Prudential Financial (PRU) Risk Factor Changes

◦Changes in our discount rate, expected rate of return, life expectancy, healthcare costs and assumptions regarding compensation increases for our pension and other postretirement benefit plans may result in increased…

•We may fail to meet expectations relating to environmental, social, and governance standards and practices.

•A downgrade in our financial strength or credit ratings could potentially, among other things, adversely impact our business prospects, results of operations, financial condition and liquidity.

The following items are examples of other factors which could have an adverse impact on our business.

power over oil and gas.

•Interaction with customers.

Changes in technology and other external factors may be unsettling to our business model.

•U.S.

In addition, other risks may become strategic risks.

We may be subject to claims by third parties for (i) copyright, trademark or patent infringement; (ii) breach of copyright, trademark or license usage rights; or (iii) misappropriation of trade secrets.

The Company and our distributors are subject to rules regarding the standard of care applicable to sales of our products and the provision of advice to our customers, and many of these rules are routinely revised or r…

The manner in which our products are distributed, including by affiliate and third-party distributors of our products, presents added regulatory, competitive and other risks to our enterprise.

We, or third parties on whom we rely, may not adequately ensure the integrity, confidentiality, or availability of personal and confidential information.

•Cybersecurity Threats: AI could be used to create sophisticated, long-term and persistent phishing attacks or bypass security measures, increasing the risk of cyberattacks and data breaches.

The development and adoption of AI, including generative AI and agentic AI, and its use and anticipated use by us or by third parties on whom we rely, may increase the operational risks discussed above or create new o…

•The proliferation of third-party financial data aggregators and emerging technologies, including the development and use of AI, increase our information security risks and exposure.

We depend heavily on our telecommunication, information technology and other operational systems and on the integrity and continuing availability of data we use to run our businesses and service our customers.

•Cyber-attacks, both systemic (e.g., affecting the internet, cloud services, and/or other financial services industry infrastructure) and targeted (e.g., failures in or breach of our systems or that of third-parties o…

•Client service impacts: The Company may not be able to service customers.

We are subject to counterparty risk associated with reinsurance transactions.

on the performance of an index.

Guarantees within certain of our products, in particular our variable annuities and to a lesser extent certain individual life and international insurance products, are market sensitive and may decrease our earnings o…

For our domestic investment portfolios supporting our U.S.

For our International Businesses’ operations, our Retirement Strategies segment’s earnings on non-U.S.

Our exposure to interest rates can manifest over years as in the case of earnings compression or in the short term by creating volatility in both earnings and capital.

Our insurance and annuity products and certain of our investment products, and our investment returns, are subject to interest rate risk, which is the risk of loss arising from asset/liability duration mismatches with…

Derivative instruments that we use to hedge and manage foreign exchange, interest rate and equity market risks associated with our products and businesses, and other risks might not perform as intended or expected, re…

•Policyholder behavior (long-term) risk is the risk that the behavior of our customers or policyholders deviates adversely from our expectations over the long-term.

Certain of our insurance products are subject to policyholder behavior risk, which is the risk that actual policyholder behavior deviates adversely from our expectations.

In each case, an increase in claims, or an increase in reserves due to revised morbidity assumptions can have an immediate adverse impact on our results of operations and financial condition, and the economic impact c…

Certain of our insurance products are subject to morbidity risk, which is the risk that either incidence, utilization or continuation experience deviates adversely from our expectations.

We manage mortality risk primarily through our underwriting practices.

•Mortality trend is the risk that mortality improvements in the future deviate from our expectations.

We provide a variety of insurance products, on both an individual and group basis, that are designed to help customers protect against a variety of financial uncertainties.

Our investment portfolio is subject to equity risk, which is the risk of loss due to deterioration in market value of public equity or alternative assets.

The Company is subject to counterparty risk, which is the risk that the counterparty to a transaction could default or deteriorate in creditworthiness before or at the final settlement of a transaction.

Our investment portfolio is subject to credit risk, which is the risk that an obligor (or guarantor) is unable or unwilling to meet its contractual payment obligations on its fixed maturity security, loan or other obl…

You should carefully consider the following risks.

also reflect contrasting or conflicting values or agendas.

We may be subject to claims by third parties for (i) copyright, trademark or patent infringement; (ii) breach of copyright, trademark or license usage rights; or (iii) misappropriation of trade secrets.

such as processing hardware and network capacity, as to which we cannot control the availability or pricing, especially in a highly competitive environment.

An operational risk failure may result in one or more actual or potential impacts to the Company.

Our operations are exposed to the risk of loss resulting from inadequate or failed processes or systems, human error or misconduct, and as a result of external events.

reinsurer, which are measured at fair value.

adversely affect our profitability, financial condition and cash flows, as well as increase the volatility of our results of operations under U.S.

Our significant business operations outside the U.S.

instruments, require us to post additional collateral, and further increase the cost of executing product related hedges and such costs may not be recovered in the pricing of the underlying products being hedged.

addition, if we experience higher than expected surrenders, withdrawals or claims, our liquidity position may be adversely impacted, and we may incur losses on investments if we are required to sell assets in order to…

completely effective or satisfy investors, customers, regulators, or others.

•Current Market Conditions.

Failure to adapt our business model in response to these and other technological developments could have an adverse impact on our results of operations or financial condition.

•Investment Portfolio.

Our ability to successfully execute on strategic transactions is subject to risks.

See Note 25 to the Consolidated Financial Statements and Item 7.

business and be subject to regulatory action, penalties or damages.

Furthermore, there has been increased scrutiny as well as enacted and proposed additional laws and regulations, including from state regulators, regarding the use of personal and confidential information.

have insufficient recourse against such third parties from which such breaches originate.

The risks identified above could be exacerbated by agentic AI, which, acting without supervision, could take actions harmful to the Company or our customers.

•Planned system upgrades may not be successful or operate as intended, may take longer than anticipated, may exceed their budget, or create or exacerbate previously unknown security vulnerabilities.

•Costs and security risks associated with maintaining, upgrading, or replacing our information technology, including legacy systems, could exceed our expectations or we may be required to dedicate additional resources…

The potential adverse impacts to our business, results of operations, financial condition or liquidity due to such operational risks include, among others, the following:

The types of operational risks that may impact the Company include, among others, the following:

Our significant business operations outside the U.S.

products.

Our ability to reprice products is limited and may not compensate for deviations from our expected insurance assumptions.

liabilities and reestablish or strengthen reserves and capital, which could reduce capital flexibility.