Tighter rules on bancassurance expenses in the Chinese Mainland cut into Prudential plc’s third-quarter results. Its bancassurance new business profit outside the mainland, however, rose more than 20% in the quarter.
The insurer now forecasts FY26 new business profit (NBP) from its Chinese Mainland joint venture, CITIC Prudential Life, at 10% to 15% below 2025. It also said group 2026 growth guidance is “more stretching” than expected at its half-year results.
In August, Prudential expected 2026 mainland NBP to be similar to 2025. Its 50% share of the venture’s first-half NBP was US$159 million, about 11.5% of the group’s US$1,384 million. Mainland APE sales rose 21% in the first half, while NBP fell 4% at constant exchange rates.
CITIC Prudential Life’s NBP fell significantly in Q3 after the new expense regulations constrained bancassurance volumes. A high July–August 2025 comparator deepened the decline.
The joint venture’s margin exceeded 40% in Q3 and was 35% year to date.
China’s expense rules on bancassurance commissions took effect in July, and enforcement has cut commission rates in both bank and agency channels, according to Chambers and Partners. Fitch Ratings expects the rules to keep premium growth subdued through year end, after 3.6% growth in the first half.
Read more: China's life insurers face slower growth as Beijing tightens rules
AIA Group reported similar pressure, according to Reuters. Its mainland value of new business fell 33% in Q3 against a high base, when customers brought purchases forward ahead of industry-wide repricing in September 2025. New business value from its bancassurance segment there also declined by double digits.
Mainland APE sales grew strongly in September and October. Prudential expects Q4 growth unless unforeseen events intervene, though the recovery will be slower than anticipated.
Excluding the mainland, Prudential’s NBP grew 13% in Q3 and 11% year to date. Hong Kong wealth demand and new product launches in Thailand led that bancassurance gain.
Group bancassurance NBP rose 10% year to date, against 2% for agency. “We continue to enhance agent productivity through the roll out of enhanced digital tools, product propositions and quality recruitment programmes,” CEO Anil Wadhwani said.
In Hong Kong, Sun Life Hong Kong’s broker channel new business APE rose 34% to HK$5.031 billion in H1 2026, making it the insurer’s largest channel.
Read more: Hong Kong broker channel dominates as wealth planning gaps grow
Group new business profit rose 1% at constant exchange rates to US$709 million in Q3, from US$702 million. At actual rates it also rose 1%, from US$705 million.
APE sales fell 6% to US$1,596 million from US$1,698 million, or 7% from US$1,716 million at actual rates. The NBP margin rose to 44% from 41%.
Over nine months, NBP rose 6% to US$2,093 million from US$1,981 million, or 7% from US$1,964 million at actual rates. APE sales of US$5,026 million were flat against US$5,038 million, or US$5,002 million at actual rates.
The margin rose 3 percentage points to 42%, which Prudential attributed to repricing and a focus on quality.
In Hong Kong, repricing and domestic bancassurance demand produced double-digit NBP growth in Q3 despite lower volumes. Some mainland visitor sales converted more slowly, and Prudential is monitoring their buying intentions. It expects double-digit growth in Hong Kong for the full year.
Mainland visitors generated HK$62.8 billion in Hong Kong new business premiums in 2024, or 28.6% of new individual office premiums, according to the Insurance Authority. The regulator has since paused publishing separate mainland visitor figures while it reviews how it collects data on non-local policyholders.
Scrutiny of that business rose in August, when reports said mainland tax authorities had begun collecting personal income tax on payouts from offshore insurance policies. Prudential’s London-listed shares fell more than 10% on August 5, and HSBC fell 5.5%.
Read more: Prudential shares plunge as China closes tax loophole
Malaysia posted double-digit NBP growth on health and protection sales to mass-affluent customers, though growth slowed from a very strong first half. Indonesia’s Q3 NBP was marginally below last year after weak agency sales in July and August.
Prudential is monitoring customer sentiment in Indonesia after MSCI said on October 15 it was consulting on reclassifying its Indonesia Indexes from “Emerging Market” to “Standalone Market.”
Singapore NBP dipped slightly because lower APE sales outweighed better margins.
The “Growth markets and other” segment posted double-digit growth, up from 10% in the first half, led by Thailand and Taiwan, and Vietnam returned to growth.
Wadhwani said the group remains focused on FY26 guidance of “double-digit growth across our four Key Financial Metrics.”
Eastspring funds under management or advice fell to US$285.7 billion from US$290.8 billion despite US$5.4 billion of net inflows. Part of the decline came from a US$2.6 billion reduction tied to the sale of a 2.0% stake in ICICI Prudential Asset Management, which cut Prudential’s holding to 32.6%.
Prudential bought back US$1.0 billion of shares in the first nine months. Buybacks will total US$1.5 billion by year end, following a US$0.3 billion increase announced in August.
