PRU - Earnings call transcript Q3 2024 | Prudential Financial, Inc. 5.62

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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 are Chairman Andy and Prudential Head on Rob Lowrey, call today's P. and Chairman; Representing CEO; Charlie Falzon, International Businesses; of Sullivan, Vice Feeney, Global our U.S. Investment Caroline Jim, Head Manager; of Businesses; Controller Principal Yanela Accounting Axel, and Frias, Officer; Rob Financial Chief and Officer.

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

In presentation our includes addition, measures. references to non-GAAP

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

turn I'll now And it to Charlie. over

Charles Lowrey

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

Our to world. third efficiency, product clients our the momentum and our in and insurance pivoting performance increasing suite positive our customers businesses, growing the retirement needs capital investing, around and of reflects address quarter continued

as insurance originations We and and performance across and PGIM. our as well reported robust credit U.S. strong in retirement sales international investment businesses private

and maintained We businesses to approach excess returning continuing our to our in capital disciplined to also capital deployment, invest while shareholders.

financial and strength. Our backed our strategic progress performance by are

a This morning, growth, Slide X. highlight company. we to Turning will higher to how continue more capital-efficient I become

increasing capital businesses, while market-leading our growing our are We flexibility.

global business a retirement at is the from retirement taking our look strategies by start closer Let's opportunity. benefiting how

now through second liabilities. deals this with reinsure IBM, billion transfer XX time leadership have latest was closed On pension the in risk transaction X out pension the transfer institutional risk largest this we of the of a pension $X in transaction, to U.S. reinforced With continued our side,

far so exceeded products individual sales billion product diversification strategy. our On $X our in this of side, year, annuity X have validating the

demand Japan products. Our how of growing for retirement great addressing the another is business example we are

While Japan, well retirement life sponsors benefits to savings retirement XX% the solutions. to year. traditionally to is PGIM of help bulk of up products sales compared plan beneficiaries business are its in has deliver Meanwhile, and positioned comprised the millions diversified insurance our through of prior year-to-date investment

supporting leader market and a defined $X.X As more nearly plans, largest funds. half of defined XXX PGIM contribution management trillion of the under assets with than world's serves pension benefit

at further expanding position increasing solutions businesses of our our how let's products Retirement relationship Management. In Now are we we are and Strategies announced association the networks. our our global lives growing In health expanding with and group business, products distribution insurance workplace adding in we new supplemental and individual market-leading like look diversifying recently we're and partnerships, growing annuity our by our X,XXX our under business, segments. market JPMorgan and number the disability the Asset

to our business. Individual Turning Life

on our our business strong mix, connected our Brazil. more We continues affiliated lastly, capital-efficient we're deeply and benefiting and in International strong and product recent channels. Japan a flows benefit and launch from have businesses, distribution from our And multichannel across innovative, positive momentum continue reinforcing to resulting In launches to we year-to-date distribution both basis. in products, PGIM

PGIM's underscoring private increased the the alternatives demand year-to-date, XX% and deployment private credit has capabilities. addition, In in capital market

to continue fixed also PGIM for to capture growing products. demand positioned retail the well is income

shift from business deliver is quality claims of supporting technology investments of retirement service In we're across our us mix. growth management asset our experiences and the same to sales, addition, continued the exceptional time, strategy. At helping our and our earnings insurance, in the businesses improving

Wilton billion guaranteed This universal with an reinsure to quarter, transaction block. Re we announced life $XX a

strategic universal a progress guaranteed our company. reduced have higher more will advancing growth, we our transaction, to reserves become XX%, this Following life capital-efficient by

to X. Turning Slide

continued Our than shareholders which more million approach disciplined included businesses during capital to deployment, our our are returning by $XXX to supported the investments in third quarter.

Turning X. to Slide

Our and a and risk growth maintain management rating, healthy supported We AA assets highly quarter. which framework. liquid the including the reflects end our than strategy at our billion a by capital financial capital further more strength third is position, in of $X

We liability also to and maintain asset disciplined a well-diversified, approach high-quality portfolio management.

our operating path in confidence we're capabilities to strength our In deliver with for closing, with of long-term I'll and to value Rob. turn that, strategy, it from all our a stakeholders. our And sustainable over position

Robert Falzon

our X provide I'll Charlie. an and businesses. our PGIM, our on I'll Thanks, results. of International overview for financial Slide business with begin U.S. performance and results financial

