Ticker PRU

Today's data summary

Market closed
% change
Price Pence
As of 23:46 20 Jan 2020
Market cap. Pound sterling
36,806.41 million
As of 23:46 20 Jan 2020

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Blue-chip movers

Insurers Prudential and Hiscox were the top risers in the FTSE 100 today.

Both climbed more than 3%.

Prudential rose 3.13% to 1,385 while Hiscox gained 3.18% to 1,362.

Rolls-Royce Holdings was the biggest faller, losing 3.40% to 715.80.

Fund Manager M&G starts trading

M&G, the fund manager spun-off from insurer Prudential, is making its stock market debut as a separately listed firm.

Shares in M&G started trading at around 213p and are now changing hands at 221.5p each, valuing the company at about £5.77bn.

The Pru, by comparison, is now worth about £36bn.

Pru annuity compensation could top £250m

PA Media

Prudential says it is paying compensation to victims of its annuity mis-selling, and the total could top £250m.

The company added: "Prudential no longer sells non-advised annuities to most of its customers, following a decision in February 2017 to refer customers to a panel of external providers rather than writing new annuity business."

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Prudential: We're sorry

Following the fine by the financial watchdog over its sales of annuities, Prudential says: "We are deeply sorry for the historic failings in our non-advised annuity business and any detriment this has caused our customers.

"We are working hard to put this right and are on schedule to offer redress to the vast majority of affected customers by the end of October this year."

Pru gave holidays abroad and 40% bonuses to annuity sellers

A salesman getting a fat bonus
Getty Images

Prudential used 'large sales-linked incentives' to flog its annuities to customers, the FCA's report reveals.

For example, the average annual bonus a Prudential call handler could expect between 2009 and 2012 was an additional 37% on top of their base salary. For sales managers, the average bonus they rose to 40%.

There were also 'competitions' where call-handlers flogging the most annutiies could win spa breaks or holidays abroad.

Prudential: Very serious breaches

Elderly people with financial adviser
Getty Images

Mark Steward, executive director of fnforcement and market oversight at the FCA was damning about the Prudential's actions of annuities.

"These are very serious breaches that caused harm to those customers," he said.

"Prudential is now rightly focused on redress and today’s financial penalty reinforces the cardinal obligation of fairness that firms owe to customers."

Prudential 'failed to take reasonable care' over annuities sale

Prudential fine

More on that Prudential fine, which actually totalled £34,107,200, but the Pru got a 30% discount for accepting the findings of the City Watchdog.

The Financial Conduct Authority said between July 2008 and September 2017, Prudential flogged annuities directly to existing Prudential pension holders without telling them that they may get a better deal if they shopped around.

The watchdog also said the Pru "failed to take reasonable care to organise and control its affairs in breach of its obligation to ensure fair treatment of customers".

Additionally, Prudential failed to ensure that documentation used by call handlers was appropriate and failed to monitor calls with customers properly, the regulator said.

BreakingPrudential fined £24m for annuities mis-selling

Prudential has been fined £24m for failures related to non-advised sales of annuities.

The FTSE 100 losers

LSE sign
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The FTSE 100 is a sea of red this morning. The biggest loser is financial services platform Hargreaves Lansdown, which has slumped almost 5% to 1,941.75

Other blue chip shares that have sunk 4% or more include Ashtead group, down 4.55% to 2,096 and insurer Prudential, down 4.34% to 1,531.25.

M&S has slipped 4.23% to 192.50 because of confirmation of that tie up with Ocado which we mentioned earlier.

Also struggling are Melrose Industries, down 4.21%, investment firm Schroders, down 4.14%, and Taylor Wimpey, down 4.08%.