PRU - Earnings call transcript Q3 2021 | Prudential Financial, Inc. 5.62

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Ladies and gentlemen, thank you for standing by and welcome to Prudential’s Quarterly Earnings Conference Call. [Operator Instructions] As a reminder, today's call is being recorded. I will now turn the call over to Mr. Bob McLaughlin. Please go ahead.

Bob McLaughlin

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

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

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

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

Charlie Lowrey

and for to Bob, Thank everyone today. joining you, thanks us

As reflecting our always, financial their third introduced the support you the we've safe they remain as a performance for results delivered families quarter, healthy. products your Prudential financial strong high and challenges demand solid investment to and world. for we solve in changing customers our and hope

We a also transformation higher-growth, our nimble made become significant progress strategy less more to executing on company. market-sensitive and

pivot annuities, our full-service and sell to advancing of less higher-growth our traditional business to recordkeeping we divest variable agreements First, reached a portion market-sensitive our businesses. toward and

XXXX. with support initiatives balance are and balanced before of transformation on redeploying over disciplined Rob to advance maintaining continue approach rock-solid achieve each these to remain third, sheet, I'll $XXX Ken. we an million the of by end a of our provide savings update it track our capital. turning we and cost-savings to on and program to of the Second, And

This XX% our half divestiture, X. runoff. transactions expands the and our prior the legacy of a the traditional close announced the sell transaction to annuities of which successful agreement sell cutting annuities products and upon Re. in In represents individual block of account reached is natural an divestiture first September, our variable and and Taiwan insurance contribution the of Turning in through variable approximately to July strategic traditional to of goal This our activity, mix business businesses. our values a of full-service earnings our Fortitude including expected annuities Slide we completion sales of half of we agreement Korea in advances to significantly recordkeeping to XXXX,

divestitures half of these opportunities to of XXXX. expect to result by a As derisk generate of to of the billion $X business. first to continue explore proceeds we date, blocks And we additional in-force approximately net

and annuities combined recordkeeping retirement of of With full-service the our our transaction, to pending both have annuities sale institutions we and business and support strategy. individual our serve retirement needs and individuals growth the businesses our block better

next to X. program cost-savings on Turning our slide

look million our remain to To target employee million $XXX $XXX million XXXX our for customer and of the These reduce year. by We of total exceeding the well savings, target on the we achieved a run achieved have for track full include progressing million while and rate quarter in the $XXX end $XXX savings million year. third as $XXX this cost in we achieve are both expenses improving to date, cost-savings experience.

Turning to slide X.

to of the we're returned and dividend and capital investing targeting $X.X $X.X balanced disciplined shareholders, in to last our reducing deployment demonstrate growth in We returns by quarterly approach $XX enhancing businesses, by Year-to-date, continue increase to by all to billion a share supported payments, sheet. shareholders, our of reflecting of solid And we leverage to dividend, billion balance our end billion capital of to rock compared and X% XXXX. buybacks including shareholders billion year. $X.X in to the a return

debt. quarter, generated $XXX million savings steps financial third outstanding redeeming the leverage reduced we During also took interest This $XX financial flexibility in to annual our and going of million enhance forward. by

to continued growth. also deploy in our We drive capital to businesses long-term

For risk our example, transaction a at completed expertise, scale PRT $X execute the the to history ability this of fourth and in we and transaction, to billion market. quarter, commitment is demonstrates the this which pension funded transfer largest market

interest our sensitive FlexGuard support our higher less and We products, variable ongoing pivot also and life deployed including growth rate capital to to products.

$X.X of Our strength, position of support including liquid third capital continues rating. end billion by that and highly assets is quarter strength the to capital AA balance the sheet deployment at financial our supported a

neutral to a office assessing report the across also by and our we Turning a environmental, interim becoming emissions an to home commitments. week, Earlier expansion commitment portfolio. carbon pleased goal by with carefully to X. our We're governance operations of social investment achieve emissions announced our global of impact XXXX. our meaningful I'm slide of primary XXXX, net-zero this

aimed commitments restrict the in mark social investments As supporting from and economic colleges billion These $X black racial our This Prudential foundation and an address support that of derive universities in social in will XXXX. milestone achieved important an businesses investing wealth impact gap. quarter, by to the Foundation historically thermal portfolio XXXX. front, include eliminating as small material funding revenues during the minority-owned financial in we immediate equity black and empowerment achieved aligned the our to $X foster such action, portion billion its with world Separately, investment a the making direct the mobility coal. organizations, around milestone and that racial grant those follows companies to investments in at reaching their first funding since new on barriers partners the

taken of it your sustainable Rob. over these help will Thank our behalf And confident are on morning. build with a I'll turn that, us time We stakeholders. more of to you transformation actions strategic company our all alongside for this

