10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 FORM 10-Q

ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For the quarterly period ended March 31, 2019

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For the Transition Period from              to             

Commission File Number 001-16707 

Prudential Financial, Inc.

(Exact Name of Registrant as Specified in its Charter) 

New Jersey	22-3703799
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification Number)

751 Broad Street

Newark, New Jersey 07102

(973) 802-6000

(Address and Telephone Number of Registrant’s Principal Executive Offices)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of the Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	x	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	¨
		Emerging growth company	¨

 If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.   ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

 SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

Title of Each Class	Trading Symbols(s)	Name of Each Exchange on Which Registered
Common Stock, Par Value $.01	PRU	New York Stock Exchange
5.625% Junior Subordinated Notes	PRS	New York Stock Exchange

As of April 30, 2019, 406 million shares of the registrant’s Common Stock (par value $0.01) were outstanding.

TABLE OF CONTENTS

		Page
PART I FINANCIAL INFORMATION
Item 1.	Financial Statements:
	Unaudited Interim Consolidated Statements of Financial Position as of March 31, 2019 and December 31, 2018	1
	Unaudited Interim Consolidated Statements of Operations for the three months ended March 31, 2019 and 2018	2
	Unaudited Interim Consolidated Statements of Comprehensive Income for the three months ended March 31, 2019 and 2018	3
	Unaudited Interim Consolidated Statements of Equity for the three months ended March 31, 2019 and 2018	4
	Unaudited Interim Consolidated Statements of Cash Flows for the three months ended March 31, 2019 and 2018	5
	Notes to Unaudited Interim Consolidated Financial Statements	6
	1. Business and Basis of Presentation	6
	2. Significant Accounting Policies and Pronouncements	6
	3. Investments	10
	4. Variable Interest Entities	26
	5. Derivative Instruments	27
	6. Fair Value of Assets and Liabilities	34
	7. Leases	47
	8. Closed Block	48
	9. Income Taxes	50
	10. Short-Term and Long-Term Debt	51
	11. Employee Benefit Plans	52
	12. Equity	53
	13. Earnings Per Share	57
	14. Segment Information	58
	15. Commitments and Contingent Liabilities	61
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	65
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	125
Item 4.	Controls and Procedures	125
PART II OTHER INFORMATION
Item 1.	Legal Proceedings	126
Item 1A.	Risk Factors	126
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	126
Item 6.	Exhibits	127
GLOSSARY		128
SIGNATURES		130

Forward-Looking Statements

Certain of the statements included in this Quarterly Report on Form 10-Q 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) losses on investments or financial contracts due to deterioration in credit quality or value, or counterparty default; (2) losses on insurance products due to mortality experience, morbidity experience or policyholder behavior experience that differs significantly from our expectations when we price our products; (3) changes in interest rates, equity prices and foreign currency exchange rates that may (a) adversely impact the profitability of our products, the value of separate accounts supporting these products or the value of assets we manage, (b) result in losses on derivatives we use to hedge risk or increase collateral posting requirements and (c) limit opportunities to invest at appropriate returns; (4) guarantees within certain of our products which are market sensitive and may decrease our earnings or increase the volatility of our results of operations or financial position; (5) liquidity needs resulting from (a) derivative collateral market exposure, (b) asset/liability mismatches, (c) the lack of available funding in the financial markets or (d) unexpected cash demands due to severe mortality calamity or lapse events; (6) financial or customer losses, or regulatory and legal actions, due to inadequate or failed processes or systems, external events and human error or misconduct such as (a) disruption of our systems and data, (b) an information security breach, (c) a failure to protect the privacy of sensitive data or (d) reliance on third-parties; (7) changes in the regulatory landscape, including related to (a) financial sector regulatory reform, (b) changes in tax laws, (c) fiduciary rules and other standards of care, (d) U.S. state insurance laws and developments regarding group-wide supervision, capital and reserves, (e) insurer capital standards outside the U.S. and (f) privacy and cybersecurity regulation; (8) technological changes which may adversely impact companies in our investment portfolio or cause insurance experience to deviate from our assumptions; (9) ratings downgrades; (10) market conditions that may adversely affect the sales or persistency of our products; (11) competition; and (12) reputational damage. Prudential Financial, Inc. does not undertake to update any particular forward-looking statement included in this document. See “Risk Factors” included in the Annual Report on Form 10-K for the year ended December 31, 2018 for discussion of certain risks relating to our businesses and investment in our securities.

i

PART I - FINANCIAL INFORMATION

ITEM 1. Financial Statements

PRUDENTIAL FINANCIAL, INC.

Unaudited Interim Consolidated Statements of Financial Position

March 31, 2019 and December 31, 2018 (in millions, except share amounts)

	March 31, 2019			December 31, 2018
ASSETS
Fixed maturities, available-for-sale, at fair value (amortized cost: 2019-$333,648; 2018-$331,745)(1)	$	365,928		$	353,656
Fixed maturities, held-to-maturity, at amortized cost (fair value: 2019-$2,365; 2018-$2,372)(1)	1,982			2,013
Fixed maturities, trading, at fair value (amortized cost: 2019-$3,512; 2018-$3,392)(1)	3,435			3,243
Assets supporting experience-rated contractholder liabilities, at fair value(1)	21,668			21,254
Equity securities, at fair value (cost: 2019-$5,230; 2018-$5,219)(1)	6,778			6,238
Commercial mortgage and other loans (includes $463 and $763 measured at fair value under the fair value option at March 31, 2019 and December 31, 2018, respectively)(1)	60,875			59,830
Policy loans	11,986			12,016
Other invested assets (includes $5,453 and $5,524 measured at fair value at March 31, 2019 and December 31, 2018, respectively)(1)	14,840			14,526
Short-term investments	6,911			6,469
Total investments	494,403			479,245
Cash and cash equivalents(1)	14,699			15,353
Accrued investment income(1)	3,233			3,318
Deferred policy acquisition costs	19,978			20,058
Value of business acquired	1,575			1,850
Other assets(1)	18,192			16,118
Separate account assets	297,244			279,136
TOTAL ASSETS	$	849,324		$	815,078
LIABILITIES AND EQUITY
LIABILITIES
Future policy benefits	$	277,085		$	273,846
Policyholders’ account balances	151,224			150,338
Policyholders’ dividends	5,360			4,110
Securities sold under agreements to repurchase	9,873			9,950
Cash collateral for loaned securities	4,093			3,929
Income taxes	10,031			7,936
Short-term debt	2,549			2,451
Long-term debt	18,309			17,378
Other liabilities(1)	16,881			16,018
Notes issued by consolidated variable interest entities (includes $817 and $595 measured at fair value under the fair value option at March 31, 2019 and December 31, 2018, respectively)(1)	1,225			955
Separate account liabilities	297,244			279,136
Total liabilities	793,874			766,047
COMMITMENTS AND CONTINGENT LIABILITIES (See Note 15)
EQUITY
Preferred Stock ($.01 par value; 10,000,000 shares authorized; none issued)	0			0
Common Stock ($.01 par value; 1,500,000,000 shares authorized; 660,111,339 shares issued at both March 31, 2019 and December 31, 2018)	6			6
Additional paid-in capital	24,782			24,828
Common Stock held in treasury, at cost (252,761,744 and 249,398,887 shares at March 31, 2019 and December 31, 2018, respectively)	(17,962		)	(17,593		)
Accumulated other comprehensive income (loss)	17,218			10,906
Retained earnings	30,966			30,470
Total Prudential Financial, Inc. equity	55,010			48,617
Noncontrolling interests	440			414
Total equity	55,450			49,031
TOTAL LIABILITIES AND EQUITY	$	849,324		$	815,078

__________

(1) See Note 4 for details of balances associated with variable interest entities.

See Notes to Unaudited Interim Consolidated Financial Statements

1

PRUDENTIAL FINANCIAL, INC.

Unaudited Interim Consolidated Statements of Operations

Three Months Ended March 31, 2019 and 2018 (in millions, except per share amounts)

	Three Months Ended March 31,
	2019			2018
REVENUES
Premiums	$	7,900		$	7,311
Policy charges and fee income	1,471			1,504
Net investment income	4,216			3,998
Asset management and service fees	1,016			1,026
Other income (loss)	1,254			(507		)
Realized investment gains (losses), net:
Other-than-temporary impairments on fixed maturity securities	(35		)	(39		)
Other-than-temporary impairments on fixed maturity securities transferred to Other comprehensive income	(12		)	0
Other realized investment gains (losses), net	(719		)	464
Total realized investment gains (losses), net	(766		)	425
Total revenues	15,091			13,757
BENEFITS AND EXPENSES
Policyholders’ benefits	8,438			7,675
Interest credited to policyholders’ account balances	1,345			550
Dividends to policyholders	577			328
Amortization of deferred policy acquisition costs	435			588
General and administrative expenses	3,156			2,923
Total benefits and expenses	13,951			12,064
INCOME (LOSS) BEFORE INCOME TAXES AND EQUITY IN EARNINGS OF OPERATING JOINT VENTURES	1,140			1,693
Total income tax expense (benefit)	232			352
INCOME (LOSS) BEFORE EQUITY IN EARNINGS OF OPERATING JOINT VENTURES	908			1,341
Equity in earnings of operating joint ventures, net of taxes	29			23
NET INCOME (LOSS)	937			1,364
Less: Income (loss) attributable to noncontrolling interests	5			1
NET INCOME (LOSS) ATTRIBUTABLE TO PRUDENTIAL FINANCIAL, INC.	$	932		$	1,363
EARNINGS PER SHARE
Basic earnings per share-Common Stock:
Net income (loss) attributable to Prudential Financial, Inc.	$	2.25		$	3.19
Diluted earnings per share-Common Stock:
Net income (loss) attributable to Prudential Financial, Inc.	$	2.22		$	3.14

See Notes to Unaudited Interim Consolidated Financial Statements

2

PRUDENTIAL FINANCIAL, INC.

Unaudited Interim Consolidated Statements of Comprehensive Income

Three Months Ended March 31, 2019 and 2018 (in millions)

	Three Months Ended March 31,
	2019			2018
NET INCOME (LOSS)	$	937		$	1,364
Other comprehensive income (loss), before tax:
Foreign currency translation adjustments for the period	(105		)	662
Net unrealized investment gains (losses)	8,289			(4,666		)
Defined benefit pension and postretirement unrecognized periodic benefit (cost)	64			54
Total	8,248			(3,950		)
Less: Income tax expense (benefit) related to other comprehensive income (loss)	1,944			(844		)
Other comprehensive income (loss), net of taxes	6,304			(3,106		)
Comprehensive income (loss)	7,241			(1,742		)
Less: Comprehensive income (loss) attributable to noncontrolling interests	4			14
Comprehensive income (loss) attributable to Prudential Financial, Inc.	$	7,237		$	(1,756	)

See Notes to Unaudited Interim Consolidated Financial Statements

3

PRUDENTIAL FINANCIAL, INC.

Unaudited Interim Consolidated Statements of Equity

Three Months Ended March 31, 2019 and 2018 (in millions)

	Prudential Financial, Inc. Equity
	Common Stock		Additional Paid-in Capital			Retained Earnings			Common Stock Held In Treasury			Accumulated Other Comprehensive Income (Loss)			Total Prudential Financial, Inc. Equity			Noncontrolling Interests			Total Equity
Balance, December 31, 2018	$	6	$	24,828		$	30,470		$	(17,593	)	$	10,906		$	48,617		$	414		$	49,031
Cumulative effect of adoption of accounting changes(1)						(21		)				7			(14		)				(14		)
Common Stock acquired									(500		)				(500		)				(500		)
Contributions from noncontrolling interests																		26			26
Distributions to noncontrolling interests																		(4		)	(4		)
Stock-based compensation programs			(46		)				131						85						85
Dividends declared on Common Stock						(415		)							(415		)				(415		)
Comprehensive income:
Net income (loss)						932									932			5			937
Other comprehensive income (loss), net of tax												6,305			6,305			(1		)	6,304
Total comprehensive income (loss)															7,237			4			7,241
Balance, March 31, 2019	$	6	$	24,782		$	30,966		$	(17,962	)	$	17,218		$	55,010		$	440		$	55,450
	Prudential Financial, Inc. Equity
	Common Stock		Additional Paid-in Capital			Retained Earnings			Common Stock Held In Treasury			Accumulated Other Comprehensive Income (Loss)			Total Prudential Financial, Inc. Equity			Noncontrolling Interests			Total Equity
Balance, December 31, 2017	$	6	$	24,769		$	28,671		$	(16,284	)	$	17,074		$	54,236		$	275		$	54,511
Cumulative effect of adoption of ASU 2016-01						904						(847		)	57						57
Cumulative effect of adoption of ASU 2018-02						(1,653		)				1,653			0						0
Common Stock acquired									(375		)				(375		)				(375		)
Contributions from noncontrolling interests																		61			61
Distributions to noncontrolling interests																		(5		)	(5		)
Stock-based compensation programs			(47		)				102						55						55
Dividends declared on Common Stock						(387		)							(387		)				(387		)
Comprehensive income:
Net income (loss)						1,363									1,363			1			1,364
Other comprehensive income (loss), net of tax												(3,119		)	(3,119		)	13			(3,106		)
Total comprehensive income (loss)															(1,756		)	14			(1,742		)
Balance, March 31, 2018	$	6	$	24,722		$	28,898		$	(16,557	)	$	14,761		$	51,830		$	345		$	52,175

__________

(1) Includes the impact from the adoption of ASUs 2017-08 and 2017-12. See Note 2.

See Notes to Unaudited Interim Consolidated Financial Statements

4

PRUDENTIAL FINANCIAL, INC.

Unaudited Interim Consolidated Statements of Cash Flows

Three Months Ended March 31, 2019 and 2018 (in millions)

	2019			2018
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)	$	937		$	1,364
Adjustments to reconcile net income to net cash provided by operating activities:
Realized investment (gains) losses, net	766			(425		)
Policy charges and fee income	(601		)	(560		)
Interest credited to policyholders’ account balances	1,345			550
Depreciation and amortization	20			(22		)
(Gains) losses on assets supporting experience-rated contractholder liabilities, net	(454		)	403
Change in:
Deferred policy acquisition costs	(326		)	(131		)
Future policy benefits and other insurance liabilities	2,504			1,859
Income taxes	152			421
Derivatives, net	(159		)	(1,302		)
Other, net	(1,099		)	144
Cash flows from (used in) operating activities	3,085			2,301
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from the sale/maturity/prepayment of:
Fixed maturities, available-for-sale	14,063			14,665
Fixed maturities, held-to-maturity	14			36
Fixed maturities, trading	77			207
Assets supporting experience-rated contractholder liabilities	2,992			3,487
Equity securities	675			980
Commercial mortgage and other loans	1,080			1,319
Policy loans	576			656
Other invested assets	374			434
Short-term investments	8,202			9,870
Payments for the purchase/origination of:
Fixed maturities, available-for-sale	(17,395		)	(15,652		)
Fixed maturities, trading	(178		)	(109		)
Assets supporting experience-rated contractholder liabilities	(3,063		)	(3,271		)
Equity securities	(737		)	(890		)
Commercial mortgage and other loans	(2,354		)	(3,489		)
Policy loans	(473		)	(561		)
Other invested assets	(559		)	(713		)
Short-term investments	(8,837		)	(8,837		)
Derivatives, net	341			(365		)
Other, net	(97		)	(40		)
Cash flows from (used in) investing activities	(5,299		)	(2,273		)
CASH FLOWS FROM FINANCING ACTIVITIES
Policyholders’ account deposits	7,417			7,456
Policyholders’ account withdrawals	(6,823		)	(7,080		)
Net change in securities sold under agreements to repurchase and cash collateral for loaned securities	88			191
Cash dividends paid on Common Stock	(420		)	(388		)
Net change in financing arrangements (maturities 90 days or less)	85			(90		)
Common Stock acquired	(484		)	(363		)
Common Stock reissued for exercise of stock options	36			45
Proceeds from the issuance of debt (maturities longer than 90 days)	1,120			1,071
Repayments of debt (maturities longer than 90 days)	(55		)	(19		)
Proceeds from notes issued by consolidated VIEs	910			0
Repayments of notes issued by consolidated VIEs	(638		)	0
Other, net	330			66
Cash flows from (used in) financing activities	1,566			889
Effect of foreign exchange rate changes on cash balances	(2		)	304
NET INCREASE IN CASH, CASH EQUIVALENTS RESTRICTED CASH AND RESTRICTED CASH EQUIVALENTS	(650		)	1,221
CASH, CASH EQUIVALENTS RESTRICTED CASH AND RESTRICTED CASH EQUIVALENTS, BEGINNING OF YEAR	15,495			14,536
CASH, CASH EQUIVALENTS RESTRICTED CASH AND RESTRICTED CASH EQUIVALENTS, END OF PERIOD	$	14,845		$	15,757
NON-CASH TRANSACTIONS DURING THE PERIOD
Treasury Stock shares issued for stock-based compensation programs	$	165		$	129
RECONCILIATION TO STATEMENT OF FINANCIAL POSITION
Cash and cash equivalents	$	14,699		$	15,676
Restricted cash and restricted cash equivalents (included in “Other assets”)	146			81
Total cash, cash equivalents restricted cash and restricted cash equivalents	$	14,845		$	15,757

See Notes to Unaudited Interim Consolidated Financial Statements

5

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements

1. BUSINESS AND BASIS OF PRESENTATION

Prudential Financial, Inc. (“Prudential Financial”) and its subsidiaries (collectively, “Prudential” or the “Company”) provide a wide range of insurance, investment management, and other financial products and services to both individual and institutional customers throughout the United States and in many other countries. Principal products and services provided include life insurance, annuities, retirement-related services, mutual funds and investment management.

The Company’s principal operations are comprised of five divisions, which together encompass seven segments, and its Corporate and Other operations. The PGIM division is comprised of the PGIM segment, the global investment management businesses of the Company. The U.S. Workplace Solutions division consists of the Retirement and Group Insurance segments. The U.S. Individual Solutions division consists of the Individual Annuities and Individual Life segments. The International Insurance division is comprised of the International Insurance segment, and the Closed Block division is comprised of the Closed Block segment. The Closed Block division is accounted for as a divested business that is reported separately from the Divested and Run-off Businesses that are included in the Company’s Corporate and Other operations. Divested and Run-off Businesses are comprised of businesses that have been, or will be, sold or exited, including businesses that have been placed in wind down status that do not qualify for “discontinued operations” accounting treatment under generally accepted accounting principles in the United States of America (“U.S. GAAP”). The Company’s Corporate and Other operations include corporate items and initiatives that are not allocated to business segments and businesses that have been or will be divested or placed in run-off, excluding the Closed Block division.

Basis of Presentation

The Unaudited Interim Consolidated Financial Statements have been prepared in accordance with U.S. GAAP on a basis consistent with reporting interim financial information in accordance with instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities and Exchange Commission (“SEC”). Intercompany balances and transactions have been eliminated. The Unaudited Interim Consolidated Financial Statements include the accounts of Prudential Financial, entities over which the Company exercises control, including majority-owned subsidiaries and variable interest entities (“VIEs”) in which the Company is considered the primary beneficiary. See Note 4 for more information on the Company’s consolidated variable interest entities.  

In the opinion of management, all adjustments necessary for a fair statement of the financial position and results of operations have been made. All such adjustments are of a normal, recurring nature. Interim results are not necessarily indicative of the results that may be expected for the full year. These financial statements should be read in conjunction with the Company’s Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

The most significant estimates include those used in determining deferred policy acquisition costs (“DAC”) and related amortization; value of business acquired (“VOBA”) and its amortization; amortization of deferred sales inducements (“DSI”); measurement of goodwill and any related impairment; valuation of investments including derivatives and the recognition of other-than-temporary impairments (“OTTI”); future policy benefits including guarantees; pension and other postretirement benefits; provision for income taxes and valuation of deferred tax assets; and accruals for contingent liabilities, including estimates for losses in connection with unresolved legal and regulatory matters.

Reclassifications

Certain amounts in prior periods have been reclassified to conform to the current period presentation.

2. SIGNIFICANT ACCOUNTING POLICIES AND PRONOUNCEMENTS

Recent Accounting Pronouncements

6

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Changes to U.S. GAAP are established by the Financial Accounting Standards Board (“FASB”) in the form of Accounting Standards Updates (“ASU”) to the FASB Accounting Standards Codification. The Company considers the applicability and impact of all ASU. ASU listed below include those that have been adopted during the current fiscal year and/or those that have been issued but not yet adopted as of the date of this filing. ASU not listed below were assessed and determined to be either not applicable or not material.

Adoption of ASU 2016-02

Effective January 1, 2019, the Company adopted ASU 2016-02, Leases (Topic 842), using the optional transition method with a cumulative-effect adjustment recorded as of the beginning of the period of adoption. This ASU substantially changes a lessee’s accounting for leases and requires the recording, on balance sheet, using a dual lease accounting model, of a “right-of-use” asset and lease liability. Leases are to be classified as either operating or finance leases. Under the standard, operating leases will recognize total lease expense using a straight-line recognition method and finance leases are to be treated as the purchase of an asset on a financed basis. For lessors, the standard modifies classification criteria and accounting for sales-type and direct financing leases and requires a lessor to derecognize the carrying value of the leased asset that is considered to have been transferred to a lessee and record a lease receivable and residual asset (“receivable and residual” approach). The standard also eliminates the leveraged lease accounting model for lessors and real estate specific provisions (i.e., those related to sale-leaseback transactions); it does allow, however, a grandfathering of the leveraged lease accounting model for those existing leases that are being accounted for using such model.

In addition, the Company elected the package of practical expedients permitted under the transition guidance within the standard which eliminated the need to reassess: (a) whether any existing contracts are, or contain, leases; (b) the lease classification for any existing leases (i.e., all existing lessee arrangements that were classified as operating leases before are now classified as operating leases, and all existing lessee arrangements that were classified as capital leases before are now classified as finance leases); and (c) initial direct costs for any existing leases. The Company did not elect the practical expedient, which may be applied separately, to use hindsight in determining the lease term and in assessing impairment of the Company’s right-of-use assets.

Adoption of the standard resulted in the recording of right-of-use assets and lease liabilities related to existing operating leases of approximately $600 million as of January 1, 2019. Adoption of the standard also resulted in additional required disclosures. See Note 7 for additional information.

7

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Other ASU adopted during the three months ended March 31, 2019

Standard	Description	Effective date and method of adoption	Effect on the financial statements or other significant matters
ASU 2017-08, Receivables -Nonrefundable Fees and Other Costs (Subtopic 310-20) Premium Amortization on Purchased Callable Debt Securities	This ASU requires certain premiums on callable debt securities to be amortized to the earliest call date.	January 1, 2019 using the modified retrospective method which included cumulative-effect adjustment on the balance sheet as of the beginning of the fiscal year of adoption.	Adoption of the ASU did not have a significant impact on the Company’s Consolidated Financial Statements and Notes to the Consolidated Financial Statements. The impact of the cumulative-effect adjustment to retained earnings was immaterial.
ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities	This ASU makes targeted changes to the existing hedge accounting model to better portray the economics of an entity’s risk management activities and to simplify the use of hedge accounting. The ASU eliminates separate measurement and recording of hedge ineffectiveness. It requires entities to present the earnings effect of the hedging instrument in the same income statement line item in which the hedged item is reported and also requires expanded disclosures.	January 1, 2019 using the modified retrospective method which included cumulative-effect adjustment on the balance sheet as of the beginning of the fiscal year of adoption.	Adoption of the ASU did not have a significant impact on the Company’s Consolidated Financial Statements and Notes to the Consolidated Financial Statements. The impact of the cumulative-effect adjustment to retained earnings and accumulated other comprehensive income (loss) (“AOCI”) related to ineffectiveness of the hedge instruments outstanding at the date of adoption was immaterial. See Note 5 for additional required disclosures.

ASU issued but not yet adopted as of March 31, 2019 — ASU 2018-12

ASU 2018-12, Financial Services - Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts, was issued by the FASB on August 15, 2018 and is expected to have a significant impact on the Company’s Consolidated Financial Statements and Notes to the Consolidated Financial Statements. The ASU is effective January 1, 2021 (with early adoption permitted), and will impact, at least to some extent, the accounting and disclosure requirements for all long-duration insurance and investment contracts issued by the Company. Outlined below are four key areas of change, although there are other less significant changes not noted below. In addition to the impacts to the balance sheet upon adoption, the Company also expects an impact to how earnings emerge thereafter.

8

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

ASU 2018-12 Amended Topic	Description	Method of adoption	Effect on the financial statements or other significant matters
Cash flow assumptions used to measure the liability for future policy benefits for non-participating traditional and limited-pay insurance products	Requires an entity to review, and if necessary, update the cash flow assumptions used to measure the liability for future policy benefits, for both changes in future assumptions and actual experience, at least annually using a retrospective update method with a cumulative catch-up adjustment recorded in a separate line item in the Consolidated Statements of Operations.	An entity may choose one of two adoption methods for the liability for future policy benefits: (1) a modified retrospective transition method whereby the entity will apply the amendments to contracts in force as of the beginning of the earliest period presented on the basis of their existing carrying amounts, adjusted for the removal of any related amounts in AOCI or (2) a full retrospective transition method.	The options for method of adoption and the impacts of such methods are under assessment.
Discount rate assumption used to measure the liability for future policy benefits for non-participating traditional and limited-pay insurance products	Requires discount rate assumptions to be based on an upper-medium grade fixed income instrument yield and will be required to be updated each quarter with the impact recorded through Other Comprehensive Income (“OCI”).	As noted above, an entity may choose either a modified retrospective transition method or full retrospective transition method for the liability for future policy benefits. Under either method, for balance sheet remeasurement purposes, the liability for future policy benefits will be remeasured using current discount rates as of the beginning of the earliest period presented with the impact recorded as a cumulative effect adjustment to AOCI.	Upon adoption, under either transition method, there will be an adjustment to AOCI as a result of remeasuring in force contract liabilities using current upper-medium grade fixed income instrument yields. The adjustment upon adoption will largely reflect the difference between the discount rate locked-in at contract inception versus current discount rates at transition. The magnitude of such adjustment is currently being assessed.
Amortization of deferred acquisition costs (DAC) and other balances	Requires DAC and other balances, such as unearned revenue reserves and deferred sales inducements, to be amortized on a constant level basis over the expected term of the related contract, independent of expected profitability.	An entity may apply one of two adoption methods: (1) a modified retrospective transition method whereby the entity will apply the amendments to contracts in force as of the beginning of the earliest period presented on the basis of their existing carrying amounts, adjusted for the removal of any related amounts in AOCI or (2) if an entity chooses a full retrospective transition method for its future policy benefits, as described above, it is required to also use a retrospective transition method for DAC and other balances.	The options for method of adoption and the impacts of such methods are under assessment. Under the modified retrospective transition method, the Company would not expect a significant impact to the balance sheet, other than the impact of the removal of any related amounts in AOCI.
Market Risk Benefits	Requires an entity to measure all market risk benefits (e.g., living benefit and death benefit guarantees associated with variable annuities) at fair value with changes in value attributable to changes in an entity’s non-performance risk (“NPR”) recognized in OCI.	An entity will apply a retrospective transition method which will include a cumulative-effect adjustment on the balance sheet as of the earliest period presented.	Upon adoption, the Company expects an impact to retained earnings for the difference between the fair value and carrying value of benefits not currently measured at fair value (e.g., guaranteed minimum death benefits on variable annuities) and an impact from reclassifying the cumulative effect of changes in NPR from retained earnings to AOCI. The magnitude of such adjustments is currently being assessed.

9

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Other ASU issued but not yet adopted as of March 31, 2019

Standard	Description	Effective date and method of adoption	Effect on the financial statements or other significant matters
ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments	This ASU provides a new current expected credit loss model to account for credit losses on certain financial assets and off-balance sheet exposures (e.g., loans held for investment, debt securities held to maturity, reinsurance receivables, net investments in leases and loan commitments). The model requires an entity to estimate lifetime credit losses related to such financial assets and exposures based on relevant information about past events, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. The standard also modifies the current OTTI standard for available-for-sale debt securities to require the use of an allowance rather than a direct write down of the investment, and replaces the existing standard for purchased credit deteriorated loans and debt securities.	January 1, 2020 using the modified retrospective method which will include a cumulative-effect adjustment on the balance sheet as of the beginning of the fiscal year of adoption. However, prospective application is required for purchased credit deteriorated assets previously accounted for under ASU 310-30 and for debt securities for which an OTTI was recognized prior to the date of adoption. Early adoption is permitted beginning January 1, 2019.	The Company does not plan to early adopt this ASU and is currently assessing its impact on the Company’s Consolidated Financial Statements and Notes to the Consolidated Financial Statements.
ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment	This ASU simplifies the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test in current U.S. GAAP, which measures a goodwill impairment by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of the goodwill. Under the ASU, a goodwill impairment should be recorded for the amount by which the carrying amount of a reporting unit exceeds its fair value (capped by the total amount of goodwill allocated to the reporting unit).	January 1, 2020 using the prospective method (with early adoption permitted).	The Company does not plan to early adopt this ASU. The Company does not expect the adoption of the ASU to have a significant impact on the Company’s Consolidated Financial Statements and Notes to the Consolidated Financial Statements.

3. INVESTMENTS

Fixed Maturity Securities

The following tables set forth the composition of fixed maturity securities (excluding investments classified as trading), as of the dates indicated:

10

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	March 31, 2019
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		OTTI in AOCI(4)
	(in millions)
Fixed maturities, available-for-sale:
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	29,476	$	3,664	$	329	$	32,811	$	0
Obligations of U.S. states and their political subdivisions	9,864		990		6		10,848		0
Foreign government bonds	96,130		19,399		113		115,416		0
U.S. public corporate securities	82,529		5,722		902		87,349		(2		)
U.S. private corporate securities(1)	32,624		1,531		291		33,864		(10		)
Foreign public corporate securities	27,483		2,459		179		29,763		(8		)
Foreign private corporate securities	26,243		694		808		26,129		0
Asset-backed securities(2)	12,566		176		53		12,689		(147		)
Commercial mortgage-backed securities	13,834		279		54		14,059		0
Residential mortgage-backed securities(3)	2,899		115		14		3,000		(1		)
Total fixed maturities, available-for-sale(1)	$	333,648	$	35,029	$	2,749	$	365,928	$	(168	)

	March 31, 2019
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(in millions)
Fixed maturities, held-to-maturity:
Foreign government bonds	$	876	$	285	$	0	$	1,161
Foreign public corporate securities	663		70		0		733
Foreign private corporate securities(5)	94		3		0		97
Residential mortgage-backed securities(3)	349		25		0		374
Total fixed maturities, held-to-maturity(5)	$	1,982	$	383	$	0	$	2,365

__________

(1) Excludes notes with amortized cost of $4,216 million (fair value, $4,216 million), which have been offset with the associated payables under a netting agreement.

(2) Includes credit-tranched securities collateralized by loan obligations, sub-prime mortgages, auto loans, credit cards, education loans and other asset types.

(3) Includes publicly-traded agency pass-through securities and collateralized mortgage obligations.

(4) Represents the amount of unrealized losses remaining in AOCI, from the impairment measurement date. Amount excludes $419 million of net unrealized gains on impaired available-for-sale securities and $2 million of net unrealized gains on impaired held-to-maturity securities relating to changes in the value of such securities subsequent to the impairment measurement date.

(5) Excludes notes with amortized cost of $4,879 million (fair value, $4,930 million), which have been offset with the associated payables under a netting agreement.

11

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	December 31, 2018
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		OTTI in AOCI(4)
	(in millions)
Fixed maturities, available-for-sale:
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	28,242	$	2,994	$	642	$	30,594	$	0
Obligations of U.S. states and their political subdivisions	9,880		676		63		10,493		0
Foreign government bonds	96,710		16,714		314		113,110		0
U.S. public corporate securities	82,257		3,912		2,754		83,415		(2		)
U.S. private corporate securities(1)	32,450		1,151		581		33,020		0
Foreign public corporate securities	27,671		2,061		531		29,201		(3		)
Foreign private corporate securities	25,314		434		1,217		24,531		0
Asset-backed securities(2)	12,888		162		77		12,973		(160		)
Commercial mortgage-backed securities	13,396		99		180		13,315		0
Residential mortgage-backed securities(3)	2,937		99		32		3,004		(1		)
Total fixed maturities, available-for-sale(1)	$	331,745	$	28,302	$	6,391	$	353,656	$	(166	)

	December 31, 2018
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(in millions)
Fixed maturities, held-to-maturity:
Foreign government bonds	$	885	$	269	$	0	$	1,154
Foreign public corporate securities	668		64		0		732
Foreign private corporate securities(5)	95		3		0		98
Residential mortgage-backed securities(3)	365		23		0		388
Total fixed maturities, held-to-maturity(5)	$	2,013	$	359	$	0	$	2,372

__________

(1) Excludes notes with amortized cost of $4,216 million (fair value, $4,216 million), which have been offset with the associated payables under a netting agreement.

(2) Includes credit-tranched securities collateralized by loan obligations, sub-prime mortgages, auto loans, credit cards, education loans and other asset types.

(3) Includes publicly-traded agency pass-through securities and collateralized mortgage obligations.

(4) Represents the amount of unrealized losses remaining in AOCI, from the impairment measurement date. Amount excludes $356 million of net unrealized gains on impaired available-for-sale securities and $1 million of net unrealized gains on impaired held-to-maturity securities relating to changes in the value of such securities subsequent to the impairment measurement date.

(5) Excludes notes with amortized cost of $4,879 million (fair value, $4,879 million), which have been offset with the associated payables under a netting agreement.

12

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

The following tables set forth the fair value and gross unrealized losses aggregated by investment category and length of time that individual fixed maturity securities had been in a continuous unrealized loss position, as of the dates indicated:

	March 31, 2019
	Less Than Twelve Months				Twelve Months or More				Total
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
	(in millions)
Fixed maturities(1):
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	1,304	$	2	$	6,431	$	327	$	7,735	$	329
Obligations of U.S. states and their political subdivisions	0		0		345		6		345		6
Foreign government bonds	751		59		1,512		54		2,263		113
U.S. public corporate securities	4,111		104		17,720		798		21,831		902
U.S. private corporate securities	1,747		74		7,379		217		9,126		291
Foreign public corporate securities	1,228		37		3,145		142		4,373		179
Foreign private corporate securities	4,411		158		7,551		650		11,962		808
Asset-backed securities	6,223		41		1,511		12		7,734		53
Commercial mortgage-backed securities	72		0		3,293		54		3,365		54
Residential mortgage-backed securities	23		0		883		14		906		14
Total	$	19,870	$	475	$	49,770	$	2,274	$	69,640	$	2,749

__________ 

(1) Includes $13 million of fair value and less than $1 million of gross unrealized losses, which are not reflected in AOCI, on securities classified as held-to-maturity, as of March 31, 2019.

	December 31, 2018
	Less Than Twelve Months				Twelve Months or More				Total
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
	(in millions)
Fixed maturities(1):
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	3,007	$	67	$	6,986	$	575	$	9,993	$	642
Obligations of U.S. states and their political subdivisions	1,725		25		999		38		2,724		63
Foreign government bonds	2,369		136		3,515		178		5,884		314
U.S. public corporate securities	34,064		1,570		13,245		1,184		47,309		2,754
U.S. private corporate securities	8,923		225		7,985		356		16,908		581
Foreign public corporate securities	7,363		308		2,928		223		10,291		531
Foreign private corporate securities	12,218		692		4,468		525		16,686		1,217
Asset-backed securities	8,255		70		669		7		8,924		77
Commercial mortgage-backed securities	1,781		14		4,733		166		6,514		180
Residential mortgage-backed securities	194		1		1,042		31		1,236		32
Total	$	79,899	$	3,108	$	46,570	$	3,283	$	126,469	$	6,391

13

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

__________ 

(1) Includes $13 million of fair value and less than $1 million of gross unrealized losses, which are not reflected in AOCI, on securities classified as held-to-maturity, as of December 31, 2018.

As of March 31, 2019 and December 31, 2018, the gross unrealized losses on fixed maturity securities were composed of $2,249 million and $5,391 million, respectively, related to “1” highest quality or “2” high quality securities based on the National Association of Insurance Commissioners (“NAIC”) or equivalent rating and $500 million and $1,000 million, respectively, related to other than high or highest quality securities based on NAIC or equivalent rating. As of March 31, 2019, the $2,274 million of gross unrealized losses of twelve months or more were concentrated in U.S. government bonds and in the Company’s corporate securities within the consumer non-cyclical, utility, and finance sectors. As of December 31, 2018, the $3,283 million of gross unrealized losses of twelve months or more were concentrated in U.S. government bonds and in the Company’s corporate securities within the utility, consumer non-cyclical and finance sectors. In accordance with its policy described in Note 2 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, the Company concluded that an adjustment to earnings for OTTI for these fixed maturity securities was not warranted at either March 31, 2019 or December 31, 2018. These conclusions were based on a detailed analysis of the underlying credit and cash flows on each security. Gross unrealized losses are primarily attributable to general credit spread widening, increases in interest rates and foreign currency exchange rate movements. As of March 31, 2019, the Company did not intend to sell these securities, and it was not more likely than not that the Company would be required to sell these securities before the anticipated recovery of the remaining amortized cost basis.

The following table sets forth the amortized cost and fair value of fixed maturities by contractual maturities, as of the date indicated:

	March 31, 2019
	Available-for-Sale				Held-to-Maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(in millions)
Fixed maturities:
Due in one year or less	$	17,488	$	17,954	$	66	$	67
Due after one year through five years	49,857		52,880		112		115
Due after five years through ten years	64,580		69,373		582		651
Due after ten years(1)	172,424		195,973		873		1,158
Asset-backed securities	12,566		12,689		0		0
Commercial mortgage-backed securities	13,834		14,059		0		0
Residential mortgage-backed securities	2,899		3,000		349		374
Total	$	333,648	$	365,928	$	1,982	$	2,365

__________ 

(1) Excludes available-for-sale notes with amortized cost of $4,216 million (fair value, $4,216 million) and held-to-maturity notes with amortized cost of $4,879 million (fair value, $4,930 million), which have been offset with the associated payables under a netting agreement.

Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations. Asset-backed, commercial mortgage-backed and residential mortgage-backed securities are shown separately in the table above, as they do not have a single maturity date.

The following table sets forth the sources of fixed maturity proceeds and related investment gains (losses), as well as losses on impairments of fixed maturities, for the periods indicated:

14

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	Three Months Ended March 31,
	2019			2018
	(in millions)
Fixed maturities, available-for-sale:
Proceeds from sales(1)	$	10,162		$	9,585
Proceeds from maturities/prepayments	4,488			5,226
Gross investment gains from sales and maturities	483			374
Gross investment losses from sales and maturities	(188		)	(257		)
OTTI recognized in earnings(2)	(35		)	(39		)
Fixed maturities, held-to-maturity:
Proceeds from maturities/prepayments(3)	$	14		$	36

__________ 

(1) Includes $587 million and $146 million of non-cash related proceeds due to the timing of trade settlements for the three months ended March 31, 2019 and 2018, respectively.

(2) Excludes the portion of OTTI amounts remaining in “Other comprehensive income (loss)” (“OCI”), representing any difference between the fair value of the impaired debt security and the net present value of its projected future cash flows at the time of impairment.

(3) Includes $0 million of non-cash related proceeds due to the timing of trade settlements for both three months ended March 31, 2019 and 2018.

The following table sets forth a rollforward of pre-tax amounts remaining in OCI related to fixed maturity securities with credit loss impairments recognized in earnings, for the periods indicated: 

	Three Months Ended March 31,
	2019			2018
	(in millions)
Credit loss impairments:
Balance, beginning of period	$	140		$	319
New credit loss impairments	16			0
Additional credit loss impairments on securities previously impaired	0			0
Increases due to the passage of time on previously recorded credit losses	1			2
Reductions for securities which matured, paid down, prepaid or were sold during the period	(7		)	(113		)
Reductions for securities impaired to fair value during the period(1)	0			(4		)
Accretion of credit loss impairments previously recognized due to an increase in cash flows expected to be collected	(1		)	(1		)
Balance, end of period	$	149		$	203

__________ 

(1) Represents circumstances where the Company determined in the current period that it intends to sell the security or it is more likely than not that it will be required to sell the security before recovery of the security’s amortized cost.

15

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Assets Supporting Experience-Rated Contractholder Liabilities

The following table sets forth the composition of “Assets supporting experience-rated contractholder liabilities,” as of the dates indicated:

	March 31, 2019				December 31, 2018
	Amortized Cost or Cost		Fair Value		Amortized Cost or Cost		Fair Value
	(in millions)
Short-term investments and cash equivalents	$	368	$	368	$	215	$	215
Fixed maturities:
Corporate securities	13,443		13,572		13,258		13,119
Commercial mortgage-backed securities	2,282		2,297		2,346		2,324
Residential mortgage-backed securities(1)	860		855		828		811
Asset-backed securities(2)	1,629		1,651		1,649		1,665
Foreign government bonds	862		878		1,087		1,083
U.S. government authorities and agencies and obligations of U.S. states	414		461		538		577
Total fixed maturities(3)	19,490		19,714		19,706		19,579
Equity securities	1,386		1,586		1,378		1,460
Total assets supporting experience-rated contractholder liabilities(4)	$	21,244	$	21,668	$	21,299	$	21,254

__________ 

(1) Includes publicly-traded agency pass-through securities and collateralized mortgage obligations.

(2) Includes collateralized loan obligations, credit-tranched securities collateralized by sub-prime mortgages, auto loans, credit cards, education loans and other asset types. Collateralized loan obligations at fair value were $1,031 million and $1,028 million as of March 31, 2019 and December 31, 2018, respectively, all of which were rated AAA.

(3) As a percentage of amortized cost, 93% of the portfolio was considered high or highest quality based on NAIC or equivalent ratings, as of both March 31, 2019 and December 31, 2018.

(4) As a percentage of amortized cost, 77% and 78% of the portfolio consisted of public securities as of March 31, 2019 and December 31, 2018, respectively.

The net change in unrealized gains (losses) from assets supporting experience-rated contractholder liabilities still held at period end, recorded within “Other income (loss),” was $469 million and $(398) million during the three months ended March 31, 2019 and 2018, respectively.

Equity Securities

The net change in unrealized gains (losses) from equity securities still held at period end, recorded within “Other income (loss),” was $529 million and $(188) million during the three months ended March 31, 2019 and 2018, respectively.

Concentrations of Financial Instruments

The Company monitors its concentrations of financial instruments and mitigates credit risk by maintaining a diversified investment portfolio which limits exposure to any one issuer.

As of the dates indicated, the Company’s exposure to concentrations of credit risk of single issuers greater than 10% of the Company’s stockholders’ equity included securities of the U.S. government and certain U.S. government agencies and securities guaranteed by the U.S. government, as well as the securities disclosed below:

16

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	March 31, 2019				December 31, 2018
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(in millions)
Investments in Japanese government and government agency securities:
Fixed maturities, available-for-sale	$	71,107	$	85,874	$	71,952	$	84,461
Fixed maturities, held-to-maturity	855		1,133		864		1,127
Fixed maturities, trading	22		22		22		22
Assets supporting experience-rated contractholder liabilities	670		686		691		697
Total	$	72,654	$	87,715	$	73,529	$	86,307

	March 31, 2019				December 31, 2018
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(in millions)
Investments in South Korean government and government agency securities:
Fixed maturities, available-for-sale	$	10,325	$	12,707	$	10,339	$	12,586
Fixed maturities, held-to-maturity	0		0		0		0
Fixed maturities, trading	0		0		0		0
Assets supporting experience-rated contractholder liabilities	15		16		15		15
Total	$	10,340	$	12,723	$	10,354	$	12,601

17

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Commercial Mortgage and Other Loans

The following table sets forth the composition of “Commercial mortgage and other loans,” as of the dates indicated:

	March 31, 2019					December 31, 2018
	Amount (in millions)			% of Total		Amount (in millions)			% of Total
Commercial mortgage and agricultural property loans by property type:
Office	$	13,097		21.7	%	$	13,280		22.4	%
Retail	8,502			14.1		8,639			14.6
Apartments/Multi-Family	16,789			27.9		16,538			28.0
Industrial	12,255			20.4		11,574			19.6
Hospitality	2,187			3.6		1,931			3.3
Other	3,948			6.6		3,846			6.5
Total commercial mortgage loans	56,778			94.3		55,808			94.4
Agricultural property loans	3,402			5.7		3,316			5.6
Total commercial mortgage and agricultural property loans by property type	60,180			100.0	%	59,124			100.0	%
Allowance for credit losses	(115		)			(123		)
Total net commercial mortgage and agricultural property loans by property type	60,065					59,001
Other loans:
Uncollateralized loans	651					660
Residential property loans	147					157
Other collateralized loans	17					17
Total other loans	815					834
Allowance for credit losses	(5		)			(5		)
Total net other loans	810					829
Total commercial mortgage and other loans(1)	$	60,875				$	59,830

__________ 

(1) Includes loans held for sale which are carried at fair value and are collateralized primarily by apartment complexes. As of March 31, 2019 and December 31, 2018, the net carrying value of these loans was $463 million and $763 million, respectively.

As of March 31, 2019, the commercial mortgage and agricultural property loans were secured by properties geographically dispersed throughout the United States (with the largest concentrations in California (27%), Texas (9%) and New York (8%)) and included loans secured by properties in Europe (6%), Australia (1%) and Asia (1%).

18

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

The following table sets forth the activity in the allowance for credit losses for commercial mortgage and other loans, as of the dates indicated:

	Commercial Mortgage Loans			Agricultural Property Loans		Residential Property Loans			Other Collateralized Loans		Uncollateralized Loans		Total
	(in millions)
Balance at December 31, 2017	$	97		$	3	$	1		$	0	$	5	$	106
Addition to (release of) allowance for credit losses	23			0		(1		)	0		0		22
Charge-offs, net of recoveries	0			0		0			0		0		0
Change in foreign exchange	0			0		0			0		0		0
Balance at December 31, 2018	120			3		0			0		5		128
Addition to (release of) allowance for credit losses	(8		)	0		0			0		0		(8		)
Charge-offs, net of recoveries	0			0		0			0		0		0
Change in foreign exchange	0			0		0			0		0		0
Balance at March 31, 2019	$	112		$	3	$	0		$	0	$	5	$	120

The following tables set forth the allowance for credit losses and the recorded investment in commercial mortgage and other loans, as of the dates indicated:

	March 31, 2019
	Commercial Mortgage Loans		Agricultural Property Loans		Residential Property Loans		Other Collateralized Loans		Uncollateralized Loans		Total
	(in millions)
Allowance for credit losses:
Individually evaluated for impairment	$	8	$	0	$	0	$	0	$	0	$	8
Collectively evaluated for impairment	104		3		0		0		5		112
Total ending balance(1)	$	112	$	3	$	0	$	0	$	5	$	120
Recorded investment(2):
Individually evaluated for impairment	$	30	$	18	$	0	$	0	$	0	$	48
Collectively evaluated for impairment	56,748		3,384		147		17		651		60,947
Total ending balance(1)	$	56,778	$	3,402	$	147	$	17	$	651	$	60,995

__________ 

(1) As of March 31, 2019, there were no loans acquired with deteriorated credit quality.

(2) Recorded investment reflects the carrying value gross of related allowance.

	December 31, 2018
	Commercial Mortgage Loans		Agricultural Property Loans		Residential Property Loans		Other Collateralized Loans		Uncollateralized Loans		Total
	(in millions)
Allowance for credit losses:
Individually evaluated for impairment	$	19	$	0	$	0	$	0	$	0	$	19
Collectively evaluated for impairment	101		3		0		0		5		109
Total ending balance(1)	$	120	$	3	$	0	$	0	$	5	$	128
Recorded investment(2):
Individually evaluated for impairment	$	67	$	35	$	0	$	0	$	2	$	104
Collectively evaluated for impairment	55,741		3,281		157		17		658		59,854
Total ending balance(1)	$	55,808	$	3,316	$	157	$	17	$	660	$	59,958

19

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

__________

(1) As of December 31, 2018, there were no loans acquired with deteriorated credit quality.

(2) Recorded investment reflects the carrying value gross of related allowance.

The following tables set forth certain key credit quality indicators based upon the recorded investment gross of allowance for credit losses, as of the date indicated:

Commercial mortgage loans 

	March 31, 2019
	Debt Service Coverage Ratio
	>1.2X		1.0X to <1.2X		< 1.0X		Total
	(in millions)
Loan-to-Value Ratio:
0%-59.99%	$	29,977	$	652	$	129	$	30,758
60%-69.99%	17,205		688		0		17,893
70%-79.99%	6,971		744		42		7,757
80% or greater	195		83		92		370
Total commercial mortgage loans	$	54,348	$	2,167	$	263	$	56,778

Agricultural property loans 

	March 31, 2019
	Debt Service Coverage Ratio
	>1.2X		1.0X to <1.2X		< 1.0X		Total
	(in millions)
Loan-to-Value Ratio:
0%-59.99%	$	3,098	$	167	$	58	$	3,323
60%-69.99%	63		0		0		63
70%-79.99%	0		16		0		16
80% or greater	0		0		0		0
Total agricultural property loans	$	3,161	$	183	$	58	$	3,402

Total commercial mortgage and agricultural property loans

	March 31, 2019
	Debt Service Coverage Ratio
	>1.2X		1.0X to <1.2X		< 1.0X		Total
	(in millions)
Loan-to-Value Ratio:
0%-59.99%	$	33,075	$	819	$	187	$	34,081
60%-69.99%	17,268		688		0		17,956
70%-79.99%	6,971		760		42		7,773
80% or greater	195		83		92		370
Total commercial mortgage and agricultural property loans	$	57,509	$	2,350	$	321	$	60,180

20

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

The following tables set forth certain key credit quality indicators based upon the recorded investment gross of allowance for credit losses, as of the date indicated:

Commercial mortgage loans 

	December 31, 2018
	Debt Service Coverage Ratio
	>1.2X		1.0X to <1.2X		< 1.0X		Total
	(in millions)
Loan-to-Value Ratio:
0%-59.99%	$	30,325	$	538	$	161	$	31,024
60%-69.99%	16,538		621		0		17,159
70%-79.99%	6,324		754		41		7,119
80% or greater	332		142		32		506
Total commercial mortgage loans	$	53,519	$	2,055	$	234	$	55,808

Agricultural property loans

	December 31, 2018
	Debt Service Coverage Ratio
	>1.2X		1.0X to <1.2X		< 1.0X		Total
	(in millions)
Loan-to-Value Ratio:
0%-59.99%	$	2,997	$	198	$	57	$	3,252
60%-69.99%	64		0		0		64
70%-79.99%	0		0		0		0
80% or greater	0		0		0		0
Total agricultural property loans	$	3,061	$	198	$	57	$	3,316

Total commercial mortgage and agricultural property loans

	December 31, 2018
	Debt Service Coverage Ratio
	>1.2X		1.0X to <1.2X		< 1.0X		Total
	(in millions)
Loan-to-Value Ratio:
0%-59.99%	$	33,322	$	736	$	218	$	34,276
60%-69.99%	16,602		621		0		17,223
70%-79.99%	6,324		754		41		7,119
80% or greater	332		142		32		506
Total commercial mortgage and agricultural property loans	$	56,580	$	2,253	$	291	$	59,124

The following tables set forth an aging of past due commercial mortgage and other loans based upon the recorded investment gross of allowance for credit losses, as well as the amount of commercial mortgage and other loans on non-accrual status, as of the dates indicated:

21

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	March 31, 2019
	Current		30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due(1)		Total Past Due		Total Loans		Non-Accrual Status(2)
	(in millions)
Commercial mortgage loans	$	56,778	$	0	$	0	$	0	$	0	$	56,778	$	22
Agricultural property loans	3,383		1		0		18		19		3,402		21
Residential property loans	144		0		1		2		3		147		2
Other collateralized loans	17		0		0		0		0		17		0
Uncollateralized loans	651		0		0		0		0		651		0
Total	$	60,973	$	1	$	1	$	20	$	22	$	60,995	$	45

 __________

(1) As of March 31, 2019, there were no loans in this category accruing interest.

(2) For additional information regarding the Company’s policies for accruing interest on loans, see Note 2 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.

	December 31, 2018
	Current		30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due(1)		Total Past Due		Total Loans		Non-Accrual Status(2)
	(in millions)
Commercial mortgage loans	$	55,808	$	0	$	0	$	0	$	0	$	55,808	$	66
Agricultural property loans	3,301		0		0		15		15		3,316		18
Residential property loans	154		1		0		2		3		157		3
Other collateralized loans	17		0		0		0		0		17		0
Uncollateralized loans	660		0		0		0		0		660		0
Total	$	59,940	$	1	$	0	$	17	$	18	$	59,958	$	87

__________

(1) As of December 31, 2018, there were no loans in this category accruing interest.

(2) For additional information regarding the Company’s policies for accruing interest on loans, see Note 2 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.

22

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Other Invested Assets

The following table sets forth the composition of “Other invested assets,” as of the dates indicated:

	March 31, 2019		December 31, 2018
	(in millions)
LPs/LLCs:
Equity method:
Private equity	$	3,254	$	3,182
Hedge funds	1,481		1,337
Real estate-related	1,226		1,207
Subtotal equity method	5,961		5,726
Fair value:
Private equity	1,621		1,684
Hedge funds	2,135		2,135
Real estate-related	307		296
Subtotal fair value	4,063		4,115
Total LPs/LLCs	10,024		9,841
Real estate held through direct ownership(1)	2,632		2,466
Derivative instruments	1,028		1,155
Other(2)	1,156		1,064
Total other invested assets	$	14,840	$	14,526

_________ 

(1) As of March 31, 2019 and December 31, 2018, real estate held through direct ownership had mortgage debt of $804 million and $776 million, respectively.

(2) Primarily includes strategic investments made by investment management operations, leveraged leases and member and activity stock held in the Federal Home Loan Banks of New York and Boston. For additional information regarding the Company’s holdings in the Federal Home Loan Banks of New York and Boston, see Note 16 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.

23

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Net Investment Income

The following table sets forth “Net investment income” by investment type, for the periods indicated:

	Three Months Ended March 31,
	2019			2018
	(in millions)
Fixed maturities, available-for-sale(1)	$	3,088		$	2,954
Fixed maturities, held-to-maturity(1)	57			55
Fixed maturities, trading	34			31
Assets supporting experience-rated contractholder liabilities, at fair value	185			191
Equity securities, at fair value	30			35
Commercial mortgage and other loans	600			569
Policy loans	151			152
Other invested assets	205			141
Short-term investments and cash equivalents	118			72
Gross investment income	4,468			4,200
Less: investment expenses	(252		)	(202		)
Net investment income	$	4,216		$	3,998

__________ 

(1) Includes income on credit-linked notes which are reported on the same financial statement line item as related surplus notes, as conditions are met for right to offset.

Realized Investment Gains (Losses), Net

The following table sets forth “Realized investment gains (losses), net,” by investment type, for the periods indicated:

	Three Months Ended March 31,
	2019			2018
	(in millions)
Fixed maturities(1)	$	260		$	78
Commercial mortgage and other loans	10			12
Investment real estate	0			2
LPs/LLCs	(5		)	6
Derivatives(2)	(1,032		)	328
Other	1			(1		)
Realized investment gains (losses), net	$	(766	)	$	425

__________ 

(1) Includes fixed maturity securities classified as available-for-sale and held-to-maturity and excludes fixed maturity securities classified as trading.

(2) Includes the hedged items offset in qualifying fair value hedge accounting relationships.

Net Unrealized Gains (Losses) on Investments within AOCI

The following table sets forth net unrealized gains (losses) on investments, as of the dates indicated:

24

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	March 31, 2019			December 31, 2018
	(in millions)
Fixed maturity securities, available-for-sale—with OTTI	$	251		$	190
Fixed maturity securities, available-for-sale—all other	32,029			21,721
Derivatives designated as cash flow hedges(1)	776			811
Other investments(2)	(2		)	(2		)
Net unrealized gains (losses) on investments	$	33,054		$	22,720

__________ 

(1) For more information on cash flow hedges, see Note 5.

(2) As of March 31, 2019, there were no net unrealized losses on held-to-maturity securities that were previously transferred from available-for-sale. Includes net unrealized gains on certain joint ventures that are strategic in nature and are included in “Other assets.”

Repurchase Agreements and Securities Lending

In the normal course of business, the Company sells securities under agreements to repurchase and enters into securities lending transactions. The following table sets forth the composition of “Securities sold under agreements to repurchase,” as of the dates indicated:

	March 31, 2019						December 31, 2018
	Remaining Contractual Maturities of the Agreements						Remaining Contractual Maturities of the Agreements
	Overnight & Continuous		Up to 30 Days		Total		Overnight & Continuous		Up to 30 Days		Total
	(in millions)
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	780	$	8,718	$	9,498	$	975	$	8,614	$	9,589
U.S. public corporate securities	19		0		19		19		0		19
Residential mortgage-backed securities	0		356		356		0		342		342
Total securities sold under agreements to repurchase(1)	$	799	$	9,074	$	9,873	$	994	$	8,956	$	9,950

__________ 

(1) The Company did not have any agreements with remaining contractual maturities of thirty days or greater, as of the dates indicated.

25

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

The following table sets forth the composition of “Cash collateral for loaned securities” which represents the liability to return cash collateral received for the following types of securities loaned, as of the dates indicated:

	March 31, 2019						December 31, 2018
	Remaining Contractual Maturities of the Agreements						Remaining Contractual Maturities of the Agreements
	Overnight & Continuous		Up to 30 Days		Total		Overnight & Continuous		Up to 30 Days		Total
	(in millions)
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	86	$	0	$	86	$	105	$	0	$	105
Obligations of U.S. states and their political subdivisions	47		0		47		88		0		88
Foreign government bonds	440		0		440		325		0		325
U.S. public corporate securities	2,703		0		2,703		2,563		0		2,563
Foreign public corporate securities	673		0		673		693		0		693
Equity securities	144		0		144		155		0		155
Total cash collateral for loaned securities(1)	$	4,093	$	0	$	4,093	$	3,929	$	0	$	3,929

__________ 

(1) The Company did not have any agreements with remaining contractual maturities of thirty days or greater, as of the dates indicated.

4. VARIABLE INTEREST ENTITIES

In the normal course of its activities, the Company enters into relationships with various special-purpose entities and other entities that are deemed to be variable interest entities (“VIEs”). For additional information, see Note 4 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.

Consolidated Variable Interest Entities

The table below reflects the carrying amount and balance sheet caption in which the assets and liabilities of consolidated VIEs are reported. The liabilities primarily comprise obligations under debt instruments issued by the VIEs. The creditors of these VIEs do not have recourse to the Company in excess of the assets contained within the VIEs.

	Consolidated VIEs for which the Company is the Investment Manager(1)				Other Consolidated VIEs(1)
	March 31, 2019		December 31, 2018		March 31, 2019		December 31, 2018
	(in millions)
Fixed maturities, available-for-sale	$	97	$	73	$	282	$	282
Fixed maturities, held-to-maturity	94		95		824		831
Fixed maturities, trading	1,112		1,076		0		0
Assets supporting experience-rated contractholder liabilities	0		0		7		8
Equity securities	50		41		0		0
Commercial mortgage and other loans	751		730		0		0
Other invested assets	1,761		1,526		93		77
Cash and cash equivalents	124		131		0		0
Accrued investment income	5		5		4		4
Other assets	457		463		733		721
Total assets of consolidated VIEs	$	4,451	$	4,140	$	1,943	$	1,923
Other liabilities	$	325	$	295	$	10	$	17
Notes issued by consolidated VIEs(2)	1,225		955		0		0
Total liabilities of consolidated VIEs	$	1,550	$	1,250	$	10	$	17

26

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

 __________

(1) Total assets of consolidated VIEs reflect $2,210 million and $2,013 million as of March 31, 2019 and December 31, 2018, respectively, related to VIEs whose beneficial interests are wholly-owned by consolidated subsidiaries.

(2) Recourse is limited to the assets of the respective VIE and does not extend to the general credit of the Company. As of March 31, 2019 and December 31, 2018, the maturities of these obligations were greater than five years.

Unconsolidated Variable Interest Entities

The Company has determined that it is not the primary beneficiary of certain VIEs for which it is the investment manager. The Company’s maximum exposure to loss resulting from its relationship with unconsolidated VIEs for which it is the investment manager is limited to its investment in the VIEs, which was $911 million and $836 million at March 31, 2019 and December 31, 2018, respectively. These investments are reflected in “Fixed maturities, available-for-sale,” “Fixed maturities, trading,” “Equity securities” and “Other invested assets.” There are no liabilities associated with these unconsolidated VIEs on the Company’s Unaudited Interim Consolidated Statements of Financial Position.

In the normal course of its activities, the Company will invest in LPs/LLCs, which include hedge funds, private equity funds and real estate-related funds and may or may not be VIEs. The Company’s maximum exposure to loss on these investments, both VIEs and non-VIEs, is limited to the amount of its investment. The Company classifies these investments as “Other invested assets” and its maximum exposure to loss associated with these entities was $10,024 million and $9,841 million as of March 31, 2019 and December 31, 2018, respectively.

In addition, in the normal course of its activities, the Company will invest in structured investments including VIEs for which it is not the investment manager. These structured investments typically invest in fixed income investments and are managed by third-parties and include asset-backed securities, commercial mortgage-backed securities and residential mortgage-backed securities. The Company’s maximum exposure to loss on these structured investments, both VIEs and non-VIEs, is limited to the amount of its investment. See Note 3 for details regarding the carrying amounts and classification of these assets. The Company has not provided material financial or other support that was not contractually required to these structures. The Company has determined that it is not the primary beneficiary of these structures due to the fact that it does not control these entities.

5. DERIVATIVE INSTRUMENTS

Types of Derivative Instruments and Derivative Strategies

The Company utilizes various derivatives instruments and strategies to manage its risk. Commonly used derivative instruments include, but are not necessarily limited to:

•Interest rate contracts: futures, swaps, forwards, options, swaptions, caps and floors

•Equity contracts: futures, options and total return swaps

•Foreign exchange contracts: futures, options, forwards and swaps

•Credit contracts: single and index reference credit default swaps

Other types of financial contracts that the Company accounts for as derivatives are:

• To-be-announced (“TBA”) forward contracts, loan commitments, embedded derivatives and synthetic guaranteed investment contracts (“GICs”).

For detailed information on these contracts and the related strategies, see Note 5 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.

Primary Risks Managed by Derivatives

The table below provides a summary of the gross notional amount and fair value of derivatives contracts by the primary underlying risks, excluding embedded derivatives and associated reinsurance recoverables. Many derivative instruments contain multiple underlying risks. The fair value amounts below represent the gross fair value of derivative contracts prior to taking into account the netting effects of master netting agreements, cash collateral and non-performance risk (“NPR”). This netting impact results in total derivative assets of $1,018 million and $1,148 million as of March 31, 2019 and December 31, 2018, respectively, and total derivative liabilities of $433 million and $127 million as of March 31, 2019 and December 31, 2018, respectively, reflected in the Unaudited Interim Consolidated Statements of Financial Position.

27

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Primary Underlying Risk /Instrument Type	March 31, 2019							December 31, 2018
			Gross Fair Value							Gross Fair Value
	Notional		Assets		Liabilities			Notional		Assets		Liabilities
	(in millions)
Derivatives Designated as Hedge Accounting Instruments:
Interest Rate
Interest Rate Swaps	$	3,835	$	421	$	(69	)	$	3,885	$	305	$	(67	)
Interest Rate Forwards	0		0		0			600		26		0
Foreign Currency
Foreign Currency Forwards	750		22		(4		)	722		26		(2		)
Currency/Interest Rate
Foreign Currency Swaps	21,372		1,359		(352		)	20,724		1,520		(358		)
Total Derivatives Designated as Hedge Accounting Instruments	$	25,957	$	1,802	$	(425	)	$	25,931	$	1,877	$	(427	)
Derivatives Not Qualifying as Hedge Accounting Instruments:
Interest Rate
Interest Rate Swaps	$	139,741	$	6,685	$	(3,288	)	$	140,963	$	5,792	$	(3,435	)
Interest Rate Futures	16,367		1		(23		)	13,991		23		(2		)
Interest Rate Options	22,383		162		(332		)	24,002		147		(314		)
Interest Rate Forwards	2,504		42		0			5,049		72		0
Foreign Currency
Foreign Currency Forwards	21,897		241		(189		)	19,849		246		(138		)
Foreign Currency Options	1		0		0			2		0		0
Currency/Interest Rate
Foreign Currency Swaps	13,645		800		(351		)	13,784		773		(421		)
Credit
Credit Default Swaps	1,181		20		(5		)	5,207		33		(23		)
Equity
Equity Futures	1,325		0		(7		)	1,141		0		(8		)
Equity Options	68,321		478		(614		)	58,693		384		(554		)
Total Return Swaps	16,691		34		(538		)	17,309		1,131		(86		)
Other
Other(1)	512		0		0			508		0		0
Synthetic GICs	80,168		1		0			79,215		2		0
Total Derivatives Not Qualifying as Hedge Accounting Instruments	$	384,736	$	8,464	$	(5,347	)	$	379,713	$	8,603	$	(4,981	)
Total Derivatives(2)(3)	$	410,693	$	10,266	$	(5,772	)	$	405,644	$	10,480	$	(5,408	)

__________

(1) “Other” primarily includes derivative contracts used to improve the balance of the Company’s tail longevity and mortality risk. Under these contracts, the Company’s gains (losses) are capped at the notional amount.

(2) Excludes embedded derivatives and associated reinsurance recoverables which contain multiple underlying risks. The fair value of these embedded derivatives was a net liability of $10,123 million and $8,959 million as of March 31, 2019 and December 31, 2018, respectively, primarily included in “Future policy benefits.”

(3) Recorded in “Other invested assets” and “Other liabilities” on the Unaudited Interim Consolidated Statements of Financial Position.

28

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

As of March 31, 2019, the following amounts were recorded on the Unaudited Interim Consolidated Statements of Financial Position related to the carrying amount of the hedged assets (liabilities) and cumulative basis adjustments included in the carrying amount for fair value hedges.

Balance Sheet Line Item in which Hedged Item is Recorded	Carrying Amount of the Hedged Assets (Liabilities)			Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Assets (Liabilities)(1)
	(in millions)
Fixed maturities, available-for-sale, at fair value	$	421		$	56
Commercial mortgage and other loans	$	34		$	2
Policyholders’ account balances	$	(1,704	)	$	13
Future policy benefits	$	(562	)	$	(77	)

________

(1) There are no fair value hedging adjustments for hedged assets and liabilities for which hedge accounting has been discontinued.

Most of the Company’s derivatives do not qualify for hedge accounting for various reasons. For example: (i) derivatives that economically hedge embedded derivatives do not qualify for hedge accounting because changes in the fair value of the embedded derivatives are already recorded in net income; (ii) derivatives that are utilized as macro hedges of the Company’s exposure to various risks typically do not qualify for hedge accounting because they do not meet the criteria required under portfolio hedge accounting rules; and (iii) synthetic GICs, which are product standalone derivatives, do not qualify as hedging instruments under hedge accounting rules.

Offsetting Assets and Liabilities

The following table presents recognized derivative instruments (excluding embedded derivatives and associated reinsurance recoverables), and repurchase and reverse repurchase agreements that are offset in the Unaudited Interim Consolidated Statements of Financial Position, and/or are subject to an enforceable master netting arrangement or similar agreement, irrespective of whether they are offset in the Unaudited Interim Consolidated Statements of Financial Position.

	March 31, 2019
	Gross Amounts of Recognized Financial Instruments		Gross Amounts Offset in the Statements of Financial Position			Net Amounts Presented in the Statements of Financial Position		Financial Instruments/ Collateral(1)			Net Amount
	(in millions)
Offsetting of Financial Assets:
Derivatives(1)	$	10,177	$	(9,247	)	$	930	$	(736	)	$	194
Securities purchased under agreement to resell	1,199		0			1,199		(1,199		)	0
Total assets	$	11,376	$	(9,247	)	$	2,129	$	(1,935	)	$	194
Offsetting of Financial Liabilities:
Derivatives(1)	$	5,764	$	(5,339	)	$	425	$	(152	)	$	273
Securities sold under agreement to repurchase	9,873		0			9,873		(9,873		)	0
Total liabilities	$	15,637	$	(5,339	)	$	10,298	$	(10,025	)	$	273

29

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	December 31, 2018
	Gross Amounts of Recognized Financial Instruments		Gross Amounts Offset in the Statements of Financial Position			Net Amounts Presented in the Statements of Financial Position		Financial Instruments/ Collateral(1)			Net Amount
	(in millions)
Offsetting of Financial Assets:
Derivatives(1)	$	10,407	$	(9,331	)	$	1,076	$	(614	)	$	462
Securities purchased under agreement to resell	986		0			986		(986		)	0
Total assets	$	11,393	$	(9,331	)	$	2,062	$	(1,600	)	$	462
Offsetting of Financial Liabilities:
Derivatives(1)	$	5,387	$	(5,281	)	$	106	$	(45	)	$	61
Securities sold under agreement to repurchase	9,950		0			9,950		(9,950		)	0
Total liabilities	$	15,337	$	(5,281	)	$	10,056	$	(9,995	)	$	61

__________

(1) Amounts exclude the excess of collateral received/pledged from/to the counterparty.

For information regarding the rights of offset associated with the derivative assets and liabilities in the table above, see “—Counterparty Credit Risk” below. For securities purchased under agreements to resell and securities sold under agreements to repurchase, the Company monitors the value of the securities and maintains collateral, as appropriate, to protect against credit exposure. Where the Company has entered into repurchase and resale agreements with the same counterparty, in the event of default, the Company would generally be permitted to exercise rights of offset. For additional information on the Company’s accounting policy for securities repurchase and resale agreements, see Note 2 to the Company’s Consolidated Financial Statements included in the Annual Report on Form 10-K for the year ended December 31, 2018.

Fair Value, Cash Flow and Net Investment Hedges

The primary derivative instruments used by the Company in its fair value, cash flow and net investment hedge accounting relationships are interest rate swaps, currency swaps and currency forwards. These instruments are only designated for hedge accounting in instances where the appropriate criteria are met. The Company does not use futures, options, credit, equity or embedded derivatives in any of its fair value, cash flow or net investment hedge accounting relationships.

The following table provides the financial statement classification and impact of derivatives used in qualifying and non-qualifying hedge relationships, including the offset of the hedged item in fair value hedge relationships.

30

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	Three Months Ended March 31, 2019
	Realized Investment Gains (Losses)			Net Investment Income			Other Income (Loss)			Interest Expense		Interest Credited to Policyholders’ Account Balances			Policyholders’ Benefits			AOCI(1)
	(in millions)
Derivatives Designated as Hedge Accounting Instruments:
Fair value hedges
Gains (losses) on derivatives designated as hedge instruments:
Interest Rate	$	(5	)	$	(2	)	$	0		$	0	$	68		$	51		$	0
Currency	(1		)	0			0			0		0			0			0
Total gains (losses) on derivatives designated as hedge instruments	(6		)	(2		)	0			0		68			51			0
Gains (losses) on the hedged item:
Interest Rate	2			5			0			0		(66		)	(46		)	0
Currency	1			1			0			0		0			0			0
Total gains (losses) on hedged item	3			6			0			0		(66		)	(46		)	0
Total gains (losses) on fair value hedges net of hedged item	(3		)	4			0			0		2			5			0
Cash flow hedges
Interest Rate	(1		)	0			0			0		0			0			23
Currency	1			0			0			0		0			0			(9		)
Currency/Interest Rate	(8		)	68			(45		)	0		0			0			(58		)
Total gains (losses) on cash flow hedges	(8		)	68			(45		)	0		0			0			(44		)
Net investment hedges
Currency	0			0			0			0		0			0			1
Currency/Interest Rate	0			0			0			0		0			0			0
Total gains (losses) on net investment hedges	0			0			0			0		0			0			1
Derivatives Not Qualifying as Hedge Accounting Instruments:
Interest Rate	1,389			0			0			0		0			0			0
Currency	(39		)	0			4			0		0			0			0
Currency/Interest Rate	184			0			0			0		0			0			0
Credit	69			0			0			0		0			0			0
Equity	(1,811		)	0			0			0		0			0			0
Other	0			0			0			0		0			0			0
Embedded Derivatives	(812		)	0			0			0		0			0			0
Total gains (losses) on derivatives not qualifying as hedge accounting instruments	(1,020		)	0			4			0		0			0			0
Total	$	(1,031	)	$	72		$	(41	)	$	0	$	2		$	5		$	(43	)

31

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	Three Months Ended March 31, 2018(2)
	Realized Investment Gains (Losses)			Net Investment Income			Other Income (Loss)			Interest Expense		Interest Credited to Policyholders’ Account Balances			AOCI(1)
	(in millions)
Derivatives Designated as Hedge Accounting Instruments:
Fair value hedges
Gains (losses) on derivatives designated as hedge instruments:
Interest Rate	$	17		$	(3	)	$	0		$	0	$	(83	)	$	0
Currency	2			0			0			0		0			0
Total gains (losses) on derivatives designated as hedge instruments	19			(3		)	0			0		(83		)	0
Gains (losses) on the hedged item:
Interest Rate	(20		)	14			0			0		86			0
Currency	(2		)	1			0			0		0			0
Total gains (losses) on hedged item	(22		)	15			0			0		86			0
Total gains (losses) on fair value hedges net of hedged item	(3		)	12			0			0		3			0
Cash flow hedges
Interest Rate	0			0			0			0		0			7
Currency	(2		)	0			0			0		0			(8		)
Currency/Interest Rate	(6		)	47			(91		)	0		0			(582		)
Total gains (losses) on cash flow hedges	(8		)	47			(91		)	0		0			(583		)
Net investment hedges
Currency	(2		)	0			0			0		0			(2		)
Currency/Interest Rate	0			0			0			0		0			0
Total gains (losses) on net investment hedges	(2		)	0			0			0		0			(2		)
Derivatives Not Qualifying as Hedge Accounting Instruments:
Interest Rate	(1,516		)	0			0			0		0			0
Currency	414			0			1			0		0			0
Currency/Interest Rate	(549		)	0			(1		)	0		0			0
Credit	(5		)	0			0			0		0			0
Equity	10			0			0			0		0			0
Other	0			0			0			0		0			0
Embedded Derivatives	1,979			0			0			0		0			0
Total gains (losses) on derivatives not qualifying as hedge accounting instruments	333			0			0			0		0			0
Total	$	320		$	59		$	(91	)	$	0	$	3		$	(585	)

_________

(1) Net change in AOCI.

(2) Prior period amounts have been updated to conform to current period presentation.

32

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Presented below is a rollforward of current period cash flow hedges in AOCI before taxes:  

	(in millions)
Balance, December 31, 2018	$	811
Cumulative-effect adjustment from the adoption of ASU 2017-12(1)	9
Amount recorded in AOCI
Interest Rate	22
Currency	(8		)
Currency/Interest Rate	(43		)
Total amount recorded in AOCI	(29		)
Amount reclassified from AOCI to income
Interest Rate	1
Currency	(1		)
Currency/Interest Rate	(15		)
Total amount reclassified from AOCI to income	(15		)
Balance, March 31, 2019	$	776

_________

(1) See Note 2 for details.

The changes in fair value of cash flow hedges are deferred in AOCI and are included in “Net unrealized investment gains (losses)” in the Unaudited Interim Consolidated Statements of Comprehensive Income; these amounts are then reclassified to earnings when the hedged item affects earnings. Using March 31, 2019 values, it is estimated that a pre-tax gain of approximately $246 million is expected to be reclassified from AOCI to earnings during the subsequent twelve months ending March 31, 2020, offset by amounts pertaining to the hedged items.

The exposures the Company is hedging with these qualifying cash flow hedges include the variability of future cash flows from forecasted transactions denominated in foreign currencies, the purchases of invested assets, and the receipt or payment of variable interest on existing financial instruments. The maximum length of time over which the Company is hedging its exposure to the variability in future cash flows for forecasted transactions is 5 years.

There were no material amounts reclassified from AOCI into earnings relating to instances in which the Company discontinued cash flow hedge accounting because the forecasted transaction did not occur by the anticipated date or within the additional time period permitted by the authoritative guidance for the accounting for derivatives and hedging. In addition, there were no instances in which the Company discontinued fair value hedge accounting due to a hedged firm commitment no longer qualifying as a fair value hedge.

For effective net investment hedges, the amounts, before applicable taxes, recorded in the cumulative translation adjustment account within AOCI were $533 million and $532 million as of March 31, 2019 and December 31, 2018, respectively. 

Credit Derivatives

Credit derivatives, where the Company has written credit protection on a single name reference, had outstanding notional amounts of $103 million and $110 million as of March 31, 2019 and December 31, 2018, respectively. These credit derivatives are reported at fair value as an asset of $1 million as of both March 31, 2019 and December 31, 2018. As of March 31, 2019, the notional amount of these credit derivatives had the following NAIC ratings: $36 million in NAIC 1; $61 million in NAIC 2; $4 million in NAIC 3; and $2 million in NAIC 6. The Company has also written credit protection on certain index references with notional amounts of $973 million and $4,953 million as of March 31, 2019 and December 31, 2018, respectively. These credit derivatives are reported at fair value as an asset of $15 million and $10 million as of March 31, 2019 and December 31, 2018, respectively. As of March 31, 2019, the notional amount of these credit derivatives had the following NAIC ratings: $53 million in NAIC 1; $693 million in NAIC 3; and $227 million NAIC 6. NAIC designations are based on the lowest rated single name reference included in the index.

The Company’s maximum amount at risk under these credit derivatives equals the aforementioned notional amounts and assumes the value of the underlying referenced securities become worthless. These single name credit derivatives have maturities of less than 6 years, while the index references have maturities of less than 43 years.

33

In addition to writing credit protection, the Company has purchased credit protection using credit derivatives in order to hedge specific credit exposures in the Company’s investment portfolio. As of March 31, 2019 and December 31, 2018, the Company had $105 million and $145 million of outstanding notional amounts and reported at fair value as a liability of $1 million for both periods. 

Counterparty Credit Risk

The Company is exposed to credit-related losses in the event of non-performance by counterparties to financial derivative transactions with a positive fair value. The Company manages credit risk by: (i) entering into derivative transactions with highly rated major international financial institutions and other creditworthy counterparties governed by master netting agreements, as applicable; (ii) trading through central clearing and over-the-counter (“OTC”) parties; (iii) obtaining collateral, such as cash and securities, when appropriate; and (iv) setting limits on single party credit exposures which are subject to periodic management review.

Substantially all of the Company’s derivative agreements have zero thresholds which require daily full collateralization by the party in a liability position. In addition, certain of the Company’s derivative agreements contain credit-risk related contingent features; if the credit rating of one of the parties to the derivative agreement is to fall below a certain level, the party with positive fair value could request termination at the then fair value or demand immediate full collateralization from the party whose credit rating fell and is in a net liability position.

As of March 31, 2019, there were no net liability derivative positions with counterparties with credit risk-related contingent features; as such, all derivatives have been appropriately collateralized by the Company or the counterparty in accordance with the terms of the derivative agreements.

6. FAIR VALUE OF ASSETS AND LIABILITIES

Fair Value Measurement—Fair value represents the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The authoritative fair value guidance establishes a framework for measuring fair value that includes a hierarchy used to classify the inputs used in measuring fair value. The level in the fair value hierarchy within which the fair value measurement falls is determined based on the lowest level input that is significant to the fair value measurement. The levels of the fair value hierarchy are as follows:

Level 1—Fair value is based on unadjusted quoted prices in active markets that are accessible to the Company for identical assets or liabilities.

Level 2—Fair value is based on significant inputs, other than quoted prices included in Level 1, that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability through corroboration with observable market data. Level 2 inputs include quoted market prices in active markets for similar assets and liabilities, quoted market prices in markets that are not active for identical or similar assets or liabilities, and other market observable inputs.

 Level 3—Fair value is based on at least one significant unobservable input for the asset or liability. The assets and liabilities in this category may require significant judgment or estimation in determining the fair value.

For a discussion of Company’s valuation methodologies for assets and liabilities measured at fair value and the fair value hierarchy, see Note 6 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.

 Assets and Liabilities by Hierarchy Level—The tables below present the balances of assets and liabilities reported at fair value on a recurring basis, as of the dates indicated.

34

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	As of March 31, 2019
	Level 1		Level 2		Level 3		Netting(1)			Total
	(in millions)
Fixed maturities, available-for-sale:
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	0	$	32,723	$	88	$			$	32,811
Obligations of U.S. states and their political subdivisions	0		10,844		4					10,848
Foreign government bonds	0		115,278		138					115,416
U.S. corporate public securities	0		87,231		118					87,349
U.S. corporate private securities(2)	0		32,090		1,774					33,864
Foreign corporate public securities	0		29,694		69					29,763
Foreign corporate private securities	0		25,333		796					26,129
Asset-backed securities(3)	0		11,796		893					12,689
Commercial mortgage-backed securities	0		13,114		945					14,059
Residential mortgage-backed securities	0		2,923		77					3,000
Subtotal	0		361,026		4,902					365,928
Assets supporting experience-rated contractholder liabilities:
U.S. Treasury securities and obligations of U.S. government authorities and agencies	0		258		0					258
Obligations of U.S. states and their political subdivisions	0		203		0					203
Foreign government bonds	0		849		29					878
Corporate securities	0		12,980		592					13,572
Asset-backed securities(3)	0		1,591		60					1,651
Commercial mortgage-backed securities	0		2,297		0					2,297
Residential mortgage-backed securities	0		855		0					855
Equity securities	1,324		261		1					1,586
All other(4)	0		264		0					264
Subtotal	1,324		19,558		682					21,564
Fixed maturities, trading	0		3,195		240					3,435
Equity securities	5,188		779		674					6,641
Commercial mortgage and other loans	0		463		0					463
Other invested assets(5)	3		10,261		373		(9,247		)	1,390
Short-term investments	2,412		2,749		168					5,329
Cash equivalents	1,636		5,318		1					6,955
Other assets	0		0		48					48
Separate account assets(6)(7)	43,565		227,125		1,635					272,325
Total assets	$	54,128	$	630,474	$	8,723	$	(9,247	)	$	684,078
Future policy benefits(8)	$	0	$	0	$	10,025	$			$	10,025
Other liabilities	35		5,740		146		(5,339		)	582
Notes issued by consolidated VIEs	0		0		817					817
Total liabilities	$	35	$	5,740	$	10,988	$	(5,339	)	$	11,424

35

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	As of December 31, 2018
	Level 1		Level 2		Level 3		Netting(1)			Total
	(in millions)
Fixed maturities, available-for-sale:
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	0	$	30,513	$	81	$			$	30,594
Obligations of U.S. states and their political subdivisions	0		10,488		5					10,493
Foreign government bonds	0		112,985		125					113,110
U.S. corporate public securities	0		83,282		133					83,415
U.S. corporate private securities(2)	0		31,265		1,755					33,020
Foreign corporate public securities	0		29,148		53					29,201
Foreign corporate private securities	0		23,787		744					24,531
Asset-backed securities(3)	0		11,726		1,247					12,973
Commercial mortgage-backed securities	0		13,302		13					13,315
Residential mortgage-backed securities	0		2,925		79					3,004
Subtotal	0		349,421		4,235					353,656
Assets supporting experience-rated contractholder liabilities:
U.S. Treasury securities and obligations of U.S. government authorities and agencies	0		381		0					381
Obligations of U.S. states and their political subdivisions	0		196		0					196
Foreign government bonds	0		858		225					1,083
Corporate securities	0		12,675		444					13,119
Asset-backed securities(3)	0		1,516		149					1,665
Commercial mortgage-backed securities	0		2,324		0					2,324
Residential mortgage-backed securities	0		811		0					811
Equity securities	1,222		237		1					1,460
All other(4)	0		215		0					215
Subtotal	1,222		19,213		819					21,254
Fixed maturities, trading	0		3,037		206					3,243
Equity securities	4,819		610		671					6,100
Commercial mortgage and other loans	0		763		0					763
Other invested assets(5)	23		10,454		263		(9,331		)	1,409
Short-term investments	2,713		2,691		89					5,493
Cash equivalents	2,848		6,553		77					9,478
Other assets	0		0		25					25
Separate account assets(6)(7)	39,534		212,998		1,534					254,066
Total assets	$	51,159	$	605,740	$	7,919	$	(9,331	)	$	655,487
Future policy benefits(8)	$	0	$	0	$	8,926	$			$	8,926
Other liabilities	18		5,398		56		(5,281		)	191
Notes issued by consolidated VIEs	0		0		595					595
Total liabilities	$	18	$	5,398	$	9,577	$	(5,281	)	$	9,712

__________

(1) “Netting” amounts represent cash collateral of $3,908 million and $4,050 million as of March 31, 2019 and December 31, 2018, respectively, and the impact of offsetting asset and liability positions held with the same counterparty, subject to master netting arrangements.

(2) Excludes notes with both fair value and carrying amount of $4,216 million and $4,216 million, as of March 31, 2019 and December 31, 2018, respectively, which have been offset with the associated payables under a netting agreement.

(3) Includes credit-tranched securities collateralized by syndicated bank loans, sub-prime mortgages, auto loans, credit cards, education loans and other asset types.

(4) All other represents cash equivalents and short-term investments.

(5) Other invested assets excluded from the fair value hierarchy include certain hedge funds, private equity funds and other funds for which fair value is measured at net asset value (“NAV”) per share (or its equivalent) as a practical expedient. As of March 31, 2019 and December 31, 2018, the fair values of such investments were $4,063 million and $4,115 million respectively.

36

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

(6) Separate account assets included in the fair value hierarchy exclude investments in entities that calculate NAV per share (or its equivalent) as a practical expedient. Such investments excluded from the fair value hierarchy include investments in real estate, hedge funds and other invested assets. As of March 31, 2019 and December 31, 2018, the fair value of such investments was $24,919 million and $25,070 million, respectively.

(7) Separate account assets represent segregated funds that are invested for certain customers. Investment risks associated with market value changes are borne by the customers, except to the extent of minimum guarantees made by the Company with respect to certain accounts. Separate account liabilities are not included in the above table as they are reported at contract value and not fair value in the Company’s Unaudited Interim Consolidated Statements of Financial Position.

(8) As of March 31, 2019, the net embedded derivative liability position of $10.0 billion includes $0.7 billion of embedded derivatives in an asset position and $10.7 billion of embedded derivatives in a liability position. As of December 31, 2018, the net embedded derivative liability position of $8.9 billion includes $0.7 billion of embedded derivatives in an asset position and $9.6 billion of embedded derivatives in a liability position.

Quantitative Information Regarding Internally-Priced Level 3 Assets and Liabilities—The tables below present quantitative information on significant internally-priced Level 3 assets and liabilities.

	As of March 31, 2019
	Fair Value		Valuation Techniques	Unobservable Inputs	Minimum		Maximum	Weighted Average	Impact of Increase in Input on Fair Value(1)
	(in millions)
Assets:
Corporate securities(2)	$	1,362	Discounted  cash flow	Discount rate	0.49%	-	20.00%	8.23%	Decrease
			Market comparables	EBITDA multiples(3)	4.5X		9.2X	8.1X	Increase
			Liquidation	Liquidation value	12.35%	-	100.00%	62.59%	Increase
Separate account assets-commercial mortgage loans(4)	$	822	Discounted cash flow	Spread	1.06%	-	2.45%	1.22%	Decrease
Liabilities:
Future policy benefits(5)	$	10,025	Discounted cash flow	Lapse rate(6)	1%	-	13%		Decrease
				Spread over LIBOR(7)	0.12%	-	1.35%		Decrease
				Utilization rate(8)	50%	-	97%		Increase
				Withdrawal rate	See table footnote (9) below.
				Mortality rate(10)	0%	-	15%		Decrease
				Equity volatility curve	15%	-	22%		Increase

37

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	As of December 31, 2018
	Fair Value		Valuation Techniques	Unobservable Inputs	Minimum		Maximum	Weighted Average	Impact of Increase in Input on Fair Value(1)
	(in millions)
Assets:
Corporate securities(2)	$	1,392	Discounted  cash flow	Discount rate	0.57%	-	20%	8.58%	Decrease
			Market comparables	EBITDA multiples(3)	4.5X	-	8.5X	8.1X	Increase
			Liquidation	Liquidation value	11.77%	-	94.00%	32.16%	Increase
Separate account assets-commercial mortgage loans(4)	$	785	Discounted cash flow	Spread	1.12%	-	2.55%	1.29%	Decrease
Liabilities:
Future policy benefits(5)	$	8,926	Discounted cash flow	Lapse rate(6)	1%	-	13%		Decrease
				Spread over LIBOR(7)	0.36%	-	1.60%		Decrease
				Utilization rate(8)	50%	-	97%		Increase
				Withdrawal rate	See table footnote (9) below.
				Mortality rate(10)	0%	-	15%		Decrease
				Equity volatility curve	18%	-	22%		Increase

__________ 

(1) Conversely, the impact of a decrease in input would have the opposite impact on fair value as that presented in the table.

(2) Includes assets classified as fixed maturities available-for-sale, assets supporting experience-rated contractholder liabilities and fixed maturities trading.

(3) Represents multiples of earnings before interest, taxes, depreciation and amortization (“EBITDA”), and are amounts used when the Company has determined that market participants would use such multiples when valuing the investments.

(4) Changes in the fair value of separate account assets are borne by customers and thus are offset by changes in separate account liabilities on the Company’s Unaudited Interim Consolidated Statements of Financial Position. As a result, changes in value associated with these investments are not reflected in the Company’s Unaudited Interim Consolidated Statements of Operations.

(5) Future policy benefits primarily represent general account liabilities for the living benefit features of the Company’s variable annuity contracts which are accounted for as embedded derivatives. Since the valuation methodology for these liabilities uses a range of inputs that vary at the contract level over the cash flow projection period, presenting a range, rather than weighted average, is a more meaningful representation of the unobservable inputs used in the valuation.

(6) Lapse rates are adjusted at the contract level based on the in-the-moneyness of the living benefit and reflect other factors, such as the applicability of any surrender charges. Lapse rates are reduced when contracts are more in-the-money. Lapse rates are also generally assumed to be lower for the period where surrender charges apply.

(7) The spread over the London Inter-Bank Offered Rate (“LIBOR”) swap curve represents the premium added to the proxy for the risk-free rate (LIBOR) to reflect our estimates of rates that a market participant would use to value the living benefit contracts in both the accumulation and payout phases. This spread includes an estimate of NPR, which is the risk that the obligation will not be fulfilled by the Company. NPR is primarily estimated by utilizing the credit spreads associated with issuing funding agreements, adjusted for any illiquidity risk premium. In order to reflect the financial strength ratings of the Company, credit spreads associated with funding agreements, as opposed to credit spread associated with debt, are utilized in developing this estimate because both funding agreements and living benefit contracts are insurance liabilities and are therefore senior to debt.

(8) The utilization rate assumption estimates the percentage of contracts that will utilize the benefit during the contract duration, and begin lifetime withdrawals at various time intervals from contract inception. The remaining contractholders are assumed to either begin lifetime withdrawals immediately or never utilize the benefit. Utilization assumptions may vary by product type, tax status and age. The impact of changes in these assumptions is highly dependent on the product type, the age of the contractholder at the time of the sale and the timing of the first lifetime income withdrawal. Range reflects the utilization rate for the vast majority of business with living benefits.

(9) The withdrawal rate assumption estimates the magnitude of annual contractholder withdrawals relative to the maximum allowable amount under the contract. These assumptions vary based on the age of the contractholder, the tax status of the contract and the duration since the contractholder began lifetime withdrawals. As of March 31, 2019 and December 31, 2018, the minimum withdrawal rate assumption is 78% and the maximum withdrawal rate assumption may be greater than 100%. The fair value of the liability will generally increase the closer the withdrawal rate is to 100% and decrease as the withdrawal rate moves further away from 100%.

(10) Range reflects the mortality rate for the vast majority of business with living benefits, with policyholders ranging from 50 to 90 years old. While the majority of living benefits have a minimum age requirement, certain benefits do not have an age restriction. This results in contractholders for certain benefits with mortality rates approaching 0%. Based on historical experience, the Company applies a set of age and duration specific mortality rate adjustments compared to standard industry tables. A mortality improvement assumption is also incorporated into the overall mortality table.

38

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Interrelationships Between Unobservable Inputs—In addition to the sensitivities of fair value measurements to changes in each unobservable input in isolation, as reflected in the table above, interrelationships between these inputs may also exist, such that a change in one unobservable input may give rise to a change in another or multiple inputs. For the discussion of the relationships between unobservable inputs as well as market factors that may affect the range of inputs used in the valuation of Level 3 assets and liabilities, see Note 6 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.

Changes in Level 3 Assets and Liabilities—The following tables describe changes in fair values of Level 3 assets and liabilities as of the dates indicated, as well as the portion of gains or losses included in income attributable to unrealized gains or losses related to those assets and liabilities still held at the end of their respective periods. When a determination is made to classify assets and liabilities within Level 3, the determination is based on significance of the unobservable inputs in the overall fair value measurement. All transfers are based on changes in the observability of the valuation inputs, including the availability of pricing service information that the Company can validate. All transfers are generally reported at the value as of the beginning of the quarter in which transfers occur for any such assets still held at the end of the quarter.

