Prudential Financial Q1 2023 Earnings Report

Prudential Financial EPS Results

• Actual EPS: $2.66
• Consensus EPS: $3.02
• Beat/Miss: Missed by -$0.36
• One Year Ago EPS: $3.17

Prudential Financial Revenue Results

• Actual Revenue: $15.10 billion
• Expected Revenue: $13.29 billion
• Beat/Miss: Beat by +$1.81 billion
• YoY Revenue Growth: N/A

Prudential Financial Announcement Details

• Quarter: Q1 2023
• Date: 5/2/2023
• Time: After Market Closes
• Conference Call Date: Wednesday, May 3, 2023
• Conference Call Time: 11:00AM ET

Prudential Financial (NYSE:PRU) (NYSE: PRU) is a global financial services company that provides insurance, retirement, investment management and related financial products. Founded in 1875 and headquartered in Newark, New Jersey, the company serves individual, institutional and workplace customers through businesses in the United States and selected international markets.

In the United States, Prudential offers life insurance, annuities, retirement plans and group insurance products, including coverage for employees and their families. Its retirement business provides workplace savings plans, retirement income solutions and related services designed to help individuals and employers prepare for long-term financial needs.

Prudential also operates PGIM, its global investment management business, which provides public and private market investment strategies to institutional and individual investors. Through its international operations, the company offers insurance, retirement and asset management products in markets that have included Japan and other parts of Asia and Latin America. Prudential Financial is separate from Prudential plc, the United Kingdom-based insurer.

Prudential Financial Q1 2023 Earnings Call Transcript

Key Takeaways

• Prudential is executing a transformation to become a higher-growth, less market-sensitive company by expanding global distribution, developing next-generation financial solutions, and enhancing digital customer experiences.
• The firm acquired a majority stake in Deerpath Capital Management, adding over $5 billion in assets under management to PGIM’s alternative credit and direct lending platform and boosting fee-based revenue.
• Retirement businesses delivered strong Q1 results, including a record $2.8 billion in pension risk transfer transactions and fixed annuities representing one-third of individual annuity sales.
• Prudential’s AA-rated balance sheet remains robust with $4.6 billion in highly liquid assets, a new contingent capital facility, $500 million of debt issuance, $700 million returned to shareholders, and a 4% dividend increase.
• PGIM saw $14 billion of net outflows amid market volatility but maintained strong performance—over 80% of benchmarkable assets outperformed—while the broader investment portfolio remains diversified and conservatively underwritten.

Presentation

[Operator]

Ladies and gentlemen, thank you for standing by, and welcome to Prudential's quarterly earnings conference call. At this time, all participants have been placed in a listen-only mode. Later, we'll conduct a question-and-answer session. Instructions will be given at that time. If you should require any assistance during the call, please press star zero and an operator will assist you offline. As a reminder, today's call is being recorded. I will now turn the call over to Mr. Bob McLaughlin. Please go ahead.

[Bob McLaughlin, VP of Investors Relations at Prudential]

Good morning, and thank you for joining our call. Representing Prudential on today's call are Charlie Lowrey, Chairman and CEO, Rob Falzon, Vice Chairman, Andy Sullivan, Head of International Businesses and PGIM, our global investment manager, Caroline Feeney, Head of U.S. Businesses, Ken Tanji, Chief Financial Officer, and Rob Axel, Controller and Principal Accounting Officer. We will start with prepared comments by Charlie, Rob, and Ken, and then we will take your questions. As a reminder, our financial results reflect the long-duration targeted improvements accounting guidance that was adopted at the beginning of the year, and prior year results have been adjusted accordingly. Today's pre-presentation may also include forward-looking statements. It's possible the actual results may differ materially from the predictions we make today. In addition, this presentation may include references to non-GAAP measures.

[Bob McLaughlin, VP of Investors Relations at Prudential]

For reconciliation of such measures to the comparable GAAP measures and a discussion of factors that could cause actual results to differ materially from those in the forward-looking statements, please see the slides titled Forward-Looking Statements and Non-GAAP Measures in the appendix to today's presentation and the quarterly financial supplement, both of which can be found on our website at investor.prudential.com. Now I'll turn it over to Charlie.

[Charlie Lowrey, Chairman and CEO at Prudential]

Thank you, Bob, and thanks to everyone for joining us today. During the first quarter, we continued to transform our business to be less market sensitive and better positioned to deliver sustainable long-term growth. Our financial strength, disciplined asset liability management, and robust risk management position us well to navigate the current macroeconomic environment while maintaining our balanced approach to capital deployment focused on creating value for our stakeholders. Turning to slide three. I'll begin this morning with an update on the progress of our strategy to become a higher growth, less market sensitive, and more nimble company. We are investing in long-term sustainable growth by expanding access to our products and services in markets around the world, including through programmatic M&A and organic growth opportunities, creating the next generation of financial solutions, and delivering industry-leading customer experiences.

[Charlie Lowrey, Chairman and CEO at Prudential]

Let me provide a few recent examples. Yesterday, we announced that Prudential is acquiring a majority stake in Deerpath Capital Management, a leading U.S. private credit and direct lending manager with more than $5 billion in assets under management. The acquisition will expand PGIM's alternative capabilities while providing additional fee-based revenue and complementing PGIM's existing direct lending origination capabilities. In addition, Deerpath is a great example of how we are building our self-reinforcing business model, which will benefit both third-party investors as well as our insurance and retirement customers. Our Institutional Retirement Strategies business had strong first quarter sales, widely driven by our pension risk transfer business, which had its best first quarter ever with more than $2.8 billion in total new business transactions. In addition, we experienced continued momentum in international reinsurance with a $500 million longevity risk transaction.

[Charlie Lowrey, Chairman and CEO at Prudential]

We also achieved new growth milestones in our international business, especially in Latin America, where Prudential of Brazil sales reached double-digit year-over-year growth through our three distribution channels. In particular, we are driving growth in Brazil through our expanded third-party distribution channel, which allows more consumers to access our products and services. During the quarter, we also expanded our distribution through the Mercado Libre platform into Mexico to sell life and accident and health products. In the U.S., our Individual Retirement Strategies business continued to expand its suite of next-generation protection solutions. We expanded our FlexGuard distribution and introduced new product enhancements to meet the evolving needs of our customers. We are also diversifying our sales mix to meet increasing customer needs in a higher interest rate environment.