XXXX Our or basis, billion rates pretax reflect These higher year-to-date market-leading on income of our for share third per after-tax and adjusted execution to operating and and the increased which of expenses net $X.XX grow markets of quarter X%. and continued to growth a our $X.X results due sales fee of and strategy spread up $X.XX is support businesses income interest on businesses. the benefit the driven an were equity our basis the by strong of higher to was

adjusted higher-growth operating taken percentage benefits more improved reflects the we actions businesses, prior on capital-efficient This pivot our X.X the deliberate and strength products. return from Year-to-date to from the year. have the has equity point of of XX.X% to

annuity higher mortality better-than-expected This by and was growth by management reflected driven growth. higher Life expenses acquisition performance, our support more of our variable quarter. global Capital business PGIM, favorable Turning partially year higher manager was businesses in Deerpath by business by offset Earnings to from as driven results to and business underwriting income offset interest pivot contributions less support compared well asset income market Individual lower appreciation. as to legacy fee partially from had to benefit the intentionally This favorable ago as traditional the from market-sensitive fees, rates. expenses and spread experience U.S. growth higher the operating products growth. investment the in businesses investment we higher results to our

reflecting surrenders performance higher with product to earnings higher partially portfolio. by reinvestment dollar yields elevated results, in International of driven the Chile businesses Results higher due spread from the and of in growth, favorable the venture weakness support to expenses and our Encaje joint higher included U.S. less income yen offset underwriting primarily business by

Slide diversified Manager alternatives. public year. has favorably their investment long-term and strong from X. continues to exceeding improve contributed capabilities in Jim, [ flows. the assets performance year PGIM's net and to the of trillion XX-year XX% by to with of classes Investment and over XX% Turning outperforming PGIM's the and periods, X- Global management private has appreciation, increased past fixed This quarter, under both $X.X ago our equities by P. under XX% asset market and assets benchmarks last ] management across respectively. income, performance management XX% and strong assets over their benchmarks driven performance to investment under with

flows net plan were billion flows Total affiliated billion and These retirement driven year-to-date flows activity. third-party including by net billion, flows $X.X affiliated partially by $XX institutional clients. large net third-party from $X.X of $X.X basis, sales, in billion strategy $XX in net inflows strong episodic pension billion $XX benefit net the total of from a the billion, On included quarter of offset outflows. reflect

businesses the businesses reinsurer, engine value As and of advantage, and PGIM's management PGIM's through success our origination create and enhanced our our insurance. in capabilities, expertise investment Prismic, the other capabilities retirement, are of institutional support investment International to capital, asset and and and to asset of management Prudential, U.S. our customers. including a competitive helping private sponsored solutions for bring sources access growth more

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

including benefit platform, acquisition alternatives of which our Deerpath management diversified businesses, of our over recent strong In origination private has lending private Capital. driven addition, by credit assets billion our from experienced $XXX PGIM under activity direct the

Turning to Slide X.

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

to growing and distribution focus to with market-leading capabilities Prudential, those our distribution businesses footprint, on by addressable new continue experience leveraging while delivered partners a across efficiencies. market the of enhancing operating expanding solutions and our improve customers our broader driving through financial capabilities We

Retirement strategies pension $X.X in the included transfer Institutional risk funded PRT $XX totaled billion with individual $XX sales of second the of its Retirement institutional million quarter and of nearly the generated quarter. IBM. U.S. in transaction billion across strong transactions sales lines third business.

Institutional Additionally, market. PRT longevity risk sales were billion have Year-to-date, $XX for Retirement over the transfer captured billion as we sales quarter. the totaled of $X.X XX% about

Individual Retirement quarter in posted its of best over $X.X decade. billion sales a in sales,

index-linked continued sales the strong Our innovation registered have our products and of doubled have from more product fixed annuities than prior annuity resulted year. pivots in and

to off variable we sensitivity annuities. Additionally, reduce legacy continue running by our market

to compared in on Insurance increased a the quarter Group by of first driven year-to-date basis, year, annual the primarily based supplemental sales On sales X% in occur year prior health. enrollments. growth the

product the customer of which to and leveraging target profitability our enhance range. client both benefits diversification experience. actions is a to in increase executing are of improve performance We resulted low These ratio the while segment strategy our XX.X%, and end operating and of efficiency technology

of our the increases FlexGuard strength Life, our our including from its include since expansion Life, offerings, and pivot These from increased the distribution the sales like XXXX. In sales reached highest launch product and year-to-date. its XX% Individual quarter quarter products more ago year capital-efficient in capabilities towards benefit and X% of which breadth

X. Turning to Slide

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

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

where on businesses regions markets, build needs where creating where can in emerging In the there and are Prudential to customer businesses portfolio are focused market-leading enterprise selective compelling add are a of value. growing, we opportunities

savings of International sales. represented product sales to benefiting expand our and up year in traction and are as Sales the recent quarter gaining are quarter. current the ago XX% launches Japan with we retirement compared offerings, from in which XX% customers our were businesses Higher

also driven expand third-party performance Brazil the distribution continue market from strong In and were addition, emerging we planners. sales our growth in higher, world-class of by to benefit life as

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

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

I'll to And with it now hand over that, Yanela.

