PRU - Earnings call transcript Q3 2020 | Prudential Financial, Inc. 5.62

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Prudential Quarterly Earnings Conference Call. [Operator Instructions] And as a reminder, today’s conference call is being recorded. I would now like to turn the conference over to Mr. Darin Arita. Please go ahead.

Darin Arita

you our thank and morning for call. joining Good are Chairman Andy and Prudential Head on Bob Lowrey, call today’s Chairman; Representing CEO; Charlie Falzon, U.S. of Sullivan, Vice Financial International Businesses; Head and Businesses; Officer; Officer. and Ken Principal Scott Accounting Rob of Tanji, Sleyster, Controller Axel, Chief

we make include results start then we forward-looking the is that prepared actual statements. differ Ken, with questions. materially predictions your will by Charlie, It take We and Today’s may from Rob today. comments and will presentation may possible

this addition, references non-GAAP In may presentation to measures. include

For and be the a slide differ the forward-looking reconciliation to appendix on actual that GAAP of the such measures which see in at website our to to the could titled that, today’s Charlie. presentation, the Forward-looking to comparable investor.prudential.com. materially results found factors in over With please measures from Statements those discussion can it I’ll and of statements, Measures cause hand Non-GAAP

Charlie Lowrey

Good To and for morning, remain you safe everyone healthy. thank hope Thank families colleagues your I you, you, begin, Darin. and and today. us joining that

needs well and As serving continues, current we intently company a live as in our we work, the caring pandemic other for and stakeholders as the in focused on employees evolving which customers remain the and global of environment. health our communities as the

ideas. Prudential the of with the has ways shown on solving than are few of now fulfilling by our of needs financial the pandemic, allocation a our grateful proud updates and challenges. ever clients of Since in I’d challenges for have and who lives like and our changing beginning also we’re which world. better employees unique their serving in highlight providing incredibly portfolio commitment are asset company We on relying the of address the the and continued more that PGIM to dedication timely focused making our purpose to financial evolving customers,

to where are support based allowed In our and is global top of funds, companies of the Our the downside a success continue of strong to our offers challenges growth clients. upside businesses, year. pivot business opportunity, the we protection diversified performance which example FlexGuard this one model growing within when to net mutual and operational One us on annuity has ranked in buffered resilience, our U.S. customers face our product, their at flows assets. annuities and time protecting retirement new we U.S.

FlexGuard model Japan, of customized this sales Following for launch quarter, demonstrated to strong with continues its resilient Planner engaging as accounting the quarter. annuity accelerated market customers by our our highly gain our Life its personalized to be in sales continues And quarter. XX% in momentum, to and second to this approach

to execute steps including macroeconomic the program. expand cost on additional successfully quarter, savings the During our third taking we priorities despite backdrop, our challenging XXXX, for continue strategic to

We from navigate also us places strength on our environment. to sound to current continue balance of which footing in benefit the the changes sheet, rock financial solid

of our cost working, of we the $XXX generate our XXXX our and of in cost to savings total of XXXX, savings this ways our $XXX XXXX realized Slide priorities generate accelerating savings new year, efficiencies to On incremental exploring creating mentioned $XXX expect progress million on program. respect savings cost by call, the bringing now top $XXX of million. to end With were Through program that last of our And billion. rates to to across million Taiwan Based transaction million $X.X of realized changes Holding, shifting to interest we quarter quarter’s transaction approvals. to take by now an we Turning company additional and less sell on to reduce the potential sales X. all third proceeds additional approximately closed in finally, the of an plan. rotating we we received and on also regulatory products. certain sensitive in to the Financial mix, our And international rate markets to the and the steps announced expect to we Prudential XXXX exposure repricing of during while aggressively the existing agreement momentum close on to earnings continue quarter Korea to we subject solutions, to Prudential divest Taishin

guaranteed outcome in our like discontinuing of traditional on all on are annuities sales living we’re As focusing example efforts an we product, variable solutions, and annuities, our FlexGuard delivering with our benefits. protected

explore other also will business, of opportunities for blocks transactions. strategic and including We reinsurance

