Prudential Life Insurance Posts 12 Pct Profit Decline

Tokyo, May 26 (Jiji Press)–Prudential Life Insurance Co. said Tuesday that its core profit declined 12.6 pct to 40.2 billion yen in the fiscal year ended in March from a year earlier due to the fallout of fraud involving former and current employees. Insurance premium revenue fell 6.6 pct to 1,454.9 billion yen as the Japanese insurance firm has voluntarily suspended sales activities for new contracts since Feb. 9 because of the scandal. New contracts tumbled 22.9 pct to 3,507.4 billion yen. Higher operating costs related to measures to prevent a recurrence of the scandal also eroded the company’s profitability. The firm booked a special loss of 4.7 billion yen to cover compensation for customer damages. It came to light in January that more than 100 former and current employees at Prudential Life had fraudulently received about 3.1 billion yen from roughly 500 customers. The sales suspension remains in place through Nov. 5, putting further pressure on the company’s earnings. Prudential Holdings of Japan Inc., the parent of Prudential Life, saw its core profit decrease 20.4 pct to 165.2 billion yen. The company booked a special loss of 760 million yen for compensation following damages claims related to similar misconduct involving Gibraltar Life Insurance Co., another unit. END [Copyright The Jiji Press, Ltd.]