US Individual Life and Group Insurance division

Prudential Financial’s (PRU) operating income for its US Individual Life and Group Insurance fell to $201 million in 2Q16, compared to $312 million in 2Q15. The fall was mainly due to losses in the US Individual Life segment.

Prudential’s US Individual Life Falls on Reserves in 2Q16

Individual Life segment

Prudential’s Individual Life segment reported a fall of $290 million in 2Q16 on an adjusted operating income basis, compared to adjusted operating income of $237 million in the previous year’s quarter. This was mainly due to a net charge of $420 million from updates of reserves and related items, including updated profitability estimates reflecting updates of actuarial assumptions based on an annual review.

Excluding reserves and refinements, Individual Life results fell by $47 million from the previous year’s quarter, primarily due to fewer favorable claims experiences.

Group Insurance segment

Prudential is targeting improved margins for its disability underwriting. The Group Insurance segment’s adjusted operating income rose to $89 million in 2Q16 compared to $75 million in the prior year’s quarter.

The rise was mainly due to a net benefit of $41 million from refinements of reserves and related items in the prior year’s quarter.

Prudential Financial’s book value per share rose by ~2.5% in the quarter ended March 31, 2016, compared to the previous quarter. Meanwhile, book value per share rose by ~6% for both Metlife (MET) and Allstate (ALL) and by ~8% for Chubb (CB) during the same period.

Prudential Financial competes with other players in the insurance business that are part of the iShares MSCI ACWI ETF (ACWI).

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