Prudential Financial (PRU) 3 Aug 222022 Q2 Earnings call transcript

Ladies and gentlemen, thank you for standing by, and welcome to Prudential's Quarterly Earnings Conference Call. At this time, all participants have been placed in a listen-only mode. Later, we will conduct a question-and-answer session, instructions will be given at that time. [Operator Instructions] As a reminder, today's call is being recorded. I will now turn the call over to Mr. McLaughlin. Bob sir. ahead, go Please

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

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

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

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

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

credit magnitude Our rising environments, including and financial of interest impact macroeconomic second unusual market confluence rates, results quarter the declines. equity reflect the spreads, widening and of

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in We enhance sustainable growth. several additional our investments to did We also ways. made long-term this

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will position that our to current our Our short-term shareholders. provides return of over continuing macroeconomic the performance. growth businesses financial strong with our higher through businesses confident update also now the rate to to and navigate invest on conditions, impacts long-term We're initiatives. environment the capital the our despite of provide us in benefit while our the progress time an I'll financial strategic on flexibility

a resulted portion and in April. our XX%. reduce billion long-term slide and sales three. our the full Turning pre-tax plans sensitivity sustainable overall the in businesses and of to investments by divestitures variable these reposition market approximately We We traditional to Together, completed growth. gain further support by service $X.X making to the sensitivity reducing annuities business businesses our a market of of

Moving to our growth investments.

Alex investment in markets completed partnerships an In and and acquisitions in provider advice, in help We South Forbes, access security world. that will are our management and investing programmatic Africa, insurance investing, a Africa. initial minority and financial grow expand retirement in the leading wealth of we of to acquisition stake retirement, around us emerging

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from sales more strong our Income We launched are FlexGuard recently experiencing offering. also

Turning XXXX, the a our in savings of achieve savings year full initiative to our implemented million schedule. target ahead a the of rate execute date $XXX $XXX savings four. to cost for savings run improvement We've to cost million opportunities additional slide identify one during million in also XXXX. savings expect second on now We of since continuous to on cost total We process cost quarter recorded future. $XXX and in of

to five. Turning slide now

expanding efforts returns access Our transform shareholders. robust core all a leader our with balance businesses of at investing This be insurance in the flexibility the provides is retirement strength financial to security world. and attractive delivering to to to around our to our balance sheet investing also the Prudential in

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by second returned we have of quarter, total million the XXXX. the of $XXX over the returned XXXX, During a And $X shareholders. since billion beginning we to billion towards end objective of our $XX of

information and EEO-X it and racial We an hold environmental, update on transparency over June, our our published equity our believe to details Finally, ourselves Report, equity business net-zero pay in and Annual in commitments report. that, the accountable emissions. our performance. of a social With to initiatives, I'll commitments front. on the Rob our and detailed to ESG governance achieving turn comment including on third progress In which Sustainability we the disclosures, for

$XXX International on per I'll legacy Variable performance reserves, an for reflecting second million included sale several a update or with quarter basis results Annuities. and an These update and the in increase well-established income begin We on Charlie. business our of six from financial XXXX. after-tax overview and strengthened emerging US refinements. annual own industry Thank slide assumption of to and policyholder on revised for of our a experience, billion $XXX Life our Pre-tax our gain process. $X.X practices Individual results behavior operating our included reserves primarily financial other the share studies; updates block an our and updates annual our assumptions. quarter million following you, were completing Businesses. from PALAC, based $X.XX and PGIM, mortality Current I'll adjusted of provide was also results assumption

net Our $X.X after-tax from full asset that impact income, was full interest for management, on our mark-to-market adjusted offset driven by -- on operating are our higher the used partially by loss gain the the liability derivatives billion than rates lower service business. of GAAP sale on a primarily

the our International lower by underwriting. manager of due the the lower to global decrease investment to venture income the reflecting and operating quarter. our US earnings annual reported underwriting of Results quarter, management partially more from fee year results The from related less year the sale resulting primarily decrease lower businesses impacts results, excluding reflected Turning partially markets, and offset PALAC. to income less by variable in investment ago income on favorable revenues than favorable update PGIM, ago of equity of income investment favorable assumption growth. co-investment our other compared in earnings favorable the income gain business offset lower net variable by decline investments, spread the Businesses a the lower investment lower driven by well and and joint less fees, were incentive in our and lower as asset seed driven fees as businesses, results in

