solvency regulations. the Group generally does not have appetite for significant direct
Assessments are carried out on an economic basis which shareholder exposure to foreign exchange risks in currencies outside
conforms to the Group’s internal economic capital methodology. the markets in which it operates, but it does have some appetite for
this on fee income and on equity investments within participating
Equity and property investment risk. The shareholder exposure
funds. Where foreign exchange risk arises outside appetite, currency
to equity price movements arises from various sources, including
swaps and other derivatives are used to manage the exposure.
from unit-linked products where fee income is linked to the market
Liquidity risk
Prudential’s liquidity risk arises from the need to have sufficient Prudential has no appetite for any business to have insufficient
liquid assets to meet policyholder and third-party payments as resources to cover its outgoing cash flows, or for the Group as
they fall due, considered under both business-as-usual and stressed a whole to not meet cash flow requirements from its debt
conditions. It includes the risk arising from funds composed of obligations under any plausible scenario. The Group has significant
illiquid assets and results from a mismatch between the liquidity internal sources of liquidity sufficient to meet its expected cash
profile of assets and liabilities. Liquidity risk may impact market requirements for at least 12 months from the date the financial
conditions and valuation of assets in a more uncertain way than for statements are approved, without having to resort to external
other risks like interest rate or credit risk. It may arise, for example, sources of funding. The Group has a total of $2.6 billion of undrawn
where external capital is unavailable at sustainable cost, where committed facilities that can be made use of, expiring in 2026.
derivatives transactions require a sudden significant need of liquid Access to further liquidity is available through the debt capital
assets or cash to post as collateral to meet derivatives margin markets and the Group’s extensive commercial paper programme.
requirements, or where redemption requests are made against Prudential has maintained a consistent presence as an issuer in the
funds managed for external clients (both retail and institutional). market for the past decade.
Liquidity risk is considered material at the level of the Group.

continued
Liquidity risk
(continued)
A number of risk management tools are used to manage > The Group’s Collateral Management Framework, which sets out
and mitigate liquidity risk, including the following: the approach to ensuring business units using derivatives have
sufficient liquid assets or ability to raise liquidity to meet
> The Group’s liquidity risk policy; derivatives margins;
> Risk appetite statements, limits and triggers; > The Group’s contingency plans and identified sources of liquidity;
> Regular assessment and reporting by the Group and business

> The Group’s ability to access the money and debt capital
units of Liquidity Coverage Ratios which are calculated under markets; and
both base case and stressed scenarios;
> The Group’s access to external committed credit facilities.
> The Group’s Liquidity Risk Management Plan, which includes
details of the Group Liquidity Risk Framework as well as analysis
of Group and business units liquidity risks and the adequacy
of available liquidity resources under business-as-usual and
stressed conditions;
Credit risk
Credit risk is the potential for loss resulting from a borrower’s A number of risk management tools are used to manage and
failure to meet its contractual debt obligation(s). Counterparty mitigate credit and counterparty credit risk, including the following:
risk, a type of credit risk, is the probability that a counterparty to
a transaction defaults on its contractual obligation(s) causing > A credit risk policy and dealing and controls policy;
the other counterparty to suffer a loss. These risks arise from the > Risk appetite statements and portfolio-level limits;
Group’s investments in bonds, reinsurance arrangements, derivative > Counterparty limits framework and concentration limits
contracts with third parties, and its cash deposits with banks. on large names;
Credit spread risk, another type of credit risk, arises when the > Collateral arrangements for derivative, secured lending reverse

interest rate/return on a loan or bond is disproportionately low repurchase and reinsurance transactions which aim to provide
compared with another investment with a lower risk of default. a high level of credit protection;
Invested credit and counterparty risks are considered a material > The Group Executive Risk Committee and Group Investment
risk for the Group’s business units. Committee’s oversight of credit and counterparty credit risk
The Group’s holdings across its life portfolios are mostly in and sector and/or name-specific reviews;
local currency and with a largely domestic investor base, which > Regular assessments and deep dives, including of individual
provides support to these positions. These portfolios are generally and sector exposures subject to elevated credit risks; and
positioned towards high-quality names, including those with > Close monitoring or restrictions on investments that may
either government or considerable parent company balance sheet be of concern.
support. Areas which the Group is actively monitoring include The total debt securities at 30 June 2023 held by the Group’s
ongoing negative developments in the global banking sector, operations were $80.4 billion (31 December 2022: $77.0 billion).
effects of the global economic slowdown on the invested assets, The majority (84 per cent, 31 December 2022: 84 per cent) of the
the impacts of the tightening of monetary policy in the Group’s portfolio are investments either held in unit linked funds or support
key markets, higher refinancing costs, heightened geopolitical insurance products where policyholders participate in the returns
tension and protectionism, negative developments in the Chinese of a specified pool of investments1. The gains or losses on these
Mainland property sector and more widely across the Chinese investments will largely be offset by movements in policyholder
Mainland economy, as well as high indebtedness in African liabilities2. The remaining 16 per cent (31 December 2022:
countries. The impacts of these trends, which are being closely 16 per cent) of the debt portfolio (the ‘shareholder debt portfolio’)
monitored, include potential for deterioration in the credit quality
are investments where gains and losses broadly impact the income
of the Group’s invested credit exposures, particularly due to rising statement, albeit short-term market fluctuations are recorded
funding costs and overall credit risks, and the extent of downward outside of adjusted operating profit.
pressure on the fair value of the Group’s portfolios. The Group’s
portfolio is generally well diversified in relation to individual Group sovereign debt. Prudential invests in bonds issued by
counterparties, although counterparty concentration is monitored national governments. This sovereign debt holding within the
in particular in local markets where depth (and therefore the shareholder debt portfolio represented 51 per cent or $6.7 billion3
liquidity of such investments) may be low. Prudential actively of the total shareholder debt portfolio as at 30 June 2023
reviews its investment portfolio to improve the robustness and (31 December 2022: 41 per cent or $4.9 billion of the shareholder
resilience of the solvency position. The Group has appetite to take debt portfolio). The particular risks associated with holding
credit risk to the extent that it remains part of a balanced portfolio sovereign debt are detailed further in the disclosures on Risk factors.
of sources of income for shareholders and is compatible with a
The total exposures held by the Group in sovereign debt securities
robust solvency position. Further detail on the Group’s debt
at 30 June 2023 are given in note C1 of the Group’s IFRS financial
portfolio is provided below.
statements.

continued
Credit risk
(continued)
Corporate debt portfolio. In the shareholder debt portfolio, reinsurance counterparty credit risk exposure is managed using
corporate debt exposures totalled $5.8 billion of which $5.5 billion an array of risk management tools, including a comprehensive
or 94 per cent were investment grade rated (31 December 2022: system of limits. Prudential manages the level of its counterparty
$6.6 billion of which $6.1 billion or 93 per cent were investment credit risk by reducing its exposure or using additional collateral
grade rated). arrangements where appropriate.
Bank debt exposure and counterparty credit risk. The banking At 30 June 2023:
sector represents a material concentration in the Group’s corporate
debt portfolio which largely reflects the composition of the fixed > 94 per cent of the Group’s shareholder portfolio (excluding all
income markets across the regions in which Prudential is invested. government and government-related debt) is investment grade
As such, exposure to banks is a key part of its core investments, rated4. In particular, 60 per cent of the portfolio is rated4 A-
and above (or equivalent); and
as well as being important for the hedging and other activities
undertaken to manage its various financial risks. Exposure to the > The Group’s shareholder portfolio is well diversified: no individual
sector is considered a material risk for the Group. Derivative and sector5 makes up more than 15 per cent of the total portfolio
(excluding the financial and sovereign sectors).
The Group’s sustainability and ESG-related risks

These include sustainability risks associated with environmental considerations such as climate change (including physical and transition risks),
social risks arising from diverse stakeholder commitments and expectations and governance-related risks.
Material and emerging risks associated with key ESG themes may Regulatory interest and developments continue to increase
undermine the sustainability of a business by adversely impacting globally and in Asia, and sustainability and ESG-related risks are
its reputation and brand, ability to attract and retain customers, high on the agenda of both local regulators and international
investors, employees and distribution and other business partners, supervisory bodies such as the International Association of
and increasing regulatory compliance and litigation risks, and Insurance Supervisors (IAIS) and the International Sustainability
therefore the results of its operations and delivery of its strategy Standards Board (ISSB), which published its inaugural sustainability
and long-term financial success. As custodians of stakeholder value and ESG-related disclosure requirements in June 2023. The Group
for the long term, Prudential seeks to manage sustainability risks continues to actively engage with, and respond to, discussions,
and their potential impact on its business and stakeholders through consultations and supervisory information-gathering exercises.
a focus on the Group’s revised purpose, and transparent and Details of the Group’s sustainability and ESG-related risks are
consistent implementation of its strategy in its markets and across included in the disclosure on Risk factors.
operational, underwriting and investment activities. The Group
also supports a just and inclusive transition to a lower-carbon global As local regulatory requirements on climate risk management
economy that places the societies of developing markets at the and disclosures develop, the Group continues to leverage and share
forefront of considerations, as well as provides greater and more its Group-wide experience and knowledge with its local businesses
inclusive access to good health and financial security that meets on their ESG policies and approaches, both to provide support and
the changing needs of societies, promotes responsible stewardship to help drive consistency in their continuing embedment across
in managing the human impact of climate change and building Prudential’s businesses. The Group Risk Framework continues to
human and social capital with its broad range of stakeholders. be critically evaluated and updated where required to ensure
It is enabled by strong internal governance, sound business both sustainability and ESG-related considerations and risks to
practices and a responsible investment approach, with ESG the Group, and the external impact from the Group’s activities,
considerations integrated into investment processes and decisions are appropriately captured.
and the performance of fiduciary and stewardship duties, including Risk management and mitigation of sustainability and ESG risks
voting and active engagement decisions with respect to investee at Prudential include the following:
companies, as both an asset owner and an asset manager.
Climate risk, the Group’s reporting against the recommendations > A focus on enhancing access to good health and financial
of the Task Force on Climate-Related Financial Disclosures (TCFD) security, and in connection with our stakeholders, ensuring
and progress on the Group’s external climate-related commitments responsible stewardship of ESG and climate-related issues; clear
is a priority focus for the Group Risk Committee for 2023. governance arrangements, both in the definition of the roles and
responsibilities of the Board and management committees for
aspects of sustainability and ESG risks and through the Group
Governance Manual, which include ESG and responsible business
practice-linked policies, and the Group Code of Business Conduct;

The Group’s sustainability and ESG-related risks
continued
> The continued embedding of sustainability and ESG risk within – Deep dives into emerging and increasingly material ESG
the Group Risk Framework and risk processes, including: themes, including climate-related risks, and development
– Consideration of the potential for dynamically-changing of Board-level and broader training.
materiality in emerging environmental, social and governance > Integrating ESG considerations into investment processes
themes and risks through emerging risk identification and and responsible supply chain management; and
evaluation processes; > Participation in networks and industry forums and working
– Definition of appropriate (and longer) time horizons with groups such as the Net Zero Asset Owner Alliance (NZAOA),
respect to climate risk management and the requirement Principles for Responsible Investment (PRI) and CRO Forum

to consider time horizons where required in risk-based to further develop understanding and support collaborative
decision-making; action in relation to sustainability and ESG risks such as climate
– Reflection in the risk taxonomy that the Group can be both change and promoting a just and inclusive transition.
impacted by sustainability and ESG issues as well as having Further information on the Group’s ESG governance and ESG
an impact on these in the external world (‘double materiality’); strategic framework, as well as the management of material
– The applicability of the Group’s Model Risk and UDA Risk Policy ESG themes, are included in the Group’s 2022 ESG report.
to the tools used for the aggregation of the Group’s carbon
intensity metrics across its investment portfolios; and
Risks from the nature of our business and our industry

These include the Group’s non-financial risks, including operational and transformation risks from significant change activity, information
security and data privacy risk, risks associated with the Group’s joint ventures and associates, and risks related to regulatory compliance, as well
as insurance risks and customer conduct risks assumed by the Group in providing its products.

Non-financial risks
The complexity of Prudential, its activities and the extent of > Screening and transaction monitoring systems for financial
transformation in progress creates a challenging operating crime and a programme of compliance control monitoring
environment and exposure to a variety of non-financial risks which reviews and regular risk assessments;
are considered to be material at a Group level. Prudential accepts > Internal and external review of cyber security capability
a degree of non-financial risk exposure as an outcome of its chosen and defences; and
business activities and strategy. > Regular updating and risk-based testing of disaster recovery
Alongside the non-financial risk appetite framework, other risk plans and the Critical Incident Procedure process.
policies and standards that individually engage with specific The Group’s non-financial risks, which are not exhaustive,
non-financial risks, including outsourcing and third-party are detailed below:
management, business continuity, fraud, financial crime,
technology and data, operations processes and extent of Operations and process controls risk. This is the risk of failure
transformation are in place. These policies and standards include to adequately or accurately process different types of operational
subject matter expert-led processes that are designed to identify, transactions, including customer servicing, and asset and
assess, manage and control non-financial risks, detailed below. investment management operations. The risk of operational
These activities are fundamental in maintaining an effective processing errors can arise from human error, system issues or
system of internal control, and aim to ensure that non-financial control gaps, and may occur across different types of operational
risk considerations are embedded in key business decision-making, tasks or activities. These errors can also lead to suboptimal
including material business approvals and in setting and customer experience and lower operational efficiency. Apart from
challenging the Group’s strategy. These activities include: the direct financial impacts of inaccurate processing, indirect
costs may include regulatory penalties, reputational damage and
> Reviews of key non-financial risks and challenges within Group resources spent to amend the errors. The Group aims to manage
and business unit business plans during the annual planning the risk effectively by maintaining operational resilience and
cycle, to support business decisions; honouring commitments to customers and stakeholders, whilst
> Corporate insurance programmes to limit the financial impact avoiding material adverse financial loss or impact on its reputation.
of operational risks;
> Oversight of risk management during the transformation
life cycle, project prioritisation and the risks, interdependencies
and possible conflicts arising from a large portfolio of
transformation activities;


continued
Non-financial risks
(continued)
Transformation risk. Transformation risk remains a material risk Model and user developed application (UDA) risk. Erroneous
for Prudential, with a number of significant change programmes or misinterpreted tools used in core business activities, decision-
under way which, if not delivered and executed effectively to making and reporting could impact Prudential negatively. The
defined timelines, scope and cost, may negatively impact its Group utilises various tools and they form an integral part of
operational capability, control environment, reputation, and ability operational functions including the calculation of regulatory or
to deliver its strategy and maintain market competitiveness. internal capital requirements, the valuation of assets and liabilities,
This risk may be further elevated as Prudential implements the determining hedging requirements, assessing projects and strategic
revised strategy for the Group. Prudential’s current portfolio of transactions, and acquiring new business via digital platforms.
transformation and significant change programmes include
(i) the implementation and embedding of large scale regulatory/ The Group has no appetite for model and UDA risk arising from
industry changes such as the implementation of IFRS 17; (ii) the failures to develop, implement and monitor appropriate risk
expansion of the Group’s digital capabilities and use of technology, mitigation measures. Prudential’s model and UDA risk framework
platforms and analytics; and (iii) improvement of business applies a risk-based approach to tools (including those under
efficiencies through operating model changes, including those development) which considers a broad range of stakeholders,
relating to the Group’s central, asset management and investment including policyholders, with the aim to ensure a proportionate
oversight functions. Further detail on the risks to the Group level of risk management.
associated with large-scale transformation and complex strategic Prudential’s model and UDA risk is managed and mitigated using
initiatives is included in the disclosures on Risk factors. the following:
The Group therefore aims to ensure that, for both transformation > The Group’s Model and UDA Risk Policy and relevant guidelines;
and strategic initiatives, strong programme governance is in place > Annual risk assessment (including model limitations, known
with embedded risk expertise to achieve ongoing and nimble errors and approximations) of all tools used for core business
risk oversight, with regular risk monitoring and reporting to risk activities, decision-making and reporting;
committees. The Group’s transformation risk framework is in place > Maintenance of appropriate documentation for tools used;
alongside with the Group’s existing risk policies and frameworks
with the aim to ensure appropriate governance and controls are > Implementation of controls with the aim to ensure tools are
in place to mitigate these risks. accurate and appropriately used;
> Tools are subject to rigorous and independent model validation;
Outsourcing and third-party risks. The Group’s outsourcing and
and third-party relationships require distinct oversight and risk > Regular reporting to the RCS function and relevant risk and Board
management processes. The Group has a number of important committees to support the measurement and management
third-party relationships, both with market counterparties and of the risk.
outsourcing partners, including distribution, technology and
ecosystem providers. In Asia, the Group maintains material Technological developments, in particular in the field of artificial
strategic partnerships and bancassurance arrangements. intelligence (AI) and the increased use of generative AI, pose new
These arrangements support the delivery of high level and considerations on risk oversight provided under the Group Risk
cost-effective services to customers, but also create a reliance on Framework. An oversight forum for the use of AI and key ethical
the operational resilience and performance of outsourcing and principles are in place and adopted by the Group with the aim to
business partners. The Group’s requirements for the management ensure the safe use of AI.
of material outsourcing arrangements have been incorporated in Fraud Risk. Prudential is exposed to fraud risk, including fraudulent
its Group third-party supply and outsourcing policy, aligned to the insurance claims, transactions, or procurement of services, that are
requirements of the HKIA’s GWS Framework, and which outlines made against or through the business. The Group’s counter fraud
the governance in place in respect of material outsourcing and policy is in place to set out the required standards to enhance fraud
third-party arrangements and the Group’s monitoring and risk detection, prevention and investigation activities with the objective
assessment framework. This aims to ensure that appropriate to protect resources to support sustainable business growth.
contract performance and risk mitigation measures are in place The policy also sets out the framework to tackle fraud with the
over these arrangements. goals of safeguarding customers, protecting local businesses
and the Group’s reputation, and providing assurance that fraud
risk is managed within appetite. The Group continues to undertake
strategic activities to monitor and evaluate the evolving fraud risk
landscape, mitigate the likelihood of fraud occurring and increase
the rate of detection. The Group has a mature confidential
reporting system in place, through which employees and other
stakeholders can report concerns relating to potential misconduct.
The process and results of this system are overseen by the Group
Audit Committee.

continued
Non-financial risks
(continued)
Financial crime risk. As with all financial services firms, Prudential Globally, ransomware and distributed denial of services (DDoS)
is exposed to risks relating to money laundering (the risk that the attacks have increased markedly since early 2022, in part driven
products or services of the Group are used by customers or other by the Russia-Ukraine conflict. The Group has responded swiftly
third parties to transfer or conceal the proceeds of crime); sanctions by leveraging threat intelligence information to configure security
compliance breaches (the risk that the Group undertakes business systems to mitigate any potential attacks, whether targeted or
with individuals and entities on the lists of the main sanctions collateral, from these events. Prudential also has a number of

regimes); and bribery and corruption (the risk that employees or defences in place to protect its systems from these types of attacks,
associated persons seek to influence the behaviour of others to including but not limited to: (i) DDoS protection for the Group’s
obtain an unfair advantage or receive benefits from others for the websites via web application firewall services; (ii) AI-based
same purpose). endpoint security software; (iii) continuous security monitoring;
(iv) network-based intrusion detection; and (v) employee training
Prudential operates in some high-risk markets where, for example, and awareness campaigns to raise understanding of attacks
the acceptance of cash premiums from customers may be common utilising email phishing techniques. Cyber insurance coverage is
practice, large-scale agency networks may be in operation where in place to provide some protection against potential financial
sales are incentivised by commission and fees, and concentration losses and the Group conducts simulation exercises for ransomware
of exposure to politically-exposed persons may give rise to higher attacks to assess and develop the effectiveness of incident
geopolitical risk exposure. responses across its businesses. Cyber-attack simulation exercises
The Group-wide policies on anti-money laundering, sanctions have been carried out to enhance preparedness.
and anti-bribery and corruption risks reflect the requirements As the Group continues to develop and expand digital services
applicable to all staff in all offices and businesses. These policies and emerging products, its reliance on third-party service providers
are also aligned with the Group’s values and behaviours that and business partners who specialise in niche capabilities is also
are expected across the business. Screening and transaction increasing. In the first half of 2023, among many companies
monitoring systems are in place with ongoing improvements and around the world, the Group’s businesses in Malaysia have been
upgrades being implemented where required, and a programme of affected by the global MOVEit, a vendor providing secured file
compliance control monitoring reviews is in place across the Group.

transfer services, data-theft attack where a zero-day vulnerability
The Group has continued to strengthen and enhance its financial was exploited with infringements to data security, integrity and
crime risk management capability through investment in advanced privacy, which as a result directly impacted the Group’s reputation
analytics and AI tools. Proactive detective capabilities are being and compliance with regulation and privacy requirements.
implemented across the Group and delivered through a centralised Following the threats, various actions have been taken, including
monitoring hub, to further strengthen oversight of financial crime isolating the affected server, a thorough investigation, and
risks in the areas of procurement and third-party management. customer and authority notifications. Lesson learnt and potential
Risk assessments are performed annually for businesses and offices enhancements have been identified from the review and action
across all locations. Due diligence reviews and assessments against plans have been formulated to address these. The Group has also
Prudential’s financial crime policies are performed as part of the continued to enhance its third-party management framework
Group’s business acquisition process. including the enhanced security due diligence process when
Information security and data privacy risk. Risks related onboarding new business partners and the ongoing monitoring
to malicious attacks on Prudential systems, service disruption, of key business partners.
exfiltration of data, loss of data integrity and the impact on the The key material risks can be summarised into three threat areas:
privacy of our customer data continue to be prevalent, particularly (i) ransomware attacks, (ii) supply chain compromise and (iii)
as the accessibility of attacking tools available to potential service disruption caused by cyber threats. In order for the Group to
adversaries increases. The frequency and sophistication of attacks, manage these risks effectively, the security strategy encompasses
particularly in relation to ransomware, continues to grow globally. the ongoing maturity and development of protective and detective
With a rapidly transforming technological landscape, continued controls, while further expanding and uplifting its ability to react
expansion of Cloud services, including the adoption of a hybrid to and recover from successful attacks on both the Group’s system
multi-cloud strategy partnering with third-party service providers, as well as third-party partner systems.
and the increased scrutiny from regulators against a backdrop
of tightening data privacy regulations across Asia, security and
privacy risks are material at the Group level. To mitigate the risk,
the Group has adopted a holistic risk management approach,
which was designed not only to prevent and disrupt potential
attacks against Prudential systems but to also manage the
recovery process should an attack take place successfully. It is also
well understood that some attacks may still be successful despite
the layered security control defence-in-depth methodology that
Prudential and other mature organisations assume, and so it is
essential that the Group’s security strategy encompasses a cyber
resilience theme focusing on its ability to respond and recover from
an attack in order to maintain its reputation and customer trust.


continued
Non-financial risks
(continued)
The Group’s Information Security and Privacy strategy is structured security practitioners to report potential issues or vulnerabilities
with three key pillars: in our system. In addition, the Group has subscribed to services
from the independent security consultants to continuously monitor
> Defending the nation – To expand coverage and maturity of
our external security posture.
protective and detective security controls in response to both
the changing technology landscape, such as the adoption of The centralised Technology Risk Management team leverages
new Cloud services, as well as the heightened threat actor risks. skills, tools and resources across different technology domains
Within this pillar, continued focus on Africa business units to provide advisory, assurance and operations support for holistic
remains in order to help ensure the same maturity level as technology risk management including information security and
Asia-based business units is achieved. privacy. Based on risk assessments, risk deep dives are performed
> Cyber resilience – To build on a number of existing security on an ongoing basis on different technology domains to provide
processes and formalise the development of an integrated assurance of controls to manage technology risks. The Group
cross-functional incident management framework that is Technology Risk Committee provides Group-wide oversight of
regularly tried and tested. This includes further aligning technology risks, including information security and privacy.
Group incident management plans, business unit incident Technology risk management is also performed locally within
management plans and cyber security incident management business units, with inputs from subject matter experts and
plans along with executing a number of drills and tabletop with oversight from local risk committees. Work continues to be
exercises. The drills and exercises will be conducted at all levels undertaken in 2023 to further enhance the maturity of the hub
including executive committee members and within the business and spoke technology risk operating model which includes
units while bringing in critical key business partners such as organisational structure improvements, policy enhancements
cyber insurance providers and forensic investigation partners. and enriched key risk indicators to provide a quantifiable overlay
> Enabling the digital journey – To focus on introducing and to overseeing and managing technology risks. The Group’s internal
building out key security controls within the digital ecosystem audits also regularly include cyber security as part of its audit
to ensure continued enablement of the organisation’s digital coverage. The Board is briefed at least twice annually on cyber
strategy while improving customer experience and data security security and privacy by the Group Chief Information Security
within the digital ecosystem. Officer (CISO) and is being engaged more closely on cyber
resilience with executive-level cyber tabletop exercises and risk
With the aim to ensure the effectiveness of the Group’s Information workshops conducted in 2022 and continuing in 2023 to ensure
Security and Privacy controls, the Group has established different that members have the means to enable appropriate oversight
processes to review and validate the Information Security and understand the latest threats and regulatory expectations.
and Privacy mechanisms deployed, which include setting up a The Group Information Security, Privacy and Data policies were
dedicated ethical hacking team to perform testing on the systems developed with the aim to ensure compliance with all applicable
to identify potential vulnerabilities, engaging with external laws and regulations, and the ethical use of customer data.
consultants to perform penetration testing on our systems In addition, these policies consider the requirements of a range
and engaging external consultants to perform independent of supervisory guidelines including the international standards
assessments on both our Security Operations Centre and the on information security (ISO 27001/27002) and the US National
Information and Privacy function as a whole to further improve Institute of Standards and Technology’s Cyber Security Framework.
the efficiency of the functions. A Bug Bounty programme has been Localised regulations or legal requirements are addressed by local
established to provide a secured and official channel for external policies or standards.
Risks associated with the Group’s joint ventures and associates

Prudential operates, and in certain markets is required by local between participants. As such, the level of oversight, control and
regulation to operate, through joint ventures and other joint access to management information the Group is able to exercise
ownership or third-party arrangements (including associates). over the extent of the exposure to material risks at these operations
A material proportion of the Group’s business comes from its may be lower compared with the Group’s wholly-owned businesses.
joint venture and associate in the Chinese Mainland and India Further information on the risks to the Group associated with its
respectively. For such operations, the level of control exercisable joint ventures and other shareholders and third parties are included
by the Group depends on the terms of the contractual agreements in the disclosures on Risk factors.

continued
Insurance risks
Insurance risks make up a significant proportion of Prudential’s Persistency risk: The Group’s persistency assumptions reflect
overall risk exposure. The profitability of the Group’s businesses recent experience and expert judgement, especially where a lack
depends on a mix of factors, including levels of, and trends in, of experience data exists, as well as any expected change in future
mortality (policyholders dying), morbidity (policyholders becoming persistency. Persistency risk is managed by appropriate controls
ill or suffering an accident) and policyholder behaviour (variability across the product life cycle. This includes review and revisions to
in how customers interact with their policies, including utilisation product design and incentive structures where required, ensuring
of withdrawals, take-up of options and guarantees and persistency, appropriate training and sales processes, including those ensuring

ie, lapsing/surrendering of policies), and increases in the costs active customer engagement and high service quality, appropriate
of claims over time (claim inflation). The risks associated with customer disclosures and product collaterals, use of customer
adverse experience relative to assumptions associated with retention initiatives and post-sale management through regular
product performance and customer behaviour are detailed in the experience monitoring. Strong risk management and mitigation
disclosures on Risk factors. The Group has appetite for retaining of conduct risk and the identification of common characteristics
insurance risks in the areas where it believes it has expertise and of business with high lapse rates is also crucial. Where appropriate,
operational controls to manage the risk and where it judges it to allowance is made for the relationship (either assumed or observed
be more value creating to do so rather than transferring the risk, historically) between persistency and investment returns. Modelling
and only to the extent that these risks remain part of a balanced this dynamic policyholder behaviour is particularly important when
portfolio of sources of income for shareholders and are compatible assessing the likely take-up rate of options embedded within
with a robust solvency position. certain products.
Whilst Covid-19 has evolved into an endemic disease, the impact Prudential’s insurance risks are managed and mitigated using
of policyholders having deferred medical treatment during the the following:
pandemic (latent morbidity impacts) continues to be experienced
in a number of markets. The implications from other factors such > The Group’s insurance policy, which sets out the Group’s
as long-term post-Covid-19 symptoms (although there is currently insurance risk appetite and required standards for effective
no consensus on the longer-term impact on morbidity) is being insurance risk management by head office and local businesses,
monitored. Inflationary pressures driving higher interest rates may including processes to enable the measurement of the Group’s
insurance risk profile, management information flows and

lead to increased lapses for some guaranteed savings products
where higher levels of guarantees are offered by products of the escalation mechanisms;
Group’s competitors, reflecting consumer demand for returns at the > The Group’s product and underwriting risk policy, which sets out
level of, or exceeding, inflation. A high inflation environment, and the required standards for effective product and underwriting
the broader economic effects of recessionary concerns, may also risk management and approvals for new, or changes to existing,
increase lapses, surrenders and fraud, as well as heighten premium products (including the role of the Group), and the processes to
affordability challenges. enable the measurement of underwriting risk. The policy also
describes how the Group’s Customer Conduct Risk Policy is met in
The principal drivers of the Group’s insurance risk vary across its relation to new product approvals and current and legacy products;
business units. In Hong Kong, Singapore, Indonesia and Malaysia, > The Group’s counter fraud policy (see the Fraud Risk section above);
a significant volume of health and protection business is written > In product design and appropriate processes related to the
and the most significant insurance risks are medical claims inflation management of policyholders’ reasonable expectations;
risk, morbidity risk, and persistency risk:
> The risk appetite statements, limits and triggers;
Medical claims inflation risk: A key assumption in these markets > Using persistency, morbidity and longevity assumptions that
is the rate of medical claims inflation, which is often in excess of reflect recent experience and expectation of future trends, and
general price inflation. Where the cost of medical treatment the use of industry data and expert judgement where appropriate;
increases more than expected, resulting in higher than anticipated > Using reinsurance to mitigate mortality and morbidity risks;
medical claims cost passed on to Prudential, is a key risk. This risk > Ensuring appropriate medical underwriting when policies are
is best mitigated by retaining the right to reprice products and issued and appropriate claims management practices when
appropriate overall claims limits within policies, either per type of claims are received in order to mitigate morbidity risk;
medical treatment or in total across a policy, annually and/or over
the policy lifetime. Medical reimbursement downgrade experience > Maintaining the quality of sales processes, training and using
(where the policyholder reduces the level of the coverage/ initiatives to increase customer retention in order to mitigate
protection in order to reduce premium payments) following any persistency risk;
repricing is also monitored by the Group’s businesses. The risks > The use of mystery shopping to identify opportunities for
to the Group’s ability to reprice are included in the disclosures improvement in sales processes and training;
on Risk factors. > Using product repricing and other claims management
initiatives in order to mitigate morbidity and medical claims
Morbidity risk: Prudential’s morbidity risk is managed through inflation risk; and
prudent product design, underwriting and claims management, > Regular deep dive assessments.
and for certain products, the right to reprice where appropriate.
Prudential’s morbidity assumptions reflect its recent experience
and expectation of future trends for each relevant line of business.


continued
Business concentration risk

Prudential operates in markets in both Asia and Africa via various heavily on specific product types depending on the target
channels and product mix; although largely diversified at the customer segments. Geographically, Greater China (Hong Kong,
Group level, several of these markets are exposed to certain level the Chinese Mainland and Taiwan) region contributes materially
of concentration risks. From a channel concentration perspective, to the Group’s top and bottom lines. To improve business resilience,
some of the Group’s key markets continue to rely on agency the Group continues to look for opportunities to enhance business
and some markets rely on bancassurance. From a product diversification by building multi-market growth engines as part
concentration perspective, some of the Group’s markets focus of its strategy.
Customer conduct risk

Prudential’s conduct of business, especially in the design and Management of Prudential’s conduct risk is key to the Group’s
distribution of its products and the servicing of customers, is crucial strategy. Prudential’s conduct risks are managed and mitigated
in ensuring that the Group’s commitment to meeting its customers’ using the following:
needs and expectations are met. The Group’s customer conduct
risk framework, owned by the Chief Executive Officer, reflects > The Group’s code of business conduct and conduct standards,
management’s focus on customer outcomes. product underwriting and other related risk policies, and
supporting controls including the Group’s fraud risk control
Factors that may increase conduct risks can be found throughout programme;
the product life cycle, from the complexity of the Group’s products > A culture that supports the fair treatment of the customer,
and services to its diverse distribution channels, which include its incentivises the right behaviour through proper remuneration
agency workforce, virtual face-to-face sales and sales via online structures, and provides a safe environment to report conduct
digital platforms. Prudential has developed a Group Customer risk-related issues via the Group’s internal processes and the
Conduct Risk Policy which sets out five customer conduct standards Speak Out program;
that the business is expected to meet, being: > Distribution controls, including monitoring programmes relevant
1. Treat customers fairly, honestly and with integrity; to the type of business (insurance or asset management),
2. Provide and promote products and services that meet customer distribution channel (agency, bancassurance, or digital) and
needs, are clearly explained and that deliver real value; ecosystem, to help ensure sales are conducted in a manner
3. Manage customer information appropriately, and maintain that considers the fair treatment of customers within digital
the confidentiality of customer information; environments;
4. Provide and promote high standards of customer service; and > Quality of sales processes, services and training, and using other
5. Act fairly and timely to address customer complaints and any initiatives such as special requirements for vulnerable customers,
errors found. to improve customer outcomes;
> Appropriate claims management and complaint handling
Prudential manages conduct risk via a range of controls that are practices; and
assessed through the Group’s conduct risk assessment framework,
reviewed within its monitoring programmes, and overseen within > Regular deep dive assessments on, and monitoring of,
reporting to its boards and committees. conduct risks and periodic conduct risk assessments.

Risks related to regulatory and legal compliance
Prudential operates in highly regulated markets and under the Risk management and mitigation of regulatory risk at Prudential
ever-evolving requirements and expectations of diverse and includes:
dynamic regulatory, legal and tax regimes which may impact its
business or the way it is conducted. > Proactively adapting and complying with the latest regulatory
developments;
The complexity of legal and regulatory (including sanctions) > Group and business unit-level compliance oversight and
compliance continues to evolve and increase, representing a risk-based testing in respect of adherence with regulations;
challenge for international businesses. Compliance with the > Close monitoring and assessment of our business and regulatory
Group’s legal or regulatory obligations (including in respect of environment and strategic risks;
international sanctions) in one jurisdiction may conflict with the

> The explicit consideration of risk themes in strategic decisions;
law or policy objectives of another jurisdiction, or may be seen
as supporting the law or policy objectives of one jurisdiction over > Ongoing engagement with national regulators, government
another, creating additional legal, regulatory compliance and policy teams and international standard setters; and
reputational risks. > Compliance oversight to ensure adherence with in-force
regulations and management of new regulatory developments,
These risks may be increased where the scope of regulatory including those associated with greenwashing risk arising from
requirements and obligations are uncertain, and where specific exaggerated, misleading or unsubstantiated sustainability-
cases applicable to the Group are complex. Regulatory risks cover related claims.
a broad range of risks including changes in government policy and
legislation, capital control measures, and new regulations at either
a national or international level. The breadth of local and Group-
wide regulatory arrangements presents the risk that requirements
are not fully met, resulting in specific regulator interventions or
actions including retrospective interpretation of standards by
regulators.
As the industry’s use of emerging technological tools and digital
services increases, this is likely to lead to new and unforeseen
regulatory issues and the Group is monitoring emerging regulatory
developments and standards on the governance and ethical and

responsible use of technology and data. In certain jurisdictions in
which Prudential operates there are a number of ongoing policy
initiatives and regulatory developments which will impact the
way Prudential is supervised.
These developments continue to be monitored by the Group at
a national and global level and these considerations form part of
the Group’s ongoing engagement with government policy teams,
industry groups and regulators. Further information on specific
areas of regulatory and supervisory focus and changes are included
in the disclosures on Risk factors.
Notes
1 Reflecting products that are classified as Variable Fee Approach only.
2 With the exception of investments backing the shareholders’ 10 per cent share of the estate within the Hong Kong participating fund.
3 Excluding assets held to cover linked liabilities and those of the consolidated investment funds.
4 Based on middle rating from Standard & Poor’s, Moody’s and Fitch. If unavailable, NAIC and other external ratings and then internal ratings have been used.
5 Source of segmentation: Bloomberg Sector, Bloomberg Group and Merrill Lynch. Anything that cannot be identified from the three sources noted is classified as other.

IFRS financial
results
50 Index to Group IFRS financial results
94 Statement of Directors’ responsibilities
95 Independent review report to Prudential plc

49
Index to Group IFRS financial results
Page
Condensed consolidated income statement 51

Condensed consolidated statement of comprehensive income 52
Condensed consolidated statement of changes in equity 53
Condensed consolidated statement of financial position 55
Condensed consolidated statement of cash flows 56
Section Page Section Page
A Basis of preparation and accounting policies 57 C Financial position 77

A1 Basis of preparation and exchange rates 57 C1 Group assets and liabilities 77
A2 New accounting pronouncements in 2023 58 C1.1 Group investments by business type 77
A2.1 Adoption of IFRS 17 and IFRS 9 58 C1.2 Other assets and liabilities 80
A2.2 Adoption of other new accounting 62 C2 Fair value measurement 80
pronouncements C2.1 Determination of fair value 80
A3 Critical accounting policies, estimates and 62 C2.2 Fair value measurement hierarchy of Group 80
judgements assets and liabilities
C2.3 Additional information on financial instruments 83
B Earnings performance 69
C3 Insurance and reinsurance contracts 84
B1 Analysis of performance by segment 69
C3.1 Group overview 84
B1.1 Segment results 69
C3.2 Analysis of movements in insurance and 86
B1.2 Determining operating segments and 70
reinsurance contract balances by
performance measure of operating segments
measurement component
B1.3 Analysis of adjusted operating profit by driver 71
C3.3 Contractual service margin 88
B1.4 Revenue 72
C3.4 Products and determining contract liabilities 89
B2 Tax charge 74
C4 Intangible assets 91
B3 Earnings per share 75
C4.1 Goodwill 91
B4 Dividends 76
C4.2 Other intangible assets 91
C5 Borrowings 92
C5.1 Core structural borrowings of shareholder- 92
financed businesses
C5.2 Operational borrowings 92
C6 Share capital, share premium and own shares 92
D Other Information 93
D1 Corporate transactions 93
D2 Contingencies and related obligations 93
D3 Post balance sheet events 93
D4 Related party transactions 93
Statement of Directors’ responsibilities 94

Independent review report to Prudential plc 95

Condensed consolidated income statement
2023 $m 2022* $m
Note Half year Half year Full year
Insurance revenue B1.4 4,591 4,159 8,549

Insurance service expenses (3,489) (2,879) (6,267)
Net expense from reinsurance contracts held (83) (22) (105)
Insurance service result 1,019 1,258 2,177
Investment return B1.4 7,171 (23,872) (29,380)
Fair value movements on investment contract liabilities (23) 67 67
Net insurance finance (expense) income (6,496) 21,707 27,430
Net investment result 652 (2,098) (1,883)
Other revenue 176 204 436

B1.4
Non-insurance expenditure (446) (592) (1,019)
Finance costs: interest on core structural borrowings of shareholder-financed businesses (85) (103) (200)
Gain attaching to corporate transactions D1 – 62 55
Share of loss from joint ventures and associates, net of related tax (73) (54) (85)
Profit (loss) before tax (being tax attributable to shareholders’ and policyholders’ returns)note 1,243 (1,323) (519)
Tax charge attributable to policyholders’ returns (68) (24) (124)
Profit (loss) before tax attributable to shareholders’ returns B1.1 1,175 (1,347) (643)
Total tax charge attributable to shareholders’ and policyholders’ returns B2 (296) (182) (478)
Remove tax charge attributable to policyholders’ returns 68 24 124
Tax charge attributable to shareholders’ returns (228) (158) (354)
Profit (loss) for the period 947 (1,505) (997)
Attributable to:
Equity holders of the Company 944 (1,508) (1,007)
Non-controlling interests 3 3 10

2023 2022*
Earnings per share (in cents) Note Half year Half year Full year
Based on profit (loss) attributable to equity holders of the Company: B3

Basic 34.5¢ (55.1)¢ (36.8)¢
Diluted 34.5¢ (55.1)¢ (36.8)¢
* The Group has adopted IFRS 9, ‘Financial Instruments’ and IFRS 17, ‘Insurance Contracts’ from 1 January 2023 as described in note A2.1. Accordingly, the comparative results and the related
notes have been re-presented from those previously published.
Note
This measure is the formal profit before tax measure under IFRS. It is not the result attributable to shareholders principally because total corporate tax of the Group includes those taxes on the income
of consolidated with-profits and unit-linked funds that, through adjustments to benefits, are borne by policyholders. These amounts are required to be included in the tax charge under IAS 12.
Consequently, the IFRS profit before tax measure is not representative of pre-tax profit attributable to shareholders.
2023 2022
Dividends per share (in cents) Note Half year Half year Full year
Dividends relating to reporting period: B4

First interim ordinary dividend 6.26¢ 5.74¢ 5.74¢
Second interim ordinary dividend – – 13.04¢
Total relating to reporting period 6.26¢ 5.74¢ 18.78¢
Dividends paid in reporting period: B4
Current year first interim dividend – – 5.74¢
Second interim ordinary dividend for prior year 13.04¢ 11.86¢ 11.86¢
Total paid in reporting period 13.04¢ 11.86¢ 17.60¢

Condensed consolidated statement of comprehensive income
2023 $m 2022* $m

Other comprehensive income (loss):
Exchange movements arising during the period (199) (539) (613)
Valuation movements on retained interest in Jackson classified as available-for-sale securities
under IAS 39 note (i) – (247) (187)
Total items that may be reclassified subsequently to profit or loss note (ii) (199) (786) (800)
Valuation movements on retained interest in Jackson classified as FVOCI securities under IFRS 9 8 – –
Total items that will not be reclassified subsequently to profit or loss 8 – –
Total comprehensive income (loss) for the period 756 (2,291) (1,797)
Attributable to:
Equity holders of the Company 767 (2,284) (1,797)
Non-controlling interests (11) (7) –
Total comprehensive income (loss) for the period 756 (2,291) (1,797)
* The Group has adopted IFRS 9, ‘Financial Instruments’ and IFRS 17, ‘Insurance Contracts’ from 1 January 2023 as described in note A2.1. Accordingly, the comparative results have been
re-presented from those previously published.
Notes
(i) On the adoption of IFRS 9 at 1 January 2023, the Group has elected to measure its retained interest in the equity securities of Jackson at fair value through other comprehensive income (FVOCI).
The Group has subsequently disposed of its remaining interest in Jackson. In the 2022 comparatives above, these securities were measured at available-for-sale under IAS 39.
(ii) There are no related taxes on the other comprehensive income components of the Group.

Condensed consolidated statement of changes in equity
Period ended 30 Jun 2023 $m
Fair value
reserve Share- Non-
Share Share Retained Translation under holders’ controlling Total
Note capital premium earnings reserve IFRS 9 equity interests equity
Reserves
Profit for the period – – 944 – – 944 3 947
Other comprehensive income (loss) – – – (185) 8 (177) (14) (191)
Total comprehensive income (loss) for the
period – – 944 (185) 8 767 (11) 756
Transactions with owners of the Company

Dividends B4 – – (361) – – (361) (4) (365)
Transfer of fair value reserve following disposal
of investment in Jackson – – 71 – (71) – – –
Reserve movements in respect of share-based
payments – – (6) – – (6) – (6)
Effect of transactions relating to non-
controlling interests – – (9) – – (9) – (9)
New share capital subscribed C6 1 3 – – – 4 – 4
Movement in own shares in respect of
share-based payment plans – – 33 – – 33 – 33
Net increase (decrease) in equity 1 3 672 (185) (63) 428 (15) 413
Balance at beginning of period 182 5,006 10,653 827 63 16,731 167 16,898
Balance at end of period 183 5,009 11,325 642 – 17,159 152 17,311
Period ended 30 Jun 2022 $m
Available
-for-sale

securities
reserves Share- Non-
Note capital premium earnings reserve IAS 39 equity interests equity
Reserves
Profit (loss) for the period – – (1,508) – – (1,508) 3 (1,505)
Other comprehensive loss – – – (529) (247) (776) (10) (786)
Total comprehensive loss for the period – – (1,508) (529) (247) (2,284) (7) (2,291)
Dividends B4 – – (320) – – (320) (5) (325)
payments – – 15 – – 15 – 15
controlling interests – – (16) – – (16) – (16)
share-based payment plans – – (4) – – (4) – (4)
Net decrease in equity – – (1,833) (529) (247) (2,609) (12) (2,621)
Balance at beginning of period:
As previously reported 182 5,010 10,216 1,430 250 17,088 176 17,264
Effect of initial application of IFRS 17 and
classification overlay for IFRS 9, net of tax – – 1,848 – – 1,848 (1) 1,847
As restated after effect of changes 182 5,010 12,064 1,430 250 18,936 175 19,111
Balance at end of period 182 5,010 10,231 901 3 16,327 163 16,490

Condensed consolidated statement of changes in equity / continued
Year ended 31 Dec 2022 $m
Available
-for-sale
securities
reserves Share- Non-
Note capital premium earnings reserve IAS 39 equity interests equity
Reserves
Profit (loss) for the year – – (1,007) – – (1,007) 10 (997)
Other comprehensive loss – – – (603) (187) (790) (10) (800)
Total comprehensive loss for the period – – (1,007) (603) (187) (1,797) – (1,797)
Dividends B4 – – (474) – – (474) (8) (482)
payments – – 24 – – 24 – 24
controlling interests – – 49 – – 49 – 49
New share capital subscribed C6 – (4) – – – (4) – (4)
share-based payment plans – – (3) – – (3) – (3)
Net decrease in equity – (4) (1,411) (603) (187) (2,205) (8) (2,213)
Balance at beginning of year:
As previously reported 182 5,010 10,216 1,430 250 17,088 176 17,264
Effect of initial application of IFRS 17 and
classification overlay for IFRS 9, net of tax – – 1,848 – – 1,848 (1) 1,847
As restated after effect of changes 182 5,010 12,064 1,430 250 18,936 175 19,111
Balance at end of year 182 5,006 10,653 827 63 16,731 167 16,898

Condensed consolidated statement of financial position
2023 $m 2022 $m
30 Jun 31 Dec 1 Jan

Note note (i) note (i)
Assets
Goodwill C4.1 879 890 907
Other intangible assets C4.2 3,686 3,884 4,015
Property, plant and equipment C1.2 396 437 495
Insurance contract assets C3.1 1,167 1,134 1,250
Reinsurance contract assets C3.1 2,023 1,856 2,787
Deferred tax assets 168 140 132
Current tax recoverable 25 18 20
Accrued investment income C1.2 1,017 983 1,017

Other debtors C1.2 1,035 968 955
Investment properties C1.1 38 37 38
Investments in joint ventures and associates accounted for using the equity method 2,078 2,259 2,698
Loans C1.1 574 590 771
Equity securities and holdings in collective investment schemes note (ii) C1.1 60,508 57,679 61,601
Debt securities note (ii) C1.1 80,430 77,016 99,154
Derivative assets C1.1 458 569 481
Deposits C1.1 5,056 6,275 4,741
Cash and cash equivalents C1.1 5,920 5,514 7,170
Total assets 165,458 160,249 188,232
Equity
Shareholders’ equity 17,159 16,731 18,936
Non-controlling interests 152 167 175
Total equity 17,311 16,898 19,111
Liabilities
Insurance contract liabilities 134,096 126,242 149,798

C3.1
Reinsurance contract liabilities C3.1 950 1,175 1,254
Investment contract liabilities without discretionary participation features 716 663 722
Core structural borrowings of shareholder-financed businesses C5.1 3,949 4,261 6,127
Operational borrowings C5.2 802 815 861
Obligations under funding, securities lending and sale and repurchase agreements 617 582 223
Net asset value attributable to unit holders of consolidated investment funds 2,683 4,193 5,664
Deferred tax liabilities 1,214 1,139 1,167
Current tax liabilities 247 208 185
Accruals, deferred income and other creditors C1.2 2,277 2,866 2,624
Provisions 129 206 234
Derivative liabilities 467 1,001 262
Total liabilities 148,147 143,351 169,121
Total equity and liabilities 165,458 160,249 188,232
Notes
(i) The Group has adopted IFRS 9, ‘Financial Instruments’ and IFRS 17, ‘Insurance Contracts’ from 1 January 2023 as described in note A2.1. Accordingly, the 31 December 2022 and 1 January
2022 comparative statements of financial position and related notes have been re-presented from those previously published.
(ii) Included within equity securities and holdings in collective investment schemes and debt securities as at 30 June 2023 are $1,556 million of lent securities and assets subject to repurchase
agreements (31 December 2022: $1,571 million).

