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November 05, 2019 at 03:41 PM
Three more big individual life and annuity issuers — Prudential Financial Inc., Athene Holding Ltd. and Brighthouse Financial Inc. — have released their third-quarter earnings this week.
All three made money during the quarter, but all three are emphasizing that falling interest rates have forced them to put on their financial snow boots.
(Related: Life and Annuity Issuers Tell Wall Street About Interest Rate Winter)
Charles Lowrey, the chief executive officer of Prudential, said in a statement that Prudential continues to work to meet the evolving needs of its customers “while continuing to take a disciplined approach to pricing in consideration of the effects on profitability from the low interest rate environment.”
Athene said its earnings reflect “unfavorable unlocking” of assumptions, “driven by a reduction in the long-term interest rate assumption, partially offset by a favorable impact from actuarial experience.”
The Pembroke, Bermuda-based company said its new deposit total was lower in the latest quarter than in the third quarter of 2018 because of “Athene’s disciplined apporach to pricing in a declining interest rate environment.”
Brighthouse — the Charlotte, North Carolina-based company that holds the individual life and annuity businesses built by MetLife Inc. — said it cut its long-term mean reversion interest rate assumption to 3.75%, from 4.25%.
The Earnings
Prudential Financial Inc., Newark, New Jersey (Stock symbol: PRU)
Prudential is reporting $1.4 billion in net income for the third quarter on $13 billion in revenue, compared with $1.7 billion in net income on $14 billion for the third quarter of 2018.
The company’s U.S. individual solutions division, which is part of the U.S. financial wellness businesses, is reporting $518 million in adjusted operating income before taxes for the latest quarter on $2.8 billion in revenue, compared with $624 million in operating income on $2.7 billion in revenue for the year-earlier quarter.
