Prudential plc (PRU) Earnings Call Transcript & Summary

Welcome to the main part of Prudential's 2021 Investor Conference. In my presentation, I'll start with an overview covering the journey we've been traveling, where we're headed next and the way we've been transforming this business across multiple dimensions. I'll then hand over to Nic Nicandrou, our Chief Executive of PCA, to show you how we execute with a focus on delivery, digitalization and what we're calling humanization. Put simply, that's about enabling our people to empower our customers. Nic will be followed by Mark FitzPatrick, our group CFO and Group COO, on how we will translate our strategy into financial value. And I hope these presentations will leave you a clear sense of our scale, quality and the velocity of our business. We'll then have an initial Q&A session and go into 2 panel sessions. After a final Q&A, I'll set out the investment case and close with a summary. But taken together the showcase of videos we've uploaded for this represent around 180 minutes of rich content. And I realize that's a lot for people to absorb. But the one key thing I'd like you to take away is that at its heart, Prudential is actually a simple business with a simple proposition to investors. We have a simple purpose. We help people get the most out of life. And we do this by making health care affordable and accessible and by protecting people's wealth and by growing their assets. We have an equally simple strategy. We focus on the largest markets in the fastest-growing regions of the world, offering a broad set of differentiated products to serve the unmet needs of these communities. We've built a competitive advantage in 3 ways: one, through a multichannel distribution model of 600,000 agents and access to 20,000 bank branches and a modern scalable platform; two, through our distinctive culture focused on innovation and growth; and three, through the experience and trust with regulators, policymakers and communities that comes from operating in Asia for almost a century. We have an inherently sustainable business model. We benefit from a virtuous cycle where the superior economic growth in our markets and aging demographics create an ever greater need for what we do. Policymakers recognize the important role we play as a pillar of their social safety net. And we're also taking steps to align our business more closely with the global transition towards a lower carbon economy. Any future climate crisis will heavily impact the communities we serve in Asia and Africa. And as a steward of long-term capital and a protector of people's lives, we need to drive decarbonization in a way that's just and inclusive. So last month, alongside a new set of near-term measures, we announced the goal that the assets we hold on behalf of the insurance companies will be net zero by 2050. This is a business that's materially larger and more valuable to shareholders than it was 10 years ago or even 5 years ago. In particular, looking at Embedded Value, which is the best proxy for compounding growth, this has more than tripled over the past decade and doubled over the last 5 years. While many of our peers might be able to move the needle on 1 or 2 metrics over a shorter time frame, very few can drive all these metrics over such a sustained period. There is no single ingredient in the sauce that creates this sustainable growth. It's a blend of positive external trends, constant internal transformation and the dedication of our people. A dedication so clearly seen in the response to the challenges of COVID. All of this makes our growth formula extremely hard to replicate. This strong track record is one of the reasons why we believe that we can continue to grow new business profits or NBP faster than our market's GDP. And it's why we believe we can sustain double-digit growth in embedded value per share in the years to come. Over the past few years, we've taken steps to actively manage our business model to align it more closely with the big structural changes that create demand, again, largely unmet for the products and services we provide. These are the charts that tell that story. Despite their fast rising prosperity, Asian people still have low levels of insurance cover, with 40% of health and protection spend still paid out of pocket. This creates a large and growing unmet need, a vast health and protection gap that's been estimated at $1.8 trillion, and even larger is the estimated $83 trillion mortality gap, representing the income that families forego if they lose a breadwinner. It's in these long-term trends, which underpins strong rising demand for savings and protection across the region, and they create significant opportunities for growth and value creation. In some ways, it's harder for a successful growing business to adapt and change than it is for a business facing a visible challenge. But this is exactly what we've been doing over the past few years, fixing the roof while the sun shines. And this has been more than essential maintenance. It amounts to a complete restructure, reconstruction, if you will, of the house. The transformation has taken place across 3 dimensions: structural, operational and cultural. So let's start with structural transformation. When we look back at Prudential in 2015, we had a great set of businesses, but they were strategically constrained. The group was not necessarily the logical owner of all of our businesses, nor were the individual units strong enough to stand on their own as independent companies. What we did was create genuine optionality, and then we exercise those options. Breakups are difficult, which is why you see so few of them in financial service companies with long histories. But with Jackson expected to separate in the second half of this year, again, subject to shareholder and regulatory approval, the completion of this phase of structural transformation is within sight. In 2015, we were a global enterprise, straddling across 4 continents, operating in wildly varying markets. Once the structural changes are complete, we'll be focused purely on the 2 continents with the most attractive opportunities for the services we know how to provide. Shareholders will own a pure play on future growth through a portfolio of powerful businesses. China, India, scale businesses in ASEAN, emerging growth markets in Asia and Africa and a leading regional asset manager. These businesses are linked by our culture, an increasingly integrated and flexible approach to servicing the customer through digital. This makes us scalable, adaptable and ready to seize future opportunities. This brings me to the operational transformation. Prudential in 2015 was like an auto company that made separate models for individual countries. They were often beautifully designed. They're drivers, but no common platform and few shared components. What we're doing is systematically reengineering our business. We call our new common platform Pulse, and you've already heard a lot about it in the business videos. But Pulse is more than an attractive app to welcome new customers with distinctive health and wellness services. It's a new way of thinking and working within the organization. It's a set of common tools to make our agents more effective and more productive. And it's the way in which we can connect seamlessly to third parties such as banks and our new digital distribution partners. It also is transforming our ability to become a genuinely inclusive business. Where before, our business model was constrained in the types of customers we could effectively service, now there are a few limits to our reach. Over the past few years, you've seen us rapidly develop our group and SME businesses and our Sharia-compliant offerings. We create bite-sized products that suit Millennials who are not ready yet to commit to our more traditional comprehensive plans, and we stretched our brand in the high net worth segment. All of this makes for a more resilient business, better able to adapt to difficult times and to seize new opportunities as they emerge. The traditional model for our industry was to focus on a relatively small number of high-value customers. And those cohorts of loyal customers, some of which have been with the firm for decades, remain hugely important to Prudential. The model we're moving to now is one where customer acquisition and scale is consistent and indeed supportive of the creation of long-term shareholder value. And that's why we're developing the capacity to reach 50 million customers by 2025, which you'll hear Nic talk more about in detail. Underpinning the transformation of our capabilities is a genuine shift in our culture. In 2015, compared to where we are today, Prudential was a siloed world in both its internal habits and the way it interacted with the outside world. There's a prevailing view in financial services that we needed to own and control the whole value chain, even the elements in which we had little expertise. Here are a few of the things that we've shifted. First, we've moved from a culture of regarding external firms as mere vendors to building deep partnerships where there's collaboration between teams and 2-way transfers of ideas. And to date, we've entered into no fewer than 35 key digital partnerships. Second, we brought in new people with experience in tech and consumer-facing sectors. And more importantly, we've upskilled our existing colleagues. 3,100 of them have now gone through training in artificial intelligence. Third, we've introduced new ways of working in order to accelerate innovation and product development. Two years ago, we introduced the Silicon Valley idea of hothouses. These are intense 3-day workshops designed to convert at high speed concepts into propositions ready for launch, subject of course to regulatory approvals. Since then, the hothouse has become a key part of our standard way of working. The output of this is a step change in innovation. The launch of 175 new or improved products last year, up from 106 in 2015, the rollout of Pulse across 17 markets in Africa and Asia in 21 months and the ability to swiftly enter and scale up new markets, such as countries in Africa or new provinces in China. The acquisition of customer insight through Pulse to define the next phase of innovation is key. Each day, we acquire 20 gigabytes of behavioral and engagement data. The proof of this execution and innovation is demonstrated in the $70 million of Pulse sales in the first quarter of this year. This represents 9% of our sales in the markets where Pulse is available. There's been a fundamental mind shift. The starting point for everything we do is the needs of the consumer, not our ability as a manufacturer to produce. Again, this is an attitude still even now too prevalent in the financial services sector. It means that our people can dare to dream in a way they never could in the past. I hope you've enjoyed the videos we've uploaded. And later on, you'll have the panel sessions as well. The energy and dedication of our people never fails to inspire me. This is a diverse team in every sense of the word as well as diversity of gender and ethnicity. This is a mix of industry experts and people have entered our world from other disciplines and sectors. You'll also have watched a mix of veterans and younger people with high potential. All of them have come together to build a distinctive ethos and culture that I believe represents a genuine competitive advantage. This transformation supported the development of a diversified franchise, focused on the high-growth markets in Asia and Africa. The business has access to 3.7 billion people in Asia and a further 400 million in Africa. The map here illustrates the number of our leadership positions, 9 top 3 businesses, and the sheer scale of those businesses with 7 of them producing profits of over $0.25 billion last year. The number of material profit engines in Asia is a major change compared to 5 years ago. In particular, our Mainland Chinese business, almost immaterial in 2015, has grown its IFRS earnings by more than 5x and is now the sixth largest contributor to the group. The diversity of our platform, demonstrated by our broad product mix and our multichannel distribution, which includes long-term bancassurance partnerships with Standard Charter and UOB. In Eastspring, with a reliable and stable flows from our Asian life business, which again are sizable, are largely uncorrelated to market factors and are growing as the life businesses grow. These flows provide Eastspring the opportunity to develop investment strategies that can be subsequently deployed for our third-party retail clients and institutions. And then our currently relatively small but fast-growing Africa franchise has great scope for leveraging on the Asia game plan. This robust platform is a strong launch pad for the opportunities of the future. When we look back 5 years ago, there were 3 opportunities that loom large in our discussions around the Board and executive tables. First, the creation of a corporate structure that could unleash the potential of our business; second, the creation of a common operating platform, that would allow us to compete effectively in an era of digital disruption; and third, the creation of a corporate culture focused on innovation and growth, able to keep pace with the fast-changing consumer needs. That work, while not complete, is well underway. And now new opportunities are presenting themselves. In China, we have a huge opportunity through the Mainland China business of broadening and deepening our presence in our nationwide footprint. We're also well positioned to capture the significant opportunity presented by the Greater Bay Area, a region in which if it were a separate country, would be the tenth largest economy in the world. India, here with the leading life insurance and asset management businesses, there's an opportunity to expand our presence in a country with 1.4 billion people as the businesses grow, both in terms of scale and profitability. In Southeast Asia, we have the opportunity to broaden our offerings and enhance our distribution to deliver personalized solutions to meet people's health and savings needs, particularly in the region's largest economies, Indonesia and Thailand. In health and protection, the opportunity to build out from a traditional role of financial protection, into solutions that postpone and prevent ill health. And in wealth, the opportunity to combine our capabilities into a super app or one-stop shop for Asia's wealth needs. And new markets, we'll consider the options available to us. But the biggest opportunities lie on the doorsteps of our existing offices. There are many hundreds of millions of people in Asia and Africa who are currently unserved or underserved by financial services. And we're well positioned to meet the health, protection and saving needs of the region. I'll now hand over to Nic, who will say more about how we're delivering digitalization and empowering our colleagues and valued agents and upon whom the financial success of this great business relies.