Slide X. to Turning

hold our to third highly end The continue quarter. we balance $X.X including Financial rock environment. its to growth, of the our level. our billion flexibility assets As future AA against us exceeds strength sheet, while to the execute at confidence and strength and we for financial financial manage Prudential business by the the market gives and that capital liquid solid current grounded the continue long-term the remain priorities, strategic navigating subsidiaries of

the severity while to duration We’ll the buybacks believe is have have details been provide finalized remain once better effect markets, continue we our more plans pandemic as board. its of uncertain. on restate We the been also and expected, XXXX to prudent monitor capital they the they highly and economy on approved previously and intend deployment the conditions by in year. don’t closely credit We than this this developing

adjusted quarter. $X.XX, highlight a part Turning income to after-tax variable for from now Slide which to investment share in businesses. in income strong and billion was moment quarter the third our X. adjusted operating results our earnings $X.X Pre-tax per across financial benefited the take I’ll was

of under The of XX% robust million, income performance offset and $XXX net individual investment by million appreciation. and less favorable income record operating revenues. business, adjusted in and due record net flows, mortality businesses our experience. of higher investment U.S. COVID-XX underwriting higher fee related driven by Our management reported PGIM annuities adjusted income in under reflects reported trillion net assets operating spread other by strong lower assets management $XXX growth market related driven $X.X to

business more over investment favorable and our that, more and you Thank turn the expenses performance grow, morning. this million, were adjusted third I’ll underwriting Rob reported businesses business on specific during partially for international to time investments your of quarter. With results joint from earnings by Our it spread. lower operating lower income details offset lower all $XXX as venture for net

Rob Axel

provide you, on Thank I’ll our brief on portfolio. are these international an how investment businesses, for businesses outlook our we U.S. Charlie. and update our update PGIM executing within and a on the strategy

Turning X. to Slide

earnings U.S. the We quarter Our net priorities. of from spread investment three progress on income. and diversified in a made key produce fees, underwriting businesses source executing

product and protecting continue simplify and we to mix, de-risk while pricing implement actions to First, our profitability. business

less Prudential rates. by discontinuing solutions in the impact sensitive Life pivoting variable Individual living annuities Income of of In our annuities Highest traditional are both mitigate products were guaranteed individual we further including interest Daily example, business, to we products. and Defined benefits, rate Income low to our sales For with repricing

single addition product of our life universal sales July. suspending guaranteed in In to life

As the we to a expect sales lower near-term. continue individual move result these of actions, in and to individual annuities life

we continue retirement our to addition, in crediting rates adjust In business.

COVID the as we’re Second, way the needs including its to change, work. customers we evolving in and of impact, economic our response

optimize real savings new locations and as ways continue adapt technology, remote our a footprint of cost more to estate use benefit in effectively of expect and additional recognize we We workforce. to expand from the working to develop efficient

originally have opportunities increase addressable our committed customer earnings improvement $XXX our third, further our And resulted in we remain expanding improve are efficiencies another As Charlie to to XX% a in these experience million planned target. mentioned, market. and

P&C in life customers enrollment For and the quarter, platform the period we IQ example, onboarding continue to from training in fourth strong in health the interest we And business. accelerate see lines annual agent care, and preparation our for our Assurance of processes. Medicare

the that sales we seeing, is we’re were into weeks we demand driving growth. annual three with pleased customer enrollment only While considerable period, which the were

and across us strategies resilience capabilities classes, to to to fixed global public manager higher real returning strength a amidst strong estate industry-wide Slide dislocation. of business income, across capture alternatives, especially turning equities, the X, asset to global and PGIM’s income model. Now top and continue position is investment investment PGIM performance flows favorably its diversified multi-manager private continues investment generating demonstrate that and and XX

the diversified moderating over institutional net fixed Our strong flows strong quarter, benchmarks. strategies, from segments year We continued investment by over capabilities as client management has investment coupled $X.X assets $X performance, outperforming partially flows of well long-term including as record regions billion by of third-party and quarter, led across billion equity classes, income flows appetite for a investment of offset and the $X.X growth. trillion asset assets than during XX% $X continued under their by PGIM’s outflows. This a to billion with retail investment driven ago generated of more remained performance performance robust management level appreciation. reached driven under flows, market strong up XX% of with

year franchise the asset strategies billion, platform investments of flows. public quarter, generated it demand, up second in the PGIM’s year-to-date the benefit our years as growth ago continues suite PGIM’s the investments by on $XX.X Our has to XX% income distribution of And being in resulted and management. the leading driven to from fund our mutual U.S. product several and customer ranked average under based franchise. combination of fixed past and development highest performance assets in compared fund were over position management the net of fees flows broad

agency in other-related quarter seed the operating in and PGIM’s revenues. production the for by investment strong by increase aided higher fees. XX% margin co-investment loan increase record an addition, In driven other-related earnings, high was revenues an and incentive exceeded

increases focus As growth generating on fund margin leverage. delivering operating we continue to investments efficiencies to on and from

expect the range with market While cycle. vary conditions, across the margins PGIM’s we in will operating to margin remain XX%

