June 18, 2013 - EX-99.1 - 8-K: Current report | Prudential Financial, Inc. (PRU)

Prudential Financial, Inc.

Investor Day

June 18, 2013

Exhibit 99.1

Forward-Looking Statements

Investor Day 6.18.2013

Certain of the statements included in this presentation constitute forward-looking statements within the meaning of the U. S. Private Securities

Litigation Reform Act of 1995. Words such as “expects,” “believes,” “anticipates,” “includes,” “plans,” “assumes,” “estimates,” “projects,” “intends,”

“should,” “will,” “shall,” or variations of such words are generally part of forward-looking statements. Forward-looking statements are made based

on management’s current expectations and beliefs concerning future developments and their potential effects upon Prudential Financial, Inc. and

its subsidiaries. There can be no assurance that future developments affecting Prudential Financial, Inc. and its subsidiaries will be those

anticipated by management. These forward-looking statements are not a guarantee of future performance and involve risks and uncertainties, and

there are certain important factors that could cause actual results to differ, possibly materially, from expectations or estimates reflected in such

forward-looking statements, including, among others: (1) general economic, market and political conditions, including the performance and

fluctuations of fixed income, equity, real estate and other financial markets; (2) the availability and cost of additional debt or equity capital or

external financing for our operations; (3) interest rate fluctuations or prolonged periods of low interest rates; (4) the degree to which we choose not

to hedge risks, or the potential ineffectiveness or insufficiency of hedging or risk management strategies we do implement, with regard to variable

annuity or other product guarantees; (5) any inability to access our credit facilities; (6) reestimates of our reserves for future policy benefits and

claims; (7) differences between actual experience regarding mortality, longevity, morbidity, persistency, surrender experience, interest rates or

market returns and the assumptions we use in pricing our products, establishing liabilities and reserves or for other purposes; (8) changes in our

assumptions related to deferred policy acquisition costs, value of business acquired or goodwill; (9) changes in assumptions for retirement

expense; (10) changes in our financial strength or credit ratings; (11) statutory reserve requirements associated with term and universal life

insurance policies under Regulation XXX and Guideline AXXX; (12) investment losses, defaults and counterparty non-performance;

(13) competition in our product lines and for personnel; (14) difficulties in marketing and distributing products through current or future distribution

channels; (15) changes in tax law; (16) economic, political, currency and other risks relating to our international operations; (17) fluctuations in

foreign currency exchange rates and foreign securities markets; (18) regulatory or legislative changes, including the Dodd-Frank Wall Street

Reform and Consumer Protection Act; (19) inability to protect our intellectual property rights or claims of infringement of the intellectual property

rights of others; (20) adverse determinations in litigation or regulatory matters and our exposure to contingent liabilities, including in connection

with our divestiture or winding down of businesses; (21) domestic or international military actions, natural or man-made disasters including terrorist

activities or pandemic disease, or other events resulting in catastrophic loss of life; (22) ineffectiveness of risk management policies and

procedures in identifying, monitoring and managing risks; (23) effects of acquisitions, divestitures and restructurings; (24) interruption in

telecommunication, information technology or other operational systems or failure to maintain the security, confidentiality or privacy of sensitive

data on such systems; (25) changes in statutory or U.S. GAAP accounting principles, practices or policies; (26) Prudential Financial, Inc.’s primary

reliance, as a holding company, on dividends or distributions from its subsidiaries to meet debt payment obligations and the ability of the

subsidiaries to pay such dividends or distributions in light of our ratings objectives and/or applicable regulatory restrictions; and (27) risks due to

the lack of legal separation between our Financial Services Businesses and our Closed Block Business. Prudential Financial, Inc. does not intend,

and is under no obligation, to update any particular forward-looking statement included in this presentation.

See “Risk Factors” included in Prudential Financial, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2012 for discussion of

certain risks relating to our businesses and investment in our securities.

Prudential Financial, Inc. of the United States is not affiliated with Prudential PLC which is headquartered in the United Kingdom.

Non–GAAP Measures

Investor Day 6.18.2013

This presentation includes references to “adjusted operating income.” Adjusted operating income is a non-GAAP measure of performance of our Financial

Services Businesses. Adjusted operating income excludes “Realized investment gains (losses), net,” as adjusted, and related charges and adjustments. A

significant element of realized investment gains and losses are impairments and credit-related and interest rate-related gains and losses. Impairments and

losses from sales of credit-impaired securities, the timing of which depends largely on market credit cycles, can vary considerably across periods. The timing

of other sales that would result in gains or losses, such as interest rate-related gains or losses, is largely subject to our discretion and influenced by market

opportunities as well as our tax and capital profile.

Realized investment gains (losses) within certain of our businesses for which such gains (losses) are a principal source of earnings, and those associated

with terminating hedges of foreign currency earnings and current period yield adjustments are included in adjusted operating income. Adjusted operating

income excludes realized investment gains and losses from products that contain embedded derivatives, and from associated derivative portfolios that are

part of a hedging program related to the risk of those products. Adjusted operating income also excludes gains and losses from changes in value of certain

assets and liabilities relating to foreign currency exchange movements that have been economically hedged or considered part of our capital

funding strategies for our international subsidiaries, as well as gains and losses on certain investments that are classified as other trading account assets.

Adjusted operating income also excludes investment gains and losses on trading account assets supporting insurance liabilities and changes in experience-

rated contractholder liabilities due to asset value changes, because these recorded changes in asset and liability values are expected to ultimately accrue to

contractholders. Trends in the underlying profitability of our businesses can be more clearly identified without the fluctuating effects of these transactions. In

addition, adjusted operating income excludes the results of divested businesses, which are not relevant to our ongoing operations. Discontinued operations,

which is presented as a separate component of net income under GAAP, is also excluded from adjusted operating income.

We believe that the presentation of adjusted operating income as we measure it for management purposes enhances understanding of the results of

operations of the Financial Services Businesses by highlighting the results from ongoing operations and the underlying profitability of our businesses.

However, adjusted operating income is not a substitute for income determined in accordance with GAAP, and the adjustments made to derive adjusted

operating income are important to an understanding of our overall results of operations.

Return on equity (“ROE”) based on adjusted operating income is determined by dividing adjusted operating income after-tax (giving effect to the direct equity

adjustment for earnings per share calculation) by average attributed equity for the Financial Services Businesses excluding accumulated other

comprehensive income.

Our expectations of ROE potential are based on after-tax adjusted operating income. Because we do not predict future realized investment gains / losses or

recorded changes in asset and liability values that are expected to ultimately accrue to contractholders, we cannot provide a measure of our ROE

expectations based on income from continuing operations of the Financial Services Businesses, which is the GAAP measure most comparable to adjusted

operating income.

The information referred to above, as well as the risks of our businesses described in our Annual Report on Form 10-K for the year ended December 31,

2012, should be considered by readers when reviewing forward-looking statements contained in this presentation. Additional historical information relating to

our financial performance is located on our Web site at www.investor.prudential.com.

Reconciliation for Individual Annuities Pre-Tax Adjusted

Operating Income excluding Indicated Disclosed Items

2007

2008

2009

2010

2011

2012

Individual Annuities pre-tax adjusted operating income

652

(955)

672

950

662

1,039

Reconciling items:

Unlockings and experience true-ups

(1)

(1,320)

359

336

(222)

Write off of Allstate goodwill

(97)

Reinsurance contract refinement

(2)

Expenses estimated in excess of baseline level

(17)

Impairment of capitalized software

(9)

Sub-total

(1,417)

359

361

(222)

Individual Annuities pre-tax adjusted operating income

excluding disclosed items indicated above

572

462

313

589

884

984

1) included adjustments of amortization of deferred policy acquisition costs and other amortization items, and reserves for

guaranteed minimum death and income benefits

2) represents refinements based on a review and settlement of reinsurance contracts related to acquired business

Reconciliation for International Insurance Pre-Tax Adjusted

Operating Income excluding Indicated Disclosed Items

2008

2009

2010

2011

2012

International Insurance pre-tax adjusted operating income

1,581

1,651

1,887

2,263

2,704

Reconciling items:

China Pacific gains

237

Star / Edison transaction and integration costs

(213)

(138)

Sub-total

(78)

International Insurance pre-tax adjusted operating income excluding

disclosed items indicated above

1,581

1,651

1,821

2,239

2,782

John Strangfeld

Chairman and CEO

Prudential Financial, Inc.