Yanela del Frias

below on of per fourth To to $X.XX get $X.X will operating for third on the I begin the was Slide expectations results. of Rob. the how $XX results. by the following might quarter sense billion insight quarter driven was XX, fourth First, results earnings plan investment resulted equity million into in investment earnings next our in a provides by for quarter, relative and private estimated quarter variable basis. we preannounce adjustments adjusted lower you, share suggest returns. after-tax which quarter Pretax income items: to income XXXX income third third Beginning of we quarter, for variable an Thank our develop, our

last, $XX initiatives And was $XXX adjustment experience items. million underwriting the and we above the expenses Next, for of quarter. third included enterprise growth. third expenses reflect other an in quarter Higher in in to expectations support by million timing the investments of

billion. expect initiative of full and and the fourth the to We expected continue higher loss XXXX in $X.X year investments in Corporate maintain quarter Other

note fourth We international seasonally to the earnings $X.XX. to million fourth $X.XX of adjustments share quarter. a fourth if in be baseline I per quarter. of the $XX quarter, items These share us combined expect per would get the will annual you for exclude specific also premiums that lower in

power the key and earnings The takeaways continued of mix quality businesses. intentionally improved earnings our in reflects growth and increased from that shifting of underlying market-leading our our investment business the

that I be that have few per provided While we would A note that please to there affect share the consider, in highlight. these factors other future. items earnings may items

rates. the continue money benefit higher decline quarter, significant we rates short-term new do our third impact that in from than in to potential We not from and portfolio the a yield were expect

yields, retirement strategies where We holding company, the businesses derivatives collateral duration earn our short-term and we and our fixed. which interest that assets by that rate cash pay is individual rate rates and generally offset short-term have across floating across manage at receive businesses,

transfer risk the pension time recent by runoff. we as viewed portfolio in-force is and reposition the from benefit over earnings grows transactions investment The

our as variable annuities have running is quarter. pressure second while to $X we elevated yen earnings experienced off the been continued before Japan a have $X we surrender third the low associated an to products of normalize. exchange quarter, the expect surrenders relative businesses rate billion per dollar U.S. a addition, our on level we And reduction legacy U.S. in near-term as experiencing in dollar. And some surrenders in billion at hit yen weakened levels has XX-year in the strengthened The In in-force the quarter. with during

into new of intermediate-term targets to note, will and the align order our of with outlook disclosure longer-term Also quarterly business, we in with better our provide to introduce fourth of to results. nature our greater release financial our insight replace earnings targets. the These baseline quarter plan financial concurrent

Turning to XX. Slide

prepared strong ratios growth believe represent capital support strong strength regulatory levels of to potential as the prospects, Our are above for volatility. impacts we maintain that we and to AA continue and are financial organic market-driven margins

in deployment, and liquidity investing financial above businesses substantial cash growth liquid we off-balance capital is Our and our shareholders. target thoughtful resources. our preserving $X remain capital which have to our sheet returning billion, and We long-term minimum strength of and $X.X flexibility, billion, assets for were in

Turning a capital-efficient higher are company. summary, more to growth, Slide XX becoming we and in

maintaining growth your strength are deployment with sheet. capital and supported approach that, questions. happy by disciplined is And our be of We to balance a to we take our will the

Operator

Our KBW. Instructions] Ryan first Krueger question is [Operator coming from today from

Ryan Krueger

the of update to on both and use . some give I plan priorities over internal reinsurance capital can freed then a going are Prismic key and capital potential from returning forward? what your various up that how transactions, would second free Because for just and external think you from time? question one you that guess up there? transactions be, kind follow-up you one, I activity was an one related you And

Robert Falzon

Ryan, handle take part in think and Charlie and first will it's of question, probably part I Rob. the your that. I'll second jump of the

what a before our spectrum quarter, active could continuing that additional which very what entered pipeline. a So an multiple if work reinsurance said we're I got reiterate would be Ryan, guess of I'd announce we'd last disappointed pipe. we've transaction across start is we with, into I It's year-end, not on we transactions

in at looking And well flow there, blocks. ongoing, for sheet that it's And have optimization. as particular on financing, or able made as you opportunities So our licensed focus be actually seen, [indiscernible] we an order made Japan. opportunity. looking team Tokyo stood third-party at balance a new advance sales dedicated to -- It's we we've up have own may in as announcement a that to

and amongst transaction be would on to all the in working likely things I The particularly is in interesting think, competitive that that say a that precedent play, from third-party we of variety they're While a and have would potentially is, we're that it going we think an which in Japan. next is in that back we help book interest establish for is market, plumbing advantage. which the the transactions doing market

say I we have a pipeline. Stepping would visible back, Ryan,

and ability the We aspirations investors. and the staffing right our scale to to And aspirations way combines have that's in to in of We've our our consistent the available got us at Prismic capital underwriting us. Prismic. expertise with confidence all a that give of