Condensed consolidated statement of cash flows
2023 $m 2022* $m
Note Half year Half year Full year
Cash flows from operating activities

Profit (loss) before tax (being tax attributable to shareholders’ and policyholders’ returns) 1,243 (1,323) (519)
Adjustments to profit (loss) before tax for:
Non-cash movements in operating assets and liabilities (71) 2,968 1,577
Investment income and interest payments included in profit before tax (2,420) (2,065) (3,912)
Operating cash items 2,252 1,981 3,647
Other non-cash items 263 155 285
Net cash flows from operating activities note (i) 1,267 1,716 1,078
Cash flows from investing activities
Purchases of property, plant and equipment (18) (14) (34)
Acquisition of business and intangibles note (ii) (197) (221) (298)
Disposal of Jackson shares 273 171 293
Net cash flows from investing activities 58 (64) (39)
Cash flows from financing activities
Structural borrowings of shareholder-financed operations: note (iii) C5.1
Issuance of debt, net of costs – 346 346
Redemption of debt (371) (2,075) (2,075)
Interest paid (98) (117) (204)
Payment of principal portion of lease liabilities (49) (56) (101)
Equity capital:
Issues of ordinary share capital C6 4 – (4)
External dividends:
Dividends paid to the Company’s shareholders B4 (361) (320) (474)
Dividends paid to non-controlling interests (4) (5) (8)
Net cash flows from financing activities (879) (2,227) (2,520)
Net increase (decrease) in cash and cash equivalents 446 (575) (1,481)
Cash and cash equivalents at beginning of period 5,514 7,170 7,170
Effect of exchange rate changes on cash and cash equivalents (40) (180) (175)
Cash and cash equivalents at end of period 5,920 6,415 5,514
* The Group has adopted IFRS 9, ‘Financial Instruments’ and IFRS 17, ‘Insurance Contracts’ from 1 January 2023 as described in note A2.1. Accordingly, the comparative results have been
re-presented from those previously published.
Notes
(i) Included in net cash flows from operating activities are dividends from joint ventures and associates of $62 million (half year 2022: $60 million; full year 2022: $112 million).
(ii) Cash flows from acquisition of business and intangibles include amounts paid for distribution rights. There were no acquisitions of businesses in the period.
(iii) Structural borrowings of shareholder-financed businesses exclude borrowings to support short-term fixed income securities programmes, non-recourse borrowings of investment subsidiaries of
shareholder-financed businesses and other borrowings of shareholder-financed businesses. Cash flows in respect of these borrowings are included within cash flows from operating activities. The
changes in the carrying value of the structural borrowings of shareholder-financed businesses for the Group are analysed below:
Cash movements $m Non-cash movements $m

Balance at Balance at
beginning Foreign end of
of period Issuance Redemption exchange Other period
$m of debt of debt movement movements $m
30 Jun 2023 4,261 – (371) 56 3 3,949

30 Jun 2022 6,127 346 (2,075) (137) 5 4,266
31 Dec 2022 6,127 346 (2,075) (147) 10 4,261

A Basis of preparation and accounting policies
A1 Basis of preparation and exchange rates
These consolidated interim financial statements (‘interim financial statements’) for the six months ended 30 June 2023 have been prepared in
accordance with both IAS 34 ‘Interim Financial Reporting’ as issued by the IASB and IAS 34 as adopted for use in the UK. The Group’s policy for
preparing this interim financial information is to use the accounting policies adopted by the Group in its last consolidated financial statements, as
updated by any changes in accounting policies it intends to make in its next consolidated financial statements as a result of new or amended IFRS
and other policy improvements. At 30 June 2023, there were no unadopted standards effective for the period ended 30 June 2023 which
impacted the interim financial statements of the Group, and there were no differences between UK-adopted international accounting standards
and IFRS Standards as issued by the IASB in terms of their application to the Group.
The Group has adopted IFRS 17, ‘Insurance Contracts’ and IFRS 9, ‘Financial Instruments’ (including any consequential amendments to other
standards) as issued by the IASB and as adopted for use in the UK from 1 January 2023, as discussed in note A2.1. The transition date of the Group

for IFRS 17 was 1 January 2022. Except for the changes from the adoption of these two standards and the new and amended IFRS Standards as
described in note A2.2, the accounting policies applied by the Group in determining the IFRS financial results in these interim financial statements
are the same as those previously applied in the Group’s consolidated financial statements for the year ended 31 December 2022 as disclosed in
the 2022 annual report.
The IFRS financial results for half year 2023 and half year 2022 are unaudited. The 2022 half year and full year IFRS financial results have been
restated for the effect of a retrospective application of IFRS 17 and the classification overlay adjustment for IFRS 9, which were effective on
1 January 2023. Except for this restatement, the full year IFRS financial results have been derived from the 2022 statutory accounts. An additional
statement of financial position as at 1 January 2022 is presented in these consolidated financial statements due to the retrospective application
of IFRS 17 (refer to note A2.1 below for details on the effect of the retrospective application). The Group’s previous auditors, KPMG, reported on the
2022 statutory accounts which have been delivered to the Registrar of Companies. The auditors’ report on the 2022 statutory accounts was: (i)
unqualified; (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report;
and (iii) did not contain a statement under section 498(2) or (3) of the Companies Act 2006.
Going concern basis of accounting

The Directors have made an assessment of going concern covering a period of at least 12 months from the date these interim financial
statements are approved. In making this assessment, the Directors have considered both the Group’s current performance, solvency and liquidity
and the Group’s business plan taking into account the Group’s principal risks, and the mitigations available to address them, as well as the results
of the Group’s stress and scenario testing.

Based on the above, the Directors have a reasonable expectation that the Company and the Group have adequate resources to continue their
operations for a period of at least 12 months from the date these interim financial statements are approved. No material uncertainties that may
cast significant doubt on the ability of the Group to continue as a going concern have been identified. The Directors therefore consider it
appropriate to continue to adopt the going concern basis of accounting in preparing these interim financial statements for the period ended
30 June 2023.
Exchange rates
The exchange rates applied for balances and transactions in currencies other than the presentation currency of the Group, US dollars (USD) were:
Closing rate at period end Average rate for the period to date
USD : local currency 30 Jun 2023 31 Dec 2022 1 Jan 2022 Half year 2023 Half year 2022 Full year 2022
Chinese yuan (CNY) 7.26 6.95 6.37 6.93 6.48 6.73

Hong Kong dollar (HKD) 7.84 7.81 7.80 7.84 7.83 7.83
Indian rupee (INR) 82.04 82.73 74.34 82.22 76.23 78.63
Indonesian rupiah (IDR) 14,992.50 15,567.50 14,252.50 15,042.54 14,453.52 14,852.24
Malaysian ringgit (MYR) 4.67 4.41 4.17 4.46 4.27 4.40
Singapore dollar (SGD) 1.35 1.34 1.35 1.34 1.37 1.38
Taiwan dollar (TWD) 31.14 30.74 27.67 30.56 28.73 29.81
Thai baht (THB) 35.33 34.56 33.19 34.20 33.73 35.06

UK pound sterling (GBP) 0.79 0.83 0.74 0.81 0.77 0.81
Vietnamese dong (VND) 23,585.00 23,575.00 22,790.00 23,521.79 22,925.22 23,409.87
Certain notes to the financial statements present comparative information at constant exchange rates (CER), in addition to the reporting at actual
exchange rates (AER) used throughout the interim financial statements. AER are actual historical exchange rates for the specific accounting
period, being the average rates over the period for the income statement and the closing rates at the balance sheet date for the statement of
financial position. CER results are calculated by translating prior period results using the current period foreign exchange rate, ie current period
average rates for the income statement and current period closing rates for the statement of financial position.

A Basis of preparation and accounting policies / continued
A2 New accounting pronouncements in 2023

A2.1 Adoption of IFRS 17 and IFRS 9
The Group adopted IFRS 17 ‘Insurance Contracts’ and IFRS 9 ‘Financial Instruments’, including any consequential amendments to other
standards, from 1 January 2023.
IFRS 17, ‘Insurance contracts’

IFRS 17 introduces significant changes to the way insurance and reinsurance contracts are accounted for, albeit the scope of IFRS 17 and IFRS 4 is
very similar. Therefore, nearly all of the Group’s insurance and investment contracts with discretionary participation features (DPF) accounted
under IFRS 4 are now accounted under IFRS 17.
IFRS 4 permitted insurers to continue to use the statutory basis of accounting for insurance assets and liabilities that existed in their jurisdictions
prior to January 2005. IFRS 17 replaces this with a new measurement model that establishes principles for the recognition, measurement,
presentation and disclosure of insurance contracts, reinsurance contracts and investment contracts with DPF.
Insurance contracts are aggregated into groups for measurement purposes. Groups of insurance contracts are determined by identifying
portfolios of insurance contracts, each comprising contracts subject to similar risks and managed together, and dividing each portfolio into
annual cohorts (ie by year of issue) and each annual cohort into groups based on the profitability of contracts. Portfolios of reinsurance contracts
held are assessed for aggregation separately from portfolios of insurance contracts issued.
When determining “similar risks” the Group does not divide risks within a contract, eg riders sold under a single contract would not be split by risk
type. The Group have therefore identified three broad categories of risks referred to as “dominant” risks, namely, protection, investment and to a
less material extent longevity. The requirement “managed together” is assessed within the geographical boundary of each local business unit.
Each ring-fenced fund is considered to be managed separately.
Under IFRS 17 groups of contracts are measured on initial recognition as the total of:
> Fulfilment cash flows, comprising the best estimate of the present value of future cash flows within the contract boundary that are expected to
arise and an explicit risk adjustment for non-financial risk; and
> A contractual service margin (CSM) that represents the deferral of any day-one gains arising on initial recognition.
Day-one losses, any subsequent losses and reversal of those losses arising from groups of insurance contracts are recognised directly in the income
statement. For groups of reinsurance contracts held, any net gains or losses at initial recognition are recognised as CSM unless the net cost of
purchasing reinsurance relates to past events, in which case such net cost is recognised immediately in the income statement.
Under IFRS 17 insurance contracts are measured under the General Measurement Model (GMM), Variable Fee Approach (VFA) or Premium
Allocation Approach (PAA). The Group predominantly uses the VFA and GMM, depending on the specific characteristics of the insurance
contracts. The Group makes very limited use of the PAA for some small portfolios of short duration contracts. Reinsurance contracts held are
measured under the GMM.
Approximately 72 per cent of the CSM (including joint ventures and associates and net of reinsurance) at transition was calculated under the
VFA and relates to the Group’s with-profits and shareholder-backed participating products and unit-linked products with a low proportion of
protection riders. The remaining approximately 28 per cent of the CSM at transition was calculated under the GMM and includes the Group’s
non-profit protection products and unit-linked products with a high proportion of protection riders.
The fulfilment cash flows are updated each reporting date to reflect current conditions. For contracts with direct participating features which
are accounted for under the VFA, the CSM represents the variable fee to shareholders and it is adjusted to reflect the effect of changes in
economics as well as experience variances and/or assumptions changes that relate to future services. For contracts accounted for under GMM, the
CSM is accreted using the locked-in discount rates and only adjusted to reflect the effect of non-economic experience variances and/or
assumptions changes that relate to future services. The adjustments to the CSM are determined using the locked-in discount rates. Further
information on the subsequent measurement of the CSM is contained within note C3.4(a).
IFRS 17 is applied retrospectively unless impractical to do so. The effect of adopting IFRS 17 retrospectively adjusts shareholders’ equity as at
the date of transition of 1 January 2022. At the transition date, the opening balance sheet for IFRS 17 is established, as set out later in this note.
With the adoption of IFRS 17, certain line items in the Group’s consolidated statement of financial position have been replaced with new line
items. For example, the Group now presents separately the carrying amount of portfolios of:
> Insurance contracts issued that are assets;
> Insurance contracts issued that are liabilities;
> Reinsurance contracts held that are assets; and
> Reinsurance contracts held that are liabilities.
Further, the line items in the consolidated income statement have been changed significantly compared with reporting under IFRS 4. In
accordance with the IFRS 17 requirements, the following line items are no longer reported: Gross premiums earned, Outward reinsurance
premiums, Benefits and claims, Reinsurers’ share of benefits and claims, Movements in unallocated surplus of with-profits funds and Acquisition
costs. Those are replaced with the following IFRS 17 line items:
> Insurance revenue;
> Insurance service expenses;
> Net income (expense) from reinsurance contracts held; and
> Net insurance finance income (expenses).

Approach to transition to IFRS 17
Transition refers to the determination of the opening balance sheet for the first year of comparative information presented under IFRS 17 (ie at
1 January 2022). The future cash flows and risk adjustment are measured on a current basis in the same manner as they would be calculated for
subsequent measurement. The key component of transition is therefore the determination of the CSM.
The standard requires IFRS 17 to be applied retrospectively (the ‘Full Retrospective Approach’) unless impracticable. If a fully retrospective
approach is impracticable there is an option to choose either a Modified Retrospective Approach or a Fair Value Approach. If reasonable and
supportable information necessary to apply the modified retrospective approach is not available, the fair value approach must be applied.
The contractual service margin of the groups of insurance contracts transitioned under retrospective approaches (ie full retrospective approach
and modified retrospective approach) has been calculated as if the Group had only prepared annual financial statements before the transition
date (ie transition CSM has been measured using a year-to-date approach).
(a) Full Retrospective Approach (FRA)

Under the FRA, each group of insurance contracts has been identified, recognised and measured as if IFRS 17 had always applied. The CSM was
calculated at initial recognition of a group of contracts based on the facts and circumstances at that time (ie without use of hindsight). This CSM
was then rolled forward to the transition date in line with the requirements of the standard.
(b) Modified Retrospective Approach (MRA)

The objective of the MRA is to achieve the closest possible outcome to retrospective application possible using reasonable and supportable
information without undue cost and effort. A number of specific modifications are permitted under the MRA. The Group has adopted the
following modifications:
> To use information at the transition date to identify insurance contract groups;
> To use information at the transition date to assess eligibility for the variable fee approach; and
> To use information at the transition date to identify discretionary cash flows.
(i) General Measurement Model (GMM)

Under the MRA for GMM business, the cash flows at the date of initial recognition of a group of insurance contracts have been estimated as the
cash flows at the earliest available date (ie the first year when the FRA is practicable, referred to as the “earlier date”), adjusted by the cash flows
that are known to have occurred between these two dates. A number of further specific modifications are permitted. The Group has adopted the
following modifications:

> To estimate the risk adjustment at the date of initial recognition as the risk adjustment at the earlier date adjusted by the expected release of
risk before that date based on the risk adjustment release pattern for similar contracts;
> To estimate CSM amortisation in line with run-off of the coverage units; and
> If there is a loss component at initial recognition, to estimate the amount allocated to the loss component before the transition date using a
systematic allocation consistent with the modifications adopted above.
Discount rates at the date of initial recognition were determined using observable market data at that date.
(ii) Variable Fee Approach (VFA)

Under the MRA for Variable Fee Approach business, the contractual service margin at the transition date for a group of insurance contracts has
been determined as:
> The total fair value of the underlying items at that date; minus
> The fulfilment cash flows at that date; plus or minus
> An adjustment for:
– Amounts charged to policyholders before that date;
– Amounts paid before that date not varying with underlying items;
– The change in the risk adjustment caused by the release from risk before that date; and minus
> An estimate of the amounts that would have been recognised in profit or loss for services provided before the transition date by comparing the
remaining coverage units at the transition date with the coverage units provided under the group of contracts before the transition date.
In implementing this approach, the amounts charged to policyholders, the amounts paid not varying with underlying items and coverage units
have been adjusted for the time value of money.

A2 New accounting pronouncements in 2023 continued

(c) Fair Value Approach (FVA)
The insurance contracts of the Group under the FVA generally represent groups of contracts that were written many years ago where suitable
historical information required to apply the retrospective transition approaches is no longer practicably available. Under the FVA, the CSM at the
transition date is the difference between the fair value of the insurance contracts, determined in accordance with IFRS 13 Fair Value
Measurement, and the fulfilment cash flows at that date.
The fair value of insurance contracts has been determined as the present value of best estimate expected future cash flows plus an additional
amount representing compensation a market participant would require to enter into a transaction to transfer the liability associated with the
insurance contracts at the transition date. The return required by a market participant includes an allowance for both financial risk and uncertainty
in non-financial risk.
The fair value has been based on the same scope of cash flows as are included in the calculation of the best estimate liability. In particular, the
same contract boundaries are assumed in the calculation of the fair value and best estimate liability. However, the measurement of those cash
flows need not be the same.
A number of specific modifications are permitted under the FVA. The Group has adopted the following modifications:
> To use information at the transition date to identify groups of insurance contracts;
> To use information at the transition date to assess eligibility for the VFA;
> To use information at the transition date to identify discretionary cash flows;
> To use information at the transition date to assess whether a contract meets the definition of an investment contract with DPF; and
> To group annual cohorts of business.
IFRS 9, ‘Financial Instruments’

IFRS 9 replaced IAS 39 Financial Instruments: Recognition and Measurement for annual periods beginning on or after 1 January 2018. The Group
met the eligibility criteria, under the amendments to IFRS 4 to apply the temporary exemption from IFRS 9, deferring the initial application date
of IFRS 9 to align with the initial application of IFRS 17.
The adoption of IFRS 9 has affected the following three areas:
The classification and the measurement of financial assets and liabilities

IFRS 9 redefines the classification of financial assets. Based on the way in which the assets are managed in order to generate cash flows and their
contractual cash flow characteristics (whether the cash flows represent ‘solely payments of principal and interest’), financial assets are classified
into one of the following categories: amortised cost, fair value through other comprehensive income (FVOCI) and fair value through profit or loss
(FVTPL). An option is also available at initial recognition to irrevocably designate a financial asset as at FVTPL if doing so eliminates or significantly
reduces accounting mismatches. The Company has made the election under IFRS 9 to measure its retained interest in Jackson’s equity securities
at FVOCI. Under this designation, only dividend income from this retained interest is recognised in the profit or loss of the Company. Unrealised
gains and losses are recognised in other comprehensive income and there is no recycling to the profit or loss on derecognition.
A table explaining the original measurement categories under IAS 39 and the new measurement categories under IFRS 9 for each class of the
Group’s financial assets and financial liabilities as at 1 January 2023 is set out in note C2.3.
The calculation of the impairment charge relevant for financial assets held at amortised cost or FVOCI
A new impairment model based on an expected credit loss approach replaced the incurred loss impairment model under IAS 39, resulting in
earlier recognition of credit losses compared with IAS 39. This aspect is the most complex area of IFRS 9 and involves significant judgements and
estimation processes.
As discussed above, the vast majority of the financial investments of the Group are held at FVTPL to which these requirements do not apply.
Accordingly, no significant amount of additional impairment was recognised by the Group under the expected credit loss approach as a result of
the adoption of IFRS 9.
The hedge accounting requirements which are more closely aligned with the risk management activities
The Group has not applied hedge accounting treatment under IAS 39 and therefore, there is no impact in this area for the Group upon the
adoption of IFRS 9.

Effect of adoption of IFRS 17 and IFRS 9
The adoption of IFRS 17 has significant changes to the accounting for insurance and reinsurance contracts, as discussed above. The Group’s
approach to transition to IFRS 17 is set out in the preceding section. The Group has restated the 2022 comparative amounts and presented a
restated consolidated statement of financial position as at 1 January 2022.
The implementation of IFRS 9 has an insignificant impact on the Group’s financial statements. As permitted by IFRS 9, the Group has not
restated the comparatives on initial application of the standard but the Group is taking advantage of the classification overlay as permitted by the
Amendment to IFRS 17, ‘Initial Application of IFRS 17 and IFRS 9 – Comparative Information’ issued in December 2021. In accordance with this
amendment, the balance sheet at 1 January 2022 reflects the change in classification of certain debt securities to amortised cost from fair value
through profit and loss, certain loans to fair value through profit and loss from amortised cost and the recognition of IFRS 9 expected credit losses
for certain mortgage loans that continue to be classified as amortised cost. With the exception of these changes, for which the overall net asset
impact is insignificant at less than $5 million, the consolidated statement of financial position as of 1 January 2022 as restated under IFRS 17 has
been presented to reflect the classification and measurement under IAS 39.

Consolidated statement of financial position at transition date 1 January 2022
The following table shows the Group’s consolidated statement of financial position as at 1 January 2022 restated under the IFRS 17 basis and the
summarised effects of the adoption of the new standard.
Effects of adoption of IFRS 17 $m

At 31 Dec 2021 At 1 Jan 2022
(as reported Presentation Measurement (as restated
under IFRS 4) changes changes under IFRS 17)
$m note (i) note (ii) $m
Assets
Goodwill 907 – – 907
Deferred acquisition costs and other intangible assets:
Deferred acquisition costs 2,815 (39) (2,776) –
Other intangible assets 4,043 – (28) 4,015
6,858 (39) (2,804) 4,015
Insurance contract assets n/a – 1,250 1,250
Reinsurance contract assets 9,753 (22) (6,944) 2,787
Deferred tax assets 266 (134) – 132
Other non-investment and non-cash assets 3,448 (1,022) 61 2,487

Investment properties 38 – – 38
Investments in joint ventures and associates accounted for using the equity method 2,183 – 515 2,698
Total financial investments:
Policy loans 1,733 (1,733) – –
Other loans 829 – (58) 771
Equity securities and holdings in collective investment schemes 61,601 – – 61,601
Debt securities 99,094 – 60 99,154
Derivative assets 481 – – 481
Deposits 4,741 – – 4,741
168,479 (1,733) 2 166,748
Cash and cash equivalents 7,170 – – 7,170
Total assets 199,102 (2,950) (7,920) 188,232
Equity
Shareholders’ equity 17,088 – 1,848 18,936
Non-controlling interests 176 – (1) 175
Total equity 17,264 – 1,847 19,111
Liabilities
Insurance contract liabilities* 156,485 4,243 (10,930) 149,798
Reinsurance contract liabilities n/a – 1,254 1,254

Investment contract liabilities without discretionary participation features 814 – (92) 722
Core structural borrowings of shareholder-financed businesses 6,127 – – 6,127
Operational borrowings 861 – – 861
Deferred tax liabilities 2,862 (1,696) 1 1,167
Other liabilities 14,689 (5,497) – 9,192
Total liabilities 181,838 (2,950) (9,767) 169,121
Total equity and liabilities 199,102 (2,950) (7,920) 188,232
* Included within insurance contract liabilities at 31 December 2021 are investment contracts with DPF and unallocated surplus of with-profits funds under IFRS 4.

A2 New accounting pronouncements in 2023 continued

Notes
(i) The presentation changes as shown in the table above principally arise from the following effects of the adoption of IFRS 17:
(a) Inclusion of insurance and reinsurance related receivable and payable balances within IFRS 17 insurance and reinsurance contract assets and liabilities
Under IFRS 17, the measurement of a group of insurance contracts requires inclusion of all the future cash flows within the boundary of each contract and as a result, all insurance and
reinsurance related receivable and payable balances (eg premiums receivable and claims payable) that were previously separately presented on the balance sheet are now in effect included
within the insurance and reinsurance contract balances under IFRS 17.
(b) Policy loans
Applying the same IFRS 17 measurement principles described above, policy loans related cash flows including any accrued interest income (previously included in ‘Accrued investment
income’) are also included within the fulfilment cash flows of the associated group of insurance contracts.
(c) Deferred tax liabilities
In line with IAS 12, deferred tax assets and liabilities have been netted as appropriate. The deferred tax liabilities arising from expected future distributions of the Singapore with-profits funds
have been reclassified to be part of the insurance contract liabilities under IFRS 17.
(ii) The measurement changes shown in the table above principally reflect the following measurement differences arising from the adoption of IFRS 17:
(a) Deferred acquisition costs (DAC)
Acquisition cash flows are taken into account in determining the day-one CSM of a group insurance contract. As such, explicit assets for DAC are not required and the IFRS 4 balances are
removed. DAC relating to investment contracts without discretionary participation features remains as an asset and has been reclassified to ‘Other debtors’ under ‘Other non-investment and
non-cash items’.
(b) Insurance and reinsurance contract assets and liabilities
The adjustments represent insurance and reinsurance contract measurement differences between IFRS 4 and IFRS 17, which primarily relate to the following effects:
– the establishment of a CSM under IFRS 17 in accordance with the transition rules, intended to represent the unamortised amount of expected future profit deferred upon initial
recognition of an insurance contract for all in-force contracts;
– the establishment of an explicit risk adjustment for non-financial risk under IFRS 17;
– release of prudence in the IFRS 4 policyholder liabilities to leave the best estimate liability; and
– the change in treatment of the unallocated surplus of with-profits funds such that the shareholders’ share is recognised in shareholders’ equity after allowing for measurement
differences between IFRS 4 and IFRS 17.
(c) Deferred tax assets and liabilities
Deferred tax balances are adjusted to reflect the deferred tax effects of the measurement adjustments arising from transition to IFRS 17 described above. The methods of calculating
deferred tax are unchanged.
(d) Investments in joint ventures and associates accounted for using the equity method
The adjustments represent the Group’s share of the impact of the transition of the balance sheets of the Group’s life joint ventures and associate (being CPL, India and the Takaful business
in Malaysia) from IFRS 4 to IFRS 17, arising principally from the measurement differences as described above.
A2.2 Adoption of other new accounting pronouncements

In addition to IFRS 17 and IFRS 9, the Group has adopted the following amendments in these interim financial statements. The adoption of these
amendments has had no significant impact on the Group financial statements.
> Amendments to IAS 1 and IFRS Practice Statement 2 ‘Disclosure of accounting policies’ issued in February 2021;
> Amendments to IAS 8 ‘Definition of Accounting Estimates’ issued in February 2021;
> Amendments to IAS 12 ‘Deferred tax related to assets and liabilities arising from a single transaction’ issued in May 2021; and
> Amendments to IAS 12 ‘International Tax Reform – Pillar Two Model Rules’ issued in May 2023.
On 23 May 2023, the IASB issued amendments to IAS 12 ‘International Tax Reform – Pillar Two Model Rules’ referred to above, which became
effective immediately and were approved for adoption in the UK on 19 July 2023. On 20 June 2023, legislation was substantively enacted in the
UK to introduce the OECD’s Pillar Two global minimum tax rules and a UK qualified domestic minimum top-up tax, with effect from 1 January
2024. The Group has applied the IAS 12 mandatory exemption from recognising and disclosing information on the associated deferred tax assets
and liabilities at 30 June 2023.
A3 Critical accounting policies, estimates and judgements

The preparation of these financial statements requires Prudential to make accounting estimates and judgements about the amounts of assets,
liabilities, revenues and expenses, which are both recognised and unrecognised (eg contingent liabilities) in the financial statements. Prudential
evaluates its critical accounting estimates, including those related to insurance business provisioning and the fair value of assets as required. The
notes below set out those critical accounting policies, the application of which requires the Group to make critical estimates and judgements. Also
set out are further critical accounting policies affecting the presentation of the Group’s results and other items that require the application of
critical estimates and judgements.
(a) Critical accounting policies with associated critical estimates and judgements
Measurement of insurance and reinsurance contracts under IFRS 17
IFRS 17 establishes principles for the recognition, measurement, presentation and disclosure of insurance contracts, reinsurance contracts and
investment contracts with discretionary participation features. It introduces a model that measures groups of contracts based on the Group’s
estimates of the present value of future cash flows that are expected to arise as the Group fulfils the contracts, an explicit risk adjustment for
non-financial risk and a CSM. The process of determining the present value of future cashflows involves a number of estimates and judgments,
which are set out below.

Determination of fulfilment cashflows used in the measurement of insurance and reinsurance contract assets and liabilities
(impacts $131.9 billion of net insurance and reinsurance contract balances, excluding those held by joint ventures and
associates)
Estimates of future cash flows The Group’s process for estimating future cash flows incorporates, in an unbiased way, all
reasonable and supportable information that is available without undue cost or effort at the
reporting date. This information includes both internal and external historical data about claims
and other experience, updated to reflect current expectations of future events. As this is a
prediction of the future, significant judgement is applied in determining the assumptions that
underpin the estimation of future cash flows. These assumptions include, but are not limited to
operating assumptions such as morbidity, mortality, persistency and expenses, and economic
assumptions such as risk free rates and illiquidity premium. Individual assumptions are set at a

business unit level. The demographic assumptions are consistent with those used in other
metrics such as EEV reporting. The Risk Review included in this Half Year Report discusses the
insurance and market risks the Group faces and how these risks are mitigated.
When estimating future cash flows, the Group takes into account current expectations of future
events (other than those from future legislation or regulatory changes that have not been
substantively enacted) that might affect those cash flows.
Cash flows within the boundary of a contract (the Group’s accounting policy on contract
boundary is given below) relate directly to the fulfilment of the contract, including those for
which the Group has discretion over the amount or timing. These include future premium
receipts, payments to (or on behalf of) policyholders, insurance acquisition cash flows and other
costs that are incurred in fulfilling contracts.
In relation to reinsurance contracts held, the probability weighted estimates of the present value
of future cash flows includes the potential credit losses and losses from other disputes to reflect
the non-performance risk of the reinsurers.
Expense assumptions used in future cash The Group projects estimates of future expenses relating to the fulfilment of contracts within
flow estimation the scope of IFRS 17 using current expense levels adjusted for inflation. Costs that are incurred in
fulfilling the contracts include, but are not limited to claims handling costs, policy administration

expenses, investment management expenses, income tax and other costs specifically
chargeable to the policyholders under the terms of the contracts. Expenses included in
estimated future cash flows comprise expenses directly attributable to the groups of contracts,
including an allocation of fixed and variable overheads incurred by the insurance entities.
Investment management expenses in relation to the management of the assets backing
policyholder liabilities are included in the fulfilment cash flows for business using the VFA model,
indirect participating business using the general model and general model non-participating
business where the Group performs investment management activities to enhance benefits
from insurance coverage for policyholders. The future expenses of internal asset management
and other services excludes the projected future profits or losses generated by any non-
insurance entities within the Group in providing those services (ie the IFRS results for the life
insurance operations in the consolidated financial statements assume that the cost of internal
asset management and other services will be that incurred by the Group as a whole, not the cost
that will be borne by the insurance business).
Most of the costs incurred by the insurance entities within the Group are considered to be
incurred for the purpose of selling and fulfilling insurance contracts and are hence treated as
attributable expenses. Cash flows that are not directly attributable to a portfolio of insurance
contracts, such as some product development and training costs, are recognised in other
operating expenses as incurred.
Policyholder benefits The assumptions used to project the cash flows also reflect the actions that management would
take over the duration of the projection, the time it would take to implement these actions and any
expenses incurred in taking those actions. Management actions encompass, but are not confined
to, investment allocation decisions, levels of regular and final bonuses and crediting rates.
For participating contracts, estimated future claim payments include bonuses paid to
policyholders determined by reference to the relevant profit sharing arrangement. For example,
for the Group’s with-profits business in Hong Kong, Singapore and Malaysia, asset shares are
used to determine payments to policyholders.
Where cash flows from one group of contracts affect, or are affected by, cash flows in other
groups of contracts (eg for with-profits business), the fulfilment cash flows for a group include
payments arising from the terms of existing contracts to policyholders in other groups and
exclude payments to policyholders in the group that have been included in the fulfilment cash
flows of another group.

A3 Critical accounting policies, estimates and judgements continued

(a) Critical accounting policies with associated critical estimates and judgements continued
Measurement of insurance and reinsurance contracts under IFRS 17 continued
Determination of fulfilment cash flows used in the measurement of insurance and reinsurance contract assets and liabilities
(impacts $131.9 billion of net insurance and reinsurance contract balances, excluding those held by joint ventures and
associates) continued
Insurance acquisition cash flows Insurance acquisition cash flows arise from the activities of selling, underwriting and starting a
group of insurance contracts that are directly attributable to the portfolio of contracts to which
the group belongs. Insurance acquisition cash flows and other costs that are incurred in fulfilling
contracts comprise both direct costs and an allocation of fixed and variable overheads incurred
by the insurance entities.
Insurance acquisition cash flows that are directly attributable to a group of contracts (eg
non-refundable commissions paid on issuance of a contract) are allocated to that group and to
the groups that will include renewals of those contracts.
Bancassurance payments (eg upfront payments to sell insurance contracts to distribution
partners) are capitalised under IAS 38 as intangible assets and amortised on a basis to reflect
the pattern in which the future economic benefits are expected to be consumed by reference to
new business production levels. The amortisation of the bancassurance intangibles is
considered to constitute insurance acquisition cash flows. They form part of fulfilment cash
flows, only when such payments are linked to the sale of an insurance contract and are then
amortised implicitly in line with the coverage unit pattern.
Determining the point of recognition and The point of initial recognition of a group of contracts is the earliest of the premium due date,
the boundary of an insurance contract the date coverage starts and, for an onerous contract, the date the contract is signed and
accepted by both parties. There is limited judgement involved in relation to most contracts
issued by the Group as the coverage period generally starts from the premium due date.
The contract boundary defines which future cash flows are included in the measurement of a
contract. The boundary of the fulfilment cash flows under IFRS 17 is considered to be the point
at which the Group both no longer has substantive rights and obligations under the insurance
contract to provide services or compel the policyholder to pay premiums.
The contract boundary is assessed at inception and then reassessed only when there are
changes in features or circumstances that alter the commercial substance of the contract or
changes the products within a portfolio. The reassessment of the contract boundary for any
changes is performed at the end of each reporting period.
For most contracts issued by the Group, there is little judgement involved in determining the
contract boundary as either a single premium is received for a contract which is expected to
continue for a long period or a guaranteed premium is received for regular premium contracts.
For certain contracts where the premiums are not guaranteed, more judgement is involved.
When determining the boundary for these contracts various factors are taken into consideration
by the Group such as the Group’s ability to fully reprice the respective contract and how such
contracts are managed.
The Group has some immaterial business that is general insurance in nature and which is
considered to have a boundary of one year.
Where riders attach to and are not separated from a base contract, the contract boundary is
determined based on the component of the contract which has the longest contract boundary.
Future cash flows relating to riders which are not purchased at the inception of the base
contract, but are added at a later date, are not included within the contract boundary at initial
recognition. As the addition of these riders is the exercise of an option under the contract it is not
considered a contract modification but is instead treated as changes in fulfilment cash flows.
Similar considerations to those applying to underlying insurance contracts apply in determining
the contract boundary of groups of reinsurance contracts held.

Determination of discount rates
Discount rate and risk-free rate The discount rate is determined on a bottom-up basis, starting with a liquid risk-free yield curve
and adding an illiquidity premium to reflect the characteristics of the insurance contracts.
Risk-free rates are based on government bond yields for all currencies except HKD where risk-free
rates are based on swap rates due to the higher liquidity of the HKD swap market. Yield curves
are constructed by using a market-observed curve up to a last liquid point and then
extrapolating to an ultimate forward rate.
Where cash flows vary based on the return on underlying items, the projected earned rate is set
equal to the discount rate. Where stochastic modelling techniques are used, the projected
average investment returns are calibrated to be equal to the deterministic discount rate

(including the illiquidity premium).
The illiquidity premium is calculated as the yield-to-maturity on a reference portfolio of assets
with similar liquidity characteristics to the insurance contracts, less the risk-free curve, and an
allowance for credit risk.
The allowance for credit risk includes a credit risk premium which is derived through a lifetime
projection of expected bond cash flows, allowing for the cost of downgrades and defaults, a
rebalancing rate of projected downgrades and a recovery rate in the event of default.
A proportion of the reference portfolio’s illiquidity premium is applied to portfolios of insurance
contracts reflecting the liquidity characteristics of the insurance contracts. The liquidity
characteristics are assessed from the policyholders’ perspective. A product’s illiquidity premium
is restricted to be no greater than reasonably expected to be earned on the assets backing the
insurance contract liabilities, over the duration of the insurance contracts.
The following tables set out the range of yield curves used to discount cash flows of insurance
contracts for major currencies:
30 Jun 2023 %
1 year 5 years 10 years 15 years 20 years

Chinese yuan (CNY) 1.86 – 2.36 2.44 – 2.87 2.67 – 3.10 2.91 – 3.35 3.05 – 3.48
Hong Kong dollar (HKD) 4.82 – 5.98 4.02 – 5.18 3.77 – 4.93 3.79 – 4.95 3.81 – 4.97
Indonesian rupiah (IDR) 5.81 – 6.36 6.15 – 6.70 6.57 – 7.12 6.80 – 7.35 6.95 – 7.50
Malaysian ringgit (MYR) 3.36 – 4.03 3.63 – 4.30 3.95 – 4.62 4.10 – 4.77 4.24 – 4.91
Singapore dollar (SGD) 3.66 – 4.62 3.11 – 4.07 3.00 – 3.96 2.79 – 3.75 2.43 – 3.39
United States dollar (USD) 5.42 – 6.43 4.13 – 5.14 3.81 – 4.82 3.83 – 4.84 4.17 – 5.18
31 Dec 2022 %
Chinese yuan (CNY) 2.09 – 2.84 2.65 – 3.29 2.88 – 3.52 3.05 – 3.69 3.14 – 3.79
1 Jan 2022 %
Chinese yuan (CNY) 2.21 – 2.60 2.63 – 2.99 2.81 – 3.19 3.00 – 3.65 3.12 – 3.71


(a) Critical accounting policies with associated critical estimates and judgements continued
Measurement of insurance and reinsurance contracts under IFRS 17 continued
Determination of risk adjustment for non-financial risk

Risk adjustment for non-financial risk The risk adjustment for non-financial risk reflects the compensation the Group requires for
bearing the uncertainty about the amount and timing of the cash flows from non-financial risk
as the Group fulfils insurance contracts.
For reinsurance contracts held, the risk adjustment for non‑financial risk represents the amount
of risk being transferred by the Group to the reinsurer.
The risk adjustment for non-financial risk is determined by the Group using a confidence level
approach. This is implemented through the use of provisions for adverse deviations (PADs)
calibrated using non-financial risk distributions and correlation assumptions. The PADs are
applied to best estimate assumptions.
The Group’s risk adjustment allows for all insurance, persistency and expense risks and
operational risks specific to uncertainty in the amount and timing of insurance contract cash
flows. Reinsurance counterparty default risk is excluded from the calculation. Diversification is
included on a net of reinsurance basis within each insurance entity of the Group. Diversification
is not allowed for between entities.
By applying a confidence level technique, the Group estimates the probability distribution of the
expected present value of the future cash flows from insurance contracts at each reporting date
and calculates the risk adjustment for non-financial risk as the excess of the value at risk at the
75th percentile (the target confidence level) over the expected present value of the future cash
flows. The confidence level is calibrated over a one-year period.
Determination of coverage units

Coverage units The proportion of CSM recognised in profit or loss at the end of each period for a group of
contracts is determined as the ratio of:
> the coverage units in the period; divided by
> the sum of the coverage units in the period and the present value of expected coverage units
in future periods.
The total number of coverage units in a group is the quantity of service provided determined by
considering the quantity of benefits for each contract and its expected coverage period. The
Group defines the quantity of benefits for insurance services as the maximum amount which a
policyholder receives when an insured event takes place, for example the sum assured, the
annual limit for a medical plan or the present value of a stream of payments. The quantity of
benefits is updated each period. Investment related and investment-return services are
assumed to be constant over time.
Where there are multiple different services in a group of contracts (for example both insurance
and investment services are provided), the quantities of benefits for the different types of service
are combined using weighting factors. These weighting factors are defined as the present value
of expected outflows for each type of service, determined at a contract level.
The expected coverage period is the expected duration up to the contract boundary. The
expected coverage period of the contracts in a group and the calculation of future coverage
units allows for expected decrements (eg deaths and lapses) in each future period using current
best estimate assumptions consistent with the BEL calculation.
The time value of money will be reflected in future coverage units.
Determination of coverage units for groups of reinsurance contracts held follow the same
principles as for groups of underlying contracts.

(b) Further critical accounting policies affecting the presentation of the Group’s results
Presentation of results before tax attributable to shareholders

Profit before tax is a significant IFRS income The total tax charge for the Group reflects tax that, in addition to that relating to shareholders’
statement item. The Group has chosen to profit, it is also attributable to policyholders through the interest in with-profits or unit-linked
present a measure of profit before tax funds. Reported IFRS profit before the tax measure is therefore not representative of pre-tax
attributable to shareholders which profit attributable to shareholders. Accordingly, in order to provide a measure of pre-tax profit
distinguishes between tax borne by attributable to shareholders, the Group has chosen to adopt an income statement presentation
shareholders and tax attributable to of the tax charge and pre-tax results that distinguishes between policyholders’ and
policyholders to support understanding of the shareholders’ returns.
performance of the Group.

Profit before tax attributable to shareholders is
$1,175 million and compares to profit before
tax of $1,243 million as shown in the
Consolidated income statement.
Segmental analysis of results and earnings attributable to shareholders

The Group uses adjusted operating profit as The basis of calculation of adjusted operating profit is provided in note B1.2.
the segmental measure of its results.
The vast majority of the Group’s investments are valued at fair value through profit and loss.
Total segmental adjusted operating profit is Short-term fluctuations in the fair value of investments are only partially offset by the effect of
$1,782 million as shown in note B1.1. economic changes on insurance contract assets and liabilities and so affect the result for the
period. The Group therefore provides additional analysis of results before and after the effects
of short-term fluctuations in investment returns, together with other items that are of a
short-term, volatile or one-off nature.
(c) Other items requiring application of critical estimates or judgements
VFA eligibility assessment

The Group applies judgements in assessing the IFRS 17 requires the use of the VFA for insurance contracts with direct participation features, ie
VFA eligibility of contracts. Application of the substantially investment-related service contracts for which, at inception:
VFA impacts the calculation of the CSM at the
balance sheet date, which in turn impacts the a. the contractual terms specify that the policyholder participates in a share of a clearly
future year’s amortisation recognised in the identified pool of underlying items;
income statement. Unlike the GMM approach, b. the entity expects to pay to the policyholder an amount equal to a substantial share of the
the VFA approach absorbs economic impacts fair value returns on the underlying items; and
within the CSM, rather than in the profit and
loss account. c. the entity expects a substantial proportion of any change in the amounts to be paid to the
policyholder to vary with the change in fair value of the underlying items.
The total insurance and reinsurance CSM at
the balance sheet date is $20,820 million, The following key judgements have been made in assessing VFA eligibility:
including joint ventures and associates, and Definition of substantial The term substantial is interpreted to mean greater than
the CSM amortisation, net of reinsurance, 50 per cent.
recognised in the income statement is
$1,177 million as shown in note C3.2. Contractual terms In some circumstances contractual terms are implied by
Approximately 72 per cent of the CSM customary business practices.
(including joint ventures and associates and
net of reinsurance) at transition was calculated Granularity of assessment The assessment has been carried out at a contract level.
under the VFA. However, to the extent insurance contracts in a group affect
the cash flows to policyholders of contracts in other groups

(referred to as “mutualisation”), eligibility for the VFA has
been assessed at the level at which such mutualisation occurs
(eg fund level).
Calculation basis VFA eligibility assessments have been performed on a basis

consistent with how the Group measures its realistic
expectations, for example when pricing, monitoring or setting
returns to policyholders.
Contracts not qualifying for the VFA are accounted for under the GMM or PAA. The PAA is not
used significantly within the Group.


