Prudential Financial shares rebound on Tuesday, company signs reinsurance treaty with Somerset

A new business flow reinsurance treaty has been signed by Prudential Annuities Life Assurance Corporation, a subsidiary of Prudential Financial Inc (PRU), and Somerset Reinsurance Ltd, a leading provider of reinsurance solutions to the life insurance and annuity market in the United States.

Prudential shares closed higher for the fifth time in the past ten trading sessions in New York on Tuesday. The stock went up 1.15% ($1.06) to $93.31, after touching an intraday high at $93.75, or a price level not seen since November 8th ($95.01).

Shares of Prudential Financial Inc have risen 14.42% so far in 2019 compared with a 23.34% gain for the benchmark index, S&P 500 (SPX).

In 2018, Prudential’s stock went down 29.07%, thus, it again underperformed the S&P 500, which registered a 6.24% loss.

Under the terms of the agreement, Somerset is to re-insure a quota share of the new fixed indexed annuities, which Prudential Annuities Life Assurance Corporation sells.

“Somerset is pleased to have such an important new business relationship with PFI,” Patrick Kelleher, Somerset’s Chief Executive Officer, said in a statement.

“Somerset has proven its ability to help business partners like PFI compete in new product lines, improve product offerings for their distributors and, ultimately, offer valuable retirement products to their customers. This transaction allows us to add the largest life insurance company in the industry to our growing client base,” Kelleher added.

Analyst stock price forecast and recommendation

According to CNN Money, the 17 analysts, offering 12-month forecasts regarding Prudential Financial Inc’s stock price, have a median target of $99.00, with a high estimate of $110.00 and a low estimate of $85.00. The median estimate represents a 6.10% upside compared to the closing price of $93.31 on November 12th.

The same media also reported that at least 11 out of 19 surveyed investment analysts had rated Prudential Financial Inc’s stock as “Hold”, while 7 – as “Buy”.