PRUDENTIAL FINANCIAL INC
For the period ended Dec 31, 2025. Filed Feb 12, 2026.
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FY2025 · Filed Feb 12, 2026
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24. Related Party Transactions
- RELATED PARTY TRANSACTIONS
In September 2023, the Company invested approximately $200 million in Prismic, a Bermuda-exempted limited partnership that owns all of the outstanding capital stock of Prismic Re, a licensed Bermuda-based life and annuity reinsurance company. Also in September 2023, the Company entered into an agreement with Prismic Re, to reinsure approximately $9 billion of reserves for certain structured settlement annuity contracts issued by PICA, a wholly-owned subsidiary of Prudential Financial. Separately, the Company, through PGIM, entered into an investment management agreement with Prismic to manage a large portion of Prismic Re's assets.
In March 2025, the Company entered into an agreement with Prismic Re International, a wholly-owned subsidiary of Prismic, to reinsure approximately $7 billion of reserves for certain USD-denominated Japanese whole life policies originated by the Company’s Japanese affiliates. In connection with this transaction, the Company invested an additional $103 million in Prismic. PGIM also provides investment management services on a large portion of Prismic Re International’s assets.
In October 2025, the Company entered into an agreement with Prismic Re, to reinsure certain fixed annuity new business contracts issued by Pruco Life, a wholly-owned subsidiary of Prudential Financial, on or after October 1, 2025.
As of December 31, 2025 and 2024, the Company’s ownership in Prismic is approximately 20% and the carrying value of the Company’s investment is approximately $200 million. As the investment in Prismic is accounted for under the equity method, Prismic, Prismic Re and Prismic Re International are considered related parties. The following tables summarize the impacts to the Company’s financial statements related to the agreements that the Company entered with Prismic, Prismic Re and Prismic Re International.
The related party balances with Prismic, Prismic Re and Prismic Re International impacted the Company’s balance sheet as of the periods indicated as follows:
| December 31, 2025 | December 31, 2024 | |
|---|---|---|
| (in millions) | ||
| Reinsurance recoverables and deposit receivables | $15,581 | $9,084 |
| Other assets | $162 | $187 |
| Reinsurance and funds withheld payables (includes $194 and $(91) of embedded derivatives at fair value at December 31, 2025 and 2024, respectively) | $7,980 | $7,796 |
| Accumulated other comprehensive income (loss) | $(128) | $(139) |
The Company has agreed to guarantee Prismic Re's reimbursement obligations on letters of credit that may be obtained by Prismic Re from third-party financial institutions to support Prismic Re’s obligations under the reinsurance agreement with the Company for a total amount up to $2.0 billion as of both December 31, 2025 and 2024. As part of the transaction with Prismic Re International, the Company provided an $80 million,10-year contingent debt facility, where the Company may be required to purchase subordinated debt from certain subsidiaries of Prismic in the event their capital ratio falls below a predetermined level. In November 2025, the Company committed to Prismic Re $320 million of additional capital, intended to fund future transactions executed by Prismic, that is required to be fully funded by the end of the second quarter of 2027. This commitment is part of a broader capital commitment, involving third-party investors in Prismic, and will allow the Company to retain its approximately 20% equity ownership in Prismic. See Note 25 for additional information on the Company’s guarantees and commitments.
The related party activity with Prismic, Prismic Re and Prismic Re International impacted the Company’s results of operations and cash flows for the periods indicated as follows:
| Years Ended December 31, | |||
|---|---|---|---|
| 2025 | 2024 | 2023 | |
| (in millions) | |||
| Premiums | $(19) | $6 | $(4,811) |
| Asset management and service fees | 61 | 38 | 10 |
| Other income (loss) | 353 | 150 | 52 |
| Realized investment gains(losses), net | (509) | 255 | (491) |
| Policyholders’ benefits | (281) | (281) | (4,915) |
| Change in estimates of liability for future policy benefits | (20) | 7 | 5 |
| Amortization of deferred policy acquisition costs | (9) | 0 | 0 |
| General and administrative expenses | 40 | 48 | 3 |
| Income (loss) from related parties, before income taxes | 156 | 675 | (333) |
| Other comprehensive income (loss), before tax | 11 | (473) | 335 |
| Total comprehensive income (loss), before tax | $167 | $202 | $2 |
| Years Ended December 31, | |||
|---|---|---|---|
| 2025 | 2024 | 2023 | |
| (in millions) | |||
| CASH FLOWS FROM OPERATING ACTIVITIES | |||
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
| Realized investment (gains) losses, net | $509 | $(255) | $491 |
| Change in: | |||
| Deferred policy acquisition costs | $(9) | $0 | $0 |
| Reinsurance related-balances | $(843) | $(743) | $(235) |
| Other, net | $26 | $16 | $29 |
| CASH FLOWS FROM INVESTING ACTIVITIES | |||
| Other, net | $(64) | $0 | $0 |
| CASH FLOWS FROM FINANCING ACTIVITIES | |||
| Other, net | $336 | $374 | $3 |
See the Consolidated Statements of Cash Flows for information regarding significant non-cash transactions with Prismic Re and Prismic Re International.
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