39

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	Three Months Ended March 31, 2019
	Fair Value, beginning of period			Total realized and unrealized gains (losses)			Purchases		Sales			Issuances			Settlements			Other(1)			Transfers into Level 3		Transfers out of Level 3			Fair Value, end of period			Unrealized gains (losses) for assets still held(2)
	(in millions)
Fixed maturities, available-for-sale:
U.S. government	$	81		$	0		$	7	$	0		$	0		$	0		$	0		$	0	$	0		$	88		$	0
U.S. states	5			0			0		0			0			(1		)	0			0		0			4			0
Foreign government	125			3			0		0			0			0			1			9		0			138			0
Corporate securities(3)	2,685			4			319		(12		)	0			(379		)	(2		)	164		(22		)	2,757			(21		)
Structured securities(4)	1,339			17			318		0			0			(231		)	(2		)	733		(259		)	1,915			0
Assets supporting experience-rated contractholder liabilities:
Foreign government	225			0			0		0			0			0			(196		)	0		0			29			0
Corporate securities(3)	444			5			27		0			0			(76		)	196			0		(4		)	592			(5		)
Structured securities(4)	149			0			6		0			0			(21		)	0			0		(74		)	60			0
Equity securities	1			0			0		0			0			0			0			0		0			1			0
All other activity	0			0			0		0			0			0			0			0		0			0			0
Other assets:
Fixed maturities, trading	206			(4		)	38		(1		)	0			0			2			0		(1		)	240			0
Equity securities	671			8			23		(11		)	0			(15		)	(2		)	0		0			674			7
Other invested assets	263			(1		)	157		0			0			(42		)	(4		)	0		0			373			(1		)
Short-term investments	89			0			153		0			0			(74		)	0			0		0			168			0
Cash equivalents	77			0			1		0			0			(77		)	0			0		0			1			0
Other assets	25			14			9		0			0			0			0			0		0			48			14
Separate account assets(5)	1,534			81			89		(11		)	0			(23		)	0			0		(35		)	1,635			74
Liabilities:
Future policy benefits	(8,926		)	(810		)	0		0			(290		)	0			1			0		0			(10,025		)	(879		)
Other liabilities	(56		)	(51		)	0		0			(30		)	(6		)	(3		)	0		0			(146		)	(51		)
Notes issued by consolidated VIEs	(595		)	(2		)	0		0			(858		)	638			0			0		0			(817		)	(2		)

	Three Months Ended March 31, 2019
	Total realized and unrealized gains (losses)												Unrealized gains (losses) for assets still held(2)
	Realized investment gains (losses), net			Other income			Interest credited to policyholders’ account balances		Included in other comprehensive income (losses)		Net investment income		Realized investment gains (losses), net			Other income			Interest credited to policyholders’ account balances
	(in millions)
Fixed maturities, available-for-sale	$	(2	)	$	0		$	0	$	22	$	4	$	(21	)	$	0		$	0
Assets supporting experience-rated contractholder liabilities	0			3			0		0		2		0			(5		)	0
Other assets:
Fixed maturities, trading	0			(4		)	0		0		0		0			0			0
Equity securities	0			8			0		0		0		0			7			0
Other invested assets	(1		)	0			0		0		0		(1		)	0			0
Short-term investments	0			0			0		0		0		0			0			0
Cash equivalents	0			0			0		0		0		0			0			0
Other assets	14			0			0		0		0		14			0			0
Separate account assets(5)	0			0			80		0		1		0			0			74
Liabilities:
Future policy benefits	(810		)	0			0		0		0		(879		)	0			0
Other liabilities	(51		)	0			0		0		0		(51		)	0			0
Notes issued by consolidated VIEs	(2		)	0			0		0		0		(2		)	0			0

40

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	Three Months Ended March 31, 2018
	Fair Value, beginning of period			Total realized and unrealized gains (losses)			Purchases		Sales			Issuances			Settlements			Other(1)			Transfers into Level 3		Transfers out of Level 3			Fair Value, end of period			Unrealized gains (losses) for assets still held(2)
	(in millions)
Fixed maturities, available-for-sale:
U.S. government	$	52		$	0		$	7	$	0		$	0		$	0		$	0		$	0	$	0		$	59		$	0
U.S. states	5			0			0		0			0			0			0			0		0			5			0
Foreign government	148			0			0		0			0			0			1			5		(26		)	128			0
Corporate securities(3)	2,776			11			118		(1		)	0			(169		)	12			60		(72		)	2,735			(9		)
Structured securities(4)	6,715			(15		)	1,548		(66		)	0			(649		)	30			1,071		(1,735		)	6,899			0
Assets supporting experience-rated contractholder liabilities:
Foreign government	223			(3		)	0		0			0			0			0			0		0			220			(4		)
Corporate securities(3)	462			1			24		0			0			(18		)	0			0		(1		)	468			0
Structured securities(4)	722			0			3		0			0			(13		)	0			28		(76		)	664			0
Equity securities	4			1			0		0			0			0			0			0		0			5			1
All other activity	7			0			19		0			0			(19		)	0			0		0			7			0
Other assets:
Fixed maturities, trading	156			(2		)	40		(4		)	0			0			5			11		(2		)	204			4
Equity securities	795			14			7		(17		)	0			(37		)	26			0		(3		)	785			13
Other invested assets	137			8			1		0			0			0			(2		)	0		0			144			1
Short-term investments	8			(1		)	14		0			0			(12		)	1			0		0			10			(1		)
Cash equivalents	0			0			0		0			0			0			0			0		0			0			0
Other assets	13			(13		)	0		0			0			0			0			0		0			0			(13		)
Separate account assets(5)	2,122			(33		)	237		(8		)	0			(121		)	0			195		(32		)	2,360			(26		)
Liabilities:
Future policy benefits	(8,720		)	2,026			0		0			(287		)	0			0			0		0			(6,981		)	1,937
Other liabilities	(50		)	(19		)	10		0			0			2			1			0		0			(56		)	(13		)
Notes issued by consolidated VIEs	(1,196		)	(3		)	0		0			0			0			587			0		0			(612		)	(3		)

	Three Months Ended March 31, 2018
	Total realized and unrealized gains (losses)														Unrealized gains (losses) for assets still held(2)
	Realized investment gains (losses), net			Other income			Interest credited to policyholders’ account balances			Included in other comprehensive income (losses)			Net investment income		Realized investment gains (losses), net			Other income			Interest credited to policyholders’ account balances
	(in millions)
Fixed maturities, available-for-sale	$	6		$	0		$	0		$	(14	)	$	4	$	(9	)	$	0		$	0
Assets supporting experience-rated contractholder liabilities	0			(2		)	0			0			1		0			(3		)	0
Other assets:
Fixed maturities, trading	0			(2		)	0			0			0		0			4			0
Equity securities	0			14			0			0			0		0			13			0
Other invested assets	8			0			0			0			0		1			0			0
Short-term investments	(1		)	0			0			0			0		(1		)	0			0
Cash equivalents	0			0			0			0			0		0			0			0
Other assets	(13		)	0			0			0			0		(13		)	0			0
Separate account assets(5)	0			0			(33		)	0			0		0			0			(26		)
Liabilities:
Future policy benefits	2,026			0			0			0			0		1,937			0			0
Other liabilities	(19		)	0			0			0			0		(13		)	0			0
Notes issued by consolidated VIEs	(3		)	0			0			0			0		(3		)	0			0

__________

(1) Other, for the periods ended March 31, 2019 and March 31, 2018, primarily represent deconsolidation of VIE, reclassifications of certain assets between reporting categories and foreign currency translation.

(2) Unrealized gains or losses related to assets still held at the end of the period do not include amortization or accretion of premiums and discounts.

(3) Includes U.S. corporate public, U.S. corporate private, foreign corporate public and foreign corporate private securities.

41

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

(4) Includes asset-backed, commercial mortgage-backed and residential mortgage-backed securities.

(5) Separate account assets represent segregated funds that are invested for certain customers. Investment risks associated with market value changes are borne by the customers, except to the extent of minimum guarantees made by the Company with respect to certain accounts. Separate account liabilities are not included in the above table as they are reported at contract value and not fair value in the Company’s Unaudited Interim Consolidated Statements of Financial Position.

Derivative Fair Value Information

The following tables present the balances of derivative assets and liabilities measured at fair value on a recurring basis, as of the date indicated, by primary underlying risk. These tables include NPR and exclude embedded derivatives and associated reinsurance recoverables. The derivative assets and liabilities shown below are included in “Other invested assets” or “Other liabilities” in the tables contained within the sections “—Assets and Liabilities by Hierarchy Level” and “—Changes in Level 3 Assets and Liabilities,” above.

	As of March 31, 2019
	Level 1		Level 2		Level 3		Netting(1)			Total
	(in millions)
Derivative Assets:
Interest Rate	$	1	$	7,309	$	1	$			$	7,311
Currency	0		263		0					263
Credit	0		20		0					20
Currency/Interest Rate	0		2,159		0					2,159
Equity	1		511		0					512
Other	0		0		0					0
Netting(1)							(9,247		)	(9,247		)
Total derivative assets	$	2	$	10,262	$	1	$	(9,247	)	$	1,018
Derivative Liabilities:
Interest Rate	$	23	$	3,689	$	0	$			$	3,712
Currency	0		193		0					193
Credit	0		5		0					5
Currency/Interest Rate	0		703		0					703
Equity	7		1,152		0					1,159
Other	0		0		0					0
Netting(1)							(5,339		)	(5,339		)
Total derivative liabilities	$	30	$	5,742	$	0	$	(5,339	)	$	433

42

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	As of December 31, 2018
	Level 1		Level 2		Level 3		Netting(1)			Total
	(in millions)
Derivative Assets:
Interest Rate	$	23	$	6,341	$	2	$			$	6,366
Currency	0		273		0					273
Credit	0		33		0					33
Currency/Interest Rate	0		2,292		0					2,292
Equity	0		1,515		0					1,515
Other	0		0		0					0
Netting(1)							(9,331		)	(9,331		)
Total derivative assets	$	23	$	10,454	$	2	$	(9,331	)	$	1,148
Derivative Liabilities:
Interest Rate	$	2	$	3,818	$	0	$			$	3,820
Currency	0		140		0					140
Credit	0		23		0					23
Currency/Interest Rate	0		778		0					778
Equity	7		640		0					647
Other	0		0		0					0
Netting(1)							(5,281		)	(5,281		)
Total derivative liabilities	$	9	$	5,399	$	0	$	(5,281	)	$	127

__________ 

(1) “Netting” amounts represent cash collateral and the impact of offsetting asset and liability positions held with the same counterparty, subject to master netting agreement.

Changes in Level 3 derivative assets and liabilities—The following tables provide a summary of the changes in fair value of Level 3 derivative assets and liabilities as of the dates indicated, as well as the portion of gains or losses included in income, attributable to unrealized gains or losses related to those assets and liabilities still held at the end of their respective periods.

	Three Months Ended March 31, 2019
	Fair Value, beginning of period		Total realized and unrealized gains (losses)(1)			Purchases		Sales		Issuances		Settlements		Other		Transfers into Level 3(2)		Transfers out of Level 3(2)		Fair Value, end of period		Unrealized gains (losses) for assets still held(1)
	(in millions)
Net Derivative - Equity	$	0	$	0		$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0
Net Derivative - Interest Rate	2		(1		)	0		0		0		0		0		0		0		1		(1		)

	Three Months Ended March 31, 2018
	Fair Value, beginning of period			Total realized and unrealized gains (losses)(1)		Purchases		Sales		Issuances		Settlements		Other(3)			Transfers into Level 3(2)		Transfers out of Level 3(2)		Fair Value, end of period		Unrealized gains (losses) for assets still held(1)
	(in millions)
Net Derivative - Equity	$	10		$	0	$	0	$	0	$	0	$	0	$	(5	)	$	1	$	0	$	6	$	1
Net Derivative - Interest Rate	(3		)	9		0		0		0		0		0			0		0		6		8

43

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

__________ 

(1) Total realized and unrealized gains (losses) as well as unrealized gains (losses) for assets still held at the end of the period are recorded in “Realized investment gains (losses), net.”

(2) Transfers into or out of Level 3 are generally reported at the value as of the beginning of the quarter in which the transfers occur for any such positions still held at the end of the quarter.

(3) Represents conversion of warrants to equity shares.

Nonrecurring Fair Value Measurements—The following tables represent information for assets measured at fair value on a nonrecurring basis. The fair value measurement is nonrecurring as these assets are measured at fair value only when there is a triggering event (e.g., an evidence of impairment). Assets included in the table are those that were impaired during the respective reporting periods and that are still held as of the reporting date. The estimated fair values for these amounts were determined using significant unobservable inputs (Level 3).

	Three Months Ended March 31,
	2019			2018
	(in millions)
Realized investment gains (losses) net:
Commercial mortgage loans(1)	$	0		$	0
Mortgage servicing rights(2)	$	(1	)	$	2

	March 31, 2019		December 31, 2018
	(in millions)
Carrying value after measurement as of period end:
Commercial mortgage loans(1)	$	14	$	47
Mortgage servicing rights(2)	$	70	$	73

__________ 

(1) Commercial mortgage loans are valued based on discounted cash flows utilizing market rates or the fair value of the underlying real estate collateral.

(2) Mortgage servicing rights are valued using a discounted cash flow model. The model incorporates assumptions for servicing revenues, which are adjusted for expected prepayments, delinquency rates, escrow deposit income and estimated loan servicing expenses. The discount rates incorporated into the model are determined based on the estimated returns a market participant would require for this business plus a liquidity and risk premium. This estimate includes available relevant data from any active market sales of mortgage servicing rights.

44

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Fair Value Option

The fair value option allows the Company to elect fair value as an alternative measurement for selected financial assets and financial liabilities not otherwise reported at fair value. Such elections have been made by the Company to help mitigate volatility in earnings that result from different measurement attributes. Electing the fair value option also allows the Company to achieve consistent accounting for certain assets and liabilities. Changes in fair value are reflected in “Realized investment gains (losses), net” for commercial mortgage and other loans and “Other income (loss)” for other assets and notes issued by consolidated VIEs. Changes in fair value due to instrument-specific credit risk are estimated using changes in credit spreads and quality ratings for the period reported. Interest income on commercial mortgage and other loans is included in “Net investment income.” Interest income on these loans is recorded based on the effective interest rates as determined at the closing of the loan.

The following tables present information regarding assets and liabilities where the fair value option has been elected.

	Three Months Ended March 31,
	2019		2018
	(in millions)
Liabilities:
Notes issued by consolidated VIEs:
Changes in fair value	$	2	$	3

	Three Months Ended March 31,
	2019		2018
	(in millions)
Commercial mortgage and other loans:
Interest income	$	6	$	2
Notes issued by consolidated VIEs:
Interest expense	$	9	$	9

	March 31, 2019		December 31, 2018
	(in millions)
Commercial mortgage and other loans(1):
Fair value as of period end	$	463	$	763
Aggregate contractual principal as of period end	$	457	$	754
Other assets:
Fair value as of period end	$	10	$	10
Notes issued by consolidated VIEs:
Fair value as of period end	$	817	$	595
Aggregate contractual principal as of period end	$	857	$	632

__________ 

(1) As of March 31, 2019, for loans for which the fair value option has been elected, there were no loans in non-accrual status and none of the loans were more than 90 days past due and still accruing.

Fair Value of Financial Instruments

The table below presents the carrying amount and fair value by fair value hierarchy level of certain financial instruments that are not reported at fair value. The financial instruments presented below are reported at carrying value on the Company’s Unaudited Interim Consolidated Statements of Financial Position. In some cases, as described below, the carrying amount equals or approximates fair value.

45

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

 

	March 31, 2019
	Fair Value								Carrying Amount(1)
	Level 1		Level 2		Level 3		Total		Total
	(in millions)
Assets:
Fixed maturities, held-to-maturity(2)	$	0	$	1,468	$	897	$	2,365	$	1,982
Assets supporting experience-rated contractholders liabilities	52		52		0		104		104
Commercial mortgage and other loans	0		108		61,512		61,620		60,412
Policy loans	0		0		11,986		11,986		11,986
Other invested assets	0		36		0		36		36
Short-term investments	1,553		29		0		1,582		1,582
Cash and cash equivalents	6,574		1,170		0		7,744		7,744
Accrued investment income	0		3,233		0		3,233		3,233
Other assets	146		2,994		555		3,695		3,693
Total assets	$	8,325	$	9,090	$	74,950	$	92,365	$	90,772
Liabilities:
Policyholders’ account balances—investment contracts	$	0	$	31,903	$	68,830	$	100,733	$	100,903
Securities sold under agreements to repurchase	0		9,873		0		9,873		9,873
Cash collateral for loaned securities	0		4,093		0		4,093		4,093
Short-term debt	0		1,862		771		2,633		2,549
Long-term debt(3)	1,887		16,803		1,135		19,825		18,309
Notes issued by consolidated VIEs	0		0		408		408		408
Other liabilities	0		6,290		555		6,845		6,845
Separate account liabilities—investment contracts	0		71,642		25,982		97,624		97,624
Total liabilities	$	1,887	$	142,466	$	97,681	$	242,034	$	240,604

46

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	December 31, 2018
	Fair Value								Carrying Amount(1)
	Level 1		Level 2		Level 3		Total		Total
	(in millions)
Assets:
Fixed maturities, held-to-maturity(2)	$	0	$	1,468	$	904	$	2,372	$	2,013
Assets supporting experience-rated contractholders liabilities	0		0		0		0		0
Commercial mortgage and other loans	0		109		59,106		59,215		59,067
Policy loans	0		0		12,016		12,016		12,016
Other invested assets	0		40		0		40		40
Short-term investments	951		25		0		976		976
Cash and cash equivalents	4,871		1,004		0		5,875		5,875
Accrued investment income	0		3,318		0		3,318		3,318
Other assets	141		2,189		483		2,813		2,813
Total assets	$	5,963	$	8,153	$	72,509	$	86,625	$	86,118
Liabilities:
Policyholders’ account balances—investment contracts	$	0	$	31,422	$	67,006	$	98,428	$	99,829
Securities sold under agreements to repurchase	0		9,950		0		9,950		9,950
Cash collateral for loaned securities	0		3,929		0		3,929		3,929
Short-term debt	0		1,854		658		2,512		2,451
Long-term debt(3)	1,734		15,057		1,181		17,972		17,378
Notes issued by consolidated VIEs	0		0		360		360		360
Other liabilities	0		6,338		510		6,848		6,848
Separate account liabilities—investment contracts	0		66,914		26,022		92,936		92,936
Total liabilities	$	1,734	$	135,464	$	95,737	$	232,935	$	233,681

__________ 

(1) Carrying values presented herein differ from those in the Company’s Unaudited Interim Consolidated Statements of Financial Position because certain items within the respective financial statement captions are not considered financial instruments or are out of scope under authoritative guidance relating to disclosures of the fair value of financial instruments.

(2) Excludes notes with fair value of $4,930 million (carrying amount of $4,879 million) and $4,879 million (carrying amount of $4,879 million) as of both March 31, 2019 and December 31, 2018, respectively, which have been offset with the associated payables under a netting agreement.

(3) Includes notes with fair value of $9,146 million (carrying amount of $9,095 million) and $9,095 million (carrying amount of $9,095 million) as of March 31, 2019 and December 31, 2018, respectively, which have been offset with the associated receivables under a netting agreement.

7. LEASES

The Company occupies leased office space and other facilities in many locations under various long-term leases and has entered into numerous leases covering the long-term use of computers and other equipment. The leases, depending on their specific terms, are classified as either operating or finance with the vast majority of leases falling under the operating classification. The leases in the Company’s portfolio have remaining lease terms from less than one year to 30 years, some of which include options to extend the leases for up to 18 years, and some of which include options to terminate the leases within 8 years. An analysis of all economic and non-economic factors associated with leases containing certain options, including factors such as the existence of cancellation penalties, leasehold improvements made to the underlying assets and location of the underlying assets, is conducted to determine whether those leases are reasonably certain to renew, and, hence, should be included in the lease term that is used to establish the right-of-use assets and lease liabilities for those arrangements.

The Company does not have residual guarantees associated with its lessee arrangements, nor are there any restrictions or covenants associated with its lease arrangements.

47

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Lessee

Supplemental balance sheet information related to leases where the Company is the lessee is included below. Right-of-use assets and lease liabilities are included within “Other assets” and “Other liabilities” respectively.

	March 31, 2019
	(in millions)
Operating Leases:
Right-of-use assets	$	527
Lease liabilities	$	551
Weighted average remaining lease term	6 years
Weighted average discount rate	2.73		%

Maturities of operating lease liabilities are as follows:

	March 31, 2019
	(in millions)
2019 (April - December)	$	117
2020	125
2021	103
2022	77
2023	58
Thereafter	128
Total lease payments	608
Less imputed interest	(57		)
Total	$	551

Lease expense is included in “General and administrative expenses.” For the period ended March 31, 2019, lease expense includes operating lease costs of $34 million and short-term lease costs of $24 million. Short-term lease costs relate to those leases with terms of twelve months or less that do not include an option to purchase the underlying asset that is reasonably certain of exercise.

Lessor

The Company directly owns real estate properties within its investment portfolio. Such real estate is leased to third-parties, with the Company serving as the lessor. The terms of the leases vary depending on property type (e.g., commercial or residential). In most cases, the lessee has an option to renew the lease contract based on market rates but does not have an option to purchase the property. The terms of the leases may also include provisions for the use of common areas. Such non-lease components are not separately accounted for by the Company, as a result of applying the practical expedient discussed in Note 2. Lease income included in “Net investment income” for the period ended March 31, 2019 was $50 million.

8. CLOSED BLOCK

On December 18, 2001, the date of demutualization, The Prudential Insurance Company of America (“PICA”) established a closed block for certain in force participating insurance policies and annuity products, along with corresponding assets used for the payment of benefits and policyholders’ dividends on these products, (collectively the “Closed Block”), and ceased offering these participating products. The recorded assets and liabilities were allocated to the Closed Block at their historical carrying amounts. The Closed Block forms the principal component of the Closed Block division. For more information on the Closed Block, see Note 14 to the Company’s Consolidated Financial Statements included in the Annual Report on Form 10-K for the year ended December 31, 2018.

48

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

As of March 31, 2019 and December 31, 2018, the Company recognized a policyholder dividend obligation of $2,375 million and $2,252 million, respectively, to Closed Block policyholders for the excess of actual cumulative earnings over expected cumulative earnings. Additionally, accumulated net unrealized investment gains that have arisen subsequent to the establishment of the Closed Block have been reflected as a policyholder dividend obligation of $1,980 million and $899 million at March 31, 2019 and December 31, 2018, respectively, to be paid to Closed Block policyholders unless offset by future experience, with a corresponding amount reported in AOCI.

Closed Block liabilities and assets designated to the Closed Block, as well as maximum future earnings to be recognized from these liabilities and assets, are as follows:

	March 31, 2019			December 31, 2018
	(in millions)
Closed Block liabilities
Future policy benefits	$	48,044		$	48,282
Policyholders’ dividends payable	838			812
Policyholders’ dividend obligation	4,355			3,150
Policyholders’ account balances	5,036			5,061
Other Closed Block liabilities	4,147			3,955
Total Closed Block liabilities	62,420			61,260
Closed Block assets
Fixed maturities, available-for-sale, at fair value	39,499			38,538
Fixed maturities, trading, at fair value	185			195
Equity securities, at fair value	2,002			1,784
Commercial mortgage and other loans	8,623			8,782
Policy loans	4,365			4,410
Other invested assets	3,296			3,316
Short-term investments	548			477
Total investments	58,518			57,502
Cash and cash equivalents	549			467
Accrued investment income	475			466
Other Closed Block assets	175			105
Total Closed Block assets	59,717			58,540
Excess of reported Closed Block liabilities over Closed Block assets	2,703			2,720
Portion of above representing accumulated other comprehensive income (loss):
Net unrealized investment gains (losses)	1,938			857
Allocated to policyholder dividend obligation	(1,980		)	(899		)
Future earnings to be recognized from Closed Block assets and Closed Block liabilities	$	2,661		$	2,678

Information regarding the policyholder dividend obligation is as follows:

	Three Months Ended March 31, 2019
	(in millions)
Balance, December 31, 2018	$	3,150
Impact from earnings allocable to policyholder dividend obligation	123
Change in net unrealized investment gains (losses) allocated to policyholder dividend obligation	1,082
Balance, March 31, 2019	$	4,355

49

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Closed Block revenues and benefits and expenses are as follows for the periods indicated:

	Three Months Ended March 31,
	2019			2018
	(in millions)
Revenues
Premiums	$	527		$	551
Net investment income	565			597
Realized investment gains (losses), net	56			(2		)
Other income (loss)	228			21
Total Closed Block revenues	1,376			1,167
Benefits and Expenses
Policyholders’ benefits	709			727
Interest credited to policyholders’ account balances	32			33
Dividends to policyholders	553			308
General and administrative expenses	89			93
Total Closed Block benefits and expenses	1,383			1,161
Closed Block revenues, net of Closed Block benefits and expenses, before income taxes	(7		)	6
Income tax expense (benefit)	(24		)	(9		)
Closed Block revenues, net of Closed Block benefits and expenses and income taxes	$	17		$	15

9. INCOME TAXES

The Company uses a full year projected effective tax rate approach to calculate year-to-date taxes. In addition, certain items impacting total income tax expense are recorded in the periods in which they occur. The projected effective tax rate is the ratio of projected “Total income tax expense” divided by projected “Income before income taxes and equity in earnings of operating joint ventures.” Taxes attributable to operating joint ventures are recorded within “Equity in earnings of operating joint ventures, net of taxes.” The interim period tax expense (or benefit) is the difference between the year-to-date income tax provision and the amounts reported for the previous interim periods of the fiscal year.

The Company’s income tax provision, on a consolidated basis, amounted to an income tax expense of $232 million, or 20.4% of income (loss) before income taxes and equity in earnings of operating joint ventures, in the first three months of 2019, compared to $352 million, or 20.8%, in the first three months of 2018. The Company’s current and prior effective tax rates differed from the U.S. statutory rate of 21% primarily due to non-taxable investment income, tax credits and foreign earnings taxed at higher rates than the U.S. statutory rate. In addition, the first three months of 2018 also includes a $20 million reduction in income tax expense primarily related to refinements of our provisional estimates related to the U.S. Tax Cuts and Jobs Act of 2017.

50

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

10. SHORT-TERM AND LONG-TERM DEBT

Short-term Debt

The table below presents the Company’s short-term debt as of the dates indicated:

	March 31, 2019			December 31, 2018
	($ in millions)
Commercial paper:
Prudential Financial	$	25		$	15
Prudential Funding, LLC	714			727
Subtotal commercial paper	739			742
Mortgage Debt(1)	53			53
Current portion of long-term debt(2)	1,740			1,656
Other(3)	17			—
Total short-term debt(4)	$	2,549		$	2,451
Supplemental short-term debt information:
Portion of commercial paper borrowings due overnight	$	327		$	301
Daily average commercial paper outstanding	$	1,624		$	1,554
Weighted average maturity of outstanding commercial paper, in days	15			12
Weighted average interest rate on outstanding short-term debt(5)	2.22		%	1.9		%

__________

(1) Includes $53 million of mortgage debt denominated in foreign currency at both March 31, 2019 and December 31, 2018.

(2) Includes $1,100 million of senior notes at both March 31, 2019 and December 31, 2018, and $141 million and $57 million of mortgage debt that has recourse only to real estate investment property at March 31, 2019 and December 31, 2018, respectively.

(3) Includes $17 million drawn on a revolving line of credit held by a subsidiary at March 31, 2019.

(4) Includes Prudential Financial debt of $1,125 million and $1,115 million at March 31, 2019 and December 31, 2018, respectively.

(5) Excludes the current portion of long-term debt.

Prudential Financial and certain subsidiaries have access to external sources of liquidity, including membership in the Federal Home Loan Banks, commercial paper programs and a contingent financing facility in the form of a put option agreement. The Company also maintains syndicated, unsecured committed credit facilities as an alternative source of liquidity. At March 31, 2019, no amounts were drawn on these credit facilities. For additional information on these sources of liquidity, see Note 16 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.

Long-term Debt

The table below presents the Company’s long-term debt as of the dates indicated:

51

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	March 31, 2019		December 31, 2018
	(in millions)
Fixed-rate notes:
Surplus notes	$	342	$	341
Surplus notes subject to set-off arrangements(1)	6,895		6,895
Senior notes	9,760		8,774
Mortgage debt(2)	239		237
Floating-rate notes:
Surplus notes subject to set-off arrangements(1)	2,200		2,200
Senior notes	29		29
Mortgage debt(3)	371		430
Junior subordinated notes(4)	7,568		7,568
Subtotal	27,404		26,473
Less: assets under set-off arrangements(1)	9,095		9,095
Total long-term debt(5)	$	18,309	$	17,378

 __________    

(1) The surplus notes have corresponding assets where rights to set-off exist, thereby reducing the amount of surplus notes included in long-term debt.

(2) Includes $103 million and $101 million of debt denominated in foreign currency at March 31, 2019 and December 31, 2018, respectively.

(3) Includes $211 million and $206 million of debt denominated in foreign currency at March 31, 2019 and December 31, 2018, respectively.

(4) Includes Prudential Financial debt of $7,512 million and subsidiary debt of $56 million denominated in foreign currency at March 31, 2019.

(5) Includes Prudential Financial debt of $17,128 million and $16,141 million at March 31, 2019 and December 31, 2018, respectively.

At March 31, 2019 and December 31, 2018, the Company was in compliance with all debt covenants related to the borrowings in the table above.

Senior Notes. As of March 31, 2019, the outstanding balance of the Company’s senior notes was $10.89 billion, an increase of $1 billion from December 31, 2018. The increase was due to the issuance in the first quarter of $1 billion of notes with an interest rate of 4.350% maturing in February 2050.

Mortgage Debt. As of March 31, 2019, the Company’s subsidiaries had mortgage debt of $804 million that has recourse only to real estate property held for investment by those subsidiaries. This represents an increase of $28 million from December 31, 2018, due to $21 million in new borrowings and $7 million from foreign currency exchange rate fluctuations.

11. EMPLOYEE BENEFIT PLANS

Pension and Other Postretirement Plans

The Company has funded and non-funded non-contributory defined benefit pension plans (“Pension Benefits”), which cover substantially all of its employees. For some employees, benefits are based on final average earnings and length of service, while benefits for other employees are based on an account balance that takes into consideration age, service and earnings during their career.

The Company provides certain health care and life insurance benefits for its retired employees, their beneficiaries and covered dependents (“Other Postretirement Benefits”). The health care plan is contributory; the life insurance plan is non-contributory. Substantially all of the Company’s U.S. employees may become eligible to receive Other Postretirement Benefits if they retire after age 55 with at least 10 years of service or under certain circumstances after age 50 with at least 20 years of continuous service.

52

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Net periodic (benefit) cost included in “General and administrative expenses” includes the following components:

	Three Months Ended March 31,
	Pension Benefits						Other Postretirement Benefits
	2019			2018			2019			2018
	(in millions)
Components of net periodic (benefit) cost:
Service cost	$	73		$	79		$	6		$	6
Interest cost	123			112			19			18
Expected return on plan assets	(204		)	(204		)	(24		)	(27		)
Amortization of prior service cost	(1		)	(1		)	1			0
Amortization of actuarial (gain) loss, net	54			53			6			4
Settlements	0			0			0			0
Special termination benefits	0			0			0			0
Net periodic (benefit) cost	$	45		$	39		$	8		$	1

12. EQUITY

The changes in the number of shares of Common Stock issued, held in treasury and outstanding, are as follows for the periods indicated:

	Common Stock
	Issued	Held In Treasury		Outstanding
	(in millions)
Balance, December 31, 2018	660.1	249.4		410.7
Common Stock issued	0.0	0.0		0.0
Common Stock acquired	0.0	5.4		(5.4	)
Stock-based compensation programs(1)	0.0	(2.0	)	2.0
Balance, March 31, 2019	660.1	252.8		407.3

__________ 

(1) Represents net shares issued from treasury pursuant to the Company’s stock-based compensation programs.

In December 2018, Prudential Financial’s Board of Directors (the “Board”) authorized the Company to repurchase at management’s discretion up to $2.0 billion of its outstanding Common Stock during the period from January 1, 2019 through December 31, 2019. As of March 31, 2019, 5.4 million shares of the Company’s Common Stock were repurchased under this authorization at a total cost of $500 million.

The timing and amount of share repurchases are determined by management based upon market conditions and other considerations, and repurchases may be effected in the open market, through derivative, accelerated repurchase and other negotiated transactions and through prearranged trading plans complying with Rule 10b5-1(c) under the Securities Exchange Act of 1934 (the “Exchange Act”). Numerous factors could affect the timing and amount of any future repurchases under the share repurchase authorization, including increased capital needs of the Company due to changes in regulatory capital requirements, opportunities for growth and acquisitions, and the effect of adverse market conditions on the segments.

Dividends declared per share of Common Stock are as follows for the periods indicated:

	Three Months Ended March 31,
	2019		2018
Dividends declared per share of Common Stock	$	1.00	$	0.90

53

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Accumulated Other Comprehensive Income (Loss)

AOCI represents the cumulative OCI items that are reported separate from net income and detailed on the Unaudited Interim Consolidated Statements of Comprehensive Income. The balance of and changes in each component of AOCI as of and for the three months ended March 31, 2019 and 2018, are as follows:

	Accumulated Other Comprehensive Income (Loss) Attributable to Prudential Financial, Inc.
	Foreign Currency Translation Adjustment			Net Unrealized Investment Gains (Losses)(1)			Pension and Postretirement Unrecognized Net Periodic Benefit (Cost)			Total Accumulated Other Comprehensive Income (Loss)
	(in millions)
Balance, December 31, 2018	$	(564	)	$	14,745		$	(3,275	)	$	10,906
Change in OCI before reclassifications	(109		)	8,564			4			8,459
Amounts reclassified from AOCI	5			(275		)	60			(210		)
Income tax benefit (expense)	(3		)	(1,926		)	(15		)	(1,944		)
Cumulative effect of adoption of ASU 2017-12	0			7			0			7
Balance, March 31, 2019	$	(671	)	$	21,115		$	(3,226	)	$	17,218

	Accumulated Other Comprehensive Income (Loss) Attributable to Prudential Financial, Inc.
	Foreign Currency Translation Adjustment			Net Unrealized Investment Gains (Losses)(1)			Pension and Postretirement Unrecognized Net Periodic Benefit (Cost)			Total Accumulated Other Comprehensive Income (Loss)
	(in millions)
Balance, December 31, 2017	$	(269	)	$	19,968		$	(2,625	)	$	17,074
Change in OCI before reclassifications	649			(4,640		)	(2		)	(3,993		)
Amounts reclassified from AOCI	0			(26		)	56			30
Income tax benefit (expense)	8			845			(9		)	844
Cumulative effect of adoption of ASU 2016-01	0			(847		)	0			(847		)
Cumulative effect of adoption of ASU 2018-02	(231		)	2,282			(398		)	1,653
Balance, March 31, 2018	$	157		$	17,582		$	(2,978	)	$	14,761

__________

(1) Includes cash flow hedges of $776 million and $811 million as of March 31, 2019 and December 31, 2018, respectively, and $(622) million and $(39) million as of March 31, 2018 and December 31, 2017, respectively.

54

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Reclassifications out of Accumulated Other Comprehensive Income (Loss)

	Three Months Ended March 31,						Affected line item in Consolidated Statements of Operations
	2019			2018
	(in millions)
Amounts reclassified from AOCI(1)(2):
Foreign currency translation adjustment:
Foreign currency translation adjustments	$	(5	)	$	0		Realized investment gains (losses), net
Foreign currency translation adjustments	0			0			Other income (loss)
Total foreign currency translation adjustment	(5		)	0
Net unrealized investment gains (losses):
Cash flow hedges—Interest rate	(1		)	0			(3)
Cash flow hedges—Currency	1			(3		)	(3)
Cash flow hedges—Currency/Interest rate	15			(49		)	(3)
Net unrealized investment gains (losses) on available-for-sale securities	260			78
Total net unrealized investment gains (losses)	275			26			(4)
Amortization of defined benefit pension items:
Prior service cost	0			1			(5)
Actuarial gain (loss)	(60		)	(57		)	(5)
Total amortization of defined benefit pension items	(60		)	(56		)
Total reclassifications for the period	$	210		$	(30	)

__________

(1) All amounts are shown before tax.

(2) Positive amounts indicate gains/benefits reclassified out of AOCI. Negative amounts indicate losses/costs reclassified out of AOCI.

(3) See Note 5 for additional information on cash flow hedges.

(4) See table below for additional information on unrealized investment gains (losses), including the impact on deferred policy acquisition and other costs, future policy benefits and policyholders’ dividends.

(5) See Note 11 for information on employee benefit plans.

Net Unrealized Investment Gains (Losses)

Net unrealized investment gains (losses) on securities classified as available-for-sale and certain other invested assets and other assets are included in the Company’s Unaudited Interim Consolidated Statements of Financial Position as a component of AOCI. Changes in these amounts include reclassification adjustments to exclude from “Other comprehensive income (loss)” those items that are included as part of “Net income (loss)” for a period that had been part of “Other comprehensive income (loss)” in earlier periods. The amounts for the periods indicated below, split between amounts related to fixed maturity securities on which an OTTI loss has been recognized, and all other net unrealized investment gains (losses), are as follows:

55

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Net Unrealized Investment Gains (Losses) on Fixed Maturity Securities on which an OTTI loss has been recognized

	Net Unrealized Gains (Losses) on Investments			DAC, DSI, VOBA and Reinsurance Recoverables			Future Policy Benefits, Policyholders’ Account Balances and Reinsurance Payables		Policyholders’ Dividends			Deferred Income Tax (Liability) Benefit			Accumulated Other Comprehensive Income (Loss) Related to Net Unrealized Investment Gains (Losses)
	(in millions)
Balance, December 31, 2018	$	189		$	(1	)	$	4	$	(23	)	$	(61	)	$	108
Net investment gains (losses) on investments arising during the period	68											(16		)	52
Reclassification adjustment for (gains) losses included in net income	(5		)									1			(4		)
Reclassification adjustment for OTTI losses excluded from net income(1)	(1		)									0			(1		)
Impact of net unrealized investment (gains) losses on DAC, DSI, VOBA and reinsurance recoverables				0								0			0
Impact of net unrealized investment (gains) losses on future policy benefits and policyholders’ account balances and reinsurance payables							0					0			0
Impact of net unrealized investment (gains) losses on policyholders’ dividends									(9		)	2			(7		)
Balance, March 31, 2019	$	251		$	(1	)	$	4	$	(32	)	$	(74	)	$	148

__________

(1) Represents “transfers in” related to the portion of OTTI losses recognized during the period that were not recognized in earnings for securities with no prior OTTI loss.

 All Other Net Unrealized Investment Gains (Losses) in AOCI

	Net Unrealized Gains (Losses) on Investments(1)			DAC, DSI, VOBA and Reinsurance Recoverables			Future Policy Benefits, Policyholders’ Account Balances and Reinsurance Payables			Policyholders’ Dividends			Deferred Income Tax (Liability) Benefit			Accumulated Other Comprehensive Income (Loss) Related to Net Unrealized Investment Gains (Losses)
	(in millions)
Balance, December 31, 2018	$	22,531		$	(738	)	$	(791	)	$	(894	)	$	(5,471	)	$	14,637
Net investment gains (losses) on investments arising during the period	10,532												(2,401		)	8,131
Reclassification adjustment for (gains) losses included in net income	(270		)										62			(208		)
Reclassification adjustment for OTTI losses excluded from net income(2)	1												0			1
Impact of net unrealized investment (gains) losses on DAC, DSI, VOBA and reinsurance recoverables				(459		)							103			(356		)
Impact of net unrealized investment (gains) losses on future policy benefits and policyholders’ account balances and reinsurance payables							(492		)				98			(394		)
Impact of net unrealized investment (gains) losses on policyholders’ dividends										(1,078		)	227			(851		)
Cumulative effect of adoption of ASU 2017-12	9												(2		)	7
Balance, March 31, 2019	$	32,803		$	(1,197	)	$	(1,283	)	$	(1,972	)	$	(7,384	)	$	20,967

__________

(1) Includes cash flow hedges. See Note 5 for information on cash flow hedges.

(2) Represents “transfers out” related to the portion of OTTI losses recognized during the period that were not recognized in earnings for securities with no prior OTTI loss.

56

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

13. EARNINGS PER SHARE

A reconciliation of the numerators and denominators of the basic and diluted per share computations of Common Stock based on the consolidated earnings of Prudential Financial for the periods indicated, is as follows:

	Three Months Ended March 31,
	2019					2018
	Income		Weighted Average Shares	Per Share Amount		Income		Weighted Average Shares	Per Share Amount
	(in millions, except per share amounts)
Basic earnings per share
Net income (loss)	$	937				$	1,364
Less: Income (loss) attributable to noncontrolling interests	5					1
Less: Dividends and undistributed earnings allocated to participating unvested share-based payment awards	10					16
Net income (loss) attributable to Prudential Financial available to holders of Common Stock	$	922	409.2	$	2.25	$	1,347	422.0	$	3.19
Effect of dilutive securities and compensation programs
Add: Dividends and undistributed earnings allocated to participating unvested share-based payment awards—Basic	$	10				$	16
Less: Dividends and undistributed earnings allocated to participating unvested share-based payment awards—Diluted	10					16
Stock options			1.2					1.9
Deferred and long-term compensation programs			1.1					1.1
Exchangeable Surplus Notes	5		6.1			5		5.9
Diluted earnings per share
Net income (loss) attributable to Prudential Financial available to holders of Common Stock	$	927	417.6	$	2.22	$	1,352	430.9	$	3.14

Unvested share-based payment awards that contain nonforfeitable rights to dividends are participating securities and included in the computation of earnings per share pursuant to the two-class method. Under this method, earnings attributable to Prudential Financial are allocated between Common Stock and the participating awards, as if the awards were a second class of stock. During periods of net income available to holders of Common Stock, the calculation of earnings per share excludes the income attributable to participating securities in the numerator and the dilutive impact of these securities from the denominator. In the event of a net loss available to holders of Common Stock, undistributed earnings are not allocated to participating securities and the denominator excludes the dilutive impact of these securities as they do not share in the losses of the Company. Undistributed earnings allocated to participating unvested share-based payment awards for the three months ended March 31, 2019 and 2018, as applicable, were based on 4.6 million and 4.9 million of such awards, respectively, weighted for the period they were outstanding.

Stock options and shares related to deferred and long-term compensation programs that are considered antidilutive are excluded from the computation of diluted earnings per share. Stock options are considered antidilutive based on application of the treasury stock method or in the event of a net loss available to holders of Common Stock. Shares related to deferred and long-term compensation programs are considered antidilutive in the event of a net loss available to holders of Common Stock. For the periods indicated, the number of stock options and shares related to deferred and long-term compensation programs that were considered antidilutive and were excluded from the computation of diluted earnings per share, weighted for the portion of the period they were outstanding, are as follows:

57

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	Three Months Ended March 31,
	2019			2018
	Shares	Exercise Price Per Share		Shares	Exercise Price Per Share
	(in millions, except per share amounts, based on weighted average)
Antidilutive stock options based on application of the treasury stock method	1.1	$	103.47	0.3	$	107.65
Antidilutive stock options due to net loss available to holders of Common Stock	0.0			0.0
Antidilutive shares based on application of the treasury stock method	0.0			0.0
Antidilutive shares due to net loss available to holders of Common Stock	0.0			0.0
Total antidilutive stock options and shares	1.1			0.3

In September 2009, the Company issued $500 million of surplus notes with an interest rate of 5.36% per annum which are exchangeable at the option of the note holders for shares of Common Stock. The initial exchange rate for the surplus notes was 10.1235 shares of Common Stock per each $1,000 principal amount of surplus notes. This was equivalent to 5.1 million shares and an initial exchange price per share of Common Stock of $98.78. The exchange rate is subject to customary anti-dilution adjustments and is accordingly revalued during the fourth quarter of each year. As of March 31, 2019, the exchange rate is equal to 12.1719 shares of Common Stock per each $1,000 principal amount of surplus notes. This is equivalent to 6.09 million shares and an exchange price per share of Common Stock of $82.16. In calculating diluted earnings per share under the if-converted method, the potential shares that would be issued assuming a hypothetical exchange, weighted for the period the notes are outstanding, are added to the denominator, and the related interest expense, net of tax, is excluded from the numerator, if the overall effect is dilutive.

14. SEGMENT INFORMATION

Segments

The Company’s principal operations are comprised of five divisions, which together encompass seven segments, and its Corporate and Other operations. The PGIM division consists of the PGIM segment. The U.S. Workplace Solutions division consists of the Retirement and Group Insurance segments. The U.S. Individual Solutions division consists of the Individual Annuities and Individual Life segments. The International Insurance division consists of the International Insurance segment. The Closed Block division consists of the Closed Block segment. The Closed Block division is accounted for as a divested business that is reported separately from the Divested and Run-off Businesses that are included in Corporate and Other operations. Divested and Run-off Businesses are comprised of businesses that have been, or will be, sold or exited, including businesses that have been placed in wind down status that do not qualify for “discontinued operations” accounting treatment under U.S. GAAP. The Company’s Corporate and Other operations include corporate items and initiatives that are not allocated to business segments and businesses that have been or will be divested or placed in run-off, excluding the Closed Black division.

Adjusted Operating Income

The Company analyzes the operating performance of each segment using “adjusted operating income.” Adjusted operating income does not equate to “Income (loss) before income taxes and equity in earnings of operating joint ventures” or “Net income (loss)” as determined in accordance with U.S. GAAP but is the measure of segment profit or loss used by the Company’s chief operating decision maker to evaluate segment performance and allocate resources, and consistent with authoritative guidance, is the measure of segment performance presented below. Adjusted operating income is calculated by adjusting each segment’s “Income (loss) before income taxes and equity in earnings of operating joint ventures” for the following items:

• realized investment gains (losses), net, and related adjustments;

• charges related to realized investment gains (losses), net;

• net investment gains (losses) on assets supporting experience-rated contractholder liabilities and changes in experience-rated contractholder liabilities due to asset value changes;

• divested and run-off businesses; and

• equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests.

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PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

These items are important to an understanding of overall results of operations. Adjusted operating income is not a substitute for income determined in accordance with U.S. GAAP, and the Company’s definition of adjusted operating income may differ from that used by other companies. The Company, however, believes that the presentation of adjusted operating income as measured for management purposes enhances the understanding of results of operations by highlighting the results from ongoing operations and the underlying profitability factors of its businesses. For more information on these reconciling items, see Note 21 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.

Reconciliation of adjusted operating income to net income (loss)

The table below reconciles “Adjusted operating income before income taxes” to “Income before income taxes and equity in earnings of operating joint ventures”:

	Three Months Ended March 31,
	2019			2018
	(in millions)
Adjusted operating income before income taxes by segment:
PGIM	$	214		$	232
Total PGIM division	214			232
Retirement	251			317
Group Insurance	53			55
Total U.S. Workplace Solutions division	304			372
Individual Annuities(1)	472			519
Individual Life	105			36
Total U.S. Individual Solutions division	577			555
International Insurance	922			856
Total International Insurance division	922			856
Corporate and Other operations	(412		)	(294		)
Total Corporate and Other	(412		)	(294		)
Total segment adjusted operating income before income taxes	1,605			1,721
Reconciling items:
Realized investment gains (losses), net, and related adjustments	(663		)	87
Charges related to realized investment gains (losses), net	25			(23		)
Investment gains (losses) on assets supporting experience-rated contractholder liabilities, net	454			(403		)
Change in experience-rated contractholder liabilities due to asset value changes	(403		)	418
Divested and Run-off businesses:
Closed Block division	(19		)	(9		)
Other Divested and Run-off businesses	174			(72		)
Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests	(33		)	(26		)
Consolidated income (loss) before income taxes and equity in earnings of operating joint ventures	$	1,140		$	1,693

__________

(1) Individual Annuities segment results reflect DAC as if the individual annuity business is a stand-alone operation. The elimination of intersegment costs capitalized in accordance with this policy is included in consolidating adjustments within Corporate and Other operations.

Reconciliation of selected financial information

The table below presents total revenues and assets for the Company’s reportable segments and its Corporate and Other operations for the periods and as of the dates indicated:

59

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	Revenues						Total Assets
	Three Months Ended March 31,						March 31, 2019		December 31, 2018
	2019			2018
	(in millions)
PGIM	$	870		$	826		$	47,987	$	47,690
Total PGIM division	870			826			47,987		47,690
Retirement	2,639			2,089			183,175		175,525
Group Insurance	1,441			1,416			42,642		41,727
Total U.S. Workplace Solutions division	4,080			3,505			225,817		217,252
Individual Annuities	1,235			1,252			178,103		167,899
Individual Life	1,482			1,425			88,468		83,739
Total U.S. Individual Solutions division	2,717			2,677			266,571		251,638
International Insurance	6,152			6,040			230,090		222,633
Total International Insurance division	6,152			6,040			230,090		222,633
Corporate and Other operations	(171		)	(173		)	18,647		16,826
Total Corporate and Other	(171		)	(173		)	18,647		16,826
Total	13,648			12,875			789,112		756,039
Reconciling items:
Realized investment gains (losses), net, and related adjustments	(663		)	87
Charges related to realized investment gains (losses), net	(72		)	(71		)
Investment gains (losses) on assets supporting experience-rated contractholder liabilities, net	454			(403		)
Divested and Run-off businesses:
Closed Block division	1,374			1,163			60,212		59,039
Other Divested and Run-off businesses	388			132
Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests	(38		)	(26		)
Total per Unaudited Interim Consolidated Financial Statements	$	15,091		$	13,757		$	849,324	$	815,078

Intersegment revenues

Management has determined the intersegment revenues with reference to market rates. Intersegment revenues are eliminated in consolidation in Corporate and Other operations. The PGIM segment revenues include intersegment revenues, primarily consisting of asset-based management and administration fees, as follows: 

	Three Months Ended March 31,
	2019		2018
	(in millions)
PGIM segment intersegment revenues	$	180	$	184

Segments may also enter into internal derivative contracts with other segments. For adjusted operating income, each segment accounts for the internal derivative results consistent with the manner in which that segment accounts for other similar external derivatives.

Asset management and service fees

The table below presents asset management and service fees, predominantly related to investment management activities, for the periods indicated:

60

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

 

	Three Months Ended March 31,
	2019		2018
	(in millions)
Asset-based management fees	$	843	$	862
Performance-based incentive fees	35		5
Other fees	138		159
Total asset management and service fees	$	1,016	$	1,026

15. COMMITMENTS AND CONTINGENT LIABILITIES

Commitments and Guarantees

Commercial Mortgage Loan Commitments

 

	March 31, 2019		December 31, 2018
	(in millions)
Total outstanding mortgage loan commitments	$	1,878	$	3,299
Portion of commitment where prearrangement to sell to investor exists	$	822	$	1,490

In connection with the Company’s commercial mortgage operations, it originates commercial mortgage loans. Commitments for loans that will be held for sale are recognized as derivatives and recorded at fair value. In certain of these transactions, the Company pre-arranges that it will sell the loan to an investor, including to government sponsored entities as discussed below, after the Company funds the loan.

Commitments to Purchase Investments (excluding Commercial Mortgage Loans)

	March 31, 2019		December 31, 2018
	(in millions)
Expected to be funded from the general account and other operations outside the separate accounts	$	6,456	$	6,941
Expected to be funded from separate accounts	$	59	$	147

The Company has other commitments to purchase or fund investments, some of which are contingent upon events or circumstances not under the Company’s control, including those at the discretion of the Company’s counterparties. The Company anticipates a portion of these commitments will ultimately be funded from its separate accounts.

 Indemnification of Securities Lending and Securities Repurchase Transactions

	March 31, 2019		December 31, 2018
	(in millions)
Indemnification provided to certain clients for securities lending and securities repurchase transactions(1)	$	6,001	$	5,399
Fair value of related collateral associated with above indemnifications(1)	$	6,133	$	5,503
Accrued liability associated with guarantee	$	0	$	0

__________ 

(1) As of March 31, 2019, indemnification provided to certain clients and fair value of related collateral associated with such indemnification include $89 million and $87 million, respectively, related to securities repurchase transactions.

61

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

In the normal course of business, the Company may facilitate securities lending or securities repurchase transactions on behalf of certain client accounts (collectively, “the accounts”). In certain of these arrangements, the Company has provided an indemnification to the accounts to hold them harmless against losses caused by counterparty (i.e., borrower) defaults associated with such transactions facilitated by the Company. In securities lending transactions, collateral is provided by the counterparty to the accounts at the inception of the transaction in an amount at least equal to 102% of the fair value of the loaned securities and the collateral is maintained daily to equal at least 102% of the fair value of the loaned securities. In securities repurchase transactions, collateral is provided by the counterparty to the accounts at the inception of the transaction in an amount at least equal to 95% of the fair value of the securities subject to repurchase and the collateral is maintained daily to equal at least 95% of the fair value of the securities subject to repurchase. The Company is only at risk if the counterparty to the transaction defaults and the value of the collateral held is less than the value of the securities loaned to, or subject to repurchase from, such counterparty. The Company believes the possibility of any payments under these indemnities is remote.

Credit Derivatives Written

As discussed further in Note 5, the Company writes credit derivatives under which the Company is obligated to pay the counterparty the referenced amount of the contract and receive in return the defaulted security or similar security.

Guarantees of Asset Values

	March 31, 2019		December 31, 2018
	(in millions)
Guaranteed value of third-parties’ assets	$	80,168	$	79,215
Fair value of collateral supporting these assets	$	79,771	$	77,897
Asset (liability) associated with guarantee, carried at fair value	$	1	$	2

Certain contracts underwritten by the Retirement segment include guarantees related to financial assets owned by the guaranteed party. These contracts are accounted for as derivatives and carried at fair value. The collateral supporting these guarantees is not reflected on the Unaudited Interim Consolidated Statements of Financial Position.

Indemnification of Serviced Mortgage Loans

	March 31, 2019		December 31, 2018
	(in millions)
Maximum exposure under indemnification agreements for mortgage loans serviced by the Company	$	1,874	$	1,828
First-loss exposure portion of above	$	554	$	543
Accrued liability associated with guarantees	$	18	$	17

As part of the commercial mortgage activities of the Company’s PGIM segment, the Company provides commercial mortgage origination, underwriting and servicing for certain government sponsored entities, such as Fannie Mae and Freddie Mac. The Company has agreed to indemnify the government sponsored entities for a portion of the credit risk associated with certain of the mortgages it services through a delegated authority arrangement. Under these arrangements, the Company originates multi-family mortgages for sale to the government sponsored entities based on underwriting standards they specify, and makes payments to them for a specified percentage share of losses they incur on certain loans serviced by the Company. The Company’s percentage share of losses incurred generally varies from 2% to 20% of the loan balance, and is typically based on a first-loss exposure for a stated percentage of the loan balance, plus a shared exposure with the government sponsored entity for any losses in excess of the stated first-loss percentage, subject to a contractually specified maximum percentage. The Company determines the liability related to this exposure using historical loss experience, and the size and remaining life of the asset. The Company serviced $14,790 million and $14,335 million of mortgages subject to these loss-sharing arrangements as of March 31, 2019 and December 31, 2018, respectively, all of which are collateralized by first priority liens on the underlying multi-family residential properties. As of March 31, 2019, these mortgages had a weighted-average debt service coverage ratio of 1.87 times and a weighted-average loan-to-value ratio of 61%. As of December 31, 2018, these mortgages had a weighted average debt service coverage ratio of 1.83 times and a weighted-average loan-to-value ratio of 62%. The Company had no losses related to indemnifications that were settled for the three months ended March 31, 2019 and 2018, respectively.

62

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Other Guarantees

	March 31, 2019		December 31, 2018
	(in millions)
Other guarantees where amount can be determined	$	68	$	77
Accrued liability for other guarantees and indemnifications	$	0	$	0

The Company is also subject to other financial guarantees and indemnity arrangements. The Company has provided indemnities and guarantees related to acquisitions, dispositions, investments and other transactions that are triggered by, among other things, breaches of representations, warranties or covenants provided by the Company. These obligations are typically subject to various time limitations, defined by the contract or by operation of law, such as statutes of limitation. In some cases, the maximum potential obligation is subject to contractual limitations, while in other cases such limitations are not specified or applicable. Included above is $13 million for both March 31, 2019 and December 31, 2018 of yield maintenance guarantees related to certain investments the Company sold. The Company does not expect to make any payments on these guarantees and is not carrying any liabilities associated with these guarantees.

Since certain of these obligations are not subject to limitations, it is not possible to determine the maximum potential amount due under these guarantees. The accrued liabilities identified above do not include retained liabilities associated with sold businesses.

Contingent Liabilities

On an ongoing basis, the Company and its regulators review its operations including, but not limited to, sales and other customer interface procedures and practices, and procedures for meeting obligations to our customers and other parties. These reviews may result in the modification or enhancement of processes or the imposition of other action plans, including concerning management oversight, sales and other customer interface procedures and practices, and the timing or computation of payments to customers and other parties. In certain cases, if appropriate, the Company may offer customers or other parties remediation and may incur charges, including the cost of such remediation, administrative costs and regulatory fines.

The Company is subject to the laws and regulations of states and other jurisdictions concerning the identification, reporting and escheatment of unclaimed or abandoned funds, and is subject to audit and examination for compliance with these requirements. For additional discussion of these matters, see “—Litigation and Regulatory Matters” below.

It is possible that the results of operations or the cash flow of the Company in a particular quarterly or annual period could be materially affected as a result of payments in connection with the matters discussed above or other matters depending, in part, upon the results of operations or cash flow for such period. Management believes, however, that ultimate payments in connection with these matters, after consideration of applicable reserves and rights to indemnification, should not have a material adverse effect on the Company’s financial position.

Litigation and Regulatory Matters

The Company is subject to legal and regulatory actions in the ordinary course of its businesses. Pending legal and regulatory actions include proceedings relating to aspects of the Company’s businesses and operations that are specific to it and proceedings that are typical of the businesses in which it operates, including in both cases businesses that have been either divested or placed in wind down status. Some of these proceedings have been brought on behalf of various alleged classes of complainants. In certain of these matters, the plaintiffs are seeking large and/or indeterminate amounts, including punitive or exemplary damages. The outcome of litigation or a regulatory matter, and the amount or range of potential loss at any particular time, is often inherently uncertain.

The Company establishes accruals for litigation and regulatory matters when it is probable that a loss has been incurred and the amount of that loss can be reasonably estimated. For litigation and regulatory matters where a loss may be reasonably possible, but not probable, or is probable but not reasonably estimable, no accrual is established but the matter, if potentially material, is disclosed, including matters discussed below. The Company estimates that as of March 31, 2019, the aggregate range of reasonably possible losses in excess of accruals established for those litigation and regulatory matters for which such an estimate currently can be made is less than $250 million. Any estimate is not an indication of expected loss, if any, or the Company’s maximum possible loss exposure on such matters. The Company reviews relevant information with respect to its litigation and regulatory matters on a quarterly and annual basis and updates its accruals, disclosures and estimates of reasonably possible loss based on such reviews.

63

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

The following discussion of litigation and regulatory matters provides an update of those matters discussed in Note 22 to the Company’s Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, and should be read in conjunction with the complete descriptions provided in the Form 10-K.

Individual Annuities, Individual Life and Group Insurance

Huffman v. The Prudential Insurance Company of America

In April 2019, the court entered a Final Judgment and Order of Dismissal. This matter is now closed.

Escheatment Litigation

Total Asset Recovery Services, LLC v. MetLife, Inc., et al., Prudential Financial, Inc., The Prudential Insurance Company of America, and Prudential Insurance Agency, LLC

In April 2019, defendants’ motion to dismiss the Second Amended Complaint was granted and plaintiff subsequently filed a Notice of Appeal with the New York State Supreme Court, First Department.

Residential Mortgage-Backed Securities (“RMBS”) Trustee Litigation

PICA et al. v. U.S. Bank N.A.

In April 2019, a decision and order was issued dismissing plaintiffs’ state court action with prejudice.

Regulatory Matters

Securities Lending and Foreign Tax Reclaim Matter

In 2016, the Company self-reported to the SEC and the U.S. Department of Labor (“DOL”), and notified other regulators, that in some cases it failed to maximize securities lending income for the benefit of certain separate account investments due to a long-standing restriction benefiting the Company that limited the availability of loanable securities. The Company has removed the restriction and implemented a remediation plan for the benefit of customers. As part of the Company’s review of this matter, in 2018 it further self-reported to the SEC, and notified other regulators, that in some cases it failed to timely process foreign tax reclaims for the separate account investments. The Company has corrected the foreign tax reclaim process and has implemented a remediation plan for the benefit of customers.

The DOL’s review of the securities lending matter is closed. The Company is cooperating with the SEC in its review of the securities lending and foreign tax reclaim matters (which includes a review of the remediation plans) and has entered into discussions with the SEC staff regarding a possible settlement of both matters that would potentially involve charges under the Investment Advisers Act and financial remedies. We cannot predict the outcome of the discussions with the SEC regarding these matters.

Summary

The Company’s litigation and regulatory matters are subject to many uncertainties, and given their complexity and scope, their outcome cannot be predicted. It is possible that the Company’s results of operations or cash flow in a particular quarterly or annual period could be materially affected by an ultimate unfavorable resolution of pending litigation and regulatory matters depending, in part, upon the results of operations or cash flow for such period. In light of the unpredictability of the Company’s litigation and regulatory matters, it is also possible that in certain cases an ultimate unfavorable resolution of one or more pending litigation or regulatory matters could have a material adverse effect on the Company’s financial position. Management believes, however, that, based on information currently known to it, the ultimate outcome of all pending litigation and regulatory matters, after consideration of applicable reserves and rights to indemnification, is not likely to have a material adverse effect on the Company’s financial position.

64

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

TABLE OF CONTENTS

	Page
Overview	66
Regulatory Developments	66
Impact of a Low Interest Rate Environment	66
Results of Operations	70
Consolidated Results of Operations	70
Segment Results of Operations	70
Segment Measures	72
Impact of Foreign Currency Exchange Rates	73
Accounting Policies & Pronouncements	75
Results of Operations by Segment	76
PGIM	76
Retirement	81
Group Insurance	82
Individual Annuities	84
Individual Life	88
International Insurance	90
Corporate and Other	93
Divested and Run-off Businesses	93
Closed Block Division	94
Income Taxes	95
Experience-Rated Contractholder Liabilities, Assets Supporting Experience-Rated Contractholder Liabilities and Other Related Investments	95
Valuation of Assets and Liabilities	96
General Account Investments	99
Liquidity and Capital Resources	114
Ratings	124
Off-Balance Sheet Arrangements	124

Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) addresses the consolidated financial condition of Prudential Financial, Inc. (“Prudential,” “Prudential Financial,” “PFI,” or “the Company”) as of March 31, 2019, compared with December 31, 2018, and its consolidated results of operations for the three months ended March 31, 2019 and 2018. You should read the following analysis of our consolidated financial condition and results of operations in conjunction with the MD&A, the “Risk Factors” section, and the audited Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, as well as the statements under “Forward-Looking Statements” and the Unaudited Interim Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q.

65

Overview

Prudential Financial, a financial services leader with approximately $1.456 trillion of assets under management as of March 31, 2019, has operations primarily in the United States of America (“U.S”), Asia, Europe and Latin America. Through our subsidiaries and affiliates, we offer a wide array of financial products and services, including life insurance, annuities, retirement-related services, mutual funds and investment management. We offer these products and services to individual and institutional customers through one of the largest distribution networks in the financial services industry.

Our principal operations are comprised of five divisions, which together encompass seven segments, and our Corporate and Other operations. The PGIM division is comprised of the PGIM segment, our global investment management businesses. The U.S. Workplace Solutions division consists of our Retirement and Group Insurance segments. The U.S. Individual Solutions division consists of our Individual Annuities and Individual Life segments. The International Insurance division consists of our International Insurance segment. The Closed Block division consists of our Closed Block segment. The Closed Block division is accounted for as a divested business that is reported separately from the Divested and Run-off Businesses that are included in Corporate and Other operations. Divested and Run-off Businesses are comprised of businesses that have been, or will be, sold or exited, including businesses that have been placed in wind down status that do not qualify for “discontinued operations” accounting treatment under generally accepted accounting principles in the United States of America (“U.S. GAAP”). Our Corporate and Other operations include corporate items and initiatives that are not allocated to business segments and businesses that have been or will be divested or placed in run-off, excluding the Closed Block division.

Our strategy centers on our mix of high-quality protection, retirement and investment management businesses which creates growth potential due to earnings diversification and the opportunity to provide customers with integrated cross-business solutions, as well as capital benefits from a balanced risk profile. We are well positioned to meet the needs of customers and tap into significant market opportunities through our U.S. Financial Wellness businesses (represented by our U.S. Workplace Solutions and U.S. Individual Solutions Divisions), PGIM (our investment management business) and our International Insurance business.

We attribute financing costs to each segment based on the amount of financing used by each segment, excluding financing costs associated with corporate debt which are reflected in Corporate and Other operations. The net investment income of each segment includes earnings on the amount of capital that management believes is necessary to support the risks of that segment.

Regulatory Developments

Japan Corporate Product Tax Rules

During the first quarter of 2019, the Japan National Tax Authority announced plans to limit policyholders’ tax deductions for premiums paid on certain corporate insurance products. Following the announcement, the Company and other life insurers in Japan suspended sales of these products pending further development of the rulemaking process, which is expected to be completed later in 2019. Continued uncertainty around the tax deduction and any final rules that limit policyholders’ tax deductions may adversely impact sales in our Life Planner and Gibraltar Life and Other operations.

For additional information on the potential impacts of regulation on the Company, see “Business—Regulation” and “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2018.

Impact of a Low Interest Rate Environment

As a global financial services company, market interest rates are a key driver of our results of operations and financial condition. Changes in interest rates can affect our results of operations and/or our financial condition in several ways, including favorable or adverse impacts to:

• investment-related activity, including: investment income returns, net interest margins, net investment spread results, new money rates, mortgage loan prepayments and bond redemptions;

• insurance reserve levels, market experience true-ups and amortization of both deferred policy acquisition costs (“DAC”) and value of business acquired (“VOBA”);

• customer account values, including their impact on fee income;

• fair value of, and possible impairments on, intangible assets such as goodwill;

• product offerings, design features, crediting rates and sales mix; and

• policyholder behavior, including surrender or withdrawal activity.

For more information on interest rate risks, see “Risk Factors—Market Risk” included in our Annual Report on Form 10-K for the year ended December 31, 2018.

66

See below for discussions related to the current interest rate environments in our two largest markets, the U.S. and Japan; the composition of our insurance liabilities and policyholder account balances; and the hypothetical impacts to our results if these interest rate environments are sustained.

U.S. Operations excluding the Closed Block Division

Interest rates in the U.S. have experienced a period of historically low levels in large part due to Federal Reserve efforts to assist with the economic recovery subsequent to the financial crisis of 2008. While market conditions and events make uncertain the timing, amount and impact of any monetary policy decisions by the Federal Reserve, a trend of rising interest rates may enhance our reinvestment yields, primarily for our investments in fixed maturity securities and commercial mortgage loans. As interest rates rise, our reinvestment yield may approach or exceed the overall portfolio yield. Conversely, if interest rates were to decline, our reinvestment yield may fall below our overall portfolio yield, resulting in an unfavorable impact to earnings.

For the general account supporting our U.S. Individual Solutions division, U.S. Workplace Solutions division, PGIM division and our Corporate and Other operations, we estimate annual principal payments and prepayments that we would be required to reinvest to be approximately 6.2% of the fixed maturity security and commercial mortgage loan portfolios through 2020. The portion of the general account attributable to these operations has approximately $206 billion of such assets (based on net carrying value) as of March 31, 2019. The average portfolio yield for fixed maturity securities and commercial mortgage loans is approximately 4.3% as of March 31, 2019.

Included in the $206 billion of fixed maturity securities and commercial mortgage loans are approximately $129 billion that are subject to call or redemption features at the issuer’s option and have a weighted average interest rate of approximately 4%. Of this $129 billion, approximately 59% contain provisions for prepayment premiums. If we reinvest scheduled payments or prepayments (not subject to a prepayment fee) at rates below the current portfolio yield, including in some cases at rates below those guaranteed under our insurance contracts, future operating results will be impacted to the extent we do not, or are unable to, reduce crediting rates on in force blocks of business, or effectively utilize other asset/liability management strategies described below, in order to maintain current net interest margins.

The following table sets forth the insurance liabilities and policyholder account balances of our U.S. Operations excluding the Closed Block Division, by type, for the date indicated:

	As of March 31, 2019
	(in billions)
Long-duration insurance products with fixed and guaranteed terms	$	125
Contracts with adjustable crediting rates subject to guaranteed minimums	57
Participating contracts where investment income risk ultimately accrues to contractholders	16
Total	$	198

The $125 billion above relates to long-duration products such as group annuities, structured settlements and other insurance products that have fixed and guaranteed terms, for which underlying assets may have to be reinvested at interest rates that are lower than portfolio rates. We seek to mitigate the impact of a prolonged low interest rate environment on these contracts through asset/liability management, as discussed further below.

The $57 billion above relates to contracts with crediting rates that may be adjusted over the life of the contract, subject to guaranteed minimums. Although we may have the ability to lower crediting rates for those contracts above guaranteed minimums, our willingness to do so may be limited by competitive pressures. The following table sets forth the related account values by range of guaranteed minimum crediting rates and the related range of the difference, in basis points (“bps”), between rates being credited to contractholders as of March 31, 2019, and the respective guaranteed minimums. 

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	Account Values with Adjustable Crediting Rates Subject to Guaranteed Minimums:
	At guaranteed minimum			1-49 bps above guaranteed minimum			50-99 bps above guaranteed minimum			100-150 bps above guaranteed minimum			Greater than 150 bps above guaranteed minimum			Total
	($ in billions)
Range of Guaranteed Minimum Crediting Rates:
Less than 1.00%	$	0.5		$	1.3		$	0.4		$	0.1		$	0.0		$	2.3
1.00% - 1.99%	1.0			3.8			11.7			1.7			0.7			18.9
2.00% - 2.99%	1.3			0.7			2.0			1.1			0.8			5.9
3.00% - 4.00%	26.6			2.1			0.1			0.2			0.0			29.0
Greater than 4.00%	0.9			0.0			0.0			0.0			0.0			0.9
Total(1)	$	30.3		$	7.9		$	14.2		$	3.1		$	1.5		$	57.0
Percentage of total	53		%	14		%	25		%	5		%	3		%	100		%

 __________

(1) Includes approximately $0.77 billion related to contracts that impose a market value adjustment if the invested amount is not held to maturity.

The remaining $16 billion of insurance liabilities and policyholder account balances in these operations relates to participating contracts for which the investment income risk is expected to ultimately accrue to contractholders. The crediting rates for these contracts are periodically adjusted based on the return earned on the related assets.

Assuming a hypothetical scenario where the average 10-year U.S. Treasury rate is 2.50%, which is reasonably consistent with the current rate, for the period from April 1, 2019 through December 31, 2020, and credit spreads remain unchanged from levels as of March 31, 2019, we estimate that the impact to pre-tax adjusted operating income of reinvesting in such an environment, compared to reinvesting at current average portfolio yields, would not be significant.

In order to mitigate the unfavorable impact that a low interest rate environment has on our net interest margins, we employ a proactive asset/liability management program, which includes strategic asset allocation and hedging strategies within a disciplined risk management framework. These strategies seek to match the characteristics of our products, and to closely approximate the interest rate sensitivity of the assets with the estimated interest rate sensitivity of the product liabilities. Our asset/liability management program also helps manage duration gaps, currency and other risks between assets and liabilities through the use of derivatives. We adjust this dynamic process as products change, as customer behavior changes and as changes in the market environment occur. As a result, our asset/liability management process has permitted us to manage the interest rate risk associated with our products through several market cycles. Our interest rate exposure is also mitigated by our business mix, which includes lines of business for which fee-based and insurance underwriting earnings play a more prominent role in product profitability.

Closed Block Division

Substantially all of the $59 billion of general account assets in the Closed Block division support obligations and liabilities relating to the Closed Block policies only. See Note 8 to the Unaudited Interim Consolidated Financial Statements for further information on the Closed Block.

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International Insurance Operations

While our international insurance operations have experienced a low interest rate environment for many years, the current reinvestment yields for certain blocks of business in our international insurance operations are generally lower than the current portfolio yield supporting these blocks of business. In recent years, the Bank of Japan’s monetary policy has resulted in even lower and, at times, negative yields for certain tenors of government bonds. Our international insurance operations employ a proactive asset/liability management program in order to mitigate, to the extent possible, the unfavorable impact that the current interest rate environment has on our net interest margins. In conjunction with this program, we have not purchased negative yielding assets to support the portfolio and we continue to purchase long-term bonds with tenors of 30 years or greater. Additionally, our diverse product portfolio in terms of currency mix and premium payment structure allows us to further mitigate the negative impact from this low interest rate environment. We regularly examine our product offerings and their profitability. As a result, we have repriced certain products, adjusted commissions for certain products and have discontinued sales of other products that do not meet our profit expectations. The impact of these actions, coupled with the strengthening of the yen against the U.S. dollar and introduction of certain new products, has resulted in an increase in sales of U.S. dollar-denominated products relative to products denominated in other currencies. For additional information on sales within our international insurance operations, see “—International Insurance Division—International Insurance—Sales Results,” below.

The following table sets forth the insurance liabilities and policyholder account balances of our Japanese operations, by type, for the date indicated:

	As of March 31, 2019
	(in billions)
Long-duration insurance products with fixed and guaranteed terms	$	121
Contracts with a market value adjustment if invested amount is not held to maturity	26
Contracts with adjustable crediting rates subject to guaranteed minimums	10
Total	$	157

The $121 billion above is predominantly comprised of long-duration insurance products that have fixed and guaranteed terms, for which underlying assets may have to be reinvested at interest rates that are lower than current portfolio yields. The remaining insurance liabilities and policyholder account balances include $26 billion related to contracts that impose a market value adjustment if the invested amount is not held to maturity and $10 billion related to contracts with crediting rates that may be adjusted over the life of the contract, subject to guaranteed minimums. Most of the current crediting rates on these contracts, however, are at or near contractual minimums. Although we have the ability in some cases to lower crediting rates for those contracts that are above guaranteed minimum crediting rates, the majority of this business has interest crediting rates that are determined by formula.

Assuming a hypothetical scenario within our Japanese operations where new money yields would be 25 bps lower than projected, and applying these lower new money yields to annualized investment of renewal premiums, proceeds from investment disposition and reinvestment of investment income, we estimate that the unfavorable impact would reduce adjusted operating income in 2019 by approximately $15 million. This hypothetical scenario excludes first-year premium, single pay premium, multi-currency fixed annuity cash flows, any potential benefit from repricing products and any impact from other factors, including but not limited to new business, contractholder behavior, changes in competitive conditions, changes in capital markets and the effect of derivative instruments.

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Results of Operations

Consolidated Results of Operations

The following table summarizes net income (loss) for the periods presented.

	Three Months Ended March 31,
	2019		2018
	(in millions)
Revenues	$	15,091	$	13,757
Benefits and expenses	13,951		12,064
Income (loss) before income taxes and equity in earnings of operating joint ventures	1,140		1,693
Income tax expense (benefit)	232		352
Income (loss) before equity in earnings of operating joint ventures	908		1,341
Equity in earnings of operating joint ventures, net of taxes	29		23
Net income (loss)	937		1,364
Less: Income attributable to noncontrolling interests	5		1
Net income (loss) attributable to Prudential Financial, Inc.	$	932	$	1,363

The $431 million decrease in “Net income (loss) attributable to Prudential Financial, Inc.” for the first quarter of 2019 compared to the first quarter of 2018 reflected the following notable items:

• $935 million unfavorable variance, on a pre-tax basis, reflecting the net impact from changes in the value of our embedded derivatives and related hedge positions associated with certain variable annuities (see “—Results of Operations by Segment—U.S. Individual Solutions Division—Individual Annuities—Variable Annuity Risks and Risk Mitigants” for additional information); and

• $47 million unfavorable variance from net pre-tax realized investment gains and losses for PFI excluding the Closed Block division, and excluding the impact of the hedging program associated with certain variable annuities discussed above (see “—General Account Investments” for additional information).

Partially offsetting these decreases in “Net income (loss) attributable to Prudential Financial, Inc.” were the following items:

• $315 million favorable variance, primarily from lower income tax expense due to lower net income compared to the prior year period; and

• $236 million favorable variance, on a pre-tax basis, from income in the current period from our Divested and Run-off Businesses compared to a loss in the prior period.

Segment Results of Operations

We analyze the performance of our segments and Corporate and Other operations using a measure of segment profitability called adjusted operating income. See “—Segment Measures” for a discussion of adjusted operating income and its use as a measure of segment operating performance.

Summary of Results of Operations by Segment

Shown below are the adjusted operating income contributions of each segment and Corporate and Other operations for the periods indicated and a reconciliation of this segment measure of performance to “Income (loss) before income taxes and equity in earnings of operating joint ventures” as presented in our Unaudited Interim Consolidated Statements of Operations.

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	Three Months Ended March 31,
	2019			2018
	(in millions)
Adjusted operating income before income taxes by segment:
PGIM	$	214		$	232
Total PGIM division	214			232
Retirement	251			317
Group Insurance	53			55
Total U.S. Workplace Solutions division	304			372
Individual Annuities	472			519
Individual Life	105			36
Total U.S. Individual Solutions division	577			555
International Insurance	922			856
Total International Insurance division	922			856
Corporate and Other operations	(412		)	(294		)
Total Corporate and Other	(412		)	(294		)
Total segment adjusted operating income before income taxes	1,605			1,721
Reconciling items:
Realized investment gains (losses), net, and related adjustments(1)	(663		)	87
Charges related to realized investment gains (losses), net(2)	25			(23		)
Investment gains (losses) on assets supporting experience-rated contractholder liabilities, net(3)	454			(403		)
Change in experience-rated contractholder liabilities due to asset value changes(4)	(403		)	418
Divested and Run-off Businesses(5):
Closed Block division	(19		)	(9		)
Other Divested and Run-off Businesses	174			(72		)
Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests(6)	(33		)	(26		)
Consolidated income (loss) before income taxes and equity in earnings of operating joint ventures	$	1,140		$	1,693

__________

(1) Represents “Realized investment gains (losses), net,” and related adjustments. See “—General Account Investments” and Note 14 to our Unaudited Interim Consolidated Financial Statements for additional information.

(2) Includes charges that represent the impact of realized investment gains (losses), net, on the amortization of DAC and other costs, and on changes in reserves. Also includes charges resulting from payments related to market value adjustment features of certain of our annuity products and the impact of realized investment gains (losses), net, on the amortization of unearned revenue reserves.

(3) Represents net investment gains (losses) on assets supporting experience-rated contractholder liabilities. See “—Experience-Rated Contractholder Liabilities, Assets Supporting Experience-Rated Contractholder Liabilities and Other Related Investments.”

(4) Represents changes in contractholder liabilities due to asset value changes in the pool of investments supporting these experience-rated contracts. See “—Experience-Rated Contractholder Liabilities, Assets Supporting Experience-Rated Contractholder Liabilities and Other Related Investments.”

(5) Represents the contribution to income (loss) of Divested and Run-off Businesses that have been or will be sold or exited, including businesses that have been placed in wind down, but that did not qualify for “discontinued operations” accounting treatment under U.S. GAAP. See “—Divested and Run-off Businesses.”

(6) Equity in earnings of operating joint ventures are included in adjusted operating income but excluded from “Income (loss) before income taxes and equity in earnings of operating joint ventures” as they are reflected on an after-tax U.S. GAAP basis as a separate line in our Unaudited Interim Consolidated Statements of Operations. Earnings attributable to noncontrolling interests are excluded from adjusted operating income but included in “Income (loss) before income taxes and equity in earnings of operating joint ventures” as they are reflected on a U.S. GAAP basis as a separate line in our Unaudited Interim Consolidated Statements of Operations. Earnings attributable to noncontrolling interests represent the portion of earnings from consolidated entities that relates to the equity interests of minority investors.

Results for the periods presented above reflect the following:

PGIM. Segment results for the first quarter of 2019 decreased in comparison to the prior year period, reflecting higher expenses, partially offset by an increase in asset management fees.

Retirement. Segment results for the first quarter of 2019 decreased in comparison to the prior year period, primarily reflecting lower net investment spread results and higher general and administrative expenses, partially offset by more favorable reserve experience.

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Group Insurance. Segment results for the first quarter of 2019 decreased modestly in comparison to the prior year period, reflecting less favorable underwriting results in our group life business, partially offset by more favorable underwriting results in our group disability business.

Individual Annuities. Segment results for the first quarter of 2019 decreased in comparison to the prior year period, primarily reflecting lower net asset-based fee income and higher expenses. These decreases were partially offset by an increase in net investment income, and lower amortization costs and reserve provisions.

Individual Life. Segment results for the first quarter of 2019 increased in comparison to the prior year period, primarily reflecting a favorable comparative net impact from changes in the estimated profitability of the business and higher underwriting results.

International Insurance. Segment results for the first quarter of 2019 increased in comparison to the prior year period, inclusive of favorable net impacts from foreign currency exchange rates. Excluding the impact of currency fluctuations, the increase in segment results primarily reflects business growth and higher underwriting results, partially offset by higher general and administrative expenses.

Corporate and Other operations. The results for the first quarter of 2019 reflected increased losses in comparison to the prior year period, driven by higher levels of corporate expenses, higher capital debt interest expense and lower income from our qualified pension plan, partially offset by higher net investment income.

Closed Block Division. The Closed Block division results for the first quarter of 2019 decreased in comparison to the prior year period, primarily reflecting an increase in the policyholder dividend obligation as a result of higher net realized investment gains and related activity, partially offset by lower net investment income and lower premiums.

Segment Measures

Adjusted Operating Income. In managing our business, we analyze our segments’ operating performance using “adjusted operating income.” Adjusted operating income does not equate to “Income (loss) before income taxes and equity in earnings of operating joint ventures” or “Net income (loss)” as determined in accordance with U.S. GAAP, but is the measure of segment profit or loss we use to evaluate segment performance and allocate resources, and consistent with authoritative guidance, is our measure of segment performance. The adjustments to derive adjusted operating income are important to an understanding of our overall results of operations. Adjusted operating income is not a substitute for income determined in accordance with U.S. GAAP, and our definition of adjusted operating income may differ from that used by other companies. However, we believe that the presentation of adjusted operating income as we measure it for management purposes enhances the understanding of our results of operations by highlighting the results from ongoing operations and the underlying profitability of our businesses.

See Note 14 to the Unaudited Interim Consolidated Financial Statements for further information on the presentation of segment results and our definition of adjusted operating income.

Annualized New Business Premiums. In managing our Individual Life, Group Insurance and International Insurance businesses, we analyze annualized new business premiums, which do not correspond to revenues under U.S. GAAP. Annualized new business premiums measure the current sales performance of the business, while revenues primarily reflect the renewal persistency of policies written in prior years and net investment income, in addition to current sales. Annualized new business premiums include 10% of first year premiums or deposits from single pay products. No other adjustments are made for limited pay contracts.

The amount of annualized new business premiums for any given period can be significantly impacted by several factors, including but not limited to: addition of new products, discontinuation of existing products, changes in credited interest rates for certain products and other product modifications, changes in premium rates, changes in tax laws, changes in regulations or changes in the competitive environment. Sales volume may increase or decrease prior to certain of these changes becoming effective, and then fluctuate in the other direction following such changes.

Assets Under Management. In managing our PGIM business, we analyze assets under management (which do not correspond directly to U.S. GAAP assets) because the principal source of revenues is fees based on assets under management. Assets under management represents the fair market value or account value of assets which we manage directly for institutional clients, retail clients, and for our general account, as well as assets invested in our products that are managed by third-party managers.

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Account Values. In managing our Individual Annuities and Retirement businesses, we analyze account values, which do not correspond to U.S. GAAP assets. Net sales (redemptions) in our Individual Annuities business and net additions (withdrawals) in our Retirement business do not correspond to revenues under U.S. GAAP, but are used as a relevant measure of business activity.

Impact of Foreign Currency Exchange Rates

Foreign currency exchange rate movements and related hedging strategies

As a U.S.-based company with significant business operations outside the U.S., particularly in Japan, we are subject to foreign currency exchange rate movements that could impact our U.S. dollar (“USD”)-equivalent earnings and shareholder return on equity. Our USD-equivalent earnings could be materially affected by currency fluctuations from period to period, even if earnings on a local currency basis are relatively constant. Our USD-equivalent equity is impacted as the value of our investment in international operations may also fluctuate based on changes in foreign currency exchange rates. We seek to mitigate these impacts through various hedging strategies, including the use of derivative contracts and by holding USD-denominated assets in certain of our foreign subsidiaries.

In order to reduce earnings volatility from foreign currency exchange rate movements, we enter into forward currency derivative contracts to effectively fix the currency exchange rates for a portion of our prospective non-USD-denominated earnings streams. This forward currency hedging program is primarily associated with our insurance operations in Japan and Korea.

In order to reduce equity volatility from foreign currency exchange rate movements, we primarily utilize a yen hedging strategy that calibrates the hedge level to preserve the relative contribution of our yen-based business to the Company’s overall return on equity on a leverage neutral basis. We implement this hedging strategy utilizing a variety of instruments, including USD-denominated assets, foreign currency derivative contracts, and dual currency and synthetic dual currency investments held locally in our Japanese insurance subsidiaries. The total hedge level may vary based on our periodic assessment of the relative contribution of our yen-based business to the Company’s overall return on equity.

The table below presents the aggregate amount of instruments that serve to hedge the impact of foreign currency exchange movements on our USD-equivalent shareholder return on equity from our Japanese insurance subsidiaries as of the dates indicated.

	March 31, 2019		December 31, 2018
	(in billions)
Foreign currency hedging instruments:
Hedging USD-equivalent earnings:
Forward currency contracts (notional amount outstanding)	$	1.2	$	1.3
Hedging USD-equivalent equity:
USD-denominated assets held in yen-based entities(1)	12.9		13.5
Dual currency and synthetic dual currency investments(2)	0.6		0.6
Total USD-equivalent equity foreign currency hedging instruments	13.5		14.1
Total foreign currency hedges	$	14.7	$	15.4

__________

(1) Includes USD-denominated fixed maturities at amortized cost plus any related accrued investment income, as well as USD notional amount of foreign currency derivative contracts outstanding. Note this amount represents only those USD assets serving to hedge the impact of foreign currency volatility on equity. Separate from this program, our Japanese operations also have $50.2 billion and $48.9 billion as of March 31, 2019 and December 31, 2018, respectively, of USD-denominated assets supporting USD-denominated liabilities related to USD-denominated products.

(2) Dual currency and synthetic dual currency investments are held by our yen-based entities in the form of fixed maturities and loans with a yen-denominated principal component and USD-denominated interest income. The amounts shown represent the present value of future USD-denominated cash flows.

The USD-denominated investments that hedge the impact of foreign currency exchange rate movements on USD-equivalent earnings and shareholder return on equity from our Japanese insurance operations are reported within yen-based entities and, as a result, foreign currency exchange rate movements will impact their value reported within our yen-based Japanese insurance entities. We seek to mitigate the risk that future unfavorable foreign currency exchange rate movements will decrease the value of these USD-denominated investments reported within our yen-based Japanese insurance entities, and therefore negatively impact their equity and regulatory solvency margins, by having our Japanese insurance operations enter into currency hedging transactions. Those hedges are with a subsidiary of Prudential Financial. These hedging strategies have the economic effect of moving the change in value of these USD-denominated investments due to foreign currency exchange rate movements from our Japanese yen-based entities to our USD-based entities.

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These USD-denominated investments also pay a coupon which is generally higher than what a similar yen-denominated investment would pay. The incremental impact of this higher yield on our USD-denominated investments, as well as our dual currency and synthetic dual currency investments, will vary over time, and is dependent on the duration of the underlying investments as well as interest rate environments in both the U.S. and Japan at the time of the investments.

Impact of intercompany foreign currency exchange rate arrangements on segment results of operations

The financial results of our International Insurance and PGIM segments reflect the impact of intercompany arrangements with our Corporate and Other operations pursuant to which certain of these segments’ non-USD-denominated earnings are translated at fixed currency exchange rates. Results of our Corporate and Other operations include any differences between the translation adjustments recorded by the segments at the fixed currency exchange rate versus the actual average rate during the period. In addition, specific to our International Insurance segment where we hedge certain currencies, the results of our Corporate and Other operations also include the impact of any gains or losses recorded from the forward currency contracts that settled during the period, which include the impact of any over or under hedging of actual earnings that differ from projected earnings.

For International Insurance, the fixed currency exchange rates are generally determined in connection with a foreign currency income hedging program designed to mitigate the impact of exchange rate changes on the segment’s USD-equivalent earnings. Pursuant to this program, our Corporate and Other operations execute forward currency contracts with third-parties to sell the net exposure of projected earnings for certain currencies in exchange for USD at specified exchange rates. The maturities of these contracts correspond with the future periods (typically on a three-year rolling basis) in which the identified non-USD-denominated earnings are expected to be generated. In establishing the level of non-USD-denominated earnings that will be hedged through this program, we exclude the anticipated level of USD-denominated earnings that will be generated by USD-denominated products and investments. For the three months ended March 31, 2019, approximately 21% of the segment’s earnings were yen-based and, as of March 31, 2019, we have hedged 100% of expected yen-based earnings for 2019, and 87% and 45% of expected yen-based earnings for 2020 and 2021, respectively. To the extent currently unhedged, our International Insurance segment’s future expected USD-equivalent of yen-based earnings will be impacted by yen exchange rate movements.

As a result of these arrangements, our International Insurance segment’s results for 2019 and 2018 reflect the impact of translating yen-denominated earnings at fixed currency exchange rates of 105 and 111 yen per U.S. dollar, respectively, and Korean won-denominated earnings at fixed currency exchange rates of 1110 and 1150 Korean won per U.S. dollar, respectively. Since determination of the fixed currency exchange rates for a given year is impacted by changes in foreign currency exchange rates over time, the segment’s future earnings will ultimately be impacted by these changes in exchange rates.

As a result of these arrangements, for PGIM and certain other currencies within International Insurance, the fixed currency exchange rates for the current year are predetermined during the third quarter of the prior year using forward currency exchange rates.

The table below presents, for the periods indicated, the increase (decrease) to revenues and adjusted operating income for the International Insurance and PGIM segments and for Corporate and Other operations, reflecting the impact of these intercompany arrangements.

	Three Months Ended March 31,
	2019			2018
	(in millions)
Segment impacts of intercompany arrangements:
International Insurance	$	15		$	(15	)
PGIM	1			(1		)
Impact of intercompany arrangements(1)	16			(16		)
Corporate and Other operations:
Impact of intercompany arrangements(1)	(16		)	16
Settlement gains (losses) on forward currency contracts(2)	12			(23		)
Net benefit (detriment) to Corporate and Other operations	(4		)	(7		)
Net impact on consolidated revenues and adjusted operating income	$	12		$	(23	)

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__________ 

(1) Represents the difference between non-USD-denominated earnings translated on the basis of weighted average monthly currency exchange rates versus fixed currency exchange rates determined in connection with the foreign currency income hedging program.

(2) As of March 31, 2019 and 2018, the notional amounts of these forward currency contracts within our Corporate and Other operations were $2.5 billion and $2.8 billion, respectively, of which $1.2 billion and $1.5 billion, respectively, were related to our Japanese insurance operations.

Impact of products denominated in non-local currencies on U.S. GAAP earnings

While our international insurance operations offer products denominated in local currency, several also offer products denominated in non-local currencies, most notably our Japanese operations, which offer USD- and Australian dollar (“AUD”)-denominated products. The non-local currency-denominated insurance liabilities related to these products are supported by investments denominated in corresponding currencies, including a significant portion designated as available-for-sale. While the impact from foreign currency exchange rate movements on these non-local currency-denominated assets and liabilities is economically matched, differences in the accounting for changes in the value of these assets and liabilities due to changes in foreign currency exchange rate movements have historically resulted in volatility in U.S. GAAP earnings.

In the first quarter of 2015 we implemented a structure in Gibraltar Life’s operations that disaggregated the USD- and AUD-denominated businesses into separate divisions, each with its own functional currency that aligns with the underlying products and investments. The result of this alignment was to reduce differences in the accounting for changes in the value of these assets and liabilities that arise due to changes in foreign currency exchange rate movements. For the USD- and AUD-denominated assets that were transferred under this structure, the net cumulative unrealized investment gains associated with foreign exchange remeasurement that were recorded in “Accumulated other comprehensive income (loss)” (“AOCI”) totaled $3.0 billion and $3.2 billion as of March 31, 2019 and December 31, 2018, respectively, and will be recognized in earnings within “Realized investment gains (losses), net” over time as these assets mature or are sold. Absent the sale of any of these assets prior to their stated maturity, approximately 7% of the $3.0 billion balance as of March 31, 2019 will be recognized throughout the remainder of 2019, approximately 13% will be recognized in 2020, and a majority of the remaining balance will be recognized from 2021 through 2024.

Highly inflationary economy in Argentina

Our insurance operations in Argentina, Prudential of Argentina (“POA”), have historically utilized the Argentine peso as the functional currency given it is the currency of the primary economic environment in which the entity operates. During 2018, Argentina experienced a cumulative inflation rate that exceeded 100% over a 3-year period. As a result, Argentina’s economy was deemed to be highly inflationary resulting in reporting changes effective July 1, 2018. Under U.S. GAAP, the financial statements of a foreign entity in a highly inflationary economy are to be remeasured as if its functional currency (formerly the Argentine peso) is the reporting currency of its parent reporting entity (the USD) on a prospective basis. While this changed how the results of POA are remeasured and/or translated into USD, the impact to our financial statements was not material nor is it expected to be material in future periods given the relative size of our POA operations. It should also be noted that due to the macroeconomic environment in Argentina, POA’s sales are predominantly denominated in USD and therefore substantially all of POA’s balance sheet consists of USD-denominated product liabilities supported by USD-denominated assets. As a result, this accounting change serves to reduce the remeasurement impact reflected in net income given that the functional currency and currency in which the assets and liabilities are denominated will be more closely aligned.

Accounting Policies & Pronouncements

Application of Critical Accounting Estimates

The preparation of financial statements in conformity with U.S. GAAP requires the application of accounting policies that often involve a significant degree of judgment. Management reviews estimates and assumptions used in the preparation of financial statements on an ongoing basis. If management determines that modifications in assumptions and estimates are appropriate given current facts and circumstances, the Company’s results of operations and financial position as reported in the Unaudited Interim Consolidated Financial Statements could change significantly.

Management believes the accounting policies relating to the following areas are most dependent on the application of estimates and assumptions and require management’s most difficult, subjective, or complex judgments:

• DAC, deferred sales inducements (“DSI”) and VOBA;

• Policyholder liabilities;

• Goodwill;

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• Valuation of investments, including derivatives, and the recognition of other-than-temporary impairments (“OTTI”);

• Pension and other postretirement benefits;

• Taxes on income; and

• Reserves for contingencies, including reserves for losses in connection with unresolved legal matters.

Market Performance - Equity and Interest Rate Assumptions 

DAC, DSI and VOBA associated with the variable and universal life policies of our Individual Life and International Insurance segments and the variable and fixed annuity contracts of our Individual Annuities and International Insurance segments are generally amortized over the expected lives of these policies in proportion to total gross profits. Total gross profits include both actual gross profits and estimates of gross profits for future periods. The quarterly adjustments for market performance reflect the impact of changes to our estimate of total gross profits to reflect actual fund performance and market conditions. A significant portion of gross profits for our variable annuity contracts and, to a lesser degree, our variable life policies are dependent upon the total rate of return on assets held in separate account investment options. This rate of return influences the fees we earn, costs we incur associated with the guaranteed minimum death and guaranteed minimum income benefit features related to our variable annuity contracts, as well as other sources of profit. Returns that are higher than our expectations for a given period produce higher than expected account balances, which increase the future fees we expect to earn and decrease the future costs we expect to incur associated with the guaranteed minimum death and guaranteed minimum income benefit features related to our variable annuity contracts. The opposite occurs when returns are lower than our expectations. The changes in future expected gross profits are used to recognize a cumulative adjustment to all prior periods’ amortization.

Furthermore, the calculation of the estimated liability for future policy benefits related to certain insurance products includes an estimate of associated revenues and expenses that are dependent on both historical market performance as well as estimates of market performance in the future. Similar to DAC, DSI and VOBA described above, these liabilities are subject to quarterly adjustments for experience including market performance, in addition to annual adjustments resulting from our annual reviews of assumptions.

The weighted average rate of return assumptions used in developing estimated market returns consider many factors specific to each business, including asset durations, asset allocations and other factors. With regard to equity market assumptions, the near-term future rate of return assumption used in evaluating DAC, DSI and VOBA and liabilities for future policy benefits for certain of our products, primarily domestic variable annuity and variable life insurance products, is generally updated each quarter and is derived using a reversion to the mean approach, a common industry practice. Under this approach, we consider historical equity returns and adjust projected equity returns over an initial future period of five years (the “near-term”) so that equity returns converge to the long-term expected rate of return. If the near-term projected future rate of return is greater than our near-term maximum future rate of return of 15.0%, we use our maximum future rate of return. As of March 31, 2019, our variable annuities and variable life insurance businesses assume an 8.0% long-term equity expected rate of return and a 4.7% near-term mean reversion equity expected rate of return.