estate private X. long-term remains public income, XX% outperforming their active primarily across diversified alternatives, assets $X.X five asset their to performance institutional real equities. of Turning to billion, in over PGIM, attractive portfolios and investment benefited net fixed benchmarks PGIM and global our investment outflows has classes manager, last of XX% under capabilities rate repositioned strong three, mix, Slide PGIM's and management as its rising inflows with in income, periods. retail fixed environment. from driven the ten-year offset diversified investors a business as by both

success investment and customers. sources US insurance and PGIM's capabilities, management businesses more and businesses solutions, of the and Prudential, access value to origination our bring our international are advantage, our and growth mutually of and capital of PGIM institutional of investment innovation competitive engine helping expertise asset enhanced As for create and private are enhancing. retirement other the our

through Our including execution access strategy, PGIM's continued flows the shift our provide retirement third-party due higher toward its in to and for strategies insurance to businesses fee our turn, complement increased liabilities unique fee and insurance successful PGIM alternatives affiliated growth. successful of record mix track of rate a that private business. source of average in the and growth credit

X% As fees only decreased by a management to rising despite by under equity assets due result, spreads widening market depreciation. and asset XX% declining management rates,

PGIM billion We private across which Notably, benefits PGIM's under and global secondaries estate from private $XXX equity and continue private credit, to credit in of equity grow our capital credit. year the across capital, real positions. market-leading the and has approximately management real private debt and scale business, alternatives platform, for our assets private across in estate nearly reflecting we private nearly environment billion billion raised from private of continued new up deployed ago quarter, credit. nearly $X strong $XX XX% and commitments also

Slide X. to Turning

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

in $XXX institutional less several the expand our solid transfer and quarter more cost We individual and further pension billion billion. $X.X $X.X business. quarter, were during Retirement longevity transform US and second reinsurance continue value reinsurance growth and businesses closed and million. to sales across capabilities towards sales to totaling structure market-sensitive its International achieved of products transactions lines closed mix the than higher to stable shift business markets. Strategies our of our and Institutional risk transactions addressable

the resulted pivots sales sales and more in billion with of of simplified second FlexGuard product in solutions retirement Our individual quarter. FlexGuard in $X.X strong have Income nearly

new fully record Our to tech-forward approach automated pace a digital strong business sales benefited sales. FlexGuard of implementing from experience. maintain and our helps This

earlier the phase representing with life sales COVID, benefits experience favorable the group approximately from a products ratio disability. Life the in quarter both of reflects our of Individual as XX% life well pandemic sales improved endemic and to The an for strategy, as Our product for variable pivot transition insurance reflect quarter. group also

next customers In generation diverse addition, the needs creating serve and of of range clients. broader we're the a focused financial solutions of on to

the expense on issue quarter, This Prudential launched platform. final simplified Assurance product we the

to slide Turning nine.

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

to customer value agent product continue our and digital Our important evolving our continue support, to focus to tools. provide customers, needs-based to approach mortality offerings including expand we we needs. as through And meet and experience their protection enhance

Gibraltar following by distribution the product needs the where compelling are to are expand increased ago expanding opportunities and continued strength market-leading teachers access XXX% on customers serve second markets, This third-party businesses sales, weeks capabilities through with to and launch evolving quarter, markets growing, partnership quarter, quarter, America emerging selected in fully of state enterprise expansion experience. dedicated established Life build focused in the where continued as channel, where Prudential claims For this well sales, customers. year we example, in focus two as In Mercado we We businesses an to and and customer of in emerging Brazil. regions to every a to Latin sold by creating this are channel. business was the the the of meet of the in sales Life the have exclusive Planner customer our compared June, record In there needs portfolio market. Libre launched value. policies digital website first in A&H to we region. carefully service where In we a driven on to Brazil, the add achieved to in help In accomplished a the can

wellness a health to a Medifé, continue partnership XXX,XXX in also expand to with We customers service platform establishing across Argentina. America by our provider Latin

addition, through our presence discussed Forbes, In an earlier. Charlie in we African-based South are in investment as Alex Africa expanding

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

and hand solutions We industry-leading And needs in continue to businesses better generation Ken. with and financial experiences diverse deliver serve I'll range a it invest the next over customers. broad customer to growth of to markets, of of the that, create

