Q2 2026 Prudential PLC Earnings Call - Q&A

Speaker #1: Thank you for standing by, and welcome to the PRUDENTIAL PLC 2026 half-year results Q&A audio webcast call. At this time, all participants are in listen-only mode.

Speaker #1: For those on the audio line, if you wish to ask a question, please press star 1 on your telephone. I will now hand over to Patrick Bowes.

Speaker #1: Please go ahead.

Speaker #2: Thank you very much, Alex. And good afternoon, good morning, everyone. Welcome to PRUDENTIAL PLC's first half 2026 results analyst and investor call. Before I turn over to our CEO, Anil, and Ben, our CFO, I have a couple of housekeeping points.

Speaker #2: A recording of today's call will be available from Tuesday next week. Our full results package is available on our website, and our offer to you to the disclaimers and safe harbor wordings in these documents, and they also apply to this call.

Speaker #2: Anil will start. Ben will start the call with opening remarks, followed by a Q&A. And also, on the call today are Angel, Dennis, Rajiv, Naveen from our group CEO, GEC members, and now let me pass over to Anil, our CEO, to start us off.

Speaker #3: Thank you, Patrick. Good morning, good afternoon, and good evening, everyone. And thank you for joining us today. The strength and resilience of our multi-market, multi-channel platform across our insurance and asset management businesses allow us to deliver consistent, high-quality growth.

Speaker #3: We've been focused on accelerating the conversion of new business profit into cash, thereby generating sustainable and growing shareholder returns. I'm really pleased with the progress we have made in the last few years, and our strong track record of delivery as we transform and modernize PRUDENTIAL.

Speaker #3: We have repositioned our Hong Kong business by substantially growing the domestic franchise; it now generates 50% of the new business profit in this key segment.

Speaker #3: Improved our Chinese mainland operations through better product mix, risk management, and strong levels of capital, demonstrated the breadth of our diversification, with ASEAN markets growing, new business profit by 13%, and our Indian and African businesses growing double-digit APE.

Speaker #3: Alongside our insurance operations, our asset management business grew underlying profits by 20%. In addition, we have focused on our strong proprietary channels of agency and bank assurance, driving productivity and expanding our bank assurance footprint.

Speaker #3: We launched a multi-year transformation of our agency operations with productivity and quality recruitment, being the key priorities. I'm very pleased that we have reported progress in these areas in both our developed markets and our emerging ASEAN businesses.

Speaker #3: We have built out our market-leading health and protection operations, helping our customers navigate the post-COVID medical inflation while delivering significant operating improvements. Driving innovation, AI adoption, and high-quality customer experience has been a focal point of our $1 billion investment program in technology, in distribution, health, and customers.

We have built out our market-leading health and protection operations, helping our customers navigate post-COVID medical inflation while delivering significant operating improvements.

Speaker #3: We have also set clear priorities for capital allocation, with a comprehensive and sustainable capital management framework. We are making good progress in delivering over $7 billion of returns to our shareholders from 2024 to 2027.

Driving innovation, AI adoption, and high-quality customer experience has been a focal point of our $1 billion investment program in technology, in distribution, health, and customer.

We have also set clear priorities for capital allocation with a comprehensive and sustainable capital management framework.

Speaker #3: And rounding off last year, we completed a highly successful IPO of our asset management operations in India, creating substantial value for our shareholders and are in the process of returning it.

We are making good progress in delivering over $7 billion of returns to our shareholders from 2024 to 2027.

Speaker #3: Most recently, you may have seen we are moving towards meeting the initial 15% free float requirement. This will generate proceeds of approximately $0.3 billion which will be added to our 2026 share buyback.

Speaker #3: Coming to our first half results, we continue to build on the track record of our delivery. We have invested further in our high-performing business in Malaysia, through increasing ownership, and we have fundamentally repositioned our India business through taking control of the two complementary insurance platforms of life and health.

And rounding off, last year we completed a highly successful IPO of our asset management operations in India, creating substantial value for our shareholders, and are in the process of returning it. Most recently, you may have seen we are moving towards meeting the initial 15% free float requirement. This will generate proceeds of approximately $3 billion, which will be added to our 2026 share buyback.

Speaker #3: In the first half of 2026, we grew new business profit by 8%, we grew earnings per share by 17%, and free surplus generation was up 15%.

Coming to our first half results, we continue to build on the track record of our delivery. We have invested further in our high-performing business in Malaysia through increasing ownership, and we have fundamentally repositioned our India business through taking control of the two complementary insurance platforms of life and health.

Speaker #3: As well as, we increased our first interim dividend per share by 15%. Our first half 2026 performance was well-rounded, and we remained very disciplined on both quality and our execution.

In the first half of 2026, we grew new business profit by 8%. We grew earnings per share by 70%, and free surplus generation was up 15% as well. As a result, we increased our first interim dividend per share by 15%.

Speaker #3: I have three clear messages to our investors. First, we remain firmly focused on the delivery of our guidance for 2026, of double-digit growth across our key financial matrix, and on achieving our 2027 financial objectives.

The first half of 2026 performance was well-rounded, and we remained very disciplined on both quality and our execution.

Speaker #3: Second, we are progressing well in our transformation agenda, continuing to build capabilities and modernizing our operations and technology platform. Third, we remain highly disciplined in allocating capital.

Speaker #3: We are investing for quality growth, driving attractive margins, and sustainable growth in capital generation. With our multi-market, multi-channel model, and our drive for quality growth, I'm excited with our prospects in the growing markets of Asia and Africa.

I have three clear messages to our investors. First, we remain firmly focused on the delivery of our guidance for 2026 of double-digit growth across our key financial matrix and on achieving our 2027 financial objectives. Second, we are progressing well in our transformation agenda, continuing to build capabilities and modernizing our operations and technology platform.

Speaker #3: Now, I will hand it over to Ben, our CFO, to walk through the financial highlights.

Third, we remain highly disciplined in allocating capital. We are investing for quality growth, driving attractive margins, and sustainable growth in capital generation with our multi-market, multi-channel model and our drive for quality growth. I'm excited with our prospects in the growing markets of Asia and Africa.

Speaker #2: Thanks, Anil, and hello everyone. So, as Anil has mentioned in the first half of 2026, we delivered double-digit growth in EPS, DPS, gross OFSG, and 8% growth in new business profit.

Now, I will hand it over to Ben, our CFO, to walk through the financial highlights.

Thanks Anil and hello everyone.

Speaker #2: We remained firmly focused on high-quality growth in new business, with high IRRs and short payback periods. The compounding effects of which are driving strong capital generations and earnings.

So, as Neil has mentioned, in the first half of 2026 we delivered double-digit growth in EPS, DPS, gross OFG, and 8% growth in new business profits.

Speaker #2: The new business margin expanded 2 percentage points to 40%, and further focus on improvements in agency performance and increasing the proportion of health and protection business within our new business mix provides us opportunities to continue to improve margins over the medium term.

We remain firmly focused on high-quality growth in new business, with high IRRs and short payback periods, the compounding effects of which are driving strong capital generation and earnings.

Speaker #2: Our embedded value per share, ex goodwill, reached $15.27 or £11.50, and our return on embedded value is 15%, with scope to improve this further by 2 to 3 percentage points.

The new business margin expanded two percentage points to 40%, and further focus on improvements in agency performance and increasing the proportion of health and protection business within our new business mix provides us opportunities to continue to improve margins over the medium term.

Speaker #2: The management of our enforced book continues to improve, and we are pleased that our underlying variances are back in positive territory. This is an important milestone, and reflects actions in strengthening claims management, growing revenue premiums, and containing costs.

Our embedded value per share excluding goodwill reached $15.27, or £11.50, and our return on embedded value is 15%, with scope to improve this further by 2 to 3 percentage points.

The management of our enforced book continues to improve, and we are pleased that our underlying variances are back in positive territory.

Speaker #2: These improvements will allow us to continue to invest in our business on a normal course basis, while delivering sustainable positive variances as we move forward.

This is an important milestone and reflects actions in strengthening claims management, growing revenue premiums, and containing costs.

Speaker #2: We continue to benefit from strong persistency, and in Hong Kong, that is 99%. We will largely complete our capability investment program in 2026, with an investment of between $300 and $350 million and we're confident of returning to positive variances north of $200 million in 2027.

Normal course basis.

While delivering sustainable, positive variances as we move forward.

We continue to benefit from strong persistency, and in Hong Kong, that is 99%.

We will largely complete our capability investment program in 2026 with an investment of between $300 million and $350 million.

Speaker #2: In short, we're pleased with our capital generation trajectory, gross OFSG is up 15% year on year, and net OFSG is up 41%. We'll continue to build on this momentum as we work towards and beyond our 2027 objective year.

and with confidence of returning to positive variances north of $200 million in 2027,

In short, we're pleased with our capital generation trajectory. Gross is up. FSG is up 15% year-on-year. And net OFS is up 41%.

Speaker #2: The group's capital position remains highly robust, and we have a conservative level of gearing. Our free surplus ratio, as of 30 June, was 209%, or 200%, excluding the remaining net proceeds from the AMC IPO, consistent with the 175 to 200% range we've set out.

We'll continue to build on this momentum as we work towards, and beyond, our 2027 objective year.

Speaker #2: In January, we launched a combined $1.2 billion buyback to be completed by the end of 2026, and as Anil indicated, with today's capital market actions, we add a further $0.3 billion of buyback to be completed by the year-end.

The group's capital position remains highly robust, and we have a conservative level of gearing. Our free surplus ratio as of 30th June was 209% or 200%, excluding the remaining net proceeds from the IAT and the AMC IPO—consistent with the 175% to 200% range. We've set out...

Speaker #2: We continue to expect to return a further $1.3 billion in 2027, all contributing to over $7 billion of capital being returned to shareholders between 2024 and 2027.

In January, we launched a combined $1.2 billion buyback to be completed by the end of 2026. And as Neil indicated with today's capital market actions, we add a further $0.3 billion of buyback to be completed by year end.

Speaker #2: In summary, we delivered a significant improvement in financial performance in the first half of 2026, with quality growth across our key financial KPIs. Looking forward, we are firmly focused on delivering our 2026 guidance of double-digit growth in our KPIs, and our 2027 financial objectives.

We continue to expect to return a further $1.3 billion in 2027, contributing to over $7 billion of capital being returned to shareholders between 2024 and 2027.

In summary, we delivered a significant improvement in financial performance in the first half of 2026.

Speaker #2: PRUDENTIAL has leading positions in the highly attractive markets of Asia and Africa, we are generating attractive margins, and are positioning the business to deliver double-digit performance for many years to come.

With quality growth across our key financial KPIs, looking forward, we are focused on delivering our 2026 guidance of double-digit growth in our KPIs and our 2027 financial objectives.

Speaker #2: With that, I'll pass back to Patrick.

Speaker #1: Thank you, Ben and Anil, and I'll now hand over to Alex, our call operator, who will provide instructions and open the lines for questions.

Prudential has leading positions in the highly attractive markets of Asia and Africa. We are generating attractive margins and are positioning the business to deliver double-digit performance for many years to come.

With that, I'll pass back to Patrick.

Speaker #1: Please remember to give your name and organization that you represent when asking your question, and also please submit your questions online, in particular if you're on a mobile phone just for the benefit of everyone else to be able to hear properly.

Speaker #1: Please do use the online service or dial into the VOIP; it's much clearer. So, over to you, Alex.

