Pru raises dividend despite 8% drop in profits

This morning, British insurer, Prudential raised its interim dividend despite an 8 per cent drop in profits for the first half of the year. Nick Raynor, investment adviser at The Share Centre comments on today's results and what they mean for investors.

"It's great to see Prudential has decided to reward investors by increasing its interim dividend by 5 per cent to 6.29 pence. Legal & General and Aviva recently chose to slash their interim payments and Prudential could have taken advantage of this in order to cut costs.

"Despite a small drop in profits, Prudential's capital position remains strong. Plus, its diversification strategy is proving more attractive to the life insurance sector. Prudential has continued to develop its Asian arm and is now the leading European insurance player in the region, accounting for half of the Group's business.

"Given today's interim dividend increase and the Group's strong performance, Prudential remains our preferred life insurer. We currently list Prudential as a cautious buy, given the extreme volatility in the sector."