PRU - Earnings call 3 2023 | Prudential Financial, Inc.

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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.

Robert McLaughlin

you our thank and morning, for call. joining Good investment are: Chairman Andy U.S. and Prudential our Head on Bob Lowrey, call today's global PGIM, and Chairman; Representing CEO; Head Charlie Falzon, International Businesses Caroline manager; Feeney, of of Sullivan, Vice Ken and Axel, Principal Financial Controller Officer; Officer. Chief Tanji, and Businesses; Rob Accounting

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

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

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

it And I'll to turn now over Charlie.

Charles Lowrey

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

reflect quarter and sales excluding businesses, benefits the quarter third across our continued strong Our fifth underlying earnings from consecutive of growth. the momentum results

execute to less and strategy nimble to on become market-sensitive a company. higher-growth, our more continue We

capital our This quarter, our mutually capabilities in business and we increased system. efficiency enhanced reinforcing

We are both also drive optimizing growth. our operating and efficiency model to

maintain and strength and to progress disciplined a navigate environment position financial macroeconomic approach strategic deployment. the Our us well current to capital

Turning to Slide X.

management, long-term retirement exciting annuity across life drive company, insurance investment is to and a During Warburg we of investors. businesses. and reinsurance one opportunities Prismic, the and growth most launched quarter, sustainable our It other alongside our Pincus

companies invest to new third-party need free capital of also of support, up market and into we its Prismic other can Prismic, tapping reinsurance reinsure Through opportunities. growth further sensitivity, life insurance growth. sources of to our services reduce to in additional offer capital can in annuity drive and in-force business portions and

under expands management. PGIM's addition, assets Prismic In

and the can Prudential asset shareholders liability example with brand, of reinforcing other Prismic stakeholders mutually offer origination to our do We're a the unlock we customers better of how products our services and and combines growing investing in capabilities and customers, global we value through through is great multichannel power both serve and which our for business. ways businesses distribution. the system, our and also business

channel to world few channels and a with expansion Brazil, quarter. the expand quarter services distribution want the third-party Our the they more second we around distribution strong continue way the performance evolve of people Life from our record provide our products in and the third and consecutive I'll in them. by of to driven achieved channel. the continued provide In sales, examples Planner

the X Retirement with in of In suite Multi-Year Annuity. of as its Guaranteed the continued launch posted the U.S., Strategies expansion years, as strongest Individual annuity well quarter driven by success FlexGuard our fixed our of the sales WealthGuard new

institutional the with health provider, market. $X.X pension in market, Retirement transactions account Within a savings Strategies a billion space securing billion $X.X expanding our entered the risk new transaction HSA by and top transfer addressable secured

announced latter broker-dealer we leveraging by customer with which in expertise, channel, next adviser completion a upon part technology LPL's distribution LPL Advisors Prudential and industry-leading the and registered experience strategic enhance our will in And adviser our year robust services. investment relationship both of Financial, and

through we businesses, Alongside enhanced on platforms. claims service to our continued service in investments these focus and sales, improved customer

millions technology year, and enrollment an of include experience experience we seven process. have These for will EvolutionIQ, platform innovative this Group announced partnerships example, transforming customer AI-driven claims employees, Insurance. platform an disability that streamline For Enrollify, the the within

better simplify our so technology by customers and to meet strengthen of our further and we reducing while to investments needs around world layers, complexity management efficiency and driving faster organizational can more leaner, position. platforms. company costs in new that and structure We're while our the steps data and growth also working to changing create the a agile competitive taking making We're expectations

teams and goal to our closer to Our our business faster customers integrated is and clients. empower decision-making bring

to risk have and robust Turning Prudential's Slide current management to balance rock-solid sheet navigate environment. us X. allowed macroeconomic now and frameworks confidently the capital

highly approach liability strength strong a end Our supported at insurance AA quarter; financial management. and the and $X.X is position, including $XX billion the high-quality, unrealized investment our margins; portfolio billion of to by approximately capital asset third of disciplined assets in well-diversified liquid

Slide X. to Moving

approach the capital growth to the balance million efficiency returned with in disciplined long-term effectively capital quarter, of deployment, enables capital third of to from to shareholders. the our Prismic to businesses In we Our over added with investing us returning capital the $XXX coupled transaction, shareholders.

