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},
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},
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"unit": "iso4217:USD"
}
},
"f33731": {
"value": "-175000000",
"decimals": -6,
"dimensions": {
"concept": "ifrs-full:EffectOfExchangeRateChangesOnCashAndCashEquivalents",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
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}
},
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"decimals": -6,
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}
},
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}
},
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"unit": "iso4217:USD"
}
},
"f33743": {
"value": "112000000",
"decimals": -6,
"dimensions": {
"concept": "puk:DividendsReceivedFromJointVenturesAndAssociates",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00",
"unit": "iso4217:USD"
}
},
"f33744": {
"value": "175000000",
"decimals": -6,
"dimensions": {
"concept": "puk:DividendsReceivedFromJointVenturesAndAssociates",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2021-01-01T00:00:00/2022-01-01T00:00:00",
"unit": "iso4217:USD"
}
},
"f33775": {
"value": "6127000000",
"decimals": -6,
"dimensions": {
"concept": "ifrs-full:Borrowings",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00",
"ifrs-full:BorrowingsByNameAxis": "puk:CoreStructuralBorrowingsOfShareholderFinancedOperationsMember",
"unit": "iso4217:USD"
}
},
"f33777": {
"value": "346000000",
"decimals": -6,
"dimensions": {
"concept": "ifrs-full:ProceedsFromNoncurrentBorrowings",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00",
"ifrs-full:BorrowingsByNameAxis": "puk:CoreStructuralBorrowingsOfShareholderFinancedOperationsMember",
"unit": "iso4217:USD"
}
},
"f33779": {
"value": "2075000000",
"decimals": -6,
"dimensions": {
"concept": "ifrs-full:RepaymentsOfNoncurrentBorrowings",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00",
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"unit": "iso4217:USD"
}
},
"f33781": {
"value": "-147000000",
"decimals": -6,
"dimensions": {
"concept": "puk:IncreaseDecreaseThroughNetExchangeDifferencesBorrowings",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00",
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},
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"period": "2022-01-01T00:00:00/2023-01-01T00:00:00",
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},
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"decimals": -6,
"dimensions": {
"concept": "puk:IncreaseDecreaseThroughOtherChangesBorrowings",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00",
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}
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"f33792": {
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}
},
"f33822": {
"value": "A1 Basis of preparation and exchange rates Prudential plc (\u2018the Company\u2019) together with its subsidiaries (collectively, \u2018the Group\u2019 or \u2018Prudential\u2019) provides life and health insurance and asset
\nmanagement products in Asia and Africa. The Group is headquartered in Hong Kong.
\nBasis of preparation
\nThese consolidated \ufb01nancial statements have been prepared in accordance with IFRS Standards as issued by the IASB and in accordance with UK-
\nadopted international accounting standards. At 31 December 2022, there were no unadopted standards e\ufb00ective for the year ended
\n31 December 2022 which had an impact on the consolidated \ufb01nancial statements of the Group, and there were no di\ufb00erences between UK-
\nadopted international accounting standards and IFRS Standards as issued by the IASB in terms of their application to the Group.
\nThe Group accounting policies are the same as those applied for the year ended 31 December 2021 with the exception of the adoption of the
\nnew and amended IFRS Standards as described in note A2.
\nThe parent company statement of \ufb01nancial position prepared in accordance with the UK Generally Accepted Accounting Practice (including
\nFinancial Reporting Standard 101 \u2018Reduced Disclosure Framework\u2019) is presented on page 352.
\nGoing concern basis of accounting
\nThe Directors have made an assessment of going concern covering a period of at least 12 months from the date these consolidated \ufb01nancial
\nstatements and the parent company \ufb01nancial statements are approved. In making this assessment, the Directors have considered both the
\nGroup\u2019s current performance, solvency and liquidity and the Group\u2019s business plan taking into account the Group\u2019s principal risks and the
\nmitigations available to address them, as well as the results of the Group\u2019s stress and scenario testing.
\nBased on the above, the Directors have a reasonable expectation that the Company and the Group have adequate resources to continue their
\noperations for a period of at least 12 months from the date these consolidated \ufb01nancial statements are approved. No material uncertainties that
\nmay cast signi\ufb01cant doubt on the ability of the Company and the Group to continue as a going concern have been identi\ufb01ed. The Directors
\ntherefore consider it appropriate to continue to adopt the going concern basis of accounting in preparing these consolidated \ufb01nancial statements
\nand the parent company \ufb01nancial statements for the year ended 31 December 2022.
\nExchange rates
\nThe exchange rates applied for balances and transactions in currencies other than the presentation currency of the Group, US dollars (USD) were:
\nUSD : local currency
\nClosing rate at year end
Average rate for the year-to-date
\n31 Dec 2022
31 Dec 2021
31 Dec 2022
31 Dec 2021
\nChinese yuan (CNY)
6.95
6.37
6.73
6.45
\nHong Kong dollar (HKD)
7.81
7.80
7.83
7.77
\nIndian rupee (INR)
82.73
74.34
78.63
73.94
\nIndonesian rupiah (IDR)
15,567.50
14,252.50
14,852.24
14,294.88
\nMalaysian ringgit (MYR)
4.41
4.17
4.40
4.15
\nSingapore dollar (SGD)
1.34
1.35
1.38
1.34
\nTaiwan dollar (TWD)
30.74
27.67
29.81
27.93
\nThai baht (THB)
34.56
33.19
35.06
32.01
\nUK pound sterling (GBP)
0.83
0.74
0.81
0.73
\nVietnamese dong (VND)
23,575.00
22,790.00
23,409.87
22,934.86
\n A
Basis of preparation and accounting policies
\n288
Prudential plc
Annual Report 2022
prudentialplc.com
Foreign exchange translation
\nIn order to present the consolidated \ufb01nancial statements in USD, the results and \ufb01nancial position of entities not using USD as functional currency
\n(ie the currency of the primary economic environment in which the entity operates) must be translated into USD.
\nAll assets and liabilities of entities not operating in USD are converted at closing exchange rates while all income and expenses are converted at
\naverage exchange rates where this is a reasonable approximation of the rates prevailing on transaction dates. The impact of these foreign
\nexchange translations into the Group\u2019s USD presentation currency is recorded as a separate component in the Statement of comprehensive
\nincome. Upon the disposal of the entity, the related cumulative foreign exchange translation di\ufb00erences are recycled from other comprehensive
\nincome to the income statement as part of the gain or loss on disposal.
\nThe general principle for converting foreign currency transactions to the functional currency of an entity is to translate at the functional currency
\nspot rate prevailing at the date of the transactions. Foreign currency monetary assets and liabilities are translated at the spot exchange rate for the
\nfunctional currency at the reporting date. Changes resulting from the foreign exchange translations into the functional currency of the entity are
\nrecognised in the income statement.
\nCertain notes to the consolidated \ufb01nancial statements present comparative information at constant exchange rates (CER), in addition to the
\nreporting at actual exchange rates (AER) used throughout the consolidated \ufb01nancial statements. AER are actual historical exchange rates for the
\nspeci\ufb01c accounting year, being the average rates over the year for the income statement and the closing rates at the balance sheet date for the
\nstatement of \ufb01nancial position. CER results are calculated by translating prior year results using the current year foreign exchange rate, ie current
\nyear average rates for the income statement and current year closing rates for the statement of \ufb01nancial position.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f33825": {
"value": "Prudential plc",
"dimensions": {
"concept": "ifrs-full:NameOfReportingEntityOrOtherMeansOfIdentification",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f33826": {
"value": "Prudential plc",
"dimensions": {
"concept": "ifrs-full:NameOfUltimateParentOfGroup",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f33827": {
"value": "plc",
"dimensions": {
"concept": "ifrs-full:LegalFormOfEntity",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f33828": {
"value": "provides life and health insurance and asset management products in Asia and Africa",
"dimensions": {
"concept": "ifrs-full:DescriptionOfNatureOfEntitysOperationsAndPrincipalActivities",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f33831": {
"value": "Asia and Africa",
"dimensions": {
"concept": "ifrs-full:PrincipalPlaceOfBusiness",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f33833": {
"value": "Basis of preparation These consolidated \ufb01nancial statements have been prepared in accordance with IFRS Standards as issued by the IASB and in accordance with UK-
\nadopted international accounting standards. At 31 December 2022, there were no unadopted standards e\ufb00ective for the year ended
\n31 December 2022 which had an impact on the consolidated \ufb01nancial statements of the Group, and there were no di\ufb00erences between UK-
\nadopted international accounting standards and IFRS Standards as issued by the IASB in terms of their application to the Group.
\nThe Group accounting policies are the same as those applied for the year ended 31 December 2021 with the exception of the adoption of the
\nnew and amended IFRS Standards as described in note A2.
\nThe parent company statement of \ufb01nancial position prepared in accordance with the UK Generally Accepted Accounting Practice (including
\nFinancial Reporting Standard 101 \u2018Reduced Disclosure Framework\u2019) is presented on page 352. ",
"dimensions": {
"concept": "ifrs-full:DisclosureOfBasisOfPreparationOfFinancialStatementsExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f33836": {
"value": "These consolidated \ufb01nancial statements have been prepared in accordance with IFRS Standards as issued by the IASB and in accordance with UK- adopted international accounting standards.",
"dimensions": {
"concept": "ifrs-full:StatementOfIFRSCompliance",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f33839": {
"value": "2022-12-31",
"dimensions": {
"concept": "ifrs-full:DateOfEndOfReportingPeriod2013",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f33848": {
"value": "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 consolidated \ufb01nancial
\nstatements and the parent company \ufb01nancial statements are approved. In making this assessment, the Directors have considered both the
\nGroup\u2019s current performance, solvency and liquidity and the Group\u2019s business plan taking into account the Group\u2019s principal risks and the
\nmitigations available to address them, as well as the results of the Group\u2019s stress and scenario testing.
\nBased on the above, the Directors have a reasonable expectation that the Company and the Group have adequate resources to continue their
\noperations for a period of at least 12 months from the date these consolidated \ufb01nancial statements are approved. No material uncertainties that
\nmay cast signi\ufb01cant doubt on the ability of the Company and the Group to continue as a going concern have been identi\ufb01ed. The Directors
\ntherefore consider it appropriate to continue to adopt the going concern basis of accounting in preparing these consolidated \ufb01nancial statements
\nand the parent company \ufb01nancial statements for the year ended 31 December 2022. ",
"dimensions": {
"concept": "ifrs-full:DisclosureOfGoingConcernExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f33860": {
"value": "Exchange rates
\nThe exchange rates applied for balances and transactions in currencies other than the presentation currency of the Group, US dollars (USD) were:
\nUSD : local currency
\nClosing rate at year end
Average rate for the year-to-date
\n31 Dec 2022
31 Dec 2021
31 Dec 2022
31 Dec 2021
\nChinese yuan (CNY)
6.95
6.37
6.73
6.45
\nHong Kong dollar (HKD)
7.81
7.80
7.83
7.77
\nIndian rupee (INR)
82.73
74.34
78.63
73.94
\nIndonesian rupiah (IDR)
15,567.50
14,252.50
14,852.24
14,294.88
\nMalaysian ringgit (MYR)
4.41
4.17
4.40
4.15
\nSingapore dollar (SGD)
1.34
1.35
1.38
1.34
\nTaiwan dollar (TWD)
30.74
27.67
29.81
27.93
\nThai baht (THB)
34.56
33.19
35.06
32.01
\nUK pound sterling (GBP)
0.83
0.74
0.81
0.73
\nVietnamese dong (VND)
23,575.00
22,790.00
23,409.87
22,934.86
Foreign exchange translation
\nIn order to present the consolidated \ufb01nancial statements in USD, the results and \ufb01nancial position of entities not using USD as functional currency
\n(ie the currency of the primary economic environment in which the entity operates) must be translated into USD.
\nAll assets and liabilities of entities not operating in USD are converted at closing exchange rates while all income and expenses are converted at
\naverage exchange rates where this is a reasonable approximation of the rates prevailing on transaction dates. The impact of these foreign
\nexchange translations into the Group\u2019s USD presentation currency is recorded as a separate component in the Statement of comprehensive
\nincome. Upon the disposal of the entity, the related cumulative foreign exchange translation di\ufb00erences are recycled from other comprehensive
\nincome to the income statement as part of the gain or loss on disposal.
\nThe general principle for converting foreign currency transactions to the functional currency of an entity is to translate at the functional currency
\nspot rate prevailing at the date of the transactions. Foreign currency monetary assets and liabilities are translated at the spot exchange rate for the
\nfunctional currency at the reporting date. Changes resulting from the foreign exchange translations into the functional currency of the entity are
\nrecognised in the income statement.
\nCertain notes to the consolidated \ufb01nancial statements present comparative information at constant exchange rates (CER), in addition to the
\nreporting at actual exchange rates (AER) used throughout the consolidated \ufb01nancial statements. AER are actual historical exchange rates for the
\nspeci\ufb01c accounting year, being the average rates over the year for the income statement and the closing rates at the balance sheet date for the
\nstatement of \ufb01nancial position. CER results are calculated by translating prior year results using the current year foreign exchange rate, ie current
\nyear average rates for the income statement and current year closing rates for the statement of \ufb01nancial position.
Foreign exchange risk
\nAs at 31 December 2022, the Group held 27 per cent (31 December 2021: 26 per cent) of its \ufb01nancial assets and 64 per cent (31 December 2021:
\n63 per cent) of its \ufb01nancial liabilities in currencies mainly USD, other than the functional currency of the relevant business units or the currency to
\nwhich the functional currency is pegged (eg \ufb01nancial assets and liabilities of USD denominated business in Hong Kong). The exchange risks
\ninherent in these exposures are mitigated through the use of derivatives, mainly forward currency contracts and currency swaps as described in
\nnote (b) below.
\nThe amount of exchange gain recognised in the income statement in 2022, except for those arising on \ufb01nancial instruments measured at fair
\nvalue through pro\ufb01t or loss, is $234 million (2021: loss of $(132) million).
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfEffectOfChangesInForeignExchangeRatesExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f33921": {
"value": "ABasis of preparation and accounting policies
\n288
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Foreign exchange translation
\nIn order to present the consolidated \ufb01nancial statements in USD, the results and \ufb01nancial position of entities not using USD as functional currency
\n(ie the currency of the primary economic environment in which the entity operates) must be translated into USD.
\nAll assets and liabilities of entities not operating in USD are converted at closing exchange rates while all income and expenses are converted at
\naverage exchange rates where this is a reasonable approximation of the rates prevailing on transaction dates. The impact of these foreign
\nexchange translations into the Group\u2019s USD presentation currency is recorded as a separate component in the Statement of comprehensive
\nincome. Upon the disposal of the entity, the related cumulative foreign exchange translation di\ufb00erences are recycled from other comprehensive
\nincome to the income statement as part of the gain or loss on disposal.
\nThe general principle for converting foreign currency transactions to the functional currency of an entity is to translate at the functional currency
\nspot rate prevailing at the date of the transactions. Foreign currency monetary assets and liabilities are translated at the spot exchange rate for the
\nfunctional currency at the reporting date. Changes resulting from the foreign exchange translations into the functional currency of the entity are
\nrecognised in the income statement.
\nCertain notes to the consolidated \ufb01nancial statements present comparative information at constant exchange rates (CER), in addition to the
\nreporting at actual exchange rates (AER) used throughout the consolidated \ufb01nancial statements. AER are actual historical exchange rates for the
\nspeci\ufb01c accounting year, being the average rates over the year for the income statement and the closing rates at the balance sheet date for the
\nstatement of \ufb01nancial position. CER results are calculated by translating prior year results using the current year foreign exchange rate, ie current
\nyear average rates for the income statement and current year closing rates for the statement of \ufb01nancial position.
\nA2 New accounting pronouncements in 2022
\nThe IASB has issued the following new accounting pronouncements to be e\ufb00ective from 1 January 2022:
\n>
Amendments to IAS 37 \u2018Onerous contracts \u2013 Cost of Ful\ufb01lling a Contract\u2019 issued in May 2020;
\n>
Annual Improvements to IFRS Standards 2018\u20132020 issued in May 2020;
\n>
Amendments to IAS 16 \u2018Property, Plant and Equipment \u2013 Proceeds before Intended Use\u2019 issued in May 2020; and
\n>
Reference to the Conceptual Framework \u2013 Amendments to IFRS 3 \u2018Business combination\u2019 issued in May 2020.
\nThe adoption of these pronouncements has had no signi\ufb01cant impact on the Group consolidated \ufb01nancial statements.
\nA3 Accounting policies
\n A3.1
Critical accounting policies, estimates and judgements
\nNote A3.1 presents the critical accounting policies, estimates and judgements applied in preparing the Group\u2019s consolidated \ufb01nancial statements.
\nOther accounting policies, where signi\ufb01cant, are presented in the relevant individual notes. All accounting policies are applied consistently for the
\nyears presented and normally are not subject to changes unless new accounting standards, interpretations or amendments are introduced by the
\nIASB.
\nThe preparation of these consolidated \ufb01nancial statements requires Prudential to make accounting estimates and judgements about the
\namounts of assets, liabilities, revenues and expenses, which are both recognised and unrecognised (eg contingent liabilities) in the consolidated
\n\ufb01nancial statements. Prudential evaluates its critical accounting estimates, including those related to long-term business provisioning and the fair
\nvalue of assets as required. The notes below set out those critical accounting policies, the application of which requires the Group to make critical
\nestimates and judgements. Also set out are further critical accounting policies a\ufb00ecting the presentation of the Group\u2019s results and other items
\nthat require the application of critical estimates and judgements.
\n289
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\nGroup overview
Strategic report
Governance
Directors\u2019 remuneration report
European Embedded Value (EEV) basis results
Additional information
Financial statements
A Basis of preparation and accounting policies
/ continued
\nA3 Accounting policies
continued
\nA3.1
Critical accounting policies, estimates and judgements
continued
\n(a) Critical accounting policies with associated critical estimates and judgements
\nMeasurement of policyholder liabilities and unallocated surplus of with-pro\ufb01ts
\nThe measurement basis of policyholder
\nliabilities is dependent upon the classi\ufb01cation
\nof the contracts under IFRS 4.
\nImpacts $146.7 billion of policyholder liabilities
\nand unallocated surplus of with-pro\ufb01ts funds
\nincluding those held by joint venture and
\nassociates.
\nPolicyholder liabilities are estimated based on
\na number of actuarial assumptions (eg
\nmortality, morbidity, policyholder behaviour
\nand expenses).
\nThe Group applies judgement in determining
\nthe actuarial assumptions to be applied to
\nestimate the future amounts due to or from
\nthe policyholder in the measurement of the
\npolicyholder liabilities.
\nIFRS 4 permits the continued usage of previously applied Generally Accepted Accounting
\nPractices (GAAP) for insurance contracts and investment contracts with discretionary
\nparticipating features.
\nA modi\ufb01ed statutory basis of reporting was adopted by the Group on \ufb01rst time adoption of IFRS
\nStandards in 2005. This was set out in the Statement of Recommended Practice issued by the
\nAssociation of British Insurers (ABI SORP). The ABI SORP was withdrawn for the accounting
\nperiods beginning in or after 2015. As used in these consolidated \ufb01nancial statements, the term
\n\u2018grandfathered\u2019 ABI SORP refers to the requirements of the pronouncements prior to its
\nwithdrawal.
\nFor investment contracts that do not contain discretionary participating features, IAS 39 is
\napplied and, where the contract includes an investment management element, IFRS 15
\n\u2018Revenue from Contracts with Customers\u2019 applies.
\nThe current policies applied for the Group\u2019s insurance businesses are noted below.
\nMeasurement of insurance contract liabilities and investment contract
\nliabilities with discretionary participation features
\nThe policyholder liabilities for businesses of the insurance operations are generally determined
\nin accordance with methods prescribed by local GAAP, adjusted to comply with the
\n\u2018grandfathered\u2019 ABI SORP where necessary. Re\ufb01nements to the local reserving methodology are
\ngenerally treated as changes in estimates, dependent on their nature. The UK-style with-pro\ufb01ts
\nfunds\u2019 liabilities in Hong Kong are valued under the realistic basis in accordance with the
\nrequirements of \u2018grandfathered\u2019 FRS 27 \u2018Life Assurance\u2019 (issued by the UK Accounting Standards
\nBoard in 2004 and withdrawn in 2015). The realistic basis requires the value of liabilities to be
\ncalculated as the sum of a with-pro\ufb01ts bene\ufb01ts reserve, future policy-related liabilities and the
\nrealistic current liabilities of the fund. In Taiwan and India, US GAAP principles are applied.
\nFurther details on how liabilities are determined for material product types are set out in note
\nC3.4. This includes the approach to assumption setting including a margin for prudence. The
\nsensitivity of the insurance operations to variations in key economic assumptions, as well as the
\ninsurance risks of mortality and morbidity, is discussed in note C6.1.
\nIn April 2022 Prudential Hong Kong Limited received approval from the Hong Kong IA to early
\nadopt the new risk-based capital regime e\ufb00ective from 1 January 2022. The implication for IFRS
\nreporting of the Group is as explained further in note C3.2.
\nMeasurement of unallocated surplus of with-pro\ufb01ts funds
\nUnallocated surplus of with-pro\ufb01ts funds represents the excess of assets over policyholder
\nliabilities, determined in accordance with the Group\u2019s accounting policies, that have yet to be
\nappropriated between policyholders and shareholders for the Group\u2019s with-pro\ufb01ts funds in Hong
\nKong and Malaysia. The unallocated surplus is recorded wholly as a liability with no allocation to
\nequity. The annual excess or shortfall of income over expenditure of the with-pro\ufb01ts funds, after
\ndeclaration and attribution of the cost of bonuses to policyholders and shareholders, is
\ntransferred to or from the unallocated surplus each period through a charge or credit to the
\nincome statement. In Hong Kong, the unallocated surplus includes the shareholders\u2019 share of
\nexpected future bonuses, with the expected policyholder share being included in policyholder
\nliabilities. Any excess of assets over liabilities and amounts expected to be paid out by the fund
\non future bonuses is also included in the unallocated surplus.
\nThe balance of the unallocated surplus is determined after full provision for deferred tax on
\nunrealised appreciation or depreciation on investments.
\nLiability adequacy test
\nThe Group performs adequacy testing on its insurance liabilities to ensure that the carrying
\namounts (net of related deferred acquisition costs and, where relevant, present value of
\nacquired in-force business) is su\ufb03cient to cover current estimates of future cash out\ufb02ows of the
\nin-force policies over the expected lives. Any de\ufb01ciency is immediately charged to the income
\nstatement. The liability adequacy test is performed at the level of a portfolio of contracts that
\nare subject to broadly similar risks and managed together as a single portfolio which may be at
\nan entity or business unit level, depending on how the business is managed.
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(b) Further critical accounting policies a\ufb00ecting the presentation of the Group\u2019s results
\nPresentation of results before tax attributable to shareholders
\nPro\ufb01t before tax is a signi\ufb01cant IFRS income
\nstatement item. The Group has chosen to
\npresent a measure of pro\ufb01t before tax
\nattributable to shareholders which
\ndistinguishes between tax borne by
\nshareholders and tax attributable to
\npolicyholders to support understanding of the
\nperformance of the Group.
\nPro\ufb01t before tax attributable to shareholders is
\n$1,461 million and compares to pro\ufb01t before
\ntax of $1,482 million.
\nThe total tax charge for the Group re\ufb02ects tax that, in addition to that relating to shareholders\u2019
\npro\ufb01t, is also attributable to policyholders through the interest in with-pro\ufb01ts or unit-linked
\nfunds. Further detail is provided in note B3. Reported IFRS pro\ufb01t before the tax measure is
\ntherefore not representative of pre-tax pro\ufb01t attributable to shareholders. Accordingly, in order
\nto provide a measure of pre-tax pro\ufb01t attributable to shareholders, the Group has chosen to
\nadopt an income statement presentation of the tax charge and pre-tax results that
\ndistinguishes between policyholders\u2019 and shareholders\u2019 returns.
\nSegmental analysis of results and earnings attributable to shareholders
\nThe Group uses adjusted operating pro\ufb01t as
\nthe segmental measure of its results.
\nTotal segmental adjusted operating pro\ufb01t is
\n$4,106 million and is shown in note B1.1.
\nThe basis of calculation of adjusted operating pro\ufb01t is provided in note B1.2.
\nFor shareholder-backed business, with the exception of securities which are treated as
\navailable-for-sale (AFS), and assets classi\ufb01ed as loans and receivables at amortised cost, all
\n\ufb01nancial investments and investment properties are designated as assets at fair value through
\npro\ufb01t or loss. Short-term \ufb02uctuations in fair value a\ufb00ect the result for the year and the Group
\nprovides additional analysis of results before and after the e\ufb00ects of short-term \ufb02uctuations
\nin\u00a0investment returns, together with other items that are of a short-term, volatile or one-o\ufb00
\nin\u00a0nature.
\nShort-term \ufb02uctuations in investment returns on assets held by with-pro\ufb01ts funds in Hong Kong,
\nMalaysia and Singapore do not a\ufb00ect directly reported shareholder results. This is because (i)
\nthe unallocated surplus of with-pro\ufb01ts funds is accounted for as a liability and (ii) excess or de\ufb01cit
\nof income and expenditure of the funds over the required surplus for distribution are transferred
\nto or from policyholder liabilities (including the unallocated surplus).
\n(c) Other items requiring application of critical estimates or judgements
\nCarrying value of distribution rights intangible assets
\nThe Group applies judgement to assess
\nwhether factors such as the \ufb01nancial
\nperformance of the distribution arrangements,
\nchanges in relevant legislation and regulatory
\nrequirements indicate an impairment of
\nintangible assets representing distribution
\nrights.
\nTo determine the impaired value, the Group
\nestimates the discounted future expected cash
\n\ufb02ows arising from the cash generating unit
\ncontaining the distribution rights.
\nA\ufb00ects $3.6 billion of assets as shown in note
\nC4.2.
\nDistribution rights relate to bancassurance partnership arrangements for the distribution of
\nproducts for the term of the contractual agreement with the bank partner, for which an asset is
\nrecognised based on fees paid and fees payable not subject to performance conditions.
\nDistribution rights impairment testing is conducted when there is an indication of an
\nimpairment.
\nTo assess indicators of an impairment, the Group monitors a number of internal and external
\nfactors, including indications that the \ufb01nancial performance of the arrangement is likely to be
\nworse than expected and changes in relevant legislation and regulatory requirements that
\ncould impact the Group\u2019s ability to continue to sell new business through the bancassurance
\nchannel, and then applies judgement to assess whether these factors indicate that an
\nimpairment has occurred.
\nIf an impairment has occurred, a charge is recognised in the income statement for the
\ndi\ufb00erence between the carrying value and recoverable amount of the asset. The recoverable
\namount is the greater of fair value less costs to sell and value in use. Value in use is calculated as
\nthe present value of future expected cash \ufb02ows from the asset or the cash generating unit to
\nwhich it is allocated.
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\nGroup overview
Strategic report
Governance
Directors\u2019 remuneration report
European Embedded Value (EEV) basis results
Additional information
Financial statements
A Basis of preparation and accounting policies
/ continued
\nA3 Accounting policies
continued
\nA3.1
Critical accounting policies, estimates and judgements
continued
\nDeferred acquisition costs (DAC) for insurance contracts
\nThe Group estimates projected future pro\ufb01ts/
\nmargins to assess whether adjustments to the
\ncarrying value or amortisation pro\ufb01le of DAC
\nasset are necessary.
\nImpacts $3.3 billion of DAC as shown in
\nnote\u00a0C4.2.
\nExcept for acquisition costs of the UK-style with-pro\ufb01ts funds\u2019 contracts in Hong Kong, which are
\naccounted for under the \u2018grandfathered\u2019 FRS 27, costs of acquiring new insurance business are
\naccounted for in a way that is consistent with the principles of the \u2018grandfathered\u2019 ABI SORP.
\nThe Group determines qualifying costs that should be capitalised (ie those costs of acquiring
\nnew insurance contracts that meet the criteria under the Group\u2019s accounting policy for DAC)
\nshown by an explicit carrying value in the balance sheet. However, in some insurance operations,
\nthe deferral is implicit through the reserving basis. DAC is amortised against the pro\ufb01t margins
\nwithin future revenues on the related insurance policies. For some business units this is
\napproximated by amortising DAC on a straight-line basis over the expected duration of the
\npolicies.
\nThe recoverability of the DAC is measured and the DAC asset is deemed impaired if the
\nprojected margins (which are estimated based on a number of assumptions similar to those
\nunderlying policyholder liabilities) are less than the carrying value. To the extent that the future
\nmargins di\ufb00er from those anticipated, an adjustment to the carrying value will be necessary
\neither through a charge to the income statement (if the projected margins are lower than
\ncarrying value) or through a change in the amortisation pro\ufb01le.
\nFor those business units applying US GAAP to insurance assets and liabilities, as permitted by
\nthe \u2018grandfathered\u2019 ABI SORP, acquisition costs are deferred and amortised as per the US GAAP
\nrequirements under ASC 944 Financial Services \u2013 Insurance.
\nFinancial investments \u2013 valuation
\nFinancial investments held at fair value
\nrepresent $135.7 billion of the Group\u2019s total
\nassets.
\nFinancial investments held at amortised cost
\nrepresent $8.4 billion of the Group\u2019s total
\nassets.
\nThe Group estimates the fair value of \ufb01nancial
\ninvestments that are not actively traded using
\nquotations from independent third parties or
\ninternally developed pricing models.
\nThe Group holds the majority of its \ufb01nancial investments at fair value (primarily through pro\ufb01t or
\nloss). Financial investments held at amortised cost primarily comprise loans and deposits.
\nDetermination of fair value
\nThe fair values of the \ufb01nancial instruments for which fair valuation is required under IFRS
\nStandards are determined by the use of quoted market prices for exchange-quoted investments
\nor by using quotations from independent third parties such as brokers and pricing services or by
\nusing appropriate valuation techniques. Further details are included in note C2.1.
\nThe estimated fair value of derivative \ufb01nancial instruments re\ufb02ects the estimated amount the
\nGroup would receive or pay in an arm\u2019s-length transaction. This amount is determined using
\nquoted prices if exchange listed, quotations from independent third parties or valued internally
\nusing standard market practices.
\nQuoted market prices are used to value investments having quoted prices. Actively traded
\ninvestments without quoted prices are valued using prices provided by third parties such as
\nbrokers or pricing services. Financial investments measured at fair value are classi\ufb01ed into a
\nthree-level hierarchy as described in note C2.1.
\nIf the market for a \ufb01nancial investment of the Group is not active, the Group establishes fair
\nvalue by using quotations from independent third parties, such as brokers or pricing services, or
\nby using internally developed pricing models. Priority is given to publicly available prices from
\nindependent sources when available, but overall the source of pricing and/or the valuation
\ntechnique is chosen with the objective of arriving at a fair value measurement which re\ufb02ects the
\nprice at which an orderly transaction would take place between market participants on the
\nmeasurement date. Changes in assumptions relating to these variables could positively or
\nnegatively impact the reported fair value of these \ufb01nancial investments. Details of the \ufb01nancial
\ninvestments classi\ufb01ed as \u2018level 3\u2019 to which valuation techniques are applied and the sensitivity of
\npro\ufb01t before tax to a change in the valuation of these items, are presented in note C2.2.
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A3.2
New accounting pronouncements not yet e\ufb00ective
\nThe following standards, interpretations and amendments have been issued by the IASB but are not yet e\ufb00ective for the Group in 2022. The
\nGroup prepares consolidated \ufb01nancial statements in accordance with IFRS Standards as issued by the IASB and UK-adopted international
\naccounting standards. This is not intended to be a complete list as only those standards, interpretations and amendments that could have a
\nmaterial impact on the Group\u2019s consolidated \ufb01nancial statements are discussed.
\nIFRS 9 \u2018Financial instruments: Classi\ufb01cation and measurement\u2019
\nIFRS 9 became mandatorily e\ufb00ective for the annual periods beginning on or after 1 January 2018, with early application permitted and
\ntransitional rules apply. The Group met the eligibility criteria for temporary exemption under the Amendments to IFRS 4 from applying IFRS 9 and
\nhas accordingly deferred the adoption of IFRS 9 until 1 January 2023.
\nThe Group is eligible as its activities are predominantly to issue insurance contracts based on the criteria as set out in the amendments to IFRS
\n4. The required disclosure of the fair value of the Group\u2019s \ufb01nancial assets, showing the amounts for instruments that meet the \u2018Solely for Payment
\nof Principal and Interest\u2019 (SPPI) criteria but do not meet the de\ufb01nition of held for trading and are not managed and evaluated on a fair value basis
\nseparately from all other \ufb01nancial assets, is provided below.
\nThe Group is implementing this standard in conjunction with IFRS 17 as permitted. IFRS 9 replaces the existing IAS 39 \u2018Financial Instruments\u00a0\u2013
\nRecognition and Measurement\u2019 and will a\ufb00ect the following three areas:
\nThe classi\ufb01cation and the measurement of \ufb01nancial assets and liabilities
\nIFRS 9 rede\ufb01nes the classi\ufb01cation of \ufb01nancial assets. Based on the way in which the assets are managed in order to generate cash \ufb02ows and their
\ncontractual cash \ufb02ow characteristics (whether the cash \ufb02ows represent \u2018solely payments of principal and interest\u2019), \ufb01nancial assets are classi\ufb01ed
\ninto one of the following categories: amortised cost, fair value through other comprehensive income (FVOCI) and fair value through pro\ufb01t or loss
\n(FVTPL). An option is also available at initial recognition to irrevocably designate a \ufb01nancial asset as at FVTPL if doing so eliminates or signi\ufb01cantly
\nreduces accounting mismatches.
\nUnder IAS 39, 97 per cent of the Group\u2019s \ufb01nancial investments are valued at FVTPL and the vast majority of its investments will continue to be
\nclassi\ufb01ed as such under IFRS 9. The Company expects to make an election under IFRS 9 to measure its retained interest in Jackson\u2019s equity
\nsecurities at FVOCI. Under this designation, only dividend income from this retained interest is recognised in the pro\ufb01t or loss of the Company.
\nUnrealised gains and losses are recognised in other comprehensive income and there is no recycling to the pro\ufb01t or loss on derecognition.
\nThe existing IAS 39 amortised cost measurement for \ufb01nancial liabilities is largely maintained under IFRS 9. For \ufb01nancial liabilities designated at
\nFVTPL IFRS 9 requires changes in fair value due to changes in the entity\u2019s own credit risk to be recognised in other comprehensive income.
\nThe calculation of the impairment charge relevant for \ufb01nancial assets held at amortised cost or FVOCI
\nA new impairment model based on an expected credit loss approach replaces the existing IAS 39 incurred loss impairment model, resulting in
\nearlier recognition of credit losses compared to IAS 39. This aspect is the most complex area of IFRS 9 to implement and will involve signi\ufb01cant
\njudgements and estimation processes.
\nThe Group has assessed the scope of assets to which these requirements will apply and expects that the vast majority of the \ufb01nancial
\ninvestments of the Group to be held at FVTPL to which these requirements will not apply. Accordingly, no signi\ufb01cant amount of additional
\nimpairment is expected to be recognised by the Group under the expected credit loss approach as a result of the adoption of IFRS 9.
\nThe hedge accounting requirements which are more closely aligned with the risk management activities
\nThe Group has not applied hedge accounting treatment under IAS 39 and therefore, there is no impact in this area for the Group upon the
\nadoption of IFRS 9.
\nThe parent company and a number of intermediate holding companies and non-insurance subsidiaries adopted IFRS 9 in 2018 in their
\nindividual or separate \ufb01nancial statements where these statements are prepared in accordance with IFRS, including the UK Financial Reporting
\nStandard 101 \u2018Reduced Disclosure Framework\u2019. The public availability of the \ufb01nancial statements for these entities varies according to the local
\nlaws and regulations of each jurisdiction. The results for these entities continue to be accounted for on an IAS 39 basis in these consolidated
\n\ufb01nancial statements.
\nThe fair value of the Group\u2019s directly held \ufb01nancial assets at 31 December 2022 and 2021 are shown below. Financial assets with contractual
\nterms that give rise on speci\ufb01ed dates to cash \ufb02ows that are solely payments of principal and interest (SPPI) as de\ufb01ned by IFRS 9 are shown
\nseparately. This excludes \ufb01nancial assets that meet the de\ufb01nition of held for trading or are managed and evaluated on a fair value basis.
\n293
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\nGroup overview
Strategic report
Governance
Directors\u2019 remuneration report
European Embedded Value (EEV) basis results
Additional information
Financial statements
A Basis of preparation and accounting policies
/ continued
\nA3 Accounting policies
continued
\nA3.2
New accounting pronouncements not yet e\ufb00ective
continued
\nFinancial assets, net of derivative liabilities
\nFinancial assets that
\npass\u00a0the\u00a0SPPI test
\nAll other \ufb01nancial assets,
\nnet\u00a0of\u00a0derivative liabilities
\nFair value at
\n31 Dec 2022
\n$m
\nMovement in
\nthe fair value
\nduring 2022
\n$m
\nFair value at
\n31 Dec 2022
\n$m
\nMovement in
\nthe fair value
\nduring 2022
\n$m
\nAccrued investment income
1,135
\u2013
\u2013
\u2013
\nOther debtors
1,694
\u2013
\u2013
\u2013
\nLoans
\nnote
\n2,189
15
468
(37)
\nEquity securities and holdings in collective investment schemes
\u2013
\u2013
57,679
(8,420)
\nDebt securities
\u2013
\u2013
76,989
(21,803)
\nDerivative assets, net of derivative liabilities
\u2013
\u2013
(432)
(4,487)
\nDeposits
6,275
\u2013
\u2013
\u2013
\nCash and cash equivalents
5,514
\u2013
\u2013
\u2013
\nTotal \ufb01nancial assets, net of derivative liabilities
16,807
15
134,704
(34,747)
\nFinancial assets, net of derivative liabilities
\nFinancial assets that
\npass\u00a0the\u00a0SPPI test
\nAll other \ufb01nancial assets,
\nnet\u00a0of\u00a0derivative liabilities
\nFair value at
\n31 Dec 2021
\n$m
\nMovement in
\nthe fair value
\nduring 2021
\n$m
\nFair value at
\n31 Dec 2021
\n$m
\nMovement in
\nthe fair value
\nduring 2021
\n$m
\nAccrued investment income
1,171
\u2013
\u2013
\u2013
\nOther debtors
1,779
\u2013
\u2013
\u2013
\nLoans
\nnote
\n2,126
41
647
(1)
\nEquity securities and holdings in collective investment schemes
\u2013
\u2013
61,601
4,061
\nDebt securities
226
\u2013
98,868
(3,164)
\nDerivative assets, net of derivative liabilities
\u2013
\u2013
219
(943)
\nDeposits
4,741
\u2013
\u2013
\u2013
\nCash and cash equivalents
7,170
\u2013
\u2013
\u2013
\nTotal \ufb01nancial assets, net of derivative liabilities
17,213
41
161,335
(47)
\nNote
\nThe loans that pass the SPPI test in the tables above are primarily carried at amortised cost under IAS 39. Further information on these loans is as provided in note C2.2.
\nThe underlying \ufb01nancial assets of the Group\u2019s joint ventures and associates accounted for using the equity method are analysed below into those
\nwhich meet the SPPI condition of IFRS 9, excluding any \ufb01nancial assets that meet the de\ufb01nition of held for trading or are managed and evaluated
\non a fair value basis, and all other \ufb01nancial assets.
\nFair value information of the \ufb01nancial assets held by CITIC-Prudential Life Insurance Company (CPL), the Group\u2019s individually material joint
\nventure, is shown in the table below. The amounts disclosed represent 100 per cent of the entity\u2019s \ufb01nancial assets and not the Group\u2019s share of
\nthose amounts and have been prepared on the same basis as the Group\u2019s consolidated \ufb01nancial statements.
\nCPL (100% of the \ufb01nancial assets of the entity)
\nFinancial assets
\nFinancial assets that pass the
\nSPPI test
*
\nAll other \ufb01nancial assets
\nFair value at 31 Dec
Fair value at 31 Dec
Movement in the fair value during
\n2022
$m
2021
$m
2022
$m
2021
$m
2022
$m
2021
$m
\nAccrued investment income
176
170
\u2013
\u2013
\u2013
\u2013
\nOther debtors
667
620
\u2013
\u2013
\u2013
\u2013
\nLoans
674
656
\u2013
\u2013
\u2013
\u2013
\nEquity securities and holdings in collective investment
\nschemes
\u2013
\u2013
15,698
12,882
(1,314)
254
\nDebt securities
\u2013
\u2013
11,478
11,976
37
184
\nDeposits
1,174
1,210
\u2013
\u2013
\u2013
\u2013
\nCash and cash equivalents
561
422
\u2013
\u2013
\u2013
\u2013
\nTotal \ufb01nancial assets
3,252
3,078
27,176
24,858
(1,277)
438
\n*
The carrying value approximates fair value for the \ufb01nancial assets in this category with no movement in the fair value during the year.
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Fair value information for the Group\u2019s share of \ufb01nancial assets of other joint ventures and associates in aggregate is set out in the table below:
\nOther JVs and associates (Prudential\u2019s share)
\nFinancial assets
\nFinancial assets that pass the
\nSPPI test
*
\nAll other \ufb01nancial assets
\nFair value at 31 Dec
Fair value at 31 Dec
Movement in the fair value during
\n2022
$m
2021
$m
2022
$m
2021
$m
2022
$m
2021
$m
\nAccrued investment income
83
85
\u2013
\u2013
\u2013
\u2013
\nOther debtors
143
187
\u2013
\u2013
\u2013
\u2013
\nLoans
\u2013
26
\u2013
\u2013
\u2013
\u2013
\nEquity securities and holdings in collective investment
\nschemes
\u2013
\u2013
3,657
3,859
133
680
\nDebt securities
\u2013
\u2013
3,476
3,674
(131)
(121)
\nDeposits
335
203
\u2013
\u2013
\u2013
\u2013
\nCash and cash equivalents
380
510
\u2013
\u2013
\u2013
\u2013
\nTotal \ufb01nancial assets
941
1,011
7,133
7,533
2
559
\n*
The carrying value approximates fair value for the \ufb01nancial assets in this category with no movement in the fair value during the year.
\nIFRS 17 \u2018Insurance Contracts\u2019
\nIFRS 17 \u2018Insurance Contracts\u2019 became e\ufb00ective on 1 January 2023 and replaces IFRS 4 \u2018Insurance Contracts\u2019. IFRS 4 permitted insurers to
\ncontinue to use the statutory basis of accounting for insurance assets and liabilities that existed in their jurisdictions prior to January 2005. IFRS 17
\nreplaced this with a new measurement model that signi\ufb01cantly changes the way insurance and reinsurance contracts are accounted for, albeit the
\nscope of IFRS 17 and IFRS 4 is very similar. Therefore, nearly all of the Group\u2019s insurance and investment contracts with discretionary participation
\nfeatures accounted under IFRS 4 will be accounted for under IFRS 17. The transition date of the Group for IFRS 17 was 1 January 2022. The Group
\nis adopting IFRS 17 on its mandatory e\ufb00ective date on 1 January 2023, alongside the adoption of IFRS 9.
\nIFRS 17 implementation programme
\nThe requirements of the new standard are complex and require a fundamental change to accounting, presentation and disclosures for insurance
\ncontracts as well as the application of signi\ufb01cant judgement and new estimation techniques. The implementation of this standard has involved
\nsigni\ufb01cant enhancements to IT, actuarial and \ufb01nance systems of the Group. The Group has been implementing IFRS 17 and IFRS 9 through a
\nGroup-wide implementation programme.
\nA Group-wide Steering Committee, chaired by the Group Chief Financial O\ufb03cer, provides oversight and strategic direction to the
\nimplementation programme. Regular updates on progress are provided to the Group Audit Committee and during 2022 members of the
\nCommittee, as well as the Board, received training on the new requirements. Since the last Annual Report, the systems implementation has been
\ncompleted and the transition impacts at 1 January 2022 have been calculated. The production of half year and full year 2022 comparatives using
\nthe IFRS 17 accounting standard is scheduled to be completed in the \ufb01rst half of 2023.
\nOverview of IFRS 17
\nIFRS 17 requires liabilities for insurance contracts to be measured as the total of:
\n>
ful\ufb01lment cash \ufb02ows, comprising the best estimate of the present value of future cash \ufb02ows within the contract boundary that are expected to
\narise and an explicit risk adjustment for non-\ufb01nancial risk; and
\n>
a contractual service margin (CSM) that is representing the deferral of any day-one gains arising on initial recognition.
\nLosses are recognised directly into the income statement. For measurement purposes, contracts are grouped together into contracts of similar
\nrisk, pro\ufb01tability pro\ufb01le and issue year, with further divisions for contracts that are managed separately.
\nThe establishment of CSM on the Group\u2019s in-force business and transition approach
\nTransition refers to the determination of the opening balance sheet for the \ufb01rst year of comparative information presented under IFRS 17 (ie at
\n1 January 2022). The future cash \ufb02ows and risk adjustment are measured on a current basis in the same manner as they would be calculated for
\nsubsequent measurement. The key component of transition is therefore the determination of the CSM.
\nThe standard requires IFRS 17 to be applied retrospectively (the \u2018fully retrospective approach\u2019) unless impracticable. If a fully retrospective
\napproach is impracticable there is an option to choose either a modi\ufb01ed retrospective approach or a fair value approach. If reasonable and
\nsupportable information necessary to apply the modi\ufb01ed retrospective approach is not available, the fair value approach must be applied. The
\nGroup applied all three approaches on transition, after taking into account the information that is available to be used for the di\ufb00erent groups of
\ncontracts of the Group. The fair value approach is applied, in particular, where suitable historical information required to apply the retrospective
\ntransition approaches is no longer practicably available.
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\nGroup overview
Strategic report
Governance
Directors\u2019 remuneration report
European Embedded Value (EEV) basis results
Additional information
Financial statements
A Basis of preparation and accounting policies
/ continued
\nA3 Accounting policies
continued
\nA3.2
New accounting pronouncements not yet e\ufb00ective
continued
\nPro\ufb01t for insurance contracts under IFRS 17
\nIFRS 17 introduces a new measure of insurance revenue, based on the delivery of services to policyholders and excluding any premiums related to
\nthe investment elements of policies, which will be signi\ufb01cantly di\ufb00erent from existing premium revenue measures, currently reported in the income
\nstatement.
\nPro\ufb01t for insurance contracts under IFRS 17 is represented by the recognition of the services provided to policyholders in the period (release of
\nthe CSM), release from non-economic risk (release of risk adjustment) and the excess of the actual investment return in the period over the e\ufb00ect
\nof the unwind of the rate used to discount the General Measurement Model liabilities, together with operating variances as appropriate. CSM is
\nreleased in line with coverage units that are a measure of the quantity of bene\ufb01ts provided under a contract and the period over which coverage is
\nprovided.
\nThe CSM is released as pro\ufb01t over the coverage period of the insurance contract, re\ufb02ecting the delivery of services to the policyholder. Under
\nIFRS 17 insurance contracts are measured under either the General Measurement Model (GMM), the Variable Fee Approach (VFA) for contracts
\nwith direct participating features or the simpli\ufb01ed Premium Allocation Approach (PAA). The Group predominantly uses the VFA and GMM,
\ndepending on the speci\ufb01c characteristics of the insurance contracts. The Group makes very limited use of the PAA for some small portfolios of
\nshort duration contracts. Reinsurance contracts held are measured under the GMM.
\nWe estimate that over two-thirds of the CSM at transition is calculated using the VFA and relates to the Group\u2019s with-pro\ufb01ts products, the
\nGroup\u2019s \ufb02agship critical illness products in Hong Kong and unit-linked products with a low proportion of protection riders. The contracts calculated
\nusing the GMM, include the Group\u2019s non-pro\ufb01t protection business and unit-linked business with a high proportion of protection riders.
\nThe ful\ufb01lment cash \ufb02ows comprise the best estimate of the present value of future cash \ufb02ows within the contract boundary that are expected
\nto arise and an explicit risk adjustment for non-\ufb01nancial risk. The discount rate applied to derive the present value of future cash \ufb02ows is
\ndetermined on a bottom-up basis, starting with a liquid risk-free yield curve and adding an illiquidity premium to re\ufb02ect the characteristics of the
\ninsurance contracts. The risk adjustment re\ufb02ects the compensation the Group requires for bearing the uncertainty about the amount and timing
\nof the cash \ufb02ows from non-\ufb01nancial risk as the Group ful\ufb01ls insurance contracts, determined by the Group using a con\ufb01dence level approach.
\nThe ful\ufb01lment cash \ufb02ows are updated each reporting date to re\ufb02ect current conditions. For contracts with direct participating features which
\nare accounted for under the VFA, the CSM represents the variable fee to shareholders and it is adjusted to re\ufb02ect the e\ufb00ect of changes in
\neconomics as well as experience variances and/or assumptions changes that relate to future services. For contracts accounted for under GMM, the
\nCSM is accreted using the locked-in discount rates and only adjusted to re\ufb02ect the e\ufb00ect of non-economic experience variances and/or
\nassumptions changes that relate to future services. The adjustments to the CSM are determined using the locked-in discount rates.
\nExpected impact on transition (1 January 2022)
\nThe Group is adopting IFRS 17 retrospectively to its 2022 comparatives as required by the standard. As permitted by IFRS 9, the Group is not
\nplanning to restate the 2022 comparatives on initial application of IFRS 9 but the Group is taking advantage of the classi\ufb01cation overlay for
\nselected assets, principally to change the classi\ufb01cation of certain debt securities, so that they are valued at amortised cost rather than at fair value
\nunder IAS 39, and certain loans, so that they are valued at fair value instead of the prior amortised cost valuation. Changes from IFRS 9 have an
\nimmaterial impact on the Group\u2019s \ufb01nancial statements.
\nThe adoption of IFRS 17 and the IFRS 9 classi\ufb01cation overlay are estimated to increase the Group shareholders\u2019 equity at 1 January 2022 to
\nbetween $18.9 \u2013 $19.8 billion. This re\ufb02ects the release of prudent margins from our legacy accounting basis, particularly in Hong Kong, recognition
\nof the shareholders\u2019 share of the inherited estate within the with-pro\ufb01t funds and the net impact of timing di\ufb00erences in the pattern of pro\ufb01t
\nrecognition. The overall net impact of the IFRS 9 classi\ufb01cation overlay at 1 January 2022 is insigni\ufb01cant given the vast majority of the Group\u2019s
\n\ufb01nancial investments will continue to be carried at fair value through pro\ufb01t or loss under IFRS 9, as currently applied under IAS 39.
\nThe Group is yet to complete production of its 2022 comparatives under the IFRS 17 accounting standard. In addition we continue to review our
\nIFRS 17 accounting policies and approach to ensure they remain in line with market practice. Therefore the impacts discussed above are subject to
\nchange prior to \ufb01nalisation of the Group\u2019s \ufb01nancial statements for the year ending 31 December 2023.
\nOther new accounting pronouncements
\nIn addition to the above, the following new accounting pronouncements have also been issued and are not yet e\ufb00ective but the Group is not
\nexpecting them to have a signi\ufb01cant impact on the Group\u2019s consolidated \ufb01nancial statements:
\n>
Amendments to IAS 1 \u2018Classi\ufb01cation of liabilities as current or non-current\u2019 issued in January 2020 and e\ufb00ective from 1 January 2023. An
\nexposure draft was issued in November 2021 proposing for this e\ufb00ective date to be delayed to periods starting no earlier than 1 January 2024;
\n>
Amendments to IAS 1 and IFRS Practice Statement 2 \u2018Disclosure of accounting policies\u2019 issued in February 2021 and e\ufb00ective from 1 January
\n2023;
\n>
Amendments to IAS 8 \u2018De\ufb01nition of accounting estimates\u2019 issued in February 2021 and e\ufb00ective from 1 January 2023;
\n>
Amendments to IAS 12 \u2018Deferred tax related to assets and liabilities arising from a single transaction\u2019 issued in May 2021 and e\ufb00ective from
\n1 January 2023;
\n>
Amendments to IFRS 16 \u2018Lease liability in a sale and leaseback\u2019 issued in September 2022 and e\ufb00ective from 1 January 2024; and
\n>
Amendments to IAS 1 \u2018Non-current liabilities with covenants\u2019 issued in October 2022 and e\ufb00ective from 1 January 2024.
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B1 Analysis of performance by segment
\nB1.1
Segment results
\nNote
\n2022
$m
2021
$m
2022 vs 2021
%
\nnote (i)
\nAER
\nnote (i)
\nCER
\nnote (i)
\nAER
\nnote (i)
\nCER
\nnote (i)
\nContinuing operations:
\nCPL
368
343
329
7%
12%
\nHong Kong
1,036
975
969
6%
7%
\nIndonesia
343
446
429
(23)%
(20)%
\nMalaysia
364
350
330
4%
10%
\nSingapore
678
663
646
2%
5%
\nGrowth markets and other
\nnote (ii)
\n1,057
932
880
13%
20%
\nEastspring
260
314
299
(17)%
(13)%
\nTotal segment pro\ufb01t
4,106
4,023
3,882
2%
6%
\nOther income and expenditure unallocated to a segment:
\nNet investment return and other items
39
21
21
86%
86%
\nInterest payable on core structural borrowings
(200)
(328)
(328)
39%
39%
\nCorporate expenditure
\nnote (iii)
\n(276)
(298)
(280)
7%
1%
\nTotal other income (expenditure)
B1.4
(437)
(605)
(587)
28%
26%
\nRestructuring and IFRS 17 implementation costs
\nnote (iv)
\nB1.4
(294)
(185)
(178)
(59)%
(65)%
\nAdjusted operating pro\ufb01t
B1.2
3,375
3,233
3,117
4%
8%
\nShort-term \ufb02uctuations in investment returns on shareholder-
\nbacked business
\nnote (v)
\n(1,915)
(458)
(435)
(318)%
(340)%
\nAmortisation of acquisition accounting adjustments
(10)
(5)
(5)
(100)%
(100)%
\nGain (loss) attaching to corporate transactions
D1.1
11
(94)
(91)
n/a
n/a
\nPro\ufb01t before tax attributable to shareholders
1,461
2,676
2,586
(45)%
(44)%
\nTax charge attributable to shareholders\u2019 returns
B3
(454)
(462)
(443)
2%
(2)%
\nPro\ufb01t from continuing operations
1,007
2,214
2,143
(55)%
(53)%
\nLoss from discontinued US operations
D1.2
\u2013
(5,027)
(5,027)
n/a
n/a
\nPro\ufb01t (loss) for the year
1,007
(2,813)
(2,884)
\u2013
\u2013
\nAttributable to:
\nEquity holders of the Company
\nFrom continuing operations
998
2,192
2,121
(54)%
(53)%
\nFrom discontinued US operations
\u2013
(4,234)
(4,234)
n/a
n/a
\n998
(2,042)
(2,113)
n/a
n/a
\nNon-controlling interests
\nFrom continuing operations
9
22
22
n/a
n/a
\nFrom discontinued US operations
\u2013
(793)
(793)
n/a
n/a
\n9
(771)
(771)
n/a
n/a
\nPro\ufb01t (loss) for the year
1,007
(2,813)
(2,884)
n/a
n/a
\nB
Earnings performance
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\nGroup overview
Strategic report
Governance
Directors\u2019 remuneration report
European Embedded Value (EEV) basis results
Additional information
Financial statements
B Earnings performance
/ continued
\nB1 Analysis of performance by segment
continued
\nB1.1
Segment results
continued
\nBasic earnings per share (in cents)
Note
\n2022
2021
2022 vs 2021
%
\nnote (i)
\nAER
\nnote (i)
\nCER
\nnote (i)
\nAER
\nnote (i)
\nCER
\nnote (i)
\nBased on adjusted operating pro\ufb01t, net of tax and
\nnon-controlling interest, from continuing operations
B4
100.5\u00a2
101.5\u00a2
97.7\u00a2
(1)%
3%
\nBased on pro\ufb01t from continuing operations, net of
\nnon-controlling interest
B4
36.5\u00a2
83.4\u00a2
80.6\u00a2
(56)%
(55)%
\nBased on loss from discontinued US operations, net of
\nnon-controlling interest
B4
\u2013\u00a2
(161.1)\u00a2
(161.2)\u00a2
n/a
n/a
\nNotes
\n(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
\nthe document. For de\ufb01nitions of AER and CER refer to note A1.
\n(ii)
Adjusted operating pro\ufb01t for growth markets and other includes other items of $211 million (2021: $217 million on an AER basis; $208 million on a CER basis) which in 2022 primarily included
\nthe impact of the adoption of the Risk-Based Capital regime in Hong Kong (as discussed further in note C3.2) partially o\ufb00set by corporate taxes for life joint ventures and associates.
\n(iii)
Corporate expenditure as shown above is for head o\ufb03ce functions.
\n(iv)
Restructuring and IFRS 17 implementation costs include those incurred in insurance and asset management operations of $(137) million (2021: $(101) million on an AER basis), largely
\ncomprising the costs of Group-wide projects including the implementation of IFRS 17, reorganisation programmes and initial costs of establishing new business initiatives and operations.
\n(v)
In general, the short-term \ufb02uctuations re\ufb02ect the value movements on shareholders\u2019 assets and policyholder liabilities (net of reinsurance) arising from market movements in the year. In 2022,
\nrising interest rates and widening credit spreads across a number of the Group\u2019s life insurance markets led to unrealised bond losses which more than o\ufb00set the impact of higher discount rates on
\npolicyholder liabilities. The interest rates rises in 2022 were more substantial than that seen in 2021. Short-term \ufb02uctuations also re\ufb02ect losses on equities backing shareholder-backed business
\nfollowing market movements in 2022 (2021: equity gains) and the impact of re\ufb01nements to the reserving basis in Hong Kong following the adoption of the Risk-Based Capital regime (as
\ndiscussed further in note C3.2).
\nB1.2
Determining operating segments and performance measure of operating segments
\nOperating segments
\nThe Group\u2019s operating and reported segments for \ufb01nancial reporting purposes are de\ufb01ned and presented in accordance with IFRS 8 \u2018Operating
\nSegments\u2019 on the basis of the management reporting structure and its \ufb01nancial management information. Under the Group\u2019s management and
\nreporting structure, its chief operating decision maker is the Group Executive Committee (GEC), chaired by the Chief Executive O\ufb03cer.
\nPerformance measures for insurance operations are analysed by geographical areas for the larger business units of CPL, Hong Kong, Indonesia,
\nMalaysia and Singapore, with Eastspring, the asset management business, also analysed separately. CPL is managed jointly with CITIC, a Chinese
\nstate-owned conglomerate. All other Asia and Africa insurance operations are included in the \u2018Growth markets and other\u2019 segment alongside
\nother amounts that are not included in the segment pro\ufb01t of an individual business unit, including tax on life joint ventures and associates and
\nother items that are not representative of the underlying segment trading for the period.
\nOperations and transactions which do not form part of any business unit are reported as \u2018Unallocated to a segment\u2019 and generally comprise
\nhead o\ufb03ce functions, as presented in the additional segmental analysis in note B1.4.
\nPerformance measure
\nThe performance measure of operating segments utilised by the Group is IFRS operating pro\ufb01t based on longer-term investment returns
\n(adjusted operating pro\ufb01t) as described below. This measurement basis distinguishes adjusted operating pro\ufb01t from other constituents of total
\npro\ufb01t or loss for the year as follows:
\n>
Short-term \ufb02uctuations in investment returns on shareholder-backed business;
\n>
Amortisation of acquisition accounting adjustments arising on the purchase of business; and
\n>
Gain or loss on corporate transactions.
\nDetermination of adjusted operating pro\ufb01t for investment and liability movements
\nWith-pro\ufb01ts business
\nFor with-pro\ufb01ts business in Hong Kong, Singapore and Malaysia, the adjusted operating pro\ufb01t re\ufb02ects the shareholders\u2019 share in the bonuses
\ndeclared to policyholders. Value movements in the underlying assets of the with-pro\ufb01ts funds only a\ufb00ect the shareholder results through indirect
\ne\ufb00ects of investment performance on declared policyholder bonuses and therefore, do not a\ufb00ect directly the determination of adjusted
\noperating pro\ufb01t.
\nAssets and liabilities held within unit-linked funds
\nThe policyholder unit liabilities are directly re\ufb02ective of the underlying asset value movements. Accordingly, the adjusted operating pro\ufb01t re\ufb02ects
\nthe current year value movements in both the unit liabilities and the backing assets, which o\ufb00set one another.
\nOther shareholder-backed long-term insurance business
\nIn the case of other shareholder-\ufb01nanced business, the measurement of adjusted operating pro\ufb01t re\ufb02ects that, for the long-term insurance
\nbusiness, assets and liabilities are held for the longer term. For this business the Group believes trends in underlying performance are better
\nunderstood if the e\ufb00ects of short-term \ufb02uctuations in market conditions, such as changes in interest rates or equity markets, are excluded. In
\ndetermining the pro\ufb01t on this basis, the following key elements are applied to the results of the Group\u2019s shareholder-\ufb01nanced businesses.
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(a) Policyholder liabilities that are sensitive to market conditions
\nUnder IFRS, the degree to which the carrying values of liabilities to policyholders are sensitive to current market conditions varies between
\nbusiness units depending upon the nature of the \u2018grandfathered\u2019 measurement basis. Taiwan and India apply US GAAP, whose policyholder
\nliabilities are not sensitive to market movements as they are locked in at policy inception.
\nMovements in liabilities for some types of business do require bifurcation between the elements that relate to longer-term market condition
\nand short-term e\ufb00ects to ensure that at the net level (ie after allocated investment return and charge for policyholder bene\ufb01ts) the adjusted
\noperating pro\ufb01t re\ufb02ects longer-term market returns.
\nFor certain non-participating business, for example in Hong Kong, the economic features are more akin to asset management products with
\npolicyholder liabilities re\ufb02ecting asset shares over the contract term. Consequently, for these products, the charge for policyholder bene\ufb01ts in the
\nadjusted operating pro\ufb01t re\ufb02ects the asset share feature that is calculated assuming a longer-term return assumption rather than volatile
\nmovements that would otherwise be re\ufb02ected if the IFRS balance sheet reserving basis was applied.
\nFor other types of non-participating business, expected longer-term investment returns and interest rates are used to determine the movement
\nin policyholder liabilities for determining adjusted operating pro\ufb01t. This ensures assets and liabilities are re\ufb02ected on a consistent basis.
\n(b) Assets backing other shareholder-backed long-term insurance business
\nExcept in the case of assets backing liabilities which are directly matched (such as unit-linked business) adjusted operating pro\ufb01t for assets backing
\nshareholder-\ufb01nanced business is determined on the basis of expected longer-term investment returns. Longer-term investment returns comprise
\nactual income receivable for the year (interest/dividend income) and longer-term capital returns, determined for debt and equity-type securities
\non the basis described below. The di\ufb00erence between the actual investment returns in the reporting period and the longer-term investment
\nreturns is recognised within short-term \ufb02uctuations in investment returns.
\nDebt securities and loans
\nAs a general principle, for debt securities and loans, the longer-term investment returns comprise the interest receivable for the year and the
\namortisation of interest-related realised gains and losses to the date when sold securities would have otherwise matured (or a suitable proxy for
\nthis period). All unrealised gains and losses are treated as a component of short-term investment \ufb02uctuations. Consideration is given to the need
\nto recognise an expected longer-term level of defaults for the securities within the longer-term investment returns, based on past performance
\nand having regard to the credit quality of the portfolio, with any di\ufb00erence with actual credit-related realised losses arising in the year being
\nincluded in short-term \ufb02uctuations. If, under this analysis, realised gains and losses are principally considered to be interest related with no
\nsigni\ufb01cant credit-related losses based on past performance, then all realised gains and losses to date for these operations are treated as interest
\nrelated and amortised to adjusted operating pro\ufb01t over the period to the date those securities would otherwise have matured and no separate
\ncharge to longer-term investment returns for credit defaults is made.
\nFor Group debt securities at 31 December 2022, the level of interest-related realised gains and losses on previously sold bonds that had yet to be
\namortised to adjusted operating pro\ufb01t from short-term investment \ufb02uctuations was a net loss of $(98) million (2021: net gain of $515 million).
\nEquity-type securities
\nFor equity-type securities that comprise both the Group\u2019s investments in direct equities and all of its collective investment scheme holdings, the
\nlonger-term rates of return are estimates of the long-term trend investment returns for income and capital having regard to past performance,
\ncurrent trends and future expectations. Di\ufb00erent rates apply to di\ufb00erent categories of the securities within this category.
\nFor insurance operations, investments in equity-type securities held for non-linked shareholder-backed business amounted to $7,089 million as
\nat 31 December 2022 (31 December 2021: $6,073 million). For Group\u2019s investments in direct equities, the longer-term rates of return applied in
\n2022 ranged from 8.7per cent to 16.9 per cent (2021: 7.3 per cent to 16.9 per cent). For Group\u2019s collective investment scheme holdings, the
\nlonger-term rates of return applied ranged from 3.5 per cent to 10.7 per cent (2021: 3.6 per cent to 11.0 per cent) representing the range across
\nbusiness units of the weighted average expected longer-term return rates determined by reference to the underlying asset mix of the funds for
\neach
business unit. These rates are broadly stable from year to year but may be di\ufb00erent between regions, re\ufb02ecting, for example, di\ufb00ering
\nexpectations of in\ufb02ation in each business unit.
\nThe assumptions are for the returns expected to apply in equilibrium conditions. The assumed rates of return do not re\ufb02ect any cyclical
\nvariability in economic performance and are not set by reference to prevailing asset valuations. The longer-term investment returns for the
\ninsurance joint ventures and associates accounted for using the equity method are determined on a similar basis as the other insurance
\noperations described above.
\nDerivative value movements
\nGenerally, derivative value movements are excluded from adjusted operating pro\ufb01t. The exception is where the derivative value movements
\nbroadly o\ufb00set changes in the accounting value of other assets and liabilities included in adjusted operating pro\ufb01t.
\nOther non-insurance businesses
\nFor these businesses, the determination of adjusted operating pro\ufb01t re\ufb02ects the underlying economic substance of the arrangements. Generally,
\nrealised gains and losses are included in adjusted operating pro\ufb01t with temporary unrealised gains and losses being included in short-term
\n\ufb02uctuations. In some instances, realised gains and losses on derivatives and other \ufb01nancial instruments are amortised to adjusted operating pro\ufb01t
\nover a time period that re\ufb02ects the underlying economic substance of the arrangements.
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\nGroup overview
Strategic report
Governance
Directors\u2019 remuneration report
European Embedded Value (EEV) basis results
Additional information
Financial statements
B Earnings performance
/ continued
\nB1 Analysis of performance by segment
continued
\nB1.3
Revenue
\nPremiums and annuity considerations for conventional and other protection type insurance policies are recognised as revenue when due.
\nPremiums and annuity considerations for linked policies and other investment type policies are recognised as revenue when received or, in the case
\nof unitised or unit-linked policies, when units are issued. These amounts exclude premium taxes and similar duties where Prudential collects and
\nsettles taxes borne by the policyholder.
\nPolicy fees charged on linked policies for mortality, morbidity, asset management and policy administration are recognised when related
\nservices are provided.
\n(a) Analysis of total revenue by segment
\n2022
$m
\nInsurance operations
\nnote (i)
\nEastspring
\nInter-
\nsegment
\nelimination
\nTotal
\nsegment
\nUnallocated
\nto a
\nsegment
Total
Hong Kong
Indonesia
Malaysia
Singapore
\nGrowth
\nmarkets
\nand other
\nGross premiums earned
8,792
1,590
1,843
6,540
4,579
\u2013
\u2013
23,344
\u2013
23,344
\nOutward reinsurance premiums
(1,494)
(34)
(58)
(299)
(58)
\u2013
\u2013
(1,943)
\u2013
(1,943)
\nEarned premiums, net of
\nreinsurance
7,298
1,556
1,785
6,241
4,521
\u2013
\u2013
21,401
\u2013
21,401
\nOther income
\nnote (ii)
\n65
12
\u2013
15
116
330
\u2013
538
1
539
\nTotal external revenue
\nnote (iii)
\n7,363
1,568
1,785
6,256
4,637
330
\u2013
21,939
1
21,940
\nIntra-group revenue
\u2013
\u2013
\u2013
\u2013
1
199
(200)
\u2013
\u2013
\u2013
\nInterest income
\nnote B1.3(b)
\n996
83
217
744
628
4
\u2013
2,672
50
2,722
\nDividend and other investment
\nincome
689
77
183
576
107
1
\u2013
1,633
25
1,658
\nInvestment appreciation
\n(depreciation)
(23,704)
(70)
(365)
(7,498)
(2,876)
(21)
\u2013
(34,534)
(5)
(34,539)
\nTotal revenue, net of reinsurance
(14,656)
1,658
1,820
78
2,497
513
(200)
(8,290)
71
(8,219)
\n2021
$m
\nInsurance operations
\nnote (i)
\nEastspring
\nInter-
\nsegment
\nelimination
\nTotal
\nsegment
\nUnallocated
\nto a
\nsegment
Total
Hong Kong
Indonesia
Malaysia
Singapore
\nGrowth
\nmarkets
\nand other
\nGross premiums earned
10,032
1,724
1,900
6,246
4,315
\u2013
\u2013
24,217
\u2013
24,217
\nOutward reinsurance premiums
(1,557)
(43)
(47)
(137)
(60)
\u2013
\u2013
(1,844)
\u2013
(1,844)
\nEarned premiums, net of
\nreinsurance
8,475
1,681
1,853
6,109
4,255
\u2013
\u2013
22,373
\u2013
22,373
\nOther income
\nnote (ii)
\n52
12
\u2013
22
117
437
\u2013
640
1
641
\nTotal external revenue
\nnote (iii)
\n8,527
1,693
1,853
6,131
4,372
437
\u2013
23,013
1
23,014
\nIntra-group revenue
\u2013
\u2013
\u2013
\u2013
1
217
(218)
\u2013
\u2013
\u2013
\nInterest income
\nnote B1.3(b)
\n934
87
220
707
618
3
\u2013
2,569
1
2,570
\nDividend and other investment
\nincome
679
74
160
506
86
\u2013
\u2013
1,505
19
1,524
\nInvestment appreciation
\n(depreciation)
57
34
(300)
(29)
(361)
8
\u2013
(591)
(17)
(608)
\nTotal revenue, net of reinsurance
10,197
1,888
1,933
7,315
4,716
665
(218)
26,496
4
26,500
\nNotes
\n(i)
CPL, Prudential\u2019s life business in the Chinese Mainland, is a joint venture with CITIC and is accounted for using the equity method under IFRS. The Group\u2019s share of its results is presented in a
\nsingle line within the Group\u2019s pro\ufb01t before tax on a net of related tax basis, and therefore not shown in the analysis of revenue line items above. Revenue from external customers of CPL
\n(Prudential\u2019s share) in 2022 is $2,948 million (2021: $3,052 million). Further \ufb01nancial information on CPL is provided in note D6.3.
\n(ii)
Other income comprises income from external customers and consists primarily of revenue from the Group\u2019s asset management business of $330 million (2021: $437 million). The remaining
\nother income consists primarily of policy fee revenue from external customers and asset management rebate revenue from external fund managers. Also included in other income is fee income
\non \ufb01nancial instruments that are not held at FVTPL of $2 million (2021: $1 million).
\n(iii)
Due to the nature of the business of the Group, there is no reliance on any major customers. Of the Group\u2019s markets, only Hong Kong and Singapore have external revenue that exceeds
\n10 per cent of the Group total for the years presented.
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(b) Additional analysis of investment return
\nInvestment return included in the income statement principally comprises interest income, dividends, investment appreciation and depreciation
\n(realised and unrealised gains and losses) on investments designated as fair value through pro\ufb01t or loss, and realised gains and losses (including
\nimpairment losses) on items held at amortised cost and/or designated as AFS. Movements in unrealised appreciation or depreciation of securities
\ndesignated as AFS are recorded in other comprehensive income. Interest income is recognised as it accrues. Dividends on equity securities are
\nrecognised on the ex-dividend date and rental income is recognised on an accrual basis.
\n2022
$m
2021
$m
\nNet realised and unrealised gains (losses) on securities at fair value through pro\ufb01t or loss
\nnote (i)
\n(30,097)
624
\nNet realised and unrealised gains (losses) on derivatives at fair value through pro\ufb01t or loss
\nnote (i)
\n(4,487)
(943)
\nNet realised (losses) on loans
\nnote (i)
\n(14)
(2)
\nInterest income
\nnote (ii)
\n2,722
2,570
\nDividend income
1,531
1,496
\nOther investment returns (including foreign exchange gains and losses)
186
(259)
\nInvestment return
(30,159)
3,486
\nNotes
\n(i)
Net realised gains and losses on the Group\u2019s investments for 2022 recognised in the income statement amounted to a net loss of $(9.3) billion (2021: a net gain of $6.0 billion). The movement in
\nthe net amount of realised and unrealised gains and losses on the Group\u2019s investments from 2021 to 2022 primarily re\ufb02ects the e\ufb00ects of signi\ufb01cant increases in interest rates during the year
\ncompared with 2021 as well as equity market falls during the year.
\n(ii)
Interest income includes $362 million (2021: $280 million) in respect of \ufb01nancial assets not at fair value through pro\ufb01t and loss.
\nThe overall \ufb01nancial strength of Prudential and the results, both current and future, of the insurance business are in part dependent upon the
\nquality and performance of the various investment portfolios. Prudential\u2019s insurance investments support a range of businesses operating in
\nmany geographic areas. Each of the operations formulates a strategy based on the nature of its underlying liabilities, its level of capital and its
\nlocal regulatory requirements. Prudential\u2019s insurance business\u2019s investments, excluding assets to cover linked liabilities and those attributable to
\nexternal unit holders of consolidated investment funds, are largely held by Prudential\u2019s Singapore and Hong Kong operations.
\nAll investments are carried at fair value in the statement of \ufb01nancial position with fair value movements, which are volatile from period to
\nperiod, recorded in the income statement, except for loans and receivables, which are generally carried at amortised cost (unless designated at fair
\nvalue through pro\ufb01t or loss), the Group\u2019s retained interest in Jackson and certain centrally held debt securities, which are designated as available-
\nfor-sale and therefore the changes in unrealised fair value are booked in other comprehensive income. Subject to the e\ufb00ect of the exceptions, the
\nyear-on-year changes in investment returns primarily re\ufb02ect the generality of overall market movements for equities and debt securities. In
\naddition, foreign exchange rates a\ufb00ect the USD value of the translated income. Consistent with the treatment applied for other items of income
\nand expenditure, investment return for operations not using USD as functional currency is translated at average exchange rates. The year-on-year
\nmovements in investment return of the Group mainly re\ufb02ect the cumulative impact from the changes in interest rates on bond asset values and in
\nthe performance of the equity markets.
\nAllocation of investment return between policyholders and shareholders
\nInvestment return is attributable to policyholders and shareholders. A key feature of the accounting policies under IFRS is that the investment
\nreturn included in the income statement relates to all investment assets of the Group, irrespective of whether the return is attributable to
\nshareholders, policyholders or the unallocated surplus of with-pro\ufb01ts funds, the latter two of which have no direct impact on shareholders\u2019 pro\ufb01t.
\nThe table below provides a breakdown of the investment return attributable to each type of business.
\n2022
$m
2021
$m
\nPolicyholder returns
\nAssets backing unit-linked liabilities
(2,574)
516
\nWith-pro\ufb01ts business
(21,287)
2,700
\n(23,861)
3,216
\nShareholder returns
(6,298)
270
\nTotal investment return
(30,159)
3,486
\nPolicyholder returns
\nInvestment returns allocated to policyholders are those from investments in which shareholders have no direct economic interest, namely
\nunit-linked business for which the investment returns are wholly attributable to policyholders and with-pro\ufb01ts business in which the shareholders\u2019
\neconomic interest (and the basis of recognising IFRS basis pro\ufb01ts) is restricted to a share of the actuarially determined surplus for distribution.
\nExcept for this surplus, the investment returns of the with-pro\ufb01ts funds are attributable to policyholders (through the asset-share liabilities) or the
\nunallocated surplus, which is accounted for as a liability under IFRS 4 as shown in note C3.
\nShareholder returns
\nFor shareholder-backed non-with-pro\ufb01ts business, the investment returns are generally not directly attributable to policyholders and, therefore,
\nimpact shareholders\u2019 pro\ufb01t directly.
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\nGroup overview
Strategic report
Governance
Directors\u2019 remuneration report
European Embedded Value (EEV) basis results
Additional information
Financial statements
B Earnings performance
/ continued
\nB1 Analysis of performance by segment
continued
\nB1.4
Additional segmental analysis of pro\ufb01t after tax
\n2022
$m
2021
$m
\nCPL
(144)
278
\nHong Kong
(211)
1,068
\nIndonesia
243
362
\nMalaysia
252
265
\nSingapore
406
394
\nGrowth markets and other
\nnote (i)
\n881
434
\nEastspring
234
284
\nTotal segment
1,661
3,085
\nUnallocated to a segment (central operations)
\nnote (ii)
\n(654)
(871)
\nTotal pro\ufb01t after tax
1,007
2,214
\nNotes
\n(i)
The Growth markets and other segment comprises all other Asia and Africa insurance businesses alongside other amounts that are not included in the segment pro\ufb01t of an individual business
\nunit, including tax on life joint ventures and associates and other items that are not representative of the underlying segment trading for the year, in line with the presentation used by
\nmanagement when assessing the performance of the underlying segments internally.
\n(ii)
Comprising other income and expenditure of $(437) million (2021: $(605) million) attributable to the head o\ufb03ce functions, $(294) million (2021: $(185) million) of restructuring and IFRS 17
\nimplementation costs, $19 million (2021: $(25) million) of short-term \ufb02uctuations on investment returns in central operations, $62 million (2021: $(35) million) of corporate transactions and
\nrelated tax of $(4) million (2021: $(21) million).
\nB2 Acquisition costs and other expenditure
\n2022
$m
2021
$m
\nAcquisition costs incurred for insurance policies
(2,325)
(2,089)
\nAcquisition costs deferred
1,002
848
\nAmortisation of acquisition costs
(475)
(343)
\nAdministration costs and other expenditure (net of other reinsurance commission)
(3,100)
(3,128)
\nMovements in amounts attributable to external unit holders of consolidated investment funds
1,018
152
\nTotal acquisition costs and other expenditure
(3,880)
(4,560)
\nNotes
\n(i)
Administration costs and other expenditure include fee expenses relating to \ufb01nancial liabilities held at amortised cost and are part of the determination of the e\ufb00ective interest rate.
\n(ii)
Total depreciation and amortisation expenses are included in \u2018Acquisition costs incurred for insurance policies\u2019, \u2018Administration costs and other expenditure (net of other reinsurance commission)\u2019
\nand \u2018Amortisation of acquisition costs\u2019 and relate primarily to amortisation of DAC of insurance contracts and distribution rights intangibles. The segmental analysis of depreciation and
\namortisation is shown below.
\n2022
$m
2021
$m
\nHong Kong
(147)
(123)
\nIndonesia
(61)
(51)
\nMalaysia
(70)
(56)
\nSingapore
(202)
(162)
\nGrowth markets and other
(461)
(390)
\nEastspring
(13)
(17)
\nTotal segment
(954)
(799)
\nUnallocated to a segment (central operations)
(26)
(31)
\nTotal depreciation and amortisation
(980)
(830)
\n(iii)
Interest expense is included in \u2018Administration costs and other expenditure (net of other reinsurance commission)\u2019 other than interest on core structural borrowings that is presented separately
\non the income statement as \u2018Finance costs: interest on core structural borrowings of shareholder-\ufb01nanced businesses\u2019. Interest expense of the central operations amounted to $(209) million
\n(2021: $(331) million) comprising $(200) million (2021: $(328) million) of interest on core structural borrowings, $(2) million of interest on lease liabilities (2021: $(3) million) and $(7) million
\n(2021: nil) of interest on other operational borrowings. Core structural borrowings and operational borrowings (other than lease liabilities) represent \ufb01nancial liabilities that are not classi\ufb01ed at
\nfair value through pro\ufb01t and loss.
\nThe \u2018Total segment\u2019 interest expense is $(16) million (2021: $(10) million) of which $(11) million arises in the Hong Kong segment (2021: $(3) million) with the remainder spread broadly evenly
\nacross the other markets. Included within interest expense is $(7) million (2021: $(10) million) of interest on lease liabilities and is distributed evenly across segments.
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B2.1
Sta\ufb00 and employment costs
\nThe average number of sta\ufb00 employed by the Group during the years shown was:
\n2022
2021
\nAsia and Africa operations
\nnote (i)
\n13,685
13,237
\nHead o\ufb03ce function
511
600
\nTotal continuing operations
14,196
13,837
\nDiscontinued US operations
\nnote (ii)
\n\u2013
3,306
\nTotal Group
14,196
17,143
\nNotes
\n(i)
The Asia and Africa operations sta\ufb00 numbers above exclude 744 (2021: 440) commission-based sales sta\ufb00 who have an employment contract with the Group.
\n(ii)
Average sta\ufb00 numbers of the discontinued US operations were for the period up to the demerger in September 2021.
\nThe costs of employment were:
\n2022
$m
2021
$m
\nGroup total
Continuing
\nDiscontinued
\nUS operations
Group total
\nWages and salaries
1,018
973
511
1,484
\nSocial security costs
41
42
22
64
\nDe\ufb01ned contribution schemes
40
42
29
71
\nTotal Group
1,099
1,057
562
1,619
\nB2.2
Share-based payment
\nThe Company o\ufb00ers discretionary share awards to certain key employees and all-employee share plans in the UK and a number of Asia locations.
\nThe compensation expense charged to the income statement is primarily based upon the fair value of the awards granted, the vesting period and
\nthe vesting conditions. The Company has established trusts to facilitate the delivery of Prudential plc shares under some of these plans. The cost
\nto the Company of acquiring these newly issued shares held in trusts is shown as a deduction from shareholders\u2019 equity.
\n(a) Description of the plans
\nThe Group operates a number of share award plans that provides Prudential plc shares, or ADRs, to participants upon vesting. The plans in
\noperation include the Prudential Long Term Incentive Plan, the Prudential Annual Incentive Plan, savings-related share option schemes, share
\npurchase plans and deferred bonus plans. Where Executive Directors participate in these plans, details about those schemes are provided in the
\nDirectors\u2019 remuneration report. The following information is provided about plans in which the Executive Directors do not participate:
\nShare scheme
\nnote
\nDescription
\nPrudential Asia and Africa (PAA)
\nLong-Term Incentive Plan (PAA LTIP)
\nThe PAA LTIP provides eligible employees with conditional awards. Awards are discretionary and
\nvest after one, two or three years subject to the employee being in employment. Vesting of
\nawards may also be subject to performance conditions. All awards are generally made in
\nPrudential shares. In countries where share awards are not feasible for reasons including
\nsecurities and/or tax considerations, awards will be replaced by the cash value of the shares that
\nwould otherwise have vested.
\nPrudential Agency Long-Term Incentive
\nPlan (LTIP)
\nCertain agents are eligible to be granted awards in Prudential shares under the Prudential
\nAgency LTIP. These awards are structured in a similar way to the PAA LTIP described above with
\nmost awards granted with a three-year vesting period.
\nRestricted Share Plan (RSP)
The Company operates the RSP for certain employees. Awards under this plan are discretionary,
\nand the vesting of awards may be subject to performance conditions. All awards are made in
\nPrudential shares.
\nDeferred bonus plans
The Company operates a number of deferred bonus plans including the Group Deferred Bonus
\nPlan (GDBP) and the Prudential Deferred Bonus Plan. There are no performance conditions
\nattached to deferred share awards made under these arrangements.
\nSavings-related share option schemes
Eligible agents in certain business units are able to participate in the International Savings-
\nRelated Share Option Scheme for Non-Employees, which is similar to the HMRC-approved Save
\nAs You Earn (SAYE) share option scheme in the UK.
\nShare purchase plans
Eligible employees outside the UK are invited to participate in arrangements similar to the
\nCompany\u2019s HMRC-approved UK Share Incentive Plan, which allows the purchase of
\nPrudential plc shares. Sta\ufb00 based in Asia and Africa are eligible to participate in the Prudential
\nAll Employee Share Purchase Plan.
\nNote
\nThe total numbers of securities available for issue under these schemes are disclosed in note I(vii) within additional unaudited \ufb01nancial information.
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\nGroup overview
Strategic report
Governance
Directors\u2019 remuneration report
European Embedded Value (EEV) basis results
Additional information
Financial statements
B Earnings performance
/ continued
\nB2 Acquisition costs and other expenditure
continued
\n(b) Outstanding options and awards
\nThe following table shows the movement in outstanding options and awards under the Group\u2019s share-based compensation plans:
\nOptions outstanding under SAYE schemes
\nAwards outstanding under
\nincentive plans
\n2022
2021
2022
2021
\nNumber
\nof options
\nmillions
\nWeighted
\naverage
\nexercise
\nprice
\n\u00a3
\nNumber
\nof options
\nmillions
\nWeighted
\naverage
\nexercise
\nprice
\n\u00a3
\nNumber of awards
\nmillions
\nBalance at beginning of year:
2.0
11.61
2.3
11.86
24.6
40.6
\nGranted
0.5
7.37
0.4
11.90
6.5
5.2
\nModi\ufb01cation
\u2013
\u2013
0.1
11.77
\u2013
0.7
\nExercised
(0.3)
11.17
(0.7)
12.58
(7.2)
(8.6)
\nForfeited
\u2013
10.84
\u2013
11.11
(1.1)
(3.1)
\nCancelled
(0.3)
12.67
(0.1)
11.51
(0.1)
(0.1)
\nLapsed/Expired
\u2013
13.00
\u2013
12.88
(1.7)
(0.6)
\nJackson awards derecognised on demerger
\nnote
\n\u2013
\u2013
\u2013
\u2013
\u2013
(9.5)
\nBalance at end of year
1.9
10.43
2.0
11.61
21.0
24.6
\nOptions immediately exercisable at end of year
0.3
12.48
0.2
12.26
\nNote
\nOn demerger of Jackson from the Prudential Group, outstanding share awards for Prudential plc participants were adjusted to receive the demerger dividend in the form of additional Prudential plc
\nshares, to be released on the same timetable and to the same extent as their original share awards. In the case of the International Savings-Related Share Option Scheme for Non Employees the
\nadjustments to outstanding options were con\ufb01rmed as being fair and reasonable by an independent \ufb01nancial adviser in accordance with the rules of that plan and the Hong Kong Stock Exchange
\nListing Rules. Employees of Jackson were granted replacement awards over Jackson shares, in exchange for existing Group awards outstanding under incentive plans. As designated replacement awards
\nwere granted, no cancellation was recognised in respect of the original awards. As the replacement awards are an obligation of Jackson these awards were derecognised by the Group on demerger.
\nThe weighted average share price of Prudential plc for 2022 was \u00a310.33 (2021: \u00a314.31).
\nThe following table provides a summary of the range of exercise prices for Prudential plc options outstanding at 31 December:
\nOutstanding
Exercisable
\nNumber outstanding
\nmillions
\nWeighted average
\nremaining
\ncontractual life
\nyears
\nWeighted average
\nexercise prices
\n\u00a3
\nNumber exercisable
\nmillions
\nWeighted average
\nexercise prices
\n\u00a3
\n2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
\nBetween \u00a37 and \u00a38
0.5
\u2013
4.1
\u2013
7.37
\u2013
\u2013
\u2013
\u2013
\u2013
\nBetween \u00a39 and \u00a310
0.4
0.4
2.2
3.2
9.64
9.64
\u2013
\u2013
\u2013
\u2013
\nBetween \u00a311 and \u00a312
0.8
1.2
2.4
2.7
11.48
11.38
0.2
0.1
11.12
11.04
\nBetween \u00a313 and \u00a314
0.1
0.2
1.4
1.6
13.94
13.94
\u2013
0.1
\u2013
13.94
\nBetween \u00a314 and \u00a315
0.1
0.2
0.4
1.4
14.55
14.55
0.1
\u2013
14.55
\u2013
\nTotal
1.9
2.0
2.6
2.6
10.43
11.61
0.3
0.2
12.48
12.26
\nThe years shown above for weighted average remaining contractual life include the time period from end of vesting period to expiration of
\ncontract.
\n(c) Fair value of options and awards
\nThe fair value amounts estimated on the date of grant relating to all options and awards were determined by using the following assumptions:
\n2022
2021
\nPrudential
\nLTIP (TSR)
\nSAYE
\noptions
\nOther
\nawards
\nPrudential
\nLTIP (TSR)
\nSAYE
\noptions
\nOther
\nawards
\nDividend yield (%)
\u2013
1.11
\u2013
\u2013
0.81
\u2013
\nExpected volatility (%)
33.64
25.68
\u2013
26.69
22.31
\u2013
\nRisk-free interest rate (%)
2.79
3.97
\u2013
0.36
1.18
\u2013
\nExpected option life (years)
\u2013
4.52
\u2013
\u2013
4.50
\u2013
\nWeighted average exercise price (\u00a3)
\u2013
7.37
\u2013
\u2013
11.90
\u2013
\nWeighted average share price at grant date (\u00a3)
11.15
9.54
\u2013
15.11
14.76
\u2013
\nWeighted average fair value at grant date (\u00a3)
2.09
3.45
11.11
7.70
4.13
14.79
\n304
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The compensation costs for all awards and options are recognised in net income over the plans\u2019 respective vesting periods. The Group uses the
\nBlack-Scholes model to value all options, and \ufb01nancial equivalence to value all awards other than those which have TSR performance conditions
\nattached (some Prudential LTIP and RSP awards) for which the Group uses a Monte Carlo model in order to allow for the impact of these
\nconditions. These models are used to calculate fair values for share options and awards at the grant date based on the quoted market price of the
\nstock at the measurement date, the amount, if any, that the employees are required to pay, the dividend yield, expected volatility, risk-free interest
\nrates and exercise prices.
\nFor all options and awards, the expected volatility is based on the market implied volatilities as quoted on Bloomberg. The Prudential speci\ufb01c
\nat-the-money implied volatilities are adjusted to allow for the di\ufb00erent terms and discounted exercise price on SAYE options by using information
\non the volatility surface of the FTSE 100.
\nRisk-free interest rates are taken from swap spot rates with projection terms matching the corresponding vesting periods. For awards with a TSR
\ncondition, volatilities and correlations between Prudential and a basket of 12 competitor companies is required. For grants in 2022, the average
\nvolatility for the basket of competitors was 26.46 per cent (2021: 23.62 per cent). Correlations for the basket are calculated for each pairing from
\nthe log of daily TSR returns for the three years prior to the valuation date. Market implied volatilities are used for both Prudential and the basket of
\ncompetitors. Changes to the subjective input assumptions could materially a\ufb00ect the fair value estimate.
\nOther awards, without market performance conditions or exercise price, are valued based on grant date share price.
\n(d) Share-based payment expense charged to the income statement
\nThe total expense recognised in 2022 in the consolidated \ufb01nancial statements relating to share-based compensation is $104 million (2021:
\n$100 million), of which $97 million (2021: $94 million) is accounted for as equity-settled.
\nThe Group had $27 million of liabilities at 31 December 2022 (31 December 2021: $32 million) relating to share-based payment awards
\naccounted for as cash-settled.
\nB2.3
Key management remuneration
\nKey management constitutes the Directors of Prudential plc and other non-Director members of the GEC, as they have authority and
\nresponsibility for planning, directing and controlling the activities of the Group.
\nTotal key management remuneration is analysed in the following table:
\n2022
$m
2021
$m
\nSalaries and short-term bene\ufb01ts
22.5
29.3
\nPost-employment bene\ufb01ts
1.0
1.4
\nShare-based payments
15.4
14.0
\nPayments on separation
1.0
23.5
\n39.9
68.2
\nThe share-based payments charge comprises $6.7 million (2021: $7.5 million), which is determined in accordance with IFRS 2 \u2018Share-based
\nPayment\u2019 (see note B2.2) and $8.7 million (2021: $6.5 million) of deferred share awards.
\nAdditional details on the Directors\u2019 emoluments, retirement bene\ufb01ts and other payments are given in the Directors\u2019 remuneration report. In
\naddition to the total amounts disclosed of remuneration paid to the Directors in 2021, are amounts paid to those directors who stepped down
\nfrom the Board in 2021 being $102,000 to Kai Nargolwala and $203,000 to Fields Wicker-Miurin. This is as disclosed in the 2021 Annual Report.
\nB2.4
Fees payable to the auditor
\n2022
$m
2021
$m
\nAudit of the Company\u2019s annual accounts
2.3
2.4
\nAudit of subsidiaries pursuant to legislation
4.4
5.9
\nAudit fees payable to the auditor
6.7
8.3
\nAudit-related assurance services
\nnote (i)
\n3.5
4.5
\nOther assurance services
0.7
1.1
\nServices relating to corporate \ufb01nance transactions
\u2013
1.6
\nNon-audit fees payable to the auditor
4.2
7.2
\nTotal fees payable to the auditor
10.9
15.5
\nAnalysed into:
\nFees payable to the auditor attributable to continuing operations:
\nOne-o\ufb00 non-audit services associated with demerger and public o\ufb00ering
\nnote (ii)
\n\u2013
1.9
\nOther audit and non-audit services
10.9
11.3
\n10.9
13.2
\nFees payable to the auditor attributable to discontinued US operations
\u2013
2.3
\n10.9
15.5
\nNotes
\n(i)
Of the audit-related assurance service fees of $3.5 million in 2022 (2021: $4.5 million), $0.9 million (2021: $0.6 million) relates to services that are required by law and regulation.
\n(ii)
Of the $1.9 million one-o\ufb00 non-audit services fees associated with the demerger of the US operations and the public o\ufb00ering in Hong Kong in 2021, $0.1 million was for audit-related assurance
\nand $0.1 million for other assurance services required by law and regulation.
\n305
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\nGroup overview
Strategic report
Governance
Directors\u2019 remuneration report
European Embedded Value (EEV) basis results
Additional information
Financial statements
B Earnings performance
/ continued
\nB3 Tax charge
\nPrudential is subject to tax in numerous jurisdictions and the calculation of the total tax charge inherently involves a degree of estimation and
\njudgement. Current tax expense is charged or credited based upon amounts estimated to be payable or recoverable as a result of taxable amounts
\nfor the current year and adjustments made in relation to prior years. The positions taken in tax returns where applicable tax regulation is subject to
\ninterpretation are recognised in full in the determination of the tax charge in the consolidated \ufb01nancial statements if the Group considers that it is
\nprobable that the taxation authority will accept those positions. Otherwise, provisions are established based on the likely amount of the liability, or
\nrecovery, by providing for the single best estimate of the most likely outcome or the weighted average expected value where there are multiple
\noutcomes.
\nThe total tax charge includes tax expense attributable to both policyholders and shareholders. The tax expense attributable to policyholders
\ncomprises the tax on the income of the consolidated with-pro\ufb01ts and unit-linked funds. In certain jurisdictions, life insurance companies are taxed
\non both their shareholders\u2019 pro\ufb01ts and on their policyholders\u2019 insurance and investment returns on certain insurance and investment products.
\nAlthough both types of tax are included in the total tax charge in the Group\u2019s Consolidated income statement, they are presented separately in the
\nConsolidated income statement to provide the most relevant information about tax that the Group pays on its pro\ufb01ts.
\nDeferred taxes are provided under the liability method for all relevant temporary di\ufb00erences. IAS 12 \u2018Income Taxes\u2019 does not require all
\ntemporary di\ufb00erences to be provided for, in particular, the Group does not provide for deferred tax on undistributed earnings of subsidiaries where
\nthe Group is able to control the timing of the distribution and the temporary di\ufb00erence created is not expected to reverse in the foreseeable future.
\nDeferred tax assets are only recognised when it is more likely than not that future taxable pro\ufb01ts will be available against which these losses can be
\nutilised.
\nDeferred tax is measured at the tax rates that are expected to apply to the period when the asset is realised or the liability settled, based on tax
\nrates (and laws) that have been enacted or are substantively enacted at the end of the reporting period.
\nB3.1
Total tax charge by nature
\nThe total tax charge in the income statement is as follows:
\n2022
$m
2021
$m
\nAttributable to shareholders:
\nHong Kong
(52)
(40)
\nIndonesia
(60)
(74)
\nMalaysia
(90)
(71)
\nSingapore
(78)
(67)
\nGrowth markets and other
(144)
(159)
\nEastspring
(26)
(30)
\nTotal segment
(450)
(441)
\nUnallocated to a segment (central operations)
(4)
(21)
\nTax charge attributable to shareholders
(454)
(462)
\nAttributable to policyholders:
\nHong Kong
(56)
(79)
\nIndonesia
(5)
4
\nMalaysia
\u2013
(2)
\nSingapore
44
(261)
\nGrowth markets and other
(4)
(4)
\nTax charge attributable to policyholders
(21)
(342)
\nTotal tax charge
(475)
(804)
\nPro\ufb01t before tax includes Prudential\u2019s share of pro\ufb01t after tax from the joint ventures and associates that are equity-accounted for. Therefore, the
\nactual tax charge in the income statement does not include tax arising from the results of joint ventures and associates including CPL.
\nThe reconciliation of the expected to actual tax charge attributable to shareholders is provided in B3.2 below. The tax charge attributable to
\npolicyholders of $(21) million (2021: $(342) million) above is equal to the pro\ufb01t before tax attributable to policyholders as a result of accounting
\nfor policyholder income after the deduction of expenses and movement in unallocated surpluses on a post-tax basis. The reduction in the tax
\ncharge attributable to policyholders results from the deferred tax impact of policyholder liability movements caused by adverse market
\nmovements in 2022, primarily in Singapore.
\n306
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The total tax charge comprises:
\n2022
$m
2021
$m
\nCurrent tax expense:
\nCorporation tax
(474)
(405)
\nAdjustments in respect of prior years
(7)
6
\nTotal current tax charge
(481)
(399)
\nDeferred tax arising from:
\nOrigination and reversal of temporary di\ufb00erences
4
(388)
\nAdjustment in respect of a tax loss, tax credit or temporary di\ufb00erence from a prior year
2
(17)
\nTotal deferred tax credit (charge)
6
(405)
\nTotal tax charge
(475)
(804)
\nB3.2
Reconciliation of shareholder e\ufb00ective tax rate
\nIn the reconciliation below, the expected tax rate re\ufb02ects the corporation tax rates that are expected to apply to the taxable pro\ufb01t or loss for the
\nperiod. It re\ufb02ects the corporation tax rates of each jurisdiction weighted by reference to the amount of pro\ufb01t or loss contributing to the aggregate
\nresult.
\n2022
2021
\nTax
\nattributable to
\nshareholders
\n$m
\nPercentage
\nimpact
\non ETR
\n%
\nTax
\nattributable to
\nshareholders
\n$m
\nPercentage
\nimpact
\non ETR
\n%
\nAdjusted operating pro\ufb01t
3,375
3,233
\nNon-operating result
\nnote (i)
\n(1,914)
(557)
\nPro\ufb01t before tax
1,461
2,676
\nTax charge at the expected rate
(287)
20%
(539)
20%
\nE\ufb00ects of recurring tax reconciliation items:
\nIncome not taxable or taxable at concessionary rates
\nnote (ii)
\n61
(4)%
63
(2)%
\nDeductions and losses not allowable for tax purposes
\nnote (iii)
\n(196)
13%
(92)
3%
\nItems related to taxation of life insurance businesses
\nnote (iv)
\n108
(7)%
177
(7)%
\nDeferred tax adjustments including unrecognised tax losses
\nnote (v)
\n(45)
3%
(111)
4%
\nE\ufb00ect of results of joint ventures and associates
\nnote (vi)
\n3
0%
80
(3)%
\nIrrecoverable withholding taxes
\nnote (vii)
\n(55)
4%
(60)
2%
\nOther
(15)
0%
(8)
1%
\nTotal (charge) credit on recurring items
(139)
9%
49
(2)%
\nE\ufb00ects of non-recurring tax reconciliation items:
\nAdjustments to tax charge in relation to prior years
1
0%
(11)
0%
\nMovements in provisions for open tax matters
\nnote (viii)
\n(40)
3%
47
(2)%
\nImpact of changes in local statutory tax rates
\u2013
0%
6
0%
\nAdjustments in relation to business disposals and corporate transactions
11
(1)%
(14)
1%
\nTotal (charge) credit on non-recurring items
(28)
2%
28
(1)%
\nTotal actual tax charge
(454)
31%
(462)
17%
\nAnalysed into:
\nTax charge on adjusted operating pro\ufb01t
(614)
(548)
\nTax credit on non-operating result
\nnote (i)
\n160
86
\nActual tax rate on:
\nAdjusted operating pro\ufb01t:
\nIncluding non-recurring tax reconciling items
\nnote (ix)
\n18%
17%
\nExcluding non-recurring tax reconciling items
17%
18%
\nTotal pro\ufb01t
\nnote (ix)
\n31%
17%
\n307
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\nGroup overview
Strategic report
Governance
Directors\u2019 remuneration report
European Embedded Value (EEV) basis results
Additional information
Financial statements
B Earnings performance
/ continued
\nB3 Tax charge
continued
\nB3.2
Reconciliation of shareholder e\ufb00ective tax rate
continued
\nNotes
\n(i)
\u2018Non-operating result\u2019 is used to refer to items excluded from adjusted operating pro\ufb01t and includes short-term investment \ufb02uctuations in investment returns on shareholder-backed business,
\ncorporate transactions and amortisation of acquisition accounting adjustments. The tax charge on non-operating result is calculated using the tax rates applicable to investment pro\ufb01t or loss
\nrecorded in the non-operating result for each entity, and then adjusting for any discrete items included in the total tax charge that relate speci\ufb01cally to the amounts (other than investment
\nrelated pro\ufb01t or loss) included in the non-operating result. The di\ufb00erence between this tax on non-operating result and the tax charge calculated on pro\ufb01t before tax is the tax charge on adjusted
\noperating pro\ufb01t.
\n(ii)
Income not taxable or taxable at concessionary rates primarily relates to non-taxable investment income in Malaysia and Singapore.
\n(iii)
Deductions and losses not allowable for tax purposes primarily relates to non-deductible investment losses in Growth markets.
\n(iv)
Items related to taxation of life insurance businesses primarily relates to Hong Kong where the taxable pro\ufb01t is computed as 5 per cent of net insurance premiums.
\n(v)
The unrecognised tax losses reconciling amount re\ufb02ects losses arising where it is unlikely that relief for the losses will be available in future years.
\n(vi)
Pro\ufb01t before tax includes Prudential\u2019s share of pro\ufb01t after tax from the joint ventures and associates. Therefore, the actual tax charge does not include tax arising from pro\ufb01t or loss of joint
\nventures and associates and is re\ufb02ected as a reconciling item.
\n(vii)
The Group incurs withholding tax on remittances received from certain jurisdictions and on certain investment income. Where these withholding taxes cannot be o\ufb00set against corporate income
\ntax or otherwise recovered, they represent a cost to the Group. Irrecoverable withholding tax on remittances is included in Other operations and is not allocated to any segment. Irrecoverable
\nwithholding tax on investment income is included in the relevant segment where the investment income is re\ufb02ected.
\n(viii)
The statement of \ufb01nancial position contains the following provisions in relation to open tax matters:
\n2022
$m
\nBalance at 1 Jan
(42)
\nMovements in the current year included in tax charge attributable to shareholders
(40)
\nOther movements (including interest arising on open tax matters and amounts included in the Group\u2019s share of pro\ufb01ts from joint
\nventures and associates, net of related tax)
3
\nBalance at 31 Dec
(79)
\n(ix)
The actual tax rates of the relevant business operations are shown below:
\n2022
%
\nHong
\nKong
Indonesia
Malaysia
Singapore
\nGrowth
\nmarkets
\nand other
Eastspring
\nOther
\noperations
\nTotal
\nattributable
\nto
\nshareholders
\nTax rate on adjusted operating pro\ufb01t
6%
20%
26%
16%
24%
10%
(1)%
18%
\nTax rate on pro\ufb01t before tax
(33)%
20%
26%
16%
14%
10%
(1)%
31%
\n2021
%
\nHong
\nKong
Indonesia
Malaysia
Singapore
\nGrowth
\nmarkets
\nand other
Eastspring
\nOther
\noperations
\nTotal
\nattributable
\nto
\nshareholders
\nTax rate on adjusted operating pro\ufb01t
5%
17%
21%
15%
22%
10%
(3)%
17%
\nTax rate on pro\ufb01t before tax
4%
17%
21%
15%
27%
10%
(2)%
17%
\n308
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B4 Earnings per share
\n2022
\nBefore
\ntax
\n$m
\nTax
\n$m
\nNon-controlling
\ninterests
\n$m
\nNet of tax
\nand non-
\ncontrolling
\ninterests
\n$m
\nBasic
\nearnings
\nper share
\ncents
\nDiluted
\nearnings
\nper share
\ncents
\nBased on adjusted operating pro\ufb01t
3,375
(614)
(11)
2,750
100.5\u00a2
100.5\u00a2
\nShort-term \ufb02uctuations in investment returns on shareholder-
\nbacked business
(1,915)
155
2
(1,758)
(64.3)\u00a2
(64.3)\u00a2
\nAmortisation of acquisition accounting adjustments
(10)
\u2013
\u2013
(10)
(0.4)\u00a2
(0.4)\u00a2
\nGain attaching to corporate transactions
11
5
\u2013
16
0.7\u00a2
0.7\u00a2
\nBased on pro\ufb01t for the year
1,461
(454)
(9)
998
36.5\u00a2
36.5\u00a2
\n2021
\nBefore
\ntax
\n$m
\nTax
\n$m
\nNon-controlling
\ninterests
\n$m
\nNet of tax
\nand non-
\ncontrolling
\ninterests
\n$m
\nBasic
\nearnings
\nper share
\ncents
\nDiluted
\nearnings
\nper share
\ncents
\nBased on adjusted operating pro\ufb01t
3,233
(548)
(17)
2,668
101.5\u00a2
101.5\u00a2
\nShort-term \ufb02uctuations in investment returns on shareholder-
\nbacked business
(458)
81
(5)
(382)
(14.5)\u00a2
(14.5)\u00a2
\nAmortisation of acquisition accounting adjustments
(5)
\u2013
\u2013
(5)
(0.2)\u00a2
(0.2)\u00a2
\nLoss attaching to corporate transactions
(94)
5
\u2013
(89)
(3.4)\u00a2
(3.4)\u00a2
\nBased on pro\ufb01t for the year
2,676
(462)
(22)
2,192
83.4\u00a2
83.4\u00a2
\nBased on loss from discontinued US operations
\n(4,234)
(161.1)\u00a2
(161.1)\u00a2
\nBased on loss for the year
\n(2,042)
(77.7)\u00a2
(77.7)\u00a2
\nBasic earnings per share are calculated based on earnings attributable to ordinary shareholders, after related tax and non-controlling interests,
\ndivided by the weighted average number of ordinary shares outstanding during the year, excluding those held in employee share trusts, which are
\ntreated as cancelled. For diluted earnings per share, the weighted average number of shares in issue is adjusted to assume conversion of all dilutive
\npotential ordinary shares. The Group\u2019s only class of potentially dilutive ordinary shares are those share options granted to employees where the
\nexercise price is less than the average market price of the ordinary shares during the year. No adjustment is made if the impact is anti-dilutive
\noverall.
\nThe weighted average number of shares for calculating basic and diluted earnings per share, which excludes those held in employee share
\ntrusts, is set out as below:
\nNumber of shares (in millions)
2022
2021
\nWeighted average number of shares for calculation of basic earnings per share
2,736
2,628
\nShares under option at end of year
1
2
\nShares that would have been issued at fair value on assumed option price at end of year
(1)
(2)
\nWeighted average number of shares for calculation of diluted earnings per share
2,736
2,628
\n309
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\nGroup overview
Strategic report
Governance
Directors\u2019 remuneration report
European Embedded Value (EEV) basis results
Additional information
Financial statements
B Earnings performance
/ continued
\nB5 Dividends
\n2022
2021
\nCents per share
$m
Cents per share
$m
\nDividends relating to reporting year:
\nFirst interim dividend
5.74\u00a2
154
5.37\u00a2
140
\nSecond interim dividend
13.04\u00a2
359
11.86\u00a2
326
\nTotal relating to reporting year
18.78\u00a2
513
17.23\u00a2
466
\nDividends paid in reporting year:
\nCurrent year \ufb01rst interim dividend
5.74\u00a2
154
5.37\u00a2
138
\nSecond interim dividend for prior year
11.86\u00a2
320
10.73\u00a2
283
\nTotal paid in reporting year
17.60\u00a2
474
16.10\u00a2
421
\nFirst and second interim dividends are recorded in the period in which they are paid. In addition to the dividends shown in the table above, on
\n13 September 2021, following approval by the Group\u2019s shareholders, Prudential plc demerged its US operations (Jackson) via a dividend in specie
\nof $1,735 million.
\nDividend per share
\nThe 2022 \ufb01rst interim dividend of 5.74 cents per ordinary share was paid to eligible shareholders on 27 September 2022.
\nOn 15 May 2023, Prudential will pay a second interim dividend of 13.04 cents per ordinary share for the year ended 31 December 2022. The
\nsecond interim dividend will be paid to shareholders included on the UK register at 5.00pm (Greenwich Mean Time) and to shareholders on the HK
\nbranch register at 4.30pm (Hong Kong Time) on 24 March 2023 (Record Date), and also to the Holders of US American Depositary Receipts
\n(ADRs) as at 24 March 2023. The second interim dividend will be paid on or about 22 May 2023 to shareholders with shares standing to the credit
\nof their securities accounts with The Central Depository (Pte) Limited (CDP) at 5.00pm (Singapore Time) on the Record Date.
\nShareholders holding shares on the UK or HK share registers will continue to receive their dividend payments in either GBP or HKD respectively,
\nunless they elect otherwise. Shareholders holding shares on the UK or HK registers may elect to receive dividend payments in USD. Elections must
\nbe made through the relevant UK or HK share registrar on or before 19 April 2023. The corresponding amounts per share in GBP and HKD are
\nexpected to be announced on or about 27 April 2023. The USD to GBP and HKD conversion rates will be determined by the actual rates achieved
\nby Prudential buying those currencies prior to the subsequent announcement.
\nHolders of ADRs will continue to receive their dividend payments in USD. Shareholders holding an interest in Prudential shares through CDP in
\nSingapore will continue to receive their dividend payments in SGD at an exchange rate determined by CDP.
\nShareholders on the UK register are eligible to participate in a Dividend Reinvestment Plan.
\n310
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prudentialplc.com
C1 Group assets and liabilities by business type
\nThe analysis below is structured to show the investments and other assets and liabilities of the Group by reference to the di\ufb00ering degrees of
\npolicyholder and shareholder economic interest of the di\ufb00erent types of business.
\nDebt securities are analysed below according to the issuing government for sovereign debt and to credit ratings for the rest of the securities. The
\nGroup uses the middle of the Standard & Poor\u2019s, Moody\u2019s and Fitch ratings, where available. Where ratings are not available from these rating
\nagencies, local external rating agencies\u2019 ratings and lastly internal ratings have been used. Securities with none of the ratings listed above are
\nclassi\ufb01ed as unrated and included under the \u2018below BBB- and unrated\u2019 category. The total securities (excluding sovereign debt) that were unrated
\nat 31 December 2022 were $1,152 million (31 December 2021: $1,130 million). Additionally, government debt is shown separately from the rating
\nbreakdowns in order to provide a more focused view of the credit portfolio.
\nIn the table below, AAA is the highest possible rating. Investment grade \ufb01nancial assets are classi\ufb01ed within the range of AAA to BBB- ratings.
\nFinancial assets which fall outside this range are classi\ufb01ed as below BBB-.
\nC
Financial position
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\nGroup overview
Strategic report
Governance
Directors\u2019 remuneration report
European Embedded Value (EEV) basis results
Additional information
Financial statements
C Financial position
/ continued
\nC1 Group assets and liabilities by business type
continued
\n31 Dec 2022
$m
\nAsia and Africa
\nUnallocated
\nto a
\nsegment
\nElimination
\nof
\nintra-group
\ndebtors and
\ncreditors
\nGroup
\ntotal
\nInsurance
\nElimina-
\ntions
Total
\nWith-
\npro\ufb01ts
\nnote (i)
\nUnit-
\nlinked
\nnote (i)
\nOther
\nnote (i)
\nEastspring
\nDebt securities
\nnotes (ii)(iv)
\nSovereign debt
\nIndonesia
482
589
483
3
\u2013
1,557
\u2013
\u2013
1,557
\nSingapore
3,240
507
917
67
\u2013
4,731
\u2013
\u2013
4,731
\nThailand
\u2013
\u2013
1,456
\u2013
\u2013
1,456
\u2013
\u2013
1,456
\nUnited Kingdom
\u2013
4
\u2013
\u2013
\u2013
4
\u2013
\u2013
4
\nUnited States
19,983
54
1,854
\u2013
\u2013
21,891
\u2013
\u2013
21,891
\nVietnam
1
12
2,397
\u2013
\u2013
2,410
\u2013
\u2013
2,410
\nOther (predominantly Asia)
2,041
646
3,288
27
\u2013
6,002
\u2013
\u2013
6,002
\nSubtotal
25,747
1,812
10,395
97
\u2013
38,051
\u2013
\u2013
38,051
\nOther government bonds
\nAAA
1,480
85
108
\u2013
\u2013
1,673
\u2013
\u2013
1,673
\nAA+ to AA-
105
21
27
\u2013
\u2013
153
\u2013
\u2013
153
\nA+ to A-
746
139
248
\u2013
\u2013
1,133
\u2013
\u2013
1,133
\nBBB+ to BBB-
292
77
134
\u2013
\u2013
503
\u2013
\u2013
503
\nBelow BBB- and unrated
227
22
323
\u2013
\u2013
572
\u2013
\u2013
572
\nSubtotal
2,850
344
840
\u2013
\u2013
4,034
\u2013
\u2013
4,034
\nCorporate bonds
\nAAA
996
181
362
\u2013
\u2013
1,539
\u2013
\u2013
1,539
\nAA+ to AA-
1,951
385
1,556
\u2013
\u2013
3,892
\u2013
\u2013
3,892
\nA+ to A-
7,230
524
4,348
\u2013
\u2013
12,102
\u2013
\u2013
12,102
\nBBB+ to BBB-
7,885
1,325
3,974
1
\u2013
13,185
\u2013
\u2013
13,185
\nBelow BBB- and unrated
2,090
444
1,282
\u2013
\u2013
3,816
\u2013
\u2013
3,816
\nSubtotal
20,152
2,859
11,522
1
\u2013
34,534
\u2013
\u2013
34,534
\nAsset-backed securities
\nAAA
168
5
126
\u2013
\u2013
299
\u2013
\u2013
299
\nAA+ to AA-
6
1
3
\u2013
\u2013
10
\u2013
\u2013
10
\nA+ to A-
20
\u2013
14
\u2013
\u2013
34
\u2013
\u2013
34
\nBBB+ to BBB-
14
\u2013
9
\u2013
\u2013
23
\u2013
\u2013
23
\nBelow BBB- and unrated
2
1
1
\u2013
\u2013
4
\u2013
\u2013
4
\nSubtotal
210
7
153
\u2013
\u2013
370
\u2013
\u2013
370
\nTotal debt securities
48,959
5,022
22,910
98
\u2013
76,989
\u2013
\u2013
76,989
\nLoans
\nMortgage loans
\u2013
\u2013
140
\u2013
\u2013
140
\u2013
\u2013
140
\nPolicy loans
1,498
\u2013
422
\u2013
\u2013
1,920
\u2013
\u2013
1,920
\nOther loans
472
\u2013
4
\u2013
\u2013
476
\u2013
\u2013
476
\nTotal loans
1,970
\u2013
566
\u2013
\u2013
2,536
\u2013
\u2013
2,536
\nEquity securities and holdings in collective investment
\nschemes
\nDirect equities
13,063
11,379
2,139
61
\u2013
26,642
266
\u2013
26,908
\nCollective investment schemes
19,057
6,760
4,950
2
\u2013
30,769
2
\u2013
30,771
\nTotal equity securities and holdings in collective investment
\nschemes
32,120
18,139
7,089
63
\u2013
57,411
268
\u2013
57,679
\nOther \ufb01nancial investments
\nnote (iii)
\n1,793
379
2,816
107
\u2013
5,095
1,749
\u2013
6,844
\nTotal \ufb01nancial investments
\nnote (v)
\n84,842
23,540
33,381
268
\u2013
142,031
2,017
\u2013
144,048
\nInvestment properties
\u2013
\u2013
37
\u2013
\u2013
37
\u2013
\u2013
37
\nInvestments in joint ventures and associates accounted for
\nusing the equity method
\u2013
\u2013
1,601
314
\u2013
1,915
\u2013
\u2013
1,915
\nCash and cash equivalents
\nnote (vi)
\n1,038
749
1,791
127
\u2013
3,705
1,809
\u2013
5,514
\nReinsurers\u2019 share of insurance contract liabilities
\nnote C3.3
\n145
\u2013
2,662
\u2013
\u2013
2,807
\u2013
\u2013
2,807
\nOther assets
\nnote (vii)
\n1,156
154
9,665
713
(67)
11,621
3,409
(3,409)
11,621
\nTotal assets
87,181
24,443
49,137
1,422
(67)
162,116
7,235
(3,409)
165,942
\nShareholders\u2019 equity
\u2013
\u2013
14,407
1,058
\u2013
15,465
1,495
\u2013
16,960
\nNon-controlling interests
\u2013
\u2013
43
124
\u2013
167
\u2013
\u2013
167
\nTotal equity
\u2013
\u2013
14,450
1,182
\u2013
15,632
1,495
\u2013
17,127
\nContract liabilities and unallocated surplus of with-pro\ufb01ts
\nfunds
77,687
22,842
25,229
\u2013
\u2013
125,758
\u2013
\u2013
125,758
\nCore structural borrowings
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
4,261
\u2013
4,261
\nOperational borrowings
118
\u2013
86
15
\u2013
219
596
\u2013
815
\nOther liabilities
\nnote (viii)
\n9,376
1,601
9,372
225
(67)
20,507
883
(3,409)
17,981
\nTotal liabilities
87,181
24,443
34,687
240
(67)
146,484
5,740
(3,409)
148,815
\nTotal equity and liabilities
87,181
24,443
49,137
1,422
(67)
162,116
7,235
(3,409)
165,942
\n312
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31 Dec 2021
$m
\nAsia and Africa
\nUnallocated
\nto a
\nsegment
\nElimination
\nof
\nintra-group
\ndebtors and
\ncreditors
\nGroup
\ntotal
\nInsurance
\nElimina-
\ntions
Total
\nWith-
\npro\ufb01ts
\nnote (i)
\nUnit-
\nlinked
\nnote (i)
\nOther
\nnote (i)
\nEastspring
\nDebt securities
\nnotes (ii)(iv)
\nSovereign debt
\nIndonesia
414
598
609
11
\u2013
1,632
\u2013
\u2013
1,632
\nSingapore
3,684
550
1,068
126
\u2013
5,428
\u2013
\u2013
5,428
\nThailand
\u2013
\u2013
1,577
3
\u2013
1,580
\u2013
\u2013
1,580
\nUnited Kingdom
\u2013
7
\u2013
\u2013
\u2013
7
226
\u2013
233
\nUnited States
28,552
47
3,525
\u2013
\u2013
32,124
\u2013
\u2013
32,124
\nVietnam
\u2013
20
3,022
\u2013
\u2013
3,042
\u2013
\u2013
3,042
\nOther (predominantly Asia)
2,030
720
4,001
21
\u2013
6,772
\u2013
\u2013
6,772
\nSubtotal
34,680
1,942
13,802
161
\u2013
50,585
226
\u2013
50,811
\nOther government bonds
\u2013
\nAAA
1,472
86
246
\u2013
\u2013
1,804
\u2013
\u2013
1,804
\nAA+ to AA-
45
2
12
\u2013
\u2013
59
\u2013
\u2013
59
\nA+ to A-
667
119
304
\u2013
\u2013
1,090
\u2013
\u2013
1,090
\nBBB+ to BBB-
121
16
116
\u2013
\u2013
253
\u2013
\u2013
253
\nBelow BBB- and unrated
204
15
450
\u2013
\u2013
669
\u2013
\u2013
669
\nSubtotal
2,509
238
1,128
\u2013
\u2013
3,875
\u2013
\u2013
3,875
\nCorporate bonds
\u2013
\nAAA
1,222
236
411
\u2013
\u2013
1,869
\u2013
\u2013
1,869
\nAA+ to AA-
2,203
359
1,858
\u2013
\u2013
4,420
\u2013
\u2013
4,420
\nA+ to A-
9,046
675
5,294
\u2013
\u2013
15,015
\u2013
\u2013
15,015
\nBBB+ to BBB-
9,523
1,711
5,105
\u2013
\u2013
16,339
\u2013
\u2013
16,339
\nBelow BBB- and unrated
4,009
678
1,827
\u2013
\u2013
6,514
\u2013
\u2013
6,514
\nSubtotal
26,003
3,659
14,495
\u2013
\u2013
44,157
\u2013
\u2013
44,157
\nAsset-backed securities
\u2013
\nAAA
88
6
74
\u2013
\u2013
168
\u2013
\u2013
168
\nAA+ to AA-
6
1
4
\u2013
\u2013
11
\u2013
\u2013
11
\nA+ to A-
26
\u2013
17
\u2013
\u2013
43
\u2013
\u2013
43
\nBBB+ to BBB-
15
\u2013
9
\u2013
\u2013
24
\u2013
\u2013
24
\nBelow BBB- and unrated
2
2
1
\u2013
\u2013
5
\u2013
\u2013
5
\nSubtotal
137
9
105
\u2013
\u2013
251
\u2013
\u2013
251
\nTotal debt securities
63,329
5,848
29,530
161
\u2013
98,868
226
\u2013
99,094
\nLoans
\u2013
\nMortgage loans
\u2013
\u2013
150
\u2013
\u2013
150
\u2013
\u2013
150
\nPolicy loans
1,365
\u2013
368
\u2013
\u2013
1,733
\u2013
\u2013
1,733
\nOther loans
668
\u2013
11
\u2013
\u2013
679
\u2013
\u2013
679
\nTotal loans
2,033
\u2013
529
\u2013
\u2013
2,562
\u2013
\u2013
2,562
\nEquity securities and holdings in collective investment
\nschemes
\nDirect equities
10,290
12,812
2,286
84
\u2013
25,472
683
\u2013
26,155
\nCollective investment schemes
23,950
7,704
3,787
3
\u2013
35,444
2
\u2013
35,446
\nTotal equity securities and holdings in collective investment
\nschemes
34,240
20,516
6,073
87
\u2013
60,916
685
\u2013
61,601
\nOther \ufb01nancial investments
\nnote (iii)
\n1,561
149
2,318
106
\u2013
4,134
1,088
\u2013
5,222
\nTotal \ufb01nancial investments
\nnote (v)
\n101,163
26,513
38,450
354
\u2013
166,480
1,999
\u2013
168,479
\nInvestment properties
\u2013
\u2013
38
\u2013
\u2013
38
\u2013
\u2013
38
\nInvestments in joint ventures and associates accounted for
\nusing the equity method
\u2013
\u2013
1,878
305
\u2013
2,183
\u2013
\u2013
2,183
\nCash and cash equivalents
\nnote (vi)
\n905
911
1,444
181
\u2013
3,441
3,729
\u2013
7,170
\nReinsurers\u2019 share of insurance contract liabilities
\nnote C3.3
\n225
\u2013
9,528
\u2013
\u2013
9,753
\u2013
\u2013
9,753
\nOther assets
\nnote (vii)
\n1,184
166
9,191
759
(51)
11,249
3,608
(3,378)
11,479
\nTotal assets
103,477
27,590
60,529
1,599
(51)
193,144
9,336
(3,378)
199,102
\nShareholders\u2019 equity
\u2013
\u2013
14,289
1,120
\u2013
15,409
1,679
\u2013
17,088
\nNon-controlling interests
\u2013
\u2013
45
131
\u2013
176
\u2013
\u2013
176
\nTotal equity
\u2013
\u2013
14,334
1,251
\u2013
15,585
1,679
\u2013
17,264
\nContract liabilities and unallocated surplus of with-pro\ufb01ts
\nfunds
94,002
25,651
37,646
\u2013
\u2013
157,299
\u2013
\u2013
157,299
\nCore structural borrowings
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
6,127
\u2013
6,127
\nOperational borrowings
142
\u2013
106
18
\u2013
266
595
\u2013
861
\nOther liabilities
\nnote (viii)
\n9,333
1,939
8,443
330
(51)
19,994
935
(3,378)
17,551
\nTotal liabilities
103,477
27,590
46,195
348
(51)
177,559
7,657
(3,378)
181,838
\nTotal equity and liabilities
103,477
27,590
60,529
1,599
(51)
193,144
9,336
(3,378)
199,102
\n313
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\nGroup overview
Strategic report
Governance
Directors\u2019 remuneration report
European Embedded Value (EEV) basis results
Additional information
Financial statements
C Financial position
/ continued
\nC1 Group assets and liabilities by business type
continued
\nNotes
\n(i)
\u2018With-pro\ufb01ts\u2019 comprises the with-pro\ufb01ts assets and liabilities of the Hong Kong, Malaysia and Singapore operations. \u2018Unit-linked\u2019 comprises the assets and liabilities held in the unit-linked funds.
\n\u2018Other\u2019 includes assets and liabilities of other participating business and other non-linked shareholder-backed business.
\n(ii)
Of the Group\u2019s debt securities, the following amounts were held by the consolidated investment funds.
\n31 Dec 2022
\n$m
\n31 Dec 2021
\n$m
\nDebt securities held by consolidated investment funds
11,899
15,076
\n(iii)
Other \ufb01nancial investments comprise derivative assets and deposits.
\n(iv)
The credit ratings, information or data contained in this report which are attributed and speci\ufb01cally provided by Standard & Poor\u2019s, Moody\u2019s and Fitch Solutions and their respective a\ufb03liates and
\nsuppliers (\u2018Content Providers\u2019) is referred to here as the \u2018Content\u2019. Reproduction of any Content in any form is prohibited except with the prior written permission of the relevant party. The Content
\nProviders 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
\nof 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
\nincome or lost pro\ufb01t 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
\nthat 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
\nas investment advice.
\n(v)
Of the total \ufb01nancial investments of $144,048 million as at 31 December 2022 (31 December 2021: $168,479 million), $68,955 million (31 December 2021: $71,524 million) are expected to
\nbe recovered within one year, including equity securities and holdings in collective investment schemes.
\n(vi)
Cash and cash equivalents consist of cash at bank and in hand, deposits held at call with banks, treasury bills and other short-term highly liquid investments with less than 90 days maturity from
\nthe date of acquisition and are analysed as follows:
\n31 Dec 2022
\n$m
\n31 Dec 2021
\n$m
\nCash
1,878
1,902
\nCash equivalents
3,636
5,268
\nTotal cash and cash equivalents
5,514
7,170
\nAnalysed as:
\nHeld by the Group\u2019s holding and non-regulated entities and available for general use
1,809
3,729
\nOther funds not available for general use by the Group, including funds held for the bene\ufb01t of policyholders
3,705
3,441
\nTotal cash and cash equivalents
5,514
7,170
\n*
The Group\u2019s cash and cash equivalents are held in the following currencies as at 31 December 2022: USD 45 per cent, GBP 11 per cent, HKD 5 per cent, SGD 5 per cent, MYR 14 per cent and
\nother currencies 20 per cent (31 December 2021: USD 59 per cent, GBP 7 per cent, HKD 3 per cent, SGD 3 per cent, MYR 9 per cent and other currencies 19 per cent).
\n(vii)
\u2018Other assets\u2019 at 31 December 2022, comprise goodwill, intangibles (including deferred acquisition costs), property, plant and equipment (see note C11), tax balances and accrued investment
\nincome and other debtors, which are analysed as follows:
\n31 Dec 2022
\n$m
\n31 Dec 2021
\n$m
\nInterest receivable
885
872
\nOther accrued income
250
299
\nTotal accrued investment income
1,135
1,171
\nAmounts receivable due from:
\nPolicyholders
644
686
\nIntermediaries
\u2013
4
\nReinsurers
192
226
\nOther sundry debtors
858
863
\nTotal other debtors
1,694
1,779
\nTotal accrued investment income and other debtors
2,829
2,950
\nAnalysed as:
\nExpected to be settled within one year
2,700
2,761
\nExpected to be settled beyond one year
129
189
\n2,829
2,950
\n(viii)
Within \u2018Other liabilities\u2019 at 31 December 2022 are accruals, deferred income and other liabilities of $8,777 million (31 December 2021: $7,983 million), which are analysed as follows (detailed
\nmaturity analysis is provided in note C2.3):
\n31 Dec 2022
\n$m
\n31 Dec 2021
\n$m
\nAccruals and deferred income
539
565
\nCreditors arising from direct insurance and reinsurance operations
3,000
1,120
\nInterest payable
59
77
\nFunds withheld under reinsurance agreements
2,040
1,545
\nOther creditors
3,139
4,676
\nTotal accruals, deferred income and other creditors
8,777
7,983
\n314
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C2 Fair value measurement
\nThe Group uses the trade date method to account for regular purchases and sales of \ufb01nancial assets. The Group holds \ufb01nancial assets in
\naccordance with IAS 39, whereby subject to speci\ufb01c criteria, \ufb01nancial instruments are required to be accounted for under one of the following
\ncategories:
\n >
Financial assets and liabilities at fair value through pro\ufb01t or loss (FVTPL): this comprises assets and liabilities designated by management as
\nFVTPL on inception and derivatives. This includes instruments that are managed and the performance evaluated on a fair value basis, including
\nliabilities related to net assets attributable to unit holders of consolidated investment funds and policyholder liabilities for investment contracts
\nwithout discretionary participation features. All investments within this category are measured at fair value with all changes thereon being
\nrecognised in investment return in the income statement.
\n>
Financial investments on an available-for-sale (AFS) basis: this comprises assets that are designated by management as AFS and/or do not fall
\ninto any of the other categories. These assets are initially recognised at fair value plus attributable transaction costs and are subsequently
\nmeasured at fair value. Interest and/or dividend income is recognised in the income statement. Unrealised gains and losses are recognised in
\nother comprehensive income. Upon disposal or impairment, accumulated unrealised gains and losses are transferred from other comprehensive
\nincome to the income statement as realised gains or losses. Subsequent to the demerger of Jackson in September 2021, the Group has
\ndesignated its retained interest in Jackson (as described in note D1.2) as AFS equity securities.
\n >
Loans and receivables: except for those designated as FVTPL or AFS, these instruments comprise non-quoted investments that have \ufb01xed or
\ndeterminable payments, including loans collateralised by mortgages, deposits, loans to policyholders and other unsecured loans and
\nreceivables. These investments are initially recognised at fair value plus transaction costs. Subsequently, these instruments are carried at
\namortised cost using the e\ufb00ective interest method. The e\ufb00ective interest rate is the rate that exactly discounts estimated future cash receipts
\nthrough the expected life of the \ufb01nancial instrument or, when appropriate, a shorter period to the net carrying amount of the \ufb01nancial asset.
\nWhen assets held at amortised cost are subject to impairment testing, estimated future cash \ufb02ows are compared to the carrying value of the
\nasset. The estimated future cash \ufb02ows are discounted using the \ufb01nancial asset\u2019s original or variable e\ufb00ective interest rate and exclude credit
\nlosses that have not yet been incurred. If, in subsequent periods, an impaired loan or receivable recovers in value (in part or in full) and this
\nrecovery can be objectively related to an event occurring after the impairment, then any amount determined to have been recovered is reversed
\nthrough the income statement.
\nC2.1
Determination of fair value
\nThe fair values of the \ufb01nancial instruments for which fair valuation is required under IFRS Standards are determined by the use of quoted market
\nprices for exchange-quoted investments, or by using quotations from independent third parties, such as brokers and pricing services or by using
\nappropriate valuation techniques.
\nThe estimated fair value of derivative \ufb01nancial instruments re\ufb02ects the estimated amount the Group would receive or pay in an arm\u2019s-length
\ntransaction. This amount is determined using quoted prices if exchange listed, quotations from independent third parties or valued internally
\nusing standard market practices.
\nOther than the loans which have been designated at fair value through pro\ufb01t or loss, the carrying value of loans and receivables is presented net
\nof provisions for impairment. The fair value of loans is estimated from discounted cash \ufb02ows expected to be received.
\nThe fair value of the subordinated and senior debt issued by the parent company is determined using quoted prices from independent third
\nparties.
\nThe fair value of \ufb01nancial liabilities (other than subordinated debt, senior debt and derivative \ufb01nancial instruments) is determined using
\ndiscounted cash \ufb02ows of the amounts expected to be paid.
\nValuation approach for level 2 fair valued assets and liabilities
\nA signi\ufb01cant proportion of the Group\u2019s level 2 assets are corporate bonds, structured securities and other non-national government debt securities.
\nThese assets, in line with market practice, are generally valued using a designated independent pricing service or quote from third-party brokers.
\nThese valuations are subject to a number of monitoring controls, such as comparison to multiple pricing sources where available, monthly price
\nvariances, stale price reviews and variance analysis on prices achieved on subsequent trades.
\nWhen prices are not available from pricing services, quotes are sourced directly from brokers. Prudential seeks to obtain a number of quotes
\nfrom di\ufb00erent brokers so as to obtain the most comprehensive information available on their executability. The selected quote is the one which
\nbest represents an executable quote for the security at the measurement date.
\nGenerally, no adjustment is made to the prices obtained from independent third parties. Adjustments are made in only limited circumstances,
\nwhere it is determined that the third-party valuations obtained do not re\ufb02ect fair value (eg either because the value is stale and/or the values are
\nextremely diverse in range). Securities valued in such manner are classi\ufb01ed as level 3 where these signi\ufb01cant inputs are not based on observable
\nmarket data.
\nValuation approach for level 3 fair valued assets and liabilities
\nInvestments valued using valuation techniques include \ufb01nancial investments which by their nature do not have an externally quoted price based
\non regular trades, and \ufb01nancial investments for which markets are no longer active as a result of market conditions, eg market illiquidity.
\nThe Group\u2019s valuation policies, procedures and analyses for instruments categorised as level 3 are overseen by Business Unit committees as
\npart of the Group\u2019s wider \ufb01nancial reporting governance processes. The procedures undertaken include approval of valuation methodologies,
\nveri\ufb01cation processes, and resolution of signi\ufb01cant or complex valuation issues. In addition, the Group has minimum standards for independent
\nprice veri\ufb01cation to ensure valuation accuracy is regularly independently veri\ufb01ed. Adherence to this policy is monitored across the business units.
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European Embedded Value (EEV) basis results
Additional information
Financial statements
C Financial position
/ continued
\nC2 Fair value measurement
continued
\nC2.2
Fair value measurement hierarchy of Group assets and liabilities
\n(a) Assets and liabilities carried at fair value on the statement of \ufb01nancial position
\nThe table below shows the assets and liabilities carried at fair value analysed by level of the IFRS 13 \u2018Fair Value Measurement\u2019 de\ufb01ned fair value
\nhierarchy. This hierarchy is based on the inputs to the fair value measurement and re\ufb02ects the lowest level input that is signi\ufb01cant to that
\nmeasurement.
\nAll assets and liabilities held at fair value are classi\ufb01ed as fair value through pro\ufb01t or loss, except for $266 million of \ufb01nancial assets classi\ufb01ed as
\navailable-for-sale at 31 December 2022 (31 December 2021: $909 million), all of which (31 December 2021: $683 million) related to the Group\u2019s
\nretained interest in Jackson\u2019s equity securities. All assets and liabilities held at fair value are measured on a recurring basis. As of 31 December
\n2022, the Group did not have any \ufb01nancial instruments that are measured at fair value on a non-recurring basis.
\nFinancial instruments at fair value
\n31 Dec 2022
$m
\nLevel 1
Level 2
Level 3
\nQuoted prices
\n(unadjusted)
\nin active
\nmarkets
\nValuation based
\non signi\ufb01cant
\nobservable
\nmarket inputs
\nnote (i)
\nValuation based
\non signi\ufb01cant
\nunobservable
\nmarket inputs
\nnote (ii)
\nTotal
\nLoans
\u2013
447
3
450
\nEquity securities and holdings in collective investment schemes
49,725
7,130
824
57,679
\nDebt securities
57,215
19,736
38
76,989
\nDerivative assets
82
487
\u2013
569
\nDerivative liabilities
(778)
(223)
\u2013
(1,001)
\nTotal \ufb01nancial investments, net of derivative liabilities
106,244
27,577
865
134,686
\nInvestment contract liabilities without discretionary participation features
\u2013
(741)
\u2013
(741)
\nNet asset value attributable to unit holders of consolidated investment funds
(4,193)
\u2013
\u2013
(4,193)
\nTotal \ufb01nancial instruments at fair value
102,051
26,836
865
129,752
\nPercentage of total (%)
78%
21%
1%
100%
\nAnalysed by business type:
\nFinancial investments net of derivative liabilities, at fair value
\nWith-pro\ufb01ts
65,880
14,605
748
81,233
\nUnit-linked
21,319
1,851
4
23,174
\nNon-linked shareholder-backed business
19,045
11,121
113
30,279
\nTotal \ufb01nancial investments net of derivative liabilities, at fair value
106,244
27,577
865
134,686
\nPercentage of total (%)
78%
21%
1%
100%
\nTotal \ufb01nancial investments net of derivative liabilities, at fair value
106,244
27,577
865
134,686
\nOther \ufb01nancial liabilities at fair value
(4,193)
(741)
\u2013
(4,934)
\nTotal \ufb01nancial instruments at fair value
102,051
26,836
865
129,752
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31 Dec 2021
$m
\nLevel 1
Level 2
Level 3
\nQuoted prices
\n(unadjusted)
\nin active
\nmarkets
\nValuation based
\non signi\ufb01cant
\nobservable
\nmarket inputs
\nnote (i)
\nValuation based
\non signi\ufb01cant
\nunobservable
\nmarket inputs
\nnote (ii)
\nTotal
\nLoans
\u2013
616
5
621
\nEquity securities and holdings in collective investment schemes
54,107
6,917
577
61,601
\nDebt securities
76,049
22,987
58
99,094
\nDerivative assets
359
122
\u2013
481
\nDerivative liabilities
(146)
(116)
\u2013
(262)
\nTotal \ufb01nancial investments, net of derivative liabilities
130,369
30,526
640
161,535
\nInvestment contract liabilities without discretionary participation features
\u2013
(814)
\u2013
(814)
\nNet asset value attributable to unit holders of consolidated investment funds
(5,618)
(46)
\u2013
(5,664)
\nTotal \ufb01nancial instruments at fair value
124,751
29,666
640
155,057
\nPercentage of total (%)
81%
19%
0%
100%
\nAnalysed by business type:
\nFinancial investments net of derivative liabilities, at fair value
\nWith-pro\ufb01ts
82,489
15,438
506
98,433
\nUnit-linked
24,024
2,343
5
26,372
\nNon-linked shareholder-backed business
23,856
12,745
129
36,730
\nTotal \ufb01nancial investments net of derivative liabilities, at fair value
130,369
30,526
640
161,535
\nPercentage of total (%)
81%
19%
0%
100%
\nTotal \ufb01nancial investments net of derivative liabilities, at fair value
130,369
30,526
640
161,535
\nOther \ufb01nancial liabilities at fair value
(5,618)
(860)
\u2013
(6,478)
\nTotal \ufb01nancial instruments at fair value
124,751
29,666
640
155,057
\nNotes
\n(i)
Of the total level 2 debt securities of $19,736 million at 31 December 2022 (31 December 2021: $22,987 million), $37 million (31 December 2021: $24 million) are valued internally.
\n(ii)
At 31 December 2022, the Group held $865 million (31 December 2021: $640 million) of net \ufb01nancial instruments at fair value within level 3. This represents less than 1 per cent of the total
\nfair-valued \ufb01nancial assets, net of \ufb01nancial liabilities, for both years and comprises the following items:
\n\u2013
Equity securities and holdings in collective investment schemes of $824 million (31 December 2021: $557 million) consisting primarily of property and infrastructure funds held by the
\nparticipating funds, which are externally valued using the net asset value of the invested entities. Equity securities of $1 million (31 December 2021: $1 million) are internally valued,
\nrepresenting less than 0.1 per cent for all periods of the total fair-valued \ufb01nancial assets net of \ufb01nancial liabilities. Internal valuations are inherently more subjective than external valuations;
\nand
\n\u2013
Other sundry individual \ufb01nancial instruments of a net asset of $41 million (31 December 2021: net asset of $63 million).