(c) Other items requiring application of critical estimates or judgements continued
Carrying value of distribution rights intangible assets

The Group applies judgement to assess Distribution rights relate to bancassurance partnership arrangements for the distribution of
whether factors such as the financial products for the term of the contractual agreement with the bank partner, for which an asset is
performance of the distribution arrangements, recognised based on fees paid and fees payable not subject to performance conditions.
or changes in relevant legislation and Distribution rights impairment testing is conducted when there is an indication of an
regulatory requirements indicate an impairment.
impairment of intangible assets representing
distribution rights. To assess indicators of an impairment, the Group monitors a number of internal and external
factors, including indications that the financial performance of the arrangement is likely to be
To determine the impaired value, the Group worse than expected and changes in relevant legislation and regulatory requirements that
estimates the discounted future expected cash could impact the Group’s ability to continue to sell new business through the bancassurance
flows arising from the cash generating unit channel, and then applies judgement to assess whether these factors indicate that an
containing the distribution rights. Impacts impairment has occurred.
$3,428 million of assets as shown in note C4.2.
If an impairment has occurred, a charge is recognised in the income statement for the
difference between the carrying value and recoverable amount of the asset. The recoverable
amount is the greater of fair value less costs to sell and value in use. Value in use is calculated as
the present value of future expected cash flows from the asset or the cash generating unit to
which it is allocated.
Financial investments – Valuation

Financial investments held at fair value, net of The Group holds the majority of its financial investments at fair value (primarily through profit or
derivative liabilities, excluding those held by loss). Financial investments held at amortised cost primarily comprise loans and deposits and
joint ventures and associates is certain debt securities held by Eastspring.
$141,359 million as shown in note C2.2(a).
Determination of fair value
Financial investments held at amortised cost The fair values of the financial instruments for which fair valuation is required under IFRS
represent $5,200 million of the Group’s total Standards are determined by the use of quoted market prices for exchange-quoted investments
assets. or by using quotations from independent third parties such as brokers and pricing services or by
using appropriate valuation techniques. Further details are included in note C2.1.
The Group estimates the fair value of financial
investments that are not actively traded using The estimated fair value of derivative financial instruments reflects the estimated amount the
quotations from independent third parties or Group would receive or pay in an arm’s-length transaction. This amount is determined using
internally developed pricing models. quoted prices if exchange listed, quotations from independent third parties or valued internally
using standard market practices.
Quoted market prices are used to value investments having quoted prices. Actively traded
investments without quoted prices are valued using prices provided by third parties such as
brokers or pricing services. Financial investments measured at fair value are classified into a
three-level hierarchy as described in note C2.1.
If the market for a financial investment of the Group is not active, the Group establishes fair
value by using quotations from independent third parties, such as brokers or pricing services, or
by using internally developed pricing models. Priority is given to publicly available prices from
independent sources when available, but overall the source of pricing and/or the valuation
technique is chosen with the objective of arriving at a fair value measurement which reflects the
price at which an orderly transaction would take place between market participants on the
measurement date. Changes in assumptions relating to these variables could positively or
negatively impact the reported fair value of these financial investments. Details of the financial
investments classified as ‘level 3’ to which valuation techniques are applied and the sensitivity of
profit before tax to a change in the valuation of these items, are presented in note C2.2.

B Earnings performance
B1 Analysis of performance by segment
B1.1 Segment results
2023 $m 2022 $m 2023 vs 2022 % 2022 $m
Half year Half year Half year Half year Full year
Half year AER CER AER CER AER
Note note (i) note (i) note (i) note (i) note (i) note (i)
CPL 164 132 124 24% 32% 271

Hong Kong 554 598 597 (7)% (7)% 1,162
Indonesia 109 118 113 (8)% (4)% 205
165

Malaysia 193 184 (15)% (10)% 340
Singapore 270 313 320 (14)% (16)% 570
Growth markets and other note (ii) 374 337 323 11% 16% 728
Eastspring 146 131 128 11% 14% 260
Total segment profit B1.3 1,782 1,822 1,789 (2)% 0% 3,536
Other income and expenditure:
Net investment return and other items note (iii) (28) (4) (4) n/a n/a (44)
Interest payable on core structural borrowings (85) (103) (103) 17% 17% (200)
Corporate expenditure note (iv) (115) (150) (150) 23% 23% (276)
Total other income and expenditure (228) (257) (257) 11% 11% (520)
Restructuring and IFRS 17 implementation costs note (v) (92) (154) (152) 40% 39% (294)
Adjusted operating profit B1.2 1,462 1,411 1,380 4% 6% 2,722
Short-term fluctuations in investment returns (287) (2,820) (2,806) 90% 90% (3,420)
Gain attaching to corporate transactions D1 – 62 62 n/a n/a 55
Profit (loss) before tax attributable to
shareholders 1,175 (1,347) (1,364) n/a n/a (643)
Tax charge attributable to shareholders’ returns (228) (158) (147) (44)% (55)% (354)

Profit (loss) for the period 947 (1,505) (1,511) n/a n/a (997)
Attributable to:
Equity holders of the Company 944 (1,508) (1,514) n/a n/a (1,007)
Non-controlling interests 3 3 3 n/a n/a 10
Profit (loss) for the period 947 (1,505) (1,511) n/a n/a (997)
2023 2022 2023 vs 2022 % 2022
Note Half year AER CER AER CER AER
Basic earnings per share (in cents) B3 note (i) note (i) note (i) note (i) note (i) note (i)
Based on adjusted operating profit, net of tax and

non-controlling interest 45.2¢ 40.6¢ 39.9¢ 11% 13% 79.4¢
Based on profit (loss) for the period, net of non-
controlling interest 34.5¢ (55.1)¢ (55.4)¢ n/a n/a (36.8)¢

Notes
(i) Segment results are attributed to the shareholders of the Group before deducting the amount attributable to the non-controlling interests. This presentation is applied consistently throughout
the document. For definitions of AER and CER refer to note A1.
(ii) The Growth markets and other segment includes non-insurance entities that support the Group’s insurance business and the result for this segment is after deducting the corporate taxes arising
from the life joint ventures and associates.
(iii) Net investment return and other items includes an adjustment to eliminate intercompany profits as described below. Entities within the Prudential Group can provide services to each other, the
most significant example being the provision of asset management services by Eastspring to the life entities. If the associated expenses are deemed attributable to the entity’s insurance
contracts then the costs are included within the estimate of future cashflows when measuring the insurance contract under IFRS 17. In the Group’s consolidated accounts, IFRS 17 requires the
removal of the intercompany profit from the measurement of the insurance contract. Put another way the future cash flows include the cost to the Group (not the insurance entity) of providing
the service. In the period that the service is provided the entity undertaking the service, for example Eastspring, recognises the profit it earns as part of its results. To avoid any double counting an
adjustment is included with the centre’s “net investment return and other items” to remove the benefit already recognised when valuing the insurance contract.
(iv) Corporate expenditure as shown above is for head office functions.
(v) Restructuring and IFRS 17 implementation costs include those incurred in insurance and asset management operations of $(36) million (half year 2022: $(44) million; full year 2022:
$(137) million), largely comprising the costs of Group-wide projects including the implementation of IFRS 17, reorganisation programmes and initial costs of establishing new business initiatives
and operations.

B Earnings performance / continued
B1 Analysis of performance by segment continued

B1.2 Determining operating segments and performance measure of operating segments
Operating segments
The Group’s operating and reported segments for financial reporting purposes are defined and presented in accordance with IFRS 8 ‘Operating
Segments’. There have been no changes to the Group’s operating segments as reported in these interim financial statements from those reported
in the Group’s consolidated financial statements for the year ended 31 December 2022. Operations and transactions which do not form part of
any business unit are reported as ‘Unallocated to a segment’ and generally comprise head office functions.
Performance measure
The performance measure of operating segments utilised by the Group is IFRS operating profit based on longer-term investment returns
(adjusted operating profit) as described below. This measurement basis distinguishes adjusted operating profit from other constituents of total
profit or loss for the period, including short-term fluctuations in investment returns and gain or loss on corporate transactions.
Determination of adjusted operating profit

(a) Approach adopted for insurance businesses
The measurement of adjusted operating profit reflects that, for the insurance business, assets and liabilities are held for the longer term. The
Group believes trends in underlying performance are better understood if the effects of short-term fluctuations in market conditions, such as
changes in interest rates or equity markets, are excluded.
The method of allocating profit between operating and non-operating components involves applying longer-term rates of return to the Group’s
assets held by insurance entities (including joint ventures and associates). These longer-term rates of return are not applied when assets and
liabilities move broadly in tandem and hence the effect on profit from short-term market movements is more muted. In summary the Group
applies the following approach when attributing the ‘net investment result’ between operating and non-operating profit:
> Returns on investments that meet the definition of an ‘underlying item’, namely those investments that determine some of the amounts
payable to a policyholder such as assets within unit linked funds or with-profits funds, are recorded in adjusted operating profit on an actual
return basis. The exception is for investments backing the shareholders’ 10 per cent share of the estate within the Hong Kong with-profits fund.
Changes in the value of these investments, including those driven by market movements, pass through the income statement with no liability
offset. Consequently adjusted operating profit recognises investment return on a longer-term basis for these assets.
> For insurance contracts measured under the General Measurement Model, the impact of market movements on both the non-underlying
insurance contract balances and the investments they relate to are considered together. Adjusted operating profit allows for the long-term
credit spread (net of the expected defaults) or long-term equity risk premium on the debt and equity-type instruments respectively. Deducted
from this amount is the unwind of the liquidity premium included in the current discount rate for the liabilities.
> A longer-term rate of return is applied to all other investments held by the Group’s insurance business for the purposes of calculating adjusted
operating profit. More detail on how longer-term rates are determined is set out below.
The difference between the net investment result recorded in the income statement and the longer-term returns determined using the above
principles is recorded as ‘short-term fluctuations in investment returns’ as a component of non-operating profit.
The ‘insurance service result’ is recognised in adjusted operating profit in full with the exception of gains or losses that arise from market and
other related movements on onerous contracts measured under the variable fee approach. If these gains and losses are capable of being offset
across more than one annual cohort of the same product or fund as applicable then the adjusted operating profit is determined by amortising the
net of the future profits and losses on all contracts where profits or losses can be shared. Any difference between this and the insurance service
results presented in the income statement is classified as part of ‘short-term fluctuations in investment returns’, a component of non-operating
profit.
(b) Determination of longer-term returns

The longer-term rates of return are estimates of the long-term trend investment returns having regard to past performance, current trends and
future expectations. These rates are broadly stable from period to period but may be different between regions, reflecting, for example, differing
expectations of inflation in each business unit. The assumptions are for the returns expected to apply in equilibrium conditions. The assumed rates
of return do not reflect any cyclical variability in economic performance and are not set by reference to prevailing asset valuations.
For collective investment schemes that include different types of assets (eg equities and debt securities), weighted assumptions are used
reflecting the asset mix underlying the relevant fund mandates.
Debt securities and loans

For debt securities and loans, the longer-term rates of return are estimates of the long-term government bond yield, plus the estimated long-term
credit spread over the government bond yield, less an allowance for expected credit losses. The credit spread and credit loss assumptions reflect
the mix of assets by credit rating. Longer-term rates of return range from 2.8 per cent to 7.8 per cent for all periods shown above.
Equity-type securities
For equity-type securities, the longer-term rates of return are estimates of the long-term trend investment returns for income and capital.
Longer-term rates of return range from 8.6 per cent to 15.7 per cent for all periods shown above.

Derivative value movements
In the case where derivatives change the nature of other invested assets (eg by lengthening the duration of assets, hedging overseas bonds to the
currency of the local liabilities, or by providing synthetic exposure to equities), the longer-term return on those invested assets reflects the impacts
of the derivatives.
(c) Non-insurance businesses

For these businesses, the determination of adjusted operating profit reflects the underlying economic substance of the arrangements and
excludes market related items only where it is expected these will unwind over time.
B1.3 Analysis of adjusted operating profit by driver

The table below analyses the Group’s adjusted operating profit into the underlying drivers using the following categories:
> Adjusted release of CSM, which is net of reinsurance, represents the release from the CSM for the insurance services provided in the period

adjusted for the reduction in CSM release that would occur if gains on profitable contracts were combined with losses on onerous contracts for
those contracts where gains and losses can be shared across cohorts as described in note B1.2.
> Experience variances represent the difference between the actual amounts incurred or received in the period and that assumed within the best
estimate liability for insurance and reinsurance contracts. It covers items such as claims, attributable expenses and premiums to the extent that
they relate to current or past service.
> Release of risk adjustment, which is net of reinsurance, represents the amount of risk adjustment recognised in the income statement
representing non-financial risk that expired in the period net of the amount that was assumed to be covered by any reinsurance contracts
in place.
> Other insurance service result primarily relates to movements on onerous contracts that impact adjusted operating profit (ie excluding those
discussed in B1.2).
> Other insurance income and expenditure represent other sources of income and expenses that are not considered to be attributable to
insurance contracts under IFRS 17.
> Net investment result on longer-term basis comprises the component of the ‘net investment result’ that has been attributed to adjusted
operating profit by applying the approach as described in note B1.2.
Under IFRS, the Group’s share of results from its investments in joint ventures and associates accounted for using the equity method is included as
a single line in the Group’s profit before tax on a net of related tax basis. In the table below, the results of the life joint ventures and associates are
analysed by adjusted operating profit drivers and on a pre-tax basis, with related tax shown separately in order for the contribution from the life

joint ventures and associates to be included in the profit driver analysis on a consistent basis with the rest of the insurance business operations.
2023 $m 2022 $m 2023 vs 2022 % 2022 $m
Half year Half year Half year Half year Half year Full year
AER CER AER CER AER
Adjusted release of CSM note 1,178 1,212 1,189 (3)% (1)% 2,265
Release of risk adjustment 107 98 96 9% 11% 179
Experience variances (92) (19) (13) n/a n/a (66)
Other insurance service result (85) (134) (128) 37% 34% (204)
Adjusted insurance service result note 1,108 1,157 1,144 (4)% (3)% 2,174
Net investment result on longer-term basis note 612 653 632 (6)% (3)% 1,290
Other insurance income and expenditure (45) (83) (80) 46% 44% (98)
Share of related tax charges from joint ventures and
associates (39) (36) (35) (8)% (11)% (90)
Insurance business 1,636 1,691 1,661 (3)% (2)% 3,276
Eastspring 146 131 128 11% 14% 260
Other income and expenditure (228) (257) (257) 11% 11% (520)
Restructuring and IFRS 17 implementation costs (92) (154) (152) 40% 39% (294)
Adjusted operating profit 1,462 1,411 1,380 4% 6% 2,722
Note
The adjusted release of CSM and the adjusted insurance service result are reconciled to the information in the Analysis of movements in insurance and reinsurance contract balances by measurement
component in note C3.2 (including joint ventures and associates) and the condensed consolidated income statement as follows:

B1 Analysis of performance by segment continued

B1.3 Analysis of adjusted operating profit by driver continued
2023 $m 2022 $m
Release of CSM, net of reinsurance as included within Insurance service result on the consolidated
income statement 1,068 1,088 2,013
Add amounts relating to the Group’s life joint ventures and associates that are accounted for on equity-
method 109 113 229
Release of CSM, net of reinsurance as shown in note C3.2
Insurance 1,223 n/a 2,413
Reinsurance (46) n/a (171)
1,177 n/a 2,242
Adjustment to release of CSM for the treatment adopted for adjusted operating purposes of combining
losses on onerous contracts and gains on profitable contracts that can be shared across more than one
annual cohort 1 11 23
Adjusted release of CSM as shown above 1,178 1,212 2,265
Insurance service result as shown in the consolidated income statement 1,019 1,258 2,177
Add amounts relating to the Group’s life joint ventures and associates that are accounted for on equity-
method 70 45 112
Insurance service result as shown in note C3.2
Insurance 1,181 n/a 2,396
Reinsurance (92) n/a (107)
1,089 n/a 2,289
Removal of losses or gains from reversal of losses on those onerous contracts that meet the criteria in note
B1.2 less the change to the release of CSM shown above 70 (83) (33)
Other primarily related to policyholder tax* (51) (63) (82)
Adjusted insurance service result as shown above 1,108 1,157 2,174
* Other primarily relates to the offsetting of the expected and variance of the tax charge attributable to policyholders included in the insurance service result in the income statement and the
actual tax charge that is presented in the IAS 12 tax line in the income statement but included in the pre-tax adjusted operating profit attributable to shareholders. These tax amounts, while
presented in different lines in the consolidated income statement, are wholly attributable to policyholders with no net impact to adjusted operating profit and so have been offset in the
analysis above.
In addition, net investment result on longer-term basis is reconciled to the net investment result in the condensed consolidated income statement
as follows:
2023 $m 2022 $m
Net investment result as shown in the consolidated income statement 652 (2,098) (1,883)
Remove investment return of non-insurance entities (39) (34) (54)
Remove short-term fluctuations in investment return included in non-operating profit* 287 2,820 3,420
Other items* (288) (35) (193)
Net investment result on longer-term basis as shown above 612 653 1,290
* These reconciling line items include the impact from the Group’s life joint ventures and associates.
B1.4 Revenue
The Group recognises insurance revenue as it satisfies its performance obligations, ie as it provides services under groups of insurance contracts.
The insurance revenue relating to services provided for each period represents the total of the changes in the liability for remaining coverage that
relate to services for which the Group expects to receive consideration, and comprises the following items.
> A release of the CSM, measured based on coverage units provided;
> Changes in the risk adjustment for non-financial risk relating to current services;
> Claims and other insurance service expenses for the period expected at the beginning of the year; and
> Other amounts, if any, for example, experience adjustments for premium receipts for current or past services.

In addition, the Group allocates a portion of premiums that relate to recovering insurance acquisition cash flows to each period using the same
amortisation factor used to amortise CSM. The Group recognises the allocated amount, adjusted for interest accretion, as insurance revenue and
an equal amount as insurance service expenses.
Non-distinct investment components are excluded from insurance revenue and insurance service expenses.
Policy fees charged on investment contracts without discretionary participation features for asset management and policy administration fees
are recognised when related services are provided.
Half year 2023 $m
Insurance operations note (i)

Growth Inter Unallocated
markets -segment Total to a
Hong Kong Indonesia Malaysia Singapore and other Eastspring elimination segment segment Total

Insurance revenue 1,582 551 566 946 946 – – 4,591 – 4,591
Other revenue note (ii) 11 2 – 1 17 145 – 176 – 176
Total revenue from external
customers 1,593 553 566 947 963 145 – 4,767 – 4,767
Intra-group revenue – – – – – 103 (103) – – –
Interest income 540 40 133 444 393 3 – 1,553 61 1,614
Dividend and other investment
income 410 81 79 273 65 2 – 910 7 917
Investment appreciation
(depreciation) 2,345 36 (69) 1,234 1,128 4 – 4,678 (38) 4,640
Total revenue 4,888 710 709 2,898 2,549 257 (103) 11,908 30 11,938
Half year 2022 $m


Insurance revenue 1,386 539 507 864 863 – – 4,159 – 4,159
Other revenue note (ii) 14 – – 2 7 181 – 204 – 204
customers 1,400 539 507 866 870 181 – 4,363 – 4,363
Intra-group revenue – – – – 1 106 (107) – – –
Interest income 477 39 110 387 303 1 – 1,317 3 1,320
income 338 103 103 321 66 – – 931 19 950
(depreciation) (17,659) (161) (603) (5,403) (2,327) (17) – (26,170) 28 (26,142)
Total revenue (15,444) 520 117 (3,829) (1,087) 271 (107) (19,559) 50 (19,509)
Full year 2022 $m

Insurance revenue 2,840 1,070 1,029 1,815 1,795 – – 8,549 – 8,549

Other revenue note (ii) 65 6 – 1 33 330 – 435 1 436

customers 2,905 1,076 1,029 1,816 1,828 330 – 8,984 1 8,985
Intra-group revenue – – – – 1 199 (200) – – –
Interest income 927 83 208 724 601 4 – 2,547 50 2,597
income 689 77 183 576 107 1 – 1,633 25 1,658
(depreciation) (23,615) (69) (386) (6,679) (2,860) (21) – (33,630) (5) (33,635)
Total revenue (19,094) 1,167 1,034 (3,563) (323) 513 (200) (20,466) 71 (20,395)
Notes
(i) The Group’s share of the results from the joint ventures and associates including CPL that are equity accounted for is presented in a single line within the Group’s profit before tax on a net of
related tax basis, and therefore not shown in the analysis of revenue line items above.
(ii) Other revenue comprises revenue from external customers and consists primarily of revenue from the Group’s asset management business of $145 million (half year 2022: $181 million; full year
2022: $330 million).

B2 Tax charge
The total tax charge in the income statement is as follows:
2023 $m 2022 $m
Hong Kong (63) (57) (106)

Indonesia (27) (17) (27)
Malaysia (43) 32 (44)
Singapore (91) 46 (61)
Growth markets and other (66) (171) (210)
Eastspring (14) (14) (26)
Total segment (304) (181) (474)
Unallocated to a segment (central operations) 8 (1) (4)
Total tax charge (296) (182) (478)
Analysed by:
Current tax (238) (255) (481)
Deferred tax (58) 73 3
Total tax charge (296) (182) (478)
Profit before tax includes Prudential’s share of profit after tax from the joint ventures and associates that are equity-accounted for. Therefore, the
actual tax charge in the income statement does not include tax arising from the results of joint ventures and associates including CPL.
The actual shareholder tax rates of the relevant business operations are shown below:
Half year 2023 %
Growth Total
markets Other attributable to
Hong Kong Indonesia Malaysia Singapore and other Eastspring operations shareholders
Tax rate on adjusted

operating profit 5% 21% 22% 16% 22% 10% 3% 15%
Tax rate on profit before tax
attributable to
shareholders’ returns 5% 22% 23% 16% 13% 10% 2% 19%
Half year 2022 %
Growth Total

attributable to
shareholders’ returns (3)% 22% (50)% 17% 85% 11% 0% (12)%
Full year 2022 %
Growth Total

attributable to
shareholders’ returns (7)% 16% 25% 63% 40% 10% (1)% (55)%

B3 Earnings per share
Half year 2023
Net of tax
and non- Basic Diluted
Before Non-controlling controlling earnings earnings
tax Tax interests interests per share per share
$m $m $m $m cents cents
Based on adjusted operating profit 1,462 (221) (3) 1,238 45.2¢ 45.2¢
Short-term fluctuations in investment returns (287) (7) – (294) (10.7)¢ (10.7)¢
Gain attaching to corporate transactions – – – – –¢ –¢

Based on profit for the period 1,175 (228) (3) 944 34.5¢ 34.5¢
Half year 2022

Net of tax
Short-term fluctuations in investment returns (2,820) 138 1 (2,681) (98.0)¢ (98.0)¢
Gain attaching to corporate transactions 62 – – 62 2.3¢ 2.3¢
Based on profit for the period (1,347) (158) (3) (1,508) (55.1)¢ (55.1)¢
Full year 2022

Net of tax

Short-term fluctuations in investment returns (3,420) 185 1 (3,234) (118.2)¢ (118.2)¢
Gain attaching to corporate transactions 55 – – 55 2.0¢ 2.0¢
Based on profit for the period (643) (354) (10) (1,007) (36.8)¢ (36.8)¢
Basic earnings per share are calculated based on earnings attributable to ordinary shareholders, after related tax and non-controlling interests,
divided by the weighted average number of ordinary shares outstanding during the period, excluding those held in employee share trusts, which
are treated as cancelled. For diluted earnings per share, the weighted average number of shares in issue is adjusted to assume conversion of all
dilutive potential ordinary shares. The Group’s only class of potentially dilutive ordinary shares are those share options granted to employees
where the exercise price is less than the average market price of the ordinary shares during the period. No adjustment is made if the impact is
anti-dilutive overall.
The weighted average number of shares for calculating basic and diluted earnings per share, which excludes those held in employee share
trusts, is set out below:
2023 2022
Number of shares (in millions) Half year Half year Full year
Weighted average number of shares for calculation of basic earnings per share 2,740 2,736 2,736
Shares under option at end of period 1 – 1

Shares that would have been issued at fair value on assumed option price at end of period (1) – (1)
Weighted average number of shares for calculation of diluted earnings per share 2,740 2,736 2,736

B4 Dividends
Half year 2023 Half year 2022 Full year 2022
Cents per share $m Cents per share $m Cents per share $m
Dividends relating to reporting period:

First interim dividend 6.26¢ 172 5.74¢ 158 5.74¢ 154
Second interim dividend – – – – 13.04¢ 359
Total relating to reporting period 6.26¢ 172 5.74¢ 158 18.78¢ 513
Dividends paid in reporting period:
Current year first interim dividend – – – – 5.74¢ 154
Second interim dividend for prior year 13.04¢ 361 11.86¢ 320 11.86¢ 320
Total paid in reporting period 13.04¢ 361 11.86¢ 320 17.60¢ 474
First and second interim dividends are recorded in the period in which they are paid.
Dividend per share

On 19 October 2023, Prudential will pay a first interim dividend of 6.26 cents per ordinary share for the year ending 31 December 2023. The first
interim dividend will be paid to shareholders recorded on the UK register at 6.00pm (British Summer Time) on 8 September 2023 or on the HK
branch register at 4.30pm (Hong Kong Time) on 11 September 2023Note and also to the holders of US American Depositary Receipts (ADRs) as at
8 September 2023. The first interim dividend will be paid on or about 26 October 2023 to shareholders with shares standing to the credit of their
securities accounts with The Central Depository (Pte) Limited (CDP) at 5.00pm (Singapore Time) on 8 September 2023.
Shareholders holding shares on the UK or HK share registers will continue to receive their dividend payments in either GBP or HKD respectively,
unless they elect to receive dividend payments in USD. Elections must be made through the relevant UK or HK share registrar on or before
29 September 2023. The corresponding amounts per share in GBP and HKD are expected to be announced on or about 9 October 2023. The USD
to GBP and HKD conversion rates will be determined by the actual rates achieved by Prudential buying those currencies prior to the subsequent
announcement.
Holders of ADRs will continue to receive their dividend payments in USD. Shareholders holding an interest in Prudential shares through CDP in
Singapore will continue to receive their dividend payments in SGD at an exchange rate determined by CDP.
Shareholders on the UK register are eligible to participate in a Dividend Reinvestment Plan.
Note
Changed from 8 September 2023 to 11 September 2023 as detailed in the announcement released on the Stock Exchange of Hong Kong on 8 September 2023.

C Financial position
C1 Group assets and liabilities
C1.1 Group investments by business type
The analysis below is structured to show the investments of the Group’s subsidiaries by reference to the differing degrees of policyholder and
shareholder economic interest of the different types of business.
Debt securities are analysed below according to the issuing government for sovereign debt and to credit ratings for the rest of the securities.
The Group uses the middle of the Standard & Poor’s, Moody’s and Fitch ratings, where available. Where ratings are not available from these
rating agencies, local external rating agencies’ ratings and lastly internal ratings have been used. Securities with none of the ratings listed above
are classified as unrated and included under the ‘below BBB- and unrated’ category. The total securities (excluding sovereign debt) that were
unrated at 30 June 2023 were $1,127 million (31 December 2022: $1,152 million). Additionally, government debt is shown separately from the
rating breakdowns in order to provide a more focused view of the credit portfolio.

In the table below, AAA is the highest possible rating. Investment grade financial assets are classified within the range of AAA to BBB- ratings.
Financial assets which fall outside this range are classified as below BBB-.
The following table classifies assets into those that primarily back the Group’s participating funds that are measured under the variable fee
approach, those backing unit-linked funds, other investments held within the insurance entities, Eastspring’s investments and those that are
unallocated to a segment (principally centrally held investments).
In terms of the investments held by the insurance businesses, those within funds with policyholder participation and those within unit-linked
funds represent underlying items. The gains or losses on these investments will be offset by movements in policyholder liabilities and therefore
adjusted operating profit reflects the actual investment return on these assets. The exception is for investments backing the shareholders’
10 per cent share of the estate within the Hong Kong with-profits fund. Changes in the value of these investments, including those driven by
market movements, pass through the income statement with no liability offset. Consequently adjusted operating profit recognises investment
return on a longer-term basis for these assets.
In terms of other assets held within the insurance entities, these largely comprise assets backing IFRS shareholders’ equity or are non-
underlying items backing General Measurement Model liabilities and therefore these other investments are recognised in adjusted operating
profit at a longer-term rate.


C Financial position / continued
C1 Group assets and liabilities continued

C1.1 Group investments by business type continued
30 Jun 2023 $m
Asia and Africa
Insurance
Funds with Unallocated

policyholder Unit-linked to a Group
participation* funds Other Eastspring Total segment total
Debt securities:
Sovereign debt
Indonesia 408 637 460 – 1,505 – 1,505
Singapore 3,330 571 943 – 4,844 – 4,844
Thailand 1 3 1,612 – 1,616 – 1,616
United Kingdom – 4 44 – 48 – 48
United States 23,364 18 1,756 – 25,138 – 25,138
Vietnam 3,084 27 180 – 3,291 – 3,291
Other (predominantly Asia) 4,056 672 1,675 27 6,430 – 6,430
Subtotal 34,243 1,932 6,670 27 42,872 – 42,872
Other government bonds
AAA 1,421 89 137 – 1,647 – 1,647
AA+ to AA- 85 11 22 – 118 – 118
A+ to A- 694 114 234 – 1,042 – 1,042
BBB+ to BBB- 231 51 71 – 353 – 353
Below BBB- and unrated 487 15 76 – 578 – 578
Subtotal 2,918 280 540 – 3,738 – 3,738
Corporate bonds
AAA 1,175 169 234 – 1,578 – 1,578
AA+ to AA- 2,527 356 932 – 3,815 – 3,815
A+ to A- 10,141 540 2,291 – 12,972 – 12,972
BBB+ to BBB- 8,938 711 2,019 – 11,668 – 11,668
Below BBB- and unrated 2,487 583 356 2 3,428 – 3,428
Subtotal 25,268 2,359 5,832 2 33,461 – 33,461
Asset-backed securities
AAA 194 1 66 – 261 – 261
AA+ to AA- 16 2 2 – 20 – 20
A+ to A- 46 1 10 – 57 – 57
BBB+ to BBB- 15 – 3 – 18 – 18
Below BBB- and unrated 2 1 – – 3 – 3
Subtotal 273 5 81 – 359 – 359
Total debt securities notes (i)(iii) 62,702 4,576 13,123 29 80,430 – 80,430
Loans:
Mortgage loans 99 – 45 – 144 – 144
Other loans 430 – – – 430 – 430
Total loans 529 – 45 – 574 – 574
Equity securities and holdings in collective
investment schemes:
Direct equities 17,352 11,637 156 106 29,251 – 29,251
Collective investment schemes 22,670 7,070 1,514 3 31,257 – 31,257
Total equity securities and holdings in
collective investment schemes 40,022 18,707 1,670 109 60,508 – 60,508
Other financial investments note (ii) 2,416 403 1,503 96 4,418 1,096 5,514
Total financial investments 105,669 23,686 16,341 234 145,930 1,096 147,026
Investment properties – – 38 – 38 – 38
Cash and cash equivalents 900 699 1,410 159 3,168 2,752 5,920
Total investments 106,569 24,385 17,789 393 149,136 3,848 152,984

31 Dec 2022 $m
Asia and Africa
Insurance
Funds with Unallocated

policyholder Unit-linked to a Group
participation* funds Other Eastspring Total segment total
Debt securities:
Sovereign debt
Indonesia 565 589 400 3 1,557 – 1,557
Singapore 3,240 507 917 67 4,731 – 4,731
Thailand – – 1,456 – 1,456 – 1,456

United Kingdom – 4 – – 4 – 4
United States 21,580 54 257 – 21,891 – 21,891
Vietnam 2,263 12 135 – 2,410 – 2,410
Other (predominantly Asia) 3,663 646 1,666 27 6,002 – 6,002
Subtotal 31,311 1,812 4,831 97 38,051 – 38,051
Other government bonds
AAA 1,480 85 108 – 1,673 – 1,673
AA+ to AA- 112 21 20 – 153 – 153
A+ to A- 765 139 233 – 1,137 – 1,137
BBB+ to BBB- 327 77 99 – 503 – 503
Subtotal 3,167 344 527 – 4,038 – 4,038
Corporate bonds
AAA 1,094 181 268 – 1,543 – 1,543
AA+ to AA- 2,356 385 1,151 – 3,892 – 3,892
A+ to A- 9,233 524 2,345 – 12,102 – 12,102
BBB+ to BBB- 9,515 1,325 2,344 1 13,185 – 13,185
Below BBB- and unrated 2,918 444 454 – 3,816 – 3,816

Subtotal 25,116 2,859 6,562 1 34,538 – 34,538
Asset-backed securities
AAA 228 5 85 – 318 – 318
AA+ to AA- 7 1 2 – 10 – 10
A+ to A- 25 – 9 – 34 – 34
BBB+ to BBB- 17 – 6 – 23 – 23
Subtotal 279 7 103 – 389 – 389
Total debt securities notes (i)(iii)
59,873 5,022 12,023 98 77,016 – 77,016
Loans:
Mortgage loans 92 – 48 – 140 – 140
Other loans 450 – – – 450 – 450
Total loans 542 – 48 – 590 – 590
Equity securities and holdings in collective
investment schemes:
Direct equities 15,000 11,379 202 61 26,642 266 26,908
Collective investment schemes 22,015 6,760 1,992 2 30,769 2 30,771
Total equity securities and holdings in

collective investment schemes 37,015 18,139 2,194 63 57,411 268 57,679
Other financial investments note (ii) 3,010 379 1,599 107 5,095 1,749 6,844
Total financial investments 100,440 23,540 15,864 268 140,112 2,017 142,129
Investment properties – – 37 – 37 – 37
Cash and cash equivalents 1,563 749 1,266 127 3,705 1,809 5,514
Total investments 102,003 24,289 17,167 395 143,854 3,826 147,680
* Represents investments held to support insurance products where policyholders participate in the returns of a specified pool of investments (excluding unit-linked policies) that are measured
using the variable fee approach.

C1 Group assets and liabilities continued

C1.1 Group investments by business type continued
Notes
(i) Of the Group’s debt securities, the following amounts were held by the consolidated investment funds:
30 Jun 2023 31 Dec 2022
$m $m
Debt securities held by consolidated investment funds 10,769 11,899
(ii) Other financial investments comprise derivative assets and deposits.

(iii) The credit ratings, information or data contained in this report which are attributed and specifically provided by Standard & Poor’s, Moody’s and Fitch Solutions and their respective affiliates and
suppliers (‘Content Providers’) is referred to here as the ‘Content’. Reproduction of any Content in any form is prohibited except with the prior written permission of the relevant party. The Content
Providers do not guarantee the accuracy, adequacy, completeness, timeliness or availability of any Content and are not responsible for any errors or omissions (negligent or otherwise), regardless
of the cause, or for the results obtained from the use of such Content. The Content Providers expressly disclaim liability for any damages, costs, expenses, legal fees, or losses (including lost
income or lost profit and opportunity costs) in connection with any use of the Content. A reference to a particular investment or security, a rating or any observation concerning an investment
that is part of the Content is not a recommendation to buy, sell or hold any such investment or security, nor does it address the suitability of an investment or security and should not be relied on
as investment advice.
C1.2 Other assets and liabilities

Property, plant and equipment (PPE)
At 30 June 2023, there are PPE of $396 million (31 December 2022: $437 million). During half year 2023, the Group made additions of $37 million
of PPE (full year 2022: $83 million), of which $19 million relates to right-of-use assets (full year 2022: $49 million).
Accrued investment income and other debtors

At 30 June 2023, there are accrued investment income and other debtors of $2,052 million (31 December 2022: $1,951 million), of which
$1,918 million (31 December 2022: $1,882 million) are expected to be settled within one year.
Accruals, deferred income and other creditors

At 30 June 2023, there are accruals, deferred income and other liabilities of $2,277 million (31 December 2022: $2,866 million), of which
$2,078 million (31 December 2022: $2,686 million) are due within one year.
C2 Fair value measurement

C2.1 Determination of fair value
The fair values of the financial instruments for which fair valuation is required under IFRS Standards are determined by the use of quoted market
prices for exchange-quoted investments, or by using quotations from independent third parties, such as brokers and pricing services or by using
appropriate valuation techniques.
The estimated fair value of derivative financial instruments reflects the estimated amount the Group would receive or pay in an arm’s-length
transaction. This amount is determined using quoted prices if exchange listed, quotations from independent third parties or valued internally
using standard market practices.
The fair value of the subordinated and senior debt issued by the Group is determined using quoted prices from independent third parties.
Valuation approach for level 2 fair valued assets and liabilities

A significant proportion of the Group’s level 2 assets are corporate bonds, structured securities and other non-national government debt securities.
These assets, in line with market practice, are generally valued using a designated independent pricing service or quote from third-party brokers.
These valuations are subject to a number of monitoring controls, such as comparison to multiple pricing sources where available, monthly price
variances, stale price reviews and variance analysis on prices achieved on subsequent trades. For further detail on the valuation approach for level
2 fair valued assets and liabilities, refer to note C2.1 of the Group IFRS financial statements for the year ended 31 December 2022.
Valuation approach for level 3 fair valued assets and liabilities

Investments valued using valuation techniques include financial investments which by their nature do not have an externally quoted price based
on regular trades, and financial investments for which markets are no longer active as a result of market conditions, eg market illiquidity.
The Group’s valuation policies, procedures and analyses for instruments categorised as level 3 are overseen by Business Unit committees as
part of the Group’s wider financial reporting governance processes. The procedures undertaken include approval of valuation methodologies,
verification processes, and resolution of significant or complex valuation issues. In addition, the Group has minimum standards for independent
price verification to ensure valuation accuracy is regularly independently verified. Adherence to this policy is monitored across the business units.
C2.2 Fair value measurement hierarchy of Group assets and liabilities

(a) Assets and liabilities carried at fair value on the statement of financial position
The table below shows the assets and liabilities carried at fair value analysed by level of the IFRS 13 ‘Fair Value Measurement’ defined fair value
hierarchy. This hierarchy is based on the inputs to the fair value measurement and reflects the lowest level input that is significant to that
measurement.
All assets and liabilities held at fair value are classified as fair value through profit or loss at 30 June 2023. At 31 December 2022 $266 million of
financial assets were classified as available-for-sale under IAS 39 related to the Group’s retained interest in Jackson’s equity securities. All assets
and liabilities held at fair value are measured on a recurring basis.

Financial instruments at fair value
30 Jun 2023 $m
Level 1 Level 2 Level 3

Valuation Valuation
Quoted prices based on based on
(unadjusted) significant significant
in active observable unobservable
markets market inputs market inputs Total
note (i) note (ii)
Loans – 427 3 430

Equity securities and holdings in collective investment schemes 52,124 7,159 1,225 60,508
Debt securities 60,343 20,049 38 80,430

Derivative assets 329 129 – 458
Derivative liabilities (182) (285) – (467)
Total financial investments, net of derivative liabilities 112,614 27,479 1,266 141,359
Investment contract liabilities without discretionary participation features – (716) – (716)
Net asset value attributable to unit holders of consolidated investment funds (2,683) – – (2,683)
Total financial instruments at fair value 109,931 26,763 1,266 137,960
Percentage of total (%) 80% 19% 1% 100%
31 Dec 2022 $m
Level 1 Level 2 Level 3

Valuation Valuation
Quoted prices based on based on
(unadjusted) significant significant
in active observable unobservable
markets market inputs market inputs Total
note (i) note (ii)
Loans – 447 3 450

Equity securities and holdings in collective investment schemes 49,725 7,130 824 57,679

Debt securities 57,148 19,763 38 76,949
Derivative assets 82 487 – 569
Derivative liabilities (778) (223) – (1,001)
Total financial investments, net of derivative liabilities 106,177 27,604 865 134,646
Investment contract liabilities without discretionary participation features – (663) – (663)
Net asset value attributable to unit holders of consolidated investment funds (4,193) – – (4,193)
Total financial instruments at fair value 101,984 26,941 865 129,790
Percentage of total (%) 78% 21% 1% 100%
Notes
(i) Of the total level 2 debt securities of $20,049 million at 30 June 2023 (31 December 2022: $19,763 million), $10 million (31 December 2022: $37 million) are valued internally.
(ii) At 30 June 2023, the Group held $1,266 million (31 December 2022: $865 million) of net financial instruments at fair value within level 3. This represents less than 1.0 per cent of the total fair
valued financial assets, net of financial liabilities, for all periods and comprises the following:
– Equity securities and holdings in collective investment schemes of $1,225 million (31 December 2022: $824 million) consisting primarily of property and infrastructure funds held by the
participating funds, which are externally valued using the net asset value of the invested entities. Equity securities of $1 million (31 December 2022: $1 million) are internally valued,
representing less than 0.1 per cent for all periods of the total fair valued financial assets net of financial liabilities. Internal valuations are inherently more subjective than external valuations;
and
– Other sundry individual financial instruments of a net asset of $41 million (31 December 2022: $41 million).
Of the net financial instruments of $1,266 million at 30 June 2023 (31 December 2022: $865 million) referred to above:
– A net asset of $1,233 million (31 December 2022: $830 million) is held by the Group’s with-profits and unit-linked funds and therefore shareholders’ profit and equity are not immediately
impacted by movements in the valuation of these financial instruments; and

– The remaining level 3 investments comprise a net asset of $33 million (31 December 2022: $35 million) and are primarily corporate bonds valued using external prices adjusted to reflect the
specific known conditions relating to these bonds (eg distressed securities). If the value of all these level 3 financial instruments decreased by 10 per cent, the change in valuation would be
$(3) million (31 December 2022: $(4) million), which would reduce shareholders’ equity by this amount before tax.
(b) Transfers into and transfers out of levels

The Group’s policy is to recognise transfers into and out of levels as of the end of each reporting period except for material transfers which are
recognised as of the date of the event or change in circumstances that caused the transfer. Transfers are deemed to have occurred when there is a
material change in the observed valuation inputs or a change in the level of trading activities of the securities.
During the first half of 2023, the transfers between levels within the portfolios were primarily transfers from level 1 to level 2 of $1,128 million
and transfers from level 2 to level 1 of $993 million. These transfers primarily reflect the change in the observed valuation inputs of equity
securities and debt securities and, in certain cases, the change in the level of trading activities of the securities. There were no transfers from level
3 to level 2 and no transfers into level 3 in the period.

C2 Fair value measurement continued

C2.2 Fair value measurement hierarchy of Group assets and liabilities continued
(b) Transfers into and transfers out of levels continued
Reconciliation of movements in level 3 assets and liabilities measured at fair value
The following table reconciles the value of level 3 fair valued assets and liabilities at the beginning of the period to that presented at the end of the
period.
Total investment return recorded in the income statement represents interest and dividend income, realised gains and losses, unrealised gains
and losses on the assets classified at fair value through profit and loss and foreign exchange movements on an individual entity’s overseas
investments. Total gains and losses recorded in other comprehensive income comprises the translation of investments into the Group’s
presentational currency of US dollars.
Half year 2023 $m
Equity securities and

holdings in collective Debt Group
Loans investment schemes securities total
Balance at beginning of period 3 824 38 865

Total gains in income statement note – 14 3 17
Total losses recorded in other comprehensive income – (28) (3) (31)
Purchases and other additions – 417 – 417
Sales – (2) – (2)
Balance at end of period 3 1,225 38 1,266
Full year 2022 $m
Equity securities and

holdings in collective Debt Group
Loans investment schemes securities total
Balance at beginning of year 5 577 58 640

Total losses in income statement note (2) (31) (2) (35)
Total losses recorded in other comprehensive income – (6) (3) (9)
Purchases and other additions – 305 – 305
Sales – (21) – (21)
Transfers out of level 3 – – (15) (15)
Balance at end of year 3 824 38 865
Note
Of the total net gains in the income statement of $17 million at half year 2023 (full year 2022: net losses of $(35) million), $19 million (full year 2022: net losses of $(12) million) relates to net
unrealised gains and losses of financial instruments still held at the end of the period, which can be analysed as follows:
Half year 2023 Full year 2022

$m $m
Loans – (2)
Equity securities and holdings in collective investment schemes 16 (8)
Debt securities 3 (2)
Total net gains (losses) 19 (12)
(c) Assets and liabilities at amortised cost and their fair value
The table below shows the financial assets and liabilities carried at amortised cost on the statement of financial position and their fair value.
Deposits, cash and cash equivalents, accrued investment income, other debtors, accruals, deferred income and other creditors are excluded from
the analysis below, as these are carried at amortised cost which approximates fair value.
30 Jun 2023 $m 31 Dec 2022 $m
Carrying Fair Carrying Fair

value value value value
Assets:
Debt securities – – 67 67
Loans 144 173 140 206
Liabilities:
Core structural borrowings of shareholder-financed businesses (3,949) (3,560) (4,261) (3,834)
Operational borrowings (excluding lease liabilities) (554) (554) (516) (516)
Obligations under funding, securities lending and sale and repurchase agreements (617) (617) (582) (582)
Total net financial liabilities at amortised cost (4,976) (4,558) (5,152) (4,659)

The fair value of the assets and liabilities in the table above, with the exception of the subordinated and senior debt issued by the Group, has been
estimated from the discounted cash flows expected to be received or paid. The fair value of the subordinated and senior debt issued by the Group
is determined using quoted prices from independent third parties.
C2.3 Additional information on financial instruments

The following table and the accompanying notes explain the original measurement categories under IAS 39 and the new measurement
categories under IFRS 9 for each class of the Group’s financial assets and financial liabilities as at 1 January 2023 (date of initial application). The
effects of the reclassification of financial assets as a result of transition to IFRS 9 is not material.
Financial instruments

1 Jan 2023 $m

Original New
carrying value carrying value
Original classification under IAS 39 New classification under IFRS 9 under IAS 39 under IFRS 9
Financial assets
Loans note (i) Amortised cost Amortised cost 140 140
Loans/debt securities note (ii) Amortised cost Mandatorily at fair value
through profit or loss 26 27
Loans Fair value through profit or loss Mandatorily at fair value
Equity securities and portfolio holdings Fair value through profit or loss Mandatorily at fair value
in collective investment schemes through profit or loss 57,414 57,414
Equity securities Available-for-sale Fair value through other
comprehensive income 265 265
Debt securities held by Eastspring note (iii) Fair value through profit or loss Amortised cost 67 67
Other Debt securities Fair value through profit or loss Mandatorily at fair value
through profit or loss 76,922 76,922

Derivative assets Fair value through profit or loss Mandatorily at fair value
Accrued investment income Loans and receivables Amortised cost 983 983
Deposits Loans and receivables Amortised cost 6,275 6,275
Cash and cash equivalents Loans and receivables Amortised cost 5,514 5,514
Other debtors note (i) Loans and receivables Amortised cost 968 968
Financial liabilities
Investment contract liabilities Fair value through profit or loss Mandatorily at fair value
Derivative liabilities Fair value through profit or loss Mandatorily at fair value
through profit or loss 1,001 1,001
Core structural borrowings of shareholder-financed Amortised cost Amortised cost
businesses 4,261 4,261
Operational borrowings Amortised cost Amortised cost 815 815
Obligations under funding, securities lending Amortised cost Amortised cost
and sale and repurchase agreements 582 582

Net asset value attributable to unit holders Fair value through profit or loss Designated at fair value
of consolidated investment funds through profit or loss 4,193 4,193
Accruals, deferred income and other creditors note (i) Amortised cost Amortised cost 2,866 2,866
Notes
(i) In accordance with IFRS 17 requirements policy loans and debtor and creditor balances that are related to insurance contracts are included within the measurement of insurance contract
liabilities. Therefore, the amounts for these balance sheet line items as presented in this table do not include such balances.
(ii) Certain securities that were classified as loans at amortised cost under IAS 39 were reclassified to debt securities at fair value through profit or loss under IFRS 9 aligning to how these securities are
managed.
(iii) Under IAS 39, debt securities held by Eastspring were classified as FVTPL. The Group has reclassified these debt securities to the amortised cost category under IFRS 9 to align to how Eastspring
manages these securities in order to generate cash flows.

