10-K 0001137774-26-000048 (2026-02-12) vs 10-K 0001137774-25-000044 (2025-02-13)
| Section | Compared text | Words now | Changed |
|---|
| Risk Factors | Item 1A | 10,777 |
15.4% |
| MD&A | Item 7 | 39,714 |
23.6% |
| Legal Proceedings | Item 3, via Note 25 – COMMITMENTS AND CONTINGENT LIABILITIES | 4,360 |
28.8% |
| Accounting Policies | Item 8, Note 2 – SIGNIFICANT ACCOUNTING POLICIES AND PRONOUNCEMENTS | 13,480 |
15.4% |
The redline: what was cut and what was added
In each section, the paragraph that changed most, marked against last year's 10-K:
cut words struck through, new words highlighted and underlined.
MD&A 238 words changed in this paragraph; it is 45% similar to last year's version.
We have In December 2025, the Company entered into agreements an agreement with an external counterparties providing counterparty that allows for the issuance by PICA of up to $500 million in principal amount of surplus notes by our captive reinsurers in return for the receipt a corresponding amount of credit-linked notes (“Credit-Linked Note Structures”). Under the agreements, the captive receives in exchange for the surplus notes one or more credit-linked notes issued by a special-purpose affiliate wholly owned subsidiary of the Company with an aggregate Company. As of December 31, 2025, $287 million in principal amount equal of these surplus notes and credit-linked notes were outstanding. The PICA surplus notes are subordinated to policyholder obligations, and the payment of principal and interest on the surplus notes outstanding. The captive can only be made with prior insurance regulatory approval. PICA holds the these credit-linked notes as assets supporting Regulation XXX or Guideline AXXX non-economic reserves, as applicable. The captive statutory requirements and can redeem the principal amount of the outstanding credit-linked notes for cash upon the occurrence of, and in an amount necessary to remedy, a of specified liquidity stress event events affecting the captive. PICA. Under the agreements, the external counterparties have counterparty has agreed to fund any such payments under the these credit-linked notes in return for the receipt of fees. To date, no such payments under the these credit-linked notes have been required. Under these transactions, because valid rights of set-off exist, interest and principal payments on the The surplus notes and on the credit-linked notes eliminate upon consolidation and are settled on a net basis, and the surplus notes are not reflected in the Company’s total consolidated borrowings on a net basis. As a result of reinsurance transactions executed with Somerset Re and Wilton Re, we have eliminated Credit-Linked Note Structures supporting Guideline AXXX for our remaining business. In November, we restructured a series of internal captive reinsurance arrangements resulting in the consolidation of Credit-Linked Note Structures supporting Regulation XXX. financial statements.
Source: Item 7, 10-K 0001137774-26-000048 vs Item 7, 10-K 0001137774-25-000044
Risk Factors 170 words changed in this paragraph; it is 70% similar to last year's version.
The development and adoption of artificial intelligence ("AI"), AI, including generative artificial intelligence (“Generative AI”), AI and agentic AI, and its use and anticipated use by us or by third parties on whom we rely, may increase the operational risks discussed above or create new operational risks that we are not currently anticipating. AI technologies offer potential benefits in areas such as customer service personalization and process automation, and we expect to use AI and Generative AI to help deliver products and services and support critical functions. We also expect third parties on whom we rely to do the same. There are significant risks involved in developing and deploying AI and there can be no assurance that the usage of AI will enhance our products or services or be beneficial to our business, including our efficiency or profitability. AI and Generative AI may be misused by us or by such third parties, and that risk is or the models or datasets on which the models are trained may be flawed or otherwise may function in an unexpected manner. Such risks are increased by the relative newness of the technology, the speed at which it is being adopted, and the lack of developing and evolving laws, regulations or standards governing its use. Such misuse See “Business — Regulation — Artificial Intelligence” for a discussion of the applicable laws and regulations relating to the use of AI. Misuse of AI or external data, failure to comply with regulatory requirements, or conflicting interpretations of requirements could expose the Company us to legal or regulatory risk, subject us to adverse regulatory examinations or audits, damage customer relationships or cause reputational harm. Further, our ability to continue to develop and efficiently deploy AI technologies depends on access to specific third-party equipment and other physical infrastructure, such as processing hardware and network capacity, as to which we cannot control the availability or pricing, especially in a highly competitive environment. Our competitors may also adopt AI more quickly or more effectively than we do, which could cause competitive harm. Because AI technology is so new, some of the potential risks of AI are currently unknowable; however, specific risks relating to AI could include, among others:
Source: Item 1A, 10-K 0001137774-26-000048 vs Item 1A, 10-K 0001137774-25-000044
Legal Proceedings 164 words changed in this paragraph; it is 77% similar to last year's version.