With regard to interest rate assumptions, we generally update the future interest rates used to project fixed income returns annually and in any quarter when interest rates vary significantly from these assumptions. As a result of our 2018 annual reviews and update of assumptions and other refinements, we kept our long-term expectation of the 10-year U.S. Treasury rate unchanged and continue to grade to 3.75% over ten years. In Japan, we reduced the long-term expected return on 10-year Japanese Government Bonds by 20 bps and now grade to 1.30% over ten years. This market performance related adjustment to our estimate of total gross profits resulted in a cumulative adjustment to prior amortization, reflecting the application of the new required rate of amortization to all prior periods’ gross profits.

Adoption of New Accounting Pronouncements

See Note 2 to our Unaudited Interim Consolidated Financial Statements for a discussion of newly adopted accounting pronouncements and accounting pronouncements issued but not yet adopted.

Results of Operations by Segment

PGIM Division

PGIM

Business Update

76

We regularly review our existing businesses and may seek to deploy capital in support of our strategy or to exit an operation if it is determined that it no longer aligns with our broader strategy.

• In the first quarter of 2019, we completed the acquisition of Wadhwani Asset Management LLP, a London-based quantitative macro-focused investment management firm, and renamed the firm QMA Wadhwani LLP (“QMAW”). As a result of this transaction, QMAW operates as part of our QMA business.

• In the first quarter of 2019, we reached a definitive agreement with Dewan Housing Finance Corporation Limited (“DHFL”) to acquire its stake in our 50/50 joint venture, DHFL Pramerica Asset Managers (“DPAM”), an India-based asset management company. Upon close of the transaction, DPAM will become a wholly-owned business with no change to the scope of its business. The transaction, which is subject to customary closing conditions and regulatory and other approvals, is currently expected to close during the first half of 2019.

Operating Results

The following table sets forth the PGIM segment’s operating results for the periods indicated.

	Three Months Ended March 31,
	2019		2018
	(in millions)
Operating results(1):
Revenues	$	870	$	826
Expenses	656		594
Adjusted operating income	214		232
Realized investment gains (losses), net, and related adjustments	0		(12		)
Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests	5		(8		)
Income (loss) before income taxes and equity in earnings of operating joint ventures	$	219	$	212

 __________

(1) Certain of our PGIM segment’s investment activities are based in currencies other than the U.S. dollar and are therefore subject to foreign currency exchange rate risk. The financial results of our PGIM segment include the impact of an intercompany arrangement with our Corporate and Other operations designed to mitigate the impact of exchange rate changes on the segment’s U.S. dollar-equivalent earnings. For more information related to this intercompany arrangement, see “—Results of Operations—Impact of Foreign Currency Exchange Rates,” above.

Adjusted Operating Income

Adjusted operating income decreased $18 million. Higher asset management fees, reflecting increases in average assets under management driven by market appreciation and net flows, were more than offset by higher related expenses, driven by certain long-term employee compensation plans tied to more favorable Company stock and equity market performance. The decrease also reflected higher non-compensation expenses, including those supporting business growth initiatives, and charges associated with a joint venture. These net decreases were partially offset by higher other related revenues, net of associated expenses.

Revenues and Expenses

The following table sets forth the PGIM segment’s revenues, presented on a basis consistent with the table above under “—Operating Results,” by type.

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	Three Months Ended March 31,
	2019		2018
	(in millions)
Revenues by type:
Asset management fees by source:
Institutional customers	$	312	$	296
Retail customers(1)	209		217
General account	123		120
Total asset management fees	644		633
Other related revenues by source:
Incentive fees	36		5
Transaction fees	2		14
Strategic investing	36		34
Commercial mortgage(2)	26		20
Total other related revenues(3)	100		73
Service, distribution and other revenues(4)	126		120
Total revenues	$	870	$	826

__________

(1) Consists of fees from: individual mutual funds and variable annuities and variable life insurance separate account assets; funds invested in proprietary mutual funds through our defined contribution plan products; and third-party sub-advisory relationships. Revenues from fixed annuities and the fixed-rate accounts of variable annuities and variable life insurance are included in the general account.

(2) Includes mortgage origination and spread lending revenues from our commercial mortgage origination and servicing business.

(3) Future revenues will be impacted by the level and diversification of our strategic investments, the commercial real estate market, and other domestic and international markets.

(4) Includes payments from Wells Fargo under an agreement dated as of July 30, 2004, implementing arrangements with respect to money market mutual funds in connection with the combination of our retail securities brokerage and clearing operations with those of Wells Fargo. The agreement extends for ten years after termination of the Wachovia Securities joint venture, which occurred on December 31, 2009. The revenue from Wells Fargo under this agreement was $16 million and $19 million for the three months ended March 31, 2019 and 2018, respectively.

Revenues, as shown in the table above, increased $44 million. Asset management fees increased $11 million driven by an increase in average assets under management as a result of market appreciation and strong fixed income flows, partially offset by equity outflows. Other related revenues increased $27 million primarily due to higher gross performance-based incentive fees, higher commercial mortgage agency loan originations, and higher strategic investing results driven by favorable investment performance, partially offset by lower transaction fees. These increases were partially offset by charges associated with a joint venture.

Expenses, as shown in the table above under “—Operating Results,” increased $62 million, primarily reflecting higher costs for certain long-term employee compensation plans, as discussed above, and higher compensation costs related to the growth in incentive fees, as discussed above. Also contributing to the increase were higher non-compensation expenses, including those supporting business growth initiatives.

Assets Under Management

The following table sets forth assets under management by asset class and source as of the dates indicated.

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	March 31, 2019		December 31, 2018		March 31, 2018
	(in billions)
Assets Under Management (at fair value):
Institutional customers:
Equity	$	60.3	$	54.7	$	61.2
Fixed income	420.1		395.1		385.4
Real estate	43.6		43.7		43.0
Institutional customers(1)	524.0		493.5		489.6
Retail customers:
Equity	130.1		112.9		129.8
Fixed income	124.4		125.2		114.8
Real estate	1.9		2.0		1.6
Retail customers(2)	256.4		240.1		246.2
General account:
Equity	5.4		5.1		5.7
Fixed income	433.6		420.8		412.3
Real estate	2.0		1.9		2.0
General account	441.0		427.8		420.0
Total assets under management	$	1,221.4	$	1,161.4	$	1,155.8
Assets under management within other operating segments(3)	$	234.1	$	215.9	$	232.7
Total PFI assets under management	$	1,455.5	$	1,377.3	$	1,388.5

__________

(1) Consists of third-party institutional assets and group insurance contracts.

(2) Consists of individual mutual funds and variable annuities and variable life insurance separate account assets; funds invested in proprietary mutual funds through our defined contribution plan products; and third-party sub-advisory relationships. Fixed annuities and the fixed-rate accounts of variable annuities and variable life insurance are included in the general account.

(3) These amounts primarily include certain assets related to annuity and variable life products in our U.S. Individual Solutions division, retirement and group life products in our U.S. Workplace Solutions division and certain general account assets of our International Insurance division. These assets are not directly managed by PGIM, but rather are invested in non-proprietary funds or are managed by either the divisions themselves or our Chief Investment Officer Organization.

The following table sets forth the component changes in assets under management by asset source for the periods indicated.

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	Three Months Ended March 31,						Twelve Months Ended March 31,
	2019			2018			2019
	(in billions)
Institutional Customers:
Beginning assets under management	$	493.5		$	489.5		$	489.6
Net additions (withdrawals), excluding money market activity:
Third-party	1.0			(0.2		)	15.3
Third-party via affiliates(1)	(0.3		)	(0.7		)	(0.1		)
Total	0.7			(0.9		)	15.2
Market appreciation (depreciation)(3)	24.3			(1.2		)	15.2
Other increases (decreases)(2)	5.5			2.2			4.0
Ending assets under management	$	524.0		$	489.6		$	524.0
Retail Customers:
Beginning assets under management	$	240.1		$	245.6		$	246.2
Net additions (withdrawals), excluding money market activity:
Third-party	0.4			1.0			(1.0		)
Third-party via affiliates(1)	(6.9		)	(0.2		)	(4.4		)
Total	(6.5		)	0.8			(5.4		)
Market appreciation (depreciation)(3)	22.9			0.2			15.5
Other increases (decreases)(2)	(0.1		)	(0.4		)	0.1
Ending assets under management	$	256.4		$	246.2		$	256.4
General Account:
Beginning assets under management	$	427.8		$	420.2		$	420.0
Net additions (withdrawals), excluding money market activity:
Third-party	0.0			0.0			0.0
Affiliated	0.6			2.0			7.8
Total	0.6			2.0			7.8
Market appreciation (depreciation)(3)	14.2			(5.1		)	15.1
Other increases (decreases)(2)	(1.6		)	2.9			(1.9		)
Ending assets under management	$	441.0		$	420.0		$	441.0
Total assets under management	$	1,221.4		$	1,155.8		$	1,221.4

__________

(1) Represents assets that our PGIM segment manages for the benefit of other reporting segments within the Company. Additions and withdrawals of these assets are attributable to third-party product inflows and outflows in other reporting segments.

(2) Includes the effect of foreign exchange rate changes, net money market activity and the impact of acquired business. The impact from foreign currency fluctuations, which primarily impact the general account, resulted in a loss of $1.2 billion and in a gain of $5.4 billion for the three months ended March 31, 2019 and 2018, respectively, and a loss of $5.4 billion for the twelve months ended March 31, 2019.

(3) Includes income reinvestment, where applicable.

Strategic Investments

The following table sets forth the strategic investments of the PGIM segment at carrying value (including the value of derivative instruments used to mitigate equity market and currency risk) by asset class and source as of the dates indicated.

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	March 31, 2019		December 31, 2018
	(in millions)
Co-Investments:
Real estate	$	208	$	207
Fixed income	433		438
Seed Investments:
Real estate	54		50
Public equity	742		738
Fixed income	311		272
Total	$	1,748	$	1,705

The increase of $43 million in strategic investments was primarily driven by the favorable performance of equity and fixed income funds.

U.S. Workplace Solutions Division

Retirement

Operating Results

The following table sets forth the Retirement segment’s operating results for the periods indicated.

	Three Months Ended March 31,
	2019			2018
	(in millions)
Operating results:
Revenues	$	2,639		$	2,089
Benefits and expenses	2,388			1,772
Adjusted operating income	251			317
Realized investment gains (losses), net, and related adjustments	79			(155		)
Related charges	3			(1		)
Investment gains (losses) on assets supporting experience-rated contractholder liabilities, net	330			(289		)
Change in experience-rated contractholder liabilities due to asset value changes	(279		)	304
Income (loss) before income taxes and equity in earnings of operating joint ventures	$	384		$	176

Adjusted Operating Income

Adjusted operating income decreased $66 million, primarily driven by lower net investment spread results and higher general and administrative expenses, partially offset by more favorable reserve experience. The decrease in net investment spread results primarily reflected lower income on non-coupon investments and the impact of higher crediting rates on full service account values, partially offset by growth in average account values, including growth within our pension risk transfer business. The increase in general and administrative expenses was primarily driven by higher costs supporting business growth initiatives. The higher contribution from reserve experience primarily reflected higher mortality gains on a comparative basis within our pension risk transfer business.

Revenues, Benefits and Expenses

Revenues, as shown in the table above under “—Operating Results,” increased $550 million. Premiums increased $508 million, primarily driven by pension risk transfer transactions. This increase in premiums resulted in a corresponding increase in policyholders’ benefits, as discussed below. Net investment income increased $58 million, primarily reflecting higher asset balances, including growth within our pension risk transfer and structured settlement businesses and higher earned yields on our Full Service business, partially offset by lower income on non-coupon investments.

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Benefits and expenses, as shown in the table above under “—Operating Results,” increased $616 million. Policyholders’ benefits, including the change in policy reserves, increased $555 million, primarily related to the increase in premiums discussed above driven by growth in pension risk transfer transactions including interest on related reserves. Interest credited to policyholders’ account balances increased $38 million, including the impact of higher crediting rates on experience-rated account balances.

Account Values

Account values are a significant driver of our operating results, and are primarily driven by net additions (withdrawals) and the impact of market changes. The income we earn on most of our fee-based products varies with the level of fee-based account values, since many policy fees are determined by these values. The investment income and interest we credit to policyholders on our spread-based products varies with the level of general account values. To a lesser extent, changes in account values impact our pattern of amortization of DAC and VOBA and general and administrative expenses. The following table shows the changes in the account values and net additions (withdrawals) of Retirement segment products for the periods indicated. Net additions (withdrawals) are plan sales and participant deposits or additions, as applicable, minus plan and participant withdrawals and benefits. Account values include both internally- and externally-managed client balances as the total balances drive revenue for the Retirement segment. For more information on internally-managed balances, see “—PGIM.”

	Three Months Ended March 31,						Twelve Months Ended March 31,
	2019			2018			2019
	(in millions)
Full Service:
Beginning total account value	$	231,669		$	234,616		$	236,120
Deposits and sales	9,567			9,922			32,761
Withdrawals and benefits	(9,105		)	(8,154		)	(27,380		)
Change in market value, interest credited and interest income and other activity	18,940			(264		)	9,570
Ending total account value	$	251,071		$	236,120		$	251,071
Institutional Investment Products:
Beginning total account value	$	200,759		$	194,492		$	191,518
Additions(1)	2,247			688			22,869
Withdrawals and benefits	(3,649		)	(4,889		)	(14,169		)
Change in market value, interest credited and interest income	2,644			(214		)	6,161
Other(2)	1,100			1,441			(3,278		)
Ending total account value	$	203,101		$	191,518		$	203,101

__________

(1) Additions primarily include: group annuities calculated based on premiums received; longevity reinsurance contracts calculated as the present value of future projected benefits; and investment-only stable value contracts calculated as the fair value of customers’ funds held in a client-owned trust.

(2) “Other” activity includes the effect of foreign exchange rate changes associated with our British pounds sterling denominated longevity reinsurance business and changes in asset balances for externally-managed accounts. For the three months ended March 31, 2019, “other” activity also includes $611 million in receipts offset by $617 million in payments related to funding agreements backed by commercial paper which typically have maturities of less than 90 days.

The increase in full service account values for the three months ended March 31, 2019, reflected the favorable changes in the market value of customer funds. The increase in account values for the twelve months ended March 31, 2019, reflected the favorable changes in the market value of customer funds and positive net plan sales.

The increase in institutional investment products account values for the three months ended March 31, 2019 was primarily driven by the favorable changes in the market value of account assets, partially offset by benefit payments from pension risk transfer transactions. The increase in account values for the twelve months ended March 31, 2019, primarily reflected net additions from pension risk transfer transactions and the favorable changes in the market value of account assets.

Group Insurance

82

Operating Results

The following table sets forth the Group Insurance segment’s operating results and benefits and administrative operating expense ratios for the periods indicated.

	Three Months Ended March 31,
	2019			2018
	($ in millions)
Operating results:
Revenues	$	1,441		$	1,416
Benefits and expenses	1,388			1,361
Adjusted operating income	53			55
Realized investment gains (losses), net, and related adjustments	1			(30		)
Income (loss) before income taxes and equity in earnings of operating joint ventures	$	54		$	25
Benefits ratio(1):
Group life	89.0		%	87.2		%
Group disability	74.6		%	79.0		%
Total Group Insurance	85.9		%	85.6		%
Administrative operating expense ratio(2):
Group life	11.7		%	11.6		%
Group disability	26.9		%	27.1		%
Total Group Insurance	14.9		%	14.6		%

__________ 

(1) Ratio of policyholder benefits to earned premiums plus policy charges and fee income.

(2) Ratio of general and administrative expenses (excluding commissions) to gross premiums plus policy charges and fee income.

Adjusted Operating Income

Adjusted operating income decreased $2 million, reflecting less favorable underwriting results in our group life business, largely offset by more favorable underwriting results in our group disability business. The underwriting results in our group life business primarily reflect an unfavorable impact from claim experience on non-experience-rated contracts. The underwriting results in our group disability business primarily reflect a favorable impact from claim experience on long-term contracts and growth in the business. Both net investment spread results and expenses were in line with the prior year period.

Revenues, Benefits and Expenses

Revenues, as shown in the table above under “—Operating Results,” increased $25 million. The increase primarily reflected higher premiums and policy charges and fee income driven by growth in our group disability business.

Benefits and expenses, as shown in the table above under “—Operating Results,” increased $27 million. The increase primarily reflected higher policyholders’ benefits and changes in reserves in our group life and disability businesses.

Sales Results

The following table sets forth the Group Insurance segment’s annualized new business premiums, as defined under “—Segment Measures” above, for the periods indicated.

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	Three Months Ended March 31,
	2019		2018
	(in millions)
Annualized new business premiums(1):
Group life	$	174	$	243
Group disability	119		140
Total	$	293	$	383

__________ 

(1) Amounts exclude new premiums resulting from rate changes on existing policies, from additional coverage under our Servicemembers’ Group Life Insurance contract and from excess premiums on group universal life insurance that build cash value but do not purchase face amounts.

Total annualized new business premiums for the three months ended March 31, 2019 decreased $90 million compared to the prior year period, primarily driven by large client sales in the prior year period.

U.S. Individual Solutions Division

Individual Annuities

Operating Results

The following table sets forth the Individual Annuities segment’s operating results for the periods indicated.

	Three Months Ended March 31,
	2019			2018
	(in millions)
Operating results:
Revenues	$	1,235		$	1,252
Benefits and expenses	763			733
Adjusted operating income	472			519
Realized investment gains (losses), net, and related adjustments	(1,344		)	598
Related charges	134			(126		)
Income (loss) before income taxes and equity in earnings of operating joint ventures	$	(738	)	$	991

Adjusted Operating Income

Adjusted operating income decreased $47 million. Excluding the impacts of changes in the estimated profitability of the business, discussed below, adjusted operating income decreased $45 million. The decrease was primarily driven by lower asset-based fee income, net of distribution expenses and other associated costs, due to a decline in average variable account values largely resulting from negative net flows, and the impact of certain products reaching contractual milestones for fee tier reduction. Also contributing to the decrease were higher expenses, including those supporting business initiatives. These decreases were partially offset by an increase in net investment income reflecting a higher level of invested assets and higher investment yields, and a decrease in amortization costs and reserve provisions.

The impacts of changes in the estimated profitability of the business include adjustments to the amortization of DAC and other costs as well as to the reserves for certain living and/or death benefit features of our variable annuity products. These adjustments resulted in a net benefit of $14 million and $16 million in the first quarter of 2019 and 2018, respectively, reflecting the impact of equity market performance on contractholder accounts as well as our hedge effectiveness relative to our assumptions.

84

Revenues, Benefits and Expenses

Revenues, as shown in the table above under “—Operating Results,” decreased $17 million. Excluding a $6 million net decrease related to the impacts of certain changes in our estimated profitability of the business, as discussed above, revenues decreased $11 million. The decrease was primarily driven by lower policy charges and fee income as well as lower asset management and services fees and other income, reflecting lower average variable account values largely resulting from negative net flows, as well as the impact of certain products reaching contractual milestones for fee tier reduction. These decreases were partially offset by an increase in premiums, primarily reflecting an increase in single premium immediate annuity sales, with offsets in policyholders’ benefits as discussed below, and an increase in net investment income reflecting a higher level of invested assets and higher investment yields.

Benefits and expenses, as shown in the table above under “—Operating Results,” increased $30 million. Excluding a $4 million net decrease related to the impacts of certain changes in our estimated profitability of the business, as discussed above, benefits and expenses increased $34 million. This increase was primarily driven by policyholders’ benefits, including changes in reserves, due to higher reserve provisions resulting from an increase in single premium immediate annuity sales, with offsets in premiums, as discussed above. This increase was partially offset by a decrease in general and administrative expenses, net of capitalization, driven by lower distribution expenses, partially offset by higher other expenses including those supporting business initiatives.

Account Values

Account values are a significant driver of our operating results. Since most fees are determined by the level of separate account assets, fee income varies according to the level of account values. Additionally, our fee income generally drives other items such as the pattern of amortization of DAC and other costs. Account values are driven by net flows from new business sales, surrenders, withdrawals and benefit payments, policy charges and the impact of positive or negative market value changes. The annuity industry’s competitive and regulatory landscapes, which have been dynamic over the last few years, may impact our net flows, including new business sales. The following table sets forth account value information for the periods indicated.

	Three Months Ended March 31,						Twelve Months Ended March 31,
	2019			2018			2019
	(in millions)
Total Individual Annuities(1):
Beginning total account value	$	151,080		$	168,626		$	164,651
Sales	2,307			1,724			8,853
Surrenders and withdrawals	(2,646		)	(2,895		)	(11,439		)
Net sales (withdrawals)	(339		)	(1,171		)	(2,586		)
Benefit payments	(530		)	(537		)	(2,077		)
Net flows	(869		)	(1,708		)	(4,663		)
Change in market value, interest credited and other activity	12,573			(1,329		)	5,561
Policy charges	(894		)	(938		)	(3,659		)
Ending total account value	$	161,890		$	164,651		$	161,890

__________

(1) Includes variable and fixed annuities sold as retail investment products. Investments sold through defined contribution plan products are included with such products within the Retirement segment. Variable annuity account values were $157.9 billion and $161.2 billion as of March 31, 2019 and 2018, respectively. Fixed annuity account values were $4.0 billion and $3.5 billion as of March 31, 2019 and 2018, respectively.

The increase in account values for the three months ended March 31, 2019 primarily reflected market value appreciation. Gross sales for the three months ended March 31, 2019, increased in comparison to the prior year period, primarily attributable to certain distribution, product design and pricing actions implemented to enhance product competitiveness. The introduction of a new fixed index annuity product in 2018 also contributed to the increase in gross sales.

85

The decrease in account values for the twelve months ended March 31, 2019 was largely driven by net withdrawals and benefit payments and policy charges on contractholder accounts, partially offset by favorable changes in the market value of contractholder funds.

Variable Annuity Risks and Risk Mitigants

The following is a summary of: (i) certain risks associated with Individual Annuities’ products; (ii) certain strategies in mitigating those risks, including any updates to those strategies since the previous year-end; and (iii) the related financial results. For a more detailed description of these items and their related accounting treatment, refer to the complete descriptions provided in our Annual Report on Form 10-K for the year ended December 31, 2018.

The primary risk exposures of our variable annuity contracts relate to actual deviations from, or changes to, the assumptions used in the original pricing of these products, including capital markets assumptions such as equity market returns, interest rates and market volatility, along with actuarial assumptions such as contractholder mortality, the timing and amount of annuitization and withdrawals, and contract lapses. For these risk exposures, achievement of our expected returns and profitability is subject to the risk that actual experience will differ from the assumptions used in the original pricing of these products. We currently manage our exposure to certain risks driven by fluctuations in capital markets primarily through a combination of Product Design Features, an Asset Liability Management (“ALM”) Strategy, a Capital Hedge Program and External Reinsurance.

Product Design Features

A portion of the variable annuity contracts that we offer include an automatic rebalancing feature, also referred to as an asset transfer feature. This feature is implemented at the contract level, and transfers assets between certain variable investment sub-accounts selected by the annuity contractholder and, depending on the benefit feature, a fixed-rate account in the general account or a bond fund sub-account within the separate accounts. The objective of the automatic rebalancing feature is to reduce our exposure to equity market risk and market volatility. Other product design features we utilize include, among others, asset allocation restrictions, minimum issuance age requirements and certain limitations on the amount of contractholder deposits, as well as a required minimum allocation to our general account for certain of our products. We continue to introduce products that diversify our risk profile and have incorporated provisions in product design allowing frequent revisions of key pricing elements for certain of our products. In addition, there is diversity in our fee arrangements, as certain fees are primarily based on the benefit guarantee amount, the contractholder account value and/or premiums, which helps preserve certain revenue streams when market fluctuations cause account values to decline.

ALM Strategy (including fixed income instruments and derivatives)

Our current ALM strategy utilizes a combination of both traditional fixed income instruments and derivatives to defray potential claims associated with our variable annuity living benefit guarantees. The economic liability we manage with this ALM strategy consists of expected living benefit claims under less severe market conditions, which are managed using a traditional ALM strategy through the accumulation of fixed income and derivative instruments, and potential living benefit claims resulting from more severe market conditions, which are hedged using derivative instruments. For the portion of our ALM strategy executed with derivatives, we enter into a range of exchange-traded, cleared, and over-the-counter (“OTC”) equity and interest rate derivatives, including, but not limited to: equity and treasury futures; total return and interest rate swaps; and options including equity options, swaptions, and floors and caps.

The valuation of the economic liability we seek to defray excludes certain items that are included within the U.S. GAAP liability, such as non-performance risk (“NPR”) (in order to maximize protection irrespective of the possibility of our own default), as well as risk margins (required by U.S. GAAP but different from our best estimate) and valuation methodology differences. The following table provides a reconciliation between the liability reported under U.S. GAAP and the economic liability we manage through our ALM strategy as of the dates indicated:

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	March 31, 2019			December 31, 2018
	(in millions)
U.S. GAAP liability (including NPR)	$	9,948		$	8,860
NPR adjustment	3,532			4,619
Subtotal	13,480			13,479
Adjustments including risk margins and valuation methodology differences	(3,818		)	(4,084		)
Economic liability managed through the ALM strategy	$	9,662		$	9,395

As of March 31, 2019, our fixed income instruments and derivative assets exceed the economic liability within the entities in which the risks reside.

The following table illustrates the net impact to our Unaudited Interim Consolidated Statements of Operations from changes in the U.S. GAAP embedded derivative liability and hedge positions under the ALM strategy, and the related amortization of DAC and other costs, that are excluded from adjusted operating income.

	Three Months Ended March 31,
	2019			2018
	(in millions)(1)
Excluding impact of assumption updates and other refinements:
Net hedging impact(2)	$	(55	)	$	(149	)
Change in portions of U.S. GAAP liability, before NPR(3)	320			370
Change in the NPR adjustment	(1,063		)	184
Net impact from changes in the U.S. GAAP embedded derivative and hedge positions—reported in Individual Annuities	(798		)	405
Related benefit (charge) to amortization of DAC and other costs	161			(107		)
Net impact of assumption updates and other refinements	0			0
Net impact from changes in the U.S. GAAP embedded derivative and hedge positions, after the impact of NPR, DAC and other costs—reported in Individual Annuities	$	(637	)	$	298

__________

(1) Positive amount represents income; negative amount represents a loss.

(2) Net hedging impact represents the difference between the change in fair value of the risk we seek to hedge using derivatives and the change in fair value of the derivatives utilized with respect to that risk.

(3) Represents risk margins and valuation methodology differences between the economic liability managed by the ALM strategy and the U.S. GAAP liability, as well as the portion of the economic liability managed with fixed income instruments.

For the first quarter of 2019, the net impact from changes in the U.S. GAAP embedded derivative and hedge positions, after the impact of NPR, DAC and other costs, was a net charge of $637 million. The net impact from changes in the U.S. GAAP embedded derivative and hedge positions resulted in a net charge of $798 million, predominantly as a result of tightening credit spreads used in measuring our living benefit contracts. Partial offsets are included in the $161 million related benefit to amortization of DAC and other costs.

For the first quarter of 2018, the net impact from changes in the U.S. GAAP embedded derivative and hedge positions, after the impact of NPR, DAC and other costs, was a benefit of $298 million. The net impact from changes in the U.S. GAAP embedded derivative and hedge positions resulted in a net benefit of $405 million, predominantly as a result of widening credit spreads used in measuring our living benefit contracts. Partial offsets are included in the $107 million of related charge to amortization of DAC and other costs.

For information regarding the Capital Protection Framework (the “Framework”) we use to evaluate and support the risks of the ALM strategy, see “—Liquidity and Capital Resources—Capital.”

Capital Hedge Program

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We employ a capital hedge program within the Individual Annuities segment to hedge equity market impacts. The program is intended to protect a portion of the overall capital position of the variable annuities business against its exposure to the equity markets. The capital hedge program is conducted using equity derivatives which include equity call and put options, total return swaps and futures contracts. The changes in value of these derivatives are recognized in adjusted operating income over the expected duration of the capital hedge program.

External Reinsurance

As of March 31, 2019, living benefit guarantees associated with $3.1 billion of Highest Daily Lifetime Income (“HDI”) v.3.0 account values are reinsured to Union Hamilton Reinsurance Ltd., an external counterparty, pursuant to a quota share agreement that covered approximately 50% of new business between April 1, 2015 and December 31, 2016. HDI v.3.0 is the current version of our “highest daily” living benefits guarantee that is available with our Prudential Premier® Retirement Variable Annuity. New sales of HDI v.3.0 subsequent to December 31, 2016 are not covered by this external reinsurance agreement.

Product Specific Risks and Risk Mitigants

As noted above, the risks associated with our products are mitigated through product design features, including automatic rebalancing, as well as through our ALM strategy and external reinsurance. The following table sets forth the risk management profile of our living benefit guarantees and guaranteed minimum death benefit (“GMDB”) features as of the periods indicated.

	March 31, 2019				December 31, 2018				March 31, 2018
	Account Value		% of Total		Account Value		% of Total		Account Value		% of Total
	($ in millions)
Living benefit/GMDB features(1):
Both ALM strategy and automatic rebalancing(2)	$	108,390	68	%	$	101,496	69	%	$	111,967	69	%
ALM strategy only	7,936		5	%	7,520		5	%	8,921		5	%
Automatic rebalancing only	801		1	%	804		1	%	946		1	%
External reinsurance(3)	3,059		2	%	2,873		2	%	3,165		2	%
Prudential Defined Income Variable Annuity	12,649		8	%	11,237		7	%	9,926		6	%
Other products	2,474		2	%	2,306		2	%	2,690		2	%
Total living benefit/GMDB features	$	135,309			$	126,236			$	137,615
GMDB features and other(4)	22,587		14	%	21,103		14	%	23,556		15	%
Total variable annuity account value	$	157,896			$	147,339			$	161,171

__________

(1) All contracts with living benefit guarantees also contain GMDB features, which cover the same insured contract.

(2) Contracts with living benefits that are included in the ALM strategy and have an automatic rebalancing feature.

(3) Represents contracts subject to a reinsurance transaction with an external counterparty that covered certain new HDI business from April 1, 2015 through December 31, 2016. These contracts with living benefits also have an automatic rebalancing feature.

(4) Includes contracts that have a GMDB feature and do not have an automatic rebalancing feature.

Individual Life

Operating Results

The following table sets forth the Individual Life segment’s operating results for the periods indicated.

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	Three Months Ended March 31,
	2019			2018
	(in millions)
Operating results:
Revenues	$	1,482		$	1,425
Benefits and expenses	1,377			1,389
Adjusted operating income	105			36
Realized investment gains (losses), net, and related adjustments	119			(188		)
Related charges	(106		)	101
Income (loss) before income taxes and equity in earnings of operating joint ventures	$	118		$	(51	)

Adjusted Operating Income

Adjusted operating income increased $69 million, primarily reflecting a favorable comparative net impact of $49 million from changes in our estimated profitability of the business driven by equity market performance on policyholder accounts. Excluding this impact, adjusted operating income increased $20 million, primarily reflecting higher underwriting results driven by a favorable impact from mortality experience, net of reinsurance.

Revenues, Benefits and Expenses

Revenues, as shown in the table above under “—Operating Results,” increased $57 million. Excluding the impact of certain changes in our estimated profitability of the business, as discussed above, revenues increased $60 million. This increase was primarily driven by an increase in net investment income from higher average invested assets resulting from continued business growth, and higher investment income from unaffiliated reserve financing activity, which resulted in a corresponding increase in interest expense, as discussed below, as well as higher premiums driven by continued business growth.

Benefits and expenses, as shown in the table above under “—Operating Results,” decreased $12 million. Excluding the impact of certain changes in our estimated profitability of the business, as discussed above, benefits and expenses increased $40 million. This increase was driven by higher policyholders’ benefits attributable to continued business growth, and higher reserve financing costs, as discussed above, partially offset by a favorable impact from mortality experience. The net increase was partially offset by lower general and administrative expenses, net of capitalization, reflecting decreased VOBA amortization.

Sales Results

The following table sets forth individual life insurance annualized new business premiums, as defined under “—Results of Operations—Segment Measures” above, by distribution channel and product, for the periods indicated.

	Three Months Ended March 31, 2019						Three Months Ended March 31, 2018
	Prudential Advisors		Third Party		Total		Prudential Advisors		Third Party		Total
	(in millions)
Term Life	$	7	$	44	$	51	$	7	$	42	$	49
Guaranteed Universal Life(1)	2		19		21		3		18		21
Other Universal Life(1)	9		21		30		9		17		26
Variable Life	16		45		61		11		18		29
Total	$	34	$	129	$	163	$	30	$	95	$	125

__________

(1) Single pay life premiums and excess (unscheduled) premiums are included in annualized new business premiums based on a 10% credit and represented approximately 7% and 24% of Guaranteed Universal Life and 0% and 0% of Other Universal Life annualized new business premiums for the three months ended March 31, 2019 and 2018, respectively.

Total annualized new business premiums for the three months ended March 31, 2019 increased $38 million compared to the prior year period primarily driven by higher sales of variable life products, as a result of product design and pricing actions implemented in 2018.

89

International Insurance Division

International Insurance

Operating Results

The results of our International Insurance operations are translated on the basis of weighted average monthly exchange rates, inclusive of the effects of the intercompany arrangement discussed in “—Results of Operations—Impact of Foreign Currency Exchange Rates” above. To provide a better understanding of operating performance within the International Insurance segment, where indicated below, we have analyzed our results of operations excluding the effect of the year over year change in foreign currency exchange rates. Our results of operations, excluding the effect of foreign currency fluctuations, were derived by translating foreign currencies to U.S. dollars at uniform exchange rates for all periods presented, including for constant dollar information discussed below. The exchange rates used were Japanese yen at a rate of 105 yen per U.S. dollar and Korean won at a rate of 1110 won per U.S. dollar, both of which were determined in connection with the foreign currency income hedging program discussed in “—Results of Operations—Impact of Foreign Currency Exchange Rates” above. In addition, for constant dollar information discussed below, activity denominated in U.S. dollars is generally reported based on the amounts as transacted in U.S. dollars. Annualized new business premiums presented on a constant exchange rate basis in the “Sales Results” section below reflect translation based on these same uniform exchange rates.

The following table sets forth the International Insurance segment’s operating results for the periods indicated.

	Three Months Ended March 31,
	2019			2018
	(in millions)
Operating results:
Revenues:
Life Planner operations	$	3,175		$	3,078
Gibraltar Life and Other operations	2,977			2,962
Total revenues	6,152			6,040
Benefits and expenses:
Life Planner operations	2,694			2,662
Gibraltar Life and Other operations	2,536			2,522
Total benefits and expenses	5,230			5,184
Adjusted operating income:
Life Planner operations	481			416
Gibraltar Life and Other operations	441			440
Total adjusted operating income	922			856
Realized investment gains (losses), net, and related adjustments	532			(155		)
Related charges	0			0
Investment gains (losses) on assets supporting experience-rated contractholder liabilities, net	124			(114		)
Change in experience-rated contractholder liabilities due to asset value changes	(124		)	114
Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests	(30		)	(17		)
Income (loss) before income taxes and equity in earnings of operating joint ventures	$	1,424		$	684

Adjusted Operating Income

Adjusted operating income from our Life Planner operations increased $65 million, including a net favorable impact of $5 million from currency fluctuations, inclusive of the currency hedging program discussed above. Excluding the impact of currency fluctuations, adjusted operating income increased $60 million, primarily reflecting the growth of business in force in our Japan and Brazil operations and higher underwriting results driven by a favorable impact from mortality experience. Also contributing to the increase was a favorable comparative net impact from changes in our estimated profitability of the business driven by equity market performance on policyholder accounts. These increases were partially offset by lower net investment results and higher general and administrative expenses.

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Adjusted operating income from our Gibraltar Life and Other operations increased $1 million, including a net favorable impact of $6 million from currency fluctuations, inclusive of the currency hedging program discussed above. Excluding the impact of currency fluctuations, adjusted operating income decreased $5 million, primarily reflecting higher general and administrative expenses driven by costs associated with business initiatives. This decrease was partially offset by growth of business in force, higher net investment results, driven by higher average invested assets resulting from continued business growth, and more favorable results from our joint venture investments.

Revenues, Benefits and Expenses

Revenues from our Life Planner operations increased $97 million, including a net unfavorable impact of $84 million from currency fluctuations. Excluding the impact of currency fluctuations, revenues increased $181 million, primarily driven by higher premiums and policy charges and fee income related to the growth of business in force.

Benefits and expenses of our Life Planner operations increased $32 million, including a net favorable impact of $89 million from currency fluctuations. Excluding the impact of currency fluctuations, benefits and expenses increased $121 million. This increase primarily reflects higher policyholders’ benefits, including changes in reserves, driven by business growth, and higher general and administrative expenses, net of capitalization.

Revenues from our Gibraltar Life and Other operations increased $15 million, including a net unfavorable impact of $30 million from currency fluctuations. Excluding the impact of currency fluctuations, revenues increased $45 million, primarily reflecting higher net investment income driven by higher average invested assets resulting from continued business, and higher other income driven by more favorable results from our joint venture investments.

Benefits and expenses of our Gibraltar Life and Other operations increased $14 million, including a net favorable impact of $36 million from currency fluctuations. Excluding the impact of currency fluctuations, benefits and expenses increased $50 million, primarily driven by an increase in policyholders’ benefits, including changes in reserves, driven by business growth, and higher general and administrative expenses driven by costs associated with business initiatives.

Sales Results

The following table sets forth annualized new business premiums, as defined under “—Results of Operations—Segment Measures” above, on an actual and constant exchange rate basis for the periods indicated.

	Three Months Ended March 31,
	2019		2018
	(in millions)
Annualized new business premiums:
On an actual exchange rate basis:
Life Planner operations	$	404	$	351
Gibraltar Life	323		407
Total	$	727	$	758
On a constant exchange rate basis:
Life Planner operations	$	409	$	344
Gibraltar Life	325		408
Total	$	734	$	752

The amount of annualized new business premiums and the sales mix in terms of types and currency denomination of products for any given period can be significantly impacted by several factors, including but not limited to: the addition of new products, discontinuation of existing products, changes in credited interest rates for certain products and other product modifications, changes in premium rates, changes in interest rates or fluctuations in currency markets, changes in tax laws, changes in life insurance regulations or changes in the competitive environment. Sales volume may increase or decrease prior to certain of these changes becoming effective, and then fluctuate in the other direction following such changes.

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Our diverse product portfolio in Japan, in terms of currency mix and premium payment structure, allows us to adapt to changing market and competitive dynamics, including the extremely low interest rate environment. We regularly examine our product offerings and their related profitability and, as a result, we have repriced or discontinued sales of certain products that do not meet our profit expectations. The impact of these actions, coupled with the introduction of certain new products, has generally resulted in an increase in sales of products denominated in U.S. dollars relative to products denominated in other currencies.

The table below presents annualized new business premiums on a constant exchange rate basis, by product and distribution channel, for the periods indicated.

	Three Months Ended March 31, 2019										Three Months Ended March 31, 2018
	Life		Accident & Health		Retirement(1)		Annuity		Total		Life		Accident & Health		Retirement(1)		Annuity		Total
	(in millions)
Life Planner	$	237	$	36	$	116	$	20	$	409	$	183	$	30	$	109	$	22	$	344
Gibraltar Life:
Life Consultants	$	87	$	11	$	23	$	45	$	166	$	77	$	12	$	29	$	79	$	197
Banks(2)	94		0		9		5		108		136		0		8		14		158
Independent Agency	31		3		9		8		51		26		3		16		8		53
Subtotal	212		14		41		58		325		239		15		53		101		408
Total	$	449	$	50	$	157	$	78	$	734	$	422	$	45	$	162	$	123	$	752

_____

(1) Includes retirement income, endowment and savings variable universal life.

(2) Single pay life annualized new business premiums, which include 10% of first year premiums, and 3-year limited pay annualized new business premiums, which include 100% of new business premiums, represented 0% and 65%, respectively, of total Japanese bank distribution channel annualized new business premiums, excluding annuity products, for the three months ended March 31, 2019, and 0% and 72%, respectively, of total Japanese bank distribution channel annualized new business premiums, excluding annuity products, for the three months ended March 31, 2018.

Annualized new business premiums, on a constant exchange rate basis, from our Life Planner operations increased $65 million, primarily reflecting higher sales of U.S. dollar-denominated products driven by growth in Life Planner headcount, as well as higher productivity and average premium sizes, in our Japan and Brazil operations.

Annualized new business premiums, on a constant exchange rate basis, from our Gibraltar Life operations decreased $83 million. Life Consultants sales decreased $31 million, primarily reflecting lower sales of U.S. dollar-denominated fixed annuity products driven by prioritization of our strategy to focus on recurring pay protection products. Bank channel sales decreased $50 million, primarily from lower sales of U.S. dollar-denominated life products due to increased competition. Independent Agency sales decreased $2 million, primarily reflecting lower sales of yen-denominated products, partially offset by higher sales of U.S. dollar-denominated products.

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Corporate and Other

Corporate and Other includes corporate operations, after allocations to our business segments, and Divested and Run-off Businesses other than those that qualify for “discontinued operations” accounting treatment under U.S. GAAP.

	Three Months Ended March 31,
	2019			2018
	(in millions)
Operating results:
Capital debt interest expense	$	(199	)	$	(181	)
Investment income, net of operating debt interest expense	44			27
Pension and employee benefits	24			40
Other corporate activities(1)	(281		)	(180		)
Adjusted operating income	(412		)	(294		)
Realized investment gains (losses), net, and related adjustments	(50		)	29
Related charges	(6		)	3
Divested and Run-off Businesses	174			(72		)
Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests	(8		)	(1		)
Income (loss) before income taxes and equity in earnings of operating joint ventures	$	(302	)	$	(335	)

__________ 

(1) Includes consolidating adjustments.

The loss from Corporate and Other operations, on an adjusted operating income basis, increased $118 million. Net charges from other corporate activities increased $101 million, primarily reflecting higher costs for long-term employee compensation plans tied to the more favorable Company stock and equity market performance, and increases in other corporate costs, including expenses related to corporate initiatives. Capital debt interest expense increased $18 million, reflecting higher debt balances from debt issuances in the first quarter of 2019 and in 2018, partially offset by the extinguishment of junior subordinated debt in 2018. Results from pension and employee benefits decreased $16 million, primarily reflecting lower income from our qualified pension plan, due to higher interest costs on plan obligations driven by the increase in interest rates in 2018. Results for investment income, net of operating debt interest expense, increased $17 million, primarily reflecting higher income on highly liquid assets.

Divested and Run-off Businesses

Divested and Run-off Businesses Included in Corporate and Other

Income from our Divested and Run-off Businesses includes results from several businesses that have been or will be sold or exited, including businesses that have been placed in wind down status that do not qualify for “discontinued operations” accounting treatment under U.S. GAAP. The results of these Divested and Run-off Businesses are reflected in our Corporate and Other operations, but are excluded from adjusted operating income. A summary of the results of the Divested and Run-off Businesses reflected in our Corporate and Other operations is as follows for the periods indicated:

	Three Months Ended March 31,
	2019		2018
	(in millions)
Long-Term Care	$	164	$	(73	)
Other	10		1
Total Divested and Run-off Businesses income (loss) excluded from adjusted operating income	$	174	$	(72	)

Long-Term Care. Results for the first quarter of 2019 increased compared to the prior year period, reflecting net realized investment gains in the current period compared to net realized investment losses in the prior year period, driven by a favorable comparative change in the market values of derivatives used for duration management. The increase also reflects an increase in the market value of investments in equity securities.

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Closed Block Division

The Closed Block division includes certain in-force traditional domestic participating life insurance and annuity products and assets that are used for the payment of benefits and policyholder dividends on these policies (collectively the “Closed Block”), as well as certain related assets and liabilities. We no longer offer these traditional domestic participating policies. See Note 8 to the Unaudited Interim Consolidated Financial Statements for additional details.

Each year, the Board of Directors of The Prudential Insurance Company of America (“PICA”) determines the dividends payable on participating policies for the following year based on the experience of the Closed Block, including investment income, net realized and unrealized investment gains, mortality experience and other factors. Although Closed Block experience for dividend action decisions is based upon statutory results, at the time the Closed Block was established, we developed, as required by U.S. GAAP, an actuarial calculation of the timing of the maximum future earnings from the policies included in the Closed Block. If actual cumulative earnings in any given period are greater than the cumulative earnings we expected, we record this excess as a policyholder dividend obligation. We will subsequently pay this excess to Closed Block policyholders as an additional dividend unless it is otherwise offset by future Closed Block performance that is less favorable than we originally expected. The policyholder dividends we charge to expense within the Closed Block division will include any change in our policyholder dividend obligation that we recognize for the excess of actual cumulative earnings in any given period over the cumulative earnings we expected in addition to the actual policyholder dividends declared by the Board of Directors of PICA.

As of March 31, 2019, the excess of actual cumulative earnings over the expected cumulative earnings was $2,375 million, which was recorded as a policyholder dividend obligation. Actual cumulative earnings, as required by U.S. GAAP, reflect the recognition of realized investment gains and losses in the current period, as well as changes in assets and related liabilities that support the Closed Block policies. Additionally, the accumulation of net unrealized investment gains that have arisen subsequent to the establishment of the Closed Block have been reflected as a policyholder dividend obligation of $1,980 million at March 31, 2019, to be paid to Closed Block policyholders unless offset by future experience, with a corresponding amount reported in AOCI.

Operating Results

The following table sets forth the Closed Block division’s results for the periods indicated.

	Three Months Ended March 31,
	2019			2018
	(in millions)
U.S. GAAP results:
Revenues	$	1,374		$	1,163
Benefits and expenses	1,393			1,172
Income (loss) before income taxes and equity in earnings of operating joint ventures	$	(19	)	$	(9	)

Income (loss) Before Income Taxes and Equity in Earnings of Operating Joint Ventures

     Income before income taxes and equity in earnings of operating joint ventures decreased $10 million. Net realized investment gains and related activity increased $266 million primarily due to favorable changes in the value of equity securities included in “Other income (loss)” and an increase in the value of derivatives used in risk management activities, partially offset by lower gains from sales of fixed maturities. Net investment income decreased $30 million, primarily due to lower income on non-coupon investments, lower prepayment fee income and lower securities lending fee income. Premiums decreased $25 million, primarily due to run off of policies in force. As a result of the above and other variances, a $123 million increase in the policyholder dividend obligation was recorded in the first quarter of 2019, compared to a $139 million reduction in the first quarter of 2018. If actual cumulative earnings fall below expected cumulative earnings in future periods, earnings volatility in the Closed Block division, which is primarily due to changes in investment results, may not be offset by changes in the cumulative earnings policyholder dividend obligation. For a discussion of Closed Block division realized investment gains (losses), net, see “—General Account Investments.”

Revenues, Benefits and Expenses

Revenues, as shown in the table above under “—U.S. GAAP results,” increased $211 million due to increases in net realized investment gains and related activity, partially offset by lower net investment income and lower premiums, as discussed above.

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Benefits and expenses, as shown in the table above under “—U.S. GAAP results,” increased $221 million, primarily due to a $245 million increase in dividends to policyholders, reflecting an increase in the policyholder dividend obligation expense due to changes in cumulative earnings.

Income Taxes

For information regarding income taxes, see Note 9 to the Unaudited Interim Consolidated Financial Statements.

Experience-Rated Contractholder Liabilities,

Assets Supporting Experience-Rated Contractholder Liabilities and Other Related Investments

Certain products included in the Retirement and International Insurance segments are experience-rated in that investment results associated with these products are expected to ultimately accrue to contractholders. The majority of investments supporting these experience-rated products are carried at fair value. These investments are reflected on the Unaudited Interim Consolidated Statements of Financial Position as “Assets supporting experience-rated contractholder liabilities, at fair value.” Realized and unrealized gains (losses) for these investments are reported in “Other income (loss).” Interest and dividend income for these investments is reported in “Net investment income.” To a lesser extent, these experience-rated products are also supported by derivatives and commercial mortgage and other loans. The derivatives that support these experience-rated products are reflected on the Unaudited Interim Consolidated Statements of Financial Position as “Other invested assets” and are carried at fair value, and the realized and unrealized gains (losses) are reported in “Realized investment gains (losses), net.” The commercial mortgage and other loans that support these experience-rated products are carried at unpaid principal, net of unamortized discounts and an allowance for losses, and are reflected on the Unaudited Interim Consolidated Statements of Financial Position as “Commercial mortgage and other loans.” Gains (losses) on sales and changes in the valuation allowance for commercial mortgage and other loans are reported in “Realized investment gains (losses), net.”

Our Retirement segment has two types of experience-rated products that are supported by assets supporting experience-rated contractholder liabilities and other related investments. Fully participating products are those for which the entire return on underlying investments is passed back to the policyholders through a corresponding adjustment to the related liability, primarily classified in the Unaudited Interim Consolidated Statements of Financial Position as “Policyholders’ account balances.” The adjustment to the liability is based on changes in the fair value of all of the related assets, including commercial mortgage and other loans, which are carried at amortized cost, less any valuation allowance. Partially participating products are those for which only a portion of the return on underlying investments is passed back to the policyholders over time through changes to the contractual crediting rates. The crediting rates are typically reset semiannually, often subject to a minimum crediting rate, and returns are required to be passed back within ten years.

In our International Insurance segment, the experience-rated products are fully participating. As a result, the entire return on the underlying investments is passed back to policyholders through a corresponding adjustment to the related liability.

Adjusted operating income excludes net investment gains (losses) on assets supporting experience-rated contractholder liabilities, related derivatives and commercial mortgage and other loans. This is consistent with the exclusion of realized investment gains (losses) with respect to other investments supporting insurance liabilities managed on a consistent basis. In addition, to be consistent with the historical treatment of charges related to realized investment gains (losses) on investments, adjusted operating income also excludes the change in contractholder liabilities due to asset value changes in the pool of investments (including changes in the fair value of commercial mortgage and other loans) supporting these experience-rated contracts, which are reflected in “Interest credited to policyholders’ account balances.” The result of this approach is that adjusted operating income for these products includes net fee revenue and interest spread we earn on these experience-rated contracts, and excludes changes in fair value of the pool of investments, both realized and unrealized, that we expect will ultimately accrue to the contractholders.

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The following table sets forth the impact on results for the periods indicated of these items that are excluded from adjusted operating income:

	Three Months Ended March 31,
	2019			2018
	(in millions)
Retirement Segment:
Investment gains (losses) on:
Assets supporting experience-rated contractholder liabilities, net	$	330		$	(289	)
Derivatives	(3		)	(37		)
Commercial mortgages and other loans	(1		)	2
Change in experience-rated contractholder liabilities due to asset value changes(1)(2)	(279		)	304
Net gains (losses)	$	47		$	(20	)
International Insurance Segment:
Investment gains (losses) on assets supporting experience-rated contractholder liabilities, net	$	124		$	(114	)
Change in experience-rated contractholder liabilities due to asset value changes	(124		)	114
Net gains (losses)	$	0		$	0
Total:
Investment gains (losses) on:
Assets supporting experience-rated contractholder liabilities, net	$	454		$	(403	)
Derivatives	(3		)	(37		)
Commercial mortgages and other loans	(1		)	2
Change in experience-rated contractholder liabilities due to asset value changes(1)(2)	(403		)	418
Net gains (losses)	$	47		$	(20	)

__________ 

(1) Decreases to contractholder liabilities due to asset value changes are limited by certain floors and therefore do not reflect cumulative declines in recorded asset values of $24 million and $61 million as of March 31, 2019 and 2018, respectively. We have recovered and expect to recover in future periods these declines in recorded asset values through subsequent increases in recorded asset values or reductions in crediting rates on contractholder liabilities.

(2) Included in the amounts above related to the change in the liability to contractholders as a result of commercial mortgage and other loans are an increase of $29 million and a decrease of $17 million for the three months ended March 31, 2019 and 2018, respectively. As prescribed by U.S. GAAP, changes in the fair value of commercial mortgage and other loans held for investment in our general account, other than when associated with impairments, are not recognized in income in the current period, while the impact of these changes in fair value are reflected as a change in the liability to fully participating contractholders in the current period.

The net impacts, for the Retirement segment, of changes in experience-rated contractholder liabilities and investment gains (losses) on assets supporting experience-rated contractholder liabilities and other related investments reflect timing differences between the recognition of the mark-to-market adjustments and the recognition of the recovery of these adjustments in future periods through subsequent increases in asset values or reductions in crediting rates on contractholder liabilities for partially participating products. These impacts also reflect the difference between the fair value of the underlying commercial mortgages and other loans and the amortized cost, less any valuation allowance, of these loans, as described above.

Valuation of Assets and Liabilities

Fair Value of Assets and Liabilities

The authoritative guidance related to fair value measurement establishes a framework that includes a three-level hierarchy used to classify the inputs used in measuring fair value. The level in the hierarchy within which the fair value falls is determined based on the lowest level input that is significant to the measurement. The fair values of assets and liabilities classified as Level 3 include at least one significant unobservable input in the measurement. See Note 6 to the Unaudited Interim Consolidated Financial Statements for an additional description of the valuation hierarchy levels as well as for the balances of assets and liabilities measured at fair value on a recurring basis by hierarchy level presented on a consolidated basis.

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The table below presents the balances of assets and liabilities measured at fair value on a recurring basis, as of the periods indicated, and the portion of such assets and liabilities that are classified in Level 3 of the valuation hierarchy. The table also provides details about these assets and liabilities excluding those held in the Closed Block division. We believe the amounts excluding the Closed Block division are most relevant to an understanding of our operations that are pertinent to investors in Prudential Financial because substantially all Closed Block division assets support obligations and liabilities relating to the Closed Block policies only. See Note 8 to the Unaudited Interim Consolidated Financial Statements for further information on the Closed Block.

	As of March 31, 2019								As of December 31, 2018
	PFI excluding Closed Block Division				Closed Block Division				PFI excluding Closed Block Division				Closed Block Division
	Total at Fair Value		Total Level 3(1)		Total at Fair Value		Total Level 3(1)		Total at Fair Value		Total Level 3(1)		Total at Fair Value		Total Level 3(1)
	(in millions)
Fixed maturities, available-for- sale	$	326,214	$	3,909	$	39,714	$	993	$	314,911	$	3,455	$	38,745	$	780
Assets supporting experience-rated contractholder liabilities:
Fixed maturities	19,714		681		0		0		19,579		818		0		0
Equity securities	1,586		1		0		0		1,460		1		0		0
All other(2)	264		0		0		0		215		0		0		0
Subtotal	21,564		682		0		0		21,254		819		0		0
Fixed maturities, trading	3,250		238		185		2		3,048		204		195		2
Equity securities	4,639		602		2,002		72		4,316		604		1,784		67
Commercial mortgage and other loans	463		0		0		0		763		0		0		0
Other invested assets(3)	1,390		373		0		0		1,404		263		5		0
Short-term investments	4,817		125		512		43		5,040		65		453		24
Cash equivalents	6,433		1		522		0		9,027		59		451		18
Other assets	48		48		0		0		25		25		0		0
Separate account assets	272,325		1,635		0		0		254,066		1,534		0		0
Total assets	$	641,143	$	7,613	$	42,935	$	1,110	$	613,854	$	7,028	$	41,633	$	891
Future policy benefits	$	10,025	$	10,025	$	0	$	0	$	8,926	$	8,926	$	0	$	0
Other liabilities(3)	578		146		4		0		191		56		0		0
Notes issued by consolidated variable interest entities (“VIEs”)	817		817		0		0		595		595		0		0
Total liabilities	$	11,420	$	10,988	$	4	$	0	$	9,712	$	9,577	$	0	$	0

__________

(1) Level 3 assets expressed as a percentage of total assets measured at fair value on a recurring basis for PFI excluding the Closed Block division and for the Closed Block division totaled 1.2% and 2.6%, respectively, as of March 31, 2019, and 1.1% and 2.1%, respectively, as of December 31, 2018.

(2) “All other” represents cash equivalents and short-term investments.

(3) “Other invested assets” and “Other liabilities” primarily include derivatives. The amounts include the impact of netting subject to master netting agreements.

The determination of fair value, which for certain assets and liabilities is dependent on the application of estimates and assumptions, can have a significant impact on our results of operations and may require the application of a greater degree of judgment depending on market conditions, as the ability to value assets and liabilities can be significantly impacted by a decrease in market activity or a lack of transactions executed in an orderly manner. The following sections provide information regarding certain assets and liabilities which are valued using Level 3 inputs and could have a significant impact on our results of operations.

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Fixed Maturity and Equity Securities

Fixed maturity securities included in Level 3 in our fair value hierarchy are generally priced based on internally-developed valuations or indicative broker quotes. For certain private fixed maturity and equity securities, the internal valuation models use significant unobservable inputs and, accordingly, such securities are included in Level 3 in our fair value hierarchy. Level 3 fixed maturity securities for PFI excluding the Closed Block division included approximately $2.2 billion of public fixed maturities as of March 31, 2019, with values primarily based on indicative broker quotes, and approximately $2.6 billion of private fixed maturities, with values primarily based on internally-developed models. Significant unobservable inputs used included: issue specific spread adjustments, material non-public financial information, management judgment, estimation of future earnings and cash flows, default rate assumptions, liquidity assumptions and indicative quotes from market makers. These inputs are usually considered unobservable, as not all market participants have access to this data.

The Company’s determination to classify assets and liabilities within Level 3 is based on significance of the unobservable inputs in the overall fair value measurement. Periodically, transfers between levels are made to reflect changes in observability of inputs and market activity. All transfers are generally reported at the value as of the beginning of the quarter in which transfers occur for any such assets still held at the end of the quarter.

The impact that fair value changes of fixed maturity securities have on the results of operations is dependent on the classification of the security as trading, available-for-sale, or held-to-maturity. For investments classified as trading, changes in fair value are recorded within “Other income (loss).” For investments classified as available-for-sale, changes in fair value are recorded as an unrealized gain or loss in AOCI, a separate component of equity. Investments classified as held-to-maturity are carried at amortized cost and the changes in fair value have no impact on the results of operations.

Separate Account Assets

Separate account assets included in Level 3 primarily include corporate securities and commercial mortgage loans. The valuation of corporate securities is determined as described above for fixed maturity and equity securities. See Note 6 to the Unaudited Interim Consolidated Financial Statements for additional information on the valuation of commercial mortgage loans. Separate account liabilities are reported at contract value and not at fair value.

Variable Annuity Living Benefit Features

Future policy benefits classified in Level 3 primarily include liabilities related to guarantees associated with the living benefit features of certain variable annuity contracts offered by our Individual Annuities segment, including Guaranteed Minimum Accumulation Benefits (“GMAB”), Guaranteed Minimum Withdrawal Benefits (“GMWB’) and Guaranteed Minimum Income and Withdrawal Benefits (“GMIWB”). These benefits are accounted for as embedded derivatives and carried at fair value with changes in fair value included in “Realized investment gains (losses), net.” The fair values of the GMAB, GMWB and GMIWB liabilities are calculated as the present value of future expected benefit payments to customers less the present value of future rider fees attributable to the embedded derivative feature. This methodology could result in either a liability or contra-liability balance, based on capital market conditions and various policyholder behavior assumptions. Since there is no observable active market for the transfer of these obligations, the valuations are calculated using internally-developed models with option pricing techniques. These models utilize significant assumptions that are primarily unobservable, including assumptions as to lapse rates, NPR, utilization rates, withdrawal rates, mortality rates and equity market volatility. Future policy benefits classified as Level 3 for PFI excluding the Closed Block division were a net liability of $10.0 billion as of March 31, 2019. For additional information, see “—Results of Operations by Segment—U.S. Individual Solutions Division—Individual Annuities.”

Notes Issued by Consolidated VIEs

As discussed in Note 4 to the Unaudited Interim Consolidated Financial Statements, notes issued by consolidated VIEs represent non-recourse notes issued by certain asset-backed investment vehicles, primarily collateralized loan obligations (“CLOs”), which we are required to consolidate. We have elected the fair value option for these notes, which are valued based on corresponding bank loan collateral.

For additional information about the key estimates and assumptions used in our determination of fair value, see Note 6 to the Unaudited Interim Consolidated Financial Statements.

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General Account Investments

Portfolio Composition

Our investment portfolio consists of public and private fixed maturity securities, commercial mortgage and other loans, policy loans and non-coupon investments, which include equity securities and other invested assets such as limited partnerships and limited liability companies (“LPs/LLCs”), real estate held through direct ownership, derivative instruments and seed money investments in separate accounts. The composition of our general account reflects, within the discipline provided by our risk management approach, our need for competitive results and the selection of diverse investment alternatives available primarily through our PGIM segment. The size of our portfolio enables us to invest in asset classes that may be unavailable to the typical investor.

The following tables set forth the composition of the investments of our general account apportioned between PFI excluding the Closed Block division and the Closed Block division, as of the dates indicated:

	March 31, 2019
	PFI Excluding Closed Block Division				Closed Block Division		Total
	($ in millions)
Fixed maturities:
Public, available-for-sale, at fair value	$	278,059	64.6	%	$	27,080	$	305,139
Public, held-to-maturity, at amortized cost	1,724		0.4		0		1,724
Private, available-for-sale, at fair value	47,683		11.1		12,634		60,317
Private, held-to-maturity, at amortized cost	258		0.1		0		258
Fixed maturities, trading, at fair value	2,063		0.5		185		2,248
Assets supporting experience-rated contractholder liabilities, at fair value	21,668		5.0		0		21,668
Equity securities, at fair value	4,143		1.0		2,002		6,145
Commercial mortgage and other loans, at book value	51,746		12.0		8,623		60,369
Policy loans, at outstanding balance	7,621		1.8		4,365		11,986
Other invested assets(1)	8,642		2.0		3,296		11,938
Short-term investments	6,347		1.5		549		6,896
Total general account investments	429,954		100.0	%	58,734		488,688
Invested assets of other entities and operations(2)	5,715				0		5,715
Total investments	$	435,669			$	58,734	$	494,403

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	December 31, 2018
	PFI Excluding Closed Block Division				Closed Block Division		Total
	($ in millions)
Fixed maturities:
Public, available-for-sale, at fair value	$	269,109	64.8	%	$	26,203	$	295,312
Public, held-to-maturity, at amortized cost	1,745		0.4		0		1,745
Private, available-for-sale, at fair value	45,328		10.9		12,542		57,870
Private, held-to-maturity, at amortized cost	268		0.1		0		268
Fixed maturities, trading, at fair value	1,893		0.5		195		2,088
Assets supporting experience-rated contractholder liabilities, at fair value	21,254		5.1		0		21,254
Equity securities, at fair value	3,849		0.9		1,784		5,633
Commercial mortgage and other loans, at book value	50,251		12.1		8,782		59,033
Policy loans, at outstanding balance	7,606		1.8		4,410		12,016
Other invested assets(1)	8,407		2.0		3,316		11,723
Short-term investments	5,948		1.4		478		6,426
Total general account investments	415,658		100.0	%	57,710		473,368
Invested assets of other entities and operations(2)	5,877				0		5,877
Total investments	$	421,535			$	57,710	$	479,245

__________

(1) Other invested assets consist of investments in LPs/LLCs, investment real estate held through direct ownership, derivative instruments and other miscellaneous investments. For additional information regarding these investments, see “—Other Invested Assets” below.

(2) Includes invested assets of our investment management and derivative operations. Excludes assets of our investment management operations that are managed for third-parties and those assets classified as “Separate account assets” on our balance sheet. For additional information regarding these investments, see “—Invested Assets of Other Entities and Operations” below.

The increase in general account investments attributable to PFI excluding the Closed Block division in the first three months of 2019 was primarily due to market appreciation from a decrease in U.S. and Japan interest rates and credit spreads, the reinvestment of net investment income and net business inflows. For information regarding the methodology used in determining the fair value of our fixed maturities, see Note 6 to the Unaudited Interim Consolidated Financial Statements.

As of both March 31, 2019 and December 31, 2018, 43% of our general account investments attributable to PFI excluding the Closed Block division related to our Japanese insurance operations. The following table sets forth the composition of the investments of our Japanese insurance operations’ general account, as of the dates indicated:

	March 31, 2019		December 31, 2018
	(in millions)
Fixed maturities:
Public, available-for-sale, at fair value	$	136,317	$	133,084
Public, held-to-maturity, at amortized cost	1,724		1,745
Private, available-for-sale, at fair value	17,271		16,222
Private, held-to-maturity, at amortized cost	258		268
Fixed maturities, trading, at fair value	363		328
Assets supporting experience-rated contractholder liabilities, at fair value	2,559		2,441
Equity securities, at fair value	2,017		1,972
Commercial mortgage and other loans, at book value	17,684		17,228
Policy loans, at outstanding balance	2,737		2,715
Other invested assets(1)	2,122		1,957
Short-term investments	443		451
Total Japanese general account investments	$	183,495	$	178,411

__________ 

(1) Other invested assets consist of investments in LPs/LLCs, investment real estate held through direct ownership, derivative instruments and other miscellaneous investments.

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The increase in general account investments related to our Japanese insurance operations in the first three months of 2019 was primarily attributable to market appreciation from a decrease in U.S. and Japan interest rates and credit spreads, net business inflows, and reinvestment of net investment income.

As of March 31, 2019, our Japanese insurance operations had $68.0 billion, at carrying value, of investments denominated in U.S. dollars, including $2.4 billion that were hedged to yen through third-party derivative contracts and $52.7 billion that support liabilities denominated in U.S. dollars, with the remainder hedging our foreign currency exchange rate exposure of U.S. dollar-equivalent equity. As of December 31, 2018, our Japanese insurance operations had $64.9 billion, at carrying value, of investments denominated in U.S. dollars, including $2.5 billion that were hedged to yen through third-party derivative contracts and $50.0 billion that support liabilities denominated in U.S. dollars, with the remainder hedging our foreign currency exchange rate exposure of U.S. dollar-equivalent equity. The $3.1 billion increase in the carrying value of U.S. dollar-denominated investments from December 31, 2018 was primarily attributable to portfolio growth as a result of net business inflows, reinvestment of net investment income, and the impact of the fall in the U.S Treasury and Japanese Government Bond rates, partially offset by the reduction of the U.S. dollar investments hedged back to yen through third-party derivatives.

Our Japanese insurance operations had $10.4 billion and $10.1 billion, at carrying value, of investments denominated in Australian dollars that support liabilities denominated in Australian dollars as of March 31, 2019 and December 31, 2018, respectively. The $0.3 billion increase in the carrying value of Australian dollar-denominated investments from December 31, 2018 was primarily attributable to the translation impact of the Australian dollar strengthening against the U.S. dollar. For additional information regarding U.S. and Australian dollar investments held in our Japanese insurance operations and a discussion of our yen hedging strategy, see “—Results of Operations by Segment—Impact of Foreign Currency Exchange Rates” above.

Investment Results

The following tables set forth the investment results of our general account apportioned between PFI excluding the Closed Block division and the Closed Block division, for the periods indicated. The yields are based on net investment income as reported under U.S. GAAP and as such do not include certain interest-related items, such as settlements of duration management swaps which are included in “Realized investment gains (losses), net.”

	Three Months Ended March 31, 2019
	PFI Excluding Closed Block Division and Japanese Operations					Japanese Insurance Operations					PFI Excluding Closed Block Division					Closed Block Division			Total(5)
	Yield(1)		Amount			Yield(1)		Amount			Yield(1)		Amount			Amount			Amount
	($ in millions)
Fixed maturities(2)	4.61	%	$	1,848		2.83	%	$	937		3.80	%	$	2,785		$	419		$	3,204
Assets supporting experience-rated contractholder liabilities	3.50		165			3.14		20			3.46		185			0			185
Equity securities	2.37		12			1.43		7			1.90		19			11			30
Commercial mortgage and other loans	3.98		332			3.81		165			3.92		497			95			592
Policy loans	5.11		62			3.85		26			4.66		88			63			151
Short-term investments and cash equivalents	2.70		95			2.90		8			2.71		103			9			112
Gross investment income	4.31		2,514			2.94		1,163			3.76		3,677			597			4,274
Investment expenses	(0.13	)	(106		)	(0.13	)	(68		)	(0.13	)	(174		)	(54		)	(228		)
Investment income after investment expenses	4.18	%	2,408			2.81	%	1,095			3.63	%	3,503			543			4,046
Other invested assets(3)			38					51					89			20			109
Investment results of other entities and operations(4)			61					0					61			0			61
Total investment income			$	2,507				$	1,146				$	3,653		$	563		$	4,216

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	Three Months Ended March 31, 2018
	PFI Excluding Closed Block Division and Japanese Operations					Japanese Insurance Operations					PFI Excluding Closed Block Division					Closed Block Division			Total(5)
	Yield(1)		Amount			Yield(1)		Amount			Yield(1)		Amount			Amount			Amount
	($ in millions)
Fixed maturities(2)	4.56	%	$	1,702		2.93	%	$	923		3.82	%	$	2,625		$	424		$	3,049
Assets supporting experience-rated contractholder liabilities	3.61		173			2.72		18			3.50		191			0			191
Equity securities	1.78		10			1.56		8			1.67		18			10			28
Commercial mortgage and other loans	3.94		319			3.84		143			3.91		462			103			565
Policy loans	5.26		63			3.80		25			4.74		88			64			152
Short-term investments and cash equivalents	1.66		54			1.47		7			1.64		61			8			69
Gross investment income	4.23		2,321			3.00		1,124			3.73		3,445			609			4,054
Investment expenses	(0.14	)	(86		)	(0.12	)	(53		)	(0.13	)	(139		)	(49		)	(188		)
Investment income after investment expenses	4.09	%	2,235			2.88	%	1,071			3.60	%	3,306			560			3,866
Other invested assets(3)			54					27					81			33			114
Investment results of other entities and operations(4)			18					0					18			0			18
Total investment income			$	2,307				$	1,098				$	3,405		$	593		$	3,998

__________ 

(1) For interim periods, yields are annualized. The denominator in the yield percentage is based on quarterly average carrying values for all asset types except for fixed maturities which are based on amortized cost. Amounts for fixed maturities, short-term investments and cash equivalents are also netted for securities lending activity (i.e., income netted for rebate expenses and asset values netted for securities lending liabilities). A yield is not presented for other invested assets as it is not considered a meaningful measure of investment performance. Yields exclude investment income and assets related to other invested assets. Prior period yields have been revised to conform to current period presentation.

(2) Includes fixed maturity securities classified as available-for-sale and held-to-maturity and excludes fixed maturity securities classified as trading, which are included in other invested assets.

(3) Other invested assets consist of investments in LPs/LLCs, investment real estate held through direct ownership, derivative instruments, fixed maturities classified as trading and other miscellaneous investments.

(4) Includes net investment income of our investment management operations.

(5) The total yield was 3.71% and 3.69% for the three months ended March 31, 2019 and 2018, respectively. Prior period yields have been revised to conform to current period presentation.

The increase in investment income after investment expenses yield attributable to our general account investments, excluding both the Closed Block division and the Japanese insurance operations’ portfolio, for the three months ended March 31, 2019, compared to the three months ended March 31, 2018, was primarily the result of higher fixed income reinvestment rates.

The decrease in investment income after investment expenses yield attributable to the Japanese insurance operations’ portfolio, for the three months ended March 31, 2019, compared to the three months ended March 31, 2018, was primarily the result of lower fixed income reinvestment rates.

Both the U.S. dollar-denominated and Australian dollar-denominated fixed maturities that are not hedged to yen through third-party derivative contracts provide a yield that is substantially higher than the yield on comparable yen-denominated fixed maturities. The average amortized cost of U.S. dollar-denominated fixed maturities that are not hedged to yen through third-party derivative contracts was approximately $44.9 billion and $43.4 billion for the three months ended March 31, 2019 and 2018, respectively. The majority of U.S. dollar-denominated fixed maturities support liabilities that are denominated in U.S. dollars. The average amortized cost of Australian dollar-denominated fixed maturities that are not hedged to yen through third-party derivative contracts was approximately $9.1 billion and $10.5 billion for the three months ended March 31, 2019 and 2018, respectively. The majority of Australian dollar-denominated fixed maturities support liabilities that are denominated in Australian dollars. For additional information regarding U.S. and Australian dollar investments held in our Japanese insurance operations, see “—Results of Operations by Segment—Impact of Foreign Currency Exchange Rates” above.

Realized Investment Gains and Losses

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The following table sets forth “Realized investment gains (losses), net,” of our general account apportioned between PFI excluding Closed Block division and the Closed Block division by investment type as well as related charges and adjustments, for the periods indicated:

	Three Months Ended March 31,
	2019			2018
	(in millions)
PFI excluding Closed Block Division:
Realized investment gains (losses), net:
Due to foreign exchange movements on securities approaching maturity	$	0		$	(8	)
Due to securities actively marketed for sale	(1		)	(8		)
Due to credit or adverse conditions of the respective issuer(1)	(30		)	(15		)
OTTI losses on fixed maturities recognized in earnings(2)	(31		)	(31		)
Net gains (losses) on sales and maturities	269			82
Fixed maturity securities(3)	238			51
Commercial mortgage and other loans	(3		)	(1		)
Derivative instruments	(1,006		)	349
OTTI losses on other invested assets recognized in earnings(4)	0			(3		)
Other net gains (losses)	1			10
Other	1			7
Subtotal	(770		)	406
Investment results of other entities and operations(5)	(52		)	21
Total — PFI excluding Closed Block Division	(822		)	427
Related adjustments	159			(340		)
Realized investment gains (losses), net, and related adjustments	(663		)	87
Related charges	25			(23		)
Realized investment gains (losses), net, and related charges and adjustments	$	(638	)	$	64
Closed Block Division:
Realized investment gains (losses), net:
Due to foreign exchange movements on securities approaching maturity	$	0		$	(8	)
Due to securities actively marketed for sale	0			0
Due to credit or adverse conditions of the respective issuer(1)	(4		)	0
OTTI losses on fixed maturities recognized in earnings(2)	(4		)	(8		)
Net gains (losses) on sales and maturities	26			35
Fixed maturity securities(3)	22			27
Commercial mortgage and other loans	0			1
Derivative instruments	39			(30		)
OTTI losses on other invested assets recognized in earnings(4)	0			(1		)
Other net gains (losses)	(5		)	1
Other	(5		)	0
Subtotal — Closed Block Division	56			(2		)
Consolidated PFI realized investment gains (losses), net	$	(766	)	$	425

__________

(1) Represents circumstances where we believe credit events or other adverse conditions of the respective issuers have caused or will lead to a deficiency in the contractual cash flows related to the investment. The amount of the impairment recorded in earnings is the difference between the amortized cost of the debt security and the net present value of its projected future cash flows discounted at the effective interest rate implicit in the debt security prior to impairment.

(2) Excludes the portion of OTTI recorded in OCI, representing any difference between the fair value of the impaired debt security and the net present value of its projected future cash flows at the time of impairment.

(3) Includes fixed maturity securities classified as available-for-sale and held-to-maturity and excludes fixed maturity securities classified as trading.

(4) Primarily includes OTTI related to investments in LPs/LLCs and real estate held through direct ownership.

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(5) Includes “realized investment gains (losses), net” of our investment management operations.

Net gains on sales and maturities of fixed maturity securities were $269 million and $82 million for the first quarter of 2019 and 2018, respectively, primarily driven by the impact of foreign currency exchange rate movements of U.S. and Australian dollar-denominated securities that matured or were sold within our International Insurance segment.

Net realized losses on derivative instruments of $(1,006) million for the first quarter of 2019 primarily included:

• $(1,201) million of losses on product-related embedded derivatives and related hedge positions associated with certain variable annuity contracts;

• $(487) million of losses on capital hedges due to increases in equity indices;

• $428 million of gains on interest rate derivatives due to decreases in swap and U.S. Treasury rates;

• $102 million of gains on foreign currency hedges due to U.S. dollar appreciation;

• $68 million of gains on credit default swaps primarily due to spreads tightening; and

• $36 million of gains for fees earned on fee-based synthetic guaranteed investment contracts (“GICs”).

Net realized gains on derivative instruments of $350 million for the first quarter of 2018 primarily included:

• $769 million of gains on product-related embedded derivatives and related hedge positions associated with certain variable annuity contracts;

• $44 million of gains for fees earned on fee-based synthetic GICs;

• $(363) million of losses on interest rate derivatives due to increases in swap and U.S. Treasury rates; and

• $(100) million of losses on foreign currency hedges due to U.S. dollar depreciation, partially offset by Japanese yen appreciation.

For a discussion of living benefit guarantees and related hedge positions in our Individual Annuities segment, see “—Results of Operations by Segment—U.S. Individual Solutions Division—Individual Annuities” above.

Related adjustments include the portions of “Realized investment gains (losses), net” that are included in adjusted operating income and the portions of “Other income (loss)” and “Net investment income” that are excluded from adjusted operating income. These adjustments are made to arrive at “Realized investment gains (losses), net, and related adjustments” which are excluded from adjusted operating income. Results for the first quarter of 2019 and 2018 reflected related adjustments of net positive $159 million and net negative $340 million, respectively. Results for the first quarter of 2019 were driven by the change in fair value of equity securities recorded in “Other income (loss).” Results for the first quarter of 2018 were driven by the impact of foreign currency exchange rate movements on certain non-local currency denominated assets and liabilities within the International Insurance segment, for which the majority of the foreign currency exposure is hedged and offset in “Realized Investment gains (losses), net.”

Charges that relate to “Realized investment gains (losses), net” are also excluded from adjusted operating income and may be reflected as net charges or net benefits. Results for the first quarter of 2019 reflected a net related benefit of $25 million, compared to a net related charge of $23 million for the first quarter of 2018. Both periods’ results were driven by the impact of derivative activity on the amortization of DAC, other costs and certain policyholder reserves.

Impairments

The level of OTTI generally reflects economic conditions and is expected to increase when economic conditions worsen and to decrease when economic conditions improve. Historically, the causes of OTTI have been specific to each individual issuer and have not directly resulted in impairments to other securities within the same industry or geographic region. We may also realize additional credit and interest rate-related losses through sales of investments pursuant to our credit risk and portfolio management objectives.

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We maintain separate monitoring processes for public and private fixed maturities and create watch lists to highlight securities that require special scrutiny and management. For private placements, our credit and portfolio management processes help ensure prudent controls over valuation and management. We have separate pricing and authorization processes to establish “checks and balances” for new investments. We apply consistent standards of credit analysis and due diligence for all transactions, whether they originate through our own in-house origination staff or through agents. Our regional offices closely monitor the portfolios in their regions. We set all valuation standards centrally, and we assess the fair value of all investments quarterly. Our public and private fixed maturity investment managers formally review all public and private fixed maturity holdings on a quarterly basis and more frequently when necessary to identify potential credit deterioration whether due to ratings downgrades, unexpected price variances and/or company or industry-specific concerns.

For LPs/LLCs accounted for using the equity method, the carrying value of these investments is written down or impaired to fair value when a decline in value is considered to be other-than-temporary. For additional information regarding our OTTI policies, see Note 2 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.

Retail-Related Investments

As of March 31, 2019, PFI excluding the Closed Block division had retail-related investments of approximately $14 billion consisting primarily of $6 billion of corporate fixed maturities of which 88% were considered investment grade; $7 billion of commercial mortgage loans with a weighted-average loan-to-value ratio of approximately 50% and a weighted-average debt service coverage ratio of 2.43 times; and $1 billion of real estate held through direct ownership and real estate-related LPs/LLCs.

In addition, we held approximately $9 billion of commercial mortgage-backed securities, of which approximately 82% and 18% were rated AAA (super-senior) and AA, respectively, and comprised of diversified collateral pools. Approximately 30% of the collateral pools were comprised of retail-related investments, with no pools solely collateralized by retail-related investments. For additional information regarding commercial mortgage-backed securities, see “—Fixed Maturity Securities—Fixed Maturity Securities Credit Quality” below.

General Account Investments of PFI excluding Closed Block Division

In the following sections, we provide details about our investment portfolio, excluding investments held in the Closed Block division. We believe the details of the composition of our investment portfolio excluding the Closed Block division are most relevant to an understanding of our operations that are pertinent to investors in Prudential Financial because substantially all Closed Block division assets support obligations and liabilities relating to the Closed Block policies only. See Note 8 to the Unaudited Interim Consolidated Financial Statements for further information on the Closed Block.

Fixed Maturity Securities

In the following sections, we provide details about our fixed maturity securities portfolio, which excludes fixed maturity securities classified as assets supporting experience-rated contractholder liabilities and classified as trading.

Fixed Maturity Securities and Unrealized Gains and Losses by Industry Category

The following table sets forth the composition of the portion of our fixed maturity securities portfolio by industry category attributable to PFI excluding the Closed Block division and the associated gross unrealized gains and losses, as of the dates indicated:

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	March 31, 2019								December 31, 2018
Industry(1)	Amortized Cost		Gross Unrealized Gains(2)		Gross Unrealized Losses(2)		Fair Value		Amortized Cost		Gross Unrealized Gains(2)		Gross Unrealized Losses(2)		Fair Value
	(in millions)
Corporate securities:
Finance	$	31,192	$	1,269	$	209	$	32,252	$	29,831	$	726	$	724	$	29,833
Consumer non-cyclical	24,121		1,544		343		25,322		24,136		1,172		748		24,560
Utility	21,671		1,380		289		22,762		22,179		1,073		624		22,628
Capital goods	11,905		745		172		12,478		11,623		561		386		11,798
Consumer cyclical	10,964		608		142		11,430		11,001		429		330		11,100
Foreign agencies	5,950		881		37		6,794		5,946		785		91		6,640
Energy	11,967		760		212		12,515		11,753		524		553		11,724
Communications	5,937		597		86		6,448		6,163		455		234		6,384
Basic industry	5,493		326		59		5,760		5,431		238		158		5,511
Transportation	8,924		578		90		9,412		8,633		428		225		8,836
Technology	3,682		202		40		3,844		3,855		155		99		3,911
Industrial other	3,832		238		61		4,009		3,764		151		154		3,761
Total corporate securities	145,638		9,128		1,740		153,026		144,315		6,697		4,326		146,686
Foreign government(3)	96,424		19,619		110		115,933		97,087		16,942		301		113,728
Residential mortgage-backed(4)	3,143		136		14		3,265		3,205		120		31		3,294
Asset-backed	9,626		138		42		9,722		9,803		122		62		9,863
Commercial mortgage-backed	9,294		215		27		9,482		8,953		87		86		8,954
U.S. Government	23,546		3,095		304		26,337		22,290		2,563		569		24,284
State & Municipal	9,443		905		6		10,342		9,456		607		63		10,000
Total(5)	$	297,114	$	33,236	$	2,243	$	328,107	$	295,109	$	27,138	$	5,438	$	316,809

__________ 

(1) Investment data has been classified based on standard industry categorizations for domestic public holdings and similar classifications by industry for all other holdings.

(2) Includes $383 million of gross unrealized gains and less than $1 million of gross unrealized losses, as of March 31, 2019, compared to $359 million of gross unrealized gains and less than $1 million of gross unrealized losses, as of December 31, 2018, on securities classified as held-to-maturity.

(3) As of March 31, 2019 and December 31, 2018, based on amortized cost, 75% and 76%, respectively, represent Japanese government bonds held by our Japanese insurance operations with no other individual country representing more than 11% of the balance.

(4) As of both March 31, 2019 and December 31, 2018, based on amortized cost, more than 99% were rated A or higher.

(5) Excluded from the table above are securities held outside the general account in other entities and operations. For additional information regarding investments held outside the general account, see “—Invested Assets of Other Entities and Operations” below.

The increase in net unrealized gains from December 31, 2018 to March 31, 2019 was primarily due to a decrease in U.S. interest rates and credit spread tightening.

Fixed Maturity Securities Credit Quality

The Securities Valuation Office (“SVO”) of the NAIC evaluates the investments of insurers for statutory reporting purposes and assigns fixed maturity securities to one of six categories called “NAIC Designations.” In general, NAIC Designations of “1” highest quality, or “2” high quality, include fixed maturities considered investment grade, which include securities rated Baa3 or higher by Moody’s Investor Service, Inc. (“Moody’s”) or BBB- or higher by Standard & Poor’s Rating Services (“S&P”). NAIC Designations of “3” through “6” generally include fixed maturities referred to as below investment grade, which include securities rated Ba1 or lower by Moody’s and BB+ or lower by S&P. The NAIC Designations for commercial mortgage-backed securities and non-agency residential mortgage-backed securities, including our asset-backed securities collateralized by sub-prime mortgages, are based on security level expected losses as modeled by an independent third-party (engaged by the NAIC) and the statutory carrying value of the security, including any purchase discounts or impairment charges previously recognized.

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As a result of time lags between the funding of investments, the finalization of legal documents, and the completion of the SVO filing process, the fixed maturity portfolio includes certain securities that have not yet been designated by the SVO as of each balance sheet date. Pending receipt of SVO designations, the categorization of these securities by NAIC Designation is based on the expected ratings indicated by internal analysis.

Investments of our international insurance companies are not subject to NAIC guidelines. Investments of our Japanese insurance operations are regulated locally by the Financial Services Agency (“FSA”), an agency of the Japanese government. The FSA has its own investment quality criteria and risk control standards. Our Japanese insurance companies comply with the FSA’s credit quality review and risk monitoring guidelines. The credit quality ratings of the investments of our Japanese insurance companies are based on ratings assigned by nationally recognized credit rating agencies, including Moody’s and S&P, or rating equivalents based on ratings assigned by Japanese credit ratings agencies.

The following table sets forth our fixed maturity portfolio by NAIC Designation or equivalent rating attributable to PFI excluding the Closed Block division, as of the dates indicated:

	March 31, 2019								December 31, 2018
NAIC Designation(1)(2)	Amortized Cost		Gross Unrealized Gains(3)		Gross Unrealized Losses(3)(4)		Fair Value		Amortized Cost		Gross Unrealized Gains(3)		Gross Unrealized Losses(3)(4)		Fair Value
	(in millions)
1	$	224,945	$	29,311	$	843	$	253,413	$	222,290	$	24,138	$	2,568	$	243,860
2	55,535		3,006		983		57,558		55,768		2,267		1,999		56,036
Subtotal High or Highest Quality Securities(5)	280,480		32,317		1,826		310,971		278,058		26,405		4,567		299,896
3	9,898		465		144		10,219		10,149		330		408		10,071
4	5,163		331		210		5,284		5,254		291		368		5,177
5	1,265		102		47		1,320		1,395		99		77		1,417
6	308		21		16		313		253		13		18		248
Subtotal Other Securities(6)(7)	16,634		919		417		17,136		17,051		733		871		16,913
Total fixed maturities	$	297,114	$	33,236	$	2,243	$	328,107	$	295,109	$	27,138	$	5,438	$	316,809

__________ 

(1) Reflects equivalent ratings for investments of the international insurance operations.

(2) Includes, as of March 31, 2019 and December 31, 2018, 1,108 securities with amortized cost of $5,230 million (fair value, $5,405 million) and 1,744 securities with amortized cost of $9,079 million (fair value, $9,135 million), respectively, that have been categorized based on expected NAIC Designations pending receipt of SVO ratings.

(3) Includes $383 million of gross unrealized gains and less than $1 million of gross unrealized losses, as of March 31, 2019, compared to $359 million of gross unrealized gains and less than $1 million of gross unrealized losses, as of December 31, 2018, on securities classified as held-to-maturity.

(4) As of March 31, 2019, includes gross unrealized losses of $242 million on public fixed maturities and $175 million on private fixed maturities considered to be other than high or highest quality and, as of December 31, 2018, includes gross unrealized losses of $591 million on public fixed maturities and $280 million on private fixed maturities considered to be other than high or highest quality.

(5) On an amortized cost basis, as of March 31, 2019, includes $240,095 million of public fixed maturities and $40,385 million of private fixed maturities and, as of December 31, 2018, includes $238,824 million of public fixed maturities and $39,234 million of private fixed maturities.

(6) On an amortized cost basis, as of March 31, 2019, includes $10,099 million of public fixed maturities and $6,535 million of private fixed maturities and, as of December 31, 2018, includes $10,588 million of public fixed maturities and $6,463 million of private fixed maturities.

(7) On an amortized cost basis, as of March 31, 2019, securities considered below investment grade based on lowest of external rating agency ratings total $18,719 million, or 6% of the total fixed maturities, and include securities considered high or highest quality by the NAIC based on the rules described above.

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Asset-Backed and Commercial Mortgage-Backed Securities

The following table sets forth the amortized cost and fair value of asset-backed and commercial mortgage-backed securities within our fixed maturity available-for-sale portfolio attributable to PFI excluding the Closed Block division by credit quality, as of the dates indicated:

	March 31, 2019								December 31, 2018
	Asset-Backed Securities(2)				Commercial Mortgage-Backed Securities(3)				Asset-Backed Securities(2)				Commercial Mortgage-Backed Securities(3)
Lowest Rating Agency Rating(1)	Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(in millions)
AAA	$	9,089	$	9,074	$	7,630	$	7,790	$	9,188	$	9,151	$	7,523	$	7,528
AA	307		331		1,648		1,676		405		430		1,415		1,410
A	55		62		6		7		30		36		6		7
BBB	12		12		9		9		15		15		9		9
BB and below	163		243		1		0		165		231		0		0
Total(4)	$	9,626	$	9,722	$	9,294	$	9,482	$	9,803	$	9,863	$	8,953	$	8,954

__________ 

(1) The table above provides ratings as assigned by nationally recognized rating agencies as of March 31, 2019, including S&P, Moody’s, Fitch Ratings Inc, (“Fitch”) and Morningstar, Inc.(“Morningstar”).

(2) Includes collateralized loan obligations, credit-tranched securities collateralized by sub-prime mortgages, auto loans, credit cards, education loans and other asset types.

(3) As of both March 31, 2019 and December 31, 2018, based on amortized cost, 96% were securities with vintages of 2013 or later.

(4) Excludes fixed maturity securities classified as “Assets supporting experience-rated contractholder liabilities” and “Fixed maturities, trading,” as well as securities held outside the general account in other entities and operations.

Included in “Asset-backed securities” above are investments in CLOs. The following table sets forth information pertaining to these investments in CLOs within our fixed maturity available-for-sale portfolio attributable to PFI excluding the Closed Block division, as of the dates indicated:

	March 31, 2019				December 31, 2018
	Collateralized Loan Obligations
Lowest Rating Agency Rating(1)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(in millions)
AAA	$	6,928	$	6,902	$	7,355	$	7,318
AA	0		0		0		0
A	0		0		0		0
BBB	0		0		0		0
BB and below	0		0		0		0
Total(2)	$	6,928	$	6,902	$	7,355	$	7,318

__________ 

(1) The table above provides ratings as assigned by nationally recognized rating agencies as of March 31, 2019, including S&P, Moody’s, Fitch and Morningstar.

(2) Excludes fixed maturity securities classified as “Assets supporting experience-rated contractholder liabilities” and “Fixed maturities, trading,” as well as securities held outside the general account in other entities and operations.

Assets Supporting Experience-Rated Contractholder Liabilities

For information regarding the composition of “Assets supporting experience-rated contractholder liabilities,” see Note 3 to the Unaudited Interim Consolidated Financial Statements.

Commercial Mortgage and Other Loans

Investment Mix

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The following table sets forth the composition of our commercial mortgage and other loans portfolio attributable to PFI excluding the Closed Block division, as of the dates indicated:

	March 31, 2019			December 31, 2018
	(in millions)
Commercial mortgage and agricultural property loans	$	51,029		$	49,524
Uncollateralized loans	651			658
Residential property loans	147			158
Other collateralized loans	17			17
Total recorded investment gross of allowance(1)	51,844			50,357
Allowance for credit losses	(98		)	(106		)
Total net commercial mortgage and other loans(2)	$	51,746		$	50,251

__________

(1) As a percentage of recorded investment gross of allowance, more than 99% of these assets were current as of both March 31, 2019 and December 31, 2018.

(2) Excluded from the table above are commercial mortgage and other loans held outside the general account in other entities and operations. For additional information regarding commercial mortgage and other loans held outside the general account, see “—Invested Assets of Other Entities and Operations” below.

We originate commercial mortgage and agricultural property loans using a dedicated investment staff through our various regional offices in the U.S. and international offices primarily in London and Tokyo. All loans are underwritten consistently to our standards using a proprietary quality rating system that has been developed from our experience in real estate and mortgage lending.

Uncollateralized loans primarily represent corporate loans which do not meet the definition of a security under authoritative accounting guidance.

Residential property loans primarily include Japanese recourse loans. Upon default of these recourse loans, we can make a claim against the personal assets of the property owner, in addition to the mortgaged property. These loans are also backed by third-party guarantors.

Other collateralized loans include consumer loans.

Composition of Commercial Mortgage and Agricultural Property Loans

Our commercial mortgage and agricultural property loan portfolio strategy emphasizes diversification by property type and geographic location. The following tables set forth the breakdown of the gross carrying values of commercial mortgage and agricultural property loans attributable to PFI excluding the Closed Block division by geographic region and property type, as of the dates indicated:

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	March 31, 2019				December 31, 2018
	Gross Carrying Value		% of Total		Gross Carrying Value		% of Total
	($ in millions)
Commercial mortgage and agricultural property loans by region:
U.S. Regions(1):
Pacific	$	16,920	33.2	%	$	16,553	33.4	%
South Atlantic	8,829		17.3		8,633		17.4
Middle Atlantic	6,331		12.4		6,088		12.3
East North Central	3,383		6.6		2,813		5.7
West South Central	5,134		10.1		5,044		10.2
Mountain	2,601		5.1		2,508		5.0
New England	1,874		3.7		1,879		3.8
West North Central	451		0.9		476		1.0
East South Central	586		1.1		595		1.2
Subtotal-U.S.	46,109		90.4		44,589		90.0
Europe	3,031		5.9		3,077		6.2
Asia	754		1.5		733		1.5
Other	1,135		2.2		1,125		2.3
Total commercial mortgage and agricultural property loans	$	51,029	100.0	%	$	49,524	100.0	%

__________

(1) Regions as defined by the United States Census Bureau.

	March 31, 2019				December 31, 2018
	Gross Carrying Value		% of Total		Gross Carrying Value		% of Total
	($ in millions)
Commercial mortgage and agricultural property loans by property type:
Industrial	$	11,185	21.9	%	$	10,490	21.2	%
Retail	6,595		12.9		6,693		13.5
Office	10,831		21.3		10,971		22.1
Apartments/Multi-Family	14,351		28.1		13,818		27.9
Other	3,418		6.7		3,255		6.6
Agricultural properties	2,802		5.5		2,710		5.5
Hospitality	1,847		3.6		1,587		3.2
Total commercial mortgage and agricultural property loans	$	51,029	100.0	%	$	49,524	100.0	%

Loan-to-value and debt service coverage ratios are measures commonly used to assess the quality of commercial mortgage and agricultural property loans. The loan-to-value ratio compares the amount of the loan to the fair value of the underlying property collateralizing the loan and is commonly expressed as a percentage. A loan-to-value ratio less than 100% indicates an excess of collateral value over the loan amount. Loan-to-value ratios greater than 100% indicate that the loan amount exceeds the collateral value. The debt service coverage ratio compares a property’s net operating income to its debt service payments. Debt service coverage ratios less than 1.0 times indicate that property operations do not generate enough income to cover the loan’s current debt payments. A debt service coverage ratio greater than 1.0 times indicates an excess of net operating income over the debt service payments.

