Slide 1: 2017 Investor Conference: Barry Stowe & Chad Myers, US
aS a sce aad | Conrerence 2OLZ Barry Stowe & Chad Myers US
Slide 2: Forward-looking statements
This document may contain ‘forward-looking statements’ with respect to certain of Prudential's plans and its goals and expectations relating to its future financial condition, performance, results, strategy and objectives. Statements that are not historical facts, including statements about Prudenti
Slide 3: American Retirement Challenges
American Retirement Challenges Need for guaranteed income continues to grow Initial DOL Rule Retirees need guaranteed lifetime Proposal P income…but due to under saving, many Announcement April 2015 also need to grow their assets as well Our industry is uniquely positioned to P provide this value pr
Slide 4: DOL Update
DOL Update Department Regulation of Labor has accelerated (DOL) Rule an industry Implementation Timing evolution End of 2017 and we are awaiting confirmation of a delay of the DOL Fiduciary Rule 2017 2018 2019 February 3, 2017 March 2, 2017 April 2, 2017 April 10, 2017 June 9, 2017 January 1, 2018 J
Slide 5: Evolution of Industry: Expansion of the distribution landscape
Evolution of Industry Expansion of the distribution landscape Annuities have historically been P almost exclusively sold in the Wealth Management Revenue1 brokerage channel Brokerage channel will continue to P be a key distribution element for many years in the future However, the main growth potent
Slide 6: Scaling the Opportunity for our Industry, and for Jackson
Scaling the Opportunity for our Industry, and for Jackson More than $16 trillion in assets across existing channels 2017 INVESTOR Source: Cerulli Associates, The State of US Retail and Institutional Asset Management 2016 CONFERENCE Bubbles represent 5-year growth CAGR as of December 31, 2015 6
Slide 7: Evolution of Industry: Capabilities to succeed in the advisory market
Evolution of Industry Capabilities to succeed in the advisory market Long-term success in the advisory world will require more than just developing desirable products, it will require investment in several different areas over multiple timeframes Near-Term Mid-Term Long-Term Material Changing Produc
Slide 8: The Jackson Difference: What makes us unique?
The Jackson Difference What makes us unique? P Approach to the Market P Jackson Value Proposition P Health of the In Force Business 2017 INVESTOR CONFERENCE 8
Slide 9: Variable Annuity Industry History
The Jackson Difference Variable Annuity Industry History Quarterly Variable Annuity Sales S&P 500 10-year Treasury Rate ($bn) 2017 INVESTOR CONFERENCE 9
Slide 10: Cumulative Net Variable Annuity Flows
The Jackson Difference Cumulative Net Variable Annuity Flows Jackson’s variable annuity book has a much more favorable flow pattern than the industry Jackson Cumulative Net Flows Industry Cumulative Net Flows (Ex-Jackson) $bn $bn 2017 INVESTOR Source: Jackson VA gross sales less surrenders and benef
Slide 11: Investment freedom key to VA value proposition
The Jackson Difference Investment freedom key to VA value proposition Annuity Value Proposition (Pre-Crisis) Annuity Value Proposition (Current) 2017 INVESTOR CONFERENCE 11
Slide 12: Equity allocation below pricing assumption
The Jackson Difference Equity allocation below pricing assumption In-Force Allocation of Accumulation Values ✓ No material differences between policies with and without guarantees 100% 90% ✓ Policyholders’ risk tolerance objectives are 80% aligned with Jackson’s 70% ✓ Jackson’s policyholder allocati
Slide 13: Jackson's In-Force Performance is Very Strong
The Jackson Difference Jackson’s In-Force Performance is Very Strong In-Force VA Cohort Analysis GMDB GMWB ✓ Pre-March 2007 block still solidly Pre 3/31/07 Post 3/31/07 Pre 3/31/07 Post 3/31/07 profitable due to hedge program 910K 116% 104% 103% ✓ No extraordinary write-offs, write- 789K 97% downs,
Slide 14: Assumption Review Update
The Jackson Difference Assumption Review Update • Magnitude of changes in underlying assumptions are modest • Assumption trends for VA – Lower lapses, due to lack of attractive alternatives – Slight increase in VA longevity – Slight overall increase in GMWB efficiency • Impacts – Utilization was a m
Slide 15: Standalone economic profile of guarantees remains very strong
The Jackson Difference Standalone economic profile of guarantees remains very strong $millions S&P @ 9/30 = 2,519 • Includes guarantee fees only Guarantee Fees Base, 5% Gross Return • Uses prudent best estimate assumptions (AG43, C3P2) PV Future Guarantee Fees 11,335 Benefits PV Benefits (2,265) • 5
Slide 16: RBC & Cash Remittance History
The Jackson Difference RBC & Cash Remittance History RBC & Cash Remittances (~$4.3 billion total over period) 2017 INVESTOR CONFERENCE 16
Slide 17: Superior Operating ROE
The Jackson Difference Superior Operating ROE 35% ✓ Jackson continues to return well above the cost of capital as well as significantly 30% above industry ROEs 25% ✓ Well hedged VA book coming into 2008 crisis means that profitability of back 20% book is intact 15% ✓ Post crisis pricing environment
Slide 18: Summary
Summary P Americans need guaranteed income more than ever P DOL has accelerated an industry evolution P This evolution extends across both distribution and products P Investment freedom is key to the variable annuity value proposition P Product design matters P Jackson’s discipline continues to deli