Robert M. Falzon
Vice Chairman at Prudential Financial
Thank you, Charlie. I'll provide an overview of our financial results and business performance for our PGIM, U.S. and international businesses. I'll begin on Slide 6 with our financial results for the third quarter of 2022. Pre-tax adjusted operating income was $1 billion or $2.13 per share on an after tax basis and reflected lower variable investment income, driven by market conditions and an elevated level of Japan COVID-19 hospitalization claims, partially offset by underlying business growth, including a benefit from rising interest rates. Our GAAP net loss per share was $0.78 on an after tax basis, primarily reflecting realized investment losses largely driven by higher interest rates.
Turning to the operating results from our businesses compared to the year-ago quarter. PGIM, our global investment manager, reported lower asset management fees, resulting from a reduction in assets under management, reflecting higher interest rates, widening credit spreads and declines in equity markets. Results of our U.S. businesses were lower than the year-ago quarter, reflecting lower spread income due to less favorable variable investment income and lower fee income resulting from the sale of a portion of the legacy variable annuities business, the decline in equity markets, and net outflows, partially offset by more favorable underwriting as COVID-19 transitions to an endemic level in the U.S. The decrease in earnings in our international businesses reflected elevated COVID-19 hospitalization claims in Japan and lower spread income driven by less favorable variable investment income.
Turning to Slide 7. PGIM, our global active investment manager, has diversified capabilities in both public and private asset classes across fixed income, alternatives real estate and equities. PGIM's long-term investment performance remains attractive with more than 80% of assets under management, outperforming their benchmarks over the last 5 and 10 year periods. PGIM experienced retail outflows, primarily in fixed income, consistent with industry trends, due to the rising rate environment, while institutional net flows continued to be positive.
As the investment engine of Prudential, the success and growth of PGIM and of our U.S. and international insurance and retirement businesses are mutually enhancing. PGIM's asset origination capabilities, investment management expertise and access to institutional and other sources of private capital are a competitive advantage. This helps our businesses bring enhanced solutions and create more value for our customers.
Our insurance and retirement businesses in turn provide a source of growth for PGIM through affiliated flows and unique access to insurance liabilities that complement its track record of third party growth. PGIM's annual fee rate increased due to the continued shift toward higher fee strategies, including our alternatives and private credit business. We continue to grow our alternatives and private credit business, which has assets under management of nearly $230 billion across private credit, real estate equity and debt and private equity secondaries, and benefits from our global scale and market-leading positions. Across PGIM's private platform we deployed $9.6 billion of capital this quarter. As we continue to invest in growth areas that are aligned with the needs of our clients, we also remain disciplined in finding opportunities to protect operating margins by managing the business more efficiently.
Turning to Slide 8. Our U.S. businesses produced diversified earnings from fees, net investment spread and underwriting income, and benefit from our complementary mix of longevity and mortality businesses. We continue to shift our business mix towards higher growth and less market-sensitive products in markets, transform our capabilities and cost structure and further expand our addressable markets. Retirement strategies achieved robust sales in the third quarter across its institutional and individual lines of business. Institutional retirement closed nearly $10 billion of pension risk transfer transactions in the third quarter including being selected by IBM for a 50% participation in a $16 billion pension risk transfer transaction.
Our focus on superior execution, supported by the experience of our high-quality PRT team and our continued market leadership in the U.S. pension risk transfer market, contributed to IBM selecting us. We continue to see a significant opportunity in the growing PRT market. In individual retirement, product pivots have resulted in continued strong sales of more simplified solutions with $1 billion of FlexGuard and FlexGuard Income sales in the third quarter as well as increased fixed annuity sales.
Our Individual Life sales also reflect our earlier product pivot strategy with variable life products representing approximately 70% of sales for the quarter. Group insurance experienced a 50% increase in sales compared to the year-ago quarter, reflecting higher national account life and disability sales and execution of our product growth strategy to drive the supplemental health.
Turning to Slide 9. Our international businesses include our Japanese life insurance companies where we have a differentiated multichannel distribution model, as well as other businesses aimed at expanding our presence in high-growth emerging markets. In Japan we are focused on providing high-quality service and expanding our geographic coverage and product offerings. Our needs-based approach and protection product focus continue to provide important value to our customers as we expand our product offerings to meet their evolving needs. For example we launched a yen-denominated investment product with a joint Survivorship feature in the bank channel in the third quarter.
In emerging markets, we are focused on, creating a carefully selected portfolio of businesses and regions where customer needs are growing, where there are compelling opportunities to build market-leading businesses, and where the Prudential enterprise can add value. In the third quarter we continued to focus on expanding product and business capabilities to meet the evolving needs of customers. In Brazil we expanded our digital sales application and achieved record sales for the second consecutive quarter, driven by strong performance across all distribution channels. We further expanded our product offerings on the Mercado Libre platform in Brazil and successfully launched this sales platform in Argentina as Charlie mentioned.
In addition, we completed our tender offer for Alex Forbes, expanding our ownership to 33% of the leading provider of integrated retirement, investment and wealth management services in South Africa. As we look-ahead, we're well positioned across our businesses to be a global leader in expanding access to investing, insurance and retirement security. We continue to invest in growth businesses and markets, deliver industry-leading customer experiences, and create the next-generation of financial solutions to better serve the diverse needs of a broad range of customers.
And now with that I'll hand it over to, Ken.