4Q24 Prudential Financial, Inc. Earnings Conference Call Presentation
4Q24 EARNINGS CALL
Expanding access to investing, insurance, and retirement security
KEY MESSAGES
Becoming a higher growth, more capital efficient company
Maintaining disciplined capital deployment
Supported by our rock solid balance sheet
WE MAKE LIVES
BETTERBYSOLVING
THEFINANCIAL
CHALLENGESOFOURCHANGINGWORLD
2
BECOMING A HIGHER GROWTH, MORE CAPITAL EFFICIENT
COMPANY
SIGNIFICANT
2024 PROGRESS
POSITIONS US WELL
FOR THE FUTURE
Growing our market leading businesses
- PGIM benefitted from its diversified private alternatives platform, the growing global retirement opportunity, and the growth of our insurance and retirement businesses
- Retirement Strategies continued to address the growing retirement needs of the market as a leader in Pension Risk Transfer and Individual Annuities
Group Insurance and Individual Life diversified product offerings and expanded distribution- International launched new products in
Japan and continued to expand distribution inBrazil
Increasing capital
|
flexibility and |
• Completed two Guaranteed Universal Life reinsurance transactions |
|
• Announced second |
|
|
improving the |
|
|
Whole Life block |
|
|
quality of earnings |
3
MAINTAINING DISCIPLINED CAPITAL DEPLOYMENT
Investing in market leading businesses to support
growth
Returned nearly
Board authorized share
repurchases of upto
in 2025 andthe 17th consecutive year of dividend increases
Creating sustainable, profitable growthand shareholder returns
|
(1) Capital returned to shareholders in 2024 of nearly |
4 |
SUPPORTED BY OUR ROCK SOLID BALANCE SHEET
Financial strength
tosupport allstakeholders
Capital supports AA financial strength rating as of December 31, 2024, 2023(1)
Highly liquid assets of $4.6 billion(1)
High quality, well diversified investment portfolio
Disciplined Asset Liability Management
|
(1) Parent company highly liquid assets predominantly include cash, short-term investments, |
5 |
FULL YEAR & FOURTH QUARTER 2024 HIGHLIGHTS
Financial Highlights
($ millions, except per share amounts)
Pre-Tax Adjusted Operating Income( 1 )
Adjusted Operating Income Per Share( 1 )
GAAP Net Income Per Share
Adjusted Operating ROE( 2 )
Adjusted Book Value Per Share( 1 )
2024 4Q24
13.1%
Earnings Drivers
($ millions, pre-tax adjusted operating income)
|
PGIM |
|
International Businesses |
|
+ Higher asset management |
- One-time transaction costs |
- Less favorable underwriting |
|
fees |
- Lower fee income |
- Higher expenses |
|
+ Higher other related |
- Less favorable underwriting |
+ Higher spread income |
|
revenues |
||
|
+ Higher spread income |
||
|
- Higher expenses |
||
|
|
|
|
|
|
|
4Q23 |
4Q24 |
4Q23 |
4Q24 |
4Q23 |
4Q24 |
Note: See Appendix for segment results.
- See reconciliation in Appendix for non-GAAP measures Adjusted Operating Income, Adjusted Operating Income Per Share, and Adjusted Book Value Per Share.
|
(2) Based on 2024 after-tax Adjusted Operating Income and average Adjusted Book Value. See Appendix for more information. |
6 |
PGIM
Earnings Contribution to Prudential
|
Trailing twelve months(1) |
|
|
($ millions) |
|
PGIM 11%
Key Priorities
- Maintain strong investment performance(2)
-
- Percentage of AUM(3) outperforming public benchmarks:
3 Year: 67%, 5 Year: 78%, 10 Year: 85%
- Percentage of AUM(3) outperforming public benchmarks:
- Leverage leading asset management capabilities to grow our mutually reinforcing business system
- Globalize both product and client footprint and continue to add capabilities
- Grow in alternatives, including private credit, and other high margin areas
- Selectively acquire new capabilities through programmatic M&A
|
Total Net Flows |
Asset Management Fees |
|||
|
($ billions) |
|
Trailing twelve months |
Multi-Asset |
|
|
33.0 |
($ millions) |
Private Credit |
5% |
|
|
230. |
& Other Alts |
|||
|
12% |
|
13.0 |
|
|
Public
30.
( .7)0
( 710).
( 720).
|
Fixed |
||||||||
|
Real |
|
Income |
||||||
|
40% |
||||||||
|
( |
Estate |
|||||||
|
( |
21% |
|||||||
|
Public |
||||||||
|
4Q23 |
1Q24 |
2Q24 |
3Q24 |
4Q24 |
Equity |
|||
|
Institutional |
Retail |
Affiliated |
Net Flows |
22% |
||||
- Based on pre-tax adjusted operating income excluding Corporate & Other operations.
