106 current and former employees were linked to misconduct cases.
Prudential Life Insurance Co. Ltd., the Japan unit of Prudential Financial Inc., reported an 84.3% drop in annualised insurance premiums from new contracts in the first quarter of its fiscal year, following a voluntary suspension of new sales.
For the three months ended 30 June, annualised insurance premiums from new contracts fell to $17.6m (JPY2.8b), whilst the number of new contracts dropped 90.7% to 7,378. New contract value fell 92.8% to $434.7m (JPY69b).
Prudential of Japan began a voluntary 90-day suspension of new sales on 9 February after disclosing misconduct by current and former employees that cost hundreds of customers about $19.4m (JPY3.08b).
The suspension was later extended as the insurer worked on operational changes.
The company said most of the new contracts written during the period were for existing corporate customers adding new employees to business insurance policies. Some contracts were also accepted for customers who had started the process before the suspension.
Despite the decline in new business, net profit rose 64.6% from a year earlier to $66.8m (JPY10.6b).
The insurer’s contract value fell 1.4% to $284.1b (JPY45.09tn), whilst annualised insurance premiums from existing contracts declined 1.3% to $5.6b (JPY883.3b). The number of contracts held fell 1.5% to 4.6 million.
Prudential said it used price fluctuation reserves to cover the impact, which contributed to the higher net profit.
The insurer’s investigation into customer dealings, launched in August 2024, found 106 current and former employees involved in misconduct.
The cases included soliciting money from customers for proposed investments or profit-making schemes, with some funds being embezzled.
Of those cases, 41 current and former employees improperly received a total of $15.9m (JPY2.52b), affecting 188 people.
($1.00 = JPY159.98)