insurance other Turning on multi-channel X, distribution focused our differentiated markets. to as life have international model, includes growth well business where operation, as a our we high Slide operations Japanese

this continuing products offer. for retirement channels and Our of strength we and demonstrated quarter the the the our customer distribution protection sales demand

also repricing We pulled and expect XX%. were we total fourth level actions. the bank current a agent of quarter by due channels And independent the forward consultant, believe sales into increased a degree in lower life we U.S. Current across of restrictions quarter X% product Life therefore sales have Gibraltar’s U.S. sales employing in be stable interest Planner, with channels normal of rates. trend exposure face-to-face dollar low impacted adjusted XXXX. the and of income non compared quarter given by this to to more distribution time repricing benefited headcount recruitment a easing model, Planner sales virtual Gibraltar’s easing to resignations. the of sales Similar quarter, Planner increased August. from ahead COVID Our due ago pandemic tools in in and to Life compared higher Planner of are year denominated Japan, restrictions. the resilience Life increased and a to reflecting over year ago, And higher operating sales in for related products. beginning to XX% levels returning dollar anticipate Life continued to to continue also sales to more lower

We and have taken to become continue more pricing actions we’ll opportunities efficient. to identify

our In COVID addition, had primarily Gibraltar, support will we expect costs we $XX of response in which consultants life moderate in million future quarters. to

to to broad conservative commitment a reflects turning high asset liability we framework. diversification risk and interest our portfolio robust Slide rate practices, management Now that X, disciplined quality management have investment a

leverage our longstanding PGIM’s credit below deep experience with also There slowdown quarter placements in classes, losses private year-to-date, pace across the has and its expertise year, We first multiple and this credit impairments estate. since in migration asset migration including and the been real of expectations. a of and

with emerge quarter, in that Ken. we were capitalized well just $XX I’ll million. the We remain For might over And weather, confident credit to were the hand it future. to losses whatever that, third

Ken Tanji

$X.XX earnings which Thanks, income and on in adjust the basis. the on resulted in third million. to of results. which insight first, million worth for into income is provides then Slide variable quarter following $X.XX expectations XX, cents the Rob. an third adjusted relative in for Pretax fourth quarter share earnings investment per third We quarter, outperformed I’ll operating the begin quarter, our $XXX items: after-tax was

This estimate experience Second, claims $XX a of seasonally $XX retirement, includes an we COVID-XX adjust million fourth in underwriting for and the lower net and by million. quarter. experience gains reserve

higher primarily investment of disposition rates net we Fourth, million we the due net and implementation to investment reflecting Third, million costs. reduced $X anticipate $XX by to items operating new $XX yields last, difference expect to will in between million expenses the lower seasonal we money be COVID-XX be and in we fourth fourth to the Fifth, expect portfolio. our and expenses quarter. per And the costs due earnings other quarter, quarter, underlying that, be the All for effective from our from note takeaway last share items increased of tax quarter quarter including rate third quarter, us to of quarter-end. expect would to $X.XX. quarter. fourth to power items. benefit combined These exclude fourth markets to for the the specific that items as fourth if you share a is the get $X.XX be higher normalize equity The slightly baseline key earnings income per

While in the to note please we items provided may fourth share earnings these be that, per factors that consider, other have there affect quarter.

forward, end addition, by have of In benefits cost the the savings look we from as we expected program by $XXX million our XXXX. increased

largely savings We in expect incremental be net and will XXXX. with self-funded benefits these XXXX emerging

We million will this impact $XX our depend as infection pandemic our outlook, deaths we and factors, medical of due operating our the XXX,XXX pandemic. costs to fatality updated lower through impact we operating the by expect includes million. geographic million partially update net of continue at XX, variety COVID-XX to provide in $XX February. baseline costs actual $XX to the additional travel mortality program details to U.S. and offset a COVID-XX. an operating incremental of quarter due impact million, unchanged The million rates, progress expenses. call such The Based in will for remains of of fourth treatments. of on additional incremental includes the $XX sensitivity Slide and and about estimated considerations, a in earnings of income potential quarter. on entertainment testing on Also, fourth be This $X on provided the On a

Slide Turning funding. maintain capital robust position to continue adequate XX, and sources of to we a

parent AA liquid company at are sources fixed financial substantial we charges. And three have targets. assets Our And than greater the of capital annual position that we have times funding. our exceeds strength

proceeds Our include flow of and company businesses facilities. of capital our of billion other funds the the parent at cash the from the sources Prudential cash free the and at sale liquid continuing Korea, assets were of $X.X other which and end quarter, from includes

to during third we summary, to XXXX. quarter, in Turning Slide execute for XX the our priorities and on continue successfully strategic

– our cost and flexibility changes additional we economic navigate to balance We includes continue rock taken expand gives the our benefit us which steps solid strength environment. to and have this from the in to savings confidence which program, the of sheet,

it Now your for over operator to I’ll questions. the turn

Operator

Erik question our Bass Research. Instructions] [Operator Autonomous you. the is will first Thank from of And And come open. line of your line

Erik Bass

And of much expense efficiency initiatives Thank business some the details you. you of come to provide how reappraisal cuts expect reflecting much additional Can savings more the volumes of on you sort where are revenue in from? are how the and environment?

