- While most insurance stocks are gaining Prudential Financial ( NYSE: PRU ) stock is slipping 1.2% in Wednesday afternoon trading after its Q2 earnings reflected a bigger than expected charge from its annual assumption update.
- The company's $1.4B ($1.1B after tax) increase in insurance life insurance reserves far surpassed Evercore ISI's expectation of ~$200M, wrote analyst Thomas Gallagher in a note to clients. "Following the review, it looks like PRU's assumed run rate in individual life insurance earnings will be roughly $30M lower per quarter as well."
- During Prudential's ( PRU ) earnings call, Vice Chairman Rob Falzon explained , "We strengthened our Individual Life reserves, primarily reflecting updates to policyholder behavior and revised mortality assumptions."
- Prudential CFO Ken Tanji added that the "majority of the reserve strengthening was the result of the policyholder persistency assumption. The mortality updates were more modest and across all of our businesses."
- Meanwhile, Unum ( UNM ) stock is climbing 16% after the insurer's Q2 earnings reflected improving trends in COVID-related mortality impacts and solid sales and premium trends in core business segments.
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Prudential Financial shares dip after big Q2 charge for strengthening reserves