Rob Falzon

performance an overview I'll you, financial and I'll Thank the International our US PGIM, begin for and business our financial businesses. with Slide results X Charlie. third provide on our for of quarter. results

by by Businesses and after-tax Earnings higher $X.XX fee benefit business manager, billion the of COVID-XX. impacts investment investment driven quarter which share primarily had underwriting record-high income by year results, values operating was our increased mortality XX%, Businesses record appreciation, basis from asset or asset This $X.X higher variable adjusted by driven as net as the COVID-XX driven PGIM, approximately supporting were growth, fees, of higher from and less growth, to XX% in over Results an expenses other expenses driven management growth. by underwriting ago ago the account net on partially higher increased pre-tax income per higher lower net global our elevated relative equity offset our of higher by trillion from spread, exceeded income, market markets reflecting US strong business in mortality. and the favorable by business COVID-XX-related reflected favorable lower increase $X.X that investment well quarter was experience and less offset reflected higher continued primarily revenues and International venture investments. joint related level claims. Our by earnings spread, offset driven the partially year

and in with the periods. Turning public diversified investment to global their than strength of attractive equities fixed under a private manager. Slide and remains assets three, capabilities PGIM's asset demonstrate its active of and XX X. benchmarks PGIM as both to the performance real investment management income, across classes over top continues outperforming five more estate alternatives, last XX% XX-year

outflows of and net in $XXX net outflows sub-advised quarter, flows were income flows reallocations $XXX of due fixed public from by institutional rates retail were client the concerns. million net to $XXX mandates Modest including rising inflation and million to primarily driven Third-party million, due equity flows.

bring helping a business, PGIM investment with management investment growth. flows and depreciation. XX% to more of of value engine has competitive our investment to and Prudential, PGIM's mutually complement billion, and through and continues benefits positions. the successful businesses, in by private and $XXX its capabilities US another PGIM's that a Insurance excess debt, affiliated result expertise track relationship enhanced our real record, assets our and origination businesses. reached to advantage to of credit record estate year benefiting the demonstrate And in momentum across fees of by management equity our as a performance source alternatives turn, our of market-leading a customers. strong for PGIM market and businesses provide PGIM's which third-party asset growth by solutions from driven As International ago global asset quarter compared beneficial up flows scale provide

fee resulted pressures. almost quarter. in despite As XX% rates This capital year expanding deployed higher-yielding time industry-wide over example, billion stable than products focus on strategic PGIM's fee $XX businesses this has ago the quarter, an more of private

Now turning to Slide X.

and produced businesses complementary fees, earnings underwriting net benefit from our spread businesses. US mortality mix longevity and of and Our from investment diversified income

away rate-sensitive addressable capital-intensive low-growth, We continue expand and transform cost businesses, business our to mix shift from interest and products capabilities markets. our structure and and our

the quarter, sensitivity of block annuities. overall reduce announced product portion significant to this annuities our of long-term our our accelerate traditional the forward we to of also sale contribution steps addition portfolio announced business, business These transactions and in-force we agreement mix July In retirement in are variable to full-service that to market shifting a sell the in legacy and reduce growth.

from in our buffered well, protection. worked quarter, sales third launch $X which for annuity offer product representing the These of appreciation investment downside individual sales customer billion. our solutions $X.X demonstrated have sales equity the the have products, total strong reflect pivots annuity in Since FlexGuard combined markets were with that addition, billion In of sales. continued of XX% by for exceeded XXXX, potential demand

exercised brand strategy, from actions, quarter. discipline higher Also, to compared to ago having strong and benefit our pricing Life the sales year strong continue our with and variable a to life reflect and effective pivot our highly product Individual sales sales also have trusted We frequent be team. continue and distribution through

a capabilities. primary platform, revenues, Our enabled prior transactions, metric concentrate $X.X as With respect in XX% strong sales our reflected retirement were billion reinsurance the year including digitally over we market-leading to international of our business, transaction pension and up quarter, Assurance, financial transfer risk scaling billion on demonstrating the funded $X.X business the distribution quarter. total our

quarter. period the number third fourth of for the increased the the occurs demand seasonally to in of quarter, expected During prepare enrollment agents higher the Medicare annual that we

slide state focused International that differentiated September Sales insurance XX, markets. life amidst XXth. were Life on our of on as than well a we Planner as to in Japan other our high-growth multichannel operations emergency distribution the Businesses operation, model last where quarter across include both Gibraltar Japanese ended Turning have and emerging higher operations

quarter, than implemented Japan of in third were repricing the sales year. product dollar-denominated US elevated which lower quarter that the prior year the of were However, we ahead in last

within particularly hand unique supported remain third-party Brazil, over also in And with the distribution resiliency which in-force distribution capabilities, channel. by the of of We our it We growth to I'll see Ken. continued that, our to continue sales momentum encouraged business. have the