Speaker #3: Thank you, Patrick. As a reminder to ask a question, please press star 1 on your telephone keypad. You will hear a tone to confirm that you're in the queue.

Thank you, Ben and Neil and I'll now hand over to Alex. Our call Operator who will provide instructions and open the lines for questions. Please remember to give your name and organization that you represent when asking your question and also, please submit your questions online in particular, if you're on a mobile phone and just for the benefit of everyone else to be able to hear properly, please do use the online service or dial into the VoIP. It's much clearer so over to you, Alex,

Speaker #3: If you wish to withdraw your question, you may do so by pressing star 2 to cancel. Thank you. Our first caller, is Kailesh Mistry, from Bank of America.

Thank you, Patrick. As a reminder, to ask a question, please press star 1 on your telephone keypad. You will hear a tone to confirm that you're in the queue.

If you wish to withdraw your question, you may do so by pressing star two to cancel.

Speaker #3: Your line is now unmuted. Please go ahead.

Thank you.

Speaker #4: Hi, good afternoon. Thanks for taking my questions. It's Kailesh here. So, first one, predictably, is on new business value in Hong Kong. Anil, thank you for your guidance of double-digit growth for 2026.

Our first caller is Kaish Mystery from Bank of America. Your line is now unmuted. Please go ahead.

Speaker #4: A couple of things I wanted to unpick here. Could you help us better understand your base case for the second half? Should we think about the domestic growth continuing at the 20-plus level and the MCV kind of at the level we saw at the first half?

Speaker #4: And also, how much should we expect to be driven by margin versus volume? So, that's the first question. Second question is just on new business strain.

Hi, uh, good afternoon. Thanks for taking my questions. Uh, it's Kayla here. Um, so first, 1 predict me is on new business Value Inn in Hong Kong, uh, and I'll thank you for your guidance, uh, of double digit growth, uh, for 2026. Couple of things, I wanted to unpick here. Could you help us, uh, better understand your base case for the second half? Um, should we think about the domestic growth continuing at the 20 plus level and the MCV kind of, um,

Speaker #4: Obviously, sales up 3%, 4%, strain was 11% lower. What were the key drivers here, and are they sustainable, or should we still have the 11% to 12% of AP guidance in our mind?

At the level we saw in the first half. Um, and also, you know, how much should we expect to be driven by margin versus volume?

Speaker #4: And then, lastly, just on India, very quickly. In terms of the asset management business, is your intention to get the free meet the free criteria and then stop at that point and keep your stake stable, or are you thinking something else there?

Speaker #4: And Ditto on IPRU, should we expect all the proceeds to be used for reinvestment in the new entity, y, or could we see some coming back to shareholders?

Speaker #4: Thank you.

Speaker #1: Thanks, Kailesh. Many questions there, so let me first start with the Hong Kong question and the margin question, and then I will pass on to Ben for the new business strain as well as the question on AMC and IPRU.

Um, so so that's the first question. Second question is just on your business strain, uh obviously sales Up 3 4%, uh strain was 11% lower. What were the key drivers here? And are they sustainable, or should we still have the 11 to 12% of AP? Uh, guidance in our mind? Um, and then lastly, just on India, very quickly, um, in terms of, uh, the asset management business, um, is your intention to get the free, meet the free for criteria and then stop at that point, and keep your, um, State stable or, or are you thinking, uh, something else there, and, and ditto on, on, on IU? Should we expect all the proceeds to be used for reinvestment in the, the new entity? Or or could we could we see some coming back to shareholders. Thank you.

Speaker #1: So, firstly, let me just kind of zoom out and give you a little bit of color on our Hong Kong business. So, I really like the shape of where our Hong Kong business is.

Speaker #1: As you would remember, Kailesh, coming out of COVID, we were highly skewed towards the Chinese mainland visitor business. We are now very much in balance, 50% is Chinese mainland and 50% is domestic.

Speaker #1: You're right in pointing out that domestic business did very well. Grew by 22%. And it also underscores in many ways the focus that we've been employing on quality.

Speaker #1: We are very focused on driving a proprietary channels and the quality came through quite strongly with the 7% points improvements that we saw in our margins.

Scottish, um, many questions there. So let me first start with the Hong Kong question, and the margin question. And then I will pass on to a bend for, uh, the new business trained as well as the question on AMC and and iroh. So firstly, uh, let me just kind of zoom out and give you a little bit of color on our, on our Hong Kong business. So I really like the shape of where our Hong Kong business is, as you would remember. Kalesh coming out of co, uh, we were highly skewed towards uh, the Chinese Mainland visitor business. We are now very much in Balance, uh, 50%, uh, is Chinese, Mainland and 50% is domestic. You're right in pointing out that, uh, domestic business did very well, uh, grew by, uh, 22% and uh, it also underscores in many ways the, uh, Focus that we've been employing on quality. Uh, we are very focused,

Speaker #1: Additionally, we are a multi-channel growth engine model. You would have noted the strong performance on bank assurance. And a combination of these factors are likely to continue in the second half of this year.

Speaker #1: To your specific question on CME, and I'll try and keep the answer short, we are not seeing any abatement in terms of the drivers of demand.

On driving a proprietary channels and the quality uh, came through quite strongly with the 7 percentage points improvements that we saw, uh, in in, in our margins. Uh, additionally, uh, we are a multi-channel, uh, growth engine model. Uh, you would have noted the strong performance on Bank insurance, and a combination of these factors are likely to continue, uh, in the uh, second half of of this year.

Speaker #1: We are constantly in touch with our agents, as well as with our customers. And the structural demand drivers for why Chinese mainland customers buy in Hong Kong, that seems to be very strong.

Speaker #1: So, strong domestic margin improvement, strong bank assurance, we are working very hard on improving our agency performance, and that gives us the positive outlook for taking Hong Kong to double-digit for the full year including upping our performance in the second half.

Speaker #1: I'm going to pause there and pass it on to Ben.

Speaker #4: Okay, thanks, Anil. Hi, Kailesh. So, if I take these in order, on new business strain, what you're seeing is the benefit of a slight shift in product mix.

Speaker #4: There's a bit more power in the mix, so we're more capital efficient. There's also some nuances in country mix. Look, what I think I'd steer you to going forwards is to continue to use 11%, , 12% in terms of APE when you think about modeling strain.

To your specific question on CME, and I'll try and keep the answer. Uh, short. Um, we are not uh, seeing any uh, uh, any abatement in terms of the drivers of demand. Uh, we are constantly in touch with our agents, as well as with our, uh, customers and the structural demand drivers for why Chinese Mainland customers Buy in Hong Kong, that seems to be, uh, very strong. So strong domestic margin Improvement, Strong Bank Assurance, we are working very hard on, improving our agency performance, and that gives us the, the positive outlook for taking Hong Kong to double digit for the full year, uh, including upping our performance in the second half. I'm going to pause there and pass it on to been. Okay, thanks Anil. Hi kalesh. Uh so if I take these in order on new business,

Speaker #4: To your question on the free float, aren't you seeing from today's actions as making steps towards meeting our free float requirements? Initially, I think, as you'll recall, that was a 15% free float.

Frame. Uh, what what you're seeing is the benefit of a slight shift in in product mix. There's a bit more power in the in, in the mix. So we're more Capital efficient, uh, there's also some nuances in country mix. Uh, look what I, I think I'd steer you to going forwards, is to continue to use 1112 percent, uh, in terms of ape when you think about, uh, modeling strain,

Speaker #4: But that then ups to a 25% free float. The proceeds, as you've seen, add to an already very healthy free surplus ratio. And of course, we're not going to retain capital; we don't need.

Um, so your question on, uh, the free float. You know, you've seen from today's actions of, uh, making steps towards, uh, meeting our free float requirements, you know, initially I think, as you'll recall, uh, that was a 15% free float. Uh, but that then UPS, uh, to a 25% free float. Um,

Speaker #4: So, they're being returned to shareholders. I think stepping back on the opportunity India remains a very strategic market for the group. And asset management, more broadly, an important wealth enabler.

Speaker #4: Your question on IPL sell-down, well, look, this firstly is subject to successful completion of our acquisition of Bharti. We are in discussions with the relevant parties around the sort of timetable of reducing shareholdings.

The, uh, the proceeds that you see, as you've seen add to an already very helpful free Surplus ratio and of course, we're not going to retain Capital, uh, we don't need. So, so they're being returned to shareholders. I think stepping back on the opportunity, India remains a very strategic market for the group, um, and asset management more broadly and important wealth enabler.

Your question on, uh, IPL sell-down—well, look, this, firstly, is subject to successful completion of our acquisition of, of, of Bharti.

Speaker #4: As we said in our presentation, we'll want to retain a portion of the proceeds from the sell-down, not just to fund the initial acquisition, but also to fund investment in the prudential Bharti platform to accelerate growth.

Um we in we are in discussions with the relevant parties uh around the sort of timetable of of reducing shareholdings.

Speaker #4: There will, however, be residual proceeds; we expect these to add once again to a very healthy free surplus ratio and hopefully you can see by our behaviors what that's likely to mean.

Um, you know, as we said in our presentation, we'll want to retain a portion of the proceeds from the sell-down, not just to fund the initial acquisition, but also to fund investment in the Prudential, uh, BARTI platform to accelerate growth.

Speaker #1: Just one additional point from my side, Kailesh. So, we now have complementing channels of both life and health in India. And pleased to share that we have started writing our first set of policies on the health business from earlier this month.

There will, however, be residual proceeds. We expect these to add, once again, to a very healthy free surplus ratio, and hopefully you can see, by our behaviors, what that's likely to mean.

Speaker #1: And remember, this is a joint venture where we have control with HCL. And delighted with the fact that we've been able to launch our health business in a market as strategic as India.

Speaker #4: Okay, thanks, Anil. Thank you. Over to the next one.

Speaker #2: Thank you, next caller is from Andrew Crean at Autonomous Research. Your line is now unmuted. Please go ahead.

And pleased to share that we, uh, have started writing our first set of policies on the health business, uh, from, uh, earlier—earlier this, uh, this month. And remember, this is a joint venture where we have, uh, control, uh, with, with etc., and delighted with the fact that we've been able to launch our health business, uh, in, uh, a market as strategic as India.

Okay, thanks. Anil, over to the next one.

Speaker #4: Good morning or good afternoon all. A couple of things. Ben, I think you said that the new business contribution to 2027 gross operating free surplus generation would move in line with new business in the 26 contribution.

Thank you, on. Next question is from Andrew Green at Autonomous Research. Your line is now unmuted. Please go ahead.

Good morning, or good afternoon.

Couple of things. Uh,

Speaker #4: Whereas I think it was up 42% in the first half. Just wanted to clarify there that you think that the contribution for 26 will be roughly 10% or in line with new business profits growth.

Ben, I think you said that the new business contribution to 2027 gross operating fee service generation would move in line with new business.

Speaker #4: Secondly, could you talk about MDRT active agent numbers in first half 2026 within your 55,000 total? And how much they grew? And then thirdly, Ben, you talked about the ROV being 15% and the scope to improve it by two to three points over time.

Uh, in the 26th contribution, whereas I think it was up 42% in the first half, just wanted to clarify that you think the contribution for 2026 will be roughly 10% or in line with new business profits growth? Secondly, could you talk about MDRT active agent numbers in the first half of 2026 within your 55,000?

Speaker #4: Where do you see that coming from? Do you see it coming from stronger new business, from positive operating variances, or from shrinking the embedded value denominator?