[Charlie Lowrey, Chairman and CEO at Prudential]

Sales of fixed annuities represented 1/3 of total individual annuity sales in the first quarter, a significant increase from a year ago quarter. We continue to enhance the ways in which customers engage with our products and solutions to drive more digital experiences and better customer outcomes. Let me give you a couple of examples. First, an industry survey ranked Prudential as a top three carrier in e-signature adoption. A majority of annuities applications are now submitted with e-signature, which has reduced processing time by several days and improved our environmental impact. Second, we launched a new electronic claims portal for life insurance customers that allows beneficiaries to file claims in minutes and to receive payments in days rather than weeks.

[Charlie Lowrey, Chairman and CEO at Prudential]

By using the portal this quarter, we have experienced a 300% increase in digital claims processing and overwhelmingly positive customer feedback. Turning now to slide four. Prudential's rock-solid balance sheet and robust risk and capital management frameworks have allowed us to confidently navigate the current macroeconomic environment. Our financial strength, including our AA rating, is supported by $4.6 billion in highly liquid assets at the end of the first quarter, as well as a high quality, well-diversified investment portfolio and a disciplined approach to asset liability management. We've also taken advantage of opportunities to further optimize our financial flexibility and liquidity position. We proactively issued a contingent capital facility to replace the one that matures in November of this year and issued $500 million of hybrid debt to pre-fund a maturity of the same amount next year.

[Charlie Lowrey, Chairman and CEO at Prudential]

Moving to slide five. Our disciplined approach to capital deployment also enables us to effectively balance investing in the long-term growth of our businesses with returning capital to shareholders. In the first quarter, we returned $700 million to shareholders and increased the quarterly dividend by 4%, our 15th consecutive annual dividend increase. Looking ahead, we will maintain our disciplined approach to capital management and redeployment. We are confident that this approach, coupled with our robust financial position, mix of mutually enhancing businesses and growth strategy, positions us well to be a leader in expanding access to investing, insurance and retirement security for people around the world. Thank you for your time this morning. With that, Rob will now provide an overview of our first quarter financial results and an update on our business performance.

[Rob Falzon, Vice Chairman at Prudential]

Thank you, Charlie. I'll provide an overview of our financial results and business performance for our PGIM, U.S., and international businesses. I will also provide an overview of our investment portfolio and specifically our commercial real estate holdings, given the increased focus on the risks associated with a potential near-term credit cycle. I'll begin on slide six with our financial results for the first quarter of 2023. Our pre-tax adjusted operating income was $1.3 billion or $2.66 per share on an after-tax basis. These results reflect underlying business growth, including the benefits from a higher interest rate environment, offset by lower variable investment income and fee income, as well as elevated seasonal mortality experience. While elevated, mortality improved compared to the year ago quarter as COVID has transitioned to an endemic phase.

[Rob Falzon, Vice Chairman at Prudential]

Turning to the operating results from our businesses compared to the year ago quarter. PGIM, our global investment manager, had lower asset management fees due to lower assets under management resulting from the higher interest rates, equity market declines, and net outflows. Other related revenues increased primarily from seed and co-investment earnings. Results of our U.S. businesses primarily reflected lower fee income, less favorable variable investment income, partially offset by the impact of higher rates on spread income and more favorable underwriting. The decrease in earnings in our international businesses primarily reflected lower spread income, largely due to less favorable variable investment income. Turning to slide seven. PGIM, our global active investment manager, has diversified capabilities in both public and private asset classes across fixed income, equities, and alternatives.

[Rob Falzon, Vice Chairman at Prudential]

PGIM's investment performance remains attractive with 80% or more of assets under management outperforming their benchmarks over the last three, five, and 10-year periods. PGIM experienced third-party institutional and retail net outflows of $14 billion in the quarter, primarily from Fixed Income Strategies. Institutional outflows were mainly driven by client redemptions for liquidity needs, including de-risking actions of defined benefit sponsors. Retail outflows were driven by investors rebalancing amidst higher interest rates and inflation consistent with the industry. 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 self-reinforcing. PGIM's asset origination capabilities, investment management expertise, and access to institutional and other sources of private capital are a competitive advantage, helping our businesses bring enhanced solutions and create more value for our customers.

[Rob Falzon, Vice Chairman at Prudential]

Our Insurance and Retirement Strategies businesses, in turn, provide a source of growth for PGIM through affiliated net flows, which totaled $2 billion in the first quarter of 2023, as well as unique access to insurance liabilities. We continue to grow our private alternatives and credit business, which has assets of approximately $235 billion across private, corporate, and infrastructure credit, real estate equity and debt, and secondary private equity, and will be further enhanced through the acquisition of Deerpath Capital, as Charlie previously stated. Turning to slide eight. Our U.S. businesses produce 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 towards higher growth and less market sensitive products and markets, enhance our customer and advisor experiences, and further expand our addressable market.

[Rob Falzon, Vice Chairman at Prudential]

Retirement Strategies achieved strong sales of $5.5 billion in the first quarter across its institutional and individual lines of business. Our institutional retirement business has market-leading capabilities with first quarter sales of $3.8 billion, including a jumbo pension risk transfer transaction, which contributed to record account values at the end of the first quarter. In individual retirement, product pivots have resulted in continued strong sales of more simplified solutions like FlexGuard and FlexGuard Income, representing over $13 billion of sales since inception, as well as increased fixed annuity sales that comprised approximately 1/3 of our sales. Our individual life sales reflect our earlier product pivot strategy, with variable life products representing about 70% of sales for the quarter.

[Rob Falzon, Vice Chairman at Prudential]

We continue to diversify group insurance sales with strong growth in supplemental health and disability products and driving 25% growth in the Premier segment from the prior-year quarter. Turning to slide nine. Our international businesses include our Japanese life insurance companies, where we have a differentiated multi-channel 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. We continue to enhance customer experience and agent support, including through digital tools.

[Rob Falzon, Vice Chairman at Prudential]

Prudential of Japan ranked number one in two out of the three categories in the 2023 J.D. Power Japan Life Insurance Contract Customer Satisfaction Study. We are proud to be recognized for the value we provide customers. In emerging markets, we are focused on creating a carefully selected portfolio of businesses in regions where customer needs are growing, where there are compelling opportunities to build market-leading businesses, and where the Prudential enterprise can add value. Our international businesses experienced their highest sales since the third quarter of 2020. Compared to the prior year quarter, Gibraltar sales were up 16%, mainly driven by the life consultant channel, primarily from higher U.S. dollar sales. Life planner sales were up 13%, driven by the continued momentum in Brazil, as well as higher sales in Japan. Turning to our investment portfolio on slide 10.

