Prudential Financial (PRU) 1 May 242024 Q1 Earnings call transcript

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.

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

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

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

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

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

turn it over Charlie. And now I'll to

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

the quarter sales in across in Insurance asset strong and results positive all manager PGIM, U.S. our Our and flows significant including reflect businesses. our International net for businesses, global our momentum accelerating

During the our market-leading mix growth, shifting to progress quarter, substantial our higher and growing more we become a efficient nimble in businesses capital and company. business made

our also We additional maintained further our by to making capital investments capital in shareholders. management disciplined approach to returning businesses and

stakeholders. and business mix long-term position our us for strategy sheet, distinct balance rock-solid Our deliver growth to

fees. in our benefits business relationships global now power notably begin client third-party our and and businesses. grow how our robust X. the management performance. morning PGIM Turning demonstrate market-leading fixed-income flows reinforcing These we recent in business, investment strategic affiliated I'll continued to underpinned our flows large that net to asset quarter, and mutually a reinforce of growing our Slide the this with the system few are examples by achieved of strong

X large values, record in transactions pension Retirement the of the strong risk sales quarter. including business benefits reported Our and transfer Strategies account Institutional

our the As Strategies more expansion continued first recorded demand we reflects well best as strong record market. its Meanwhile, Retirement Individual offerings delivered sales. in PRT the a business product result, quarter decade. as a diversification and in than a our of This quarter of sales

since our Strong insurance product to which shift disability increased strategy in to group individual had capital-efficient insurance XXXX. growth segment business our and quarter through sales diversification continues FlexGuard life our products across in and health. elected newer Life, sales Meanwhile, its launching towards like leading offerings broaden supplemental solutions and more life, highest

to and channels, product to sales in record from to continue broadening customers quarter. emerging momentum across our most in distribution reported Planner benefit in notably all Prudential channel, we distribution portfolio which strong Life Japan Brazil the our Internationally, actions in expand from markets. for saw new our our

milestones We further increase away market reinsurance while portion capital-intensive successfully pivot a block We our reduce achieved continuing life to of capital closed a sensitivity from transaction guaranteed universal these more our to efficiency. businesses. and and strategy advancing lower-growth for

with aligned we an agreement Prudential opportunity markets focusing scale. sell We of move strategy achieve a fewer our where emerging high-growth also to announced to an of Argentina, on have

businesses exit And can and business initiated we focus Assurance process and finally, our on that our the so resources we efforts core to capabilities.

to customers reinvested continue and sales, generate to to model ways improving experiences. also exceptional This work we that our focus the company. on outside service growth strategic operating recognized efficiencies We supporting continues strengthen partnerships deliver to the and and technology claims and through be our ongoing fuel be can

a year As survey Power row. J.D. insurance for #X just example, life one ninth satisfaction ranked the of Prudential for Japan a in in recently customer service

the customers. We for to provide we recognized proud value are to our be

Slide to now X. Turning

long-term support us the quarterly to enables businesses increased our million the to disciplined capital and shareholders. dividend first shareholders to quarter, consecutive increase. dividend to deployment Our X%, $XXX returned return capital to we in market-leading over growth by approach and invest In XXth our annual

continue will all focus that profitable benefit will creating growth sustainable, stakeholders. to We on

Slide to X. Moving

strategy robust framework. risk and by is supported capital rock-solid Prudential's balance growth Our sheet management and

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

leader strategy to for the security entered expanding and confidence with world. investing quarter around We've global in to access be second our retirement people in a insurance the

on over details our to provide first Rob with to performance. I'll it business And quarter more turn that,

of Thanks, X an I'll Slide first with the Charlie. U.S. business XXXX. for results our our and of PGIM for provide performance quarter I businesses and on financial begin overview will our results financial international

pretax net in our robust fee or adjusted sales market-leading These year-ago the income Strong the resulted benefit and quarter. operating up businesses. spread grow and strategy was have of Our rates $X.X the per after-tax and income, $X.XX on execution inflows continued an higher markets income higher our of interest billion from XX% to share results. basis, and reflect equity results underwriting

offset diversified the expenses business of to partially costs earnings and growth of by Universal reinsurance sources closing Life support higher transaction. Guaranteed onetime These were

PGIM, positive our market from manager the contributions net from driven fees appreciation, the Turning investment Capital higher to third-party to the management global and inflows compared had quarter. operating our businesses asset Deerpath equity by results year-ago acquisition.