Ken Tanji

a And Ken. and our continuous year, capabilities Eric, in improvement businesses earlier identify, and this this is I’ll background, business start. It it’s it’s place of functions. just by way our put implement and Phil us Waldeck, prioritize led to one given mindset. of U.S. all office leaders, of senior involves and of the transformation by we all a with our

through across procurement efficiencies And of through company. engineering, so so combination automation a it’s process transformation finding service we’re strategies, combining the client centers, and

driving what’s generally, that. that’s So

Andy Sullivan

add, improvement, and a just would process really applying or business I levers. volumes core is Andy. where reduction it’s technology to and we’re costs hit revenues. It efficiency able of it’s to Eric, And not number related

that So more it’s efficient becoming have. business at we the

Erik Bass

then activity Got to all industry. it. Thank transaction And the increase you. your individual talked life see being you’ve sort and for options about And across started in on annuities in-force table we’ve blocks. the an of

and you’re what seeing in market? little spread buyer hoping like about you the interest the bit bid-ask talk can in maybe a of for liabilities So yours, current terms

Charlie Lowrey

Sure. is This Charlie.

take to past But been Eric, we’ve business change to at then high really of our Andy. couple active level in it you know, of it Let mix. beginning over me turn and the a kind over years,

and in have Poland, now Taiwan Italy, in you we’ve and Korea, focus continue mix sold know, as we and agreement our earnings our internationally. rotating markets to on to growth operations So higher

time, decisions make caveat explore that complex and solutions in focus we’ve Now on within the U.S., are and explore that less economic simpler are And And away us lifetime the business, us what certain to of rate a sure we’ll in said products. and non-guaranteed making to said time products. But good seen these in and in have is interest VAs seen at pivot blocks. looking types income you’ve transactions they potentially more of our want terms business pivots made sensitive pivot market it to we we’re accelerate transformation. de-risking I’ve the sale and you’ve the And add want that capitalized changing to to reinsurance of of from a our with take also same we’re our less we individual the options, business. sensitive shareholders. at in the But I’d specifically, to path annuities the major guarantees that life our we best interest as and the life that

all to take to these we that? add things go going Andy, know as forward. we’re into if So account want don’t I on to you

Andy Sullivan

would Yes, specific we of just marketplace you any add quote about will think these asked I deals for also maybe and on. going the not I what’s transactions types are – Eric, that on

think that I you value blocks I are out. important that think that of is, takeaways business, these not we’ve certainly think discuss. the generally I of and I a is marketplace. fully look we think has block One if two number our the at And of in appreciated been, should its business there transactions proven recent believe

capital types The that capacity. moving is and other these of that thing deals, is towards, there there’s

and so. we’ve when work begun alternatives certainly something to said, Charlie do we more on to as have – we’ve these we’ll So report

Erik Bass

for comments. the Great. Thanks

Operator

you. Thank

from question Lee next Partners. the & line with will come Dowling Humphrey of Our

Your open. is line

Humphrey Lee

the sheet, you sentiment share about balance – what that repurchase yours in breach buyback? time, given guess, to your to I all – what comfortable I’m make to confidence not our you need year, comments, thank of morning concern, and do credit this decision at trying feel to kind your to Good see resume kind the same towards of you taking for the reinstate questions. just your order and just

Charlie Lowrey

Humphrey, So it’s Charlie.

that depth paused at with Let framework this, pandemic, duration really visibility possible about cycle, second into the until be take before the better in we share In have may it’s But line a the of have place, credit the we the one. in a risk me stab that and still we us. the recession repurchases and which quarter.

when financial share flexibility the And our going with we’re front strength unknowns resume I we our clarity that maintain to focus mentioned, of We’re with of timing But of going many you plan how the buybacks, us. into then, by issues and until just we’ll the and share resiliency. in to our those to still financial get on maintaining much.

