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:

Three Month Comparison. Adjusted operating income increased $195 million, including a favorable comparative net impact from our annual reviews and update of assumptions and other refinements. Results for the second quarter of 2025 included a net benefit of $58 million driven by impacts related to assumptions for mortality, policyholder behavior and other reserve refinements, while 2024 included a net charge of $98 million driven by unfavorable impacts related to assumptions for policyholder behavior. Excluding this item, adjusted operating income increased $39 million, primarily driven by higher underwriting results reflecting the ongoing favorable impact from the reinsurance transaction with Wilton Re and favorable mortality experience in the current quarter. This variance was 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.

Six Month Comparison. Adjusted operating income increased $282 million, including a favorable comparative net impact from our annual reviews and update of assumptions and other refinements, as discussed above. Excluding this item adjusted operating income increased $126 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 period. 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.

Three Month Comparison. Revenues decreased $36 million. Excluding the impact of our annual reviews and update of assumptions and other refinements, as discussed above, revenues decreased $67 million, primarily driven by lower investment results and lower policy charges and fee income, reflecting the impacts from the reinsurance transaction with Wilton Re, partially offset by lower investment losses from derivative settlements.

Benefits and expenses decreased $231 million. Excluding the impact of our annual reviews and update of assumptions and other refinements, as discussed above, benefits and expenses decreased $106 million, primarily driven by lower policyholders’ benefits, including changes in reserves, and lower interest credited on policyholders’ account balances as a result of the reinsurance transaction with Wilton Re and favorable mortality experience.

Six Month Comparison. Revenues decreased $101 million. Excluding the impact of our annual reviews and update of assumptions and other refinements, as discussed above, revenues decreased $132 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 lower investment losses from derivative settlements and higher policy charges and fee income due to business growth and favorable equity market performance.

Benefits and expenses decreased $383 million. Excluding the impact of our annual reviews and update of assumptions and other refinements, as discussed above, benefits and expenses decreased $258 million, primarily driven by lower policyholders’ benefits, including changes in reserves, lower interest credited on policyholders’ account balances, as well as lower interest expense 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.

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 three and six months ended June 30, 2025 increased $20 million and $63 million, respectively, primarily reflecting higher third-party sales across all products.