[Rob Falzon, Vice Chairman at Prudential]

We have a disciplined approach to our investment portfolio construction and management. It reflects our robust asset liability management practices, commitment to broad diversification, and a rigorous underwriting security selection and credit management framework. We also leverage PGIM's expertise across multiple asset classes, including its deep and long-standing experience in private placements and real estate. With respect to our investment portfolio, here are a few key points. 30% of the portfolio is invested in government securities, primarily comprised of U.S. treasuries and Japanese government bonds. 43% of the portfolio is invested in corporate securities, of which over 93% are investment grade. Private placements represent almost 40% of these corporate securities and over half of our BBB and below-rated securities. These privates have financial covenants and structural protections that have consistently resulted in lower losses than comparable public securities.

[Rob Falzon, Vice Chairman at Prudential]

In past cycles, the loss experience on our BBB private placements have been comparable to single A public credits. Since mortgage loans represent an area of interest, I'll provide more detail on slide 11. Our mortgage loans represent 13% of our portfolio and reflect our conservative underwriting with an average loan-to-value of 57% and debt service coverage of 2.4x. The portfolio is broadly diversified by property type, overweight in more defensive sectors such as multifamily and industrial, and underweighted in both office and retail. Specifically, office properties represent only 2% of invested assets with loan-to-values and debt service coverage ratios that are in line with the overall portfolio. We have a disciplined portfolio monitoring process to review all investments at least annually and a robust risk management framework, which includes stress tests under cyclical and tail scenarios.

[Rob Falzon, Vice Chairman at Prudential]

Any potential credit losses in these scenarios are factored into our capital management framework and are expected to be manageable. As we look ahead, we are well-positioned across our businesses to be a leader in expanding access to investing, insurance, and retirement security. We continue to be focused on investing in growth businesses and markets, delivering industry-leading customer experiences, and creating the next generation of financial solutions to better serve the diverse needs of a broad range of customers. With that, I'll now hand it over to Ken.

[Ken Tanji, CFO at Prudential]

Thanks, Rob. I'll begin on slide 12, which provides insight into earnings for the second quarter of 2023 relative to our first quarter results. As noted, pre-tax adjusted operating income in the first quarter was $1.3 billion and resulted in earnings per share of $2.66 on an after-tax basis. To get a sense of how our second quarter results might develop, we suggest adjustments for the following items. First, variable investment income was below expectations in the first quarter by $150 million. Next, we adjust underwriting experience by $85 million to normalize for first quarter experience. Last, we expect other items to increase adjusted operating income by $25 million, primarily due to the seasonally elevated expenses in the first quarter.

[Ken Tanji, CFO at Prudential]

These items combined get us to a baseline of $3.20 per share for the second quarter. I'll note that if you exclude items specific to the second quarter, earnings per share would be $3.29. The key takeaway is that our underlying earnings power has improved due to business growth, including the benefit of higher interest rates. While we have provided these items to consider, please note there may be other factors that affect earnings per share in the second quarter. Turning to slide 13. Our capital position continues to support our AA financial strength rating. Our cash and liquid assets were $4.6 billion, at the high end of our liquidity target range. We have substantial off-balance sheet resources, including contingent capital and liquidity facilities.

[Ken Tanji, CFO at Prudential]

As Charlie noted, we replaced a $1.5 billion contingent capital facility that will mature in November. We remain thoughtful in our capital deployment, balancing the preservation of financial strength and flexibility, investment in our businesses, and shareholder distributions. Turning to slide 14, in summary, we are transforming our businesses for sustainable growth. We continue to navigate the current macro environment with the financial strength of our rock-solid balance sheet. We maintain a balanced and disciplined approach to capital deployment. Now I'll turn it to the operator for your questions.

[Operator]

Thank you. We'll now be conducting a question-and-answer session. We ask you to please limit yourselves to one question and one follow-up. If you'd like to be placed in the question queue, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. Once again, please ask one question and one follow-up. Our first question today is coming from Tom Gallagher from Evercore ISI. Your line is now live.

[Tom Gallagher, Senior Managing Director at Evercore ISI]

Good morning. First question is just on the potential for the rules being changed on the interest maintenance reserve. Can you talk? I know that I think that was around the $1.8 billion negative adjustment for you guys last year based on the mark-to-market impacts from interest rates from derivatives. Curious if. I think there's a proposal within the NAIC out there that suggests there will be some changes. Can you talk about whether you think that'll go through and whether or not at least some portion, if not all of the billion aid could be recaptured if it is changed? Thanks.

[Ken Tanji, CFO at Prudential]

Hey, Tom, it's Ken. Yeah, the NAIC is in the process of addressing what is uneconomic issues with the IMR. They've, as you mentioned, released a proposal, and that's out for comment until June 9th. They're given some time to receive input for the industry to work collectively on this. We think it's a big step in the right direction. You know, as both the industry, the ACLI, regulators, they're focused on addressing this issue. Having said that, the proposal needs some changes in a few areas, but there is a process to sort that out. We and many others are engaged in very constructive discussions. It's hard to predict the regulatory process, but it seems it's on the path for changes this year.

[Tom Gallagher, Senior Managing Director at Evercore ISI]

Ken, Is kind of your base case assumption based on what's out there now that you'll potentially get all of it back? Or would it be just a part, maybe a partial, clawing back of some of that negative impact on RBC?

[Ken Tanji, CFO at Prudential]

Yeah. Yeah, Tom, again, it's hard to predict. There are things that are being discussed, and until those things get sorted out, I wouldn't wanna, you know, give an indication of how that plays out. Again, they are taking input. It's a very constructive process. I think all the intentions are there to put this on the path for resolution, but, you know, that'll play out in time.

[Tom Gallagher, Senior Managing Director at Evercore ISI]

Thank you. Just for my follow-up, question on leverage. I think you've announced you're gonna redeem $1.5 billion of subdebt in June. I think you issued $500 million this quarter as well or sorry, in Q1. Where do you stand now on leverage? Can you just talk about do you have upward capacity to issue more debt? Are you at about the right level? Because I think there's been some changes in certainly from an accounting perspective, it's a bit of an elusive calculation to do from our perspective. Can you provide some help there? Thank you.