Hello. I am Nic Nicandrou, the CEO of Prudential Corporation Asia. Prudential turned 173 years old this year. We have seen a lot in nearly 2 centuries. And the last year has once again proved the value and resilience of our business. But we don't take this resilience for granted, and this is why we have been preparing for some time for Prudential's pivot to be a purely Asia- and Africa-focused group, and to become a digital-led organization. Through all this change, we have found a renewed sense of purpose, and that's to help people get the most out of life. Helping people pays homage to our heritage of providing sound financial advice to generations, and getting the most out of life speaks to our future as health and wealth partner to millions. You will have seen this come through in the showcase videos from across the business, which were released last week. I am immensely proud of the work the teams are doing. And I would like to give you more context of how all this comes together. So I will cover 3 areas. Firstly, our objectives and how we're rallying our people around them; secondly, a walk-through of our forward-looking strategic themes and thirdly, an overview of our unique strengths and recent performance. So let's start with our objectives. If our purpose is to help people get the most out of life, then naturally, we want to do this for as many people as possible, which is why we want to build capacity to reach up to 50 million customers by 2025. As you have just heard from Mike, there is an abundance of opportunity in Asia, given the growing and increasingly affluent population, the lack of social safety net and underpenetrated markets. The same holds true for Africa, a continent of more than 1 billion people that is brimming with opportunity. Swiss Re puts the mortality gap in Asia at USD 83 trillion. If we were to claim just a fraction of this gap and a share of the household wealth indicated on this slide, we would then be well placed to meet our objectives of growing NBP ahead of GDP as well as growing embedded value per share at a sustained double-digit rate. All of this opportunity comes with a responsibility to address the disproportionate effects of climate change on populations across Asia and Africa. This is why we are proud to have joined the Net-Zero Asset Owner Alliance and to have signed up as an asset owner to the UN Principles for Responsible Investment. So how will we meet these objectives? Well, it starts with our people. We have pledged to make Prudential a place where our people can connect, grow and succeed. YOU to the power of PRU is how we are visually representing the essence of this pledge and the many initiatives that accompany it, as we help our people get the most out of their careers. In exchange, we have invited our people to bring the best version of themselves to work every day and to collaborate across businesses as we make our mark on the world. That's how we get the multiplier effect of the collective, which we have symbolized as PRU to the power of YOU. To create the conditions for success, we have recently refreshed our values, which are simple and sincere. Our values are ambitious, curious empathetic, courageous and nimble. These values are how we're asking our people to show up to work every day. They're now embedded in our operating model, our performance system, our diversity and sponsorship programs and importantly, our expectations of leaders. From this place of alignment, we are directing our people to focus on 3 strategic themes: delivering profitable growth in a socially responsible way; digitizing our products, services and experiences; and humanizing our company and advice channels. This is how we're rallying our people to seize the opportunities that we see in both Asia and Africa. Now let me walk you through these 3 strategic themes. Delivering profitable growth and social impact is the first of these themes. Our ambition is to increase our presence in China and India, win back in Indonesia and deliver the returns of our recent investments in Thailand. By focusing on these 4 markets and laying the foundations of our expansion in Africa, we will spur growth beyond that which is available to us in our more established markets like Hong Kong, Singapore and Malaysia. We want to grow in health and protection by leading in accessibility and affordability for 2 important reasons. Firstly, because increasing access will fulfill our purpose and allow us to serve even more customers; and secondly, because health and protection represent our more profitable products, which drive our NBP and embedded value growth ambitions. Eastspring is our asset management business, whose purpose is to be experts in Asia invested in your future. We hold a top 10 position in 7 markets and have investment experts on the ground in every one of them. Our growth plans for Eastspring involve deepening its integration with our life businesses and partnering with world-class providers to diversify our product suite and offer global investment solutions to investors across Asia. We're doing this against the backdrop of a global movement around ESG, that's encouraging more responsible investment strategies. As we work towards our long-term goal of becoming a net zero asset owner by 2050, we're doing as much as we can, as fast as we can, always with the goal of supporting a just and inclusive transition in markets we operate in. To this end, we will divest from all investments in businesses, which derive more than 30% of their income from coal, with equities to be fully divested by the end of 2021 and fixed income assets by the end of 2022. We will make a 25% reduction in the carbon emissions of all shareholder and policyholder assets by 2025. And we will engage directly with companies responsible for 65% of emissions in our portfolio. Taken together, we believe that these 3 initiatives will accelerate our growth trajectory in a sustainable and socially responsible manner. The second area that we have asked our people to focus on is digitizing our products, services and experiences. This is about our investment in Pulse, a first of its kind digital platform and ecosystem that stands to transform our business. In fact, we think of Pulse both as a business as well as a platform for the business. As a business, Pulse makes it easy for customers to buy and to do so repeatedly. Based on a deep and empathetic understanding of their needs, we're designing the customer experience to be frictionless. Pulse enables people to engage with a range of health and wellness services, including health check, telemedicine, dengue alerts, fitness tracking, meal planning, BMI index and more each month. The breadth of services on this all-in-one super app is designed to attract a new generation of PRU customers, one that is younger, more health-conscious and from the middle and lower income segments. In many of our markets, family is the fabric of society. So this new generation of PRU customers will bring with them parents, grandparents, friends and relatives, creating a network effect that deepens loyalty and expands our customer base at scale. As customers interact with our platform, we get to know them better and in a way that is unrivaled. We do this with their consent, gaining access to a unique set of data and insights that helps us design more tailored solutions. Pulse also helps customer to get to know their own needs better as they navigate their personal health and wellness goals. We believe that this kind of partnership will lead to a mutually beneficial lifetime relationship, and that requires trust, particularly when it comes to such personal information. That's why we have taken an uncompromising approach to privacy and security. Trust is also built when we make it as easy to engage with us as it is to buy from us. Pulse will change the game on customer fulfillment with an in-app wallet for payments, 24x7 online servicing and an advanced claims experience. These capabilities are already live in a few markets with the rest to follow. One final point on the platform, because Pulse has seamless end-to-end processing and partnership integration, we're much better positioned to achieve both scale and efficiency. This will have a positive effect on our operating model in terms of cost to acquire and cost to serve our customers. Taken together, we believe that the initiatives under digitizing can move health and wealth outcomes on a national level. Pulse is perhaps the most all-encompassing investment that we're working on today. Finally, our third strategic theme is humanizing our company and advice channels. Upskilling and reskilling is an investment in careers, but importantly, it is also an investment in our ability to build on our heritage of providing relevant products and sound advice, advice that sits alongside and complements our digital offerings. For our employees, this includes learning in the flow of work with broad-based programs like design thinking and new ways of working. Learning while working on life challenges is accelerating development cycles, in turn allowing us to continuously roll out a wider set of products and digital tools at a much faster pace. For our agents and our partners, we're undertaking a complete overhaul of our learning and development programs as we move away from the lecture-based PowerPoint in favor of a more modern approach that emphasizes skill building, skills that enable our agents and our partners to more capably and confidently advise on an ever-evolving set of customer needs. More products, enhanced tools and broader advice enables a much more inclusive approach to the segments we serve. We intend to become a leader in products for women and Islamic customers. And we already have a strong Sharia business in Malaysia and are making investments to build on a similarly solid foundation in Indonesia. Traditionally, the wealthy have had the lion's share of access to high-touch financial advice. We intend to lower the threshold for wealth services offering a private banker in a box service for the mass market and one that brings high-quality advice but at a much lower entry point. This will be enabled by a wealth offering on Pulse that can stand on its own, all be combined with advice from an agent. Either way, our goal is to be a trusted advisor regardless of channel as we financially educate people, help them plan and visualize goals and guide them on where and how to invest. On that note, Prudential Foundation's award-winning program Cha-Ching, is building financial literacy for millions of children. It is available in 13 languages and reaches 35 million households every day on television. Cha-Ching meets a bonafide need in our markets and is creating a generation of financially literate customers that we hope one day will become our valued customers. As we humanize our company and advice channels, we'll become known again not as a man from the PRU, but as the people from the PRU, people who are ambitious, curious, empathetic, courageous and nimble. People who are committed to and eminently capable of delivering, digitizing and humanizing. So here, you now see our 9 growth initiatives together as they relate to our 3 strategic themes. Looking at the whole picture in its totality, we believe that we have set out a clear purpose-led strategy that will inspire our stakeholders and drive our growth agenda. So this gives you a sense of where we are going. Now let me share with you where we are and how we're doing. Today, Prudential enjoys a unique set of strengths in Asia that differentiate our business and put us in an advantage position. We have access to nearly the whole of China. We're present in India through top 3 players in both life and asset management. We are developing a compelling digital strategy with Pulse. We have a leading agency force across the region. We have the most bank partners and the largest branch network. We're the largest Sharia player. We have a unique with-profits offering with significant capital support, and we have Eastspring with top positions in the majority of our markets. I would now like to deep dive in the first 4 areas of differentiation, shown on the left of the slide. In China, we have a distinct strategy and a 50-50 partnership with CITIC, China's largest conglomerate. We're in 20 provinces and are present in 99 cities, which gives us access to most of China. We have built this presence steadily and deliberately over time, getting the necessary licenses, building local relationships and putting in place the technology and infrastructure to operate efficiently. It also takes time, effort and expertise to incubate a high-quality agency business. However, this does not slow us down. Each time we enter a new province and city we have immediate access to CITIC's bank network and relationships. This access allows us to generate new business quickly, giving us time and space to build a quality agency presence from the ground up. That's the benefit of a multichannel approach. Our agency channel has not yet reached maturity in our more recent province and city entries. So we expect a lot more to come from these as they come of age. The results speak for themselves. In 2020, our agency margins were 85% and our banker margins were 39%. Our geographic expansion, combined with our multi-channel and multi-product approach, has driven a sixfold NBP increase in the last 5 years. Last year, we managed to grow NBP by 3%, giving us an edge in a tough year, and we're confident that we can continue to grow NBP at pace over the next 5 years. In India, we have a minority stake of just over 22% in ICICI Prudential Life or IPL. Ours was one of the first JVs to be approved in India. We believe that this nascent market has become much more disciplined and is ripe for rapid expansion. The sheer size of the opportunity is hard to overstate, with a USD 16.5 trillion protection gap and a low penetration rate of 2.8%. For life insurance, the private sector customer base is expected to triple from 42 million today to more than 120 million by 2030. IPL is well positioned to be one of the winners in this expansion. Key to winning is product expertise, which is especially crucial as the economy develops and customer needs evolve, making critical illness, multiyear medical plans, retirement solutions and legacy planning increasingly relevant. These are all product areas where Prudential can bring a lot of expertise. Our asset manager in India is similarly poised for success. We hold a 49% stake in ICICI Prudential Asset Management company, or IPAMC, a top 3 player with USD 57 billion funds under management. The business has several unique strengths in product and distribution, which is why IPAMC today enjoys a 23% share of mutual fund investors in India. This business platform positions us well to play a leading role in the expansion of the mutual fund investor base, which is expected to more than triple from 25 million today to 91 million by 2030. These are both great businesses with strong positions in long-term growth markets. Even though it was only launched 21 months ago, Pulse is already producing results. It is live in 17 markets and have seen 24 million downloads with around 10 million registrations. The registered users are younger overall than our typical Prudential customer and some 70% are new to Prudential. They're using a whole new set of services, be they from our own proprietary offering or from those provided by our 23 service partners. Our offerings include time-limited freemium products, bite-sized products, health and wellness services, subscriptions and much more. All of this is creating communities, teeing up engagement opportunities and generating sales. In fact, since its launch, sales associated with Pulse have reached USD 280 million of APE from both bite-sized products sold online as well as from off-line referrals. Each day that goes by, brings us more than 20 gigabytes of behavioral and engagement data that trains our algorithms and informs nudges, which aim to make our customers healthier and wealthier. But our ambitions for Pulse are much broader. We intend to make it our primary customer on-boarding and fulfillment tool, integrating leads generation, activity management, remote selling, payment and policy issuance, all on a single platform. We're also seeking to make it our e-servicing platform for both Pulse users and existing Prudential customers. I repeat, we intend to do all of this on a single platform, which will have the same look and feel across the markets where Pulse is currently launched. The way which we operate our agency channel is also evolving. FUTUReady is a suite of Pulse-enabled tools and programs that support all assets of agency management, from recruiting on PRUdna, to learning on PRUExpert, to sales and activity management on PRUForce. Given that upskilling our agency force is one of our growth initiatives, let me say a bit more about PRUExpert. For new agents, our ambition is to put MDRT in reach in the first year. MDRT stands for million-dollar roundtable, and it is the term used in our industry to describe the best-performing agents. We have converted training materials from thousands of slides of technical PowerPoint into a more human tone and a digestible digital format that can be self-directed and taken on the go. Once on the job, the learning does not stop. We now provide agents more than 1,200 bite-sized videos for anytime, anywhere learning and sales enablement. Agents also benefit from enhanced coaching from the leaders, thousands of whom are attending our monthly webinars on agency leadership. FUTUReady is already producing results. Recruitment was strong in 2020 with 118,000 new agents joining our wholly owned businesses. Those agents taking our targeted learning programs are 10x more productive than previous cohorts. MDRT is in our DNA now more than ever, with qualifiers at an all-time high of 13,200. And in the first quarter of 2021, around 600,000 leads from Pulse users generated USD 70 million of APE. Make no mistake, our agency remains core to our strategy. Together with our bank partners, they provide the advice that our customers have come to expect from channels tied to Prudential. In the last 5 years, our customers have rewarded us with top 3 positions in 9 of 13 life markets, which has led to the doubling of our embedded value and of our assets under management. These numbers are a testament to the quality of our execution. Last year was disruptive. And like everyone else, we had to adapt. But the fundamentals of our business were already strong, and we have strengthened them further with continued investment in our channels, products and digital capabilities. This is what underpinned the sequential recovery that we saw last year, which continued into the first quarter of 2021. Mark will cover the first quarter results later in the context of our broader financial performance. That's just a snapshot of our current performance and capabilities as they relate to China, India, Pulse and agency. There is a lot more color on these as well as on a broader range of topics from across our markets in the showcase videos uploaded last week. So in conclusion, we have been busy over the last few years, improving Prudential's strength and adding new ones. Through all this change, we have found a renewed sense of purpose, which is to help people get the most out of life. Our objectives are clear, and we aim to deliver them in a sustainable and socially responsible way. We have rallied our people to focus on 3 strategic themes of delivering, digitizing, humanizing and to implement the 9 growth initiatives that underpin them. With 12 years at Prudential and now in my fifth year here in Asia, I never cease to be inspired by the talent and passion of our people. And I know that together with our unique strengths and recent investments, our best years are ahead of us. Thank you. I will now hand you over to Mark.

