Prudential Financial to reinsure $10B block of traditional VAs with Constellation affiliate

• Supports Prudential’s transformation strategy by reducing market sensitivity and increasing capital flexibility
• Does not result in any changes for customers, financial professionals, or broker dealers

NEWARK, N.J.--(BUSINESS WIRE)--
Prudential Financial, Inc. (NYSE: PRU) announced today an agreement to reinsure a portion of its traditional variable annuity block with an affiliate of Constellation Insurance Holdings, Inc., for proceeds at closing resulting in approximately $650 million.¹

Under the terms of the agreement, Constellation’s affiliate will reinsure approximately $10 billion of Prudential Defined Income (PDI) traditional variable annuity contracts with guaranteed living benefits issued by Pruco Life Insurance Company (PLAZ), a subsidiary of Prudential Financial. This represents approximately 10% of Prudential’s remaining legacy in-force traditional variable annuity block by account value.

“We have successfully achieved our strategic objective of lowering our proportion of traditional variable annuities,” said Charles Lowrey, Chairman and CEO of Prudential Financial. “Looking ahead, we are focused on expanding access to retirement security and serving the income and protection needs of millions of Americans through our diverse and attractive portfolio of annuity solutions, including our FlexGuard suite and fixed annuities.”

New sales of the PDI product were discontinued in 2020, and the agreement will not result in any change of contract ownership, terms, fees or commission schedules for contracts included in the transaction. Prudential will continue to service the block and maintain its existing relationships with contract holders, broker dealers, and financial professionals.

The transaction is expected to close by the end of second quarter of 2023, with an effective date of April 1, 2023. Upon closing, Prudential anticipates a reduction to after-tax annual adjusted operating income of approximately $50 million.

Willkie Farr & Gallagher LLP served as legal counsel to Prudential, and Goldman Sachs & Co. LLC served as exclusive financial advisor.

¹ Proceeds include statutory capital release of approximately $410 million, release of reserves, and ceding commission received, net of taxes.

About Prudential Financial, Inc.

Prudential Financial, Inc. (NYSE: PRU), a global financial services leader and premier active global investment manager with approximately $1.4 trillion in assets under management as of March 31, 2023, has operations in the United States, Asia, Europe, and Latin America. Prudential’s diverse and talented employees help make lives better and create financial opportunity for more people by expanding access to investing, insurance, and retirement security. Prudential’s iconic Rock symbol has stood for strength, stability, expertise, and innovation for nearly 150 years. For more information, please visit news.prudential.com.