Charles Lowrey

is this Ryan, Charlie. And

deployment. Let and stewards terms to to a businesses really and capital shareholders. which to have our always focus. there said capital redeployment on what that aspects of approach and we are And our X said balanced of We've on discipline be good capital to we within that the me we want of that add approach in to our Rob consistent

strength, financial promises, which just sheet almost which is us is balance maintaining in years. our and for of first XXX fulfilling terms our to The done rock-solid fundamental we've

support the excess is the investing, shareholders as businesses. finally, programmatic we've long-term the over to of needs we capital evolving done customers, sustainable to returned organically our new And several and second through we both The across deployed million shareholders. products strong businesses, acquisitions in and sales meet our capital in past, growth and our to of to including returning to $XXX support this quarter,

we're going through. So we follow have a consistent and process, that to

Operator

question is Kamath Jefferies. Next from Suneet today from coming

Suneet Kamath

want these on And my retirement that to you're protection Can just selling I attractive get Japan. that protection compares? of products I this products business used how you the recollection the debt wanted you're new very how talk to -- a -- debt writing I about at the start protection returns or margins with to margins. the and sell? to mean that those products is compared products that sense you

Andrew Sullivan

the Andy. it's I'll Suneet, take Yes. question.

Japan, we're a profitability with So excited. of we actually the to and their impact given help long-term enjoy see in do an retirement. the the we're prepare opportunity types. pleased the sales for and We're seeing product mix between quite not citizens that shift expect Japan in the margins on the We

to of we Japan that of of aspects the set going see a retirement yields, low believe bank strengthening broader for and a longevity the we're Given continued products. demand savings

While expanding XX% . And into you investment a with of saw methodically product broad we sales our quarter. this sales success and of the those accounted we've in versus about capabilities have product that that year-to-date quarter for majority been year, already lean prior diversifying portfolio strategy the and retirement really increasing Japan sales opportunity. in the to there, third our

So we we're opportunity very a see given early margin shift, don't on what expect excited and the as that tailwind. we an be mix very this long-term days, impact should and as

Suneet Kamath

for annuity sense. Caroline. another year makes that I That record your be looks out. XXXX Okay. sales for would playing like is prediction It then And guess

how some about level from? of Is color where as of Just sustainable of product it you is around this sales do growth is or kind curious XXXX? rollovers plan And if think out give moving into coming you XXX(k) think can like the coming exchanges? we

Caroline Feeney-Pfundstein

your question, Yes, for Thanks sure. Suneet.

of our $X.X diversify the third we direct you savings to over of our the of more to with our strong and for past over years making quarter protected a in us quarter, decade. our first And few extremely annuity all, we as consumer me of meet sales in this performance let retirement individual are is efforts over drove pleased And portfolio, allowing result billion best So saw say need results. the the income.

In fact, product have broadest we we've now portfolio had. the ever individual

just years generated put mentioned in Suneet, ago, X to his sales. comments, as X perspective, $X had in that opening that Charlie And billion over in we only product

year. have have products that already this that exceeded we mark Now X

remains in sustainability, outlook on So franchise individual the question annuity terms your our for strong. of

every Beyond turning tailwind our day Americans a million now clear over and XX,XXX XX diversified between from we see XXXX. aging is XX and demographics. portfolio, That's what coming turning XX Americans

that that tailwind. is a So net coming of to from gross lot

also the protected We're income increased demand in seeing and for marketplace, savings solutions.

is So those and industry sequential year for you XX%. solutions as third say, our by sales more portfolio And outpacing of factors, our the combining demand sales our head strength on than distribution. record-setting brand pace meet that will last with diverse of a on and with years, year-to-date the

Operator

Next coming today Evercore question from Tom is from Gallagher ISI.

Thomas Gallagher

yen First yen higher talk know you see your products? you been foreign on products, currency pivot rates forward? in back Can but given move question to just products? big part Japan starting a a going between how in sales currency oriented -- you back that has Japan. what's into on, of see do mix I about are the foreign going And

Andrew Sullivan

it's question. I'll Andy. Tom, Yes, take the

that about in were our our every the is geography So the in XX% third yen-based The believe actions yen-based a diversified quarter, a nearly fact sales sales what operate. been level product doubled series over on this we portfolio has last in intentional we our of been in of part. sales. has X very years, having Japan based and We saw have on broadly of

and products between life nice means and diversification Japan, having a offerings. savings dollar for that having balance across and U.S. So retirement insurance, good yen

or have the strengthening for the contributor product these intentionally XX% that year sales new been products to material introductions And a choices our we've of so. customers year-over-year last -- been yen-based have over the So our increase.

broad success in been strategy. expanding So we offerings, a portfolio, believe the that we're seeing the yen-based we've and of