\nOf the net \ufb01nancial instruments of $865 million at 31 December 2022 (31 December 2021: $640 million) referred to above:
\n\u2013
A net asset of $752 million (31 December 2021: $511 million) is held by the Group\u2019s with-pro\ufb01ts and unit-linked funds and therefore shareholders\u2019 pro\ufb01t and equity are not impacted by
\nmovements in the valuation of these \ufb01nancial instruments; and
\n\u2013
A net asset of $113 million (31 December 2021: $129 million) is held to support non-linked shareholder-backed business, of which $111 million (31 December 2021: $112 million) are
\nprimarily private equity investments and corporate bonds externally valued using the net asset value of the invested entities and external prices adjusted to re\ufb02ect the speci\ufb01c known
\nconditions relating to these bonds (eg distressed securities) and are therefore inherently less subjective than internal valuations. If the value of all these level 3 \ufb01nancial instruments
\ndecreased by 10 per cent, the change in valuation would be $(11) million (31 December 2021: $(13) million), which would reduce shareholders\u2019 equity by this amount before tax.
\nAll\u00a0of\u00a0this\u00a0amount would pass through the income statement substantially as part of short-term \ufb02uctuations in investment returns outside of adjusted operating pro\ufb01t.
\n(b) Transfers into and transfers out of levels
\nThe Group\u2019s policy is to recognise transfers into and out of levels as of the end of each reporting period except for material transfers which are
\nrecognised 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
\nmaterial change in the observed valuation inputs or a change in the level of trading activities of the securities.
\nDuring 2022, the transfers between levels within the portfolios were primarily transfers from level 1 to level 2 of $2,640 million (31 December
\n2021: $3,789 million) and transfers from level 2 to level 1 of $1,982 million (31 December 2021: $1,742 million). These transfers primarily re\ufb02ect
\nthe change in the observed valuation inputs of equity securities and debt securities and, in certain cases, the change in the level of trading
\nactivities of the securities. There were transfers from level 3 to level 2 of $15 million in the year (31 December 2021: $12 million) and no transfers
\ninto level 3 (31 December 2021: $30 million).
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Additional information
Financial statements
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/ continued
\nC2 Fair value measurement
continued
\nC2.2
Fair value measurement hierarchy of Group assets and liabilities
continued
\nReconciliation of movements in level 3 assets and liabilities measured at fair value
\nThe following table reconciles the value of level 3 fair valued assets and liabilities at the beginning and end of the years shown.
\nTotal investment return recorded in the income statement represents interest and dividend income, realised gains and losses, unrealised gains
\nand losses on the assets classi\ufb01ed at fair value through pro\ufb01t and loss and foreign exchange movements on an individual entity\u2019s overseas
\ninvestments. Total gains and losses recorded in other comprehensive income comprises the translation of investments into the Group\u2019s
\npresentational currency of USD.
\n2022
$m
\nLoans
\nEquity securities
\nand holdings in
\ncollective
\ninvestment
\nschemes
\nDebt
\nsecurities
\nGroup
\ntotal
\nBalance at 1 Jan
5
577
58
640
\nTotal losses in income statement
\nnote
\n(2)
(31)
(2)
(35)
\nTotal losses recorded in other comprehensive income
\u2013
(6)
(3)
(9)
\nPurchases and other additions
\u2013
305
\u2013
305
\nSales
\u2013
(21)
\u2013
(21)
\nTransfers out of level 3
\u2013
\u2013
(15)
(15)
\nBalance at 31 Dec
3
824
38
865
\n2021
$m
\nLoans
\nEquity securities
\nand holdings in
\ncollective
\ninvestment
\nschemes
\nDebt
\nsecurities
\nGroup
\ntotal
\nBalance at 1 Jan
6
445
33
484
\nTotal (losses) gains in income statement
\nnote
\n(1)
6
(3)
2
\nTotal losses recorded in other comprehensive income
\u2013
(5)
(2)
(7)
\nPurchases and other additions
\u2013
143
\u2013
143
\nTransfers (out of) into level 3
\u2013
(12)
30
18
\nBalance at 31 Dec
5
577
58
640
\nNote
\nOf the total net losses in the income statement of $(35) million in 2022 (2021: net gains of $2 million), $(12) million (2021: $2 million) relates to net unrealised gains and losses of \ufb01nancial instruments
\nstill held at the end of the year, which can be analysed as follows:
\n2022
\n$m
\n2021
\n$m
\nLoans
(2)
(1)
\nEquity securities and holdings in collective investment schemes
(8)
6
\nDebt securities
(2)
(3)
\nTotal net (losses) gains
(12)
2
\n(c) Assets and liabilities at amortised cost and their fair value
\nThe table below shows the \ufb01nancial assets and liabilities carried at amortised cost on the statement of \ufb01nancial position and their fair value. Cash
\ndeposits, accrued income, other debtors, accruals, deferred income and other liabilities are excluded from the analysis below, as these are carried
\nat amortised cost which approximates fair value. The carrying value of investment contracts with discretionary participation features is on an
\nIFRS\u00a04 basis, which is also excluded from the analysis below, as it is impractical to determine the fair value of these contracts due to the lack of
\na\u00a0reliable basis to measure participation features.
\n31 Dec 2022
$m
31 Dec 2021
$m
\nCarrying
\nvalue
\nFair
\nvalue
\nCarrying
\nvalue
\nFair
\nvalue
\nAssets
\nLoans
2,086
2,207
1,941
2,152
\nLiabilities
\nCore structural borrowings of shareholder-\ufb01nanced businesses
(4,261)
(3,834)
(6,127)
(6,565)
\nOperational borrowings (excluding lease liabilities)
(516)
(516)
(514)
(514)
\nObligations under funding, securities lending and sale and repurchase agreements
(582)
(582)
(223)
(223)
\nTotal net \ufb01nancial liabilities at amortised cost
(3,273)
(2,725)
(4,923)
(5,150)
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The fair value of the assets and liabilities in the table above, with the exception of the subordinated and senior debt issued by the parent company,
\nhas been estimated from the discounted cash \ufb02ows expected to be received or paid. All the assets and liabilities in the table above have been
\nclassi\ufb01ed within level 2 at 31 December 2022 and 2021, re\ufb02ecting the observability of the inputs used to derive their fair value. The fair value of
\nthe subordinated and senior debt issued by the parent company is determined using quoted prices from independent third parties.
\nC2.3
Additional information on \ufb01nancial instruments
\n(a) Financial risk
\nLiquidity analysis
\nContractual maturities of \ufb01nancial liabilities on an undiscounted cash \ufb02ow basis
\nThe following table sets out the contractual maturities for applicable classes of \ufb01nancial liabilities, excluding derivative liabilities and investment
\ncontracts that are separately presented. The \ufb01nancial liabilities are included in the column relating to the contractual maturities of the
\nundiscounted cash \ufb02ows (including contractual interest payments) based on the earliest period in which the Group can be required to pay
\nassuming conditions are consistent with those of year end.
\n31 Dec 2022
$m
\nTotal
\ncarrying
\nvalue
\nContractual maturity pro\ufb01le for \ufb01nancial liabilities
\n1 year
\nor less
\n1-2
\nyears
\n2-5
\nyears
\n5-10
\nyears
\n10-15
\nyears
\n15-20
\nyears
\nOver
\n20 years
\nNo stated
\nmaturity
\nTotal
\nundiscounted
\ncash \ufb02ows
\nCore structural borrowings of
\nshareholder-\ufb01nanced
\nbusinesses
\nnote C5.1
\n4,261
509
124
370
2,598
1,024
\u2013
\u2013
750
5,375
\nLease liabilities under IFRS 16
\nnote C5.2
\n299
101
76
127
28
9
\u2013
\u2013
\u2013
341
\nOther operational borrowings
\nnote C5.2
\n516
516
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
516
\nObligations under funding,
\nsecurities lending and sale and
\nrepurchase agreements
582
582
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
582
\nAccruals, deferred income and
\nother liabilities
8,777
6,258
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
2,519
8,777
\nNet asset value attributable to unit
\nholders of consolidated unit
\ntrusts and similar funds
4,193
4,193
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
4,193
\nTotal \ufb01nancial liabilities
18,628
12,159
200
497
2,626
1,033
\u2013
\u2013
3,269
19,784
\n31 Dec 2021
$m
\nTotal
\ncarrying
\nvalue
\nContractual maturity pro\ufb01le for \ufb01nancial liabilities
\n1 year
\nor less
\n1-2
\nyears
\n2-5
\nyears
\n5-10
\nyears
\n10-15
\nyears
\n15-20
\nyears
\nOver
\n20 years
\nNo stated
\nmaturity
\nTotal
\nundiscounted
\ncash \ufb02ows
\nCore structural borrowings of
\nshareholder-\ufb01nanced
\nbusinesses
\nnote C5.1
\n6,127
1,872
551
702
1,817
1,642
\u2013
\u2013
750
7,334
\nLease liabilities under IFRS 16
\nnote C5.2
\n347
110
81
135
45
11
\u2013
\u2013
\u2013
382
\nOther operational borrowings
\nnote C5.2
\n514
514
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
514
\nObligations under funding,
\nsecurities lending and sale and
\nrepurchase agreements
223
223
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
223
\nAccruals, deferred income and
\nother liabilities
7,983
5,972
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
2,011
7,983
\nNet asset value attributable to unit
\nholders of consolidated unit
\ntrusts and similar funds
5,664
5,664
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
5,664
\nTotal \ufb01nancial liabilities
20,858
14,355
632
837
1,862
1,653
\u2013
\u2013
2,761
22,100
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Additional information
Financial statements
C Financial position
/ continued
\nC2 Fair value measurement
continued
\nC2.3
Additional information on \ufb01nancial instruments
continued
\nMaturity analysis of derivatives
\nThe following table shows the carrying value of the gross and net derivative positions.
\nCarrying value of net derivatives
$m
\nDerivative
\nassets
\nDerivative
\nliabilities
\nNet
\nderivative
\nposition
\n31 Dec 2022
569
(1,001)
(432)
\n31 Dec 2021
481
(262)
219
\nAll net derivatives have been included at fair value due within one year or less, representing the basis on which they are managed (ie to manage
\nprincipally asset or liability value exposures). The Group has no cash \ufb02ow hedges and, in general, contractual maturities are not considered
\nessential for an understanding of the timing of the cash \ufb02ows for these instruments.
\nMaturity analysis of investment contracts
\nThe table below shows the maturity pro\ufb01le for investment contracts based on undiscounted cash \ufb02ow projections of expected bene\ufb01t payments.
\nMaturity pro\ufb01le for investment contracts
$m
\nTotal
\ncarrying
\nvalue
\n1 year
\nor less
\n1-5
\nyears
\n5-10
\nyears
\n10-15
\nyears
\n15-20
\nyears
\nOver
\n20 years
\nTotal
\nundiscounted
\ncash \ufb02ows
\n31 Dec 2022
420
11
369
98
22
8
4
512
\n31 Dec 2021
459
14
442
63
16
6
2
543
\nThe undiscounted cash \ufb02ows in the maturity pro\ufb01le shown above excludes contracts which have no stated maturity but which are repayable on
\ndemand.
\nMost investment contracts have options to surrender early, often subject to surrender or other penalties. Therefore, most contracts can be said
\nto have a contractual maturity of less than one year, but the additional charges and term of the contracts mean these are unlikely to be exercised
\nin practice and the more useful information is to present information on expected payment.
\nThe vast majority of the Group\u2019s \ufb01nancial assets are held to back the Group\u2019s policyholder liabilities. Although asset/liability matching is an
\nimportant component of managing policyholder liabilities (both those classi\ufb01ed as insurance and those classi\ufb01ed as investments), this pro\ufb01le is
\nmainly relevant for managing market risk rather than liquidity risk. Within each business unit, this asset/liability matching is performed on a
\nportfolio-by-portfolio basis.
\nIn terms of liquidity risk, a large proportion of the policyholder liabilities contain discretionary surrender values or surrender charges, meaning
\nthat many of the Group\u2019s liabilities are expected to be held for the long term. Much of the Group\u2019s investment portfolios are in marketable
\nsecurities, which can therefore be converted quickly to liquid assets.
\nFor the reasons provided above, an analysis of the Group\u2019s assets by contractual maturity is not considered meaningful to evaluate the nature
\nand extent of the Group\u2019s liquidity risk.
\nCredit risk
\nThe Group\u2019s maximum exposure to credit risk of \ufb01nancial instruments before any allowance for collateral or allocation of losses to policyholders is
\nrepresented by the carrying value of \ufb01nancial instruments on the balance sheet that have exposures to credit risk comprising cash and cash
\nequivalents, deposits, debt securities, loans and derivative assets, accrued investment income and other debtors. Further details of collateral in
\nplace in relation to derivatives, securities lending, repurchase and reverse repurchase agreements and other transactions are provided in note (c)
\nbelow. The Group\u2019s exposure to credit risk is further discussed in the Risk review report.
\nOf the total loans and receivables held at 31 December 2022, $6 million (31 December 2021: $7 million) are past their due date but are not
\nimpaired, of which $1 million are less than one year past their due date (31 December 2021: $2 million). The Group expects full recovery of these
\nloans and receivables.
\nThere are no \ufb01nancial assets that would have been past due or impaired had the terms not been renegotiated in both years.
\nIn addition, the Group did not take possession of any other collateral held as security in both years.
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Foreign exchange risk
\nAs at 31 December 2022, the Group held 27 per cent (31 December 2021: 26 per cent) of its \ufb01nancial assets and 64 per cent (31 December 2021:
\n63 per cent) of its \ufb01nancial liabilities in currencies mainly USD, other than the functional currency of the relevant business units or the currency to
\nwhich the functional currency is pegged (eg \ufb01nancial assets and liabilities of USD denominated business in Hong Kong). The exchange risks
\ninherent in these exposures are mitigated through the use of derivatives, mainly forward currency contracts and currency swaps as described in
\nnote (b) below.
\nThe amount of exchange gain recognised in the income statement in 2022, except for those arising on \ufb01nancial instruments measured at fair
\nvalue through pro\ufb01t or loss, is $234 million (2021: loss of $(132) million).
\n(b) Derivatives and hedging
\nDerivative \ufb01nancial instruments are used to reduce or manage investment, interest rate and currency exposures, to facilitate e\ufb03cient portfolio
\nmanagement and for investment purposes.
\nThe Group does not regularly seek to apply fair value or cash \ufb02ow hedging treatment under IAS 39. The Group has no net investment, fair value
\nor cash \ufb02ow hedges under IAS 39 at 31 December 2022 and 2021. All derivatives that are not designated as hedging instruments are carried at fair
\nvalue, with movements in fair value being recorded in the income statement.
\nEmbedded derivatives are embedded within other non-derivative host \ufb01nancial instruments and insurance contracts to create hybrid
\ninstruments. Embedded derivatives meeting the de\ufb01nition of an insurance contract are accounted for under IFRS 4. Where economic
\ncharacteristics and risks of the embedded derivatives are not closely related to the economic characteristics and risks of the host instrument, and
\nwhere the hybrid instrument is not measured at fair value with the changes in fair value recognised in the income statement, the embedded
\nderivative is required to be bifurcated and carried at fair value as a derivative measured in accordance with IAS 39.
\nIn addition, the Group applies the option under IFRS 4 to not separate and fair value surrender options embedded in host contracts and
\nwith-pro\ufb01ts investment contracts whose strike price is either a \ufb01xed amount or a \ufb01xed amount plus interest.
\nDerivatives held and their purpose
\nThe Group enters into a variety of exchange traded and over-the-counter derivative \ufb01nancial instruments, including futures, options, forward
\ncontracts, swaps and swaptions.
\nAll over-the-counter derivative transactions are conducted under standardised ISDA (International Swaps and Derivatives Association Inc)
\nmaster agreements and collateral agreements are in place between the individual entities and relevant counterparties under each of these
\nmarket master agreements.
\nDerivatives are used for e\ufb03cient portfolio management to obtain cost e\ufb00ective and management of exposure to various markets in
\naccordance with the Group\u2019s investment strategies and to manage exposure to interest rate, currency, credit and other business risks. The Group
\nalso uses interest rate derivatives to reduce exposure to interest rate volatility.
\n(c) Derecognition, collateral and o\ufb00setting
\nDerecognition of \ufb01nancial assets and liabilities
\nThe Group\u2019s policy is to derecognise \ufb01nancial assets when it is deemed that substantially all the risks and rewards of ownership have been
\ntransferred.
\nThe Group derecognises \ufb01nancial liabilities only when the obligation speci\ufb01ed in the contract is discharged, cancelled or has expired.
\nReverse repurchase agreements
\nThe Group is party to various reverse repurchase agreements under which securities are purchased from third parties with an obligation to resell
\nthe securities. The securities are not recognised as investments in the statement of \ufb01nancial position but the right to receive the cash paid is
\nrecognised as deposits.
\nThe Group has entered into reverse repurchase transactions under which it purchased securities and had taken on the obligation to resell the
\nsecurities. At 31 December 2022, the fair value of the collateral held in respect of these transactions, which is represented by the purchased
\nsecurities, was $3,244 million (31 December 2021: $2,149 million).
\nSecurities lending and repurchase agreements
\nThe Group is also party to various securities lending agreements (including repurchase agreements) under which securities are loaned to third
\nparties on a short-term basis. The loaned securities are not derecognised; rather, they continue to be recognised within the appropriate investment
\nclassi\ufb01cation. To the extent cash collateral is received it is recognised on the statement of \ufb01nancial position with the obligation to repay the cash
\npaid recognised as a liability. Other collateral is not recognised.
\nAt 31 December 2022, the Group had $1,571 million (31 December 2021: $854 million) of lent securities and assets subject to repurchase
\nagreements. The cash and securities collateral held or pledged under such agreements were $1,679 million (31 December 2021: $913 million).
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\nGroup overview
Strategic report
Governance
Directors\u2019 remuneration report
European Embedded Value (EEV) basis results
Additional information
Financial statements
C Financial position
/ continued
\nC2 Fair value measurement
continued
\nC2.3
Additional information on \ufb01nancial instruments
continued
\nCollateral and pledges under derivative transactions
\nAt 31 December 2022, the Group had pledged $62 million (31 December 2021: $99 million) for liabilities and held collateral of $234 million
\n(31 December 2021: $50 million) in respect of over-the-counter derivative transactions. These transactions are conducted under terms that are
\nusual and customary to collateralised transactions including, where relevant, standard securities lending and repurchase agreements.
\nThe Group has entered into collateral arrangements in relation to over-the-counter derivative transactions, which permit sale or re-pledging of
\nunderlying collateral. The Group has not sold any collateral held or re-pledged any collateral.
\nAll over-the-counter derivative transactions are conducted under standardised International Swaps and Derivatives Association (ISDA) master
\nagreements. The collateral management for these transactions is conducted under the usual and customary terms and conditions set out in the
\nCredit Support Annex to the ISDA master agreement.
\nO\ufb00setting assets and liabilities
\nThe Group\u2019s derivative instruments, repurchase agreements and securities lending agreements are subject to master netting arrangements and
\ncollateral arrangements. A master netting arrangement with a counterparty creates a right of o\ufb00set for amounts due to and due from that same
\ncounterparty that is enforceable in the event of a default or bankruptcy. The Group recognises amounts subject to master netting arrangements
\non a gross basis within the consolidated balance sheets.
\nThe following tables present the gross and net information about the Group\u2019s \ufb01nancial instruments subject to master netting arrangements:
\n31 Dec 2022
$m
\nGross amount
\nincluded in the
\nbalance sheet
\nnote (i)
\nRelated amounts not o\ufb00set in the balance sheet
\nNet
\namount
\nnote (iv)
\nFinancial
\ninstruments
\nnote (ii)
\nCash
\ncollateral
\nSecurities
\ncollateral
\nnote (iii)
\nFinancial assets:
\nDerivative assets
457
(179)
(217)
\u2013
61
\nReverse repurchase agreements
3,174
\u2013
\u2013
(3,174)
\u2013
\nTotal \ufb01nancial assets
3,631
(179)
(217)
(3,174)
61
\nFinancial liabilities:
\nDerivative liabilities
(284)
179
27
6
(72)
\nSecurities lending and repurchase agreements
(582)
\u2013
13
566
(3)
\nTotal \ufb01nancial liabilities
(866)
179
40
572
(75)
\n31 Dec 2021
$m
\nGross amount
\nincluded in the
\nbalance sheet
\nnote (i)
\nRelated amounts not o\ufb00set in the balance sheet
\nNet
\namount
\nnote (iv)
\nFinancial
\ninstruments
\nnote (ii)
\nCash
\ncollateral
\nSecurities
\ncollateral
\nnote (iii)
\nFinancial assets:
\nDerivative assets
170
(94)
(31)
(1)
44
\nReverse repurchase agreements
2,135
\u2013
\u2013
(2,134)
1
\nTotal \ufb01nancial assets
2,305
(94)
(31)
(2,135)
45
\nFinancial liabilities:
\nDerivative liabilities
(165)
94
63
\u2013
(8)
\nSecurities lending and repurchase agreements
(222)
\u2013
153
69
\u2013
\nTotal \ufb01nancial liabilities
(387)
94
216
69
(8)
\nNotes
\n(i)
The Group has not o\ufb00set any of the amounts included in the balance sheet.
\n(ii)
Represents the amount that could be o\ufb00set under master netting or similar arrangements where the Group does not satisfy the full criteria to o\ufb00set in the balance sheet.
\n(iii)
Excludes initial margin amounts for exchange-traded derivatives.
\n(iv)
In the tables above, the amounts of assets or liabilities included in the balance sheet would be o\ufb00set \ufb01rst by \ufb01nancial instruments that have the right of o\ufb00set under master netting or similar
\narrangements with any remaining amount reduced by the amount of cash and securities collateral. The actual amount of collateral may be greater than amounts presented in the tables.
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C3 Policyholder liabilities and unallocated surplus
\nC3.1
Policyholder liabilities and unallocated surplus by business type
\n(a) Movement in policyholder liabilities and unallocated surplus of with-pro\ufb01ts funds
\nThe items below represent the amount attributable to changes in policyholder liabilities and unallocated surplus of with-pro\ufb01ts funds as a result of
\neach of the components listed for the insurance operations of the Group. The policyholder liabilities shown include investment contracts without
\ndiscretionary participation features (as de\ufb01ned in IFRS 4) and their full movement in the year. The items are shown gross of external reinsurance.
\nShareholder-backed business
\nWith-
\npro\ufb01ts business
\n$m
\nUnit-linked
\nliabilities
\n$m
\nOther
\nbusiness
\n$m
\nTotal
\n$m
\nAt 1 Jan 2021
86,410
32,506
46,639
165,555
\nComprising:
\n\u2013 Policyholder liabilities on the balance sheet
\n(excludes $296,513 million from discontinued US operations)
81,193
25,433
38,107
144,733
\n\u2013 Unallocated surplus of with-pro\ufb01ts funds on the balance sheet
\nnote (i)
\n5,217
\u2013
\u2013
5,217
\n\u2013 Group\u2019s share of policyholder liabilities relating to joint ventures and associates
\nnote (ii)
\n\u2013
7,073
8,532
15,605
\nPremiums:
\nnote (iii)
\nNew business
1,990
3,038
2,172
7,200
\nIn-force
7,096
2,406
5,286
14,788
\n9,086
5,444
7,458
21,988
\nSurrenders
\nnotes (iii)(iv)
\n(844)
(3,326)
(734)
(4,904)
\nMaturities/deaths/other claim events
(2,116)
(215)
(1,123)
(3,454)
\nNet \ufb02ows
6,126
1,903
5,601
13,630
\nShareholders\u2019 transfers post-tax
(134)
\u2013
\u2013
(134)
\nInvestment-related items and other movements
\nnote (v)
\n2,499
897
(3,505)
(109)
\nForeign exchange translation di\ufb00erences
\nnote (vi)
\n(899)
(550)
(239)
(1,688)
\nAt 31 Dec 2021/1 Jan 2022
94,002
34,756
48,496
177,254
\nComprising:
\n\u2013 Policyholder liabilities on the balance sheet
88,618
25,651
37,646
151,915
\n\u2013 Unallocated surplus of with-pro\ufb01ts funds on the balance sheet
\nnote (i)
\n5,384
\u2013
\u2013
5,384
\n\u2013 Group\u2019s share of policyholder liabilities relating to joint ventures and associates
\nnote (ii)
\n\u2013
9,105
10,850
19,955
\nPremiums:
\nnote (iii)
\nNew business
2,244
1,838
2,697
6,779
\nIn-force
5,809
2,404
5,623
13,836
\n8,053
4,242
8,320
20,615
\nSurrenders
\nnotes (iii)(iv)
\n(1,233)
(2,763)
(677)
(4,673)
\nMaturities/deaths/other claim events
(2,103)
(200)
(1,712)
(4,015)
\nNet \ufb02ows
4,717
1,279
5,931
11,927
\nShareholders\u2019 transfers post-tax
(158)
\u2013
\u2013
(158)
\nInvestment-related items and other movements
\nnote (v)
\n(20,677)
(2,802)
(14,623)
(38,102)
\nForeign exchange translation di\ufb00erences
\nnote (vi)
\n(197)
(1,836)
(2,181)
(4,214)
\nAt 31 Dec 2022
77,687
31,397
37,623
146,707
\nComprising:
\n\u2013 Policyholder liabilities on the balance sheet
74,192
22,842
25,229
122,263
\n\u2013 Unallocated surplus of with-pro\ufb01ts funds on the balance sheet
\nnote (i)
\n3,495
\u2013
\u2013
3,495
\n\u2013 Group\u2019s share of policyholder liabilities relating to joint ventures and associates
\nnote (ii)
\n\u2013
8,555
12,394
20,949
\nAverage policyholder liability balances
\nnote (vii)
\n2022
81,405
33,076
43,060
157,541
\n2021
84,905
33,631
47,568
166,104
\nNotes
\n(i)
Unallocated surplus of with-pro\ufb01ts funds represents the excess of assets over policyholder liabilities, determined in accordance with the Group\u2019s accounting policies, that have yet to be
\nappropriated between policyholders and shareholders for the Group\u2019s with-pro\ufb01ts funds in Hong Kong and Malaysia. In Hong Kong, the unallocated surplus includes the shareholders\u2019 share of
\nexpected future bonuses, with the expected policyholder share being included in policyholder liabilities. Any excess of assets over liabilities and amounts expected to be paid out by the fund on
\nfuture bonuses is also included in the unallocated surplus.
\n(ii)
The Group\u2019s investments in joint ventures and associates are accounted for on an equity method and the Group\u2019s share of the policyholder liabilities as shown above relate to the life business of
\nCPL, India and the Takaful business in Malaysia.
\n(iii)
The analysis includes the impact of premiums, claims and investment movements on policyholders\u2019 liabilities. The impact does not represent premiums, claims and investment movements as reported
\nin the income statement. For example, premiums shown above are after any deductions for fees/charges; claims (surrenders, maturities, deaths and other claim events) shown above represent the
\npolicyholder liabilities provision released rather than the claims amount paid to the policyholder. The analysis also includes net \ufb02ows of the Group\u2019s insurance joint ventures and associate.
\n(iv)
The rate of surrenders for shareholder-backed business (expressed as a percentage of opening policyholder liabilities) is 4.1 per cent in 2022 (2021: 5.1 per cent).
\n(v)
Investment-related items and other movements in 2022 primarily represents the e\ufb00ects of higher interest rates on the discount rates applied in the measurement of the policyholder
\nliabilities,\u00a0together with bond losses due to rising interest rates and lower level of investment returns from equities following the falls in equity markets, primarily in Hong Kong and Singapore
\nwith\u00a0pro\ufb01ts-fund. Other business also includes the e\ufb00ect of the early adoption of the Risk-Based Capital Regime in Hong Kong as discussed in note C3.2 below.
\n(vi)
Movements in the year have been translated at the average exchange rates for the year. The closing balance has been translated at the closing spot rates as at 31 December. Di\ufb00erences upon
\nretranslation are included in foreign exchange translation di\ufb00erences.
\n(vii)
Average policyholder liabilities have been based on opening and closing balances, adjusted for any acquisitions, disposals and other relevant corporate transactions arising in the year, and
\nexclude unallocated surplus of with-pro\ufb01ts funds.
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\nGroup overview
Strategic report
Governance
Directors\u2019 remuneration report
European Embedded Value (EEV) basis results
Additional information
Financial statements
C Financial position
/ continued
\nC3 Policyholder liabilities and unallocated surplus
continued
\nC3.1
Policyholder liabilities and unallocated surplus by business type
continued
\n(b) Duration of policyholder liabilities
\nThe table below shows the carrying value of policyholder liabilities and the maturity pro\ufb01le of the cash \ufb02ows on a discounted basis, taking account
\nof expected future premiums and investment returns:
\n31 Dec 2022
\n$m
\n31 Dec 2021
\n$m
\nPolicyholder liabilities
122,263
151,915
\nExpected maturity:
\n31 Dec 2022
\n%
\n31 Dec 2021
\n%
\n0 to 5 years
22
20
\n5 to 10 years
18
18
\n10 to 15 years
14
15
\n15 to 20 years
11
12
\n20 to 25 years
10
10
\nOver 25 years
25
25
\n(c) Policyholder liabilities and unallocated surplus by operating segment
\nThe table below shows the policyholder liabilities and unallocated surplus, excluding joint ventures and associates and net of external reinsurance,
\nby segment:
\n31 Dec 2022
\n$m
\n31 Dec 2021
\n$m
\nHong Kong
60,880
79,363
\nIndonesia
3,648
4,257
\nMalaysia
8,231
8,660
\nSingapore
31,197
34,361
\nGrowth markets and other
18,995
20,905
\nTotal segment
122,951
147,546
\nC3.2
Reconciliation of gross and reinsurers\u2019 share of policyholder liabilities and unallocated surplus
\nClaims paid include maturities, annuities, surrenders, deaths and other claim events. Maturity claims are recorded as charges on the policy
\nmaturity date. Annuity claims are recorded when each annuity instalment becomes due for payment. Surrenders are charged to the income
\nstatement when paid. Death and other claims are generally recorded when noti\ufb01ed with additional contract liabilities held, where appropriate, for
\n\u2018incurred but not reported\u2019 (IBNR) claims.
\nFurther analysis of the movement in the year of the Group\u2019s gross contract liabilities, reinsurers\u2019 share of insurance contract liabilities and
\nunallocated surplus of with-pro\ufb01ts funds (excluding those held by joint ventures and associates) is provided below:
\nGross
\ninsurance
\ncontract
\nliabilities
\n$m
\nReinsurers\u2019
\nshare of
\ninsurance
\ncontract
\nliabilities
\n$m
\nInvestment
\ncontract
\nliabilities
\n$m
\nUnallocated
\nsurplus of
\nwith-pro\ufb01ts
\nfunds
\n$m
\nAt 1 Jan 2021
(436,787)
46,595
(4,459)
(5,217)
\nRemoval of discontinued US operations
\nnote (i)
\n293,325
(35,232)
3,188
\u2013
\nIncome (expense) included in the income statement
\nnotes (i)(iii)
\n(9,082)
(1,552)
189
(202)
\nOther movements
\nnote (ii)
\n\u2013
\u2013
(75)
\u2013
\nForeign exchange translation di\ufb00erences
1,789
(58)
(3)
35
\nBalance at 31 Dec 2021/1 Jan 2022
(150,755)
9,753
(1,160)
(5,384)
\nIncome (expense) included in the income statement
\nnotes (i)(iii)
\n27,252
(6,908)
88
1,868
\nOther movements
\nnote (ii)
\n\u2013
\u2013
(26)
\u2013
\nForeign exchange translation di\ufb00erences
2,290
(38)
48
21
\nAt 31 Dec 2022
(121,213)
2,807
(1,050)
(3,495)
\nNotes
\n(i)
The total charge for bene\ufb01ts and claims shown in the income statement comprises the amounts shown as \u2018Income (expense) included in the income statement\u2019 in the table above together with
\nclaims paid of $(9,343) million in the year (2021: $(8,845) million) and claim amounts attributable to reinsurers of $740 million (2021: $581 million). Claims incurred, net of reinsurance, shown
\nin the segment analysis of bene\ufb01ts and claims items below include claims paid and movement in claims outstanding payables, net of reinsurance, in the year.
\n(ii)
Other movements include premiums received and claims paid on investment contracts without discretionary participating features, which are taken directly to the statement of \ufb01nancial position
\nin accordance with IAS 39.
\n(iii)
The 2021 movement in the gross contract liabilities included $160 million for the impact of a change to allow for illiquidity premium in the calculation of the valuation interest rate (VIR) used to
\nvalue long-term insurance liabilities in Thailand. The 2022 movement in the gross contract liabilities and reinsurers\u2019 share of insurance contract liabilities included the impact from the early
\nadoption of the Hong Kong Risk-Based Capital Regime as discussed below.
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The segmental analysis of the total charge for bene\ufb01t and claims and movement in unallocated surplus, net of reinsurance in the income
\nstatement is shown below. The CPL segment is a joint venture accounted for using the equity method under IFRS, with the Group\u2019s share of its
\nresults net of related tax presented in a single line within the Group\u2019s pro\ufb01t before tax, and therefore not shown in the analysis of bene\ufb01t and
\nclaims items below.
\n2022
$m
\nHong
\nKong
Indonesia
Malaysia
Singapore
\nGrowth markets
\nand other
\nTotal
\nsegment
\nClaims incurred, net of reinsurance
(2,033)
(1,228)
(1,070)
(2,718)
(1,768)
(8,817)
\nDecrease in policyholder liabilities, net of reinsurance
15,643
270
(135)
3,189
1,679
20,646
\nMovement in unallocated surplus of with-pro\ufb01ts funds
1,815
\u2013
53
\u2013
\u2013
1,868
\nBene\ufb01ts and claims and movement in unallocated surplus,
\nnet of reinsurance
15,425
(958)
(1,152)
471
(89)
13,697
\n2021
$m
\nHong
\nKong
Indonesia
Malaysia
Singapore
\nGrowth markets
\nand other
\nTotal
\nsegment
\nClaims incurred, net of reinsurance
(1,687)
(1,184)
(1,015)
(3,037)
(1,590)
(8,513)
\n(Increase)/decrease in policyholder liabilities, net of
\nreinsurance
(6,088)
167
(260)
(2,856)
(1,159)
(10,196)
\nMovement in unallocated surplus of with-pro\ufb01ts funds
(250)
\u2013
48
\u2013
\u2013
(202)
\nBene\ufb01ts and claims and movement in unallocated surplus,
\nnet of reinsurance
(8,025)
(1,017)
(1,227)
(5,893)
(2,749)
(18,911)
\nHong Kong Risk-Based Capital Regime
\nIn April 2022, the Group\u2019s Hong Kong life business (PHKL) received approval from the Hong Kong Insurance Authority to early adopt the Hong
\nKong Risk-Based Capital (HK RBC) regime with e\ufb00ect from 1 January 2022. In light of this development and, given that the measurement
\ntechnique set out within the local regulatory basis has been applied by PHKL to calculate IFRS liabilities, the Group has re\ufb01ned the reserving
\nmethodology of PHKL by reference to the method applied under the new HK RBC regime.
\nUnder the basis previously applied, liabilities of non-participating business were generally determined on a net premium valuation basis to
\ndetermine the future policyholder bene\ufb01t provisions, subject to minimum \ufb02oors. Using the principles underpinning the HK RBC regime, the IFRS
\nreserving basis has been re\ufb01ned to one that is based on a gross premium valuation basis (including an allowance for the uncertainty of non-
\nhedgeable risks), subject to minimum \ufb02oors. Depending on the product, the minimum \ufb02oor is set at the policyholder\u2019s asset share or guaranteed
\ncash surrender value or at a constraint that on day one no negative reserve exists at a product level. This new measurement technique better
\nestimates the liability and brings the estimation basis for PHKL more in line with that used by the Group\u2019s other insurance operations. This change
\nof estimate has reduced policyholder liabilities (net of reinsurance) and increased pro\ufb01t before tax for 2022 by $945 million.
\nThere has been no change to the reserving basis for with-pro\ufb01ts liabilities, which under the Group\u2019s accounting policy are valued under the
\nrealistic basis in accordance with the requirements of the \u2018grandfathered\u2019 UK standard FRS 27 \u2018Life Assurance\u2019.
\nC3.3
Reinsurers\u2019 share of insurance contract liabilities
\nThe measurement of reinsurance assets is consistent with the measurement of the underlying direct insurance contracts. The treatment of any
\ngains or losses arising on the purchase of reinsurance contracts is dependent on the underlying accounting basis of the entity concerned.
\n31 Dec 2022
\n$m
\n31 Dec 2021
\n$m
\nInsurance contract liabilities
2,592
9,550
\nClaims outstanding
215
203
\nTotal operations
2,807
9,753
\nThe Group cedes certain business to other insurance companies. Although the ceding of insurance does not relieve the Group from its liability to its
\npolicyholders, the Group participates in such agreements largely for the purpose of managing its loss exposure. The Group evaluates the \ufb01nancial
\ncondition of its reinsurers and monitors concentration of credit risk from similar geographic regions, activities or economic characteristics of the
\nreinsurers to minimise its exposure from reinsurer insolvencies.
\nOf the reinsurers\u2019 share of insurance contract liabilities balance of $2,807 million at 31 December 2022 (31 December 2021: $9,753 million),
\n98 per cent (31 December 2021: 99 per cent) was from reinsurers with rating A- and above by Standard & Poor\u2019s or other external rating agencies.
\nThe reinsurers\u2019 share of insurance contract liabilities primarily relates to protection business written in Hong Kong. The year-on-year movement
\nin the reinsurers\u2019 share of insurance contract liabilities included the impact from the early adoption of the Hong Kong Risk-Based Capital Regime
\nas discussed above in note C3.2. The Group\u2019s Hong Kong business cedes insurance risk to limit exposure to underwriting losses under various
\nagreements that cover individual risks, group risks or de\ufb01ned blocks of business, on a co-insurance, surplus, quota share, or catastrophe excess of
\nloss basis. The amount of each risk retained depends on the evaluation of the speci\ufb01c risk, subject to certain circumstances, to maximum limits
\nbased on characteristics of coverage.
\nNet commissions received during 2022 on ceded business totalled $216 million (2021: $285 million) and claims incurred ceded to external
\nreinsurers totalled $766 million (2021: $604 million). There was $1 million (2021: $3 million) of deferred gains in the year.
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Strategic report
Governance
Directors\u2019 remuneration report
European Embedded Value (EEV) basis results
Additional information
Financial statements
C Financial position
/ continued
\nC3 Policyholder liabilities and unallocated surplus
continued
\nC3.4
Products and determining contract liabilities
\nIFRS 4 requires contracts written by insurers to be classi\ufb01ed as either \u2018insurance\u2019 contracts or \u2018investment\u2019 contracts. The classi\ufb01cation of the
\ncontract determines its accounting.
\nContracts that transfer signi\ufb01cant insurance risk to the Group are classi\ufb01ed as insurance contracts. This judgement is applied in considering
\nwhether the material features of a contract gives rise to the transfer of signi\ufb01cant insurance risk, which is made at the point of contract inception
\nand not revisited. For the majority of the Group\u2019s contracts, classi\ufb01cation is based on a readily identi\ufb01able scenario that demonstrates a signi\ufb01cant
\ndi\ufb00erence in cash \ufb02ows if the covered event occurs (as opposed to does not occur) reducing the level of judgement involved.
\nContracts that transfer \ufb01nancial risk to the Group but not signi\ufb01cant insurance risk are classi\ufb01ed as investment contracts. Insurance contracts
\nand investment contracts with discretionary participation features are accounted for under IFRS 4. Investment contracts without such
\ndiscretionary participation features are accounted for as \ufb01nancial instruments under IAS 39.
\nInvestment contracts without discretionary participation features are measured in accordance with IAS 39 to re\ufb02ect the deposit nature of the
\narrangement, with premiums and claims re\ufb02ected as deposits and withdrawals, and taken directly to the statement of \ufb01nancial position as
\nmovements in the \ufb01nancial liability balance.
\nInvestment contracts without \ufb01xed and guaranteed terms are classi\ufb01ed as \ufb01nancial instruments and designated as FVTPL because the
\nresulting liabilities are managed and their performance is evaluated on a fair value basis. Where the contract includes a surrender option, its
\ncarrying value is subject to a minimum carrying value equal to its surrender value.
\nOther investment contracts are measured at amortised cost.
\nThe table below provides description of material feature of each of the products listed above, together with how their contract liabilities are
\ndetermined.
\nContract type
Description and material features
Determination of liabilities
\nWith-pro\ufb01ts and
\nparticipating
\ncontracts
\nProvides savings and/or protection where the
\nbasic sum assured can be enhanced by a pro\ufb01t
\nshare (or bonus) from the underlying fund as
\ndetermined at the discretion of the business
\nunit.
\nParticipating products often o\ufb00er a
\nguaranteed maturity or surrender value.
\nDeclared regular bonuses are guaranteed once
\nvested. Future bonus rates and cash dividends
\nare not guaranteed. Market value adjustments
\nand surrender penalties are used for certain
\nproducts where the law permits such
\nadjustments. Guarantees are predominantly
\nsupported by the segregated funds and their
\nestates.
\nAs explained in note A3.1, with-pro\ufb01ts contracts are predominantly sold
\nin Hong Kong, Malaysia and Singapore. The total value of the
\nwith-pro\ufb01ts funds is driven by the underlying asset valuation with
\nmovements re\ufb02ected principally in the accounting value of
\npolicyholder liabilities and unallocated surplus.
\nIn Hong Kong, the unallocated surplus includes the shareholders\u2019 share
\nof expected future bonuses, with the expected policyholder share
\nbeing included in policyholder liabilities. Any excess of assets over
\nliabilities and amounts expected to be paid out by the fund on future
\nbonuses is also included in the unallocated surplus.
\nUnit-linked
Combines savings with protection, the cash
\nvalue of the policy primarily depends on the
\nvalue of the underlying unitised funds.
\nThe attaching liabilities largely re\ufb02ect the unit value obligation driven
\nby the value of the investments of the unit fund. Additional contract
\nliabilities are held for guaranteed bene\ufb01ts beyond the unit fund value,
\ngenerally using a gross premium valuation method, as discussed below
\nfor health and protection business. These additional provisions are
\nrecognised as a component of other business liabilities.
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Contract type
Description and material features
Determination of liabilities
\nHealth and
\nprotection
\nHealth and protection features are o\ufb00ered as
\nsupplements to the products listed above or
\nsold as standalone products. Protection covers
\nmortality and/or morbidity bene\ufb01ts including
\nhealth, disability, critical illness and accident
\ncoverage.
\nThe approach to determine the contract liabilities is generally driven by
\nthe local solvency basis. The discount rates used to determine the
\ncontract liabilities are derived in line with the measurement basis
\napplied in each business unit and are generally based on the risk-free
\nrates applicable to the underlying contracts, including appropriate
\nmargins.
\nA gross premium valuation (GPV) method is typically used in those
\nlocal businesses where a risk-based capital framework is adopted for
\nlocal solvency. Under the GPV method, all cash \ufb02ows are valued
\nexplicitly using best estimate assumptions with a suitable margin for
\nprudence.
\nThis is achieved either through adding an explicit allowance above best
\nestimate to the assumptions, or by applying an overlay constraint such
\nthat on day one no negative reserves (ie where future premium in\ufb02ows
\nare expected to exceed future claims and out\ufb02ows) are derived at an
\nindividual policyholder level, or at a product/fund level, or a
\ncombination of both. The margin for prudence is released to pro\ufb01t over
\nthe life of the contract. Best estimate assumptions are reviewed
\nannually with reference to experience and expectations around the
\nshort-term nature of any change (for example increases or decreases in
\nclaims levels as a result of Covid-19). Any changes made to best
\nestimate impact the prudence mechanisms described above and, as a
\nconsequence, IFRS pro\ufb01t tends to be relatively insensitive to
\nassumption changes made in any given year.
\nPrior to the adoption of the new HK RBC regime in 2022, the Hong
\nKong business unit applied a net premium valuation method (NPV) to
\ndetermine the future policyholder bene\ufb01t provisions, subject to
\nminimum \ufb02oors at the policyholder\u2019s asset share or guaranteed cash
\nsurrender value as appropriate. Upon the adoption of the HK RBC
\nregime, the gross premium valuation method (including an allowance
\nfor the uncertainty of non-hedgeable risks), subject to minimum \ufb02oors
\nis applied.
\nFor India and Taiwan, US GAAP is applied for measuring insurance
\nliabilities. For these businesses, the future policyholder bene\ufb01t
\nprovisions for non-linked business are determined using the net level
\npremium method, with an allowance for surrenders, maintenance and
\nclaims expenses.
\nIn Vietnam, an estimation basis to determine the contract liabilities is
\naligned substantially to that used by the business units applying the
\nGPV method.
\nNon-participating
\nterm contracts,
\nwhole life and
\nendowment
\nassurance
\nNon-participating savings and/or protection
\nwhere the bene\ufb01ts are guaranteed, determined
\nby a set of de\ufb01ned market-related parameters,
\nor determined at the discretion of the business
\nunit. These products often o\ufb00er a guaranteed
\nmaturity and/or surrender value. It is common
\nfor regulations or market-driven demand and
\ncompetition to provide some form of capital
\nvalue protection and minimum crediting
\ninterest rate guarantees. This is re\ufb02ected within
\nthe guaranteed maturity and surrender values.
\nGuarantees are supported by shareholders.
\nThe approach to determining the contract liabilities is generally driven
\nby the local solvency basis, as discussed for health and protection
\nbusiness above.
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\nGroup overview
Strategic report
Governance
Directors\u2019 remuneration report
European Embedded Value (EEV) basis results
Additional information
Financial statements
C Financial position
/ continued
\nC4 Intangible assets
\nC4.1
Goodwill
\nBusiness combination
\nBusiness acquisitions are accounted for by applying the purchase method of accounting, which adjusts the net assets of the acquired company to
\nfair value at the date of purchase. The excess of the acquisition consideration over the fair value of the assets and liabilities of the acquired
\nbusiness is recorded as goodwill. The Group chooses the full goodwill method or the partial goodwill method to calculate goodwill on an acquisition
\nby acquisition basis. Expenses related to acquiring new subsidiaries are charged to the income statement in the period in which they are incurred
\nand not included in goodwill. Income and expenses of acquired businesses are included in the income statement from the date of acquisition.
\nWhere the Group writes a put option, which if exercised triggers the purchase of non-controlling interests as part of its business acquisition, the
\nput option is recognised as a \ufb01nancial liability at the acquisition date. Where risks and rewards remain with the non-controlling interests, a
\ncorresponding amount is deducted from equity. Any subsequent changes to the carrying amount of the put option liability are also recognised
\nwithin equity.
\nGoodwill
\nGoodwill is capitalised and carried on the Group consolidated statement of \ufb01nancial position as an intangible asset at initial value less any
\naccumulated impairment losses. Goodwill impairment testing is conducted annually and when there is an indication of impairment.
\nGoodwill shown on the consolidated statement of \ufb01nancial position at 31 December 2022 represents amounts allocated to business units in
\nrespect of both acquired asset management and life businesses. There has been no impairment as at 31 December 2022 and 2021.
\n2022
$m
2021
$m
\nCarrying value at 1 Jan
907
961
\nExchange di\ufb00erences
(17)
(54)
\nCarrying value at 31 Dec
890
907
\nImpairment testing
\nGoodwill does not generate cash \ufb02ows independently of other groups of assets and thus is assigned to cash-generating units for the purposes of
\nimpairment testing. These cash-generating units (CGUs) are based upon how management monitors the business and represent the lowest level
\nto which goodwill can be allocated on a reasonable basis. Of the carrying value at 31 December 2022, $445 million (31 December 2021:
\n$465 million) relates to asset management business in Thailand and $234 million (31 December 2021: $233 million) relates to the acquisition of
\nUOB Life in Singapore. Other goodwill amounts are allocated across CGUs, which are not individually material.
\nGoodwill is tested for impairment by comparing the CGU\u2019s carrying amount, including any goodwill, with its recoverable amount. The Group\u2019s
\nmethodology of assessing whether goodwill may be impaired for acquired life and asset management operations is discussed below.
\nFor acquired life businesses, the Group routinely compares the aggregate of net asset value and acquired goodwill on an IFRS basis of the
\nacquired life business with the value of the current in-force business as determined using the EEV methodology. Any excess of IFRS value over EEV
\ncarrying value is then compared with EEV basis value of current and projected future new business to determine whether there is any indication
\nthat the goodwill in the IFRS statement of \ufb01nancial position may be impaired. The methodology and assumptions underpinning the Group\u2019s EEV
\nbasis of reporting are included in the EEV basis supplementary information in this Annual Report.
\nThe goodwill in respect of asset management businesses comprises mainly the goodwill arising from the acquisition of Thanachart Fund
\nManagement Co., Ltd in 2019 and TMB Asset Management Co., Ltd in Thailand in 2018. The goodwill impairment testing for these businesses is
\nprepared as a single CGU re\ufb02ecting that these businesses are managed together. The recoverable amount of these businesses has been
\ndetermined by calculating the value in use of combined business calculated using a discounted cash \ufb02ow valuation.
\nFor the combined Thailand asset management business, the valuation is based on a number of key assumptions as follows:
\n>
Cash \ufb02ow projections based on the latest \ufb01ve-year business plan/forecast;
\n>
A constant growth rate of 3.5 per cent (2021: 2.3 per cent) on forecast cash \ufb02ows beyond the terminal year of the cash \ufb02ow projection period;
\n>
The risk discount rate applied in accordance with the nature of the businesses. The pre-tax discount rate applied is 9.0 per cent (2021:
\n9.0 per cent); and
\n>
The continuation of asset management contracts on similar terms.
\nThe key assumptions used in the impairment testing, including the cash \ufb02ow projections, are subject to \ufb02uctuations in the external market and
\neconomic conditions. The recent adverse conditions had contributed to reduced cash \ufb02ow projections leading to a fall in the headroom in
\ncomparison to the prior year. While management believes that any reasonable change in each of the key assumptions would not cause the
\nrecoverable amount of the asset management businesses acquired to fall below its carrying amount, a more signi\ufb01cant adverse change in the key
\nassumptions applied concurrently could lead to impairment charges.
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C4.2
Deferred acquisition costs and other intangible assets
\nIntangible assets acquired on the purchase of a subsidiary or portfolio of contracts are measured at fair value on acquisition. DAC are accounted
\nfor as described in note A3.1(c). Other intangible assets, such as distribution rights and software, are valued initially at the price paid to acquire or
\ncost to develop them and are subsequently carried at cost less amortisation and any accumulated impairment losses. For intangibles other than
\nDAC, amortisation follows the pattern in which the future economic bene\ufb01ts are expected to be consumed. If the pattern cannot be determined
\nreliably, a straight-line method is applied. For software, the amortisation generally represents the licence period of the software acquired.
\nAmortisation of intangible assets is charged to the \u2018acquisition costs and other expenditure\u2019 line in the Consolidated income statement.
\nImpairment testing is conducted when there is an indication of impairment.
\n31 Dec 2022
\n$m
\n31 Dec 2021
\n$m
\nShareholder-backed business:
\nDAC related to insurance contracts as classi\ufb01ed under IFRS 4
3,215
2,776
\nDAC related to investment management contracts, including life assurance contracts classi\ufb01ed as \ufb01nancial instruments
\nand\u00a0investment management contracts under IFRS 4
39
39
\nDAC related to insurance and investment contracts
3,254
2,815
\nDistribution rights
3,630
3,782
\nPresent value of acquired in-force policies for insurance contracts as classi\ufb01ed under IFRS 4
17
28
\nOther intangibles
209
184
\nPresent value of acquired in-force and other intangibles
3,856
3,994
\nTotal of DAC and other intangible assets attributable to shareholders
7,110
6,809
\nOther intangible assets, including computer software, attributable to with-pro\ufb01ts funds
45
49
\nTotal of deferred acquisition costs and other intangible assets
7,155
6,858
\n(a) Movement in DAC and other intangible assets attributable to shareholders
\n2022
$m
2021
$m
\nDAC
\nDistribution
\nrights
\nnote (i)
\nPVIF and other
\nintangibles
\nnotes (ii)(iii)
\nTotal
Total
\nBalance at 1 Jan
2,815
3,782
212
6,809
20,275
\nRemoval of discontinued US operations
\u2013
\u2013
\u2013
\u2013
(13,881)
\nAdditions
1,002
206
76
1,284
1,185
\nAmortisation to the income statement
(475)
(301)
(50)
(826)
(651)
\nDisposals and transfers
\u2013
\u2013
(5)
(5)
(7)
\nExchange di\ufb00erences and other movements
(88)
(57)
(7)
(152)
(112)
\nBalance at 31 Dec
3,254
3,630
226
7,110
6,809
\nNotes
\n(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
\nfor the bank distribution of Prudential\u2019s insurance products for a \ufb01xed period of time. The distribution rights amounts are amortised on a basis to re\ufb02ect the pattern in which the future economic
\nbene\ufb01ts are expected to be consumed by reference to new business production levels.
\n(ii)
All of the net PVIF balances relate to insurance contracts. The PVIF attaching to investment contracts have been fully amortised.
\n(iii)
Other intangibles comprise other intangible assets such as software rights. Software rights include additions of $58 million, amortisation of $(24) million, disposals of $(3) million, foreign
\nexchange of $(7) million and closing balance at 31 December 2022 of $138 million (31 December 2021: $114 million).
\n(b) Movement in DAC related to insurance and investment contracts
\n2022
$m
2021
$m
\nInsurance
\ncontracts
\nInvestment
\ncontracts
\nnote
\nInsurance
\ncontracts
\nInvestment
\ncontracts
\nnote
\nBalance at 1 Jan
2,776
39
16,182
34
\nRemoval of discontinued US operations
\u2013
\u2013
(13,863)
\u2013
\nAdditions
993
9
841
7
\nAmortisation
(470)
(5)
(339)
(4)
\nExchange di\ufb00erences and other movements
(84)
(4)
(45)
2
\nBalance at 31 Dec
3,215
39
2,776
39
\nNote
\nThe carrying amount of the DAC balance relating to investment contracts comprises the following gross and accumulated amortisation amounts:
\n31 Dec 2022
\n$m
\n31 Dec 2021
\n$m
\nGross amount
59
55
\nAccumulated amortisation
(20)
(16)
\nCarrying amount
39
39
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\nGroup overview
Strategic report
Governance
Directors\u2019 remuneration report
European Embedded Value (EEV) basis results
Additional information
Financial statements
C Financial position
/ continued
\nC4 Intangible assets
continued
\nC4.2
Deferred acquisition costs and other intangible assets
continued
\n(c) Movement in PVIF and other intangibles attributable to shareholders
\n2022
$m
2021
$m
\nPVIF
\nDistribution
\nrights
\nOther
\nintangibles
\n(including
\nsoftware)
Total
PVIF
\nDistribution
\nrights
\nOther
\nintangibles
\n(including
\nsoftware)
Total
\nBalance at 1 Jan
\nCost
140
5,037
313
5,490
177
4,845
424
5,446
\nAccumulated amortisation
(112)
(1,255)
(129)
(1,496)
(143)
(994)
(250)
(1,387)
\n28
3,782
184
3,994
34
3,851
174
4,059
\nRemoval of discontinued US operations
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(18)
(18)
\nAdditions
\u2013
206
76
282
\u2013
260
77
337
\nAmortisation charge
(10)
(301)
(40)
(351)
(5)
(268)
(35)
(308)
\nDisposals and transfers
\u2013
\u2013
(5)
(5)
\u2013
\u2013
(7)
(7)
\nExchange di\ufb00erences and other
\nmovements
(1)
(57)
(6)
(64)
(1)
(61)
(7)
(69)
\nBalance at 31 Dec
17
3,630
209
3,856
28
3,782
184
3,994
\nComprising:
\nCost
134
5,176
373
5,683
140
5,037
313
5,490
\nAccumulated amortisation
(117)
(1,546)
(164)
(1,827)
(112)
(1,255)
(129)
(1,496)
\n17
3,630
209
3,856
28
3,782
184
3,994
\nC5 Borrowings
\nAlthough initially recognised at fair value (net of transaction costs), borrowings are subsequently accounted for on an amortised cost basis using
\nthe e\ufb00ective interest method. Under the e\ufb00ective interest method, the di\ufb00erence between the redemption value of the borrowing and the initial
\nproceeds (net of related issue costs) is amortised through the income statement to the date of maturity or, for hybrid debt, over the expected life of
\nthe instrument.
\nC5.1
Core structural borrowings of shareholder-\ufb01nanced businesses
\n31 Dec 2022
\n$m
\n31 Dec 2021
\n$m
\nSubordinated debt:
\nUS$1,000m 5.25% Notes
\nnote (i)
\n\u2013
1,000
\nUS$725m 4.375% Notes
\nnote (ii)
\n\u2013
725
\nUS$750m 4.875% Notes
750
748
\n\u20ac20m Medium Term Notes 2023
21
23
\n\u00a3435m 6.125% Notes 2031
520
584
\nUS$1,000m 2.95% Notes 2033
995
995
\nSenior debt:
\nnote (iii)
\n\u00a3300m 6.875% Notes 2023
\nnote (iv)
\n361
404
\n\u00a3250m 5.875% Notes 2029
281
313
\nUS$1,000m 3.125% Notes 2030
987
985
\nUS$350m 3.625% Notes 2032
\nnote (v)
\n346
\u2013
\nBank loans:
\nUS$350m Loan 2024
\nnote (v)
\n\u2013
350
\nTotal core structural borrowings of shareholder-\ufb01nanced businesses
4,261
6,127
\nNotes
\n(i)
The US$1,000 million notes were redeemed on 20 January 2022 using the proceeds from the issuance of ordinary shares during 2021 as discussed in note C8.
\n(ii)
The US$725 million notes were redeemed on 20 January 2022 using the proceeds from the US$1,000 million subordinated debt issued in November 2021.
\n(iii)
The senior debt ranks above subordinated debt in the event of liquidation.
\n(iv)
The \u00a3300 million notes were redeemed on 20 January 2023.
\n(v)
In March 2022, the Company issued US$350 million 3.625 per cent senior debt maturing on 24 March 2032 with proceeds, net of costs, of US$346 million, which was used to redeem the
\nUS$350 million bank loan in May 2022.
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C5.2
Operational borrowings
\n31 Dec 2022
\n$m
\n31 Dec 2021
\n$m
\nShareholder-\ufb01nanced business:
\nBorrowings in respect of short-term \ufb01xed income securities programmes \u2013 commercial paper
501
500
\nLease liabilities under IFRS 16
185
209
\nOther borrowings
11
10
\nOperational borrowings attributable to shareholder-\ufb01nanced businesses
697
719
\nWith-pro\ufb01ts business:
\nLease liabilities under IFRS 16
114
138
\nOther borrowings
4
4
\nOperational borrowings attributable to with-pro\ufb01ts businesses
118
142
\nTotal operational borrowings
815
861
\nC6 Risk and sensitivity analysis
\nGroup overview
\nThe Group\u2019s risk framework and the management of risks attaching to the Group\u2019s consolidated \ufb01nancial statements including \ufb01nancial assets,
\n\ufb01nancial liabilities and insurance liabilities, together with the inter-relationship with the management of capital, have been included in the audited
\nsections of the Risk review report.
\nThe \ufb01nancial and insurance assets and liabilities on the Group\u2019s statement of \ufb01nancial position are, to varying degrees, subject to market and
\ninsurance risk and other changes of experience assumptions that may have a material e\ufb00ect on IFRS basis pro\ufb01t or loss and shareholders\u2019 equity.
\nThe market and insurance risks and also ESG-related risks, including how they a\ufb00ect Group\u2019s operations and how these are managed are discussed
\nin the Risk review report referred to above. The ESG-related risks discussed in the Risk review report include in particular the potential long-term
\nimpact of environmental risks associated with climate change (including physical and transition risks) on the Group\u2019s investments and liabilities.
\nThe ESG Report included in this Annual Report sets out three commonly used scenarios of plausible global responses to climate change. Each
\nscenario is translated into potential sensitivities to economic factors, using third party calibrated inputs, which have then been applied during the
\nyear to the Group\u2019s starting assets and liabilities to quantify possible future impacts thereon. Though the Group remains exposed to \ufb01nancial
\nimpact from plausible global responses addressing climate change, the results for each scenario are not outside observed market volatility
\nexperienced and therefore do not indicate the need for explicit allowance for climate change within the current valuations. In addition, given the
\nnature of the business, the impact of climate change does not directly alter the Group\u2019s assumptions for claims and lapses for its insurance
\nbusiness based on the annual review of experience. If experience or exposure changes, for example due to a step change in long-term morbidity
\nand/or mortality expectations in a particular region due to climate events, the \ufb01nancial impacts from climate-related risks on our insurance
\nliabilities could be more signi\ufb01cant and would be allowed for as part of the regular review.
\nThe most signi\ufb01cant market and credit risks that the IFRS shareholders\u2019 pro\ufb01t or loss and shareholders\u2019 equity for the Group\u2019s life assurance
\nbusiness are sensitive to, are shown in the following tables. The distinction between direct and indirect exposure is not intended to indicate the
\nrelative size of the sensitivity. In addition, insurance businesses are sensitive to mortality and/or morbidity risk as well as persistency risk depending
\non the products sold.
\nType of business
Market and credit risk
\nWith-pro\ufb01ts business
\nUnit-linked business
\nNet neutral direct exposure (indirect exposure to investment performance, which is subject to smoothing
\nthrough declared bonuses)
\nNet neutral direct exposure (indirect exposure to investment performance, through asset management
\nfees)
\nNon-participating business
Asset/liability mismatch risk which results in sensitivity to interest rates and credit spreads, particularly for
\noperations where the insurance liability basis is sensitive to current market movements
\nPro\ufb01t and shareholders\u2019 equity are also sensitive to the impact of current market movements on assets
\nheld in excess of non-participating policyholder liabilities
\nIndirect exposure to investment performance through policyholder charges and guarantees in some
\ncases
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\nGroup overview
Strategic report
Governance
Directors\u2019 remuneration report
European Embedded Value (EEV) basis results
Additional information
Financial statements
C Financial position
/ continued
\nC6 Risk and sensitivity analysis
continued
\nSensitivity analyses of IFRS shareholders\u2019 equity to key market and other risks for the insurance operations are provided in section C6.1 below. The
\nsensitivity analyses provided show the e\ufb00ect on shareholders\u2019 equity to changes in the relevant risk variables, all of which are considered to be
\nreasonably possible at the relevant balance sheet date.
\nThe sensitivity of the Group\u2019s Eastspring and central operations to market risks is discussed in section C6.2.
\nThe Group bene\ufb01ts from diversi\ufb01cation bene\ufb01ts achieved through the geographical spread of the Group\u2019s operations and, within those
\noperations, through a broad mix of product types. These bene\ufb01ts are not re\ufb02ected in the simpli\ufb01ed sensitivities below.
\nRelevant correlation factors include:
\n>
Correlation across geographic regions for both \ufb01nancial and non-\ufb01nancial risk factors; and
\n>
Correlation across risk factors for mortality and morbidity, expenses, persistency and other risks.
\nThe geographical diversity of the Group\u2019s business means that it has some exposure to the risk of foreign exchange rate \ufb02uctuations. The Group
\nhas no exposure to currency \ufb02uctuation from business units that operate in USD, or currencies pegged to the USD (such as HKD), and reduced
\nexposure to currencies partially managed to the USD within a basket of currencies (such as SGD). Sensitivities to exchange rate movements in the
\nGroup\u2019s key markets are therefore expected to be limited.
\nC6.1
Insurance operations
\n(a) Sensitivity to key market risks
\nThe table below shows the sensitivity of shareholders\u2019 equity as at 31 December 2022 and 2021 for insurance operations to the following market risks:
\n>
1 per cent increase and 0.5 per cent decrease in interest rates (based on local government bond yields at the valuation date) in isolation and
\nsubject to a \ufb02oor of zero; and
\n>
Instantaneous 10 per cent rise and 20 per cent fall in the market value of equity and property assets. The equity risk sensitivity analysis assumes
\nthat all equity indices fall by the same percentage.
\nThe sensitivities below only allow for limited management actions such as changes to policyholder bonuses, where applicable. If the economic
\nconditions set out in the sensitivities persisted, the \ufb01nancial impacts may di\ufb00er to the instantaneous impacts shown below. Given the continuous
\nrisk management processes in place, management could take additional actions to help mitigate the impact of these stresses, including (but not
\nlimited to) rebalancing investment portfolios, increased use of reinsurance, repricing of in-force bene\ufb01ts, changes to new business pricing and the
\nmix of new business being sold.
\nWhere liabilities are valued using historic average rates for a short period (ie up to three years), the valuation interest rates are adjusted to
\nassume a parallel increase or decrease in the interest rates used in the averaging approach to re\ufb02ect the impact that could be seen in the near
\nterm. Credit risk sensitivities, such as the impact on the value of debt securities and policyholder liabilities
from movements in credit spreads are not
\npresented below
. A one-letter credit downgrade in isolation (ie ignoring any consequential change in valuation) would not have a material impact
\non IFRS pro\ufb01t or shareholders\u2019 equity.
\nNet e\ufb00ect on shareholders\u2019 equity from insurance operations
\n31 Dec 2022
\n$m
\n31 Dec 2021
\n$m
\nShareholders\u2019 equity of insurance operations
14,407
14,289
\nSensitivity to key market risks:
\nnote
\nInterest rates and consequential e\ufb00ects \u2013 1% increase
(386)
(796)
\nInterest rates and consequential e\ufb00ects \u2013 0.5% decrease
(122)
137
\nEquity/property market values \u2013 10% rise
190
372
\nEquity/property market values \u2013 20% fall
(729)
(787)
\nNote
\nThe e\ufb00ect from the changes in interest rates or equity and property prices above, if they arose, would impact pro\ufb01t after tax for the insurance operations and would mostly be recorded within short-term
\n\ufb02uctuations in investment returns. The impact on pro\ufb01t after tax would be the same as the net e\ufb00ect on shareholders\u2019 equity. Changes to the results of the Africa insurance operations from interest rate
\nor equity rate changes would not materially impact the Group.
\nThe degree of sensitivity of the results of the non-linked shareholder-backed business of the insurance operations to movements in interest rates
\ndepends upon the degree to which the liabilities under the \u2018grandfathered\u2019 IFRS 4 measurement basis re\ufb02ects market interest rates from period to
\nperiod. This varies by business unit.
\nFor example:
\n>
Taiwan and India businesses apply US GAAP, for which the results can be more sensitive as the e\ufb00ect of interest rate movements on the backing
\ninvestments may not be o\ufb00set by liability movements; and
\n>
The level of options and guarantees in the products written in a particular business unit will a\ufb00ect the degree of sensitivity to interest rate
\nmovements.
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The sensitivity of the insurance operations presented as a whole at a given point in time will also be a\ufb00ected by a change in the relative size of the
\nindividual businesses.
\nThe \u2018increase of 1%\u2019 sensitivities re\ufb02ect that, for many operations the impact of interest rate movements on the value of government and
\ncorporate bond investments dominates, namely bonds are expected to decrease in value as interest rates increase to a greater extent than the
\no\ufb00setting decrease in liabilities from a corresponding change in discount rates. This arises because the discount rate in some operations does not
\n\ufb02uctuate in line with interest rate movements. Under a 0.5% decrease interest rate scenario although in the majority of operations asset gains
\nexceed the increase in liabilities, there are a number of operations where the increase in liabilities dominates, driven by an increase in the value of
\npolicyholder guarantees, hence this results in an overall small negative impact of an instantaneous decrease of rates at 31 December 2022.
\nMovements in equities backing with-pro\ufb01ts and unit-linked business have been excluded from the equity and property sensitivities as they are
\ngenerally matched by an equal movement in insurance liabilities (including unallocated surplus of with-pro\ufb01ts funds). The impact on changes to
\nfuture pro\ufb01tability as a result of changes to the asset values within unit-linked or with-pro\ufb01ts funds have not been included in the instantaneous
\nsensitivity above. The estimated sensitivities shown above include equity and property investments held by the Group\u2019s joint venture and
\nassociate businesses. Generally, changes in equity and property investment values held outside unit-linked and with-pro\ufb01ts funds are not directly
\no\ufb00set by movements in non-linked policyholder liabilities. For Hong Kong\u2019s non-participating business, liabilities largely re\ufb02ect asset shares post
\nthe adoption of HK RBC and therefore the consequential movements in equities are o\ufb00set by movements in policyholder liabilities.
\n(b) Sensitivity to insurance risk
\nFor insurance operations, adverse persistency experience can impact the IFRS pro\ufb01tability of certain types of business written. This risk is
\nmanaged at a business unit level through regular monitoring of experience and the implementation of management actions as necessary.
\nThese actions could include product enhancements, increased management focus on premium collection, as well as other customer retention
\ne\ufb00orts. The potential \ufb01nancial impact of lapses is often mitigated through the speci\ufb01c features of the products, eg surrender charges, or through
\nthe availability of premium holiday or partial withdrawal policy features. The reserving basis, as discussed in note A3.1(a) and C3.4, is generally
\nsuch that a change in lapse assumptions has an immaterial e\ufb00ect on immediate pro\ufb01tability.
\nMany of the business units are exposed to mortality and morbidity risk and a provision is made within policyholder liabilities to cover the
\npotential exposure. If all these assumptions were strengthened by 5 per cent then it is estimated that pro\ufb01t after tax and shareholders\u2019 equity
\nwould decrease by approximately $(101) million (2021: $(108) million), before consideration of other reserving adjustments eg a corresponding
\nrelease of margin for prudence. Weakening these assumptions by 5 per cent would have a similar opposite impact.
\nC6.2
Eastspring and central operations
\nThe pro\ufb01t for the year of Eastspring is sensitive to the level of assets under management, as this signi\ufb01cantly a\ufb00ects the value of management
\nfees earned by the business in the current and future periods. Assets under management will rise and fall as market conditions change, with a
\nconsequential impact on pro\ufb01tability.
\nEastspring holds a small amount of investments direct on its balance sheet, including investments in respect of seeding capital into retail funds
\nit sells to third parties (see note C1). Eastspring\u2019s pro\ufb01t will therefore have some exposure to the market movements of these investments.
\nAt 31 December 2022, the Group\u2019s central operations held a 9.2 per cent (31 December 2021: 18.4 per cent) economic interest in the equity
\nsecurities of Jackson. These equity securities are listed on the New York Stock Exchange and classi\ufb01ed as available-for-sale with a fair value of
\n$266 million at 31 December 2022 (31 December 2021: $683 million). If the value of these securities decreased by 20 per cent, the change in
\nvaluation would be $(53) million (31 December 2021: $(137) million), which would reduce shareholders\u2019 equity by this amount before tax, all of
\nwhich would pass through other comprehensive income outside of the pro\ufb01t or loss.
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\nGroup overview
Strategic report
Governance
Directors\u2019 remuneration report
European Embedded Value (EEV) basis results
Additional information
Financial statements
C Financial position
/ continued
\nC7 Tax assets and liabilities
\nAccounting policies on deferred tax are included in note B3.
\nC7.1
Current tax
\nAt 31 December 2022, of the $18 million (31 December 2021: $20 million) current tax recoverable, the majority is expected to be recovered within
\n12 months after the reporting period.
\nAt 31 December 2022, the current tax liability from operations of $208 million (31 December 2021: $185 million) includes $79 million
\n(31 December 2021: $42 million) of provisions for uncertain tax matters. Further detail is provided in note B3.2.
\nC7.2
Deferred tax
\nThe statement of \ufb01nancial position contains the following deferred tax assets and liabilities in relation to:
\n2022
$m
\nBalance
\nat 1 Jan
\nMovement in
\nincome
\nstatement
\nOther
\nmovements
\nincluding
\nforeign
\nexchange
\nmovements
\nBalance
\nat 31 Dec
\nDeferred tax assets
\nUnrealised losses or gains on investments
3
317
(178)
142
\nBalances relating to investment and insurance contracts
34
1
(33)
2
\nShort-term temporary di\ufb00erences
162
(15)
(12)
135
\nUnused tax losses
67
(32)
(4)
31
\nTotal deferred tax assets
266
271
(227)
310
\nDeferred tax liabilities
\nUnrealised losses or gains on investments
(242)
44
185
(13)
\nBalances relating to investment and insurance contracts
(2,125)
(228)
47
(2,306)
\nShort-term temporary di\ufb00erences
(495)
(81)
23
(553)
\nTotal deferred tax liabilities
(2,862)
(265)
255
(2,872)
\n2021
$m
\nBalance
\nat 1 Jan
\nRemoval of
\ndiscontinued
\nUS operations
\nMovement in
\nincome
\nstatement
\nOther
\nmovements
\nincluding
\nforeign
\nexchange
\nmovements
\nBalance
\nat 31 Dec
\nDeferred tax assets
\nUnrealised losses or gains on investments
\u2013
\u2013
3
\u2013
3
\nBalances relating to investment and insurance contracts
87
\u2013
(16)
(37)
34
\nShort-term temporary di\ufb00erences
4,662
(4,513)
15
(2)
162
\nUnused tax losses
109
(29)
(14)
1
67
\nTotal deferred tax assets
4,858
(4,542)
(12)
(38)
266
\nDeferred tax liabilities
\nUnrealised losses or gains on investments
(1,063)
691
127
3
(242)
\nBalances relating to investment and insurance contracts
(1,765)
\u2013
(433)
73
(2,125)
\nShort-term temporary di\ufb00erences
(3,247)
2,832
(87)
7
(495)
\nTotal deferred tax liabilities
(6,075)
3,523
(393)
83
(2,862)
\nAt 31 December 2022, no deferred tax asset has been recognised in respect of unused tax losses and temporary deductible di\ufb00erences of
\n$2,235 million (31 December 2021: $1,382 million). $837 million of the unused tax losses expired at the point of Prudential plc\u2019s tax residency
\nchange from the UK to Hong Kong on 3 March 2023. A further $103 million (31 December 2021: $108 million) relates to unused tax losses that will
\nexpire within the next ten years (potential tax bene\ufb01t: $22 million), and the remainder of $1,295 million (31 December 2021: $1,274 million) has
\nno expiry date (potential tax bene\ufb01t: $277 million).
\nSome of the Group\u2019s businesses are located in jurisdictions in which a withholding tax charge is incurred upon the distribution of earnings. At
\n31 December 2022, deferred tax liabilities of $216 million (31 December 2021: $330 million) have not been recognised in respect of such
\nwithholding taxes as the Group is able to control the timing of the distributions and it is probable that the timing di\ufb00erences will not reverse in the
\nforeseeable future.
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C8 Share capital, share premium and own shares
\nShares are classi\ufb01ed as equity when their terms do not create an obligation to transfer assets. Amounts recorded in share capital represent the
\nnominal value of the shares issued. The di\ufb00erence between the proceeds received on issue of the shares, net of share issue costs, and the nominal
\nvalue of the shares issued, is credited to share premium. Where the Company purchases shares for the purposes of employee incentive plans, the
\nconsideration paid, net of issue costs, is deducted from retained earnings. Upon issue or sale any consideration received is credited to retained
\nearnings net of related costs.
\n2022
2021
\nIssued shares of 5p each fully paid
\nNumber of
\nordinary
\nshares
\nShare
\ncapital
\n$m
\nShare
\npremium
\n$m
\nNumber of
\nordinary
\nshares
\nShare
\ncapital
\n$m
\nShare
\npremium
\n$m
\nBalance at 1 Jan
2,746,412,265
182
5,010
2,609,489,702
173
2,637
\nShares issued under share-based schemes
3,257,115
\u2013
2
6,142,213
\u2013
8
\nShares issued under Hong Kong public o\ufb00er and
\ninternational placing in 2021
\nnote
\n\u2013
\u2013
(6)
130,780,350
9
2,365
\nBalance at 31 Dec
2,749,669,380
182
5,006
2,746,412,265
182
5,010
\nNote
\nIn October 2021, Prudential completed the issuance of new ordinary shares on the Hong Kong Stock Exchange, resulting in net proceeds and an increase in shareholders\u2019 equity of $2.4 billion. The
\nproceeds from this issuance were used to redeem high coupon debt instruments of US$1.3 billion in total in December 2021 and US$1.0 billion in January 2022, with the remainder used to increase
\nPrudential\u2019s central stock of liquidity, as originally intended and disclosed in Prudential\u2019s prospectus for the issuance.
\nOptions outstanding under save as you earn schemes to subscribe for shares at each year end shown below are as follows:
\nNumber of
\nshares to
\nsubscribe for
\nShare price range
\nExercisable by
\nyear
from
to
\n31 Dec 2022
1,858,292
737p
1,455p
2028
\n31 Dec 2021
2,022,535
964p
1,455p
2027
\nTransactions by Prudential plc and its subsidiaries in Prudential plc shares
\nThe Group buys and sells Prudential plc shares (\u2018own shares\u2019) in relation to its employee share schemes. The cost of own shares of $270 million at
\n31 December 2022 (31 December 2021: $267 million) is deducted from retained earnings. The Company has established trusts to facilitate the
\ndelivery of shares under employee incentive plans. At 31 December 2022, 12.6 million (31 December 2021: 11.7 million) Prudential plc shares with
\na market value of $174 million (31 December 2021: $201 million) were held in such trusts, all of which are for employee incentive plans. The
\nmaximum number of shares held during the year was 13.0 million which was in September 2022.
\nWithin the trusts, shares are notionally allocated by business unit re\ufb02ecting the employees to which the awards were made.
\nThe trusts purchased the following number of shares in respect of employee incentive plans:
\n2022
2021
\nNumber
\nof shares
\nShare price
\nCost
\n$
\nNumber
\nof shares
\nShare price
\nCost
\n$
\nLow
\n\u00a3
\nHigh
\n\u00a3
\nLow
\n\u00a3
\nHigh
\n\u00a3
\nJanuary
63,019
12.93
13.14
1,120,889
74,817
14.12
14.48
1,443,158
\nFebruary
65,223
12.43
12.49
1,098,500
69,865
12.42
12.96
1,251,067
\nMarch
73,193
10.37
10.96
1,055,044
55,545
14.91
15.49
1,189,784
\nApril
4,024,410
10.64
11.29
58,880,934
2,438,884
15.45
15.55
52,512,098
\nMay
460,897
8.95
9.05
5,288,807
52,989
15.82
15.96
1,183,836
\nJune
196,180
10.13
11.70
2,402,464
121,472
14.62
14.89
2,508,974
\nJuly
87,338
10.06
10.15
1,052,807
60,473
13.62
13.78
1,145,078
\nAugust
86,540
9.81
9.95
1,029,843
57,004
14.20
14.37
1,128,450
\nSeptember
90,843
9.24
9.73
1,000,619
312,226
14.89
15.24
7,961,098
\nOctober
175,837
9.06
9.30
1,675,634
436,771
14.48
14.99
8,410,274
\nNovember
79,326
8.99
9.04
837,944
53,867
14.77
14.83
1,072,374
\nDecember
95,680
10.63
10.74
1,240,296
76,926
13.20
13.24
1,355,942
\nTotal
5,498,486
76,683,781
3,810,839
81,162,133
\nThe cost in USD shown has been calculated from the share prices in pounds sterling using the monthly average exchange rate for the month in
\nwhich those shares were purchased.
\nA portion of the share purchases in respect of employee incentive plans as shown in the table above were made on the Hong Kong Stock
\nExchange with the remainder being made on the London Stock Exchange.
\nOther than set out above, the Group did not purchase, sell or redeem any Prudential plc listed securities during 2022.
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Strategic report
Governance
Directors\u2019 remuneration report
European Embedded Value (EEV) basis results
Additional information
Financial statements
C Financial position
/ continued
\nC9 Provisions
\n31 Dec 2022
\n$m
\n31 Dec 2021
\n$m
\nSta\ufb00 bene\ufb01ts provisions
\nnote (i)
\n341
355
\nOther provisions
7
17
\nTotal provisions
\nnote (ii)
\n348
372
\nNotes
\n(i)
Provisions for sta\ufb00 bene\ufb01ts are generally expected to be paid out within the next three years.
\n(ii)
Analysis of movement in total provisions is shown below:
\n2022
$m
2021
$m
\nBalance at 1 Jan
372
350
\nRemoval of discontinued US operations
\u2013
(14)
\nCharged (credited) to income statement:
\nAdditional provisions
231
263
\nUnused amounts released
(20)
(15)
\nUtilisation during the year
(221)
(204)
\nExchange di\ufb00erences
(14)
(8)
\nBalance at 31 Dec
348
372
\nC10 Capital
\nC10.1 Group objectives, policies and processes for managing capital
\n(a) Capital measure
\nThe Group manages its Group GWS capital resources as its measure of capital. At 31 December 2022, estimated Group shareholder GWS capital
\nresources is $23.2 billion (31 December 2021: $25.5 billion). The impacts of regulatory updates, estimated as at 31 December 2021, and
\n$1.7 billion debt redemption in January 2022, are included within the 31 December 2021 capital resources.
\n(b) External capital requirements
\nPrudential plc is subject to the Group-wide Supervision (GWS) Framework issued by the Hong Kong Insurance Authority (IA).
\nPrudential applies the Insurance (Group Capital) Rules set out in the GWS Framework to determine group regulatory capital requirements (both
\nminimum and prescribed levels). The summation of local statutory capital requirements across the Group is used to determine group regulatory
\ncapital requirements, with no allowance for diversi\ufb01cation between business operations. The GWS eligible group capital resources are determined
\nby the summation of capital resources across local solvency regimes for regulated entities and IFRS shareholders\u2019 equity, with adjustments where
\napplicable, for non-regulated entities.
\nThe recent trend to more risk-based capital regimes being adopted in many of the Group\u2019s markets is continuing and this impacts on the Group\u2019s
\nGWS capital measure, which is underpinned by the local regulatory regimes of the Group\u2019s subsidiaries, joint ventures and associates. C-ROSS
\nPhase II became e\ufb00ective in the Chinese Mainland in the \ufb01rst quarter of 2022 and, in April 2022, Prudential Hong Kong Limited received approval
\nfrom the Hong Kong IA to early adopt the new risk-based capital regime (HK RBC) e\ufb00ective from 1 January 2022.
\nMore details on Group capital are given in section I(i) in the Additional unaudited \ufb01nancial information section.
\n(c) Meeting of capital management objectives
\nThe GWS group capital adequacy requirements have been met since the GWS Framework became e\ufb00ective for Prudential upon designation. This
\nincludes maintaining total eligible group capital resources in excess of the Group Prescribed Capital Requirement (GPCR) of the supervised group
\nand maintaining Tier 1 group capital resources in excess of the Group Minimum Capital Requirement (GMCR) of the supervised group.
\nThe Group\u2019s capital management framework focuses on achieving sustainable, pro\ufb01table growth and maintaining a resilient balance sheet,
\nwith a disciplined approach to active capital allocation. As well as holding su\ufb03cient capital to meet GWS requirements at Group level, the Group
\nalso closely manages the cash it holds within its central holding companies so that it can:
\n>
Fund new opportunities;
\n>
Maintain \ufb02exibility and absorb shock events;
\n>
Cover central costs; and
\n>
Fund dividends.
\nMore details on holding company cash \ufb02ows and balances are given in section I(v) in the Additional unaudited \ufb01nancial information section.
\nThe Group monitors regulatory capital, economic capital and rating agency capital metrics and manages the business within its risk appetite by
\nremaining within its economic and regulatory capital limits. Reserve adequacy testing under a range of scenarios and dynamic solvency testing is
\ncarried out, including under certain scenarios mandated by the local regulators.
\nThe sensitivity of liabilities and other components of total capital vary depending upon the type of business concerned and this conditions the
\napproach to asset/liability management.
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C10.2 Local capital regulations
\n(a) Insurance operations
\nFor regulated insurance entities, the capital resources and required capital included in the GWS capital measure for Hong Kong IA Group
\nregulatory purposes are based on the local solvency regime applicable in each jurisdiction. The local valuation basis for the assets, liabilities and
\ncapital requirements of signi\ufb01cant insurance operations are:
\nCPL
\nA risk-based capital, risk management and governance framework, known as the China Risk Oriented Solvency System (C-ROSS), applies in the
\nChinese Mainland. Under C-ROSS, insurers are required to maintain a core solvency ratio (core capital over minimum capital) and a comprehensive
\nsolvency ratio (capital resources over minimum capital) of not lower than 50 per cent and 100 per cent, respectively.
\nThe actual capital is the di\ufb00erence between the admitted assets and admitted liabilities with trading and AFS assets marked-to-market and
\nother assets at book value. Policyholder liabilities are based on a gross premium valuation method using best estimate assumptions with a
\nseparate risk margin.
\nThe \ufb01nal regulations of C-ROSS Phase II became e\ufb00ective in the \ufb01rst quarter of 2022. The main updates to the local regulation were to
\nintroduce explicit tiering and admissibility rules on negative reserves in the capital resources and further updates to the risk calibrations used in
\ncalculating capital requirements.
\nHong Kong
\nIn April 2022, Prudential Hong Kong Limited received approval from the Hong Kong IA to early adopt the new risk-based capital regime (HK RBC)
\ne\ufb00ective from 1 January 2022. The HK RBC framework requires liabilities to be based on a gross premium valuation method using best estimate
\nassumptions and capital requirements to be risk-based, resulting in the release of prudent regulatory margins previously included in liabilities and
\nan increase in required capital.
\nIndonesia
\nSolvency capital is determined using a risk-based capital approach. The capital resources are based on assets that are marked-to-market, with
\npolicyholder liabilities based on a gross premium valuation method using best estimate assumptions with a suitable margin for prudence.
\nLiabilities are zeroised at policy level (ie negative liabilities are not permitted at a policy level). For unit-linked policies, an unearned premium
\nreserve is established.
\nMalaysia
\nA risk-based capital framework applies in Malaysia. The local regulator, Bank Negara Malaysia (BNM), has set a Supervisory Target Capital Level of
\n130 per cent, below which supervisory actions of increasing intensity will be taken. Each insurer is also required to set its own Individual Target
\nCapital Level to re\ufb02ect its own risk pro\ufb01le and this is expected to be higher than the Supervisory Target Capital Level.
\nThe capital resources are based on assets that are marked-to-market, with policyholder liabilities based on a gross premium valuation method
\nusing best estimate assumptions with a suitable margin for prudence. Liabilities are zeroised at a fund level (ie negative liabilities are not
\npermitted at a fund level). The BNM has initiated a review of its RBC framework and a discussion paper on the design of the updated RBC
\nframework was issued on 30 June 2021 with industry feedback provided by 30 September 2021. The BNM have yet to issue their \ufb01nal technical
\nspeci\ufb01cations and the exact timing of implementation of potential revisions remains uncertain as these would need to be subject to quantitative
\nimpact studies and parallel run prior to introduction.
\nMarket liberalisation measures were introduced by BNM in April 2009, which increases the limit from 49 per cent to 70 per cent on foreign
\nequity ownership for insurance companies and Takaful operators in Malaysia. A higher foreign equity limit beyond 70 per cent for insurance
\ncompanies will be considered by BNM on a case by case basis, for example, for companies who support expansion of providing insurance coverage
\nto the most vulnerable in Malaysian society.
\nSingapore
\nA risk-based capital framework applies in Singapore. The local regulator, Monetary Authority of Singapore (MAS), has the authority to direct
\ninsurance companies to satisfy additional capital adequacy requirements in addition to those set forth under the Singapore Insurance Act, if
\nconsidered appropriate. The capital resources are based on assets that are marked-to-market, with policyholder liabilities based on a gross
\npremium valuation method using best estimate assumptions with a suitable margin for prudence. The updated risk-based capital framework
\n(RBC2) permits the recognition of a prudent allowance for negative reserves in the capital resources.
\n(b) Asset management operations \u2013 regulatory and other surplus
\nCertain asset management subsidiaries of the Group are subject to local regulatory requirements. The movement in the year of the estimated
\nsurplus regulatory capital position (over the GPCR) of those subsidiaries, combined with the movement in the IFRS basis shareholders\u2019 equity for
\nunregulated asset management operations, is as follows:
\n2022
$m
2021
$m
\nBalance at 1 Jan
522
453
\nGains during the year
187
266
\nMovement in capital requirement
15
3
\nCapital injection
3
6
\nDistributions made to the parent company
(214)
(201)
\nExchange and other movements
(47)
(5)
\nBalance at 31 Dec
466
522
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Additional information
Financial statements
C Financial position
/ continued
\nC10 Capital
continued
\nC10.3 Transferability of capital resources
\nThe amounts retained within the insurance companies are at levels that provide an appropriate level of capital strength in excess of the local
\nregulatory minimum capital requirements. The businesses may, in general, remit dividends to parent entities, provided the statutory insurance
\nfund meets the local regulatory solvency requirements and there are su\ufb03cient statutory accounting pro\ufb01ts. For with-pro\ufb01ts funds, the excess of
\nassets over liabilities is retained within the funds, with distribution to shareholders tied to the shareholders\u2019 share of declared bonuses.
\nCapital resources of the non-insurance business units are transferable after taking account of an appropriate level of operating capital, based
\non local regulatory solvency requirements, where relevant.
\nC11 Property, plant and equipment
\nProperty, plant and equipment comprise Group occupied properties and tangible assets. Property, plant and equipment also includes right-of-use
\nassets for operating leases of properties occupied by the Group and leases of equipment and other tangible assets. All property, plant and
\nequipment, including the right-of-use assets under operating leases, are held at cost less cumulative depreciation, calculated using the straight-line
\nmethod, and impairment charge.
\nA reconciliation of the carrying amount of the Group\u2019s property, plant and equipment from the beginning to the end of the years shown is as
\nfollows:
\n2022
$m
2021
$m
\nGroup
\noccupied
\nproperty
\nTangible
\nassets
\nRight-of-
\nuse assets
Total
\nGroup
\noccupied
\nproperty
\nTangible
\nassets
\nRight-of-
\nuse assets
Total
\nBalance at 1 Jan
\nCost
33
489
678
1,200
355
707
710
1,772
\nAccumulated depreciation
(10)
(349)
(363)
(722)
(88)
(523)
(268)
(879)
\nOpening net book amount
23
140
315
478
267
184
442
893
\nRemoval of discontinued US operations
\u2013
\u2013
\u2013
\u2013
(242)
(32)
(35)
(309)
\nAdditions
\u2013
34
49
83
\u2013
36
59
95
\nDepreciation and impairment charge
\u2013
(39)
(106)
(145)
(1)
(45)
(123)
(169)
\nDisposals, transfers and lease modi\ufb01cations
\u2013
(2)
26
24
\u2013
\u2013
(22)
(22)
\nE\ufb00ect of movements in exchange rates
(1)
(7)
(13)
(21)
(1)
(3)
(6)
(10)
\nBalance at 31 Dec
22
126
271
419
23
140
315
478
\nRepresenting:
\nCost
32
486
676
1,194
33
489
678
1,200
\nAccumulated depreciation
(10)
(360)
(405)
(775)
(10)
(349)
(363)
(722)
\nClosing net book amount
22
126
271
419
23
140
315
478
\nRight-of-use assets
\nThe Group does not have any right-of-use assets that would meet the de\ufb01nition of investment property. As at 31 December 2022, total right-of-
\nuse assets comprised $267 million (31 December 2021: $311 million) of property and $4 million (31 December 2021: $4 million) of non-property
\nassets. Of the $271 million (31 December 2021: $315 million) total right-of-use assets, $105 million (31 December 2021: $128 million) were held by
\nthe Group\u2019s with-pro\ufb01ts businesses.
\nExtension and termination options are included in a number of property and equipment leases across the Group. These are used to maximise
\noperational \ufb02exibility in terms of managing the assets used in the Group\u2019s operations. The majority of extension and termination options held are
\nexercisable only by the Group and not by the respective lessor. The Group assesses at lease commencement whether it is reasonably certain to
\nexercise the option. This assertion is revisited if there is a material change in circumstances. As at 31 December 2022, the undiscounted value of
\nlease payments beyond the break period not recognised in the lease liabilities is $189 million (31 December 2021: $201 million).
\nThe Group has non-cancellable property subleases which have been classi\ufb01ed as operating leases under IFRS 16. The sublease rental income
\nreceived in 2022 for the leases is $6 million (2021: $6 million).
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Tangible assets
\nAt 31 December 2022, of the $126 million (31 December 2021: $140 million) tangible assets, $53 million (31 December 2021: $63 million) were
\nheld by the Group\u2019s with-pro\ufb01ts businesses.
\nCapital expenditure: property, plant and equipment by segment
\nThe capital expenditure on property, plant and equipment in 2022 of $34 million (2021: $36 million) arose as follows:
\n2022
$m
2021
$m
\nHong Kong
11
9
\nIndonesia
1
1
\nMalaysia
1
2
\nSingapore
3
1
\nGrowth markets and other
16
19
\nEastspring
2
3
\nTotal segment
34
35
\nUnallocated to a segment (central operations)
\u2013
1
\nTotal capital expenditure on property, plant and equipment
34
36
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Additional information
Financial statements
D Other information
\nD1 Corporate transactions
\nD1.1
Gain (loss) attaching to corporate transactions
\nCorporate transactions include those associated with the disposal of the Group\u2019s entities amongst other items. Where there is a disposal, income
\nand expenses of entities sold during the year are included in the income statement up to the date of disposal. The gain or loss on disposal is
\ncalculated as the di\ufb00erence between sale proceeds net of selling costs, less the net assets of the entity at the date of disposal, adjusted for foreign
\nexchange movements attaching to the sold entity that are required to be recycled to the income statement under IAS 21.
\n2022
$m
2021
$m
\nGain (loss) attaching to corporate transactions as shown separately on the Consolidated income statement
\nnote
\n55
(35)
\nLoss arising on reinsurance transaction undertaken by the Hong Kong business
(44)
(59)
\nTotal gain (loss) attaching to corporate transactions
\nnote B1.1
\n11
(94)
\nNote
\nThe gain (loss) attaching to corporate transactions largely comprises a gain of $62 million (2021: $23 million) from the sale of shares relating to the Group\u2019s retained interest in Jackson post the
\ndemerger. Other corporate transactions in 2021 largely represent costs associated with the demerger of Jackson.
\nD1.2
Discontinued US operations
\nOn 13 September 2021, the Group completed the separation of its US operations (Jackson) through a demerger. In accordance with IFRS 5
\n\u2018Non-current Assets Held for Sale and Discontinued Operations\u2019, the US operations were classi\ufb01ed as discontinued. The 2021 income statement
\nincluded the results of Jackson up to 13 September 2021, the date of demerger.
\nThe retained interest in Jackson is reported within the Consolidated statement of \ufb01nancial position as a \ufb01nancial investment at fair value and is
\nincluded in \u2018Unallocated to a segment (central operations)\u2019 for segmental analysis. This investment has been classi\ufb01ed as available-for-sale under
\nIAS 39. During 2022, transactions reduced the Group\u2019s holding to 9.2 per cent (both voting and economic interest) at 31 December 2022
\n(31 December 2021: 18.4 per cent economic interest with 18.5 per cent voting interest). The fair value of the Group\u2019s holding at 31 December 2022
\nwas $266 million (31 December 2021: $683 million).
\nThe results for the discontinued US operations presented in the consolidated \ufb01nancial statements up to the demerger in September 2021 are
\nanalysed below.
\n(a) Income statement
\n2021
$m
\nTotal revenue, net of reinsurance
45,972
\nTotal charge, net of reinsurance
(43,655)
\nPro\ufb01t before tax
2,317
\nTax charge
(363)
\nPro\ufb01t after tax
1,954
\nRemeasurement to fair value
\nnote (i)
\n(8,259)
\nCumulative valuation movements on available-for-sale debt securities, net of related tax and change in DAC, and net investment hedges
\nrecycled from other comprehensive income
\nnote (ii)
\n1,278
\nLoss for the year
(5,027)
\nAttributable to:
\nEquity holders of the Company
(4,234)
\nNon-controlling interests
(793)
\nLoss for the year
(5,027)
\nNotes
\n(i)
The loss on remeasurement to fair value on demerger was recognised in accordance with IFRIC 17 \u2018Distributions of non-cash assets to owners\u2019 with the fair value determined with reference to the
\nopening quoted price of Jackson shares on the New York Stock Exchange as at the date of demerger on 13 September 2021.
\n(ii)
In accordance with IFRS, as a result of the demerger of Jackson, accumulated balances previously recognised through other comprehensive income relating to \ufb01nancial instruments held by
\nJackson classi\ufb01ed as available-for-sale and historical net investment hedges were recycled from other comprehensive income to the results of discontinued operations in the Consolidated income
\nstatement. Total shareholders\u2019 equity is unchanged as a result of this recycling.
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(b) Total comprehensive income
\n2021
$m
\nLoss for the year
(5,027)
\nOther comprehensive loss:
\nValuation movements on available-for-sale debt securities, net of related tax and change in DAC
(763)
\nCumulative valuation movements on available-for-sale debt securities, net of related tax and change in DAC, and net investment hedges
\nrecycled through pro\ufb01t or loss at the point of demerger
(1,278)
\nOther comprehensive loss for the year
(2,041)
\nTotal comprehensive loss for the year
(7,068)
\nAttributable to:
\nEquity holders of the Company
(6,283)
\nNon-controlling interests
(785)
\nTotal comprehensive loss for the year
(7,068)
\n(c) Cash \ufb02ows
\n2021
$m
\nNet cash \ufb02ows from operating activities
(423)
\nNet cash \ufb02ows from \ufb01nancing activities
\nnote
\n2,329
\nCash divested upon demerger
(3,527)
\nNet decrease in cash and cash equivalents
(1,621)
\nCash and cash equivalents at 1 Jan
1,621
\nCash and cash equivalents at 31 Dec
\u2013
\nNote
\nFinancing activities in 2021 largely re\ufb02ected the issuance of debt of $2,350 million. No dividends were paid by Jackson during 2021 prior to demerger.
\nD2 Contingencies and related obligations
\nLitigation and regulatory matters
\nThe Group is involved in various litigation and regulatory proceedings. While the outcome of such litigation and regulatory issues cannot be
\npredicted with certainty, the Group believes that their ultimate outcome will not have a material adverse e\ufb00ect on the Group\u2019s \ufb01nancial condition,
\nresults of operations, or cash \ufb02ows.
\nGuarantees
\nThe Group has provided guarantees and commitments to third parties entered into in the normal course of business and the Company has
\nguaranteed public debt securities issued by one of its wholly-owned subsidiaries, Prudential Funding (Asia) PLC from early 2023. The Group
\nconsiders the likelihood of out\ufb02ows arising under such guarantees and commitments as remote.
\nIntra-group capital support arrangements
\nPrudential has put in place intra-group arrangements to formalise undertakings by Prudential to the regulators of the Hong Kong subsidiaries
\nregarding their solvency levels. Other intra-group transactions are discussed in note D4 below.
\nD3 Post balance sheet events
\nDividends
\nThe 2022 second interim dividend approved by the Board of Directors after 31 December 2022 is as described in note B5.
\nDebt redemption
\nOn 20 January 2023 the Company redeemed senior debt instruments of \u00a3300 million, as described in note C5.1.
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Financial statements
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/ continued
\nD4 Related party transactions
\nTransactions between the Company and its subsidiaries or intra-group transactions are eliminated on consolidation. Intra-group transactions of
\nthe Group mainly related to a limited number of loans, guarantees or services provided by the Company to or from others business units, or
\nbetween business units, including investment management services provided by the Group\u2019s asset managers to the insurance operations
\nbusinesses as shown in note B1.3. All intra-group transactions are subject to the same internal approval framework as external transactions. As the
\nGroup\u2019s business units operate independently, overall there is limited interconnectedness across the Group. The Group reviews its recovery plan
\n(that also covers intra-group transactions and the level of the Group\u2019s interconnectivity risk) on an annual basis and details the remedial actions
\nthat could be used to restore \ufb01nancial strength and viability if the Group were to come under severe stress.
\nThe Company has transactions and outstanding balances with collective investment schemes and similar entities that are not consolidated
\nand where a Group company acts as manager, which are regarded as related parties for the purposes of IAS 24. The balances are included in the
\nGroup\u2019s statement of \ufb01nancial position at fair value or amortised cost in accordance with IAS 39 classi\ufb01cations with the corresponding amounts
\nincluded in the income statement. The transactions include amounts paid on issue of shares or units, amounts received on cancellation of shares
\nor units and amounts paid in respect of the periodic charge and administration fee.
\nIn addition, there are no material transactions between the Group\u2019s joint ventures and associates, which are accounted for on an equity method
\nbasis, and other Group companies.
\nKey management personnel of the Company, as described in note B2.3, may from time to time purchase insurance, asset management or
\nannuity products marketed by Group companies in the ordinary course of business on substantially the same terms as those prevailing at the time
\nfor comparable transactions with other persons.
\nIn 2022, transactions with key management personnel were not deemed to be signi\ufb01cant both by virtue of their size and in the context of the
\nindividuals\u2019 \ufb01nancial positions. All of these transactions were on terms broadly equivalent to those that prevailed in arm\u2019s-length transactions.
\nOn 5 April 2021, pursuant to a separation agreement, Jackson National Life agreed to pay circa $23.5 million to Michael Falcon, the former
\nchief executive o\ufb03cer of Jackson, as a series of cash lump sum payments for termination of loss of o\ufb03ce, and agreed that Mr Falcon would retain
\n98,311 Prudential ADRs that had been previously deferred under the Deferred Annual Incentive Plan. Prudential agreed to reimburse Jackson
\nNational Life for such payments and settled this obligation prior to the demerger on 13 September 2021. On completion of the demerger, the
\nPrudential ADRs were translated into Jackson Shares with an equivalent value. They will be released on the original timeline, ie in 2022 and 2023,
\nand remain subject to the original malus and clawback provisions. Other transactions with those individuals meeting the de\ufb01nition of key
\nmanagement personnel in 2021 were not deemed to be signi\ufb01cant using the criteria described above.
\nAdditional details on the Directors\u2019 interests in shares, transactions or arrangements are given in the Directors\u2019 remuneration report. Key
\nmanagement remuneration is disclosed in note B2.3.
\nD5 Commitments
\nThe Group has provided, from time to time, certain commitments to third parties.
\nAt 31 December 2022, the Group had $2,626 million unfunded commitments (31 December 2021: $2,878 million) primarily related to
\ninvestments in infrastructure funds and alternative investment funds in Asia.
\nD6 Investments in subsidiary undertakings, joint ventures and associates
\nD6.1
Basis of consolidation
\nThe Group consolidates those investees it is deemed to control. The Group has control over an investee if all three of the followings are met: (1) it
\nhas power over an investee; (2) it is exposed to, or has rights to, variable returns from its involvement with the investee; and (3) it has the ability to
\nuse its power over the investee to a\ufb00ect its own returns.
\n(a) Subsidiaries
\nSubsidiaries are those investees that the Group controls. The majority of the Group\u2019s subsidiaries are corporate entities.
\nThe Group performs a re-assessment of consolidation whenever there is a change in the substance of the relationship between the Group and
\nan investee. Where the Group is deemed to control an entity, it is treated as a subsidiary and its results, assets and liabilities are consolidated.
\nWhere the Group holds a minority share in an entity with no control over the entity, the investments are carried at fair value within \ufb01nancial
\ninvestments in the Consolidated statement of \ufb01nancial position.
\nEntities consolidated by the Group include Qualifying Partnerships as de\ufb01ned under the UK Partnerships (Accounts) Regulations 2008 (the
\n\u2018Partnerships Act\u2019). The Group\u2019s limited partnership has taken advantage of the exemption under regulation 7 of the Partnerships Act from the
\n\ufb01nancial statement requirements. This is under regulations 4 to 6, on the basis that the limited partnership is dealt with on a consolidated basis in
\nthese \ufb01nancial statements.
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(b) Joint ventures and associates
\nJoint ventures are joint arrangements arising from a contractual agreement whereby the Group and other investors have joint control of the net
\nassets of the arrangement. In a number of these arrangements, the Group\u2019s share of the underlying net assets may be less than 50 per cent but
\nthe terms of the relevant agreement make it clear that control is jointly exercised between the Group and the third party. Associates are entities
\nover which the Group has signi\ufb01cant in\ufb02uence but does not control. Generally, it is presumed that the Group has signi\ufb01cant in\ufb02uence if it holds
\nbetween 20 per cent and 50 per cent voting rights of an entity.
\nWith the exception of those referred to below, the Group accounts for its investments in joint ventures and associates using the equity method
\nof accounting. The Group\u2019s share of pro\ufb01t or loss of its joint ventures and associates is recognised in the income statement and its share of
\nmovements in other comprehensive income is recognised in other comprehensive income. The equity method of accounting does not apply to
\ninvestments in joint ventures and associates held by the Group\u2019s insurance or investment funds, including collective investment schemes which, as
\nallowed by IAS 28 \u2018Investments in Associates and Joint Ventures\u2019, are carried at fair value through pro\ufb01t or loss.
\n(c) Structured entities
\nStructured entities are those that have been designed so that voting or similar rights are not the dominant factor in deciding who controls the
\nentity. Voting rights relate to administrative tasks. Relevant activities are directed by means of contractual arrangements. The Group invests in
\nboth consolidated and unconsolidated structured entities including investment vehicles such as collective investment schemes, collateralised debt
\nobligations, mortgage-backed securities and similar asset-backed securities.
\nCollective investment schemes
\nThe Group invests in collective investment schemes that invest mainly in equities, bonds, cash and cash equivalents and properties. In assessing
\ncontrol under IFRS 10 \u2018Consolidated Financial Statements\u2019, the Group determines whether it is acting as principal or agent and the variable returns
\nfrom its involvement with these entities. The Group\u2019s percentage ownership in these entities can \ufb02uctuate on a daily basis according to the
\nparticipation of the Group and other investors.
\nWhere the entity is managed by a Group asset manager:
\n>
Where the Group\u2019s ownership holding in the entity exceeds 50 per cent, the Group is judged to have control over the entity;
\n>
Where the Group\u2019s ownership holding in the entity is between 20 per cent and 50 per cent, the facts and circumstances of the Group\u2019s
\ninvolvement in the entity are considered, including the rights to any fees earned by the asset manager, in forming a judgement as to whether
\nthe Group has control over the entity;
\n>
Where the Group\u2019s ownership holding in the entity is less than 20 per cent, the Group is judged to not have control over the entity.
\nWhere the entity is managed by an asset manager outside the Group, an assessment is made of whether the Group has existing rights that gives
\nit the ability to direct the current activities of the entity and therefore control the entity. In assessing the Group\u2019s ability to direct an entity, the
\nGroup considers its ability relative to other investors.
\nWhere the Group is deemed to control an entity, it is treated as a subsidiary and is consolidated, with the interests of investors other than the
\nGroup being classi\ufb01ed as liabilities, and presented within \u2018Net asset value attributable to unit holders of consolidated investment funds\u2019.
\nWhere the Group does not control these entities (where the Group is deemed to be acting as an agent under IFRS 10) and they do not meet the
\nde\ufb01nition of associates, they are carried at FVTPL within \ufb01nancial investments in the Consolidated statement of \ufb01nancial position.
\nWhere the Group\u2019s asset manager sets up investment funds as part of its asset management operations, unless the Group also participates in
\nthe ownership holding of the entities, the Group\u2019s interest is limited to the fees charged to manage the assets of such entities. With no
\nparticipation in ownership holding of these entities, the Group does not retain risks associated with investment funds. For these investment funds,
\nthe Group is not deemed to control the entities but deemed to be acting as an agent.
\nThe Group generates returns and retains the ownership risks in these investment vehicles commensurate to its participation and does not have
\nany further exposure to the residual risks of these investment vehicles.
\nOther structured entities
\nThe Group holds investments in mortgage-backed securities, collateralised debt obligations and similar asset-backed securities, the majority of
\nwhich are actively traded in a liquid market.
\nThe Group consolidates the vehicles that hold the investments where the Group is deemed to control the vehicles. When assessing control over
\nthe vehicles, the factors considered include the purpose and design of the vehicle, the Group\u2019s exposure to the variability of returns and the scope
\nof the Group\u2019s ability to direct the relevant activities of the vehicle including any kick-out or removal rights that are held by third parties. The
\noutcome of the control assessment is dependent on the terms and conditions of the respective individual arrangements.
\nThe majority of such vehicles are not consolidated. In these cases, the Group is not the sponsor of the vehicles in which it holds investments and
\nhas no administrative rights over the vehicles\u2019 activities. The Group generates returns and retains the ownership risks commensurate to its holding
\nand its exposure to the investments and does not have any further exposure to the residual risks or losses of the investments or the vehicles in
\nwhich it holds investments. Accordingly, the Group does not have power over the relevant activities of such vehicles and all are carried at FVTPL
\nwithin \ufb01nancial investments in the Consolidated statement of \ufb01nancial position.
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Additional information
Financial statements
D Other information
/ continued
\nD6 Investments in subsidiary undertakings, joint ventures and associates
continued
\nD6.1
Basis of consolidation
continued
\nThe table below provides aggregate carrying amounts of the investments in unconsolidated structured entities reported in the Group\u2019s
\nConsolidated statement of \ufb01nancial position:
\nConsolidated statement of \ufb01nancial position line items
\n31 Dec 2022
$m
31 Dec 2021
$m
\nInvestment
\nfunds
\nOther
\nstructured
\nentities
Investment
\nOther
\nstructured
\nentities
\nEquity securities and holdings in collective investment schemes
30,771
\u2013
35,446
\u2013
\nDebt securities
\u2013
370
\u2013
251
\nTotal investments in unconsolidated structured entities
30,771
370
35,446
251
\nThe Group\u2019s maximum exposure to loss related to the interest in unconsolidated structured entities is limited to the carrying value in the
\nConsolidated statement of \ufb01nancial position and the unfunded investment commitments provided by the Group (see note D5).
\nDuring the year, the Group receives dividend and interest income from its investments in these unconsolidated structured entities. Where the
\nGroup\u2019s asset manager manages these entities, such as the collective investment schemes, the Group also receives asset management fees from
\nthese entities.
\nAs at 31 December 2022 and 2021, the Group does not have an agreement, contractual or otherwise, or intention to provide \ufb01nancial support
\nto structured entities (both consolidated and unconsolidated) that could expose the Group to a loss.
\nD6.2
Dividend restrictions and minimum capital requirements
\nCertain Group entities are subject to restrictions on the amounts of funds they may transfer in the form of cash dividends or otherwise to the
\nparent company.
\nUnder UK company law, UK companies can only declare dividends if they have su\ufb03cient distributable reserves.
\nThe Group\u2019s subsidiaries, joint ventures and associates may remit dividends to the Group, in general, provided the statutory insurance fund
\nmeets the capital adequacy standard required under local statutory regulations and has su\ufb03cient distributable reserves. Further details on local
\ncapital regulations in certain Asia operations are provided in note C10.2.
\nD6.3
Investments in joint ventures and associates
\nJoint ventures represent arrangements where the controlling parties through contractual or other agreement have the rights to the net assets of
\nthe arrangements. The Group has insurance and asset management joint ventures in Chinese Mainland with CITIC Group and an asset
\nmanagement joint venture in India with ICICI Bank. In addition, there is an asset management joint venture in Hong Kong with Bank of China
\nInternational Holdings Limited (BOCI) and Takaful insurance joint venture in Malaysia. For the Group\u2019s joint ventures that are accounted for using
\nthe equity method, the net-of-tax results of these operations are included in the Group\u2019s pro\ufb01t before tax.
\nThe Group\u2019s associates, which are also accounted for using the equity method, include the Indian insurance entity (with the majority
\nshareholder being ICICI Bank).
\nIn addition, the Group has investments in collective investment schemes, funds holding collateralised debt obligations and property funds
\nwhere the Group has signi\ufb01cant in\ufb02uence. As allowed under IAS 28, these investments are accounted for on a FVTPL basis. The aggregate fair
\nvalue of associates accounted for at fair value through pro\ufb01t or loss, where there are published price quotations, is approximately $0.3 billion at
\n31 December 2022 (31 December 2021: $0.6 billion).
\nFor joint ventures and associates accounted for using the equity method, the 12 months \ufb01nancial information of these investments for the
\nyears ended 31 December 2022 and 2021 (covering the same period as that of the Group) has been used in these consolidated \ufb01nancial
\nstatements.
\nThe Group\u2019s share of the pro\ufb01t for shareholder-backed business (including short-term \ufb02uctuations in investment returns), net of related tax, in
\njoint ventures and associates equity accounted for as shown in the Consolidated income statement, is allocated across segments as follows:
\n2022
$m
2021
$m
\nCPL
(144)
278
\nHong Kong
\u2013
9
\nMalaysia
24
28
\nGrowth markets and other
\nnote
\n5
(110)
\nInsurance operations
(115)
205
\nEastspring
144
147
\nTotal segment and Group total
29
352
\nNote
\nFor growth markets and other, as well as the segment results for associates and joint ventures within the segment, the amount shown includes other items of $15 million (2021: $(38) million) which
\nprimarily comprise of taxes for all life joint ventures and associates together with other non-recurring items.
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There is no other comprehensive income in the joint ventures and associates other than the foreign exchange di\ufb00erences that arise from
\ntranslating the associates and joint ventures into the Group\u2019s presentational currency. There has been no unrecognised share of losses of a joint
\nventure or associate that the Group has stopped recognising in total comprehensive income.
\nThe Group\u2019s interest in joint ventures and associates gives rise to no contingent liabilities or capital commitments that are material to the Group.
\nCITIC-Prudential Life Insurance Company (CPL)
\nCPL is the Group\u2019s joint venture with the CITIC Group in which the Group owns a 50 per cent interest. The joint venture is incorporated in China and
\nis principally engaged in underwriting insurance and investment contracts. The summarised \ufb01nancial information for CPL, which is considered to
\nbe a material joint venture to the Group, is set out below. The \ufb01nancial information represents the entity\u2019s \ufb01nancial statements prepared in
\naccordance with Group\u2019s IFRS accounting policies, on a 100 per cent basis, for the years shown:
\nStatement of \ufb01nancial position:
\n31 Dec 2022
\n$m
\n31 Dec 2021
\n$m
\nTotal assets
31,608
29,237
\nTotal liabilities (including non-controlling interest)
29,330
26,523
\nShareholders\u2019 equity
2,278
2,714
\nThe above amounts of assets and liabilities include the following:
\nCash and cash equivalents
561
422
\nFinancial liabilities (excluding trade and other payables and provisions)
985
938
\nIncome statement:
2022
$m
2021
$m
\nRevenue
5,778
7,374
\nPro\ufb01t for the year after tax
(248)
453
\nThe above pro\ufb01t for the year includes the following:
\nDepreciation and amortisation
(106)
(86)
\nInterest income
599
465
\nInterest expense
(3)
(2)
\nIncome tax credit (charge)
40
(84)
\nThe summarised \ufb01nancial information above is reconciled to the carrying amount of the Group\u2019s interest in the joint venture recognised in the
\nconsolidated \ufb01nancial statements as follows:
\n31 Dec 2022
\n$m
\n31 Dec 2021
\n$m
\nNet assets of CITIC-Prudential Life as shown above
2,278
2,714
\nProportion owned by the joint venture partner (50%)
1,139
1,357
\nCarrying amount of the Group\u2019s interest in the joint venture (50%)
1,139
1,357
\nThe Group has received no dividends from CPL in 2022 (2021: $57 million).
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\nGroup overview
Strategic report
Governance
Directors\u2019 remuneration report
European Embedded Value (EEV) basis results
Additional information
Financial statements
D Other information
/ continued
\nD6 Investments in subsidiary undertakings, joint ventures and associates
continued
\nD6.4 Related undertakings
\nIn accordance with Section 409 of the Companies Act 2006, a list of Prudential Group\u2019s subsidiaries, joint ventures, associates and signi\ufb01cant
\nholdings (being holdings of more than 20 per cent) is disclosed below, along with the classes of shares held, the registered o\ufb03ce address and the
\ne\ufb00ective percentage of equity owned at 31 December 2022. The Group also operates through branches, none of which are signi\ufb01cant.
\nThe de\ufb01nitions of a subsidiary undertaking, joint venture and associate in accordance with the Companies Act 2006 are di\ufb00erent from the
\nde\ufb01nition under IFRS Standards. As a result, the related undertakings included within the list below may not be the same as the undertakings
\nconsolidated in the Group consolidated \ufb01nancial statements. The Group\u2019s consolidation policy is described in note D6.1.
\nCITIC-
\nPrudential
\nLife Insurance
\nCompany
\nLimited
\n\u2020
\n(CPL
\n)*
\nPT. Prudential
\nLife Assurance
\n(Indonesia)
\n\u2020
\nPrudential
\nAssurance
\nCompany
\nSingapore (Pte)
\nLimited
\n\u2020
\nGrowth markets
\nand other
\nentities
\n\u2020
\n(including Africa,
\nCambodia, India,
\nLaos, Myanmar,
\nPhilippines,
\nTaiwan, Thailand,
\nVietnam)
\nPrudential
\nHong Kong
\nLimited
\nPrudential
\nGeneral
\nInsurance Hong
\nKong Limited
\nPrudential
\nAssurance
\nMalaysia
\nBerhad
\n\u2020
\nEastspring
\nInvestments
\nGroup Pte. Ltd.
\n\u2020
\nand subsidiaries
\nPrudential
\nInternational
\nTreasury
\nLimited
\nPrudential plc
\nPrudential Corporation Asia Limited
\nPrudential Group Holdings Limited
\nand subsidiaries
\n* CPL is a joint venture with CITIC, a leading state owned conglomerate.
\n\u2020 Indirectly held by Prudential Corporation Asia Limited.
\nDirect subsidiary undertakings of the parent company, Prudential plc (shares held directly or via nominees)
\nName of entity
\nClasses of
\nshares held
\nProportion
\nheld
Registered o\ufb03ce address
\nPrudential Corporation Asia Limited
OS
100.00%
13th Floor, One International Finance Centre, 1 Harbour View Street, Central, Hong Kong
\nPrudential Group Holdings Limited
OS
100.00%
1 Angel Court, London, EC2R 7AG, United Kingdom
\nOther subsidiaries, joint ventures, associates and signi\ufb01cant holdings of the Group \u2013 no shares held directly by the parent company (Prudential plc)
\nor its nominees
\nName of entity
\nClasses of
\nshares held
\nProportion
\nheld
Registered o\ufb03ce address
\nAberdeen Cash Creation Fund
U
30.62%
28th Floor Bangkok City Tower, 179 South Sathorn Road, Thungmahamek, Sathorn,
\nBangkok 10120, Thailand
\nAberdeen Standard Global Opportunities Fund
U
34.61%
21 Church Street, #01-01, Capital Square Two, Singapore 049480
\nAberdeen Standard Singapore Equity Fund
U
62.18%
\nAC Financial Partners Limited Partnership
PI
100.00%
65 Haymarket Terrace, Edinburgh, EH12 5HD
\nAlternatives North America, Ltd.
U
100.00%
PO Box 1093, Queensgate House, Grand Cayman, KY1-1102, Cayman Islands
\nBOCHK Aggressive Growth Fund
U
47.75%
27th Floor, Bank of China Tower, 1 Garden Road, Hong Kong
\nBOCHK Balanced Growth Fund
U
41.47%
\nBOCHK China Equity Fund
U
73.71%
\nBOCHK Conservative Growth Fund
U
42.71%
\nBOCHK US Dollar Money Market Fund
U
21.91%
\nBOCI-Prudential Asset Management Limited
OS
36.00%
\nBOCI-Prudential Trustee Limited
OS
36.00%
Suites 1501-1507 & 1513-1516, 15th Floor, 1111 King's Road, Taikoo Shing, Hong Kong
\nCathay High Yield Ex China Cash Pay 1-5 Year 2% Issuer
\nCapped ETF
\nU
42.71%
6th Floor, No.39, Sec.2, Dunhua South. Road, Taipei, Taiwan
\nCITIC-CP Asset Management Co., Ltd.
MI - JV
26.95%
Room 101-2, No.128 North Zhangjiabang Road, Pudong District, Shanghai, China
\nCITIC-Prudential Fund Management Company Limited
MI - JV
49.00%
Level 9, HSBC Building, Shanghai IFC, 8 Century Avenue, Pudong, Shanghai, China
\nCITIC-Prudential Life Insurance Company Limited
MI - JV
50.00%
Room 1101-A, 1201, 1301, 1401, 1501, 1601, 1701, 1801, Unit 01, Building 1, No. B2, North
\nRoad of East Third Ring Road, Chaoyang District, Beijing, PRC,100027, China
\nEastspring Al-Wara' Investments Berhad
OS
100.00%
Level 25, Menara Hong Leong, No. 6 Jalan Damanlela, Bukit Damansara, 50490 Kuala
\nLumpur, Malaysia
\nEastspring Asia Paci\ufb01c High Yield Equity Fund
U
37.57%
4th Floor, No.1, Songzhi Road, Xinyi Dist., Taipei, Taiwan
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Name of entity
\nClasses of
\nshares held
\nProportion
\nheld
Registered o\ufb03ce address
\nEastspring Asset Management (Thailand) Co., Ltd.
OS
59.50%
944 Mitrtown O\ufb03ce Tower, 9th Floor, Rama 4 Road, Wangmai, Pathumwan, Bangkok
\n10330, Thailand
\nEastspring Asset Management Korea Co. Ltd.
OS
100.00%
22nd Floor (Seoul International Finance Center, Yeouido dong), 10 Gukjegeumyung-ro,
\nYeongdeungpo-gu, Seoul, Republic of Korea 07326
\nEastspring Investment K-Short Term Bond Alpha Securities
\nInvestment Trust(Bond Balanced)
\nU
27.54%
22nd Floor One IFC, 10 Gukjegeumyung-ro, Youngdungpo-gu, Seoul 07326, Korea
\nEastspring Investment Management (Shanghai) Company
\nLimited
\nMI - WFOE
100.00%
Unit 306-308, 3rd Floor, Azia Center, 1233 Lujiazui Ring Road, China (Shanghai) Pilot Free
\nTrade Zone, China
\nEastspring Investments - Asia Opportunities Equity Fund
U
99.97%
26, Boulevard Royal, L-2449, Luxembourg
\nEastspring Investments - Global Growth Equity Fund
U
59.04%
\nEastspring Investments - Global Low Volatility Equity Fund
U
96.36%
\nEastspring Investments - Global Technology Fund
U
82.06%
\nEastspring Investments - Pan European Fund
U
61.34%
\nEastspring Investments - US High Yield Bond Fund
U
46.85%
\nEastspring Investments - US Investment Grade Bond Fund
U
68.91%
\nEastspring Investments - World Value Equity Fund
U
95.64%
\nEastspring Investments (Hong Kong) Limited
OS
100.00%
13th Floor, One International Finance Centre, 1 Harbour View Street, Central, Hong Kong
\nEastspring Investments (Luxembourg) S.A.
OS
100.00%
26, Boulevard Royal, L-2449 Luxembourg, Grand Duchy of Luxembourg
\nEastspring Investments (Singapore) Limited
OS
100.00%
10 Marina Boulevard, #32-01, Marina Bay Financial Centre, Singapore 018983
\nEastspring Investments Asia Paci\ufb01c Equity Fund
U
93.92%
26, Boulevard Royal, L-2449, Luxembourg
\nEastspring Investments Asia Paci\ufb01c ex-Japan Target Return
\nFund
\nU
75.84%
Eastspring Investments Berhad, Level 22, Menara Prudential, Persiaran TRX Barat, 55188
\nTun Razak Exchange, Kuala Lumpur, Malaysia
\nEastspring Investments Asia Real Estate Multi Asset Income
\nFund
\nU
73.95%
26, Boulevard Royal, L-2449, Luxembourg
\nEastspring Investments Asia Sustainable Bond Fund
U
93.97%
\nEastspring Investments Asian Bond Fund
U
42.30%
\nEastspring Investments Asian Dynamic Fund
U
91.58%
\nEastspring Investments Asian Equity Fund
U
98.97%
\nEastspring Investments Asian Equity Income Fund
U
87.52%
\nEastspring Investments Asian High Yield Bond Fund
U
44.35%
\nEastspring Investments Asian Investment Grade Bond Fund
U
90.06%
\nEastspring Investments Asian Low Volatility Equity Fund
U
89.01%
\nEastspring Investments Asian Multi Factor Equity Fund
U
90.94%
\nEastspring Investments Berhad
OS
100.00%
Level 25, Menara Hong Leong, No. 6 Jalan Damanlela, Bukit Damansara, 50490 Kuala
\nLumpur, Wilayah Persekutuan, Malaysia
\nEastspring Investments China A Shares Growth Fund
U
63.69%
26, Boulevard Royal, L-2449, Luxembourg
\nEastspring Investments Dragon Peacock Fund
U
95.82%
\nEastspring Investments Emerging Markets Star Players
U
40.88%
Eastspring Investments Limited, Marunouchi Park Bldg., 2-6-1 Marunochi, Chiyoda-ku,
\nTokyo, Japan 100-6905
\nEastspring Investments Equity Income Fund
U
40.95%
Eastspring Investments Berhad, Level 22, Menara Prudential, Persiaran TRX Barat, 55188
\nTun Razak Exchange, Kuala Lumpur, Malaysia
\nEastspring Investments European Investment Grade Bond
\nFund
\nU
99.91%
26, Boulevard Royal, L-2449, Luxembourg
\nEastspring Investments Fund Management Limited
\nLiability Company
\nMI
100.00%
23rd Floor, Saigon Trade Center, 37 Ton Duc Thang Street, District 1, Ho Chi Minh City,
\nVietnam
\nEastspring Investments Global Emerging Markets Bond
\nFund
\nU
99.38%
26, Boulevard Royal, L-2449, Luxembourg
\nEastspring Investments Global Emerging Markets Dynamic
\nFund
\nU
62.79%
\nEastspring Investments Global Emerging Markets ex-China
\nDynamic Fund
\nU
99.96%
\nEastspring Investments Global Equity Navigator Fund
U
97.19%
\nEastspring Investments Global Growth Fund
U
40.22%
Eastspring Investments Berhad, Level 22, Menara Prudential, Persiaran TRX Barat, 55188
\nTun Razak Exchange, Kuala Lumpur, Malaysia
\nEastspring Investments Global Market Navigator Fund
U
99.75%
26, Boulevard Royal, L-2449, Luxembourg
\nEastspring Investments Global Multi Asset Income Plus
\nGrowth Fund
\nU
100.00%
\nEastspring Investments Greater China Equity Fund
U
90.60%
\nEastspring Investments Group Pte. Ltd.
OS
100.00%
10 Marina Boulevard, #32-01, Marina Bay Financial Centre, Singapore 018983
\nEastspring Investments Incorporated
OS
100.00%
874 Walker Road, Suite C, City of Dover, County of Kent, State of Delaware, 19904, USA
\nEastspring Investments India Consumer Equity Open
\nLimited
\nOS
100.00%
3rd Floor, 355 NEX, Rue du Savoir, Cybercity Ebene 72201, Mauritius
\nEastspring Investments India Equity Fund
U
79.97%
26, Boulevard Royal, L-2449, Luxembourg
\nEastspring Investments India Equity Open Limited
OS
100.00%
3rd Floor, 355 NEX, Rue du Savoir, Cybercity Ebene 72201, Mauritius
\nEastspring Investments India Infrastructure Equity Open
\nLimited
\nOS
100.00%
\nKey to share classes:
\nLBG
Limited by Guarantee
\nMI
Membership Interest
\nMI - WFOE
Membership Interest of a Wholly Foreign Owned Enterprise in the Chinese Mainland
\nMI \u2013 JV
Membership Interest of a Sino-Foreign Equity Joint Venture in the Chinese Mainland
\nOS
Ordinary Shares
\nPI
Partnership Interest
\nPS
Preference Shares
\nU
Units
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\nGroup overview
Strategic report
Governance
Directors\u2019 remuneration report
European Embedded Value (EEV) basis results
Additional information
Financial statements
D Other information
/ continued
\nName of entity
\nClasses of
\nshares held
\nProportion
\nheld
Registered o\ufb03ce address
\nEastspring Investments Limited
OS
100.00%
Marunouchi Park Building, 6-1 Marunouchi 2-chome, Chiyoda-Ku, Tokyo, Japan
\nEastspring Investments MY Focus Fund
U
28.33%
Eastspring Investments Berhad, Level 22, Menara Prudential, Persiaran TRX Barat, 55188
\nTun Razak Exchange, Kuala Lumpur, Malaysia
\nEastspring Investments Private Fixed Income Fund Number 1
U
87.11%
Units 306-308, 3rd Floor, Azia Center 1233 Lujiazui Ring Road, Shanghai, China
\nEastspring Investments Services Pte. Ltd.
OS
100.00%
10 Marina Boulevard, #32-01, Marina Bay Financial Centre, Singapore 018983
\nEastspring Investments SICAV-FIS \u2013 Alternative
\nInvestments Fund
\nU
100.00%
26, Boulevard Royal, L-2449, Luxembourg
\nEastspring Investments SICAV-FIS \u2013 Asia Paci\ufb01c Loan Fund
U
100.00%
\nEastspring Investments Syariah Equity Islamic Asia Paci\ufb01c
\nUSD Kelas B
\nU
88.02%
Prudential Tower, 23rd Floor, Jl. Jend. Sudirman Kav.79, Jakarta 12910, Indonesia
\nEastspring Investments Unit Trusts - Dragon Peacock Fund
U
97.69%
10 Marina Boulevard, #32-01, Marina Bay Financial Centre, Singapore 018983
\nEastspring Investments Unit Trusts Singapore ASEAN
\nEquity Fund
\nU
98.74%
\nEastspring Investments Unit Trusts Singapore Select Bond
\nFund
\nU
66.05%
\nEastspring Investments US Corporate Bond Fund
U
60.04%
26, Boulevard Royal, L-2449, Luxembourg
\nEastspring Investments US High Investment Grade Bond
\nFund
\nU
87.42%
\nEastspring Investments Vietnam Navigator Fund
U
76.79%
23rd Floor, Saigon Trade Center Building, 37 Ton Duc Thang Street, Ben Nghe Ward,
\nDistrict 1, Ho Chi Minh City, Vietnam
\nEastspring Investments-Global Emerging Markets
\nFundamental Value Fund
\nU
99.96%
26, Boulevard Royal, L-2449, Luxembourg
\nEastspring Investments-Japan Sustainable Value Fund
U
100.00%
\nEastspring Overseas Investment Fund Management
\n(Shanghai) Company Limited
\nMI - WFOE
100.00%
Unit 306-308, 3rd Floor, 1233 Lujiazui Ring Road, China (Shanghai) Pilot Free Trade Zone,
\nChina
\nEastspring Private Equity Fund 2
U
99.99%
10 Marina Boulevard, #32-01, Marina Bay Financial Centre Tower 2, Singapore 018983
\nEastspring Securities Investment Trust Co., Ltd.
OS
99.54%
4th Floor, No.1 Songzhi Road, Taipei 110, Taiwan
\nEastspring Singapore Alternatives VCC
U
100.00%
10 Marina Boulevard, #32-01, Marina Bay Financial Centre, Singapore 018983
\nEastspring Syariah Fixed Income USD Kelas A
U
69.23%
Prudential Tower Lantai 23, JI. Jend. Sudirman Kav. 79, Jakarta 12910, Indonesia
\nFCP Ecobank Actions Uemoa
U
43.63%
Immeuble Ecobank, 2Er Etage -Avenue Houdaille Plateau, 01 B.P 4107 Abidjan O1 Cote
\nD\u2019Ivoire
\nFirst Sentier Global Property Securities Fund
U
67.50%
79 Robinson Road, #17-01, Singapore 068897
\nFSSA China Focus Fund
U
67.76%
70 Sir John Rogerson\u2019s Quay, Dublin 2, D02 R296, Ireland
\nFubon 1-5 Years US High Yield Bond Ex China
U
61.05%
8th Floor, No.108, Sec.1, Dunhua South. Road, Taipei, Taiwan
\nFubon China Bond Umbrella Fund - Fubon China Quality
\nRmb Bond Fund
\nU
23.37%
\nFubon China Currency Fund
U
35.49%
\nFuh Hwa 1-5 Yr High Yield ETF
U
44.22%
8th & 9th Floor, No.308, Sec. 2, Bade Road, Da-an District
\nFuh Hwa Emerging Market RMB Fixed Income Fund
U
46.42%
\nFuh Hwa Rmb Money Market Fund
U
37.52%
\nFurnival Insurance Company PCC Limited
OS
100.00%
PO Box 155, Mill Court, La Charroterie, St Peter Port, GY1 4ET, Guernsey
\nGIS Total Return Bond Fund
U
27.53%
78 Sir John Rogerson's Quay, Dublin, D02 HD32, Ireland
\nGS Twenty Two Limited
OS
100.00%
1 Angel Court, London, EC2R 7AG, United Kingdom
\nHSBC Asia Paci\ufb01c Ex Japan Sustainable Equity UCITS ETF
U
63.65%
25/28 North Wall Quay, IFSC, Dublin 1, Ireland
\nHSBC Senior Global Infrastructure Debt Fund
U
100.00%
8 Canada Square, London, E14 5HQ, United Kingdom
\nICICI Prudential Asset Management Company Limited
OS
49.00%
12th Floor, Narain Manzil, 23, Barakhamba Road, New Delhi 110001, India
\nICICI Prudential Life Insurance Company Limited
OS
22.07%
ICICI PruLife Towers, 1089 Appasaheb Marathe Marg, Prabhadevi,
\nMumbai 400025, India
\nICICI Prudential Pension Funds Management Company
\nLimited
\nOS
22.07%
\nICICI Prudential Trust Limited
OS
49.00%
12th Floor, Narain Manzil, 23, Barakhamba Road, New Delhi 110001, India
\nIndia Innovation High Growth EQ QII
U
100.00%
Eastspring Investments Limited, Marunouchi Park Bldg., 2-6-1 Marunochi, Chiyoda-ku,
\nTokyo, Japan 100-6905
\nInvesco Fixed Maturity Selective Emerging Market Bonds
\n2024
\nU
100.00%
8th Floor, No 122, Tung Hua N. Rd. Taipei, Taiwan
\nInvesco Select 6 Year Maturity Global Bond Fund
U
100.00%
\niShares Core MSCI Asia
U
61.46%
15th, 16th, 17th Floor, Champion Tower & 17th Floor ICBC Tower, Three Garden Road,
\nCentral, Hong Kong
\niShares Global High Yield Corp Bond UCITS ETF
U
65.61%
200 Capital Dock, 79 Sir John Rogerson\u2019s Quay, Dublin 2, Ireland
\niShares MSCI Europe ESG Enhanced UCITS ETF
U
51.34%
12 Throgmorton Avenue, London, EC2N 2DL
\niShares MSCI Korea UCITS ETF USD (Acc)
U
53.66%
200 Capital Dock, 79 Sir John Rogerson\u2019s Quay, Dublin 2, Ireland
\nD6 Investments in subsidiary undertakings, joint ventures and associates
continued
\nD6.4 Related undertakings
continued
\nDirect subsidiary undertakings of the parent company, Prudential plc (shares held directly or via nominees)
continued
\n348
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prudentialplc.com
Name of entity
\nClasses of
\nshares held
\nProportion
\nheld
Registered o\ufb03ce address
\niShares MSCI USA ESG Enhanced UCITS ETF
U
41.86%
12 Throgmorton Avenue, London, EC2N 2DL
\nKKP Active Equity Fund
U
35.38%
19th Floor Muang Thai-Phatra Complex, Building Tower, A, 252/25 Ratchadapisek Road,
\nHuaykwang, Bangkok 10310, Thailand
\nKrungsri Greater China Equity Hedged Dividend Fund
U
31.10%
12th, 18th Zone B Floor, Ploenchit Tower 898 Ploenchit Road, Lumpini Pathumwan,
\nBangkok 10330, Thailand
\nLasalle Property Securities SICAV-FIS
U
99.97%
11-13 Bouldevard de la Foire, L-1528 Luxembourg
\nM&G Asia Property Trust
U
100.00%
138 Market Street, CapitaGreen #35-01, Singapore 048946
\nM&G Real Estate Asia Holding Company Pte. Ltd.
OS
33.00%
138 Market Street, #35-01 CapitaGreen, Singapore 048946
\nManulife Asia Paci\ufb01c Bond Fund
U
57.81%
9th Floor, No 89 Son Ren Road, Taipei, Taiwan
\nManulife China Dim Sum High Yield Bond Fund
U
22.54%
\nManulife China O\ufb00shore Bond Fund
U
85.22%
\nManulife Taiwan Dynamic Fund
U
20.53%
\nManulife USD High Yield Bond Fund
U
29.47%
\nNomura Six Years Fixed Maturity Asia Paci\ufb01c Emerging
\nMarket Bond Fund
\nU
100.00%
101 Tower, 30th Floor, No. 7 Sec. 5, Xinyi Rd., Xinyi Dist., Taipei, Taiwan
\nNomura Six Years Fixed Maturity Emerging Market Bond
\nFund
\nU
41.88%
\nNomura Six Years Ladder Maturity Asia Paci\ufb01c Emerging
\nMarket Bond Fund
\nU
97.86%
\nNorth Sathorn Holdings Company Limited
OS
100.00%
No. 63, Athenee Tower, 34th Floor, Wireless Road, Lumpini Subdistrict Pathumwan District,
\nBangkok Metropolis, Thailand
\nPCA IP Services Limited
OS
100.00%
13th Floor, One International Finance Centre, 1 Harbour View Street, Central, Hong Kong
\nPCA Life Assurance Co., Ltd.
OS
99.79%
8th Floor, No.1 Songzhi Road, Taipei City, 11047, Taiwan
\nPCA Reinsurance Co. Ltd.
OS
100.00%
Unit Level 13(A), Main O\ufb03ce Tower, Financial Park Labuan, Jalan Merdeka, 87000 Federal
\nTerritory of Labuan, Malaysia
\nPineBridge US Dual Core Income Fund
U
37.37%
10th Floor, No. 144, Sec. 2, Minquan East Rd, Taipei
\nPrincipal Global Silver Age Fund
U
22.89%
44, 16th Floor, CIMB Thai Bank, Lungsuan Road, Lumpini, Bangkok 10330, Thailand
\nPru Life Insurance Corporation of U.K.
OS
100.00%
9th Floor, Uptown Place Tower 1, 1 East 11th Drive, Uptown Bonifacio, 1634 Taguig City,
\nMetro Manila, Philippines
\nPru Life UK Asset Management and Trust Corporation
OS
100.00%
\nPrudence Foundation
LBG
100.00%
13th Floor, One International Finance Centre, 1 Harbour View Street, Central, Hong Kong
\nPrudential (Cambodia) Life Assurance Plc
OS
100.00%
Phnom Penh Tower, 20th Floor, #445, Monivong Blvd., Boeung Prolit, 7 Makara, Phnom
\nPenh, Cambodia
\nPrudential (US Holdco 1) Limited
OS
100.00%
1 Angel Court, London, EC2R 7AG, United Kingdom
\nPrudential Africa Holdings Limited
OS
100.00%
\nPrudential Africa Services Limited
OS
100.00%
3rd Floor, One Africa Place, LR. No. 1870/X/45, P.O. Box 25093-00100, Westlands, Nairobi,
\nKenya
\nPrudential Assurance Company Singapore (Pte) Limited
OS
100.00%
30 Cecil Street, #30-01 Prudential Tower, Singapore 049712
\nPrudential Assurance Malaysia Berhad
\n*
\nOS
51.00%
Level 26, Menara Prudential, Persiaran TRX Barat, 55188 Tun Razak Exchange, Kuala
\nLumpur, Malaysia
\nPrudential Assurance Uganda Limited
OS
100.00%
9th Floor Zebra Plaza, Plot 23 Kampala Road, P.O. Box 2660, Kampala, Uganda
\nPrudential BeGeneral Insurance C\u00f4te d'Ivoire S.A.
OS
51.00%
Abidjan Plateau, Avenue Nogu\u00e8s, Immeuble Woodin Center, 1er \u00e9tage, 01 P.O. BOX 5173,
\nAbidjan 01, C\u00f4te d'Ivoire
\nPrudential Belife Insurance C\u00f4te d'Ivoire S.A.
OS
51.00%
\nPrudential Bene\ufb01cial General Insurance Cameroon S.A.
OS
50.71%
1944, Boulevard de la R\u00e9publique Douala-Akwa, P.O. BOX 2328, Douala, Cameroon
\nPrudential Bene\ufb01cial Life Insurance Cameroon S.A.
OS
51.00%
\nPrudential Bene\ufb01cial Life Insurance Togo S.A.