Speaker #4: Thank you.

Speaker #1: Thanks. Thanks for your questions, Andrew. So, why don't we first go to the new business contribution to free surplus generation? Let Ben answer that.

Presentate for, and how much they grew, and then, thirdly, you talked about the ROV being 15% and the scope to improve it by 2 to 3 points over time. Where do you see that coming from? Do you see it coming from stronger new business, from positive operating variances, or from shrinking the embedded value denominator?

Thank you.

Speaker #1: I'll have Naveen address your MDRT question, and then we'll kind of come back to the ROE one.

Speaker #4: Yeah, thanks. And hi, Andrew. So, the 42% increase, hey, represents really two things. One, as you appreciate, is sort of moving on one policy year and the other is growth in the book.

Thanks. Thanks for your questions. Andrew, so why don't we first go to the new business contribution to pre-suppose generation? Let me answer that. I'll have Navin address your MDRT question, and then we'll kind of come back to the ROI one.

Speaker #4: And so, another way to express that, if I think about the 2026 new business contribution to the 2027 target, there's a couple of things.

Yeah, thanks. And hi, Andrew. Uh, so the 42% increase, right, um, represents really two things. One, as you appreciate, is sort of moving on one policy a year.

Uh, and the other is growth in the book. And so, another way to express that, if I think about—

Speaker #4: One is actually the cash generation signature we're writing is very much in line with the 2025 cohort of new business. And that would have added, and you can see this in our accounts, 0.5 billion of contribution to 2027.

The 2026, uh, new business contribution to the 2027 target.

Um, there's a couple of things. One is actually the cash generation signature we're writing is very much in line with the 2025 cohort of new business.

Speaker #4: So, I would start with that as a base, and then simply grow that by the growth we're putting on the book in 2026, if that makes sense.

Speaker #4: Do you want me to pick up? Is that growth in new business profits or sales? Profits, Andrew. Profits. Okay, thanks.

And that would have added, and you can see this in our accounts, $0.5 billion of contribution to 2027. So I would start with that as a base, and then simply grow that by the growth we're putting on the book in 2026, if that makes sense.

Uh,

Do you want me to pick up growth in new business, profits, or sales?

Speaker #1: Let's go to the MDRT, and then we'll come to the ROEV question.

Profits, Andrew profits.

Speaker #4: Okay. Thank you, Anil. Andrew, hi. Thanks for your question. Let me answer it like this. I think firstly, as we have shared in the past, we remain very focused on improving the productivity of our agency force.

Okay.

Let's go to the MDRT, and then we'll come to the ROE question, okay? Thank you, Andrew. Hi, thanks for your question. Let me answer it like this. I think, firstly,

Speaker #4: One aspect of which is growing our MDRT franchise. We are very proud that we are the number two MDRT franchise, and we look to strengthen that position this year.

As we have shared in the past, we remain very focused on improving the productivity of our agency force.

Speaker #4: As you've seen from the numbers, our NBP per active has grown for the 9% in H1 this year. And this has happened because of five initiatives, which we will continue to accelerate through the second half of this year.

One aspect of which is growing RMD, RT, franchise. We are very proud that we are the number two MDRT franchise, and we look to strengthen that position this year.

Have you seen from the numbers?

Our MVP per active has grown by 9% in H1 this year.

Speaker #4: Very briefly, I think the first one is we will continue to pivot the quality of our recruitment towards high-quality schemes like PRU Ventures. Which have scaled up already in markets of Hong Kong, Singapore, and Malaysia, and which have been relaunched and refurbished in markets of Indonesia and the Philippines.

And this has happened because of five initiatives, which we will continue to accelerate through the second half of this year. Very briefly.

Speaker #4: Second, we have launched for the first time this year a group-wide PRU MDRT program, which kind of creates benefits capability building and incentives for our MDRTs across all markets.

I think the first one is, we will continue to pivot the quality of our recruitment towards high-quality schemes like preventers, which have scaled up already in markets of Hong Kong, Singapore, and Malaysia.

And which have been relaunched and refurbished in the markets of Indonesia and the Philippines.

Second, we have launched, for the first time this year, a group-wide, through-MDRT program,

Speaker #4: And you will recall we had also made compensation changes early on in the year favoring high productivity agents, which we expect to see some benefits come through in the second half of the year in particular.

Which kind of creates benefits, capability building, and incentives for RMD and RTS across all markets.

Speaker #4: Third, we have had good success with launch of affluent propositions. Our case sizes have increased by 6% in H1 this year. You would have noticed that number.

And you will recall, we had also made compensation changes early on in the year, favoring high-productivity agents, which we expect to see some benefits from coming through in the second half of the year in particular.

Third, we have had good success with the launch of affluent propositions.

Speaker #4: And we are poised for some more affluent proposition launches in our key markets in the second half, so that will be an additional flip.

Our case sizes have increased by 6% in H1 this year—you would have noticed that number.

Speaker #4: Fourth, Ben already mentioned that we've pivoted quite strongly to health and protection, which has been a driver of our margins. And we have further initiatives to enhance health and protection in our agency channel.

And we are poised for some more affluent proposition launches in our key markets in the second half, so that will be an additional fillip.

Fourth, it's been already mentioned that we've pivoted quite strongly to health and protection, which has been a driver of our margins.

Speaker #4: And last but not the least, there's significant investment in AI and technology in the agency platform to drive productivity. Our PRU Action 1.0, which is our AI module for performance management, is now live in Singapore.

and we have,

Further initiatives to enhance health and protection in our agency channel.

And last but not least.

Their significant investment in AI and technology in the agency platform to drive productivity.

Speaker #4: At scale across 5,000 agents. And please to share that regular users have improved productivity by more than 13%. Now, on your specific question of what is the actual growth in the MDRT numbers, what I can share is the following, that MDRT is a full-year phenomena.

Our True Action 1.0, which is our AI module for performance management, is now live in Singapore at scale, across 5,000 agents. And please do share that regular users have improved productivity by more than 13%.

Speaker #4: We are at the half-year stage. And we will continue to focus on our MDRT initiatives as we grow forward. What I can share specifically is that the contribution of MDRT and the strong pipeline that we have on MDRT.

Now, on your specific question: what is the actual growth in the MDRT numbers?

What I can share is the following: that MDRT is a full-year phenomenon. We are at the half-year stage and, uh, you know, we will continue to focus on our MDRT initiatives as we grow forward.

Speaker #4: So, I'm now in particular referring to agents who've already crossed 70% of MDRT threshold at the half-year mark. The contribution of APE from this cohort and people who've already become MDRTs remains exactly what it was last year.

What I can share specifically is that the contribution of MDRT,

Speaker #4: So, we are pretty much dead on where we were last year. And we will look to accelerate in the second half of this year.

Speaker #4: Thank you.

Speaker #2: And then coming back to your ROEV question, Andrew, so the start point for that is double-digit growth in new business. We are at double-digit business.

And the strong pipeline that we have on MDRT. So I'm now, in particular, referring to agents who have already crossed 70% of the MDRT threshold at the half-year mark. The contribution of APE from this cohort, and people who've already become MDRT, remains exactly what it was last year. So we are pretty much dead on where we were last year, and we will look to accelerate in the second half of this year. Thank you.

Speaker #2: The opportunity for the additional two to three points is really twofold. One, completion of the investment in capability program you're aware of. But also then improving variances and I'm pleased with the progress we've made in that regard.

And then, coming back to your ROV question, Andrew. So the starting point for that is, you know, double-digit growth in your business. We are a double-digit business. Um,

Speaker #2: As you will have seen, we're back to net positive underlying variances. Positive underlying claims experience. What we'll now start to benefit from is scale coming through ultimately.

Speaker #2: And greater operating leverage and there's a slide in the appendix to my presentation showing our operating leverage ratio improving 40 bits in the period.

Speaker #2: So, that's where you're going to see the uptick.

Speaker #1: Okay, thank you. Back to Alex for the next question, please.

the opportunity for the additional 2 to 3 points is really twofold, 1, completion of the investment, and capability program, you're aware of. Uh, but also then improving variances, and, and I'm pleased with the progress we've made in that regard. You know, as you will have seen, we're back in that positive, underlying variances, um, positive, underlying claims experience. What, what will now start to benefit from is scale coming through, ultimately, uh, and greater off operating leverage and there's a slide in the appendix, to my presentation, showing our, our, our operating leverage ratio, improving, uh, 40 40 bits per the period. So, uh, yeah, that that's, that's, that's where you're going to see the

The optic.

Speaker #5: Thank you, next caller is Nasib Ahmed from UBS. Your line is now unmuted. Please go ahead.

Okay, thank you. Uh, thank you. Back to Alex for the next question, please.

Speaker #1: Okay, thank you. Thanks for taking my questions. There's three for me. Firstly, can I unpack the double-digit growth for the group in NBP? Regarding China, broadly flat.

Thank you. Next caller is Amed from UBS. Your line is now unmuted. Please go ahead.

Speaker #1: I get Hong Kong's going to do double-digit, but what's kind of pulling up the rest of the business? Second, on Malaysia, I saw MDRT 2026 was up 4%.

Speaker #1: Even this profit is pretty good as well. Where can you actually get can you get any learnings from this Malaysia business and kind of get them onto other places and geographies as well?

Okay, thank you. Thanks for taking my questions. There's 3 for me. Firstly, can I unpack the double digit growth for the group, in nbp, um, regarding China? Broadly flat. I get Hong Kong's going to do double digit. But what kind of pulling up uh, the, uh, the rest of the business?

Speaker #1: And then finally, on the short-term variances below the line, the 6 to 6 million, where has it come from? Is there anything that's actually economic versus non-economic in their China is typically an economic move?

Second. Um, on Malaysia, I saw mdrp, 2026 was up 4% because this Prophet is pretty good as well. Um, where can you actually get? Um, can you, can you get any learning from this uh, Malaysia business and and kind of get them onto

Other places in geographies as well. And then finally, on the short term variances below the line, the $626 million, where, um,

Speaker #1: Thank you.

Speaker #4: Thanks, Nasib. So, let me take the first one and I'll go to Naveen on the second and Ben on the third on your third question.

Where does it come from? Uh, is there anything that's actually economic versus non-economic in there? China is typically an economic, uh, move. Thank you.

Speaker #4: So, we are firmly focused on delivering our guidance of double-digit growth across a range of financial matrix and pretty much kind of lining that up as we look at our objectives for 2027 as well.

Thank you. Um, so let me take the first one, and I'll go to Navin on the second, and then to Bin on the third, uh, on your third question. So, um, we are formally focused, uh, on delivering our guidance of double-digit growth across a range of, uh, financial metrics and pretty much kind of...

Speaker #4: You're right in pointing out that we believe that we'll carry some of the positive developments in Hong Kong into the second half. We also believe that the growth will resume in China.

Speaker #4: We are taking a number of steps to firstly conform to the new expense regulations as well as have a slew of actions in force.

Speaker #4: To be able to get our product mix in balance. So, that should hopefully get us to a positive growth in the second half in China.

Speaker #4: But at the end of the day, we are a multi-growth or rather multi-market growth model. So, if you look at our Malaysia business, it did very well.

Speaker #4: Thailand had an outstanding first half. We believe that we can take the growth in Singapore from mid-single digit to high single digit, if not early double digit.