Ken Tanji

slide on XXXX share begin suggest adjustments the in I'll items. for Pretax basis. the $X.X XX, which third resulted in adjusted Rob. relative an quarter fourth was billion into how get provides for of sense income Thanks third might to and our our per the of quarter following To quarter earnings after-tax insight operating results. fourth $X.XX we quarter results a for on earnings develop,

investment variable $XXX by outperformed third million. the quarter income in First, expectations

in that claims our similar third quarter. Next, experience COVID-XX a the level a the for in placeholder experience is quarter we fourth to included

on experience, COVID-XX-related depend the and While the fatality as variety this rates, mix actual vaccines. of a and impact and factors, demographic we have claims geographic, effectiveness will provided acceptance continued and of such for infection placeholder

key a from quarter, takeaway portfolio. we higher combined investment to we difference per that net you increased be Fourth, be will quarter, rates the money last new baseline expect expenses quarter underlying the would yields other expect fourth specific if the reduced $X.XX growth, the and These earnings million. $XX driven per we of income program in and I'll quarter. business items quarter last, by and is appreciation. get fourth by cost-savings our reflecting power has $X.XX. our that us seasonal investment rate of of benefits earnings items normalize. our the $XXX about fourth disposition share items anticipate by note tax exclude will to market fourth to the million, The share in effective be between Third, And

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

Turning to slide XX.

We capital sources a position adequate and continue robust to funding. of maintain

Our capital financial support position AA have continues of and strength to substantial a rating funding. sources

sources of businesses capital three than were fixed and is and charges, greater Our free include our cash and flow funds liquid billion, assets from times which facilities. $X.X contingent other annual cash

in divestitures. XX executing slide are to on summary, we Turning and

We are are And rock of with cost-saving solid sheet, initiatives. redeploying track support our targeted the to capital. on we our thoughtfully achieve balance

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

Operator

question-and-answer Thank Bass Our you. question coming We’ll from Instructions] now Research. be today Autonomous session. conducting is a from first [Operator Erik

line Your is now live.

Erik Bass

Thank Hi. you.

as might recently such that by more we've consider PGIM? deals to sizable in you of and if capabilities M&A seen be managers, this would and T. well Rowe And alternative Franklin, asset received So type were see Wondering generally for market? properties the acquire available and programmatic transactions asset that you like private announce these the investors.

Andy Sullivan

Erik. morning, I'll It's Andy thanks, So take good question. and your

very multi-manager billion of to last a execution. seen organically reiterating me $XX that year-after-year. five and $XX in net is year-to-date PGIM grow and over strong due the incredibly the our really team's years, success has flows by So billion in let seen that that's strong start business we've And flows. model ability We've demonstrated to the

past, As have to about programmatic the are looking of looking flow, Three continue alternatives globalize making are that higher-fee-oriented M&A. and real of in now want these we're transactions to our assertive of of Partners looking where in in do acquisition Asia. management. specifically And very we've is sure in our Montana great leaned strong And And We're upon track I to we in on and already talked the areas record Capital both bolt-on billion to aware the areas. We're in into in we and higher-growth assets example been build would that in build Europe business, we're area that the the continue the marketplace. under though, mention; we're we've a business, to that. and assets. $XXX with we

going our we managers about do we're we in question in to capital. in To PGIM, much sizable are we across you how deploy always, scale. we deals, feel, if what very disciplined As be at your and look

to So us big it's key would strengthen with see and But do it do a and degree synergies. or we something pure-play what it would a that the a that material us larger, along a would come unlikely geography key you with call capability deal. way look in I also would bring potentially scale in

Erik Bass

provide in and could claims experience both more and talk it. hoping a color Got helpful. Thank seeing your That's you're you. little bit was or group trends on And then the group disability. you life quarter, particularly, some this

Andy Sullivan

group Sure, let Eric. again. It's Andy. life I'll take that one side. And me start on the

in deaths, had as and the I'm expected. seen press, impact XX,XXX. expecting deaths Delta times large XX,XXX So we sure The know X XQ were and has what a saw We you've in were you on were the country.

