Prudential PLC Q4 FY2025 Earnings Call

Thank you for standing by, and welcome to the Prudential plc 2025 Full Year Results Q&A Audio Webcast Call. The operator will now provide instructions and then hand over to the host.

Good afternoon, good morning, good evening, everyone. Welcome to Prudential plc's 2025 Results Analyst and Investor Call. Before I turn over to Anil Wadhwani, our CEO; and then Ben Bulmer, our CFO, a couple of housekeeping points. A recording of today's call will be available from Tuesday next week. Our full results package is available on our website, and I'll refer you to the disclaimers and safe harbor wordings in these documents, and they also apply to this call. Anil and Ben will start the call with opening remarks followed by a Q&A. Also on the call today are Angel Ng, Dennis Tan, Rajeev Mittal and Naveen Tahilyani. Now let me pass over to Anil, our CEO, to start us off.

Thank you, Patrick. Good morning, good afternoon, and good evening, everyone, and thank you for joining us today. I would like to begin by expressing my sincere thanks to our retiring Chair, Shriti Vadera. Shriti has successfully led the Board through a period of significant change for Prudential through economic and political turmoil and, of course, the challenges of the COVID period. She has been a strong supporter of the management team throughout our transformation journey. I'm very grateful for her leadership of the Board and her counsel to me, and I wish her all the very best in her future endeavors. I'm also delighted to welcome Sir Douglas Flint, as our incoming Chair, who will take up the role at the conclusion of the AGM. Douglas has experience of financial services and strong knowledge of the markets we operate in, and I am looking forward to working closely with him. Turning to our 2025 full year results. I'm very pleased with the high-quality double-digit growth across our key financial metrics delivered in line with guidance and the increased returns for shareholders. This performance reflects the strength of our multi-market, multichannel business model and disciplined execution of our strategy with a continued focus on writing high-quality new business. Both new business profit and adjusted operating profit after tax per share grew 12%, while gross OFSG and dividend per share were both up 15%. Importantly, we consistently delivered double-digit growth in new business profit in every quarter of 2025. We also successfully completed the IPO of our Indian asset management company and increased our holding in our Malaysian conventional business to 70%. We continue to demonstrate disciplined capital management and a clear focus on shareholder value, and we now expect to return over $7 billion of capital to our shareholders between 2024 and 2027. Turning to our strategic transformation. We are now three years into our five-year plan and have delivered 18% CAGR in new business profit growth from 2022 to 2025. We continue to strengthen our capabilities and operational execution to deliver consistent and ongoing quality new business and cash generation. First, we are executing with focus across our distribution, strengthening our agency channel while sustaining strong momentum in bancassurance. Agency is our largest channel and building and growing a high-quality professional and advisory-led agency force at Prudential scale requires sustained commitment and disciplined execution. Productivity measured as new business profit per active agent improved by 15% in 2022, which I am very pleased with. This has been supported by continued strengthening of our $1 million roundtable or MDRT pipeline. At the same time, we see further opportunity to increase the number of active agents, specifically in emerging markets in ASEAN through quality recruitment, segment-specific propositions and supporting agent activity through technology enablement. Turning to bancassurance. Prudential has a leading bancassurance franchise in Asia. The channel delivered an outstanding year with new business profit crossing $1 billion mark, representing around 95% of the lower end of its 2027 new business profit objective. Second, we continue to enhance the quality of new business by deepening customer engagement and improving experience across all touch points, unlocking synergies with our in-house manager Eastspring and building on our strengths in health to extend further into protection. Third, we are driving efficient growth by modernizing our technology as well as embedding analytics and AI across agency, health and operations to better support our agency force and deliver simpler, better experiences for customers. And finally, we have continued to make good progress in reducing core business-related variances, supporting the quality and sustainability of our capital generation. As a result, gross OFSG increased by 15%, marking an important inflection point on the path to meeting our 2027 OFSG objective. While the macro environment remains volatile, our presence across Asia and Africa gives us access to significant structural growth opportunities. The strength and resilience of our multi-market, multichannel model allows us to deliver consistent, high-quality growth and generate sustainable shareholder returns. We will carry the momentum we set for ourselves in 2025 into 2026, and we firmly remain on track to achieve our 2027 financial objectives. Now I'll hand it over to Ben, our CFO, to walk through our financial highlights.