Humphrey Lee

I clarification. just guess for quick a

intend suggest some So to of preclude reinstate year. you do this strength does from your you But capital it acquisitions? you – using for not buyback

Charlie Lowrey

a Not take because we’re to to maintain measured necessarily, very want again, but financial flexibility. our take going approach going to we’re to that, – we

we So comment or at that time, that go capital we allocation capital outcomes hard capital to a particular ensure we’re and general capital we maximize and our optimization, take to at going shareholders. transaction. we’re for optimizing do and internationally, deployment comment step back in both the again, that you’ve going strength which look more forward. resiliency across this can internationally. we’re as for want businesses, domestically not to optimize seen flexibility we’re about how in financial the a us business of and we’ve to take But think employment. going moment on ways to our make with, environment to as if a some for look and the make operating continue just our And sales look specific but We about our again, I we same and done financial maintain But we’re any sure

Humphrey Lee

next That question my to makes sense. related Assurance IQ. And then is

it’s about, I the So quarter, far of prepare very terms early think, you’re you in the in activities in with still granted, the talked remarks, customer demand. so the excited

those see not was, think but the you similar you a you of then the incoming cutoff saw were able demand, challenge kind last I to you that demand. – strong year – of processing saw

you demand terms period? the talk – so you kind enrollment stand far your can like to about maybe in like, capacity So for how of relative of where

Andy Sullivan

Andy. Humphrey, Yes, it’s

sure take So from your I’ll discussed were to lessons much with direct better annual from carriers, a done of gives agent, we than which began which perspective and of with more last for enrollment in that lot recruiting in was flexibility lot this sort as and question. period. year, last contract we a it prepared to this licensing And July, learned we earlier us health more the the we’ve We year make bring year much a agility. agents heavily on And invest month training. year. We the

what off But than three So certainly we about about said, stronger the XX% we’re advantage Medicare we’re had that of in that’s enrollment December. XXXX. of we investments that evidence we’re season. see transactions Having into paying repeating annual having are that two our Rob weeks period and only industry-wide weeks and performance said last the the first of two occur in weeks the

we’d what days, early in perspective see while early definitive from draw like a certainly, growth conclusions. it So these to too we

Humphrey Lee

Assurance for and the preparedness you that given the positive do turn Do fourth like you the think seeing then in quarter? could you’re already some IQ of you’re feel place, activities

Andy Sullivan

Yes.

had million the for materials, we a given our in about think I fourth walk $XX to quarter.

Humphrey Lee

you. Thank it. Got

Andy Sullivan

number I million, $XX wrong. had was Humphrey. that Actually It

Sorry, I off, line. wrong the was at looked

Operator

question you. from line next Thank with our And the Evercore. Gallagher comes of Tom

open. is line Your

Tom Gallagher

the on now you in risk recently. capital free as do of Charlie you to deal or M&A I there from to market be, because my point, have transfer back also circle buybacks were activity, first at there question, more do we up ask say capital if deployment just XXXX happens we’ll on wanted about more preference think than if this particular, and a things

want you’re is, view this M&A point? what curious, do buybacks or So at more if to to likely your

Charlie Lowrey

These capital I to would for One, think the Thanks long take transactions and through caution time, Tom. Yes, we’re thinking have up things. the immediately. to in I guess again, therefore free question. a we going of that. a people couple

deal. where right? price fairly to market. we a the think on I there things some on hand stock it Secondly, the depends other there’s before, have could said be very the is point, our is, On What your given high interesting hurdle,

short-term have against those we’ll have going opportunity weigh And if that’s two balance at and there. you price So accretion we’re And from to the the repurchase to the stock growth. to set will buybacks, out time. long-term stock

Tom Gallagher

That’s helpful. know wish what Assurance perspective? from on of you’ve Because M&A and contribution And recent define would the be more list international your done I IQ it interest in then times. you did

Andy Sullivan

Andy. work digital So service We’ve in over been couple your full very that resulted question. take growth value organic our We’ve proposition very years, we’ve financial platform. we’ve focused our lot talked and out invested the business. in good mobile, on and of in pretty wellness Tom, it’s I’ll the has in done strengthening last that heavily a retirement that about on

positive. If over you net very look time, it’s at been flows our

We of had in largest We’re corporate quarter. completing client ever year the sales. record our third our

maintains to pay consolidation we’ve great So seen success, the and we focus. success certainly growing even of great that seen organically business, though, attention the We’ve our space. this

Tom Gallagher

more, Okay. elevated like, is and a then Gibraltar. that’s I and something the XQ, lower Gibraltar? earnings to expenses would Is Or say of the And guess for continue temporary XXXX? follow-up, regarding guide into as is I just Thanks. the there that likely that level at expenses quick at higher for non-blockable

