Prudential Financial (PRU) 2 Aug 232023 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’ll conduct a question-and-answer session. Instructions will be given at that time. [Operator Instructions] As a reminder, today’s call is being recorded.

the to turn now will floor Mr. over I McLaughlin. Bob Please, go ahead.

thank Good our you call. and joining for morning,

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

questions. we comments by Charlie, and will We take start then your with prepared will Ken, Rob, and

include It predictions statements. that results may possible presentation the Today’s from may forward-looking we actual is differ materially today. make

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

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

And turn Charlie. to now, it I’ll over

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

our results and operating across of insurance. continued for momentum underlying the record including second quarter group consecutive Our earnings fourth reflect growth businesses, earnings quarter

our our on support capabilities execute reducing to and by increasing growth. long-term continue We optimizing operating sensitivity capital market our enhancing to flexibility, strategy and efficiency

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

two by sensitivity Turning milestones to and flexibility. slide capital noting how significant our we X. morning this reducing increasing start demonstrating are market I’ll

transaction, proportion while less traditional annuities $XXX market lowering to a higher traditional quarter, products. our we reinsurance for billion $XX progress pivoting block million. I’m and continuing of completed the have that proceeds variable in of a achieved received second and annuities, the pleased sensitive objective of growth variable our we With this During of transaction

reinsure will transaction we accretive to week, last another policies, which block earnings. announced be universal guaranteed billion life a to $XX.X Additionally, of

this $XXX expected approximately transaction the year. the closes, million of proceeds of receive which expect is in be quarter to We to when fourth

deliver insurance around and retirement vision continue people and increase expanding to products customer more world. also our our and experiences access to by to channels We the on our security enhancing and distribution capabilities by to investing

and reaching America, the In Libre sales record driven new platform we the continued the insurance to of strong of distribution a expand our achieved Planner Latin by largest more of continued customers added Mercado now XXX,XXX and Also, life Life Brazil in quarter. expansion performance the through and market X.X last by Prudential Brazil Prudential company average than million channel. twice at growing third-party third the customers. distribution is country, quarter,

the continued well-positioned market, see transfer and quarter. in in $X.X as feel international billion longevity second than of we opportunity addition, transaction we the risk we more completed In are

annuity business In increase and billion our the since achieved $X.X individual the XXXX. U.S. the a XX% strategies in sales of the year-over-year, retirement quarter second of fourth highest quarter,

business, years. meet solutions as annuity our has reached of our the quarter new over one-third sales of $XX customer over represented in FlexGuard we And three annuity suite past the Our needs. fixed to of sales billion innovate portfolio

look and we management insurance. asset as we intersection the a of As global leader are at ahead, well-positioned

seamlessly accordingly. we Retirement, will liability pension growth self-service continued to which leverages expand adjust strategy and drive strength enhance Customers benefits brand, origination confident enable designed their our access new financial a same business and and a time, to is, website. to estimate are their retirement we through We get One customer of and and benefits example technology ways to institutional tool efficiency. help mutually their quickly that insurance in available retirement continue of better an security. annuity improve reinforcing global and future At experiences recent optimize our us capabilities, to gain our the investing planning mix, My asset of customers leverage to operating the the distribution understanding can and digital combined now multichannel Model

We new partnership The process to to chatbot data time are insurance informed across and also Nayya, businesses. processing benefits strategic partnership transaction using And clients a U.S. decisions. with experience capabilities automation AI a to leading our announced science group reduce benefit will workplace platform. make also allow technology more harness and robotic we

linear, while are better focusing driving As can and our that improvement of continuous company, our the and efficiency. part of customers, growth a agile more faster on we we framework, creating meet so needs

have this we but exceeded more we established do. work area, good two We having progress can think there is ago, target the made in years we

evolving are evaluating and additional organizational model, decision making. operating including our streamlining further structure our opportunities simplifying We

Turning current rock the navigate now capital solid balance and and risk allowed environment. to sheet macro us slide robust Prudential’s have frameworks management to confidently X.

