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Performance of Prudential Financial’s Life Planner Operations

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Updated

Components

Prudential Financial’s (PRU) International Insurance division is comprised of two verticals:

  • Life Planner operations
  • Gibraltar Life and other operations

The Life Planner operations generated adjusted operating income of $1.49 billion in 2017 compared to $1.53 billion in 2016, a decline of $46 million. The decline was due to the negative impact of $32 million in currency fluctuations.

In 2017, these operations witnessed a net charge of $67 million due to changes in assumptions and other items as well as annual reviews. In 2016 and for the same reasons, the net charge was $38 million. If the impact of both items discussed is not considered, the adjusted operating income from its Life Planner operations rose $15 million, mainly because of the positive momentum in its operations in Brazil and Japan. However, net investment results and policyholder experience were also major contributors.

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Benefits and expenses

Life Planner operations had benefits and expenses of $9.1 billion in 2017 compared to $8.4 billion in 2016. Total revenues for the International Insurance division in 2017 were $21.5 billion compared to $21 billion in 2016. Of the $21.5 billion, Life Planner operations contributed $10.6 billion.

Prudential Financial’s EV-to-EBITDA (enterprise value to earnings before interest, tax, depreciation, and amortization) ratio was 6.0x on an LTM (last-12-month) basis. The ratios for CNO Financial Group (CNO), American International Group (AIG), and Reinsurance Group of America (RGA) were 6.59x, 7.65x, and 4.35x, respectively, on an LTM basis.

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