Prudential 2002 Annual Report Download - page 65
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Please find page 65 of the 2002 Prudential annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.revenue in all other countries increased $22 million from 2001 to 2002. On a constant exchange rate basis and
excluding the impact of currency hedging, total segment revenues increased $1.041 billion, or 26%, from 2001 to
2002, for which the year-ago period includes the initial eight months of activity of Gibraltar Life. Excluding
Gibraltar Life, total segment revenues on a constant exchange rate basis and excluding the impact of currency
hedging increased $334 million, or 16 %.
2001 to 2000 Annual Comparison. Revenues increased $2.226 billion from 2000 to 2001, including
$2.026 billion from Gibraltar Life. Excluding the impact of the Gibraltar Life acquisition, revenues increased
$200 million, or 10%, from 2000 to 2001. The $200 million increase in revenues came primarily from an increase
in premium revenue of $152 million, or 9%, from $1.680 billion in 2000 to $1.832 billion in 2001. Premiums
from our Korean operations increased $97 million, from $188 million in 2000 to $285 million in 2001, as a result
of increased sales and strong persistency. Premium revenue in all other countries increased $55 million, from
$1.492 billion in 2000 to $1.547 billion in 2001, primarily as a result of continued strong persistency and new
sales in Japan and Taiwan. On a constant exchange rate basis and excluding the impact of currency hedging, total
segment revenues increased $2.369 billion, from 2000 to 2001.
Benefits and Expenses
2002 to 2001 Annual Comparison. Benefits and expenses, as shown in the table above under “—Operating
Results,” increased $781 million from $3.535 billion in 2001 to $4.316 billion in 2002, including a $552 million
increase from Gibraltar Life. Excluding the impact of the Gibraltar Life acquisition, benefits and expenses
increased $229 million, or 13%, from $1.771 billion in 2001 to $2.000 billion in 2002. The $229 million increase
in benefits and expenses came primarily from an increase of $164 million in policyholders’ benefits, which
includes the change in reserves for future policy benefits, and an increase of $56 million in amortization of
deferred policy acquisition costs. Policyholders’ benefits increased from $1.382 billion in 2001 to $1.546 billion
in 2002. The increase reflected a greater volume of business in force, which was driven by new sales, continued
strong persistency and the aging of business in force in markets where our operations are more mature, partially
offset by the impact of currency exchange rate fluctuations. On a constant exchange rate basis, total segment
benefits and expenses increased $876 million.
2001 to 2000 Annual Comparison. Benefits and expenses increased $1.911 billion from 2000 to 2001,
including $1.764 billion from Gibraltar Life. Excluding the impact of the Gibraltar Life acquisition, benefits and
expenses increased $147 million, or 9%, from 2000 to 2001. The $147 million increase in benefits and expenses
came primarily from an increase of $120 million in policyholders’ benefits, which includes the change in reserves
for future policy benefits. Policyholders’ benefits increased from $1.268 billion in 2000 to $1.388 billion in 2001,
primarily as a result of the greater volume of business in force, which was driven by new sales, continued strong
persistency and the aging of business in force in markets where our operations are more mature. On a constant
exchange rate basis, total segment benefits and expenses increased $2.046 billion.
Sales Results
In managing our international insurance business, we analyze new annualized premiums, which do not
correspond to revenues under GAAP, as well as revenues, because new annualized premiums measure the current
sales performance of the business unit, while revenues reflect the renewal persistency and aging of in force
policies written in prior years and net investment income in addition to current sales.
2002 to 2001 Annual Comparison. New annualized premiums increased $51 million from $692 million in
2001 to $743 million in 2002, including an increase of $123 million from Gibraltar Life and reflecting the
unfavorable impact of currency exchange rate fluctuations. On a constant exchange rate basis, new annualized
premiums increased $65 million from 2001 to 2002, including an increase of $127 million from Gibraltar Life. On
that basis, new annualized premiums from our operation in Japan were $541 million in 2002, including $234
million from Gibraltar Life, compared to $467 million in 2001 when Gibraltar Life’s sales force sold policies for
our existing Japanese insurance operation during a portion of the year, pending the completion of Gibraltar Life’s
reorganization. Since the first quarter of 2001, the Gibraltar Life sales force has distributed only Gibraltar Life
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