would there's quarter. that, three life a I top book -- a are that we that big point and to have very because and in carrier, of business. disability broad of And We the so saw three and we effects really

perspective. age and XX our between age group First, of neighborhood lot years a average tripled XX U.S. in of And block workers. XX of from cover the is old. younger in The the we deaths group a percentage

third thing And we the I came impact of side about probably account out large you and care, as the the United more of have by definition a on retail in in is, frontline are very where the we in XX% pandemic and and States. and from therefore, Second, national business know and about strong the mention their job, are claims expect, workers in have areas share southern These exposed. manufacturing. and a then, life of nature health would book saw

and our experiencing that able to proud is this, we So, clearly, this we're promises families. these unfortunate but we're on keep help deliver that very

we're disability were see side. group to are at that, And what was insurance. frame we leads admin benefit we prepared up not business, I That As and really the were side said ratio In There organization. the level two would expected I for to on more we as, having frame fee-based It what the claims. group absence show side, flip and life impact on it seeing and as predominant seeing to see, somewhat this absence in was to impact this, the we're continuing I disability the But business, an the really disability our was of STD elevated in at effects see in STD the higher XX.X%. ratio. you a that play. expense that as

of put claims we the to both which up about that. also we IBNR, had expected to we we LTD the talked previous quarters, the be to to On -- the also are what had side, due the both subsequent would built pandemic, enhanced as see unemployment from impacts staffing able morbidity And thought incidents be the ready handle to but impacts we -- we unemployment. come, we but in seeing

severity was XX% about incidents about we what prepared this we this again, in to up the Our on is for. LTD see, our well, quarter. was XX% is as quarter, and in what and expected But the up

So it this obviously, to we subside improve would we're well. time. handling And for expect, over and

Erik Bass

you. Thank Great.

Operator

Thank you.

Our Ryan Krueger from from next coming is KBW. question today

now is live. line Your

Ryan Krueger

good morning. Hey,

First what variable of are include the And was, potential focused consideration? also is derisking? that individual annuity question more areas Does you part additional transactions? then, life on

Charlie Lowrey

it's take Yes. Lowrey. I'll Hi, Ryan, that. Charlie

in sales of of point out, our nimble making traditional become to block significant we've higher-growth, as Korea, in as business. and completed about Poland. the includes, executing progress we're of Taiwan, business opening annuities, well more stated variable on full-service recordkeeping and you less a the remarks, as And we our market-sensitive As this talked Italy sales what and rightly our

you that business may We at that about. blocks include past, point, the in noted, your to the looking that of areas have spoke other also we're

and a our of terms that we that, overall we to between billion need is have do -- billion I work we to So lot which but that to So goals, of we're other we're in point. up amount, a significant into $XX of reposition, wanted do. we don't already we free billion still $X capital this would to right? $X have at note deals stated accomplishing

deals if We other of the sense our are have, done only make very quality with reflects economics we we the but it we stakeholders for as of we've the all deals happy high transact forward. we'll businesses as the go they think

Ryan Krueger

a then bit follow-up of a And on Thanks. M&A.

side, capital small upping of Do redeploying the from a freed you've amount they've the terms still you've consider year M&A a not, think, next in capital coming buybacks but transactions and of been the done So transactions ultimately up fair deals, you would few in or pretty on have again? if I anticipate over you time, you capital, into that announced. additional

Charlie Lowrey

Yes.

I the both another to said what would find But that we inorganically will think we've capital, that in can't way that. capital, say are redeploying stakeholders. that of doing ways we is that organically return of investment is always for Ryan, we uses looking and at if capital organic what and that past, also good I is

very if we'll capital as we way looking very those the his emerging focus pipeline reduce of and not, to earnings past. in and shareholders of but variable there focus good is Andy that, as do. a we on, deals an the in go asset percentage If our of a out we’ll of growth be see areas traditional two the mentioned Montana there potential capital look at return and legacy as previous partner management we'll have The are as percentage again, on that's disciplined the comment at markets forward but to in areas. we'll they're in example acquisition disciplined acquisitions. as annuities M&A to to going continue from increase So we the

Ryan Krueger

Thanks, Charlie.

Operator

Thanks.

Humphrey next Partners. today Dowling is from & Lee Our coming from question

is Your line live. now

Humphrey Lee

of are for kind of morning the period? about question breakeven you've regarding Assurance activities enrollment you questions. thank the Good in to Can the my done the of AOI? you terms IQ. And is fourth you for terms of level so the My for in and how taking quarter confident support outlook first necessary talk generating preparation far --

Andy Sullivan

thanks morning, Humphrey, your And good for Andy. question. it's

revenue talked we've the as Medicare and in the at we the IQ past, opportunity in know about us. remains annual for strongest given do you strong as very expect be Assurance to season. a quarter fourth our enrollment So Advantage

growing last look, we marketplace, little you and share is marketplace a had If in year, that at XX% that year. X% per under

a to of So lot there's space operate.