Scott Sleyster

We rate this like but consultants rate holding permanent. persistency, been was quarter. really commissions our one – Overall, a balance run commissions. level and policy by lower new more factors. deferrable not forth. adjusted this Gibraltar permanent. so customer to actually policyholder this things run immediate better to have compensation base as changed, first visits, a by here, structure The one Scott. million impacted $XX is impacted view With of production the Tom, we for then led And business servicing roughly our has life and this is two And

not we Now we to recapture cash life the up. while do quite to the have on Gibraltar’s that a By impact but pick the of flow. way, products, expect takes any this that a over

of have dollar which is rates. spread declines Second interest Gibraltar does block business, large to a due dollar erosion experiencing in U.S. U.S.

factors two those the really first. it’s the So thing combined biggest with

Tom Gallagher

thanks. Okay,

Operator

go Instructions] [Operator Citi. Next, you. we’ll Thank Suneet Kamath of the to with line

Your line open. is

Suneet Kamath

to if of I circle placeholder back quarters, right. we your Thanks. to fourth Assurance million assume IQ, $XX for wanted the

loss accretion think in put a would it versus I your guidance still the XXXX. year for EPS you at original

should So back assume back on a driving we and to do of a this had Or $X.XX track you sort think on then, to or – get that to just a Should full of can it’s you to it we curious, full-year kind can – to you XXXX. of you we think $X.XX that, the challenge do track got think what’s in your get year for there? get more back profitability I thing.

Andy Sullivan

equity model. we and March We out it model expanding business interest to this sensitive or happened building as to the So capabilities so have focused we’re that’s part more level, take not Suneet, model rates the business very got fold. very set a markets. on it’s up what raise that maybe pleased and this me timeframe, pleased bought in Andy. with I’ll we’re your Obviously, question. the even of And a immediately let of

and could for care we that mass more in needs So consumer middle the market market set.

as much the business revenues, and on not in continuing our products very about the we AOI. in we’ve platform. measured is the Success to how the about expand have much we very very and worked success for grow much us is that So us internally, of for is really breadth measured platform on is near-term the reach

is more leaned manufacturing we perspective, into with fee-based not And property again, advantage. perspective. these this that So and earnings began life, And are I always efficient. capitally you remind very recently, then saw lean immediately we’ve casualty. Medicare a into a distribution us And from bring from

as can. So really we expanding our out focus is as rapidly this

Suneet Kamath

your site, then picture the of I wellness latest at about work guess Okay. this talking spent of customers. lot reaching financial your question the And a a guys talked initiative, on employees about you your corporate when marketing we Day, bigger time at Investor

be to meetings to going in about this make do we’re still Day? talked opportunity you these how capturing environment sure at longer, that guys that you’re initiative are that for Thanks. guys assume modulating home group we that if So can’t that the you growth Investor the when at you you discussed work

Andy Sullivan

Yes. right in I draw would sharp work know with guess, on worksite more in its are very wellness our the voluntary number I’ll from I street marketing I distinction front, financial marketing, worksite employer. feet of Suneet, call the a And up what Andy. products which a

set a want building where about how of it. that they people much when, very was Ours capabilities and reach really could

digital couple what of So were sort we accelerating individuals large there adopt portion had we’ve to had At employers to our have a this was stages of were a if capabilities, our permissioned access built. we’ve that’s we goals. get my point words, accomplish. retail XX focus that platform. in million access our ahead to to this there what platform the we of the that retail XX that you remember, million we’ve real a – of trying point Prudential We’ve for at of to goals – access customers ahead through put our individuals our also And XX,XXX is they XXXX. can We’ve solutions into success, market,

reaching X.X program such that quickly with in this Pathways As webinars the at base even that’s it an example, And now our COVID to pretty able were Prudential folks. make about million point, digital upon we expand came capabilities capabilities. as were and purely

at And platform. built all. current environment it’s really about whole don’t how hindering So actually we we the see us the

Suneet Kamath

Andy. Thanks, Okay.

Operator

Thank you.

of question Krueger from come KBW. Ryan with line will the next Our

line is Your open.