[Ken Tanji, CFO at Prudential]

Yep, sure. Yeah, at the end of first quarter, we were in line with our leverage objectives. When we called the $1.5 billion of debt, which has always been in our plans to do that in June, that would increase our debt capacity. You know, our overall debt capacity, though, is a function of rating agency criteria and other objectives. It looks at profitability, free cash flow, fixed cost coverage, and stress testing, which we believe is important. It's not just leverage that would determine our debt capacity. Again, you know, calling that debt was part of our plans. It was pre-funded. That will improve our debt capacity going forward. Overall, we're on track for our plans for the year.

[Tom Gallagher, Senior Managing Director at Evercore ISI]

Okay, thanks.

[Operator]

Thank you. Next question today is coming from Ryan Krueger from KBW. Your line is now live.

[Ryan Krueger, Managing Director of Equity Research at KBW]

Hey, thanks. Good morning. Could you talk a little bit more about the drivers of PGIM flows in the quarter? I guess, how are you thinking about the outlook going forward? Would you anticipate further liquidity-driven repositioning impacts, or do you think a lot of that's behind you now?

[Andy Sullivan, Head of International Businesses at Prudential]

Good morning, Ryan. It's Andy. I'll take your question. You know, as we always discuss, flows are gonna vary quarter to quarter, so we stay focused on the long-term track record. You know, in Q1, we experienced third-party net outflows of $14 billion, driven both by retail and institutional. You know, on both fronts, as you heard Rob say up front, it is very much a fixed income story. Our retail outflows were $3.8 billion in the quarter. The fact is we continue to see money flowing out of active U.S. mutual funds and into money market funds, CDs, and other short-term solutions. You know, that being said, we did see a slowing of the retail outflows in the quarter consistent with the industry. We would expect this outflow trend to reverse, once inflation moderates and the rate environment stabilizes.

[Andy Sullivan, Head of International Businesses at Prudential]

On the institutional side, net outflows were $10.2 billion for the quarter. That was driven almost entirely by redemptions from public fixed income as institutional investors sought that liquidity, as you mentioned, and DB sponsors de-risk their plans. You know, we would expect that the near-term flow volatility in the institutional business will remain volatile, given the heightened macroeconomic, geopolitical, and market uncertainty. You know, that being said, our long-term investment performance remains very, very strong, with over 80% of our benchmarkable assets outperforming the three, five, and 10-year marks.

[Andy Sullivan, Head of International Businesses at Prudential]

We have high confidence in the power of our platform, particularly as sustained higher rates are going to be good for the fixed income business, and we will benefit over time from the synergy between our insurance and asset management businesses. By paying attention to the fundamentals, we know we'll be a net grower.

[Ryan Krueger, Managing Director of Equity Research at KBW]

Thanks. Then follow up on other related revenues in PGIM. How sensitive is that to transaction-related real estate fees? I guess, in other words, you know, in the current environment where there's less commercial real estate activity, you know, would you expect that to remain a little bit lower than normal because of the lack of incentive fees? Can you give some perspective on that?

[Andy Sullivan, Head of International Businesses at Prudential]

Yeah. Again, it's Andy. Thanks, Ryan. You know, as you know, last quarter we lowered our run rate expectations for RR specifically due to as you're speaking to the expected slowdown in real estate related revenues. That shows up in a variety of ways. Obviously both in the agency side, but also as you're talking about in transaction fees and incentive fees. In the quarter, we came in lower than our expected average because we saw that real estate slowdown as we expected. I guess the only other thing I would mention is just a reminder that incentive fees tend to be seasonally low in Q1. That was definitely a contributor as well. I think over time, the expected average of about $50 million is still the right ballpark, but definitely the real estate slowdown will have an impact.

[Ryan Krueger, Managing Director of Equity Research at KBW]

Okay, great. Thank you.

[Operator]

Thank you. Next question is coming from Erik Bass from Autonomous Research. Your line is now live.

[Erik Bass, Equity Research Analyst at Autonomous Research]

Hi, thank you. You mentioned stress testing your credit portfolio and including that in your capital management plans. I was just hoping you could provide a bit more color on what you're assuming and what those capital impacts could look like in a moderate or severe recession scenario?

[Rob Axel, Controller and Principal Accounting Officer at Prudential]

Erik, it's Rob. I'll take the first stab at sort of describing how we think about stress testing, and then Ken, perhaps I'll turn it over to you, and you can talk about how we factor that into our capital planning. We have a very robust enterprise risk management capability, and perform a whole series of stress tests that vary between, you know, our outlook on a base case basis, which includes sort of a moderate decline from an economic standpoint, a full-blown recession. Particularly with respect to our real estate portfolio, we run some of the [CCARs] more severe stress tests that the banks are subject to as well.

[Rob Axel, Controller and Principal Accounting Officer at Prudential]

The results of those are factored into both our capital planning and our reserving. We haven't, Erik, updated any disclosure on that, but what I would say is if you look back to when we first, or last, I should say, provided some disclosure, and that was back in the first quarter of 2020, the order of magnitude that we articulated then in terms of the impact coming from the portfolio from a credit cycle is roughly the same order of magnitude today. Ken, I don't know if you want to elaborate further on that?

[Ken Tanji, CFO at Prudential]

Yeah, just on your second part of your question, Eric, on, you know, sort of what underpins our plans. What is underpinning our plans is sort of the expectation of a slowing economy and the early stages of a mild recession, which would include an elevated level of credit losses and rating migration. You know, beyond that, though, we also as Rob just described, we have a variety of stress testing that we also consider. Those are the, you know, that's what we look at when we set our plans for the year.

[Erik Bass, Equity Research Analyst at Autonomous Research]

Got it. Thank you. I was hoping you could talk a little bit about your strategic view of the U.S. individual life business going forward. This under LDTI, I think your guidance implies this business will be roughly breakeven, or slightly profitable on a GAAP basis. Are there any actions that you're considering or that you could take to improve the profitability of this business?

[Caroline Feeney, Head of U.S. Businesses at Prudential]

Yes. Hi, Erik, it's Caroline, and I'll take your question. Obviously, as you state, LDTI is expected to result in a meaningful decline in earnings this year for the life business, as AOY recognition will be deferred. While this impacts the earnings pattern, it doesn't change the economics of the business. However, even under the impacts of LDTI, we are proactively looking at ways to enhance the earnings power of the business. We do remain encouraged by the actions we've taken to pivot to less interest rate sensitive products, as well as to diversify our overall product portfolio. Erik, this obviously also includes the recent launch of our indexed variable universal life product, FlexGuard Life, which is ramping up nicely.