Hi. I'm Mark FitzPatrick, Group CFO and COO of Prudential, and I'm delighted to be talking with you today. You have heard Mike describe how we have transformed the business in recent years and highlight the exciting growth opportunities ahead. My presentation will focus on how our strategy and delivery translates into growing shareholder value. Any truly sustainable growth business needs to be managed through a dashboard of metrics that balances value, cash, new business and profitability. This slide shows how those core metrics translate into a 10-year scorecard. As Mike said earlier, it's very rare in a sector for a company to be able to deliver such consistent broad-based growth over such a long period. And this, of course, has been a period characterized by volatile markets and the effect of the pandemic. Today, I want to explain how we drive long-term growth that creates value for shareholders, and I will touch on each of these financial metrics as I do so. In common with our peers, the core metric we use to measure value creation is embedded value. This represents our net assets plus the present value of the expected future cash flows to shareholders from business we have already written. As a proxy for shareholder value, embedded value is a key metric in the day-to-day management and decision-making in our life insurance businesses, and it's a significant component of our long-term incentive plans. Our focus is to deliver double-digit growth in embedded value per share over time. Now we use the internationally recognized European embedded value basis, which is a granular and very transparent methodology with economic assumptions set actively to reflect observed market conditions and with appropriate risk adjustments for the products we write. We have provided a video and more detailed slide pack on embedded value, which you can access in the library of additional materials that accompanies this investor conference. As shown on the right of this slide, our Asia embedded value has more than doubled since 2015 to $44.2 billion at the end of 2020, reflecting the profitable growth in our portfolio. Since embedded value does not apply to asset management, Eastspring is only included in this chart at its net asset value, which was $1.1 billion at full year 2020. However, asset management earnings have grown on average at 10% per annum since 2015, reaching $283 million in 2020. Now key to delivering growth in embedded value is the way we actively manage our product portfolio and the way in which we allocate with discipline your capital to shareholders. I will explain a bit more about both of these themes in a moment. The cash flows we expect to generate from our existing $42.8 billion of Asia EV are highly predictable. This predictability is explained in part by the pie chart on the left, which shows that almost 2/3 of our in-force value comes from health and protection, or H&P. This is a business which is highly valued by consumers seeking to reduce their out-of-pocket health expenditure as well as the very real financial jeopardy associated with the family breadwinner's ill health or death. Shareholders benefit too because health and protection is also regular premium business, making for high-quality income, and it also reduces our sensitivity to market risk. The next chart shows the key elements of our Asia Life embedded value, which comprises $5.3 billion of free surplus, which is the net assets in excess of the capital required to support existing businesses and $37.5 billion of in-force value and locked-in capital, which will monetize and be released over the life of the business. On the right, you can see how the $37.5 billion of discounted value is expected to emerge over time into $59.1 billion of undiscounted cash flows over the next 40 years. Even in the second half of the 2050s, our existing business would still generate around $1 billion of annual surplus before any contribution from new business. Our confidence in delivering these cash flows is also founded in our very cautious approach to assumption setting. Historically, we have outperformed our EV assumptions with positive operating experience variances of around $3 billion and positive investment variances of around $2.5 billion over the past 5 years. As we have done historically, we will continue to publish our EV monetization profiles every year so that you can track our delivery against them over time. This slide demonstrates how our powerful new business engine has attributes that very few businesses in any sector can replicate. Our disciplined approach to allocating capital generates a virtuous circle. At the top of the circle, we invest capital to write products with high rates of return and very short payback periods. At the bottom of the circle, we manage our operations and balance sheet efficiently so that the shareholder value created from our products monetizes as expected. This monetization creates new capital on the left of the circle, which can be reinvested into writing more new business. You can see on the right-hand side of the slide, why we have increased our focus on writing a large proportion of H&P products in recent years. These products meet growing customer needs while generating returns that are relatively insensitive to markets. Health and Protection margins are, on average, almost 20% of premiums, 4x higher than for savings products. This reflects the higher underwriting risk that we take on behalf of consumers and the higher capital we commit and play to our strengths of careful risk selection, claims efficiency and underwriting skill. Another example of our differentiated product mix is our U.K. style with-profits saving product, which provides smoothed investment returns for customers supported by with-profits estate, which provides the capital, thereby making this product very challenging for competitors to replicate. Our expertise in product design and pricing as well as in distribution is a critical competitive advantage. We created and refreshed 175 new products in 2020, ensuring we are evolving to meet customer needs and achieved a higher health and protection mix in 2020 in 7 of our markets. In Singapore, for example, we launched PRUActive Protect, a customizable, critical illness plan that provides a lump sum payout on diagnosis of 37 critical illnesses and is flexible so coverage can be added when the customers' needs, priorities and budgets grow. And in Thailand, our flexible PRUHealth Super Strong product allows customers to select coverage based on their insurance needs and provides access to round-the-clock emergency medical services, providing our Thai customers with protection and peace of mind. This continued innovation and refinement to our product set helps to contribute to high risk-adjusted returns for shareholders. The portfolio of new business sold across Asia and Africa generates IRRs of more than 35% and returns the invested shareholder capital within 3 years for reinvestment into further new business. While organic investment in new business is our first priority, focused investment in inorganic opportunity allows us to further enhance value. Since 2015, we have committed almost $10 billion of capital to support growth in Asia, including around $5 billion of inorganic investment to grow our distribution reach and to build digital capability. You would have seen examples of this enhanced capability in our markets through the Investor Day videos, including, for example, our enhanced opportunities in Thailand as a result of recent inorganic investment. It's this continual cycle of profitable investment in new business which allows us to achieve a high growth in embedded value. Here too we have a strong track record with an NBP growth having averaged 8% over the last 10 years. On the left of the slide, you can see how new business profit is supported by our high concentration of regular premium business, our weighting towards health and protection and a high level of customer retention. When you look at the transformation that's going on in Prudential, including, for example, new value-added services via Pulse, moving to straight-through claims processing and agent training, these developments all build customer engagement, loyalty, retention and in turn, NBP and embedded value. As you can see on the chart, over the 5 years since 2015, 2/3 of our increase in embedded value, or $15 billion, has been created from new business over that period. And this is in addition to the expected return, which is a natural growth in embedded value created as the back book monetizes and the discount unwinds. And then the impact of positive experience variances I mentioned earlier. This slide shows how our strategy and disciplined execution drives growth. Put simply, our high-quality in-force Life portfolio delivers highly predictable cash flows. We then reinvest these cash flows at attractive returns. Over time, these new business profits monetize, driving growth in our free surplus and increasing our capacity to further reinvest. And this is our growth engine. So to put some numbers on this, we expected $8.1 billion of free surplus to emerge over the 6 years to 2020 based on our published EV monetization profile. This is a sum of the blue part of the columns in the chart on the left. When added to the cash flows expected to emerge from each tranche of new business since 2015 -- namely the light and lighter shades of pink -- in total, we expected $11.6 billion of free surplus to emerge over the period. Adding asset management earnings and positive operating experience variances, $14 billion of free surplus was actually generated over the period. The $1 billion of positive operating experience variances, therefore, increased our surplus generation by about 9% compared to our expectations. From this $14 billion of free surplus generated, we reinvested $3.7 billion to write organic new business, which created the $15 billion of NBP I highlighted earlier. In other words, for every $1 reinvested in new business, we added $4 of value. The balance of free surplus generated was used for inorganic investment to cover essential costs and for dividend payments and also retained in our businesses to provide additional resilience. This really demonstrates our capital management framework in action. It shows the benefits of writing business that is low strain with high risk-adjusted returns and a very rapid payback. Every year, we invest in new business to grow embedded value, which ultimately monetizes into free surplus, which can then be reinvested to create compounding growth. IFRS operating profit provides a measure of how our shareholder value creation converts over time into earnings and is therefore another important metric. Our Asia IFRS operating profit has grown by 13% on average since 2015. As with embedded value, the benefit of our product mix is to create resilient IFRS earnings, which are relatively insensitive to market conditions. 79% of our 2020 Asia insurance operating earnings were generated from margins we make from underwriting insurance risk, primarily mortality and morbidity. Growth in these profits will mainly be driven by growth in our H&P portfolio. Overall, for a growth business such as Prudential, IFRS earnings are a lagging indicator of the value we generate from writing new business. As an example, while our with-profits business makes a significant contribution to our total embedded value, the corresponding IFRS earnings are a very small proportion of our total earnings. This is because for our with-profits business, most of the shareholder profit is realized at the end of the policy term when policyholders receive their terminal bonuses, which creates a very long-dated IFRS profit profile. And that is why we continue to focus on EV as the key measure of value creation, while also producing growing earnings. This slide demonstrates the diversification in our Pan-Asia franchise. As you can see, our sales are broad-based across the 6 segments shown in the chart, which represent our 13 Asia Life markets as well as our nascent Africa markets. Our existing in-force portfolio is also very well diversified, both on an IFRS earnings basis, and on an embedded value basis. This diversification helps us to deliver consistent shareholder returns throughout market cycles. As I mentioned earlier, rigorous capital and balance sheet management is a key component of our capital management framework. The Hong Kong Insurance Authority is our group regulator, and officially designated Prudential as being subject to its new group-wide supervisory framework, or GWS framework, on the 14th of May. Our balance sheet is well positioned as we move on to the new GWS framework. Under our Local Capital Summation Method, or LCSM, we ended the first quarter with the shareholder cover ratio, excluding the U.S., of 331%. We anticipate this would increase by around 50 percentage points to 381% once our senior debt is grandfathered under the GWS regime, which is subject to confirmation by the HKIA. Our updated LCSM sensitivities are illustrated on the right-hand chart. These are shown on a pro forma basis, excluding the U.S., and show the resilience of our Asia balance sheet to severe market stresses. We want to ensure we are well positioned to take advantage of the Asia growth opportunities ahead of us. And as we have previously announced, we are considering a potential equity raise of $2.5 billion to $3 billion following the completion of the Jackson demerger in order to increase our financial flexibility. We are targeting 20% to 25% Moody's total leverage ratio over the medium term, and we have $2.25 billion of relatively high coupon debt, which will be past first call dates by the end of July. If we were to redeem this debt towards the end of this year or early next, annual interest costs would reduce by about $125 million per annum over that time. In addition to reducing debt servicing costs, as I highlighted at the prelims, we have reduced central costs by $180 million since 2018 and we expect to reduce them by a further $70 million by 2023. We will continue to review the timings of these further cost savings following the completion of the U.S. demerger. However, temporary restructuring costs remain elevated, mainly due to IFRS 17 implementation and the cost of aligning our core functions and processes to support growth. The positive long-term trends I've described are all evident in our results for the first quarter of this year, which we reported on May 13. Asia and Africa new business APE sales were up 14%, while new business profits were up 21% compared with the first quarter of 2020, reflecting our continued focus on the quality of sales. This growth was despite lower sales in Hong Kong, where ongoing border restrictions continue to limit severely cross-border business from China. Excluding Hong Kong, APE sales were up 35% and new business profit up 64%. And I'm pleased that we continue to build on the momentum established over the third and fourth quarters of 2020 with 2021 quarter 1 sales 4% above those in the fourth quarter of last year, despite a number of our markets continuing to experience significant COVID-related disruption. In the first quarter of 2021, our China joint-venture was our largest business in terms of APE sales and new business profit. Our multichannel model continues to perform well with all channels delivering growth. APE sales through our bank partners were 18% higher. Agency sales also grew at a high single-digit rate with 8 markets reporting year-on-year growth. We have continued the build-out of our digital capabilities led by Pulse, our health and wellness platform. APE sales generated through Pulse represented around 9% of our first quarter 2021 APE in the markets where Pulse is available. Our focus on quality is evident by the fact that regular premium sales were up double digit, health and protection sales were also up double digit, beating the sales levels achieved in every quarter last year. And customer retention held at 97% in the first quarter. Now Mike spoke earlier about the structural operations and the cultural transformation of Prudential over the past few years. All of this has supported our financial track record, with strong growth across our sales, earnings, cash and value metrics. The capital dynamics of the group remain distinctive to Prudential. We are allocating capital and reinvesting for growth. We are focused on the quality of the new business that we are adding year after year, which results in strong compounding capital generation supported by our strong balance sheet. And as we look to the future, we see large-scale new opportunities emerging. We will help customers get the most out of life, while at the same time, aiming to deliver high risk-adjusted returns for shareholders. In China, we have developed multiple ways of developing our large and growing Hong Kong and mainland businesses, which collectively deliver annual profits of over $1 billion. In India, there are opportunities to deepen participation in a market where there is a $16.5 trillion protection gap and to play a leading role in the expansion of the mutual fund investor base, which is expected to more than triple by 2030. In Southeast Asia, there are multiple opportunities to broaden what we offer to consumers, particularly in the 2 largest markets, Indonesia and Thailand. In health, there are more ways in which we can close the $1.8 trillion health and protection gap, while still maintaining our rigorous approach to capital allocation. In wealth, with judicious investment, Prudential and Eastspring brands have the right to win in the Asian savings market, which is forecast to grow at a CAGR of almost 12% between 2020 and 2025. Today, we have 17 million customers, but that means there is still over 4 billion people in our Asia and Africa markets who have yet to become our customers. Each of these people have health, wealth and protection needs that we can serve while delivering value to shareholders. Thank you very much for watching.