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

and suggest million on noted, operating for per the following our a third was in of results after-tax share pre-tax $X.XX As how income we To the earnings develop, for might sense get quarter $XXX adjusted in adjustments items. second quarter an basis. resulted

a to an is quarter. First that $XXX in the one-time two million for adjustment net items charge second of

gain partially and This update legacy other $XXX a from was primarily $X.X business, assumption annual the net offset block driven in charge described. previously annuities. resulted refinements Our our by as sale Rob Individual of a billion, a million by Life variable of of

in $XX second quarter Next, by variable million. the expectations investment outperformed income

placeholder million. due quarter that at adjustment underwriting adjust the for from Businesses, special claims million our hospitalization includes a is for home provision benefits in we to experience $X regulatory Third, recovering in International effect. policyholders net for third a with COVID-XX currently This X experience by of the in $XX primarily Japan COVID-XX in accordance

We updated transition an continued mortality over mortality our US gradual to have the COVID-XX also Businesses for expected endemic an include to time. assumptions with phase

venture have While the geographic and to I'll per us in experience, you lower by offset lower impact and continued items result on PGIM other million decline Businesses a typical income lower as that and to to earnings. reflected and if that joint of of expenses be $X.XX attempted due market share be items the depreciation, a than mortality that revenues depend would rates, the we COVID-XX-related updated to earnings modest US other $XX due of assumptions, infection as to share results. due quarter. last, mix, we related a specific expect exclude the factors to underwriting the third primarily of COVID-XX $X.XX, third quarter, demographic lower second lower the per in is will primarily vaccines. expected get items baseline actuarial income combined These quarter note partially reflect for fee a in now our the to were variety in lower effectiveness quarter, claims actual And and such fatality third

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

to and We a changes of symmetry long-duration estimate of to from of will equity equity will reserves. products in will AOCI XXXX, to relevant certain and the of applies excludes our income, Also for also book primarily excludes on adjusted believe known the book slide risk GAAP on AOCI, insurance of that XXXX. continue of remains book no Xst, cash We and have earnings statements, as to note, LDTI, assets now December $XX to comprehensive by measure which December as direct adjusted retained billion billion AOCI statutory We that reduced will XXst, lack XXXX. estimate Turning valuation standard comment new or other invested adjusted in lower as unrealized statements due be The XX. to value, of long-duration upcoming on financial to I billion will liabilities. value, AOCI, reflects be reclassification GAAP standard goes $X adoption AOCI new GAAP from which approximately discount our or into flows exclude XXst, will to insurance as the accounting the with gains reduced financial continue $XX a contracts, in subject business. accounting which and liabilities effect LDTI. primarily value rates, dividend January Japan remeasurement margins the by This to capacity. and other insurance non-performance billion accumulated $X effect our

As of $XX These insurance estimated primarily expected unrealized margins margins XXXX, factor to those are billion to XXst, after-tax an be products determining our in strength. December in financial important related to billion, business. Japan $XX represent the

to Turning Slide XX.

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

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

of $X capital a $X well our billion Our of service cash businesses our and facilities. the Annuities of to include from other cash above as and billion our funds legacy Variable flow liquidity receipt block of liquid due sales proceeds and as and retirement contingent full the $X billion free assets were range, business from to sources target

to our XX in executing Turning summary, plans reposition are we to on businesses. and our Slide

expecting one execute reach are cost and balance to transformation our We to our thoughtfully our savings and ahead sheet capital. deploy rock-solid targeted provides year of flexibility plan on financial

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

Evercore. Thank Gallagher question you. from today first [Operator Instructions] is Tom coming from Our

is now line Your live.

experience meaningful Was mortality would from talk the on helpful? start bit you've bit the more mortality there little it pre-pandemic? to Can a mainly review, seen like A lapse little of Was charge. the be adjustment side? what it assumptions the more drove through color the it? about Was pandemic? I'd morning. side? Was it there Good a mortality assumption you the that Thanks.