Thomas Gallagher

it degrees And Re question, but they expect X follow-up but XX to broadly hard like particularly, mentioned then Institute they're broader if would how to guess, Curious, it? obviously that years. And on persist you. are I additional the and what that view, and feel I thoughts recently put on think to Got referring prudence pass, exactly do that U.S. any -- topic? share to for Japan, to know excess you in And Research the you -- have which is, speaking, do Swiss you my you a for have handle to our out big Peru. enough report that does X industry come a mortality is is, reserves another exposures

Yanela del Frias

that Tom, me And take it's Yanela. question. let

So and have we from with yes, view the internal with consistent our observations the expectations the are taken report the and mortality approach assumptions. our that

to year assumption So we advances through every assumptions mortality the XXXX before continued our trends our trend line. accordingly the And returning pre-pandemic obviously, process monitor excess quarter. in during reflect mortality in second and some regularly adjust annual

hedges, I U.S. the have life mix you Japan -- such throughout diversified that insurance So and right? insurance would and we within and businesses, other as providing of remind globally significant a U.K. also mortality and natural the PRT markets

points data in broadly with that XXXX a experience. have quarter, on since mortality mortality-based few seeing in experienced favorable what individual expectations life, we we assumptions table we this our line and updating so saw is are in And

population the by Now life impacted insured general the population. COVID individual than less is

heavier XXXX continued is mortality. population closely in excess And that experience with Our to PRT be tends trended more population. our say general to that the consistent is I has correlated mortality PRT would what

Operator

is today question coming Fargo. Nick Anita from Next from Wells

Unknown Analyst

talk hit in PGIM first. about the you drove I what 'XX. I quarter. and went to how just I know there to expecting wanted come them outflows mean Maybe you're in the into it's could would but What helpful? be institutional maybe color any episodic, on on

Andrew Sullivan

on actually me let institutional retail. Sure, comment Nick, it's and Andy. And

on I'd starting reiterate I last said what institutional, quarter. So

to more institutional in flows. our near-term variability continue experiencing expect income We fixed

benefit money money DB institutional income, in globally, the clients these of variation. But we're creating plans flow will fixed these normalizes, into sixth to seeing near-term given obviously of rate to the more more world-class consistently overfunded, and remain largest expect and we business. this are motion our many curve and as DB back assets from That We leading that derisk. manager is

in dynamic, over often flows the from as and pension space, that looking from activity third-party at from transfer flow within we stem believe flows. transactions and affiliate life flows pension analyzing inclusively time the well annuities Affiliated it affiliated back and win insurance. our asset-intensive frame from risk linked. Stepping when are as we In a longer

So you're really talking of plans. about DB universe the same

line So is have look and both affiliate the to to under at PGIM full get bottom picture assets our management. you third-party on the it

If and across XXXX a $XX you positive look positive flows a billion year-to-date, our third-party institutional are billion. flows $XX institutional affiliated are our

we success. So record like of track that

Just retail. a minute on

On business, the And the in improving a saw $X.X quarter, the continue we retail of achieve side inflows. billion positive to results. we in

return retail, in seeing strategies, would expect that direction. income we and anticipated fixed the are Fed will We given accelerate the investors to

if term. the winner the back, income a significant strong. will time, experience And really, step is of we're fixed net very, So be you we over and our very long franchise strength tailwinds to going over think

Unknown Analyst

one. view that noncore That's the helpful. I have kind guys just Is deals maybe a can and of other just following did some guess, of any then GUL And in done. the business guys that level that you there the be you guys more block shopped? of higher you that deal

Charles Lowrey

Nick, it's Charlie.

be guaranteed we Re. to capital more fact on traditional answer then transactions question. We've that with annuities in portfolio made and one, we've quarter your the opportunities the a have driven variable and we're capture following executed the efficient, Wilton a several that growth. we good announced step But higher well in I'll XX% take progress me and also really directly universal mix considerable in about our to life and the XX% reduction Let positioned for reserves, in market the third that back shifting our feel business transaction reduction take

they drive And been efficiency those to we've proceeds. investing strategic opportunities our Having financial our been objectives part as our and will question, make of capital this quite focused we've equally is sense with our stakeholders. to additional as growth strategy, in of successful all gets market-leading and long that, on while and some we our for consider increasing your meet in said businesses

our we needs meet strategic talked that So about. to to review the we'll financial but continue it objectives portfolio, and

Operator

is Next Sandler. coming Barnidge Piper question today from from John

John Barnidge

On an pre-announcement going a variable that be for AUM that on forward, X-K? you're to going income the the investment separate do disclosure will wholly as preannouncement comes that from out

Yanela del Frias

be disclosure that the John, we AUM. on provide That it's current Yanela. will included in

inclusive. be So it will all

John Barnidge

then it you Solutions. upbeat of you Workplace opportunity on? there the that were about like you're sounds partnerships talk Can growth working maybe And about