of insurance Our AA at liquid assets $XX of the capital the quarter, financial and not and in strength to include completed which reinsurance million billion of liability management. our billion asset a disciplined unrealized margin; approximately that quarter; $X.X $XXX does approach supported second the is was by: well-diversified position, transaction from high-quality, annuities variable strong the traditional this highly proceeds investment end including portfolio

slide to Moving X.

achieved in of quarter, with long-term to transactions shareholders. million capital businesses, capital investing shareholders. balance growth flexibility de-risking $XXX to the us returned deployment our capital added we Our effectively returning to our with enables disciplined approximately coupled through the to In the in approach capital second

provide quarter Rob will on second of an and now overview And update our with that, our results business performance. financial an

results for on and begin X Thank quarter our provide I’ll with I’ll our slide of XXXX. you, PGIM, the and Charlie. U.S. our results second financial an performance of overview financial businesses. International business

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

currency lower derivatives, rate on after rates. higher and than by our mark-to-market driven million tax was and adjusted losses interest primarily $XXX losses sales, income, income driven fixed net GAAP operating Our on maturity by

PGIM, Turning driven net to support compared to lower expenses and the global from by from initiatives, higher earnings. co-investment ago increased manager, outflows and year higher and seed fees, our quarter. investment our while the rates had rising growth other revenues primarily management operating results businesses asset related to

update PALAC quarter fee Results our of more from from earnings in prior other refinements. The a one-time and the of increase the businesses emerging earnings our of assumption our spread offset year impact markets International assumption U.S. businesses and by and a income. underwriting, lower primarily higher in reflected annual primarily favorable, update, favorable income partially from reflected absence our gain sale in the comparable more and impact higher favorable annual

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

by addition, needs driven since improved mandates. the equity with exceeding by year equity our assets primarily a for client In last of liquidity were and has public strategies. primarily their from Institutional in third-party of one quarter, over driven the performance sub-advised short-term outflows $X.X period. benchmarks XX% net outflows experienced billion were quarter, retail redemptions outflows PGIM

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

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

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

X, our mortality and income, net our longevity businesses. produce diversified investment mix benefit U.S. of and fees, Turning from businesses to from complimentary earnings spread underwriting and slide

higher in leveraging drive experiences businesses deliver market with market new mix transactions addressable best capabilities growth, towards expand de-risking and customer We and across Prudential. class in higher continued earnings, the of value, by our solutions, financial to the our that to a invest mentioned, as evidenced sensitive less Charlie

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

as retirement strong Retirement has end billion stable institutional record Our which well sales. quarter to reinsurance including high billion, quarter. produce second business leading the helped $X.X value market were sales the as at transactions, of second of a values account international capabilities, $X.X of

annuity FlexGuard XX% sales solutions Income, in third pivots individual contingent strong of of sales and increased accounted sales this our fixed FlexGuard product quarter. In approximately of like for resulted approximately sales representing and one retirement, that more simplified have

with XX% increased life products quarter, and up from by compared disability quarter. sales growth reflecting health. year And year pivot our life were the the approximately in the quarter, earlier XX% strategy sales ago variable individual in XX% sales insurance driven Our ago to of group representing product supplemental

operating momentum are leveraging segment to in strategy as diversification, efficiency and of seeing insurance customer We’ve been while product we increase very pleased experience. enhance with group business technology we the our our and the execute

this results which ratio underwriting favorable benefits disability in and group include of XX%. quarter record Our resulted a life experience,

businesses multi-channel focused offerings. have Insurance slide and expanding at aimed are product our high international differentiated our markets. in Japanese high to and our service X, other Life our providing distribution expanding as targeted Turning we businesses growth on we as model, Japan, include In companies, emerging quality well distribution where presence a

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

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

the business quarter. were to year X%, compared Our ago international sales up

Gibraltar as driven were dollar sales channel. in sales higher U.S. sales as Planner driven by the single Life in sales Brazil, primarily up Japan. premium up well bank growth by in X%, XX% were record