OS
50.99%
2963 Rue de la Chance Agbalepedogan, P.O. Box 1115, Lome, Togo
\nPrudential BSN Takaful Berhad
\n\u2020
\nOS
49.00%
Level 13, Menara Prudential, Persiaran TRX Barat, 55188 Tun Razak Exchange, Kuala
\nLumpur, Malaysia
\nPrudential Corporation Holdings Limited
OS
100.00%
1 Angel Court, London, EC2R 7AG, United Kingdom
\nPrudential Financial Advisers Singapore Pte. Ltd.
OS
100.00%
30 Cecil Street, #30-01 Prudential Tower, Singapore 049712
\nPrudential Financial Partners (Asia) Limited
OS
100.00%
1 Angel Court, London, EC2R 7AG, England, United Kingdom
\nPrudential Financial Partners HK Limited
OS
100.00%
13th Floor, One International Finance Centre, 1 Harbour View Street, Central, Hong Kong
\nPrudential General Insurance Hong Kong Limited
OS
100.00%
59th Floor, One Island East, 18 Westlands Road, Quarry Bay, Hong Kong
\nPrudential Group Secretarial Services HK Limited
OS
100.00%
13th Floor, One International Finance Centre, 1 Harbour View Street, Central, Hong Kong
\nPrudential Group Secretarial Services Limited
OS
100.00%
1 Angel Court, London, EC2R 7AG, United Kingdom
\nPrudential Holdings Limited
OS
100.00%
4th Floor, Saltire Court, 20, Castle Terrace, Edinburgh, EH1 2EN, United Kingdom
\nPrudential Hong Kong Limited
OS
100.00%
59th Floor, One Island East, 18 Westlands Road, Quarry Bay, Hong Kong
\nPrudential International Treasury Limited
OS
100.00%
13th Floor, One International Finance Centre, 1 Harbour View Street, Central, Hong Kong
\nPrudential IP Services Limited
OS
100.00%
1 Angel Court, London, EC2R 7AG, United Kingdom
\nPrudential Life Assurance (Lao) Company Limited
OS
100.00%
5th Floor, Lao international Business and Tourist Center Project (Vientiane Center),
\nKhouvieng Road, Nongchan Village, Sisattanak District, Vientiane Capital, Lao PDR
\nPrudential Life Assurance (Thailand) Public Company
\nLimited
\nOS
99.93%
944 Mitrtown O\ufb03ce Tower, 10th, 29th-31st Floor, Rama 4 Road, Wangmai, Pathumwan,
\nBangkok, 10330, Thailand
\nPrudential Life Assurance Kenya Limited
OS
100.00%
Vienna Court, Ground Floor, State House Crescent, O\ufb00 State House Avenue, P.O. Box
\n25093-00603, Nairobi, Kenya
\nPrudential Life Assurance Zambia Limited
OS
100.00%
Prudential House, Plot No. 32256, Thabo Mbeki Road, P.O. Box 31357, Lusaka, Zambia
\nKey to share classes:
\nLBG
Limited by Guarantee
\nMI
Membership Interest
\nMI - WFOE
Membership Interest of a Wholly Foreign Owned Enterprise in the Chinese Mainland
\nMI \u2013 JV
Membership Interest of a Sino-Foreign Equity Joint Venture in the Chinese Mainland
\nOS
Ordinary Shares
\nPI
Partnership Interest
\nPS
Preference Shares
\nU
Units
\n349
Prudential plc
Annual Report 2022
\nGroup overview
Strategic report
Governance
Directors\u2019 remuneration report
European Embedded Value (EEV) basis results
Additional information
Financial statements
D Other information
/ continued
\nName of entity
\nClasses of
\nshares held
\nProportion
\nheld
Registered o\ufb03ce address
\nPrudential Life Insurance Ghana Limited
OS
100.00%
H/NO. 35, Opp. Hobats Clinic, North Street, Tesano, Accra, Accra Metropolitan, Greater
\nAccra, P.O. Box AN 10476, Ghana
\nPrudential Life Vault Limited
OS
100.00%
48 Awolowo Road, South-West Ikoyi, Lagos, Nigeria
\nPrudential Mauritius Holdings Limited
OS
100.00%
3rd Floor, 355 NEX, Rue du Savoir, Cybercity Ebene, 72201, Mauritius
\nPrudential Myanmar Life Insurance Limited
OS
100.00%
#15-01, 15th Floor, Sule Square, 221 Sule Pagoda Road, Kyauktada Township, Yangon,
\nMyanmar
\nPrudential Pensions Management Zambia Limited
OS
49.00%
Prudential House, Plot No. 32256, Thabo Mbeki Road, P.O. Box 31357, Lusaka, Zambia
\nPrudential Services Asia Sdn. Bhd.
OS
100.00%
Suite 1005, 10th Floor, Wisma Hamzah-Kwong Hing, No. 1 Leboh Ampang, 50100 Kuala
\nLumpur, Malaysia
\nPS
100.00%
\nPrudential Services Limited
OS
100.00%
1 Angel Court, London, EC2R 7AG, United Kingdom
\nPrudential Services Philippines Corporation
OS
100.00%
19th Floor Uptown Place Tower I East, 11th Drive Uptown Bonifacio Fort Bonifacio
\nBonifacio Global City, Taguig City, Fourth District, National Capital Region (NCR), 1630,
\nPhilippines
\nPrudential Services Singapore Pte. Ltd.
OS
100.00%
7 Straits View, #06-01 Marina One East Tower, Singapore 018936
\nPrudential Singapore Holdings Pte. Limited
OS
100.00%
30 Cecil Street, #30-01 Prudential Tower, Singapore 049712
\nPS
100.00%
\nPrudential Technology and Services India Private Limited
OS
100.00%
CoWrks NXT, EPIP Industrial Area, White\ufb01eld Road, K.R Puram, Near SAP Labs, Hubli,
\nBangalore, Karnataka, 560066, India
\nPrudential Vietnam Assurance Private Limited
OS
100.00%
25th Floor, Saigon Trade Center, 37 Ton Duc Thang Street, District 1, Ho Chi Minh City,
\nVietnam
\nPrudential Wealth Holdings Company Pte. Ltd.
OS
100.00%
7 Straits View #07-01, Marina One East Tower, Singapore 018936, Singapore
\nPrudential Wealth Management Singapore Pte. Ltd.
OS
100.00%
8 Marina View #15-06A, Asia Square Tower 1, Singapore 018960, Singapore
\nPrudential Zenith Life Insurance Limited
OS
51.00%
13th Floor, Civic Towers, Ozumba Mbadiwe Avenue, Victoria Island, Lagos State, Lagos,
\nNigeria
\nPRUInvest PHP Liquid Fund
U
99.84%
9th Floor, Uptown Place Tower 1, 1 East 11th Drive, Uptown Bonifacio, 1634 Taguig City,
\nMetro Manila, Philippines
\nPRUInvest PH Equity Index Tracker Fund
U
100.00%
\nPT Prudential Sharia Life Assurance
OS
94.62%
Prudential Tower, 2nd Floor, Jl. Jend. Sudirman Kav. 79, Jakarta 12910, Indonesia
\nPT. Eastspring Investments Indonesia
OS
99.95%
Prudential Tower, 23rd Floor, Jl. Jend. Sudirman Kav.79, Jakarta 12910, Indonesia
\nPT. Prudential Life Assurance
\n\u2021
\nOS
94.62%
Prudential Tower, Jl. Jend. Sudirman Kav. 79, Jakarta 12910, Indonesia
\nPulse Ecosystems Pte. Ltd.
OS
100.00%
7 Straits View, #06-01 Marina One East Tower, Singapore 018936
\nPulse Wealth Limited
OS
100.00%
Suite 3703-04, 37/F, Tower 6, The Gateway, Harbour City, 9 Canton Road, Tsim Sha Tsui,
\nKowloon, Hong Kong
\nReksa Dana Eastspring IDR Fixed Income Fund
U
98.81%
Prudential Tower, 23rd Floor, Jl. Jend. Sudirman Kav.79, Jakarta 12910, Indonesia
\nReksa Dana Eastspring Investments Cash Reserve
U
88.93%
\nReksa Dana Syariah Eastspring Syariah Fixed Income
\nAmanah
\nU
66.32%
\nReksa Dana Syariah Eastspring Syariah Money Market
\nKhazanah
\nU
99.30%
\nReksa Dana Syariah Penyertaan Terbatas Bahana Syariah
\nBumn Fund IV
\nU
99.01%
Graha CIMB Niaga 21st Floor. Jl Jend Sudirman Kav 58, Jakarta - 12190, Indonesia
\nRhodium Investment Funds - Singapore Bond Fund
U
99.75%
10 Marina Boulevard, #32-01, Marina Bay Financial Centre Tower 2, Singapore 018983
\nRhodium Passive Long Dated Bond Fund
U
99.87%
\nRobeco QI European Active Index Equities
U
94.55%
6, route de Tr\u00e8ves, L-2633 Senningerberg, Grand Duchy of Luxembourg
\nSchroder Asian Investment Grade Credit
U
37.95%
138 Market Street, #23-01 CapitaGreen, Singapore 048946
\nSchroder Emerging Markets Fund
U
67.30%
\nSchroder Multi-Asset Revolution
U
48.29%
\nSchroder US Dollar Money Fund
U
34.92%
9th \ufb02oor, no. 108, section 5, xinyi road, taipei
\nScotts Spazio Pte. Ltd.
OS
45.00%
316 Tanglin Road, #01-01,Singapore, 247978
\nShenzhen Prudential Technology Limited
MI - WFOE
100.00%
Unit 5, 8th Floor, China Resources Tower, No.2666 Keyuan South Road, Yuehai Street,
\nNanshan District, Shenzhen 518054, China
\nSinopac RMB Money Market Fund
U
27.12%
14th Floor, No.17,Po Ai Rd., Taipei, Taiwan
\nSri Han Suria Sdn. Bhd.
OS
51.00%
Suite 1005, 10th Floor, Wisma Hamzah-Kwong Hing, No. 1 Leboh Ampang, 50100 Kuala
\nLumpur, Malaysia
\nStaple Limited
OS
100.00%
No. 63, Athenee Tower, 34th Floor, Wireless Road, Lumpini Subdistrict Pathumwan District,
\nBangkok Metropolis, Thailand
\nTempleton Asian Growth Fund
U
31.40%
8A, rue Albert Borschette, L-1246 Luxembourg
\nThreadneedle (Lux) \u2013 Global Emerging Market Equities
U
69.10%
44 Rue de la vall\u00e9e, 2661 Luxembourg
\nD6 Investments in subsidiary undertakings, joint ventures and associates
continued
\nD6.4 Related undertakings
continued
\nDirect subsidiary undertakings of the parent company, Prudential plc (shares held directly or via nominees)
continued
\n350
Prudential plc
Annual Report 2022
prudentialplc.com
Name of entity
\nClasses of
\nshares held
\nProportion
\nheld
Registered o\ufb03ce address
\nUnited Global Innovation Fund
U
21.33%
23A, 25th Floor, Asia Centre Building, 173/27-30, 32-33 South Sathon Road,
\nThungmahamek, Sathon, Bangkok 10120, Thailand
\nUOB Smart Global Healthcare Fund
U
42.04%
\nUOB Smart Japan Small and Mid Cap Fund
U
29.79%
\nUOB Smart Millennium Growth Fund
U
38.65%
\nUSD Investment Grade Infrastructure Debt Fund SCSp
U
21.53%
35a, Avenue J.F. Kennedy, L-1855, Luxembourg, Grand Duchy of Luxembourg
\n*
Prudential Assurance Malaysia Berhad is consolidated at 100 per cent in the Group\u2019s consolidated \ufb01nancial statements re\ufb02ecting the economic interest to the Group.
\n\u2020
Prudential BSN Takaful Berhad is a joint venture that is accounted for using the equity method, for which the Group has an economic interest of 70 per cent for all business sold up to
\n23 December 2016 and of 49 per cent for new business sold subsequent to this date.
\n\u2021
The holding of 94.62 per cent for PT. Prudential Life Assurance represents the proportion held in the Indonesia subsidiary attaching to the aggregate of the shares across the types
\nof\u00a0capital\u00a0in\u00a0issue.
\nThe below table lists the issued share capital of the subsidiaries of the Group which, in the opinion of the Directors, principally a\ufb00ect the results or
\nassets of the Group:
\nName of entity
Issued and fully paid up share/ registered capital
\nPrudential Assurance Company Singapore (Pte) Limited
526,557,000 ordinary shares of SG$ 1 each
\nPT. Prudential Life Assurance
105,500 ordinary shares and 6,000 preference shares of Rp 1,000,000 each
\nPrudential Hong Kong Limited
3,641,479,873 ordinary shares of HK$ 1 each
\nPrudential Assurance Malaysia Berhad
100,000,000 ordinary shares of RM 1 each",
"dimensions": {
"concept": "ifrs-full:DisclosureOfNotesAndOtherExplanatoryInformationExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f33942": {
"value": "In order to present the consolidated \ufb01nancial statements in USD, the results and \ufb01nancial position of entities not using USD as functional currency (ie the currency of the primary economic environment in which the entity operates) must be translated into USD.
\nAll assets and liabilities of entities not operating in USD are converted at closing exchange rates while all income and expenses are converted at
\naverage exchange rates where this is a reasonable approximation of the rates prevailing on transaction dates. The impact of these foreign
\nexchange translations into the Group\u2019s USD presentation currency is recorded as a separate component in the Statement of comprehensive
\nincome. Upon the disposal of the entity, the related cumulative foreign exchange translation di\ufb00erences are recycled from other comprehensive
\nincome to the income statement as part of the gain or loss on disposal.
\nThe general principle for converting foreign currency transactions to the functional currency of an entity is to translate at the functional currency
\nspot rate prevailing at the date of the transactions. Foreign currency monetary assets and liabilities are translated at the spot exchange rate for the
\nfunctional currency at the reporting date. Changes resulting from the foreign exchange translations into the functional currency of the entity are
\nrecognised in the income statement.
\nCertain notes to the consolidated \ufb01nancial statements present comparative information at constant exchange rates (CER), in addition to the
\nreporting at actual exchange rates (AER) used throughout the consolidated \ufb01nancial statements. AER are actual historical exchange rates for the
\nspeci\ufb01c accounting year, being the average rates over the year for the income statement and the closing rates at the balance sheet date for the
\nstatement of \ufb01nancial position. CER results are calculated by translating prior year results using the current year foreign exchange rate, ie current
year average rates for the income statement and current year closing rates for the statement of \ufb01nancial position.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForFunctionalCurrencyExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f33943": {
"value": "In order to present the consolidated \ufb01nancial statements in USD, the results and \ufb01nancial position of entities not using USD as functional currency (ie the currency of the primary economic environment in which the entity operates) must be translated into USD.
\nAll assets and liabilities of entities not operating in USD are converted at closing exchange rates while all income and expenses are converted at
\naverage exchange rates where this is a reasonable approximation of the rates prevailing on transaction dates. The impact of these foreign
\nexchange translations into the Group\u2019s USD presentation currency is recorded as a separate component in the Statement of comprehensive
\nincome. Upon the disposal of the entity, the related cumulative foreign exchange translation di\ufb00erences are recycled from other comprehensive
\nincome to the income statement as part of the gain or loss on disposal.
\nThe general principle for converting foreign currency transactions to the functional currency of an entity is to translate at the functional currency
\nspot rate prevailing at the date of the transactions. Foreign currency monetary assets and liabilities are translated at the spot exchange rate for the
\nfunctional currency at the reporting date. Changes resulting from the foreign exchange translations into the functional currency of the entity are
\nrecognised in the income statement.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForForeignCurrencyTranslationExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f33965": {
"value": "A2 New accounting pronouncements in 2022 The IASB has issued the following new accounting pronouncements to be e\ufb00ective from 1 January 2022:
\n>
Amendments to IAS 37 \u2018Onerous contracts \u2013 Cost of Ful\ufb01lling a Contract\u2019 issued in May 2020;
\n>
Annual Improvements to IFRS Standards 2018\u20132020 issued in May 2020;
\n>
Amendments to IAS 16 \u2018Property, Plant and Equipment \u2013 Proceeds before Intended Use\u2019 issued in May 2020; and
\n>
Reference to the Conceptual Framework \u2013 Amendments to IFRS 3 \u2018Business combination\u2019 issued in May 2020.
\nThe adoption of these pronouncements has had no signi\ufb01cant impact on the Group consolidated \ufb01nancial statements.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfInitialApplicationOfStandardsOrInterpretations",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f33978": {
"value": "A3 Accounting policies
\n A3.1
Critical accounting policies, estimates and judgements
\nNote A3.1 presents the critical accounting policies, estimates and judgements applied in preparing the Group\u2019s consolidated \ufb01nancial statements.
\nOther accounting policies, where signi\ufb01cant, are presented in the relevant individual notes. All accounting policies are applied consistently for the
\nyears presented and normally are not subject to changes unless new accounting standards, interpretations or amendments are introduced by the
\nIASB.
\nThe preparation of these consolidated \ufb01nancial statements requires Prudential to make accounting estimates and judgements about the
\namounts of assets, liabilities, revenues and expenses, which are both recognised and unrecognised (eg contingent liabilities) in the consolidated
\n\ufb01nancial statements. Prudential evaluates its critical accounting estimates, including those related to long-term business provisioning and the fair
\nvalue of assets as required. The notes below set out those critical accounting policies, the application of which requires the Group to make critical
\nestimates and judgements. Also set out are further critical accounting policies a\ufb00ecting the presentation of the Group\u2019s results and other items
\nthat require the application of critical estimates and judgements.
Measurement of policyholder liabilities and unallocated surplus of with-pro\ufb01ts The measurement basis of policyholder
\nliabilities is dependent upon the classi\ufb01cation
\nof the contracts under IFRS 4.
\nImpacts $146.7 billion of policyholder liabilities
\nand unallocated surplus of with-pro\ufb01ts funds
\nincluding those held by joint venture and
\nassociates.
\nPolicyholder liabilities are estimated based on
\na number of actuarial assumptions (eg
\nmortality, morbidity, policyholder behaviour
\nand expenses).
\nThe Group applies judgement in determining
\nthe actuarial assumptions to be applied to
\nestimate the future amounts due to or from
\nthe policyholder in the measurement of the
\npolicyholder liabilities.
\nIFRS 4 permits the continued usage of previously applied Generally Accepted Accounting
\nPractices (GAAP) for insurance contracts and investment contracts with discretionary
\nparticipating features.
\nA modi\ufb01ed statutory basis of reporting was adopted by the Group on \ufb01rst time adoption of IFRS
\nStandards in 2005. This was set out in the Statement of Recommended Practice issued by the
\nAssociation of British Insurers (ABI SORP). The ABI SORP was withdrawn for the accounting
\nperiods beginning in or after 2015. As used in these consolidated \ufb01nancial statements, the term
\n\u2018grandfathered\u2019 ABI SORP refers to the requirements of the pronouncements prior to its
\nwithdrawal.
\nFor investment contracts that do not contain discretionary participating features, IAS 39 is
\napplied and, where the contract includes an investment management element, IFRS 15
\n\u2018Revenue from Contracts with Customers\u2019 applies.
\nThe current policies applied for the Group\u2019s insurance businesses are noted below.
\nMeasurement of insurance contract liabilities and investment contract
\nliabilities with discretionary participation features
\nThe policyholder liabilities for businesses of the insurance operations are generally determined
\nin accordance with methods prescribed by local GAAP, adjusted to comply with the
\n\u2018grandfathered\u2019 ABI SORP where necessary. Re\ufb01nements to the local reserving methodology are
\ngenerally treated as changes in estimates, dependent on their nature. The UK-style with-pro\ufb01ts
\nfunds\u2019 liabilities in Hong Kong are valued under the realistic basis in accordance with the
\nrequirements of \u2018grandfathered\u2019 FRS 27 \u2018Life Assurance\u2019 (issued by the UK Accounting Standards
\nBoard in 2004 and withdrawn in 2015). The realistic basis requires the value of liabilities to be
\ncalculated as the sum of a with-pro\ufb01ts bene\ufb01ts reserve, future policy-related liabilities and the
\nrealistic current liabilities of the fund. In Taiwan and India, US GAAP principles are applied.
\nFurther details on how liabilities are determined for material product types are set out in note
\nC3.4. This includes the approach to assumption setting including a margin for prudence. The
\nsensitivity of the insurance operations to variations in key economic assumptions, as well as the
\ninsurance risks of mortality and morbidity, is discussed in note C6.1.
\nIn April 2022 Prudential Hong Kong Limited received approval from the Hong Kong IA to early
\nadopt the new risk-based capital regime e\ufb00ective from 1 January 2022. The implication for IFRS
\nreporting of the Group is as explained further in note C3.2.
\nMeasurement of unallocated surplus of with-pro\ufb01ts funds
\nUnallocated surplus of with-pro\ufb01ts funds represents the excess of assets over policyholder
\nliabilities, determined in accordance with the Group\u2019s accounting policies, that have yet to be
\nappropriated between policyholders and shareholders for the Group\u2019s with-pro\ufb01ts funds in Hong
\nKong and Malaysia. The unallocated surplus is recorded wholly as a liability with no allocation to
\nequity. The annual excess or shortfall of income over expenditure of the with-pro\ufb01ts funds, after
\ndeclaration and attribution of the cost of bonuses to policyholders and shareholders, is
\ntransferred to or from the unallocated surplus each period through a charge or credit to the
\nincome statement. In Hong Kong, the unallocated surplus includes the shareholders\u2019 share of
\nexpected future bonuses, with the expected policyholder share being included in policyholder
\nliabilities. Any excess of assets over liabilities and amounts expected to be paid out by the fund
\non future bonuses is also included in the unallocated surplus.
\nThe balance of the unallocated surplus is determined after full provision for deferred tax on
\nunrealised appreciation or depreciation on investments.
\nLiability adequacy test
\nThe Group performs adequacy testing on its insurance liabilities to ensure that the carrying
\namounts (net of related deferred acquisition costs and, where relevant, present value of
\nacquired in-force business) is su\ufb03cient to cover current estimates of future cash out\ufb02ows of the
\nin-force policies over the expected lives. Any de\ufb01ciency is immediately charged to the income
\nstatement. The liability adequacy test is performed at the level of a portfolio of contracts that
\nare subject to broadly similar risks and managed together as a single portfolio which may be at
an entity or business unit level, depending on how the business is managed. (b) Further critical accounting policies a\ufb00ecting the presentation of the Group\u2019s results
\nPresentation of results before tax attributable to shareholders
\nPro\ufb01t before tax is a signi\ufb01cant IFRS income
\nstatement item. The Group has chosen to
\npresent a measure of pro\ufb01t before tax
\nattributable to shareholders which
\ndistinguishes between tax borne by
\nshareholders and tax attributable to
\npolicyholders to support understanding of the
\nperformance of the Group.
\nPro\ufb01t before tax attributable to shareholders is
\n$1,461 million and compares to pro\ufb01t before
\ntax of $1,482 million.
\nThe total tax charge for the Group re\ufb02ects tax that, in addition to that relating to shareholders\u2019
\npro\ufb01t, is also attributable to policyholders through the interest in with-pro\ufb01ts or unit-linked
\nfunds. Further detail is provided in note B3. Reported IFRS pro\ufb01t before the tax measure is
\ntherefore not representative of pre-tax pro\ufb01t attributable to shareholders. Accordingly, in order
\nto provide a measure of pre-tax pro\ufb01t attributable to shareholders, the Group has chosen to
\nadopt an income statement presentation of the tax charge and pre-tax results that
\ndistinguishes between policyholders\u2019 and shareholders\u2019 returns.
\nSegmental analysis of results and earnings attributable to shareholders
\nThe Group uses adjusted operating pro\ufb01t as
\nthe segmental measure of its results.
\nTotal segmental adjusted operating pro\ufb01t is
\n$4,106 million and is shown in note B1.1.
\nThe basis of calculation of adjusted operating pro\ufb01t is provided in note B1.2.
\nFor shareholder-backed business, with the exception of securities which are treated as
\navailable-for-sale (AFS), and assets classi\ufb01ed as loans and receivables at amortised cost, all
\n\ufb01nancial investments and investment properties are designated as assets at fair value through
\npro\ufb01t or loss. Short-term \ufb02uctuations in fair value a\ufb00ect the result for the year and the Group
\nprovides additional analysis of results before and after the e\ufb00ects of short-term \ufb02uctuations
\nin\u00a0investment returns, together with other items that are of a short-term, volatile or one-o\ufb00
\nin\u00a0nature.
\nShort-term \ufb02uctuations in investment returns on assets held by with-pro\ufb01ts funds in Hong Kong,
\nMalaysia and Singapore do not a\ufb00ect directly reported shareholder results. This is because (i)
\nthe unallocated surplus of with-pro\ufb01ts funds is accounted for as a liability and (ii) excess or de\ufb01cit
\nof income and expenditure of the funds over the required surplus for distribution are transferred
\nto or from policyholder liabilities (including the unallocated surplus).
\n(c) Other items requiring application of critical estimates or judgements
\nCarrying value of distribution rights intangible assets
\nThe Group applies judgement to assess
\nwhether factors such as the \ufb01nancial
\nperformance of the distribution arrangements,
\nchanges in relevant legislation and regulatory
\nrequirements indicate an impairment of
\nintangible assets representing distribution
\nrights.
\nTo determine the impaired value, the Group
\nestimates the discounted future expected cash
\n\ufb02ows arising from the cash generating unit
\ncontaining the distribution rights.
\nA\ufb00ects $3.6 billion of assets as shown in note
\nC4.2.
\nDistribution rights relate to bancassurance partnership arrangements for the distribution of
\nproducts for the term of the contractual agreement with the bank partner, for which an asset is
\nrecognised based on fees paid and fees payable not subject to performance conditions.
\nDistribution rights impairment testing is conducted when there is an indication of an
\nimpairment.
\nTo assess indicators of an impairment, the Group monitors a number of internal and external
\nfactors, including indications that the \ufb01nancial performance of the arrangement is likely to be
\nworse than expected and changes in relevant legislation and regulatory requirements that
\ncould impact the Group\u2019s ability to continue to sell new business through the bancassurance
\nchannel, and then applies judgement to assess whether these factors indicate that an
\nimpairment has occurred.
\nIf an impairment has occurred, a charge is recognised in the income statement for the
\ndi\ufb00erence between the carrying value and recoverable amount of the asset. The recoverable
\namount is the greater of fair value less costs to sell and value in use. Value in use is calculated as
\nthe present value of future expected cash \ufb02ows from the asset or the cash generating unit to
\nwhich it is allocated.
Deferred acquisition costs (DAC) for insurance contracts The Group estimates projected future pro\ufb01ts/
\nmargins to assess whether adjustments to the
\ncarrying value or amortisation pro\ufb01le of DAC
\nasset are necessary.
\nImpacts $3.3 billion of DAC as shown in
\nnote\u00a0C4.2.
\nExcept for acquisition costs of the UK-style with-pro\ufb01ts funds\u2019 contracts in Hong Kong, which are
\naccounted for under the \u2018grandfathered\u2019 FRS 27, costs of acquiring new insurance business are
\naccounted for in a way that is consistent with the principles of the \u2018grandfathered\u2019 ABI SORP.
\nThe Group determines qualifying costs that should be capitalised (ie those costs of acquiring
\nnew insurance contracts that meet the criteria under the Group\u2019s accounting policy for DAC)
\nshown by an explicit carrying value in the balance sheet. However, in some insurance operations,
\nthe deferral is implicit through the reserving basis. DAC is amortised against the pro\ufb01t margins
\nwithin future revenues on the related insurance policies. For some business units this is
\napproximated by amortising DAC on a straight-line basis over the expected duration of the
\npolicies.
\nThe recoverability of the DAC is measured and the DAC asset is deemed impaired if the
\nprojected margins (which are estimated based on a number of assumptions similar to those
\nunderlying policyholder liabilities) are less than the carrying value. To the extent that the future
\nmargins di\ufb00er from those anticipated, an adjustment to the carrying value will be necessary
\neither through a charge to the income statement (if the projected margins are lower than
\ncarrying value) or through a change in the amortisation pro\ufb01le.
\nFor those business units applying US GAAP to insurance assets and liabilities, as permitted by
\nthe \u2018grandfathered\u2019 ABI SORP, acquisition costs are deferred and amortised as per the US GAAP
\nrequirements under ASC 944 Financial Services \u2013 Insurance.
\nFinancial investments \u2013 valuation
\nFinancial investments held at fair value
\nrepresent $135.7 billion of the Group\u2019s total
\nassets.
\nFinancial investments held at amortised cost
\nrepresent $8.4 billion of the Group\u2019s total
\nassets.
\nThe Group estimates the fair value of \ufb01nancial
\ninvestments that are not actively traded using
\nquotations from independent third parties or
\ninternally developed pricing models.
\nThe Group holds the majority of its \ufb01nancial investments at fair value (primarily through pro\ufb01t or
\nloss). Financial investments held at amortised cost primarily comprise loans and deposits.
\nDetermination of fair value
\nThe fair values of the \ufb01nancial instruments for which fair valuation is required under IFRS
\nStandards are determined by the use of quoted market prices for exchange-quoted investments
\nor by using quotations from independent third parties such as brokers and pricing services or by
\nusing appropriate valuation techniques. Further details are included in note C2.1.
\nThe estimated fair value of derivative \ufb01nancial instruments re\ufb02ects the estimated amount the
\nGroup would receive or pay in an arm\u2019s-length transaction. This amount is determined using
\nquoted prices if exchange listed, quotations from independent third parties or valued internally
\nusing standard market practices.
\nQuoted market prices are used to value investments having quoted prices. Actively traded
\ninvestments without quoted prices are valued using prices provided by third parties such as
\nbrokers or pricing services. Financial investments measured at fair value are classi\ufb01ed into a
\nthree-level hierarchy as described in note C2.1.
\nIf the market for a \ufb01nancial investment of the Group is not active, the Group establishes fair
\nvalue by using quotations from independent third parties, such as brokers or pricing services, or
\nby using internally developed pricing models. Priority is given to publicly available prices from
\nindependent sources when available, but overall the source of pricing and/or the valuation
\ntechnique is chosen with the objective of arriving at a fair value measurement which re\ufb02ects the
\nprice at which an orderly transaction would take place between market participants on the
\nmeasurement date. Changes in assumptions relating to these variables could positively or
\nnegatively impact the reported fair value of these \ufb01nancial investments. Details of the \ufb01nancial
\ninvestments classi\ufb01ed as \u2018level 3\u2019 to which valuation techniques are applied and the sensitivity of
pro\ufb01t before tax to a change in the valuation of these items, are presented in note C2.2. A3.2 New accounting pronouncements not yet e\ufb00ectiveThe following standards, interpretations and amendments have been issued by the IASB but are not yet e\ufb00ective for the Group in 2022. The
\nGroup prepares consolidated \ufb01nancial statements in accordance with IFRS Standards as issued by the IASB and UK-adopted international
\naccounting standards. This is not intended to be a complete list as only those standards, interpretations and amendments that could have a
\nmaterial impact on the Group\u2019s consolidated \ufb01nancial statements are discussed.
\nIFRS 9 \u2018Financial instruments: Classi\ufb01cation and measurement\u2019
\nIFRS 9 became mandatorily e\ufb00ective for the annual periods beginning on or after 1 January 2018, with early application permitted and
\ntransitional rules apply. The Group met the eligibility criteria for temporary exemption under the Amendments to IFRS 4 from applying IFRS 9 and
\nhas accordingly deferred the adoption of IFRS 9 until 1 January 2023.
\nThe Group is eligible as its activities are predominantly to issue insurance contracts based on the criteria as set out in the amendments to IFRS
\n4. The required disclosure of the fair value of the Group\u2019s \ufb01nancial assets, showing the amounts for instruments that meet the \u2018Solely for Payment
\nof Principal and Interest\u2019 (SPPI) criteria but do not meet the de\ufb01nition of held for trading and are not managed and evaluated on a fair value basis
\nseparately from all other \ufb01nancial assets, is provided below.
\nThe Group is implementing this standard in conjunction with IFRS 17 as permitted. IFRS 9 replaces the existing IAS 39 \u2018Financial Instruments\u00a0\u2013
\nRecognition and Measurement\u2019 and will a\ufb00ect the following three areas:
\nThe classi\ufb01cation and the measurement of \ufb01nancial assets and liabilities
\nIFRS 9 rede\ufb01nes the classi\ufb01cation of \ufb01nancial assets. Based on the way in which the assets are managed in order to generate cash \ufb02ows and their
\ncontractual cash \ufb02ow characteristics (whether the cash \ufb02ows represent \u2018solely payments of principal and interest\u2019), \ufb01nancial assets are classi\ufb01ed
\ninto one of the following categories: amortised cost, fair value through other comprehensive income (FVOCI) and fair value through pro\ufb01t or loss
\n(FVTPL). An option is also available at initial recognition to irrevocably designate a \ufb01nancial asset as at FVTPL if doing so eliminates or signi\ufb01cantly
\nreduces accounting mismatches.
\nUnder IAS 39, 97 per cent of the Group\u2019s \ufb01nancial investments are valued at FVTPL and the vast majority of its investments will continue to be
\nclassi\ufb01ed as such under IFRS 9. The Company expects to make an election under IFRS 9 to measure its retained interest in Jackson\u2019s equity
\nsecurities at FVOCI. Under this designation, only dividend income from this retained interest is recognised in the pro\ufb01t or loss of the Company.
\nUnrealised gains and losses are recognised in other comprehensive income and there is no recycling to the pro\ufb01t or loss on derecognition.
\nThe existing IAS 39 amortised cost measurement for \ufb01nancial liabilities is largely maintained under IFRS 9. For \ufb01nancial liabilities designated at
\nFVTPL IFRS 9 requires changes in fair value due to changes in the entity\u2019s own credit risk to be recognised in other comprehensive income.
\nThe calculation of the impairment charge relevant for \ufb01nancial assets held at amortised cost or FVOCI
\nA new impairment model based on an expected credit loss approach replaces the existing IAS 39 incurred loss impairment model, resulting in
\nearlier recognition of credit losses compared to IAS 39. This aspect is the most complex area of IFRS 9 to implement and will involve signi\ufb01cant
\njudgements and estimation processes.
\nThe Group has assessed the scope of assets to which these requirements will apply and expects that the vast majority of the \ufb01nancial
\ninvestments of the Group to be held at FVTPL to which these requirements will not apply. Accordingly, no signi\ufb01cant amount of additional
\nimpairment is expected to be recognised by the Group under the expected credit loss approach as a result of the adoption of IFRS 9.
\nThe hedge accounting requirements which are more closely aligned with the risk management activities
\nThe Group has not applied hedge accounting treatment under IAS 39 and therefore, there is no impact in this area for the Group upon the
\nadoption of IFRS 9.
\nThe parent company and a number of intermediate holding companies and non-insurance subsidiaries adopted IFRS 9 in 2018 in their
\nindividual or separate \ufb01nancial statements where these statements are prepared in accordance with IFRS, including the UK Financial Reporting
\nStandard 101 \u2018Reduced Disclosure Framework\u2019. The public availability of the \ufb01nancial statements for these entities varies according to the local
\nlaws and regulations of each jurisdiction. The results for these entities continue to be accounted for on an IAS 39 basis in these consolidated
\n\ufb01nancial statements.
\nThe fair value of the Group\u2019s directly held \ufb01nancial assets at 31 December 2022 and 2021 are shown below. Financial assets with contractual
\nterms that give rise on speci\ufb01ed dates to cash \ufb02ows that are solely payments of principal and interest (SPPI) as de\ufb01ned by IFRS 9 are shown
\nseparately. This excludes \ufb01nancial assets that meet the de\ufb01nition of held for trading or are managed and evaluated on a fair value basis.
Financial assets, net of derivative liabilities
\nFinancial assets that
\npass\u00a0the\u00a0SPPI test
\nAll other \ufb01nancial assets,
\nnet\u00a0of\u00a0derivative liabilities
\nFair value at
\n31 Dec 2022
\n$m
\nMovement in
\nthe fair value
\nduring 2022
\n$m
\nFair value at
\n31 Dec 2022
\n$m
\nMovement in
\nthe fair value
\nduring 2022
\n$m
\nAccrued investment income
1,135
\u2013
\u2013
\u2013
\nOther debtors
1,694
\u2013
\u2013
\u2013
\nLoans
\nnote
\n2,189
15
468
(37)
\nEquity securities and holdings in collective investment schemes
\u2013
\u2013
57,679
(8,420)
\nDebt securities
\u2013
\u2013
76,989
(21,803)
\nDerivative assets, net of derivative liabilities
\u2013
\u2013
(432)
(4,487)
\nDeposits
6,275
\u2013
\u2013
\u2013
\nCash and cash equivalents
5,514
\u2013
\u2013
\u2013
\nTotal \ufb01nancial assets, net of derivative liabilities
16,807
15
134,704
(34,747)
\nFinancial assets, net of derivative liabilities
\nFinancial assets that
\npass\u00a0the\u00a0SPPI test
\nAll other \ufb01nancial assets,
\nnet\u00a0of\u00a0derivative liabilities
\nFair value at
\n31 Dec 2021
\n$m
\nMovement in
\nthe fair value
\nduring 2021
\n$m
\nFair value at
\n31 Dec 2021
\n$m
\nMovement in
\nthe fair value
\nduring 2021
\n$m
\nAccrued investment income
1,171
\u2013
\u2013
\u2013
\nOther debtors
1,779
\u2013
\u2013
\u2013
\nLoans
\nnote
\n2,126
41
647
(1)
\nEquity securities and holdings in collective investment schemes
\u2013
\u2013
61,601
4,061
\nDebt securities
226
\u2013
98,868
(3,164)
\nDerivative assets, net of derivative liabilities
\u2013
\u2013
219
(943)
\nDeposits
4,741
\u2013
\u2013
\u2013
\nCash and cash equivalents
7,170
\u2013
\u2013
\u2013
\nTotal \ufb01nancial assets, net of derivative liabilities
17,213
41
161,335
(47)
\nNote
\nThe loans that pass the SPPI test in the tables above are primarily carried at amortised cost under IAS 39. Further information on these loans is as provided in note C2.2.
\nThe underlying \ufb01nancial assets of the Group\u2019s joint ventures and associates accounted for using the equity method are analysed below into those
\nwhich meet the SPPI condition of IFRS 9, excluding any \ufb01nancial assets that meet the de\ufb01nition of held for trading or are managed and evaluated
\non a fair value basis, and all other \ufb01nancial assets.
\nFair value information of the \ufb01nancial assets held by CITIC-Prudential Life Insurance Company (CPL), the Group\u2019s individually material joint
\nventure, is shown in the table below. The amounts disclosed represent 100 per cent of the entity\u2019s \ufb01nancial assets and not the Group\u2019s share of
\nthose amounts and have been prepared on the same basis as the Group\u2019s consolidated \ufb01nancial statements.
\nCPL (100% of the \ufb01nancial assets of the entity)
\nFinancial assets
\nFinancial assets that pass the
\nSPPI test
*
\nAll other \ufb01nancial assets
\nFair value at 31 Dec
Fair value at 31 Dec
Movement in the fair value during
\n2022
$m
2021
$m
2022
$m
2021
$m
2022
$m
2021
$m
\nAccrued investment income
176
170
\u2013
\u2013
\u2013
\u2013
\nOther debtors
667
620
\u2013
\u2013
\u2013
\u2013
\nLoans
674
656
\u2013
\u2013
\u2013
\u2013
\nEquity securities and holdings in collective investment
\nschemes
\u2013
\u2013
15,698
12,882
(1,314)
254
\nDebt securities
\u2013
\u2013
11,478
11,976
37
184
\nDeposits
1,174
1,210
\u2013
\u2013
\u2013
\u2013
\nCash and cash equivalents
561
422
\u2013
\u2013
\u2013
\u2013
\nTotal \ufb01nancial assets
3,252
3,078
27,176
24,858
(1,277)
438
\n*
The carrying value approximates fair value for the \ufb01nancial assets in this category with no movement in the fair value during the year.
Fair value information for the Group\u2019s share of \ufb01nancial assets of other joint ventures and associates in aggregate is set out in the table below:
\nOther JVs and associates (Prudential\u2019s share)
\nFinancial assets
\nFinancial assets that pass the
\nSPPI test
*
\nAll other \ufb01nancial assets
\nFair value at 31 Dec
Fair value at 31 Dec
Movement in the fair value during
\n2022
$m
2021
$m
2022
$m
2021
$m
2022
$m
2021
$m
\nAccrued investment income
83
85
\u2013
\u2013
\u2013
\u2013
\nOther debtors
143
187
\u2013
\u2013
\u2013
\u2013
\nLoans
\u2013
26
\u2013
\u2013
\u2013
\u2013
\nEquity securities and holdings in collective investment
\nschemes
\u2013
\u2013
3,657
3,859
133
680
\nDebt securities
\u2013
\u2013
3,476
3,674
(131)
(121)
\nDeposits
335
203
\u2013
\u2013
\u2013
\u2013
\nCash and cash equivalents
380
510
\u2013
\u2013
\u2013
\u2013
\nTotal \ufb01nancial assets
941
1,011
7,133
7,533
2
559
\n*
The carrying value approximates fair value for the \ufb01nancial assets in this category with no movement in the fair value during the year.
\nIFRS 17 \u2018Insurance Contracts\u2019
\nIFRS 17 \u2018Insurance Contracts\u2019 became e\ufb00ective on 1 January 2023 and replaces IFRS 4 \u2018Insurance Contracts\u2019. IFRS 4 permitted insurers to
\ncontinue to use the statutory basis of accounting for insurance assets and liabilities that existed in their jurisdictions prior to January 2005. IFRS 17
\nreplaced this with a new measurement model that signi\ufb01cantly changes the way insurance and reinsurance contracts are accounted for, albeit the
\nscope of IFRS 17 and IFRS 4 is very similar. Therefore, nearly all of the Group\u2019s insurance and investment contracts with discretionary participation
\nfeatures accounted under IFRS 4 will be accounted for under IFRS 17. The transition date of the Group for IFRS 17 was 1 January 2022. The Group
\nis adopting IFRS 17 on its mandatory e\ufb00ective date on 1 January 2023, alongside the adoption of IFRS 9.
\nIFRS 17 implementation programme
\nThe requirements of the new standard are complex and require a fundamental change to accounting, presentation and disclosures for insurance
\ncontracts as well as the application of signi\ufb01cant judgement and new estimation techniques. The implementation of this standard has involved
\nsigni\ufb01cant enhancements to IT, actuarial and \ufb01nance systems of the Group. The Group has been implementing IFRS 17 and IFRS 9 through a
\nGroup-wide implementation programme.
\nA Group-wide Steering Committee, chaired by the Group Chief Financial O\ufb03cer, provides oversight and strategic direction to the
\nimplementation programme. Regular updates on progress are provided to the Group Audit Committee and during 2022 members of the
\nCommittee, as well as the Board, received training on the new requirements. Since the last Annual Report, the systems implementation has been
\ncompleted and the transition impacts at 1 January 2022 have been calculated. The production of half year and full year 2022 comparatives using
\nthe IFRS 17 accounting standard is scheduled to be completed in the \ufb01rst half of 2023.
\nOverview of IFRS 17
\nIFRS 17 requires liabilities for insurance contracts to be measured as the total of:
\n>
ful\ufb01lment cash \ufb02ows, comprising the best estimate of the present value of future cash \ufb02ows within the contract boundary that are expected to
\narise and an explicit risk adjustment for non-\ufb01nancial risk; and
\n>
a contractual service margin (CSM) that is representing the deferral of any day-one gains arising on initial recognition.
\nLosses are recognised directly into the income statement. For measurement purposes, contracts are grouped together into contracts of similar
\nrisk, pro\ufb01tability pro\ufb01le and issue year, with further divisions for contracts that are managed separately.
\nThe establishment of CSM on the Group\u2019s in-force business and transition approach
\nTransition refers to the determination of the opening balance sheet for the \ufb01rst year of comparative information presented under IFRS 17 (ie at
\n1 January 2022). The future cash \ufb02ows and risk adjustment are measured on a current basis in the same manner as they would be calculated for
\nsubsequent measurement. The key component of transition is therefore the determination of the CSM.
\nThe standard requires IFRS 17 to be applied retrospectively (the \u2018fully retrospective approach\u2019) unless impracticable. If a fully retrospective
\napproach is impracticable there is an option to choose either a modi\ufb01ed retrospective approach or a fair value approach. If reasonable and
\nsupportable information necessary to apply the modi\ufb01ed retrospective approach is not available, the fair value approach must be applied. The
\nGroup applied all three approaches on transition, after taking into account the information that is available to be used for the di\ufb00erent groups of
\ncontracts of the Group. The fair value approach is applied, in particular, where suitable historical information required to apply the retrospective
\ntransition approaches is no longer practicably available.
Pro\ufb01t for insurance contracts under IFRS 17
\nIFRS 17 introduces a new measure of insurance revenue, based on the delivery of services to policyholders and excluding any premiums related to
\nthe investment elements of policies, which will be signi\ufb01cantly di\ufb00erent from existing premium revenue measures, currently reported in the income
\nstatement.
\nPro\ufb01t for insurance contracts under IFRS 17 is represented by the recognition of the services provided to policyholders in the period (release of
\nthe CSM), release from non-economic risk (release of risk adjustment) and the excess of the actual investment return in the period over the e\ufb00ect
\nof the unwind of the rate used to discount the General Measurement Model liabilities, together with operating variances as appropriate. CSM is
\nreleased in line with coverage units that are a measure of the quantity of bene\ufb01ts provided under a contract and the period over which coverage is
\nprovided.
\nThe CSM is released as pro\ufb01t over the coverage period of the insurance contract, re\ufb02ecting the delivery of services to the policyholder. Under
\nIFRS 17 insurance contracts are measured under either the General Measurement Model (GMM), the Variable Fee Approach (VFA) for contracts
\nwith direct participating features or the simpli\ufb01ed Premium Allocation Approach (PAA). The Group predominantly uses the VFA and GMM,
\ndepending on the speci\ufb01c characteristics of the insurance contracts. The Group makes very limited use of the PAA for some small portfolios of
\nshort duration contracts. Reinsurance contracts held are measured under the GMM.
\nWe estimate that over two-thirds of the CSM at transition is calculated using the VFA and relates to the Group\u2019s with-pro\ufb01ts products, the
\nGroup\u2019s \ufb02agship critical illness products in Hong Kong and unit-linked products with a low proportion of protection riders. The contracts calculated
\nusing the GMM, include the Group\u2019s non-pro\ufb01t protection business and unit-linked business with a high proportion of protection riders.
\nThe ful\ufb01lment cash \ufb02ows comprise the best estimate of the present value of future cash \ufb02ows within the contract boundary that are expected
\nto arise and an explicit risk adjustment for non-\ufb01nancial risk. The discount rate applied to derive the present value of future cash \ufb02ows is
\ndetermined on a bottom-up basis, starting with a liquid risk-free yield curve and adding an illiquidity premium to re\ufb02ect the characteristics of the
\ninsurance contracts. The risk adjustment re\ufb02ects the compensation the Group requires for bearing the uncertainty about the amount and timing
\nof the cash \ufb02ows from non-\ufb01nancial risk as the Group ful\ufb01ls insurance contracts, determined by the Group using a con\ufb01dence level approach.
\nThe ful\ufb01lment cash \ufb02ows are updated each reporting date to re\ufb02ect current conditions. For contracts with direct participating features which
\nare accounted for under the VFA, the CSM represents the variable fee to shareholders and it is adjusted to re\ufb02ect the e\ufb00ect of changes in
\neconomics as well as experience variances and/or assumptions changes that relate to future services. For contracts accounted for under GMM, the
\nCSM is accreted using the locked-in discount rates and only adjusted to re\ufb02ect the e\ufb00ect of non-economic experience variances and/or
\nassumptions changes that relate to future services. The adjustments to the CSM are determined using the locked-in discount rates.
\nExpected impact on transition (1 January 2022)
\nThe Group is adopting IFRS 17 retrospectively to its 2022 comparatives as required by the standard. As permitted by IFRS 9, the Group is not
\nplanning to restate the 2022 comparatives on initial application of IFRS 9 but the Group is taking advantage of the classi\ufb01cation overlay for
\nselected assets, principally to change the classi\ufb01cation of certain debt securities, so that they are valued at amortised cost rather than at fair value
\nunder IAS 39, and certain loans, so that they are valued at fair value instead of the prior amortised cost valuation. Changes from IFRS 9 have an
\nimmaterial impact on the Group\u2019s \ufb01nancial statements.
\nThe adoption of IFRS 17 and the IFRS 9 classi\ufb01cation overlay are estimated to increase the Group shareholders\u2019 equity at 1 January 2022 to
\nbetween $18.9 \u2013 $19.8 billion. This re\ufb02ects the release of prudent margins from our legacy accounting basis, particularly in Hong Kong, recognition
\nof the shareholders\u2019 share of the inherited estate within the with-pro\ufb01t funds and the net impact of timing di\ufb00erences in the pattern of pro\ufb01t
\nrecognition. The overall net impact of the IFRS 9 classi\ufb01cation overlay at 1 January 2022 is insigni\ufb01cant given the vast majority of the Group\u2019s
\n\ufb01nancial investments will continue to be carried at fair value through pro\ufb01t or loss under IFRS 9, as currently applied under IAS 39.
\nThe Group is yet to complete production of its 2022 comparatives under the IFRS 17 accounting standard. In addition we continue to review our
\nIFRS 17 accounting policies and approach to ensure they remain in line with market practice. Therefore the impacts discussed above are subject to
\nchange prior to \ufb01nalisation of the Group\u2019s \ufb01nancial statements for the year ending 31 December 2023.
\nOther new accounting pronouncements
\nIn addition to the above, the following new accounting pronouncements have also been issued and are not yet e\ufb00ective but the Group is not
\nexpecting them to have a signi\ufb01cant impact on the Group\u2019s consolidated \ufb01nancial statements:
\n>
Amendments to IAS 1 \u2018Classi\ufb01cation of liabilities as current or non-current\u2019 issued in January 2020 and e\ufb00ective from 1 January 2023. An
\nexposure draft was issued in November 2021 proposing for this e\ufb00ective date to be delayed to periods starting no earlier than 1 January 2024;
\n>
Amendments to IAS 1 and IFRS Practice Statement 2 \u2018Disclosure of accounting policies\u2019 issued in February 2021 and e\ufb00ective from 1 January
\n2023;
\n>
Amendments to IAS 8 \u2018De\ufb01nition of accounting estimates\u2019 issued in February 2021 and e\ufb00ective from 1 January 2023;
\n>
Amendments to IAS 12 \u2018Deferred tax related to assets and liabilities arising from a single transaction\u2019 issued in May 2021 and e\ufb00ective from
\n1 January 2023;
\n>
Amendments to IFRS 16 \u2018Lease liability in a sale and leaseback\u2019 issued in September 2022 and e\ufb00ective from 1 January 2024; and
> Amendments to IAS 1 \u2018Non-current liabilities with covenants\u2019 issued in October 2022 and e\ufb00ective from 1 January 2024. Premiums and annuity considerations for conventional and other protection type insurance policies are recognised as revenue when due. Premiums and annuity considerations for linked policies and other investment type policies are recognised as revenue when received or, in the case
\nof unitised or unit-linked policies, when units are issued. These amounts exclude premium taxes and similar duties where Prudential collects and
\nsettles taxes borne by the policyholder.
\nPolicy fees charged on linked policies for mortality, morbidity, asset management and policy administration are recognised when related
services are provided. Investment return included in the income statement principally comprises interest income, dividends, investment appreciation and depreciation
\n(realised and unrealised gains and losses) on investments designated as fair value through pro\ufb01t or loss, and realised gains and losses (including
\nimpairment losses) on items held at amortised cost and/or designated as AFS. Movements in unrealised appreciation or depreciation of securities
\ndesignated as AFS are recorded in other comprehensive income. Interest income is recognised as it accrues. Dividends on equity securities are
\nrecognised on the ex-dividend date and rental income is recognised on an accrual basis.
The Company o\ufb00ers discretionary share awards to certain key employees and all-employee share plans in the UK and a number of Asia locations. The compensation expense charged to the income statement is primarily based upon the fair value of the awards granted, the vesting period and
\nthe vesting conditions. The Company has established trusts to facilitate the delivery of Prudential plc shares under some of these plans. The cost
to the Company of acquiring these newly issued shares held in trusts is shown as a deduction from shareholders\u2019 equity. Prudential is subject to tax in numerous jurisdictions and the calculation of the total tax charge inherently involves a degree of estimation and
\njudgement. Current tax expense is charged or credited based upon amounts estimated to be payable or recoverable as a result of taxable amounts
\nfor the current year and adjustments made in relation to prior years. The positions taken in tax returns where applicable tax regulation is subject to
\ninterpretation are recognised in full in the determination of the tax charge in the consolidated \ufb01nancial statements if the Group considers that it is
\nprobable that the taxation authority will accept those positions. Otherwise, provisions are established based on the likely amount of the liability, or
\nrecovery, by providing for the single best estimate of the most likely outcome or the weighted average expected value where there are multiple
\noutcomes.
\nThe total tax charge includes tax expense attributable to both policyholders and shareholders. The tax expense attributable to policyholders
\ncomprises the tax on the income of the consolidated with-pro\ufb01ts and unit-linked funds. In certain jurisdictions, life insurance companies are taxed
\non both their shareholders\u2019 pro\ufb01ts and on their policyholders\u2019 insurance and investment returns on certain insurance and investment products.
\nAlthough both types of tax are included in the total tax charge in the Group\u2019s Consolidated income statement, they are presented separately in the
\nConsolidated income statement to provide the most relevant information about tax that the Group pays on its pro\ufb01ts.
\nDeferred taxes are provided under the liability method for all relevant temporary di\ufb00erences. IAS 12 \u2018Income Taxes\u2019 does not require all
\ntemporary di\ufb00erences to be provided for, in particular, the Group does not provide for deferred tax on undistributed earnings of subsidiaries where
\nthe Group is able to control the timing of the distribution and the temporary di\ufb00erence created is not expected to reverse in the foreseeable future.
\nDeferred tax assets are only recognised when it is more likely than not that future taxable pro\ufb01ts will be available against which these losses can be
\nutilised.
\nDeferred tax is measured at the tax rates that are expected to apply to the period when the asset is realised or the liability settled, based on tax
rates (and laws) that have been enacted or are substantively enacted at the end of the reporting period. Basic earnings per share are calculated based on earnings attributable to ordinary shareholders, after related tax and non-controlling interests,
\ndivided by the weighted average number of ordinary shares outstanding during the year, excluding those held in employee share trusts, which are
\ntreated as cancelled. For diluted earnings per share, the weighted average number of shares in issue is adjusted to assume conversion of all dilutive
\npotential ordinary shares. The Group\u2019s only class of potentially dilutive ordinary shares are those share options granted to employees where the
\nexercise price is less than the average market price of the ordinary shares during the year. No adjustment is made if the impact is anti-dilutive
\noverall.
The Group uses the trade date method to account for regular purchases and sales of \ufb01nancial assets. The Group holds \ufb01nancial assets in
\naccordance with IAS 39, whereby subject to speci\ufb01c criteria, \ufb01nancial instruments are required to be accounted for under one of the following
\ncategories:
\n >
Financial assets and liabilities at fair value through pro\ufb01t or loss (FVTPL): this comprises assets and liabilities designated by management as
\nFVTPL on inception and derivatives. This includes instruments that are managed and the performance evaluated on a fair value basis, including
\nliabilities related to net assets attributable to unit holders of consolidated investment funds and policyholder liabilities for investment contracts
\nwithout discretionary participation features. All investments within this category are measured at fair value with all changes thereon being
\nrecognised in investment return in the income statement.
\n>
Financial investments on an available-for-sale (AFS) basis: this comprises assets that are designated by management as AFS and/or do not fall
\ninto any of the other categories. These assets are initially recognised at fair value plus attributable transaction costs and are subsequently
\nmeasured at fair value. Interest and/or dividend income is recognised in the income statement. Unrealised gains and losses are recognised in
\nother comprehensive income. Upon disposal or impairment, accumulated unrealised gains and losses are transferred from other comprehensive
\nincome to the income statement as realised gains or losses. Subsequent to the demerger of Jackson in September 2021, the Group has
\ndesignated its retained interest in Jackson (as described in note D1.2) as AFS equity securities.
\n >
Loans and receivables: except for those designated as FVTPL or AFS, these instruments comprise non-quoted investments that have \ufb01xed or
\ndeterminable payments, including loans collateralised by mortgages, deposits, loans to policyholders and other unsecured loans and
\nreceivables. These investments are initially recognised at fair value plus transaction costs. Subsequently, these instruments are carried at
\namortised cost using the e\ufb00ective interest method. The e\ufb00ective interest rate is the rate that exactly discounts estimated future cash receipts
\nthrough the expected life of the \ufb01nancial instrument or, when appropriate, a shorter period to the net carrying amount of the \ufb01nancial asset.
\nWhen assets held at amortised cost are subject to impairment testing, estimated future cash \ufb02ows are compared to the carrying value of the
\nasset. The estimated future cash \ufb02ows are discounted using the \ufb01nancial asset\u2019s original or variable e\ufb00ective interest rate and exclude credit
\nlosses that have not yet been incurred. If, in subsequent periods, an impaired loan or receivable recovers in value (in part or in full) and this
\nrecovery can be objectively related to an event occurring after the impairment, then any amount determined to have been recovered is reversed
through the income statement. (b) Derivatives and hedging Derivative \ufb01nancial instruments are used to reduce or manage investment, interest rate and currency exposures, to facilitate e\ufb03cient portfolio
\nmanagement and for investment purposes.
\nThe Group does not regularly seek to apply fair value or cash \ufb02ow hedging treatment under IAS 39. The Group has no net investment, fair value
\nor cash \ufb02ow hedges under IAS 39 at 31 December 2022 and 2021. All derivatives that are not designated as hedging instruments are carried at fair
\nvalue, with movements in fair value being recorded in the income statement.
\nEmbedded derivatives are embedded within other non-derivative host \ufb01nancial instruments and insurance contracts to create hybrid
\ninstruments. Embedded derivatives meeting the de\ufb01nition of an insurance contract are accounted for under IFRS 4. Where economic
\ncharacteristics and risks of the embedded derivatives are not closely related to the economic characteristics and risks of the host instrument, and
\nwhere the hybrid instrument is not measured at fair value with the changes in fair value recognised in the income statement, the embedded
\nderivative is required to be bifurcated and carried at fair value as a derivative measured in accordance with IAS 39.
\nIn addition, the Group applies the option under IFRS 4 to not separate and fair value surrender options embedded in host contracts and
\nwith-pro\ufb01ts investment contracts whose strike price is either a \ufb01xed amount or a \ufb01xed amount plus interest.
\nDerivatives held and their purpose
\nThe Group enters into a variety of exchange traded and over-the-counter derivative \ufb01nancial instruments, including futures, options, forward
\ncontracts, swaps and swaptions.
\nAll over-the-counter derivative transactions are conducted under standardised ISDA (International Swaps and Derivatives Association Inc)
\nmaster agreements and collateral agreements are in place between the individual entities and relevant counterparties under each of these
\nmarket master agreements.
\nDerivatives are used for e\ufb03cient portfolio management to obtain cost e\ufb00ective and management of exposure to various markets in
\naccordance with the Group\u2019s investment strategies and to manage exposure to interest rate, currency, credit and other business risks. The Group
Derecognition of \ufb01nancial assets and liabilities The Group\u2019s policy is to derecognise \ufb01nancial assets when it is deemed that substantially all the risks and rewards of ownership have been
\ntransferred.
\nThe Group derecognises \ufb01nancial liabilities only when the obligation speci\ufb01ed in the contract is discharged, cancelled or has expired.
\nReverse repurchase agreements
\nThe Group is party to various reverse repurchase agreements under which securities are purchased from third parties with an obligation to resell
\nthe securities. The securities are not recognised as investments in the statement of \ufb01nancial position but the right to receive the cash paid is
recognised as deposits. The Group is also party to various securities lending agreements (including repurchase agreements) under which securities are loaned to third
\nparties on a short-term basis. The loaned securities are not derecognised; rather, they continue to be recognised within the appropriate investment
\nclassi\ufb01cation. To the extent cash collateral is received it is recognised on the statement of \ufb01nancial position with the obligation to repay the cash
paid recognised as a liability. Other collateral is not recognised. The Group\u2019s derivative instruments, repurchase agreements and securities lending agreements are subject to master netting arrangements and collateral arrangements. A master netting arrangement with a counterparty creates a right of o\ufb00set for amounts due to and due from that same
\ncounterparty that is enforceable in the event of a default or bankruptcy. The Group recognises amounts subject to master netting arrangements
on a gross basis within the consolidated balance sheets. Claims paid include maturities, annuities, surrenders, deaths and other claim events. Maturity claims are recorded as charges on the policy
\nmaturity date. Annuity claims are recorded when each annuity instalment becomes due for payment. Surrenders are charged to the income
\nstatement when paid. Death and other claims are generally recorded when noti\ufb01ed with additional contract liabilities held, where appropriate, for
\n\u2018incurred but not reported\u2019 (IBNR) claims.
Business combination
\nBusiness acquisitions are accounted for by applying the purchase method of accounting, which adjusts the net assets of the acquired company to
\nfair value at the date of purchase. The excess of the acquisition consideration over the fair value of the assets and liabilities of the acquired
\nbusiness is recorded as goodwill. The Group chooses the full goodwill method or the partial goodwill method to calculate goodwill on an acquisition
\nby acquisition basis. Expenses related to acquiring new subsidiaries are charged to the income statement in the period in which they are incurred
\nand not included in goodwill. Income and expenses of acquired businesses are included in the income statement from the date of acquisition.
\nWhere the Group writes a put option, which if exercised triggers the purchase of non-controlling interests as part of its business acquisition, the
\nput option is recognised as a \ufb01nancial liability at the acquisition date. Where risks and rewards remain with the non-controlling interests, a
\ncorresponding amount is deducted from equity. Any subsequent changes to the carrying amount of the put option liability are also recognised
\nwithin equity.
\nGoodwill
Goodwill is capitalised and carried on the Group consolidated statement of \ufb01nancial position as an intangible asset at initial value less any accumulated impairment losses. Goodwill impairment testing is conducted annually and when there is an indication of impairment. ",
"dimensions": {
"concept": "ifrs-full:DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f33981": {
"value": " A3.1Critical accounting policies, estimates and judgements
\nNote A3.1 presents the critical accounting policies, estimates and judgements applied in preparing the Group\u2019s consolidated \ufb01nancial statements.
\nOther accounting policies, where signi\ufb01cant, are presented in the relevant individual notes. All accounting policies are applied consistently for the
\nyears presented and normally are not subject to changes unless new accounting standards, interpretations or amendments are introduced by the
\nIASB.
\nThe preparation of these consolidated \ufb01nancial statements requires Prudential to make accounting estimates and judgements about the
\namounts of assets, liabilities, revenues and expenses, which are both recognised and unrecognised (eg contingent liabilities) in the consolidated
\n\ufb01nancial statements. Prudential evaluates its critical accounting estimates, including those related to long-term business provisioning and the fair
\nvalue of assets as required. The notes below set out those critical accounting policies, the application of which requires the Group to make critical
\nestimates and judgements. Also set out are further critical accounting policies a\ufb00ecting the presentation of the Group\u2019s results and other items
\nthat require the application of critical estimates and judgements.
289
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Annual Report 2022
\nGroup overview
Strategic report
Governance
Directors\u2019 remuneration report
European Embedded Value (EEV) basis results
Additional information
Financial statements
A Basis of preparation and accounting policies
/ continued
\nA3 Accounting policies
continued
\nA3.1
Critical accounting policies, estimates and judgements
continued
\n(a) Critical accounting policies with associated critical estimates and judgements
\nMeasurement of policyholder liabilities and unallocated surplus of with-pro\ufb01ts
\nThe measurement basis of policyholder
\nliabilities is dependent upon the classi\ufb01cation
\nof the contracts under IFRS 4.
\nImpacts $146.7 billion of policyholder liabilities
\nand unallocated surplus of with-pro\ufb01ts funds
\nincluding those held by joint venture and
\nassociates.
\nPolicyholder liabilities are estimated based on
\na number of actuarial assumptions (eg
\nmortality, morbidity, policyholder behaviour
\nand expenses).
\nThe Group applies judgement in determining
\nthe actuarial assumptions to be applied to
\nestimate the future amounts due to or from
\nthe policyholder in the measurement of the
\npolicyholder liabilities.
\nIFRS 4 permits the continued usage of previously applied Generally Accepted Accounting
\nPractices (GAAP) for insurance contracts and investment contracts with discretionary
\nparticipating features.
\nA modi\ufb01ed statutory basis of reporting was adopted by the Group on \ufb01rst time adoption of IFRS
\nStandards in 2005. This was set out in the Statement of Recommended Practice issued by the
\nAssociation of British Insurers (ABI SORP). The ABI SORP was withdrawn for the accounting
\nperiods beginning in or after 2015. As used in these consolidated \ufb01nancial statements, the term
\n\u2018grandfathered\u2019 ABI SORP refers to the requirements of the pronouncements prior to its
\nwithdrawal.
\nFor investment contracts that do not contain discretionary participating features, IAS 39 is
\napplied and, where the contract includes an investment management element, IFRS 15
\n\u2018Revenue from Contracts with Customers\u2019 applies.
\nThe current policies applied for the Group\u2019s insurance businesses are noted below.
\nMeasurement of insurance contract liabilities and investment contract
\nliabilities with discretionary participation features
\nThe policyholder liabilities for businesses of the insurance operations are generally determined
\nin accordance with methods prescribed by local GAAP, adjusted to comply with the
\n\u2018grandfathered\u2019 ABI SORP where necessary. Re\ufb01nements to the local reserving methodology are
\ngenerally treated as changes in estimates, dependent on their nature. The UK-style with-pro\ufb01ts
\nfunds\u2019 liabilities in Hong Kong are valued under the realistic basis in accordance with the
\nrequirements of \u2018grandfathered\u2019 FRS 27 \u2018Life Assurance\u2019 (issued by the UK Accounting Standards
\nBoard in 2004 and withdrawn in 2015). The realistic basis requires the value of liabilities to be
\ncalculated as the sum of a with-pro\ufb01ts bene\ufb01ts reserve, future policy-related liabilities and the
\nrealistic current liabilities of the fund. In Taiwan and India, US GAAP principles are applied.
\nFurther details on how liabilities are determined for material product types are set out in note
\nC3.4. This includes the approach to assumption setting including a margin for prudence. The
\nsensitivity of the insurance operations to variations in key economic assumptions, as well as the
\ninsurance risks of mortality and morbidity, is discussed in note C6.1.
\nIn April 2022 Prudential Hong Kong Limited received approval from the Hong Kong IA to early
\nadopt the new risk-based capital regime e\ufb00ective from 1 January 2022. The implication for IFRS
\nreporting of the Group is as explained further in note C3.2.
\nMeasurement of unallocated surplus of with-pro\ufb01ts funds
\nUnallocated surplus of with-pro\ufb01ts funds represents the excess of assets over policyholder
\nliabilities, determined in accordance with the Group\u2019s accounting policies, that have yet to be
\nappropriated between policyholders and shareholders for the Group\u2019s with-pro\ufb01ts funds in Hong
\nKong and Malaysia. The unallocated surplus is recorded wholly as a liability with no allocation to
\nequity. The annual excess or shortfall of income over expenditure of the with-pro\ufb01ts funds, after
\ndeclaration and attribution of the cost of bonuses to policyholders and shareholders, is
\ntransferred to or from the unallocated surplus each period through a charge or credit to the
\nincome statement. In Hong Kong, the unallocated surplus includes the shareholders\u2019 share of
\nexpected future bonuses, with the expected policyholder share being included in policyholder
\nliabilities. Any excess of assets over liabilities and amounts expected to be paid out by the fund
\non future bonuses is also included in the unallocated surplus.
\nThe balance of the unallocated surplus is determined after full provision for deferred tax on
\nunrealised appreciation or depreciation on investments.
\nLiability adequacy test
\nThe Group performs adequacy testing on its insurance liabilities to ensure that the carrying
\namounts (net of related deferred acquisition costs and, where relevant, present value of
\nacquired in-force business) is su\ufb03cient to cover current estimates of future cash out\ufb02ows of the
\nin-force policies over the expected lives. Any de\ufb01ciency is immediately charged to the income
\nstatement. The liability adequacy test is performed at the level of a portfolio of contracts that
\nare subject to broadly similar risks and managed together as a single portfolio which may be at
\nan entity or business unit level, depending on how the business is managed.
\n290
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prudentialplc.com
(b) Further critical accounting policies a\ufb00ecting the presentation of the Group\u2019s results
\nPresentation of results before tax attributable to shareholders
\nPro\ufb01t before tax is a signi\ufb01cant IFRS income
\nstatement item. The Group has chosen to
\npresent a measure of pro\ufb01t before tax
\nattributable to shareholders which
\ndistinguishes between tax borne by
\nshareholders and tax attributable to
\npolicyholders to support understanding of the
\nperformance of the Group.
\nPro\ufb01t before tax attributable to shareholders is
\n$1,461 million and compares to pro\ufb01t before
\ntax of $1,482 million.
\nThe total tax charge for the Group re\ufb02ects tax that, in addition to that relating to shareholders\u2019
\npro\ufb01t, is also attributable to policyholders through the interest in with-pro\ufb01ts or unit-linked
\nfunds. Further detail is provided in note B3. Reported IFRS pro\ufb01t before the tax measure is
\ntherefore not representative of pre-tax pro\ufb01t attributable to shareholders. Accordingly, in order
\nto provide a measure of pre-tax pro\ufb01t attributable to shareholders, the Group has chosen to
\nadopt an income statement presentation of the tax charge and pre-tax results that
\ndistinguishes between policyholders\u2019 and shareholders\u2019 returns.
\nSegmental analysis of results and earnings attributable to shareholders
\nThe Group uses adjusted operating pro\ufb01t as
\nthe segmental measure of its results.
\nTotal segmental adjusted operating pro\ufb01t is
\n$4,106 million and is shown in note B1.1.
\nThe basis of calculation of adjusted operating pro\ufb01t is provided in note B1.2.
\nFor shareholder-backed business, with the exception of securities which are treated as
\navailable-for-sale (AFS), and assets classi\ufb01ed as loans and receivables at amortised cost, all
\n\ufb01nancial investments and investment properties are designated as assets at fair value through
\npro\ufb01t or loss. Short-term \ufb02uctuations in fair value a\ufb00ect the result for the year and the Group
\nprovides additional analysis of results before and after the e\ufb00ects of short-term \ufb02uctuations
\nin\u00a0investment returns, together with other items that are of a short-term, volatile or one-o\ufb00
\nin\u00a0nature.
\nShort-term \ufb02uctuations in investment returns on assets held by with-pro\ufb01ts funds in Hong Kong,
\nMalaysia and Singapore do not a\ufb00ect directly reported shareholder results. This is because (i)
\nthe unallocated surplus of with-pro\ufb01ts funds is accounted for as a liability and (ii) excess or de\ufb01cit
\nof income and expenditure of the funds over the required surplus for distribution are transferred
\nto or from policyholder liabilities (including the unallocated surplus).
\n(c) Other items requiring application of critical estimates or judgements
\nCarrying value of distribution rights intangible assets
\nThe Group applies judgement to assess
\nwhether factors such as the \ufb01nancial
\nperformance of the distribution arrangements,
\nchanges in relevant legislation and regulatory
\nrequirements indicate an impairment of
\nintangible assets representing distribution
\nrights.
\nTo determine the impaired value, the Group
\nestimates the discounted future expected cash
\n\ufb02ows arising from the cash generating unit
\ncontaining the distribution rights.
\nA\ufb00ects $3.6 billion of assets as shown in note
\nC4.2.
\nDistribution rights relate to bancassurance partnership arrangements for the distribution of
\nproducts for the term of the contractual agreement with the bank partner, for which an asset is
\nrecognised based on fees paid and fees payable not subject to performance conditions.
\nDistribution rights impairment testing is conducted when there is an indication of an
\nimpairment.
\nTo assess indicators of an impairment, the Group monitors a number of internal and external
\nfactors, including indications that the \ufb01nancial performance of the arrangement is likely to be
\nworse than expected and changes in relevant legislation and regulatory requirements that
\ncould impact the Group\u2019s ability to continue to sell new business through the bancassurance
\nchannel, and then applies judgement to assess whether these factors indicate that an
\nimpairment has occurred.
\nIf an impairment has occurred, a charge is recognised in the income statement for the
\ndi\ufb00erence between the carrying value and recoverable amount of the asset. The recoverable
\namount is the greater of fair value less costs to sell and value in use. Value in use is calculated as
\nthe present value of future expected cash \ufb02ows from the asset or the cash generating unit to
\nwhich it is allocated.
\n291
Prudential plc
Annual Report 2022
\nGroup overview
Strategic report
Governance
Directors\u2019 remuneration report
European Embedded Value (EEV) basis results
Additional information
Financial statements
A Basis of preparation and accounting policies
/ continued
\nA3 Accounting policies
continued
\nA3.1
Critical accounting policies, estimates and judgements
continued
\nDeferred acquisition costs (DAC) for insurance contracts
\nThe Group estimates projected future pro\ufb01ts/
\nmargins to assess whether adjustments to the
\ncarrying value or amortisation pro\ufb01le of DAC
\nasset are necessary.
\nImpacts $3.3 billion of DAC as shown in
\nnote\u00a0C4.2.
\nExcept for acquisition costs of the UK-style with-pro\ufb01ts funds\u2019 contracts in Hong Kong, which are
\naccounted for under the \u2018grandfathered\u2019 FRS 27, costs of acquiring new insurance business are
\naccounted for in a way that is consistent with the principles of the \u2018grandfathered\u2019 ABI SORP.
\nThe Group determines qualifying costs that should be capitalised (ie those costs of acquiring
\nnew insurance contracts that meet the criteria under the Group\u2019s accounting policy for DAC)
\nshown by an explicit carrying value in the balance sheet. However, in some insurance operations,
\nthe deferral is implicit through the reserving basis. DAC is amortised against the pro\ufb01t margins
\nwithin future revenues on the related insurance policies. For some business units this is
\napproximated by amortising DAC on a straight-line basis over the expected duration of the
\npolicies.
\nThe recoverability of the DAC is measured and the DAC asset is deemed impaired if the
\nprojected margins (which are estimated based on a number of assumptions similar to those
\nunderlying policyholder liabilities) are less than the carrying value. To the extent that the future
\nmargins di\ufb00er from those anticipated, an adjustment to the carrying value will be necessary
\neither through a charge to the income statement (if the projected margins are lower than
\ncarrying value) or through a change in the amortisation pro\ufb01le.
\nFor those business units applying US GAAP to insurance assets and liabilities, as permitted by
\nthe \u2018grandfathered\u2019 ABI SORP, acquisition costs are deferred and amortised as per the US GAAP
\nrequirements under ASC 944 Financial Services \u2013 Insurance.
\nFinancial investments \u2013 valuation
\nFinancial investments held at fair value
\nrepresent $135.7 billion of the Group\u2019s total
\nassets.
\nFinancial investments held at amortised cost
\nrepresent $8.4 billion of the Group\u2019s total
\nassets.
\nThe Group estimates the fair value of \ufb01nancial
\ninvestments that are not actively traded using
\nquotations from independent third parties or
\ninternally developed pricing models.
\nThe Group holds the majority of its \ufb01nancial investments at fair value (primarily through pro\ufb01t or
\nloss). Financial investments held at amortised cost primarily comprise loans and deposits.
\nDetermination of fair value
\nThe fair values of the \ufb01nancial instruments for which fair valuation is required under IFRS
\nStandards are determined by the use of quoted market prices for exchange-quoted investments
\nor by using quotations from independent third parties such as brokers and pricing services or by
\nusing appropriate valuation techniques. Further details are included in note C2.1.
\nThe estimated fair value of derivative \ufb01nancial instruments re\ufb02ects the estimated amount the
\nGroup would receive or pay in an arm\u2019s-length transaction. This amount is determined using
\nquoted prices if exchange listed, quotations from independent third parties or valued internally
\nusing standard market practices.
\nQuoted market prices are used to value investments having quoted prices. Actively traded
\ninvestments without quoted prices are valued using prices provided by third parties such as
\nbrokers or pricing services. Financial investments measured at fair value are classi\ufb01ed into a
\nthree-level hierarchy as described in note C2.1.
\nIf the market for a \ufb01nancial investment of the Group is not active, the Group establishes fair
\nvalue by using quotations from independent third parties, such as brokers or pricing services, or
\nby using internally developed pricing models. Priority is given to publicly available prices from
\nindependent sources when available, but overall the source of pricing and/or the valuation
\ntechnique is chosen with the objective of arriving at a fair value measurement which re\ufb02ects the
\nprice at which an orderly transaction would take place between market participants on the
\nmeasurement date. Changes in assumptions relating to these variables could positively or
\nnegatively impact the reported fair value of these \ufb01nancial investments. Details of the \ufb01nancial
\ninvestments classi\ufb01ed as \u2018level 3\u2019 to which valuation techniques are applied and the sensitivity of
\npro\ufb01t before tax to a change in the valuation of these items, are presented in note C2.2.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfAssetsAndLiabilitiesWithSignificantRiskOfMaterialAdjustmentExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f33982": {
"value": "A3.1Critical accounting policies, estimates and judgements
\nNote A3.1 presents the critical accounting policies, estimates and judgements applied in preparing the Group\u2019s consolidated \ufb01nancial statements.
\nOther accounting policies, where signi\ufb01cant, are presented in the relevant individual notes. All accounting policies are applied consistently for the
\nyears presented and normally are not subject to changes unless new accounting standards, interpretations or amendments are introduced by the
\nIASB.
\nThe preparation of these consolidated \ufb01nancial statements requires Prudential to make accounting estimates and judgements about the
\namounts of assets, liabilities, revenues and expenses, which are both recognised and unrecognised (eg contingent liabilities) in the consolidated
\n\ufb01nancial statements. Prudential evaluates its critical accounting estimates, including those related to long-term business provisioning and the fair
\nvalue of assets as required. The notes below set out those critical accounting policies, the application of which requires the Group to make critical
\nestimates and judgements. Also set out are further critical accounting policies a\ufb00ecting the presentation of the Group\u2019s results and other items
\nthat require the application of critical estimates and judgements.
289
Prudential plc
Annual Report 2022
\nGroup overview
Strategic report
Governance
Directors\u2019 remuneration report
European Embedded Value (EEV) basis results
Additional information
Financial statements
A Basis of preparation and accounting policies
/ continued
\nA3 Accounting policies
continued
\nA3.1
Critical accounting policies, estimates and judgements
continued
\n(a) Critical accounting policies with associated critical estimates and judgements
\nMeasurement of policyholder liabilities and unallocated surplus of with-pro\ufb01ts
\nThe measurement basis of policyholder
\nliabilities is dependent upon the classi\ufb01cation
\nof the contracts under IFRS 4.
\nImpacts $146.7 billion of policyholder liabilities
\nand unallocated surplus of with-pro\ufb01ts funds
\nincluding those held by joint venture and
\nassociates.
\nPolicyholder liabilities are estimated based on
\na number of actuarial assumptions (eg
\nmortality, morbidity, policyholder behaviour
\nand expenses).
\nThe Group applies judgement in determining
\nthe actuarial assumptions to be applied to
\nestimate the future amounts due to or from
\nthe policyholder in the measurement of the
\npolicyholder liabilities.
\nIFRS 4 permits the continued usage of previously applied Generally Accepted Accounting
\nPractices (GAAP) for insurance contracts and investment contracts with discretionary
\nparticipating features.
\nA modi\ufb01ed statutory basis of reporting was adopted by the Group on \ufb01rst time adoption of IFRS
\nStandards in 2005. This was set out in the Statement of Recommended Practice issued by the
\nAssociation of British Insurers (ABI SORP). The ABI SORP was withdrawn for the accounting
\nperiods beginning in or after 2015. As used in these consolidated \ufb01nancial statements, the term
\n\u2018grandfathered\u2019 ABI SORP refers to the requirements of the pronouncements prior to its
\nwithdrawal.
\nFor investment contracts that do not contain discretionary participating features, IAS 39 is
\napplied and, where the contract includes an investment management element, IFRS 15
\n\u2018Revenue from Contracts with Customers\u2019 applies.
\nThe current policies applied for the Group\u2019s insurance businesses are noted below.
\nMeasurement of insurance contract liabilities and investment contract
\nliabilities with discretionary participation features
\nThe policyholder liabilities for businesses of the insurance operations are generally determined
\nin accordance with methods prescribed by local GAAP, adjusted to comply with the
\n\u2018grandfathered\u2019 ABI SORP where necessary. Re\ufb01nements to the local reserving methodology are
\ngenerally treated as changes in estimates, dependent on their nature. The UK-style with-pro\ufb01ts
\nfunds\u2019 liabilities in Hong Kong are valued under the realistic basis in accordance with the
\nrequirements of \u2018grandfathered\u2019 FRS 27 \u2018Life Assurance\u2019 (issued by the UK Accounting Standards
\nBoard in 2004 and withdrawn in 2015). The realistic basis requires the value of liabilities to be
\ncalculated as the sum of a with-pro\ufb01ts bene\ufb01ts reserve, future policy-related liabilities and the
\nrealistic current liabilities of the fund. In Taiwan and India, US GAAP principles are applied.
\nFurther details on how liabilities are determined for material product types are set out in note
\nC3.4. This includes the approach to assumption setting including a margin for prudence. The
\nsensitivity of the insurance operations to variations in key economic assumptions, as well as the
\ninsurance risks of mortality and morbidity, is discussed in note C6.1.
\nIn April 2022 Prudential Hong Kong Limited received approval from the Hong Kong IA to early
\nadopt the new risk-based capital regime e\ufb00ective from 1 January 2022. The implication for IFRS
\nreporting of the Group is as explained further in note C3.2.
\nMeasurement of unallocated surplus of with-pro\ufb01ts funds
\nUnallocated surplus of with-pro\ufb01ts funds represents the excess of assets over policyholder
\nliabilities, determined in accordance with the Group\u2019s accounting policies, that have yet to be
\nappropriated between policyholders and shareholders for the Group\u2019s with-pro\ufb01ts funds in Hong
\nKong and Malaysia. The unallocated surplus is recorded wholly as a liability with no allocation to
\nequity. The annual excess or shortfall of income over expenditure of the with-pro\ufb01ts funds, after
\ndeclaration and attribution of the cost of bonuses to policyholders and shareholders, is
\ntransferred to or from the unallocated surplus each period through a charge or credit to the
\nincome statement. In Hong Kong, the unallocated surplus includes the shareholders\u2019 share of
\nexpected future bonuses, with the expected policyholder share being included in policyholder
\nliabilities. Any excess of assets over liabilities and amounts expected to be paid out by the fund
\non future bonuses is also included in the unallocated surplus.
\nThe balance of the unallocated surplus is determined after full provision for deferred tax on
\nunrealised appreciation or depreciation on investments.
\nLiability adequacy test
\nThe Group performs adequacy testing on its insurance liabilities to ensure that the carrying
\namounts (net of related deferred acquisition costs and, where relevant, present value of
\nacquired in-force business) is su\ufb03cient to cover current estimates of future cash out\ufb02ows of the
\nin-force policies over the expected lives. Any de\ufb01ciency is immediately charged to the income
\nstatement. The liability adequacy test is performed at the level of a portfolio of contracts that
\nare subject to broadly similar risks and managed together as a single portfolio which may be at
\nan entity or business unit level, depending on how the business is managed.
\n290
Prudential plc
Annual Report 2022
prudentialplc.com
(b) Further critical accounting policies a\ufb00ecting the presentation of the Group\u2019s results
\nPresentation of results before tax attributable to shareholders
\nPro\ufb01t before tax is a signi\ufb01cant IFRS income
\nstatement item. The Group has chosen to
\npresent a measure of pro\ufb01t before tax
\nattributable to shareholders which
\ndistinguishes between tax borne by
\nshareholders and tax attributable to
\npolicyholders to support understanding of the
\nperformance of the Group.
\nPro\ufb01t before tax attributable to shareholders is
\n$1,461 million and compares to pro\ufb01t before
\ntax of $1,482 million.
\nThe total tax charge for the Group re\ufb02ects tax that, in addition to that relating to shareholders\u2019
\npro\ufb01t, is also attributable to policyholders through the interest in with-pro\ufb01ts or unit-linked
\nfunds. Further detail is provided in note B3. Reported IFRS pro\ufb01t before the tax measure is
\ntherefore not representative of pre-tax pro\ufb01t attributable to shareholders. Accordingly, in order
\nto provide a measure of pre-tax pro\ufb01t attributable to shareholders, the Group has chosen to
\nadopt an income statement presentation of the tax charge and pre-tax results that
\ndistinguishes between policyholders\u2019 and shareholders\u2019 returns.
\nSegmental analysis of results and earnings attributable to shareholders
\nThe Group uses adjusted operating pro\ufb01t as
\nthe segmental measure of its results.
\nTotal segmental adjusted operating pro\ufb01t is
\n$4,106 million and is shown in note B1.1.
\nThe basis of calculation of adjusted operating pro\ufb01t is provided in note B1.2.
\nFor shareholder-backed business, with the exception of securities which are treated as
\navailable-for-sale (AFS), and assets classi\ufb01ed as loans and receivables at amortised cost, all
\n\ufb01nancial investments and investment properties are designated as assets at fair value through
\npro\ufb01t or loss. Short-term \ufb02uctuations in fair value a\ufb00ect the result for the year and the Group
\nprovides additional analysis of results before and after the e\ufb00ects of short-term \ufb02uctuations
\nin\u00a0investment returns, together with other items that are of a short-term, volatile or one-o\ufb00
\nin\u00a0nature.
\nShort-term \ufb02uctuations in investment returns on assets held by with-pro\ufb01ts funds in Hong Kong,
\nMalaysia and Singapore do not a\ufb00ect directly reported shareholder results. This is because (i)
\nthe unallocated surplus of with-pro\ufb01ts funds is accounted for as a liability and (ii) excess or de\ufb01cit
\nof income and expenditure of the funds over the required surplus for distribution are transferred
\nto or from policyholder liabilities (including the unallocated surplus).
\n(c) Other items requiring application of critical estimates or judgements
\nCarrying value of distribution rights intangible assets
\nThe Group applies judgement to assess
\nwhether factors such as the \ufb01nancial
\nperformance of the distribution arrangements,
\nchanges in relevant legislation and regulatory
\nrequirements indicate an impairment of
\nintangible assets representing distribution
\nrights.
\nTo determine the impaired value, the Group
\nestimates the discounted future expected cash
\n\ufb02ows arising from the cash generating unit
\ncontaining the distribution rights.
\nA\ufb00ects $3.6 billion of assets as shown in note
\nC4.2.
\nDistribution rights relate to bancassurance partnership arrangements for the distribution of
\nproducts for the term of the contractual agreement with the bank partner, for which an asset is
\nrecognised based on fees paid and fees payable not subject to performance conditions.
\nDistribution rights impairment testing is conducted when there is an indication of an
\nimpairment.
\nTo assess indicators of an impairment, the Group monitors a number of internal and external
\nfactors, including indications that the \ufb01nancial performance of the arrangement is likely to be
\nworse than expected and changes in relevant legislation and regulatory requirements that
\ncould impact the Group\u2019s ability to continue to sell new business through the bancassurance
\nchannel, and then applies judgement to assess whether these factors indicate that an
\nimpairment has occurred.
\nIf an impairment has occurred, a charge is recognised in the income statement for the
\ndi\ufb00erence between the carrying value and recoverable amount of the asset. The recoverable
\namount is the greater of fair value less costs to sell and value in use. Value in use is calculated as
\nthe present value of future expected cash \ufb02ows from the asset or the cash generating unit to
\nwhich it is allocated.
\n291
Prudential plc
Annual Report 2022
\nGroup overview
Strategic report
Governance
Directors\u2019 remuneration report
European Embedded Value (EEV) basis results
Additional information
Financial statements
A Basis of preparation and accounting policies
/ continued
\nA3 Accounting policies
continued
\nA3.1
Critical accounting policies, estimates and judgements
continued
\nDeferred acquisition costs (DAC) for insurance contracts
\nThe Group estimates projected future pro\ufb01ts/
\nmargins to assess whether adjustments to the
\ncarrying value or amortisation pro\ufb01le of DAC
\nasset are necessary.
\nImpacts $3.3 billion of DAC as shown in
\nnote\u00a0C4.2.
\nExcept for acquisition costs of the UK-style with-pro\ufb01ts funds\u2019 contracts in Hong Kong, which are
\naccounted for under the \u2018grandfathered\u2019 FRS 27, costs of acquiring new insurance business are
\naccounted for in a way that is consistent with the principles of the \u2018grandfathered\u2019 ABI SORP.
\nThe Group determines qualifying costs that should be capitalised (ie those costs of acquiring
\nnew insurance contracts that meet the criteria under the Group\u2019s accounting policy for DAC)
\nshown by an explicit carrying value in the balance sheet. However, in some insurance operations,
\nthe deferral is implicit through the reserving basis. DAC is amortised against the pro\ufb01t margins
\nwithin future revenues on the related insurance policies. For some business units this is
\napproximated by amortising DAC on a straight-line basis over the expected duration of the
\npolicies.
\nThe recoverability of the DAC is measured and the DAC asset is deemed impaired if the
\nprojected margins (which are estimated based on a number of assumptions similar to those
\nunderlying policyholder liabilities) are less than the carrying value. To the extent that the future
\nmargins di\ufb00er from those anticipated, an adjustment to the carrying value will be necessary
\neither through a charge to the income statement (if the projected margins are lower than
\ncarrying value) or through a change in the amortisation pro\ufb01le.
\nFor those business units applying US GAAP to insurance assets and liabilities, as permitted by
\nthe \u2018grandfathered\u2019 ABI SORP, acquisition costs are deferred and amortised as per the US GAAP
\nrequirements under ASC 944 Financial Services \u2013 Insurance.
\nFinancial investments \u2013 valuation
\nFinancial investments held at fair value
\nrepresent $135.7 billion of the Group\u2019s total
\nassets.
\nFinancial investments held at amortised cost
\nrepresent $8.4 billion of the Group\u2019s total
\nassets.
\nThe Group estimates the fair value of \ufb01nancial
\ninvestments that are not actively traded using
\nquotations from independent third parties or
\ninternally developed pricing models.
\nThe Group holds the majority of its \ufb01nancial investments at fair value (primarily through pro\ufb01t or
\nloss). Financial investments held at amortised cost primarily comprise loans and deposits.
\nDetermination of fair value
\nThe fair values of the \ufb01nancial instruments for which fair valuation is required under IFRS
\nStandards are determined by the use of quoted market prices for exchange-quoted investments
\nor by using quotations from independent third parties such as brokers and pricing services or by
\nusing appropriate valuation techniques. Further details are included in note C2.1.
\nThe estimated fair value of derivative \ufb01nancial instruments re\ufb02ects the estimated amount the
\nGroup would receive or pay in an arm\u2019s-length transaction. This amount is determined using
\nquoted prices if exchange listed, quotations from independent third parties or valued internally
\nusing standard market practices.
\nQuoted market prices are used to value investments having quoted prices. Actively traded
\ninvestments without quoted prices are valued using prices provided by third parties such as
\nbrokers or pricing services. Financial investments measured at fair value are classi\ufb01ed into a
\nthree-level hierarchy as described in note C2.1.
\nIf the market for a \ufb01nancial investment of the Group is not active, the Group establishes fair
\nvalue by using quotations from independent third parties, such as brokers or pricing services, or
\nby using internally developed pricing models. Priority is given to publicly available prices from
\nindependent sources when available, but overall the source of pricing and/or the valuation
\ntechnique is chosen with the objective of arriving at a fair value measurement which re\ufb02ects the
\nprice at which an orderly transaction would take place between market participants on the
\nmeasurement date. Changes in assumptions relating to these variables could positively or
\nnegatively impact the reported fair value of these \ufb01nancial investments. Details of the \ufb01nancial
\ninvestments classi\ufb01ed as \u2018level 3\u2019 to which valuation techniques are applied and the sensitivity of
\npro\ufb01t before tax to a change in the valuation of these items, are presented in note C2.2.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfAccountingJudgementsAndEstimatesExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f34030": {
"value": "Measurement of policyholder liabilities and unallocated surplus of with-pro\ufb01ts The measurement basis of policyholder
\nliabilities is dependent upon the classi\ufb01cation
\nof the contracts under IFRS 4.
\nImpacts $146.7 billion of policyholder liabilities
\nand unallocated surplus of with-pro\ufb01ts funds
\nincluding those held by joint venture and
\nassociates.
\nPolicyholder liabilities are estimated based on
\na number of actuarial assumptions (eg
\nmortality, morbidity, policyholder behaviour
\nand expenses).
\nThe Group applies judgement in determining
\nthe actuarial assumptions to be applied to
\nestimate the future amounts due to or from
\nthe policyholder in the measurement of the
\npolicyholder liabilities.
\nIFRS 4 permits the continued usage of previously applied Generally Accepted Accounting
\nPractices (GAAP) for insurance contracts and investment contracts with discretionary
\nparticipating features.
\nA modi\ufb01ed statutory basis of reporting was adopted by the Group on \ufb01rst time adoption of IFRS
\nStandards in 2005. This was set out in the Statement of Recommended Practice issued by the
\nAssociation of British Insurers (ABI SORP). The ABI SORP was withdrawn for the accounting
\nperiods beginning in or after 2015. As used in these consolidated \ufb01nancial statements, the term
\n\u2018grandfathered\u2019 ABI SORP refers to the requirements of the pronouncements prior to its
\nwithdrawal.
\nFor investment contracts that do not contain discretionary participating features, IAS 39 is
\napplied and, where the contract includes an investment management element, IFRS 15
\n\u2018Revenue from Contracts with Customers\u2019 applies.
\nThe current policies applied for the Group\u2019s insurance businesses are noted below.
\nMeasurement of insurance contract liabilities and investment contract
\nliabilities with discretionary participation features
\nThe policyholder liabilities for businesses of the insurance operations are generally determined
\nin accordance with methods prescribed by local GAAP, adjusted to comply with the
\n\u2018grandfathered\u2019 ABI SORP where necessary. Re\ufb01nements to the local reserving methodology are
\ngenerally treated as changes in estimates, dependent on their nature. The UK-style with-pro\ufb01ts
\nfunds\u2019 liabilities in Hong Kong are valued under the realistic basis in accordance with the
\nrequirements of \u2018grandfathered\u2019 FRS 27 \u2018Life Assurance\u2019 (issued by the UK Accounting Standards
\nBoard in 2004 and withdrawn in 2015). The realistic basis requires the value of liabilities to be
\ncalculated as the sum of a with-pro\ufb01ts bene\ufb01ts reserve, future policy-related liabilities and the
\nrealistic current liabilities of the fund. In Taiwan and India, US GAAP principles are applied.
\nFurther details on how liabilities are determined for material product types are set out in note
\nC3.4. This includes the approach to assumption setting including a margin for prudence. The
\nsensitivity of the insurance operations to variations in key economic assumptions, as well as the
\ninsurance risks of mortality and morbidity, is discussed in note C6.1.
\nIn April 2022 Prudential Hong Kong Limited received approval from the Hong Kong IA to early
\nadopt the new risk-based capital regime e\ufb00ective from 1 January 2022. The implication for IFRS
\nreporting of the Group is as explained further in note C3.2.
\nMeasurement of unallocated surplus of with-pro\ufb01ts funds
\nUnallocated surplus of with-pro\ufb01ts funds represents the excess of assets over policyholder
\nliabilities, determined in accordance with the Group\u2019s accounting policies, that have yet to be
\nappropriated between policyholders and shareholders for the Group\u2019s with-pro\ufb01ts funds in Hong
\nKong and Malaysia. The unallocated surplus is recorded wholly as a liability with no allocation to
\nequity. The annual excess or shortfall of income over expenditure of the with-pro\ufb01ts funds, after
\ndeclaration and attribution of the cost of bonuses to policyholders and shareholders, is
\ntransferred to or from the unallocated surplus each period through a charge or credit to the
\nincome statement. In Hong Kong, the unallocated surplus includes the shareholders\u2019 share of
\nexpected future bonuses, with the expected policyholder share being included in policyholder
\nliabilities. Any excess of assets over liabilities and amounts expected to be paid out by the fund
\non future bonuses is also included in the unallocated surplus.
\nThe balance of the unallocated surplus is determined after full provision for deferred tax on
\nunrealised appreciation or depreciation on investments.
\nLiability adequacy test
\nThe Group performs adequacy testing on its insurance liabilities to ensure that the carrying
\namounts (net of related deferred acquisition costs and, where relevant, present value of
\nacquired in-force business) is su\ufb03cient to cover current estimates of future cash out\ufb02ows of the
\nin-force policies over the expected lives. Any de\ufb01ciency is immediately charged to the income
\nstatement. The liability adequacy test is performed at the level of a portfolio of contracts that
\nare subject to broadly similar risks and managed together as a single portfolio which may be at
\nan entity or business unit level, depending on how the business is managed. ",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForInsuranceContracts",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f34161": {
"value": "(c) Other items requiring application of critical estimates or judgements
\nCarrying value of distribution rights intangible assets
\nThe Group applies judgement to assess
\nwhether factors such as the \ufb01nancial
\nperformance of the distribution arrangements,
\nchanges in relevant legislation and regulatory
\nrequirements indicate an impairment of
\nintangible assets representing distribution
\nrights.
\nTo determine the impaired value, the Group
\nestimates the discounted future expected cash
\n\ufb02ows arising from the cash generating unit
\ncontaining the distribution rights.
\nA\ufb00ects $3.6 billion of assets as shown in note
\nC4.2.
\nDistribution rights relate to bancassurance partnership arrangements for the distribution of
\nproducts for the term of the contractual agreement with the bank partner, for which an asset is
\nrecognised based on fees paid and fees payable not subject to performance conditions.
\nDistribution rights impairment testing is conducted when there is an indication of an
\nimpairment.
\nTo assess indicators of an impairment, the Group monitors a number of internal and external
\nfactors, including indications that the \ufb01nancial performance of the arrangement is likely to be
\nworse than expected and changes in relevant legislation and regulatory requirements that
\ncould impact the Group\u2019s ability to continue to sell new business through the bancassurance
\nchannel, and then applies judgement to assess whether these factors indicate that an
\nimpairment has occurred.
\nIf an impairment has occurred, a charge is recognised in the income statement for the
\ndi\ufb00erence between the carrying value and recoverable amount of the asset. The recoverable
\namount is the greater of fair value less costs to sell and value in use. Value in use is calculated as
\nthe present value of future expected cash \ufb02ows from the asset or the cash generating unit to
\nwhich it is allocated.
Goodwill Goodwill is capitalised and carried on the Group consolidated statement of \ufb01nancial position as an intangible asset at initial value less any
\naccumulated impairment losses. Goodwill impairment testing is conducted annually and when there is an indication of impairment.
\nGoodwill shown on the consolidated statement of \ufb01nancial position at 31 December 2022 represents amounts allocated to business units in
respect of both acquired asset management and life businesses. There has been no impairment as at 31 December 2022 and 2021. Intangible assets acquired on the purchase of a subsidiary or portfolio of contracts are measured at fair value on acquisition. DAC are accounted
\nfor as described in note A3.1(c). Other intangible assets, such as distribution rights and software, are valued initially at the price paid to acquire or
\ncost to develop them and are subsequently carried at cost less amortisation and any accumulated impairment losses. For intangibles other than
\nDAC, amortisation follows the pattern in which the future economic bene\ufb01ts are expected to be consumed. If the pattern cannot be determined
\nreliably, a straight-line method is applied. For software, the amortisation generally represents the licence period of the software acquired.
\nAmortisation of intangible assets is charged to the \u2018acquisition costs and other expenditure\u2019 line in the Consolidated income statement.
\nImpairment testing is conducted when there is an indication of impairment.
Property, plant and equipment comprise Group occupied properties and tangible assets. Property, plant and equipment also includes right-of-useassets for operating leases of properties occupied by the Group and leases of equipment and other tangible assets. All property, plant and
\nequipment, including the right-of-use assets under operating leases, are held at cost less cumulative depreciation, calculated using the straight-line
\nmethod, and impairment charge.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfNonfinancialAssetsExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f34164": {
"value": "Carrying value of distribution rights intangible assets
\nThe Group applies judgement to assess
\nwhether factors such as the \ufb01nancial
\nperformance of the distribution arrangements,
\nchanges in relevant legislation and regulatory
\nrequirements indicate an impairment of
\nintangible assets representing distribution
\nrights.
\nTo determine the impaired value, the Group
\nestimates the discounted future expected cash
\n\ufb02ows arising from the cash generating unit
\ncontaining the distribution rights.
\nA\ufb00ects $3.6 billion of assets as shown in note
\nC4.2.
\nDistribution rights relate to bancassurance partnership arrangements for the distribution of
\nproducts for the term of the contractual agreement with the bank partner, for which an asset is
\nrecognised based on fees paid and fees payable not subject to performance conditions.
\nDistribution rights impairment testing is conducted when there is an indication of an
\nimpairment.
\nTo assess indicators of an impairment, the Group monitors a number of internal and external
\nfactors, including indications that the \ufb01nancial performance of the arrangement is likely to be
\nworse than expected and changes in relevant legislation and regulatory requirements that
\ncould impact the Group\u2019s ability to continue to sell new business through the bancassurance
\nchannel, and then applies judgement to assess whether these factors indicate that an
\nimpairment has occurred.
\nIf an impairment has occurred, a charge is recognised in the income statement for the
\ndi\ufb00erence between the carrying value and recoverable amount of the asset. The recoverable
\namount is the greater of fair value less costs to sell and value in use. Value in use is calculated as
\nthe present value of future expected cash \ufb02ows from the asset or the cash generating unit to
\nwhich it is allocated.
Intangible assets acquired on the purchase of a subsidiary or portfolio of contracts are measured at fair value on acquisition. DAC are accounted
\nfor as described in note A3.1(c). Other intangible assets, such as distribution rights and software, are valued initially at the price paid to acquire or
\ncost to develop them and are subsequently carried at cost less amortisation and any accumulated impairment losses. For intangibles other than
\nDAC, amortisation follows the pattern in which the future economic bene\ufb01ts are expected to be consumed. If the pattern cannot be determined
\nreliably, a straight-line method is applied. For software, the amortisation generally represents the licence period of the software acquired.
\nAmortisation of intangible assets is charged to the \u2018acquisition costs and other expenditure\u2019 line in the Consolidated income statement.
\nImpairment testing is conducted when there is an indication of impairment.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForIntangibleAssetsOtherThanGoodwillExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f34165": {
"value": "Carrying value of distribution rights intangible assets
\nThe Group applies judgement to assess
\nwhether factors such as the \ufb01nancial
\nperformance of the distribution arrangements,
\nchanges in relevant legislation and regulatory
\nrequirements indicate an impairment of
\nintangible assets representing distribution
\nrights.
\nTo determine the impaired value, the Group
\nestimates the discounted future expected cash
\n\ufb02ows arising from the cash generating unit
\ncontaining the distribution rights.
\nA\ufb00ects $3.6 billion of assets as shown in note
\nC4.2.
\nDistribution rights relate to bancassurance partnership arrangements for the distribution of
\nproducts for the term of the contractual agreement with the bank partner, for which an asset is
\nrecognised based on fees paid and fees payable not subject to performance conditions.
\nDistribution rights impairment testing is conducted when there is an indication of an
\nimpairment.
\nTo assess indicators of an impairment, the Group monitors a number of internal and external
\nfactors, including indications that the \ufb01nancial performance of the arrangement is likely to be
\nworse than expected and changes in relevant legislation and regulatory requirements that
\ncould impact the Group\u2019s ability to continue to sell new business through the bancassurance
\nchannel, and then applies judgement to assess whether these factors indicate that an
\nimpairment has occurred.
\nIf an impairment has occurred, a charge is recognised in the income statement for the
\ndi\ufb00erence between the carrying value and recoverable amount of the asset. The recoverable
\namount is the greater of fair value less costs to sell and value in use. Value in use is calculated as
\nthe present value of future expected cash \ufb02ows from the asset or the cash generating unit to
\nwhich it is allocated.
C2 Fair value measurement The Group uses the trade date method to account for regular purchases and sales of \ufb01nancial assets. The Group holds \ufb01nancial assets in
\naccordance with IAS 39, whereby subject to speci\ufb01c criteria, \ufb01nancial instruments are required to be accounted for under one of the following
\ncategories:
\n >
Financial assets and liabilities at fair value through pro\ufb01t or loss (FVTPL): this comprises assets and liabilities designated by management as
\nFVTPL on inception and derivatives. This includes instruments that are managed and the performance evaluated on a fair value basis, including
\nliabilities related to net assets attributable to unit holders of consolidated investment funds and policyholder liabilities for investment contracts
\nwithout discretionary participation features. All investments within this category are measured at fair value with all changes thereon being
\nrecognised in investment return in the income statement.
\n>
Financial investments on an available-for-sale (AFS) basis: this comprises assets that are designated by management as AFS and/or do not fall
\ninto any of the other categories. These assets are initially recognised at fair value plus attributable transaction costs and are subsequently
\nmeasured at fair value. Interest and/or dividend income is recognised in the income statement. Unrealised gains and losses are recognised in
\nother comprehensive income. Upon disposal or impairment, accumulated unrealised gains and losses are transferred from other comprehensive
\nincome to the income statement as realised gains or losses. Subsequent to the demerger of Jackson in September 2021, the Group has
\ndesignated its retained interest in Jackson (as described in note D1.2) as AFS equity securities.
\n >
Loans and receivables: except for those designated as FVTPL or AFS, these instruments comprise non-quoted investments that have \ufb01xed or
\ndeterminable payments, including loans collateralised by mortgages, deposits, loans to policyholders and other unsecured loans and
\nreceivables. These investments are initially recognised at fair value plus transaction costs. Subsequently, these instruments are carried at
\namortised cost using the e\ufb00ective interest method. The e\ufb00ective interest rate is the rate that exactly discounts estimated future cash receipts
\nthrough the expected life of the \ufb01nancial instrument or, when appropriate, a shorter period to the net carrying amount of the \ufb01nancial asset.
\nWhen assets held at amortised cost are subject to impairment testing, estimated future cash \ufb02ows are compared to the carrying value of the
\nasset. The estimated future cash \ufb02ows are discounted using the \ufb01nancial asset\u2019s original or variable e\ufb00ective interest rate and exclude credit
\nlosses that have not yet been incurred. If, in subsequent periods, an impaired loan or receivable recovers in value (in part or in full) and this
\nrecovery can be objectively related to an event occurring after the impairment, then any amount determined to have been recovered is reversed
through the income statement. Goodwill Goodwill is capitalised and carried on the Group consolidated statement of \ufb01nancial position as an intangible asset at initial value less any accumulated impairment losses. Goodwill impairment testing is conducted annually and when there is an indication of impairment.
\nGoodwill shown on the consolidated statement of \ufb01nancial position at 31 December 2022 represents amounts allocated to business units in
respect of both acquired asset management and life businesses. There has been no impairment as at 31 December 2022 and 2021. Intangible assets acquired on the purchase of a subsidiary or portfolio of contracts are measured at fair value on acquisition. DAC are accounted
\nfor as described in note A3.1(c). Other intangible assets, such as distribution rights and software, are valued initially at the price paid to acquire or
\ncost to develop them and are subsequently carried at cost less amortisation and any accumulated impairment losses. For intangibles other than
\nDAC, amortisation follows the pattern in which the future economic bene\ufb01ts are expected to be consumed. If the pattern cannot be determined
\nreliably, a straight-line method is applied. For software, the amortisation generally represents the licence period of the software acquired.
\nAmortisation of intangible assets is charged to the \u2018acquisition costs and other expenditure\u2019 line in the Consolidated income statement.
\nImpairment testing is conducted when there is an indication of impairment.
Property, plant and equipment comprise Group occupied properties and tangible assets. Property, plant and equipment also includes right-of-useassets for operating leases of properties occupied by the Group and leases of equipment and other tangible assets. All property, plant and
\nequipment, including the right-of-use assets under operating leases, are held at cost less cumulative depreciation, calculated using the straight-line
method, and impairment charge.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfAssetsExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f34227": {
"value": "Deferred acquisition costs (DAC) for insurance contracts The Group estimates projected future pro\ufb01ts/
\nmargins to assess whether adjustments to the
\ncarrying value or amortisation pro\ufb01le of DAC
\nasset are necessary.
\nImpacts $3.3 billion of DAC as shown in
\nnote\u00a0C4.2.
\nExcept for acquisition costs of the UK-style with-pro\ufb01ts funds\u2019 contracts in Hong Kong, which are
\naccounted for under the \u2018grandfathered\u2019 FRS 27, costs of acquiring new insurance business are
\naccounted for in a way that is consistent with the principles of the \u2018grandfathered\u2019 ABI SORP.
\nThe Group determines qualifying costs that should be capitalised (ie those costs of acquiring
\nnew insurance contracts that meet the criteria under the Group\u2019s accounting policy for DAC)
\nshown by an explicit carrying value in the balance sheet. However, in some insurance operations,
\nthe deferral is implicit through the reserving basis. DAC is amortised against the pro\ufb01t margins
\nwithin future revenues on the related insurance policies. For some business units this is
\napproximated by amortising DAC on a straight-line basis over the expected duration of the
\npolicies.
\nThe recoverability of the DAC is measured and the DAC asset is deemed impaired if the
\nprojected margins (which are estimated based on a number of assumptions similar to those
\nunderlying policyholder liabilities) are less than the carrying value. To the extent that the future
\nmargins di\ufb00er from those anticipated, an adjustment to the carrying value will be necessary
\neither through a charge to the income statement (if the projected margins are lower than
\ncarrying value) or through a change in the amortisation pro\ufb01le.
\nFor those business units applying US GAAP to insurance assets and liabilities, as permitted by
\nthe \u2018grandfathered\u2019 ABI SORP, acquisition costs are deferred and amortised as per the US GAAP
\nrequirements under ASC 944 Financial Services \u2013 Insurance.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForDeferredAcquisitionCostsArisingFromInsuranceContractsExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f34257": {
"value": "Financial investments \u2013 valuation
\nFinancial investments held at fair value
\nrepresent $135.7 billion of the Group\u2019s total
\nassets.
\nFinancial investments held at amortised cost
\nrepresent $8.4 billion of the Group\u2019s total
\nassets.
\nThe Group estimates the fair value of \ufb01nancial
\ninvestments that are not actively traded using
\nquotations from independent third parties or
\ninternally developed pricing models.
\nThe Group holds the majority of its \ufb01nancial investments at fair value (primarily through pro\ufb01t or
\nloss). Financial investments held at amortised cost primarily comprise loans and deposits.
\nDetermination of fair value
\nThe fair values of the \ufb01nancial instruments for which fair valuation is required under IFRS
\nStandards are determined by the use of quoted market prices for exchange-quoted investments
\nor by using quotations from independent third parties such as brokers and pricing services or by
\nusing appropriate valuation techniques. Further details are included in note C2.1.
\nThe estimated fair value of derivative \ufb01nancial instruments re\ufb02ects the estimated amount the
\nGroup would receive or pay in an arm\u2019s-length transaction. This amount is determined using
\nquoted prices if exchange listed, quotations from independent third parties or valued internally
\nusing standard market practices.
\nQuoted market prices are used to value investments having quoted prices. Actively traded
\ninvestments without quoted prices are valued using prices provided by third parties such as
\nbrokers or pricing services. Financial investments measured at fair value are classi\ufb01ed into a
\nthree-level hierarchy as described in note C2.1.
\nIf the market for a \ufb01nancial investment of the Group is not active, the Group establishes fair
\nvalue by using quotations from independent third parties, such as brokers or pricing services, or
\nby using internally developed pricing models. Priority is given to publicly available prices from
\nindependent sources when available, but overall the source of pricing and/or the valuation
\ntechnique is chosen with the objective of arriving at a fair value measurement which re\ufb02ects the
\nprice at which an orderly transaction would take place between market participants on the
\nmeasurement date. Changes in assumptions relating to these variables could positively or
\nnegatively impact the reported fair value of these \ufb01nancial investments. Details of the \ufb01nancial
\ninvestments classi\ufb01ed as \u2018level 3\u2019 to which valuation techniques are applied and the sensitivity of
pro\ufb01t before tax to a change in the valuation of these items, are presented in note C2.2.C2 Fair value measurement The Group uses the trade date method to account for regular purchases and sales of \ufb01nancial assets. The Group holds \ufb01nancial assets in
\naccordance with IAS 39, whereby subject to speci\ufb01c criteria, \ufb01nancial instruments are required to be accounted for under one of the following
\ncategories:
\n >
Financial assets and liabilities at fair value through pro\ufb01t or loss (FVTPL): this comprises assets and liabilities designated by management as
\nFVTPL on inception and derivatives. This includes instruments that are managed and the performance evaluated on a fair value basis, including
\nliabilities related to net assets attributable to unit holders of consolidated investment funds and policyholder liabilities for investment contracts
\nwithout discretionary participation features. All investments within this category are measured at fair value with all changes thereon being
\nrecognised in investment return in the income statement.
\n>
Financial investments on an available-for-sale (AFS) basis: this comprises assets that are designated by management as AFS and/or do not fall
\ninto any of the other categories. These assets are initially recognised at fair value plus attributable transaction costs and are subsequently
\nmeasured at fair value. Interest and/or dividend income is recognised in the income statement. Unrealised gains and losses are recognised in
\nother comprehensive income. Upon disposal or impairment, accumulated unrealised gains and losses are transferred from other comprehensive
\nincome to the income statement as realised gains or losses. Subsequent to the demerger of Jackson in September 2021, the Group has
\ndesignated its retained interest in Jackson (as described in note D1.2) as AFS equity securities.
\n >
Loans and receivables: except for those designated as FVTPL or AFS, these instruments comprise non-quoted investments that have \ufb01xed or
\ndeterminable payments, including loans collateralised by mortgages, deposits, loans to policyholders and other unsecured loans and
\nreceivables. These investments are initially recognised at fair value plus transaction costs. Subsequently, these instruments are carried at
\namortised cost using the e\ufb00ective interest method. The e\ufb00ective interest rate is the rate that exactly discounts estimated future cash receipts
\nthrough the expected life of the \ufb01nancial instrument or, when appropriate, a shorter period to the net carrying amount of the \ufb01nancial asset.
\nWhen assets held at amortised cost are subject to impairment testing, estimated future cash \ufb02ows are compared to the carrying value of the
\nasset. The estimated future cash \ufb02ows are discounted using the \ufb01nancial asset\u2019s original or variable e\ufb00ective interest rate and exclude credit
\nlosses that have not yet been incurred. If, in subsequent periods, an impaired loan or receivable recovers in value (in part or in full) and this
\nrecovery can be objectively related to an event occurring after the impairment, then any amount determined to have been recovered is reversed
through the income statement. ",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForFairValueMeasurementExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f34312": {
"value": "A3.2 New accounting pronouncements not yet e\ufb00ective
\nThe following standards, interpretations and amendments have been issued by the IASB but are not yet e\ufb00ective for the Group in 2022. The
\nGroup prepares consolidated \ufb01nancial statements in accordance with IFRS Standards as issued by the IASB and UK-adopted international
\naccounting standards. This is not intended to be a complete list as only those standards, interpretations and amendments that could have a
\nmaterial impact on the Group\u2019s consolidated \ufb01nancial statements are discussed.
\nIFRS 9 \u2018Financial instruments: Classi\ufb01cation and measurement\u2019
\nIFRS 9 became mandatorily e\ufb00ective for the annual periods beginning on or after 1 January 2018, with early application permitted and
\ntransitional rules apply. The Group met the eligibility criteria for temporary exemption under the Amendments to IFRS 4 from applying IFRS 9 and
\nhas accordingly deferred the adoption of IFRS 9 until 1 January 2023.
\nThe Group is eligible as its activities are predominantly to issue insurance contracts based on the criteria as set out in the amendments to IFRS
\n4. The required disclosure of the fair value of the Group\u2019s \ufb01nancial assets, showing the amounts for instruments that meet the \u2018Solely for Payment
\nof Principal and Interest\u2019 (SPPI) criteria but do not meet the de\ufb01nition of held for trading and are not managed and evaluated on a fair value basis
\nseparately from all other \ufb01nancial assets, is provided below.
\nThe Group is implementing this standard in conjunction with IFRS 17 as permitted. IFRS 9 replaces the existing IAS 39 \u2018Financial Instruments\u00a0\u2013
\nRecognition and Measurement\u2019 and will a\ufb00ect the following three areas:
\nThe classi\ufb01cation and the measurement of \ufb01nancial assets and liabilities
\nIFRS 9 rede\ufb01nes the classi\ufb01cation of \ufb01nancial assets. Based on the way in which the assets are managed in order to generate cash \ufb02ows and their
\ncontractual cash \ufb02ow characteristics (whether the cash \ufb02ows represent \u2018solely payments of principal and interest\u2019), \ufb01nancial assets are classi\ufb01ed
\ninto one of the following categories: amortised cost, fair value through other comprehensive income (FVOCI) and fair value through pro\ufb01t or loss
\n(FVTPL). An option is also available at initial recognition to irrevocably designate a \ufb01nancial asset as at FVTPL if doing so eliminates or signi\ufb01cantly
\nreduces accounting mismatches.
\nUnder IAS 39, 97 per cent of the Group\u2019s \ufb01nancial investments are valued at FVTPL and the vast majority of its investments will continue to be
\nclassi\ufb01ed as such under IFRS 9. The Company expects to make an election under IFRS 9 to measure its retained interest in Jackson\u2019s equity
\nsecurities at FVOCI. Under this designation, only dividend income from this retained interest is recognised in the pro\ufb01t or loss of the Company.
\nUnrealised gains and losses are recognised in other comprehensive income and there is no recycling to the pro\ufb01t or loss on derecognition.
\nThe existing IAS 39 amortised cost measurement for \ufb01nancial liabilities is largely maintained under IFRS 9. For \ufb01nancial liabilities designated at
\nFVTPL IFRS 9 requires changes in fair value due to changes in the entity\u2019s own credit risk to be recognised in other comprehensive income.
\nThe calculation of the impairment charge relevant for \ufb01nancial assets held at amortised cost or FVOCI
\nA new impairment model based on an expected credit loss approach replaces the existing IAS 39 incurred loss impairment model, resulting in
\nearlier recognition of credit losses compared to IAS 39. This aspect is the most complex area of IFRS 9 to implement and will involve signi\ufb01cant
\njudgements and estimation processes.
\nThe Group has assessed the scope of assets to which these requirements will apply and expects that the vast majority of the \ufb01nancial
\ninvestments of the Group to be held at FVTPL to which these requirements will not apply. Accordingly, no signi\ufb01cant amount of additional
\nimpairment is expected to be recognised by the Group under the expected credit loss approach as a result of the adoption of IFRS 9.
\nThe hedge accounting requirements which are more closely aligned with the risk management activities
\nThe Group has not applied hedge accounting treatment under IAS 39 and therefore, there is no impact in this area for the Group upon the
\nadoption of IFRS 9.
\nThe parent company and a number of intermediate holding companies and non-insurance subsidiaries adopted IFRS 9 in 2018 in their
\nindividual or separate \ufb01nancial statements where these statements are prepared in accordance with IFRS, including the UK Financial Reporting
\nStandard 101 \u2018Reduced Disclosure Framework\u2019. The public availability of the \ufb01nancial statements for these entities varies according to the local
\nlaws and regulations of each jurisdiction. The results for these entities continue to be accounted for on an IAS 39 basis in these consolidated
\n\ufb01nancial statements.
\nThe fair value of the Group\u2019s directly held \ufb01nancial assets at 31 December 2022 and 2021 are shown below. Financial assets with contractual
\nterms that give rise on speci\ufb01ed dates to cash \ufb02ows that are solely payments of principal and interest (SPPI) as de\ufb01ned by IFRS 9 are shown
\nseparately. This excludes \ufb01nancial assets that meet the de\ufb01nition of held for trading or are managed and evaluated on a fair value basis.
\n293
Prudential plc
Annual Report 2022
\nGroup overview
Strategic report
Governance
Directors\u2019 remuneration report
European Embedded Value (EEV) basis results
Additional information
Financial statements
A Basis of preparation and accounting policies
/ continued
\nA3 Accounting policies
continued
\nA3.2
New accounting pronouncements not yet e\ufb00ective
continued
\nFinancial assets, net of derivative liabilities
\nFinancial assets that
\npass\u00a0the\u00a0SPPI test
\nAll other \ufb01nancial assets,
\nnet\u00a0of\u00a0derivative liabilities
\nFair value at
\n31 Dec 2022
\n$m
\nMovement in
\nthe fair value
\nduring 2022
\n$m
\nFair value at
\n31 Dec 2022
\n$m
\nMovement in
\nthe fair value
\nduring 2022
\n$m
\nAccrued investment income
1,135
\u2013
\u2013
\u2013
\nOther debtors
1,694
\u2013
\u2013
\u2013
\nLoans
\nnote
\n2,189
15
468
(37)
\nEquity securities and holdings in collective investment schemes
\u2013
\u2013
57,679
(8,420)
\nDebt securities
\u2013
\u2013
76,989
(21,803)
\nDerivative assets, net of derivative liabilities
\u2013
\u2013
(432)
(4,487)
\nDeposits
6,275
\u2013
\u2013
\u2013
\nCash and cash equivalents
5,514
\u2013
\u2013
\u2013
\nTotal \ufb01nancial assets, net of derivative liabilities
16,807
15
134,704
(34,747)
\nFinancial assets, net of derivative liabilities
\nFinancial assets that
\npass\u00a0the\u00a0SPPI test
\nAll other \ufb01nancial assets,
\nnet\u00a0of\u00a0derivative liabilities
\nFair value at
\n31 Dec 2021
\n$m
\nMovement in
\nthe fair value
\nduring 2021
\n$m
\nFair value at
\n31 Dec 2021
\n$m
\nMovement in
\nthe fair value
\nduring 2021
\n$m
\nAccrued investment income
1,171
\u2013
\u2013
\u2013
\nOther debtors
1,779
\u2013
\u2013
\u2013
\nLoans
\nnote
\n2,126
41
647
(1)
\nEquity securities and holdings in collective investment schemes
\u2013
\u2013
61,601
4,061
\nDebt securities
226
\u2013
98,868
(3,164)
\nDerivative assets, net of derivative liabilities
\u2013
\u2013
219
(943)
\nDeposits
4,741
\u2013
\u2013
\u2013
\nCash and cash equivalents
7,170
\u2013
\u2013
\u2013
\nTotal \ufb01nancial assets, net of derivative liabilities
17,213
41
161,335
(47)
\nNote
\nThe loans that pass the SPPI test in the tables above are primarily carried at amortised cost under IAS 39. Further information on these loans is as provided in note C2.2.
\nThe underlying \ufb01nancial assets of the Group\u2019s joint ventures and associates accounted for using the equity method are analysed below into those
\nwhich meet the SPPI condition of IFRS 9, excluding any \ufb01nancial assets that meet the de\ufb01nition of held for trading or are managed and evaluated
\non a fair value basis, and all other \ufb01nancial assets.
\nFair value information of the \ufb01nancial assets held by CITIC-Prudential Life Insurance Company (CPL), the Group\u2019s individually material joint
\nventure, is shown in the table below. The amounts disclosed represent 100 per cent of the entity\u2019s \ufb01nancial assets and not the Group\u2019s share of
\nthose amounts and have been prepared on the same basis as the Group\u2019s consolidated \ufb01nancial statements.
\nCPL (100% of the \ufb01nancial assets of the entity)
\nFinancial assets
\nFinancial assets that pass the
\nSPPI test
*
\nAll other \ufb01nancial assets
\nFair value at 31 Dec
Fair value at 31 Dec
Movement in the fair value during
\n2022
$m
2021
$m
2022
$m
2021
$m
2022
$m
2021
$m
\nAccrued investment income
176
170
\u2013
\u2013
\u2013
\u2013
\nOther debtors
667
620
\u2013
\u2013
\u2013
\u2013
\nLoans
674
656
\u2013
\u2013
\u2013
\u2013
\nEquity securities and holdings in collective investment
\nschemes
\u2013
\u2013
15,698
12,882
(1,314)
254
\nDebt securities
\u2013
\u2013
11,478
11,976
37
184
\nDeposits
1,174
1,210
\u2013
\u2013
\u2013
\u2013
\nCash and cash equivalents
561
422
\u2013
\u2013
\u2013
\u2013
\nTotal \ufb01nancial assets
3,252
3,078
27,176
24,858
(1,277)
438
\n*
The carrying value approximates fair value for the \ufb01nancial assets in this category with no movement in the fair value during the year.
\n294
Prudential plc
Annual Report 2022
prudentialplc.com
Fair value information for the Group\u2019s share of \ufb01nancial assets of other joint ventures and associates in aggregate is set out in the table below:
\nOther JVs and associates (Prudential\u2019s share)
\nFinancial assets
\nFinancial assets that pass the
\nSPPI test
*
\nAll other \ufb01nancial assets
\nFair value at 31 Dec
Fair value at 31 Dec
Movement in the fair value during
\n2022
$m
2021
$m
2022
$m
2021
$m
2022
$m
2021
$m
\nAccrued investment income
83
85
\u2013
\u2013
\u2013
\u2013
\nOther debtors
143
187
\u2013
\u2013
\u2013
\u2013
\nLoans
\u2013
26
\u2013
\u2013
\u2013
\u2013
\nEquity securities and holdings in collective investment
\nschemes
\u2013
\u2013
3,657
3,859
133
680
\nDebt securities
\u2013
\u2013
3,476
3,674
(131)
(121)
\nDeposits
335
203
\u2013
\u2013
\u2013
\u2013
\nCash and cash equivalents
380
510
\u2013
\u2013
\u2013
\u2013
\nTotal \ufb01nancial assets
941
1,011
7,133
7,533
2
559
\n*
The carrying value approximates fair value for the \ufb01nancial assets in this category with no movement in the fair value during the year.
\nIFRS 17 \u2018Insurance Contracts\u2019
\nIFRS 17 \u2018Insurance Contracts\u2019 became e\ufb00ective on 1 January 2023 and replaces IFRS 4 \u2018Insurance Contracts\u2019. IFRS 4 permitted insurers to
\ncontinue to use the statutory basis of accounting for insurance assets and liabilities that existed in their jurisdictions prior to January 2005. IFRS 17
\nreplaced this with a new measurement model that signi\ufb01cantly changes the way insurance and reinsurance contracts are accounted for, albeit the
\nscope of IFRS 17 and IFRS 4 is very similar. Therefore, nearly all of the Group\u2019s insurance and investment contracts with discretionary participation
\nfeatures accounted under IFRS 4 will be accounted for under IFRS 17. The transition date of the Group for IFRS 17 was 1 January 2022. The Group
\nis adopting IFRS 17 on its mandatory e\ufb00ective date on 1 January 2023, alongside the adoption of IFRS 9.
\nIFRS 17 implementation programme
\nThe requirements of the new standard are complex and require a fundamental change to accounting, presentation and disclosures for insurance
\ncontracts as well as the application of signi\ufb01cant judgement and new estimation techniques. The implementation of this standard has involved
\nsigni\ufb01cant enhancements to IT, actuarial and \ufb01nance systems of the Group. The Group has been implementing IFRS 17 and IFRS 9 through a
\nGroup-wide implementation programme.
\nA Group-wide Steering Committee, chaired by the Group Chief Financial O\ufb03cer, provides oversight and strategic direction to the
\nimplementation programme. Regular updates on progress are provided to the Group Audit Committee and during 2022 members of the
\nCommittee, as well as the Board, received training on the new requirements. Since the last Annual Report, the systems implementation has been
\ncompleted and the transition impacts at 1 January 2022 have been calculated. The production of half year and full year 2022 comparatives using
\nthe IFRS 17 accounting standard is scheduled to be completed in the \ufb01rst half of 2023.
\nOverview of IFRS 17
\nIFRS 17 requires liabilities for insurance contracts to be measured as the total of:
\n>
ful\ufb01lment cash \ufb02ows, comprising the best estimate of the present value of future cash \ufb02ows within the contract boundary that are expected to
\narise and an explicit risk adjustment for non-\ufb01nancial risk; and
\n>
a contractual service margin (CSM) that is representing the deferral of any day-one gains arising on initial recognition.
\nLosses are recognised directly into the income statement. For measurement purposes, contracts are grouped together into contracts of similar
\nrisk, pro\ufb01tability pro\ufb01le and issue year, with further divisions for contracts that are managed separately.
\nThe establishment of CSM on the Group\u2019s in-force business and transition approach
\nTransition refers to the determination of the opening balance sheet for the \ufb01rst year of comparative information presented under IFRS 17 (ie at
\n1 January 2022). The future cash \ufb02ows and risk adjustment are measured on a current basis in the same manner as they would be calculated for
\nsubsequent measurement. The key component of transition is therefore the determination of the CSM.
\nThe standard requires IFRS 17 to be applied retrospectively (the \u2018fully retrospective approach\u2019) unless impracticable. If a fully retrospective
\napproach is impracticable there is an option to choose either a modi\ufb01ed retrospective approach or a fair value approach. If reasonable and
\nsupportable information necessary to apply the modi\ufb01ed retrospective approach is not available, the fair value approach must be applied. The
\nGroup applied all three approaches on transition, after taking into account the information that is available to be used for the di\ufb00erent groups of
\ncontracts of the Group. The fair value approach is applied, in particular, where suitable historical information required to apply the retrospective
\ntransition approaches is no longer practicably available.
\n295
Prudential plc
Annual Report 2022
\nGroup overview
Strategic report
Governance
Directors\u2019 remuneration report
European Embedded Value (EEV) basis results
Additional information
Financial statements
A Basis of preparation and accounting policies
/ continued
\nA3 Accounting policies
continued
\nA3.2
New accounting pronouncements not yet e\ufb00ective
continued
\nPro\ufb01t for insurance contracts under IFRS 17
\nIFRS 17 introduces a new measure of insurance revenue, based on the delivery of services to policyholders and excluding any premiums related to
\nthe investment elements of policies, which will be signi\ufb01cantly di\ufb00erent from existing premium revenue measures, currently reported in the income
\nstatement.
\nPro\ufb01t for insurance contracts under IFRS 17 is represented by the recognition of the services provided to policyholders in the period (release of
\nthe CSM), release from non-economic risk (release of risk adjustment) and the excess of the actual investment return in the period over the e\ufb00ect
\nof the unwind of the rate used to discount the General Measurement Model liabilities, together with operating variances as appropriate. CSM is
\nreleased in line with coverage units that are a measure of the quantity of bene\ufb01ts provided under a contract and the period over which coverage is
\nprovided.
\nThe CSM is released as pro\ufb01t over the coverage period of the insurance contract, re\ufb02ecting the delivery of services to the policyholder. Under
\nIFRS 17 insurance contracts are measured under either the General Measurement Model (GMM), the Variable Fee Approach (VFA) for contracts
\nwith direct participating features or the simpli\ufb01ed Premium Allocation Approach (PAA). The Group predominantly uses the VFA and GMM,
\ndepending on the speci\ufb01c characteristics of the insurance contracts. The Group makes very limited use of the PAA for some small portfolios of
\nshort duration contracts. Reinsurance contracts held are measured under the GMM.
\nWe estimate that over two-thirds of the CSM at transition is calculated using the VFA and relates to the Group\u2019s with-pro\ufb01ts products, the
\nGroup\u2019s \ufb02agship critical illness products in Hong Kong and unit-linked products with a low proportion of protection riders. The contracts calculated
\nusing the GMM, include the Group\u2019s non-pro\ufb01t protection business and unit-linked business with a high proportion of protection riders.
\nThe ful\ufb01lment cash \ufb02ows comprise the best estimate of the present value of future cash \ufb02ows within the contract boundary that are expected
\nto arise and an explicit risk adjustment for non-\ufb01nancial risk. The discount rate applied to derive the present value of future cash \ufb02ows is
\ndetermined on a bottom-up basis, starting with a liquid risk-free yield curve and adding an illiquidity premium to re\ufb02ect the characteristics of the
\ninsurance contracts. The risk adjustment re\ufb02ects the compensation the Group requires for bearing the uncertainty about the amount and timing
\nof the cash \ufb02ows from non-\ufb01nancial risk as the Group ful\ufb01ls insurance contracts, determined by the Group using a con\ufb01dence level approach.
\nThe ful\ufb01lment cash \ufb02ows are updated each reporting date to re\ufb02ect current conditions. For contracts with direct participating features which
\nare accounted for under the VFA, the CSM represents the variable fee to shareholders and it is adjusted to re\ufb02ect the e\ufb00ect of changes in
\neconomics as well as experience variances and/or assumptions changes that relate to future services. For contracts accounted for under GMM, the
\nCSM is accreted using the locked-in discount rates and only adjusted to re\ufb02ect the e\ufb00ect of non-economic experience variances and/or
\nassumptions changes that relate to future services. The adjustments to the CSM are determined using the locked-in discount rates.
\nExpected impact on transition (1 January 2022)
\nThe Group is adopting IFRS 17 retrospectively to its 2022 comparatives as required by the standard. As permitted by IFRS 9, the Group is not
\nplanning to restate the 2022 comparatives on initial application of IFRS 9 but the Group is taking advantage of the classi\ufb01cation overlay for
\nselected assets, principally to change the classi\ufb01cation of certain debt securities, so that they are valued at amortised cost rather than at fair value
\nunder IAS 39, and certain loans, so that they are valued at fair value instead of the prior amortised cost valuation. Changes from IFRS 9 have an
\nimmaterial impact on the Group\u2019s \ufb01nancial statements.
\nThe adoption of IFRS 17 and the IFRS 9 classi\ufb01cation overlay are estimated to increase the Group shareholders\u2019 equity at 1 January 2022 to
\nbetween $18.9 \u2013 $19.8 billion. This re\ufb02ects the release of prudent margins from our legacy accounting basis, particularly in Hong Kong, recognition
\nof the shareholders\u2019 share of the inherited estate within the with-pro\ufb01t funds and the net impact of timing di\ufb00erences in the pattern of pro\ufb01t
\nrecognition. The overall net impact of the IFRS 9 classi\ufb01cation overlay at 1 January 2022 is insigni\ufb01cant given the vast majority of the Group\u2019s
\n\ufb01nancial investments will continue to be carried at fair value through pro\ufb01t or loss under IFRS 9, as currently applied under IAS 39.
\nThe Group is yet to complete production of its 2022 comparatives under the IFRS 17 accounting standard. In addition we continue to review our
\nIFRS 17 accounting policies and approach to ensure they remain in line with market practice. Therefore the impacts discussed above are subject to
\nchange prior to \ufb01nalisation of the Group\u2019s \ufb01nancial statements for the year ending 31 December 2023.
\nOther new accounting pronouncements
\nIn addition to the above, the following new accounting pronouncements have also been issued and are not yet e\ufb00ective but the Group is not
\nexpecting them to have a signi\ufb01cant impact on the Group\u2019s consolidated \ufb01nancial statements:
\n>
Amendments to IAS 1 \u2018Classi\ufb01cation of liabilities as current or non-current\u2019 issued in January 2020 and e\ufb00ective from 1 January 2023. An
\nexposure draft was issued in November 2021 proposing for this e\ufb00ective date to be delayed to periods starting no earlier than 1 January 2024;
\n>
Amendments to IAS 1 and IFRS Practice Statement 2 \u2018Disclosure of accounting policies\u2019 issued in February 2021 and e\ufb00ective from 1 January
\n2023;
\n>
Amendments to IAS 8 \u2018De\ufb01nition of accounting estimates\u2019 issued in February 2021 and e\ufb00ective from 1 January 2023;
\n>
Amendments to IAS 12 \u2018Deferred tax related to assets and liabilities arising from a single transaction\u2019 issued in May 2021 and e\ufb00ective from
\n1 January 2023;
\n>
Amendments to IFRS 16 \u2018Lease liability in a sale and leaseback\u2019 issued in September 2022 and e\ufb00ective from 1 January 2024; and
\n>
Amendments to IAS 1 \u2018Non-current liabilities with covenants\u2019 issued in October 2022 and e\ufb00ective from 1 January 2024. ",
"dimensions": {
"concept": "ifrs-full:DescriptionOfExpectedImpactOfInitialApplicationOfNewStandardsOrInterpretations",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f34846": {
"value": "B1 Analysis of performance by segment
\nB1.1
Segment results
\nNote
\n2022
$m
2021
$m
2022 vs 2021
%
\nnote (i)
\nAER
\nnote (i)
\nCER
\nnote (i)
\nAER
\nnote (i)
\nCER
\nnote (i)
\nContinuing operations:
\nCPL
368
343
329
7%
12%
\nHong Kong
1,036
975
969
6%
7%
\nIndonesia
343
446
429
(23)%
(20)%
\nMalaysia
364
350
330
4%
10%
\nSingapore
678
663
646
2%
5%
\nGrowth markets and other
\nnote (ii)
\n1,057
932
880
13%
20%
\nEastspring
260
314
299
(17)%
(13)%
\nTotal segment pro\ufb01t
4,106
4,023
3,882
2%
6%
\nOther income and expenditure unallocated to a segment:
\nNet investment return and other items
39
21
21
86%
86%
\nInterest payable on core structural borrowings
(200)
(328)
(328)
39%
39%
\nCorporate expenditure
\nnote (iii)
\n(276)
(298)
(280)
7%
1%
\nTotal other income (expenditure)
B1.4
(437)
(605)
(587)
28%
26%
\nRestructuring and IFRS 17 implementation costs
\nnote (iv)
\nB1.4
(294)
(185)
(178)
(59)%
(65)%
\nAdjusted operating pro\ufb01t
B1.2
3,375
3,233
3,117
4%
8%
\nShort-term \ufb02uctuations in investment returns on shareholder-
\nbacked business
\nnote (v)
\n(1,915)
(458)
(435)
(318)%
(340)%
\nAmortisation of acquisition accounting adjustments
(10)
(5)
(5)
(100)%
(100)%
\nGain (loss) attaching to corporate transactions
D1.1
11
(94)
(91)
n/a
n/a
\nPro\ufb01t before tax attributable to shareholders
1,461
2,676
2,586
(45)%
(44)%
\nTax charge attributable to shareholders\u2019 returns
B3
(454)
(462)
(443)
2%
(2)%
\nPro\ufb01t from continuing operations
1,007
2,214
2,143
(55)%
(53)%
\nLoss from discontinued US operations
D1.2
\u2013
(5,027)
(5,027)
n/a
n/a
\nPro\ufb01t (loss) for the year
1,007
(2,813)
(2,884)
\u2013
\u2013
\nAttributable to:
\nEquity holders of the Company
\nFrom continuing operations
998
2,192
2,121
(54)%
(53)%
\nFrom discontinued US operations
\u2013
(4,234)
(4,234)
n/a
n/a
\n998
(2,042)
(2,113)
n/a
n/a
\nNon-controlling interests
\nFrom continuing operations
9
22
22
n/a
n/a
\nFrom discontinued US operations
\u2013
(793)
(793)
n/a
n/a
\n9
(771)
(771)
n/a
n/a
\nPro\ufb01t (loss) for the year
1,007
(2,813)
(2,884)
n/a
n/a
Basic earnings per share (in cents)
Note
\n2022
2021
2022 vs 2021
%
\nnote (i)
\nAER
\nnote (i)
\nCER
\nnote (i)
\nAER
\nnote (i)
\nCER
\nnote (i)
\nBased on adjusted operating pro\ufb01t, net of tax and
\nnon-controlling interest, from continuing operations
B4
100.5\u00a2
101.5\u00a2
97.7\u00a2
(1)%
3%
\nBased on pro\ufb01t from continuing operations, net of
\nnon-controlling interest
B4
36.5\u00a2
83.4\u00a2
80.6\u00a2
(56)%
(55)%
\nBased on loss from discontinued US operations, net of
\nnon-controlling interest
B4
\u2013\u00a2
(161.1)\u00a2
(161.2)\u00a2
n/a
n/a
\nNotes
\n(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
\nthe document. For de\ufb01nitions of AER and CER refer to note A1.
\n(ii)
Adjusted operating pro\ufb01t for growth markets and other includes other items of $211 million (2021: $217 million on an AER basis; $208 million on a CER basis) which in 2022 primarily included
\nthe impact of the adoption of the Risk-Based Capital regime in Hong Kong (as discussed further in note C3.2) partially o\ufb00set by corporate taxes for life joint ventures and associates.
\n(iii)
Corporate expenditure as shown above is for head o\ufb03ce functions.
\n(iv)
Restructuring and IFRS 17 implementation costs include those incurred in insurance and asset management operations of $(137) million (2021: $(101) million on an AER basis), largely
\ncomprising the costs of Group-wide projects including the implementation of IFRS 17, reorganisation programmes and initial costs of establishing new business initiatives and operations.