I'd now like to introduce our Q&A session, where we're being joined by Mike Wells, Nic Nicandrou, Mark FitzPatrick, James Turner and Ben Bulmer. [Operator Instructions] And with that, let's go now to our first question. It comes from Kailesh Mistry from HSBC. Kailesh asks us this, "Other than delivering double-digit EV per share growth and dividend growth in line with Asia cash generation, are there any other financial targets, for example, NBV, IFRS, OPAT, cash flow?" Mike Wells?

Well, I think, Kailesh, we've given today some indications of our views of where the structural growth is in the organization. And I don't want to -- I think the targets are effective in giving you a clear view of where we're going. But too many targets, I think, started defining the strategic optionality of the group. So I think we've given you clear indications of what we can and can't do per market. And some of those other metrics you're talking about are correlated highly to the forecast that we've given, I think, so far. So we're going to leave the targets we have in place. Again, highly confident in the growth of all of our metrics. And I think we've demonstrated over the last decade plus our ability to grow all these metrics in parallel, and that's one of the core capabilities of the group.

So let's go now to our next question. We have a live caller. It's Andrew Crean.

It's Andrew Crean for Autonomous. Questions I have are, firstly, there's a relatively slow monetization of value into cash each year, which I think is related to the proportion of with-profits business, which is back-end loaded. Could you say whether over the next 5 years, you expect an accelerated level of cash monetization as you change the product portfolio? And secondly, I think the importance of India has increased in terms of your perceptions. You only own 22% of the life business. Are there plans to increase that? And do you currently have much control over the business?

So Andrew, I'll start that, then I'll give it to Mark on the financial piece. I think on India, you've seen structural changes in monetary policy there, which we think long term has some impact on saving behavior. So historically, it was cash, gold, real estate and then the growth of unit-linked and other products. And I think the growth of the life business is clearly emerging and clearly underserved at this point in the market. So we continue to watch that space very carefully. From a structural point of view, to your question on ownership. Like many of the other things we do, it gives us opportunities that if there was a period of time when we thought that was appropriate to increase, we have that option. But that's also true of our CITIC joint venture. That's true of our -- some of our Takaful businesses, the value chain in Pulse. One of the unique things about Prudential is not only we have an ongoing effective growing business and growing back book, but we also have optionality that the firms don't have the same call on, if you will. Mark, do you want to talk about the metric question?

Sure. Andrew, so in terms of the element around the monetization. As you quite rightly say, with-profits is a very, very important component of that. And one of the things through the EV video and slides for today's session, you would have seen that 35% of the effective return to shareholder -- to holders, policyholders is effectively doing regular bonuses, internal bonuses, 65%. So it is massively back-end loaded in terms of where we are. So we've provided the monetization profile in the slides. We expect it to grow in line with cohorts of new business but really focusing on growing EV as a whole. And effectively, I think as we change our product mix, we'd expect to see that evolve over time, but not going to be able to commit to anything at this stage in terms of any acceleration. Effectively, new business investment that we make every year is effectively a use of our cash flow. And as I mentioned in the video snippet earlier on, for every $1 that we have invested, we've created $4 of new business profit.

Great. Thank you very much to Andrew Crean for your question. Let's move to our next caller, we're joined now by Farooq Hanif.

I hope you can hear me. This is Farooq Hanif from Credit Suisse. Firstly, on China. I noticed in the chart that you showed of China's new business by province group, the very, very early provinces that you entered into are seeing a decline in sales. And I just wondered if that's correct and what might be driving that. Secondly, on China, in terms of margin. It seems to me that what you're saying is that there could be further margin expansion from market share growth in some of the provinces as you move more towards agency but also you just grow volume. Are you expecting, therefore, this margin in China to grow even further? And last question is on Pulse. Do you have any evidence that Pulse is generating -- for the new customers, is generating greater penetration into customers that have normally not been customers of PRU? So if you could share maybe in Indonesia as an example.

Nic, do you want to address those, please?

Okay. Farooq, I didn't quite catch the first question. If you were -- if the question was around the development of APE between the various clusters, I mean, clearly, China was disrupted last year. So what drove the relative increase, whether you were looking at the early cohorts versus the late cohorts or the clusters within that, what drove that was the mix that's coming from each from bank or agency. Agency was more disrupted. So in those segments or those cohorts where bank is a bigger contributor, that gave a positive impact on the 2020 flows. And of course, as we are very new in some of the more recent provinces, those are -- continue to be on a growth path. So it's more to do with product mix within each cohort or within each cluster and more to do with the maturity, if you like, of the business that we have there. I mean your question on margin. Margin is always a function of the relative growth of channel. I've said before that the bank channel is predominantly 99% of what we sold in Q1 and last year was savings products -- regular, premium, long-tenured saving products. But clearly, they will never have the same margin as health and protection, which is an agency sold product. So it will depend on which channel they're coming from and also will depend on the mix within that channel. Is there further opportunity to increase it? Yes, there is. There are scale economies. The productivity of our agents in some of the more recent provinces and city entries will improve. And as they become more mature, more experienced, the productivity and product mix within that will improve. So there is -- yes, there is further runway there. On Pulse, it's just too early to say in our development of the tool, whether the loyalty of a customer coming in, be it in terms of length that they stay with us or indeed, whether the propensity to buy a second and a third product is just too early to say. These are hypotheses that we have, but we're only 21 months in. So we don't have enough information, certainly statistically valid information. Back to you, Mike.

And Farooq, the majority of the clients coming in to Pulse are new to Prudential, to the other part of your question. So that is expanding the households that we're reaching into.

Great. So thank you very much, Farooq, for your question. We're approaching the halfway point in this management live Q&A session. [Operator Instructions] We've got another question over here, and it comes from Dominic O'Mahony from BNP Paribas. Dominic asks you this, "Where is the PCA capital allocated between the geographies? Like many investors, I calculate the COE based on the weighted average COE by geographic segment building up from the local risk-free rate, and this varies considerably across your markets." That's a question from Dominic.

Mark, would you like to take that one, please?

Sure. So Dominic, there are many different ways in terms of which we look at our capital and at our return on capital. You would have seen in the additional segment information we gave with our prelims earlier this year in terms of the extra analysis around Asia, so you can expect to see a little bit more of that. And we gave that predominantly on an EV split as well as in IFRS. So in terms of the way that we ultimately look at capital, look at return of capital, EV is a very, very important lens to us. And you would have seen as well in terms of the way that we have changed our AIP and our LTIPs also, a greater focus in terms of EV. So I would point you in terms of the additional EV disclosure that we've provided, in terms of the segments and in terms of the element of the capital and the operating profitability and performance of the main segments. And as I said, during the course of the half year and the full year, we'll be providing further information and further disclosure around that.

So thank you very much to Dominic for your question. We've got a live caller coming in now, and it's Greig Paterson.

Can you hear me? It's Greig Paterson from KBW.

Yes, Greig. We can hear you.

Three questions. One is, Mark, you referenced your embedded value basis. I was wondering how you think your basis differs from the other Asian insurers, question one. Second one is, Nic, in terms of the Pulse rollout, the 9% in the first quarter. Can you tell us, just so we can get a feel where it's been rolled out completely and where it hasn't, which countries were contributing the most to the 9% in the first quarter? And then in terms of Pulse margins, if I remember, if my memory is correct, Pulse margins -- Pulse products typically have lower margin. Does that mean we're going to get margin compression as you roll out Pulse further into Asia and Africa?

So Mark, do you want to start, please? Nic, on the Pulse. And then maybe, Ben, do you want to talk about the incremental effect of Pulse on margin?

So Greig, thanks for your question. Actually, Ben did a video and some slides, which were uploaded earlier today, which -- but you may not yet have seen, which actually talks to our embedded value in a little bit more color. It gives a little bit of color in terms of some of the cash flows by some of the major product sets as well for some of the main markets. That will hopefully give you a better sense of our embedded value. But net-net, we believe embedded value is a very robust, transparent methodology, which was introduced to address the shortcomings in traditional embedded value. We have explicit allowance for the time value of options and guarantees. It's very much a bottom-up approach that really reflects the product by product and the business and product mix of the products that we sell. And it's also very active base, which means that the interest rates at any moment in time that we draw our balance sheet and that we report on, we presume that those rates will persist into the future. So there's no kind of [ lessons of ] mean reversion or anything like that. So we believe it's a robust process. We believe it's a very thorough, it's a very clearly understood process and a very clearly understood metric that we report against. But I think when you have a look at the video and you get a chance to have a look at some of the extra information that Ben and the team have shared in that video today, I'm very happy to pick up any further questions you may have.

Great. So let's jump down to our next question. We have -- sorry [indiscernible].

Sorry, Nic, do you want to talk about the success for a second in Pulse in the first quarter? And then, Ben, I think on margin were also part of Greig's questions.

Yes. You saw -- Greig, you saw the increase. But in terms of the user base, greater number of registrations, importantly, more engagement mechanisms. And as I said in the -- in my speech earlier, it's really a -- what Pulse is giving us is the ability to capture engagement and behavioral data, 20 gigabytes of data, we roughly had about -- we roughly have about 280 pieces of data per user once they're a registrant, once they engage with a number of the activities. So we're trying to be a little more selective about the leads that we pass down. And we're looking to improve, if you like, the conversion ratio, and we have seen an improvement in that. At the same time, we're trying to bring more agents, unique agents that haven't yet used -- have had a referral, a Pulse referral come to that in order to fulfill. So again, relative to the 34,000 agents last year, 15,000 just in the first quarter this year. And we're now trying to spread it across more of the market. So the contribution to your question was predominantly Hong Kong, Indonesia and Malaysia. There were small numbers from elsewhere, but there's a lot more to come from everywhere. Ben, over to you on the question on margin.

Thanks, Nic. Greig, I'll be brief. The majority of sales we've seen to date through Pulse are online to off-line sales. So the margins really reflect those of the existing product set. and the agency margins in the countries Nic's mentioned. So to get a feel for that, you can reference the margins of Hong Kong, Indonesia and Malaysia. Back to you, Mike.

Great. So we will proceed now with the next question. We have a caller, and it is Ming Zhu.

This is Ming Zhu from Panmure Gordon. Three questions, please. First question is, could you just give some color in terms of the -- you had a good Q1. But since Q1, some of your Asian countries have gone back into a full lockdown or increased restrictions. What's your outlook in terms of the remaining of the year? And have you done any preparations ahead for such things happen? And then the second question, you talked about digitalization. And when would you see sort of the really full benefits coming through across Asia and Africa? And the third question, has -- is Asia also having a sort of rising inflation problem as outside of Asia? And how have you actually priced or reserved accordingly for your health and protection product?

So Ming, thank you for those questions. The -- on the health and protection products, we have the ability to reprice, again, subject to the local market competitive and also local market regulatory issues in some cases. So that's embedded in the product designs. We also have product designs where the consumer benefits from low claims in certain markets. So they tend to be, to a great degree, self-managing of some of the inflationary costs related to them because we stay aligned with the consumers. But I think on speed to market, when markets are closed. Nic, do you want to give some color on that? And I think, Ming, on the digitalization part of your question, the benefits are now. I mean I hope the takeaway from the meetings is that this is not a ambition for Prudential. This is where we are in various markets. We've been working on reducing our marginal costs. We've been reducing -- investing heavily and to make sure that we capture the benefits of scale. And we have more work to do on that. And I think if we were here 10 years from now, we'll still have more work to do on that to be clear because there's new technologies and new ways to get to clients and new efficiencies that we always want to be evolving into the business. But we are seeing incrementally improvements in just about every area of the business. And I think the biggest thing that I've seen in 26 years here now is the group's ability to share across markets. So we don't have to recreate things over and over again, even in-house. It's really creating an adoption rate that we've just not had historically. It's -- I think our management team down to the very local level, in our most entry-level operational roles now sees the benefit of this. So there's a real alignment in how people are addressing it. But Nic, do you want to talk a bit about our ability to deal with an open or closed market and some of the challenges we see as COVID comes in and out of our Asian markets?