[Caroline Feeney, Head of U.S. Businesses at Prudential]

We do expect our AOY to grow over time based on core growth, the compounding impact of new business written at attractive returns and also, higher reinvestment rates. Overall, we remain very committed to the individual life business. We do continue to believe that this business is core to Prudential's purpose. We like the growth potential with our overall brand, as well as our product breadth and certainly our distribution strength. We also like the additive mix that the life business brings, particularly the longevity and mortality balance. In terms of our pivot, our business, our new business, Erik, is it's really a much more favorable risk profile, and we're writing new business at attractive returns.

[Erik Bass, Equity Research Analyst at Autonomous Research]

Great. Thank you.

[Caroline Feeney, Head of U.S. Businesses at Prudential]

Thank you.

[Operator]

Thank you. Next question today is coming from Jimmy Bhullar from JPMorgan, your line is now live.

[Jimmy Bhullar, Equity Research Analyst at JPMorgan]

Just a question first on your commercial mortgage loan book, if you could discuss your confidence in that portfolio and any stats that you could give us in loans that have either been restructured and how that sort of trended over the past several months.

[Rob Axel, Controller and Principal Accounting Officer at Prudential]

Jimmy, it's Rob. I'll handle that. First, just from a sort of a high level standpoint, the real estate portfolio is a very high quality portfolio, broadly diversified both by geography and in the underlying property types. We really benefit from PGIM's direct origination capabilities in this arena. They've got a management team there that's got well over 25 years of industry experience and deep knowledge of the markets, and a proven track record in that area. When we look at the quality of the portfolio, it's actually holding up quite well. You can see that our seasoning reserve for that portfolio is just a little under $200 million. That's about 39 basis points against the portfolio. That is up from about 21 basis points a year ago.

[Rob Axel, Controller and Principal Accounting Officer at Prudential]

That's primarily a general reserve. We only have a single loan with a specific reserve in there, an office property. Outside of that, the reserve really comprises our estimation of losses across the portfolio based on historical data.

[Jimmy Bhullar, Equity Research Analyst at JPMorgan]

Okay. The acquisition of Deerpath should be assumed that there's gonna be sort of a diversion of funds from buyback to fund this, or should we not expect any impact on your buyback plans?

[Charlie Lowrey, Chairman and CEO at Prudential]

Jimmy, let me take that and just raise it up a level, and then I'll answer your question directly. You know, we have said when we think about buybacks and the application of capital, that we want to be good stewards of capital. We have and will continue to demonstrate a very disciplined and balanced approach to the redeployment of capital within our businesses and to our shareholders and other stakeholders. You saw in the first quarter, we returned over $700 million to shareholders, which included the 15th consecutive annual increase in our dividend. If I take a step back for a moment, let me share with you some observations about how we think about capital allocation and in particular, optimization, which hits your point.

[Charlie Lowrey, Chairman and CEO at Prudential]

We look across all our businesses, both domestically and internationally, to ensure that we're optimizing capital deployment. We'll continue to look for ways to optimize capital to maximize outcomes for all our stakeholders by balancing investments in our businesses and business growth, programmatic M&A, and returning capital to shareholders while maintaining our financial strength. You saw examples of all four of that this quarter, right? We continue to invest in our businesses. We did programmatic M&A with Deerpath Capital. We returned capital to shareholders, both in the form of dividends and share repurchases. We made an announcement to repay hybrid, the hybrid, which lowers our leverage. We'll continue to evaluate all these things as we go forward, especially in the current macroeconomic environment.

[Charlie Lowrey, Chairman and CEO at Prudential]

As an example, this quarter, we were able to do all of that given the strength of our capital position, given the cash flow we've generated, and given our strategy going forward.

[Operator]

Thank you. As a reminder, that's star one to be placed in the question queue. We ask you please ask one question and one follow-up. Our next question is coming from Elyse Greenspan from Wells Fargo. Your line is now live.

[Elyse Greenspan, Managing Director at Wells Fargo]

Hi. Thanks. Good morning. My first question is on the capital side of things. You know, when we, you know, after the $1.5 billion debt pay down, right, you guys are around, are at $3.1 at the Holdco. Can you just give me, I'm just looking for a sense of, you know, where you wanna run relative to that target? In the answer to that question, can you give us a sense of just the timing of, you know, dividends that you're going to take out of PICA this year, as well as, you know, any repatriation of capital from Japan?

[Ken Tanji, CFO at Prudential]

Yeah. Hey, Elyse, it's Ken. Yeah, as I mentioned before, you know, we've been planning for the call of the $1.5 billion for some time. That's how we built our plans. You know, in terms of trends, and timing, 1Q is typically a lower quarter for cash flow from subsidiaries, and that's what we saw this quarter, first quarter. It tends to be higher in subsequent quarters. All of our businesses are profitable in generating cash flow. That includes PICA, and Japan and PGIM. We expect cash flows from them as we progress through the year. We expect to operate within our $3 billion-$5 billion Holdco HLA range. It'll be higher in some periods and lower in others, and that's why we define the range. Overall, we're proceeding very in line with our plans.

[Elyse Greenspan, Managing Director at Wells Fargo]

Thanks. Then the second quarter baseline, the $3.20 EPS, that assumes normal VII. You know, prepays and alternative, you know, real estate income could be lower just given, you know, the volatility we're seeing in markets. How should we think about, you know, just VII, not only for the Q2 but, you know, also for the balance of the year?

[Rob Axel, Controller and Principal Accounting Officer at Prudential]

Elyse, it's Rob. I'll try to address that. First, with regard to the returns on the alternatives portion of the portfolio, distinguishing that from the prepayments, part of your question, market performance is gonna continue to impact returns. That's primarily in the private equity component of our portfolio. That correlation's directional. How it manifests in any given quarter is kind of dependent on the conditions in the quarter. I'd also note that within that PE allocation that we've got, about a quarter of that is actually allocated to mezzanine distressed debt and infrastructure. Not entirely correlated with the markets. Also remind you that the PE is reported on a one-quarter lag. If you look at equity performance in the first quarter, that would be some indication of the portfolio on a go-forward basis.