In November 2019, a putative class action complaint entitled Cho v. The Prudential Insurance Company of America, et. al., was filed in the United States District Court for the District of New Jersey. The Complaint purports to be brought on behalf of participants in the Prudential Employee Savings Plan (the “Plan”) and (i) alleges that defendants failed to fulfill their fiduciary obligations under the Employee Retirement Income Security Act of 1974, in the administration, management and operation of the Plan, including engaging in prohibited transactions; and (ii) seeks declaratory, injunctive and equitable relief, and unspecified damages including interest, attorneys’ fees and costs. In January 2020, defendants filed a motion to dismiss the complaint. In September 2020, plaintiff filed an amended complaint and added as individual defendants certain PFI officers and current and former members of the Company’s Administrative Committee and Investment Oversight Committee. In December 2020, defendants filed a motion to dismiss the amended complaint. In September 2021, the court granted defendants’ motion to dismiss the amended complaint without prejudice. In October 2021, plaintiff filed a second amended complaint asserting claims against defendants under the Employee Retirement Income Security Act of 1974 for breach of fiduciary duty, prohibited transactions and failure to monitor fiduciaries. The second amended complaint seeks declaratory, injunctive and equitable relief, unspecified damages, attorneys’ fees and costs. In December 2021, defendants filed a motion to dismiss the second amended complaint. In August 2022, the court: (i) dismissed, with prejudice, the breach of the fiduciary duty of loyalty and prohibited transaction claims based on the inclusion of Prudential-affiliated funds in the Plan’s investment options; (ii) dismissed, without prejudice, the breach of fiduciary duty claims based on certain alleged underperforming Plan funds; and (iii) denied the motion to dismiss plaintiffs’ claims for breach of the fiduciary duties of prudence and to monitor other fiduciaries, based on alleged delays in removing other alleged underperforming funds. In September 2022, plaintiff filed a third amended complaint asserting claims for breach of duty of prudence and to monitor fiduciaries, and in October 2022, defendants filed their answer to the third amended complaint. In May 2023, plaintiff filed a motion for class certification. In August 2023, the court issued an Order granting plaintiff’s class certification motion. In January 2024, by an October 2023 court Order, defendants submitted to plaintiffs their summary judgment brief. In December 2024, the court issued an order granting Prudential’s motion for summary judgment. In January 2025, plaintiff filed a Notice of Appeal to the Third Circuit. In January 2026, the Third Circuit Court of Appeals affirmed the District Court's order granting defendant’s summary judgment motion.
Source: Item 3, via Note 25 – COMMITMENTS AND CONTINGENT LIABILITIES, 10-K 0001137774-26-000048 vs Item 3, via Note 25 – COMMITMENTS AND CONTINGENT LIABILITIES, 10-K 0001137774-25-000044
Accounting Policies 153 words changed in this paragraph; it is 62% similar to last year's version.
The Company’s liability for future policy benefits also includes net liabilities for guaranteed benefits related to certain long-duration life contracts, such as no-lapse guarantee contract features (Additional Insurance Reserves or “AIR” liability), for which a liability is established when associated assessments are recognized (which include investment margin on policyholders’ account balances deposited to fixed and indexed funds and all policy charges including charges for administration, mortality, expense, surrender and other charges). This liability is established using current best estimate assumptions and is based on the ratio of the present value of total expected excess payments (i.e., payments in excess of account value) over the life of the contract divided by the present value of total expected assessments (i.e., benefit ratio). Any The liability equals the current benefit ratio multiplied by cumulative assessments recognized to date, plus interest, less cumulative excess payments to date. The liability does not necessarily reflect the full policyholder obligation the Company expects to pay at the conclusion of the contract since a portion of that excess payment would be funded by assessments received in the future and would be recognized in the liability at that time. The reserves are subject to adjustments based on annual reviews of assumptions and quarterly adjustments for experience as described below, including market performance. These adjustments reflect the impact on the benefit ratio of using actual historical experience from the issuance date to this liability related the balance sheet date plus updated estimates of future experience. The updated benefit ratio is then applied to net unrealized gains (losses) on securities classified as available-for-sale are included in AOCI. all prior periods’ assessments to derive an adjustment to the
Source: Item 8, Note 2 – SIGNIFICANT ACCOUNTING POLICIES AND PRONOUNCEMENTS, 10-K 0001137774-26-000048 vs Item 8, Note 2 – SIGNIFICANT ACCOUNTING POLICIES AND PRONOUNCEMENTS, 10-K 0001137774-25-000044
Every change, by type
Sentences and paragraphs of PRU's Risk Factors and MD&A, 10-K 2026-02-12 against 10-K 2025-02-13.
Each links to the text at sec.gov.
Quiet changes are sentences kept from last year with one to four words changed, at least one of them a hedge, a modal or a qualifier
(may, could, will, not, significant, material…). A year or date rolling forward is not counted.
