Comparative Financial Analysis of AIA and Prudential During the Pandemic (2019--2022)

Abstract

As representatives of the world's leading insurance companies, the performance of AIA and Prudential during the COVID-19 pandemic has been highly important to the insurance industry's response to the crisis. This article uses financial statement analysis and DuPont analysis (ROE decomposition) to compare the performance of the two companies in terms of core profitability (gross profit margin, net profit margin) and business growth capabilities. AIA has shown stronger financial resilience, with core profitability continuing to be positive; while Prudential has faced drastic fluctuations, especially in 2022, with significant operating losses and negative profit margins, and its risk response capabilities have been significantly challenged. DuPont analysis further reveals that one of the key reasons for Prudential's difficulties is its high historical financial leverage ratio. The insurance industry needs to focus on improving strategic agility and operational resilience during the crisis; specifically, at the enterprise level, it should actively expand diversified market sales channels and accelerate the development of innovative insurance products to meet the needs of the times.