and in partially growth. fees revenues. and offset income increase expenses in incentive support business other to seed This an higher Additionally, was related co-investment higher by resulted

pivot in reflected favorable by closing offset the more and Guaranteed and with by fee charges reinsurance higher our businesses higher as legacy income This investment our variable less Life expenses, business continue growth intentionally as to U.S. spread transaction well as market-sensitive results. benefit was of of rates annuity Universal including the partially underwriting income higher onetime products. the driven the variable associated by lower Earnings we traditional income growth interest and

favorable variable interest spread benefit including by higher due investment to and underwriting higher earnings in was driven was less the favorable income This primarily reflecting Chile. venture results, by higher the joint favorable in behavior. our primarily income, policyholder of growth encaje partially performance Earnings more and International businesses offset rates

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

Robust also in $XX.X the third-party the $X.X included And assets large a inflows billion. building PGIM's of by quarter fixed net from trillion year-ago $XX reflecting appreciation fixed-income net by driven in third-party Institutional positive, management inflows totaled retail flows. under income. turned to market momentum X% quarter, mandate. public and flows increased billion client positive

capabilities, businesses our create and sources and strong through customers. businesses as Additionally, the the access and investment are quarter the of affiliated success and during were of the our engine PGIM's flows other our solutions expertise driven more retirement reinsurer advantage enhanced of management asset to recently and helping value strategy and investment and U.S. of Prudential, by mutually our private competitive PGIM Prismic, reinforcing. growth bring sales for retirement institutional origination launched capital, insurance International including

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

under of credit PGIM organic $XXX and strong experienced diversified has activity our addition, private first alternatives platform, driven which management approximately growth billion acquiring assets the quarter benefit Capital. by In from private our full Deerpath

X. Slide to Turning

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

market-leading growing experiences new transforming capabilities with capabilities on and our focus improve to We across continue financial our businesses addressable to our the by leveraging expanding market Prudential. solutions customer

$XX.X strong large transactions and of individual billion first included Retirement across in first the billion U.S. funded the driving market quarter lines sales strongest risk in of of generated $X strategies quarter pension its quarter the sales first X in history. of business. nearly billion, $XX Institutional transfer Retirement institutional

on the decade. quarter completed $X.X in over now have Individual sales Retirement best in a XX X largest posted transactions billion in sales, record. our We of

in tripled, pivots running we Income, to annuities. increased fixed variable reduce have sales our and off continued by and sensitivity strong market product FlexGuard XX% nearly of while year-ago resulted quarter legacy continue annuity nearly Our have from the which FlexCard sales

driven increased sales the in compared Insurance XX% health. to year, growth life, by disability prior Group and supplemental

client We of and both to are leveraging efficiency and segment product while diversification operating executing customer the experience. our increase technology strategy enhance

of Life, Life Life reinsurance the quarter, we continue the product. represented products including approximately sales execute In launched in quarter. Total from more increased the Variable recently Individual transaction. Individual year-ago the strategic XX% with Universal to for benefit XX% Life closing pivot the from products FlexGuard capital-efficient sales the guaranteed to Life of our

to Slide X. Turning

aimed as targeted insurance companies, life model Japanese businesses presence at expanding a International in our multichannel well we include businesses distribution markets. as emerging differentiated Our our where have other high-growth

service on high-quality offerings. our focused distribution we're providing and and Japan, In expanding product

approach continue businesses opportunities our are regions needs-based we're build growing, markets, market-leading Prudential businesses product can our on and add meet a we important where offerings Our value customer needs selective portfolio protection expand to In there product emerging enterprise where provide as evolving to and of their focused to customers needs. where compelling focus to are creating in the value.

Life a variable product businesses product to Higher X% life the yen-denominated in Consultant independent and Japan recent our are quarter. offered our quarter. in benefiting compared International in sales Sales agency the year-ago the were beginning channels including through from up launches, new first

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

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

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

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

insight Slide Thank quarter provides to our you, will results. of XXXX second for begin on XX, which first-quarter I relative earnings Rob. the into

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

items: a second below the our million favorable $XX million expectations the might quarter of in in develop, results we by To experience sense expect was quarter, how get $XX for and first of second adjustments suggest we quarter. following the Underwriting seasonality

related as $XX includes reinsurance seasonality to universal expenses This We and for an of as transaction. expenses included other our the for life items. of million adjustments guaranteed premiums adjustment also onetime expenses and well typical

