The Man from the Pru's good news

With a 'rock solid' balance sheet and sales up 15% this year, the Prudential's third-quarter update contained no nasty surprises.

The Pru's shareholders can "breathe again", said The Guardian's Nils Pratley. "There were no nasties" in the group's third-quarter update and the capital surplus of £1.2bn comfortably met expectations. So talk of a rights issue to shore up the balance sheet is wide of the mark. A Goldman note last week, suggesting insurers might have to raise fresh capital, sent Prudential's (LON:PRU) shares into a tailspin.

But Pru's balance sheet seems to be "rock solid", and the shares have perked up. What's more, sales have risen by 15% this year in what chief executive Mark Tucker called a "flight to quality". "The noises coming from our large insurance companies ought to be reassuring", said the Evening Standard's Simon English. Yet this is similar to what the banks were saying before it became clear they "were in serious trouble". In the 2000-03 bear market, the insurer insisted it wouldn't need to rattle the tin for more money and that it wouldn't cut the dividend. But then it did both.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free
https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up
MoneyWeek

MoneyWeek is written by a team of experienced and award-winning journalists, plus expert columnists. As well as daily digital news and features, MoneyWeek also publishes a weekly magazine, covering investing and personal finance. From share tips, pensions, gold to practical investment tips - we provide a round-up to help you make money and keep it.