PRUDENTIAL FINANCIAL INC

Business Update

•Effective January 1, 2026, guaranteed universal life policies previously included in the Individual Life segment were transferred into a new reportable segment named “U.S. Legacy Products.” See “—U.S. Legacy Products” below for the operating results and additional information regarding this new segment. This change was applied retrospectively and did not have an impact on any of the Company’s previously issued Consolidated Financial Statements.

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

Adjusted operating income increased $46 million, primarily reflecting:

•higher underwriting results, driven by a positive impact from more favorable reserve refinements in the current quarter and favorable mortality experience; and

•higher net investment spread results, driven by higher reinvestment rates, partially offset by lower income from non-coupon investments.

Revenues increased $31 million, primarily reflecting:

•higher net investment income, driven by higher reinvestment rates, partially offset by lower income from non-coupon investments;

•higher policy charges and fee income, driven by a positive impact from reserve refinements; and

•higher asset management and service fees, driven by higher separate account values reflecting favorable equity market performance and business growth.

•lower premiums, driven by higher ceded reinsurance premiums with corresponding offsets in policyholders’ benefits, as discussed below.

Benefits and expenses decreased $15 million, primarily reflecting:

•lower policyholders’ benefits, including changes in reserves, driven by favorable mortality experience and lower premiums as discussed above.

•higher general and administrative expenses, largely supporting business growth.

Adjusted operating income increased $227 million, including a favorable comparative net impact from our annual reviews and update of assumptions and other refinements. Results for 2026 included a net benefit of $30 million, while 2025 included a net charge of $26 million.

Excluding this item, adjusted operating income increased $171 million, primarily reflecting:

•higher underwriting results, driven by favorable mortality experience; and

•higher net investment spread results, driven by higher reinvestment rates, partially offset by lower income from non-coupon investments.

Revenues increased $188 million. Excluding the impact of our annual reviews and update of assumptions and other refinements, as discussed above, revenues increased $113 million, primarily reflecting:

•higher net investment income, driven by higher reinvestment rates, partially offset by lower income from non-coupon investments; and

•higher policy charges and fee income, as well as higher asset management and service fees, driven by higher separate account values reflecting favorable equity market performance and business growth.

Benefits and expenses decreased $39 million. Excluding the impact of our annual reviews and update of assumptions and other refinements, as discussed above, benefits and expenses decreased $58 million, primarily reflecting:

•lower policyholders’ benefits, including changes in reserves, driven by favorable mortality experience; and

•favorable changes in estimates of the liability for future policy benefits, reflecting favorable mortality experience.

•higher interest credited on policyholders’ account balances, driven by business growth; and

•higher general and administrative expenses, largely supporting business growth.

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 months ended September 30, 2026 decreased $17 million, primarily reflecting:

•lower third-party variable life sales, partially offset by higher term life sales.

Total annualized new business premiums for the nine months ended September 30, 2026 increased $50 million, primarily reflecting:

•higher third-party sales across all products; and

•higher Prudential Wealth Advisors variable life sales.

U.S. Legacy Products

Business Update

•Effective January 1, 2026, traditional variable annuity products with guaranteed living benefit riders and certain other annuity products previously included in the former Individual Retirement Strategies segment and guaranteed universal life policies previously included in the Individual Life Insurance segment were combined into this new reportable segment. The products contained within are no longer being sold in U.S. markets and will be managed with a specific focus on reducing risk and optimizing value for the Company. These changes have been applied retrospectively and did not have an impact on any of the Company’s previously issued Consolidated Financial Statements. See “—Company Overview” above for additional information regarding these segment changes.

The following table sets forth U.S. Legacy Products’ operating results for the periods indicated:

Our U.S. Legacy Products segment includes variable annuity contracts that offer optional guaranteed living benefit riders (e.g., guaranteed minimum income benefits (“GMIB”), guaranteed minimum accumulation benefits (“GMAB”), guaranteed minimum withdrawal benefits (“GMWB”) and guaranteed minimum income and withdrawal benefits (“GMIWB”)), and/or optional death benefit riders (e.g., guaranteed minimum death benefits (“GMDB”)). The results of our variable annuity contracts are generally included in adjusted operating income, subject to certain exceptions related to these guarantees. Under U.S. GAAP, guaranteed living and death benefit riders are accounted for as market risk benefits (“MRBs”) and reported at fair value. For purposes of measuring segment performance, adjusted operating income excludes the changes in fair value of MRBs and instead reflects the performance of these riders in net income, net of related hedges, in “Change in value of market risk benefits, net of related hedging gains (losses),” except for the portion of the change attributable to changes in the Company’s non-performance risk (“NPR”) which is recorded in Other Comprehensive Income (loss) (“OCI”).

