Release Date: February 05, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: Can you provide insights into the annuity sales growth expectations for the year, given industry predictions of a potential decline? A: Caroline Feeney, Executive Vice President and Head of U.S. Businesses, explained that despite industry predictions of a decline in traditional fixed annuity sales due to rate decreases, Prudential continues to see strong sales growth, particularly in registered index-linked annuities (RILA). The company has a diversified product portfolio and expects continued strong sales supported by demographic trends and significant money in motion.
Q: How quickly can Prismic pivot to third-party deals in Japan following the internal reinsurance transaction? A: Robert Falzon, Vice Chairman of the Board, stated that Japan presents a significant growth opportunity for Prismic, both from Prudential's own book and third-party reinsurance. The introduction of the ESR regime in Japan accelerates this opportunity, and Prudential is well-positioned to capitalize on it due to its brand, local presence, and market intelligence.
Q: Why is 30% to 40% of capital needed for growth when most businesses are growing sub-optimally? A: Yanela Frias, Chief Financial Officer, explained that Prudential is investing in strong growth opportunities across its businesses, which is materializing in earnings. However, there are near-term headwinds due to new business strain and runoff impacts. Despite these, the company expects a 5% to 8% growth rate in core earnings.
Q: Can you provide more color on how you plan to use the capital freed up from recent transactions? A: Yanela Frias indicated that the capital will be used in line with Prudential's capital allocation priorities, which include preserving financial strength, investing in long-term growth, and returning capital to shareholders. The company maintains flexibility to adapt to economic and market conditions.
Q: How do you expect the implementation of ESR in Japan to affect your capital levels? A: Yanela Frias stated that Prudential expects its capital levels to remain above target levels that support AA financial strength ratings upon the implementation of ESR. The company is executing transactions to mitigate volatility and optimize its balance sheet.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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