Thanks, Anil, and hello, everyone. In 2025, we delivered on our guidance, double-digit growth across our key financial KPIs, demonstrating the strength of our diversified multichannel and multi-market business model. We intend to build on this momentum as we work towards and beyond our 2027 objective year. With higher NBP, further growth in our in-force and asset management results, flat central costs and the benefits of our strategic and capital actions, we increased our 2025 return on embedded value to 15%. We continue to see scope to improve this as we progress towards our 2027 financial objective, driven by further NBP growth, a return to positive operating variances and ongoing disciplined capital management. We also reached the inflection points in our capital generation trajectory with gross OFSG up 15% year-on-year, whilst our net OFSG is up 22%. The group's capital position remains highly robust. Our free surplus ratio ended the year at 221% or 204%, excluding the IPO net proceeds, broadly consistent with the 175% to 200% normal operating range we've set out. We were pleased that our financial strength and flexibility was recognized by S&P with its upgrade of our financial strength rating to AA. We updated our capital allocation framework in August last year. We gave guidance of greater than 10% dividend per share growth each year from 2025 to 2027. The 2025 dividend per share increased 15%. We also announced that shareholders will benefit from additional capital returns over and above the ordinary dividend, starting with $500 million this year and a further return of $600 million expected in 2027. This framework is intended to be enduring, and we thus intend for further additional capital returns in 2028 and beyond. Capital above our established 175% to 200% operating range will be assessed regularly and if deemed excess returned to shareholders. We plan to return all of the $1.4 billion net proceeds from the IPO process to shareholders to be split half this year, half next year. In January, we launched a $1.2 billion buyback to be completed by the end of 2026 and expect to return a further $1.3 billion in 2027. So we're delivering growth in value and what we believe is a highly attractive returns proposition. We remain focused on growing quality new business with strong underlying capital generation. New business profit grew 12% and the addition to 2027 capital emergence increased by 16%. The NBP margin expanded 2 percentage points to 42%. Further improvements in our agency performance and increasing the proportion of health and protection business continue to provide opportunities to improve margins over the medium term. The management of our in-force book continues to improve, reflecting actions taken in strengthening our health claims management. We are also benefiting from economies of scale with total costs growing more slowly than revenues. This positive leverage will allow us to continue to invest in our business on a normal course basis. We intend, as we've said, to largely complete our capability investment program in 2026 with an investment of between $300 million and $350 million, and we are very confident of returning to positive variances by 2027. In summary, we delivered improving financial performance in 2025 with double-digit growth across our key financial KPIs, consistent with our guidance. The consistency of our operating performance also improved. And while there's work to do, we were pleased to deliver double-digit NBP growth in every quarter of 2025. For 2026, we are again guiding to double-digit growth across our key financial KPIs, and we remain very confident in achieving our 2027 financial objectives. With that, I'll pass back to Patrick.

Thank you, Ben and Anil. I'll now hand over to our conference call operator, Jake, who will provide instructions and then open the lines for questions. Please remember to give your name and organization you represent when asking a question, and you're also welcome to submit your questions online. So over to you, Jake.

The operator will provide instructions and then open the lines for questions. Our first caller is Thomas Wang from Goldman Sachs.

It's Thomas here from Goldman Sachs. If I can start with a broad question on growth. There's a few surprises in this set of numbers. I think China, definitely — I remember in the first half our guidance was kind of high single-digit NBP growth, but we end up with something close to 30%. Very strong in the second half. I was just wondering what you see in terms of outlook for 2026? Do you think that we can maintain this momentum into 2026? And secondly, on Hong Kong, slightly slower growth in the second half, maybe not surprising, but I just want to get your thoughts on '26 momentum and how you see the base effect — how challenging that is, and how confident we are getting back to double-digit or potential mid-teen growth in Hong Kong? And if I can just, sort of related to this, I think the 2025 growth was mainly driven by bancassurance. Agency channel was just about 4%. I think that's probably tied to Hong Kong as well. Just wondering, can you give a little bit more color on the initiatives to drive that agency growth in 2026?