And I'll to Rob. it with that, over turn

Robert Falzon

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

XX% or up environment, basis, the offset quarter. billion fee lower income. the on results partially adjusted including pretax a rate from underlying $X.X growth, $X.XX interest an Our higher favorable by income variable share investment These experience, income operating underwriting per from business reflect benefits more year-ago was after-tax and

losses Our interest due after-tax to rates. GAAP higher billion net our lower loss by $X.X adjusted rate operating was primarily mark-to-market the income, on driven than derivatives

Businesses revenues expenses. income higher our seed spread expenses, including primarily businesses primarily investment our compared earnings by other U.S. the higher higher fee had income. offset the quarter. lower and our income, PGIM, partially to Businesses investment variable more lower and spread in And favorable lower reflected manager, co-investment in income. reflected by the International increase Results and global operating of results our to earnings agency Turning driven related lower from year-ago and

public alternatives. global investment remains in private outperforming diversified income, their under or active and manager, has benchmarks of capabilities assets X- with equities XX-year periods. Turning to and PGIM, management classes attractive the Slide fixed both PGIM's asset performance across investment X. our over long-term more XX% and last

to XX% improve over X-year with continues of assets short-term period. benchmarks their our In performance exceeding addition, a

sub-advised quarter. of by the driven in driven outflows equity mandates. outflows a PGIM Institutional billion large experienced Retail primarily were outflow. fixed outflows third-party by client lower-than-normal inflows and income were net $X.X

the success investment engine of and and retirement international reinforcing. mutually the U.S. of insurance As PGIM and of our and businesses growth are Prudential,

capabilities, and recently our sources through management access institutional reinsurer private bring enhanced of origination Prismic, and businesses launched helping more other capital, expertise asset including a PGIM's advantage, customers. investment of to create our the and are solutions value for competitive

affiliated in as turn, a and insurance of flows growth PGIM net Our as provide for unique well through access insurance liabilities. to retirement businesses, source

continue the across alternatives to and grow equity we $X across private assets PGIM's and business, robust credit, private which through our direct credit acquisitions real Capital from lending estate corporate assets debt addition, private placement and In benefited equity. infrastructure of billion has organically quarter both secondary private and $XXX billion and of during private and deployment platform originations. approximately

Turning to Slide X.

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

continue a the earnings, We higher-value, expand businesses of invest experiences our market-sensitive our deliver capabilities drive to customer financial addressable towards best-in-class and less across market in higher-growth to solutions leveraging and Prudential. new mix with

business. institutional third $X.X billion sales and generated lines quarter its across the strong Strategies of individual of in Retirement

billion produce third including Our transactions well leading transfer business strong $X.X of as stable helped quarter sales pension which has retirement $X.X as of sales. risk capabilities, institutional to market billion, value

up from in sales, the Individual retirement year quarter. posted XX% prior billion $X

continued Income, resulted represented annuities X/X and accounted in have product sales X/X and strong about this which for of sales that of Our of approximately sales FlexGuard FlexGuard fixed pivots quarter.

approximately launched Our the representing our with the product. of XX% recently sales year-ago earlier the variable strategy in Life life product FlexGuard products Individual increased pivot quarter, including from XX% Life from our quarter, reflecting sales benefit

Group enhance segment on while the in customer operating experience. our we And and leveraging product and continue diversification to of technology to efficiency increase Insurance, execute strategy client

this favorable in group ratio which experience, quarter of results strong XX.X%. included Our underwriting life benefits a resulted

Turning to X. Slide

differentiated International we insurance Businesses expanding in providing focused distribution our In other as Japanese where Japan, service targeted as emerging at include well distribution offerings. on a businesses high-quality life are and product companies, aimed presence model markets. multichannel expanding our Our we and our high-growth have

provide to important customers value product Our needs-based offerings as our and we continue to their approach our expand protection focus product needs. meet evolving to

of a #X and Insurance the new Life World's During this in Forbes the quarter, U.S. Prudential Best as Companies ranked dollar-indexed insurer year. was we the life launched Japan third Japanese annuity product

recognized on creating the the focused are we value to are of a can provide growing, compelling for enterprise Prudential market-leading we be and We to emerging where in select businesses are markets, proud regions where are add portfolio opportunities businesses customer our build In needs customers. to value. there our where

XX%, primarily higher year-ago bank Japan. International quarter XX% XX%, of by up second Brazil channel. in Businesses as Gibraltar growth compared as quarter. by record well in sales Life sales sales Our in to up consecutive our up were were sales sales were driven the the driven Planner

across insurance and leader ahead, a our investing positioned to businesses retirement in we As we security. look are be to expanding well access global

continue in financial delivering We a focus the range broad of creating customer generation growth to to on businesses needs and of customers. investing experiences solutions diverse and of next the industry-leading serve markets,