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As of March 31, 2019, our commercial mortgage and agricultural property loans attributable to PFI excluding the Closed Block division had a weighted-average debt service coverage ratio of 2.38 times and a weighted-average loan-to-value ratio of 55%. As of March 31, 2019, 96% of commercial mortgage and agricultural property loans were fixed rate loans. For those commercial mortgage and agricultural property loans that were originated in 2019, the weighted-average debt service coverage ratio was 2.22 times, and the weighted-average loan-to-value ratio was 66%.

The values utilized in calculating these loan-to-value ratios are developed as part of our periodic review of the commercial mortgage and agricultural property loan portfolio, which includes an internal evaluation of the underlying collateral value. Our periodic review also includes a quality re-rating process, whereby we update the internal quality rating originally assigned at underwriting based on the proprietary quality rating system mentioned above. As discussed below, the internal quality rating is a key input in determining our allowance for credit losses.

For loans with collateral under construction, renovation or lease-up, a stabilized value and projected net operating income are used in the calculation of the loan-to-value and debt service coverage ratios. Our commercial mortgage and agricultural property loan portfolio included $1.0 billion and $0.7 billion of such loans as of March 31, 2019 and December 31, 2018, respectively. All else being equal, these loans are inherently riskier than those collateralized by properties that have already stabilized. As of March 31, 2019, there were no loan-specific reserves related to these loans. In addition, these unstabilized loans are included in the calculation of our portfolio reserve, as discussed below.

The following table sets forth the gross carrying value of our commercial mortgage and agricultural property loans attributable to PFI excluding the Closed Block division by loan-to-value and debt service coverage ratios, as of the date indicated: 

	March 31, 2019
	Debt Service Coverage Ratio
	> 1.2x		1.0x to < 1.2x		< 1.0x		Total Commercial Mortgage and Agricultural Property Loans
Loan-to-Value Ratio	(in millions)
0%-59.99%	$	27,025	$	703	$	165	$	27,893
60%-69.99%	14,986		611		0		15,597
70%-79.99%	6,582		643		29		7,254
80% or greater	161		83		41		285
Total commercial mortgage and agricultural property loans	$	48,754	$	2,040	$	235	$	51,029

The following table sets forth the breakdown of our commercial mortgage and agricultural property loans attributable to PFI excluding the Closed Block division by year of origination, as of the date indicated:

	March 31, 2019
	Gross Carrying Value		% of Total
Year of Origination	($ in millions)
2019	$	2,318	4.5	%
2018	8,972		17.6
2017	7,940		15.6
2016	6,991		13.7
2015	6,726		13.2
2014	5,742		11.2
2013	5,511		10.8
2012 & Prior	6,829		13.4
Total commercial mortgage and agricultural property loans	$	51,029	100.0	%

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Commercial Mortgage and Other Loans Quality

The commercial mortgage and other loans portfolio is reviewed on an ongoing basis. If certain criteria are met, loans are assigned to either of the following “watch list” categories:

(1) “Closely Monitored,” which includes a variety of considerations, such as when loan metrics fall below acceptable levels, the borrower is not cooperative or has requested a material modification, or the portfolio manager has directed a change in category; or

(2) “Not in Good Standing,” which includes loans in default or with a high probability of loss of principal, such as when the loan is in the process of foreclosure or the borrower is in bankruptcy.

Our workout and special servicing professionals manage the loans on the watch list.

We establish an allowance for credit losses to provide for the risk of credit losses inherent in the lending process. The allowance includes loan-specific reserves for loans that are determined to be impaired as a result of our loan review process and a portfolio reserve for probable incurred but not specifically identified losses for loans which are not on the watch list. We define an impaired loan as a loan for which we estimate it is probable that amounts due according to the contractual terms of the loan agreement will not be collected. The loan-specific portion of the allowance for credit losses is based on our assessment as to ultimate collectability of loan principal and interest. An allowance for credit losses for an impaired loan is recorded based on the present value of expected future cash flows discounted at the loan’s effective interest rate, or based on the fair value of the collateral if the loan is collateral dependent. The portfolio reserve for incurred but not specifically identified losses considers the current credit composition of the portfolio based on the internal quality ratings mentioned above. The portfolio reserves are determined using past loan experience, including historical credit migration, loss probability and loss severity factors by property type. These factors are reviewed and updated as appropriate. The allowance for credit losses for commercial mortgage and other loans can increase or decrease from period to period based on these factors.

The following table sets forth the change in allowance for credit losses for our commercial mortgage and other loans portfolio, as of the dates indicated:

	March 31, 2019			December 31, 2018
	(in millions)
Allowance, beginning of year	$	106		$	91
Addition to (release of) allowance for credit losses	(8		)	15
Charge-offs, net of recoveries	0			0
Change in foreign exchange	0			0
Allowance, end of period	$	98		$	106
Loan-specific reserve	$	0		$	11
Portfolio reserve	$	98		$	95

The allowance for credit losses as of March 31, 2019 decreased compared to December 31, 2018, primarily due to the payoff of a loan included in the loan-specific reserve.

Equity Securities

The equity securities attributable to PFI excluding the Closed Block division consist principally of investments in common and preferred stock of publicly-traded companies, as well as mutual fund shares. The following table sets forth the composition of our equity securities portfolio and the associated gross unrealized gains and losses, as of the dates indicated:

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	March 31, 2019								December 31, 2018
	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(in millions)
Mutual funds	$	832	$	156	$	0	$	988	$	769	$	87	$	13	$	843
Other common stocks	2,335		870		70		3,135		2,353		751		118		2,986
Non-redeemable preferred stocks	24		1		5		20		24		0		4		20
Equity securities, at fair value(1)	$	3,191	$	1,027	$	75	$	4,143	$	3,146	$	838	$	135	$	3,849

__________  

(1) Amounts presented exclude investments in private equity and hedge funds and other investments which are reported in “Other invested assets.”

The net change in unrealized gains (losses) from equity securities attributable to PFI excluding Closed Block division still held at period end, recorded within “Other income (loss),” was $249 million and $(77) million during the three months ended March 31, 2019 and 2018, respectively.

Other Invested Assets

The following table sets forth the composition of “Other invested assets” attributable to PFI excluding the Closed Block division, as of the dates indicated:

	March 31, 2019		December 31, 2018
	(in millions)
LPs/LLCs:
Equity method:
Private equity	$	2,385	$	2,318
Hedge funds	979		836
Real estate-related	552		544
Subtotal equity method	3,916		3,698
Fair value:
Private equity	910		938
Hedge funds	1,228		1,256
Real estate-related	46		44
Subtotal fair value	2,184		2,238
Total LPs/LLCs	6,100		5,936
Real estate held through direct ownership(1)	1,794		1,777
Derivative instruments	93		42
Other(2)	655		652
Total other invested assets	$	8,642	$	8,407

__________ 

(1) As of March 31, 2019 and December 31, 2018, real estate held through direct ownership had mortgage debt of $804 million and $776 million, respectively.

(2) Primarily includes leveraged leases and member and activity stock held in the Federal Home Loan Banks of New York and Boston. For additional information regarding our holdings in the Federal Home Loan Banks of New York and Boston, see Note 16 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.

Invested Assets of Other Entities and Operations

“Invested Assets of Other Entities and Operations” presented below includes investments held outside the general account and primarily represents investments associated with our investment management operations and derivative operations. Our derivative operations act on behalf of affiliates primarily to manage interest rate, foreign currency, credit and equity exposures. Assets within our investment management operations that are managed for third-parties and those assets classified as “Separate account assets” on our balance sheet are not included.

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	March 31, 2019		December 31, 2018
	(in millions)
Fixed maturities:
Public, available-for-sale, at fair value(1)	$	471	$	473
Private, available-for-sale, at fair value	1		1
Fixed maturities, trading, at fair value(1)	1,187		1,155
Equity securities, at fair value	633		605
Commercial mortgage and other loans, at book value(2)	506		797
Other invested assets	2,902		2,803
Short-term investments	15		43
Total investments	$	5,715	$	5,877

__________ 

(1) As of both March 31, 2019 and December 31, 2018, balances include investments in collateralized loan obligations with fair value of $408 million.

(2) Book value is generally based on unpaid principal balance, net of any allowance for credit losses, or at fair value, when the fair value option has been elected.

Fixed Maturities, Trading

“Fixed maturities, trading, at fair value” are primarily related to assets associated with consolidated VIEs for which the Company is the investment manager. The assets of the consolidated VIEs are generally offset by liabilities for which the fair value option has been elected. For further information on these consolidated VIEs, see Note 4 to the Unaudited Interim Consolidated Financial Statements.

Commercial Mortgage and Other Loans

Our investment management operations include our commercial mortgage operations, which provide mortgage origination, investment management and servicing for our general account, institutional clients, the Federal Housing Administration and government-sponsored entities such as Fannie Mae and Freddie Mac.

The mortgage loans of our commercial mortgage operations are included in “Commercial mortgage and other loans.” Derivatives and other hedging instruments related to our commercial mortgage operations are primarily included in “Other invested assets.”

Other Invested Assets

“Other invested assets” primarily include assets of our derivative operations used to manage interest rate, foreign currency, credit and equity exposures.

Furthermore, other invested assets include strategic investments made as part of our investment management operations. We make these strategic investments in real estate, as well as fixed income, public equity and real estate securities, including controlling interests. Certain of these investments are made primarily for purposes of co-investment in our managed funds and structured products. Other strategic investments are made with the intention to sell or syndicate to investors, including our general account, or for placement in funds and structured products that we offer and manage (seed investments). As part of our investment management operations, we also make loans to our managed funds that are secured by equity commitments from investors or assets of the funds. Other invested assets also include certain assets in consolidated investment funds where the Company is deemed to exercise control over the funds.

Liquidity and Capital Resources

Overview

Liquidity refers to the ability to generate sufficient cash resources to meet the payment obligations of the Company. Capital refers to the long-term financial resources available to support the operations of our businesses, fund business growth, and provide a cushion to withstand adverse circumstances. Our ability to generate and maintain sufficient liquidity and capital depends on the profitability of our businesses, general economic conditions and our access to the capital markets and the alternate sources of liquidity and capital described herein.

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Effective and prudent liquidity and capital management is a priority across the organization. Management monitors the liquidity of Prudential Financial and its subsidiaries on a daily basis and projects borrowing and capital needs over a multi-year time horizon through our periodic planning process. We believe that cash flows from the sources of funds available to us are sufficient to satisfy the current liquidity requirements of Prudential Financial and its subsidiaries, including under reasonably foreseeable stress scenarios. We have a capital management framework in place that governs the allocation of capital and approval of capital uses. We also employ a Capital Protection Framework to ensure the availability of capital resources to maintain adequate capitalization on a consolidated basis and for our insurance subsidiaries under various stress scenarios.

Our businesses are subject to comprehensive regulation and supervision by domestic and international regulators. These regulations currently include, or may include in the future requirements and limitations (many of which are the subject of ongoing rule-making) relating to capital, leverage, liquidity, stress-testing, overall risk management, credit exposure reporting and credit concentration. For information on regulation and its potential impact, see “Business—Regulation” and “Risk Factors” included in our Annual Report on Form 10-K for the year ended December 31, 2018 and “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Overview—Regulatory Developments” within this Form 10-Q.

During the three months ended March 31, 2019, we took the following significant actions that impacted our liquidity and capital position:

• We repurchased $500 million of shares of our Common Stock and declared aggregate Common Stock dividends of $415 million; and

• We issued $1.0 billion of senior notes to be utilized for general corporate purposes, which may include refinancing portions of our senior notes maturing during 2019.

Capital

The primary components of the Company’s capitalization consist of equity and outstanding capital debt, including junior subordinated debt. As shown in the table below, as of March 31, 2019, the Company had $52.1 billion in capital, all of which was available to support the aggregate capital requirements of its divisions and its Corporate and Other operations. Based on our assessment of these businesses and operations, we believe this level of capital is consistent with our ratings targets.

	March 31, 2019		December 31, 2018
	(in millions)
Equity(1)	$	37,792	$	37,711
Junior subordinated debt (including hybrid securities)	7,568		7,568
Other capital debt	6,777		5,793
Total capital	$	52,137	$	51,072

__________

(1) Amounts attributable to Prudential Financial, excluding AOCI.

We manage PICA, The Prudential Life Insurance Company, Ltd. (“Prudential of Japan”), Gibraltar Life, and other significant insurance subsidiaries to regulatory capital levels consistent with our “AA” ratings targets. We utilize the risk-based capital (“RBC”) ratio as a primary measure of the capital adequacy of our domestic insurance subsidiaries and the solvency margin ratio as a primary measure of the capital adequacy of our Japanese insurance subsidiaries.

The table below presents the RBC ratios of our most significant domestic insurance subsidiaries as of December 31, 2018, the most recent statutory fiscal year-end and RBC reporting date for these subsidiaries.

 

	Ratio(1)
PICA(2)	385	%
Prudential Annuities Life Assurance Corporation (“PALAC”)	511	%
Composite Major U.S. Insurance Subsidiaries(3)	417	%

__________ 

(1) The RBC ratio calculations are intended to assist insurance regulators in measuring an insurer’s solvency and ability to pay future claims. The reporting of RBC measures is not intended for the purpose of ranking any insurance company or for use in connection with any marketing, advertising or promotional activities, but is available to the public.

(2) Includes Prudential Retirement Insurance and Annuity Company (“PRIAC”), Pruco Life Insurance Company (“Pruco Life”), Pruco Life Insurance Company of New Jersey (“PLNJ”), which is a subsidiary of Pruco Life, and Prudential Legacy Insurance Company of New Jersey (“PLIC”).

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(3) Includes PICA and its subsidiaries, as noted above, and PALAC. Composite RBC is not reported to regulators and is based on the summation of total adjusted capital and risk charges for the included companies as determined under statutory accounting and RBC guidance to calculate a composite numerator and denominator, respectively, for purposes of calculating the composite ratio.

In 2018, the NAIC’s RBC framework was revised to reflect the reduction of the corporate tax rate from 35% to 21% under the Tax Act of 2017. The revisions apply to the calculation of our domestic insurance life insurance companies’ RBC ratios, beginning as of December 31, 2018. While there is no impact on our ability to pay claims, these revisions to the RBC framework have had the effect of increasing certain RBC factors, resulting in an overall decrease in insurers’ RBC ratios. 

The table below presents the solvency margin ratios of our most significant international insurance subsidiaries as of December 31, 2018, the most recent date for which this information is available.

	Ratio
Prudential of Japan consolidated(1)	893	%
Gibraltar Life consolidated(2)	918	%

__________ 

(1) Includes Prudential Trust Co., Ltd., a subsidiary of Prudential of Japan.

(2) Includes Prudential Gibraltar Financial Life Insurance Co., Ltd. (“PGFL”), a subsidiary of Gibraltar Life.

All of our domestic and significant international insurance subsidiaries have capital levels that substantially exceed the minimum level required by applicable insurance regulations. Our regulatory capital levels may be affected in the future by changes to the applicable regulations, proposals for which are currently under consideration by both domestic and international insurance regulators. For further information on the calculation of RBC and solvency margin ratios, as well as regulatory minimums, see Note 18 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.

Capital Protection Framework

We employ a Capital Protection Framework (the “Framework”) to ensure that sufficient capital resources are available to maintain adequate capitalization on a consolidated basis for our insurance subsidiaries under various stress scenarios. The Framework incorporates the potential impacts from market-related stresses, including equity markets, real estate, interest rates, credit losses and foreign currency exchange rates. In evaluating these potential impacts, we assess risk holistically at the enterprise level, recognizing that our business mix may produce results that partially offset on a net basis.

The Framework accommodates periodic volatility within ranges that we deem acceptable, while also providing for additional potential sources of capital, including on-balance sheet capital capacity and contingent sources of capital. We believe we currently have access to sufficient resources to maintain adequate capitalization under a range of potential stress scenarios.

Captive Reinsurance Companies

See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Capital—Captive Reinsurance Companies” included in our Annual Report on Form 10-K for the year ended December 31, 2018, for a discussion of our use of captive reinsurance companies. 

Shareholder Distributions

Share Repurchase Program and Shareholder Dividends

In December 2018, our Board of Directors (the “Board”) authorized the Company to repurchase at management’s discretion up to $2.0 billion of its outstanding Common Stock during the period from January 1, 2019 through December 31, 2019. The timing and amount of share repurchases are determined by management based on market conditions and other considerations, including any increased capital needs of our businesses due to, among other things, changes in regulatory capital requirements and opportunities for growth and acquisitions. Repurchases may be executed in the open market, through derivative, accelerated repurchase and other negotiated transactions and through plans designed to comply with Rule 10b5-1(c) under the Securities Exchange Act of 1934.

The following table sets forth information about declarations of Common Stock dividends, as well as repurchases of shares of Prudential Financial’s Common Stock, for the three months ended March 31, 2019.

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	Dividend Amount				Shares Repurchased
Three months ended:	Per Share		Aggregate		Shares	Total Cost
	(in millions, except per share data)
March 31, 2019	$	1.00	$	415	5.4	$	500

Liquidity

The principles of our liquidity management framework are described in an enterprise-wide Liquidity Management Policy that is reviewed and approved by the Board. Liquidity management and stress testing are performed on a legal entity basis as the ability to transfer funds between subsidiaries is limited due in part to regulatory restrictions. Liquidity needs are determined through daily and quarterly cash flow forecasting at the holding company and within our operating subsidiaries. We seek to maintain a minimum balance of highly liquid assets of $1.3 billion to ensure that adequate liquidity is available at Prudential Financial to cover fixed expenses in the event that we experience reduced cash flows from our operating subsidiaries at a time when access to capital markets is also not available. The level of this minimum balance is reviewed and approved annually by the Board.

We seek to mitigate the risk of having limited or no access to financing due to stressed market conditions by generally pre-funding debt in advance of maturity. We mitigate the refinancing risk associated with our debt that is used to fund operating needs by matching the term of debt with the assets financed. To ensure adequate liquidity in stress scenarios, stress testing is performed for our major operating subsidiaries. We seek to further mitigate liquidity risk by maintaining our access to alternative sources of liquidity, as discussed below.

Liquidity of Prudential Financial

The principal sources of funds available to Prudential Financial, the parent holding company, are dividends, returns of capital and loans from subsidiaries, and proceeds from debt issuances and certain stock-based compensation activity. These sources of funds may be supplemented by Prudential Financial’s access to the capital markets as well as the “—Alternative Sources of Liquidity” described below.

The primary uses of funds at Prudential Financial include servicing debt, making capital contributions and loans to subsidiaries, paying declared shareholder dividends and repurchasing outstanding shares of Common Stock executed under authority from the Board.

As of March 31, 2019, Prudential Financial had highly liquid assets with a carrying value totaling $6,411 million, an increase of $212 million from December 31, 2018. Highly liquid assets predominantly include cash, short-term investments, U.S. Treasury securities, obligations of other U.S. government authorities and agencies, and/or foreign government bonds. We maintain an intercompany liquidity account that is designed to optimize the use of cash by facilitating the lending and borrowing of funds between Prudential Financial and its subsidiaries on a daily basis. Excluding the balance of this intercompany liquidity account, Prudential Financial had highly liquid assets of $5,545 million as of March 31, 2019, a decrease of $3 million from December 31, 2018.

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The following table sets forth Prudential Financial’s principal sources and uses of highly liquid assets, excluding net borrowings from our intercompany liquidity account, for the period indicated.

	Three Months Ended March 31, 2019
	(in millions)
Sources:
Proceeds from the issuance of debt	$	989
Dividends and/or returns of capital from subsidiaries(1)	479
Proceeds from stock-based compensation and exercise of stock options	152
Net income tax receipts	17
Total sources	1,637
Uses:
Share repurchases(2)	484
Common stock dividends(3)	420
Capital contributions to subsidiaries(4)	268
Interest paid on external debt	165
Net payments under intercompany loans agreements(5)	81
Interest expense paid to subsidiaries on intercompany agreements, net of interest income	10
Other, net	212
Total uses	1,640
Net increase (decrease) in highly liquid assets	$	(3	)

__________ 

(1) Includes dividends and/or returns of capital of $245 million from PALAC, $133 million from PGIM subsidiaries, $61 million from international insurance subsidiaries and $40 million from Prudential Annuities Holding Company.

(2) Excludes $16 million related to trades that settled in April 2019.

(3) Includes cash payments made on dividends declared in prior periods.

(4) Reflects capital contributions of $200 million to PICA and $68 million to PGIM subsidiaries.

(5) Includes net payments of $79 million to PGIM subsidiaries and $2 million to other subsidiaries.

Dividends and Returns of Capital from Subsidiaries

Domestic insurance subsidiaries. During the first three months of 2019, Prudential Financial received dividends of $245 million from PALAC and $40 million from Prudential Annuities Holding Company.

International insurance subsidiaries. During the first three months of 2019, Prudential Financial received dividends of $61 million from its international insurance subsidiaries. In addition to paying common stock dividends, our international insurance operations may return capital to Prudential Financial through or facilitated by other means, such as the repayment of preferred stock obligations held by Prudential Financial or other affiliates, affiliated lending, affiliated derivatives and reinsurance with U.S.- and Bermuda-based affiliates. Effective January 1, 2019, certain of our international insurance subsidiaries entered into a reinsurance agreement with Gibraltar Re, our Bermuda-based reinsurance affiliate, to reinsure the mortality and morbidity risk associated with a portion of the in-force contracts for certain products.

Other subsidiaries. During the first three months of 2019, Prudential Financial received dividends of $133 million from PGIM subsidiaries.

Restriction on dividends and returns of capital from subsidiaries. Our insurance companies are subject to limitations on the payment of dividends and other transfers of funds to Prudential Financial and other affiliates under applicable insurance law and regulation. Also, more generally, the payment of dividends by any of our subsidiaries is subject to declaration by their Board of Directors and can be affected by market conditions and other factors.

With respect to our domestic insurance subsidiaries, PICA is permitted to pay ordinary dividends based on calculations specified under New Jersey insurance law, subject to prior notification to the New Jersey Department of Banking and Insurance (“NJDOBI”). Any distributions above this amount in any twelve-month period are considered to be “extraordinary” dividends, and the approval of the NJDOBI is required prior to payment. The laws regulating dividends of the states where our other domestic insurance companies are domiciled are similar, but not identical, to New Jersey’s.

Capital redeployment from our international insurance subsidiaries is subject to local regulatory requirements in the international jurisdictions in which they operate. Our most significant international insurance subsidiaries, Prudential of Japan and Gibraltar Life, are permitted to pay common stock dividends based on calculations specified by Japanese insurance law, subject

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to prior notification to the FSA. Dividends in excess of these amounts and other forms of capital distribution require the prior approval of the FSA.

The ability of our PGIM subsidiaries and the majority of our other operating subsidiaries to pay dividends is largely unrestricted from a regulatory standpoint.

See Note 18 to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2018, for details on specific dividend restrictions.

Liquidity of Insurance Subsidiaries

We manage the liquidity of our insurance operations to ensure stable, reliable and cost-effective sources of cash flows to meet all of our obligations. Liquidity within each of our insurance subsidiaries is provided by a variety of sources, including portfolios of liquid assets. The investment portfolios of our subsidiaries are integral to the overall liquidity of our insurance operations. We segment our investment portfolios and employ an asset/liability management approach specific to the requirements of each of our product lines. This enhances the discipline applied in managing the liquidity, as well as the interest rate and credit risk profiles, of each portfolio in a manner consistent with the unique characteristics of the product liabilities.

Liquidity is measured against internally-developed benchmarks that take into account the characteristics of both the asset portfolio and the liabilities that they support. We consider attributes of the various categories of liquid assets (for example, type of asset and credit quality) in calculating internal liquidity measures to evaluate our insurance operations’ liquidity under various stress scenarios, including company-specific and market-wide events. We continue to believe that cash generated by ongoing operations and the liquidity profile of our assets provide sufficient liquidity under reasonably foreseeable stress scenarios for each of our insurance subsidiaries.

The principal sources of liquidity for our insurance subsidiaries are premiums, investment and fee income, and investment maturities and sales associated with our insurance and annuity operations, as well as internal and external borrowings. The principal uses of that liquidity include benefits, claims and dividends paid to policyholders, and payments to policyholders and contractholders in connection with surrenders, withdrawals and net policy loan activity. Other uses of liquidity may include commissions, general and administrative expenses, purchases of investments, the payment of dividends to the parent holding company, hedging and reinsurance activity and payments in connection with financing activities.

The following table sets forth the fair value of certain of our domestic insurance operations’ portfolio of liquid assets, as of the dates indicated.

	March 31, 2019
	Prudential Insurance		PLIC		PRIAC		PALAC		Pruco Life		Total		December 31, 2018
	(in billions)
Cash and short-term investments	$	5.2	$	1.1	$	0.5	$	2.5	$	0.4	$	9.7	$	11.1
Fixed maturity investments(1):
High or highest quality	114.1		35.7		19.4		11.6		5.3		186.1		179.2
Other than high or highest quality	6.8		2.5		1.4		0.5		0.4		11.6		11.3
Subtotal	120.9		38.2		20.8		12.1		5.7		197.7		190.5
Public equity securities, at fair value	0.2		2.0		0.0		0.0		0.0		2.2		1.9
Total	$	126.3	$	41.3	$	21.3	$	14.6	$	6.1	$	209.6	$	203.5

__________ 

(1) Excludes fixed maturities designated as held-to-maturity. Credit quality is based on NAIC or equivalent rating.

The following table sets forth the fair value of our international insurance operations’ portfolio of liquid assets, as of the dates indicated. 

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	March 31, 2019
	Prudential of Japan		Gibraltar Life(1)		All Other(2)		Total		December 31, 2018
	(in billions)
Cash and short-term investments	$	1.0	$	3.0	$	1.4	$	5.4	$	4.1
Fixed maturity investments(3):
High or highest quality(4)	41.0		90.6		21.3		152.9		149.1
Other than high or highest quality	0.8		3.3		1.9		6.0		6.2
Subtotal	41.8		93.9		23.2		158.9		155.3
Public equity securities	1.8		1.7		0.7		4.2		4.0
Total	$	44.6	$	98.6	$	25.3	$	168.5	$	163.4

__________ 

(1) Includes PGFL.

(2) Represents our international insurance operations, excluding Japan.

(3) Excludes fixed maturities designated as held-to-maturity. Credit quality is based on NAIC or equivalent rating.

(4) As of March 31, 2019, $115.6 billion, or 76%, were invested in government or government agency bonds.

Liquidity associated with other activities

Hedging activities associated with Individual Annuities

For the portion of our Individual Annuities’ ALM strategy executed through hedging, as well as the capital hedge program, we enter into a range of exchange-traded, cleared and other OTC equity and interest rate derivatives in order to hedge certain capital market risks related to more severe market conditions. For a full discussion of our Individual Annuities’ risk management strategy, see “—Results of Operations by Segment—U.S. Individual Solutions Division—Individual Annuities.” This portion of our Individual Annuities’ ALM strategy and capital hedge program requires access to liquidity to meet payment obligations relating to these derivatives, such as payments for periodic settlements, purchases, maturities and terminations. These liquidity needs can vary materially due to, among other items, changes in interest rates, equity markets, mortality and policyholder behavior.

The hedging portion of our Individual Annuities’ ALM strategy and capital hedge program may also result in derivative-related collateral postings to (when we are in a net pay position) or from (when we are in a net receive position) counterparties. The net collateral position depends on changes in interest rates and equity markets related to the amount of the exposures hedged. Depending on market conditions, the collateral posting requirements can result in material liquidity needs when we are in a net pay position. As of March 31, 2019, the derivatives comprising the hedging portion of our ALM strategy and capital hedge program were in a net receive position of $2.6 billion compared to a net receive position of $2.9 billion as of December 31, 2018. The change in collateral position was primarily driven by a net negative impact from increases in equity markets and declines in interest rates.

Foreign exchange hedging activities

We employ various hedging strategies to manage potential exposure to foreign currency exchange rate movements, particularly those associated with the yen. Our overall yen hedging strategy calibrates the hedge level to preserve the relative contribution of our yen-based business to the Company’s overall return on equity on a leverage neutral basis. The hedging strategy includes two primary components:

Income Hedges—We hedge a portion of our prospective yen-based earnings streams by entering into external forward currency derivative contracts that effectively fix the currency exchange rates for that portion of earnings, thereby reducing volatility from foreign currency exchange rate movements. As of March 31, 2019, we have hedged 100%, 87% and 45% of expected yen-based earnings for 2019, 2020 and 2021, respectively.

Equity Hedges—We hold both internal and external hedges primarily to hedge our U.S. dollar-equivalent equity. These hedges also mitigate volatility in the solvency margins of yen-based subsidiaries resulting from changes in the market value of their U.S. dollar-denominated investments hedging our U.S. dollar-equivalent equity attributable to changes in the yen-U.S. dollar exchange rate.

For additional information on our hedging strategy, see “—Results of Operations—Impact of Foreign Currency Exchange Rates.”

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Cash settlements from these hedging activities result in cash flows between subsidiaries of Prudential Financial and either international-based subsidiaries or external parties. The cash flows are dependent on changes in foreign currency exchange rates and the notional amount of the exposures hedged. For example, a significant yen depreciation over an extended period of time could result in net cash inflows, while a significant yen appreciation could result in net cash outflows. The following tables set forth information about net cash settlements and the net asset or liability resulting from these hedging activities related to the yen and other currencies for the and as of periods indicated.

	Three Months Ended March 31,
Cash Settlements: Received (Paid)	2019		2018
	(in millions)
Income Hedges (External)(1)	$	12	$	(23	)
Equity Hedges:
Internal(2)	92		17
External(3)	37		108
Total Equity Hedges	129		125
Total Cash Settlements	$	141	$	102
	March 31,		December 31,
Assets (Liabilities):	2019		2018
	(in millions)
Income Hedges (External)(4)	$	84	$	67
Equity Hedges:
Internal(2)	618		436
External(5)	94		78
Total Equity Hedges(6)	712		514
Total Assets (Liabilities)	$	796	$	581

__________

(1) Includes non-yen related cash settlements of $5.5 million, primarily denominated in Australian dollar, Chilean peso and Brazilian real and $(12) million, primarily denominated in Korean won, Australian dollar, and Brazilian real, for the three months ended March 31, 2019 and 2018, respectively.

(2) Represents internal transactions between international-based and U.S.-based entities. Amounts noted are from the U.S.-based entities’ perspectives.

(3) Includes non-yen related cash settlements of $1 million, denominated in Korean won for the three months ended March 31, 2019.

(4) Includes non-yen related assets of $44 million, primarily denominated in Australian dollar, Korean won and Brazilian real, and liabilities of $(62) million, primarily denominated in Korean won and Brazilian real, as of March 31, 2019 and December 31, 2018, respectively.

(5) Includes non-yen related assets of $7 million, denominated in Korean won, and liabilities of $(2) million, denominated in Korean won, as of March 31, 2019 and December 31, 2018, respectively.

(6) As of March 31, 2019, approximately $401 million, $342 million and $(31) million of the net market values are scheduled to settle in 2019, 2020 and thereafter, respectively. The net market value of the assets (liabilities) will vary with changing market conditions to the extent there are no corresponding offsetting positions.

PGIM operations

The principal sources of liquidity for our fee-based PGIM businesses include asset management fees and commercial mortgage origination and servicing fees. The principal uses of liquidity include general and administrative expenses and distributions of dividends and returns of capital to Prudential Financial. The primary liquidity risks for our fee-based PGIM businesses relate to their profitability, which is impacted by market conditions and our investment management performance. We believe the cash flows from our fee-based PGIM businesses are adequate to satisfy the current liquidity requirements of these operations, as well as requirements that could arise under reasonably foreseeable stress scenarios, which are monitored through the use of internal measures.

The principal sources of liquidity for our strategic investments held in our PGIM businesses are cash flows from investments, the ability to liquidate investments, and available borrowing lines from internal sources, including Prudential Financial and Prudential Funding, LLC (“Prudential Funding”), a wholly-owned subsidiary of PICA. The principal use of liquidity for our strategic investments includes the payment of interest expense from the internal borrowings used to fund those investments. The primary liquidity risks include the inability to sell assets in a timely manner, declines in the value of assets and credit defaults. There have been no material changes to the liquidity position of our PGIM operations since December 31, 2018.

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Alternative Sources of Liquidity

In addition to asset-based financing as discussed below, Prudential Financial and certain subsidiaries have access to other sources of liquidity, including syndicated, unsecured committed credit facilities, membership in the Federal Home Loan Banks, commercial paper programs and a put option agreement. For more information on these sources of liquidity, see Note 10 to the Unaudited Interim Consolidated Financial Statements contained herein and Note 16 to the Company’s Consolidated Financial Statements included in the Annual Report on Form 10-K for the year ended December 31, 2018.

Asset-based Financing

We conduct asset-based or secured financing within our insurance and other subsidiaries, including transactions such as securities lending, repurchase agreements and mortgage dollar rolls, to earn spread income, to borrow funds, or to facilitate trading activity. These programs are primarily driven by portfolio holdings of securities that are lendable based on counterparty demand for these securities in the marketplace. The collateral received in connection with these programs is primarily used to purchase securities in the short-term spread portfolios of our insurance entities. Investments held in the short-term spread portfolios include cash and cash equivalents, short-term investments (primarily corporate bonds), mortgage loans and fixed maturities (primarily collateralized loan obligations and other structured securities), with a weighted average life at time of purchase by the short-term portfolios of four years or less. Floating rate assets comprise the majority of our short-term spread portfolio. These short-term portfolios are subject to specific investment policy statements, which among other things, do not allow for significant asset/liability interest rate duration mismatch.

The following table sets forth our liabilities under asset-based or secured financing programs as of the dates indicated.

	March 31, 2019						December 31, 2018
	PFI Excluding Closed Block Division		Closed Block Division		Consolidated		PFI Excluding Closed Block Division		Closed Block Division		Consolidated
	($ in millions)
Securities sold under agreements to repurchase	$	6,931	$	2,942	$	9,873	$	6,982	$	2,968	$	9,950
Cash collateral for loaned securities	3,159		934		4,093		3,063		866		3,929
Securities sold but not yet purchased	4		0		4		9		0		9
Total(1)	$	10,094	$	3,876	$	13,970	$	10,054	$	3,834	$	13,888
Portion of above securities that may be returned to the Company overnight requiring immediate return of the cash collateral(2)	$	10,090	$	3,876	$	13,966	$	9,875	$	3,834	$	13,709
Weighted average maturity, in days(2)(3)	0		0				10		0

__________ 

(1) The daily weighted average outstanding balance for the three months ended March 31, 2019 was $10,550 million for PFI excluding the Closed Block division, and $4,114 million for the Closed Block division.

(2) Prior period amounts have been updated to conform to current period presentation.

(3) Excludes securities that may be returned to the Company overnight.

As of March 31, 2019, our domestic insurance entities had assets eligible for the asset-based or secured financing programs of $118.3 billion, of which $14.0 billion were on loan. Taking into account market conditions and outstanding loan balances as of March 31, 2019, we believe approximately $16.5 billion of the remaining eligible assets are readily lendable, including approximately $11.9 billion relating to PFI excluding the Closed Block division, of which $4.0 billion relates to certain separate accounts and may only be used for financing activities related to those accounts, and the remaining $4.6 billion relating to the Closed Block division.

Financing Activities

As of March 31, 2019, total short-term and long-term debt of the Company on a consolidated basis was $20.9 billion, an increase of $1 billion from December 31, 2018. The following table sets forth total consolidated borrowings of the Company as of the dates indicated. We may, from time to time, seek to redeem or repurchase our outstanding debt securities through open market purchases, individually negotiated transactions or otherwise. Any such actions will depend on prevailing market conditions, our liquidity position and other factors.

122

	March 31, 2019						December 31, 2018
Borrowings:	Prudential Financial		Subsidiaries		Consolidated		Prudential Financial		Subsidiaries		Consolidated
	(in millions)
General obligation short-term debt:
Commercial paper	$	25	$	714	$	739	$	15	$	727	$	742
Current portion of long-term debt	1,100		499		1,599		1,100		499		1,599
Subtotal	1,125		1,213		2,338		1,115		1,226		2,341
General obligation long-term debt:
Senior debt	9,616		173		9,789		8,630		173		8,803
Junior subordinated debt	7,512		56		7,568		7,511		57		7,568
Surplus notes(1)	0		342		342		0		341		341
Subtotal	17,128		571		17,699		16,141		571		16,712
Total general obligations	18,253		1,784		20,037		17,256		1,797		19,053
Limited and non-recourse borrowings(2):
Short-term debt	0		70		70		0		53		53
Current portion of long-term debt	0		141		141		0		57		57
Long-term debt	0		610		610		0		666		666
Total limited and non-recourse borrowings	0		821		821		0		776		776
Total borrowings	$	18,253	$	2,605	$	20,858	$	17,256	$	2,573	$	19,829

__________ 

(1) Amounts are net of assets under set-off arrangements of $9,095 million as of both March 31, 2019 and December 31, 2018.

(2) Limited and non-recourse borrowing represents mortgage debt of our subsidiaries that has recourse only to real estate investment property of $804 million and $776 million as of March 31, 2019 and December 31, 2018, respectively, and $17 million and $0 from a revolving line of credit as of March 31, 2019 and December 31, 2018, respectively.

As of March 31, 2019, and December 31, 2018, we were in compliance with all debt covenants related to the borrowings in the table above. For further information on our short- and long-term debt obligations, see Note 10 to the Unaudited Interim Consolidated Financial Statements contained herein and Note 16 to the Company’s Consolidated Financial Statements included in the Annual Report on Form 10-K for the year ended December 31, 2018.

Prudential Financial’s borrowings increased $997 million from December 31, 2018, driven by the issuance, net of related costs, of $989 million of senior debt and $10 million increase in commercial paper outstanding. Borrowings of our subsidiaries increased $32 million from December 31, 2018, driven by a $28 million increase in mortgage debt and a $17 million increase in short-term debt, partially offset by a $13 million decrease in commercial paper outstanding.

Term and Universal Life Reserve Financing

We use captive reinsurance subsidiaries to finance the portion of the statutory reserves required to be held by our domestic life insurance companies under Regulation XXX and Guideline AXXX that we consider to be non-economic. The financing arrangements involve the reinsurance of term and universal life business to our captive reinsurers and the issuance of surplus notes by those captives that are treated as capital for statutory purposes. These surplus notes are subordinated to policyholder obligations, and the payment of principal and interest on the surplus notes can only be made with prior insurance regulatory approval.

We have entered into agreements with external counterparties providing for the issuance of surplus notes by our captive reinsurers in return for the receipt of credit-linked notes (“Credit-Linked Note Structures”). As of March 31, 2019, we had Credit-Linked Note Structures with an aggregate issuance capacity of $13,700 million, of which $11,395 million was outstanding, as compared to an aggregate issuance capacity of $13,750 million, of which $11,445 million was outstanding, as of December 31, 2018. Under the agreements, the captive receives in exchange for the surplus notes one or more credit-linked notes issued by a special-purpose affiliate of the Company with an aggregate principal amount equal to the surplus notes outstanding. The captive holds the credit-linked notes as assets supporting Regulation XXX or Guideline AXXX non-economic reserves, as applicable. For more information on our Credit-Linked Note Structures, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Financing Activities” in our Annual Report on Form 10-K for the year ended December 31, 2018.

123

The following table summarizes our Credit-Linked Note Structures, which are reported on a net basis, as of March 31, 2019.

	Surplus Notes		Outstanding
Credit-Linked Note Structures:	Original Issue Dates	Maturity Dates	as of March 31, 2019			Facility Size
	($ in millions)
XXX	2011-2014	2021-2024	$	1,750	(1)	$	1,750
AXXX	2013	2033	3,129			3,500
XXX	2014-2018	2021-2034	2,300		(2)	2,450
XXX	2014-2017	2024,2037	2,200			2,400
AXXX	2017	2037	1,466			2,000
XXX	2018	2038	550			1,600
Total Credit-Linked Note Structures			$	11,395		$	13,700

__________

(1) Prudential Financial has agreed to reimburse any amounts paid under the credit-linked notes issued in this structure.

(2) The $2.3 billion of surplus notes represents an intercompany transaction that eliminates upon consolidation. Prudential Financial has agreed to reimburse amounts paid under credit-linked notes issued in this structure up to $1.0 billion.

As of March 31, 2019, we also had outstanding an aggregate of $2.3 billion of debt issued for the purpose of financing Regulation XXX and Guideline AXXX non-economic reserves, of which approximately $0.6 billion relates to Regulation XXX reserves and approximately $1.7 billion relates to Guideline AXXX reserves. In addition, as of March 31, 2019, for purposes of financing Guideline AXXX reserves, one of our captives had approximately $4.0 billion of surplus notes outstanding that were issued to affiliates.

The Company has introduced updated versions of several products in its individual life product portfolio in conjunction with the requirement to adopt principle-based reserving by January 1, 2020. Notably, the Company adopted principle-based reserving for its guaranteed universal life products and introduced updated versions of these products in 2017. The guaranteed universal life updated products support the principle-based statutory reserve level without the need for financing through captive reinsurance. The Company is continuing to assess the impact of principle-based reserving on projected statutory reserve levels and product pricing for its remaining portfolio of individual life product offerings.

Ratings

See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Ratings” in our Annual Report on Form 10-K for the year ended December 31, 2018, for a discussion of our financial strength and credit ratings and their impact on our business. There have been no significant changes or actions in our ratings or rating outlooks since the filing of our Annual Report on Form 10-K for the year ended December 31, 2018.

Off-Balance Sheet Arrangements

Guarantees, Other Contingencies and Other Contingent Commitments

In the course of our business, we provide certain guarantees and indemnities to third-parties pursuant to which we may be contingently required to make payments in the future. We also have other commitments, some of which are contingent upon events or circumstances not under our control, including those at the discretion of our counterparties. See “—Commitments and Guarantees” within Note 15 to the Unaudited Interim Consolidated Financial Statements for additional information. For further discussion of certain of these commitments that relate to our separate accounts, also see “—Liquidity—Liquidity associated with other activities—PGIM operations.”

Other Off-Balance Sheet Arrangements

In November 2013, we entered into a put option agreement with a Delaware trust that gives Prudential Financial the right, at any time over a ten-year period, to issue up to $1.5 billion of senior notes to the trust in return for principal and interest strips of U.S. Treasury securities that are held by the trust. In 2014, Prudential Financial entered into financing transactions, pursuant to which it issued $500 million of limited recourse notes and, in return, obtained $500 million of asset-backed notes from a Delaware master trust and ultimately contributed the asset-backed notes to its subsidiary, PRIAC. As of March 31, 2019, no principal payments have been received or are currently due on the asset-backed notes and, as a result, there was no payment obligation under the limited recourse notes. Accordingly, none of the notes are reflected in the Company’s Unaudited Interim Consolidated Financial Statements as of that date.

124

Other than as described above, we do not have retained or contingent interests in assets transferred to unconsolidated entities, or variable interests in unconsolidated entities or other similar transactions, arrangements or relationships that serve as credit, liquidity or market risk support, that we believe are reasonably likely to have a material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or our access to or requirements for capital resources. In addition, other than the agreements referred to above, we do not have relationships with any unconsolidated entities that are contractually limited to narrow activities that facilitate our transfer of or access to associated assets.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk is the risk of fluctuations in the value of financial instruments as a result of absolute or relative changes in interest rates, foreign currency exchange rates, equity prices or commodity prices. To varying degrees, our products and services, and the investment activities supporting them, generate exposure to market risk. The market risk incurred, and our strategies for managing this risk, vary by product. As of March 31, 2019, there have been no material changes in our economic exposure to market risk from December 31, 2018, a description of which may be found in our Annual Report on Form 10-K, for the year ended December 31, 2018, Item 7A, “Quantitative and Qualitative Disclosures about Market Risk,” filed with the Securities and Exchange Commission. See Item 1A, “Risk Factors” included in the Annual Report on Form 10-K for the year ended December 31, 2018, for a discussion of how difficult conditions in the financial markets and the economy generally may materially adversely affect our business and results of our operations.

ITEM 4. CONTROLS AND PROCEDURES

In order to ensure that the information we must disclose in our filings with the SEC is recorded, processed, summarized, and reported on a timely basis, the Company’s management, including our Chief Executive Officer and Chief Financial Officer, have reviewed and evaluated the effectiveness of our disclosure controls and procedures, as defined in Exchange Act Rule 13a-15(e), as of March 31, 2019. Based on such evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that, as of March 31, 2019, our disclosure controls and procedures were effective. No change in our internal control over financial reporting, as defined in Exchange Act Rule 13a-15(f), occurred during the quarter ended March 31, 2019, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

125

PART II—OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

See Note 15 to the Unaudited Interim Consolidated Financial Statements under “—Litigation and Regulatory Matters” for a description of certain pending litigation and regulatory matters affecting us, and certain risks to our businesses presented by such matters, which is incorporated herein by reference.

ITEM 1A. RISK FACTORS

You should carefully consider the risks described under “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2018. These risks could materially affect our business, results of operations or financial condition, cause the trading price of our Common Stock to decline materially or cause our actual results to differ materially from those expected or those expressed in any forward-looking statements made by, or on behalf of, the Company. These risks are not exclusive, and additional risks to which we are subject include, but are not limited to, the factors mentioned under “Forward-Looking Statements” and the risks of our businesses described elsewhere in this Quarterly Report on Form 10-Q.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

(c) The following table provides information about purchases by the Company during the three months ended March 31, 2019, of its Common Stock:

Period	Total Number of Shares Purchased(1)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Program(2)	Approximate Dollar Value of Shares that May Yet Be Purchased under the Program(2)
January 1, 2019 through January 31, 2019	1,883,842	$	88.57	1,881,610
February 1, 2019 through February 28, 2019	2,526,741	$	92.99	1,780,019
March 1, 2019 through March 31, 2019	1,771,474	$	94.29	1,767,644
Total	6,182,057	$	92.02	5,429,273	$	1,500,000,000

__________

(1) Includes shares of Common Stock withheld from participants for income tax withholding purposes whose shares of restricted stock units vested during the period. Such restricted stock units were originally issued to participants pursuant to the Prudential Financial Inc. Omnibus Incentive Plan.

(2) In December 2018, Prudential Financial’s Board of Directors authorized the Company to repurchase, at management’s discretion, up to $2.0 billion of its outstanding Common Stock during the period from January 1, 2019 through December 31, 2019.

126

ITEM 6. EXHIBITS

EXHIBIT INDEX

10.1	Form of Terms and Conditions relating to awards to executive officers in 2019 under the Prudential Financial, Inc. 2016 Omnibus Incentive Plan of restricted stock units, stock options, performance shares, performance units and book value units under the 2019 Long-Term Incentive Program. Incorporated by reference to Exhibit 10.2 to the Registrant’s February 12, 2019 Current Report on Form 8-K.
10.2	Annual Incentive Payment Criteria for Executive Officers (Effective for awards in 2019 in respect of 2018 and for subsequent years). Incorporated by reference to Exhibit 10.1 to the Registrant’s February 12, 2019 Current Report on Form 8-K.
31.1	Section 302 Certification of the Chief Executive Officer.
31.2	Section 302 Certification of the Chief Financial Officer.
32.1	Section 906 Certification of the Chief Executive Officer.
32.2	Section 906 Certification of the Chief Financial Officer.

101.INS - XBRL	Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH - XBRL	Taxonomy Extension Schema Document.
101.CAL - XBRL	Taxonomy Extension Calculation Linkbase Document.
101.LAB - XBRL	Taxonomy Extension Label Linkbase Document.
101.PRE - XBRL	Taxonomy Extension Presentation Linkbase Document.
101.DEF - XBRL	Taxonomy Extension Definition Linkbase Document.

Prudential Financial, Inc. will furnish upon request a copy of any exhibit listed above upon the payment of a reasonable fee covering the expense of furnishing the copy. Requests should be directed to:

Shareholder Services

Prudential Financial, Inc.

751 Broad Street, 21st Floor

Newark, New Jersey 07102

127

GLOSSARY

Throughout this Quarterly Report on Form 10-Q, the Company may use certain abbreviations, acronyms and terms which are defined below.

Prudential Entities
Company	Prudential Financial, Inc. and its subsidiaries	Pruco Life	Pruco Life Insurance Company
PALAC	Prudential Annuities Life Assurance Corporation	Prudential	Prudential Financial, Inc. and its subsidiaries
PFI	Prudential Financial, Inc. and its subsidiaries	Prudential Financial	Prudential Financial, Inc.
PGFL	Prudential Gibraltar Financial Life Insurance Co., Ltd.	Prudential Funding	Prudential Funding, LLC
PLIC	Prudential Legacy Insurance Company of New Jersey	Prudential Insurance/PICA	The Prudential Insurance Company of America
PLNJ	Pruco Life Insurance Company of New Jersey	Prudential of Japan	The Prudential Life Insurance Company, Ltd.
POA	Prudential of Argentina	Registrant	Prudential Financial, Inc.
PRIAC	Prudential Retirement Insurance and Annuity Company

Defined Terms
Board	Prudential Financial's Board of Directors	Other Postretirement Benefits	Certain health care and life insurance benefits provided by the Company for retired employees, their beneficiaries and covered dependents
Closed Block	Certain in force traditional domestic participating insurance and annuity products and corresponding assets that are used for the payment of benefits and policyholders' dividends on these products	Pension Benefits	Funded and non-funded non-contributory defined benefit pension plans which cover substantially all of the Company’s employees
Exchange Act	The Securities Exchange Act of 1934	PGIM	The Global Investment Management Businesses of Prudential Financial, Inc.
Fitch	Fitch Ratings Inc.	Regulation XXX	Valuation of Life Insurance Policies Model Regulation
Framework	Prudential's capital protection framework	S&P	Standard & Poor's Rating Services
Guideline AXXX	The Application of the Valuation of Life Insurance Policies Model Regulation	Tax Act of 2017	The United States Tax Cuts and Jobs Act of 2017
Moody's	Moody's Investor Service, Inc.	U.S. GAAP	Generally accepted accounting principles in the United States of America
Morningstar	Morningstar, Inc.

128

Acronyms
ALM	Asset Liability Management	LPs/LLCs	Limited Partnerships and Limited Liability Companies
AOCI	Accumulated Other Comprehensive Income (Loss)	MD&A	Management's Discussion and Analysis of Financial Condition and Results of Operations
ASU	Accounting Standards Update	NAIC	National Association of Insurance Commissioners
bps	Basis Points	NAV	Net Asset Value
DAC	Deferred Policy Acquisition Costs	NJDOBI	New Jersey Department of Banking and Insurance
DOL	U.S. Department of Labor	NPR	Non-Performance Risk
DSI	Deferred Sales Inducements	OCI	Other Comprehensive Income (Loss)
EBITDA	Earnings Before Interest, Taxes, Depreciation and Amortization	OTC	Over-The-Counter
FASB	Financial Accounting Standards Board	OTTI	Other-Than-Temporary Impairments
FSA	Financial Services Agency (an agency of the Japanese government)	RBC	Risk-Based Capital
GICs	Guaranteed Investment Contracts	SEC	Securities and Exchange Commission
GMAB	Guaranteed Minimum Accumulation Benefits	SVO	Securities Valuation Office
GMDB	Guaranteed Minimum Death Benefits	U.S.	The United States of America
GMIWB	Guaranteed Minimum Income and Withdrawal Benefits	USD	U.S. Dollar
GMWB	Guaranteed Minimum Withdrawal Benefits	VIEs	Variable Interest Entities
HDI	Highest Daily Lifetime Income	VOBA	Value of Business Acquired
LIBOR	London Inter-Bank Offered Rate

129

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Prudential Financial, Inc.
By:	/S/    KENNETH Y. TANJI
	Kenneth Y. Tanji Executive Vice President and Chief Financial Officer (Authorized signatory and principal financial officer)

Date: May 3, 2019

130

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, Charles F. Lowrey, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Prudential Financial, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 3, 2019	/s/ Charles F. Lowrey
	Charles F. Lowrey Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, Kenneth Y. Tanji, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Prudential Financial, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 3, 2019	/s/ Kenneth Y. Tanji
	Kenneth Y. Tanji Chief Financial Officer

EX-32.1

Exhibit 32.1

Certification

Pursuant to 18 U.S.C. § 1350, I, Charles F. Lowrey, Chief Executive Officer of Prudential Financial, Inc. (the “Company”), hereby certify that the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2019 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 3, 2019		/s/ Charles F. Lowrey
	Name:	Charles F. Lowrey
	Title:	Chief Executive Officer

The foregoing certification is being furnished solely pursuant to 18 U.S.C. § 1350 and is not being filed as part of the Report or as a separate disclosure document.

EX-32.2

Exhibit 32.2

Certification

Pursuant to 18 U.S.C. § 1350, I, Kenneth Y. Tanji, Chief Financial Officer of Prudential Financial, Inc. (the “Company”), hereby certify that the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2019 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 3, 2019		/s/ Kenneth Y. Tanji
	Name:	Kenneth Y. Tanji
	Title:	Chief Financial Officer

The foregoing certification is being furnished solely pursuant to 18 U.S.C. § 1350 and is not being filed as part of the Report or as a separate disclosure document.

XML

Document and Entity Information - shares shares in Millions	3 Months Ended
	Mar. 31, 2019	Apr. 30, 2019
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2019
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q1
Trading Symbol	PRU
Entity Registrant Name	PRUDENTIAL FINANCIAL INC
Entity Central Index Key	0001137774
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Emerging Growth Company	false
Entity Small Business	false
Entity Common Stock, Shares Outstanding		406

XML

Unaudited Interim Consolidated Statements of Financial Position - USD ($) $ in Millions		Mar. 31, 2019	Dec. 31, 2018
ASSETS
Fixed maturities, available-for-sale, at fair value (amortized cost: 2019-$333,648; 2018-$331,745)	[1]	$ 365,928	$ 353,656
Fixed maturities, held-to-maturity, at amortized cost (fair value: 2019-$2,365; 2018-$2,372)	[1]	1,982	2,013
Fixed maturities, trading, at fair value (amortized cost: 2019-$3,512; 2018-$3,392)	[1]	3,435	3,243
Assets supporting experience-rated contractholder liabilities, at fair value	[1]	21,668	21,254
Equity securities, at fair value (cost: 2019-$5,230; 2018-$5,219)	[1]	6,778	6,238
Commercial mortgage and other loans	[1]	60,875	59,830
Policy loans		11,986	12,016
Other invested assets (includes $5,453 and $5,524 measured at fair value at March 31, 2019 and December 31, 2018, respectively)	[1]	14,840	14,526
Short-term Investments		6,911	6,469
Total investments		494,403	479,245
Cash and cash equivalents	[1]	14,699	15,353
Accrued investment income	[1]	3,233	3,318
Deferred policy acquisition costs		19,978	20,058
Value of business acquired		1,575	1,850
Other assets	[1]	18,192	16,118
Separate account assets		297,244	279,136
TOTAL ASSETS		849,324	815,078
LIABILITIES
Future policy benefits		277,085	273,846
Policyholders’ account balances		151,224	150,338
Policyholders’ dividends		5,360	4,110
Securities sold under agreements to repurchase		9,873	9,950
Cash collateral for loaned securities		4,093	3,929
Income taxes		10,031	7,936
Short-term debt		2,549	2,451
Long-term debt		18,309	17,378
Other liabilities	[1]	16,881	16,018
Notes issued by consolidated variable interest entities (includes $817 and $595 measured at fair value under the fair value option at March 31, 2019 and December 31, 2018, respectively)	[1]	1,225	955
Separate account liabilities		297,244	279,136
Total liabilities		793,874	766,047
COMMITMENTS AND CONTINGENT LIABILITIES
EQUITY
Preferred Stock ($.01 par value; 10,000,000 shares authorized; none issued)		0	0
Common Stock ($.01 par value; 1,500,000,000 shares authorized; 660,111,339 shares issued at both March 31, 2019 and December 31, 2018)		6	6
Additional paid-in capital		24,782	24,828
Common Stock held in treasury, at cost (252,761,744 and 249,398,887 shares at March 31, 2019 and December 31, 2018, respectively)		(17,962)	(17,593)
Accumulated other comprehensive income (loss)		17,218	10,906
Retained earnings		30,966	30,470
Total Prudential Financial, Inc. equity		55,010	48,617
Noncontrolling interests		440	414
Total equity		55,450	49,031
TOTAL LIABILITIES AND EQUITY		$ 849,324	$ 815,078

[1] See Note 4 for details of balances associated with variable interest entities.

XML

Unaudited Interim Consolidated Statements of Financial Position (Parenthetical) - USD ($) $ in Millions		Mar. 31, 2019	Dec. 31, 2018
Fixed Maturities, AFS, amortized cost		$ 333,648	$ 331,745
Fixed Maturities, HTM, at fair value		2,365	2,372
Fixed Maturities, Trading, amortized cost		3,512	3,392
Equity securities, AFS, amortized cost		5,230	5,219
Commercial mortgage and other loans	[1]	60,875	59,830
Other invested assets, at fair value		5,453	5,524
Notes issued by consolidated VIEs	[1]	$ 1,225	$ 955
Preferred Stock, par value (in dollars per share)		$ 0.01	$ 0.01
Preferred Stock, shares authorized		10,000,000	10,000,000
Preferred Stock, shares issued		0	0
Common Stock, par value (in dollars per share)		$ 0.01	$ 0.01
Common Stock, shares authorized		1,500,000,000	1,500,000,000
Common Stock, shares issued		660,111,339	660,111,339
Common Stock held in treasury, at cost, shares		252,761,744	249,398,887
Fair value option
Commercial mortgage and other loans		$ 463	$ 763
Notes issued by consolidated VIEs		$ 817	$ 595

[1] See Note 4 for details of balances associated with variable interest entities.

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Unaudited Interim Consolidated Statements of Operations - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
REVENUES
Premiums	$ 7,900	$ 7,311
Policy charges and fee income	1,471	1,504
Net investment income	4,216	3,998
Asset management and service fees	1,016	1,026
Other income (loss)	1,254	(507)
Realized investment gains (losses), net:
Other-than-temporary impairments on fixed maturity securities	(35)	(39)
Other-than-temporary impairments on fixed maturity securities transferred to Other comprehensive income	(12)	0
Other realized investment gains (losses), net	(719)	464
Total realized investment gains (losses), net	(766)	425
Total revenues	15,091	13,757
BENEFITS AND EXPENSES
Policyholders’ benefits	8,438	7,675
Interest credited to policyholders’ account balances	1,345	550
Dividends to policyholders	577	328
Amortization of deferred policy acquisition costs	435	588
General and administrative expenses	3,156	2,923
Total benefits and expenses	13,951	12,064
INCOME (LOSS) BEFORE INCOME TAXES AND EQUITY IN EARNINGS OF OPERATING JOINT VENTURES	1,140	1,693
Total income tax expense (benefit)	232	352
INCOME (LOSS) BEFORE EQUITY IN EARNINGS OF OPERATING JOINT VENTURES	908	1,341
Equity in earnings of operating joint ventures, net of taxes	29	23
NET INCOME (LOSS)	937	1,364
Less: Income (loss) attributable to noncontrolling interests	5	1
NET INCOME (LOSS) ATTRIBUTABLE TO PRUDENTIAL FINANCIAL, INC.	$ 932	$ 1,363
Basic earnings per share-Common Stock:
Net income (loss) attributable to Prudential Financial, Inc. (in dollars per share)	$ 2.25	$ 3.19
Diluted earnings per share-Common Stock:
Net income (loss) attributable to Prudential Financial, Inc. (in dollars per share)	$ 2.22	$ 3.14

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Unaudited Interim Consolidated Statements of Comprehensive Income - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Statement of Comprehensive Income [Abstract]
NET INCOME (LOSS)	$ 937	$ 1,364
Other comprehensive income (loss), before tax:
Foreign currency translation adjustments for the period	(105)	662
Net unrealized investment gains (losses)	8,289	(4,666)
Defined benefit pension and postretirement unrecognized periodic benefit (cost)	64	54
Total	8,248	(3,950)
Less: Income tax expense (benefit) related to other comprehensive income (loss)	1,944	(844)
Other comprehensive income (loss), net of taxes	6,304	(3,106)
Comprehensive income (loss)	7,241	(1,742)
Less: Comprehensive income (loss) attributable to noncontrolling interests	4	14
Comprehensive income (loss) attributable to Prudential Financial, Inc.	$ 7,237	$ (1,756)

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Unaudited Interim Consolidated Statements of Equity - USD ($) $ in Millions	Total	Common Stock	Additional Paid-in Capital	Retained Earnings	Common Stock Held In Treasury	Accumulated Other Comprehensive Income (Loss)	Total Prudential Financial, Inc. Equity	Noncontrolling Interests
Balance at Dec. 31, 2017	$ 54,511	$ 6	$ 24,769	$ 28,671	$ (16,284)	$ 17,074	$ 54,236	$ 275
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Common Stock acquired	(375)				(375)		(375)
Contributions from noncontrolling interests	61							61
Distributions to noncontrolling interests	(5)							(5)
Stock-based compensation programs	55		(47)		102		55
Dividends declared on Common Stock	(387)			(387)			(387)
Comprehensive income:
Net income (loss)	1,364			1,363			1,363	1
Other comprehensive income (loss), net of tax	(3,106)					(3,119)	(3,119)	13
Comprehensive income (loss)	(1,742)						(1,756)	14
Balance at Mar. 31, 2018	52,175	6	24,722	28,898	(16,557)	14,761	51,830	345
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Cumulative Effect of New Accounting Principle in Period of Adoption	9
Balance at Dec. 31, 2018	49,031	6	24,828	30,470	(17,593)	10,906	48,617	414
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Common Stock acquired	(500)				(500)		(500)
Contributions from noncontrolling interests	26							26
Distributions to noncontrolling interests	(4)							(4)
Stock-based compensation programs	85		(46)		131		85
Dividends declared on Common Stock	(415)			(415)			(415)
Comprehensive income:
Net income (loss)	937			932			932	5
Other comprehensive income (loss), net of tax	6,304					6,305	6,305	(1)
Comprehensive income (loss)	7,241						7,237	4
Balance at Mar. 31, 2019	$ 55,450	$ 6	$ 24,782	$ 30,966	$ (17,962)	$ 17,218	$ 55,010	$ 440

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Unaudited Interim Consolidated Statements of Cash Flows - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019		Mar. 31, 2018
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)	$ 937		$ 1,364
Adjustments to reconcile net income to net cash provided by operating activities:
Realized investment (gains) losses, net	766		(425)
Policy charges and fee income	(601)		(560)
Interest credited to policyholders’ account balances	1,345		550
Depreciation and amortization	20		(22)
(Gains) losses on assets supporting experience-rated contractholder liabilities, net	(454)		403
Change in:
Deferred policy acquisition costs	(326)		(131)
Future policy benefits and other insurance liabilities	2,504		1,859
Income taxes	152		421
Derivatives, net	(159)		(1,302)
Other, net	(1,099)		144
Cash flows from (used in) operating activities	3,085		2,301
Proceeds from the sale/maturity/prepayment of:
Fixed maturities, available-for-sale	14,063		14,665
Fixed maturities, held-to-maturity	14		36
Fixed maturities, trading	77		207
Assets supporting experience-rated contractholder liabilities	2,992		3,487
Equity securities	675		980
Commercial mortgage and other loans	1,080		1,319
Policy loans	576		656
Other invested assets	374		434
Short-term investments	8,202		9,870
Payments for the purchase/origination of:
Fixed maturities, available-for-sale	(17,395)		(15,652)
Fixed maturities, trading	(178)		(109)
Assets supporting experience-rated contractholder liabilities	(3,063)		(3,271)
Equity securities	(737)		(890)
Commercial mortgage and other loans	(2,354)		(3,489)
Policy loans	(473)		(561)
Other invested assets	(559)		(713)
Short-term investments	(8,837)		(8,837)
Derivatives, net	341		(365)
Other, net	(97)		(40)
Cash flows from (used in) investing activities	(5,299)		(2,273)
CASH FLOWS FROM FINANCING ACTIVITIES
Policyholders’ account deposits	7,417		7,456
Policyholders’ account withdrawals	(6,823)		(7,080)
Net change in securities sold under agreements to repurchase and cash collateral for loaned securities	88		191
Cash dividends paid on Common Stock	(420)		(388)
Net change in financing arrangements (maturities 90 days or less)	85		(90)
Common Stock acquired	(484)		(363)
Common Stock reissued for exercise of stock options	36		45
Proceeds from the issuance of debt (maturities longer than 90 days)	1,120		1,071
Repayments of debt (maturities longer than 90 days)	(55)		(19)
Proceeds from notes issued by consolidated VIEs	910		0
Repayments of of notes issues by consolidated VIEs	(638)		0
Other, net	330		66
Cash flows from (used in) financing activities	1,566		889
Effect of foreign exchange rate changes on cash balances	(2)		304
NET INCREASE IN CASH, CASH EQUIVALENTS RESTRICTED CASH AND RESTRICTED CASH EQUIVALENT	(650)		1,221
CASH, CASH EQUIVALENTS RESTRICTED CASH AND RESTRICTED CASH EQUIVALENT, BEGINNING OF YEAR	15,495		14,536
CASH, CASH EQUIVALENTS RESTRICTED CASH AND RESTRICTED CASH EQUIVALENT, END OF PERIOD	14,845		15,757
NON-CASH TRANSACTIONS DURING THE PERIOD
Treasury Stock shares issued for stock-based compensation programs	165		129
RECONCILIATION TO STATEMENT OF FINANCIAL POSITION
Cash and cash equivalents	14,699	[1]	15,676
Restricted cash and restricted cash equivalents (included in “Other assets”)	146		81
Total cash, cash equivalents restricted cash and restricted cash equivalents	$ 14,845		$ 15,757

[1] See Note 4 for details of balances associated with variable interest entities.

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Business and Basis of Presentation

3 Months Ended

Mar. 31, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Business and Basis of Presentation

BUSINESS AND BASIS OF PRESENTATION

Prudential Financial, Inc. (“Prudential Financial”) and its subsidiaries (collectively, “Prudential” or the “Company”) provide a wide range of insurance, investment management, and other financial products and services to both individual and institutional customers throughout the United States and in many other countries. Principal products and services provided include life insurance, annuities, retirement-related services, mutual funds and investment management.

The Company’s principal operations are comprised of five divisions, which together encompass seven segments, and its Corporate and Other operations. The PGIM division is comprised of the PGIM segment, the global investment management businesses of the Company. The U.S. Workplace Solutions division consists of the Retirement and Group Insurance segments. The U.S. Individual Solutions division consists of the Individual Annuities and Individual Life segments. The International Insurance division is comprised of the International Insurance segment, and the Closed Block division is comprised of the Closed Block segment. The Closed Block division is accounted for as a divested business that is reported separately from the Divested and Run-off Businesses that are included in the Company’s Corporate and Other operations. Divested and Run-off Businesses are comprised of businesses that have been, or will be, sold or exited, including businesses that have been placed in wind down status that do not qualify for “discontinued operations” accounting treatment under generally accepted accounting principles in the United States of America (“U.S. GAAP”). The Company’s Corporate and Other operations include corporate items and initiatives that are not allocated to business segments and businesses that have been or will be divested or placed in run-off, excluding the Closed Block division.

Basis of Presentation

The Unaudited Interim Consolidated Financial Statements have been prepared in accordance with U.S. GAAP on a basis consistent with reporting interim financial information in accordance with instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities and Exchange Commission (“SEC”). Intercompany balances and transactions have been eliminated. The Unaudited Interim Consolidated Financial Statements include the accounts of Prudential Financial, entities over which the Company exercises control, including majority-owned subsidiaries and variable interest entities (“VIEs”) in which the Company is considered the primary beneficiary. See Note 4 for more information on the Company’s consolidated variable interest entities.  

In the opinion of management, all adjustments necessary for a fair statement of the financial position and results of operations have been made. All such adjustments are of a normal, recurring nature. Interim results are not necessarily indicative of the results that may be expected for the full year. These financial statements should be read in conjunction with the Company’s Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

The most significant estimates include those used in determining deferred policy acquisition costs (“DAC”) and related amortization; value of business acquired (“VOBA”) and its amortization; amortization of deferred sales inducements (“DSI”); measurement of goodwill and any related impairment; valuation of investments including derivatives and the recognition of other-than-temporary impairments (“OTTI”); future policy benefits including guarantees; pension and other postretirement benefits; provision for income taxes and valuation of deferred tax assets; and accruals for contingent liabilities, including estimates for losses in connection with unresolved legal and regulatory matters.

Reclassifications

Certain amounts in prior periods have been reclassified to conform to the current period presentation.

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Significant Accounting Policies and Pronouncements

3 Months Ended

Mar. 31, 2019

Accounting Policies [Abstract]

Significant Accounting Policies and Pronouncements

SIGNIFICANT ACCOUNTING POLICIES AND PRONOUNCEMENTS

Recent Accounting Pronouncements

Changes to U.S. GAAP are established by the Financial Accounting Standards Board (“FASB”) in the form of Accounting Standards Updates (“ASU”) to the FASB Accounting Standards Codification. The Company considers the applicability and impact of all ASU. ASU listed below include those that have been adopted during the current fiscal year and/or those that have been issued but not yet adopted as of the date of this filing. ASU not listed below were assessed and determined to be either not applicable or not material.

Adoption of ASU 2016-02

Effective January 1, 2019, the Company adopted ASU 2016-02, Leases (Topic 842), using the optional transition method with a cumulative-effect adjustment recorded as of the beginning of the period of adoption. This ASU substantially changes a lessee’s accounting for leases and requires the recording, on balance sheet, using a dual lease accounting model, of a “right-of-use” asset and lease liability. Leases are to be classified as either operating or finance leases. Under the standard, operating leases will recognize total lease expense using a straight-line recognition method and finance leases are to be treated as the purchase of an asset on a financed basis. For lessors, the standard modifies classification criteria and accounting for sales-type and direct financing leases and requires a lessor to derecognize the carrying value of the leased asset that is considered to have been transferred to a lessee and record a lease receivable and residual asset (“receivable and residual” approach). The standard also eliminates the leveraged lease accounting model for lessors and real estate specific provisions (i.e., those related to sale-leaseback transactions); it does allow, however, a grandfathering of the leveraged lease accounting model for those existing leases that are being accounted for using such model.

In addition, the Company elected the package of practical expedients permitted under the transition guidance within the standard which eliminated the need to reassess: (a) whether any existing contracts are, or contain, leases; (b) the lease classification for any existing leases (i.e., all existing lessee arrangements that were classified as operating leases before are now classified as operating leases, and all existing lessee arrangements that were classified as capital leases before are now classified as finance leases); and (c) initial direct costs for any existing leases. The Company did not elect the practical expedient, which may be applied separately, to use hindsight in determining the lease term and in assessing impairment of the Company’s right-of-use assets.

Adoption of the standard resulted in the recording of right-of-use assets and lease liabilities related to existing operating leases of approximately $600 million as of January 1, 2019. Adoption of the standard also resulted in additional required disclosures. See Note 7 for additional information.

Other ASU adopted during the three months ended March 31, 2019

Standard	Description	Effective date and method of adoption	Effect on the financial statements or other significant matters
ASU 2017-08, Receivables -Nonrefundable Fees and Other Costs (Subtopic 310-20) Premium Amortization on Purchased Callable Debt Securities	This ASU requires certain premiums on callable debt securities to be amortized to the earliest call date.	January 1, 2019 using the modified retrospective method which included cumulative-effect adjustment on the balance sheet as of the beginning of the fiscal year of adoption.	Adoption of the ASU did not have a significant impact on the Company’s Consolidated Financial Statements and Notes to the Consolidated Financial Statements. The impact of the cumulative-effect adjustment to retained earnings was immaterial.
ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities	This ASU makes targeted changes to the existing hedge accounting model to better portray the economics of an entity’s risk management activities and to simplify the use of hedge accounting. The ASU eliminates separate measurement and recording of hedge ineffectiveness. It requires entities to present the earnings effect of the hedging instrument in the same income statement line item in which the hedged item is reported and also requires expanded disclosures.	January 1, 2019 using the modified retrospective method which included cumulative-effect adjustment on the balance sheet as of the beginning of the fiscal year of adoption.	Adoption of the ASU did not have a significant impact on the Company’s Consolidated Financial Statements and Notes to the Consolidated Financial Statements. The impact of the cumulative-effect adjustment to retained earnings and accumulated other comprehensive income (loss) (“AOCI”) related to ineffectiveness of the hedge instruments outstanding at the date of adoption was immaterial. See Note 5 for additional required disclosures.

ASU issued but not yet adopted as of March 31, 2019 — ASU 2018-12

ASU 2018-12, Financial Services - Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts, was issued by the FASB on August 15, 2018 and is expected to have a significant impact on the Company’s Consolidated Financial Statements and Notes to the Consolidated Financial Statements. The ASU is effective January 1, 2021 (with early adoption permitted), and will impact, at least to some extent, the accounting and disclosure requirements for all long-duration insurance and investment contracts issued by the Company. Outlined below are four key areas of change, although there are other less significant changes not noted below. In addition to the impacts to the balance sheet upon adoption, the Company also expects an impact to how earnings emerge thereafter.

ASU 2018-12 Amended Topic	Description	Method of adoption	Effect on the financial statements or other significant matters
Cash flow assumptions used to measure the liability for future policy benefits for non-participating traditional and limited-pay insurance products	Requires an entity to review, and if necessary, update the cash flow assumptions used to measure the liability for future policy benefits, for both changes in future assumptions and actual experience, at least annually using a retrospective update method with a cumulative catch-up adjustment recorded in a separate line item in the Consolidated Statements of Operations.	An entity may choose one of two adoption methods for the liability for future policy benefits: (1) a modified retrospective transition method whereby the entity will apply the amendments to contracts in force as of the beginning of the earliest period presented on the basis of their existing carrying amounts, adjusted for the removal of any related amounts in AOCI or (2) a full retrospective transition method.	The options for method of adoption and the impacts of such methods are under assessment.
Discount rate assumption used to measure the liability for future policy benefits for non-participating traditional and limited-pay insurance products	Requires discount rate assumptions to be based on an upper-medium grade fixed income instrument yield and will be required to be updated each quarter with the impact recorded through Other Comprehensive Income (“OCI”).	As noted above, an entity may choose either a modified retrospective transition method or full retrospective transition method for the liability for future policy benefits. Under either method, for balance sheet remeasurement purposes, the liability for future policy benefits will be remeasured using current discount rates as of the beginning of the earliest period presented with the impact recorded as a cumulative effect adjustment to AOCI.	Upon adoption, under either transition method, there will be an adjustment to AOCI as a result of remeasuring in force contract liabilities using current upper-medium grade fixed income instrument yields. The adjustment upon adoption will largely reflect the difference between the discount rate locked-in at contract inception versus current discount rates at transition. The magnitude of such adjustment is currently being assessed.
Amortization of deferred acquisition costs (DAC) and other balances	Requires DAC and other balances, such as unearned revenue reserves and deferred sales inducements, to be amortized on a constant level basis over the expected term of the related contract, independent of expected profitability.	An entity may apply one of two adoption methods: (1) a modified retrospective transition method whereby the entity will apply the amendments to contracts in force as of the beginning of the earliest period presented on the basis of their existing carrying amounts, adjusted for the removal of any related amounts in AOCI or (2) if an entity chooses a full retrospective transition method for its future policy benefits, as described above, it is required to also use a retrospective transition method for DAC and other balances.	The options for method of adoption and the impacts of such methods are under assessment. Under the modified retrospective transition method, the Company would not expect a significant impact to the balance sheet, other than the impact of the removal of any related amounts in AOCI.
Market Risk Benefits	Requires an entity to measure all market risk benefits (e.g., living benefit and death benefit guarantees associated with variable annuities) at fair value with changes in value attributable to changes in an entity’s non-performance risk (“NPR”) recognized in OCI.	An entity will apply a retrospective transition method which will include a cumulative-effect adjustment on the balance sheet as of the earliest period presented.	Upon adoption, the Company expects an impact to retained earnings for the difference between the fair value and carrying value of benefits not currently measured at fair value (e.g., guaranteed minimum death benefits on variable annuities) and an impact from reclassifying the cumulative effect of changes in NPR from retained earnings to AOCI. The magnitude of such adjustments is currently being assessed.

Other ASU issued but not yet adopted as of March 31, 2019

Standard	Description	Effective date and method of adoption	Effect on the financial statements or other significant matters
ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments	This ASU provides a new current expected credit loss model to account for credit losses on certain financial assets and off-balance sheet exposures (e.g., loans held for investment, debt securities held to maturity, reinsurance receivables, net investments in leases and loan commitments). The model requires an entity to estimate lifetime credit losses related to such financial assets and exposures based on relevant information about past events, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. The standard also modifies the current OTTI standard for available-for-sale debt securities to require the use of an allowance rather than a direct write down of the investment, and replaces the existing standard for purchased credit deteriorated loans and debt securities.	January 1, 2020 using the modified retrospective method which will include a cumulative-effect adjustment on the balance sheet as of the beginning of the fiscal year of adoption. However, prospective application is required for purchased credit deteriorated assets previously accounted for under ASU 310-30 and for debt securities for which an OTTI was recognized prior to the date of adoption. Early adoption is permitted beginning January 1, 2019.	The Company does not plan to early adopt this ASU and is currently assessing its impact on the Company’s Consolidated Financial Statements and Notes to the Consolidated Financial Statements.
ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment	This ASU simplifies the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test in current U.S. GAAP, which measures a goodwill impairment by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of the goodwill. Under the ASU, a goodwill impairment should be recorded for the amount by which the carrying amount of a reporting unit exceeds its fair value (capped by the total amount of goodwill allocated to the reporting unit).	January 1, 2020 using the prospective method (with early adoption permitted).	The Company does not plan to early adopt this ASU. The Company does not expect the adoption of the ASU to have a significant impact on the Company’s Consolidated Financial Statements and Notes to the Consolidated Financial Statements.

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Investments

3 Months Ended

Mar. 31, 2019

Investments [Abstract]

Investments

3. INVESTMENTS

Fixed Maturity Securities

The following tables set forth the composition of fixed maturity securities (excluding investments classified as trading), as of the dates indicated:

	March 31, 2019
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		OTTI in AOCI(4)
	(in millions)
Fixed maturities, available-for-sale:
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	29,476	$	3,664	$	329	$	32,811	$	0
Obligations of U.S. states and their political subdivisions	9,864		990		6		10,848		0
Foreign government bonds	96,130		19,399		113		115,416		0
U.S. public corporate securities	82,529		5,722		902		87,349		(2		)
U.S. private corporate securities(1)	32,624		1,531		291		33,864		(10		)
Foreign public corporate securities	27,483		2,459		179		29,763		(8		)
Foreign private corporate securities	26,243		694		808		26,129		0
Asset-backed securities(2)	12,566		176		53		12,689		(147		)
Commercial mortgage-backed securities	13,834		279		54		14,059		0
Residential mortgage-backed securities(3)	2,899		115		14		3,000		(1		)
Total fixed maturities, available-for-sale(1)	$	333,648	$	35,029	$	2,749	$	365,928	$	(168	)

	March 31, 2019
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(in millions)
Fixed maturities, held-to-maturity:
Foreign government bonds	$	876	$	285	$	0	$	1,161
Foreign public corporate securities	663		70		0		733
Foreign private corporate securities(5)	94		3		0		97
Residential mortgage-backed securities(3)	349		25		0		374
Total fixed maturities, held-to-maturity(5)	$	1,982	$	383	$	0	$	2,365

__________

(1) Excludes notes with amortized cost of $4,216 million (fair value, $4,216 million), which have been offset with the associated payables under a netting agreement.

(2) Includes credit-tranched securities collateralized by loan obligations, sub-prime mortgages, auto loans, credit cards, education loans and other asset types.

(3) Includes publicly-traded agency pass-through securities and collateralized mortgage obligations.

(4) Represents the amount of unrealized losses remaining in AOCI, from the impairment measurement date. Amount excludes $419 million of net unrealized gains on impaired available-for-sale securities and $2 million of net unrealized gains on impaired held-to-maturity securities relating to changes in the value of such securities subsequent to the impairment measurement date.

(5) Excludes notes with amortized cost of $4,879 million (fair value, $4,930 million), which have been offset with the associated payables under a netting agreement.

	December 31, 2018
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		OTTI in AOCI(4)
	(in millions)
Fixed maturities, available-for-sale:
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	28,242	$	2,994	$	642	$	30,594	$	0
Obligations of U.S. states and their political subdivisions	9,880		676		63		10,493		0
Foreign government bonds	96,710		16,714		314		113,110		0
U.S. public corporate securities	82,257		3,912		2,754		83,415		(2		)
U.S. private corporate securities(1)	32,450		1,151		581		33,020		0
Foreign public corporate securities	27,671		2,061		531		29,201		(3		)
Foreign private corporate securities	25,314		434		1,217		24,531		0
Asset-backed securities(2)	12,888		162		77		12,973		(160		)
Commercial mortgage-backed securities	13,396		99		180		13,315		0
Residential mortgage-backed securities(3)	2,937		99		32		3,004		(1		)
Total fixed maturities, available-for-sale(1)	$	331,745	$	28,302	$	6,391	$	353,656	$	(166	)

	December 31, 2018
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(in millions)
Fixed maturities, held-to-maturity:
Foreign government bonds	$	885	$	269	$	0	$	1,154
Foreign public corporate securities	668		64		0		732
Foreign private corporate securities(5)	95		3		0		98
Residential mortgage-backed securities(3)	365		23		0		388
Total fixed maturities, held-to-maturity(5)	$	2,013	$	359	$	0	$	2,372

__________

(1) Excludes notes with amortized cost of $4,216 million (fair value, $4,216 million), which have been offset with the associated payables under a netting agreement.

(2) Includes credit-tranched securities collateralized by loan obligations, sub-prime mortgages, auto loans, credit cards, education loans and other asset types.

(3) Includes publicly-traded agency pass-through securities and collateralized mortgage obligations.

(4) Represents the amount of unrealized losses remaining in AOCI, from the impairment measurement date. Amount excludes $356 million of net unrealized gains on impaired available-for-sale securities and $1 million of net unrealized gains on impaired held-to-maturity securities relating to changes in the value of such securities subsequent to the impairment measurement date.

(5) Excludes notes with amortized cost of $4,879 million (fair value, $4,879 million), which have been offset with the associated payables under a netting agreement.

The following tables set forth the fair value and gross unrealized losses aggregated by investment category and length of time that individual fixed maturity securities had been in a continuous unrealized loss position, as of the dates indicated:

	March 31, 2019
	Less Than Twelve Months				Twelve Months or More				Total
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
	(in millions)
Fixed maturities(1):
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	1,304	$	2	$	6,431	$	327	$	7,735	$	329
Obligations of U.S. states and their political subdivisions	0		0		345		6		345		6
Foreign government bonds	751		59		1,512		54		2,263		113
U.S. public corporate securities	4,111		104		17,720		798		21,831		902
U.S. private corporate securities	1,747		74		7,379		217		9,126		291
Foreign public corporate securities	1,228		37		3,145		142		4,373		179
Foreign private corporate securities	4,411		158		7,551		650		11,962		808
Asset-backed securities	6,223		41		1,511		12		7,734		53
Commercial mortgage-backed securities	72		0		3,293		54		3,365		54
Residential mortgage-backed securities	23		0		883		14		906		14
Total	$	19,870	$	475	$	49,770	$	2,274	$	69,640	$	2,749

__________ 

(1) Includes $13 million of fair value and less than $1 million of gross unrealized losses, which are not reflected in AOCI, on securities classified as held-to-maturity, as of March 31, 2019.

	December 31, 2018
	Less Than Twelve Months				Twelve Months or More				Total
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
	(in millions)
Fixed maturities(1):
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	3,007	$	67	$	6,986	$	575	$	9,993	$	642
Obligations of U.S. states and their political subdivisions	1,725		25		999		38		2,724		63
Foreign government bonds	2,369		136		3,515		178		5,884		314
U.S. public corporate securities	34,064		1,570		13,245		1,184		47,309		2,754
U.S. private corporate securities	8,923		225		7,985		356		16,908		581
Foreign public corporate securities	7,363		308		2,928		223		10,291		531
Foreign private corporate securities	12,218		692		4,468		525		16,686		1,217
Asset-backed securities	8,255		70		669		7		8,924		77
Commercial mortgage-backed securities	1,781		14		4,733		166		6,514		180
Residential mortgage-backed securities	194		1		1,042		31		1,236		32
Total	$	79,899	$	3,108	$	46,570	$	3,283	$	126,469	$	6,391

__________ 

(1) Includes $13 million of fair value and less than $1 million of gross unrealized losses, which are not reflected in AOCI, on securities classified as held-to-maturity, as of December 31, 2018.

As of March 31, 2019 and December 31, 2018, the gross unrealized losses on fixed maturity securities were composed of $2,249 million and $5,391 million, respectively, related to “1” highest quality or “2” high quality securities based on the National Association of Insurance Commissioners (“NAIC”) or equivalent rating and $500 million and $1,000 million, respectively, related to other than high or highest quality securities based on NAIC or equivalent rating. As of March 31, 2019, the $2,274 million of gross unrealized losses of twelve months or more were concentrated in U.S. government bonds and in the Company’s corporate securities within the consumer non-cyclical, utility, and finance sectors. As of December 31, 2018, the $3,283 million of gross unrealized losses of twelve months or more were concentrated in U.S. government bonds and in the Company’s corporate securities within the utility, consumer non-cyclical and finance sectors. In accordance with its policy described in Note 2 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, the Company concluded that an adjustment to earnings for OTTI for these fixed maturity securities was not warranted at either March 31, 2019 or December 31, 2018. These conclusions were based on a detailed analysis of the underlying credit and cash flows on each security. Gross unrealized losses are primarily attributable to general credit spread widening, increases in interest rates and foreign currency exchange rate movements. As of March 31, 2019, the Company did not intend to sell these securities, and it was not more likely than not that the Company would be required to sell these securities before the anticipated recovery of the remaining amortized cost basis.

The following table sets forth the amortized cost and fair value of fixed maturities by contractual maturities, as of the date indicated:

	March 31, 2019
	Available-for-Sale				Held-to-Maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(in millions)
Fixed maturities:
Due in one year or less	$	17,488	$	17,954	$	66	$	67
Due after one year through five years	49,857		52,880		112		115
Due after five years through ten years	64,580		69,373		582		651
Due after ten years(1)	172,424		195,973		873		1,158
Asset-backed securities	12,566		12,689		0		0
Commercial mortgage-backed securities	13,834		14,059		0		0
Residential mortgage-backed securities	2,899		3,000		349		374
Total	$	333,648	$	365,928	$	1,982	$	2,365

__________ 

(1) Excludes available-for-sale notes with amortized cost of $4,216 million (fair value, $4,216 million) and held-to-maturity notes with amortized cost of $4,879 million (fair value, $4,930 million), which have been offset with the associated payables under a netting agreement.

Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations. Asset-backed, commercial mortgage-backed and residential mortgage-backed securities are shown separately in the table above, as they do not have a single maturity date.

The following table sets forth the sources of fixed maturity proceeds and related investment gains (losses), as well as losses on impairments of fixed maturities, for the periods indicated:

	Three Months Ended March 31,
	2019			2018
	(in millions)
Fixed maturities, available-for-sale:
Proceeds from sales(1)	$	10,162		$	9,585
Proceeds from maturities/prepayments	4,488			5,226
Gross investment gains from sales and maturities	483			374
Gross investment losses from sales and maturities	(188		)	(257		)
OTTI recognized in earnings(2)	(35		)	(39		)
Fixed maturities, held-to-maturity:
Proceeds from maturities/prepayments(3)	$	14		$	36

__________ 

(1) Includes $587 million and $146 million of non-cash related proceeds due to the timing of trade settlements for the three months ended March 31, 2019 and 2018, respectively.

(2) Excludes the portion of OTTI amounts remaining in “Other comprehensive income (loss)” (“OCI”), representing any difference between the fair value of the impaired debt security and the net present value of its projected future cash flows at the time of impairment.

(3)

Includes $0 million of non-cash related proceeds due to the timing of trade settlements for both three months ended March 31, 2019 and 2018.The following table sets forth a rollforward of pre-tax amounts remaining in OCI related to fixed maturity securities with credit loss impairments recognized in earnings, for the periods indicated: 

	Three Months Ended March 31,
	2019			2018
	(in millions)
Credit loss impairments:
Balance, beginning of period	$	140		$	319
New credit loss impairments	16			0
Additional credit loss impairments on securities previously impaired	0			0
Increases due to the passage of time on previously recorded credit losses	1			2
Reductions for securities which matured, paid down, prepaid or were sold during the period	(7		)	(113		)
Reductions for securities impaired to fair value during the period(1)	0			(4		)
Accretion of credit loss impairments previously recognized due to an increase in cash flows expected to be collected	(1		)	(1		)
Balance, end of period	$	149		$	203

__________ 

(1)

Represents circumstances where the Company determined in the current period that it intends to sell the security or it is more likely than not that it will be required to sell the security before recovery of the security’s amortized cost.Assets Supporting Experience-Rated Contractholder Liabilities

The following table sets forth the composition of “Assets supporting experience-rated contractholder liabilities,” as of the dates indicated:

	March 31, 2019				December 31, 2018
	Amortized Cost or Cost		Fair Value		Amortized Cost or Cost		Fair Value
	(in millions)
Short-term investments and cash equivalents	$	368	$	368	$	215	$	215
Fixed maturities:
Corporate securities	13,443		13,572		13,258		13,119
Commercial mortgage-backed securities	2,282		2,297		2,346		2,324
Residential mortgage-backed securities(1)	860		855		828		811
Asset-backed securities(2)	1,629		1,651		1,649		1,665
Foreign government bonds	862		878		1,087		1,083
U.S. government authorities and agencies and obligations of U.S. states	414		461		538		577
Total fixed maturities(3)	19,490		19,714		19,706		19,579
Equity securities	1,386		1,586		1,378		1,460
Total assets supporting experience-rated contractholder liabilities(4)	$	21,244	$	21,668	$	21,299	$	21,254

__________ 

(1) Includes publicly-traded agency pass-through securities and collateralized mortgage obligations.

(2) Includes collateralized loan obligations, credit-tranched securities collateralized by sub-prime mortgages, auto loans, credit cards, education loans and other asset types. Collateralized loan obligations at fair value were $1,031 million and $1,028 million as of March 31, 2019 and December 31, 2018, respectively, all of which were rated AAA.

(3) As a percentage of amortized cost, 93% of the portfolio was considered high or highest quality based on NAIC or equivalent ratings, as of both March 31, 2019 and December 31, 2018.

(4) As a percentage of amortized cost, 77% and 78% of the portfolio consisted of public securities as of March 31, 2019 and December 31, 2018, respectively.

The net change in unrealized gains (losses) from assets supporting experience-rated contractholder liabilities still held at period end, recorded within “Other income (loss),” was $469 million and $(398) million during the three months ended March 31, 2019 and 2018, respectively.

Equity Securities

The net change in unrealized gains (losses) from equity securities still held at period end, recorded within “Other income (loss),” was $529 million and $(188) million during the three months ended March 31, 2019 and 2018, respectively.

Concentrations of Financial Instruments

The Company monitors its concentrations of financial instruments and mitigates credit risk by maintaining a diversified investment portfolio which limits exposure to any one issuer.

As of the dates indicated, the Company’s exposure to concentrations of credit risk of single issuers greater than 10% of the Company’s stockholders’ equity included securities of the U.S. government and certain U.S. government agencies and securities guaranteed by the U.S. government, as well as the securities disclosed below:

	March 31, 2019				December 31, 2018
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(in millions)
Investments in Japanese government and government agency securities:
Fixed maturities, available-for-sale	$	71,107	$	85,874	$	71,952	$	84,461
Fixed maturities, held-to-maturity	855		1,133		864		1,127
Fixed maturities, trading	22		22		22		22
Assets supporting experience-rated contractholder liabilities	670		686		691		697
Total	$	72,654	$	87,715	$	73,529	$	86,307

	March 31, 2019				December 31, 2018
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(in millions)
Investments in South Korean government and government agency securities:
Fixed maturities, available-for-sale	$	10,325	$	12,707	$	10,339	$	12,586
Fixed maturities, held-to-maturity	0		0		0		0
Fixed maturities, trading	0		0		0		0
Assets supporting experience-rated contractholder liabilities	15		16		15		15
Total	$	10,340	$	12,723	$	10,354	$	12,601

Commercial Mortgage and Other Loans

The following table sets forth the composition of “Commercial mortgage and other loans,” as of the dates indicated:

	March 31, 2019					December 31, 2018
	Amount (in millions)			% of Total		Amount (in millions)			% of Total
Commercial mortgage and agricultural property loans by property type:
Office	$	13,097		21.7	%	$	13,280		22.4	%
Retail	8,502			14.1		8,639			14.6
Apartments/Multi-Family	16,789			27.9		16,538			28.0
Industrial	12,255			20.4		11,574			19.6
Hospitality	2,187			3.6		1,931			3.3
Other	3,948			6.6		3,846			6.5
Total commercial mortgage loans	56,778			94.3		55,808			94.4
Agricultural property loans	3,402			5.7		3,316			5.6
Total commercial mortgage and agricultural property loans by property type	60,180			100.0	%	59,124			100.0	%
Allowance for credit losses	(115		)			(123		)
Total net commercial mortgage and agricultural property loans by property type	60,065					59,001
Other loans:
Uncollateralized loans	651					660
Residential property loans	147					157
Other collateralized loans	17					17
Total other loans	815					834
Allowance for credit losses	(5		)			(5		)
Total net other loans	810					829
Total commercial mortgage and other loans(1)	$	60,875				$	59,830

__________ 

(1) Includes loans held for sale which are carried at fair value and are collateralized primarily by apartment complexes. As of March 31, 2019 and December 31, 2018, the net carrying value of these loans was $463 million and $763 million, respectively.

As of March 31, 2019, the commercial mortgage and agricultural property loans were secured by properties geographically dispersed throughout the United States (with the largest concentrations in California (27%), Texas (9%) and New York (8%)) and included loans secured by properties in Europe (6%), Australia (1%) and Asia (1%).The following table sets forth the activity in the allowance for credit losses for commercial mortgage and other loans, as of the dates indicated:

	Commercial Mortgage Loans			Agricultural Property Loans		Residential Property Loans			Other Collateralized Loans		Uncollateralized Loans		Total
	(in millions)
Balance at December 31, 2017	$	97		$	3	$	1		$	0	$	5	$	106
Addition to (release of) allowance for credit losses	23			0		(1		)	0		0		22
Charge-offs, net of recoveries	0			0		0			0		0		0
Change in foreign exchange	0			0		0			0		0		0
Balance at December 31, 2018	120			3		0			0		5		128
Addition to (release of) allowance for credit losses	(8		)	0		0			0		0		(8		)
Charge-offs, net of recoveries	0			0		0			0		0		0
Change in foreign exchange	0			0		0			0		0		0
Balance at March 31, 2019	$	112		$	3	$	0		$	0	$	5	$	120

The following tables set forth the allowance for credit losses and the recorded investment in commercial mortgage and other loans, as of the dates indicated:

	March 31, 2019
	Commercial Mortgage Loans		Agricultural Property Loans		Residential Property Loans		Other Collateralized Loans		Uncollateralized Loans		Total
	(in millions)
Allowance for credit losses:
Individually evaluated for impairment	$	8	$	0	$	0	$	0	$	0	$	8
Collectively evaluated for impairment	104		3		0		0		5		112
Total ending balance(1)	$	112	$	3	$	0	$	0	$	5	$	120
Recorded investment(2):
Individually evaluated for impairment	$	30	$	18	$	0	$	0	$	0	$	48
Collectively evaluated for impairment	56,748		3,384		147		17		651		60,947
Total ending balance(1)	$	56,778	$	3,402	$	147	$	17	$	651	$	60,995

__________ 

(1) As of March 31, 2019, there were no loans acquired with deteriorated credit quality.

