Prudential plc (PUK) Q2 2026 Earnings Report, Transcript and Summary

Thank you for standing by, and welcome to the Prudential plc 2026 Half Year Results Q&A Audio Webcast Call. [Operator Instructions]. I will now hand over to Patrick Bowes. Please go ahead.

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. A recording of today's call will be available from Tuesday next week. Our full results package is available on our website, and I'll refer you to the disclaimers and safe harbor wordings in these documents, and they also apply to this call. 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, Rajeev, Naveen from our Group CEO GEC members. And now let me pass over to Anil, our CEO, to start us off.

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 multichannel platform across our insurance and asset management businesses allow us to deliver consistent high-quality growth. 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. 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, 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. 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 bancassurance, driving productivity and expanding our bancassurance footprint. We launched a multiyear 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. 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 customer. 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. 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 $0.3 billion, which will be added to our 2026 share buyback. 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 2 complementary insurance platforms of life and health. 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% as well as we increased our first interim dividend per share by 15%. Our first half 2026 performance was well rounded, and we remain very disciplined on both quality and our execution. I have 3 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 metrics 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. 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, multichannel model and our drive for quality growth, I'm excited with our prospects in the growing markets of Asia and Africa. Now I will hand it over to Ben, our CFO, to walk through the financial highlights.

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. 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 generations and earnings. 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. Our embedded value per share ex-goodwill reached USD 15.27 or GBP 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 in-force 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. 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. 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, and we're confident of returning to positive variances north of $200 million in 2027. 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. The Group's capital position remains highly robust, and we have a conservative level of gearing. Our free surplus ratio as of 30th of 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. 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 have a further GBP 0.3 billion of buyback to be completed by the year-end. 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 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. 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.

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. Please remember to give your name and organization that you represent when asking your question. And please submit your questions online. In particular, if you're on a mobile phone and just for the benefit of everybody else, to be able to hear properly, please do use the online service or dial in to the VoIP, it's much clearer. Over to you, Alex.

[Operator Instructions] Our first caller is Kailesh Mistry from Bank of America. Your line is now unmuted, please go ahead.

It's 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. 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? 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. 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 APE guidance in our mind? And then lastly, just on India very quickly. In terms of the asset management business, is your intention to get the -- meet the free criteria and then stop at that point and keep your stake stable? Or are you thinking something else there? And Ditto on IPRU, should we expect all the proceeds to be used for reinvestment in the new entity? Or could we see some coming back to shareholders?

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. 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. 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. You're right in pointing out that our domestic business did very well, grew by 22%. And it also underscores, in many ways, the focus that we've been employing on quality. We are very focused on driving our proprietary channels and the quality came through quite strongly with the 7 percentage points improvement that we saw in our margins. Additionally, we are a multichannel growth engine model. You would have noted the strong performance on bancassurance. And a combination of these factors are likely to continue in the second half of this year. To your specific question on CME, I'll try and keep the answer short. We are not seeing any abatement in terms of the drivers of demand. 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. So strong domestic margin improvement, strong bancassurance. 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. I'm going to pause there and pass it on to Ben.

Okay. Thanks, Anil. 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. There's a bit more par 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 forward is to continue to use 11%, 12% in terms of APE when you think about modeling strain. To your question on the free float, I think you've seen from today's actions, making steps towards meeting our free float requirements. Initially, I think as you'll recall, that was a 15% free float, 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. 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. Your question on IPL sell-down. Well, 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. 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. 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.

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. 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.

Our next caller is from Andrew Crean at Autonomous Research.

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, whereas I think it was up 42% in the first half. Just wanted to clarify that you think that the contribution for '26 will be roughly 10% or in line with new business profit growth. 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 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?

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

Yes. Thanks, Andrew. So the 42% increase represents really 2 things. One, as you appreciate, is sort of moving on one policy year and the other is growth in the book. 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. 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, EUR 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. Do you want me to pick up...