These I note $X.XX the that to specific adjustments exclude a get share of you per earnings quarter, would second baseline items per share the if second for combined us to will as be $X.XX. our lower-growth in power we earnings to momentum The key businesses. takeaway capital-intensive invest we from the businesses continue is drive and growth and away pivot quarter. market-leading that of underlying

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

XX. Slide to Turning

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

Our are ratios regulatory AA of our in capital excess objectives.

cash in in We billion we capital billion Our and liquid target $X.X sheet our assets to of remain within liquidity have were our our billion, capital deployment, substantial thoughtful investing and range and $X resources. $X for returning shareholders. businesses long-term growth to off-balance

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

maintaining are and We by deployment our sheet. approach supported a rock-solid to is growth our disciplined capital balance

And will questions. to be your with take happy that, we

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

My in first Can on XXXX? for more talk in-force and do this on to outlook you reinsuring question was blocks in-force you blocks, about Prismic. expect Prismic additional the activity

Ryan, it's question. your take Rob. I'll

we active go and and includes work our $XX that global can on well investors businesses our includes we to provide that completed institutional initial group we It very optimization. continuing pipeline management insurers. last We're our believe that working are and that shared who on transaction new operate large before, flow an sheet solutions year. investors are of That asset we billion a third-party balance the beyond sales where ongoing and have we've blocks across capabilities other scale pipeline. As aspirations Prismic reinsurance or

of To the situation to transactions They're complex. these maybe takes are regulatory obvious, and coordination state and they require each that bespoke all time.

is of opportunity statutory to own with looking Our the unique or balance also lens to by parties use it's other decision commercial And to this through for to partner our driven sheet Prismic GAAP reinsure each pipeline and economic the to considerations, outcomes has or of contrasted use opportunities. a considerations. third priorities,

insurance earnings interesting we're space, opportunities what see it. intersection It and capital ROE, If to client And of step customer management asset insurance. could and insurance intersection and coming the institutional finance Private to customer and extraordinarily is of address the implications meet growth that sort the of needs helps sector. the retirement -- broadly, liquidity. I needs. into to and and back more growth calling We capital at includes

asset options they're enhancing excited generating to providing capabilities as portfolio highly platform. competitive against portfolio our investment of diversification the we scale, our implies across avenues expansion And while our an grow the about and create addition, Prismic our businesses growth output greater brand, that across insurance, well. that are us a to expanding, quality and in available believe the this management And are from retirement and that industry for platform ability and and opportunity to to of execute is gives investment the businesses. what opportunities our We're important

And then I separately on had Great. G&A on question -- a expenses.

consolidated relatively were keep around expense flat the in talked basis. I up a actions think And had previously, G&A year-over-year about they near you taking could X% on that term.

that. on So an I hoping was for update

will Yanela. Ryan, I And this take question. your is

keep an our includes support growth, quarter G&A onetime expenses but as in transaction. cost-related as see increase businesses. of as sales the our support including are mind sales expenses this nondeferrable that to noted, We did to committed in in while investing expenses quarter, to we GUL And strong in this G&A the very well like expenses you keeping flat

all strong the incremental With So quarter. of PRT period X not regards in And to the of the from those the please seeing reflected that sales supporting final we fact the that's what retirement the sales, into as over the that sales earnings in strategies, sales time. those you're reasons, note especially as in terms timing increase. well leg of asset the are there's portfolio a fully

you the minute retirement benefit emerge earnings fundamentals. to that full if on to I And quarters. result, incremental as So Caroline, subsequent know in we wanted expect spend don't a a strategies,

sure. Yes,

Yanela earnings Ryan, Of course, of Yanela, through drivers. the thanks. And clearly, just went some

with now So how me about we're thinking fundamentals you story. share the growth in let our

quarter. business. very billion So Strategies the growth pleased with with in our sales over sales strong $XX Retirement overall, past we're across this

first in transfer, the we also best our success our billion volume only And nearly a our first but demonstrating led quarter had side, savings from billion achieved leadership quarter before. $X.X diversify further nearly best the on market we our $XX sales quarter, risk Institutional, the not in decade $X history, billion best In in by to quarter. of pension from our comes Ryan, more which market. distribution individual over in work few sales annuity almost us consumer broaden needs meet for over with our year-ago and in ever doubling income allows of past years that and to the the our protected And than portfolio the for then

continue as And will as to strong Yanela over these of these core the increase mentioned, realize earnings we impact sales. sales time full