Speaker #4: And we are also starting to see a turnaround come through in our Vietnam business. So, remember the Vietnamese business has been negative growth for us and it's starting to now flatten out to getting a marginally positive.

Speaker #4: And we are hopeful that it will start to it will start to grow as we kind of go through the second half of this year.

Speaker #4: So, we have a number of markets that will complement some of the growth that we are going to see in Hong Kong, which gives us the belief that we will be able to get to our guidance for 2026.

Uh but at the end of the day, we are a multi growth uh uh multi growth uh or rather multi-market growth model. So if you look at our Malaysia business it did very well. Uh Thailand had an outstanding uh first half. Uh we believe that we can take the growth uh of in Singapore from mid single digit to high single digit. If not early d double digit and we are also starting to see a turnaround come through in our Vietnam business. So remember the Vietnamese business has been uh, negative growth for us and it's starting to now flatten out to getting a marginally positive. And we are hopeful that it will start to uh, it will start to grow uh, as we kind of go through, uh, the second half of of this year. So we have a number of markets uh, that will compliment uh some of the growth that we uh, are going to see in Hong Kong, which gives

Speaker #4: I'm going to go to Malaysia, which had a very strong performance. Naveen, you want to tee that up?

Speaker #1: Sure, sure. Thanks, Anil. And Nasib, thanks for the question on Malaysia. So, as you've seen in the numbers, Malaysia grew very strongly in the first half.

It's the belief that we will be able to get to our guidance for 2026.

Speaker #1: Led by an outstanding performance from agency in particular. And if you recall, agency, we had shared last time had turned the corner in the second half of the year.

I'm going to go to Malaysia, which had a very strong performance. I mean, you want to see that for sure. Thanks, Anil, and thanks for the question on Malaysia.

So, as you have seen in the numbers, Alishia grew very strongly in the first half.

Led by an outstanding, uh, performance from Agency in particular.

Speaker #1: And Malaysia is second half of last year, I mean. And Malaysia is the one emerging ASEAN market where our agency transformation is the furthest.

And if you recall, Agency, we had shared last time, had turned the corner in the second half of the year.

And Malaysia, in the second half of last year, I mean,

Speaker #1: In its implementation. And to your specific question, there are three big learnings, I think, coming out of Malaysia, which will sustain the performance of Malaysia.

And Malaysia is the number one EM market, where our agency transformation is the farthest in its implementation.

Speaker #1: Through the next few quarters. But also help us in our other ASEAN markets. The first one is focus on quality recruitment. We had talked about this last time as well, that the Pru Ventures program is at scale in Malaysia.

And to your specific question, there are—

Three big learnings, I think, coming out of Malaysia, which will sustain the performance of Malaysia through the next few quarters.

Speaker #1: And we are seeing the incoming class of recruits actually drive productivity, which is 5 to 6 times. The normal organic recruits. And increasingly the focus is to make sure that we have more and more share coming from the Pru Venture recruits.

But it will also help us in our other Asian markets. The first one is a focus on quality recruitment.

We had talked about this last time as well, that the Proof Ventures program is at scale in Malaysia, and we are seeing the incoming class of recruits.

Speaker #1: The second one is tailored proposition for the agency. Largely on health and protection, but also a set of propositions addressing the H&I and affluent needs in the Malaysian markets.

Actually drive productivity, which is five to six times the normal organic recruits. And increasingly, the focus is to make sure that we have more and more share coming from the Prudential Venture recruits.

The second one is a tailored proposition for the agency.

Speaker #1: Has worked really well in the first half for us. And those are learnings that we will also take forward to other markets, particularly Indonesia, Philippines.

Speaker #1: Where we have launched Pru Ventures or refurbished it in the first part of this year. And we are looking to launch some of these protection and affluent propositions in the second half.

Speaker #1: And third, very pleased to also share that Malaysia had very strong growth in active agents. In the first half. This was 10% plus. On the back of some of the ways of agency management initiatives that we have put in place.

Largely on health and protection, but also a set of propositions, you know, addressing the HNI and affluent needs in the Malaysian markets, has worked really well in the first half for us. And those are learnings that we will also take forward to other markets, particularly Indonesia and the Philippines, where we have launched Pro Ventures, or refurbished it in the first part of this year. And we are looking to launch some of these protection and affluent propositions in the second half.

Speaker #1: And again, those gave us learnings for some of the emerging ASEAN markets as we move forward. So, all in all, strong performance from Malaysia.

And third, very pleased to also share that Malaysia had very strong growth in active agents in the first half. This was 10% plus, on the back of some of the ways of agency management initiatives that we have put in place.

Speaker #1: Sustainable growth as we see it going forward, particularly driven by agency and lots of learnings that we are already taking to other emerging ASEAN markets.

Speaker #4: Nasib, just one additional point from me. So, while we remain positive about the growth prospects in Malaysia in the second half, on account of all the reasons that Naveen has mentioned, do expect the growth to moderate in the second half versus the first half.

And again, those give us learnings for some of the emerging RCM markets as we move forward. So, all in all, strong performance from Malaysia; sustainable growth as we see it going forward, particularly driven by agency, and lots of learnings that we are already taking to other emerging Asian markets.

Speaker #4: I'm going to go to Ben for your third question.

Speaker #2: Yeah, hi Nasib. So, two elements really to the IFRS non-op result. Firstly, lower rates in China. That lowered the discount rate that we applied to the GMM contracts.

Speaker #2: And lower spreads. And then secondly, higher rates, more broadly across many of our markets. So, there was a mark-to-market impact on bond holdings backing shareholder business.

Now, as I say, just 1 additional point for me, so while we remain positive about the growth, prospects in Malaysia and the second half on account of all, the reasons that Navin has mentioned, uh, do expect the growth to moderate in the second half versus, uh, the first half. I'm going to go to a band for your third question. Yeah, hi Nazi. Um, so so, so 2 elements really to the uh, IFRS non-op results. Uh, firstly, you know, lower rates in China. That

The discount rate that we applied to the GMM contracts, uh, and lower spreads.

Speaker #2: But also, you then had the sort of discounting effect getting us to a lower present value of future profits on health and protection business.

Uh, and then secondly, higher rates more broadly across many of our markets. So there was a mark-to-market impact on bond holdings backing shareholder business.

Speaker #2: So, arguably, a lot of those movements sort of discount rate related as opposed to underlying economics. What I would point out, I'm sure you've noticed actually, that we have positive unlocking in the CSM that goes some way to offsetting that minus 0.6.

Speaker #2: There's 0.4 positive of unlock. And that's to do with better than expected long-term equity returns across a number of our markets.

Speaker #1: Perfect. Thank you.

Speaker #4: Alex, we'll go to the next one.

Speaker #3: Thank you. Next caller is Michael Chang from CGSI. Your line is now unmuted. Please go ahead.

Perfect, thank you.

Alex, we'll go to the next one.

Speaker #5: Sure. Thanks. I've got a few questions. I'll start with Mainland China. Started off the year very strongly, then obviously we've got some regulatory impacts that impacted Q2 and quite possibly a bit of the second half as well.

Thank you. Our next caller is Michael Chang from CGSI.

Your line is now unmuted. Please go ahead.

Speaker #5: I really appreciate the additional disclosure in terms of the quarterly trends for the Mainland China business. But can I just get a sense in terms of seasonality?

Speaker #5: What typically is a normal seasonality pattern within Mainland China? Because typically one Q tends to be very strong and four Q tends to be very weak.

Speaker #5: So, I'm not really sure how to actually interpret the numbers as to how high three Q base is and how low four Q base is.

Speaker #5: I mean, when I talk to some of the other insurers, it's typically maybe about 30 or 35%, then 20, 25, 25, and then the last quarter might be about 15.

Speaker #5: Is that fairly similar for Pru's Mainland China business? Secondly, if I go across to Singapore. Singapore, is a market whereby I think APE has been very strong, but margins have been lagging a bit.

Sure, thanks. Uh, uh, I've got a few questions. Uh, I'll start up with mainland China, um, started up the very strongly, then obviously we've got some, uh, uh, regulatory impacts uh, that impacted uh, 2q and uh, and quite possibly a bit of the second half as well. I I really appreciate the additional disclosure in terms of the, the quarterly, uh, Trends. But the man in China business. But can I just get a sense, you know, in terms of seasonality, what typically is a normal seasonality pattern, we can manage in China because typically, 1 Q tends to be a very strong and 4 q tends to be a very weak. So I'm not really sure how to actually interpret the the numbers as to how how high 3 Cube base is, and how low for cube base is? I mean, when I talked to, uh, some of the other insurers, it's typically, maybe about 30, or 35%, and 2025 25 255. And then the last quarter might be about 15 is that fairly similar for, uh, for approaching and then China business? Um, secondly, um, uh, about

Speaker #5: So, maybe I can just get a sense for when margins start to turn around and when the agency performance will start to see a bit more of an improvement.

Speaker #5: Because it seems to be very much bank assurance driven at this stage. And then lastly, bank assurance has clearly sorry, OFSG. OFSGs, the inflection point, taking a look at the growth as of the first half.

Speaker #5: And likely for the full year, we're looking at probably mid-high teens, which means that to meet the 2027 target, next year OFSG growth will be clearly at the high end of the inflection point, over 20%.

Speaker #5: How then should we be thinking about or modeling Thanks.

Speaker #4: Hi, Michael. So, let me start with your first two questions, and then I'll go to Ben for the resurplus generation one. So, in China, as you know, we have been very focused on driving transformation over the last three and a half years.

Go across the Singapore, Singapore. Um, is a market whereby I think well, AP has been very strong, but margins have been lagging a bit. So maybe I can just get a sense for, uh, when when markets start to turn around. And when the agency performance will start to see a bit more of an improvement, because it seems to be very much a bank Assurance, uh, tripping at this stage and then lastly, um, uh, Bank. Insurance has clearly, uh, sorry. Um, or FSG or FSG is the inflection point, uh, taking a look at the growth, um, as of the first half and likely for the full year, we're looking at probably mid High Teens, which means that to meet the 2027 Target, uh, next year or FSG grow will be clearly at the high end of the inflection point over 20%. How then should we be thinking about or modeling going forward, close 2027, thanks.

Speaker #4: And you saw that come through quite emphatically in our 2025 results. We carried that momentum. Quite strongly into 2026. You're right to point out that quarter one typically tends to be the door opener, which tends to be the biggest quarter in the year.

Speaker #4: We did see the impacts of a higher than than expected bar mix as well as regulatory changes in quarter two. And as we look to the second half, we are focused on three things.

Hi Michael. Um, so let me start with your first 2 questions and then I'll go through them for the free Surplus Generation 1. Uh, so, uh, in China as you know, we have been very focused on driving transformation over the last 3 and a half years and you saw that come through, uh, quite emphatically in our 2025, uh, results. We carried that momentum, uh, quite strongly into, uh, 2026. You're right to point out that, uh, quarter, 1 tends to be the door opener, which tends to be the

Speaker #4: One, we have a big comparator base in quarter three in China. July, August, and specific were very strong months for us in 2025. So, that is something that we have to deal with.

Speaker #4: From September onwards, the competitors start to ease quite significantly. So, to your question, the shape of how we're going to grow in China or how we deliver the new business profit in China is likely to be slightly different from what you probably witnessed in 2020, in 2025.

Speaker #4: In terms of your second question on Singapore, we saw growth both across agency and bank assurance on volumes. And the challenge for us was the new rules that came in with respect to co-payment.