The full word list
adverse, adversely, all, although, anticipate, anticipates, any, approximately, believe, believes, can, cannot, certain, could, expect, expects, generally, however, if, intend, intends, largely, likely, many, material, materially, may, might, most, must, never, no, not, possible, primarily, probable, should, significant, significantly, some, substantial, substantially, unlikely, will, would
AddedRisk Factors
liabilities and reestablish or strengthen reserves and capital, which could reduce capital flexibility. The magnitude of the losses (e.g., replacement costs) will depend on current market conditions, the complexity of the transaction, and the time required to restructure or replace the transaction. Losses will likely be higher under stressed conditions.
Read it in 10-K 2026-02-12 at sec.gov ↗
AddedRisk Factors
Our ability to reprice products is limited and may not compensate for deviations from our expected insurance assumptions. Although some of our products permit us to increase premiums or adjust other charges and credits during the life
Read it in 10-K 2026-02-12 at sec.gov ↗
AddedRisk Factors
The types of operational risks that may impact the Company include, among others, the following:
Read it in 10-K 2026-02-12 at sec.gov ↗
AddedRisk Factors
The potential adverse impacts to our business, results of operations, financial condition or liquidity due to such operational risks include, among others, the following:
Read it in 10-K 2026-02-12 at sec.gov ↗
AddedRisk Factors
•Costs and security risks associated with maintaining, upgrading, or replacing our information technology, including legacy systems, could exceed our expectations or we may be required to dedicate additional resources to these activities.
Read it in 10-K 2026-02-12 at sec.gov ↗
AddedRisk Factors
•Planned system upgrades may not be successful or operate as intended, may take longer than anticipated, may exceed their budget, or create or exacerbate previously unknown security vulnerabilities.
Read it in 10-K 2026-02-12 at sec.gov ↗
AddedRisk Factors
The risks identified above could be exacerbated by agentic AI, which, acting without supervision, could take actions harmful to the Company or our customers.
Read it in 10-K 2026-02-12 at sec.gov ↗
AddedRisk Factors
have insufficient recourse against such third parties from which such breaches originate. We have experienced cybersecurity events resulting in, among other things, the compromise of personal and confidential information, including sensitive health information, of our employees, customers and other stakeholders.
Read it in 10-K 2026-02-12 at sec.gov ↗
AddedRisk Factors
Furthermore, there has been increased scrutiny as well as enacted and proposed additional laws and regulations, including from state regulators, regarding the use of personal and confidential information. These laws and regulations are increasing in complexity and number, change frequently, and may be subject to interpretation by different regulators and courts. See “Business—Regulation—Privacy and Cybersecurity Regulation” for a discussion of the applicable laws and regulations (including those requiring notice, disclosure or remediation) relating to cybersecurity events.
Read it in 10-K 2026-02-12 at sec.gov ↗
AddedRisk Factors
business and be subject to regulatory action, penalties or damages. Our business may also be harmed if captive/affiliate distributors engage in inappropriate conduct in connection with the sale of third-party products.
Read it in 10-K 2026-02-12 at sec.gov ↗
AddedRisk Factors
Our ability to successfully execute on strategic transactions is subject to risks. We have in the past considered and continue to consider a range of strategic transactions, which could include acquisitions, joint venture, divestitures, spin-offs, reinsurance and other corporate transactions. Our strategy for long-term growth, productivity and profitability depends, in part, on our ability to successfully execute on and realize the expected benefits from these types of transactions. Any of these types of transactions could be material, be difficult to implement, disrupt our business, or change our business profile, focus or strategy significantly.
Read it in 10-K 2026-02-12 at sec.gov ↗
AddedRisk Factors
•Current Market Conditions. The imposition of tariffs and retaliatory actions could result in, among other things, rising interest rates, significant equity market declines, stagnant economic growth and high inflation, which could adversely impact our liquidity and capital positions, cash flows, results of operations, and financial position. For example, the combination of stagnant economic growth and high inflation would increase investment risk, including the underperformance of investments in more leveraged companies or companies exposed to weaker consumers. Also, the statutory capital of certain of our insurance subsidiaries could be negatively affected by such things as increased reserve requirements, which could be caused by equity market declines, and asymmetrical and non-economic statutory accounting impacts from rising rates.
Read it in 10-K 2026-02-12 at sec.gov ↗
RemovedRisk Factors
adversely affect our profitability, financial condition and cash flows, as well as increase the volatility of our results of operations under U.S. GAAP. In the short-term, solvency margins in our Japan businesses can also be impacted by fluctuations in exchange rates.
Read it in 10-K 2025-02-13 at sec.gov ↗
RemovedRisk Factors
Our operations are exposed to the risk of loss resulting from inadequate or failed processes or systems, human error or misconduct, and as a result of external events.
Read it in 10-K 2025-02-13 at sec.gov ↗
RemovedRisk Factors
An operational risk failure may result in one or more actual or potential impacts to the Company. Operational risk may be elevated as a result of significant changes to how the Company operates, including organizational changes and transformation efforts underway that increase execution risk. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Overview” for additional information regarding our business transformation efforts.
