By Ben Berkowitz, REUTERS
7:14 AM PDT, May 3, 2012
Prudential Financial, the second-largest life insurer in the United States, said it was hurt by charges for value changes in derivatives tied to the weakening of the Japanese yen.
Prudential's peer MetLife was also hurt in the first quarter by derivatives, though in its case on interest rates.
Prudential reported a loss of $988 million, or $2.09 per share, compared with a year-earlier profit of $539 million, or $1.10 per share.
On an operating basis, the company earned $1.56. Analysts polled by Thomson Reuters I/B/E/S expected earnings of $1.71 per share.
Prudential said it reached new record values for annuities, retirement accounts and assets under management in its asset management business. Operating income in U.S. individual life insurance rose as fewer people died, but the group life business swung to a loss on higher claims.
Shares fell 4.5 percent in after-hours trading on the news.
In addition to Prudential and Allstate, insurer The Hartford Financial Services Group reported results as well.
The Hartford, which is in the middle of a breakup, earned $96 million, or 18 cents per share, in the quarter versus $501 million or 99 cents per share a year earlier.
On an operating basis the company earned $1.25 per share. Analysts expected earnings of 91 cents per share.
Amid pressure from its largest shareholder, hedge fund manager John Paulson, to take action and improve its industry-low valuation, the company said in March it would shut down its annuity business and sell off some of its life operations.
Hartford said pricing rose in its commercial segment, mirroring gains made by competitors, but worsening trends in workers compensation dragged on results, as did the need to add to reserves for prior years in the commercial business.
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