The biggest, uh, quarter, uh, in the year. Uh, we did see the impacts, uh, of, uh, a higher than expected power mix as well as regulatory changes in in quarter 2. And as we look to, uh, the second half we are focused on 3 things 1, we have a big comparator base in quarter 3. In China, uh July August and specific were very strong months for us in 2025. So that is something that we have to deal with uh, from September onwards. Uh, the competitors start to, uh, is quite significantly. So to your question, the shape of how we going to grow in China, or how we deliver the new business, uh, profit in China is likely to be slightly different from what you probably witnessed uh in in in 2020 in 2025 uh in terms of your second question on Singapore.

Speaker #4: And this is where we had to adjust to the new health guidelines that the government introduced, which had a knock-on impact, as you rightly pointed out, on margins.

Speaker #4: In Singapore, we provide the entire spectrum of products, as you imagine, as you can imagine. And we have launched newer protection products to extend our health continuum.

We saw growth both across agency uh, and Bank Insurance on on, on volumes. And the challenge for us was the new rules that came in with respect to, uh, core payment. And this is where, uh, we had to adjust, uh, to the new, uh, Health, uh, guidelines that the government uh introduced, which had a knock-on impact. As you rightly pointed out on on margins in Singapore, we provide the entire

Speaker #4: As well as launch innovative products to address the needs of the high net worth and the ultra-high net worth customers. And that kind of gives us the confidence that some of these shorter-term challenges around the health or the changes to the health regulations we will be able to offset that as we go through the second half of this year.

Speaker #4: Remember, we are a household brand in Singapore. Very strong on both agency as well as on account of our partnership with Standard Chartered and UOB in Singapore.

Speaker #4: I'm going to stop there. I'm going to go to Ben for the resurplus questions.

Speaker #2: Yeah. Thanks, Anil. Hi, Michael. So, look, we're very pleased with our progress on the capital generation front. Very confident in delivering our 2027 OFSG targets of 4.4 billion.

Brand in Singapore—very strong on both agency, as well as on account of our partnership with Standard Chartered. And you will be in Singapore. I'm going to stop there and go to Ben for the free surplus question. Yeah, thanks Anil. Hi, Michael. So,

Speaker #2: There's a slide in the appendix to my presentation that sets out the development of the free surplus ratio. I think it's useful to think in terms of those building blocks.

Look, we're very pleased with our progress on the capital generation front. Uh, very confident in delivering our 2027 OSG targets of $4.4 billion.

Speaker #2: When you model OFSG going forwards, beyond 2027. Look, in short, the in force generation the expected transfer continues to grow strongly. I mean, as you know from our past comments, we've calibrated dividends and the additional recurring capital returns to be sustainable.

There's uh, a slide in the appendix to my presentation that sets out the development of the free Surplus ratio. I I think it's useful to to think in terms of those building blocks when you model of FSG going forwards, uh Beyond 2027.

Speaker #2: And allowing for those, we expect to be at the upper end of our free surplus range. So, when you model that out, allow for the acceleration you referred to, to our objective of 4.4.

Speaker #2: I think, as I've said before, I'd continue to guide you to required capital growing, early double digit. I mentioned the sort of rough yardstick to use for new business strain earlier on this call.

Uh, look in in short, um, the enforce generation uh the expected transfer continues to grow strongly. I mean, as you know, from from, from our past comments, we we've calibrated dividends, and the additional recurring Capital returns to be sustainable, uh, and allowing for those, we expect to be at the upper end of our free surface range. Um, so when, when you model that out, you know, allow for the acceleration, you referred to, to our objective of 4.4. Uh, I think as I've said before, I'd continue to guide you to required Capital growing early, double digits,

Speaker #2: Central costs will remain fairly flat. Which I think then gives you all of the ingredients non-operating, a bit harder to give guidance on, as you know.

Um, I mentioned the sort of rough yardstick to use for new business strain earlier on this call.

Speaker #2: That's the sort of market movements effects on regulatory balance sheets. Some of which aren't necessarily economic in nature. And you can see from pre-capital returns, if you annualize it, we're generating mid-double digit growth in the free surplus ratio.

Speaker #2: So, hopefully, that gives you a sense.

Speaker #4: Okay. Thank you. Alex, next question, please.

Uh, Central costs will remain fairly uh, fairly flat, um, which I think then gives you all of the ingredients non-operating a bit harder to give guidance on. As you know, that's the sort of Market movements effects on regulatory balance sheets. Um, some some of which, you know, aren't necessarily economic in in nature. Uh, and you can see from from the slides that actually pre pre pre Capital returns. If you annualize it, we're, we're generating mid double digit, uh, growth in the free Surplus ratio.

So, hopefully that gives you a sense.

Speaker #3: Thank you. Next caller is Michelle Ma from Citi. Your line is now unmuted. Please go ahead.

Okay, thank you. Uh, Alex, next question, please.

Speaker #5: Thank you for giving me this opportunity. This is Michelle Ma from Citi Research. So, yeah, first, congratulations on the results, despite a very challenging environment.

Thank you. Next caller is Michelle Ma from Citi. Your line is now unmuted. Please go ahead.

Thank you for giving me this opportunity. This is Michelle from the research team.

Speaker #5: The very high base. So, I have to question. So, first is on CTL. So, I think 2026 is not a typical year given so many kind of regulatory disruptions and the product mix changes.

Speaker #5: Just wonder given the pop products already account for more than account for almost 80% in the first half. And it resulted in some notable margin deterioration.

Speaker #5: Can we see can we say we kind of finished the product mix change and currently we are quite satisfied with the product mix and the next year there won't be like there won't be such kind of drastic margin deterioration.

So, uh, yeah, uh, first, congratulation on the result despite a very challenging environment with a very high base. So I have to question. So, uh, first is on, uh, CPL. So I think, uh, 2026 is not a typical year given, uh, so many, uh, kind of, uh, regulatory disruptions. And the product makes changes, uh, just uh, uh, Wonder. Um, you know, given the pop products already account for more than account for almost 80%, uh, in the first half, um, and the at the, uh, resulted in some, uh, notable margin deterioration. Uh, can we see, uh, can we say, uh, we kind of finish the, you know, the, the, the, uh, product mix change. And the currently, we are quite satisfied with the, uh, product product product mix and the next year, um, there are

Speaker #5: And next year there won't be any kind of high base or one loss disruption. So that China business, we are confident to go back to the trajectory of high growth.

Speaker #5: This is my first question on margin deterioration and the sustainable level of growth for CPR. The second question is Hong Kong. It's very interesting.

Speaker #5: And we appreciate you share the result of your survey that in the next 12 months, there are still like 74% of BME, they have planned to visit Hong Kong.

Will be, uh, like, uh, there won't be, uh, such kind of stress with, uh, margin deterioration. And the next year, there won't be any kind of, uh, uh, High base or when know, uh, disruption. So that, you know, China, uh, business. We are confident to go back to the trajectory of high growth. Uh, this is my, uh, first question on margin, uh, uh, uh, deterioration and the, uh, sustainable level of growth for the pr. The second question is, um,

Speaker #5: And 88% of them they are going to buy insurance products, just wondering if there is any more you can disclose of this survey because we are seeing the HNP product is going faster.

Speaker #5: Have they disclosed which type of products there will be more interested given the current the ongoing concern over the taxation over overseas insurance products?

Speaker #5: Just want to have a sense how our Hong Kong MCV, their product mix we are going to change given you have done such a fantastic survey.

the ongoing concern over the, um,

Speaker #5: Thank you.

Speaker #4: Hi, Michelle. Thanks for this question. So, let me start with the second one because as you can imagine, we are in constant touch with our customers and with our agent partners and we've kind of shared some of the slides in terms of the feedback that we are receiving.

The, the taxation over, uh, the, the, uh, overseas, the insurance products—just want to have a sense how our Hong Kong, uh, MCV, their product mix, we are going to change, given you have done such a fantastic survey. Thank you.

Speaker #4: In fact, I'm happy to share we've just received the feedback on the most recent survey that we conducted in August. And the feedback is very much similar.

Speaker #4: To what we have already kind of shared on our slides, which kind of gives us the confidence that the demand drivers as to why Chinese mainland visitors buy policies in Hong Kong pretty much remains intact.

Speaker #4: And as I said, we will continue to kind of stay close because there's a lot of news flow, as you can imagine, right now.

Speaker #4: And we are in constant touch with both our agents as well as well as our customers. So, I'm going to stop there. I'm going to go to your CPL question on the first half.

Speaker #4: What are we doing in second half and specifically the guidance on margin? Angel?

Bye. Michelle. Thanks for this question. So let me start with the um the second 1. Because uh, as you can imagine uh, we are in constant touch with our customers and with our agent partners and we're going to share, uh, some of the slides in terms of the feedback that we are receiving. Uh, in fact I'm happy to share. We've just received, uh, the feedback on the most recent survey that we conducted in August and the feedback is very much similar to what we have already kind of shared on our slides, which kind of gives us the confidence that the demand drivers as to why Chinese Mainland, uh, Visitors by policies in Hong Kong, pretty much remains uh, intact. Um, and as I said, we will continue to kind of stay close, uh, because there's a lot of news flow as you can imagine right now. Uh, and uh, we are in constant touch with both our agents as well uh, as well as our customers. So,

Speaker #1: Sure. Thank you, Anil. Thank you for the question, Michelle. I think we're rightfully pointed out that this year you are seeing two things happen.

Speaker #1: In CPL, one is the regulatory change in the banker expense alignment. And the other one is the pronounced shift of the product mix shift to par.

Speaker #1: So, CPL, as you know, has been successfully shift in the product mix to par. Coming up from a low single digit to 40% last year.

Speaker #1: And first half is 76. So, that gives a bit of a margin compression. You know that you are seeing. However, we have quickly pivoted to protection business in quarter two, especially in agency.

Speaker #1: Which we are seeing quarter on quarter margin uplift already. Second half, we will focus on protection product and optimizing margin for par savings product.

Speaker #1: In August, actually, many of the non-part products have been onboarded to most of our partner's bank. So, you'll be expecting that full year, we want to normalize our par mix to about 60%.

I'm going to stop there. I'm going to go to your CPL question on the first half. What are we doing? In second half and specifically the guidance on margin Angel. Sure, thank you and you thank you for the question, Michelle. I think you know, we rightfully pointed out that you know, this year, uh, you are seeing 2 things happen. You know, in CPL 1 is the uh regulator regulatory change. You know, in the banker expense alignment and the other 1 is the pronounced shift of the product mix, uh, shift to par so CPL. As you know, you know, has been successfully shifted in the product, mix to par coming up from a low single digit to 40% last year. And, uh, first half is 76. So that gives a bit of a, uh, margin compression. You know, that you are seeing, however, you know, we have, uh, quickly pivoted to, uh, protection business in quarter to especially in agency, uh, which we are seeing quarter on quarter Market uplift, already, uh, second half, you know, we will focus on protection product and

Speaker #1: Back to you.

Speaker #4: And Michelle, just in terms of what you can expect from a margin perspective, we are right now working towards a full year margin in China of about 40% versus 43% for the full year of 2025.

Optimizing margins for power savings products. In August, actually, many of the non-partisans have been onboarded to most of our partners’ banks. So you’ll be expecting that, for the full year, we want to normalize our PICS to about 60%.

Speaker #2: Okay. Thank you. Next question, please, Alex.

