Prudential grows long-term care reserves, draining profits

Life insurer Prudential Financial scrapped an assumption that its policyholders would be less likely to get ill over time, contributing to a $1.2 billion charge to net profits.

The New Jersey-based insurer had previously factored in an expected 1% per year improvement in morbidity over the next 20 years, but removed this from its calculations of liabilities in its long-term care business following its annual review of actuarial assumptions.

The change caused Prudential to adjust the amount it

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