- PGIM calculations as of
December 31, 2024 for$812 billion of third-party AUM managed against public benchmarks. Past performance is not a guarantee or reliable indicator of future results. All investments involve risk, including the possible loss of capital. Performance is defined as outperformance (gross of fees) relative to each individual strategy's respective benchmark(s). - Represents PGIM's benchmarked AUM (76% of total third-party AUM is benchmarked over 3 years, 66% over 5 years, and 49% over 10 years). This calculation does not include non-benchmarked assets (including general account assets and assets not managed by PGIM). Returns are calculated gross of investment management fees, which would reduce an investor's net return. Excess performance is based on all actively managed Fixed Income, Equity, and Real
|
Estate AUM for |
7 |
Diversified Portfolio with Favorable Growth Opportunities
Earnings Contribution to Prudential
Trailing twelve months(1) ($ millions)
Key Priorities
- Drive higher value and higher growth with a complementary mix of businesses and diversified sources of earnings
- Transform our capabilities to improve customer experiences
- Expand our addressable market with new financial solutions leveraging the capabilities across Prudential
- Continue to grow our businesses by leveraging our strong brand, product breadth, and distribution strength
Diversified Sources of Earnings
Trailing twelve months(2)
Underwriting
21%
Net Spread
47%
32%
Performance Highlights
- Institutional Retirement Strategies sales of
$10 billion contribute to strong full year sales of$36 billion , the second-best year in history - Continued Individual Retirement Strategies sales growth, with sales of
$3.6 billion representing our best quarter in over a decade for the fourth straight quarter Favorable Group Insurance benefits ratio of 83.1%, at the low-end of our target range- Individual Life achieved record 4Q sales, significantly exceeding industry growth, reflecting the strength of diversified product offering and distribution breadth
Note: See Appendix for segment results.
- Based on pre-tax adjusted operating income excluding Corporate & Other operations.
U.S. Businesses include Retirement Strategies, Group Insurance, and Individual Life.
|
(2) Based on net spread income, net fee income, and underwriting margin and claims experience gross of expenses. Excludes assumption updates and other refinements. |
8 |
INTERNATIONAL BUSINESSES
Market Leader in
Earnings Contribution to Prudential
Trailing twelve months(1) ($ millions)
International
Businesses
40%
Key Priorities
- Expand product and business capabilities to meet customers' evolving insurance and retirement security needs
- Enhance customer experience and deliver differentiated distribution leveraging digital tools
- Optimize capital and operational efficiency
- Expand in select high growth emerging markets through investments in organic growth and selective M&A
|
Sales(2) |
Sales - Currency Mix(2) |
|||
|
($ millions) |
Trailing twelve months |
Other 2% |
||
|
|
|
BRL |
||
|
|
|
|
||
|
15% |
JPY
USD 57%
26%
|
4Q23 |
1Q24 |
2Q24 |
3Q24 |
4Q24 |
- Based on pre-tax adjusted operating income excluding Corporate & Other operations.
- Constant exchange rate basis. Foreign denominated activity translated to
U.S. Dollars (USD) at uniform exchange rates for all periods presented, including Japanese Yen (JPY) 129 per USD and Brazilian Real (BRL) 6 per USD.
|
USD-denominated activity is included based on the amounts as transacted in USD. Sales represented by annualized new business premiums. |
9 |
SIGNIFICANT CAPITAL POSITION
Highly Liquid Assets
Ratios
ObjectivesPosition
|
> |
$4.6 billion(1) |
Consistent with AA objectives
Ratios remain in excess
PICA RBC ratio > 375%of our objectives(2)
|
Off-Balance Sheet Resources |
|||
|
Resource |
Capacity |
Maturity Date |
|
|
Credit Facility |
|
|
|
|
|
|
|
|
|
|
|
||
|
|
¥100 billion |
|
|
|
Japan Facility |
|||
As of
- Highly liquid assets predominantly include cash, short-term investments,
U.S. Treasury securities, obligations of otherU.S. government authorities and agencies, and/or foreign government bonds.
|
(2) PICA RBC ratio is disclosed in annual statutory statement. |
1 0 |
Attachments
Disclaimer
Paramount Announces Release Date for Fourth Quarter 2024 Results
Findings from Harvard Medical School Broaden Understanding of Mental Health Diseases and Conditions (Association of Medicaid Accountable Care Organizations and Postpartum Mental Health Care Utilization): Mental Health Diseases and Conditions
Advisor News
- Reynolds signs temporary tax hike
- Gov. Kim Reynolds signs temporary tax hike to address Iowa Medicaid shortfall
- Reynolds signs temporary tax hike to address Iowa Medicaid shortfall
- Temporary tax hike to fill Iowa Medicaid gap heads to governor’s desk
- Gov. Kim Reynolds signs health insurance premium tax increase into law
More Advisor NewsAnnuity News
- Corebridge, Equitable merge to create potential new annuity sales king
- LIMRA: Final retail annuity sales total $464.1 billion in 2025
- How annuities can enhance retirement income for post-pension clients
- We can help find a loved one’s life insurance policy
- 2025: A record-breaking year for annuity sales via banks and BDs
More Annuity NewsHealth/Employee Benefits News
- Reynolds signs temporary tax hike
- Gov. Kim Reynolds signs temporary tax hike to address Iowa Medicaid shortfall
- Reynolds signs temporary tax hike to address Iowa Medicaid shortfall
- Temporary tax hike to fill Iowa Medicaid gap heads to governor’s desk
- Commentary: Patients are often left ‘out of network’ as hospitals, insurers clash over cost
More Health/Employee Benefits NewsLife Insurance News
- Corebridge, Equitable Merger Creates $1.5tr Platfrom
- AM Best Removes from Under Review with Positive Implications and Affirms Credit Ratings of Sompo Seguros Mexico S.A. de C.V.
- Corebridge, Equitable merge to create potential new annuity sales king
- Aflac adds new long-term care rider
- AM Best Affirms Credit Ratings of Nan Shan General Insurance Co., Ltd.
More Life Insurance News