Back to you, and Michelle, just in terms of what you can expect from a margin perspective. We are, right now, working towards a full-year margin in China of about 40%, versus 43% for the full year of 2025.

Speaker #3: Thank you. Next caller is Farooq Hanif from JP Morgan. Your line is unmuted. Please go ahead.

Okay. Thank you. Next question, please, Alex.

Speaker #6: Hi. Thank you very much. Three questions if I may. First one, actually, just taking everything you've just said, on new business, you've given quite a lot of detail on building blocks just because it's very helpful.

Thank you. Uh, next caller is Farouk Naif from J.P. Morgan. Your line is unmuted, please go ahead.

Speaker #6: So, thank you for that. But I just want to look big picture. So, you use the word firmly confident on new business profit double digit growth for '26.

Speaker #6: I think in one key, you said sorry, firmly committed. In one key, you use the words confident. I just want to know from you, I mean, is there any change here?

Speaker #6: I mean, do you think there's a very high probability you will deliver this? Or are you trying to say, guys, we're trying our best, but it's an uncertain environment?

Um, hi. Thank you very much. Um, three questions if I may. Uh, first of all, actually just taking everything you've just said on your business, you've given quite a lot of detail on building blocks, which is very helpful, so thank you for that. But I just want to look at the big picture. So, you used the word 'firmly confident' on your business, uh, profit double digit growth for '26. I think in one key, you said, um, uh, sorry, 'certainly committed,' and in one team you used the word 'confidence.' I just want to know from you.

Speaker #6: I just want to understand the messaging that you're trying to give here because I think there's a big debate about that this morning. Second question is, long-term vision for India.

Speaker #6: You're replacing a really big partnership in life but with a low share. And it's lost market share in India. For a much bigger partnership where you'll have control, and a health venture.

I mean, is there any change here? I mean, do you think there's a very high probability you will deliver this, or are you trying to say, "Guys, we're trying our best, but it's an uncertain environment"? I just want to understand the messaging that you're trying to give here, because I think there's a big debate about that this morning. Um, second question is, uh, long-term vision for India. You're replacing a really big partnership in life. Um,

Speaker #6: I mean, at what point does this look greater than or equal to what you have already? In your estimation, given if we assume a world where you get regulatory approval, etc.

Speaker #6: And my last question very quickly for Ben is, I know there's been some changes in the IFRS profit and the CSM and investment margin.

Speaker #6: Can you just give any guidance on some of those items? I mean, you talked about CSM growth already, but just in the investment margin, any other items?

Speaker #6: Thank you very much.

Speaker #4: Thanks, Farooq. So, let me start with the first question on guidance. I'll go to Naveen on India. And the IFRS one to Ben. So, the short answer is we are not changing our 2026 guidance.

But with a low share, and that's lost market, share in India for a much bigger partnership where you'll have control and a health Venture. I mean, at what point does this look greater than or equal to what you have already, um, you know, in your estimation given, you know, if we assume a world where you get regulatory approval Etc. Um and my last question very quickly for Ben is um, I know there's been some changes in the IRS profit and the the CSM and investment margin. Can you just give any guidance on some of those items? I mean, you talked about uh, CSM growth already but just in the investment margin and the other items. Thank you very much.

The first question on guidance—I'll go to Navin on India.

Speaker #4: And as I've said that we are firmly focused on executing against our half to goals to get to that guidance as well as firmly focused on our 2027 financial objectives.

Speaker #4: We have to navigate a couple of things. One, is the high comparative base both in Hong Kong and in China in July and August, which materially starts to ease from September onwards.

Um and the IFRS want to to to ban uh. So the short answer is we are not changing our 2026 guidance. And as I said that, we are firmly focused on executing against our have to goals, to get to that guidance, as well as firmly focused on our 2027 Financial objectives.

We have to navigate a couple of things: one,

Speaker #4: And again, we've given you a lot of color both in terms of Hong Kong as well as in terms of the actions that we are enforcing in China to get the China trajectory back to where it needs to be.

Speaker #4: The second is we obviously have to go through the transition on the expense guidelines in bank assurance. And again, Angel kind of gave a little bit of color in terms of what you can expect both in terms of the new business launches as well as what it would do to pivoting back to a much more balanced set of product mix.

There is a high comparator base both in Hong Kong and in China in July and August, which materially starts to ease from September onwards. Again, we've given you a lot of color, both in terms of Hong Kong as well as in terms of the actions that we are enforcing in China to get the China trajectory back to where it needs to be.

Speaker #4: And the knock-on impact, it would have on improvements of margin versus what we witnessed in the first half of this year. So, those are the things that we are navigating.

Speaker #4: But at no point in time we are changing our guidance to 2026 as well as our belief in the 2027 financial objectives. I'm going to stop there.

The second is we obviously have to go through the transition on the expense guidelines, uh, in in Bank assurance and again, Angels kind of give a little bit of color in terms of what you can expect, uh, both in terms of the new business launches, as well as what it would do, to pivoting back to a much more balanced set of product mix and the knock on impact, it would have on improvements of margin versus what we witnessed in the first half of

Speaker #4: I'll go to the India question, to Naveen, and then Ben, if you can pick up the IFRS one.

Speaker #5: Okay. Thanks, Anil. Hi, Farooq. So, as Anil already mentioned, Farooq, that India is a strategic pivot for us in terms of how we approach the market.

Speaker #5: And subject to regulatory approval of our life insurance transaction, we will have this very unique position in India of being the multinational insurer which is straddling both the standalone health vertical as well as the life insurance vertical.

Of this this year. So those are the things that we are navigating. But at no point in time, uh, we are changing our guidance, uh, to 2026, as well as, uh, our, our belief in the 2027 Financial objectives. I'm going to stop. There, I'll go to the India, question to Navin and then when, if you can pick up the RS, 1, okay. Uh, thanks Anil. Uh, hi Faruk. So, as Anil already mentioned farukh, that India is a strategic pivot for us, in terms of how we approach the market.

And, subject to regulatory approval of our life insurance transaction.

Speaker #5: And we also have this unique position that we'll be partnering with two exceptional corporate groups. At CL on the health insurance side and Bharti on the life insurance side.

We will have this very unique position in India of being the multinational insurer which is straddling both the standalone health vertical as well as the life insurance vertical.

Speaker #5: And we believe these two platforms in partnerships with these excellent corporate groups will give us a significant opportunity to take a crack at the very large unmet protection gap on both mortality and morbidity side.

This unique position will be partnering with two exceptional corporate groups.

SEAL on the health insurance side and Bharti on the life insurance side. And we believe these two platforms, in partnerships with these excellent corporate groups,

Speaker #5: So, that's the long-term thesis. Our priority in the next three to five years is really to build out a high-quality profitable business. That's really what our aim is.

will give us a significant opportunity to take a crack at the very large.

Unmet protection gap on both mortality and morbidity sides. So that's the—

That's a long-term thesis.

Speaker #5: And the elements of that are that we believe that there are significant customer segments who have unmet needs. And interestingly, they range from the missing middle in the health to the high net worth on the life side to the cross-border opportunity on health as well.

Our priority in the next three to five years is really to build out, uh, high quality.

Profitable business—that's really what our aim is, and the elements of that are:

Speaker #5: So, we will be very selective but very sharp about the opportunities that we look to target from these two platforms. Second, the big opportunity remains that we have an opportunity to build out agency in a quality manner, learning from what we have done in some of our other markets.

We believe that there are significant customer segments who have unmet needs, and interestingly, they range from the missing middle on the health side, to the high-net-worth segment on the life side, to the cross-border opportunity on health as well. So,

We will be very selective, but very sharp, about the opportunities that we look to target from these two platforms.

Speaker #5: And focusing it on health and protection. The Indian market particularly on the life side today remains very heavily savings and ILP focused. And we will be looking to have a differentiated play there.

Second, the big opportunity remains that we have an opportunity to build out agency in a quality manner, learning from what we have done in some of our other markets.

Speaker #5: Third, Bharti in particular, Bharti Life already has a bunch of bank assurance partnerships. With some of the best banks in the country. And we'll be looking to scale that up in addition to leveraging the partnership that we have with Standard Chartered on both the life and the health franchise.

And focusing it on health and protection. The Indian market, particularly on the life side today, remains very heavily savings and ILP-focused, and we will be looking to have a differentiated play there.

Third, BARTI. In particular, BARTI Life already has a bunch of bancassurance partnerships.

Speaker #5: And last, I think within both HCL and Bharti, we have some very interesting opportunities in their ecosystem, in both of these corporate groups. As an example, Bharti has 450 million customers out of which 50 million are postpaid and high-value customers.

With some of the best banks in the country, and we'll be looking to scale that up, in addition to leveraging the partnership that we have with Standard Chartered on both the life and the health franchise.

And last, I think within, more HCL and Bharti, we have some very interesting opportunities in their ecosystem. In both of these corporate groups,

as an example, barti has

Speaker #5: India is a highly digital market. We'll be looking to innovate and invest in D2C, digital AI to see how we take a crack at this opportunity and look to convert a reasonable fraction of these customers to our protection products both on the life and health side.

450 million customers, out of which 50 million.

...are postpaid and high-value customers.

India is a highly digital market. We'll be looking to innovate and invest in D2C, digital, and AI.

Speaker #5: And I think the last point I will make on India is that it's a very large geography. We will be focused on about in the next five years to your question in about 100, 120 cities.

To see how we take a crack at this opportunity and look to convert a reasonable fraction of these customers through our protection products, both on the life and health side.

Speaker #5: We have a very disciplined geography strategy in terms of accessing revenue pools, but also balancing it with claims experience and profitability that we see and how we think about thoughtful build-out of these channels.

And I think the last point I will make on India is that it's a very large geography. We will be focused on about, in the next five years, to your question, in about 100 to 120 cities.

Speaker #5: Long story short, I think in the next five to 10 years, you should expect India to be a material franchise for us on multiple metrics.

We have a very disciplined geography strategy in terms of accessing revenue pools, but also balancing it with claims experience and profitability that we see.

And how we think about the thoughtful build-out of these channels,

Speaker #5: But in the next five years, we are looking to just build out elements of the business that I outlined. Thank you.

Speaker #4: Thanks, Naveen. Ben.

Speaker #3: Yeah. Hi, Farooq. Thanks for your question. So, maybe it's best to refer to slide 34 in my pack and just walking up that table.

Long story short, I think in the next five to ten years, you should expect India to be a material franchise for us on multiple metrics. But in the next five years, we are looking to just build out elements of the business that I outlined. Thank you. Thanks.

Speaker #3: Obviously, we were very pleased with the 17% growth in OPAC per share. Which meant underlying OPAC growth of 13. The non-controlling to Malaysia, of course, and that gave us a growth rate benefit.

Yeah, hi Farooq. Um thanks for your question. So, so maybe, maybe it's best to refer to uh, slide 34 in in my pack and, you know, just walking up that table. Obviously we were very pleased uh with the 17% growth in in opat for share.

Speaker #3: All of which got us to 9 points of sort of operating profit before tax growth. Within that, and I've sort of guided before, we'll keep continue to keep central costs tightly controlled.

Um, which meant underlying OPAC growth of 13—you know, the non-controlling interests reduction was related to Malaysia, of course—and that gave us a growth rate, uh, benefits, all of which got us to 9 points of, of sort of operating profit before tax growth.

Speaker #3: My restructuring cost guidance of coming in for the full year at just under 100 million remains. Moving up to the total segment result, the key part of which or the largest part of which is, of course, insurance, we were very pleased with strong growth in the release from the CSM.