Tom, Yes. Hey it's Ken.

a the of give little update. Let me you assumption bit on background

we our people year year, that's insurance process available and actuarial most again, examined persistency studies think policyholder each from surveys. information know, followed we available well own I to assumptions, As We look business, And updates quarter, other quite our life the in at that's mortality. we second make updated established. primarily comprehensive did individual that's and experience this for industry from our our but also and

Let Universal recent surrender our assumptions surveys, the released and with persistency policy me Life lapse revision guaranteed reflected was gained experience. our products, with as that information, emerging recently mainly start lowered our changes, we and we as well and where that from studies

essentially so, for into the that portion And business. dynamic assumptions we lapse of more a refined

also of of a COVID-XX included -- lowered given recent endemic terms expectation from from well And mortality, to also or the impact trends. pandemic with phase. to we of future we improvement, as mortality the In claims endemic shifting

the businesses. strengthening majority across persistency of mortality policyholder updates all modest assumption. and the result was the were our Now the more reserve The of of

will the quantify if in And that GAAP could impact That's that helpful, about -- that addition also help result My all? talk capital how a is color. and really can at impact? impact Appreciate management, the Ken. to will follow-up so, just, in statutory you if this

regulatory strong capital reserves are updated The will magnitude to well a but impact comparable applied as ratios. our well. of to It maintain statutory have assumptions positioned Yes. we're

we of forward as going have free We well. flow overall, have to continue diverse and sources cash a strong capital position

question is from coming Your KBW. Krueger from next Ryan

live. now is line Your

you QX risk, Hi, factor implemented, updated an from for thanks. ratio think year-end? was don't risk morning. expect and impact be the previously factors of much which at I which believe, updated Would that when in is an mortality Good I longevity RBC may

Ryan, factors some overall been were of the incorporated, reflective will that updates and that good -- it's No, significant be again. take both either I the mortality-based. the and of of business combination given last Yes. impact don't Ken proposed, benefits for longevity year have we have a longevity I'll we expect and mortality correlation is between those. to and The again, manageable including believe, that those. mortality updated longevity-based those and

And Bermuda subsidiary -- question this Got I of that a established contributed Can on then had last any capital to you and last had give -- the get it. on your what quarter. you plans benefit shifting an earlier kind Thanks. more color are year quarter. the to Thanks. what or Business had what year from contributed you longer-term able last extent And into be that? capital you Bermuda to may start to for US offsetting

BMA -- we company with company. quarter. the The that reinsured to policies in obviously The Okay. aligned business a reinsurance including call did that Yes, really life also good launch have. to reserved LOTUS Bermuda, the the last block we new standards. We in, that's a based capability economics very a Re. quarter. We're of last it's well think put But Ryan, business. yes. It's variable capitalized, it's We've of following is new and that capital well it in a we company which

with economics framework the more forward, be that believe a our that's well this of aligned we as for efficient well. business will going Life Variable So capital business do

Thank you.

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

live. now is line Your

in go been disability, employees. given life. Thank lapse visibility? persistency not increased talent for of trends down market group other you by looks persistency It but participants, talk Thank you movements in life seen like war did among XQ you. very the and activity in the on There's kind much. about maybe Can

that John, back Hey, really morning, question. take effect companies on plans. up switching benefit level and Ill that we Andy. it the bring during your pulled it's good Maybe their pandemic say a the saw was I'll general

other level through marketplace, in come out pandemic the it's seen, we've and activity. we're side, normal of As endemic, we've as RFP more a hopefully the the coming becoming and basically,

sometimes we normal. the of that have imagine, as gotten When closely our talk that business. retain and the the results. rates things want we addition So our case get persistency by can't profitability to of versus we we're persistency, always pleased of is -- the to levels the our very to business about we're the we profitability managing subtraction. our group and insurance to at of of a sort lose. get we the persistency And profitability, plan the go. If back let businesses secret we But business would that move track with sauce we to pleased quite part intention follow-through in you it And is, very our

in is And through That much. very you if those? should about Japan, transfer, harvested question, a Pru be risk can how be realizing gain Thank follow-up insurance may. a Great. then, that or my we that I unrealized margin thinking

Hey, Yes. John, it's Ken.

basically Let here me just less the and unrealized future we're is insurance as of you provide present for under to -- of to the the -- claims. is claims quantified constructs. of it provide amounts -- premiums can margin that value needed premiums referencing the the think And GAAP

is And So it's reinsure capital It's of business. our potential source Japan of a is of Japan well, the over there reflective the of it's to choose and and majority it from cash and we is it our support business, think of block to profitability indicative that expected could is the and if free profits claims. It good the value, release we and there embedded strong the time. what as profitability margin of a needed -- business, flow what's beyond is we way. above

Thank you.

