US life insurer
Prudential said new premiums in variable annuity products sold in the US by its subsidiary, Jackson National Life Insurance, plunged by 28%, explaining that distributors are “still adjusting” to the Department of Labor’s (DoL) fiduciary standard announced earlier in the year.
Set to go live in April, it requires specialist retirement advisers to put their clients’ interests first and tightens rules about the sale of variable annuities, which offer a variable rate of income often above a guaranteed minimum level.
Questions have been raised on whether Donald Trump’s election win signals the death knell for the DoL reforms. If implemented, it is expected to dampen appetite for the life industry’s most lucrative products.
New business profit at Prudential’s US business fell 13% to £485m.
Between January to September, Jackson’s separate account net flows totalled $4.6bn contributing an 8% year-to-date increase in separate account assets to $145.6bn at 30 September 2016.
Eastspring
The insurer’s Singapore-based asset manager Eastspring Investments reported total funds under management of £115.3b as of September 2016, compared to £89.1bn at the start of the year, with more money coming in than going out in the third quarter.
UK business up
Meanwhile in the UK, Prudential reported that new business profit from retail sales sky-rocketed by 41%, driven by sales of its with-profits product range.
APE sales from customers choosing our PruFund retail investment option increasing by 65%, with assets in the range at £22.8bn, 38% higher compared to the start of the year.
In August, Prudential-owned M&G Investments recorded £7bn in net outflows over the first half of the year, and saw a 10% slide in profits.
In the third quarter, M&G’s retail asset management business halved the level of net outflows to £1.1bn, from £2bn in the Q2.
