PRUDENTIAL FINANCIAL INC

Business Update

•In August 2024, the Company entered into an agreement with Wilton Re to reinsure certain guaranteed universal life policies issued by Pruco Life and PLNJ. These policies represented approximately 40% of the Company’s remaining statutory reserves on its in-force guaranteed universal life block of business, following the close of the reinsurance transaction with Somerset Re in the first quarter of 2024. The transaction was completed in December 2024 with an effective date of October 1, 2024. These two external reinsurance agreements reduced, in aggregate, the Company’s previously established statutory reserves on its in-force guaranteed universal life block of business by approximately 60%. See Note 12 to the Unaudited Interim Consolidated Financial Statements for additional information regarding these transactions.

The following table sets forth Individual Life’s operating results for the periods indicated:

Adjusted operating income increased $87 million, primarily driven by higher underwriting results reflecting the ongoing favorable impact from the reinsurance transaction with Wilton Re, partially offset by unfavorable mortality experience in the current quarter. Also contributing to the increase were lower expenses reflecting the absence of costs associated with the closing of the reinsurance transaction with Somerset Re in the first quarter of 2024. These variances were partially offset by lower net investment spread results reflecting the absence of income on assets related to the reinsurance transaction with Wilton Re, and lower income on non-coupon investments, partially offset by lower financing costs resulting from the reinsurance transactions discussed above and the consolidation of our internal captive reinsurance arrangements in the fourth quarter of 2024.

Revenues decreased $65 million, primarily driven by lower investment results reflecting the absence of income on assets related to the reinsurance transaction with Wilton Re, partially offset by higher policy charges and fee income due to business growth.

Benefits and expenses decreased $152 million, primarily driven by lower policyholders’ benefits, including changes in reserves, as well as lower interest expense and lower interest credited on policyholders’ account balances as a result of the reinsurance transaction with Wilton Re. Also contributing to the decrease were lower general and administrative expenses due to the absence of costs associated with the closing of the reinsurance transaction with Somerset Re in the first quarter of 2024. These variances were partially offset by unfavorable changes in estimates of the liability for future policy benefits due to unfavorable mortality experience in the current quarter.

The following table sets forth Individual Life’s annualized new business premiums, as defined under “—Results of Operations—Segment Measures” above, by distribution channel and product, for the periods indicated:

Total annualized new business premiums for the first quarter of 2025 increased $43 million, primarily reflecting higher third-party variable life sales.