Q2 2024 Prudential Financial Inc Earnings Call Transcript
Key Points
- Prudential Financial Inc (PRU) reported a 67% increase in retirement strategies sales in the first half of the year, driven by robust risk and longevity risk transfer and nearly doubling individual annuity sales.
- The company maintained a strong financial position with more than $4 billion in highly liquid assets at the end of the second quarter.
- PGIM, the global asset management business, saw a 35% increase in capital deployment in the second quarter compared to the previous year, benefiting from the acquisition of Deer Path Capital.
- Group insurance sales were up 13% and individual life sales increased by 7% year-to-date, reflecting expanded distribution and product diversification.
- Adjusted operating return on equity improved to 13.5%, nearly 1.5 percentage points higher than the prior year, indicating strong business performance and operational efficiencies.
- Variable investment income was below expectations by $90 million in the second quarter, driven by lower real estate returns.
- Underwriting experience was below expectations by $10 million in the second quarter.
- Institutional outflows of $8.9 billion in PGIM were primarily in fixed income, driven by two large clients.
- Expenses in the second quarter were lower than expected, reflecting a reduction in legal reserves and the timing of expenses, which may not be sustainable.
- The company continues to face challenges in its legacy traditional variable annuity fee income as it pivots to less market-sensitive products.
Please stand by for streaming text.
Welcome to Prudential's quarterly earnings conference call. (Operator Instructions) As a reminder, today's call is being recorded. I'll now turn the call over to Mr. Bob McLaughlin. Please go ahead.
Good morning and thank you for joining our call. On today's call are Charlie Lowrey, Chairman and CEO; Rob Falzon, Vice Chairman; Andy Sullivan, Head of the International Businesses at PGM, our global investment manager; Caroline Feeney, the Head of U.S. businesses, Yanela Frias, Chief Financial Office, and Rob Axel Controller and Principal occur counting officer.
We will start with prepared comments by Charlie, Rob, and Yanela, our and then we will take your questions. Today's discussion may include forward-looking statements. It is possible that actual results may differ materially from the predictions we make today. In addition, our presentation includes references to non-GAAP measures for a reconciliation of such measures to
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