Ryan Krueger

billion question [indiscernible] writings by give and with some company couple as a negatively was dividends first or current impacted the roughly business questions. seems kind sustainable Good guess, the is One, been annuity billion that we improvements from associated roughly to see new so And in subsidiary, the extent year you’ve $X of annuity in what morning. I there? interest I year you per up guess, like in environment? rate the sending should do view take. I range to $X holding recent had the

Ken Tanji

Ryan, this Ken. is

to providing the very annuity holding source capitalized regular been business, has company. mentioned well as hedged well dividends in and past we’ve you the mentioned, as and of a very Our

over the although won’t with have has in our below that sufficient Now quite to And it blocks. the been launch getting be has have on our our as FlexGuard outflows, outpace business near-term our we that we’re the moderated time in-force of the smaller. happy been outflows product, sales

will that cash and trend. level could and So, earnings of as you see over flow decrease that time our a moderating

Ryan Krueger

insurance And tied – Prudential subsidiaries, sounds it. subsidiary probably like or But the Got separate? legal there general, or I is just from you’re guess, is likely entity other you’re pursue it I annuity reinsurance. standpoint, to legally any more know really life in PICA in between a

Ken Tanji

may acquired it. in recall, But from Company business. variable ago Life PALAC. an has many what annuity And Assurance you underwrite – we that’s Our the Prudential One to annuity been our or couple annuity entity a Assurance years American business entities. Skandia, use that we annuity a had we is been Arizona be PICA of which subsidiary of would a actually major historically is involves Life that business, that legal Pruco company, company call legal also

And different are so entities couple involved. it’s of a legal in that

Ryan Krueger

Got it. Thank Okay. you.

Operator

Thank you.

question Sandler. open. with is next And the your Piper come of John line from Our line Barnidge will

John Barnidge

Thank you.

really address real it when XXXX, and savings the estate out adding enough didn’t far address that is pushing cutting. this million cost that You this is the on could out in leasing. commentary But $XXX

Andy Sullivan

our Ken function. every and This John, just said as business an is earlier, So its program, Andy. every really expansion of

management – is estate, It vendor more So perspective. is efficiency part from it estate of travel of better really and different a it’s it, is but are across buckets. there real real procurement, number across a

So lot corner basically to a XX XX first this months possible was we of expanded and the really a of to We across program. feasible, organization. a and goes what We saw areas. in of lot of every it learned number the

particular So just the category, it’s of one it. accelerating not it’s program from success the and overarching

John Barnidge

for Thank the annuities the you’ve suspended life would answers. within that be associated were Can Okay. And the you year. assets follow-up very that suspended respectfully? talk you you about that of and much. Thank amount my products this with

Andy Sullivan

$XXX annuities I’m don’t have not an universal the me. I right, billion billion front get of think the it’s range. guaranteed but life And going perspective, $XXX I from to this So in exactly and in

John Barnidge

the for answers. Thanks

Operator

Thank you.

is line with question And next JPMorgan. line comes your Jimmy open. the from of Bhullar Our

Jimmy Bhullar

Thanks. Hi.

from see your business? good. loss It’s pretty your on a expecting first, in ratio. have Are just disability in just unemployment ratio on been a weaker So and of question starting economy the sort impact had business any to to margins the I actually higher disability you see or benefits

Andy Sullivan

Hi. It’s Andy, I’ll take your question.

So, we’ve actually very been pleased.

and have this many, recessionary know seen for somewhere many when disability in operated business. business uptick a up. said in from that decades, being we’ve an long-term that neighborhood shows not disability generally year there’s obviously We environments, business That of or lag in either incidents in incident we short-term though, our the our

claims well yet. we So we to it. when not and tick incident make that prepared have so up, sure our if we’re But evidence seen that call that starts for have that low, have we invested desk teams loads, to of what

Jimmy Bhullar

sales, ending Okay. you the prior then of increase. quarter sort And benefited from Japan just to on price obviously front this – on

quarter. decent you in then are assuming I’m how prospects, And ability the distancing given on. like agents’ going with a just else and social meet of that conditions to market So and you talk expect amount could sales next to if that’s decline in about everything also, terms

Scott Sleyster

all interest This Jimmy. significant decline his the remarks dollar Scott. as August with Thanks in Japan. we pricing in products Well, is rates, our changes in U.S. noted across implemented in of U.S. Rob Sure.

also distancing Japan common client from I pricing accelerate As the ask that also XQ from maybe you change. think June. social such for know, in that in tends stimulate a did use were of the change ahead implemented And the of sales on And question. that you such to to to requirements Sales it’s prior salespeople quarter beginning a contact. benefit in to relaxation

enhanced I strength such in operating that head back taper are we but that model. following business of we to demand of the kind quarter, a off think Japan things differentiated as expect largely our in in normal is to normalize reflects Overall, We really then the mode. distribution really expecting will into And our XXXX.

Jimmy Bhullar

Okay. Thanks.