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

kind a income? amount might that's just that And question was clarify And that a can $XX I on fee I PGIM from sort got fixed single Was on any inflow public what kind you what billion jumbo $XX think, have First been had of of what rate you that right, that? this think was in? would is mandate sense the have quarter? of you if And what client that billion. or the please was? then for not

Tom, it's Andy.

portion a fixed-income $XX mandate key was mandate that saw flows. fee for is don't billion That this this pension high-quality rate positive the we on portfolio. we significant in a large individual a a institutional net said, client mandates. So from disclose Obviously, of

overall pleased asset clients across trust our we're average this with that than so lower place in our is rate proud and large that fee us. overall We obviously classes. quarter, many have were their the we very very So fee flows rate our

just might this mandates any year? sizable think you the as get other look? follow-up, a does how pipeline Andy, large funded And -- Any

Yes.

up outcome. just end it bring and the I'll me with So maybe, Tom, let

the that every that I'd quarter, year. that very partner overall, roster we're to And institutional new side, on in So adding leading pleased large every a our mandate, given we feel institutional side as obviously also the reinforces been our consistently we've position marketplace. clients on add the

said sentiment. we On trends retail the billion. the at importance reiterate affiliated pension strength synergies the fixed-income beginning business of would what $X.X this the see to I We're the early we space, risk side, well top in improving of industry by significant the as and in flows consistent had that flows client Rob saw about showing system. the and momentum quarter driven script of positive with positive retail transfer,

remain strong. and As your we far time, and key to confident very can as our is that net the longer grower. very, will the forward, like will over winner also But environment we're sidelines sticky as But specific we inflationary net question, flows while environment little client clearly are outlook performance the that on improving, keep punchline the our episodic. know and money very a looking is large be that a that we a fundamentals seeing a is, the investment

if you Rob, to in Ryan first raise what in I thoughts looking just about much Have asked potential you haven't, next for any beyond fundraising? if And the about Great. billion $X any Prismic? additional be more Prismic. could how on fundraising done a one to would guys slip a you follow-up

Yes, a in capital Tom, indicated to that them to we've the work amount outlined have investors we desire our and and with them. their to of conversations that strategy the put significant Prismic have

millions And or are so are hundreds firms deal these that the on not expectations of that billions, the millions.

with investors made, of develop that pipeline. multiples be for as contributed it It this strategy scale will fund small they've have and uneconomic desire a That frankly, that not been committed that And is what in by investments would this they've upfront. said, that having we investment anticipation collaborative it working execute would standards is, to against their if that by to the were indicated their be us they've not followed be and they their is initial going fund. is which and to of was a

Joel Next coming from Hurwitz is question Dowling Partners. today from &

retirement go So back I individual the to want sales. to

sizable very And product fixed quarter, including in just line? plan guess, Can talk a growth in about to what's your you fixed strong this So I annuities? annuity the pivot sales. to grow

Yes.

course, It's Joel. take Of Caroline, question. I'll your and

market So given and rises of key year of first in last did see rapid with fixed billion of of we the strong, were all, annuities about interest rates. the sales, another record fixed year a as We're the that that piece had the a proposition individual annuities $XXX for seeing on track industry first remains value putting in record sales continued year. quarter, for this momentum $XXX year annuities industry billion driving the over

In needs a growth, terms to testament expansion the sales us of more own half meet more fixed year, annuities, over successful broader first, -- of across solutions the market growth Joel, fixed of almost customer of include Westgard, product X sales seen our excuse represented our our MIGA shift last a quarter our is years portfolio we've to past few our our broader such allowing annuity mirroring things: me, as channels. set past to

strength, quickly brand our us demand. meet and enables which scale our market distribution to increasing Second, to

market and to pricing which channels our finally, which dynamic across on also partnerships past us quickly We expand maximizing changing process, platforms our continue our significant business pricing multiple value. quarter. proactive react competitive had to maintain And shareholder to a allows while to and conditions, impact this

while overall, maintaining favorable increased we're Joe, to with the returns. ability demand meet So pleased our

and our to to products as these suite our can business they role FlexGuard bring complement solutions. the diversification, of a strong the mix like We play

Okay.

So like it filing then? product of core be your this sounds forward line a will in

broaden core it as Joe. we see as portfolio. Yes, we a Absolutely, our product

moving just then pension to risk over transfer. And Okay.