Will do, Mike. I mean we put some information on the website to update you using our usual chart, the chart that we've used before on the level of opening up or re-lockdown in many of the markets. It is true that over the last 5, 6 weeks, there has been more severe -- another spike, if you like, in a number of these markets. And even since we put up the chart last Friday, we saw that Malaysia has gone into full lockdown for the next 2 weeks. So Taiwan is worse than it was than during Q1. Malaysia is on the list, Vietnam, Thailand. So those are some of the markets, Singapore, Philippines and Indonesia have been on a constant up rising curve. So the only markets which are completely normal at the moment are China and Hong Kong, other than for the border. Inevitably, there will be some disruption, but we're better equipped than we were this time last year. In fact, than at any point in the course of last -- in the course of 2020. We now have the capability to use virtual technology to do remote sales. In fact, the remote sales through both channels, both banks and the agency, worth 30% for agency, 33% for banks, they were higher in the first quarter than what we saw in the full year last year. We have the ability to access and engage with customers through Pulse in a way that we didn't a year ago as we were still launching many of the products, many of the services in those markets. And we're just used to the rhythm of doing this now. So that will act as a mitigant. All these effects will be short-lived. And really what today is about and really what all the videos were about is showcasing the new capabilities that we're bringing online that will stand the test of time. So we have more tools to face into the challenging environment through all the peaks and troughs. And fundamentally, we're constructing a much more robust and a stronger business.

And Ming, a lot of those tools were developed last year during a much more severe lockdown for us across the region, almost 100% of our employees locked down. So from a cultural point of view, to highlight earlier, you're seeing tremendous productivity regardless of the office structure we're working under.

Great. So let's move on to our next question. And before we do, a very gentle reminder that we have dedicated time coming up in our Markets & Capabilities Panels, where you'll also be able to put your questions specifically on Pulse. So that's all still coming up ahead, and we'll have time for you for that. I think we've got time here in this management Q&A for possibly one more question. And panelists, this is a 3-part question coming from Ashik Musaddi. So Ashik says, "May I ask 3 questions? This is the first one. Indonesia has very high protection and UL element in its products, but it has very low EV, whereas Hong Kong has very, very high EV. How do we think about the difference between the two?" That's the first question. The second question from Ashik is this, "Can you please provide examples of the products you have in Hong Kong and highlight what drives the such high H&P EV from Hong Kong?" And the third question from Ashik is this, "How are you thinking about India now given you haven't increased your stake? Do you want to sell down out of India? Or do you want to maintain/increase?" Mike?

So we've got seconds to do this one, Ashik. So apologies for the fast answer. On India, we don't comment on strategic M&A, which sell down or an increase in our stake would be. But obviously, it's an opportunity set that we have that's unique to us versus peers. Nic, did you want to quickly comment on the product differential and the treatment of them?

Okay. On the product differential. In the end, whether it's a unit-linked chassis or a with-profit chassis, it's a mechanism to attach riders and offer protection to customers whole of life. It's just that the riders in Hong Kong, both in terms of sophistication, both in terms of case size, are much higher than they are in Indonesia. So case size and richness of cover is much higher. And that really is what accounts for the difference in margin. Multiple products in Hong Kong as we've been expanding our product range from beyond educational savings with protection riders, to stand-alone medical, stand-alone critical illness. Now we have an annuity product. So we are spanning the entire need analysis. But Lilian and Derek will join us in the next session, so perhaps we have an opportunity to expand further on that answer.

Great. I think we've covered that question from Ashik. Ashik, thanks very much for asking that. That wraps up our panel. So thank you for your questions. And we also thank Mike, Mark, Nic, James and Ben for being here with us. There are going to be several opportunities through this Investor Day event for you to ask questions during the course of our time together, and we're going to come back on this later. But first, we're going to take a very quick break, and we ask you to be back at your monitors at 7:45 p.m. Hong Kong time. That's 45 minutes past the hour where you are. We're very grateful, and we'll see you shortly. [Break]

Welcome back to our event. You just heard Mike and Mark talk about how we have been transforming Prudential structurally, operationally and culturally. I walked you through how we are continuing this work through our strategic themes of delivering, digitizing and humanizing. We would now like to hear from you. This is our first of 2 panels, which is focused on markets and linked to the theme of delivery. The second panel will delve into capabilities, which link to the themes of digitizing and humanizing. Before we get into your questions on markets, I would like to take a few minutes to frame the discussion and to introduce the panel members. I will briefly touch on 3 areas: first, our business in China and Hong Kong; second, our joint ventures in India; and third, our markets in Southeast Asia and Africa. So firstly, on China. Having steadily and deliberately gained access to most of this market, our imperative has become one of execution. This involves going deeper where we are already present, expanding agency, adding new relationships and continuing to broaden our product offering. As you would have seen in our video, our approach is aligned with the city cluster model in China's 14th 5-year plan, which focuses on increasing the economic potential of the 3 areas around Beijing, Shanghai and the Greater Bay Area. Lilian Ng leads our engagement in China, chairs the Board in Hong Kong and oversees the transferring of solutions between all our markets as they relate to agency, partnership distribution and products. She will join Derek Yung, CEO of Hong Kong, in taking your questions on our China and Hong Kong businesses as well as how we're planning to leverage synergies between Hong Kong and the broader Greater Bay Area as cross-border sales are further liberalized. Secondly, in India, our Life JV has sizable growth ambitions as evidenced by its objective to double the 2019 NBP in 3 to 4 years. But the opportunities extend beyond this time frame given low protection coverage in this market and the absence of retirement savings, areas in which Prudential can provide considerable expertise. The India Asset Management business has scaled in a proven track record of innovation, having led the market in hybrid strategies and having been amongst the first to embrace digital distribution. NS Kannan is the CEO of ICICI Prudential Life. And Nimesh Shah is the CEO of ICICI Prudential Asset Management Company. They can take questions on how both companies are poised for growth as well as the enabling role that Prudential plays in the partnership. Thirdly, on Southeast Asia, as Mike said, we have the opportunity to broaden our offerings, enhance our distribution and deliver personalized solutions to a broader set of customer segments, particularly in the largest economies. Indonesia is a significant market for us here, and Jens Reisch, our local CEO, can provide insights on the transformation of this business. He has overseen the upgrading of agency capabilities, the introduction of new digital routes to market and the expansion of our product set that now appeals to broader segments, including mid-income and SMEs. In Thailand, we have invested USD 1.2 billion in the last few years, giving us the means to reach a top 2 position in the fast-growing life business bank channel and a top 3 position in asset management. Robin Spencer is the CEO in Thailand, and he can speak to our expanding partnerships as well as the holistic propositions we will offer, including joint offerings between our life and asset management businesses. Wilf Blackburn was appointed as regional CEO, with a clear remit to unlock untapped potential in our smaller growth markets. He can field questions on Vietnam, where he was once a CEO, and on the Philippines, where we have reached the #1 ranking in 2020, and on Africa, where we have built 8 businesses over the last 7 years. In fact, Wilf is joining us today from Lagos in Nigeria. So without further ado, let us take your questions.

Welcome back to our studio, Nic and everyone on screen in this panel discussion. May I suggest that we jump straight into our Q&A? [Operator Instructions] And let's go to our first question. It's been an online question from Blair Stewart from Bank of America. Blair asks the panel this, "How can you improve H&P sales through banks in Thailand which have proved challenging in the past? What has changed?"

Thank you, Blair, for your question. I will ask Robin Spencer to address it.

Blair, thanks for the question. In Thailand, we've got 2 key health and protection segments. The first is our product life book, where, in particular, TTB have a really strong business. And I expect to see improvement from that as the economy strengthens after COVID. Obviously, I think your question largely is around the individual health and protection coverage, where although we have seen some improvement in 2020 versus last year with about a 6% improvement from 11% to 17%, I think there's definitely room for improvement and to penetrate the customer segments within the bank. I think at the heart of your question, there's probably 2 or 3 areas that we absolutely need to dial up what's changed. And it comes down to alignment of strategy, alignment of rewards and making sure the bank sellers truly believe in the products that they're selling. So let me just cover those off quickly. Hopefully, you have an opportunity of watching the Thai video, where actually the CEO of TTB shares his own view about the market and the opportunities. And one of those key areas is actually health care. They have, both from a social as well as commercial perspective, a real desire to drive the health business. The second thing is the financial alignment. Both the TTB and the UOB contracts recently signed, both have meaningful incentives to reward the banks and its sellers for higher health and protection production. From an operational perspective, as we've entered into 2021, we've actually established a specialist health and protection unit. We've deployed that into the field. Their job is to not only help the bank sellers to understand the products better, but also to -- from a sales advisory perspective, to help with large case support. And we're also making it easier for our bank sellers and customers by simplifying the underwriting. Underwriting journey, reducing the number of medical questions, increasing GIO products and extending where possible the sum assured for our high net worth clients in particular. This has all been done in the last 9 months. A couple of final areas I'll just touch on. The customers and sellers have to be absolutely convinced about our ability to serve the customers. So there's an awful lot of work going into ensuring that our claims handling is slicker. It's down from 4.5 days to 2.5 days in 2020. And now 65% of all of our claims reimbursement are cashless. So I think there's one other area that I think is critical that hopefully, again, you have the opportunity to watch on the video. We're really focused on the different customer segments here in Thailand and really trying to build products which are right for the high net worth, the affluent, the middle income and the mass market. I'd say we've done a pretty good job on high net worth and affluent. I'd say there's more to do in the middle income and mass segments, particularly as those are the segments that we're really wanting to penetrate by using new digital means. So Blair, unfortunately, no silver bullet, but a lot of things going on to drive it up. And we hope to somewhere in the region of double the health and protection penetration over the next 3 to 5 years.

Thanks very much, Blair, for your question. We've got another question coming in this time from Kailesh Mistry at HSBC. Kailesh asks the panel this, "Thank you for the additional detail on the operations. There's interesting information on the business split by clusters. But how is NBP split between these? That is, Beijing, Shanghai, Greater Bay Area and others?"

Kailesh, I'll take that question, if I may. So yes, we've given you the split by reference to gross written premiums. Clearly, that reflects not only the new business that we write, but also the in-force business. The contribution from in-force tends to be bigger from the places like Beijing and GBA, where we've been longer. So the NBP split will be correlated to APE, and it will be equal weighted between GBA, Beijing on the one hand and Shanghai and the rest of China on the other hand. Next question?

Great. Let's go to the next one. Thanks very much to Kailesh for that. We have a question now from Greig Paterson. Nic, Greig asks this, "African margin, lower than other countries, why is this?"

Thank you, Greig. Over to you, Wilf.

Yes. Thanks for the question, Greig. I mean, firstly, we're enormously excited about the prospects for Africa over the medium to long term. To your question about margins, we do see that Africa displays many of the characteristics that we've experienced in Asia and maybe in a more extreme form. So the very low insurance penetration rate. Today, it's about half that in Africa than it is in Asia. On the other hand, the rapidly growing population. And it will -- over the next 15 years, will grow at double the rate in Africa as Asia. There's a huge population. It's a young -- very young population in Africa. It's aging. The middle class is growing, and it's urbanizing. And so what we're seeing is the -- many of the characteristics that have played out in Asia will also play out in Africa. We've been investing, as you've seen in the video, in 8 markets over the last few years with accessing around 427 million people now in the 8 countries, that's around 20% of the population. And -- but what we're seeing is many of the characteristics, the needs of people are the same. But to your point about margins, in respect of savings, yes, we've seen a big emphasis on savings traditionally, but that's shifting more into the health and protection space where we see the higher margins. Even from last year to this year, we've gone from less than half to more than half of our portfolio -- of our APE coming from savings. And with that, although our sales have quadrupled in the last 4 years, the NBP has grown by a factor of 6x, consistent with the move towards the higher margins that we're experiencing coming through in Africa. It's not a function of distribution mix. Particularly in Africa, we're fairly broadly based, a mix, 1/3, 1/3, 1/3 between the traditional agency channels and another 1/3 in bancassurance and 1/3 more in the new forms of distribution, including the SME sector. Over time, the market will grow. The working population -- the working age population in Africa represents around 15% of that on the planet. Today, it will be 1/4 by the middle of the century and more than 40% by the end of the century. And what we're also seeing is that the millennials are growing in number very, very fast. And they're very attracted to the [indiscernible] digitally attracted to the [ products ] with the higher margins.

Thank you, Wilf. So just to reiterate what Wilf said, it's a function of mix. 30% of the business is group. That's contributing to the margin, the overall margin being lower. And of course, the duration of the contracts that we write in Africa today tend to be shorter than what you see in Asia. Asia, a lot of the products are whole of life. But it will improve as we push a greater -- higher -- as Wilf said, higher mix of health and protection, longer savings products and as the individual part of the business expands relative to group. James?

Thank you very much, Nic, and thank you also to Greig for your question. Panelists, your next question comes from Farooq Hanif, and it's on Indonesia. "Indonesia," Farooq says, "has recently disappointed in terms of sales growth. What are the products and potential inorganic strategy that could change this?"

