British insurance giant Prudential said today that net profits slumped by nearly 40% last year, as it suffered from turbulence in emerging markets.

Earnings after taxation sank to £1.346 billion in 2013 on short-term fluctuations in investment values, Prudential said in a results statement. That compared with net profit of £2.163 billion in 2012.

The group added however that operating profit, or earnings before tax and interest payments, rose 17% to £2.954 billion.

Total sales meanwhile grew by 5.4% to £4.423 billion last year, boosted by Asia.

"The group has delivered a strong performance in 2013," said chief executive Tidjane Thiam in the earnings release.

"Our focus on execution across our geographic markets of Asia, the US and the UK has delivered profitable growth and increasing cash generation," he said. 

He cautioned however that the outlook was clouded by the impact of the US Federal Reserve's stimulus tapering - particularly on emerging markets. "Looking ahead, we believe that the global economic outlook is improving," Thiam said.

"However, investment markets are impacted by short-term volatility as the market adjusts to policy normalisation in the US. The macro-economic adjustments that we are seeing in emerging markets, partly driven by the return of robust US growth, are ultimately a net positive for these countries, the global economy and Prudential," it added.

The insurer also recommended increasing its shareholder dividend by 15% to 33.57 pence per share.