You know within that uh and and I've sort of guided before we we'll keep continue to keep Central costs, uh tightly controlled. Uh my restructuring cost guidance of of coming in for the full year at just under 100 million uh remains

Speaker #3: That was somewhat curtailed by a lower net investment result that I previously guided to. And that was driven by two things. One, asset de-risking in China and two, lower surplus in our life businesses as a result of high remittances.

Moving up to the, uh, the total segment result, uh, the key part of which, or the largest part of which is, of course, Insurance. Uh, we were very pleased, um, with strong growth in the release from the CSM.

um,

You know that was somewhat curtailed by a lower net investment result than I previously guided to, and that was driven by two things. One, asset de-risking in China.

Speaker #3: That effect will start to normalize somewhat on the growth rate as we progress through this year. And I'd expect a net investment result that's a couple of points higher.

Uh, and two lower surpluses in our life businesses as a result of higher remittances.

Speaker #3: Finally, then, there's the progress we're making on variances. And as we accelerate into 2027, the benefits from that plus lower investment in capabilities will come through the earnings results.

That affect will start to normalize somewhat on the growth rate as we progress through this year, and I'd expect a net investment result, but a couple of points higher.

Speaker #3: So, I think given stepping back, given the strong structural growth in the CSM, since inception of IFRS 17 to now, and now I think our CSM is about 30% higher than it was then, and what I've just mentioned on improving underlying variances, I'm very confident in the double-digit EPS growth outlook for the group on an IFRS basis.

Uh, we’ll come through, uh, the earnings results. So,

You know, I think, stepping back, given the strong structural growth in the CSM—uh,

Speaker #4: Okay. Thanks, Ben. Alex, I want to be respectful of people's time. We've got a shortly closed down. We've got three more questions that we're going to take.

Since, you know, since Inception of IFRS 17 to now and, you know, now I think our csm's about 30% higher than it was then. Uh, and, and what I just mentioned on on improving underlying variances, uh, I'm very confident in the, the double digit EPS growth outlook for the group, uh, on an ISS basis.

Speaker #4: Can we have a bit of rapid-fire questioning, and we'll do the rapid-fire answering? Next one, please, Alex.

Speaker #2: Thank you. Our next caller is William Hawkins from KBW. Your line is now unmuted. Please go ahead.

Speaker #3: Thanks, Patrick, for prejudicing me. First question, please. Just trying to I am still trying to understand the outlook for new business growth. I'm sorry about that.

Okay. Uh thanks been um, thank you, Alex. I want to be respectful of people's time. We've got a got a short, short short, short shortly closed down. We've got 3, more questions that we're going to take. Can we have a bit of uh uh Rapidfire questioning and we'll do the rapid fire answering? Uh next 1, please, Alex. Thank you. Our next caller is William Hawkins from KBW your line is now on muted. Please go ahead.

Speaker #3: But could you just pause again on the growth markets? And in the second half, should they be accelerating from the 10% that you've achieved in the first half because of the good stuff like Thailand and Vietnam that you're referring to?

Speaker #3: Or is there still a risk that they're decelerating? Because there's other big moving parts like Taiwan. So I'm sorry, that's quite a significant division, and I'm still not quite clear about the different moving parts in that.

Speaker #3: And I would have thought longer term, the growth markets should be blowing through your double-digit target, not kind of just making up with the double-digit target.

Thanks, Patrick, for prejudicing me. Um, uh, first question, please, just trying to—um, I am still trying to understand the outlook for new business growth. I'm sorry about that. But could you just pause again on the growth markets and in the second half? Should they be accelerating from the 10% that you've achieved in the first half because of the good stuff, like Thailand and Vietnam that you're referring to? Or is there still a risk that they're decelerating because there are other big moving parts, like Taiwan? So, I'm sorry, that's quite a significant division and I'm still not quite clear about the difference.

Speaker #3: So I'm just trying to get comfortable on that short-term and long-term, please. And then secondly, and I'll just keep it at two questions. Again, you've already talked convincingly about productivity and the MDRT and the agency channel.

Speaker #3: I'm still slightly disappointed that there was a decline in the total number of active agents down to the 55,000. I'd thought that with Malaysia stabilizing we'd be back into kind of growth in that number.

Speaker #3: So I appreciate those improvements in quality. I'm still slightly uncertain about the quantity. So from your point of view, do you just not care because that's a very bad metric so long as you've got the other metrics working?

Speaker #3: Or at some point, should the active agents be returning to growth? And if so, can you give me a thought process about the timeline for that, please?

Speaker #3: Thank you.

Speaker #4: Thanks. Thanks, William. So, on your question on growth markets, we believe that we have a range of markets in the in that segment that will continue to perform quite well as we look to the second half.

From moving Parts in that and I would have thought longer term, you know, the growth markets should be blowing through your double digit targets. Not kind of just making up with the double digit Target. So I'm just trying to get comfortable on that short term and long term, please. Um, and then, secondly, and I'll just keep it at 2 questions. Um, again, you've already taught convincingly about productivity and the mdrt in the agency Channel. Um, I'm still slightly, you know, disappointed that there was a decline in the total number of active agents down to the 55,000. Um, you know, I thought that with Malaysia stabilizing would be back into kind of growth in that number. Um, so I appreciate those improvements in quality. Um, I'm still slightly uncertain about the quantity. So from your point of view, do you just not care because that's a very bad metric. So long as you've got the other metrics working or at some point, should the active agents, be returning to growth and and if so, can you give me a thought process about the timeline for that, please, thank you.

Thanks. Thanks, Vivian. So, on your question about growth markets—

Speaker #4: So you could expect a double-digit to probably a mid-teens growth in the new business profit growth for these markets. Because as you rightly pointed out, there are significant markets like Taiwan, Thailand has done exceptionally well for us.

We believe that we have a range of markets in the in that segment that will continue to perform, uh, quite well, as we look to, uh, the second half. So you could expect, uh, uh, uh, uh, double digit to probably a mid teens growth, uh, in the new business profit growth uh, for these markets because as you rightly pointed out, there are significant Market,

Speaker #4: Africa continues to kind of grow very well. So you could expect as I said, double-digit to mid-teens growth as we go through the second half.

Speaker #4: On the whole agency piece, before I can hand it over to Naveen, the focus on quality is been quite deliberate. And we are pressing two levers William.

It's like, uh, Taiwan, uh, Thailand has done exceptionally well for us. Uh, Africa continues to kind of grow very well. Uh, so you could expect, as I said, double-digit to mid-teens growth as we go through, uh, the second half on...

Um, before I can, I’ll hand it over to Naveen.

Speaker #4: One is, as you've said, quality recruitment, driving active agents. And we've kind of launched a number of initiatives in that regard. To be able to kind of press forward, not only in developed, but also in emerging Asia and markets.

On quality, it’s been quite deliberate, and we are pressing two levers, William. One is, as you’ve said, you know, quality recruitment driving active agents.

Uh, and we've kind of

Speaker #4: And the second is productivity. And you've seen year after year we have shown measurable improvements on productivity. Firstly, because we are getting from a demand side, we're getting demand for high-quality advice.

Speaker #4: But on the second front, we are also uptierring our propositions to emerging affluent as well as to affluent customers. I'm going to stop there.

Speaker #4: I'm going to have Naveen provide you a little bit of additional color on productivity versus active agents.

Speaker #5: Thanks, Anil. Under instruction from Patrick, I'll keep the answer rapid-fire and focused. I think just coming to your specific question on actives, I just want to partition the problems.

Speaker #5: Firstly, on the developed markets, as you have seen from 23 to 25, we've grown our actives by 15% per annum, more than 15% per annum.

Launched a number of initiatives in that regard uh to be able to kind of press forward. Not only in developed, but also in emerging Asian markets and the second is productivity and you've seen year after year. We have shown measurable improvements on productivity firstly, because we are getting a on the from a demand side. We are getting uh, demand for high quality advice, but on the second, uh, front, we are also appearing our propositions to emerging affluent as well as to affluent customers. I'm going to stop there. I'm going to have Navin provide you a little bit of additional color on productivity versus active agents. Thanks anel uh under instruction from Patrick. I'll keep the answer rapid fire and focused. I think just coming to your special

Specific question on active. I just want to partition the problem.

Firstly.

Speaker #5: H1 this year, developed markets, Hong Kong, Singapore, actives are stable because of high competitors. And particular circumstances which we have talked of. So our problem in terms of decline of actives historically has been emerging ASEAN.

On the developed markets, as you have seen from '23 to '25, we've grown our active by more than 15% per annum.

Speaker #5: I just wanted to partition the problem and focus it on emerging ASEAN. Within emerging ASEAN, if you look at our three biggest markets, Malaysia, Indonesia, Philippines, Malaysia, as I mentioned, has grown actives at 10%.

H1 this year, developed markets, Hong Kong, Singapore. Activity is stable because of high comparators and particular circumstances which we have talked about.

No, effective historically has been emerging RC, and I just wanted to partition the problem and focus it on emerging last year.

Speaker #5: Malaysia Life has grown actives at 10% in H1 this year. And coming to Indonesia and Philippines, where our agency transformation remains very much in flight, we will look to improve actives.

Within emerging RCN, if you look at our three biggest markets—Malaysia, Indonesia, and the Philippines—

Malaysia, as I mentioned, has grown active at 10%. Malaysia Life has grown active at 10% in H1 this year.

And coming to Indonesia.

Speaker #5: There is no doubt about that. It is not a metric we don't care about, just to be super clear about that. But what we clear all what we care also about is the quality of these actives.

Philippines where our agent.

Speaker #5: And I take you back to the point that we made on the pro-venture recruits, right? If they are 6x the productivity of normal recruits, every one of those actives is six times a normal actually pivoting away from this model of mass recruitment, part-time agency, in Indonesia, Philippines, and Malaysia, to quality recruitment, full-time agency.

Transformation remains very much in flight. We will look to improve active—there is no doubt about that. It is not a metric we care about, just to be super clear about that.

But what we care about, also, is the quality of these activities.

Speaker #5: And therefore, our actives will grow, but more importantly, the quality of those actives will also grow as we move forward. Thank you.

Speaker #1: Great. Thank you.

Speaker #3: Thank you very much.

Speaker #1: Okay. Let's go to the next one, Alex. Time runs on.

And I take you back to the point that we made on the Proof Venture recruits, right? If they are 6x the productivity of normal recruits, every one of those activities is six times a normal activity, right? And we are actually pivoting away from this model of mass recruitment for part-time agency in Indonesia, Philippines, and Malaysia to quality recruitment for full-time agency, and therefore, our activities will grow. But more importantly, the quality of those actors will also grow as we move forward. Thank you.

Speaker #3: Thank you. Our next caller is Abid Hussein from Panma Liberum. Your line is now unmuted. Please go ahead.

Great, thank you. Thank you very much. Okay, let's go to the next one. Alex, time runs on.

Speaker #1: Oh, hello. Hi there. Thanks for taking my question. I'll try to be quick. So the first one is on the tax enforcement and the sort of the noise around that.

Thank you. Uh, next caller is Abbott Hussein from Panama Liberum. Your line is now unmuted. Please go ahead.

Speaker #1: Just wondering if you can share what proportion of the enforced business earnings or EV comes from the MCV par savings or other investment businesses.