Investor Day 6.18.2013

Roadmap to Sustainable and Appropriate ROE

(1)

2011

BASELINE

(2)

11%

2013

TARGET

13-14%

CAPITAL DEPLOYMENT

BUSINESS ROE EXPANSION

For

Financial

Services

Businesses

(FSB).

Based

average

attributed

equity

excluding

total

accumulated

other

comprehensive

income.

2) Represents Return on Equity (ROE) for the FSB excluding market driven and discrete items disclosed in the Company’s earnings press releases. Reflects

the adoption of amended accounting guidance for deferred policy acquisition costs effective January 1, 2012, and the discretionary change in accounting

principle related to the Company's pension plans.

•

Higher Margins

•

Business Growth

•

Star/Edison Integration

•

PRT

•

Hartford

•

Shareholder Distributions

Investor Day 6.18.2013

Prudential’s Investor Value Proposition

SUPERIOR

PERFORMANCE

TALENT

CAPITAL

MANAGEMENT

PORTFOLIO OF

BUSINESSES

QUALITY

BUSINESSES

•

Well Diversified

•

Life, Retirement,

Asset Management

•

US & International

•

Balance of Risks

•

Financial Strength

•

Disciplined Balance of:

Organic Growth

M&A

Return to Shareholders

•

Proven Acquisition &

Integration Track Record

•

Strategic Imperative

•

Quality, Depth &

Diversity

•

Culture of:

Collaboration

Innovation

Execution

•

Market Leader in

Chosen Markets

•

Premium Brand

•

Strong Fundamentals

Mark Grier

Vice

Chairman

Prudential Financial, Inc.

Prudential’s U.S. Businesses

Charles Lowrey

Executive Vice President and

Chief Operating Officer, U.S.

Agenda

Investor Day 6.18.2013

•

Executive Summary

•

Overall U.S. Strategy

•

Review of U.S. Businesses

•

Conclusion

•

Our U.S. businesses are positioned to benefit from a cyclical recovery, as well as from

favorable secular growth trends, and to achieve appropriate returns

–

Retirement

–

Pension plan de-risking

–

Longevity

–

Individual asset accumulation

•

Our primary focus is on profitable growth rather than on market share

–

Expected returns drive decisions

–

Sales volume is an outcome

•

We have taken steps to reduce volatility

–

Significantly scaled back Asset Management’s strategic investing

–

Modified variable annuity benefits

•

We are pursuing opportunities that capitalize on our combined set of business capabilities

–

Pension Risk Transfer solutions

–

Other platforms for asset management flows

Executive Summary

Investor Day 6.18.2013

Agenda

•

Executive Summary

•

Overall U.S. Strategy

•

Review of U.S. Businesses

•

Conclusion

Investor Day 6.18.2013

There are Three Elements to our U.S. Strategy

•

Consistently focus on execution

–

Manage profitability through pricing discipline and operational efficiency

–

Carefully manage distribution systems

•

Within each business, identify and pursue additional profitable growth opportunities

–

Focus

secular

growth

trends

within

broader

set

addressable

markets

•

Enhance our competitive advantage by leveraging the distinctive combination of

capabilities across our businesses

–

Product capabilities with respect to Insurance, Asset Management, and Retirement and

Annuities

–

Capital and Risk Management capabilities

Investor Day 6.18.2013

Trends

Opportunities

Prudential Solutions

Retirement Wave

•

10,000 retirees every day through 2030

•

Retirees and near-retirees control vast

majority of investable assets

•

Outcome-oriented products

•

Retirement income

Retirement Savings

Adequacy Gap

•

Generations X and Y need to increase

retirement savings

•

Innovative solutions to drive

higher savings, both in and out of

retirement plans

Changing U.S.

Retirement System

•

Fundamental change in how corporate

defined benefit (DB) plans are managed

•

Increased reliance on defined contribution

(DC) plans

•

Liability-driven investing

•

Pension Risk Transfer

•

Stable Value

•

DB-like outcomes

Longevity

•

A 65 year-old has a 26% chance of living to

90, and an 11% chance of living to 100

•

Retirement income

•

Living benefits

•

Longevity insurance

Investment

Strategies

•

Shift from focus on relative benchmark

returns to solutions that offer guarantees,

risk control, upside participation

•

Institutional and retail outcome-

oriented solutions that leverage

asset management, risk

management, and insurance

capabilities

Collateral Effects of

Healthcare Reform

•

Employers are revisiting overall employee

benefits strategy

•

Group voluntary products

Several Trends are Creating Opportunities

Across our Markets

Investor Day 6.18.2013

Our Businesses are Positioned to Capitalize on

Market Opportunities

•

We like our business mix

–

Divested non-core businesses

–

Discontinued sales of non-core products

–

Increased scale and capabilities in insurance through acquisition

–

Expanded our retirement presence through Investment Only Stable Value and

Pension Risk Transfer

•

Our portfolio of businesses provides diversification of risk exposure

–

Equity markets

–

Interest rate levels

–

Mortality and longevity

•

We serve a broad set of institutional and retail customers through multiple

distribution channels

–

Cross-business management of key client, distribution, and consultant relationships

Investor Day 6.18.2013

1,500

Asset

Management

clients

(1)

7,900

Retirement DB and DC plans

22,500

Group institutional clients

We have an Extensive Presence across the

Institutional and Retail Marketplace

Numbers reflect rounding

As of 3/31/13. Other data shown is as of 12/31/12.

Third party financial professionals counted on a product-by-product basis.

3.8

million

and

participants

and

annuitants

(1)

28 million

Individuals covered by group insurance contracts

7 million

Individual

Life

policyholders

(1)

1.3 million

Individual

Annuity

contract

holders

(1)

120,000

Third

party

financial

professionals

selling

our

products

(2)

2,700

Prudential

agents

(1)

500

Prudential

wholesalers

(1)

140 of Fortune 500 companies

78 of largest 100 U.S. retirement plans

Over 6 million retiree and

near-retiree customers

Investor Day 6.18.2013

We Benefit from a Diversified Business Mix

Less market sensitive businesses:

Retirement, Insurance

More market sensitive businesses:

Annuities, Asset Management

2012

Pre-Tax

AOI

(1)

$2,580 million

1Q13

EOP

Attributed

Equity

(2)

$16.8 billion

Pre-tax Adjusted Operating Income (AOI) of the U.S. Businesses.

Attributed equity of the U.S. Businesses as of 3/31/13, excluding accumulated other comprehensive income.

Represents the U.S. Individual Life and Group Insurance Division.

Investor Day 6.18.2013

Our Differentiated Product Capabilities are Wrapped in

Strong Risk and Capital Management Capabilities

Investor Day 6.18.2013

With these Product Capabilities, We Provide a Diverse

Set of Solutions to Individuals and Institutions

Retail Funds

and Institutional

Solutions

Protection and

Savings Solutions

Asset Accumulation

and Income Solutions

Risk Transfer Solutions

Investor Day 6.18.2013

These Solutions Generate a Broad Set of Customer Flows

Retail Funds

and Institutional

Solutions

Protection and

Savings Solutions

Asset Accumulation

and Income Solutions

Risk Transfer Solutions

Investor Day 6.18.2013

Our Product Capabilities also Create Additional

Asset Management Opportunities

Retail Funds

and Institutional

Solutions

Protection and

Savings Solutions

Asset Accumulation

and Income Solutions

Risk Transfer Solutions

Investor Day 6.18.2013

Proprietary

Flows

Proprietary

Flows

Retirement and

Annuities

Insurance

Asset

Management

Our Capabilities are Mutually Supportive and, When Combined,

Address a Broader Set of Customer Needs

Retail Funds

and Institutional

Solutions

Protection and

Savings Solutions

Asset Accumulation

and Income Solutions

Risk Transfer Solutions

Investor Day 6.18.2013

Solutions leveraging our

combined capabilities:

Pension

Risk

Transfer

Target

Date

Solutions

Income

Solutions

Outcome-oriented

Investment

Solutions

Group/Individual

Life

Combination

Products

Retirement and

Annuities

Insurance

Asset

Management

As an Example, Pension Risk Transfer Draws Upon

Our Full Set of Combined Capabilities

•

Rising need for de-risking solutions for U.S. plan sponsors

–

Stricter pension funding rules

–

Shift from DB to DC plans

–

Increasing accounting transparency

–

Asset risk and longevity risk awareness

•

Prudential is exceptionally well positioned by virtue of its:

•

Prudential emerged as the U.S. Pension Risk Transfer market

leader with two industry-shaping transactions in 2012

Investor Day 6.18.2013

–

Investment management skills

–

Risk management skills

–

Actuarial capabilities

–

Strong balance sheet

–

Respected brand

–

Retiree client service platform

–

Industry-leading talent

–

General Motors: $25 billion group annuity contract; 110,000 retirees

–

Verizon: $8 billion group annuity contract; 41,000 retirees

Catalysts

Unique

Capabilities

World-Class

Counterparties

Agenda

Investor Day 6.18.2013

•

Executive Summary

•

Overall U.S. Strategy

•

Review of U.S. Businesses

•

Conclusion

Annuities

•

Market leading position across multiple distribution channels

•

Disciplined approach to managing profitability and exposure

–

Pricing discipline to ensure we meet our hurdle rates

–

Sales discipline to ensure appropriate overall earnings mix

•

Several product changes and introductions within the last year to reduce risk and volatility

•

Source of proprietary investment management opportunities

•

Additional profitable growth opportunities

–

New

products

meet

market

demand

for

broad

set

retirement

income

solutions

Investor Day 6.18.2013

Annuities: Sales, Flows, and Account Values

Account

Values

(1)

($ billions)

Sales and Net Flows

($ billions)

As of end of period.

$21.8

$20.3

$20.0

$13.4

$11.7

$11.8

$10

$15

$20

$25

2010

2011

2012

Gross Sales

Net Flows

$106.2

$113.5

$135.3

$20

$40

$60

$80

$100

$120

$140

$160

2010

2011

2012

Investor Day 6.18.2013

•

Market leader in Institutional Investment Products

–

Pension Risk Transfer

–

Investment Only Stable Value

–

Improves operational efficiency and customer experience

–

Strengthens this platform for stable value and other investment products

•

Balanced earnings mix between these two platforms

–

Institutional

Investment

Products

now

contributes

than

half

segment

earnings

–

Mix of fee and spread income

•

Source of proprietary investment management opportunities

•

Additional profitable growth opportunities:

–

U.S.

and

International

Pension

Risk

Transfer

expansion

–

pace

transactions

will

lumpy

–

Additional markets for Investment Only Stable Value

–

Addressing marketplace gaps in retirement plan coverage, retirement savings adequacy, and

longevity protection

Retirement

Investor Day 6.18.2013

•

Significantly enhancing our recordkeeping capabilities in Full Service, a fully integrated

platform for DB, DC, and non-qualified plans

$34.6

$44.6

$71.4

$10

$20

$30

$40

$50

$60

$70

$80

2010

2011

2012

Full Service

Other Institutional Investment Products

Pension Risk Transfer

$10.8

$19.3

$43.7

$10

$15

$20

$25

$30

$35

$40

$45

$50

2010

2011

2012

$205

$230

$290

$50

$100

$150

$200

$250

$300

$350

2010

2011

2012

Full Service

Institutional Investment Products

Retirement: Sales, Flows, and Account Values

As of end of period.

Sales

($ billions)

Account

Values

(1)

($ billions)

Net Flows

($ billions)

Investor Day 6.18.2013

Asset Management

•

$827 billion in assets under management as of December 31, 2012

•

Robust organic growth through the financial crisis

–

consecutive

quarters

positive

third

party

institutional

net

flows

(1)

–

Successful entry to the closed-end fund market

–

Asset Management fees have grown at 12% annually since 2010

•

Strong investment returns

–

74% of assets exceeded benchmarks over the past three years

•

Continuing to reduce volatility from Other Related Revenue

•

Additional profitable growth opportunities:

–

Proprietary target date solutions, and other outcome-oriented solutions

–

Further pension plan de-risking (Pension Risk Transfer, Liability-driven investing)

–

Increased proprietary flows from other business platforms

–

Increasing globalization of asset management

Excluding money market flows.

Investor Day 6.18.2013

$606

$718

$827

2010

2011

2012

$100

$200

$300

$400

$500

$600

$700

$800

$900

Asset Management: AUM and Fees

Asset Management Fees

by Asset Type

($ millions)

AUM

Asset

Type

(1)

($ billions)

Public Fixed Income

Private Fixed Income

Equity

Real Estate

Commercial

Mortgages

As of end of period.

Includes Commercial Mortgages.

$1,326

$1,541

$1,667

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

$1,800

2010

2011

2012

Fixed Income

Equity

Real Estate

Investor Day 6.18.2013

(2)

Asset Management: Revenue Mix

Excludes Service, Distribution and Other Revenues.

Not restated for International Investments.

Includes CDOs.

2007

(1)(2)

$1.6 billion

2012

(1)

$1.9 billion

Key developments since 2007:

•

Growth in asset management fees

•

Reduced strategic investing exposure from 2008 peak levels

–

Interim

portfolio

reduced

from

$1.9

$0.3

billion

(3)

–

Total strategic investing portfolio reduced from $2.7 to $1.0 billion

–

Strategic investments per fund reduced from $44 to $19 million

•

Exited commercial mortgage securitization conduit

Asset Management Fees

Other Related

Revenue

Investor Day 6.18.2013

66%

34%

89%

11%

Asset Management: Flows

Third Party, excluding Money Market activity.

($ billions)

Net Flows

(1)

$28.7

$16.9

$17.2

$7.8

$5.7

$12.8

$36.5

$22.6

$30.0

$10

$15

$20

$25

$30

$35

$40

2010

2011

2012

Institutional

Retail

Investor Day 6.18.2013

Asset Management: AUM Growth Attribution

($ billions)

Investor Day 6.18.2013

$28

$114

$159

$124

$111

($6)

$288

$439

$827

2002 AUM

Net Flows

2007 AUM

Net Flows

Market /

Asset

Appreciation

Other

International

Investment

Management

(1)

Market / Asset

Appreciation

Other

(2)

$100

$200

$300

$400

$500

$600

$700

$800

$900

2012 AUM

International Investment Management represents 12/31/12 EOP AUM. Results of the majority of the company's international investments operations,

formerly included in the International Insurance segment, have been reclassified and included in the Asset Management segment as of 12/31/2012.

This reflects the Company's decision to align the management of these businesses.

Other includes Money Market flows, foreign exchange rate and other activity.

Individual Life Insurance

•

Market leader with strong profitability

–

Maintaining pricing discipline

–

Focusing on most profitable distribution partners

•

Inherently stable business and important source of cash flow

•

Product mix limits overall interest rate and equity market sensitivity

•

Additional profitable growth opportunities

–

Integration of Hartford Life acquisition

•

Expands scale

•

Provides complementary distribution

•

Enhances product innovation capabilities

•

Generates appropriate returns over time

–

Underserved markets

Investor Day 6.18.2013

Individual Life: New Business Premiums and In-force

Excludes corporate-owned life insurance.

As of end of period, before reinsurance ceded.

Annualized

New

Business

Premiums

(1)

($ millions)

Face

Amount

Force

(2)

($ billions)

$260

$278

$412

$50

$100

$150

$200

$250

$300

$350

$400

$450

2010

2011

2012

Variable

Universal

Term

$613

$631

$670

$100

$200

$300

$400

$500

$600

$700

$800

2010

2011

2012

Investor Day 6.18.2013

Group Insurance

•

New senior management team

•

Making progress with respect to profitability in Disability

–

One-third of the book has been repriced or lapsed over the past year

–

Investing heavily in claims management

–

Improving benefit ratio

•

Group Life benefiting from strong demand for voluntary products

–

Approximately 70% of sales in 2012

•

Additional

profitable

growth

opportunities

from

new

and

existing

voluntary

products

Investor Day 6.18.2013

Disability Benefit Ratio

Life Benefit Ratio

Group Insurance: Premiums

Annualized New Business Premiums

($ millions)

Force

Premiums

(1)

($ millions)

As of end of period; net of reinsurance.

