Analyzing Prudential’s Individual Annuities and Retirement Businesses



Rise in annuities earnings

The individual annuities business of Prudential Financial (PRU) saw an increase in its earnings in 2Q17 compared to 2Q16. After excluding market-driven and discrete items, earnings from Prudential Financial’s individual annuities stood at $512 million in 2Q17 compared to $375 million in 2Q16. This rise resulted mainly from fee income, policy charges, and net investment results.

In 2Q17, Prudential Financial’s individual annuity sales declined on a YoY (year-over-year) basis. In 2Q17, its individual annuity sales stood at $1.5 billion compared to $2.3 billion in 2Q16. However, individual annuity sales in 2Q17 rise marginally compared to sales in 1Q17. Individual annuity sales in 1Q17 stood at $1.4 billion.

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Retirement earnings

Earnings from Prudential Financial’s (PRU) retirement business rose in 2Q17 compared to 2Q16. In 2Q17, retirement earnings totaled $328 million and in 2Q16, they totaled to $230 million, reflecting an increase of $98 million. This rise in retirement earnings was mostly due to favorable net investment results.

In 2Q17, total gross sales and deposits under Prudential Financial’s retirement business stood at $7.3 billion compared to $8.1 billion in 2Q16. This YoY decline resulted from lower sales in institutional investment products in 2Q17.

Expected revenues

Prudential Financial (PRU) is expected to report revenues of $13.13 billion in 3Q17. Other insurance companies (IYF) are expected to post the following revenues in 3Q17:

  • Chubb Ltd. (CB): ~$7.2 billion
  • Allstate (ALL): ~$8.6 billion
  • MetLife (MET): ~$16.7 billion

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