Read it in 10-K 2025-02-13 at sec.gov ↗
RemovedRisk Factors
such as processing hardware and network capacity, as to which we cannot control the availability or pricing, especially in a highly competitive environment. Our competitors may also adopt AI or Generative AI more quickly or more effectively than we do, which could cause competitive harm. Because the Generative AI technology is so new, some of the potential risks of Generative AI are currently unknowable; however, specific risks relating to AI and Generative AI could include, among others:
Read it in 10-K 2025-02-13 at sec.gov ↗
RewordedRisk Factors
Our mitigation efforts with respect to interest rate risk are primarily focused on maintaining an investment portfolio with diversified maturities that has a The portfolio’s key rate duration profile that is designed to be approximately equal to the key rate duration profile that of our liability and surplus benchmarks; benchmark; however, these benchmarks are based on estimates of the liability cash flow profiles which are complex and could be inaccurate, especially when markets are volatile.
Read it in 10-K 2026-02-12 at sec.gov ↗
RewordedRisk Factors
These systems, and any available backups, have and may fail to operate properly or become disabled as a result of events or circumstances wholly or partly beyond our control. control, including cyber-attacks, denial of service, viruses or other malicious activities, power outages, hardware or software malfunctions, defects or degradation, lack of proper maintenance, human error or misuse, and similar events.
Read it in 10-K 2026-02-12 at sec.gov ↗
RewordedRisk Factors
Such misuse Misuse of AI or external data, failure to comply with regulatory requirements, or conflicting interpretations of requirements could expose the Company us to legal or regulatory risk, subject us to adverse regulatory examinations or audits, damage customer relationships or cause reputational harm.
Read it in 10-K 2026-02-12 at sec.gov ↗
RewordedRisk Factors
In each case, an increase in claims, or an increase in reserves due to revised morbidity assumptions can have an immediate adverse impact on our results of operations and financial condition; however, economically condition, and the economic impact of morbidity risk for products that pay out for ongoing illness or disability generally emerges over the longer term can be long-term as the morbidity claims are paid.
Read it in 10-K 2026-02-12 at sec.gov ↗
RewordedRisk Factors
Some product liabilities are expected to have only modest risk related to interest rates because cash flows can be matched by available assets; however, other For example, some product liabilities generate long-term cash flows (i.e., 30 years or more), resulting in significant interest rate risk, since these cash flows cannot be matched by assets for sale in the marketplace, exposing the Company to future reinvestment risk.
Read it in 10-K 2026-02-12 at sec.gov ↗
RewordedRisk Factors
We include public equity and alternative assets (including private equity, hedge funds and real estate) in our portfolio constructions, as and these asset classes can provide returns over longer periods investments have varying degrees of time, aligning with the long-term nature of certain of our liabilities. price transparency.
Read it in 10-K 2026-02-12 at sec.gov ↗
RewordedRisk Factors
An increase in reserves due to revised assumptions has could have an immediate adverse impact on our results of operations and financial condition; however, from an condition, and the economic or cash flow perspective, the impact is generally long term can be long-term as the excess outflow is paid over time. paid.
Read it in 10-K 2026-02-12 at sec.gov ↗
RewordedRisk Factors
Financial deterioration of the obligor increases the risk of default and may increase the capital charges required under such regimes as the NAIC RBC, the FSA SMR or other constructs to hold the investment and in turn, regulatory frameworks we are subject to, potentially limit limiting our overall capital flexibility.
Read it in 10-K 2026-02-12 at sec.gov ↗
RewordedRisk Factors
AI and Generative AI may be misused by us or by such third parties, and that risk is Such risks are increased by the relative newness of the technology, the speed at which it is being adopted, and the lack of developing and evolving laws, regulations or standards governing its use.
Read it in 10-K 2026-02-12 at sec.gov ↗
RewordedRisk Factors
We use a variety of hedging Hedging and risk management strategies, including product features, that we use to mitigate these risks in part and we may periodically change our strategies over time. not be fully effective.
Read it in 10-K 2026-02-12 at sec.gov ↗
RewordedRisk Factors
Further, our ability to continue to develop and efficiently deploy AI technologies depends on access to specific third-party equipment and other physical infrastructure, such as processing hardware and network capacity, as to which we cannot control the availability or pricing, especially in a highly competitive environment.
Read it in 10-K 2026-02-12 at sec.gov ↗
RewordedRisk Factors
While some Policyholder behavior is driven by factors outside of our control, including macro factors such as market movements, policyholder behavior at a fundamental level is driven primarily as well as by policyholders’ individual needs, which may differ significantly from product to product depending on many factors including the features offered, the approach taken to market each product, and competitor pricing.
Read it in 10-K 2026-02-12 at sec.gov ↗
Quiet changesRisk Factors
The following items are examples of other factors which could have a meaningful an adverse impact on our business.
