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Prudential's profits surge in face of challenging market

Insurer Prudential shrugged off challenging markets after a 56% surge in UK new business profits.

The group said its 164-year-old UK operation benefited from strong annuity sales and growing demand for with-profits investment bonds, which offer shelter from market volatility.

Its third-quarter performance saw UK new business profits rise 17% to £227 million in the first nine months of the year, and analysts at Investec said the UK figures were better than expected.

Pru's overall third-quarter results were also slightly higher than forecast after double-digit hikes in new business profits across Pru's Asian and US businesses helped overall profits rise 13% to £1.7 billion.

Chief executive Tidjane Thiam said the Pru had continued to perform strongly despite a "turbulent" global economy.

He warned the insurer has kept open the option of relocating outside the EU to avoid new capital rules and said Prudential will continue to consider moving until it is satisfied the Solvency II regime will not harm its business.

In the UK, Pru said a growing number of its customers reaching retirement age, coupled with higher values of pension pots, drove individual annuity sales up by 25% to £166m in the first nine months.

The group this week became the first insurer to implement an EU directive banning gender-specific annuity rate setting, meaning all annuity rates it offers will be the same for men and women.

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