The before-tax adjusted operating income in Q3 2020 was $1.56bn compared with $1.58bn reported in the third quarter of 2019


Prudential Financial tower in Newark, New Jersey. (Credit: Prudential Financial, Inc)

Prudential Financial has reported $1.48bn or $3.7 per share in net income attributable to the company for the third quarter of 2020 (Q3 2020), compared with $1.41bn net income or $3.44 per share, posted in the third quarter of 2019.

In the second quarter, the US life insurance company was hit with a net loss of $2.4bn or $6.12 per share.

For the first nine months of 2020, Prudential Financial reported $1.19bn in net loss attributable to the company compared to a net income of $3.05bn.

The insurer’s before-tax adjusted operating income was $1.56bn for Q3 2020 compared to $1.58bn reported for the third quarter of 2019.

PGIM, the global investment management business of Prudential Financial, saw its registered adjusted operating income surge from $232m in Q3 2019 to $370m in Q3 2020.

The life insurer said that the surge was due to higher other related revenue, which was driven by a spike in co- and seed investment earnings, high agency revenue, and higher incentive fees, apart from increased asset management fees.

PGIM’s assets under management increased by 11% to $1.44 trillion in Q3 2020 compared to the year-ago quarter.

Prudential Financial’s US businesses unit had an adjusted operating income of $873m in Q2 2020 in comparison to $910m made during the same quarter in the previous year.

The reduced adjusted operating income of the unit was driven by lower net fee income in its individual annuities business apart from less favourable underwriting results due to Covid-19 related net mortality experience.

The insurer’s US workplace solutions unit, which is made up of retirement and group insurance businesses, had an adjusted operating income of $394m in Q3 2020. In the same quarter of the year before, the US workplace solutions unit made $392m in adjusted operating income.

Prudential Financial chairman and CEO Charles Lowrey said: “During the third quarter, we continued to execute on our 2020 priorities. We continued to reprice products and pivot to less rate-sensitive products.

“We also took further measures to rotate our earnings mix toward higher growth markets, as evidenced by our agreement to sell Prudential of Taiwan and the closing of our Prudential of Korea divestiture.

“We are ahead of pace with our cost savings program, already realizing $135 million of savings through the third quarter of 2020 versus our full-year goal of $140 million.”

Prudential of Taiwan, the company’s life insurance business in Taiwan, is being sold to Taishin Financial (Taishin FHC), a Taiwanese financial institution. As per the agreement signed in August 2020, the base price for the transaction is NT$5.5bn ($190m).