Prudential `Certainly Open' to Deals as Rivals Retreat, CEO Saysby
Strangfeld says Pru has shown a pattern of being opportunistic
Deutsche Bank's Kinar notes that blocks are `on the market'
Prudential Financial Inc., which expanded in recent years by acquiring units from rivals that were narrowing their focus, would be open to additional deals to add blocks of life insurance coverage or pension assets, Chief Executive Officer John Strangfeld said.
“We’re certainly open to those sorts of things,” Strangfeld said Thursday at an annual presentation of the Newark, New Jersey-based company.
Prudential, the second-largest U.S. life insurer, expanded in 2011 in Japan by buying the Star and Edison units from American International Group Inc., which was selling assets to help repay a U.S. bailout. Then in 2013, Strangfeld added a life business from Hartford Financial Services Group Inc., which was simplifying operations after pressure from hedge fund investor John Paulson. More recently, Prudential has taken on pension liabilities and assets from large employers.
Yaron Kinar, an analyst at Deutsche Bank AG, asked whether Strangfeld’s next move would be in pensions or the addition of a book of policies from another company. “I think there may be a few blocks out on the market now,” Kinar said, without specifying who would be selling.
Genworth Financial Inc. has been exiting some businesses. And AIG, which is being pushed by activist investor Carl Icahn to boost returns, is considering the sale of blocks of life policies, people familiar with the matter said last month. Strangfeld said he likes to do deals, but is also content to focus on internal growth.
“We’re feeling very focused on our core businesses,” the CEO said. “But we’ve shown a pattern over time, more in certain phases of the cycle than in others, of being opportunistic in a variety of different ways.”