Ken. that, And it over with I'll turn now to

Kenneth Tanji

begin XX, results. XXXX into insight third Slide Rob. for earnings on Thanks, quarter of our to I'll provides relative the which quarter fourth

quarter adjusted the after-tax of share basis. in noted, per and $X.X on income third in As $X.XX was earnings operating billion an pretax resulted

To sense develop, following suggest adjustments of quarter for might fourth results we items. our how get the a

million. quarter expectations below was third income investment variable First, $XX in the by

experience. quarter million last, $XX underwriting experience include And $XXX adjust of expenses an normalize third we for other for million we Second, and adjustment items. by to

of expenses This due the international fourth includes timing elevated seasonal earnings lower to quarter. in and seasonal premiums

Charlie improvement organizational we will an And changes of approximately continuous as mentioned, of have the quarter. estimated fourth in addition, process. as incurred we that our million to $XXX implementing charge part restructuring be In our are structure included

per capacity baseline for competitiveness This of These us realize operating strengthen share adjustments efficiencies that per fuel additional the fourth $X.XX fourth share capabilities. to efficiencies, items us to to a exclude specific get and note provide these if We and earnings combined $X.XX. will be actions our expect to I'll quarter, you reinvestment quarter. would build the will future allow create growth.

business of improve earnings the The our rates. benefit takeaway is growth, that key interest underlying due higher continued including power to to

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

Slide to XX. Turning

to rating. Our our support strength capital financial continues AA position

of above our were capital deployment, liquid $X target billion our and within and capital for strength our long-term $X targets. of of have sheet And remain distributions. thoughtful and ratios in businesses our preservation substantial investment Regulatory balancing range assets financial are cash flexibility, billion shareholder including contingent billion resources, $X we to the We Our off-balance liquidity billion. liquidity in $X.X capital and facilities. approximately growth

summary. Slide and to in Turning XX

for growth. We sustainable are transforming business our

strength environment balanced financial deployment. We and And our to rock-solid maintaining approach are with continue balance a of navigate current sheet. the to disciplined the macro we capital

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

Operator

Our Gallagher is Tom Instructions] question first coming Evercore [Operator from ISI. from

Thomas Gallagher

a or require so, had statutory contributions of on the couple And net Did questions loss did income GAAP capital any otherwise? also to at that subsidiaries capital. impact Just quarter if you this all?

Kenneth Tanji

Tom, it's Ken.

Our GAAP remained ratios IMR above mark-to-market target interest results the hedges. But contribution. stat. a of included a And that RBC portion require balance increased capital didn't for our our negative our and rate on

Thomas Gallagher

then it lies the capital? think transition ahead capital, And do clarity it from to think you ESR release point is this you that the follow-up consume Okay. Is when do to know mean should PRU? Japan, be at What I how about you for positioned? have in to should enough likely SMR

Kenneth Tanji

sure. Yes,

implement strong, and our FSA that capitalized, we years the earnings steps let start profile, generally, ratios well financially standard. But financially is good believe a generating underway profitable, of any current financial our taking still First, businesses' businesses are that's And reasonable Japan regime. with the would still me earnings, strong couple now to The new And be which high have standards. under evident away. are capital solvency with margin under strong. quality, adoption businesses capital

manage ways the we better We internally business reinsure need We also externally outcomes. of business or match the to to to the economics that. if could have do

the to we're advocating and and we'll so have for potential standards. to on. We're looking at working also reasonable -- responsible we're that it's new strategies And regime. something adapt And

Operator

coming from is question from Ryan Next Krueger KBW.

Ryan Krueger

potential restructuring a question about talk charge. expense of you first reduction? economic potential the bit that Can on of the go-forward on benefits a basis terms was My little in

Charles Lowrey

Charlie. it's Ryan,

Ken higher-growth, turn Let and in program, you and company. we take towards of terms good restructuring specifically high then market-sensitive that at the But to over some more and a your me answer to a level progress becoming made question. context it provide nimble less

expand a our you done, series businesses market-sensitive programmatic releasing to of of significant capabilities think and system; initial executing if capital growth we've a about acquisitions investment And established that's what ago. the then business exceeding in mutually through disposition we amount you expense including products; goal of and/or number potential; years and a low-growth our will; launching and Prismic, our quiver, that our if arrow reinforcing of another enhancing

plan we We continue investing in and competitive our efficiencies operate both our on employee But our investments further environment. enhancing we've and and returns reducing will improve we've earnings, upon and enhancing we cost accelerate also remain said order and vision and customer to the products technology, and our growth to businesses earn on while our focus that capital, objectives. further of produce we transforming progress and the our made build operations in sales to in risk-adjusted continuously experience. And our grow an to increasingly to competitive