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

now Your line is live.

QX segment going million. Individual of power in back underlying underwriting, the that in the think $XXX is review, million. put of like question, you VII normalize looks range at Life. and I first for baseline When assumption slides, it to we the $XX the Hi. the And Thanks. guys My earnings

quarterly the there a assumption run if million segment? And rate roughly from review? pre-tax $XXX impact you are level for ongoing good that any is earnings can talk earnings So about

I'll is capability reduces this Life our Elyse, Yes, an Individual our quarter. earnings your the million $XX on question. impact neighborhood ongoing does The per Andy. assumption take in update core have of business. It

So brings to to What slide, the it was gains $XXX about our you're third seasonally our in $XX that of it remember $XX core XXXX. run so expect have million of million on we million. higher rate down seeing before, quarter walk underwriting in

So if gets you that adjustment, XX make that that to you baseline.

the Okay. quarter. or reason, we a And you question then lower second for is on Thank think you. season. by just million my should Assurance about enrollment assumption can upcoming baseline if us revenues, give that roughly impacted IQ, guys in XX% And second for declined perhaps some color there the the Were on revenues that indicating segment? review, some just $XX then

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

revenue start business Medicare you of said achieve Assurance masked. get required Let pointed scaling still as the very that profitability. as sort that important to distinct made what's focused With lines that are is the by that we've in good this each to really to number to product quarter reiterating was in up IQ of me progress are there we're of and on things in a somewhat that the platform, Advantage this, really discuss

adjustment adjustment First, is was a million we on on $XX persistency. an negative based adjustment, a did have that that our -- assumption impact LTV revenue, direct

masked Advantage did did factors Advantage year. XX% open under a two quarter. special not an versus Biden like business up we on they Commission in period really the Those Second, a enrollment XX% XX revenue and saw ago the healthcare last Medicare a increase quarter resulting enrollments a versus ago administration year impact improvement Medicare in the year as

continued product pleased strengthening we underlying the Medicare Advantage line. the in So, fundamental with are

of how our fourth is, third smaller we'll that first making so agent We're good for cycles preparedness success time your becoming entering two progress The having. seeing underneath have the season part preparation. the now And question difficult our to the hiring specifically. the full be ready -- very agents, enrollment players perspective us. partly an in in from about are open feeling We've we year, of in we're the great of candidly, some due we're space benefit quarter

is Instructions] Jimmy from [Operator coming next Bhullar you. Thank from Our question JPMorgan.

Your now line live. is

a just question impact its and Hi, morning. income. future on I had on first good actuarial the review

mentioned we on think $XXX impact million well? assume commensurate I on as GAAP. income a Should stat going you forward

the be would to GAAP -- forward. a not would to impact going of a have that, on back we'll but similar quantum future there impact have strengthening It get to on I'm earnings.

then And Okay. in about and for you Count Consultants it's expectations talk – and -- your can in and decline the your Gibraltar Planner of the what by factors the channels? of Is being going both forward or decline sort Life modest more Life are of those? those in we growth assume sort agency caused growth COVID-related now right should of whether both

slightly resignations LP Hi is has Jimmy, this LC LP roughly offsetting Scott. essentially been The count actually count negative. has and been our flat with new recruits

might to in pandemic environment. actually little in As challenging a recruit harder to mentor kind bit It's more this of environment. hires been expect, it's you a new

expect the We to the challenging pandemic But kind remain then improvement expect return normal pandemic. in of a eases. to until situation this we beyond would to see

worth also expanding a focus it's continue of our noting great deal of third-party think our channels we energy on markets. all to across I that distribution

Thanks. Kamath question The next coming from is Suneet from Jefferies.

line Your is now live.

