Prudential Completes Retirement and $31B Annuity Deals

Empower hired 1,800 people who once worked for Prudential. It is also gaining relationships with about 4 million plan participants, and more than $300 billion in plan assets.

Prudential and Empower announced the retirement business deal in July 2021 and said at the time that they hoped to complete it by March 31, 2022.

The Backdrop

Many life insurers have been making big deals involving blocks of annuities with benefits guarantees.

The list of drivers includes concerns about the effects of low interest rates on the investment portfolios supporting the products; worries about exposure to stock market and bond fund volatility; the possible effects of looming changes in accounting rules for insurance products with long-term benefits guarantees; and a belief that insurance company investment guidelines in some jurisdictions outside the United States might help insurers there earn more on their investments.

What It Means

Andy Sullivan, the head of Prudential's U.S.-based business, said in a comment included in the Fortitude Re deal completion announcement that the move will help customers by making Prudential a higher-growth, less market-sensitive, more nimble company.

Prudential will continue to offer annuity benefits protection options through the Prudential FlexGuard and FlexGuard Income indexed variable annuity contracts, he said.

Andy Sullivan (Photo: Prudential)