[Rob Axel, Controller and Principal Accounting Officer at Prudential]

With regard to prepayments, we did see a reduced level of prepayments in a higher interest rate environment, and I think it's, you know, that's a trend that we're anticipating on a go-forward basis as well. Maybe I just close with going back to the alternatives portfolio just to emphasize, our alternatives are invested for the long term. Over that horizon, we expect to continue to benefit from the dedicated team that we've got and from the diversification that we have in the portfolio and the efforts we've had around manager selection, including within the real estate component of that, to the part of your question. Real estate is actually a relatively modest component of our alternatives. It's 15-ish or so percent.

[Elyse Greenspan, Managing Director at Wells Fargo]

Thank you.

[Operator]

Thank you. Next question is coming from Alex Scott from Goldman Sachs. Your line is now live.

[Alex Scott, Equity Research Analyst at Goldman Sachs]

Good morning. First one I had is on annuities. That was a place where I guess relative to the presentation you all put out at the time of the LDTI recast, the result came in, you know, much stronger this quarter. I just wanted to see, you know, if you had perspective on sort of what changed there versus what you were expecting at the time of the LDTI recast. You know, one of the things that struck me was NII, and I know you all have talked about sensitivity to the NII on, you know, shorter duration collateral securities in cash.

[Alex Scott, Equity Research Analyst at Goldman Sachs]

I just wanted to see if you could provide any kind of sensitivity to help us think through how to model that as we think through federal funds, sort of, you know, at the levels they are today versus, you know, some of the projections that have them declining.

[Caroline Feeney, Head of U.S. Businesses at Prudential]

Yeah. Alex, it's Caroline, and I'll take your question. First of all, I would point out that the strong earnings in our Retirement Strategies business continues to reflect the ongoing growth that we're experiencing in this business. I'll just start with the Institutional Retirement business, which ended the quarter with record account values of $253 billion. Our account values benefited from nearly $4 billion in sales, including the best first quarter ever in our pension risk transfer business. If I move to the Individual Retirement Strategies side, we continued to see strong sales here as well, anchored by our FlexGuard suite of indexed variable annuities.

[Caroline Feeney, Head of U.S. Businesses at Prudential]

In less than three years, we've delivered over $13 billion in total sales, clearly reinforcing our leadership position as a top five player in the indexed variable annuity space. Complementing that success, our fixed annuity offerings saw continued strong growth and represented over 30% of our sales for the quarter. Compounding this growth story from an earnings perspective, Alex, is our robust disciplined pricing. When we go to market, our pricing clearly is fair, competitive, and also accretive to shareholder value. We're also able to maintain this profitable growth trajectory, thanks to the strength of our brand, our leading distribution capabilities as well as strong execution.

[Caroline Feeney, Head of U.S. Businesses at Prudential]

I would also point out that earnings in the Retirement Strategies business are seeing a benefit from tailwinds provided by the current interest rate environment in both short term as well as long-term rates, which are driving favorable spread income. Then, finally, we remain focused on expense discipline and continuous improvement in operating efficiency with an eye towards protecting the bottom line. It's really a combination of all of these factors that contribute to the strong earnings we continue to see in the Retirement Strategies business, which are well positioned for continued growth.

[Alex Scott, Equity Research Analyst at Goldman Sachs]

Got it. Maybe just a follow-up to that. I mean, the portion that's the sensitivity to shorter term interest rates, is there any way for us to gauge, you know, how that may react if the fed funds rate begins to decline? It just, it seemed like, you know, it seemed like there's maybe a bit more leverage than I would've guessed on the upside to that, so I don't wanna, you know, overlook...

[Caroline Feeney, Head of U.S. Businesses at Prudential]

Yeah.

[Alex Scott, Equity Research Analyst at Goldman Sachs]

You know, the potential for that to come out.

[Caroline Feeney, Head of U.S. Businesses at Prudential]

Alex, clearly the earnings as I mentioned, are seeing a benefit from the current interest rate environment, and that's both on the short term as well as the long-term rates, driving the favorable spread income. If we were to see rates decline, then clearly, we would see a reduction on the spread income, that we earn. I also want to reiterate the point that I made that business growth continues to be a driver of earnings as well. Even if there was, a reduction in rates, we would clearly expect that to persist.

[Alex Scott, Equity Research Analyst at Goldman Sachs]

Got it. Yeah, understood. Thank you.

[Operator]

Thank you. Next question is coming from John Barnidge from Piper Sandler. Your line is now live.

[John Barnidge, Managing Director at Piper Sandler]

Thank you very much for the opportunity, and good morning. My question is around the group insurance. Persistency declined in both group life and disability. Can you maybe talk about the drivers seen and any impact from employment reductions as the larger jumbo into the market?

[Caroline Feeney, Head of U.S. Businesses at Prudential]

Of course, John. It's Caroline, I'll take your question. Let me just start by taking a step back and pointing out that a core focus of our group business is to remain price disciplined and profit focused. That just really means pursuing smart growth. We saw a 2% growth from the year-ago quarter in earned premiums and fees, and that was primarily driven by growth in disability and supplemental health. While we saw strong sales in the first quarter in group life, the year-over-year decline in annualized new business premiums is attributable to our strong discipline when it comes to pricing new sales.

[Caroline Feeney, Head of U.S. Businesses at Prudential]

Specific to your question on persistency, John, I'll highlight our approach to and as well as our experience with renewals, which as you know, are heavily weighted towards the January first effective date. When it comes to pursuing renewals, if we are unable to achieve our desired level of profitability through appropriate rate action, we choose not to retain that business, which is, in fact, just really addition by subtraction. From a group life persistency perspective, you're actually seeing those principles in action here in the first quarter. The trend in the persistency ratio in our group disability business remains strong. John, you also asked about unemployment and the impacts there. With regard to any signs of impacts from workforce reductions, we really aren't seeing any impacts on our business at this point in time.

[Caroline Feeney, Head of U.S. Businesses at Prudential]

While there clearly have been quite a few large layoff announcements that have generated their share of headlines, overall employment conditions continue to be strong. We're seeing tight labor markets with low current unemployment and a large number of job openings. This favorable employment trend is evident in the results of our group disability business, and our results reflect favorable macroeconomic tailwinds as well as strong execution on proactive claims management. Broadly, we view the risk of unemployment impacts to our business as low over the short to medium term. Also, I would mention, John, historically, increases in unemployment rates over a sustained period could drive an increase in disability claims. However, they would typically take six to 12 months to cycle into our results.