Read it in 10-K 2026-02-12 at sec.gov ↗
AddedMD&A
The purpose of this Management’s Discussion and Analysis of Financial Condition and Results of Operations is to provide readers with a foundational understanding of our Company, our consolidated financial statements, and the significant internal and external drivers of our results. The discussion of financial results within is focused on adjusted operating income, which is the Company’s segment-level measure of performance, and provides readers with period-over-period analysis of operating results and significant drivers. In addition to discussing our detailed segment results of operations, we have also provided supplemental information that we believe assists with a greater understanding of our overall financial results.
Read it in 10-K 2026-02-12 at sec.gov ↗
AddedMD&A
•“Executive Summary” provides an overview of the Company and its operations, along with recent significant events that have impacted our organizational structure or financial results. This section also provides management’s outlook for each respective business segment.
Read it in 10-K 2026-02-12 at sec.gov ↗
AddedMD&A
•“External and Economic Factors” discusses industry trends, including the economic environment and demographics for each of our businesses, and includes a discussion of how the impact of potential changes in either interest rates or foreign currency exchange rates may impact our overall operations and financial position.
Read it in 10-K 2026-02-12 at sec.gov ↗
AddedMD&A
•“Liquidity and Capital Resources” provides information about our liquidity and capital positions, including any significant actions that have impacted, or are expected to impact, these positions. Information is also provided on our insurance companies’ regulatory capital requirements, the sources and uses of our holding company’s cash, and additional information about financing activities of the Company.
Read it in 10-K 2026-02-12 at sec.gov ↗
AddedMD&A
•“Ratings” provides information on the ratings for Prudential Financial and certain of its subsidiaries as of the date of this filing.
Read it in 10-K 2026-02-12 at sec.gov ↗
AddedMD&A
•“General Account Investments” provides information about the investment objectives, strategies and overall portfolio composition of the general account that supports the liabilities of our insurance companies. Investment results are presented separately for our U.S.-based and Japanese-based operations, our Closed Block division, and our Funds Withheld portfolios, which support liabilities relating to reinsurance agreements where the economic benefits and associated investment risk ultimately inure to the reinsurer. This section should be read in conjunction with Note 3 to the Consolidated Financial Statements.
Read it in 10-K 2026-02-12 at sec.gov ↗
AddedMD&A
•“Valuation of Assets and Liabilities” provides additional breakout of the fair value of assets and liabilities for Prudential Financial Inc., excluding those held in the Closed Block division and Funds Withheld portfolios, and separately for the Closed Block division and Funds Withheld portfolios. This section should be read in conjunction with Note 6 to the Consolidated Financial Statements.
Read it in 10-K 2026-02-12 at sec.gov ↗
AddedMD&A
•“Income Taxes” provides information about our effective tax rate and unrecognized tax benefits. This section should be read in conjunction with Note 17 to the Consolidated Financial Statements.
Read it in 10-K 2026-02-12 at sec.gov ↗
AddedMD&A
•“Risk Management” provides detail about our risk governance structure and the framework for evaluating the risks across the Company. This section should be read in conjunction with “Item 1A. Risk Factors.”
Read it in 10-K 2026-02-12 at sec.gov ↗
AddedMD&A
Effective in the first quarter of 2025, consistent with changes to the Company’s internal management structure, our International Businesses are reflected as a single operating and reportable segment, which is how the chief operating decision maker (“CODM”) now assesses its performance and allocates resources. Prior to the first quarter of 2025, our International Businesses consisted of the Life Planner and Gibraltar Life and Other operating segments, each of which was a reportable segment under U.S. GAAP. The change has been applied retrospectively and did not have any impact on the Company’s Consolidated Financial Statements contained herein or to any previously issued financial statements.
Read it in 10-K 2026-02-12 at sec.gov ↗
AddedMD&A
In February 2026, in conjunction with our previously announced internal investigation into employee misconduct in Japan, we voluntarily suspended new sales activity at Prudential of Japan for a 90-day period, commencing February 9, 2026. See “—Litigation and Regulatory Matters—Regulatory” within Note 25 to the Consolidated Financial Statements and “Results of Operations by Segment—International Businesses” below for additional information.
Read it in 10-K 2026-02-12 at sec.gov ↗
AddedMD&A
We feel confident about our prospects for the future based on the foundation of our integrated and complementary businesses. We are focused on evolving our strategy to transform our market-leading businesses to become a higher growth, more capital efficient company. We plan to continue investing in growth businesses and markets around the world, delivering industry-leading customer and client experiences, and creating the next generation of financial solutions. The businesses drive our company’s performance, value and growth, and are organized around the markets we serve with solutions in investing, insurance, and retirement security.