saw we a we invest agent business but the than we invested period enrollment is in in year, operating had As agents the the coming continue our specifically came W-X higher and the gate. level both out in saw more what in in with we of to were you annual building of Prudential we quarter, in right into those at productivity the overall, quarter, out And platform, season, agents last the force.

encouraged So year. last we're versus

do scale. in the for As I've confident platform to in us ability and said before, we're the what long its can term

Ken Tanji

Humphrey, it's Ken.

if could Andy I add, we're as said, prepared. Just well

we the put of placeholder a the in just purposes earnings for at a quarter. wanted simply the the It's not just we for the a For to quarter, the neutralize a for to baseline fourth for because seasonality, breakeven but forecast. neutralize Assurance fourth it's placeholder

Humphrey Lee

Got Yes, seems I but a order just to just anything. to opposed like revenue see. what type to I as Okay. it. this of would to you more of like was target, get that in is it level placeholder break-even have thinking need because

Ken Tanji

right. That's

Humphrey Lee

terms Okay. retail what kind seeing be have on have of seems improve past The the that of softened bit taken of All right. you quarters. you're side. My provide PGIM, actions some to second over question flow there color to what especially a of kind retail and in couple is the Can -- flows? regarding you

Andy Sullivan

Thank you PGIM. question for Andy Yes. on Humphrey, your it's again.

flows. variability quarter-to-quarter So discussed it comes see we the variation as we've in past, will when natural and to

the keep would either eye business experience is, that quarter, experience go think modest billion as is important the capabilities driven We said, this really estate. from say we outflows you term long saw lot and your our reallocation I've What long-term the and given shorter-duration both did client flows in as income of side modest side, outstanding into experienced and retail fixed we of client comes thanks strategies. result track at That the income by to result aggregate, on $XX fixed way. a What institutional I out to strong work very inflows positive on we've space a is year-to-date. in in the over a any quarter, and equities and This And is of where record. can on reallocations, could execution. a real

We release, seen in have outperforming broad period. as And we we the exceptional portfolio a the and product in diversified to PGIM. XX-year have continue -- XX%-plus five benchmarks you've and investment in three, performance with

potentially confident we're while will time. So quarter-to-quarter, the a there'll that we variability winner be be in net near-term, over

Humphrey Lee

Got it. Thank you.

Operator

Thanks.

today Tracy Benguigui from next Barclays. Our is question coming from

is now live. Your line

Tracy Benguigui

Thank you.

quarter on another early assume So company There was one some this more an quantitative, is qualitative. far that disclosures. with was so LDTI glimpse

add not are like but XX-Q is now Your quarter planning any disclosures this either future? yet, to in out you the there, or near

Ken Tanji

Ken. Hey, Tracy, it's

towards continue to well move We of And is date. we the the have effective methods. the will shift the refine obviously standards as evaluate an to date year the and will will still be as date market-sensitive. the effective rates And date, adjust and a we to we also impact be effective less And continue our new that to the subject time been the to effective at have as our time the business make taking continue of actions at impact over that away. to and

early progress and that's new it's are. estimates, implementing provide the to where we're standards, making good but we overall, So on too

Tracy Benguigui

at extent marked on that one just products, to have on Japanese be To question market? view in dollar-dominated Maybe when mitigant does there that, are liabilities your a those all that the to act like business. Okay. your

Ken Tanji

business resilient. and very again, a those -- have with to we But our needs too business denominated a the the the good long does high-quality capability portfolio the it's strength that is are in had US advantage the customers on focused protection, dollars. estimates. in a Yes, supported our financially modified, Again, we've a Japan be not profile profile, And early US business, our financial robust of including dollar of and profitability competitive it's and US long-standing is very us primary including about the we're lifetime accounting focus sort dollar death duration of Japan. and on in of risk for business. It investment will overall, and the overall reserves business, Japan feel provide although with

Tracy Benguigui

Thank you.

Operator

Thank you.

from coming today from Our Andrew next Kligerman question Suisse. Credit is

Your line now live. is

Andrew Kligerman

I management. guess the Charlie, good would made a pipeline look capital to a deploy is organic follow-up is way first comment that comments capital. your at the question that Hey morning. investing the on you a two you -- and

you amount anything really by So, the that capital? uses you intrigues that you, and investing meant of color that could on might for then the be organic clarify -- rather that were you did have that that. regard other what you to two money and small, not the pipeline, is might And require? with there deals Is because possible it might there

Charlie Lowrey

Sure.

comments, So, order. a them taking in couple of

then organic those as those investing guaranteed And supporting really market-sensitive if at the and of look so example, grow. with terms and variable living we a into growth higher annuities company. you that a growth, In products frankly, are from and started an have new and becoming pivoted as in with away company, ties they FlexGuard less benefits

So, an that's example.

