Prudential PLC says it wants to sell a minority stake in Jackson National Life Insurance Company to investors, to help get Jackson capital it can use to continue to diversify its product mix.
But Prudential executives are emphasizing that they will want to make the stock sale at the right time, to get a good price, and that they simply want to sell a minority stake in Jackson.
“We can change the timing,” Mike Wells, Prudential’s chief executive officer, said Wednesday, during a conference call with securities analysts that was streamed live on the web. “We’re not forced into doing this… It’s a very different circumstance that someone disposing of a business that’s not performing and needs capital.”
Prudential PLC is a London-based company that was founded in 1848. It has no connection with Prudential Financial Inc., which is based in Newark, New Jersey.
- Links to many Prudential PLC filings are available here.
- The Prudential PLC investor relations page, which offers a link to a video recording of a management discussion of the company’s latest results and plans, is available here.
- An article about Prudential’s discussions of a Jackson realignment is available here.
Jackson is a Lansing, Michigan-based insurer with about $298 billion in assets.
Jackson ranked second in the U.S. annuity market in 2019 in terms of annuity considerations, with about $20 billion in annuity considerations and a 6.6% share of the market, according to a preliminary 2019 National Association of Insurance Commissioners market share report.
Prudential PLC announced the preparations for a minority initial public offering for Jackson around the same time the company announced its earnings for the second half of 2019.
Prudential reports its earnings in U.S. dollars, using the International Financial Reporting Standards (IFRS) format.
An IFRS statement of operations looks much different from a statement of operations prepared according to the U.S. Generally Accepted Accounting Principles (GAAP) rules and, for example, does not include a revenue figure.
Prudential is reporting $2 billion in profit for the second half of 2019 on $706 billion in assets, compared with $1.9 billion in profit on $662 billion in assets for the second half of 2018.
The U.S. operations are reporting $1.9 billion in operating profits for the half year on $286 billion in assets, up from $1.4 billion on $267 billion in assets.
The Conference Call
Here’s a look at some of what Prudential executives talked about during the conference call.
The Covid-19 Pneumonia Virus
Mike Wells, Prudential’s chief executive officer, said the outbreak of severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2), the virus that causes Covid-19 pneumonia, has been hurting sales in China and Hong Kong, but that sales elsewhere have been strong.
At Prudential agencies, and in the company’s own offices, “we’ve been very fortunate,” Wells said. “We’ve had very, very few incidents of the virus.”
Prudential has tried to manage risk by encouraging people to work at home, splitting up work times, and taking other steps to keep people healthy, Wells said.