Read it in 10-K 2026-02-12 at sec.gov ↗
RemovedMD&A
During the fourth quarter of 2024, the Company identified an immaterial error in the application of adjusted operating income, which resulted in an overstatement thereof for indexed variable and fixed annuity products within the Retirement Strategies segment in the first three quarters of 2024 and each of the four quarters of 2023. As a result, the Company has voluntarily revised its historical adjusted operating income for the relevant periods, resulting in decreases in pre-tax adjusted
Read it in 10-K 2025-02-13 at sec.gov ↗
RemovedMD&A
operating income of $149 million (unaudited) for the nine months ended September 30, 2024, and $55 million for the year ended December 31, 2023. These revisions had no impact to “Net income (loss)” for any period as determined in accordance with GAAP. See Note 23 for additional information regarding adjusted operating income.
Read it in 10-K 2025-02-13 at sec.gov ↗
RemovedMD&A
We feel confident about our prospects for the future based on the foundation of our integrated and complementary businesses. We plan to continue our transformation towards becoming less market-sensitive, including efforts to further de-risk, such as through reinsurance transactions, and to deliver sustainable long-term growth, including investing in products and solutions that meet the evolving needs of our customers. Our plan remains to allocate capital across the businesses with the intention of increasing the earnings contribution from our higher-growth businesses and reducing capital allocated to lower-growth, more capital-intensive businesses.
Read it in 10-K 2025-02-13 at sec.gov ↗
RemovedMD&A
See below for a discussion of the current interest rate environment and its impact to net investment spread in our U.S. and Japanese operations along with the composition of their insurance liabilities and policyholder account balances.
Read it in 10-K 2025-02-13 at sec.gov ↗
RemovedMD&A
While interest rates in the U.S. have experienced a sustained period of historically low levels, rates increased throughout 2022 and have continued to sustain higher levels throughout 2024, and our average reinvestment yield is generally now exceeding our current average portfolio yield.
Read it in 10-K 2025-02-13 at sec.gov ↗
RemovedMD&A
The portion of the general account supporting our U.S. Businesses and our Corporate and Other operations has approximately $205 billion of fixed maturity securities and commercial mortgage loans (based on net carrying value) as of December 31, 2024, with an average portfolio yield of approximately 4.9%. For this portion of the general account attributable to these operations, we estimate annual principal payments and prepayments that we would be required to reinvest to be approximately 7.4% of the fixed maturity security and commercial mortgage loan portfolios through 2026.
Read it in 10-K 2025-02-13 at sec.gov ↗
RemovedMD&A
Included in the $205 billion of fixed maturity securities and commercial mortgage loans are approximately $170 billion that are subject to call or redemption features at the issuer’s option and have a weighted average interest rate of approximately 5%. Of this $170 billion, approximately 55% contain provisions for prepayment premiums. Future operating results will be impacted by (i) the reinvestment of scheduled payments or prepayments (not subject to a prepayment fee) at different rates compared to the current portfolio yield, including in some cases at rates below those guaranteed under our insurance contracts, and (ii) our utilization of other asset/liability management strategies, as described above, in order to maintain favorable net investment spread.
Read it in 10-K 2025-02-13 at sec.gov ↗
RemovedMD&A
As of December 31, 2024 (in billions) Long-duration insurance products with fixed and guaranteed terms $ 194 Contracts with adjustable crediting rates subject to guaranteed minimums 37 Participating contracts where investment income risk ultimately accrues to contractholders 1 Total $ 232
Read it in 10-K 2025-02-13 at sec.gov ↗
RemovedMD&A
The $194 billion above relates to long-duration products such as group annuities, structured settlements and other insurance products that have fixed and guaranteed terms. We seek to manage the impact of changes in interest rates on these contracts through asset/liability management, as discussed above.
Read it in 10-K 2025-02-13 at sec.gov ↗
RemovedMD&A
The $37 billion above relates to contracts with crediting rates that may be adjusted over the life of the contract, subject to guaranteed minimums. Although we may have the ability to lower crediting rates for those contracts above guaranteed minimums, our willingness to do so may be limited by competitive pressures. For additional information regarding contracts with adjustable crediting rates subject to guaranteed minimums, see Note 13 to the Consolidated Financial Statements.
Read it in 10-K 2025-02-13 at sec.gov ↗
RemovedMD&A
The remaining $1 billion of insurance liabilities and policyholder account balances in these operations relates to participating contracts for which the investment income risk is expected to ultimately accrue to contractholders. The crediting rates for these contracts are periodically adjusted based on the return earned on the related assets.
Read it in 10-K 2025-02-13 at sec.gov ↗
RemovedMD&A
Japan has experienced a low interest rate environment for many years, during which the Bank of Japan’s monetary policy has resulted in even lower and, at times, negative yields for certain tenors of government bonds; however, recent actions by the Bank of Japan have resulted in an increase in interest rates in 2024.