I your out? update a year-on-year we year, this should and Just on desire business to outlook think strong your Obviously, grow about the to guess, very how any start

Yes.

here. you finished a billion. So start first $X actually in we and X We transactions as with so, totaling the Verizon Joel, very rightly had the market, strongest leading including and nearly quarter Shell ever said, strong PRT,

volume on supported by see to was we of year positions roughly of billion, $XX In continue and terms this expect over year's favorable last outlook market that our pipeline healthy funding growth, XXX%.

And few carriers our I market position ability And continue with competitive, expertise exceeding should to out leader executed strength, be transactions complex highly handle along space. and a have is transactions to us the call very to actually $X although our the that large in billion. financial our

appetite capital billion Okay. I do we this you doing how from business? in QX. should after growth $X about just the overall for growing year balance guess, Just strain how think your that

Yes.

are capital. obviously, I'd deploying each way We So transaction appropriate we a effective of Joel, deals general, like say, naturally its share large in the capital. we're consumes believe generating. that returns and very these of

First, products market single that growth. source represents mentioned, organic insurance I originate those we as liabilities as of opportunities. of a pipeline allow It of great to see, one in PRT a can And the a remains in the us for transaction. to a few strong billions large-sized space, continue leader

our continue also our the that assets. we high-quality I'll add of originate match to a these deals PRT business portfolio of benefits success insurance PGIM with liabilities as PGIM can

space that deploy as all as continue said, in with returns capital good Prudential. we and to do to So brings benefits the PRT the well the being to we about expect Joel, feel opportunistically

question Your coming from from today Wes Carmichael Autonomous. next is

transactions. you update over environment answer on in if in of potential if Bermuda require past Rob, on transactions an just us structure or improving the the regulatory is the that's CMA is all, year wondering one if changed, coordination influencing on more here. regulatory give at and involved of the considerations you can the your mentioned the I'm how Prismic, deals

industry. so. directly to went to the process proposed enhancements with as been Yes, their do provided through in happy Wes, actually highly that and regime the recently the with BMA on engaged feedback with broader throughout as We've the consultation well BMA coordination it the

characterize continuing maintain consultation by conservative required type. to what vary level prior are committed economically BMA capital result significantly a reserving regime. they to than the product their to to updates regulatory is going had the regime of that in more while I generally to think driven BMA's what to And I That's is would principles-based process. and a going

along the it in its that liabilities that to and approach is assets Europe continue for a And with U.S. do to insurers. jurisdiction reciprocal managing in attractive combination insurance we with business make very equivalency and to the status to believe jurisdiction of going

And you is there? liability do quick But for that follow-up Does a think a just on good sense maybe PRT Prismic? that. make

the and done Bermuda New statutory be statutory consideration within our set that regime within coordination a Jersey under transfer both the regime. liabilities can advanced, economically, type U.S. We've are supervisor. principles pension adopted PRT for in with risk of

And desire is so our coming to use per and or ability Bermuda by regime source versus se of driven the U.S. the driven less the into in more regimes by investors statutory differences it.

So our we regime extent to well to own capital number that of third-party obviously, us. works U.S. for sheet, for a for balance the has bring But within desire capital the reasons. into a operating want statutory

through contrasted into Those our more institutions framework of jurisdictions to would funding Bermuda framework. PRT a would why be Barbuda, some like as to providing that primary we and come driver capital to be that of the as U.S.

maybe then the more That's regulatory the ESR can getting an just transition we're on And to closer one really in Japan, date here. give helpful. on us you to implementation just update the front. But

So anything or else? how products FX long-duration color has might are helpful. be any on particularly other been treated movement, Any there

This Yanela. is

capital believe are our On and any me strong, standard. evident be update Let on businesses give ESR, ESR. reasonable well financially capitalized an we under with and we Japan that are where you would

with for economics new strategies adapt have match regime responsible potential we advocating and reasonable business. to standards. to And and We working the the have and our to been of regulators better

whole Bermuda Japan basis. to billion these us from include the strategies externally. first reinsurance internally which more Bermuda our these as a in the dollar-denominated U.S. for reinsured strategies, or that of during allows on quarter, reassuring And capital example we And or block products manage of $X Gibraltar, business economic U.S. life affiliate, an to

we're change. very regulations this but being finalized X, So The expected quarter of proposed carefully. XXXX. effective April on subject are are this at later to looking to ahead be still

is Elyse Our coming Instructions] question from Fargo. Greenspan today Wells [Operator from next

update pipeline exit My And the M&A to at? and that us how that first IQ, question, right? M&A I looking the is to guess, on you decisions? just the action going an given you're Can side, give things is on impact future Assurance

is time as have distribution, Sure, of acquisitions expanding for our question. Elyse. transactions This key talent. grown our transactions capabilities, pursued scale such executed company. significantly these for increasing many We've we that broadening a have variety and/or on Thanks And the Charlie. reasons adding over the or

