Annuity News

Reinsurance RSS Get our newsletter

Order Prints

2 hours ago Reinsurance

4Q24 Prudential Financial, Inc. Earnings Conference Call Presentation

U.S. Markets via PUBT

4Q24 EARNINGS CALL

FEBRUARY 5, 2025

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

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 in Brazil

Increasing capital

flexibility and	• Completed two Guaranteed Universal Life reinsurance transactions
• Announced second Prismic transaction to reinsure $7 billion Japanese
improving the
Whole Life block
quality of earnings

MAINTAINING DISCIPLINED CAPITAL DEPLOYMENT

Investing in market leading businesses to support

growth

Returned nearly $3 billion to shareholders in 2024(1)

Board authorized share

repurchases of upto $1 billion

in 2025 andthe 17th consecutive year of dividend increases

Creating sustainable, profitable growthand shareholder returns

(1) Capital returned to shareholders in 2024 of nearly $3 billion includes share repurchases of $1 billion and dividends of $1.9 billion.

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, U.S. Treasury securities, obligations of other U.S. government authorities and agencies, and/or foreign government bonds.

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

$5,926 $1,371

$12.62 $2.96

$7.50 ($0.17)

13.1%

$95.82

Earnings Drivers

($ millions, pre-tax adjusted operating income)

PGIM	U.S. Businesses	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

$964 $860

$748

$742

$172	$259

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.

PGIM

Active Global Investment Manager Across a Broad Range of Private and Public Asset Classes

Earnings Contribution to Prudential

Trailing twelve months(1)
($ millions)	$875

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%
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)	$33.7	Trailing twelve months	Multi-Asset
33.0		($ millions)	Private Credit	5%

230.			& Other Alts
			12%

13.0

$3.2

$8.6

Public

30.

( .7)0

( 710).

( 720).

								Fixed
						Real	$3,179	Income
						40%
		($7.7)				Estate

($18.9)						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 Jennison Associates, PGIM Fixed Income, PGIM Quantitative Solutions, PGIM Real Estate, PGIM Private Capital, and PGIM Investments.

U.S. BUSINESSES

Diversified Portfolio with Favorable Growth Opportunities

Earnings Contribution to Prudential

Trailing twelve months(1) ($ millions)

U.S. Businesses 49%

$3,728

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%

Net Fees

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.

INTERNATIONAL BUSINESSES

Market Leader in Japan with Expanding Presence in Growth Markets

Earnings Contribution to Prudential

Trailing twelve months(1) ($ millions)

$3,106

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%

$595		$600		BRL
$520	$532	$519
				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.

SIGNIFICANT CAPITAL POSITION

Highly Liquid Assets

Regulatory Capital

Ratios

ObjectivesPosition

> $3 billion

$4.6 billion(1)

Consistent with AA objectives

Ratios remain in excess

PICA RBC ratio > 375%of our objectives(2)Japan solvency margin ratios > 700%

	Off-Balance Sheet Resources

Resource	Capacity	Maturity Date

Credit Facility	$4.0 billion	July 2029

Contingent Capital	$1.5 billion	May 2030
$1.5 billion	February 2033 and 2053


Prudential Holdings of	¥100 billion	September 2029
Japan Facility

As of December 31, 2024 unless otherwise noted.

Highly liquid assets predominantly include cash, short-term investments, U.S. Treasury securities, obligations of other U.S. government authorities and agencies, and/or foreign government bonds.

(2) PICA RBC ratio is disclosed in annual statutory statement. Japan solvency margin ratios are disclosed quarterly in Prudential's Form 10-Q/10-K.

1 0

Attachments

Disclaimer

Prudential Financial Inc. published this content on February 04, 2025, and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on February 04, 2025 at 21:35:29.140.