So we'll growth. look pivots at that as do of organic product the example an we

as In opportunities growth think management we emerging be I the some there areas. especially we that want plenty and areas are of of in, the going asset go namely markets, terms invest to of forward, inorganic to growth, in

criteria, that as excess places find and strategic find will have the we'll think I we've always, we financial don't past. in if to to shareholders done we capital to our don't as attractive we And capital capital. time, opportunities places over the the put that So, that good extent to return meet the put

Andrew Kligerman

you these and Charlie. Planners, year with went quarter, rearview, upward? then it. And for Japan, year there to priced out the act the sharply us clarify kind there of in regard And release, businesses Life subsides, Could sales returns? really now ago range. those catch and is Gibraltar as XX%-plus a ago your pretty jet written the people for the the were off repricing and getting on sales going possibility makes And Was forward, the dollar-denominated the products. these adequate in That that wanted a that Got international in adequately of that a were emergency product with products cited to anti-selection? sense, whether COVID press possibility could that in you an

Scott Sleyster

Thanks, go one. that I'll Andrew. and is Scott. ahead take This

the our -- with and good. in would dampened and affinity at we've in sales. third channels. quarter-over-quarter, life Japan, using if happy products. last benefit Olympics the all ongoing looks our planners, And of third-party you got Japan our strong significant across we to activity. We've channels. the Japan, channel, recovery both having dollar strategies new look And I that's on maintain profitability and had effort As period. distribution really part actions August took it we operations. of sales made you quarter our quarter our US as of technology two. recall, multiple rate but further, which across business crediting are new I and that's all sales life the forward And just But to states, that surge well on we've distribution. enhancing And crediting would we a And In as support emergency also the sales rate, for that typical, ahead or other of our say significant from a customers does impact from that say the pull then is additionally, progress bank And consultants, COVID create of in a as typically distribution

the repricing we think a our together any made were watch sales a So, have. I that going horizon Japan. material on says the quite continuous priced actions pricing And to and where discipline in something? And a Ken, that pretty good took feel don't in say actions. we of frankly, on actions you And the we manner. year I think foresee that now, we ago all maintain we we're about we timely strong put a momentum

Ken Tanji

has business of written Japan our business say, just its cost consistently capital. I'd above

proposition. value both it's We and keep a year, with these position pricing us a but profitability, returns actions last are customer good happy the in from that

a been consistent story. pretty it's So,

Charlie Lowrey

Charlie, one is disciplined to, Scott world, it's of looking add said, we've X the think rates, interest all sales, as Andrew, that around pricing of as the just been comes including Scott of pricing, that strength And extraordinarily Japan, our low other is we've thing, with the in if -- as not the just brand. could strength could from have I countries, all really And our but the we the the Andrew, other and the US. the what pleased which I in add in I view. that at and alluded if products been of we've One is had points increased to one

both FlexGuard the distribution, this Second is is which our as of the through And strength example. the of third we such provide, of – parties. introduction in in-house and the new distribution with solutions is quality third

So, ways we that of think have to I different endures distributing benefit. our and plenty of product the

Operator

next Our question is from ISI. coming Evercore today Gallagher Tom from

line now is Your live.

Tom Gallagher

morning. Good

COVID measures, in increase quarter there this elevated well pretty up was non-COVID the held mortality this despite also some also individual by quarter. and mortality mortality So

comment be? can might In could block what had terms on or levels, that? that share it of anything only geography, sensitivity, Is demographics your you you older on you why just minor describing age, think vaccination and

Andy Sullivan

I'll your the Andy. it's question. Tom, Yes. question, thanks for and take

I'd of about items So third through Life our in block here. Individual when you a the think quarter. go series

think lift. did we see I

gain aware, I you're Third our highest is think, quarter. as quarter, underwriting

So there's that's the in results. definitely seasonality showing

vary saw will quarter-to-quarter. type amount We also the claims. again, that's of in And face fewer that quarter the large thing

a death the in older, the United tends our in to demographics of we that And of average from and tends think say to -- And perspective, Southern I heavier it higher clear when would to was geographic to the as US those. then, distribution. just block this, as pandemic block quarter, but region yes, fewer I see pretty comes our far oriented This Northeast be more it's effect, ILI the you those it happened rates. towards mentioned have tend vaccination that the be older-age of the guess particular, States. to I age

Tom Gallagher

Got you.

on so, you're Okay. you I that if -- economic like XXXX. still positioned how just I in feel timing? adopt that any that Thanks. And Is curious, my the And for solvency then do Is it Japan? regime think updates to heard, follow-up, that? still was last

Rob Axel

timing that. shot been that's To ICS, JFSA -- been Tom, being at that. it's not well International take Standard, the The a or synchronized our Rob. there's Capital has a I'll of change Hey, in broader knowledge, with any international the rolled out.

