Prudential Financial, Inc. (PRU - Free Report) has inked a deal with Seoul-based KB Financial Group Inc. (KB) to sell its South Korea-based insurance arm, The Prudential Life Insurance Company of Korea, Ltd. The new transaction, following the fulfillment of customary closing conditions and regulatory approvals, is projected to close by the end of 2020.
Per the agreement, Prudential Financial will sell 100% of its life insurance business in Korea for 2.3 trillion Korean Won or $1.9 billion.
Prudential Korea, formed in 1989, provides life insurance and other insurance products through its signature Life Planner business and growing general agency channel. In the last year, it was the eleventh-largest insurer in the South Korea market, with $17.1 billion in assets. For thirty years, Prudential had an active presence in South Korea.
The new deal is in line with the focus of the company on Japan and higher-growth emerging markets globally. As a result of the transaction, Prudential is projected to record an after-tax loss of about $300 million in net income. The sale proceeds are expected to be used for general corporate purposes.
The agreement marks the leading U.S. life insurer’s exit from the South Korea market after three decades.
Shares of this Zacks Rank #3 (Hold) multi-line insurer have lost 42.1% in a year, compared to the industry’s decline of 24.1%. Nevertheless, the company’s policy to ramp up growth and solidify its capital position should continue to drive the share price higher.
Stocks to Consider
Some better-ranked stocks in the same space are James River Group Holdings, Ltd. (JRVR - Free Report) , Kemper Corporation (KMPR - Free Report) and Cincinnati Financial Corporation (CINF - Free Report) each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks (Strong Buy) here.
James River Group, Kemper and Cincinnati Financial surpassed estimates in each of the last four quarters, with average positive surprise of 12.36%, 12.38% and 17.86% respectively.
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