Thank you, Farooq, for your question. Jens, over to you.

Thanks for the question, Farooq. Yes, in Indonesia, we have diversified in the past years very much our offerings to customers regarding new and more bite-sized offerings not only in this pandemic, but actually already prior to that. And we have diversified our channels. I think to those of you who know Indonesia and Prudential Indonesia, we have been known and we are a leading company in agency, in investment link. And that has, I think, now a bit diversified that we also have traditional products. In this first quarter, we are now ranked #2 for traditional products where we never before actually have been very strong. But we see a demand and we see, I think, clearly, a need for protection products, which we offer in a more bite size, whether it's digital, whether it's stand-alone protections. And we have also, I think, digitized our way of fulfilling, way of working, way of servicing, way of selling. We hope, of course -- 2019, I have to say, was a great year where we grow faster than the market. And we saw, I think, great fruits. Of course, COVID, since the Q1 of last year, has impacted Indonesia. It was said, the country is still closed. We are still seeing since Q2 last year a minus GDP. Also the market was last year minus Q1, sees some recovery. But we will try, of course, to further, I think, utilize all of our innovations of the last years to basically harvest the opportunities. About strategic focus areas, it's mainly bancassurance where we are underrepresented. And I think we have recognized this. I think Mike and also Nic has mentioned this as potential strategic areas, and we are actively working to see of whether there are market opportunities for new partnerships, for new collaborations, whether it's in whether it's Shariah, whether it's in conventional, I think there are some opportunities and the bancassurance part is the most of need to basically catch up with the market share also of that line of business. Maybe back to you, Nic, or if you want to add anything.

No. Thank you, Jens. Let's go, James, to the next question.

Well, Nic, we have another question on Indonesia. And this time, it comes from Ashik Musaddi. Ashik asks you this, "Indonesia is key for PRU as it's one of the largest businesses in Asia, but PRU hasn't grown headline premiums in Indonesia for the past 4 to 5 years. What's the reason for that? And when is that expected to change?"

Thank you, Ashik. I think we addressed -- Jens addressed a lot of the points or covered a lot of the points in response to that question. I mean the reason it happened is that we were over-reliant in -- between 2010 and 2015 in agency linked. That segment of the market didn't -- wasn't growing. In fact, it was shrinking relative to bank, relative to traditional products, relative to group, group insurance. In 2017, '18 when we did a review, we decided to broaden to cover in all these areas. Clearly on banks, as Jens said, we need to find a relationship with a mass market bank when one of these comes up for renewal, if possible. But in all the other areas, we've invested organically. We've improved our link proposition. We've added traditional products. And you saw the results of that or part of that in 2019, and then COVID hit. But we continue to retool the business. And whilst 2021 will probably be a transition year in Indonesia because large population and the rate of vaccination is fast, but we want -- the critical mass in terms of vaccination won't be achieved until later this year, perhaps early next year. But once we get through this year, the business is in a much stronger position. Once normality, whatever new normal looks like, is in a much better position to fly from there and the opportunities are immense in that market on a number of dimensions, then we still retain all our strengths and have added to them. So we are very optimistic about the rebound, as I said, as the country gets past the point of having dealt with COVID. James?

Thank you very much, Nic. Well, that question from Ashik on Indonesia gives us a quick reminder that you can dial in with your questions. So please do that. We've got some more time left in this Markets panel. And of course, you can enter your questions through the Q&A function on the event website. That's what Abid Hussain has done. Abid has submitted a question online and this time, it's on Hong Kong/China. Abid asks this, "Can you explain the continuing motivation of Mainland visitors to Hong Kong for the purpose of buying insurance policies and accessing private health care? What will happen when the Mainland catches up on health provisions?"

Okay. Thank you for that question, Abid. Derek, over to you on the motivation of the Mainland Chinese to buy in Hong Kong. And then maybe if you can hand off to Lilian to explain about some of the differences, if you like, between what a consumer in China can buy locally versus in Hong Kong and how do we stay ahead of any leveling up of the offering.

Yes. Thank you, Nic. Thank you, Abid, for the question. And in fact, we have been asked of this particular area for many times. People coming over to Hong Kong to buy for a number of reasons. First, they can diversify their asset class, multicurrency and the so-called -- the services, professional services, be it the selling or the aftersales service that a Hong Kong agent can provide. And also our system in Hong Kong, that has also attract the people coming over to buy, not to mention last but not least is the claim, the experience that they can enjoy in Hong Kong. And as Lilian pointed out in the video, the MCV customer, they are really focusing on 2 particular areas: one is the health care; the second one is the child care. In fact, the quality health care management in Hong Kong is still in the upper hand versus China. Not only versus China, but in fact, it's the best in class in the world right now. So a lot of people, they are coming over to enjoy the so-called health care management in Hong Kong. And with the H&P product that we can provide total solutions for them and to support their expenses in spending the time in this quality health care management system. Regarding the child kind of care, I think in Hong Kong, a lot of our products, they can support the so-called education fund for the children to study overseas. And not to mention, I think, about 3 days ago, the Chinese government has announced the 3-child policy. That I believe will further push or drive the demand for health care. So through the information, the platform in Hong Kong and organized kind of seminar by PHKL, people can come over to acquire those kind of information for their kids studying overseas and backed up by our product. I think that there is a huge opportunity in these particular 2 areas. So and maybe I'll pass it over to Lilian whether you can supplement on the demand from the MCV customers.

Okay. Thank you very much, Derek. I think there's been a lot of cross-collaboration or cross-sharing, I think, amongst the 2 insurance industry on the health and protection-related products and provisions. And to an extent, you're right, I think our Mainland Chinese insurers are constantly improving and innovating on the health-related insurance policies. But what will continue to attract Mainland Chinese visitors into Hong Kong to purchase the Hong Kong version is that access to what is still be seen as world-class quality health management care that I think Derek just described. So it's not so much the insurance provisions that has -- that is attracting MCV customers to go across to purchase, but I think it's more the health care quality that actually is available in Hong Kong. Now obviously, there's a lot of catching up in China. And obviously, as a Hong Kong health management, I think we need to continue to improve and get access, create value-added services for customer willing to come over.

Thank you, Lilian. If I may add, if we look at the average case size for a critical illness product in China, it's around the CNY 6,000 mark versus the average case size of a critical illness product in Hong Kong, it's around the CNY 20,000 mark. Now this tells you 2 things. It speaks to the one hand, perhaps the more sophistication of the product in Hong Kong relative to China. And it also speaks to the fact that the high end -- the high net worth individuals within China, for all the reasons that both Derek and Lilian covered, have a preference to buy that product in Hong Kong. So that gives you some extra color over and above what my colleagues have added. James?

Nic, may we remain with China, please, because Farooq Hanif has submitted another question online on this particular part of our planet. Farooq asks you this, "Can you remind us of further potential province/regional growth potential in China? Strikes me that each province in China has the same GDP as an individual country outside of China!"

Thank you, Farooq, for your question. Lilian, over to you.

Obviously, China is a huge country, as we know. I mean our presence in CPL have excess to over 80% of the GDP -- over 80% and over 1 billion population. But I think, as you mentioned, each one -- each province is unique. And so our strategy is to make sure we optimize our strategy -- our go-to-market strategy in each of the province that makes sense. And there's a lot of room. I mean the latest stat is the health and protection gap in China is USD 800 billion. So there's many runway to go. So that's why when we described, as you see in the video, is how we actually have shaped our different strategy depending on the clusters, whether it's Beijing cluster focusing more on the high net worth, using more protection-type products and to Shanghai where it's more the savvy business owner based -- doing more of the savings, wealth management platform, as well as I think it's the GBA area where we believe is where the opportunity, especially for the younger generation. So China just released their recent census, the 2020 census. And it demonstrated a lot the useful populations or workforce is actually moving to the Eastern provinces. So the net gain into the Eastern provinces where the GBA areas are is actually 2, 3 points. I mean 2, 3 points in China, it's a lot of people and a lot of populations. So yes, to your point, I think we are in there. So that's why our multi-distribution platform, whether it's agency bancassurance and direct and also focus on the SME are all there, depending on where our customers are.

Thank you, Lilian, for that. I mean our focus as we move forward, just to add to Lilian's comments, is not about coloring in the map, maybe we will 1 or 2 more provinces, but it's about going deeper where we currently are. And a lot of the growth that you've seen over the last 4 or 5 years has been -- has come from penetrating further where we were. We added 33 cities in the last 4 years alone. And we've added 20 new bank relationships across the provinces where we are in the last 4 or 5 years alone, and of course, added more agents and improved the productivity. So going deeper is really the priority from here. And of course, the 3-cluster strategy also inferred that 60% to 80% of the economic growth over the next 15 years is going to come predominantly from those areas. So we will follow the money in China, and yes, expand in anticipation of what may come from those additional provinces in the future. James, over to the next question.

So Nic, we are at roughly the midway point in this session. So investors, please keep your questions coming in through the dial-in function or by writing your questions in with a focus on the markets' panel or panelists. Panelists, we've got another question online and it's this, "Thanks for the details on customer segments across many markets. In Indonesia, you provided an estimate of market share in HNW/affluent/mass-market segment. I wonder if you've done an analysis on your NBP or profit breakdown by customer segment. What is it today? And how would it evolve?"

Okay. Jens, do you want to have a go at answering this question? So 17% we said is our market share of high net worth, around 14% for mass, 2% for group. Maybe some directional color, please?

Yes. Thanks for the question. I mean Indonesia, traditionally, we have had through agents and also through our banks a fairly strong foothold in the upper market, but it has been largely served through our protection offerings where we are leading in Indonesia, whether it's health, critical illness or protection. There is a big, at the moment, opportunity which is also on the investment side for high net worth. We have just launched not long ago, Prestige by Prudential, which is our offering tailored and designed for our best customers. At the moment, we already identified 3,000 mostly in banks, but also in agency. And I think the other opportunity which is highlighted is on the SME segment. We, I think, have the strongest leading brand. We have the leading distribution. And I think we now are active since 1.5 years to also offer employee benefit. We call it Business for Pulse, our offering basically for SMEs in Indonesia. 64 million SMEs employing 121 million people, it's the backbone of the economy with 60% share and it's underserved. And I think here, we have the unique opportunity with our agents being present in 150 cities, but we have a fully actually now digital offering also in SME. So of course, margin is going to be different by various segments. And it's at the end, of course, adding up of different offerings to different segments. But most importantly, I think we have diversified and we are active in all the segments, yes.

Thank you for that, Jens. I mean, clearly, to express our -- I mean, we know our NBP by segment. To express it as a percentage of the market, we need market information and that's not readily available. But the profitability of what we do should be higher than the market because we concentrate on the high-quality end of that market. Nearly 3/4 of the APE that we write is protection-oriented. Not many of the players in the industry do that. And a very high proportion, depending on the quarter or the year in the high 80s, 90% tends to be regular premium business. The vast majority of the market tends to be bank-driven single premium business, which is lower profitability. So overall, I would expect our share of the value pool on the sales that we make each year to be more than our share of APE. Next question, James.

Nic, may we speak about India next because we have a question that's been submitted by Farooq Hanif. Farooq says this, "India is a fairly competitive market, and I believe the market leader, LIC, will be listing soon. What gives you confidence that you can widen the H&P ownership in India and address what has historically been a weak market?"

Thank you, Farooq, for your question. Kannan, please, if you could address it.

Thank you. Thank you, Nic, and thank you very much, Farooq, for your question. You're absolutely right, LIC is the dominant player in the market even today. After 20 years of liberalization of the sector, they have about 40% market share. But I just wanted to assure you that even in a very highly competitive 24-player market, we have a sum assured market share, which ultimately talks about how much of the insurance element we have sold to the customers, of 12.5%. And we are the market leaders among the private players, second only to LIC. So that's how we have been able to build this franchise. So yes, LIC is a dominant player, very well-known household brand name. But we have been competing in this market for 20 years with the leadership in sum assured market share among the private players. You alluded to LIC listing soon. Yes, that's what the government has announced. But we see it as a positive move because the insurance sector will get researched even more. The transparency will become even more. And it is good for everybody is what we feel. And more investors, more analysts will cover the sector, which is good for everyone including us. You talked about H&P specifically. Here, we are proud of the fact that we are the market leaders in retail protection business in the country with LIC and all the other players operating. There are only about 7 players who are very strong in this segment because, as you know, it requires very strong underwriting capabilities, good reinsurance backup and also investment for the future. So -- and capital. So these are the elements, which very few players can really write a check today in the market. So that competition is confined to about 7, 8 players. We believe that we are the pioneers in that market. And to combine the 2 questions, I would only say that LIC has so far been dominating in the savings business, whereas we are the market leaders in the retail protection business. Currently, we are 16% of our product mix in the form of protection, which about 3 years back, it was just about 5%. And I have articulated in our video on what our strategy has been in terms of the product mix, which has led to expansion of our VNB by 32% per annum in the last 5 years. And I believe that we can, in the medium term, get to about 20% broadly in terms of a protection market -- protection product mix. Currently, given the COVID environment, there are supply constraints in terms of inability to do the medical examinations and so on. But given the under-penetration, which Nic talked about, $16 trillion to $18 trillion of under-penetration in protection, and the fact that we are the market leaders in retail protection, we think there is a lot of runway to move the protection further in our product mix. I hope that answers your question, Farooq. Let me hand it back to Nic. Thank you.

