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Prudential's 2011 half year results: - we're delighted to share the UK highlights of the Group's outstanding performance in the first half of 2011.

We have reported another good performance in the first six months of 2011 and with your support we’re generating record APE sales and new business profits.

UK & Europe highlights:

In the UK, our strategy of focusing on balancing writing new business with sustainable cash generation and capital preservation continues to serve us well, despite the competitive market. By not pursuing top line sales growth at any price but instead using our capital carefully on opportunities that play to our core strengths and generate the best returns, we have been able to deliver a very strong performance in the first half of the year.

• Our total APE sales of £409 million were up 7 per cent on the first half of 2010, including a bulk annuity buy in insurance agreement which generated APE £28 million.

• Our EEV new business profit increased by 8 per cent to £146 million and our new business margin increased by 1 per cent to 36 per cent.

• IFRS total operating profit of £ 353 million was up 7 per cent

• EEV total operating profit was £558 million, up 18 per cent

• Retail sales of APE £381 million were unchanged from the same period last year, reflecting our value over volume strategy. Our Retail new business margin reduced to 32 per cent, 3 per cent down on the first half of 2010. This was primarily due to the different mix of business written in the first half of the year, with lower shareholder-backed annuity sales and higher sales of corporate pensions, partly offset by the higher margin on non-profit annuity business due to strong investment performance.

• Sales of individual annuities of APE £86 million were 23 per cent lower than for the first half of 2010 as we continue to proactively manage the flow of external conventional new business to control capital consumption. Our sales of external annuities of APE £30 million were down 38 per cent on the same period last year, mainly due to the end of a partnership agreement in the second half of 2010.

• Internal vestings sales of APE £56 million, were 13 per cent lower than 2010 due principally to the temporary spike in sales that we saw in the first quarter of 2010 from the 50 to 55 age group immediately prior to the change in minimum retirement age in April 2010. The proportion of with-profits annuity sales continues to increase, from 22 per cent in the first half of 2010 to 26 per cent over the same period in 2011.

• Sales of onshore bonds of APE £84 million were 22 per cent up on the first half of 2010, including with-profits bonds sales of APE £73 million, which increased by 22 per cent. PruFund was once again a significant contributor, making up 72 per cent of with-profits bond sales. We continue to see strong customer demand for products offering smoothed investment returns and capital guarantees and in June we launched an enhanced range of guarantee options on our PruFund Growth and PruFund Cautious funds.

• Unit-linked bond sales of APE £11 million were 29 per cent up on the first half of 2010, helped by the success of our risk-graded Dynamic Portfolio funds. Sales into the Dynamic Portfolio funds have totalled over £130 million in 2011, including collectives, and at 30 June 2011 total funds under management were in excess of £280 million.

• Corporate pensions sales of APE £147 million were 20 per cent higher than the same period last year. We continue to focus on securing new members and incremental business from the substantial number of existing schemes, as well as working with private sector customers to support the transition from defined benefit to defined contribution. Sales to new members of existing private sector corporate pension schemes of APE £65 million, were exceptionally high at 123 per cent up on the first half of 2010 due in part to an existing customer transferring members from their defined benefit scheme to the defined contribution scheme. We also continue to write profitable sales through the provision of Additional Voluntary Contribution (AVC) arrangements within the public sector, having secured a further scheme in the first half of 2011, making us the AVC provider for 67 of the 99 public authority schemes in the UK.

• Sales of other products of APE £64 million were 18 per cent below the first half of 2010, with individual pensions sales (including income drawdown) of APE £40 million were three per cent below the same period last year.

Our business in the UK is focused and streamlined. Therefore, it generates differentiated returns relative to the market. We continue to be a market leader in both individual annuities and with-profits. The strength of the with-profits fund underpins our ongoing ability to deliver strong IFRS profits and cash. We have continued to balance the writing of new business with the generation of cash and capital, successfully delivering attractive returns on capital employed.

Commenting on the results, Tidjane Thiam, Group Chief Executive, said:

"We have reported another good performance in the first half of 2011. Against the challenging comparator of 2010, we have increased new business profit and IFRS and EEV operating profits by 20 per cent or more."

"Our UK business is performing in line with our strategy, balancing writing new business with generating cash and preserving capital."

View our news release on the performance of the Prudential Group.

For more information visit our Prudential Group website.