Speaker #1: Are there investment business that might be exposed to that tax enforcement? And whether you've seen any lapse behavior changes in the recent weeks? That's the first one.

Speaker #1: And then the second one is just following on from the previous question on the agency. So obviously, the decline in the agency, the total 55K number, the decline is slowing.

Speaker #1: But just are you trying to build a particular number that you're trying to get to on the 55K? It seems like you're pivoting away.

Speaker #1: So it might mean that we should see further declines. I just want to get my head around that bit. And it's very, very quickly.

Speaker #1: Final question on eSpring. It looks like there's a sort of two bips revenue margin decline and the cost-income ratio is going up. Just wondering what's driving that and where should we expect that to end up?

Speaker #1: Thank you.

Speaker #4: Hi, Abid. So let me first answer the agency question, and I'll go to the tax enforcement and the enforce point, Ben, and then Rajiv can pick up your cost-to-income ratio point.

Oh hello. Hi there. Thanks for taking my question. I'll try to be quick. Uh, so the first 1 is on the the tax enforcement and the the sort of the noise around that just wondering if you can share What proportion of the enforced business earnings or EV comes from the MTV par savings or other investment businesses, other investment business, that that might be exposed to that tax enforcement. Uh, and whether you've seen any uh, lapse Behavior changes in in the recent weeks, uh that's the first 1 and then the the second 1 is just following on from the previous question on the agency. So obviously the decline in the agency the total 555 number the decline is slowing but just are you trying to build a particular number that you're trying to get to on the 55 case? It seems like your pivoting away so so it might mean that we should see further declines. I just want to get my head around that bit and it's very very quickly. Final question on e-ring, it looks like there's a sort of 2 bits of Revenue, margin Decline and the cost income. Ratios. Go on up, just wondering what what's driving that and where should we?

Expect that to end up. Thank you.

Speaker #4: So on the agency, as we have said many a times, we are pressing both levers. We are pressing the productivity lever as well as the quality recruitment, leading up to the active agents.

Speaker #4: We would like to see the active agents start to grow. There's no question about it. And Naveen articulated some of the measures that we are enforcing specifically in the emerging ASEAN markets, moving away from a mass recruitment model to a more high-quality model.

Um, hi Aid. Um, so let me first, um, um, answer the agency question, I'll go to, uh, the tax enforcement and the enforce point to ban and then uh, Rajiv can pick up your cost to income ratio Point. Um, so on the agency, as as as we've said, many a times, we are pressing both levers, we're pressing the non the productivity, uh, uh, level as well as the quality recruitment. Leading up to uh, the the, the active agents. Uh, we would like to see the active agents. Start to grow. There's no question about it. And

Speaker #4: The reason we are doing that, as I said, is on two cups. One is the customers are demanding higher quality of advice. And the second is that we are pushing our propositions to more affluent and high-net-worth customers.

Speaker #4: So absolutely, we would like to grow the active agent base, but in tide and in sync, with the productivity improvements over a period of time.

Navin articulated some of the measures that we are enforcing, specifically in the emerging Asia markets, moving away from a mass recruitment model to a more high-quality model. The reason we are doing that, as I said, is on two counts: one is the customers are demanding higher quality of advice, and the second is that we are pushing our propositions to more affluent and high net worth customers.

Speaker #4: I'm going to go to Ben for enforce and then Rajiv, if you can pick it up on the cost-to-income ratio on ESI.

So, absolutely, we would like to grow the active agent base, but in tandem and in sync with the productivity improvements over a period of time.

I'm going to go to.

Speaker #1: Yeah. Hi, Abid. Thanks for the question. So in terms of our Hong Kong business, about half of the VIF relates to China, mainland, visitors.

Ben, if you can address enforce, and then Rajiv, if you can pick it up on the cost-to-income ratio on ESI. Yeah, hi Vid. Thanks for the question. So,

Speaker #1: Of that, 55% is health and protection products, actually. To give you a sense, actually, of the remaining saving proportion, our savings products naturally have protection features embedded within them.

In terms of our Hong Kong business, about half of this relates to China mainland visitors.

Um, of that.

Speaker #1: So they're not pure savings or wealth products. No impact to lapses, persistency, retention ratios, phenomenally strong. And the majority of the payments, 95% plus, for these products come from funds already made here in Hong Kong.

55% is health and protection product, actually, um, to give you a sense actually of the remaining saving proportion, you know, our savings products naturally have protection features embedded within them so, so, so they're not pure savings or or wealth products.

Um, no impact to lapses. Persistency and retention ratios were phenomenally strong. And, you know, the majority of the...

Speaker #1: So it's high quality sticky business. People aren't buying these products for some sort of tax reason.

Speaker #4: Rajiv, you want to pick up the up. Thanks. Thanks, Neil. Yeah, absolutely. Look, we had a very strong set of results in the first half, as you can see.

Products for some sort of tax reason.

Speaker #4: In the deck, strong inflows, as well as very strong investment performance across our capabilities. The cost-income ratio decline is largely due to the IPAMC sell-down mechanics.

Speaker #4: And that's really what's driven the cost-income ratio to increase. But overall, our business makes has been very positive. Fee-income ratios remain strong. And we're very pleased with the first half results.

Speaker #1: Okay. Thank you, Rajiv.

Speaker #3: Thank you.

Speaker #1: And last one, Alex, and then we will draw a close.

Uh radi we want to pick up the yeah sure thanks. Thanks now. Yes, absolutely. But we had a very strong set of results in the first half as you can see uh in the deck, um, strong inflows uh as well as very strong investment performance across our capabilities. The cost income ratio, decline is largely due to the ipmc sell down, uh, mechanics. And that's really what's Driven, the cost income ratio to increase, but overall, uh, our business mix has been very positive, uh, fee income, ratios remain strong, uh and we're very pleased with the first half results.

Speaker #3: Thank you. Yes, then our final caller is Thomas Wang from Goldman Sachs. Your line is now unmuted. Please go ahead.

Thank you. Uh, Ray, and, uh, last—last one, Alex. And then we will draw to a close.

Speaker #5: thank you. Thank you for giving me this opportunity to ask the last couple of questions. Maybe firstly, if I go back to mainland China, just to clarify, in the announcement, something you said, the full year '26, MBP will be similar to full year '25.

Thank you. Yes. Then our final caller is Thomas Wong from Goldman Sachs. Your line is now unmuted. Please go ahead.

Speaker #5: So that's on the CER basis, right? So which would roughly imply second half will be somewhere around 10% growth. Is that the right interpretation there?

Ah, thank you. Uh, thank you for for coming in this opportunity to ask the last couple questions. Um, um, maybe uh, firstly, if I go back to Mainland, China, just to clarify when when when in the announcement of having you said the full year, 26 MBP will be similar to 4 year 25 so that's on the C.

Speaker #4: Short answer is.

Uh, basis, right? So, which would roughly imply the second half will be somewhere around 10% growth.

Speaker #5: I understand.

Um, is that— is that the right interpretation there?

Speaker #4: Sorry, you had one more question. Go ahead. Go ahead, please.

Speaker #5: Yeah. Yeah, sorry. And the second question is just on the Hong Kong margin. So very, very good to see that the margin expansion in the first half.

Short answer is: and then, the start, and this is...

So, you had one more question. Go ahead. Go ahead, please.

Speaker #5: Just wondered whether if you can give me a little bit of color on what's driving that expense savings if it's because I don't think if it's product mix, so what type of product or is it just a premium term have lengthened?

Speaker #5: Just a little bit color on that would be great. Thanks.

Speaker #4: Thanks, Thomas. So on the China question, I guess the short answer is it is on CER basis. When we speak to the guidance for the full year, which is similar range as compared to what we witnessed in a full year 2025.

Yeah, yeah. Sorry. And the second question is just on Hong Kong margin. So, very, very good to see the margin expansion in the first half. Just wanted to see whether you can give a little bit of color on what's driving that expense savings. Um, if you could—because I don't think it's product mix or the type of product, or is it? Was it just a premium term? Can you give just a little bit more color on that? That would be great. Thanks.

Speaker #4: So you're right there. On HK margins, I'm going to go to Ben to provide you some additional color in terms of what's driving that.

Speaker #1: Yeah. Hi, Thomas. Two things, really, on the margin side. One is improved mix. We've done well on the HMP side of things in Hong Kong.

Speaker #1: Both with mainland China visitors and the domestic segment, actually. So that's given our margins a boost. On a number of policies basis, actually, we're 57, 58% of our product is HMP.

Uh, thanks Thomas. So on the China. Um, question, I get the short answer is it is on C basis. When we, uh, speak to, uh, the guidance, for the full year, uh, which is, uh, similar range as compared to what we witnessed in a full year 2025. Uh, so you're right there on HK margins. I'm going to go to been to provide you some additional color in terms of what's driving that? Yeah, hi Thomas, uh, 2 things really on the margin side. Uh, 1 is uh, improved mix. Uh, we've done well, uh, on the h&p side of things in in Hong Kong, uh, both with mainland China, visitors, and the domestic segment actually. So that's given our margins, a boost,

Speaker #1: So we're pleased with that. There was also a little bit of a shift in mix in terms of some of our savings and protection products.

Um, on a number of policies basis, actually, about 57 to 58% of our product is HMP. So we're pleased with that.

Speaker #1: As a result of repricing, that gave us an additional boost pleased with the margin uplift.

Speaker #4: Okay. Thanks, Ben and Neil. So I'm going to pass back to Anil to quickly close off the call. Thank you for listening in. He's got some closing remarks.

um, uh, there was also a little bit uh, of a shift in mix uh, in terms of some of our savings and protection products, uh, as a result of repricing, that that, that gave us an additional boost their

Uh, so we're pleased with the margin uplift.

Speaker #2: Thanks, Patrick. And thanks, everyone, for those questions. We are going to be on the road very shortly. So we would be getting an opportunity to further this conversation face to face as well.

Okay, thanks, Ben. And uh, so I'm going to pass back to Anal to quickly close off the call. Thank you for listening in. He's got some closing remarks.

Thanks m.

Speaker #2: But I do want to call out the tremendous dedication and the hard work of our people who have been driving the transformation now for almost four years.

Speaker #2: And you can start to see some of the fruits of labor kind of coming through in our set of results. I also wanted to take the opportunity to welcome Sir Douglas Flint, who's our new chair and has recently chaired his first board meeting.

Speaker #2: I, along with the management team, are looking forward to working with Sir Douglas and the rest of the board as we continue to deliver on our financial objectives.

Speaker #2: Thank you very much. And we will be staying in touch as we get on the road. And hopefully, we get an opportunity to see you in person.

Speaker #2: Thank you.

Speaker #1: Thank you, Alex. You can close the call now.

Everyone. Uh, for this question, we're going to be on the road very shortly, so we would be getting an opportunity to further this conversation, uh, uh, face to face as well. But I do want to call out the tremendous dedication and the hard work of our people, uh, who have been driving the transformation now, for almost 4 years. And you can start to see, uh, some of the fruits of Labor that have coming through in our, uh, set of results. I also wanted to take the opportunity to welcome sir, Douglas Flint, who's our new chair and has recently, chaired his first board meeting. Um, I along with the management team. Uh, are looking forward to working with Sir, Douglas and the rest of the board as we continue to deliver on our financial objectives. Uh, thank you very much and we will be staying in touch uh as we get on the road and hopefully you get an opportunity

Opportunity to see you in person. Thank you.

Thank you, Alex. You can close the call now.

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

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