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

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

now I’ll over that, to with And it Ken. hand

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

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

economic second our third the for and First, market exceeded quarter. estate refinements of and Variable in a will real update continued in the investments benefit over quarter, to conditions. however, expectations. potential due an million The not activity resulted has of to $XX for current adjustment period, prepayment period it time, annual revaluation included from investment other net lower income assumption and [ph] the vary exists our

expectations by of underwriting include elevated was And we adjustment an $X Third, expenses million last, favorable third quarter. second second to $XX experience in million items, for below the seasonality of primarily we the in $XX quarter, due expect quarter. the and other in million

power for that get by initiatives. These us growth, I’ll to business higher of partially higher the share share would key to rates, earnings interest our to quarter, you offset continued to investments quarter. including the earnings third underlying due in if adjustments note baseline The $X.XX. of combined a takeaway and be is benefit our items growth capabilities the improve specific third $X.XX exclude per per

I continued in investments opportunities reflected in these gain corporate an to to note build expect capabilities, will that areas other. and level increased growth pursue that be due we initiatives of and also would efficiency,

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

Turning to slide XX.

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

high-end $X.X target were the of our liquidity assets liquid range. and cash Our at billion

and ratios sheet balancing thoughtful Our of deployment, flexibility, regulatory and preservation businesses investment targets were distributions. substantial of $X capital remain capital our and above billion in capital resources, liquidity strength in financial we facilities. our shareholder contingent We off-balance including well our have and

XX in sustainable business are for and Turning growth. our to summary, slide transforming we

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

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

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

Good morning.

like the can the flows, First little were up strong about it capital talk the that dividends seemed you quarter. quarter paid question in dividend is, a from the pretty bit subs, a generation

deals freed later little bit up VA received and behind SGUL capital going that expect So, the relatedly, to to that. what the this the drove a -- be that you’re And or for you transaction capital this year, can the you dividend that the IMR you the year? affect affected Thanks. in change, to And it you the that on those use finally, Do to then, your rule able RBC be up comment and later whether proceeds? quarter? expect would

Ys. second part Hey our cash from businesses PICA and executed of quarter. flows Yes, in flow and cash it’s planned subsidiaries That it distributions Ken. Japan our And the from Tom, from year. all as we well. affiliated for other was dividends reflected plans again, the

a very position capital Our as result is healthy.

our from ratios above does regulatory again, range. our will that not transaction, were flat are the prior the Holdco GUL the which of quarter VA target reinsurance a transaction, Our later. the be AA capital high assets close to and benefit would subject our $X.X objectives And of yet end relatively but include reflect billion, recent

that it closes adopted. the NAIC when benefit we’ll proposal when and from again, transaction IMR the is GUL So

So key considerations again, half all of GUL these dividends close PICA with not IMR. the in on the PFI ratios. yet RBC from NAIC’s in be our decision will negative the of for to that’s And second year, and

feel good ahead. looking our capital overall, our the outlook very for So position flexibility about and we

just And a Ken. then Thank, Okay. follow-up.

is of the if On some impact Would looking you other XXXX. of XX% now most that on bit had here, I we of billion future up expect would able like limitation you looking that? negative that. color changes, from like rates be surplus. Can something a to potential I give keep follow-up think be IMR guess, reverse the And the $X.X potential I you had for limitations or think in to going -- Thanks. is that, losses at still of little

Yes.

of billion RBC that you XX adjusted for of surplus think exclusions. So proposal points. XX% you’re about subject that statutory right, is $X.X Tom. or a about of The some with for us, to And limitation as can that’s

interest us we and for So, sit that’s represent what sits it where now. would right where rate

Our JP Morgan. from next question is Bhullar coming from Jimmy

given Japan your just also we’ve do currencies fluctuations terms a -- your first, mix you changes question and potential in capital So the changes how in thinking of and in just how in are you interest on rates seen business regime Japan? sales and recently about new

Andy. it’s take Hey I’ll question. Jimmy, your

experienced our LC competitively our bank into is by this been distribution, growth product in Japan Our outstanding growth we’ve strong with higher product pleased U.S. sales sales. also And business. results operation, That quarter a as dollar as aided the the know, you advantaged and quite brand. channels. we great our But year-over-year with was we’ve LP, investing and been

designs is Clearly, and product our innovating off. experience on work enhancing our paying our customer

interest us we at businesses. overall rates our We that good and value higher we design As our customers. are interest say, those for look in are higher good flexibility will Japanese for delivering Prudential rates believe the interest then rate give greater as always obviously our changes, and to back product do

strong look to demand. forward, we’re a of see to business still value. about we denominated, ability between we’ll see deliver Japan and as continue may the And our grow mix shareholder and we optimistic while So, shift yen U.S. think dollar the we

the U.S. Does denominated? economics and your sort of capital the affect of dollar between change yen your in products

Hey Jimmy, it’s Rob.