Growth in new business profits or sales?

Profits, Andrew, profits.

Let's go to the MDRT and then we'll come to the ROE question.

Okay. Thank you, Anil. Andrew, 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, one aspect of which is growing our MDRT franchise. We are very proud that we are the #2 MDRT franchise, and we look to strengthen that position this year. As you've seen from the numbers, our NBP per active has grown a further 9% in H1 this year. And this has happened because of 5 initiatives, which we will continue to accelerate through the second half of this year. Very briefly, I think the first one is we will continue to pivot the quality of our recruitment towards high-quality schemes like PR 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 Philippines. Second, we have launched for the first time this year, a group-wide PR MDRT program, which kind of creates benefits capability building and incentives for our MDRTs across all markets. 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. 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 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, 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 last but not the least, there's significant investment in AI and technology in the agency platform to drive productivity. Our PRUAction 1.0, which is our AI module for performance management is now live in Singapore at scale across 5,000 agents. I'm pleased 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 phenomenon. We are at the half year stage. And we will continue to focus on our MDRT initiatives as we go forward. What I can share specifically is that the contribution of MDRT and the strong pipeline that we have on MDRT. 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 have already become MDRTs 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.

And then coming back to your ROE question, Andrew. So the start point for that is double-digit growth in new business. We are a double-digit business. The opportunity for the additional 2 to 3 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. 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 and greater operating leverage. And there's a slide in the appendix to my presentation showing our operating leverage ratio improving 40 bps in the period. So that's where you're going to see the uptick.

Our next caller is Nasib Ahmed from UBS.

Three for me. Firstly, can I unpack the double-digit growth for the group in NBP? You're guiding China broadly flat. I get Hong Kong is going to be double digit, but what's kind of pulling up the rest of the business? Second, on Malaysia, saw MDRT 2026 was up 4% new business 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 on to other places and geographies as well? And then finally, on the short-term variances below the line, the USD 626 million, where -- where does it come from? Is there anything that's actually economic versus non-economic in there? China is typically an economic move?

Thanks, Nasib. So let me take the first one, and I'll go to Naveen on the second and Ben on your third question. So we are firmly focused on delivering our guidance of double-digit growth across a range of financial metrics and pretty much kind of lining that up as we look at our objectives for 2027 as well. 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. 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 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. 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. 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. And we are also starting to see a turnaround come through in our Vietnam business. So remember, the Vietnamese business has been a negative growth for us, and it's starting to now flatten out to getting marginally positive -- and we are hopeful that it will start to grow as we kind of go through the second half of this year. 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. I'm going to go to Malaysia, which had a very strong performance. Naveen, you want to tee that up?

Sure. Thanks, Anil. And Nasib, thanks for the question on Malaysia. So as you have seen in the numbers, Malaysia grew very strongly in the first half, 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. 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 in its implementation. And to your specific question, there are 3 big learnings, I think, coming out of Malaysia, which will sustain the performance of Malaysia 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 PRUVentures program is at scale in Malaysia, and we are seeing the incoming class of recruits actually drive productivity, which is 5 to 6x the normal organic recruits. And increasingly, the focus is to make sure that we have more and more share coming from the PRUVenture recruits. The second one is a tailored proposition for the agency. largely on health and protection, but also a set of propositions 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, Philippines, where we have launched PRUVentures 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. 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. And again, those give us learnings for some of the emerging ASEAN 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 ASEAN markets.

Just one additional point for 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, I do expect the growth to moderate in the second half versus the first half. I'm going to go to Ben for your third question.

Yeah Nasib, so 2 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 and lower spreads. And then secondly, higher rates more broadly across many of our markets. So there was a mark-to-market impact on both bondholdings backing shareholder business. But also you then have the sort of discounting effect getting us to a lower present value of future profits on health and protection business. 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%. 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.

Our next caller is Michael Chang from CGSI.

