Summary

• Prudential Financial is a global financial services leader and active global investment manager.
• It has approximately $1.4 trillion in assets under management as of June 30, 2023.
• The company operations in the United States, Asia, Europe, and Latin America.

Prudential Financial, Inc. (NYSE: PRU, LSE: 0KRX), a global financial services leader and premier active global investment manager with approximately $1.4 trillion in assets under management as of June 30, 2023, has operations in the United States, Asia, Europe, and Latin America.

Recent Developments

Prudential Financial, Inc. and Warburg Pincus announce launch of Prismic Life Re¹

September 7, 2023; Prudential Financial, Inc. and Warburg Pincus today announced the launch of Prismic Life Reinsurance, Ltd. (Prismic), a licensed Class E Bermuda-based life and annuity reinsurance company. Prudential and Warburg Pincus, together with a group of investors, have agreed to make equity investments in Prismic and will oversee its long-term strategy through participation on its board of directors.

Prudential expects to reinsure to Prismic a block of structured settlement annuity contracts with reserves of approximately $10 billion, subject to the receipt of required regulatory approvals. Prudential’s obligations to the holders of these annuities will remain unchanged following the reinsurance arrangement and Prudential will continue to administer the contracts. From there, Prudential aims for Prismic to be a strategic reinsurance partner with the ambition to grow their reinsurance relationship materially in years to come. PGIM and Warburg Pincus will provide asset management services to Prismic.

Financial Highlights

Second Quarter 2023 Results²

August 1, 2023; Prudential Financial, Inc. (NYSE: PRU) today reported second quarter results. Net income attributable to Prudential Financial, Inc. was $511 million ($1.38 per Common share) for the second quarter of 2023, compared to a net loss of $1.010 billion ($2.71 per Common share) for the second quarter of 2022. After-tax adjusted operating income was $1.087 billion ($2.94 per Common share) for the second quarter of 2023, compared to $895 million ($2.34 per Common share) for the second quarter of 2022.

PGIM

PGIM, the Company’s global investment management business, reported adjusted operating income of $179 million for the second quarter of 2023, compared to $206 million in the year-ago quarter. This decrease primarily reflects lower asset management fees, driven by net outflows and rising rates, and higher expenses, partially offset by higher other related revenues, driven by higher seed and co-investment income.

PGIM assets under management of $1.266 trillion were up 1% from the year-ago quarter, primarily resulting from equity market appreciation, partially offset by higher interest rates and net outflows. Third-party net outflows of $5.2 billion in the current quarter were driven primarily by redemptions from public equity strategies and reflect institutional outflows of $3.0 billion and retail outflows of $2.2 billion.

U.S. Businesses

U.S. Businesses reported adjusted operating income of $956 million for the second quarter of 2023, compared to $573 million in the year-ago quarter. This increase includes a favorable comparative impact from its annual assumption update and other refinements of $1.606 billion, partially offset by the absence of a one-time gain on the sale of a block of legacy variable annuities of $1.448 billion. Excluding these items, current quarter results primarily reflect higher net investment spread results and more favorable underwriting results, partially offset by lower net fee income.

Retirement Strategies, consisting of Institutional Retirement Strategies and Individual Retirement Strategies, reported adjusted operating income of $876 million for the second quarter of 2023, compared to $2.181 billion in the year-ago quarter.

International Businesses

International Businesses, consisting of Life Planner and Gibraltar Life & Other, reported adjusted operating income of $784 million for the second quarter of 2023, compared to $692 million in the year-ago quarter. This increase includes a favorable comparative impact from its annual assumption update and other refinements of $32 million. Excluding this item, current quarter results primarily reflect higher emerging market earnings.

Corporate & Other

Corporate & Other reported a loss, on an adjusted operating income basis, of $527 million for the second quarter of 2023, compared to a loss of $321 million in the year-ago quarter. This higher loss primarily reflects higher expenses, unfavorable foreign exchange rate impacts, lower net investment income, and lower income from pension and other employee benefit plans.

NET INCOME

Net Income in the current quarter included $765 million of pre-tax net realized investment losses and related charges and adjustments, including $51 million of pre-tax net impairment and credit-related losses, $3 million of pre-tax losses related to market experience updates, $16 million of pre-tax earnings from divested and run-off businesses, and $16 million of pre-tax gains related to net change in value of market risk benefits.

Net loss for the year-ago quarter included $2.438 billion of pre-tax net realized investment losses and related charges and adjustments, largely reflecting the impacts of rising interest rates, and also $104 million of pre-tax net impairment and credit-related losses, $710 million of pre-tax losses related to net change in value of market risk benefits, $515 million of pre-tax earnings from divested and run-off businesses, and $371 million of pre-tax gains related to market experience updates.

Full Year 2022 Results

Net loss attributable to Prudential Financial, Inc. was $1.438 billion ($3.93 per Common share) for 2022, compared to net income of $7.724 billion ($19.51 per Common share) for 2021. After-tax adjusted operating income was $3.592 billion ($9.46 per Common share) for 2022, compared to $5.772 billion ($14.58 per Common share) for 2021.