So, to adoption XXXX. of a of point not ESR eventual and in referring a scheduled still as is couple ESR like for work the thoughts you’re adoption is until process First

the regime on fine-tune the is, so, to that’s ESR with mirrored industry the the JFSA continue international with work And we to and to date, side. largely the established which regime, been

us it how our business currently manage book to we As and look creatively constructed, would at our of cause sales.

our make economics or we’re be the sales be able reside. change the necessarily Japan in where would we’re hold they it statutory in to of be economics it could but distribution sure could that think don’t against into reinsured the products and that to assets sales, matching our I to those order we in selling of jurisdictions the the other regimes So, which

that in the the that we we’re continue combination other sort sort and sales either be of efficacy balance outcomes to of and/or of sort we levers capitalize of right way to which have a able and those that reserve the manage So, through us and comfortable that of sales. available we economic getting have we’ll the

PGIM. maybe lot this versus is second something just that industry-wide in overall the recently on The then flows just continue half that management well? as how of to Prudential your And into Okay. a much quarter, that’s that related negative maybe issues shifting might peers had have of asset

talk quarter. Jimmy, the Andy. and broadly about it question, flows to it’s hit just So I’ll take for your I’ll

quite capabilities. PGIM, outcome in winner flow multiyear are talked great having broadly been And strong of distribution, net a quarter, a we about, diversified we’ve to the continue manage to long That a results. see we’re and period flows we’re over strength said, going always, term. previous this As confident products our of the we’ve in outflows for and material investment our in And quarters. versus the did as reduction this

predominantly end, based retail and equity portfolios of strong were the clients On market on billion heels outflows an appreciation. $X.X the story. retail their We’ve rebalancing seen equity were

On the a previous institutional story billion were equity It’s for the income. the outflows included The material for client rebalancing. that $X side, These the Again, over as both for equity outflows Institutional retail. quarter. and same that’s improvement quarters. the is fixed

For to changes allocation clients and shift make of income, asset passive. we saw other fixed our some

current As of we’re outlook, what the consistent near far as question, behavior term, this rest is expect to investor industry. an we across with is our trend And your seeing continue. going that the to

platform, lot the positive to have we’re of that and market return gain and Over confidence going PGIM we flows share. strong a our in to longer know term, we

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

How down Thank on would about those those manager you some agreements of talk assets work? Can the does investment I you. wind of Question know transferred an these assets. -- last? how on that PGIM. long they’re risk

to take I’ll we up general talk about got in Retirement de-risking just Maybe Andy. in -- do Individual general we Strategies the as de-risking continue transactions. assets if long we recent transactions in the bring noted, I’ll the from That does hard to depending end go, management done It earnings. day, Life. -- it. those the is going under it’s specific, a of the transactions as look majority not But we’ve ability deal. IMAs John, impact PGIM risk across IMA. at some how we’ll the a it did a it that deal to on lose it’s and And And we deal But account. true, recently, Individual really give So is to have assets. you level, manage us an of material they particular, you’ve worked the and

Hey just those further sort reinsurance accounts. are transaction, client Rob. John, of recall that PDI a little In the separate the it’s Maybe elaboration. of individual