\n(v)
In general, the short-term \ufb02uctuations re\ufb02ect the value movements on shareholders\u2019 assets and policyholder liabilities (net of reinsurance) arising from market movements in the year. In 2022,
\nrising interest rates and widening credit spreads across a number of the Group\u2019s life insurance markets led to unrealised bond losses which more than o\ufb00set the impact of higher discount rates on
\npolicyholder liabilities. The interest rates rises in 2022 were more substantial than that seen in 2021. Short-term \ufb02uctuations also re\ufb02ect losses on equities backing shareholder-backed business
\nfollowing market movements in 2022 (2021: equity gains) and the impact of re\ufb01nements to the reserving basis in Hong Kong following the adoption of the Risk-Based Capital regime (as
\ndiscussed further in note C3.2).
\nB1.2
Determining operating segments and performance measure of operating segments
\nOperating segments
\nThe Group\u2019s operating and reported segments for \ufb01nancial reporting purposes are de\ufb01ned and presented in accordance with IFRS 8 \u2018Operating
\nSegments\u2019 on the basis of the management reporting structure and its \ufb01nancial management information. Under the Group\u2019s management and
\nreporting structure, its chief operating decision maker is the Group Executive Committee (GEC), chaired by the Chief Executive O\ufb03cer.
\nPerformance measures for insurance operations are analysed by geographical areas for the larger business units of CPL, Hong Kong, Indonesia,
\nMalaysia and Singapore, with Eastspring, the asset management business, also analysed separately. CPL is managed jointly with CITIC, a Chinese
\nstate-owned conglomerate. All other Asia and Africa insurance operations are included in the \u2018Growth markets and other\u2019 segment alongside
\nother amounts that are not included in the segment pro\ufb01t of an individual business unit, including tax on life joint ventures and associates and
\nother items that are not representative of the underlying segment trading for the period.
\nOperations and transactions which do not form part of any business unit are reported as \u2018Unallocated to a segment\u2019 and generally comprise
\nhead o\ufb03ce functions, as presented in the additional segmental analysis in note B1.4.
\nPerformance measure
\nThe performance measure of operating segments utilised by the Group is IFRS operating pro\ufb01t based on longer-term investment returns
\n(adjusted operating pro\ufb01t) as described below. This measurement basis distinguishes adjusted operating pro\ufb01t from other constituents of total
\npro\ufb01t or loss for the year as follows:
\n>
Short-term \ufb02uctuations in investment returns on shareholder-backed business;
\n>
Amortisation of acquisition accounting adjustments arising on the purchase of business; and
\n>
Gain or loss on corporate transactions.
\nDetermination of adjusted operating pro\ufb01t for investment and liability movements
\nWith-pro\ufb01ts business
\nFor with-pro\ufb01ts business in Hong Kong, Singapore and Malaysia, the adjusted operating pro\ufb01t re\ufb02ects the shareholders\u2019 share in the bonuses
\ndeclared to policyholders. Value movements in the underlying assets of the with-pro\ufb01ts funds only a\ufb00ect the shareholder results through indirect
\ne\ufb00ects of investment performance on declared policyholder bonuses and therefore, do not a\ufb00ect directly the determination of adjusted
\noperating pro\ufb01t.
\nAssets and liabilities held within unit-linked funds
\nThe policyholder unit liabilities are directly re\ufb02ective of the underlying asset value movements. Accordingly, the adjusted operating pro\ufb01t re\ufb02ects
\nthe current year value movements in both the unit liabilities and the backing assets, which o\ufb00set one another.
\nOther shareholder-backed long-term insurance business
\nIn the case of other shareholder-\ufb01nanced business, the measurement of adjusted operating pro\ufb01t re\ufb02ects that, for the long-term insurance
\nbusiness, assets and liabilities are held for the longer term. For this business the Group believes trends in underlying performance are better
\nunderstood if the e\ufb00ects of short-term \ufb02uctuations in market conditions, such as changes in interest rates or equity markets, are excluded. In
\ndetermining the pro\ufb01t on this basis, the following key elements are applied to the results of the Group\u2019s shareholder-\ufb01nanced businesses.
(a) Policyholder liabilities that are sensitive to market conditions
\nUnder IFRS, the degree to which the carrying values of liabilities to policyholders are sensitive to current market conditions varies between
\nbusiness units depending upon the nature of the \u2018grandfathered\u2019 measurement basis. Taiwan and India apply US GAAP, whose policyholder
\nliabilities are not sensitive to market movements as they are locked in at policy inception.
\nMovements in liabilities for some types of business do require bifurcation between the elements that relate to longer-term market condition
\nand short-term e\ufb00ects to ensure that at the net level (ie after allocated investment return and charge for policyholder bene\ufb01ts) the adjusted
\noperating pro\ufb01t re\ufb02ects longer-term market returns.
\nFor certain non-participating business, for example in Hong Kong, the economic features are more akin to asset management products with
\npolicyholder liabilities re\ufb02ecting asset shares over the contract term. Consequently, for these products, the charge for policyholder bene\ufb01ts in the
\nadjusted operating pro\ufb01t re\ufb02ects the asset share feature that is calculated assuming a longer-term return assumption rather than volatile
\nmovements that would otherwise be re\ufb02ected if the IFRS balance sheet reserving basis was applied.
\nFor other types of non-participating business, expected longer-term investment returns and interest rates are used to determine the movement
\nin policyholder liabilities for determining adjusted operating pro\ufb01t. This ensures assets and liabilities are re\ufb02ected on a consistent basis.
\n(b) Assets backing other shareholder-backed long-term insurance business
\nExcept in the case of assets backing liabilities which are directly matched (such as unit-linked business) adjusted operating pro\ufb01t for assets backing
\nshareholder-\ufb01nanced business is determined on the basis of expected longer-term investment returns. Longer-term investment returns comprise
\nactual income receivable for the year (interest/dividend income) and longer-term capital returns, determined for debt and equity-type securities
\non the basis described below. The di\ufb00erence between the actual investment returns in the reporting period and the longer-term investment
\nreturns is recognised within short-term \ufb02uctuations in investment returns.
\nDebt securities and loans
\nAs a general principle, for debt securities and loans, the longer-term investment returns comprise the interest receivable for the year and the
\namortisation of interest-related realised gains and losses to the date when sold securities would have otherwise matured (or a suitable proxy for
\nthis period). All unrealised gains and losses are treated as a component of short-term investment \ufb02uctuations. Consideration is given to the need
\nto recognise an expected longer-term level of defaults for the securities within the longer-term investment returns, based on past performance
\nand having regard to the credit quality of the portfolio, with any di\ufb00erence with actual credit-related realised losses arising in the year being
\nincluded in short-term \ufb02uctuations. If, under this analysis, realised gains and losses are principally considered to be interest related with no
\nsigni\ufb01cant credit-related losses based on past performance, then all realised gains and losses to date for these operations are treated as interest
\nrelated and amortised to adjusted operating pro\ufb01t over the period to the date those securities would otherwise have matured and no separate
\ncharge to longer-term investment returns for credit defaults is made.
\nFor Group debt securities at 31 December 2022, the level of interest-related realised gains and losses on previously sold bonds that had yet to be
\namortised to adjusted operating pro\ufb01t from short-term investment \ufb02uctuations was a net loss of $(98) million (2021: net gain of $515 million).
\nEquity-type securities
\nFor equity-type securities that comprise both the Group\u2019s investments in direct equities and all of its collective investment scheme holdings, the
\nlonger-term rates of return are estimates of the long-term trend investment returns for income and capital having regard to past performance,
\ncurrent trends and future expectations. Di\ufb00erent rates apply to di\ufb00erent categories of the securities within this category.
\nFor insurance operations, investments in equity-type securities held for non-linked shareholder-backed business amounted to $7,089 million as
\nat 31 December 2022 (31 December 2021: $6,073 million). For Group\u2019s investments in direct equities, the longer-term rates of return applied in
\n2022 ranged from 8.7per cent to 16.9 per cent (2021: 7.3 per cent to 16.9 per cent). For Group\u2019s collective investment scheme holdings, the
\nlonger-term rates of return applied ranged from 3.5 per cent to 10.7 per cent (2021: 3.6 per cent to 11.0 per cent) representing the range across
\nbusiness units of the weighted average expected longer-term return rates determined by reference to the underlying asset mix of the funds for
\neach
business unit. These rates are broadly stable from year to year but may be di\ufb00erent between regions, re\ufb02ecting, for example, di\ufb00ering
\nexpectations of in\ufb02ation in each business unit.
\nThe assumptions are for the returns expected to apply in equilibrium conditions. The assumed rates of return do not re\ufb02ect any cyclical
\nvariability in economic performance and are not set by reference to prevailing asset valuations. The longer-term investment returns for the
\ninsurance joint ventures and associates accounted for using the equity method are determined on a similar basis as the other insurance
\noperations described above.
\nDerivative value movements
\nGenerally, derivative value movements are excluded from adjusted operating pro\ufb01t. The exception is where the derivative value movements
\nbroadly o\ufb00set changes in the accounting value of other assets and liabilities included in adjusted operating pro\ufb01t.
\nOther non-insurance businesses
\nFor these businesses, the determination of adjusted operating pro\ufb01t re\ufb02ects the underlying economic substance of the arrangements. Generally,
\nrealised gains and losses are included in adjusted operating pro\ufb01t with temporary unrealised gains and losses being included in short-term
\n\ufb02uctuations. In some instances, realised gains and losses on derivatives and other \ufb01nancial instruments are amortised to adjusted operating pro\ufb01t
over a time period that re\ufb02ects the underlying economic substance of the arrangements. B1.3 RevenuePremiums and annuity considerations for conventional and other protection type insurance policies are recognised as revenue when due.Premiums and annuity considerations for linked policies and other investment type policies are recognised as revenue when received or, in the case
\nof unitised or unit-linked policies, when units are issued. These amounts exclude premium taxes and similar duties where Prudential collects and
\nsettles taxes borne by the policyholder.
\nPolicy fees charged on linked policies for mortality, morbidity, asset management and policy administration are recognised when related
\nservices are provided.
\n(a) Analysis of total revenue by segment
\n2022
$m
\nInsurance operations
\nnote (i)
\nEastspring
\nInter-
\nsegment
\nelimination
\nTotal
\nsegment
\nUnallocated
\nto a
\nsegment
Total
Hong Kong
Indonesia
Malaysia
Singapore
\nGrowth
\nmarkets
\nand other
\nGross premiums earned
8,792
1,590
1,843
6,540
4,579
\u2013
\u2013
23,344
\u2013
23,344
\nOutward reinsurance premiums
(1,494)
(34)
(58)
(299)
(58)
\u2013
\u2013
(1,943)
\u2013
(1,943)
\nEarned premiums, net of
\nreinsurance
7,298
1,556
1,785
6,241
4,521
\u2013
\u2013
21,401
\u2013
21,401
\nOther income
\nnote (ii)
\n65
12
\u2013
15
116
330
\u2013
538
1
539
\nTotal external revenue
\nnote (iii)
\n7,363
1,568
1,785
6,256
4,637
330
\u2013
21,939
1
21,940
\nIntra-group revenue
\u2013
\u2013
\u2013
\u2013
1
199
(200)
\u2013
\u2013
\u2013
\nInterest income
\nnote B1.3(b)
\n996
83
217
744
628
4
\u2013
2,672
50
2,722
\nDividend and other investment
\nincome
689
77
183
576
107
1
\u2013
1,633
25
1,658
\nInvestment appreciation
\n(depreciation)
(23,704)
(70)
(365)
(7,498)
(2,876)
(21)
\u2013
(34,534)
(5)
(34,539)
\nTotal revenue, net of reinsurance
(14,656)
1,658
1,820
78
2,497
513
(200)
(8,290)
71
(8,219)
\n2021
$m
\nInsurance operations
\nnote (i)
\nEastspring
\nInter-
\nsegment
\nelimination
\nTotal
\nsegment
\nUnallocated
\nto a
\nsegment
Total
Hong Kong
Indonesia
Malaysia
Singapore
\nGrowth
\nmarkets
\nand other
\nGross premiums earned
10,032
1,724
1,900
6,246
4,315
\u2013
\u2013
24,217
\u2013
24,217
\nOutward reinsurance premiums
(1,557)
(43)
(47)
(137)
(60)
\u2013
\u2013
(1,844)
\u2013
(1,844)
\nEarned premiums, net of
\nreinsurance
8,475
1,681
1,853
6,109
4,255
\u2013
\u2013
22,373
\u2013
22,373
\nOther income
\nnote (ii)
\n52
12
\u2013
22
117
437
\u2013
640
1
641
\nTotal external revenue
\nnote (iii)
\n8,527
1,693
1,853
6,131
4,372
437
\u2013
23,013
1
23,014
\nIntra-group revenue
\u2013
\u2013
\u2013
\u2013
1
217
(218)
\u2013
\u2013
\u2013
\nInterest income
\nnote B1.3(b)
\n934
87
220
707
618
3
\u2013
2,569
1
2,570
\nDividend and other investment
\nincome
679
74
160
506
86
\u2013
\u2013
1,505
19
1,524
\nInvestment appreciation
\n(depreciation)
57
34
(300)
(29)
(361)
8
\u2013
(591)
(17)
(608)
\nTotal revenue, net of reinsurance
10,197
1,888
1,933
7,315
4,716
665
(218)
26,496
4
26,500
\nNotes
\n(i)
CPL, Prudential\u2019s life business in the Chinese Mainland, is a joint venture with CITIC and is accounted for using the equity method under IFRS. The Group\u2019s share of its results is presented in a
\nsingle line within the Group\u2019s pro\ufb01t before tax on a net of related tax basis, and therefore not shown in the analysis of revenue line items above. Revenue from external customers of CPL
\n(Prudential\u2019s share) in 2022 is $2,948 million (2021: $3,052 million). Further \ufb01nancial information on CPL is provided in note D6.3.
\n(ii)
Other income comprises income from external customers and consists primarily of revenue from the Group\u2019s asset management business of $330 million (2021: $437 million). The remaining
\nother income consists primarily of policy fee revenue from external customers and asset management rebate revenue from external fund managers. Also included in other income is fee income
\non \ufb01nancial instruments that are not held at FVTPL of $2 million (2021: $1 million).
\n(iii)
Due to the nature of the business of the Group, there is no reliance on any major customers. Of the Group\u2019s markets, only Hong Kong and Singapore have external revenue that exceeds
10 per cent of the Group total for the years presented. Allocation of investment return between policyholders and shareholders
\nInvestment return is attributable to policyholders and shareholders. A key feature of the accounting policies under IFRS is that the investment
\nreturn included in the income statement relates to all investment assets of the Group, irrespective of whether the return is attributable to
\nshareholders, policyholders or the unallocated surplus of with-pro\ufb01ts funds, the latter two of which have no direct impact on shareholders\u2019 pro\ufb01t.
\nThe table below provides a breakdown of the investment return attributable to each type of business.
\n2022
$m
2021
$m
\nPolicyholder returns
\nAssets backing unit-linked liabilities
(2,574)
516
\nWith-pro\ufb01ts business
(21,287)
2,700
\n(23,861)
3,216
\nShareholder returns
(6,298)
270
\nTotal investment return
(30,159)
3,486
\nPolicyholder returns
\nInvestment returns allocated to policyholders are those from investments in which shareholders have no direct economic interest, namely
\nunit-linked business for which the investment returns are wholly attributable to policyholders and with-pro\ufb01ts business in which the shareholders\u2019
\neconomic interest (and the basis of recognising IFRS basis pro\ufb01ts) is restricted to a share of the actuarially determined surplus for distribution.
\nExcept for this surplus, the investment returns of the with-pro\ufb01ts funds are attributable to policyholders (through the asset-share liabilities) or the
\nunallocated surplus, which is accounted for as a liability under IFRS 4 as shown in note C3.
\nShareholder returns
\nFor shareholder-backed non-with-pro\ufb01ts business, the investment returns are generally not directly attributable to policyholders and, therefore,
impact shareholders\u2019 pro\ufb01t directly. B1.4
Additional segmental analysis of pro\ufb01t after tax
\n2022
$m
2021
$m
\nCPL
(144)
278
\nHong Kong
(211)
1,068
\nIndonesia
243
362
\nMalaysia
252
265
\nSingapore
406
394
\nGrowth markets and other
\nnote (i)
\n881
434
\nEastspring
234
284
\nTotal segment
1,661
3,085
\nUnallocated to a segment (central operations)
\nnote (ii)
\n(654)
(871)
\nTotal pro\ufb01t after tax
1,007
2,214
\nNotes
\n(i)
The Growth markets and other segment comprises all other Asia and Africa insurance businesses alongside other amounts that are not included in the segment pro\ufb01t of an individual business
\nunit, including tax on life joint ventures and associates and other items that are not representative of the underlying segment trading for the year, in line with the presentation used by
\nmanagement when assessing the performance of the underlying segments internally.
\n(ii)
Comprising other income and expenditure of $(437) million (2021: $(605) million) attributable to the head o\ufb03ce functions, $(294) million (2021: $(185) million) of restructuring and IFRS 17
\nimplementation costs, $19 million (2021: $(25) million) of short-term \ufb02uctuations on investment returns in central operations, $62 million (2021: $(35) million) of corporate transactions and
\nrelated tax of $(4) million (2021: $(21) million).
2022
$m
2021
$m
\nHong Kong
(147)
(123)
\nIndonesia
(61)
(51)
\nMalaysia
(70)
(56)
\nSingapore
(202)
(162)
\nGrowth markets and other
(461)
(390)
\nEastspring
(13)
(17)
\nTotal segment
(954)
(799)
\nUnallocated to a segment (central operations)
(26)
(31)
\nTotal depreciation and amortisation
(980)
(830)
B3.1
Total tax charge by nature
\nThe total tax charge in the income statement is as follows:
\n2022
$m
2021
$m
\nAttributable to shareholders:
\nHong Kong
(52)
(40)
\nIndonesia
(60)
(74)
\nMalaysia
(90)
(71)
\nSingapore
(78)
(67)
\nGrowth markets and other
(144)
(159)
\nEastspring
(26)
(30)
\nTotal segment
(450)
(441)
\nUnallocated to a segment (central operations)
(4)
(21)
\nTax charge attributable to shareholders
(454)
(462)
\nAttributable to policyholders:
\nHong Kong
(56)
(79)
\nIndonesia
(5)
4
\nMalaysia
\u2013
(2)
\nSingapore
44
(261)
\nGrowth markets and other
(4)
(4)
\nTax charge attributable to policyholders
(21)
(342)
\nTotal tax charge
(475)
(804)
(ix)
The actual tax rates of the relevant business operations are shown below:
\n2022
%
\nHong
\nKong
Indonesia
Malaysia
Singapore
\nGrowth
\nmarkets
\nand other
Eastspring
\nOther
\noperations
\nTotal
\nattributable
\nto
\nshareholders
\nTax rate on adjusted operating pro\ufb01t
6%
20%
26%
16%
24%
10%
(1)%
18%
\nTax rate on pro\ufb01t before tax
(33)%
20%
26%
16%
14%
10%
(1)%
31%
\n2021
%
\nHong
\nKong
Indonesia
Malaysia
Singapore
\nGrowth
\nmarkets
\nand other
Eastspring
\nOther
\noperations
\nTotal
\nattributable
\nto
\nshareholders
\nTax rate on adjusted operating pro\ufb01t
5%
17%
21%
15%
22%
10%
(3)%
17%
\nTax rate on pro\ufb01t before tax
4%
17%
21%
15%
27%
10%
(2)%
17%
(c) Policyholder liabilities and unallocated surplus by operating segment
\nThe table below shows the policyholder liabilities and unallocated surplus, excluding joint ventures and associates and net of external reinsurance,
\nby segment:
\n31 Dec 2022
\n$m
\n31 Dec 2021
\n$m
\nHong Kong
60,880
79,363
\nIndonesia
3,648
4,257
\nMalaysia
8,231
8,660
\nSingapore
31,197
34,361
\nGrowth markets and other
18,995
20,905
\nTotal segment
122,951
147,546
2022
$m
\nHong
\nKong
Indonesia
Malaysia
Singapore
\nGrowth markets
\nand other
\nTotal
\nsegment
\nClaims incurred, net of reinsurance
(2,033)
(1,228)
(1,070)
(2,718)
(1,768)
(8,817)
\nDecrease in policyholder liabilities, net of reinsurance
15,643
270
(135)
3,189
1,679
20,646
\nMovement in unallocated surplus of with-pro\ufb01ts funds
1,815
\u2013
53
\u2013
\u2013
1,868
\nBene\ufb01ts and claims and movement in unallocated surplus,
\nnet of reinsurance
15,425
(958)
(1,152)
471
(89)
13,697
\n2021
$m
\nHong
\nKong
Indonesia
Malaysia
Singapore
\nGrowth markets
\nand other
\nTotal
\nsegment
\nClaims incurred, net of reinsurance
(1,687)
(1,184)
(1,015)
(3,037)
(1,590)
(8,513)
\n(Increase)/decrease in policyholder liabilities, net of
\nreinsurance
(6,088)
167
(260)
(2,856)
(1,159)
(10,196)
\nMovement in unallocated surplus of with-pro\ufb01ts funds
(250)
\u2013
48
\u2013
\u2013
(202)
\nBene\ufb01ts and claims and movement in unallocated surplus,
\nnet of reinsurance
(8,025)
(1,017)
(1,227)
(5,893)
(2,749)
(18,911)
Capital expenditure: property, plant and equipment by segment
\nThe capital expenditure on property, plant and equipment in 2022 of $34 million (2021: $36 million) arose as follows:
\n2022
$m
2021
$m
\nHong Kong
11
9
\nIndonesia
1
1
\nMalaysia
1
2
\nSingapore
3
1
\nGrowth markets and other
16
19
\nEastspring
2
3
\nTotal segment
34
35
\nUnallocated to a segment (central operations)
\u2013
1
\nTotal capital expenditure on property, plant and equipment
34
36
The Group\u2019s share of the pro\ufb01t for shareholder-backed business (including short-term \ufb02uctuations in investment returns), net of related tax, in joint ventures and associates equity accounted for as shown in the Consolidated income statement, is allocated across segments as follows:
\n2022
$m
2021
$m
\nCPL
(144)
278
\nHong Kong
\u2013
9
\nMalaysia
24
28
\nGrowth markets and other
\nnote
\n5
(110)
\nInsurance operations
(115)
205
\nEastspring
144
147
\nTotal segment and Group total
29
352
\nNote
\nFor growth markets and other, as well as the segment results for associates and joint ventures within the segment, the amount shown includes other items of $15 million (2021: $(38) million) which
\nprimarily comprise of taxes for all life joint ventures and associates together with other non-recurring items.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfEntitysReportableSegmentsExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f34849": {
"value": "B1.1 Segment results
\nNote
\n2022
$m
2021
$m
2022 vs 2021
%
\nnote (i)
\nAER
\nnote (i)
\nCER
\nnote (i)
\nAER
\nnote (i)
\nCER
\nnote (i)
\nContinuing operations:
\nCPL
368
343
329
7%
12%
\nHong Kong
1,036
975
969
6%
7%
\nIndonesia
343
446
429
(23)%
(20)%
\nMalaysia
364
350
330
4%
10%
\nSingapore
678
663
646
2%
5%
\nGrowth markets and other
\nnote (ii)
\n1,057
932
880
13%
20%
\nEastspring
260
314
299
(17)%
(13)%
\nTotal segment pro\ufb01t
4,106
4,023
3,882
2%
6%
\nOther income and expenditure unallocated to a segment:
\nNet investment return and other items
39
21
21
86%
86%
\nInterest payable on core structural borrowings
(200)
(328)
(328)
39%
39%
\nCorporate expenditure
\nnote (iii)
\n(276)
(298)
(280)
7%
1%
\nTotal other income (expenditure)
B1.4
(437)
(605)
(587)
28%
26%
\nRestructuring and IFRS 17 implementation costs
\nnote (iv)
\nB1.4
(294)
(185)
(178)
(59)%
(65)%
\nAdjusted operating pro\ufb01t
B1.2
3,375
3,233
3,117
4%
8%
\nShort-term \ufb02uctuations in investment returns on shareholder-
\nbacked business
\nnote (v)
\n(1,915)
(458)
(435)
(318)%
(340)%
\nAmortisation of acquisition accounting adjustments
(10)
(5)
(5)
(100)%
(100)%
\nGain (loss) attaching to corporate transactions
D1.1
11
(94)
(91)
n/a
n/a
\nPro\ufb01t before tax attributable to shareholders
1,461
2,676
2,586
(45)%
(44)%
\nTax charge attributable to shareholders\u2019 returns
B3
(454)
(462)
(443)
2%
(2)%
\nPro\ufb01t from continuing operations
1,007
2,214
2,143
(55)%
(53)%
\nLoss from discontinued US operations
D1.2
\u2013
(5,027)
(5,027)
n/a
n/a
\nPro\ufb01t (loss) for the year
1,007
(2,813)
(2,884)
\u2013
\u2013
\nAttributable to:
\nEquity holders of the Company
\nFrom continuing operations
998
2,192
2,121
(54)%
(53)%
\nFrom discontinued US operations
\u2013
(4,234)
(4,234)
n/a
n/a
\n998
(2,042)
(2,113)
n/a
n/a
\nNon-controlling interests
\nFrom continuing operations
9
22
22
n/a
n/a
\nFrom discontinued US operations
\u2013
(793)
(793)
n/a
n/a
\n9
(771)
(771)
n/a
n/a
\nPro\ufb01t (loss) for the year
1,007
(2,813)
(2,884)
n/a
n/a
B
Earnings performance
\n297
Prudential plc
Annual Report 2022
\nGroup overview
Strategic report
Governance
Directors\u2019 remuneration report
European Embedded Value (EEV) basis results
Additional information
Financial statements
B Earnings performance
/ continued
\nB1 Analysis of performance by segment
continued
\nB1.1
Segment results
continued
\nBasic earnings per share (in cents)
Note
\n2022
2021
2022 vs 2021
%
\nnote (i)
\nAER
\nnote (i)
\nCER
\nnote (i)
\nAER
\nnote (i)
\nCER
\nnote (i)
\nBased on adjusted operating pro\ufb01t, net of tax and
\nnon-controlling interest, from continuing operations
B4
100.5\u00a2
101.5\u00a2
97.7\u00a2
(1)%
3%
\nBased on pro\ufb01t from continuing operations, net of
\nnon-controlling interest
B4
36.5\u00a2
83.4\u00a2
80.6\u00a2
(56)%
(55)%
\nBased on loss from discontinued US operations, net of
\nnon-controlling interest
B4
\u2013\u00a2
(161.1)\u00a2
(161.2)\u00a2
n/a
n/a
\nNotes
\n(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
\nthe document. For de\ufb01nitions of AER and CER refer to note A1.
\n(ii)
Adjusted operating pro\ufb01t for growth markets and other includes other items of $211 million (2021: $217 million on an AER basis; $208 million on a CER basis) which in 2022 primarily included
\nthe impact of the adoption of the Risk-Based Capital regime in Hong Kong (as discussed further in note C3.2) partially o\ufb00set by corporate taxes for life joint ventures and associates.
\n(iii)
Corporate expenditure as shown above is for head o\ufb03ce functions.
\n(iv)
Restructuring and IFRS 17 implementation costs include those incurred in insurance and asset management operations of $(137) million (2021: $(101) million on an AER basis), largely
\ncomprising the costs of Group-wide projects including the implementation of IFRS 17, reorganisation programmes and initial costs of establishing new business initiatives and operations.
\n(v)
In general, the short-term \ufb02uctuations re\ufb02ect the value movements on shareholders\u2019 assets and policyholder liabilities (net of reinsurance) arising from market movements in the year. In 2022,
\nrising interest rates and widening credit spreads across a number of the Group\u2019s life insurance markets led to unrealised bond losses which more than o\ufb00set the impact of higher discount rates on
\npolicyholder liabilities. The interest rates rises in 2022 were more substantial than that seen in 2021. Short-term \ufb02uctuations also re\ufb02ect losses on equities backing shareholder-backed business
\nfollowing market movements in 2022 (2021: equity gains) and the impact of re\ufb01nements to the reserving basis in Hong Kong following the adoption of the Risk-Based Capital regime (as
\ndiscussed further in note C3.2).
\nB1.2
Determining operating segments and performance measure of operating segments
\nOperating segments
\nThe Group\u2019s operating and reported segments for \ufb01nancial reporting purposes are de\ufb01ned and presented in accordance with IFRS 8 \u2018Operating
\nSegments\u2019 on the basis of the management reporting structure and its \ufb01nancial management information. Under the Group\u2019s management and
\nreporting structure, its chief operating decision maker is the Group Executive Committee (GEC), chaired by the Chief Executive O\ufb03cer.
\nPerformance measures for insurance operations are analysed by geographical areas for the larger business units of CPL, Hong Kong, Indonesia,
\nMalaysia and Singapore, with Eastspring, the asset management business, also analysed separately. CPL is managed jointly with CITIC, a Chinese
\nstate-owned conglomerate. All other Asia and Africa insurance operations are included in the \u2018Growth markets and other\u2019 segment alongside
\nother amounts that are not included in the segment pro\ufb01t of an individual business unit, including tax on life joint ventures and associates and
\nother items that are not representative of the underlying segment trading for the period.
\nOperations and transactions which do not form part of any business unit are reported as \u2018Unallocated to a segment\u2019 and generally comprise
\nhead o\ufb03ce functions, as presented in the additional segmental analysis in note B1.4.
\nPerformance measure
\nThe performance measure of operating segments utilised by the Group is IFRS operating pro\ufb01t based on longer-term investment returns
\n(adjusted operating pro\ufb01t) as described below. This measurement basis distinguishes adjusted operating pro\ufb01t from other constituents of total
\npro\ufb01t or loss for the year as follows:
\n>
Short-term \ufb02uctuations in investment returns on shareholder-backed business;
\n>
Amortisation of acquisition accounting adjustments arising on the purchase of business; and
\n>
Gain or loss on corporate transactions.
\nDetermination of adjusted operating pro\ufb01t for investment and liability movements
\nWith-pro\ufb01ts business
\nFor with-pro\ufb01ts business in Hong Kong, Singapore and Malaysia, the adjusted operating pro\ufb01t re\ufb02ects the shareholders\u2019 share in the bonuses
\ndeclared to policyholders. Value movements in the underlying assets of the with-pro\ufb01ts funds only a\ufb00ect the shareholder results through indirect
\ne\ufb00ects of investment performance on declared policyholder bonuses and therefore, do not a\ufb00ect directly the determination of adjusted
\noperating pro\ufb01t.
\nAssets and liabilities held within unit-linked funds
\nThe policyholder unit liabilities are directly re\ufb02ective of the underlying asset value movements. Accordingly, the adjusted operating pro\ufb01t re\ufb02ects
\nthe current year value movements in both the unit liabilities and the backing assets, which o\ufb00set one another.
\nOther shareholder-backed long-term insurance business
\nIn the case of other shareholder-\ufb01nanced business, the measurement of adjusted operating pro\ufb01t re\ufb02ects that, for the long-term insurance
\nbusiness, assets and liabilities are held for the longer term. For this business the Group believes trends in underlying performance are better
\nunderstood if the e\ufb00ects of short-term \ufb02uctuations in market conditions, such as changes in interest rates or equity markets, are excluded. In
\ndetermining the pro\ufb01t on this basis, the following key elements are applied to the results of the Group\u2019s shareholder-\ufb01nanced businesses.
\n298
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Annual Report 2022
prudentialplc.com
(a) Policyholder liabilities that are sensitive to market conditions
\nUnder IFRS, the degree to which the carrying values of liabilities to policyholders are sensitive to current market conditions varies between
\nbusiness units depending upon the nature of the \u2018grandfathered\u2019 measurement basis. Taiwan and India apply US GAAP, whose policyholder
\nliabilities are not sensitive to market movements as they are locked in at policy inception.
\nMovements in liabilities for some types of business do require bifurcation between the elements that relate to longer-term market condition
\nand short-term e\ufb00ects to ensure that at the net level (ie after allocated investment return and charge for policyholder bene\ufb01ts) the adjusted
\noperating pro\ufb01t re\ufb02ects longer-term market returns.
\nFor certain non-participating business, for example in Hong Kong, the economic features are more akin to asset management products with
\npolicyholder liabilities re\ufb02ecting asset shares over the contract term. Consequently, for these products, the charge for policyholder bene\ufb01ts in the
\nadjusted operating pro\ufb01t re\ufb02ects the asset share feature that is calculated assuming a longer-term return assumption rather than volatile
\nmovements that would otherwise be re\ufb02ected if the IFRS balance sheet reserving basis was applied.
\nFor other types of non-participating business, expected longer-term investment returns and interest rates are used to determine the movement
\nin policyholder liabilities for determining adjusted operating pro\ufb01t. This ensures assets and liabilities are re\ufb02ected on a consistent basis.
\n(b) Assets backing other shareholder-backed long-term insurance business
\nExcept in the case of assets backing liabilities which are directly matched (such as unit-linked business) adjusted operating pro\ufb01t for assets backing
\nshareholder-\ufb01nanced business is determined on the basis of expected longer-term investment returns. Longer-term investment returns comprise
\nactual income receivable for the year (interest/dividend income) and longer-term capital returns, determined for debt and equity-type securities
\non the basis described below. The di\ufb00erence between the actual investment returns in the reporting period and the longer-term investment
\nreturns is recognised within short-term \ufb02uctuations in investment returns.
\nDebt securities and loans
\nAs a general principle, for debt securities and loans, the longer-term investment returns comprise the interest receivable for the year and the
\namortisation of interest-related realised gains and losses to the date when sold securities would have otherwise matured (or a suitable proxy for
\nthis period). All unrealised gains and losses are treated as a component of short-term investment \ufb02uctuations. Consideration is given to the need
\nto recognise an expected longer-term level of defaults for the securities within the longer-term investment returns, based on past performance
\nand having regard to the credit quality of the portfolio, with any di\ufb00erence with actual credit-related realised losses arising in the year being
\nincluded in short-term \ufb02uctuations. If, under this analysis, realised gains and losses are principally considered to be interest related with no
\nsigni\ufb01cant credit-related losses based on past performance, then all realised gains and losses to date for these operations are treated as interest
\nrelated and amortised to adjusted operating pro\ufb01t over the period to the date those securities would otherwise have matured and no separate
\ncharge to longer-term investment returns for credit defaults is made.
\nFor Group debt securities at 31 December 2022, the level of interest-related realised gains and losses on previously sold bonds that had yet to be
\namortised to adjusted operating pro\ufb01t from short-term investment \ufb02uctuations was a net loss of $(98) million (2021: net gain of $515 million).
\nEquity-type securities
\nFor equity-type securities that comprise both the Group\u2019s investments in direct equities and all of its collective investment scheme holdings, the
\nlonger-term rates of return are estimates of the long-term trend investment returns for income and capital having regard to past performance,
\ncurrent trends and future expectations. Di\ufb00erent rates apply to di\ufb00erent categories of the securities within this category.
\nFor insurance operations, investments in equity-type securities held for non-linked shareholder-backed business amounted to $7,089 million as
\nat 31 December 2022 (31 December 2021: $6,073 million). For Group\u2019s investments in direct equities, the longer-term rates of return applied in
\n2022 ranged from 8.7per cent to 16.9 per cent (2021: 7.3 per cent to 16.9 per cent). For Group\u2019s collective investment scheme holdings, the
\nlonger-term rates of return applied ranged from 3.5 per cent to 10.7 per cent (2021: 3.6 per cent to 11.0 per cent) representing the range across
\nbusiness units of the weighted average expected longer-term return rates determined by reference to the underlying asset mix of the funds for
\neach
business unit. These rates are broadly stable from year to year but may be di\ufb00erent between regions, re\ufb02ecting, for example, di\ufb00ering
\nexpectations of in\ufb02ation in each business unit.
\nThe assumptions are for the returns expected to apply in equilibrium conditions. The assumed rates of return do not re\ufb02ect any cyclical
\nvariability in economic performance and are not set by reference to prevailing asset valuations. The longer-term investment returns for the
\ninsurance joint ventures and associates accounted for using the equity method are determined on a similar basis as the other insurance
\noperations described above.
\nDerivative value movements
\nGenerally, derivative value movements are excluded from adjusted operating pro\ufb01t. The exception is where the derivative value movements
\nbroadly o\ufb00set changes in the accounting value of other assets and liabilities included in adjusted operating pro\ufb01t.
\nOther non-insurance businesses
\nFor these businesses, the determination of adjusted operating pro\ufb01t re\ufb02ects the underlying economic substance of the arrangements. Generally,
\nrealised gains and losses are included in adjusted operating pro\ufb01t with temporary unrealised gains and losses being included in short-term
\n\ufb02uctuations. In some instances, realised gains and losses on derivatives and other \ufb01nancial instruments are amortised to adjusted operating pro\ufb01t
\nover a time period that re\ufb02ects the underlying economic substance of the arrangements.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfProfitLossFromOperatingActivitiesExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f35149": {
"value": "The Group\u2019s operating and reported segments for \ufb01nancial reporting purposes are de\ufb01ned and presented in accordance with IFRS 8 \u2018Operating Segments\u2019 on the basis of the management reporting structure and its \ufb01nancial management information. Under the Group\u2019s management and
\nreporting structure, its chief operating decision maker is the Group Executive Committee (GEC), chaired by the Chief Executive O\ufb03cer.
\nPerformance measures for insurance operations are analysed by geographical areas for the larger business units of CPL, Hong Kong, Indonesia,
\nMalaysia and Singapore, with Eastspring, the asset management business, also analysed separately. CPL is managed jointly with CITIC, a Chinese
\nstate-owned conglomerate. All other Asia and Africa insurance operations are included in the \u2018Growth markets and other\u2019 segment alongside
\nother amounts that are not included in the segment pro\ufb01t of an individual business unit, including tax on life joint ventures and associates and
\nother items that are not representative of the underlying segment trading for the period.
\nOperations and transactions which do not form part of any business unit are reported as \u2018Unallocated to a segment\u2019 and generally comprise
\nhead o\ufb03ce functions, as presented in the additional segmental analysis in note B1.4.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForSegmentReportingExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f35220": {
"value": "Debt securities and loans
\nAs a general principle, for debt securities and loans, the longer-term investment returns comprise the interest receivable for the year and the
\namortisation of interest-related realised gains and losses to the date when sold securities would have otherwise matured (or a suitable proxy for
\nthis period). All unrealised gains and losses are treated as a component of short-term investment \ufb02uctuations. Consideration is given to the need
\nto recognise an expected longer-term level of defaults for the securities within the longer-term investment returns, based on past performance
\nand having regard to the credit quality of the portfolio, with any di\ufb00erence with actual credit-related realised losses arising in the year being
\nincluded in short-term \ufb02uctuations. If, under this analysis, realised gains and losses are principally considered to be interest related with no
\nsigni\ufb01cant credit-related losses based on past performance, then all realised gains and losses to date for these operations are treated as interest
\nrelated and amortised to adjusted operating pro\ufb01t over the period to the date those securities would otherwise have matured and no separate
\ncharge to longer-term investment returns for credit defaults is made.
\nFor Group debt securities at 31 December 2022, the level of interest-related realised gains and losses on previously sold bonds that had yet to be
\namortised to adjusted operating pro\ufb01t from short-term investment \ufb02uctuations was a net loss of $(98) million (2021: net gain of $515 million).
Debt securities are analysed below according to the issuing government for sovereign debt and to credit ratings for the rest of the securities. The
\nGroup uses the middle of the Standard & Poor\u2019s, Moody\u2019s and Fitch ratings, where available. Where ratings are not available from these rating
\nagencies, local external rating agencies\u2019 ratings and lastly internal ratings have been used. Securities with none of the ratings listed above are
\nclassi\ufb01ed as unrated and included under the \u2018below BBB- and unrated\u2019 category. The total securities (excluding sovereign debt) that were unrated
\nat 31 December 2022 were $1,152 million (31 December 2021: $1,130 million). Additionally, government debt is shown separately from the rating
\nbreakdowns in order to provide a more focused view of the credit portfolio.
\nIn the table below, AAA is the highest possible rating. Investment grade \ufb01nancial assets are classi\ufb01ed within the range of AAA to BBB- ratings.
\nFinancial assets which fall outside this range are classi\ufb01ed as below BBB-.
31 Dec 2022
$m
\nAsia and Africa
\nUnallocated
\nto a
\nsegment
\nElimination
\nof
\nintra-group
\ndebtors and
\ncreditors
\nGroup
\ntotal
\nInsurance
\nElimina-
\ntions
Total
\nWith-
\npro\ufb01ts
\nnote (i)
\nUnit-
\nlinked
\nnote (i)
\nOther
\nnote (i)
\nEastspring
\nDebt securities
\nnotes (ii)(iv)
\nSovereign debt
\nIndonesia
482
589
483
3
\u2013
1,557
\u2013
\u2013
1,557
\nSingapore
3,240
507
917
67
\u2013
4,731
\u2013
\u2013
4,731
\nThailand
\u2013
\u2013
1,456
\u2013
\u2013
1,456
\u2013
\u2013
1,456
\nUnited Kingdom
\u2013
4
\u2013
\u2013
\u2013
4
\u2013
\u2013
4
\nUnited States
19,983
54
1,854
\u2013
\u2013
21,891
\u2013
\u2013
21,891
\nVietnam
1
12
2,397
\u2013
\u2013
2,410
\u2013
\u2013
2,410
\nOther (predominantly Asia)
2,041
646
3,288
27
\u2013
6,002
\u2013
\u2013
6,002
\nSubtotal
25,747
1,812
10,395
97
\u2013
38,051
\u2013
\u2013
38,051
\nOther government bonds
\nAAA
1,480
85
108
\u2013
\u2013
1,673
\u2013
\u2013
1,673
\nAA+ to AA-
105
21
27
\u2013
\u2013
153
\u2013
\u2013
153
\nA+ to A-
746
139
248
\u2013
\u2013
1,133
\u2013
\u2013
1,133
\nBBB+ to BBB-
292
77
134
\u2013
\u2013
503
\u2013
\u2013
503
\nBelow BBB- and unrated
227
22
323
\u2013
\u2013
572
\u2013
\u2013
572
\nSubtotal
2,850
344
840
\u2013
\u2013
4,034
\u2013
\u2013
4,034
\nCorporate bonds
\nAAA
996
181
362
\u2013
\u2013
1,539
\u2013
\u2013
1,539
\nAA+ to AA-
1,951
385
1,556
\u2013
\u2013
3,892
\u2013
\u2013
3,892
\nA+ to A-
7,230
524
4,348
\u2013
\u2013
12,102
\u2013
\u2013
12,102
\nBBB+ to BBB-
7,885
1,325
3,974
1
\u2013
13,185
\u2013
\u2013
13,185
\nBelow BBB- and unrated
2,090
444
1,282
\u2013
\u2013
3,816
\u2013
\u2013
3,816
\nSubtotal
20,152
2,859
11,522
1
\u2013
34,534
\u2013
\u2013
34,534
\nAsset-backed securities
\nAAA
168
5
126
\u2013
\u2013
299
\u2013
\u2013
299
\nAA+ to AA-
6
1
3
\u2013
\u2013
10
\u2013
\u2013
10
\nA+ to A-
20
\u2013
14
\u2013
\u2013
34
\u2013
\u2013
34
\nBBB+ to BBB-
14
\u2013
9
\u2013
\u2013
23
\u2013
\u2013
23
\nBelow BBB- and unrated
2
1
1
\u2013
\u2013
4
\u2013
\u2013
4
\nSubtotal
210
7
153
\u2013
\u2013
370
\u2013
\u2013
370
\nTotal debt securities
48,959
5,022
22,910
98
\u2013
76,989
\u2013
\u2013
76,989
\nLoans
\nMortgage loans
\u2013
\u2013
140
\u2013
\u2013
140
\u2013
\u2013
140
\nPolicy loans
1,498
\u2013
422
\u2013
\u2013
1,920
\u2013
\u2013
1,920
\nOther loans
472
\u2013
4
\u2013
\u2013
476
\u2013
\u2013
476
\nTotal loans
1,970
\u2013
566
\u2013
\u2013
2,536
\u2013
\u2013
2,536
\nEquity securities and holdings in collective investment
\nschemes
\nDirect equities
13,063
11,379
2,139
61
\u2013
26,642
266
\u2013
26,908
\nCollective investment schemes
19,057
6,760
4,950
2
\u2013
30,769
2
\u2013
30,771
\nTotal equity securities and holdings in collective investment
\nschemes
32,120
18,139
7,089
63
\u2013
57,411
268
\u2013
57,679
\nOther \ufb01nancial investments
\nnote (iii)
\n1,793
379
2,816
107
\u2013
5,095
1,749
\u2013
6,844
\nTotal \ufb01nancial investments
\nnote (v)
\n84,842
23,540
33,381
268
\u2013
142,031
2,017
\u2013
144,048
\nInvestment properties
\u2013
\u2013
37
\u2013
\u2013
37
\u2013
\u2013
37
\nInvestments in joint ventures and associates accounted for
\nusing the equity method
\u2013
\u2013
1,601
314
\u2013
1,915
\u2013
\u2013
1,915
\nCash and cash equivalents
\nnote (vi)
\n1,038
749
1,791
127
\u2013
3,705
1,809
\u2013
5,514
\nReinsurers\u2019 share of insurance contract liabilities
\nnote C3.3
\n145
\u2013
2,662
\u2013
\u2013
2,807
\u2013
\u2013
2,807
\nOther assets
\nnote (vii)
\n1,156
154
9,665
713
(67)
11,621
3,409
(3,409)
11,621
\nTotal assets
87,181
24,443
49,137
1,422
(67)
162,116
7,235
(3,409)
165,942
\nShareholders\u2019 equity
\u2013
\u2013
14,407
1,058
\u2013
15,465
1,495
\u2013
16,960
\nNon-controlling interests
\u2013
\u2013
43
124
\u2013
167
\u2013
\u2013
167
\nTotal equity
\u2013
\u2013
14,450
1,182
\u2013
15,632
1,495
\u2013
17,127
\nContract liabilities and unallocated surplus of with-pro\ufb01ts
\nfunds
77,687
22,842
25,229
\u2013
\u2013
125,758
\u2013
\u2013
125,758
\nCore structural borrowings
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
4,261
\u2013
4,261
\nOperational borrowings
118
\u2013
86
15
\u2013
219
596
\u2013
815
\nOther liabilities
\nnote (viii)
\n9,376
1,601
9,372
225
(67)
20,507
883
(3,409)
17,981
\nTotal liabilities
87,181
24,443
34,687
240
(67)
146,484
5,740
(3,409)
148,815
\nTotal equity and liabilities
87,181
24,443
49,137
1,422
(67)
162,116
7,235
(3,409)
165,942
31 Dec 2021
$m
\nAsia and Africa
\nUnallocated
\nto a
\nsegment
\nElimination
\nof
\nintra-group
\ndebtors and
\ncreditors
\nGroup
\ntotal
\nInsurance
\nElimina-
\ntions
Total
\nWith-
\npro\ufb01ts
\nnote (i)
\nUnit-
\nlinked
\nnote (i)
\nOther
\nnote (i)
\nEastspring
\nDebt securities
\nnotes (ii)(iv)
\nSovereign debt
\nIndonesia
414
598
609
11
\u2013
1,632
\u2013
\u2013
1,632
\nSingapore
3,684
550
1,068
126
\u2013
5,428
\u2013
\u2013
5,428
\nThailand
\u2013
\u2013
1,577
3
\u2013
1,580
\u2013
\u2013
1,580
\nUnited Kingdom
\u2013
7
\u2013
\u2013
\u2013
7
226
\u2013
233
\nUnited States
28,552
47
3,525
\u2013
\u2013
32,124
\u2013
\u2013
32,124
\nVietnam
\u2013
20
3,022
\u2013
\u2013
3,042
\u2013
\u2013
3,042
\nOther (predominantly Asia)
2,030
720
4,001
21
\u2013
6,772
\u2013
\u2013
6,772
\nSubtotal
34,680
1,942
13,802
161
\u2013
50,585
226
\u2013
50,811
\nOther government bonds
\u2013
\nAAA
1,472
86
246
\u2013
\u2013
1,804
\u2013
\u2013
1,804
\nAA+ to AA-
45
2
12
\u2013
\u2013
59
\u2013
\u2013
59
\nA+ to A-
667
119
304
\u2013
\u2013
1,090
\u2013
\u2013
1,090
\nBBB+ to BBB-
121
16
116
\u2013
\u2013
253
\u2013
\u2013
253
\nBelow BBB- and unrated
204
15
450
\u2013
\u2013
669
\u2013
\u2013
669
\nSubtotal
2,509
238
1,128
\u2013
\u2013
3,875
\u2013
\u2013
3,875
\nCorporate bonds
\u2013
\nAAA
1,222
236
411
\u2013
\u2013
1,869
\u2013
\u2013
1,869
\nAA+ to AA-
2,203
359
1,858
\u2013
\u2013
4,420
\u2013
\u2013
4,420
\nA+ to A-
9,046
675
5,294
\u2013
\u2013
15,015
\u2013
\u2013
15,015
\nBBB+ to BBB-
9,523
1,711
5,105
\u2013
\u2013
16,339
\u2013
\u2013
16,339
\nBelow BBB- and unrated
4,009
678
1,827
\u2013
\u2013
6,514
\u2013
\u2013
6,514
\nSubtotal
26,003
3,659
14,495
\u2013
\u2013
44,157
\u2013
\u2013
44,157
\nAsset-backed securities
\u2013
\nAAA
88
6
74
\u2013
\u2013
168
\u2013
\u2013
168
\nAA+ to AA-
6
1
4
\u2013
\u2013
11
\u2013
\u2013
11
\nA+ to A-
26
\u2013
17
\u2013
\u2013
43
\u2013
\u2013
43
\nBBB+ to BBB-
15
\u2013
9
\u2013
\u2013
24
\u2013
\u2013
24
\nBelow BBB- and unrated
2
2
1
\u2013
\u2013
5
\u2013
\u2013
5
\nSubtotal
137
9
105
\u2013
\u2013
251
\u2013
\u2013
251
\nTotal debt securities
63,329
5,848
29,530
161
\u2013
98,868
226
\u2013
99,094
\nLoans
\u2013
\nMortgage loans
\u2013
\u2013
150
\u2013
\u2013
150
\u2013
\u2013
150
\nPolicy loans
1,365
\u2013
368
\u2013
\u2013
1,733
\u2013
\u2013
1,733
\nOther loans
668
\u2013
11
\u2013
\u2013
679
\u2013
\u2013
679
\nTotal loans
2,033
\u2013
529
\u2013
\u2013
2,562
\u2013
\u2013
2,562
\nEquity securities and holdings in collective investment
\nschemes
\nDirect equities
10,290
12,812
2,286
84
\u2013
25,472
683
\u2013
26,155
\nCollective investment schemes
23,950
7,704
3,787
3
\u2013
35,444
2
\u2013
35,446
\nTotal equity securities and holdings in collective investment
\nschemes
34,240
20,516
6,073
87
\u2013
60,916
685
\u2013
61,601
\nOther \ufb01nancial investments
\nnote (iii)
\n1,561
149
2,318
106
\u2013
4,134
1,088
\u2013
5,222
\nTotal \ufb01nancial investments
\nnote (v)
\n101,163
26,513
38,450
354
\u2013
166,480
1,999
\u2013
168,479
\nInvestment properties
\u2013
\u2013
38
\u2013
\u2013
38
\u2013
\u2013
38
\nInvestments in joint ventures and associates accounted for
\nusing the equity method
\u2013
\u2013
1,878
305
\u2013
2,183
\u2013
\u2013
2,183
\nCash and cash equivalents
\nnote (vi)
\n905
911
1,444
181
\u2013
3,441
3,729
\u2013
7,170
\nReinsurers\u2019 share of insurance contract liabilities
\nnote C3.3
\n225
\u2013
9,528
\u2013
\u2013
9,753
\u2013
\u2013
9,753
\nOther assets
\nnote (vii)
\n1,184
166
9,191
759
(51)
11,249
3,608
(3,378)
11,479
\nTotal assets
103,477
27,590
60,529
1,599
(51)
193,144
9,336
(3,378)
199,102
\nShareholders\u2019 equity
\u2013
\u2013
14,289
1,120
\u2013
15,409
1,679
\u2013
17,088
\nNon-controlling interests
\u2013
\u2013
45
131
\u2013
176
\u2013
\u2013
176
\nTotal equity
\u2013
\u2013
14,334
1,251
\u2013
15,585
1,679
\u2013
17,264
\nContract liabilities and unallocated surplus of with-pro\ufb01ts
\nfunds
94,002
25,651
37,646
\u2013
\u2013
157,299
\u2013
\u2013
157,299
\nCore structural borrowings
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
6,127
\u2013
6,127
\nOperational borrowings
142
\u2013
106
18
\u2013
266
595
\u2013
861
\nOther liabilities
\nnote (viii)
\n9,333
1,939
8,443
330
(51)
19,994
935
(3,378)
17,551
\nTotal liabilities
103,477
27,590
46,195
348
(51)
177,559
7,657
(3,378)
181,838
\nTotal equity and liabilities
103,477
27,590
60,529
1,599
(51)
193,144
9,336
(3,378)
199,102
(ii)
Of the Group\u2019s debt securities, the following amounts were held by the consolidated investment funds.
\n31 Dec 2022
\n$m
\n31 Dec 2021
\n$m
\nDebt securities held by consolidated investment funds
11,899
15,076
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfDebtSecuritiesExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f35283": {
"value": "B1.3 Revenue
\nPremiums and annuity considerations for conventional and other protection type insurance policies are recognised as revenue when due.
\nPremiums and annuity considerations for linked policies and other investment type policies are recognised as revenue when received or, in the case
\nof unitised or unit-linked policies, when units are issued. These amounts exclude premium taxes and similar duties where Prudential collects and
\nsettles taxes borne by the policyholder.
\nPolicy fees charged on linked policies for mortality, morbidity, asset management and policy administration are recognised when related
\nservices are provided.
\n(a) Analysis of total revenue by segment
\n2022
$m
\nInsurance operations
\nnote (i)
\nEastspring
\nInter-
\nsegment
\nelimination
\nTotal
\nsegment
\nUnallocated
\nto a
\nsegment
Total
Hong Kong
Indonesia
Malaysia
Singapore
\nGrowth
\nmarkets
\nand other
\nGross premiums earned
8,792
1,590
1,843
6,540
4,579
\u2013
\u2013
23,344
\u2013
23,344
\nOutward reinsurance premiums
(1,494)
(34)
(58)
(299)
(58)
\u2013
\u2013
(1,943)
\u2013
(1,943)
\nEarned premiums, net of
\nreinsurance
7,298
1,556
1,785
6,241
4,521
\u2013
\u2013
21,401
\u2013
21,401
\nOther income
\nnote (ii)
\n65
12
\u2013
15
116
330
\u2013
538
1
539
\nTotal external revenue
\nnote (iii)
\n7,363
1,568
1,785
6,256
4,637
330
\u2013
21,939
1
21,940
\nIntra-group revenue
\u2013
\u2013
\u2013
\u2013
1
199
(200)
\u2013
\u2013
\u2013
\nInterest income
\nnote B1.3(b)
\n996
83
217
744
628
4
\u2013
2,672
50
2,722
\nDividend and other investment
\nincome
689
77
183
576
107
1
\u2013
1,633
25
1,658
\nInvestment appreciation
\n(depreciation)
(23,704)
(70)
(365)
(7,498)
(2,876)
(21)
\u2013
(34,534)
(5)
(34,539)
\nTotal revenue, net of reinsurance
(14,656)
1,658
1,820
78
2,497
513
(200)
(8,290)
71
(8,219)
\n2021
$m
\nInsurance operations
\nnote (i)
\nEastspring
\nInter-
\nsegment
\nelimination
\nTotal
\nsegment
\nUnallocated
\nto a
\nsegment
Total
Hong Kong
Indonesia
Malaysia
Singapore
\nGrowth
\nmarkets
\nand other
\nGross premiums earned
10,032
1,724
1,900
6,246
4,315
\u2013
\u2013
24,217
\u2013
24,217
\nOutward reinsurance premiums
(1,557)
(43)
(47)
(137)
(60)
\u2013
\u2013
(1,844)
\u2013
(1,844)
\nEarned premiums, net of
\nreinsurance
8,475
1,681
1,853
6,109
4,255
\u2013
\u2013
22,373
\u2013
22,373
\nOther income
\nnote (ii)
\n52
12
\u2013
22
117
437
\u2013
640
1
641
\nTotal external revenue
\nnote (iii)
\n8,527
1,693
1,853
6,131
4,372
437
\u2013
23,013
1
23,014
\nIntra-group revenue
\u2013
\u2013
\u2013
\u2013
1
217
(218)
\u2013
\u2013
\u2013
\nInterest income
\nnote B1.3(b)
\n934
87
220
707
618
3
\u2013
2,569
1
2,570
\nDividend and other investment
\nincome
679
74
160
506
86
\u2013
\u2013
1,505
19
1,524
\nInvestment appreciation
\n(depreciation)
57
34
(300)
(29)
(361)
8
\u2013
(591)
(17)
(608)
\nTotal revenue, net of reinsurance
10,197
1,888
1,933
7,315
4,716
665
(218)
26,496
4
26,500
\nNotes
\n(i)
CPL, Prudential\u2019s life business in the Chinese Mainland, is a joint venture with CITIC and is accounted for using the equity method under IFRS. The Group\u2019s share of its results is presented in a
\nsingle line within the Group\u2019s pro\ufb01t before tax on a net of related tax basis, and therefore not shown in the analysis of revenue line items above. Revenue from external customers of CPL
\n(Prudential\u2019s share) in 2022 is $2,948 million (2021: $3,052 million). Further \ufb01nancial information on CPL is provided in note D6.3.
\n(ii)
Other income comprises income from external customers and consists primarily of revenue from the Group\u2019s asset management business of $330 million (2021: $437 million). The remaining
\nother income consists primarily of policy fee revenue from external customers and asset management rebate revenue from external fund managers. Also included in other income is fee income
\non \ufb01nancial instruments that are not held at FVTPL of $2 million (2021: $1 million).
\n(iii)
Due to the nature of the business of the Group, there is no reliance on any major customers. Of the Group\u2019s markets, only Hong Kong and Singapore have external revenue that exceeds
\n10 per cent of the Group total for the years presented.
\n300
Prudential plc
Annual Report 2022
prudentialplc.com
(b) Additional analysis of investment return
\nInvestment return included in the income statement principally comprises interest income, dividends, investment appreciation and depreciation
\n(realised and unrealised gains and losses) on investments designated as fair value through pro\ufb01t or loss, and realised gains and losses (including
\nimpairment losses) on items held at amortised cost and/or designated as AFS. Movements in unrealised appreciation or depreciation of securities
\ndesignated as AFS are recorded in other comprehensive income. Interest income is recognised as it accrues. Dividends on equity securities are
\nrecognised on the ex-dividend date and rental income is recognised on an accrual basis.
\n2022
$m
2021
$m
\nNet realised and unrealised gains (losses) on securities at fair value through pro\ufb01t or loss
\nnote (i)
\n(30,097)
624
\nNet realised and unrealised gains (losses) on derivatives at fair value through pro\ufb01t or loss
\nnote (i)
\n(4,487)
(943)
\nNet realised (losses) on loans
\nnote (i)
\n(14)
(2)
\nInterest income
\nnote (ii)
\n2,722
2,570
\nDividend income
1,531
1,496
\nOther investment returns (including foreign exchange gains and losses)
186
(259)
\nInvestment return
(30,159)
3,486
\nNotes
\n(i)
Net realised gains and losses on the Group\u2019s investments for 2022 recognised in the income statement amounted to a net loss of $(9.3) billion (2021: a net gain of $6.0 billion). The movement in
\nthe net amount of realised and unrealised gains and losses on the Group\u2019s investments from 2021 to 2022 primarily re\ufb02ects the e\ufb00ects of signi\ufb01cant increases in interest rates during the year
\ncompared with 2021 as well as equity market falls during the year.
\n(ii)
Interest income includes $362 million (2021: $280 million) in respect of \ufb01nancial assets not at fair value through pro\ufb01t and loss.
\nThe overall \ufb01nancial strength of Prudential and the results, both current and future, of the insurance business are in part dependent upon the
\nquality and performance of the various investment portfolios. Prudential\u2019s insurance investments support a range of businesses operating in
\nmany geographic areas. Each of the operations formulates a strategy based on the nature of its underlying liabilities, its level of capital and its
\nlocal regulatory requirements. Prudential\u2019s insurance business\u2019s investments, excluding assets to cover linked liabilities and those attributable to
\nexternal unit holders of consolidated investment funds, are largely held by Prudential\u2019s Singapore and Hong Kong operations.
\nAll investments are carried at fair value in the statement of \ufb01nancial position with fair value movements, which are volatile from period to
\nperiod, recorded in the income statement, except for loans and receivables, which are generally carried at amortised cost (unless designated at fair
\nvalue through pro\ufb01t or loss), the Group\u2019s retained interest in Jackson and certain centrally held debt securities, which are designated as available-
\nfor-sale and therefore the changes in unrealised fair value are booked in other comprehensive income. Subject to the e\ufb00ect of the exceptions, the
\nyear-on-year changes in investment returns primarily re\ufb02ect the generality of overall market movements for equities and debt securities. In
\naddition, foreign exchange rates a\ufb00ect the USD value of the translated income. Consistent with the treatment applied for other items of income
\nand expenditure, investment return for operations not using USD as functional currency is translated at average exchange rates. The year-on-year
\nmovements in investment return of the Group mainly re\ufb02ect the cumulative impact from the changes in interest rates on bond asset values and in
\nthe performance of the equity markets.
\nAllocation of investment return between policyholders and shareholders
\nInvestment return is attributable to policyholders and shareholders. A key feature of the accounting policies under IFRS is that the investment
\nreturn included in the income statement relates to all investment assets of the Group, irrespective of whether the return is attributable to
\nshareholders, policyholders or the unallocated surplus of with-pro\ufb01ts funds, the latter two of which have no direct impact on shareholders\u2019 pro\ufb01t.
\nThe table below provides a breakdown of the investment return attributable to each type of business.
\n2022
$m
2021
$m
\nPolicyholder returns
\nAssets backing unit-linked liabilities
(2,574)
516
\nWith-pro\ufb01ts business
(21,287)
2,700
\n(23,861)
3,216
\nShareholder returns
(6,298)
270
\nTotal investment return
(30,159)
3,486
\nPolicyholder returns
\nInvestment returns allocated to policyholders are those from investments in which shareholders have no direct economic interest, namely
\nunit-linked business for which the investment returns are wholly attributable to policyholders and with-pro\ufb01ts business in which the shareholders\u2019
\neconomic interest (and the basis of recognising IFRS basis pro\ufb01ts) is restricted to a share of the actuarially determined surplus for distribution.
\nExcept for this surplus, the investment returns of the with-pro\ufb01ts funds are attributable to policyholders (through the asset-share liabilities) or the
\nunallocated surplus, which is accounted for as a liability under IFRS 4 as shown in note C3.
\nShareholder returns
\nFor shareholder-backed non-with-pro\ufb01ts business, the investment returns are generally not directly attributable to policyholders and, therefore,
\nimpact shareholders\u2019 pro\ufb01t directly.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfRevenueExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f35289": {
"value": "Premiums and annuity considerations for conventional and other protection type insurance policies are recognised as revenue when due. Premiums and annuity considerations for linked policies and other investment type policies are recognised as revenue when received or, in the case
\nof unitised or unit-linked policies, when units are issued. These amounts exclude premium taxes and similar duties where Prudential collects and
\nsettles taxes borne by the policyholder.
\nPolicy fees charged on linked policies for mortality, morbidity, asset management and policy administration are recognised when related
\nservices are provided. ",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForRecognitionOfRevenue",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f35303": {
"value": "(a) Analysis of total revenue by segment 2022
$m
\nInsurance operations
\nnote (i)
\nEastspring
\nInter-
\nsegment
\nelimination
\nTotal
\nsegment
\nUnallocated
\nto a
\nsegment
Total
Hong Kong
Indonesia
Malaysia
Singapore
\nGrowth
\nmarkets
\nand other
\nGross premiums earned
8,792
1,590
1,843
6,540
4,579
\u2013
\u2013
23,344
\u2013
23,344
\nOutward reinsurance premiums
(1,494)
(34)
(58)
(299)
(58)
\u2013
\u2013
(1,943)
\u2013
(1,943)
\nEarned premiums, net of
\nreinsurance
7,298
1,556
1,785
6,241
4,521
\u2013
\u2013
21,401
\u2013
21,401
\nOther income
\nnote (ii)
\n65
12
\u2013
15
116
330
\u2013
538
1
539
\nTotal external revenue
\nnote (iii)
\n7,363
1,568
1,785
6,256
4,637
330
\u2013
21,939
1
21,940
\nIntra-group revenue
\u2013
\u2013
\u2013
\u2013
1
199
(200)
\u2013
\u2013
\u2013
\nInterest income
\nnote B1.3(b)
\n996
83
217
744
628
4
\u2013
2,672
50
2,722
\nDividend and other investment
\nincome
689
77
183
576
107
1
\u2013
1,633
25
1,658
\nInvestment appreciation
\n(depreciation)
(23,704)
(70)
(365)
(7,498)
(2,876)
(21)
\u2013
(34,534)
(5)
(34,539)
\nTotal revenue, net of reinsurance
(14,656)
1,658
1,820
78
2,497
513
(200)
(8,290)
71
(8,219)
\n2021
$m
\nInsurance operations
\nnote (i)
\nEastspring
\nInter-
\nsegment
\nelimination
\nTotal
\nsegment
\nUnallocated
\nto a
\nsegment
Total
Hong Kong
Indonesia
Malaysia
Singapore
\nGrowth
\nmarkets
\nand other
\nGross premiums earned
10,032
1,724
1,900
6,246
4,315
\u2013
\u2013
24,217
\u2013
24,217
\nOutward reinsurance premiums
(1,557)
(43)
(47)
(137)
(60)
\u2013
\u2013
(1,844)
\u2013
(1,844)
\nEarned premiums, net of
\nreinsurance
8,475
1,681
1,853
6,109
4,255
\u2013
\u2013
22,373
\u2013
22,373
\nOther income
\nnote (ii)
\n52
12
\u2013
22
117
437
\u2013
640
1
641
\nTotal external revenue
\nnote (iii)
\n8,527
1,693
1,853
6,131
4,372
437
\u2013
23,013
1
23,014
\nIntra-group revenue
\u2013
\u2013
\u2013
\u2013
1
217
(218)
\u2013
\u2013
\u2013
\nInterest income
\nnote B1.3(b)
\n934
87
220
707
618
3
\u2013
2,569
1
2,570
\nDividend and other investment
\nincome
679
74
160
506
86
\u2013
\u2013
1,505
19
1,524
\nInvestment appreciation
\n(depreciation)
57
34
(300)
(29)
(361)
8
\u2013
(591)
(17)
(608)
\nTotal revenue, net of reinsurance
10,197
1,888
1,933
7,315
4,716
665
(218)
26,496
4
26,500
\nNotes
\n(i)
CPL, Prudential\u2019s life business in the Chinese Mainland, is a joint venture with CITIC and is accounted for using the equity method under IFRS. The Group\u2019s share of its results is presented in a
\nsingle line within the Group\u2019s pro\ufb01t before tax on a net of related tax basis, and therefore not shown in the analysis of revenue line items above. Revenue from external customers of CPL
\n(Prudential\u2019s share) in 2022 is $2,948 million (2021: $3,052 million). Further \ufb01nancial information on CPL is provided in note D6.3.
\n(ii)
Other income comprises income from external customers and consists primarily of revenue from the Group\u2019s asset management business of $330 million (2021: $437 million). The remaining
\nother income consists primarily of policy fee revenue from external customers and asset management rebate revenue from external fund managers. Also included in other income is fee income
\non \ufb01nancial instruments that are not held at FVTPL of $2 million (2021: $1 million).
\n(iii)
Due to the nature of the business of the Group, there is no reliance on any major customers. Of the Group\u2019s markets, only Hong Kong and Singapore have external revenue that exceeds
10 per cent of the Group total for the years presented.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfInsurancePremiumRevenueExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f35304": {
"value": "(a) Analysis of total revenue by segment2022
$m
\nInsurance operations
\nnote (i)
\nEastspring
\nInter-
\nsegment
\nelimination
\nTotal
\nsegment
\nUnallocated
\nto a
\nsegment
Total
Hong Kong
Indonesia
Malaysia
Singapore
\nGrowth
\nmarkets
\nand other
\nGross premiums earned
8,792
1,590
1,843
6,540
4,579
\u2013
\u2013
23,344
\u2013
23,344
\nOutward reinsurance premiums
(1,494)
(34)
(58)
(299)
(58)
\u2013
\u2013
(1,943)
\u2013
(1,943)
\nEarned premiums, net of
\nreinsurance
7,298
1,556
1,785
6,241
4,521
\u2013
\u2013
21,401
\u2013
21,401
\nOther income
\nnote (ii)
\n65
12
\u2013
15
116
330
\u2013
538
1
539
\nTotal external revenue
\nnote (iii)
\n7,363
1,568
1,785
6,256
4,637
330
\u2013
21,939
1
21,940
\nIntra-group revenue
\u2013
\u2013
\u2013
\u2013
1
199
(200)
\u2013
\u2013
\u2013
\nInterest income
\nnote B1.3(b)
\n996
83
217
744
628
4
\u2013
2,672
50
2,722
\nDividend and other investment
\nincome
689
77
183
576
107
1
\u2013
1,633
25
1,658
\nInvestment appreciation
\n(depreciation)
(23,704)
(70)
(365)
(7,498)
(2,876)
(21)
\u2013
(34,534)
(5)
(34,539)
\nTotal revenue, net of reinsurance
(14,656)
1,658
1,820
78
2,497
513
(200)
(8,290)
71
(8,219)
\n2021
$m
\nInsurance operations
\nnote (i)
\nEastspring
\nInter-
\nsegment
\nelimination
\nTotal
\nsegment
\nUnallocated
\nto a
\nsegment
Total
Hong Kong
Indonesia
Malaysia
Singapore
\nGrowth
\nmarkets
\nand other
\nGross premiums earned
10,032
1,724
1,900
6,246
4,315
\u2013
\u2013
24,217
\u2013
24,217
\nOutward reinsurance premiums
(1,557)
(43)
(47)
(137)
(60)
\u2013
\u2013
(1,844)
\u2013
(1,844)
\nEarned premiums, net of
\nreinsurance
8,475
1,681
1,853
6,109
4,255
\u2013
\u2013
22,373
\u2013
22,373
\nOther income
\nnote (ii)
\n52
12
\u2013
22
117
437
\u2013
640
1
641
\nTotal external revenue
\nnote (iii)
\n8,527
1,693
1,853
6,131
4,372
437
\u2013
23,013
1
23,014
\nIntra-group revenue
\u2013
\u2013
\u2013
\u2013
1
217
(218)
\u2013
\u2013
\u2013
\nInterest income
\nnote B1.3(b)
\n934
87
220
707
618
3
\u2013
2,569
1
2,570
\nDividend and other investment
\nincome
679
74
160
506
86
\u2013
\u2013
1,505
19
1,524
\nInvestment appreciation
\n(depreciation)
57
34
(300)
(29)
(361)
8
\u2013
(591)
(17)
(608)
\nTotal revenue, net of reinsurance
10,197
1,888
1,933
7,315
4,716
665
(218)
26,496
4
26,500
2022
$m
2021
$m
\nNet realised and unrealised gains (losses) on securities at fair value through pro\ufb01t or loss
\nnote (i)
\n(30,097)
624
\nNet realised and unrealised gains (losses) on derivatives at fair value through pro\ufb01t or loss
\nnote (i)
\n(4,487)
(943)
\nNet realised (losses) on loans
\nnote (i)
\n(14)
(2)
\nInterest income
\nnote (ii)
\n2,722
2,570
\nDividend income
1,531
1,496
\nOther investment returns (including foreign exchange gains and losses)
186
(259)
\nInvestment return
(30,159)
3,486
\nNotes
\n(i)
Net realised gains and losses on the Group\u2019s investments for 2022 recognised in the income statement amounted to a net loss of $(9.3) billion (2021: a net gain of $6.0 billion). The movement in
\nthe net amount of realised and unrealised gains and losses on the Group\u2019s investments from 2021 to 2022 primarily re\ufb02ects the e\ufb00ects of signi\ufb01cant increases in interest rates during the year
\ncompared with 2021 as well as equity market falls during the year.
\n(ii)
Interest income includes $362 million (2021: $280 million) in respect of \ufb01nancial assets not at fair value through pro\ufb01t and loss.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfInterestIncomeExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f35305": {
"value": "(a) Analysis of total revenue by segment2022
$m
\nInsurance operations
\nnote (i)
\nEastspring
\nInter-
\nsegment
\nelimination
\nTotal
\nsegment
\nUnallocated
\nto a
\nsegment
Total
Hong Kong
Indonesia
Malaysia
Singapore
\nGrowth
\nmarkets
\nand other
\nGross premiums earned
8,792
1,590
1,843
6,540
4,579
\u2013
\u2013
23,344
\u2013
23,344
\nOutward reinsurance premiums
(1,494)
(34)
(58)
(299)
(58)
\u2013
\u2013
(1,943)
\u2013
(1,943)
\nEarned premiums, net of
\nreinsurance
7,298
1,556
1,785
6,241
4,521
\u2013
\u2013
21,401
\u2013
21,401
\nOther income
\nnote (ii)
\n65
12
\u2013
15
116
330
\u2013
538
1
539
\nTotal external revenue
\nnote (iii)
\n7,363
1,568
1,785
6,256
4,637
330
\u2013
21,939
1
21,940
\nIntra-group revenue
\u2013
\u2013
\u2013
\u2013
1
199
(200)
\u2013
\u2013
\u2013
\nInterest income
\nnote B1.3(b)
\n996
83
217
744
628
4
\u2013
2,672
50
2,722
\nDividend and other investment
\nincome
689
77
183
576
107
1
\u2013
1,633
25
1,658
\nInvestment appreciation
\n(depreciation)
(23,704)
(70)
(365)
(7,498)
(2,876)
(21)
\u2013
(34,534)
(5)
(34,539)
\nTotal revenue, net of reinsurance
(14,656)
1,658
1,820
78
2,497
513
(200)
(8,290)
71
(8,219)
\n2021
$m
\nInsurance operations
\nnote (i)
\nEastspring
\nInter-
\nsegment
\nelimination
\nTotal
\nsegment
\nUnallocated
\nto a
\nsegment
Total
Hong Kong
Indonesia
Malaysia
Singapore
\nGrowth
\nmarkets
\nand other
\nGross premiums earned
10,032
1,724
1,900
6,246
4,315
\u2013
\u2013
24,217
\u2013
24,217
\nOutward reinsurance premiums
(1,557)
(43)
(47)
(137)
(60)
\u2013
\u2013
(1,844)
\u2013
(1,844)
\nEarned premiums, net of
\nreinsurance
8,475
1,681
1,853
6,109
4,255
\u2013
\u2013
22,373
\u2013
22,373
\nOther income
\nnote (ii)
\n52
12
\u2013
22
117
437
\u2013
640
1
641
\nTotal external revenue
\nnote (iii)
\n8,527
1,693
1,853
6,131
4,372
437
\u2013
23,013
1
23,014
\nIntra-group revenue
\u2013
\u2013
\u2013
\u2013
1
217
(218)
\u2013
\u2013
\u2013
\nInterest income
\nnote B1.3(b)
\n934
87
220
707
618
3
\u2013
2,569
1
2,570
\nDividend and other investment
\nincome
679
74
160
506
86
\u2013
\u2013
1,505
19
1,524
\nInvestment appreciation
\n(depreciation)
57
34
(300)
(29)
(361)
8
\u2013
(591)
(17)
(608)
\nTotal revenue, net of reinsurance
10,197
1,888
1,933
7,315
4,716
665
(218)
26,496
4
26,500",
"dimensions": {
"concept": "ifrs-full:DisclosureOfRevenueFromContractsWithCustomersExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f35308": {
"value": "2022
$m
\nInsurance operations
\nnote (i)
\nEastspring
\nInter-
\nsegment
\nelimination
\nTotal
\nsegment
\nUnallocated
\nto a
\nsegment
Total
Hong Kong
Indonesia
Malaysia
Singapore
\nGrowth
\nmarkets
\nand other
\nGross premiums earned
8,792
1,590
1,843
6,540
4,579
\u2013
\u2013
23,344
\u2013
23,344
\nOutward reinsurance premiums
(1,494)
(34)
(58)
(299)
(58)
\u2013
\u2013
(1,943)
\u2013
(1,943)
\nEarned premiums, net of
\nreinsurance
7,298
1,556
1,785
6,241
4,521
\u2013
\u2013
21,401
\u2013
21,401
\nOther income
\nnote (ii)
\n65
12
\u2013
15
116
330
\u2013
538
1
539
\nTotal external revenue
\nnote (iii)
\n7,363
1,568
1,785
6,256
4,637
330
\u2013
21,939
1
21,940
\nIntra-group revenue
\u2013
\u2013
\u2013
\u2013
1
199
(200)
\u2013
\u2013
\u2013
\nInterest income
\nnote B1.3(b)
\n996
83
217
744
628
4
\u2013
2,672
50
2,722
\nDividend and other investment
\nincome
689
77
183
576
107
1
\u2013
1,633
25
1,658
\nInvestment appreciation
\n(depreciation)
(23,704)
(70)
(365)
(7,498)
(2,876)
(21)
\u2013
(34,534)
(5)
(34,539)
\nTotal revenue, net of reinsurance
(14,656)
1,658
1,820
78
2,497
513
(200)
(8,290)
71
(8,219)
\n2021
$m
\nInsurance operations
\nnote (i)
\nEastspring
\nInter-
\nsegment
\nelimination
\nTotal
\nsegment
\nUnallocated
\nto a
\nsegment
Total
Hong Kong
Indonesia
Malaysia
Singapore
\nGrowth
\nmarkets
\nand other
\nGross premiums earned
10,032
1,724
1,900
6,246
4,315
\u2013
\u2013
24,217
\u2013
24,217
\nOutward reinsurance premiums
(1,557)
(43)
(47)
(137)
(60)
\u2013
\u2013
(1,844)
\u2013
(1,844)
\nEarned premiums, net of
\nreinsurance
8,475
1,681
1,853
6,109
4,255
\u2013
\u2013
22,373
\u2013
22,373
\nOther income
\nnote (ii)
\n52
12
\u2013
22
117
437
\u2013
640
1
641
\nTotal external revenue
\nnote (iii)
\n8,527
1,693
1,853
6,131
4,372
437
\u2013
23,013
1
23,014
\nIntra-group revenue
\u2013
\u2013
\u2013
\u2013
1
217
(218)
\u2013
\u2013
\u2013
\nInterest income
\nnote B1.3(b)
\n934
87
220
707
618
3
\u2013
2,569
1
2,570
\nDividend and other investment
\nincome
679
74
160
506
86
\u2013
\u2013
1,505
19
1,524
\nInvestment appreciation
\n(depreciation)
57
34
(300)
(29)
(361)
8
\u2013
(591)
(17)
(608)
\nTotal revenue, net of reinsurance
10,197
1,888
1,933
7,315
4,716
665
(218)
26,496
4
26,500
2022
$m
2021
$m
\nNet realised and unrealised gains (losses) on securities at fair value through pro\ufb01t or loss
\nnote (i)
\n(30,097)
624
\nNet realised and unrealised gains (losses) on derivatives at fair value through pro\ufb01t or loss
\nnote (i)
\n(4,487)
(943)
\nNet realised (losses) on loans
\nnote (i)
\n(14)
(2)
\nInterest income
\nnote (ii)
\n2,722
2,570
\nDividend income
1,531
1,496
\nOther investment returns (including foreign exchange gains and losses)
186
(259)
\nInvestment return
(30,159)
3,486
\nNotes
\n(i)
Net realised gains and losses on the Group\u2019s investments for 2022 recognised in the income statement amounted to a net loss of $(9.3) billion (2021: a net gain of $6.0 billion). The movement in
\nthe net amount of realised and unrealised gains and losses on the Group\u2019s investments from 2021 to 2022 primarily re\ufb02ects the e\ufb00ects of signi\ufb01cant increases in interest rates during the year
\ncompared with 2021 as well as equity market falls during the year.
\n(ii)
Interest income includes $362 million (2021: $280 million) in respect of \ufb01nancial assets not at fair value through pro\ufb01t and loss.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfInterestIncomeExpenseExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f35593": {
"value": "Also included in other income is fee income on \ufb01nancial instruments that are not held at FVTPL of $2 million (2021: $1 million). ",
"dimensions": {
"concept": "ifrs-full:DisclosureOfFeeAndCommissionIncomeExpenseExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f35783": {
"value": "B2 Acquisition costs and other expenditure 2022
$m
2021
$m
\nAcquisition costs incurred for insurance policies
(2,325)
(2,089)
\nAcquisition costs deferred
1,002
848
\nAmortisation of acquisition costs
(475)
(343)
\nAdministration costs and other expenditure (net of other reinsurance commission)
(3,100)
(3,128)
\nMovements in amounts attributable to external unit holders of consolidated investment funds
1,018
152
\nTotal acquisition costs and other expenditure
(3,880)
(4,560)
\nNotes
\n(i)
Administration costs and other expenditure include fee expenses relating to \ufb01nancial liabilities held at amortised cost and are part of the determination of the e\ufb00ective interest rate.
\n(ii)
Total depreciation and amortisation expenses are included in \u2018Acquisition costs incurred for insurance policies\u2019, \u2018Administration costs and other expenditure (net of other reinsurance commission)\u2019
\nand \u2018Amortisation of acquisition costs\u2019 and relate primarily to amortisation of DAC of insurance contracts and distribution rights intangibles. The segmental analysis of depreciation and
\namortisation is shown below.
\n2022
$m
2021
$m
\nHong Kong
(147)
(123)
\nIndonesia
(61)
(51)
\nMalaysia
(70)
(56)
\nSingapore
(202)
(162)
\nGrowth markets and other
(461)
(390)
\nEastspring
(13)
(17)
\nTotal segment
(954)
(799)
\nUnallocated to a segment (central operations)
(26)
(31)
\nTotal depreciation and amortisation
(980)
(830)
\n(iii)
Interest expense is included in \u2018Administration costs and other expenditure (net of other reinsurance commission)\u2019 other than interest on core structural borrowings that is presented separately
\non the income statement as \u2018Finance costs: interest on core structural borrowings of shareholder-\ufb01nanced businesses\u2019. Interest expense of the central operations amounted to $(209) million
\n(2021: $(331) million) comprising $(200) million (2021: $(328) million) of interest on core structural borrowings, $(2) million of interest on lease liabilities (2021: $(3) million) and $(7) million
\n(2021: nil) of interest on other operational borrowings. Core structural borrowings and operational borrowings (other than lease liabilities) represent \ufb01nancial liabilities that are not classi\ufb01ed at
\nfair value through pro\ufb01t and loss.
\nThe \u2018Total segment\u2019 interest expense is $(16) million (2021: $(10) million) of which $(11) million arises in the Hong Kong segment (2021: $(3) million) with the remainder spread broadly evenly
\nacross the other markets. Included within interest expense is $(7) million (2021: $(10) million) of interest on lease liabilities and is distributed evenly across segments.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfGeneralAndAdministrativeExpenseExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f35784": {
"value": "B2 Acquisition costs and other expenditure 2022
$m
2021
$m
\nAcquisition costs incurred for insurance policies
(2,325)
(2,089)
\nAcquisition costs deferred
1,002
848
\nAmortisation of acquisition costs
(475)
(343)
\nAdministration costs and other expenditure (net of other reinsurance commission)
(3,100)
(3,128)
\nMovements in amounts attributable to external unit holders of consolidated investment funds
1,018
152
\nTotal acquisition costs and other expenditure
(3,880)
(4,560)
\nNotes
\n(i)
Administration costs and other expenditure include fee expenses relating to \ufb01nancial liabilities held at amortised cost and are part of the determination of the e\ufb00ective interest rate.
\n(ii)
Total depreciation and amortisation expenses are included in \u2018Acquisition costs incurred for insurance policies\u2019, \u2018Administration costs and other expenditure (net of other reinsurance commission)\u2019
\nand \u2018Amortisation of acquisition costs\u2019 and relate primarily to amortisation of DAC of insurance contracts and distribution rights intangibles. The segmental analysis of depreciation and
\namortisation is shown below.
\n2022
$m
2021
$m
\nHong Kong
(147)
(123)
\nIndonesia
(61)
(51)
\nMalaysia
(70)
(56)
\nSingapore
(202)
(162)
\nGrowth markets and other
(461)
(390)
\nEastspring
(13)
(17)
\nTotal segment
(954)
(799)
\nUnallocated to a segment (central operations)
(26)
(31)
\nTotal depreciation and amortisation
(980)
(830)
\n(iii)
Interest expense is included in \u2018Administration costs and other expenditure (net of other reinsurance commission)\u2019 other than interest on core structural borrowings that is presented separately
\non the income statement as \u2018Finance costs: interest on core structural borrowings of shareholder-\ufb01nanced businesses\u2019. Interest expense of the central operations amounted to $(209) million
\n(2021: $(331) million) comprising $(200) million (2021: $(328) million) of interest on core structural borrowings, $(2) million of interest on lease liabilities (2021: $(3) million) and $(7) million
\n(2021: nil) of interest on other operational borrowings. Core structural borrowings and operational borrowings (other than lease liabilities) represent \ufb01nancial liabilities that are not classi\ufb01ed at
\nfair value through pro\ufb01t and loss.
\nThe \u2018Total segment\u2019 interest expense is $(16) million (2021: $(10) million) of which $(11) million arises in the Hong Kong segment (2021: $(3) million) with the remainder spread broadly evenly
\nacross the other markets. Included within interest expense is $(7) million (2021: $(10) million) of interest on lease liabilities and is distributed evenly across segments.
\n302
Prudential plc
Annual Report 2022
prudentialplc.com
B2.1
Sta\ufb00 and employment costs
\nThe average number of sta\ufb00 employed by the Group during the years shown was:
\n2022
2021
\nAsia and Africa operations
\nnote (i)
\n13,685
13,237
\nHead o\ufb03ce function
511
600
\nTotal continuing operations
14,196
13,837
\nDiscontinued US operations
\nnote (ii)
\n\u2013
3,306
\nTotal Group
14,196
17,143
\nNotes
\n(i)
The Asia and Africa operations sta\ufb00 numbers above exclude 744 (2021: 440) commission-based sales sta\ufb00 who have an employment contract with the Group.
\n(ii)
Average sta\ufb00 numbers of the discontinued US operations were for the period up to the demerger in September 2021.
\nThe costs of employment were:
\n2022
$m
2021
$m
\nGroup total
Continuing
\nDiscontinued
\nUS operations
Group total
\nWages and salaries
1,018
973
511
1,484
\nSocial security costs
41
42
22
64
\nDe\ufb01ned contribution schemes
40
42
29
71
\nTotal Group
1,099
1,057
562
1,619
\nB2.2
Share-based payment
\nThe Company o\ufb00ers discretionary share awards to certain key employees and all-employee share plans in the UK and a number of Asia locations.
\nThe compensation expense charged to the income statement is primarily based upon the fair value of the awards granted, the vesting period and
\nthe vesting conditions. The Company has established trusts to facilitate the delivery of Prudential plc shares under some of these plans. The cost
\nto the Company of acquiring these newly issued shares held in trusts is shown as a deduction from shareholders\u2019 equity.
\n(a) Description of the plans
\nThe Group operates a number of share award plans that provides Prudential plc shares, or ADRs, to participants upon vesting. The plans in
\noperation include the Prudential Long Term Incentive Plan, the Prudential Annual Incentive Plan, savings-related share option schemes, share
\npurchase plans and deferred bonus plans. Where Executive Directors participate in these plans, details about those schemes are provided in the
\nDirectors\u2019 remuneration report. The following information is provided about plans in which the Executive Directors do not participate:
\nShare scheme
\nnote
\nDescription
\nPrudential Asia and Africa (PAA)
\nLong-Term Incentive Plan (PAA LTIP)
\nThe PAA LTIP provides eligible employees with conditional awards. Awards are discretionary and
\nvest after one, two or three years subject to the employee being in employment. Vesting of
\nawards may also be subject to performance conditions. All awards are generally made in
\nPrudential shares. In countries where share awards are not feasible for reasons including
\nsecurities and/or tax considerations, awards will be replaced by the cash value of the shares that
\nwould otherwise have vested.
\nPrudential Agency Long-Term Incentive
\nPlan (LTIP)
\nCertain agents are eligible to be granted awards in Prudential shares under the Prudential
\nAgency LTIP. These awards are structured in a similar way to the PAA LTIP described above with
\nmost awards granted with a three-year vesting period.
\nRestricted Share Plan (RSP)
The Company operates the RSP for certain employees. Awards under this plan are discretionary,
\nand the vesting of awards may be subject to performance conditions. All awards are made in
\nPrudential shares.
\nDeferred bonus plans
The Company operates a number of deferred bonus plans including the Group Deferred Bonus
\nPlan (GDBP) and the Prudential Deferred Bonus Plan. There are no performance conditions
\nattached to deferred share awards made under these arrangements.
\nSavings-related share option schemes
Eligible agents in certain business units are able to participate in the International Savings-
\nRelated Share Option Scheme for Non-Employees, which is similar to the HMRC-approved Save
\nAs You Earn (SAYE) share option scheme in the UK.
\nShare purchase plans
Eligible employees outside the UK are invited to participate in arrangements similar to the
\nCompany\u2019s HMRC-approved UK Share Incentive Plan, which allows the purchase of
\nPrudential plc shares. Sta\ufb00 based in Asia and Africa are eligible to participate in the Prudential
\nAll Employee Share Purchase Plan.
\nNote
\nThe total numbers of securities available for issue under these schemes are disclosed in note I(vii) within additional unaudited \ufb01nancial information.
\n303
Prudential plc
Annual Report 2022
\nGroup overview
Strategic report
Governance
Directors\u2019 remuneration report
European Embedded Value (EEV) basis results
Additional information
Financial statements
B Earnings performance
/ continued
\nB2 Acquisition costs and other expenditure
continued
\n(b) Outstanding options and awards
\nThe following table shows the movement in outstanding options and awards under the Group\u2019s share-based compensation plans:
\nOptions outstanding under SAYE schemes
\nAwards outstanding under
\nincentive plans
\n2022
2021
2022
2021
\nNumber
\nof options
\nmillions
\nWeighted
\naverage
\nexercise
\nprice
\n\u00a3
\nNumber
\nof options
\nmillions
\nWeighted
\naverage
\nexercise
\nprice
\n\u00a3
\nNumber of awards
\nmillions
\nBalance at beginning of year:
2.0
11.61
2.3
11.86
24.6
40.6
\nGranted
0.5
7.37
0.4
11.90
6.5
5.2
\nModi\ufb01cation
\u2013
\u2013
0.1
11.77
\u2013
0.7
\nExercised
(0.3)
11.17
(0.7)
12.58
(7.2)
(8.6)
\nForfeited
\u2013
10.84
\u2013
11.11
(1.1)
(3.1)
\nCancelled
(0.3)
12.67
(0.1)
11.51
(0.1)
(0.1)
\nLapsed/Expired
\u2013
13.00
\u2013
12.88
(1.7)
(0.6)
\nJackson awards derecognised on demerger
\nnote
\n\u2013
\u2013
\u2013
\u2013
\u2013
(9.5)
\nBalance at end of year
1.9
10.43
2.0
11.61
21.0
24.6
\nOptions immediately exercisable at end of year
0.3
12.48
0.2
12.26
\nNote
\nOn demerger of Jackson from the Prudential Group, outstanding share awards for Prudential plc participants were adjusted to receive the demerger dividend in the form of additional Prudential plc
\nshares, to be released on the same timetable and to the same extent as their original share awards. In the case of the International Savings-Related Share Option Scheme for Non Employees the
\nadjustments to outstanding options were con\ufb01rmed as being fair and reasonable by an independent \ufb01nancial adviser in accordance with the rules of that plan and the Hong Kong Stock Exchange
\nListing Rules. Employees of Jackson were granted replacement awards over Jackson shares, in exchange for existing Group awards outstanding under incentive plans. As designated replacement awards
\nwere granted, no cancellation was recognised in respect of the original awards. As the replacement awards are an obligation of Jackson these awards were derecognised by the Group on demerger.
\nThe weighted average share price of Prudential plc for 2022 was \u00a310.33 (2021: \u00a314.31).
\nThe following table provides a summary of the range of exercise prices for Prudential plc options outstanding at 31 December:
\nOutstanding
Exercisable
\nNumber outstanding
\nmillions
\nWeighted average
\nremaining
\ncontractual life
\nyears
\nWeighted average
\nexercise prices
\n\u00a3
\nNumber exercisable
\nmillions
\nWeighted average
\nexercise prices
\n\u00a3
\n2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
\nBetween \u00a37 and \u00a38
0.5
\u2013
4.1
\u2013
7.37
\u2013
\u2013
\u2013
\u2013
\u2013
\nBetween \u00a39 and \u00a310
0.4
0.4
2.2
3.2
9.64
9.64
\u2013
\u2013
\u2013
\u2013
\nBetween \u00a311 and \u00a312
0.8
1.2
2.4
2.7
11.48
11.38
0.2
0.1
11.12
11.04
\nBetween \u00a313 and \u00a314
0.1
0.2
1.4
1.6
13.94
13.94
\u2013
0.1
\u2013
13.94
\nBetween \u00a314 and \u00a315
0.1
0.2
0.4
1.4
14.55
14.55
0.1
\u2013
14.55
\u2013
\nTotal
1.9
2.0
2.6
2.6
10.43
11.61
0.3
0.2
12.48
12.26
\nThe years shown above for weighted average remaining contractual life include the time period from end of vesting period to expiration of
\ncontract.
\n(c) Fair value of options and awards
\nThe fair value amounts estimated on the date of grant relating to all options and awards were determined by using the following assumptions:
\n2022
2021
\nPrudential
\nLTIP (TSR)
\nSAYE
\noptions
\nOther
\nawards
\nPrudential
\nLTIP (TSR)
\nSAYE
\noptions
\nOther
\nawards
\nDividend yield (%)
\u2013
1.11
\u2013
\u2013
0.81
\u2013
\nExpected volatility (%)
33.64
25.68
\u2013
26.69
22.31
\u2013
\nRisk-free interest rate (%)
2.79
3.97
\u2013
0.36
1.18
\u2013
\nExpected option life (years)
\u2013
4.52
\u2013
\u2013
4.50
\u2013
\nWeighted average exercise price (\u00a3)
\u2013
7.37
\u2013
\u2013
11.90
\u2013
\nWeighted average share price at grant date (\u00a3)
11.15
9.54
\u2013
15.11
14.76
\u2013
\nWeighted average fair value at grant date (\u00a3)
2.09
3.45
11.11
7.70
4.13
14.79
\n304
Prudential plc
Annual Report 2022
prudentialplc.com
The compensation costs for all awards and options are recognised in net income over the plans\u2019 respective vesting periods. The Group uses the
\nBlack-Scholes model to value all options, and \ufb01nancial equivalence to value all awards other than those which have TSR performance conditions
\nattached (some Prudential LTIP and RSP awards) for which the Group uses a Monte Carlo model in order to allow for the impact of these
\nconditions. These models are used to calculate fair values for share options and awards at the grant date based on the quoted market price of the
\nstock at the measurement date, the amount, if any, that the employees are required to pay, the dividend yield, expected volatility, risk-free interest
\nrates and exercise prices.
\nFor all options and awards, the expected volatility is based on the market implied volatilities as quoted on Bloomberg. The Prudential speci\ufb01c
\nat-the-money implied volatilities are adjusted to allow for the di\ufb00erent terms and discounted exercise price on SAYE options by using information
\non the volatility surface of the FTSE 100.
\nRisk-free interest rates are taken from swap spot rates with projection terms matching the corresponding vesting periods. For awards with a TSR
\ncondition, volatilities and correlations between Prudential and a basket of 12 competitor companies is required. For grants in 2022, the average
\nvolatility for the basket of competitors was 26.46 per cent (2021: 23.62 per cent). Correlations for the basket are calculated for each pairing from
\nthe log of daily TSR returns for the three years prior to the valuation date. Market implied volatilities are used for both Prudential and the basket of
\ncompetitors. Changes to the subjective input assumptions could materially a\ufb00ect the fair value estimate.
\nOther awards, without market performance conditions or exercise price, are valued based on grant date share price.
\n(d) Share-based payment expense charged to the income statement
\nThe total expense recognised in 2022 in the consolidated \ufb01nancial statements relating to share-based compensation is $104 million (2021:
\n$100 million), of which $97 million (2021: $94 million) is accounted for as equity-settled.
\nThe Group had $27 million of liabilities at 31 December 2022 (31 December 2021: $32 million) relating to share-based payment awards
\naccounted for as cash-settled.
\nB2.3
Key management remuneration
\nKey management constitutes the Directors of Prudential plc and other non-Director members of the GEC, as they have authority and
\nresponsibility for planning, directing and controlling the activities of the Group.
\nTotal key management remuneration is analysed in the following table:
\n2022
$m
2021
$m
\nSalaries and short-term bene\ufb01ts
22.5
29.3
\nPost-employment bene\ufb01ts
1.0
1.4
\nShare-based payments
15.4
14.0
\nPayments on separation
1.0
23.5
\n39.9
68.2
\nThe share-based payments charge comprises $6.7 million (2021: $7.5 million), which is determined in accordance with IFRS 2 \u2018Share-based
\nPayment\u2019 (see note B2.2) and $8.7 million (2021: $6.5 million) of deferred share awards.
\nAdditional details on the Directors\u2019 emoluments, retirement bene\ufb01ts and other payments are given in the Directors\u2019 remuneration report. In
\naddition to the total amounts disclosed of remuneration paid to the Directors in 2021, are amounts paid to those directors who stepped down
\nfrom the Board in 2021 being $102,000 to Kai Nargolwala and $203,000 to Fields Wicker-Miurin. This is as disclosed in the 2021 Annual Report.
\nB2.4
Fees payable to the auditor
\n2022
$m
2021
$m
\nAudit of the Company\u2019s annual accounts
2.3
2.4
\nAudit of subsidiaries pursuant to legislation
4.4
5.9
\nAudit fees payable to the auditor
6.7
8.3
\nAudit-related assurance services
\nnote (i)
\n3.5
4.5
\nOther assurance services
0.7
1.1
\nServices relating to corporate \ufb01nance transactions
\u2013
1.6
\nNon-audit fees payable to the auditor
4.2
7.2
\nTotal fees payable to the auditor
10.9
15.5
\nAnalysed into:
\nFees payable to the auditor attributable to continuing operations:
\nOne-o\ufb00 non-audit services associated with demerger and public o\ufb00ering
\nnote (ii)
\n\u2013
1.9
\nOther audit and non-audit services
10.9
11.3
\n10.9
13.2
\nFees payable to the auditor attributable to discontinued US operations
\u2013
2.3
\n10.9
15.5
\nNotes
\n(i)
Of the audit-related assurance service fees of $3.5 million in 2022 (2021: $4.5 million), $0.9 million (2021: $0.6 million) relates to services that are required by law and regulation.
\n(ii)
Of the $1.9 million one-o\ufb00 non-audit services fees associated with the demerger of the US operations and the public o\ufb00ering in Hong Kong in 2021, $0.1 million was for audit-related assurance
\nand $0.1 million for other assurance services required by law and regulation.
\n305
Prudential plc
Annual Report 2022
\nGroup overview
Strategic report
Governance
Directors\u2019 remuneration report
European Embedded Value (EEV) basis results
Additional information
Financial statements
B Earnings performance
/ continued
\nB3 Tax charge
\nPrudential is subject to tax in numerous jurisdictions and the calculation of the total tax charge inherently involves a degree of estimation and
\njudgement. Current tax expense is charged or credited based upon amounts estimated to be payable or recoverable as a result of taxable amounts
\nfor the current year and adjustments made in relation to prior years. The positions taken in tax returns where applicable tax regulation is subject to
\ninterpretation are recognised in full in the determination of the tax charge in the consolidated \ufb01nancial statements if the Group considers that it is
\nprobable that the taxation authority will accept those positions. Otherwise, provisions are established based on the likely amount of the liability, or
\nrecovery, by providing for the single best estimate of the most likely outcome or the weighted average expected value where there are multiple
\noutcomes.
\nThe total tax charge includes tax expense attributable to both policyholders and shareholders. The tax expense attributable to policyholders
\ncomprises the tax on the income of the consolidated with-pro\ufb01ts and unit-linked funds. In certain jurisdictions, life insurance companies are taxed
\non both their shareholders\u2019 pro\ufb01ts and on their policyholders\u2019 insurance and investment returns on certain insurance and investment products.
\nAlthough both types of tax are included in the total tax charge in the Group\u2019s Consolidated income statement, they are presented separately in the
\nConsolidated income statement to provide the most relevant information about tax that the Group pays on its pro\ufb01ts.
\nDeferred taxes are provided under the liability method for all relevant temporary di\ufb00erences. IAS 12 \u2018Income Taxes\u2019 does not require all
\ntemporary di\ufb00erences to be provided for, in particular, the Group does not provide for deferred tax on undistributed earnings of subsidiaries where
\nthe Group is able to control the timing of the distribution and the temporary di\ufb00erence created is not expected to reverse in the foreseeable future.
\nDeferred tax assets are only recognised when it is more likely than not that future taxable pro\ufb01ts will be available against which these losses can be
\nutilised.
\nDeferred tax is measured at the tax rates that are expected to apply to the period when the asset is realised or the liability settled, based on tax
\nrates (and laws) that have been enacted or are substantively enacted at the end of the reporting period.
\nB3.1
Total tax charge by nature
\nThe total tax charge in the income statement is as follows:
\n2022
$m
2021
$m
\nAttributable to shareholders:
\nHong Kong
(52)
(40)
\nIndonesia
(60)
(74)
\nMalaysia
(90)
(71)
\nSingapore
(78)
(67)
\nGrowth markets and other
(144)
(159)
\nEastspring
(26)
(30)
\nTotal segment
(450)
(441)
\nUnallocated to a segment (central operations)
(4)
(21)
\nTax charge attributable to shareholders
(454)
(462)
\nAttributable to policyholders:
\nHong Kong
(56)
(79)
\nIndonesia
(5)
4
\nMalaysia
\u2013
(2)
\nSingapore
44
(261)
\nGrowth markets and other
(4)
(4)
\nTax charge attributable to policyholders
(21)
(342)
\nTotal tax charge
(475)
(804)
\nPro\ufb01t before tax includes Prudential\u2019s share of pro\ufb01t after tax from the joint ventures and associates that are equity-accounted for. Therefore, the
\nactual tax charge in the income statement does not include tax arising from the results of joint ventures and associates including CPL.
\nThe reconciliation of the expected to actual tax charge attributable to shareholders is provided in B3.2 below. The tax charge attributable to
\npolicyholders of $(21) million (2021: $(342) million) above is equal to the pro\ufb01t before tax attributable to policyholders as a result of accounting
\nfor policyholder income after the deduction of expenses and movement in unallocated surpluses on a post-tax basis. The reduction in the tax
\ncharge attributable to policyholders results from the deferred tax impact of policyholder liability movements caused by adverse market
\nmovements in 2022, primarily in Singapore.
\n306
Prudential plc
Annual Report 2022
prudentialplc.com
The total tax charge comprises:
\n2022
$m
2021
$m
\nCurrent tax expense:
\nCorporation tax
(474)
(405)
\nAdjustments in respect of prior years
(7)
6
\nTotal current tax charge
(481)
(399)
\nDeferred tax arising from:
\nOrigination and reversal of temporary di\ufb00erences
4
(388)
\nAdjustment in respect of a tax loss, tax credit or temporary di\ufb00erence from a prior year
2
(17)
\nTotal deferred tax credit (charge)
6
(405)
\nTotal tax charge
(475)
(804)
\nB3.2
Reconciliation of shareholder e\ufb00ective tax rate
\nIn the reconciliation below, the expected tax rate re\ufb02ects the corporation tax rates that are expected to apply to the taxable pro\ufb01t or loss for the
\nperiod. It re\ufb02ects the corporation tax rates of each jurisdiction weighted by reference to the amount of pro\ufb01t or loss contributing to the aggregate
\nresult.
\n2022
2021
\nTax
\nattributable to
\nshareholders
\n$m
\nPercentage
\nimpact
\non ETR
\n%
\nTax
\nattributable to
\nshareholders
\n$m
\nPercentage
\nimpact
\non ETR
\n%
\nAdjusted operating pro\ufb01t
3,375
3,233
\nNon-operating result
\nnote (i)
\n(1,914)
(557)
\nPro\ufb01t before tax
1,461
2,676
\nTax charge at the expected rate
(287)
20%
(539)
20%
\nE\ufb00ects of recurring tax reconciliation items:
\nIncome not taxable or taxable at concessionary rates
\nnote (ii)
\n61
(4)%
63
(2)%
\nDeductions and losses not allowable for tax purposes
\nnote (iii)
\n(196)
13%
(92)
3%
\nItems related to taxation of life insurance businesses
\nnote (iv)
\n108
(7)%
177
(7)%
\nDeferred tax adjustments including unrecognised tax losses
\nnote (v)
\n(45)
3%
(111)
4%
\nE\ufb00ect of results of joint ventures and associates
\nnote (vi)
\n3
0%
80
(3)%
\nIrrecoverable withholding taxes
\nnote (vii)
\n(55)
4%
(60)
2%
\nOther
(15)
0%
(8)
1%
\nTotal (charge) credit on recurring items
(139)
9%
49
(2)%
\nE\ufb00ects of non-recurring tax reconciliation items:
\nAdjustments to tax charge in relation to prior years
1
0%
(11)
0%
\nMovements in provisions for open tax matters
\nnote (viii)
\n(40)
3%
47
(2)%
\nImpact of changes in local statutory tax rates
\u2013
0%
6
0%
\nAdjustments in relation to business disposals and corporate transactions
11
(1)%
(14)
1%
\nTotal (charge) credit on non-recurring items
(28)
2%
28
(1)%
\nTotal actual tax charge
(454)
31%
(462)
17%
\nAnalysed into:
\nTax charge on adjusted operating pro\ufb01t
(614)
(548)
\nTax credit on non-operating result
\nnote (i)
\n160
86
\nActual tax rate on:
\nAdjusted operating pro\ufb01t:
\nIncluding non-recurring tax reconciling items
\nnote (ix)
\n18%
17%
\nExcluding non-recurring tax reconciling items
17%
18%
\nTotal pro\ufb01t
\nnote (ix)
\n31%
17%
\n307
Prudential plc
Annual Report 2022
\nGroup overview
Strategic report
Governance
Directors\u2019 remuneration report
European Embedded Value (EEV) basis results
Additional information
Financial statements
B Earnings performance
/ continued
\nB3 Tax charge
continued
\nB3.2
Reconciliation of shareholder e\ufb00ective tax rate
continued
\nNotes
\n(i)
\u2018Non-operating result\u2019 is used to refer to items excluded from adjusted operating pro\ufb01t and includes short-term investment \ufb02uctuations in investment returns on shareholder-backed business,
\ncorporate transactions and amortisation of acquisition accounting adjustments. The tax charge on non-operating result is calculated using the tax rates applicable to investment pro\ufb01t or loss
\nrecorded in the non-operating result for each entity, and then adjusting for any discrete items included in the total tax charge that relate speci\ufb01cally to the amounts (other than investment
\nrelated pro\ufb01t or loss) included in the non-operating result. The di\ufb00erence between this tax on non-operating result and the tax charge calculated on pro\ufb01t before tax is the tax charge on adjusted
\noperating pro\ufb01t.
\n(ii)
Income not taxable or taxable at concessionary rates primarily relates to non-taxable investment income in Malaysia and Singapore.
\n(iii)
Deductions and losses not allowable for tax purposes primarily relates to non-deductible investment losses in Growth markets.
\n(iv)
Items related to taxation of life insurance businesses primarily relates to Hong Kong where the taxable pro\ufb01t is computed as 5 per cent of net insurance premiums.
\n(v)
The unrecognised tax losses reconciling amount re\ufb02ects losses arising where it is unlikely that relief for the losses will be available in future years.
\n(vi)
Pro\ufb01t before tax includes Prudential\u2019s share of pro\ufb01t after tax from the joint ventures and associates. Therefore, the actual tax charge does not include tax arising from pro\ufb01t or loss of joint
\nventures and associates and is re\ufb02ected as a reconciling item.
\n(vii)
The Group incurs withholding tax on remittances received from certain jurisdictions and on certain investment income. Where these withholding taxes cannot be o\ufb00set against corporate income
\ntax or otherwise recovered, they represent a cost to the Group. Irrecoverable withholding tax on remittances is included in Other operations and is not allocated to any segment. Irrecoverable
\nwithholding tax on investment income is included in the relevant segment where the investment income is re\ufb02ected.
\n(viii)
The statement of \ufb01nancial position contains the following provisions in relation to open tax matters:
\n2022
$m
\nBalance at 1 Jan
(42)
\nMovements in the current year included in tax charge attributable to shareholders
(40)
\nOther movements (including interest arising on open tax matters and amounts included in the Group\u2019s share of pro\ufb01ts from joint
\nventures and associates, net of related tax)
3
\nBalance at 31 Dec
(79)
\n(ix)
The actual tax rates of the relevant business operations are shown below:
\n2022
%
\nHong
\nKong
Indonesia
Malaysia
Singapore
\nGrowth
\nmarkets
\nand other
Eastspring
\nOther
\noperations
\nTotal
\nattributable
\nto
\nshareholders
\nTax rate on adjusted operating pro\ufb01t
6%
20%
26%
16%
24%
10%
(1)%
18%
\nTax rate on pro\ufb01t before tax
(33)%
20%
26%
16%
14%
10%
(1)%
31%
\n2021
%
\nHong
\nKong
Indonesia
Malaysia
Singapore
\nGrowth
\nmarkets
\nand other
Eastspring
\nOther
\noperations
\nTotal
\nattributable
\nto
\nshareholders
\nTax rate on adjusted operating pro\ufb01t
5%
17%
21%
15%
22%
10%
(3)%
17%
\nTax rate on pro\ufb01t before tax
4%
17%
21%
15%
27%
10%
(2)%
17%",
"dimensions": {
"concept": "ifrs-full:DisclosureOfExpensesExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f35813": {
"value": "(ii) Total depreciation and amortisation expenses are included in \u2018Acquisition costs incurred for insurance policies\u2019, \u2018Administration costs and other expenditure (net of other reinsurance commission)\u2019
\nand \u2018Amortisation of acquisition costs\u2019 and relate primarily to amortisation of DAC of insurance contracts and distribution rights intangibles. The segmental analysis of depreciation and
\namortisation is shown below.
\n2022
$m
2021
$m
\nHong Kong
(147)
(123)
\nIndonesia
(61)
(51)
\nMalaysia
(70)
(56)
\nSingapore
(202)
(162)
\nGrowth markets and other
(461)
(390)
\nEastspring
(13)
(17)
\nTotal segment
(954)
(799)
\nUnallocated to a segment (central operations)
(26)
(31)
\nTotal depreciation and amortisation
(980)
(830)",
"dimensions": {
"concept": "ifrs-full:DisclosureOfDepreciationAndAmortisationExpenseExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f35853": {
"value": "(iii) Interest expense is included in \u2018Administration costs and other expenditure (net of other reinsurance commission)\u2019 other than interest on core structural borrowings that is presented separately
\non the income statement as \u2018Finance costs: interest on core structural borrowings of shareholder-\ufb01nanced businesses\u2019. Interest expense of the central operations amounted to $(209) million
\n(2021: $(331) million) comprising $(200) million (2021: $(328) million) of interest on core structural borrowings, $(2) million of interest on lease liabilities (2021: $(3) million) and $(7) million
\n(2021: nil) of interest on other operational borrowings. Core structural borrowings and operational borrowings (other than lease liabilities) represent \ufb01nancial liabilities that are not classi\ufb01ed at
\nfair value through pro\ufb01t and loss.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfInterestExpenseExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f35880": {
"value": "B2.1 Sta\ufb00 and employment costs
\nThe average number of sta\ufb00 employed by the Group during the years shown was:
\n2022
2021
\nAsia and Africa operations
\nnote (i)
\n13,685
13,237
\nHead o\ufb03ce function
511
600
\nTotal continuing operations
14,196
13,837
\nDiscontinued US operations
\nnote (ii)
\n\u2013
3,306
\nTotal Group
14,196
17,143
\nNotes
\n(i)
The Asia and Africa operations sta\ufb00 numbers above exclude 744 (2021: 440) commission-based sales sta\ufb00 who have an employment contract with the Group.
\n(ii)
Average sta\ufb00 numbers of the discontinued US operations were for the period up to the demerger in September 2021.
\nThe costs of employment were:
\n2022
$m
2021
$m
\nGroup total
Continuing
\nDiscontinued
\nUS operations
Group total
\nWages and salaries
1,018
973
511
1,484
\nSocial security costs
41
42
22
64
\nDe\ufb01ned contribution schemes
40
42
29
71
\nTotal Group
1,099
1,057
562
1,619
\nB2.2
Share-based payment
\nThe Company o\ufb00ers discretionary share awards to certain key employees and all-employee share plans in the UK and a number of Asia locations.
\nThe compensation expense charged to the income statement is primarily based upon the fair value of the awards granted, the vesting period and
\nthe vesting conditions. The Company has established trusts to facilitate the delivery of Prudential plc shares under some of these plans. The cost
\nto the Company of acquiring these newly issued shares held in trusts is shown as a deduction from shareholders\u2019 equity.
\n(a) Description of the plans
\nThe Group operates a number of share award plans that provides Prudential plc shares, or ADRs, to participants upon vesting. The plans in
\noperation include the Prudential Long Term Incentive Plan, the Prudential Annual Incentive Plan, savings-related share option schemes, share
\npurchase plans and deferred bonus plans. Where Executive Directors participate in these plans, details about those schemes are provided in the
\nDirectors\u2019 remuneration report. The following information is provided about plans in which the Executive Directors do not participate:
\nShare scheme
\nnote
\nDescription
\nPrudential Asia and Africa (PAA)
\nLong-Term Incentive Plan (PAA LTIP)
\nThe PAA LTIP provides eligible employees with conditional awards. Awards are discretionary and
\nvest after one, two or three years subject to the employee being in employment. Vesting of
\nawards may also be subject to performance conditions. All awards are generally made in
\nPrudential shares. In countries where share awards are not feasible for reasons including
\nsecurities and/or tax considerations, awards will be replaced by the cash value of the shares that
\nwould otherwise have vested.
\nPrudential Agency Long-Term Incentive
\nPlan (LTIP)
\nCertain agents are eligible to be granted awards in Prudential shares under the Prudential
\nAgency LTIP. These awards are structured in a similar way to the PAA LTIP described above with
\nmost awards granted with a three-year vesting period.
\nRestricted Share Plan (RSP)
The Company operates the RSP for certain employees. Awards under this plan are discretionary,
\nand the vesting of awards may be subject to performance conditions. All awards are made in
\nPrudential shares.
\nDeferred bonus plans
The Company operates a number of deferred bonus plans including the Group Deferred Bonus
\nPlan (GDBP) and the Prudential Deferred Bonus Plan. There are no performance conditions
\nattached to deferred share awards made under these arrangements.
\nSavings-related share option schemes
Eligible agents in certain business units are able to participate in the International Savings-
\nRelated Share Option Scheme for Non-Employees, which is similar to the HMRC-approved Save
\nAs You Earn (SAYE) share option scheme in the UK.
\nShare purchase plans
Eligible employees outside the UK are invited to participate in arrangements similar to the
\nCompany\u2019s HMRC-approved UK Share Incentive Plan, which allows the purchase of
\nPrudential plc shares. Sta\ufb00 based in Asia and Africa are eligible to participate in the Prudential
\nAll Employee Share Purchase Plan.
\nNote
\nThe total numbers of securities available for issue under these schemes are disclosed in note I(vii) within additional unaudited \ufb01nancial information.
\n303
Prudential plc
Annual Report 2022
\nGroup overview
Strategic report
Governance
Directors\u2019 remuneration report
European Embedded Value (EEV) basis results
Additional information
Financial statements
B Earnings performance
/ continued
\nB2 Acquisition costs and other expenditure
continued
\n(b) Outstanding options and awards
\nThe following table shows the movement in outstanding options and awards under the Group\u2019s share-based compensation plans:
\nOptions outstanding under SAYE schemes
\nAwards outstanding under
\nincentive plans
\n2022
2021
2022
2021
\nNumber
\nof options
\nmillions
\nWeighted
\naverage
\nexercise
\nprice
\n\u00a3
\nNumber
\nof options
\nmillions
\nWeighted
\naverage
\nexercise
\nprice
\n\u00a3
\nNumber of awards
\nmillions
\nBalance at beginning of year:
2.0
11.61
2.3
11.86
24.6
40.6
\nGranted
0.5
7.37
0.4
11.90
6.5
5.2
\nModi\ufb01cation
\u2013
\u2013
0.1
11.77
\u2013
0.7
\nExercised
(0.3)
11.17
(0.7)
12.58
(7.2)
(8.6)
\nForfeited
\u2013
10.84
\u2013
11.11
(1.1)
(3.1)
\nCancelled
(0.3)
12.67
(0.1)
11.51
(0.1)
(0.1)
\nLapsed/Expired
\u2013
13.00
\u2013
12.88
(1.7)
(0.6)
\nJackson awards derecognised on demerger
\nnote
\n\u2013
\u2013
\u2013
\u2013
\u2013
(9.5)
\nBalance at end of year
1.9
10.43
2.0
11.61
21.0
24.6
\nOptions immediately exercisable at end of year
0.3
12.48
0.2
12.26
\nNote
\nOn demerger of Jackson from the Prudential Group, outstanding share awards for Prudential plc participants were adjusted to receive the demerger dividend in the form of additional Prudential plc
\nshares, to be released on the same timetable and to the same extent as their original share awards. In the case of the International Savings-Related Share Option Scheme for Non Employees the
\nadjustments to outstanding options were con\ufb01rmed as being fair and reasonable by an independent \ufb01nancial adviser in accordance with the rules of that plan and the Hong Kong Stock Exchange
\nListing Rules. Employees of Jackson were granted replacement awards over Jackson shares, in exchange for existing Group awards outstanding under incentive plans. As designated replacement awards
\nwere granted, no cancellation was recognised in respect of the original awards. As the replacement awards are an obligation of Jackson these awards were derecognised by the Group on demerger.
\nThe weighted average share price of Prudential plc for 2022 was \u00a310.33 (2021: \u00a314.31).
\nThe following table provides a summary of the range of exercise prices for Prudential plc options outstanding at 31 December:
\nOutstanding
Exercisable
\nNumber outstanding
\nmillions
\nWeighted average
\nremaining
\ncontractual life
\nyears
\nWeighted average
\nexercise prices
\n\u00a3
\nNumber exercisable
\nmillions
\nWeighted average
\nexercise prices
\n\u00a3
\n2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
\nBetween \u00a37 and \u00a38
0.5
\u2013
4.1
\u2013
7.37
\u2013
\u2013
\u2013
\u2013
\u2013
\nBetween \u00a39 and \u00a310
0.4
0.4
2.2
3.2
9.64
9.64
\u2013
\u2013
\u2013
\u2013
\nBetween \u00a311 and \u00a312
0.8
1.2
2.4
2.7
11.48
11.38
0.2
0.1
11.12
11.04
\nBetween \u00a313 and \u00a314
0.1
0.2
1.4
1.6
13.94
13.94
\u2013
0.1
\u2013
13.94
\nBetween \u00a314 and \u00a315
0.1
0.2
0.4
1.4
14.55
14.55
0.1
\u2013
14.55
\u2013
\nTotal
1.9
2.0
2.6
2.6
10.43
11.61
0.3
0.2
12.48
12.26
\nThe years shown above for weighted average remaining contractual life include the time period from end of vesting period to expiration of
\ncontract.
\n(c) Fair value of options and awards
\nThe fair value amounts estimated on the date of grant relating to all options and awards were determined by using the following assumptions:
\n2022
2021
\nPrudential
\nLTIP (TSR)
\nSAYE
\noptions
\nOther
\nawards
\nPrudential
\nLTIP (TSR)
\nSAYE
\noptions
\nOther
\nawards
\nDividend yield (%)
\u2013
1.11
\u2013
\u2013
0.81
\u2013
\nExpected volatility (%)
33.64
25.68
\u2013
26.69
22.31
\u2013
\nRisk-free interest rate (%)
2.79
3.97
\u2013
0.36
1.18
\u2013
\nExpected option life (years)
\u2013
4.52
\u2013
\u2013
4.50
\u2013
\nWeighted average exercise price (\u00a3)
\u2013
7.37
\u2013
\u2013
11.90
\u2013
\nWeighted average share price at grant date (\u00a3)
11.15
9.54
\u2013
15.11
14.76
\u2013
\nWeighted average fair value at grant date (\u00a3)
2.09
3.45
11.11
7.70
4.13
14.79
\n304
Prudential plc
Annual Report 2022
prudentialplc.com
The compensation costs for all awards and options are recognised in net income over the plans\u2019 respective vesting periods. The Group uses the
\nBlack-Scholes model to value all options, and \ufb01nancial equivalence to value all awards other than those which have TSR performance conditions
\nattached (some Prudential LTIP and RSP awards) for which the Group uses a Monte Carlo model in order to allow for the impact of these
\nconditions. These models are used to calculate fair values for share options and awards at the grant date based on the quoted market price of the
\nstock at the measurement date, the amount, if any, that the employees are required to pay, the dividend yield, expected volatility, risk-free interest
\nrates and exercise prices.
\nFor all options and awards, the expected volatility is based on the market implied volatilities as quoted on Bloomberg. The Prudential speci\ufb01c
\nat-the-money implied volatilities are adjusted to allow for the di\ufb00erent terms and discounted exercise price on SAYE options by using information
\non the volatility surface of the FTSE 100.
\nRisk-free interest rates are taken from swap spot rates with projection terms matching the corresponding vesting periods. For awards with a TSR
\ncondition, volatilities and correlations between Prudential and a basket of 12 competitor companies is required. For grants in 2022, the average
\nvolatility for the basket of competitors was 26.46 per cent (2021: 23.62 per cent). Correlations for the basket are calculated for each pairing from
\nthe log of daily TSR returns for the three years prior to the valuation date. Market implied volatilities are used for both Prudential and the basket of
\ncompetitors. Changes to the subjective input assumptions could materially a\ufb00ect the fair value estimate.
\nOther awards, without market performance conditions or exercise price, are valued based on grant date share price.
\n(d) Share-based payment expense charged to the income statement
\nThe total expense recognised in 2022 in the consolidated \ufb01nancial statements relating to share-based compensation is $104 million (2021:
\n$100 million), of which $97 million (2021: $94 million) is accounted for as equity-settled.
\nThe Group had $27 million of liabilities at 31 December 2022 (31 December 2021: $32 million) relating to share-based payment awards
\naccounted for as cash-settled.
\nB2.3
Key management remuneration
\nKey management constitutes the Directors of Prudential plc and other non-Director members of the GEC, as they have authority and
\nresponsibility for planning, directing and controlling the activities of the Group.
\nTotal key management remuneration is analysed in the following table:
\n2022
$m
2021
$m
\nSalaries and short-term bene\ufb01ts
22.5
29.3
\nPost-employment bene\ufb01ts
1.0
1.4
\nShare-based payments
15.4
14.0
\nPayments on separation
1.0
23.5
\n39.9
68.2
\nThe share-based payments charge comprises $6.7 million (2021: $7.5 million), which is determined in accordance with IFRS 2 \u2018Share-based
\nPayment\u2019 (see note B2.2) and $8.7 million (2021: $6.5 million) of deferred share awards.
\nAdditional details on the Directors\u2019 emoluments, retirement bene\ufb01ts and other payments are given in the Directors\u2019 remuneration report. In
\naddition to the total amounts disclosed of remuneration paid to the Directors in 2021, are amounts paid to those directors who stepped down
\nfrom the Board in 2021 being $102,000 to Kai Nargolwala and $203,000 to Fields Wicker-Miurin. This is as disclosed in the 2021 Annual Report.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfEmployeeBenefitsExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f35881": {
"value": "B2.1 Sta\ufb00 and employment costs
\nThe average number of sta\ufb00 employed by the Group during the years shown was:
\n2022
2021
\nAsia and Africa operations
\nnote (i)
\n13,685
13,237
\nHead o\ufb03ce function
511
600
\nTotal continuing operations
14,196
13,837
\nDiscontinued US operations
\nnote (ii)
\n\u2013
3,306
\nTotal Group
14,196
17,143
\nNotes
\n(i)
The Asia and Africa operations sta\ufb00 numbers above exclude 744 (2021: 440) commission-based sales sta\ufb00 who have an employment contract with the Group.
\n(ii)
Average sta\ufb00 numbers of the discontinued US operations were for the period up to the demerger in September 2021.
\nThe costs of employment were:
\n2022
$m
2021
$m
\nGroup total
Continuing
\nDiscontinued
\nUS operations
Group total
\nWages and salaries
1,018
973
511
1,484
\nSocial security costs
41
42
22
64
\nDe\ufb01ned contribution schemes
40
42
29
71
\nTotal Group
1,099
1,057
562
1,619",
"dimensions": {
"concept": "ifrs-full:DisclosureOfInformationAboutEmployeesExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f35942": {
"value": "B2.2 Share-based payment
\nThe Company o\ufb00ers discretionary share awards to certain key employees and all-employee share plans in the UK and a number of Asia locations.
\nThe compensation expense charged to the income statement is primarily based upon the fair value of the awards granted, the vesting period and
\nthe vesting conditions. The Company has established trusts to facilitate the delivery of Prudential plc shares under some of these plans. The cost
\nto the Company of acquiring these newly issued shares held in trusts is shown as a deduction from shareholders\u2019 equity.
\n(a) Description of the plans
\nThe Group operates a number of share award plans that provides Prudential plc shares, or ADRs, to participants upon vesting. The plans in
\noperation include the Prudential Long Term Incentive Plan, the Prudential Annual Incentive Plan, savings-related share option schemes, share
\npurchase plans and deferred bonus plans. Where Executive Directors participate in these plans, details about those schemes are provided in the
\nDirectors\u2019 remuneration report. The following information is provided about plans in which the Executive Directors do not participate:
\nShare scheme
\nnote
\nDescription
\nPrudential Asia and Africa (PAA)
\nLong-Term Incentive Plan (PAA LTIP)
\nThe PAA LTIP provides eligible employees with conditional awards. Awards are discretionary and
\nvest after one, two or three years subject to the employee being in employment. Vesting of
\nawards may also be subject to performance conditions. All awards are generally made in
\nPrudential shares. In countries where share awards are not feasible for reasons including
\nsecurities and/or tax considerations, awards will be replaced by the cash value of the shares that
\nwould otherwise have vested.
\nPrudential Agency Long-Term Incentive
\nPlan (LTIP)
\nCertain agents are eligible to be granted awards in Prudential shares under the Prudential
\nAgency LTIP. These awards are structured in a similar way to the PAA LTIP described above with
\nmost awards granted with a three-year vesting period.
\nRestricted Share Plan (RSP)
The Company operates the RSP for certain employees. Awards under this plan are discretionary,
\nand the vesting of awards may be subject to performance conditions. All awards are made in
\nPrudential shares.
\nDeferred bonus plans
The Company operates a number of deferred bonus plans including the Group Deferred Bonus
\nPlan (GDBP) and the Prudential Deferred Bonus Plan. There are no performance conditions
\nattached to deferred share awards made under these arrangements.
\nSavings-related share option schemes
Eligible agents in certain business units are able to participate in the International Savings-
\nRelated Share Option Scheme for Non-Employees, which is similar to the HMRC-approved Save
\nAs You Earn (SAYE) share option scheme in the UK.
\nShare purchase plans
Eligible employees outside the UK are invited to participate in arrangements similar to the
\nCompany\u2019s HMRC-approved UK Share Incentive Plan, which allows the purchase of
\nPrudential plc shares. Sta\ufb00 based in Asia and Africa are eligible to participate in the Prudential
\nAll Employee Share Purchase Plan.
\nNote
\nThe total numbers of securities available for issue under these schemes are disclosed in note I(vii) within additional unaudited \ufb01nancial information.
\n303
Prudential plc
Annual Report 2022
\nGroup overview
Strategic report
Governance
Directors\u2019 remuneration report
European Embedded Value (EEV) basis results
Additional information
Financial statements
B Earnings performance
/ continued
\nB2 Acquisition costs and other expenditure
continued
\n(b) Outstanding options and awards
\nThe following table shows the movement in outstanding options and awards under the Group\u2019s share-based compensation plans:
\nOptions outstanding under SAYE schemes
\nAwards outstanding under
\nincentive plans
\n2022
2021
2022
2021
\nNumber
\nof options
\nmillions
\nWeighted
\naverage
\nexercise
\nprice
\n\u00a3
\nNumber
\nof options
\nmillions
\nWeighted
\naverage
\nexercise
\nprice
\n\u00a3
\nNumber of awards
\nmillions
\nBalance at beginning of year:
2.0
11.61
2.3
11.86
24.6
40.6
\nGranted
0.5
7.37
0.4
11.90
6.5
5.2
\nModi\ufb01cation
\u2013
\u2013
0.1
11.77
\u2013
0.7
\nExercised
(0.3)
11.17
(0.7)
12.58
(7.2)
(8.6)
\nForfeited
\u2013
10.84
\u2013
11.11
(1.1)
(3.1)
\nCancelled
(0.3)
12.67
(0.1)
11.51
(0.1)
(0.1)
\nLapsed/Expired
\u2013
13.00
\u2013
12.88
(1.7)
(0.6)
\nJackson awards derecognised on demerger
\nnote
\n\u2013
\u2013
\u2013
\u2013
\u2013
(9.5)
\nBalance at end of year
1.9
10.43
2.0
11.61
21.0
24.6
\nOptions immediately exercisable at end of year
0.3
12.48
0.2
12.26
\nNote
\nOn demerger of Jackson from the Prudential Group, outstanding share awards for Prudential plc participants were adjusted to receive the demerger dividend in the form of additional Prudential plc
\nshares, to be released on the same timetable and to the same extent as their original share awards. In the case of the International Savings-Related Share Option Scheme for Non Employees the
\nadjustments to outstanding options were con\ufb01rmed as being fair and reasonable by an independent \ufb01nancial adviser in accordance with the rules of that plan and the Hong Kong Stock Exchange
\nListing Rules. Employees of Jackson were granted replacement awards over Jackson shares, in exchange for existing Group awards outstanding under incentive plans. As designated replacement awards
\nwere granted, no cancellation was recognised in respect of the original awards. As the replacement awards are an obligation of Jackson these awards were derecognised by the Group on demerger.
\nThe weighted average share price of Prudential plc for 2022 was \u00a310.33 (2021: \u00a314.31).
\nThe following table provides a summary of the range of exercise prices for Prudential plc options outstanding at 31 December:
\nOutstanding
Exercisable
\nNumber outstanding
\nmillions
\nWeighted average
\nremaining
\ncontractual life
\nyears
\nWeighted average
\nexercise prices
\n\u00a3
\nNumber exercisable
\nmillions
\nWeighted average
\nexercise prices
\n\u00a3
\n2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
\nBetween \u00a37 and \u00a38
0.5
\u2013
4.1
\u2013
7.37
\u2013
\u2013
\u2013
\u2013
\u2013
\nBetween \u00a39 and \u00a310
0.4
0.4
2.2
3.2
9.64
9.64
\u2013
\u2013
\u2013
\u2013
\nBetween \u00a311 and \u00a312
0.8
1.2
2.4
2.7
11.48
11.38
0.2
0.1
11.12
11.04
\nBetween \u00a313 and \u00a314
0.1
0.2
1.4
1.6
13.94
13.94
\u2013
0.1
\u2013
13.94
\nBetween \u00a314 and \u00a315
0.1
0.2
0.4
1.4
14.55
14.55
0.1
\u2013
14.55
\u2013
\nTotal
1.9
2.0
2.6
2.6
10.43
11.61
0.3
0.2
12.48
12.26
\nThe years shown above for weighted average remaining contractual life include the time period from end of vesting period to expiration of
\ncontract.
\n(c) Fair value of options and awards
\nThe fair value amounts estimated on the date of grant relating to all options and awards were determined by using the following assumptions:
\n2022
2021
\nPrudential
\nLTIP (TSR)
\nSAYE
\noptions
\nOther
\nawards
\nPrudential
\nLTIP (TSR)
\nSAYE
\noptions
\nOther
\nawards
\nDividend yield (%)
\u2013
1.11
\u2013
\u2013
0.81
\u2013
\nExpected volatility (%)
33.64
25.68
\u2013
26.69
22.31
\u2013
\nRisk-free interest rate (%)
2.79
3.97
\u2013
0.36
1.18
\u2013
\nExpected option life (years)
\u2013
4.52
\u2013
\u2013
4.50
\u2013
\nWeighted average exercise price (\u00a3)
\u2013
7.37
\u2013
\u2013
11.90
\u2013
\nWeighted average share price at grant date (\u00a3)
11.15
9.54
\u2013
15.11
14.76
\u2013
\nWeighted average fair value at grant date (\u00a3)
2.09
3.45
11.11
7.70
4.13
14.79
\n304
Prudential plc
Annual Report 2022
prudentialplc.com
The compensation costs for all awards and options are recognised in net income over the plans\u2019 respective vesting periods. The Group uses the
\nBlack-Scholes model to value all options, and \ufb01nancial equivalence to value all awards other than those which have TSR performance conditions
\nattached (some Prudential LTIP and RSP awards) for which the Group uses a Monte Carlo model in order to allow for the impact of these
\nconditions. These models are used to calculate fair values for share options and awards at the grant date based on the quoted market price of the
\nstock at the measurement date, the amount, if any, that the employees are required to pay, the dividend yield, expected volatility, risk-free interest
\nrates and exercise prices.
\nFor all options and awards, the expected volatility is based on the market implied volatilities as quoted on Bloomberg. The Prudential speci\ufb01c
\nat-the-money implied volatilities are adjusted to allow for the di\ufb00erent terms and discounted exercise price on SAYE options by using information
\non the volatility surface of the FTSE 100.
\nRisk-free interest rates are taken from swap spot rates with projection terms matching the corresponding vesting periods. For awards with a TSR
\ncondition, volatilities and correlations between Prudential and a basket of 12 competitor companies is required. For grants in 2022, the average
\nvolatility for the basket of competitors was 26.46 per cent (2021: 23.62 per cent). Correlations for the basket are calculated for each pairing from
\nthe log of daily TSR returns for the three years prior to the valuation date. Market implied volatilities are used for both Prudential and the basket of
\ncompetitors. Changes to the subjective input assumptions could materially a\ufb00ect the fair value estimate.
\nOther awards, without market performance conditions or exercise price, are valued based on grant date share price.
\n(d) Share-based payment expense charged to the income statement
\nThe total expense recognised in 2022 in the consolidated \ufb01nancial statements relating to share-based compensation is $104 million (2021:
\n$100 million), of which $97 million (2021: $94 million) is accounted for as equity-settled.
\nThe Group had $27 million of liabilities at 31 December 2022 (31 December 2021: $32 million) relating to share-based payment awards
\naccounted for as cash-settled.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfSharebasedPaymentArrangementsExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f35946": {
"value": "The Company o\ufb00ers discretionary share awards to certain key employees and all-employee share plans in the UK and a number of Asia locations. The compensation expense charged to the income statement is primarily based upon the fair value of the awards granted, the vesting period and
\nthe vesting conditions. The Company has established trusts to facilitate the delivery of Prudential plc shares under some of these plans. The cost
\nto the Company of acquiring these newly issued shares held in trusts is shown as a deduction from shareholders\u2019 equity. ",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForSharebasedPaymentTransactionsExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f36328": {
"value": "B2.3 Key management remuneration
\nKey management constitutes the Directors of Prudential plc and other non-Director members of the GEC, as they have authority and
\nresponsibility for planning, directing and controlling the activities of the Group.
\nTotal key management remuneration is analysed in the following table:
\n2022
$m
2021
$m
\nSalaries and short-term bene\ufb01ts
22.5
29.3
\nPost-employment bene\ufb01ts
1.0
1.4
\nShare-based payments
15.4
14.0
\nPayments on separation
1.0
23.5
\n39.9
68.2
\nThe share-based payments charge comprises $6.7 million (2021: $7.5 million), which is determined in accordance with IFRS 2 \u2018Share-based
\nPayment\u2019 (see note B2.2) and $8.7 million (2021: $6.5 million) of deferred share awards.
\nAdditional details on the Directors\u2019 emoluments, retirement bene\ufb01ts and other payments are given in the Directors\u2019 remuneration report. In
\naddition to the total amounts disclosed of remuneration paid to the Directors in 2021, are amounts paid to those directors who stepped down
from the Board in 2021 being $102,000 to Kai Nargolwala and $203,000 to Fields Wicker-Miurin. This is as disclosed in the 2021 Annual Report.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfInformationAboutKeyManagementPersonnelExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f36329": {
"value": "B2.3Key management remuneration
\nKey management constitutes the Directors of Prudential plc and other non-Director members of the GEC, as they have authority and
\nresponsibility for planning, directing and controlling the activities of the Group.
\nTotal key management remuneration is analysed in the following table:
\n2022
$m
2021
$m
\nSalaries and short-term bene\ufb01ts
22.5
29.3
\nPost-employment bene\ufb01ts
1.0
1.4
\nShare-based payments
15.4
14.0
\nPayments on separation
1.0
23.5
\n39.9
68.2
\nThe share-based payments charge comprises $6.7 million (2021: $7.5 million), which is determined in accordance with IFRS 2 \u2018Share-based
\nPayment\u2019 (see note B2.2) and $8.7 million (2021: $6.5 million) of deferred share awards.
\nAdditional details on the Directors\u2019 emoluments, retirement bene\ufb01ts and other payments are given in the Directors\u2019 remuneration report. In
\naddition to the total amounts disclosed of remuneration paid to the Directors in 2021, are amounts paid to those directors who stepped down
from the Board in 2021 being $102,000 to Kai Nargolwala and $203,000 to Fields Wicker-Miurin. This is as disclosed in the 2021 Annual Report. D4 Related party transactions Transactions between the Company and its subsidiaries or intra-group transactions are eliminated on consolidation. Intra-group transactions of
\nthe Group mainly related to a limited number of loans, guarantees or services provided by the Company to or from others business units, or
\nbetween business units, including investment management services provided by the Group\u2019s asset managers to the insurance operations
\nbusinesses as shown in note B1.3. All intra-group transactions are subject to the same internal approval framework as external transactions. As the
\nGroup\u2019s business units operate independently, overall there is limited interconnectedness across the Group. The Group reviews its recovery plan
\n(that also covers intra-group transactions and the level of the Group\u2019s interconnectivity risk) on an annual basis and details the remedial actions
\nthat could be used to restore \ufb01nancial strength and viability if the Group were to come under severe stress.
\nThe Company has transactions and outstanding balances with collective investment schemes and similar entities that are not consolidated
\nand where a Group company acts as manager, which are regarded as related parties for the purposes of IAS 24. The balances are included in the
\nGroup\u2019s statement of \ufb01nancial position at fair value or amortised cost in accordance with IAS 39 classi\ufb01cations with the corresponding amounts
\nincluded in the income statement. The transactions include amounts paid on issue of shares or units, amounts received on cancellation of shares
\nor units and amounts paid in respect of the periodic charge and administration fee.
\nIn addition, there are no material transactions between the Group\u2019s joint ventures and associates, which are accounted for on an equity method
\nbasis, and other Group companies.
\nKey management personnel of the Company, as described in note B2.3, may from time to time purchase insurance, asset management or
\nannuity products marketed by Group companies in the ordinary course of business on substantially the same terms as those prevailing at the time
\nfor comparable transactions with other persons.
\nIn 2022, transactions with key management personnel were not deemed to be signi\ufb01cant both by virtue of their size and in the context of the
\nindividuals\u2019 \ufb01nancial positions. All of these transactions were on terms broadly equivalent to those that prevailed in arm\u2019s-length transactions.