(2) Recorded investment reflects the carrying value gross of related allowance.

	December 31, 2018
	Commercial Mortgage Loans		Agricultural Property Loans		Residential Property Loans		Other Collateralized Loans		Uncollateralized Loans		Total
	(in millions)
Allowance for credit losses:
Individually evaluated for impairment	$	19	$	0	$	0	$	0	$	0	$	19
Collectively evaluated for impairment	101		3		0		0		5		109
Total ending balance(1)	$	120	$	3	$	0	$	0	$	5	$	128
Recorded investment(2):
Individually evaluated for impairment	$	67	$	35	$	0	$	0	$	2	$	104
Collectively evaluated for impairment	55,741		3,281		157		17		658		59,854
Total ending balance(1)	$	55,808	$	3,316	$	157	$	17	$	660	$	59,958

__________

(1) As of December 31, 2018, there were no loans acquired with deteriorated credit quality.

(2)

Recorded investment reflects the carrying value gross of related allowance.The following tables set forth certain key credit quality indicators based upon the recorded investment gross of allowance for credit losses, as of the date indicated:

Commercial mortgage loans 

	March 31, 2019
	Debt Service Coverage Ratio
	>1.2X		1.0X to <1.2X		< 1.0X		Total
	(in millions)
Loan-to-Value Ratio:
0%-59.99%	$	29,977	$	652	$	129	$	30,758
60%-69.99%	17,205		688		0		17,893
70%-79.99%	6,971		744		42		7,757
80% or greater	195		83		92		370
Total commercial mortgage loans	$	54,348	$	2,167	$	263	$	56,778

Agricultural property loans 

	March 31, 2019
	Debt Service Coverage Ratio
	>1.2X		1.0X to <1.2X		< 1.0X		Total
	(in millions)
Loan-to-Value Ratio:
0%-59.99%	$	3,098	$	167	$	58	$	3,323
60%-69.99%	63		0		0		63
70%-79.99%	0		16		0		16
80% or greater	0		0		0		0
Total agricultural property loans	$	3,161	$	183	$	58	$	3,402

Total commercial mortgage and agricultural property loans

	March 31, 2019
	Debt Service Coverage Ratio
	>1.2X		1.0X to <1.2X		< 1.0X		Total
	(in millions)
Loan-to-Value Ratio:
0%-59.99%	$	33,075	$	819	$	187	$	34,081
60%-69.99%	17,268		688		0		17,956
70%-79.99%	6,971		760		42		7,773
80% or greater	195		83		92		370
Total commercial mortgage and agricultural property loans	$	57,509	$	2,350	$	321	$	60,180

The following tables set forth certain key credit quality indicators based upon the recorded investment gross of allowance for credit losses, as of the date indicated:

Commercial mortgage loans 

	December 31, 2018
	Debt Service Coverage Ratio
	>1.2X		1.0X to <1.2X		< 1.0X		Total
	(in millions)
Loan-to-Value Ratio:
0%-59.99%	$	30,325	$	538	$	161	$	31,024
60%-69.99%	16,538		621		0		17,159
70%-79.99%	6,324		754		41		7,119
80% or greater	332		142		32		506
Total commercial mortgage loans	$	53,519	$	2,055	$	234	$	55,808

Agricultural property loans

	December 31, 2018
	Debt Service Coverage Ratio
	>1.2X		1.0X to <1.2X		< 1.0X		Total
	(in millions)
Loan-to-Value Ratio:
0%-59.99%	$	2,997	$	198	$	57	$	3,252
60%-69.99%	64		0		0		64
70%-79.99%	0		0		0		0
80% or greater	0		0		0		0
Total agricultural property loans	$	3,061	$	198	$	57	$	3,316

Total commercial mortgage and agricultural property loans

	December 31, 2018
	Debt Service Coverage Ratio
	>1.2X		1.0X to <1.2X		< 1.0X		Total
	(in millions)
Loan-to-Value Ratio:
0%-59.99%	$	33,322	$	736	$	218	$	34,276
60%-69.99%	16,602		621		0		17,223
70%-79.99%	6,324		754		41		7,119
80% or greater	332		142		32		506
Total commercial mortgage and agricultural property loans	$	56,580	$	2,253	$	291	$	59,124

The following tables set forth an aging of past due commercial mortgage and other loans based upon the recorded investment gross of allowance for credit losses, as well as the amount of commercial mortgage and other loans on non-accrual status, as of the dates indicated:

	March 31, 2019
	Current		30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due(1)		Total Past Due		Total Loans		Non-Accrual Status(2)
	(in millions)
Commercial mortgage loans	$	56,778	$	0	$	0	$	0	$	0	$	56,778	$	22
Agricultural property loans	3,383		1		0		18		19		3,402		21
Residential property loans	144		0		1		2		3		147		2
Other collateralized loans	17		0		0		0		0		17		0
Uncollateralized loans	651		0		0		0		0		651		0
Total	$	60,973	$	1	$	1	$	20	$	22	$	60,995	$	45

 __________

(1) As of March 31, 2019, there were no loans in this category accruing interest.

(2) For additional information regarding the Company’s policies for accruing interest on loans, see Note 2 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.

	December 31, 2018
	Current		30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due(1)		Total Past Due		Total Loans		Non-Accrual Status(2)
	(in millions)
Commercial mortgage loans	$	55,808	$	0	$	0	$	0	$	0	$	55,808	$	66
Agricultural property loans	3,301		0		0		15		15		3,316		18
Residential property loans	154		1		0		2		3		157		3
Other collateralized loans	17		0		0		0		0		17		0
Uncollateralized loans	660		0		0		0		0		660		0
Total	$	59,940	$	1	$	0	$	17	$	18	$	59,958	$	87

__________

(1) As of December 31, 2018, there were no loans in this category accruing interest.

(2)

For additional information regarding the Company’s policies for accruing interest on loans, see Note 2 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.

Other Invested Assets

The following table sets forth the composition of “Other invested assets,” as of the dates indicated:

	March 31, 2019		December 31, 2018
	(in millions)
LPs/LLCs:
Equity method:
Private equity	$	3,254	$	3,182
Hedge funds	1,481		1,337
Real estate-related	1,226		1,207
Subtotal equity method	5,961		5,726
Fair value:
Private equity	1,621		1,684
Hedge funds	2,135		2,135
Real estate-related	307		296
Subtotal fair value	4,063		4,115
Total LPs/LLCs	10,024		9,841
Real estate held through direct ownership(1)	2,632		2,466
Derivative instruments	1,028		1,155
Other(2)	1,156		1,064
Total other invested assets	$	14,840	$	14,526

_________ 

(1) As of March 31, 2019 and December 31, 2018, real estate held through direct ownership had mortgage debt of $804 million and $776 million, respectively.

(2) Primarily includes strategic investments made by investment management operations, leveraged leases and member and activity stock held in the Federal Home Loan Banks of New York and Boston. For additional information regarding the Company’s holdings in the Federal Home Loan Banks of New York and Boston, see Note 16 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.

Net Investment Income

The following table sets forth “Net investment income” by investment type, for the periods indicated:

	Three Months Ended March 31,
	2019			2018
	(in millions)
Fixed maturities, available-for-sale(1)	$	3,088		$	2,954
Fixed maturities, held-to-maturity(1)	57			55
Fixed maturities, trading	34			31
Assets supporting experience-rated contractholder liabilities, at fair value	185			191
Equity securities, at fair value	30			35
Commercial mortgage and other loans	600			569
Policy loans	151			152
Other invested assets	205			141
Short-term investments and cash equivalents	118			72
Gross investment income	4,468			4,200
Less: investment expenses	(252		)	(202		)
Net investment income	$	4,216		$	3,998

__________ 

(1) Includes income on credit-linked notes which are reported on the same financial statement line item as related surplus notes, as conditions are met for right to offset.

Realized Investment Gains (Losses), Net

The following table sets forth “Realized investment gains (losses), net,” by investment type, for the periods indicated:

	Three Months Ended March 31,
	2019			2018
	(in millions)
Fixed maturities(1)	$	260		$	78
Commercial mortgage and other loans	10			12
Investment real estate	0			2
LPs/LLCs	(5		)	6
Derivatives(2)	(1,032		)	328
Other	1			(1		)
Realized investment gains (losses), net	$	(766	)	$	425

__________ 

(1) Includes fixed maturity securities classified as available-for-sale and held-to-maturity and excludes fixed maturity securities classified as trading.

(2)

Includes the hedged items offset in qualifying fair value hedge accounting relationships.Net Unrealized Gains (Losses) on Investments within AOCI

The following table sets forth net unrealized gains (losses) on investments, as of the dates indicated:

	March 31, 2019			December 31, 2018
	(in millions)
Fixed maturity securities, available-for-sale—with OTTI	$	251		$	190
Fixed maturity securities, available-for-sale—all other	32,029			21,721
Derivatives designated as cash flow hedges(1)	776			811
Other investments(2)	(2		)	(2		)
Net unrealized gains (losses) on investments	$	33,054		$	22,720

__________ 

(1) For more information on cash flow hedges, see Note 5.

(2)

As of March 31, 2019, there were no net unrealized losses on held-to-maturity securities that were previously transferred from available-for-sale. Includes net unrealized gains on certain joint ventures that are strategic in nature and are included in “Other assets.”Repurchase Agreements and Securities Lending

In the normal course of business, the Company sells securities under agreements to repurchase and enters into securities lending transactions. The following table sets forth the composition of “Securities sold under agreements to repurchase,” as of the dates indicated:

	March 31, 2019						December 31, 2018
	Remaining Contractual Maturities of the Agreements						Remaining Contractual Maturities of the Agreements
	Overnight & Continuous		Up to 30 Days		Total		Overnight & Continuous		Up to 30 Days		Total
	(in millions)
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	780	$	8,718	$	9,498	$	975	$	8,614	$	9,589
U.S. public corporate securities	19		0		19		19		0		19
Residential mortgage-backed securities	0		356		356		0		342		342
Total securities sold under agreements to repurchase(1)	$	799	$	9,074	$	9,873	$	994	$	8,956	$	9,950

__________ 

(1) The Company did not have any agreements with remaining contractual maturities of thirty days or greater, as of the dates indicated.

The following table sets forth the composition of “Cash collateral for loaned securities” which represents the liability to return cash collateral received for the following types of securities loaned, as of the dates indicated:

	March 31, 2019						December 31, 2018
	Remaining Contractual Maturities of the Agreements						Remaining Contractual Maturities of the Agreements
	Overnight & Continuous		Up to 30 Days		Total		Overnight & Continuous		Up to 30 Days		Total
	(in millions)
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	86	$	0	$	86	$	105	$	0	$	105
Obligations of U.S. states and their political subdivisions	47		0		47		88		0		88
Foreign government bonds	440		0		440		325		0		325
U.S. public corporate securities	2,703		0		2,703		2,563		0		2,563
Foreign public corporate securities	673		0		673		693		0		693
Equity securities	144		0		144		155		0		155
Total cash collateral for loaned securities(1)	$	4,093	$	0	$	4,093	$	3,929	$	0	$	3,929

__________ 

(1)

The Company did not have any agreements with remaining contractual maturities of thirty days or greater, as of the dates indicated.

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Variable Interest Entities

3 Months Ended

Mar. 31, 2019

Variable Interest Entity, Measure of Activity [Abstract]

Variable Interest Entities

VARIABLE INTEREST ENTITIES

In the normal course of its activities, the Company enters into relationships with various special-purpose entities and other entities that are deemed to be variable interest entities (“VIEs”). For additional information, see Note 4 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.

Consolidated Variable Interest Entities

The table below reflects the carrying amount and balance sheet caption in which the assets and liabilities of consolidated VIEs are reported. The liabilities primarily comprise obligations under debt instruments issued by the VIEs. The creditors of these VIEs do not have recourse to the Company in excess of the assets contained within the VIEs.

	Consolidated VIEs for which the Company is the Investment Manager(1)				Other Consolidated VIEs(1)
	March 31, 2019		December 31, 2018		March 31, 2019		December 31, 2018
	(in millions)
Fixed maturities, available-for-sale	$	97	$	73	$	282	$	282
Fixed maturities, held-to-maturity	94		95		824		831
Fixed maturities, trading	1,112		1,076		0		0
Assets supporting experience-rated contractholder liabilities	0		0		7		8
Equity securities	50		41		0		0
Commercial mortgage and other loans	751		730		0		0
Other invested assets	1,761		1,526		93		77
Cash and cash equivalents	124		131		0		0
Accrued investment income	5		5		4		4
Other assets	457		463		733		721
Total assets of consolidated VIEs	$	4,451	$	4,140	$	1,943	$	1,923
Other liabilities	$	325	$	295	$	10	$	17
Notes issued by consolidated VIEs(2)	1,225		955		0		0
Total liabilities of consolidated VIEs	$	1,550	$	1,250	$	10	$	17

 __________

(1) Total assets of consolidated VIEs reflect $2,210 million and $2,013 million as of March 31, 2019 and December 31, 2018, respectively, related to VIEs whose beneficial interests are wholly-owned by consolidated subsidiaries.

(2) Recourse is limited to the assets of the respective VIE and does not extend to the general credit of the Company. As of March 31, 2019 and December 31, 2018, the maturities of these obligations were greater than five years.

Unconsolidated Variable Interest Entities

The Company has determined that it is not the primary beneficiary of certain VIEs for which it is the investment manager. The Company’s maximum exposure to loss resulting from its relationship with unconsolidated VIEs for which it is the investment manager is limited to its investment in the VIEs, which was $911 million and $836 million at March 31, 2019 and December 31, 2018, respectively. These investments are reflected in “Fixed maturities, available-for-sale,” “Fixed maturities, trading,” “Equity securities” and “Other invested assets.” There are no liabilities associated with these unconsolidated VIEs on the Company’s Unaudited Interim Consolidated Statements of Financial Position.

In the normal course of its activities, the Company will invest in LPs/LLCs, which include hedge funds, private equity funds and real estate-related funds and may or may not be VIEs. The Company’s maximum exposure to loss on these investments, both VIEs and non-VIEs, is limited to the amount of its investment. The Company classifies these investments as “Other invested assets” and its maximum exposure to loss associated with these entities was $10,024 million and $9,841 million as of March 31, 2019 and December 31, 2018, respectively.

In addition, in the normal course of its activities, the Company will invest in structured investments including VIEs for which it is not the investment manager. These structured investments typically invest in fixed income investments and are managed by third-parties and include asset-backed securities, commercial mortgage-backed securities and residential mortgage-backed securities. The Company’s maximum exposure to loss on these structured investments, both VIEs and non-VIEs, is limited to the amount of its investment. See Note 3 for details regarding the carrying amounts and classification of these assets. The Company has not provided material financial or other support that was not contractually required to these structures. The Company has determined that it is not the primary beneficiary of these structures due to the fact that it does not control these entities.

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Derivative Instruments

3 Months Ended

Mar. 31, 2019

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments

DERIVATIVE INSTRUMENTS

Types of Derivative Instruments and Derivative Strategies

The Company utilizes various derivatives instruments and strategies to manage its risk. Commonly used derivative instruments include, but are not necessarily limited to:

•Interest rate contracts: futures, swaps, forwards, options, swaptions, caps and floors

•Equity contracts: futures, options and total return swaps

•Foreign exchange contracts: futures, options, forwards and swaps

•Credit contracts: single and index reference credit default swaps

Other types of financial contracts that the Company accounts for as derivatives are:

• To-be-announced (“TBA”) forward contracts, loan commitments, embedded derivatives and synthetic guaranteed investment contracts (“GICs”).

For detailed information on these contracts and the related strategies, see Note 5 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.

Primary Risks Managed by Derivatives

The table below provides a summary of the gross notional amount and fair value of derivatives contracts by the primary underlying risks, excluding embedded derivatives and associated reinsurance recoverables. Many derivative instruments contain multiple underlying risks. The fair value amounts below represent the gross fair value of derivative contracts prior to taking into account the netting effects of master netting agreements, cash collateral and non-performance risk (“NPR”). This netting impact results in total derivative assets of $1,018 million and $1,148 million as of March 31, 2019 and December 31, 2018, respectively, and total derivative liabilities of $433 million and $127 million as of March 31, 2019 and December 31, 2018, respectively, reflected in the Unaudited Interim Consolidated Statements of Financial Position.

Primary Underlying Risk /Instrument Type	March 31, 2019							December 31, 2018
			Gross Fair Value							Gross Fair Value
	Notional		Assets		Liabilities			Notional		Assets		Liabilities
	(in millions)
Derivatives Designated as Hedge Accounting Instruments:
Interest Rate
Interest Rate Swaps	$	3,835	$	421	$	(69	)	$	3,885	$	305	$	(67	)
Interest Rate Forwards	0		0		0			600		26		0
Foreign Currency
Foreign Currency Forwards	750		22		(4		)	722		26		(2		)
Currency/Interest Rate
Foreign Currency Swaps	21,372		1,359		(352		)	20,724		1,520		(358		)
Total Derivatives Designated as Hedge Accounting Instruments	$	25,957	$	1,802	$	(425	)	$	25,931	$	1,877	$	(427	)
Derivatives Not Qualifying as Hedge Accounting Instruments:
Interest Rate
Interest Rate Swaps	$	139,741	$	6,685	$	(3,288	)	$	140,963	$	5,792	$	(3,435	)
Interest Rate Futures	16,367		1		(23		)	13,991		23		(2		)
Interest Rate Options	22,383		162		(332		)	24,002		147		(314		)
Interest Rate Forwards	2,504		42		0			5,049		72		0
Foreign Currency
Foreign Currency Forwards	21,897		241		(189		)	19,849		246		(138		)
Foreign Currency Options	1		0		0			2		0		0
Currency/Interest Rate
Foreign Currency Swaps	13,645		800		(351		)	13,784		773		(421		)
Credit
Credit Default Swaps	1,181		20		(5		)	5,207		33		(23		)
Equity
Equity Futures	1,325		0		(7		)	1,141		0		(8		)
Equity Options	68,321		478		(614		)	58,693		384		(554		)
Total Return Swaps	16,691		34		(538		)	17,309		1,131		(86		)
Other
Other(1)	512		0		0			508		0		0
Synthetic GICs	80,168		1		0			79,215		2		0
Total Derivatives Not Qualifying as Hedge Accounting Instruments	$	384,736	$	8,464	$	(5,347	)	$	379,713	$	8,603	$	(4,981	)
Total Derivatives(2)(3)	$	410,693	$	10,266	$	(5,772	)	$	405,644	$	10,480	$	(5,408	)

__________

(1) “Other” primarily includes derivative contracts used to improve the balance of the Company’s tail longevity and mortality risk. Under these contracts, the Company’s gains (losses) are capped at the notional amount.

(2) Excludes embedded derivatives and associated reinsurance recoverables which contain multiple underlying risks. The fair value of these embedded derivatives was a net liability of $10,123 million and $8,959 million as of March 31, 2019 and December 31, 2018, respectively, primarily included in “Future policy benefits.”

(3) Recorded in “Other invested assets” and “Other liabilities” on the Unaudited Interim Consolidated Statements of Financial Position.

As of March 31, 2019, the following amounts were recorded on the Unaudited Interim Consolidated Statements of Financial Position related to the carrying amount of the hedged assets (liabilities) and cumulative basis adjustments included in the carrying amount for fair value hedges.

Balance Sheet Line Item in which Hedged Item is Recorded	Carrying Amount of the Hedged Assets (Liabilities)			Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Assets (Liabilities)(1)
	(in millions)
Fixed maturities, available-for-sale, at fair value	$	421		$	56
Commercial mortgage and other loans	$	34		$	2
Policyholders’ account balances	$	(1,704	)	$	13
Future policy benefits	$	(562	)	$	(77	)

________

(1) There are no fair value hedging adjustments for hedged assets and liabilities for which hedge accounting has been discontinued.

Most of the Company’s derivatives do not qualify for hedge accounting for various reasons. For example: (i) derivatives that economically hedge embedded derivatives do not qualify for hedge accounting because changes in the fair value of the embedded derivatives are already recorded in net income; (ii) derivatives that are utilized as macro hedges of the Company’s exposure to various risks typically do not qualify for hedge accounting because they do not meet the criteria required under portfolio hedge accounting rules; and (iii) synthetic GICs, which are product standalone derivatives, do not qualify as hedging instruments under hedge accounting rules.Offsetting Assets and Liabilities

The following table presents recognized derivative instruments (excluding embedded derivatives and associated reinsurance recoverables), and repurchase and reverse repurchase agreements that are offset in the Unaudited Interim Consolidated Statements of Financial Position, and/or are subject to an enforceable master netting arrangement or similar agreement, irrespective of whether they are offset in the Unaudited Interim Consolidated Statements of Financial Position.

	March 31, 2019
	Gross Amounts of Recognized Financial Instruments		Gross Amounts Offset in the Statements of Financial Position			Net Amounts Presented in the Statements of Financial Position		Financial Instruments/ Collateral(1)			Net Amount
	(in millions)
Offsetting of Financial Assets:
Derivatives(1)	$	10,177	$	(9,247	)	$	930	$	(736	)	$	194
Securities purchased under agreement to resell	1,199		0			1,199		(1,199		)	0
Total assets	$	11,376	$	(9,247	)	$	2,129	$	(1,935	)	$	194
Offsetting of Financial Liabilities:
Derivatives(1)	$	5,764	$	(5,339	)	$	425	$	(152	)	$	273
Securities sold under agreement to repurchase	9,873		0			9,873		(9,873		)	0
Total liabilities	$	15,637	$	(5,339	)	$	10,298	$	(10,025	)	$	273

	December 31, 2018
	Gross Amounts of Recognized Financial Instruments		Gross Amounts Offset in the Statements of Financial Position			Net Amounts Presented in the Statements of Financial Position		Financial Instruments/ Collateral(1)			Net Amount
	(in millions)
Offsetting of Financial Assets:
Derivatives(1)	$	10,407	$	(9,331	)	$	1,076	$	(614	)	$	462
Securities purchased under agreement to resell	986		0			986		(986		)	0
Total assets	$	11,393	$	(9,331	)	$	2,062	$	(1,600	)	$	462
Offsetting of Financial Liabilities:
Derivatives(1)	$	5,387	$	(5,281	)	$	106	$	(45	)	$	61
Securities sold under agreement to repurchase	9,950		0			9,950		(9,950		)	0
Total liabilities	$	15,337	$	(5,281	)	$	10,056	$	(9,995	)	$	61

__________

(1)

Amounts exclude the excess of collateral received/pledged from/to the counterparty.For information regarding the rights of offset associated with the derivative assets and liabilities in the table above, see “—Counterparty Credit Risk” below. For securities purchased under agreements to resell and securities sold under agreements to repurchase, the Company monitors the value of the securities and maintains collateral, as appropriate, to protect against credit exposure. Where the Company has entered into repurchase and resale agreements with the same counterparty, in the event of default, the Company would generally be permitted to exercise rights of offset. For additional information on the Company’s accounting policy for securities repurchase and resale agreements, see Note 2 to the Company’s Consolidated Financial Statements included in the Annual Report on Form 10-K for the year ended December 31, 2018.

Fair Value, Cash Flow and Net Investment Hedges

The primary derivative instruments used by the Company in its fair value, cash flow and net investment hedge accounting relationships are interest rate swaps, currency swaps and currency forwards. These instruments are only designated for hedge accounting in instances where the appropriate criteria are met. The Company does not use futures, options, credit, equity or embedded derivatives in any of its fair value, cash flow or net investment hedge accounting relationships.The following table provides the financial statement classification and impact of derivatives used in qualifying and non-qualifying hedge relationships, including the offset of the hedged item in fair value hedge relationships.

	Three Months Ended March 31, 2019
	Realized Investment Gains (Losses)			Net Investment Income			Other Income (Loss)			Interest Expense		Interest Credited to Policyholders’ Account Balances			Policyholders’ Benefits			AOCI(1)
	(in millions)
Derivatives Designated as Hedge Accounting Instruments:
Fair value hedges
Gains (losses) on derivatives designated as hedge instruments:
Interest Rate	$	(5	)	$	(2	)	$	0		$	0	$	68		$	51		$	0
Currency	(1		)	0			0			0		0			0			0
Total gains (losses) on derivatives designated as hedge instruments	(6		)	(2		)	0			0		68			51			0
Gains (losses) on the hedged item:
Interest Rate	2			5			0			0		(66		)	(46		)	0
Currency	1			1			0			0		0			0			0
Total gains (losses) on hedged item	3			6			0			0		(66		)	(46		)	0
Total gains (losses) on fair value hedges net of hedged item	(3		)	4			0			0		2			5			0
Cash flow hedges
Interest Rate	(1		)	0			0			0		0			0			23
Currency	1			0			0			0		0			0			(9		)
Currency/Interest Rate	(8		)	68			(45		)	0		0			0			(58		)
Total gains (losses) on cash flow hedges	(8		)	68			(45		)	0		0			0			(44		)
Net investment hedges
Currency	0			0			0			0		0			0			1
Currency/Interest Rate	0			0			0			0		0			0			0
Total gains (losses) on net investment hedges	0			0			0			0		0			0			1
Derivatives Not Qualifying as Hedge Accounting Instruments:
Interest Rate	1,389			0			0			0		0			0			0
Currency	(39		)	0			4			0		0			0			0
Currency/Interest Rate	184			0			0			0		0			0			0
Credit	69			0			0			0		0			0			0
Equity	(1,811		)	0			0			0		0			0			0
Other	0			0			0			0		0			0			0
Embedded Derivatives	(812		)	0			0			0		0			0			0
Total gains (losses) on derivatives not qualifying as hedge accounting instruments	(1,020		)	0			4			0		0			0			0
Total	$	(1,031	)	$	72		$	(41	)	$	0	$	2		$	5		$	(43	)

	Three Months Ended March 31, 2018(2)
	Realized Investment Gains (Losses)			Net Investment Income			Other Income (Loss)			Interest Expense		Interest Credited to Policyholders’ Account Balances			AOCI(1)
	(in millions)
Derivatives Designated as Hedge Accounting Instruments:
Fair value hedges
Gains (losses) on derivatives designated as hedge instruments:
Interest Rate	$	17		$	(3	)	$	0		$	0	$	(83	)	$	0
Currency	2			0			0			0		0			0
Total gains (losses) on derivatives designated as hedge instruments	19			(3		)	0			0		(83		)	0
Gains (losses) on the hedged item:
Interest Rate	(20		)	14			0			0		86			0
Currency	(2		)	1			0			0		0			0
Total gains (losses) on hedged item	(22		)	15			0			0		86			0
Total gains (losses) on fair value hedges net of hedged item	(3		)	12			0			0		3			0
Cash flow hedges
Interest Rate	0			0			0			0		0			7
Currency	(2		)	0			0			0		0			(8		)
Currency/Interest Rate	(6		)	47			(91		)	0		0			(582		)
Total gains (losses) on cash flow hedges	(8		)	47			(91		)	0		0			(583		)
Net investment hedges
Currency	(2		)	0			0			0		0			(2		)
Currency/Interest Rate	0			0			0			0		0			0
Total gains (losses) on net investment hedges	(2		)	0			0			0		0			(2		)
Derivatives Not Qualifying as Hedge Accounting Instruments:
Interest Rate	(1,516		)	0			0			0		0			0
Currency	414			0			1			0		0			0
Currency/Interest Rate	(549		)	0			(1		)	0		0			0
Credit	(5		)	0			0			0		0			0
Equity	10			0			0			0		0			0
Other	0			0			0			0		0			0
Embedded Derivatives	1,979			0			0			0		0			0
Total gains (losses) on derivatives not qualifying as hedge accounting instruments	333			0			0			0		0			0
Total	$	320		$	59		$	(91	)	$	0	$	3		$	(585	)

_________

(1) Net change in AOCI.

(2)

Prior period amounts have been updated to conform to current period presentation. 

Presented below is a rollforward of current period cash flow hedges in AOCI before taxes:  

	(in millions)
Balance, December 31, 2018	$	811
Cumulative-effect adjustment from the adoption of ASU 2017-12(1)	9
Amount recorded in AOCI
Interest Rate	22
Currency	(8		)
Currency/Interest Rate	(43		)
Total amount recorded in AOCI	(29		)
Amount reclassified from AOCI to income
Interest Rate	1
Currency	(1		)
Currency/Interest Rate	(15		)
Total amount reclassified from AOCI to income	(15		)
Balance, March 31, 2019	$	776

_________

(1) See Note 2 for details.

The changes in fair value of cash flow hedges are deferred in AOCI and are included in “Net unrealized investment gains (losses)” in the Unaudited Interim Consolidated Statements of Comprehensive Income; these amounts are then reclassified to earnings when the hedged item affects earnings. Using March 31, 2019 values, it is estimated that a pre-tax gain of approximately $246 million is expected to be reclassified from AOCI to earnings during the subsequent twelve months ending March 31, 2020, offset by amounts pertaining to the hedged items.

The exposures the Company is hedging with these qualifying cash flow hedges include the variability of future cash flows from forecasted transactions denominated in foreign currencies, the purchases of invested assets, and the receipt or payment of variable interest on existing financial instruments. The maximum length of time over which the Company is hedging its exposure to the variability in future cash flows for forecasted transactions is 5 years.

There were no material amounts reclassified from AOCI into earnings relating to instances in which the Company discontinued cash flow hedge accounting because the forecasted transaction did not occur by the anticipated date or within the additional time period permitted by the authoritative guidance for the accounting for derivatives and hedging. In addition, there were no instances in which the Company discontinued fair value hedge accounting due to a hedged firm commitment no longer qualifying as a fair value hedge.

For effective net investment hedges, the amounts, before applicable taxes, recorded in the cumulative translation adjustment account within AOCI were $533 million and $532 million as of March 31, 2019 and December 31, 2018, respectively.

Credit Derivatives

Credit derivatives, where the Company has written credit protection on a single name reference, had outstanding notional amounts of $103 million and $110 million as of March 31, 2019 and December 31, 2018, respectively. These credit derivatives are reported at fair value as an asset of $1 million as of both March 31, 2019 and December 31, 2018. As of March 31, 2019, the notional amount of these credit derivatives had the following NAIC ratings: $36 million in NAIC 1; $61 million in NAIC 2; $4 million in NAIC 3; and $2 million in NAIC 6. The Company has also written credit protection on certain index references with notional amounts of $973 million and $4,953 million as of March 31, 2019 and December 31, 2018, respectively. These credit derivatives are reported at fair value as an asset of $15 million and $10 million as of March 31, 2019 and December 31, 2018, respectively. As of March 31, 2019, the notional amount of these credit derivatives had the following NAIC ratings: $53 million in NAIC 1; $693 million in NAIC 3; and $227 million NAIC 6. NAIC designations are based on the lowest rated single name reference included in the index.

The Company’s maximum amount at risk under these credit derivatives equals the aforementioned notional amounts and assumes the value of the underlying referenced securities become worthless. These single name credit derivatives have maturities of less than 6 years, while the index references have maturities of less than 43 years.

In addition to writing credit protection, the Company has purchased credit protection using credit derivatives in order to hedge specific credit exposures in the Company’s investment portfolio. As of March 31, 2019 and December 31, 2018, the Company had $105 million and $145 million of outstanding notional amounts and reported at fair value as a liability of $1 million for both periods.Counterparty Credit Risk

The Company is exposed to credit-related losses in the event of non-performance by counterparties to financial derivative transactions with a positive fair value. The Company manages credit risk by: (i) entering into derivative transactions with highly rated major international financial institutions and other creditworthy counterparties governed by master netting agreements, as applicable; (ii) trading through central clearing and over-the-counter (“OTC”) parties; (iii) obtaining collateral, such as cash and securities, when appropriate; and (iv) setting limits on single party credit exposures which are subject to periodic management review.

Substantially all of the Company’s derivative agreements have zero thresholds which require daily full collateralization by the party in a liability position. In addition, certain of the Company’s derivative agreements contain credit-risk related contingent features; if the credit rating of one of the parties to the derivative agreement is to fall below a certain level, the party with positive fair value could request termination at the then fair value or demand immediate full collateralization from the party whose credit rating fell and is in a net liability position.

As of March 31, 2019, there were no net liability derivative positions with counterparties with credit risk-related contingent features; as such, all derivatives have been appropriately collateralized by the Company or the counterparty in accordance with the terms of the derivative agreements.

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Fair Value of Assets and Liabilities

3 Months Ended

Mar. 31, 2019

Fair Value Disclosures [Abstract]

Fair Value of Assets and Liabilities

FAIR VALUE OF ASSETS AND LIABILITIES

Fair Value Measurement—Fair value represents the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The authoritative fair value guidance establishes a framework for measuring fair value that includes a hierarchy used to classify the inputs used in measuring fair value. The level in the fair value hierarchy within which the fair value measurement falls is determined based on the lowest level input that is significant to the fair value measurement. The levels of the fair value hierarchy are as follows:

Level 1—Fair value is based on unadjusted quoted prices in active markets that are accessible to the Company for identical assets or liabilities.

Level 2—Fair value is based on significant inputs, other than quoted prices included in Level 1, that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability through corroboration with observable market data. Level 2 inputs include quoted market prices in active markets for similar assets and liabilities, quoted market prices in markets that are not active for identical or similar assets or liabilities, and other market observable inputs.

 Level 3—Fair value is based on at least one significant unobservable input for the asset or liability. The assets and liabilities in this category may require significant judgment or estimation in determining the fair value.

For a discussion of Company’s valuation methodologies for assets and liabilities measured at fair value and the fair value hierarchy, see Note 6 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.

 Assets and Liabilities by Hierarchy Level—The tables below present the balances of assets and liabilities reported at fair value on a recurring basis, as of the dates indicated.

	As of March 31, 2019
	Level 1		Level 2		Level 3		Netting(1)			Total
	(in millions)
Fixed maturities, available-for-sale:
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	0	$	32,723	$	88	$			$	32,811
Obligations of U.S. states and their political subdivisions	0		10,844		4					10,848
Foreign government bonds	0		115,278		138					115,416
U.S. corporate public securities	0		87,231		118					87,349
U.S. corporate private securities(2)	0		32,090		1,774					33,864
Foreign corporate public securities	0		29,694		69					29,763
Foreign corporate private securities	0		25,333		796					26,129
Asset-backed securities(3)	0		11,796		893					12,689
Commercial mortgage-backed securities	0		13,114		945					14,059
Residential mortgage-backed securities	0		2,923		77					3,000
Subtotal	0		361,026		4,902					365,928
Assets supporting experience-rated contractholder liabilities:
U.S. Treasury securities and obligations of U.S. government authorities and agencies	0		258		0					258
Obligations of U.S. states and their political subdivisions	0		203		0					203
Foreign government bonds	0		849		29					878
Corporate securities	0		12,980		592					13,572
Asset-backed securities(3)	0		1,591		60					1,651
Commercial mortgage-backed securities	0		2,297		0					2,297
Residential mortgage-backed securities	0		855		0					855
Equity securities	1,324		261		1					1,586
All other(4)	0		264		0					264
Subtotal	1,324		19,558		682					21,564
Fixed maturities, trading	0		3,195		240					3,435
Equity securities	5,188		779		674					6,641
Commercial mortgage and other loans	0		463		0					463
Other invested assets(5)	3		10,261		373		(9,247		)	1,390
Short-term investments	2,412		2,749		168					5,329
Cash equivalents	1,636		5,318		1					6,955
Other assets	0		0		48					48
Separate account assets(6)(7)	43,565		227,125		1,635					272,325
Total assets	$	54,128	$	630,474	$	8,723	$	(9,247	)	$	684,078
Future policy benefits(8)	$	0	$	0	$	10,025	$			$	10,025
Other liabilities	35		5,740		146		(5,339		)	582
Notes issued by consolidated VIEs	0		0		817					817
Total liabilities	$	35	$	5,740	$	10,988	$	(5,339	)	$	11,424

	As of December 31, 2018
	Level 1		Level 2		Level 3		Netting(1)			Total
	(in millions)
Fixed maturities, available-for-sale:
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	0	$	30,513	$	81	$			$	30,594
Obligations of U.S. states and their political subdivisions	0		10,488		5					10,493
Foreign government bonds	0		112,985		125					113,110
U.S. corporate public securities	0		83,282		133					83,415
U.S. corporate private securities(2)	0		31,265		1,755					33,020
Foreign corporate public securities	0		29,148		53					29,201
Foreign corporate private securities	0		23,787		744					24,531
Asset-backed securities(3)	0		11,726		1,247					12,973
Commercial mortgage-backed securities	0		13,302		13					13,315
Residential mortgage-backed securities	0		2,925		79					3,004
Subtotal	0		349,421		4,235					353,656
Assets supporting experience-rated contractholder liabilities:
U.S. Treasury securities and obligations of U.S. government authorities and agencies	0		381		0					381
Obligations of U.S. states and their political subdivisions	0		196		0					196
Foreign government bonds	0		858		225					1,083
Corporate securities	0		12,675		444					13,119
Asset-backed securities(3)	0		1,516		149					1,665
Commercial mortgage-backed securities	0		2,324		0					2,324
Residential mortgage-backed securities	0		811		0					811
Equity securities	1,222		237		1					1,460
All other(4)	0		215		0					215
Subtotal	1,222		19,213		819					21,254
Fixed maturities, trading	0		3,037		206					3,243
Equity securities	4,819		610		671					6,100
Commercial mortgage and other loans	0		763		0					763
Other invested assets(5)	23		10,454		263		(9,331		)	1,409
Short-term investments	2,713		2,691		89					5,493
Cash equivalents	2,848		6,553		77					9,478
Other assets	0		0		25					25
Separate account assets(6)(7)	39,534		212,998		1,534					254,066
Total assets	$	51,159	$	605,740	$	7,919	$	(9,331	)	$	655,487
Future policy benefits(8)	$	0	$	0	$	8,926	$			$	8,926
Other liabilities	18		5,398		56		(5,281		)	191
Notes issued by consolidated VIEs	0		0		595					595
Total liabilities	$	18	$	5,398	$	9,577	$	(5,281	)	$	9,712

__________

(1) “Netting” amounts represent cash collateral of $3,908 million and $4,050 million as of March 31, 2019 and December 31, 2018, respectively, and the impact of offsetting asset and liability positions held with the same counterparty, subject to master netting arrangements.

(2) Excludes notes with both fair value and carrying amount of $4,216 million and $4,216 million, as of March 31, 2019 and December 31, 2018, respectively, which have been offset with the associated payables under a netting agreement.

(3) Includes credit-tranched securities collateralized by syndicated bank loans, sub-prime mortgages, auto loans, credit cards, education loans and other asset types.

(4) All other represents cash equivalents and short-term investments.

(5) Other invested assets excluded from the fair value hierarchy include certain hedge funds, private equity funds and other funds for which fair value is measured at net asset value (“NAV”) per share (or its equivalent) as a practical expedient. As of March 31, 2019 and December 31, 2018, the fair values of such investments were $4,063 million and $4,115 million respectively.

(6) Separate account assets included in the fair value hierarchy exclude investments in entities that calculate NAV per share (or its equivalent) as a practical expedient. Such investments excluded from the fair value hierarchy include investments in real estate, hedge funds and other invested assets. As of March 31, 2019 and December 31, 2018, the fair value of such investments was $24,919 million and $25,070 million, respectively.

(7) Separate account assets represent segregated funds that are invested for certain customers. Investment risks associated with market value changes are borne by the customers, except to the extent of minimum guarantees made by the Company with respect to certain accounts. Separate account liabilities are not included in the above table as they are reported at contract value and not fair value in the Company’s Unaudited Interim Consolidated Statements of Financial Position.

(8) As of March 31, 2019, the net embedded derivative liability position of $10.0 billion includes $0.7 billion of embedded derivatives in an asset position and $10.7 billion of embedded derivatives in a liability position. As of December 31, 2018, the net embedded derivative liability position of $8.9 billion includes $0.7 billion of embedded derivatives in an asset position and $9.6 billion of embedded derivatives in a liability position.

Quantitative Information Regarding Internally-Priced Level 3 Assets and Liabilities—The tables below present quantitative information on significant internally-priced Level 3 assets and liabilities.

	As of March 31, 2019
	Fair Value		Valuation Techniques	Unobservable Inputs	Minimum		Maximum	Weighted Average	Impact of Increase in Input on Fair Value(1)
	(in millions)
Assets:
Corporate securities(2)	$	1,362	Discounted  cash flow	Discount rate	0.49%	-	20.00%	8.23%	Decrease
			Market comparables	EBITDA multiples(3)	4.5X		9.2X	8.1X	Increase
			Liquidation	Liquidation value	12.35%	-	100.00%	62.59%	Increase
Separate account assets-commercial mortgage loans(4)	$	822	Discounted cash flow	Spread	1.06%	-	2.45%	1.22%	Decrease
Liabilities:
Future policy benefits(5)	$	10,025	Discounted cash flow	Lapse rate(6)	1%	-	13%		Decrease
				Spread over LIBOR(7)	0.12%	-	1.35%		Decrease
				Utilization rate(8)	50%	-	97%		Increase
				Withdrawal rate	See table footnote (9) below.
				Mortality rate(10)	0%	-	15%		Decrease
				Equity volatility curve	15%	-	22%		Increase

	As of December 31, 2018
	Fair Value		Valuation Techniques	Unobservable Inputs	Minimum		Maximum	Weighted Average	Impact of Increase in Input on Fair Value(1)
	(in millions)
Assets:
Corporate securities(2)	$	1,392	Discounted  cash flow	Discount rate	0.57%	-	20%	8.58%	Decrease
			Market comparables	EBITDA multiples(3)	4.5X	-	8.5X	8.1X	Increase
			Liquidation	Liquidation value	11.77%	-	94.00%	32.16%	Increase
Separate account assets-commercial mortgage loans(4)	$	785	Discounted cash flow	Spread	1.12%	-	2.55%	1.29%	Decrease
Liabilities:
Future policy benefits(5)	$	8,926	Discounted cash flow	Lapse rate(6)	1%	-	13%		Decrease
				Spread over LIBOR(7)	0.36%	-	1.60%		Decrease
				Utilization rate(8)	50%	-	97%		Increase
				Withdrawal rate	See table footnote (9) below.
				Mortality rate(10)	0%	-	15%		Decrease
				Equity volatility curve	18%	-	22%		Increase

__________ 

(1) Conversely, the impact of a decrease in input would have the opposite impact on fair value as that presented in the table.

(2) Includes assets classified as fixed maturities available-for-sale, assets supporting experience-rated contractholder liabilities and fixed maturities trading.

(3) Represents multiples of earnings before interest, taxes, depreciation and amortization (“EBITDA”), and are amounts used when the Company has determined that market participants would use such multiples when valuing the investments.

(4) Changes in the fair value of separate account assets are borne by customers and thus are offset by changes in separate account liabilities on the Company’s Unaudited Interim Consolidated Statements of Financial Position. As a result, changes in value associated with these investments are not reflected in the Company’s Unaudited Interim Consolidated Statements of Operations.

(5) Future policy benefits primarily represent general account liabilities for the living benefit features of the Company’s variable annuity contracts which are accounted for as embedded derivatives. Since the valuation methodology for these liabilities uses a range of inputs that vary at the contract level over the cash flow projection period, presenting a range, rather than weighted average, is a more meaningful representation of the unobservable inputs used in the valuation.

(6) Lapse rates are adjusted at the contract level based on the in-the-moneyness of the living benefit and reflect other factors, such as the applicability of any surrender charges. Lapse rates are reduced when contracts are more in-the-money. Lapse rates are also generally assumed to be lower for the period where surrender charges apply.

(7) The spread over the London Inter-Bank Offered Rate (“LIBOR”) swap curve represents the premium added to the proxy for the risk-free rate (LIBOR) to reflect our estimates of rates that a market participant would use to value the living benefit contracts in both the accumulation and payout phases. This spread includes an estimate of NPR, which is the risk that the obligation will not be fulfilled by the Company. NPR is primarily estimated by utilizing the credit spreads associated with issuing funding agreements, adjusted for any illiquidity risk premium. In order to reflect the financial strength ratings of the Company, credit spreads associated with funding agreements, as opposed to credit spread associated with debt, are utilized in developing this estimate because both funding agreements and living benefit contracts are insurance liabilities and are therefore senior to debt.

(8) The utilization rate assumption estimates the percentage of contracts that will utilize the benefit during the contract duration, and begin lifetime withdrawals at various time intervals from contract inception. The remaining contractholders are assumed to either begin lifetime withdrawals immediately or never utilize the benefit. Utilization assumptions may vary by product type, tax status and age. The impact of changes in these assumptions is highly dependent on the product type, the age of the contractholder at the time of the sale and the timing of the first lifetime income withdrawal. Range reflects the utilization rate for the vast majority of business with living benefits.

(9) The withdrawal rate assumption estimates the magnitude of annual contractholder withdrawals relative to the maximum allowable amount under the contract. These assumptions vary based on the age of the contractholder, the tax status of the contract and the duration since the contractholder began lifetime withdrawals. As of March 31, 2019 and December 31, 2018, the minimum withdrawal rate assumption is 78% and the maximum withdrawal rate assumption may be greater than 100%. The fair value of the liability will generally increase the closer the withdrawal rate is to 100% and decrease as the withdrawal rate moves further away from 100%.

(10) Range reflects the mortality rate for the vast majority of business with living benefits, with policyholders ranging from 50 to 90 years old. While the majority of living benefits have a minimum age requirement, certain benefits do not have an age restriction. This results in contractholders for certain benefits with mortality rates approaching 0%. Based on historical experience, the Company applies a set of age and duration specific mortality rate adjustments compared to standard industry tables. A mortality improvement assumption is also incorporated into the overall mortality table.

Interrelationships Between Unobservable Inputs—In addition to the sensitivities of fair value measurements to changes in each unobservable input in isolation, as reflected in the table above, interrelationships between these inputs may also exist, such that a change in one unobservable input may give rise to a change in another or multiple inputs. For the discussion of the relationships between unobservable inputs as well as market factors that may affect the range of inputs used in the valuation of Level 3 assets and liabilities, see Note 6 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.

Changes in Level 3 Assets and Liabilities—The following tables describe changes in fair values of Level 3 assets and liabilities as of the dates indicated, as well as the portion of gains or losses included in income attributable to unrealized gains or losses related to those assets and liabilities still held at the end of their respective periods. When a determination is made to classify assets and liabilities within Level 3, the determination is based on significance of the unobservable inputs in the overall fair value measurement. All transfers are based on changes in the observability of the valuation inputs, including the availability of pricing service information that the Company can validate. All transfers are generally reported at the value as of the beginning of the quarter in which transfers occur for any such assets still held at the end of the quarter.

	Three Months Ended March 31, 2019
	Fair Value, beginning of period			Total realized and unrealized gains (losses)			Purchases		Sales			Issuances			Settlements			Other(1)			Transfers into Level 3		Transfers out of Level 3			Fair Value, end of period			Unrealized gains (losses) for assets still held(2)
	(in millions)
Fixed maturities, available-for-sale:
U.S. government	$	81		$	0		$	7	$	0		$	0		$	0		$	0		$	0	$	0		$	88		$	0
U.S. states	5			0			0		0			0			(1		)	0			0		0			4			0
Foreign government	125			3			0		0			0			0			1			9		0			138			0
Corporate securities(3)	2,685			4			319		(12		)	0			(379		)	(2		)	164		(22		)	2,757			(21		)
Structured securities(4)	1,339			17			318		0			0			(231		)	(2		)	733		(259		)	1,915			0
Assets supporting experience-rated contractholder liabilities:
Foreign government	225			0			0		0			0			0			(196		)	0		0			29			0
Corporate securities(3)	444			5			27		0			0			(76		)	196			0		(4		)	592			(5		)
Structured securities(4)	149			0			6		0			0			(21		)	0			0		(74		)	60			0
Equity securities	1			0			0		0			0			0			0			0		0			1			0
All other activity	0			0			0		0			0			0			0			0		0			0			0
Other assets:
Fixed maturities, trading	206			(4		)	38		(1		)	0			0			2			0		(1		)	240			0
Equity securities	671			8			23		(11		)	0			(15		)	(2		)	0		0			674			7
Other invested assets	263			(1		)	157		0			0			(42		)	(4		)	0		0			373			(1		)
Short-term investments	89			0			153		0			0			(74		)	0			0		0			168			0
Cash equivalents	77			0			1		0			0			(77		)	0			0		0			1			0
Other assets	25			14			9		0			0			0			0			0		0			48			14
Separate account assets(5)	1,534			81			89		(11		)	0			(23		)	0			0		(35		)	1,635			74
Liabilities:
Future policy benefits	(8,926		)	(810		)	0		0			(290		)	0			1			0		0			(10,025		)	(879		)
Other liabilities	(56		)	(51		)	0		0			(30		)	(6		)	(3		)	0		0			(146		)	(51		)
Notes issued by consolidated VIEs	(595		)	(2		)	0		0			(858		)	638			0			0		0			(817		)	(2		)

	Three Months Ended March 31, 2019
	Total realized and unrealized gains (losses)												Unrealized gains (losses) for assets still held(2)
	Realized investment gains (losses), net			Other income			Interest credited to policyholders’ account balances		Included in other comprehensive income (losses)		Net investment income		Realized investment gains (losses), net			Other income			Interest credited to policyholders’ account balances
	(in millions)
Fixed maturities, available-for-sale	$	(2	)	$	0		$	0	$	22	$	4	$	(21	)	$	0		$	0
Assets supporting experience-rated contractholder liabilities	0			3			0		0		2		0			(5		)	0
Other assets:
Fixed maturities, trading	0			(4		)	0		0		0		0			0			0
Equity securities	0			8			0		0		0		0			7			0
Other invested assets	(1		)	0			0		0		0		(1		)	0			0
Short-term investments	0			0			0		0		0		0			0			0
Cash equivalents	0			0			0		0		0		0			0			0
Other assets	14			0			0		0		0		14			0			0
Separate account assets(5)	0			0			80		0		1		0			0			74
Liabilities:
Future policy benefits	(810		)	0			0		0		0		(879		)	0			0
Other liabilities	(51		)	0			0		0		0		(51		)	0			0
Notes issued by consolidated VIEs	(2		)	0			0		0		0		(2		)	0			0

	Three Months Ended March 31, 2018
	Fair Value, beginning of period			Total realized and unrealized gains (losses)			Purchases		Sales			Issuances			Settlements			Other(1)			Transfers into Level 3		Transfers out of Level 3			Fair Value, end of period			Unrealized gains (losses) for assets still held(2)
	(in millions)
Fixed maturities, available-for-sale:
U.S. government	$	52		$	0		$	7	$	0		$	0		$	0		$	0		$	0	$	0		$	59		$	0
U.S. states	5			0			0		0			0			0			0			0		0			5			0
Foreign government	148			0			0		0			0			0			1			5		(26		)	128			0
Corporate securities(3)	2,776			11			118		(1		)	0			(169		)	12			60		(72		)	2,735			(9		)
Structured securities(4)	6,715			(15		)	1,548		(66		)	0			(649		)	30			1,071		(1,735		)	6,899			0
Assets supporting experience-rated contractholder liabilities:
Foreign government	223			(3		)	0		0			0			0			0			0		0			220			(4		)
Corporate securities(3)	462			1			24		0			0			(18		)	0			0		(1		)	468			0
Structured securities(4)	722			0			3		0			0			(13		)	0			28		(76		)	664			0
Equity securities	4			1			0		0			0			0			0			0		0			5			1
All other activity	7			0			19		0			0			(19		)	0			0		0			7			0
Other assets:
Fixed maturities, trading	156			(2		)	40		(4		)	0			0			5			11		(2		)	204			4
Equity securities	795			14			7		(17		)	0			(37		)	26			0		(3		)	785			13
Other invested assets	137			8			1		0			0			0			(2		)	0		0			144			1
Short-term investments	8			(1		)	14		0			0			(12		)	1			0		0			10			(1		)
Cash equivalents	0			0			0		0			0			0			0			0		0			0			0
Other assets	13			(13		)	0		0			0			0			0			0		0			0			(13		)
Separate account assets(5)	2,122			(33		)	237		(8		)	0			(121		)	0			195		(32		)	2,360			(26		)
Liabilities:
Future policy benefits	(8,720		)	2,026			0		0			(287		)	0			0			0		0			(6,981		)	1,937
Other liabilities	(50		)	(19		)	10		0			0			2			1			0		0			(56		)	(13		)
Notes issued by consolidated VIEs	(1,196		)	(3		)	0		0			0			0			587			0		0			(612		)	(3		)

	Three Months Ended March 31, 2018
	Total realized and unrealized gains (losses)														Unrealized gains (losses) for assets still held(2)
	Realized investment gains (losses), net			Other income			Interest credited to policyholders’ account balances			Included in other comprehensive income (losses)			Net investment income		Realized investment gains (losses), net			Other income			Interest credited to policyholders’ account balances
	(in millions)
Fixed maturities, available-for-sale	$	6		$	0		$	0		$	(14	)	$	4	$	(9	)	$	0		$	0
Assets supporting experience-rated contractholder liabilities	0			(2		)	0			0			1		0			(3		)	0
Other assets:
Fixed maturities, trading	0			(2		)	0			0			0		0			4			0
Equity securities	0			14			0			0			0		0			13			0
Other invested assets	8			0			0			0			0		1			0			0
Short-term investments	(1		)	0			0			0			0		(1		)	0			0
Cash equivalents	0			0			0			0			0		0			0			0
Other assets	(13		)	0			0			0			0		(13		)	0			0
Separate account assets(5)	0			0			(33		)	0			0		0			0			(26		)
Liabilities:
Future policy benefits	2,026			0			0			0			0		1,937			0			0
Other liabilities	(19		)	0			0			0			0		(13		)	0			0
Notes issued by consolidated VIEs	(3		)	0			0			0			0		(3		)	0			0

__________

(1) Other, for the periods ended March 31, 2019 and March 31, 2018, primarily represent deconsolidation of VIE, reclassifications of certain assets between reporting categories and foreign currency translation.

(2) Unrealized gains or losses related to assets still held at the end of the period do not include amortization or accretion of premiums and discounts.

(3) Includes U.S. corporate public, U.S. corporate private, foreign corporate public and foreign corporate private securities.

(4) Includes asset-backed, commercial mortgage-backed and residential mortgage-backed securities.

(5)

Separate account assets represent segregated funds that are invested for certain customers. Investment risks associated with market value changes are borne by the customers, except to the extent of minimum guarantees made by the Company with respect to certain accounts. Separate account liabilities are not included in the above table as they are reported at contract value and not fair value in the Company’s Unaudited Interim Consolidated Statements of Financial Position.Derivative Fair Value Information

The following tables present the balances of derivative assets and liabilities measured at fair value on a recurring basis, as of the date indicated, by primary underlying risk. These tables include NPR and exclude embedded derivatives and associated reinsurance recoverables. The derivative assets and liabilities shown below are included in “Other invested assets” or “Other liabilities” in the tables contained within the sections “—Assets and Liabilities by Hierarchy Level” and “—Changes in Level 3 Assets and Liabilities,” above.

	As of March 31, 2019
	Level 1		Level 2		Level 3		Netting(1)			Total
	(in millions)
Derivative Assets:
Interest Rate	$	1	$	7,309	$	1	$			$	7,311
Currency	0		263		0					263
Credit	0		20		0					20
Currency/Interest Rate	0		2,159		0					2,159
Equity	1		511		0					512
Other	0		0		0					0
Netting(1)							(9,247		)	(9,247		)
Total derivative assets	$	2	$	10,262	$	1	$	(9,247	)	$	1,018
Derivative Liabilities:
Interest Rate	$	23	$	3,689	$	0	$			$	3,712
Currency	0		193		0					193
Credit	0		5		0					5
Currency/Interest Rate	0		703		0					703
Equity	7		1,152		0					1,159
Other	0		0		0					0
Netting(1)							(5,339		)	(5,339		)
Total derivative liabilities	$	30	$	5,742	$	0	$	(5,339	)	$	433

	As of December 31, 2018
	Level 1		Level 2		Level 3		Netting(1)			Total
	(in millions)
Derivative Assets:
Interest Rate	$	23	$	6,341	$	2	$			$	6,366
Currency	0		273		0					273
Credit	0		33		0					33
Currency/Interest Rate	0		2,292		0					2,292
Equity	0		1,515		0					1,515
Other	0		0		0					0
Netting(1)							(9,331		)	(9,331		)
Total derivative assets	$	23	$	10,454	$	2	$	(9,331	)	$	1,148
Derivative Liabilities:
Interest Rate	$	2	$	3,818	$	0	$			$	3,820
Currency	0		140		0					140
Credit	0		23		0					23
Currency/Interest Rate	0		778		0					778
Equity	7		640		0					647
Other	0		0		0					0
Netting(1)							(5,281		)	(5,281		)
Total derivative liabilities	$	9	$	5,399	$	0	$	(5,281	)	$	127

__________ 

(1) “Netting” amounts represent cash collateral and the impact of offsetting asset and liability positions held with the same counterparty, subject to master netting agreement.

Changes in Level 3 derivative assets and liabilities—The following tables provide a summary of the changes in fair value of Level 3 derivative assets and liabilities as of the dates indicated, as well as the portion of gains or losses included in income, attributable to unrealized gains or losses related to those assets and liabilities still held at the end of their respective periods.

	Three Months Ended March 31, 2019
	Fair Value, beginning of period		Total realized and unrealized gains (losses)(1)			Purchases		Sales		Issuances		Settlements		Other		Transfers into Level 3(2)		Transfers out of Level 3(2)		Fair Value, end of period		Unrealized gains (losses) for assets still held(1)
	(in millions)
Net Derivative - Equity	$	0	$	0		$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0
Net Derivative - Interest Rate	2		(1		)	0		0		0		0		0		0		0		1		(1		)

	Three Months Ended March 31, 2018
	Fair Value, beginning of period			Total realized and unrealized gains (losses)(1)		Purchases		Sales		Issuances		Settlements		Other(3)			Transfers into Level 3(2)		Transfers out of Level 3(2)		Fair Value, end of period		Unrealized gains (losses) for assets still held(1)
	(in millions)
Net Derivative - Equity	$	10		$	0	$	0	$	0	$	0	$	0	$	(5	)	$	1	$	0	$	6	$	1
Net Derivative - Interest Rate	(3		)	9		0		0		0		0		0			0		0		6		8

__________ 

(1) Total realized and unrealized gains (losses) as well as unrealized gains (losses) for assets still held at the end of the period are recorded in “Realized investment gains (losses), net.”

(2) Transfers into or out of Level 3 are generally reported at the value as of the beginning of the quarter in which the transfers occur for any such positions still held at the end of the quarter.

(3)

Represents conversion of warrants to equity shares.Nonrecurring Fair Value Measurements—The following tables represent information for assets measured at fair value on a nonrecurring basis. The fair value measurement is nonrecurring as these assets are measured at fair value only when there is a triggering event (e.g., an evidence of impairment). Assets included in the table are those that were impaired during the respective reporting periods and that are still held as of the reporting date. The estimated fair values for these amounts were determined using significant unobservable inputs (Level 3).

	Three Months Ended March 31,
	2019			2018
	(in millions)
Realized investment gains (losses) net:
Commercial mortgage loans(1)	$	0		$	0
Mortgage servicing rights(2)	$	(1	)	$	2

	March 31, 2019		December 31, 2018
	(in millions)
Carrying value after measurement as of period end:
Commercial mortgage loans(1)	$	14	$	47
Mortgage servicing rights(2)	$	70	$	73

__________ 

(1) Commercial mortgage loans are valued based on discounted cash flows utilizing market rates or the fair value of the underlying real estate collateral.

(2)

Mortgage servicing rights are valued using a discounted cash flow model. The model incorporates assumptions for servicing revenues, which are adjusted for expected prepayments, delinquency rates, escrow deposit income and estimated loan servicing expenses. The discount rates incorporated into the model are determined based on the estimated returns a market participant would require for this business plus a liquidity and risk premium. This estimate includes available relevant data from any active market sales of mortgage servicing rights.Fair Value Option

The fair value option allows the Company to elect fair value as an alternative measurement for selected financial assets and financial liabilities not otherwise reported at fair value. Such elections have been made by the Company to help mitigate volatility in earnings that result from different measurement attributes. Electing the fair value option also allows the Company to achieve consistent accounting for certain assets and liabilities. Changes in fair value are reflected in “Realized investment gains (losses), net” for commercial mortgage and other loans and “Other income (loss)” for other assets and notes issued by consolidated VIEs. Changes in fair value due to instrument-specific credit risk are estimated using changes in credit spreads and quality ratings for the period reported. Interest income on commercial mortgage and other loans is included in “Net investment income.” Interest income on these loans is recorded based on the effective interest rates as determined at the closing of the loan.

The following tables present information regarding assets and liabilities where the fair value option has been elected.

	Three Months Ended March 31,
	2019		2018
	(in millions)
Liabilities:
Notes issued by consolidated VIEs:
Changes in fair value	$	2	$	3

	Three Months Ended March 31,
	2019		2018
	(in millions)
Commercial mortgage and other loans:
Interest income	$	6	$	2
Notes issued by consolidated VIEs:
Interest expense	$	9	$	9

	March 31, 2019		December 31, 2018
	(in millions)
Commercial mortgage and other loans(1):
Fair value as of period end	$	463	$	763
Aggregate contractual principal as of period end	$	457	$	754
Other assets:
Fair value as of period end	$	10	$	10
Notes issued by consolidated VIEs:
Fair value as of period end	$	817	$	595
Aggregate contractual principal as of period end	$	857	$	632

__________ 

(1)

As of March 31, 2019, for loans for which the fair value option has been elected, there were no loans in non-accrual status and none of the loans were more than 90 days past due and still accruing.Fair Value of Financial Instruments

The table below presents the carrying amount and fair value by fair value hierarchy level of certain financial instruments that are not reported at fair value. The financial instruments presented below are reported at carrying value on the Company’s Unaudited Interim Consolidated Statements of Financial Position. In some cases, as described below, the carrying amount equals or approximates fair value.

 

	March 31, 2019
	Fair Value								Carrying Amount(1)
	Level 1		Level 2		Level 3		Total		Total
	(in millions)
Assets:
Fixed maturities, held-to-maturity(2)	$	0	$	1,468	$	897	$	2,365	$	1,982
Assets supporting experience-rated contractholders liabilities	52		52		0		104		104
Commercial mortgage and other loans	0		108		61,512		61,620		60,412
Policy loans	0		0		11,986		11,986		11,986
Other invested assets	0		36		0		36		36
Short-term investments	1,553		29		0		1,582		1,582
Cash and cash equivalents	6,574		1,170		0		7,744		7,744
Accrued investment income	0		3,233		0		3,233		3,233
Other assets	146		2,994		555		3,695		3,693
Total assets	$	8,325	$	9,090	$	74,950	$	92,365	$	90,772
Liabilities:
Policyholders’ account balances—investment contracts	$	0	$	31,903	$	68,830	$	100,733	$	100,903
Securities sold under agreements to repurchase	0		9,873		0		9,873		9,873
Cash collateral for loaned securities	0		4,093		0		4,093		4,093
Short-term debt	0		1,862		771		2,633		2,549
Long-term debt(3)	1,887		16,803		1,135		19,825		18,309
Notes issued by consolidated VIEs	0		0		408		408		408
Other liabilities	0		6,290		555		6,845		6,845
Separate account liabilities—investment contracts	0		71,642		25,982		97,624		97,624
Total liabilities	$	1,887	$	142,466	$	97,681	$	242,034	$	240,604

	December 31, 2018
	Fair Value								Carrying Amount(1)
	Level 1		Level 2		Level 3		Total		Total
	(in millions)
Assets:
Fixed maturities, held-to-maturity(2)	$	0	$	1,468	$	904	$	2,372	$	2,013
Assets supporting experience-rated contractholders liabilities	0		0		0		0		0
Commercial mortgage and other loans	0		109		59,106		59,215		59,067
Policy loans	0		0		12,016		12,016		12,016
Other invested assets	0		40		0		40		40
Short-term investments	951		25		0		976		976
Cash and cash equivalents	4,871		1,004		0		5,875		5,875
Accrued investment income	0		3,318		0		3,318		3,318
Other assets	141		2,189		483		2,813		2,813
Total assets	$	5,963	$	8,153	$	72,509	$	86,625	$	86,118
Liabilities:
Policyholders’ account balances—investment contracts	$	0	$	31,422	$	67,006	$	98,428	$	99,829
Securities sold under agreements to repurchase	0		9,950		0		9,950		9,950
Cash collateral for loaned securities	0		3,929		0		3,929		3,929
Short-term debt	0		1,854		658		2,512		2,451
Long-term debt(3)	1,734		15,057		1,181		17,972		17,378
Notes issued by consolidated VIEs	0		0		360		360		360
Other liabilities	0		6,338		510		6,848		6,848
Separate account liabilities—investment contracts	0		66,914		26,022		92,936		92,936
Total liabilities	$	1,734	$	135,464	$	95,737	$	232,935	$	233,681

__________ 

(1) Carrying values presented herein differ from those in the Company’s Unaudited Interim Consolidated Statements of Financial Position because certain items within the respective financial statement captions are not considered financial instruments or are out of scope under authoritative guidance relating to disclosures of the fair value of financial instruments.

(2) Excludes notes with fair value of $4,930 million (carrying amount of $4,879 million) and $4,879 million (carrying amount of $4,879 million) as of both March 31, 2019 and December 31, 2018, respectively, which have been offset with the associated payables under a netting agreement.

(3)

Includes notes with fair value of $9,146 million (carrying amount of $9,095 million) and $9,095 million (carrying amount of $9,095 million) as of March 31, 2019 and December 31, 2018, respectively, which have been offset with the associated receivables under a netting agreement.

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Leases

3 Months Ended

Mar. 31, 2019

Leases [Abstract]

Operating Leases, Lessee

LEASES

The Company occupies leased office space and other facilities in many locations under various long-term leases and has entered into numerous leases covering the long-term use of computers and other equipment. The leases, depending on their specific terms, are classified as either operating or finance with the vast majority of leases falling under the operating classification. The leases in the Company’s portfolio have remaining lease terms from less than one year to 30 years, some of which include options to extend the leases for up to 18 years, and some of which include options to terminate the leases within 8 years. An analysis of all economic and non-economic factors associated with leases containing certain options, including factors such as the existence of cancellation penalties, leasehold improvements made to the underlying assets and location of the underlying assets, is conducted to determine whether those leases are reasonably certain to renew, and, hence, should be included in the lease term that is used to establish the right-of-use assets and lease liabilities for those arrangements.

The Company does not have residual guarantees associated with its lessee arrangements, nor are there any restrictions or covenants associated with its lease arrangements.

Lessee

Supplemental balance sheet information related to leases where the Company is the lessee is included below. Right-of-use assets and lease liabilities are included within “Other assets” and “Other liabilities” respectively.

	March 31, 2019
	(in millions)
Operating Leases:
Right-of-use assets	$	527
Lease liabilities	$	551
Weighted average remaining lease term	6 years
Weighted average discount rate	2.73		%

Maturities of operating lease liabilities are as follows:

	March 31, 2019
	(in millions)
2019 (April - December)	$	117
2020	125
2021	103
2022	77
2023	58
Thereafter	128
Total lease payments	608
Less imputed interest	(57		)
Total	$	551

Lease expense is included in “General and administrative expenses.” For the period ended March 31, 2019, lease expense includes operating lease costs of $34 million and short-term lease costs of $24 million. Short-term lease costs relate to those leases with terms of twelve months or less that do not include an option to purchase the underlying asset that is reasonably certain of exercise.

Lessor

The Company directly owns real estate properties within its investment portfolio. Such real estate is leased to third-parties, with the Company serving as the lessor. The terms of the leases vary depending on property type (e.g., commercial or residential). In most cases, the lessee has an option to renew the lease contract based on market rates but does not have an option to purchase the property. The terms of the leases may also include provisions for the use of common areas. Such non-lease components are not separately accounted for by the Company, as a result of applying the practical expedient discussed in Note 2. Lease income included in “Net investment income” for the period ended March 31, 2019 was $50 million.

Operating Leases, Lessor

LEASES

The Company occupies leased office space and other facilities in many locations under various long-term leases and has entered into numerous leases covering the long-term use of computers and other equipment. The leases, depending on their specific terms, are classified as either operating or finance with the vast majority of leases falling under the operating classification. The leases in the Company’s portfolio have remaining lease terms from less than one year to 30 years, some of which include options to extend the leases for up to 18 years, and some of which include options to terminate the leases within 8 years. An analysis of all economic and non-economic factors associated with leases containing certain options, including factors such as the existence of cancellation penalties, leasehold improvements made to the underlying assets and location of the underlying assets, is conducted to determine whether those leases are reasonably certain to renew, and, hence, should be included in the lease term that is used to establish the right-of-use assets and lease liabilities for those arrangements.

The Company does not have residual guarantees associated with its lessee arrangements, nor are there any restrictions or covenants associated with its lease arrangements.

Lessee

Supplemental balance sheet information related to leases where the Company is the lessee is included below. Right-of-use assets and lease liabilities are included within “Other assets” and “Other liabilities” respectively.

	March 31, 2019
	(in millions)
Operating Leases:
Right-of-use assets	$	527
Lease liabilities	$	551
Weighted average remaining lease term	6 years
Weighted average discount rate	2.73		%

Maturities of operating lease liabilities are as follows:

	March 31, 2019
	(in millions)
2019 (April - December)	$	117
2020	125
2021	103
2022	77
2023	58
Thereafter	128
Total lease payments	608
Less imputed interest	(57		)
Total	$	551

Lease expense is included in “General and administrative expenses.” For the period ended March 31, 2019, lease expense includes operating lease costs of $34 million and short-term lease costs of $24 million. Short-term lease costs relate to those leases with terms of twelve months or less that do not include an option to purchase the underlying asset that is reasonably certain of exercise.

Lessor

The Company directly owns real estate properties within its investment portfolio. Such real estate is leased to third-parties, with the Company serving as the lessor. The terms of the leases vary depending on property type (e.g., commercial or residential). In most cases, the lessee has an option to renew the lease contract based on market rates but does not have an option to purchase the property. The terms of the leases may also include provisions for the use of common areas. Such non-lease components are not separately accounted for by the Company, as a result of applying the practical expedient discussed in Note 2. Lease income included in “Net investment income” for the period ended March 31, 2019 was $50 million.

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Closed Block

3 Months Ended

Mar. 31, 2019

Closed Block Disclosure [Abstract]

Closed Block

CLOSED BLOCK

On December 18, 2001, the date of demutualization, The Prudential Insurance Company of America (“PICA”) established a closed block for certain in force participating insurance policies and annuity products, along with corresponding assets used for the payment of benefits and policyholders’ dividends on these products, (collectively the “Closed Block”), and ceased offering these participating products. The recorded assets and liabilities were allocated to the Closed Block at their historical carrying amounts. The Closed Block forms the principal component of the Closed Block division. For more information on the Closed Block, see Note 14 to the Company’s Consolidated Financial Statements included in the Annual Report on Form 10-K for the year ended December 31, 2018.

As of March 31, 2019 and December 31, 2018, the Company recognized a policyholder dividend obligation of $2,375 million and $2,252 million, respectively, to Closed Block policyholders for the excess of actual cumulative earnings over expected cumulative earnings. Additionally, accumulated net unrealized investment gains that have arisen subsequent to the establishment of the Closed Block have been reflected as a policyholder dividend obligation of $1,980 million and $899 million at March 31, 2019 and December 31, 2018, respectively, to be paid to Closed Block policyholders unless offset by future experience, with a corresponding amount reported in AOCI.

Closed Block liabilities and assets designated to the Closed Block, as well as maximum future earnings to be recognized from these liabilities and assets, are as follows:

	March 31, 2019			December 31, 2018
	(in millions)
Closed Block liabilities
Future policy benefits	$	48,044		$	48,282
Policyholders’ dividends payable	838			812
Policyholders’ dividend obligation	4,355			3,150
Policyholders’ account balances	5,036			5,061
Other Closed Block liabilities	4,147			3,955
Total Closed Block liabilities	62,420			61,260
Closed Block assets
Fixed maturities, available-for-sale, at fair value	39,499			38,538
Fixed maturities, trading, at fair value	185			195
Equity securities, at fair value	2,002			1,784
Commercial mortgage and other loans	8,623			8,782
Policy loans	4,365			4,410
Other invested assets	3,296			3,316
Short-term investments	548			477
Total investments	58,518			57,502
Cash and cash equivalents	549			467
Accrued investment income	475			466
Other Closed Block assets	175			105
Total Closed Block assets	59,717			58,540
Excess of reported Closed Block liabilities over Closed Block assets	2,703			2,720
Portion of above representing accumulated other comprehensive income (loss):
Net unrealized investment gains (losses)	1,938			857
Allocated to policyholder dividend obligation	(1,980		)	(899		)
Future earnings to be recognized from Closed Block assets and Closed Block liabilities	$	2,661		$	2,678

Information regarding the policyholder dividend obligation is as follows:

	Three Months Ended March 31, 2019
	(in millions)
Balance, December 31, 2018	$	3,150
Impact from earnings allocable to policyholder dividend obligation	123
Change in net unrealized investment gains (losses) allocated to policyholder dividend obligation	1,082
Balance, March 31, 2019	$	4,355

Closed Block revenues and benefits and expenses are as follows for the periods indicated:

	Three Months Ended March 31,
	2019			2018
	(in millions)
Revenues
Premiums	$	527		$	551
Net investment income	565			597
Realized investment gains (losses), net	56			(2		)
Other income (loss)	228			21
Total Closed Block revenues	1,376			1,167
Benefits and Expenses
Policyholders’ benefits	709			727
Interest credited to policyholders’ account balances	32			33
Dividends to policyholders	553			308
General and administrative expenses	89			93
Total Closed Block benefits and expenses	1,383			1,161
Closed Block revenues, net of Closed Block benefits and expenses, before income taxes	(7		)	6
Income tax expense (benefit)	(24		)	(9		)
Closed Block revenues, net of Closed Block benefits and expenses and income taxes	$	17		$	15

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Income Taxes

3 Months Ended

Mar. 31, 2019

Income Tax Disclosure [Abstract]

Income Taxes

INCOME TAXES

The Company uses a full year projected effective tax rate approach to calculate year-to-date taxes. In addition, certain items impacting total income tax expense are recorded in the periods in which they occur. The projected effective tax rate is the ratio of projected “Total income tax expense” divided by projected “Income before income taxes and equity in earnings of operating joint ventures.” Taxes attributable to operating joint ventures are recorded within “Equity in earnings of operating joint ventures, net of taxes.” The interim period tax expense (or benefit) is the difference between the year-to-date income tax provision and the amounts reported for the previous interim periods of the fiscal year.

The Company’s income tax provision, on a consolidated basis, amounted to an income tax expense of $232 million, or 20.4% of income (loss) before income taxes and equity in earnings of operating joint ventures, in the first three months of 2019, compared to $352 million, or 20.8%, in the first three months of 2018. The Company’s current and prior effective tax rates differed from the U.S. statutory rate of 21% primarily due to non-taxable investment income, tax credits and foreign earnings taxed at higher rates than the U.S. statutory rate. In addition, the first three months of 2018 also includes a $20 million reduction in income tax expense primarily related to refinements of our provisional estimates related to the U.S. Tax Cuts and Jobs Act of 2017.

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Short-Term and Long-Term Debt

3 Months Ended

Mar. 31, 2019

Debt Disclosure [Abstract]

Short-Term and Long-Term Debt

SHORT-TERM AND LONG-TERM DEBT

Short-term Debt

The table below presents the Company’s short-term debt as of the dates indicated:

	March 31, 2019			December 31, 2018
	($ in millions)
Commercial paper:
Prudential Financial	$	25		$	15
Prudential Funding, LLC	714			727
Subtotal commercial paper	739			742
Mortgage Debt(1)	53			53
Current portion of long-term debt(2)	1,740			1,656
Other(3)	17			—
Total short-term debt(4)	$	2,549		$	2,451
Supplemental short-term debt information:
Portion of commercial paper borrowings due overnight	$	327		$	301
Daily average commercial paper outstanding	$	1,624		$	1,554
Weighted average maturity of outstanding commercial paper, in days	15			12
Weighted average interest rate on outstanding short-term debt(5)	2.22		%	1.9		%

__________

(1) Includes $53 million of mortgage debt denominated in foreign currency at both March 31, 2019 and December 31, 2018.

(2) Includes $1,100 million of senior notes at both March 31, 2019 and December 31, 2018, and $141 million and $57 million of mortgage debt that has recourse only to real estate investment property at March 31, 2019 and December 31, 2018, respectively.

(3) Includes $17 million drawn on a revolving line of credit held by a subsidiary at March 31, 2019.

(4) Includes Prudential Financial debt of $1,125 million and $1,115 million at March 31, 2019 and December 31, 2018, respectively.

(5) Excludes the current portion of long-term debt.

Prudential Financial and certain subsidiaries have access to external sources of liquidity, including membership in the Federal Home Loan Banks, commercial paper programs and a contingent financing facility in the form of a put option agreement. The Company also maintains syndicated, unsecured committed credit facilities as an alternative source of liquidity. At March 31, 2019, no amounts were drawn on these credit facilities. For additional information on these sources of liquidity, see Note 16 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.

Long-term Debt

The table below presents the Company’s long-term debt as of the dates indicated:

	March 31, 2019		December 31, 2018
	(in millions)
Fixed-rate notes:
Surplus notes	$	342	$	341
Surplus notes subject to set-off arrangements(1)	6,895		6,895
Senior notes	9,760		8,774
Mortgage debt(2)	239		237
Floating-rate notes:
Surplus notes subject to set-off arrangements(1)	2,200		2,200
Senior notes	29		29
Mortgage debt(3)	371		430
Junior subordinated notes(4)	7,568		7,568
Subtotal	27,404		26,473
Less: assets under set-off arrangements(1)	9,095		9,095
Total long-term debt(5)	$	18,309	$	17,378

 __________    

(1) The surplus notes have corresponding assets where rights to set-off exist, thereby reducing the amount of surplus notes included in long-term debt.

(2) Includes $103 million and $101 million of debt denominated in foreign currency at March 31, 2019 and December 31, 2018, respectively.

(3) Includes $211 million and $206 million of debt denominated in foreign currency at March 31, 2019 and December 31, 2018, respectively.

(4) Includes Prudential Financial debt of $7,512 million and subsidiary debt of $56 million denominated in foreign currency at March 31, 2019.

(5) Includes Prudential Financial debt of $17,128 million and $16,141 million at March 31, 2019 and December 31, 2018, respectively.

At March 31, 2019 and December 31, 2018, the Company was in compliance with all debt covenants related to the borrowings in the table above.

Senior Notes. As of March 31, 2019, the outstanding balance of the Company’s senior notes was $10.89 billion, an increase of $1 billion from December 31, 2018. The increase was due to the issuance in the first quarter of $1 billion of notes with an interest rate of 4.350% maturing in February 2050.

Mortgage Debt. As of March 31, 2019, the Company’s subsidiaries had mortgage debt of $804 million that has recourse only to real estate property held for investment by those subsidiaries. This represents an increase of $28 million from December 31, 2018, due to $21 million in new borrowings and $7 million from foreign currency exchange rate fluctuations.

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Employee Benefit Plans

3 Months Ended

Mar. 31, 2019

Retirement Benefits [Abstract]

Employee Benefit Plans

EMPLOYEE BENEFIT PLANS

Pension and Other Postretirement Plans

The Company has funded and non-funded non-contributory defined benefit pension plans (“Pension Benefits”), which cover substantially all of its employees. For some employees, benefits are based on final average earnings and length of service, while benefits for other employees are based on an account balance that takes into consideration age, service and earnings during their career.

The Company provides certain health care and life insurance benefits for its retired employees, their beneficiaries and covered dependents (“Other Postretirement Benefits”). The health care plan is contributory; the life insurance plan is non-contributory. Substantially all of the Company’s U.S. employees may become eligible to receive Other Postretirement Benefits if they retire after age 55 with at least 10 years of service or under certain circumstances after age 50 with at least 20 years of continuous service.

Net periodic (benefit) cost included in “General and administrative expenses” includes the following components:

	Three Months Ended March 31,
	Pension Benefits						Other Postretirement Benefits
	2019			2018			2019			2018
	(in millions)
Components of net periodic (benefit) cost:
Service cost	$	73		$	79		$	6		$	6
Interest cost	123			112			19			18
Expected return on plan assets	(204		)	(204		)	(24		)	(27		)
Amortization of prior service cost	(1		)	(1		)	1			0
Amortization of actuarial (gain) loss, net	54			53			6			4
Settlements	0			0			0			0
Special termination benefits	0			0			0			0
Net periodic (benefit) cost	$	45		$	39		$	8		$	1

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Equity

3 Months Ended

Mar. 31, 2019

Stockholders' Equity Note [Abstract]

Equity

EQUITY

The changes in the number of shares of Common Stock issued, held in treasury and outstanding, are as follows for the periods indicated:

	Common Stock
	Issued	Held In Treasury		Outstanding
	(in millions)
Balance, December 31, 2018	660.1	249.4		410.7
Common Stock issued	0.0	0.0		0.0
Common Stock acquired	0.0	5.4		(5.4	)
Stock-based compensation programs(1)	0.0	(2.0	)	2.0
Balance, March 31, 2019	660.1	252.8		407.3

__________ 

(1) Represents net shares issued from treasury pursuant to the Company’s stock-based compensation programs.

In December 2018, Prudential Financial’s Board of Directors (the “Board”) authorized the Company to repurchase at management’s discretion up to $2.0 billion of its outstanding Common Stock during the period from January 1, 2019 through December 31, 2019. As of March 31, 2019, 5.4 million shares of the Company’s Common Stock were repurchased under this authorization at a total cost of $500 million.

The timing and amount of share repurchases are determined by management based upon market conditions and other considerations, and repurchases may be effected in the open market, through derivative, accelerated repurchase and other negotiated transactions and through prearranged trading plans complying with Rule 10b5-1(c) under the Securities Exchange Act of 1934 (the “Exchange Act”). Numerous factors could affect the timing and amount of any future repurchases under the share repurchase authorization, including increased capital needs of the Company due to changes in regulatory capital requirements, opportunities for growth and acquisitions, and the effect of adverse market conditions on the segments.

Dividends declared per share of Common Stock are as follows for the periods indicated:

	Three Months Ended March 31,
	2019		2018
Dividends declared per share of Common Stock	$	1.00	$	0.90

Accumulated Other Comprehensive Income (Loss)

AOCI represents the cumulative OCI items that are reported separate from net income and detailed on the Unaudited Interim Consolidated Statements of Comprehensive Income. The balance of and changes in each component of AOCI as of and for the three months ended March 31, 2019 and 2018, are as follows:

	Accumulated Other Comprehensive Income (Loss) Attributable to Prudential Financial, Inc.
	Foreign Currency Translation Adjustment			Net Unrealized Investment Gains (Losses)(1)			Pension and Postretirement Unrecognized Net Periodic Benefit (Cost)			Total Accumulated Other Comprehensive Income (Loss)
	(in millions)
Balance, December 31, 2018	$	(564	)	$	14,745		$	(3,275	)	$	10,906
Change in OCI before reclassifications	(109		)	8,564			4			8,459
Amounts reclassified from AOCI	5			(275		)	60			(210		)
Income tax benefit (expense)	(3		)	(1,926		)	(15		)	(1,944		)
Cumulative effect of adoption of ASU 2017-12	0			7			0			7
Balance, March 31, 2019	$	(671	)	$	21,115		$	(3,226	)	$	17,218

	Accumulated Other Comprehensive Income (Loss) Attributable to Prudential Financial, Inc.
	Foreign Currency Translation Adjustment			Net Unrealized Investment Gains (Losses)(1)			Pension and Postretirement Unrecognized Net Periodic Benefit (Cost)			Total Accumulated Other Comprehensive Income (Loss)
	(in millions)
Balance, December 31, 2017	$	(269	)	$	19,968		$	(2,625	)	$	17,074
Change in OCI before reclassifications	649			(4,640		)	(2		)	(3,993		)
Amounts reclassified from AOCI	0			(26		)	56			30
Income tax benefit (expense)	8			845			(9		)	844
Cumulative effect of adoption of ASU 2016-01	0			(847		)	0			(847		)
Cumulative effect of adoption of ASU 2018-02	(231		)	2,282			(398		)	1,653
Balance, March 31, 2018	$	157		$	17,582		$	(2,978	)	$	14,761

__________

(1) Includes cash flow hedges of $776 million and $811 million as of March 31, 2019 and December 31, 2018, respectively, and $(622) million and $(39) million as of March 31, 2018 and December 31, 2017, respectively.

Reclassifications out of Accumulated Other Comprehensive Income (Loss)

	Three Months Ended March 31,						Affected line item in Consolidated Statements of Operations
	2019			2018
	(in millions)
Amounts reclassified from AOCI(1)(2):
Foreign currency translation adjustment:
Foreign currency translation adjustments	$	(5	)	$	0		Realized investment gains (losses), net
Foreign currency translation adjustments	0			0			Other income (loss)
Total foreign currency translation adjustment	(5		)	0
Net unrealized investment gains (losses):
Cash flow hedges—Interest rate	(1		)	0			(3)
Cash flow hedges—Currency	1			(3		)	(3)
Cash flow hedges—Currency/Interest rate	15			(49		)	(3)
Net unrealized investment gains (losses) on available-for-sale securities	260			78
Total net unrealized investment gains (losses)	275			26			(4)
Amortization of defined benefit pension items:
Prior service cost	0			1			(5)
Actuarial gain (loss)	(60		)	(57		)	(5)
Total amortization of defined benefit pension items	(60		)	(56		)
Total reclassifications for the period	$	210		$	(30	)

__________

(1) All amounts are shown before tax.

(2) Positive amounts indicate gains/benefits reclassified out of AOCI. Negative amounts indicate losses/costs reclassified out of AOCI.

(3) See Note 5 for additional information on cash flow hedges.

(4) See table below for additional information on unrealized investment gains (losses), including the impact on deferred policy acquisition and other costs, future policy benefits and policyholders’ dividends.

(5) See Note 11 for information on employee benefit plans.

Net Unrealized Investment Gains (Losses)

Net unrealized investment gains (losses) on securities classified as available-for-sale and certain other invested assets and other assets are included in the Company’s Unaudited Interim Consolidated Statements of Financial Position as a component of AOCI. Changes in these amounts include reclassification adjustments to exclude from “Other comprehensive income (loss)” those items that are included as part of “Net income (loss)” for a period that had been part of “Other comprehensive income (loss)” in earlier periods. The amounts for the periods indicated below, split between amounts related to fixed maturity securities on which an OTTI loss has been recognized, and all other net unrealized investment gains (losses), are as follows:

Net Unrealized Investment Gains (Losses) on Fixed Maturity Securities on which an OTTI loss has been recognized

	Net Unrealized Gains (Losses) on Investments			DAC, DSI, VOBA and Reinsurance Recoverables			Future Policy Benefits, Policyholders’ Account Balances and Reinsurance Payables		Policyholders’ Dividends			Deferred Income Tax (Liability) Benefit			Accumulated Other Comprehensive Income (Loss) Related to Net Unrealized Investment Gains (Losses)
	(in millions)
Balance, December 31, 2018	$	189		$	(1	)	$	4	$	(23	)	$	(61	)	$	108
Net investment gains (losses) on investments arising during the period	68											(16		)	52
Reclassification adjustment for (gains) losses included in net income	(5		)									1			(4		)
Reclassification adjustment for OTTI losses excluded from net income(1)	(1		)									0			(1		)
Impact of net unrealized investment (gains) losses on DAC, DSI, VOBA and reinsurance recoverables				0								0			0
Impact of net unrealized investment (gains) losses on future policy benefits and policyholders’ account balances and reinsurance payables							0					0			0
Impact of net unrealized investment (gains) losses on policyholders’ dividends									(9		)	2			(7		)
Balance, March 31, 2019	$	251		$	(1	)	$	4	$	(32	)	$	(74	)	$	148

__________

(1) Represents “transfers in” related to the portion of OTTI losses recognized during the period that were not recognized in earnings for securities with no prior OTTI loss.

 All Other Net Unrealized Investment Gains (Losses) in AOCI

	Net Unrealized Gains (Losses) on Investments(1)			DAC, DSI, VOBA and Reinsurance Recoverables			Future Policy Benefits, Policyholders’ Account Balances and Reinsurance Payables			Policyholders’ Dividends			Deferred Income Tax (Liability) Benefit			Accumulated Other Comprehensive Income (Loss) Related to Net Unrealized Investment Gains (Losses)
	(in millions)
Balance, December 31, 2018	$	22,531		$	(738	)	$	(791	)	$	(894	)	$	(5,471	)	$	14,637
Net investment gains (losses) on investments arising during the period	10,532												(2,401		)	8,131
Reclassification adjustment for (gains) losses included in net income	(270		)										62			(208		)
Reclassification adjustment for OTTI losses excluded from net income(2)	1												0			1
Impact of net unrealized investment (gains) losses on DAC, DSI, VOBA and reinsurance recoverables				(459		)							103			(356		)
Impact of net unrealized investment (gains) losses on future policy benefits and policyholders’ account balances and reinsurance payables							(492		)				98			(394		)
Impact of net unrealized investment (gains) losses on policyholders’ dividends										(1,078		)	227			(851		)
Cumulative effect of adoption of ASU 2017-12	9												(2		)	7
Balance, March 31, 2019	$	32,803		$	(1,197	)	$	(1,283	)	$	(1,972	)	$	(7,384	)	$	20,967

__________

(1) Includes cash flow hedges. See Note 5 for information on cash flow hedges.

(2)

Represents “transfers out” related to the portion of OTTI losses recognized during the period that were not recognized in earnings for securities with no prior OTTI loss.

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Earnings Per Share

3 Months Ended

Mar. 31, 2019

Earnings Per Share [Abstract]

Earnings Per Share

EARNINGS PER SHARE

A reconciliation of the numerators and denominators of the basic and diluted per share computations of Common Stock based on the consolidated earnings of Prudential Financial for the periods indicated, is as follows:

	Three Months Ended March 31,
	2019					2018
	Income		Weighted Average Shares	Per Share Amount		Income		Weighted Average Shares	Per Share Amount
	(in millions, except per share amounts)
Basic earnings per share
Net income (loss)	$	937				$	1,364
Less: Income (loss) attributable to noncontrolling interests	5					1
Less: Dividends and undistributed earnings allocated to participating unvested share-based payment awards	10					16
Net income (loss) attributable to Prudential Financial available to holders of Common Stock	$	922	409.2	$	2.25	$	1,347	422.0	$	3.19
Effect of dilutive securities and compensation programs
Add: Dividends and undistributed earnings allocated to participating unvested share-based payment awards—Basic	$	10				$	16
Less: Dividends and undistributed earnings allocated to participating unvested share-based payment awards—Diluted	10					16
Stock options			1.2					1.9
Deferred and long-term compensation programs			1.1					1.1
Exchangeable Surplus Notes	5		6.1			5		5.9
Diluted earnings per share
Net income (loss) attributable to Prudential Financial available to holders of Common Stock	$	927	417.6	$	2.22	$	1,352	430.9	$	3.14

Unvested share-based payment awards that contain nonforfeitable rights to dividends are participating securities and included in the computation of earnings per share pursuant to the two-class method. Under this method, earnings attributable to Prudential Financial are allocated between Common Stock and the participating awards, as if the awards were a second class of stock. During periods of net income available to holders of Common Stock, the calculation of earnings per share excludes the income attributable to participating securities in the numerator and the dilutive impact of these securities from the denominator. In the event of a net loss available to holders of Common Stock, undistributed earnings are not allocated to participating securities and the denominator excludes the dilutive impact of these securities as they do not share in the losses of the Company. Undistributed earnings allocated to participating unvested share-based payment awards for the three months ended March 31, 2019 and 2018, as applicable, were based on 4.6 million and 4.9 million of such awards, respectively, weighted for the period they were outstanding.

Stock options and shares related to deferred and long-term compensation programs that are considered antidilutive are excluded from the computation of diluted earnings per share. Stock options are considered antidilutive based on application of the treasury stock method or in the event of a net loss available to holders of Common Stock. Shares related to deferred and long-term compensation programs are considered antidilutive in the event of a net loss available to holders of Common Stock. For the periods indicated, the number of stock options and shares related to deferred and long-term compensation programs that were considered antidilutive and were excluded from the computation of diluted earnings per share, weighted for the portion of the period they were outstanding, are as follows:

	Three Months Ended March 31,
	2019			2018
	Shares	Exercise Price Per Share		Shares	Exercise Price Per Share
	(in millions, except per share amounts, based on weighted average)
Antidilutive stock options based on application of the treasury stock method	1.1	$	103.47	0.3	$	107.65
Antidilutive stock options due to net loss available to holders of Common Stock	0.0			0.0
Antidilutive shares based on application of the treasury stock method	0.0			0.0
Antidilutive shares due to net loss available to holders of Common Stock	0.0			0.0
Total antidilutive stock options and shares	1.1			0.3

In September 2009, the Company issued $500 million of surplus notes with an interest rate of 5.36% per annum which are exchangeable at the option of the note holders for shares of Common Stock. The initial exchange rate for the surplus notes was 10.1235 shares of Common Stock per each $1,000 principal amount of surplus notes. This was equivalent to 5.1 million shares and an initial exchange price per share of Common Stock of $98.78. The exchange rate is subject to customary anti-dilution adjustments and is accordingly revalued during the fourth quarter of each year. As of March 31, 2019, the exchange rate is equal to 12.1719 shares of Common Stock per each $1,000 principal amount of surplus notes. This is equivalent to 6.09 million shares and an exchange price per share of Common Stock of $82.16. In calculating diluted earnings per share under the if-converted method, the potential shares that would be issued assuming a hypothetical exchange, weighted for the period the notes are outstanding, are added to the denominator, and the related interest expense, net of tax, is excluded from the numerator, if the overall effect is dilutive.

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Segment Information

3 Months Ended

Mar. 31, 2019

Segment Reporting [Abstract]

Segment Information

SEGMENT INFORMATION

Segments

The Company’s principal operations are comprised of five divisions, which together encompass seven segments, and its Corporate and Other operations. The PGIM division consists of the PGIM segment. The U.S. Workplace Solutions division consists of the Retirement and Group Insurance segments. The U.S. Individual Solutions division consists of the Individual Annuities and Individual Life segments. The International Insurance division consists of the International Insurance segment. The Closed Block division consists of the Closed Block segment. The Closed Block division is accounted for as a divested business that is reported separately from the Divested and Run-off Businesses that are included in Corporate and Other operations. Divested and Run-off Businesses are comprised of businesses that have been, or will be, sold or exited, including businesses that have been placed in wind down status that do not qualify for “discontinued operations” accounting treatment under U.S. GAAP. The Company’s Corporate and Other operations include corporate items and initiatives that are not allocated to business segments and businesses that have been or will be divested or placed in run-off, excluding the Closed Black division.