And agreement business there the to even period account that be PGIM to X-year something is to those able continue the to manage. that GUL initial And performance, IMA. have over of regard -- so is we continue longer manage time. the to separate we expect business, with would obviously, a actually that there a With will good

question, my to industry-wide or with there want And geographies lead scale products follow-up asset are in? opportunities? sticking then to get management greater And inorganic business, do headwinds you’d

that. John, Andy I’ll again. it’s take

when I We’ve a and I’ll -- strong talk So start decades about over couple to start always PGIM of organically. demonstrated grow this. a ability where we

the it don’t at plans look to certainly, -- need with M&A. interested in we That do organic being programmatic we we the M&A, we growth programmatic augmenting as remain said, grow. So,

that to Custom good If Partners, are the you what growth. PGIM now areas really and into look recently, done we higher Deerpath, of those higher going Montana we lean are at examples said we’ve fee, Capital Harvest

private Clearly, to globalize into forward, the and lead to we like going and disruptive continue to As real look alternatives assets. to opportunities. any can areas we’re lean environment business work

always, we our So, disciplined sure know in as be approach. of going on stay the we we flow very the remain the in that make and patient in what’s industry. will and in But

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

what that I was architecture platform press specifics discuss do June referenced to you’re really there? looking new give was hoping in and you on the some release open could more the

that. take it’s Ryan, Rob. I’ll

quite growth, talked interesting you of opportunities implies see to And management about we’ve industry. really avenues the insurance what excited our in that As we intersection businesses. and that past, in both see the in the of we’re about and our insurance asset create our evolving ability exist asset for in management

that about And execute being institutionalize we’re So, opportunity. balance organizing way optimization in as ourselves how so we our to sheet capability. that against a thoughtful ongoing includes

as So, new blocks solutions and existing think of use third-party we’re about captives, at additional business reinsurance and then sales actively reinsurance, to continue balance reinsurance that side on to evaluate for at of the or to blocks, solutions. affiliates liability the also looking flow looking

side, asset our assets on greater it’s that the available about lens the for can On investments expanding generate or outlook us.

source investments to Deerpath. those directly component did capabilities important nimble. our with our higher growth, of as around partnership This we by things more expanding also becoming broader is including acquiring others, is either or less We’re with valuation capabilities which like in enhancing market-sensitive an and strategy,

as Just your third-party there. sidecar-like some potential bring to in more should the to a of in of think future? including a one this in back mean, follow-up new we capital I business structured also

think I of at opportunities would exist there. that looking range full the we’re

third exist And that so from captive solutions in between hybrid that. and to would going party

Wells coming question is next Instructions] Our from Fargo. Wes from Carmichael [Operator

follow-up liquidity. a had Tom’s the just on I Holdco on question

$X.X in from of this debt. buybacks, think roughly callable I first of dividends, quarter, was quarter at But capital the think of $X.X billion, around uses kind up billion quarter, was in add the I ended $X.X billion. if there So I that the all

billion I of the think $X.X there in uses were period. around

that because So where from. were affiliated that and I’m you I trying that use figure to just trying capital. sizable to a said like curious, know planned, it’s pretty of dividends I’m any accelerated? they there just I’m but was just borrowings? came square other were out

it’s Wes, all planned. it Ken. was Hey Yes. No,

any were So, debt the didn’t and we all received issue we planned, the in either. distributions quarter

some called was debt, planned. which you fact, recognize, In we again as all

anything. -- and didn’t we forward pull So

for the year. our was were plans it of all So, part what

So, hope helps. I that

any just that how thoughts maybe PRT retirement balancing that And versus your longevity business to maybe and the around you two in business? about of think the with those capital kind deploying pipeline? just like institutional And

Caroline, take Hi and your I’ll Wes. It’s question. Yes.

first $X.X we’re $XXX business, of we Retirement billion total entire Strategies of sales a values billion record say, the with reinsurance in our highlighted institutional across strong account billion. included Institutional I’d just Retirement business, This quarter saw with by So all, pleased very $X.X overall, in strong results our in over and international transactions. Strategies

terms transact. Wes, retirees opportunity continue what of high to overall, just In for intent the to about the funding And to remiss see to strong strong I yesterday both with PSV not pension and their X,XXX announced U.S. we would Gs were benefits also be in mention of was positions, we pipeline the beneficiaries. XXX%, global risk that and and secure markets and transfer above both selected

year’s first so record while And surpass half strong we expect pipeline. last PRT. second don’t the to of a far, seen to half, year record see we’ve And in we expect a

pipeline transactions in And see finally, our both strong and strength, an also ability say in that our manage our that UK XXX%. are markets. with complex expertise I’d positioned financial large remain to a leader extremely positions we along the with well Wes, were We funded to given

from coming is today Suneet question Kamath next Jefferies. from Your

transfer a to wanted back risk second. just go deals the I to for

kind this goal here of of as still talked And SGUL victory you, comments of an late. on more achieving I are think, activity in your you you your and the done declaring areas obviously, of for growth-oriented think moving Should ongoing your strategy? you’ve side. that about sort transaction the or we on some to VA about Charlie, of

say, yes, to So, of I both would those.