Net income for the year-ago quarter included a goodwill impairment charge of $837 million, net of tax, reflecting the decline in the fair value of Assurance IQ. This loss was offset by $420 million of pre-tax gains related to market experience updates, $332 million of pre-tax earnings from divested and run-off businesses, and $116 million of pre-tax net realized investment gains and related charges and adjustments, including $17 million of pre-tax net impairment and credit-related losses.

Company Overview

Prudential Financial, Inc. a global financial services leader and premier active global investment manager with approximately $1.4 trillion of assets under management as of June 30, 2023, has operations in the United States, Asia, Europe and Latin America. Through its subsidiaries and affiliates the company offer a wide array of financial products and services, including life insurance, annuities, retirement-related products and services, mutual funds and investment management. The company offer these products and services to individual and institutional customers through proprietary and third-party distribution networks.³

On December 18, 2001, The Prudential Insurance Company of America (“PICA”) converted from a mutual life insurance company owned by its policyholders to a stock life insurance company and became a wholly-owned subsidiary of Prudential Financial. The demutualization was carried out under PICA’s Plan of Reorganization, which required it to establish and operate a regulatory mechanism known as the “Closed Block”. The Closed Block includes certain in-force participating insurance and annuity products and corresponding assets that are used for the payment of benefits and policyholders’ dividends on these products, as well as certain related assets and liabilities.

The company's principal operations consist of PGIM (global investment management business), its U.S. Businesses (consisting of its Retirement Strategies, Group Insurance, Individual Life and Assurance IQ businesses), its International Businesses, the Closed Block division and its Corporate and Other operations. The Closed Block division is accounted for as a divested business that is reported separately from the Divested and Run-off Businesses that are included in Corporate and Other.

PGIM

Provides investment management services and solutions related to public fixed income, public equity, real estate debt and equity, private credit and other alternatives, and multi-asset class strategies, to institutional and retail clients globally, as well as its general account.

U.S. Businesses

U.S. Businesses—Retirement Strategies

Serves the retirement needs of both its institutional and individual customers. The company's Institutional Retirement Strategies business develops and distributes retirement investment and income products and services to retirement plan sponsors in the public, private and not-for-profit sectors, both domestically and internationally in the United Kingdom. The company's Individual Retirement Strategies business develops and distributes individual variable and fixed annuity products in the U.S., primarily to mass affluent (households with investable assets or annual income in excess of $100,000) and affluent (households with investable assets in excess of $250,000) customers with a focus on innovative product design and risk management strategies.

U.S. Businesses—Group Insurance

Develops and distributes a full range of group life, long-term and short-term group disability, and group corporate-, bank- and trust-owned life insurance in the U.S. primarily to institutional clients for use in connection with employee and membership benefits plans. Also sells accidental death and dismemberment and other supplemental health solutions and provides plan administration services in connection with its insurance coverages.

U.S. Businesses—Individual Life

Develops and distributes variable life, universal life and term life insurance products primarily to U.S. mass middle (households with investable assets in excess of $25,000 or annual income in excess of $50,000), mass affluent (households with investable assets or annual income in excess of $100,000) and affluent (households with investable assets in excess of $250,000) customers with a focus on providing life insurance solutions to protect individuals, families and businesses and to support estate and wealth transfer planning.

U.S. Businesses—Assurance IQ

Leverages data science and technology to primarily distribute third-party products (Medicare, life, health, and property and casualty products) and proprietary insurance products directly to retail shoppers through its digital and agent channels. Additionally, Assurance IQ may help customers fulfill financial wellness needs by matching them with other product providers or intermediaries.

International Businesses

Develops and distributes life insurance, retirement products and certain accident and health products with fixed benefits to mass affluent and affluent customers through its Life Planner operations in Japan, Brazil, Argentina and Mexico. The company's Gibraltar Life and Other operations also provide similar products, as well as advisory and administration services to broad middle income and mass affluent customers across Japan, and through its joint ventures in Chile, China, India and Indonesia, and its strategic investments in Ghana, Kenya and South Africa through multiple distribution channels (including banks, independent agencies and Life Consultants).

Locations

Worldwide Locations⁴

References

1. ^ https://www.investor.prudential.com/news/press-release-details/2023/Prudential-Financial-Inc.-and-Warburg-Pincus-announce-launch-of-Prismic-Life-Re/default.aspx
2. ^ https://www.investor.prudential.com/news/press-release-details/2023/Prudential-Financial-Inc.-Announces-Second-Quarter2023Results/default.aspx
3. ^ https://d18rn0p25nwr6d.cloudfront.net/CIK-0001137774/66070b80-042e-4f84-bf25-d60c5b4c3fe2.pdf
4. ^ https://www.prudential.com/links/about/worldwide-locations