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Behind Prudential’s Individual Life Insurance Division

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Individual Life Insurance division

Prudential Financial’s (PRU) Individual Life Insurance division reported adjusted operating income of $150.0 million in 3Q17 compared to $111.0 million in 3Q16. This increase resulted from a fall in the benefits and expenses incurred.

The negative effect related to the reserve refinements that occurred in 3Q16 did not occur in 3Q17. This trend positively impacted its adjusted operating income.

Positive mortality experience and a decline in the general and administrative costs also contributed to the YoY rise in the division’s adjusted operating income.

Prudential’s Individual Life Insurance division incurred benefits and expenses of $1.26 billion in 3Q17 compared to $1.29 million in 3Q16.

Prudential has generated a return on assets of 0.53% over the last 12 months, or on an LTM basis. Its peers (XLF) Reinsurance Group of America (RGA), CNO Financial Group (CNO), and Aflac (AFL) have generated returns on assets of 1.4%, ~1.5%, and ~2.0%, respectively, on an LTM basis.

Annualized new business premiums

Prudential’s Individual Life Insurance division has garnered annualized new business premiums of $142.0 million in 3Q17 compared to $143.0 million in 3Q16. Of this $142.0 million, $57.0 million was garnered from term life insurance and $28.0 million from other universal life insurance.

From the other two products—guaranteed universal life and variable life—Prudential’s Individual Life Insurance division has generated $31.0 million and $26.0 million, respectively.

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