Thanks.

wanted assumption statutory. to on back and the Just impact review come to the

to given GAAP need on charge, absorb excess similar you're the basis? took that does a PICA infuse enough RBC going the there this you to to is suggest of capital sort charge the there in Just into of that size or

to manageable, not to we're a result. expecting where be this to have infuse I maintain ratios. very overall Yeah, right well additional as now, mentioned, we positioned think we're will strong capital as And RBC statutory

I then sizable pretty still ask it on idea inorganic the need And over growth the get it. there. improving And M&A earnings of Got like to Okay. seems ask businesses you'll same from Charlie, always question guess XX%, the for, to strategy. I contribution this I'll

thinking So there liquid assets out out the mean, company of put just what seeing the to work? $X curious, Thanks. you just at what you're seeing about holding are of there? landscape? seeing inorganic growth, you to some Are billion in the opportunities I

sure. Yea,

We’re point different of seeing cycle. at the number opportunities this in a

beginning there You're reduced things have wouldn't or multiple. other that some been see to before things and free at up

have make a say to I order flexibility is, be it's think acquisition. to about time So good observations. a of of in that What able kind to I'll couple would

balance may your strong present going we through sheet important The means manage be consideration And of But forward. whatever first us to we take we to strong sheet our an we advantage with opportunities balance can for as macroeconomic to a market that's as second, look provides point, flexibility the is themselves. that conditions having a us go forward. in dislocated that face

be to and look to opportunities that themselves we're We're flexible in that -- current sheet. with have do going for going environment. we're the to a economic going remain sheet, may we present strong So balance balance

Thank you.

Sachs. Your Alex Goldman next is coming Scott question from from

Your live. line is now

Hi.

First question business. I had was on the Annuities

power the was we the I next closed, transaction maybe, the equity the then several if lot to of think quarters? think is that Now could block, you how And the wondering just think, a and moving earnings runoff should that just parts there markets. help of through transaction, I us given of over

So, -- Alex

transaction. had the were earnings we what is talking PALAC time was million it a was very that. we The comment. transaction. our $XX as would consistent Go and we came did announced ahead, -- about right. the And I and with of quarter, -- it at Maybe All just in I'll about Andy. that reduce expecting the by close

less strategy our maybe benefits up and I reduce just add. back to traditional just to with jump bring XX% to variable level our a may earnings. living be Ken, annuities guaranteed in to it than of exposure enterprise Yes, our intentional I'll

transaction. and $X.X derisking the two-step this to runoff that certainly volatile intentional, then, saw of other sales. FlexGuard that design. the part But those and of remains very continued major process reduction quarter. of runoff was with that on a was simpler design, chassis, less billion so the more strength we're We track. And pivot the obviously, in is it our And pivoting pleased And

And the one I on was for it. the Got second LDTI. you had

that's the margin earnings a this approach does do mentioned with you there's where in because of help earnings a mean sort sort book some on impact. of it's a that has pivot business. LDTI. margin particularly to gave You the the that, good left What the disclosure to of reserve, in of I materially the that of And value power? that assume know lot us change Can that power? of probably I through think lot Will you XX, to Japan, that lot

and more But around overall me that accounting providing the be -- disclosure whole we on we'll some implemented. earnings. Yes. transition to time standard it let new -- around thoughts the as is the provide Overall

expect no US higher, don't some level operating on be impact the have we in our impact insurance. and lower. some and retirement generally overall, be little offsetting. group significant the Certain bit or earnings. businesses from overall, internationally, a core will that's insurance like businesses a of and bit First, a And will PGIM But

in So level a core significant our again, of overall, we operating change expect don't earnings. the

Thanks.

from Our next Tracy from question today is Barclays. Benguigui

Your now line is live.

study. tier. industry and in provide very mentioned of Is who assumption something the on would question you conducted that that that another the have available I that speed that you the widely participated study We're cheap or who be regarding context in could if is helpful. morning. Good study,

Yes. there. study. of of a done it number by involve disclose not the proprietary industry. and did liberty was private We're Tracy, people to who was at a party, That's the in that information in

that's I tell about you. can what So

the last of billion about noticed full it. just the year were Also wondering corporate low Got expenses in I'm to the $X.XX your And compared Okay. guidance. year. thinking how baseline you quarter that provided you're

Yes.

that During year. an did some quarter. then do the gain lower expenses this higher half that favorable expect have we given gave. originally and second of the the half, expenses some the We in But seasonally timing. expect And we would did in helpful guidance there are be other FX is have have we where X.XXX the first items. modestly We have quarter, below some was to we did we billion to

Thanks.