Adjusted operating income decreased $55 million, primarily reflecting:

•lower fee income, due to lower average separate account values driven by net outflows from the run-off of the variable annuity block, partially offset by favorable equity market performance;

•lower underwriting results, primarily driven by reserve growth and less favorable mortality experience on guaranteed universal life policies; and

•lower net investment spread results, driven by the impact of lower average short-term interest rates on income from collateral posted to counterparties, partially offset by higher income on non-coupon investments.

Revenues decreased $46 million, primarily reflecting:

•lower policy charges and fee income, as well as lower asset management and service fees, due to lower average separate account values driven by net outflows from the run-off of the variable annuity block, partially offset by favorable equity market performance; and

•lower other income, primarily driven by the impact of lower average short-term interest rates on income from collateral posted to counterparties.

•higher net investment income, driven by higher income on non-coupon investments and higher reinvestment rates.

Benefits and expenses increased $9 million, primarily reflecting:

•higher policyholders’ benefits, including changes in reserves, primarily driven by reserve growth on guaranteed universal life policies; and

•higher interest expense reflecting higher financing costs.

•lower general and administrative expenses; and

•favorable changes in estimates of the liability for future policy benefits.

Adjusted operating income decreased $229 million, including a less favorable comparative net impact from our annual reviews and update of assumptions and other refinements. Results for 2026 included a $15 million net benefit from this update, while results for 2025 included a net benefit of $64 million primarily driven by updates to mortality assumptions for guaranteed universal life policies.

Excluding this item, adjusted operating income decreased $180 million, primarily reflecting:

•lower fee income, due to lower average separate account values driven by net outflows from the run-off of the variable annuity block, partially offset by favorable equity market performance;

•lower underwriting results, primarily driven by reserve growth and unfavorable mortality experience on guaranteed universal life policies; and

•lower net investment spread results, driven by the impact of lower average short-term interest rates on income from collateral posted to counterparties, and lower income on non-coupon investments, partially offset by higher reinvestment rates.

Revenues decreased $151 million. Excluding the impact of our annual reviews and update of assumptions and other refinements, as discussed above, revenues decreased $127 million, primarily reflecting:

•lower policy charges and fee income, as well as lower asset management and service fees, due to lower average separate account values driven by net outflows from the run-off of the variable annuity block, partially offset by favorable equity market performance; and

•lower other income, driven by the impact of lower average short-term interest rates on income from collateral posted to counterparties.

•higher net investment income, primarily driven by higher reinvestment rates.

Benefits and expenses increased $78 million. Excluding the impact of our annual reviews and update of assumptions and other refinements, as discussed above, benefits and expenses increased $53 million, primarily reflecting:

•higher policyholders’ benefits, including changes in reserves, primarily driven by unfavorable mortality experience and reserve growth on guaranteed universal life policies; and

•higher interest expense reflecting higher financing costs.

•lower general and administrative expenses; and

•favorable changes in estimates of the liability for future policy benefits.

Account Values

The following table sets forth the segment’s annuities account value information for the periods indicated:

(1)Represents discontinued annuities and guaranteed living benefits in the general account and separate accounts. Includes alliance deposits and supplementary contracts.

(2)Beginning account values, net of reinsurance ceded, were $76,094 million and $81,870 million for the three months ended September 30, 2026 and 2025, respectively, $79,249 million and $84,834 million for the nine months ended September 30, 2026 and 2025, respectively, and $81,719 million for the twelve months ended September 30, 2026.

(3)Represents renewal premiums or additional deposits on existing policies/contracts.

The decrease in annuities net account values for the three months ended September 30, 2026 primarily reflects:

•net outflows from the run-off of the variable annuity block; and

•market value depreciation.

The decrease in annuities net account values for the nine and twelve months ended September 30, 2026 primarily reflects:

•net outflows from the run-off of the variable annuity block.