Thanks, Thomas, for those questions. I guess there are three questions. So just bear with me because it's going to be a slightly long answer as I try to address each one of them. So firstly, let me start with the broader outlook. We clearly were pleased with the 2025 outcomes. I thought it was a landmark year for Prudential. Our new business profit grew at 12%. Importantly, it was an inflection point for OFSG that grew at 15%. Our transformation execution is getting sharper and, clearly, our model is underpinned by multi-market and multichannel. That gives us the confidence to take the momentum that we set for ourselves in 2025 to 2026. As Ben mentioned in his opening comments, we are guiding to delivering double-digit growth across our financial metrics for 2026 as well. Now specifically coming to China, clearly pleased with the 27% growth on new business profit that we delivered in Mainland China, specifically pleased with the improved trajectory and momentum that we saw in the second half of last year, where both bancassurance and, importantly, agency delivered strong double-digit growth. At the same time, as you know, we have been working very hard to retool our business and driving quality growth underpinned with strong risk discipline processes, and you're starting to now see the evidence of that growth come through. We were also delighted with the fact that our par mix has touched 40%. It was close to 15% in the prior year, and again, that's a step in the right direction and underpins how we are managing quality growth with strong risk discipline. I'm not going to give you a market-specific guidance. As I said, the guidance overall is double digit. And clearly, China is going to play a key part in helping us drive that double-digit performance in 2026. Let me shift gears and talk a little bit about Hong Kong. Firstly, stepping back, I really like the shape of our Hong Kong business. We grew both Mainland Chinese visitor segment and domestic segment. Both our channels, bancassurance and agency grew too. Our focus at all times has been quality, which was illustrated by the 2 percentage point improvement in margin. Our new business profit for full year 2025 grew by 12%. Now as you pointed out, second half was a bit of an unusual period for us in Hong Kong, given the fact that we were embracing a slew of regulatory changes, specifically targeted towards the broker channel. For example, the referral fee cap, the spreading of commission, and changes that came through on illustrations led to growth in short-term products largely through the broker channel. For us, the focus has been quality new business that generates cash at an accelerated pace. Let me give you a couple of proof points on that. One, 95% of our business in Hong Kong were in tenures greater than five years as opposed to an industry average of approximately 40%. We have leadership in Hong Kong on the critical illness business, and in Q3 of last year, we established a leading position on the health business. Importantly, our Hong Kong renewal premium growth was 15% year-on-year. Our primary channels continue to be agency as well as bancassurance because we have a greater influence both on customer experience as well as product mix. Importantly, our agency growth in terms of new recruitment was again greater than 5,000 with our active agent growth in Hong Kong growing at 12% for 2025. We continue to see demand both across domestic as well as Mainland Chinese visitor segments, be it in legacy planning products, multicurrency products as well as health and protection. A combination of these factors gives us the confidence that we will grow our agency as well as our Hong Kong business in 2026. Now to your third question on agency. Clearly, we are not as pleased with the agency growth as we are with bancassurance. Remember, we are a multichannel, multi-market growth engine model. Bancassurance has done exceedingly well for us. Agency came in below expectation. If you look at our three-year growth between 2022 to 2025, we have delivered a growth of 18% CAGR over the last three years. This has been predicated on the back of a 19% growth in agency and a 12% growth in bancassurance. I like the complementing nature of agency and bancassurance. There have been years where agency has performed better than bancassurance, and there have been years where bancassurance has performed better than agency. Agency transformation is our #1 priority. I'll have Naveen, who heads agency as well as some of our ASEAN markets, give you a little bit of color. But let me preface with a few points. There are two specific measures that we are pressing forward on agency. First is productivity, as measured by new business profit per active agent, and I'm very pleased with the growth that we witnessed last year. It was up 15%. It helped us offset the decline of 11% in active agents. Our active agents was largely impacted by the emerging ASEAN markets of Vietnam, Philippines, Malaysia and Indonesia. If you go under the hood, the driver of that was largely the new recruitment in these four markets. I'll stop there and have Naveen articulate what we are doing about it specifically and illustrate that with a specific example in terms of how we are implementing some of the steps to change the momentum on agency.