[John Barnidge, Managing Director at Piper Sandler]

Thank you very much. Another question around Japan. I believe they're lifting pandemic-related restrictions categorizing COVID like infectious disease or like the influenza. Can you talk about is that anticipated to improve or enhance distribution, or are there any product launches planned around that? Thank you.

[Andy Sullivan, Head of International Businesses at Prudential]

John, it's Andy. I'll take your question, but let me lift it up a bit and just talk about Japan sales overall. You know, our Japan operation is competitively advantaged with outstanding distribution, really strong product, and a great brand. We were very pleased in the with the quarter sales results, where we had a 4% improvement over the sequential quarter and a 10% improvement year-over-year. That success was well spread out as we experienced material year-over-year growth in the life planner, life consultant, and bank channels. To your question on product, our work on innovating our product designs continues as we drive to ensure that we meet the needs for retirement, wealth transfer, and unmet health and care needs.

[Andy Sullivan, Head of International Businesses at Prudential]

We also continue to drive our efforts around customer experience with a particular focus on strengthening the product and the offering and the experience to small to mid-size enterprises. You know, as far as the pandemic related effects and restrictions, we are seeing the COVID related sales challenges begin to subside. That being said, we are still seeing impacts from a recruiting and retention perspective. You know, if you look at everything in aggregate, we're quite optimistic about our ability to grow these businesses over time. As it always is, our priorities are to deliver strong value to our customers while achieving very, very healthy levels of profitability.

[John Barnidge, Managing Director at Piper Sandler]

Thank you very much.

[Operator]

Thank you. Next question today is coming from Suneet Kamath from Jefferies. Your line is now live.

[Suneet Kamath, Senior Research Analyst at Jefferies]

Thanks. I just wanted to go back to Charlie, an answer that you gave to a previous question on capital. I think it was Jimmy's question. I just wanted to confirm, are you committing to the $1 billion of buyback for the year? Or, it just felt like maybe there was a little bit of vagueness in your response. I just wanted to give you the opportunity to clarify.

[Charlie Lowrey, Chairman and CEO at Prudential]

No, thanks, Suneet. No, there's no vagueness in my response. To be clear, the board has authorized $1 billion of buybacks. We will evaluate that each quarter according to the macroeconomic conditions. There is no wavering per se, but we can't guarantee that we are going to. That would be a forward-looking statement which we can't make. No equivocation in our desire to execute on the program. Again, we can't make forward-looking statements.

[Suneet Kamath, Senior Research Analyst at Jefferies]

That's clear. Thanks for that. I guess, I don't know if it's for Rob or Ken. When you talk about on slide 11 about the mortgage loan portfolio and the process that you go through of evaluating at least, once a year, what is that process like? Is that an internal process where you use your team, or do you go externally and hire firms to kind of confirm or validate your approach? Just curious how you think about that.

[Rob Axel, Controller and Principal Accounting Officer at Prudential]

It's Rob, Suneet, and I'll take the question. It's a rolling process, first of all. It goes on throughout the year. It's not a single date, a point in time where we do appraisals. We have a very rigorous process around this, which is, we have a central team that sort of runs the appraisals on all the properties, and that's a combination of using outsourced appraisers in order to give us input into those appraisals. Ultimately, the appraisal is an internal appraisal. We use outsiders for inputs into the appraisal and even both from a data standpoint and from a valuation standpoint.

[Rob Axel, Controller and Principal Accounting Officer at Prudential]

The internal appraisal process is one that will look at all of that external data and valuations, but we put constraints around it. For instance, we have floors on cap rates that vary according to different property types that we use in our own internal valuations. That's resulted, as we've noted in the past, in a phenomena where our internal appraisals have generally been at the time at which we make them about 10% lower than what the external appraisals are that we've received in those processes. What you see when we quote our valuations, we're doing it based on that internal view informed by external appraisals, but very much an internal number with the level of conservatism that's applied on it.

[Suneet Kamath, Senior Research Analyst at Jefferies]

Makes sense. If I could sneak one more in just on Japan again. Higher rates in Japan is sort of a relatively new phenomenon. I'm just curious, one, is that changing kind of customer behavior in terms of products? Relatedly, I think maybe a quarter or so ago, you guys were having some issues with lapses in the foreign currency products. Just curious if there's an update there in terms of if that's continuing or if it's stabilized, that would be helpful. Thanks.

[Andy Sullivan, Head of International Businesses at Prudential]

Sure, it's Andy. I'll take the question. Let me start with the second half of your question. On surrenders. As we discussed last quarter, our elevated level of surrenders began to decelerate in December. And we've absolutely seen that continue into quarter one as the surrenders continued to subside all the way through the quarter. We're seeing that come back and subside pretty consistently. You know, as far as the higher rates, and obviously when we say that higher Japanese Yen rates, higher U.S. interest rates, you know, as I would always say, higher interest rates are good for Prudential, are good for our businesses, and they're good for our Japanese business.

[Andy Sullivan, Head of International Businesses at Prudential]

Obviously, that's from an earnings perspective. You know, higher yields give us greater flexibility in our product designs and allows us to deliver additional value to our customers while delivering additional value to our shareholders. So, you know, all in all, we see these as good trends and good things.

[Suneet Kamath, Senior Research Analyst at Jefferies]

Got it. Okay. Thank you, guys.

[Operator]

Thank you. Next question is coming from Tracy Benguigui from Barclays. Your line is now live.

[Tracy Benguigui, Director and Head of Insurance Equity Research at Barclays]

Thank you. Hey, what drove elevated mortality in the first quarter versus what you typically see? I guess I'm just curious if you saw an early flu season last quarter, that was a pull forward or not.

[Caroline Feeney, Head of U.S. Businesses at Prudential]

Sure, Tracy. It's Caroline, thanks for your question. The life business typically experiences elevated seasonal mortality in the first quarter, and that's consistent with what we see across the industry. Certainly this year was no exception, and along with the industry, we even saw some excess seasonal mortality, and that was due to the impact from COVID, flu, and also other respiratory illnesses. We also saw a higher incidence of large face value claims within our life business. And going forward, Tracy, we do believe that COVID has transitioned to an endemic state and therefore may still contribute to some amount of elevated mortality over the near to medium term.

