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(Alliance News) - Prudential PLC on Monday kicked off the first trance of a USD2 billion share buyback and said progress towards its 2027 financial objectives will "increase the potential for further cash returns to shareholders".
The Asia-focused insurer said the buyback will be completed by no later than mid-2026.
Shares in Prudential rose 5.8% to 748.38 pence in London on Monday. It was the best performing stock in the FTSE 100 which was up 0.1%.
Chief Executive Anil Wadhwani commented: "I am pleased with the progress we continue to make in executing our strategy, as we drive towards generating growth in both value and cash returns for shareholders over the long term. The significant growth opportunity ahead of us has not changed and we remain focused on realising that opportunity."
Wadhwani added that the firm's dividend policy is unchanged, with it still targeting annual growth in the 7% to 9% range.
Prudential's annual premium equivalent "sales trends" in the second-quarter as similar to the first, it added. They had risen 4.2% on-year in the first-quarter, or 7.3% at constant currency.
Going forward, Prudential said it would seek to operate with a free surplus ratio of between 175% to 200%.
The free surplus ratio, will be defined as the group's capital resources, being free surplus (excluding intangibles) plus the European embedded value required capital of the life business, divided by the EEV required capital of the life business.
If the free surplus ratio is above the operating range over the medium capital will be returned to shareholders, Prudential said.
Prudential noted at the end of 2023, the free surplus ratio was 242%. Accordingly, it has decided to return USD2 billion to shareholders.
On Monday, Prudential said it had launched the first USD700 million tranche of the buy back.
By Jeremy Cutler, Alliance News reporter
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