PRUDENTIAL FINANCIAL INC

Business Update

•In August 2024, the Company entered into an agreement with Wilton Reassurance Company and Wilton Reinsurance Bermuda Limited (collectively, “Wilton Re”) to reinsure certain guaranteed universal life policies issued by Pruco Life Insurance Company (“Pruco Life”) and Pruco Life Insurance Company of New Jersey (“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 Reinsurance Ltd. (“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 15 to the 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 $465 million, including a favorable comparative net impact from our annual reviews and update of assumptions and other refinements. Results for 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 $309 million, primarily reflecting:

•higher underwriting results, driven by the ongoing favorable impact from the reinsurance transaction with Wilton Re and favorable mortality experience in the current year; and

•lower operating expenses, driven by the absence of costs associated with the reinsurance transactions discussed above as well as from the consolidation of our internal captive reinsurance arrangements in the prior year.

•lower net investment spread results, driven by the absence of income from assets related to the reinsurance transaction with Wilton Re and lower income from non-coupon investments. These decreases were partially offset by lower financing costs resulting from both the reinsurance transactions discussed above as well as the consolidation of our internal captive reinsurance arrangements in the prior year, and lower losses from derivatives.

Revenues decreased $65 million. Excluding the impact of our annual reviews and update of assumptions and other refinements, as discussed above, revenues decreased $96 million, primarily reflecting:

•lower investment results, driven by the absence of income from assets related to the reinsurance transaction with Wilton Re and lower income from non-coupon investments, partially offset by lower losses from derivatives.

•higher policy charges and fee income, due to business growth and favorable equity market performance.

Benefits and expenses decreased $530 million. Excluding the impact of our annual reviews and update of assumptions and other refinements, as discussed above, benefits and expenses decreased $405 million, primarily reflecting:

•lower policyholders’ benefits, including changes in reserves, lower interest expense, and lower interest credited on policyholders’ account balances, as a result of the reinsurance transaction with Wilton Re; and

•lower general and administrative expenses, primarily driven by lower operating expenses due to the absence of costs associated with the reinsurance transactions discussed above as well as from the consolidation of our internal captive reinsurance arrangements in the prior year.

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 increased $49 million, primarily reflecting:

•higher third-party universal life and term life sales; and

•higher Prudential Advisors variable life sales.