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Prudential Financial IncPRUCOMMENTFeb 04, 2015Stock price when the opinion was issued
As of Jun 16, 2026. Market Open.
An Asian pure-play in insurance. The overall Asian market was down last year. They achieved all their growth goals in the past year, though. They will benefit from long-term secular trends in Asia. He expects good penetration rates in China where the middle is growing, so PRU is well-positioned. Today, he heard that Sun-Life is taking a trip to China to learn about that market.
US Lifeco vs Financials PRU-N is at risk to interest rates on their premiums collected as he thinks yields will remain neutral. He is not keen on BAC-N either at this point for the same views of the yield curve. Things can't get any better for each right now -- a no man's land right now. He sees a bit better bid for Lifecos, but mostly from a defensive position. There are more compelling areas than these two spaces.
Insurers make their money in 2 ways. Basically selling insurance and hoping that losses are less than what they got on the premiums, but also make money investing the premiums while waiting for the loss experience. When interest rates are high, it is easy for insurance companies to buy very safe bonds, invest those unearned premiums and rake in the spread. However, when they are low, it is tough for them.