Operator

you. Thank

of comes from line question the next Our Josh Shanker America. with Bank of

open. is line Your

Josh Shanker

think you. annuities buffer away from a With to said about that core what’s years whatnot. where that are you lot discontinuing Thank maybe individual of of in past book? annuities the ago, characteristics variable is back with living don’t product and return variable your pivoted competitors stand them talk of we I benefits. time have it and you the three back would the for what years Can of they means sales today the the that If been backing over market. the company that, competency and Yes. have Many annuities you of three understand go

Andy Sullivan

its Josh, take that. I’ll Andy,

making as what portfolio, that decision pivot, interest equity fully more and around well and So, a our an Ken of you our all where block taking capitalized PDI if of and product cash we’re and good high It’s the more is most on It’s think creates HDI block as returning our business perspective, working towards talked weather the a The we’re is would product risk. well less of flows. of block earlier. I hedged frame block sensitive market very about HDI business ourselves, go-forward regard. a rate about in

our people shareholder annuity from it does accumulation, sea we product think believe need are in way to more them from deep And very, as with go-forward a we So, we a a you friendly. in go-forward think with the that space, still good and help well, a does to longevity that’s portfolio is there we perspective. help perspective, insurance but decumulation noted, very that

Josh Shanker

with work them? you remain competitive that in from who you, for their need advisors silo like you with financial the a to Do product

Andy Sullivan

No.

about, here and such asking our product? need our and I went all strong we’ve It finished think and that’s of we actually third sort billion sales, in buffered our out you’re recently all haven’t brand HDI/PDI the types do FlexGuard even they was And distribution. from in really No, you why the – states annuity. quarter, we rolling $X and If of of we sales to strength the through advisers. our benefit it a start XX% fully see to of our

our we’ll see So, good the the meet growth in portfolio it. product of we needs think will and advisors

Josh Shanker

Thank answers. you the for

Operator

Thank you.

question next line will the with from of Elyse come Fargo. Wells Greenspan Our

open. is Your line

Elyse Greenspan

morning. is the capital first to Thanks. going question Hi. My conversation. Good back

That’s You fixed you holding guys the around at charges. billion company. mentioned capital your of over Xx have $X

So once think COVID, keep to that buffer remind level you that well. what will to can get as under normal mentioned, go a you we’ll capital the we fixed of what holding XXXX, of reevaluating you Or you’re us after times out you as onto look an extra normal then about of company? and And you hold like we back charges going kind kind you think as holding company? view of as typically this, return, at to do

Ken Tanji

Ken. it’s Elyse,

highly the And to that’s Our a like needs. good $X target billion. assets level have that liquid ours we for flexibility billion $X in a carry times is think typical to company to

ordinary times. go we So we’ll prudent that. forward. ample think good flexibility credit $X us of gives typically as that in to our thing times, number to be time billion target typical these now’s and again, that. above $X are a factors, We that’s above as But billion markets is are and we a to we mentioned, think evaluate a different the including Charlie than do, And to continue

Elyse Greenspan

volume fourth get Typically and years we in just we lower, activity environment. obviously the I quarter? quarter. potentially us quarter give PRT then, the more with see on out. that And does slow in close was Okay. about We deal Could as thoughts the color up there to hoping on the could transactions third color rates the fourth you some pipeline in pick

Andy Sullivan

it’s Elyse, Yes. your I’ll take question. Andy,

in down. neighborhood think it’s at be size definitely or so. XXXX, marketplace versus – So XXXX, of is absolutely XXXX right. XX%-ish you’re be to going the If We to we sort the the somewhere of going look marketplace of

quiet. relatively quarter Third was

five are we’re can the now that out deals a building plus talked plus. a that with would competitors billion to I about in we XQ, We but past lower pipeline seeing $X market up point overall in that, also probably do have size, of

the be going in very think to environment it’s we competitive So fourth a quarter.

and we’re to going pick how to approach disciplined going very we We’re the be our about spots. marketplace

Elyse Greenspan

Okay. Thank you much. very

Operator

you. comments. with for closing over to it Thank to any Charles that, I’d back And Lowrey like turn Mr.

Charlie Lowrey

much. Thank you very

well we financial and momentum stakeholders. the ways to our our that customers, our ongoing commitment demonstrated other our and deliver and hope to So performance outcomes we’ve today, towards investors transforming have to meaningful business as in as today in closing I that

our of the We for more purpose on continue execute urgency financial solving to be to true with conviction to move and challenges and people.

thanks So, us it. joining appreciate for again We today.

Operator

conclude and using call you. AT&T that does participation ladies conference gentlemen, you for today. and for your TeleConference Service. your Thank for Thank And Executive

may now disconnect. You

Prudential Financial, Inc. 5.62 (PRS) 4 Nov 202020 Q3 Earnings call transcript