Prudential 2012 Annual Report Download - page 48

The tables below present annualized new business premiums on a constant exchange rate basis, by product and distribution channel,
for the periods indicated.
Year Ended December 31, 2012 Year Ended December 31, 2011
Life
Accident
&
Health(1)
Retirement
(2) Annuity Total Life
Accident
&
Health(1)
Retirement
(2) Annuity Total
(in millions)
Life Planners ............................ $ 492 $195 $588 $ 72 $1,347 $ 437 $183 $454 $ 52 $1,126
Gibraltar Life:
Life Consultants ...................... 446 155 179 142 922 434 206 127 205 972
Banks(3) ............................ 1,253 37 13 119 1,422 382 46 23 149 600
Independent Agency .................. 79 202 50 29 360 179 189 18 73 459
Subtotal ................................ 1,778 394 242 290 2,704 995 441 168 427 2,031
Total ............................... $2,270 $589 $830 $362 $4,051 $1,432 $624 $622 $479 $3,157
(1) Includes medical insurance, cancer insurance and accident & sickness riders. The years ended December 31, 2012 and 2011 include $325 million and
$230 million, respectively, of annualized new business premiums from cancer whole life insurance products.
(2) Includes retirement income, endowment and savings variable universal life.
(3) Single pay life annualized new business premiums, which include 10% of first year premiums, and 3-year limited pay annualized new business
premiums, which include 100% of new business premiums, represented 74% and 19%, respectively, of total bank distribution channel annualized new
business premiums, excluding annuity products, for the year ended December 31, 2012, and 31% and 50%, respectively, of total bank distribution
channel annualized new business premiums, excluding annuity products, for the year ended December 31, 2011. Single pay and limited pay products
generally have less death benefit protection per premium paid than more traditional recurring premium products.
2012 to 2011 Annual Comparison. Annualized new business premiums, on a constant exchange rate basis, from our Life Planner
operations increased $221 million driven by higher sales in Japan of $177 million reflecting increased demand for U.S. dollar-denominated
retirement income products driven by a change in crediting rate that became effective in June 2012 and higher demand for yen-
denominated retirement income products in the corporate market. To a lesser extent, sales in Brazil, Korea, Taiwan and Italy increased due
to growth and the introduction of new products into these markets.
Annualized new business premiums, on a constant exchange rate basis, from our Gibraltar Life operations increased $673 million
driven by increased sales of $822 million in the bank channel distribution. Bank channel sales largely reflect higher sales of yen-
denominated single premium reduced death benefit whole life policies in anticipation of pricing changes effective January 2013 as well as
the benefit from actions taken by certain of our competitors to limit sales and lower crediting rates on similar products. Independent
Agency and Life Consultant sales declined $99 million and $50 million, respectively, driven by the discontinuation of certain products
previously offered by the former Star and Edison businesses and the expected attrition of former Star and Edison Life Consultants. These
decreases were partly offset by higher sales of cancer whole life products prior to a tax law change in April 2012 as well as increased
demand for U.S. dollar-denominated retirement income products prior to pricing changes in April 2012.
The table below present annualized new business premiums on a constant exchange rate basis, by product and distribution channel, for
the periods indicated.
Year Ended December 31, 2011 Year Ended December 31, 2010
Life
Accident
&
Health(1)
Retirement
(2) Annuity Total Life
Accident
&
Health(1)
Retirement
(2) Annuity Total
(in millions)
Life Planners .............................. $ 437 $183 $454 $ 52 $1,126 $430 $171 $366 $ 34 $1,001
Gibraltar Life:
Life Consultants ....................... 434 206 127 205 972 280 74 67 108 529
Banks(3) ............................. 382 46 23 149 600 186 45 35 75 341
Independent Agency .................... 179 189 18 73 459 4 51 2 1 58
Subtotal .................................. 995 441 168 427 2,031 470 170 104 184 928
Total ................................ $1,432 $624 $622 $479 $3,157 $900 $341 $470 $218 $1,929
(1) Includes medical insurance, cancer insurance and accident & sickness riders.
(2) Includes retirement income, endowment and savings variable universal life.
(3) Single pay life annualized new business premiums, which include 10% of first year premiums, and 3-year limited pay annualized new business
premiums, which include 100% of new business premiums, represented 30% and 50%, respectively, of total bank distribution channel annualized new
business premiums, excluding annuity products, for the year ended December 31, 2011, and 1% and 64%, respectively, of total bank distribution
channel annualized new business premiums, excluding annuity products, for the year ended December 31, 2010. Single pay and limited pay products
generally have less death benefit protection per premium paid than more traditional recurring premium products.
2011 to 2010 Annual Comparison. Annualized new business premiums, on a constant exchange rate basis, from our Life Planner
operations increased $125 million, including $84 million of higher sales in Japan driven by growth in average premium per policy reflecting
the increasing demand for both yen and U.S. dollar-denominated retirement income products. Sales in Korea increased $21 million driven by
growth in average premium per policy resulting from increased sales of retirement income products and variable annuity products. In Brazil,
sales increased $11 million primarily driven by sales of whole life products due in part to an increase in the number of Life Planners.
Annualized new business premiums, on a constant exchange rate basis, from our Gibraltar Life operations increased $1,103 million,
with Star and Edison contributing $763 million to this increase. Annualized new business premiums for Star include approximately $128
million of sales from an increasing term product that was discontinued upon completion of the merger with Gibraltar. Excluding Star and
46 Prudential Financial, Inc. 2012 Annual Report