So, go let through me Suneet. yes and,

additional we for reinsuring the life But, guaranteed received last that accretive receive sort business. each consider then reduce we $XX.X sub $XXX to VA we opportunity as transaction and the block be So The said, Absolutely. earnings of would and GUL will first, I’ll week. through go flexibility. And But for also and expect we of with we very transaction increase of market closes. de-risking are universal our pleased the proceeds to sensitivity the when million first, our valuation one Life an we capital billion announced block? will approximately policies

and stakeholders. met As strategic the to our financial long as all objectives it made sense

to our to individual to core going in we’re be purpose. However, business our life as be disciplined approach continues the

potential pivot from a for reflects think to growth with our $XX business I helps life less our enterprise remains gap. market-sensitive an still perspective, product Life second quarter industry Life in the mortality, to And our our strong trillion There’s the And significant longevity important so products. it in sales our balance Individual insurance us. with

On little but story, VA side, similarities. some a the bit of are there a it’s different

of this our the So annuities. and the through business, considerable two result sensitivity $XX reducing runoff capital as valuations, last blowing But quarter in a again, done, with said, market we’ve for variable traditional progress of the that we’re of made block these pleased of of $XX flexibility and annuities variable established as two transactions, have increasing the in the the the we’ve transactions achieved year. and received original sold billion we billion reinsuring proportion second the well we as we we’ve as the that block valuation ago for years we the objective natural traditional

So, to of not a having another do in we’re position transaction.

clear all But only of if Having said we’ll best to the that, explore that be stakeholders. it’s interest obvious, about only but in want again, state I do we’ll our continue But aren’t transactions de-risking. to additional it, very I’ll to these the opportunities. state something

you also As growth. they’re about said,

our successful on quarters. equally we’ve strategy, products with you’ve focused of been market-sensitive past businesses, our part de-risking we’ve while also our quite been in few growing less So, seen efforts as which in over the

made of for because strategy? over some minute want of our a it Caroline, let the to talk Caroline about would So, -- that to turn with me part progress you we’ve

Yes. Sure, Charlie. businesses. these about growing be talk happy how we’re both I’d to

$XX all, insurance a the So as trillion gap. of business, in have said, we first Life you

forward, So successful you when a been underinsured. Charlie, businesses in our growth who that we mentioned, profile. a pivoting think particularly more very to about million have XX path Americans favorable strong products we’ve currently the you have risk as are And

the less the we they’re that, guarantees, strong capital billion intensive, reinforcing and growth we $XX over quarter also embedded we our over we in now retirement more strongest roughly attractive strong the on earnings. XXXX and where also significant over X to and which of suite and prior new sales were roughly in saw quarter And we’re our at than XX% the leadership as year. annuity variable the sales saw sales, of a returns. by annuities of our over deliver that’s less business cumulative have and sales since one-third as writing anchored a continue fixed we fourth solutions increase strategy FlexGuard had the strong sales year, year. the new index prior Our prior solutions, position then individual have in side, a part quarter our top quarter, player in up increase XX% And And our in of and fact,

I’d meaningful us growth that and to de-risking less opportunity see both nimble put going in strong along we So, sensitivity be a for businesses our a market say have our with with product in pivots, transactions forward. position more

up. makes That just then want Got sense. I And it. to follow

size to segment. around I you that level remarks, Ken, think, you we about talked your impacting in should expect and investment Thanks. long if think, was in increased an incremental corporate end I maybe of just prepared thoughts then commentary, be towards line. this the wondering could your of investment, how the I some for that

the a rate million increased about mentioned efficiency. placeholder capabilities invest growth programs the and to terms gain opportunities our $XX of It’s a was of -- I including we on about there and to that increase level we’ve We’ve executed Sure. The there. quarter. in we found in there have our past opportunities and run in investment put what -- our of new have building in