Caroline Feeney-Pfundstein

just very experience, key on focused few elevating a of these a they're have number John, And for Thank give you examples, are our forward. it's confident going we strategic upbeat very much be also executed. And results customer yes, group enrollment overall contributor I'll are Yes. to things Caroline. to our going most that John. recently of you in the much question. but And focus and terms your on like we claims And management. a of partnerships we've

partnership And support. employees the counselors one-on-one with a millions that's them essentially, is for process, they're of One really transforming the of walks enrollment them connecting a benefits credential people. experience with technology for platform, firm leading-edge innovative through

demonstrated disability have well growing as to AI-driven claim is the as work, that expedite, to disability it's platform Evolution in us eliminate platform going is long-term is short This data an leverages evaluations help we partnership IQ. going claims. provide underlying claims. manual driven we've business strong Another fundamentals. just And us to overall I is for growing We're how with say outcomes we're help solid another nicely, by group our terms attractive as feeling quarter it John, for overall, market And about margins. at of customers would better in examine

very I overall strategy, to those strategic in partnerships diversification our and about claims think that management and I see improving when profitable continue investments positioned earnings. And much mentioned, solid to growth capabilities just we're

Operator

coming is today from Carmichael Autonomous. from question Next Wes

Wesley Carmichael

the towards be moving still away our financial new and it's My what going there more those you're considering was any in may first Is flux? can targets. baseline you and from on regarding on comments quarterly question, I realize the EPS us for guess, provide color

Yanela del Frias

Wes, it's Yanela.

we're what doing. let me So of start yes, with kind reaffirming just

really, financial into So to nature financial a beginning insight longer-term to emerge outlook where the making for this economics our longer time. plan of And better targets, provide we the new greater change over introduce and to our XXXX. intermediate-term business, we're with period of align

We and also business earnings our understand power. think better help will it investors outlook

really doing. is we're that So what

We again, these baseline VII. beginning results. be fourth quarter shared as -- plan the preannouncing quarterly will also, will earnings the the We be and with implement release replacing of we to we changes

that So the at the we share information time. will targets and

Wesley Carmichael

guess, I Okay. was Got question, My it. something second -- there on else? sorry, was

Yanela del Frias

sorry. No,

Wesley Carmichael

on think, I was that could business. what brings last how of a press just release, quarter that loss time the meaningful saw that I guess, be over business question stop business. presenting group kind curious second and the My through? I

Caroline Feeney-Pfundstein

Wes, question. Yes, I'll Caroline, your of it's course, take and

into range move So upon client across stop medical the builds our lots the our solutions, clients our diversify portfolio a and evolving needs of strategy less serve to And of both to allows this products. segments our the broader entry mid-market. by offering us better particularly in

group stop leverage perspective from broker make conjunction frequently it other deep customer a relationships. to know, you As purchase and medical allowing our products, loss our attractive in portfolio employers with us and

book, experienced a and approach disciplined thoughtful we of robust business scaling Wes, term, out our mix. of expect size And with reinsurance a to with plan total partners. underwriting given be it a to program the our near the process portion In take to small we

that guided approach our measured. and by a growth in is expansion committed and We're ensuring Our both this to sustainable longer-term disciplined success strategic scale. to area be will

Operator

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

Wilma Jackson Burdis

size the the you some types the market? team and sense And could present the of us a that that little maybe examples the make talk building Could more team, you're out? [indiscernible] about of of deals bit Japan give

Unknown Executive

Wilma, Japan, we do able Sure. on the so us place. in effectively dedicated into very what for agency to to there -- order it's what to an opportunity that's we've reinsurance Rob. in to see The put In there. so a transactions large be we is license need and to response have ground Prismic, business

even historically If products you think on that in -- sold other U.S. about and about Japan and currency-denominated have foreign this the the discussions Japan. foreign call, been sold are had dollar the in we've

long-duration much way. continue to marketplace in going that continues think curative create off that business to dollar-denominated the for those a because solvency that, can able compelling continue to is be very to those. But customer noneconomic to rise by demand get proposition able that's ongoing in regime solvency to with interest with that's give be economic Japanese in liabilities customers. new in reserves to the a have to products really that Japanese meet believe be they a an Japan, regime to returns and the that economically we the and products going adopted catalyst capital and a desire we on that square the so to liabilities to a respect ESR, be upcoming currency-denominated way there's being to the what for -- With insurers economic And foreign against that in finance to customers

that the actually marketplace we're about to and brand think able interested and We with standpoint. things, in gives credibility do that before, a our incredible that would described business other as in So follow quality of scale we're pattern an quite insurers excited doing book what our the optimization with I be from own us of would own there, that opportunity.