$4,612

$5,071

$5,172

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

2010

2011

2012

Life

Disability

$568

$635

$439

$100

$200

$300

$400

$500

$600

$700

2010

2011

2012

Voluntary Life

Basic Life

Disability

Investor Day 6.18.2013

Agenda

•

Executive Summary

•

Overall U.S. Strategy

•

Review of U.S. Businesses

•

Conclusion

Investor Day 6.18.2013

Conclusion

•

We have an extensive presence across the institutional and retail marketplace

•

are

poised

continue

benefit

from

cyclical

recovery

the

economy

and capital markets

•

We are favorably leveraged to longer-term secular growth trends

–

Retirement

–

Pension plan de-risking

–

Longevity

–

Individual asset accumulation

•

Each respective business is focused on achieving profitable growth

–

Sustaining strong execution and discipline in our current markets

–

Identifying and pursuing additional growth opportunities

•

Across our businesses, we are pursuing additional opportunities where we are

competitively advantaged by our distinctive combination of capabilities

Investor Day 6.18.2013

Prudential Annuities

Robert O’Donnell

President

Prudential Annuities

Variable Annuities is a Core Prudential Business

In Force Valuation

•

Our in force portfolio has significant value and will produce positive cash

flows over the remaining life in diverse scenarios

Risk Management

•

Our risk management efforts focus on reducing capital markets risk and

maintaining a strong capital position

New Business

•

Our new business produces positive cash flows and offers favorable returns

in the current interest rate environment

Investor Day 6.18.2013

Company

Perspective

Customer and Distributor

Perspective

•

Lifetime retirement income

security

•

Equity Market participation

•

Flexible access to account value

•

Account value protection in

down markets

•

Demonstrated commitment

to business

•

Innovative product offerings

•

Contributes to Prudential’s

business and risk diversification

•

Solid returns and growth

over time

•

Strong track record in product-

based risk management

•

Capital market protection

through hedging program

Value Proposition

Investor Day 6.18.2013

Year End 2009

(1)

$81 billion

Year End 2012

(1)

$132 billion

Improved Risk

Profile

Living Benefit with

Auto-Rebalancing

Living Benefit without

Auto-Rebalancing

No Living Benefits

Improving Risk Profile of

In Force Variable Annuity Block

Variable annuity account values were composed of 52% of equity funds and 48% of fixed income at end of 2009 and 57% of equity funds and 43% of fixed

income at end of 2012.

Investor Day 6.18.2013

43%

22%

35%

70%

12%

18%

Key Risks and Risk Management

Risks

Mitigants

•

Hedging mitigates capital market risk of living

benefit features

•

Auto-rebalancing at contract level

•

Account value is first source of funding for

lifetime income

•

Rigorous management of asset allocation options

•

Assumptions based on industry standards

•

Best estimates refreshed annually

•

Assumptions based on historical data

•

Best estimates refreshed annually

Investment

Performance

Mortality/

Longevity

Policyholder

Behavior

Investor Day 6.18.2013

Capital

Markets

In Force Valuation

Investor Day 6.18.2013

Profile of Baseline Assumptions for In Force Contracts

Based on GAAP best estimates as of 12/31/12.

Long term expected equity market return. Expected return in four

year look forward period is 9.1%.

Long term expected fixed income return. Expected return in four

year look forward period is 1.4%.

Policyholder behavior assumptions for guaranteed lifetime withdrawal benefit products only.

Lapse rates prior to the dynamic lapse adjustment.

After shock lapses.

Capital

Markets

Policyholder

Behavior

(4)

Baseline

Assumptions

(1)

Equity

Market

Return

(2)

6.0% appreciation plus

2.0% dividend yield

Fixed

Income

Return

(3)

3.6%

Blended Return

~6.0% annually

Living Benefit Liability is Hedged

Investor Day 6.18.2013

Base Annual Lapse Assumptions

Inside Surrender Charge Period

1.0%

(5)

Outside

Surrender

Charge

Period

(6)

9.0%

(5)

Dynamic Lapse Assumption

5.4%

Benefit Utilization

95% take lifetime withdrawals

Benefit Efficiency

85% of guaranteed amount

In Force is Expected to Produce Positive

Future Cash Flows

Reflects total remaining contract cash flows based upon the in force book of business as of 12/31/12.

Cash

flows

are

shown

present

value

basis,

are

discounted

the

forward

curve,

and

reflect

the

results

hedging

activity.

Baseline Scenario Cash Flows

(1)(2)

Investor Day 6.18.2013

In a Range of Capital Market Scenarios, the In Force Book

Produces Positive Cash Flows, Including the Impact of Hedging

Reflects total contract cash flows based upon the in force book of business as of 12/31/12.

Cash

flows

are

shown

present

value

basis,

are

discounted

the

forward

curve,

and

reflect

the

results

hedging

activity.

The

positive

market

scenarios

reflects

immediate

shock

10%

30%

12/31/12

followed

baseline

equity

market

returns

thereafter

with

fixed

income

returns 100bps above the expected long term rate. Assumes baseline policyholder behavior assumptions.

The

negative

scenario

reflects

immediate

down

shock

30%

12/31/12,

followed

baseline

equity

returns,

coupled

with

flat

10-year

treasury

rate

1.78%.

Assumes baseline policyholder behavior.

The break-even scenario reflects annual equity return of -9% (including dividend yield). Fixed income returns and policyholder behavior reflect our baseline

assumptions.

Investor Day 6.18.2013

PV of Total

Contract Cash

Flows

(1)(2)

Positive Markets

(3)

Baseline

Negative Markets

(4)

Break Even

(5)

+30%

+10%

$18.4

$16.6

$5.0

$0.0

21.1

Equity Markets

Immediate Shock

+10% / +30%

n/a

-30%

n/a

Post-shock Annual Equity Returns

Baseline

-9% annually

Fixed Income

Long Term

Assumption + 100bps

Baseline

Flat

Baseline

Lapse Rates Linked to “In-the-Moneyness”

Investor Day 6.18.2013

10%

12%

14%

16%

20%

40%

60%

80%

100%

Account Value (AV) / Protected Withdrawal Value (PWV)

Current GLWB Assumption

9% -

Baseline lapse rate

5.4% -

Current dynamic lapse

assumption

Rate approaches 1%

as AV/PWV 20%

Lapse

Rates

(1)

“In-the-Moneyness”

(2)

Lapse rates are post surrender charge period, post “shock“ lapses experienced immediately after the surrender charge period and reflect GLWB

product assumptions only.

“In-the-Moneyness” (Protected Withdrawal Value less Account Value) is used to develop the percentage of the protected withdrawal value that is

covered by the account value.

Lifetime Withdrawal Benefit Utilization

and Efficiency Assumptions

•

We assume 95% of policyholders exercise their lifetime withdrawal benefit

•

For policyholders that do exercise their lifetime withdrawal benefit we

assume greater efficiency than observed

Actual

Assumption

% of AIA (Annual Income Amount) represents the weighted average withdrawal rate as a percentage of maximum benefit withdrawal allowed without affecting

future policyholder benefit payments for policyholders with a lifetime withdrawal benefit.

Investor Day 6.18.2013

% of AIA

(1)

85%

% of AIA

(1)

82%

Strong, Positive Cash Flows Even if Future Policyholder

Behavior Deviates from Expectations

Investor Day 6.18.2013

PV of Total

Contract

Cash

Flows

(1)(2)

$17.6

$16.6

$13.6

Lower Lapses

(3)

Baseline

Higher Benefit

Efficiency

(4)

Lapses

All periods reduced by

20%

Baseline

Benefit Efficiency

Baseline

95% of guaranteed

amount

Reflects total contract cash flows based upon the in force book of business as of 12/31/12.

Cash flows are shown on a present value basis, are discounted at the forward curve, and reflect the results of hedging activity.

The lower lapse scenario reflects a 20% reduction to baseline lapse rates across all periods. Capital market and benefit utilization assumptions are

unchanged relative to the baseline scenario.

The higher benefit efficiency scenario reflects a 10% increase in benefit efficiency (from 85% to 95%) across all periods. Capital market and benefit

utilization assumptions are unchanged relative to the baseline scenario.

Resilient Cash Flows Despite Severely Adverse Market and

Policyholder Behavior Scenarios

Reflects total contract cash flows based upon the in force book of business as of 12/31/12.

Cash

flows

are

shown

present

value

basis,

are

discounted

the

forward

curve,

and

reflect

the

results

hedging

activity.

The lower lapse scenario reflects a 20% reduction to baseline lapse rates across all periods. Equity Markets reflect an immediate 30% down shock followed by

baseline

annual

growth

coupled

with

flat

10-year

treasury

rate

1.78%.