In every M&A approach, acquisition, your well that anticipated our these there have we different we've into lessons things gone purchased gets we have are learned. and And we as Assurance, right when as outcome certainly, lessons incorporated a to question. which

As focus look expand we businesses. established existing forward, we of will scale opportunities to businesses present more our that market-leading and in on acquisitions capabilities our

really thoughtful And how very seen Capital, we've to to we're -- creating and and continue that do with examples. X seen disciplined with value for goal about our you've that be us And Deerpath the Montana we Partners of Capital as execute going Green shareholders. Harvest

target towards lower good second you year. the for And guys range business the then the end group, the question, within results my quarter, were in that for of

side, seem how results the the over good expect year. you And want especially ratio disability to the benefits you point the in quarter? the X in anything out, business in other Just trend quarters to of that

Sure.

Of course, Elyse, I'll it's take question. and Caroline, your

further momentum to of association maintain the growing which and the with pleased in and X,XXX So for seen we're strategy our our in quarter overall, and lives executing product disability are in health. markets our while first leadership under influenced first group by sales supplemental core diversifying we've on all, very

compared nearly Our prior disability to the in capabilities were marketplace continue the year to XX% quarter. resonate where up and our premiums earned

proposition benefits. their value to That In is with our continuing outcome success, drivers including language, to our experience, terms technology. claims customer enabling process of expand of efficient more understand we're with our better enhancing by customers our simplified streamlining

capabilities, beyond in these also accepting investments, And pricing make sense. we our then economic at on maintaining remain core strong focused only highly that cases least discipline, those

year, are quarter. business new the looking in at first of ahead effective you as know, our So premiums most this

will you business. the impact So from in see enrollment majority existing on general, and quarter when the sales, new renewals is of the first

as the continue grow lives in However, X,XXX association in to under market. we

that of see business last will We consistent growth sales second into what half more saw with season we the the year with extend year.

So the board business. just overall, across we're we're very in group our you disability excited growth but Elyse. asked And in the not that about about benefits seeing, ratio, trajectory

finally group I'll our so that as And our results quarter were add -- just has strong. overall underwriting

a XX within our under ratio XX%, of XX. is benefit benefit is to our which quarter total first recorded and We've ratio recently range ever of target just best lowered

to does the disability well as tailwinds employment of continued reflect on environment. claims results, rate interest as our underwriting management strong a high with focus Specifically the regards it and effective

Our Kamath coming Jefferies. from Suneet question from next is

start think you're with forward in will going for sales, had Caroline, mentioned strong and To expecting the you you industry. persist that the Individual Retirement. I

wanted is of get money a to is coming get money maybe where existing demand XXXX from from. seeing are this to Or we coming sense that the Just Just a to coming exchanges from. wanted the that of qualified industry, sense Is market? where from new annuities?

think a thing. Yes, so great one really question. Suneet, it's Thanks it's I don't much.

going years every have clearly I think and now it's over the dynamic as between be XX XX of the Americans turning to XXXX. individuals thinking turning year over XX,XXX million XX next and single several we individuals more

that the a consecutive earlier, that why, market. of also that year we're years and And I more we seeing seen third to We're realizing retirement many protected mentioned and income more very I is record savings unfortunately, see them why that on as a to think, in X much for I and important think It's now have on track now annuities consecutive is that. work have increasingly we sales. And they priority. protected do understanding record

think I expanding we certainly, able so done and in it's as an industry And that we're of very to customer work And solutions are that broader offer. really needs we proud the terms to have our need. of strength growing very many help with of distribution positions resonate the that our portfolio to and and well our be consumers to these continues able this of brand us

Got it.