Adjusted Operating Income

The Company analyzes the operating performance of each segment using “adjusted operating income.” Adjusted operating income does not equate to “Income (loss) before income taxes and equity in earnings of operating joint ventures” or “Net income (loss)” as determined in accordance with U.S. GAAP but is the measure of segment profit or loss used by the Company’s chief operating decision maker to evaluate segment performance and allocate resources, and consistent with authoritative guidance, is the measure of segment performance presented below. Adjusted operating income is calculated by adjusting each segment’s “Income (loss) before income taxes and equity in earnings of operating joint ventures” for the following items:

• realized investment gains (losses), net, and related adjustments;

• charges related to realized investment gains (losses), net;

• net investment gains (losses) on assets supporting experience-rated contractholder liabilities and changes in experience-rated contractholder liabilities due to asset value changes;

• divested and run-off businesses; and

• equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests.

These items are important to an understanding of overall results of operations. Adjusted operating income is not a substitute for income determined in accordance with U.S. GAAP, and the Company’s definition of adjusted operating income may differ from that used by other companies. The Company, however, believes that the presentation of adjusted operating income as measured for management purposes enhances the understanding of results of operations by highlighting the results from ongoing operations and the underlying profitability factors of its businesses. For more information on these reconciling items, see Note 21 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.

Reconciliation of adjusted operating income to net income (loss)

The table below reconciles “Adjusted operating income before income taxes” to “Income before income taxes and equity in earnings of operating joint ventures”:

	Three Months Ended March 31,
	2019			2018
	(in millions)
Adjusted operating income before income taxes by segment:
PGIM	$	214		$	232
Total PGIM division	214			232
Retirement	251			317
Group Insurance	53			55
Total U.S. Workplace Solutions division	304			372
Individual Annuities(1)	472			519
Individual Life	105			36
Total U.S. Individual Solutions division	577			555
International Insurance	922			856
Total International Insurance division	922			856
Corporate and Other operations	(412		)	(294		)
Total Corporate and Other	(412		)	(294		)
Total segment adjusted operating income before income taxes	1,605			1,721
Reconciling items:
Realized investment gains (losses), net, and related adjustments	(663		)	87
Charges related to realized investment gains (losses), net	25			(23		)
Investment gains (losses) on assets supporting experience-rated contractholder liabilities, net	454			(403		)
Change in experience-rated contractholder liabilities due to asset value changes	(403		)	418
Divested and Run-off businesses:
Closed Block division	(19		)	(9		)
Other Divested and Run-off businesses	174			(72		)
Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests	(33		)	(26		)
Consolidated income (loss) before income taxes and equity in earnings of operating joint ventures	$	1,140		$	1,693

__________

(1) Individual Annuities segment results reflect DAC as if the individual annuity business is a stand-alone operation. The elimination of intersegment costs capitalized in accordance with this policy is included in consolidating adjustments within Corporate and Other operations.

Reconciliation of selected financial information

The table below presents total revenues and assets for the Company’s reportable segments and its Corporate and Other operations for the periods and as of the dates indicated:

	Revenues						Total Assets
	Three Months Ended March 31,						March 31, 2019		December 31, 2018
	2019			2018
	(in millions)
PGIM	$	870		$	826		$	47,987	$	47,690
Total PGIM division	870			826			47,987		47,690
Retirement	2,639			2,089			183,175		175,525
Group Insurance	1,441			1,416			42,642		41,727
Total U.S. Workplace Solutions division	4,080			3,505			225,817		217,252
Individual Annuities	1,235			1,252			178,103		167,899
Individual Life	1,482			1,425			88,468		83,739
Total U.S. Individual Solutions division	2,717			2,677			266,571		251,638
International Insurance	6,152			6,040			230,090		222,633
Total International Insurance division	6,152			6,040			230,090		222,633
Corporate and Other operations	(171		)	(173		)	18,647		16,826
Total Corporate and Other	(171		)	(173		)	18,647		16,826
Total	13,648			12,875			789,112		756,039
Reconciling items:
Realized investment gains (losses), net, and related adjustments	(663		)	87
Charges related to realized investment gains (losses), net	(72		)	(71		)
Investment gains (losses) on assets supporting experience-rated contractholder liabilities, net	454			(403		)
Divested and Run-off businesses:
Closed Block division	1,374			1,163			60,212		59,039
Other Divested and Run-off businesses	388			132
Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests	(38		)	(26		)
Total per Unaudited Interim Consolidated Financial Statements	$	15,091		$	13,757		$	849,324	$	815,078

Intersegment revenues

Management has determined the intersegment revenues with reference to market rates. Intersegment revenues are eliminated in consolidation in Corporate and Other operations. The PGIM segment revenues include intersegment revenues, primarily consisting of asset-based management and administration fees, as follows: 

	Three Months Ended March 31,
	2019		2018
	(in millions)
PGIM segment intersegment revenues	$	180	$	184

Segments may also enter into internal derivative contracts with other segments. For adjusted operating income, each segment accounts for the internal derivative results consistent with the manner in which that segment accounts for other similar external derivatives.

Asset management and service fees

The table below presents asset management and service fees, predominantly related to investment management activities, for the periods indicated:

 

	Three Months Ended March 31,
	2019		2018
	(in millions)
Asset-based management fees	$	843	$	862
Performance-based incentive fees	35		5
Other fees	138		159
Total asset management and service fees	$	1,016	$	1,026

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Commitments and Contingent Liabilities

3 Months Ended

Mar. 31, 2019

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingent Liabilities

COMMITMENTS AND CONTINGENT LIABILITIES

Commitments and Guarantees

Commercial Mortgage Loan Commitments

 

	March 31, 2019		December 31, 2018
	(in millions)
Total outstanding mortgage loan commitments	$	1,878	$	3,299
Portion of commitment where prearrangement to sell to investor exists	$	822	$	1,490

In connection with the Company’s commercial mortgage operations, it originates commercial mortgage loans. Commitments for loans that will be held for sale are recognized as derivatives and recorded at fair value. In certain of these transactions, the Company pre-arranges that it will sell the loan to an investor, including to government sponsored entities as discussed below, after the Company funds the loan.

Commitments to Purchase Investments (excluding Commercial Mortgage Loans)

	March 31, 2019		December 31, 2018
	(in millions)
Expected to be funded from the general account and other operations outside the separate accounts	$	6,456	$	6,941
Expected to be funded from separate accounts	$	59	$	147

The Company has other commitments to purchase or fund investments, some of which are contingent upon events or circumstances not under the Company’s control, including those at the discretion of the Company’s counterparties. The Company anticipates a portion of these commitments will ultimately be funded from its separate accounts.

 Indemnification of Securities Lending and Securities Repurchase Transactions

	March 31, 2019		December 31, 2018
	(in millions)
Indemnification provided to certain clients for securities lending and securities repurchase transactions(1)	$	6,001	$	5,399
Fair value of related collateral associated with above indemnifications(1)	$	6,133	$	5,503
Accrued liability associated with guarantee	$	0	$	0

__________ 

(1) As of March 31, 2019, indemnification provided to certain clients and fair value of related collateral associated with such indemnification include $89 million and $87 million, respectively, related to securities repurchase transactions.

In the normal course of business, the Company may facilitate securities lending or securities repurchase transactions on behalf of certain client accounts (collectively, “the accounts”). In certain of these arrangements, the Company has provided an indemnification to the accounts to hold them harmless against losses caused by counterparty (i.e., borrower) defaults associated with such transactions facilitated by the Company. In securities lending transactions, collateral is provided by the counterparty to the accounts at the inception of the transaction in an amount at least equal to 102% of the fair value of the loaned securities and the collateral is maintained daily to equal at least 102% of the fair value of the loaned securities. In securities repurchase transactions, collateral is provided by the counterparty to the accounts at the inception of the transaction in an amount at least equal to 95% of the fair value of the securities subject to repurchase and the collateral is maintained daily to equal at least 95% of the fair value of the securities subject to repurchase. The Company is only at risk if the counterparty to the transaction defaults and the value of the collateral held is less than the value of the securities loaned to, or subject to repurchase from, such counterparty. The Company believes the possibility of any payments under these indemnities is remote.

Credit Derivatives Written

As discussed further in Note 5, the Company writes credit derivatives under which the Company is obligated to pay the counterparty the referenced amount of the contract and receive in return the defaulted security or similar security.

Guarantees of Asset Values

	March 31, 2019		December 31, 2018
	(in millions)
Guaranteed value of third-parties’ assets	$	80,168	$	79,215
Fair value of collateral supporting these assets	$	79,771	$	77,897
Asset (liability) associated with guarantee, carried at fair value	$	1	$	2

Certain contracts underwritten by the Retirement segment include guarantees related to financial assets owned by the guaranteed party. These contracts are accounted for as derivatives and carried at fair value. The collateral supporting these guarantees is not reflected on the Unaudited Interim Consolidated Statements of Financial Position.

Indemnification of Serviced Mortgage Loans

	March 31, 2019		December 31, 2018
	(in millions)
Maximum exposure under indemnification agreements for mortgage loans serviced by the Company	$	1,874	$	1,828
First-loss exposure portion of above	$	554	$	543
Accrued liability associated with guarantees	$	18	$	17

As part of the commercial mortgage activities of the Company’s PGIM segment, the Company provides commercial mortgage origination, underwriting and servicing for certain government sponsored entities, such as Fannie Mae and Freddie Mac. The Company has agreed to indemnify the government sponsored entities for a portion of the credit risk associated with certain of the mortgages it services through a delegated authority arrangement. Under these arrangements, the Company originates multi-family mortgages for sale to the government sponsored entities based on underwriting standards they specify, and makes payments to them for a specified percentage share of losses they incur on certain loans serviced by the Company. The Company’s percentage share of losses incurred generally varies from 2% to 20% of the loan balance, and is typically based on a first-loss exposure for a stated percentage of the loan balance, plus a shared exposure with the government sponsored entity for any losses in excess of the stated first-loss percentage, subject to a contractually specified maximum percentage. The Company determines the liability related to this exposure using historical loss experience, and the size and remaining life of the asset. The Company serviced $14,790 million and $14,335 million of mortgages subject to these loss-sharing arrangements as of March 31, 2019 and December 31, 2018, respectively, all of which are collateralized by first priority liens on the underlying multi-family residential properties. As of March 31, 2019, these mortgages had a weighted-average debt service coverage ratio of 1.87 times and a weighted-average loan-to-value ratio of 61%. As of December 31, 2018, these mortgages had a weighted average debt service coverage ratio of 1.83 times and a weighted-average loan-to-value ratio of 62%. The Company had no losses related to indemnifications that were settled for the three months ended March 31, 2019 and 2018, respectively.

Other Guarantees

	March 31, 2019		December 31, 2018
	(in millions)
Other guarantees where amount can be determined	$	68	$	77
Accrued liability for other guarantees and indemnifications	$	0	$	0

The Company is also subject to other financial guarantees and indemnity arrangements. The Company has provided indemnities and guarantees related to acquisitions, dispositions, investments and other transactions that are triggered by, among other things, breaches of representations, warranties or covenants provided by the Company. These obligations are typically subject to various time limitations, defined by the contract or by operation of law, such as statutes of limitation. In some cases, the maximum potential obligation is subject to contractual limitations, while in other cases such limitations are not specified or applicable. Included above is $13 million for both March 31, 2019 and December 31, 2018 of yield maintenance guarantees related to certain investments the Company sold. The Company does not expect to make any payments on these guarantees and is not carrying any liabilities associated with these guarantees.

Since certain of these obligations are not subject to limitations, it is not possible to determine the maximum potential amount due under these guarantees. The accrued liabilities identified above do not include retained liabilities associated with sold businesses.

Contingent Liabilities

On an ongoing basis, the Company and its regulators review its operations including, but not limited to, sales and other customer interface procedures and practices, and procedures for meeting obligations to our customers and other parties. These reviews may result in the modification or enhancement of processes or the imposition of other action plans, including concerning management oversight, sales and other customer interface procedures and practices, and the timing or computation of payments to customers and other parties. In certain cases, if appropriate, the Company may offer customers or other parties remediation and may incur charges, including the cost of such remediation, administrative costs and regulatory fines.

The Company is subject to the laws and regulations of states and other jurisdictions concerning the identification, reporting and escheatment of unclaimed or abandoned funds, and is subject to audit and examination for compliance with these requirements. For additional discussion of these matters, see “—Litigation and Regulatory Matters” below.

It is possible that the results of operations or the cash flow of the Company in a particular quarterly or annual period could be materially affected as a result of payments in connection with the matters discussed above or other matters depending, in part, upon the results of operations or cash flow for such period. Management believes, however, that ultimate payments in connection with these matters, after consideration of applicable reserves and rights to indemnification, should not have a material adverse effect on the Company’s financial position.Litigation and Regulatory Matters

The Company is subject to legal and regulatory actions in the ordinary course of its businesses. Pending legal and regulatory actions include proceedings relating to aspects of the Company’s businesses and operations that are specific to it and proceedings that are typical of the businesses in which it operates, including in both cases businesses that have been either divested or placed in wind down status. Some of these proceedings have been brought on behalf of various alleged classes of complainants. In certain of these matters, the plaintiffs are seeking large and/or indeterminate amounts, including punitive or exemplary damages. The outcome of litigation or a regulatory matter, and the amount or range of potential loss at any particular time, is often inherently uncertain.

The Company establishes accruals for litigation and regulatory matters when it is probable that a loss has been incurred and the amount of that loss can be reasonably estimated. For litigation and regulatory matters where a loss may be reasonably possible, but not probable, or is probable but not reasonably estimable, no accrual is established but the matter, if potentially material, is disclosed, including matters discussed below. The Company estimates that as of March 31, 2019, the aggregate range of reasonably possible losses in excess of accruals established for those litigation and regulatory matters for which such an estimate currently can be made is less than $250 million. Any estimate is not an indication of expected loss, if any, or the Company’s maximum possible loss exposure on such matters. The Company reviews relevant information with respect to its litigation and regulatory matters on a quarterly and annual basis and updates its accruals, disclosures and estimates of reasonably possible loss based on such reviews.

The following discussion of litigation and regulatory matters provides an update of those matters discussed in Note 22 to the Company’s Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, and should be read in conjunction with the complete descriptions provided in the Form 10-K.

Individual Annuities, Individual Life and Group Insurance

Huffman v. The Prudential Insurance Company of America

In April 2019, the court entered a Final Judgment and Order of Dismissal. This matter is now closed.

Escheatment Litigation

Total Asset Recovery Services, LLC v. MetLife, Inc., et al., Prudential Financial, Inc., The Prudential Insurance Company of America, and Prudential Insurance Agency, LLC

In April 2019, defendants’ motion to dismiss the Second Amended Complaint was granted and plaintiff subsequently filed a Notice of Appeal with the New York State Supreme Court, First Department.

Residential Mortgage-Backed Securities (“RMBS”) Trustee Litigation

PICA et al. v. U.S. Bank N.A.

In April 2019, a decision and order was issued dismissing plaintiffs’ state court action with prejudice.

Regulatory Matters

Securities Lending and Foreign Tax Reclaim Matter

In 2016, the Company self-reported to the SEC and the U.S. Department of Labor (“DOL”), and notified other regulators, that in some cases it failed to maximize securities lending income for the benefit of certain separate account investments due to a long-standing restriction benefiting the Company that limited the availability of loanable securities. The Company has removed the restriction and implemented a remediation plan for the benefit of customers. As part of the Company’s review of this matter, in 2018 it further self-reported to the SEC, and notified other regulators, that in some cases it failed to timely process foreign tax reclaims for the separate account investments. The Company has corrected the foreign tax reclaim process and has implemented a remediation plan for the benefit of customers.

The DOL’s review of the securities lending matter is closed. The Company is cooperating with the SEC in its review of the securities lending and foreign tax reclaim matters (which includes a review of the remediation plans) and has entered into discussions with the SEC staff regarding a possible settlement of both matters that would potentially involve charges under the Investment Advisers Act and financial remedies. We cannot predict the outcome of the discussions with the SEC regarding these matters.

Summary

The Company’s litigation and regulatory matters are subject to many uncertainties, and given their complexity and scope, their outcome cannot be predicted. It is possible that the Company’s results of operations or cash flow in a particular quarterly or annual period could be materially affected by an ultimate unfavorable resolution of pending litigation and regulatory matters depending, in part, upon the results of operations or cash flow for such period. In light of the unpredictability of the Company’s litigation and regulatory matters, it is also possible that in certain cases an ultimate unfavorable resolution of one or more pending litigation or regulatory matters could have a material adverse effect on the Company’s financial position. Management believes, however, that, based on information currently known to it, the ultimate outcome of all pending litigation and regulatory matters, after consideration of applicable reserves and rights to indemnification, is not likely to have a material adverse effect on the Company’s financial position.

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Significant Accounting Policies and Pronouncements (Policies)

3 Months Ended

Mar. 31, 2019

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The Unaudited Interim Consolidated Financial Statements have been prepared in accordance with U.S. GAAP on a basis consistent with reporting interim financial information in accordance with instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities and Exchange Commission (“SEC”). Intercompany balances and transactions have been eliminated. The Unaudited Interim Consolidated Financial Statements include the accounts of Prudential Financial, entities over which the Company exercises control, including majority-owned subsidiaries and variable interest entities (“VIEs”) in which the Company is considered the primary beneficiary. See Note 4 for more information on the Company’s consolidated variable interest entities.  

In the opinion of management, all adjustments necessary for a fair statement of the financial position and results of operations have been made. All such adjustments are of a normal, recurring nature. Interim results are not necessarily indicative of the results that may be expected for the full year. These financial statements should be read in conjunction with the Company’s Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

The most significant estimates include those used in determining deferred policy acquisition costs (“DAC”) and related amortization; value of business acquired (“VOBA”) and its amortization; amortization of deferred sales inducements (“DSI”); measurement of goodwill and any related impairment; valuation of investments including derivatives and the recognition of other-than-temporary impairments (“OTTI”); future policy benefits including guarantees; pension and other postretirement benefits; provision for income taxes and valuation of deferred tax assets; and accruals for contingent liabilities, including estimates for losses in connection with unresolved legal and regulatory matters.

Reclassifications

ReclassificationsCertain amounts in prior periods have been reclassified to conform to the current period presentation.

Adoption of New Accounting Pronouncements

Other ASU adopted during the three months ended March 31, 2019

Standard	Description	Effective date and method of adoption	Effect on the financial statements or other significant matters
ASU 2017-08, Receivables -Nonrefundable Fees and Other Costs (Subtopic 310-20) Premium Amortization on Purchased Callable Debt Securities	This ASU requires certain premiums on callable debt securities to be amortized to the earliest call date.	January 1, 2019 using the modified retrospective method which included cumulative-effect adjustment on the balance sheet as of the beginning of the fiscal year of adoption.	Adoption of the ASU did not have a significant impact on the Company’s Consolidated Financial Statements and Notes to the Consolidated Financial Statements. The impact of the cumulative-effect adjustment to retained earnings was immaterial.
ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities	This ASU makes targeted changes to the existing hedge accounting model to better portray the economics of an entity’s risk management activities and to simplify the use of hedge accounting. The ASU eliminates separate measurement and recording of hedge ineffectiveness. It requires entities to present the earnings effect of the hedging instrument in the same income statement line item in which the hedged item is reported and also requires expanded disclosures.	January 1, 2019 using the modified retrospective method which included cumulative-effect adjustment on the balance sheet as of the beginning of the fiscal year of adoption.	Adoption of the ASU did not have a significant impact on the Company’s Consolidated Financial Statements and Notes to the Consolidated Financial Statements. The impact of the cumulative-effect adjustment to retained earnings and accumulated other comprehensive income (loss) (“AOCI”) related to ineffectiveness of the hedge instruments outstanding at the date of adoption was immaterial. See Note 5 for additional required disclosures.

Adoption of ASU 2016-02

Effective January 1, 2019, the Company adopted ASU 2016-02, Leases (Topic 842), using the optional transition method with a cumulative-effect adjustment recorded as of the beginning of the period of adoption. This ASU substantially changes a lessee’s accounting for leases and requires the recording, on balance sheet, using a dual lease accounting model, of a “right-of-use” asset and lease liability. Leases are to be classified as either operating or finance leases. Under the standard, operating leases will recognize total lease expense using a straight-line recognition method and finance leases are to be treated as the purchase of an asset on a financed basis. For lessors, the standard modifies classification criteria and accounting for sales-type and direct financing leases and requires a lessor to derecognize the carrying value of the leased asset that is considered to have been transferred to a lessee and record a lease receivable and residual asset (“receivable and residual” approach). The standard also eliminates the leveraged lease accounting model for lessors and real estate specific provisions (i.e., those related to sale-leaseback transactions); it does allow, however, a grandfathering of the leveraged lease accounting model for those existing leases that are being accounted for using such model.

In addition, the Company elected the package of practical expedients permitted under the transition guidance within the standard which eliminated the need to reassess: (a) whether any existing contracts are, or contain, leases; (b) the lease classification for any existing leases (i.e., all existing lessee arrangements that were classified as operating leases before are now classified as operating leases, and all existing lessee arrangements that were classified as capital leases before are now classified as finance leases); and (c) initial direct costs for any existing leases. The Company did not elect the practical expedient, which may be applied separately, to use hindsight in determining the lease term and in assessing impairment of the Company’s right-of-use assets.

Adoption of the standard resulted in the recording of right-of-use assets and lease liabilities related to existing operating leases of approximately $600 million as of January 1, 2019. Adoption of the standard also resulted in additional required disclosures. See Note 7 for additional information.

Future Adoption Of New Accounting Pronouncements

ASU issued but not yet adopted as of March 31, 2019 — ASU 2018-12

ASU 2018-12, Financial Services - Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts, was issued by the FASB on August 15, 2018 and is expected to have a significant impact on the Company’s Consolidated Financial Statements and Notes to the Consolidated Financial Statements. The ASU is effective January 1, 2021 (with early adoption permitted), and will impact, at least to some extent, the accounting and disclosure requirements for all long-duration insurance and investment contracts issued by the Company. Outlined below are four key areas of change, although there are other less significant changes not noted below. In addition to the impacts to the balance sheet upon adoption, the Company also expects an impact to how earnings emerge thereafter.

ASU 2018-12 Amended Topic	Description	Method of adoption	Effect on the financial statements or other significant matters
Cash flow assumptions used to measure the liability for future policy benefits for non-participating traditional and limited-pay insurance products	Requires an entity to review, and if necessary, update the cash flow assumptions used to measure the liability for future policy benefits, for both changes in future assumptions and actual experience, at least annually using a retrospective update method with a cumulative catch-up adjustment recorded in a separate line item in the Consolidated Statements of Operations.	An entity may choose one of two adoption methods for the liability for future policy benefits: (1) a modified retrospective transition method whereby the entity will apply the amendments to contracts in force as of the beginning of the earliest period presented on the basis of their existing carrying amounts, adjusted for the removal of any related amounts in AOCI or (2) a full retrospective transition method.	The options for method of adoption and the impacts of such methods are under assessment.
Discount rate assumption used to measure the liability for future policy benefits for non-participating traditional and limited-pay insurance products	Requires discount rate assumptions to be based on an upper-medium grade fixed income instrument yield and will be required to be updated each quarter with the impact recorded through Other Comprehensive Income (“OCI”).	As noted above, an entity may choose either a modified retrospective transition method or full retrospective transition method for the liability for future policy benefits. Under either method, for balance sheet remeasurement purposes, the liability for future policy benefits will be remeasured using current discount rates as of the beginning of the earliest period presented with the impact recorded as a cumulative effect adjustment to AOCI.	Upon adoption, under either transition method, there will be an adjustment to AOCI as a result of remeasuring in force contract liabilities using current upper-medium grade fixed income instrument yields. The adjustment upon adoption will largely reflect the difference between the discount rate locked-in at contract inception versus current discount rates at transition. The magnitude of such adjustment is currently being assessed.
Amortization of deferred acquisition costs (DAC) and other balances	Requires DAC and other balances, such as unearned revenue reserves and deferred sales inducements, to be amortized on a constant level basis over the expected term of the related contract, independent of expected profitability.	An entity may apply one of two adoption methods: (1) a modified retrospective transition method whereby the entity will apply the amendments to contracts in force as of the beginning of the earliest period presented on the basis of their existing carrying amounts, adjusted for the removal of any related amounts in AOCI or (2) if an entity chooses a full retrospective transition method for its future policy benefits, as described above, it is required to also use a retrospective transition method for DAC and other balances.	The options for method of adoption and the impacts of such methods are under assessment. Under the modified retrospective transition method, the Company would not expect a significant impact to the balance sheet, other than the impact of the removal of any related amounts in AOCI.
Market Risk Benefits	Requires an entity to measure all market risk benefits (e.g., living benefit and death benefit guarantees associated with variable annuities) at fair value with changes in value attributable to changes in an entity’s non-performance risk (“NPR”) recognized in OCI.	An entity will apply a retrospective transition method which will include a cumulative-effect adjustment on the balance sheet as of the earliest period presented.	Upon adoption, the Company expects an impact to retained earnings for the difference between the fair value and carrying value of benefits not currently measured at fair value (e.g., guaranteed minimum death benefits on variable annuities) and an impact from reclassifying the cumulative effect of changes in NPR from retained earnings to AOCI. The magnitude of such adjustments is currently being assessed.

Other ASU issued but not yet adopted as of March 31, 2019

Standard	Description	Effective date and method of adoption	Effect on the financial statements or other significant matters
ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments	This ASU provides a new current expected credit loss model to account for credit losses on certain financial assets and off-balance sheet exposures (e.g., loans held for investment, debt securities held to maturity, reinsurance receivables, net investments in leases and loan commitments). The model requires an entity to estimate lifetime credit losses related to such financial assets and exposures based on relevant information about past events, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. The standard also modifies the current OTTI standard for available-for-sale debt securities to require the use of an allowance rather than a direct write down of the investment, and replaces the existing standard for purchased credit deteriorated loans and debt securities.	January 1, 2020 using the modified retrospective method which will include a cumulative-effect adjustment on the balance sheet as of the beginning of the fiscal year of adoption. However, prospective application is required for purchased credit deteriorated assets previously accounted for under ASU 310-30 and for debt securities for which an OTTI was recognized prior to the date of adoption. Early adoption is permitted beginning January 1, 2019.	The Company does not plan to early adopt this ASU and is currently assessing its impact on the Company’s Consolidated Financial Statements and Notes to the Consolidated Financial Statements.
ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment	This ASU simplifies the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test in current U.S. GAAP, which measures a goodwill impairment by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of the goodwill. Under the ASU, a goodwill impairment should be recorded for the amount by which the carrying amount of a reporting unit exceeds its fair value (capped by the total amount of goodwill allocated to the reporting unit).	January 1, 2020 using the prospective method (with early adoption permitted).	The Company does not plan to early adopt this ASU. The Company does not expect the adoption of the ASU to have a significant impact on the Company’s Consolidated Financial Statements and Notes to the Consolidated Financial Statements.

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Investments (Tables)

3 Months Ended

Mar. 31, 2019

Investments [Abstract]

Fixed Maturities, Available-for-sale Securities

(1)

Excludes notes with amortized cost of $4,216 million (fair value, $4,216 million), which have been offset with the associated payables under a netting agreement.

(2) Includes credit-tranched securities collateralized by loan obligations, sub-prime mortgages, auto loans, credit cards, education loans and other asset types.

(3) Includes publicly-traded agency pass-through securities and collateralized mortgage obligations.

(4) Represents the amount of unrealized losses remaining in AOCI, from the impairment measurement date. Amount excludes $356 million of net unrealized gains on impaired available-for-sale securities and $1 million of net unrealized gains on impaired held-to-maturity securities relating to changes in the value of such securities subsequent to the impairment measurement date.

(5)

Excludes notes with amortized cost of $4,879 million (fair value, $4,879 million), which have been offset with the associated payables under a netting agreement.(1)

Excludes notes with amortized cost of $4,216 million (fair value, $4,216 million), which have been offset with the associated payables under a netting agreement.

(2) Includes credit-tranched securities collateralized by loan obligations, sub-prime mortgages, auto loans, credit cards, education loans and other asset types.

(3) Includes publicly-traded agency pass-through securities and collateralized mortgage obligations.

(4) Represents the amount of unrealized losses remaining in AOCI, from the impairment measurement date. Amount excludes $419 million of net unrealized gains on impaired available-for-sale securities and $2 million of net unrealized gains on impaired held-to-maturity securities relating to changes in the value of such securities subsequent to the impairment measurement date.

(5)

Excludes notes with amortized cost of $4,879 million (fair value, $4,930 million), which have been offset with the associated payables under a netting agreement.The following tables set forth the composition of fixed maturity securities (excluding investments classified as trading), as of the dates indicated:

	March 31, 2019
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		OTTI in AOCI(4)
	(in millions)
Fixed maturities, available-for-sale:
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	29,476	$	3,664	$	329	$	32,811	$	0
Obligations of U.S. states and their political subdivisions	9,864		990		6		10,848		0
Foreign government bonds	96,130		19,399		113		115,416		0
U.S. public corporate securities	82,529		5,722		902		87,349		(2		)
U.S. private corporate securities(1)	32,624		1,531		291		33,864		(10		)
Foreign public corporate securities	27,483		2,459		179		29,763		(8		)
Foreign private corporate securities	26,243		694		808		26,129		0
Asset-backed securities(2)	12,566		176		53		12,689		(147		)
Commercial mortgage-backed securities	13,834		279		54		14,059		0
Residential mortgage-backed securities(3)	2,899		115		14		3,000		(1		)
Total fixed maturities, available-for-sale(1)	$	333,648	$	35,029	$	2,749	$	365,928	$	(168	)

	December 31, 2018
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		OTTI in AOCI(4)
	(in millions)
Fixed maturities, available-for-sale:
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	28,242	$	2,994	$	642	$	30,594	$	0
Obligations of U.S. states and their political subdivisions	9,880		676		63		10,493		0
Foreign government bonds	96,710		16,714		314		113,110		0
U.S. public corporate securities	82,257		3,912		2,754		83,415		(2		)
U.S. private corporate securities(1)	32,450		1,151		581		33,020		0
Foreign public corporate securities	27,671		2,061		531		29,201		(3		)
Foreign private corporate securities	25,314		434		1,217		24,531		0
Asset-backed securities(2)	12,888		162		77		12,973		(160		)
Commercial mortgage-backed securities	13,396		99		180		13,315		0
Residential mortgage-backed securities(3)	2,937		99		32		3,004		(1		)
Total fixed maturities, available-for-sale(1)	$	331,745	$	28,302	$	6,391	$	353,656	$	(166	)

Fixed Maturities, Held-to-maturity Securities

	March 31, 2019
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(in millions)
Fixed maturities, held-to-maturity:
Foreign government bonds	$	876	$	285	$	0	$	1,161
Foreign public corporate securities	663		70		0		733
Foreign private corporate securities(5)	94		3		0		97
Residential mortgage-backed securities(3)	349		25		0		374
Total fixed maturities, held-to-maturity(5)	$	1,982	$	383	$	0	$	2,365

__________

(1) Excludes notes with amortized cost of $4,216 million (fair value, $4,216 million), which have been offset with the associated payables under a netting agreement.

(2) Includes credit-tranched securities collateralized by loan obligations, sub-prime mortgages, auto loans, credit cards, education loans and other asset types.

(3) Includes publicly-traded agency pass-through securities and collateralized mortgage obligations.

(4) Represents the amount of unrealized losses remaining in AOCI, from the impairment measurement date. Amount excludes $419 million of net unrealized gains on impaired available-for-sale securities and $2 million of net unrealized gains on impaired held-to-maturity securities relating to changes in the value of such securities subsequent to the impairment measurement date.

(5)

Excludes notes with amortized cost of $4,879 million (fair value, $4,930 million), which have been offset with the associated payables under a netting agreement.

	December 31, 2018
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(in millions)
Fixed maturities, held-to-maturity:
Foreign government bonds	$	885	$	269	$	0	$	1,154
Foreign public corporate securities	668		64		0		732
Foreign private corporate securities(5)	95		3		0		98
Residential mortgage-backed securities(3)	365		23		0		388
Total fixed maturities, held-to-maturity(5)	$	2,013	$	359	$	0	$	2,372

__________

(1) Excludes notes with amortized cost of $4,216 million (fair value, $4,216 million), which have been offset with the associated payables under a netting agreement.

(2) Includes credit-tranched securities collateralized by loan obligations, sub-prime mortgages, auto loans, credit cards, education loans and other asset types.

(3) Includes publicly-traded agency pass-through securities and collateralized mortgage obligations.

(4) Represents the amount of unrealized losses remaining in AOCI, from the impairment measurement date. Amount excludes $356 million of net unrealized gains on impaired available-for-sale securities and $1 million of net unrealized gains on impaired held-to-maturity securities relating to changes in the value of such securities subsequent to the impairment measurement date.

(5)

Excludes notes with amortized cost of $4,879 million (fair value, $4,879 million), which have been offset with the associated payables under a netting agreement.

Duration Of Gross Unrealized Losses On Fixed Maturity Securities

The following tables set forth the fair value and gross unrealized losses aggregated by investment category and length of time that individual fixed maturity securities had been in a continuous unrealized loss position, as of the dates indicated:

	March 31, 2019
	Less Than Twelve Months				Twelve Months or More				Total
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
	(in millions)
Fixed maturities(1):
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	1,304	$	2	$	6,431	$	327	$	7,735	$	329
Obligations of U.S. states and their political subdivisions	0		0		345		6		345		6
Foreign government bonds	751		59		1,512		54		2,263		113
U.S. public corporate securities	4,111		104		17,720		798		21,831		902
U.S. private corporate securities	1,747		74		7,379		217		9,126		291
Foreign public corporate securities	1,228		37		3,145		142		4,373		179
Foreign private corporate securities	4,411		158		7,551		650		11,962		808
Asset-backed securities	6,223		41		1,511		12		7,734		53
Commercial mortgage-backed securities	72		0		3,293		54		3,365		54
Residential mortgage-backed securities	23		0		883		14		906		14
Total	$	19,870	$	475	$	49,770	$	2,274	$	69,640	$	2,749

__________ 

(1) Includes $13 million of fair value and less than $1 million of gross unrealized losses, which are not reflected in AOCI, on securities classified as held-to-maturity, as of March 31, 2019.

	December 31, 2018
	Less Than Twelve Months				Twelve Months or More				Total
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
	(in millions)
Fixed maturities(1):
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	3,007	$	67	$	6,986	$	575	$	9,993	$	642
Obligations of U.S. states and their political subdivisions	1,725		25		999		38		2,724		63
Foreign government bonds	2,369		136		3,515		178		5,884		314
U.S. public corporate securities	34,064		1,570		13,245		1,184		47,309		2,754
U.S. private corporate securities	8,923		225		7,985		356		16,908		581
Foreign public corporate securities	7,363		308		2,928		223		10,291		531
Foreign private corporate securities	12,218		692		4,468		525		16,686		1,217
Asset-backed securities	8,255		70		669		7		8,924		77
Commercial mortgage-backed securities	1,781		14		4,733		166		6,514		180
Residential mortgage-backed securities	194		1		1,042		31		1,236		32
Total	$	79,899	$	3,108	$	46,570	$	3,283	$	126,469	$	6,391

__________ 

(1)

Includes $13 million of fair value and less than $1 million of gross unrealized losses, which are not reflected in AOCI, on securities classified as held-to-maturity, as of December 31, 2018.

Fixed Maturities Classified by Contractual Maturity Date

The following table sets forth the amortized cost and fair value of fixed maturities by contractual maturities, as of the date indicated:

	March 31, 2019
	Available-for-Sale				Held-to-Maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(in millions)
Fixed maturities:
Due in one year or less	$	17,488	$	17,954	$	66	$	67
Due after one year through five years	49,857		52,880		112		115
Due after five years through ten years	64,580		69,373		582		651
Due after ten years(1)	172,424		195,973		873		1,158
Asset-backed securities	12,566		12,689		0		0
Commercial mortgage-backed securities	13,834		14,059		0		0
Residential mortgage-backed securities	2,899		3,000		349		374
Total	$	333,648	$	365,928	$	1,982	$	2,365

__________ 

(1)

Excludes available-for-sale notes with amortized cost of $4,216 million (fair value, $4,216 million) and held-to-maturity notes with amortized cost of $4,879 million (fair value, $4,930 million), which have been offset with the associated payables under a netting agreement.

Sources of Fixed Maturity Proceeds and Related Investment Gains (Losses) as well as Losses on Impairments

The following table sets forth the sources of fixed maturity proceeds and related investment gains (losses), as well as losses on impairments of fixed maturities, for the periods indicated:

	Three Months Ended March 31,
	2019			2018
	(in millions)
Fixed maturities, available-for-sale:
Proceeds from sales(1)	$	10,162		$	9,585
Proceeds from maturities/prepayments	4,488			5,226
Gross investment gains from sales and maturities	483			374
Gross investment losses from sales and maturities	(188		)	(257		)
OTTI recognized in earnings(2)	(35		)	(39		)
Fixed maturities, held-to-maturity:
Proceeds from maturities/prepayments(3)	$	14		$	36

__________ 

(1) Includes $587 million and $146 million of non-cash related proceeds due to the timing of trade settlements for the three months ended March 31, 2019 and 2018, respectively.

(2) Excludes the portion of OTTI amounts remaining in “Other comprehensive income (loss)” (“OCI”), representing any difference between the fair value of the impaired debt security and the net present value of its projected future cash flows at the time of impairment.

(3)

Includes $0 million of non-cash related proceeds due to the timing of trade settlements for both three months ended March 31, 2019 and 2018.

Credit Losses Recognized in Earnings on Fixed Maturity Securities Held by the Company for which a Portion of the OTTI Loss was Recognized in OCI

The following table sets forth a rollforward of pre-tax amounts remaining in OCI related to fixed maturity securities with credit loss impairments recognized in earnings, for the periods indicated: 

	Three Months Ended March 31,
	2019			2018
	(in millions)
Credit loss impairments:
Balance, beginning of period	$	140		$	319
New credit loss impairments	16			0
Additional credit loss impairments on securities previously impaired	0			0
Increases due to the passage of time on previously recorded credit losses	1			2
Reductions for securities which matured, paid down, prepaid or were sold during the period	(7		)	(113		)
Reductions for securities impaired to fair value during the period(1)	0			(4		)
Accretion of credit loss impairments previously recognized due to an increase in cash flows expected to be collected	(1		)	(1		)
Balance, end of period	$	149		$	203

__________ 

(1)

Represents circumstances where the Company determined in the current period that it intends to sell the security or it is more likely than not that it will be required to sell the security before recovery of the security’s amortized cost.

Assets Supporting Experience-Rated Contractholder Liabilities

The following table sets forth the composition of “Assets supporting experience-rated contractholder liabilities,” as of the dates indicated:

	March 31, 2019				December 31, 2018
	Amortized Cost or Cost		Fair Value		Amortized Cost or Cost		Fair Value
	(in millions)
Short-term investments and cash equivalents	$	368	$	368	$	215	$	215
Fixed maturities:
Corporate securities	13,443		13,572		13,258		13,119
Commercial mortgage-backed securities	2,282		2,297		2,346		2,324
Residential mortgage-backed securities(1)	860		855		828		811
Asset-backed securities(2)	1,629		1,651		1,649		1,665
Foreign government bonds	862		878		1,087		1,083
U.S. government authorities and agencies and obligations of U.S. states	414		461		538		577
Total fixed maturities(3)	19,490		19,714		19,706		19,579
Equity securities	1,386		1,586		1,378		1,460
Total assets supporting experience-rated contractholder liabilities(4)	$	21,244	$	21,668	$	21,299	$	21,254

__________ 

(1) Includes publicly-traded agency pass-through securities and collateralized mortgage obligations.

(2) Includes collateralized loan obligations, credit-tranched securities collateralized by sub-prime mortgages, auto loans, credit cards, education loans and other asset types. Collateralized loan obligations at fair value were $1,031 million and $1,028 million as of March 31, 2019 and December 31, 2018, respectively, all of which were rated AAA.

(3) As a percentage of amortized cost, 93% of the portfolio was considered high or highest quality based on NAIC or equivalent ratings, as of both March 31, 2019 and December 31, 2018.

(4)

As a percentage of amortized cost, 77% and 78% of the portfolio consisted of public securities as of March 31, 2019 and December 31, 2018, respectively.

Securities Concentrations of Credit Risk

As of the dates indicated, the Company’s exposure to concentrations of credit risk of single issuers greater than 10% of the Company’s stockholders’ equity included securities of the U.S. government and certain U.S. government agencies and securities guaranteed by the U.S. government, as well as the securities disclosed below:

	March 31, 2019				December 31, 2018
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(in millions)
Investments in Japanese government and government agency securities:
Fixed maturities, available-for-sale	$	71,107	$	85,874	$	71,952	$	84,461
Fixed maturities, held-to-maturity	855		1,133		864		1,127
Fixed maturities, trading	22		22		22		22
Assets supporting experience-rated contractholder liabilities	670		686		691		697
Total	$	72,654	$	87,715	$	73,529	$	86,307

	March 31, 2019				December 31, 2018
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(in millions)
Investments in South Korean government and government agency securities:
Fixed maturities, available-for-sale	$	10,325	$	12,707	$	10,339	$	12,586
Fixed maturities, held-to-maturity	0		0		0		0
Fixed maturities, trading	0		0		0		0
Assets supporting experience-rated contractholder liabilities	15		16		15		15
Total	$	10,340	$	12,723	$	10,354	$	12,601

Commercial Mortgage and Other Loans

The following table sets forth the composition of “Commercial mortgage and other loans,” as of the dates indicated:

	March 31, 2019					December 31, 2018
	Amount (in millions)			% of Total		Amount (in millions)			% of Total
Commercial mortgage and agricultural property loans by property type:
Office	$	13,097		21.7	%	$	13,280		22.4	%
Retail	8,502			14.1		8,639			14.6
Apartments/Multi-Family	16,789			27.9		16,538			28.0
Industrial	12,255			20.4		11,574			19.6
Hospitality	2,187			3.6		1,931			3.3
Other	3,948			6.6		3,846			6.5
Total commercial mortgage loans	56,778			94.3		55,808			94.4
Agricultural property loans	3,402			5.7		3,316			5.6
Total commercial mortgage and agricultural property loans by property type	60,180			100.0	%	59,124			100.0	%
Allowance for credit losses	(115		)			(123		)
Total net commercial mortgage and agricultural property loans by property type	60,065					59,001
Other loans:
Uncollateralized loans	651					660
Residential property loans	147					157
Other collateralized loans	17					17
Total other loans	815					834
Allowance for credit losses	(5		)			(5		)
Total net other loans	810					829
Total commercial mortgage and other loans(1)	$	60,875				$	59,830

__________ 

(1) Includes loans held for sale which are carried at fair value and are collateralized primarily by apartment complexes. As of March 31, 2019 and December 31, 2018, the net carrying value of these loans was $463 million and $763 million, respectively.

Allowance for Credit Losses

The following table sets forth the activity in the allowance for credit losses for commercial mortgage and other loans, as of the dates indicated:

	Commercial Mortgage Loans			Agricultural Property Loans		Residential Property Loans			Other Collateralized Loans		Uncollateralized Loans		Total
	(in millions)
Balance at December 31, 2017	$	97		$	3	$	1		$	0	$	5	$	106
Addition to (release of) allowance for credit losses	23			0		(1		)	0		0		22
Charge-offs, net of recoveries	0			0		0			0		0		0
Change in foreign exchange	0			0		0			0		0		0
Balance at December 31, 2018	120			3		0			0		5		128
Addition to (release of) allowance for credit losses	(8		)	0		0			0		0		(8		)
Charge-offs, net of recoveries	0			0		0			0		0		0
Change in foreign exchange	0			0		0			0		0		0
Balance at March 31, 2019	$	112		$	3	$	0		$	0	$	5	$	120

Allowance for Credit Losses and Recorded Investment in Commercial Mortgage and Other Loans

The following tables set forth the allowance for credit losses and the recorded investment in commercial mortgage and other loans, as of the dates indicated:

	March 31, 2019
	Commercial Mortgage Loans		Agricultural Property Loans		Residential Property Loans		Other Collateralized Loans		Uncollateralized Loans		Total
	(in millions)
Allowance for credit losses:
Individually evaluated for impairment	$	8	$	0	$	0	$	0	$	0	$	8
Collectively evaluated for impairment	104		3		0		0		5		112
Total ending balance(1)	$	112	$	3	$	0	$	0	$	5	$	120
Recorded investment(2):
Individually evaluated for impairment	$	30	$	18	$	0	$	0	$	0	$	48
Collectively evaluated for impairment	56,748		3,384		147		17		651		60,947
Total ending balance(1)	$	56,778	$	3,402	$	147	$	17	$	651	$	60,995

__________ 

(1) As of March 31, 2019, there were no loans acquired with deteriorated credit quality.

(2) Recorded investment reflects the carrying value gross of related allowance.

	December 31, 2018
	Commercial Mortgage Loans		Agricultural Property Loans		Residential Property Loans		Other Collateralized Loans		Uncollateralized Loans		Total
	(in millions)
Allowance for credit losses:
Individually evaluated for impairment	$	19	$	0	$	0	$	0	$	0	$	19
Collectively evaluated for impairment	101		3		0		0		5		109
Total ending balance(1)	$	120	$	3	$	0	$	0	$	5	$	128
Recorded investment(2):
Individually evaluated for impairment	$	67	$	35	$	0	$	0	$	2	$	104
Collectively evaluated for impairment	55,741		3,281		157		17		658		59,854
Total ending balance(1)	$	55,808	$	3,316	$	157	$	17	$	660	$	59,958

__________

(1) As of December 31, 2018, there were no loans acquired with deteriorated credit quality.

(2)

Recorded investment reflects the carrying value gross of related allowance.

Financing Receivable Credit Quality Indicators

The following tables set forth certain key credit quality indicators based upon the recorded investment gross of allowance for credit losses, as of the date indicated:

Commercial mortgage loans 

	March 31, 2019
	Debt Service Coverage Ratio
	>1.2X		1.0X to <1.2X		< 1.0X		Total
	(in millions)
Loan-to-Value Ratio:
0%-59.99%	$	29,977	$	652	$	129	$	30,758
60%-69.99%	17,205		688		0		17,893
70%-79.99%	6,971		744		42		7,757
80% or greater	195		83		92		370
Total commercial mortgage loans	$	54,348	$	2,167	$	263	$	56,778

Agricultural property loans 

	March 31, 2019
	Debt Service Coverage Ratio
	>1.2X		1.0X to <1.2X		< 1.0X		Total
	(in millions)
Loan-to-Value Ratio:
0%-59.99%	$	3,098	$	167	$	58	$	3,323
60%-69.99%	63		0		0		63
70%-79.99%	0		16		0		16
80% or greater	0		0		0		0
Total agricultural property loans	$	3,161	$	183	$	58	$	3,402

Total commercial mortgage and agricultural property loans

	March 31, 2019
	Debt Service Coverage Ratio
	>1.2X		1.0X to <1.2X		< 1.0X		Total
	(in millions)
Loan-to-Value Ratio:
0%-59.99%	$	33,075	$	819	$	187	$	34,081
60%-69.99%	17,268		688		0		17,956
70%-79.99%	6,971		760		42		7,773
80% or greater	195		83		92		370
Total commercial mortgage and agricultural property loans	$	57,509	$	2,350	$	321	$	60,180

The following tables set forth certain key credit quality indicators based upon the recorded investment gross of allowance for credit losses, as of the date indicated:

Commercial mortgage loans 

	December 31, 2018
	Debt Service Coverage Ratio
	>1.2X		1.0X to <1.2X		< 1.0X		Total
	(in millions)
Loan-to-Value Ratio:
0%-59.99%	$	30,325	$	538	$	161	$	31,024
60%-69.99%	16,538		621		0		17,159
70%-79.99%	6,324		754		41		7,119
80% or greater	332		142		32		506
Total commercial mortgage loans	$	53,519	$	2,055	$	234	$	55,808

Agricultural property loans

	December 31, 2018
	Debt Service Coverage Ratio
	>1.2X		1.0X to <1.2X		< 1.0X		Total
	(in millions)
Loan-to-Value Ratio:
0%-59.99%	$	2,997	$	198	$	57	$	3,252
60%-69.99%	64		0		0		64
70%-79.99%	0		0		0		0
80% or greater	0		0		0		0
Total agricultural property loans	$	3,061	$	198	$	57	$	3,316

Total commercial mortgage and agricultural property loans

	December 31, 2018
	Debt Service Coverage Ratio
	>1.2X		1.0X to <1.2X		< 1.0X		Total
	(in millions)
Loan-to-Value Ratio:
0%-59.99%	$	33,322	$	736	$	218	$	34,276
60%-69.99%	16,602		621		0		17,223
70%-79.99%	6,324		754		41		7,119
80% or greater	332		142		32		506
Total commercial mortgage and agricultural property loans	$	56,580	$	2,253	$	291	$	59,124

Aging of Past Due Commercial Mortgage and Other Loans and Nonaccrual Status

The following tables set forth an aging of past due commercial mortgage and other loans based upon the recorded investment gross of allowance for credit losses, as well as the amount of commercial mortgage and other loans on non-accrual status, as of the dates indicated:

	March 31, 2019
	Current		30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due(1)		Total Past Due		Total Loans		Non-Accrual Status(2)
	(in millions)
Commercial mortgage loans	$	56,778	$	0	$	0	$	0	$	0	$	56,778	$	22
Agricultural property loans	3,383		1		0		18		19		3,402		21
Residential property loans	144		0		1		2		3		147		2
Other collateralized loans	17		0		0		0		0		17		0
Uncollateralized loans	651		0		0		0		0		651		0
Total	$	60,973	$	1	$	1	$	20	$	22	$	60,995	$	45

 __________

(1) As of March 31, 2019, there were no loans in this category accruing interest.

(2) For additional information regarding the Company’s policies for accruing interest on loans, see Note 2 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.

	December 31, 2018
	Current		30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due(1)		Total Past Due		Total Loans		Non-Accrual Status(2)
	(in millions)
Commercial mortgage loans	$	55,808	$	0	$	0	$	0	$	0	$	55,808	$	66
Agricultural property loans	3,301		0		0		15		15		3,316		18
Residential property loans	154		1		0		2		3		157		3
Other collateralized loans	17		0		0		0		0		17		0
Uncollateralized loans	660		0		0		0		0		660		0
Total	$	59,940	$	1	$	0	$	17	$	18	$	59,958	$	87

__________

(1) As of December 31, 2018, there were no loans in this category accruing interest.

(2)

For additional information regarding the Company’s policies for accruing interest on loans, see Note 2 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.

Other Invested Assets

The following table sets forth the composition of “Other invested assets,” as of the dates indicated:

	March 31, 2019		December 31, 2018
	(in millions)
LPs/LLCs:
Equity method:
Private equity	$	3,254	$	3,182
Hedge funds	1,481		1,337
Real estate-related	1,226		1,207
Subtotal equity method	5,961		5,726
Fair value:
Private equity	1,621		1,684
Hedge funds	2,135		2,135
Real estate-related	307		296
Subtotal fair value	4,063		4,115
Total LPs/LLCs	10,024		9,841
Real estate held through direct ownership(1)	2,632		2,466
Derivative instruments	1,028		1,155
Other(2)	1,156		1,064
Total other invested assets	$	14,840	$	14,526

_________ 

(1) As of March 31, 2019 and December 31, 2018, real estate held through direct ownership had mortgage debt of $804 million and $776 million, respectively.

(2) Primarily includes strategic investments made by investment management operations, leveraged leases and member and activity stock held in the Federal Home Loan Banks of New York and Boston. For additional information regarding the Company’s holdings in the Federal Home Loan Banks of New York and Boston, see Note 16 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.

Net Investment Income

The following table sets forth “Net investment income” by investment type, for the periods indicated:

	Three Months Ended March 31,
	2019			2018
	(in millions)
Fixed maturities, available-for-sale(1)	$	3,088		$	2,954
Fixed maturities, held-to-maturity(1)	57			55
Fixed maturities, trading	34			31
Assets supporting experience-rated contractholder liabilities, at fair value	185			191
Equity securities, at fair value	30			35
Commercial mortgage and other loans	600			569
Policy loans	151			152
Other invested assets	205			141
Short-term investments and cash equivalents	118			72
Gross investment income	4,468			4,200
Less: investment expenses	(252		)	(202		)
Net investment income	$	4,216		$	3,998

__________ 

(1)

Includes income on credit-linked notes which are reported on the same financial statement line item as related surplus notes, as conditions are met for right to offset.

Realized Investment Gains (Losses), Net

The following table sets forth “Realized investment gains (losses), net,” by investment type, for the periods indicated:

	Three Months Ended March 31,
	2019			2018
	(in millions)
Fixed maturities(1)	$	260		$	78
Commercial mortgage and other loans	10			12
Investment real estate	0			2
LPs/LLCs	(5		)	6
Derivatives(2)	(1,032		)	328
Other	1			(1		)
Realized investment gains (losses), net	$	(766	)	$	425

__________ 

(1) Includes fixed maturity securities classified as available-for-sale and held-to-maturity and excludes fixed maturity securities classified as trading.

(2)

Includes the hedged items offset in qualifying fair value hedge accounting relationships.

Net Unrealized Gains (Losses) on Investment

The following table sets forth net unrealized gains (losses) on investments, as of the dates indicated:

	March 31, 2019			December 31, 2018
	(in millions)
Fixed maturity securities, available-for-sale—with OTTI	$	251		$	190
Fixed maturity securities, available-for-sale—all other	32,029			21,721
Derivatives designated as cash flow hedges(1)	776			811
Other investments(2)	(2		)	(2		)
Net unrealized gains (losses) on investments	$	33,054		$	22,720

__________ 

(1) For more information on cash flow hedges, see Note 5.

(2) As of March 31, 2019, there were no net unrealized losses on held-to-maturity securities that were previously transferred from available-for-sale. Includes net unrealized gains on certain joint ventures that are strategic in nature and are included in “Other assets.”

Repurchase Agreements and Securities Lending

The following table sets forth the composition of “Securities sold under agreements to repurchase,” as of the dates indicated:

	March 31, 2019						December 31, 2018
	Remaining Contractual Maturities of the Agreements						Remaining Contractual Maturities of the Agreements
	Overnight & Continuous		Up to 30 Days		Total		Overnight & Continuous		Up to 30 Days		Total
	(in millions)
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	780	$	8,718	$	9,498	$	975	$	8,614	$	9,589
U.S. public corporate securities	19		0		19		19		0		19
Residential mortgage-backed securities	0		356		356		0		342		342
Total securities sold under agreements to repurchase(1)	$	799	$	9,074	$	9,873	$	994	$	8,956	$	9,950

__________ 

(1) The Company did not have any agreements with remaining contractual maturities of thirty days or greater, as of the dates indicated.

The following table sets forth the composition of “Cash collateral for loaned securities” which represents the liability to return cash collateral received for the following types of securities loaned, as of the dates indicated:

	March 31, 2019						December 31, 2018
	Remaining Contractual Maturities of the Agreements						Remaining Contractual Maturities of the Agreements
	Overnight & Continuous		Up to 30 Days		Total		Overnight & Continuous		Up to 30 Days		Total
	(in millions)
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	86	$	0	$	86	$	105	$	0	$	105
Obligations of U.S. states and their political subdivisions	47		0		47		88		0		88
Foreign government bonds	440		0		440		325		0		325
U.S. public corporate securities	2,703		0		2,703		2,563		0		2,563
Foreign public corporate securities	673		0		673		693		0		693
Equity securities	144		0		144		155		0		155
Total cash collateral for loaned securities(1)	$	4,093	$	0	$	4,093	$	3,929	$	0	$	3,929

__________ 

(1)

The Company did not have any agreements with remaining contractual maturities of thirty days or greater, as of the dates indicated.

XML

Variable Interest Entities (Tables)

3 Months Ended

Mar. 31, 2019

Variable Interest Entity, Measure of Activity [Abstract]

Schedule of Consolidated Variable Interest Entities

The table below reflects the carrying amount and balance sheet caption in which the assets and liabilities of consolidated VIEs are reported. The liabilities primarily comprise obligations under debt instruments issued by the VIEs. The creditors of these VIEs do not have recourse to the Company in excess of the assets contained within the VIEs.

	Consolidated VIEs for which the Company is the Investment Manager(1)				Other Consolidated VIEs(1)
	March 31, 2019		December 31, 2018		March 31, 2019		December 31, 2018
	(in millions)
Fixed maturities, available-for-sale	$	97	$	73	$	282	$	282
Fixed maturities, held-to-maturity	94		95		824		831
Fixed maturities, trading	1,112		1,076		0		0
Assets supporting experience-rated contractholder liabilities	0		0		7		8
Equity securities	50		41		0		0
Commercial mortgage and other loans	751		730		0		0
Other invested assets	1,761		1,526		93		77
Cash and cash equivalents	124		131		0		0
Accrued investment income	5		5		4		4
Other assets	457		463		733		721
Total assets of consolidated VIEs	$	4,451	$	4,140	$	1,943	$	1,923
Other liabilities	$	325	$	295	$	10	$	17
Notes issued by consolidated VIEs(2)	1,225		955		0		0
Total liabilities of consolidated VIEs	$	1,550	$	1,250	$	10	$	17

 __________

(1) Total assets of consolidated VIEs reflect $2,210 million and $2,013 million as of March 31, 2019 and December 31, 2018, respectively, related to VIEs whose beneficial interests are wholly-owned by consolidated subsidiaries.

(2)

Recourse is limited to the assets of the respective VIE and does not extend to the general credit of the Company. As of March 31, 2019 and December 31, 2018, the maturities of these obligations were greater than five years.

XML

Derivative Instruments (Tables)

3 Months Ended

Mar. 31, 2019

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Derivative Instruments

The table below provides a summary of the gross notional amount and fair value of derivatives contracts by the primary underlying risks, excluding embedded derivatives and associated reinsurance recoverables. Many derivative instruments contain multiple underlying risks. The fair value amounts below represent the gross fair value of derivative contracts prior to taking into account the netting effects of master netting agreements, cash collateral and non-performance risk (“NPR”). This netting impact results in total derivative assets of $1,018 million and $1,148 million as of March 31, 2019 and December 31, 2018, respectively, and total derivative liabilities of $433 million and $127 million as of March 31, 2019 and December 31, 2018, respectively, reflected in the Unaudited Interim Consolidated Statements of Financial Position.

Primary Underlying Risk /Instrument Type	March 31, 2019							December 31, 2018
			Gross Fair Value							Gross Fair Value
	Notional		Assets		Liabilities			Notional		Assets		Liabilities
	(in millions)
Derivatives Designated as Hedge Accounting Instruments:
Interest Rate
Interest Rate Swaps	$	3,835	$	421	$	(69	)	$	3,885	$	305	$	(67	)
Interest Rate Forwards	0		0		0			600		26		0
Foreign Currency
Foreign Currency Forwards	750		22		(4		)	722		26		(2		)
Currency/Interest Rate
Foreign Currency Swaps	21,372		1,359		(352		)	20,724		1,520		(358		)
Total Derivatives Designated as Hedge Accounting Instruments	$	25,957	$	1,802	$	(425	)	$	25,931	$	1,877	$	(427	)
Derivatives Not Qualifying as Hedge Accounting Instruments:
Interest Rate
Interest Rate Swaps	$	139,741	$	6,685	$	(3,288	)	$	140,963	$	5,792	$	(3,435	)
Interest Rate Futures	16,367		1		(23		)	13,991		23		(2		)
Interest Rate Options	22,383		162		(332		)	24,002		147		(314		)
Interest Rate Forwards	2,504		42		0			5,049		72		0
Foreign Currency
Foreign Currency Forwards	21,897		241		(189		)	19,849		246		(138		)
Foreign Currency Options	1		0		0			2		0		0
Currency/Interest Rate
Foreign Currency Swaps	13,645		800		(351		)	13,784		773		(421		)
Credit
Credit Default Swaps	1,181		20		(5		)	5,207		33		(23		)
Equity
Equity Futures	1,325		0		(7		)	1,141		0		(8		)
Equity Options	68,321		478		(614		)	58,693		384		(554		)
Total Return Swaps	16,691		34		(538		)	17,309		1,131		(86		)
Other
Other(1)	512		0		0			508		0		0
Synthetic GICs	80,168		1		0			79,215		2		0
Total Derivatives Not Qualifying as Hedge Accounting Instruments	$	384,736	$	8,464	$	(5,347	)	$	379,713	$	8,603	$	(4,981	)
Total Derivatives(2)(3)	$	410,693	$	10,266	$	(5,772	)	$	405,644	$	10,480	$	(5,408	)

__________

(1) “Other” primarily includes derivative contracts used to improve the balance of the Company’s tail longevity and mortality risk. Under these contracts, the Company’s gains (losses) are capped at the notional amount.

(2) Excludes embedded derivatives and associated reinsurance recoverables which contain multiple underlying risks. The fair value of these embedded derivatives was a net liability of $10,123 million and $8,959 million as of March 31, 2019 and December 31, 2018, respectively, primarily included in “Future policy benefits.”

(3) Recorded in “Other invested assets” and “Other liabilities” on the Unaudited Interim Consolidated Statements of Financial Position.

Schedule of Derivative instruments (hedged item in fair value hedge accounting relationship)

As of March 31, 2019, the following amounts were recorded on the Unaudited Interim Consolidated Statements of Financial Position related to the carrying amount of the hedged assets (liabilities) and cumulative basis adjustments included in the carrying amount for fair value hedges.

Balance Sheet Line Item in which Hedged Item is Recorded	Carrying Amount of the Hedged Assets (Liabilities)			Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Assets (Liabilities)(1)
	(in millions)
Fixed maturities, available-for-sale, at fair value	$	421		$	56
Commercial mortgage and other loans	$	34		$	2
Policyholders’ account balances	$	(1,704	)	$	13
Future policy benefits	$	(562	)	$	(77	)

________

(1) There are no fair value hedging adjustments for hedged assets and liabilities for which hedge accounting has been discontinued.

Offsetting of Financial Assets

The following table presents recognized derivative instruments (excluding embedded derivatives and associated reinsurance recoverables), and repurchase and reverse repurchase agreements that are offset in the Unaudited Interim Consolidated Statements of Financial Position, and/or are subject to an enforceable master netting arrangement or similar agreement, irrespective of whether they are offset in the Unaudited Interim Consolidated Statements of Financial Position.

	March 31, 2019
	Gross Amounts of Recognized Financial Instruments		Gross Amounts Offset in the Statements of Financial Position			Net Amounts Presented in the Statements of Financial Position		Financial Instruments/ Collateral(1)			Net Amount
	(in millions)
Offsetting of Financial Assets:
Derivatives(1)	$	10,177	$	(9,247	)	$	930	$	(736	)	$	194
Securities purchased under agreement to resell	1,199		0			1,199		(1,199		)	0
Total assets	$	11,376	$	(9,247	)	$	2,129	$	(1,935	)	$	194
Offsetting of Financial Liabilities:
Derivatives(1)	$	5,764	$	(5,339	)	$	425	$	(152	)	$	273
Securities sold under agreement to repurchase	9,873		0			9,873		(9,873		)	0
Total liabilities	$	15,637	$	(5,339	)	$	10,298	$	(10,025	)	$	273

	December 31, 2018
	Gross Amounts of Recognized Financial Instruments		Gross Amounts Offset in the Statements of Financial Position			Net Amounts Presented in the Statements of Financial Position		Financial Instruments/ Collateral(1)			Net Amount
	(in millions)
Offsetting of Financial Assets:
Derivatives(1)	$	10,407	$	(9,331	)	$	1,076	$	(614	)	$	462
Securities purchased under agreement to resell	986		0			986		(986		)	0
Total assets	$	11,393	$	(9,331	)	$	2,062	$	(1,600	)	$	462
Offsetting of Financial Liabilities:
Derivatives(1)	$	5,387	$	(5,281	)	$	106	$	(45	)	$	61
Securities sold under agreement to repurchase	9,950		0			9,950		(9,950		)	0
Total liabilities	$	15,337	$	(5,281	)	$	10,056	$	(9,995	)	$	61

__________

(1)

Amounts exclude the excess of collateral received/pledged from/to the counterparty.

Offsetting of Financial Liabilities

The following table presents recognized derivative instruments (excluding embedded derivatives and associated reinsurance recoverables), and repurchase and reverse repurchase agreements that are offset in the Unaudited Interim Consolidated Statements of Financial Position, and/or are subject to an enforceable master netting arrangement or similar agreement, irrespective of whether they are offset in the Unaudited Interim Consolidated Statements of Financial Position.

	March 31, 2019
	Gross Amounts of Recognized Financial Instruments		Gross Amounts Offset in the Statements of Financial Position			Net Amounts Presented in the Statements of Financial Position		Financial Instruments/ Collateral(1)			Net Amount
	(in millions)
Offsetting of Financial Assets:
Derivatives(1)	$	10,177	$	(9,247	)	$	930	$	(736	)	$	194
Securities purchased under agreement to resell	1,199		0			1,199		(1,199		)	0
Total assets	$	11,376	$	(9,247	)	$	2,129	$	(1,935	)	$	194
Offsetting of Financial Liabilities:
Derivatives(1)	$	5,764	$	(5,339	)	$	425	$	(152	)	$	273
Securities sold under agreement to repurchase	9,873		0			9,873		(9,873		)	0
Total liabilities	$	15,637	$	(5,339	)	$	10,298	$	(10,025	)	$	273

	December 31, 2018
	Gross Amounts of Recognized Financial Instruments		Gross Amounts Offset in the Statements of Financial Position			Net Amounts Presented in the Statements of Financial Position		Financial Instruments/ Collateral(1)			Net Amount
	(in millions)
Offsetting of Financial Assets:
Derivatives(1)	$	10,407	$	(9,331	)	$	1,076	$	(614	)	$	462
Securities purchased under agreement to resell	986		0			986		(986		)	0
Total assets	$	11,393	$	(9,331	)	$	2,062	$	(1,600	)	$	462
Offsetting of Financial Liabilities:
Derivatives(1)	$	5,387	$	(5,281	)	$	106	$	(45	)	$	61
Securities sold under agreement to repurchase	9,950		0			9,950		(9,950		)	0
Total liabilities	$	15,337	$	(5,281	)	$	10,056	$	(9,995	)	$	61

__________

(1)

Amounts exclude the excess of collateral received/pledged from/to the counterparty.

Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance

The following table provides the financial statement classification and impact of derivatives used in qualifying and non-qualifying hedge relationships, including the offset of the hedged item in fair value hedge relationships.

	Three Months Ended March 31, 2019
	Realized Investment Gains (Losses)			Net Investment Income			Other Income (Loss)			Interest Expense		Interest Credited to Policyholders’ Account Balances			Policyholders’ Benefits			AOCI(1)
	(in millions)
Derivatives Designated as Hedge Accounting Instruments:
Fair value hedges
Gains (losses) on derivatives designated as hedge instruments:
Interest Rate	$	(5	)	$	(2	)	$	0		$	0	$	68		$	51		$	0
Currency	(1		)	0			0			0		0			0			0
Total gains (losses) on derivatives designated as hedge instruments	(6		)	(2		)	0			0		68			51			0
Gains (losses) on the hedged item:
Interest Rate	2			5			0			0		(66		)	(46		)	0
Currency	1			1			0			0		0			0			0
Total gains (losses) on hedged item	3			6			0			0		(66		)	(46		)	0
Total gains (losses) on fair value hedges net of hedged item	(3		)	4			0			0		2			5			0
Cash flow hedges
Interest Rate	(1		)	0			0			0		0			0			23
Currency	1			0			0			0		0			0			(9		)
Currency/Interest Rate	(8		)	68			(45		)	0		0			0			(58		)
Total gains (losses) on cash flow hedges	(8		)	68			(45		)	0		0			0			(44		)
Net investment hedges
Currency	0			0			0			0		0			0			1
Currency/Interest Rate	0			0			0			0		0			0			0
Total gains (losses) on net investment hedges	0			0			0			0		0			0			1
Derivatives Not Qualifying as Hedge Accounting Instruments:
Interest Rate	1,389			0			0			0		0			0			0
Currency	(39		)	0			4			0		0			0			0
Currency/Interest Rate	184			0			0			0		0			0			0
Credit	69			0			0			0		0			0			0
Equity	(1,811		)	0			0			0		0			0			0
Other	0			0			0			0		0			0			0
Embedded Derivatives	(812		)	0			0			0		0			0			0
Total gains (losses) on derivatives not qualifying as hedge accounting instruments	(1,020		)	0			4			0		0			0			0
Total	$	(1,031	)	$	72		$	(41	)	$	0	$	2		$	5		$	(43	)

	Three Months Ended March 31, 2018(2)
	Realized Investment Gains (Losses)			Net Investment Income			Other Income (Loss)			Interest Expense		Interest Credited to Policyholders’ Account Balances			AOCI(1)
	(in millions)
Derivatives Designated as Hedge Accounting Instruments:
Fair value hedges
Gains (losses) on derivatives designated as hedge instruments:
Interest Rate	$	17		$	(3	)	$	0		$	0	$	(83	)	$	0
Currency	2			0			0			0		0			0
Total gains (losses) on derivatives designated as hedge instruments	19			(3		)	0			0		(83		)	0
Gains (losses) on the hedged item:
Interest Rate	(20		)	14			0			0		86			0
Currency	(2		)	1			0			0		0			0
Total gains (losses) on hedged item	(22		)	15			0			0		86			0
Total gains (losses) on fair value hedges net of hedged item	(3		)	12			0			0		3			0
Cash flow hedges
Interest Rate	0			0			0			0		0			7
Currency	(2		)	0			0			0		0			(8		)
Currency/Interest Rate	(6		)	47			(91		)	0		0			(582		)
Total gains (losses) on cash flow hedges	(8		)	47			(91		)	0		0			(583		)
Net investment hedges
Currency	(2		)	0			0			0		0			(2		)
Currency/Interest Rate	0			0			0			0		0			0
Total gains (losses) on net investment hedges	(2		)	0			0			0		0			(2		)
Derivatives Not Qualifying as Hedge Accounting Instruments:
Interest Rate	(1,516		)	0			0			0		0			0
Currency	414			0			1			0		0			0
Currency/Interest Rate	(549		)	0			(1		)	0		0			0
Credit	(5		)	0			0			0		0			0
Equity	10			0			0			0		0			0
Other	0			0			0			0		0			0
Embedded Derivatives	1,979			0			0			0		0			0
Total gains (losses) on derivatives not qualifying as hedge accounting instruments	333			0			0			0		0			0
Total	$	320		$	59		$	(91	)	$	0	$	3		$	(585	)

_________

(1) Net change in AOCI.

(2)

Prior period amounts have been updated to conform to current period presentation.

Schedule of Derivative Instruments Recognized in Accumulated Other Comprehensive Income (Loss) Before Taxes

Presented below is a rollforward of current period cash flow hedges in AOCI before taxes:  

	(in millions)
Balance, December 31, 2018	$	811
Cumulative-effect adjustment from the adoption of ASU 2017-12(1)	9
Amount recorded in AOCI
Interest Rate	22
Currency	(8		)
Currency/Interest Rate	(43		)
Total amount recorded in AOCI	(29		)
Amount reclassified from AOCI to income
Interest Rate	1
Currency	(1		)
Currency/Interest Rate	(15		)
Total amount reclassified from AOCI to income	(15		)
Balance, March 31, 2019	$	776

_________

(1)

See Note 2 for details.

XML

Fair Value of Assets and Liabilities (Tables)

3 Months Ended

Mar. 31, 2019

Fair Value Disclosures [Abstract]

Fair Value, Assets and Liabilities Measured on Recurring Basis

The tables below present the balances of assets and liabilities reported at fair value on a recurring basis, as of the dates indicated.

	As of March 31, 2019
	Level 1		Level 2		Level 3		Netting(1)			Total
	(in millions)
Fixed maturities, available-for-sale:
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	0	$	32,723	$	88	$			$	32,811
Obligations of U.S. states and their political subdivisions	0		10,844		4					10,848
Foreign government bonds	0		115,278		138					115,416
U.S. corporate public securities	0		87,231		118					87,349
U.S. corporate private securities(2)	0		32,090		1,774					33,864
Foreign corporate public securities	0		29,694		69					29,763
Foreign corporate private securities	0		25,333		796					26,129
Asset-backed securities(3)	0		11,796		893					12,689
Commercial mortgage-backed securities	0		13,114		945					14,059
Residential mortgage-backed securities	0		2,923		77					3,000
Subtotal	0		361,026		4,902					365,928
Assets supporting experience-rated contractholder liabilities:
U.S. Treasury securities and obligations of U.S. government authorities and agencies	0		258		0					258
Obligations of U.S. states and their political subdivisions	0		203		0					203
Foreign government bonds	0		849		29					878
Corporate securities	0		12,980		592					13,572
Asset-backed securities(3)	0		1,591		60					1,651
Commercial mortgage-backed securities	0		2,297		0					2,297
Residential mortgage-backed securities	0		855		0					855
Equity securities	1,324		261		1					1,586
All other(4)	0		264		0					264
Subtotal	1,324		19,558		682					21,564
Fixed maturities, trading	0		3,195		240					3,435
Equity securities	5,188		779		674					6,641
Commercial mortgage and other loans	0		463		0					463
Other invested assets(5)	3		10,261		373		(9,247		)	1,390
Short-term investments	2,412		2,749		168					5,329
Cash equivalents	1,636		5,318		1					6,955
Other assets	0		0		48					48
Separate account assets(6)(7)	43,565		227,125		1,635					272,325
Total assets	$	54,128	$	630,474	$	8,723	$	(9,247	)	$	684,078
Future policy benefits(8)	$	0	$	0	$	10,025	$			$	10,025
Other liabilities	35		5,740		146		(5,339		)	582
Notes issued by consolidated VIEs	0		0		817					817
Total liabilities	$	35	$	5,740	$	10,988	$	(5,339	)	$	11,424

	As of December 31, 2018
	Level 1		Level 2		Level 3		Netting(1)			Total
	(in millions)
Fixed maturities, available-for-sale:
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	0	$	30,513	$	81	$			$	30,594
Obligations of U.S. states and their political subdivisions	0		10,488		5					10,493
Foreign government bonds	0		112,985		125					113,110
U.S. corporate public securities	0		83,282		133					83,415
U.S. corporate private securities(2)	0		31,265		1,755					33,020
Foreign corporate public securities	0		29,148		53					29,201
Foreign corporate private securities	0		23,787		744					24,531
Asset-backed securities(3)	0		11,726		1,247					12,973
Commercial mortgage-backed securities	0		13,302		13					13,315
Residential mortgage-backed securities	0		2,925		79					3,004
Subtotal	0		349,421		4,235					353,656
Assets supporting experience-rated contractholder liabilities:
U.S. Treasury securities and obligations of U.S. government authorities and agencies	0		381		0					381
Obligations of U.S. states and their political subdivisions	0		196		0					196
Foreign government bonds	0		858		225					1,083
Corporate securities	0		12,675		444					13,119
Asset-backed securities(3)	0		1,516		149					1,665
Commercial mortgage-backed securities	0		2,324		0					2,324
Residential mortgage-backed securities	0		811		0					811
Equity securities	1,222		237		1					1,460
All other(4)	0		215		0					215
Subtotal	1,222		19,213		819					21,254
Fixed maturities, trading	0		3,037		206					3,243
Equity securities	4,819		610		671					6,100
Commercial mortgage and other loans	0		763		0					763
Other invested assets(5)	23		10,454		263		(9,331		)	1,409
Short-term investments	2,713		2,691		89					5,493
Cash equivalents	2,848		6,553		77					9,478
Other assets	0		0		25					25
Separate account assets(6)(7)	39,534		212,998		1,534					254,066
Total assets	$	51,159	$	605,740	$	7,919	$	(9,331	)	$	655,487
Future policy benefits(8)	$	0	$	0	$	8,926	$			$	8,926
Other liabilities	18		5,398		56		(5,281		)	191
Notes issued by consolidated VIEs	0		0		595					595
Total liabilities	$	18	$	5,398	$	9,577	$	(5,281	)	$	9,712

__________

(1) “Netting” amounts represent cash collateral of $3,908 million and $4,050 million as of March 31, 2019 and December 31, 2018, respectively, and the impact of offsetting asset and liability positions held with the same counterparty, subject to master netting arrangements.

(2) Excludes notes with both fair value and carrying amount of $4,216 million and $4,216 million, as of March 31, 2019 and December 31, 2018, respectively, which have been offset with the associated payables under a netting agreement.

(3) Includes credit-tranched securities collateralized by syndicated bank loans, sub-prime mortgages, auto loans, credit cards, education loans and other asset types.

(4) All other represents cash equivalents and short-term investments.

(5) Other invested assets excluded from the fair value hierarchy include certain hedge funds, private equity funds and other funds for which fair value is measured at net asset value (“NAV”) per share (or its equivalent) as a practical expedient. As of March 31, 2019 and December 31, 2018, the fair values of such investments were $4,063 million and $4,115 million respectively.

(6) Separate account assets included in the fair value hierarchy exclude investments in entities that calculate NAV per share (or its equivalent) as a practical expedient. Such investments excluded from the fair value hierarchy include investments in real estate, hedge funds and other invested assets. As of March 31, 2019 and December 31, 2018, the fair value of such investments was $24,919 million and $25,070 million, respectively.

(7) Separate account assets represent segregated funds that are invested for certain customers. Investment risks associated with market value changes are borne by the customers, except to the extent of minimum guarantees made by the Company with respect to certain accounts. Separate account liabilities are not included in the above table as they are reported at contract value and not fair value in the Company’s Unaudited Interim Consolidated Statements of Financial Position.

(8) As of March 31, 2019, the net embedded derivative liability position of $10.0 billion includes $0.7 billion of embedded derivatives in an asset position and $10.7 billion of embedded derivatives in a liability position. As of December 31, 2018, the net embedded derivative liability position of $8.9 billion includes $0.7 billion of embedded derivatives in an asset position and $9.6 billion of embedded derivatives in a liability position.

Fair Value Inputs, Assets and Liabilities, Quantitative Information

The tables below present quantitative information on significant internally-priced Level 3 assets and liabilities.

	As of March 31, 2019
	Fair Value		Valuation Techniques	Unobservable Inputs	Minimum		Maximum	Weighted Average	Impact of Increase in Input on Fair Value(1)
	(in millions)
Assets:
Corporate securities(2)	$	1,362	Discounted  cash flow	Discount rate	0.49%	-	20.00%	8.23%	Decrease
			Market comparables	EBITDA multiples(3)	4.5X		9.2X	8.1X	Increase
			Liquidation	Liquidation value	12.35%	-	100.00%	62.59%	Increase
Separate account assets-commercial mortgage loans(4)	$	822	Discounted cash flow	Spread	1.06%	-	2.45%	1.22%	Decrease
Liabilities:
Future policy benefits(5)	$	10,025	Discounted cash flow	Lapse rate(6)	1%	-	13%		Decrease
				Spread over LIBOR(7)	0.12%	-	1.35%		Decrease
				Utilization rate(8)	50%	-	97%		Increase
				Withdrawal rate	See table footnote (9) below.
				Mortality rate(10)	0%	-	15%		Decrease
				Equity volatility curve	15%	-	22%		Increase

	As of December 31, 2018
	Fair Value		Valuation Techniques	Unobservable Inputs	Minimum		Maximum	Weighted Average	Impact of Increase in Input on Fair Value(1)
	(in millions)
Assets:
Corporate securities(2)	$	1,392	Discounted  cash flow	Discount rate	0.57%	-	20%	8.58%	Decrease
			Market comparables	EBITDA multiples(3)	4.5X	-	8.5X	8.1X	Increase
			Liquidation	Liquidation value	11.77%	-	94.00%	32.16%	Increase
Separate account assets-commercial mortgage loans(4)	$	785	Discounted cash flow	Spread	1.12%	-	2.55%	1.29%	Decrease
Liabilities:
Future policy benefits(5)	$	8,926	Discounted cash flow	Lapse rate(6)	1%	-	13%		Decrease
				Spread over LIBOR(7)	0.36%	-	1.60%		Decrease
				Utilization rate(8)	50%	-	97%		Increase
				Withdrawal rate	See table footnote (9) below.
				Mortality rate(10)	0%	-	15%		Decrease
				Equity volatility curve	18%	-	22%		Increase

__________ 

(1) Conversely, the impact of a decrease in input would have the opposite impact on fair value as that presented in the table.

(2) Includes assets classified as fixed maturities available-for-sale, assets supporting experience-rated contractholder liabilities and fixed maturities trading.

(3) Represents multiples of earnings before interest, taxes, depreciation and amortization (“EBITDA”), and are amounts used when the Company has determined that market participants would use such multiples when valuing the investments.

(4) Changes in the fair value of separate account assets are borne by customers and thus are offset by changes in separate account liabilities on the Company’s Unaudited Interim Consolidated Statements of Financial Position. As a result, changes in value associated with these investments are not reflected in the Company’s Unaudited Interim Consolidated Statements of Operations.

(5) Future policy benefits primarily represent general account liabilities for the living benefit features of the Company’s variable annuity contracts which are accounted for as embedded derivatives. Since the valuation methodology for these liabilities uses a range of inputs that vary at the contract level over the cash flow projection period, presenting a range, rather than weighted average, is a more meaningful representation of the unobservable inputs used in the valuation.

(6) Lapse rates are adjusted at the contract level based on the in-the-moneyness of the living benefit and reflect other factors, such as the applicability of any surrender charges. Lapse rates are reduced when contracts are more in-the-money. Lapse rates are also generally assumed to be lower for the period where surrender charges apply.

(7) The spread over the London Inter-Bank Offered Rate (“LIBOR”) swap curve represents the premium added to the proxy for the risk-free rate (LIBOR) to reflect our estimates of rates that a market participant would use to value the living benefit contracts in both the accumulation and payout phases. This spread includes an estimate of NPR, which is the risk that the obligation will not be fulfilled by the Company. NPR is primarily estimated by utilizing the credit spreads associated with issuing funding agreements, adjusted for any illiquidity risk premium. In order to reflect the financial strength ratings of the Company, credit spreads associated with funding agreements, as opposed to credit spread associated with debt, are utilized in developing this estimate because both funding agreements and living benefit contracts are insurance liabilities and are therefore senior to debt.

(8) The utilization rate assumption estimates the percentage of contracts that will utilize the benefit during the contract duration, and begin lifetime withdrawals at various time intervals from contract inception. The remaining contractholders are assumed to either begin lifetime withdrawals immediately or never utilize the benefit. Utilization assumptions may vary by product type, tax status and age. The impact of changes in these assumptions is highly dependent on the product type, the age of the contractholder at the time of the sale and the timing of the first lifetime income withdrawal. Range reflects the utilization rate for the vast majority of business with living benefits.

(9) The withdrawal rate assumption estimates the magnitude of annual contractholder withdrawals relative to the maximum allowable amount under the contract. These assumptions vary based on the age of the contractholder, the tax status of the contract and the duration since the contractholder began lifetime withdrawals. As of March 31, 2019 and December 31, 2018, the minimum withdrawal rate assumption is 78% and the maximum withdrawal rate assumption may be greater than 100%. The fair value of the liability will generally increase the closer the withdrawal rate is to 100% and decrease as the withdrawal rate moves further away from 100%.

(10) Range reflects the mortality rate for the vast majority of business with living benefits, with policyholders ranging from 50 to 90 years old. While the majority of living benefits have a minimum age requirement, certain benefits do not have an age restriction. This results in contractholders for certain benefits with mortality rates approaching 0%. Based on historical experience, the Company applies a set of age and duration specific mortality rate adjustments compared to standard industry tables. A mortality improvement assumption is also incorporated into the overall mortality table.

Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation

The following tables describe changes in fair values of Level 3 assets and liabilities as of the dates indicated, as well as the portion of gains or losses included in income attributable to unrealized gains or losses related to those assets and liabilities still held at the end of their respective periods. When a determination is made to classify assets and liabilities within Level 3, the determination is based on significance of the unobservable inputs in the overall fair value measurement. All transfers are based on changes in the observability of the valuation inputs, including the availability of pricing service information that the Company can validate. All transfers are generally reported at the value as of the beginning of the quarter in which transfers occur for any such assets still held at the end of the quarter.

	Three Months Ended March 31, 2019
	Fair Value, beginning of period			Total realized and unrealized gains (losses)			Purchases		Sales			Issuances			Settlements			Other(1)			Transfers into Level 3		Transfers out of Level 3			Fair Value, end of period			Unrealized gains (losses) for assets still held(2)
	(in millions)
Fixed maturities, available-for-sale:
U.S. government	$	81		$	0		$	7	$	0		$	0		$	0		$	0		$	0	$	0		$	88		$	0
U.S. states	5			0			0		0			0			(1		)	0			0		0			4			0
Foreign government	125			3			0		0			0			0			1			9		0			138			0
Corporate securities(3)	2,685			4			319		(12		)	0			(379		)	(2		)	164		(22		)	2,757			(21		)
Structured securities(4)	1,339			17			318		0			0			(231		)	(2		)	733		(259		)	1,915			0
Assets supporting experience-rated contractholder liabilities:
Foreign government	225			0			0		0			0			0			(196		)	0		0			29			0
Corporate securities(3)	444			5			27		0			0			(76		)	196			0		(4		)	592			(5		)
Structured securities(4)	149			0			6		0			0			(21		)	0			0		(74		)	60			0
Equity securities	1			0			0		0			0			0			0			0		0			1			0
All other activity	0			0			0		0			0			0			0			0		0			0			0
Other assets:
Fixed maturities, trading	206			(4		)	38		(1		)	0			0			2			0		(1		)	240			0
Equity securities	671			8			23		(11		)	0			(15		)	(2		)	0		0			674			7
Other invested assets	263			(1		)	157		0			0			(42		)	(4		)	0		0			373			(1		)
Short-term investments	89			0			153		0			0			(74		)	0			0		0			168			0
Cash equivalents	77			0			1		0			0			(77		)	0			0		0			1			0
Other assets	25			14			9		0			0			0			0			0		0			48			14
Separate account assets(5)	1,534			81			89		(11		)	0			(23		)	0			0		(35		)	1,635			74
Liabilities:
Future policy benefits	(8,926		)	(810		)	0		0			(290		)	0			1			0		0			(10,025		)	(879		)
Other liabilities	(56		)	(51		)	0		0			(30		)	(6		)	(3		)	0		0			(146		)	(51		)
Notes issued by consolidated VIEs	(595		)	(2		)	0		0			(858		)	638			0			0		0			(817		)	(2		)

	Three Months Ended March 31, 2019
	Total realized and unrealized gains (losses)												Unrealized gains (losses) for assets still held(2)
	Realized investment gains (losses), net			Other income			Interest credited to policyholders’ account balances		Included in other comprehensive income (losses)		Net investment income		Realized investment gains (losses), net			Other income			Interest credited to policyholders’ account balances
	(in millions)
Fixed maturities, available-for-sale	$	(2	)	$	0		$	0	$	22	$	4	$	(21	)	$	0		$	0
Assets supporting experience-rated contractholder liabilities	0			3			0		0		2		0			(5		)	0
Other assets:
Fixed maturities, trading	0			(4		)	0		0		0		0			0			0
Equity securities	0			8			0		0		0		0			7			0
Other invested assets	(1		)	0			0		0		0		(1		)	0			0
Short-term investments	0			0			0		0		0		0			0			0
Cash equivalents	0			0			0		0		0		0			0			0
Other assets	14			0			0		0		0		14			0			0
Separate account assets(5)	0			0			80		0		1		0			0			74
Liabilities:
Future policy benefits	(810		)	0			0		0		0		(879		)	0			0
Other liabilities	(51		)	0			0		0		0		(51		)	0			0
Notes issued by consolidated VIEs	(2		)	0			0		0		0		(2		)	0			0

	Three Months Ended March 31, 2018
	Fair Value, beginning of period			Total realized and unrealized gains (losses)			Purchases		Sales			Issuances			Settlements			Other(1)			Transfers into Level 3		Transfers out of Level 3			Fair Value, end of period			Unrealized gains (losses) for assets still held(2)
	(in millions)
Fixed maturities, available-for-sale:
U.S. government	$	52		$	0		$	7	$	0		$	0		$	0		$	0		$	0	$	0		$	59		$	0
U.S. states	5			0			0		0			0			0			0			0		0			5			0
Foreign government	148			0			0		0			0			0			1			5		(26		)	128			0
Corporate securities(3)	2,776			11			118		(1		)	0			(169		)	12			60		(72		)	2,735			(9		)
Structured securities(4)	6,715			(15		)	1,548		(66		)	0			(649		)	30			1,071		(1,735		)	6,899			0
Assets supporting experience-rated contractholder liabilities:
Foreign government	223			(3		)	0		0			0			0			0			0		0			220			(4		)
Corporate securities(3)	462			1			24		0			0			(18		)	0			0		(1		)	468			0
Structured securities(4)	722			0			3		0			0			(13		)	0			28		(76		)	664			0
Equity securities	4			1			0		0			0			0			0			0		0			5			1
All other activity	7			0			19		0			0			(19		)	0			0		0			7			0
Other assets:
Fixed maturities, trading	156			(2		)	40		(4		)	0			0			5			11		(2		)	204			4
Equity securities	795			14			7		(17		)	0			(37		)	26			0		(3		)	785			13
Other invested assets	137			8			1		0			0			0			(2		)	0		0			144			1
Short-term investments	8			(1		)	14		0			0			(12		)	1			0		0			10			(1		)
Cash equivalents	0			0			0		0			0			0			0			0		0			0			0
Other assets	13			(13		)	0		0			0			0			0			0		0			0			(13		)
Separate account assets(5)	2,122			(33		)	237		(8		)	0			(121		)	0			195		(32		)	2,360			(26		)
Liabilities:
Future policy benefits	(8,720		)	2,026			0		0			(287		)	0			0			0		0			(6,981		)	1,937
Other liabilities	(50		)	(19		)	10		0			0			2			1			0		0			(56		)	(13		)
Notes issued by consolidated VIEs	(1,196		)	(3		)	0		0			0			0			587			0		0			(612		)	(3		)

	Three Months Ended March 31, 2018
	Total realized and unrealized gains (losses)														Unrealized gains (losses) for assets still held(2)
	Realized investment gains (losses), net			Other income			Interest credited to policyholders’ account balances			Included in other comprehensive income (losses)			Net investment income		Realized investment gains (losses), net			Other income			Interest credited to policyholders’ account balances
	(in millions)
Fixed maturities, available-for-sale	$	6		$	0		$	0		$	(14	)	$	4	$	(9	)	$	0		$	0
Assets supporting experience-rated contractholder liabilities	0			(2		)	0			0			1		0			(3		)	0
Other assets:
Fixed maturities, trading	0			(2		)	0			0			0		0			4			0
Equity securities	0			14			0			0			0		0			13			0
Other invested assets	8			0			0			0			0		1			0			0
Short-term investments	(1		)	0			0			0			0		(1		)	0			0
Cash equivalents	0			0			0			0			0		0			0			0
Other assets	(13		)	0			0			0			0		(13		)	0			0
Separate account assets(5)	0			0			(33		)	0			0		0			0			(26		)
Liabilities:
Future policy benefits	2,026			0			0			0			0		1,937			0			0
Other liabilities	(19		)	0			0			0			0		(13		)	0			0
Notes issued by consolidated VIEs	(3		)	0			0			0			0		(3		)	0			0

__________

(1) Other, for the periods ended March 31, 2019 and March 31, 2018, primarily represent deconsolidation of VIE, reclassifications of certain assets between reporting categories and foreign currency translation.

(2) Unrealized gains or losses related to assets still held at the end of the period do not include amortization or accretion of premiums and discounts.

(3) Includes U.S. corporate public, U.S. corporate private, foreign corporate public and foreign corporate private securities.

(4) Includes asset-backed, commercial mortgage-backed and residential mortgage-backed securities.

(5) Separate account assets represent segregated funds that are invested for certain customers. Investment risks associated with market value changes are borne by the customers, except to the extent of minimum guarantees made by the Company with respect to certain accounts. Separate account liabilities are not included in the above table as they are reported at contract value and not fair value in the Company’s Unaudited Interim Consolidated Statements of Financial Position.

Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation

The following tables describe changes in fair values of Level 3 assets and liabilities as of the dates indicated, as well as the portion of gains or losses included in income attributable to unrealized gains or losses related to those assets and liabilities still held at the end of their respective periods. When a determination is made to classify assets and liabilities within Level 3, the determination is based on significance of the unobservable inputs in the overall fair value measurement. All transfers are based on changes in the observability of the valuation inputs, including the availability of pricing service information that the Company can validate. All transfers are generally reported at the value as of the beginning of the quarter in which transfers occur for any such assets still held at the end of the quarter.