Thank you, Anil. First and foremost, over the last few months, as I've had a chance to spend time with our top agents and leaders on the ground, I'm very convinced that we have some very high-quality top-notch professionals working with us and our agency quality is right up there in these markets. Second, when I look at the different initiatives in our agency strategy, I'm fully aligned, and I think we cover all the bases in terms of both the aspects that Anil mentioned: improving the top-tier productivity as well as looking to enhance the activation and recruitment. Now the top-tier productivity initiative is already working well. Anil already shared the data points. As far as enhancing activation through quality recruitment, we are focused on creating professional recruitment schemes, which work on the right capability building for the leaders as well as agents, supporting them with the right technology and the right propositions. One such example is PRUVentures in Malaysia, where this scheme has scaled up in the second half of last year. For all of last year, this scheme accounted for about one quarter of our incoming class of recruits in Malaysia. What is very encouraging is that the retention as well as the productivity of this incoming class through PRUVentures is significantly higher than those coming through other schemes. For example, particularly on productivity, the productivity of these agents is six times that of the non-PRUVenture recruits. Our focus right now is to take such professional recruitment schemes with discipline to other markets and make sure we can use that to scale up our recruitment as well as our activation. That's what we are doing. Anil, back to you.

Thanks, Naveen. In closing, building and scaling our high-quality professional agency force in Asia at the size of Prudential does require consistent commitment and focus on execution. We are absolutely confident and focused on driving the transformation on agency.

Our next caller is Farooq Hanif from JPMorgan.

On the point of agency, can you explain why you don't just use PRUVentures entirely for recruitment? And can you also talk about the technology arms race in terms of the digital tools you're giving your agents? My sense was that you were kind of behind, you've come along, you've invested. Do you feel like you're in line or better than your top competitors when it comes to that kind of technology? Second question is understanding the remittances. The capital position of your subsidiaries seems strong. You've remitted quite a lot of capital. Can you talk about why you've remitted so much capital to the holding given your previous comments that you prefer to keep as much capital in the subsidiaries to earn a higher return? What's the outlook here and how will that impact your investment margin going forward? My last question is will underlying variances, excluding the capability investment, reach an inflection point in 2026? They may turn positive or slightly positive, but what can we model in for that? And how does that differ between free surplus and IFRS?

Thanks, Farooq. Let me first take the PRUVentures question, and I'll have Naveen provide greater insight and color. Then I'll go to Ben on remittances and variances. We've seen great success on PRUVentures, for example, in Hong Kong, and that success drove us to start rolling it out in other markets. Naveen has illustrated the early impact in Malaysia. Our ambition is to roll that out at pace across the different ASEAN markets. I'll stop there and ask Naveen to provide greater color on the extension of PRUVentures as well as technology enablement.

PRUVentures is a scheme which encourages professional recruitment at both the leader and agent level. In Hong Kong, PRUVentures scaled up; the increase in the number of PRUVenture recruits was 43% and two-fifths of the incoming class was from PRUVentures. Hong Kong is an example where we have successfully scaled up PRUVentures, and we'll continue these efforts in that market. Malaysia scaled up in the second half of last year, and we will have the impact of PRUVentures throughout this year in Malaysia. Our effort now is to take this scheme, with some customizations, to the other emerging ASEAN markets, particularly Indonesia, Philippines and Vietnam, where we've been looking to improve recruitment and activation. Each market requires customization, and we have done that and are looking to implement it with discipline as we move forward. On technology, we think of technology and agency in two loops. One loop improves agent productivity in their interaction with customers — lead management, prospecting, sales, service and claims management. The second loop helps agents and leaders improve their own productivity, understanding compensation and planning. We have a proprietary platform called PruForce rolled out to all markets, and we continuously enhance its capabilities. Today, we are right up there with the best in the market on both loops. We are now injecting AI in a practical, targeted manner in both loops. One example is PruAction, pioneered in Singapore last year — an AI-enabled performance management system for agents and leaders to improve productivity. We saw an increase in productivity of about 15% and we are now looking to take PruAction to all our agency markets.

Thanks, Naveen. Now moving to Ben for the remittances and variances questions.

