(Reuters) – Prudential Financial Inc reported a drop in fourth-quarter profit on Tuesday as a global market rout pressured the life and health insurer’s assets under management (AUM).
The previous year was marked by heavy losses in the capital markets amid uncertainty triggered by the war in Ukraine, decades-high inflation and fears of an imminent recession. The benchmark S&P 500 Index closed 2022 roughly 19% lower.
Amid this economic backdrop, investors have rushed to pull capital from risky assets and equities, choosing to instead hold cash or move towards safe-haven bond markets.
The company reported a 21% decline in AUM in the quarter to $1.38 trillion.
“Our fourth quarter operating results reflect lower variable investment and fee income, partially offset by improved COVID-19 mortality,” said Chief Executive Charles Lowrey in a statement.
Last week, rival MetLife Inc’s profit also declined due to market weakness, dragging investment returns at the insurer
Shares in Prudential fell 2% in extended trading after results.
Prudential had said last year it was making progress in moving its business focus from market-sensitive revenue segments to more stable and recurring sources of income.
The insurer’s after-tax adjusted operating income was $907 million, or $2.42 per share, in the three months ended Dec. 31, compared with $1.23 billion, or $3.18 per share, a year earlier.
(Reporting by Manya Saini in Bengaluru; Editing by Krishna Chandra Eluri)
