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Behind Prudential’s Individual Annuities Division

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Nov. 27 2017, Updated 9:02 a.m. ET

Return on assets

The Individual Annuities division of Prudential Financial (PRU) reported a rise in its return on assets from 114 basis points in 3Q16 to 128 basis points in 3Q17. This increase was helped by the rise in account values and its risk management strategy.

Earnings in Prudential’s Individual Annuities division stood at $529.0 million (which excludes market-driven and discrete items) in 3Q17. In 3Q16, it reported earnings of $449.0 million. This division reported a rise in its benefits and expenses from $633.0 million in 3Q16 to $727.0 million in 3Q17.

Prudential’s market capitalization is ~$46.8 billion. Its peers (XLF) Reinsurance Group of America (RGA), CNO Financial Group (CNO), and Aflac (AFL) have market caps of ~$9.7 billion, ~$4.0 billion, and ~$33.0 billion, respectively.

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Sales

Prudential’s Individual Annuities division reported gross sales of $1.3 billion in 3Q17 compared to $2.1 billion in 3Q16. The division posted net sales of -$980.0 million in 3Q17 compared to $87.0 million in 3Q16, mostly because of the rise in surrenders and withdrawals.

In 3Q17, Prudential’s Individual Annuities division posted surrenders and withdrawals of $2.3 billion compared to $2.0 billion in 3Q16. The division reported a decline in its gross sales in 3Q17 when compared with gross sales in 2Q17.

Prudential’s Individual Annuities division reported total account values of $165.6 billion in 3Q17 compared to $158.4 billion in 3Q16.

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