Hi, Farooq. On remittances, I continue to guide you to the 70% ratio in terms of the remittance rate for local business unit net surplus generation. I elected to bring up some surplus this year from the Hong Kong business. I like having a balance of surplus both centrally and in the businesses; we like agility locally and we have local stakeholders to manage. That said, I will not leave excess capital in businesses; I will bring that up to center. You're right, it had a temporal impact on the net investment return in the IFRS result, along with the effects of some China de-risking that we did. Similarly, our central net investment return number is lower as a result of completing that $2 billion buyback from stock. In terms of underlying variances, I'm pleased with the progress we're making. They materially improved year-on-year. If you remove the investment in capabilities, we're fairly close to being neutral. I'm very confident that we'll return to those historic pre-COVID norms of positive operating variances within our objective period. We're focused on underwriting profitability and investing to drive growth and scale. You've seen evidence of that, and we're benefiting from renewal premiums compounding. We're also focused on cost containment to improve operating leverage, which gives us headroom to reinvest in the business on a normal course basis. On differences between IFRS and TEV, there are some geographic differences between VFA and GMM. About two-thirds of our investment in capabilities sits in the CSM unlocking number rather than the variance line. Very confident we'll continue to drive very strong variance performance.

Our next caller is Michael Chang from CGI.

Can I just check you can hear me? I really like the results, especially in relation to the Mainland China business. It's very impressive what the business has done, especially on the bancassurance front. Can I get more clarity? I understand that CITIC has been a great partner as well as Standard Chartered. I think they contribute, if I'm not wrong, two-thirds of the APE. It seems many investors in the China insurance space are focused on the wave of maturing time deposits, which bancassurance is best placed to capture. Could I get color on any initiatives to deepen the relationship with CITIC in terms of more branches as well as with Standard Chartered, and any new initiatives for new bancassurance partners? Second, in Asia the demand for wealth management solutions is strong. Some peers are using third-party channels to tap this opportunity. Prudential is strong in agency and bancassurance. Can you shed light on using third-party channels to tap the wealth management opportunity and why you've chosen to be relatively underweight on this front?

Thanks, Michael. Let me start with China and I'll go to Yin-Yee to give more color on how we are thinking about China growth, specifically on deposit maturities because you're right to point out that China remains a high savings economy which, given lower interest rates, speaks to the solutions we can bring customers. Bancassurance has been a key driver of growth in China. It's heartening to see significant traction from CITIC Bank — that is due to the focus Yin-Yee brought in ensuring a segment of branches are dedicated to selling CITIC Prudential life insurance policies, which has made a dramatic difference in CITIC's contribution to overall bancassurance sales. Our margins on bancassurance are healthy in China, underscoring our focus on quality growth. Angel, sorry, Yin-Yee, over to you to address the deposit maturity question and the branch approach.

Thank you, Anil, and thank you for the questions, Michael. You are correct that Standard Chartered and CITIC are our strategic bank partners delivering very good growth in 2025. Regarding CITIC Bank, we launched the preferred branch model last year, with the first 50 branches aimed at increasing our wallet share in those branches by giving them dedicated resources like insurance specialists to help relationship managers sell products better. That has yielded very good results. Into 2026, we aim to increase the number from 50 to 100, doubling the number of preferred branches under this model. We are also working to increase and diversify partnerships in the bancassurance channel, focusing on the top 10 partners so we can replicate the preferred branch model. On deposit maturities, we are working closely with our bank partners to capture these opportunities. We are deepening collaboration with the private bank segments of our partners to engage high net worth customers, which will increase our average ticket size. These initiatives give us a solid plan for 2026 to deliver our business target.

Thanks, Yin-Yee. Michael, on wealth management and third-party channels — the short answer is yes, we are active in this area. While our primary channels remain agency and bancassurance, we are actively engaging where we see opportunities in wealth management and you will see more innovative solutions from us in that space. One key differentiator for us is the complementarity of bancassurance and agency. Bancassurance continues to attract flows from emerging affluent and high net worth customers and remains a great source for engagement through strategic bank partners, not only in China but across Asia and Africa.

Our next caller is Andrew Crean from Autonomous Research.

Three numbers-based questions. First, you said bancassurance is 95% of the way to your target: could you give the same percentage for agency? Second, agency active numbers at 57,000, you were targeting 80,000 to 90,000 by 2027 — where do you actually think you're going to land on that? Third, you talked about improving new business profit margins in the medium term from the current 42%. Could you be more specific on what medium term is and where 42% can go to?

Thanks, Andrew. You're right that bancassurance is at 95% of its objective, which gives us headroom close to two years in advance of our goal. Agency on that same count is roughly about two-thirds of the objective that we set for agency. That links to your second question on active agents. We will push both productivity and active agents. I don't have a specific mathematical formula for how we'll get there, either through productivity or active agent growth or a combination; we will press on both levers to hit our agency outcome for 2027. I'll go to Ben for the margin question.