C3 Insurance and reinsurance contracts

C3.1 Group overview
The table below provides an analysis of portfolio of insurance and reinsurance (RI) contract assets and liabilities held on the Group’s statement of
financial position:
Excluding JVs and associates Including JVs and associates note
Assets Liabilities Net liabilities (assets) Assets Liabilities Net liabilities (assets)
Insurance RI Insurance RI Insurance RI Insurance RI Insurance RI Insurance RI

$m $m $m $m $m $m $m $m $m $m $m $m
As at 30 Jun 2023
Best estimate liabilities
(BEL) 3,676 794 114,648 952 110,972 158 3,710 927 132,680 992 128,970 65
Risk adjustment for
non-financial risk (RA) (533) (76) 1,490 (40) 2,023 36 (531) (59) 1,732 (43) 2,263 16
Contractual service
margin (CSM) (2,007) 1,305 17,958 38 19,965 (1,267) (2,004) 1,294 20,081 29 22,085 (1,265)
Insurance contract
balances note C3.2 1,136 2,023 134,096 950 132,960 (1,073) 1,175 2,162 154,493 978 153,318 (1,184)
Assets for insurance
acquisition cash flows 31 – – – (31) – 31 – – – (31) –
Insurance and reinsurance
contract (assets)
liabilities 1,167 2,023 134,096 950 132,929 (1,073) 1,206 2,162 154,493 978 153,287 (1,184)
As at 31 Dec 2022
(BEL) 3,540 508 107,582 1,162 104,042 654 3,562 652 124,297 1,193 120,735 541
Risk adjustment for
non-financial risk (RA) (505) (39) 1,418 (44) 1,923 (5) (502) (21) 1,662 (47) 2,164 (26)
Contractual service
margin (CSM) (1,929) 1,387 17,239 57 19,168 (1,330) (1,921) 1,369 19,383 54 21,304 (1,315)
Insurance contract
balances note C3.2 1,106 1,856 126,239 1,175 125,133 (681) 1,139 2,000 145,342 1,200 144,203 (800)
acquisition cash flows 28 – 3 – (25) – 28 – 3 – (25) –
contract (assets)
liabilities 1,134 1,856 126,242 1,175 125,108 (681) 1,167 2,000 145,345 1,200 144,178 (800)
As at 1 Jan 2022
(transition date)
(BEL) 3,818 1,752 126,438 1,474 122,620 (278) 3,993 1,916 142,146 1,501 138,153 (415)
Risk adjustment for
non-financial risk (RA) (547) (15) 1,661 (46) 2,208 (31) (575) 1 1,868 (49) 2,443 (50)
Contractual service
margin (CSM) (2,050) 1,050 21,699 (174) 23,749 (1,224) (2,161) 1,023 23,787 (176) 25,948 (1,199)
Insurance contract
balances note C3.2 1,221 2,787 149,798 1,254 148,577 (1,533) 1,257 2,940 167,801 1,276 166,544 (1,664)
acquisition cash flows 29 – – – (29) – 29 – – – (29) –
contract (assets)
liabilities 1,250 2,787 149,798 1,254 148,548 (1,533) 1,286 2,940 167,801 1,276 166,515 (1,664)
Note
The Group’s investment in joint ventures and associates is accounted for on an equity method and the Group’s share of insurance and reinsurance contract liabilities and assets as shown above relate to
the life business of CPL, India and Takaful business in Malaysia.

Adjusted shareholders’ equity
30 Jun 2023 $m 31 Dec 2022 $m
Balances Group’s share Total Balances Group’s share Total

excluding relating to including excluding relating to including
JVs and JVs and JVs and JVs and JVs and JVs and
associates associates associates associates associates associates
Shareholders’ equity 15,081 2,078 17,159 14,472 2,259 16,731

CSM, net of reinsurance 18,698 2,122 20,820 17,838 2,151 19,989
Remove: CSM asset attaching to reinsurance contracts
wholly attributable to policyholders 1,305 – 1,305 1,295 – 1,295
Less: Related tax adjustments (2,341) (498) (2,839) (2,295) (509) (2,804)

Adjusted shareholders’ equity 32,743 3,702 36,445 31,310 3,901 35,211
1 Jan 2022 (transition date) $m
Balances Group’s share Total

excluding relating to including
JVs and JVs and JVs and
associates associates associates
Shareholders’ equity 16,238 2,698 18,936

CSM, net of reinsurance 22,525 2,224 24,749
Remove: CSM asset attaching to reinsurance contracts wholly attributable to policyholders 1,144 – 1,144
Less: Related tax adjustments (2,531) (527) (3,058)
Adjusted shareholders’ equity 37,376 4,395 41,771


C3 Insurance and reinsurance contracts continued

C3.2 Analysis of movements in insurance and reinsurance contract balances by measurement component
An analysis of movements in insurance and reinsurance contract balances by measurement component and including joint ventures and
associates is set out below:
Half year 2023 $m
Insurance Reinsurance
BEL RA CSM Total BEL RA CSM Total
Opening assets (3,562) 502 1,921 (1,139) (652) 21 (1,369) (2,000)

Opening liabilities 124,297 1,662 19,383 145,342 1,193 (47) 54 1,200
Net opening balance at 1 Jan 120,735 2,164 21,304 144,203 541 (26) (1,315) (800)
Changes that relate to future service
Changes in estimates that adjust the CSM (990) 80 910 – (36) 23 13 –
Changes in estimates that result in losses or
reversal of losses on onerous contracts 128 (12) – 116 7 – – 7
New contracts in the period (1,296) 154 1,184 42 (9) (3) 12 –
(2,158) 222 2,094 158 (38) 20 25 7
Changes that relate to current service
Release of CSM to profit or loss – – (1,223) (1,223) – – 46 46
Release of risk adjustment to profit or loss – (119) – (119) – 12 – 12
Experience adjustments (258) – – (258) (2) – – (2)
(258) (119) (1,223) (1,600) (2) 12 46 56
Changes that relate to past service
Adjustments to assets/liabilities for incurred
claims 261 – – 261 29 – – 29
Insurance service result (2,155) 103 871 (1,181) (11) 32 71 92
Net finance (income) expense from insurance

contracts
Accretion of interest on GMM contracts 67 20 153 240 12 (1) (23) (12)
Other net finance (income) expense 7,350 2 1 7,353 (113) 9 (5) (109)
7,417 22 154 7,593 (101) 8 (28) (121)
Total amount recognised in income
statement 5,262 125 1,025 6,412 (112) 40 43 (29)
Effect of movements in exchange rates (1,420) (26) (244) (1,690) – 2 7 9
Total amount recognised in comprehensive
income 3,842 99 781 4,722 (112) 42 50 (20)
Cash flows
Premiums received (paid) net of ceding
commission 13,353 – – 13,353 (686) – – (686)
Insurance acquisition cash flows (2,532) – – (2,532) – – – –
Claims and other insurance service expenses paid (6,388) – – (6,388) – – – –
Recoveries from reinsurance – – – – 327 – – 327
Total cash flows 4,433 – – 4,433 (359) – – (359)
Other changes note (40) – – (40) (5) – – (5)
Closing assets (3,710) 531 2,004 (1,175) (927) 59 (1,294) (2,162)

Closing liabilities 132,680 1,732 20,081 154,493 992 (43) 29 978
Net closing balance at 30 Jun 128,970 2,263 22,085 153,318 65 16 (1,265) (1,184)

Full year 2022 $m
Insurance Reinsurance
BEL RA CSM Total BEL RA CSM Total
Opening assets (3,993) 575 2,161 (1,257) (1,916) (1) (1,023) (2,940)
Opening liabilities 142,146 1,868 23,787 167,801 1,501 (49) (176) 1,276
Net opening balance at 1 Jan 138,153 2,443 25,948 166,544 (415) (50) (1,199) (1,664)
Changes that relate to future service

Changes in estimates that adjust the CSM 4,214 (226) (3,988) – 284 10 (294) –
Changes in estimates that result in losses or
reversal of losses on onerous contracts 162 (52) – 110 (17) – – (17)

New contracts in the period (2,210) 259 2,027 76 (37) – 37 –
2,166 (19) (1,961) 186 230 10 (257) (17)
Changes that relate to current service
Release of CSM to profit or loss – – (2,413) (2,413) – – 171 171
Release of risk adjustment to profit or loss – (184) – (184) – 5 – 5
Experience adjustments (119) – – (119) (80) – – (80)
(119) (184) (2,413) (2,716) (80) 5 171 96
Changes that relate to past service
Adjustments to assets/liabilities for incurred
claims 133 1 – 134 28 – – 28
Insurance service result 2,180 (202) (4,374) (2,396) 178 15 (86) 107
Net finance (income) expense from insurance

contracts
Accretion of interest on GMM contracts 182 13 294 489 (8) (6) (39) (53)
Other net finance (income) expense (28,612) (12) 117 (28,507) 1,215 10 4 1,229
(28,430) 1 411 (28,018) 1,207 4 (35) 1,176

Total amount recognised in income
statement (26,250) (201) (3,963) (30,414) 1,385 19 (121) 1,283
Effect of movements in exchange rates (3,070) (78) (681) (3,829) 3 5 5 13
Total amount recognised in comprehensive
income (29,320) (279) (4,644) (34,243) 1,388 24 (116) 1,296
Cash flows
Premiums received (paid) net of ceding
commission 27,916 – – 27,916 (1,013) – – (1,013)
Insurance acquisition cash flows (3,690) – – (3,690) – – – –
Claims and other insurance service expenses paid (12,241) – – (12,241) – – – –
Recoveries from reinsurance – – – – 567 – – 567
Total cash flows 11,985 – – 11,985 (446) – – (446)
Other changes note (83) – – (83) 14 – – 14
Closing assets (3,562) 502 1,921 (1,139) (652) 21 (1,369) (2,000)

Closing liabilities 124,297 1,662 19,383 145,342 1,193 (47) 54 1,200
Net closing balance at 31 Dec 120,735 2,164 21,304 144,203 541 (26) (1,315) (800)
Note
Other changes include movements in insurance contract liabilities arising from adjustments to remove the incurred non-cash expenses (such as depreciation, amortisation) from insurance contract
asset/liability balance.


C3.3 Contractual service margin
The following tables illustrate when the Group expects to recognise the remaining contractual service margin in profit or loss after the reporting
date based on the assumptions and economics in place at 31 December 2022. Future new business is excluded. The amounts shown include the
Group’s share of the amounts in respect of the life joint ventures and associates of CPL, India and Takaful business in Malaysia. These are
accounted for under the equity method in a single line in the consolidated statement of financial position and hence are not included in the CSM
balance presented in the aforementioned statement.
(a) Insurance contracts – expected recognition of the contractual service margin on a discounted basis
31 Dec 2022 $m
Liabilities (Assets)
Total as reported Total segment, including

on consolidated statement Group’s share relating Group’s share relating
of financial position to JVs and associates to JVs and associates
1 year or less 1,981 219 2,200

After 1 year to 2 years 1,751 175 1,926
After 2 years to 3 years 1,555 155 1,710
After 20 years 2,602 380 2,982
19,168 2,136 21,304
(b) Reinsurance contracts – expected recognition of the contractual service margin on a discounted basis
31 Dec 2022 $m
Liabilities (Assets)
Total as reported Total segment, including

on consolidated statement Group’s share relating Group’s share relating
of financial position to JVs and associates to JVs and associates
1 year or less (122) (2) (124)

After 1 year to 2 years (111) 2 (109)
After 2 years to 3 years (100) 2 (98)
After 20 years (220) – (220)
(1,330) 15 (1,315)

C3.4 Products and determining contract liabilities
(a) Measurement of insurance and reinsurance contracts
Separating components
A contract has an investment component if there is an amount (which could be zero) that the contract requires the entity to repay to the
policyholder in all circumstances that have commercial substance. The surrender value, net of policy loans (where these exist), is accounted as the
investment component of a contract. Participating and non-participating (such as whole-life and endowment) contracts have explicit surrender
values. There are a relatively small number of products that do not have a surrender value, and the investment components of these contracts are
determined on a case-by-case basis.
At inception, the Group is required to separate distinct investment components, distinct services other than insurance contract services and
embedded derivatives from an insurance contract and account for them as if they were stand-alone contracts. An investment is distinct if and
only if (a) the insurance and investment components are not highly interrelated and (b) a contract with equivalent terms is, or could be, sold
separately in the same market or jurisdiction.

The non-distinct investment components are excluded from insurance revenue and insurance service expenses.
Asset management services for investments held under an insurance contract are not separated.
Subsequent measurement of CSM

The CSM of each group of contracts is calculated at each reporting date as follows.
The carrying amount of the CSM of contracts measured under the GMM at each reporting date is the carrying amount at the start of the year,
adjusted for: (a) the CSM of any new contracts that are added to the group in the year; (b) interest accreted at locked-in discount rate; (c) changes
in fulfilment cash flows arising from operating assumption changes that relate to future services except for those relating to onerous contracts; (d)
the effect of currency exchange differences on the CSM; and (e) the amount of CSM recognised in profit or loss in the year based on the coverage
units.
The carrying amount of the CSM of contracts measured under the VFA at each reporting date is the carrying amount at the start of the year,
adjusted for: (a) the CSM of any new contracts that are added to the group in the year; (b) the change in the amount of the Group’s share of the
fair value of the underlying items; (c) changes in fulfilment cash flows arising from both operating and economic assumption changes that relate
to future services except for those relating to onerous contracts; (d) the effect of currency exchange differences on the CSM; and (e) the amount of
CSM recognised in profit or loss in the year based on the coverage units.



C3.4 Products and determining contract liabilities continued
(a) Measurement of insurance and reinsurance contracts continued
Subsequent measurement of CSM continued
The table below provides a description of the material features of each of the key products written by the Group, together with the measurement
model used to determine their contract liabilities under IFRS 17.
Contract type Description and material features Measurement model

With-profits Provides savings and/or protection where the basic sum assured can All with-profits contracts of the Group written in
contracts (written be enhanced by a profit share (or bonus) from the underlying fund as Hong Kong, Singapore and Malaysia are
in Hong Kong, determined at the discretion of the local business unit. measured using the VFA model.
Singapore and
Malaysia) With-profits products often offer a guaranteed maturity or surrender The shareholders’ share of the excess of the
value. Declared regular bonuses are guaranteed once vested. Future assets of the with-profits funds over policyholder
bonus rates and cash dividends are not guaranteed. Market value liabilities is recognised within shareholders’
adjustments and surrender penalties are used for certain products equity.
where the law permits such adjustments. Guarantees are
predominantly supported by the segregated funds and their estates.
Additional health and protection benefits can be provided through
riders (which are not separated from the base with-profits contracts).
Other participating Similar to the with-profits contracts, other participating contracts Other participating contracts of the Group are
contracts include savings and/or protection elements, with policyholders and measured under the VFA model except for the
shareholders sharing in the returns of the underlying funds. contracts that are written by the Group’s life joint
venture, CPL, where the GMM approach is
applied.
Unit-linked Combines savings with health and protection riders (which, under Unit-linked contracts are measured either under
contracts IFRS 17, are not separated from the base contract). The cash value of the VFA or the GMM depending on the relative
the policy primarily depends on the value of the underlying unitised size of the savings and protection benefits of the
funds. contract. The larger the protection component
the more likely the contract is required to be
measured under the GMM.
Health and Shareholder-backed participating critical illness contracts are written Shareholder-backed participating critical illness
protection by the Group’s Hong Kong business. These products combine critical contracts are measured under the VFA.
– Shareholder- illness and death benefits with a savings element. These are whole
backed life products and have regular premium payments with a limited
participating payment term.
critical illness
contracts
Health and In addition to supplementary heath and protection contract Stand-alone non-par health and protection
protection – Other products attached to with-profits and unit-linked contracts described (excluding shareholder-backed participating
above, the Group also offers stand-alone health and protection critical illness) contracts are measured under the
products. GMM.
These are non-participating contracts that provide mortality and/or
morbidity benefits including health, disability, critical illness and
accident coverage.
Non-participating Non-participating savings and/or protection where the benefits are These contracts are measured under the GMM.
term, whole life and guaranteed, determined by a set of defined market-related
endowment parameters, or determined at the discretion of the local business
assurance unit. These products often offer a guaranteed maturity and/or
contracts surrender value. It is common in Asia for regulations or market-driven
demand and competition to provide some form of capital value
protection and minimum crediting interest rate guarantees. This is
reflected within the guaranteed maturity and surrender values.
Guarantees are supported by shareholders.

(b) Reinsurance contracts held
The reinsurance contracts held primarily relate to protection business written in Hong Kong. The Group’s Hong Kong business cedes insurance risk
to limit exposure to underwriting losses under various agreements that cover individual risks, group risks or defined blocks of business, on a
co-insurance, surplus, quota share, or catastrophe excess of loss basis. The amount of each risk retained depends on the evaluation of the specific
risk, subject to certain circumstances, to internally set maximum limits based on characteristics of coverage.
As required by IFRS 17, all reinsurance contracts held by the Group are measured using the General Measurement Model.
A group of reinsurance contracts held is recognised on the following date:
> Reinsurance contracts held by the Group that provide proportionate coverage: The later of the start date of the coverage period, and the date
on which any underlying insurance contract is initially recognised. This applies to the Group’s quota share reinsurance contracts.
> Other (non-proportionate) reinsurance contracts held by the Group: The earlier of beginning of the coverage period of the group of reinsurance
contracts or the recognition date of an underlying onerous group of insurance contracts issued.

> Reinsurance contracts held acquired via a business acquisition/combination: The date of the business acquisition/ combination.
On initial recognition, the CSM of a group of reinsurance contracts held represents a net cost or net gain on purchasing reinsurance. It is measured
as the equal and opposite amount of the total of (a) the fulfilment cash flows, (b) any amount arising from the derecognition of any assets or
liabilities previously recognised for cash flows related to the group, (c) any cash flows arising at that date and (d) any income recognised in profit or
loss because of onerous underlying contracts recognised at that date. However, if the net cost of purchasing reinsurance relates to past events, the
Group recognises the net cost immediately in profit or loss.
The carrying amount at the end of each reporting period of a group of reinsurance contracts held is measured in the same way as the
underlying insurance contracts under GMM.
Reinsurance contracts held are subject to the same modification requirements as insurance contracts.
C4 Intangible assets
C4.1 Goodwill
Goodwill shown on the consolidated statement of financial position at 30 June 2023 represents amounts allocated to businesses in Asia and
Africa in respect of both acquired asset management and life businesses. There has been no impairment as at 30 June 2023.

30 Jun 2023 $m 31 Dec 2022 $m
Carrying value at beginning of period 890 907

Exchange differences (11) (17)
Carrying value at end of period 879 890
C4.2 Other intangible assets

$m $m
Distribution Other
rights intangibles Total Total
note (i) note (ii)
Balance at beginning of period 3,630 254 3,884 4,015

Additions – 37 37 289
Amortisation to the income statement (190) (26) (216) (349)
Disposals and transfers – (2) (2) (6)
Exchange differences and other movements (12) (5) (17) (65)
Balance at end of period 3,428 258 3,686 3,884
Notes
(i) Distribution rights relate to amounts that have been paid or have become unconditionally due for payment as a result of past events in respect of the bancassurance partnership arrangements
for the bank distribution of Prudential’s insurance products for a fixed period of time. The distribution rights amounts are amortised on a basis to reflect the pattern in which the future economic
benefits are expected to be consumed by reference to new business production levels.
(ii) Included within other intangibles are software and licence fees.

C5 Borrowings
C5.1 Core structural borrowings of shareholder-financed businesses
30 Jun 2023 $m 31 Dec 2022 $m
Subordinated debt:
US$750m 4.875% Notes 750 750
€20m Medium Term Notes 2023 note (ii) 22 21
£435m 6.125% Notes 2031 550 520
US$1,000m 2.95% Notes 2033 995 995
Senior debt: note (i)
£300m 6.875% Notes 2023 note (ii) – 361
£250m 5.875% Notes 2029 299 281
US$1,000m 3.125% Notes 2030 987 987
US$350m 3.625% Notes 2032 346 346
Total core structural borrowings of shareholder-financed businesses 3,949 4,261
Notes
(i) The senior debt ranks above subordinated debt in the event of liquidation.
(ii) The £300 million notes were redeemed on 20 January 2023. The €20 million Medium Term Notes were redeemed on 10 July 2023.
C5.2 Operational borrowings
30 Jun 2023 $m 31 Dec 2022 $m
Borrowings in respect of short-term fixed income securities programmes (commercial paper) 529 501
Lease liabilities under IFRS 16 248 299
Other borrowings 25 15
Total operational borrowings 802 815
C6 Share capital, share premium and own shares

30 Jun 2023 31 Dec 2022
Number of Number of
ordinary Share Share ordinary Share Share
shares capital premium shares capital premium
Issued shares of 5p each fully paid: $m $m $m $m
Balance at beginning of period 2,749,669,380 182 5,006 2,746,412,265 182 5,010

Shares issued under share-based schemes 3,545,909 1 3 3,257,115 – 2
Shares issued under Hong Kong public offer and
international placing in 2021 – – – – – (6)
Balance at end of period 2,753,215,289 183 5,009 2,749,669,380 182 5,006
Options outstanding under save as you earn schemes to subscribe for shares at each period end shown below are as follows:
Number of Share price range

shares Exercisable
to subscribe for from (in pence) to (in pence) by year
30 Jun 2023 1,490,940 737p 1,455p 2028

31 Dec 2022 1,858,292 737p 1,455p 2028
Transactions by Prudential plc and its subsidiaries in Prudential plc shares

The Group buys and sells Prudential plc shares in relation to its employee share schemes through the trusts established to facilitate the delivery of
shares under employee incentive plans.
During half year 2023, the trusts purchased 2.9 million shares in respect of employee incentive plans at a cost of $42.2 million (full year 2022:
5.5 million at a cost of $76.7 million). The cost in USD shown has been calculated from the share prices in pounds sterling using the monthly
average exchange rate for the month in which those shares were purchased. A portion of these share purchases were made on the Hong Kong
Stock Exchange with the remainder being made on the London Stock Exchange.
Other than as disclosed above, the Company and its subsidiaries did not purchase, sell or redeem any Prudential plc listed securities during half
year 2023.

D Other information
D1 Corporate transactions
The gain attaching to corporate transactions as shown on the condensed consolidated income statement for half year 2022 of $62 million and
full year 2022 of $55 million arose largely from the sale of shares relating to the Group’s retained interest in Jackson post the demerger. Following
the introduction of IFRS 9 at 1 January 2023, the Group’s holding in Jackson was classified as fair value through other comprehensive income and
so the gain on the share disposal during the first half of 2023 has not been recycled to the income statement in accordance with the requirements
of the standard. As at 30 June 2023 the Group had disposed of its entire holding in Jackson.
D2 Contingencies and related obligations

There have been no material changes to the Group’s contingencies and related obligations in the six months ended 30 June 2023.
The Group is involved in various litigation and regulatory proceedings. While the outcome of such litigation and regulatory issues cannot be
predicted with certainty, the Group believes that their ultimate outcome will not have a material adverse effect on the Group’s financial condition,
results of operations, or cash flows. Litigation developments during the period include a case regarding a historic transaction connected to the
legal and beneficial ownership of 49 per cent of the ordinary shares of the holding company of Prudential Assurance Malaysia Berhad. Prudential
currently owns 51 per cent of this entity but consolidates the entity at 100 per cent reflecting the economic interest of the Group. Prudential has
been successful at court hearings relating to the transaction concerned both in the first instance and at the subsequent appeal stage. In July 2023,
the Federal Court, which is Malaysia’s highest Court, granted leave to allow the appellant to further appeal the case in the Federal Court.
D3 Post balance sheet events

First interim ordinary dividend
The 2023 first interim ordinary dividend approved by the Board of Directors after 30 June 2023 is as described in note B4.

D4 Related party transactions
There were no transactions with related parties during the six months ended 30 June 2023 which have had a material effect on the results or
financial position of the Group.
The nature of the related party transactions of the Group has not changed from those described in note D4 to the Group’s consolidated
financial statements for the year ended 31 December 2022.

Statement of Directors’ responsibilities
The Directors (who are listed below) are responsible for preparing the Prudential plc Board of Directors:
Half Year Financial Report in accordance with applicable law and Chair
regulations. Shriti Vadera
Accordingly, the Directors confirm that to the best of their
knowledge: Executive Director
Anil Wadhwani
> the condensed consolidated financial statements have been
prepared in accordance with IAS 34, ‘Interim Financial Reporting’,
Independent Non-Executive Directors
as adopted for use in the UK; and
Jeremy Anderson CBE
> the Half Year Financial Report includes a fair review of information
Arijit Basu
required by:
Chua Sock Koong
(a) DTR 4.2.7R of the Disclosure Guidance and Transparency David Law ACA
Rules, being an indication of important events that have Ming Lu
occurred during the six months ended 30 June 2023, and their George Sartorel
impact on the condensed consolidated financial statements, Claudia Suessmuth Dyckerhoff
and a description of the principal risks and uncertainties for Jeanette Wong
the remaining six months of the year; and Amy Yip
(b) DTR 4.2.8R of the Disclosure Guidance and Transparency
Rules, being related party transactions that have taken place
during the six months ended 30 June 2023 and that have
materially affected the financial position or performance of
the Group during that period; and any changes in the related
party transactions described in the Group’s consolidated
financial statements for the year ended 31 December 2022 29 August 2023
that could do so.

Independent review report to Prudential plc
Conclusion Conclusions Relating to Going Concern
We have been engaged by Prudential plc (the “Company” or the Based on our review procedures, which are less extensive than those
“Group”) to review the condensed set of consolidated financial performed in an audit as described in the Basis of Conclusion section
statements in the half-yearly financial report for the six months of this report, nothing has come to our attention to suggest that the
ended 30 June 2023 which comprises the Condensed consolidated directors have inappropriately adopted the going concern basis of
income statement, Condensed consolidated statement of accounting or that the directors have identified material uncertainties
comprehensive income, Condensed consolidated statement of relating to going concern that are not appropriately disclosed.
changes in equity, Condensed consolidated statement of financial This conclusion is based on the review procedures performed in
position, Condensed consolidated statement of cash flows and accordance with this ISRE, however future events or conditions may
related notes A1 to D4. We have read the other information cause the Group to cease to continue as a going concern.
contained in the half-yearly financial report and considered whether
it contains any apparent misstatements or material inconsistencies Responsibilities of the directors

with the information in the condensed set of financial statements. The directors are responsible for preparing the half-yearly financial
Based on our review, nothing has come to our attention that report in accordance with the Disclosure Guidance and Transparency
causes us to believe that the condensed set of financial statements in Rules of the United Kingdom’s Financial Conduct Authority.
the half-yearly financial report for the six months ended 30 June 2023 In preparing the half-yearly financial report, the directors are
is not prepared, in all material respects, in accordance with UK responsible for assessing the Group’s ability to continue as a going
adopted International Accounting Standard 34 “Interim Financial concern, disclosing, as applicable, matters related to going concern
Reporting” (IAS 34), IAS 34 as issued by the International Accounting and using the going concern basis of accounting unless the directors
Standards Board (IASB) and the Disclosure Guidance and either intend to liquidate the Group or to cease operations, or have no
Transparency Rules of the United Kingdom’s Financial Conduct realistic alternative but to do so.
Authority.
Auditor’s Responsibilities for the review of the financial
Basis for Conclusion information
We conducted our review in accordance with International Standard In reviewing the half-yearly report, we are responsible for expressing
on Review Engagements 2410 (UK) “Review of Interim Financial to the Group a conclusion on the condensed set of consolidated
Information Performed by the Independent Auditor of the Entity” financial statements in the half-yearly financial report. Our
(ISRE) issued by the Financial Reporting Council. A review of interim conclusion, including our Conclusions Relating to Going Concern, are
financial information consists of making enquiries, primarily of based on procedures that are less extensive than audit procedures, as
persons responsible for financial and accounting matters, and described in the Basis for Conclusion paragraph of this report.

applying analytical and other review procedures. A review is
Use of our report
substantially less in scope than an audit conducted in accordance
This report is made solely to the Company in accordance with
with International Standards on Auditing (UK) and consequently
guidance contained in International Standard on Review
does not enable us to obtain assurance that we would become aware
Engagements 2410 (UK) “Review of Interim Financial Information
of all significant matters that might be identified in an audit.
Performed by the Independent Auditor of the Entity” issued by the
Accordingly, we do not express an audit opinion.
Financial Reporting Council. To the fullest extent permitted by law, we
As disclosed in note A1, the annual financial statements of the
do not accept or assume responsibility to anyone other than the
Group are prepared in accordance with UK adopted international
Company, for our work, for this report, or for the conclusions we have
accounting standards and International Financial Reporting
formed.
Standards as issued by the IASB. The condensed set of financial
statements included in this half-yearly financial report has been
prepared in accordance with UK adopted IAS 34 and IAS 34 as issued
by the IASB.
Ernst & Young LLP

London
29 August 2023

EEV
financial
results
98 Index to European Embedded Value (EEV)
financial results
117 Independent review report to Prudential plc

97
Index to European Embedded Value (EEV) financial results
Page
EEV results highlights 99
Basis of preparation 100
Movement in Group EEV shareholders’ equity 101
Movement in Group free surplus 103
Notes on the EEV financial results

1 Analysis of new business profit and EEV for long-term business operations 105
2 Analysis of movement in net worth and value of in-force business for long-term business operations 106
3 Sensitivity of results for long-term business operations to alternative economic assumptions 107
4 EEV financial results for other (central) operations 109
5 Net core structural borrowings of shareholder-financed businesses 109
6 Methodology and accounting presentation 110
7 Assumptions 114
8 Insurance new business 116
9 Post balance sheet events 116
Independent review report to Prudential plc 117
Description of EEV basis reporting

The EEV financial results have been prepared in accordance with the EEV Principles issued by the European Insurance CFO Forum in 2016. All
results are stated net of tax and converted using actual exchange rates (AER) unless otherwise stated. AER are actual historical exchange rates for
the relevant accounting period. Constant exchange rate (CER) results are calculated by translating prior period results using current period foreign
currency exchange rates, ie current period average rates for the income statement and current period closing rates for the balance sheet. Where
appropriate, the EEV financial results include the effects of adoption of IFRS Standards.
The Directors are responsible for the preparation of the supplementary information in accordance with the EEV Principles. In preparing the EEV
basis supplementary information, the Directors have satisfied themselves that the Group remains a going concern. Further information is provided
in note A1 of the IFRS financial results.

European Embedded Value (EEV) financial results
EEV results highlights
Half year 2023 Half year 2022 Full year 2022
AER CER AER

$m $m % change $m % change $m
New business profit note (i) 1,489 1,098 36% 1,069 39% 2,184
Annual premium equivalent (APE) note (i) 3,027 2,213 37% 2,132 42% 4,393
New business margin (APE) (%) 49% 50% (1)ppt 50% (1)ppt 50%
Present value of new business premiums (PVNBP) 14,430 11,728 23% 11,435 26% 22,406

Operating free surplus generated notes (i)(ii) 1,024 1,224 (16)% 1,200 (15)% 2,193
EEV operating profit notes (i)(iii) 2,155 1,806 19% 1,761 22% 3,952
EEV operating profit, net of non-controlling interests 2,144 1,796 19% 1,751 22% 3,923
Operating return on average EEV shareholders’ equity,
net of non-controlling interests (%) note (iv) 10% 8% 9%
Closing EEV shareholders’ equity, net of non-controlling

interests 43,704 42,300 3% 41,907 4% 42,184
Closing EEV shareholders’ equity, net of non-controlling
interests per share (in cents) 1,588¢ 1,539¢ 3% 1,524¢ 4% 1,534
Notes
(i) Results are presented before deducting the amounts attributable to non-controlling interests. This presentation is applied consistently throughout this document, unless stated otherwise.
(ii) Operating free surplus generated is for long-term and asset management businesses only, before restructuring and IFRS 17 implementation costs, centrally incurred costs and eliminations.
(iii) Group EEV operating profit is stated after restructuring and IFRS 17 implementation costs, centrally incurred costs and eliminations.
(iv) Operating return on average EEV shareholders’ equity is calculated as EEV operating profit for the period as a percentage of average EEV basis shareholders’ equity. Half year profits are
annualised by multiplying by two.


European Embedded Value (EEV) financial results / continued
Basis of preparation
IFRS profit for insurance contracts largely reflects the level of services provided for a given period. Unearned future profits expected on those same
insurance contracts are contained in a separate liability called the contractual service margin. These future profits have been derived on a risk
neutral basis, namely without allowing for the real world investment return that will be earned on the assets held. By contrast, EEV reflects all
future profits, with no equivalent liability to the contractual service margin, but values those profits on a risk adjusted real world basis, namely
allowing for the future investment returns that are expected to be earned by the assets held but uses a higher discount rate that allows for the
uncertainties in these cash flows. The value of future new business is excluded from the embedded value. The EEV Principles provide consistent
definitions of the components of EEV, a framework for setting assumptions and an approach to the underlying methodology and disclosures. The
EEV Principles were designed to provide guidance and common principles that could be understood by both users and preparers alongside
prescribing a minimum level of disclosures to enable users to understand an entity’s methodology, assumptions and key judgements as well as the
sensitivity of an entity’s EEV to key assumptions. Results prepared under the EEV Principles represent the present value of the shareholders’ interest
in the post-tax future profits (generally on a local statutory basis) expected to arise from the current book of long-term business, after sufficient
allowance has been made for the aggregate risks in the business. The shareholders’ interest in the Group’s long-term business is the sum of the
shareholders’ total net worth and the value of in-force business.
For the purposes of preparing EEV results, insurance joint ventures and associates are included at the Group’s proportionate share of their
embedded value and not at their market value. Asset management and other non-insurance subsidiaries, joint ventures and associates are
included in the EEV results at the Group’s proportionate share of IFRS shareholders’ equity, with central Group debt shown on a market value basis.
Further information is contained in note 4.
Key features of the Group’s EEV methodology include:
> Economic assumptions: The projected post-tax profits assume a level of future investment return and are discounted using a risk discount rate.
Both the risk discount rate and the investment return assumptions are updated at each valuation date to reflect current market risk-free rates,
such that changes in market risk-free rates impact all projected future cash flows. Risk-free rates, and hence investment return assumptions, are
based on observable market data, with current market risk-free rates assumed to remain constant throughout the projection, with no trending
or mean reversion to longer-term assumptions. Different products will be sensitive to different assumptions, for example, participating products
or products with guarantees are likely to benefit disproportionately from higher assumed investment returns.
> Time value of financial options and guarantees: Explicit quantified allowances are made for the time value of financial options and guarantees
(TVOG). The TVOG is determined by weighting the probability of outcomes across a large number of different economic scenarios and is
typically less applicable to health and protection business that generally contains more limited financial options or guarantees. At 30 June
2023, the TVOG is $(308) million (31 December 2022: $(151) million). The magnitude of the TVOG at 30 June 2023 would be approximately
equivalent to a circa 7 basis point (31 December 2022: 3 basis point) increase in the weighted average risk discount rate.
> Allowance for risk in the risk discount rates: Risk discount rates are set equal to the risk-free rate at the valuation date plus product-specific
allowances for market and non-market risks. Risks that are explicitly captured elsewhere, such as via the TVOG, are not included in the risk
discount rates.
The allowance for market risk is based on a product-by-product assessment of the sensitivity of shareholder cash flows to varying market returns.
This approach reflects the inherent market risk in each product group and results in lower risk discount rates for products where the majority of
shareholder profit is uncorrelated to market risk and appropriately higher risk discount rates for products where there is greater market exposure
for shareholders.
For example, for health and protection products, which represent 51 per cent of the value of in-force business (30 June 2022: 56 per cent,
31 December 2022: 51 per cent) and 37 per cent of new business profit (30 June 2022: 42 per cent, 31 December 2022: 43 per cent), the major
sources of shareholder profits are underwriting profits or fixed shareholder charges which have low market risk sensitivity. The proportion of health
and protection business varies with interest rates as well as the mix of business sold in the current period.
The construct of UK-style with-profits or similar participating funds in some business units (representing 27 per cent of the value of in-force
(30 June 2022: 22 per cent, 31 December 2022: 26 per cent) and 12 per cent of new business profit (30 June 2022: 19 per cent, 31 December
2022: 18 per cent)) reduce the market volatility of both policyholder and shareholder cash flows due to smoothed bonus declarations and for
some markets the presence of an estate. Accordingly, 78 per cent of the value of in-force (30 June 2022: 78 per cent, 31 December 2022:
77 per cent) is products with low market risk sensitivity and this is reflected in the overall risk discount rate.
For unit-linked products where fund management charges fluctuate with the investment return, a portion of the profits will typically be more
sensitive to market risk due to the higher proportion of equity-type assets in the investment portfolio resulting in a higher risk discount rate. This
business represents 16 per cent of the value of in-force (30 June 2022: 15 per cent, 31 December 2022: 17 per cent) and 3 per cent of the value of
new business profit (30 June 2022: 12 per cent, 31 December 2022: 11 per cent) which limits the impact on the overall risk discount rate.
The remaining parts of the business (6 per cent of the value of in-force business (30 June 2022: 7 per cent, 31 December 2022: 6 per cent) and
48 per cent of the value of new business (30 June 2022: 27 per cent, 31 December 2022: 28 per cent)) relate to other products not covered by the
above. The high proportion of new business in the current period reflects the higher proportion of savings product in Hong Kong as the border
reopened.
The allowance for non-market risk comprises a base Group-wide allowance of 50 basis points plus additional allowances for emerging market
risk where appropriate. At 30 June 2023, the total allowance for non-market risk is equivalent to a $(3.0) billion (31 December 2022: $(2.8) billion)
reduction, or around (7) per cent (31 December 2022: (7) per cent) of the embedded value.

Movement in Group EEV shareholders’ equity
2023 $m 2022 $m
Insurance
and asset Other
management (central) Group Group Group
operations operations total total total
New business profit 1 1,489 – 1,489 1,098 2,184

Profit from in-force business 2 844 – 844 1,001 2,358
Long-term business 2,333 – 2,333 2,099 4,542

Asset management 132 – 132 117 234
Operating profit from long-term and asset management
businesses 2,465 – 2,465 2,216 4,776
Other income (expenditure) 4 – (221) (221) (263) (542)
Operating profit (loss) before restructuring and IFRS 17
implementation costs 2,465 (221) 2,244 1,953 4,234
Restructuring and IFRS 17 implementation costs (33) (56) (89) (147) (282)
Operating profit (loss) for the period 2,432 (277) 2,155 1,806 3,952
Short-term fluctuations in investment returns 2 323 (11) 312 (5,201) (6,874)
Effect of changes in economic assumptions 2 (92) – (92) (806) (1,571)
Profit attaching to corporate transactions – – – 62 57
Mark-to-market value movements on core structural
borrowings 5 – (38) (38) 631 865
Non-operating results 231 (49) 182 (5,314) (7,523)
Profit (loss) for the period 2,663 (326) 2,337 (3,508) (3,571)
Non-controlling interests share of (profit) loss (11) – (11) (10) (29)

Profit (loss) for the period attributable to equity holders
of the Company 2,652 (326) 2,326 (3,518) (3,600)
Equity items:
Foreign exchange movements on operations (496) 21 (475) (1,198) (1,195)
Intra-group dividends and investment in operations note (i) (958) 958 – – –
Other external dividends – (361) (361) (320) (474)
New share capital subscribed – 4 4 – (4)
Other movements note (ii) 122 (96) 26 (248) (127)
Net increase (decrease) in shareholders’ equity 1,320 200 1,520 (5,284) (5,400)
Shareholders’ equity at beginning of period 40,262 1,922 42,184 47,355 47,355
Effect of HK RBC – – – 229 229
Shareholders’ equity at beginning of period after adoption
of HK RBC 40,262 1,922 42,184 47,584 47,584
Shareholders’ equity at end of period 41,582 2,122 43,704 42,300 42,184
Contribution to Group EEV:

At end of period:
Long-term business 2 40,179 – 40,179 38,965 38,857
Asset management and other 4 650 2,122 2,772 2,586 2,565

Shareholders’ equity, excluding goodwill attributable to
equity holders 40,829 2,122 42,951 41,551 41,422
Goodwill attributable to equity holders 753 – 753 749 762
Shareholders’ equity at end of period 41,582 2,122 43,704 42,300 42,184
At beginning of period:
Shareholders’ equity, excluding goodwill attributable to
equity holders 39,500 1,922 41,422 46,577 46,577
Goodwill attributable to equity holders 762 – 762 778 778
Shareholders’ equity at beginning of period 40,262 1,922 42,184 47,355 47,355

Movement in Group EEV shareholders’ equity continued

2023 $m 2022 $m
Insurance
and asset Other
EEV shareholders’ equity per share (in cents) note (iii) operations operations total total total
At end of period:
Based on shareholders’ equity, net of goodwill attributable to equity holders 1,483¢ 77¢ 1,560¢ 1,511¢ 1,507¢
Based on shareholders’ equity at end of period 1,511¢ 77¢ 1,588¢ 1,539¢ 1,534¢
Based on shareholders’ equity, net of goodwill attributable to equity holders 1,437¢ 70¢ 1,507¢ 1,696¢ 1,696¢
Based on shareholders’ equity at beginning of period 1,464¢ 70¢ 1,534¢ 1,725¢ 1,725¢
2023 2022
Before non- After Basic Basic Basic

controlling non-controlling earnings earnings earnings
interests interests per share per share per share
EEV basis basic earnings per share note (iv) $m $m cents cents cents
Based on operating profit 2,155 2,144 78.2¢ 65.6¢ 143.4¢

Based on profit (loss) for the period 2,337 2,326 84.9¢ (128.6)¢ (131.6)¢
Notes
(i) Intra-group dividends represent dividends that have been paid in the period. Investment in operations reflects movements in share capital.
(ii) Other movements include reserve movements in respect of share-based payments, treasury shares and intra-group transfers between operations that have no overall effect on the Group’s
shareholders’ equity.
(iii) Based on the number of issued shares at 30 June 2023 of 2,753 million shares (30 June 2022: 2,749 million shares; 31 December 2022: 2,750 million shares).
(iv) Based on weighted average number of issued shares of 2,740 million shares in half year 2023 (half year 2022: 2,736 million shares; full year 2022: 2,736 million shares).