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 2Q and quite possibly a bit of the second half as well. 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, what typically is a normal seasonality pattern within Mainland China? Because typically, 1Q tends to be very strong and 4Q tends to be very weak. So I'm not really sure how to actually interpret the numbers as to how high 3Q base is and how low 4Q base is. I mean, when I talk to some of the other insurers, it's typically maybe about 30% or 35% and 20%, 25%, 25% and then the last quarter might be about 15%. Is that fairly similar for Mainland China business? Secondly, if I go across to Singapore. Singapore is a market whereby I think well APE has been very strong, but margins have been lagging a bit. So maybe I can just get a sense for 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 bancassurance driven at this stage. And then lastly, bancassurance is clearly -- sorry, OFSG the inflection point, taking a look at the growth as of the first half and likely for the full year, we're looking at probably mid-to-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%. How then should we be thinking about modeling going forward post 2027?

So let me start with your first 2 questions, and then I'll go to Ben for the free surplus generation one. So in China, as you know, we have been very focused on driving transformation over the last 3.5 years. 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 1 typically tends to be the door opener, which tends to be the biggest quarter in the year. We did see the impacts of a higher-than-expected PAR mix as well as regulatory changes in quarter 2. And as we look to the second half, we are focused on 3 things. One, we have a big comparator base in quarter 3 in China. July, August and specific were very strong months for us in 2025. So that is something that we have to deal with. 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 2025. In terms of your second question on Singapore, we saw growth both across agency and bancassurance on volumes. And the challenge for us was the new rules that came in with respect to co-payment. 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. In Singapore, we provide the entire spectrum of products, as you can imagine, and we have launched newer protection products to extend our health continuum 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. 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. I'm going to stop there. I'm going to go to Ben for the free surplus question.

Yes. Thanks, Anil. Michael. So look, we're very pleased with our progress on the capital generation front, very confident in delivering our 2027 OFSG target of $4.4 billion. 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. When you model OFSG going forward 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 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%. I think as I said before, I 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. 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, 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 the slide that actually pre-capital returns, if you annualize it, we're generating mid-double-digit growth in the free surplus ratio. So hopefully, that gives you a sense.

Our next caller is Michelle Ma from Citi.

So yes, first, congratulation on the results despite a very challenging environment with a very high base. So I have 2 questions. So first is on CPL. So I think 2026 is not a typical year given so many kind of disruptions and product mix changes. Just wonder given the PAR products already accounted for more than almost 80% in the first half and it resulted in some notable margin deterioration. Can we say we kind of finished product mix change. And currently, we are quite satisfied with the product mix. And the next year, there won't be -- there won't be such kind of drastic margin deterioration. And next year, there won't be any kind of high base or one-off disruption. So that China business, we are confident to go back to the trajectory of high growth. This is my first question on margin deterioration and the sustainable level of growth for [indiscernible]. The second question is Hong Kong. It's very interesting, and we appreciate you share the result of survey in the next 12 months, there are still like 74% of CME they have planned to Hong Kong 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 [indiscernible] they disclosed which type of products they will be more interested given the current the ongoing concern over the taxation of offshore insurance products. Just want to have a sense how our Hong Kong MCV product mix are going to change given you have done such a fantastic survey.

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. 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 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. 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. And we are in constant touch with both our agents 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, what are we doing in second half and specifically the guidance on margin. Angel?

Sure. Thank you, Anil. Thank you for the question, Michelle. I think we rightfully pointed out that this year, you are seeing 2 things happen 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. 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 and first half is 76% -- so that gives a bit of a margin compression that you're seeing. However, we have quickly pivoted to protection business in quarter 2, especially in agency, which we have seen quarter-on-quarter margin uplift already. Second half, we will focus on protection product and optimizing margins for par savings product. In August, actually, many of the non-par products have been onboarded to most of our partner bank. So you'll be expecting that full year, we want to normalize our par mix to about 60%.

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.

Our next caller is Farooq Hanif from JPMorgan.

