Prudential today insisted it has enough cash to survive a slump as bad as the Great Depression as it reported a 5% rise in sales.

The insurance giant said its capital position was “strong and robust” amid ongoing concerns it may be forced to raise new funds to protect itself from the turmoil in financial markets.

It said its key Insurance Group Directive (IGD) surplus — the amount of cash it has beyond what it needs — stood at a healthy £2.5 billion, thanks to an £800 million boost from today's sale of its operations in Taiwan.

The Pru also said it has annuity funds that could withstand a repeat of the Great Depression, leaving chief executive Mark Tucker in bullish mood.

“This will take the market by storm,” he said. “It will make us the strongest insurer in the UK. In this market place, where everyone is concentrating on capital, this should be a very positive message. This will demonstrate clearly that we have got significant capital to continue to grow and run this business.”

Pru shares have lost a third of their value in the past 12 months but were up 111/4p to 2673/4p today. Along with those of rival insurers, they have come under attack from short-sellers including Lansdowne in recent days.

The Pru's IGD surplus of £2.5 billion compares with £2 billion at Aviva and £1.6 billion and Legal & General. In the Taiwan deal, the Pru transferred its business there to China Life Insurance of Taiwan for one Taiwanese dollar. It also invested £45 million in China Life in exchange for a 9.95% stake.

The Pru reported a 5% rise in sales to £3.02 billion in 2008 with sales up 6% in Asia and 7% in the US. UK retail sales grew 10% to £803 million and UK overall sales climbed 4% to £947 million.

The M&G asset management arm attracted record gross inflows of cash from customers of £16.2 billion in 2008. But net inflows fell 31% to £3.4 billion as funds were withdrawn as a result of the market turmoil. Total funds under management slid 15% to £141 billion.

Tucker said: “We expect 2009 to be a challenging year, and for global financial markets to remain difficult. We have taken a prudent approach to our 2009 plans, balancing new business with cash generation and capital conservation as our key drivers.”