Benefit

utilization

assumptions

are

unchanged

relative

the

baseline

scenario.

The higher benefit efficiency scenario reflects a 10% increase in benefit efficiency (from 85% to 95%) across all periods. Equity Markets reflect an immediate 30%

down

shock

followed

baseline

annual

growth

coupled

with

flat

10-year

treasury

rate

1.78%.

Benefit

utilization

assumptions

are

unchanged

relative

the

baseline scenario.

Investor Day 6.18.2013

Notional amount –

cannot be accessed

by contract holder

Represents

products

with

guaranteed

lifetime

withdrawal

benefits

(GLWB)

12/31/12.

Represents our living benefit exposure, as of 12/31/12, based upon policyholder's guaranteed lifetime annual income amount on that date.

Our True Exposure is Significantly Less Than

the

Notional

“In-the-Moneyness”

(1)

Protected

Withdrawal

Value

$109 billion

Notional

“In-the-

Moneyness”

$14 billion

Account Value

$95 billion

$2 billion

Economic

Investor Day 6.18.2013

“In-the-Moneyness”

(2)

Risk Management

Investor Day 6.18.2013

Account Value by Year of Issue

(1)

Account

value represents the variable annuity inforce account value as of 12/31/12 for policies sold in each cohort year and include subsequent premiums in the

year the original policy was sold.

Investor Day 6.18.2013

% of 12/31/12

Account Value

20.8%

5.2%

6.1%

7.3%

15.7%

17.1%

14.4%

13.4%

Total $107.3 billion

Total $24.3 billion

Account Value w/Living Benefit

Account Value w/o Living Benefit

Average S&P 500 Level

Total Account Value of $132 billion as of 12/31/12

Reducing Risk Through Product Design and Pricing

Account value represents the variable annuity in force account value as of 12/31/12 for policies sold in each cohort year and include subsequent premiums

in the year the original policy was sold.

Additional

detailed

product

changes

can

found

the

appendix

slide

30.

•

Increased living

benefit rider fee

•

Reduced roll-up rate

•

Increased living benefit rider fee

•

Reduced roll-up rate

•

Account doubling period

lengthened

De-risking

(2)

•

Increased

living benefit

rider fee

•

Increased

minimum issue

age

•

Increased age

for 5% income

payout

•

Eliminated

subsequent

premiums

•

Stopped sales

of X-share

Investor Day 6.18.2013

Hedge Program Overview

•

Objectives

–

Severe scenario

protection

–

Maximize capital

efficiency

–

Minimize earnings

volatility

•

Strong performance

through full economic

cycles

Capital Markets Hedging

Overview

Capital Markets Hedging

Approach

•

Aims to replicate the market

sensitivities of our living

benefits

•

Uses derivatives to ensure

protection in any economic

scenario

Investor Day 6.18.2013

Historical Hedge Program Results

(1)(2)

Excludes differential related to the assumption unlocks because they are not hedged.

We hedge to our economic view of the liability. The hedge target

is grounded in a GAAP/Capital markets valuation framework that incorporates modifications to

GAAP including alteration to the risk-free return assumption to account for customer selected funds invested in risk bearing assets.

Prudential

did

not

hedge

100%

the

hedge

target,

but

holds

capital

against

portion

the

interest

rate

exposure

rather

than

fully

hedging

the

risk.

The

underhedge

mitigates enterprise exposure to rising interest rates.

Investor Day 6.18.2013

(2)

(3)

0.0

0.1

$(4.5)

$(3.5)

$(2.5)

$(1.5)

$(0.5)

$0.5

2005

2006

2007

2008

2009

2011

2012

Yearly Net Gain/(Loss) vs. Hedge Target

Yearly Net Gain/(Loss) on Interest Rate Underhedge

Cumulative Net Gain/(Loss) vs. Hedge Target

Cumulative

Hedge

Differential

= ($0.5B)

2010

GAAP Balance Sheet -

VA Footprint

(1)

Includes Fixed Annuities.

Deferred Acquisition Costs (DAC) and Deferred Sales Inducements (DSI).

Accumulated Other Comprehensive Income.

Includes ~$4 billion of equity attributable to PrucoRe.

Investor Day 6.18.2013

Accounting Framework Captures the Fair Value of our

Living Benefit Liabilities

Prudential’s mark to market accounting framework, FAS 133/157, applies a

valuation methodology that results in increased volatility in earnings and equity

Under FAS 133/157 accounting we are required to incorporate the market-perceived risk of our own non-performance (NPR) in the valuation of the embedded

derivatives associated with our optional living benefit features.

Accounting

Framework

Reserve

Valuation

NPR

(1)

Earnings &

Equity

Volatility

Path Dependent

Required

Equity

Reserve

Impact

Path Dependent

Investor Day 6.18.2013

Impact of Assumption Updates

Reflects Accounting Framework

•

The impact of a change to baseline lapse assumptions measured under each construct

•

The negative impact of a reduction to our lapse assumption is magnified under FAS 133/157

Assumption Update Impact of Lapse Reduction

The arrows above represent a proxy for SOP 03-1 & FAS 133/157 (excl. NPR) accounting frameworks. SOP 03-1 accounting utilizes management’s best

estimates of capital markets performance to value liabilities while FAS 133/157 (fair value) accounting assumes a risk neutral environment.

SOP 03-1

(1)

FAS

133/157

(1)

Positive GAAP Net

Income Impact

Negative GAAP Net

Income Impact

Investor Day 6.18.2013

Capital Protection Framework Provides

Sufficient Coverage in Tail Scenarios

Assumes shock occurs on 12/31/12 for overall block of business in force; represents gross change in statutory capital requirements, inclusive of capital

requirements in reinsurance captive, immediately following shock.

Equity

Shock

Impacts

(1)

$ billions

Interest

Rate

Shock

Impacts

(1)

$ billions

Combined

Equity

Interest

Rate

Shock

Impacts

(1)

$ billions

Investor Day 6.18.2013

Capital

Protection

Framework:

•

On-balance

Sheet

Capital

•

Derivatives

•

Reinsurance

•

Contingent

Sources

Capital

Requirements

Increase

Decrease

Down 30%

Down 10%

Up 10%

Up 30%

$(0.4)

$(0.7)

$2.7

$0.4

Capital

Requirements

Increase

Decrease

Down 100 bps

Down 10 bps

Up 10 bps

Up 100 bps

$(0.2)

$(0.7)

$1.2

$0.0

Increase

Decrease

-30% Equity & -

100bps Interest

-30% Equity &

-10bps Interest

$2.3

$0.5

$5.1

$2.9

Capital

Requirements

-10% Equity &

-100bps Interest

-10%

Equity

-10bps Interest

New Business

Investor Day 6.18.2013

•

HDI 2.1 launched in February 2013, includes further de-risking

measures

Investor Day 6.18.2013

–

Rollup rate for protected value: 5% on highest daily value, limited to

earlier of 10 years or first lifetime withdrawal

–

Earliest age to receive 5% income payment rate is 70 (from 65)

–

Income payment rate reduced to 3.5% at ages 55-59

1/2

(from 4%) and 4.5% at

ages 65-69 (from 5%)

–

200% protected value guarantee at 12 years no longer available

–

Reduced compensation rates

–

Produces expected returns that meet or exceed targets even in an

environment

of continued low interest rates

New

Business

Offerings

Increase

Shareholder

Value

New Business Produces Positive Cash Flows

Reflects total contract cash flows based upon the HDI 2.1 product design.

Cash

flows

are

shown

present

value

basis,

are

discounted

the

forward

curve,

and

reflect

the

results

hedging

activity.

Each bar represents a discrete year.