I then could. one And sense. for makes That if I guess, Okay. Rob,

than such was a you of I the statement? big And what calculated? your, it billion referencing wait number, monetize through $XX insurance means. to margins, way that know that's start there you is to flow I Rob, that think a Like in how this rather that just for if can that don't keep income

about first that, if wants answer to I'll then to anything ask in I'm stab then Suneet, a I'll say. clarify take to and at she and jump I'll Yanela

the So GAAP been accounting actually since long under in with doing have those what and updated now the that's for we adoption standards. of we've calculate LDTI, duration change share those And ability margins. the to

basis. the doesn't Think over present include life of as the individual expenses. that have a products gross profits remaining sort net on the of of value products in those of It we about that

on So think blocks. just that continuing as those of with and maintain basis to expenses a product sort might of before administer that associated be corporate

we margins over that naturally of those that, experience our is and time. businesses. become about net have margins realized of to period income use then Reinsurance a that, product reserves large manifest within will can exist as percentage over opportunities that to those think Japan we As tool generally that remaining the of life which -- the There we the accelerate that. are our do a

business we would opportunities that. gives to or I that we if some do the accelerate to businesses, to reinsure like look of add Japan of of realization either Yanela, do, and as some those the But within to of margin. regularly don't that anything out And that us U.S. into Japan know as Bermuda you

explanation, Rob, nothing a add. No, was that great to

we HoldCo it. state that year Or in a as are kind more the one of structure, movements Got cash, steady repayments? just or expecting terms issuances at Yanela. move point? I If either this capital any could we of in big at there are sneak for through On you're

first No. prefunding XXXX the a of was in That a maturity. had quarter. issuance hybrid We the

issued $X also issued did billion, we of redeem million previously $XXX we and hybrids. So

So from an issuance expected. more perspective, is nothing

Our the HLA balance did modestly increase quarter. during

As funding our as you strong after of growth, we've from issuance. flows as saw, and and net we have you talked net very about, positive cash the did businesses hybrid this proceeds noted

proceeds points. note Also RBC expense. important were due of shareholder factored year have X and transaction, PICA closing that about net to that's timing offset inflows for of is been and into they the These and are the capital to interest reinsurance GUL by plans distributions worth our in those the the

we at $X in $X from are billion. had HoldCo a well and an We perspective, to strong we within cash $X.X again, HLA expected So had perspective outflows, the objective billion inflows. of liquidity billion, our

from coming is today JPMorgan. question from Bhullar Jimmy Next

that business? reasonable a the is business. like decent First just Assurance be the down question, just assume we it Or on able consideration? that you'll IQ it Should you're shutting to assume for to sell

wind-down the begun to and question. I'll a it's your businesses. divested have we And moved take for Assurance process results Jimmy, that as say we've Yanela.

That this and focus let always the that are difficult all, acknowledge these of utmost caring earnings. not on have material is for involved. people said, will impact First winddown me decisions a our

Assurance been results. not our to has material

certainly such divested that, will the as assess We quarter monetize that to that commission costs cash assets to go value convert extent is do have have assets which incremental And to we the seek is, accrued whether over any time. in sheet, on we we as wind-down and through the beyond will all will receivables, to we this balance there businesses. the process, And wind-down there value.

I would it it of -- when in were correct? would to not accretive reporting it have And be much that money. Assurance given that is making thought losing most IQ earnings that And really money. exit stand-alone, years the slightly you was be the actually But wasn't would

moved that's Well, it had to it not was We corporate other the because material. point.

just bottom Now not to the it's and in divested, it's material line.

loans having us stable paying of have like if recently. portfolio mortgage on extend or how are on been the of [ them? down? been the of year just commercial most happened some are going number with just that to performing. seems you percentage on the Or us like they and matured it color there loans portfolio, more give the more has insight this just loans they into -- and maturing that are the to on with are of anything give what's Or metrics what's But what credit ] about had then fairly CRE And you talk loans,

specific at high me on let Jimmy, a your Okay. question start level maturity. and then end with

year-end. $XX portfolio. there about not material our XX% a from a actually, change investments. We've So It's billion has of been got

both of high of types. out geography remains local property benefit cycles. from the we at before, as PGIM's and quality. diversified, prior The had proven loans, through significantly And underlying broadly portfolio track resilient. they've markets these record It's pointed direct looking we their knowledge origination deep and It's

the It's a did management from to team average with on coverage a debt quarter, experience. a the really for entire and over debt basis the coverage not year on of -- at XX% a XX change LTVs we're portfolio-wide industry basis end service -- X.Xx almost of the service first through and loan-to-value ratios years on ratio.

pointing negative The there had lost some up, out mortgage or the $X about billion overall. it gets LTVs It's rounding office, XX% trends. might portfolio. in you just our and about Jimmy, as of of portfolio the the were that's expect,

the the -- for XX% the just our portfolio LTV sector, coverage X.Xx. while office our went ratios didn't we up same within XX%, So our to from at year-end overall but rise over at remained