so our out, have to And behind with and aligned Japan business, new And Ken that. has underlying strong. respect plan that our think closely been as -- always business the incredibly implementation is both economics it's their to Scott their Japan the of to to I as sort are solvency slightly be pointed regime of

to Japan's regulatory into over that number and in an the along ultimately And so economics underlying hope a But constructs. on industry there. -- to would economic concerns, reflected the have that carry both flaws the we in being we we that both concern said our in as ensure under have. continue accounting have, we others we is international that, be appropriately would and And articulated the the of peers. capital then in international with that solvency that, both those constructs would visible. would that the terms regulatory be we're active to of Japan, front that in that that to some extent dialogue And business Having with we some engagement, continued get proposed the optimistic persist can a of standard regard fundamental through that's continue that regime,

Tom Gallagher

Okay. Thanks, Rob.

Operator

Thanks.

Greenspan next from Elyse is coming today question Fargo. Wells Our from

line is Your now live.

Elyse Greenspan

question, first My the morning. PRT Good on business. thanks. Hi,

to You about fourth for that the towards any the year. tends guys the quarter. pretty talk initial of you had And I good quarter? there some pipeline know the outlook the XXXX? Can be in activity end for third just heavy

Andy Sullivan

Andy. question. happy Yes. Elyse, hi, it's take be to the I'd

a was of XX%, So, the and couple plans funded in The very communicated the year is they level the for status previous best calls, market felt in and the in we around XQ healthy. think years on we a and pioneer very the XX near-term. and of that with be much around very the many consistent average back think is be in the strong will billion leader continue the This billion year we still and $XX the in a space of neighborhood We think will transact. that, market of in in a size that level total have to space. desire would momentum very that's half in $XX ways, for what we're which is the

said strength we the capabilities time. spots. of very are We're fair to record. and is our our think confident to going market more we've going we that track share past, As very our our But and we the committed be in to pick the healthy. going are the brand We're it, to in gain do our over than and near-term,

Elyse Greenspan

some book, on And elevated third gave COVID my going be on Life what in you boxes your second quarter. guys Okay. color you'll to question, then Group the good there

fourth or far seeing? think that we you how COVID you've with losses the about same that of in As expect IBNR? up you've of kind XXXX, quarter for so And that line that your severity see you losses would in elevated do much then been set

Andy Sullivan

start I'll maybe could then Elyse, and follow-up. So, Ken

certain age, where We places went expect vaccination predominance three the through our into predominant book mortality, average continue of the in the dynamics to are the segments, things fourth being drivers claims So, the near-term causing underlying I elevated of and kind distribution the lower. would of what's being quarter. in of those the rates the the

Ken Tanji

pretty of it's -- in stayed terms on Elyse, IBNR, -- current claim And activity. the Yes. we

is that lag so and we to the that established pretty measure have weeks continues. in and measured a So, process

it's the unique and social a In or current other provided outlook measures the of or preventive variables as most at XXXX, the of current not we vaccines Andy an treatments trends, for lot we continuation situation of The variants. sort reasonable think described, terms an upon, dynamic, beyond that's distancing approach. quarter. and of is very have very And and outlook based play, whether just

-- we've we've what trends our in extrapolated the So, and that's reflects. baseline, current that

Elyse Greenspan

you. Thank

Operator

Thank you.

question today is Sandler. coming Barnidge from next Our Piper John from

Your line live. now is

John Barnidge

Thank you.

group is administrative support there thinking a the enduring that the need effort? to the build Just expenses of to business, more nature about given unfortunately, pandemic,

Andy Sullivan

So, Andy. John, it's

of what out product We lines. the actually a past, I think expected and have of we claims about hired talked both we our to as ahead staff across we've in level call higher see.

it coming the was But So, see. in. were ratio you level well that that already we is think that admin reflected prepared in as we

John Barnidge

around Thank think severity. about great. should Boeing Raytheon in headlines that my Thank to PRU's of you. And light of we to there. I'm within group through just in workers incidence comment in follow-up, percentage maybe How of focus you. and trying light and LTD that maybe of market. increase wanted touch be That's on then vaccine frequency thinking There's this the mandates? in just

Andy Sullivan

I things. again. Andy, it's say two I'd So guess

think the marketplace would a tends and of more expectation in book to book Our help into the the current current the landscape deaths the in national I what be of degree, approach our for of more a quarter number to a is account are mandates. tailwind. think be that there take segment, we the account of that us employer in business, and To and mandates

John Barnidge

Great. Thank answers, you for of best luck. your and

Operator

Thank you.