Over to you, James.

So Nic, thanks for that and to Farooq for your question. We have another question, it comes from Larissa Van Deventer. And Larissa asks the panelists this, "How do you see your growth trajectory in Africa? And how meaningful can it become within the greater Prudential? Is your main focus on organic growth? Or do you plan to enter into partnership?" She says. "Which countries and products do you consider to be most promising?"

Wilf, I think we've reconnected with you. Over to you, please.

Thanks, Nic. And thanks again for the question, Larissa. Yes, we do see long-term potential for us in Africa. As I mentioned, the demographic trends, the population trends, the rapidly aging population that will happen all bodes very, very well for the future for Prudential in Asia. The -- we're addressing the opportunities in several different ways. In some of the markets, we've come in and we've bought small companies and we've invested the Prudential know-how capability experience in those and we've grown organically with the market. Ghana would be a good example. That was our first entry 7 years ago. We bought a company with a 1% market share, ranking #15. We now have an 8% market share, ranking #4 in the market. And there have been other markets where we see similar opportunity to grow and to shape the market. There are some other markets where we see that partnering is the best way to grow with the market. A good example of that would be in Nigeria. And of course, Nigeria is a huge market. It's seventh most populous country in the world today and already a large market. So there, we've partnered with the largest bank, Zenith Bank, and we've been able to combine our capabilities with their deep know-how and their insights on their customers and grow very rapidly. I think you saw, Jim, our Chairman, in the video talk about how we've moved over the past couple of years from being in 10 states in Africa to now being in 36. That's one of our fastest-growing businesses. We've achieved this through partnering. Last year, we grew at around 71% and it now represents around 35% of our markets. So it will be a combination of different approaches: some partnering, some greenfields and some acquisitions as we've demonstrated in the past. The markets we're in today give us access to about 30% of the population. But there are still many opportunities ahead to grow within our existing markets and to enter new markets. And of course, we'll apply our normal strategic criteria to assessing which markets to go in. Larissa, in respect of your question about the products, we're seeing many similar characteristics to Asia. People have the savings needs. They're investing increasingly for the long term and also their protection needs. And that's been, of course, highlighted and become more evident over the past year. In Asia, we're finding that there's a huge amount of traction with Pulse, which will be operational and live in all of our African markets by the end of the year. It's currently in 6. And so we're seeing these digitally savvy consumers interested in the health, interested therefore in the protection. So we're seeing just as we've seen in Asia, opportunities for us both in the savings and the protection space, particularly the health protection space, Larissa.

Yes. Thank you, Wilf. Larissa, it's an opportunity we can't ignore. Many similarities with how we started in Asia, and we're reaping the rewards of investments that our predecessors have made. So it's -- when it will become meaningful remains to be seen. But we're committed to the continent. Thank you for your question. James, over to the next one, please.

Thank you, again, Larissa. And panelists, let's return to the subject of India, there's a question online from Trevor Moss. Trevor asks, "You described India as very far behind in terms of protection gap and also nowhere when it comes to retirement savings. How quickly might we hope it could catch up? Is there a regulatory/political push towards this direction?"

Okay. Thank you for that question. Kannan, back to you. And then if you can hand off to Nimesh as well, the role that the asset management sector can play in supporting the retirement solution.

Thank you. Thank you, Nic, and thank you, Trevor, for this question. You're absolutely right that when it comes to protection, it is a very under-penetrated market. Just to put some numbers to this under-penetration. Based on our estimates, only 10% of the addressable population is covered today for protection. And if you really look at the protection as a percentage of GDP, that is a sum assured of protection policies, pure term policies as a percentage of GDP, it's only about 19% today. If you look at some of our peers in Asia, it will be probably 150%. So there is a huge under-penetration and a long leeway in terms of growth in this business. So yes, there are a lot of steps which are being taken, not only by the government and the regulator, but also from the company's perspective in terms of trying to increase the penetration. But from your perspective as well as a company, from our perspective, it's suffice to say that it is a multi-decade opportunity. I believe that in the medium term of this multi-decade opportunity, it will grow at least a double of the GDP growth rate, nominal GDP growth rate, in the country. You asked about the question about regulators. On their path, our regulators are completely focused on increasing the penetration, I just wanted to assure you. In every conversation we have with the regulators, they talk about growth and under-penetration. So it's a very refreshing conversations we have had with them. They keep asking us proactively on what measures they should take to increase the penetration. And more recently, they have also asked the companies to introduce standardized products, standard terms and conditions, simple terms and conditions so that the mass market can start buying protection. So that is the move coming from the regulator. On the government side, a few years back, we introduced what is called the Prime Minister's scheme, insurance scheme, very low ticket policies. We ensure coverage of protection. So there is a good amount of tailwind coming from the regulators as well as the government to push this agenda forward. The last point on protection I want to also talk about is this pandemic has only increased our awareness about the under-penetration and the need to buy. So in the last year, in the initial periods of pandemic, we could see a huge increase in terms of the log-in. As I answered a previous question, there have been some delays in terms of execution because of the physical constraints on the supply side. But I want to assure you that the pandemic has only accelerated the process of buying protection. Finally, on the retirement, the good news is that it is under-penetrated. The good news is also that, recently, a few years back, the government has introduced what is called the National Pension System to make sure that they can expand the penetration of retirement savings in the country. We have a 100% owned subsidiary in this space managing the funds from the private sector, and more recently, it has been opened up for the government sector as well of these funds. And once the accumulation phase gets over, we have a synergy with the parent, which is us in terms of buying annuities from us. So again, there's a huge opportunity for us. The -- just to put a number here, it's about 7%, 8% of our GDP is the retirement assets. You would -- you will see, Trevor, rest of the country, it is multiple of GDP in some domains. So again, a lot of push from the government, a lot of push from the companies. And over a period of time, we do believe that it's a great opportunity. Just to put in context. Last year, we doubled our annuity sales thanks to this under-penetration opportunity. So with this, I would hand it to Nimesh who can talk about the asset management company's perspective on this low penetration on the retirement. Thank you, Trevor, once again for the question.

Thank you, Kannan. Retirement is a space that the asset management industry has always looked at very closely. We have specific schemes towards retirement. But the whole company, ICICI Prudential, has always focused on retirement as a space. And where instead of focusing on pure equity products or pure debt products, we as a company around 5, 6 years, along with Prudential, we created a category in India called as dynamic asset allocation products. These are essentially meant for a mix of equity and debt, depending on the levels of the market and make it a very conservative product. I think the whole retirement space is exactly what it wants that you remove the aggression out of the equity funds and make it more conservative. So that space has grown big time. We manage around a fund of more than $4 billion on that. But more or less, it is the retirement money, which has come into that particular category. So I believe that category in India is -- needs to be more structured and we are in the business of doing that. So both life insurance industry as well as asset management industry, as more and more financialization of savings is happening, the -- this sector is growing. And we have got a huge industry to get this market share from. Where I'm coming from, that asset management industry is only 20% of the banking industry in the country. So that is where the real growth is coming. The bank deposits in the country, as the country matures, as you cross $2,000 per capita, the depositor is becoming an investor. So instead of putting money -- the retired person instead of putting in deposits is getting towards becoming an investor. So that's where the big opportunity on retirement products are. So asset allocation where we, ICICI Prudential, has always focused on that, where we have around 26% market share in the market on this particular area.

Thank you, Kannan. Thank you, Nimesh. I think fantastic opportunity in that particular market. I'll just repeat what Kannan said, 7% of AUM as a percentage of GDP in formal retirement pools. It's only the -- and whilst the asset management industry can support the accumulation phase, particularly by moving money away from deposits into investments that can work harder for you, inflation doesn't eat away at them, the life sector can work not only at the accumulation, but also the decumulation space. And up until now or at least today, annuities is something that only life companies -- in other words, the decumulation stage, only life companies can offer. But we are well placed, as Kannan said, to meet that need. James, over to the next question.

Thank you very much, Nic. We have got a live caller, It's Andrew Crean.

It's Andrew Crean from Autonomous. I wanted to ask a question on China and the agency growth there. I suspect -- and there's a lot of runway of growth in China. And I suspect the speed with which you exploited is constrained by your ability to build agency forces at speed. Could you give us some idea as to the rate of growth in your Chinese agency force over the last 5 years? And what do you plan for the next 5 years? Do you think in broad terms that you can accelerate the growth in your agency plant in China?

Thank you, Andrew. Lilian, over to you, please.

Okay. Thank you, Andrew, for that question. Obviously, agency has its -- has a unique role. I mean we -- I think as you saw in our video and also Nic's presentation earlier, it's about making sure we equip them to give the relevant advice to customers. So it's not about the speed of work, it's about how we can actually equip our agent at pace. And we've done that through, firstly, pivot to more a systematic way of recruiting our agents through profiling and that has worked. So you heard about us talking about the PRUdna. This is where it's actually originated from, is in China, using technology to identify agents -- identify recruits that are suitable for this line of career. So once they're in, we actually make sure that they have the relevant learning and training so that they're equipped to offer advice. So the constraint is actually how fast can we actually equip our agents to do so. And as we said, there's been a lot of runway. So what we've done is we have put in place a lot of tools to support them because what we do for our agents, giving tools, giving knowledge and giving capabilities. Now as a result of that, we've been able to grow their productivity. So it's about each of the agent's productivity. So in 2020, we've been able to grow their case count productivity by over 33%. And one thing that we are very proud of is actually moving our agents to that professional agency echelon. And in 2020, we've been able to triple actually the number of MDRT qualifiers in the business. And that is how we're actually moving our agency force and this is how we're going to grow our agency force. So it's not -- obviously, number is important, but it's about the active number. And also, we want to make sure that per agent, the productivity continue to grow and continue to grow that way to address customer needs. Thank you.

Thank you, Lilian. Yes, compared to 2015, if we compare to 2020 to 2015, we had doubled the number of agents doing business in 2020 compared to 2015. But as Lilian said, as we go forward, a lot of it will be productivity and more full-time type agents. We don't poach in China. We try and recruit them. We use the same model as we do in other parts of Asia. In other words, trying to bring them in from university or maybe it's their second job and actually build their capabilities, the need-based selling whilst it's still teachable. So in the newer cities, the newer provinces, if you like, the tenure of our agents will be shorter than in some of the places where we've been for a long, long time. Next question, James.

Well, before we go to the next question, a gentle reminder to investors that we have less than 10 minutes, just about 7.5 minutes to take your questions, so register them online. After this, there'll be a panel where we shift our focus from market to capabilities. But we've got a question from Greig Paterson and it's on the MCB Hong Kong business. Greig asks you this, "When Macau opened up, the red tape around testing and visas" -- sorry, let me repeat. "When Macau opened up, the red tape around testing and visas held back Mainland traveling and APE sold by competitors, will Hong Kong have the same inertia when the HK MCB is allowed to happen again?"

Okay. So Derek, over to you. Is there a lesson in the way Macau opened its border with China in the way perhaps Hong Kong opens its border with China?

Yes. Thank you, Nic, and thank you, Greig, for the question. I think we can look at the question in -- from 2 fronts. Just pinpointing on Macau, right? When -- there's a lot of interest in GBA right now and Macau definitely is part of our GBA strategy because 9 plus 2 plus a -- 9 cities in China, Macau and Hong Kong. And then we are definitely looking into the opportunities in Macau, and we are planning to apply for a license. And Macau will definitely come [ through ] our Hong Kong business strategically and drive incremental business opportunity. That is one, right? And on the other front, if Hong Kong is being -- I mean, the border is being reopened, I will definitely see there is a demand that the MCV customer will come again, be it they come for shopping, property and then we talk about the health care, the child care demand will definitely be there. But it will be in stages and then that will be in phases, I believe. So I'm pretty much optimistic that the MCV business will be coming back, but it will take some time.

Thank you, Derek. It's -- Greig, it's the #1 priority of the Hong Kong government to open the border with China. So when that moment comes, I'm sure any lessons from Macau will be learned. And I think and if there are any teething problems, the people here are quite efficient and they will sort them out very quickly. The -- so I don't think it's teething problems that will impact the rate at which that market -- those flows return. As I always said, it will be -- the shape of the -- will depend on how many places in China can -- are allowed to Hong Kong -- are allowed to travel, sorry, to Hong Kong as that opening up expands from being the neighboring province into other provinces as we go across China. Next question, James.