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, I think it's very helpful. So thank you for that. But I just want to look big picture. So you used the word firmly confident on new business profit double-digit growth for '26. I think in 1Q, you said firmly committed. In 1Q, you used the word confident. I just want to know from you 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 because I think there's a big debate about that this morning. Second question is long-term vision for India. You're replacing a really big partnership in life, but with a low share and have 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 in your estimation, given if we assume a world where you get regulatory approval, et cetera? 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. Can you just give any guidance on some of those items? I mean you talked about CSM growth already, but just on the investment margin and any other items.

Thanks, Farooq. So let me start with the first question on guidance. I'll go to Naveen on India and the IFRS 1 to Ben. 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 half 2 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 is the high comparator base, both in Hong Kong and in China in July and August, which materially starts to ease from September onwards. 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. The second is we obviously have to go through the transition on the expense guidelines in bancassurance. 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 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. 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. I'll go to the India question to Naveen and then Ben, if you can pick up the IFRS one.

Okay. Thanks, Anil. So as Anil already mentioned, Farooq, 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, we will have this very unique position in India of being the multinational insurer, which is straddling both the stand-alone health vertical as well as the life insurance vertical. And we also have this unique position that we'll be partnering with 2 exceptional corporate groups, HCL on the health insurance side and Bharti on the life insurance side. And we believe these 2 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. So that's the long-term thesis. Our priority in the next 3 to 5 years is really to build out a high-quality profitable business. That's really what our aim is. 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. So we will be very selective, but very sharp about the opportunities that we look to target from these 2 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 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, Bharti, in particular, Bharti Life already has a bunch of bancassurance 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 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. 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. 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 5 years, to your question, in about 100, 120 cities. 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. Long story short, I think in the next 5 to 10 years, you should expect India to be a material franchise for us on multiple metrics. But in the next 5 years, we are looking to just build out elements of the business that I outlined.

Thanks, Naveen. Ben?

Farooq, thanks for your question. So maybe it's best to refer to Slide 34 in my pack and just walking up that table. Obviously, we were very pleased with the 17% growth in OPAT per share, which meant underlying OPAT growth of 13%. The noncontrolling interest reduction was related to Malaysia, of course, and that gave us a growth rate benefit, 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 continue to keep central costs tightly controlled. My restructuring cost guidance of coming in for the full year at just under GBP 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. That was somewhat curtailed by a lower net investment result that I previously guided to. And that was driven by 2 things: one, asset derisking in China; and two, lower surplus in our Life businesses as a result of higher remittances. 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. 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. 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 just mentioned on improving underlying variances, I'm very confident in the double-digit EPS growth outlook for the group on an IFRS basis.

Alex, I want to be respectful of people's time. We're going to shortly close down. We've got 3 more questions that we're going to take. Can we have a bit of rapid fire question and we'll do the rapid fire answering. Next one, please Alex.

Our next caller is William Hawkins from KBW.

First question, please, just -- 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'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. 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. 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 2 questions. Again, you've already talked convincingly about productivity in the MDRT in the agency channel. I'm still slightly disappointed that there was a decline in the total number of active agents down to the 55,000. I thought that with Malaysia stabilizing, we'd be back into kind of growth in that number. So I appreciate the improvement 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 as long as you've got the other metrics working? Or at some point, should the active agents be returning to growth? And if so, can you give me a thought process about the time line for that, please?

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. 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. 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. On the whole agency piece, before I kind of hand it over to Naveen. The focus on quality has been quite deliberate. And we are pressing 2 levers, William. One is, as we'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 ASEAN market. 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 demand side, we are getting demand for high-quality advice. But on the second front, we are also up-tiering our propositions to emerging affluent as well as to affluent customers. I'm going to stop there. I'm going to have Naveen provide you a little bit of additional color on productivity versus active agents.

