Prudential Variable Annuity Customer Service – “Our fiscal third quarter results reflect the impact of market conditions, including changes in alternative investment returns and lower premium income, as well as an increase in the rate of COVID-19 hospital claims in Japan, partially offset by business growth. lower, including the benefit of rising interest rates.
We are focused on executing our transformation strategy to become a high growth and market sensitive company. We achieved our $750 million cost savings target one year ahead of schedule. We also continued to invest in the growth of our businesses and new products and solutions that meet the changing needs of our customers and expand access to insurance, investment and retirement security worldwide.
Prudential Variable Annuity Customer Service
Hopefully, we expect that higher interest rates will benefit our business financially over time. We have the financial strength to continue in the current economic and market environment. While we monitor developments, we will maintain our disciplined approach to capital management and restructuring.”
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NEWARK, N.J., November 1, 2022 – Prudential Financial, Inc. (NYSE: PRU) reported third quarter results today. Net loss attributable to Prudential Financial, Inc. was $284 million ($0.78 per common share) in the third quarter of 2022, compared to net income of $1.530 billion ($3.90 per common share) in the third quarter of 2021. Revenue was $803 million ($2.13 per common share) in the third quarter of 2022, compared to $1.487 billion ($3.78 per share) in the third quarter of 2021.
Adjusted operating income and adjusted book value are non-GAAP measures. An analysis of these measures, including their definitions, how they are useful to investors, and their limitations, is included later in this press release under “Non-GAAP Measures” and reconciliations to comparable GAAP measures. are given in the accompanying charts. this release.
The company’s ongoing activities include PGIM, US Enterprises, International Enterprises and Corporate among others. In the following business-level discussion, adjusted operating income refers to pre-tax results.
PGIM, the company’s global investment management business, reported adjusted operating income of $219 million in the third quarter of 2022, compared to $327 million in the year-ago period. This decrease primarily reflects lower asset management fees, driven by lower assets under management.
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PGIM’s assets under management of $1.206 trillion were down 20% from the previous quarter, due to higher interest rates and wider credit expansion, as well as lower equity markets. Third-party net income of $4.0 billion in the current quarter reflects $4.6 billion in retail income primarily from fixed income, partially offset by institutional inflows of $0.6 billion, primarily from real estate strategies. .
US companies reported adjusted operating income of $702 million in the third quarter of 2022, compared to $1.090 billion in the year-ago period. This decrease primarily reflects lower net investment distribution results, driven by lower investment income, and lower net income, partially offset by better underwriting results.
Pension Strategies, which consists of institutional pension strategies and individual pension strategies, reported adjusted operating income of $678 million in the third quarter of 2022, compared to $1.070 billion last year.
IQ Assurance reported a loss, based on adjusted operating income, of $44 million in the current quarter, compared with a loss of $55 million in the year-ago period. This reflects lower costs, partly due to lower revenues, driven by lower reference income.
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The global businesses, which comprise Life Planner and Gibraltar Life & Other, reported adjusted operating income of $430 million in the third quarter of 2022, compared to $887 million in the year-ago quarter. This decrease primarily reflects slightly better depreciation results and lower net investment distribution results, driven by lower variable investment income.
Company & Others reported a loss, based on adjusted operating income, of $325 million in the third quarter of 2022, compared with a loss of $460 million in the year-ago quarter. This lower loss reflects the absence of expenses related to the early repayment of debt in the prior quarter, gains from the sale of certain home office properties, favorable foreign exchange effects and higher income from pension and benefit plans. for the benefit of other employees.
Net loss for the current quarter included $1.464 billion in pre-tax realized investment losses and related charges and adjustments, largely reflecting the impact of higher interest rates, including $75 million in deferred taxes. pre-tax and debt-related losses, $100 million in pre-tax losses from various businesses, and $133 million in pre-tax gains related to market experience upgrades.
Net income for the prior quarter included $199 million in pre-tax losses related to the upgrade to market experiences, $98 million in pre-tax net investment gains and related charges and adjustments, and including $17 million of pre-tax impairment and credit-related losses, and $75 million of pre-tax earnings from divested and discontinued businesses.
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Members of Prudential’s senior management will walk on Wednesday, 2 November 2022, at 11:00 am. ET to host a conference call to discuss the company’s third quarter results for the investment community. The conference call will be webcast live on the company’s investor relations website at investor.prudential.com. Please check 15 minutes before if software needs to be downloaded. Institutional investors, analysts and other members of the professional financial community are invited to listen to the call and participate in the Q&A by calling one of the following numbers: (877) 407-8293 (ext.) or (201 ) 689-8349 (international) ). All others can join the conference call in listen-only mode by dialing one of the numbers above. A replay will also be available on the Investor Relations website through November 16. To access a replay by telephone from 3:00 p.m. ET on November 2 through November 16, call (877) 660-6853 (general) or (201) 612-7415 (international) and use replay code 13725142.
Certain statements included in this release, including those regarding our strategy to become a high-growth and small market-sensitive company, our approach to capital management and restructuring, the expected impact of increases interest rate environment and other business strategies, forward-looking statements Forward-looking statements within the meaning of the U.S. Securities and Exchange Commission Reform Act of 1995. Forward-looking statements are made by based on management’s current expectations and beliefs regarding future developments and their potential impact on Prudential Financial, Inc. and his descendants. The following payment of shares of Prudential Financial, Inc. Actual results may differ, potentially materially, from the expectations or estimates reflected in the forward-looking statements. Certain important factors that could cause actual results to differ, possibly materially, from the expectations or estimates contained in the forward-looking statements can be found in “Risk Factors” and “Forward-Looking Statements”. ” incorporated by Prudential Financial, Inc. s Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q. The forward-looking statements contained herein depend, among other things, on the risk that we will not be able to execute our strategies as a result of market or competitive conditions or other factors. The following payment of shares of Prudential Financial, Inc. does not undertake to update any specific forward-looking statement contained in this document.
Adjusted operating income and adjusted book value are non-GAAP measures. Reconciliations to the most directly comparable GAAP measures are included in this release.
We believe that our use of these non-GAAP measures helps investors understand and evaluate the company’s performance and financial position. The presentation of adjusted operating income as we measure management objectives improves the understanding of operating results by reflecting the results of ongoing operations and the underlying profitability of our businesses. Changes in the profitability of our businesses can be clearly seen without the various effects of the items mentioned below. Adjusted book value improves understanding of our financial position by providing a net measure that is primarily attributable to our business activities, separate from the portion affected by capital and money market conditions, and accounting effects related to insurance obligations. . generally not marked to market and supporting investments marked to market in other comprehensive income under GAAP. However, these non-GAAP measures are not substitutes for income and equity determined in accordance with GAAP, and adjustments made to these measures are important to understanding our overall results of operations and financial position. The tables accompanying this release provide reconciliations of non-GAAP measures to corresponding measures calculated using GAAP. Additional historical information about our financial performance is available on our website at investor.prudential.com.
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Adjusted operating income is a non-GAAP measure that a company uses to evaluate segment performance and to allocate resources. Adjusted operating income excludes “Investment gains (losses), net,” as adjusted, and related expenses and adjustments. A significant portion of realized investment gains and losses are impairments and losses related to credit and interest rate related gains and losses. Impairments and losses resulting from the sale of credit-impaired securities, the timing of which is often dependent on market credit cycles, may vary significantly over time. The timing of other sales that may result in gains or losses, such as gains or losses related to interest rates, is largely dependent on our decision and is influenced by market opportunities as well as tax and business profile.
Recognized investment gains (losses) in certain businesses for which those gains (losses)
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