Prudential Life Insurance said Tuesday that its core profit declined 12.6% to ¥40.2 billion in the fiscal year ended in March from a year earlier due to the fallout of fraud involving former and current employees.
Insurance premium revenue fell 6.6% to ¥1,454.9 billion as the firm has voluntarily suspended sales activities for new contracts since Feb. 9 because of the scandal. New contracts tumbled 22.9% to ¥3,507.4 billion.
Higher operating costs related to measures to prevent a recurrence of the scandal also eroded the company’s profitability. The firm booked a special loss of ¥4.7 billion to cover compensation for customer damages.
It came to light in January that more than 100 former and current employees at Prudential Life had fraudulently received about ¥3.1 billion from roughly 500 customers.
The sales suspension remains in place through Nov. 5, putting further pressure on the company’s earnings.
Prudential Holdings of Japan, the parent of Prudential Life, saw its core profit decrease 20.4% to ¥165.2 billion. The company booked a special loss of ¥760 million for compensation following damages claims related to similar misconduct involving Gibraltar Life Insurance, another unit.
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