PV of Fees

$380 million

PV of Expenses and

Benefits

($234) million

Investor Day 6.18.2013

The present value of baseline new business cash flows equals $146 million per

$1 billion of sales

(1)

$(80)

$(60)

$(40)

$20

$40

$60

$80

$(20)

PV of Cash

Flows

(2)(3)

$146 million

Variable Annuities is a Core Prudential Business

In Force Valuation

•

Our in force portfolio has significant value and will produce positive cash

flows over the remaining life in diverse scenarios

Risk Management

•

Our risk management efforts focus on reducing capital markets risk and

maintaining a strong capital position

New Business

•

Our new business produces positive cash flows and offers favorable returns

in the current interest rate environment

Investor Day 6.18.2013

Appendix

Investor Day 6.18.2013

$(1.5)

$(1.0)

$(0.5)

$0.5

$1.0

$1.5

$2.0

$2.5

$3.0

$3.5

In Force Produces Positive Cash Flows

under Baseline Assumptions

The

present

value

remaining

force

baseline

cash

flows

equals

$16.6

billion

(1)

PV of Fees

$27.8 billion

PV of Cash Flows

$16.6 billion

(2)(3)

PV of Expenses and Benefits

($11.2) billion

Investor Day 6.18.2013

Reflects total contract cash flows based upon the in force book of business as of 12/31/12 with each bar representing a discrete year.

Cash flows are shown on a present value basis, are discounted at the forward curve, and reflect the results of hedging activity.

Reflects the baseline capital market and policyholder behavior assumptions found on slide 7.

Adapting to Changing Markets

Single life contract.

HD Lifetime Five basis point charge based on account value, all other products based on protected withdrawal value.

Represents the average S&P 500 level and 10yr treasury rate until the introduction of the next product change.

Average as of 3/31/13.

Investor Day 6.18.2013

Prudential

Rider

HD Lifetime

Five

HD Lifetime

Seven

HD Lifetime

Seven +

HD Lifetime

Six +

HDI

2.0

HDI

v2.1

Introduced

November

2006

January

2008

February

2009

August

2009

January

2011

August

2012

February

2013

Basis Point

Charge

(1)

(2)

100

Age for

5% Payout

(1)

1/2

200%

Protected

Value

Guarantee

10 yrs

12 yrs

N/A

Minimum

Issue Age

(1)

Average

S&P 500

(3)

1,467

1,195

863

1,118

1,298

1,430

1,532

(4)

Average 10 yr

TSY

(3)

4.63%

3.58%

3.21%

3.29%

2.45%

1.74%

1.97%

(4)

$572

$462

$313

$589

$884

$984

$652

$(955)

$672

$950

$662

$1,039

$(1,500)

$(1,000)

$(500)

$500

$1,000

$1,500

2007

2008

2009

2010

2011

2012

Adjusted operating income

($ millions)

Reported

$503

Six Year

Average

Excluding

indicated

items

$634

Growing Baseline Operating Results

Investor Day 6.18.2013

Excluding impact of:

•

Changes in the estimated profitability on reserves for GMDB/GMIB

•

Amortization of DAC and other costs

•

Other discrete items

Reported

(1)

Inclusive of expenses estimated in excess of baseline level for 2012.

47%

51%

53%

56%

59%

61%

63%

64%

65%

67%

69%

70%

21%

19%

18%

17%

16%

15%

14%

13%

12%

32%

30%

29%

27%

25%

24%

23%

22%

21%

20%

19%

18%

$85

$84

$93

$102

$110

$112

$103

$110

$120

$129

$132

$20

$40

$60

$80

$100

$120

$140

With living benefits,

With automatic rebalancing

With living benefits,

Without automatic rebalancing

Without living benefits

Improving Risk Profile

Variable Annuity

Account Value Risk Profile

(1)

Investor Day 6.18.2013

As of end of period.

Edward Baird

Executive Vice President and

Chief Operating Officer, International

Prudential International Insurance

Investor Day 6.18.2013

Key Messages

•

Proven strategy and successful execution

•

High ROE, steady AOI growth, low volatility

•

Core Life Planner model supplemented by multiple channels

•

Leading position in Japan, expanding in other markets

Investor Day 6.18.2013

Overview

Investor Day 6.18.2013

2012 Snapshot

Market Leader in Japan

Broad Channel & Product Diversification

2012 Operation Highlights

(1)

Annual Sales

In-force Policies

In-force Face Amount

Captive Agents

Bank Partners

Independent Agencies

Employees

Pre-Tax AOI

AOI

CAGR

(2007

2012)

ROE

$4 billion

12 million

$877 billion

~18,000

70+

~3,400

~28,000

$2.8 billion

15%

17.5%

1) Pre-tax Adjusted Operating Income (AOI) excludes Star / Edison integration costs and gains on China Pacific investment. Return on Equity (ROE) is based on

after-tax AOI excluding aforementioned items and overall effective tax rate for the Financial Services Businesses. Foreign denominated activity and face

amount are translated into U.S. dollars at 2013 plan exchange rates including Japanese yen 80 per U.S. dollar, and Korean won 1,160 per U.S. dollar. U.S.

denominated activity is included based on the amounts as transacted in U.S. dollars.

Investor Day 6.18.2013

Our Historical Strategy and

Business Model…

…Is the Foundation For Our

Evolving Strategy

•

Concentrate on a limited number of

attractive countries

•

Target the affluent and mass-

affluent consumer

•

Needs-based selling

•

Proprietary distribution based on

selective recruiting, professional

training, performance-based

variable compensation

•

Historical focus on death

protection insurance

•

Concentrate on a limited number of

attractive countries

•

Expand the breadth and depth of our

capabilities in those countries

Target middle to mass-affluent

consumer and small/medium

business market

Diversify distribution and products to

meet additional customer needs

•

Maintain our proven discipline,

quality, and execution

in all markets,

channels, products, and customer

relationships

The Evolution of our International Strategy

Investor Day 6.18.2013

World Life Insurance Markets

•

Japan is the largest market in the world after the U.S.

•

South East Asia is growing fast, but the market size is still small (<2% of world)

2011 Life Insurance Premiums

(1)(2)

($ billions)

$417

China

Korea

Taiwan

India

SE Asia

Other

$538

$525

$65

$210

$175

$114

United

States

Japan

Asia ex

Japan

Latin

America

United

Kingdom

France

Germany

Source: Swiss Re. Based on 2011 life premium volume, foreign denominated activity translated to U.S. dollars at average exchange rates for 2011.

World total life premiums are $2,627 billion. Chart not inclusive of the remainder of Europe, Africa, Oceania and Canada.

Investor Day 6.18.2013

Growing Sales Throughout Multiple Channels

Annualized New Business Premiums

(1)

$1,389

$1,545

$1,929

$3,157

$4,051

•

Bank

and

Independent

Agency

channels

supplement

tied

agency

channels

($ millions)

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

$4,500

2008

2009

2010

2011

2012

Independent Agency

Bank

Life Consultant

Life Planner

Foreign denominated activity translated to U.S. dollars at uniform exchange rates for all periods presented; Japanese yen 80 per U.S. dollar; Korean

won 1,160 per U.S. dollar.

Investor Day 6.18.2013

2008

2009

2010

2011

2012

All Others

Taiwan

Brazil

Korea

Japan Success Supplemented by Other Markets

Foreign denominated activity translated to U.S. dollars at uniform exchange rates for all periods presented; Korean won 1,160 per U.S. dollar.

Annualized New Business Premiums

(1)

Ex Japan

$355

$311

$270

$271

$229

($ millions)

Investor Day 6.18.2013

Sustained Earnings Growth Through

Challenging Markets and Events

Pre-Tax Adjusted Operating Income

(1)

($ millions)

$1,581

$1,651

$1,821

$2,239

$2,782

2008

2009

2010

2011

2012

Investment Margin

Mortality, Expense

& Other Margin

Pre-tax AOI excludes the net of Star / Edison transaction and integration costs and gains on China Pacific investment of $66 million in 2010, $24

million in 2011, and $(78) million in 2012.

CAGR based on 2007 – 2012 (5 Year).

Investor Day 6.18.2013

21.2%

15.9%

17.5%

2010

2011

2012

High Return on Equity Driven by Fundamentals

Return on Equity

(1)

•

Star / Edison integration contributes to ROE performance

Based on after-tax AOI of our International Insurance operations excluding Star / Edison transaction and integration costs and gains on China Pacific

investment, using overall effective tax rate for the Financial Services Businesses and associated attributed equity.

