PRUDENTIAL PLC (PRU) SHARES: 2025 PERFORMANCE IN UK, KEY DRIVERS, MILESTONES AND RISKS —'26 OUTLOOK

How did Prudential shares perform in 2025?

Prudential plc (LSE: PRU), the multinational insurance and financial services company with a strong focus on Asia and Africa, delivered a notably resilient performance in 2025 amid a complex macroeconomic and geopolitical environment. Based in the United Kingdom but generating the bulk of its earnings from growth markets abroad, the company’s shares continued to reflect confidence in its long-term strategy and positioning.

In 2025, Prudential’s share price experienced a moderate upward trend, increasing by approximately 12% year-over-year, ending the year at £10.45. The appreciation came despite sluggish growth in global equity markets and persistent volatility in emerging economies. Investor sentiment was supported by the company's stable earnings, strong capital position, and continued execution of its post-demerger growth strategy focused on Asia and Africa.

Key financial metrics reported in the company’s full-year earnings highlighted the foundation of this performance:

• Operating profit: Increased by 9% year-on-year to $3.5 billion (GBP equivalent) driven by robust demand for insurance and savings products in Asia, particularly in Hong Kong and Mainland China.
• New business profit (NBP): Rose by 11%, with strong contributions from health and protection offerings.
• Embedded value (EV): Grew by 8%, underlining the long-term profitability potential of Prudential’s book.
• Solvency II capital ratio: Remained stable above 200%, reflecting prudent risk management and capital allocation.

The company also accelerated the rollout of digital tools and customer-facing technologies in 2025, aligning with consumer preferences in its Asian markets. Alongside strategic partnerships and joint ventures, particularly in India and Vietnam, Prudential enhanced distribution reach and operational efficiency.

Investor perception was shaped not only by business fundamentals but also by an increasingly clearer corporate structure post the US (Jackson) and UK (M&G) spin-offs. This allowed greater focus on the growth dynamics of Asia and Africa, where Prudential believes a growing middle class and underpenetrated life insurance market offer long-term tailwinds.

Despite macroeconomic pressures such as interest rate volatility and concerns over the Chinese economic slowdown, Prudential prudently navigated regulatory changes and currency headwinds, positioning itself as a relatively defensive player among FTSE 100 constituents.

The performance of PRU shares in 2025 highlighted investors’ growing confidence in its Asia-driven model and management’s ability to execute on multi-market strategies with efficiency and discipline.

Key drivers and milestones in 2025

Multiple structural and operational factors emerged as key drivers of Prudential plc’s share performance in 2025. These developments, spanning strategic initiatives, geographic expansion, and regulatory clarity, collectively sustained investor momentum throughout the year.

1. Ongoing success in Asia and Africa

Prudential’s strategic emphasis on its Asian and African franchise bore fruit in 2025. The company recorded double-digit growth in new business premiums across several core markets, including:

• Hong Kong: Strong post-COVID travel resumption from Mainland China drove higher demand for cross-border insurance products.
• Indonesia and Philippines: Digital distribution channels captured greater market share among younger, underinsured demographics.
• Nigeria and Kenya: Expansion of micro-insurance and health plans strengthened Prudential’s footprint in Sub-Saharan Africa.

These gains were underpinned by the group’s ability to enhance multi-channel distribution, leverage bancassurance partnerships, and invest in AI-driven customer engagement tools.

2. Reinvestment and shareholder capital returns

The company pursued a disciplined capital allocation strategy in 2025. The management balanced reinvestment into core growth regions with capital returns to shareholders. Key actions included:

• Cash remittances: Dividends from operating entities reached $1.4 billion, enabling continued distributions despite capital investments.
• Dividend policy: Maintained a progressive dividend, declaring an 8% increase compared to 2024.
• Buyback programme: A modest share buyback of £300 million was executed, signalling confidence in future cash flows.

These elements reassured investors of the company’s capital strength and capacity to support both growth and shareholder returns over the medium term.

3. Digital transformation and operational efficiency

Prudential made strides in digitising its insurance model in 2025. AI tools were increasingly embedded in underwriting and claims processing, while mobile-first platforms enhanced customer service and engagement across its markets. Productivity initiatives led to an expense ratio reduction of 2 percentage points, boosting overall efficiency.

Management credited their cloud-based infrastructure rollout for enabling real-time analytics, faster product development, and improved regulatory compliance across markets with divergent oversight standards.

4. Key strategic deals and partnerships

Several alliances and transactions in 2025 helped solidify Prudential’s reach and influence:

• A partnership between Prudential and Tata Digital in India to enhance embedded insurance.
• Entry into the health technology sector through a joint venture in Vietnam, focusing on preventative care plans.
• Acquisition of a minority stake in an insurtech startup in Singapore to accelerate digital distribution.

These moves aligned with Prudential’s “growth and innovation” roadmap, aimed at staying ahead in an increasingly digital insurance landscape.

Together, these milestones not only drove earnings and share price appreciation but also reinforced long-term structural growth narratives seen by analysts and institutional investors.

2026 outlook: trends and risks

Looking into 2026, Prudential plc faces both encouraging prospects and material risks that could determine the trajectory of its share price. While its strategic positioning remains intact, external macro factors, regulatory dynamics, and execution risk must be monitored closely.

1. Emerging market exposure risk

Prudential’s reliance on emerging markets continues to be both its strength and vulnerability. Investors should be mindful of potential headwinds in 2026, such as:

• China: Regulatory unpredictability and slower recovery in consumer confidence could constrain insurance sales.
• India and Southeast Asia: Rising inflation and interest rates could impact affordability of savings products.
• Currency volatility: With earnings reported in USD, adverse movements in local currencies may affect reported profits.

A diversified footprint across 20+ emerging markets may absorb shocks in individual economies, but systemic issues or geopolitical tensions could weigh on sentiment.

2. Regulatory and compliance landscape

Prudential will need to navigate increasingly stringent regulatory environments across its operating jurisdictions. Areas to watch include:

• The final implementation of IFRS 17 reporting standards and potential impact on earnings visibility.
• Introduction of new solvency and capital rules in Southeast Asia that may affect available capital for dividends and growth.
• Policy changes in Hong Kong and Mainland China regarding foreign insurers’ product offerings and commissions.

Timely adaptation to these changes and proactive engagement with regulators will be key in mitigating potential disruptions.

3. Technological disruption and cyber risk

While Prudential has advanced on its digital journey, cyber security and rising consumer expectations pose latent challenges. Key considerations include:

• Investments in cybersecurity and data privacy measures as digital penetration grows.
• Competition from disruptive insurtech firms offering AI-driven products.
• Demands from younger consumers for real-time servicing and personalisation, requiring continuous innovation.

A failure to keep pace with competitors or a major data breach could significantly affect brand trust and share price.

4. Strategic priorities for 2026

To sustain momentum in 2026, Prudential’s management outlined several focus areas:

• Broadening health protection and retirement offerings, particularly in ageing Asian demographics.
• Scaling digital bancassurance partnerships with major regional financial institutions.
• Expanding climate-linked savings and ESG-compliant products in Africa and Southeast Asia.
• Enhancing capital efficiency and optimising internal reinsurance structures.

Analysts forecast that if macro conditions remain stable, Prudential could achieve high single-digit growth in new business profit and low double-digit shareholder returns in 2026.

Investors are advised to monitor quarterly performance closely, especially in volatile markets such as China and India, and to review evolving risk disclosures from the company as it adapts to the changing global landscape.

Overall, while caution remains warranted, 2026 could be another year of steady progress for Prudential if the company continues to execute with discipline and innovation.