Well, that next question is a twofold one and it comes from Trevor Moss. On Thailand, Trevor asks, "You talked about bundled projects -- bundled products, bundling health, wealth and retirement. Please describe in more detail. And the second question, you talked about diversifying distribution further, especially banks. Please put some color on the potential here."

So Robin, over to you. You referenced in your video the opportunity to bundle products with TMB. So that will be a good place to start. And then across to Lilian on diversifying distribution further, where else can we go within banks.

Okay. Thanks, Nic, and thanks, Trevor, for the question. Look, the -- I think probably worth just positioning a little bit on TMB Bank first. Obviously, TMB merged with Standard Chartered, creating TTB. It's now the sixth largest bank by deposits. It's got 10 million customers, 6 million of which are new to the PRU. Of their clients, about 1 million are classified as high net worth or affluent clients. And it's that market that we -- at the moment, we have a penetration rate of only about 3.7%. And a lot of that would actually be historically either credit loan policies or stand-alone, nonpower endowment policies. The real opportunity for us in that segment is given the growth, and we're expecting that segment to almost triple over the next 10 years, our real opportunity is to look at how we can bundle the wealth products and health products together, but in particular, look at how we can bring unit -- the Eastspring business and the Eastspring products, and how can we bundle those together with the insurance offerings. The good -- one of the really good things from a government perspective here in terms of reinforcing the need for savings is actually you get different -- you actually get an allowance from a tax relief perspective, both on any mutual funds that you're spending -- you invest in as well as life insurance. So we think there's a really big opportunity for us to actually look at packaging those mutual funds together with health and protection where the, as I spoke about earlier, where the penetration is tiny in the banks at the moment. And really for that high net worth segment, really reach out through the wealth part of the bank to give those customers new types of products, which aren't available in the market at the moment. With that, I'll hand back to Lilian on the second part of the question.

Thank you very much, Robin. I think we've been very successful with our bank partnership, but mainly focusing on the mass affluent segment. So we've done that very well, and we've also used more face-to-face way to penetrate that segment. But there's still a lot of opportunities. If I just quote, for example, SCB, which has been our partner for over 20 years, our penetration is still less than 10%. So there's a lot more room that we can grow on, and I think as you saw in the video, there's about 10 million customers that we can attract. So what we're now working with our bank partners is make sure that we are tackling each of the segment differently. So for example, from the high net worth, which we're going to put in our wealth management platform and working together with the bank. I think what is most exciting is actually on the mass segment. As we said, how do the mass actually go to the bank now. They go through with their mobile. So what we're doing is we're putting our protection product on the mobile so we get access by the mass segment of the bank. And the other segment that we are focusing on is actually the SME segment, which are normally the business banking customers of the bank. And you saw earlier in the video with Business@Pulse, which obviously is something that we are very proud of, and I'm sure our colleagues later on can so describe. So overall, we are diversifying out the customer segment with our bank distributions to optimize the opportunities there. Thank you, Nic.

Thank you, Robin, and thank you, Lilian. If I may add, clearly, yes, as Jens said earlier, we'd like to work with a mass market bank in Indonesia. But beyond that, really, we've got plenty to go for in the relationships that we have. If we take SCB, UOB, TTB, the recent exclusive deals that we've done in Vietnam, that gives us access to 25 million customers. If we were to add ICICI and CITIC, that brings the number to 150 million. If we were then to add all the other banks with whom we're dealing not on an exclusive basis, on an open basis, that doubles the 150 million to 300 million. And the number of customers today that have come from banks is just around the 4 million mark. So there's plenty to go for in all the relationships that we have, particularly on the mass segment side. Thank you for that question.

Well, we are out of time, but we really want to squeeze in one more question while we still can to all the panelists. This question comes from Andrew Baker. Andrew asks you, "Can you please provide an update on the potential tax-deferred pension opportunity in China?"

Okay. Thank you, Andrew. Back to you, Lilian.

Okay. I think one of the agenda from the state is obviously looking after the aging populations. And so other than looking at the public pensions, they are now working with the private sector to provide for the pensions. So we have -- CPL has actually participated in the first round of driving some of the tax-exempt deferred pensions products. We understand there's now a second round that they are actually testing with more the domestic insurers now. And I think there's many opportunities. So one side is broader. Obviously, we would love to participate and driving the accumulation side by -- with the insurance company. So yes, lots of opportunities and areas that we are working on.

Thank you, Lilian.

So if you have nothing to add there, Nic, we're going to wrap up this panel. Thank you very much for all of your questions, and to Nic, Lilian, Derek, Jens, Robin, Wilf, Kannan and Nimesh for providing your insight and expertise. Now before we move to the panel discussion on capabilities, we're going to take a very quick 5-minute pause. May I ask you to be back at your screens by 8:55 p.m. Hong Kong time, that's 5 minutes to the hour where you are, we'd be very grateful. And we look forward to seeing you in 5 minutes. [Break]

Welcome back again. You have just heard why we are excited about our focus markets and how they're advancing our strategic theme of delivering profitable growth in a socially responsible way. For the next hour, we will take your questions on how we're building capabilities and seeking to leverage the best of our enterprise in all our markets. Before we hear from you, let me introduce the panel and offer some context. I will briefly touch on 3 areas: first, how we think about digitizing and humanizing; second, how we think about health and wealth; and third, how we are building culture and capability. Firstly, digitizing and humanizing. Digitizing opens a whole new field of possibilities for us when it comes to scale and efficiency. Humanizing, on the other hand, strengthens our ability to provide sound financial advice. Benefiting from both of these efforts would be our agents. We are equipping our agency force to be future-ready with tools like PRUForce@Pulse, which supports all aspects of agency management. Lilian Ng, who joins us again, can answer questions on how this is improving productivity and customer outcomes. Divine Furagganan, our Chief Distribution Officer in the Philippines and one of our most progressive when it comes to digital adoption, can provide an on-the-ground perspective. When equipped with new tools and a wide range of products and services, agents can provide much more inclusive advice; in other words, beyond advising the affluent segments that many have grown accustomed to serving. This is what we're doing in Indonesia. And Nini Sumohandoyo can expand on how our new capabilities are helping us serve the vastly underpenetrated Sharia segment as well as our plans to give our Sharia business its own identity. Secondly, health and wealth. For health, we are known for our leading protection coverage, but everything we're doing with Pulse aims to go further by preventing and postponing illnesses. Al-Noor Ramji is our Group Chief Digital Officer and can speak to Pulse as our digital front door and what this means for customers. He can also speak to Pulse as our digital back end and what this means for the scale and efficiency of our business. Whether front door or back end, I am certain that Al-Noor will emphasize that Pulse cuts across our businesses. It has the same brand in each market. It has a unified look and feel. And it will serve as a single platform for onboarding, fulfillment, servicing and much more. You will have heard me earlier talk about lowering the threshold for wealth services. We will do this through Wealth@Pulse together with Eastspring, which itself has sought operational efficiency through retooling. Today, Eastspring is the largest user in Asia of BlackRock's Aladdin and operating system for investment professionals. Wai-Kwong Seck, our Eastspring CEO, can take questions on how Eastspring will meet its ambition to lead in Asia and on ESG. Finally, culture and capability. These ties back to our strategic theme of humanizing our company. Together with our refreshed values, we're equipping our people to tell stories, think conceptually, imagine possibilities and build iteratively. These ways of working are characteristic of our hot houses, which are co-creation events that bring together people from across the business as well as from our partners. Jennifer Villalobos is here from our Thailand life business and can talk about how we are co-creating with our new digital distribution partners such as The 1, enabling a 9.5% conversion rate on the highly tailored wellness propositions made possible by our combined data sets. This is one of many examples that Mike mentioned regarding the shifts in our culture from one that preferred a siloed own-and-control approach to one that prizes collaboration internally and externally. For more evidence of culture shifts, look no further than Singapore where LinkedIn just named us one of the top 15 best places to work. Dennis Tan, our Singapore CEO, recently sponsored a hot house to accelerate enhancements to Business@Pulse, our SME offering. He can field questions on why the old model of workplace marketing proved so difficult and how our new Pulse-enabled schemes are engaging employees directly, leading to greater success in converting scheme employees to customers, both direct as well as through agent referrals. With that, let us hear your questions.

We are here in Hong Kong. I'm sitting with Nic. And of course, we have everyone primed and ready on our screen for this panel discussion on capabilities. You know all the drill here, but just in case, you know that lines are open, so you can call in with your question or you can register it on the Q&A function on the event website. Well, the lines are open and so is the panel. To ensure everyone has the opportunity to ask your question in this session, may we ask you to keep your question brief. Thanks very much. We can go to our first caller, and we have Blair Stewart on the line. Blair, you can remind us of who you represent and your question to our panel, please.

It's Blair Stewart from Bank of America speaking. I've got a couple of questions on Pulse and a couple of other short questions. On Pulse, clearly, this is something that's been developed over the last, I think you said 21 months, with partners. Mike referenced the value chain. I wonder if you could just explain what the value chain looks like and how much you've spent on Pulse and will be spending on this. Secondly, on Pulse, how is it differentiated, do you think, versus the several other health apps or ecosystems that are being developed, especially in Asia? And then moving away from Pulse, just 2 very quick questions, if I may. Health and protection, as that continues to ramp up, how much underwriting risk are you retaining versus reinsuring? And fourthly, on the Sharia market, I know you have a large market share in Indonesia, but how big is this business at the moment?

Okay. Thank you, Blair. Firstly, let's go to Al-Noor on the question of the value chain. On the H&P underwriting risk versus within, maybe Lilian, you can touch on, and then perhaps then Ben Bulmer, our CFO, can expand, if necessary. And then Sharia, over to Nini. So Al-Noor, Lilian, Nini.

Thank you, Blair. So Pulse is a growth engine. It's the world's first and so far on the ecosystem dedicated to make our customers healthier and wealthier by solving their customer pain points. So your question about the value chain really plays to that. Now everything from the prevention, all the way through to health, disease care, all the way down, that's the whole chain that we hope that we will solve a customer pain point for the customer. Today, the customer faces a lot of difficulty in navigating the health system and also the wealth system, if you like. So how do we solve this at scale? And value will come from 3 things. So whether it's valuations of our company or valuations of anything really account from 3 or 4 things, if you like. Firstly, the business model; second, the operating model; and then third, you could say the pace of the speed, which I think Mike mentioned earlier, that we can go to. And then can we sustain it? Can we build it at scale? So the business model allows us multiple sources of revenue, multiple sources of revenue. The operating leverage -- the operating model allows us great operating leverage. So providing we can keep those 2 going, I think the value chain becomes obvious. Let me give you an example. If we detect something early in the health chain, we can save $100,000 problem -- sorry, a problem which is $10 from becoming a $100,000 problem, detecting early. Similarly, if we monitor people's wealth and so on, it's very easy to say things like save more money and you'll be fine in the old age. But how do we encourage savings in a painless way -- in a seamless way. So both health and wealth can be solved that way, I think. As your competitive point, we tend not to focus too much on competition. Clearly, there are many apps, the best ones, I would say, probably in China, but they're not driven by data and AI at the source of trying to help the customer achieve its -- or his or her wealth and health propositions. That's what we're focused on, both longitudinally over time as well as seamlessness back to front. So just to emphasize Nic's point earlier, we make sure the customer can go through the whole value chain seamlessly, whether it's front office, back office, hospitals, doctors, the whole thing just from Pulse. I'll pass it on to Lilian, I think, for PRUforce.

Thank you. Thank you, Al-Noor, and thank you for the question, Blair. So on health and protection underwriting risk, how much do we retain? So if I just look at health first, which is more our medical portfolio, actually, we retain most of the risk ourselves because it's something that we could manage and because of -- it's a high frequency but low-value claims. So it's something that we have the expertise to manage. So that's the area. Now on the more long-term protection product, in particular, critical illness, we have actually used reinsurer, not just so much to -- for any risk retention or we pass on the risk, it's about learning from each other because, obviously, there's a lot of medical advancement and so on. So what we do is we continue to work with our reinsurer to actually -- how do we actually become more inclusive to provide the necessary coverage for customer through our critical illness platform. And something that we've done over the last 12 to 24 months is we now created what we call predictive underwriting. So again, I think as Al-Noor is saying, user data, AI, analytics, so that we can actually make sure that we can create that coverage for our customers seamlessly, knowing what we are doing and as a result become more seamless. We are also now learning to use other data for underwriting. So for example, when we normally ask people a lot of health questions in terms of the underwriting of a critical illness coverage. Actually, a lot of the chronic diseases is because of diet. But we never ask people actually what is your dietary requirements. So these are the type of areas we are working with our underwriters to learn and how do we best underwrite our customer to provide a more seamless experience and more inclusive coverage for them. So Ben, anything you'd like to add on the reinsurance?