[Caroline Feeney, Head of U.S. Businesses at Prudential]

I would just point out, however, that the overall trend is better than the two previous winters, reinforcing our belief that we will return to pre-pandemic mortality levels in the long term. Finally, even though we did see some unfavorable mortality experience in the quarter, our diverse mix of mortality and longevity businesses helps to mitigate some of that experience over longer term horizons. Tracy, you also asked about flu season last year, there was no evidence of an early flu season in our book last year.

[Tracy Benguigui, Director and Head of Insurance Equity Research at Barclays]

Very helpful. Appreciate that. My next question, I'd like to ask you about your office loan maturities in the next 24 months. Our review of stat filings, it looks like it's about $500 million. Can you speak to the feasibility of extensions? Do you feel like borrowers could either purchase an interest rate cap if the loan is floating or reduce the loan balance by putting in more equity, would the current debt yields allow that?

[Rob Axel, Controller and Principal Accounting Officer at Prudential]

Sure, Tracy, it's Rob. Actually a little over 10% of the portfolio matures in the next two years. If you think about it, just looking at a little further from the statistic that you quoted. Recall that our portfolio is almost exclusively a fixed rate portfolio as opposed to floating rate. When you look at the differentiation, the differences on the rollover of the portfolio, you're going to be looking at what's happened at the long end of the curve versus the short end of the curve, where obviously been more dramatic at the short end of the curve for those that have been borrowing on a floating rate basis.

[Rob Axel, Controller and Principal Accounting Officer at Prudential]

Because of the relatively low loan-to-values we have across our portfolio, and we gave the statistics on that, it's, you know, we're mid-50% on average LTV, that as we roll over loans. And incidentally, the office portfolio is very much in line with that overall portfolio statistic. As we're rolling over our loans, we're not particularly concerned about the sufficiency of equity in order to be able to refinance, even if it requires a higher level of loan and LTV from where we are.

[Tracy Benguigui, Director and Head of Insurance Equity Research at Barclays]

Thank you. Very helpful.

[Operator]

Thank you. Next question is coming from Michael Ward from Citi. Your line is now live.

[Michael Ward, VP and Senior Analyst of U.S. Insurance at Citi]

Thanks, guys, for squeezing me in. Maybe just on commercial real estate. I was wondering about the slide on the REIT debt. I was just wondering if you could expand on that and help us understand how it fits in the spectrum and how. If we should think about the credit risk there similar to, like, a direct commercial mortgage loan.

[Rob Axel, Controller and Principal Accounting Officer at Prudential]

It's Rob again. Mike, I would think about the REIT portfolio as more akin to our private placement portfolio than the mortgage portfolio. While mortgages are the underlying assets within the businesses, they're larger, more diversified businesses than what you're gonna find in a typical sort of single asset, mortgage loan. That REIT portfolio is about 2% of our assets. It's 97% investment grade. It's very well diversified by geography and property type. Like all of our private placements, it benefits from a strong package of covenants as a result of our direct origination capabilities and that loan portfolio is primarily, if not almost entirely a result of that direct origination within PGIM.

[Rob Axel, Controller and Principal Accounting Officer at Prudential]

Like we do across the rest of the private placement portfolio, we actually feel quite good about the strength of those loans, and the performance of them in a down cycle, vis-à-vis pub, you know, comparably rated public securities.

[Michael Ward, VP and Senior Analyst of U.S. Insurance at Citi]

Thanks, Rob. Somewhat relatedly, I believe PGIM is one of the bigger CLO managers. I was just wondering if you had any perspective or outlook for that asset class given broader credit risk.

[Rob Axel, Controller and Principal Accounting Officer at Prudential]

It's Rob. I'll take it again, and I'll defer to Andy if he wants to jump in on me to talk more specifically about PGIM. Mike, as we think about CLOs, first of all, from our own portfolio, we are solely a holder of AAA securities within the CLO, within the general account portfolio. We have some minuscule exposure below AAA as a result of being a CLO manager, PGIM being a CLO manager, where we do European CLOs. We need to have a retention there of a relatively modest amount, so it's inconsequential. Outside of that, it's exclusively a AAA portfolio. As we look at the CLO space, we find good value in the AAA and even the AA space.

[Rob Axel, Controller and Principal Accounting Officer at Prudential]

We're more conservative in our views as to what can happen in a stress environment, once you get into the single A, and obviously the BBB and subordinated tranches of that.

[Michael Ward, VP and Senior Analyst of U.S. Insurance at Citi]

Okay, thanks very much.

[Operator]

Thank you. We've reached the end of our question and answer session. I'd like to turn the floor back over to Mr. Lowrey for any further closing comments.

[Charlie Lowrey, Chairman and CEO at Prudential]

Okay. Thank you again for joining us today. I hope we demonstrated to you the progress we're making in transforming Prudential to deliver sustainable long-term growth and to meet the evolving needs of our customers. We're confident in our strategy and the strength of our company. For nearly 150 years, Prudential has been focused on creating value for our customers and other stakeholders, who we will continue to serve as we strive to be a global leader in expanding access to investing, insurance, and retirement security. Thank you again for joining us. Have a good day.

[Operator]

Thank you. That does conclude today's teleconference and webcast. Let me disconnect your lines at this time, and have a wonderful day. We thank you for your participation.

Participants

Executives

• Caroline Feeney, Head of U.S. Businesses

Analysts

• Alex Scott, Equity Research Analyst at Goldman Sachs
• Andy Sullivan, Head of International Businesses at Prudential
• Bob McLaughlin, VP of Investors Relations at Prudential
• Charlie Lowrey, Chairman and CEO at Prudential
• Elyse Greenspan, Managing Director at Wells Fargo
• Erik Bass, Equity Research Analyst at Autonomous Research
• Jimmy Bhullar, Equity Research Analyst at JPMorgan
• John Barnidge, Managing Director at Piper Sandler
• Ken Tanji, CFO at Prudential
• Michael Ward, VP and Senior Analyst of U.S. Insurance at Citi
• Rob Axel, Controller and Principal Accounting Officer at Prudential
• Rob Falzon, Vice Chairman at Prudential
• Ryan Krueger, Managing Director of Equity Research at KBW
• Suneet Kamath, Senior Research Analyst at Jefferies
• Tom Gallagher, Senior Managing Director at Evercore ISI
• Tracy Benguigui, Director and Head of Insurance Equity Research at Barclays