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 problem. 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. H1 this year, developed markets, Hong Kong, Singapore, actives are stable because of high comparators and particular circumstances, which we have talked of. So our problem in terms of decline of actives historically has been emerging RSA. And I just wanted to partition the problem and focus it on emerging RSA. Within emerging ASEAN, if you look at our 3 biggest markets, Malaysia, Indonesia, Philippines, Malaysia, as I mentioned, has grown actives at 10%. 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. 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 care also about is the quality of these actives. And I take you back to the point that we made on the PRUVenture recruits, right? If they are 6x the productivity of normal recruits, -- every one of those actives is 6x a normal active, right? And we are actually pivoting away from this model of mass recruitment, part-time agency in Indonesia, Philippines and Malaysia to quality recruitment full-time agency. And therefore, our actives will grow, but more importantly, the quality of those actives will also grow as we move forward.

Thank you -- let's go to the next one, Alex. Time runs on.

Our next caller is Abid Hussain from Panmure Liberum Limited.

I'll try to be quick. So the first one is on the tax enforcement and the sort of the noise around that. Just wondering if you can share what proportion of the in-force business earnings or EV comes from the MCV PAR savings or other investment businesses -- other 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. 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 55,000 number, the decline is slowing. But just are you trying to build a particular number that you're trying to get to on the 55000, -- it seems like you're pivoting away. So it might mean that we should see further declines. I just want to get my head around that bit. And just very, very quickly, final question on Eastspring. It looks like there's a sort of 2 bps revenue margin decline and the cost income ratio has gone up. Just wondering what's driving that? And where should we expect that to end up?

Abid, so let me first answer the agency question. I'll go to the tax enforcement and the in-force point to Ben and then Rajeev can pick up your cost-to-income ratio point. So on the agency, as we've said many times, we are pressing both levels. We are pressing the productivity level as well as the quality recruitment leading up to the active agents. 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. The reason we are doing that, as I said, is on 2 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. 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. I'm going to go to Ben for in-force. And then Rajeev, if you can pick it up on the cost-to-income ratio on ASI.

Yes, thanks for the question. So in terms of our Hong Kong business, about half of the relates to China Mainland visitors. 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. 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. So it's high-quality, sticky business. People aren't buying these products for some sort of tax reason. Rajeev, do you want to pick up the...

Yeah, Thanks, Anil. Yes, absolutely. Look, we had a very strong set of results in the first half, as you can see 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, and that's really what's driven the cost/income ratio to increase. But overall, our business mix has been very positive. Fee income ratios remain strong, and we're very pleased with the first half results.

Okay. Thank you, Rajeev. Last one, Alex, and then we will draw a close.

Yes. Then our final caller is Thomas Wang from Goldman Sachs.

Maybe firstly, if I go back to Mainland China, just to clarify, in the announcement, I think you said the full year '26 NBP will be similar to full year '25. So that's on a CER basis, right? So which would roughly imply second half will be somewhere around 10% growth. Is that the right interpretation there?

The short answer is... You had one more question. Go ahead. Go ahead, please.

Yes, 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 wondering whether if you can give a little bit color on what's driving that expense savings? -- it -- because I don't think -- if it's product mix or what type of product or this premium term have lengthened? Just a little bit color on that would be great.

Thanks, Thomas. So on the China question, I guess the short answer is it is on a CER basis. When we speak to the guidance for the full year, which is a similar range as compared to what we witnessed in full year 2025. So you're right there. On HA margins, I'm going to go to Ben to provide you some additional color in terms of what's driving that.

Thomas, 2 things really on the margin side. One is improved mix. We've done well on the H&P side of things in Hong Kong, 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 57%, 58% of our product is H&P. 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 as a result of repricing that gave us an additional boost there. So we're pleased with the margin uplift.

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

Thanks, Patrick, and thanks, everyone, for this question. 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. 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 4 years, 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 is our new Chair and has recently chaired his first Board meeting. 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. Thank you very much, and we will be staying in touch as we get on the road. And hopefully, we'll get an 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.