Investor Day 6.18.2013

Life Planner / Prudential of Japan

Investor Day 6.18.2013

Beneficial Cycle of Life Planner Model

Superior

Returns &

Steady

Growth

•

Providing financial security over lifetime of customers drives our beneficial cycle

High Income

for Life

Planner

High

Customer

Satisfaction

Quality

Referrals

Productivity

$26,700 AP per LP month

7.5 policies per LP month

(1)

Retention

90.5%

(1)

Persistency

95.0%

(1)

High Life

Planner

Retention

High Policy

Persistency

Quality

People

Quality

Products

Quality

Service

High Life

Planner

Productivity

Data based on 2012 Prudential of Japan (POJ). Annualized new business premiums produced by each Life Planner (LP) in a month; foreign denominated activity

translated to U.S. dollars at uniform exchange rate, Japanese yen 80 per U.S. dollar. Number of new policies sold per LP per month, including medical and cancer

policies.

Total

retention

for

agents

all

service

years.

month

policy

persistency

measured

based

face

amount,

12-month

rolling

average

data.

Investor Day 6.18.2013

Quality People

•

Industry leading Million Dollar Round Table memberships

•

Prudential of Japan has the highest number of MDRT members in the Japanese

industry for 16 consecutive years

(1)

Source:

Million

Dollar

Round

Table

Association,

Japan

membership

data

4/18/13.

MDRT Japan Membership

(1)

29% of POJ Life Planners

are MDRT members –

Highest percentage

in industry

(1)

945

665

445

300

157

115

111

Investor Day 6.18.2013

Quality Business

Prudential of Japan

12 Month LP Retention

(1)

Total LP Retention

(1)

Life Planner AP Productivity

(1)

•

Quality focused Life Planner operation drives both the top-line and the bottom-

line growth

Total LP Retention

(1)

2008

2009

2010

2011

2012

$17,500

$17,800

$19,900

$22,000

$26,700

83.3%

78.7%

79.7%

80.7%

82.1%

88.3%

87.0%

89.9%

90.5%

Annualized new business premiums produced by each LP in a month. Total LP retention for Life Planners in all service years; percentage of Life

Planners at beginning of year who are still active at end of year. 12th month LP retention based on 12-month rolling average data.

Investor Day 6.18.2013

Quality Service

J.D.

Power

Asia

Pacific

2011

2013

Japan

Life

Insurance

Contract

Satisfaction

Studies

and

2011

2013

Japan

Life

Insurance

Claim

Satisfaction

Studies

Contract Satisfaction Study based on a total of 4,490 life insurance policyholders who purchased or renewed coverage during the past year. Claim Satisfaction Study

based on a total of 3,776 policyholders who filed claims for medical benefits during the past year. japan.jdpower.com

13 month policy persistency for 2012.

•

According to J.D. Power Asia Pacific, Prudential of Japan is the

highest in

customer satisfaction for three years in a row

•

Satisfied customers, high policy persistency

Customer Satisfaction

(1)

Policy

Persistency

(2)

95%

2011

2012

2013

Investor Day 6.18.2013

2008

2009

2010

2011

2012

Retirement

Accident & Health

Death Protection

Current Customers are Excellent Prospects

for Additional Coverage to Meet Needs

Annualized New Business Premiums

(1)

POJ Second Sales to Existing Customers

Data

based

Prudential

Japan

sales

individual

market;

foreign

denominated

activity

translated

U.S.

dollars

uniform

exchange

rates;

Japanese

yen

80 per U.S. dollar.

$107

$118

$123

$147

$192

($ millions)

Investor Day 6.18.2013

Payoff from Quality

•

Superior business drivers of LP model significantly increase the

lifetime

production of agent

Lifetime Sales of Agents

(1)

Assumptions for traditional agent: AP Productivity = $6,000 per month; Agent Retention (Year 1/ Year 2/ Year 3+) = 55%/ 60%/ 80%

POJ LP: AP Productivity = $26,700 per month; Agent Retention (Year 1/ Year 2/ Year 3+) = 82%/ 80%/ 91%

POJ Life Planners

Traditional Agent

+ LP Retention

+ LP Productivity

$0.2 million

$0.6 million

$2.3 million

0.0

0.5

1.0

1.5

2.0

2.5

3.0

Cumulative Sales

($ millions)

Service Year

3,165

3,284

1Q12

1Q13

Investor Day 6.18.2013

Life Planner Model Growth –

Business Drivers

•

Life Planner growth + productivity improvement results in superior performance

Number of

Life Planners

AP Productivity

Annualized New

Business

Premiums

(1)

6,166

7,058

$16,600

$12,800

$899m

$1,347m

Foreign

denominated

activity

translated

U.S.

dollars

uniform

exchange

rates

for

all

periods

presented;

Japanese

yen

per

U.S.

dollar;

Korean won 1,160 per U.S. dollar.

5 Year CAGR (2007 –

2012)

Investor Day 6.18.2013

Life Planner Model Growth –

Financial Performance

•

Sales growth + high persistency results in strong financial performance

Operating Revenue

(2)

Pre-tax Adjusted

Operating Income

$5,407m

$9,002m

$867m

$1,481m

11%

5 Year CAGR (2007 –

2012)

Annualized New

Business Premiums

(1)

$899m

$1,347m

Foreign denominated activity translated to U.S. dollars at uniform exchange rates for all periods presented; Japanese yen 80 per U.S. dollar; Korean

won 1,160 per U.S. dollar.

Reported basis – translated based on applicable average exchange rates for respective periods.

Investor Day 6.18.2013

Prudential of Japan Sales Trend

Annualized New Business Premiums

(1)

($ millions)

$100

$150

$200

$250

$300

$350

1Q09

1Q10

1Q11

1Q12

1Q13

Higher than run-rate due to:

USD product re-pricing

Tax law change

Foreign denominated activity translated to U.S. dollars at uniform exchange rates for all periods presented; Japanese yen 80 per U.S. dollar.

CAGR based on 2009 – 2013 (1Q).

Investor Day 6.18.2013

Gibraltar Life

Investor Day 6.18.2013

$315 million

$400 million

$250 million

Integration Progress by Numbers…

•

Incurred integration costs through 1Q13

•

Total expected pre-tax integration costs

•

Down $100 million from original estimate

•

Targeted annual cost savings

•

~80% realized by 2012, 90% by 2013 on a run-rate basis

•

Continue to “Prudentialize”

sales force

•

De-risked investment portfolio to align with Prudential standards

•

Replaced lower margin product portfolio with higher margin products

•

Enhanced risk management and internal controls

Star/Edison Integration Substantially Complete

Investor Day 6.18.2013

Gibraltar

Life

–

Life

Consultant

Count

and

Sales

Historical Life Consultant Count & Sales

•

Acquired Kyoei Life in 2001 –

Life Consultant count reduced while sales grew

Annualized

New Business

Premiums ($m)

(1)

(3)

Count

6,281 LC’s

in Dec. 2010

$132

(2)

2010

3,000

4,000

5,000

6,000

7,000

8,000

$68

$80

$97

Apr-01

3Q01

1Q02

1Q03

7,457 LC’s

in April 2001

First full quarter sales

Foreign denominated activity translated to U.S. dollars at uniform exchange rates for all periods presented; Japanese yen 80 per U.S. dollar.

Average quarterly annualized new business premiums in 2010.

Life Consultant (LC).

Investor Day 6.18.2013

6,281

13,227

12,219

10,252

$132

$162

$189

$217

2010

1Q11

1Q12

1Q13

Gibraltar

Life

–

Post

Star/Edison

Acquisition

•

Acquired Star and Edison in February 2011, added 7,300 agents upon acquisition

Life Consultant Count & Sales

Annualized

New Business

Premiums

($m)

(1)

LC Count

(2)

(3)

Foreign denominated activity translated to U.S. dollars at uniform exchange rates for all periods presented; Japanese yen 80 per U.S. dollar.

One month of sales activities from Star and Edison included, due to one month lag reporting.

Average quarterly annualized new business premiums in 2010.

Gibraltar / Star / Edison

Merge Implemented

Investor Day 6.18.2013

Life Consultant Sales Trend

Foreign

denominated

activity

translated

U.S.

dollars

uniform

exchange

rates

for

all

periods

presented;

Japanese

yen

per

U.S.

dollar.

CAGR

based

2009

–

2013

(1Q).

