Q2 snap: $1.5bn LTC reserve strengthening
We calculate that 2Q18 was a 2% beat at the normalised EPS line. However, the focus is likely to be on the $1.5bn reserve strengthening of the long-term care business due to the removal of the morbidity improvement assumption. From an operating perspective, Individual Solutions was slightly below our forecasts but Workplace Solutions was ahead while Investment Management was in line. PRU delivered a normalised ROE of ~13.7%, which was a good operating result. Also, management has stated that it does not anticipate any impact on its future capital deployment plans. However, we believe it will be difficult for investors to look beyond the LTC issues today.Prudential is a parent holding company. Co., together with its subsidiaries, is an international financial services group with its principal operations in Asia, the U.S. and the U.K. In Asia, Co. has operations in Hong Kong, Indonesia, Malaysia, Singapore and other markets. In the U.S., Co.'s principal subsidiary is Jackson National Life Insurance Company. In the U.K., Co. operates through its subsidiaries, primarily The Prudential Assurance Company Limited and M&G Investment Management Limited. Co. provides a range of retail financial products and services and asset management services throughout these territories.
Formed in 2003 by an established team from Cazenove, one of the most respected investment banks in the UK, Atlantic Equities conducts and publishes fundamental, bottom up research on mid and large cap US companies.
Atlantic provide order execution through a wide range of DMA products and algorithmic trading suites.
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