Prudential(US:PRU)2024-08-02 20:20Financial Performance - For Q2 2024, net income attributable to Prudential Financial, Inc. increased by $687 million to $1,198 million compared to Q2 2023[455]. - For the first six months of 2024, net income attributable to Prudential Financial, Inc. rose by $363 million to $2,336 million compared to the same period in 2023[456]. - Adjusted operating income for U.S. Businesses in Q2 2024 was $1,070 million, up from $956 million in Q2 2023, reflecting a favorable impact from annual reviews and updates of assumptions[464]. - The Retirement Strategies segment reported adjusted operating income of $1,036 million in Q2 2024, compared to $876 million in Q2 2023, driven by higher net investment spread results[468]. - The International Businesses segment's adjusted operating income decreased to $702 million in Q2 2024 from $784 million in Q2 2023, impacted by unfavorable foreign currency exchange rates[472]. - Realized investment gains for Q2 2024 were $128 million, a significant recovery from a loss of $757 million in Q2 2023[464]. - The company reported a net loss of $9.5 billion in total third-party flows for the three months ended June 30, 2024[524]. - Total revenues for PGIM reached $5,287 million in Q2 2024, compared to $3,856 million in Q2 2023, indicating a growth of 37.1%[537]. - Adjusted operating income for Q2 2024 was $206 million, up from $179 million in Q2 2023, reflecting a 15.1% increase[511]. Assets and Liabilities - Prudential Financial has approximately $1.482 trillion in assets under management as of June 30, 2024[427]. - The U.S. operations, excluding the Closed Block Division, have insurance liabilities and policyholder account balances totaling $217 billion as of June 30, 2024[442]. - Prudential's Japanese operations have insurance liabilities and policyholder account balances amounting to $148 billion as of June 30, 2024[450]. - The general account supporting U.S. Businesses has approximately $200 billion in fixed maturity securities and commercial mortgage loans, with an average portfolio yield of about 4.8%[440]. - The general account for Japanese operations includes approximately $140 billion in fixed maturity securities and commercial mortgage loans, with an average portfolio yield of around 2.9%[448]. - The company’s Japanese operations held $80.5 billion in USD-denominated assets supporting USD-denominated liabilities as of June 30, 2024[483]. Investment and Capital Management - Prudential made an initial equity investment of approximately $200 million for a 20% interest in Prismic Life Holding Company LP, which reinsures about $9 billion of reserves related to structured settlement annuities[431]. - The company anticipates annual principal payments and prepayments requiring reinvestment to be approximately 7.5% of the fixed maturity security and commercial mortgage loan portfolios through 2025 for U.S. operations[440]. - The company completed a reinsurance agreement for approximately $10 billion of account values in May 2023, enhancing its risk management strategy[536]. - The company entered into a reinsurance agreement with AuguStar for approximately $10 billion of account values of traditional variable annuity contracts with guaranteed living benefits[565]. - The company implemented a yen hedging strategy to mitigate equity volatility from foreign currency exchange rate movements[481]. Market and Economic Conditions - The company increased its long-term expectation for the 10-year U.S. Treasury rate and 10-year Japanese Government Bond yield by 25 basis points to 3.50% and 1.25%, respectively[503]. - The change in value of market risk benefits resulted in a $297 million unfavorable variance in Q2 2024 compared to a $16 million gain in Q2 2023[464]. - The impact of intercompany arrangements resulted in a net detriment of $6 million to consolidated revenues and adjusted operating income for the three months ended June 30, 2024[491]. Business Segments and Operations - Adjusted operating income for U.S. Businesses rose to $1,070 million in Q2 2024, compared to $956 million in Q2 2023, marking an increase of 11.9%[532]. - Revenues from Institutional Retirement Strategies surged to $4,041 million in Q2 2024, up from $2,737 million in Q2 2023, reflecting a 47.8% increase[537]. - Total Institutional Retirement Strategies ending net account value increased to $264,999 million as of June 30, 2024, compared to $258,533 million in 2023, reflecting a growth of 2.9%[552]. - Individual Retirement Strategies net account values rose to $123,899 million as of June 30, 2024, up from $114,713 million in 2023, marking an increase of 8.5%[558]. - The company reported a total of $4,011 million in additions to Institutional Retirement Strategies for the three months ended June 30, 2024, down from $5,686 million in 2023[552]. - The company reported a decrease in policyholders' benefits due to a decline in business in force, particularly in Japan, which was partially offset by growth in Brazil[612]. Sales and Premiums - Annualized new business premiums for the Individual Life, Group Insurance, and International Businesses segments are analyzed, reflecting current sales performance rather than revenues under U.S. GAAP[476]. - The total annualized new business premiums for the three months ended June 30, 2024, decreased by $11 million to $46 million, primarily due to lower sales in group disability and group life businesses[587]. - The total annualized new business premiums for the six months ended June 30, 2024, increased by $48 million to $424 million, driven by higher sales in group disability and group life businesses[588]. - Sales of Individual Retirement Strategies products for the three months ended June 30, 2024, reached $3,486 million, compared to $1,901 million in the same period of 2023, representing an increase of 83.5%[558]. - Total annualized new business premiums for Life Planner on a constant exchange rate basis increased to $257 million in Q2 2024 from $235 million in Q2 2023, reflecting a growth of 9.36%[619]. Expenses and Costs - Total expenses for Q2 2024 were $757 million, up from $670 million in Q2 2023, marking a 12.9% increase[509]. - Benefits and expenses for Institutional Retirement Strategies increased by $1,182 million in Q2 2024, primarily due to higher policyholders' benefits related to increased premiums[543]. - The benefits and expenses for the six months ended June 30, 2024, increased by $56 million, primarily due to higher general and administrative expenses and less favorable claims experience[585]. - The Group Insurance total benefits ratio for the three months ended June 30, 2024, was 78.7%, an improvement from 82.1% in the same period of 2023[577]. - Adjusted operating income for the second quarter of 2024 was $(87) million, a decrease of $28 million from $(59) million in 2023, primarily due to unfavorable impacts related to policyholder behavior assumptions[591].