Our next [ph] Wolfe from Research. question is coming from Maton Jack

Your is line live. now

yields? on portfolio. ask new Are any provide turns a the current what year? given to Hi, average morning. regarding in can the I percentage portfolio of over there wanted rates And metrics money to relative investment portfolio on then good you

the Japan. compare positive yields, rates and to can new in XX in US they're provide -- points you the spread of a In in Jack, points XX our the I that you. basis money about it's basis if Rob. portfolio up terms for

rates against our means rise rates on yield. in we portfolio having the longer our when measure that no we're money drag a So earnings new

terms In of X% an on rollover, it's and XX% somewhere between annual basis.

strong Got clearly, there the could I quarter, flows, was driving maybe it. forward? net a this And flows. question divergence recovery what's pressure customer those a you Thank flows in moving types some on the but retail in talk the business. outlook just outlook institutional you. across the your for about And some guess of and then on just PGIM drivers and

I'll take on flows. it's Jack, your Andy. Yes, question

vary talked at about flows quarter-to-quarter. in we've As will PGIM past, the

So of long-term $X.X offset outflows as net record. the on very $X.X track were the billion stay retail flows were very institutional roughly by In QX, inflows we third-party billion. flat of focused strong

you me color give some that. Let on

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of of on that. positive of record to our track and build flows, we'll continue quite we're So, XX years of the proud last XX

you. Thank

coming is from question Citi. from Next Ward Mike

now is Your line live.

guys. Thanks

strategy like that of think Just And require follow inorganic question in would it of wanted chunk to on terms very up transformation. But acquisitions. point, decent about your growth. seems a on to touched you the Suneet's his I

primarily buys, we should existing strategy do of business your organic divestments is around So, growth or or you I from assume guess wondering, acquisitions or opportunistic here material that from at reinsurance kind mix? just the still look

This Yes. is Charlie.

demonstrate of good that in going proceeds, our do sheet. done capital. right? going in and and take But to to we're a said we're be -- the our discipline, the Because to the acquisitions me to balanced a strong businesses macroeconomic a be past, continue stewards one. as by to we're approach about combination to our of of consistent a going going the strength light we've what in shareholders, is we're to the to to while to commitment of and to for Let thoughtful be capital redeployment maintaining -- financial a a continue fulfilling within balance especially conditions, going always It's both, deployment of we've

at sense. to we're again, but we've to they So, also investment make that's acquisitions, always said forward. in make of divestitures what to go of a if divestitures blocks we sense. we'll And we're as going if combination but only business, look look going returns shareholders, businesses, additional at of, do our they And

to addition but sides So, goals sense for it will -- make be it and our potentially subtraction, both we'll through has on shareholders. both get to

very much. Thanks Okay.

sell a guess, I have some point, it Life the at the of has longevity this on the it so does diversification the at to it Life? is or thinking difficulties kind of segment beneficial, seems any important almost about review view benefit, few you're loss, like impact offload in the your mortality like it even Life extent or pretty strategic a be last on faced just Is of that business, this to to It might going guess, that business? if comprehensive that offset? relatedly, over to you sounds Thanks. I years. And hang the were

Yes.

business, Let Andy, to there's some me significant potential still on it. start, we for Life commentary want industry. the may growth think then add you But for the and in a

insurance gap. trillion -- life $XX a insurance have You

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in, but PGIM, So along lot there's very that it's businesses of we like we'll so remain go carefully forward. Andy? with we a a do other interconnection would with and the very, business as to

to, and our simpler recognize just variable we single would and pivoting began to the But volatile derisking We We life rotate selling aspects and universal see the that path third business. about GUL of and life very towards the add term. and GUL clear. strategy -- remember I of quarter we've simply product had XXXX in forward been Charlie, expense has designs, we inclusive explicit portfolio committed strategy remain Yes, that the GUL. disappointing a that of is final

efficient. been business leaned make also expenses more into to We the have reducing very much

that, power filling like we're that returns talked on, business and pricing the we're a of that putting Charlie that where doing and of we're block of as have the So we about. seeing new positive lot business sales, we're we that gap

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

Okay. significant very you returning savings and sensitivity, to cost made advancing and our much, Thank you reducing progress for us long-term market in thank shareholders. growth, joining investing today. while We've capital sustainable our program

become expanding a your our us enabling retirement you security. fulfill to attractive are to Looking lives while all today. to and vision even to confident value delivering access stakeholders, customers with will of ahead, including again and financial global our returns for in our time our strategy, and for insurance to investing that deliver the joining solid difference along we an leader our help meaningful more shareholders, providing our us Thank position us in

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

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