Read it in 10-K 2025-02-13 at sec.gov ↗
RewordedMD&A
Fixed maturities 826 896 0 0 0 0 0 Equity securities 2,881 3,946 0 0 0 0 0 All other(2) 0 0 0 0 0 0 Subtotal 3,707 4,842 0 0 0 0 0 Market risk benefit assets 2,331 2,331 2,330 2,330 0 0 0 0 Fixed maturities, trading 4,151 467 647 15 7,732 1,504 5,239 480 581 17 9,049 1,816 Equity securities 7,776 479 1,641 39 9,379 577 1,593 49 0 0 Commercial mortgage and other loans 469 793 0 0 0 233 233 263 263 Other invested assets(3) 2,526 952 2 2,728 1,087 1 25 1 31 0 Short-term investments 8,091 383 460 76 44 2 5,551 1 158 0 72 0 Cash equivalents 10,144 11,685 0 346 737 0 201 416 0 Reinsurance recoverables and deposit receivables (75) (50) 0 0 0 924 613 Other assets 0 0 0 0 0 0 623 367 Separate account assets 166,672 232 168,745 211 0 0 0 0 Total assets $ 481,002 507,023 $ 11,556 15,488 $ 31,824 31,952 $ 1,045 1,140 $ 16,791 17,246 $ 2,903 2,569 Market risk benefit liabilities $ 4,455 4,623 $ 4,455 4,623 $ 0 $ 0 $ 0 $ 0 Policyholders’ account balances 12,746 12,746 18,799 18,799 0 0 0 0 Reinsurance and funds withheld payables (27) (20) 0 0 0 (91) 194 0 Other liabilities(3) 4,749 1 6,211 0 0 2 0 4 0 Notes issued by consolidated variable interest entities (“VIEs”) 60 60 767 767 0 0 0 0 Total liabilities $ 21,983 30,380 $ 17,262 24,189 $ 0 $ 0 $ (89) 198 $ 0
Read it in 10-K 2026-02-12 at sec.gov ↗
RewordedMD&A
Public, available-for-sale, at fair value $ 206,078 54.9% 214,796 53.6% $ 19,103 18,833 $ 4,837 4,576 $ 230,018 238,205 Private, available-for-sale, at fair value 68,759 18.3 9,625 2,795 81,179 80,634 20.2 10,049 2,217 92,900 Fixed maturities, trading, at fair value 4,068 1.1 647 7,732 12,447 4,818 1.2 581 9,049 14,448 Assets supporting experience-rated contractholder liabilities, at fair value 3,707 1.0 4,842 1.2 0 0 3,707 4,842 Equity securities, at fair value 7,254 1.9 1,642 8,922 2.2 1,593 0 8,896 10,515 Commercial mortgage and other loans, at book value, net of allowance 53,987 14.4 7,652 233 61,872 56,195 14.0 7,463 263 63,921 Policy loans, at outstanding balance 6,447 6,741 1.7 3,348 3,217 0 9,795 9,958 Other invested assets, net of allowance(1) 16,781 17,684 4.4 4,929 1,867 23,577 4,532 1,850 24,066 Short-term investments, net of allowance 8,493 2.3 520 43 9,056 6,078 1.5 255 71 6,404 Total general account investments 375,574 400,710 100.0% 47,466 17,507 440,547 46,523 18,026 465,259 Invested assets of other entities and operations(2) 4,233 5,260 0 0 4,233 5,260 Total investments $ 379,807 405,970 $ 47,466 46,523 $ 17,507 18,026 $ 444,780 470,519 December 31, 2023 2024 PFI Excluding Closed Block Division Funds Withheld(3) Withheld Total Closed Block Division and Funds Withheld(3) Withheld ($ in millions) Fixed maturities:
Read it in 10-K 2026-02-12 at sec.gov ↗
RewordedMD&A
(1)2024 (1)2025 includes $900 million from PICA, $618 million from international insurance subsidiaries, $500 million from Individual Life insurance captives, $202 million from PGIM subsidiaries, and $12 million from other subsidiaries. 2024 includes $1,550 million from PICA, $800 million from a holding company, funded by one of our captive insurance subsidiaries, inclusive of proceeds associated with the reinsurance of a portion of the Company’s guaranteed universal life policies, $585 million from international insurance subsidiaries, $336 million from other subsidiaries, and $61 million from PGIM subsidiaries. 2023 includes $3,100 million from PICA, $900 million from a rabbi trust, $548 million from international insurance subsidiaries (including $332 million in the form of in-kind dividends), $66 million from PGIM subsidiaries, $18 million from Prudential Annuities Holding Company, and $4 million from other subsidiaries.
Read it in 10-K 2026-02-12 at sec.gov ↗
RewordedMD&A
(3)2024 (3)2025 includes capital contributions of $363 million to international insurance subsidiaries, $61 million to other subsidiaries, and $6 million to PICA. 2024 includes capital contributions of $240 million to international insurance subsidiaries, $90 million to PGIM subsidiaries (which is completely offset in “Affiliated (borrowings)/loans - (operating activities)” within this table), and $54 million to other subsidiaries. 2023 includes capital contributions of $829 million to PGIM subsidiaries (of which $401 million is offset in “Affiliated (borrowings)/loans - (operating activities)” within this table), $705 million to international insurance subsidiaries and $117 million to other subsidiaries.
