Last year's �1bn rights issue angered some investors

The UK's second-largest listed insurer reported operating profits of �1.12bn ($2.15bn) for 2004 as the UK market emerged from a three-year decline.

It forecasts strong UK sales, reflecting pressure to deliver growth after last year's �1bn cash call.

Profits from its UK operations have already risen 25% over the last year.

Sales are up 40%.

Under pressure

The proceeds from last year's �1bn cash call are being used to develop UK market share.

The UK market is starting to recover after three years of decline Jonathan Bloomer, chief executive Check Prudential's share price

The Pru said it now sees UK sales expanding by about 10% this year, against industry growth expectations of about 5%.

"The UK market is starting to recover after three years of decline and...it is clear that the changes we have made to the business are enabling it to take advantage of this upturn," said chief executive Jonathan Bloomer.

However, some investors fear that the Pru might squeeze profit margins to win business.

Asia beckons

Mr Bloomer said the company also achieved strong growth in Asia, where profits rose 19%.

Looking ahead, he expects "excellent growth prospects" throughout the region, particularly in China and India.

In the US, where Pru operates Jackson National Life, sales for the year were up 21% at �453m.

Across the group as a whole, profits from new business rose by 23% to �688m.

Life insurers report on an achieved basis, so the figures reflect profit from new sales as well as profit earned from existing policies.

The Pru announced a total dividend of 15.84 pence per share, up 3% on last year.