\nOn 5 April 2021, pursuant to a separation agreement, Jackson National Life agreed to pay circa $23.5 million to Michael Falcon, the former
\nchief executive o\ufb03cer of Jackson, as a series of cash lump sum payments for termination of loss of o\ufb03ce, and agreed that Mr Falcon would retain
\n98,311 Prudential ADRs that had been previously deferred under the Deferred Annual Incentive Plan. Prudential agreed to reimburse Jackson
\nNational Life for such payments and settled this obligation prior to the demerger on 13 September 2021. On completion of the demerger, the
\nPrudential ADRs were translated into Jackson Shares with an equivalent value. They will be released on the original timeline, ie in 2022 and 2023,
\nand remain subject to the original malus and clawback provisions. Other transactions with those individuals meeting the de\ufb01nition of key
\nmanagement personnel in 2021 were not deemed to be signi\ufb01cant using the criteria described above.
\nAdditional details on the Directors\u2019 interests in shares, transactions or arrangements are given in the Directors\u2019 remuneration report. Key
\nmanagement remuneration is disclosed in note B2.3.
\nD5 Commitments
\nThe Group has provided, from time to time, certain commitments to third parties.
\nAt 31 December 2022, the Group had $2,626 million unfunded commitments (31 December 2021: $2,878 million) primarily related to
investments in infrastructure funds and alternative investment funds in Asia. ",
"dimensions": {
"concept": "ifrs-full:DisclosureOfRelatedPartyExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f36363": {
"value": "B2.4 Fees payable to the auditor
\n2022
$m
2021
$m
\nAudit of the Company\u2019s annual accounts
2.3
2.4
\nAudit of subsidiaries pursuant to legislation
4.4
5.9
\nAudit fees payable to the auditor
6.7
8.3
\nAudit-related assurance services
\nnote (i)
\n3.5
4.5
\nOther assurance services
0.7
1.1
\nServices relating to corporate \ufb01nance transactions
\u2013
1.6
\nNon-audit fees payable to the auditor
4.2
7.2
\nTotal fees payable to the auditor
10.9
15.5
\nAnalysed into:
\nFees payable to the auditor attributable to continuing operations:
\nOne-o\ufb00 non-audit services associated with demerger and public o\ufb00ering
\nnote (ii)
\n\u2013
1.9
\nOther audit and non-audit services
10.9
11.3
\n10.9
13.2
\nFees payable to the auditor attributable to discontinued US operations
\u2013
2.3
\n10.9
15.5
\nNotes
\n(i)
Of the audit-related assurance service fees of $3.5 million in 2022 (2021: $4.5 million), $0.9 million (2021: $0.6 million) relates to services that are required by law and regulation.
\n(ii)
Of the $1.9 million one-o\ufb00 non-audit services fees associated with the demerger of the US operations and the public o\ufb00ering in Hong Kong in 2021, $0.1 million was for audit-related assurance
\nand $0.1 million for other assurance services required by law and regulation.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfAuditorsRemunerationExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f36442": {
"value": "B3 Tax charge Prudential is subject to tax in numerous jurisdictions and the calculation of the total tax charge inherently involves a degree of estimation and
\njudgement. Current tax expense is charged or credited based upon amounts estimated to be payable or recoverable as a result of taxable amounts
\nfor the current year and adjustments made in relation to prior years. The positions taken in tax returns where applicable tax regulation is subject to
\ninterpretation are recognised in full in the determination of the tax charge in the consolidated \ufb01nancial statements if the Group considers that it is
\nprobable that the taxation authority will accept those positions. Otherwise, provisions are established based on the likely amount of the liability, or
\nrecovery, by providing for the single best estimate of the most likely outcome or the weighted average expected value where there are multiple
\noutcomes.
\nThe total tax charge includes tax expense attributable to both policyholders and shareholders. The tax expense attributable to policyholders
\ncomprises the tax on the income of the consolidated with-pro\ufb01ts and unit-linked funds. In certain jurisdictions, life insurance companies are taxed
\non both their shareholders\u2019 pro\ufb01ts and on their policyholders\u2019 insurance and investment returns on certain insurance and investment products.
\nAlthough both types of tax are included in the total tax charge in the Group\u2019s Consolidated income statement, they are presented separately in the
\nConsolidated income statement to provide the most relevant information about tax that the Group pays on its pro\ufb01ts.
\nDeferred taxes are provided under the liability method for all relevant temporary di\ufb00erences. IAS 12 \u2018Income Taxes\u2019 does not require all
\ntemporary di\ufb00erences to be provided for, in particular, the Group does not provide for deferred tax on undistributed earnings of subsidiaries where
\nthe Group is able to control the timing of the distribution and the temporary di\ufb00erence created is not expected to reverse in the foreseeable future.
\nDeferred tax assets are only recognised when it is more likely than not that future taxable pro\ufb01ts will be available against which these losses can be
\nutilised.
\nDeferred tax is measured at the tax rates that are expected to apply to the period when the asset is realised or the liability settled, based on tax
\nrates (and laws) that have been enacted or are substantively enacted at the end of the reporting period.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForIncomeTaxExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f36443": {
"value": "B3 Tax chargePrudential is subject to tax in numerous jurisdictions and the calculation of the total tax charge inherently involves a degree of estimation and
\njudgement. Current tax expense is charged or credited based upon amounts estimated to be payable or recoverable as a result of taxable amounts
\nfor the current year and adjustments made in relation to prior years. The positions taken in tax returns where applicable tax regulation is subject to
\ninterpretation are recognised in full in the determination of the tax charge in the consolidated \ufb01nancial statements if the Group considers that it is
\nprobable that the taxation authority will accept those positions. Otherwise, provisions are established based on the likely amount of the liability, or
\nrecovery, by providing for the single best estimate of the most likely outcome or the weighted average expected value where there are multiple
\noutcomes.
\nThe total tax charge includes tax expense attributable to both policyholders and shareholders. The tax expense attributable to policyholders
\ncomprises the tax on the income of the consolidated with-pro\ufb01ts and unit-linked funds. In certain jurisdictions, life insurance companies are taxed
\non both their shareholders\u2019 pro\ufb01ts and on their policyholders\u2019 insurance and investment returns on certain insurance and investment products.
\nAlthough both types of tax are included in the total tax charge in the Group\u2019s Consolidated income statement, they are presented separately in the
\nConsolidated income statement to provide the most relevant information about tax that the Group pays on its pro\ufb01ts.
\nDeferred taxes are provided under the liability method for all relevant temporary di\ufb00erences. IAS 12 \u2018Income Taxes\u2019 does not require all
\ntemporary di\ufb00erences to be provided for, in particular, the Group does not provide for deferred tax on undistributed earnings of subsidiaries where
\nthe Group is able to control the timing of the distribution and the temporary di\ufb00erence created is not expected to reverse in the foreseeable future.
\nDeferred tax assets are only recognised when it is more likely than not that future taxable pro\ufb01ts will be available against which these losses can be
\nutilised.
\nDeferred tax is measured at the tax rates that are expected to apply to the period when the asset is realised or the liability settled, based on tax
\nrates (and laws) that have been enacted or are substantively enacted at the end of the reporting period.
\nB3.1
Total tax charge by nature
\nThe total tax charge in the income statement is as follows:
\n2022
$m
2021
$m
\nAttributable to shareholders:
\nHong Kong
(52)
(40)
\nIndonesia
(60)
(74)
\nMalaysia
(90)
(71)
\nSingapore
(78)
(67)
\nGrowth markets and other
(144)
(159)
\nEastspring
(26)
(30)
\nTotal segment
(450)
(441)
\nUnallocated to a segment (central operations)
(4)
(21)
\nTax charge attributable to shareholders
(454)
(462)
\nAttributable to policyholders:
\nHong Kong
(56)
(79)
\nIndonesia
(5)
4
\nMalaysia
\u2013
(2)
\nSingapore
44
(261)
\nGrowth markets and other
(4)
(4)
\nTax charge attributable to policyholders
(21)
(342)
\nTotal tax charge
(475)
(804)
\nPro\ufb01t before tax includes Prudential\u2019s share of pro\ufb01t after tax from the joint ventures and associates that are equity-accounted for. Therefore, the
\nactual tax charge in the income statement does not include tax arising from the results of joint ventures and associates including CPL.
\nThe reconciliation of the expected to actual tax charge attributable to shareholders is provided in B3.2 below. The tax charge attributable to
\npolicyholders of $(21) million (2021: $(342) million) above is equal to the pro\ufb01t before tax attributable to policyholders as a result of accounting
\nfor policyholder income after the deduction of expenses and movement in unallocated surpluses on a post-tax basis. The reduction in the tax
\ncharge attributable to policyholders results from the deferred tax impact of policyholder liability movements caused by adverse market
\nmovements in 2022, primarily in Singapore.
The total tax charge comprises:
\n2022
$m
2021
$m
\nCurrent tax expense:
\nCorporation tax
(474)
(405)
\nAdjustments in respect of prior years
(7)
6
\nTotal current tax charge
(481)
(399)
\nDeferred tax arising from:
\nOrigination and reversal of temporary di\ufb00erences
4
(388)
\nAdjustment in respect of a tax loss, tax credit or temporary di\ufb00erence from a prior year
2
(17)
\nTotal deferred tax credit (charge)
6
(405)
\nTotal tax charge
(475)
(804)
\nB3.2
Reconciliation of shareholder e\ufb00ective tax rate
\nIn the reconciliation below, the expected tax rate re\ufb02ects the corporation tax rates that are expected to apply to the taxable pro\ufb01t or loss for the
\nperiod. It re\ufb02ects the corporation tax rates of each jurisdiction weighted by reference to the amount of pro\ufb01t or loss contributing to the aggregate
\nresult.
\n2022
2021
\nTax
\nattributable to
\nshareholders
\n$m
\nPercentage
\nimpact
\non ETR
\n%
\nTax
\nattributable to
\nshareholders
\n$m
\nPercentage
\nimpact
\non ETR
\n%
\nAdjusted operating pro\ufb01t
3,375
3,233
\nNon-operating result
\nnote (i)
\n(1,914)
(557)
\nPro\ufb01t before tax
1,461
2,676
\nTax charge at the expected rate
(287)
20%
(539)
20%
\nE\ufb00ects of recurring tax reconciliation items:
\nIncome not taxable or taxable at concessionary rates
\nnote (ii)
\n61
(4)%
63
(2)%
\nDeductions and losses not allowable for tax purposes
\nnote (iii)
\n(196)
13%
(92)
3%
\nItems related to taxation of life insurance businesses
\nnote (iv)
\n108
(7)%
177
(7)%
\nDeferred tax adjustments including unrecognised tax losses
\nnote (v)
\n(45)
3%
(111)
4%
\nE\ufb00ect of results of joint ventures and associates
\nnote (vi)
\n3
0%
80
(3)%
\nIrrecoverable withholding taxes
\nnote (vii)
\n(55)
4%
(60)
2%
\nOther
(15)
0%
(8)
1%
\nTotal (charge) credit on recurring items
(139)
9%
49
(2)%
\nE\ufb00ects of non-recurring tax reconciliation items:
\nAdjustments to tax charge in relation to prior years
1
0%
(11)
0%
\nMovements in provisions for open tax matters
\nnote (viii)
\n(40)
3%
47
(2)%
\nImpact of changes in local statutory tax rates
\u2013
0%
6
0%
\nAdjustments in relation to business disposals and corporate transactions
11
(1)%
(14)
1%
\nTotal (charge) credit on non-recurring items
(28)
2%
28
(1)%
\nTotal actual tax charge
(454)
31%
(462)
17%
\nAnalysed into:
\nTax charge on adjusted operating pro\ufb01t
(614)
(548)
\nTax credit on non-operating result
\nnote (i)
\n160
86
\nActual tax rate on:
\nAdjusted operating pro\ufb01t:
\nIncluding non-recurring tax reconciling items
\nnote (ix)
\n18%
17%
\nExcluding non-recurring tax reconciling items
17%
18%
\nTotal pro\ufb01t
\nnote (ix)
\n31%
17%
Notes
\n(i)
\u2018Non-operating result\u2019 is used to refer to items excluded from adjusted operating pro\ufb01t and includes short-term investment \ufb02uctuations in investment returns on shareholder-backed business,
\ncorporate transactions and amortisation of acquisition accounting adjustments. The tax charge on non-operating result is calculated using the tax rates applicable to investment pro\ufb01t or loss
\nrecorded in the non-operating result for each entity, and then adjusting for any discrete items included in the total tax charge that relate speci\ufb01cally to the amounts (other than investment
\nrelated pro\ufb01t or loss) included in the non-operating result. The di\ufb00erence between this tax on non-operating result and the tax charge calculated on pro\ufb01t before tax is the tax charge on adjusted
\noperating pro\ufb01t.
\n(ii)
Income not taxable or taxable at concessionary rates primarily relates to non-taxable investment income in Malaysia and Singapore.
\n(iii)
Deductions and losses not allowable for tax purposes primarily relates to non-deductible investment losses in Growth markets.
\n(iv)
Items related to taxation of life insurance businesses primarily relates to Hong Kong where the taxable pro\ufb01t is computed as 5 per cent of net insurance premiums.
\n(v)
The unrecognised tax losses reconciling amount re\ufb02ects losses arising where it is unlikely that relief for the losses will be available in future years.
\n(vi)
Pro\ufb01t before tax includes Prudential\u2019s share of pro\ufb01t after tax from the joint ventures and associates. Therefore, the actual tax charge does not include tax arising from pro\ufb01t or loss of joint
\nventures and associates and is re\ufb02ected as a reconciling item.
\n(vii)
The Group incurs withholding tax on remittances received from certain jurisdictions and on certain investment income. Where these withholding taxes cannot be o\ufb00set against corporate income
\ntax or otherwise recovered, they represent a cost to the Group. Irrecoverable withholding tax on remittances is included in Other operations and is not allocated to any segment. Irrecoverable
\nwithholding tax on investment income is included in the relevant segment where the investment income is re\ufb02ected.
\n(viii)
The statement of \ufb01nancial position contains the following provisions in relation to open tax matters:
\n2022
$m
\nBalance at 1 Jan
(42)
\nMovements in the current year included in tax charge attributable to shareholders
(40)
\nOther movements (including interest arising on open tax matters and amounts included in the Group\u2019s share of pro\ufb01ts from joint
\nventures and associates, net of related tax)
3
\nBalance at 31 Dec
(79)
\n(ix)
The actual tax rates of the relevant business operations are shown below:
\n2022
%
\nHong
\nKong
Indonesia
Malaysia
Singapore
\nGrowth
\nmarkets
\nand other
Eastspring
\nOther
\noperations
\nTotal
\nattributable
\nto
\nshareholders
\nTax rate on adjusted operating pro\ufb01t
6%
20%
26%
16%
24%
10%
(1)%
18%
\nTax rate on pro\ufb01t before tax
(33)%
20%
26%
16%
14%
10%
(1)%
31%
\n2021
%
\nHong
\nKong
Indonesia
Malaysia
Singapore
\nGrowth
\nmarkets
\nand other
Eastspring
\nOther
\noperations
\nTotal
\nattributable
\nto
\nshareholders
\nTax rate on adjusted operating pro\ufb01t
5%
17%
21%
15%
22%
10%
(3)%
17%
\nTax rate on pro\ufb01t before tax
4%
17%
21%
15%
27%
10%
(2)%
17%
C7.1
Current tax
\nAt 31 December 2022, of the $18 million (31 December 2021: $20 million) current tax recoverable, the majority is expected to be recovered within
\n12 months after the reporting period.
\nAt 31 December 2022, the current tax liability from operations of $208 million (31 December 2021: $185 million) includes $79 million
\n(31 December 2021: $42 million) of provisions for uncertain tax matters. Further detail is provided in note B3.2.
\nC7.2
Deferred tax
\nThe statement of \ufb01nancial position contains the following deferred tax assets and liabilities in relation to:
\n2022
$m
\nBalance
\nat 1 Jan
\nMovement in
\nincome
\nstatement
\nOther
\nmovements
\nincluding
\nforeign
\nexchange
\nmovements
\nBalance
\nat 31 Dec
\nDeferred tax assets
\nUnrealised losses or gains on investments
3
317
(178)
142
\nBalances relating to investment and insurance contracts
34
1
(33)
2
\nShort-term temporary di\ufb00erences
162
(15)
(12)
135
\nUnused tax losses
67
(32)
(4)
31
\nTotal deferred tax assets
266
271
(227)
310
\nDeferred tax liabilities
\nUnrealised losses or gains on investments
(242)
44
185
(13)
\nBalances relating to investment and insurance contracts
(2,125)
(228)
47
(2,306)
\nShort-term temporary di\ufb00erences
(495)
(81)
23
(553)
\nTotal deferred tax liabilities
(2,862)
(265)
255
(2,872)
\n2021
$m
\nBalance
\nat 1 Jan
\nRemoval of
\ndiscontinued
\nUS operations
\nMovement in
\nincome
\nstatement
\nOther
\nmovements
\nincluding
\nforeign
\nexchange
\nmovements
\nBalance
\nat 31 Dec
\nDeferred tax assets
\nUnrealised losses or gains on investments
\u2013
\u2013
3
\u2013
3
\nBalances relating to investment and insurance contracts
87
\u2013
(16)
(37)
34
\nShort-term temporary di\ufb00erences
4,662
(4,513)
15
(2)
162
\nUnused tax losses
109
(29)
(14)
1
67
\nTotal deferred tax assets
4,858
(4,542)
(12)
(38)
266
\nDeferred tax liabilities
\nUnrealised losses or gains on investments
(1,063)
691
127
3
(242)
\nBalances relating to investment and insurance contracts
(1,765)
\u2013
(433)
73
(2,125)
\nShort-term temporary di\ufb00erences
(3,247)
2,832
(87)
7
(495)
\nTotal deferred tax liabilities
(6,075)
3,523
(393)
83
(2,862)
\nAt 31 December 2022, no deferred tax asset has been recognised in respect of unused tax losses and temporary deductible di\ufb00erences of
\n$2,235 million (31 December 2021: $1,382 million). $837 million of the unused tax losses expired at the point of Prudential plc\u2019s tax residency
\nchange from the UK to Hong Kong on 3 March 2023. A further $103 million (31 December 2021: $108 million) relates to unused tax losses that will
\nexpire within the next ten years (potential tax bene\ufb01t: $22 million), and the remainder of $1,295 million (31 December 2021: $1,274 million) has
\nno expiry date (potential tax bene\ufb01t: $277 million).
\nSome of the Group\u2019s businesses are located in jurisdictions in which a withholding tax charge is incurred upon the distribution of earnings. At
\n31 December 2022, deferred tax liabilities of $216 million (31 December 2021: $330 million) have not been recognised in respect of such
\nwithholding taxes as the Group is able to control the timing of the distributions and it is probable that the timing di\ufb00erences will not reverse in the
\nforeseeable future.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfIncomeTaxExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f36460": {
"value": "Deferred taxes are provided under the liability method for all relevant temporary di\ufb00erences. IAS 12 \u2018Income Taxes\u2019 does not require all temporary di\ufb00erences to be provided for, in particular, the Group does not provide for deferred tax on undistributed earnings of subsidiaries where
\nthe Group is able to control the timing of the distribution and the temporary di\ufb00erence created is not expected to reverse in the foreseeable future.
\nDeferred tax assets are only recognised when it is more likely than not that future taxable pro\ufb01ts will be available against which these losses can be
\nutilised.
\nDeferred tax is measured at the tax rates that are expected to apply to the period when the asset is realised or the liability settled, based on tax
rates (and laws) that have been enacted or are substantively enacted at the end of the reporting period.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForDeferredIncomeTaxExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f36872": {
"value": "B4 Earnings per share 2022
\nBefore
\ntax
\n$m
\nTax
\n$m
\nNon-controlling
\ninterests
\n$m
\nNet of tax
\nand non-
\ncontrolling
\ninterests
\n$m
\nBasic
\nearnings
\nper share
\ncents
\nDiluted
\nearnings
\nper share
\ncents
\nBased on adjusted operating pro\ufb01t
3,375
(614)
(11)
2,750
100.5\u00a2
100.5\u00a2
\nShort-term \ufb02uctuations in investment returns on shareholder-
\nbacked business
(1,915)
155
2
(1,758)
(64.3)\u00a2
(64.3)\u00a2
\nAmortisation of acquisition accounting adjustments
(10)
\u2013
\u2013
(10)
(0.4)\u00a2
(0.4)\u00a2
\nGain attaching to corporate transactions
11
5
\u2013
16
0.7\u00a2
0.7\u00a2
\nBased on pro\ufb01t for the year
1,461
(454)
(9)
998
36.5\u00a2
36.5\u00a2
\n2021
\nBefore
\ntax
\n$m
\nTax
\n$m
\nNon-controlling
\ninterests
\n$m
\nNet of tax
\nand non-
\ncontrolling
\ninterests
\n$m
\nBasic
\nearnings
\nper share
\ncents
\nDiluted
\nearnings
\nper share
\ncents
\nBased on adjusted operating pro\ufb01t
3,233
(548)
(17)
2,668
101.5\u00a2
101.5\u00a2
\nShort-term \ufb02uctuations in investment returns on shareholder-
\nbacked business
(458)
81
(5)
(382)
(14.5)\u00a2
(14.5)\u00a2
\nAmortisation of acquisition accounting adjustments
(5)
\u2013
\u2013
(5)
(0.2)\u00a2
(0.2)\u00a2
\nLoss attaching to corporate transactions
(94)
5
\u2013
(89)
(3.4)\u00a2
(3.4)\u00a2
\nBased on pro\ufb01t for the year
2,676
(462)
(22)
2,192
83.4\u00a2
83.4\u00a2
\nBased on loss from discontinued US operations
\n(4,234)
(161.1)\u00a2
(161.1)\u00a2
\nBased on loss for the year
\n(2,042)
(77.7)\u00a2
(77.7)\u00a2
\nBasic earnings per share are calculated based on earnings attributable to ordinary shareholders, after related tax and non-controlling interests,
\ndivided by the weighted average number of ordinary shares outstanding during the year, excluding those held in employee share trusts, which are
\ntreated as cancelled. For diluted earnings per share, the weighted average number of shares in issue is adjusted to assume conversion of all dilutive
\npotential ordinary shares. The Group\u2019s only class of potentially dilutive ordinary shares are those share options granted to employees where the
\nexercise price is less than the average market price of the ordinary shares during the year. No adjustment is made if the impact is anti-dilutive
\noverall.
\nThe weighted average number of shares for calculating basic and diluted earnings per share, which excludes those held in employee share
\ntrusts, is set out as below:
\nNumber of shares (in millions)
2022
2021
\nWeighted average number of shares for calculation of basic earnings per share
2,736
2,628
\nShares under option at end of year
1
2
\nShares that would have been issued at fair value on assumed option price at end of year
(1)
(2)
\nWeighted average number of shares for calculation of diluted earnings per share
2,736
2,628",
"dimensions": {
"concept": "ifrs-full:DisclosureOfEarningsPerShareExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f37000": {
"value": "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 year, excluding those held in employee share trusts, which are
\ntreated as cancelled. For diluted earnings per share, the weighted average number of shares in issue is adjusted to assume conversion of all dilutive
\npotential ordinary shares. The Group\u2019s only class of potentially dilutive ordinary shares are those share options granted to employees where the
\nexercise price is less than the average market price of the ordinary shares during the year. No adjustment is made if the impact is anti-dilutive
\noverall.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForEarningsPerShareExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f37048": {
"value": "B5 Dividends 2022
2021
\nCents per share
$m
Cents per share
$m
\nDividends relating to reporting year:
\nFirst interim dividend
5.74\u00a2
154
5.37\u00a2
140
\nSecond interim dividend
13.04\u00a2
359
11.86\u00a2
326
\nTotal relating to reporting year
18.78\u00a2
513
17.23\u00a2
466
\nDividends paid in reporting year:
\nCurrent year \ufb01rst interim dividend
5.74\u00a2
154
5.37\u00a2
138
\nSecond interim dividend for prior year
11.86\u00a2
320
10.73\u00a2
283
\nTotal paid in reporting year
17.60\u00a2
474
16.10\u00a2
421
\nFirst and second interim dividends are recorded in the period in which they are paid. In addition to the dividends shown in the table above, on
\n13 September 2021, following approval by the Group\u2019s shareholders, Prudential plc demerged its US operations (Jackson) via a dividend in specie
\nof $1,735 million.
\nDividend per share
\nThe 2022 \ufb01rst interim dividend of 5.74 cents per ordinary share was paid to eligible shareholders on 27 September 2022.
\nOn 15 May 2023, Prudential will pay a second interim dividend of 13.04 cents per ordinary share for the year ended 31 December 2022. The
\nsecond interim dividend will be paid to shareholders included on the UK register at 5.00pm (Greenwich Mean Time) and to shareholders on the HK
\nbranch register at 4.30pm (Hong Kong Time) on 24 March 2023 (Record Date), and also to the Holders of US American Depositary Receipts
\n(ADRs) as at 24 March 2023. The second interim dividend will be paid on or about 22 May 2023 to shareholders with shares standing to the credit
\nof their securities accounts with The Central Depository (Pte) Limited (CDP) at 5.00pm (Singapore Time) on the Record Date.
\nShareholders holding shares on the UK or HK share registers will continue to receive their dividend payments in either GBP or HKD respectively,
\nunless they elect otherwise. Shareholders holding shares on the UK or HK registers may elect to receive dividend payments in USD. Elections must
\nbe made through the relevant UK or HK share registrar on or before 19 April 2023. The corresponding amounts per share in GBP and HKD are
\nexpected to be announced on or about 27 April 2023. The USD to GBP and HKD conversion rates will be determined by the actual rates achieved
\nby Prudential buying those currencies prior to the subsequent announcement.
\nHolders of ADRs will continue to receive their dividend payments in USD. Shareholders holding an interest in Prudential shares through CDP in
\nSingapore will continue to receive their dividend payments in SGD at an exchange rate determined by CDP.
\nShareholders on the UK register are eligible to participate in a Dividend Reinvestment Plan.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfDividendsExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f37064": {
"value": "0.1304",
"decimals": 4,
"dimensions": {
"concept": "ifrs-full:DividendsProposedOrDeclaredBeforeFinancialStatementsAuthorisedForIssueButNotRecognisedAsDistributionToOwnersPerShare",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00",
"unit": "iso4217:USD/xbrli:shares"
}
},
"f37066": {
"value": "359000000",
"decimals": -6,
"dimensions": {
"concept": "ifrs-full:DividendsProposedOrDeclaredBeforeFinancialStatementsAuthorisedForIssueButNotRecognisedAsDistributionToOwners",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00",
"unit": "iso4217:USD"
}
},
"f37068": {
"value": "0.1186",
"decimals": 4,
"dimensions": {
"concept": "ifrs-full:DividendsProposedOrDeclaredBeforeFinancialStatementsAuthorisedForIssueButNotRecognisedAsDistributionToOwnersPerShare",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2021-01-01T00:00:00/2022-01-01T00:00:00",
"unit": "iso4217:USD/xbrli:shares"
}
},
"f37070": {
"value": "326000000",
"decimals": -6,
"dimensions": {
"concept": "ifrs-full:DividendsProposedOrDeclaredBeforeFinancialStatementsAuthorisedForIssueButNotRecognisedAsDistributionToOwners",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2021-01-01T00:00:00/2022-01-01T00:00:00",
"unit": "iso4217:USD"
}
},
"f37089": {
"value": "0.176",
"decimals": 4,
"dimensions": {
"concept": "ifrs-full:DividendsRecognisedAsDistributionsToOwnersPerShare",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00",
"unit": "iso4217:USD/xbrli:shares"
}
},
"f37092": {
"value": "0.161",
"decimals": 4,
"dimensions": {
"concept": "ifrs-full:DividendsRecognisedAsDistributionsToOwnersPerShare",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2021-01-01T00:00:00/2022-01-01T00:00:00",
"unit": "iso4217:USD/xbrli:shares"
}
},
"f37095": {
"value": "interim dividends are recorded in the period in which they are paid.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForDividendsExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f37127": {
"value": "C1 Group assets and liabilities by business type
\nThe analysis below is structured to show the investments and other assets and liabilities of the Group by reference to the di\ufb00ering degrees of
\npolicyholder and shareholder economic interest of the di\ufb00erent types of business.
\nDebt securities are analysed below according to the issuing government for sovereign debt and to credit ratings for the rest of the securities. The
\nGroup uses the middle of the Standard & Poor\u2019s, Moody\u2019s and Fitch ratings, where available. Where ratings are not available from these rating
\nagencies, local external rating agencies\u2019 ratings and lastly internal ratings have been used. Securities with none of the ratings listed above are
\nclassi\ufb01ed as unrated and included under the \u2018below BBB- and unrated\u2019 category. The total securities (excluding sovereign debt) that were unrated
\nat 31 December 2022 were $1,152 million (31 December 2021: $1,130 million). Additionally, government debt is shown separately from the rating
\nbreakdowns in order to provide a more focused view of the credit portfolio.
\nIn the table below, AAA is the highest possible rating. Investment grade \ufb01nancial assets are classi\ufb01ed within the range of AAA to BBB- ratings.
\nFinancial assets which fall outside this range are classi\ufb01ed as below BBB-.
31 Dec 2022
$m
\nAsia and Africa
\nUnallocated
\nto a
\nsegment
\nElimination
\nof
\nintra-group
\ndebtors and
\ncreditors
\nGroup
\ntotal
\nInsurance
\nElimina-
\ntions
Total
\nWith-
\npro\ufb01ts
\nnote (i)
\nUnit-
\nlinked
\nnote (i)
\nOther
\nnote (i)
\nEastspring
\nDebt securities
\nnotes (ii)(iv)
\nSovereign debt
\nIndonesia
482
589
483
3
\u2013
1,557
\u2013
\u2013
1,557
\nSingapore
3,240
507
917
67
\u2013
4,731
\u2013
\u2013
4,731
\nThailand
\u2013
\u2013
1,456
\u2013
\u2013
1,456
\u2013
\u2013
1,456
\nUnited Kingdom
\u2013
4
\u2013
\u2013
\u2013
4
\u2013
\u2013
4
\nUnited States
19,983
54
1,854
\u2013
\u2013
21,891
\u2013
\u2013
21,891
\nVietnam
1
12
2,397
\u2013
\u2013
2,410
\u2013
\u2013
2,410
\nOther (predominantly Asia)
2,041
646
3,288
27
\u2013
6,002
\u2013
\u2013
6,002
\nSubtotal
25,747
1,812
10,395
97
\u2013
38,051
\u2013
\u2013
38,051
\nOther government bonds
\nAAA
1,480
85
108
\u2013
\u2013
1,673
\u2013
\u2013
1,673
\nAA+ to AA-
105
21
27
\u2013
\u2013
153
\u2013
\u2013
153
\nA+ to A-
746
139
248
\u2013
\u2013
1,133
\u2013
\u2013
1,133
\nBBB+ to BBB-
292
77
134
\u2013
\u2013
503
\u2013
\u2013
503
\nBelow BBB- and unrated
227
22
323
\u2013
\u2013
572
\u2013
\u2013
572
\nSubtotal
2,850
344
840
\u2013
\u2013
4,034
\u2013
\u2013
4,034
\nCorporate bonds
\nAAA
996
181
362
\u2013
\u2013
1,539
\u2013
\u2013
1,539
\nAA+ to AA-
1,951
385
1,556
\u2013
\u2013
3,892
\u2013
\u2013
3,892
\nA+ to A-
7,230
524
4,348
\u2013
\u2013
12,102
\u2013
\u2013
12,102
\nBBB+ to BBB-
7,885
1,325
3,974
1
\u2013
13,185
\u2013
\u2013
13,185
\nBelow BBB- and unrated
2,090
444
1,282
\u2013
\u2013
3,816
\u2013
\u2013
3,816
\nSubtotal
20,152
2,859
11,522
1
\u2013
34,534
\u2013
\u2013
34,534
\nAsset-backed securities
\nAAA
168
5
126
\u2013
\u2013
299
\u2013
\u2013
299
\nAA+ to AA-
6
1
3
\u2013
\u2013
10
\u2013
\u2013
10
\nA+ to A-
20
\u2013
14
\u2013
\u2013
34
\u2013
\u2013
34
\nBBB+ to BBB-
14
\u2013
9
\u2013
\u2013
23
\u2013
\u2013
23
\nBelow BBB- and unrated
2
1
1
\u2013
\u2013
4
\u2013
\u2013
4
\nSubtotal
210
7
153
\u2013
\u2013
370
\u2013
\u2013
370
\nTotal debt securities
48,959
5,022
22,910
98
\u2013
76,989
\u2013
\u2013
76,989
\nLoans
\nMortgage loans
\u2013
\u2013
140
\u2013
\u2013
140
\u2013
\u2013
140
\nPolicy loans
1,498
\u2013
422
\u2013
\u2013
1,920
\u2013
\u2013
1,920
\nOther loans
472
\u2013
4
\u2013
\u2013
476
\u2013
\u2013
476
\nTotal loans
1,970
\u2013
566
\u2013
\u2013
2,536
\u2013
\u2013
2,536
\nEquity securities and holdings in collective investment
\nschemes
\nDirect equities
13,063
11,379
2,139
61
\u2013
26,642
266
\u2013
26,908
\nCollective investment schemes
19,057
6,760
4,950
2
\u2013
30,769
2
\u2013
30,771
\nTotal equity securities and holdings in collective investment
\nschemes
32,120
18,139
7,089
63
\u2013
57,411
268
\u2013
57,679
\nOther \ufb01nancial investments
\nnote (iii)
\n1,793
379
2,816
107
\u2013
5,095
1,749
\u2013
6,844
\nTotal \ufb01nancial investments
\nnote (v)
\n84,842
23,540
33,381
268
\u2013
142,031
2,017
\u2013
144,048
\nInvestment properties
\u2013
\u2013
37
\u2013
\u2013
37
\u2013
\u2013
37
\nInvestments in joint ventures and associates accounted for
\nusing the equity method
\u2013
\u2013
1,601
314
\u2013
1,915
\u2013
\u2013
1,915
\nCash and cash equivalents
\nnote (vi)
\n1,038
749
1,791
127
\u2013
3,705
1,809
\u2013
5,514
\nReinsurers\u2019 share of insurance contract liabilities
\nnote C3.3
\n145
\u2013
2,662
\u2013
\u2013
2,807
\u2013
\u2013
2,807
\nOther assets
\nnote (vii)
\n1,156
154
9,665
713
(67)
11,621
3,409
(3,409)
11,621
\nTotal assets
87,181
24,443
49,137
1,422
(67)
162,116
7,235
(3,409)
165,942
\nShareholders\u2019 equity
\u2013
\u2013
14,407
1,058
\u2013
15,465
1,495
\u2013
16,960
\nNon-controlling interests
\u2013
\u2013
43
124
\u2013
167
\u2013
\u2013
167
\nTotal equity
\u2013
\u2013
14,450
1,182
\u2013
15,632
1,495
\u2013
17,127
\nContract liabilities and unallocated surplus of with-pro\ufb01ts
\nfunds
77,687
22,842
25,229
\u2013
\u2013
125,758
\u2013
\u2013
125,758
\nCore structural borrowings
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
4,261
\u2013
4,261
\nOperational borrowings
118
\u2013
86
15
\u2013
219
596
\u2013
815
\nOther liabilities
\nnote (viii)
\n9,376
1,601
9,372
225
(67)
20,507
883
(3,409)
17,981
\nTotal liabilities
87,181
24,443
34,687
240
(67)
146,484
5,740
(3,409)
148,815
\nTotal equity and liabilities
87,181
24,443
49,137
1,422
(67)
162,116
7,235
(3,409)
165,942
31 Dec 2021
$m
\nAsia and Africa
\nUnallocated
\nto a
\nsegment
\nElimination
\nof
\nintra-group
\ndebtors and
\ncreditors
\nGroup
\ntotal
\nInsurance
\nElimina-
\ntions
Total
\nWith-
\npro\ufb01ts
\nnote (i)
\nUnit-
\nlinked
\nnote (i)
\nOther
\nnote (i)
\nEastspring
\nDebt securities
\nnotes (ii)(iv)
\nSovereign debt
\nIndonesia
414
598
609
11
\u2013
1,632
\u2013
\u2013
1,632
\nSingapore
3,684
550
1,068
126
\u2013
5,428
\u2013
\u2013
5,428
\nThailand
\u2013
\u2013
1,577
3
\u2013
1,580
\u2013
\u2013
1,580
\nUnited Kingdom
\u2013
7
\u2013
\u2013
\u2013
7
226
\u2013
233
\nUnited States
28,552
47
3,525
\u2013
\u2013
32,124
\u2013
\u2013
32,124
\nVietnam
\u2013
20
3,022
\u2013
\u2013
3,042
\u2013
\u2013
3,042
\nOther (predominantly Asia)
2,030
720
4,001
21
\u2013
6,772
\u2013
\u2013
6,772
\nSubtotal
34,680
1,942
13,802
161
\u2013
50,585
226
\u2013
50,811
\nOther government bonds
\u2013
\nAAA
1,472
86
246
\u2013
\u2013
1,804
\u2013
\u2013
1,804
\nAA+ to AA-
45
2
12
\u2013
\u2013
59
\u2013
\u2013
59
\nA+ to A-
667
119
304
\u2013
\u2013
1,090
\u2013
\u2013
1,090
\nBBB+ to BBB-
121
16
116
\u2013
\u2013
253
\u2013
\u2013
253
\nBelow BBB- and unrated
204
15
450
\u2013
\u2013
669
\u2013
\u2013
669
\nSubtotal
2,509
238
1,128
\u2013
\u2013
3,875
\u2013
\u2013
3,875
\nCorporate bonds
\u2013
\nAAA
1,222
236
411
\u2013
\u2013
1,869
\u2013
\u2013
1,869
\nAA+ to AA-
2,203
359
1,858
\u2013
\u2013
4,420
\u2013
\u2013
4,420
\nA+ to A-
9,046
675
5,294
\u2013
\u2013
15,015
\u2013
\u2013
15,015
\nBBB+ to BBB-
9,523
1,711
5,105
\u2013
\u2013
16,339
\u2013
\u2013
16,339
\nBelow BBB- and unrated
4,009
678
1,827
\u2013
\u2013
6,514
\u2013
\u2013
6,514
\nSubtotal
26,003
3,659
14,495
\u2013
\u2013
44,157
\u2013
\u2013
44,157
\nAsset-backed securities
\u2013
\nAAA
88
6
74
\u2013
\u2013
168
\u2013
\u2013
168
\nAA+ to AA-
6
1
4
\u2013
\u2013
11
\u2013
\u2013
11
\nA+ to A-
26
\u2013
17
\u2013
\u2013
43
\u2013
\u2013
43
\nBBB+ to BBB-
15
\u2013
9
\u2013
\u2013
24
\u2013
\u2013
24
\nBelow BBB- and unrated
2
2
1
\u2013
\u2013
5
\u2013
\u2013
5
\nSubtotal
137
9
105
\u2013
\u2013
251
\u2013
\u2013
251
\nTotal debt securities
63,329
5,848
29,530
161
\u2013
98,868
226
\u2013
99,094
\nLoans
\u2013
\nMortgage loans
\u2013
\u2013
150
\u2013
\u2013
150
\u2013
\u2013
150
\nPolicy loans
1,365
\u2013
368
\u2013
\u2013
1,733
\u2013
\u2013
1,733
\nOther loans
668
\u2013
11
\u2013
\u2013
679
\u2013
\u2013
679
\nTotal loans
2,033
\u2013
529
\u2013
\u2013
2,562
\u2013
\u2013
2,562
\nEquity securities and holdings in collective investment
\nschemes
\nDirect equities
10,290
12,812
2,286
84
\u2013
25,472
683
\u2013
26,155
\nCollective investment schemes
23,950
7,704
3,787
3
\u2013
35,444
2
\u2013
35,446
\nTotal equity securities and holdings in collective investment
\nschemes
34,240
20,516
6,073
87
\u2013
60,916
685
\u2013
61,601
\nOther \ufb01nancial investments
\nnote (iii)
\n1,561
149
2,318
106
\u2013
4,134
1,088
\u2013
5,222
\nTotal \ufb01nancial investments
\nnote (v)
\n101,163
26,513
38,450
354
\u2013
166,480
1,999
\u2013
168,479
\nInvestment properties
\u2013
\u2013
38
\u2013
\u2013
38
\u2013
\u2013
38
\nInvestments in joint ventures and associates accounted for
\nusing the equity method
\u2013
\u2013
1,878
305
\u2013
2,183
\u2013
\u2013
2,183
\nCash and cash equivalents
\nnote (vi)
\n905
911
1,444
181
\u2013
3,441
3,729
\u2013
7,170
\nReinsurers\u2019 share of insurance contract liabilities
\nnote C3.3
\n225
\u2013
9,528
\u2013
\u2013
9,753
\u2013
\u2013
9,753
\nOther assets
\nnote (vii)
\n1,184
166
9,191
759
(51)
11,249
3,608
(3,378)
11,479
\nTotal assets
103,477
27,590
60,529
1,599
(51)
193,144
9,336
(3,378)
199,102
\nShareholders\u2019 equity
\u2013
\u2013
14,289
1,120
\u2013
15,409
1,679
\u2013
17,088
\nNon-controlling interests
\u2013
\u2013
45
131
\u2013
176
\u2013
\u2013
176
\nTotal equity
\u2013
\u2013
14,334
1,251
\u2013
15,585
1,679
\u2013
17,264
\nContract liabilities and unallocated surplus of with-pro\ufb01ts
\nfunds
94,002
25,651
37,646
\u2013
\u2013
157,299
\u2013
\u2013
157,299
\nCore structural borrowings
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
6,127
\u2013
6,127
\nOperational borrowings
142
\u2013
106
18
\u2013
266
595
\u2013
861
\nOther liabilities
\nnote (viii)
\n9,333
1,939
8,443
330
(51)
19,994
935
(3,378)
17,551
\nTotal liabilities
103,477
27,590
46,195
348
(51)
177,559
7,657
(3,378)
181,838
\nTotal equity and liabilities
103,477
27,590
60,529
1,599
(51)
193,144
9,336
(3,378)
199,102
Notes
\n(i)
\u2018With-pro\ufb01ts\u2019 comprises the with-pro\ufb01ts assets and liabilities of the Hong Kong, Malaysia and Singapore operations. \u2018Unit-linked\u2019 comprises the assets and liabilities held in the unit-linked funds.
\n\u2018Other\u2019 includes assets and liabilities of other participating business and other non-linked shareholder-backed business.
\n(ii)
Of the Group\u2019s debt securities, the following amounts were held by the consolidated investment funds.
\n31 Dec 2022
\n$m
\n31 Dec 2021
\n$m
\nDebt securities held by consolidated investment funds
11,899
15,076
\n(iii)
Other \ufb01nancial investments comprise derivative assets and deposits.
\n(iv)
The credit ratings, information or data contained in this report which are attributed and speci\ufb01cally provided by Standard & Poor\u2019s, Moody\u2019s and Fitch Solutions and their respective a\ufb03liates and
\nsuppliers (\u2018Content Providers\u2019) is referred to here as the \u2018Content\u2019. Reproduction of any Content in any form is prohibited except with the prior written permission of the relevant party. The Content
\nProviders 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
\nof 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
\nincome or lost pro\ufb01t 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
\nthat 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
\nas investment advice.
\n(v)
Of the total \ufb01nancial investments of $144,048 million as at 31 December 2022 (31 December 2021: $168,479 million), $68,955 million (31 December 2021: $71,524 million) are expected to
\nbe recovered within one year, including equity securities and holdings in collective investment schemes.
\n(vi)
Cash and cash equivalents consist of cash at bank and in hand, deposits held at call with banks, treasury bills and other short-term highly liquid investments with less than 90 days maturity from
\nthe date of acquisition and are analysed as follows:
\n31 Dec 2022
\n$m
\n31 Dec 2021
\n$m
\nCash
1,878
1,902
\nCash equivalents
3,636
5,268
\nTotal cash and cash equivalents
5,514
7,170
\nAnalysed as:
\nHeld by the Group\u2019s holding and non-regulated entities and available for general use
1,809
3,729
\nOther funds not available for general use by the Group, including funds held for the bene\ufb01t of policyholders
3,705
3,441
\nTotal cash and cash equivalents
5,514
7,170
\n*
The Group\u2019s cash and cash equivalents are held in the following currencies as at 31 December 2022: USD 45 per cent, GBP 11 per cent, HKD 5 per cent, SGD 5 per cent, MYR 14 per cent and
other currencies 20 per cent (31 December 2021: USD 59 per cent, GBP 7 per cent, HKD 3 per cent, SGD 3 per cent, MYR 9 per cent and other currencies 19 per cent). C2 Fair value measurement The Group uses the trade date method to account for regular purchases and sales of \ufb01nancial assets. The Group holds \ufb01nancial assets in
\naccordance with IAS 39, whereby subject to speci\ufb01c criteria, \ufb01nancial instruments are required to be accounted for under one of the following
\ncategories:
\n >
Financial assets and liabilities at fair value through pro\ufb01t or loss (FVTPL): this comprises assets and liabilities designated by management as
\nFVTPL on inception and derivatives. This includes instruments that are managed and the performance evaluated on a fair value basis, including
\nliabilities related to net assets attributable to unit holders of consolidated investment funds and policyholder liabilities for investment contracts
\nwithout discretionary participation features. All investments within this category are measured at fair value with all changes thereon being
\nrecognised in investment return in the income statement.
\n>
Financial investments on an available-for-sale (AFS) basis: this comprises assets that are designated by management as AFS and/or do not fall
\ninto any of the other categories. These assets are initially recognised at fair value plus attributable transaction costs and are subsequently
\nmeasured at fair value. Interest and/or dividend income is recognised in the income statement. Unrealised gains and losses are recognised in
\nother comprehensive income. Upon disposal or impairment, accumulated unrealised gains and losses are transferred from other comprehensive
\nincome to the income statement as realised gains or losses. Subsequent to the demerger of Jackson in September 2021, the Group has
\ndesignated its retained interest in Jackson (as described in note D1.2) as AFS equity securities.
\n >
Loans and receivables: except for those designated as FVTPL or AFS, these instruments comprise non-quoted investments that have \ufb01xed or
\ndeterminable payments, including loans collateralised by mortgages, deposits, loans to policyholders and other unsecured loans and
\nreceivables. These investments are initially recognised at fair value plus transaction costs. Subsequently, these instruments are carried at
\namortised cost using the e\ufb00ective interest method. The e\ufb00ective interest rate is the rate that exactly discounts estimated future cash receipts
\nthrough the expected life of the \ufb01nancial instrument or, when appropriate, a shorter period to the net carrying amount of the \ufb01nancial asset.
\nWhen assets held at amortised cost are subject to impairment testing, estimated future cash \ufb02ows are compared to the carrying value of the
\nasset. The estimated future cash \ufb02ows are discounted using the \ufb01nancial asset\u2019s original or variable e\ufb00ective interest rate and exclude credit
\nlosses that have not yet been incurred. If, in subsequent periods, an impaired loan or receivable recovers in value (in part or in full) and this
\nrecovery can be objectively related to an event occurring after the impairment, then any amount determined to have been recovered is reversed
\nthrough the income statement.
\nC2.1
Determination of fair value
\nThe fair values of the \ufb01nancial instruments for which fair valuation is required under IFRS Standards are determined by the use of quoted market
\nprices for exchange-quoted investments, or by using quotations from independent third parties, such as brokers and pricing services or by using
\nappropriate valuation techniques.
\nThe estimated fair value of derivative \ufb01nancial instruments re\ufb02ects the estimated amount the Group would receive or pay in an arm\u2019s-length
\ntransaction. This amount is determined using quoted prices if exchange listed, quotations from independent third parties or valued internally
\nusing standard market practices.
\nOther than the loans which have been designated at fair value through pro\ufb01t or loss, the carrying value of loans and receivables is presented net
\nof provisions for impairment. The fair value of loans is estimated from discounted cash \ufb02ows expected to be received.
\nThe fair value of the subordinated and senior debt issued by the parent company is determined using quoted prices from independent third
\nparties.
\nThe fair value of \ufb01nancial liabilities (other than subordinated debt, senior debt and derivative \ufb01nancial instruments) is determined using
\ndiscounted cash \ufb02ows of the amounts expected to be paid.
\nValuation approach for level 2 fair valued assets and liabilities
\nA signi\ufb01cant proportion of the Group\u2019s level 2 assets are corporate bonds, structured securities and other non-national government debt securities.
\nThese assets, in line with market practice, are generally valued using a designated independent pricing service or quote from third-party brokers.
\nThese valuations are subject to a number of monitoring controls, such as comparison to multiple pricing sources where available, monthly price
\nvariances, stale price reviews and variance analysis on prices achieved on subsequent trades.
\nWhen prices are not available from pricing services, quotes are sourced directly from brokers. Prudential seeks to obtain a number of quotes
\nfrom di\ufb00erent brokers so as to obtain the most comprehensive information available on their executability. The selected quote is the one which
\nbest represents an executable quote for the security at the measurement date.
\nGenerally, no adjustment is made to the prices obtained from independent third parties. Adjustments are made in only limited circumstances,
\nwhere it is determined that the third-party valuations obtained do not re\ufb02ect fair value (eg either because the value is stale and/or the values are
\nextremely diverse in range). Securities valued in such manner are classi\ufb01ed as level 3 where these signi\ufb01cant inputs are not based on observable
\nmarket data.
\nValuation approach for level 3 fair valued assets and liabilities
\nInvestments valued using valuation techniques include \ufb01nancial investments which by their nature do not have an externally quoted price based
\non regular trades, and \ufb01nancial investments for which markets are no longer active as a result of market conditions, eg market illiquidity.
\nThe Group\u2019s valuation policies, procedures and analyses for instruments categorised as level 3 are overseen by Business Unit committees as
\npart of the Group\u2019s wider \ufb01nancial reporting governance processes. The procedures undertaken include approval of valuation methodologies,
\nveri\ufb01cation processes, and resolution of signi\ufb01cant or complex valuation issues. In addition, the Group has minimum standards for independent
\nprice veri\ufb01cation to ensure valuation accuracy is regularly independently veri\ufb01ed. Adherence to this policy is monitored across the business units.
C2.2
Fair value measurement hierarchy of Group assets and liabilities
\n(a) Assets and liabilities carried at fair value on the statement of \ufb01nancial position
\nThe table below shows the assets and liabilities carried at fair value analysed by level of the IFRS 13 \u2018Fair Value Measurement\u2019 de\ufb01ned fair value
\nhierarchy. This hierarchy is based on the inputs to the fair value measurement and re\ufb02ects the lowest level input that is signi\ufb01cant to that
\nmeasurement.
\nAll assets and liabilities held at fair value are classi\ufb01ed as fair value through pro\ufb01t or loss, except for $266 million of \ufb01nancial assets classi\ufb01ed as
\navailable-for-sale at 31 December 2022 (31 December 2021: $909 million), all of which (31 December 2021: $683 million) related to the Group\u2019s
\nretained interest in Jackson\u2019s equity securities. All assets and liabilities held at fair value are measured on a recurring basis. As of 31 December
\n2022, the Group did not have any \ufb01nancial instruments that are measured at fair value on a non-recurring basis.
\nFinancial instruments at fair value
\n31 Dec 2022
$m
\nLevel 1
Level 2
Level 3
\nQuoted prices
\n(unadjusted)
\nin active
\nmarkets
\nValuation based
\non signi\ufb01cant
\nobservable
\nmarket inputs
\nnote (i)
\nValuation based
\non signi\ufb01cant
\nunobservable
\nmarket inputs
\nnote (ii)
\nTotal
\nLoans
\u2013
447
3
450
\nEquity securities and holdings in collective investment schemes
49,725
7,130
824
57,679
\nDebt securities
57,215
19,736
38
76,989
\nDerivative assets
82
487
\u2013
569
\nDerivative liabilities
(778)
(223)
\u2013
(1,001)
\nTotal \ufb01nancial investments, net of derivative liabilities
106,244
27,577
865
134,686
\nInvestment contract liabilities without discretionary participation features
\u2013
(741)
\u2013
(741)
\nNet asset value attributable to unit holders of consolidated investment funds
(4,193)
\u2013
\u2013
(4,193)
\nTotal \ufb01nancial instruments at fair value
102,051
26,836
865
129,752
\nPercentage of total (%)
78%
21%
1%
100%
\nAnalysed by business type:
\nFinancial investments net of derivative liabilities, at fair value
\nWith-pro\ufb01ts
65,880
14,605
748
81,233
\nUnit-linked
21,319
1,851
4
23,174
\nNon-linked shareholder-backed business
19,045
11,121
113
30,279
\nTotal \ufb01nancial investments net of derivative liabilities, at fair value
106,244
27,577
865
134,686
\nPercentage of total (%)
78%
21%
1%
100%
\nTotal \ufb01nancial investments net of derivative liabilities, at fair value
106,244
27,577
865
134,686
\nOther \ufb01nancial liabilities at fair value
(4,193)
(741)
\u2013
(4,934)
\nTotal \ufb01nancial instruments at fair value
102,051
26,836
865
129,752
31 Dec 2021
$m
\nLevel 1
Level 2
Level 3
\nQuoted prices
\n(unadjusted)
\nin active
\nmarkets
\nValuation based
\non signi\ufb01cant
\nobservable
\nmarket inputs
\nnote (i)
\nValuation based
\non signi\ufb01cant
\nunobservable
\nmarket inputs
\nnote (ii)
\nTotal
\nLoans
\u2013
616
5
621
\nEquity securities and holdings in collective investment schemes
54,107
6,917
577
61,601
\nDebt securities
76,049
22,987
58
99,094
\nDerivative assets
359
122
\u2013
481
\nDerivative liabilities
(146)
(116)
\u2013
(262)
\nTotal \ufb01nancial investments, net of derivative liabilities
130,369
30,526
640
161,535
\nInvestment contract liabilities without discretionary participation features
\u2013
(814)
\u2013
(814)
\nNet asset value attributable to unit holders of consolidated investment funds
(5,618)
(46)
\u2013
(5,664)
\nTotal \ufb01nancial instruments at fair value
124,751
29,666
640
155,057
\nPercentage of total (%)
81%
19%
0%
100%
\nAnalysed by business type:
\nFinancial investments net of derivative liabilities, at fair value
\nWith-pro\ufb01ts
82,489
15,438
506
98,433
\nUnit-linked
24,024
2,343
5
26,372
\nNon-linked shareholder-backed business
23,856
12,745
129
36,730
\nTotal \ufb01nancial investments net of derivative liabilities, at fair value
130,369
30,526
640
161,535
\nPercentage of total (%)
81%
19%
0%
100%
\nTotal \ufb01nancial investments net of derivative liabilities, at fair value
130,369
30,526
640
161,535
\nOther \ufb01nancial liabilities at fair value
(5,618)
(860)
\u2013
(6,478)
\nTotal \ufb01nancial instruments at fair value
124,751
29,666
640
155,057
\nNotes
\n(i)
Of the total level 2 debt securities of $19,736 million at 31 December 2022 (31 December 2021: $22,987 million), $37 million (31 December 2021: $24 million) are valued internally.
\n(ii)
At 31 December 2022, the Group held $865 million (31 December 2021: $640 million) of net \ufb01nancial instruments at fair value within level 3. This represents less than 1 per cent of the total
\nfair-valued \ufb01nancial assets, net of \ufb01nancial liabilities, for both years and comprises the following items:
\n\u2013
Equity securities and holdings in collective investment schemes of $824 million (31 December 2021: $557 million) consisting primarily of property and infrastructure funds held by the
\nparticipating funds, which are externally valued using the net asset value of the invested entities. Equity securities of $1 million (31 December 2021: $1 million) are internally valued,
\nrepresenting less than 0.1 per cent for all periods of the total fair-valued \ufb01nancial assets net of \ufb01nancial liabilities. Internal valuations are inherently more subjective than external valuations;
\nand
\n\u2013
Other sundry individual \ufb01nancial instruments of a net asset of $41 million (31 December 2021: net asset of $63 million).
\nOf the net \ufb01nancial instruments of $865 million at 31 December 2022 (31 December 2021: $640 million) referred to above:
\n\u2013
A net asset of $752 million (31 December 2021: $511 million) is held by the Group\u2019s with-pro\ufb01ts and unit-linked funds and therefore shareholders\u2019 pro\ufb01t and equity are not impacted by
\nmovements in the valuation of these \ufb01nancial instruments; and
\n\u2013
A net asset of $113 million (31 December 2021: $129 million) is held to support non-linked shareholder-backed business, of which $111 million (31 December 2021: $112 million) are
\nprimarily private equity investments and corporate bonds externally valued using the net asset value of the invested entities and external prices adjusted to re\ufb02ect the speci\ufb01c known
\nconditions relating to these bonds (eg distressed securities) and are therefore inherently less subjective than internal valuations. If the value of all these level 3 \ufb01nancial instruments
\ndecreased by 10 per cent, the change in valuation would be $(11) million (31 December 2021: $(13) million), which would reduce shareholders\u2019 equity by this amount before tax.
\nAll\u00a0of\u00a0this\u00a0amount would pass through the income statement substantially as part of short-term \ufb02uctuations in investment returns outside of adjusted operating pro\ufb01t.
\n(b) Transfers into and transfers out of levels
\nThe Group\u2019s policy is to recognise transfers into and out of levels as of the end of each reporting period except for material transfers which are
\nrecognised 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
\nmaterial change in the observed valuation inputs or a change in the level of trading activities of the securities.
\nDuring 2022, the transfers between levels within the portfolios were primarily transfers from level 1 to level 2 of $2,640 million (31 December
\n2021: $3,789 million) and transfers from level 2 to level 1 of $1,982 million (31 December 2021: $1,742 million). These transfers primarily re\ufb02ect
\nthe change in the observed valuation inputs of equity securities and debt securities and, in certain cases, the change in the level of trading
\nactivities of the securities. There were transfers from level 3 to level 2 of $15 million in the year (31 December 2021: $12 million) and no transfers
\ninto level 3 (31 December 2021: $30 million).
Reconciliation of movements in level 3 assets and liabilities measured at fair value
\nThe following table reconciles the value of level 3 fair valued assets and liabilities at the beginning and end of the years shown.
\nTotal investment return recorded in the income statement represents interest and dividend income, realised gains and losses, unrealised gains
\nand losses on the assets classi\ufb01ed at fair value through pro\ufb01t and loss and foreign exchange movements on an individual entity\u2019s overseas
\ninvestments. Total gains and losses recorded in other comprehensive income comprises the translation of investments into the Group\u2019s
\npresentational currency of USD.
\n2022
$m
\nLoans
\nEquity securities
\nand holdings in
\ncollective
\ninvestment
\nschemes
\nDebt
\nsecurities
\nGroup
\ntotal
\nBalance at 1 Jan
5
577
58
640
\nTotal losses in income statement
\nnote
\n(2)
(31)
(2)
(35)
\nTotal losses recorded in other comprehensive income
\u2013
(6)
(3)
(9)
\nPurchases and other additions
\u2013
305
\u2013
305
\nSales
\u2013
(21)
\u2013
(21)
\nTransfers out of level 3
\u2013
\u2013
(15)
(15)
\nBalance at 31 Dec
3
824
38
865
\n2021
$m
\nLoans
\nEquity securities
\nand holdings in
\ncollective
\ninvestment
\nschemes
\nDebt
\nsecurities
\nGroup
\ntotal
\nBalance at 1 Jan
6
445
33
484
\nTotal (losses) gains in income statement
\nnote
\n(1)
6
(3)
2
\nTotal losses recorded in other comprehensive income
\u2013
(5)
(2)
(7)
\nPurchases and other additions
\u2013
143
\u2013
143
\nTransfers (out of) into level 3
\u2013
(12)
30
18
\nBalance at 31 Dec
5
577
58
640
\nNote
\nOf the total net losses in the income statement of $(35) million in 2022 (2021: net gains of $2 million), $(12) million (2021: $2 million) relates to net unrealised gains and losses of \ufb01nancial instruments
\nstill held at the end of the year, which can be analysed as follows:
\n2022
\n$m
\n2021
\n$m
\nLoans
(2)
(1)
\nEquity securities and holdings in collective investment schemes
(8)
6
\nDebt securities
(2)
(3)
\nTotal net (losses) gains
(12)
2
\n(c) Assets and liabilities at amortised cost and their fair value
\nThe table below shows the \ufb01nancial assets and liabilities carried at amortised cost on the statement of \ufb01nancial position and their fair value. Cash
\ndeposits, accrued income, other debtors, accruals, deferred income and other liabilities are excluded from the analysis below, as these are carried
\nat amortised cost which approximates fair value. The carrying value of investment contracts with discretionary participation features is on an
\nIFRS\u00a04 basis, which is also excluded from the analysis below, as it is impractical to determine the fair value of these contracts due to the lack of
\na\u00a0reliable basis to measure participation features.
\n31 Dec 2022
$m
31 Dec 2021
$m
\nCarrying
\nvalue
\nFair
\nvalue
\nCarrying
\nvalue
\nFair
\nvalue
\nAssets
\nLoans
2,086
2,207
1,941
2,152
\nLiabilities
\nCore structural borrowings of shareholder-\ufb01nanced businesses
(4,261)
(3,834)
(6,127)
(6,565)
\nOperational borrowings (excluding lease liabilities)
(516)
(516)
(514)
(514)
\nObligations under funding, securities lending and sale and repurchase agreements
(582)
(582)
(223)
(223)
\nTotal net \ufb01nancial liabilities at amortised cost
(3,273)
(2,725)
(4,923)
(5,150)
The fair value of the assets and liabilities in the table above, with the exception of the subordinated and senior debt issued by the parent company,
\nhas been estimated from the discounted cash \ufb02ows expected to be received or paid. All the assets and liabilities in the table above have been
\nclassi\ufb01ed within level 2 at 31 December 2022 and 2021, re\ufb02ecting the observability of the inputs used to derive their fair value. The fair value of
\nthe subordinated and senior debt issued by the parent company is determined using quoted prices from independent third parties.
\nC2.3
Additional information on \ufb01nancial instruments
\n(a) Financial risk
\nLiquidity analysis
\nContractual maturities of \ufb01nancial liabilities on an undiscounted cash \ufb02ow basis
\nThe following table sets out the contractual maturities for applicable classes of \ufb01nancial liabilities, excluding derivative liabilities and investment
\ncontracts that are separately presented. The \ufb01nancial liabilities are included in the column relating to the contractual maturities of the
\nundiscounted cash \ufb02ows (including contractual interest payments) based on the earliest period in which the Group can be required to pay
\nassuming conditions are consistent with those of year end.
\n31 Dec 2022
$m
\nTotal
\ncarrying
\nvalue
\nContractual maturity pro\ufb01le for \ufb01nancial liabilities
\n1 year
\nor less
\n1-2
\nyears
\n2-5
\nyears
\n5-10
\nyears
\n10-15
\nyears
\n15-20
\nyears
\nOver
\n20 years
\nNo stated
\nmaturity
\nTotal
\nundiscounted
\ncash \ufb02ows
\nCore structural borrowings of
\nshareholder-\ufb01nanced
\nbusinesses
\nnote C5.1
\n4,261
509
124
370
2,598
1,024
\u2013
\u2013
750
5,375
\nLease liabilities under IFRS 16
\nnote C5.2
\n299
101
76
127
28
9
\u2013
\u2013
\u2013
341
\nOther operational borrowings
\nnote C5.2
\n516
516
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
516
\nObligations under funding,
\nsecurities lending and sale and
\nrepurchase agreements
582
582
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
582
\nAccruals, deferred income and
\nother liabilities
8,777
6,258
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
2,519
8,777
\nNet asset value attributable to unit
\nholders of consolidated unit
\ntrusts and similar funds
4,193
4,193
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
4,193
\nTotal \ufb01nancial liabilities
18,628
12,159
200
497
2,626
1,033
\u2013
\u2013
3,269
19,784
\n31 Dec 2021
$m
\nTotal
\ncarrying
\nvalue
\nContractual maturity pro\ufb01le for \ufb01nancial liabilities
\n1 year
\nor less
\n1-2
\nyears
\n2-5
\nyears
\n5-10
\nyears
\n10-15
\nyears
\n15-20
\nyears
\nOver
\n20 years
\nNo stated
\nmaturity
\nTotal
\nundiscounted
\ncash \ufb02ows
\nCore structural borrowings of
\nshareholder-\ufb01nanced
\nbusinesses
\nnote C5.1
\n6,127
1,872
551
702
1,817
1,642
\u2013
\u2013
750
7,334
\nLease liabilities under IFRS 16
\nnote C5.2
\n347
110
81
135
45
11
\u2013
\u2013
\u2013
382
\nOther operational borrowings
\nnote C5.2
\n514
514
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
514
\nObligations under funding,
\nsecurities lending and sale and
\nrepurchase agreements
223
223
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
223
\nAccruals, deferred income and
\nother liabilities
7,983
5,972
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
2,011
7,983
\nNet asset value attributable to unit
\nholders of consolidated unit
\ntrusts and similar funds
5,664
5,664
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
5,664
\nTotal \ufb01nancial liabilities
20,858
14,355
632
837
1,862
1,653
\u2013
\u2013
2,761
22,100
Maturity analysis of derivatives
\nThe following table shows the carrying value of the gross and net derivative positions.
\nCarrying value of net derivatives
$m
\nDerivative
\nassets
\nDerivative
\nliabilities
\nNet
\nderivative
\nposition
\n31 Dec 2022
569
(1,001)
(432)
\n31 Dec 2021
481
(262)
219
\nAll net derivatives have been included at fair value due within one year or less, representing the basis on which they are managed (ie to manage
\nprincipally asset or liability value exposures). The Group has no cash \ufb02ow hedges and, in general, contractual maturities are not considered
\nessential for an understanding of the timing of the cash \ufb02ows for these instruments.
\nMaturity analysis of investment contracts
\nThe table below shows the maturity pro\ufb01le for investment contracts based on undiscounted cash \ufb02ow projections of expected bene\ufb01t payments.
\nMaturity pro\ufb01le for investment contracts
$m
\nTotal
\ncarrying
\nvalue
\n1 year
\nor less
\n1-5
\nyears
\n5-10
\nyears
\n10-15
\nyears
\n15-20
\nyears
\nOver
\n20 years
\nTotal
\nundiscounted
\ncash \ufb02ows
\n31 Dec 2022
420
11
369
98
22
8
4
512
\n31 Dec 2021
459
14
442
63
16
6
2
543
\nThe undiscounted cash \ufb02ows in the maturity pro\ufb01le shown above excludes contracts which have no stated maturity but which are repayable on
\ndemand.
\nMost investment contracts have options to surrender early, often subject to surrender or other penalties. Therefore, most contracts can be said
\nto have a contractual maturity of less than one year, but the additional charges and term of the contracts mean these are unlikely to be exercised
\nin practice and the more useful information is to present information on expected payment.
\nThe vast majority of the Group\u2019s \ufb01nancial assets are held to back the Group\u2019s policyholder liabilities. Although asset/liability matching is an
\nimportant component of managing policyholder liabilities (both those classi\ufb01ed as insurance and those classi\ufb01ed as investments), this pro\ufb01le is
\nmainly relevant for managing market risk rather than liquidity risk. Within each business unit, this asset/liability matching is performed on a
\nportfolio-by-portfolio basis.
\nIn terms of liquidity risk, a large proportion of the policyholder liabilities contain discretionary surrender values or surrender charges, meaning
\nthat many of the Group\u2019s liabilities are expected to be held for the long term. Much of the Group\u2019s investment portfolios are in marketable
\nsecurities, which can therefore be converted quickly to liquid assets.
\nFor the reasons provided above, an analysis of the Group\u2019s assets by contractual maturity is not considered meaningful to evaluate the nature
\nand extent of the Group\u2019s liquidity risk.
\nCredit risk
\nThe Group\u2019s maximum exposure to credit risk of \ufb01nancial instruments before any allowance for collateral or allocation of losses to policyholders is
\nrepresented by the carrying value of \ufb01nancial instruments on the balance sheet that have exposures to credit risk comprising cash and cash
\nequivalents, deposits, debt securities, loans and derivative assets, accrued investment income and other debtors. Further details of collateral in
\nplace in relation to derivatives, securities lending, repurchase and reverse repurchase agreements and other transactions are provided in note (c)
\nbelow. The Group\u2019s exposure to credit risk is further discussed in the Risk review report.
\nOf the total loans and receivables held at 31 December 2022, $6 million (31 December 2021: $7 million) are past their due date but are not
\nimpaired, of which $1 million are less than one year past their due date (31 December 2021: $2 million). The Group expects full recovery of these
\nloans and receivables.
\nThere are no \ufb01nancial assets that would have been past due or impaired had the terms not been renegotiated in both years.
In addition, the Group did not take possession of any other collateral held as security in both years.Foreign exchange risk
\nAs at 31 December 2022, the Group held 27 per cent (31 December 2021: 26 per cent) of its \ufb01nancial assets and 64 per cent (31 December 2021:
\n63 per cent) of its \ufb01nancial liabilities in currencies mainly USD, other than the functional currency of the relevant business units or the currency to
\nwhich the functional currency is pegged (eg \ufb01nancial assets and liabilities of USD denominated business in Hong Kong). The exchange risks
\ninherent in these exposures are mitigated through the use of derivatives, mainly forward currency contracts and currency swaps as described in
\nnote (b) below.
\nThe amount of exchange gain recognised in the income statement in 2022, except for those arising on \ufb01nancial instruments measured at fair
\nvalue through pro\ufb01t or loss, is $234 million (2021: loss of $(132) million).
\n(b) Derivatives and hedging
\nDerivative \ufb01nancial instruments are used to reduce or manage investment, interest rate and currency exposures, to facilitate e\ufb03cient portfolio
\nmanagement and for investment purposes.
\nThe Group does not regularly seek to apply fair value or cash \ufb02ow hedging treatment under IAS 39. The Group has no net investment, fair value
\nor cash \ufb02ow hedges under IAS 39 at 31 December 2022 and 2021. All derivatives that are not designated as hedging instruments are carried at fair
\nvalue, with movements in fair value being recorded in the income statement.
\nEmbedded derivatives are embedded within other non-derivative host \ufb01nancial instruments and insurance contracts to create hybrid
\ninstruments. Embedded derivatives meeting the de\ufb01nition of an insurance contract are accounted for under IFRS 4. Where economic
\ncharacteristics and risks of the embedded derivatives are not closely related to the economic characteristics and risks of the host instrument, and
\nwhere the hybrid instrument is not measured at fair value with the changes in fair value recognised in the income statement, the embedded
\nderivative is required to be bifurcated and carried at fair value as a derivative measured in accordance with IAS 39.
\nIn addition, the Group applies the option under IFRS 4 to not separate and fair value surrender options embedded in host contracts and
\nwith-pro\ufb01ts investment contracts whose strike price is either a \ufb01xed amount or a \ufb01xed amount plus interest.
\nDerivatives held and their purpose
\nThe Group enters into a variety of exchange traded and over-the-counter derivative \ufb01nancial instruments, including futures, options, forward
\ncontracts, swaps and swaptions.
\nAll over-the-counter derivative transactions are conducted under standardised ISDA (International Swaps and Derivatives Association Inc)
\nmaster agreements and collateral agreements are in place between the individual entities and relevant counterparties under each of these
\nmarket master agreements.
\nDerivatives are used for e\ufb03cient portfolio management to obtain cost e\ufb00ective and management of exposure to various markets in
\naccordance with the Group\u2019s investment strategies and to manage exposure to interest rate, currency, credit and other business risks. The Group
\nalso uses interest rate derivatives to reduce exposure to interest rate volatility.
\n(c) Derecognition, collateral and o\ufb00setting
\nDerecognition of \ufb01nancial assets and liabilities
\nThe Group\u2019s policy is to derecognise \ufb01nancial assets when it is deemed that substantially all the risks and rewards of ownership have been
\ntransferred.
\nThe Group derecognises \ufb01nancial liabilities only when the obligation speci\ufb01ed in the contract is discharged, cancelled or has expired.
\nReverse repurchase agreements
\nThe Group is party to various reverse repurchase agreements under which securities are purchased from third parties with an obligation to resell
\nthe securities. The securities are not recognised as investments in the statement of \ufb01nancial position but the right to receive the cash paid is
\nrecognised as deposits.
\nThe Group has entered into reverse repurchase transactions under which it purchased securities and had taken on the obligation to resell the
\nsecurities. At 31 December 2022, the fair value of the collateral held in respect of these transactions, which is represented by the purchased
\nsecurities, was $3,244 million (31 December 2021: $2,149 million).
\nSecurities lending and repurchase agreements
\nThe Group is also party to various securities lending agreements (including repurchase agreements) under which securities are loaned to third
\nparties on a short-term basis. The loaned securities are not derecognised; rather, they continue to be recognised within the appropriate investment
\nclassi\ufb01cation. To the extent cash collateral is received it is recognised on the statement of \ufb01nancial position with the obligation to repay the cash
\npaid recognised as a liability. Other collateral is not recognised.
\nAt 31 December 2022, the Group had $1,571 million (31 December 2021: $854 million) of lent securities and assets subject to repurchase
agreements. The cash and securities collateral held or pledged under such agreements were $1,679 million (31 December 2021: $913 million). Collateral and pledges under derivative transactionsAt 31 December 2022, the Group had pledged $62 million (31 December 2021: $99 million) for liabilities and held collateral of $234 million
\n(31 December 2021: $50 million) in respect of over-the-counter derivative transactions. These transactions are conducted under terms that are
\nusual and customary to collateralised transactions including, where relevant, standard securities lending and repurchase agreements.
\nThe Group has entered into collateral arrangements in relation to over-the-counter derivative transactions, which permit sale or re-pledging of
\nunderlying collateral. The Group has not sold any collateral held or re-pledged any collateral.
\nAll over-the-counter derivative transactions are conducted under standardised International Swaps and Derivatives Association (ISDA) master
\nagreements. The collateral management for these transactions is conducted under the usual and customary terms and conditions set out in the
\nCredit Support Annex to the ISDA master agreement.
\nO\ufb00setting assets and liabilities
\nThe Group\u2019s derivative instruments, repurchase agreements and securities lending agreements are subject to master netting arrangements and
\ncollateral arrangements. A master netting arrangement with a counterparty creates a right of o\ufb00set for amounts due to and due from that same
\ncounterparty that is enforceable in the event of a default or bankruptcy. The Group recognises amounts subject to master netting arrangements
\non a gross basis within the consolidated balance sheets.
\nThe following tables present the gross and net information about the Group\u2019s \ufb01nancial instruments subject to master netting arrangements:
\n31 Dec 2022
$m
\nGross amount
\nincluded in the
\nbalance sheet
\nnote (i)
\nRelated amounts not o\ufb00set in the balance sheet
\nNet
\namount
\nnote (iv)
\nFinancial
\ninstruments
\nnote (ii)
\nCash
\ncollateral
\nSecurities
\ncollateral
\nnote (iii)
\nFinancial assets:
\nDerivative assets
457
(179)
(217)
\u2013
61
\nReverse repurchase agreements
3,174
\u2013
\u2013
(3,174)
\u2013
\nTotal \ufb01nancial assets
3,631
(179)
(217)
(3,174)
61
\nFinancial liabilities:
\nDerivative liabilities
(284)
179
27
6
(72)
\nSecurities lending and repurchase agreements
(582)
\u2013
13
566
(3)
\nTotal \ufb01nancial liabilities
(866)
179
40
572
(75)
\n31 Dec 2021
$m
\nGross amount
\nincluded in the
\nbalance sheet
\nnote (i)
\nRelated amounts not o\ufb00set in the balance sheet
\nNet
\namount
\nnote (iv)
\nFinancial
\ninstruments
\nnote (ii)
\nCash
\ncollateral
\nSecurities
\ncollateral
\nnote (iii)
\nFinancial assets:
\nDerivative assets
170
(94)
(31)
(1)
44
\nReverse repurchase agreements
2,135
\u2013
\u2013
(2,134)
1
\nTotal \ufb01nancial assets
2,305
(94)
(31)
(2,135)
45
\nFinancial liabilities:
\nDerivative liabilities
(165)
94
63
\u2013
(8)
\nSecurities lending and repurchase agreements
(222)
\u2013
153
69
\u2013
\nTotal \ufb01nancial liabilities
(387)
94
216
69
(8)
\nNotes
\n(i)
The Group has not o\ufb00set any of the amounts included in the balance sheet.
\n(ii)
Represents the amount that could be o\ufb00set under master netting or similar arrangements where the Group does not satisfy the full criteria to o\ufb00set in the balance sheet.
\n(iii)
Excludes initial margin amounts for exchange-traded derivatives.
\n(iv)
In the tables above, the amounts of assets or liabilities included in the balance sheet would be o\ufb00set \ufb01rst by \ufb01nancial instruments that have the right of o\ufb00set under master netting or similar
arrangements with any remaining amount reduced by the amount of cash and securities collateral. The actual amount of collateral may be greater than amounts presented in the tables. ",
"dimensions": {
"concept": "ifrs-full:DisclosureOfInvestmentsOtherThanInvestmentsAccountedForUsingEquityMethodExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f38346": {
"value": "(vi) Cash and cash equivalents consist of cash at bank and in hand, deposits held at call with banks, treasury bills and other short-term highly liquid investments with less than 90 days maturity from
\nthe date of acquisition and are analysed as follows: ",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyToDetermineComponentsOfCashAndCashEquivalents",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f38347": {
"value": "(vi) Cash and cash equivalents consist of cash at bank and in hand, deposits held at call with banks, treasury bills and other short-term highly liquid investments with less than 90 days maturity from
\nthe date of acquisition and are analysed as follows:
\n31 Dec 2022
\n$m
\n31 Dec 2021
\n$m
\nCash
1,878
1,902
\nCash equivalents
3,636
5,268
\nTotal cash and cash equivalents
5,514
7,170
\nAnalysed as:
\nHeld by the Group\u2019s holding and non-regulated entities and available for general use
1,809
3,729
\nOther funds not available for general use by the Group, including funds held for the bene\ufb01t of policyholders
3,705
3,441
\nTotal cash and cash equivalents
5,514
7,170
\n*
The Group\u2019s cash and cash equivalents are held in the following currencies as at 31 December 2022: USD 45 per cent, GBP 11 per cent, HKD 5 per cent, SGD 5 per cent, MYR 14 per cent and
other currencies 20 per cent (31 December 2021: USD 59 per cent, GBP 7 per cent, HKD 3 per cent, SGD 3 per cent, MYR 9 per cent and other currencies 19 per cent).",
"dimensions": {
"concept": "ifrs-full:DisclosureOfCashAndCashEquivalentsExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f38348": {
"value": "(vi) Cash and cash equivalents consist of cash at bank and in hand, deposits held at call with banks, treasury bills and other short-term highly liquid investments with less than 90 days maturity from
\nthe date of acquisition and are analysed as follows:
\n31 Dec 2022
\n$m
\n31 Dec 2021
\n$m
\nCash
1,878
1,902
\nCash equivalents
3,636
5,268
\nTotal cash and cash equivalents
5,514
7,170
\nAnalysed as:
\nHeld by the Group\u2019s holding and non-regulated entities and available for general use
1,809
3,729
\nOther funds not available for general use by the Group, including funds held for the bene\ufb01t of policyholders
3,705
3,441
\nTotal cash and cash equivalents
5,514
7,170
\n*
The Group\u2019s cash and cash equivalents are held in the following currencies as at 31 December 2022: USD 45 per cent, GBP 11 per cent, HKD 5 per cent, SGD 5 per cent, MYR 14 per cent and
other currencies 20 per cent (31 December 2021: USD 59 per cent, GBP 7 per cent, HKD 3 per cent, SGD 3 per cent, MYR 9 per cent and other currencies 19 per cent).",
"dimensions": {
"concept": "ifrs-full:DisclosureOfRestrictedCashAndCashEquivalentsExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f38385": {
"value": "(vii) \u2018Other assets\u2019 at 31 December 2022, comprise goodwill, intangibles (including deferred acquisition costs), property, plant and equipment (see note C11), tax balances and accrued investment
\nincome and other debtors, which are analysed as follows:
\n31 Dec 2022
\n$m
\n31 Dec 2021
\n$m
\nInterest receivable
885
872
\nOther accrued income
250
299
\nTotal accrued investment income
1,135
1,171
\nAmounts receivable due from:
\nPolicyholders
644
686
\nIntermediaries
\u2013
4
\nReinsurers
192
226
\nOther sundry debtors
858
863
\nTotal other debtors
1,694
1,779
\nTotal accrued investment income and other debtors
2,829
2,950
\nAnalysed as:
\nExpected to be settled within one year
2,700
2,761
\nExpected to be settled beyond one year
129
189
\n2,829
2,950",
"dimensions": {
"concept": "ifrs-full:DisclosureOfOtherAssetsExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f38386": {
"value": "(vii) \u2018Other assets\u2019 at 31 December 2022, comprise goodwill, intangibles (including deferred acquisition costs), property, plant and equipment (see note C11), tax balances and accrued investment
\nincome and other debtors, which are analysed as follows:
\n31 Dec 2022
\n$m
\n31 Dec 2021
\n$m
\nInterest receivable
885
872
\nOther accrued income
250
299
\nTotal accrued investment income
1,135
1,171
\nAmounts receivable due from:
\nPolicyholders
644
686
\nIntermediaries
\u2013
4
\nReinsurers
192
226
\nOther sundry debtors
858
863
\nTotal other debtors
1,694
1,779
\nTotal accrued investment income and other debtors
2,829
2,950
\nAnalysed as:
\nExpected to be settled within one year
2,700
2,761
\nExpected to be settled beyond one year
129
189
\n2,829
2,950",
"dimensions": {
"concept": "ifrs-full:DisclosureOfPrepaymentsAndOtherAssetsExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f38435": {
"value": "(viii) Within \u2018Other liabilities\u2019 at 31 December 2022 are accruals, deferred income and other liabilities of $8,777 million (31 December 2021: $7,983 million), which are analysed as follows (detailed
\nmaturity analysis is provided in note C2.3):
\n31 Dec 2022
\n$m
\n31 Dec 2021
\n$m
\nAccruals and deferred income
539
565
\nCreditors arising from direct insurance and reinsurance operations
3,000
1,120
\nInterest payable
59
77
\nFunds withheld under reinsurance agreements
2,040
1,545
\nOther creditors
3,139
4,676
\nTotal accruals, deferred income and other creditors
8,777
7,983",
"dimensions": {
"concept": "ifrs-full:DisclosureOfOtherLiabilitiesExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f38436": {
"value": "(viii) Within \u2018Other liabilities\u2019 at 31 December 2022 are accruals, deferred income and other liabilities of $8,777 million (31 December 2021: $7,983 million), which are analysed as follows (detailed
\nmaturity analysis is provided in note C2.3):
\n31 Dec 2022
\n$m
\n31 Dec 2021
\n$m
\nAccruals and deferred income
539
565
\nCreditors arising from direct insurance and reinsurance operations
3,000
1,120
\nInterest payable
59
77
\nFunds withheld under reinsurance agreements
2,040
1,545
\nOther creditors
3,139
4,676
\nTotal accruals, deferred income and other creditors
8,777
7,983",
"dimensions": {
"concept": "ifrs-full:DisclosureOfAccruedExpensesAndOtherLiabilitiesExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f38479": {
"value": "C2 Fair value measurement The Group uses the trade date method to account for regular purchases and sales of \ufb01nancial assets. The Group holds \ufb01nancial assets in
\naccordance with IAS 39, whereby subject to speci\ufb01c criteria, \ufb01nancial instruments are required to be accounted for under one of the following
\ncategories:
\n >
Financial assets and liabilities at fair value through pro\ufb01t or loss (FVTPL): this comprises assets and liabilities designated by management as
\nFVTPL on inception and derivatives. This includes instruments that are managed and the performance evaluated on a fair value basis, including
\nliabilities related to net assets attributable to unit holders of consolidated investment funds and policyholder liabilities for investment contracts
\nwithout discretionary participation features. All investments within this category are measured at fair value with all changes thereon being
\nrecognised in investment return in the income statement.
\n>
Financial investments on an available-for-sale (AFS) basis: this comprises assets that are designated by management as AFS and/or do not fall
\ninto any of the other categories. These assets are initially recognised at fair value plus attributable transaction costs and are subsequently
\nmeasured at fair value. Interest and/or dividend income is recognised in the income statement. Unrealised gains and losses are recognised in
\nother comprehensive income. Upon disposal or impairment, accumulated unrealised gains and losses are transferred from other comprehensive
\nincome to the income statement as realised gains or losses. Subsequent to the demerger of Jackson in September 2021, the Group has
\ndesignated its retained interest in Jackson (as described in note D1.2) as AFS equity securities.
\n >
Loans and receivables: except for those designated as FVTPL or AFS, these instruments comprise non-quoted investments that have \ufb01xed or
\ndeterminable payments, including loans collateralised by mortgages, deposits, loans to policyholders and other unsecured loans and
\nreceivables. These investments are initially recognised at fair value plus transaction costs. Subsequently, these instruments are carried at
\namortised cost using the e\ufb00ective interest method. The e\ufb00ective interest rate is the rate that exactly discounts estimated future cash receipts
\nthrough the expected life of the \ufb01nancial instrument or, when appropriate, a shorter period to the net carrying amount of the \ufb01nancial asset.
\nWhen assets held at amortised cost are subject to impairment testing, estimated future cash \ufb02ows are compared to the carrying value of the
\nasset. The estimated future cash \ufb02ows are discounted using the \ufb01nancial asset\u2019s original or variable e\ufb00ective interest rate and exclude credit
\nlosses that have not yet been incurred. If, in subsequent periods, an impaired loan or receivable recovers in value (in part or in full) and this
\nrecovery can be objectively related to an event occurring after the impairment, then any amount determined to have been recovered is reversed
\nthrough the income statement.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentsOtherThanInvestmentsAccountedForUsingEquityMethodExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f38480": {
"value": "C2 Fair value measurement The Group uses the trade date method to account for regular purchases and sales of \ufb01nancial assets. The Group holds \ufb01nancial assets in
\naccordance with IAS 39, whereby subject to speci\ufb01c criteria, \ufb01nancial instruments are required to be accounted for under one of the following
\ncategories:
\n >
Financial assets and liabilities at fair value through pro\ufb01t or loss (FVTPL): this comprises assets and liabilities designated by management as
\nFVTPL on inception and derivatives. This includes instruments that are managed and the performance evaluated on a fair value basis, including
\nliabilities related to net assets attributable to unit holders of consolidated investment funds and policyholder liabilities for investment contracts
\nwithout discretionary participation features. All investments within this category are measured at fair value with all changes thereon being
\nrecognised in investment return in the income statement.
\n>
Financial investments on an available-for-sale (AFS) basis: this comprises assets that are designated by management as AFS and/or do not fall
\ninto any of the other categories. These assets are initially recognised at fair value plus attributable transaction costs and are subsequently
\nmeasured at fair value. Interest and/or dividend income is recognised in the income statement. Unrealised gains and losses are recognised in
\nother comprehensive income. Upon disposal or impairment, accumulated unrealised gains and losses are transferred from other comprehensive
\nincome to the income statement as realised gains or losses. Subsequent to the demerger of Jackson in September 2021, the Group has
\ndesignated its retained interest in Jackson (as described in note D1.2) as AFS equity securities.
\n >
Loans and receivables: except for those designated as FVTPL or AFS, these instruments comprise non-quoted investments that have \ufb01xed or
\ndeterminable payments, including loans collateralised by mortgages, deposits, loans to policyholders and other unsecured loans and
\nreceivables. These investments are initially recognised at fair value plus transaction costs. Subsequently, these instruments are carried at
\namortised cost using the e\ufb00ective interest method. The e\ufb00ective interest rate is the rate that exactly discounts estimated future cash receipts
\nthrough the expected life of the \ufb01nancial instrument or, when appropriate, a shorter period to the net carrying amount of the \ufb01nancial asset.
\nWhen assets held at amortised cost are subject to impairment testing, estimated future cash \ufb02ows are compared to the carrying value of the
\nasset. The estimated future cash \ufb02ows are discounted using the \ufb01nancial asset\u2019s original or variable e\ufb00ective interest rate and exclude credit
\nlosses that have not yet been incurred. If, in subsequent periods, an impaired loan or receivable recovers in value (in part or in full) and this
\nrecovery can be objectively related to an event occurring after the impairment, then any amount determined to have been recovered is reversed
\nthrough the income statement.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialLiabilitiesExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f38481": {
"value": "C2 Fair value measurement The Group uses the trade date method to account for regular purchases and sales of \ufb01nancial assets. The Group holds \ufb01nancial assets in
\naccordance with IAS 39, whereby subject to speci\ufb01c criteria, \ufb01nancial instruments are required to be accounted for under one of the following
\ncategories:
\n >
Financial assets and liabilities at fair value through pro\ufb01t or loss (FVTPL): this comprises assets and liabilities designated by management as
\nFVTPL on inception and derivatives. This includes instruments that are managed and the performance evaluated on a fair value basis, including
\nliabilities related to net assets attributable to unit holders of consolidated investment funds and policyholder liabilities for investment contracts
\nwithout discretionary participation features. All investments within this category are measured at fair value with all changes thereon being
\nrecognised in investment return in the income statement.
\n>
Financial investments on an available-for-sale (AFS) basis: this comprises assets that are designated by management as AFS and/or do not fall
\ninto any of the other categories. These assets are initially recognised at fair value plus attributable transaction costs and are subsequently
\nmeasured at fair value. Interest and/or dividend income is recognised in the income statement. Unrealised gains and losses are recognised in
\nother comprehensive income. Upon disposal or impairment, accumulated unrealised gains and losses are transferred from other comprehensive
\nincome to the income statement as realised gains or losses. Subsequent to the demerger of Jackson in September 2021, the Group has
\ndesignated its retained interest in Jackson (as described in note D1.2) as AFS equity securities.
\n >
Loans and receivables: except for those designated as FVTPL or AFS, these instruments comprise non-quoted investments that have \ufb01xed or
\ndeterminable payments, including loans collateralised by mortgages, deposits, loans to policyholders and other unsecured loans and
\nreceivables. These investments are initially recognised at fair value plus transaction costs. Subsequently, these instruments are carried at
\namortised cost using the e\ufb00ective interest method. The e\ufb00ective interest rate is the rate that exactly discounts estimated future cash receipts
\nthrough the expected life of the \ufb01nancial instrument or, when appropriate, a shorter period to the net carrying amount of the \ufb01nancial asset.
\nWhen assets held at amortised cost are subject to impairment testing, estimated future cash \ufb02ows are compared to the carrying value of the
\nasset. The estimated future cash \ufb02ows are discounted using the \ufb01nancial asset\u2019s original or variable e\ufb00ective interest rate and exclude credit
\nlosses that have not yet been incurred. If, in subsequent periods, an impaired loan or receivable recovers in value (in part or in full) and this
\nrecovery can be objectively related to an event occurring after the impairment, then any amount determined to have been recovered is reversed
\nthrough the income statement.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialAssetsExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f38482": {
"value": "C2 Fair value measurement The Group uses the trade date method to account for regular purchases and sales of \ufb01nancial assets. The Group holds \ufb01nancial assets in
\naccordance with IAS 39, whereby subject to speci\ufb01c criteria, \ufb01nancial instruments are required to be accounted for under one of the following
\ncategories:
\n >
Financial assets and liabilities at fair value through pro\ufb01t or loss (FVTPL): this comprises assets and liabilities designated by management as
\nFVTPL on inception and derivatives. This includes instruments that are managed and the performance evaluated on a fair value basis, including
\nliabilities related to net assets attributable to unit holders of consolidated investment funds and policyholder liabilities for investment contracts
\nwithout discretionary participation features. All investments within this category are measured at fair value with all changes thereon being
\nrecognised in investment return in the income statement.
\n>
Financial investments on an available-for-sale (AFS) basis: this comprises assets that are designated by management as AFS and/or do not fall
\ninto any of the other categories. These assets are initially recognised at fair value plus attributable transaction costs and are subsequently
\nmeasured at fair value. Interest and/or dividend income is recognised in the income statement. Unrealised gains and losses are recognised in
\nother comprehensive income. Upon disposal or impairment, accumulated unrealised gains and losses are transferred from other comprehensive
\nincome to the income statement as realised gains or losses. Subsequent to the demerger of Jackson in September 2021, the Group has
\ndesignated its retained interest in Jackson (as described in note D1.2) as AFS equity securities.
\n >
Loans and receivables: except for those designated as FVTPL or AFS, these instruments comprise non-quoted investments that have \ufb01xed or
\ndeterminable payments, including loans collateralised by mortgages, deposits, loans to policyholders and other unsecured loans and
\nreceivables. These investments are initially recognised at fair value plus transaction costs. Subsequently, these instruments are carried at
\namortised cost using the e\ufb00ective interest method. The e\ufb00ective interest rate is the rate that exactly discounts estimated future cash receipts
\nthrough the expected life of the \ufb01nancial instrument or, when appropriate, a shorter period to the net carrying amount of the \ufb01nancial asset.
\nWhen assets held at amortised cost are subject to impairment testing, estimated future cash \ufb02ows are compared to the carrying value of the
\nasset. The estimated future cash \ufb02ows are discounted using the \ufb01nancial asset\u2019s original or variable e\ufb00ective interest rate and exclude credit
\nlosses that have not yet been incurred. If, in subsequent periods, an impaired loan or receivable recovers in value (in part or in full) and this
\nrecovery can be objectively related to an event occurring after the impairment, then any amount determined to have been recovered is reversed
\nthrough the income statement.
\nC2.1
Determination of fair value
\nThe fair values of the \ufb01nancial instruments for which fair valuation is required under IFRS Standards are determined by the use of quoted market
\nprices for exchange-quoted investments, or by using quotations from independent third parties, such as brokers and pricing services or by using
\nappropriate valuation techniques.
\nThe estimated fair value of derivative \ufb01nancial instruments re\ufb02ects the estimated amount the Group would receive or pay in an arm\u2019s-length
\ntransaction. This amount is determined using quoted prices if exchange listed, quotations from independent third parties or valued internally
\nusing standard market practices.
\nOther than the loans which have been designated at fair value through pro\ufb01t or loss, the carrying value of loans and receivables is presented net
\nof provisions for impairment. The fair value of loans is estimated from discounted cash \ufb02ows expected to be received.
\nThe fair value of the subordinated and senior debt issued by the parent company is determined using quoted prices from independent third
\nparties.
\nThe fair value of \ufb01nancial liabilities (other than subordinated debt, senior debt and derivative \ufb01nancial instruments) is determined using
\ndiscounted cash \ufb02ows of the amounts expected to be paid.
\nValuation approach for level 2 fair valued assets and liabilities
\nA signi\ufb01cant proportion of the Group\u2019s level 2 assets are corporate bonds, structured securities and other non-national government debt securities.
\nThese assets, in line with market practice, are generally valued using a designated independent pricing service or quote from third-party brokers.
\nThese valuations are subject to a number of monitoring controls, such as comparison to multiple pricing sources where available, monthly price
\nvariances, stale price reviews and variance analysis on prices achieved on subsequent trades.
\nWhen prices are not available from pricing services, quotes are sourced directly from brokers. Prudential seeks to obtain a number of quotes
\nfrom di\ufb00erent brokers so as to obtain the most comprehensive information available on their executability. The selected quote is the one which
\nbest represents an executable quote for the security at the measurement date.
\nGenerally, no adjustment is made to the prices obtained from independent third parties. Adjustments are made in only limited circumstances,
\nwhere it is determined that the third-party valuations obtained do not re\ufb02ect fair value (eg either because the value is stale and/or the values are
\nextremely diverse in range). Securities valued in such manner are classi\ufb01ed as level 3 where these signi\ufb01cant inputs are not based on observable
\nmarket data.
\nValuation approach for level 3 fair valued assets and liabilities
\nInvestments valued using valuation techniques include \ufb01nancial investments which by their nature do not have an externally quoted price based
\non regular trades, and \ufb01nancial investments for which markets are no longer active as a result of market conditions, eg market illiquidity.
\nThe Group\u2019s valuation policies, procedures and analyses for instruments categorised as level 3 are overseen by Business Unit committees as
\npart of the Group\u2019s wider \ufb01nancial reporting governance processes. The procedures undertaken include approval of valuation methodologies,
\nveri\ufb01cation processes, and resolution of signi\ufb01cant or complex valuation issues. In addition, the Group has minimum standards for independent
\nprice veri\ufb01cation to ensure valuation accuracy is regularly independently veri\ufb01ed. Adherence to this policy is monitored across the business units.
\n315
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\nGroup overview
Strategic report
Governance
Directors\u2019 remuneration report
European Embedded Value (EEV) basis results
Additional information
Financial statements
C Financial position
/ continued
\nC2 Fair value measurement
continued
\nC2.2
Fair value measurement hierarchy of Group assets and liabilities
\n(a) Assets and liabilities carried at fair value on the statement of \ufb01nancial position
\nThe table below shows the assets and liabilities carried at fair value analysed by level of the IFRS 13 \u2018Fair Value Measurement\u2019 de\ufb01ned fair value
\nhierarchy. This hierarchy is based on the inputs to the fair value measurement and re\ufb02ects the lowest level input that is signi\ufb01cant to that
\nmeasurement.
\nAll assets and liabilities held at fair value are classi\ufb01ed as fair value through pro\ufb01t or loss, except for $266 million of \ufb01nancial assets classi\ufb01ed as
\navailable-for-sale at 31 December 2022 (31 December 2021: $909 million), all of which (31 December 2021: $683 million) related to the Group\u2019s
\nretained interest in Jackson\u2019s equity securities. All assets and liabilities held at fair value are measured on a recurring basis. As of 31 December
\n2022, the Group did not have any \ufb01nancial instruments that are measured at fair value on a non-recurring basis.
\nFinancial instruments at fair value
\n31 Dec 2022
$m
\nLevel 1
Level 2
Level 3
\nQuoted prices
\n(unadjusted)
\nin active
\nmarkets
\nValuation based
\non signi\ufb01cant
\nobservable
\nmarket inputs
\nnote (i)
\nValuation based
\non signi\ufb01cant
\nunobservable
\nmarket inputs
\nnote (ii)
\nTotal
\nLoans
\u2013
447
3
450
\nEquity securities and holdings in collective investment schemes
49,725
7,130
824
57,679
\nDebt securities
57,215
19,736
38
76,989
\nDerivative assets
82
487
\u2013
569
\nDerivative liabilities
(778)
(223)
\u2013
(1,001)
\nTotal \ufb01nancial investments, net of derivative liabilities
106,244
27,577
865
134,686
\nInvestment contract liabilities without discretionary participation features
\u2013
(741)
\u2013
(741)
\nNet asset value attributable to unit holders of consolidated investment funds
(4,193)
\u2013
\u2013
(4,193)
\nTotal \ufb01nancial instruments at fair value
102,051
26,836
865
129,752
\nPercentage of total (%)
78%
21%
1%
100%
\nAnalysed by business type:
\nFinancial investments net of derivative liabilities, at fair value
\nWith-pro\ufb01ts
65,880
14,605
748
81,233
\nUnit-linked
21,319
1,851
4
23,174
\nNon-linked shareholder-backed business
19,045
11,121
113
30,279
\nTotal \ufb01nancial investments net of derivative liabilities, at fair value
106,244
27,577
865
134,686
\nPercentage of total (%)
78%
21%
1%
100%
\nTotal \ufb01nancial investments net of derivative liabilities, at fair value
106,244
27,577
865
134,686
\nOther \ufb01nancial liabilities at fair value
(4,193)
(741)
\u2013
(4,934)
\nTotal \ufb01nancial instruments at fair value
102,051
26,836
865
129,752
\n316
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31 Dec 2021
$m
\nLevel 1
Level 2
Level 3
\nQuoted prices
\n(unadjusted)
\nin active
\nmarkets
\nValuation based
\non signi\ufb01cant
\nobservable
\nmarket inputs
\nnote (i)
\nValuation based
\non signi\ufb01cant
\nunobservable
\nmarket inputs
\nnote (ii)
\nTotal
\nLoans
\u2013
616
5
621
\nEquity securities and holdings in collective investment schemes
54,107
6,917
577
61,601
\nDebt securities
76,049
22,987
58
99,094
\nDerivative assets
359
122
\u2013
481
\nDerivative liabilities
(146)
(116)
\u2013
(262)
\nTotal \ufb01nancial investments, net of derivative liabilities
130,369
30,526
640
161,535
\nInvestment contract liabilities without discretionary participation features
\u2013
(814)
\u2013
(814)
\nNet asset value attributable to unit holders of consolidated investment funds
(5,618)
(46)
\u2013
(5,664)
\nTotal \ufb01nancial instruments at fair value
124,751
29,666
640
155,057
\nPercentage of total (%)
81%
19%
0%
100%
\nAnalysed by business type:
\nFinancial investments net of derivative liabilities, at fair value
\nWith-pro\ufb01ts
82,489
15,438
506
98,433
\nUnit-linked
24,024
2,343
5
26,372
\nNon-linked shareholder-backed business
23,856
12,745
129
36,730
\nTotal \ufb01nancial investments net of derivative liabilities, at fair value
130,369
30,526
640
161,535
\nPercentage of total (%)
81%
19%
0%
100%
\nTotal \ufb01nancial investments net of derivative liabilities, at fair value
130,369
30,526
640
161,535
\nOther \ufb01nancial liabilities at fair value
(5,618)
(860)
\u2013
(6,478)
\nTotal \ufb01nancial instruments at fair value
124,751
29,666
640
155,057
\nNotes
\n(i)
Of the total level 2 debt securities of $19,736 million at 31 December 2022 (31 December 2021: $22,987 million), $37 million (31 December 2021: $24 million) are valued internally.
\n(ii)
At 31 December 2022, the Group held $865 million (31 December 2021: $640 million) of net \ufb01nancial instruments at fair value within level 3. This represents less than 1 per cent of the total
\nfair-valued \ufb01nancial assets, net of \ufb01nancial liabilities, for both years and comprises the following items:
\n\u2013
Equity securities and holdings in collective investment schemes of $824 million (31 December 2021: $557 million) consisting primarily of property and infrastructure funds held by the
\nparticipating funds, which are externally valued using the net asset value of the invested entities. Equity securities of $1 million (31 December 2021: $1 million) are internally valued,
\nrepresenting less than 0.1 per cent for all periods of the total fair-valued \ufb01nancial assets net of \ufb01nancial liabilities. Internal valuations are inherently more subjective than external valuations;
\nand
\n\u2013
Other sundry individual \ufb01nancial instruments of a net asset of $41 million (31 December 2021: net asset of $63 million).
\nOf the net \ufb01nancial instruments of $865 million at 31 December 2022 (31 December 2021: $640 million) referred to above:
\n\u2013
A net asset of $752 million (31 December 2021: $511 million) is held by the Group\u2019s with-pro\ufb01ts and unit-linked funds and therefore shareholders\u2019 pro\ufb01t and equity are not impacted by
\nmovements in the valuation of these \ufb01nancial instruments; and
\n\u2013
A net asset of $113 million (31 December 2021: $129 million) is held to support non-linked shareholder-backed business, of which $111 million (31 December 2021: $112 million) are
\nprimarily private equity investments and corporate bonds externally valued using the net asset value of the invested entities and external prices adjusted to re\ufb02ect the speci\ufb01c known
\nconditions relating to these bonds (eg distressed securities) and are therefore inherently less subjective than internal valuations. If the value of all these level 3 \ufb01nancial instruments
\ndecreased by 10 per cent, the change in valuation would be $(11) million (31 December 2021: $(13) million), which would reduce shareholders\u2019 equity by this amount before tax.
\nAll\u00a0of\u00a0this\u00a0amount would pass through the income statement substantially as part of short-term \ufb02uctuations in investment returns outside of adjusted operating pro\ufb01t.
\n(b) Transfers into and transfers out of levels
\nThe Group\u2019s policy is to recognise transfers into and out of levels as of the end of each reporting period except for material transfers which are
\nrecognised 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
\nmaterial change in the observed valuation inputs or a change in the level of trading activities of the securities.
\nDuring 2022, the transfers between levels within the portfolios were primarily transfers from level 1 to level 2 of $2,640 million (31 December
\n2021: $3,789 million) and transfers from level 2 to level 1 of $1,982 million (31 December 2021: $1,742 million). These transfers primarily re\ufb02ect
\nthe change in the observed valuation inputs of equity securities and debt securities and, in certain cases, the change in the level of trading
\nactivities of the securities. There were transfers from level 3 to level 2 of $15 million in the year (31 December 2021: $12 million) and no transfers
\ninto level 3 (31 December 2021: $30 million).
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European Embedded Value (EEV) basis results
Additional information
Financial statements
C Financial position
/ continued
\nC2 Fair value measurement
continued
\nC2.2
Fair value measurement hierarchy of Group assets and liabilities
continued
\nReconciliation of movements in level 3 assets and liabilities measured at fair value
\nThe following table reconciles the value of level 3 fair valued assets and liabilities at the beginning and end of the years shown.
\nTotal investment return recorded in the income statement represents interest and dividend income, realised gains and losses, unrealised gains
\nand losses on the assets classi\ufb01ed at fair value through pro\ufb01t and loss and foreign exchange movements on an individual entity\u2019s overseas
\ninvestments. Total gains and losses recorded in other comprehensive income comprises the translation of investments into the Group\u2019s
\npresentational currency of USD.
\n2022
$m
\nLoans
\nEquity securities
\nand holdings in
\ncollective
\ninvestment
\nschemes
\nDebt
\nsecurities
\nGroup
\ntotal
\nBalance at 1 Jan
5
577
58
640
\nTotal losses in income statement
\nnote
\n(2)
(31)
(2)
(35)
\nTotal losses recorded in other comprehensive income
\u2013
(6)
(3)
(9)
\nPurchases and other additions
\u2013
305
\u2013
305
\nSales
\u2013
(21)
\u2013
(21)
\nTransfers out of level 3
\u2013
\u2013
(15)
(15)
\nBalance at 31 Dec
3
824
38
865
\n2021
$m
\nLoans
\nEquity securities
\nand holdings in
\ncollective
\ninvestment
\nschemes
\nDebt
\nsecurities
\nGroup
\ntotal
\nBalance at 1 Jan
6
445
33
484
\nTotal (losses) gains in income statement
\nnote
\n(1)
6
(3)
2
\nTotal losses recorded in other comprehensive income
\u2013
(5)
(2)
(7)
\nPurchases and other additions
\u2013
143
\u2013
143
\nTransfers (out of) into level 3
\u2013
(12)
30
18
\nBalance at 31 Dec
5
577
58
640
\nNote
\nOf the total net losses in the income statement of $(35) million in 2022 (2021: net gains of $2 million), $(12) million (2021: $2 million) relates to net unrealised gains and losses of \ufb01nancial instruments
\nstill held at the end of the year, which can be analysed as follows:
\n2022
\n$m
\n2021
\n$m
\nLoans
(2)
(1)
\nEquity securities and holdings in collective investment schemes
(8)
6
\nDebt securities
(2)
(3)
\nTotal net (losses) gains
(12)
2
\n(c) Assets and liabilities at amortised cost and their fair value
\nThe table below shows the \ufb01nancial assets and liabilities carried at amortised cost on the statement of \ufb01nancial position and their fair value. Cash
\ndeposits, accrued income, other debtors, accruals, deferred income and other liabilities are excluded from the analysis below, as these are carried
\nat amortised cost which approximates fair value. The carrying value of investment contracts with discretionary participation features is on an
\nIFRS\u00a04 basis, which is also excluded from the analysis below, as it is impractical to determine the fair value of these contracts due to the lack of
\na\u00a0reliable basis to measure participation features.
\n31 Dec 2022
$m
31 Dec 2021
$m
\nCarrying
\nvalue
\nFair
\nvalue
\nCarrying
\nvalue
\nFair
\nvalue
\nAssets
\nLoans
2,086
2,207
1,941
2,152
\nLiabilities
\nCore structural borrowings of shareholder-\ufb01nanced businesses
(4,261)
(3,834)
(6,127)
(6,565)
\nOperational borrowings (excluding lease liabilities)
(516)
(516)
(514)
(514)
\nObligations under funding, securities lending and sale and repurchase agreements
(582)
(582)
(223)
(223)
\nTotal net \ufb01nancial liabilities at amortised cost
(3,273)
(2,725)
(4,923)
(5,150)
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The fair value of the assets and liabilities in the table above, with the exception of the subordinated and senior debt issued by the parent company,
\nhas been estimated from the discounted cash \ufb02ows expected to be received or paid. All the assets and liabilities in the table above have been
\nclassi\ufb01ed within level 2 at 31 December 2022 and 2021, re\ufb02ecting the observability of the inputs used to derive their fair value. The fair value of
\nthe subordinated and senior debt issued by the parent company is determined using quoted prices from independent third parties.
\nC2.3
Additional information on \ufb01nancial instruments
\n(a) Financial risk
\nLiquidity analysis
\nContractual maturities of \ufb01nancial liabilities on an undiscounted cash \ufb02ow basis
\nThe following table sets out the contractual maturities for applicable classes of \ufb01nancial liabilities, excluding derivative liabilities and investment
\ncontracts that are separately presented. The \ufb01nancial liabilities are included in the column relating to the contractual maturities of the
\nundiscounted cash \ufb02ows (including contractual interest payments) based on the earliest period in which the Group can be required to pay
\nassuming conditions are consistent with those of year end.
\n31 Dec 2022
$m
\nTotal
\ncarrying
\nvalue
\nContractual maturity pro\ufb01le for \ufb01nancial liabilities
\n1 year
\nor less
\n1-2
\nyears
\n2-5
\nyears
\n5-10
\nyears
\n10-15
\nyears
\n15-20
\nyears
\nOver
\n20 years
\nNo stated
\nmaturity
\nTotal
\nundiscounted
\ncash \ufb02ows
\nCore structural borrowings of
\nshareholder-\ufb01nanced
\nbusinesses
\nnote C5.1
\n4,261
509
124
370
2,598
1,024
\u2013
\u2013
750
5,375
\nLease liabilities under IFRS 16
\nnote C5.2
\n299
101
76
127
28
9
\u2013
\u2013
\u2013
341
\nOther operational borrowings
\nnote C5.2
\n516
516
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
516
\nObligations under funding,
\nsecurities lending and sale and
\nrepurchase agreements
582
582
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
582
\nAccruals, deferred income and
\nother liabilities
8,777
6,258
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
2,519
8,777
\nNet asset value attributable to unit
\nholders of consolidated unit
\ntrusts and similar funds
4,193
4,193
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
4,193
\nTotal \ufb01nancial liabilities
18,628
12,159
200
497
2,626
1,033
\u2013
\u2013
3,269
19,784
\n31 Dec 2021
$m
\nTotal
\ncarrying
\nvalue
\nContractual maturity pro\ufb01le for \ufb01nancial liabilities
\n1 year
\nor less
\n1-2
\nyears
\n2-5
\nyears
\n5-10
\nyears
\n10-15
\nyears
\n15-20
\nyears
\nOver
\n20 years
\nNo stated
\nmaturity
\nTotal
\nundiscounted
\ncash \ufb02ows
\nCore structural borrowings of
\nshareholder-\ufb01nanced
\nbusinesses
\nnote C5.1
\n6,127
1,872
551
702
1,817
1,642
\u2013
\u2013
750
7,334
\nLease liabilities under IFRS 16
\nnote C5.2
\n347
110
81
135
45
11
\u2013
\u2013
\u2013
382
\nOther operational borrowings
\nnote C5.2
\n514
514
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
514
\nObligations under funding,
\nsecurities lending and sale and
\nrepurchase agreements
223
223
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
223
\nAccruals, deferred income and
\nother liabilities
7,983
5,972
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
2,011
7,983
\nNet asset value attributable to unit
\nholders of consolidated unit
\ntrusts and similar funds
5,664
5,664
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
5,664
\nTotal \ufb01nancial liabilities
20,858
14,355
632
837
1,862
1,653
\u2013
\u2013
2,761
22,100
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European Embedded Value (EEV) basis results
Additional information
Financial statements
C Financial position
/ continued
\nC2 Fair value measurement
continued
\nC2.3
Additional information on \ufb01nancial instruments
continued
\nMaturity analysis of derivatives
\nThe following table shows the carrying value of the gross and net derivative positions.
\nCarrying value of net derivatives
$m
\nDerivative
\nassets
\nDerivative
\nliabilities
\nNet
\nderivative
\nposition
\n31 Dec 2022
569
(1,001)
(432)
\n31 Dec 2021
481
(262)
219
\nAll net derivatives have been included at fair value due within one year or less, representing the basis on which they are managed (ie to manage
\nprincipally asset or liability value exposures). The Group has no cash \ufb02ow hedges and, in general, contractual maturities are not considered
\nessential for an understanding of the timing of the cash \ufb02ows for these instruments.
\nMaturity analysis of investment contracts
\nThe table below shows the maturity pro\ufb01le for investment contracts based on undiscounted cash \ufb02ow projections of expected bene\ufb01t payments.
\nMaturity pro\ufb01le for investment contracts
$m
\nTotal
\ncarrying
\nvalue
\n1 year
\nor less
\n1-5
\nyears
\n5-10
\nyears
\n10-15
\nyears
\n15-20
\nyears
\nOver
\n20 years
\nTotal
\nundiscounted
\ncash \ufb02ows
\n31 Dec 2022
420
11
369
98
22
8
4
512
\n31 Dec 2021
459
14
442
63
16
6
2
543
\nThe undiscounted cash \ufb02ows in the maturity pro\ufb01le shown above excludes contracts which have no stated maturity but which are repayable on
\ndemand.
\nMost investment contracts have options to surrender early, often subject to surrender or other penalties. Therefore, most contracts can be said
\nto have a contractual maturity of less than one year, but the additional charges and term of the contracts mean these are unlikely to be exercised
\nin practice and the more useful information is to present information on expected payment.
\nThe vast majority of the Group\u2019s \ufb01nancial assets are held to back the Group\u2019s policyholder liabilities. Although asset/liability matching is an
\nimportant component of managing policyholder liabilities (both those classi\ufb01ed as insurance and those classi\ufb01ed as investments), this pro\ufb01le is
\nmainly relevant for managing market risk rather than liquidity risk. Within each business unit, this asset/liability matching is performed on a
\nportfolio-by-portfolio basis.
\nIn terms of liquidity risk, a large proportion of the policyholder liabilities contain discretionary surrender values or surrender charges, meaning
\nthat many of the Group\u2019s liabilities are expected to be held for the long term. Much of the Group\u2019s investment portfolios are in marketable
\nsecurities, which can therefore be converted quickly to liquid assets.
\nFor the reasons provided above, an analysis of the Group\u2019s assets by contractual maturity is not considered meaningful to evaluate the nature
\nand extent of the Group\u2019s liquidity risk.
\nCredit risk
\nThe Group\u2019s maximum exposure to credit risk of \ufb01nancial instruments before any allowance for collateral or allocation of losses to policyholders is
\nrepresented by the carrying value of \ufb01nancial instruments on the balance sheet that have exposures to credit risk comprising cash and cash
\nequivalents, deposits, debt securities, loans and derivative assets, accrued investment income and other debtors. Further details of collateral in
\nplace in relation to derivatives, securities lending, repurchase and reverse repurchase agreements and other transactions are provided in note (c)
\nbelow. The Group\u2019s exposure to credit risk is further discussed in the Risk review report.
\nOf the total loans and receivables held at 31 December 2022, $6 million (31 December 2021: $7 million) are past their due date but are not
\nimpaired, of which $1 million are less than one year past their due date (31 December 2021: $2 million). The Group expects full recovery of these
\nloans and receivables.
\nThere are no \ufb01nancial assets that would have been past due or impaired had the terms not been renegotiated in both years.
\nIn addition, the Group did not take possession of any other collateral held as security in both years.
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Foreign exchange risk
\nAs at 31 December 2022, the Group held 27 per cent (31 December 2021: 26 per cent) of its \ufb01nancial assets and 64 per cent (31 December 2021:
\n63 per cent) of its \ufb01nancial liabilities in currencies mainly USD, other than the functional currency of the relevant business units or the currency to
\nwhich the functional currency is pegged (eg \ufb01nancial assets and liabilities of USD denominated business in Hong Kong). The exchange risks
\ninherent in these exposures are mitigated through the use of derivatives, mainly forward currency contracts and currency swaps as described in
\nnote (b) below.
\nThe amount of exchange gain recognised in the income statement in 2022, except for those arising on \ufb01nancial instruments measured at fair
\nvalue through pro\ufb01t or loss, is $234 million (2021: loss of $(132) million).
\n(b) Derivatives and hedging
\nDerivative \ufb01nancial instruments are used to reduce or manage investment, interest rate and currency exposures, to facilitate e\ufb03cient portfolio
\nmanagement and for investment purposes.
\nThe Group does not regularly seek to apply fair value or cash \ufb02ow hedging treatment under IAS 39. The Group has no net investment, fair value
\nor cash \ufb02ow hedges under IAS 39 at 31 December 2022 and 2021. All derivatives that are not designated as hedging instruments are carried at fair
\nvalue, with movements in fair value being recorded in the income statement.
\nEmbedded derivatives are embedded within other non-derivative host \ufb01nancial instruments and insurance contracts to create hybrid
\ninstruments. Embedded derivatives meeting the de\ufb01nition of an insurance contract are accounted for under IFRS 4. Where economic
\ncharacteristics and risks of the embedded derivatives are not closely related to the economic characteristics and risks of the host instrument, and
\nwhere the hybrid instrument is not measured at fair value with the changes in fair value recognised in the income statement, the embedded
\nderivative is required to be bifurcated and carried at fair value as a derivative measured in accordance with IAS 39.
\nIn addition, the Group applies the option under IFRS 4 to not separate and fair value surrender options embedded in host contracts and
\nwith-pro\ufb01ts investment contracts whose strike price is either a \ufb01xed amount or a \ufb01xed amount plus interest.
\nDerivatives held and their purpose
\nThe Group enters into a variety of exchange traded and over-the-counter derivative \ufb01nancial instruments, including futures, options, forward
\ncontracts, swaps and swaptions.
\nAll over-the-counter derivative transactions are conducted under standardised ISDA (International Swaps and Derivatives Association Inc)
\nmaster agreements and collateral agreements are in place between the individual entities and relevant counterparties under each of these
\nmarket master agreements.
\nDerivatives are used for e\ufb03cient portfolio management to obtain cost e\ufb00ective and management of exposure to various markets in
\naccordance with the Group\u2019s investment strategies and to manage exposure to interest rate, currency, credit and other business risks. The Group
\nalso uses interest rate derivatives to reduce exposure to interest rate volatility.
\n(c) Derecognition, collateral and o\ufb00setting
\nDerecognition of \ufb01nancial assets and liabilities
\nThe Group\u2019s policy is to derecognise \ufb01nancial assets when it is deemed that substantially all the risks and rewards of ownership have been
\ntransferred.
\nThe Group derecognises \ufb01nancial liabilities only when the obligation speci\ufb01ed in the contract is discharged, cancelled or has expired.
\nReverse repurchase agreements
\nThe Group is party to various reverse repurchase agreements under which securities are purchased from third parties with an obligation to resell
\nthe securities. The securities are not recognised as investments in the statement of \ufb01nancial position but the right to receive the cash paid is
\nrecognised as deposits.
\nThe Group has entered into reverse repurchase transactions under which it purchased securities and had taken on the obligation to resell the
\nsecurities. At 31 December 2022, the fair value of the collateral held in respect of these transactions, which is represented by the purchased
\nsecurities, was $3,244 million (31 December 2021: $2,149 million).
\nSecurities lending and repurchase agreements
\nThe Group is also party to various securities lending agreements (including repurchase agreements) under which securities are loaned to third
\nparties on a short-term basis. The loaned securities are not derecognised; rather, they continue to be recognised within the appropriate investment
\nclassi\ufb01cation. To the extent cash collateral is received it is recognised on the statement of \ufb01nancial position with the obligation to repay the cash
\npaid recognised as a liability. Other collateral is not recognised.
\nAt 31 December 2022, the Group had $1,571 million (31 December 2021: $854 million) of lent securities and assets subject to repurchase
\nagreements. The cash and securities collateral held or pledged under such agreements were $1,679 million (31 December 2021: $913 million).
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Governance
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Additional information
Financial statements
C Financial position
/ continued
\nC2 Fair value measurement
continued
\nC2.3
Additional information on \ufb01nancial instruments
continued
\nCollateral and pledges under derivative transactions
\nAt 31 December 2022, the Group had pledged $62 million (31 December 2021: $99 million) for liabilities and held collateral of $234 million
\n(31 December 2021: $50 million) in respect of over-the-counter derivative transactions. These transactions are conducted under terms that are
\nusual and customary to collateralised transactions including, where relevant, standard securities lending and repurchase agreements.
\nThe Group has entered into collateral arrangements in relation to over-the-counter derivative transactions, which permit sale or re-pledging of
\nunderlying collateral. The Group has not sold any collateral held or re-pledged any collateral.
\nAll over-the-counter derivative transactions are conducted under standardised International Swaps and Derivatives Association (ISDA) master
\nagreements. The collateral management for these transactions is conducted under the usual and customary terms and conditions set out in the
\nCredit Support Annex to the ISDA master agreement.
\nO\ufb00setting assets and liabilities
\nThe Group\u2019s derivative instruments, repurchase agreements and securities lending agreements are subject to master netting arrangements and
\ncollateral arrangements. A master netting arrangement with a counterparty creates a right of o\ufb00set for amounts due to and due from that same
\ncounterparty that is enforceable in the event of a default or bankruptcy. The Group recognises amounts subject to master netting arrangements
\non a gross basis within the consolidated balance sheets.
\nThe following tables present the gross and net information about the Group\u2019s \ufb01nancial instruments subject to master netting arrangements:
\n31 Dec 2022
$m
\nGross amount
\nincluded in the
\nbalance sheet
\nnote (i)
\nRelated amounts not o\ufb00set in the balance sheet
\nNet
\namount
\nnote (iv)
\nFinancial
\ninstruments
\nnote (ii)
\nCash
\ncollateral
\nSecurities
\ncollateral
\nnote (iii)
\nFinancial assets:
\nDerivative assets
457
(179)
(217)
\u2013
61
\nReverse repurchase agreements
3,174
\u2013
\u2013
(3,174)
\u2013
\nTotal \ufb01nancial assets
3,631
(179)
(217)
(3,174)
61
\nFinancial liabilities:
\nDerivative liabilities
(284)
179
27
6
(72)
\nSecurities lending and repurchase agreements
(582)
\u2013
13
566
(3)
\nTotal \ufb01nancial liabilities
(866)
179
40
572
(75)
\n31 Dec 2021
$m
\nGross amount
\nincluded in the
\nbalance sheet
\nnote (i)
\nRelated amounts not o\ufb00set in the balance sheet
\nNet
\namount
\nnote (iv)
\nFinancial
\ninstruments
\nnote (ii)
\nCash
\ncollateral
\nSecurities
\ncollateral
\nnote (iii)
\nFinancial assets:
\nDerivative assets
170
(94)
(31)
(1)
44
\nReverse repurchase agreements
2,135
\u2013
\u2013
(2,134)
1
\nTotal \ufb01nancial assets
2,305
(94)
(31)
(2,135)
45
\nFinancial liabilities:
\nDerivative liabilities
(165)
94
63
\u2013
(8)
\nSecurities lending and repurchase agreements
(222)
\u2013
153
69
\u2013
\nTotal \ufb01nancial liabilities
(387)
94
216
69
(8)
\nNotes
\n(i)
The Group has not o\ufb00set any of the amounts included in the balance sheet.
\n(ii)
Represents the amount that could be o\ufb00set under master netting or similar arrangements where the Group does not satisfy the full criteria to o\ufb00set in the balance sheet.
\n(iii)
Excludes initial margin amounts for exchange-traded derivatives.
\n(iv)
In the tables above, the amounts of assets or liabilities included in the balance sheet would be o\ufb00set \ufb01rst by \ufb01nancial instruments that have the right of o\ufb00set under master netting or similar
\narrangements with any remaining amount reduced by the amount of cash and securities collateral. The actual amount of collateral may be greater than amounts presented in the tables.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfFairValueMeasurementExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f38483": {
"value": "C2 Fair value measurement The Group uses the trade date method to account for regular purchases and sales of \ufb01nancial assets. The Group holds \ufb01nancial assets in
\naccordance with IAS 39, whereby subject to speci\ufb01c criteria, \ufb01nancial instruments are required to be accounted for under one of the following
\ncategories:
\n >
Financial assets and liabilities at fair value through pro\ufb01t or loss (FVTPL): this comprises assets and liabilities designated by management as
\nFVTPL on inception and derivatives. This includes instruments that are managed and the performance evaluated on a fair value basis, including
\nliabilities related to net assets attributable to unit holders of consolidated investment funds and policyholder liabilities for investment contracts
\nwithout discretionary participation features. All investments within this category are measured at fair value with all changes thereon being
\nrecognised in investment return in the income statement.
\n>
Financial investments on an available-for-sale (AFS) basis: this comprises assets that are designated by management as AFS and/or do not fall
\ninto any of the other categories. These assets are initially recognised at fair value plus attributable transaction costs and are subsequently
\nmeasured at fair value. Interest and/or dividend income is recognised in the income statement. Unrealised gains and losses are recognised in
\nother comprehensive income. Upon disposal or impairment, accumulated unrealised gains and losses are transferred from other comprehensive
\nincome to the income statement as realised gains or losses. Subsequent to the demerger of Jackson in September 2021, the Group has
\ndesignated its retained interest in Jackson (as described in note D1.2) as AFS equity securities.
\n >
Loans and receivables: except for those designated as FVTPL or AFS, these instruments comprise non-quoted investments that have \ufb01xed or
\ndeterminable payments, including loans collateralised by mortgages, deposits, loans to policyholders and other unsecured loans and
\nreceivables. These investments are initially recognised at fair value plus transaction costs. Subsequently, these instruments are carried at
\namortised cost using the e\ufb00ective interest method. The e\ufb00ective interest rate is the rate that exactly discounts estimated future cash receipts
\nthrough the expected life of the \ufb01nancial instrument or, when appropriate, a shorter period to the net carrying amount of the \ufb01nancial asset.
\nWhen assets held at amortised cost are subject to impairment testing, estimated future cash \ufb02ows are compared to the carrying value of the
\nasset. The estimated future cash \ufb02ows are discounted using the \ufb01nancial asset\u2019s original or variable e\ufb00ective interest rate and exclude credit
\nlosses that have not yet been incurred. If, in subsequent periods, an impaired loan or receivable recovers in value (in part or in full) and this
\nrecovery can be objectively related to an event occurring after the impairment, then any amount determined to have been recovered is reversed
\nthrough the income statement.
\nC2.1
Determination of fair value
\nThe fair values of the \ufb01nancial instruments for which fair valuation is required under IFRS Standards are determined by the use of quoted market
\nprices for exchange-quoted investments, or by using quotations from independent third parties, such as brokers and pricing services or by using
\nappropriate valuation techniques.
\nThe estimated fair value of derivative \ufb01nancial instruments re\ufb02ects the estimated amount the Group would receive or pay in an arm\u2019s-length
\ntransaction. This amount is determined using quoted prices if exchange listed, quotations from independent third parties or valued internally
\nusing standard market practices.
\nOther than the loans which have been designated at fair value through pro\ufb01t or loss, the carrying value of loans and receivables is presented net
\nof provisions for impairment. The fair value of loans is estimated from discounted cash \ufb02ows expected to be received.
\nThe fair value of the subordinated and senior debt issued by the parent company is determined using quoted prices from independent third
\nparties.
\nThe fair value of \ufb01nancial liabilities (other than subordinated debt, senior debt and derivative \ufb01nancial instruments) is determined using
\ndiscounted cash \ufb02ows of the amounts expected to be paid.
\nValuation approach for level 2 fair valued assets and liabilities
\nA signi\ufb01cant proportion of the Group\u2019s level 2 assets are corporate bonds, structured securities and other non-national government debt securities.
\nThese assets, in line with market practice, are generally valued using a designated independent pricing service or quote from third-party brokers.
\nThese valuations are subject to a number of monitoring controls, such as comparison to multiple pricing sources where available, monthly price
\nvariances, stale price reviews and variance analysis on prices achieved on subsequent trades.
\nWhen prices are not available from pricing services, quotes are sourced directly from brokers. Prudential seeks to obtain a number of quotes
\nfrom di\ufb00erent brokers so as to obtain the most comprehensive information available on their executability. The selected quote is the one which
\nbest represents an executable quote for the security at the measurement date.
\nGenerally, no adjustment is made to the prices obtained from independent third parties. Adjustments are made in only limited circumstances,
\nwhere it is determined that the third-party valuations obtained do not re\ufb02ect fair value (eg either because the value is stale and/or the values are
\nextremely diverse in range). Securities valued in such manner are classi\ufb01ed as level 3 where these signi\ufb01cant inputs are not based on observable
\nmarket data.
\nValuation approach for level 3 fair valued assets and liabilities
\nInvestments valued using valuation techniques include \ufb01nancial investments which by their nature do not have an externally quoted price based
\non regular trades, and \ufb01nancial investments for which markets are no longer active as a result of market conditions, eg market illiquidity.
\nThe Group\u2019s valuation policies, procedures and analyses for instruments categorised as level 3 are overseen by Business Unit committees as
\npart of the Group\u2019s wider \ufb01nancial reporting governance processes. The procedures undertaken include approval of valuation methodologies,
\nveri\ufb01cation processes, and resolution of signi\ufb01cant or complex valuation issues. In addition, the Group has minimum standards for independent
\nprice veri\ufb01cation to ensure valuation accuracy is regularly independently veri\ufb01ed. Adherence to this policy is monitored across the business units.
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Strategic report
Governance
Directors\u2019 remuneration report
European Embedded Value (EEV) basis results
Additional information
Financial statements
C Financial position
/ continued
\nC2 Fair value measurement
continued
\nC2.2
Fair value measurement hierarchy of Group assets and liabilities
\n(a) Assets and liabilities carried at fair value on the statement of \ufb01nancial position
\nThe table below shows the assets and liabilities carried at fair value analysed by level of the IFRS 13 \u2018Fair Value Measurement\u2019 de\ufb01ned fair value
\nhierarchy. This hierarchy is based on the inputs to the fair value measurement and re\ufb02ects the lowest level input that is signi\ufb01cant to that
\nmeasurement.
\nAll assets and liabilities held at fair value are classi\ufb01ed as fair value through pro\ufb01t or loss, except for $266 million of \ufb01nancial assets classi\ufb01ed as
\navailable-for-sale at 31 December 2022 (31 December 2021: $909 million), all of which (31 December 2021: $683 million) related to the Group\u2019s
\nretained interest in Jackson\u2019s equity securities. All assets and liabilities held at fair value are measured on a recurring basis. As of 31 December
\n2022, the Group did not have any \ufb01nancial instruments that are measured at fair value on a non-recurring basis.
\nFinancial instruments at fair value
\n31 Dec 2022
$m
\nLevel 1
Level 2
Level 3
\nQuoted prices
\n(unadjusted)
\nin active
\nmarkets
\nValuation based
\non signi\ufb01cant
\nobservable
\nmarket inputs
\nnote (i)
\nValuation based
\non signi\ufb01cant
\nunobservable
\nmarket inputs
\nnote (ii)
\nTotal
\nLoans
\u2013
447
3
450
\nEquity securities and holdings in collective investment schemes
49,725
7,130
824
57,679
\nDebt securities
57,215
19,736
38
76,989
\nDerivative assets
82
487
\u2013
569
\nDerivative liabilities
(778)
(223)
\u2013
(1,001)
\nTotal \ufb01nancial investments, net of derivative liabilities
106,244
27,577
865
134,686
\nInvestment contract liabilities without discretionary participation features
\u2013
(741)
\u2013
(741)
\nNet asset value attributable to unit holders of consolidated investment funds
(4,193)
\u2013
\u2013
(4,193)
\nTotal \ufb01nancial instruments at fair value
102,051
26,836
865
129,752
\nPercentage of total (%)
78%
21%
1%
100%
\nAnalysed by business type:
\nFinancial investments net of derivative liabilities, at fair value
\nWith-pro\ufb01ts
65,880
14,605
748
81,233
\nUnit-linked
21,319
1,851
4
23,174
\nNon-linked shareholder-backed business
19,045
11,121
113
30,279
\nTotal \ufb01nancial investments net of derivative liabilities, at fair value
106,244
27,577
865
134,686
\nPercentage of total (%)
78%
21%
1%
100%
\nTotal \ufb01nancial investments net of derivative liabilities, at fair value
106,244
27,577
865
134,686
\nOther \ufb01nancial liabilities at fair value
(4,193)
(741)
\u2013
(4,934)
\nTotal \ufb01nancial instruments at fair value
102,051
26,836
865
129,752
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31 Dec 2021
$m
\nLevel 1
Level 2
Level 3
\nQuoted prices
\n(unadjusted)
\nin active
\nmarkets
\nValuation based
\non signi\ufb01cant
\nobservable
\nmarket inputs
\nnote (i)
\nValuation based
\non signi\ufb01cant
\nunobservable
\nmarket inputs
\nnote (ii)
\nTotal
\nLoans
\u2013
616
5
621
\nEquity securities and holdings in collective investment schemes
54,107
6,917
577
61,601
\nDebt securities
76,049
22,987
58
99,094
\nDerivative assets
359
122
\u2013
481
\nDerivative liabilities
(146)
(116)
\u2013
(262)
\nTotal \ufb01nancial investments, net of derivative liabilities
130,369
30,526
640
161,535
\nInvestment contract liabilities without discretionary participation features
\u2013
(814)
\u2013
(814)
\nNet asset value attributable to unit holders of consolidated investment funds
(5,618)
(46)
\u2013
(5,664)
\nTotal \ufb01nancial instruments at fair value
124,751
29,666
640
155,057
\nPercentage of total (%)
81%
19%
0%
100%
\nAnalysed by business type:
\nFinancial investments net of derivative liabilities, at fair value
\nWith-pro\ufb01ts
82,489
15,438
506
98,433
\nUnit-linked
24,024
2,343
5
26,372
\nNon-linked shareholder-backed business
23,856
12,745
129
36,730
\nTotal \ufb01nancial investments net of derivative liabilities, at fair value
130,369
30,526
640
161,535
\nPercentage of total (%)
81%
19%
0%
100%
\nTotal \ufb01nancial investments net of derivative liabilities, at fair value
130,369
30,526
640
161,535
\nOther \ufb01nancial liabilities at fair value
(5,618)
(860)
\u2013
(6,478)
\nTotal \ufb01nancial instruments at fair value
124,751
29,666
640
155,057
\nNotes
\n(i)
Of the total level 2 debt securities of $19,736 million at 31 December 2022 (31 December 2021: $22,987 million), $37 million (31 December 2021: $24 million) are valued internally.
\n(ii)
At 31 December 2022, the Group held $865 million (31 December 2021: $640 million) of net \ufb01nancial instruments at fair value within level 3. This represents less than 1 per cent of the total
\nfair-valued \ufb01nancial assets, net of \ufb01nancial liabilities, for both years and comprises the following items:
\n\u2013
Equity securities and holdings in collective investment schemes of $824 million (31 December 2021: $557 million) consisting primarily of property and infrastructure funds held by the
\nparticipating funds, which are externally valued using the net asset value of the invested entities. Equity securities of $1 million (31 December 2021: $1 million) are internally valued,
\nrepresenting less than 0.1 per cent for all periods of the total fair-valued \ufb01nancial assets net of \ufb01nancial liabilities. Internal valuations are inherently more subjective than external valuations;
\nand
\n\u2013
Other sundry individual \ufb01nancial instruments of a net asset of $41 million (31 December 2021: net asset of $63 million).
\nOf the net \ufb01nancial instruments of $865 million at 31 December 2022 (31 December 2021: $640 million) referred to above:
\n\u2013
A net asset of $752 million (31 December 2021: $511 million) is held by the Group\u2019s with-pro\ufb01ts and unit-linked funds and therefore shareholders\u2019 pro\ufb01t and equity are not impacted by
\nmovements in the valuation of these \ufb01nancial instruments; and
\n\u2013
A net asset of $113 million (31 December 2021: $129 million) is held to support non-linked shareholder-backed business, of which $111 million (31 December 2021: $112 million) are
\nprimarily private equity investments and corporate bonds externally valued using the net asset value of the invested entities and external prices adjusted to re\ufb02ect the speci\ufb01c known
\nconditions relating to these bonds (eg distressed securities) and are therefore inherently less subjective than internal valuations. If the value of all these level 3 \ufb01nancial instruments
\ndecreased by 10 per cent, the change in valuation would be $(11) million (31 December 2021: $(13) million), which would reduce shareholders\u2019 equity by this amount before tax.
\nAll\u00a0of\u00a0this\u00a0amount would pass through the income statement substantially as part of short-term \ufb02uctuations in investment returns outside of adjusted operating pro\ufb01t.
\n(b) Transfers into and transfers out of levels
\nThe Group\u2019s policy is to recognise transfers into and out of levels as of the end of each reporting period except for material transfers which are
\nrecognised 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
\nmaterial change in the observed valuation inputs or a change in the level of trading activities of the securities.
\nDuring 2022, the transfers between levels within the portfolios were primarily transfers from level 1 to level 2 of $2,640 million (31 December
\n2021: $3,789 million) and transfers from level 2 to level 1 of $1,982 million (31 December 2021: $1,742 million). These transfers primarily re\ufb02ect
\nthe change in the observed valuation inputs of equity securities and debt securities and, in certain cases, the change in the level of trading
\nactivities of the securities. There were transfers from level 3 to level 2 of $15 million in the year (31 December 2021: $12 million) and no transfers
\ninto level 3 (31 December 2021: $30 million).
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Directors\u2019 remuneration report
European Embedded Value (EEV) basis results
Additional information
Financial statements
C Financial position
/ continued
\nC2 Fair value measurement
continued
\nC2.2
Fair value measurement hierarchy of Group assets and liabilities
continued
\nReconciliation of movements in level 3 assets and liabilities measured at fair value
\nThe following table reconciles the value of level 3 fair valued assets and liabilities at the beginning and end of the years shown.
\nTotal investment return recorded in the income statement represents interest and dividend income, realised gains and losses, unrealised gains
\nand losses on the assets classi\ufb01ed at fair value through pro\ufb01t and loss and foreign exchange movements on an individual entity\u2019s overseas
\ninvestments. Total gains and losses recorded in other comprehensive income comprises the translation of investments into the Group\u2019s
\npresentational currency of USD.
\n2022
$m
\nLoans
\nEquity securities
\nand holdings in
\ncollective
\ninvestment
\nschemes
\nDebt
\nsecurities
\nGroup
\ntotal
\nBalance at 1 Jan
5
577
58
640
\nTotal losses in income statement
\nnote
\n(2)
(31)
(2)
(35)
\nTotal losses recorded in other comprehensive income
\u2013
(6)
(3)
(9)
\nPurchases and other additions
\u2013
305
\u2013
305
\nSales
\u2013
(21)
\u2013
(21)
\nTransfers out of level 3
\u2013
\u2013
(15)
(15)
\nBalance at 31 Dec
3
824
38
865
\n2021
$m
\nLoans
\nEquity securities
\nand holdings in
\ncollective
\ninvestment
\nschemes
\nDebt
\nsecurities
\nGroup
\ntotal
\nBalance at 1 Jan
6
445
33
484
\nTotal (losses) gains in income statement
\nnote
\n(1)
6
(3)
2
\nTotal losses recorded in other comprehensive income
\u2013
(5)
(2)
(7)
\nPurchases and other additions
\u2013
143
\u2013
143
\nTransfers (out of) into level 3
\u2013
(12)
30
18
\nBalance at 31 Dec
5
577
58
640
\nNote
\nOf the total net losses in the income statement of $(35) million in 2022 (2021: net gains of $2 million), $(12) million (2021: $2 million) relates to net unrealised gains and losses of \ufb01nancial instruments
\nstill held at the end of the year, which can be analysed as follows:
\n2022
\n$m
\n2021
\n$m
\nLoans
(2)
(1)
\nEquity securities and holdings in collective investment schemes
(8)
6
\nDebt securities
(2)
(3)
\nTotal net (losses) gains
(12)
2
\n(c) Assets and liabilities at amortised cost and their fair value
\nThe table below shows the \ufb01nancial assets and liabilities carried at amortised cost on the statement of \ufb01nancial position and their fair value. Cash
\ndeposits, accrued income, other debtors, accruals, deferred income and other liabilities are excluded from the analysis below, as these are carried
\nat amortised cost which approximates fair value. The carrying value of investment contracts with discretionary participation features is on an
\nIFRS\u00a04 basis, which is also excluded from the analysis below, as it is impractical to determine the fair value of these contracts due to the lack of
\na\u00a0reliable basis to measure participation features.