Hi, Andrew. We have opportunity to continue to improve margins and I'm pleased with last year and the year before. The opportunity is fourfold: improving the health and protection product contribution in the mix; accelerating agency growth, which is the #1 transformation priority; benefiting from operating leverage and scale; and actively repricing propositions. In China, we are driving a greater proportion of participating (par) business — margins in China came down three points year-on-year in 2025 and I expect a further reduction in 2026 as we drive a higher proportion of participating business. Stepping back, we continue to have ample opportunity to drive overall group margin.

Our next caller is William Hawkins from KBW.

Could you talk more about some of the non-Chinese markets — your outlook for Indonesia, Singapore and Malaysia? Are these proportionate contributors to double-digit growth or tailwinds or headwinds? Secondly, there's a 20% increase in required capital for the surplus ratio; that feels slightly outsized versus guidance that it should grow roughly in line with new business profit. Can you explain why there was outsized growth in required capital and the outlook for that metric in the surplus ratio?

Thanks, Will. On Singapore, Indonesia and Malaysia: yes, we are looking for all ASEAN markets to contribute. Singapore had very strong momentum in H2 last year with sales up 19%. The challenge in Singapore was product mix skewed more towards savings and wealth and demand in the government-sponsored medical plan (Shield) was calibrated because of changes in co-payment rules. Given our strengths in Singapore — 1.5 million customer relationships and strong bancassurance, tied agency and financial advisory channels — we believe we can grow Singapore to high single digit or early double digit NBP. Indonesia delivered 11% NBP growth; this is the second consecutive year of NBP growth there and indicates we are in a much better position versus prior years. We see opportunity to improve agency momentum and address medical inflation. Malaysia struggled in H1 2025 but did well in H2, helped by PRUVentures and agency retooling; we remain optimistic Malaysia will return to double-digit growth in 2026. Ben will take the required capital question.

Hi, Will. The simple answer is it was down to non-operating effects. We had very strong equity market performance in a number of our markets where the local regulatory basis uses economic capital models and also has countercyclical equity risk adjustments. In periods of strong equity performance, the risk adjustment increases and required capital grows. Of course, available surplus also grows, but when we look at the free surplus ratio, we take that required capital number. It was down to outsized equity performance in a few markets. Going forward, when modeling required capital, I'd guide you to low double-digit growth rates of around 12%–13%.

Our next caller is Kailesh Mistry from Deutsche Bank.

A few questions. On China CPL, could you give the core and comprehensive solvency ratio pro forma post the bond in January? Second, there's a comment about a slightly lower CSM release rate in 2026 — how much does that go down? Does it go below 9% or stay above? Alternatively, you can give the release rates for Indonesia and China, which seem to be driving that. Third, on agency, can you give more color about revamping agency compensation? Are you changing incentives or purely increasing commissions to make it more attractive?

Hi, Kailesh. Pro forma for the recent perpetual debt issuance, the business is operating at three times and 2.3 times regulatory minimum levels. More specifically, core is at 150% and comprehensive around 234%. We've increased sources of local financing. Later in H1 this year the business will recapture some existing subordinated debt and replace it with perpetual debt, giving a further solvency uplift. At group level, the IFRS release rate will be marginally lower — in the late 9.4% range rather than 9.5%.

We're over to Naveen for the agency compensation question.

On agency compensation, this is a structured initiative as a core pillar of our agency transformation to encourage two behaviors: improving top-tier productivity and enhancing quality recruitment. We piloted changes last year and this year in a number of markets and pretested them with a large number of agents and leaders. The pretesting was well received. In markets where we've rolled it out, the implementation has been smooth. The changes are targeted to both agents and their leaders who recruit them and are aligned to our transformation objectives.

Our next caller is Fahad Changazi from Kepler Cheuvreux.

On PRUVentures, which sounds interesting: in Hong Kong two-fifths of recruitment came from PRUVentures. What was the number of agents in 2024 and 2025 in Hong Kong? On OFSG, the slide shows 2026 new business profit contributing plus $0.5 billion to 2027 OFSG — is that assuming a mix shift accelerating conversion of OFSG or just normal new business profit growth? On operating variances, you previously showed 0.9% of opening EV from 2011 to H1 2024 and 1.4% in 2024. Is there any reason not to assume it will be 1.8% of opening EV, and where should we land on that percentage?

