PRUDENTIAL FINANCIAL INC

The following table sets forth Group Insurance’s operating results and benefits and administrative operating expense ratios for the periods indicated:

(1)Ratio of policyholder benefits to earned premiums plus policy charges and fee income.

(2)Benefit ratios reflect the impact of our annual reviews and update of assumptions and other refinements. Excluding these impacts, the group life, group disability and total Group Insurance benefit ratios were 86.8%, 73.5% and 83.1% for the nine months ended September 30, 2024, respectively; and 87.6%, 70.7% and 83.1% for the nine months ended September 30, 2023, respectively.

(3)Ratio of general and administrative expenses (excluding commissions) to gross premiums plus policy charges and fee income.

(4)The benefits and administrative ratios are measures used to evaluate profitability and efficiency.

Three Month Comparison. Adjusted operating income decreased $7 million, primarily reflecting higher operating and variable expenses, largely supporting business growth, partially offset by higher net investment spread results driven by higher reinvestment rates. Underwriting results in our group disability business were lower, reflecting less favorable claims experience on long-term and short-term disability contracts, partially offset by an increase in supplemental health product sales. This impact was mostly offset by higher underwriting results in our group life business driven by more favorable mortality experience.

Nine Month Comparison. Adjusted operating income decreased $5 million, including a less favorable comparative net impact from our annual reviews and update of assumptions and other refinements. Resultsfor 2024 and 2023 included net benefits from this update of $25 million and $36 million, respectively. Excluding this item, adjusted operating income increased $6 million, primarily reflecting higher underwriting results in our group life business driven by more favorable mortality experience, and higher net investment spread results driven by higher reinvestment rates. These increases were partially offset by higher operating and variable expenses, largely supporting business growth.

Three Month Comparison. Revenues increased $67 million, primarily reflecting higher premiums and policy charges and fee income driven by lower premium returns on experience-rated contracts in our group life business due to less favorable mortality, with offsets in policyholders’ benefits and changes in reserves, as discussed below.

Benefits and expenses increased $74 million, primarily reflecting the impact of higher mortality on experience-rated contracts in our group life business, as discussed above, less favorable claims experience on long-term and short-term disability contracts, and higher general and administrative expenses, largely supporting business growth.

Nine Month Comparison. Revenues increased $125 million. Excluding the impact of our annual reviews and update of assumptions and other refinements, as discussed above, revenues increased $128 million. The increase primarily reflected higher premiums and policy charges and fee income, driven by business growth in our group disability business, including supplemental health products, and higher net investment income driven by higher reinvestment rates.

Benefits and expenses increased $130 million. Excluding the impact of our annual reviews and update of assumptions and other refinements, as discussed above, benefits and expenses increased $122 million. The increase primarily reflected higher policyholders’ benefits, driven by less favorable claims experience on long-term disability contracts, as well as higher general and administrative expenses, largely supporting business growth.

The following table sets forth Group Insurance’s annualized new business premiums, as defined under “—Segment Measures” above, for the periods indicated:

(1)Amounts exclude new premiums resulting from rate changes on existing policies, from additional coverage under our Servicemembers’ Group Life Insurance contract and from excess premiums on group universal life insurance that build cash value but do not purchase face amounts.

Total annualized new business premiums for the three months ended September 30, 2024 decreased $32 million compared to the prior year period, driven by lower sales in both our group life and group disability businesses primarily in the National Market segment reflecting the timing of enrollments, partially offset by higher sales in the Association Market segment.

Total annualized new business premiums for the nine months ended September 30, 2024 increased $16 million compared to the prior year period, primarily driven by higher sales in our group disability business, including an increase in supplemental health product sales in the National Market and Association Market segments. This increase was partially offset by lower sales in the Premier Market segment in both our group disability and group life businesses, reflecting the absence of outsized sales in the prior year period.