We're employees platforms. as clients. in make in part our the reducing more integrated empowering to have investments our in complexities with also each we including past. by management agile customers we'll and faster So of decision-making create and progress bringing as closer the areas, And technology our with we're structure taking steps in layers, we and leaner, faster our costs management company, update goal and our teams simplifying you of through to these a data

that answer So over had. let as it context, specific Ryan to Ken, question you me turn with to the

Kenneth Tanji

Yes.

those benefits you number Ryan, think, heard transforming. gain Charlie, savings efficiencies, invest be of savings way capacity businesses. I also greater expect, cost that there, restructuring in also in provide and sort to as annual help of $XXX further expense to will financially, just and of will a So the restructuring to capabilities described the charge result as in we than offset inflation Charlie grow And million. our the we're But from will

when holistically, with but striving we think businesses mindset saves that's things we we'll how again the and also And flat not investments for. way of combined put expenses near operating is term. while that over we're the improvement And expenses all margins. improving in keeping be And the we together that's continuous think our flat the that just growing the keeping

Ryan Krueger

a And question then on Prismic.

of transaction that a You on structured give settlements in color us launched have for much good Can future growth? I already amount of it that you capital $X assume place consumed billion that. with any you the capital. how committed

Robert Axel

let Ryan, a me Rob. Maybe give perspective that. about

opening insurance. standpoint of there, as that in perspective of the of the of indicated management asking the the thoughts. interesting If opportunities, opportunities couple the actually remarks, sort you're very of that from is, Prismic Charlie we appetite terms and a intersection growth see One in are at asset

material market-sensitive mix our course in And shift it's we business of of it's end the benefit that is actually the to a accelerate to And expect so, And growth Prismic at all valued play businesses. to more actually executing that. day. highly of the higher-growth, in the think across of help so going that against less doing the role we and

that flow, we anticipate settlement articulated I go sheet. the beyond respect And balance to new across our into will capital as our blocks going sales reinsure businesses, be well. the and to include and we is will structured that, to initial before well optimize opportunities to $XX and include called further transaction. -- look share we've aspirations that importantly, think for that our we financing will billion It's itself, what Prismic that Prismic With investors so third-party what's reserve our that

Operator

coming Next from John question is Piper from Barnidge Sandler.

John Barnidge

a automation about being human then portion talk opportunity offshoring Can talk about well? you program, the restructuring The as invest. capital to and there you versus

Charles Lowrey

Charlie Sure. again. It's

can be meet and a to company, our the said, growth of faster customers leaner, structure, improvement we and needs our efficiency. more driving create organizational and while agile simplifying better continuous model so the of streamlining really we'll As operating part we decision-making as process,

is far we organizational in focused So in as organizational That opposed the to optimizing are more on predominant technology through and investments direction we're going. which structure design offshoring.

John Barnidge

to a can And in grow follow-up organically get interest? for question, products? to you need larger Fantastic. from And have talk PGIM my certain maybe Do you is there M&A perspective? what about product opportunities you

Charles Lowrey

it's Yes, Charlie again.

And development We've various take companies And have include that acquisitions point, company teams done to of over your specialists. programmatic many significantly me grown M&A continue going we want the -- time. well-executed M&A, will to the think well will material become about these And Let that. role as of as of to as sizes forward. of transactions we time. a series play of acquisitions do a what the programmatic over

in As different sizes. continue a we result, opportunities of a at look variety to

capital, PGIM strategy on our focused that especially light about But the continue growing of M&A thoughtful of macroeconomic be companies And to markets current of we're in support deployment continuing mature conditions. be our in interest the can we to strategic emerging regardless our continue of and which and by of the evaluating capabilities financial the each the about scale our of existing transaction. distribution increase size, going we're thoughtful or to our expand merits But be businesses. to

Andrew Sullivan

it's you because before, to higher and, to areas. work on we've continue We're in growth, globalize about add business to John, focus higher as Andy. Maybe I'll talked PGIM. asked going the just about fee

private think should about asset real you So capabilities. alternatives and

Operator

coming is from Wes question Wells Fargo. Next from Carmichael

Wesley Carmichael

a question RBC. had I on

slide within that RBC the excess to for And is size of your that RBC just ratio could you just PICA's us? wanted ratio? showed maybe XXX%. is confirm, think I in I IMR that negative benefit of

