Prudential Financial, Inc.

Ladies and gentlemen, thank you for standing by, and welcome to Prudential's quarterly earnings conference call. At this time, all participants have been placed in a listen-only mode. Later, we'll conduct a question and answer session. Instructions will be given at that time. If you should require any assistance during the call, please press star zero, and an operator will assist you offline. As a reminder, today's call is being recorded. I will now turn the call over to Mr. Bob McLaughlin. Please go ahead.

Good morning, and thank you for joining our call. Representing Prudential on today's call are Charlie Lowry, Chairman and CEO, Rob Fausen, Vice Chairman, Andy Sullivan, Head of International Businesses, and P. Jim, our Global Investment Manager, Caroline Feeney, Head of U.S. Businesses, Ken Changi, Chief Financial Officer, and Rob Axel, Controller and Principal Accounting Officer. We will start with prepared comments by Charlie, Rob, and Ken, and then we will take your questions. Today's presentation may include forward-looking statements. it is possible that actual results may differ materially from those predictions we make today. In addition, this presentation may include references to non-GAAP measures, for reconciliation of such measures to the comparable GAAP measure, and a discussion of factors that could cause actual results to differ materially from those in the forward-looking statements. Please see the slides titled Forward-Looking Statements and Non-GAAP Measures in the appendix to today's presentation and the quarterly financial supplement, both of which can be found on our website at investor.prudential.com. Now I'll turn it over to Charlie.

Thank you, Bob. And thanks to everyone for joining us today. Before we begin, I'd like to comment on our CFO transition. As you saw from yesterday's news release, Janela Frias, president of Prudential's group insurance business, has been named executive vice president and CFO of Prudential, succeeding Ken Tangy. As a 27-year veteran of Prudential, Janela is a seasoned executive who brings a deep understanding of our business and industry, as well as significant finance operations and leadership experience. I'm sure you'll enjoy getting to know her as she starts her new role. Janela will become CFO effective March 15th, and Ken will stay on for a six month period to ensure a smooth transition. Ken has been a great partner and friend and has had a distinguished 35 year career at Prudential. I don't need to go back far to articulate his impact. Most recently, as CFO, Ken guided Prudential through the financial challenges of the COVID pandemic and the market volatility that followed. During the same time, his leadership on strategic initiatives meaningfully contributed to our goals of becoming less market sensitive and more nimble. We are grateful to Ken for his many contributions over more than three decades and wish him well. Now let's turn to my remarks for the quarter. Our financial results for 2023 reflect continued strong sales momentum across our insurance and retirement businesses and solid underlying earnings growth. The fourth quarter capped a productive year of continued transformation to make Prudential a higher growth, more capital efficient, and more nimble company. Our strategic progress and financial strength position us well to navigate the current macroeconomic environment, maintain a disciplined approach to capital deployment, and deliver long-term sustainable growth. Turning to slide three, I will begin today by sharing a few examples of how we are transforming our business to drive future growth and unlock value for all our stakeholders. Over the course of 2023, we executed several attractive transactions, adding to our capital efficiency. We reinsured a $10 billion block of traditional variable annuities, reducing our market sensitivity. We closed a $10 billion transaction of structured settlement annuities with Prismic, a life and annuity reinsurance company we launched. Prismic will enhance our mutually reinforcing business system and drive future growth by leveraging our differentiated brand, global asset and liability origination capabilities, and multichannel distribution. In addition, we entered into a reinsurance agreement with Somerset Reeve for a $12.5 billion block of guaranteed universal life reserves, which released capital and increased earnings. We continue to strengthen the capabilities of our market-leading businesses through strategic M&A, expanded distribution channels, and created new products and solutions to meet the evolving needs of our customers across the globe and to support future growth. In PGM, We enhanced our capabilities in the attractive area of private credit and direct lending by acquiring a majority stake in Deer Path Capital, which closed in December. To further provide investors with a cohesive offering, we brought together PGM's private alternatives capabilities into one global team with the formation of PGM Private Alternatives. Internationally, we continue to expand third-party distribution in Latin America through MercadoLibre. reaching a milestone of close to 300,000 policies in force last quarter. In Japan, we launched expanded inheritance and new investment products to diversify our portfolio and meet a broader range of customer needs. Our institutional retirement strategies business secured its second largest longevity risk transfer transaction ever, with one of the biggest life insurance companies in the Netherlands. This marks our first international reinsurance deal in the Dutch market. Retirement Strategies also worked with Fidelity Investments to address growing consumer demand for a workplace retirement income solution. Our Prudential Simply Income product, a new single premium immediate annuity, is now available to employer-based retirement plans administered by Fidelity. In addition, to solidify our leadership and expand our addressable market in structured settlements, we launched a new index structured settlement annuity product. We also continue to create a more nimble and efficient company to meet the changing needs of our customers and maintain a competitive position in the marketplace. This included evolving our operating model and organizational structure to better support customers at the business level and leveraging technology to bring products to market faster. Our business and technology teams together launched an average of one new or enhanced product every two weeks in 2023. Additionally, we are strategically leaning into partnerships with cutting-edge technology firms within our group business to increase the speed of innovation, add capabilities, and enhance customer experience. We entered 2024 with momentum and optimism as we have expanded and diversified our product offerings, enhanced customer and client experiences, and continued to reinvest in our businesses for sustainable long-term growth. Moving to slide four. Our transformation strategy and growth initiatives are supported by Prudential's rock solid balance sheet and robust risk and capital management framework, which have allowed us to confidently navigate the macroeconomic environment. Our AA rated financial strength includes a strong capital position, including approximately $50 billion of unrealized insurance margins, $4.1 billion in highly liquid assets at the end of the fourth quarter, and a high-quality, well-diversified investment portfolio and disciplined approach to asset liability management. Turning to slide five, our disciplined approach to capital deployment enables us to effectively balance investing in the long-term growth of our businesses with returning capital to shareholders. In the fourth quarter, we returned over $700 million of capital to shareholders. For 2024, Our board has authorized up to $1 billion in share repurchases, as well as a 4% dividend increase beginning in the first quarter. This represents our 16th consecutive annual dividend increase. And now, I will turn it over to Rob.