On Hong Kong PRUVentures, PRUVentures is a high-quality professional recruitment scheme. In 2025 versus 2024, PRUVentures scaled up by 43% and 40% of the incoming class of recruits was through PRUVentures. That's where we are on Hong Kong, and I already covered Malaysia; we will roll this out with the right customizations to other markets.

On the OFSG projection slide, that is the normal profit signature you're seeing. We design products to be capital efficient; it's about capital velocity. We write business with a fast monetization profile and a short payback period. The cost of writing the business — distribution, underwriting, admin, capital requirements — comes through in year 1, and we recoup some of those costs through collection of second-year premiums to match revenue to costs closely. That's why you have a jump in the release and thereafter a more levelized pattern. On variances, you should have in mind north of $200 million in 2027. We're a bigger business now and focused on scale and cost containment.

We're conscious time runs on. Dominic, do you want to go next? We'll take a few offline with the IR team afterwards.

Our next caller is Dominic O'Mahony from BNP Paribas Exane.

Three quick questions. One, on your IRRs — greater than 25% is a great number. How does that compare between bancassurance and agency? My guess is bancassurance is lower, but tell me if that's wrong. Second, on the shape of new business surplus emergence: it's accelerated in 2025. Should we expect further acceleration beyond this? Third, on variances: if you're already growing at a decent clip, I'd have thought you'd already get benefit of operating leverage coming through in variances; you have $45 million negative in 2025 — what are the negatives offsetting that?

Hi, Dominic. In reverse order: the residual negative variances reflect a mixture of scale coming back and us continuing to incubate some of our smaller businesses — Cambodia, Laos, Myanmar, Africa — where scale is building and renewal premiums are compounding. We have actions to drive cost containment: automation, digitization, tech convergence, centers of scale and excellence, all aimed at lowering net costs. We will deploy that leverage into reinvestment. On cash profile, improvements are due to repricing and mix, and we have opportunities to continue improving margins and cash. We're not reliant on a change in business profile to get to 2027; we've done the hard work repricing savings products previously. On IRRs, at a product level IRRs by channel are pretty consistent; differences overall are a factor of mix. Agency tends to sell a greater proportion of health and protection, and we've had success driving health and protection through bancassurance, which has improved margins and cash profiles.

Thanks, Ben. We've room for a very last question from Nasib at UBS. Jake, please go ahead.

Our next caller is Nasib Ahmed from UBS.

Two questions. First, on Hong Kong market share: I was looking at Hong Kong Association data. In 2023 you had about 30% market share as a percentage of APE and in 2025 you're less than 25%. Can you give more color on whether you will grow back market share in Hong Kong in dollar amounts? Second, Ben, you said investment spend will be broadly done by 2026. If you add up the numbers, you might be left with $100 million–$150 million of the $1 billion — are you expecting to spend less than $1 billion in 2027? Is it closer to zero or $50 million?

Thanks, Nasib. On Hong Kong market share: our emphasis is on quality growth. Within that framework, we would like to grow market share and we do have plans to do so, but our focus remains quality growth and cash generation. For example, we improved margins by two percentage points in 2025 despite regulatory changes, which shows our discipline around quality growth. We are interested in market share of new business profit and profitable growth rather than simply sales market share. That said, within the construct of quality we will drive greater market share. Ben, on the investment spend?

Hi, Nasib. We plan to largely complete the capability investment programme in 2026, investing a further $300 million to $350 million. This investment covers foundational dimensions. I'm not expecting material amounts in 2027. We're being disciplined about spend. Our focus is on driving operating leverage, which enables ongoing investment in capability in the normal course of business beyond the target period.

Thanks, Ben. Anil will close the call with some brief remarks.

Thanks, Patrick, and thanks, everyone. I enjoyed the questions and hope we provided greater detail and insights. We have made good progress in our transformation journey and this would not have been possible without the dedication and hard work of our people, our agents and our partners. I'm very proud to work alongside them every day in the way we support our customers, communities and shareholders. A few of us will be on the road so we will get an opportunity to meet face-to-face and we'd be happy to get into further details if we haven't been able to answer some points. We look forward to updating you on the first quarter business performance in early May. Thank you, and goodbye.

Thank you for attending. You may now disconnect your lines.