Kenneth Tanji

the level Ken. negative new that of admit results. the quarter were third our our It's for at IMR cap the $X.X as -- in relative benefit admitting is effect standard and is Yes, We been which RBC -- billion, has to sure. part Yes, the surplus. able to is of adopted

already there. in reflected that So is

Wesley Carmichael

products USD-denominated be current follow Japan could under proposed an just up the you are versus SMR maybe question your ESR, how and us ESR just on to maybe treated understand framework? earlier And help on to

Robert Axel

Wes. Rob, It's

that's standards on that don't capital still -- want first that this long-duration has a necessarily framework as, take I product, the a the to underlying been international regulatory are the actually ICS that. framework emphasize development, reflect have is date particularly based And question and in those the all, that to not standards of It's U.S. regulatory -- a been in developed. me Let of economics

of ultimately So at to is how And level we continue well terms not. into or continue the we the proposals the their it's the that when to as quite retirement we ICS. front whether get in reflected on one Japan sold life modified both set products economics international of that long-duration types international of work and of with side. work the the into are don't they found typically the shortcomings on of is on that regime, get you right the current on the U.S., what the But in gets side

an progress hopeful continues there. that's making we're industry where work area the So of with to And regulators.

that As Ken in extent how basis, have would then alternatives the mentioned product are manage earlier, do To way challenged us. demand the Japan for any think on that strong we marketplace. that's a available about in that products to to there's a go-forward we the

So consumers dollar-denominated the like Japanese the products. U.S.

the those do to on sell with we'll to solutions continue being finance them economic industry basis. in yet able want marketplace. for will products that, to the And And up come an able so be to

Andrew Sullivan

to obviously Andy. just are in, have distribution, was strong changes that party. we captive lot is both and ability flexibility us. have a this at to navigate We coming I third and of incredibly Yes, add those going

top-notch, at from delivering a recurring experience and and been And dollar that customer very we've single very a perspective successful great recognized have U.S. and both wide premium premium. product portfolio We been yen a for. we've

road. changes business navigate strength down are coming the the of complex that to that really will the us enable So

Operator

is JPMorgan. Bhullar next coming from And from question Jimmy

Jamminder Bhullar

PGIM a question flows. I had First, on

and that maybe managers on that lower issues dip are assets negative just function your and in retail industry-wide assets? do the saw what the the If just you should the then institutional commensurate talk on fees or lost? the relatedly, it's the in to you've flows asset of slight you the seeing think that funds, fees, are it could you extent performance? And to versus impact higher both be drove what about Or

Andrew Sullivan

take So it's Jimmy, question. Andy. I'll your

of $X.X quarter, So we billion. experienced outflows third-party this

an equity variety for rebound reasons, a On story. funds including the We've billion. gains performed $X.X to clients end, outflows the retail as seen was well. were That recognize predominantly of have

performing the our strong We performance XX% have last of equity in assets with year. equity benchmark produced

On billion. institutional side, $X.X primarily Net income. outflows fixed were outflows were

a back until class. asset in gross seeing level have it's into this are stabilized. lower clear We Investors hesitant of come rates inflows are to

large lapse one rate saw institutional. mandate also fee in We low

are or As to the question, the consistent consistent. in headwinds And industry. these industry specific, your are particular, with fixed income

As higher for a forward, far environment flows. as rate outlook be will looking our our stable good

So we we know flow-wise. that expect stabilize, benefit to rates once

around we're alts in But depends on much higher the bringing the fee mix into very question Your very of of being strategies, into our private it rate obviously, successful fees, particular, in assets. inflows business. areas

Jamminder Bhullar

results where been then several that's quarter. this on was a quarters. good actually And quarter the Okay. business Individual the Life, past a But have weak

I in so lower you each for think mentioned the outlook business there's and Life quantify how much an earnings idea earnings? and from Can that the on underlying in of your legal one is a expenses presentation, the gets what sort you benefit was a Individual reserve release.

Caroline Feeney-Pfundstein

Yes.