($ millions)

Annualized New Business Premiums

(1)

Higher than run-rate due to:

USD product re-pricing

Tax law change

Post Star/Edison Acquisition

Investor Day 6.18.2013

Bank Channel

Investor Day 6.18.2013

Bank Channel Distribution Brings Growth & Challenges

•

Enhances access to expanded

customer base

and investable

wealth

•

Strong growth potential

through

development of new banking

relationships

•

Competitive product portfolio

meets bank customer needs

•

Strong brand name attracts

security focused customers

•

Leverages infrastructure costs

Advantages

•

Less influence over distribution

•

Sales can be volatile

due to

changes in interest rates and

competitor actions

•

Profitability

can vary with

changes in product mix

Challenges

Investor Day 6.18.2013

Bank Channel Distribution –

Prudential’s Response

•

Focused on profitable growth

•

Supplemental to captive channels

•

Actively manage the channel

–

Attractive margins Active in the market

–

Unattractive margins Willing to pull back

•

Recent actions in response to interest rate declines

–

Sales caps

–

Lowered guaranteed interest rate on yen single premium whole life from

1.0% to 0.8%

–

Reduced commission rates

•

Will not compete based on price

Investor Day 6.18.2013

2008

2009

2010

2011

2012

1Q12

1Q13

USD Whole Life &

Retirement Income

JPY Single Premium

Whole Life

All Other

Bank Channel Sales Growth

Annualized New Business Premiums

(1)

($ millions)

$56

$138

$341

$600

$1,422

$190

$223

•

Significant sales growth in 2011 and 2012 driven by JPY single premium

whole life

•

Partnering with all mega-banks in Japan. 70+ bank partners in total.

Sales of JPY

single premium

whole life have

declined in 2013

following the

re-pricing

in January

Foreign denominated activity translated to U.S. dollars at uniform exchange rates for all periods presented; Japanese yen 80 per U.S. dollar.

Investor Day 6.18.2013

Affluent

Strategic Expansion Framework

Death protection

Customer

Segment

Whole life & Term

Primary

Customer

Needs

Product

Solution

•

Meeting evolving customer needs through product and channel expansion

Life Planner

+ Mass affluent

+ Business owners

+ Retirement

+ Business planning

+ Accident & Health

+ Retirement income

+ USD products

Distribution

Investor Day 6.18.2013

Affluent

Strategic Expansion Framework

Death protection

Customer

Segment

Whole life & Term

Primary

Customer

Needs

Product

Solution

+ Middle class

+ Teachers

•

Meeting evolving customer needs through product and channel expansion

Life Planner

Life Consultant

+ Mass affluent

+ Business owners

+ Retirement

+ Business planning

+ Accident & Health

+ Retirement income

+ USD products

Distribution

+ Multi-currency fixed

annuity

Death protection

+ Retirement

Whole life & Term

+ Accident & Health

+ Retirement income

+ USD products

Investor Day 6.18.2013

Affluent

Strategic Expansion Framework

Death protection

Customer

Segment

Whole life & Term

Primary

Customer

Needs

Product

Solution

Party Channels

Bank / Independent Agency

+ High net worth

+ Savings

+ Single pay insurance

+ Middle class

+ Teachers

•

Meeting evolving customer needs through product and channel expansion

Captive Channels

Life Planner

Life Consultant

+ Mass affluent

+ Business owners

+ Retirement

+ Business planning

+ Accident & Health

+ Retirement income

+ USD products

Distribution

+ Multi-currency fixed

annuity

Death protection

+ Retirement

Whole life & Term

+ Accident & Health

+ Retirement income

+ USD products

+ Business owners

Death protection

+ Retirement

+ Business planning

+ Multi-currency fixed

annuity

Whole life & Term

+ Accident & Health

+ Retirement income

+ USD products

Investor Day 6.18.2013

FX, Interest Rate Environment and Capital

Investor Day 6.18.2013

Foreign Currency Risk Management

Potential Exposure

Risk Management

Asset-Liability

Management

Well Matched FX

Shareholder Value in US$

Comprehensive

Hedging Program

Accounting

Remeasurement

Non-Economic Noise

•

Income and Cash Flow

•

Equity Value

Investor Day 6.18.2013

Japanese Yen Income Hedge

•

Roughly 50% of Japan’s earnings are Yen-based

•

Yen-based

AOI

hedged

over

month

rolling

basis

using

series

forwards

with

laddered maturities

•

The Yen plan rate is derived from the weighted average hedged rate

•

Hedging Yen-based AOI protects the USD value of Japan capital repatriation

2013

2014

2015

2016

% of Yen AOI Hedged

(1)

100%

~80%

~35%

~5%

Plan Rates (¥/$)

¥80

Percentage of expected yen-based adjusted operating income hedged as of 3/31/13.

Income Hedges

Investor Day 6.18.2013

502

550

669

921

1,041

1,016

1,153

1,248

1,393

1,679

2,025

419

273

541

151

414

1,104

627

683

384

1,631

1,257

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

After-Tax AOI

Capital Redeployed

12,197

7,484

High Capital Redeployment

Historical Capital Redeployment

•

International Insurance operations have redeployed excess capital equal to 61%

of After-tax AOI since 2002

(1)

(2)

($ millions)

Years 2007 –

2011 have been restated for U.S. GAAP accounting standards applicable to deferred policy acquisition costs (DAC) effective 1/1/12. Years

2002 –

2006 have not been restated. After-tax AOI is based on overall FSB effective tax rates.

Primarily includes dividends, affiliated debt repayment, and affiliated lending. 2011 capital redeployment also includes $800 million of capital that was used to

partially fund the Star and Edison acquisition.

61% of

After-tax

AOI

Cumulative 2002 -

2012

Investor Day 6.18.2013

Interest Rate Environment

•

Interest rates in Japan have been low for more than fifteen years

For new business, commencing second quarter 2012.

Historical 10 Year Government Bond Yield

•

High quality long duration investment portfolio

•

Recently

lowered

guaranteed

crediting

rates

U.S.

dollar

products

(1)

•

Protection product profitability relatively less sensitive to interest rates

•

Fixed annuity designed to mitigate interest rate risk

Prudential’s Position

JGB

UST

0.54%

1997

1999

2001

2003

2005

2007

2009

2011

2013

Investor Day 6.18.2013

Pre-tax AOI excludes the net of Star / Edison integration costs and

gains on China Pacific investment of $(78) million. The analysis represents assumed

investment of renewal premiums and reinvestment of investment income and proceeds from maturing investments at market interest rates 50 bps higher or lower

than actual rates during the year.

Pre-Tax Adjusted Operating Income

(1)

($ millions)

$2,782

•

In the near-term, earnings are not materially impacted by modest changes in interest rates

•

+/-

50 bps = ~$25m in near-term, or ~1% of pre-tax AOI

$2,757

$2,807

Impact of Changing Interest Rate Environment

2012

2012 if interest rates

reduced 50 bps

2012 if interest rates

increased 50 bps

Investment Margin

Mortality, Expense

& Other Margin

Investor Day 6.18.2013

Solvency Margin Ratio

March 31, 2013

749%

Prudential of Japan

Gibraltar

(1)

896%

Stressed Scenario

~625%

~800%

Gibraltar consolidated basis.

Represents indicated change applied to asset valuation as of 3/31/13.

•

Solvency

margin

position

Prudential’s

Japanese

companies

–

well

capitalized

and financially secure

SMR

Stressed Scenario

(2)

•

Japan Equity

•

Real Estate

•

USD & AUD Exchange Rates

•

Interest Rates

Down 55%

Down 35%

Weakening 20%

Up 100 bps

Investor Day 6.18.2013

High Quality Investment Portfolio

Japan Investment Portfolio

(1)

$146 billion

As of 3/31/13, at balance sheet carrying amount.

Includes commercial/residential mortgage backed securities and asset backed securities.

Includes commercial/residential mortgage loans.

Includes

trading

account

assets

supporting

insurance

liabilities

and

policy

loans.

Corporate Bonds

(Investment Grade)

2% Corporate Bonds (Below Investment Grade)

2% Equities

1% Real Estate

Structured Securities

(2)

Commercial Loans

(3)

Risk Assets

Other

(4)

Government

(JGB & UST)

27%

56%

Investor Day 6.18.2013

Key Takeaways

•

Solid business model with sustained track record of success

•

High ROE, steady AOI growth, low volatility: returns and earnings primarily the

result of stable drivers

•

Leading position in Japanese market (second largest market in the world),

strengthened by Star / Edison acquisition

•

Competitive advantages in distribution based on core Life Planner model, coupled

with financial strength and reputation, driving growth across multiple channels

•

Strong growth prospects enhanced by product portfolio serving lifetime financial

security needs

Form: 8-K

Documents