US Individual Life and Group Insurance division
Prudential Financial’s (PRU) US Individual Life and Group Insurance division saw a fall in its operating income on lower group insurance revenues. In 4Q15, the division saw adjusted operating income of $126 million compared to $162 million in 4Q14.
The division forms 8% of the company’s total adjusted operating income. In 1Q16, individual life insurance is expected to see strong underwriting, partially offset by weak group insurance.
Individual Life segment
Prudential’s Individual Life segment expanded its operations on the back of higher sales and favorable mortality experience compared to the average expectation. In 1Q16, the segment is expected to see favorable mortality experience and nominal sales growth.
The segment reported an adjusted operating income of $99 million in 4Q15 compared to $118 million in 4Q14. Its current quarter results include a charge of $20 million to increase reserves for certain policies related to a valuation system conversion.
Group Insurance segment
Prudential is targeting improved margins for its disability underwriting. The Group Insurance segment’s revenues fell in 4Q15, with adjusted operating income of $27 million compared to $44 million in the prior year’s quarter.
The $17 million fall was primarily driven by a lower contribution from investment results and less favorable disability claims experience in the December quarter.
Prudential Financial’s book value per share rose by ~10% in the past year. Meanwhile, book value per share rose by ~6% for both ACE (ACE) and Allstate (ALL) and ~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).
Prudential Financial (PRU) estimates its balance sheet capital capacity to be $757 billion as of December 31, 2015.
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