Caroline, your it's Jimmy, question. take So I'll and

Individual include you one-time mentioned, mentioned, of this see experience. a And you of items. as that Life release also, a the legal reserve. did includes as number it does expense favorable But So quarter,

make and regularly activity to quarter. the reflect within practice the our it's adjustments this quarter release Jimmy, review reflects then review. of our that the the And reserves legal results appropriate So to

very favorable to and of about expenses results that overall, investment saw side, optimistic outlook on the expectations. In growth were I life also results the And fundamentals remain also for the in very there. largely you to in business And solid. overall, terms we say what saw the continue addition of aligned the to we're life our would strong underwriting

Jamminder Bhullar

of move of versus a color sort expenses Because more around. legal I size reserve? any the just that to tend on one-time view the And as

Caroline Feeney-Pfundstein

particular not the of a specific I Jimmy, would Yes, size reserve. comment on legal

we case. that specific release of on As reserve. I a size And expenses do But of the the said, a we saw was legal comment part overall. not of favorable

Operator

Benguigui is Next Barclays. from coming from question Tracy

Tracy Dolin-Benguigui

early, on it's share I FIA if just I the and was thoughts wondering you but business. DOL your impact on could your know

Caroline Feeney-Pfundstein

it's Caroline, your question. I'll Sure, take Tracy, and

of start quality So a we've advice and need access have regulations first while Americans continue all been solutions secure provide they protections supporter the that consumer I'll off to long-time ensuring the by that retirement. for Tracy, a saying, to

was ago. X days released just proposal the So

we're of And customers in we very it, still on and the retirement midst reviewing can thoroughly potential access much so specifically to and analyzing so their our any impact critical products. assess ability

about asked, specifically You Tracy, FIA.

to in to but we which the retirement realize will we So the of our reiterate a XX% proposed do continue part fashion. final suite timely change, be procedures proposal, comply prohibited there us, I'll that policies proposed annuities, customers transaction as still the just also to here. of that valuable rule. we're add appears our sales for savings a I And on being of in rule focus total on help the less exemption and our with meet delivering reviewing focus fixed expect just for to of implemented the do than solutions their today, are said, under indexed well-diversified we'd And accounts needs. solutions finally, we annuity same the annuity That process in that last to

Tracy Dolin-Benguigui

took could evolution channel Do with also place you comply in or think new IMO the that standards? they

Caroline Feeney-Pfundstein

sure your Tracy, I make sorry, question. heard I'm I to want

Tracy Dolin-Benguigui

agents, well independent the The proposal also be they the standards? last to equipped IMO improve since would channel, their yes,

Caroline Feeney-Pfundstein

comply impact, was we of the what and the be they'd particularly, as same as with not. an so rule. entire the and Tracy, rule, or IMO reiterate, would, there just do channels we yes, channels on their whether couldn't distribution what the very to I'll would terms and be all that prepared comment on of That I is so the proposed mentioned, -- DOL any we businesses where What Okay, in ready by the I will rule. all others to of impacted I say across expect proposed enterprise new in couldn't last comment way, And various ready any are include were would here. much I with

Tracy Dolin-Benguigui

call they're Will to Got like time consortium. it. investment you in thinking and there a say, years, time? those about terms be after option? like I would the of need like envision do want XX an know let thinking period Prismic touch to provide set liquidity but raising on horizon? arbitrary investors let's of here, Could new me to what funds? you Or in a Being investor PRU

Robert Axel

Rob. it's Tracy,

a group in investment intent of investors. itself with horizon, partnering agreement own, govern much independent term. very their and an has Board call long global with scale. or routes large are liquidity, there toward And growth Directors. to no is And But institutional Their we've provisions is Prismic otherwise. with that operate put we're quite of with will very the embedded aligned the So our that got Prismic.

Operator

from Wilma Our Instructions] question from James. is [Operator Raymond coming Burdis next

Wilma Jackson Burdis

A questions. couple of earnings-related

the $X.XX maybe it you is benefit for just from know going we if walk there. that in And a XQ? little other the First, trajectory us then longer? I of lower want baseline see deal benefits think a you the Re. restructuring. could I if Will XQ. Or bit is the update take through timing guys to previously cited $XX million would on just of closing costs an Somerset with to Or

Kenneth Tanji

for have with it's the benefits or obviously. the to think be at reinsurance will time close, Yes, question deal-related occur reinsurance incurred and the the part costs the not was The closing. the -- will the of sorry, obviously, Ken. in Re restructuring And of your of And Somerset the been I'm subsequent benefits baseline. second those I included of

Wilma Jackson Burdis

benefits to is see some time? going should XQ? some Or coming in we start take to it restructuring, the Yes,

Kenneth Tanji

be we I'm see organizational Are the the highly Pretty Is will sorry. in the you thereafter. then Yes, -- referring saying thereafter, soon or there and will restructuring? effective benefits that portion to quarter that's in were first what reinsurer? you that's XXXX. a

Wilma Jackson Burdis

a talk of And about there the from the of was bit a investments. on impact little RBC? initial liquidity Prismic could I you holdco impact PICA's know

aspect could just about that talk as So you well?