	Three Months Ended March 31, 2019
	Fair Value, beginning of period			Total realized and unrealized gains (losses)			Purchases		Sales			Issuances			Settlements			Other(1)			Transfers into Level 3		Transfers out of Level 3			Fair Value, end of period			Unrealized gains (losses) for assets still held(2)
	(in millions)
Fixed maturities, available-for-sale:
U.S. government	$	81		$	0		$	7	$	0		$	0		$	0		$	0		$	0	$	0		$	88		$	0
U.S. states	5			0			0		0			0			(1		)	0			0		0			4			0
Foreign government	125			3			0		0			0			0			1			9		0			138			0
Corporate securities(3)	2,685			4			319		(12		)	0			(379		)	(2		)	164		(22		)	2,757			(21		)
Structured securities(4)	1,339			17			318		0			0			(231		)	(2		)	733		(259		)	1,915			0
Assets supporting experience-rated contractholder liabilities:
Foreign government	225			0			0		0			0			0			(196		)	0		0			29			0
Corporate securities(3)	444			5			27		0			0			(76		)	196			0		(4		)	592			(5		)
Structured securities(4)	149			0			6		0			0			(21		)	0			0		(74		)	60			0
Equity securities	1			0			0		0			0			0			0			0		0			1			0
All other activity	0			0			0		0			0			0			0			0		0			0			0
Other assets:
Fixed maturities, trading	206			(4		)	38		(1		)	0			0			2			0		(1		)	240			0
Equity securities	671			8			23		(11		)	0			(15		)	(2		)	0		0			674			7
Other invested assets	263			(1		)	157		0			0			(42		)	(4		)	0		0			373			(1		)
Short-term investments	89			0			153		0			0			(74		)	0			0		0			168			0
Cash equivalents	77			0			1		0			0			(77		)	0			0		0			1			0
Other assets	25			14			9		0			0			0			0			0		0			48			14
Separate account assets(5)	1,534			81			89		(11		)	0			(23		)	0			0		(35		)	1,635			74
Liabilities:
Future policy benefits	(8,926		)	(810		)	0		0			(290		)	0			1			0		0			(10,025		)	(879		)
Other liabilities	(56		)	(51		)	0		0			(30		)	(6		)	(3		)	0		0			(146		)	(51		)
Notes issued by consolidated VIEs	(595		)	(2		)	0		0			(858		)	638			0			0		0			(817		)	(2		)

	Three Months Ended March 31, 2019
	Total realized and unrealized gains (losses)												Unrealized gains (losses) for assets still held(2)
	Realized investment gains (losses), net			Other income			Interest credited to policyholders’ account balances		Included in other comprehensive income (losses)		Net investment income		Realized investment gains (losses), net			Other income			Interest credited to policyholders’ account balances
	(in millions)
Fixed maturities, available-for-sale	$	(2	)	$	0		$	0	$	22	$	4	$	(21	)	$	0		$	0
Assets supporting experience-rated contractholder liabilities	0			3			0		0		2		0			(5		)	0
Other assets:
Fixed maturities, trading	0			(4		)	0		0		0		0			0			0
Equity securities	0			8			0		0		0		0			7			0
Other invested assets	(1		)	0			0		0		0		(1		)	0			0
Short-term investments	0			0			0		0		0		0			0			0
Cash equivalents	0			0			0		0		0		0			0			0
Other assets	14			0			0		0		0		14			0			0
Separate account assets(5)	0			0			80		0		1		0			0			74
Liabilities:
Future policy benefits	(810		)	0			0		0		0		(879		)	0			0
Other liabilities	(51		)	0			0		0		0		(51		)	0			0
Notes issued by consolidated VIEs	(2		)	0			0		0		0		(2		)	0			0

	Three Months Ended March 31, 2018
	Fair Value, beginning of period			Total realized and unrealized gains (losses)			Purchases		Sales			Issuances			Settlements			Other(1)			Transfers into Level 3		Transfers out of Level 3			Fair Value, end of period			Unrealized gains (losses) for assets still held(2)
	(in millions)
Fixed maturities, available-for-sale:
U.S. government	$	52		$	0		$	7	$	0		$	0		$	0		$	0		$	0	$	0		$	59		$	0
U.S. states	5			0			0		0			0			0			0			0		0			5			0
Foreign government	148			0			0		0			0			0			1			5		(26		)	128			0
Corporate securities(3)	2,776			11			118		(1		)	0			(169		)	12			60		(72		)	2,735			(9		)
Structured securities(4)	6,715			(15		)	1,548		(66		)	0			(649		)	30			1,071		(1,735		)	6,899			0
Assets supporting experience-rated contractholder liabilities:
Foreign government	223			(3		)	0		0			0			0			0			0		0			220			(4		)
Corporate securities(3)	462			1			24		0			0			(18		)	0			0		(1		)	468			0
Structured securities(4)	722			0			3		0			0			(13		)	0			28		(76		)	664			0
Equity securities	4			1			0		0			0			0			0			0		0			5			1
All other activity	7			0			19		0			0			(19		)	0			0		0			7			0
Other assets:
Fixed maturities, trading	156			(2		)	40		(4		)	0			0			5			11		(2		)	204			4
Equity securities	795			14			7		(17		)	0			(37		)	26			0		(3		)	785			13
Other invested assets	137			8			1		0			0			0			(2		)	0		0			144			1
Short-term investments	8			(1		)	14		0			0			(12		)	1			0		0			10			(1		)
Cash equivalents	0			0			0		0			0			0			0			0		0			0			0
Other assets	13			(13		)	0		0			0			0			0			0		0			0			(13		)
Separate account assets(5)	2,122			(33		)	237		(8		)	0			(121		)	0			195		(32		)	2,360			(26		)
Liabilities:
Future policy benefits	(8,720		)	2,026			0		0			(287		)	0			0			0		0			(6,981		)	1,937
Other liabilities	(50		)	(19		)	10		0			0			2			1			0		0			(56		)	(13		)
Notes issued by consolidated VIEs	(1,196		)	(3		)	0		0			0			0			587			0		0			(612		)	(3		)

	Three Months Ended March 31, 2018
	Total realized and unrealized gains (losses)														Unrealized gains (losses) for assets still held(2)
	Realized investment gains (losses), net			Other income			Interest credited to policyholders’ account balances			Included in other comprehensive income (losses)			Net investment income		Realized investment gains (losses), net			Other income			Interest credited to policyholders’ account balances
	(in millions)
Fixed maturities, available-for-sale	$	6		$	0		$	0		$	(14	)	$	4	$	(9	)	$	0		$	0
Assets supporting experience-rated contractholder liabilities	0			(2		)	0			0			1		0			(3		)	0
Other assets:
Fixed maturities, trading	0			(2		)	0			0			0		0			4			0
Equity securities	0			14			0			0			0		0			13			0
Other invested assets	8			0			0			0			0		1			0			0
Short-term investments	(1		)	0			0			0			0		(1		)	0			0
Cash equivalents	0			0			0			0			0		0			0			0
Other assets	(13		)	0			0			0			0		(13		)	0			0
Separate account assets(5)	0			0			(33		)	0			0		0			0			(26		)
Liabilities:
Future policy benefits	2,026			0			0			0			0		1,937			0			0
Other liabilities	(19		)	0			0			0			0		(13		)	0			0
Notes issued by consolidated VIEs	(3		)	0			0			0			0		(3		)	0			0

__________

(1) Other, for the periods ended March 31, 2019 and March 31, 2018, primarily represent deconsolidation of VIE, reclassifications of certain assets between reporting categories and foreign currency translation.

(2) Unrealized gains or losses related to assets still held at the end of the period do not include amortization or accretion of premiums and discounts.

(3) Includes U.S. corporate public, U.S. corporate private, foreign corporate public and foreign corporate private securities.

(4) Includes asset-backed, commercial mortgage-backed and residential mortgage-backed securities.

(5) Separate account assets represent segregated funds that are invested for certain customers. Investment risks associated with market value changes are borne by the customers, except to the extent of minimum guarantees made by the Company with respect to certain accounts. Separate account liabilities are not included in the above table as they are reported at contract value and not fair value in the Company’s Unaudited Interim Consolidated Statements of Financial Position.

Fair Value Assets and Liabilities Measured on Recurring Basis, Derivatives

The following tables present the balances of derivative assets and liabilities measured at fair value on a recurring basis, as of the date indicated, by primary underlying risk. These tables include NPR and exclude embedded derivatives and associated reinsurance recoverables. The derivative assets and liabilities shown below are included in “Other invested assets” or “Other liabilities” in the tables contained within the sections “—Assets and Liabilities by Hierarchy Level” and “—Changes in Level 3 Assets and Liabilities,” above.

	As of March 31, 2019
	Level 1		Level 2		Level 3		Netting(1)			Total
	(in millions)
Derivative Assets:
Interest Rate	$	1	$	7,309	$	1	$			$	7,311
Currency	0		263		0					263
Credit	0		20		0					20
Currency/Interest Rate	0		2,159		0					2,159
Equity	1		511		0					512
Other	0		0		0					0
Netting(1)							(9,247		)	(9,247		)
Total derivative assets	$	2	$	10,262	$	1	$	(9,247	)	$	1,018
Derivative Liabilities:
Interest Rate	$	23	$	3,689	$	0	$			$	3,712
Currency	0		193		0					193
Credit	0		5		0					5
Currency/Interest Rate	0		703		0					703
Equity	7		1,152		0					1,159
Other	0		0		0					0
Netting(1)							(5,339		)	(5,339		)
Total derivative liabilities	$	30	$	5,742	$	0	$	(5,339	)	$	433

	As of December 31, 2018
	Level 1		Level 2		Level 3		Netting(1)			Total
	(in millions)
Derivative Assets:
Interest Rate	$	23	$	6,341	$	2	$			$	6,366
Currency	0		273		0					273
Credit	0		33		0					33
Currency/Interest Rate	0		2,292		0					2,292
Equity	0		1,515		0					1,515
Other	0		0		0					0
Netting(1)							(9,331		)	(9,331		)
Total derivative assets	$	23	$	10,454	$	2	$	(9,331	)	$	1,148
Derivative Liabilities:
Interest Rate	$	2	$	3,818	$	0	$			$	3,820
Currency	0		140		0					140
Credit	0		23		0					23
Currency/Interest Rate	0		778		0					778
Equity	7		640		0					647
Other	0		0		0					0
Netting(1)							(5,281		)	(5,281		)
Total derivative liabilities	$	9	$	5,399	$	0	$	(5,281	)	$	127

__________ 

(1)

“Netting” amounts represent cash collateral and the impact of offsetting asset and liability positions held with the same counterparty, subject to master netting agreement.

Fair Value Assets and Liabilities Measured on Recurring Basis Unobservable Input Reconciliation, Derivatives

Changes in Level 3 derivative assets and liabilities—The following tables provide a summary of the changes in fair value of Level 3 derivative assets and liabilities as of the dates indicated, as well as the portion of gains or losses included in income, attributable to unrealized gains or losses related to those assets and liabilities still held at the end of their respective periods.

	Three Months Ended March 31, 2019
	Fair Value, beginning of period		Total realized and unrealized gains (losses)(1)			Purchases		Sales		Issuances		Settlements		Other		Transfers into Level 3(2)		Transfers out of Level 3(2)		Fair Value, end of period		Unrealized gains (losses) for assets still held(1)
	(in millions)
Net Derivative - Equity	$	0	$	0		$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0
Net Derivative - Interest Rate	2		(1		)	0		0		0		0		0		0		0		1		(1		)

	Three Months Ended March 31, 2018
	Fair Value, beginning of period			Total realized and unrealized gains (losses)(1)		Purchases		Sales		Issuances		Settlements		Other(3)			Transfers into Level 3(2)		Transfers out of Level 3(2)		Fair Value, end of period		Unrealized gains (losses) for assets still held(1)
	(in millions)
Net Derivative - Equity	$	10		$	0	$	0	$	0	$	0	$	0	$	(5	)	$	1	$	0	$	6	$	1
Net Derivative - Interest Rate	(3		)	9		0		0		0		0		0			0		0		6		8

__________ 

(1) Total realized and unrealized gains (losses) as well as unrealized gains (losses) for assets still held at the end of the period are recorded in “Realized investment gains (losses), net.”

(2) Transfers into or out of Level 3 are generally reported at the value as of the beginning of the quarter in which the transfers occur for any such positions still held at the end of the quarter.

(3)

Represents conversion of warrants to equity shares.

Fair Value Measurements, Nonrecurring

The following tables represent information for assets measured at fair value on a nonrecurring basis. The fair value measurement is nonrecurring as these assets are measured at fair value only when there is a triggering event (e.g., an evidence of impairment). Assets included in the table are those that were impaired during the respective reporting periods and that are still held as of the reporting date. The estimated fair values for these amounts were determined using significant unobservable inputs (Level 3).

	Three Months Ended March 31,
	2019			2018
	(in millions)
Realized investment gains (losses) net:
Commercial mortgage loans(1)	$	0		$	0
Mortgage servicing rights(2)	$	(1	)	$	2

	March 31, 2019		December 31, 2018
	(in millions)
Carrying value after measurement as of period end:
Commercial mortgage loans(1)	$	14	$	47
Mortgage servicing rights(2)	$	70	$	73

__________ 

(1) Commercial mortgage loans are valued based on discounted cash flows utilizing market rates or the fair value of the underlying real estate collateral.

(2)

Mortgage servicing rights are valued using a discounted cash flow model. The model incorporates assumptions for servicing revenues, which are adjusted for expected prepayments, delinquency rates, escrow deposit income and estimated loan servicing expenses. The discount rates incorporated into the model are determined based on the estimated returns a market participant would require for this business plus a liquidity and risk premium. This estimate includes available relevant data from any active market sales of mortgage servicing rights.

Fair Value, Option

The following tables present information regarding assets and liabilities where the fair value option has been elected.

	Three Months Ended March 31,
	2019		2018
	(in millions)
Liabilities:
Notes issued by consolidated VIEs:
Changes in fair value	$	2	$	3

	Three Months Ended March 31,
	2019		2018
	(in millions)
Commercial mortgage and other loans:
Interest income	$	6	$	2
Notes issued by consolidated VIEs:
Interest expense	$	9	$	9

	March 31, 2019		December 31, 2018
	(in millions)
Commercial mortgage and other loans(1):
Fair value as of period end	$	463	$	763
Aggregate contractual principal as of period end	$	457	$	754
Other assets:
Fair value as of period end	$	10	$	10
Notes issued by consolidated VIEs:
Fair value as of period end	$	817	$	595
Aggregate contractual principal as of period end	$	857	$	632

__________ 

(1)

As of March 31, 2019, for loans for which the fair value option has been elected, there were no loans in non-accrual status and none of the loans were more than 90 days past due and still accruing.

Fair Value Disclosure Financial Instruments Not Carried at Fair Value

The table below presents the carrying amount and fair value by fair value hierarchy level of certain financial instruments that are not reported at fair value. The financial instruments presented below are reported at carrying value on the Company’s Unaudited Interim Consolidated Statements of Financial Position. In some cases, as described below, the carrying amount equals or approximates fair value.

 

	March 31, 2019
	Fair Value								Carrying Amount(1)
	Level 1		Level 2		Level 3		Total		Total
	(in millions)
Assets:
Fixed maturities, held-to-maturity(2)	$	0	$	1,468	$	897	$	2,365	$	1,982
Assets supporting experience-rated contractholders liabilities	52		52		0		104		104
Commercial mortgage and other loans	0		108		61,512		61,620		60,412
Policy loans	0		0		11,986		11,986		11,986
Other invested assets	0		36		0		36		36
Short-term investments	1,553		29		0		1,582		1,582
Cash and cash equivalents	6,574		1,170		0		7,744		7,744
Accrued investment income	0		3,233		0		3,233		3,233
Other assets	146		2,994		555		3,695		3,693
Total assets	$	8,325	$	9,090	$	74,950	$	92,365	$	90,772
Liabilities:
Policyholders’ account balances—investment contracts	$	0	$	31,903	$	68,830	$	100,733	$	100,903
Securities sold under agreements to repurchase	0		9,873		0		9,873		9,873
Cash collateral for loaned securities	0		4,093		0		4,093		4,093
Short-term debt	0		1,862		771		2,633		2,549
Long-term debt(3)	1,887		16,803		1,135		19,825		18,309
Notes issued by consolidated VIEs	0		0		408		408		408
Other liabilities	0		6,290		555		6,845		6,845
Separate account liabilities—investment contracts	0		71,642		25,982		97,624		97,624
Total liabilities	$	1,887	$	142,466	$	97,681	$	242,034	$	240,604

	December 31, 2018
	Fair Value								Carrying Amount(1)
	Level 1		Level 2		Level 3		Total		Total
	(in millions)
Assets:
Fixed maturities, held-to-maturity(2)	$	0	$	1,468	$	904	$	2,372	$	2,013
Assets supporting experience-rated contractholders liabilities	0		0		0		0		0
Commercial mortgage and other loans	0		109		59,106		59,215		59,067
Policy loans	0		0		12,016		12,016		12,016
Other invested assets	0		40		0		40		40
Short-term investments	951		25		0		976		976
Cash and cash equivalents	4,871		1,004		0		5,875		5,875
Accrued investment income	0		3,318		0		3,318		3,318
Other assets	141		2,189		483		2,813		2,813
Total assets	$	5,963	$	8,153	$	72,509	$	86,625	$	86,118
Liabilities:
Policyholders’ account balances—investment contracts	$	0	$	31,422	$	67,006	$	98,428	$	99,829
Securities sold under agreements to repurchase	0		9,950		0		9,950		9,950
Cash collateral for loaned securities	0		3,929		0		3,929		3,929
Short-term debt	0		1,854		658		2,512		2,451
Long-term debt(3)	1,734		15,057		1,181		17,972		17,378
Notes issued by consolidated VIEs	0		0		360		360		360
Other liabilities	0		6,338		510		6,848		6,848
Separate account liabilities—investment contracts	0		66,914		26,022		92,936		92,936
Total liabilities	$	1,734	$	135,464	$	95,737	$	232,935	$	233,681

__________ 

(1) Carrying values presented herein differ from those in the Company’s Unaudited Interim Consolidated Statements of Financial Position because certain items within the respective financial statement captions are not considered financial instruments or are out of scope under authoritative guidance relating to disclosures of the fair value of financial instruments.

(2) Excludes notes with fair value of $4,930 million (carrying amount of $4,879 million) and $4,879 million (carrying amount of $4,879 million) as of both March 31, 2019 and December 31, 2018, respectively, which have been offset with the associated payables under a netting agreement.

(3) Includes notes with fair value of $9,146 million (carrying amount of $9,095 million) and $9,095 million (carrying amount of $9,095 million) as of March 31, 2019 and December 31, 2018, respectively, which have been offset with the associated receivables under a netting agreement.

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Leases (Tables)

3 Months Ended

Mar. 31, 2019

Leases [Abstract]

Schedule of supplemental balance sheet information related to leases table

Supplemental balance sheet information related to leases where the Company is the lessee is included below. Right-of-use assets and lease liabilities are included within “Other assets” and “Other liabilities” respectively.

	March 31, 2019
	(in millions)
Operating Leases:
Right-of-use assets	$	527
Lease liabilities	$	551
Weighted average remaining lease term	6 years
Weighted average discount rate	2.73		%

Lessee, Operating Lease, Liability, Maturity

Maturities of operating lease liabilities are as follows:

	March 31, 2019
	(in millions)
2019 (April - December)	$	117
2020	125
2021	103
2022	77
2023	58
Thereafter	128
Total lease payments	608
Less imputed interest	(57		)
Total	$	551

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Closed Block (Tables)

3 Months Ended

Mar. 31, 2019

Closed Block Disclosure [Abstract]

Schedule of Closed Block Liabilities and Assets

Closed Block liabilities and assets designated to the Closed Block, as well as maximum future earnings to be recognized from these liabilities and assets, are as follows:

	March 31, 2019			December 31, 2018
	(in millions)
Closed Block liabilities
Future policy benefits	$	48,044		$	48,282
Policyholders’ dividends payable	838			812
Policyholders’ dividend obligation	4,355			3,150
Policyholders’ account balances	5,036			5,061
Other Closed Block liabilities	4,147			3,955
Total Closed Block liabilities	62,420			61,260
Closed Block assets
Fixed maturities, available-for-sale, at fair value	39,499			38,538
Fixed maturities, trading, at fair value	185			195
Equity securities, at fair value	2,002			1,784
Commercial mortgage and other loans	8,623			8,782
Policy loans	4,365			4,410
Other invested assets	3,296			3,316
Short-term investments	548			477
Total investments	58,518			57,502
Cash and cash equivalents	549			467
Accrued investment income	475			466
Other Closed Block assets	175			105
Total Closed Block assets	59,717			58,540
Excess of reported Closed Block liabilities over Closed Block assets	2,703			2,720
Portion of above representing accumulated other comprehensive income (loss):
Net unrealized investment gains (losses)	1,938			857
Allocated to policyholder dividend obligation	(1,980		)	(899		)
Future earnings to be recognized from Closed Block assets and Closed Block liabilities	$	2,661		$	2,678

Schedule of Closed Block Dividend Obligation

Information regarding the policyholder dividend obligation is as follows:

	Three Months Ended March 31, 2019
	(in millions)
Balance, December 31, 2018	$	3,150
Impact from earnings allocable to policyholder dividend obligation	123
Change in net unrealized investment gains (losses) allocated to policyholder dividend obligation	1,082
Balance, March 31, 2019	$	4,355

Schedule of Closed Block Revenues Benefits Expenses

Closed Block revenues and benefits and expenses are as follows for the periods indicated:

	Three Months Ended March 31,
	2019			2018
	(in millions)
Revenues
Premiums	$	527		$	551
Net investment income	565			597
Realized investment gains (losses), net	56			(2		)
Other income (loss)	228			21
Total Closed Block revenues	1,376			1,167
Benefits and Expenses
Policyholders’ benefits	709			727
Interest credited to policyholders’ account balances	32			33
Dividends to policyholders	553			308
General and administrative expenses	89			93
Total Closed Block benefits and expenses	1,383			1,161
Closed Block revenues, net of Closed Block benefits and expenses, before income taxes	(7		)	6
Income tax expense (benefit)	(24		)	(9		)
Closed Block revenues, net of Closed Block benefits and expenses and income taxes	$	17		$	15

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Short-Term and Long-Term Debt (Tables)

3 Months Ended

Mar. 31, 2019

Debt Disclosure [Abstract]

Schedule of Short-term Debt

The table below presents the Company’s short-term debt as of the dates indicated:

	March 31, 2019			December 31, 2018
	($ in millions)
Commercial paper:
Prudential Financial	$	25		$	15
Prudential Funding, LLC	714			727
Subtotal commercial paper	739			742
Mortgage Debt(1)	53			53
Current portion of long-term debt(2)	1,740			1,656
Other(3)	17			—
Total short-term debt(4)	$	2,549		$	2,451
Supplemental short-term debt information:
Portion of commercial paper borrowings due overnight	$	327		$	301
Daily average commercial paper outstanding	$	1,624		$	1,554
Weighted average maturity of outstanding commercial paper, in days	15			12
Weighted average interest rate on outstanding short-term debt(5)	2.22		%	1.9		%

__________

(1) Includes $53 million of mortgage debt denominated in foreign currency at both March 31, 2019 and December 31, 2018.

(2) Includes $1,100 million of senior notes at both March 31, 2019 and December 31, 2018, and $141 million and $57 million of mortgage debt that has recourse only to real estate investment property at March 31, 2019 and December 31, 2018, respectively.

(3) Includes $17 million drawn on a revolving line of credit held by a subsidiary at March 31, 2019.

(4) Includes Prudential Financial debt of $1,125 million and $1,115 million at March 31, 2019 and December 31, 2018, respectively.

(5) Excludes the current portion of long-term debt.

Schedule of Long-term Debt

The table below presents the Company’s long-term debt as of the dates indicated:

	March 31, 2019		December 31, 2018
	(in millions)
Fixed-rate notes:
Surplus notes	$	342	$	341
Surplus notes subject to set-off arrangements(1)	6,895		6,895
Senior notes	9,760		8,774
Mortgage debt(2)	239		237
Floating-rate notes:
Surplus notes subject to set-off arrangements(1)	2,200		2,200
Senior notes	29		29
Mortgage debt(3)	371		430
Junior subordinated notes(4)	7,568		7,568
Subtotal	27,404		26,473
Less: assets under set-off arrangements(1)	9,095		9,095
Total long-term debt(5)	$	18,309	$	17,378

 __________    

(1) The surplus notes have corresponding assets where rights to set-off exist, thereby reducing the amount of surplus notes included in long-term debt.

(2) Includes $103 million and $101 million of debt denominated in foreign currency at March 31, 2019 and December 31, 2018, respectively.

(3) Includes $211 million and $206 million of debt denominated in foreign currency at March 31, 2019 and December 31, 2018, respectively.

(4) Includes Prudential Financial debt of $7,512 million and subsidiary debt of $56 million denominated in foreign currency at March 31, 2019.

(5)

Includes Prudential Financial debt of $17,128 million and $16,141 million at March 31, 2019 and December 31, 2018, respectively.

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Employee Benefit Plans (Tables)

3 Months Ended

Mar. 31, 2019

Retirement Benefits [Abstract]

Schedule of Net Benefit Costs

Net periodic (benefit) cost included in “General and administrative expenses” includes the following components:

	Three Months Ended March 31,
	Pension Benefits						Other Postretirement Benefits
	2019			2018			2019			2018
	(in millions)
Components of net periodic (benefit) cost:
Service cost	$	73		$	79		$	6		$	6
Interest cost	123			112			19			18
Expected return on plan assets	(204		)	(204		)	(24		)	(27		)
Amortization of prior service cost	(1		)	(1		)	1			0
Amortization of actuarial (gain) loss, net	54			53			6			4
Settlements	0			0			0			0
Special termination benefits	0			0			0			0
Net periodic (benefit) cost	$	45		$	39		$	8		$	1

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Equity (Tables)

3 Months Ended

Mar. 31, 2019

Stockholders' Equity Note [Abstract]

Common Stock Disclosure

The changes in the number of shares of Common Stock issued, held in treasury and outstanding, are as follows for the periods indicated:

	Common Stock
	Issued	Held In Treasury		Outstanding
	(in millions)
Balance, December 31, 2018	660.1	249.4		410.7
Common Stock issued	0.0	0.0		0.0
Common Stock acquired	0.0	5.4		(5.4	)
Stock-based compensation programs(1)	0.0	(2.0	)	2.0
Balance, March 31, 2019	660.1	252.8		407.3

__________ 

(1)

Represents net shares issued from treasury pursuant to the Company’s stock-based compensation programs.

Dividends Declared

Dividends declared per share of Common Stock are as follows for the periods indicated:

	Three Months Ended March 31,
	2019		2018
Dividends declared per share of Common Stock	$	1.00	$	0.90

Components of Accumulated Other Comprehensive Income (Loss)

The balance of and changes in each component of AOCI as of and for the three months ended March 31, 2019 and 2018, are as follows:

	Accumulated Other Comprehensive Income (Loss) Attributable to Prudential Financial, Inc.
	Foreign Currency Translation Adjustment			Net Unrealized Investment Gains (Losses)(1)			Pension and Postretirement Unrecognized Net Periodic Benefit (Cost)			Total Accumulated Other Comprehensive Income (Loss)
	(in millions)
Balance, December 31, 2018	$	(564	)	$	14,745		$	(3,275	)	$	10,906
Change in OCI before reclassifications	(109		)	8,564			4			8,459
Amounts reclassified from AOCI	5			(275		)	60			(210		)
Income tax benefit (expense)	(3		)	(1,926		)	(15		)	(1,944		)
Cumulative effect of adoption of ASU 2017-12	0			7			0			7
Balance, March 31, 2019	$	(671	)	$	21,115		$	(3,226	)	$	17,218

	Accumulated Other Comprehensive Income (Loss) Attributable to Prudential Financial, Inc.
	Foreign Currency Translation Adjustment			Net Unrealized Investment Gains (Losses)(1)			Pension and Postretirement Unrecognized Net Periodic Benefit (Cost)			Total Accumulated Other Comprehensive Income (Loss)
	(in millions)
Balance, December 31, 2017	$	(269	)	$	19,968		$	(2,625	)	$	17,074
Change in OCI before reclassifications	649			(4,640		)	(2		)	(3,993		)
Amounts reclassified from AOCI	0			(26		)	56			30
Income tax benefit (expense)	8			845			(9		)	844
Cumulative effect of adoption of ASU 2016-01	0			(847		)	0			(847		)
Cumulative effect of adoption of ASU 2018-02	(231		)	2,282			(398		)	1,653
Balance, March 31, 2018	$	157		$	17,582		$	(2,978	)	$	14,761

__________

(1)

Includes cash flow hedges of $776 million and $811 million as of March 31, 2019 and December 31, 2018, respectively, and $(622) million and $(39) million as of March 31, 2018 and December 31, 2017, respectively.

Reclassification Out Of Accumulated Other Comprehensive Income (Loss)

Reclassifications out of Accumulated Other Comprehensive Income (Loss)

	Three Months Ended March 31,						Affected line item in Consolidated Statements of Operations
	2019			2018
	(in millions)
Amounts reclassified from AOCI(1)(2):
Foreign currency translation adjustment:
Foreign currency translation adjustments	$	(5	)	$	0		Realized investment gains (losses), net
Foreign currency translation adjustments	0			0			Other income (loss)
Total foreign currency translation adjustment	(5		)	0
Net unrealized investment gains (losses):
Cash flow hedges—Interest rate	(1		)	0			(3)
Cash flow hedges—Currency	1			(3		)	(3)
Cash flow hedges—Currency/Interest rate	15			(49		)	(3)
Net unrealized investment gains (losses) on available-for-sale securities	260			78
Total net unrealized investment gains (losses)	275			26			(4)
Amortization of defined benefit pension items:
Prior service cost	0			1			(5)
Actuarial gain (loss)	(60		)	(57		)	(5)
Total amortization of defined benefit pension items	(60		)	(56		)
Total reclassifications for the period	$	210		$	(30	)

__________

(1) All amounts are shown before tax.

(2) Positive amounts indicate gains/benefits reclassified out of AOCI. Negative amounts indicate losses/costs reclassified out of AOCI.

(3) See Note 5 for additional information on cash flow hedges.

(4) See table below for additional information on unrealized investment gains (losses), including the impact on deferred policy acquisition and other costs, future policy benefits and policyholders’ dividends.

(5)

See Note 11 for information on employee benefit plans.

OTTI Net Unrealized Investment Gain (Loss) AOCI Rollforward

The amounts for the periods indicated below, split between amounts related to fixed maturity securities on which an OTTI loss has been recognized, and all other net unrealized investment gains (losses), are as follows:

Net Unrealized Investment Gains (Losses) on Fixed Maturity Securities on which an OTTI loss has been recognized

	Net Unrealized Gains (Losses) on Investments			DAC, DSI, VOBA and Reinsurance Recoverables			Future Policy Benefits, Policyholders’ Account Balances and Reinsurance Payables		Policyholders’ Dividends			Deferred Income Tax (Liability) Benefit			Accumulated Other Comprehensive Income (Loss) Related to Net Unrealized Investment Gains (Losses)
	(in millions)
Balance, December 31, 2018	$	189		$	(1	)	$	4	$	(23	)	$	(61	)	$	108
Net investment gains (losses) on investments arising during the period	68											(16		)	52
Reclassification adjustment for (gains) losses included in net income	(5		)									1			(4		)
Reclassification adjustment for OTTI losses excluded from net income(1)	(1		)									0			(1		)
Impact of net unrealized investment (gains) losses on DAC, DSI, VOBA and reinsurance recoverables				0								0			0
Impact of net unrealized investment (gains) losses on future policy benefits and policyholders’ account balances and reinsurance payables							0					0			0
Impact of net unrealized investment (gains) losses on policyholders’ dividends									(9		)	2			(7		)
Balance, March 31, 2019	$	251		$	(1	)	$	4	$	(32	)	$	(74	)	$	148

__________

(1)

Represents “transfers in” related to the portion of OTTI losses recognized during the period that were not recognized in earnings for securities with no prior OTTI loss.

All Other Net Unrealized Investment Gain (Loss) AOCI Rollforward

All Other Net Unrealized Investment Gains (Losses) in AOCI

	Net Unrealized Gains (Losses) on Investments(1)			DAC, DSI, VOBA and Reinsurance Recoverables			Future Policy Benefits, Policyholders’ Account Balances and Reinsurance Payables			Policyholders’ Dividends			Deferred Income Tax (Liability) Benefit			Accumulated Other Comprehensive Income (Loss) Related to Net Unrealized Investment Gains (Losses)
	(in millions)
Balance, December 31, 2018	$	22,531		$	(738	)	$	(791	)	$	(894	)	$	(5,471	)	$	14,637
Net investment gains (losses) on investments arising during the period	10,532												(2,401		)	8,131
Reclassification adjustment for (gains) losses included in net income	(270		)										62			(208		)
Reclassification adjustment for OTTI losses excluded from net income(2)	1												0			1
Impact of net unrealized investment (gains) losses on DAC, DSI, VOBA and reinsurance recoverables				(459		)							103			(356		)
Impact of net unrealized investment (gains) losses on future policy benefits and policyholders’ account balances and reinsurance payables							(492		)				98			(394		)
Impact of net unrealized investment (gains) losses on policyholders’ dividends										(1,078		)	227			(851		)
Cumulative effect of adoption of ASU 2017-12	9												(2		)	7
Balance, March 31, 2019	$	32,803		$	(1,197	)	$	(1,283	)	$	(1,972	)	$	(7,384	)	$	20,967

__________

(1) Includes cash flow hedges. See Note 5 for information on cash flow hedges.

(2)

Represents “transfers out” related to the portion of OTTI losses recognized during the period that were not recognized in earnings for securities with no prior OTTI loss.

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Earnings Per Share (Tables)

3 Months Ended

Mar. 31, 2019

Earnings Per Share [Abstract]

Reconciliation of Earnings Per Share

A reconciliation of the numerators and denominators of the basic and diluted per share computations of Common Stock based on the consolidated earnings of Prudential Financial for the periods indicated, is as follows:

	Three Months Ended March 31,
	2019					2018
	Income		Weighted Average Shares	Per Share Amount		Income		Weighted Average Shares	Per Share Amount
	(in millions, except per share amounts)
Basic earnings per share
Net income (loss)	$	937				$	1,364
Less: Income (loss) attributable to noncontrolling interests	5					1
Less: Dividends and undistributed earnings allocated to participating unvested share-based payment awards	10					16
Net income (loss) attributable to Prudential Financial available to holders of Common Stock	$	922	409.2	$	2.25	$	1,347	422.0	$	3.19
Effect of dilutive securities and compensation programs
Add: Dividends and undistributed earnings allocated to participating unvested share-based payment awards—Basic	$	10				$	16
Less: Dividends and undistributed earnings allocated to participating unvested share-based payment awards—Diluted	10					16
Stock options			1.2					1.9
Deferred and long-term compensation programs			1.1					1.1
Exchangeable Surplus Notes	5		6.1			5		5.9
Diluted earnings per share
Net income (loss) attributable to Prudential Financial available to holders of Common Stock	$	927	417.6	$	2.22	$	1,352	430.9	$	3.14

Earnings Per Share Computation

For the periods indicated, the number of stock options and shares related to deferred and long-term compensation programs that were considered antidilutive and were excluded from the computation of diluted earnings per share, weighted for the portion of the period they were outstanding, are as follows:

	Three Months Ended March 31,
	2019			2018
	Shares	Exercise Price Per Share		Shares	Exercise Price Per Share
	(in millions, except per share amounts, based on weighted average)
Antidilutive stock options based on application of the treasury stock method	1.1	$	103.47	0.3	$	107.65
Antidilutive stock options due to net loss available to holders of Common Stock	0.0			0.0
Antidilutive shares based on application of the treasury stock method	0.0			0.0
Antidilutive shares due to net loss available to holders of Common Stock	0.0			0.0
Total antidilutive stock options and shares	1.1			0.3

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Segment Information (Tables)

3 Months Ended

Mar. 31, 2019

Segment Reporting [Abstract]

Reconciliation of Operating Profit (Loss) from Segments to Consolidated

The table below reconciles “Adjusted operating income before income taxes” to “Income before income taxes and equity in earnings of operating joint ventures”:

	Three Months Ended March 31,
	2019			2018
	(in millions)
Adjusted operating income before income taxes by segment:
PGIM	$	214		$	232
Total PGIM division	214			232
Retirement	251			317
Group Insurance	53			55
Total U.S. Workplace Solutions division	304			372
Individual Annuities(1)	472			519
Individual Life	105			36
Total U.S. Individual Solutions division	577			555
International Insurance	922			856
Total International Insurance division	922			856
Corporate and Other operations	(412		)	(294		)
Total Corporate and Other	(412		)	(294		)
Total segment adjusted operating income before income taxes	1,605			1,721
Reconciling items:
Realized investment gains (losses), net, and related adjustments	(663		)	87
Charges related to realized investment gains (losses), net	25			(23		)
Investment gains (losses) on assets supporting experience-rated contractholder liabilities, net	454			(403		)
Change in experience-rated contractholder liabilities due to asset value changes	(403		)	418
Divested and Run-off businesses:
Closed Block division	(19		)	(9		)
Other Divested and Run-off businesses	174			(72		)
Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests	(33		)	(26		)
Consolidated income (loss) before income taxes and equity in earnings of operating joint ventures	$	1,140		$	1,693

__________

(1) Individual Annuities segment results reflect DAC as if the individual annuity business is a stand-alone operation. The elimination of intersegment costs capitalized in accordance with this policy is included in consolidating adjustments within Corporate and Other operations.

Reconciliation of Certain Financial Information from Segments to Consolidated

The table below presents total revenues and assets for the Company’s reportable segments and its Corporate and Other operations for the periods and as of the dates indicated:

	Revenues						Total Assets
	Three Months Ended March 31,						March 31, 2019		December 31, 2018
	2019			2018
	(in millions)
PGIM	$	870		$	826		$	47,987	$	47,690
Total PGIM division	870			826			47,987		47,690
Retirement	2,639			2,089			183,175		175,525
Group Insurance	1,441			1,416			42,642		41,727
Total U.S. Workplace Solutions division	4,080			3,505			225,817		217,252
Individual Annuities	1,235			1,252			178,103		167,899
Individual Life	1,482			1,425			88,468		83,739
Total U.S. Individual Solutions division	2,717			2,677			266,571		251,638
International Insurance	6,152			6,040			230,090		222,633
Total International Insurance division	6,152			6,040			230,090		222,633
Corporate and Other operations	(171		)	(173		)	18,647		16,826
Total Corporate and Other	(171		)	(173		)	18,647		16,826
Total	13,648			12,875			789,112		756,039
Reconciling items:
Realized investment gains (losses), net, and related adjustments	(663		)	87
Charges related to realized investment gains (losses), net	(72		)	(71		)
Investment gains (losses) on assets supporting experience-rated contractholder liabilities, net	454			(403		)
Divested and Run-off businesses:
Closed Block division	1,374			1,163			60,212		59,039
Other Divested and Run-off businesses	388			132
Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests	(38		)	(26		)
Total per Unaudited Interim Consolidated Financial Statements	$	15,091		$	13,757		$	849,324	$	815,078

Schedule of Intersegment Revenues

The PGIM segment revenues include intersegment revenues, primarily consisting of asset-based management and administration fees, as follows: 

	Three Months Ended March 31,
	2019		2018
	(in millions)
PGIM segment intersegment revenues	$	180	$	184

Schedule of Asset Management and Service Fees

The table below presents asset management and service fees, predominantly related to investment management activities, for the periods indicated: 

	Three Months Ended March 31,
	2019		2018
	(in millions)
Asset-based management fees	$	843	$	862
Performance-based incentive fees	35		5
Other fees	138		159
Total asset management and service fees	$	1,016	$	1,026

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Commitments and Contingent Liabilities (Tables)

3 Months Ended

Mar. 31, 2019

Commitments and Contingent Liabilities [Line Items]

Mortgage Loans

The following table sets forth the composition of “Commercial mortgage and other loans,” as of the dates indicated:

	March 31, 2019					December 31, 2018
	Amount (in millions)			% of Total		Amount (in millions)			% of Total
Commercial mortgage and agricultural property loans by property type:
Office	$	13,097		21.7	%	$	13,280		22.4	%
Retail	8,502			14.1		8,639			14.6
Apartments/Multi-Family	16,789			27.9		16,538			28.0
Industrial	12,255			20.4		11,574			19.6
Hospitality	2,187			3.6		1,931			3.3
Other	3,948			6.6		3,846			6.5
Total commercial mortgage loans	56,778			94.3		55,808			94.4
Agricultural property loans	3,402			5.7		3,316			5.6
Total commercial mortgage and agricultural property loans by property type	60,180			100.0	%	59,124			100.0	%
Allowance for credit losses	(115		)			(123		)
Total net commercial mortgage and agricultural property loans by property type	60,065					59,001
Other loans:
Uncollateralized loans	651					660
Residential property loans	147					157
Other collateralized loans	17					17
Total other loans	815					834
Allowance for credit losses	(5		)			(5		)
Total net other loans	810					829
Total commercial mortgage and other loans(1)	$	60,875				$	59,830

__________ 

(1) Includes loans held for sale which are carried at fair value and are collateralized primarily by apartment complexes. As of March 31, 2019 and December 31, 2018, the net carrying value of these loans was $463 million and $763 million, respectively.

Commitments | Commercial Mortgage Loans

Commitments and Contingent Liabilities [Line Items]

Mortgage Loans

Commercial Mortgage Loan Commitments 

	March 31, 2019		December 31, 2018
	(in millions)
Total outstanding mortgage loan commitments	$	1,878	$	3,299
Portion of commitment where prearrangement to sell to investor exists	$	822	$	1,490

Commitments | Investments

Commitments and Contingent Liabilities [Line Items]

Commitments to Purchase Investments (excluding Commercial Mortgage Loans)

Commitments to Purchase Investments (excluding Commercial Mortgage Loans)

	March 31, 2019		December 31, 2018
	(in millions)
Expected to be funded from the general account and other operations outside the separate accounts	$	6,456	$	6,941
Expected to be funded from separate accounts	$	59	$	147

Indemnifications

Commitments and Contingent Liabilities [Line Items]

Indemnification of Securities Lending Transactions

Indemnification of Securities Lending and Securities Repurchase Transactions

	March 31, 2019		December 31, 2018
	(in millions)
Indemnification provided to certain clients for securities lending and securities repurchase transactions(1)	$	6,001	$	5,399
Fair value of related collateral associated with above indemnifications(1)	$	6,133	$	5,503
Accrued liability associated with guarantee	$	0	$	0

__________ 

(1)

As of March 31, 2019, indemnification provided to certain clients and fair value of related collateral associated with such indemnification include $89 million and $87 million, respectively, related to securities repurchase transactions.

Indemnifications | Serviced Mortgage Loans

Commitments and Contingent Liabilities [Line Items]

Mortgage Loans

Indemnification of Serviced Mortgage Loans

	March 31, 2019		December 31, 2018
	(in millions)
Maximum exposure under indemnification agreements for mortgage loans serviced by the Company	$	1,874	$	1,828
First-loss exposure portion of above	$	554	$	543
Accrued liability associated with guarantees	$	18	$	17

Guarantees of Asset Values

Commitments and Contingent Liabilities [Line Items]

Guarantees

Guarantees of Asset Values

	March 31, 2019		December 31, 2018
	(in millions)
Guaranteed value of third-parties’ assets	$	80,168	$	79,215
Fair value of collateral supporting these assets	$	79,771	$	77,897
Asset (liability) associated with guarantee, carried at fair value	$	1	$	2

Other Guarantees

Commitments and Contingent Liabilities [Line Items]

Guarantees

Other Guarantees

	March 31, 2019		December 31, 2018
	(in millions)
Other guarantees where amount can be determined	$	68	$	77
Accrued liability for other guarantees and indemnifications	$	0	$	0

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Business and Basis of Presentation (Narrative) (Details)	3 Months Ended
	Mar. 31, 2019 segment division
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of divisions | division	5
Number of reportable segments | segment	7

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Significant Accounting Policies and Pronouncements (Narrative) (Details) $ in Millions	Mar. 31, 2019 USD ($)
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating Lease, Right-of-Use Asset	$ 527
Operating Lease, Liability	551
ASU 2016-02
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating Lease, Right-of-Use Asset	600
Operating Lease, Liability	$ 600

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Investments (Fixed Maturities Securities Excluding Investments Classified as Trading) (Details) - USD ($) $ in Millions		Mar. 31, 2019	Dec. 31, 2018
Summary Of Investments Other Than Investments In Related Parties Reportable Data [Line Items]
Amortized Cost	[1]	$ 1,982	$ 2,013
Fair Value	[1]	365,928	353,656
Amortized Cost		333,648	331,745
Fair Value		2,365	2,372
Fixed maturities
Summary Of Investments Other Than Investments In Related Parties Reportable Data [Line Items]
Amortized Cost		1,982	2,013
Gross Unrealized Gains		35,029	28,302
Gross Unrealized Losses		2,749	6,391
Fair Value		365,928	353,656
Amortized Cost		333,648	331,745
Gross Unrealized Gains		383	359
Gross Unrealized Losses		0	0
Fair Value		2,365	2,372
Fixed maturities | U.S. Treasury securities and obligations of U.S. government authorities and agencies
Summary Of Investments Other Than Investments In Related Parties Reportable Data [Line Items]
Gross Unrealized Gains		3,664	2,994
Gross Unrealized Losses		329	642
Fair Value		32,811	30,594
Amortized Cost		29,476	28,242
Fixed maturities | Obligations of U.S. states and their political subdivisions
Summary Of Investments Other Than Investments In Related Parties Reportable Data [Line Items]
Gross Unrealized Gains		990	676
Gross Unrealized Losses		6	63
Fair Value		10,848	10,493
Amortized Cost		9,864	9,880
Fixed maturities | Foreign government bonds
Summary Of Investments Other Than Investments In Related Parties Reportable Data [Line Items]
Amortized Cost		876	885
Gross Unrealized Gains		19,399	16,714
Gross Unrealized Losses		113	314
Fair Value		115,416	113,110
Amortized Cost		96,130	96,710
Gross Unrealized Gains		285	269
Gross Unrealized Losses		0	0
Fair Value		1,161	1,154
Fixed maturities | U.S. public corporate securities
Summary Of Investments Other Than Investments In Related Parties Reportable Data [Line Items]
Gross Unrealized Gains		5,722	3,912
Gross Unrealized Losses		902	2,754
Fair Value		87,349	83,415
Amortized Cost		82,529	82,257
Fixed maturities | U.S. private corporate securities
Summary Of Investments Other Than Investments In Related Parties Reportable Data [Line Items]
Gross Unrealized Gains		1,531	1,151
Gross Unrealized Losses		291	581
Fair Value		33,864	33,020
Amortized Cost		32,624	32,450
Fixed maturities | Foreign public corporate securities
Summary Of Investments Other Than Investments In Related Parties Reportable Data [Line Items]
Amortized Cost		663	668
Gross Unrealized Gains		2,459	2,061
Gross Unrealized Losses		179	531
Fair Value		29,763	29,201
Amortized Cost		27,483	27,671
Gross Unrealized Gains		70	64
Gross Unrealized Losses		0	0
Fair Value		733	732
Fixed maturities | Foreign private corporate securities
Summary Of Investments Other Than Investments In Related Parties Reportable Data [Line Items]
Amortized Cost		94	95
Gross Unrealized Gains		694	434
Gross Unrealized Losses		808	1,217
Fair Value		26,129	24,531
Amortized Cost		26,243	25,314
Gross Unrealized Gains		3	3
Gross Unrealized Losses		0	0
Fair Value		97	98
Fixed maturities | Asset-backed securities
Summary Of Investments Other Than Investments In Related Parties Reportable Data [Line Items]
Gross Unrealized Gains		176	162
Gross Unrealized Losses		53	77
Fair Value		12,689	12,973
Amortized Cost		12,566	12,888
Fixed maturities | Commercial mortgage-backed securities
Summary Of Investments Other Than Investments In Related Parties Reportable Data [Line Items]
Gross Unrealized Gains		279	99
Gross Unrealized Losses		54	180
Fair Value		14,059	13,315
Amortized Cost		13,834	13,396
Fixed maturities | Residential mortgage-backed securities
Summary Of Investments Other Than Investments In Related Parties Reportable Data [Line Items]
Amortized Cost		349	365
Gross Unrealized Gains		115	99
Gross Unrealized Losses		14	32
Fair Value		3,000	3,004
Amortized Cost		2,899	2,937
Gross Unrealized Gains		25	23
Gross Unrealized Losses		0	0
Fair Value		374	388
Fixed maturities, available-for-sale, Fixed maturities, trading, Equity securities and Other invested assets [Member] | OTTI | Fixed maturities
Summary Of Investments Other Than Investments In Related Parties Reportable Data [Line Items]
OTTI in AOCI		(168)	(166)
Fixed maturities, available-for-sale, Fixed maturities, trading, Equity securities and Other invested assets [Member] | OTTI | Fixed maturities | U.S. Treasury securities and obligations of U.S. government authorities and agencies
Summary Of Investments Other Than Investments In Related Parties Reportable Data [Line Items]
OTTI in AOCI		0	0
Fixed maturities, available-for-sale, Fixed maturities, trading, Equity securities and Other invested assets [Member] | OTTI | Fixed maturities | Obligations of U.S. states and their political subdivisions
Summary Of Investments Other Than Investments In Related Parties Reportable Data [Line Items]
OTTI in AOCI		0	0
Fixed maturities, available-for-sale, Fixed maturities, trading, Equity securities and Other invested assets [Member] | OTTI | Fixed maturities | Foreign government bonds
Summary Of Investments Other Than Investments In Related Parties Reportable Data [Line Items]
OTTI in AOCI		0	0
Fixed maturities, available-for-sale, Fixed maturities, trading, Equity securities and Other invested assets [Member] | OTTI | Fixed maturities | U.S. public corporate securities
Summary Of Investments Other Than Investments In Related Parties Reportable Data [Line Items]
OTTI in AOCI		(2)	(2)
Fixed maturities, available-for-sale, Fixed maturities, trading, Equity securities and Other invested assets [Member] | OTTI | Fixed maturities | U.S. private corporate securities
Summary Of Investments Other Than Investments In Related Parties Reportable Data [Line Items]
OTTI in AOCI		(10)	0
Fixed maturities, available-for-sale, Fixed maturities, trading, Equity securities and Other invested assets [Member] | OTTI | Fixed maturities | Foreign public corporate securities
Summary Of Investments Other Than Investments In Related Parties Reportable Data [Line Items]
OTTI in AOCI		(8)	(3)
Fixed maturities, available-for-sale, Fixed maturities, trading, Equity securities and Other invested assets [Member] | OTTI | Fixed maturities | Foreign private corporate securities
Summary Of Investments Other Than Investments In Related Parties Reportable Data [Line Items]
OTTI in AOCI		0	0
Fixed maturities, available-for-sale, Fixed maturities, trading, Equity securities and Other invested assets [Member] | OTTI | Fixed maturities | Asset-backed securities
Summary Of Investments Other Than Investments In Related Parties Reportable Data [Line Items]
OTTI in AOCI		(147)	(160)
Fixed maturities, available-for-sale, Fixed maturities, trading, Equity securities and Other invested assets [Member] | OTTI | Fixed maturities | Commercial mortgage-backed securities
Summary Of Investments Other Than Investments In Related Parties Reportable Data [Line Items]
OTTI in AOCI		0	0
Fixed maturities, available-for-sale, Fixed maturities, trading, Equity securities and Other invested assets [Member] | OTTI | Fixed maturities | Residential mortgage-backed securities
Summary Of Investments Other Than Investments In Related Parties Reportable Data [Line Items]
OTTI in AOCI		(1)	(1)
Fixed maturities, available-for-sale, Fixed maturities, trading, Equity securities and Other invested assets [Member] | Net Unrealized Investment Gains (Losses) | Fixed maturities
Summary Of Investments Other Than Investments In Related Parties Reportable Data [Line Items]
OTTI in AOCI		419	356
Held-to-maturity | Net Unrealized Investment Gains (Losses) | Fixed maturities
Summary Of Investments Other Than Investments In Related Parties Reportable Data [Line Items]
OTTI in AOCI		2	1
Prudential Netting Agreement | U.S. private corporate securities
Summary Of Investments Other Than Investments In Related Parties Reportable Data [Line Items]
Fair Value		4,216	4,216
Prudential Netting Agreement | Fixed maturities | U.S. private corporate securities
Summary Of Investments Other Than Investments In Related Parties Reportable Data [Line Items]
Fair Value		4,216	4,216
Amortized Cost		4,216	4,216
Prudential Netting Agreement | Fixed maturities | Foreign private corporate securities
Summary Of Investments Other Than Investments In Related Parties Reportable Data [Line Items]
Amortized Cost		4,879	4,879
Fair Value		$ 4,930	$ 4,879

[1] See Note 4 for details of balances associated with variable interest entities.

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Investments (Fair Value and Losses by Investment Category and Length of Time in a Loss Position) (Details) - Fixed maturities - USD ($) $ in Millions	Mar. 31, 2019	Dec. 31, 2018
Debt Securities [Line Items]
Less Than Twelve Months, Fair Value	$ 19,870	$ 79,899
Less Than Twelve Months, Gross Unrealized Losses	475	3,108
Twelve Months or More, Fair Value	49,770	46,570
Twelve Months or More, Gross Unrealized Losses	2,274	3,283
Total, Fair Value	69,640	126,469
Total, Gross Unrealized Losses	2,749	6,391
Fair Value not reflected in AOCI, held-to-maturity securities	13	13
Gross Unrealized Losses not reflected in AOCI, held-to-maturity securities	1	1
U.S. Treasury securities and obligations of U.S. government authorities and agencies
Debt Securities [Line Items]
Less Than Twelve Months, Fair Value	1,304	3,007
Less Than Twelve Months, Gross Unrealized Losses	2	67
Twelve Months or More, Fair Value	6,431	6,986
Twelve Months or More, Gross Unrealized Losses	327	575
Total, Fair Value	7,735	9,993
Total, Gross Unrealized Losses	329	642
Obligations of U.S. states and their political subdivisions
Debt Securities [Line Items]
Less Than Twelve Months, Fair Value	0	1,725
Less Than Twelve Months, Gross Unrealized Losses	0	25
Twelve Months or More, Fair Value	345	999
Twelve Months or More, Gross Unrealized Losses	6	38
Total, Fair Value	345	2,724
Total, Gross Unrealized Losses	6	63
Foreign government bonds
Debt Securities [Line Items]
Less Than Twelve Months, Fair Value	751	2,369
Less Than Twelve Months, Gross Unrealized Losses	59	136
Twelve Months or More, Fair Value	1,512	3,515
Twelve Months or More, Gross Unrealized Losses	54	178
Total, Fair Value	2,263	5,884
Total, Gross Unrealized Losses	113	314
U.S. public corporate securities
Debt Securities [Line Items]
Less Than Twelve Months, Fair Value	4,111	34,064
Less Than Twelve Months, Gross Unrealized Losses	104	1,570
Twelve Months or More, Fair Value	17,720	13,245
Twelve Months or More, Gross Unrealized Losses	798	1,184
Total, Fair Value	21,831	47,309
Total, Gross Unrealized Losses	902	2,754
U.S. private corporate securities
Debt Securities [Line Items]
Less Than Twelve Months, Fair Value	1,747	8,923
Less Than Twelve Months, Gross Unrealized Losses	74	225
Twelve Months or More, Fair Value	7,379	7,985
Twelve Months or More, Gross Unrealized Losses	217	356
Total, Fair Value	9,126	16,908
Total, Gross Unrealized Losses	291	581
Foreign public corporate securities
Debt Securities [Line Items]
Less Than Twelve Months, Fair Value	1,228	7,363
Less Than Twelve Months, Gross Unrealized Losses	37	308
Twelve Months or More, Fair Value	3,145	2,928
Twelve Months or More, Gross Unrealized Losses	142	223
Total, Fair Value	4,373	10,291
Total, Gross Unrealized Losses	179	531
Foreign private corporate securities
Debt Securities [Line Items]
Less Than Twelve Months, Fair Value	4,411	12,218
Less Than Twelve Months, Gross Unrealized Losses	158	692
Twelve Months or More, Fair Value	7,551	4,468
Twelve Months or More, Gross Unrealized Losses	650	525
Total, Fair Value	11,962	16,686
Total, Gross Unrealized Losses	808	1,217
Asset-backed securities
Debt Securities [Line Items]
Less Than Twelve Months, Fair Value	6,223	8,255
Less Than Twelve Months, Gross Unrealized Losses	41	70
Twelve Months or More, Fair Value	1,511	669
Twelve Months or More, Gross Unrealized Losses	12	7
Total, Fair Value	7,734	8,924
Total, Gross Unrealized Losses	53	77
Commercial mortgage-backed securities
Debt Securities [Line Items]
Less Than Twelve Months, Fair Value	72	1,781
Less Than Twelve Months, Gross Unrealized Losses	0	14
Twelve Months or More, Fair Value	3,293	4,733
Twelve Months or More, Gross Unrealized Losses	54	166
Total, Fair Value	3,365	6,514
Total, Gross Unrealized Losses	54	180
Residential mortgage-backed securities
Debt Securities [Line Items]
Less Than Twelve Months, Fair Value	23	194
Less Than Twelve Months, Gross Unrealized Losses	0	1
Twelve Months or More, Fair Value	883	1,042
Twelve Months or More, Gross Unrealized Losses	14	31
Total, Fair Value	906	1,236
Total, Gross Unrealized Losses	$ 14	$ 32

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Investments (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018
Fixed maturities
Investment [Line Items]
Gross Unrealized Losses	$ 2,749		$ 6,391
Gross unrealized losses of twelve months or more concentrated in various sectors	2,274		3,283
Fixed maturities | NAIC High or Highest Quality Rating
Investment [Line Items]
Gross Unrealized Losses	2,249		5,391
Fixed maturities | NAIC Other Than High or Highest Quality Rating
Investment [Line Items]
Gross Unrealized Losses	500		1,000
Corporate securities
Investment [Line Items]
Gross unrealized losses of twelve months or more concentrated in various sectors	2,274		$ 3,283
Other income | Equity securities
Investment [Line Items]
Unrealized gains (losses) for assets still held:	529	$ (188)
Other income | Assets supporting experience-rated contractholder liabilities
Investment [Line Items]
Unrealized gains (losses) for assets still held:	$ 469	$ (398)
California
Investment [Line Items]
Commercial mortgage loan, concentration percentage	27.00%
Texas
Investment [Line Items]
Commercial mortgage loan, concentration percentage	9.00%
New York
Investment [Line Items]
Commercial mortgage loan, concentration percentage	8.00%
Europe
Investment [Line Items]
Commercial mortgage loan, concentration percentage	6.00%
Australia
Investment [Line Items]
Commercial mortgage loan, concentration percentage	1.00%
Asia
Investment [Line Items]
Commercial mortgage loan, concentration percentage	1.00%

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Investments (Amortized Cost and Fair Value of Fixed Maturities by Contractual Maturities) (Details) - USD ($) $ in Millions		Mar. 31, 2019	Dec. 31, 2018
Available-for-Sale, Amortized Cost
Due in one year or less		$ 17,488
Due after one year through five years		49,857
Due after five years through ten years		64,580
Due after ten years		172,424
Amortized Cost		333,648	$ 331,745
Available-for-Sale, Fair Value
Due in one year or less		17,954
Due after one year through five years		52,880
Due after five years through ten years		69,373
Due after ten years		195,973
Fair Value	[1]	365,928	353,656
Held-to-Maturity, Amortized Cost
Due in one year or less		66
Due after one year through five years		112
Due after five years through ten years		582
Due after ten years		873
Amortized Cost	[1]	1,982	2,013
Held-to-Maturity, Fair Value
Due in one year or less		67
Due after one year through five years		115
Due after five years through ten years		651
Due after ten years		1,158
Fair Value		2,365	2,372
Asset-backed securities
Available-for-Sale, Amortized Cost
Debt Maturities, without single maturity date		12,566
Available-for-Sale, Fair Value
Debt Maturities, without Single Maturity Date		12,689
Held-to-Maturity, Amortized Cost
Debt Maturities, without Single Maturity Date		0
Held-to-Maturity, Fair Value
Debt Maturities, without Single Maturity Date		0
Commercial mortgage-backed securities
Available-for-Sale, Amortized Cost
Debt Maturities, without single maturity date		13,834
Available-for-Sale, Fair Value
Debt Maturities, without Single Maturity Date		14,059
Held-to-Maturity, Amortized Cost
Debt Maturities, without Single Maturity Date		0
Held-to-Maturity, Fair Value
Debt Maturities, without Single Maturity Date		0
Residential mortgage-backed securities
Available-for-Sale, Amortized Cost
Debt Maturities, without single maturity date		2,899
Available-for-Sale, Fair Value
Debt Maturities, without Single Maturity Date		3,000
Held-to-Maturity, Amortized Cost
Debt Maturities, without Single Maturity Date		349
Held-to-Maturity, Fair Value
Debt Maturities, without Single Maturity Date		374
Prudential Netting Agreement | U.S. private corporate securities
Available-for-Sale, Fair Value
Fair Value		4,216	4,216
Fixed maturities
Available-for-Sale, Amortized Cost
Amortized Cost		333,648	331,745
Available-for-Sale, Fair Value
Fair Value		365,928	353,656
Held-to-Maturity, Amortized Cost
Amortized Cost		1,982	2,013
Held-to-Maturity, Fair Value
Fair Value		2,365	2,372
Fixed maturities | U.S. private corporate securities
Available-for-Sale, Amortized Cost
Amortized Cost		32,624	32,450
Available-for-Sale, Fair Value
Fair Value		33,864	33,020
Fixed maturities | Foreign private corporate securities
Available-for-Sale, Amortized Cost
Amortized Cost		26,243	25,314
Available-for-Sale, Fair Value
Fair Value		26,129	24,531
Held-to-Maturity, Amortized Cost
Amortized Cost		94	95
Held-to-Maturity, Fair Value
Fair Value		97	98
Fixed maturities | Asset-backed securities
Available-for-Sale, Amortized Cost
Amortized Cost		12,566	12,888
Available-for-Sale, Fair Value
Fair Value		12,689	12,973
Fixed maturities | Commercial mortgage-backed securities
Available-for-Sale, Amortized Cost
Amortized Cost		13,834	13,396
Available-for-Sale, Fair Value
Fair Value		14,059	13,315
Fixed maturities | Residential mortgage-backed securities
Available-for-Sale, Amortized Cost
Amortized Cost		2,899	2,937
Available-for-Sale, Fair Value
Fair Value		3,000	3,004
Held-to-Maturity, Amortized Cost
Amortized Cost		349	365
Held-to-Maturity, Fair Value
Fair Value		374	388
Fixed maturities | Prudential Netting Agreement | U.S. private corporate securities
Available-for-Sale, Amortized Cost
Amortized Cost		4,216	4,216
Available-for-Sale, Fair Value
Fair Value		4,216	4,216
Fixed maturities | Prudential Netting Agreement | Foreign private corporate securities
Held-to-Maturity, Amortized Cost
Amortized Cost		4,879	4,879
Held-to-Maturity, Fair Value
Fair Value		$ 4,930	$ 4,879

[1] See Note 4 for details of balances associated with variable interest entities.

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Investments (Fixed Maturity Proceeds) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Debt Securities, Available-for-sale [Line Items]
Proceeds from maturities/prepayments - AFS	$ 14,063	$ 14,665
Proceeds from maturities/prepayments - HTM	14	36
Fixed maturities | Available-for-sale
Debt Securities, Available-for-sale [Line Items]
Proceeds from sales	10,162	9,585
Proceeds from maturities/prepayments - AFS	4,488	5,226
Gross investment gains from sales and maturities	483	374
Gross investment losses from sales and maturities	(188)	(257)
OTTI recognized in earnings	(35)	(39)
Fixed maturities | Held-to-maturity
Debt Securities, Available-for-sale [Line Items]
Proceeds from maturities/prepayments - HTM	14	36
Fixed maturities | Available-for-sale
Debt Securities, Available-for-sale [Line Items]
Noncash or Part Noncash Divestiture, Amount of Consideration Received	587	$ 146
Fixed maturities | Held-to-maturity
Debt Securities, Available-for-sale [Line Items]
Noncash or Part Noncash Divestiture, Amount of Consideration Received	$ 0

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Investments (Credit Losses Recognized In Earnings on Fixed Maturity Securities Held by the Company) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Roll Forward]
Balance, beginning of period	$ 140	$ 319
New credit loss impairments	16	0
Additional credit loss impairments on securities previously impaired	0	0
Increases due to the passage of time on previously recorded credit losses	1	2
Reductions for securities which matured, paid down, prepaid or were sold during the period	(7)	(113)
Reductions for securities impaired to fair value during the period	0	(4)
Accretion of credit loss impairments previously recognized due to an increase in cash flows expected to be collected	(1)	(1)
Balance, ending of period	$ 149	$ 203

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Investments (Assets Supporting Experience-Rated Contractholder Liabilities) (Details) - USD ($) $ in Millions		Mar. 31, 2019	Dec. 31, 2018
Assets Supporting Experience-Rated Contractholder Liabilities [Line Items]
Assets supporting experience-rated contractholder liabilities, at amortized cost or cost		$ 21,244	$ 21,299
Assets supporting experience-rated contractholder liabilities, at fair value	[1]	21,668	21,254
Fixed maturities
Assets Supporting Experience-Rated Contractholder Liabilities [Line Items]
Assets supporting experience-rated contractholder liabilities, at amortized cost or cost		19,490	19,706
Assets supporting experience-rated contractholder liabilities, at fair value		19,714	19,579
Equity securities
Assets Supporting Experience-Rated Contractholder Liabilities [Line Items]
Assets supporting experience-rated contractholder liabilities, at amortized cost or cost		1,386	1,378
Assets supporting experience-rated contractholder liabilities, at fair value		1,586	1,460
Short-term investments and cash equivalents
Assets Supporting Experience-Rated Contractholder Liabilities [Line Items]
Assets supporting experience-rated contractholder liabilities, at amortized cost or cost		368	215
Assets supporting experience-rated contractholder liabilities, at fair value		368	215
Corporate securities | Fixed maturities
Assets Supporting Experience-Rated Contractholder Liabilities [Line Items]
Assets supporting experience-rated contractholder liabilities, at amortized cost or cost		13,443	13,258
Assets supporting experience-rated contractholder liabilities, at fair value		13,572	13,119
Commercial mortgage-backed securities | Fixed maturities
Assets Supporting Experience-Rated Contractholder Liabilities [Line Items]
Assets supporting experience-rated contractholder liabilities, at amortized cost or cost		2,282	2,346
Assets supporting experience-rated contractholder liabilities, at fair value		2,297	2,324
Residential mortgage-backed securities | Fixed maturities
Assets Supporting Experience-Rated Contractholder Liabilities [Line Items]
Assets supporting experience-rated contractholder liabilities, at amortized cost or cost		860	828
Assets supporting experience-rated contractholder liabilities, at fair value		855	811
Asset-backed securities | Fixed maturities
Assets Supporting Experience-Rated Contractholder Liabilities [Line Items]
Assets supporting experience-rated contractholder liabilities, at amortized cost or cost		1,629	1,649
Assets supporting experience-rated contractholder liabilities, at fair value		1,651	1,665
Foreign government bonds | Fixed maturities
Assets Supporting Experience-Rated Contractholder Liabilities [Line Items]
Assets supporting experience-rated contractholder liabilities, at amortized cost or cost		862	1,087
Assets supporting experience-rated contractholder liabilities, at fair value		878	1,083
U.S. government authorities and agencies and obligations of U.S. states | Fixed maturities
Assets Supporting Experience-Rated Contractholder Liabilities [Line Items]
Assets supporting experience-rated contractholder liabilities, at amortized cost or cost		414	538
Assets supporting experience-rated contractholder liabilities, at fair value		$ 461	$ 577
Public Securities
Assets Supporting Experience-Rated Contractholder Liabilities [Line Items]
Assets supporting experience-rated contractholder liabilities, at amortized cost percentage		77.00%	78.00%
Collateralized loan obligations
Assets Supporting Experience-Rated Contractholder Liabilities [Line Items]
Assets supporting experience-rated contractholder liabilities, at fair value		$ 1,031	$ 1,028
NAIC High or Highest Quality Rating | Fixed maturities
Assets Supporting Experience-Rated Contractholder Liabilities [Line Items]
Assets supporting experience-rated contractholder liabilities, at amortized cost percentage		93.00%

[1] See Note 4 for details of balances associated with variable interest entities.

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Investments (Concentrations of Credit Risk) (Details) - USD ($) $ in Millions	Mar. 31, 2019	Dec. 31, 2018
Investments in Japanese government and government agency securities:
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items]
Concentrations of credit risk at amortized cost	$ 72,654	$ 73,529
Concentrations of credit risk at fair value	87,715	86,307
Investments in South Korean government and government agency securities:
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items]
Concentrations of credit risk at amortized cost	10,340	10,354
Concentrations of credit risk at fair value	12,723	12,601
Assets supporting experience-rated contractholder liabilities | Investments in Japanese government and government agency securities:
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items]
Concentrations of credit risk at amortized cost	670	691
Concentrations of credit risk at fair value	686	697
Assets supporting experience-rated contractholder liabilities | Investments in South Korean government and government agency securities:
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items]
Concentrations of credit risk at amortized cost	15	15
Concentrations of credit risk at fair value	16	15
Available-for-sale | Fixed maturities | Investments in Japanese government and government agency securities:
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items]
Concentrations of credit risk at amortized cost	71,107	71,952
Concentrations of credit risk at fair value	85,874	84,461
Available-for-sale | Fixed maturities | Investments in South Korean government and government agency securities:
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items]
Concentrations of credit risk at amortized cost	10,325	10,339
Concentrations of credit risk at fair value	12,707	12,586
Held-to-maturity | Fixed maturities | Investments in Japanese government and government agency securities:
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items]
Concentrations of credit risk at amortized cost	855	864
Concentrations of credit risk at fair value	1,133	1,127
Held-to-maturity | Fixed maturities | Investments in South Korean government and government agency securities:
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items]
Concentrations of credit risk at amortized cost	0	0
Concentrations of credit risk at fair value	0	0
Trading | Fixed maturities | Investments in Japanese government and government agency securities:
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items]
Concentrations of credit risk at amortized cost	22	22
Concentrations of credit risk at fair value	22	22
Trading | Fixed maturities | Investments in South Korean government and government agency securities:
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items]
Concentrations of credit risk at amortized cost	0	0
Concentrations of credit risk at fair value	$ 0	$ 0

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Investments (Commercial Mortgage and Other Loans) (Details) - USD ($) $ in Millions		3 Months Ended	12 Months Ended
		Mar. 31, 2019	Dec. 31, 2018
Commercial Mortgage and Other Loans [Line Items]
Total commercial mortgage and agricultural property loans by property type		$ 60,180	$ 59,124
Other loans		815	834
Total commercial mortgage and other loans	[1]	$ 60,875	$ 59,830
% of Total		100.00%	100.00%
Net carrying value of commercial loans held for sale		$ 463	$ 763
Commercial Mortgage Loans
Commercial Mortgage and Other Loans [Line Items]
Total commercial mortgage and agricultural property loans by property type		$ 56,778	$ 55,808
% of Total		94.30%	94.40%
Commercial mortgage and agricultural property loans
Commercial Mortgage and Other Loans [Line Items]
Allowance for credit losses, Commercial mortgage and agricultural property loans		$ (115)	$ (123)
Total net loans		60,065	59,001
Uncollateralized loans
Commercial Mortgage and Other Loans [Line Items]
Other loans		651	660
Residential property loans
Commercial Mortgage and Other Loans [Line Items]
Other loans		147	157
Other Collateralized Loans
Commercial Mortgage and Other Loans [Line Items]
Other loans		17	17
Other loans
Commercial Mortgage and Other Loans [Line Items]
Total net loans		810	829
Allowance for credit losses, Other loans		(5)	(5)
Office
Commercial Mortgage and Other Loans [Line Items]
Total commercial mortgage and agricultural property loans by property type		$ 13,097	$ 13,280
% of Total		21.70%	22.40%
Retail
Commercial Mortgage and Other Loans [Line Items]
Total commercial mortgage and agricultural property loans by property type		$ 8,502	$ 8,639
% of Total		14.10%	14.60%
Apartments/Multi-Family
Commercial Mortgage and Other Loans [Line Items]
Total commercial mortgage and agricultural property loans by property type		$ 16,789	$ 16,538
% of Total		27.90%	28.00%
Industrial
Commercial Mortgage and Other Loans [Line Items]
Total commercial mortgage and agricultural property loans by property type		$ 12,255	$ 11,574
% of Total		20.40%	19.60%
Hospitality
Commercial Mortgage and Other Loans [Line Items]
Total commercial mortgage and agricultural property loans by property type		$ 2,187	$ 1,931
% of Total		3.60%	3.30%
Other
Commercial Mortgage and Other Loans [Line Items]
Total commercial mortgage and agricultural property loans by property type		$ 3,948	$ 3,846
% of Total		6.60%	6.50%
Agricultural property loans
Commercial Mortgage and Other Loans [Line Items]
Total commercial mortgage and agricultural property loans by property type		$ 3,402	$ 3,316
% of Total		5.70%	5.60%

[1] See Note 4 for details of balances associated with variable interest entities.

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Investments (Allowance for Credit Losses) (Details) - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Mar. 31, 2019	Dec. 31, 2018
Allowance for Loan and Lease Losses [Roll Forward]
Balance, beginning of year	$ 128	$ 106
Addition to (release of) allowance for credit losses	(8)	22
Charge-offs, net of recoveries	0	0
Change in foreign exchange	0	0
Total ending balance	120	128
Commercial Mortgage Loans
Allowance for Loan and Lease Losses [Roll Forward]
Balance, beginning of year	120	97
Addition to (release of) allowance for credit losses	(8)	23
Charge-offs, net of recoveries	0	0
Change in foreign exchange	0	0
Total ending balance	112	120
Agricultural Property Loans
Allowance for Loan and Lease Losses [Roll Forward]
Balance, beginning of year	3	3
Addition to (release of) allowance for credit losses	0	0
Charge-offs, net of recoveries	0	0
Change in foreign exchange	0	0
Total ending balance	3	3
Residential Property Loans
Allowance for Loan and Lease Losses [Roll Forward]
Balance, beginning of year	0	1
Addition to (release of) allowance for credit losses	0	(1)
Charge-offs, net of recoveries	0	0
Change in foreign exchange	0	0
Total ending balance	0	0
Other Collateralized Loans
Allowance for Loan and Lease Losses [Roll Forward]
Balance, beginning of year	0	0
Addition to (release of) allowance for credit losses	0	0
Charge-offs, net of recoveries	0	0
Change in foreign exchange	0	0
Total ending balance	0	0
Uncollateralized Loans
Allowance for Loan and Lease Losses [Roll Forward]
Balance, beginning of year	5	5
Addition to (release of) allowance for credit losses	0	0
Charge-offs, net of recoveries	0	0
Change in foreign exchange	0	0
Total ending balance	$ 5	$ 5

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Investments (Allowance for Credit Losses and Recorded Investment) (Details) - USD ($) $ in Millions	Mar. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Allowance for credit losses:
Individually evaluated for impairment	$ 8	$ 19
Collectively evaluated for impairment	112	109
Total ending balance	120	128	$ 106
Recorded Investment:
Individually evaluated for impairment	48	104
Collectively evaluated for impairment	60,947	59,854
Total ending balance	60,995	59,958
Commercial Mortgage Loans
Allowance for credit losses:
Individually evaluated for impairment	8	19
Collectively evaluated for impairment	104	101
Total ending balance	112	120	97
Recorded Investment:
Individually evaluated for impairment	30	67
Collectively evaluated for impairment	56,748	55,741
Total ending balance	56,778	55,808
Agricultural Property Loans
Allowance for credit losses:
Individually evaluated for impairment	0	0
Collectively evaluated for impairment	3	3
Total ending balance	3	3	3
Recorded Investment:
Individually evaluated for impairment	18	35
Collectively evaluated for impairment	3,384	3,281
Total ending balance	3,402	3,316
Residential Property Loans
Allowance for credit losses:
Individually evaluated for impairment	0	0
Collectively evaluated for impairment	0	0
Total ending balance	0	0	1
Recorded Investment:
Individually evaluated for impairment	0	0
Collectively evaluated for impairment	147	157
Total ending balance	147	157
Other Collateralized Loans
Allowance for credit losses:
Individually evaluated for impairment	0	0
Collectively evaluated for impairment	0	0
Total ending balance	0	0	0
Recorded Investment:
Individually evaluated for impairment	0	0
Collectively evaluated for impairment	17	17
Total ending balance	17	17
Uncollateralized Loans
Allowance for credit losses:
Individually evaluated for impairment	0	0
Collectively evaluated for impairment	5	5
Total ending balance	5	5	$ 5
Recorded Investment:
Individually evaluated for impairment	0	2
Collectively evaluated for impairment	651	658
Total ending balance	651	660
Financial Asset Acquired with Credit Deterioration
Recorded Investment:
Financing Receivable Total	$ 0	$ 0

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Investments (Credit Quality Indicators) (Details) - USD ($) $ in Millions	Mar. 31, 2019	Dec. 31, 2018
Commercial mortgage loans
Financing Receivable, Recorded Investment [Line Items]
Recording investment gross of allowance for credit losses	$ 56,778	$ 55,808
Agricultural property loans
Financing Receivable, Recorded Investment [Line Items]
Recording investment gross of allowance for credit losses	3,402	3,316
Commercial mortgage and agricultural property loans
Financing Receivable, Recorded Investment [Line Items]
Recording investment gross of allowance for credit losses	60,180	59,124
0%-59.99% | Commercial mortgage loans
Financing Receivable, Recorded Investment [Line Items]
Recording investment gross of allowance for credit losses	30,758	31,024
0%-59.99% | Agricultural property loans
Financing Receivable, Recorded Investment [Line Items]
Recording investment gross of allowance for credit losses	3,323	3,252
0%-59.99% | Commercial mortgage and agricultural property loans
Financing Receivable, Recorded Investment [Line Items]
Recording investment gross of allowance for credit losses	34,081	34,276
60%-69.99% | Commercial mortgage loans
Financing Receivable, Recorded Investment [Line Items]
Recording investment gross of allowance for credit losses	17,893	17,159
60%-69.99% | Agricultural property loans
Financing Receivable, Recorded Investment [Line Items]
Recording investment gross of allowance for credit losses	63	64
60%-69.99% | Commercial mortgage and agricultural property loans
Financing Receivable, Recorded Investment [Line Items]
Recording investment gross of allowance for credit losses	17,956	17,223
70%-79.99% | Commercial mortgage loans
Financing Receivable, Recorded Investment [Line Items]
Recording investment gross of allowance for credit losses	7,757	7,119
70%-79.99% | Agricultural property loans
Financing Receivable, Recorded Investment [Line Items]
Recording investment gross of allowance for credit losses	16	0
70%-79.99% | Commercial mortgage and agricultural property loans
Financing Receivable, Recorded Investment [Line Items]
Recording investment gross of allowance for credit losses	7,773	7,119
80% or greater | Commercial mortgage loans
Financing Receivable, Recorded Investment [Line Items]
Recording investment gross of allowance for credit losses	370	506
80% or greater | Agricultural property loans
Financing Receivable, Recorded Investment [Line Items]
Recording investment gross of allowance for credit losses	0	0
80% or greater | Commercial mortgage and agricultural property loans
Financing Receivable, Recorded Investment [Line Items]
Recording investment gross of allowance for credit losses	370	506
≥ 1.2X | Commercial mortgage loans
Financing Receivable, Recorded Investment [Line Items]
Recording investment gross of allowance for credit losses	54,348	53,519
≥ 1.2X | Agricultural property loans
Financing Receivable, Recorded Investment [Line Items]
Recording investment gross of allowance for credit losses	3,161	3,061
≥ 1.2X | Commercial mortgage and agricultural property loans
Financing Receivable, Recorded Investment [Line Items]
Recording investment gross of allowance for credit losses	57,509	56,580
≥ 1.2X | 0%-59.99% | Commercial mortgage loans
Financing Receivable, Recorded Investment [Line Items]
Recording investment gross of allowance for credit losses	29,977	30,325
≥ 1.2X | 0%-59.99% | Agricultural property loans
Financing Receivable, Recorded Investment [Line Items]
Recording investment gross of allowance for credit losses	3,098	2,997
≥ 1.2X | 0%-59.99% | Commercial mortgage and agricultural property loans
Financing Receivable, Recorded Investment [Line Items]
Recording investment gross of allowance for credit losses	33,075	33,322
≥ 1.2X | 60%-69.99% | Commercial mortgage loans
Financing Receivable, Recorded Investment [Line Items]
Recording investment gross of allowance for credit losses	17,205	16,538
≥ 1.2X | 60%-69.99% | Agricultural property loans
Financing Receivable, Recorded Investment [Line Items]
Recording investment gross of allowance for credit losses	63	64
≥ 1.2X | 60%-69.99% | Commercial mortgage and agricultural property loans
Financing Receivable, Recorded Investment [Line Items]
Recording investment gross of allowance for credit losses	17,268	16,602
≥ 1.2X | 70%-79.99% | Commercial mortgage loans
Financing Receivable, Recorded Investment [Line Items]
Recording investment gross of allowance for credit losses	6,971	6,324
≥ 1.2X | 70%-79.99% | Agricultural property loans
Financing Receivable, Recorded Investment [Line Items]
Recording investment gross of allowance for credit losses	0	0
≥ 1.2X | 70%-79.99% | Commercial mortgage and agricultural property loans
Financing Receivable, Recorded Investment [Line Items]
Recording investment gross of allowance for credit losses	6,971	6,324
≥ 1.2X | 80% or greater | Commercial mortgage loans
Financing Receivable, Recorded Investment [Line Items]
Recording investment gross of allowance for credit losses	195	332
≥ 1.2X | 80% or greater | Agricultural property loans
Financing Receivable, Recorded Investment [Line Items]
Recording investment gross of allowance for credit losses	0	0
≥ 1.2X | 80% or greater | Commercial mortgage and agricultural property loans
Financing Receivable, Recorded Investment [Line Items]
Recording investment gross of allowance for credit losses	195	332
1.0X to 1.2X | Commercial mortgage loans
Financing Receivable, Recorded Investment [Line Items]
Recording investment gross of allowance for credit losses	2,167	2,055
1.0X to 1.2X | Agricultural property loans
Financing Receivable, Recorded Investment [Line Items]
Recording investment gross of allowance for credit losses	183	198
1.0X to 1.2X | Commercial mortgage and agricultural property loans
Financing Receivable, Recorded Investment [Line Items]
Recording investment gross of allowance for credit losses	2,350	2,253
1.0X to 1.2X | 0%-59.99% | Commercial mortgage loans
Financing Receivable, Recorded Investment [Line Items]
Recording investment gross of allowance for credit losses	652	538
1.0X to 1.2X | 0%-59.99% | Agricultural property loans
Financing Receivable, Recorded Investment [Line Items]
Recording investment gross of allowance for credit losses	167	198
1.0X to 1.2X | 0%-59.99% | Commercial mortgage and agricultural property loans
Financing Receivable, Recorded Investment [Line Items]
Recording investment gross of allowance for credit losses	819	736
1.0X to 1.2X | 60%-69.99% | Commercial mortgage loans
Financing Receivable, Recorded Investment [Line Items]
Recording investment gross of allowance for credit losses	688	621
1.0X to 1.2X | 60%-69.99% | Agricultural property loans
Financing Receivable, Recorded Investment [Line Items]
Recording investment gross of allowance for credit losses	0	0
1.0X to 1.2X | 60%-69.99% | Commercial mortgage and agricultural property loans
Financing Receivable, Recorded Investment [Line Items]
Recording investment gross of allowance for credit losses	688	621
1.0X to 1.2X | 70%-79.99% | Commercial mortgage loans
Financing Receivable, Recorded Investment [Line Items]
Recording investment gross of allowance for credit losses	744	754
1.0X to 1.2X | 70%-79.99% | Agricultural property loans
Financing Receivable, Recorded Investment [Line Items]
Recording investment gross of allowance for credit losses	16	0
1.0X to 1.2X | 70%-79.99% | Commercial mortgage and agricultural property loans
Financing Receivable, Recorded Investment [Line Items]
Recording investment gross of allowance for credit losses	760	754
1.0X to 1.2X | 80% or greater | Commercial mortgage loans
Financing Receivable, Recorded Investment [Line Items]
Recording investment gross of allowance for credit losses	83	142
1.0X to 1.2X | 80% or greater | Agricultural property loans
Financing Receivable, Recorded Investment [Line Items]
Recording investment gross of allowance for credit losses	0	0
1.0X to 1.2X | 80% or greater | Commercial mortgage and agricultural property loans
Financing Receivable, Recorded Investment [Line Items]
Recording investment gross of allowance for credit losses	83	142
Less than 1.0X | Commercial mortgage loans
Financing Receivable, Recorded Investment [Line Items]
Recording investment gross of allowance for credit losses	263	234
Less than 1.0X | Agricultural property loans
Financing Receivable, Recorded Investment [Line Items]
Recording investment gross of allowance for credit losses	58	57
Less than 1.0X | Commercial mortgage and agricultural property loans
Financing Receivable, Recorded Investment [Line Items]
Recording investment gross of allowance for credit losses	321	291
Less than 1.0X | 0%-59.99% | Commercial mortgage loans
Financing Receivable, Recorded Investment [Line Items]
Recording investment gross of allowance for credit losses	129	161
Less than 1.0X | 0%-59.99% | Agricultural property loans
Financing Receivable, Recorded Investment [Line Items]
Recording investment gross of allowance for credit losses	58	57
Less than 1.0X | 0%-59.99% | Commercial mortgage and agricultural property loans
Financing Receivable, Recorded Investment [Line Items]
Recording investment gross of allowance for credit losses	187	218
Less than 1.0X | 60%-69.99% | Commercial mortgage loans
Financing Receivable, Recorded Investment [Line Items]
Recording investment gross of allowance for credit losses	0	0
Less than 1.0X | 60%-69.99% | Agricultural property loans
Financing Receivable, Recorded Investment [Line Items]
Recording investment gross of allowance for credit losses	0	0
Less than 1.0X | 60%-69.99% | Commercial mortgage and agricultural property loans
Financing Receivable, Recorded Investment [Line Items]
Recording investment gross of allowance for credit losses	0	0
Less than 1.0X | 70%-79.99% | Commercial mortgage loans
Financing Receivable, Recorded Investment [Line Items]
Recording investment gross of allowance for credit losses	42	41
Less than 1.0X | 70%-79.99% | Agricultural property loans
Financing Receivable, Recorded Investment [Line Items]
Recording investment gross of allowance for credit losses	0	0
Less than 1.0X | 70%-79.99% | Commercial mortgage and agricultural property loans
Financing Receivable, Recorded Investment [Line Items]
Recording investment gross of allowance for credit losses	42	41
Less than 1.0X | 80% or greater | Commercial mortgage loans
Financing Receivable, Recorded Investment [Line Items]
Recording investment gross of allowance for credit losses	92	32
Less than 1.0X | 80% or greater | Agricultural property loans
Financing Receivable, Recorded Investment [Line Items]
Recording investment gross of allowance for credit losses	0	0
Less than 1.0X | 80% or greater | Commercial mortgage and agricultural property loans
Financing Receivable, Recorded Investment [Line Items]
Recording investment gross of allowance for credit losses	$ 92	$ 32

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Investments (Analysis of Past Due Commercial Mortgage and Other Loans) (Details) - USD ($) $ in Millions	Mar. 31, 2019	Dec. 31, 2018
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	$ 60,973	$ 59,940
Total Past Due	22	18
Total Loans	60,995	59,958
Non-Accrual Status	45	87
30-59 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	1	1
60-89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	1	0
90 days or more past due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	20	17
Commercial mortgage loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	56,778	55,808
Total Past Due	0	0
Total Loans	56,778	55,808
Non-Accrual Status	22	66
Commercial mortgage loans | 30-59 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	0	0
Commercial mortgage loans | 60-89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	0	0
Commercial mortgage loans | 90 days or more past due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	0	0
Agricultural property loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	3,383	3,301
Total Past Due	19	15
Total Loans	3,402	3,316
Non-Accrual Status	21	18
Agricultural property loans | 30-59 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	1	0
Agricultural property loans | 60-89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	0	0
Agricultural property loans | 90 days or more past due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	18	15
Residential Property Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	144	154
Total Past Due	3	3
Total Loans	147	157
Non-Accrual Status	2	3
Residential Property Loans | 30-59 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	0	1
Residential Property Loans | 60-89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	1	0
Residential Property Loans | 90 days or more past due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	2	2
Other Collateralized Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	17	17
Total Past Due	0	0
Total Loans	17	17
Non-Accrual Status	0	0
Other Collateralized Loans | 30-59 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	0	0
Other Collateralized Loans | 60-89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	0	0
Other Collateralized Loans | 90 days or more past due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	0	0
Uncollateralized loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	651	660
Total Past Due	0	0
Total Loans	651	660
Non-Accrual Status	0	0
Uncollateralized loans | 30-59 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	0	0
Uncollateralized loans | 60-89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	0	0
Uncollateralized loans | 90 days or more past due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	0	0
Loans | 90 days or more past due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Accruing Interest	$ 0	$ 0

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Investments (Other Invested Assets) (Details) - USD ($) $ in Millions		Mar. 31, 2019	Dec. 31, 2018
Other Invested Assets [Line Items]
Other invested assets	[1]	$ 14,840	$ 14,526
LPs/LLCs
Other Invested Assets [Line Items]
Other invested assets		10,024	9,841
Real estate held through direct ownership
Other Invested Assets [Line Items]
Other invested assets		2,632	2,466
Derivative instruments
Other Invested Assets [Line Items]
Other invested assets		1,028	1,155
Other
Other Invested Assets [Line Items]
Other invested assets		1,156	1,064
Mortgage Debt | Real estate-related
Other Invested Assets [Line Items]
Other invested assets		804	776
Equity method | LPs/LLCs
Other Invested Assets [Line Items]
Other invested assets		5,961	5,726
Equity method | Private equity | LPs/LLCs
Other Invested Assets [Line Items]
Other invested assets		3,254	3,182
Equity method | Hedge funds | LPs/LLCs
Other Invested Assets [Line Items]
Other invested assets		1,481	1,337
Equity method | Real estate-related | LPs/LLCs
Other Invested Assets [Line Items]
Other invested assets		1,226	1,207
Fair Value
Other Invested Assets [Line Items]
Other invested assets		36	40
Fair Value | LPs/LLCs
Other Invested Assets [Line Items]
Other invested assets		4,063	4,115
Fair Value | Private equity | LPs/LLCs
Other Invested Assets [Line Items]
Other invested assets		1,621	1,684
Fair Value | Hedge funds | LPs/LLCs
Other Invested Assets [Line Items]
Other invested assets		2,135	2,135
Fair Value | Real estate-related | LPs/LLCs
Other Invested Assets [Line Items]
Other invested assets		$ 307	$ 296

[1] See Note 4 for details of balances associated with variable interest entities.

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Investments (Net Investment Income) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Gross investment income	$ 4,468	$ 4,200
Less: investment expenses	(252)	(202)
Net investment income	4,216	3,998
Assets supporting experience-rated contractholder liabilities
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Gross investment income	185	191
Equity securities, at fair value
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Gross investment income	30	35
Commercial mortgage and other loans
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Gross investment income	600	569
Policy loans
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Gross investment income	151	152
Other invested assets
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Gross investment income	205	141
Short-term investments and cash equivalents
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Gross investment income	118	72
Available-for-sale | Fixed maturities
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Gross investment income	3,088	2,954
Held-to-maturity | Fixed maturities
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Gross investment income	57	55
Trading | Fixed maturities
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Gross investment income	$ 34	$ 31

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Investments (Realized Investment Gains Losses, Net) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Gain (Loss) on Securities [Line Items]
Realized investment gains (losses), net	$ (766)	$ 425
Fixed maturities
Gain (Loss) on Securities [Line Items]
Realized investment gains (losses), net	260	78
Commercial mortgage and other loans
Gain (Loss) on Securities [Line Items]
Realized investment gains (losses), net	10	12
Investment real estate
Gain (Loss) on Securities [Line Items]
Realized investment gains (losses), net	0	2
LPs/LLCs
Gain (Loss) on Securities [Line Items]
Realized investment gains (losses), net	(5)	6
Derivatives
Gain (Loss) on Securities [Line Items]
Realized investment gains (losses), net	(1,032)	328
Other
Gain (Loss) on Securities [Line Items]
Realized investment gains (losses), net	$ 1	$ (1)

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Investments (Net Unrealized Gains Losses on Investments) (Details) - USD ($) $ in Millions	Mar. 31, 2019	Dec. 31, 2018
Gain (Loss) on Securities [Line Items]
Net unrealized gains (losses) on investments	$ 33,054	$ 22,720
Fixed maturities | Available-for-sale | OTTI
Gain (Loss) on Securities [Line Items]
Net unrealized gains (losses) on investments	251	190
Fixed maturities | Available-for-sale | All other
Gain (Loss) on Securities [Line Items]
Net unrealized gains (losses) on investments	32,029	21,721
Derivatives designated as cash flow hedges
Gain (Loss) on Securities [Line Items]
Net unrealized gains (losses) on investments	776	811
Other investments
Gain (Loss) on Securities [Line Items]
Net unrealized gains (losses) on investments	(2)	$ (2)
Other investments | Held-to-maturity
Gain (Loss) on Securities [Line Items]
Net unrealized gains (losses) on investments	$ 0

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Investments (Repurchase Agreements and Securities Lending Transactions) (Details) - USD ($) $ in Millions	Mar. 31, 2019	Dec. 31, 2018
Transfer Of Certain Financial Assets Accounted For As Secured Borrowings [Line Items]
Total securities sold under agreements to repurchase	$ 9,873	$ 9,950
Total cash collateral for loaned securities	4,093	3,929
30 days or greater
Transfer Of Certain Financial Assets Accounted For As Secured Borrowings [Line Items]
Total securities sold under agreements to repurchase	0	0
Total cash collateral for loaned securities	0	0
Overnight & Continuous
Transfer Of Certain Financial Assets Accounted For As Secured Borrowings [Line Items]
Total securities sold under agreements to repurchase	799	994
Total cash collateral for loaned securities	4,093	3,929
Up to 30 Days
Transfer Of Certain Financial Assets Accounted For As Secured Borrowings [Line Items]
Total securities sold under agreements to repurchase	9,074	8,956
Total cash collateral for loaned securities	0	0
U.S. Treasury securities and obligations of U.S. government authorities and agencies
Transfer Of Certain Financial Assets Accounted For As Secured Borrowings [Line Items]
Total securities sold under agreements to repurchase	9,498	9,589
Total cash collateral for loaned securities	86	105
U.S. Treasury securities and obligations of U.S. government authorities and agencies | Overnight & Continuous
Transfer Of Certain Financial Assets Accounted For As Secured Borrowings [Line Items]
Total securities sold under agreements to repurchase	780	975
Total cash collateral for loaned securities	86	105
U.S. Treasury securities and obligations of U.S. government authorities and agencies | Up to 30 Days
Transfer Of Certain Financial Assets Accounted For As Secured Borrowings [Line Items]
Total securities sold under agreements to repurchase	8,718	8,614
Total cash collateral for loaned securities	0	0
Obligations of U.S. states and their political subdivisions
Transfer Of Certain Financial Assets Accounted For As Secured Borrowings [Line Items]
Total cash collateral for loaned securities	47	88
Obligations of U.S. states and their political subdivisions | Overnight & Continuous
Transfer Of Certain Financial Assets Accounted For As Secured Borrowings [Line Items]
Total cash collateral for loaned securities	47	88
Obligations of U.S. states and their political subdivisions | Up to 30 Days
Transfer Of Certain Financial Assets Accounted For As Secured Borrowings [Line Items]
Total cash collateral for loaned securities	0	0
Foreign government bonds
Transfer Of Certain Financial Assets Accounted For As Secured Borrowings [Line Items]
Total cash collateral for loaned securities	440	325
Foreign government bonds | Overnight & Continuous
Transfer Of Certain Financial Assets Accounted For As Secured Borrowings [Line Items]
Total cash collateral for loaned securities	440	325
Foreign government bonds | Up to 30 Days
Transfer Of Certain Financial Assets Accounted For As Secured Borrowings [Line Items]
Total cash collateral for loaned securities	0	0
U.S. public corporate securities
Transfer Of Certain Financial Assets Accounted For As Secured Borrowings [Line Items]
Total securities sold under agreements to repurchase	19	19
Total cash collateral for loaned securities	2,703	2,563
U.S. public corporate securities | Overnight & Continuous
Transfer Of Certain Financial Assets Accounted For As Secured Borrowings [Line Items]
Total securities sold under agreements to repurchase	19	19
Total cash collateral for loaned securities	2,703	2,563
U.S. public corporate securities | Up to 30 Days
Transfer Of Certain Financial Assets Accounted For As Secured Borrowings [Line Items]
Total securities sold under agreements to repurchase	0	0
Total cash collateral for loaned securities	0	0
Foreign public corporate securities
Transfer Of Certain Financial Assets Accounted For As Secured Borrowings [Line Items]
Total cash collateral for loaned securities	673	693
Foreign public corporate securities | Overnight & Continuous
Transfer Of Certain Financial Assets Accounted For As Secured Borrowings [Line Items]
Total cash collateral for loaned securities	673	693
Foreign public corporate securities | Up to 30 Days
Transfer Of Certain Financial Assets Accounted For As Secured Borrowings [Line Items]
Total cash collateral for loaned securities	0	0
Residential mortgage-backed securities
Transfer Of Certain Financial Assets Accounted For As Secured Borrowings [Line Items]
Total securities sold under agreements to repurchase	356	342
Residential mortgage-backed securities | Overnight & Continuous
Transfer Of Certain Financial Assets Accounted For As Secured Borrowings [Line Items]
Total securities sold under agreements to repurchase	0	0
Residential mortgage-backed securities | Up to 30 Days
Transfer Of Certain Financial Assets Accounted For As Secured Borrowings [Line Items]
Total securities sold under agreements to repurchase	356	342
Equity securities
Transfer Of Certain Financial Assets Accounted For As Secured Borrowings [Line Items]
Total cash collateral for loaned securities	144	155
Equity securities | Overnight & Continuous
Transfer Of Certain Financial Assets Accounted For As Secured Borrowings [Line Items]
Total cash collateral for loaned securities	144	155
Equity securities | Up to 30 Days
Transfer Of Certain Financial Assets Accounted For As Secured Borrowings [Line Items]
Total cash collateral for loaned securities	$ 0	$ 0

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Variable Interest Entities (Assets and Liabilities of Consolidated VIEs) (Details) - USD ($) $ in Millions		3 Months Ended	12 Months Ended
		Mar. 31, 2019	Dec. 31, 2018
Variable Interest Entity [Line Items]
Total liabilities of consolidated VIEs	[1]	$ 1,225	$ 955
Consolidated VIEs for Which the Company is the Investment Manager
Variable Interest Entity [Line Items]
Total assets of consolidated VIEs		4,451	4,140
Total liabilities of consolidated VIEs		1,550	1,250
Consolidated VIEs for Which the Company is the Investment Manager | Assets supporting experience-rated contractholder liabilities
Variable Interest Entity [Line Items]
Total assets of consolidated VIEs		0	0
Consolidated VIEs for Which the Company is the Investment Manager | Equity securities
Variable Interest Entity [Line Items]
Total assets of consolidated VIEs		50	41
Consolidated VIEs for Which the Company is the Investment Manager | Commercial mortgage and other loans
Variable Interest Entity [Line Items]
Total assets of consolidated VIEs		751	730
Consolidated VIEs for Which the Company is the Investment Manager | Other
Variable Interest Entity [Line Items]
Total assets of consolidated VIEs		1,761	1,526
Consolidated VIEs for Which the Company is the Investment Manager | Cash and cash equivalents
Variable Interest Entity [Line Items]
Total assets of consolidated VIEs		124	131
Consolidated VIEs for Which the Company is the Investment Manager | Accrued investment income
Variable Interest Entity [Line Items]
Total assets of consolidated VIEs		5	5
Consolidated VIEs for Which the Company is the Investment Manager | Other assets
Variable Interest Entity [Line Items]
Total assets of consolidated VIEs		457	463
Consolidated VIEs for Which the Company is the Investment Manager | Other liabilities
Variable Interest Entity [Line Items]
Total liabilities of consolidated VIEs		325	295
Consolidated VIEs for Which the Company is the Investment Manager | Notes Issued by Consolidated VIEs
Variable Interest Entity [Line Items]
Total liabilities of consolidated VIEs		$ 1,225	$ 955
VIEs Liabilities, maturities obligations (greater than)		5 years	5 years
Consolidated VIEs for Which the Company is the Investment Manager | Available-for-sale | Fixed maturities
Variable Interest Entity [Line Items]
Total assets of consolidated VIEs		$ 97	$ 73
Consolidated VIEs for Which the Company is the Investment Manager | Trading | Fixed maturities
Variable Interest Entity [Line Items]
Total assets of consolidated VIEs		1,112	1,076
Consolidated VIEs for Which the Company is the Investment Manager | Held-to-maturity | Fixed maturities
Variable Interest Entity [Line Items]
Total assets of consolidated VIEs		94	95
Other Consolidated VIEs
Variable Interest Entity [Line Items]
Total assets of consolidated VIEs		1,943	1,923
Total liabilities of consolidated VIEs		10	17
Other Consolidated VIEs | Assets supporting experience-rated contractholder liabilities
Variable Interest Entity [Line Items]
Total assets of consolidated VIEs		7	8
Other Consolidated VIEs | Equity securities
Variable Interest Entity [Line Items]
Total assets of consolidated VIEs		0	0
Other Consolidated VIEs | Commercial mortgage and other loans
Variable Interest Entity [Line Items]
Total assets of consolidated VIEs		0	0
Other Consolidated VIEs | Other
Variable Interest Entity [Line Items]
Total assets of consolidated VIEs		93	77
Other Consolidated VIEs | Cash and cash equivalents
Variable Interest Entity [Line Items]
Total assets of consolidated VIEs		0	0
Other Consolidated VIEs | Accrued investment income
Variable Interest Entity [Line Items]
Total assets of consolidated VIEs		4	4
Other Consolidated VIEs | Other assets
Variable Interest Entity [Line Items]
Total assets of consolidated VIEs		733	721
Other Consolidated VIEs | Other liabilities
Variable Interest Entity [Line Items]
Total liabilities of consolidated VIEs		10	17
Other Consolidated VIEs | Notes Issued by Consolidated VIEs
Variable Interest Entity [Line Items]
Total liabilities of consolidated VIEs		0	0
Other Consolidated VIEs | Available-for-sale | Fixed maturities
Variable Interest Entity [Line Items]
Total assets of consolidated VIEs		282	282
Other Consolidated VIEs | Trading | Fixed maturities
Variable Interest Entity [Line Items]
Total assets of consolidated VIEs		0	0
Other Consolidated VIEs | Held-to-maturity | Fixed maturities
Variable Interest Entity [Line Items]
Total assets of consolidated VIEs		824	831
ASU 2015-02, Wholly-owned by consolidated subsidiaries | Consolidated VIEs for Which the Company is the Investment Manager
Variable Interest Entity [Line Items]
Total assets of consolidated VIEs		$ 2,210	$ 2,013

[1] See Note 4 for details of balances associated with variable interest entities.

