Executives at Prudential Financial Inc. say implementation of the Tax Cuts and Jobs Act could change how the company’s finances look.
If something like what Congress has been considering becomes law, and works as expected, tax changes could reduce Prudential’s capitalization level while increasing the company’s after-tax profit margins, according to Robert Falzon.
Falzon, Prudential’s chief financial officer, made that prediction Thursday, during a 2018 financial outlook call with securities analysts.
(Related: 9 New 2018 Tax Numbers to Know)
Prudential told the analysts that it expects to continue to meet ‘AA’ financial strength standards next year, whatever happens with U.S. tax change efforts.
“Business mix and solid fundamentals continue to produce an attractive financial profile,” the company said in a conference call slidedeck.
Earnings per share growth should continue in spite of low interest rates and slower stock market growth, the company said.
In the United States, in individual product lines, “we expect the challenged sales environment to persist,” Falzon said.
In the individual life market, “product actions over the last several months could result in a slightly higher tilt towards term and variable life sales,’ he said.