Kenneth Tanji

Sure. for the RBC settlement that Prismic The in was And to of -- initial impact modest. was impact was September. reinsurance that the our of ratio structured

that. But of the also over enable had investment benefits initial capital as we portion so impact reallocate retained the portfolio. time, And it will of we the

some -- the it have we as impact will so they will And reallocate immediately. also impact portfolio. had investment But we continued

Operator

is Next Suneet from Kamath question coming Jefferies. from today

Suneet Kamath

to thinking think and Charlie, And I of the block. of go reinsuring in think Prismic like your sort something I'm an prepared talked be extent is, to wanted about to to I care for further going to of we that a about annuity and blocks. terms is Is where where should terms you with referred where that optimize? again. life optimization of long-term remarks, Prismic? in there I your in-force I you'd in this in-force specifically guess, your you opportunity

Charles Lowrey

Sure.

back Prismic Warburg see a because we me exist and investors higher-growth, and opportunities said, Let management a generally component open step more and an of Rob very a nimble strategy tell you section, example either about just is our as less become Prismic formed company. global insurance. our solutions we're to significant that architecture of at this. is important market-sensitive thinking and We additional the really of how with Pincus asset take other and

third-party retirement to growth drive ways. capital enhances opportunities, business get, perfectly which and we're our leverage reinforcing excited and about management we're really to the reinsurance Prismic, to business given advantage insurance, businesses. the incremental And and point, system to those And in mutually in positioned our take asset And ability of three to reinforces our we your have.

to just structural and for completed, transaction majority reinsure like look and we'll assets. point, have freeing while less retirement PGIM to manage your can the of capital up continue business, assets businesses to we in-force And life market-sensitive. become settlements to portions we our of our First, those the

since reinsured And mainly and, PGIM's PGIM's our can would further we business under time, increased blocks, same business forward capital, supported Prismic third-party could and Prismic be additional which is finally, Prismic, accelerate retirement we write increase insurance write management. can to so new flow. And reinsure by Secondly, the can third-party AUM. at that growth again to assets

our such these mutually about have further capabilities a and we're to our important will thoughtful reinforcing -- and we of we there's optimize optimize component of business against further Prismic. for lot since Prismic potential reallocated how And resources being see So system. an is opportunities recently execute

blocks. we So mainly and be it's forward. retirement going we to could others about businesses think go about as think other we that the in But reinsuring life

Robert Axel

that of many market Suneet, reinsurance having to Charlie's sort their that remarks I'll a otherwise in increasingly an and products. general variety different just higher investors are as partnership it's sort seen we've of of a add for of vehicles observation Rob. behind is appetite

you this the vanilla if annuities. in annuity in vanilla the at look and transactions, fixed very So the out sort insurance space early very very started of space of much, reinsurance

gets that is do transactions a what seen into that, has annuities. over into expanded as a appetite you've to now it business model the get And continue our others investors as appetite. And dynamics well more grow. we that time, trend that their continue. GUL. variable it through and It's marketplace see insurance likely is expanded own of as appetite as to There's -- with that's robust And comfortable the will that's

internationally importantly, So and, we well. would interesting as opportunities, domestically I see both add

Suneet Kamath

guess, there I from used for take support stay uses? up the organic be then on and expect they'll growth? you to of that Or the And sort And just expectation the proceeds in other got to still VA deal, Okay, to holdco proceeds it. is that transaction PICA? those are would

Kenneth Tanji

Ken. it's Yes,

of variable reinsurance closed block the So April. our in annuity

from so of billion RBC dividend we and one we effective which PICA. was April dividends as the our in factored at the our capacity looked X. it the that we had made and we of made benefit And into quarter, that $X third is And the considerations

of one the It's a then about when and dividend the of So quarter. overall make we did RBC the looked to third of we in to PICA level thought we get $X decided billion the benefit. our at things

Suneet Kamath

out dividend PICA. of Sorry,

Kenneth Tanji

yes. sorry, I'm Yes,

Suneet Kamath

quick to cash a us looked a down holdco the give bit moving pieces was track of just bigger it kind there, I of like follow-up just trying the because just sequentially. some So Can you it went little there?