Wilma Jackson Burdis

Okay. that Is longevity tailwinds is blocks. are U.K. little maybe is seeing? understanding for talk there that And some that a bit about just And then market you're something my attractive? why

Caroline Feeney-Pfundstein

and I'll question. Wilma, take it's Caroline, course, of your Yes,

international reaching the very our the to do your in risk year, transfer pension I what the the the most And U.S., continue for So reinsurance or longevity for expect Netherlands. on we reinsurance specifically question say on see near size reinsurance, in term, to the size solutions. U.K. U.K., focused will -- remain in strong but we we $XX and would U.K., funding seek levels which at when of around we of the market the And look XXX%. there, billion actually overall

are a but this in So why we're in U.K. saw year only the that obviously, also in business last pleased also the this in and leader expansion you U.S., Netherlands. Wilma, is not we our

much those pleased X focus a of being, are areas leader. time very so the our remain and to we And for

Operator

from Next from [indiscernible] is question coming Barclays.

Unknown Analyst

Planner? pressure on revenue was to earnings surrenders wanted view in bit exhibited of noted a the some was Life a get had particularly that being feel kind made on that. that I pressure I there were products I from what elevated. was for And also franchise, is one on, foreign international First comments it a guess, the that currency

Andrew Sullivan

I'll it make take So has start Andy. dynamics maybe it's And by the to clear. question. your everyone let's just Alex, explaining sure

is the X from leading yen weaker policy dollar flowing So to level an of U.S. of enhanced really surrenders. That's things. kind

as the our yen products, recurring customers U.S. First, to become affordability pay on takes more it premium. premium issue has an for dollar

our some are second, -- investment customers dollar monetize gains. looking their U.S. products to Some in

reduce with obviously So That in. coverage on level sales. the they our their policy either influence of this, some turn has or they

experience instead segment. to But I flat, this growth best recent would way not surrender of have been had for low the across our seen the think period, being earnings business about single-digit over this think it we PII is

the So influencing it's and the both, AOI. obviously, premium

Unknown Analyst

Peru's does of redeployed involving from economic that as potential That's think for comments mitigating had we in be if denominated with on Japan business? should that than currency been whatever -- business, the about the your USD is think mean to own could -- were it terms a foreign cetera, about regime? helpful. much could in aligns on I you have I that reinsurance described duration, what where we it. then that? business, in Got like should in Prismic. of as longer releasing go impact Or there in would solvency or and follow-up potentially transaction a about I it further more out your capital And think engage When et was a the lot it very

Robert Axel

answer let that question. So me

it's Sorry, Rob.

question. that answer me Let

think reinsurance of our Prismic when about for about Let as grow our sort portfolio. portfolio. to be think me and really be that to other we derisk broadly, reinsurance opportunities opportunity whether reinsurance We more or one, we have say with to that an and

So growth reinsuring for by against risk. and diversifying financing

opportunity alluding the TSR you're We about response to -- an also that back like the our in to will as things be for that optimizing and think book, as regime.

You can And for from standpoint, outcome have when from a look business solvency us. regime is an in reinsurance, at that say, the strategy -- excuse we the optimal Japan. okay, what me, economic then benefits in and we

we to valuation business are monetize how being compelling to we're times or that, thinking a are be modified. we're to better other franchise transact to looking to we opportunity in what a products -- looking the And with being to see as that at marketplace when got do differently, a are a times there private against ensure by own So deliver the reinsurance compelling the to when risk-adjusted going shareholders There therefore, we've be value capital between as proposition. being able other where public our of about would a we're instances be on to going to are as valued within blocks obviously, regimes valued an optimization of there the higher to our and dislocation versus a our just basis investor on marketplace able they provide, where be those. return see they're

Unknown Executive

the USD that in in maybe And whole Bermuda X first And life from quarter quarter, we and the add U.S. business executed transaction Gibraltar new to to second to billion Pico. a dollar from if [indiscernible]. ESR. denominated our Alex, affiliate, reinsured business for and specifically share products we Japan dollar our Japan of I did I could

definitely in in of tool our all capital Japan. entities, including operating is a stabilized help So that will us

Operator

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

Wesley Carmichael

ESR, Rob, topic really perhaps on this uneconomic -- and have greater this for liabilities. you be guess something? understand regime the is ex think or I'm to would understand trying you insurers to issue, Like I just I I problematic the reinsurance is but for book, this on just for up I comments like are terms capitalize a like needing own guess that your and of follow And facing [indiscernible] your levers here? that degree is both transition particular reinsurance, to this somewhat kind to long-duration this maybe Japanese punitive wanted -- in about I of business ESR. to

Andrew Sullivan

You Wes, will Yanela, start -- Yes. I want and it's to in. add

Yanela del Frias

Wes.

of capital in terms impact start me to position. Let the our

as of reiterate Japan ESR would framework, like we that that reinsurance, in of upon our that we and any reasonable Japan. above levels in but are our reflected strength be AAA blocks target be So business, I'll ratings will and that businesses of strength like we new believe standard, have well we strong, capital financial financially that capital mentioned, levels tools the capitalized continue would have to a expect transacted couple including support we under implementation