\n31 Dec 2022
$m
31 Dec 2021
$m
\nCarrying
\nvalue
\nFair
\nvalue
\nCarrying
\nvalue
\nFair
\nvalue
\nAssets
\nLoans
2,086
2,207
1,941
2,152
\nLiabilities
\nCore structural borrowings of shareholder-\ufb01nanced businesses
(4,261)
(3,834)
(6,127)
(6,565)
\nOperational borrowings (excluding lease liabilities)
(516)
(516)
(514)
(514)
\nObligations under funding, securities lending and sale and repurchase agreements
(582)
(582)
(223)
(223)
\nTotal net \ufb01nancial liabilities at amortised cost
(3,273)
(2,725)
(4,923)
(5,150)
\n318
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prudentialplc.com
The fair value of the assets and liabilities in the table above, with the exception of the subordinated and senior debt issued by the parent company,
\nhas been estimated from the discounted cash \ufb02ows expected to be received or paid. All the assets and liabilities in the table above have been
\nclassi\ufb01ed within level 2 at 31 December 2022 and 2021, re\ufb02ecting the observability of the inputs used to derive their fair value. The fair value of
\nthe subordinated and senior debt issued by the parent company is determined using quoted prices from independent third parties.
\nC2.3
Additional information on \ufb01nancial instruments
\n(a) Financial risk
\nLiquidity analysis
\nContractual maturities of \ufb01nancial liabilities on an undiscounted cash \ufb02ow basis
\nThe following table sets out the contractual maturities for applicable classes of \ufb01nancial liabilities, excluding derivative liabilities and investment
\ncontracts that are separately presented. The \ufb01nancial liabilities are included in the column relating to the contractual maturities of the
\nundiscounted cash \ufb02ows (including contractual interest payments) based on the earliest period in which the Group can be required to pay
\nassuming conditions are consistent with those of year end.
\n31 Dec 2022
$m
\nTotal
\ncarrying
\nvalue
\nContractual maturity pro\ufb01le for \ufb01nancial liabilities
\n1 year
\nor less
\n1-2
\nyears
\n2-5
\nyears
\n5-10
\nyears
\n10-15
\nyears
\n15-20
\nyears
\nOver
\n20 years
\nNo stated
\nmaturity
\nTotal
\nundiscounted
\ncash \ufb02ows
\nCore structural borrowings of
\nshareholder-\ufb01nanced
\nbusinesses
\nnote C5.1
\n4,261
509
124
370
2,598
1,024
\u2013
\u2013
750
5,375
\nLease liabilities under IFRS 16
\nnote C5.2
\n299
101
76
127
28
9
\u2013
\u2013
\u2013
341
\nOther operational borrowings
\nnote C5.2
\n516
516
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
516
\nObligations under funding,
\nsecurities lending and sale and
\nrepurchase agreements
582
582
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
582
\nAccruals, deferred income and
\nother liabilities
8,777
6,258
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
2,519
8,777
\nNet asset value attributable to unit
\nholders of consolidated unit
\ntrusts and similar funds
4,193
4,193
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
4,193
\nTotal \ufb01nancial liabilities
18,628
12,159
200
497
2,626
1,033
\u2013
\u2013
3,269
19,784
\n31 Dec 2021
$m
\nTotal
\ncarrying
\nvalue
\nContractual maturity pro\ufb01le for \ufb01nancial liabilities
\n1 year
\nor less
\n1-2
\nyears
\n2-5
\nyears
\n5-10
\nyears
\n10-15
\nyears
\n15-20
\nyears
\nOver
\n20 years
\nNo stated
\nmaturity
\nTotal
\nundiscounted
\ncash \ufb02ows
\nCore structural borrowings of
\nshareholder-\ufb01nanced
\nbusinesses
\nnote C5.1
\n6,127
1,872
551
702
1,817
1,642
\u2013
\u2013
750
7,334
\nLease liabilities under IFRS 16
\nnote C5.2
\n347
110
81
135
45
11
\u2013
\u2013
\u2013
382
\nOther operational borrowings
\nnote C5.2
\n514
514
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
514
\nObligations under funding,
\nsecurities lending and sale and
\nrepurchase agreements
223
223
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
223
\nAccruals, deferred income and
\nother liabilities
7,983
5,972
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
2,011
7,983
\nNet asset value attributable to unit
\nholders of consolidated unit
\ntrusts and similar funds
5,664
5,664
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
5,664
\nTotal \ufb01nancial liabilities
20,858
14,355
632
837
1,862
1,653
\u2013
\u2013
2,761
22,100
\n319
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Annual Report 2022
\nGroup overview
Strategic report
Governance
Directors\u2019 remuneration report
European Embedded Value (EEV) basis results
Additional information
Financial statements
C Financial position
/ continued
\nC2 Fair value measurement
continued
\nC2.3
Additional information on \ufb01nancial instruments
continued
\nMaturity analysis of derivatives
\nThe following table shows the carrying value of the gross and net derivative positions.
\nCarrying value of net derivatives
$m
\nDerivative
\nassets
\nDerivative
\nliabilities
\nNet
\nderivative
\nposition
\n31 Dec 2022
569
(1,001)
(432)
\n31 Dec 2021
481
(262)
219
\nAll net derivatives have been included at fair value due within one year or less, representing the basis on which they are managed (ie to manage
\nprincipally asset or liability value exposures). The Group has no cash \ufb02ow hedges and, in general, contractual maturities are not considered
\nessential for an understanding of the timing of the cash \ufb02ows for these instruments.
\nMaturity analysis of investment contracts
\nThe table below shows the maturity pro\ufb01le for investment contracts based on undiscounted cash \ufb02ow projections of expected bene\ufb01t payments.
\nMaturity pro\ufb01le for investment contracts
$m
\nTotal
\ncarrying
\nvalue
\n1 year
\nor less
\n1-5
\nyears
\n5-10
\nyears
\n10-15
\nyears
\n15-20
\nyears
\nOver
\n20 years
\nTotal
\nundiscounted
\ncash \ufb02ows
\n31 Dec 2022
420
11
369
98
22
8
4
512
\n31 Dec 2021
459
14
442
63
16
6
2
543
\nThe undiscounted cash \ufb02ows in the maturity pro\ufb01le shown above excludes contracts which have no stated maturity but which are repayable on
\ndemand.
\nMost investment contracts have options to surrender early, often subject to surrender or other penalties. Therefore, most contracts can be said
\nto have a contractual maturity of less than one year, but the additional charges and term of the contracts mean these are unlikely to be exercised
\nin practice and the more useful information is to present information on expected payment.
\nThe vast majority of the Group\u2019s \ufb01nancial assets are held to back the Group\u2019s policyholder liabilities. Although asset/liability matching is an
\nimportant component of managing policyholder liabilities (both those classi\ufb01ed as insurance and those classi\ufb01ed as investments), this pro\ufb01le is
\nmainly relevant for managing market risk rather than liquidity risk. Within each business unit, this asset/liability matching is performed on a
\nportfolio-by-portfolio basis.
\nIn terms of liquidity risk, a large proportion of the policyholder liabilities contain discretionary surrender values or surrender charges, meaning
\nthat many of the Group\u2019s liabilities are expected to be held for the long term. Much of the Group\u2019s investment portfolios are in marketable
\nsecurities, which can therefore be converted quickly to liquid assets.
\nFor the reasons provided above, an analysis of the Group\u2019s assets by contractual maturity is not considered meaningful to evaluate the nature
\nand extent of the Group\u2019s liquidity risk.
\nCredit risk
\nThe Group\u2019s maximum exposure to credit risk of \ufb01nancial instruments before any allowance for collateral or allocation of losses to policyholders is
\nrepresented by the carrying value of \ufb01nancial instruments on the balance sheet that have exposures to credit risk comprising cash and cash
\nequivalents, deposits, debt securities, loans and derivative assets, accrued investment income and other debtors. Further details of collateral in
\nplace in relation to derivatives, securities lending, repurchase and reverse repurchase agreements and other transactions are provided in note (c)
\nbelow. The Group\u2019s exposure to credit risk is further discussed in the Risk review report.
\nOf the total loans and receivables held at 31 December 2022, $6 million (31 December 2021: $7 million) are past their due date but are not
\nimpaired, of which $1 million are less than one year past their due date (31 December 2021: $2 million). The Group expects full recovery of these
\nloans and receivables.
\nThere are no \ufb01nancial assets that would have been past due or impaired had the terms not been renegotiated in both years.
\nIn addition, the Group did not take possession of any other collateral held as security in both years.
\n320
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prudentialplc.com
Foreign exchange risk
\nAs at 31 December 2022, the Group held 27 per cent (31 December 2021: 26 per cent) of its \ufb01nancial assets and 64 per cent (31 December 2021:
\n63 per cent) of its \ufb01nancial liabilities in currencies mainly USD, other than the functional currency of the relevant business units or the currency to
\nwhich the functional currency is pegged (eg \ufb01nancial assets and liabilities of USD denominated business in Hong Kong). The exchange risks
\ninherent in these exposures are mitigated through the use of derivatives, mainly forward currency contracts and currency swaps as described in
\nnote (b) below.
\nThe amount of exchange gain recognised in the income statement in 2022, except for those arising on \ufb01nancial instruments measured at fair
\nvalue through pro\ufb01t or loss, is $234 million (2021: loss of $(132) million).
\n(b) Derivatives and hedging
\nDerivative \ufb01nancial instruments are used to reduce or manage investment, interest rate and currency exposures, to facilitate e\ufb03cient portfolio
\nmanagement and for investment purposes.
\nThe Group does not regularly seek to apply fair value or cash \ufb02ow hedging treatment under IAS 39. The Group has no net investment, fair value
\nor cash \ufb02ow hedges under IAS 39 at 31 December 2022 and 2021. All derivatives that are not designated as hedging instruments are carried at fair
\nvalue, with movements in fair value being recorded in the income statement.
\nEmbedded derivatives are embedded within other non-derivative host \ufb01nancial instruments and insurance contracts to create hybrid
\ninstruments. Embedded derivatives meeting the de\ufb01nition of an insurance contract are accounted for under IFRS 4. Where economic
\ncharacteristics and risks of the embedded derivatives are not closely related to the economic characteristics and risks of the host instrument, and
\nwhere the hybrid instrument is not measured at fair value with the changes in fair value recognised in the income statement, the embedded
\nderivative is required to be bifurcated and carried at fair value as a derivative measured in accordance with IAS 39.
\nIn addition, the Group applies the option under IFRS 4 to not separate and fair value surrender options embedded in host contracts and
\nwith-pro\ufb01ts investment contracts whose strike price is either a \ufb01xed amount or a \ufb01xed amount plus interest.
\nDerivatives held and their purpose
\nThe Group enters into a variety of exchange traded and over-the-counter derivative \ufb01nancial instruments, including futures, options, forward
\ncontracts, swaps and swaptions.
\nAll over-the-counter derivative transactions are conducted under standardised ISDA (International Swaps and Derivatives Association Inc)
\nmaster agreements and collateral agreements are in place between the individual entities and relevant counterparties under each of these
\nmarket master agreements.
\nDerivatives are used for e\ufb03cient portfolio management to obtain cost e\ufb00ective and management of exposure to various markets in
\naccordance with the Group\u2019s investment strategies and to manage exposure to interest rate, currency, credit and other business risks. The Group
\nalso uses interest rate derivatives to reduce exposure to interest rate volatility.
\n(c) Derecognition, collateral and o\ufb00setting
\nDerecognition of \ufb01nancial assets and liabilities
\nThe Group\u2019s policy is to derecognise \ufb01nancial assets when it is deemed that substantially all the risks and rewards of ownership have been
\ntransferred.
\nThe Group derecognises \ufb01nancial liabilities only when the obligation speci\ufb01ed in the contract is discharged, cancelled or has expired.
\nReverse repurchase agreements
\nThe Group is party to various reverse repurchase agreements under which securities are purchased from third parties with an obligation to resell
\nthe securities. The securities are not recognised as investments in the statement of \ufb01nancial position but the right to receive the cash paid is
\nrecognised as deposits.
\nThe Group has entered into reverse repurchase transactions under which it purchased securities and had taken on the obligation to resell the
\nsecurities. At 31 December 2022, the fair value of the collateral held in respect of these transactions, which is represented by the purchased
\nsecurities, was $3,244 million (31 December 2021: $2,149 million).
\nSecurities lending and repurchase agreements
\nThe Group is also party to various securities lending agreements (including repurchase agreements) under which securities are loaned to third
\nparties on a short-term basis. The loaned securities are not derecognised; rather, they continue to be recognised within the appropriate investment
\nclassi\ufb01cation. To the extent cash collateral is received it is recognised on the statement of \ufb01nancial position with the obligation to repay the cash
\npaid recognised as a liability. Other collateral is not recognised.
\nAt 31 December 2022, the Group had $1,571 million (31 December 2021: $854 million) of lent securities and assets subject to repurchase
\nagreements. The cash and securities collateral held or pledged under such agreements were $1,679 million (31 December 2021: $913 million).
\n321
Prudential plc
Annual Report 2022
\nGroup overview
Strategic report
Governance
Directors\u2019 remuneration report
European Embedded Value (EEV) basis results
Additional information
Financial statements
C Financial position
/ continued
\nC2 Fair value measurement
continued
\nC2.3
Additional information on \ufb01nancial instruments
continued
\nCollateral and pledges under derivative transactions
\nAt 31 December 2022, the Group had pledged $62 million (31 December 2021: $99 million) for liabilities and held collateral of $234 million
\n(31 December 2021: $50 million) in respect of over-the-counter derivative transactions. These transactions are conducted under terms that are
\nusual and customary to collateralised transactions including, where relevant, standard securities lending and repurchase agreements.
\nThe Group has entered into collateral arrangements in relation to over-the-counter derivative transactions, which permit sale or re-pledging of
\nunderlying collateral. The Group has not sold any collateral held or re-pledged any collateral.
\nAll over-the-counter derivative transactions are conducted under standardised International Swaps and Derivatives Association (ISDA) master
\nagreements. The collateral management for these transactions is conducted under the usual and customary terms and conditions set out in the
\nCredit Support Annex to the ISDA master agreement.
\nO\ufb00setting assets and liabilities
\nThe Group\u2019s derivative instruments, repurchase agreements and securities lending agreements are subject to master netting arrangements and
\ncollateral arrangements. A master netting arrangement with a counterparty creates a right of o\ufb00set for amounts due to and due from that same
\ncounterparty that is enforceable in the event of a default or bankruptcy. The Group recognises amounts subject to master netting arrangements
\non a gross basis within the consolidated balance sheets.
\nThe following tables present the gross and net information about the Group\u2019s \ufb01nancial instruments subject to master netting arrangements:
\n31 Dec 2022
$m
\nGross amount
\nincluded in the
\nbalance sheet
\nnote (i)
\nRelated amounts not o\ufb00set in the balance sheet
\nNet
\namount
\nnote (iv)
\nFinancial
\ninstruments
\nnote (ii)
\nCash
\ncollateral
\nSecurities
\ncollateral
\nnote (iii)
\nFinancial assets:
\nDerivative assets
457
(179)
(217)
\u2013
61
\nReverse repurchase agreements
3,174
\u2013
\u2013
(3,174)
\u2013
\nTotal \ufb01nancial assets
3,631
(179)
(217)
(3,174)
61
\nFinancial liabilities:
\nDerivative liabilities
(284)
179
27
6
(72)
\nSecurities lending and repurchase agreements
(582)
\u2013
13
566
(3)
\nTotal \ufb01nancial liabilities
(866)
179
40
572
(75)
\n31 Dec 2021
$m
\nGross amount
\nincluded in the
\nbalance sheet
\nnote (i)
\nRelated amounts not o\ufb00set in the balance sheet
\nNet
\namount
\nnote (iv)
\nFinancial
\ninstruments
\nnote (ii)
\nCash
\ncollateral
\nSecurities
\ncollateral
\nnote (iii)
\nFinancial assets:
\nDerivative assets
170
(94)
(31)
(1)
44
\nReverse repurchase agreements
2,135
\u2013
\u2013
(2,134)
1
\nTotal \ufb01nancial assets
2,305
(94)
(31)
(2,135)
45
\nFinancial liabilities:
\nDerivative liabilities
(165)
94
63
\u2013
(8)
\nSecurities lending and repurchase agreements
(222)
\u2013
153
69
\u2013
\nTotal \ufb01nancial liabilities
(387)
94
216
69
(8)
\nNotes
\n(i)
The Group has not o\ufb00set any of the amounts included in the balance sheet.
\n(ii)
Represents the amount that could be o\ufb00set under master netting or similar arrangements where the Group does not satisfy the full criteria to o\ufb00set in the balance sheet.
\n(iii)
Excludes initial margin amounts for exchange-traded derivatives.
\n(iv)
In the tables above, the amounts of assets or liabilities included in the balance sheet would be o\ufb00set \ufb01rst by \ufb01nancial instruments that have the right of o\ufb00set under master netting or similar
\narrangements with any remaining amount reduced by the amount of cash and securities collateral. The actual amount of collateral may be greater than amounts presented in the tables.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfFinancialInstrumentsExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f38484": {
"value": "C2 Fair value measurement The Group uses the trade date method to account for regular purchases and sales of \ufb01nancial assets. The Group holds \ufb01nancial assets in
\naccordance with IAS 39, whereby subject to speci\ufb01c criteria, \ufb01nancial instruments are required to be accounted for under one of the following
\ncategories:
\n >
Financial assets and liabilities at fair value through pro\ufb01t or loss (FVTPL): this comprises assets and liabilities designated by management as
\nFVTPL on inception and derivatives. This includes instruments that are managed and the performance evaluated on a fair value basis, including
\nliabilities related to net assets attributable to unit holders of consolidated investment funds and policyholder liabilities for investment contracts
\nwithout discretionary participation features. All investments within this category are measured at fair value with all changes thereon being
\nrecognised in investment return in the income statement.
\n>
Financial investments on an available-for-sale (AFS) basis: this comprises assets that are designated by management as AFS and/or do not fall
\ninto any of the other categories. These assets are initially recognised at fair value plus attributable transaction costs and are subsequently
\nmeasured at fair value. Interest and/or dividend income is recognised in the income statement. Unrealised gains and losses are recognised in
\nother comprehensive income. Upon disposal or impairment, accumulated unrealised gains and losses are transferred from other comprehensive
\nincome to the income statement as realised gains or losses. Subsequent to the demerger of Jackson in September 2021, the Group has
\ndesignated its retained interest in Jackson (as described in note D1.2) as AFS equity securities.
\n >
Loans and receivables: except for those designated as FVTPL or AFS, these instruments comprise non-quoted investments that have \ufb01xed or
\ndeterminable payments, including loans collateralised by mortgages, deposits, loans to policyholders and other unsecured loans and
\nreceivables. These investments are initially recognised at fair value plus transaction costs. Subsequently, these instruments are carried at
\namortised cost using the e\ufb00ective interest method. The e\ufb00ective interest rate is the rate that exactly discounts estimated future cash receipts
\nthrough the expected life of the \ufb01nancial instrument or, when appropriate, a shorter period to the net carrying amount of the \ufb01nancial asset.
\nWhen assets held at amortised cost are subject to impairment testing, estimated future cash \ufb02ows are compared to the carrying value of the
\nasset. The estimated future cash \ufb02ows are discounted using the \ufb01nancial asset\u2019s original or variable e\ufb00ective interest rate and exclude credit
\nlosses that have not yet been incurred. If, in subsequent periods, an impaired loan or receivable recovers in value (in part or in full) and this
\nrecovery can be objectively related to an event occurring after the impairment, then any amount determined to have been recovered is reversed
\nthrough the income statement.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfFinancialAssetsExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f38485": {
"value": "C2 Fair value measurement The Group uses the trade date method to account for regular purchases and sales of \ufb01nancial assets. The Group holds \ufb01nancial assets in
\naccordance with IAS 39, whereby subject to speci\ufb01c criteria, \ufb01nancial instruments are required to be accounted for under one of the following
\ncategories:
\n >
Financial assets and liabilities at fair value through pro\ufb01t or loss (FVTPL): this comprises assets and liabilities designated by management as
\nFVTPL on inception and derivatives. This includes instruments that are managed and the performance evaluated on a fair value basis, including
\nliabilities related to net assets attributable to unit holders of consolidated investment funds and policyholder liabilities for investment contracts
\nwithout discretionary participation features. All investments within this category are measured at fair value with all changes thereon being
\nrecognised in investment return in the income statement.
\n>
Financial investments on an available-for-sale (AFS) basis: this comprises assets that are designated by management as AFS and/or do not fall
\ninto any of the other categories. These assets are initially recognised at fair value plus attributable transaction costs and are subsequently
\nmeasured at fair value. Interest and/or dividend income is recognised in the income statement. Unrealised gains and losses are recognised in
\nother comprehensive income. Upon disposal or impairment, accumulated unrealised gains and losses are transferred from other comprehensive
\nincome to the income statement as realised gains or losses. Subsequent to the demerger of Jackson in September 2021, the Group has
\ndesignated its retained interest in Jackson (as described in note D1.2) as AFS equity securities.
\n >
Loans and receivables: except for those designated as FVTPL or AFS, these instruments comprise non-quoted investments that have \ufb01xed or
\ndeterminable payments, including loans collateralised by mortgages, deposits, loans to policyholders and other unsecured loans and
\nreceivables. These investments are initially recognised at fair value plus transaction costs. Subsequently, these instruments are carried at
\namortised cost using the e\ufb00ective interest method. The e\ufb00ective interest rate is the rate that exactly discounts estimated future cash receipts
\nthrough the expected life of the \ufb01nancial instrument or, when appropriate, a shorter period to the net carrying amount of the \ufb01nancial asset.
\nWhen assets held at amortised cost are subject to impairment testing, estimated future cash \ufb02ows are compared to the carrying value of the
\nasset. The estimated future cash \ufb02ows are discounted using the \ufb01nancial asset\u2019s original or variable e\ufb00ective interest rate and exclude credit
\nlosses that have not yet been incurred. If, in subsequent periods, an impaired loan or receivable recovers in value (in part or in full) and this
\nrecovery can be objectively related to an event occurring after the impairment, then any amount determined to have been recovered is reversed
\nthrough the income statement.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f38504": {
"value": ">Financial assets and liabilities at fair value through pro\ufb01t or loss (FVTPL): this comprises assets and liabilities designated by management as
\nFVTPL on inception and derivatives. This includes instruments that are managed and the performance evaluated on a fair value basis, including
\nliabilities related to net assets attributable to unit holders of consolidated investment funds and policyholder liabilities for investment contracts
\nwithout discretionary participation features. All investments within this category are measured at fair value with all changes thereon being
\nrecognised in investment return in the income statement. ",
"dimensions": {
"concept": "ifrs-full:DisclosureOfFinancialInstrumentsAtFairValueThroughProfitOrLossExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f38505": {
"value": ">Financial assets and liabilities at fair value through pro\ufb01t or loss (FVTPL): this comprises assets and liabilities designated by management as
\nFVTPL on inception and derivatives. This includes instruments that are managed and the performance evaluated on a fair value basis, including
\nliabilities related to net assets attributable to unit holders of consolidated investment funds and policyholder liabilities for investment contracts
\nwithout discretionary participation features. All investments within this category are measured at fair value with all changes thereon being
\nrecognised in investment return in the income statement. ",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialInstrumentsAtFairValueThroughProfitOrLossExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f38515": {
"value": ">
Financial investments on an available-for-sale (AFS) basis: this comprises assets that are designated by management as AFS and/or do not fall
\ninto any of the other categories. These assets are initially recognised at fair value plus attributable transaction costs and are subsequently
\nmeasured at fair value. Interest and/or dividend income is recognised in the income statement. Unrealised gains and losses are recognised in
\nother comprehensive income. Upon disposal or impairment, accumulated unrealised gains and losses are transferred from other comprehensive
\nincome to the income statement as realised gains or losses. Subsequent to the demerger of Jackson in September 2021, the Group has
\ndesignated its retained interest in Jackson (as described in note D1.2) as AFS equity securities.
The retained interest in Jackson is reported within the Consolidated statement of \ufb01nancial position as a \ufb01nancial investment at fair value and is
\nincluded in \u2018Unallocated to a segment (central operations)\u2019 for segmental analysis. This investment has been classi\ufb01ed as available-for-sale under
\nIAS 39. During 2022, transactions reduced the Group\u2019s holding to 9.2 per cent (both voting and economic interest) at 31 December 2022
\n(31 December 2021: 18.4 per cent economic interest with 18.5 per cent voting interest). The fair value of the Group\u2019s holding at 31 December 2022
\nwas $266 million (31 December 2021: $683 million).
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfAvailableforsaleAssetsExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f38517": {
"value": "> Financial investments on an available-for-sale (AFS) basis: this comprises assets that are designated by management as AFS and/or do not fall
\ninto any of the other categories. These assets are initially recognised at fair value plus attributable transaction costs and are subsequently
\nmeasured at fair value. Interest and/or dividend income is recognised in the income statement. Unrealised gains and losses are recognised in
\nother comprehensive income. Upon disposal or impairment, accumulated unrealised gains and losses are transferred from other comprehensive
\nincome to the income statement as realised gains or losses. Subsequent to the demerger of Jackson in September 2021, the Group has
\ndesignated its retained interest in Jackson (as described in note D1.2) as AFS equity securities.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForAvailableforsaleFinancialAssetsExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f38527": {
"value": ">Loans and receivables: except for those designated as FVTPL or AFS, these instruments comprise non-quoted investments that have \ufb01xed or
\ndeterminable payments, including loans collateralised by mortgages, deposits, loans to policyholders and other unsecured loans and
\nreceivables. These investments are initially recognised at fair value plus transaction costs. Subsequently, these instruments are carried at
\namortised cost using the e\ufb00ective interest method. The e\ufb00ective interest rate is the rate that exactly discounts estimated future cash receipts
\nthrough the expected life of the \ufb01nancial instrument or, when appropriate, a shorter period to the net carrying amount of the \ufb01nancial asset.
\nWhen assets held at amortised cost are subject to impairment testing, estimated future cash \ufb02ows are compared to the carrying value of the
\nasset. The estimated future cash \ufb02ows are discounted using the \ufb01nancial asset\u2019s original or variable e\ufb00ective interest rate and exclude credit
\nlosses that have not yet been incurred. If, in subsequent periods, an impaired loan or receivable recovers in value (in part or in full) and this
\nrecovery can be objectively related to an event occurring after the impairment, then any amount determined to have been recovered is reversed
through the income statement. ",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForLoansAndReceivablesExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f38611": {
"value": "(a) Assets and liabilities carried at fair value on the statement of \ufb01nancial position
\nThe table below shows the assets and liabilities carried at fair value analysed by level of the IFRS 13 \u2018Fair Value Measurement\u2019 de\ufb01ned fair value
\nhierarchy. This hierarchy is based on the inputs to the fair value measurement and re\ufb02ects the lowest level input that is signi\ufb01cant to that
\nmeasurement.
\nAll assets and liabilities held at fair value are classi\ufb01ed as fair value through pro\ufb01t or loss, except for $266 million of \ufb01nancial assets classi\ufb01ed as
\navailable-for-sale at 31 December 2022 (31 December 2021: $909 million), all of which (31 December 2021: $683 million) related to the Group\u2019s
\nretained interest in Jackson\u2019s equity securities. All assets and liabilities held at fair value are measured on a recurring basis. As of 31 December
\n2022, the Group did not have any \ufb01nancial instruments that are measured at fair value on a non-recurring basis.
\nFinancial instruments at fair value
\n31 Dec 2022
$m
\nLevel 1
Level 2
Level 3
\nQuoted prices
\n(unadjusted)
\nin active
\nmarkets
\nValuation based
\non signi\ufb01cant
\nobservable
\nmarket inputs
\nnote (i)
\nValuation based
\non signi\ufb01cant
\nunobservable
\nmarket inputs
\nnote (ii)
\nTotal
\nLoans
\u2013
447
3
450
\nEquity securities and holdings in collective investment schemes
49,725
7,130
824
57,679
\nDebt securities
57,215
19,736
38
76,989
\nDerivative assets
82
487
\u2013
569
\nDerivative liabilities
(778)
(223)
\u2013
(1,001)
\nTotal \ufb01nancial investments, net of derivative liabilities
106,244
27,577
865
134,686
\nInvestment contract liabilities without discretionary participation features
\u2013
(741)
\u2013
(741)
\nNet asset value attributable to unit holders of consolidated investment funds
(4,193)
\u2013
\u2013
(4,193)
\nTotal \ufb01nancial instruments at fair value
102,051
26,836
865
129,752
\nPercentage of total (%)
78%
21%
1%
100%
\nAnalysed by business type:
\nFinancial investments net of derivative liabilities, at fair value
\nWith-pro\ufb01ts
65,880
14,605
748
81,233
\nUnit-linked
21,319
1,851
4
23,174
\nNon-linked shareholder-backed business
19,045
11,121
113
30,279
\nTotal \ufb01nancial investments net of derivative liabilities, at fair value
106,244
27,577
865
134,686
\nPercentage of total (%)
78%
21%
1%
100%
\nTotal \ufb01nancial investments net of derivative liabilities, at fair value
106,244
27,577
865
134,686
\nOther \ufb01nancial liabilities at fair value
(4,193)
(741)
\u2013
(4,934)
\nTotal \ufb01nancial instruments at fair value
102,051
26,836
865
129,752
31 Dec 2021
$m
\nLevel 1
Level 2
Level 3
\nQuoted prices
\n(unadjusted)
\nin active
\nmarkets
\nValuation based
\non signi\ufb01cant
\nobservable
\nmarket inputs
\nnote (i)
\nValuation based
\non signi\ufb01cant
\nunobservable
\nmarket inputs
\nnote (ii)
\nTotal
\nLoans
\u2013
616
5
621
\nEquity securities and holdings in collective investment schemes
54,107
6,917
577
61,601
\nDebt securities
76,049
22,987
58
99,094
\nDerivative assets
359
122
\u2013
481
\nDerivative liabilities
(146)
(116)
\u2013
(262)
\nTotal \ufb01nancial investments, net of derivative liabilities
130,369
30,526
640
161,535
\nInvestment contract liabilities without discretionary participation features
\u2013
(814)
\u2013
(814)
\nNet asset value attributable to unit holders of consolidated investment funds
(5,618)
(46)
\u2013
(5,664)
\nTotal \ufb01nancial instruments at fair value
124,751
29,666
640
155,057
\nPercentage of total (%)
81%
19%
0%
100%
\nAnalysed by business type:
\nFinancial investments net of derivative liabilities, at fair value
\nWith-pro\ufb01ts
82,489
15,438
506
98,433
\nUnit-linked
24,024
2,343
5
26,372
\nNon-linked shareholder-backed business
23,856
12,745
129
36,730
\nTotal \ufb01nancial investments net of derivative liabilities, at fair value
130,369
30,526
640
161,535
\nPercentage of total (%)
81%
19%
0%
100%
\nTotal \ufb01nancial investments net of derivative liabilities, at fair value
130,369
30,526
640
161,535
\nOther \ufb01nancial liabilities at fair value
(5,618)
(860)
\u2013
(6,478)
\nTotal \ufb01nancial instruments at fair value
124,751
29,666
640
155,057
\nNotes
\n(i)
Of the total level 2 debt securities of $19,736 million at 31 December 2022 (31 December 2021: $22,987 million), $37 million (31 December 2021: $24 million) are valued internally.
\n(ii)
At 31 December 2022, the Group held $865 million (31 December 2021: $640 million) of net \ufb01nancial instruments at fair value within level 3. This represents less than 1 per cent of the total
\nfair-valued \ufb01nancial assets, net of \ufb01nancial liabilities, for both years and comprises the following items:
\n\u2013
Equity securities and holdings in collective investment schemes of $824 million (31 December 2021: $557 million) consisting primarily of property and infrastructure funds held by the
\nparticipating funds, which are externally valued using the net asset value of the invested entities. Equity securities of $1 million (31 December 2021: $1 million) are internally valued,
\nrepresenting less than 0.1 per cent for all periods of the total fair-valued \ufb01nancial assets net of \ufb01nancial liabilities. Internal valuations are inherently more subjective than external valuations;
\nand
\n\u2013
Other sundry individual \ufb01nancial instruments of a net asset of $41 million (31 December 2021: net asset of $63 million).
\nOf the net \ufb01nancial instruments of $865 million at 31 December 2022 (31 December 2021: $640 million) referred to above:
\n\u2013
A net asset of $752 million (31 December 2021: $511 million) is held by the Group\u2019s with-pro\ufb01ts and unit-linked funds and therefore shareholders\u2019 pro\ufb01t and equity are not impacted by
\nmovements in the valuation of these \ufb01nancial instruments; and
\n\u2013
A net asset of $113 million (31 December 2021: $129 million) is held to support non-linked shareholder-backed business, of which $111 million (31 December 2021: $112 million) are
\nprimarily private equity investments and corporate bonds externally valued using the net asset value of the invested entities and external prices adjusted to re\ufb02ect the speci\ufb01c known
\nconditions relating to these bonds (eg distressed securities) and are therefore inherently less subjective than internal valuations. If the value of all these level 3 \ufb01nancial instruments
\ndecreased by 10 per cent, the change in valuation would be $(11) million (31 December 2021: $(13) million), which would reduce shareholders\u2019 equity by this amount before tax.
\nAll\u00a0of\u00a0this\u00a0amount would pass through the income statement substantially as part of short-term \ufb02uctuations in investment returns outside of adjusted operating pro\ufb01t.
Maturity analysis of derivatives
\nThe following table shows the carrying value of the gross and net derivative positions.
\nCarrying value of net derivatives
$m
\nDerivative
\nassets
\nDerivative
\nliabilities
\nNet
\nderivative
\nposition
\n31 Dec 2022
569
(1,001)
(432)
\n31 Dec 2021
481
(262)
219
\nAll net derivatives have been included at fair value due within one year or less, representing the basis on which they are managed (ie to manage
\nprincipally asset or liability value exposures). The Group has no cash \ufb02ow hedges and, in general, contractual maturities are not considered
\nessential for an understanding of the timing of the cash \ufb02ows for these instruments.
(b) Derivatives and hedging Derivative \ufb01nancial instruments are used to reduce or manage investment, interest rate and currency exposures, to facilitate e\ufb03cient portfolio
\nmanagement and for investment purposes.
\nThe Group does not regularly seek to apply fair value or cash \ufb02ow hedging treatment under IAS 39. The Group has no net investment, fair value
\nor cash \ufb02ow hedges under IAS 39 at 31 December 2022 and 2021. All derivatives that are not designated as hedging instruments are carried at fair
\nvalue, with movements in fair value being recorded in the income statement.
\nEmbedded derivatives are embedded within other non-derivative host \ufb01nancial instruments and insurance contracts to create hybrid
\ninstruments. Embedded derivatives meeting the de\ufb01nition of an insurance contract are accounted for under IFRS 4. Where economic
\ncharacteristics and risks of the embedded derivatives are not closely related to the economic characteristics and risks of the host instrument, and
\nwhere the hybrid instrument is not measured at fair value with the changes in fair value recognised in the income statement, the embedded
\nderivative is required to be bifurcated and carried at fair value as a derivative measured in accordance with IAS 39.
\nIn addition, the Group applies the option under IFRS 4 to not separate and fair value surrender options embedded in host contracts and
\nwith-pro\ufb01ts investment contracts whose strike price is either a \ufb01xed amount or a \ufb01xed amount plus interest.
\nDerivatives held and their purpose
\nThe Group enters into a variety of exchange traded and over-the-counter derivative \ufb01nancial instruments, including futures, options, forward
\ncontracts, swaps and swaptions.
\nAll over-the-counter derivative transactions are conducted under standardised ISDA (International Swaps and Derivatives Association Inc)
\nmaster agreements and collateral agreements are in place between the individual entities and relevant counterparties under each of these
\nmarket master agreements.
\nDerivatives are used for e\ufb03cient portfolio management to obtain cost e\ufb00ective and management of exposure to various markets in
\naccordance with the Group\u2019s investment strategies and to manage exposure to interest rate, currency, credit and other business risks. The Group
also uses interest rate derivatives to reduce exposure to interest rate volatility. O\ufb00setting assets and liabilities
\nThe Group\u2019s derivative instruments, repurchase agreements and securities lending agreements are subject to master netting arrangements and
\ncollateral arrangements. A master netting arrangement with a counterparty creates a right of o\ufb00set for amounts due to and due from that same
\ncounterparty that is enforceable in the event of a default or bankruptcy. The Group recognises amounts subject to master netting arrangements
\non a gross basis within the consolidated balance sheets.
\nThe following tables present the gross and net information about the Group\u2019s \ufb01nancial instruments subject to master netting arrangements:
\n31 Dec 2022
$m
\nGross amount
\nincluded in the
\nbalance sheet
\nnote (i)
\nRelated amounts not o\ufb00set in the balance sheet
\nNet
\namount
\nnote (iv)
\nFinancial
\ninstruments
\nnote (ii)
\nCash
\ncollateral
\nSecurities
\ncollateral
\nnote (iii)
\nFinancial assets:
\nDerivative assets
457
(179)
(217)
\u2013
61
\nReverse repurchase agreements
3,174
\u2013
\u2013
(3,174)
\u2013
\nTotal \ufb01nancial assets
3,631
(179)
(217)
(3,174)
61
\nFinancial liabilities:
\nDerivative liabilities
(284)
179
27
6
(72)
\nSecurities lending and repurchase agreements
(582)
\u2013
13
566
(3)
\nTotal \ufb01nancial liabilities
(866)
179
40
572
(75)
\n31 Dec 2021
$m
\nGross amount
\nincluded in the
\nbalance sheet
\nnote (i)
\nRelated amounts not o\ufb00set in the balance sheet
\nNet
\namount
\nnote (iv)
\nFinancial
\ninstruments
\nnote (ii)
\nCash
\ncollateral
\nSecurities
\ncollateral
\nnote (iii)
\nFinancial assets:
\nDerivative assets
170
(94)
(31)
(1)
44
\nReverse repurchase agreements
2,135
\u2013
\u2013
(2,134)
1
\nTotal \ufb01nancial assets
2,305
(94)
(31)
(2,135)
45
\nFinancial liabilities:
\nDerivative liabilities
(165)
94
63
\u2013
(8)
\nSecurities lending and repurchase agreements
(222)
\u2013
153
69
\u2013
\nTotal \ufb01nancial liabilities
(387)
94
216
69
(8)
\nNotes
\n(i)
The Group has not o\ufb00set any of the amounts included in the balance sheet.
\n(ii)
Represents the amount that could be o\ufb00set under master netting or similar arrangements where the Group does not satisfy the full criteria to o\ufb00set in the balance sheet.
\n(iii)
Excludes initial margin amounts for exchange-traded derivatives.
\n(iv)
In the tables above, the amounts of assets or liabilities included in the balance sheet would be o\ufb00set \ufb01rst by \ufb01nancial instruments that have the right of o\ufb00set under master netting or similar
arrangements with any remaining amount reduced by the amount of cash and securities collateral. The actual amount of collateral may be greater than amounts presented in the tables. ",
"dimensions": {
"concept": "ifrs-full:DisclosureOfFairValueOfFinancialInstrumentsExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f38612": {
"value": "(a) Assets and liabilities carried at fair value on the statement of \ufb01nancial position
\nThe table below shows the assets and liabilities carried at fair value analysed by level of the IFRS 13 \u2018Fair Value Measurement\u2019 de\ufb01ned fair value
\nhierarchy. This hierarchy is based on the inputs to the fair value measurement and re\ufb02ects the lowest level input that is signi\ufb01cant to that
\nmeasurement.
\nAll assets and liabilities held at fair value are classi\ufb01ed as fair value through pro\ufb01t or loss, except for $266 million of \ufb01nancial assets classi\ufb01ed as
\navailable-for-sale at 31 December 2022 (31 December 2021: $909 million), all of which (31 December 2021: $683 million) related to the Group\u2019s
\nretained interest in Jackson\u2019s equity securities. All assets and liabilities held at fair value are measured on a recurring basis. As of 31 December
\n2022, the Group did not have any \ufb01nancial instruments that are measured at fair value on a non-recurring basis.
\nFinancial instruments at fair value
\n31 Dec 2022
$m
\nLevel 1
Level 2
Level 3
\nQuoted prices
\n(unadjusted)
\nin active
\nmarkets
\nValuation based
\non signi\ufb01cant
\nobservable
\nmarket inputs
\nnote (i)
\nValuation based
\non signi\ufb01cant
\nunobservable
\nmarket inputs
\nnote (ii)
\nTotal
\nLoans
\u2013
447
3
450
\nEquity securities and holdings in collective investment schemes
49,725
7,130
824
57,679
\nDebt securities
57,215
19,736
38
76,989
\nDerivative assets
82
487
\u2013
569
\nDerivative liabilities
(778)
(223)
\u2013
(1,001)
\nTotal \ufb01nancial investments, net of derivative liabilities
106,244
27,577
865
134,686
\nInvestment contract liabilities without discretionary participation features
\u2013
(741)
\u2013
(741)
\nNet asset value attributable to unit holders of consolidated investment funds
(4,193)
\u2013
\u2013
(4,193)
\nTotal \ufb01nancial instruments at fair value
102,051
26,836
865
129,752
\nPercentage of total (%)
78%
21%
1%
100%
\nAnalysed by business type:
\nFinancial investments net of derivative liabilities, at fair value
\nWith-pro\ufb01ts
65,880
14,605
748
81,233
\nUnit-linked
21,319
1,851
4
23,174
\nNon-linked shareholder-backed business
19,045
11,121
113
30,279
\nTotal \ufb01nancial investments net of derivative liabilities, at fair value
106,244
27,577
865
134,686
\nPercentage of total (%)
78%
21%
1%
100%
\nTotal \ufb01nancial investments net of derivative liabilities, at fair value
106,244
27,577
865
134,686
\nOther \ufb01nancial liabilities at fair value
(4,193)
(741)
\u2013
(4,934)
\nTotal \ufb01nancial instruments at fair value
102,051
26,836
865
129,752
31 Dec 2021
$m
\nLevel 1
Level 2
Level 3
\nQuoted prices
\n(unadjusted)
\nin active
\nmarkets
\nValuation based
\non signi\ufb01cant
\nobservable
\nmarket inputs
\nnote (i)
\nValuation based
\non signi\ufb01cant
\nunobservable
\nmarket inputs
\nnote (ii)
\nTotal
\nLoans
\u2013
616
5
621
\nEquity securities and holdings in collective investment schemes
54,107
6,917
577
61,601
\nDebt securities
76,049
22,987
58
99,094
\nDerivative assets
359
122
\u2013
481
\nDerivative liabilities
(146)
(116)
\u2013
(262)
\nTotal \ufb01nancial investments, net of derivative liabilities
130,369
30,526
640
161,535
\nInvestment contract liabilities without discretionary participation features
\u2013
(814)
\u2013
(814)
\nNet asset value attributable to unit holders of consolidated investment funds
(5,618)
(46)
\u2013
(5,664)
\nTotal \ufb01nancial instruments at fair value
124,751
29,666
640
155,057
\nPercentage of total (%)
81%
19%
0%
100%
\nAnalysed by business type:
\nFinancial investments net of derivative liabilities, at fair value
\nWith-pro\ufb01ts
82,489
15,438
506
98,433
\nUnit-linked
24,024
2,343
5
26,372
\nNon-linked shareholder-backed business
23,856
12,745
129
36,730
\nTotal \ufb01nancial investments net of derivative liabilities, at fair value
130,369
30,526
640
161,535
\nPercentage of total (%)
81%
19%
0%
100%
\nTotal \ufb01nancial investments net of derivative liabilities, at fair value
130,369
30,526
640
161,535
\nOther \ufb01nancial liabilities at fair value
(5,618)
(860)
\u2013
(6,478)
\nTotal \ufb01nancial instruments at fair value
124,751
29,666
640
155,057
\nNotes
\n(i)
Of the total level 2 debt securities of $19,736 million at 31 December 2022 (31 December 2021: $22,987 million), $37 million (31 December 2021: $24 million) are valued internally.
\n(ii)
At 31 December 2022, the Group held $865 million (31 December 2021: $640 million) of net \ufb01nancial instruments at fair value within level 3. This represents less than 1 per cent of the total
\nfair-valued \ufb01nancial assets, net of \ufb01nancial liabilities, for both years and comprises the following items:
\n\u2013
Equity securities and holdings in collective investment schemes of $824 million (31 December 2021: $557 million) consisting primarily of property and infrastructure funds held by the
\nparticipating funds, which are externally valued using the net asset value of the invested entities. Equity securities of $1 million (31 December 2021: $1 million) are internally valued,
\nrepresenting less than 0.1 per cent for all periods of the total fair-valued \ufb01nancial assets net of \ufb01nancial liabilities. Internal valuations are inherently more subjective than external valuations;
\nand
\n\u2013
Other sundry individual \ufb01nancial instruments of a net asset of $41 million (31 December 2021: net asset of $63 million).
\nOf the net \ufb01nancial instruments of $865 million at 31 December 2022 (31 December 2021: $640 million) referred to above:
\n\u2013
A net asset of $752 million (31 December 2021: $511 million) is held by the Group\u2019s with-pro\ufb01ts and unit-linked funds and therefore shareholders\u2019 pro\ufb01t and equity are not impacted by
\nmovements in the valuation of these \ufb01nancial instruments; and
\n\u2013
A net asset of $113 million (31 December 2021: $129 million) is held to support non-linked shareholder-backed business, of which $111 million (31 December 2021: $112 million) are
\nprimarily private equity investments and corporate bonds externally valued using the net asset value of the invested entities and external prices adjusted to re\ufb02ect the speci\ufb01c known
\nconditions relating to these bonds (eg distressed securities) and are therefore inherently less subjective than internal valuations. If the value of all these level 3 \ufb01nancial instruments
\ndecreased by 10 per cent, the change in valuation would be $(11) million (31 December 2021: $(13) million), which would reduce shareholders\u2019 equity by this amount before tax.
\nAll\u00a0of\u00a0this\u00a0amount would pass through the income statement substantially as part of short-term \ufb02uctuations in investment returns outside of adjusted operating pro\ufb01t.
Maturity analysis of derivatives
\nThe following table shows the carrying value of the gross and net derivative positions.
\nCarrying value of net derivatives
$m
\nDerivative
\nassets
\nDerivative
\nliabilities
\nNet
\nderivative
\nposition
\n31 Dec 2022
569
(1,001)
(432)
\n31 Dec 2021
481
(262)
219
\nAll net derivatives have been included at fair value due within one year or less, representing the basis on which they are managed (ie to manage
\nprincipally asset or liability value exposures). The Group has no cash \ufb02ow hedges and, in general, contractual maturities are not considered
\nessential for an understanding of the timing of the cash \ufb02ows for these instruments.
(b) Derivatives and hedging Derivative \ufb01nancial instruments are used to reduce or manage investment, interest rate and currency exposures, to facilitate e\ufb03cient portfolio
\nmanagement and for investment purposes.
\nThe Group does not regularly seek to apply fair value or cash \ufb02ow hedging treatment under IAS 39. The Group has no net investment, fair value
\nor cash \ufb02ow hedges under IAS 39 at 31 December 2022 and 2021. All derivatives that are not designated as hedging instruments are carried at fair
\nvalue, with movements in fair value being recorded in the income statement.
\nEmbedded derivatives are embedded within other non-derivative host \ufb01nancial instruments and insurance contracts to create hybrid
\ninstruments. Embedded derivatives meeting the de\ufb01nition of an insurance contract are accounted for under IFRS 4. Where economic
\ncharacteristics and risks of the embedded derivatives are not closely related to the economic characteristics and risks of the host instrument, and
\nwhere the hybrid instrument is not measured at fair value with the changes in fair value recognised in the income statement, the embedded
\nderivative is required to be bifurcated and carried at fair value as a derivative measured in accordance with IAS 39.
\nIn addition, the Group applies the option under IFRS 4 to not separate and fair value surrender options embedded in host contracts and
\nwith-pro\ufb01ts investment contracts whose strike price is either a \ufb01xed amount or a \ufb01xed amount plus interest.
\nDerivatives held and their purpose
\nThe Group enters into a variety of exchange traded and over-the-counter derivative \ufb01nancial instruments, including futures, options, forward
\ncontracts, swaps and swaptions.
\nAll over-the-counter derivative transactions are conducted under standardised ISDA (International Swaps and Derivatives Association Inc)
\nmaster agreements and collateral agreements are in place between the individual entities and relevant counterparties under each of these
\nmarket master agreements.
\nDerivatives are used for e\ufb03cient portfolio management to obtain cost e\ufb00ective and management of exposure to various markets in
\naccordance with the Group\u2019s investment strategies and to manage exposure to interest rate, currency, credit and other business risks. The Group
also uses interest rate derivatives to reduce exposure to interest rate volatility. O\ufb00setting assets and liabilities
\nThe Group\u2019s derivative instruments, repurchase agreements and securities lending agreements are subject to master netting arrangements and
\ncollateral arrangements. A master netting arrangement with a counterparty creates a right of o\ufb00set for amounts due to and due from that same
\ncounterparty that is enforceable in the event of a default or bankruptcy. The Group recognises amounts subject to master netting arrangements
\non a gross basis within the consolidated balance sheets.
\nThe following tables present the gross and net information about the Group\u2019s \ufb01nancial instruments subject to master netting arrangements:
\n31 Dec 2022
$m
\nGross amount
\nincluded in the
\nbalance sheet
\nnote (i)
\nRelated amounts not o\ufb00set in the balance sheet
\nNet
\namount
\nnote (iv)
\nFinancial
\ninstruments
\nnote (ii)
\nCash
\ncollateral
\nSecurities
\ncollateral
\nnote (iii)
\nFinancial assets:
\nDerivative assets
457
(179)
(217)
\u2013
61
\nReverse repurchase agreements
3,174
\u2013
\u2013
(3,174)
\u2013
\nTotal \ufb01nancial assets
3,631
(179)
(217)
(3,174)
61
\nFinancial liabilities:
\nDerivative liabilities
(284)
179
27
6
(72)
\nSecurities lending and repurchase agreements
(582)
\u2013
13
566
(3)
\nTotal \ufb01nancial liabilities
(866)
179
40
572
(75)
\n31 Dec 2021
$m
\nGross amount
\nincluded in the
\nbalance sheet
\nnote (i)
\nRelated amounts not o\ufb00set in the balance sheet
\nNet
\namount
\nnote (iv)
\nFinancial
\ninstruments
\nnote (ii)
\nCash
\ncollateral
\nSecurities
\ncollateral
\nnote (iii)
\nFinancial assets:
\nDerivative assets
170
(94)
(31)
(1)
44
\nReverse repurchase agreements
2,135
\u2013
\u2013
(2,134)
1
\nTotal \ufb01nancial assets
2,305
(94)
(31)
(2,135)
45
\nFinancial liabilities:
\nDerivative liabilities
(165)
94
63
\u2013
(8)
\nSecurities lending and repurchase agreements
(222)
\u2013
153
69
\u2013
\nTotal \ufb01nancial liabilities
(387)
94
216
69
(8)
\nNotes
\n(i)
The Group has not o\ufb00set any of the amounts included in the balance sheet.
\n(ii)
Represents the amount that could be o\ufb00set under master netting or similar arrangements where the Group does not satisfy the full criteria to o\ufb00set in the balance sheet.
\n(iii)
Excludes initial margin amounts for exchange-traded derivatives.
\n(iv)
In the tables above, the amounts of assets or liabilities included in the balance sheet would be o\ufb00set \ufb01rst by \ufb01nancial instruments that have the right of o\ufb00set under master netting or similar
arrangements with any remaining amount reduced by the amount of cash and securities collateral. The actual amount of collateral may be greater than amounts presented in the tables. ",
"dimensions": {
"concept": "ifrs-full:DisclosureOfDerivativeFinancialInstrumentsExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f38621": {
"value": "Financial instruments at fair value
\n31 Dec 2022
$m
\nLevel 1
Level 2
Level 3
\nQuoted prices
\n(unadjusted)
\nin active
\nmarkets
\nValuation based
\non signi\ufb01cant
\nobservable
\nmarket inputs
\nnote (i)
\nValuation based
\non signi\ufb01cant
\nunobservable
\nmarket inputs
\nnote (ii)
\nTotal
\nLoans
\u2013
447
3
450
\nEquity securities and holdings in collective investment schemes
49,725
7,130
824
57,679
\nDebt securities
57,215
19,736
38
76,989
\nDerivative assets
82
487
\u2013
569
\nDerivative liabilities
(778)
(223)
\u2013
(1,001)
\nTotal \ufb01nancial investments, net of derivative liabilities
106,244
27,577
865
134,686
\nInvestment contract liabilities without discretionary participation features
\u2013
(741)
\u2013
(741)
\nNet asset value attributable to unit holders of consolidated investment funds
(4,193)
\u2013
\u2013
(4,193)
\nTotal \ufb01nancial instruments at fair value
102,051
26,836
865
129,752
\nPercentage of total (%)
78%
21%
1%
100%
\nAnalysed by business type:
\nFinancial investments net of derivative liabilities, at fair value
\nWith-pro\ufb01ts
65,880
14,605
748
81,233
\nUnit-linked
21,319
1,851
4
23,174
\nNon-linked shareholder-backed business
19,045
11,121
113
30,279
\nTotal \ufb01nancial investments net of derivative liabilities, at fair value
106,244
27,577
865
134,686
\nPercentage of total (%)
78%
21%
1%
100%
\nTotal \ufb01nancial investments net of derivative liabilities, at fair value
106,244
27,577
865
134,686
\nOther \ufb01nancial liabilities at fair value
(4,193)
(741)
\u2013
(4,934)
\nTotal \ufb01nancial instruments at fair value
102,051
26,836
865
129,752
31 Dec 2021
$m
\nLevel 1
Level 2
Level 3
\nQuoted prices
\n(unadjusted)
\nin active
\nmarkets
\nValuation based
\non signi\ufb01cant
\nobservable
\nmarket inputs
\nnote (i)
\nValuation based
\non signi\ufb01cant
\nunobservable
\nmarket inputs
\nnote (ii)
\nTotal
\nLoans
\u2013
616
5
621
\nEquity securities and holdings in collective investment schemes
54,107
6,917
577
61,601
\nDebt securities
76,049
22,987
58
99,094
\nDerivative assets
359
122
\u2013
481
\nDerivative liabilities
(146)
(116)
\u2013
(262)
\nTotal \ufb01nancial investments, net of derivative liabilities
130,369
30,526
640
161,535
\nInvestment contract liabilities without discretionary participation features
\u2013
(814)
\u2013
(814)
\nNet asset value attributable to unit holders of consolidated investment funds
(5,618)
(46)
\u2013
(5,664)
\nTotal \ufb01nancial instruments at fair value
124,751
29,666
640
155,057
\nPercentage of total (%)
81%
19%
0%
100%
\nAnalysed by business type:
\nFinancial investments net of derivative liabilities, at fair value
\nWith-pro\ufb01ts
82,489
15,438
506
98,433
\nUnit-linked
24,024
2,343
5
26,372
\nNon-linked shareholder-backed business
23,856
12,745
129
36,730
\nTotal \ufb01nancial investments net of derivative liabilities, at fair value
130,369
30,526
640
161,535
\nPercentage of total (%)
81%
19%
0%
100%
\nTotal \ufb01nancial investments net of derivative liabilities, at fair value
130,369
30,526
640
161,535
\nOther \ufb01nancial liabilities at fair value
(5,618)
(860)
\u2013
(6,478)
\nTotal \ufb01nancial instruments at fair value
124,751
29,666
640
155,057
31 Dec 2022
$m
\nTotal
\ncarrying
\nvalue
\nContractual maturity pro\ufb01le for \ufb01nancial liabilities
\n1 year
\nor less
\n1-2
\nyears
\n2-5
\nyears
\n5-10
\nyears
\n10-15
\nyears
\n15-20
\nyears
\nOver
\n20 years
\nNo stated
\nmaturity
\nTotal
\nundiscounted
\ncash \ufb02ows
\nCore structural borrowings of
\nshareholder-\ufb01nanced
\nbusinesses
\nnote C5.1
\n4,261
509
124
370
2,598
1,024
\u2013
\u2013
750
5,375
\nLease liabilities under IFRS 16
\nnote C5.2
\n299
101
76
127
28
9
\u2013
\u2013
\u2013
341
\nOther operational borrowings
\nnote C5.2
\n516
516
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
516
\nObligations under funding,
\nsecurities lending and sale and
\nrepurchase agreements
582
582
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
582
\nAccruals, deferred income and
\nother liabilities
8,777
6,258
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
2,519
8,777
\nNet asset value attributable to unit
\nholders of consolidated unit
\ntrusts and similar funds
4,193
4,193
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
4,193
\nTotal \ufb01nancial liabilities
18,628
12,159
200
497
2,626
1,033
\u2013
\u2013
3,269
19,784
\n31 Dec 2021
$m
\nTotal
\ncarrying
\nvalue
\nContractual maturity pro\ufb01le for \ufb01nancial liabilities
\n1 year
\nor less
\n1-2
\nyears
\n2-5
\nyears
\n5-10
\nyears
\n10-15
\nyears
\n15-20
\nyears
\nOver
\n20 years
\nNo stated
\nmaturity
\nTotal
\nundiscounted
\ncash \ufb02ows
\nCore structural borrowings of
\nshareholder-\ufb01nanced
\nbusinesses
\nnote C5.1
\n6,127
1,872
551
702
1,817
1,642
\u2013
\u2013
750
7,334
\nLease liabilities under IFRS 16
\nnote C5.2
\n347
110
81
135
45
11
\u2013
\u2013
\u2013
382
\nOther operational borrowings
\nnote C5.2
\n514
514
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
514
\nObligations under funding,
\nsecurities lending and sale and
\nrepurchase agreements
223
223
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
223
\nAccruals, deferred income and
\nother liabilities
7,983
5,972
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
2,011
7,983
\nNet asset value attributable to unit
\nholders of consolidated unit
\ntrusts and similar funds
5,664
5,664
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
5,664
\nTotal \ufb01nancial liabilities
20,858
14,355
632
837
1,862
1,653
\u2013
\u2013
2,761
22,100
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfNetAssetValueAttributableToUnitholdersExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f39118": {
"value": "Liquidity analysis Contractual maturities of \ufb01nancial liabilities on an undiscounted cash \ufb02ow basis
\nThe following table sets out the contractual maturities for applicable classes of \ufb01nancial liabilities, excluding derivative liabilities and investment
\ncontracts that are separately presented. The \ufb01nancial liabilities are included in the column relating to the contractual maturities of the
\nundiscounted cash \ufb02ows (including contractual interest payments) based on the earliest period in which the Group can be required to pay
\nassuming conditions are consistent with those of year end.
\n31 Dec 2022
$m
\nTotal
\ncarrying
\nvalue
\nContractual maturity pro\ufb01le for \ufb01nancial liabilities
\n1 year
\nor less
\n1-2
\nyears
\n2-5
\nyears
\n5-10
\nyears
\n10-15
\nyears
\n15-20
\nyears
\nOver
\n20 years
\nNo stated
\nmaturity
\nTotal
\nundiscounted
\ncash \ufb02ows
\nCore structural borrowings of
\nshareholder-\ufb01nanced
\nbusinesses
\nnote C5.1
\n4,261
509
124
370
2,598
1,024
\u2013
\u2013
750
5,375
\nLease liabilities under IFRS 16
\nnote C5.2
\n299
101
76
127
28
9
\u2013
\u2013
\u2013
341
\nOther operational borrowings
\nnote C5.2
\n516
516
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
516
\nObligations under funding,
\nsecurities lending and sale and
\nrepurchase agreements
582
582
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
582
\nAccruals, deferred income and
\nother liabilities
8,777
6,258
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
2,519
8,777
\nNet asset value attributable to unit
\nholders of consolidated unit
\ntrusts and similar funds
4,193
4,193
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
4,193
\nTotal \ufb01nancial liabilities
18,628
12,159
200
497
2,626
1,033
\u2013
\u2013
3,269
19,784
\n31 Dec 2021
$m
\nTotal
\ncarrying
\nvalue
\nContractual maturity pro\ufb01le for \ufb01nancial liabilities
\n1 year
\nor less
\n1-2
\nyears
\n2-5
\nyears
\n5-10
\nyears
\n10-15
\nyears
\n15-20
\nyears
\nOver
\n20 years
\nNo stated
\nmaturity
\nTotal
\nundiscounted
\ncash \ufb02ows
\nCore structural borrowings of
\nshareholder-\ufb01nanced
\nbusinesses
\nnote C5.1
\n6,127
1,872
551
702
1,817
1,642
\u2013
\u2013
750
7,334
\nLease liabilities under IFRS 16
\nnote C5.2
\n347
110
81
135
45
11
\u2013
\u2013
\u2013
382
\nOther operational borrowings
\nnote C5.2
\n514
514
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
514
\nObligations under funding,
\nsecurities lending and sale and
\nrepurchase agreements
223
223
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
223
\nAccruals, deferred income and
\nother liabilities
7,983
5,972
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
2,011
7,983
\nNet asset value attributable to unit
\nholders of consolidated unit
\ntrusts and similar funds
5,664
5,664
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
5,664
\nTotal \ufb01nancial liabilities
20,858
14,355
632
837
1,862
1,653
\u2013
\u2013
2,761
22,100
319
Prudential plc
Annual Report 2022
\nGroup overview
Strategic report
Governance
Directors\u2019 remuneration report
European Embedded Value (EEV) basis results
Additional information
Financial statements
C Financial position
/ continued
\nC2 Fair value measurement
continued
\nC2.3
Additional information on \ufb01nancial instruments
continued
\nMaturity analysis of derivatives
\nThe following table shows the carrying value of the gross and net derivative positions.
\nCarrying value of net derivatives
$m
\nDerivative
\nassets
\nDerivative
\nliabilities
\nNet
\nderivative
\nposition
\n31 Dec 2022
569
(1,001)
(432)
\n31 Dec 2021
481
(262)
219
\nAll net derivatives have been included at fair value due within one year or less, representing the basis on which they are managed (ie to manage
\nprincipally asset or liability value exposures). The Group has no cash \ufb02ow hedges and, in general, contractual maturities are not considered
\nessential for an understanding of the timing of the cash \ufb02ows for these instruments.
\nMaturity analysis of investment contracts
\nThe table below shows the maturity pro\ufb01le for investment contracts based on undiscounted cash \ufb02ow projections of expected bene\ufb01t payments.
\nMaturity pro\ufb01le for investment contracts
$m
\nTotal
\ncarrying
\nvalue
\n1 year
\nor less
\n1-5
\nyears
\n5-10
\nyears
\n10-15
\nyears
\n15-20
\nyears
\nOver
\n20 years
\nTotal
\nundiscounted
\ncash \ufb02ows
\n31 Dec 2022
420
11
369
98
22
8
4
512
\n31 Dec 2021
459
14
442
63
16
6
2
543
\nThe undiscounted cash \ufb02ows in the maturity pro\ufb01le shown above excludes contracts which have no stated maturity but which are repayable on
\ndemand.
\nMost investment contracts have options to surrender early, often subject to surrender or other penalties. Therefore, most contracts can be said
\nto have a contractual maturity of less than one year, but the additional charges and term of the contracts mean these are unlikely to be exercised
\nin practice and the more useful information is to present information on expected payment.
\nThe vast majority of the Group\u2019s \ufb01nancial assets are held to back the Group\u2019s policyholder liabilities. Although asset/liability matching is an
\nimportant component of managing policyholder liabilities (both those classi\ufb01ed as insurance and those classi\ufb01ed as investments), this pro\ufb01le is
\nmainly relevant for managing market risk rather than liquidity risk. Within each business unit, this asset/liability matching is performed on a
\nportfolio-by-portfolio basis.
\nIn terms of liquidity risk, a large proportion of the policyholder liabilities contain discretionary surrender values or surrender charges, meaning
\nthat many of the Group\u2019s liabilities are expected to be held for the long term. Much of the Group\u2019s investment portfolios are in marketable
\nsecurities, which can therefore be converted quickly to liquid assets.
\nFor the reasons provided above, an analysis of the Group\u2019s assets by contractual maturity is not considered meaningful to evaluate the nature
\nand extent of the Group\u2019s liquidity risk.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfLiquidityRiskExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f39409": {
"value": "Maturity analysis of investment contracts
\nThe table below shows the maturity pro\ufb01le for investment contracts based on undiscounted cash \ufb02ow projections of expected bene\ufb01t payments.
\nMaturity pro\ufb01le for investment contracts
$m
\nTotal
\ncarrying
\nvalue
\n1 year
\nor less
\n1-5
\nyears
\n5-10
\nyears
\n10-15
\nyears
\n15-20
\nyears
\nOver
\n20 years
\nTotal
\nundiscounted
\ncash \ufb02ows
\n31 Dec 2022
420
11
369
98
22
8
4
512
\n31 Dec 2021
459
14
442
63
16
6
2
543
\nThe undiscounted cash \ufb02ows in the maturity pro\ufb01le shown above excludes contracts which have no stated maturity but which are repayable on
\ndemand.
\nMost investment contracts have options to surrender early, often subject to surrender or other penalties. Therefore, most contracts can be said
\nto have a contractual maturity of less than one year, but the additional charges and term of the contracts mean these are unlikely to be exercised
\nin practice and the more useful information is to present information on expected payment.
\nThe vast majority of the Group\u2019s \ufb01nancial assets are held to back the Group\u2019s policyholder liabilities. Although asset/liability matching is an
\nimportant component of managing policyholder liabilities (both those classi\ufb01ed as insurance and those classi\ufb01ed as investments), this pro\ufb01le is
\nmainly relevant for managing market risk rather than liquidity risk. Within each business unit, this asset/liability matching is performed on a
\nportfolio-by-portfolio basis.
\nIn terms of liquidity risk, a large proportion of the policyholder liabilities contain discretionary surrender values or surrender charges, meaning
\nthat many of the Group\u2019s liabilities are expected to be held for the long term. Much of the Group\u2019s investment portfolios are in marketable
\nsecurities, which can therefore be converted quickly to liquid assets.
\nFor the reasons provided above, an analysis of the Group\u2019s assets by contractual maturity is not considered meaningful to evaluate the nature
\nand extent of the Group\u2019s liquidity risk.
Gross
\ninsurance
\ncontract
\nliabilities
\n$m
\nReinsurers\u2019
\nshare of
\ninsurance
\ncontract
\nliabilities
\n$m
\nInvestment
\ncontract
\nliabilities
\n$m
\nUnallocated
\nsurplus of
\nwith-pro\ufb01ts
\nfunds
\n$m
\nAt 1 Jan 2021
(436,787)
46,595
(4,459)
(5,217)
\nRemoval of discontinued US operations
\nnote (i)
\n293,325
(35,232)
3,188
\u2013
\nIncome (expense) included in the income statement
\nnotes (i)(iii)
\n(9,082)
(1,552)
189
(202)
\nOther movements
\nnote (ii)
\n\u2013
\u2013
(75)
\u2013
\nForeign exchange translation di\ufb00erences
1,789
(58)
(3)
35
\nBalance at 31 Dec 2021/1 Jan 2022
(150,755)
9,753
(1,160)
(5,384)
\nIncome (expense) included in the income statement
\nnotes (i)(iii)
\n27,252
(6,908)
88
1,868
\nOther movements
\nnote (ii)
\n\u2013
\u2013
(26)
\u2013
\nForeign exchange translation di\ufb00erences
2,290
(38)
48
21
\nAt 31 Dec 2022
(121,213)
2,807
(1,050)
(3,495)
\nNotes
\n(i)
The total charge for bene\ufb01ts and claims shown in the income statement comprises the amounts shown as \u2018Income (expense) included in the income statement\u2019 in the table above together with
\nclaims paid of $(9,343) million in the year (2021: $(8,845) million) and claim amounts attributable to reinsurers of $740 million (2021: $581 million). Claims incurred, net of reinsurance, shown
\nin the segment analysis of bene\ufb01ts and claims items below include claims paid and movement in claims outstanding payables, net of reinsurance, in the year.
\n(ii)
Other movements include premiums received and claims paid on investment contracts without discretionary participating features, which are taken directly to the statement of \ufb01nancial position
\nin accordance with IAS 39.
\n(iii)
The 2021 movement in the gross contract liabilities included $160 million for the impact of a change to allow for illiquidity premium in the calculation of the valuation interest rate (VIR) used to
\nvalue long-term insurance liabilities in Thailand. The 2022 movement in the gross contract liabilities and reinsurers\u2019 share of insurance contract liabilities included the impact from the early
\nadoption of the Hong Kong Risk-Based Capital Regime as discussed below.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfInvestmentContractsLiabilitiesExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f39467": {
"value": "Credit risk The Group\u2019s maximum exposure to credit risk of \ufb01nancial instruments before any allowance for collateral or allocation of losses to policyholders is
\nrepresented by the carrying value of \ufb01nancial instruments on the balance sheet that have exposures to credit risk comprising cash and cash
\nequivalents, deposits, debt securities, loans and derivative assets, accrued investment income and other debtors. Further details of collateral in
\nplace in relation to derivatives, securities lending, repurchase and reverse repurchase agreements and other transactions are provided in note (c)
\nbelow. The Group\u2019s exposure to credit risk is further discussed in the Risk review report.
\nOf the total loans and receivables held at 31 December 2022, $6 million (31 December 2021: $7 million) are past their due date but are not
\nimpaired, of which $1 million are less than one year past their due date (31 December 2021: $2 million). The Group expects full recovery of these
\nloans and receivables.
\nThere are no \ufb01nancial assets that would have been past due or impaired had the terms not been renegotiated in both years.
In addition, the Group did not take possession of any other collateral held as security in both years.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfCreditRiskExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f39500": {
"value": "Foreign exchange risk
\nAs at 31 December 2022, the Group held 27 per cent (31 December 2021: 26 per cent) of its \ufb01nancial assets and 64 per cent (31 December 2021:
\n63 per cent) of its \ufb01nancial liabilities in currencies mainly USD, other than the functional currency of the relevant business units or the currency to
\nwhich the functional currency is pegged (eg \ufb01nancial assets and liabilities of USD denominated business in Hong Kong). The exchange risks
\ninherent in these exposures are mitigated through the use of derivatives, mainly forward currency contracts and currency swaps as described in
\nnote (b) below.
\nThe amount of exchange gain recognised in the income statement in 2022, except for those arising on \ufb01nancial instruments measured at fair
\nvalue through pro\ufb01t or loss, is $234 million (2021: loss of $(132) million).
C6.1
Insurance operations
\n(a) Sensitivity to key market risks
\nThe table below shows the sensitivity of shareholders\u2019 equity as at 31 December 2022 and 2021 for insurance operations to the following market risks:
\n>
1 per cent increase and 0.5 per cent decrease in interest rates (based on local government bond yields at the valuation date) in isolation and
\nsubject to a \ufb02oor of zero; and
\n>
Instantaneous 10 per cent rise and 20 per cent fall in the market value of equity and property assets. The equity risk sensitivity analysis assumes
\nthat all equity indices fall by the same percentage.
\nThe sensitivities below only allow for limited management actions such as changes to policyholder bonuses, where applicable. If the economic
\nconditions set out in the sensitivities persisted, the \ufb01nancial impacts may di\ufb00er to the instantaneous impacts shown below. Given the continuous
\nrisk management processes in place, management could take additional actions to help mitigate the impact of these stresses, including (but not
\nlimited to) rebalancing investment portfolios, increased use of reinsurance, repricing of in-force bene\ufb01ts, changes to new business pricing and the
\nmix of new business being sold.
\nWhere liabilities are valued using historic average rates for a short period (ie up to three years), the valuation interest rates are adjusted to
\nassume a parallel increase or decrease in the interest rates used in the averaging approach to re\ufb02ect the impact that could be seen in the near
\nterm. Credit risk sensitivities, such as the impact on the value of debt securities and policyholder liabilities
from movements in credit spreads are not
\npresented below
. A one-letter credit downgrade in isolation (ie ignoring any consequential change in valuation) would not have a material impact
\non IFRS pro\ufb01t or shareholders\u2019 equity.
\nNet e\ufb00ect on shareholders\u2019 equity from insurance operations
\n31 Dec 2022
\n$m
\n31 Dec 2021
\n$m
\nShareholders\u2019 equity of insurance operations
14,407
14,289
\nSensitivity to key market risks:
\nnote
\nInterest rates and consequential e\ufb00ects \u2013 1% increase
(386)
(796)
\nInterest rates and consequential e\ufb00ects \u2013 0.5% decrease
(122)
137
\nEquity/property market values \u2013 10% rise
190
372
\nEquity/property market values \u2013 20% fall
(729)
(787)
\nNote
\nThe e\ufb00ect from the changes in interest rates or equity and property prices above, if they arose, would impact pro\ufb01t after tax for the insurance operations and would mostly be recorded within short-term
\n\ufb02uctuations in investment returns. The impact on pro\ufb01t after tax would be the same as the net e\ufb00ect on shareholders\u2019 equity. Changes to the results of the Africa insurance operations from interest rate
\nor equity rate changes would not materially impact the Group.
\nThe degree of sensitivity of the results of the non-linked shareholder-backed business of the insurance operations to movements in interest rates
\ndepends upon the degree to which the liabilities under the \u2018grandfathered\u2019 IFRS 4 measurement basis re\ufb02ects market interest rates from period to
\nperiod. This varies by business unit.
\nFor example:
\n>
Taiwan and India businesses apply US GAAP, for which the results can be more sensitive as the e\ufb00ect of interest rate movements on the backing
\ninvestments may not be o\ufb00set by liability movements; and
\n>
The level of options and guarantees in the products written in a particular business unit will a\ufb00ect the degree of sensitivity to interest rate
\nmovements.
The sensitivity of the insurance operations presented as a whole at a given point in time will also be a\ufb00ected by a change in the relative size of the
\nindividual businesses.
\nThe \u2018increase of 1%\u2019 sensitivities re\ufb02ect that, for many operations the impact of interest rate movements on the value of government and
\ncorporate bond investments dominates, namely bonds are expected to decrease in value as interest rates increase to a greater extent than the
\no\ufb00setting decrease in liabilities from a corresponding change in discount rates. This arises because the discount rate in some operations does not
\n\ufb02uctuate in line with interest rate movements. Under a 0.5% decrease interest rate scenario although in the majority of operations asset gains
\nexceed the increase in liabilities, there are a number of operations where the increase in liabilities dominates, driven by an increase in the value of
\npolicyholder guarantees, hence this results in an overall small negative impact of an instantaneous decrease of rates at 31 December 2022.
\nMovements in equities backing with-pro\ufb01ts and unit-linked business have been excluded from the equity and property sensitivities as they are
\ngenerally matched by an equal movement in insurance liabilities (including unallocated surplus of with-pro\ufb01ts funds). The impact on changes to
\nfuture pro\ufb01tability as a result of changes to the asset values within unit-linked or with-pro\ufb01ts funds have not been included in the instantaneous
\nsensitivity above. The estimated sensitivities shown above include equity and property investments held by the Group\u2019s joint venture and
\nassociate businesses. Generally, changes in equity and property investment values held outside unit-linked and with-pro\ufb01ts funds are not directly
\no\ufb00set by movements in non-linked policyholder liabilities. For Hong Kong\u2019s non-participating business, liabilities largely re\ufb02ect asset shares post
\nthe adoption of HK RBC and therefore the consequential movements in equities are o\ufb00set by movements in policyholder liabilities.
\n(b) Sensitivity to insurance risk
\nFor insurance operations, adverse persistency experience can impact the IFRS pro\ufb01tability of certain types of business written. This risk is
\nmanaged at a business unit level through regular monitoring of experience and the implementation of management actions as necessary.
\nThese actions could include product enhancements, increased management focus on premium collection, as well as other customer retention
\ne\ufb00orts. The potential \ufb01nancial impact of lapses is often mitigated through the speci\ufb01c features of the products, eg surrender charges, or through
\nthe availability of premium holiday or partial withdrawal policy features. The reserving basis, as discussed in note A3.1(a) and C3.4, is generally
\nsuch that a change in lapse assumptions has an immaterial e\ufb00ect on immediate pro\ufb01tability.
\nMany of the business units are exposed to mortality and morbidity risk and a provision is made within policyholder liabilities to cover the
\npotential exposure. If all these assumptions were strengthened by 5 per cent then it is estimated that pro\ufb01t after tax and shareholders\u2019 equity
\nwould decrease by approximately $(101) million (2021: $(108) million), before consideration of other reserving adjustments eg a corresponding
\nrelease of margin for prudence. Weakening these assumptions by 5 per cent would have a similar opposite impact.
\nC6.2
Eastspring and central operations
\nThe pro\ufb01t for the year of Eastspring is sensitive to the level of assets under management, as this signi\ufb01cantly a\ufb00ects the value of management
\nfees earned by the business in the current and future periods. Assets under management will rise and fall as market conditions change, with a
\nconsequential impact on pro\ufb01tability.
\nEastspring holds a small amount of investments direct on its balance sheet, including investments in respect of seeding capital into retail funds
\nit sells to third parties (see note C1). Eastspring\u2019s pro\ufb01t will therefore have some exposure to the market movements of these investments.
\nAt 31 December 2022, the Group\u2019s central operations held a 9.2 per cent (31 December 2021: 18.4 per cent) economic interest in the equity
\nsecurities of Jackson. These equity securities are listed on the New York Stock Exchange and classi\ufb01ed as available-for-sale with a fair value of
\n$266 million at 31 December 2022 (31 December 2021: $683 million). If the value of these securities decreased by 20 per cent, the change in
\nvaluation would be $(53) million (31 December 2021: $(137) million), which would reduce shareholders\u2019 equity by this amount before tax, all of
\nwhich would pass through other comprehensive income outside of the pro\ufb01t or loss.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfMarketRiskExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f39510": {
"value": "(b) Derivatives and hedging Derivative \ufb01nancial instruments are used to reduce or manage investment, interest rate and currency exposures, to facilitate e\ufb03cient portfolio
\nmanagement and for investment purposes.
\nThe Group does not regularly seek to apply fair value or cash \ufb02ow hedging treatment under IAS 39. The Group has no net investment, fair value
\nor cash \ufb02ow hedges under IAS 39 at 31 December 2022 and 2021. All derivatives that are not designated as hedging instruments are carried at fair
\nvalue, with movements in fair value being recorded in the income statement.
\nEmbedded derivatives are embedded within other non-derivative host \ufb01nancial instruments and insurance contracts to create hybrid
\ninstruments. Embedded derivatives meeting the de\ufb01nition of an insurance contract are accounted for under IFRS 4. Where economic
\ncharacteristics and risks of the embedded derivatives are not closely related to the economic characteristics and risks of the host instrument, and
\nwhere the hybrid instrument is not measured at fair value with the changes in fair value recognised in the income statement, the embedded
\nderivative is required to be bifurcated and carried at fair value as a derivative measured in accordance with IAS 39.
\nIn addition, the Group applies the option under IFRS 4 to not separate and fair value surrender options embedded in host contracts and
\nwith-pro\ufb01ts investment contracts whose strike price is either a \ufb01xed amount or a \ufb01xed amount plus interest.
\nDerivatives held and their purpose
\nThe Group enters into a variety of exchange traded and over-the-counter derivative \ufb01nancial instruments, including futures, options, forward
\ncontracts, swaps and swaptions.
\nAll over-the-counter derivative transactions are conducted under standardised ISDA (International Swaps and Derivatives Association Inc)
\nmaster agreements and collateral agreements are in place between the individual entities and relevant counterparties under each of these
\nmarket master agreements.
\nDerivatives are used for e\ufb03cient portfolio management to obtain cost e\ufb00ective and management of exposure to various markets in
\naccordance with the Group\u2019s investment strategies and to manage exposure to interest rate, currency, credit and other business risks. The Group
\nalso uses interest rate derivatives to reduce exposure to interest rate volatility.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForDerivativeFinancialInstrumentsAndHedgingExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f39511": {
"value": "(b) Derivatives and hedging Derivative \ufb01nancial instruments are used to reduce or manage investment, interest rate and currency exposures, to facilitate e\ufb03cient portfolio
\nmanagement and for investment purposes.
\nThe Group does not regularly seek to apply fair value or cash \ufb02ow hedging treatment under IAS 39. The Group has no net investment, fair value
\nor cash \ufb02ow hedges under IAS 39 at 31 December 2022 and 2021. All derivatives that are not designated as hedging instruments are carried at fair
\nvalue, with movements in fair value being recorded in the income statement.
\nEmbedded derivatives are embedded within other non-derivative host \ufb01nancial instruments and insurance contracts to create hybrid
\ninstruments. Embedded derivatives meeting the de\ufb01nition of an insurance contract are accounted for under IFRS 4. Where economic
\ncharacteristics and risks of the embedded derivatives are not closely related to the economic characteristics and risks of the host instrument, and
\nwhere the hybrid instrument is not measured at fair value with the changes in fair value recognised in the income statement, the embedded
\nderivative is required to be bifurcated and carried at fair value as a derivative measured in accordance with IAS 39.
\nIn addition, the Group applies the option under IFRS 4 to not separate and fair value surrender options embedded in host contracts and
\nwith-pro\ufb01ts investment contracts whose strike price is either a \ufb01xed amount or a \ufb01xed amount plus interest.
\nDerivatives held and their purpose
\nThe Group enters into a variety of exchange traded and over-the-counter derivative \ufb01nancial instruments, including futures, options, forward
\ncontracts, swaps and swaptions.
\nAll over-the-counter derivative transactions are conducted under standardised ISDA (International Swaps and Derivatives Association Inc)
\nmaster agreements and collateral agreements are in place between the individual entities and relevant counterparties under each of these
\nmarket master agreements.
\nDerivatives are used for e\ufb03cient portfolio management to obtain cost e\ufb00ective and management of exposure to various markets in
\naccordance with the Group\u2019s investment strategies and to manage exposure to interest rate, currency, credit and other business risks. The Group
\nalso uses interest rate derivatives to reduce exposure to interest rate volatility.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForDerivativeFinancialInstrumentsExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f39512": {
"value": "(b) Derivatives and hedging Derivative \ufb01nancial instruments are used to reduce or manage investment, interest rate and currency exposures, to facilitate e\ufb03cient portfolio
\nmanagement and for investment purposes.
\nThe Group does not regularly seek to apply fair value or cash \ufb02ow hedging treatment under IAS 39. The Group has no net investment, fair value
\nor cash \ufb02ow hedges under IAS 39 at 31 December 2022 and 2021. All derivatives that are not designated as hedging instruments are carried at fair
\nvalue, with movements in fair value being recorded in the income statement.
\nEmbedded derivatives are embedded within other non-derivative host \ufb01nancial instruments and insurance contracts to create hybrid
\ninstruments. Embedded derivatives meeting the de\ufb01nition of an insurance contract are accounted for under IFRS 4. Where economic
\ncharacteristics and risks of the embedded derivatives are not closely related to the economic characteristics and risks of the host instrument, and
\nwhere the hybrid instrument is not measured at fair value with the changes in fair value recognised in the income statement, the embedded
\nderivative is required to be bifurcated and carried at fair value as a derivative measured in accordance with IAS 39.
\nIn addition, the Group applies the option under IFRS 4 to not separate and fair value surrender options embedded in host contracts and
\nwith-pro\ufb01ts investment contracts whose strike price is either a \ufb01xed amount or a \ufb01xed amount plus interest.
\nDerivatives held and their purpose
\nThe Group enters into a variety of exchange traded and over-the-counter derivative \ufb01nancial instruments, including futures, options, forward
\ncontracts, swaps and swaptions.
\nAll over-the-counter derivative transactions are conducted under standardised ISDA (International Swaps and Derivatives Association Inc)
\nmaster agreements and collateral agreements are in place between the individual entities and relevant counterparties under each of these
\nmarket master agreements.
\nDerivatives are used for e\ufb03cient portfolio management to obtain cost e\ufb00ective and management of exposure to various markets in
\naccordance with the Group\u2019s investment strategies and to manage exposure to interest rate, currency, credit and other business risks. The Group
\nalso uses interest rate derivatives to reduce exposure to interest rate volatility.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForHedgingExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f39550": {
"value": "Derecognition of \ufb01nancial assets and liabilities The Group\u2019s policy is to derecognise \ufb01nancial assets when it is deemed that substantially all the risks and rewards of ownership have been
\ntransferred.
\nThe Group derecognises \ufb01nancial liabilities only when the obligation speci\ufb01ed in the contract is discharged, cancelled or has expired.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForDerecognitionOfFinancialInstrumentsExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f39559": {
"value": "Reverse repurchase agreements The Group is party to various reverse repurchase agreements under which securities are purchased from third parties with an obligation to resell
\nthe securities. The securities are not recognised as investments in the statement of \ufb01nancial position but the right to receive the cash paid is
recognised as deposits.
\nThe Group has entered into reverse repurchase transactions under which it purchased securities and had taken on the obligation to resell the
\nsecurities. At 31 December 2022, the fair value of the collateral held in respect of these transactions, which is represented by the purchased
\nsecurities, was $3,244 million (31 December 2021: $2,149 million).
\nSecurities lending and repurchase agreements
\nThe Group is also party to various securities lending agreements (including repurchase agreements) under which securities are loaned to third
\nparties on a short-term basis. The loaned securities are not derecognised; rather, they continue to be recognised within the appropriate investment
\nclassi\ufb01cation. To the extent cash collateral is received it is recognised on the statement of \ufb01nancial position with the obligation to repay the cash
\npaid recognised as a liability. Other collateral is not recognised.
\nAt 31 December 2022, the Group had $1,571 million (31 December 2021: $854 million) of lent securities and assets subject to repurchase
agreements. The cash and securities collateral held or pledged under such agreements were $1,679 million (31 December 2021: $913 million).",
"dimensions": {
"concept": "ifrs-full:DisclosureOfRepurchaseAndReverseRepurchaseAgreementsExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f39561": {
"value": "The Group is party to various reverse repurchase agreements under which securities are purchased from third parties with an obligation to resell
\nthe securities. The securities are not recognised as investments in the statement of \ufb01nancial position but the right to receive the cash paid is
recognised as deposits.The Group is also party to various securities lending agreements (including repurchase agreements) under which securities are loaned to third
\nparties on a short-term basis. The loaned securities are not derecognised; rather, they continue to be recognised within the appropriate investment
\nclassi\ufb01cation. To the extent cash collateral is received it is recognised on the statement of \ufb01nancial position with the obligation to repay the cash
\npaid recognised as a liability. Other collateral is not recognised.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForRepurchaseAndReverseRepurchaseAgreementsExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f39577": {
"value": "To the extent cash collateral is received it is recognised on the statement of \ufb01nancial position with the obligation to repay the cash paid recognised as a liability. Other collateral is not recognised.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForCollateralExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f39616": {
"value": "Collateral and pledges under derivative transactions At 31 December 2022, the Group had pledged $62 million (31 December 2021: $99 million) for liabilities and held collateral of $234 million
\n(31 December 2021: $50 million) in respect of over-the-counter derivative transactions. These transactions are conducted under terms that are
\nusual and customary to collateralised transactions including, where relevant, standard securities lending and repurchase agreements.
\nThe Group has entered into collateral arrangements in relation to over-the-counter derivative transactions, which permit sale or re-pledging of
\nunderlying collateral. The Group has not sold any collateral held or re-pledged any collateral.
\nAll over-the-counter derivative transactions are conducted under standardised International Swaps and Derivatives Association (ISDA) master
\nagreements. The collateral management for these transactions is conducted under the usual and customary terms and conditions set out in the
\nCredit Support Annex to the ISDA master agreement.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfCollateralExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f39633": {
"value": "The Group\u2019s derivative instruments, repurchase agreements and securities lending agreements are subject to master netting arrangements and collateral arrangements. A master netting arrangement with a counterparty creates a right of o\ufb00set for amounts due to and due from that same
\ncounterparty that is enforceable in the event of a default or bankruptcy. The Group recognises amounts subject to master netting arrangements
\non a gross basis within the consolidated balance sheets.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForOffsettingOfFinancialInstrumentsExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f39784": {
"value": "C3 Policyholder liabilities and unallocated surplus C3.1
Policyholder liabilities and unallocated surplus by business type
\n(a) Movement in policyholder liabilities and unallocated surplus of with-pro\ufb01ts funds
\nThe items below represent the amount attributable to changes in policyholder liabilities and unallocated surplus of with-pro\ufb01ts funds as a result of
\neach of the components listed for the insurance operations of the Group. The policyholder liabilities shown include investment contracts without
\ndiscretionary participation features (as de\ufb01ned in IFRS 4) and their full movement in the year. The items are shown gross of external reinsurance.
\nShareholder-backed business
\nWith-
\npro\ufb01ts business
\n$m
\nUnit-linked
\nliabilities
\n$m
\nOther
\nbusiness
\n$m
\nTotal
\n$m
\nAt 1 Jan 2021
86,410
32,506
46,639
165,555
\nComprising:
\n\u2013 Policyholder liabilities on the balance sheet
\n(excludes $296,513 million from discontinued US operations)
81,193
25,433
38,107
144,733
\n\u2013 Unallocated surplus of with-pro\ufb01ts funds on the balance sheet
\nnote (i)
\n5,217
\u2013
\u2013
5,217
\n\u2013 Group\u2019s share of policyholder liabilities relating to joint ventures and associates
\nnote (ii)
\n\u2013
7,073
8,532
15,605
\nPremiums:
\nnote (iii)
\nNew business
1,990
3,038
2,172
7,200
\nIn-force
7,096
2,406
5,286
14,788
\n9,086
5,444
7,458
21,988
\nSurrenders
\nnotes (iii)(iv)
\n(844)
(3,326)
(734)
(4,904)
\nMaturities/deaths/other claim events
(2,116)
(215)
(1,123)
(3,454)
\nNet \ufb02ows
6,126
1,903
5,601
13,630
\nShareholders\u2019 transfers post-tax
(134)
\u2013
\u2013
(134)
\nInvestment-related items and other movements
\nnote (v)
\n2,499
897
(3,505)
(109)
\nForeign exchange translation di\ufb00erences
\nnote (vi)
\n(899)
(550)
(239)
(1,688)
\nAt 31 Dec 2021/1 Jan 2022
94,002
34,756
48,496
177,254
\nComprising:
\n\u2013 Policyholder liabilities on the balance sheet
88,618
25,651
37,646
151,915
\n\u2013 Unallocated surplus of with-pro\ufb01ts funds on the balance sheet
\nnote (i)
\n5,384
\u2013
\u2013
5,384
\n\u2013 Group\u2019s share of policyholder liabilities relating to joint ventures and associates
\nnote (ii)
\n\u2013
9,105
10,850
19,955
\nPremiums:
\nnote (iii)
\nNew business
2,244
1,838
2,697
6,779
\nIn-force
5,809
2,404
5,623
13,836
\n8,053
4,242
8,320
20,615
\nSurrenders
\nnotes (iii)(iv)
\n(1,233)
(2,763)
(677)
(4,673)
\nMaturities/deaths/other claim events
(2,103)
(200)
(1,712)
(4,015)
\nNet \ufb02ows
4,717
1,279
5,931
11,927
\nShareholders\u2019 transfers post-tax
(158)
\u2013
\u2013
(158)
\nInvestment-related items and other movements
\nnote (v)
\n(20,677)
(2,802)
(14,623)
(38,102)
\nForeign exchange translation di\ufb00erences
\nnote (vi)
\n(197)
(1,836)
(2,181)
(4,214)
\nAt 31 Dec 2022
77,687
31,397
37,623
146,707
\nComprising:
\n\u2013 Policyholder liabilities on the balance sheet
74,192
22,842
25,229
122,263
\n\u2013 Unallocated surplus of with-pro\ufb01ts funds on the balance sheet
\nnote (i)
\n3,495
\u2013
\u2013
3,495
\n\u2013 Group\u2019s share of policyholder liabilities relating to joint ventures and associates
\nnote (ii)
\n\u2013
8,555
12,394
20,949
\nAverage policyholder liability balances
\nnote (vii)
\n2022
81,405
33,076
43,060
157,541
\n2021
84,905
33,631
47,568
166,104
\nNotes
\n(i)
Unallocated surplus of with-pro\ufb01ts funds represents the excess of assets over policyholder liabilities, determined in accordance with the Group\u2019s accounting policies, that have yet to be
\nappropriated between policyholders and shareholders for the Group\u2019s with-pro\ufb01ts funds in Hong Kong and Malaysia. In Hong Kong, the unallocated surplus includes the shareholders\u2019 share of
\nexpected future bonuses, with the expected policyholder share being included in policyholder liabilities. Any excess of assets over liabilities and amounts expected to be paid out by the fund on
\nfuture bonuses is also included in the unallocated surplus.
\n(ii)
The Group\u2019s investments in joint ventures and associates are accounted for on an equity method and the Group\u2019s share of the policyholder liabilities as shown above relate to the life business of
\nCPL, India and the Takaful business in Malaysia.
\n(iii)
The analysis includes the impact of premiums, claims and investment movements on policyholders\u2019 liabilities. The impact does not represent premiums, claims and investment movements as reported
\nin the income statement. For example, premiums shown above are after any deductions for fees/charges; claims (surrenders, maturities, deaths and other claim events) shown above represent the
\npolicyholder liabilities provision released rather than the claims amount paid to the policyholder. The analysis also includes net \ufb02ows of the Group\u2019s insurance joint ventures and associate.
\n(iv)
The rate of surrenders for shareholder-backed business (expressed as a percentage of opening policyholder liabilities) is 4.1 per cent in 2022 (2021: 5.1 per cent).
\n(v)
Investment-related items and other movements in 2022 primarily represents the e\ufb00ects of higher interest rates on the discount rates applied in the measurement of the policyholder
\nliabilities,\u00a0together with bond losses due to rising interest rates and lower level of investment returns from equities following the falls in equity markets, primarily in Hong Kong and Singapore
\nwith\u00a0pro\ufb01ts-fund. Other business also includes the e\ufb00ect of the early adoption of the Risk-Based Capital Regime in Hong Kong as discussed in note C3.2 below.
\n(vi)
Movements in the year have been translated at the average exchange rates for the year. The closing balance has been translated at the closing spot rates as at 31 December. Di\ufb00erences upon
\nretranslation are included in foreign exchange translation di\ufb00erences.
\n(vii)
Average policyholder liabilities have been based on opening and closing balances, adjusted for any acquisitions, disposals and other relevant corporate transactions arising in the year, and
\nexclude unallocated surplus of with-pro\ufb01ts funds.
\n323
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\nGroup overview
Strategic report
Governance
Directors\u2019 remuneration report
European Embedded Value (EEV) basis results
Additional information
Financial statements
C Financial position
/ continued
\nC3 Policyholder liabilities and unallocated surplus
continued
\nC3.1
Policyholder liabilities and unallocated surplus by business type
continued
\n(b) Duration of policyholder liabilities
\nThe table below shows the carrying value of policyholder liabilities and the maturity pro\ufb01le of the cash \ufb02ows on a discounted basis, taking account
\nof expected future premiums and investment returns:
\n31 Dec 2022
\n$m
\n31 Dec 2021
\n$m
\nPolicyholder liabilities
122,263
151,915
\nExpected maturity:
\n31 Dec 2022
\n%
\n31 Dec 2021
\n%
\n0 to 5 years
22
20
\n5 to 10 years
18
18
\n10 to 15 years
14
15
\n15 to 20 years
11
12
\n20 to 25 years
10
10
\nOver 25 years
25
25
\n(c) Policyholder liabilities and unallocated surplus by operating segment
\nThe table below shows the policyholder liabilities and unallocated surplus, excluding joint ventures and associates and net of external reinsurance,
\nby segment:
\n31 Dec 2022
\n$m
\n31 Dec 2021
\n$m
\nHong Kong
60,880
79,363
\nIndonesia
3,648
4,257
\nMalaysia
8,231
8,660
\nSingapore
31,197
34,361
\nGrowth markets and other
18,995
20,905
\nTotal segment
122,951
147,546
\nC3.2
Reconciliation of gross and reinsurers\u2019 share of policyholder liabilities and unallocated surplus
\nClaims paid include maturities, annuities, surrenders, deaths and other claim events. Maturity claims are recorded as charges on the policy
\nmaturity date. Annuity claims are recorded when each annuity instalment becomes due for payment. Surrenders are charged to the income
\nstatement when paid. Death and other claims are generally recorded when noti\ufb01ed with additional contract liabilities held, where appropriate, for
\n\u2018incurred but not reported\u2019 (IBNR) claims.
\nFurther analysis of the movement in the year of the Group\u2019s gross contract liabilities, reinsurers\u2019 share of insurance contract liabilities and
\nunallocated surplus of with-pro\ufb01ts funds (excluding those held by joint ventures and associates) is provided below:
\nGross
\ninsurance
\ncontract
\nliabilities
\n$m
\nReinsurers\u2019
\nshare of
\ninsurance
\ncontract
\nliabilities
\n$m
\nInvestment
\ncontract
\nliabilities
\n$m
\nUnallocated
\nsurplus of
\nwith-pro\ufb01ts
\nfunds
\n$m
\nAt 1 Jan 2021
(436,787)
46,595
(4,459)
(5,217)
\nRemoval of discontinued US operations
\nnote (i)
\n293,325
(35,232)
3,188
\u2013
\nIncome (expense) included in the income statement
\nnotes (i)(iii)
\n(9,082)
(1,552)
189
(202)
\nOther movements
\nnote (ii)
\n\u2013
\u2013
(75)
\u2013
\nForeign exchange translation di\ufb00erences
1,789
(58)
(3)
35
\nBalance at 31 Dec 2021/1 Jan 2022
(150,755)
9,753
(1,160)
(5,384)
\nIncome (expense) included in the income statement
\nnotes (i)(iii)
\n27,252
(6,908)
88
1,868
\nOther movements
\nnote (ii)
\n\u2013
\u2013
(26)
\u2013
\nForeign exchange translation di\ufb00erences
2,290
(38)
48
21
\nAt 31 Dec 2022
(121,213)
2,807
(1,050)
(3,495)
\nNotes
\n(i)
The total charge for bene\ufb01ts and claims shown in the income statement comprises the amounts shown as \u2018Income (expense) included in the income statement\u2019 in the table above together with
\nclaims paid of $(9,343) million in the year (2021: $(8,845) million) and claim amounts attributable to reinsurers of $740 million (2021: $581 million). Claims incurred, net of reinsurance, shown
\nin the segment analysis of bene\ufb01ts and claims items below include claims paid and movement in claims outstanding payables, net of reinsurance, in the year.
\n(ii)
Other movements include premiums received and claims paid on investment contracts without discretionary participating features, which are taken directly to the statement of \ufb01nancial position
\nin accordance with IAS 39.
\n(iii)
The 2021 movement in the gross contract liabilities included $160 million for the impact of a change to allow for illiquidity premium in the calculation of the valuation interest rate (VIR) used to
\nvalue long-term insurance liabilities in Thailand. The 2022 movement in the gross contract liabilities and reinsurers\u2019 share of insurance contract liabilities included the impact from the early
\nadoption of the Hong Kong Risk-Based Capital Regime as discussed below.
\n324
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The segmental analysis of the total charge for bene\ufb01t and claims and movement in unallocated surplus, net of reinsurance in the income
\nstatement is shown below. The CPL segment is a joint venture accounted for using the equity method under IFRS, with the Group\u2019s share of its
\nresults net of related tax presented in a single line within the Group\u2019s pro\ufb01t before tax, and therefore not shown in the analysis of bene\ufb01t and
\nclaims items below.
\n2022
$m
\nHong
\nKong
Indonesia
Malaysia
Singapore
\nGrowth markets
\nand other
\nTotal
\nsegment
\nClaims incurred, net of reinsurance
(2,033)
(1,228)
(1,070)
(2,718)
(1,768)
(8,817)
\nDecrease in policyholder liabilities, net of reinsurance
15,643
270
(135)
3,189
1,679
20,646
\nMovement in unallocated surplus of with-pro\ufb01ts funds
1,815
\u2013
53
\u2013
\u2013
1,868
\nBene\ufb01ts and claims and movement in unallocated surplus,
\nnet of reinsurance
15,425
(958)
(1,152)
471
(89)
13,697
\n2021
$m
\nHong
\nKong
Indonesia
Malaysia
Singapore
\nGrowth markets
\nand other
\nTotal
\nsegment
\nClaims incurred, net of reinsurance
(1,687)
(1,184)
(1,015)
(3,037)
(1,590)
(8,513)
\n(Increase)/decrease in policyholder liabilities, net of
\nreinsurance
(6,088)
167
(260)
(2,856)
(1,159)
(10,196)
\nMovement in unallocated surplus of with-pro\ufb01ts funds
(250)
\u2013
48
\u2013
\u2013
(202)
\nBene\ufb01ts and claims and movement in unallocated surplus,
\nnet of reinsurance
(8,025)
(1,017)
(1,227)
(5,893)
(2,749)
(18,911)
\nHong Kong Risk-Based Capital Regime
\nIn April 2022, the Group\u2019s Hong Kong life business (PHKL) received approval from the Hong Kong Insurance Authority to early adopt the Hong
\nKong Risk-Based Capital (HK RBC) regime with e\ufb00ect from 1 January 2022. In light of this development and, given that the measurement
\ntechnique set out within the local regulatory basis has been applied by PHKL to calculate IFRS liabilities, the Group has re\ufb01ned the reserving
\nmethodology of PHKL by reference to the method applied under the new HK RBC regime.
\nUnder the basis previously applied, liabilities of non-participating business were generally determined on a net premium valuation basis to
\ndetermine the future policyholder bene\ufb01t provisions, subject to minimum \ufb02oors. Using the principles underpinning the HK RBC regime, the IFRS
\nreserving basis has been re\ufb01ned to one that is based on a gross premium valuation basis (including an allowance for the uncertainty of non-
\nhedgeable risks), subject to minimum \ufb02oors. Depending on the product, the minimum \ufb02oor is set at the policyholder\u2019s asset share or guaranteed
\ncash surrender value or at a constraint that on day one no negative reserve exists at a product level. This new measurement technique better
\nestimates the liability and brings the estimation basis for PHKL more in line with that used by the Group\u2019s other insurance operations. This change
\nof estimate has reduced policyholder liabilities (net of reinsurance) and increased pro\ufb01t before tax for 2022 by $945 million.
\nThere has been no change to the reserving basis for with-pro\ufb01ts liabilities, which under the Group\u2019s accounting policy are valued under the
\nrealistic basis in accordance with the requirements of the \u2018grandfathered\u2019 UK standard FRS 27 \u2018Life Assurance\u2019.
\nC3.3
Reinsurers\u2019 share of insurance contract liabilities
\nThe measurement of reinsurance assets is consistent with the measurement of the underlying direct insurance contracts. The treatment of any
\ngains or losses arising on the purchase of reinsurance contracts is dependent on the underlying accounting basis of the entity concerned.
\n31 Dec 2022
\n$m
\n31 Dec 2021
\n$m
\nInsurance contract liabilities
2,592
9,550
\nClaims outstanding
215
203
\nTotal operations
2,807
9,753
\nThe Group cedes certain business to other insurance companies. Although the ceding of insurance does not relieve the Group from its liability to its
\npolicyholders, the Group participates in such agreements largely for the purpose of managing its loss exposure. The Group evaluates the \ufb01nancial
\ncondition of its reinsurers and monitors concentration of credit risk from similar geographic regions, activities or economic characteristics of the
\nreinsurers to minimise its exposure from reinsurer insolvencies.
\nOf the reinsurers\u2019 share of insurance contract liabilities balance of $2,807 million at 31 December 2022 (31 December 2021: $9,753 million),
\n98 per cent (31 December 2021: 99 per cent) was from reinsurers with rating A- and above by Standard & Poor\u2019s or other external rating agencies.
\nThe reinsurers\u2019 share of insurance contract liabilities primarily relates to protection business written in Hong Kong. The year-on-year movement
\nin the reinsurers\u2019 share of insurance contract liabilities included the impact from the early adoption of the Hong Kong Risk-Based Capital Regime
\nas discussed above in note C3.2. The Group\u2019s Hong Kong business cedes insurance risk to limit exposure to underwriting losses under various
\nagreements that cover individual risks, group risks or de\ufb01ned blocks of business, on a co-insurance, surplus, quota share, or catastrophe excess of
\nloss basis. The amount of each risk retained depends on the evaluation of the speci\ufb01c risk, subject to certain circumstances, to maximum limits
\nbased on characteristics of coverage.
\nNet commissions received during 2022 on ceded business totalled $216 million (2021: $285 million) and claims incurred ceded to external
\nreinsurers totalled $766 million (2021: $604 million). There was $1 million (2021: $3 million) of deferred gains in the year.
\n325
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\nGroup overview
Strategic report
Governance
Directors\u2019 remuneration report
European Embedded Value (EEV) basis results
Additional information
Financial statements
C Financial position
/ continued
\nC3 Policyholder liabilities and unallocated surplus
continued
\nC3.4
Products and determining contract liabilities
\nIFRS 4 requires contracts written by insurers to be classi\ufb01ed as either \u2018insurance\u2019 contracts or \u2018investment\u2019 contracts. The classi\ufb01cation of the
\ncontract determines its accounting.
\nContracts that transfer signi\ufb01cant insurance risk to the Group are classi\ufb01ed as insurance contracts. This judgement is applied in considering
\nwhether the material features of a contract gives rise to the transfer of signi\ufb01cant insurance risk, which is made at the point of contract inception
\nand not revisited. For the majority of the Group\u2019s contracts, classi\ufb01cation is based on a readily identi\ufb01able scenario that demonstrates a signi\ufb01cant
\ndi\ufb00erence in cash \ufb02ows if the covered event occurs (as opposed to does not occur) reducing the level of judgement involved.
\nContracts that transfer \ufb01nancial risk to the Group but not signi\ufb01cant insurance risk are classi\ufb01ed as investment contracts. Insurance contracts
\nand investment contracts with discretionary participation features are accounted for under IFRS 4. Investment contracts without such
\ndiscretionary participation features are accounted for as \ufb01nancial instruments under IAS 39.
\nInvestment contracts without discretionary participation features are measured in accordance with IAS 39 to re\ufb02ect the deposit nature of the
\narrangement, with premiums and claims re\ufb02ected as deposits and withdrawals, and taken directly to the statement of \ufb01nancial position as
\nmovements in the \ufb01nancial liability balance.
\nInvestment contracts without \ufb01xed and guaranteed terms are classi\ufb01ed as \ufb01nancial instruments and designated as FVTPL because the
\nresulting liabilities are managed and their performance is evaluated on a fair value basis. Where the contract includes a surrender option, its
\ncarrying value is subject to a minimum carrying value equal to its surrender value.
\nOther investment contracts are measured at amortised cost.
\nThe table below provides description of material feature of each of the products listed above, together with how their contract liabilities are
\ndetermined.
\nContract type
Description and material features
Determination of liabilities
\nWith-pro\ufb01ts and
\nparticipating
\ncontracts
\nProvides savings and/or protection where the
\nbasic sum assured can be enhanced by a pro\ufb01t
\nshare (or bonus) from the underlying fund as
\ndetermined at the discretion of the business
\nunit.
\nParticipating products often o\ufb00er a
\nguaranteed maturity or surrender value.
\nDeclared regular bonuses are guaranteed once
\nvested. Future bonus rates and cash dividends
\nare not guaranteed. Market value adjustments
\nand surrender penalties are used for certain
\nproducts where the law permits such
\nadjustments. Guarantees are predominantly
\nsupported by the segregated funds and their
\nestates.
\nAs explained in note A3.1, with-pro\ufb01ts contracts are predominantly sold
\nin Hong Kong, Malaysia and Singapore. The total value of the
\nwith-pro\ufb01ts funds is driven by the underlying asset valuation with
\nmovements re\ufb02ected principally in the accounting value of
\npolicyholder liabilities and unallocated surplus.
\nIn Hong Kong, the unallocated surplus includes the shareholders\u2019 share
\nof expected future bonuses, with the expected policyholder share
\nbeing included in policyholder liabilities. Any excess of assets over
\nliabilities and amounts expected to be paid out by the fund on future
\nbonuses is also included in the unallocated surplus.
\nUnit-linked
Combines savings with protection, the cash
\nvalue of the policy primarily depends on the
\nvalue of the underlying unitised funds.
\nThe attaching liabilities largely re\ufb02ect the unit value obligation driven
\nby the value of the investments of the unit fund. Additional contract
\nliabilities are held for guaranteed bene\ufb01ts beyond the unit fund value,
\ngenerally using a gross premium valuation method, as discussed below
\nfor health and protection business. These additional provisions are
\nrecognised as a component of other business liabilities.
\n326
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Contract type
Description and material features
Determination of liabilities
\nHealth and
\nprotection
\nHealth and protection features are o\ufb00ered as
\nsupplements to the products listed above or
\nsold as standalone products. Protection covers
\nmortality and/or morbidity bene\ufb01ts including
\nhealth, disability, critical illness and accident
\ncoverage.
\nThe approach to determine the contract liabilities is generally driven by
\nthe local solvency basis. The discount rates used to determine the
\ncontract liabilities are derived in line with the measurement basis
\napplied in each business unit and are generally based on the risk-free
\nrates applicable to the underlying contracts, including appropriate
\nmargins.
\nA gross premium valuation (GPV) method is typically used in those
\nlocal businesses where a risk-based capital framework is adopted for
\nlocal solvency. Under the GPV method, all cash \ufb02ows are valued
\nexplicitly using best estimate assumptions with a suitable margin for
\nprudence.
\nThis is achieved either through adding an explicit allowance above best
\nestimate to the assumptions, or by applying an overlay constraint such
\nthat on day one no negative reserves (ie where future premium in\ufb02ows
\nare expected to exceed future claims and out\ufb02ows) are derived at an
\nindividual policyholder level, or at a product/fund level, or a
\ncombination of both. The margin for prudence is released to pro\ufb01t over
\nthe life of the contract. Best estimate assumptions are reviewed
\nannually with reference to experience and expectations around the
\nshort-term nature of any change (for example increases or decreases in
\nclaims levels as a result of Covid-19). Any changes made to best
\nestimate impact the prudence mechanisms described above and, as a
\nconsequence, IFRS pro\ufb01t tends to be relatively insensitive to
\nassumption changes made in any given year.
\nPrior to the adoption of the new HK RBC regime in 2022, the Hong
\nKong business unit applied a net premium valuation method (NPV) to
\ndetermine the future policyholder bene\ufb01t provisions, subject to
\nminimum \ufb02oors at the policyholder\u2019s asset share or guaranteed cash
\nsurrender value as appropriate. Upon the adoption of the HK RBC
\nregime, the gross premium valuation method (including an allowance
\nfor the uncertainty of non-hedgeable risks), subject to minimum \ufb02oors
\nis applied.
\nFor India and Taiwan, US GAAP is applied for measuring insurance
\nliabilities. For these businesses, the future policyholder bene\ufb01t
\nprovisions for non-linked business are determined using the net level
\npremium method, with an allowance for surrenders, maintenance and
\nclaims expenses.
\nIn Vietnam, an estimation basis to determine the contract liabilities is
\naligned substantially to that used by the business units applying the
\nGPV method.
\nNon-participating
\nterm contracts,
\nwhole life and
\nendowment
\nassurance
\nNon-participating savings and/or protection
\nwhere the bene\ufb01ts are guaranteed, determined
\nby a set of de\ufb01ned market-related parameters,
\nor determined at the discretion of the business
\nunit. These products often o\ufb00er a guaranteed
\nmaturity and/or surrender value. It is common
\nfor regulations or market-driven demand and
\ncompetition to provide some form of capital
\nvalue protection and minimum crediting
\ninterest rate guarantees. This is re\ufb02ected within
\nthe guaranteed maturity and surrender values.
\nGuarantees are supported by shareholders.
\nThe approach to determining the contract liabilities is generally driven
\nby the local solvency basis, as discussed for health and protection
\nbusiness above.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfInsuranceContractsExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f40097": {
"value": "C3.2 Reconciliation of gross and reinsurers\u2019 share of policyholder liabilities and unallocated surplus
\nClaims paid include maturities, annuities, surrenders, deaths and other claim events. Maturity claims are recorded as charges on the policy
\nmaturity date. Annuity claims are recorded when each annuity instalment becomes due for payment. Surrenders are charged to the income
\nstatement when paid. Death and other claims are generally recorded when noti\ufb01ed with additional contract liabilities held, where appropriate, for
\n\u2018incurred but not reported\u2019 (IBNR) claims.
\nFurther analysis of the movement in the year of the Group\u2019s gross contract liabilities, reinsurers\u2019 share of insurance contract liabilities and
\nunallocated surplus of with-pro\ufb01ts funds (excluding those held by joint ventures and associates) is provided below:
\nGross
\ninsurance
\ncontract
\nliabilities
\n$m
\nReinsurers\u2019
\nshare of
\ninsurance
\ncontract
\nliabilities
\n$m
\nInvestment
\ncontract
\nliabilities
\n$m
\nUnallocated
\nsurplus of
\nwith-pro\ufb01ts
\nfunds
\n$m
\nAt 1 Jan 2021
(436,787)
46,595
(4,459)
(5,217)
\nRemoval of discontinued US operations
\nnote (i)
\n293,325
(35,232)
3,188
\u2013
\nIncome (expense) included in the income statement
\nnotes (i)(iii)
\n(9,082)
(1,552)
189
(202)
\nOther movements
\nnote (ii)
\n\u2013
\u2013
(75)
\u2013
\nForeign exchange translation di\ufb00erences
1,789
(58)
(3)
35
\nBalance at 31 Dec 2021/1 Jan 2022
(150,755)
9,753
(1,160)
(5,384)
\nIncome (expense) included in the income statement
\nnotes (i)(iii)
\n27,252
(6,908)
88
1,868
\nOther movements
\nnote (ii)
\n\u2013
\u2013
(26)
\u2013
\nForeign exchange translation di\ufb00erences
2,290
(38)
48
21
\nAt 31 Dec 2022
(121,213)
2,807
(1,050)
(3,495)
\nNotes
\n(i)
The total charge for bene\ufb01ts and claims shown in the income statement comprises the amounts shown as \u2018Income (expense) included in the income statement\u2019 in the table above together with
\nclaims paid of $(9,343) million in the year (2021: $(8,845) million) and claim amounts attributable to reinsurers of $740 million (2021: $581 million). Claims incurred, net of reinsurance, shown
\nin the segment analysis of bene\ufb01ts and claims items below include claims paid and movement in claims outstanding payables, net of reinsurance, in the year.
\n(ii)
Other movements include premiums received and claims paid on investment contracts without discretionary participating features, which are taken directly to the statement of \ufb01nancial position
\nin accordance with IAS 39.
\n(iii)
The 2021 movement in the gross contract liabilities included $160 million for the impact of a change to allow for illiquidity premium in the calculation of the valuation interest rate (VIR) used to
\nvalue long-term insurance liabilities in Thailand. The 2022 movement in the gross contract liabilities and reinsurers\u2019 share of insurance contract liabilities included the impact from the early
\nadoption of the Hong Kong Risk-Based Capital Regime as discussed below.
\n324
Prudential plc
Annual Report 2022
prudentialplc.com
The segmental analysis of the total charge for bene\ufb01t and claims and movement in unallocated surplus, net of reinsurance in the income
\nstatement is shown below. The CPL segment is a joint venture accounted for using the equity method under IFRS, with the Group\u2019s share of its
\nresults net of related tax presented in a single line within the Group\u2019s pro\ufb01t before tax, and therefore not shown in the analysis of bene\ufb01t and
\nclaims items below.
\n2022
$m
\nHong
\nKong
Indonesia
Malaysia
Singapore
\nGrowth markets
\nand other
\nTotal
\nsegment
\nClaims incurred, net of reinsurance
(2,033)
(1,228)
(1,070)
(2,718)
(1,768)
(8,817)
\nDecrease in policyholder liabilities, net of reinsurance
15,643
270
(135)
3,189
1,679
20,646
\nMovement in unallocated surplus of with-pro\ufb01ts funds
1,815
\u2013
53
\u2013
\u2013
1,868
\nBene\ufb01ts and claims and movement in unallocated surplus,
\nnet of reinsurance
15,425
(958)
(1,152)
471
(89)
13,697
\n2021
$m
\nHong
\nKong
Indonesia
Malaysia
Singapore
\nGrowth markets
\nand other
\nTotal
\nsegment
\nClaims incurred, net of reinsurance
(1,687)
(1,184)
(1,015)
(3,037)
(1,590)
(8,513)
\n(Increase)/decrease in policyholder liabilities, net of
\nreinsurance
(6,088)
167
(260)
(2,856)
(1,159)
(10,196)
\nMovement in unallocated surplus of with-pro\ufb01ts funds
(250)
\u2013
48
\u2013
\u2013
(202)
\nBene\ufb01ts and claims and movement in unallocated surplus,
\nnet of reinsurance
(8,025)
(1,017)
(1,227)
(5,893)
(2,749)
(18,911)
\nHong Kong Risk-Based Capital Regime
\nIn April 2022, the Group\u2019s Hong Kong life business (PHKL) received approval from the Hong Kong Insurance Authority to early adopt the Hong
\nKong Risk-Based Capital (HK RBC) regime with e\ufb00ect from 1 January 2022. In light of this development and, given that the measurement
\ntechnique set out within the local regulatory basis has been applied by PHKL to calculate IFRS liabilities, the Group has re\ufb01ned the reserving
\nmethodology of PHKL by reference to the method applied under the new HK RBC regime.
\nUnder the basis previously applied, liabilities of non-participating business were generally determined on a net premium valuation basis to
\ndetermine the future policyholder bene\ufb01t provisions, subject to minimum \ufb02oors. Using the principles underpinning the HK RBC regime, the IFRS
\nreserving basis has been re\ufb01ned to one that is based on a gross premium valuation basis (including an allowance for the uncertainty of non-
\nhedgeable risks), subject to minimum \ufb02oors. Depending on the product, the minimum \ufb02oor is set at the policyholder\u2019s asset share or guaranteed
\ncash surrender value or at a constraint that on day one no negative reserve exists at a product level. This new measurement technique better
\nestimates the liability and brings the estimation basis for PHKL more in line with that used by the Group\u2019s other insurance operations. This change
\nof estimate has reduced policyholder liabilities (net of reinsurance) and increased pro\ufb01t before tax for 2022 by $945 million.
\nThere has been no change to the reserving basis for with-pro\ufb01ts liabilities, which under the Group\u2019s accounting policy are valued under the
\nrealistic basis in accordance with the requirements of the \u2018grandfathered\u2019 UK standard FRS 27 \u2018Life Assurance\u2019.
\nC3.3
Reinsurers\u2019 share of insurance contract liabilities
\nThe measurement of reinsurance assets is consistent with the measurement of the underlying direct insurance contracts. The treatment of any
\ngains or losses arising on the purchase of reinsurance contracts is dependent on the underlying accounting basis of the entity concerned.
\n31 Dec 2022
\n$m
\n31 Dec 2021
\n$m
\nInsurance contract liabilities
2,592
9,550
\nClaims outstanding
215
203
\nTotal operations
2,807
9,753
\nThe Group cedes certain business to other insurance companies. Although the ceding of insurance does not relieve the Group from its liability to its
\npolicyholders, the Group participates in such agreements largely for the purpose of managing its loss exposure. The Group evaluates the \ufb01nancial
\ncondition of its reinsurers and monitors concentration of credit risk from similar geographic regions, activities or economic characteristics of the
\nreinsurers to minimise its exposure from reinsurer insolvencies.
\nOf the reinsurers\u2019 share of insurance contract liabilities balance of $2,807 million at 31 December 2022 (31 December 2021: $9,753 million),
\n98 per cent (31 December 2021: 99 per cent) was from reinsurers with rating A- and above by Standard & Poor\u2019s or other external rating agencies.
\nThe reinsurers\u2019 share of insurance contract liabilities primarily relates to protection business written in Hong Kong. The year-on-year movement
\nin the reinsurers\u2019 share of insurance contract liabilities included the impact from the early adoption of the Hong Kong Risk-Based Capital Regime
\nas discussed above in note C3.2. The Group\u2019s Hong Kong business cedes insurance risk to limit exposure to underwriting losses under various
\nagreements that cover individual risks, group risks or de\ufb01ned blocks of business, on a co-insurance, surplus, quota share, or catastrophe excess of
\nloss basis. The amount of each risk retained depends on the evaluation of the speci\ufb01c risk, subject to certain circumstances, to maximum limits
\nbased on characteristics of coverage.
\nNet commissions received during 2022 on ceded business totalled $216 million (2021: $285 million) and claims incurred ceded to external
\nreinsurers totalled $766 million (2021: $604 million). There was $1 million (2021: $3 million) of deferred gains in the year.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfReinsuranceExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f40217": {
"value": "2022
$m
\nHong
\nKong
Indonesia
Malaysia
Singapore
\nGrowth markets
\nand other
\nTotal
\nsegment
\nClaims incurred, net of reinsurance
(2,033)
(1,228)
(1,070)
(2,718)
(1,768)
(8,817)
\nDecrease in policyholder liabilities, net of reinsurance
15,643
270
(135)
3,189
1,679
20,646
\nMovement in unallocated surplus of with-pro\ufb01ts funds
1,815
\u2013
53
\u2013
\u2013
1,868
\nBene\ufb01ts and claims and movement in unallocated surplus,
\nnet of reinsurance
15,425
(958)
(1,152)
471
(89)
13,697
\n2021
$m
\nHong
\nKong
Indonesia
Malaysia
Singapore
\nGrowth markets
\nand other
\nTotal
\nsegment
\nClaims incurred, net of reinsurance
(1,687)
(1,184)
(1,015)
(3,037)
(1,590)
(8,513)
\n(Increase)/decrease in policyholder liabilities, net of
\nreinsurance
(6,088)
167
(260)
(2,856)
(1,159)
(10,196)
\nMovement in unallocated surplus of with-pro\ufb01ts funds
(250)
\u2013
48
\u2013
\u2013
(202)
\nBene\ufb01ts and claims and movement in unallocated surplus,
\nnet of reinsurance
(8,025)
(1,017)
(1,227)
(5,893)
(2,749)
(18,911)
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfClaimsAndBenefitsPaidExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f40300": {
"value": "Hong Kong Risk-Based Capital Regime In April 2022, the Group\u2019s Hong Kong life business (PHKL) received approval from the Hong Kong Insurance Authority to early adopt the Hong
\nKong Risk-Based Capital (HK RBC) regime with e\ufb00ect from 1 January 2022. In light of this development and, given that the measurement
\ntechnique set out within the local regulatory basis has been applied by PHKL to calculate IFRS liabilities, the Group has re\ufb01ned the reserving
\nmethodology of PHKL by reference to the method applied under the new HK RBC regime.
\nUnder the basis previously applied, liabilities of non-participating business were generally determined on a net premium valuation basis to
\ndetermine the future policyholder bene\ufb01t provisions, subject to minimum \ufb02oors. Using the principles underpinning the HK RBC regime, the IFRS
\nreserving basis has been re\ufb01ned to one that is based on a gross premium valuation basis (including an allowance for the uncertainty of non-
\nhedgeable risks), subject to minimum \ufb02oors. Depending on the product, the minimum \ufb02oor is set at the policyholder\u2019s asset share or guaranteed
\ncash surrender value or at a constraint that on day one no negative reserve exists at a product level. This new measurement technique better
\nestimates the liability and brings the estimation basis for PHKL more in line with that used by the Group\u2019s other insurance operations. This change
\nof estimate has reduced policyholder liabilities (net of reinsurance) and increased pro\ufb01t before tax for 2022 by $945 million.
\nThere has been no change to the reserving basis for with-pro\ufb01ts liabilities, which under the Group\u2019s accounting policy are valued under the
\nrealistic basis in accordance with the requirements of the \u2018grandfathered\u2019 UK standard FRS 27 \u2018Life Assurance\u2019.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfChangesInAccountingPoliciesAccountingEstimatesAndErrorsExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f40319": {
"value": "The measurement of reinsurance assets is consistent with the measurement of the underlying direct insurance contracts. The treatment of any gains or losses arising on the purchase of reinsurance contracts is dependent on the underlying accounting basis of the entity concerned.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForReinsuranceExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f40545": {
"value": "C4 Intangible assets C4.1
Goodwill
\nBusiness combination
\nBusiness acquisitions are accounted for by applying the purchase method of accounting, which adjusts the net assets of the acquired company to
\nfair value at the date of purchase. The excess of the acquisition consideration over the fair value of the assets and liabilities of the acquired
\nbusiness is recorded as goodwill. The Group chooses the full goodwill method or the partial goodwill method to calculate goodwill on an acquisition
\nby acquisition basis. Expenses related to acquiring new subsidiaries are charged to the income statement in the period in which they are incurred
\nand not included in goodwill. Income and expenses of acquired businesses are included in the income statement from the date of acquisition.
\nWhere the Group writes a put option, which if exercised triggers the purchase of non-controlling interests as part of its business acquisition, the
\nput option is recognised as a \ufb01nancial liability at the acquisition date. Where risks and rewards remain with the non-controlling interests, a
\ncorresponding amount is deducted from equity. Any subsequent changes to the carrying amount of the put option liability are also recognised
\nwithin equity.
\nGoodwill
\nGoodwill is capitalised and carried on the Group consolidated statement of \ufb01nancial position as an intangible asset at initial value less any
\naccumulated impairment losses. Goodwill impairment testing is conducted annually and when there is an indication of impairment.
\nGoodwill shown on the consolidated statement of \ufb01nancial position at 31 December 2022 represents amounts allocated to business units in
\nrespect of both acquired asset management and life businesses. There has been no impairment as at 31 December 2022 and 2021.
\n2022
$m
2021
$m
\nCarrying value at 1 Jan
907
961
\nExchange di\ufb00erences
(17)
(54)
\nCarrying value at 31 Dec
890
907
\nImpairment testing
\nGoodwill does not generate cash \ufb02ows independently of other groups of assets and thus is assigned to cash-generating units for the purposes of
\nimpairment testing. These cash-generating units (CGUs) are based upon how management monitors the business and represent the lowest level
\nto which goodwill can be allocated on a reasonable basis. Of the carrying value at 31 December 2022, $445 million (31 December 2021:
\n$465 million) relates to asset management business in Thailand and $234 million (31 December 2021: $233 million) relates to the acquisition of
\nUOB Life in Singapore. Other goodwill amounts are allocated across CGUs, which are not individually material.
\nGoodwill is tested for impairment by comparing the CGU\u2019s carrying amount, including any goodwill, with its recoverable amount. The Group\u2019s
\nmethodology of assessing whether goodwill may be impaired for acquired life and asset management operations is discussed below.
\nFor acquired life businesses, the Group routinely compares the aggregate of net asset value and acquired goodwill on an IFRS basis of the
\nacquired life business with the value of the current in-force business as determined using the EEV methodology. Any excess of IFRS value over EEV
\ncarrying value is then compared with EEV basis value of current and projected future new business to determine whether there is any indication
\nthat the goodwill in the IFRS statement of \ufb01nancial position may be impaired. The methodology and assumptions underpinning the Group\u2019s EEV
\nbasis of reporting are included in the EEV basis supplementary information in this Annual Report.
\nThe goodwill in respect of asset management businesses comprises mainly the goodwill arising from the acquisition of Thanachart Fund
\nManagement Co., Ltd in 2019 and TMB Asset Management Co., Ltd in Thailand in 2018. The goodwill impairment testing for these businesses is
\nprepared as a single CGU re\ufb02ecting that these businesses are managed together. The recoverable amount of these businesses has been
\ndetermined by calculating the value in use of combined business calculated using a discounted cash \ufb02ow valuation.
\nFor the combined Thailand asset management business, the valuation is based on a number of key assumptions as follows:
\n>
Cash \ufb02ow projections based on the latest \ufb01ve-year business plan/forecast;
\n>
A constant growth rate of 3.5 per cent (2021: 2.3 per cent) on forecast cash \ufb02ows beyond the terminal year of the cash \ufb02ow projection period;
\n>
The risk discount rate applied in accordance with the nature of the businesses. The pre-tax discount rate applied is 9.0 per cent (2021:
\n9.0 per cent); and
\n>
The continuation of asset management contracts on similar terms.
\nThe key assumptions used in the impairment testing, including the cash \ufb02ow projections, are subject to \ufb02uctuations in the external market and
\neconomic conditions. The recent adverse conditions had contributed to reduced cash \ufb02ow projections leading to a fall in the headroom in
\ncomparison to the prior year. While management believes that any reasonable change in each of the key assumptions would not cause the
\nrecoverable amount of the asset management businesses acquired to fall below its carrying amount, a more signi\ufb01cant adverse change in the key
\nassumptions applied concurrently could lead to impairment charges.
\n328
Prudential plc
Annual Report 2022
prudentialplc.com
C4.2
Deferred acquisition costs and other intangible assets
\nIntangible assets acquired on the purchase of a subsidiary or portfolio of contracts are measured at fair value on acquisition. DAC are accounted
\nfor as described in note A3.1(c). Other intangible assets, such as distribution rights and software, are valued initially at the price paid to acquire or
\ncost to develop them and are subsequently carried at cost less amortisation and any accumulated impairment losses. For intangibles other than
\nDAC, amortisation follows the pattern in which the future economic bene\ufb01ts are expected to be consumed. If the pattern cannot be determined
\nreliably, a straight-line method is applied. For software, the amortisation generally represents the licence period of the software acquired.
\nAmortisation of intangible assets is charged to the \u2018acquisition costs and other expenditure\u2019 line in the Consolidated income statement.
\nImpairment testing is conducted when there is an indication of impairment.
\n31 Dec 2022
\n$m
\n31 Dec 2021
\n$m
\nShareholder-backed business:
\nDAC related to insurance contracts as classi\ufb01ed under IFRS 4
3,215
2,776
\nDAC related to investment management contracts, including life assurance contracts classi\ufb01ed as \ufb01nancial instruments
\nand\u00a0investment management contracts under IFRS 4
39
39
\nDAC related to insurance and investment contracts
3,254
2,815
\nDistribution rights
3,630
3,782
\nPresent value of acquired in-force policies for insurance contracts as classi\ufb01ed under IFRS 4
17
28
\nOther intangibles
209
184
\nPresent value of acquired in-force and other intangibles
3,856
3,994
\nTotal of DAC and other intangible assets attributable to shareholders
7,110
6,809
\nOther intangible assets, including computer software, attributable to with-pro\ufb01ts funds
45
49
\nTotal of deferred acquisition costs and other intangible assets
7,155
6,858
\n(a) Movement in DAC and other intangible assets attributable to shareholders
\n2022
$m
2021
$m
\nDAC
\nDistribution
\nrights
\nnote (i)
\nPVIF and other
\nintangibles
\nnotes (ii)(iii)
\nTotal
Total
\nBalance at 1 Jan
2,815
3,782
212
6,809
20,275
\nRemoval of discontinued US operations
\u2013
\u2013
\u2013
\u2013
(13,881)
\nAdditions
1,002
206
76
1,284
1,185
\nAmortisation to the income statement
(475)
(301)
(50)
(826)
(651)
\nDisposals and transfers
\u2013
\u2013
(5)
(5)
(7)
\nExchange di\ufb00erences and other movements
(88)
(57)
(7)
(152)
(112)
\nBalance at 31 Dec
3,254
3,630
226
7,110
6,809
\nNotes
\n(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
\nfor the bank distribution of Prudential\u2019s insurance products for a \ufb01xed period of time. The distribution rights amounts are amortised on a basis to re\ufb02ect the pattern in which the future economic
\nbene\ufb01ts are expected to be consumed by reference to new business production levels.
\n(ii)
All of the net PVIF balances relate to insurance contracts. The PVIF attaching to investment contracts have been fully amortised.
\n(iii)
Other intangibles comprise other intangible assets such as software rights. Software rights include additions of $58 million, amortisation of $(24) million, disposals of $(3) million, foreign
\nexchange of $(7) million and closing balance at 31 December 2022 of $138 million (31 December 2021: $114 million).
\n(b) Movement in DAC related to insurance and investment contracts
\n2022
$m
2021
$m
\nInsurance
\ncontracts
\nInvestment
\ncontracts
\nnote
\nInsurance
\ncontracts
\nInvestment
\ncontracts
\nnote
\nBalance at 1 Jan
2,776
39
16,182
34
\nRemoval of discontinued US operations
\u2013
\u2013
(13,863)
\u2013
\nAdditions
993
9
841
7
\nAmortisation
(470)
(5)
(339)
(4)
\nExchange di\ufb00erences and other movements
(84)
(4)
(45)
2
\nBalance at 31 Dec
3,215
39
2,776
39
\nNote
\nThe carrying amount of the DAC balance relating to investment contracts comprises the following gross and accumulated amortisation amounts:
\n31 Dec 2022
\n$m
\n31 Dec 2021
\n$m
\nGross amount
59
55
\nAccumulated amortisation
(20)
(16)
\nCarrying amount
39
39
\n329
Prudential plc
Annual Report 2022
\nGroup overview
Strategic report
Governance
Directors\u2019 remuneration report
European Embedded Value (EEV) basis results
Additional information
Financial statements
C Financial position
/ continued
\nC4 Intangible assets
continued
\nC4.2
Deferred acquisition costs and other intangible assets
continued
\n(c) Movement in PVIF and other intangibles attributable to shareholders
\n2022
$m
2021
$m
\nPVIF
\nDistribution
\nrights
\nOther
\nintangibles
\n(including
\nsoftware)
Total
PVIF
\nDistribution
\nrights
\nOther
\nintangibles
\n(including
\nsoftware)
Total
\nBalance at 1 Jan
\nCost
140
5,037
313
5,490
177
4,845
424
5,446
\nAccumulated amortisation
(112)
(1,255)
(129)
(1,496)
(143)
(994)
(250)
(1,387)
\n28
3,782
184
3,994
34
3,851
174
4,059
\nRemoval of discontinued US operations
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(18)
(18)
\nAdditions
\u2013
206
76
282
\u2013
260
77
337
\nAmortisation charge
(10)
(301)
(40)
(351)
(5)
(268)
(35)
(308)
\nDisposals and transfers
\u2013
\u2013
(5)
(5)
\u2013
\u2013
(7)
(7)
\nExchange di\ufb00erences and other
\nmovements
(1)
(57)
(6)
(64)
(1)
(61)
(7)
(69)
\nBalance at 31 Dec
17
3,630
209
3,856
28
3,782
184
3,994
\nComprising:
\nCost
134
5,176
373
5,683
140
5,037
313
5,490
\nAccumulated amortisation
(117)
(1,546)
(164)
(1,827)
(112)
(1,255)
(129)
(1,496)
\n17
3,630
209
3,856
28
3,782
184
3,994",
"dimensions": {
"concept": "ifrs-full:DisclosureOfIntangibleAssetsAndGoodwillExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f40548": {
"value": "C4.1 Goodwill
\nBusiness combination
\nBusiness acquisitions are accounted for by applying the purchase method of accounting, which adjusts the net assets of the acquired company to
\nfair value at the date of purchase. The excess of the acquisition consideration over the fair value of the assets and liabilities of the acquired
\nbusiness is recorded as goodwill. The Group chooses the full goodwill method or the partial goodwill method to calculate goodwill on an acquisition
\nby acquisition basis. Expenses related to acquiring new subsidiaries are charged to the income statement in the period in which they are incurred
\nand not included in goodwill. Income and expenses of acquired businesses are included in the income statement from the date of acquisition.
\nWhere the Group writes a put option, which if exercised triggers the purchase of non-controlling interests as part of its business acquisition, the
\nput option is recognised as a \ufb01nancial liability at the acquisition date. Where risks and rewards remain with the non-controlling interests, a
\ncorresponding amount is deducted from equity. Any subsequent changes to the carrying amount of the put option liability are also recognised
\nwithin equity.
\nGoodwill
\nGoodwill is capitalised and carried on the Group consolidated statement of \ufb01nancial position as an intangible asset at initial value less any
\naccumulated impairment losses. Goodwill impairment testing is conducted annually and when there is an indication of impairment.
\nGoodwill shown on the consolidated statement of \ufb01nancial position at 31 December 2022 represents amounts allocated to business units in
\nrespect of both acquired asset management and life businesses. There has been no impairment as at 31 December 2022 and 2021.
\n2022
$m
2021
$m
\nCarrying value at 1 Jan
907
961
\nExchange di\ufb00erences
(17)
(54)
\nCarrying value at 31 Dec
890
907
\nImpairment testing
\nGoodwill does not generate cash \ufb02ows independently of other groups of assets and thus is assigned to cash-generating units for the purposes of
\nimpairment testing. These cash-generating units (CGUs) are based upon how management monitors the business and represent the lowest level
\nto which goodwill can be allocated on a reasonable basis. Of the carrying value at 31 December 2022, $445 million (31 December 2021:
\n$465 million) relates to asset management business in Thailand and $234 million (31 December 2021: $233 million) relates to the acquisition of
\nUOB Life in Singapore. Other goodwill amounts are allocated across CGUs, which are not individually material.
\nGoodwill is tested for impairment by comparing the CGU\u2019s carrying amount, including any goodwill, with its recoverable amount. The Group\u2019s
\nmethodology of assessing whether goodwill may be impaired for acquired life and asset management operations is discussed below.
\nFor acquired life businesses, the Group routinely compares the aggregate of net asset value and acquired goodwill on an IFRS basis of the
\nacquired life business with the value of the current in-force business as determined using the EEV methodology. Any excess of IFRS value over EEV
\ncarrying value is then compared with EEV basis value of current and projected future new business to determine whether there is any indication
\nthat the goodwill in the IFRS statement of \ufb01nancial position may be impaired. The methodology and assumptions underpinning the Group\u2019s EEV
\nbasis of reporting are included in the EEV basis supplementary information in this Annual Report.
\nThe goodwill in respect of asset management businesses comprises mainly the goodwill arising from the acquisition of Thanachart Fund
\nManagement Co., Ltd in 2019 and TMB Asset Management Co., Ltd in Thailand in 2018. The goodwill impairment testing for these businesses is
\nprepared as a single CGU re\ufb02ecting that these businesses are managed together. The recoverable amount of these businesses has been
\ndetermined by calculating the value in use of combined business calculated using a discounted cash \ufb02ow valuation.
\nFor the combined Thailand asset management business, the valuation is based on a number of key assumptions as follows:
\n>
Cash \ufb02ow projections based on the latest \ufb01ve-year business plan/forecast;
\n>
A constant growth rate of 3.5 per cent (2021: 2.3 per cent) on forecast cash \ufb02ows beyond the terminal year of the cash \ufb02ow projection period;
\n>
The risk discount rate applied in accordance with the nature of the businesses. The pre-tax discount rate applied is 9.0 per cent (2021:
\n9.0 per cent); and
\n>
The continuation of asset management contracts on similar terms.
\nThe key assumptions used in the impairment testing, including the cash \ufb02ow projections, are subject to \ufb02uctuations in the external market and
\neconomic conditions. The recent adverse conditions had contributed to reduced cash \ufb02ow projections leading to a fall in the headroom in
\ncomparison to the prior year. While management believes that any reasonable change in each of the key assumptions would not cause the
\nrecoverable amount of the asset management businesses acquired to fall below its carrying amount, a more signi\ufb01cant adverse change in the key
\nassumptions applied concurrently could lead to impairment charges.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfGoodwillExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f40553": {
"value": "Business combination Business acquisitions are accounted for by applying the purchase method of accounting, which adjusts the net assets of the acquired company to
\nfair value at the date of purchase. The excess of the acquisition consideration over the fair value of the assets and liabilities of the acquired
\nbusiness is recorded as goodwill. The Group chooses the full goodwill method or the partial goodwill method to calculate goodwill on an acquisition
\nby acquisition basis. Expenses related to acquiring new subsidiaries are charged to the income statement in the period in which they are incurred
\nand not included in goodwill. Income and expenses of acquired businesses are included in the income statement from the date of acquisition.
\nWhere the Group writes a put option, which if exercised triggers the purchase of non-controlling interests as part of its business acquisition, the
\nput option is recognised as a \ufb01nancial liability at the acquisition date. Where risks and rewards remain with the non-controlling interests, a
\ncorresponding amount is deducted from equity. Any subsequent changes to the carrying amount of the put option liability are also recognised
\nwithin equity.
\nGoodwill
Goodwill is capitalised and carried on the Group consolidated statement of \ufb01nancial position as an intangible asset at initial value less any
\naccumulated impairment losses. Goodwill impairment testing is conducted annually and when there is an indication of impairment. ",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForBusinessCombinationsAndGoodwillExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f40554": {
"value": "Business combination Business acquisitions are accounted for by applying the purchase method of accounting, which adjusts the net assets of the acquired company to
\nfair value at the date of purchase. The excess of the acquisition consideration over the fair value of the assets and liabilities of the acquired
\nbusiness is recorded as goodwill. The Group chooses the full goodwill method or the partial goodwill method to calculate goodwill on an acquisition
\nby acquisition basis. Expenses related to acquiring new subsidiaries are charged to the income statement in the period in which they are incurred
\nand not included in goodwill. Income and expenses of acquired businesses are included in the income statement from the date of acquisition.