from a Barclays. is from follow-up today question Tracy Benguigui next Our

is line Your live. now

Tracy Benguigui

I pending either simplify Is touch that out anything expect individual or your just of operational want this of or taking expense we upcoming the strategic institutional full-service sale, on and for your to question. revenue on coming model another after retirement should to business. the side? Thanks combination just

Andy Sullivan

So Tracy, it's Andy.

of about drivers. Let me -- the take question your

first to And foremost, in So to pension really is the real statement a this need our about firm as area. needs helping in solve see continue and a a retirement commitment the we America. derisking

combining we need that retirement go their as about sharpen The expect to two and leading see businesses We in market our and were making really as to market and we in go it market continue the leaders talent was deccumulation accumulation the capabilities. This space. focus journeys. continue is great accelerate see retirement and retirement taking we to on leading -- individuals the lean decision market space that together after our will benefits the to had the and in need momentum, help

that and was in driver, mix our an the system. So really we're and important it's how business step transforming

Tracy Benguigui

Thank you.

Operator

Thank you.

JPMorgan. from next from Jimmy Our question coming is Bhullar

line live. Your now is

Jimmy Bhullar

transactions. reinsurance comments type dispositions question your derisking So on, a and/or around Charlie, just follow-up

you're and in potentially as Life to a like care it counterparties is seeing a business future? do as transaction still annuities the about think context? why to expect in that But ask Individual is you long-term mentioned that you near bid think how or well. emerge, the I where And

Charlie Lowrey

Yeah. I'll Jimmy. start and Ken can to then that, maybe add

is you I observed exactly think correct. what

I block that would, business. have think we something reasonably the we good of -- quite the is a that there, of observe also good that relatively bidders thin as I and small we young it And about, like feel obviously, if frankly, at block would a point result look business on fact, in about. and one, was is very relatively that. extraordinarily a So but for this blocks market at market

can we going So if to be are, disciplined to we sure is, very creating the that did the transact bid-ask if shareholders. given And an in was make be divestitures said, as block shareholder something large. that we transaction be our it with spread, -- the you a quite that that -- value, it will, we've the would about need we interest economic the get eye and of young if toward make

continuing But the is if book book, this to to to up. the and anything we'll at we well. quite options run Ken, point, add. going evaluate come are they So continue

Ken Tanji

No.

I add covers that Nothing to well, it me. from think Charlie.

Jimmy Bhullar

international of COVID markets, And pandemic in two those are in largest given then, stages Latin faring? how markets. businesses on Obviously, just outlook in is you your and -- environment the sales, terms Brazil? the And in Japan in different conditions both operating economic can what your talk But the about for in America? and

Charlie Lowrey

before. start, the of the did Olympics use things of period. impact that covered as have Japan, down, our our would that nicely. of that slow and a emergency. combined customers bit have And and which the really I with state little I technology, Well, emergency ran come don't why we this the that We've think I states then our with of really the say Jimmy, out I benefited of effect from of XX, feel during really September through But channels

coveted a to recruit a environment. also I a But good see new I how more really somewhat think, learned more the remote just see that, more say a our we and sales emergency adapted on importantly, seen returning we've a having years and like have would We've In sales we few bring most you've a the recruiting activity closer things both has normal to that our come organizations been to ability out environment. now sequential positive feel sign. from of we Life in quarter. to environment. to state XX%. a well improve, we And challenged people So improving of of model. board as strong been of also our state, distribution. COVID, during sales. combination actual as been and exceeded the recruit that our of and a a-third But to out ago, now And continue have Planner the will Brazil, was recently, building third-party And that's that sales

we there. sell from it Japan. bit in positive our resiliency that in the really that And has did we've we're So quite Brazil channels a COVID than the hit sales in. frankly, harder harder seen happy momentum with again, shown -- force

we of feel why maintain the indicative think in we the recent So about confidence. overall, good most both And that markets. quarter is trends I

Jimmy Bhullar

Okay. you. Thank

Operator

We closing you. like over the for I'd session. comments. reach the Lowrey Mr. to our turn of Thank any back question-and-answer further end to floor

Charlie Lowrey

you today. all joining And for Thank thank you. us

you the with capital advancing cost-savings remain optimistic generate outcomes strategy the continue again and stakeholders. transform Our to all repositioning on in Thank performance this We and about reinforces deployment, opportunity today disciplined our for year business time. our joining for Prudential to and us the progress confidence substantial deliver your along our to we're making strong to mix growth. our financial program, and

Operator

That and teleconference webinar. does today's you. conclude Thank

at thank you may disconnect your wonderful and participation time, You line today. have your a day. this for We

Prudential Financial, Inc. 5.62 (PRS) 3 Nov 212021 Q3 Earnings call transcript