Movement in Group free surplus
Operating free surplus generation is the financial metric we use to measure the internal cash generation of our business operations and for our life
operations is generally based on (with adjustments as discussed below) the capital regimes that apply locally in the various jurisdictions in which
the Group operates. It represents amounts emerging from the in-force business during the year, net of amounts reinvested in writing new
business. For asset management businesses, it equates to post-tax adjusted operating profit for the year.
For insurance business, free surplus is generally based on (with adjustments including recognition of certain intangibles and other assets that
may be inadmissible on a regulatory basis) the excess of the regulatory basis net assets (EEV total net worth) over the EEV capital required to
support the covered business. For shareholder-backed businesses, the level of EEV required capital has been based on the Group Prescribed Capital
Requirements (GPCR) used in our GWS reporting as set out in note 6.1(e). Adjustments are also made to enable free surplus to be a better measure
of shareholders’ resources available for distribution as described in the reconciliation to GWS surplus as disclosed in note I(i) of the Additional

financial information.
For asset management and other non-insurance operations (including the Group’s central operations), free surplus is taken to be IFRS basis
shareholders’ equity, net of goodwill attributable to shareholders, with central Group debt recorded as free surplus to the extent that it is classified
as capital resources under the Group’s capital regime.
A reconciliation of EEV free surplus to the GWS shareholder capital surplus over Group Minimum Capital Requirements is also set out in note I(i)
of the Additional financial information.
2023 $m 2022 $m
Insurance
and asset Other
Note operations operations total total total
Expected transfer from in-force business 1,399 – 1,399 1,287 2,406

Expected return on existing free surplus 130 – 130 159 347
Changes in operating assumptions and experience
variances (223) – (223) (60) (227)
Operating free surplus generated from in-force long-term

business 2 1,306 – 1,306 1,386 2,526
Investment in new business note (i) 2 (414) – (414) (279) (567)
Long-term business 892 – 892 1,107 1,959
Asset management 132 – 132 117 234
Operating free surplus generated from long-term and asset
management businesses 1,024 – 1,024 1,224 2,193
Other income and expenditure 4 – (221) (221) (263) (542)
Restructuring and IFRS 17 implementation costs (32) (56) (88) (146) (277)
Operating free surplus generated 992 (277) 715 815 1,374
Non-operating free surplus generated note (ii) (53) (13) (66) (1,310) (1,924)
Free surplus generated for the period 939 (290) 649 (495) (550)
Equity items:
Net cash flows paid to parent company note (iii) (1,024) 1,024 – – –
Other external dividends – (361) (361) (320) (474)
Foreign exchange movements on operations (110) 21 (89) (247) (316)
New share capital subscribed – 4 4 – (4)
Other movements and timing differences 188 (162) 26 (248) (127)
Net movement in free surplus before non-controlling interest
and before net subordinated debt issuance/redemption (7) 236 229 (1,310) (1,471)
Net subordinated debt redemption – (397) (397) (1,699) (1,699)
Net movement in free surplus before non-controlling interest (7) (161) (168) (3,009) (3,170)
Change in amounts attributable to non-controlling interests (5) – (5) (5) (10)
Balance at the beginning of the period (as previously
reported) 6,678 5,551 12,229 14,049 14,049
Effect of HK RBC – – – 1,360 1,360
Balance at beginning of period 6,678 5,551 12,229 15,409 15,409
Balance at end of period 6,666 5,390 12,056 12,395 12,229
Representing:
Free surplus excluding distribution rights and other
intangibles 5,723 2,686 8,409 8,589 8,390
Distribution rights and other intangibles 943 2,704 3,647 3,806 3,839
Balance at end of period 6,666 5,390 12,056 12,395 12,229

Movement in Group free surplus continued

2023 $m 2022 $m
30 Jun 30 Jun 31 Dec
Insurance
and asset Other
Contribution to Group free surplus: Note operations operations total total total
At end of period:
Total 6,666 5,390 12,056 12,395 12,229
Total 6,678 5,551 12,229 14,049 14,049
Notes
(i) Free surplus invested in new business primarily represents acquisition costs and amounts set aside for required capital.
(ii) Non-operating free surplus generated for other operations represents the post-tax IFRS basis short-term fluctuations in investment returns, the movement in the mark-to-market value
adjustment on core structural borrowings which did not meet the qualifying conditions as set out in the Insurance (Group Capital) Rules and gain or loss on corporate transactions
for other entities.
(iii) Net cash flows to parent company reflect the cash remittances as included in the holding company cash flow at transaction rates. The difference to the intra-group dividends and investment
in operations in the movement in EEV shareholders’ equity primarily relates to intra-group loans, foreign exchange and other non-cash items.

Notes on the EEV financial results
1 Analysis of new business profit and EEV for long-term business operations
Half year 2023
New Annual Present value of Closing EEV

business premium new business New business New business shareholders’
profit equivalent premiums margin margin equity, excluding
(NBP) (APE) (PVNBP) (APE) (PVNBP) goodwill
$m $m $m % % $m
CPL (Prudential’s share) 171 394 1,481 43% 12% 3,131

Hong Kong 670 1,027 5,364 65% 12% 17,496
Indonesia 61 150 629 41% 10% 1,763
Malaysia 73 185 915 39% 8% 3,557

Singapore 198 386 2,441 51% 8% 7,060
Growth markets and other 316 885 3,600 36% 9% 7,172
Total long-term operations 1,489 3,027 14,430 49% 10% 40,179
Half year 2022 (AER)

$m $m $m % % $m

Hong Kong 211 227 1,774 93% 12% 17,246
Indonesia 52 110 442 47% 12% 1,956
Malaysia 70 172 845 41% 8% 3,524
Singapore 244 390 3,184 63% 8% 6,712

Half year 2022 (CER)

$m $m $m % % $m

Hong Kong 211 227 1,771 93% 12% 17,269
Indonesia 50 106 424 47% 12% 1,944
Malaysia 66 165 809 40% 8% 3,328
Singapore 249 398 3,253 63% 8% 6,902
Full year 2022 (AER)

$m $m $m % % $m

Hong Kong 384 522 3,295 74% 12% 16,576
Indonesia 125 247 1,040 51% 12% 1,833
Malaysia 159 359 1,879 44% 8% 3,695
Singapore 499 770 6,091 65% 8% 6,806
Growth markets and other 630 1,611 6,580 39% 10% 6,688
Note
The movement in new business profit from long-term operations is analysed as follows:
$m
Half year 2022 new business profit 1,098

Foreign exchange movement (29)
Sales volume 449
Effect of changes in interest rates and other economic assumptions (137)
Business mix, product mix and other items 108
Half year 2023 new business profit 1,489

Notes on the EEV financial results / continued
2 Analysis of movement in net worth and value of in-force business for long-term
business operations
2023 $m 2022 $m
Value of
Free Required Net in-force Embedded Embedded Embedded
surplus capital worth business value value value
note (i) note (i) note (i)
Balance at beginning of period

Balance at beginning of period (as
previously reported) 6,035 5,556 11,591 27,266 38,857 44,646 44,646
Effect of HK RBC – – – – – 229 229
Balance at beginning of period 6,035 5,556 11,591 27,266 38,857 44,875 44,875
New business contribution (414) 228 (186) 1,675 1,489 1,098 2,184
Existing business – transfer to net worth 1,399 (178) 1,221 (1,221) – – –
Expected return on existing business note (ii) 130 40 170 947 1,117 1,183 2,559
Changes in operating assumptions,
experience variances and
other items note (iii) (223) (5) (228) (45) (273) (182) (201)
Operating profit before restructuring and
IFRS 17 implementation costs 892 85 977 1,356 2,333 2,099 4,542
Restructuring and IFRS 17 implementation
costs (28) – (28) (1) (29) (32) (116)
Operating profit 864 85 949 1,355 2,304 2,067 4,426
Non-operating result note (iv) (53) (28) (81) 312 231 (6,014) (8,469)
Profit (loss) for the period 811 57 868 1,667 2,535 (3,947) (4,043)
Non-controlling interests share of (profit)
loss (2) – (2) (6) (8) (7) (22)
Profit (loss) for the period attributable to
equity holders of the Company 809 57 866 1,661 2,527 (3,954) (4,065)
Foreign exchange movements (103) (44) (147) (333) (480) (1,156) (1,146)
Intra-group dividends and investment in
operations (843) – (843) – (843) (832) (999)
Other movements note (v) 118 – 118 – 118 32 192
Balance at end of period 6,016 5,569 11,585 28,594 40,179 38,965 38,857
Notes
(i) Total embedded value
The total embedded value for long-term business operations at the end of each period shown below, excluding goodwill attributable to equity holders, can be analysed further as follows:
2023 $m 2022 $m
Value of in-force business before deduction of cost of capital and time value of options
and guarantees 29,636 28,442 28,126
Cost of capital (734) (693) (709)
Time value of options and guarantees note (308) (368) (151)
Net value of in-force business 28,594 27,381 27,266
Free surplus 6,016 5,960 6,035
Required capital 5,569 5,624 5,556
Net worth 11,585 11,584 11,591
Embedded value 40,179 38,965 38,857
Note
The time value of options and guarantees (TVOG) arises from the variability of economic outcomes in the future and is, where appropriate, calculated as the difference between an average
outcome across a range of economic scenarios, calibrated around a central scenario, and the outcome from the central economic scenario, as described in note 6.1(d). At 30 June 2023, the
TVOG is $(308) million, with the substantial majority arising in Hong Kong. The TVOG reflects the variability of guaranteed benefit payouts across the range of economic scenarios around
interest rates at the valuation date and represents some of the market risk for the key products in Hong Kong. As this market risk is explicitly allowed for via the TVOG, no further adjustment is
made for this within the EEV risk discount rate, as described in note 6.1(h).

(ii) Expected return on existing business
The expected return on existing business reflects the effect of changes in economic and operating assumptions in the current period, as described in note 6.2(c). The movement in this amount
compared to the prior period from long-term operations is analysed as follows:
$m
Half year 2022 expected return on existing business 1,183

Foreign exchange movement (22)
Effect of changes in interest rates and other economic assumptions (81)
Growth in opening value of in-force business and other items 37
Half year 2023 expected return on existing business 1,117
(iii) Changes in operating assumption, experience variances and other items

Overall the total impact of operating assumption changes, experience variances and other items in half year 2023 was $(273) million (half year 2022: $(182) million; full year 2022:
$(201) million) comprising changes in operating assumptions of $49 million in half year 2023 (half year 2022: $61 million; full year 2022: $32 million) and experience variances and other items
of $(322) million (half year 2022: $(243) million; full year 2022: $(233) million).
(iv) Non-operating results

The EEV non-operating result from long-term operations can be summarised as follows:
2023 $m 2022 $m
Short-term fluctuations in investment returns note (i) 323 (5,208) (6,893)

Effect of change in economic assumptions note (ii) (92) (806) (1,571)
Loss attaching to corporate transactions – – (5)
Non-operating results 231 (6,014) (8,469)
Notes
(i) The credit of $323 million in short-term fluctuations in investment returns mainly reflects higher expected investment returns given movements in interest rates, with many markets seeing a
fall in the first half of 2023, and rising equity markets in some regions.
(ii) The charge of $(92) million for effect of change in economic assumptions primarily arises from decreases in interest rates in many markets with the effect of lower assumed fund earned
rates that impact projected future cash flows being marginally greater than the benefit from future interest rates.
(v) Other reserve movements

Other movements include reserve movements in respect of intra-group loans and other intra-group transfers between operations that have no overall effect on the Group’s shareholders’ equity.

3 Sensitivity of results for long-term business operations to alternative economic assumptions
The tables below show the sensitivity of the embedded value and the new business profit for insurance business operations to:
> 1 per cent and 2 per cent increases in interest rates and 0.5 per cent decrease in interest rates. This allows for consequential changes in the
assumed investment returns for all asset classes, market values of fixed interest assets, local statutory reserves, capital requirements and risk
discount rates (but excludes changes in the allowance for market risk);
> 1 per cent rise in equity and property yields;
> 1 per cent and 2 per cent increases in the risk discount rates. The main driver for changes in the risk discount rates from period to period is
changes in interest rates, the impact of which is expected to be partially offset by a corresponding change in assumed investment returns, the
effect of which is not included in the risk discount rate sensitivities. The impact of higher investment returns can be approximated as the
difference between the sensitivity to increases in interest rates and the sensitivity to increases in risk discount rates;
> For embedded value only, 20 per cent fall in the market value of equity and property assets; and
> For embedded value only, holding the group minimum capital requirements (GMCR) under the GWS Framework in contrast to EEV required
capital based on the group prescribed capital requirements (GPCR). This reduces the level of capital and therefore the level of charge deducted
from the embedded value for the cost of locked-in required capital. This has the effect of increasing EEV.

3 Sensitivity of results for long-term business operations to alternative economic assumptions

continued
The sensitivities shown below are for the impact of instantaneous and permanent changes (with no trending or mean reversion) on the
embedded value of long-term business operations and include the combined effect on the value of in-force business and net assets (including
derivatives) held at the valuation dates indicated. The results only allow for limited management actions, such as changes to future policyholder
bonuses, where applicable. If such economic conditions persisted, the financial impacts may differ to the instantaneous impacts shown below. In
this case, management could also take additional actions to help mitigate the impact of these stresses. No change in the mix of the asset
portfolio held at the valuation date is assumed when calculating sensitivities, while changes in the market value of those assets are recognised.
The sensitivity impacts are expected to be non-linear. To aid understanding of this non-linearity, impacts of both a 1 per cent and 2 per cent
increase to interest rates and risk discount rates are shown.
If the changes in assumptions shown in the sensitivities were to occur, the effects shown below would be recorded within two components of
the profit analysis for the following period, namely the effect of changes in economic assumptions and short-term fluctuations in investment
returns. In addition to the sensitivity effects shown below, the other components of the profit for the following period would be calculated by
reference to the altered assumptions, for example new business profit and expected return on existing business.
New business profit from long-term business

$m $m
New business profit 1,489 2,184

Sensitivity to alternative economic assumptions:
Interest rates and consequential effects – 2% increase (54) 220
Interest rates and consequential effects – 1% increase (25) 134
Interest rates and consequential effects – 0.5% decrease 12 (97)
Equity/property yields – 1% rise 87 160
Risk discount rates – 2% increase (449) (551)
Risk discount rates – 1% increase (254) (309)
Embedded value of long-term business
30 Jun 2023 31 Dec 2022

$m $m
Embedded value 40,179 38,857

Sensitivity to alternative economic assumptions:
Interest rates and consequential effects – 2% increase (4,202) (3,988)
Interest rates and consequential effects – 1% increase (2,242) (2,067)
Interest rates and consequential effects – 0.5% decrease 1,181 1,058
Equity/property yields – 1% rise 2,002 1,884
Equity/property market values – 20% fall (1,969) (1,840)
Risk discount rates – 2% increase (7,852) (7,371)
Risk discount rates – 1% increase (4,462) (4,155)
Group minimum capital requirements 116 117
New business sensitivities vary with changes in business mix and APE sales volumes. In particular the directional movements in the new business
profit interest rate sensitivities from 31 December 2022 to 30 June 2023 reflect the movements in the business unit mix driven by the increase in
the APE sales growth in Hong Kong, which is more sensitive to changes in the risk discount rates than the level of future investment returns.
For a 1 per cent increase in assumed interest rates, the $(2,242) million negative effect comprises a $(4,462) million negative impact of
increasing the risk discount rate by 1 per cent, partially offset by a $2,220 million benefit from assuming 1 per cent higher investment returns.
Similarly, for a 2 per cent increase in assumed interest rates the $(4,202) million negative effect comprises a $(7,852) million negative impact of
increasing the risk discount rates by 2 per cent, partially offset by a $3,650 million benefit from higher assumed investment returns. Finally, for a
0.5 per cent decrease in assumed interest rates, there would be a $1,181 million positive effect reflecting the benefit of a 0.5 per cent reduction in
risk discount rates being partially offset by lower assumed investment returns. These offsetting impacts are sensitive to economics and the net
impact can therefore change from period to period depending on the current level of interest rates.
In order to illustrate the impact of varying specific economic assumptions, all other assumptions are held constant in the sensitivities above and,
therefore, the actual changes in embedded value were these economic effects to materialise may differ from the sensitivities shown. For example,
market risk allowances within the risk discount rate may change if interest rates change and these are not allowed for in the above. If market risk
allowances were changed as expected when interest rates are increased by 1 per cent, the expected reduction in EEV would be $(2,009) million
(compared with the $(2,242) million impact shown above). Similarly, if interest rates actually decreased by 0.5 per cent, it would lead to a
$1,039 million increase (compared with the $1,181 million increase shown above).

4 EEV results for other (central) operations
EEV results for other income and expenditure represents the post-tax IFRS results for other (central) operations (before restructuring and IFRS 17
implementation costs). It mainly includes interest costs on core structural borrowings and corporate expenditure for head office functions that are
not recharged/allocated to the insurance and asset management business.
Certain costs incurred within the head office functions are recharged to the insurance operations and recorded within the results for those
operations. The assumed future expenses within the value of in-force business for insurance operations allow for amounts expected to be
recharged by the head office functions on a recurring basis. Other costs that are not recharged to the insurance operations are shown as part of
other income and expenditure for the current period and are not included within the projection of future expenses for in-force insurance business.
In line with the EEV Principles, the allowance for the future costs of internal asset management services within the EEV results for long-term
insurance operations excludes the projected future profits or losses generated by any non-insurance entities within the Group in providing those

services (ie the EEV for long-term insurance operations includes the projected future profit or loss from asset management and service companies
that support the Group’s covered insurance businesses). Following the implementation of IFRS 17, a similar adjustment is made to eliminate the
intra-group profit within the results of central operations.
The EEV shareholders’ equity for other operations is taken to be IFRS shareholders’ equity, with central Group debt shown on a market value
basis. Free surplus for other operations is taken to be IFRS shareholders’ equity, net of goodwill attributable to equity holders, with central Group
debt recorded as free surplus to the extent that it is classified as capital resources under the Group’s capital regime. Under the GWS Framework,
debt instruments issued at the date of designation which met the transitional conditions set by the Hong Kong IA are included as GWS eligible
group capital resources. In addition, debt issued since the date of designation which met the qualifying conditions as set out in the Insurance
(Group Capital) Rules are also included as GWS eligible group capital resources.
Shareholders’ equity for other (central) operations can be compared across metrics as shown in the table below.
2023 $m 2022 $m
IFRS basis shareholders’ equity 1,733 1,758 1,495

Mark-to-market value adjustment on central borrowings note 5 389 193 427
EEV basis shareholders’ equity 2,122 1,951 1,922
Debt instruments treated as capital resources 3,268 3,849 3,629

Free surplus of other (central) operations 5,390 5,800 5,551
5 Net core structural borrowings of shareholder-financed businesses

2023 $m 2022 $m

Mark-to- EEV Mark-to- EEV Mark-to- EEV
market basis at market basis at market basis at
IFRS value market IFRS value market IFRS value market
basis adjustment value basis adjustment value basis adjustment value
note (ii) note (iii) note (iii) note (ii) note (iii)
Holding company cash and short-term

investments note (i) (3,314) – (3,314) (2,143) – (2,143) (3,057) – (3,057)
Central borrowings:
Subordinated debt 2,317 (265) 2,052 2,289 (173) 2,116 2,286 (306) 1,980
Senior debt 1,632 (124) 1,508 1,977 (20) 1,957 1,975 (121) 1,854
Total central borrowings 3,949 (389) 3,560 4,266 (193) 4,073 4,261 (427) 3,834
Net core structural borrowings of
shareholder-financed businesses 635 (389) 246 2,123 (193) 1,930 1,204 (427) 777
Notes
(i) Holding company includes centrally managed Group holding companies. The definition of holding company cash and short-term investments was updated at 31 December 2022 ie holding
company includes central holding and service companies. Further information is provided in note I(iv) of the Additional financial information.
(ii) As recorded in note C5.1 of the IFRS financial results.
(iii) The movement in the value of core structural borrowings includes issuances and redemptions in the period and foreign exchange effects for pounds sterling denominated debts. The movement
in the mark-to-market value adjustment can be analysed as follows:
2023 $m 2022 $m
Mark-to-market value adjustment at beginning of period (427) 438 438

Credit included in the income statement 38 (631) (865)
Mark-to-market value adjustment at end of period (389) (193) (427)

6 Methodology and accounting presentation

6.1 Methodology
(a) Covered business
The EEV basis results for the Group are prepared for ‘covered business’ as defined by the EEV Principles. Covered business represents the Group’s
long-term insurance business (including the Group’s investments in joint venture and associate insurance operations), for which the value of new
and in-force contracts is attributable to shareholders. The definition of long-term insurance business comprises those contracts falling under the
definition for regulatory purposes.
The EEV results for the Group’s covered business are then combined with the post-tax IFRS results of the Group’s asset management and other
operations (including interest costs on core structural borrowings and corporate expenditure for head office functions that is not recharged/
allocated to the insurance operations), with an adjustment to deduct the unwind of expected margins on the internal management of the assets
of the covered business. Under the EEV Principles, the results for covered business incorporate the projected margins of attaching internal asset
management, as described in note (g) below.
(b) Valuation of in-force and new business

The EEV basis results are prepared incorporating best estimate assumptions about all relevant factors including levels of future investment
returns, persistency, mortality, morbidity and expenses, as described in note 7(c). These assumptions are used to project future cash flows. The
present value of the projected future cash flows is then calculated using a discount rate, as shown in note 7(a), which reflects both the time value
of money and all other non-diversifiable risks associated with the cash flows that are not otherwise allowed for.
The total profit that emerges over the lifetime of an individual contract as calculated under the EEV basis is the same as that calculated under
the IFRS basis. Since the EEV basis reflects discounted future cash flows, under the EEV methodology the profit emergence is advanced, thus more
closely aligning the timing of the recognition of profit with the efforts and risks of current management actions, particularly with regard to
business sold during the period.
New business
In determining the EEV basis value of new business, premiums are included in projected cash flows on the same basis of distinguishing regular
and single premium business as set out in the Group’s new business sales reporting.
New business premiums reflect those premiums attaching to the covered business, including premiums for contracts classified as investment
contracts under IFRS 17. New business premiums for regular premium products are shown on an annualised basis.
New business profit represents profit determined by applying operating and economic assumptions as at the end of the period. New business
profitability is a key metric for the Group’s management of the development of the business. In addition, new business margins are shown by
reference to annual premium equivalent (APE) and the present value of new business premiums (PVNBP). These margins are calculated as the
percentage of the value of new business profit to APE and PVNBP. APE is calculated as the aggregate of regular premiums on new business written
in the period and one-tenth of single premiums. PVNBP is calculated as the aggregate of single premiums and the present value of expected
future premiums from regular premium new business, allowing for lapses and the other assumptions made in determining the EEV new
business profit.
(c) Cost of capital

A charge is deducted from the embedded value for the cost of locked-in required capital supporting the Group’s long-term business. The cost is the
difference between the nominal value of the capital held and the discounted value of the projected releases of this capital, allowing for post-tax
investment earnings on the capital.
The EEV results are affected by the movement in this cost from period to period, which comprises a charge against new business profit and
generally a release in respect of the reduction in capital requirements for business in force as this runs off.
Where required capital is held within a with-profits long-term fund, the value placed on surplus assets within the fund is already adjusted to
reflect its expected release over time and so no further adjustment to the shareholder position is necessary.
(d) Financial options and guarantees

Nature of financial options and guarantees
Participating products, principally written in the Chinese Mainland, Hong Kong, Malaysia, Singapore and Taiwan, have both guaranteed and
non-guaranteed elements. These products provide returns to policyholders through bonuses that are smoothed. There are two types of bonuses:
regular and final. Regular bonuses are declared once a year and, once credited, are guaranteed in accordance with the terms of the particular
products. Final bonuses are guaranteed only until the next bonus declaration.
There are also various non-participating long-term products with guarantees. The principal guarantees are those for whole-of-life contracts
with floor levels of policyholder benefits that typically accrue at rates set at inception and do not vary subsequently with market conditions.
Similar to participating products, the policyholder charges incorporate an allowance for the cost of providing these guarantees, which, for
certain whole-of-life products in Hong Kong, remains constant throughout varying economic conditions, rather than reducing as the economic
environment improves and vice versa.

Time value
The value of financial options and guarantees comprises the intrinsic value (arising from a deterministic valuation on best estimate assumptions)
and the time value (arising from the variability of economic outcomes in the future).
Where appropriate (ie where financial options and guarantees are explicitly valued under the EEV methodology), a full stochastic valuation has
been undertaken to determine the time value of financial options and guarantees. The economic assumptions used for the stochastic calculations
are consistent with those used for the deterministic calculations. Assumptions specific to the stochastic calculations reflect local market conditions
and are based on a combination of actual market data, historic market data and an assessment of long-term economic conditions. Common
principles have been adopted across the Group for the stochastic asset models, such as separate modelling of individual asset classes with an
allowance for correlations between various asset classes. Details of the key characteristics of each model are given in note 7(b).
In deriving the time value of financial options and guarantees, management actions in response to emerging investment and fund solvency
conditions have been modelled. Management actions encompass, but are not confined to, investment allocation decisions, levels of regular and
final bonuses and credited rates. Bonus rates are projected from current levels and varied in accordance with assumed management actions

applying in the emerging investment and fund solvency conditions. In all instances, the modelled actions are in accordance with approved local
practice and therefore reflect the options available to management.
(e) Level of required capital and net worth

In adopting the EEV Principles, Prudential has based required capital on the applicable local statutory regulations, including any amounts
considered to be required above the local statutory minimum requirements to satisfy regulatory constraints.
For shareholder-backed businesses, the level of required capital has been based on the GPCR.
> For CPL operations, the level of required capital follows the approach for embedded value reporting issued by the China Association of
Actuaries (CAA) reflecting the C-ROSS regime. The CAA has started a project to assess whether any changes are required to the embedded
value guidance in the Chinese Mainland given changes in regulatory rules, regulations and the external market environment since the standard
was first issued. To date, no outcomes have been proposed by the CAA and Prudential has made no change to its EEV basis for CPL in half year
2023. At such time that there is a new basis, Prudential will consider the effect of proposals.
> For Hong Kong participating business, the HK RBC regime recognises the value of future shareholder transfers on an economic basis as
available capital with an associated required capital. Within EEV, the shareholder value of participating business continues to be recognised as
VIF with no recognition within free surplus and no associated required capital.
> For Singapore life operations, the level of net worth and required capital is based on the Tier 1 Capital position under the risk-based capital
framework (RBC2), which removes certain negative reserves permitted to be recognised in the full RBC2 regulatory position applicable to the

Group’s GWS capital position, in order to better reflect free surplus and its generation.
Free surplus is the shareholders’ net worth in excess of required capital. For the Hong Kong business, the HK RBC framework requires liabilities to be
valued on a best estimate basis and capital requirements to be risk based. EEV free surplus excludes regulatory surplus that arises where HK RBC
technical provisions are lower than policyholder asset shares or cash surrender values to more realistically reflect how the business is managed.
(f) With-profits business and the treatment of the estate

For the Group’s relevant operations, the proportion of surplus allocated to shareholders from the with-profits funds has been based on the
applicable profit distribution between shareholders and policyholders. The EEV methodology includes the value attributed to the shareholders’
interest in the residual estate of the in-force with-profits business. In any scenarios where the total assets of the life fund are insufficient to meet
policyholder claims in full, the excess cost is fully attributed to shareholders. As required, adjustments are also made to reflect any capital
requirements for with-profits business in excess of the capital resources of the with-profits funds.
(g) Internal asset management

In line with the EEV Principles, the in-force and new business results from long-term business include the projected future profit or loss from asset
management and service companies that support the Group’s covered insurance businesses. The results of the Group’s asset management
operations include the current period profit from the management of both internal and external funds. EEV basis shareholders’ other income and
expenditure is adjusted to deduct the expected profit anticipated to arise in the current period in the opening VIF from internal asset
management and other services. This deduction is on a basis consistent with that used for projecting the results for covered insurance business.
Accordingly, Group operating profit includes the actual profit earned in respect of the management of these assets.

6 Methodology and accounting presentation continued

6.1 Methodology continued
(h) Allowance for risk and risk discount rates
Overview
Under the EEV Principles, discount rates used to determine the present value of expected future cash flows are set by reference to risk-free rates
plus a risk margin.
The risk-free rates are largely based on local government bond yields at the valuation date and are assumed to remain constant throughout the
projection, with no trending or mean reversion to longer-term assumptions that cannot be observed in the current market.
The risk margin reflects any non-diversifiable risk associated with the emergence of distributable earnings that is not allowed for elsewhere in
the valuation. In order to better reflect differences in relative market risk volatility inherent in each product group, Prudential sets the risk discount
rates to reflect the expected volatility associated with the expected future shareholder cash flows for each product group in the embedded value
model, rather than at a Group level.
Where financial options and guarantees are explicitly valued under the EEV methodology, risk discount rates exclude the effect of these product
features.
The risk margin represents the aggregate of the allowance for market risk and allowance for non-diversifiable non-market risk. No allowance is
required for non-market risks where these are assumed to be fully diversifiable.
Market risk allowance

The allowance for market risk represents the beta multiplied by the equity risk premium.
The beta of a portfolio or product measures its relative market risk. The risk discount rates reflect the market risk inherent in each product group
and hence the volatility of product-specific cash flows. These are determined by considering how the profit from each product is affected by
changes in expected returns across asset classes. By converting this into a relative rate of return, it is possible to derive a product-specific beta. This
approach contrasts with a top-down approach to market risk where the risks associated with each product are not directly reflected in the
valuation basis.
The Group’s methodology allows for credit risk in determining the best estimate returns and through the market risk allowance, which covers
expected long-term defaults, a credit risk premium (to reflect the volatility in downgrade and default levels) and short-term downgrades and
defaults.
Allowance for non-diversifiable non-market risks

The majority of non-market and non-credit risks are considered to be diversifiable. An allowance for non-diversifiable non-market risks is estimated
as set out below.
A base level allowance of 50 basis points is applied to cover the non-diversifiable non-market risks associated with the Group’s covered business.
For the Group’s businesses in less mature markets (such as the Philippines, Thailand and Africa) additional allowances of 250 basis points, or
higher where there is more uncertainty, are applied. The level and application of these allowances are reviewed and updated based on an
assessment of the Group’s exposure and experience in the markets. For the Group’s business in more mature markets, no additional allowance is
necessary. At 30 June 2023, the total allowance for non-diversifiable non-market risk is equivalent to a $(3.0) billion, or (7) per cent, reduction to
the embedded value of long-term business operations.
(i) Foreign currency translation

Foreign currency profits and losses have been translated at average exchange rates for the period. Foreign currency transactions are translated at
the spot rate prevailing at the date of the transactions. Foreign currency assets and liabilities have been translated at closing exchange rates. The
principal exchange rates are shown in note A1 of the Group IFRS financial results.
(j) Taxation
In determining the post-tax profit for the period for covered business, the overall tax rate includes the impact of tax effects determined on a local
regulatory basis. Tax payments and receipts included in the projected future cash flows to determine the value of in-force business are calculated
using tax rates that have been announced and substantively enacted by the end of the reporting period.

6.2 Accounting presentation
(a) Analysis of post-tax profit or loss
To the extent applicable, the presentation of the EEV profit or loss for the period is consistent with the classification between operating and
non-operating results that the Group applies for the analysis of IFRS results. Operating results are determined as described in note (b) below and
incorporate the following:
> New business profit, as defined in note 6.1(b) above;
> Expected return on existing business, as described in note (c) below;
> The impact of routine changes of estimates relating to operating assumptions, as described in note (d) below; and
> Operating experience variances, as described in note (e) below.
In addition, operating results include the effect of changes in tax legislation, unless these changes are one-off and structural in nature, or primarily
affect the level of projected investment returns, in which case they are reflected as a non-operating result.

Non-operating results comprise:
> Short-term fluctuations in investment returns;
> Mark-to-market value movements on core structural borrowings;
> Effect of changes in economic assumptions; and
> The impact of corporate transactions, if any, undertaken in the period.
Total profit or loss in the period attributable to shareholders and basic earnings per share include these items, together with actual investment
returns. The Group believes that operating profit, as adjusted for these items, better reflects underlying performance.
(b) Investment returns included in operating profit

For the investment element of the assets covering the total net worth of long-term insurance business, investment returns are recognised in
operating results at the expected long-term rates of return. These expected returns are calculated by reference to the asset mix of the portfolio.
(c) Expected return on existing business

Expected return on existing business comprises the expected unwind of discounting effects on the opening value of in-force business and required
capital and the expected return on existing free surplus. The unwind of discount and the expected return on existing free surplus are determined
after adjusting for the effect of changes in economic and operating assumptions in the current period on the embedded value at the beginning of
the period, for example, the unwind of discount on the value of in-force business and required capital is determined after adjusting both the

opening value and the risk discount rates for the effect of changes in economic and operating assumptions in the current period.
(d) Effect of changes in operating assumptions

Operating profit includes the effect of changes to operating assumptions on the value of in-force business at the end of the reporting period. For
presentational purposes the effect of changes is delineated to show the effect on the opening value of in-force business as operating assumption
changes, with the experience variances subsequently being determined by reference to the assumptions at the end of the reporting period, as
discussed below.
(e) Operating experience variances

Operating profit includes the effect of experience variances on operating assumptions, such as persistency, mortality, morbidity, expenses and
other factors, which are calculated with reference to the assumptions at the end of the reporting period.
(f) Effect of changes in economic assumptions

Movements in the value of in-force business at the beginning of the period caused by changes in economic assumptions, net of the related
changes in the time value of financial options and guarantees, are recorded in non-operating results.

7 Assumptions
(a) Principal economic assumptions
The EEV results for the Group’s covered business are determined using economic assumptions where both the risk discount rates and long-term
expected rates of return on investments are set with reference to risk-free rates of return at the end of the reporting period. Both the risk discount
rate and expected rates of return are updated at each valuation date to reflect current market risk-free rates, with the effect that changes in
market risk-free rates impact all projected future cash flows. The risk-free rates of return are largely based on local government bond yields and are
assumed to remain constant throughout the projection, with no trending or mean reversion to longer-term assumptions that cannot be observed
in the current market. The risk-free rates of return are shown below for each of the Group’s insurance operations. Expected returns on equity and
property assets and corporate bonds are derived by adding a risk premium to the risk-free rate based on the Group’s long-term view and, where
relevant, allowing for market volatility.
As described in note 6.1(h), risk discount rates are set equal to the risk-free rate at the valuation date plus allowances for market risk and
non-diversifiable non-market risks appropriate to the features and risks of the underlying products and markets.
Risks that are explicitly allowed for elsewhere in the EEV basis, such as via the cost of capital and the time value of options and guarantees, as
set out in note 2(i), are not included in the risk discount rates.
Risk discount rate %
New business In-force business
2023 2022 2023 2022
30 Jun 30 Jun 31 Dec 30 Jun 30 Jun 31 Dec
CPL 7.2 7.4 7.4 7.2 7.4 7.4

Hong Kong note (i) 4.6 3.9 4.8 5.4 4.5 5.5
Indonesia 9.1 10.7 10.0 9.8 11.3 10.6
Malaysia 5.7 6.1 5.8 6.3 6.7 6.5
Philippines 13.6 14.6 14.5 13.6 14.6 14.5
Singapore 4.9 4.9 5.0 5.1 5.1 5.2
Taiwan 3.6 3.4 3.5 4.1 4.1 4.0
Thailand 9.9 10.4 10.0 9.9 10.4 10.0
Vietnam 4.2 5.3 6.9 4.4 5.1 6.7
Total weighted average note (ii) 5.9 6.5 6.9 6.0 5.9 6.4
10-year government bond yield % Equity return (geometric) %
2023 2022 2023 2022
30 Jun 30 Jun 31 Dec 30 Jun 30 Jun 31 Dec
CPL 2.7 2.9 2.9 6.7 6.9 6.9

Hong Kong note (i) 3.8 3.0 3.9 7.3 6.5 7.4
Indonesia 6.6 7.9 7.3 10.8 12.1 11.5
Malaysia 3.9 4.3 4.1 7.4 7.8 7.6
Philippines 6.4 7.4 7.3 10.6 11.6 11.5
Singapore 3.0 3.0 3.1 6.5 6.5 6.6
Taiwan 1.3 1.3 1.3 5.3 5.3 5.3
Thailand 2.6 3.1 2.7 6.9 7.4 7.0
Vietnam 2.7 3.4 5.0 7.0 7.6 9.3
Total weighted average (new business) note (ii) 3.9 3.8 4.2 7.2 7.2 7.5
Total weighted average (in-force business) note (ii) 3.8 3.6 4.0 7.3 7.2 7.6
Notes
(i) For Hong Kong, the assumptions shown are for US dollar denominated business. For other businesses, the assumptions shown are for local currency denominated business.
(ii) Total weighted average assumptions have been determined by weighting each business’s assumptions by reference to the EEV basis new business profit and the closing net value of in-force
business. The changes in the risk discount rates for individual businesses reflect the movements in the local government bond yields, changes in the allowance for market risk (including as a result
of changes in asset mix) and changes in product mix.
(iii) Expected long-term inflation assumptions range from 1.5 per cent to 5.5 per cent for all periods shown above.

(b) Stochastic assumptions
Details are given below of the key characteristics of the models used to determine the time value of financial options and guarantees as referred
to in note 6.1(d).
> The stochastic cost of guarantees is primarily of significance for the Hong Kong, Malaysia, Singapore, Taiwan and Vietnam businesses;
> The principal asset classes are government bonds, corporate bonds and equity;
> The interest rates are projected using a stochastic interest rate model calibrated to the current market yields;
> The equity returns are assumed to follow a log-normal distribution;
> The corporate bond return is calculated based on a risk-free return plus a mean-reverting spread;
> The volatility of equity returns ranges from 17 per cent to 35 per cent for all periods; and
> The volatility of government bond yields ranges from 1.1 per cent to 2.0 per cent for all periods.

(c) Operating assumptions
Best estimate assumptions are used for projecting future cash flows, where best estimate is defined as the mean of the distribution of future
possible outcomes. The assumptions are reviewed actively and changes are made when evidence exists that material changes in future
experience are reasonably certain. Where experience is expected to be adverse over the short term, a provision may be established.
Assumptions required in the calculation of the time value of financial options and guarantees, for example relating to volatilities and
correlations, or dynamic algorithms linking liabilities to assets, have been set equal to the best estimates and, wherever material and practical,
reflect any dynamic relationships between the assumptions and the stochastic variables.
Demographic assumptions
Persistency, mortality and morbidity assumptions are based on an analysis of recent experience, and reflect expected future experience. When
projecting future cash flows for medical reimbursement business that is repriced annually, explicit allowance is made for expected future premium
inflation and separately for future medical claims inflation.
Expense assumptions
Expense levels, including those of the service companies that support the Group’s long-term business, are based on internal expense analysis and
are appropriately allocated to acquisition of new business and renewal of in-force business. For mature business, in general, it is Prudential’s policy
not to take credit for future cost reduction programmes until the actions to achieve the savings have been delivered. An allowance is made for
short-term required expenses that are not representative of the longer-term expense loadings of the relevant businesses. At 30 June 2023, the

allowance held for these costs across the Group was $(120) million. If future expense overruns are expected to be short-lived, they are capitalised
and subsequently amortised against future overruns.
Expenses comprise costs borne directly and costs recharged from the Group head office functions that are attributable to the long-term
insurance (covered) business. The assumed future expenses for the long-term insurance business allow for amounts expected to be recharged by
the head office functions. Development expenses are allocated to covered business and are charged as incurred.
Corporate expenditure, which is included in other income and expenditure, comprises expenditure of the Group head office functions that is not
recharged/allocated to the long-term insurance or asset management operations, primarily for corporate-related activities that are charged as
incurred, together with restructuring and IFRS 17 implementation costs incurred across the Group as recorded in note B1.1 of the Group IFRS
financial results.
Tax rates
The assumed long-term effective tax rates for operations reflect the expected incidence of taxable profit or loss in the projected future cash flows
as explained in note 6.1(j). The local standard corporate tax rates applicable are as follows:
CPL 25.0
Hong Kong 16.5% on 5% of premium income
Indonesia 22.0
Malaysia 24.0
Philippines 25.0
Singapore 17.0
Taiwan 20.0
Thailand 20.0
Vietnam 20.0

8 Insurance new business

Present value of new business
Single premiums Regular premiums Annual premium equivalents (APE) premiums (PVNBP)
2023 $m 2022 $m 2023 $m 2022 $m 2023 $m 2022 $m 2023 $m 2022 $m
Half Half Full Half Half Full Half Half Full Half Half Full
AER year year year year year year year year year year year year
CPL note (i) 397 858 1,254 355 421 759 394 507 884 1,481 2,119 3,521
Hong Kong 116 656 842 1,015 162 438 1,027 227 522 5,364 1,774 3,295
Indonesia 132 120 250 137 98 222 150 110 247 629 442 1,040
Malaysia 46 45 99 180 168 350 185 172 359 915 845 1,879
Singapore 535 1,715 2,628 332 219 507 386 390 770 2,441 3,184 6,091
Growth markets:
Africa 4 4 9 84 75 148 85 76 149 170 151 308
Cambodia 1 – – 9 7 18 9 7 18 38 30 69
India note (ii) 130 135 273 115 106 196 128 120 223 619 609 1,148
Laos – – – – – – – – – 1 – 1
Myanmar – – – 3 1 3 3 1 3 8 4 6
Philippines 38 36 61 90 84 176 94 87 182 331 297 615
Taiwan 54 86 157 335 271 486 339 281 503 1,254 994 1,835
Thailand 71 72 150 111 92 220 118 99 235 470 394 932
Vietnam 8 66 99 108 130 288 109 136 298 709 885 1,666
Total 1,532 3,793 5,822 2,874 1,834 3,811 3,027 2,213 4,393 14,430 11,728 22,406
Notes
(i) New business in CPL is included at Prudential’s 50 per cent interest in the joint venture.
(ii) New business in India is included at Prudential’s 22 per cent interest in the associate.
(iii) The table above is provided as an indicative volume measure of transactions undertaken in the reporting period that have the potential to generate profit for shareholders. The amounts shown
are not, and not intended to be, reflective of revenue recorded in the Group IFRS income statement.
9 Post balance sheet events

First interim ordinary dividend
The 2023 first interim ordinary dividend approved by the Board of Directors after 30 June 2023 is as described in note B4 of the IFRS financial
results.

Independent review report to Prudential plc
Conclusion Conclusions Relating to Going Concern
We have been engaged by Prudential plc (‘the Company’ or ‘the Based on our review procedures, which are less extensive than those
Group’) to review the European Embedded Value (‘EEV’) Financial performed in an audit as described in the Basis of Conclusion section
Results in the half-yearly financial report for the six months ended of this report, nothing has come to our attention to suggest that the
30 June 2023 which comprise the EEV Results Highlights, Basis of directors have inappropriately adopted the going concern basis of
Preparation, the Movement in Group EEV Shareholders’ Equity, the accounting or that the directors have identified material uncertainties
Movement in Group Free Surplus and the related explanatory notes 1 relating to going concern that are not appropriately disclosed.
to 9. The EEV Financial Results should be read in conjunction with the This conclusion is based on the review procedures performed in
condensed set of IFRS financial statements in the half-yearly financial accordance with ISRE 2410 (UK), however future events or conditions
report. We have read the other information contained in the may cause the Group to cease to continue as a going concern.
half-yearly financial report and considered whether it contains any
apparent misstatements or material inconsistencies with the EEV Responsibilities of the directors

Financial Results. The directors are responsible for preparing the EEV Financial Results
Based on our review, nothing has come to our attention that in accordance with the EEV Principles using the methodology and
causes us to believe that the EEV Financial Results in the half-yearly assumptions set out in the notes to the EEV Financial Results.
financial report for the six months ended 30 June 2023 are not In preparing the EEV Financial Results, the directors are
prepared, in all material respects, in accordance with the European responsible for assessing the Group’s ability to continue as a going
Embedded Value Principles issued by the European Insurance CFO concern, disclosing, as applicable, matters related to going concern
Forum in 2016 (‘the EEV Principles’), using the methodology and and using the going concern basis of accounting unless the directors
assumptions set out in the notes to the EEV Financial Results. either intend to liquidate the Group or to cease operations, or have no
realistic alternative but to do so.
Basis for Conclusion
We conducted our review in accordance with International Standard Auditor’s Responsibilities for the review of the financial
on Review Engagements 2410 (UK) “Review of Interim Financial information
Information Performed by the Independent Auditor of the Entity” In reviewing the EEV Financial Results, we are responsible for
(ISRE) issued by the Financial Reporting Council. A review of interim expressing to the Group a conclusion on the EEV Financial Results in
financial information consists of making enquiries, primarily of the half-yearly financial report. Our conclusion, including our
persons responsible for financial and accounting matters, and Conclusions Relating to Going Concern, are based on procedures that
applying analytical and other review procedures. A review is are less extensive than audit procedures, as described in the Basis for
substantially less in scope than an audit conducted in accordance Conclusion paragraph of this report.

with International Standards on Auditing (UK) and consequently
Use of our report
does not enable us to obtain assurance that we would become aware
This report is made solely to the Company in accordance with the
of all significant matters that might be identified in an audit.
terms of our engagement letter to provide a review conclusion to the
Accordingly, we do not express an audit opinion.
Company on the EEV Financial Results. Our review of the EEV
Emphasis of Matter - basis of preparation for the EEV Financial Results has been undertaken so that we might state to the
Financial Results Company those matters we have been engaged to state in this report
We draw attention to the Basis of Preparation of the EEV Financial and for no other purpose. To the fullest extent permitted by law, we
Results. The EEV Financial Results are prepared to provide additional do not accept or assume responsibility to anyone other than the
information to the users of the half-yearly financial report. As a result, Company, for our work, for this report, or for the conclusions we have
the EEV Financial Results may not be suitable for another purpose. formed.
Our opinion is not modified in respect of this matter.
Ernst & Young LLP

London
29 August 2023

Additional
information
120 Index to the additional financial information
137 Risk factors
150 Corporate governance
151 Disclosure of interests of Directors
153 Shareholder information
155 How to contact us

119
Index to the additional financial information*
Page
I Additional financial information 121
(i) Group capital position 121
(ii) Analysis of total segment profit by business unit 126
(iii) Group funds under management 128
(iv) Holding company cash flow 128
(v) Share Schemes 129
II Calculation of alternative performance measures 132
(i) Reconciliation of adjusted operating profit to profit before tax 132
(ii) Adjusted shareholders’ equity 132
(iii) Return on IFRS shareholders’ equity 132
(iv) Calculation of shareholders’ equity per share 133
(v) Calculation of Eastspring cost/income ratio 133
(vi) Insurance premiums 134
(vii) Reconciliation between EEV new business profit and IFRS new business CSM 134
(viii) Reconciliation between EEV shareholders' equity and IFRS shareholders’ equity 135
(ix) Calculation of return on embedded value 135
* The additional financial information is not covered by the EY independent review opinions.

Additional financial information
I Additional financial information
I(i) Group capital position
Prudential applies the Insurance (Group Capital) Rules set out in the Group-wide Supervision (GWS) Framework issued by the Hong Kong IA
to determine group regulatory capital requirements (both minimum and prescribed levels). For regulated insurance entities, the capital resources
and required capital included in the GWS capital measure for Hong Kong IA Group regulatory purposes are based on the local solvency regime
applicable in each jurisdiction. The Group holds material participating business in Hong Kong, Singapore and Malaysia. Alongside the total
regulatory GWS capital basis, a shareholder GWS capital basis is also presented which excludes the contribution to the Group GWS eligible group
capital resources, the Group Minimum Capital Requirements (GMCR) and the Group Prescribed Capital Requirements (GPCR) from these
participating funds.