Kenneth Tanji

the investment that to a also pieces, Prismic. those the moving made as change led then I dividend. expense then HLA. we And million $XXX PICA bigger ordinary And very and holding The small interest yes. the a like that in mentioned, in just be course, billion was main a other Sure, received shareholder And are would distributions. $X from company our the components

Operator

from from is question Ward Citi. coming next Your Michael

Michael Ward

new the targeting balance third-party on the of external and wouldn't Prismic. third-party component your you're could business. that get blocks to being Another But AUM one wouldn't the on blocks of sheet? if the go Because the have mechanics, capital-intensive account reinsured, for I PGIM thought general exposure

Robert Axel

Rob. it's Mike,

Prismic yes, parties. third So will and have balance as for an doing flow both well appetite Prudential sheet from as

those as Prismic. brought We -- they're the blocks yes, will management will into get look we and put to on asset

arrangement have on the that's we'll go-forward we basis. to decision we now in as that invest how Prismic. then part much And with a make of So a separately, Prismic

of As is contractual to Prismic our for stay at in a a not now, level. There's at level. XX% that obligation us ownership

we that be that, capital basis. returns that business, we could through on on from returns attractive you a enhanced be when fees quite deployed the that But think get the asset the underlying that having about a blocks management said we risk-reward can our Prismic, the get for think by

have they in And sorts fee of a the go-forward. an appetite that would risk on basis of significantly overall the for reduce which components out business that some profile invest on when stream enhance so would those business, earnings we we continuing of to get

Michael Ward

developments helpful. That's real commercial one maybe we area? CRE, didn't estate. office you in thing, And for the Any touch guys on then

Robert Axel

-- it's No, again. I would say Rob that

update Sorry, Mike, that on you material from last to quarter. nothing

the high-quality overall or see there, dedicated the of office the have continue a within an underwriting that. standpoint quality resiliency given would overall that have And experience that expect, portfolio, components portfolio, to of We and the including you from we that to portfolio. very as real we that we team have the component estate

the on from loans exposure the valuations. the overall of low a valuation our on LTV valuations come quite collateral remained portfolio supporting a very while the updating with we've feel -- there. comfortable So basis. been to down. still continues we standpoint, And office But And our relative

Operator

Fargo. question Wes next from from is a Carmichael Wells Our follow-up

Wesley Carmichael

earnings investment includes variable that had QX, normal for of the this $X.XX, on ones, be But a baseline should the quick. Just couple income.

So I headwind forward. in to going was a just There's the expect just modest a hoping wondering if in you quarter, could help that pretty the us bit challenged outlook but be with if third term. near you your

Robert Axel

from second think One alternatives is being it. components the of two Wes, fixed from returns the about from a Rob, prepayment our standpoint, it's get to incomes having the as VII income get the See, portfolio that we that that and level we portfolio.

I think we've current of levels the that prepayment below on quarter. guided go-forward the expect expectations a primary the to income fact contributor to was basis. we That in lower the

to you expect should that. see So think I

provide don't I that, as quarter, good well a evidenced outlook. say diversified. very What current go-forward would basis, generally a that's On we an is have we the in portfolio

the particular well. well. in But And private so while this and you quite performed down there our as off, future to we of as up that in real would was actually, current continue expect performance estate that are In components would quarter, portfolio different it quarter, performed equity expect. quarters

And just clear, equity of private very to sort we small VC portfolio, to very have exposure within a area. be our the

So debt yield And component it's strategies. fairly high of even significant in a there's and more core private that's that, within equity. that,

stabilization caused within that that equity sort so some And of private debt portfolio.

well. vary quite will believe we'll as perform we markets we basis that to think I continue do. on But a that relevant So

Wesley Carmichael

And revenues other quarterly expected basis. it. you a think by then related $XX PGIM, your on range for lowered about I on million Got

you driving there. curious that what's can Just on some if provide us color

Andrew Sullivan

it's Andy. take Wes, your Yes, I'll question.

at by space. estate in real at the $XX came million. It ORR quarter the So driven was predominantly

consistent last was few story that's this the a pretty been So quarters.

the transactions. Our we real saw estate slowdown. estate lower agency and real earnings And from valuations declined

the you estate as average to the far the we rate muted while markets. We're our flowing look, $XX correct. environment. in And we've see per seeing million as expect are this slowdown to now the to earnings That As fees. lower about quarter. is private been again expect more from ORR patterns We lower directly go-forward that real well agency as in expecting incentive this be quarter-to-quarter, as lower always, will run vary

Operator

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

Charles Lowrey

for our with the to current Okay. into Prudential entering joining We're help their Thank and again next future business positions a generation unique model you evolution that future. growth secure us chapter financial strategy today. and of

business to model investing strategy mutually that stay and reinforcing be insurance our security. confident will you a Prudential well. expanding enable and and access are again, to Thank leader global We in retirement

Operator

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

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

Prudential Financial (PRU) 2 Nov 232023 Q3 Earnings call transcript