Pru sees record M&G inflows; warns over RDR impact on bond sales

Prudential has been boosted by a huge asset haul led by fund group M&G, which helped the insurer secure record inflows of £12.3 billion in the third quarter of 2012, a rise of 263%, as investors returned from period of ‘extreme risk aversion'.

Over the third quarter of 2012 overall asset management inflows at Prudential, due largely to M&G, rose hugely, hitting £12.3 billion up from £3.4 billion in the third quarter of 2011.

M&G recorded inflows of £6.4 billion compared to £300 million in 2011, a rise of 329%.

Pru said retail investors had returned to the market after a period of ‘extreme risk aversion.’

Tidjane Thiam (pictured), Pru chief executive, said: ‘This is our best ever performance at the nine month stage surpassing the historically high level of net inflows achieved in 2009.

‘M&G has benefited from its strong investment performance and broad range of attractive funds across asset classes as retail investors, particularly those in continental Europe, are starting to invest again after a period of extreme risk aversion observed in 2011.’

Pru’s UK business rose 17% compared to the third quarter of 2011 from £194 million to £227 million.

Pru said it expected investment bond sales, in particular, to be impacted by the impending retail distribution review with a slowdown showing in the last stages of 2012.

It said individual annuity sales were up 25% to £166 million. Sales to customers who did not already have a pension with the Pru were up 41% to £62 million reflecting, it said, the popularity of its with-profits Income Choice Annuity product.

However corporate pensions sales fell 22% to £148 million despite the introduction in October of auto-enrolment. Pru said it was not focused on establishing new schemes but was focusing on increasing membership within existing schemes.