Andrew Sullivan

broad was going we've with We've long that very of portfolio, period Prudential continued changing a and needs I add, to the very regimes type friendly we products. Andy. meets over have time. portfolio customers. Yes, Wes, and managed a Japan, that capital In expand ESR innovate at of just our product to including it's

reinsurance, everything with is, a strong the capabilities, navigate So need between line management profitably we bottom we have underwriting, ALM product these believe our to changes. as and combined we Japan team the grow continue in capabilities, and our hedging to

Wesley Carmichael

market as all just a look was quarter risk into That's there? with help maybe any to and would XXXX. you But follow-up my transfer the this Got fourth I guess X thoughts helpful. IBM. quarter to for pension the And outlook third the with very be even big it. I the quarter. know Any

Caroline Feeney-Pfundstein

Yes.

it's Of that and Wes, take course, one. Caroline, I'll

clearly, XX% year, billion highly long-term market a is attractive corporate a market view we we funding continue with this and to pension we share U.S. outstanding $XX market opportunities. highly market to over $X liabilities, favorable as competitive, in remains the trillion sales positions forward to are And of we PRT while uniquely positioned U.S. pipeline demonstrate and believe continuing leadership. the execute. our to strong And with look PRT in So we're 'XX, robust

to experience underwriting returns our originate generating us ability as Of to well our our enable while attractive course, our shareholders. price competitively scale, of for attractive assets as depth

evident what our transactions We executed Prudential And business. to And in our clients. confident existing industry-leading also we of this where complex $X with transactions feel have demonstrated have companies continue to of trades few been why deep exactly very and are remains about that over those the deals over delivered successfully our why go-forward billion and one we provide service. expertise, have is year, to a sales handle ability half combination believe

Operator

Evercore is question a from next Our Instructions] Gallagher Tom follow-up [Operator from ISI.

Thomas Gallagher

mind changes you And I think going next typically would bridge reiterating quarter say on that you to you to the change other any eliminate making? said going were to the the you're and disclosure. quarterly you you alternatives preannouncing out. you you're on heard I just what quarterly Yanela, say Did planning start provide you going were

Yanela del Frias

Tom. Yes,

baseline So the are disclosure, are and -- preannouncing X and intermediate-term eliminating 'XX making. income. key X with changes with we're Those the financial starting quarterly we investment replacing targets, variable we're that

in but unique to that's you changes. We quarter of going to understand speak still the the extent items happening, the help are what's really to

Operator

Kamath Next from Suneet Jefferies. from question a is follow-up

Suneet Kamath

to concept thinking book back on a with just want I'm to doing it this just deal about Prismic. make I sure of back circle wanted I right.

there when up lose there bit of and a fair you business, were offset So you to some you'll obviously, that's missing might a little be some say can you're the if Presumably, lag some own on I'm deploy that there? a Or earnings do back right earnings Japan, it -- some of Prismic to because versus initial when the you business is might but give being pressure you to you is EPS free. the the about to that us up of giving which earnings with Is a it, capital deal some block then between the that deploy be sort XXX% there of partners. book think new of in your way that capital, now you'll from it? you're of free those

Robert Falzon

No, Suneet, I'm sorry, -- I Rob. it's think

that particular, margins which in captured and you've virtue value. of you doing done same by deal unique have that apply that's we embedded reinsuring, that a very and capital reserves products we've we there levels unlock the of in reinsurance in Japan, that to it we And description our high have. is to it think that think transactions in to I use is well, not Japan the back book could which that date, each of

with And we're so the no our AOI capital able then associated reinsuring reserves on that release block appear longer virtue of it. associated earnings. By those with and will to

into analysis our freed to of that the that up capital. looks with However, ability translate the redeploy our economics at and what capital

Suneet Kamath

Japanese the is into if it Prismic, And assets that there would does it to of went all PGIM Or portion already? don't manage that they that on? manage fees the liabilities of a earn assets back start

Robert Falzon

by assets have the we that are liabilities with PGIM. opposed economics general business arrangement accretive but generally and to they by within a But -- those that liabilities when to where vast be to a do is on, to accurate would are have not in into excuse transferred have of assets set managers Prismic, today managed third-party our on is continue the they large, being The account them There's majority backing of vast, as I say, . managed that some selective me, -- the be couple would specific and that PGIM. we PGIM. focused Today, are those -- we that are it characterize third-party No. PGIM. managed instances economic of areas a of managed would the by PGIM be by sort a

Operator

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

Charles Lowrey

again for company. and quarter thank capital-efficient made and this joining us of today. the year, you, the a with entered you we've We've more Okay. Thank last become growth higher pleased to progress

protect they as the and customers longer. better are positioned their world to We lives around live clients well address growing of work and life's the needs our to seek

enjoy of and day. again, the you rest the thank So

Operator

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

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

Prudential Financial, Inc. 5.62 (PRS) 31 Oct 242024 Q3 Earnings call transcript