NU Online News Service, March 27, 4:09 p.m. – Weak guaranteed product sales are hurting employee benefits income at Prudential Financial Inc., Newark, N.J., but group insurance could help turn things around, according to a new, 32-page research report on Prudential from Lehman Brothers Inc., New York.
The benefits division accounted for only 19% of Prudential’s operating income in 2001, down from 28% in 1998, analysts Eric Berg and E. Stewart Johnson write.
Earnings in the “Other Employee Benefits” unit ? a unit that sells guaranteed investment contracts, immediate annuities, funding agreements and related products ? have fallen to about $200 million, from $342 million, over the same period, the analysts observe.
The analysts blame the decrease on a 14% drop in guaranteed product account values.