Prudential 2002 Annual Report Download - page 119
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Notes to Consolidated Financial Statements
11. REINSURANCE (continued)
Reinsurance amounts included in the Consolidated Statements of Operations for the years ended December
31, were as follows:
2002 2001 2000
(in millions)
Direct premiums ........................................................... $14,206 $13,066 $10,686
Reinsurance assumed ................................................... 114 95 86
Reinsuranceceded ..................................................... (789) (684) (591)
Premiums ................................................................ $13,531 $12,477 $10,181
Policyholders’ benefits ceded ................................................. $ 821 $ 845 $ 642
Reinsurance recoverables, included in “Other assets” at December 31, are as follows:
2002 2001
(in millions)
Lifeinsurance .......................................................................... $ 734 $ 795
Property and casualty .................................................................... 613 694
Other reinsurance ........................................................................ 71 82
Total reinsurance recoverable .............................................................. $1,418 $1,571
Three major reinsurance companies account for approximately 50% of the reinsurance recoverable at
December 31, 2002. The Company periodically reviews the financial condition of its reinsurers and amounts
recoverable therefrom in order to minimize its exposure to loss from reinsurer insolvencies, recording an
allowance when necessary for uncollectible reinsurance.
12. SHORT-TERM AND LONG-TERM DEBT
Short-term Debt
Short-term debt at December 31, is as follows:
2002 2001
(in millions)
Commercial paper ....................................................................... $1,265 $3,182
Notespayable .......................................................................... 1,566 1,469
Current portion of long-term debt ........................................................... 638 754
Total short-term debt ..................................................................... $3,469 $5,405
The weighted average interest rate on outstanding short-term debt, excluding the current portion of long-term
debt, was approximately 1.6% and 3.9% at December 31, 2002 and 2001, respectively. The current portion of
long-term debt at December 31, 2002 includes $300 million of surplus notes due in 2003.
At December 31, 2002, the Company had $3,284 million in committed lines of credit from numerous
financial institutions, of which $195 million were used. These lines of credit generally have terms ranging from
one to twenty-five years.
The Company issues commercial paper primarily to manage operating cash flows and existing commitments,
meet working capital needs and take advantage of current investment opportunities. At December 31, 2002 and
2001, a portion of commercial paper borrowings were supported by $2,500 million and $4,000 million of the
Company’s existing lines of credit, respectively. At December 31, 2002 and 2001, the weighted average maturity
of commercial paper outstanding was 19 and 21 days, respectively.
Growing and Protecting Your Wealth118