\nWhere the Group writes a put option, which if exercised triggers the purchase of non-controlling interests as part of its business acquisition, the
\nput option is recognised as a \ufb01nancial liability at the acquisition date. Where risks and rewards remain with the non-controlling interests, a
\ncorresponding amount is deducted from equity. Any subsequent changes to the carrying amount of the put option liability are also recognised
\nwithin equity. ",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForBusinessCombinationsExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f40563": {
"value": "Where the Group writes a put option, which if exercised triggers the purchase of non-controlling interests as part of its business acquisition, the put option is recognised as a \ufb01nancial liability at the acquisition date. Where risks and rewards remain with the non-controlling interests, a
\ncorresponding amount is deducted from equity. Any subsequent changes to the carrying amount of the put option liability are also recognised
within equity.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForTransactionsWithNoncontrollingInterestsExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f40571": {
"value": "Goodwill Goodwill is capitalised and carried on the Group consolidated statement of \ufb01nancial position as an intangible asset at initial value less any
\naccumulated impairment losses. Goodwill impairment testing is conducted annually and when there is an indication of impairment.
\nGoodwill shown on the consolidated statement of \ufb01nancial position at 31 December 2022 represents amounts allocated to business units in
\nrespect of both acquired asset management and life businesses. There has been no impairment as at 31 December 2022 and 2021.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForGoodwillExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f40572": {
"value": "Goodwill Goodwill is capitalised and carried on the Group consolidated statement of \ufb01nancial position as an intangible asset at initial value less any
\naccumulated impairment losses. Goodwill impairment testing is conducted annually and when there is an indication of impairment.
\nGoodwill shown on the consolidated statement of \ufb01nancial position at 31 December 2022 represents amounts allocated to business units in
\nrespect of both acquired asset management and life businesses. There has been no impairment as at 31 December 2022 and 2021.
Carrying value of distribution rights intangible assets
\nThe Group applies judgement to assess
\nwhether factors such as the \ufb01nancial
\nperformance of the distribution arrangements,
\nchanges in relevant legislation and regulatory
\nrequirements indicate an impairment of
\nintangible assets representing distribution
\nrights.
\nTo determine the impaired value, the Group
\nestimates the discounted future expected cash
\n\ufb02ows arising from the cash generating unit
\ncontaining the distribution rights.
\nA\ufb00ects $3.6 billion of assets as shown in note
\nC4.2.
\nDistribution rights relate to bancassurance partnership arrangements for the distribution of
\nproducts for the term of the contractual agreement with the bank partner, for which an asset is
\nrecognised based on fees paid and fees payable not subject to performance conditions.
\nDistribution rights impairment testing is conducted when there is an indication of an
\nimpairment.
\nTo assess indicators of an impairment, the Group monitors a number of internal and external
\nfactors, including indications that the \ufb01nancial performance of the arrangement is likely to be
\nworse than expected and changes in relevant legislation and regulatory requirements that
\ncould impact the Group\u2019s ability to continue to sell new business through the bancassurance
\nchannel, and then applies judgement to assess whether these factors indicate that an
\nimpairment has occurred.
\nIf an impairment has occurred, a charge is recognised in the income statement for the
\ndi\ufb00erence between the carrying value and recoverable amount of the asset. The recoverable
\namount is the greater of fair value less costs to sell and value in use. Value in use is calculated as
\nthe present value of future expected cash \ufb02ows from the asset or the cash generating unit to
\nwhich it is allocated.
Intangible assets acquired on the purchase of a subsidiary or portfolio of contracts are measured at fair value on acquisition. DAC are accounted
\nfor as described in note A3.1(c). Other intangible assets, such as distribution rights and software, are valued initially at the price paid to acquire or
\ncost to develop them and are subsequently carried at cost less amortisation and any accumulated impairment losses. For intangibles other than
\nDAC, amortisation follows the pattern in which the future economic bene\ufb01ts are expected to be consumed. If the pattern cannot be determined
\nreliably, a straight-line method is applied. For software, the amortisation generally represents the licence period of the software acquired.
\nAmortisation of intangible assets is charged to the \u2018acquisition costs and other expenditure\u2019 line in the Consolidated income statement.
\nImpairment testing is conducted when there is an indication of impairment.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForIntangibleAssetsAndGoodwillExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f40605": {
"value": "Impairment testing Goodwill does not generate cash \ufb02ows independently of other groups of assets and thus is assigned to cash-generating units for the purposes of
\nimpairment testing. These cash-generating units (CGUs) are based upon how management monitors the business and represent the lowest level
\nto which goodwill can be allocated on a reasonable basis. Of the carrying value at 31 December 2022, $445 million (31 December 2021:
\n$465 million) relates to asset management business in Thailand and $234 million (31 December 2021: $233 million) relates to the acquisition of
\nUOB Life in Singapore. Other goodwill amounts are allocated across CGUs, which are not individually material.
\nGoodwill is tested for impairment by comparing the CGU\u2019s carrying amount, including any goodwill, with its recoverable amount. The Group\u2019s
\nmethodology of assessing whether goodwill may be impaired for acquired life and asset management operations is discussed below.
\nFor acquired life businesses, the Group routinely compares the aggregate of net asset value and acquired goodwill on an IFRS basis of the
\nacquired life business with the value of the current in-force business as determined using the EEV methodology. Any excess of IFRS value over EEV
\ncarrying value is then compared with EEV basis value of current and projected future new business to determine whether there is any indication
\nthat the goodwill in the IFRS statement of \ufb01nancial position may be impaired. The methodology and assumptions underpinning the Group\u2019s EEV
\nbasis of reporting are included in the EEV basis supplementary information in this Annual Report.
\nThe goodwill in respect of asset management businesses comprises mainly the goodwill arising from the acquisition of Thanachart Fund
\nManagement Co., Ltd in 2019 and TMB Asset Management Co., Ltd in Thailand in 2018. The goodwill impairment testing for these businesses is
\nprepared as a single CGU re\ufb02ecting that these businesses are managed together. The recoverable amount of these businesses has been
\ndetermined by calculating the value in use of combined business calculated using a discounted cash \ufb02ow valuation.
\nFor the combined Thailand asset management business, the valuation is based on a number of key assumptions as follows:
\n>
Cash \ufb02ow projections based on the latest \ufb01ve-year business plan/forecast;
\n>
A constant growth rate of 3.5 per cent (2021: 2.3 per cent) on forecast cash \ufb02ows beyond the terminal year of the cash \ufb02ow projection period;
\n>
The risk discount rate applied in accordance with the nature of the businesses. The pre-tax discount rate applied is 9.0 per cent (2021:
\n9.0 per cent); and
\n>
The continuation of asset management contracts on similar terms.
\nThe key assumptions used in the impairment testing, including the cash \ufb02ow projections, are subject to \ufb02uctuations in the external market and
\neconomic conditions. The recent adverse conditions had contributed to reduced cash \ufb02ow projections leading to a fall in the headroom in
\ncomparison to the prior year. While management believes that any reasonable change in each of the key assumptions would not cause the
\nrecoverable amount of the asset management businesses acquired to fall below its carrying amount, a more signi\ufb01cant adverse change in the key
assumptions applied concurrently could lead to impairment charges.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfImpairmentOfAssetsExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f40656": {
"value": "C4.2 Deferred acquisition costs and other intangible assets
\nIntangible assets acquired on the purchase of a subsidiary or portfolio of contracts are measured at fair value on acquisition. DAC are accounted
\nfor as described in note A3.1(c). Other intangible assets, such as distribution rights and software, are valued initially at the price paid to acquire or
\ncost to develop them and are subsequently carried at cost less amortisation and any accumulated impairment losses. For intangibles other than
\nDAC, amortisation follows the pattern in which the future economic bene\ufb01ts are expected to be consumed. If the pattern cannot be determined
\nreliably, a straight-line method is applied. For software, the amortisation generally represents the licence period of the software acquired.
\nAmortisation of intangible assets is charged to the \u2018acquisition costs and other expenditure\u2019 line in the Consolidated income statement.
\nImpairment testing is conducted when there is an indication of impairment.
\n31 Dec 2022
\n$m
\n31 Dec 2021
\n$m
\nShareholder-backed business:
\nDAC related to insurance contracts as classi\ufb01ed under IFRS 4
3,215
2,776
\nDAC related to investment management contracts, including life assurance contracts classi\ufb01ed as \ufb01nancial instruments
\nand\u00a0investment management contracts under IFRS 4
39
39
\nDAC related to insurance and investment contracts
3,254
2,815
\nDistribution rights
3,630
3,782
\nPresent value of acquired in-force policies for insurance contracts as classi\ufb01ed under IFRS 4
17
28
\nOther intangibles
209
184
\nPresent value of acquired in-force and other intangibles
3,856
3,994
\nTotal of DAC and other intangible assets attributable to shareholders
7,110
6,809
\nOther intangible assets, including computer software, attributable to with-pro\ufb01ts funds
45
49
\nTotal of deferred acquisition costs and other intangible assets
7,155
6,858
\n(a) Movement in DAC and other intangible assets attributable to shareholders
\n2022
$m
2021
$m
\nDAC
\nDistribution
\nrights
\nnote (i)
\nPVIF and other
\nintangibles
\nnotes (ii)(iii)
\nTotal
Total
\nBalance at 1 Jan
2,815
3,782
212
6,809
20,275
\nRemoval of discontinued US operations
\u2013
\u2013
\u2013
\u2013
(13,881)
\nAdditions
1,002
206
76
1,284
1,185
\nAmortisation to the income statement
(475)
(301)
(50)
(826)
(651)
\nDisposals and transfers
\u2013
\u2013
(5)
(5)
(7)
\nExchange di\ufb00erences and other movements
(88)
(57)
(7)
(152)
(112)
\nBalance at 31 Dec
3,254
3,630
226
7,110
6,809
\nNotes
\n(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
\nfor the bank distribution of Prudential\u2019s insurance products for a \ufb01xed period of time. The distribution rights amounts are amortised on a basis to re\ufb02ect the pattern in which the future economic
\nbene\ufb01ts are expected to be consumed by reference to new business production levels.
\n(ii)
All of the net PVIF balances relate to insurance contracts. The PVIF attaching to investment contracts have been fully amortised.
\n(iii)
Other intangibles comprise other intangible assets such as software rights. Software rights include additions of $58 million, amortisation of $(24) million, disposals of $(3) million, foreign
\nexchange of $(7) million and closing balance at 31 December 2022 of $138 million (31 December 2021: $114 million).
\n(b) Movement in DAC related to insurance and investment contracts
\n2022
$m
2021
$m
\nInsurance
\ncontracts
\nInvestment
\ncontracts
\nnote
\nInsurance
\ncontracts
\nInvestment
\ncontracts
\nnote
\nBalance at 1 Jan
2,776
39
16,182
34
\nRemoval of discontinued US operations
\u2013
\u2013
(13,863)
\u2013
\nAdditions
993
9
841
7
\nAmortisation
(470)
(5)
(339)
(4)
\nExchange di\ufb00erences and other movements
(84)
(4)
(45)
2
\nBalance at 31 Dec
3,215
39
2,776
39
\nNote
\nThe carrying amount of the DAC balance relating to investment contracts comprises the following gross and accumulated amortisation amounts:
\n31 Dec 2022
\n$m
\n31 Dec 2021
\n$m
\nGross amount
59
55
\nAccumulated amortisation
(20)
(16)
\nCarrying amount
39
39
\n329
Prudential plc
Annual Report 2022
\nGroup overview
Strategic report
Governance
Directors\u2019 remuneration report
European Embedded Value (EEV) basis results
Additional information
Financial statements
C Financial position
/ continued
\nC4 Intangible assets
continued
\nC4.2
Deferred acquisition costs and other intangible assets
continued
\n(c) Movement in PVIF and other intangibles attributable to shareholders
\n2022
$m
2021
$m
\nPVIF
\nDistribution
\nrights
\nOther
\nintangibles
\n(including
\nsoftware)
Total
PVIF
\nDistribution
\nrights
\nOther
\nintangibles
\n(including
\nsoftware)
Total
\nBalance at 1 Jan
\nCost
140
5,037
313
5,490
177
4,845
424
5,446
\nAccumulated amortisation
(112)
(1,255)
(129)
(1,496)
(143)
(994)
(250)
(1,387)
\n28
3,782
184
3,994
34
3,851
174
4,059
\nRemoval of discontinued US operations
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(18)
(18)
\nAdditions
\u2013
206
76
282
\u2013
260
77
337
\nAmortisation charge
(10)
(301)
(40)
(351)
(5)
(268)
(35)
(308)
\nDisposals and transfers
\u2013
\u2013
(5)
(5)
\u2013
\u2013
(7)
(7)
\nExchange di\ufb00erences and other
\nmovements
(1)
(57)
(6)
(64)
(1)
(61)
(7)
(69)
\nBalance at 31 Dec
17
3,630
209
3,856
28
3,782
184
3,994
\nComprising:
\nCost
134
5,176
373
5,683
140
5,037
313
5,490
\nAccumulated amortisation
(117)
(1,546)
(164)
(1,827)
(112)
(1,255)
(129)
(1,496)
\n17
3,630
209
3,856
28
3,782
184
3,994",
"dimensions": {
"concept": "ifrs-full:DisclosureOfIntangibleAssetsExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f40657": {
"value": "C4.2 Deferred acquisition costs and other intangible assets
\nIntangible assets acquired on the purchase of a subsidiary or portfolio of contracts are measured at fair value on acquisition. DAC are accounted
\nfor as described in note A3.1(c). Other intangible assets, such as distribution rights and software, are valued initially at the price paid to acquire or
\ncost to develop them and are subsequently carried at cost less amortisation and any accumulated impairment losses. For intangibles other than
\nDAC, amortisation follows the pattern in which the future economic bene\ufb01ts are expected to be consumed. If the pattern cannot be determined
\nreliably, a straight-line method is applied. For software, the amortisation generally represents the licence period of the software acquired.
\nAmortisation of intangible assets is charged to the \u2018acquisition costs and other expenditure\u2019 line in the Consolidated income statement.
\nImpairment testing is conducted when there is an indication of impairment.
\n31 Dec 2022
\n$m
\n31 Dec 2021
\n$m
\nShareholder-backed business:
\nDAC related to insurance contracts as classi\ufb01ed under IFRS 4
3,215
2,776
\nDAC related to investment management contracts, including life assurance contracts classi\ufb01ed as \ufb01nancial instruments
\nand\u00a0investment management contracts under IFRS 4
39
39
\nDAC related to insurance and investment contracts
3,254
2,815
\nDistribution rights
3,630
3,782
\nPresent value of acquired in-force policies for insurance contracts as classi\ufb01ed under IFRS 4
17
28
\nOther intangibles
209
184
\nPresent value of acquired in-force and other intangibles
3,856
3,994
\nTotal of DAC and other intangible assets attributable to shareholders
7,110
6,809
\nOther intangible assets, including computer software, attributable to with-pro\ufb01ts funds
45
49
\nTotal of deferred acquisition costs and other intangible assets
7,155
6,858
\n(a) Movement in DAC and other intangible assets attributable to shareholders
\n2022
$m
2021
$m
\nDAC
\nDistribution
\nrights
\nnote (i)
\nPVIF and other
\nintangibles
\nnotes (ii)(iii)
\nTotal
Total
\nBalance at 1 Jan
2,815
3,782
212
6,809
20,275
\nRemoval of discontinued US operations
\u2013
\u2013
\u2013
\u2013
(13,881)
\nAdditions
1,002
206
76
1,284
1,185
\nAmortisation to the income statement
(475)
(301)
(50)
(826)
(651)
\nDisposals and transfers
\u2013
\u2013
(5)
(5)
(7)
\nExchange di\ufb00erences and other movements
(88)
(57)
(7)
(152)
(112)
\nBalance at 31 Dec
3,254
3,630
226
7,110
6,809
\nNotes
\n(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
\nfor the bank distribution of Prudential\u2019s insurance products for a \ufb01xed period of time. The distribution rights amounts are amortised on a basis to re\ufb02ect the pattern in which the future economic
\nbene\ufb01ts are expected to be consumed by reference to new business production levels.
\n(ii)
All of the net PVIF balances relate to insurance contracts. The PVIF attaching to investment contracts have been fully amortised.
\n(iii)
Other intangibles comprise other intangible assets such as software rights. Software rights include additions of $58 million, amortisation of $(24) million, disposals of $(3) million, foreign
\nexchange of $(7) million and closing balance at 31 December 2022 of $138 million (31 December 2021: $114 million).
\n(b) Movement in DAC related to insurance and investment contracts
\n2022
$m
2021
$m
\nInsurance
\ncontracts
\nInvestment
\ncontracts
\nnote
\nInsurance
\ncontracts
\nInvestment
\ncontracts
\nnote
\nBalance at 1 Jan
2,776
39
16,182
34
\nRemoval of discontinued US operations
\u2013
\u2013
(13,863)
\u2013
\nAdditions
993
9
841
7
\nAmortisation
(470)
(5)
(339)
(4)
\nExchange di\ufb00erences and other movements
(84)
(4)
(45)
2
\nBalance at 31 Dec
3,215
39
2,776
39
\nNote
\nThe carrying amount of the DAC balance relating to investment contracts comprises the following gross and accumulated amortisation amounts:
\n31 Dec 2022
\n$m
\n31 Dec 2021
\n$m
\nGross amount
59
55
\nAccumulated amortisation
(20)
(16)
\nCarrying amount
39
39
\n329
Prudential plc
Annual Report 2022
\nGroup overview
Strategic report
Governance
Directors\u2019 remuneration report
European Embedded Value (EEV) basis results
Additional information
Financial statements
C Financial position
/ continued
\nC4 Intangible assets
continued
\nC4.2
Deferred acquisition costs and other intangible assets
continued
\n(c) Movement in PVIF and other intangibles attributable to shareholders
\n2022
$m
2021
$m
\nPVIF
\nDistribution
\nrights
\nOther
\nintangibles
\n(including
\nsoftware)
Total
PVIF
\nDistribution
\nrights
\nOther
\nintangibles
\n(including
\nsoftware)
Total
\nBalance at 1 Jan
\nCost
140
5,037
313
5,490
177
4,845
424
5,446
\nAccumulated amortisation
(112)
(1,255)
(129)
(1,496)
(143)
(994)
(250)
(1,387)
\n28
3,782
184
3,994
34
3,851
174
4,059
\nRemoval of discontinued US operations
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(18)
(18)
\nAdditions
\u2013
206
76
282
\u2013
260
77
337
\nAmortisation charge
(10)
(301)
(40)
(351)
(5)
(268)
(35)
(308)
\nDisposals and transfers
\u2013
\u2013
(5)
(5)
\u2013
\u2013
(7)
(7)
\nExchange di\ufb00erences and other
\nmovements
(1)
(57)
(6)
(64)
(1)
(61)
(7)
(69)
\nBalance at 31 Dec
17
3,630
209
3,856
28
3,782
184
3,994
\nComprising:
\nCost
134
5,176
373
5,683
140
5,037
313
5,490
\nAccumulated amortisation
(117)
(1,546)
(164)
(1,827)
(112)
(1,255)
(129)
(1,496)
\n17
3,630
209
3,856
28
3,782
184
3,994",
"dimensions": {
"concept": "ifrs-full:DisclosureOfDeferredAcquisitionCostsArisingFromInsuranceContractsExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f41000": {
"value": "C5 Borrowings Although initially recognised at fair value (net of transaction costs), borrowings are subsequently accounted for on an amortised cost basis using
\nthe e\ufb00ective interest method. Under the e\ufb00ective interest method, the di\ufb00erence between the redemption value of the borrowing and the initial
\nproceeds (net of related issue costs) is amortised through the income statement to the date of maturity or, for hybrid debt, over the expected life of
\nthe instrument.
\nC5.1
Core structural borrowings of shareholder-\ufb01nanced businesses
\n31 Dec 2022
\n$m
\n31 Dec 2021
\n$m
\nSubordinated debt:
\nUS$1,000m 5.25% Notes
\nnote (i)
\n\u2013
1,000
\nUS$725m 4.375% Notes
\nnote (ii)
\n\u2013
725
\nUS$750m 4.875% Notes
750
748
\n\u20ac20m Medium Term Notes 2023
21
23
\n\u00a3435m 6.125% Notes 2031
520
584
\nUS$1,000m 2.95% Notes 2033
995
995
\nSenior debt:
\nnote (iii)
\n\u00a3300m 6.875% Notes 2023
\nnote (iv)
\n361
404
\n\u00a3250m 5.875% Notes 2029
281
313
\nUS$1,000m 3.125% Notes 2030
987
985
\nUS$350m 3.625% Notes 2032
\nnote (v)
\n346
\u2013
\nBank loans:
\nUS$350m Loan 2024
\nnote (v)
\n\u2013
350
\nTotal core structural borrowings of shareholder-\ufb01nanced businesses
4,261
6,127
\nNotes
\n(i)
The US$1,000 million notes were redeemed on 20 January 2022 using the proceeds from the issuance of ordinary shares during 2021 as discussed in note C8.
\n(ii)
The US$725 million notes were redeemed on 20 January 2022 using the proceeds from the US$1,000 million subordinated debt issued in November 2021.
\n(iii)
The senior debt ranks above subordinated debt in the event of liquidation.
\n(iv)
The \u00a3300 million notes were redeemed on 20 January 2023.
\n(v)
In March 2022, the Company issued US$350 million 3.625 per cent senior debt maturing on 24 March 2032 with proceeds, net of costs, of US$346 million, which was used to redeem the
\nUS$350 million bank loan in May 2022.
\n330
Prudential plc
Annual Report 2022
prudentialplc.com
C5.2
Operational borrowings
\n31 Dec 2022
\n$m
\n31 Dec 2021
\n$m
\nShareholder-\ufb01nanced business:
\nBorrowings in respect of short-term \ufb01xed income securities programmes \u2013 commercial paper
501
500
\nLease liabilities under IFRS 16
185
209
\nOther borrowings
11
10
\nOperational borrowings attributable to shareholder-\ufb01nanced businesses
697
719
\nWith-pro\ufb01ts business:
\nLease liabilities under IFRS 16
114
138
\nOther borrowings
4
4
\nOperational borrowings attributable to with-pro\ufb01ts businesses
118
142
\nTotal operational borrowings
815
861",
"dimensions": {
"concept": "ifrs-full:DisclosureOfBorrowingsExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f41003": {
"value": "Although initially recognised at fair value (net of transaction costs), borrowings are subsequently accounted for on an amortised cost basis using the e\ufb00ective interest method. Under the e\ufb00ective interest method, the di\ufb00erence between the redemption value of the borrowing and the initial
\nproceeds (net of related issue costs) is amortised through the income statement to the date of maturity or, for hybrid debt, over the expected life of
\nthe instrument.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForBorrowingsExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f41010": {
"value": "C5.1 Core structural borrowings of shareholder-\ufb01nanced businesses
\n31 Dec 2022
\n$m
\n31 Dec 2021
\n$m
\nSubordinated debt:
\nUS$1,000m 5.25% Notes
\nnote (i)
\n\u2013
1,000
\nUS$725m 4.375% Notes
\nnote (ii)
\n\u2013
725
\nUS$750m 4.875% Notes
750
748
\n\u20ac20m Medium Term Notes 2023
21
23
\n\u00a3435m 6.125% Notes 2031
520
584
\nUS$1,000m 2.95% Notes 2033
995
995
\nSenior debt:
\nnote (iii)
\n\u00a3300m 6.875% Notes 2023
\nnote (iv)
\n361
404
\n\u00a3250m 5.875% Notes 2029
281
313
\nUS$1,000m 3.125% Notes 2030
987
985
\nUS$350m 3.625% Notes 2032
\nnote (v)
\n346
\u2013
\nBank loans:
\nUS$350m Loan 2024
\nnote (v)
\n\u2013
350
\nTotal core structural borrowings of shareholder-\ufb01nanced businesses
4,261
6,127
\nNotes
\n(i)
The US$1,000 million notes were redeemed on 20 January 2022 using the proceeds from the issuance of ordinary shares during 2021 as discussed in note C8.
\n(ii)
The US$725 million notes were redeemed on 20 January 2022 using the proceeds from the US$1,000 million subordinated debt issued in November 2021.
\n(iii)
The senior debt ranks above subordinated debt in the event of liquidation.
\n(iv)
The \u00a3300 million notes were redeemed on 20 January 2023.
\n(v)
In March 2022, the Company issued US$350 million 3.625 per cent senior debt maturing on 24 March 2032 with proceeds, net of costs, of US$346 million, which was used to redeem the
\nUS$350 million bank loan in May 2022.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfSubordinatedLiabilitiesExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f41089": {
"value": "C5.2
Operational borrowings
\n31 Dec 2022
\n$m
\n31 Dec 2021
\n$m
\nShareholder-\ufb01nanced business:
\nBorrowings in respect of short-term \ufb01xed income securities programmes \u2013 commercial paper
501
500
\nLease liabilities under IFRS 16
185
209
\nOther borrowings
11
10
\nOperational borrowings attributable to shareholder-\ufb01nanced businesses
697
719
\nWith-pro\ufb01ts business:
\nLease liabilities under IFRS 16
114
138
\nOther borrowings
4
4
\nOperational borrowings attributable to with-pro\ufb01ts businesses
118
142
\nTotal operational borrowings
815
861
C11 Property, plant and equipment Property, plant and equipment comprise Group occupied properties and tangible assets. Property, plant and equipment also includes right-of-useassets for operating leases of properties occupied by the Group and leases of equipment and other tangible assets. All property, plant and
\nequipment, including the right-of-use assets under operating leases, are held at cost less cumulative depreciation, calculated using the straight-line
\nmethod, and impairment charge.
\nA reconciliation of the carrying amount of the Group\u2019s property, plant and equipment from the beginning to the end of the years shown is as
\nfollows:
\n2022
$m
2021
$m
\nGroup
\noccupied
\nproperty
\nTangible
\nassets
\nRight-of-
\nuse assets
Total
\nGroup
\noccupied
\nproperty
\nTangible
\nassets
\nRight-of-
\nuse assets
Total
\nBalance at 1 Jan
\nCost
33
489
678
1,200
355
707
710
1,772
\nAccumulated depreciation
(10)
(349)
(363)
(722)
(88)
(523)
(268)
(879)
\nOpening net book amount
23
140
315
478
267
184
442
893
\nRemoval of discontinued US operations
\u2013
\u2013
\u2013
\u2013
(242)
(32)
(35)
(309)
\nAdditions
\u2013
34
49
83
\u2013
36
59
95
\nDepreciation and impairment charge
\u2013
(39)
(106)
(145)
(1)
(45)
(123)
(169)
\nDisposals, transfers and lease modi\ufb01cations
\u2013
(2)
26
24
\u2013
\u2013
(22)
(22)
\nE\ufb00ect of movements in exchange rates
(1)
(7)
(13)
(21)
(1)
(3)
(6)
(10)
\nBalance at 31 Dec
22
126
271
419
23
140
315
478
\nRepresenting:
\nCost
32
486
676
1,194
33
489
678
1,200
\nAccumulated depreciation
(10)
(360)
(405)
(775)
(10)
(349)
(363)
(722)
\nClosing net book amount
22
126
271
419
23
140
315
478
Right-of-use assets
\nThe Group does not have any right-of-use assets that would meet the de\ufb01nition of investment property. As at 31 December 2022, total right-of-
\nuse assets comprised $267 million (31 December 2021: $311 million) of property and $4 million (31 December 2021: $4 million) of non-property
\nassets. Of the $271 million (31 December 2021: $315 million) total right-of-use assets, $105 million (31 December 2021: $128 million) were held by
\nthe Group\u2019s with-pro\ufb01ts businesses.
\nExtension and termination options are included in a number of property and equipment leases across the Group. These are used to maximise
\noperational \ufb02exibility in terms of managing the assets used in the Group\u2019s operations. The majority of extension and termination options held are
\nexercisable only by the Group and not by the respective lessor. The Group assesses at lease commencement whether it is reasonably certain to
\nexercise the option. This assertion is revisited if there is a material change in circumstances. As at 31 December 2022, the undiscounted value of
\nlease payments beyond the break period not recognised in the lease liabilities is $189 million (31 December 2021: $201 million).
\nThe Group has non-cancellable property subleases which have been classi\ufb01ed as operating leases under IFRS 16. The sublease rental income
\nreceived in 2022 for the leases is $6 million (2021: $6 million).
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfLeasesExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f41125": {
"value": "C6 Risk and sensitivity analysis Group overview
\nThe Group\u2019s risk framework and the management of risks attaching to the Group\u2019s consolidated \ufb01nancial statements including \ufb01nancial assets,
\n\ufb01nancial liabilities and insurance liabilities, together with the inter-relationship with the management of capital, have been included in the audited
\nsections of the Risk review report.
\nThe \ufb01nancial and insurance assets and liabilities on the Group\u2019s statement of \ufb01nancial position are, to varying degrees, subject to market and
\ninsurance risk and other changes of experience assumptions that may have a material e\ufb00ect on IFRS basis pro\ufb01t or loss and shareholders\u2019 equity.
\nThe market and insurance risks and also ESG-related risks, including how they a\ufb00ect Group\u2019s operations and how these are managed are discussed
\nin the Risk review report referred to above. The ESG-related risks discussed in the Risk review report include in particular the potential long-term
\nimpact of environmental risks associated with climate change (including physical and transition risks) on the Group\u2019s investments and liabilities.
\nThe ESG Report included in this Annual Report sets out three commonly used scenarios of plausible global responses to climate change. Each
\nscenario is translated into potential sensitivities to economic factors, using third party calibrated inputs, which have then been applied during the
\nyear to the Group\u2019s starting assets and liabilities to quantify possible future impacts thereon. Though the Group remains exposed to \ufb01nancial
\nimpact from plausible global responses addressing climate change, the results for each scenario are not outside observed market volatility
\nexperienced and therefore do not indicate the need for explicit allowance for climate change within the current valuations. In addition, given the
\nnature of the business, the impact of climate change does not directly alter the Group\u2019s assumptions for claims and lapses for its insurance
\nbusiness based on the annual review of experience. If experience or exposure changes, for example due to a step change in long-term morbidity
\nand/or mortality expectations in a particular region due to climate events, the \ufb01nancial impacts from climate-related risks on our insurance
\nliabilities could be more signi\ufb01cant and would be allowed for as part of the regular review.
\nThe most signi\ufb01cant market and credit risks that the IFRS shareholders\u2019 pro\ufb01t or loss and shareholders\u2019 equity for the Group\u2019s life assurance
\nbusiness are sensitive to, are shown in the following tables. The distinction between direct and indirect exposure is not intended to indicate the
\nrelative size of the sensitivity. In addition, insurance businesses are sensitive to mortality and/or morbidity risk as well as persistency risk depending
\non the products sold.
\nType of business
Market and credit risk
\nWith-pro\ufb01ts business
\nUnit-linked business
\nNet neutral direct exposure (indirect exposure to investment performance, which is subject to smoothing
\nthrough declared bonuses)
\nNet neutral direct exposure (indirect exposure to investment performance, through asset management
\nfees)
\nNon-participating business
Asset/liability mismatch risk which results in sensitivity to interest rates and credit spreads, particularly for
\noperations where the insurance liability basis is sensitive to current market movements
\nPro\ufb01t and shareholders\u2019 equity are also sensitive to the impact of current market movements on assets
\nheld in excess of non-participating policyholder liabilities
\nIndirect exposure to investment performance through policyholder charges and guarantees in some
\ncases
\n331
Prudential plc
Annual Report 2022
\nGroup overview
Strategic report
Governance
Directors\u2019 remuneration report
European Embedded Value (EEV) basis results
Additional information
Financial statements
C Financial position
/ continued
\nC6 Risk and sensitivity analysis
continued
\nSensitivity analyses of IFRS shareholders\u2019 equity to key market and other risks for the insurance operations are provided in section C6.1 below. The
\nsensitivity analyses provided show the e\ufb00ect on shareholders\u2019 equity to changes in the relevant risk variables, all of which are considered to be
\nreasonably possible at the relevant balance sheet date.
\nThe sensitivity of the Group\u2019s Eastspring and central operations to market risks is discussed in section C6.2.
\nThe Group bene\ufb01ts from diversi\ufb01cation bene\ufb01ts achieved through the geographical spread of the Group\u2019s operations and, within those
\noperations, through a broad mix of product types. These bene\ufb01ts are not re\ufb02ected in the simpli\ufb01ed sensitivities below.
\nRelevant correlation factors include:
\n>
Correlation across geographic regions for both \ufb01nancial and non-\ufb01nancial risk factors; and
\n>
Correlation across risk factors for mortality and morbidity, expenses, persistency and other risks.
\nThe geographical diversity of the Group\u2019s business means that it has some exposure to the risk of foreign exchange rate \ufb02uctuations. The Group
\nhas no exposure to currency \ufb02uctuation from business units that operate in USD, or currencies pegged to the USD (such as HKD), and reduced
\nexposure to currencies partially managed to the USD within a basket of currencies (such as SGD). Sensitivities to exchange rate movements in the
\nGroup\u2019s key markets are therefore expected to be limited.
\nC6.1
Insurance operations
\n(a) Sensitivity to key market risks
\nThe table below shows the sensitivity of shareholders\u2019 equity as at 31 December 2022 and 2021 for insurance operations to the following market risks:
\n>
1 per cent increase and 0.5 per cent decrease in interest rates (based on local government bond yields at the valuation date) in isolation and
\nsubject to a \ufb02oor of zero; and
\n>
Instantaneous 10 per cent rise and 20 per cent fall in the market value of equity and property assets. The equity risk sensitivity analysis assumes
\nthat all equity indices fall by the same percentage.
\nThe sensitivities below only allow for limited management actions such as changes to policyholder bonuses, where applicable. If the economic
\nconditions set out in the sensitivities persisted, the \ufb01nancial impacts may di\ufb00er to the instantaneous impacts shown below. Given the continuous
\nrisk management processes in place, management could take additional actions to help mitigate the impact of these stresses, including (but not
\nlimited to) rebalancing investment portfolios, increased use of reinsurance, repricing of in-force bene\ufb01ts, changes to new business pricing and the
\nmix of new business being sold.
\nWhere liabilities are valued using historic average rates for a short period (ie up to three years), the valuation interest rates are adjusted to
\nassume a parallel increase or decrease in the interest rates used in the averaging approach to re\ufb02ect the impact that could be seen in the near
\nterm. Credit risk sensitivities, such as the impact on the value of debt securities and policyholder liabilities
from movements in credit spreads are not
\npresented below
. A one-letter credit downgrade in isolation (ie ignoring any consequential change in valuation) would not have a material impact
\non IFRS pro\ufb01t or shareholders\u2019 equity.
\nNet e\ufb00ect on shareholders\u2019 equity from insurance operations
\n31 Dec 2022
\n$m
\n31 Dec 2021
\n$m
\nShareholders\u2019 equity of insurance operations
14,407
14,289
\nSensitivity to key market risks:
\nnote
\nInterest rates and consequential e\ufb00ects \u2013 1% increase
(386)
(796)
\nInterest rates and consequential e\ufb00ects \u2013 0.5% decrease
(122)
137
\nEquity/property market values \u2013 10% rise
190
372
\nEquity/property market values \u2013 20% fall
(729)
(787)
\nNote
\nThe e\ufb00ect from the changes in interest rates or equity and property prices above, if they arose, would impact pro\ufb01t after tax for the insurance operations and would mostly be recorded within short-term
\n\ufb02uctuations in investment returns. The impact on pro\ufb01t after tax would be the same as the net e\ufb00ect on shareholders\u2019 equity. Changes to the results of the Africa insurance operations from interest rate
\nor equity rate changes would not materially impact the Group.
\nThe degree of sensitivity of the results of the non-linked shareholder-backed business of the insurance operations to movements in interest rates
\ndepends upon the degree to which the liabilities under the \u2018grandfathered\u2019 IFRS 4 measurement basis re\ufb02ects market interest rates from period to
\nperiod. This varies by business unit.
\nFor example:
\n>
Taiwan and India businesses apply US GAAP, for which the results can be more sensitive as the e\ufb00ect of interest rate movements on the backing
\ninvestments may not be o\ufb00set by liability movements; and
\n>
The level of options and guarantees in the products written in a particular business unit will a\ufb00ect the degree of sensitivity to interest rate
\nmovements.
\n332
Prudential plc
Annual Report 2022
prudentialplc.com
The sensitivity of the insurance operations presented as a whole at a given point in time will also be a\ufb00ected by a change in the relative size of the
\nindividual businesses.
\nThe \u2018increase of 1%\u2019 sensitivities re\ufb02ect that, for many operations the impact of interest rate movements on the value of government and
\ncorporate bond investments dominates, namely bonds are expected to decrease in value as interest rates increase to a greater extent than the
\no\ufb00setting decrease in liabilities from a corresponding change in discount rates. This arises because the discount rate in some operations does not
\n\ufb02uctuate in line with interest rate movements. Under a 0.5% decrease interest rate scenario although in the majority of operations asset gains
\nexceed the increase in liabilities, there are a number of operations where the increase in liabilities dominates, driven by an increase in the value of
\npolicyholder guarantees, hence this results in an overall small negative impact of an instantaneous decrease of rates at 31 December 2022.
\nMovements in equities backing with-pro\ufb01ts and unit-linked business have been excluded from the equity and property sensitivities as they are
\ngenerally matched by an equal movement in insurance liabilities (including unallocated surplus of with-pro\ufb01ts funds). The impact on changes to
\nfuture pro\ufb01tability as a result of changes to the asset values within unit-linked or with-pro\ufb01ts funds have not been included in the instantaneous
\nsensitivity above. The estimated sensitivities shown above include equity and property investments held by the Group\u2019s joint venture and
\nassociate businesses. Generally, changes in equity and property investment values held outside unit-linked and with-pro\ufb01ts funds are not directly
\no\ufb00set by movements in non-linked policyholder liabilities. For Hong Kong\u2019s non-participating business, liabilities largely re\ufb02ect asset shares post
\nthe adoption of HK RBC and therefore the consequential movements in equities are o\ufb00set by movements in policyholder liabilities.
\n(b) Sensitivity to insurance risk
\nFor insurance operations, adverse persistency experience can impact the IFRS pro\ufb01tability of certain types of business written. This risk is
\nmanaged at a business unit level through regular monitoring of experience and the implementation of management actions as necessary.
\nThese actions could include product enhancements, increased management focus on premium collection, as well as other customer retention
\ne\ufb00orts. The potential \ufb01nancial impact of lapses is often mitigated through the speci\ufb01c features of the products, eg surrender charges, or through
\nthe availability of premium holiday or partial withdrawal policy features. The reserving basis, as discussed in note A3.1(a) and C3.4, is generally
\nsuch that a change in lapse assumptions has an immaterial e\ufb00ect on immediate pro\ufb01tability.
\nMany of the business units are exposed to mortality and morbidity risk and a provision is made within policyholder liabilities to cover the
\npotential exposure. If all these assumptions were strengthened by 5 per cent then it is estimated that pro\ufb01t after tax and shareholders\u2019 equity
\nwould decrease by approximately $(101) million (2021: $(108) million), before consideration of other reserving adjustments eg a corresponding
\nrelease of margin for prudence. Weakening these assumptions by 5 per cent would have a similar opposite impact.
\nC6.2
Eastspring and central operations
\nThe pro\ufb01t for the year of Eastspring is sensitive to the level of assets under management, as this signi\ufb01cantly a\ufb00ects the value of management
\nfees earned by the business in the current and future periods. Assets under management will rise and fall as market conditions change, with a
\nconsequential impact on pro\ufb01tability.
\nEastspring holds a small amount of investments direct on its balance sheet, including investments in respect of seeding capital into retail funds
\nit sells to third parties (see note C1). Eastspring\u2019s pro\ufb01t will therefore have some exposure to the market movements of these investments.
\nAt 31 December 2022, the Group\u2019s central operations held a 9.2 per cent (31 December 2021: 18.4 per cent) economic interest in the equity
\nsecurities of Jackson. These equity securities are listed on the New York Stock Exchange and classi\ufb01ed as available-for-sale with a fair value of
\n$266 million at 31 December 2022 (31 December 2021: $683 million). If the value of these securities decreased by 20 per cent, the change in
\nvaluation would be $(53) million (31 December 2021: $(137) million), which would reduce shareholders\u2019 equity by this amount before tax, all of
\nwhich would pass through other comprehensive income outside of the pro\ufb01t or loss.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfFinancialRiskManagementExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f41340": {
"value": "C7 Tax assets and liabilities Accounting policies on deferred tax are included in note B3.
\nC7.1
Current tax
\nAt 31 December 2022, of the $18 million (31 December 2021: $20 million) current tax recoverable, the majority is expected to be recovered within
\n12 months after the reporting period.
\nAt 31 December 2022, the current tax liability from operations of $208 million (31 December 2021: $185 million) includes $79 million
\n(31 December 2021: $42 million) of provisions for uncertain tax matters. Further detail is provided in note B3.2.
\nC7.2
Deferred tax
\nThe statement of \ufb01nancial position contains the following deferred tax assets and liabilities in relation to:
\n2022
$m
\nBalance
\nat 1 Jan
\nMovement in
\nincome
\nstatement
\nOther
\nmovements
\nincluding
\nforeign
\nexchange
\nmovements
\nBalance
\nat 31 Dec
\nDeferred tax assets
\nUnrealised losses or gains on investments
3
317
(178)
142
\nBalances relating to investment and insurance contracts
34
1
(33)
2
\nShort-term temporary di\ufb00erences
162
(15)
(12)
135
\nUnused tax losses
67
(32)
(4)
31
\nTotal deferred tax assets
266
271
(227)
310
\nDeferred tax liabilities
\nUnrealised losses or gains on investments
(242)
44
185
(13)
\nBalances relating to investment and insurance contracts
(2,125)
(228)
47
(2,306)
\nShort-term temporary di\ufb00erences
(495)
(81)
23
(553)
\nTotal deferred tax liabilities
(2,862)
(265)
255
(2,872)
\n2021
$m
\nBalance
\nat 1 Jan
\nRemoval of
\ndiscontinued
\nUS operations
\nMovement in
\nincome
\nstatement
\nOther
\nmovements
\nincluding
\nforeign
\nexchange
\nmovements
\nBalance
\nat 31 Dec
\nDeferred tax assets
\nUnrealised losses or gains on investments
\u2013
\u2013
3
\u2013
3
\nBalances relating to investment and insurance contracts
87
\u2013
(16)
(37)
34
\nShort-term temporary di\ufb00erences
4,662
(4,513)
15
(2)
162
\nUnused tax losses
109
(29)
(14)
1
67
\nTotal deferred tax assets
4,858
(4,542)
(12)
(38)
266
\nDeferred tax liabilities
\nUnrealised losses or gains on investments
(1,063)
691
127
3
(242)
\nBalances relating to investment and insurance contracts
(1,765)
\u2013
(433)
73
(2,125)
\nShort-term temporary di\ufb00erences
(3,247)
2,832
(87)
7
(495)
\nTotal deferred tax liabilities
(6,075)
3,523
(393)
83
(2,862)
\nAt 31 December 2022, no deferred tax asset has been recognised in respect of unused tax losses and temporary deductible di\ufb00erences of
\n$2,235 million (31 December 2021: $1,382 million). $837 million of the unused tax losses expired at the point of Prudential plc\u2019s tax residency
\nchange from the UK to Hong Kong on 3 March 2023. A further $103 million (31 December 2021: $108 million) relates to unused tax losses that will
\nexpire within the next ten years (potential tax bene\ufb01t: $22 million), and the remainder of $1,295 million (31 December 2021: $1,274 million) has
\nno expiry date (potential tax bene\ufb01t: $277 million).
\nSome of the Group\u2019s businesses are located in jurisdictions in which a withholding tax charge is incurred upon the distribution of earnings. At
\n31 December 2022, deferred tax liabilities of $216 million (31 December 2021: $330 million) have not been recognised in respect of such
\nwithholding taxes as the Group is able to control the timing of the distributions and it is probable that the timing di\ufb00erences will not reverse in the
\nforeseeable future.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfTaxReceivablesAndPayablesExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f41352": {
"value": "C7.2 Deferred tax
\nThe statement of \ufb01nancial position contains the following deferred tax assets and liabilities in relation to:
\n2022
$m
\nBalance
\nat 1 Jan
\nMovement in
\nincome
\nstatement
\nOther
\nmovements
\nincluding
\nforeign
\nexchange
\nmovements
\nBalance
\nat 31 Dec
\nDeferred tax assets
\nUnrealised losses or gains on investments
3
317
(178)
142
\nBalances relating to investment and insurance contracts
34
1
(33)
2
\nShort-term temporary di\ufb00erences
162
(15)
(12)
135
\nUnused tax losses
67
(32)
(4)
31
\nTotal deferred tax assets
266
271
(227)
310
\nDeferred tax liabilities
\nUnrealised losses or gains on investments
(242)
44
185
(13)
\nBalances relating to investment and insurance contracts
(2,125)
(228)
47
(2,306)
\nShort-term temporary di\ufb00erences
(495)
(81)
23
(553)
\nTotal deferred tax liabilities
(2,862)
(265)
255
(2,872)
\n2021
$m
\nBalance
\nat 1 Jan
\nRemoval of
\ndiscontinued
\nUS operations
\nMovement in
\nincome
\nstatement
\nOther
\nmovements
\nincluding
\nforeign
\nexchange
\nmovements
\nBalance
\nat 31 Dec
\nDeferred tax assets
\nUnrealised losses or gains on investments
\u2013
\u2013
3
\u2013
3
\nBalances relating to investment and insurance contracts
87
\u2013
(16)
(37)
34
\nShort-term temporary di\ufb00erences
4,662
(4,513)
15
(2)
162
\nUnused tax losses
109
(29)
(14)
1
67
\nTotal deferred tax assets
4,858
(4,542)
(12)
(38)
266
\nDeferred tax liabilities
\nUnrealised losses or gains on investments
(1,063)
691
127
3
(242)
\nBalances relating to investment and insurance contracts
(1,765)
\u2013
(433)
73
(2,125)
\nShort-term temporary di\ufb00erences
(3,247)
2,832
(87)
7
(495)
\nTotal deferred tax liabilities
(6,075)
3,523
(393)
83
(2,862)
\nAt 31 December 2022, no deferred tax asset has been recognised in respect of unused tax losses and temporary deductible di\ufb00erences of
\n$2,235 million (31 December 2021: $1,382 million). $837 million of the unused tax losses expired at the point of Prudential plc\u2019s tax residency
\nchange from the UK to Hong Kong on 3 March 2023. A further $103 million (31 December 2021: $108 million) relates to unused tax losses that will
\nexpire within the next ten years (potential tax bene\ufb01t: $22 million), and the remainder of $1,295 million (31 December 2021: $1,274 million) has
\nno expiry date (potential tax bene\ufb01t: $277 million).
\nSome of the Group\u2019s businesses are located in jurisdictions in which a withholding tax charge is incurred upon the distribution of earnings. At
\n31 December 2022, deferred tax liabilities of $216 million (31 December 2021: $330 million) have not been recognised in respect of such
\nwithholding taxes as the Group is able to control the timing of the distributions and it is probable that the timing di\ufb00erences will not reverse in the
foreseeable future.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfDeferredTaxesExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f41517": {
"value": "C8 Share capital, share premium and own shares Shares are classi\ufb01ed as equity when their terms do not create an obligation to transfer assets. Amounts recorded in share capital represent the
\nnominal value of the shares issued. The di\ufb00erence between the proceeds received on issue of the shares, net of share issue costs, and the nominal
\nvalue of the shares issued, is credited to share premium. Where the Company purchases shares for the purposes of employee incentive plans, the
\nconsideration paid, net of issue costs, is deducted from retained earnings. Upon issue or sale any consideration received is credited to retained
\nearnings net of related costs.
\n2022
2021
\nIssued shares of 5p each fully paid
\nNumber of
\nordinary
\nshares
\nShare
\ncapital
\n$m
\nShare
\npremium
\n$m
\nNumber of
\nordinary
\nshares
\nShare
\ncapital
\n$m
\nShare
\npremium
\n$m
\nBalance at 1 Jan
2,746,412,265
182
5,010
2,609,489,702
173
2,637
\nShares issued under share-based schemes
3,257,115
\u2013
2
6,142,213
\u2013
8
\nShares issued under Hong Kong public o\ufb00er and
\ninternational placing in 2021
\nnote
\n\u2013
\u2013
(6)
130,780,350
9
2,365
\nBalance at 31 Dec
2,749,669,380
182
5,006
2,746,412,265
182
5,010
\nNote
\nIn October 2021, Prudential completed the issuance of new ordinary shares on the Hong Kong Stock Exchange, resulting in net proceeds and an increase in shareholders\u2019 equity of $2.4 billion. The
\nproceeds from this issuance were used to redeem high coupon debt instruments of US$1.3 billion in total in December 2021 and US$1.0 billion in January 2022, with the remainder used to increase
\nPrudential\u2019s central stock of liquidity, as originally intended and disclosed in Prudential\u2019s prospectus for the issuance.
\nOptions outstanding under save as you earn schemes to subscribe for shares at each year end shown below are as follows:
\nNumber of
\nshares to
\nsubscribe for
\nShare price range
\nExercisable by
\nyear
from
to
\n31 Dec 2022
1,858,292
737p
1,455p
2028
\n31 Dec 2021
2,022,535
964p
1,455p
2027
\nTransactions by Prudential plc and its subsidiaries in Prudential plc shares
\nThe Group buys and sells Prudential plc shares (\u2018own shares\u2019) in relation to its employee share schemes. The cost of own shares of $270 million at
\n31 December 2022 (31 December 2021: $267 million) is deducted from retained earnings. The Company has established trusts to facilitate the
\ndelivery of shares under employee incentive plans. At 31 December 2022, 12.6 million (31 December 2021: 11.7 million) Prudential plc shares with
\na market value of $174 million (31 December 2021: $201 million) were held in such trusts, all of which are for employee incentive plans. The
\nmaximum number of shares held during the year was 13.0 million which was in September 2022.
\nWithin the trusts, shares are notionally allocated by business unit re\ufb02ecting the employees to which the awards were made.
\nThe trusts purchased the following number of shares in respect of employee incentive plans:
\n2022
2021
\nNumber
\nof shares
\nShare price
\nCost
\n$
\nNumber
\nof shares
\nShare price
\nCost
\n$
\nLow
\n\u00a3
\nHigh
\n\u00a3
\nLow
\n\u00a3
\nHigh
\n\u00a3
\nJanuary
63,019
12.93
13.14
1,120,889
74,817
14.12
14.48
1,443,158
\nFebruary
65,223
12.43
12.49
1,098,500
69,865
12.42
12.96
1,251,067
\nMarch
73,193
10.37
10.96
1,055,044
55,545
14.91
15.49
1,189,784
\nApril
4,024,410
10.64
11.29
58,880,934
2,438,884
15.45
15.55
52,512,098
\nMay
460,897
8.95
9.05
5,288,807
52,989
15.82
15.96
1,183,836
\nJune
196,180
10.13
11.70
2,402,464
121,472
14.62
14.89
2,508,974
\nJuly
87,338
10.06
10.15
1,052,807
60,473
13.62
13.78
1,145,078
\nAugust
86,540
9.81
9.95
1,029,843
57,004
14.20
14.37
1,128,450
\nSeptember
90,843
9.24
9.73
1,000,619
312,226
14.89
15.24
7,961,098
\nOctober
175,837
9.06
9.30
1,675,634
436,771
14.48
14.99
8,410,274
\nNovember
79,326
8.99
9.04
837,944
53,867
14.77
14.83
1,072,374
\nDecember
95,680
10.63
10.74
1,240,296
76,926
13.20
13.24
1,355,942
\nTotal
5,498,486
76,683,781
3,810,839
81,162,133
\nThe cost in USD shown has been calculated from the share prices in pounds sterling using the monthly average exchange rate for the month in
\nwhich those shares were purchased.
\nA portion of the share purchases in respect of employee incentive plans as shown in the table above were made on the Hong Kong Stock
\nExchange with the remainder being made on the London Stock Exchange.
\nOther than set out above, the Group did not purchase, sell or redeem any Prudential plc listed securities during 2022.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfShareCapitalReservesAndOtherEquityInterestExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f41518": {
"value": "C8 Share capital, share premium and own shares Shares are classi\ufb01ed as equity when their terms do not create an obligation to transfer assets. Amounts recorded in share capital represent the
\nnominal value of the shares issued. The di\ufb00erence between the proceeds received on issue of the shares, net of share issue costs, and the nominal
\nvalue of the shares issued, is credited to share premium. Where the Company purchases shares for the purposes of employee incentive plans, the
\nconsideration paid, net of issue costs, is deducted from retained earnings. Upon issue or sale any consideration received is credited to retained
\nearnings net of related costs.
\n2022
2021
\nIssued shares of 5p each fully paid
\nNumber of
\nordinary
\nshares
\nShare
\ncapital
\n$m
\nShare
\npremium
\n$m
\nNumber of
\nordinary
\nshares
\nShare
\ncapital
\n$m
\nShare
\npremium
\n$m
\nBalance at 1 Jan
2,746,412,265
182
5,010
2,609,489,702
173
2,637
\nShares issued under share-based schemes
3,257,115
\u2013
2
6,142,213
\u2013
8
\nShares issued under Hong Kong public o\ufb00er and
\ninternational placing in 2021
\nnote
\n\u2013
\u2013
(6)
130,780,350
9
2,365
\nBalance at 31 Dec
2,749,669,380
182
5,006
2,746,412,265
182
5,010
\nNote
\nIn October 2021, Prudential completed the issuance of new ordinary shares on the Hong Kong Stock Exchange, resulting in net proceeds and an increase in shareholders\u2019 equity of $2.4 billion. The
\nproceeds from this issuance were used to redeem high coupon debt instruments of US$1.3 billion in total in December 2021 and US$1.0 billion in January 2022, with the remainder used to increase
\nPrudential\u2019s central stock of liquidity, as originally intended and disclosed in Prudential\u2019s prospectus for the issuance.
\nOptions outstanding under save as you earn schemes to subscribe for shares at each year end shown below are as follows:
\nNumber of
\nshares to
\nsubscribe for
\nShare price range
\nExercisable by
\nyear
from
to
\n31 Dec 2022
1,858,292
737p
1,455p
2028
\n31 Dec 2021
2,022,535
964p
1,455p
2027
\nTransactions by Prudential plc and its subsidiaries in Prudential plc shares
\nThe Group buys and sells Prudential plc shares (\u2018own shares\u2019) in relation to its employee share schemes. The cost of own shares of $270 million at
\n31 December 2022 (31 December 2021: $267 million) is deducted from retained earnings. The Company has established trusts to facilitate the
\ndelivery of shares under employee incentive plans. At 31 December 2022, 12.6 million (31 December 2021: 11.7 million) Prudential plc shares with
\na market value of $174 million (31 December 2021: $201 million) were held in such trusts, all of which are for employee incentive plans. The
\nmaximum number of shares held during the year was 13.0 million which was in September 2022.
\nWithin the trusts, shares are notionally allocated by business unit re\ufb02ecting the employees to which the awards were made.
\nThe trusts purchased the following number of shares in respect of employee incentive plans:
\n2022
2021
\nNumber
\nof shares
\nShare price
\nCost
\n$
\nNumber
\nof shares
\nShare price
\nCost
\n$
\nLow
\n\u00a3
\nHigh
\n\u00a3
\nLow
\n\u00a3
\nHigh
\n\u00a3
\nJanuary
63,019
12.93
13.14
1,120,889
74,817
14.12
14.48
1,443,158
\nFebruary
65,223
12.43
12.49
1,098,500
69,865
12.42
12.96
1,251,067
\nMarch
73,193
10.37
10.96
1,055,044
55,545
14.91
15.49
1,189,784
\nApril
4,024,410
10.64
11.29
58,880,934
2,438,884
15.45
15.55
52,512,098
\nMay
460,897
8.95
9.05
5,288,807
52,989
15.82
15.96
1,183,836
\nJune
196,180
10.13
11.70
2,402,464
121,472
14.62
14.89
2,508,974
\nJuly
87,338
10.06
10.15
1,052,807
60,473
13.62
13.78
1,145,078
\nAugust
86,540
9.81
9.95
1,029,843
57,004
14.20
14.37
1,128,450
\nSeptember
90,843
9.24
9.73
1,000,619
312,226
14.89
15.24
7,961,098
\nOctober
175,837
9.06
9.30
1,675,634
436,771
14.48
14.99
8,410,274
\nNovember
79,326
8.99
9.04
837,944
53,867
14.77
14.83
1,072,374
\nDecember
95,680
10.63
10.74
1,240,296
76,926
13.20
13.24
1,355,942
\nTotal
5,498,486
76,683,781
3,810,839
81,162,133
\nThe cost in USD shown has been calculated from the share prices in pounds sterling using the monthly average exchange rate for the month in
\nwhich those shares were purchased.
\nA portion of the share purchases in respect of employee incentive plans as shown in the table above were made on the Hong Kong Stock
\nExchange with the remainder being made on the London Stock Exchange.
\nOther than set out above, the Group did not purchase, sell or redeem any Prudential plc listed securities during 2022.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfIssuedCapitalExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f41522": {
"value": "Shares are classi\ufb01ed as equity when their terms do not create an obligation to transfer assets. Amounts recorded in share capital represent the nominal value of the shares issued. The di\ufb00erence between the proceeds received on issue of the shares, net of share issue costs, and the nominal
\nvalue of the shares issued, is credited to share premium. Where the Company purchases shares for the purposes of employee incentive plans, the
\nconsideration paid, net of issue costs, is deducted from retained earnings. Upon issue or sale any consideration received is credited to retained
\nearnings net of related costs.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForIssuedCapitalExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f41526": {
"value": "Where the Company purchases shares for the purposes of employee incentive plans, the consideration paid, net of issue costs, is deducted from retained earnings. Upon issue or sale any consideration received is credited to retained
earnings net of related costs.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForTreasurySharesExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f41607": {
"value": "Transactions by Prudential plc and its subsidiaries in Prudential plc shares The Group buys and sells Prudential plc shares (\u2018own shares\u2019) in relation to its employee share schemes. The cost of own shares of $270 million at
\n31 December 2022 (31 December 2021: $267 million) is deducted from retained earnings. The Company has established trusts to facilitate the
\ndelivery of shares under employee incentive plans. At 31 December 2022, 12.6 million (31 December 2021: 11.7 million) Prudential plc shares with
\na market value of $174 million (31 December 2021: $201 million) were held in such trusts, all of which are for employee incentive plans. The
\nmaximum number of shares held during the year was 13.0 million which was in September 2022.
\nWithin the trusts, shares are notionally allocated by business unit re\ufb02ecting the employees to which the awards were made.
\nThe trusts purchased the following number of shares in respect of employee incentive plans:
\n2022
2021
\nNumber
\nof shares
\nShare price
\nCost
\n$
\nNumber
\nof shares
\nShare price
\nCost
\n$
\nLow
\n\u00a3
\nHigh
\n\u00a3
\nLow
\n\u00a3
\nHigh
\n\u00a3
\nJanuary
63,019
12.93
13.14
1,120,889
74,817
14.12
14.48
1,443,158
\nFebruary
65,223
12.43
12.49
1,098,500
69,865
12.42
12.96
1,251,067
\nMarch
73,193
10.37
10.96
1,055,044
55,545
14.91
15.49
1,189,784
\nApril
4,024,410
10.64
11.29
58,880,934
2,438,884
15.45
15.55
52,512,098
\nMay
460,897
8.95
9.05
5,288,807
52,989
15.82
15.96
1,183,836
\nJune
196,180
10.13
11.70
2,402,464
121,472
14.62
14.89
2,508,974
\nJuly
87,338
10.06
10.15
1,052,807
60,473
13.62
13.78
1,145,078
\nAugust
86,540
9.81
9.95
1,029,843
57,004
14.20
14.37
1,128,450
\nSeptember
90,843
9.24
9.73
1,000,619
312,226
14.89
15.24
7,961,098
\nOctober
175,837
9.06
9.30
1,675,634
436,771
14.48
14.99
8,410,274
\nNovember
79,326
8.99
9.04
837,944
53,867
14.77
14.83
1,072,374
\nDecember
95,680
10.63
10.74
1,240,296
76,926
13.20
13.24
1,355,942
\nTotal
5,498,486
76,683,781
3,810,839
81,162,133
\nThe cost in USD shown has been calculated from the share prices in pounds sterling using the monthly average exchange rate for the month in
\nwhich those shares were purchased.
\nA portion of the share purchases in respect of employee incentive plans as shown in the table above were made on the Hong Kong Stock
\nExchange with the remainder being made on the London Stock Exchange.
Other than set out above, the Group did not purchase, sell or redeem any Prudential plc listed securities during 2022.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfTreasurySharesExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f41779": {
"value": "C9 Provisions 31 Dec 2022
\n$m
\n31 Dec 2021
\n$m
\nSta\ufb00 bene\ufb01ts provisions
\nnote (i)
\n341
355
\nOther provisions
7
17
\nTotal provisions
\nnote (ii)
\n348
372
\nNotes
\n(i)
Provisions for sta\ufb00 bene\ufb01ts are generally expected to be paid out within the next three years.
\n(ii)
Analysis of movement in total provisions is shown below:
\n2022
$m
2021
$m
\nBalance at 1 Jan
372
350
\nRemoval of discontinued US operations
\u2013
(14)
\nCharged (credited) to income statement:
\nAdditional provisions
231
263
\nUnused amounts released
(20)
(15)
\nUtilisation during the year
(221)
(204)
\nExchange di\ufb00erences
(14)
(8)
\nBalance at 31 Dec
348
372 ",
"dimensions": {
"concept": "ifrs-full:DisclosureOfProvisionsExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f41829": {
"value": "C10 Capital C10.1 Group objectives, policies and processes for managing capital
\n(a) Capital measure
\nThe Group manages its Group GWS capital resources as its measure of capital. At 31 December 2022, estimated Group shareholder GWS capital
\nresources is $23.2 billion (31 December 2021: $25.5 billion). The impacts of regulatory updates, estimated as at 31 December 2021, and
\n$1.7 billion debt redemption in January 2022, are included within the 31 December 2021 capital resources.
\n(b) External capital requirements
\nPrudential plc is subject to the Group-wide Supervision (GWS) Framework issued by the Hong Kong Insurance Authority (IA).
\nPrudential applies the Insurance (Group Capital) Rules set out in the GWS Framework to determine group regulatory capital requirements (both
\nminimum and prescribed levels). The summation of local statutory capital requirements across the Group is used to determine group regulatory
\ncapital requirements, with no allowance for diversi\ufb01cation between business operations. The GWS eligible group capital resources are determined
\nby the summation of capital resources across local solvency regimes for regulated entities and IFRS shareholders\u2019 equity, with adjustments where
\napplicable, for non-regulated entities.
\nThe recent trend to more risk-based capital regimes being adopted in many of the Group\u2019s markets is continuing and this impacts on the Group\u2019s
\nGWS capital measure, which is underpinned by the local regulatory regimes of the Group\u2019s subsidiaries, joint ventures and associates. C-ROSS
\nPhase II became e\ufb00ective in the Chinese Mainland in the \ufb01rst quarter of 2022 and, in April 2022, Prudential Hong Kong Limited received approval
\nfrom the Hong Kong IA to early adopt the new risk-based capital regime (HK RBC) e\ufb00ective from 1 January 2022.
\nMore details on Group capital are given in section I(i) in the Additional unaudited \ufb01nancial information section.
\n(c) Meeting of capital management objectives
\nThe GWS group capital adequacy requirements have been met since the GWS Framework became e\ufb00ective for Prudential upon designation. This
\nincludes maintaining total eligible group capital resources in excess of the Group Prescribed Capital Requirement (GPCR) of the supervised group
\nand maintaining Tier 1 group capital resources in excess of the Group Minimum Capital Requirement (GMCR) of the supervised group.
\nThe Group\u2019s capital management framework focuses on achieving sustainable, pro\ufb01table growth and maintaining a resilient balance sheet,
\nwith a disciplined approach to active capital allocation. As well as holding su\ufb03cient capital to meet GWS requirements at Group level, the Group
\nalso closely manages the cash it holds within its central holding companies so that it can:
\n>
Fund new opportunities;
\n>
Maintain \ufb02exibility and absorb shock events;
\n>
Cover central costs; and
\n>
Fund dividends.
\nMore details on holding company cash \ufb02ows and balances are given in section I(v) in the Additional unaudited \ufb01nancial information section.
\nThe Group monitors regulatory capital, economic capital and rating agency capital metrics and manages the business within its risk appetite by
\nremaining within its economic and regulatory capital limits. Reserve adequacy testing under a range of scenarios and dynamic solvency testing is
\ncarried out, including under certain scenarios mandated by the local regulators.
\nThe sensitivity of liabilities and other components of total capital vary depending upon the type of business concerned and this conditions the
\napproach to asset/liability management.
\n336
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prudentialplc.com
C10.2 Local capital regulations
\n(a) Insurance operations
\nFor regulated insurance entities, the capital resources and required capital included in the GWS capital measure for Hong Kong IA Group
\nregulatory purposes are based on the local solvency regime applicable in each jurisdiction. The local valuation basis for the assets, liabilities and
\ncapital requirements of signi\ufb01cant insurance operations are:
\nCPL
\nA risk-based capital, risk management and governance framework, known as the China Risk Oriented Solvency System (C-ROSS), applies in the
\nChinese Mainland. Under C-ROSS, insurers are required to maintain a core solvency ratio (core capital over minimum capital) and a comprehensive
\nsolvency ratio (capital resources over minimum capital) of not lower than 50 per cent and 100 per cent, respectively.
\nThe actual capital is the di\ufb00erence between the admitted assets and admitted liabilities with trading and AFS assets marked-to-market and
\nother assets at book value. Policyholder liabilities are based on a gross premium valuation method using best estimate assumptions with a
\nseparate risk margin.
\nThe \ufb01nal regulations of C-ROSS Phase II became e\ufb00ective in the \ufb01rst quarter of 2022. The main updates to the local regulation were to
\nintroduce explicit tiering and admissibility rules on negative reserves in the capital resources and further updates to the risk calibrations used in
\ncalculating capital requirements.
\nHong Kong
\nIn April 2022, Prudential Hong Kong Limited received approval from the Hong Kong IA to early adopt the new risk-based capital regime (HK RBC)
\ne\ufb00ective from 1 January 2022. The HK RBC framework requires liabilities to be based on a gross premium valuation method using best estimate
\nassumptions and capital requirements to be risk-based, resulting in the release of prudent regulatory margins previously included in liabilities and
\nan increase in required capital.
\nIndonesia
\nSolvency capital is determined using a risk-based capital approach. The capital resources are based on assets that are marked-to-market, with
\npolicyholder liabilities based on a gross premium valuation method using best estimate assumptions with a suitable margin for prudence.
\nLiabilities are zeroised at policy level (ie negative liabilities are not permitted at a policy level). For unit-linked policies, an unearned premium
\nreserve is established.
\nMalaysia
\nA risk-based capital framework applies in Malaysia. The local regulator, Bank Negara Malaysia (BNM), has set a Supervisory Target Capital Level of
\n130 per cent, below which supervisory actions of increasing intensity will be taken. Each insurer is also required to set its own Individual Target
\nCapital Level to re\ufb02ect its own risk pro\ufb01le and this is expected to be higher than the Supervisory Target Capital Level.
\nThe capital resources are based on assets that are marked-to-market, with policyholder liabilities based on a gross premium valuation method
\nusing best estimate assumptions with a suitable margin for prudence. Liabilities are zeroised at a fund level (ie negative liabilities are not
\npermitted at a fund level). The BNM has initiated a review of its RBC framework and a discussion paper on the design of the updated RBC
\nframework was issued on 30 June 2021 with industry feedback provided by 30 September 2021. The BNM have yet to issue their \ufb01nal technical
\nspeci\ufb01cations and the exact timing of implementation of potential revisions remains uncertain as these would need to be subject to quantitative
\nimpact studies and parallel run prior to introduction.
\nMarket liberalisation measures were introduced by BNM in April 2009, which increases the limit from 49 per cent to 70 per cent on foreign
\nequity ownership for insurance companies and Takaful operators in Malaysia. A higher foreign equity limit beyond 70 per cent for insurance
\ncompanies will be considered by BNM on a case by case basis, for example, for companies who support expansion of providing insurance coverage
\nto the most vulnerable in Malaysian society.
\nSingapore
\nA risk-based capital framework applies in Singapore. The local regulator, Monetary Authority of Singapore (MAS), has the authority to direct
\ninsurance companies to satisfy additional capital adequacy requirements in addition to those set forth under the Singapore Insurance Act, if
\nconsidered appropriate. The capital resources are based on assets that are marked-to-market, with policyholder liabilities based on a gross
\npremium valuation method using best estimate assumptions with a suitable margin for prudence. The updated risk-based capital framework
\n(RBC2) permits the recognition of a prudent allowance for negative reserves in the capital resources.
\n(b) Asset management operations \u2013 regulatory and other surplus
\nCertain asset management subsidiaries of the Group are subject to local regulatory requirements. The movement in the year of the estimated
\nsurplus regulatory capital position (over the GPCR) of those subsidiaries, combined with the movement in the IFRS basis shareholders\u2019 equity for
\nunregulated asset management operations, is as follows:
\n2022
$m
2021
$m
\nBalance at 1 Jan
522
453
\nGains during the year
187
266
\nMovement in capital requirement
15
3
\nCapital injection
3
6
\nDistributions made to the parent company
(214)
(201)
\nExchange and other movements
(47)
(5)
\nBalance at 31 Dec
466
522
\n337
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Annual Report 2022
\nGroup overview
Strategic report
Governance
Directors\u2019 remuneration report
European Embedded Value (EEV) basis results
Additional information
Financial statements
C Financial position
/ continued
\nC10 Capital
continued
\nC10.3 Transferability of capital resources
\nThe amounts retained within the insurance companies are at levels that provide an appropriate level of capital strength in excess of the local
\nregulatory minimum capital requirements. The businesses may, in general, remit dividends to parent entities, provided the statutory insurance
\nfund meets the local regulatory solvency requirements and there are su\ufb03cient statutory accounting pro\ufb01ts. For with-pro\ufb01ts funds, the excess of
\nassets over liabilities is retained within the funds, with distribution to shareholders tied to the shareholders\u2019 share of declared bonuses.
\nCapital resources of the non-insurance business units are transferable after taking account of an appropriate level of operating capital, based
\non local regulatory solvency requirements, where relevant.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfObjectivesPoliciesAndProcessesForManagingCapitalExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f41992": {
"value": "C11 Property, plant and equipment Property, plant and equipment comprise Group occupied properties and tangible assets. Property, plant and equipment also includes right-of-use
\nassets for operating leases of properties occupied by the Group and leases of equipment and other tangible assets. All property, plant and
\nequipment, including the right-of-use assets under operating leases, are held at cost less cumulative depreciation, calculated using the straight-line
\nmethod, and impairment charge.
\nA reconciliation of the carrying amount of the Group\u2019s property, plant and equipment from the beginning to the end of the years shown is as
\nfollows:
\n2022
$m
2021
$m
\nGroup
\noccupied
\nproperty
\nTangible
\nassets
\nRight-of-
\nuse assets
Total
\nGroup
\noccupied
\nproperty
\nTangible
\nassets
\nRight-of-
\nuse assets
Total
\nBalance at 1 Jan
\nCost
33
489
678
1,200
355
707
710
1,772
\nAccumulated depreciation
(10)
(349)
(363)
(722)
(88)
(523)
(268)
(879)
\nOpening net book amount
23
140
315
478
267
184
442
893
\nRemoval of discontinued US operations
\u2013
\u2013
\u2013
\u2013
(242)
(32)
(35)
(309)
\nAdditions
\u2013
34
49
83
\u2013
36
59
95
\nDepreciation and impairment charge
\u2013
(39)
(106)
(145)
(1)
(45)
(123)
(169)
\nDisposals, transfers and lease modi\ufb01cations
\u2013
(2)
26
24
\u2013
\u2013
(22)
(22)
\nE\ufb00ect of movements in exchange rates
(1)
(7)
(13)
(21)
(1)
(3)
(6)
(10)
\nBalance at 31 Dec
22
126
271
419
23
140
315
478
\nRepresenting:
\nCost
32
486
676
1,194
33
489
678
1,200
\nAccumulated depreciation
(10)
(360)
(405)
(775)
(10)
(349)
(363)
(722)
\nClosing net book amount
22
126
271
419
23
140
315
478
\nRight-of-use assets
\nThe Group does not have any right-of-use assets that would meet the de\ufb01nition of investment property. As at 31 December 2022, total right-of-
\nuse assets comprised $267 million (31 December 2021: $311 million) of property and $4 million (31 December 2021: $4 million) of non-property
\nassets. Of the $271 million (31 December 2021: $315 million) total right-of-use assets, $105 million (31 December 2021: $128 million) were held by
\nthe Group\u2019s with-pro\ufb01ts businesses.
\nExtension and termination options are included in a number of property and equipment leases across the Group. These are used to maximise
\noperational \ufb02exibility in terms of managing the assets used in the Group\u2019s operations. The majority of extension and termination options held are
\nexercisable only by the Group and not by the respective lessor. The Group assesses at lease commencement whether it is reasonably certain to
\nexercise the option. This assertion is revisited if there is a material change in circumstances. As at 31 December 2022, the undiscounted value of
\nlease payments beyond the break period not recognised in the lease liabilities is $189 million (31 December 2021: $201 million).
\nThe Group has non-cancellable property subleases which have been classi\ufb01ed as operating leases under IFRS 16. The sublease rental income
\nreceived in 2022 for the leases is $6 million (2021: $6 million).
\n338
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Annual Report 2022
prudentialplc.com
Tangible assets
\nAt 31 December 2022, of the $126 million (31 December 2021: $140 million) tangible assets, $53 million (31 December 2021: $63 million) were
\nheld by the Group\u2019s with-pro\ufb01ts businesses.
\nCapital expenditure: property, plant and equipment by segment
\nThe capital expenditure on property, plant and equipment in 2022 of $34 million (2021: $36 million) arose as follows:
\n2022
$m
2021
$m
\nHong Kong
11
9
\nIndonesia
1
1
\nMalaysia
1
2
\nSingapore
3
1
\nGrowth markets and other
16
19
\nEastspring
2
3
\nTotal segment
34
35
\nUnallocated to a segment (central operations)
\u2013
1
\nTotal capital expenditure on property, plant and equipment
34
36",
"dimensions": {
"concept": "ifrs-full:DisclosureOfPropertyPlantAndEquipmentExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f41996": {
"value": "Property, plant and equipment comprise Group occupied properties and tangible assets. Property, plant and equipment also includes right-of-use assets for operating leases of properties occupied by the Group and leases of equipment and other tangible assets. All property, plant and
\nequipment, including the right-of-use assets under operating leases, are held at cost less cumulative depreciation, calculated using the straight-line
\nmethod, and impairment charge.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForLeasesExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f41997": {
"value": "Property, plant and equipment comprise Group occupied properties and tangible assets. Property, plant and equipment also includes right-of-use assets for operating leases of properties occupied by the Group and leases of equipment and other tangible assets. All property, plant and
\nequipment, including the right-of-use assets under operating leases, are held at cost less cumulative depreciation, calculated using the straight-line
\nmethod, and impairment charge.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForPropertyPlantAndEquipmentExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f42007": {
"value": "All property, plant and equipment, including the right-of-use assets under operating leases, are held at cost less cumulative depreciation, calculated using the straight-line
method, and impairment charge.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForDepreciationExpenseExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f42260": {
"value": "D1.2 Discontinued US operations
\nOn 13 September 2021, the Group completed the separation of its US operations (Jackson) through a demerger. In accordance with IFRS 5
\n\u2018Non-current Assets Held for Sale and Discontinued Operations\u2019, the US operations were classi\ufb01ed as discontinued. The 2021 income statement
\nincluded the results of Jackson up to 13 September 2021, the date of demerger.
\nThe retained interest in Jackson is reported within the Consolidated statement of \ufb01nancial position as a \ufb01nancial investment at fair value and is
\nincluded in \u2018Unallocated to a segment (central operations)\u2019 for segmental analysis. This investment has been classi\ufb01ed as available-for-sale under
\nIAS 39. During 2022, transactions reduced the Group\u2019s holding to 9.2 per cent (both voting and economic interest) at 31 December 2022
\n(31 December 2021: 18.4 per cent economic interest with 18.5 per cent voting interest). The fair value of the Group\u2019s holding at 31 December 2022
\nwas $266 million (31 December 2021: $683 million).
\nThe results for the discontinued US operations presented in the consolidated \ufb01nancial statements up to the demerger in September 2021 are
\nanalysed below.
\n(a) Income statement
\n2021
$m
\nTotal revenue, net of reinsurance
45,972
\nTotal charge, net of reinsurance
(43,655)
\nPro\ufb01t before tax
2,317
\nTax charge
(363)
\nPro\ufb01t after tax
1,954
\nRemeasurement to fair value
\nnote (i)
\n(8,259)
\nCumulative valuation movements on available-for-sale debt securities, net of related tax and change in DAC, and net investment hedges
\nrecycled from other comprehensive income
\nnote (ii)
\n1,278
\nLoss for the year
(5,027)
\nAttributable to:
\nEquity holders of the Company
(4,234)
\nNon-controlling interests
(793)
\nLoss for the year
(5,027)
\nNotes
\n(i)
The loss on remeasurement to fair value on demerger was recognised in accordance with IFRIC 17 \u2018Distributions of non-cash assets to owners\u2019 with the fair value determined with reference to the
\nopening quoted price of Jackson shares on the New York Stock Exchange as at the date of demerger on 13 September 2021.
\n(ii)
In accordance with IFRS, as a result of the demerger of Jackson, accumulated balances previously recognised through other comprehensive income relating to \ufb01nancial instruments held by
\nJackson classi\ufb01ed as available-for-sale and historical net investment hedges were recycled from other comprehensive income to the results of discontinued operations in the Consolidated income
\nstatement. Total shareholders\u2019 equity is unchanged as a result of this recycling.
\n340
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(b) Total comprehensive income
\n2021
$m
\nLoss for the year
(5,027)
\nOther comprehensive loss:
\nValuation movements on available-for-sale debt securities, net of related tax and change in DAC
(763)
\nCumulative valuation movements on available-for-sale debt securities, net of related tax and change in DAC, and net investment hedges
\nrecycled through pro\ufb01t or loss at the point of demerger
(1,278)
\nOther comprehensive loss for the year
(2,041)
\nTotal comprehensive loss for the year
(7,068)
\nAttributable to:
\nEquity holders of the Company
(6,283)
\nNon-controlling interests
(785)
\nTotal comprehensive loss for the year
(7,068)
\n(c) Cash \ufb02ows
\n2021
$m
\nNet cash \ufb02ows from operating activities
(423)
\nNet cash \ufb02ows from \ufb01nancing activities
\nnote
\n2,329
\nCash divested upon demerger
(3,527)
\nNet decrease in cash and cash equivalents
(1,621)
\nCash and cash equivalents at 1 Jan
1,621
\nCash and cash equivalents at 31 Dec
\u2013
\nNote
\nFinancing activities in 2021 largely re\ufb02ected the issuance of debt of $2,350 million. No dividends were paid by Jackson during 2021 prior to demerger.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfDiscontinuedOperationsExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f42261": {
"value": "D1.2 Discontinued US operations
\nOn 13 September 2021, the Group completed the separation of its US operations (Jackson) through a demerger. In accordance with IFRS 5
\n\u2018Non-current Assets Held for Sale and Discontinued Operations\u2019, the US operations were classi\ufb01ed as discontinued. The 2021 income statement
\nincluded the results of Jackson up to 13 September 2021, the date of demerger.
\nThe retained interest in Jackson is reported within the Consolidated statement of \ufb01nancial position as a \ufb01nancial investment at fair value and is
\nincluded in \u2018Unallocated to a segment (central operations)\u2019 for segmental analysis. This investment has been classi\ufb01ed as available-for-sale under
\nIAS 39. During 2022, transactions reduced the Group\u2019s holding to 9.2 per cent (both voting and economic interest) at 31 December 2022
\n(31 December 2021: 18.4 per cent economic interest with 18.5 per cent voting interest). The fair value of the Group\u2019s holding at 31 December 2022
\nwas $266 million (31 December 2021: $683 million).
\nThe results for the discontinued US operations presented in the consolidated \ufb01nancial statements up to the demerger in September 2021 are
\nanalysed below.
\n(a) Income statement
\n2021
$m
\nTotal revenue, net of reinsurance
45,972
\nTotal charge, net of reinsurance
(43,655)
\nPro\ufb01t before tax
2,317
\nTax charge
(363)
\nPro\ufb01t after tax
1,954
\nRemeasurement to fair value
\nnote (i)
\n(8,259)
\nCumulative valuation movements on available-for-sale debt securities, net of related tax and change in DAC, and net investment hedges
\nrecycled from other comprehensive income
\nnote (ii)
\n1,278
\nLoss for the year
(5,027)
\nAttributable to:
\nEquity holders of the Company
(4,234)
\nNon-controlling interests
(793)
\nLoss for the year
(5,027)
\nNotes
\n(i)
The loss on remeasurement to fair value on demerger was recognised in accordance with IFRIC 17 \u2018Distributions of non-cash assets to owners\u2019 with the fair value determined with reference to the
\nopening quoted price of Jackson shares on the New York Stock Exchange as at the date of demerger on 13 September 2021.
\n(ii)
In accordance with IFRS, as a result of the demerger of Jackson, accumulated balances previously recognised through other comprehensive income relating to \ufb01nancial instruments held by
\nJackson classi\ufb01ed as available-for-sale and historical net investment hedges were recycled from other comprehensive income to the results of discontinued operations in the Consolidated income
\nstatement. Total shareholders\u2019 equity is unchanged as a result of this recycling.
\n340
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(b) Total comprehensive income
\n2021
$m
\nLoss for the year
(5,027)
\nOther comprehensive loss:
\nValuation movements on available-for-sale debt securities, net of related tax and change in DAC
(763)
\nCumulative valuation movements on available-for-sale debt securities, net of related tax and change in DAC, and net investment hedges
\nrecycled through pro\ufb01t or loss at the point of demerger
(1,278)
\nOther comprehensive loss for the year
(2,041)
\nTotal comprehensive loss for the year
(7,068)
\nAttributable to:
\nEquity holders of the Company
(6,283)
\nNon-controlling interests
(785)
\nTotal comprehensive loss for the year
(7,068)
\n(c) Cash \ufb02ows
\n2021
$m
\nNet cash \ufb02ows from operating activities
(423)
\nNet cash \ufb02ows from \ufb01nancing activities
\nnote
\n2,329
\nCash divested upon demerger
(3,527)
\nNet decrease in cash and cash equivalents
(1,621)
\nCash and cash equivalents at 1 Jan
1,621
\nCash and cash equivalents at 31 Dec
\u2013
\nNote
\nFinancing activities in 2021 largely re\ufb02ected the issuance of debt of $2,350 million. No dividends were paid by Jackson during 2021 prior to demerger.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfNoncurrentAssetsHeldForSaleAndDiscontinuedOperationsExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f42373": {
"value": "D2 Contingencies and related obligations Litigation and regulatory matters
\nThe Group is involved in various litigation and regulatory proceedings. While the outcome of such litigation and regulatory issues cannot be
\npredicted with certainty, the Group believes that their ultimate outcome will not have a material adverse e\ufb00ect on the Group\u2019s \ufb01nancial condition,
\nresults of operations, or cash \ufb02ows.
\nGuarantees
\nThe Group has provided guarantees and commitments to third parties entered into in the normal course of business and the Company has
\nguaranteed public debt securities issued by one of its wholly-owned subsidiaries, Prudential Funding (Asia) PLC from early 2023. The Group
\nconsiders the likelihood of out\ufb02ows arising under such guarantees and commitments as remote.
\nIntra-group capital support arrangements
\nPrudential has put in place intra-group arrangements to formalise undertakings by Prudential to the regulators of the Hong Kong subsidiaries
\nregarding their solvency levels. Other intra-group transactions are discussed in note D4 below.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfContingentLiabilitiesExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f42374": {
"value": "D2 Contingencies and related obligationsLitigation and regulatory matters
\nThe Group is involved in various litigation and regulatory proceedings. While the outcome of such litigation and regulatory issues cannot be
\npredicted with certainty, the Group believes that their ultimate outcome will not have a material adverse e\ufb00ect on the Group\u2019s \ufb01nancial condition,
\nresults of operations, or cash \ufb02ows.
\nGuarantees
\nThe Group has provided guarantees and commitments to third parties entered into in the normal course of business and the Company has
\nguaranteed public debt securities issued by one of its wholly-owned subsidiaries, Prudential Funding (Asia) PLC from early 2023. The Group
\nconsiders the likelihood of out\ufb02ows arising under such guarantees and commitments as remote.
\nIntra-group capital support arrangements
\nPrudential has put in place intra-group arrangements to formalise undertakings by Prudential to the regulators of the Hong Kong subsidiaries
\nregarding their solvency levels. Other intra-group transactions are discussed in note D4 below.
D5 Commitments The Group has provided, from time to time, certain commitments to third parties.
\nAt 31 December 2022, the Group had $2,626 million unfunded commitments (31 December 2021: $2,878 million) primarily related to
investments in infrastructure funds and alternative investment funds in Asia.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfCommitmentsAndContingentLiabilitiesExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f42390": {
"value": "D3 Post balance sheet events Dividends
\nThe 2022 second interim dividend approved by the Board of Directors after 31 December 2022 is as described in note B5.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfEventsAfterReportingPeriodExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f42419": {
"value": "D4 Related party transactions Transactions between the Company and its subsidiaries or intra-group transactions are eliminated on consolidation. Intra-group transactions of
\nthe Group mainly related to a limited number of loans, guarantees or services provided by the Company to or from others business units, or
\nbetween business units, including investment management services provided by the Group\u2019s asset managers to the insurance operations
\nbusinesses as shown in note B1.3. All intra-group transactions are subject to the same internal approval framework as external transactions. As the
\nGroup\u2019s business units operate independently, overall there is limited interconnectedness across the Group. The Group reviews its recovery plan
\n(that also covers intra-group transactions and the level of the Group\u2019s interconnectivity risk) on an annual basis and details the remedial actions
\nthat could be used to restore \ufb01nancial strength and viability if the Group were to come under severe stress.
\nThe Company has transactions and outstanding balances with collective investment schemes and similar entities that are not consolidated
\nand where a Group company acts as manager, which are regarded as related parties for the purposes of IAS 24. The balances are included in the
\nGroup\u2019s statement of \ufb01nancial position at fair value or amortised cost in accordance with IAS 39 classi\ufb01cations with the corresponding amounts
\nincluded in the income statement. The transactions include amounts paid on issue of shares or units, amounts received on cancellation of shares
\nor units and amounts paid in respect of the periodic charge and administration fee.
\nIn addition, there are no material transactions between the Group\u2019s joint ventures and associates, which are accounted for on an equity method
\nbasis, and other Group companies.
\nKey management personnel of the Company, as described in note B2.3, may from time to time purchase insurance, asset management or
\nannuity products marketed by Group companies in the ordinary course of business on substantially the same terms as those prevailing at the time
\nfor comparable transactions with other persons.
\nIn 2022, transactions with key management personnel were not deemed to be signi\ufb01cant both by virtue of their size and in the context of the
\nindividuals\u2019 \ufb01nancial positions. All of these transactions were on terms broadly equivalent to those that prevailed in arm\u2019s-length transactions.
\nOn 5 April 2021, pursuant to a separation agreement, Jackson National Life agreed to pay circa $23.5 million to Michael Falcon, the former
\nchief executive o\ufb03cer of Jackson, as a series of cash lump sum payments for termination of loss of o\ufb03ce, and agreed that Mr Falcon would retain
\n98,311 Prudential ADRs that had been previously deferred under the Deferred Annual Incentive Plan. Prudential agreed to reimburse Jackson
\nNational Life for such payments and settled this obligation prior to the demerger on 13 September 2021. On completion of the demerger, the
\nPrudential ADRs were translated into Jackson Shares with an equivalent value. They will be released on the original timeline, ie in 2022 and 2023,
\nand remain subject to the original malus and clawback provisions. Other transactions with those individuals meeting the de\ufb01nition of key
\nmanagement personnel in 2021 were not deemed to be signi\ufb01cant using the criteria described above.
\nAdditional details on the Directors\u2019 interests in shares, transactions or arrangements are given in the Directors\u2019 remuneration report. Key
\nmanagement remuneration is disclosed in note B2.3.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForTransactionsWithRelatedPartiesExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f42453": {
"value": "D5 Commitments The Group has provided, from time to time, certain commitments to third parties.
\nAt 31 December 2022, the Group had $2,626 million unfunded commitments (31 December 2021: $2,878 million) primarily related to
investments in infrastructure funds and alternative investment funds in Asia.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfCommitmentsExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f42464": {
"value": "D6 Investments in subsidiary undertakings, joint ventures and associates D6.1
Basis of consolidation
\nThe Group consolidates those investees it is deemed to control. The Group has control over an investee if all three of the followings are met: (1) it
\nhas power over an investee; (2) it is exposed to, or has rights to, variable returns from its involvement with the investee; and (3) it has the ability to
\nuse its power over the investee to a\ufb00ect its own returns.
\n(a) Subsidiaries
\nSubsidiaries are those investees that the Group controls. The majority of the Group\u2019s subsidiaries are corporate entities.
\nThe Group performs a re-assessment of consolidation whenever there is a change in the substance of the relationship between the Group and
\nan investee. Where the Group is deemed to control an entity, it is treated as a subsidiary and its results, assets and liabilities are consolidated.
\nWhere the Group holds a minority share in an entity with no control over the entity, the investments are carried at fair value within \ufb01nancial
\ninvestments in the Consolidated statement of \ufb01nancial position.
\nEntities consolidated by the Group include Qualifying Partnerships as de\ufb01ned under the UK Partnerships (Accounts) Regulations 2008 (the
\n\u2018Partnerships Act\u2019). The Group\u2019s limited partnership has taken advantage of the exemption under regulation 7 of the Partnerships Act from the
\n\ufb01nancial statement requirements. This is under regulations 4 to 6, on the basis that the limited partnership is dealt with on a consolidated basis in
\nthese \ufb01nancial statements.
\n342
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(b) Joint ventures and associates
\nJoint ventures are joint arrangements arising from a contractual agreement whereby the Group and other investors have joint control of the net
\nassets of the arrangement. In a number of these arrangements, the Group\u2019s share of the underlying net assets may be less than 50 per cent but
\nthe terms of the relevant agreement make it clear that control is jointly exercised between the Group and the third party. Associates are entities
\nover which the Group has signi\ufb01cant in\ufb02uence but does not control. Generally, it is presumed that the Group has signi\ufb01cant in\ufb02uence if it holds
\nbetween 20 per cent and 50 per cent voting rights of an entity.
\nWith the exception of those referred to below, the Group accounts for its investments in joint ventures and associates using the equity method
\nof accounting. The Group\u2019s share of pro\ufb01t or loss of its joint ventures and associates is recognised in the income statement and its share of
\nmovements in other comprehensive income is recognised in other comprehensive income. The equity method of accounting does not apply to
\ninvestments in joint ventures and associates held by the Group\u2019s insurance or investment funds, including collective investment schemes which, as
\nallowed by IAS 28 \u2018Investments in Associates and Joint Ventures\u2019, are carried at fair value through pro\ufb01t or loss.
\n(c) Structured entities
\nStructured entities are those that have been designed so that voting or similar rights are not the dominant factor in deciding who controls the
\nentity. Voting rights relate to administrative tasks. Relevant activities are directed by means of contractual arrangements. The Group invests in
\nboth consolidated and unconsolidated structured entities including investment vehicles such as collective investment schemes, collateralised debt
\nobligations, mortgage-backed securities and similar asset-backed securities.
\nCollective investment schemes
\nThe Group invests in collective investment schemes that invest mainly in equities, bonds, cash and cash equivalents and properties. In assessing
\ncontrol under IFRS 10 \u2018Consolidated Financial Statements\u2019, the Group determines whether it is acting as principal or agent and the variable returns
\nfrom its involvement with these entities. The Group\u2019s percentage ownership in these entities can \ufb02uctuate on a daily basis according to the
\nparticipation of the Group and other investors.
\nWhere the entity is managed by a Group asset manager:
\n>
Where the Group\u2019s ownership holding in the entity exceeds 50 per cent, the Group is judged to have control over the entity;
\n>
Where the Group\u2019s ownership holding in the entity is between 20 per cent and 50 per cent, the facts and circumstances of the Group\u2019s
\ninvolvement in the entity are considered, including the rights to any fees earned by the asset manager, in forming a judgement as to whether
\nthe Group has control over the entity;
\n>
Where the Group\u2019s ownership holding in the entity is less than 20 per cent, the Group is judged to not have control over the entity.
\nWhere the entity is managed by an asset manager outside the Group, an assessment is made of whether the Group has existing rights that gives
\nit the ability to direct the current activities of the entity and therefore control the entity. In assessing the Group\u2019s ability to direct an entity, the
\nGroup considers its ability relative to other investors.
\nWhere the Group is deemed to control an entity, it is treated as a subsidiary and is consolidated, with the interests of investors other than the
\nGroup being classi\ufb01ed as liabilities, and presented within \u2018Net asset value attributable to unit holders of consolidated investment funds\u2019.
\nWhere the Group does not control these entities (where the Group is deemed to be acting as an agent under IFRS 10) and they do not meet the
\nde\ufb01nition of associates, they are carried at FVTPL within \ufb01nancial investments in the Consolidated statement of \ufb01nancial position.
\nWhere the Group\u2019s asset manager sets up investment funds as part of its asset management operations, unless the Group also participates in
\nthe ownership holding of the entities, the Group\u2019s interest is limited to the fees charged to manage the assets of such entities. With no
\nparticipation in ownership holding of these entities, the Group does not retain risks associated with investment funds. For these investment funds,
\nthe Group is not deemed to control the entities but deemed to be acting as an agent.
\nThe Group generates returns and retains the ownership risks in these investment vehicles commensurate to its participation and does not have
\nany further exposure to the residual risks of these investment vehicles.
\nOther structured entities
\nThe Group holds investments in mortgage-backed securities, collateralised debt obligations and similar asset-backed securities, the majority of
\nwhich are actively traded in a liquid market.
\nThe Group consolidates the vehicles that hold the investments where the Group is deemed to control the vehicles. When assessing control over
\nthe vehicles, the factors considered include the purpose and design of the vehicle, the Group\u2019s exposure to the variability of returns and the scope
\nof the Group\u2019s ability to direct the relevant activities of the vehicle including any kick-out or removal rights that are held by third parties. The
\noutcome of the control assessment is dependent on the terms and conditions of the respective individual arrangements.
\nThe majority of such vehicles are not consolidated. In these cases, the Group is not the sponsor of the vehicles in which it holds investments and
\nhas no administrative rights over the vehicles\u2019 activities. The Group generates returns and retains the ownership risks commensurate to its holding
\nand its exposure to the investments and does not have any further exposure to the residual risks or losses of the investments or the vehicles in
\nwhich it holds investments. Accordingly, the Group does not have power over the relevant activities of such vehicles and all are carried at FVTPL
\nwithin \ufb01nancial investments in the Consolidated statement of \ufb01nancial position.
\n343
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Annual Report 2022
\nGroup overview
Strategic report
Governance
Directors\u2019 remuneration report
European Embedded Value (EEV) basis results
Additional information
Financial statements
D Other information
/ continued
\nD6 Investments in subsidiary undertakings, joint ventures and associates
continued
\nD6.1
Basis of consolidation
continued
\nThe table below provides aggregate carrying amounts of the investments in unconsolidated structured entities reported in the Group\u2019s
\nConsolidated statement of \ufb01nancial position:
\nConsolidated statement of \ufb01nancial position line items
\n31 Dec 2022
$m
31 Dec 2021
$m
\nInvestment
\nfunds
\nOther
\nstructured
\nentities
Investment
\nOther
\nstructured
\nentities
\nEquity securities and holdings in collective investment schemes
30,771
\u2013
35,446
\u2013
\nDebt securities
\u2013
370
\u2013
251
\nTotal investments in unconsolidated structured entities
30,771
370
35,446
251
\nThe Group\u2019s maximum exposure to loss related to the interest in unconsolidated structured entities is limited to the carrying value in the
\nConsolidated statement of \ufb01nancial position and the unfunded investment commitments provided by the Group (see note D5).
\nDuring the year, the Group receives dividend and interest income from its investments in these unconsolidated structured entities. Where the
\nGroup\u2019s asset manager manages these entities, such as the collective investment schemes, the Group also receives asset management fees from
\nthese entities.
\nAs at 31 December 2022 and 2021, the Group does not have an agreement, contractual or otherwise, or intention to provide \ufb01nancial support
\nto structured entities (both consolidated and unconsolidated) that could expose the Group to a loss.
\nD6.2
Dividend restrictions and minimum capital requirements
\nCertain Group entities are subject to restrictions on the amounts of funds they may transfer in the form of cash dividends or otherwise to the
\nparent company.
\nUnder UK company law, UK companies can only declare dividends if they have su\ufb03cient distributable reserves.
\nThe Group\u2019s subsidiaries, joint ventures and associates may remit dividends to the Group, in general, provided the statutory insurance fund
\nmeets the capital adequacy standard required under local statutory regulations and has su\ufb03cient distributable reserves. Further details on local
\ncapital regulations in certain Asia operations are provided in note C10.2.
\nD6.3
Investments in joint ventures and associates
\nJoint ventures represent arrangements where the controlling parties through contractual or other agreement have the rights to the net assets of
\nthe arrangements. The Group has insurance and asset management joint ventures in Chinese Mainland with CITIC Group and an asset
\nmanagement joint venture in India with ICICI Bank. In addition, there is an asset management joint venture in Hong Kong with Bank of China
\nInternational Holdings Limited (BOCI) and Takaful insurance joint venture in Malaysia. For the Group\u2019s joint ventures that are accounted for using
\nthe equity method, the net-of-tax results of these operations are included in the Group\u2019s pro\ufb01t before tax.
\nThe Group\u2019s associates, which are also accounted for using the equity method, include the Indian insurance entity (with the majority
\nshareholder being ICICI Bank).
\nIn addition, the Group has investments in collective investment schemes, funds holding collateralised debt obligations and property funds
\nwhere the Group has signi\ufb01cant in\ufb02uence. As allowed under IAS 28, these investments are accounted for on a FVTPL basis. The aggregate fair
\nvalue of associates accounted for at fair value through pro\ufb01t or loss, where there are published price quotations, is approximately $0.3 billion at
\n31 December 2022 (31 December 2021: $0.6 billion).
\nFor joint ventures and associates accounted for using the equity method, the 12 months \ufb01nancial information of these investments for the
\nyears ended 31 December 2022 and 2021 (covering the same period as that of the Group) has been used in these consolidated \ufb01nancial
\nstatements.
\nThe Group\u2019s share of the pro\ufb01t for shareholder-backed business (including short-term \ufb02uctuations in investment returns), net of related tax, in
\njoint ventures and associates equity accounted for as shown in the Consolidated income statement, is allocated across segments as follows:
\n2022
$m
2021
$m
\nCPL
(144)
278
\nHong Kong
\u2013
9
\nMalaysia
24
28
\nGrowth markets and other
\nnote
\n5
(110)
\nInsurance operations
(115)
205
\nEastspring
144
147
\nTotal segment and Group total
29
352
\nNote
\nFor growth markets and other, as well as the segment results for associates and joint ventures within the segment, the amount shown includes other items of $15 million (2021: $(38) million) which
\nprimarily comprise of taxes for all life joint ventures and associates together with other non-recurring items.
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There is no other comprehensive income in the joint ventures and associates other than the foreign exchange di\ufb00erences that arise from
\ntranslating the associates and joint ventures into the Group\u2019s presentational currency. There has been no unrecognised share of losses of a joint
\nventure or associate that the Group has stopped recognising in total comprehensive income.
\nThe Group\u2019s interest in joint ventures and associates gives rise to no contingent liabilities or capital commitments that are material to the Group.
\nCITIC-Prudential Life Insurance Company (CPL)
\nCPL is the Group\u2019s joint venture with the CITIC Group in which the Group owns a 50 per cent interest. The joint venture is incorporated in China and
\nis principally engaged in underwriting insurance and investment contracts. The summarised \ufb01nancial information for CPL, which is considered to
\nbe a material joint venture to the Group, is set out below. The \ufb01nancial information represents the entity\u2019s \ufb01nancial statements prepared in
\naccordance with Group\u2019s IFRS accounting policies, on a 100 per cent basis, for the years shown:
\nStatement of \ufb01nancial position:
\n31 Dec 2022
\n$m
\n31 Dec 2021
\n$m
\nTotal assets
31,608
29,237
\nTotal liabilities (including non-controlling interest)
29,330
26,523
\nShareholders\u2019 equity
2,278
2,714
\nThe above amounts of assets and liabilities include the following:
\nCash and cash equivalents
561
422
\nFinancial liabilities (excluding trade and other payables and provisions)
985
938
\nIncome statement:
2022
$m
2021
$m
\nRevenue
5,778
7,374
\nPro\ufb01t for the year after tax
(248)
453
\nThe above pro\ufb01t for the year includes the following:
\nDepreciation and amortisation
(106)
(86)
\nInterest income
599
465
\nInterest expense
(3)
(2)
\nIncome tax credit (charge)
40
(84)
\nThe summarised \ufb01nancial information above is reconciled to the carrying amount of the Group\u2019s interest in the joint venture recognised in the
\nconsolidated \ufb01nancial statements as follows:
\n31 Dec 2022
\n$m
\n31 Dec 2021
\n$m
\nNet assets of CITIC-Prudential Life as shown above
2,278
2,714
\nProportion owned by the joint venture partner (50%)
1,139
1,357
\nCarrying amount of the Group\u2019s interest in the joint venture (50%)
1,139
1,357
\nThe Group has received no dividends from CPL in 2022 (2021: $57 million).
\n345
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\nGroup overview
Strategic report
Governance
Directors\u2019 remuneration report
European Embedded Value (EEV) basis results
Additional information
Financial statements
D Other information
/ continued
\nD6 Investments in subsidiary undertakings, joint ventures and associates
continued
\nD6.4 Related undertakings
\nIn accordance with Section 409 of the Companies Act 2006, a list of Prudential Group\u2019s subsidiaries, joint ventures, associates and signi\ufb01cant
\nholdings (being holdings of more than 20 per cent) is disclosed below, along with the classes of shares held, the registered o\ufb03ce address and the
\ne\ufb00ective percentage of equity owned at 31 December 2022. The Group also operates through branches, none of which are signi\ufb01cant.
\nThe de\ufb01nitions of a subsidiary undertaking, joint venture and associate in accordance with the Companies Act 2006 are di\ufb00erent from the
\nde\ufb01nition under IFRS Standards. As a result, the related undertakings included within the list below may not be the same as the undertakings
\nconsolidated in the Group consolidated \ufb01nancial statements. The Group\u2019s consolidation policy is described in note D6.1.
\nCITIC-
\nPrudential
\nLife Insurance
\nCompany
\nLimited
\n\u2020
\n(CPL
\n)*
\nPT. Prudential
\nLife Assurance
\n(Indonesia)
\n\u2020
\nPrudential
\nAssurance
\nCompany
\nSingapore (Pte)
\nLimited
\n\u2020
\nGrowth markets
\nand other
\nentities
\n\u2020
\n(including Africa,
\nCambodia, India,
\nLaos, Myanmar,
\nPhilippines,
\nTaiwan, Thailand,
\nVietnam)
\nPrudential
\nHong Kong
\nLimited
\nPrudential
\nGeneral
\nInsurance Hong
\nKong Limited
\nPrudential
\nAssurance
\nMalaysia
\nBerhad
\n\u2020
\nEastspring
\nInvestments
\nGroup Pte. Ltd.
\n\u2020
\nand subsidiaries
\nPrudential
\nInternational
\nTreasury
\nLimited
\nPrudential plc
\nPrudential Corporation Asia Limited
\nPrudential Group Holdings Limited
\nand subsidiaries
\n* CPL is a joint venture with CITIC, a leading state owned conglomerate.
\n\u2020 Indirectly held by Prudential Corporation Asia Limited.
\nDirect subsidiary undertakings of the parent company, Prudential plc (shares held directly or via nominees)
\nName of entity
\nClasses of
\nshares held
\nProportion
\nheld
Registered o\ufb03ce address
\nPrudential Corporation Asia Limited
OS
100.00%
13th Floor, One International Finance Centre, 1 Harbour View Street, Central, Hong Kong
\nPrudential Group Holdings Limited
OS
100.00%
1 Angel Court, London, EC2R 7AG, United Kingdom
\nOther subsidiaries, joint ventures, associates and signi\ufb01cant holdings of the Group \u2013 no shares held directly by the parent company (Prudential plc)
\nor its nominees
\nName of entity
\nClasses of
\nshares held
\nProportion
\nheld
Registered o\ufb03ce address
\nAberdeen Cash Creation Fund
U
30.62%
28th Floor Bangkok City Tower, 179 South Sathorn Road, Thungmahamek, Sathorn,
\nBangkok 10120, Thailand
\nAberdeen Standard Global Opportunities Fund
U
34.61%
21 Church Street, #01-01, Capital Square Two, Singapore 049480
\nAberdeen Standard Singapore Equity Fund
U
62.18%
\nAC Financial Partners Limited Partnership
PI
100.00%
65 Haymarket Terrace, Edinburgh, EH12 5HD
\nAlternatives North America, Ltd.
U
100.00%
PO Box 1093, Queensgate House, Grand Cayman, KY1-1102, Cayman Islands
\nBOCHK Aggressive Growth Fund
U
47.75%
27th Floor, Bank of China Tower, 1 Garden Road, Hong Kong
\nBOCHK Balanced Growth Fund
U
41.47%
\nBOCHK China Equity Fund
U
73.71%
\nBOCHK Conservative Growth Fund
U
42.71%
\nBOCHK US Dollar Money Market Fund
U
21.91%
\nBOCI-Prudential Asset Management Limited
OS
36.00%
\nBOCI-Prudential Trustee Limited
OS
36.00%
Suites 1501-1507 & 1513-1516, 15th Floor, 1111 King's Road, Taikoo Shing, Hong Kong
\nCathay High Yield Ex China Cash Pay 1-5 Year 2% Issuer
\nCapped ETF
\nU
42.71%
6th Floor, No.39, Sec.2, Dunhua South. Road, Taipei, Taiwan
\nCITIC-CP Asset Management Co., Ltd.
MI - JV
26.95%
Room 101-2, No.128 North Zhangjiabang Road, Pudong District, Shanghai, China
\nCITIC-Prudential Fund Management Company Limited
MI - JV
49.00%
Level 9, HSBC Building, Shanghai IFC, 8 Century Avenue, Pudong, Shanghai, China
\nCITIC-Prudential Life Insurance Company Limited
MI - JV
50.00%
Room 1101-A, 1201, 1301, 1401, 1501, 1601, 1701, 1801, Unit 01, Building 1, No. B2, North
\nRoad of East Third Ring Road, Chaoyang District, Beijing, PRC,100027, China
\nEastspring Al-Wara' Investments Berhad
OS
100.00%
Level 25, Menara Hong Leong, No. 6 Jalan Damanlela, Bukit Damansara, 50490 Kuala
\nLumpur, Malaysia
\nEastspring Asia Paci\ufb01c High Yield Equity Fund
U
37.57%
4th Floor, No.1, Songzhi Road, Xinyi Dist., Taipei, Taiwan
\n346
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Name of entity
\nClasses of
\nshares held
\nProportion
\nheld
Registered o\ufb03ce address
\nEastspring Asset Management (Thailand) Co., Ltd.
OS
59.50%
944 Mitrtown O\ufb03ce Tower, 9th Floor, Rama 4 Road, Wangmai, Pathumwan, Bangkok
\n10330, Thailand
\nEastspring Asset Management Korea Co. Ltd.
OS
100.00%
22nd Floor (Seoul International Finance Center, Yeouido dong), 10 Gukjegeumyung-ro,
\nYeongdeungpo-gu, Seoul, Republic of Korea 07326
\nEastspring Investment K-Short Term Bond Alpha Securities
\nInvestment Trust(Bond Balanced)
\nU
27.54%
22nd Floor One IFC, 10 Gukjegeumyung-ro, Youngdungpo-gu, Seoul 07326, Korea
\nEastspring Investment Management (Shanghai) Company
\nLimited
\nMI - WFOE
100.00%
Unit 306-308, 3rd Floor, Azia Center, 1233 Lujiazui Ring Road, China (Shanghai) Pilot Free
\nTrade Zone, China
\nEastspring Investments - Asia Opportunities Equity Fund
U
99.97%
26, Boulevard Royal, L-2449, Luxembourg
\nEastspring Investments - Global Growth Equity Fund
U
59.04%
\nEastspring Investments - Global Low Volatility Equity Fund
U
96.36%
\nEastspring Investments - Global Technology Fund
U
82.06%
\nEastspring Investments - Pan European Fund
U
61.34%
\nEastspring Investments - US High Yield Bond Fund
U
46.85%
\nEastspring Investments - US Investment Grade Bond Fund
U
68.91%
\nEastspring Investments - World Value Equity Fund
U
95.64%
\nEastspring Investments (Hong Kong) Limited
OS
100.00%
13th Floor, One International Finance Centre, 1 Harbour View Street, Central, Hong Kong
\nEastspring Investments (Luxembourg) S.A.
OS
100.00%
26, Boulevard Royal, L-2449 Luxembourg, Grand Duchy of Luxembourg
\nEastspring Investments (Singapore) Limited
OS
100.00%
10 Marina Boulevard, #32-01, Marina Bay Financial Centre, Singapore 018983
\nEastspring Investments Asia Paci\ufb01c Equity Fund
U
93.92%
26, Boulevard Royal, L-2449, Luxembourg
\nEastspring Investments Asia Paci\ufb01c ex-Japan Target Return
\nFund
\nU
75.84%
Eastspring Investments Berhad, Level 22, Menara Prudential, Persiaran TRX Barat, 55188
\nTun Razak Exchange, Kuala Lumpur, Malaysia
\nEastspring Investments Asia Real Estate Multi Asset Income
\nFund
\nU
73.95%
26, Boulevard Royal, L-2449, Luxembourg
\nEastspring Investments Asia Sustainable Bond Fund
U
93.97%
\nEastspring Investments Asian Bond Fund
U
42.30%
\nEastspring Investments Asian Dynamic Fund
U
91.58%
\nEastspring Investments Asian Equity Fund
U
98.97%
\nEastspring Investments Asian Equity Income Fund
U
87.52%
\nEastspring Investments Asian High Yield Bond Fund
U
44.35%
\nEastspring Investments Asian Investment Grade Bond Fund
U
90.06%
\nEastspring Investments Asian Low Volatility Equity Fund
U
89.01%
\nEastspring Investments Asian Multi Factor Equity Fund
U
90.94%
\nEastspring Investments Berhad
OS
100.00%
Level 25, Menara Hong Leong, No. 6 Jalan Damanlela, Bukit Damansara, 50490 Kuala
\nLumpur, Wilayah Persekutuan, Malaysia
\nEastspring Investments China A Shares Growth Fund
U
63.69%
26, Boulevard Royal, L-2449, Luxembourg
\nEastspring Investments Dragon Peacock Fund
U
95.82%
\nEastspring Investments Emerging Markets Star Players
U
40.88%
Eastspring Investments Limited, Marunouchi Park Bldg., 2-6-1 Marunochi, Chiyoda-ku,
\nTokyo, Japan 100-6905
\nEastspring Investments Equity Income Fund
U
40.95%
Eastspring Investments Berhad, Level 22, Menara Prudential, Persiaran TRX Barat, 55188
\nTun Razak Exchange, Kuala Lumpur, Malaysia
\nEastspring Investments European Investment Grade Bond
\nFund
\nU
99.91%
26, Boulevard Royal, L-2449, Luxembourg
\nEastspring Investments Fund Management Limited
\nLiability Company
\nMI
100.00%
23rd Floor, Saigon Trade Center, 37 Ton Duc Thang Street, District 1, Ho Chi Minh City,
\nVietnam
\nEastspring Investments Global Emerging Markets Bond
\nFund
\nU
99.38%
26, Boulevard Royal, L-2449, Luxembourg
\nEastspring Investments Global Emerging Markets Dynamic
\nFund
\nU
62.79%
\nEastspring Investments Global Emerging Markets ex-China
\nDynamic Fund
\nU
99.96%
\nEastspring Investments Global Equity Navigator Fund
U
97.19%
\nEastspring Investments Global Growth Fund
U
40.22%
Eastspring Investments Berhad, Level 22, Menara Prudential, Persiaran TRX Barat, 55188
\nTun Razak Exchange, Kuala Lumpur, Malaysia
\nEastspring Investments Global Market Navigator Fund
U
99.75%
26, Boulevard Royal, L-2449, Luxembourg
\nEastspring Investments Global Multi Asset Income Plus
\nGrowth Fund
\nU
100.00%
\nEastspring Investments Greater China Equity Fund
U
90.60%
\nEastspring Investments Group Pte. Ltd.
OS
100.00%
10 Marina Boulevard, #32-01, Marina Bay Financial Centre, Singapore 018983
\nEastspring Investments Incorporated
OS
100.00%
874 Walker Road, Suite C, City of Dover, County of Kent, State of Delaware, 19904, USA
\nEastspring Investments India Consumer Equity Open
\nLimited
\nOS
100.00%
3rd Floor, 355 NEX, Rue du Savoir, Cybercity Ebene 72201, Mauritius
\nEastspring Investments India Equity Fund
U
79.97%
26, Boulevard Royal, L-2449, Luxembourg
\nEastspring Investments India Equity Open Limited
OS
100.00%
3rd Floor, 355 NEX, Rue du Savoir, Cybercity Ebene 72201, Mauritius
\nEastspring Investments India Infrastructure Equity Open
\nLimited
\nOS
100.00%
\nKey to share classes:
\nLBG
Limited by Guarantee
\nMI
Membership Interest
\nMI - WFOE
Membership Interest of a Wholly Foreign Owned Enterprise in the Chinese Mainland
\nMI \u2013 JV
Membership Interest of a Sino-Foreign Equity Joint Venture in the Chinese Mainland
\nOS
Ordinary Shares
\nPI
Partnership Interest
\nPS
Preference Shares
\nU
Units
\n347
Prudential plc
Annual Report 2022
\nGroup overview
Strategic report
Governance
Directors\u2019 remuneration report
European Embedded Value (EEV) basis results
Additional information
Financial statements
D Other information
/ continued
\nName of entity
\nClasses of
\nshares held
\nProportion
\nheld
Registered o\ufb03ce address
\nEastspring Investments Limited
OS
100.00%
Marunouchi Park Building, 6-1 Marunouchi 2-chome, Chiyoda-Ku, Tokyo, Japan
\nEastspring Investments MY Focus Fund
U
28.33%
Eastspring Investments Berhad, Level 22, Menara Prudential, Persiaran TRX Barat, 55188
\nTun Razak Exchange, Kuala Lumpur, Malaysia
\nEastspring Investments Private Fixed Income Fund Number 1
U
87.11%
Units 306-308, 3rd Floor, Azia Center 1233 Lujiazui Ring Road, Shanghai, China
\nEastspring Investments Services Pte. Ltd.
OS
100.00%
10 Marina Boulevard, #32-01, Marina Bay Financial Centre, Singapore 018983
\nEastspring Investments SICAV-FIS \u2013 Alternative
\nInvestments Fund
\nU
100.00%
26, Boulevard Royal, L-2449, Luxembourg
\nEastspring Investments SICAV-FIS \u2013 Asia Paci\ufb01c Loan Fund
U
100.00%
\nEastspring Investments Syariah Equity Islamic Asia Paci\ufb01c
\nUSD Kelas B
\nU
88.02%
Prudential Tower, 23rd Floor, Jl. Jend. Sudirman Kav.79, Jakarta 12910, Indonesia
\nEastspring Investments Unit Trusts - Dragon Peacock Fund
U
97.69%
10 Marina Boulevard, #32-01, Marina Bay Financial Centre, Singapore 018983
\nEastspring Investments Unit Trusts Singapore ASEAN
\nEquity Fund
\nU
98.74%
\nEastspring Investments Unit Trusts Singapore Select Bond
\nFund
\nU
66.05%
\nEastspring Investments US Corporate Bond Fund
U
60.04%
26, Boulevard Royal, L-2449, Luxembourg
\nEastspring Investments US High Investment Grade Bond
\nFund
\nU
87.42%
\nEastspring Investments Vietnam Navigator Fund
U
76.79%
23rd Floor, Saigon Trade Center Building, 37 Ton Duc Thang Street, Ben Nghe Ward,
\nDistrict 1, Ho Chi Minh City, Vietnam
\nEastspring Investments-Global Emerging Markets
\nFundamental Value Fund
\nU
99.96%
26, Boulevard Royal, L-2449, Luxembourg
\nEastspring Investments-Japan Sustainable Value Fund
U
100.00%
\nEastspring Overseas Investment Fund Management
\n(Shanghai) Company Limited
\nMI - WFOE
100.00%
Unit 306-308, 3rd Floor, 1233 Lujiazui Ring Road, China (Shanghai) Pilot Free Trade Zone,
\nChina
\nEastspring Private Equity Fund 2
U
99.99%
10 Marina Boulevard, #32-01, Marina Bay Financial Centre Tower 2, Singapore 018983
\nEastspring Securities Investment Trust Co., Ltd.
OS
99.54%
4th Floor, No.1 Songzhi Road, Taipei 110, Taiwan
\nEastspring Singapore Alternatives VCC
U
100.00%
10 Marina Boulevard, #32-01, Marina Bay Financial Centre, Singapore 018983
\nEastspring Syariah Fixed Income USD Kelas A
U
69.23%
Prudential Tower Lantai 23, JI. Jend. Sudirman Kav. 79, Jakarta 12910, Indonesia
\nFCP Ecobank Actions Uemoa
U
43.63%
Immeuble Ecobank, 2Er Etage -Avenue Houdaille Plateau, 01 B.P 4107 Abidjan O1 Cote
\nD\u2019Ivoire
\nFirst Sentier Global Property Securities Fund
U
67.50%
79 Robinson Road, #17-01, Singapore 068897
\nFSSA China Focus Fund
U
67.76%
70 Sir John Rogerson\u2019s Quay, Dublin 2, D02 R296, Ireland
\nFubon 1-5 Years US High Yield Bond Ex China
U
61.05%
8th Floor, No.108, Sec.1, Dunhua South. Road, Taipei, Taiwan
\nFubon China Bond Umbrella Fund - Fubon China Quality
\nRmb Bond Fund
\nU
23.37%
\nFubon China Currency Fund
U
35.49%
\nFuh Hwa 1-5 Yr High Yield ETF
U
44.22%
8th & 9th Floor, No.308, Sec. 2, Bade Road, Da-an District
\nFuh Hwa Emerging Market RMB Fixed Income Fund
U
46.42%
\nFuh Hwa Rmb Money Market Fund
U
37.52%
\nFurnival Insurance Company PCC Limited
OS
100.00%
PO Box 155, Mill Court, La Charroterie, St Peter Port, GY1 4ET, Guernsey
\nGIS Total Return Bond Fund
U
27.53%
78 Sir John Rogerson's Quay, Dublin, D02 HD32, Ireland
\nGS Twenty Two Limited
OS
100.00%
1 Angel Court, London, EC2R 7AG, United Kingdom
\nHSBC Asia Paci\ufb01c Ex Japan Sustainable Equity UCITS ETF
U
63.65%
25/28 North Wall Quay, IFSC, Dublin 1, Ireland
\nHSBC Senior Global Infrastructure Debt Fund
U
100.00%
8 Canada Square, London, E14 5HQ, United Kingdom
\nICICI Prudential Asset Management Company Limited
OS
49.00%
12th Floor, Narain Manzil, 23, Barakhamba Road, New Delhi 110001, India
\nICICI Prudential Life Insurance Company Limited
OS
22.07%
ICICI PruLife Towers, 1089 Appasaheb Marathe Marg, Prabhadevi,
\nMumbai 400025, India
\nICICI Prudential Pension Funds Management Company
\nLimited
\nOS
22.07%
\nICICI Prudential Trust Limited
OS
49.00%
12th Floor, Narain Manzil, 23, Barakhamba Road, New Delhi 110001, India
\nIndia Innovation High Growth EQ QII
U
100.00%
Eastspring Investments Limited, Marunouchi Park Bldg., 2-6-1 Marunochi, Chiyoda-ku,
\nTokyo, Japan 100-6905
\nInvesco Fixed Maturity Selective Emerging Market Bonds
\n2024
\nU
100.00%
8th Floor, No 122, Tung Hua N. Rd. Taipei, Taiwan
\nInvesco Select 6 Year Maturity Global Bond Fund
U
100.00%
\niShares Core MSCI Asia
U
61.46%
15th, 16th, 17th Floor, Champion Tower & 17th Floor ICBC Tower, Three Garden Road,
\nCentral, Hong Kong
\niShares Global High Yield Corp Bond UCITS ETF
U
65.61%
200 Capital Dock, 79 Sir John Rogerson\u2019s Quay, Dublin 2, Ireland
\niShares MSCI Europe ESG Enhanced UCITS ETF
U
51.34%
12 Throgmorton Avenue, London, EC2N 2DL
\niShares MSCI Korea UCITS ETF USD (Acc)
U
53.66%
200 Capital Dock, 79 Sir John Rogerson\u2019s Quay, Dublin 2, Ireland
\nD6 Investments in subsidiary undertakings, joint ventures and associates
continued
\nD6.4 Related undertakings
continued
\nDirect subsidiary undertakings of the parent company, Prudential plc (shares held directly or via nominees)
continued
\n348
Prudential plc
Annual Report 2022
prudentialplc.com
Name of entity
\nClasses of
\nshares held
\nProportion
\nheld
Registered o\ufb03ce address
\niShares MSCI USA ESG Enhanced UCITS ETF
U
41.86%
12 Throgmorton Avenue, London, EC2N 2DL
\nKKP Active Equity Fund
U
35.38%
19th Floor Muang Thai-Phatra Complex, Building Tower, A, 252/25 Ratchadapisek Road,
\nHuaykwang, Bangkok 10310, Thailand
\nKrungsri Greater China Equity Hedged Dividend Fund
U
31.10%
12th, 18th Zone B Floor, Ploenchit Tower 898 Ploenchit Road, Lumpini Pathumwan,
\nBangkok 10330, Thailand
\nLasalle Property Securities SICAV-FIS
U
99.97%
11-13 Bouldevard de la Foire, L-1528 Luxembourg
\nM&G Asia Property Trust
U
100.00%
138 Market Street, CapitaGreen #35-01, Singapore 048946
\nM&G Real Estate Asia Holding Company Pte. Ltd.
OS
33.00%
138 Market Street, #35-01 CapitaGreen, Singapore 048946
\nManulife Asia Paci\ufb01c Bond Fund
U
57.81%
9th Floor, No 89 Son Ren Road, Taipei, Taiwan
\nManulife China Dim Sum High Yield Bond Fund
U
22.54%
\nManulife China O\ufb00shore Bond Fund
U
85.22%
\nManulife Taiwan Dynamic Fund
U
20.53%
\nManulife USD High Yield Bond Fund
U
29.47%
\nNomura Six Years Fixed Maturity Asia Paci\ufb01c Emerging
\nMarket Bond Fund
\nU
100.00%
101 Tower, 30th Floor, No. 7 Sec. 5, Xinyi Rd., Xinyi Dist., Taipei, Taiwan
\nNomura Six Years Fixed Maturity Emerging Market Bond
\nFund
\nU
41.88%
\nNomura Six Years Ladder Maturity Asia Paci\ufb01c Emerging
\nMarket Bond Fund
\nU
97.86%
\nNorth Sathorn Holdings Company Limited
OS
100.00%
No. 63, Athenee Tower, 34th Floor, Wireless Road, Lumpini Subdistrict Pathumwan District,
\nBangkok Metropolis, Thailand
\nPCA IP Services Limited
OS
100.00%
13th Floor, One International Finance Centre, 1 Harbour View Street, Central, Hong Kong
\nPCA Life Assurance Co., Ltd.
OS
99.79%
8th Floor, No.1 Songzhi Road, Taipei City, 11047, Taiwan
\nPCA Reinsurance Co. Ltd.
OS
100.00%
Unit Level 13(A), Main O\ufb03ce Tower, Financial Park Labuan, Jalan Merdeka, 87000 Federal
\nTerritory of Labuan, Malaysia
\nPineBridge US Dual Core Income Fund
U
37.37%
10th Floor, No. 144, Sec. 2, Minquan East Rd, Taipei
\nPrincipal Global Silver Age Fund
U
22.89%
44, 16th Floor, CIMB Thai Bank, Lungsuan Road, Lumpini, Bangkok 10330, Thailand
\nPru Life Insurance Corporation of U.K.
OS
100.00%
9th Floor, Uptown Place Tower 1, 1 East 11th Drive, Uptown Bonifacio, 1634 Taguig City,
\nMetro Manila, Philippines
\nPru Life UK Asset Management and Trust Corporation
OS
100.00%
\nPrudence Foundation
LBG
100.00%
13th Floor, One International Finance Centre, 1 Harbour View Street, Central, Hong Kong
\nPrudential (Cambodia) Life Assurance Plc
OS
100.00%
Phnom Penh Tower, 20th Floor, #445, Monivong Blvd., Boeung Prolit, 7 Makara, Phnom
\nPenh, Cambodia
\nPrudential (US Holdco 1) Limited
OS
100.00%
1 Angel Court, London, EC2R 7AG, United Kingdom
\nPrudential Africa Holdings Limited
OS
100.00%
\nPrudential Africa Services Limited
OS
100.00%
3rd Floor, One Africa Place, LR. No. 1870/X/45, P.O. Box 25093-00100, Westlands, Nairobi,
\nKenya
\nPrudential Assurance Company Singapore (Pte) Limited
OS
100.00%
30 Cecil Street, #30-01 Prudential Tower, Singapore 049712
\nPrudential Assurance Malaysia Berhad
\n*
\nOS
51.00%
Level 26, Menara Prudential, Persiaran TRX Barat, 55188 Tun Razak Exchange, Kuala
\nLumpur, Malaysia
\nPrudential Assurance Uganda Limited
OS
100.00%
9th Floor Zebra Plaza, Plot 23 Kampala Road, P.O. Box 2660, Kampala, Uganda
\nPrudential BeGeneral Insurance C\u00f4te d'Ivoire S.A.
OS
51.00%
Abidjan Plateau, Avenue Nogu\u00e8s, Immeuble Woodin Center, 1er \u00e9tage, 01 P.O. BOX 5173,
\nAbidjan 01, C\u00f4te d'Ivoire
\nPrudential Belife Insurance C\u00f4te d'Ivoire S.A.
OS
51.00%
\nPrudential Bene\ufb01cial General Insurance Cameroon S.A.
OS
50.71%
1944, Boulevard de la R\u00e9publique Douala-Akwa, P.O. BOX 2328, Douala, Cameroon
\nPrudential Bene\ufb01cial Life Insurance Cameroon S.A.
OS
51.00%
\nPrudential Bene\ufb01cial Life Insurance Togo S.A.
OS
50.99%
2963 Rue de la Chance Agbalepedogan, P.O. Box 1115, Lome, Togo
\nPrudential BSN Takaful Berhad
\n\u2020
\nOS
49.00%
Level 13, Menara Prudential, Persiaran TRX Barat, 55188 Tun Razak Exchange, Kuala
\nLumpur, Malaysia
\nPrudential Corporation Holdings Limited
OS
100.00%
1 Angel Court, London, EC2R 7AG, United Kingdom
\nPrudential Financial Advisers Singapore Pte. Ltd.
OS
100.00%
30 Cecil Street, #30-01 Prudential Tower, Singapore 049712
\nPrudential Financial Partners (Asia) Limited
OS
100.00%
1 Angel Court, London, EC2R 7AG, England, United Kingdom
\nPrudential Financial Partners HK Limited
OS
100.00%
13th Floor, One International Finance Centre, 1 Harbour View Street, Central, Hong Kong
\nPrudential General Insurance Hong Kong Limited
OS
100.00%
59th Floor, One Island East, 18 Westlands Road, Quarry Bay, Hong Kong
\nPrudential Group Secretarial Services HK Limited
OS
100.00%
13th Floor, One International Finance Centre, 1 Harbour View Street, Central, Hong Kong
\nPrudential Group Secretarial Services Limited
OS
100.00%
1 Angel Court, London, EC2R 7AG, United Kingdom
\nPrudential Holdings Limited
OS
100.00%
4th Floor, Saltire Court, 20, Castle Terrace, Edinburgh, EH1 2EN, United Kingdom
\nPrudential Hong Kong Limited
OS
100.00%
59th Floor, One Island East, 18 Westlands Road, Quarry Bay, Hong Kong
\nPrudential International Treasury Limited
OS
100.00%
13th Floor, One International Finance Centre, 1 Harbour View Street, Central, Hong Kong
\nPrudential IP Services Limited
OS
100.00%
1 Angel Court, London, EC2R 7AG, United Kingdom
\nPrudential Life Assurance (Lao) Company Limited
OS
100.00%
5th Floor, Lao international Business and Tourist Center Project (Vientiane Center),
\nKhouvieng Road, Nongchan Village, Sisattanak District, Vientiane Capital, Lao PDR
\nPrudential Life Assurance (Thailand) Public Company
\nLimited
\nOS
99.93%
944 Mitrtown O\ufb03ce Tower, 10th, 29th-31st Floor, Rama 4 Road, Wangmai, Pathumwan,
\nBangkok, 10330, Thailand
\nPrudential Life Assurance Kenya Limited
OS
100.00%
Vienna Court, Ground Floor, State House Crescent, O\ufb00 State House Avenue, P.O. Box
\n25093-00603, Nairobi, Kenya
\nPrudential Life Assurance Zambia Limited
OS
100.00%
Prudential House, Plot No. 32256, Thabo Mbeki Road, P.O. Box 31357, Lusaka, Zambia
\nKey to share classes:
\nLBG
Limited by Guarantee
\nMI
Membership Interest
\nMI - WFOE
Membership Interest of a Wholly Foreign Owned Enterprise in the Chinese Mainland
\nMI \u2013 JV
Membership Interest of a Sino-Foreign Equity Joint Venture in the Chinese Mainland
\nOS
Ordinary Shares
\nPI
Partnership Interest
\nPS
Preference Shares
\nU
Units
\n349
Prudential plc
Annual Report 2022
\nGroup overview
Strategic report
Governance
Directors\u2019 remuneration report
European Embedded Value (EEV) basis results
Additional information
Financial statements
D Other information
/ continued
\nName of entity
\nClasses of
\nshares held
\nProportion
\nheld
Registered o\ufb03ce address
\nPrudential Life Insurance Ghana Limited
OS
100.00%
H/NO. 35, Opp. Hobats Clinic, North Street, Tesano, Accra, Accra Metropolitan, Greater
\nAccra, P.O. Box AN 10476, Ghana
\nPrudential Life Vault Limited
OS
100.00%
48 Awolowo Road, South-West Ikoyi, Lagos, Nigeria
\nPrudential Mauritius Holdings Limited
OS
100.00%
3rd Floor, 355 NEX, Rue du Savoir, Cybercity Ebene, 72201, Mauritius
\nPrudential Myanmar Life Insurance Limited
OS
100.00%
#15-01, 15th Floor, Sule Square, 221 Sule Pagoda Road, Kyauktada Township, Yangon,
\nMyanmar
\nPrudential Pensions Management Zambia Limited
OS
49.00%
Prudential House, Plot No. 32256, Thabo Mbeki Road, P.O. Box 31357, Lusaka, Zambia
\nPrudential Services Asia Sdn. Bhd.
OS
100.00%
Suite 1005, 10th Floor, Wisma Hamzah-Kwong Hing, No. 1 Leboh Ampang, 50100 Kuala
\nLumpur, Malaysia
\nPS
100.00%
\nPrudential Services Limited
OS
100.00%
1 Angel Court, London, EC2R 7AG, United Kingdom
\nPrudential Services Philippines Corporation
OS
100.00%
19th Floor Uptown Place Tower I East, 11th Drive Uptown Bonifacio Fort Bonifacio
\nBonifacio Global City, Taguig City, Fourth District, National Capital Region (NCR), 1630,
\nPhilippines
\nPrudential Services Singapore Pte. Ltd.
OS
100.00%
7 Straits View, #06-01 Marina One East Tower, Singapore 018936
\nPrudential Singapore Holdings Pte. Limited
OS
100.00%
30 Cecil Street, #30-01 Prudential Tower, Singapore 049712
\nPS
100.00%
\nPrudential Technology and Services India Private Limited
OS
100.00%
CoWrks NXT, EPIP Industrial Area, White\ufb01eld Road, K.R Puram, Near SAP Labs, Hubli,
\nBangalore, Karnataka, 560066, India
\nPrudential Vietnam Assurance Private Limited
OS
100.00%
25th Floor, Saigon Trade Center, 37 Ton Duc Thang Street, District 1, Ho Chi Minh City,
\nVietnam
\nPrudential Wealth Holdings Company Pte. Ltd.
OS
100.00%
7 Straits View #07-01, Marina One East Tower, Singapore 018936, Singapore
\nPrudential Wealth Management Singapore Pte. Ltd.
OS
100.00%
8 Marina View #15-06A, Asia Square Tower 1, Singapore 018960, Singapore
\nPrudential Zenith Life Insurance Limited
OS
51.00%
13th Floor, Civic Towers, Ozumba Mbadiwe Avenue, Victoria Island, Lagos State, Lagos,
\nNigeria
\nPRUInvest PHP Liquid Fund
U
99.84%
9th Floor, Uptown Place Tower 1, 1 East 11th Drive, Uptown Bonifacio, 1634 Taguig City,
\nMetro Manila, Philippines
\nPRUInvest PH Equity Index Tracker Fund
U
100.00%
\nPT Prudential Sharia Life Assurance
OS
94.62%
Prudential Tower, 2nd Floor, Jl. Jend. Sudirman Kav. 79, Jakarta 12910, Indonesia
\nPT. Eastspring Investments Indonesia
OS
99.95%
Prudential Tower, 23rd Floor, Jl. Jend. Sudirman Kav.79, Jakarta 12910, Indonesia
\nPT. Prudential Life Assurance
\n\u2021
\nOS
94.62%
Prudential Tower, Jl. Jend. Sudirman Kav. 79, Jakarta 12910, Indonesia
\nPulse Ecosystems Pte. Ltd.
OS
100.00%
7 Straits View, #06-01 Marina One East Tower, Singapore 018936
\nPulse Wealth Limited
OS
100.00%
Suite 3703-04, 37/F, Tower 6, The Gateway, Harbour City, 9 Canton Road, Tsim Sha Tsui,
\nKowloon, Hong Kong
\nReksa Dana Eastspring IDR Fixed Income Fund
U
98.81%
Prudential Tower, 23rd Floor, Jl. Jend. Sudirman Kav.79, Jakarta 12910, Indonesia
\nReksa Dana Eastspring Investments Cash Reserve
U
88.93%
\nReksa Dana Syariah Eastspring Syariah Fixed Income
\nAmanah
\nU
66.32%
\nReksa Dana Syariah Eastspring Syariah Money Market
\nKhazanah
\nU
99.30%
\nReksa Dana Syariah Penyertaan Terbatas Bahana Syariah
\nBumn Fund IV
\nU
99.01%
Graha CIMB Niaga 21st Floor. Jl Jend Sudirman Kav 58, Jakarta - 12190, Indonesia
\nRhodium Investment Funds - Singapore Bond Fund
U
99.75%
10 Marina Boulevard, #32-01, Marina Bay Financial Centre Tower 2, Singapore 018983
\nRhodium Passive Long Dated Bond Fund
U
99.87%
\nRobeco QI European Active Index Equities
U
94.55%
6, route de Tr\u00e8ves, L-2633 Senningerberg, Grand Duchy of Luxembourg
\nSchroder Asian Investment Grade Credit
U
37.95%
138 Market Street, #23-01 CapitaGreen, Singapore 048946
\nSchroder Emerging Markets Fund
U
67.30%
\nSchroder Multi-Asset Revolution
U
48.29%
\nSchroder US Dollar Money Fund
U
34.92%
9th \ufb02oor, no. 108, section 5, xinyi road, taipei
\nScotts Spazio Pte. Ltd.
OS
45.00%
316 Tanglin Road, #01-01,Singapore, 247978
\nShenzhen Prudential Technology Limited
MI - WFOE
100.00%
Unit 5, 8th Floor, China Resources Tower, No.2666 Keyuan South Road, Yuehai Street,
\nNanshan District, Shenzhen 518054, China
\nSinopac RMB Money Market Fund
U
27.12%
14th Floor, No.17,Po Ai Rd., Taipei, Taiwan
\nSri Han Suria Sdn. Bhd.
OS
51.00%
Suite 1005, 10th Floor, Wisma Hamzah-Kwong Hing, No. 1 Leboh Ampang, 50100 Kuala
\nLumpur, Malaysia
\nStaple Limited
OS
100.00%
No. 63, Athenee Tower, 34th Floor, Wireless Road, Lumpini Subdistrict Pathumwan District,
\nBangkok Metropolis, Thailand
\nTempleton Asian Growth Fund
U
31.40%
8A, rue Albert Borschette, L-1246 Luxembourg
\nThreadneedle (Lux) \u2013 Global Emerging Market Equities
U
69.10%
44 Rue de la vall\u00e9e, 2661 Luxembourg
\nD6 Investments in subsidiary undertakings, joint ventures and associates
continued
\nD6.4 Related undertakings
continued
\nDirect subsidiary undertakings of the parent company, Prudential plc (shares held directly or via nominees)
continued
\n350
Prudential plc
Annual Report 2022
prudentialplc.com
Name of entity
\nClasses of
\nshares held
\nProportion
\nheld
Registered o\ufb03ce address
\nUnited Global Innovation Fund
U
21.33%
23A, 25th Floor, Asia Centre Building, 173/27-30, 32-33 South Sathon Road,
\nThungmahamek, Sathon, Bangkok 10120, Thailand
\nUOB Smart Global Healthcare Fund
U
42.04%
\nUOB Smart Japan Small and Mid Cap Fund
U
29.79%
\nUOB Smart Millennium Growth Fund
U
38.65%
\nUSD Investment Grade Infrastructure Debt Fund SCSp
U
21.53%
35a, Avenue J.F. Kennedy, L-1855, Luxembourg, Grand Duchy of Luxembourg
\n*
Prudential Assurance Malaysia Berhad is consolidated at 100 per cent in the Group\u2019s consolidated \ufb01nancial statements re\ufb02ecting the economic interest to the Group.
\n\u2020
Prudential BSN Takaful Berhad is a joint venture that is accounted for using the equity method, for which the Group has an economic interest of 70 per cent for all business sold up to
\n23 December 2016 and of 49 per cent for new business sold subsequent to this date.
\n\u2021
The holding of 94.62 per cent for PT. Prudential Life Assurance represents the proportion held in the Indonesia subsidiary attaching to the aggregate of the shares across the types
\nof\u00a0capital\u00a0in\u00a0issue.
\nThe below table lists the issued share capital of the subsidiaries of the Group which, in the opinion of the Directors, principally a\ufb00ect the results or
\nassets of the Group:
\nName of entity
Issued and fully paid up share/ registered capital
\nPrudential Assurance Company Singapore (Pte) Limited
526,557,000 ordinary shares of SG$ 1 each
\nPT. Prudential Life Assurance
105,500 ordinary shares and 6,000 preference shares of Rp 1,000,000 each
\nPrudential Hong Kong Limited
3,641,479,873 ordinary shares of HK$ 1 each
\nPrudential Assurance Malaysia Berhad
100,000,000 ordinary shares of RM 1 each",
"dimensions": {
"concept": "ifrs-full:DisclosureOfInterestsInOtherEntitiesExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f42467": {
"value": "D6.1 Basis of consolidation
\nThe Group consolidates those investees it is deemed to control. The Group has control over an investee if all three of the followings are met: (1) it
\nhas power over an investee; (2) it is exposed to, or has rights to, variable returns from its involvement with the investee; and (3) it has the ability to
\nuse its power over the investee to a\ufb00ect its own returns.
