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PRUDENTIAL FINANCIAL INC

For the period ended Jun 30, 2025. Filed Jul 31, 2025.

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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.

Jun 30, 2025 · Filed Jul 31, 2025

PRU$123.30+1.0%Stored close · as of Nov 10, 2026

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Contents

11. Market Risk Benefits

  1. MARKET RISK BENEFITS

The following table shows a rollforward of MRB balances for annuity products within Individual Retirement Strategies, which is the only line of business that contains a material MRB balance, along with a reconciliation to the Company’s total net MRB positions as of the following dates:

Six Months Ended June 30, 2025
Retirement Strategies
Individual Variable · Individual Fixed · Total
(in millions)
Balance, BOP$2,740$0$2,740
Effect of cumulative changes in NPR6720672
Balance, BOP, before effect of changes in NPR3,41203,412
Attributed fees collected5256531
Claims paid(41)0(41)
Interest accrual94094
Actual in force different from expected40242
Effect of changes in interest rates389(7)382
Effect of changes in equity markets(494)(2)(496)
Effect of assumption update and other refinements112151263
Issuances351752
Other adjustments12315
Balance, EOP, before effect of changes in NPR4,0841704,254
Effect of cumulative changes in NPR(838)(7)(845)
Balance, EOP3,2461633,409
Less: Reinsured MRBs7770777
Balance, EOP, net of reinsurance$2,469$1632,632
Other businesses39
Total net MRB balance$2,671
Six Months Ended June 30, 2024
Retirement Strategies
Individual Variable · Individual Fixed · Total
(in millions)
Balance, BOP$4,038$0$4,038
Effect of cumulative changes in NPR1,13701,137
Balance, BOP, before effect of changes in NPR5,17505,175
Attributed fees collected5690569
Claims paid(42)0(42)
Interest accrual1300130
Actual in force different from expected(6)0(6)
Effect of changes in interest rates(909)0(909)
Effect of changes in equity markets(1,165)0(1,165)
Effect of assumption update and other refinements(1)88088
Issuances29029
Other adjustments(1)20020
Balance, EOP, before effect of changes in NPR3,88903,889
Effect of cumulative changes in NPR(942)0(942)
Balance, EOP2,94702,947
Less: Reinsured MRBs6350635
Balance, EOP, net of reinsurance$2,312$02,312
Other businesses47
Total net MRB balance$2,359

(1)Prior period amounts have been updated to conform to current presentation.

In both 2025 and 2024, the Company recognized an unfavorable impact to net income attributable to the actuarial assumption update for direct and assumed MRBs, primarily due to updates to policyholder behavior assumptions.

The Company issues certain variable annuity insurance contracts where the Company contractually guarantees to the contractholder a return of no less than (1) total deposits made to the contract adjusted for any partial withdrawals plus a minimum return, and/or (2) the highest anniversary contract value on a specified date adjusted for any withdrawals. These guarantees include benefits that are payable in the event of death, annuitization or at specified dates during the accumulation period and withdrawal and income benefits payable during specified periods.

The Company also issues indexed annuity contracts for which the return is tied to the return of specific indices where the Company contractually guarantees to the contractholder a return of no less than total deposits made to the contract adjusted for any partial withdrawals upon death. In certain of these indexed annuity contracts, the Company also contractually guarantees to the contractholder withdrawal benefits payable during specific periods.

For guarantees of benefits that are payable in the event of death, the net amount at risk is generally defined as the current guaranteed minimum death benefit in excess of the current account balance at the balance sheet date. The Company’s primary risk exposures for these contracts relates to actual deviations from, or changes to, the assumptions used in the original pricing of these products, including fixed income and equity market returns, contract lapses and contractholder mortality.

For guarantees of benefits that are payable at annuitization, the net amount at risk is generally defined as the present value of the minimum guaranteed annuity payments available to the contractholder determined in accordance with the terms of the contract in excess of the current account balance. The Company’s primary risk exposures for these contracts relates to actual deviations from, or changes to, the assumptions used in the original pricing of these products, including fixed income and equity market returns, timing of annuitization, contract lapses and contractholder mortality.

For guarantees of benefits that are payable at withdrawal, the net amount at risk is generally defined as the present value of the minimum guaranteed withdrawal payments available to the contractholder determined in accordance with the terms of the contract in excess of the current account balance.

For guarantees of accumulation balances, the net amount at risk is generally defined as the guaranteed minimum accumulation balance minus the current account balance. The Company’s primary risk exposures for these contracts relates to actual deviations from, or changes to, the assumptions used in the original pricing of these products, including equity market returns, interest rates, market volatility and contractholder behavior.

The following tables present accompanying information to the rollforward tables above.

June 30, 2025
Retirement Strategies
Individual VariableIndividual Fixed
($ in millions)
Net amount at risk(1)$8,736$401
Weighted-average attained age of contractholders7267
June 30, 2024
Retirement Strategies
Individual VariableIndividual Fixed
($ in millions)
Net amount at risk(1)$9,358N/A
Weighted-average attained age of contractholders71N/A

(1)For contracts with multiple benefit features, the highest net amount at risk for each contract is included.

The tables below reconcile MRB asset and liability positions as of the following dates:

June 30, 2025
Retirement Strategies
Individual VariableIndividual FixedOther BusinessesTotal
(in millions)
Direct and assumed$1,291$1$1$1,293
Ceded89401895
Total MRB assets$2,185$1$2$2,188
Direct and assumed$4,537$164$41$4,742
Ceded11700117
Total MRB liabilities$4,654$164$41$4,859
Net liability$2,469$163$39$2,671
June 30, 2024
Retirement Strategies
Individual VariableIndividual FixedOther BusinessesTotal
(in millions)
Direct and assumed$1,441$0$11$1,452
Ceded78001781
Total MRB assets$2,221$0$12$2,233
Direct and assumed$4,388$0$59$4,447
Ceded14500145
Total MRB liabilities$4,533$0$59$4,592
Net liability$2,312$0$47$2,359
ContentsView on SEC.gov

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