our so we And plans that’s -- that’s of in increase think appropriate that. given now, planned pace the

business the in are I efficiencies then that expense expenses, that why capabilities just level opportunities and that maintained expenses occurring mention the in we’ve company-wide, we’ve of level capacity a giving want way us And often we’ve overall, efficiencies, there they’re in then benefits level gained an standpoint, from we and these of is to to the reflected while invest you but flat look of the and corporate, capacity. growth our basically increased the segments. see at that’s

gained level so flat And and a capabilities, efficiencies level of overall, improved of improve seen margins. expenses, we’ve

it. Got

our to So in you’re forecast you’re $XX efficiencies going more going this, forward, not this it’s to signaling need have it’s but by going that things? other reflect million to -- and offset we corporate be

Well, spend yes. about think should you that level think you being corporate, in about an But ongoing of corporate. as if

it. Got

the Just offset at segments?

Yes.

Bass is coming Erik from Research. question next Autonomous Your from

how currently an from Can bottom they’re your perspective? businesses you and a growing earnings on markets to emerging line what provide and update they’re contributing

So Erik, question. Andy. the I’ll take it’s

of Let me just kind reminding of everyone by start the strategy.

and And on which quite Our focus obviously, is portfolio, contributing overall markets is see profile. with emerging pleased positively to EM the of our shifting growth. earnings business growing higher we’re as and could of be you to mix part performance our our steadily

highlight couple of would I areas. a

with strong success year-over-year with double-digit had very pleased our and Planner, quarter. sales optimistic Brazil every about Group, Life growth posted channel prospects. and another across Third-party record we basically our We’re Brazil and results in quite

growth the Second, has our Habitat since steady in XXXX. I contributed acquisition joint highlight would venture

two end of is $XX As number makes and in under second number one of assets quarter, the Habitat America. the Latin Chile us total million. overall That in management

given mass Third, is Asia this has partnership to we’re really us mentioned in America, access of Africa. growth Libre we’re for which top market financial sort is was there. Latin the largest with of to call Pago, Latin exciting we then and and And e-commerce Mercado at the and invest subsidiary have the nice this emerging finally, and really Mercado Charlie the continuing in Mercado of system Libre. America seeing in

being is right quite break this forward, particular with Latin believe our right necessarily portfolio that’s meaningful, in how really growing. at the are we but rates, and the out continue. and growth a becoming we’re spot specific don’t emphasis look will we on as that do time, So, And America we the Brazil growth

think the about PGIM, other the just And the these year? outlook talk revenues and you for could of second drivers normalize. assumes that outlook related the half your I the of on then baseline I was hoping

that is modeling or assumption? So, expectation an a just

predicted, below quarter, in ORR million, outlook. came $XX second our thanks, talk Andy then will I playing The in expectation. seen fees. the we’ve and the line it’s through the lower In slowdown and we bottom talk lower lower So agency average transactions fees estate and market as there is the million which about $XX real quarter, incentive at real Erik, about the earnings, was is estate I’ll about again.

estate the As in experiences rebound the remain term a would the real transaction on see really volumes. market near expect pressure far as looking ORR we forward, until to line

Our coming Barclays. from Benguigui next Tracy from is question

I your you expecting IMR are Let’s the ULSG many that deal? improvements. about [ph] RBC talk from and relief. appreciate RBC deal you How VA points quantify

the RBC VA Yes. Hey -- Ken. the is The about and points. about XX XXX RBC it’s X points Tracy, GUL it’s XXX from deal, is deal the

So, expressed in that’s RBC. the quantum

Okay. light. transactions aside, little capital just the look the the size at by counterparty Awesome. of like reinsurer, feels base do let’s thinking capital I’m a about Somerset put credit ratings and Re When you these bit risk, the

say What a trust. put I if you think And mechanisms risk? with did in share reduce deal? You place you but there at also like assumptions was do recapture there’s don’t any could over collateralization, to that Somerset comfort