\n(a) Subsidiaries
\nSubsidiaries are those investees that the Group controls. The majority of the Group\u2019s subsidiaries are corporate entities.
\nThe Group performs a re-assessment of consolidation whenever there is a change in the substance of the relationship between the Group and
\nan investee. Where the Group is deemed to control an entity, it is treated as a subsidiary and its results, assets and liabilities are consolidated.
\nWhere the Group holds a minority share in an entity with no control over the entity, the investments are carried at fair value within \ufb01nancial
\ninvestments in the Consolidated statement of \ufb01nancial position.
\nEntities consolidated by the Group include Qualifying Partnerships as de\ufb01ned under the UK Partnerships (Accounts) Regulations 2008 (the
\n\u2018Partnerships Act\u2019). The Group\u2019s limited partnership has taken advantage of the exemption under regulation 7 of the Partnerships Act from the
\n\ufb01nancial statement requirements. This is under regulations 4 to 6, on the basis that the limited partnership is dealt with on a consolidated basis in
\nthese \ufb01nancial statements.
\n342
Prudential plc
Annual Report 2022
prudentialplc.com
(b) Joint ventures and associates
\nJoint ventures are joint arrangements arising from a contractual agreement whereby the Group and other investors have joint control of the net
\nassets of the arrangement. In a number of these arrangements, the Group\u2019s share of the underlying net assets may be less than 50 per cent but
\nthe terms of the relevant agreement make it clear that control is jointly exercised between the Group and the third party. Associates are entities
\nover which the Group has signi\ufb01cant in\ufb02uence but does not control. Generally, it is presumed that the Group has signi\ufb01cant in\ufb02uence if it holds
\nbetween 20 per cent and 50 per cent voting rights of an entity.
\nWith the exception of those referred to below, the Group accounts for its investments in joint ventures and associates using the equity method
\nof accounting. The Group\u2019s share of pro\ufb01t or loss of its joint ventures and associates is recognised in the income statement and its share of
\nmovements in other comprehensive income is recognised in other comprehensive income. The equity method of accounting does not apply to
\ninvestments in joint ventures and associates held by the Group\u2019s insurance or investment funds, including collective investment schemes which, as
\nallowed by IAS 28 \u2018Investments in Associates and Joint Ventures\u2019, are carried at fair value through pro\ufb01t or loss.
\n(c) Structured entities
\nStructured entities are those that have been designed so that voting or similar rights are not the dominant factor in deciding who controls the
\nentity. Voting rights relate to administrative tasks. Relevant activities are directed by means of contractual arrangements. The Group invests in
\nboth consolidated and unconsolidated structured entities including investment vehicles such as collective investment schemes, collateralised debt
\nobligations, mortgage-backed securities and similar asset-backed securities.
\nCollective investment schemes
\nThe Group invests in collective investment schemes that invest mainly in equities, bonds, cash and cash equivalents and properties. In assessing
\ncontrol under IFRS 10 \u2018Consolidated Financial Statements\u2019, the Group determines whether it is acting as principal or agent and the variable returns
\nfrom its involvement with these entities. The Group\u2019s percentage ownership in these entities can \ufb02uctuate on a daily basis according to the
\nparticipation of the Group and other investors.
\nWhere the entity is managed by a Group asset manager:
\n>
Where the Group\u2019s ownership holding in the entity exceeds 50 per cent, the Group is judged to have control over the entity;
\n>
Where the Group\u2019s ownership holding in the entity is between 20 per cent and 50 per cent, the facts and circumstances of the Group\u2019s
\ninvolvement in the entity are considered, including the rights to any fees earned by the asset manager, in forming a judgement as to whether
\nthe Group has control over the entity;
\n>
Where the Group\u2019s ownership holding in the entity is less than 20 per cent, the Group is judged to not have control over the entity.
\nWhere the entity is managed by an asset manager outside the Group, an assessment is made of whether the Group has existing rights that gives
\nit the ability to direct the current activities of the entity and therefore control the entity. In assessing the Group\u2019s ability to direct an entity, the
\nGroup considers its ability relative to other investors.
\nWhere the Group is deemed to control an entity, it is treated as a subsidiary and is consolidated, with the interests of investors other than the
\nGroup being classi\ufb01ed as liabilities, and presented within \u2018Net asset value attributable to unit holders of consolidated investment funds\u2019.
\nWhere the Group does not control these entities (where the Group is deemed to be acting as an agent under IFRS 10) and they do not meet the
\nde\ufb01nition of associates, they are carried at FVTPL within \ufb01nancial investments in the Consolidated statement of \ufb01nancial position.
\nWhere the Group\u2019s asset manager sets up investment funds as part of its asset management operations, unless the Group also participates in
\nthe ownership holding of the entities, the Group\u2019s interest is limited to the fees charged to manage the assets of such entities. With no
\nparticipation in ownership holding of these entities, the Group does not retain risks associated with investment funds. For these investment funds,
\nthe Group is not deemed to control the entities but deemed to be acting as an agent.
\nThe Group generates returns and retains the ownership risks in these investment vehicles commensurate to its participation and does not have
\nany further exposure to the residual risks of these investment vehicles.
\nOther structured entities
\nThe Group holds investments in mortgage-backed securities, collateralised debt obligations and similar asset-backed securities, the majority of
\nwhich are actively traded in a liquid market.
\nThe Group consolidates the vehicles that hold the investments where the Group is deemed to control the vehicles. When assessing control over
\nthe vehicles, the factors considered include the purpose and design of the vehicle, the Group\u2019s exposure to the variability of returns and the scope
\nof the Group\u2019s ability to direct the relevant activities of the vehicle including any kick-out or removal rights that are held by third parties. The
\noutcome of the control assessment is dependent on the terms and conditions of the respective individual arrangements.
\nThe majority of such vehicles are not consolidated. In these cases, the Group is not the sponsor of the vehicles in which it holds investments and
\nhas no administrative rights over the vehicles\u2019 activities. The Group generates returns and retains the ownership risks commensurate to its holding
\nand its exposure to the investments and does not have any further exposure to the residual risks or losses of the investments or the vehicles in
\nwhich it holds investments. Accordingly, the Group does not have power over the relevant activities of such vehicles and all are carried at FVTPL
\nwithin \ufb01nancial investments in the Consolidated statement of \ufb01nancial position.
\n343
Prudential plc
Annual Report 2022
\nGroup overview
Strategic report
Governance
Directors\u2019 remuneration report
European Embedded Value (EEV) basis results
Additional information
Financial statements
D Other information
/ continued
\nD6 Investments in subsidiary undertakings, joint ventures and associates
continued
\nD6.1
Basis of consolidation
continued
\nThe table below provides aggregate carrying amounts of the investments in unconsolidated structured entities reported in the Group\u2019s
\nConsolidated statement of \ufb01nancial position:
\nConsolidated statement of \ufb01nancial position line items
\n31 Dec 2022
$m
31 Dec 2021
$m
\nInvestment
\nfunds
\nOther
\nstructured
\nentities
Investment
\nOther
\nstructured
\nentities
\nEquity securities and holdings in collective investment schemes
30,771
\u2013
35,446
\u2013
\nDebt securities
\u2013
370
\u2013
251
\nTotal investments in unconsolidated structured entities
30,771
370
35,446
251
\nThe Group\u2019s maximum exposure to loss related to the interest in unconsolidated structured entities is limited to the carrying value in the
\nConsolidated statement of \ufb01nancial position and the unfunded investment commitments provided by the Group (see note D5).
\nDuring the year, the Group receives dividend and interest income from its investments in these unconsolidated structured entities. Where the
\nGroup\u2019s asset manager manages these entities, such as the collective investment schemes, the Group also receives asset management fees from
\nthese entities.
\nAs at 31 December 2022 and 2021, the Group does not have an agreement, contractual or otherwise, or intention to provide \ufb01nancial support
\nto structured entities (both consolidated and unconsolidated) that could expose the Group to a loss.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfBasisOfConsolidationExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f42474": {
"value": "(a) Subsidiaries Subsidiaries are those investees that the Group controls. The majority of the Group\u2019s subsidiaries are corporate entities.
\nThe Group performs a re-assessment of consolidation whenever there is a change in the substance of the relationship between the Group and
\nan investee. Where the Group is deemed to control an entity, it is treated as a subsidiary and its results, assets and liabilities are consolidated.
\nWhere the Group holds a minority share in an entity with no control over the entity, the investments are carried at fair value within \ufb01nancial
\ninvestments in the Consolidated statement of \ufb01nancial position.
\nEntities consolidated by the Group include Qualifying Partnerships as de\ufb01ned under the UK Partnerships (Accounts) Regulations 2008 (the
\n\u2018Partnerships Act\u2019). The Group\u2019s limited partnership has taken advantage of the exemption under regulation 7 of the Partnerships Act from the
\n\ufb01nancial statement requirements. This is under regulations 4 to 6, on the basis that the limited partnership is dealt with on a consolidated basis in
\nthese \ufb01nancial statements.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForSubsidiariesExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f42475": {
"value": "(a) SubsidiariesSubsidiaries are those investees that the Group controls. The majority of the Group\u2019s subsidiaries are corporate entities.
\nThe Group performs a re-assessment of consolidation whenever there is a change in the substance of the relationship between the Group and
\nan investee. Where the Group is deemed to control an entity, it is treated as a subsidiary and its results, assets and liabilities are consolidated.
\nWhere the Group holds a minority share in an entity with no control over the entity, the investments are carried at fair value within \ufb01nancial
\ninvestments in the Consolidated statement of \ufb01nancial position.
\nEntities consolidated by the Group include Qualifying Partnerships as de\ufb01ned under the UK Partnerships (Accounts) Regulations 2008 (the
\n\u2018Partnerships Act\u2019). The Group\u2019s limited partnership has taken advantage of the exemption under regulation 7 of the Partnerships Act from the
\n\ufb01nancial statement requirements. This is under regulations 4 to 6, on the basis that the limited partnership is dealt with on a consolidated basis in
\nthese \ufb01nancial statements.
D6.4 Related undertakings
\nIn accordance with Section 409 of the Companies Act 2006, a list of Prudential Group\u2019s subsidiaries, joint ventures, associates and signi\ufb01cant
\nholdings (being holdings of more than 20 per cent) is disclosed below, along with the classes of shares held, the registered o\ufb03ce address and the
\ne\ufb00ective percentage of equity owned at 31 December 2022. The Group also operates through branches, none of which are signi\ufb01cant.
\nThe de\ufb01nitions of a subsidiary undertaking, joint venture and associate in accordance with the Companies Act 2006 are di\ufb00erent from the
\nde\ufb01nition under IFRS Standards. As a result, the related undertakings included within the list below may not be the same as the undertakings
\nconsolidated in the Group consolidated \ufb01nancial statements. The Group\u2019s consolidation policy is described in note D6.1.
\nCITIC-
\nPrudential
\nLife Insurance
\nCompany
\nLimited
\n\u2020
\n(CPL
\n)*
\nPT. Prudential
\nLife Assurance
\n(Indonesia)
\n\u2020
\nPrudential
\nAssurance
\nCompany
\nSingapore (Pte)
\nLimited
\n\u2020
\nGrowth markets
\nand other
\nentities
\n\u2020
\n(including Africa,
\nCambodia, India,
\nLaos, Myanmar,
\nPhilippines,
\nTaiwan, Thailand,
\nVietnam)
\nPrudential
\nHong Kong
\nLimited
\nPrudential
\nGeneral
\nInsurance Hong
\nKong Limited
\nPrudential
\nAssurance
\nMalaysia
\nBerhad
\n\u2020
\nEastspring
\nInvestments
\nGroup Pte. Ltd.
\n\u2020
\nand subsidiaries
\nPrudential
\nInternational
\nTreasury
\nLimited
\nPrudential plc
\nPrudential Corporation Asia Limited
\nPrudential Group Holdings Limited
\nand subsidiaries
\n* CPL is a joint venture with CITIC, a leading state owned conglomerate.
\n\u2020 Indirectly held by Prudential Corporation Asia Limited.
\nDirect subsidiary undertakings of the parent company, Prudential plc (shares held directly or via nominees)
\nName of entity
\nClasses of
\nshares held
\nProportion
\nheld
Registered o\ufb03ce address
\nPrudential Corporation Asia Limited
OS
100.00%
13th Floor, One International Finance Centre, 1 Harbour View Street, Central, Hong Kong
\nPrudential Group Holdings Limited
OS
100.00%
1 Angel Court, London, EC2R 7AG, United Kingdom
\nOther subsidiaries, joint ventures, associates and signi\ufb01cant holdings of the Group \u2013 no shares held directly by the parent company (Prudential plc)
\nor its nominees
\nName of entity
\nClasses of
\nshares held
\nProportion
\nheld
Registered o\ufb03ce address
\nAberdeen Cash Creation Fund
U
30.62%
28th Floor Bangkok City Tower, 179 South Sathorn Road, Thungmahamek, Sathorn,
\nBangkok 10120, Thailand
\nAberdeen Standard Global Opportunities Fund
U
34.61%
21 Church Street, #01-01, Capital Square Two, Singapore 049480
\nAberdeen Standard Singapore Equity Fund
U
62.18%
\nAC Financial Partners Limited Partnership
PI
100.00%
65 Haymarket Terrace, Edinburgh, EH12 5HD
\nAlternatives North America, Ltd.
U
100.00%
PO Box 1093, Queensgate House, Grand Cayman, KY1-1102, Cayman Islands
\nBOCHK Aggressive Growth Fund
U
47.75%
27th Floor, Bank of China Tower, 1 Garden Road, Hong Kong
\nBOCHK Balanced Growth Fund
U
41.47%
\nBOCHK China Equity Fund
U
73.71%
\nBOCHK Conservative Growth Fund
U
42.71%
\nBOCHK US Dollar Money Market Fund
U
21.91%
\nBOCI-Prudential Asset Management Limited
OS
36.00%
\nBOCI-Prudential Trustee Limited
OS
36.00%
Suites 1501-1507 & 1513-1516, 15th Floor, 1111 King's Road, Taikoo Shing, Hong Kong
\nCathay High Yield Ex China Cash Pay 1-5 Year 2% Issuer
\nCapped ETF
\nU
42.71%
6th Floor, No.39, Sec.2, Dunhua South. Road, Taipei, Taiwan
\nCITIC-CP Asset Management Co., Ltd.
MI - JV
26.95%
Room 101-2, No.128 North Zhangjiabang Road, Pudong District, Shanghai, China
\nCITIC-Prudential Fund Management Company Limited
MI - JV
49.00%
Level 9, HSBC Building, Shanghai IFC, 8 Century Avenue, Pudong, Shanghai, China
\nCITIC-Prudential Life Insurance Company Limited
MI - JV
50.00%
Room 1101-A, 1201, 1301, 1401, 1501, 1601, 1701, 1801, Unit 01, Building 1, No. B2, North
\nRoad of East Third Ring Road, Chaoyang District, Beijing, PRC,100027, China
\nEastspring Al-Wara' Investments Berhad
OS
100.00%
Level 25, Menara Hong Leong, No. 6 Jalan Damanlela, Bukit Damansara, 50490 Kuala
\nLumpur, Malaysia
\nEastspring Asia Paci\ufb01c High Yield Equity Fund
U
37.57%
4th Floor, No.1, Songzhi Road, Xinyi Dist., Taipei, Taiwan
Key to share classes:
\nLBG
Limited by Guarantee
\nMI
Membership Interest
\nMI - WFOE
Membership Interest of a Wholly Foreign Owned Enterprise in the Chinese Mainland
\nMI \u2013 JV
Membership Interest of a Sino-Foreign Equity Joint Venture in the Chinese Mainland
\nOS
Ordinary Shares
\nPI
Partnership Interest
\nPS
Preference Shares
\nU
Units
Name of entity
\nClasses of
\nshares held
\nProportion
\nheld
Registered o\ufb03ce address
\nEastspring Asset Management (Thailand) Co., Ltd.
OS
59.50%
944 Mitrtown O\ufb03ce Tower, 9th Floor, Rama 4 Road, Wangmai, Pathumwan, Bangkok
\n10330, Thailand
\nEastspring Asset Management Korea Co. Ltd.
OS
100.00%
22nd Floor (Seoul International Finance Center, Yeouido dong), 10 Gukjegeumyung-ro,
\nYeongdeungpo-gu, Seoul, Republic of Korea 07326
\nEastspring Investment K-Short Term Bond Alpha Securities
\nInvestment Trust(Bond Balanced)
\nU
27.54%
22nd Floor One IFC, 10 Gukjegeumyung-ro, Youngdungpo-gu, Seoul 07326, Korea
\nEastspring Investment Management (Shanghai) Company
\nLimited
\nMI - WFOE
100.00%
Unit 306-308, 3rd Floor, Azia Center, 1233 Lujiazui Ring Road, China (Shanghai) Pilot Free
\nTrade Zone, China
\nEastspring Investments - Asia Opportunities Equity Fund
U
99.97%
26, Boulevard Royal, L-2449, Luxembourg
\nEastspring Investments - Global Growth Equity Fund
U
59.04%
\nEastspring Investments - Global Low Volatility Equity Fund
U
96.36%
\nEastspring Investments - Global Technology Fund
U
82.06%
\nEastspring Investments - Pan European Fund
U
61.34%
\nEastspring Investments - US High Yield Bond Fund
U
46.85%
\nEastspring Investments - US Investment Grade Bond Fund
U
68.91%
\nEastspring Investments - World Value Equity Fund
U
95.64%
\nEastspring Investments (Hong Kong) Limited
OS
100.00%
13th Floor, One International Finance Centre, 1 Harbour View Street, Central, Hong Kong
\nEastspring Investments (Luxembourg) S.A.
OS
100.00%
26, Boulevard Royal, L-2449 Luxembourg, Grand Duchy of Luxembourg
\nEastspring Investments (Singapore) Limited
OS
100.00%
10 Marina Boulevard, #32-01, Marina Bay Financial Centre, Singapore 018983
\nEastspring Investments Asia Paci\ufb01c Equity Fund
U
93.92%
26, Boulevard Royal, L-2449, Luxembourg
\nEastspring Investments Asia Paci\ufb01c ex-Japan Target Return
\nFund
\nU
75.84%
Eastspring Investments Berhad, Level 22, Menara Prudential, Persiaran TRX Barat, 55188
\nTun Razak Exchange, Kuala Lumpur, Malaysia
\nEastspring Investments Asia Real Estate Multi Asset Income
\nFund
\nU
73.95%
26, Boulevard Royal, L-2449, Luxembourg
\nEastspring Investments Asia Sustainable Bond Fund
U
93.97%
\nEastspring Investments Asian Bond Fund
U
42.30%
\nEastspring Investments Asian Dynamic Fund
U
91.58%
\nEastspring Investments Asian Equity Fund
U
98.97%
\nEastspring Investments Asian Equity Income Fund
U
87.52%
\nEastspring Investments Asian High Yield Bond Fund
U
44.35%
\nEastspring Investments Asian Investment Grade Bond Fund
U
90.06%
\nEastspring Investments Asian Low Volatility Equity Fund
U
89.01%
\nEastspring Investments Asian Multi Factor Equity Fund
U
90.94%
\nEastspring Investments Berhad
OS
100.00%
Level 25, Menara Hong Leong, No. 6 Jalan Damanlela, Bukit Damansara, 50490 Kuala
\nLumpur, Wilayah Persekutuan, Malaysia
\nEastspring Investments China A Shares Growth Fund
U
63.69%
26, Boulevard Royal, L-2449, Luxembourg
\nEastspring Investments Dragon Peacock Fund
U
95.82%
\nEastspring Investments Emerging Markets Star Players
U
40.88%
Eastspring Investments Limited, Marunouchi Park Bldg., 2-6-1 Marunochi, Chiyoda-ku,
\nTokyo, Japan 100-6905
\nEastspring Investments Equity Income Fund
U
40.95%
Eastspring Investments Berhad, Level 22, Menara Prudential, Persiaran TRX Barat, 55188
\nTun Razak Exchange, Kuala Lumpur, Malaysia
\nEastspring Investments European Investment Grade Bond
\nFund
\nU
99.91%
26, Boulevard Royal, L-2449, Luxembourg
\nEastspring Investments Fund Management Limited
\nLiability Company
\nMI
100.00%
23rd Floor, Saigon Trade Center, 37 Ton Duc Thang Street, District 1, Ho Chi Minh City,
\nVietnam
\nEastspring Investments Global Emerging Markets Bond
\nFund
\nU
99.38%
26, Boulevard Royal, L-2449, Luxembourg
\nEastspring Investments Global Emerging Markets Dynamic
\nFund
\nU
62.79%
\nEastspring Investments Global Emerging Markets ex-China
\nDynamic Fund
\nU
99.96%
\nEastspring Investments Global Equity Navigator Fund
U
97.19%
\nEastspring Investments Global Growth Fund
U
40.22%
Eastspring Investments Berhad, Level 22, Menara Prudential, Persiaran TRX Barat, 55188
\nTun Razak Exchange, Kuala Lumpur, Malaysia
\nEastspring Investments Global Market Navigator Fund
U
99.75%
26, Boulevard Royal, L-2449, Luxembourg
\nEastspring Investments Global Multi Asset Income Plus
\nGrowth Fund
\nU
100.00%
\nEastspring Investments Greater China Equity Fund
U
90.60%
\nEastspring Investments Group Pte. Ltd.
OS
100.00%
10 Marina Boulevard, #32-01, Marina Bay Financial Centre, Singapore 018983
\nEastspring Investments Incorporated
OS
100.00%
874 Walker Road, Suite C, City of Dover, County of Kent, State of Delaware, 19904, USA
\nEastspring Investments India Consumer Equity Open
\nLimited
\nOS
100.00%
3rd Floor, 355 NEX, Rue du Savoir, Cybercity Ebene 72201, Mauritius
\nEastspring Investments India Equity Fund
U
79.97%
26, Boulevard Royal, L-2449, Luxembourg
\nEastspring Investments India Equity Open Limited
OS
100.00%
3rd Floor, 355 NEX, Rue du Savoir, Cybercity Ebene 72201, Mauritius
\nEastspring Investments India Infrastructure Equity Open
\nLimited
\nOS
100.00%
Name of entity
\nClasses of
\nshares held
\nProportion
\nheld
Registered o\ufb03ce address
\nEastspring Investments Limited
OS
100.00%
Marunouchi Park Building, 6-1 Marunouchi 2-chome, Chiyoda-Ku, Tokyo, Japan
\nEastspring Investments MY Focus Fund
U
28.33%
Eastspring Investments Berhad, Level 22, Menara Prudential, Persiaran TRX Barat, 55188
\nTun Razak Exchange, Kuala Lumpur, Malaysia
\nEastspring Investments Private Fixed Income Fund Number 1
U
87.11%
Units 306-308, 3rd Floor, Azia Center 1233 Lujiazui Ring Road, Shanghai, China
\nEastspring Investments Services Pte. Ltd.
OS
100.00%
10 Marina Boulevard, #32-01, Marina Bay Financial Centre, Singapore 018983
\nEastspring Investments SICAV-FIS \u2013 Alternative
\nInvestments Fund
\nU
100.00%
26, Boulevard Royal, L-2449, Luxembourg
\nEastspring Investments SICAV-FIS \u2013 Asia Paci\ufb01c Loan Fund
U
100.00%
\nEastspring Investments Syariah Equity Islamic Asia Paci\ufb01c
\nUSD Kelas B
\nU
88.02%
Prudential Tower, 23rd Floor, Jl. Jend. Sudirman Kav.79, Jakarta 12910, Indonesia
\nEastspring Investments Unit Trusts - Dragon Peacock Fund
U
97.69%
10 Marina Boulevard, #32-01, Marina Bay Financial Centre, Singapore 018983
\nEastspring Investments Unit Trusts Singapore ASEAN
\nEquity Fund
\nU
98.74%
\nEastspring Investments Unit Trusts Singapore Select Bond
\nFund
\nU
66.05%
\nEastspring Investments US Corporate Bond Fund
U
60.04%
26, Boulevard Royal, L-2449, Luxembourg
\nEastspring Investments US High Investment Grade Bond
\nFund
\nU
87.42%
\nEastspring Investments Vietnam Navigator Fund
U
76.79%
23rd Floor, Saigon Trade Center Building, 37 Ton Duc Thang Street, Ben Nghe Ward,
\nDistrict 1, Ho Chi Minh City, Vietnam
\nEastspring Investments-Global Emerging Markets
\nFundamental Value Fund
\nU
99.96%
26, Boulevard Royal, L-2449, Luxembourg
\nEastspring Investments-Japan Sustainable Value Fund
U
100.00%
\nEastspring Overseas Investment Fund Management
\n(Shanghai) Company Limited
\nMI - WFOE
100.00%
Unit 306-308, 3rd Floor, 1233 Lujiazui Ring Road, China (Shanghai) Pilot Free Trade Zone,
\nChina
\nEastspring Private Equity Fund 2
U
99.99%
10 Marina Boulevard, #32-01, Marina Bay Financial Centre Tower 2, Singapore 018983
\nEastspring Securities Investment Trust Co., Ltd.
OS
99.54%
4th Floor, No.1 Songzhi Road, Taipei 110, Taiwan
\nEastspring Singapore Alternatives VCC
U
100.00%
10 Marina Boulevard, #32-01, Marina Bay Financial Centre, Singapore 018983
\nEastspring Syariah Fixed Income USD Kelas A
U
69.23%
Prudential Tower Lantai 23, JI. Jend. Sudirman Kav. 79, Jakarta 12910, Indonesia
\nFCP Ecobank Actions Uemoa
U
43.63%
Immeuble Ecobank, 2Er Etage -Avenue Houdaille Plateau, 01 B.P 4107 Abidjan O1 Cote
\nD\u2019Ivoire
\nFirst Sentier Global Property Securities Fund
U
67.50%
79 Robinson Road, #17-01, Singapore 068897
\nFSSA China Focus Fund
U
67.76%
70 Sir John Rogerson\u2019s Quay, Dublin 2, D02 R296, Ireland
\nFubon 1-5 Years US High Yield Bond Ex China
U
61.05%
8th Floor, No.108, Sec.1, Dunhua South. Road, Taipei, Taiwan
\nFubon China Bond Umbrella Fund - Fubon China Quality
\nRmb Bond Fund
\nU
23.37%
\nFubon China Currency Fund
U
35.49%
\nFuh Hwa 1-5 Yr High Yield ETF
U
44.22%
8th & 9th Floor, No.308, Sec. 2, Bade Road, Da-an District
\nFuh Hwa Emerging Market RMB Fixed Income Fund
U
46.42%
\nFuh Hwa Rmb Money Market Fund
U
37.52%
\nFurnival Insurance Company PCC Limited
OS
100.00%
PO Box 155, Mill Court, La Charroterie, St Peter Port, GY1 4ET, Guernsey
\nGIS Total Return Bond Fund
U
27.53%
78 Sir John Rogerson's Quay, Dublin, D02 HD32, Ireland
\nGS Twenty Two Limited
OS
100.00%
1 Angel Court, London, EC2R 7AG, United Kingdom
\nHSBC Asia Paci\ufb01c Ex Japan Sustainable Equity UCITS ETF
U
63.65%
25/28 North Wall Quay, IFSC, Dublin 1, Ireland
\nHSBC Senior Global Infrastructure Debt Fund
U
100.00%
8 Canada Square, London, E14 5HQ, United Kingdom
\nICICI Prudential Asset Management Company Limited
OS
49.00%
12th Floor, Narain Manzil, 23, Barakhamba Road, New Delhi 110001, India
\nICICI Prudential Life Insurance Company Limited
OS
22.07%
ICICI PruLife Towers, 1089 Appasaheb Marathe Marg, Prabhadevi,
\nMumbai 400025, India
\nICICI Prudential Pension Funds Management Company
\nLimited
\nOS
22.07%
\nICICI Prudential Trust Limited
OS
49.00%
12th Floor, Narain Manzil, 23, Barakhamba Road, New Delhi 110001, India
\nIndia Innovation High Growth EQ QII
U
100.00%
Eastspring Investments Limited, Marunouchi Park Bldg., 2-6-1 Marunochi, Chiyoda-ku,
\nTokyo, Japan 100-6905
\nInvesco Fixed Maturity Selective Emerging Market Bonds
\n2024
\nU
100.00%
8th Floor, No 122, Tung Hua N. Rd. Taipei, Taiwan
\nInvesco Select 6 Year Maturity Global Bond Fund
U
100.00%
\niShares Core MSCI Asia
U
61.46%
15th, 16th, 17th Floor, Champion Tower & 17th Floor ICBC Tower, Three Garden Road,
\nCentral, Hong Kong
\niShares Global High Yield Corp Bond UCITS ETF
U
65.61%
200 Capital Dock, 79 Sir John Rogerson\u2019s Quay, Dublin 2, Ireland
\niShares MSCI Europe ESG Enhanced UCITS ETF
U
51.34%
12 Throgmorton Avenue, London, EC2N 2DL
\niShares MSCI Korea UCITS ETF USD (Acc)
U
53.66%
200 Capital Dock, 79 Sir John Rogerson\u2019s Quay, Dublin 2, Ireland
Key to share classes:
\nLBG
Limited by Guarantee
\nMI
Membership Interest
\nMI - WFOE
Membership Interest of a Wholly Foreign Owned Enterprise in the Chinese Mainland
\nMI \u2013 JV
Membership Interest of a Sino-Foreign Equity Joint Venture in the Chinese Mainland
\nOS
Ordinary Shares
\nPI
Partnership Interest
\nPS
Preference Shares
\nU
Units
Name of entity
\nClasses of
\nshares held
\nProportion
\nheld
Registered o\ufb03ce address
\niShares MSCI USA ESG Enhanced UCITS ETF
U
41.86%
12 Throgmorton Avenue, London, EC2N 2DL
\nKKP Active Equity Fund
U
35.38%
19th Floor Muang Thai-Phatra Complex, Building Tower, A, 252/25 Ratchadapisek Road,
\nHuaykwang, Bangkok 10310, Thailand
\nKrungsri Greater China Equity Hedged Dividend Fund
U
31.10%
12th, 18th Zone B Floor, Ploenchit Tower 898 Ploenchit Road, Lumpini Pathumwan,
\nBangkok 10330, Thailand
\nLasalle Property Securities SICAV-FIS
U
99.97%
11-13 Bouldevard de la Foire, L-1528 Luxembourg
\nM&G Asia Property Trust
U
100.00%
138 Market Street, CapitaGreen #35-01, Singapore 048946
\nM&G Real Estate Asia Holding Company Pte. Ltd.
OS
33.00%
138 Market Street, #35-01 CapitaGreen, Singapore 048946
\nManulife Asia Paci\ufb01c Bond Fund
U
57.81%
9th Floor, No 89 Son Ren Road, Taipei, Taiwan
\nManulife China Dim Sum High Yield Bond Fund
U
22.54%
\nManulife China O\ufb00shore Bond Fund
U
85.22%
\nManulife Taiwan Dynamic Fund
U
20.53%
\nManulife USD High Yield Bond Fund
U
29.47%
\nNomura Six Years Fixed Maturity Asia Paci\ufb01c Emerging
\nMarket Bond Fund
\nU
100.00%
101 Tower, 30th Floor, No. 7 Sec. 5, Xinyi Rd., Xinyi Dist., Taipei, Taiwan
\nNomura Six Years Fixed Maturity Emerging Market Bond
\nFund
\nU
41.88%
\nNomura Six Years Ladder Maturity Asia Paci\ufb01c Emerging
\nMarket Bond Fund
\nU
97.86%
\nNorth Sathorn Holdings Company Limited
OS
100.00%
No. 63, Athenee Tower, 34th Floor, Wireless Road, Lumpini Subdistrict Pathumwan District,
\nBangkok Metropolis, Thailand
\nPCA IP Services Limited
OS
100.00%
13th Floor, One International Finance Centre, 1 Harbour View Street, Central, Hong Kong
\nPCA Life Assurance Co., Ltd.
OS
99.79%
8th Floor, No.1 Songzhi Road, Taipei City, 11047, Taiwan
\nPCA Reinsurance Co. Ltd.
OS
100.00%
Unit Level 13(A), Main O\ufb03ce Tower, Financial Park Labuan, Jalan Merdeka, 87000 Federal
\nTerritory of Labuan, Malaysia
\nPineBridge US Dual Core Income Fund
U
37.37%
10th Floor, No. 144, Sec. 2, Minquan East Rd, Taipei
\nPrincipal Global Silver Age Fund
U
22.89%
44, 16th Floor, CIMB Thai Bank, Lungsuan Road, Lumpini, Bangkok 10330, Thailand
\nPru Life Insurance Corporation of U.K.
OS
100.00%
9th Floor, Uptown Place Tower 1, 1 East 11th Drive, Uptown Bonifacio, 1634 Taguig City,
\nMetro Manila, Philippines
\nPru Life UK Asset Management and Trust Corporation
OS
100.00%
\nPrudence Foundation
LBG
100.00%
13th Floor, One International Finance Centre, 1 Harbour View Street, Central, Hong Kong
\nPrudential (Cambodia) Life Assurance Plc
OS
100.00%
Phnom Penh Tower, 20th Floor, #445, Monivong Blvd., Boeung Prolit, 7 Makara, Phnom
\nPenh, Cambodia
\nPrudential (US Holdco 1) Limited
OS
100.00%
1 Angel Court, London, EC2R 7AG, United Kingdom
\nPrudential Africa Holdings Limited
OS
100.00%
\nPrudential Africa Services Limited
OS
100.00%
3rd Floor, One Africa Place, LR. No. 1870/X/45, P.O. Box 25093-00100, Westlands, Nairobi,
\nKenya
\nPrudential Assurance Company Singapore (Pte) Limited
OS
100.00%
30 Cecil Street, #30-01 Prudential Tower, Singapore 049712
\nPrudential Assurance Malaysia Berhad
\n*
\nOS
51.00%
Level 26, Menara Prudential, Persiaran TRX Barat, 55188 Tun Razak Exchange, Kuala
\nLumpur, Malaysia
\nPrudential Assurance Uganda Limited
OS
100.00%
9th Floor Zebra Plaza, Plot 23 Kampala Road, P.O. Box 2660, Kampala, Uganda
\nPrudential BeGeneral Insurance C\u00f4te d'Ivoire S.A.
OS
51.00%
Abidjan Plateau, Avenue Nogu\u00e8s, Immeuble Woodin Center, 1er \u00e9tage, 01 P.O. BOX 5173,
\nAbidjan 01, C\u00f4te d'Ivoire
\nPrudential Belife Insurance C\u00f4te d'Ivoire S.A.
OS
51.00%
\nPrudential Bene\ufb01cial General Insurance Cameroon S.A.
OS
50.71%
1944, Boulevard de la R\u00e9publique Douala-Akwa, P.O. BOX 2328, Douala, Cameroon
\nPrudential Bene\ufb01cial Life Insurance Cameroon S.A.
OS
51.00%
\nPrudential Bene\ufb01cial Life Insurance Togo S.A.
OS
50.99%
2963 Rue de la Chance Agbalepedogan, P.O. Box 1115, Lome, Togo
\nPrudential BSN Takaful Berhad
\n\u2020
\nOS
49.00%
Level 13, Menara Prudential, Persiaran TRX Barat, 55188 Tun Razak Exchange, Kuala
\nLumpur, Malaysia
\nPrudential Corporation Holdings Limited
OS
100.00%
1 Angel Court, London, EC2R 7AG, United Kingdom
\nPrudential Financial Advisers Singapore Pte. Ltd.
OS
100.00%
30 Cecil Street, #30-01 Prudential Tower, Singapore 049712
\nPrudential Financial Partners (Asia) Limited
OS
100.00%
1 Angel Court, London, EC2R 7AG, England, United Kingdom
\nPrudential Financial Partners HK Limited
OS
100.00%
13th Floor, One International Finance Centre, 1 Harbour View Street, Central, Hong Kong
\nPrudential General Insurance Hong Kong Limited
OS
100.00%
59th Floor, One Island East, 18 Westlands Road, Quarry Bay, Hong Kong
\nPrudential Group Secretarial Services HK Limited
OS
100.00%
13th Floor, One International Finance Centre, 1 Harbour View Street, Central, Hong Kong
\nPrudential Group Secretarial Services Limited
OS
100.00%
1 Angel Court, London, EC2R 7AG, United Kingdom
\nPrudential Holdings Limited
OS
100.00%
4th Floor, Saltire Court, 20, Castle Terrace, Edinburgh, EH1 2EN, United Kingdom
\nPrudential Hong Kong Limited
OS
100.00%
59th Floor, One Island East, 18 Westlands Road, Quarry Bay, Hong Kong
\nPrudential International Treasury Limited
OS
100.00%
13th Floor, One International Finance Centre, 1 Harbour View Street, Central, Hong Kong
\nPrudential IP Services Limited
OS
100.00%
1 Angel Court, London, EC2R 7AG, United Kingdom
\nPrudential Life Assurance (Lao) Company Limited
OS
100.00%
5th Floor, Lao international Business and Tourist Center Project (Vientiane Center),
\nKhouvieng Road, Nongchan Village, Sisattanak District, Vientiane Capital, Lao PDR
\nPrudential Life Assurance (Thailand) Public Company
\nLimited
\nOS
99.93%
944 Mitrtown O\ufb03ce Tower, 10th, 29th-31st Floor, Rama 4 Road, Wangmai, Pathumwan,
\nBangkok, 10330, Thailand
\nPrudential Life Assurance Kenya Limited
OS
100.00%
Vienna Court, Ground Floor, State House Crescent, O\ufb00 State House Avenue, P.O. Box
\n25093-00603, Nairobi, Kenya
\nPrudential Life Assurance Zambia Limited
OS
100.00%
Prudential House, Plot No. 32256, Thabo Mbeki Road, P.O. Box 31357, Lusaka, Zambia
Name of entity
\nClasses of
\nshares held
\nProportion
\nheld
Registered o\ufb03ce address
\nPrudential Life Insurance Ghana Limited
OS
100.00%
H/NO. 35, Opp. Hobats Clinic, North Street, Tesano, Accra, Accra Metropolitan, Greater
\nAccra, P.O. Box AN 10476, Ghana
\nPrudential Life Vault Limited
OS
100.00%
48 Awolowo Road, South-West Ikoyi, Lagos, Nigeria
\nPrudential Mauritius Holdings Limited
OS
100.00%
3rd Floor, 355 NEX, Rue du Savoir, Cybercity Ebene, 72201, Mauritius
\nPrudential Myanmar Life Insurance Limited
OS
100.00%
#15-01, 15th Floor, Sule Square, 221 Sule Pagoda Road, Kyauktada Township, Yangon,
\nMyanmar
\nPrudential Pensions Management Zambia Limited
OS
49.00%
Prudential House, Plot No. 32256, Thabo Mbeki Road, P.O. Box 31357, Lusaka, Zambia
\nPrudential Services Asia Sdn. Bhd.
OS
100.00%
Suite 1005, 10th Floor, Wisma Hamzah-Kwong Hing, No. 1 Leboh Ampang, 50100 Kuala
\nLumpur, Malaysia
\nPS
100.00%
\nPrudential Services Limited
OS
100.00%
1 Angel Court, London, EC2R 7AG, United Kingdom
\nPrudential Services Philippines Corporation
OS
100.00%
19th Floor Uptown Place Tower I East, 11th Drive Uptown Bonifacio Fort Bonifacio
\nBonifacio Global City, Taguig City, Fourth District, National Capital Region (NCR), 1630,
\nPhilippines
\nPrudential Services Singapore Pte. Ltd.
OS
100.00%
7 Straits View, #06-01 Marina One East Tower, Singapore 018936
\nPrudential Singapore Holdings Pte. Limited
OS
100.00%
30 Cecil Street, #30-01 Prudential Tower, Singapore 049712
\nPS
100.00%
\nPrudential Technology and Services India Private Limited
OS
100.00%
CoWrks NXT, EPIP Industrial Area, White\ufb01eld Road, K.R Puram, Near SAP Labs, Hubli,
\nBangalore, Karnataka, 560066, India
\nPrudential Vietnam Assurance Private Limited
OS
100.00%
25th Floor, Saigon Trade Center, 37 Ton Duc Thang Street, District 1, Ho Chi Minh City,
\nVietnam
\nPrudential Wealth Holdings Company Pte. Ltd.
OS
100.00%
7 Straits View #07-01, Marina One East Tower, Singapore 018936, Singapore
\nPrudential Wealth Management Singapore Pte. Ltd.
OS
100.00%
8 Marina View #15-06A, Asia Square Tower 1, Singapore 018960, Singapore
\nPrudential Zenith Life Insurance Limited
OS
51.00%
13th Floor, Civic Towers, Ozumba Mbadiwe Avenue, Victoria Island, Lagos State, Lagos,
\nNigeria
\nPRUInvest PHP Liquid Fund
U
99.84%
9th Floor, Uptown Place Tower 1, 1 East 11th Drive, Uptown Bonifacio, 1634 Taguig City,
\nMetro Manila, Philippines
\nPRUInvest PH Equity Index Tracker Fund
U
100.00%
\nPT Prudential Sharia Life Assurance
OS
94.62%
Prudential Tower, 2nd Floor, Jl. Jend. Sudirman Kav. 79, Jakarta 12910, Indonesia
\nPT. Eastspring Investments Indonesia
OS
99.95%
Prudential Tower, 23rd Floor, Jl. Jend. Sudirman Kav.79, Jakarta 12910, Indonesia
\nPT. Prudential Life Assurance
\n\u2021
\nOS
94.62%
Prudential Tower, Jl. Jend. Sudirman Kav. 79, Jakarta 12910, Indonesia
\nPulse Ecosystems Pte. Ltd.
OS
100.00%
7 Straits View, #06-01 Marina One East Tower, Singapore 018936
\nPulse Wealth Limited
OS
100.00%
Suite 3703-04, 37/F, Tower 6, The Gateway, Harbour City, 9 Canton Road, Tsim Sha Tsui,
\nKowloon, Hong Kong
\nReksa Dana Eastspring IDR Fixed Income Fund
U
98.81%
Prudential Tower, 23rd Floor, Jl. Jend. Sudirman Kav.79, Jakarta 12910, Indonesia
\nReksa Dana Eastspring Investments Cash Reserve
U
88.93%
\nReksa Dana Syariah Eastspring Syariah Fixed Income
\nAmanah
\nU
66.32%
\nReksa Dana Syariah Eastspring Syariah Money Market
\nKhazanah
\nU
99.30%
\nReksa Dana Syariah Penyertaan Terbatas Bahana Syariah
\nBumn Fund IV
\nU
99.01%
Graha CIMB Niaga 21st Floor. Jl Jend Sudirman Kav 58, Jakarta - 12190, Indonesia
\nRhodium Investment Funds - Singapore Bond Fund
U
99.75%
10 Marina Boulevard, #32-01, Marina Bay Financial Centre Tower 2, Singapore 018983
\nRhodium Passive Long Dated Bond Fund
U
99.87%
\nRobeco QI European Active Index Equities
U
94.55%
6, route de Tr\u00e8ves, L-2633 Senningerberg, Grand Duchy of Luxembourg
\nSchroder Asian Investment Grade Credit
U
37.95%
138 Market Street, #23-01 CapitaGreen, Singapore 048946
\nSchroder Emerging Markets Fund
U
67.30%
\nSchroder Multi-Asset Revolution
U
48.29%
\nSchroder US Dollar Money Fund
U
34.92%
9th \ufb02oor, no. 108, section 5, xinyi road, taipei
\nScotts Spazio Pte. Ltd.
OS
45.00%
316 Tanglin Road, #01-01,Singapore, 247978
\nShenzhen Prudential Technology Limited
MI - WFOE
100.00%
Unit 5, 8th Floor, China Resources Tower, No.2666 Keyuan South Road, Yuehai Street,
\nNanshan District, Shenzhen 518054, China
\nSinopac RMB Money Market Fund
U
27.12%
14th Floor, No.17,Po Ai Rd., Taipei, Taiwan
\nSri Han Suria Sdn. Bhd.
OS
51.00%
Suite 1005, 10th Floor, Wisma Hamzah-Kwong Hing, No. 1 Leboh Ampang, 50100 Kuala
\nLumpur, Malaysia
\nStaple Limited
OS
100.00%
No. 63, Athenee Tower, 34th Floor, Wireless Road, Lumpini Subdistrict Pathumwan District,
\nBangkok Metropolis, Thailand
\nTempleton Asian Growth Fund
U
31.40%
8A, rue Albert Borschette, L-1246 Luxembourg
\nThreadneedle (Lux) \u2013 Global Emerging Market Equities
U
69.10%
44 Rue de la vall\u00e9e, 2661 Luxembourg
Key to share classes:
\nLBG
Limited by Guarantee
\nMI
Membership Interest
\nMI - WFOE
Membership Interest of a Wholly Foreign Owned Enterprise in the Chinese Mainland
\nMI \u2013 JV
Membership Interest of a Sino-Foreign Equity Joint Venture in the Chinese Mainland
\nOS
Ordinary Shares
\nPI
Partnership Interest
\nPS
Preference Shares
\nU
Units
Name of entity
\nClasses of
\nshares held
\nProportion
\nheld
Registered o\ufb03ce address
\nUnited Global Innovation Fund
U
21.33%
23A, 25th Floor, Asia Centre Building, 173/27-30, 32-33 South Sathon Road,
\nThungmahamek, Sathon, Bangkok 10120, Thailand
\nUOB Smart Global Healthcare Fund
U
42.04%
\nUOB Smart Japan Small and Mid Cap Fund
U
29.79%
\nUOB Smart Millennium Growth Fund
U
38.65%
\nUSD Investment Grade Infrastructure Debt Fund SCSp
U
21.53%
35a, Avenue J.F. Kennedy, L-1855, Luxembourg, Grand Duchy of Luxembourg
\n*
Prudential Assurance Malaysia Berhad is consolidated at 100 per cent in the Group\u2019s consolidated \ufb01nancial statements re\ufb02ecting the economic interest to the Group.
\n\u2020
Prudential BSN Takaful Berhad is a joint venture that is accounted for using the equity method, for which the Group has an economic interest of 70 per cent for all business sold up to
\n23 December 2016 and of 49 per cent for new business sold subsequent to this date.
\n\u2021
The holding of 94.62 per cent for PT. Prudential Life Assurance represents the proportion held in the Indonesia subsidiary attaching to the aggregate of the shares across the types
\nof\u00a0capital\u00a0in\u00a0issue.
\nThe below table lists the issued share capital of the subsidiaries of the Group which, in the opinion of the Directors, principally a\ufb00ect the results or
\nassets of the Group:
\nName of entity
Issued and fully paid up share/ registered capital
\nPrudential Assurance Company Singapore (Pte) Limited
526,557,000 ordinary shares of SG$ 1 each
\nPT. Prudential Life Assurance
105,500 ordinary shares and 6,000 preference shares of Rp 1,000,000 each
\nPrudential Hong Kong Limited
3,641,479,873 ordinary shares of HK$ 1 each
\nPrudential Assurance Malaysia Berhad
100,000,000 ordinary shares of RM 1 each
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfSignificantInvestmentsInSubsidiariesExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f42506": {
"value": "(b) Joint ventures and associates Joint ventures are joint arrangements arising from a contractual agreement whereby the Group and other investors have joint control of the net
\nassets of the arrangement. In a number of these arrangements, the Group\u2019s share of the underlying net assets may be less than 50 per cent but
\nthe terms of the relevant agreement make it clear that control is jointly exercised between the Group and the third party. Associates are entities
\nover which the Group has signi\ufb01cant in\ufb02uence but does not control. Generally, it is presumed that the Group has signi\ufb01cant in\ufb02uence if it holds
\nbetween 20 per cent and 50 per cent voting rights of an entity.
\nWith the exception of those referred to below, the Group accounts for its investments in joint ventures and associates using the equity method
\nof accounting. The Group\u2019s share of pro\ufb01t or loss of its joint ventures and associates is recognised in the income statement and its share of
\nmovements in other comprehensive income is recognised in other comprehensive income. The equity method of accounting does not apply to
\ninvestments in joint ventures and associates held by the Group\u2019s insurance or investment funds, including collective investment schemes which, as
\nallowed by IAS 28 \u2018Investments in Associates and Joint Ventures\u2019, are carried at fair value through pro\ufb01t or loss.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentsInJointVentures",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f42507": {
"value": "(b) Joint ventures and associates Joint ventures are joint arrangements arising from a contractual agreement whereby the Group and other investors have joint control of the net
\nassets of the arrangement. In a number of these arrangements, the Group\u2019s share of the underlying net assets may be less than 50 per cent but
\nthe terms of the relevant agreement make it clear that control is jointly exercised between the Group and the third party. Associates are entities
\nover which the Group has signi\ufb01cant in\ufb02uence but does not control. Generally, it is presumed that the Group has signi\ufb01cant in\ufb02uence if it holds
\nbetween 20 per cent and 50 per cent voting rights of an entity.
\nWith the exception of those referred to below, the Group accounts for its investments in joint ventures and associates using the equity method
\nof accounting. The Group\u2019s share of pro\ufb01t or loss of its joint ventures and associates is recognised in the income statement and its share of
\nmovements in other comprehensive income is recognised in other comprehensive income. The equity method of accounting does not apply to
\ninvestments in joint ventures and associates held by the Group\u2019s insurance or investment funds, including collective investment schemes which, as
\nallowed by IAS 28 \u2018Investments in Associates and Joint Ventures\u2019, are carried at fair value through pro\ufb01t or loss.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentInAssociates",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f42508": {
"value": "(b) Joint ventures and associatesJoint ventures are joint arrangements arising from a contractual agreement whereby the Group and other investors have joint control of the net
\nassets of the arrangement. In a number of these arrangements, the Group\u2019s share of the underlying net assets may be less than 50 per cent but
\nthe terms of the relevant agreement make it clear that control is jointly exercised between the Group and the third party. Associates are entities
\nover which the Group has signi\ufb01cant in\ufb02uence but does not control. Generally, it is presumed that the Group has signi\ufb01cant in\ufb02uence if it holds
\nbetween 20 per cent and 50 per cent voting rights of an entity.
\nWith the exception of those referred to below, the Group accounts for its investments in joint ventures and associates using the equity method
\nof accounting. The Group\u2019s share of pro\ufb01t or loss of its joint ventures and associates is recognised in the income statement and its share of
\nmovements in other comprehensive income is recognised in other comprehensive income. The equity method of accounting does not apply to
\ninvestments in joint ventures and associates held by the Group\u2019s insurance or investment funds, including collective investment schemes which, as
allowed by IAS 28 \u2018Investments in Associates and Joint Ventures\u2019, are carried at fair value through pro\ufb01t or loss. D6.3 Investments in joint ventures and associates
\nJoint ventures represent arrangements where the controlling parties through contractual or other agreement have the rights to the net assets of
\nthe arrangements. The Group has insurance and asset management joint ventures in Chinese Mainland with CITIC Group and an asset
\nmanagement joint venture in India with ICICI Bank. In addition, there is an asset management joint venture in Hong Kong with Bank of China
\nInternational Holdings Limited (BOCI) and Takaful insurance joint venture in Malaysia. For the Group\u2019s joint ventures that are accounted for using
\nthe equity method, the net-of-tax results of these operations are included in the Group\u2019s pro\ufb01t before tax.
\nThe Group\u2019s associates, which are also accounted for using the equity method, include the Indian insurance entity (with the majority
\nshareholder being ICICI Bank).
\nIn addition, the Group has investments in collective investment schemes, funds holding collateralised debt obligations and property funds
\nwhere the Group has signi\ufb01cant in\ufb02uence. As allowed under IAS 28, these investments are accounted for on a FVTPL basis. The aggregate fair
\nvalue of associates accounted for at fair value through pro\ufb01t or loss, where there are published price quotations, is approximately $0.3 billion at
\n31 December 2022 (31 December 2021: $0.6 billion).
\nFor joint ventures and associates accounted for using the equity method, the 12 months \ufb01nancial information of these investments for the
\nyears ended 31 December 2022 and 2021 (covering the same period as that of the Group) has been used in these consolidated \ufb01nancial
\nstatements.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentInAssociatesAndJointVenturesExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f42526": {
"value": "(c) Structured entities Structured entities are those that have been designed so that voting or similar rights are not the dominant factor in deciding who controls the
\nentity. Voting rights relate to administrative tasks. Relevant activities are directed by means of contractual arrangements. The Group invests in
\nboth consolidated and unconsolidated structured entities including investment vehicles such as collective investment schemes, collateralised debt
\nobligations, mortgage-backed securities and similar asset-backed securities.
\nCollective investment schemes
\nThe Group invests in collective investment schemes that invest mainly in equities, bonds, cash and cash equivalents and properties. In assessing
\ncontrol under IFRS 10 \u2018Consolidated Financial Statements\u2019, the Group determines whether it is acting as principal or agent and the variable returns
\nfrom its involvement with these entities. The Group\u2019s percentage ownership in these entities can \ufb02uctuate on a daily basis according to the
\nparticipation of the Group and other investors.
\nWhere the entity is managed by a Group asset manager:
\n>
Where the Group\u2019s ownership holding in the entity exceeds 50 per cent, the Group is judged to have control over the entity;
\n>
Where the Group\u2019s ownership holding in the entity is between 20 per cent and 50 per cent, the facts and circumstances of the Group\u2019s
\ninvolvement in the entity are considered, including the rights to any fees earned by the asset manager, in forming a judgement as to whether
\nthe Group has control over the entity;
\n>
Where the Group\u2019s ownership holding in the entity is less than 20 per cent, the Group is judged to not have control over the entity.
\nWhere the entity is managed by an asset manager outside the Group, an assessment is made of whether the Group has existing rights that gives
\nit the ability to direct the current activities of the entity and therefore control the entity. In assessing the Group\u2019s ability to direct an entity, the
\nGroup considers its ability relative to other investors.
\nWhere the Group is deemed to control an entity, it is treated as a subsidiary and is consolidated, with the interests of investors other than the
\nGroup being classi\ufb01ed as liabilities, and presented within \u2018Net asset value attributable to unit holders of consolidated investment funds\u2019.
\nWhere the Group does not control these entities (where the Group is deemed to be acting as an agent under IFRS 10) and they do not meet the
\nde\ufb01nition of associates, they are carried at FVTPL within \ufb01nancial investments in the Consolidated statement of \ufb01nancial position.
\nWhere the Group\u2019s asset manager sets up investment funds as part of its asset management operations, unless the Group also participates in
\nthe ownership holding of the entities, the Group\u2019s interest is limited to the fees charged to manage the assets of such entities. With no
\nparticipation in ownership holding of these entities, the Group does not retain risks associated with investment funds. For these investment funds,
\nthe Group is not deemed to control the entities but deemed to be acting as an agent.
\nThe Group generates returns and retains the ownership risks in these investment vehicles commensurate to its participation and does not have
\nany further exposure to the residual risks of these investment vehicles.
\nOther structured entities
\nThe Group holds investments in mortgage-backed securities, collateralised debt obligations and similar asset-backed securities, the majority of
\nwhich are actively traded in a liquid market.
\nThe Group consolidates the vehicles that hold the investments where the Group is deemed to control the vehicles. When assessing control over
\nthe vehicles, the factors considered include the purpose and design of the vehicle, the Group\u2019s exposure to the variability of returns and the scope
\nof the Group\u2019s ability to direct the relevant activities of the vehicle including any kick-out or removal rights that are held by third parties. The
\noutcome of the control assessment is dependent on the terms and conditions of the respective individual arrangements.
\nThe majority of such vehicles are not consolidated. In these cases, the Group is not the sponsor of the vehicles in which it holds investments and
\nhas no administrative rights over the vehicles\u2019 activities. The Group generates returns and retains the ownership risks commensurate to its holding
\nand its exposure to the investments and does not have any further exposure to the residual risks or losses of the investments or the vehicles in
\nwhich it holds investments. Accordingly, the Group does not have power over the relevant activities of such vehicles and all are carried at FVTPL
\nwithin \ufb01nancial investments in the Consolidated statement of \ufb01nancial position.
\n343
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Annual Report 2022
\nGroup overview
Strategic report
Governance
Directors\u2019 remuneration report
European Embedded Value (EEV) basis results
Additional information
Financial statements
D Other information
/ continued
\nD6 Investments in subsidiary undertakings, joint ventures and associates
continued
\nD6.1
Basis of consolidation
continued
\nThe table below provides aggregate carrying amounts of the investments in unconsolidated structured entities reported in the Group\u2019s
\nConsolidated statement of \ufb01nancial position:
\nConsolidated statement of \ufb01nancial position line items
\n31 Dec 2022
$m
31 Dec 2021
$m
\nInvestment
\nfunds
\nOther
\nstructured
\nentities
Investment
\nOther
\nstructured
\nentities
\nEquity securities and holdings in collective investment schemes
30,771
\u2013
35,446
\u2013
\nDebt securities
\u2013
370
\u2013
251
\nTotal investments in unconsolidated structured entities
30,771
370
35,446
251
\nThe Group\u2019s maximum exposure to loss related to the interest in unconsolidated structured entities is limited to the carrying value in the
\nConsolidated statement of \ufb01nancial position and the unfunded investment commitments provided by the Group (see note D5).
\nDuring the year, the Group receives dividend and interest income from its investments in these unconsolidated structured entities. Where the
\nGroup\u2019s asset manager manages these entities, such as the collective investment schemes, the Group also receives asset management fees from
\nthese entities.
\nAs at 31 December 2022 and 2021, the Group does not have an agreement, contractual or otherwise, or intention to provide \ufb01nancial support
\nto structured entities (both consolidated and unconsolidated) that could expose the Group to a loss.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfInformationAboutConsolidatedStructuredEntitiesExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f42652": {
"value": "D6.3 Investments in joint ventures and associates
\nJoint ventures represent arrangements where the controlling parties through contractual or other agreement have the rights to the net assets of
\nthe arrangements. The Group has insurance and asset management joint ventures in Chinese Mainland with CITIC Group and an asset
\nmanagement joint venture in India with ICICI Bank. In addition, there is an asset management joint venture in Hong Kong with Bank of China
\nInternational Holdings Limited (BOCI) and Takaful insurance joint venture in Malaysia. For the Group\u2019s joint ventures that are accounted for using
\nthe equity method, the net-of-tax results of these operations are included in the Group\u2019s pro\ufb01t before tax.
\nThe Group\u2019s associates, which are also accounted for using the equity method, include the Indian insurance entity (with the majority
\nshareholder being ICICI Bank).
\nIn addition, the Group has investments in collective investment schemes, funds holding collateralised debt obligations and property funds
\nwhere the Group has signi\ufb01cant in\ufb02uence. As allowed under IAS 28, these investments are accounted for on a FVTPL basis. The aggregate fair
\nvalue of associates accounted for at fair value through pro\ufb01t or loss, where there are published price quotations, is approximately $0.3 billion at
\n31 December 2022 (31 December 2021: $0.6 billion).
\nFor joint ventures and associates accounted for using the equity method, the 12 months \ufb01nancial information of these investments for the
\nyears ended 31 December 2022 and 2021 (covering the same period as that of the Group) has been used in these consolidated \ufb01nancial
\nstatements.
\nThe Group\u2019s share of the pro\ufb01t for shareholder-backed business (including short-term \ufb02uctuations in investment returns), net of related tax, in
\njoint ventures and associates equity accounted for as shown in the Consolidated income statement, is allocated across segments as follows:
\n2022
$m
2021
$m
\nCPL
(144)
278
\nHong Kong
\u2013
9
\nMalaysia
24
28
\nGrowth markets and other
\nnote
\n5
(110)
\nInsurance operations
(115)
205
\nEastspring
144
147
\nTotal segment and Group total
29
352
\nNote
\nFor growth markets and other, as well as the segment results for associates and joint ventures within the segment, the amount shown includes other items of $15 million (2021: $(38) million) which
\nprimarily comprise of taxes for all life joint ventures and associates together with other non-recurring items.
\n344
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prudentialplc.com
There is no other comprehensive income in the joint ventures and associates other than the foreign exchange di\ufb00erences that arise from
\ntranslating the associates and joint ventures into the Group\u2019s presentational currency. There has been no unrecognised share of losses of a joint
\nventure or associate that the Group has stopped recognising in total comprehensive income.
\nThe Group\u2019s interest in joint ventures and associates gives rise to no contingent liabilities or capital commitments that are material to the Group.
\nCITIC-Prudential Life Insurance Company (CPL)
\nCPL is the Group\u2019s joint venture with the CITIC Group in which the Group owns a 50 per cent interest. The joint venture is incorporated in China and
\nis principally engaged in underwriting insurance and investment contracts. The summarised \ufb01nancial information for CPL, which is considered to
\nbe a material joint venture to the Group, is set out below. The \ufb01nancial information represents the entity\u2019s \ufb01nancial statements prepared in
\naccordance with Group\u2019s IFRS accounting policies, on a 100 per cent basis, for the years shown:
\nStatement of \ufb01nancial position:
\n31 Dec 2022
\n$m
\n31 Dec 2021
\n$m
\nTotal assets
31,608
29,237
\nTotal liabilities (including non-controlling interest)
29,330
26,523
\nShareholders\u2019 equity
2,278
2,714
\nThe above amounts of assets and liabilities include the following:
\nCash and cash equivalents
561
422
\nFinancial liabilities (excluding trade and other payables and provisions)
985
938
\nIncome statement:
2022
$m
2021
$m
\nRevenue
5,778
7,374
\nPro\ufb01t for the year after tax
(248)
453
\nThe above pro\ufb01t for the year includes the following:
\nDepreciation and amortisation
(106)
(86)
\nInterest income
599
465
\nInterest expense
(3)
(2)
\nIncome tax credit (charge)
40
(84)
\nThe summarised \ufb01nancial information above is reconciled to the carrying amount of the Group\u2019s interest in the joint venture recognised in the
\nconsolidated \ufb01nancial statements as follows:
\n31 Dec 2022
\n$m
\n31 Dec 2021
\n$m
\nNet assets of CITIC-Prudential Life as shown above
2,278
2,714
\nProportion owned by the joint venture partner (50%)
1,139
1,357
\nCarrying amount of the Group\u2019s interest in the joint venture (50%)
1,139
1,357
\nThe Group has received no dividends from CPL in 2022 (2021: $57 million).
\n345
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\nGroup overview
Strategic report
Governance
Directors\u2019 remuneration report
European Embedded Value (EEV) basis results
Additional information
Financial statements
D Other information
/ continued
\nD6 Investments in subsidiary undertakings, joint ventures and associates
continued
\nD6.4 Related undertakings
\nIn accordance with Section 409 of the Companies Act 2006, a list of Prudential Group\u2019s subsidiaries, joint ventures, associates and signi\ufb01cant
\nholdings (being holdings of more than 20 per cent) is disclosed below, along with the classes of shares held, the registered o\ufb03ce address and the
\ne\ufb00ective percentage of equity owned at 31 December 2022. The Group also operates through branches, none of which are signi\ufb01cant.
\nThe de\ufb01nitions of a subsidiary undertaking, joint venture and associate in accordance with the Companies Act 2006 are di\ufb00erent from the
\nde\ufb01nition under IFRS Standards. As a result, the related undertakings included within the list below may not be the same as the undertakings
\nconsolidated in the Group consolidated \ufb01nancial statements. The Group\u2019s consolidation policy is described in note D6.1.
\nCITIC-
\nPrudential
\nLife Insurance
\nCompany
\nLimited
\n\u2020
\n(CPL
\n)*
\nPT. Prudential
\nLife Assurance
\n(Indonesia)
\n\u2020
\nPrudential
\nAssurance
\nCompany
\nSingapore (Pte)
\nLimited
\n\u2020
\nGrowth markets
\nand other
\nentities
\n\u2020
\n(including Africa,
\nCambodia, India,
\nLaos, Myanmar,
\nPhilippines,
\nTaiwan, Thailand,
\nVietnam)
\nPrudential
\nHong Kong
\nLimited
\nPrudential
\nGeneral
\nInsurance Hong
\nKong Limited
\nPrudential
\nAssurance
\nMalaysia
\nBerhad
\n\u2020
\nEastspring
\nInvestments
\nGroup Pte. Ltd.
\n\u2020
\nand subsidiaries
\nPrudential
\nInternational
\nTreasury
\nLimited
\nPrudential plc
\nPrudential Corporation Asia Limited
\nPrudential Group Holdings Limited
\nand subsidiaries
\n* CPL is a joint venture with CITIC, a leading state owned conglomerate.
\n\u2020 Indirectly held by Prudential Corporation Asia Limited.
\nDirect subsidiary undertakings of the parent company, Prudential plc (shares held directly or via nominees)
\nName of entity
\nClasses of
\nshares held
\nProportion
\nheld
Registered o\ufb03ce address
\nPrudential Corporation Asia Limited
OS
100.00%
13th Floor, One International Finance Centre, 1 Harbour View Street, Central, Hong Kong
\nPrudential Group Holdings Limited
OS
100.00%
1 Angel Court, London, EC2R 7AG, United Kingdom
\nOther subsidiaries, joint ventures, associates and signi\ufb01cant holdings of the Group \u2013 no shares held directly by the parent company (Prudential plc)
\nor its nominees
\nName of entity
\nClasses of
\nshares held
\nProportion
\nheld
Registered o\ufb03ce address
\nAberdeen Cash Creation Fund
U
30.62%
28th Floor Bangkok City Tower, 179 South Sathorn Road, Thungmahamek, Sathorn,
\nBangkok 10120, Thailand
\nAberdeen Standard Global Opportunities Fund
U
34.61%
21 Church Street, #01-01, Capital Square Two, Singapore 049480
\nAberdeen Standard Singapore Equity Fund
U
62.18%
\nAC Financial Partners Limited Partnership
PI
100.00%
65 Haymarket Terrace, Edinburgh, EH12 5HD
\nAlternatives North America, Ltd.
U
100.00%
PO Box 1093, Queensgate House, Grand Cayman, KY1-1102, Cayman Islands
\nBOCHK Aggressive Growth Fund
U
47.75%
27th Floor, Bank of China Tower, 1 Garden Road, Hong Kong
\nBOCHK Balanced Growth Fund
U
41.47%
\nBOCHK China Equity Fund
U
73.71%
\nBOCHK Conservative Growth Fund
U
42.71%
\nBOCHK US Dollar Money Market Fund
U
21.91%
\nBOCI-Prudential Asset Management Limited
OS
36.00%
\nBOCI-Prudential Trustee Limited
OS
36.00%
Suites 1501-1507 & 1513-1516, 15th Floor, 1111 King's Road, Taikoo Shing, Hong Kong
\nCathay High Yield Ex China Cash Pay 1-5 Year 2% Issuer
\nCapped ETF
\nU
42.71%
6th Floor, No.39, Sec.2, Dunhua South. Road, Taipei, Taiwan
\nCITIC-CP Asset Management Co., Ltd.
MI - JV
26.95%
Room 101-2, No.128 North Zhangjiabang Road, Pudong District, Shanghai, China
\nCITIC-Prudential Fund Management Company Limited
MI - JV
49.00%
Level 9, HSBC Building, Shanghai IFC, 8 Century Avenue, Pudong, Shanghai, China
\nCITIC-Prudential Life Insurance Company Limited
MI - JV
50.00%
Room 1101-A, 1201, 1301, 1401, 1501, 1601, 1701, 1801, Unit 01, Building 1, No. B2, North
\nRoad of East Third Ring Road, Chaoyang District, Beijing, PRC,100027, China
\nEastspring Al-Wara' Investments Berhad
OS
100.00%
Level 25, Menara Hong Leong, No. 6 Jalan Damanlela, Bukit Damansara, 50490 Kuala
\nLumpur, Malaysia
\nEastspring Asia Paci\ufb01c High Yield Equity Fund
U
37.57%
4th Floor, No.1, Songzhi Road, Xinyi Dist., Taipei, Taiwan
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Name of entity
\nClasses of
\nshares held
\nProportion
\nheld
Registered o\ufb03ce address
\nEastspring Asset Management (Thailand) Co., Ltd.
OS
59.50%
944 Mitrtown O\ufb03ce Tower, 9th Floor, Rama 4 Road, Wangmai, Pathumwan, Bangkok
\n10330, Thailand
\nEastspring Asset Management Korea Co. Ltd.
OS
100.00%
22nd Floor (Seoul International Finance Center, Yeouido dong), 10 Gukjegeumyung-ro,
\nYeongdeungpo-gu, Seoul, Republic of Korea 07326
\nEastspring Investment K-Short Term Bond Alpha Securities
\nInvestment Trust(Bond Balanced)
\nU
27.54%
22nd Floor One IFC, 10 Gukjegeumyung-ro, Youngdungpo-gu, Seoul 07326, Korea
\nEastspring Investment Management (Shanghai) Company
\nLimited
\nMI - WFOE
100.00%
Unit 306-308, 3rd Floor, Azia Center, 1233 Lujiazui Ring Road, China (Shanghai) Pilot Free
\nTrade Zone, China
\nEastspring Investments - Asia Opportunities Equity Fund
U
99.97%
26, Boulevard Royal, L-2449, Luxembourg
\nEastspring Investments - Global Growth Equity Fund
U
59.04%
\nEastspring Investments - Global Low Volatility Equity Fund
U
96.36%
\nEastspring Investments - Global Technology Fund
U
82.06%
\nEastspring Investments - Pan European Fund
U
61.34%
\nEastspring Investments - US High Yield Bond Fund
U
46.85%
\nEastspring Investments - US Investment Grade Bond Fund
U
68.91%
\nEastspring Investments - World Value Equity Fund
U
95.64%
\nEastspring Investments (Hong Kong) Limited
OS
100.00%
13th Floor, One International Finance Centre, 1 Harbour View Street, Central, Hong Kong
\nEastspring Investments (Luxembourg) S.A.
OS
100.00%
26, Boulevard Royal, L-2449 Luxembourg, Grand Duchy of Luxembourg
\nEastspring Investments (Singapore) Limited
OS
100.00%
10 Marina Boulevard, #32-01, Marina Bay Financial Centre, Singapore 018983
\nEastspring Investments Asia Paci\ufb01c Equity Fund
U
93.92%
26, Boulevard Royal, L-2449, Luxembourg
\nEastspring Investments Asia Paci\ufb01c ex-Japan Target Return
\nFund
\nU
75.84%
Eastspring Investments Berhad, Level 22, Menara Prudential, Persiaran TRX Barat, 55188
\nTun Razak Exchange, Kuala Lumpur, Malaysia
\nEastspring Investments Asia Real Estate Multi Asset Income
\nFund
\nU
73.95%
26, Boulevard Royal, L-2449, Luxembourg
\nEastspring Investments Asia Sustainable Bond Fund
U
93.97%
\nEastspring Investments Asian Bond Fund
U
42.30%
\nEastspring Investments Asian Dynamic Fund
U
91.58%
\nEastspring Investments Asian Equity Fund
U
98.97%
\nEastspring Investments Asian Equity Income Fund
U
87.52%
\nEastspring Investments Asian High Yield Bond Fund
U
44.35%
\nEastspring Investments Asian Investment Grade Bond Fund
U
90.06%
\nEastspring Investments Asian Low Volatility Equity Fund
U
89.01%
\nEastspring Investments Asian Multi Factor Equity Fund
U
90.94%
\nEastspring Investments Berhad
OS
100.00%
Level 25, Menara Hong Leong, No. 6 Jalan Damanlela, Bukit Damansara, 50490 Kuala
\nLumpur, Wilayah Persekutuan, Malaysia
\nEastspring Investments China A Shares Growth Fund
U
63.69%
26, Boulevard Royal, L-2449, Luxembourg
\nEastspring Investments Dragon Peacock Fund
U
95.82%
\nEastspring Investments Emerging Markets Star Players
U
40.88%
Eastspring Investments Limited, Marunouchi Park Bldg., 2-6-1 Marunochi, Chiyoda-ku,
\nTokyo, Japan 100-6905
\nEastspring Investments Equity Income Fund
U
40.95%
Eastspring Investments Berhad, Level 22, Menara Prudential, Persiaran TRX Barat, 55188
\nTun Razak Exchange, Kuala Lumpur, Malaysia
\nEastspring Investments European Investment Grade Bond
\nFund
\nU
99.91%
26, Boulevard Royal, L-2449, Luxembourg
\nEastspring Investments Fund Management Limited
\nLiability Company
\nMI
100.00%
23rd Floor, Saigon Trade Center, 37 Ton Duc Thang Street, District 1, Ho Chi Minh City,
\nVietnam
\nEastspring Investments Global Emerging Markets Bond
\nFund
\nU
99.38%
26, Boulevard Royal, L-2449, Luxembourg
\nEastspring Investments Global Emerging Markets Dynamic
\nFund
\nU
62.79%
\nEastspring Investments Global Emerging Markets ex-China
\nDynamic Fund
\nU
99.96%
\nEastspring Investments Global Equity Navigator Fund
U
97.19%
\nEastspring Investments Global Growth Fund
U
40.22%
Eastspring Investments Berhad, Level 22, Menara Prudential, Persiaran TRX Barat, 55188
\nTun Razak Exchange, Kuala Lumpur, Malaysia
\nEastspring Investments Global Market Navigator Fund
U
99.75%
26, Boulevard Royal, L-2449, Luxembourg
\nEastspring Investments Global Multi Asset Income Plus
\nGrowth Fund
\nU
100.00%
\nEastspring Investments Greater China Equity Fund
U
90.60%
\nEastspring Investments Group Pte. Ltd.
OS
100.00%
10 Marina Boulevard, #32-01, Marina Bay Financial Centre, Singapore 018983
\nEastspring Investments Incorporated
OS
100.00%
874 Walker Road, Suite C, City of Dover, County of Kent, State of Delaware, 19904, USA
\nEastspring Investments India Consumer Equity Open
\nLimited
\nOS
100.00%
3rd Floor, 355 NEX, Rue du Savoir, Cybercity Ebene 72201, Mauritius
\nEastspring Investments India Equity Fund
U
79.97%
26, Boulevard Royal, L-2449, Luxembourg
\nEastspring Investments India Equity Open Limited
OS
100.00%
3rd Floor, 355 NEX, Rue du Savoir, Cybercity Ebene 72201, Mauritius
\nEastspring Investments India Infrastructure Equity Open
\nLimited
\nOS
100.00%
\nKey to share classes:
\nLBG
Limited by Guarantee
\nMI
Membership Interest
\nMI - WFOE
Membership Interest of a Wholly Foreign Owned Enterprise in the Chinese Mainland
\nMI \u2013 JV
Membership Interest of a Sino-Foreign Equity Joint Venture in the Chinese Mainland
\nOS
Ordinary Shares
\nPI
Partnership Interest
\nPS
Preference Shares
\nU
Units
\n347
Prudential plc
Annual Report 2022
\nGroup overview
Strategic report
Governance
Directors\u2019 remuneration report
European Embedded Value (EEV) basis results
Additional information
Financial statements
D Other information
/ continued
\nName of entity
\nClasses of
\nshares held
\nProportion
\nheld
Registered o\ufb03ce address
\nEastspring Investments Limited
OS
100.00%
Marunouchi Park Building, 6-1 Marunouchi 2-chome, Chiyoda-Ku, Tokyo, Japan
\nEastspring Investments MY Focus Fund
U
28.33%
Eastspring Investments Berhad, Level 22, Menara Prudential, Persiaran TRX Barat, 55188
\nTun Razak Exchange, Kuala Lumpur, Malaysia
\nEastspring Investments Private Fixed Income Fund Number 1
U
87.11%
Units 306-308, 3rd Floor, Azia Center 1233 Lujiazui Ring Road, Shanghai, China
\nEastspring Investments Services Pte. Ltd.
OS
100.00%
10 Marina Boulevard, #32-01, Marina Bay Financial Centre, Singapore 018983
\nEastspring Investments SICAV-FIS \u2013 Alternative
\nInvestments Fund
\nU
100.00%
26, Boulevard Royal, L-2449, Luxembourg
\nEastspring Investments SICAV-FIS \u2013 Asia Paci\ufb01c Loan Fund
U
100.00%
\nEastspring Investments Syariah Equity Islamic Asia Paci\ufb01c
\nUSD Kelas B
\nU
88.02%
Prudential Tower, 23rd Floor, Jl. Jend. Sudirman Kav.79, Jakarta 12910, Indonesia
\nEastspring Investments Unit Trusts - Dragon Peacock Fund
U
97.69%
10 Marina Boulevard, #32-01, Marina Bay Financial Centre, Singapore 018983
\nEastspring Investments Unit Trusts Singapore ASEAN
\nEquity Fund
\nU
98.74%
\nEastspring Investments Unit Trusts Singapore Select Bond
\nFund
\nU
66.05%
\nEastspring Investments US Corporate Bond Fund
U
60.04%
26, Boulevard Royal, L-2449, Luxembourg
\nEastspring Investments US High Investment Grade Bond
\nFund
\nU
87.42%
\nEastspring Investments Vietnam Navigator Fund
U
76.79%
23rd Floor, Saigon Trade Center Building, 37 Ton Duc Thang Street, Ben Nghe Ward,
\nDistrict 1, Ho Chi Minh City, Vietnam
\nEastspring Investments-Global Emerging Markets
\nFundamental Value Fund
\nU
99.96%
26, Boulevard Royal, L-2449, Luxembourg
\nEastspring Investments-Japan Sustainable Value Fund
U
100.00%
\nEastspring Overseas Investment Fund Management
\n(Shanghai) Company Limited
\nMI - WFOE
100.00%
Unit 306-308, 3rd Floor, 1233 Lujiazui Ring Road, China (Shanghai) Pilot Free Trade Zone,
\nChina
\nEastspring Private Equity Fund 2
U
99.99%
10 Marina Boulevard, #32-01, Marina Bay Financial Centre Tower 2, Singapore 018983
\nEastspring Securities Investment Trust Co., Ltd.
OS
99.54%
4th Floor, No.1 Songzhi Road, Taipei 110, Taiwan
\nEastspring Singapore Alternatives VCC
U
100.00%
10 Marina Boulevard, #32-01, Marina Bay Financial Centre, Singapore 018983
\nEastspring Syariah Fixed Income USD Kelas A
U
69.23%
Prudential Tower Lantai 23, JI. Jend. Sudirman Kav. 79, Jakarta 12910, Indonesia
\nFCP Ecobank Actions Uemoa
U
43.63%
Immeuble Ecobank, 2Er Etage -Avenue Houdaille Plateau, 01 B.P 4107 Abidjan O1 Cote
\nD\u2019Ivoire
\nFirst Sentier Global Property Securities Fund
U
67.50%
79 Robinson Road, #17-01, Singapore 068897
\nFSSA China Focus Fund
U
67.76%
70 Sir John Rogerson\u2019s Quay, Dublin 2, D02 R296, Ireland
\nFubon 1-5 Years US High Yield Bond Ex China
U
61.05%
8th Floor, No.108, Sec.1, Dunhua South. Road, Taipei, Taiwan
\nFubon China Bond Umbrella Fund - Fubon China Quality
\nRmb Bond Fund
\nU
23.37%
\nFubon China Currency Fund
U
35.49%
\nFuh Hwa 1-5 Yr High Yield ETF
U
44.22%
8th & 9th Floor, No.308, Sec. 2, Bade Road, Da-an District
\nFuh Hwa Emerging Market RMB Fixed Income Fund
U
46.42%
\nFuh Hwa Rmb Money Market Fund
U
37.52%
\nFurnival Insurance Company PCC Limited
OS
100.00%
PO Box 155, Mill Court, La Charroterie, St Peter Port, GY1 4ET, Guernsey
\nGIS Total Return Bond Fund
U
27.53%
78 Sir John Rogerson's Quay, Dublin, D02 HD32, Ireland
\nGS Twenty Two Limited
OS
100.00%
1 Angel Court, London, EC2R 7AG, United Kingdom
\nHSBC Asia Paci\ufb01c Ex Japan Sustainable Equity UCITS ETF
U
63.65%
25/28 North Wall Quay, IFSC, Dublin 1, Ireland
\nHSBC Senior Global Infrastructure Debt Fund
U
100.00%
8 Canada Square, London, E14 5HQ, United Kingdom
\nICICI Prudential Asset Management Company Limited
OS
49.00%
12th Floor, Narain Manzil, 23, Barakhamba Road, New Delhi 110001, India
\nICICI Prudential Life Insurance Company Limited
OS
22.07%
ICICI PruLife Towers, 1089 Appasaheb Marathe Marg, Prabhadevi,
\nMumbai 400025, India
\nICICI Prudential Pension Funds Management Company
\nLimited
\nOS
22.07%
\nICICI Prudential Trust Limited
OS
49.00%
12th Floor, Narain Manzil, 23, Barakhamba Road, New Delhi 110001, India
\nIndia Innovation High Growth EQ QII
U
100.00%
Eastspring Investments Limited, Marunouchi Park Bldg., 2-6-1 Marunochi, Chiyoda-ku,
\nTokyo, Japan 100-6905
\nInvesco Fixed Maturity Selective Emerging Market Bonds
\n2024
\nU
100.00%
8th Floor, No 122, Tung Hua N. Rd. Taipei, Taiwan
\nInvesco Select 6 Year Maturity Global Bond Fund
U
100.00%
\niShares Core MSCI Asia
U
61.46%
15th, 16th, 17th Floor, Champion Tower & 17th Floor ICBC Tower, Three Garden Road,
\nCentral, Hong Kong
\niShares Global High Yield Corp Bond UCITS ETF
U
65.61%
200 Capital Dock, 79 Sir John Rogerson\u2019s Quay, Dublin 2, Ireland
\niShares MSCI Europe ESG Enhanced UCITS ETF
U
51.34%
12 Throgmorton Avenue, London, EC2N 2DL
\niShares MSCI Korea UCITS ETF USD (Acc)
U
53.66%
200 Capital Dock, 79 Sir John Rogerson\u2019s Quay, Dublin 2, Ireland
\nD6 Investments in subsidiary undertakings, joint ventures and associates
continued
\nD6.4 Related undertakings
continued
\nDirect subsidiary undertakings of the parent company, Prudential plc (shares held directly or via nominees)
continued
\n348
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prudentialplc.com
Name of entity
\nClasses of
\nshares held
\nProportion
\nheld
Registered o\ufb03ce address
\niShares MSCI USA ESG Enhanced UCITS ETF
U
41.86%
12 Throgmorton Avenue, London, EC2N 2DL
\nKKP Active Equity Fund
U
35.38%
19th Floor Muang Thai-Phatra Complex, Building Tower, A, 252/25 Ratchadapisek Road,
\nHuaykwang, Bangkok 10310, Thailand
\nKrungsri Greater China Equity Hedged Dividend Fund
U
31.10%
12th, 18th Zone B Floor, Ploenchit Tower 898 Ploenchit Road, Lumpini Pathumwan,
\nBangkok 10330, Thailand
\nLasalle Property Securities SICAV-FIS
U
99.97%
11-13 Bouldevard de la Foire, L-1528 Luxembourg
\nM&G Asia Property Trust
U
100.00%
138 Market Street, CapitaGreen #35-01, Singapore 048946
\nM&G Real Estate Asia Holding Company Pte. Ltd.
OS
33.00%
138 Market Street, #35-01 CapitaGreen, Singapore 048946
\nManulife Asia Paci\ufb01c Bond Fund
U
57.81%
9th Floor, No 89 Son Ren Road, Taipei, Taiwan
\nManulife China Dim Sum High Yield Bond Fund
U
22.54%
\nManulife China O\ufb00shore Bond Fund
U
85.22%
\nManulife Taiwan Dynamic Fund
U
20.53%
\nManulife USD High Yield Bond Fund
U
29.47%
\nNomura Six Years Fixed Maturity Asia Paci\ufb01c Emerging
\nMarket Bond Fund
\nU
100.00%
101 Tower, 30th Floor, No. 7 Sec. 5, Xinyi Rd., Xinyi Dist., Taipei, Taiwan
\nNomura Six Years Fixed Maturity Emerging Market Bond
\nFund
\nU
41.88%
\nNomura Six Years Ladder Maturity Asia Paci\ufb01c Emerging
\nMarket Bond Fund
\nU
97.86%
\nNorth Sathorn Holdings Company Limited
OS
100.00%
No. 63, Athenee Tower, 34th Floor, Wireless Road, Lumpini Subdistrict Pathumwan District,
\nBangkok Metropolis, Thailand
\nPCA IP Services Limited
OS
100.00%
13th Floor, One International Finance Centre, 1 Harbour View Street, Central, Hong Kong
\nPCA Life Assurance Co., Ltd.
OS
99.79%
8th Floor, No.1 Songzhi Road, Taipei City, 11047, Taiwan
\nPCA Reinsurance Co. Ltd.
OS
100.00%
Unit Level 13(A), Main O\ufb03ce Tower, Financial Park Labuan, Jalan Merdeka, 87000 Federal
\nTerritory of Labuan, Malaysia
\nPineBridge US Dual Core Income Fund
U
37.37%
10th Floor, No. 144, Sec. 2, Minquan East Rd, Taipei
\nPrincipal Global Silver Age Fund
U
22.89%
44, 16th Floor, CIMB Thai Bank, Lungsuan Road, Lumpini, Bangkok 10330, Thailand
\nPru Life Insurance Corporation of U.K.
OS
100.00%
9th Floor, Uptown Place Tower 1, 1 East 11th Drive, Uptown Bonifacio, 1634 Taguig City,
\nMetro Manila, Philippines
\nPru Life UK Asset Management and Trust Corporation
OS
100.00%
\nPrudence Foundation
LBG
100.00%
13th Floor, One International Finance Centre, 1 Harbour View Street, Central, Hong Kong
\nPrudential (Cambodia) Life Assurance Plc
OS
100.00%
Phnom Penh Tower, 20th Floor, #445, Monivong Blvd., Boeung Prolit, 7 Makara, Phnom
\nPenh, Cambodia
\nPrudential (US Holdco 1) Limited
OS
100.00%
1 Angel Court, London, EC2R 7AG, United Kingdom
\nPrudential Africa Holdings Limited
OS
100.00%
\nPrudential Africa Services Limited
OS
100.00%
3rd Floor, One Africa Place, LR. No. 1870/X/45, P.O. Box 25093-00100, Westlands, Nairobi,
\nKenya
\nPrudential Assurance Company Singapore (Pte) Limited
OS
100.00%
30 Cecil Street, #30-01 Prudential Tower, Singapore 049712
\nPrudential Assurance Malaysia Berhad
\n*
\nOS
51.00%
Level 26, Menara Prudential, Persiaran TRX Barat, 55188 Tun Razak Exchange, Kuala
\nLumpur, Malaysia
\nPrudential Assurance Uganda Limited
OS
100.00%
9th Floor Zebra Plaza, Plot 23 Kampala Road, P.O. Box 2660, Kampala, Uganda
\nPrudential BeGeneral Insurance C\u00f4te d'Ivoire S.A.
OS
51.00%
Abidjan Plateau, Avenue Nogu\u00e8s, Immeuble Woodin Center, 1er \u00e9tage, 01 P.O. BOX 5173,
\nAbidjan 01, C\u00f4te d'Ivoire
\nPrudential Belife Insurance C\u00f4te d'Ivoire S.A.
OS
51.00%
\nPrudential Bene\ufb01cial General Insurance Cameroon S.A.
OS
50.71%
1944, Boulevard de la R\u00e9publique Douala-Akwa, P.O. BOX 2328, Douala, Cameroon
\nPrudential Bene\ufb01cial Life Insurance Cameroon S.A.
OS
51.00%
\nPrudential Bene\ufb01cial Life Insurance Togo S.A.
OS
50.99%
2963 Rue de la Chance Agbalepedogan, P.O. Box 1115, Lome, Togo
\nPrudential BSN Takaful Berhad
\n\u2020
\nOS
49.00%
Level 13, Menara Prudential, Persiaran TRX Barat, 55188 Tun Razak Exchange, Kuala
\nLumpur, Malaysia
\nPrudential Corporation Holdings Limited
OS
100.00%
1 Angel Court, London, EC2R 7AG, United Kingdom
\nPrudential Financial Advisers Singapore Pte. Ltd.
OS
100.00%
30 Cecil Street, #30-01 Prudential Tower, Singapore 049712
\nPrudential Financial Partners (Asia) Limited
OS
100.00%
1 Angel Court, London, EC2R 7AG, England, United Kingdom
\nPrudential Financial Partners HK Limited
OS
100.00%
13th Floor, One International Finance Centre, 1 Harbour View Street, Central, Hong Kong
\nPrudential General Insurance Hong Kong Limited
OS
100.00%
59th Floor, One Island East, 18 Westlands Road, Quarry Bay, Hong Kong
\nPrudential Group Secretarial Services HK Limited
OS
100.00%
13th Floor, One International Finance Centre, 1 Harbour View Street, Central, Hong Kong
\nPrudential Group Secretarial Services Limited
OS
100.00%
1 Angel Court, London, EC2R 7AG, United Kingdom
\nPrudential Holdings Limited
OS
100.00%
4th Floor, Saltire Court, 20, Castle Terrace, Edinburgh, EH1 2EN, United Kingdom
\nPrudential Hong Kong Limited
OS
100.00%
59th Floor, One Island East, 18 Westlands Road, Quarry Bay, Hong Kong
\nPrudential International Treasury Limited
OS
100.00%
13th Floor, One International Finance Centre, 1 Harbour View Street, Central, Hong Kong
\nPrudential IP Services Limited
OS
100.00%
1 Angel Court, London, EC2R 7AG, United Kingdom
\nPrudential Life Assurance (Lao) Company Limited
OS
100.00%
5th Floor, Lao international Business and Tourist Center Project (Vientiane Center),
\nKhouvieng Road, Nongchan Village, Sisattanak District, Vientiane Capital, Lao PDR
\nPrudential Life Assurance (Thailand) Public Company
\nLimited
\nOS
99.93%
944 Mitrtown O\ufb03ce Tower, 10th, 29th-31st Floor, Rama 4 Road, Wangmai, Pathumwan,
\nBangkok, 10330, Thailand
\nPrudential Life Assurance Kenya Limited
OS
100.00%
Vienna Court, Ground Floor, State House Crescent, O\ufb00 State House Avenue, P.O. Box
\n25093-00603, Nairobi, Kenya
\nPrudential Life Assurance Zambia Limited
OS
100.00%
Prudential House, Plot No. 32256, Thabo Mbeki Road, P.O. Box 31357, Lusaka, Zambia
\nKey to share classes:
\nLBG
Limited by Guarantee
\nMI
Membership Interest
\nMI - WFOE
Membership Interest of a Wholly Foreign Owned Enterprise in the Chinese Mainland
\nMI \u2013 JV
Membership Interest of a Sino-Foreign Equity Joint Venture in the Chinese Mainland
\nOS
Ordinary Shares
\nPI
Partnership Interest
\nPS
Preference Shares
\nU
Units
\n349
Prudential plc
Annual Report 2022
\nGroup overview
Strategic report
Governance
Directors\u2019 remuneration report
European Embedded Value (EEV) basis results
Additional information
Financial statements
D Other information
/ continued
\nName of entity
\nClasses of
\nshares held
\nProportion
\nheld
Registered o\ufb03ce address
\nPrudential Life Insurance Ghana Limited
OS
100.00%
H/NO. 35, Opp. Hobats Clinic, North Street, Tesano, Accra, Accra Metropolitan, Greater
\nAccra, P.O. Box AN 10476, Ghana
\nPrudential Life Vault Limited
OS
100.00%
48 Awolowo Road, South-West Ikoyi, Lagos, Nigeria
\nPrudential Mauritius Holdings Limited
OS
100.00%
3rd Floor, 355 NEX, Rue du Savoir, Cybercity Ebene, 72201, Mauritius
\nPrudential Myanmar Life Insurance Limited
OS
100.00%
#15-01, 15th Floor, Sule Square, 221 Sule Pagoda Road, Kyauktada Township, Yangon,
\nMyanmar
\nPrudential Pensions Management Zambia Limited
OS
49.00%
Prudential House, Plot No. 32256, Thabo Mbeki Road, P.O. Box 31357, Lusaka, Zambia
\nPrudential Services Asia Sdn. Bhd.
OS
100.00%
Suite 1005, 10th Floor, Wisma Hamzah-Kwong Hing, No. 1 Leboh Ampang, 50100 Kuala
\nLumpur, Malaysia
\nPS
100.00%
\nPrudential Services Limited
OS
100.00%
1 Angel Court, London, EC2R 7AG, United Kingdom
\nPrudential Services Philippines Corporation
OS
100.00%
19th Floor Uptown Place Tower I East, 11th Drive Uptown Bonifacio Fort Bonifacio
\nBonifacio Global City, Taguig City, Fourth District, National Capital Region (NCR), 1630,
\nPhilippines
\nPrudential Services Singapore Pte. Ltd.
OS
100.00%
7 Straits View, #06-01 Marina One East Tower, Singapore 018936
\nPrudential Singapore Holdings Pte. Limited
OS
100.00%
30 Cecil Street, #30-01 Prudential Tower, Singapore 049712
\nPS
100.00%
\nPrudential Technology and Services India Private Limited
OS
100.00%
CoWrks NXT, EPIP Industrial Area, White\ufb01eld Road, K.R Puram, Near SAP Labs, Hubli,
\nBangalore, Karnataka, 560066, India
\nPrudential Vietnam Assurance Private Limited
OS
100.00%
25th Floor, Saigon Trade Center, 37 Ton Duc Thang Street, District 1, Ho Chi Minh City,
\nVietnam
\nPrudential Wealth Holdings Company Pte. Ltd.
OS
100.00%
7 Straits View #07-01, Marina One East Tower, Singapore 018936, Singapore
\nPrudential Wealth Management Singapore Pte. Ltd.
OS
100.00%
8 Marina View #15-06A, Asia Square Tower 1, Singapore 018960, Singapore
\nPrudential Zenith Life Insurance Limited
OS
51.00%
13th Floor, Civic Towers, Ozumba Mbadiwe Avenue, Victoria Island, Lagos State, Lagos,
\nNigeria
\nPRUInvest PHP Liquid Fund
U
99.84%
9th Floor, Uptown Place Tower 1, 1 East 11th Drive, Uptown Bonifacio, 1634 Taguig City,
\nMetro Manila, Philippines
\nPRUInvest PH Equity Index Tracker Fund
U
100.00%
\nPT Prudential Sharia Life Assurance
OS
94.62%
Prudential Tower, 2nd Floor, Jl. Jend. Sudirman Kav. 79, Jakarta 12910, Indonesia
\nPT. Eastspring Investments Indonesia
OS
99.95%
Prudential Tower, 23rd Floor, Jl. Jend. Sudirman Kav.79, Jakarta 12910, Indonesia
\nPT. Prudential Life Assurance
\n\u2021
\nOS
94.62%
Prudential Tower, Jl. Jend. Sudirman Kav. 79, Jakarta 12910, Indonesia
\nPulse Ecosystems Pte. Ltd.
OS
100.00%
7 Straits View, #06-01 Marina One East Tower, Singapore 018936
\nPulse Wealth Limited
OS
100.00%
Suite 3703-04, 37/F, Tower 6, The Gateway, Harbour City, 9 Canton Road, Tsim Sha Tsui,
\nKowloon, Hong Kong
\nReksa Dana Eastspring IDR Fixed Income Fund
U
98.81%
Prudential Tower, 23rd Floor, Jl. Jend. Sudirman Kav.79, Jakarta 12910, Indonesia
\nReksa Dana Eastspring Investments Cash Reserve
U
88.93%
\nReksa Dana Syariah Eastspring Syariah Fixed Income
\nAmanah
\nU
66.32%
\nReksa Dana Syariah Eastspring Syariah Money Market
\nKhazanah
\nU
99.30%
\nReksa Dana Syariah Penyertaan Terbatas Bahana Syariah
\nBumn Fund IV
\nU
99.01%
Graha CIMB Niaga 21st Floor. Jl Jend Sudirman Kav 58, Jakarta - 12190, Indonesia
\nRhodium Investment Funds - Singapore Bond Fund
U
99.75%
10 Marina Boulevard, #32-01, Marina Bay Financial Centre Tower 2, Singapore 018983
\nRhodium Passive Long Dated Bond Fund
U
99.87%
\nRobeco QI European Active Index Equities
U
94.55%
6, route de Tr\u00e8ves, L-2633 Senningerberg, Grand Duchy of Luxembourg
\nSchroder Asian Investment Grade Credit
U
37.95%
138 Market Street, #23-01 CapitaGreen, Singapore 048946
\nSchroder Emerging Markets Fund
U
67.30%
\nSchroder Multi-Asset Revolution
U
48.29%
\nSchroder US Dollar Money Fund
U
34.92%
9th \ufb02oor, no. 108, section 5, xinyi road, taipei
\nScotts Spazio Pte. Ltd.
OS
45.00%
316 Tanglin Road, #01-01,Singapore, 247978
\nShenzhen Prudential Technology Limited
MI - WFOE
100.00%
Unit 5, 8th Floor, China Resources Tower, No.2666 Keyuan South Road, Yuehai Street,
\nNanshan District, Shenzhen 518054, China
\nSinopac RMB Money Market Fund
U
27.12%
14th Floor, No.17,Po Ai Rd., Taipei, Taiwan
\nSri Han Suria Sdn. Bhd.
OS
51.00%
Suite 1005, 10th Floor, Wisma Hamzah-Kwong Hing, No. 1 Leboh Ampang, 50100 Kuala
\nLumpur, Malaysia
\nStaple Limited
OS
100.00%
No. 63, Athenee Tower, 34th Floor, Wireless Road, Lumpini Subdistrict Pathumwan District,
\nBangkok Metropolis, Thailand
\nTempleton Asian Growth Fund
U
31.40%
8A, rue Albert Borschette, L-1246 Luxembourg
\nThreadneedle (Lux) \u2013 Global Emerging Market Equities
U
69.10%
44 Rue de la vall\u00e9e, 2661 Luxembourg
\nD6 Investments in subsidiary undertakings, joint ventures and associates
continued
\nD6.4 Related undertakings
continued
\nDirect subsidiary undertakings of the parent company, Prudential plc (shares held directly or via nominees)
continued
\n350
Prudential plc
Annual Report 2022
prudentialplc.com
Name of entity
\nClasses of
\nshares held
\nProportion
\nheld
Registered o\ufb03ce address
\nUnited Global Innovation Fund
U
21.33%
23A, 25th Floor, Asia Centre Building, 173/27-30, 32-33 South Sathon Road,
\nThungmahamek, Sathon, Bangkok 10120, Thailand
\nUOB Smart Global Healthcare Fund
U
42.04%
\nUOB Smart Japan Small and Mid Cap Fund
U
29.79%
\nUOB Smart Millennium Growth Fund
U
38.65%
\nUSD Investment Grade Infrastructure Debt Fund SCSp
U
21.53%
35a, Avenue J.F. Kennedy, L-1855, Luxembourg, Grand Duchy of Luxembourg
\n*
Prudential Assurance Malaysia Berhad is consolidated at 100 per cent in the Group\u2019s consolidated \ufb01nancial statements re\ufb02ecting the economic interest to the Group.
\n\u2020
Prudential BSN Takaful Berhad is a joint venture that is accounted for using the equity method, for which the Group has an economic interest of 70 per cent for all business sold up to
\n23 December 2016 and of 49 per cent for new business sold subsequent to this date.
\n\u2021
The holding of 94.62 per cent for PT. Prudential Life Assurance represents the proportion held in the Indonesia subsidiary attaching to the aggregate of the shares across the types
\nof\u00a0capital\u00a0in\u00a0issue.
\nThe below table lists the issued share capital of the subsidiaries of the Group which, in the opinion of the Directors, principally a\ufb00ect the results or
\nassets of the Group:
\nName of entity
Issued and fully paid up share/ registered capital
\nPrudential Assurance Company Singapore (Pte) Limited
526,557,000 ordinary shares of SG$ 1 each
\nPT. Prudential Life Assurance
105,500 ordinary shares and 6,000 preference shares of Rp 1,000,000 each
\nPrudential Hong Kong Limited
3,641,479,873 ordinary shares of HK$ 1 each
\nPrudential Assurance Malaysia Berhad
100,000,000 ordinary shares of RM 1 each",
"dimensions": {
"concept": "ifrs-full:DisclosureOfSignificantInvestmentsInAssociatesExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f42672": {
"value": "The Group\u2019s share of the pro\ufb01t for shareholder-backed business (including short-term \ufb02uctuations in investment returns), net of related tax, in joint ventures and associates equity accounted for as shown in the Consolidated income statement, is allocated across segments as follows:
\n2022
$m
2021
$m
\nCPL
(144)
278
\nHong Kong
\u2013
9
\nMalaysia
24
28
\nGrowth markets and other
\nnote
\n5
(110)
\nInsurance operations
(115)
205
\nEastspring
144
147
\nTotal segment and Group total
29
352
\nNote
\nFor growth markets and other, as well as the segment results for associates and joint ventures within the segment, the amount shown includes other items of $15 million (2021: $(38) million) which
\nprimarily comprise of taxes for all life joint ventures and associates together with other non-recurring items.
\n344
Prudential plc
Annual Report 2022
prudentialplc.com
There is no other comprehensive income in the joint ventures and associates other than the foreign exchange di\ufb00erences that arise from
\ntranslating the associates and joint ventures into the Group\u2019s presentational currency. There has been no unrecognised share of losses of a joint
\nventure or associate that the Group has stopped recognising in total comprehensive income.
\nThe Group\u2019s interest in joint ventures and associates gives rise to no contingent liabilities or capital commitments that are material to the Group.",
"dimensions": {
"concept": "ifrs-full:DisclosureOfInvestmentsAccountedForUsingEquityMethodExplanatory",
"language": "en",
"entity": "scheme:5493001Z3ZE83NGK8Y12",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f42730": {
"value": "CITIC-Prudential Life Insurance Company (CPL)
\nCPL is the Group\u2019s joint venture with the CITIC Group in which the Group owns a 50 per cent interest. The joint venture is incorporated in China and
\nis principally engaged in underwriting insurance and investment contracts. The summarised \ufb01nancial information for CPL, which is considered to
\nbe a material joint venture to the Group, is set out below. The \ufb01nancial information represents the entity\u2019s \ufb01nancial statements prepared in
\naccordance with Group\u2019s IFRS accounting policies, on a 100 per cent basis, for the years shown:
\nStatement of \ufb01nancial position:
\n31 Dec 2022
\n$m
\n31 Dec 2021
\n$m
\nTotal assets
31,608
29,237
\nTotal liabilities (including non-controlling interest)
29,330
26,523
\nShareholders\u2019 equity
2,278
2,714
\nThe above amounts of assets and liabilities include the following:
\nCash and cash equivalents
561
422
\nFinancial liabilities (excluding trade and other payables and provisions)
985
938
\nIncome statement:
2022
$m
2021
$m
\nRevenue
5,778
7,374
\nPro\ufb01t for the year after tax
(248)
453
\nThe above pro\ufb01t for the year includes the following:
\nDepreciation and amortisation
(106)
(86)
\nInterest income
599
465
\nInterest expense
(3)
(2)
\nIncome tax credit (charge)
40
(84)
\nThe summarised \ufb01nancial information above is reconciled to the carrying amount of the Group\u2019s interest in the joint venture recognised in the
\nconsolidated \ufb01nancial statements as follows:
\n31 Dec 2022
\n$m
\n31 Dec 2021
\n$m
\nNet assets of CITIC-Prudential Life as shown above
2,278
2,714
\nProportion owned by the joint venture partner (50%)
1,139
1,357
\nCarrying amount of the Group\u2019s interest in the joint venture (50%)
1,139
1,357
\nThe Group has received no dividends from CPL in 2022 (2021: $57 million).
D6.4 Related undertakings
\nIn accordance with Section 409 of the Companies Act 2006, a list of Prudential Group\u2019s subsidiaries, joint ventures, associates and signi\ufb01cant
\nholdings (being holdings of more than 20 per cent) is disclosed below, along with the classes of shares held, the registered o\ufb03ce address and the
\ne\ufb00ective percentage of equity owned at 31 December 2022. The Group also operates through branches, none of which are signi\ufb01cant.
\nThe de\ufb01nitions of a subsidiary undertaking, joint venture and associate in accordance with the Companies Act 2006 are di\ufb00erent from the
\nde\ufb01nition under IFRS Standards. As a result, the related undertakings included within the list below may not be the same as the undertakings
\nconsolidated in the Group consolidated \ufb01nancial statements. The Group\u2019s consolidation policy is described in note D6.1.
\nCITIC-
\nPrudential
\nLife Insurance
\nCompany
\nLimited
\n\u2020
\n(CPL
\n)*
\nPT. Prudential
\nLife Assurance
\n(Indonesia)
\n\u2020
\nPrudential
\nAssurance
\nCompany
\nSingapore (Pte)
\nLimited
\n\u2020
\nGrowth markets
\nand other
\nentities
\n\u2020
\n(including Africa,
\nCambodia, India,
\nLaos, Myanmar,
\nPhilippines,
\nTaiwan, Thailand,
\nVietnam)
\nPrudential
\nHong Kong
\nLimited
\nPrudential
\nGeneral
\nInsurance Hong
\nKong Limited
\nPrudential
\nAssurance
\nMalaysia
\nBerhad
\n\u2020
\nEastspring
\nInvestments
\nGroup Pte. Ltd.
\n\u2020
\nand subsidiaries
\nPrudential
\nInternational
\nTreasury
\nLimited
\nPrudential plc
\nPrudential Corporation Asia Limited
\nPrudential Group Holdings Limited
\nand subsidiaries
\n* CPL is a joint venture with CITIC, a leading state owned conglomerate.
\n\u2020 Indirectly held by Prudential Corporation Asia Limited.
\nDirect subsidiary undertakings of the parent company, Prudential plc (shares held directly or via nominees)
\nName of entity
\nClasses of
\nshares held
\nProportion
\nheld
Registered o\ufb03ce address
\nPrudential Corporation Asia Limited
OS
100.00%
13th Floor, One International Finance Centre, 1 Harbour View Street, Central, Hong Kong
\nPrudential Group Holdings Limited
OS
100.00%
1 Angel Court, London, EC2R 7AG, United Kingdom
\nOther subsidiaries, joint ventures, associates and signi\ufb01cant holdings of the Group \u2013 no shares held directly by the parent company (Prudential plc)
\nor its nominees
\nName of entity
\nClasses of
\nshares held
\nProportion
\nheld
Registered o\ufb03ce address
\nAberdeen Cash Creation Fund
U
30.62%
28th Floor Bangkok City Tower, 179 South Sathorn Road, Thungmahamek, Sathorn,
\nBangkok 10120, Thailand
\nAberdeen Standard Global Opportunities Fund
U
34.61%
21 Church Street, #01-01, Capital Square Two, Singapore 049480
\nAberdeen Standard Singapore Equity Fund
U
62.18%
\nAC Financial Partners Limited Partnership
PI
100.00%
65 Haymarket Terrace, Edinburgh, EH12 5HD
\nAlternatives North America, Ltd.
U
100.00%
PO Box 1093, Queensgate House, Grand Cayman, KY1-1102, Cayman Islands
\nBOCHK Aggressive Growth Fund
U
47.75%
27th Floor, Bank of China Tower, 1 Garden Road, Hong Kong
\nBOCHK Balanced Growth Fund
U
41.47%
\nBOCHK China Equity Fund
U
73.71%
\nBOCHK Conservative Growth Fund
U
42.71%
\nBOCHK US Dollar Money Market Fund
U
21.91%
\nBOCI-Prudential Asset Management Limited
OS
36.00%
\nBOCI-Prudential Trustee Limited
OS
36.00%
Suites 1501-1507 & 1513-1516, 15th Floor, 1111 King's Road, Taikoo Shing, Hong Kong
\nCathay High Yield Ex China Cash Pay 1-5 Year 2% Issuer
\nCapped ETF
\nU
42.71%
6th Floor, No.39, Sec.2, Dunhua South. Road, Taipei, Taiwan
\nCITIC-CP Asset Management Co., Ltd.
MI - JV
26.95%
Room 101-2, No.128 North Zhangjiabang Road, Pudong District, Shanghai, China
\nCITIC-Prudential Fund Management Company Limited
MI - JV
49.00%
Level 9, HSBC Building, Shanghai IFC, 8 Century Avenue, Pudong, Shanghai, China
\nCITIC-Prudential Life Insurance Company Limited
MI - JV
50.00%
Room 1101-A, 1201, 1301, 1401, 1501, 1601, 1701, 1801, Unit 01, Building 1, No. B2, North
\nRoad of East Third Ring Road, Chaoyang District, Beijing, PRC,100027, China
\nEastspring Al-Wara' Investments Berhad
OS
100.00%
Level 25, Menara Hong Leong, No. 6 Jalan Damanlela, Bukit Damansara, 50490 Kuala
\nLumpur, Malaysia
\nEastspring Asia Paci\ufb01c High Yield Equity Fund
U
37.57%
4th Floor, No.1, Songzhi Road, Xinyi Dist., Taipei, Taiwan
Key to share classes:
\nLBG
Limited by Guarantee
\nMI
Membership Interest
\nMI - WFOE
Membership Interest of a Wholly Foreign Owned Enterprise in the Chinese Mainland
\nMI \u2013 JV
Membership Interest of a Sino-Foreign Equity Joint Venture in the Chinese Mainland
\nOS
Ordinary Shares
\nPI
Partnership Interest
\nPS
Preference Shares
\nU
Units
Name of entity
\nClasses of
\nshares held
\nProportion
\nheld
Registered o\ufb03ce address
\nEastspring Asset Management (Thailand) Co., Ltd.
OS
59.50%
944 Mitrtown O\ufb03ce Tower, 9th Floor, Rama 4 Road, Wangmai, Pathumwan, Bangkok
\n10330, Thailand
\nEastspring Asset Management Korea Co. Ltd.
OS
100.00%
22nd Floor (Seoul International Finance Center, Yeouido dong), 10 Gukjegeumyung-ro,
\nYeongdeungpo-gu, Seoul, Republic of Korea 07326
\nEastspring Investment K-Short Term Bond Alpha Securities
\nInvestment Trust(Bond Balanced)
\nU
27.54%
22nd Floor One IFC, 10 Gukjegeumyung-ro, Youngdungpo-gu, Seoul 07326, Korea
\nEastspring Investment Management (Shanghai) Company
\nLimited
\nMI - WFOE
100.00%
Unit 306-308, 3rd Floor, Azia Center, 1233 Lujiazui Ring Road, China (Shanghai) Pilot Free
\nTrade Zone, China
\nEastspring Investments - Asia Opportunities Equity Fund
U
99.97%
26, Boulevard Royal, L-2449, Luxembourg
\nEastspring Investments - Global Growth Equity Fund
U
59.04%
\nEastspring Investments - Global Low Volatility Equity Fund
U
96.36%
\nEastspring Investments - Global Technology Fund
U
82.06%
\nEastspring Investments - Pan European Fund
U
61.34%
\nEastspring Investments - US High Yield Bond Fund
U
46.85%
\nEastspring Investments - US Investment Grade Bond Fund
U
68.91%
\nEastspring Investments - World Value Equity Fund
U
95.64%
\nEastspring Investments (Hong Kong) Limited
OS
100.00%
13th Floor, One International Finance Centre, 1 Harbour View Street, Central, Hong Kong
\nEastspring Investments (Luxembourg) S.A.
OS
100.00%
26, Boulevard Royal, L-2449 Luxembourg, Grand Duchy of Luxembourg
\nEastspring Investments (Singapore) Limited
OS
100.00%
10 Marina Boulevard, #32-01, Marina Bay Financial Centre, Singapore 018983
\nEastspring Investments Asia Paci\ufb01c Equity Fund
U
93.92%
26, Boulevard Royal, L-2449, Luxembourg
\nEastspring Investments Asia Paci\ufb01c ex-Japan Target Return
\nFund
\nU
75.84%
Eastspring Investments Berhad, Level 22, Menara Prudential, Persiaran TRX Barat, 55188
\nTun Razak Exchange, Kuala Lumpur, Malaysia
\nEastspring Investments Asia Real Estate Multi Asset Income
\nFund
\nU
73.95%
26, Boulevard Royal, L-2449, Luxembourg
\nEastspring Investments Asia Sustainable Bond Fund
U
93.97%
\nEastspring Investments Asian Bond Fund
U
42.30%
\nEastspring Investments Asian Dynamic Fund
U
91.58%
\nEastspring Investments Asian Equity Fund
U
98.97%
\nEastspring Investments Asian Equity Income Fund
U
87.52%
\nEastspring Investments Asian High Yield Bond Fund
U
44.35%
\nEastspring Investments Asian Investment Grade Bond Fund
U
90.06%
\nEastspring Investments Asian Low Volatility Equity Fund
U
89.01%
\nEastspring Investments Asian Multi Factor Equity Fund
U
90.94%
\nEastspring Investments Berhad
OS
100.00%
Level 25, Menara Hong Leong, No. 6 Jalan Damanlela, Bukit Damansara, 50490 Kuala
\nLumpur, Wilayah Persekutuan, Malaysia
\nEastspring Investments China A Shares Growth Fund
U
63.69%
26, Boulevard Royal, L-2449, Luxembourg
\nEastspring Investments Dragon Peacock Fund
U
95.82%
\nEastspring Investments Emerging Markets Star Players
U
40.88%
Eastspring Investments Limited, Marunouchi Park Bldg., 2-6-1 Marunochi, Chiyoda-ku,
\nTokyo, Japan 100-6905
\nEastspring Investments Equity Income Fund
U
40.95%
Eastspring Investments Berhad, Level 22, Menara Prudential, Persiaran TRX Barat, 55188
\nTun Razak Exchange, Kuala Lumpur, Malaysia
\nEastspring Investments European Investment Grade Bond
\nFund
\nU
99.91%
26, Boulevard Royal, L-2449, Luxembourg
\nEastspring Investments Fund Management Limited
\nLiability Company
\nMI
100.00%
23rd Floor, Saigon Trade Center, 37 Ton Duc Thang Street, District 1, Ho Chi Minh City,
\nVietnam
\nEastspring Investments Global Emerging Markets Bond
\nFund
\nU
99.38%
26, Boulevard Royal, L-2449, Luxembourg
\nEastspring Investments Global Emerging Markets Dynamic
\nFund
\nU
62.79%
\nEastspring Investments Global Emerging Markets ex-China
\nDynamic Fund
\nU
99.96%
\nEastspring Investments Global Equity Navigator Fund
U
97.19%
\nEastspring Investments Global Growth Fund
U
40.22%
Eastspring Investments Berhad, Level 22, Menara Prudential, Persiaran TRX Barat, 55188
\nTun Razak Exchange, Kuala Lumpur, Malaysia
\nEastspring Investments Global Market Navigator Fund
U
99.75%
26, Boulevard Royal, L-2449, Luxembourg
\nEastspring Investments Global Multi Asset Income Plus
\nGrowth Fund
\nU
100.00%
\nEastspring Investments Greater China Equity Fund
U
90.60%
\nEastspring Investments Group Pte. Ltd.
OS
100.00%
10 Marina Boulevard, #32-01, Marina Bay Financial Centre, Singapore 018983
\nEastspring Investments Incorporated
OS
100.00%
874 Walker Road, Suite C, City of Dover, County of Kent, State of Delaware, 19904, USA
\nEastspring Investments India Consumer Equity Open
\nLimited
\nOS
100.00%
3rd Floor, 355 NEX, Rue du Savoir, Cybercity Ebene 72201, Mauritius
\nEastspring Investments India Equity Fund
U
79.97%
26, Boulevard Royal, L-2449, Luxembourg
\nEastspring Investments India Equity Open Limited
OS
100.00%
3rd Floor, 355 NEX, Rue du Savoir, Cybercity Ebene 72201, Mauritius
\nEastspring Investments India Infrastructure Equity Open
\nLimited
\nOS
100.00%
Name of entity
\nClasses of
\nshares held
\nProportion
\nheld
Registered o\ufb03ce address
\nEastspring Investments Limited
OS
100.00%
Marunouchi Park Building, 6-1 Marunouchi 2-chome, Chiyoda-Ku, Tokyo, Japan
\nEastspring Investments MY Focus Fund
U
28.33%
Eastspring Investments Berhad, Level 22, Menara Prudential, Persiaran TRX Barat, 55188
\nTun Razak Exchange, Kuala Lumpur, Malaysia
\nEastspring Investments Private Fixed Income Fund Number 1
U
87.11%
Units 306-308, 3rd Floor, Azia Center 1233 Lujiazui Ring Road, Shanghai, China
\nEastspring Investments Services Pte. Ltd.
OS
100.00%
10 Marina Boulevard, #32-01, Marina Bay Financial Centre, Singapore 018983
\nEastspring Investments SICAV-FIS \u2013 Alternative
\nInvestments Fund
\nU
100.00%
26, Boulevard Royal, L-2449, Luxembourg
\nEastspring Investments SICAV-FIS \u2013 Asia Paci\ufb01c Loan Fund
U
100.00%
\nEastspring Investments Syariah Equity Islamic Asia Paci\ufb01c
\nUSD Kelas B
\nU
88.02%
Prudential Tower, 23rd Floor, Jl. Jend. Sudirman Kav.79, Jakarta 12910, Indonesia
\nEastspring Investments Unit Trusts - Dragon Peacock Fund
U
97.69%
10 Marina Boulevard, #32-01, Marina Bay Financial Centre, Singapore 018983
\nEastspring Investments Unit Trusts Singapore ASEAN
\nEquity Fund
\nU
98.74%
\nEastspring Investments Unit Trusts Singapore Select Bond
\nFund
\nU
66.05%
\nEastspring Investments US Corporate Bond Fund
U
60.04%
26, Boulevard Royal, L-2449, Luxembourg
\nEastspring Investments US High Investment Grade Bond
\nFund
\nU
87.42%
\nEastspring Investments Vietnam Navigator Fund
U
76.79%
23rd Floor, Saigon Trade Center Building, 37 Ton Duc Thang Street, Ben Nghe Ward,
\nDistrict 1, Ho Chi Minh City, Vietnam
\nEastspring Investments-Global Emerging Markets
\nFundamental Value Fund
\nU
99.96%
26, Boulevard Royal, L-2449, Luxembourg
\nEastspring Investments-Japan Sustainable Value Fund
U
100.00%
\nEastspring Overseas Investment Fund Management
\n(Shanghai) Company Limited
\nMI - WFOE
100.00%
Unit 306-308, 3rd Floor, 1233 Lujiazui Ring Road, China (Shanghai) Pilot Free Trade Zone,
\nChina
\nEastspring Private Equity Fund 2
U
99.99%
10 Marina Boulevard, #32-01, Marina Bay Financial Centre Tower 2, Singapore 018983
\nEastspring Securities Investment Trust Co., Ltd.
OS
99.54%
4th Floor, No.1 Songzhi Road, Taipei 110, Taiwan
\nEastspring Singapore Alternatives VCC
U
100.00%
10 Marina Boulevard, #32-01, Marina Bay Financial Centre, Singapore 018983
\nEastspring Syariah Fixed Income USD Kelas A
U
69.23%
Prudential Tower Lantai 23, JI. Jend. Sudirman Kav. 79, Jakarta 12910, Indonesia
\nFCP Ecobank Actions Uemoa
U
43.63%
Immeuble Ecobank, 2Er Etage -Avenue Houdaille Plateau, 01 B.P 4107 Abidjan O1 Cote
\nD\u2019Ivoire
\nFirst Sentier Global Property Securities Fund
U
67.50%
79 Robinson Road, #17-01, Singapore 068897
\nFSSA China Focus Fund
U
67.76%
70 Sir John Rogerson\u2019s Quay, Dublin 2, D02 R296, Ireland
\nFubon 1-5 Years US High Yield Bond Ex China
U
61.05%
8th Floor, No.108, Sec.1, Dunhua South. Road, Taipei, Taiwan
\nFubon China Bond Umbrella Fund - Fubon China Quality
\nRmb Bond Fund
\nU
23.37%
\nFubon China Currency Fund
U
35.49%
\nFuh Hwa 1-5 Yr High Yield ETF
U
44.22%
8th & 9th Floor, No.308, Sec. 2, Bade Road, Da-an District
\nFuh Hwa Emerging Market RMB Fixed Income Fund
U
46.42%
\nFuh Hwa Rmb Money Market Fund
U
37.52%
\nFurnival Insurance Company PCC Limited
OS
100.00%
PO Box 155, Mill Court, La Charroterie, St Peter Port, GY1 4ET, Guernsey
\nGIS Total Return Bond Fund
U
27.53%
78 Sir John Rogerson's Quay, Dublin, D02 HD32, Ireland
\nGS Twenty Two Limited
OS
100.00%
1 Angel Court, London, EC2R 7AG, United Kingdom
\nHSBC Asia Paci\ufb01c Ex Japan Sustainable Equity UCITS ETF
U
63.65%
25/28 North Wall Quay, IFSC, Dublin 1, Ireland
\nHSBC Senior Global Infrastructure Debt Fund
U
100.00%
8 Canada Square, London, E14 5HQ, United Kingdom
\nICICI Prudential Asset Management Company Limited
OS
49.00%
12th Floor, Narain Manzil, 23, Barakhamba Road, New Delhi 110001, India
\nICICI Prudential Life Insurance Company Limited
OS
22.07%
ICICI PruLife Towers, 1089 Appasaheb Marathe Marg, Prabhadevi,
\nMumbai 400025, India
\nICICI Prudential Pension Funds Management Company
\nLimited
\nOS
22.07%
\nICICI Prudential Trust Limited
OS
49.00%
12th Floor, Narain Manzil, 23, Barakhamba Road, New Delhi 110001, India
\nIndia Innovation High Growth EQ QII
U
100.00%
Eastspring Investments Limited, Marunouchi Park Bldg., 2-6-1 Marunochi, Chiyoda-ku,
\nTokyo, Japan 100-6905
\nInvesco Fixed Maturity Selective Emerging Market Bonds
\n2024
\nU
100.00%
8th Floor, No 122, Tung Hua N. Rd. Taipei, Taiwan
\nInvesco Select 6 Year Maturity Global Bond Fund
U
100.00%
\niShares Core MSCI Asia
U
61.46%
15th, 16th, 17th Floor, Champion Tower & 17th Floor ICBC Tower, Three Garden Road,
\nCentral, Hong Kong
\niShares Global High Yield Corp Bond UCITS ETF
U
65.61%
200 Capital Dock, 79 Sir John Rogerson\u2019s Quay, Dublin 2, Ireland
\niShares MSCI Europe ESG Enhanced UCITS ETF
U
51.34%
12 Throgmorton Avenue, London, EC2N 2DL
\niShares MSCI Korea UCITS ETF USD (Acc)
U
53.66%
200 Capital Dock, 79 Sir John Rogerson\u2019s Quay, Dublin 2, Ireland
Key to share classes:
\nLBG
Limited by Guarantee
\nMI
Membership Interest
\nMI - WFOE
Membership Interest of a Wholly Foreign Owned Enterprise in the Chinese Mainland
\nMI \u2013 JV
Membership Interest of a Sino-Foreign Equity Joint Venture in the Chinese Mainland
\nOS
Ordinary Shares
\nPI
Partnership Interest
\nPS
Preference Shares
\nU
Units
Name of entity
\nClasses of
\nshares held
\nProportion
\nheld
Registered o\ufb03ce address
\niShares MSCI USA ESG Enhanced UCITS ETF
U
41.86%
12 Throgmorton Avenue, London, EC2N 2DL
\nKKP Active Equity Fund
U
35.38%
19th Floor Muang Thai-Phatra Complex, Building Tower, A, 252/25 Ratchadapisek Road,
\nHuaykwang, Bangkok 10310, Thailand
\nKrungsri Greater China Equity Hedged Dividend Fund
U
31.10%
12th, 18th Zone B Floor, Ploenchit Tower 898 Ploenchit Road, Lumpini Pathumwan,
\nBangkok 10330, Thailand
\nLasalle Property Securities SICAV-FIS
U
99.97%
11-13 Bouldevard de la Foire, L-1528 Luxembourg
\nM&G Asia Property Trust
U
100.00%
138 Market Street, CapitaGreen #35-01, Singapore 048946
\nM&G Real Estate Asia Holding Company Pte. Ltd.
OS
33.00%
138 Market Street, #35-01 CapitaGreen, Singapore 048946
\nManulife Asia Paci\ufb01c Bond Fund
U
57.81%
9th Floor, No 89 Son Ren Road, Taipei, Taiwan
\nManulife China Dim Sum High Yield Bond Fund
U
22.54%
\nManulife China O\ufb00shore Bond Fund
U
85.22%
\nManulife Taiwan Dynamic Fund
U
20.53%
\nManulife USD High Yield Bond Fund
U
29.47%
\nNomura Six Years Fixed Maturity Asia Paci\ufb01c Emerging
\nMarket Bond Fund
\nU
100.00%
101 Tower, 30th Floor, No. 7 Sec. 5, Xinyi Rd., Xinyi Dist., Taipei, Taiwan
\nNomura Six Years Fixed Maturity Emerging Market Bond
\nFund
\nU
41.88%
\nNomura Six Years Ladder Maturity Asia Paci\ufb01c Emerging
\nMarket Bond Fund
\nU
97.86%
\nNorth Sathorn Holdings Company Limited
OS
100.00%
No. 63, Athenee Tower, 34th Floor, Wireless Road, Lumpini Subdistrict Pathumwan District,
\nBangkok Metropolis, Thailand
\nPCA IP Services Limited
OS
100.00%
13th Floor, One International Finance Centre, 1 Harbour View Street, Central, Hong Kong
\nPCA Life Assurance Co., Ltd.
OS
99.79%
8th Floor, No.1 Songzhi Road, Taipei City, 11047, Taiwan
\nPCA Reinsurance Co. Ltd.
OS
100.00%
Unit Level 13(A), Main O\ufb03ce Tower, Financial Park Labuan, Jalan Merdeka, 87000 Federal
\nTerritory of Labuan, Malaysia
\nPineBridge US Dual Core Income Fund
U
37.37%
10th Floor, No. 144, Sec. 2, Minquan East Rd, Taipei
\nPrincipal Global Silver Age Fund
U
22.89%
44, 16th Floor, CIMB Thai Bank, Lungsuan Road, Lumpini, Bangkok 10330, Thailand
\nPru Life Insurance Corporation of U.K.
OS
100.00%
9th Floor, Uptown Place Tower 1, 1 East 11th Drive, Uptown Bonifacio, 1634 Taguig City,
\nMetro Manila, Philippines
\nPru Life UK Asset Management and Trust Corporation
OS
100.00%
\nPrudence Foundation
LBG
100.00%
13th Floor, One International Finance Centre, 1 Harbour View Street, Central, Hong Kong
\nPrudential (Cambodia) Life Assurance Plc
OS
100.00%
Phnom Penh Tower, 20th Floor, #445, Monivong Blvd., Boeung Prolit, 7 Makara, Phnom
\nPenh, Cambodia
\nPrudential (US Holdco 1) Limited
OS
100.00%
1 Angel Court, London, EC2R 7AG, United Kingdom
\nPrudential Africa Holdings Limited
OS
100.00%
\nPrudential Africa Services Limited
OS
100.00%
3rd Floor, One Africa Place, LR. No. 1870/X/45, P.O. Box 25093-00100, Westlands, Nairobi,
\nKenya
\nPrudential Assurance Company Singapore (Pte) Limited
OS
100.00%
30 Cecil Street, #30-01 Prudential Tower, Singapore 049712
\nPrudential Assurance Malaysia Berhad
\n*
\nOS
51.00%
Level 26, Menara Prudential, Persiaran TRX Barat, 55188 Tun Razak Exchange, Kuala
\nLumpur, Malaysia
\nPrudential Assurance Uganda Limited
OS
100.00%
9th Floor Zebra Plaza, Plot 23 Kampala Road, P.O. Box 2660, Kampala, Uganda
\nPrudential BeGeneral Insurance C\u00f4te d'Ivoire S.A.
OS
51.00%
Abidjan Plateau, Avenue Nogu\u00e8s, Immeuble Woodin Center, 1er \u00e9tage, 01 P.O. BOX 5173,
\nAbidjan 01, C\u00f4te d'Ivoire
\nPrudential Belife Insurance C\u00f4te d'Ivoire S.A.
OS
51.00%
\nPrudential Bene\ufb01cial General Insurance Cameroon S.A.
OS
50.71%
1944, Boulevard de la R\u00e9publique Douala-Akwa, P.O. BOX 2328, Douala, Cameroon
\nPrudential Bene\ufb01cial Life Insurance Cameroon S.A.
OS
51.00%
\nPrudential Bene\ufb01cial Life Insurance Togo S.A.
OS
50.99%
2963 Rue de la Chance Agbalepedogan, P.O. Box 1115, Lome, Togo
\nPrudential BSN Takaful Berhad
\n\u2020
\nOS
49.00%
Level 13, Menara Prudential, Persiaran TRX Barat, 55188 Tun Razak Exchange, Kuala
\nLumpur, Malaysia
\nPrudential Corporation Holdings Limited
OS
100.00%
1 Angel Court, London, EC2R 7AG, United Kingdom
\nPrudential Financial Advisers Singapore Pte. Ltd.
OS
100.00%
30 Cecil Street, #30-01 Prudential Tower, Singapore 049712
\nPrudential Financial Partners (Asia) Limited
OS
100.00%
1 Angel Court, London, EC2R 7AG, England, United Kingdom
\nPrudential Financial Partners HK Limited
OS
100.00%
13th Floor, One International Finance Centre, 1 Harbour View Street, Central, Hong Kong
\nPrudential General Insurance Hong Kong Limited
OS
100.00%
59th Floor, One Island East, 18 Westlands Road, Quarry Bay, Hong Kong
\nPrudential Group Secretarial Services HK Limited
OS
100.00%
13th Floor, One International Finance Centre, 1 Harbour View Street, Central, Hong Kong
\nPrudential Group Secretarial Services Limited
OS
100.00%
1 Angel Court, London, EC2R 7AG, United Kingdom
\nPrudential Holdings Limited
OS
100.00%
4th Floor, Saltire Court, 20, Castle Terrace, Edinburgh, EH1 2EN, United Kingdom
\nPrudential Hong Kong Limited
OS
100.00%
59th Floor, One Island East, 18 Westlands Road, Quarry Bay, Hong Kong
\nPrudential International Treasury Limited
OS
100.00%
13th Floor, One International Finance Centre, 1 Harbour View Street, Central, Hong Kong
\nPrudential IP Services Limited
OS
100.00%
1 Angel Court, London, EC2R 7AG, United Kingdom
\nPrudential Life Assurance (Lao) Company Limited
OS
100.00%
5th Floor, Lao international Business and Tourist Center Project (Vientiane Center),
\nKhouvieng Road, Nongchan Village, Sisattanak District, Vientiane Capital, Lao PDR
\nPrudential Life Assurance (Thailand) Public Company
\nLimited
\nOS
99.93%
944 Mitrtown O\ufb03ce Tower, 10th, 29th-31st Floor, Rama 4 Road, Wangmai, Pathumwan,
\nBangkok, 10330, Thailand
\nPrudential Life Assurance Kenya Limited
OS
100.00%
Vienna Court, Ground Floor, State House Crescent, O\ufb00 State House Avenue, P.O. Box
\n25093-00603, Nairobi, Kenya
\nPrudential Life Assurance Zambia Limited
OS
100.00%
Prudential House, Plot No. 32256, Thabo Mbeki Road, P.O. Box 31357, Lusaka, Zambia
Name of entity
\nClasses of
\nshares held
\nProportion
\nheld
Registered o\ufb03ce address
\nPrudential Life Insurance Ghana Limited
OS
100.00%
H/NO. 35, Opp. Hobats Clinic, North Street, Tesano, Accra, Accra Metropolitan, Greater
\nAccra, P.O. Box AN 10476, Ghana
\nPrudential Life Vault Limited
OS
100.00%
48 Awolowo Road, South-West Ikoyi, Lagos, Nigeria
\nPrudential Mauritius Holdings Limited
OS
100.00%
3rd Floor, 355 NEX, Rue du Savoir, Cybercity Ebene, 72201, Mauritius
\nPrudential Myanmar Life Insurance Limited
OS
100.00%
#15-01, 15th Floor, Sule Square, 221 Sule Pagoda Road, Kyauktada Township, Yangon,
\nMyanmar
\nPrudential Pensions Management Zambia Limited
OS
49.00%
Prudential House, Plot No. 32256, Thabo Mbeki Road, P.O. Box 31357, Lusaka, Zambia
\nPrudential Services Asia Sdn. Bhd.
OS
100.00%
Suite 1005, 10th Floor, Wisma Hamzah-Kwong Hing, No. 1 Leboh Ampang, 50100 Kuala
\nLumpur, Malaysia
\nPS
100.00%
\nPrudential Services Limited
OS
100.00%
1 Angel Court, London, EC2R 7AG, United Kingdom
\nPrudential Services Philippines Corporation
OS
100.00%
19th Floor Uptown Place Tower I East, 11th Drive Uptown Bonifacio Fort Bonifacio
\nBonifacio Global City, Taguig City, Fourth District, National Capital Region (NCR), 1630,
\nPhilippines
\nPrudential Services Singapore Pte. Ltd.
OS
100.00%
7 Straits View, #06-01 Marina One East Tower, Singapore 018936
\nPrudential Singapore Holdings Pte. Limited
OS
100.00%
30 Cecil Street, #30-01 Prudential Tower, Singapore 049712
\nPS
100.00%
\nPrudential Technology and Services India Private Limited
OS
100.00%
CoWrks NXT, EPIP Industrial Area, White\ufb01eld Road, K.R Puram, Near SAP Labs, Hubli,
\nBangalore, Karnataka, 560066, India
\nPrudential Vietnam Assurance Private Limited
OS
100.00%
25th Floor, Saigon Trade Center, 37 Ton Duc Thang Street, District 1, Ho Chi Minh City,
\nVietnam
\nPrudential Wealth Holdings Company Pte. Ltd.
OS
100.00%
7 Straits View #07-01, Marina One East Tower, Singapore 018936, Singapore
\nPrudential Wealth Management Singapore Pte. Ltd.
OS
100.00%
8 Marina View #15-06A, Asia Square Tower 1, Singapore 018960, Singapore
\nPrudential Zenith Life Insurance Limited
OS
51.00%
13th Floor, Civic Towers, Ozumba Mbadiwe Avenue, Victoria Island, Lagos State, Lagos,
\nNigeria
\nPRUInvest PHP Liquid Fund
U
99.84%
9th Floor, Uptown Place Tower 1, 1 East 11th Drive, Uptown Bonifacio, 1634 Taguig City,
\nMetro Manila, Philippines
\nPRUInvest PH Equity Index Tracker Fund
U
100.00%
\nPT Prudential Sharia Life Assurance
OS
94.62%
Prudential Tower, 2nd Floor, Jl. Jend. Sudirman Kav. 79, Jakarta 12910, Indonesia
\nPT. Eastspring Investments Indonesia
OS
99.95%
Prudential Tower, 23rd Floor, Jl. Jend. Sudirman Kav.79, Jakarta 12910, Indonesia
\nPT. Prudential Life Assurance
\n\u2021
\nOS
94.62%
Prudential Tower, Jl. Jend. Sudirman Kav. 79, Jakarta 12910, Indonesia
\nPulse Ecosystems Pte. Ltd.
OS
100.00%
7 Straits View, #06-01 Marina One East Tower, Singapore 018936
\nPulse Wealth Limited
OS
100.00%
Suite 3703-04, 37/F, Tower 6, The Gateway, Harbour City, 9 Canton Road, Tsim Sha Tsui,
\nKowloon, Hong Kong
\nReksa Dana Eastspring IDR Fixed Income Fund
U
98.81%
Prudential Tower, 23rd Floor, Jl. Jend. Sudirman Kav.79, Jakarta 12910, Indonesia
\nReksa Dana Eastspring Investments Cash Reserve
U
88.93%
\nReksa Dana Syariah Eastspring Syariah Fixed Income
\nAmanah
\nU
66.32%
\nReksa Dana Syariah Eastspring Syariah Money Market
\nKhazanah
\nU
99.30%
\nReksa Dana Syariah Penyertaan Terbatas Bahana Syariah
\nBumn Fund IV
\nU
99.01%
Graha CIMB Niaga 21st Floor. Jl Jend Sudirman Kav 58, Jakarta - 12190, Indonesia
\nRhodium Investment Funds - Singapore Bond Fund
U
99.75%
10 Marina Boulevard, #32-01, Marina Bay Financial Centre Tower 2, Singapore 018983
\nRhodium Passive Long Dated Bond Fund
U
99.87%
\nRobeco QI European Active Index Equities
U
94.55%
6, route de Tr\u00e8ves, L-2633 Senningerberg, Grand Duchy of Luxembourg
\nSchroder Asian Investment Grade Credit
U
37.95%
138 Market Street, #23-01 CapitaGreen, Singapore 048946
\nSchroder Emerging Markets Fund
U
67.30%
\nSchroder Multi-Asset Revolution
U
48.29%
\nSchroder US Dollar Money Fund
U
34.92%
9th \ufb02oor, no. 108, section 5, xinyi road, taipei
\nScotts Spazio Pte. Ltd.
OS
45.00%
316 Tanglin Road, #01-01,Singapore, 247978
\nShenzhen Prudential Technology Limited
MI - WFOE
100.00%
Unit 5, 8th Floor, China Resources Tower, No.2666 Keyuan South Road, Yuehai Street,
\nNanshan District, Shenzhen 518054, China
\nSinopac RMB Money Market Fund
U
27.12%
14th Floor, No.17,Po Ai Rd., Taipei, Taiwan
\nSri Han Suria Sdn. Bhd.
OS
51.00%
Suite 1005, 10th Floor, Wisma Hamzah-Kwong Hing, No. 1 Leboh Ampang, 50100 Kuala
\nLumpur, Malaysia
\nStaple Limited
OS
100.00%
No. 63, Athenee Tower, 34th Floor, Wireless Road, Lumpini Subdistrict Pathumwan District,
\nBangkok Metropolis, Thailand
\nTempleton Asian Growth Fund
U
31.40%
8A, rue Albert Borschette, L-1246 Luxembourg
\nThreadneedle (Lux) \u2013 Global Emerging Market Equities
U
69.10%
44 Rue de la vall\u00e9e, 2661 Luxembourg
Key to share classes:
\nLBG
Limited by Guarantee
\nMI
Membership Interest
\nMI - WFOE
Membership Interest of a Wholly Foreign Owned Enterprise in the Chinese Mainland
\nMI \u2013 JV
Membership Interest of a Sino-Foreign Equity Joint Venture in the Chinese Mainland
\nOS
Ordinary Shares
\nPI
Partnership Interest
\nPS
Preference Shares
\nU
Units
Name of entity
\nClasses of
\nshares held
\nProportion
\nheld
Registered o\ufb03ce address
\nUnited Global Innovation Fund
U
21.33%
23A, 25th Floor, Asia Centre Building, 173/27-30, 32-33 South Sathon Road,
\nThungmahamek, Sathon, Bangkok 10120, Thailand
\nUOB Smart Global Healthcare Fund
U
42.04%
\nUOB Smart Japan Small and Mid Cap Fund
U
29.79%
\nUOB Smart Millennium Growth Fund
U
38.65%
\nUSD Investment Grade Infrastructure Debt Fund SCSp
U
21.53%
35a, Avenue J.F. Kennedy, L-1855, Luxembourg, Grand Duchy of Luxembourg
\n*
Prudential Assurance Malaysia Berhad is consolidated at 100 per cent in the Group\u2019s consolidated \ufb01nancial statements re\ufb02ecting the economic interest to the Group.
\n\u2020
Prudential BSN Takaful Berhad is a joint venture that is accounted for using the equity method, for which the Group has an economic interest of 70 per cent for all business sold up to
\n23 December 2016 and of 49 per cent for new business sold subsequent to this date.
\n\u2021
The holding of 94.62 per cent for PT. Prudential Life Assurance represents the proportion held in the Indonesia subsidiary attaching to the aggregate of the shares across the types
\nof\u00a0capital\u00a0in\u00a0issue.
\nThe below table lists the issued share capital of the subsidiaries of the Group which, in the opinion of the Directors, principally a\ufb00ect the results or
\nassets of the Group:
\nName of entity
Issued and fully paid up share/ registered capital
\nPrudential Assurance Company Singapore (Pte) Limited
526,557,000 ordinary shares of SG$ 1 each
\nPT. Prudential Life Assurance
105,500 ordinary shares and 6,000 preference shares of Rp 1,000,000 each
\nPrudential Hong Kong Limited
3,641,479,873 ordinary shares of HK$ 1 each
\nPrudential Assurance Malaysia Berhad
100,000,000 ordinary shares of RM 1 each
",
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"f42903": {
"value": "1 Angel Court, London, EC2R 7AG",
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}