Estimated GWS capital position
As at 30 June 2023, the estimated shareholder GWS capital surplus over the GPCR is $15.5 billion (31 December 2022: $15.6 billion), representing
a coverage ratio of 295 per cent (31 December 2022: 307 per cent) and the estimated total GWS capital surplus over the GPCR is $18.2 billion
(31 December 2022: $18.1 billion), representing a coverage ratio of 194 per cent (31 December 2022: 202 per cent). The estimated Group Tier 1
capital resources are $18.1 billion with headroom over the GMCR of $12.5 billion (31 December 2022: $12.1 billion), representing a coverage ratio
of 323 per cent (31 December 2022: 328 per cent).
30 Jun 2023 31 Dec 2022 note (1)
Add Add Change

Shareholder policyholder Total Shareholder policyholder Total in total
note (3) note (4) note (3) note (4) note (5)
Group capital resources ($bn) 23.4 14.0 37.4 23.2 12.6 35.8 1.6
of which: Tier 1 capital resources ($bn) note (2) 16.4 1.7 18.1 15.9 1.5 17.4 0.7
Group Minimum Capital Requirement ($bn) 4.6 1.0 5.6 4.4 0.9 5.3 0.3
Group Prescribed Capital Requirement ($bn) 7.9 11.3 19.2 7.6 10.1 17.7 1.5
GWS capital surplus over GPCR ($bn) 15.5 2.7 18.2 15.6 2.5 18.1 0.1
GWS coverage ratio over GPCR (%) 295% 194% 307% 202% (8)ppts

GWS Tier 1 surplus over GMCR ($bn) 12.5 12.1 0.4
GWS Tier 1 coverage ratio over GMCR (%) 323% 328% (5)ppts
Notes
(1) The 31 December 2022 GWS capital results do not reflect the impact of the redemption of $0.4 billion of senior debt in January 2023. Allowing for this redemption reduces the estimated
shareholder GWS capital surplus over GPCR to $15.2 billion with a coverage ratio of 302 per cent and reduces the estimated total GWS capital surplus over GPCR to $17.7 billion with a coverage
ratio of 200 per cent. The total GWS Tier 1 over GMCR capital position is unaffected by this redemption.
(2) The classification of tiering of capital under the GWS framework reflects the different local regulatory regimes along with guidance issued by the Hong Kong IA. At 30 June 2023, total Tier 1
capital resources of $18.1 billion comprises: $23.4 billion of total shareholder capital resources; less $(3.6) billion of Prudential plc issued sub-ordinated and senior Tier 2 debt capital; less
$(3.4) billion of local regulatory tiering classifications which are classified as GWS Tier 2 capital resources primarily in Singapore and the Chinese Mainland; plus $1.7 billion of Tier 1 capital
resources in policyholder funds.
(3) This allows for any associated diversification impacts between the shareholder and policyholder positions reflected in the total company results where relevant.
(4) The total company GWS coverage ratio over GPCR presented above represents the eligible group capital resources coverage ratio as set out in the GWS framework while the total company
GWS tier 1 coverage ratio over GMCR represents the tier 1 group capital coverage ratio.
(5) Refer to section on Material changes in GMCR, GPCR, tier 1 group capital and eligible group capital resources below.

Additional financial information / continued
I Additional financial information continued

I(i) Group capital position continued
GWS sensitivity analysis
The estimated sensitivity of the GWS capital position (based on the GPCR) to changes in market conditions as at 30 June 2023 and 31 December
2022 are shown below, for both the shareholder and the total capital position.
Shareholder
30 Jun 2023 31 Dec 2022
Surplus Coverage ratio Surplus Coverage ratio

Impact of market sensitivities ($bn) ($bn)
Base position 15.5 295% 15.6 307%

Impact of:
10% increase in equity markets 0.3 (5)% 0.3 (3)%
20% fall in equity markets (1.9) (11)% (1.9) (14)%
50 basis points reduction in interest rates 0.7 11% 0.4 4%
100 basis points increase in interest rates (1.4) (17)% (1.1) (15)%
100 basis points increase in credit spreads (0.8) (12)% (0.8) (9)%
Total
30 Jun 2023 31 Dec 2022
Surplus Coverage ratio Surplus Coverage ratio

Impact of market sensitivities ($bn) ($bn)
Base position 18.2 194% 18.1 202%

Impact of:
10% increase in equity markets 1.0 0% 1.2 1%
20% fall in equity markets (3.7) (11)% (3.6) (12)%
50 basis points reduction in interest rates 0.3 3% 0.0 0%
100 basis points increase in interest rates (0.8) (4)% (0.6) (3)%
100 basis points increase in credit spreads (1.2) (6)% (1.2) (6)%
The sensitivity results above reflect the impact on the Group’s long-term business operations as at the valuation dates. The sensitivity results
assume instantaneous market movements and reflect all consequential impacts as at the valuation date. These results also allow for limited
management actions such as changes to future policyholder bonuses and rebalancing investment portfolios where relevant. If such economic
conditions persisted, the financial impacts may differ to the instantaneous impacts shown above. In this case, management could also take
additional actions to help mitigate the impact of these stresses. These actions include, but are not limited to, market risk hedging, further
rebalancing of investment portfolios, increased use of reinsurance, repricing of in-force benefits, changes to new business pricing and the mix
of new business being sold.
GWS Risk Appetite and capital management

The Group’s capital management framework focuses on achieving sustainable, profitable growth and retaining a resilient balance sheet.
The Group monitors regulatory capital, economic capital and rating agency capital metrics and manages the business within its risk appetite by
remaining within its economic and regulatory capital limits. In respect of regulatory capital limits, a capital buffer above the GPCR is held to ensure
the Group can withstand volatility in markets and operational experience, with capital resources remaining sufficient to cover the GPCR even after
significant stresses. The calibration of the capital buffer reflects the Group’s risk profile and the external economic environment, and is set and
reviewed regularly by the Board.
Typically, this requires a Group shareholder coverage ratio of above 150 per cent of the shareholder GPCR to be maintained and de-risking
management actions will be taken as necessary to maintain this buffer. No maximum limit on the GWS coverage ratio has been set. While the
GWS shareholder capital position is a key metric for assessing regulatory solvency, and for risk management, there are some elements of the
shareholder GWS capital surplus which will only become available as cash flow for distribution over time. The Group’s Free Surplus metric is a better
measure of the shareholder capital available for distribution, and is used as the primary metric for assessing the Group’s sources and uses of
capital in the Group’s capital management framework, and underpinning the Group’s dividend policy.
At 30 June 2023, the Group’s Free Surplus stock (excluding distribution rights and other intangibles) was $8.4 billion, compared to the GWS
shareholder surplus of $15.5 billion and a reconciliation is shown below.
The uses of capital, for both organic and inorganic opportunities, are assessed by reference to expected shareholder returns and payback
periods, relative to risk-adjusted hurdle rates which are set centrally.

Reflecting the Group’s capital allocation priorities, a portion of the free surplus generated in each period will be retained for reinvestment in new
business and capabilities, particularly the areas of Customer, Distribution, Health and Technology, and dividends will be determined primarily
based on the Group’s operating free surplus generation after allowing for the capital strain of writing new business and recurring central costs.
Recognising the strong conviction we have in the Group’s revised strategy, when determining the annual dividend we intend to look through the
investments in new business and investments in capabilities and expect the annual dividend to grow in the range 7 – 9 per cent per annum over
2023 and 2024. To the extent that free surplus arises which is not required to support organic and inorganic growth opportunities, consideration
will be given to returning capital to shareholders.
Separate from the capital management framework applied for shareholder-owned capital, the capital held in ring-fenced with-profits funds
supports policyholder investment freedom, which increases expected returns for our with-profits funds’ customers. GWS policyholder capital
surplus is not available for distribution out of the ring-fenced funds other than as a defined proportion distributable to shareholders when
policyholder bonuses are declared. Policyholder fund capital surplus is deployed over time to increase investment risk in the with-profits funds in
order to target higher customer returns, or distributed as higher customer bonuses, in line with the specific with-profits bonus policies which apply

to each ring-fenced fund. The result of applying these policies is that the aggregate policyholder fund GPCR coverage ratio is typically lower than
the GPCR shareholder coverage ratio.
The total GWS coverage ratio, which is an aggregate of the policyholder and shareholder capital positions, is therefore usually lower than the
shareholder coverage ratio, but also less sensitive in stress scenarios, as is shown in the GWS sensitivity analysis section above as at 30 June 2023.
The total GWS coverage ratio is the Group’s regulatory solvency metric to which Group supervision applies, and this total regulatory coverage ratio
is managed to ensure it remains above the GPCR by applying separate shareholder and policyholder risk appetite limits, as described above.
Analysis of movement in total regulatory GWS capital surplus (over GPCR)

A summary of the movement in the 31 December 2022 regulatory GWS capital surplus (over GPCR) of $18.1 billion to $18.2 billion at 30 June
2023 is set out in the table below.
Half year 2023

$bn
Total GWS surplus at 1 Jan (over GPCR) 18.1

Shareholder free surplus generation
In force operating capital generation 1.1
Investment in new business (0.4)
Total operating free surplus generation 0.7

External dividends (0.4)
Non-operating movements including market movements (0.1)
Other capital movements (including foreign exchange movements) (0.4)
Movement in free surplus (see EEV basis results for further detail) (0.2)
Other movements in GWS shareholder surplus not included in free surplus 0.1
Movement in contribution from GWS policyholder surplus (over GPCR) 0.2
Net movement in GWS capital surplus (over GPCR) 0.1
Total GWS surplus at 30 Jun (over GPCR) 18.2
Further detail on the movement in free surplus of $(0.2) billion is included in the Movement in Group free surplus section of the Group’s EEV
basis results.
Other movements in GWS shareholder surplus not included in free surplus are driven by the differences described in the reconciliation shown
later in this section. This includes movements in distribution rights and other intangibles (which are expensed on day one under the GWS
requirements) and movements in the restriction applied to free surplus to better reflect shareholder resources that are available for distribution.
Material changes in GMCR, GPCR, tier 1 group capital and eligible group capital resources
Detail on the material changes in GPCR, GMCR, eligible group capital resources and tier 1 group capital are provided below.
> Total eligible capital resources has increased by $1.6 billion to $37.4 billion at 30 June 2023 (31 December 2022: $35.8 billion). This includes a
$0.7 billion increase in tier 1 group capital to $18.1 billion (31 December 2022: $17.4 billion). The increase in total eligible capital resources and
tier 1 group capital is primarily driven by positive operating capital generation over the period, partially offset by external dividends paid, debt
redeemed and foreign exchange movements over the period.
> Total regulatory GPCR has increased by $1.5 billion to $19.2 billion at 30 June 2023 (31 December 2022: $17.7 billion) and the total regulatory
GMCR has increased by $0.3 billion to $5.6 billion at 30 June 2023 (31 December 2022: $5.3 billion). The increase in GPCR and GMCR is
primarily driven by new business sold over the period, partially offset by the release of capital as the policies mature or are surrendered and
foreign exchange movements over the period.


I(i) Group capital position continued
Reconciliation of Free Surplus to total regulatory GWS capital surplus (over GPCR)
30 Jun 2023 $bn
Capital Required
resources capital Surplus
Free surplus excluding distribution rights and other intangibles* 14.0 5.6 8.4
Restrictions applied in free surplus for China C-ROSS II note (1) 1.9 1.5 0.4
Restrictions applied in free surplus for HK RBC note (2) 5.7 0.7 5.0
Restrictions applied in free surplus for Singapore RBC note (3) 2.0 0.1 1.9
Other (0.2) 0.0 (0.2)
Add GWS policyholder surplus contribution 14.0 11.3 2.7
Total regulatory GWS capital surplus (over GPCR) 37.4 19.2 18.2
* As per the “Free surplus excluding distribution rights and other intangibles” shown in the statement of Movement in Group free surplus of the Group’s EEV basis results.
Notes
(1) Free surplus applies the embedded value reporting approach issued by the China Association of Actuaries (CAA) in the Chinese Mainland and includes a requirement to establish a deferred profit
liability within EEV net worth which leads to a reduction in EEV free surplus as compared to the C-ROSS II surplus reported for local regulatory purposes. Further differences relate to the treatment
of subordinated debt within CPL which is excluded from EEV free surplus and which contributes to C-ROSS II surplus for local regulatory reporting.
(2) EEV free surplus for Hong Kong under the HK RBC regime excludes regulatory surplus that is not considered distributable immediately. This includes HK RBC technical provisions that are lower
than policyholder asset shares or cash surrender floors as well as the value of future shareholder transfers from participating business (net of associated required capital) which are included in
the shareholder GWS capital position.
(3) EEV free surplus for Singapore is based on the Tier 1 requirements under the RBC2 framework, which excludes certain negative reserves permitted to be recognised in the full RBC 2 regulatory
position used when calculating the GWS capital surplus (over GPCR).
Reconciliation of Group IFRS shareholders’ equity to Group total GWS capital resources
30 Jun 2023
$bn
Group IFRS shareholders’ equity 17.2

Remove goodwill and intangibles recognised on the IFRS consolidated statement of financial position (4.4)
Add debt treated as capital under GWS note (1) 3.6
Asset valuation differences note (2) (0.8)
Remove IFRS 17 contractual service margin (CSM) (including joint ventures and associates) note (3) 20.8
Liability valuation (including insurance contracts) differences excluding IFRS 17 CSM note (4) (0.1)
Differences in associated net deferred tax liabilities note (5) 0.9
Other note (6) 0.2
Group total GWS capital resources 37.4
Notes
(1) As per the GWS Framework, debt in issuance at the date of designation that satisfy the criteria for transitional arrangements and qualifying debt issued since the date of designation are included
as Group capital resources but are treated as liabilities under IFRS.
(2) Asset valuation differences reflect differences in the basis of valuing assets between IFRS and local statutory valuation rules, including deductions for inadmissible assets. Differences include for
some markets where government and corporate bonds are valued at book value under local regulations but are valued at market value under IFRS.
(3) The IFRS 17 contractual service margin (CSM) represents a discounted stock of unearned profit which is released over time as services are provided. On a GWS basis the level of future profits will
be recognised within the capital resources to the extent permitted by the local solvency reserving basis. Any restrictions applied by the local solvency bases (such as zeroization of future profits)
is captured in the liability valuation differences line.
(4) Liability valuation differences (excluding the CSM) reflect differences in the basis of valuing liabilities between IFRS and local statutory valuation rules. This includes the negative impact of moving
from the IFRS 17 best estimate reserving basis to a more prudent local solvency reserving basis (including any restrictions in the recognition of future profits) offset by the fact that certain local
solvency regimes capture some reserves within the required capital instead of the capital resources.
(5) Differences in associated net deferred tax liabilities mainly results from the tax impact of changes in the valuation of assets and liabilities.
(6) Other differences mainly reflect the inclusion of subordinated debt in Chinese Mainland as local capital resources on a C-ROSS II basis as compared to being held as a liability under IFRS.

Basis of preparation for the Group GWS capital position
Prudential applies the Insurance (Group Capital) Rules set out in the GWS Framework to determine group regulatory capital requirements (both
minimum and prescribed levels). The summation of local statutory capital requirements across the Group is used to determine group regulatory
capital requirements, with no allowance for diversification between business operations. The GWS eligible group capital resources is determined
by the summation of capital resources across local solvency regimes for regulated entities and IFRS shareholders’ equity (with adjustments
described below) for non-regulated entities.
In determining the GWS eligible group capital resources and required capital the following principles have been applied:
> For regulated insurance entities, capital resources and required capital are based on the local solvency regime applicable in each jurisdiction,
with minimum required capital set at the solo legal entity statutory minimum capital requirements and prescribed capital requirement set at
the level at which the local regulator of a given entity can impose penalties, sanctions or intervention measures;
> The classification of tiering of eligible capital resources under the GWS framework reflects the different local regulatory regimes along with

guidance issued by the Hong Kong IA. In general, if a local regulatory regime applies a tiering approach then this should be used to determine
tiering of capital on a GWS capital basis, where a local regulatory regime does not apply a tiering approach then all capital resources should be
included as Group Tier 1 capital. For non-regulated entities tiering of capital is determined in line with the Insurance (Group Capital) Rules.
> For asset management operations and other regulated entities, the capital position is derived based on the sectoral basis applicable in each
jurisdiction, with minimum required capital based on the solo legal entity statutory minimum capital requirement;
> For non-regulated entities, the capital resources are based on IFRS shareholder equity after deducting intangible assets. No required capital is
held in respect of unregulated entities;
> For entities where the Group’s shareholding is less than 100 per cent, the contribution of the entity to the GWS eligible group capital resources
and required capital represents the Group’s share of these amounts and excludes any amounts attributable to non-controlling interests. This
does not apply to investment holdings which are not part of the Group;
> Investments in subsidiaries, joint ventures and associates (including, if any, loans that are recognised as capital on the receiving entity’s balance
sheet) are eliminated from the relevant holding company to prevent the double counting of capital resources;
> Under the GWS Framework, debt instruments in issuance at the date of designation that satisfy the criteria for transitional arrangements and
qualifying debt issued since the date of designation are included in eligible group capital resources as tier 2 group capital;
> At 30 June 2023 all debt instruments with the exception of the senior debt issued in 2022 are included as Group capital resources. The eligible
amount permitted to be included as Group capital resources for transitional debt is based on the net proceeds amount translated using
31 December 2020 exchange rates for debt not denominated in US dollars;
> The total company GWS capital basis is the capital measure for Hong Kong IA Group regulatory purposes as set out in the GWS framework. This

framework defines the eligible group capital resources coverage ratio (or total company GWS coverage ratio over GPCR as presented above) as
the ratio of total company eligible group capital resources to the total company GPCR and defines the tier 1 group capital coverage ratio (or
total company GWS tier 1 coverage ratio over GMCR as presented above) as the ratio of total company tier 1 group capital to the total company
GMCR; and
> Prudential also presents a shareholder GWS capital basis which excludes the contribution to the Group GWS eligible group capital resources, the
GMCR and GPCR from participating business in Hong Kong, Singapore and Malaysia. In Hong Kong the present value of future shareholder
transfers from the participating business are included in the shareholder GWS eligible capital resources along with an associated required
capital, this is in line with the local solvency presentation. The shareholder GWS coverage ratio over GPCR presented above reflects the ratio of
shareholder eligible group capital resources to the shareholder GPCR.


I(ii) Analysis of total segment profit by business unit
The table below presents the half year 2023 results on both AER and CER bases to eliminate the impact of exchange translation.
2023 $m 2022 $m 2023 vs 2022 % 2022 $m
Half year AER CER AER CER AER
CPL 164 132 124 24% 32% 271

Hong Kong 554 598 597 (7)% (7)% 1,162
Indonesia 109 118 113 (8)% (4)% 205
Malaysia 165 193 184 (15)% (10)% 340
Singapore 270 313 320 (14)% (16)% 570
Growth markets and other
Philippines 59 62 58 (5)% 2% 131
Taiwan 54 57 54 (5)% 0% 116
Thailand 52 64 64 (19)% (19)% 116
Vietnam 192 220 214 (13)% (10)% 402
Other 56 (30) (32) 287% 275% 53
Share of related tax charges from joint ventures
and associate (39) (36) (35) (8)% (11)% (90)
Insurance business 1,636 1,691 1,661 (3)% (2)% 3,276
Eastspring 146 131 128 11% 14% 260
Total segment profit 1,782 1,822 1,789 (2)% 0% 3,536
(a) Eastspring adjusted operating profit
2023 $m 2022 AER $m
Operating income before performance-related fees note (1) 351 332 660
Performance-related fees 2 4 1
Operating income (net of commission) note (2) 353 336 661
Operating expense note (2) (185) (184) (360)
Group’s share of tax on joint ventures’ operating profit (22) (21) (41)
Adjusted operating profit 146 131 260
Average funds managed or advised by Eastspring $228.8bn $241.8bn $229.4bn

Margin based on operating income note (3) 31bps 28bps 29bps
Cost/income ratio note II(v) 53% 55% 55%

Notes
(1) Operating income before performance-related fees for Eastspring can be further analysed as follows (institutional below includes internal funds under management or under advice):
Retail Margin Institutional Margin Total Margin
$m bps $m bps $m bps
Half year 2023 210 58 141 18 351 31

Half year 2022 196 52 136 16 332 28
Full year 2022 392 54 268 17 660 29
(2) Operating income and expense include the Group’s share of contribution from joint ventures. In the consolidated income statement of the Group IFRS financial results, the net income after tax
of the joint ventures and associates is shown as a single line item. A reconciliation is provided in note II(v) of this additional information.
(3) Margin represents operating income before performance-related fees as a proportion of the related funds under management or advice. Half year figures have been annualised by multiplying by
two. Monthly closing internal and external funds managed or advised by Eastspring have been used to derive the average. Any funds held by the Group’s insurance operations that are not
managed or advised by Eastspring are excluded from these amounts.

(b) Eastspring total funds under management or advice
Eastspring manages funds from external parties and also funds for the Group’s insurance operations. In addition, Eastspring advises on certain
funds for the Group’s insurance operations where the investment management is delegated to third-party investment managers. The table below
analyses the total funds managed or advised by Eastspring.
31 Dec 2022
30 Jun 2023 AER
$bn $bn
External funds under management, excluding funds managed on behalf of M&G plc note (1)
Retail 65.2 60.1
Institutional 11.7 11.3
Money market funds (MMF) 11.8 10.5

88.7 81.9
Funds managed on behalf of M&G plc note (2) 2.4 9.3
External funds under management 91.1 91.2

Internal funds:
Internal funds under management 107.8 104.1
Internal funds under advice 28.8 26.1
136.6 130.2
Total funds under management or advice note (3) 227.7 221.4
Notes
(1) Movements in external funds under management, excluding those managed on behalf of M&G plc, are analysed below:
Full year 2022
Half year 2023 AER
$m $m
At beginning of period 81,949 93,956

Market gross inflows 44,910 81,942
Redemptions (42,327) (84,397)
Market and other movements 4,236 (9,552)

At end of period* 88,768 81,949
* The analysis of movements above includes $11,848 million relating to Asia Money Market Funds at 30 June 2023 (31 December 2022: $10,495 million). Investment flows for half year 2023
include Eastspring Money Market Funds gross inflows of $33,742 million (full year 2022: $61,063 million) and net inflows of $727 million (full year 2022: net outflows of $(869) million).
(2) Movements in funds managed on behalf of M&G plc are analysed below:
Full year 2022
Half year 2023 AER
$m $m
At beginning of period 9,235 11,529

Net flows (7,116) (765)
Market and other movements 237 (1,529)
At end of period 2,356 9,235
(3) Total funds under management or advice are analysed by asset class below:
30 Jun 2023 31 Dec 2022* AER
Funds under management Funds under advice Total Total

$bn % of total $bn % of total $bn % of total $bn % of total
Equity 48.0 24% 1.3 5% 49.3 22% 45.5 21%

Fixed income 39.1 20% 3.2 11% 42.3 18% 47.9 22%
Multi-asset 96.7 49% 24.3 84% 121.0 53% 114.1 51%

Alternatives 2.1 1% – – 2.1 1% 2.2 1%
Money Market Funds 13.0 6% – – 13.0 6% 11.7 5%
Total funds 198.9 100% 28.8 100% 227.7 100% 221.4 100%
* The presentation of asset classes has been altered to better reflect the Eastspring management view and how products are sold and marketed to clients. Multi-asset funds include a mix of
debt, equity and other investments. Comparatives have been restated to be prepared on a comparable basis.


I(iii) Group funds under management
For Prudential’s asset management businesses, funds managed on behalf of third parties are not recorded on the balance sheet. They are,
however, a driver of profitability. Prudential therefore analyses the movement in the funds under management each period, focusing on those
which are external to the Group and those primarily held by the Group’s insurance businesses. The table below analyses the funds of the Group
held in the balance sheet and the external funds that are managed by Prudential’s asset management businesses.
31 Dec 2022
30 Jun 2023 AER
$bn $bn
Internal funds 173.9 166.3

Eastspring external funds, including M&G plc (as analysed in note I(ii) above) 91.1 91.2
Total Group funds under management note 265.0 257.5
Note
Total Group funds under management comprise:
31 Dec 2022
30 Jun 2023 AER
$bn $bn
Total investments and cash and cash equivalents held on the balance sheet* 155.1 149.9
External funds of Eastspring, including M&G plc 91.1 91.2
Internally managed funds held in joint ventures and associates, excluding assets attributable to external unit holders
of the consolidated collective investment schemes and other adjustments 18.8 16.4
Total Group funds under management 265.0 257.5
* Includes “Investment in joint ventures and associates accounted for using the equity method” as above on the balance sheet.
I(iv) Holding company cash flow

The holding company cash flow describes the movement in the cash and short-term investments of the centrally managed group holding
companies and differs from the IFRS cash flow statement, which includes all cash flows in the period including those relating to both policyholder
and shareholder funds. The holding company cash flow is therefore a more meaningful indication of the Group’s central liquidity.
2023 $m 2022 $m
Net cash remitted by business units note (1) 1,024 1,009 1,304
Net interest paid note (2) (40) (117) (204)
Corporate expenditure note (3) (155) (124) (232)
Centrally funded recurring bancassurance fees (160) (220) (220)
Total central outflows (355) (461) (656)
Holding company cash flow before dividends and other movements 669 548 648
Dividends paid (361) (320) (474)
Operating holding company cash flow after dividends but before other movements 308 228 174
Other movements
Issuance and redemption of debt (371) (1,729) (1,729)
Other corporate activities note (4) 282 159 248
Total other movements (89) (1,570) (1,481)
Net movement in holding company cash flow 219 (1,342) (1,307)
Cash and short-term investments at beginning of period note (5) 3,057 3,572 3,572
Foreign exchange movements 38 (87) (113)
Inclusion of amounts at 31 Dec from additional centrally managed entities note (6) – – 905
Cash and short-term investments at end of period 3,314 2,143 3,057
Notes
(1) Net cash remitted by business units comprise dividends and other transfers, net of capital injections, that are reflective of earnings and capital generation.
(2) Following the update to the definition of holding company cash and short term investments at 31 December 2022, higher levels of interest and investment income were earned in the first half
of 2023, largely on the balances brought into the updated definition. This together with lower interest payments this led to a reduction in net interest paid in the first half of 2023 as compared
with the prior period.
(3) Including IFRS 17 implementation and restructuring costs paid in the period.
(4) Cash inflows from Other corporate activities were $282 million (half year 2022: $159 million and full year 2022: $248 million) and largely related to proceeds received from the sales of shares
in Jackson together with dividends from Jackson.
(5) Proceeds from the Group’s commercial paper programme are not included in the holding company cash and short-term investments balance.
(6) The definition of holding company cash and short-term investments was updated, with effect from 31 December 2022, following the combination of the Group’s London office and Asia regional
office into a single Group Head Office in 2022. This updated definition includes all cash and short-term investments held by central holding and service companies, including amounts previously
managed on a regional basis. These balances are now being centrally managed by the Group’s Treasury function. This refinement increased holding company cash and short-term investment
balances by $0.9 billion at 31 December 2022.

The table below shows the reconciliation of the Cash and cash equivalents of Unallocated to a segment (Central operations) held on the IFRS
balance sheet and Cash and short-term investments at 30 June 2023:
30 Jun 2023 31 Dec 2022
$m $m
Cash and cash equivalents of Central operations held on balance sheet note C1 2,752 1,809
Less: amounts from commercial paper (529) (501)
Add: Deposits with credit institutions of Central operations held on balance sheet 1,091 1,749
Cash and short-term investments 3,314 3,057
I(v) Share schemes

The Company operates a number of share schemes and plans which are described below. The purpose of these arrangements are to incentivise

and retain eligible employees of the Group or, in the case of the Agency LTIP and the ISSOSNE, eligible agents based in certain business units of
the Group through the grant of options over, and awards of, shares in Prudential plc. Participants are not required to pay anything on application
for or acceptance of any awards or options granted to them. As at 30 June 2023, there has been no material change to the information disclosed
in the 2022 Annual Report in respect of employees including remuneration policies and share incentive schemes.
The total number of Prudential plc shares which may be issued to satisfy options and awards granted under all share plans of Prudential plc
in any 10-year rolling period must not exceed 10 per cent of Prudential plc shares in issue from time to time (the “Scheme Mandate”). The total
number of Prudential plc shares which may be issued to satisfy options and awards granted to participants who qualify as “service providers”
(as defined under the HKLR) under all share plans of Prudential plc in any 10-year rolling period must not exceed 2 per cent of Prudential plc shares
in issue from time to time (the “Service Provider Sublimit”).
The numbers of Prudential plc shares available for issue in respect of all options and awards available for grant under (i) the Scheme Mandate
at the beginning and the end of the reporting period ended 30 June 2023 are 195,037,628 and 201,378,511 respectively and (ii) the Service
Provider Sublimit at the beginning and the end of the reporting period ended 30 June 2023 are 39,455,724 and 39,478,638 respectively.
The number of Prudential plc shares that may be issued in respect of share options and awards granted under all share option schemes and
share award schemes during the period ended 30 June 2023 divided by the weighted average number of Prudential plc shares in issue for the
period ended 30 June 2023 is 0.52 per cent.
The weighted average share price of Prudential plc for the period ended 30 June 2023 was £11.76 (30 June 2022: £10.82; 31 December
2022: £10.33).
Prudential calculates the fair value of options and awards in accordance with the applicable accounting standards and policies adopted for

preparing the consolidated financial statements. More detail on the methodology and assumptions used is given in note B2.2 to the IFRS financial
statements in the 2022 Annual Report.
No payment is payable on application for, or acceptance of, any award made under any of the share schemes or plans operated by the Company.


I(v) Share schemes continued
Share schemes funded by new shares of Prudential
The arrangements in operation which are funded by new issue shares of Prudential plc are the Prudential Long Term Incentive Plan (PLTIP),
the Prudential Agency Long-Term Incentive Plan (Agency LTIP), the UK Savings-Related Share Option Scheme (UK SAYE) and the Prudential
International Savings-Related Share Option Scheme for Non-Employees (ISSOSNE).
The following analysis shows the movement in each share plan for the period ended 30 June 2023:
(a) PLTIP
Fair value at Weighted

Vesting period grant date £ Number of shares under awards avg closing
share price
Closing share before
PLTIP PLTIP Beginning Lapsed/ End of price before vesting
Date of grant Vesting date TSR IFRS of period Transferred Granted Vested Cancelled Forfeited period grant date £ date £
09 Apr 20 09 Apr 23 4.71 10.47 1,252,696 – – (643,741) – (608,955) – n/a 11.69

15 May 20 15 May 23 5.37 10.50 695,342 – – (316,759) – (378,583) – n/a 11.53
24 Jun 20 24 Jun 23 4.89 11.78 6,677 – – (3,039) – (3,638) – n/a 10.93
07 Apr 21 07 Apr 24 8.37 15.67 332,580 – – – – (21,019) 311,561 n/a n/a
21 Apr 21 21 Apr 24 7.39 14.93 113,145 – – – – (7,711) 105,434 n/a n/a
17 May 21 17 May 24 7.52 14.96 613,847 – – – – – 613,847 n/a n/a
05 Apr 22 05 Apr 25 2.28 11.34 781,078 – – – – (94,770) 686,308 n/a n/a
27 May 22 27 May 25 1.90 10.30 270,126 – – – – – 270,126 n/a n/a
22 May 23 22 May 26 5.28 11.83 – – 199,991 – – – 199,991 11.78 n/a
30 May 23 30 May 26 4.85 11.25 – – 438,098 – – – 438,098 11.25 n/a
Total PLTIP 4,065,491 – 638,089 (963,539) – (1,114,676) 2,625,365
Representing:
Directors1, 2 1,662,084 (1,662,084) 438,098 – – – 438,098
Other employees 2,403,407 1,662,084 199,991 (963,539) – (1,114,676) 2,187,267
Total PLTIP 4,065,491 638,089 (963,539) – (1,114,676) 2,625,365
Notes
1 Additional details on the Director’s share awards is set out in the Disclosure of interest of directors.
2 PLTIP awards have performance conditions attached, and these are set out in the 2022 Annual Report.
(b) Agency LTIP
Vesting period Number of shares under awards Weighted

avg closing
Fair Closing share share price
value at price before before
grant Beginning Lapsed/ End of the grant vesting
Date of grant Vesting date date £ of period Granted Vested Cancelled Forfeited period date £ date £
04 Apr 17 04 Apr 24 13.17 43,281 – (42,199) – (1,082) – n/a 11.70

02 Apr 19 02 Apr 22 14.73 1,121 – (1,121) – – – n/a 11.46
09 Apr 20 09 Apr 23 9.45 2,545,488 – (2,454,250) – (91,238) – n/a 11.75
22 Sep 20 09 Apr 23 9.85 30,955 – (30,955) – – – n/a 11.75
16 Dec 20 09 Apr 23 12.57 10,673 – (10,673) – – – n/a 11.75
07 Apr 21 07 Apr 24 14.58 120,969 – – – (11,479) 109,490 n/a n/a
18 Jun 21 07 Apr 24 13.70 14,600 – – – – 14,600 n/a n/a
07 Oct 21 07 Apr 24 14.75 5,227 – – – – 5,227 n/a n/a
27 May 22 05 Apr 25 10.03 41,725 – – – – 41,725 n/a n/a
30 May 23 12 Apr 26 10.83 – 66,449 – – – 66,449 11.25 n/a
Total Agency LTIP1 2,814,039 66,449 (2,539,198) – (103,799) 237,491
Note
1 All of the participants of this scheme are service providers.

(c) UK SAYE
Exercise period Number of shares under options Weighted

avg closing
Fair share price
value at Closing share before
Date of Exercise grant Beginning Lapsed/ End of price before exercise
grant price £ Beginning End date £ of period Transferred Granted Exercised Cancelled Forfeited period grant date £ date £
21 Sep 17 14.55 01 Dec 22 31 May 23 3.71 2,061 – – – – (2,061) – n/a n/a

29 Nov 19 11.18 01 Jan 23 30 Jun 23 3.28 28,190 – – (10,697) (1,610) (11,375) 4,508 n/a 8.47
29 Nov 19 11.18 01 Jan 25 30 Jun 25 3.69 5,366 – – – – – 5,366 n/a n/a
22 Sep 20 9.64 01 Dec 23 31 May 24 1.9 37,046 – – (1,015) (1,867) (8,783) 25,381 n/a 10.83
22 Sep 20 9.64 01 Dec 25 31 May 26 2.04 3,174 – – – – – 3,174 n/a n/a

08 Dec 21 12.02 01 Jan 25 30 Jun 25 3.03 6,700 – – – (299) (2,244) 4,157 n/a n/a
08 Dec 21 12.02 01 Jan 27 30 Jun 27 3.65 49 – – – – – 49 n/a n/a
23 Sep 22 7.37 01 Dec 25 31 May 26 3.08 47,346 – – (948) – (6,866) 39,532 n/a –
23 Sep 22 7.37 01 Dec 27 31 May 28 3.63 12,372 – – – – – 12,372 n/a n/a
Total SAYE 142,304 – (12,660) (3,776) (31,329) 94,539
Representing:
Directors1 3,298 (3,298) – – – – –
Other employees 139,006 3,298 – (12,660) (3,776) (31,329) 94,539
Total SAYE 142,304 – (12,660) (3,776) (31,329) 94,539
Note
1 Additional details on the Director’s share awards is set out in the Disclosure of interest of directors.
(d) ISSOSNE
Exercise period Number of shares under options Weighted

avg closing
Fair share price
value at Closing share before

Date of Exercise grant Beginning Lapsed/ End of price before exercise
grant price £ Beginning End date £ of period Granted Exercised Cancelled Forfeited period grant date £ date £
21 Sep 16 9.56 01 Dec 21 31 May 22 3.31 324 – – – – 324 n/a n/a

21 Sep 17 12.59 01 Dec 22 31 May 23 3.71 102,320 – (25,679) (76,641) – – n/a 13.04
18 Sep 18 12.07 01 Dec 23 31 May 24 3.61 130,364 – – (1,026) – 129,338 n/a n/a
02 Oct 19 9.62 01 Dec 22 31 May 23 2.85 157,918 – (143,709) (14,209) – – n/a 11.97
02 Oct 19 9.62 01 Dec 24 31 May 25 2.98 216,075 – – (966) (1,289) 213,820 n/a n/a
22 Sep 20 9.64 01 Dec 23 31 May 24 1.90 198,742 – – (1,734) (385) 196,623 n/a n/a
22 Sep 20 9.64 01 Dec 25 31 May 26 2.04 150,481 – (237) (2,251) (1,608) 146,385 n/a 12.02
02 Nov 21 11.89 01 Dec 24 31 May 25 3.91 185,545 – – (8,745) (620) 176,180 n/a n/a
02 Nov 21 11.89 01 Dec 26 31 May 27 4.46 174,681 – – (3,530) (252) 170,899 n/a n/a
21 Sep 22 7.37 01 Dec 25 31 May 26 3.13 220,733 – – (1,587) (17,700) 201,446 n/a n/a
21 Sep 22 7.37 01 Dec 27 31 May 28 3.59 178,805 – – (2,035) (15,384) 161,386 n/a n/a
Total ISSOSNE 1,715,988 – (169,625) (112,724) (37,238) 1,396,401

II Calculation of alternative performance measures

Prudential uses alternative performance measures (APMs) to provide more relevant explanations of the Group’s financial position and performance.
This section sets out explanations for each APM and reconciliations to relevant IFRS balances.
II(i) Reconciliation of adjusted operating profit to profit before tax

Adjusted operating profit presents the operating performance of the business. This measurement basis distinguishes adjusted operating profit
from other constituents of total profit or loss for the period, including short-term fluctuations in investment returns and gain or loss on corporate
transactions.
More details on how adjusted operating profit is determined are included in note B1.2 of the Group IFRS financial results. A full reconciliation
to profit after tax is given in note B1.1 of the Group IFRS financial results.
II(ii) Adjusted shareholders’ equity

Following the implementation of IFRS 17, the Group has introduced a new IFRS equity measure termed ‘Adjusted IFRS shareholders’ equity’,
which is calculated by adding the IFRS 17 expected future profit (CSM) to IFRS shareholders’ equity for all entities in the Group (including joint
ventures and associates). Management believe this is a helpful measure that provides a reconciliation to the embedded value framework which
is often used for valuations. The main difference between the Group’s EEV measure and adjusted shareholders’ equity is economics as explained
in note II(viii).
30 Jun 2023 31 Dec 2022

$m $m
IFRS shareholders’ equity as reported in the financial statements 17,159 16,731

Add: CSM, including joint ventures and associates and net of reinsurance* 20,820 19,989
Remove: CSM asset attaching to reinsurance contracts wholly attributable to policyholders* 1,305 1,295
Less: Related deferred tax adjustments for the above* (2,839) (2,804)
Adjusted shareholders’ equity 36,445 35,211
* See note C3.1 of the Group IFRS financial results for the split of the balances excluding joint ventures and associates and the Group’s share relating to joint ventures and associates.
II(iii) Return on IFRS shareholders’ equity

This measure is calculated as adjusted operating profit, after tax and non-controlling interests, divided by average IFRS shareholders’ equity.
Detailed reconciliation of adjusted operating profit to IFRS profit before tax for the Group is shown in note B1.1 to the Group IFRS financial
results. Half year profits are annualised by multiplying by two.

$m $m
Adjusted operating profit 1,462 2,722

Tax on adjusted operating profit (221) (539)
Adjusted operating profit attributable to non-controlling interests (3) (11)
Adjusted operating profit, net of tax and non-controlling interests 1,238 2,172
IFRS shareholders’ equity at beginning of period 16,731 18,936

IFRS shareholders’ equity at end of period 17,159 16,731
Average IFRS shareholders’ equity 16,945 17,834
Operating return on average IFRS shareholders’ equity (%) 15% 12%

II(iv) Calculation of shareholders’ equity per share
IFRS shareholders’ equity per share is calculated as closing IFRS shareholders’ equity divided by the number of issued shares at the end
of the periods.
30 Jun 2023 31 Dec 2022
Number of issued shares at the end of the period (million shares) 2,753 2,750
Closing IFRS shareholders’ equity ($ million) 17,159 16,731
Group IFRS shareholders’ equity per share (cents) 623¢ 608¢
Closing adjusted shareholders’ equity ($ million) 36,445 35,211

Group adjusted shareholders’ equity per share (cents) 1,324¢ 1,280¢

II(v) Calculation of Eastspring cost/income ratio
The cost/income ratio is calculated as operating expenses, adjusted for commissions and share of contribution from joint ventures and associates,
divided by operating income, adjusted for commission, share of contribution from joint ventures and associates and performance-related fees.
2023 $m 2022 $m
IFRS revenue 257 271 513

Share of revenue from joint ventures and associates 158 149 303
Commissions and other (62) (84) (155)
Performance-related fees (2) (4) (1)
Operating income before performance-related fees note 351 332 660
IFRS charges 185 205 398

Share of expenses from joint ventures and associates 62 63 117
Commissions and other (62) (84) (155)
Operating expense 185 184 360

Cost/income ratio (operating expense/operating income before performance-related fees) 53% 55% 55%
Note
IFRS revenue and charges for Eastspring are included within the IFRS Income statement in ‘other revenue’ and ‘non-insurance expenditure’ respectively. Operating income and expense include the
Group’s share of contribution from joint ventures and associates. In the condensed consolidated income statement of the Group IFRS financial results, the net income after tax from the joint ventures
and associates is shown as a single line item.

II Calculation of alternative performance measures continued

II(vi) Insurance premiums
New business sales are provided as an indicative volume measure of transactions undertaken in the reporting period that have the potential to
generate profits for shareholders. The Group reports Annual Premium Equivalent (APE) new business sales as a measure of the new policies sold in
the period, which is calculated as the aggregate of regular premiums and one-tenth of single premiums on new business written during the period
for all insurance products, including premiums for contracts designated as investment contracts and excluded from the scope of IFRS 17. The use
of one-tenth of single premiums is to normalise policy premiums into the equivalent of regular annual payments. This measure is commonly used
in the insurance industry to allow comparisons of the amount of new business written in a period by life insurance companies, particularly when
the sales contain both single premium and regular premium business.
Renewal or recurring premiums are the subsequent premiums that are paid on regular premium products. Gross premiums earned is the
measure of premiums as defined under the previous IFRS 4 basis and reflects the aggregate of single and regular premiums of new business sold
in the year and renewal premiums on business sold in previous years but excludes premiums for policies classified as investment contracts without
discretionary participation features under IFRS, which are recorded as deposits. Gross premiums earned is no longer a metric presented under
IFRS 17 and is not directly reconcilable to primary statements. The Group believes that renewal premiums and gross premiums earned are useful
measures of the Group’s business volumes and growth during the period.
2023 $m 2022 $m
Gross premiums earned 10,961 12,241 23,344

Gross premiums earned from joint ventures and associates 2,090 2,368 4,439
Total Group, including joint ventures and associates 13,051 14,609 27,783
Renewal insurance premiums 8,922 9,288 18,675

Annual premium equivalent (APE) 3,027 2,213 4,393
Life weighted premium income 11,949 11,501 23,068
II(vii) Reconciliation between EEV new business profit and IFRS new business CSM
2023 $m 2022 $m
EEV new business profit 1,489 1,098 2,184

Economics and other note (1) (411) (181) (424)
New rider sales note (2) (42) (51) (66)
Related tax on IFRS new business CSM note (3) 160 191 370
IFRS new business CSM 1,196 1,057 2,064
Notes
(1) EEV is calculated using ‘real-world’ economic assumptions that are based on the expected returns on the actual assets held with an allowance for risk in the risk discount rate. Under IFRS 17,
‘risk neutral’ economic assumptions are applied with assets assumed to earn and the cash flows discounted at risk free plus liquidity premium (where applicable). Both measures update these
assumptions each period end based on current interest rates.
(2) Under EEV, new business profit arising from additional or new riders attaching to existing contracts, product upgrades and top-ups are reported as current period new business profit.
Under IFRS 17 reporting, new business profit from such rider sales and upgrades are required to be treated as experience variances of the existing contracts.
(3) IFRS 17 new business CSM is gross of tax, while EEV new business profit is net of tax. Accordingly, the related tax that on the IFRS 17 new business CSM is added back. All of the other reconciling
items in the table have been presented net of related taxes.

II(viii) Reconciliation between EEV shareholders’ equity and IFRS shareholders’ equity
The table below shows the reconciliation of EEV shareholders’ equity and IFRS shareholders’ equity at the end of the periods:
30 Jun 2023 31 Dec 2022

$m $m
EEV shareholders’ equity 43,704 42,184

Adjustments for non-market risk allowance:
Remove: Allowance for non-market risks in EEV note (1) 2,972 2,760
Add: IFRS risk adjustment, net of related deferred tax adjustments note (2) (1,951) (1,803)
Mark-to-market value adjustment of the Group’s core structural borrowings note (3) (389) (427)
Economics and other valuation differences note (4) (7,891) (7,503)
Adjusted IFRS shareholders’ equity (see note II(ii)) 36,445 35,211

Remove: CSM, including joint ventures and associates and net of reinsurance (20,820) (19,989)
Add: CSM asset attaching to reinsurance contracts wholly attributable to policyholders (1,305) (1,295)
Add: Related deferred tax adjustments for the above 2,839 2,804
IFRS shareholders’ equity 17,159 16,731
Notes
(1) The allowance for non-diversifiable non-market risk in EEV comprises a base Group-wide allowance of 50 basis points plus additional allowances for emerging market risk where appropriate.
(2) Includes the Group’s share of joint ventures and associates and net of reinsurance.
(3) The Group’s core structural borrowings are fair valued under EEV but are held at amortised cost under IFRS.
(4) EEV is calculated using ‘real-world’ economic assumptions that are based on the expected returns on the actual assets held with an allowance for risk in the risk discount rate. Under IFRS 17,
‘risk neutral’ economic assumptions are applied with the cash flows discounted using risk free plus liquidity premium (where applicable). Other valuation differences include contract boundaries
and non-attributable expenses which are small.
II(ix) Calculation of return on embedded value

Operating return on embedded value is calculated as the EEV operating profit for the period as a percentage of average EEV basis shareholders’
equity. Half year profits are annualised by multiplying by two.
2023 $m 2022 $m

EEV operating profit for the period 2,155 1,806 3,952
Operating profit attributable to non-controlling interests (11) (10) (29)
EEV operating profit, net of non-controlling interests 2,144 1,796 3,923
Shareholders’ equity at beginning of period 42,184 47,5841 47,5841

Shareholders’ equity at end of period 43,704 42,300 42,184
Average shareholders’ equity 42,944 44,942 44,884
Operating return on average shareholders’ equity (%) 10% 8% 9%
1 Opening shareholders’ equity at 1 January 2022 has been adjusted for early adoption of the HK RBC regime.