•market value appreciation.

Variable Annuity Risks and Risk Mitigants

The primary risks of our variable annuity contracts arise from differences between actual experience and the assumptions used in the original pricing, including capital markets assumptions and actuarial assumptions. We manage these risks primarily through (i) Product Design Features, (ii) our Asset Liability Management Strategy, and, for certain products, external reinsurance. For additional information regarding our external reinsurance agreements, see Note 12 to the Unaudited Interim Consolidated Financial Statements.

i. Product Design Features:

Certain variable annuity contracts include an automatic rebalancing feature, also referred to as an asset transfer feature, that transfers assets between designated variable investment sub-accounts selected by the annuity contractholder and, depending on the benefit feature, a fixed-rate account in the general account or a bond fund sub-account within the separate accounts. The objective of this feature is to reduce our exposure to equity market risk and market volatility. Additional product design features include, among others, asset allocation restrictions, certain limitations on the amount of purchase payments, and a required minimum allocation to our general account for certain of our products. In addition, there is diversity in our fee arrangements, which help preserve certain revenue streams when market fluctuations cause account values to decline.

ii. Asset Liability Management (“ALM”) Strategy:

We employ an ALM strategy that combines fixed income instruments and derivatives to meet expected liabilities associated with certain annuity guarantees classified as MRBs under U.S. GAAP. The MRB liability that we hedge consists of expected living and death benefit claims under various market conditions. For our Prudential Defined Income (“PDI”) variable annuity, we primarily use fixed income instruments, while other products also utilize exchange-traded and over-the-counter (“OTC”) equity, interest rate and credit derivatives, including futures, swaps, and options. The intent of this strategy is to manage capital and liquidity efficiently and reduce net income volatility from capital markets movements. We periodically review and recalibrate the ALM strategy by optimizing the mix of derivatives and fixed income instruments to achieve expected outcomes.

Differences between changes in the value of the assets supporting MRBs and changes in the MRB liability may impact U.S. GAAP net income, primarily due to differences in accounting treatment and hedge performance factors.

Product Specific Risks and Risk Mitigants

For certain living benefit guarantees, claims will primarily represent the funding of contractholder lifetime withdrawals after the cumulative withdrawals have first exhausted the contractholder account value. Due to the age of the in-force block, claim payments to date have been limited. The timing and amount of future claims will depend on actual investment performance and contractholder behavior relative to our assumptions. Most of our current living benefit guarantees provide for guaranteed lifetime contractholder withdrawal payments inclusive of a “highest daily” contract value guarantee.

The majority of our traditional variable annuity contracts with living benefit guarantees incorporate risk mitigants such as an automatic rebalancing feature and/or inclusion in our ALM strategy. We may also utilize external reinsurance as an additional risk mitigant. For additional information regarding our external reinsurance agreements, see Note 12 to the Unaudited Interim Consolidated Financial Statements.

For our GMDBs, we provide a benefit payable upon death, generally equal to cumulative deposits adjusted for partial withdrawals, with certain products offering enhanced GMDB options. While we retain the risk that death benefit may exceed account values, a substantial portion of GMDB-related account values are subject to automatic rebalancing because the contractholder also selected a living benefit guarantee. All variable annuity contracts with living benefit guarantees include GMDBs, and because the living and death benefits cover the same insured life, we are exposed to both longevity and mortality risk on these contracts.

The following table sets forth the risk management profile of our living benefit guarantees and GMDB features as of the periods indicated:

(1)All contracts with living benefit guarantees also contain GMDB features, which cover the same insured contract.

(2)Contracts with living benefits that are included in our ALM strategy and that have an automatic rebalancing feature.

(3)Excludes retained PDI which is presented separately within this table.

(4)Represents contracts subject to reinsurance transactions with external counterparties. Includes approximately $7 billion of account values in relation to the PDI reinsurance transaction, and certain Highest Daily Lifetime Income (“HDI”) v.3.0 business for the period April 1, 2015 through December 31, 2016. The HDI contracts with living benefits also have an automatic rebalancing feature. See Note 12 to the Unaudited Interim Consolidated Financial Statements for additional information.

(5)Includes contracts that have a GMDB feature and do not have an automatic rebalancing feature.