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U.K. Pru to Delay Split From Jackson

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What You Need to Know

  • Prudential did not include Jackson’s results in a companywide performance snapshot.
  • Sales of variable annuities were up in the first quarter.
  • Sales of fixed annuities and non-indexed annuities were low.

Prudential PLC said Thursday that it needs more time to separate from Jackson Holdings LLC — the leader in the U.S. individual deferred annuity market in 2020.

The London-based company reported that it now expects to complete a Jackson “demerger” transaction sometime between July 1 and Dec. 31, rather than by June 30, as it had predicted in  March.

Prudential plans to implement the demerger by giving shares of Jackson stock to its own shareholders.

In an announcement on the Jackson separation, Prudential PLC Chief Executive Officer Mike Wells said the company has received approvals for the demerger from regulators in Michigan and New York state.

Prudential will need to file a Form 10 with the SEC to register Jackson’s stock.

“Regulatory engagement on the review of the draft Form 10 continues,” Wells said. “The Form 10 will now need to be updated to include Jackson’s Q1 financial information.

Jackson is still on track to become a separate company, with its own stock listing, by the end of the year, Wells said.

The Companies

Prudential  has been trying to shift its focus to sales of insurance and related financial services in Asia and Africa.

It has no connection with Prudential Financial Inc. of Newark, New Jersey.

Jackson Holdings is the parent Jackson National Life Insurance Company, a large annuity issuer.

Prudential released some snippets of information about its financial performance in the first quarter, but it provided no information about Jackson’s performance.

Jackson generated higher individual deferred annuity sales in the United States in the fourth quarter of 2020 than any other insurer, according to Wink Inc.

The company´s share of the individual deferred annuity market increased to 8.8% in the quarter, from 8.5% in the fourth quarter of 2019.

In the first quarter, “Jackson’s new business premiums were in line with trends seen in the second half of 2020 and sales of variable annuities were higher than the first quarter of 2020,” Wells said. “Sales of fixed index annuities and fixed annuities in the same period remained at historically low levels following earlier pricing actions. There were no sales of institutional products in the period.”

Mike Wells (Photo: Simon Dawson)