II Calculation of alternative performance measures continued

II(ix) Calculation of return on embedded value continued
New business profit over embedded value is calculated as the EEV new business profit for the period (annualised by multiplying by 2) as a
percentage of average EEV basis shareholders’ equity for insurance business operations, excluding goodwill attributable to equity holders.
2023 2022
New business profit ($ million)* 1,489 1,098 2,184

Average EEV shareholders’ equity for insurance business operations, excluding goodwill attributable
to equity holders ($ million) 39,518 41,920 41,866
New business profit on embedded value (%) 8% 5% 5%
* New business profit is attributed to the shareholders of the Group before deducting the amount attributable to non-controlling interests.
Average embedded value has been based on opening and closing EEV basis shareholders’ equity for insurance business operations, excluding
goodwill attributable to equity holders, as follows:
2023 $m 2022 $m
Shareholders’ equity at beginning of period 38,857 44,8751 44,8751

Shareholders’ equity at end of period 40,179 38,965 38,857
Average shareholders’ equity 39,518 41,920 41,866
1 Opening shareholders’ equity at 1 January 2022 has been adjusted for early adoption of the HK RBC regime.

Risk factors
A number of risk factors may affect the financial condition, results of in the Chinese Mainland property sector and more widely across the
operations and/or prospects of Prudential and its wholly and jointly Chinese Mainland economy). Other factors include fluctuations in
owned businesses, as a whole, and, accordingly, the trading price of global commodity and energy prices, concerns on the serviceability
Prudential’s shares. The risk factors mentioned below should not be of sovereign debt in certain economies (particularly as central banks
regarded as a complete, exhaustive and comprehensive statement of continue to raise rates in response to high inflation and the high
all potential risks and uncertainties. The information given is as of the indebtedness across countries in Africa, such as the sovereign debt
date of this document, and any forward-looking statements are made restructuring in Ghana), the increased level of geopolitical and
subject to the factors specified under ‘Forward-looking statements’. political risk and policy-related uncertainty (including those resulting
from the ongoing Russia-Ukraine conflict and tensions between the
Prudential’s approaches to managing risks are explained in the
Chinese Mainland and countries such as the US and India, as well as
‘Risk review’ section of this document.
regulatory tightening across sectors in the Chinese Mainland), and
1. Risks relating to Prudential’s financial situation socio-political, climate-driven and pandemic events. The extent of

1.1 Prudential’s businesses are inherently subject to market the financial market and economic impact of these factors may be
fluctuations and general economic conditions, each of which highly uncertain and unpredictable and influenced by the actions,
may adversely affect the Group’s business, financial condition, including the duration and effectiveness of mitigating measures of
results of operations and prospects. governments, policymakers and the public.
Uncertainty, fluctuations or negative trends in global and national
The adverse effects of such factors could be felt principally through
macroeconomic conditions and investment climates could have a
the following items:
material adverse effect on Prudential’s business, financial condition
and results of operations, including as a result of increased strategic, > Changes to interest rates could reduce Prudential’s capital strength
business, insurance, product and customer conduct risks. Prudential and impair its ability to write significant volumes of new business.
operates in a macroeconomic and global financial market Increases in interest rates could adversely impact the financial
environment that continues to present significant uncertainties and condition of the Group through changes in the present value of
potential challenges. For example, while headline inflation has moved future fees for unit-linked businesses and/or the present value of
down since mid-2022, on the back of declining food and energy future profits for accident and health products; and/or reduce the
prices, core inflation has remained well above central bank targets. value of the Group’s assets and/or have a negative impact on its
As a result, central banks have continued to raise rates to attempt to assets under management and profit. Decreases in interest rates
rein in inflation. Further interest rate increases are expected in some could increase the potential adverse impact of product guarantees
jurisdictions and tighter monetary policies could exert downward included in non-unit-linked products with a savings component;
pressures on growth. In the major emerging markets, inflation has reduce investment returns arising on the Group’s portfolios; impact
generally been less severe and monetary tightening is broadly the valuation of debt securities; and/or increase reinvestment risk

expected to have reached its peak. Nevertheless, this environment for some of the Group’s investments from accelerated
of higher global interest rates and meaningful recession risk is putting prepayments and increased redemptions.
pressure on banks’ balance sheets and margins. This could result in > A reduction in the financial strength and flexibility of corporate
a pullback in both credit supply and credit demand and lead to a entities, as experienced by a number of issuers within the Chinese
sharper tightening in global credit conditions. In the Chinese Mainland property sector and the US commercial real estate
Mainland, the recovery has been led by services while manufacturing sector, which may result in a deterioration of the credit rating
and import growth remain weak and authorities have initiated new profile and valuation of the Group’s invested credit portfolio (and
policy stimulus to respond to the signs of softness. The weak growth which may lead to an increase in regulatory capital requirements
in the Chinese Mainland could weigh on the broader Asian region for the Group or its businesses), increased credit defaults and debt
and the global economy’s vitality going forward. Furthermore, while restructurings and wider credit and liquidity spreads resulting in
Covid-19 has evolved into an endemic disease, the broader long-term realised and unrealised credit losses. Regulations imposing or
impacts of Covid-19 continue to cause uncertainty to financial market increasing restrictions on the amount of company debt financing,
volatility, global economic activity and impact on sales, as well as such as those placing limits on debt or liability ratios, may also
insurance experience. Such uncertainties may apply for a prolonged reduce the financial flexibility of corporate entities. Similarly,
period of time. The transition to a lower carbon economy, the timing securitised assets in the Group’s investment portfolio are subject to
and speed of which is uncertain and will vary by country, may also default risk and may be adversely impacted by delays or failures of
result in greater uncertainty, fluctuations or negative trends in asset borrowers to make payments of principal and interest when due.
valuations and reduced liquidity, particularly for carbon intensive Where a widespread deterioration in the financial strength of
sectors, and may have a bearing on inflation levels. corporate entities occurs, any assumptions on the ability and
Global financial markets are also subject to uncertainty and volatility willingness of governments to provide financial support may need
created by a variety of other factors. These factors include actual or to be revised.
expected changes in both monetary and regulatory policy in the > Failure of, or legal, regulatory or reputational restrictions on the
Chinese Mainland, the US and other jurisdictions together with their Group’s ability to deal with, counterparties who have transactions
impact on base interest rates and the valuation of all asset classes with Prudential (such as banks, reinsurers and counterparties to cash
and inflation expectations; slowdowns or reversals in world or regional management and risk transfer or hedging transactions) to meet
economic growth (particularly where this is abrupt, as has been the commitments could give rise to a negative impact on Prudential’s
case with the Covid-19 lockdowns or the impact of the Russia-Ukraine financial position and on the accessibility or recoverability of
conflict and geopolitical tensions); and sector-specific slowdowns or amounts due or the adequacy of collateral. Geographic or sector
deteriorations which have the potential to have contagion impacts concentrations of counterparty credit risk could exacerbate the
(such as challenges in the US and EU banking sector, increasing risk in impact of these events where they materialise.
the US commercial real estate sector, and the negative developments

Risk factors / continued
> Estimates of the value of financial instruments becoming more In general, upheavals in the financial markets may affect general
difficult because in certain illiquid, volatile or closed markets, levels of economic activity, employment and customer behaviour.
determining the value at which financial instruments can be As a result, insurers may experience an elevated incidence of claims,
realised is highly subjective. Processes to ascertain such values frauds, lapses, partial withdrawals or surrenders of policies, and some
require substantial elements of judgement, assumptions and policyholders may choose to defer or stop paying insurance premiums
estimates (which may change over time). Where the Group is or reduce deposits into retirement plans. Uncertainty over livelihoods,
required to sell its investments within a defined timeframe, such elevated cost of living and challenges in affordability may adversely
market conditions may result in the sale of these investments at impact the demand for insurance products, and increase regulatory
below expected or recorded prices. risk in meeting regulatory definitions and expectations with respect
> Illiquidity of the Group’s investments. The Group holds certain to vulnerable customers (see risk factor 3.7). In addition, there may
investments that may, by their nature, lack liquidity or have the be a higher incidence of counterparty failures. If sustained, this
potential to lose liquidity rapidly, such as investment funds environment is likely to have a negative impact on the insurance
(including money market funds), privately placed fixed maturity sector over time and may consequently have a negative impact
securities, mortgage loans, complex structured securities and on Prudential’s business, balance sheet and profitability. For example,
alternative investments. If these investments were required to this could occur if the recoverable value of intangible assets for
be liquidated on short notice, the Group may experience difficulty bancassurance agreements is reduced. New challenges related to
in doing so and may be forced to sell them at a lower price than market fluctuations and general economic conditions may continue
it otherwise would have been able to realise. to emerge. For example, sustained inflationary pressures driving
> A reduction in revenue from the Group’s products where fee interest rates to even higher levels may lead to increased lapses for
income is linked to account values or the market value of the funds some guaranteed savings products where higher levels of guarantees
under management. Sustained inflationary pressures which may are offered by products of the Group’s competitors, reflecting
drive higher interest rates may also impact the valuation of fixed consumer demand for returns at the level of, or exceeding, inflation.
income investments and reduce fee income. High inflation, combined with an economic downturn or recession,
> Increased illiquidity, which includes the risk that expected cash may also result in affordability challenges, adversely impacting the
inflows from investments and operations will not be adequate ability of consumers to purchase insurance products. Rising inflation,
to meet the Group’s anticipated short-term and long-term via medical claims inflation (with rising medical import prices a factor
policyholder benefits and expense payment obligations. Increased under current market conditions), may adversely impact the
illiquidity also adds to the uncertainty over the accessibility of profitability of the Group’s businesses.
financial resources which in extreme conditions could impact the Any of the foregoing factors and events, individually or together,
functioning of markets and reduce capital resources as valuations could have a material adverse effect on Prudential’s business,
decline. This could occur where external capital is unavailable at financial condition, results of operations and prospects.
sustainable cost, increased liquid assets are required to be held as
collateral under derivative transactions or redemption restrictions 1.2 Geopolitical and political risks and uncertainty may
are placed on Prudential’s investments in illiquid funds. In addition, adversely impact economic conditions, increase market volatility
significant redemption requests could also be made on Prudential’s and regulatory compliance risks, cause operational disruption
issued funds and while this may not have a direct impact on the to the Group and impact the implementation of its strategic
Group’s liquidity, it could result in reputational damage to plans, which could have adverse effects on Prudential’s business,
Prudential. The potential impact of increased illiquidity is more financial condition, results of operations and prospects.
uncertain than for other risks such as interest rate or credit risk. The Group is exposed to geopolitical and political risks and uncertainty
in the diverse markets in which it operates. Such risks may include:
For some non-unit-linked products with a savings component it may
not be possible to hold assets which will provide cash flows to match > The application of government regulations, executive powers,
those relating to policyholder liabilities. This may particularly be sanctions, protectionist or restrictive economic and trade policies or
the case in those markets where bond markets are less developed measures adopted by businesses or industries which increase trade
or where the duration of policyholder liabilities is longer than the barriers or restrict trade, sales, financial transactions, or the transfer
duration of bonds issued and available in the market, and in certain of capital, investment, data or other intellectual property, with
markets where regulated premium and claim values are set with respect to specific territories, markets, companies or individuals;
reference to the interest rate environment prevailing at the time of > An increase in the volume and pace of domestic regulatory
policy issue. This results in a mismatch due to the duration and changes, including those applying to specific sectors;
uncertainty of the liability cash flows and the lack of sufficient assets > The increased adoption or implementation of laws and regulations
of a suitable duration. While this residual asset/liability mismatch risk which may purport to have extra-territorial application;
can be managed, it cannot be eliminated. If interest rates in these > Withdrawals or expulsions from existing trading blocs or
markets are lower than those used to calculate premium and claim agreements or financial transaction systems, including those
values over a sustained period, this could have a material adverse which facilitate cross-border payments;
effect on Prudential’s reported profit and the solvency of its business > The implementation of measures favouring local enterprises
units. In addition, part of the profit from the Group’s operations is including changes to the maximum level of non-domestic
related to bonuses for policyholders declared on participating ownership by foreign companies, differing treatment of
products, which are impacted by the difference between actual foreign‑owned businesses under regulations and tax rules, or
investment returns of the participating fund (which are broadly international trade disputes affecting foreign companies; and
based on historical and current rates of return on equity, real estate > Measures which require businesses of overseas companies
and fixed income securities) and minimum guarantee rates offered to operate through locally incorporated entities or with
to policyholders. This profit could be lower in particular in a sustained requirements on minimum local representation on executive
low interest rate environment. or management committees.

The above risks may have an adverse impact on Prudential through 1.4 Prudential’s investment portfolio is subject to the risk
their effects on the macroeconomic outlook and the environment of potential sovereign debt credit deterioration.
for global regional and national financial markets. Prudential may Investing in sovereign debt creates exposure to the direct or indirect
also face heightened sanctions risk driven by geopolitical conflicts consequences of geopolitical or political, social or economic changes
as well as increase reputational risks. The above risks may also (including changes in governments, heads of state or monarchs),
adversely impact the economic, business, legal and regulatory military conflicts, pandemics and associated disruption, and other
environment in specific markets or territories in which the Group, events affecting the markets in which the issuers of such debt are
its joint ventures or jointly owned businesses, sales and distribution located and the creditworthiness of the sovereign. Investment in
networks, or third-party service providers have operations. sovereign debt obligations involves risks not present in debt
For internationally active groups such as Prudential, operating across obligations of corporate issuers. In addition, the issuer of the debt or
multiple jurisdictions, such measures may also add to the complexity the governmental authorities that control the repayment of the debt
of legal and regulatory compliance and increase the risk of conflicts may be unable or unwilling to repay principal or pay interest when

between the requirements of one jurisdiction and another. See risk due (or in their agreed currency) in accordance with the terms of such
factor 4.1 below. debt, and Prudential may have limited recourse to compel payment
in the event of a default. A sovereign debtor’s willingness or ability
Geopolitical and political risks and uncertainty may also adversely
to repay principal and to pay interest in a timely manner may be
impact the Group’s operations and its operational resilience.
affected by, among other factors, its cash flow situation, its relations
Increasing geopolitical and political tensions may lead to conflict,
with its central bank, the extent and availability of its foreign currency
civil unrest and/or disobedience as well as increases in domestic
reserves, the availability of sufficient foreign exchange on the date
and cross-border cyber intrusion activity. Such events could impact
a payment is due, the relative size of the debt service burden to the
operational resilience by disrupting Prudential’s systems, operations,
economy as a whole, the sovereign debtor’s policy toward local and
new business sales and renewals, distribution channels and services
international lenders, geopolitical tensions and conflicts and the
to customers, which may result in a reduction in contributions from
political constraints to which the sovereign debtor may be subject.
business units to the central cash balances and profit of the Group,
decreased profitability, financial loss, adverse customer impacts and Moreover, governments may use a variety of techniques, such as
reputational damage and may impact Prudential’s business, financial intervention by their central banks or imposition of regulatory
condition, results of operations and prospects. controls or taxes, to devalue their currencies’ exchange rates, or may
adopt monetary, fiscal and other policies (including to manage their
Legislative or regulatory changes and geopolitical or political risks
debt burdens) that have a similar effect, all of which could adversely
which adversely impact Hong Kong’s international trading and
impact the value of an investment in sovereign debt even in the
economic relationships, may result in adverse sales, operational and
absence of a technical default. Periods of economic uncertainty may
product distribution impacts to the Group due to the territory being
affect the volatility of market prices of sovereign debt to a greater

a key market which also hosts Group head office functions.
extent than the volatility inherent in debt obligations of other types
1.3 As a holding company, Prudential is dependent of issuers.
upon its subsidiaries to cover operating expenses and
In addition, if a sovereign default or other such events described
dividend payments.
above were to occur, as has happened on certain occasions in the
The Group’s insurance and asset management operations
past, other financial institutions may also suffer losses or experience
are generally conducted through direct and indirect subsidiaries,
solvency or other concerns, which may result in Prudential facing
which are subject to the risks discussed elsewhere in this
additional risks relating to investments in such financial institutions
‘Risk factors’ section.
that are held in the Group’s investment portfolio. There is also risk
As a holding company, Prudential’s principal sources of funds that public perceptions about the stability and creditworthiness of
are remittances from subsidiaries, shareholder-backed funds, financial institutions and the financial sector generally might be
the shareholder transfer from long-term funds and any amounts adversely affected as might counterparty relationships between
that may be raised through the issuance of equity, debt and financial institutions.
commercial paper.
If a sovereign were to default on or restructure its obligations, or
Certain of Prudential’s subsidiaries are subject to insurance, asset adopt policies that devalued or otherwise altered the currencies in
management, foreign exchange and tax laws, rules and regulations which its obligations were denominated, this could have a material
(including in relation to distributable profits that can limit their ability adverse effect on Prudential’s business, financial condition, results of
to make remittances). In some circumstances, including where there operations and prospects.
are changes to general market conditions, this could limit Prudential’s
ability to pay dividends to shareholders or to make available funds

held in certain subsidiaries to cover operating expenses of other
members of the Group.
A material change in the financial condition of any of Prudential’s
subsidiaries may have a material effect on its business, financial
condition, results of operations and prospects.

1.5 Downgrades in Prudential’s financial strength and credit 2. Risks relating to sustainability and environmental,
ratings could significantly impact its competitive position and social and governance (ESG) matters
damage its relationships with creditors or trading counterparties. 2.1 The failure to understand and respond effectively
Prudential’s financial strength and credit ratings, which are used by to the risks associated with ESG factors could adversely
the market to measure its ability to meet policyholder obligations, affect Prudential’s achievement of its long‑term strategy.
are an important factor affecting public confidence in Prudential’s A failure to manage the material risks associated with key ESG
products, and as a result its competitiveness. Downgrades in themes detailed below may inhibit the Group’s ability to meet its
Prudential’s ratings as a result of, for example, decreased profitability, ESG commitments and undermine its sustainability credentials by
increased costs, increased indebtedness or other concerns could have adversely impacting the Group’s reputation and brand, and its ability
an adverse effect on its ability to market products and retain current to attract and retain customers and employees, and therefore the
policyholders, as well as the Group’s ability to compete for acquisition results of its operations and delivery of its strategy and long-term
and strategic opportunities. Downgrades may also impact the financial success.
Group’s financial flexibility, including its ability to issue commercial
paper at acceptable levels and pricing. The interest rates at which (a) Environmental risks
Prudential is able to borrow funds are affected by its credit ratings, Environmental concerns, notably those associated with climate
which are in place to measure the Group’s ability to meet its change and their social and economic impacts, but also including
contractual obligations. those associated with biodiversity and nature degradation, present
long-term risks to the sustainability of Prudential and may impact
In addition, changes in methodologies and criteria used by rating its customers and other stakeholders.
agencies could result in downgrades that do not reflect changes in
the general economic conditions or Prudential’s financial condition. Prudential’s investment horizons are long term, and it is therefore
exposed to the potential long-term impact of climate change risks,
In addition, any such downgrades could have a material adverse which include the financial and non-financial impact of the transition
effect on Prudential’s business, financial condition, results of to a lower carbon economy, physical, reputational and shareholder,
operations and prospects. Prudential cannot predict what actions customer or third-party litigation risks. The global transition to a
rating agencies may take, or what actions Prudential may take in lower carbon economy may have an adverse impact on investment
response to any such actions, which could adversely affect its business. valuations and liquidity as the financial assets of carbon intensive
companies re-price, and this could result in some asset sectors facing
Any such downgrade of the Group could have an adverse effect on
significantly higher costs and a reduction in demand for their products
Prudential’s financial flexibility, requirements to post collateral under
and services. The speed of this transition, and the extent to which it
or in connection with transactions and ability to manage market risk
is orderly and managed, will be influenced by factors such as changes
exposures. In addition, the interest rates or other costs that the Group
in public policy, technology and market or investor sentiment.
incurs in respect of its financing activities may increase as a result.
The potential impact of these factors on the valuation of investments
A credit rating downgrade may also affect public confidence in the
may also have a broader economic impact that may adversely affect
Group’s products and may adversely impact its ability to market
customers and their demand for the Group’s products. Direct physical
products, retain current policyholders or attract new policyholders.
risks associated with the impacts of climate change combined with
1.6 Prudential is subject to the risk of exchange rate fluctuations the potential economic impacts of the transition to a lower carbon
owing to the geographical diversity of its businesses. economy have the potential to disproportionately impact the Asia
Due to the geographical diversity of Prudential’s businesses, and Africa markets in which Prudential operates and invests. The
Prudential is subject to the risk of exchange rate fluctuations. Group’s stakeholders increasingly expect and/or rely on the Group to
Prudential’s operations generally write policies and invest in assets support an orderly, inclusive and sustainable transition based on an
denominated in local currencies, but in some markets Prudential also understanding of relevant market and company-level transition plans
write policies and invest in assets denominated in non-local currencies, taking into consideration the impact on the economies, businesses,
primarily in the US dollar. Although this practice limits the effect of communities and customers in these markets.
exchange rate fluctuations on local operating results, it can lead to
The Group’s ability to sufficiently understand and appropriately
fluctuations in Prudential’s consolidated financial statements upon
respond to transition risk and its ability to deliver on its external
the translation of results into the Group’s presentation currency. This
carbon reduction commitments and the implementation of ESG
exposure is not currently separately managed. The Group presents its
considerations in existing or new sustainability or climate-orientated
consolidated financial statements in US dollars. The results of some
investment strategies and products may be limited by insufficient or
entities within the Group are not denominated in or linked to the
unreliable data on carbon exposure, transition plans of the investee
US dollar and some enter into transactions which are conducted in
company assets in which it invests or inability to divest as planned.
non-US dollar currencies. Prudential is subject to the risk of exchange
The direct physical impacts of climate change, including shorter-
rate fluctuations from the translation of the results of these entities
term event driven (acute) physical risks and those associated
and non-US dollar transactions and the risks from the maintenance
with longer-term shifts in climate patterns (chronic physical risks),
of the HK dollar peg to the US dollar. In cases where a non-US dollar
are likely to become increasingly significant factors in the mortality
denominated surplus arises in an operation which is to be used to
and morbidity risk assessments for the Group’s insurance product
support Group capital or shareholders’ interest (ie remittances), this
underwriting and offerings and their associated claims profiles.
currency exposure may be hedged where considered economically
Such short-term and long-term environmental changes in markets
favourable. Prudential is also subject to the residual risks arising from
where Prudential or its key third parties operate could adversely
currency swaps and other derivatives that are used to manage the
impact the Group’s operational resilience and its customers, which
currency exposure.
may potentially occur through migration or displacement both
within and across borders.

The pace and volume of global standards and sustainability and technology risk as well as regulatory, ethical and reputational risks
climate-related regulations emerging across the markets in which the associated with customer data misuse or security breaches. These
Group operates, the need to deliver on existing and new exclusions risks are explained in risk factor 3.5. The increasing digitalisation
or restrictions on investments in certain sectors, engagement and of products, services and processes may also result in new and
reporting commitments and the demand for externally assured unforeseen regulatory requirements and stakeholder expectations,
reporting may give rise to compliance, operational, disclosure and including those relating to how the Group supports its customers
litigation risks which may be increased by the multi-jurisdictional through this transformation.
coordination required in adopting a consistent risk management
approach. The launch of sustainability-focused funds or products, Failure to foster an inclusive, diverse and open environment for the
or the (method of) incorporation of ESG considerations in the Group’s employees in accordance with the principles of the Universal
investment process for existing products, may increase the risks Declaration of Human Rights and of the International Labour
related to the perceived fulfilment of fiduciary duties to customers Organisation’s core labour standards could impact the ability to
attract and/or retain employees and increase potential reputational

and investors by the Group’s appointed asset managers and may
increase regulatory compliance, customer conduct, product risk. The business practices within the Group’s third-party supply
disclosure and litigation risks. Prudential’s voluntary memberships chain and investee companies with regards to topics including labour
of, or participation within, industry organisations and groups or their standards, respect of human rights and modern slavery also expose
initiatives may increase stakeholder expectations of the Group’s the Group to potential reputational risk.
acquiescence or compliance with their publicised positions or aims. (c) Governance
The reputational and litigation risks of the Group may subsequently A failure to maintain high standards of corporate governance
increase where the stated positions or aims of such industry may adversely impact the Group and its customers and employees
organisations or their initiatives continue to evolve, or where and increase the risk of poor decision-making and a lack of oversight
jurisdictions interpret their objectives as adversely impacting on and management of its key risks. Poor governance may arise
markets or consumers, including for example, perceived conflicts where key governance committees have insufficient independence,
with anti-trust laws. See risk factor 4.1 for details of sustainability and a lack of diversity, skills or experience in their members, or unclear
ESG-related regulatory and supervisory developments with potential (or insufficient) oversight responsibilities and mandates. Inadequate
impacts for the Group. oversight over remuneration also increases the risk of poor senior
A failure to understand, manage and provide greater transparency management behaviours.
of its exposure to these climate-related risks may have increasingly Prudential operates across multiple jurisdictions and has a group and
adverse implications for Prudential and its stakeholders. subsidiary governance structure which may add further complexity
(b) Social risks to these considerations. Participation in joint ventures or partnerships
where Prudential does not have direct overall control, and the use of

Social risks that could impact Prudential may arise from a failure
to consider the rights, diversity, wellbeing, changing needs, third-party service providers, increase the potential for reputational
human rights and interests of its customers and employees and risks arising from inadequate governance.
the communities in which the Group or its third parties operate. Sustainability and ESG-related risks may directly or indirectly impact
Perceived or actual inequity and income disparities (both with Prudential’s business and the achievement of its strategic focus on
developed markets and within the Group’s markets), intensified by the providing greater and more inclusive access to good health and
pandemic, have the potential to further erode social cohesion across financial security, responsible stewardship in managing the human
the Group’s markets which may increase operational and disruption impact of climate change and building human and social capital
risks for Prudential and impact the delivery of the Group’s strategy with its broad range of stakeholders, which range from customers,
on developing affordable and accessible products to meet the needs institutional investors, employees and suppliers, to policymakers,
of people across these markets. Direct physical impacts of climate regulators, industry organisations and local communities. A failure to
change and deterioration of the natural environment and the global transparently and consistently implement the Group’s ESG strategy
transition to a lower carbon economy may disproportionately impact across its local businesses and operational, underwriting and
the stability of livelihoods and health of lower socioeconomic groups investment activities, as well as a failure to implement and uphold
within the markets in which the Group operates. These risks are responsible business practices, may adversely impact the financial
heightened as Prudential operates in multiple jurisdictions that are condition and reputation of the Group. This may also negatively
particularly vulnerable to climate change, with distinct local cultures impact the Group’s stakeholders, who all have expectations, concerns
and considerations. and aims related to sustainability and ESG matters, which may differ,
Evolving social norms and emerging population risks associated both within and across the markets in which the Group operates.
with public health trends (such as an increase in obesity and mental In its investment activities, Prudential’s stakeholders increasingly
health deterioration) and demographic changes (such as population have expectations of, and place reliance on, an approach to
urbanisation and ageing), as well as migration due to factors responsible investment that demonstrates how sustainability and
including climate-related developments, may affect customer ESG considerations are effectively integrated into investment
lifestyles and therefore may impact the level of claims under the decisions, responsible supply chain management and the
Group’s insurance product offerings. performance of fiduciary and stewardship duties. These duties
include effective implementation of exclusions, voting and active
As a provider of insurance and investment services, the Group is engagement decisions with respect to investee companies, as both
increasingly focused on making its products more accessible through an asset owner and an asset manager, in line with internally defined
the use of digital services, technologies and distribution methods procedures and external commitments. The increased demands and
to customers. As a result, Prudential has access to extensive amounts expectations of stakeholders for transparency and disclosure of the
of customer personal data, including data related to personal health, activities that support these duties further heightens disclosure risks
and an increasing ability to analyse and interpret this data through for the Group, including those associated with potentially overstating
the use of complex tools, machine learning and artificial intelligence or mis-stating the positive environmental or societal impacts of the
technologies. The Group is therefore exposed to increase in Group’s activities, products and services (eg greenwashing).

3. Risks relating to Prudential’s business activities and industry otherwise implement its strategy. Technological advances, including
3.1 The implementation of large-scale transformation, those enabling increased capability for gathering large volumes of
including complex strategic initiatives, gives rise to significant customer health data and developments in capabilities and tools in
design and execution risks and may affect Prudential’s analysing and interpreting such data (such as artificial intelligence
operational capability and capacity. Failure of these initiatives and machine learning), may result in increased competition to the
to meet their objectives may adversely impact the Group and Group, both from within and outside the insurance industry, and may
the delivery of its strategy. increase the competition risks resulting from a failure to be able to
Where required in order to implement its business strategies for attract or retain talent.
growth, meet customer needs, improve customer experiences,
strengthen operational resilience, meet regulatory and industry The Group’s principal competitors include global life insurers, regional
requirements and maintain market competitiveness, Prudential from insurers and multinational asset managers. In most markets, there
time to time undertake corporate restructuring, transformation are also local companies that have a material market presence.
programmes and acquisitions/disposals across its business. Many Prudential believes that competition will intensify across all regions
such change initiatives are complex, inter-connected and/or of large in response to consumer demand, digital and other technological
scale, and include improvement of business efficiencies through advances (including the emergence and maturing of new distribution
operating model changes, advancing the Group’s digital capability, channels), the need for economies of scale and the consequential
expanding strategic partnerships and industry and regulatory-driven impact of consolidation, regulatory actions and other factors.
change. There may be a material adverse effect on Prudential’s Prudential’s ability to generate an appropriate return depends
business, employees, customers, financial condition, results of significantly upon its capacity to anticipate and respond appropriately
operations and prospects if these initiatives incur unplanned costs, to these competitive pressures. This includes managing the potential
are subject to implementation delays, or fail to fully meet their adverse impacts to the commercial value of the Group’s existing sale
objectives. Leadership changes and changes to the business and and distribution arrangements, such as bancassurance arrangements,
operational model of the Group increase uncertainty for its in markets where new distribution channels develop.
employees, which may affect operational capacity and the ability
of the Group to deliver its strategy. There may also be adverse Failure to do so may adversely impact Prudential’s ability to attract
implications for the Group in undertaking transformation initiatives and retain customers and, importantly, may limit Prudential’s ability
such as placing additional strain on employees, operational capacity, to take advantage of new business arising in the markets in which it
and weakening the control environment. Implementing initiatives operates, which may have an adverse impact on the Group’s business,
related to the revised strategy for the Group, control environment financial condition, results of operations and growth prospects.
transformation, significant accounting standard changes, such as 3.3 Adverse experience in the operational risks inherent in
IFRS 17, and other regulatory changes in major businesses of the Prudential’s business, and those of its material outsourcing
Group, such as those related to the agency transformation at the partners, could disrupt its business functions and have a
Indonesia businesses, may amplify these risks. Risks relating to these negative impact on its business, financial condition, results
regulatory changes are explained in risk factor 4.1 below. of operations and prospects.
The speed of technological change in the business could outpace Operational risks are present in all of Prudential’s businesses,
the Group’s ability to anticipate all the unintended consequences including the risk of loss arising from inadequate or failed internal
that may arise from such change. Innovative technologies, such as processes, systems or human error, fraud, the effects of natural
artificial intelligence, expose Prudential to potential additional or man-made catastrophic events (such as natural disasters,
regulatory, information security, privacy, operational, ethical and pandemics, cyber-attacks, acts of terrorism, civil unrest and other
conduct risks which, if inadequately managed, could result in catastrophes) or other external events. These risks may also adversely
customer detriment and reputational damage. impact Prudential through its partners. Prudential relies on the
performance and operations of a number of bancassurance,
3.2 Prudential’s businesses are conducted in highly competitive product distribution, outsourcing (including but not limited to
environments with rapidly developing demographic trends. external technology, data hosting and payments) and service
The profitability of the Group’s businesses depends on partners. These include back office support functions, such as those
management’s ability to respond to these pressures and trends. relating to technology infrastructure, development and support and
The markets for financial services are highly competitive, with a customer-facing operations and services, such as product distribution
number of factors affecting Prudential’s ability to sell its products and services (including through digital channels) and investment
and profitability, including price and yields offered, financial strength operations. This creates reliance upon the resilient operational
and ratings, range of product lines and product quality, ability to performance of these partners and exposes Prudential to the risk that
implement and comply with regulatory changes, the imposition the operations and services provided by these partners are disrupted
of regulatory sanctions, brand strength and name recognition, or fail. Further, Prudential operates in extensive and evolving legal
investment management performance and fund management and regulatory environments which adds to the complexity of the
trends, historical bonus levels, the ability to respond to developing governance and operation of its business processes and controls.
demographic trends, customer appetite for certain savings products
(which may be impacted by broader economic pressures) and Exposure to such risks could impact Prudential’s operational resilience
technological advances. In some of its markets, Prudential faces and ability to perform necessary business functions when there are
competitors that are larger, have greater financial resources or a disruptions to its systems, operations, new business sales and
greater market share, offer a broader range of products or have higher renewals, distribution channels and services to customers, or result in
bonus rates. Further, heightened competition for talented and skilled the loss of confidential or proprietary data. Such risks, as well as any
employees, agents and independent financial advisers may limit weaknesses in administration systems (such as those relating to
Prudential’s potential to grow its business as quickly as planned or policyholder records) or actuarial reserving processes, may also result

in increased expenses, as well as legal and regulatory sanctions, 3.4 Attempts to access or disrupt Prudential’s technology
decreased profitability, financial loss and customer conduct risk systems, and loss or misuse of personal data, could result
impacts. This could damage Prudential’s reputation and relationship in loss of trust from Prudential’s customers and employees
with its customers and business partners. A failure to adequately and reputational damage, which could have material adverse
oversee service partners (or their technology and operational systems effects on the Group’s business, financial condition, results
and processes) could result in significant service degradation or of operations and prospects.
disruption to Prudential’s business operations and services to its Prudential and its business partners are increasingly exposed to
customers, which may have reputational or conduct risk implications the risk that individuals (which includes connected persons such as
and could have a material adverse effect on the Group’s business, employees, contractors or representatives of Prudential or its
financial condition, results of operations and prospects. third-party service providers, and unconnected persons) or groups
may intentionally or unintentionally disrupt the availability,
Prudential’s business requires the processing of a large number of
confidentiality and integrity of its technology systems or compromise
transactions for a diverse range of products. It also employs complex

the integrity and security of data (both corporate and customer),
and inter-connected technology and finance systems, models,
including disruption from ransomware (malicious software designed
and user-centric applications in its processes to perform a range of
to restrict Prudential’s access to data until the payment of a sum of
operational functions. These functions include the calculation of
money and to exfiltrate data with a threat to publicly expose
regulatory or internal capital requirements, the valuation of assets
Prudential data if a ransom payment is not paid), and untargeted but
and liabilities and the acquisition of new business using artificial
sophisticated and automated attacks. Where these risks materialise,
intelligence and digital applications. Many of these tools form an
this could result in disruption to key operations, make it difficult to
integral part of the information and decision-making frameworks
recover critical data or services or damage assets, any of which could
used by Prudential and the risk of adverse consequences arising from
result in loss of trust from Prudential’s customers and employees,
erroneous or misinterpreted tools used in core business activities,
reputational damage and direct or indirect financial loss. The
decision-making and reporting exists. Errors or limitations in these
escalation of the Russia-Ukraine conflict coincided with a significant
tools, or their inappropriate usage, may lead to regulatory breaches,
increase in reported cyber threats and attacks during 2022.
inappropriate decision-making, financial loss, customer detriment,
Cyber-security threats continue to evolve globally in sophistication
inaccurate external reporting, or reputational damage. The long-term
and potential significance. Prudential’s increasing profile in its current
nature of much of the Group’s business also means that accurate
markets and those in which it is entering, growing customer interest
records are to be maintained securely for significant time periods.
in interacting with their insurance providers and asset managers
The performance of the Group’s core business activities and the through the internet and social media, improved brand awareness,
uninterrupted availability of services to customers rely significantly and increasing adoption of the Group’s digital platforms could also
on, and require significant investment in, resilient IT applications, increase the likelihood of Prudential being considered a target by
cyber criminals. Ransomware campaigns have increased in frequency

infrastructure and security architectural design, data governance
and management and other operational systems, personnel, controls, and represent an increasing threat to the financial services sector,
and mature processes. During large-scale disruptive events or times with recent highly publicised attacks on financial services companies.
of significant change, or due to other factors impacting operational
There is an increasing requirement and expectation on Prudential
performance including adequacy of skilled/experienced personnel,
and its business partners not only to hold the data of customers,
the resilience and operational effectiveness of these systems and
shareholders and employees securely, but also to ensure its ongoing
processes at Prudential and/or its third-party service providers may be
accuracy and that it is being used in a transparent, appropriate and
adversely impacted. In particular, Prudential and its business partners
ethical way, including in decision-making where automated processes
are making increasing use of emerging technological tools and digital
are employed. As Prudential and its business partners increasingly
services, or forming strategic partnerships with third parties to provide
adopt digital technology in business operations, the data the Group
these capabilities. Automated distribution channels and services to
generates creates an opportunity to enhance customer engagement
customers increase the criticality of providing uninterrupted services.
while maintaining a responsibility to keep customers’ personal data
A failure to implement appropriate governance and management of
safe. Prudential adheres to data minimisation and ‘privacy-by-design’
the incremental operational risks from emerging technologies may
principles, ensuring that the Group only collects and uses data for its
adversely impact Prudential’s reputation and brand, the results of its
intended purpose and does not retain it longer than necessary, and
operations, its ability to attract and retain customers and its ability to
that privacy elements are present both at the onset and throughout
deliver on its long-term strategy and therefore its competitiveness
the Group’s entire data processes. The handling of customer’s data
and long-term financial success.
is governed by specific policies and frameworks, such as the Group
Although Prudential’s technology, compliance and other operational Information Security Policy, the Group Privacy Policy and the
systems, models and processes incorporate strong governance and Group Data Policy. A failure to adhere to these polices may result
controls designed to manage and mitigate the operational and model in regulatory scrutiny and sanctions and detriment to customers
risks associated with its activities, there can be no complete assurance and third-party partners, and may adversely impact the reputation
as to the resilience of these systems and processes to disruption or and brand of the Group, its ability to attract and retain customers
that governance and controls will always be effective. Due to human and deliver on its long-term strategy and therefore the results of
error, among other reasons, operational and model risk incidents do its operations.
occur from time to time and no system or process can entirely prevent
them. Prudential’s legacy and other technology systems, data and
processes, as with operational systems and processes generally,
may also be susceptible to failure or security/data breaches.

The risk to the Group of not meeting these requirements and > The increased volume, breadth and sensitivity of data on which
expectations may be increased by the development of cloud-based the business model of the platform is dependent and to which
infrastructure and the usage of digital distribution and service the Group has access, holds, analyses and processes through
channels, which can collect a broader range of personal and its models, which increases data security, privacy and usage risks.
health-related data from individuals at increased scale and speed, The use of complex models, including where they use artificial
and the use of complex tools, machine learning and artificial intelligence for critical decision-making, in the application’s
intelligence (AI) technologies to process, analyse and interpret this features and offerings may give rise to ethical, operational,
data. New and currently unforeseeable regulatory, reputational and conduct, litigation and reputational risks where they do not
operational issues may also arise from the increased use of emerging function as intended;
technology such as generative AI which require careful consideration > Reliance on and/or collaboration with a number of third-party
and guardrails established to enable its safe use. Regulatory partners and providers, which may vary according to the market.
developments in cybersecurity and data protection continue to This may increase operational disruption risks to the uninterrupted
progress worldwide. In 2023, the momentum in focus on data privacy provision of services to customers, regulatory compliance and
continues to increase, with regulators in Asia introducing new data conduct risks, and the potential for reputational risks; and
privacy laws or enhancing existing ones (eg new data protection laws > Support for, and development of, the platform being provided
in Vietnam in June 2023 and extensive amendments to the Korean outside of some of the individual markets in which the platform
data privacy law). Such developments may increase the complexity operates, which may increase the complexity of local legal and
of requirements and obligations in this area, in particular where they regulatory compliance.
include national security restrictions or impose differing and/or
conflicting requirements compared with those of other jurisdictions. New product offerings and functionality may be developed and
These risks may also increase the financial and reputational provided through the digital platforms, which may introduce new
implications for Prudential of regulatory non-compliance or a regulatory, operational, conduct and strategic risks for the Group.
significant breach of IT systems or data, including at its joint ventures Regulations may be introduced, which limit the permitted scope
or third-party service providers. The international transfer of data of online or digitally distributed insurance and asset management
may, as a global organisation, increase regulatory risks for the Group. services, and may restrict current or planned offerings provided
by the platform.
Prudential has been, and likely will continue to be, subject to
potential damage from computer viruses, unauthorised access and A failure to implement appropriate governance and management
cyber-security attacks such as ‘denial of service’ attacks, phishing of the incremental and new risks detailed above may adversely
and disruptive software campaigns. Despite the multi-layers security impact Prudential’s reputation and brand, its ability to attract
defences in place, there can be no assurance that such events will not and retain customers, its competitiveness and its ability to deliver
take place which may have material adverse consequential effects on its long-term strategy. In response, the Group has enhanced its
on Prudential’s business, financial condition, results of operations and governance framework in the first half of 2023 to better oversee
prospects. To that end, the Group’s security strategy encompasses a the implementation and risk management of digital platforms. This
cyber resilience theme focusing on its ability to respond and recover includes the establishment of digital governance forums that oversee
from an attack in order to maintain its reputation and customer trust. digital transformation from various dimensions such as customer
centricity, strategic, financial, operational and risk management.
3.5 Prudential’s digital platforms may heighten existing
business risks to the Group or introduce new risks as the 3.6 Prudential operates in certain markets with joint venture
markets in which it operates, and its partnerships and product partners and other shareholders and third parties. These
offerings evolve. businesses face the same risks as the rest of the Group and
Prudential’s digital platforms are subject to a number of risks also give rise to certain risks to Prudential that the Group
discussed within this ‘Risk factors’ section. In particular, these include does not face with respect to its wholly-owned subsidiaries.
risks related to legal and regulatory compliance and the conduct of Prudential operates, and in certain markets is required by local
business; the execution of complex change initiatives; information regulation to operate, through joint ventures and other joint
security and data privacy; the use of models (including those using ownership or third-party arrangements (including associates). The
artificial intelligence) and the handling of personal data; the resilience financial condition, operations and reputation of the Group may be
and integrity of IT infrastructure and operations; and those relating adversely impacted, or the Group may face regulatory censure, in the
to the management of third parties. These existing risks for the Group event that any of its partners fails or is unable to meet its obligations
may be increased due to a number of factors: under the arrangements, encounters financial difficulty, or fails to
comply with local or international regulation and standards such as
> The number of current and planned markets in which Prudential’s those pertaining to the prevention of financial crime. Reputational
digital platforms operate, each with their own laws and regulations, risks to the Group are amplified where any joint ventures or jointly
regulatory and supervisory authorities, the scope of application owned businesses carry the Prudential name.
of which may be uncertain or change at pace, may increase
regulatory compliance risks;
> The implementation of planned digital platforms and services,
which may require the delivery of complex, inter-connected change
initiatives across current and planned markets. This may give rise to
design and execution risks, which could be amplified where these
change initiatives are delivered concurrently;

A material proportion of the Group’s business comes from its joint Such repricing is dependent on the availability of operational and
venture and associate businesses in the Chinese Mainland and India, resource capacity to do so, as well as the Group’s ability to implement
respectively. For such operations the level of control exercisable by such re-pricing in light of the increased regulatory and societal
the Group depends on the terms of the contractual agreements as expectations reflecting the affordability of insurance products and
well as local regulatory constraints applicable to the joint venture and the protection of vulnerable customers, as well as the commercial
associate businesses, such as listing requirements, in particular, those considerations of the markets the Group operates in. The profitability
terms providing for the allocation of control among, and continued of the Group’s businesses also may be adversely impacted by medical
cooperation between, the participants. As a result, the level of reimbursement downgrade experience following any re-pricing.
oversight, control and access to management information the Group
is able to exercise at these operations may be lower compared to the Prudential, like other insurers, needs to make assumptions about
Group’s wholly-owned businesses. This may increase the uncertainty a number of factors in determining the pricing of its products, for
for the Group over the financial condition of these operations, setting reserves, and for reporting its capital levels and the results of
its long-term business operations. A further factor is the assumptions

including the valuation of their investment portfolios and the extent
of their invested credit and counterparty credit risk exposure, resulting that Prudential makes about future expected levels of the rates of
in heightened risks to the Group as a whole. This may particularly early termination of products by its customers (known as persistency).
be the case where the geographies in which these operations are This is relevant to a number of lines of business in the Group.
located experience market or sector-specific slowdowns, disruption, Prudential’s persistency assumptions reflect a combination of
volatility or deterioration (such as the negative developments in recent past experience for each relevant line of business and expert
the Chinese Mainland property sector and more widely across the judgement, especially where a lack of relevant and credible experience
Chinese Mainland economy). In addition, the level of control data exists. Any expected change in future persistency is also reflected
exercisable by the Group could be affected by changes in the in the assumptions. If actual levels of persistency are significantly
maximum level of foreign ownership imposed on foreign companies different than assumed, the Group’s results of operations could be
in certain jurisdictions. The exposure of the Group to the risks detailed adversely affected.
in risk factor 3.1 above may also increase should the Group’s strategic In addition, Prudential’s business may be adversely affected by
initiatives include the expansion of the Group’s operations through epidemics, pandemics and other effects that give rise to a large
joint ventures or jointly owned businesses. number of deaths or additional sickness claims, as well as increases
In addition, a significant proportion of the Group’s product to the cost of medical claims. Pandemics, significant influenza and
distribution is carried out through agency arrangements and other epidemics have occurred a number of times historically, but the
contractual arrangements with third-party service providers not likelihood, timing, or the severity of future events cannot be predicted.
controlled by Prudential, such as bancassurance arrangements, The effectiveness of external parties, including governmental and
and the Group is therefore dependent upon the continuation of non-governmental organisations, in combating the spread and

these relationships. The effectiveness of these arrangements, severity of any epidemics, as well as pharmaceutical treatments and
or temporary or permanent disruption to them, such as through vaccines (and their rollouts) and non-pharmaceutical interventions,
significant deterioration in the reputation, financial position or other could have a material impact on the Group’s claims experience.
circumstances of the third-party service providers, material failure in The longer-term effects of Covid-19 have included, and may continue
controls (such as those pertaining to the third-party service providers’ to include, latent morbidity impacts from the deferral of medical
systems failure or the prevention of financial crime), regulatory treatment by policyholders. It may be a factor in increasing morbidity
changes affecting the governance, operation, or failure to meet claims and there may be implications from other factors such as
any regulatory requirements could adversely affect Prudential’s long-term post-Covid-19 symptoms (although there is currently no
reputation and its business, financial condition, results of operations consensus on the longer-term impact on morbidity).
and prospects.
Prudential uses reinsurance to selectively transfer mortality, morbidity
3.7 Adverse experience relative to the assumptions used and other risks. This exposes the Group to the counterparty risk of a
in pricing products and reporting business results could reinsurer being unable to pay reinsurance claims or otherwise meet
significantly affect Prudential’s business, financial condition, their commitments; the risk that a reinsurer changes reinsurance terms
results of operations and prospects. and conditions of coverage, or increases the price of reinsurance which
In common with other life insurers, the profitability of the Group’s Prudential is unable to pass on to its customers; the risk of ambiguity
businesses depends on a mix of factors including mortality and in the reinsurance terms and conditions leading to uncertainty
morbidity levels and trends, policy surrenders and take-up rates whether an event is covered under a reinsurance contract; and the risk
on guarantee features of products, investment performance of being unable to replace an existing reinsurer, or find a new reinsurer,
and impairments, unit cost of administration and new business
for the risk transfer being sought.

acquisition expenses.
Any of the foregoing, individually or together, could have a material
The Group’s businesses are subject to inflation risk. In particular, the adverse effect on Prudential’s business, financial condition, results
Group’s medical insurance businesses are also exposed to medical of operations and prospects.
inflation risk. The potential adverse impacts to the profitability of the
Group’s businesses from the upheavals in financial markets and levels
of economic activity on customer behaviours are described in risk
factor 1.1 above. While the Group has the ability to re-price some of
its products, the frequency of re-pricing may need to be increased.

