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October 30, 2024 Reinsurance No comments

Third Quarter 2024 Earnings Presentation

U.S. Markets via PUBT

3Q24 EARNINGS CALL

OCTOBER 31, 2024

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

Addressing the global retirement opportunity

Expanding leadership in Retirement Strategies, launching new products in Japan, and leveraging PGIM's capabilities

Growing our market leading businesses

	International	PGIM
U.S. Businesses	Supporting the growth of our
Benefiting from
Broadening products	businesses and increasing
strong multi-channel
and distribution	private alternatives capital
distribution
	deployment

Increasing capital flexibility

Announced second Guaranteed Universal Life reinsurance transaction

of ~$11 billion with estimated proceeds of ~$350 million

MAINTAINING DISCIPLINED CAPITAL DEPLOYMENT

CREATING SUSTAINABLE, PROFITABLE GROWTH AND SHAREHOLDER RETURNS

Investing in market leading businesses to support growth

Returned over $700 million to shareholders in 3Q24(1)

(1) Capital returned to shareholders in the third quarter of $721 million includes share repurchases of $250 million and dividends of $471 million.

SUPPORTED BY OUR ROCK SOLID BALANCE SHEET

Financial strength

tosupport allstakeholders

Capital supports AA financial strength rating as of September 30, 2024, 2023(1)

Highly liquid assets of $4.3 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.

THIRD QUARTER 2024 HIGHLIGHTS

Financial Highlights		Earnings Drivers

($ millions, except per share amounts)

Pre-Tax Adjusted Operating Income	(1)

Adjusted Operating Income Per Share	(1)

YTD 2024	3Q24
$4,704	$1,628
$9.98	$3.48

($ millions, pre-tax adjusted operating income)

PGIM	U.S. Businesses	International Businesses
+ Higher asset management	+ More favorable underwriting	- Less favorable underwriting
fees	+ Higher spread income	- Higher expenses
- Higher expenses	- Lower fee income	+ Higher JV earnings

	- Higher expenses	+ Higher spread income

GAAP Net Income Per Share
Adjusted Operating ROE	(2)

Adjusted Book Value Per Share	(1)

$7.64

$1.24

$1,088	$1,108
13.7%	$811
	$766

$98.71

$211 $241

3Q23 3Q24

3Q23

3Q24

3Q23

3Q24

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 year-to-date 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)	$788

PGIM 10%

Total Net Flows

($ billions)		$33.7
310.
210.
11.0					$3.2
10.
( 9). 0	($3.8)
			($7.7)
( 910).
( 920).		($18.9)
	3Q23	4Q23	1Q24	2Q24	3Q24
		Institutional	Retail	Affiliated	Net Flows

Key Priorities

Maintain strong investment performance(2)
- Percentage of AUM(3) outperforming public benchmarks:
  1 Year: 86%, 3 Year: 65%, 5 Year: 79%, 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

Asset Management Fees

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

Other Alts

12%

		Public
		Fixed
Real	$3,089	Income
40%
Estate

21%

Public

Equity

22%

Based on pre-tax adjusted operating income excluding Corporate & Other operations.
PGIM calculations as of September 30, 2024 for $819 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 (83% of total third-party AUM is benchmarked over 1 year, 77% over 3 years, 67% over 5 years, and 50% 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 51%

$4,005

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

20%

Net Spread

49%

Net Fees

31%

Performance Highlights

Institutional Retirement Strategies sales of $11 billion contribute to strong year-to-date sales of $26 billion
Continued Individual Retirement Strategies sales growth, with sales of $3.6 billion representing our best quarter in over a decade
Favorable Group Insurance benefits ratio of 83.4%, at the low-end of our target range
Individual Life sales reflect pivot towards more capital efficient products

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)

$3,112

International

Businesses

39%

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)		$600	Trailing twelve months	Other 2%
$595

	$520	$532
$479			BRL

				14%

JPY	USD
24%
60%

3Q23

4Q23

1Q24

2Q24

3Q24

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.

ADJUSTED OPERATING INCOME & EPS CONSIDERATIONS

($ millions, except per share amounts)
(1)
3Q24 Reported
Variable Investment Income	•
Underwriting	•
Expenses & Other	•

	Adjusted	Adjusted Operating
	Operating Income	Income Per Share
	Pre-Tax	After-Tax
	$1,628	$3.48
Assumes a normalized level	50	0.11
3Q24 experience normalized	(15)	(0.03)
Primarily timing of expenses and seasonal items	(100)	(0.22)

(2)	$1,563	$3.34
4Q24 Baseline

4Q24 baseline includes items specific to the fourth quarter that decrease EPS by $0.33(3)

Note: See Appendix for segment detail.

See reconciliation in Appendix for non-GAAP measures, Adjusted Operating Income, and Adjusted Operating Income Per Share.
EPS rollforward list of considerations not intended to be exhaustive and rollforward is not a projection of 4Q24 results. Does not consider future items such as, among other things, the expected impact of planned transactions, share repurchases, business growth, and market impacts.

(3) Items specific to the fourth quarter include expense and seasonality impacts. See Appendix for details.

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Attachments

Disclaimer

Prudential Financial Inc. published this content on October 30, 2024, and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on October 30, 2024 at 20:46:17.110.