Prudential Posts Strong Q3 Fixed Annuity Sales Gains, Along With a Net Loss

What You Need to Know

Prudential reported $803 million in after-tax adjusted operating income for the third quarter.
An increased in U.S. individual fixed annuity sales offset most of a drop in U.S. individual variable annuity sales.
Leadership at the U.S. business is changing.

Prudential Financial lost money in the third quarter, but U.S. sales of some products, including individual fixed annuities, increased.

Charles Lowrey, Prudential’s chairman, noted in a comment on the results that the company cut costs by $750 million one year ahead of schedule.

The company continues to move toward becoming “a higher growth and less market-sensitive company,” Lowrey said.

The Earnings

The third quarter ended Sept. 30.

Prudential is reporting a $284 million net loss for the quarter on $22 billion in revenue, compared with $1.5 billion in net income on $20 billion in revenue for the third quarter of 2020.

The Newark, New Jersey-based life insurer’s after-tax adjusted operating income, which excludes the performance of the derivatives used to manage annuity risk and some other gains and charges, fell to $803 million, from $1.5 billion.

Prudential executives will discuss the results during a conference call set to start at 11 a.m. Eastern Daylight Time Nov. 2.

Annuity Sales

Prudential’s quarterly financial supplement shows that overall U.S. individual annuity sales fell to $1.4 billion, from $1.5 billion in the year-earlier quarter.

Sales of the FlexGuard variable annuities that Prudential has emphasized fell to $1.1 billion, from $1.3 billion, but sales of fixed annuities climbed to $249 million, from $37 million.

Prudential breaks out annuity sales by distribution channel.