Read it in 10-K 2026-02-12 at sec.gov ↗
RewordedMD&A
Life Planner 1,870 2,000 1,944 Gibraltar Life Revenues $ 18,148 $ 17,925 $ 18,682 Benefits and Other 1,236 1,183 1,261 Total adjusted expenses 14,901 14,819 15,499 Adjusted operating income 3,247 3,106 3,183 3,205 Realized investment gains (losses), net, and related charges and adjustments(1) adjustments 123 (911) 93 (2,094) Change in value of market risk benefits, net of related hedging gains (losses) 18 17 14 26 Market experience updates 98 89 (46) 196 Equity in earnings of joint ventures and other operating entities and earnings attributable to noncontrolling interests (157) (116) (76) 13 Income (loss) before income taxes and equity in earnings of joint ventures and other operating entities $ 3,329 $ 2,185 $ 3,168 $ 1,346
Read it in 10-K 2026-02-12 at sec.gov ↗
RewordedMD&A
The allowance for credit losses as of December 31, 2024 increased 2025 decreased in comparison to December 31, 2023, 2024, primarily related to increases in the write-downs against loan-specific reserves within agricultural property loans and commercial mortgage loans in the retail sector, partially offset by an increase in loan-specific reserves within the retail and office sectors, along with the establishment of general reserves for both the collateralized and uncollateralized loan portfolios. sector.
Read it in 10-K 2026-02-12 at sec.gov ↗
RewordedMD&A
Shown The information below are the adjusted operating income contributions of is presented by each segment and Corporate and Other operations for the periods indicated and includes a reconciliation of this segment measure of performance these impacts to “Income the impacts within income (loss) before income taxes and equity in earnings of joint ventures and other operating entities” as presented in the Consolidated Statements of Operations. entities.
Read it in 10-K 2026-02-12 at sec.gov ↗
RewordedMD&A
The increase in general account investments attributable to PFI excluding the Closed Block division and Funds Withheld in 2024 2025 was primarily due to net business inflows inflows, a net decrease in U.S. interest rates and the reinvestment of net investment income, partially offset by the translation impact of the U.S. dollar strengthening weakening against the yen yen, partially offset by assets transferred due to the Prismic Re International transaction and an increase in U.S. and Japan interest rates.
Read it in 10-K 2026-02-12 at sec.gov ↗
RewordedMD&A
In conjunction with this announcement, we made an initial equity investment through Through our Corporate and Other operations of approximately $200 million, equivalent to a operations, we own an approximate 20% interest, equity interest in Prismic Life Holding Company LP (“Prismic”), the Bermuda-exempted limited partnership that owns all of the outstanding capital stock of Prismic Re. Re and Prismic Life Reinsurance International, Ltd.
Read it in 10-K 2026-02-12 at sec.gov ↗
RewordedMD&A
For the purpose of measuring segment performance, however, adjusted operating income reflects only the change in the liability associated with the current term elected by the policyholder policyholder, which is the component of the liability the Company hedges based on current contractual index-crediting terms, and excludes which is offset by the change in the liability associated with all future projected renewals. value of the corresponding hedge assets.
Read it in 10-K 2026-02-12 at sec.gov ↗
RewordedMD&A
Given the amount of plan assets as of December 31, 2023, 2024, the beginning of the measurement year, if we had assumed an expected rate of return for both our domestic pension and other domestic postretirement benefit plans that was 100 bps higher or 100 bps lower than the rates we assumed, the change in our net periodic costs would have been as shown in the table below.
Read it in 10-K 2026-02-12 at sec.gov ↗
RewordedMD&A
Income On a pre-tax basis, “Income (loss) Before Income Taxes before income taxes and Equity equity in Earnings earnings of Joint Ventures joint ventures and Other Operating Entities other operating entities” increased $1,447 million, reflecting the following notable items:
Read it in 10-K 2026-02-12 at sec.gov ↗
Quiet changesMD&A
The following paragraphs provide additional details about the material reserves we have established:
Read it in 10-K 2026-02-12 at sec.gov ↗
Quiet changesMD&A
See Note 15 to the Consolidated Financial Statements for additional information regarding these our material reinsurance agreements.
Read it in 10-K 2026-02-12 at sec.gov ↗
Quiet changesMD&A
Although the accounting guidance provides for an optional qualitative assessment for testing goodwill impairment, the Company performed the quantitative test for all its reporting units and compared each reporting unit’s estimated fair value to its carrying value as of December 31, 2024. 2025.
Read it in 10-K 2026-02-12 at sec.gov ↗