So where in the are about feel we good overall portfolio.

those but you portfolio, first sure sorry, I'm question we not asked an standpoint I'm and reserves the the modestly if real From from experience. to quarter estate the -- outlook added in

year-end. up as million, at about million So from $XXX $XXX-plus of up, they're they're

modest a increase So there.

be -- industry. XX% forward, X% we're is another sort there'll across expectation As decline the looking of to that industry across across the valuation

given loan quality service be further conservative it our that declines will shared we around subsector in we've expect the coverage of value, And ratios more is decline. got that underwriting XX% while with resilient, and our to be to Office of its you. underlying a debt in LTVs to and I properties those like probably continue immune construction, portfolio that institutional won't the do be

There $XXX The had that favorably or through extensions. off. With long-term of with maturities. billion respect paid refinancings, extensions, loan were remainder maturities, payoffs during worth resolved then which subsequently under were to million of XXXX, were we short-term $X about X modifications

For the maturing. about $X.X through think per XXXX, billion as then that's And XXXX. or of billion a plus X% minus around or remainder year, of we've got year being that, it so about of XX% portfolio years $X the after

to We in with expect episodic that deal and that extensions. ongoing be we'll loan way there'll the need of modifications issues

portfolio. the resilience the But and with quality overall, quite of we are comfortable

Wilma Your Burdis next coming James. question from Raymond is from

about changes Given could life the would and the competition this level to in given year We in high expect of pricing rationalize levels somewhat annuity you Bermuda. retail sales, talk products? regulatory

maybe of So you any some us seen this? give broader evidence And have color.

Yes.

So Wilma, it's Caroline.

going that think I'll results our question. about take your for if forward, moment take I a life I'll and first. outlook So our sales and

prior in with and million that Wilma, That's are year throughout term quarter spite results we returns our We products, $XXX over variable the trend saw very we competition. increase of business driven write new sales pleased, continuing an than of XX% at to first and the healthy more the year quarter. from with our by in continue

for look and products this we a where like already momentum continue life to we are market year, include portfolio. to As does we core see leader. That positive universal our variable term

rolled accumulation is ahead life and universal variable this as out past and highest life further continuing new and be reach this we market the how I we've Life able think solutions. In we're to quarterly our addition, penetrate to And position competition with part leadership indexed of market our of staying quarter. FlexGuard customers. sales product Wilma, our new Like FlexGuard achieved

these me, the that leader with very in market. products, distribution we pricing our remain continue excuse and disability, So will confident a to and that we're discipline, life strength our be

distribution. to brand and and In able space across market, the important I and is think as competition. achieve to that But annuity shared results, terms certainly, sales of with past execution thanks we've we've strong been record our industry-leading years. of the seen is in yes, growth earlier, significant industry reiterate, our the this annuities the increasing there I each the and to X

on a a make to buy Prudential maintained and ever adviser experiences it easier automation using than to focus We've process customer distinct end-to-end our and policy. enhancement

distribution and across allows expand market distribution. enables demand this increased to to We multiple channels. also expanding and us And scale to meet partnerships have deep us quickly

PGIM. And finally, with world-class we of capabilities asset combine management all through that our

in with we very believe to a meet growth position in space. market So we're on the competition to strong rising build and demand continue the our even

more And an about market could scaling? regions broadly, you discuss on which opportunities? thinking in you give for could And you're the update given the bolt-on exit us Argentina,

So Wilma, it's Andy.

select geographies for opportunity emerging scale. to focus few market significant that high-growth offer on the us strategy our So is a

we to in. So want we're at is I be you the that countries what tell this point, would in

direct committed remain from market And portfolio. we Argentina rest of highly there part Latin as are So America for of emerging really implications to no sale our the strategy. our of the growth

growth I your think Job acquisitions. around bolt-on always second for part the us. question is was organic programmatic X of

know So always, in our But be acquisition we'll we the patient in focus we'll of flow opportunities. the that's the disciplined. as be be where always potential and and majority But will is. of

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

today. Thank again you us for Okay. joining

growing pleased to the system capital by optimizing growth. are progress market-leading We mutually we've made our reinforcing leveraging sustainable deliver in and including business businesses, our long-term

longer. and Thank in will you the and across joining expanding generations way retirement and future the better globe us, good to insurance a again continue current to security We help access investing as lives lead day. live we have for

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

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