Prudential Financial says it plans to stay in Japan “for decades to come” even as a prolonged sales suspension at its main life unit is expected to cut 2026 pre-tax adjusted operating income by US$525m-US$575m.
At a 21 April business update call, chairman and chief executive officer Andrew Sullivan told analysts that Japan remains “one of the top insurance markets in the world” and that Prudential is “still very committed”, adding that it will “keep attacking this marketplace”. Sullivan said the company is moving away from a new business-driven sales approach because “it drove short-term behaviours and it produced income instability in the field force”.
The insurer estimates a further US$400m-US$450m drag on 2027 pre-tax adjusted operating income, driven mainly by the annualised impact of higher surrenders and lost new business in 2026, plus the cost of restarting sales. Prudential’s finance chief said the group does not expect a material impact on capital or solvency ratios, while warning that each additional month of delay beyond early November would add about US$50m-US$60m to the 2027 hit.
In January, the group disclosed that an internal probe had found staff at its Japanese operation had improperly taken about JPY3.14bn (around US$19.72m) from customers, with roughly 106 current and former employees linked to solicitations involving about 500 customers for unapproved products, including cryptocurrencies, and executives pointing to distorted incentives in a commission-heavy pay set-up.
Prudential extended a voluntary halt on new sales at Prudential of Japan (POJ) by a further 180 days through 5 November after concluding that the “scope and complexity” of governance and operating changes needed was greater than previously expected. Sullivan said POJ is undergoing “meaningful transformation and further oversight”, including an independent third-party review of its management system that is expected to take several months.
Japan’s Financial Services Agency is engaging with the company as the remediation work continues, and the regulator has said it plans on-site inspections to examine the parent company’s awareness and involvement in local sales policies.