4. Risks relating to legal and regulatory requirements Further information on specific areas of regulatory and supervisory
4.1 Prudential conducts its businesses subject to regulation requirements and changes are included below.
and associated regulatory risks, including a change to the basis
in the regulatory supervision or intervention of the Group, the (a) Group-wide Supervision (GWS)
level of regulatory scrutiny arising from the Group’s reported To align Hong Kong’s regulatory regime with international standards
events, the effects and pace of changes in the laws, regulations, and practices, the Hong Kong Insurance Authority (IA) developed
policies and their interpretations and any industry/accounting its GWS Framework for multinational insurance groups under its
standards in the markets in which it operates. supervision based on a principles-based and outcome-focused
Changes in government policy and legislation (including in relation approach, which allows the Hong Kong IA to exercise direct regulatory
to tax and data security), capital control measures on companies powers over the designated holding companies of multinational
and individuals, regulation or regulatory interpretation applying to insurance groups. The GWS Framework became effective for
companies in the financial services and insurance industries in any Prudential upon designation by the Hong Kong IA on 14 May 2021.
of the markets in which Prudential operates (including those related Prudential has in place a monitoring mechanism and controls to
to the conduct of business by Prudential or its third-party distributors), promote constructive engagement with the Hong Kong IA as its
or decisions taken by regulators in connection with their supervision Group-wide supervisor to ensure ongoing sustainable compliance.
of members of the Group, which in some circumstances may be (b) Global regulatory requirements and systemic risk regulation
applied retrospectively, may adversely affect Prudential. The impact Currently there are a number of ongoing global regulatory
from any regulatory changes may be material to Prudential, for developments which could impact Prudential’s businesses in the
example changes may be required to its product range, distribution many jurisdictions in which they operate. These include the work
channels, handling and usage of data, competitiveness, profitability, of the Financial Stability Board (the FSB) in the area of systemic risk
capital requirements, risk management approaches, corporate or including assessing and mitigating systemic risk through the Holistic
governance structure, financial and non-financial disclosures and Framework (HF) (replacing the Global Systemically Important Insurer
reported results and financing requirements. Changes in regulations G-SII designations) and the Insurance Capital Standard (the ICS)
related to capital have the potential to change the extent of both being developed by the International Association of Insurance
sensitivity of capital to market factors. Also, regulators in jurisdictions Supervisors (the IAIS). There is a risk attached to the manner in which
in which Prudential operates may impose requirements affecting regulators may choose to implement the HF and ICS which could lead
the allocation of capital and liquidity between different business units to additional burdens or adverse impacts to the Group. As a result,
in the Group, whether on a geographic, legal entity, product line or there remains a high degree of uncertainty over the potential impact
other basis. Regulators may also change solvency requirements, of such changes on the Group.
methodologies for determining components of the regulatory or
statutory balance sheet including the reserves and the level of capital On 9 December 2022 the FSB announced its decision to discontinue
required to be held by individual businesses (with implications to the the annual identification of G-SII in favour of the HF for the
Group capital position), and the regulation and expectations of assessment and mitigation of systemic risk in the insurance sector.
customer-facing processes including selling practices, and could The FSB will continue to receive an annual update on the outcomes
introduce changes that impact products sold or that may be sold. of the IAIS’s global monitoring exercise which will include IAIS’s
Furthermore, as a result of interventions by governments in light of assessment of systemic risk. The FSB reserves the right to publicly
financial and global economic conditions, there may continue to be express its views on whether an individual insurer is systemically
changes in government regulation and supervision of the financial important in the global context and the application of any necessary
services industry, including the possibility of higher capital HF supervisory policy measures to address such systemic importance.
requirements, restrictions on certain types of transactions In November 2025, the FSB will review the process for assessing and
and enhancement of supervisory powers. mitigating systemic risk under the HF. In response to this review the
FSB will, as necessary, adjust its process which could include
In the markets in which it operates, Prudential is subject to regulatory reinstating an updated G-SII identification process.
requirements and obligations with respect to financial crime,
including anti-money laundering, and sanctions compliance, which Many of the prior G-SII measures have been adopted into IAIS’s
may either impose obligations on the Group to act in a certain Insurance Core Principles (ICPs) and ComFrame, described below,
manner or restrict the way that it can act in respect of specified as well as under the Hong Kong IA’s GWS Framework. As an IAIG,
individuals, organisations, businesses and/or governments. A failure Prudential is subject to these measures. The HF also includes a
to do so may adversely impact the reputation of Prudential and/or monitoring element for the identification of a build-up of systemic
result in the imposition of legal or regulatory sanctions or restrictions risk and to enable supervisors to take action where appropriate.
on the Group. For internationally active groups such as Prudential, The FSB reserves the right to publicly express its views on whether
operating across multiple jurisdictions increases the complexity and an individual insurer is systemically important in the global context
volume of legal and regulatory compliance. Compliance with and the application of any necessary policy measures to address such
Prudential’s legal or regulatory obligations, including those in respect systemic importance. The FSB will also continue to review the process
of international sanctions, in one jurisdiction may conflict with the of assessing and mitigating systemic risk based on the HF and may
law or policy objectives of another jurisdiction, or may be seen as adjust the process, including bringing back G-SII designations if
supporting the law or policy objectives of that jurisdiction over deemed necessary. As the guidance is still developing there remains
another, creating additional legal, regulatory compliance and some uncertainty on how these new approaches to the global
reputational risks for the Group. Geopolitical developments, such as regulation of insurers will impact the Group.
the Russia-Ukraine conflict, US-Chinese Mainland and India-Chinese
Mainland tensions, may result in an increase in the volume and
complexity of international sanctions. These risks may be increased
where uncertainty exists on the scope of regulatory requirements and
obligations, and where the complexity of specific cases applicable
to the Group is high.

In November 2019 the IAIS adopted the Common Framework > In Malaysia, the BNM has initiated a multi-phase review of its
(ComFrame) which establishes supervisory standards and guidance current risk-based capital (RBC) frameworks for insurers and takaful
focusing on the effective group-wide supervision of Internationally operators since 2019, which include quantitative impact studies
Active Insurance Groups (IAIGs). Prudential was included in the first carried out in 2022, the issuance of exposure drafts and a parallel
register of IAIGs released by the IAIS on 1 July 2020 and was run planned in 2023, prior to the potential full implementation
designated an IAIG by the Hong Kong IA following an assessment targeting by end of 2024. According to the BNM’s regulatory
against the established criteria in ComFrame. calendar, new regulatory developments in customer conduct are
anticipated. The BNM has revised its policy on Management of
The ICS is a consolidated group-wide capital standard for IAIGs.
Customer Information and Permitted Disclosure in April 2023 with
The implementation of ICS is being conducted in two phases:
immediate effect. The policy sets out requirements regarding
a five-year monitoring phase, which commenced at the beginning
controls in collection, storage, use, transmission, sharing, disclosure
of 2020, followed by an implementation phase. An alternative to
and disposal of customer information. Furthermore, a new
the ICS called the ‘Aggregation Method’ has also been developed

regulation on professionalism of agents will come into effect
in the United States by the National Association of Insurance
on 1 January 2024, which requires additional fit and proper and
Commissioners; the IAIS is in the process of evaluating whether
due diligence procedures as enhanced agent onboarding and
it produces comparable outcomes to the ICS.
screening requirements.
(c) Regional regulatory regime developments, including > In Hong Kong, the revised Guideline on AML and CTF (GL3) has
climate-related regulatory changes been published with an effective date of 1 June 2023. The Hong
In the first half of 2023, regulators in Asia continued to focus on Kong Government also proposed to establish a Policyholder
the financial and operational resilience of the insurance industry Protection Scheme in December 2022 as a safety net for
as well as customer and policyholder protection. New regulations policyholders in the event of an insurer’s insolvency. A full
were continuously, and often concurrently, issued in a number of consideration of the public views is expected when finalising
markets to (1) manage insurance and financial risks, including capital the proposal to establish a Policyholder Protection Scheme.
and solvency, and (2) implement effective customer protection, > In Thailand, the Bank of Thailand imposed a restriction to prevent
information security and data privacy and residency, third-party banks from sending links via SMS, emails or social media to collect
and technology risk management controls with appropriate personal data from 9 March 2023 onwards. The same practice
corporate governance. is expected for the insurance sector and such regulatory
In some of the Group’s key markets, major regulatory changes development is being monitored.
and reforms are in progress, with some uncertainty on the full impact > In Vietnam, the amended Insurance Law took effect on 1 January
to Prudential: 2023. The new law also contains provisions on RBC, with a five-year
grace period, effective from 1 January 2028. The Vietnamese

> In the Chinese Mainland, regulatory developments across a Government also issued a decree on 17 April 2023 for personal
number of industries including the financial sector, have continued data privacy guidance with an effective date of 1 July 2023.
at pace, potentially increasing compliance risk to the Group. It provides definitions of personal data with examples of sensitive
Recent regulatory developments in the Chinese Mainland include personal data, the rights of data subjects, and notification and
the following: data transfer requirements pertaining to the use of data.
– The National Administration of Financial Regulation (NAFR) > In the Philippines, the financial product and customer service
officially replaced the China Banking and Insurance Regulatory requirements were issued by the Insurance Commission in
Commission (CBIRC) on 18 May with the aim to strengthen and March 2023 with an 18-month transition period for the adoption.
improve its financial supervision through deepening the financial The new requirements include product and service disclosures,
regulatory sector reform, enhancing the quality and effectiveness demanding a systematic approach for customer assistance and
of financial regulation, and promoting full coverage of financial conduct risk management, as well as additional complaints filing.
regulation in the sector. Financial institutions and their > In India, the Insurance Regulatory and Development Authority of
obligations to customers, including customer protection, India (IRDAI) continues to focus on industry reform. A new income
are centrally supervised by the NAFR going forward; and tax rule took effect from 1 April 2023, which makes maturity
– The amendment of the Insurance Law of People’s Republic proceeds of insurance policies taxable for policies issued from this
of China is in progress with emphasis on corporate governance date with annual premiums exceeding INR 500,000. Another
including appointment of directors, fiduciary duties, and IRDAI regulation issued in March 2023 removed commission
supervision of participating and investment-linked product payment limits for insurers, aimed to give more operational
(ILP) policies. Consultation is ongoing. flexibility to insurers and enhance insurance penetration.
> In Indonesia, regulatory and supervisory focus on the insurance

industry remains high. The Financial Services Authority of The increasing use of emerging technological tools and digital services
Indonesia, the Otoritas Jasa Keuangan (OJK) is planning to replace across industry, is likely to lead to new and unforeseen regulatory
the existing regulation on anti-money laundering (AML) and requirements and issues, including expectations regarding the
counter-terrorist financing (CTF). To strengthen the financial sector, governance and ethical and responsible use of technology, artificial
the OJK has drafted the revised regulations on consumer protection intelligence and data. Distribution and product suitability linked to
and complaints handling. Key proposed changes include a defined innovation continues to set the pace of conduct regulatory change
scope of customer protection violations, agent commission in Asia. Prudential falls under the scope of these conduct regulations
disclosures, and semi-annual filing of complaints. Industry requiring that regulatory changes are appropriately implemented.
consultation is ongoing.

The pace and volume of climate-related regulatory changes is also (e) Investor contribution schemes
increasing. Regulators including the Hong Kong IA, the Monetary Various jurisdictions in which Prudential operates have created
Authority of Singapore, the BNM in Malaysia and the Financial investor compensation schemes that require mandatory contributions
Supervisory Commission in Taiwan are in the process of developing from market participants in some instances in the event of a failure
supervisory and disclosure requirements or guidelines related to of a market participant. As a major participant in the majority of its
environmental and climate change risk management. Other chosen markets, circumstances could arise in which Prudential, along
regulators are expected to develop, or are at the early stages of with other companies, may be required to make such contributions.
developing, similar requirements. While the Hong Kong IA has yet
to propose any insurance-specific regulations on sustainability and 4.2 The conduct of business in a way that adversely impacts
climate, it has regularly emphasised its increasing focus in this area the fair treatment of customers could have a negative
in order to support Hong Kong’s position as a regional green finance impact on Prudential’s business, financial condition, results
hub, and industry consultations are expected from the Hong Kong IA of operations and prospects or on its relations with current
in 2023. International regulatory and supervisory bodies, such as the and potential customers.
International Sustainability Standards Board (ISSB) and Taskforce In the course of its operations and at any stage of the customer
on Nature-related Disclosures, are progressing on global sustainability and product lifecycle, the Group or its intermediaries may conduct
and ESG-related disclosure requirements. Recent high-profile business in a way that adversely impacts customer outcomes and the
examples of government and regulatory enforcement and civil fair treatment of customers (‘conduct risk’). This may arise through a
actions against companies for misleading investors on sustainability failure to design, provide and promote suitable products and services
and ESG-related information demonstrate that disclosure, to customers that meet their needs, are clearly explained or deliver
reputational and litigation risks remain high and may increase, real value, provide and promote a high standard of customer service,
in particular as companies increase their disclosures or product appropriately and responsibly manage customer information, or
offerings in this area. These changes and developments may give appropriately handle and assess complaints. A failure to identify or
rise to regulatory compliance, customer conduct, operational, implement appropriate governance and management of conduct
reputational and disclosure risks requiring Prudential to coordinate risk may result in harm to customers and regulatory sanctions and
across multiple jurisdictions in order to apply a consistent risk restrictions, and may adversely impact Prudential’s reputation and
management approach. brand, its ability to attract and retain customers, its competitiveness,
and its ability to deliver on its long-term strategy. There is an increased
The rapid pace and high volume of regulatory changes and focus by regulators and supervisors on customer protection, suitability,
interventions, and swiftness of their application including those and inclusion across the markets in which the Group operates,
driven by the financial services industry, have been observed in recent therefore increasing regulatory compliance and reputational risks
years across many of the Group’s markets. The transformation and to the Group in the event the Group is unable to effectively
regulatory changes have the potential to introduce new, or increase implement the regulatory changes and reforms stated in risk
existing, regulatory risks and supervisory interest while increasing factor 4.1 above.
the complexity of ensuring concurrent regulatory compliance across
markets driven by potential for increased intra-Group connectivity Prudential is, and in the future may continue to be, subject to legal
and dependencies. In jurisdictions with ongoing policy initiatives and regulatory actions in the ordinary course of its business on
and regulatory developments which will impact the way Prudential matters relevant to the delivery of customer outcomes. Such actions
is supervised, these developments are monitored at market and relate, and could in the future relate, to the application of current
group level and inform the Group’s risk framework and engagement regulations or the failure to implement new regulations, regulatory
with government policy makers, industry groups and regulators. reviews of broader industry practices and products sold (including
in relation to lines of business that are no longer active) in the past
(d) IFRS 17 under acceptable industry or market practices at the time and
IFRS 17 became effective from 1 January 2023 and the first external changes to the tax regime affecting products. Regulators may also
reporting under this basis is from half year 2023. The new standard focus on the approach that product providers use to select third-party
requires a fundamental change to accounting, presentation and distributors and to monitor the appropriateness of sales made by
disclosures for insurance contracts as well as the application of them and the responsibility of product providers for the deficiencies
significant judgement and new estimation techniques. These changes of third-party distributors.
mean that investors, rating agencies and other stakeholders may take
time to gain familiarity with the new standard and to interpret the There is a risk that new regulations introduced may have a material
Group’s business performance and dynamics. In addition, comparison adverse effect on the sales of the products by Prudential and increase
with previous financial reporting periods will be more challenging Prudential’s exposure to legal risks. Any regulatory action arising out
in the short term. New systems, processes and controls have been of the Group’s position as a product provider could have an adverse
developed to align with the new IFRS17 basis, and are expected impact on the Group’s business, financial condition, results of
to mature over time. In the short term there may be increased operations and prospects, or otherwise harm its reputation.
operational risk associated with these new systems and processes.
Apart from IFRS 17, any other changes or modification of IFRS
accounting policies may also require a change in the way in which
future results will be determined and/or a retrospective adjustment
of reported results to ensure consistency.

4.3 Litigation, disputes and regulatory investigations may On 20 December 2021 the OECD published detailed model rules for
adversely affect Prudential’s business, financial condition, the second pillar, with implementation of the rules initially envisaged
cash flows, results of operations and prospects. by 2023. These rules will apply to the Group when implemented into
Prudential is, and may in the future be, subject to legal actions, the national law of jurisdictions where it has entities within the scope
disputes and regulatory investigations in various contexts, including of the rules. On 14 March 2022 the OECD issued detailed guidance
in the ordinary course of its insurance, asset management and other to assist with interpreting the model rules.
business operations. These legal actions, disputes and investigations
may relate to aspects of Prudential’s businesses and operations that As part of the OECD’s development of the implementation
are specific to Prudential, or that are common to companies that framework, the OECD published guidance on safe harbours,
operate in Prudential’s markets. Legal actions and disputes may arise and public consultations on information returns and tax certainty
under contracts, regulations or from a course of conduct taken by on 20 December 2022, and additional administrative guidance
Prudential, including class action litigation. Although Prudential on 2 February 2023.

believes that it has adequately provided in all material respects for A number of jurisdictions in which the Group has operations have
the costs of litigation and regulatory matters, no assurance can be commenced the process of introducing the OECD model rules into
provided that such provisions are sufficient. Given the large or domestic tax law through domestic consultations and/or issuing
indeterminate amounts of damages sometimes sought, other proposed domestic legislation. Some jurisdictions where the Group
sanctions that might be imposed and the inherent unpredictability has operations may or will implement the OECD model rules with
of litigation and disputes, it is possible that an adverse outcome could effect from 1 January 2024; other jurisdictions, including Hong Kong,
have an adverse effect on Prudential’s business, financial condition, have indicated the likely implementation will be from 1 January 2025.
cash flows, results of operations and prospects. As the Group operates in a number of jurisdictions where the effective
4.4 Changes in tax legislation may result in adverse tax tax rate can be less than 15 per cent, the implementation of the model
consequences for the Group’s business, financial condition, rules and/or equivalent domestic minimum tax rules may have an
results of operations and prospects. adverse impact on the Group. Until all expected OECD documents are
Tax rules, including those relating to the insurance industry, and their published and details of implementing domestic legislation in relevant
interpretation may change, possibly with retrospective effect in any jurisdictions are available, the full extent of the long-term impact
of the jurisdictions in which Prudential operates. Significant tax on the Group’s business, tax liabilities and profits remain uncertain.
disputes with tax authorities, and any change in the tax status of
any member of the Group or in taxation legislation or its scope or
interpretation could affect Prudential’s business, financial condition,
results of operations and prospects.

The Organisation for Economic Co-operation and Development
(OECD) is currently undertaking a project intended to modernise
the global international tax system, commonly referred to as
Base Erosion and Profit-Shifting 2.0. The project has two pillars.
The first pillar is focused on the allocation of taxing rights between
jurisdictions for in-scope multinational enterprises that sell
cross‑border goods and services into countries with little or no local
physical presence. The second pillar is focused on developing a
global minimum tax rate of 15 per cent applicable to in-scope
multinational enterprises.
On 8 October 2021 the OECD issued a statement setting out the
high level principles which have been agreed by over 130 jurisdictions
involved in the project. Based on the 8 October 2021 OECD
statement, Prudential does not expect to be affected by proposals
under the first pillar given they include an exemption for regulated
financial services companies.

Corporate governance
Hong Kong listing obligations Directors’ details – emoluments

The Directors confirm that the Company has complied with all The following disclosures regarding directors’ emoluments are
the code provisions of the Corporate Governance Code (HK Code) made pursuant to Rule 13.51(2) and Rule 13.51B(1) of the Hong Kong
issued by The Stock Exchange of Hong Kong Limited (the Hong Kong Listing Rules.
Stock Exchange) set out in Appendix 14 to the Rules Governing the
Listing of Securities on The Stock Exchange of Hong Kong Limited Executive Director
(Hong Kong Listing Rules) throughout the accounting period, except In line with the announcement made on 25 May 2022, Prudential plc
as described below. entered into an agreement on 8 March 2023 with Mr Wadhwani
to replace unvested awards forfeited as a consequence of joining
The Company does not comply with provision E.1.2(d) of the HK Code Prudential plc on 25 February 2023.
which requires companies, on a comply or explain basis, to have a
remuneration committee which makes recommendations to the Under the agreement Mr Wadhwani has been granted an option
board on the remuneration of non-executive directors. This provision entitling him to receive a cash amount equal to the market value of
is not compatible with provision 34 of the UK Corporate Governance a specified number of Prudential plc ordinary shares on the date of
Code issued by the Financial Reporting Council which recommends exercise, less an option price of HKD 0.48 (being the HKD equivalent
that the remuneration of non-executive directors be determined in of 5 pence per share, using a 20-day average FX rate up to the date
accordance with the Articles of Association or, alternatively, by the Mr Wadhwani joined Prudential plc).
board. Prudential has chosen to adopt a practice in line with the Details of the option can be found in the ‘Replacement awards’
recommendations of the UK Corporate Governance Code. table on page 152.
Prudential has adopted securities dealing rules relating to Non-executive Directors
transactions by Directors on terms no less exacting than required With effect from 1 August 2023, a change in denomination from
by Appendix 10 to the Hong Kong Listing Rules and by relevant Sterling to US Dollars has been applied to the fees payable to
UK regulations. Having made specific enquiry of all Directors, the Non-executive Directors (including the Chair) to align with the
Directors have complied with these rules throughout the period. Company’s reporting currency.
The Directors confirm that the financial results contained in this
document have been reviewed by the Audit Committee.
Directors’ details – directorships and other positions
Pursuant to the disclosure requirements set out in Rule 13.51(2) and
Rule 13.51B(1) of the Hong Kong Listing Rules, the Company confirms
the following changes in Directors’ details since the publication of the
2022 Annual Report and Accounts.
Shriti Vadera
Appointed as Co-Chair of the World Bank Private Sector Investment
Lab with effect from June 2023.
Jeremy Anderson
Following the takeover of Credit Suisse by UBS, Mr Anderson has
been appointed to the Boards of two new wholly owned UBS
subsidiaries, Credit Suisse AG (with effect from June 2023) and
Credit Suisse International Limited (with effect from August 2023).
Amy Yip
Amy Yip has been appointed as an independent non-executive
director of the board of TP ICAP Group plc with effect from
1 September 2023.
Biographies for each of the Directors can be found on Prudential’s
website www.prudentialplc.com

Disclosure of interests of Directors
Directors’ shareholdings and substantial shareholdings
The Company and its Directors, Chief Executives and shareholders have been granted a partial exemption from the disclosure requirements under
Part XV of the Securities and Futures Ordinance (SFO). As a result of this exemption, Directors, Chief Executives and shareholders do not have an
obligation under the SFO to notify the Company of shareholding interests, and the Company is not required to maintain a register of Directors’
and Chief Executives’ interests under section 352 of the SFO, nor a register of interests of substantial shareholders under section 336 of the SFO.
The Company is, however, required to file with the Hong Kong Stock Exchange any disclosure of interests notified to it in the United Kingdom.
The following table sets out the interests of Directors, including the interests of persons connected with directors as at the end of the period.
This includes shares acquired under the Share Incentive Plan and deferred annual bonus awards as detailed in the ‘Other share awards’ table
on page 152.
1 January 2023
(or on date of 30 June 2023

appointment) (or on date of stepping down from the board)
Number of
shares
subject to Total
Total beneficial Total beneficial performance interest
interest interest conditions in shares
(number of shares) (number of shares)
Chair
Shriti Vadera 67,500 67,500 – 67,500
Executive Directors
Anil Wadhwani1 – 42,701 438,098 480,799
Mark FitzPatrick2 308,566 308,595 763,861 1,072,456
James Turner3 270,463 270,463 480,819 751,282
Non-executive Directors
Jeremy Anderson 9,157 9,157 – 9,157
Arijit Basu – 1,361 – 1,361
Chua Sock Koong 7,500 15,000 – 15,000
David Law 11,054 11,054 – 11,054
Ming Lu 7,000 7,000 – 7,000
Philip Remnant4 7,916 7,916 – 7,916

George Sartorel – 5,000 – 5,000
Claudia Suessmuth Dyckerhoff5 – 4,800 – 4,800
Thomas Watjen6 10,340 10,340 – 10,340
Jeanette Wong 9,600 9,600 – 9,600
Amy Yip 9,791 9,791 – 9,791
Notes
1 Anil Wadhwani was appointed to the board on 25 February 2023.
2 Mark FitzPatrick stepped down from the board on 24 February 2023.
3 James Turner stepped down from the board on 1 January 2023.
4 Philip Remnant stepped down from the board on 25 May 2023.
5 Claudia Suessmuth Dyckerhoff was appointed to the board on 1 January 2023.
6 Thomas Watjen stepped down from the board on 25 May 2023. His total beneficial interest was held as ADR’s with 5,170 shares.

Disclosure of interests of Directors / continued
Director’s outstanding long-term incentive awards

Share-based long-term incentive awards
Conditional
Conditional Dividend share awards Date of
share awards Conditional Market price equivalents Rights Rights outstanding end of
Year of outstanding awards in at date of on vested exercised lapsed at 30 June performance
Plan name award at 1 Jan 2023 2023 awardnote 1 shares in 2023 in 2023 2023 period
(Number
(Number (Number of shares (Number
of shares) of shares) (dollar) released) of shares)
Anil Wadhwani PLTIP 2023 2023 – 438,098 107.40 438,098 31 Dec 25
Note
1 Awards are granted using HK$ prices. All prices shown are in HK$.
Other share awards

The table below sets out Executive Director’s deferred bonus share awards.
Conditional
Conditional share awards Market price
share awards Conditionally Dividends Shares outstanding Date of end Market price at date of
Year of outstanding awarded accumulated released at 30 June of restricted Date of at date of vesting or
grant at 1 Jan 2023 in 2023 in 2023 in 2023 2023 period release awardnote 1 release
(Number (Number (Number (Number (Number
of shares) of shares) of shares) of shares) of shares) (dollars) (dollars)
Anil Wadhwani
Deferred 2022 annual
incentive award 2023 – 33,301 – 33,301 31 Dec 25 114.30
Note
1 Awards granted using HK$ prices. All prices shown are in HK$.
Replacement awards
The table below sets out details of Anil Wadhwani’s cash-settled replacement option made under the terms of the agreement entered into
on 8 March 2023.
Notional
Notional Notional Notional awards
awards awards awards outstanding
Year of made exercised lapsed at 30 June
grant in 2023 in 2023 in 2023 2023
(Number (Number (Number (Number
of shares) of shares) of shares) of shares) Exercise Period
Anil Wadhwani 2023 168,284 168,284 30 days commencing on the date the Remuneration
Committee approves the proportion of award to vest,
which will be after the Manulife 2023 Circular is published
(expected March 2024)
163,004 163,004 30 days commencing on the date the Remuneration
Committee approves the proportion of award to vest,
which will be after the Manulife 2024 Circular is published
(expected March 2025)
62,706 62,706 2 March 2024 to 31 March 2024
60,738 60,738 1 March 2025 to 30 March 2025
7,820 7,820 5 March 2024 to 3 April 2024
11,552 11,552 5 March 2025 to 3 April 2025
474,104 474,104

Shareholder information
Dividend information
Shareholders with ordinary shares

Shareholders registered Shareholders registered Holders of American standing to the credit of their CDP
2023 first interim dividend on the UK register on the Hong Kong register Depositary Receipts securities accounts
Ex-dividend date 7 September 2023 7 September 2023 – 7 September 2023

Record date 8 September 2023 11 September 2023Note 8 September 2023 8 September 2023
Payment date 19 October 2023 19 October 2023 19 October 2023 On or around 26 October 2023
Note
Changed from 8 September 2023 to 11 September 2023 as detailed in the announcement released on the Stock Exchange of Hong Kong on 8 September 2023.

Dividend mandates
Dividends are paid directly into UK-based shareholders’ bank or building society accounts. UK-based shareholders should contact Equiniti if they
have any questions concerning the payment of dividends, or to provide their bank or building society account details. Alternatively, UK-based
shareholders may download the necessary form from www.shareview.co.uk
Shareholders on the UK and Hong Kong registers have the option to elect to receive their dividend in US dollars instead of pounds sterling
or Hong Kong dollars respectively. More information may be found on www.shareview.co.uk
Cash dividend alternative
The Company offers a Dividend Re-Investment Plan (DRIP). The DRIP is provided by Equiniti Financial Services Limited (’Equiniti FS’), and is
a convenient, easy and cost effective way to build a shareholding by using cash dividends to buy additional shares. Rather than having a bank
account credited with a cash dividend, Equiniti FS will use the dividends payable to DRIP participants to purchase shares on their behalf in the
market. Whole shares are purchased with any residual money being carried forward and added to the next dividend. However, if the amount of
the dividend, less any dealing costs incurred in completing the purchase, is insufficient to buy a single share no charge is made and the dividend
is carried forward. For further information on the DRIP, please visit www.shareview.co.uk/info/DRIP
Shareholder enquiries
For enquiries about shareholdings, including dividends and lost share certificates, please contact the Company’s registrars:
Register Address Contact details
UK register Equiniti Limited Tel +44 (0)371 384 2035

Aspect House
Spencer Road For deaf and speech impaired customers Equiniti welcome
Lancing calls via Relay UK. Please see www.relayuk.bt.com for
West Sussex more information.
BN99 6DA, UK Lines are open from 8.30am to 5.30pm (UK),
Monday to Friday excluding weekends and bank holidays.
Hong Kong register Computershare Hong Kong Tel +852 2862 8555
Investor Services Limited
17M Floor, Hopewell Centre Lines are open from 9.00am to 6.00pm (Hong Kong),
183 Queen’s Road East Monday to Friday.
Wan Chai, Hong Kong
Singapore register Shareholders who have shares standing to Operating Hours (Singapore)
the credit of their securities accounts with Monday to Friday: 8.30am to 5.00pm
The Central Depository (Pte) Limited (CDP) Saturday: 8.30am to 12.00pm
in Singapore may refer queries to the CDP Email : [email protected]
at 11 North Buona Vista Drive, #06-07 Contact Centre : +65 6535 7511
The Metropolis Tower 2, Singapore 138589.
Enquiries regarding shares held in Depository

Agent Sub-accounts should be directed to your
Depository Agent or broker.
US American Depositary Shareowner Services Tel +1 800 990 1135,

Receipts (ADRs) P.O. Box 64504, St. Paul, or from outside the USA +1 651 453 2128
MN 55164-0504, USA or log on to www.adr.com
Lines are open from 7.00am to 7.00pm
(Central Europe), Monday to Friday excluding weekends
and bank holidays.

Shareholder information / continued
Electronic communications Share dealing services

Shareholders are encouraged to elect to receive shareholder The Company’s UK Registrar, Equiniti, offer a postal dealing facility
documents electronically. Using electronic communication will save for buying and selling Prudential plc ordinary shares; please see the
on printing and distribution costs, and create environmental benefits. Equiniti address above or telephone +44 (0)371 384 2035. They also
offer a telephone and internet dealing service, Shareview, which
Shareholders located in the UK can elect to receive shareholder provides a simple and convenient way of selling Prudential plc shares.
documents electronically by registering with Shareview at
www.shareview.co.uk Shareholders who have registered will be For telephone sales call +44 (0)345 603 7037 between
sent an email notification whenever shareholder documents are 8.30am and 5.30pm, Monday to Friday excluding
available on the Company’s website and a link will be provided to weekends and UK bank holidays, and for internet sales
that information. When registering, shareholders will need their log on to www.shareview.co.uk/dealing
shareholder reference number which can be found on their share
certificate. Please contact Equiniti if you require any assistance or ShareGift
further information. Shareholders who have only a small number of shares, the value of
which makes them uneconomic to sell, may wish to consider donating
Shareholders registered on the Hong Kong register can elect to receive them to ShareGift (Registered Charity 1052686). The relevant share
corporate communications (as defined in the Hong Kong Listing transfer form may be downloaded from our website or from Equiniti
Rules) electronically. They may at any time send a written notice at www.shareview.co.uk
to Computershare Hong Kong specifying their name, address and
request to change their choice of means of receipt and/or language Further information about ShareGift may be obtained on
(in English and/or Chinese) of all corporate communications. +44 (0)20 7930 3737 or from www.ShareGift.org
Shareholders who have registered, will be sent an email notification
whenever shareholder documents are available on the Company’s
website and a link will be provided to that information.
The option to receive shareholder documents electronically is
not available to shareholders holding shares through The Central
Depository (Pte) Limited (CDP) in Singapore.
Equiniti Shareview service
Information on how to manage shareholdings can be found
at https://help.shareview.co.uk
The pages at this web address provide the following:
> Answers to commonly asked questions regarding shareholder
registration;
> Links to downloadable forms, guidance notes and company
history fact sheets; and
> A choice of contact methods – via email, telephone or post.

How to contact us
Prudential plc
Registered office Principal place of business Media enquiries
1 Angel Court 13th Floor Simon Kutner
London One International Finance Centre Tel +44 (0)7581 023260
EC2R 7AG 1 Harbour View Street Email: [email protected]
UK Central
Hong Kong Sonia Tsang
Tel +44 (0)20 7220 7588 Tel +852 5580 7525
www.prudentialplc.com Tel +852 2918 6300 Email: [email protected]
Sophie Sophaon
Tel +852 6286 0229
Email: [email protected]

Board
Shriti Vadera
Chair
Independent Non-executive Directors Group Executive Committee

Jeremy Anderson
Senior Independent Director Executive Director Solmaz Altin
Managing Director, Strategic Business Group
Arijit Basu Anil Wadhwani
Chief Executive Officer Ben Bulmer
Chua Sock Koong Group Chief Financial Officer
David Law Catherine Chia
Ming Lu Group Chief Human Resources Officer
George Sartorel Avnish Kalra
Claudia Suessmuth Dyckerhoff Group Chief Risk and Compliance Officer

Jeanette Wong Lilian Ng
Amy Yip
Bill Maldonado
Chief Executive Officer, Eastspring
Dennis Tan
Shareholder contacts
Institutional analyst and investor US American Depositary
enquiries Receipt holder enquiries
Tel +44 (0)20 3977 9720 Tel +1 800 990 1135
Email:
[email protected] From outside the US:
Tel +1 651 453 2128
UK Register private shareholder

enquiries Singapore: The Central
Tel +44 (0)371 384 2035 Depository (Pte) Limited
shareholder enquiries
Hong Kong Register private Tel +65 6535 7511
shareholder enquiries
Tel +852 2862 8555

Forward-looking statements > the effect on Prudential’s business and results from, in particular,
This document contains ‘forward-looking statements’ with respect to mortality and morbidity trends, lapse rates and policy renewal rates;
certain of Prudential’s (and its wholly and jointly owned businesses’) > the timing, impact and other uncertainties of future acquisitions or
plans and its goals and expectations relating to future financial combinations within relevant industries;
condition, performance, results, strategy and objectives. Statements > the impact of internal transformation projects and other strategic
that are not historical facts, including statements about Prudential’s actions failing to meet their objectives or adversely impacting the
(and its wholly and jointly owned businesses’) beliefs and expectations Group’s employees;
and including, without limitation, commitments, ambitions and
> the availability and effectiveness of reinsurance for Prudential’s
targets, including those related to ESG matters, and statements
businesses;
containing the words ‘may’, ‘will’, ‘should’, ‘continue’, ‘aims’, ‘estimates’,
‘projects’, ‘believes’, ‘intends’, ‘expects’, ‘plans’, ‘seeks’ and ‘anticipates’, > the risk that Prudential’s operational resilience (or that of its suppliers
and words of similar meaning, are forward-looking statements. These and partners) may prove to be inadequate, including in relation to
statements are based on plans, estimates and projections as at the operational disruption due to external events;
time they are made, and therefore undue reliance should not be placed > disruption to the availability, confidentiality or integrity of
on them. By their nature, all forward-looking statements involve risk and Prudential’s information technology, digital systems and data (or
uncertainty. those of its suppliers and partners) including the Pulse platform;
> the increased non-financial and financial risks and uncertainties
A number of important factors could cause actual future financial
associated with operating joint ventures with independent partners,
condition or performance or other indicated results to differ materially
particularly where joint ventures are not controlled by Prudential;
from those indicated in any forward-looking statement. Such factors
include, but are not limited to: > the impact of changes in capital, solvency standards, accounting
standards or relevant regulatory frameworks, and tax and other
> current and future market conditions, including fluctuations in legislation and regulations in the jurisdictions in which Prudential and
interest rates and exchange rates, inflation (including resulting its affiliates operate; and
interest rate rises), sustained high or low interest rate environments, > the impact of legal and regulatory actions, investigations and
the performance of financial and credit markets generally and the disputes.
impact of economic uncertainty, slowdown or contraction (including
as a result of the Russia-Ukraine conflict and related or other These factors are not exhaustive. Prudential operates in a continually
geopolitical tensions and conflicts), which may also impact changing business environment with new risks emerging from time to
policyholder behaviour and reduce product affordability; time that it may be unable to predict or that it currently does not expect
> asset valuation impacts from the transition to a lower carbon to have a material adverse effect on its business. In addition, these and
economy; other important factors may, for example, result in changes to
assumptions used for determining results of operations or re-
> derivative instruments not effectively mitigating any exposures;
estimations of reserves for future policy benefits. Further discussion of
> global political uncertainties, including the potential for increased these and other important factors that could cause actual future
friction in cross-border trade and the exercise of laws, regulations and financial condition or performance to differ, possibly materially, from
executive powers to restrict trade, financial transactions, capital those anticipated in Prudential’s forward-looking statements can be
movements and/or investment; found under the ‘Risk Factors’ heading of this document, as well as
> the longer-term impacts of Covid-19, including macro-economic under the ‘Risk Factors’ heading of Prudential’s 2022 Annual Report.
impacts on financial market volatility and global economic activity Prudential’s 2022 Annual Report is available on its website at
and impacts on sales, claims (including related to treatments www.prudentialplc.com.
deferred during the pandemic), assumptions and increased product
lapses; Any forward-looking statements contained in this document speak only
as of the date on which they are made. Prudential expressly disclaims
> the policies and actions of regulatory authorities, including, in
any obligation to update any of the forward-looking statements
particular, the policies and actions of the Hong Kong Insurance
contained in this document or any other forward-looking statements it
Authority, as Prudential’s Group-wide supervisor, as well as the degree
may make, whether as a result of future events, new information or
and pace of regulatory changes and new government initiatives
otherwise except as required pursuant to the UK Prospectus Rules, the
generally;
UK Listing Rules, the UK Disclosure Guidance and Transparency Rules,
> the impact on Prudential of systemic risk and other group supervision the Hong Kong Listing Rules, the SGX-ST Listing Rules or other
policy standards adopted by the International Association of applicable laws and regulations.
Insurance Supervisors, given Prudential’s designation as an
Internationally Active Insurance Group; Prudential may also make or disclose written and/or oral forward-
> the physical, social, morbidity/health and financial impacts of climate looking statements in reports filed with or furnished to the US Securities
change and global health crises, which may impact Prudential’s and Exchange Commission, the UK Financial Conduct Authority, the
business, investments, operations and its duties owed to customers; Hong Kong Stock Exchange and other regulatory authorities, as well as
in its annual report and accounts to shareholders, periodic financial
> legal, policy and regulatory developments in response to climate
reports to shareholders, proxy statements, offering circulars,
change and broader sustainability-related issues, including the
registration statements, prospectuses, prospectus supplements, press
development of regulations and standards and interpretations such
releases and other written materials and in oral statements made by
as those relating to ESG reporting, disclosures and product labelling
directors, officers or employees of Prudential to third parties, including
and their interpretations (which may conflict and create
financial analysts. All such forward-looking statements are qualified in
misrepresentation risks);
their entirety by reference to the factors discussed under the ‘Risk
> the collective ability of governments, policymakers, the Group, Factors’ heading of this document, as well as under the ‘Risk Factors’
industry and other stakeholders to implement and adhere to heading of Prudential’s 2022 Annual Report.
commitments on mitigation of climate change and broader
sustainability-related issues effectively (including not appropriately Cautionary statements
considering the interests of all Prudential’s stakeholders or failing to This document does not constitute or form part of any offer or
maintain high standards of corporate governance and responsible invitation to purchase, acquire, subscribe for, sell, dispose of or issue, or
business practices); any solicitation of any offer to purchase, acquire, subscribe for, sell or
> the impact of competition and fast-paced technological change; dispose of, any securities in any jurisdiction nor shall it (or any part of it)
or the fact of its distribution, form the basis of, or be relied on in
connection with, any contract therefor.

Prudential public limited company
Incorporated and registered in England
and Wales with limited liability
Registered office
1 Angel Court
London
EC2R 7AG
Registered number 1397169
www.prudentialplc.com
Principal place of business in Hong Kong
13th Floor
One International Finance Centre
1 Harbour View Street
Central
Hong Kong
Prudential plc is a holding company, some of whose
subsidiaries are authorised and regulated, as applicable,
by the Hong Kong Insurance Authority and other
regulatory authorities. The Group is subject to a
group-wide supervisory framework which is regulated
by the Hong Kong Insurance Authority.
Prudential plc is not affiliated in any manner with
Prudential Financial, Inc., a company whose principal
place of business is in the United States of America
or with The Prudential Assurance Company Limited,
a subsidiary of M&G plc, a company incorporated
in the United Kingdom.
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Prudential plc

2023 Half Year Financial Report

HK Stock Code: 2378

48 International Financial Reporting

96 European Embedded Value (EEV)

118 Additional information

IFRS financial results

EEV financial results

Our risk profile

02 Prudential plc 2023 Half Year Financial Report prudentialplc.com

Our strategy sets out how we will deliver on

04 Prudential plc 2023 Half Year Financial Report prudentialplc.com

IFRS financial results

Our Purpose a) Organisational model. A change in our organisational model will be

EEV financial results

3. Wealth and investments capabilities.

Prudential plc 2023 Half Year Financial Report 05

a) Organisational model > ASEAN

06 Prudential plc 2023 Half Year Financial Report prudentialplc.com

IFRS financial results

EEV financial results

Prudential plc 2023 Half Year Financial Report 07

08 Prudential plc 2023 Half Year Financial Report prudentialplc.com

IFRS financial results

EEV financial results

Prudential plc 2023 Half Year Financial Report 09

New business performance by market

Chinese Mainland – CITIC Prudential Life (CPL)

APE sales ($m) 394 507 (22)% 474 (17)%

APE sales ($m) 1,027 227 352% 227 352%

10 Prudential plc 2023 Half Year Financial Report prudentialplc.com

IFRS financial results

EEV financial results

APE sales ($m) 150 110 36% 106 42%

Prudential plc 2023 Half Year Financial Report 11

APE sales ($m) 185 172 8% 165 12%

APE sales ($m) 386 390 (1)% 398 (3)%

12 Prudential plc 2023 Half Year Financial Report prudentialplc.com

IFRS financial results

Growth markets and other

APE sales ($m) 885 807 10% 762 16%

EEV financial results

Prudential plc 2023 Half Year Financial Report 13

Total funds under management

14 Prudential plc 2023 Half Year Financial Report prudentialplc.com

IFRS financial results

EEV financial results

Prudential plc 2023 Half Year Financial Report 15

During the first half of 2023, we

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IFRS financial results

EEV financial results

Prudential plc 2023 Half Year Financial Report 17

Half year Half year Half year Full year

Adjusted operating profit based on longer-term investment

IFRS earnings per share

Half year Half year Half year Full year

Based on adjusted operating profit,

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* Unless otherwise stated.

Prudential plc 2023 Half Year Financial Report 21

* Excluding goodwill attributable to equity holders.

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