Sure, things there. Tracy. Ken. A number of It’s

standards that we if them. cover I select reinsurance sure But reinsurers. utilize we me we a expect, let So, them applied group back to across certainly our spread make come high-quality reinsurance transactions. reinsurance them, that carefully. these very our miss would you counterparties as of overall, for third-party and to And have We I

But the of want to. business, the the have lot in business long be While committed have doing team that, do of I experience some that term. we’ll have the the we beyond highlight of But into business. management to administration they’re and reinsurers to are also these of which experience, contractual you entering they industry the alluded provisions, a

So, they with over-collateralized and we procedures have again, one the business be protections. account, the complete in will segregated reserves other for assurances similar a trust the structure, control instance will comfort and to And provide the be And but for over that. the in timely settlement.

want that investment the are highlight We to accounts. also in that -- held portfolios for guidelines trusts have for investment these or the I investments

is So well risk us. together, positioned put when we counterparty for we all think the overall, that

covered questions helps. there, I think your that hopefully, I but

just If the that rates was there if in, assumptions, any deal? slip or at does. could like lapse I looking definitely mortality Somerset It like

operate. have Obviously, with they make are regulatory their subject the Yes. assumptions. the of the to Somerset. side they they are standards to in other own assumptions. their jurisdictions They people which have there experience, Again, those also, their on a own obviously of be going they But but lot

regulatory So, think attention and we our this of side lot both got good in on their a side. that’s also And standing.

Next from Mike question Citi. Ward coming is from

appreciate think all a really the more curious, as I’m should deals of I like saying whatnot? or and internal you about sort about you’re to divestiture considering are for value? organization split guys think the de-risking just we this material it unlock block simplification. the Or within or reinsurance restructure open commentary more as more around should significant potentially and we

Charlie. Hi. Mike, this is

I strategy and and take I really of less clearly step Caroline market-sensitive back about other in think a we’re bucket. company, the and about talked think becoming first more you as to growth, this it’s about falls second trying In we and the higher nimble think if former. a what if do, words,

transactions are higher-growth the time, sense they same de-risking would if to and to So and pivot have a using de-risked stakeholders, as at made company. way de-risking consider further that but we to a becoming

they Results been hasn’t were Maybe Insurance, gotten peers. Group much helpful. pretty very it for on airtime. favorable have That’s as

annual there’s if sort updated curious Group any power for of now? go-forward earnings of kind Just

Yes.

So I’ll question. take Mike, and it’s your Caroline,

start strategy segment I’ll record of focus And execution benefit indeed of mentioned certainly, and and Charlie XX%. was of great saying quarter by reflects our Insurance. our continued a an profitability. as diversification overall it for saw and earnings ratio upfront, we on So Group That the product

business our double-digit now grew a our compared strategy to lives period disability block. core component Total focused great our year-to-date health strategy comprising under last on of a our market. growth. got that with diversification XX% supplemental We’ve segment also growing is X,XXX new And and diversification quarter momentum same about saw product the business, year a premiums of the segment strong in

quarter pricing also be reported achieving to pleased the growth from current favorable actions diversification profitability impact working and the management. trailing driven mortality That last disability primarily discipline. our The also And employment ever also incidents as rate positive population, and lower lower on renewals. see benefits experience reflects and We’re results in and from without that continued sacrificing age continued on numbers best The quarter. to saw only claim was our driven strong focus incidents, disability ratio strong by well. we was effective second

to for disciplined in Group you’ll So, position business. are grow this, forward. strategy manner. earnings believe great moving our forward, of and already increased continue that our we a we’ve confident Because profitable going we’re to in Mike, on our We continuing note executing in core a expectations while

is this this can of in we’re specifically of what’s time, making, we’re you investments We tangible Charlie. investments -- Hey beginning see. making infrastructure is, Mike, one to this outcome And is processes, other a It’s about a thing. lot tangible the pleasing a and this Group see tangible some we’re about but other talk -- things. outcomes in technology, the there are

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

joining again today. Thank right. us for you All

We are meet growth making sustainable deliver needs to and evolving of progress, to transforming long-term Prudential customers. our the

reinforcing We mix are to access confident Thank enable leader to a become have business you and a investing, will that retirement our in Prudential and again, mutually day. strategy great security. insurance and expanding

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

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