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Variable Interest Entities (Narrative) (Details) - USD ($)		Mar. 31, 2019	Dec. 31, 2018
Variable Interest Entity [Line Items]
Other invested assets	[1]	$ 14,840,000,000	$ 14,526,000,000
LPs/LLCs
Variable Interest Entity [Line Items]
Other invested assets		10,024,000,000	9,841,000,000
Other Unconsolidated VIEs
Variable Interest Entity [Line Items]
Liabilities held within unconsolidated VIEs		0
Other Unconsolidated VIEs | Fixed maturities, available-for-sale, Fixed maturities, trading, Equity securities and Other invested assets [Member]
Variable Interest Entity [Line Items]
Maximum exposure to loss resulting from investment in unconsolidated VIEs		911,000,000	836,000,000
VIEs and Non-VIEs | LPs/LLCs
Variable Interest Entity [Line Items]
Other invested assets		$ 10,024,000,000	$ 9,841,000,000

[1] See Note 4 for details of balances associated with variable interest entities.

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Derivative Instruments (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Dec. 31, 2018
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Total derivative assets	$ 1,018	$ 1,148
Total derivative liabilities	433	127
Anticipated pre-tax gain (loss) reclassified from accumulated other comprehensive income (loss) to earnings	$ 246
Maximum Length of Time Hedged in Cash Flow Hedge	5 years
Net investment hedges income (loss) before taxes	$ 533	532
Credit Derivatives [Line Items]
Credit Derivative Protection Purchased Notional Amount	105	145
Single Name Credit Default Swaps
Credit Derivatives [Line Items]
Credit Derivative, Maximum Exposure, Undiscounted	$ 103	110
Credit Derivatives Written Max Length Of Maturities (less than)	6 years
Credit Risk Derivatives, at Fair Value, Asset Net (Liability)	$ 1	1
Single Name Credit Default Swaps | NAIC 1
Credit Derivatives [Line Items]
Credit Derivative, Maximum Exposure, Undiscounted	36
Single Name Credit Default Swaps | NAIC 2
Credit Derivatives [Line Items]
Credit Derivative, Maximum Exposure, Undiscounted	61
Single Name Credit Default Swaps | NAIC 3
Credit Derivatives [Line Items]
Credit Derivative, Maximum Exposure, Undiscounted	4
Single Name Credit Default Swaps | NAIC 6
Credit Derivatives [Line Items]
Credit Derivative, Maximum Exposure, Undiscounted	2
Credit Default Swaps Referencing Indices
Credit Derivatives [Line Items]
Credit Derivative, Maximum Exposure, Undiscounted	$ 973	4,953
Credit Derivatives Written Max Length Of Maturities (less than)	43 years
Credit Risk Derivatives, at Fair Value, Asset Net (Liability)	$ 15	10
Credit Default Swaps Referencing Indices | NAIC 1
Credit Derivatives [Line Items]
Credit Derivative, Maximum Exposure, Undiscounted	53
Credit Default Swaps Referencing Indices | NAIC 3
Credit Derivatives [Line Items]
Credit Derivative, Maximum Exposure, Undiscounted	693
Credit Default Swaps Referencing Indices | NAIC 6
Credit Derivatives [Line Items]
Credit Derivative, Maximum Exposure, Undiscounted	227
Credit Default Swap, Buying Protection
Credit Derivatives [Line Items]
Credit Risk Derivatives, at Fair Value, Asset Net (Liability)	$ (1)	$ (1)

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Derivative Instruments (Gross Notional Amount and Fair Value of Derivatives Contracts) (Details) - USD ($) $ in Millions	Mar. 31, 2019	Dec. 31, 2018
Derivative [Line Items]
Derivative Asset, Fair Value, Gross Asset	$ 10,266	$ 10,480
Derivative Liability, Fair Value, Gross Liability	5,772	5,408
Derivative, Notional Amount	410,693	405,644
Net Embedded Derivative Liability	(10,123)	(8,959)
Designated as Hedging Instrument
Derivative [Line Items]
Derivative Asset, Fair Value, Gross Asset	1,802	1,877
Derivative Liability, Fair Value, Gross Liability	425	427
Derivative, Notional Amount	25,957	25,931
Designated as Hedging Instrument | Interest Rate Swap
Derivative [Line Items]
Derivative Asset, Fair Value, Gross Asset	421	305
Derivative Liability, Fair Value, Gross Liability	69	67
Derivative, Notional Amount	3,835	3,885
Designated as Hedging Instrument | Interest Rate Forward
Derivative [Line Items]
Derivative Asset, Fair Value, Gross Asset	0	26
Derivative Liability, Fair Value, Gross Liability	0	0
Derivative, Notional Amount	0	600
Designated as Hedging Instrument | Foreign Exchange Forward
Derivative [Line Items]
Derivative Asset, Fair Value, Gross Asset	22	26
Derivative Liability, Fair Value, Gross Liability	4	2
Derivative, Notional Amount	750	722
Designated as Hedging Instrument | Currency Swap
Derivative [Line Items]
Derivative Asset, Fair Value, Gross Asset	1,359	1,520
Derivative Liability, Fair Value, Gross Liability	352	358
Derivative, Notional Amount	21,372	20,724
Not Designated as Hedging Instrument
Derivative [Line Items]
Derivative Asset, Fair Value, Gross Asset	8,464	8,603
Derivative Liability, Fair Value, Gross Liability	5,347	4,981
Derivative, Notional Amount	384,736	379,713
Not Designated as Hedging Instrument | Interest Rate Swap
Derivative [Line Items]
Derivative Asset, Fair Value, Gross Asset	6,685	5,792
Derivative Liability, Fair Value, Gross Liability	3,288	3,435
Derivative, Notional Amount	139,741	140,963
Not Designated as Hedging Instrument | Interest Rate Forward
Derivative [Line Items]
Derivative Asset, Fair Value, Gross Asset	42	72
Derivative Liability, Fair Value, Gross Liability	0	0
Derivative, Notional Amount	2,504	5,049
Not Designated as Hedging Instrument | Foreign Exchange Forward
Derivative [Line Items]
Derivative Asset, Fair Value, Gross Asset	241	246
Derivative Liability, Fair Value, Gross Liability	189	138
Derivative, Notional Amount	21,897	19,849
Not Designated as Hedging Instrument | Foreign Exchange Option
Derivative [Line Items]
Derivative Asset, Fair Value, Gross Asset	0	0
Derivative Liability, Fair Value, Gross Liability	0	0
Derivative, Notional Amount	1	2
Not Designated as Hedging Instrument | Currency Swap
Derivative [Line Items]
Derivative Asset, Fair Value, Gross Asset	800	773
Derivative Liability, Fair Value, Gross Liability	351	421
Derivative, Notional Amount	13,645	13,784
Not Designated as Hedging Instrument | Interest Rate Future
Derivative [Line Items]
Derivative Asset, Fair Value, Gross Asset	1	23
Derivative Liability, Fair Value, Gross Liability	23	2
Derivative, Notional Amount	16,367	13,991
Not Designated as Hedging Instrument | Interest Rate Option
Derivative [Line Items]
Derivative Asset, Fair Value, Gross Asset	162	147
Derivative Liability, Fair Value, Gross Liability	332	314
Derivative, Notional Amount	22,383	24,002
Not Designated as Hedging Instrument | Credit Default Swap
Derivative [Line Items]
Derivative Asset, Fair Value, Gross Asset	20	33
Derivative Liability, Fair Value, Gross Liability	5	23
Derivative, Notional Amount	1,181	5,207
Not Designated as Hedging Instrument | Equity Future
Derivative [Line Items]
Derivative Asset, Fair Value, Gross Asset	0	0
Derivative Liability, Fair Value, Gross Liability	7	8
Derivative, Notional Amount	1,325	1,141
Not Designated as Hedging Instrument | Equity Option
Derivative [Line Items]
Derivative Asset, Fair Value, Gross Asset	478	384
Derivative Liability, Fair Value, Gross Liability	614	554
Derivative, Notional Amount	68,321	58,693
Not Designated as Hedging Instrument | Total Return Swap
Derivative [Line Items]
Derivative Asset, Fair Value, Gross Asset	34	1,131
Derivative Liability, Fair Value, Gross Liability	538	86
Derivative, Notional Amount	16,691	17,309
Not Designated as Hedging Instrument | Other Contract
Derivative [Line Items]
Derivative Asset, Fair Value, Gross Asset	0	0
Derivative Liability, Fair Value, Gross Liability	0	0
Derivative, Notional Amount	512	508
Not Designated as Hedging Instrument | Synthetic Gics
Derivative [Line Items]
Derivative Asset, Fair Value, Gross Asset	1	2
Derivative Liability, Fair Value, Gross Liability	0	0
Derivative, Notional Amount	$ 80,168	$ 79,215

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Derivative Instruments (Hedged Item Offset By Derivatives Achieving Fair Value Hedge Accounting) (Details) - USD ($) $ in Millions		Mar. 31, 2019	Dec. 31, 2018
Derivative [Line Items]
Fixed maturities, available-for-sale	[1]	$ 365,928	$ 353,656
Commercial mortgage and other loans	[1]	60,875	59,830
Policyholders’ account balances		(151,224)	(150,338)
Future policy benefits		(277,085)	$ (273,846)
Carrying Amount of the Hedged Assets (Liabilities)
Derivative [Line Items]
Fixed maturities, available-for-sale		421
Commercial mortgage and other loans		34
Policyholders’ account balances		(1,704)
Future policy benefits		(562)
Cumulative Adjustment Included in Carrying Amount
Derivative [Line Items]
Fixed maturities, available-for-sale		56
Commercial mortgage and other loans		2
Policyholders’ account balances		13
Future policy benefits		$ (77)

[1] See Note 4 for details of balances associated with variable interest entities.

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Derivative Instruments (Offsetting Assets and Liabilities) (Details) - USD ($) $ in Millions	Mar. 31, 2019	Dec. 31, 2018
Derivative Assets
Gross Amounts of Recognized Financial Instruments	$ 10,177	$ 10,407
Gross Amounts Offset in the Statements of Financial Position	(9,247)	(9,331)
Net Amounts Presented in the Statements of Financial Position	930	1,076
Financial Instruments/Collateral	(736)	(614)
Net Amount	194	462
Securities purchased under agreement to resell
Gross Amounts of Recognized Financial Instruments	1,199	986
Gross Amounts Offset in the Statements of Financial Position	0	0
Net Amounts Presented in the Statements of Financial Position	1,199	986
Financial Instruments/Collateral	(1,199)	(986)
Net Amount	0	0
Total assets
Gross Amounts of Recognized Financial Instruments	11,376	11,393
Gross Amounts Offset in the Statements of Financial Position	(9,247)	(9,331)
Net Amounts Presented in the Statements of Financial Position	2,129	2,062
Financial Instruments/Collateral	(1,935)	(1,600)
Net Amount	194	462
Derivative Liabilities
Gross Amounts of Recognized Financial Instruments	5,764	5,387
Gross Amounts Offset in the Statements of Financial Position	(5,339)	(5,281)
Net Amounts Presented in the Statements of Financial Position	425	106
Financial Instruments/Collateral	(152)	(45)
Net Amount	273	61
Securities sold under agreement to repurchase
Gross Amounts of Recognized Financial Instruments	9,873	9,950
Gross Amounts Offset in the Statements of Financial Position	0	0
Net Amounts Presented in the Statements of Financial Position	9,873	9,950
Financial Instruments/Collateral	(9,873)	(9,950)
Net Amount	0	0
Total liabilities
Gross Amounts of Recognized Financial Instruments	15,637	15,337
Gross Amounts Offset in the Statements of Financial Position	(5,339)	(5,281)
Net Amounts Presented in the Statements of Financial Position	10,298	10,056
Financial Instruments/Collateral	(10,025)	(9,995)
Net Amount	$ 273	$ 61

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Derivative Instruments (Financial Statement Classification and Impact of Derivatives Used in Qualifying and Non-qualifying Hedge Relationships) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Realized Investment Gains (Losses)
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	$ (1,031)	$ 320
Realized Investment Gains (Losses) | Derivatives Not Qualifying as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	(1,020)	333
Net Investment Income
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	72	59
Net Investment Income | Derivatives Not Qualifying as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0
Other Income
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	(41)	(91)
Other Income | Derivatives Not Qualifying as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	4	0
Interest Expense
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0
Interest Expense | Derivatives Not Qualifying as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0
Interest Credited To Policyholders’ Account Balances
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	2	3
Interest Credited To Policyholders’ Account Balances | Derivatives Not Qualifying as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0
Policyholder Benefts
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	5
Policyholder Benefts | Derivatives Not Qualifying as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0
AOCI
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	(43)	(585)
AOCI | Derivatives Not Qualifying as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0
Fair value hedges | Realized Investment Gains (Losses) | Derivatives Designated as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	(6)	19
Fair value hedges | Net Investment Income | Derivatives Designated as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	(2)	(3)
Fair value hedges | Other Income | Derivatives Designated as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0
Fair value hedges | Interest Expense | Derivatives Designated as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0
Fair value hedges | Interest Credited To Policyholders’ Account Balances | Derivatives Designated as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	68	(83)
Fair value hedges | Policyholder Benefts | Derivatives Designated as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	51
Fair value hedges | AOCI | Derivatives Designated as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0
Fair Value Hedged Item | Realized Investment Gains (Losses)
Derivative Instruments, Gain (Loss) [Line Items]
Change in Unrealized Gain (Loss) on Hedged Item in Fair Value Hedge	3	(22)
Change In Unrealized Gain (Loss) On Hedged Item In Fair Value Net Of Hedging Instrument	(3)	(3)
Fair Value Hedged Item | Net Investment Income
Derivative Instruments, Gain (Loss) [Line Items]
Change in Unrealized Gain (Loss) on Hedged Item in Fair Value Hedge	6	15
Change In Unrealized Gain (Loss) On Hedged Item In Fair Value Net Of Hedging Instrument	4	12
Fair Value Hedged Item | Other Income
Derivative Instruments, Gain (Loss) [Line Items]
Change in Unrealized Gain (Loss) on Hedged Item in Fair Value Hedge	0	0
Change In Unrealized Gain (Loss) On Hedged Item In Fair Value Net Of Hedging Instrument	0	0
Fair Value Hedged Item | Interest Expense
Derivative Instruments, Gain (Loss) [Line Items]
Change in Unrealized Gain (Loss) on Hedged Item in Fair Value Hedge	0	0
Change In Unrealized Gain (Loss) On Hedged Item In Fair Value Net Of Hedging Instrument	0	0
Fair Value Hedged Item | Interest Credited To Policyholders’ Account Balances
Derivative Instruments, Gain (Loss) [Line Items]
Change in Unrealized Gain (Loss) on Hedged Item in Fair Value Hedge	(66)	86
Change In Unrealized Gain (Loss) On Hedged Item In Fair Value Net Of Hedging Instrument	2	3
Fair Value Hedged Item | Policyholder Benefts
Derivative Instruments, Gain (Loss) [Line Items]
Change in Unrealized Gain (Loss) on Hedged Item in Fair Value Hedge	(46)
Change In Unrealized Gain (Loss) On Hedged Item In Fair Value Net Of Hedging Instrument	5
Fair Value Hedged Item | AOCI
Derivative Instruments, Gain (Loss) [Line Items]
Change in Unrealized Gain (Loss) on Hedged Item in Fair Value Hedge	0	0
Change In Unrealized Gain (Loss) On Hedged Item In Fair Value Net Of Hedging Instrument	0	0
Cash flow hedges | Realized Investment Gains (Losses) | Derivatives Designated as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	(8)	(8)
Cash flow hedges | Net Investment Income | Derivatives Designated as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	68	47
Cash flow hedges | Other Income | Derivatives Designated as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	(45)	(91)
Cash flow hedges | Interest Expense | Derivatives Designated as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0
Cash flow hedges | Interest Credited To Policyholders’ Account Balances | Derivatives Designated as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0
Cash flow hedges | Policyholder Benefts | Derivatives Designated as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0
Cash flow hedges | AOCI | Derivatives Designated as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	(44)	(583)
Net investment hedges | Realized Investment Gains (Losses) | Derivatives Designated as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	(2)
Net investment hedges | Net Investment Income | Derivatives Designated as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0
Net investment hedges | Other Income | Derivatives Designated as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0
Net investment hedges | Interest Expense | Derivatives Designated as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0
Net investment hedges | Interest Credited To Policyholders’ Account Balances | Derivatives Designated as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0
Net investment hedges | Policyholder Benefts | Derivatives Designated as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0
Net investment hedges | AOCI | Derivatives Designated as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	1	(2)
Interest Rate | Realized Investment Gains (Losses) | Derivatives Not Qualifying as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	1,389	(1,516)
Interest Rate | Net Investment Income | Derivatives Not Qualifying as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0
Interest Rate | Other Income | Derivatives Not Qualifying as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0
Interest Rate | Interest Expense | Derivatives Not Qualifying as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0
Interest Rate | Interest Credited To Policyholders’ Account Balances | Derivatives Not Qualifying as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0
Interest Rate | Policyholder Benefts | Derivatives Not Qualifying as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0
Interest Rate | AOCI | Derivatives Not Qualifying as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0
Interest Rate | Fair value hedges | Realized Investment Gains (Losses) | Derivatives Designated as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	(5)	17
Interest Rate | Fair value hedges | Net Investment Income | Derivatives Designated as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	(2)	(3)
Interest Rate | Fair value hedges | Other Income | Derivatives Designated as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0
Interest Rate | Fair value hedges | Interest Expense | Derivatives Designated as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0
Interest Rate | Fair value hedges | Interest Credited To Policyholders’ Account Balances | Derivatives Designated as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	68	(83)
Interest Rate | Fair value hedges | Policyholder Benefts | Derivatives Designated as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	51
Interest Rate | Fair value hedges | AOCI | Derivatives Designated as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0
Interest Rate | Fair Value Hedged Item | Realized Investment Gains (Losses)
Derivative Instruments, Gain (Loss) [Line Items]
Change in Unrealized Gain (Loss) on Hedged Item in Fair Value Hedge	2	(20)
Interest Rate | Fair Value Hedged Item | Net Investment Income
Derivative Instruments, Gain (Loss) [Line Items]
Change in Unrealized Gain (Loss) on Hedged Item in Fair Value Hedge	5	14
Interest Rate | Fair Value Hedged Item | Other Income
Derivative Instruments, Gain (Loss) [Line Items]
Change in Unrealized Gain (Loss) on Hedged Item in Fair Value Hedge	0	0
Interest Rate | Fair Value Hedged Item | Interest Expense
Derivative Instruments, Gain (Loss) [Line Items]
Change in Unrealized Gain (Loss) on Hedged Item in Fair Value Hedge	0	0
Interest Rate | Fair Value Hedged Item | Interest Credited To Policyholders’ Account Balances
Derivative Instruments, Gain (Loss) [Line Items]
Change in Unrealized Gain (Loss) on Hedged Item in Fair Value Hedge	(66)	86
Interest Rate | Fair Value Hedged Item | Policyholder Benefts
Derivative Instruments, Gain (Loss) [Line Items]
Change in Unrealized Gain (Loss) on Hedged Item in Fair Value Hedge	(46)
Interest Rate | Fair Value Hedged Item | AOCI
Derivative Instruments, Gain (Loss) [Line Items]
Change in Unrealized Gain (Loss) on Hedged Item in Fair Value Hedge	0	0
Interest Rate | Cash flow hedges | Realized Investment Gains (Losses) | Derivatives Designated as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	(1)	0
Interest Rate | Cash flow hedges | Net Investment Income | Derivatives Designated as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0
Interest Rate | Cash flow hedges | Other Income | Derivatives Designated as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0
Interest Rate | Cash flow hedges | Interest Expense | Derivatives Designated as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0
Interest Rate | Cash flow hedges | Interest Credited To Policyholders’ Account Balances | Derivatives Designated as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0
Interest Rate | Cash flow hedges | Policyholder Benefts | Derivatives Designated as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0
Interest Rate | Cash flow hedges | AOCI | Derivatives Designated as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	23	7
Currency | Realized Investment Gains (Losses) | Derivatives Not Qualifying as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	(39)	414
Currency | Net Investment Income | Derivatives Not Qualifying as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0
Currency | Other Income | Derivatives Not Qualifying as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	4	1
Currency | Interest Expense | Derivatives Not Qualifying as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0
Currency | Interest Credited To Policyholders’ Account Balances | Derivatives Not Qualifying as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0
Currency | Policyholder Benefts | Derivatives Not Qualifying as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0
Currency | AOCI | Derivatives Not Qualifying as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0
Currency | Fair value hedges | Realized Investment Gains (Losses) | Derivatives Designated as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	(1)	2
Currency | Fair value hedges | Net Investment Income | Derivatives Designated as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0
Currency | Fair value hedges | Other Income | Derivatives Designated as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0
Currency | Fair value hedges | Interest Expense | Derivatives Designated as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0
Currency | Fair value hedges | Interest Credited To Policyholders’ Account Balances | Derivatives Designated as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0
Currency | Fair value hedges | Policyholder Benefts | Derivatives Designated as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0
Currency | Fair value hedges | AOCI | Derivatives Designated as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0
Currency | Fair Value Hedged Item | Realized Investment Gains (Losses)
Derivative Instruments, Gain (Loss) [Line Items]
Change in Unrealized Gain (Loss) on Hedged Item in Fair Value Hedge	1	(2)
Currency | Fair Value Hedged Item | Net Investment Income
Derivative Instruments, Gain (Loss) [Line Items]
Change in Unrealized Gain (Loss) on Hedged Item in Fair Value Hedge	1	1
Currency | Fair Value Hedged Item | Other Income
Derivative Instruments, Gain (Loss) [Line Items]
Change in Unrealized Gain (Loss) on Hedged Item in Fair Value Hedge	0	0
Currency | Fair Value Hedged Item | Interest Expense
Derivative Instruments, Gain (Loss) [Line Items]
Change in Unrealized Gain (Loss) on Hedged Item in Fair Value Hedge	0	0
Currency | Fair Value Hedged Item | Interest Credited To Policyholders’ Account Balances
Derivative Instruments, Gain (Loss) [Line Items]
Change in Unrealized Gain (Loss) on Hedged Item in Fair Value Hedge	0	0
Currency | Fair Value Hedged Item | Policyholder Benefts
Derivative Instruments, Gain (Loss) [Line Items]
Change in Unrealized Gain (Loss) on Hedged Item in Fair Value Hedge	0
Currency | Fair Value Hedged Item | AOCI
Derivative Instruments, Gain (Loss) [Line Items]
Change in Unrealized Gain (Loss) on Hedged Item in Fair Value Hedge	0	0
Currency | Cash flow hedges | Realized Investment Gains (Losses) | Derivatives Designated as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	1	(2)
Currency | Cash flow hedges | Net Investment Income | Derivatives Designated as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0
Currency | Cash flow hedges | Other Income | Derivatives Designated as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0
Currency | Cash flow hedges | Interest Expense | Derivatives Designated as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0
Currency | Cash flow hedges | Interest Credited To Policyholders’ Account Balances | Derivatives Designated as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0
Currency | Cash flow hedges | Policyholder Benefts | Derivatives Designated as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0
Currency | Cash flow hedges | AOCI | Derivatives Designated as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	(9)	(8)
Currency | Net investment hedges | Realized Investment Gains (Losses) | Derivatives Designated as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	(2)
Currency | Net investment hedges | Net Investment Income | Derivatives Designated as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0
Currency | Net investment hedges | Other Income | Derivatives Designated as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0
Currency | Net investment hedges | Interest Expense | Derivatives Designated as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0
Currency | Net investment hedges | Interest Credited To Policyholders’ Account Balances | Derivatives Designated as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0
Currency | Net investment hedges | Policyholder Benefts | Derivatives Designated as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0
Currency | Net investment hedges | AOCI | Derivatives Designated as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	1	(2)
Currency/Interest Rate | Realized Investment Gains (Losses) | Derivatives Not Qualifying as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	184	(549)
Currency/Interest Rate | Net Investment Income | Derivatives Not Qualifying as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0
Currency/Interest Rate | Other Income | Derivatives Not Qualifying as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	(1)
Currency/Interest Rate | Interest Expense | Derivatives Not Qualifying as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0
Currency/Interest Rate | Interest Credited To Policyholders’ Account Balances | Derivatives Not Qualifying as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0
Currency/Interest Rate | Policyholder Benefts | Derivatives Not Qualifying as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0
Currency/Interest Rate | AOCI | Derivatives Not Qualifying as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0
Currency/Interest Rate | Cash flow hedges | Realized Investment Gains (Losses) | Derivatives Designated as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	(8)	(6)
Currency/Interest Rate | Cash flow hedges | Net Investment Income | Derivatives Designated as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	68	47
Currency/Interest Rate | Cash flow hedges | Other Income | Derivatives Designated as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	(45)	(91)
Currency/Interest Rate | Cash flow hedges | Interest Expense | Derivatives Designated as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0
Currency/Interest Rate | Cash flow hedges | Interest Credited To Policyholders’ Account Balances | Derivatives Designated as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0
Currency/Interest Rate | Cash flow hedges | Policyholder Benefts | Derivatives Designated as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0
Currency/Interest Rate | Cash flow hedges | AOCI | Derivatives Designated as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	(58)	(582)
Currency/Interest Rate | Net investment hedges | Realized Investment Gains (Losses) | Derivatives Designated as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0
Currency/Interest Rate | Net investment hedges | Net Investment Income | Derivatives Designated as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0
Currency/Interest Rate | Net investment hedges | Other Income | Derivatives Designated as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0
Currency/Interest Rate | Net investment hedges | Interest Expense | Derivatives Designated as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0
Currency/Interest Rate | Net investment hedges | Interest Credited To Policyholders’ Account Balances | Derivatives Designated as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0
Currency/Interest Rate | Net investment hedges | Policyholder Benefts | Derivatives Designated as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0
Currency/Interest Rate | Net investment hedges | AOCI | Derivatives Designated as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0
Credit | Realized Investment Gains (Losses) | Derivatives Not Qualifying as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	69	(5)
Credit | Net Investment Income | Derivatives Not Qualifying as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0
Credit | Other Income | Derivatives Not Qualifying as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0
Credit | Interest Expense | Derivatives Not Qualifying as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0
Credit | Interest Credited To Policyholders’ Account Balances | Derivatives Not Qualifying as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0
Credit | Policyholder Benefts | Derivatives Not Qualifying as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0
Credit | AOCI | Derivatives Not Qualifying as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0
Equity | Realized Investment Gains (Losses) | Derivatives Not Qualifying as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	(1,811)	10
Equity | Net Investment Income | Derivatives Not Qualifying as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0
Equity | Other Income | Derivatives Not Qualifying as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0
Equity | Interest Expense | Derivatives Not Qualifying as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0
Equity | Interest Credited To Policyholders’ Account Balances | Derivatives Not Qualifying as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0
Equity | Policyholder Benefts | Derivatives Not Qualifying as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0
Equity | AOCI | Derivatives Not Qualifying as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0
Other | Realized Investment Gains (Losses) | Derivatives Not Qualifying as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0
Other | Net Investment Income | Derivatives Not Qualifying as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0
Other | Other Income | Derivatives Not Qualifying as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0
Other | Interest Expense | Derivatives Not Qualifying as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0
Other | Interest Credited To Policyholders’ Account Balances | Derivatives Not Qualifying as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0
Other | Policyholder Benefts | Derivatives Not Qualifying as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0
Other | AOCI | Derivatives Not Qualifying as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0
Embedded Derivatives | Realized Investment Gains (Losses) | Derivatives Not Qualifying as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	(812)	1,979
Embedded Derivatives | Net Investment Income | Derivatives Not Qualifying as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0
Embedded Derivatives | Other Income | Derivatives Not Qualifying as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0
Embedded Derivatives | Interest Expense | Derivatives Not Qualifying as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0
Embedded Derivatives | Interest Credited To Policyholders’ Account Balances | Derivatives Not Qualifying as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0
Embedded Derivatives | Policyholder Benefts | Derivatives Not Qualifying as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0
Embedded Derivatives | AOCI | Derivatives Not Qualifying as Hedge Accounting Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	$ 0	$ 0

XML

Derivative Instruments (Current Period Cash Flow Hedges in AOCI (loss) before Taxes) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Jan. 01, 2019	[1]	Dec. 31, 2018
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items]
Cumulative Effect of New Accounting Principle in Period of Adoption		$ (14)		$ 9
Cash flow hedges in AOCI
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items]
Balance, beginning	$ 811
Amount recorded in AOCI	(29)
Amount reclassified from AOCI to income	(15)
Balance, ending	776
Interest Rate | Cash flow hedges in AOCI
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items]
Amount recorded in AOCI	22
Amount reclassified from AOCI to income	1
Currency | Cash flow hedges in AOCI
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items]
Amount recorded in AOCI	(8)
Amount reclassified from AOCI to income	(1)
Currency/Interest Rate | Cash flow hedges in AOCI
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items]
Amount recorded in AOCI	(43)
Amount reclassified from AOCI to income	$ (15)

[1] (1)Includes the impact from the adoption of ASUs 2017-08 and 2017-12. See Note 2.

XML

Fair Value of Assets and Liabilities (Balances of Assets and Liabilities Measured at Fair Value on a Recurring Basis) (Details) - USD ($) $ in Millions		Mar. 31, 2019	Dec. 31, 2018
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, available-for-sale	[1]	$ 365,928	$ 353,656
Assets supporting experience-rated contractholder liabilities	[1]	21,668	21,254
Fixed maturities, trading	[1]	3,435	3,243
Equity securities	[1]	6,778	6,238
Commercial mortgage and other loans	[1]	60,875	59,830
Other invested assets	[1]	14,840	14,526
Other assets	[1]	18,192	16,118
Separate account assets		297,244	279,136
TOTAL ASSETS		849,324	815,078
Future policy benefits		(277,085)	(273,846)
Other Liabilities	[1]	16,881	16,018
Total liabilities		793,874	766,047
Netting		9,247	9,331
Embedded Derivative, Fair Value of Embedded Derivative, Net Liability		10,123	8,959
Future policy benefits
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Embedded Derivative, Fair Value of Embedded Derivative, Net Liability		10,000	8,900
Embedded Derivative, Fair Value Of Embedded Derivative Gross Asset		700	700
Embedded Derivative, Fair Value Of Embedded Derivative Gross Liability		10,700	9,600
Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, available-for-sale		365,928	353,656
Assets supporting experience-rated contractholder liabilities		21,564	21,254
Fixed maturities, trading		3,435	3,243
Equity securities		6,641	6,100
Commercial mortgage and other loans		463	763
Other invested assets		1,390	1,409
Short-term investments		5,329	5,493
Cash equivalents		6,955	9,478
Other assets		48	25
Separate account assets		272,325	254,066
TOTAL ASSETS		684,078	655,487
Future policy benefits		(10,025)	(8,926)
Other Liabilities		582	191
Notes issued by consolidated VIEs		817	595
Total liabilities		11,424	9,712
Assets Netting		(9,247)	(9,331)
Liabilities Netting		(5,339)	(5,281)
Netting		3,908	4,050
Fair Value, Measurements, Recurring | Other invested assets
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets Netting		(9,247)	(9,331)
Fair Value, Measurements, Recurring | Other liabilities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities Netting		(5,339)	(5,281)
Fair Value, Measurements, Recurring | U.S. Treasury securities and obligations of U.S. government authorities and agencies
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, available-for-sale		32,811	30,594
Assets supporting experience-rated contractholder liabilities		258	381
Fair Value, Measurements, Recurring | Obligations of U.S. states and their political subdivisions
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, available-for-sale		10,848	10,493
Assets supporting experience-rated contractholder liabilities		203	196
Fair Value, Measurements, Recurring | Foreign government bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, available-for-sale		115,416	113,110
Assets supporting experience-rated contractholder liabilities		878	1,083
Fair Value, Measurements, Recurring | U.S. public corporate securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, available-for-sale		87,349	83,415
Fair Value, Measurements, Recurring | U.S. private corporate securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, available-for-sale		33,864	33,020
Fair Value, Measurements, Recurring | Foreign public corporate securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, available-for-sale		29,763	29,201
Fair Value, Measurements, Recurring | Foreign private corporate securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, available-for-sale		26,129	24,531
Fair Value, Measurements, Recurring | Corporate securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets supporting experience-rated contractholder liabilities		13,572	13,119
Fair Value, Measurements, Recurring | Asset-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, available-for-sale		12,689	12,973
Assets supporting experience-rated contractholder liabilities		1,651	1,665
Fair Value, Measurements, Recurring | Commercial mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, available-for-sale		14,059	13,315
Assets supporting experience-rated contractholder liabilities		2,297	2,324
Fair Value, Measurements, Recurring | Residential mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, available-for-sale		3,000	3,004
Assets supporting experience-rated contractholder liabilities		855	811
Fair Value, Measurements, Recurring | Equity securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets supporting experience-rated contractholder liabilities		1,586	1,460
Fair Value, Measurements, Recurring | All other
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets supporting experience-rated contractholder liabilities		264	215
Fair Value, Measurements, Recurring | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, available-for-sale		0	0
Assets supporting experience-rated contractholder liabilities		1,324	1,222
Fixed maturities, trading		0	0
Equity securities		5,188	4,819
Commercial mortgage and other loans		0	0
Other invested assets		3	23
Short-term investments		2,412	2,713
Cash equivalents		1,636	2,848
Other assets		0	0
Separate account assets		43,565	39,534
TOTAL ASSETS		54,128	51,159
Future policy benefits		0	0
Other Liabilities		35	18
Notes issued by consolidated VIEs		0	0
Total liabilities		35	18
Fair Value, Measurements, Recurring | Level 1 | U.S. Treasury securities and obligations of U.S. government authorities and agencies
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, available-for-sale		0	0
Assets supporting experience-rated contractholder liabilities		0	0
Fair Value, Measurements, Recurring | Level 1 | Obligations of U.S. states and their political subdivisions
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, available-for-sale		0	0
Assets supporting experience-rated contractholder liabilities		0	0
Fair Value, Measurements, Recurring | Level 1 | Foreign government bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, available-for-sale		0	0
Assets supporting experience-rated contractholder liabilities		0	0
Fair Value, Measurements, Recurring | Level 1 | U.S. public corporate securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, available-for-sale		0	0
Fair Value, Measurements, Recurring | Level 1 | U.S. private corporate securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, available-for-sale		0	0
Fair Value, Measurements, Recurring | Level 1 | Foreign public corporate securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, available-for-sale		0	0
Fair Value, Measurements, Recurring | Level 1 | Foreign private corporate securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, available-for-sale		0	0
Fair Value, Measurements, Recurring | Level 1 | Corporate securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets supporting experience-rated contractholder liabilities		0	0
Fair Value, Measurements, Recurring | Level 1 | Asset-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, available-for-sale		0	0
Assets supporting experience-rated contractholder liabilities		0	0
Fair Value, Measurements, Recurring | Level 1 | Commercial mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, available-for-sale		0	0
Assets supporting experience-rated contractholder liabilities		0	0
Fair Value, Measurements, Recurring | Level 1 | Residential mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, available-for-sale		0	0
Assets supporting experience-rated contractholder liabilities		0	0
Fair Value, Measurements, Recurring | Level 1 | Equity securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets supporting experience-rated contractholder liabilities		1,324	1,222
Fair Value, Measurements, Recurring | Level 1 | All other
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets supporting experience-rated contractholder liabilities		0	0
Fair Value, Measurements, Recurring | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, available-for-sale		361,026	349,421
Assets supporting experience-rated contractholder liabilities		19,558	19,213
Fixed maturities, trading		3,195	3,037
Equity securities		779	610
Commercial mortgage and other loans		463	763
Other invested assets		10,261	10,454
Short-term investments		2,749	2,691
Cash equivalents		5,318	6,553
Other assets		0	0
Separate account assets		227,125	212,998
TOTAL ASSETS		630,474	605,740
Future policy benefits		0	0
Other Liabilities		5,740	5,398
Notes issued by consolidated VIEs		0	0
Total liabilities		5,740	5,398
Fair Value, Measurements, Recurring | Level 2 | U.S. Treasury securities and obligations of U.S. government authorities and agencies
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, available-for-sale		32,723	30,513
Assets supporting experience-rated contractholder liabilities		258	381
Fair Value, Measurements, Recurring | Level 2 | Obligations of U.S. states and their political subdivisions
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, available-for-sale		10,844	10,488
Assets supporting experience-rated contractholder liabilities		203	196
Fair Value, Measurements, Recurring | Level 2 | Foreign government bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, available-for-sale		115,278	112,985
Assets supporting experience-rated contractholder liabilities		849	858
Fair Value, Measurements, Recurring | Level 2 | U.S. public corporate securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, available-for-sale		87,231	83,282
Fair Value, Measurements, Recurring | Level 2 | U.S. private corporate securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, available-for-sale		32,090	31,265
Fair Value, Measurements, Recurring | Level 2 | Foreign public corporate securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, available-for-sale		29,694	29,148
Fair Value, Measurements, Recurring | Level 2 | Foreign private corporate securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, available-for-sale		25,333	23,787
Fair Value, Measurements, Recurring | Level 2 | Corporate securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets supporting experience-rated contractholder liabilities		12,980	12,675
Fair Value, Measurements, Recurring | Level 2 | Asset-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, available-for-sale		11,796	11,726
Assets supporting experience-rated contractholder liabilities		1,591	1,516
Fair Value, Measurements, Recurring | Level 2 | Commercial mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, available-for-sale		13,114	13,302
Assets supporting experience-rated contractholder liabilities		2,297	2,324
Fair Value, Measurements, Recurring | Level 2 | Residential mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, available-for-sale		2,923	2,925
Assets supporting experience-rated contractholder liabilities		855	811
Fair Value, Measurements, Recurring | Level 2 | Equity securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets supporting experience-rated contractholder liabilities		261	237
Fair Value, Measurements, Recurring | Level 2 | All other
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets supporting experience-rated contractholder liabilities		264	215
Fair Value, Measurements, Recurring | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, available-for-sale		4,902	4,235
Assets supporting experience-rated contractholder liabilities		682	819
Fixed maturities, trading		240	206
Equity securities		674	671
Commercial mortgage and other loans		0	0
Other invested assets		373	263
Short-term investments		168	89
Cash equivalents		1	77
Other assets		48	25
Separate account assets		1,635	1,534
TOTAL ASSETS		8,723	7,919
Future policy benefits		(10,025)	(8,926)
Other Liabilities		146	56
Notes issued by consolidated VIEs		817	595
Total liabilities		10,988	9,577
Fair Value, Measurements, Recurring | Level 3 | U.S. Treasury securities and obligations of U.S. government authorities and agencies
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, available-for-sale		88	81
Assets supporting experience-rated contractholder liabilities		0	0
Fair Value, Measurements, Recurring | Level 3 | Obligations of U.S. states and their political subdivisions
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, available-for-sale		4	5
Assets supporting experience-rated contractholder liabilities		0	0
Fair Value, Measurements, Recurring | Level 3 | Foreign government bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, available-for-sale		138	125
Assets supporting experience-rated contractholder liabilities		29	225
Fair Value, Measurements, Recurring | Level 3 | U.S. public corporate securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, available-for-sale		118	133
Fair Value, Measurements, Recurring | Level 3 | U.S. private corporate securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, available-for-sale		1,774	1,755
Fair Value, Measurements, Recurring | Level 3 | Foreign public corporate securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, available-for-sale		69	53
Fair Value, Measurements, Recurring | Level 3 | Foreign private corporate securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, available-for-sale		796	744
Fair Value, Measurements, Recurring | Level 3 | Corporate securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets supporting experience-rated contractholder liabilities		592	444
Fair Value, Measurements, Recurring | Level 3 | Asset-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, available-for-sale		893	1,247
Assets supporting experience-rated contractholder liabilities		60	149
Fair Value, Measurements, Recurring | Level 3 | Commercial mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, available-for-sale		945	13
Assets supporting experience-rated contractholder liabilities		0	0
Fair Value, Measurements, Recurring | Level 3 | Residential mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, available-for-sale		77	79
Assets supporting experience-rated contractholder liabilities		0	0
Fair Value, Measurements, Recurring | Level 3 | Equity securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets supporting experience-rated contractholder liabilities		1	1
Fair Value, Measurements, Recurring | Level 3 | All other
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets supporting experience-rated contractholder liabilities		0	0
Prudential Netting Agreement | U.S. private corporate securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, available-for-sale		4,216	4,216
Prudential Netting Agreement | Fair Value, Measurements, Recurring | U.S. private corporate securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, available-for-sale		4,216	4,216
Other invested assets
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value investment measured at NAV per share		4,063	4,115
Separate account assets
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value investment measured at NAV per share		$ 24,919	$ 25,070

[1] See Note 4 for details of balances associated with variable interest entities.

XML

Fair Value of Assets and Liabilities (Quantitative Info for Level 3 Inputs) (Details) - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Mar. 31, 2019	Dec. 31, 2018
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items]
Future policy benefits	$ 277,085	$ 273,846
Fair Value, Measurements, Recurring
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items]
Future policy benefits	$ 10,025	8,926
Level 3 | Minimum
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items]
Fair Value Inputs, Policyholder Age	50 years
Level 3 | Minimum | Future policy benefits
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items]
Mortality rate	0.00%
Level 3 | Maximum
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items]
Fair Value Inputs, Policyholder Age	90 years
Level 3 | Fair Value, Measurements, Recurring
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items]
Future policy benefits	$ 10,025	$ 8,926
Level 3 | Internal | Minimum | Discounted cash flow | Future policy benefits
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items]
Lapse rate	1.00%	1.00%
Spread over LIBOR	0.12%	0.36%
Utilization rate	50.00%	50.00%
Withdrawal rate (greater than maximum range)	78.00%	78.00%
Mortality rate	0.00%	0.00%
Equity volatility curve	15.00%	18.00%
Level 3 | Internal | Minimum | Discounted cash flow | Corporate securities
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items]
Discount rate	0.49%	0.57%
Level 3 | Internal | Minimum | Discounted cash flow | Separate Accounts Commercial Mortgage Loan
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items]
Fair value inputs credit risk	1.06%	1.12%
Level 3 | Internal | Minimum | Market comparables | Corporate securities
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items]
EBITDA multiples	4.5	4.5
Level 3 | Internal | Minimum | Liquidation | Corporate securities
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items]
Liquidation value	12.35%	11.77%
Level 3 | Internal | Maximum | Discounted cash flow | Future policy benefits
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items]
Lapse rate	13.00%	13.00%
Spread over LIBOR	1.35%	1.60%
Utilization rate	97.00%	97.00%
Withdrawal rate (greater than maximum range)	100.00%	100.00%
Mortality rate	15.00%	15.00%
Equity volatility curve	22.00%	22.00%
Level 3 | Internal | Maximum | Discounted cash flow | Corporate securities
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items]
Discount rate	20.00%	20.00%
Level 3 | Internal | Maximum | Discounted cash flow | Separate Accounts Commercial Mortgage Loan
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items]
Fair value inputs credit risk	2.45%	2.55%
Level 3 | Internal | Maximum | Market comparables | Corporate securities
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items]
EBITDA multiples	9.2	8.5
Level 3 | Internal | Maximum | Liquidation | Corporate securities
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items]
Liquidation value	100.00%	94.00%
Level 3 | Internal | Weighted Average | Discounted cash flow | Corporate securities
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items]
Discount rate	8.23%	8.58%
Level 3 | Internal | Weighted Average | Discounted cash flow | Separate Accounts Commercial Mortgage Loan
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items]
Fair value inputs credit risk	1.22%	1.29%
Level 3 | Internal | Weighted Average | Market comparables | Corporate securities
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items]
EBITDA multiples	8.1	8.1
Level 3 | Internal | Weighted Average | Liquidation | Corporate securities
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items]
Liquidation value	62.59%	32.16%
Level 3 | Internal | Fair Value, Measurements, Recurring | Future policy benefits
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items]
Future policy benefits	$ 10,025	$ 8,926
Level 3 | Internal | Fair Value, Measurements, Recurring | Corporate securities
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items]
Corporate securities	1,362	1,392
Level 3 | Internal | Fair Value, Measurements, Recurring | Separate Accounts Commercial Mortgage Loan
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items]
Commercial mortgage loans	$ 822	$ 785

XML

Fair Value of Assets and Liabilities (Changes in Level 3 Assets and Liabilities) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Equity securities
Fair Value, Assets And Liabilities Measured On Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair Value, beginning of period	$ 671	$ 795
Purchases	23	7
Sales	(11)	(17)
Issuances	0	0
Settlements	(15)	(37)
Other	(2)	26
Transfers into Level 3	0	0
Transfers out of Level 3	0	(3)
Fair Value, end of period	674	785
Total gains (losses) (realized/unrealized):
Included in earnings	8	14
Unrealized gains (losses) for assets/liabilities still held:
Included in earnings	7	13
Equity securities | Realized investment gains (losses), net
Total gains (losses) (realized/unrealized):
Included in earnings	0	0
Unrealized gains (losses) for assets/liabilities still held:
Included in earnings	0	0
Equity securities | Other income
Total gains (losses) (realized/unrealized):
Included in earnings	8	14
Unrealized gains (losses) for assets/liabilities still held:
Included in earnings	7	13
Equity securities | Interest credited to policyholders’ account balances
Total gains (losses) (realized/unrealized):
Included in earnings	0	0
Unrealized gains (losses) for assets/liabilities still held:
Included in earnings	0	0
Equity securities | Included in other comprehensive income (loss)
Total gains (losses) (realized/unrealized):
Included in earnings	0	0
Equity securities | Net investment income
Total gains (losses) (realized/unrealized):
Included in earnings	0	0
Assets supporting experience-rated contractholder liabilities | Realized investment gains (losses), net
Total gains (losses) (realized/unrealized):
Included in earnings	0	0
Unrealized gains (losses) for assets/liabilities still held:
Included in earnings	0	0
Assets supporting experience-rated contractholder liabilities | Other income
Total gains (losses) (realized/unrealized):
Included in earnings	3	(2)
Unrealized gains (losses) for assets/liabilities still held:
Included in earnings	(5)	(3)
Assets supporting experience-rated contractholder liabilities | Interest credited to policyholders’ account balances
Total gains (losses) (realized/unrealized):
Included in earnings	0	0
Unrealized gains (losses) for assets/liabilities still held:
Included in earnings	0	0
Assets supporting experience-rated contractholder liabilities | Included in other comprehensive income (loss)
Total gains (losses) (realized/unrealized):
Included in earnings	0	0
Assets supporting experience-rated contractholder liabilities | Net investment income
Total gains (losses) (realized/unrealized):
Included in earnings	2	1
Assets supporting experience-rated contractholder liabilities | Foreign government bonds
Fair Value, Assets And Liabilities Measured On Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair Value, beginning of period	225	223
Purchases	0	0
Sales	0	0
Issuances	0	0
Settlements	0	0
Other	(196)	0
Transfers into Level 3	0	0
Transfers out of Level 3	0	0
Fair Value, end of period	29	220
Total gains (losses) (realized/unrealized):
Included in earnings	0	(3)
Unrealized gains (losses) for assets/liabilities still held:
Included in earnings	0	(4)
Assets supporting experience-rated contractholder liabilities | Corporate securities
Fair Value, Assets And Liabilities Measured On Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair Value, beginning of period	444	462
Purchases	27	24
Sales	0	0
Issuances	0	0
Settlements	(76)	(18)
Other	196	0
Transfers into Level 3	0	0
Transfers out of Level 3	(4)	(1)
Fair Value, end of period	592	468
Total gains (losses) (realized/unrealized):
Included in earnings	5	1
Unrealized gains (losses) for assets/liabilities still held:
Included in earnings	(5)	0
Assets supporting experience-rated contractholder liabilities | Structured securities
Fair Value, Assets And Liabilities Measured On Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair Value, beginning of period	149	722
Purchases	6	3
Sales	0	0
Issuances	0	0
Settlements	(21)	(13)
Other	0	0
Transfers into Level 3	0	28
Transfers out of Level 3	(74)	(76)
Fair Value, end of period	60	664
Total gains (losses) (realized/unrealized):
Included in earnings	0	0
Unrealized gains (losses) for assets/liabilities still held:
Included in earnings	0	0
Assets supporting experience-rated contractholder liabilities | Equity securities
Fair Value, Assets And Liabilities Measured On Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair Value, beginning of period	1	4
Purchases	0	0
Sales	0	0
Issuances	0	0
Settlements	0	0
Other	0	0
Transfers into Level 3	0	0
Transfers out of Level 3	0	0
Fair Value, end of period	1	5
Total gains (losses) (realized/unrealized):
Included in earnings	0	1
Unrealized gains (losses) for assets/liabilities still held:
Included in earnings	0	1
Assets supporting experience-rated contractholder liabilities | All other activity
Fair Value, Assets And Liabilities Measured On Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair Value, beginning of period	0	7
Purchases	0	19
Sales	0	0
Issuances	0	0
Settlements	0	(19)
Other	0	0
Transfers into Level 3	0	0
Transfers out of Level 3	0	0
Fair Value, end of period	0	7
Total gains (losses) (realized/unrealized):
Included in earnings	0	0
Unrealized gains (losses) for assets/liabilities still held:
Included in earnings	0	0
Other invested assets
Fair Value, Assets And Liabilities Measured On Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair Value, beginning of period	263	137
Purchases	157	1
Sales	0	0
Issuances	0	0
Settlements	(42)	0
Other	(4)	(2)
Transfers into Level 3	0	0
Transfers out of Level 3	0	0
Fair Value, end of period	373	144
Total gains (losses) (realized/unrealized):
Included in earnings	(1)	8
Unrealized gains (losses) for assets/liabilities still held:
Included in earnings	(1)	1
Other invested assets | Realized investment gains (losses), net
Total gains (losses) (realized/unrealized):
Included in earnings	(1)	8
Unrealized gains (losses) for assets/liabilities still held:
Included in earnings	(1)	1
Other invested assets | Other income
Total gains (losses) (realized/unrealized):
Included in earnings	0	0
Unrealized gains (losses) for assets/liabilities still held:
Included in earnings	0	0
Other invested assets | Interest credited to policyholders’ account balances
Total gains (losses) (realized/unrealized):
Included in earnings	0	0
Unrealized gains (losses) for assets/liabilities still held:
Included in earnings	0	0
Other invested assets | Included in other comprehensive income (loss)
Total gains (losses) (realized/unrealized):
Included in earnings	0	0
Other invested assets | Net investment income
Total gains (losses) (realized/unrealized):
Included in earnings	0	0
Short-term investments
Fair Value, Assets And Liabilities Measured On Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair Value, beginning of period	89	8
Purchases	153	14
Sales	0	0
Issuances	0	0
Settlements	(74)	(12)
Other	0	1
Transfers into Level 3	0	0
Transfers out of Level 3	0	0
Fair Value, end of period	168	10
Total gains (losses) (realized/unrealized):
Included in earnings	0	(1)
Unrealized gains (losses) for assets/liabilities still held:
Included in earnings	0	(1)
Short-term investments | Realized investment gains (losses), net
Total gains (losses) (realized/unrealized):
Included in earnings	0	(1)
Unrealized gains (losses) for assets/liabilities still held:
Included in earnings	0	(1)
Short-term investments | Other income
Total gains (losses) (realized/unrealized):
Included in earnings	0	0
Unrealized gains (losses) for assets/liabilities still held:
Included in earnings	0	0
Short-term investments | Interest credited to policyholders’ account balances
Total gains (losses) (realized/unrealized):
Included in earnings	0	0
Unrealized gains (losses) for assets/liabilities still held:
Included in earnings	0	0
Short-term investments | Included in other comprehensive income (loss)
Total gains (losses) (realized/unrealized):
Included in earnings	0	0
Short-term investments | Net investment income
Total gains (losses) (realized/unrealized):
Included in earnings	0	0
Cash equivalents
Fair Value, Assets And Liabilities Measured On Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair Value, beginning of period	77	0
Purchases	1	0
Sales	0	0
Issuances	0	0
Settlements	(77)	0
Other	0	0
Transfers into Level 3	0	0
Transfers out of Level 3	0	0
Fair Value, end of period	1	0
Total gains (losses) (realized/unrealized):
Included in earnings	0	0
Unrealized gains (losses) for assets/liabilities still held:
Included in earnings	0	0
Cash equivalents | Realized investment gains (losses), net
Total gains (losses) (realized/unrealized):
Included in earnings	0	0
Unrealized gains (losses) for assets/liabilities still held:
Included in earnings	0	0
Cash equivalents | Other income
Total gains (losses) (realized/unrealized):
Included in earnings	0	0
Unrealized gains (losses) for assets/liabilities still held:
Included in earnings	0	0
Cash equivalents | Interest credited to policyholders’ account balances
Total gains (losses) (realized/unrealized):
Included in earnings	0	0
Unrealized gains (losses) for assets/liabilities still held:
Included in earnings	0	0
Cash equivalents | Included in other comprehensive income (loss)
Total gains (losses) (realized/unrealized):
Included in earnings	0	0
Cash equivalents | Net investment income
Total gains (losses) (realized/unrealized):
Included in earnings	0	0
Other assets
Fair Value, Assets And Liabilities Measured On Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair Value, beginning of period	25	13
Purchases	9	0
Sales	0	0
Issuances	0	0
Settlements	0	0
Other	0	0
Transfers into Level 3	0	0
Transfers out of Level 3	0	0
Fair Value, end of period	48	0
Total gains (losses) (realized/unrealized):
Included in earnings	14	(13)
Unrealized gains (losses) for assets/liabilities still held:
Included in earnings	14	(13)
Other assets | Realized investment gains (losses), net
Total gains (losses) (realized/unrealized):
Included in earnings	14	(13)
Unrealized gains (losses) for assets/liabilities still held:
Included in earnings	14	(13)
Other assets | Other income
Total gains (losses) (realized/unrealized):
Included in earnings	0	0
Unrealized gains (losses) for assets/liabilities still held:
Included in earnings	0	0
Other assets | Interest credited to policyholders’ account balances
Total gains (losses) (realized/unrealized):
Included in earnings	0	0
Unrealized gains (losses) for assets/liabilities still held:
Included in earnings	0	0
Other assets | Included in other comprehensive income (loss)
Total gains (losses) (realized/unrealized):
Included in earnings	0	0
Other assets | Net investment income
Total gains (losses) (realized/unrealized):
Included in earnings	0	0
Separate accounts assets
Fair Value, Assets And Liabilities Measured On Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair Value, beginning of period	1,534	2,122
Purchases	89	237
Sales	(11)	(8)
Issuances	0	0
Settlements	(23)	(121)
Other	0	0
Transfers into Level 3	0	195
Transfers out of Level 3	(35)	(32)
Fair Value, end of period	1,635	2,360
Total gains (losses) (realized/unrealized):
Included in earnings	81	(33)
Unrealized gains (losses) for assets/liabilities still held:
Included in earnings	74	(26)
Separate accounts assets | Realized investment gains (losses), net
Total gains (losses) (realized/unrealized):
Included in earnings	0	0
Unrealized gains (losses) for assets/liabilities still held:
Included in earnings	0	0
Separate accounts assets | Other income
Total gains (losses) (realized/unrealized):
Included in earnings	0	0
Unrealized gains (losses) for assets/liabilities still held:
Included in earnings	0	0
Separate accounts assets | Interest credited to policyholders’ account balances
Total gains (losses) (realized/unrealized):
Included in earnings	80	(33)
Unrealized gains (losses) for assets/liabilities still held:
Included in earnings	74	(26)
Separate accounts assets | Included in other comprehensive income (loss)
Total gains (losses) (realized/unrealized):
Included in earnings	0	0
Separate accounts assets | Net investment income
Total gains (losses) (realized/unrealized):
Included in earnings	1	0
Future policy benefits
Fair Value, Assets And Liabilities Measured On Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair Value, beginning of period	(8,926)	(8,720)
Purchases	0	0
Sales	0	0
Issuances	(290)	(287)
Settlements	0	0
Other	1	0
Transfers into Level 3	0	0
Transfers out of Level 3	0	0
Fair Value, end of period	(10,025)	(6,981)
Total gains (losses) (realized/unrealized):
Included in earnings	(810)	2,026
Unrealized gains (losses) for assets/liabilities still held:
Included in earnings	(879)	1,937
Future policy benefits | Realized investment gains (losses), net
Total gains (losses) (realized/unrealized):
Included in earnings	(810)	2,026
Unrealized gains (losses) for assets/liabilities still held:
Included in earnings	(879)	1,937
Future policy benefits | Other income
Total gains (losses) (realized/unrealized):
Included in earnings	0	0
Unrealized gains (losses) for assets/liabilities still held:
Included in earnings	0	0
Future policy benefits | Interest credited to policyholders’ account balances
Total gains (losses) (realized/unrealized):
Included in earnings	0	0
Unrealized gains (losses) for assets/liabilities still held:
Included in earnings	0	0
Future policy benefits | Included in other comprehensive income (loss)
Total gains (losses) (realized/unrealized):
Included in earnings	0	0
Future policy benefits | Net investment income
Total gains (losses) (realized/unrealized):
Included in earnings	0	0
Other liabilities
Fair Value, Assets And Liabilities Measured On Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair Value, beginning of period	(56)	(50)
Purchases	0	10
Sales	0	0
Issuances	(30)	0
Settlements	(6)	2
Other	(3)	1
Transfers into Level 3	0	0
Transfers out of Level 3	0	0
Fair Value, end of period	(146)	(56)
Total gains (losses) (realized/unrealized):
Included in earnings	(51)	(19)
Unrealized gains (losses) for assets/liabilities still held:
Included in earnings	(51)	(13)
Other liabilities | Realized investment gains (losses), net
Total gains (losses) (realized/unrealized):
Included in earnings	(51)	(19)
Unrealized gains (losses) for assets/liabilities still held:
Included in earnings	(51)	(13)
Other liabilities | Other income
Total gains (losses) (realized/unrealized):
Included in earnings	0	0
Unrealized gains (losses) for assets/liabilities still held:
Included in earnings	0	0
Other liabilities | Interest credited to policyholders’ account balances
Total gains (losses) (realized/unrealized):
Included in earnings	0	0
Unrealized gains (losses) for assets/liabilities still held:
Included in earnings	0	0
Other liabilities | Included in other comprehensive income (loss)
Total gains (losses) (realized/unrealized):
Included in earnings	0	0
Other liabilities | Net investment income
Total gains (losses) (realized/unrealized):
Included in earnings	0	0
Notes Issued by Consolidated VIEs
Fair Value, Assets And Liabilities Measured On Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair Value, beginning of period	(595)	(1,196)
Purchases	0	0
Sales	0	0
Issuances	(858)	0
Settlements	638	0
Other	0	587
Transfers into Level 3	0	0
Transfers out of Level 3	0	0
Fair Value, end of period	(817)	(612)
Total gains (losses) (realized/unrealized):
Included in earnings	(2)	(3)
Unrealized gains (losses) for assets/liabilities still held:
Included in earnings	(2)	(3)
Notes Issued by Consolidated VIEs | Realized investment gains (losses), net
Total gains (losses) (realized/unrealized):
Included in earnings	(2)	(3)
Unrealized gains (losses) for assets/liabilities still held:
Included in earnings	(2)	(3)
Notes Issued by Consolidated VIEs | Other income
Total gains (losses) (realized/unrealized):
Included in earnings	0	0
Unrealized gains (losses) for assets/liabilities still held:
Included in earnings	0	0
Notes Issued by Consolidated VIEs | Interest credited to policyholders’ account balances
Total gains (losses) (realized/unrealized):
Included in earnings	0	0
Unrealized gains (losses) for assets/liabilities still held:
Included in earnings	0	0
Notes Issued by Consolidated VIEs | Included in other comprehensive income (loss)
Total gains (losses) (realized/unrealized):
Included in earnings	0	0
Notes Issued by Consolidated VIEs | Net investment income
Total gains (losses) (realized/unrealized):
Included in earnings	0	0
Available-for-sale | Fixed maturities | Realized investment gains (losses), net
Total gains (losses) (realized/unrealized):
Included in earnings	(2)	6
Unrealized gains (losses) for assets/liabilities still held:
Included in earnings	(21)	(9)
Available-for-sale | Fixed maturities | Other income
Total gains (losses) (realized/unrealized):
Included in earnings	0	0
Unrealized gains (losses) for assets/liabilities still held:
Included in earnings	0	0
Available-for-sale | Fixed maturities | Interest credited to policyholders’ account balances
Total gains (losses) (realized/unrealized):
Included in earnings	0	0
Unrealized gains (losses) for assets/liabilities still held:
Included in earnings	0	0
Available-for-sale | Fixed maturities | Included in other comprehensive income (loss)
Total gains (losses) (realized/unrealized):
Included in earnings	22	(14)
Available-for-sale | Fixed maturities | Net investment income
Total gains (losses) (realized/unrealized):
Included in earnings	4	4
Available-for-sale | Fixed maturities | U.S. government
Fair Value, Assets And Liabilities Measured On Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair Value, beginning of period	81	52
Purchases	7	7
Sales	0	0
Issuances	0	0
Settlements	0	0
Other	0	0
Transfers into Level 3	0	0
Transfers out of Level 3	0	0
Fair Value, end of period	88	59
Total gains (losses) (realized/unrealized):
Included in earnings	0	0
Unrealized gains (losses) for assets/liabilities still held:
Included in earnings	0	0
Available-for-sale | Fixed maturities | U.S. states
Fair Value, Assets And Liabilities Measured On Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair Value, beginning of period	5	5
Purchases	0	0
Sales	0	0
Issuances	0	0
Settlements	(1)	0
Other	0	0
Transfers into Level 3	0	0
Transfers out of Level 3	0	0
Fair Value, end of period	4	5
Total gains (losses) (realized/unrealized):
Included in earnings	0	0
Unrealized gains (losses) for assets/liabilities still held:
Included in earnings	0	0
Available-for-sale | Fixed maturities | Foreign government bonds
Fair Value, Assets And Liabilities Measured On Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair Value, beginning of period	125	148
Purchases	0	0
Sales	0	0
Issuances	0	0
Settlements	0	0
Other	1	1
Transfers into Level 3	9	5
Transfers out of Level 3	0	(26)
Fair Value, end of period	138	128
Total gains (losses) (realized/unrealized):
Included in earnings	3	0
Unrealized gains (losses) for assets/liabilities still held:
Included in earnings	0	0
Available-for-sale | Fixed maturities | Corporate securities
Fair Value, Assets And Liabilities Measured On Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair Value, beginning of period	2,685	2,776
Purchases	319	118
Sales	(12)	(1)
Issuances	0	0
Settlements	(379)	(169)
Other	(2)	12
Transfers into Level 3	164	60
Transfers out of Level 3	(22)	(72)
Fair Value, end of period	2,757	2,735
Total gains (losses) (realized/unrealized):
Included in earnings	4	11
Unrealized gains (losses) for assets/liabilities still held:
Included in earnings	(21)	(9)
Available-for-sale | Fixed maturities | Structured securities
Fair Value, Assets And Liabilities Measured On Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair Value, beginning of period	1,339	6,715
Purchases	318	1,548
Sales	0	(66)
Issuances	0	0
Settlements	(231)	(649)
Other	(2)	30
Transfers into Level 3	733	1,071
Transfers out of Level 3	(259)	(1,735)
Fair Value, end of period	1,915	6,899
Total gains (losses) (realized/unrealized):
Included in earnings	17	(15)
Unrealized gains (losses) for assets/liabilities still held:
Included in earnings	0	0
Trading | Fixed maturities
Fair Value, Assets And Liabilities Measured On Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair Value, beginning of period	206	156
Purchases	38	40
Sales	(1)	(4)
Issuances	0	0
Settlements	0	0
Other	2	5
Transfers into Level 3	0	11
Transfers out of Level 3	(1)	(2)
Fair Value, end of period	240	204
Total gains (losses) (realized/unrealized):
Included in earnings	(4)	(2)
Unrealized gains (losses) for assets/liabilities still held:
Included in earnings	0	4
Trading | Fixed maturities | Realized investment gains (losses), net
Total gains (losses) (realized/unrealized):
Included in earnings	0	0
Unrealized gains (losses) for assets/liabilities still held:
Included in earnings	0	0
Trading | Fixed maturities | Other income
Total gains (losses) (realized/unrealized):
Included in earnings	(4)	(2)
Unrealized gains (losses) for assets/liabilities still held:
Included in earnings	0	4
Trading | Fixed maturities | Interest credited to policyholders’ account balances
Total gains (losses) (realized/unrealized):
Included in earnings	0	0
Unrealized gains (losses) for assets/liabilities still held:
Included in earnings	0	0
Trading | Fixed maturities | Included in other comprehensive income (loss)
Total gains (losses) (realized/unrealized):
Included in earnings	0	0
Trading | Fixed maturities | Net investment income
Total gains (losses) (realized/unrealized):
Included in earnings	$ 0	$ 0

XML

Fair Value of Assets and Liabilities (Derivative Assets and Liabilities Measured at Fair Value on a Recurring Basis) (Details) - USD ($) $ in Millions	Mar. 31, 2019	Dec. 31, 2018
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total derivative assets	$ 1,018	$ 1,148
Netting	(9,247)	(9,331)
Total derivative liabilities	433	127
Netting	(5,339)	(5,281)
Interest Rate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total derivative assets	7,311	6,366
Total derivative liabilities	3,712	3,820
Currency
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total derivative assets	263	273
Total derivative liabilities	193	140
Credit
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total derivative assets	20	33
Total derivative liabilities	5	23
Currency/Interest Rate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total derivative assets	2,159	2,292
Total derivative liabilities	703	778
Equity
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total derivative assets	512	1,515
Total derivative liabilities	1,159	647
Other
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total derivative assets	0	0
Total derivative liabilities	0	0
Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total derivative assets	2	23
Total derivative liabilities	30	9
Level 1 | Interest Rate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total derivative assets	1	23
Total derivative liabilities	23	2
Level 1 | Currency
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total derivative assets	0	0
Total derivative liabilities	0	0
Level 1 | Credit
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total derivative assets	0	0
Total derivative liabilities	0	0
Level 1 | Currency/Interest Rate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total derivative assets	0	0
Total derivative liabilities	0	0
Level 1 | Equity
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total derivative assets	1	0
Total derivative liabilities	7	7
Level 1 | Other
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total derivative assets	0	0
Total derivative liabilities	0	0
Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total derivative assets	10,262	10,454
Total derivative liabilities	5,742	5,399
Level 2 | Interest Rate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total derivative assets	7,309	6,341
Total derivative liabilities	3,689	3,818
Level 2 | Currency
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total derivative assets	263	273
Total derivative liabilities	193	140
Level 2 | Credit
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total derivative assets	20	33
Total derivative liabilities	5	23
Level 2 | Currency/Interest Rate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total derivative assets	2,159	2,292
Total derivative liabilities	703	778
Level 2 | Equity
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total derivative assets	511	1,515
Total derivative liabilities	1,152	640
Level 2 | Other
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total derivative assets	0	0
Total derivative liabilities	0	0
Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total derivative assets	1	2
Total derivative liabilities	0	0
Level 3 | Interest Rate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total derivative assets	1	2
Total derivative liabilities	0	0
Level 3 | Currency
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total derivative assets	0	0
Total derivative liabilities	0	0
Level 3 | Credit
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total derivative assets	0	0
Total derivative liabilities	0	0
Level 3 | Currency/Interest Rate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total derivative assets	0	0
Total derivative liabilities	0	0
Level 3 | Equity
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total derivative assets	0	0
Total derivative liabilities	0	0
Level 3 | Other
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total derivative assets	0	0
Total derivative liabilities	0	0
Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Netting	$ (3,908)	$ (4,050)

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Fair Value of Assets and Liabilities (Changes in Level 3 Derivative Assets and Liabilities) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Net Derivative- Equity
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward]
Fair Value, beginning of period	$ 0	$ 10
Total gains (losses) (realized/unrealized):
Purchases	0	0
Sales	0	0
Issuances	0	0
Settlements	0	0
Other	0	(5)
Transfers into Level 3	0	1
Transfers out of Level 3	0	0
Fair Value, end of period	0	6
Net Derivative- Interest Rate
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward]
Fair Value, beginning of period	2	(3)
Total gains (losses) (realized/unrealized):
Purchases	0	0
Sales	0	0
Issuances	0	0
Settlements	0	0
Other	0	0
Transfers into Level 3	0	0
Transfers out of Level 3	0	0
Fair Value, end of period	1	6
Realized investment gains (losses), net | Net Derivative- Equity
Total gains (losses) (realized/unrealized):
Included in earnings	0	0
Unrealized Gain (Loss) for assets still held
Included in earnings	0	1
Realized investment gains (losses), net | Net Derivative- Interest Rate
Total gains (losses) (realized/unrealized):
Included in earnings	(1)	9
Unrealized Gain (Loss) for assets still held
Included in earnings	$ (1)	$ 8

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Fair Value of Assets and Liabilities (Nonrecurring Fair Value Measurements) (Details) - Fair Value, Measurements, Nonrecurring - Level 3 - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018
Commercial mortgage loans
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Realized investment gains (losses) net	$ 0	$ 0
Carrying value after measurement as of period end	14		$ 47
Mortgage servicing rights
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Realized investment gains (losses) net	(1)	$ 2
Carrying value after measurement as of period end	$ 70		$ 73

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Fair Value of Assets and Liabilities (Changes in Fair Values Recorded in Earnings for FVO Assets-Liabilities) (Details) - USD ($) $ in Millions		3 Months Ended
		Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018
Fair Value, Option, Quantitative Disclosures [Line Items]
Commercial mortgage and other loans	[1]	$ 60,875		$ 59,830
Other assets	[1]	18,192		16,118
Commercial mortgage and other loans
Fair Value, Option, Quantitative Disclosures [Line Items]
Interest income		6	$ 2
Fair value option loans in non-accrual status		0
Fair value option loans in more than 90 days past due and still accruing		0
Notes Issued by Consolidated VIEs
Fair Value, Option, Quantitative Disclosures [Line Items]
Changes in fair value		2	3
Interest expense		9	$ 9
Fair value option
Fair Value, Option, Quantitative Disclosures [Line Items]
Commercial mortgage and other loans		463		763
Other assets		10		10
Notes issued by consolidated VIEs		817		595
Fair value option, aggregate contractual principal
Fair Value, Option, Quantitative Disclosures [Line Items]
Commercial mortgage and other loans		457		754
Notes issued by consolidated VIEs		$ 857		$ 632

[1] See Note 4 for details of balances associated with variable interest entities.

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Fair Value of Assets and Liabilities (Financial Instruments where Carrying Amounts and Fair Values May Differ) (Details) - USD ($) $ in Millions		Mar. 31, 2019		Dec. 31, 2018		Mar. 31, 2018
Assets:
Fixed maturities, held-to-maturity	[1]	$ 1,982		$ 2,013
Assets supporting experience-rated contractholder liabilities	[1]	21,668		21,254
Commercial mortgage and other loans	[1]	60,875		59,830
Policy loans		11,986		12,016
Other invested assets	[1]	14,840		14,526
Short-term Investments		6,911		6,469
Cash and cash equivalents		14,699	[1]	15,353	[1]	$ 15,676
Accrued investment income	[1]	3,233		3,318
Liabilities:
Securities sold under agreements to repurchase		9,873		9,950
Cash collateral for loaned securities		4,093		3,929
Short-term debt		2,549		2,451
Long-term debt		18,309		17,378
Fair Value
Assets:
Fixed maturities, held-to-maturity		2,365		2,372
Assets supporting experience-rated contractholder liabilities		104		0
Commercial mortgage and other loans		61,620		59,215
Policy loans		11,986		12,016
Other invested assets		36		40
Short-term Investments		1,582		976
Cash and cash equivalents		7,744		5,875
Accrued investment income		3,233		3,318
Other assets		3,695		2,813
Total assets		92,365		86,625
Liabilities:
Policyholders’ account balances—investment contracts		100,733		98,428
Securities sold under agreements to repurchase		9,873		9,950
Cash collateral for loaned securities		4,093		3,929
Short-term debt		2,633		2,512
Long-term debt		19,825		17,972
Notes issued by consolidated VIEs		408		360
Other liabilities		6,845		6,848
Separate account liabilities—investment contracts		97,624		92,936
Total liabilities		242,034		232,935
Carrying Amount
Assets:
Fixed maturities, held-to-maturity		1,982		2,013
Assets supporting experience-rated contractholder liabilities		104		0
Commercial mortgage and other loans		60,412		59,067
Policy loans		11,986		12,016
Other invested assets		36		40
Short-term Investments		1,582		976
Cash and cash equivalents		7,744		5,875
Accrued investment income		3,233		3,318
Other assets		3,693		2,813
Total assets		90,772		86,118
Liabilities:
Policyholders’ account balances—investment contracts		100,903		99,829
Securities sold under agreements to repurchase		9,873		9,950
Cash collateral for loaned securities		4,093		3,929
Short-term debt		2,549		2,451
Long-term debt		18,309		17,378
Notes issued by consolidated VIEs		408		360
Other liabilities		6,845		6,848
Separate account liabilities—investment contracts		97,624		92,936
Total liabilities		240,604		233,681
Level 1 | Fair Value
Assets:
Fixed maturities, held-to-maturity		0		0
Assets supporting experience-rated contractholder liabilities		52		0
Commercial mortgage and other loans		0		0
Policy loans		0		0
Other invested assets		0		0
Short-term Investments		1,553		951
Cash and cash equivalents		6,574		4,871
Accrued investment income		0		0
Other assets		146		141
Total assets		8,325		5,963
Liabilities:
Policyholders’ account balances—investment contracts		0		0
Securities sold under agreements to repurchase		0		0
Cash collateral for loaned securities		0		0
Short-term debt		0		0
Long-term debt		1,887		1,734
Notes issued by consolidated VIEs		0		0
Other liabilities		0		0
Separate account liabilities—investment contracts		0		0
Total liabilities		1,887		1,734
Level 2 | Fair Value
Assets:
Fixed maturities, held-to-maturity		1,468		1,468
Assets supporting experience-rated contractholder liabilities		52		0
Commercial mortgage and other loans		108		109
Policy loans		0		0
Other invested assets		36		40
Short-term Investments		29		25
Cash and cash equivalents		1,170		1,004
Accrued investment income		3,233		3,318
Other assets		2,994		2,189
Total assets		9,090		8,153
Liabilities:
Policyholders’ account balances—investment contracts		31,903		31,422
Securities sold under agreements to repurchase		9,873		9,950
Cash collateral for loaned securities		4,093		3,929
Short-term debt		1,862		1,854
Long-term debt		16,803		15,057
Notes issued by consolidated VIEs		0		0
Other liabilities		6,290		6,338
Separate account liabilities—investment contracts		71,642		66,914
Total liabilities		142,466		135,464
Level 3 | Fair Value
Assets:
Fixed maturities, held-to-maturity		897		904
Assets supporting experience-rated contractholder liabilities		0		0
Commercial mortgage and other loans		61,512		59,106
Policy loans		11,986		12,016
Other invested assets		0		0
Short-term Investments		0		0
Cash and cash equivalents		0		0
Accrued investment income		0		0
Other assets		555		483
Total assets		74,950		72,509
Liabilities:
Policyholders’ account balances—investment contracts		68,830		67,006
Securities sold under agreements to repurchase		0		0
Cash collateral for loaned securities		0		0
Short-term debt		771		658
Long-term debt		1,135		1,181
Notes issued by consolidated VIEs		408		360
Other liabilities		555		510
Separate account liabilities—investment contracts		25,982		26,022
Total liabilities		97,681		95,737
Prudential Netting Agreement | Fair Value
Assets:
Fixed maturities, held-to-maturity		4,930		4,879
Liabilities:
Long-term debt		9,146		9,095
Prudential Netting Agreement | Carrying Amount
Assets:
Fixed maturities, held-to-maturity		4,879		4,879
Liabilities:
Long-term debt		$ 9,095		$ 9,095

[1] See Note 4 for details of balances associated with variable interest entities.

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Leases Narrative (Details) $ in Millions	3 Months Ended
	Mar. 31, 2019 USD ($)
Lessee, Lease, Description [Line Items]
Leases with options to extend	18 years
Leases with options to terminate	8 years
Operating Lease, Cost	$ 34
Short-term Lease, Cost	24
Income and Expenses, Lessor [Abstract]
Lease Income	$ 50
Less than
Lessee, Lease, Description [Line Items]
Remaining lease terms	1 year
Maximum
Lessee, Lease, Description [Line Items]
Remaining lease terms	30 years

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Lessee Right-of Use Assets and Operating Lease Liabilities (Details) $ in Millions	Mar. 31, 2019 USD ($)
Operating Leases, Lease Income [Abstract]
Right-of-use assets	$ 527
Lease liabilities	$ 551
Weighted average remaining lease term	6 years
Weighted average discount rate	2.73%

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Maturities of Operating Lease Liabilities (Details) $ in Millions	Mar. 31, 2019 USD ($)
Leases [Abstract]
2019 (April - December)	$ 117
2020	125
2021	103
2022	77
2023	58
Thereafter	128
Total lease payments	608
Less imputed interest	(57)
Total	$ 551

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Closed Block (Narrative) (Details) - USD ($) $ in Millions	Mar. 31, 2019	Dec. 31, 2018
Policyholders’ dividend obligation	$ 4,355	$ 3,150
Accumulated Distributions in Excess of Net Income [Member]
Policyholders’ dividend obligation	2,375	2,252
Accumulated net unrealized investment gains
Policyholders’ dividend obligation	$ 1,980	$ 899

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Closed Block (Closed Block Liabilities and Assets Designated to Closed Block; Maximum Future Earnings to be Recognized) (Details) - USD ($) $ in Millions	Mar. 31, 2019	Dec. 31, 2018
Closed Block liabilities
Future policy benefits	$ 48,044	$ 48,282
Policyholders’ dividends payable	838	812
Policyholders’ dividend obligation	4,355	3,150
Policyholders’ account balances	5,036	5,061
Other Closed Block liabilities	4,147	3,955
Total Closed Block liabilities	62,420	61,260
Closed Block assets
Fixed maturities, available-for-sale, at fair value	39,499	38,538
Fixed maturities, trading, at fair value	185	195	[1]
Equity securities, at fair value	2,002	1,784	[1]
Commercial mortgage and other loans	8,623	8,782
Policy loans	4,365	4,410
Other invested assets	3,296	3,316	[1]
Short-term investments	548	477
Total investments	58,518	57,502
Cash and cash equivalents	549	467
Accrued investment income	475	466
Other Closed Block assets	175	105
Total Closed Block assets	59,717	58,540
Excess of reported Closed Block liabilities over Closed Block assets	2,703	2,720
Portion of above representing accumulated other comprehensive income (loss):
Net unrealized investment gains (losses)	1,938	857
Allocated to policyholder dividend obligation	(1,980)	(899)
Future earnings to be recognized from Closed Block assets and Closed Block liabilities	$ 2,661	$ 2,678

[1]

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Closed Block (Information Regarding Policyholder Dividend Obligation) (Details) $ in Millions	3 Months Ended
	Mar. 31, 2019 USD ($)
Movement in Closed Block Dividend Obligation [Roll Forward]
Balance, beginning	$ 3,150
Impact from earnings allocable to policyholder dividend obligation	123
Change in net unrealized investment gains (losses) allocated to policyholder dividend obligation	1,082
Balance, ending	$ 4,355

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Closed Block (Closed Block Revenues and Benefits and Expenses) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Revenues
Premiums	$ 527	$ 551
Net investment income	565	597
Realized investment gains (losses), net	56	(2)
Other income (loss)	228	21
Total Closed Block revenues	1,376	1,167
Benefits and Expenses
Policyholders’ benefits	709	727
Interest credited to policyholders’ account balances	32	33
Dividends to policyholders	553	308
General and administrative expenses	89	93
Total Closed Block benefits and expenses	1,383	1,161
Closed Block revenues, net of Closed Block benefits and expenses, before income taxes	(7)	6
Income tax expense (benefit)	(24)	(9)
Closed Block revenues, net of Closed Block benefits and expenses and income taxes	$ 17	$ 15

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Income Taxes (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Change in Accounting Estimate [Line Items]
Total income tax expense (benefit)	$ 232	$ 352
Effective Income Tax Rate, Percent	20.40%	20.80%
Federal Statutory Income Tax Rate, Percent	21.00%
U.S. Tax Cut and Jobs Act of 2017
Change in Accounting Estimate [Line Items]
Total provision for income tax expense (benefit)	$ (20)

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Short-Term and Long-Term Debt (Short-Term Debt) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018
Short-term Debt [Line Items]
Short-term debt	$ 2,549		$ 2,451
Weighted average interest rate on outstanding short-term debt	2.22%		1.90%
Commercial paper
Short-term Debt [Line Items]
Short-term debt	$ 739		$ 742
Weighted average maturity of outstanding commercial paper, in days	15 days	12 days
Long-term debt
Short-term Debt [Line Items]
Short-term debt	$ 1,740		1,656
Borrowings due overnight | Commercial paper
Short-term Debt [Line Items]
Short-term debt	327		301
Daily average outstanding | Commercial paper
Short-term Debt [Line Items]
Short-term debt	1,624		1,554
Prudential Financial
Short-term Debt [Line Items]
Short-term debt	1,125		1,115
Prudential Financial | Commercial paper
Short-term Debt [Line Items]
Short-term debt	25		15
Prudential Funding, LLC | Commercial paper
Short-term Debt [Line Items]
Short-term debt	714		727
Bridge Loan
Short-term Debt [Line Items]
Short-term debt	53		53
Construction Loan Payable
Short-term Debt [Line Items]
Short-term debt	141		57
Line of Credit
Short-term Debt [Line Items]
Short-term debt	17		0
Senior notes
Short-term Debt [Line Items]
Short-term debt	$ 1,100		$ 1,100

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Short-Term and Long-Term Debt (Narrative) (Details) - USD ($)		3 Months Ended
		Mar. 31, 2019	Dec. 31, 2018
Debt Instrument [Line Items]
Debt, Current		$ 2,549,000,000	$ 2,451,000,000
Amounts drawn on credit facilities		0
Other invested assets	[1]	14,840,000,000	14,526,000,000
Senior notes
Debt Instrument [Line Items]
Debt, Current		1,100,000,000	1,100,000,000
Debt Instrument, Face Amount		10,890,000,000
Long-term debt
Debt Instrument [Line Items]
Debt, Current		1,740,000,000	1,656,000,000
Medium-term Notes | Senior notes
Debt Instrument [Line Items]
Increase (decrease) of debt		1,000,000,000
Debt Instrument, Face Amount		$ 1,000,000,000
Debt Instrument, Interest Rate, Stated Percentage		4.35%
Real estate investment property | Mortgage | Senior notes
Debt Instrument [Line Items]
Increase (decrease) of debt		$ 28,000,000
Foreign exchange fluctuations of debt		7,000,000
Debt Instrument, Face Amount		21,000,000
Real estate investment property | Mortgage Debt
Debt Instrument [Line Items]
Other invested assets		$ 804,000,000	$ 776,000,000

[1] See Note 4 for details of balances associated with variable interest entities.

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Short-Term and Long-Term Debt (Long-Term Debt) (Details) - USD ($) $ in Millions	Mar. 31, 2019	Dec. 31, 2018
Debt Instrument [Line Items]
Long-term debt	$ 18,309	$ 17,378
Surplus notes | Fixed-rate notes:
Debt Instrument [Line Items]
Long-term debt	342	341
Surplus notes subject to set-off arrangements | Fixed-rate notes:
Debt Instrument [Line Items]
Long-term debt	6,895	6,895
Surplus notes subject to set-off arrangements | Floating-rate notes:
Debt Instrument [Line Items]
Long-term debt	2,200	2,200
Senior notes | Fixed-rate notes:
Debt Instrument [Line Items]
Long-term debt	9,760	8,774
Senior notes | Floating-rate notes:
Debt Instrument [Line Items]
Long-term debt	29	29
Mortgage | Fixed-rate notes:
Debt Instrument [Line Items]
Long-term debt	239	237
Mortgage | Floating-rate notes:
Debt Instrument [Line Items]
Long-term debt	371	430
Junior subordinated notes
Debt Instrument [Line Items]
Long-term debt	7,568	7,568
Subtotal
Debt Instrument [Line Items]
Long-term debt	27,404	26,473
Less: assets under set-off arrangements
Debt Instrument [Line Items]
Long-term debt	9,095	9,095
Debt denominated in foreign currency | Mortgage | Fixed-rate notes:
Debt Instrument [Line Items]
Long-term debt	103	101
Debt denominated in foreign currency | Mortgage | Floating-rate notes:
Debt Instrument [Line Items]
Long-term debt	211	206
Prudential Financial
Debt Instrument [Line Items]
Long-term debt	17,128	$ 16,141
Prudential Financial | Junior subordinated notes
Debt Instrument [Line Items]
Long-term debt	7,512
Subsidiaries | Junior subordinated notes
Debt Instrument [Line Items]
Long-term debt	$ 56

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Employee Benefit Plans (Narrative) (Details) - Other Postretirement Benefits	3 Months Ended	9 Months Ended
	Mar. 31, 2019	Sep. 30, 2018
Minimum
Defined Benefit Plan Disclosure [Line Items]
Deferred Compensation Arrangement with Individual, Requisite Age		50 years
Deferred Compensation Arrangement with Individual, Requisite Service Period	10 years
Maximum
Defined Benefit Plan Disclosure [Line Items]
Deferred Compensation Arrangement with Individual, Requisite Age		55 years
Deferred Compensation Arrangement with Individual, Requisite Service Period	20 years

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Employee Benefit Plans (Components of Net Periodic Benefit Cost Included in General and Administrative Expenses) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Pension Benefits
Defined Benefit Plan Disclosure [Line Items]
Service cost	$ 73	$ 79
Interest cost	123	112
Expected return on plan assets	(204)	(204)
Amortization of prior service cost	(1)	(1)
Amortization of actuarial (gain) loss, net	54	53
Settlements	0	0
Special termination benefits	0	0
Net periodic (benefit) cost	45	39
Other Postretirement Benefits
Defined Benefit Plan Disclosure [Line Items]
Service cost	6	6
Interest cost	19	18
Expected return on plan assets	(24)	(27)
Amortization of prior service cost	1	0
Amortization of actuarial (gain) loss, net	6	4
Settlements	0	0
Special termination benefits	0	0
Net periodic (benefit) cost	$ 8	$ 1

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Equity (Common Stock Changes in Number of Shares Issued, Held in Treasury and Outstanding) (Details)	3 Months Ended
	Mar. 31, 2019 shares
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Balance, beginning	660,111,339
Balance, ending	660,111,339
Issued
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Balance, beginning	660,100,000
Common Stock issued	0.0
Common Stock acquired	0.0
Stock-based compensation programs	0.0
Balance, ending	660,100,000
Held In Treasury
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Balance, beginning	249,400,000
Common Stock issued	0.0
Common Stock acquired	5,400,000
Stock-based compensation programs	(2,000,000.0)
Balance, ending	252,800,000
Outstanding
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Balance, beginning	410,700,000
Common Stock issued	0.0
Common Stock acquired	(5,400,000)
Stock-based compensation programs	2,000,000.0
Balance, ending	407,300,000

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Equity (Dividends Declared) (Details) - $ / shares	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Equity [Abstract]
Dividends declared per share of Common Stock	$ 1.00	$ 0.90

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Equity (Narrative) (Details) - USD ($) shares in Millions	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018
Class of Stock [Line Items]
Cost of Treasury Stock Acquired	$ 484,000,000	$ 363,000,000
Under December 2018 Board Of Directors Authorization [Member]
Class of Stock [Line Items]
Amount of Stock Repurchases Authorized by the Board of Directors			$ 2,000,000,000.0
Under December 2018 Board Of Directors Authorization [Member] | Common Stock
Class of Stock [Line Items]
Number of Treasury Stock Shares Acquired	5.4
Cost of Treasury Stock Acquired	$ 500,000,000

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Equity (Accumulated Other Comprehensive Income (Loss)) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Beginning balance	$ 10,906
Income tax benefit (expense)	(1,944)	$ 844
Ending balance	17,218
Foreign Currency Translation Adjustment
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Beginning balance	(564)	(269)
Change in OCI before reclassifications	(109)	649
Amounts reclassified from AOCI	5	0
Income tax benefit (expense)	(3)	8
Ending balance	(671)	157
Net Unrealized Investment Gains (Losses)
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Beginning balance	14,745	19,968
Change in OCI before reclassifications	8,564	(4,640)
Amounts reclassified from AOCI	(275)	(26)
Income tax benefit (expense)	(1,926)	845
Ending balance	21,115	17,582
Pension and Postretirement Unrecognized Net Periodic Benefit (Cost)
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Beginning balance	(3,275)	(2,625)
Change in OCI before reclassifications	4	(2)
Amounts reclassified from AOCI	60	56
Income tax benefit (expense)	(15)	(9)
Ending balance	(3,226)	(2,978)
Accumulated Other Comprehensive Income (Loss)
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Beginning balance	10,906	17,074
Change in OCI before reclassifications	8,459	(3,993)
Amounts reclassified from AOCI	(210)	30
Income tax benefit (expense)	(1,944)	844
Ending balance	17,218	14,761
Cash flow hedges | Net Unrealized Investment Gains (Losses)
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Beginning balance	811	(39)
Ending balance	776	(622)
ASU 2016-01 | Foreign Currency Translation Adjustment
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Cumulative effect of adoption		0
ASU 2016-01 | Net Unrealized Investment Gains (Losses)
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Cumulative effect of adoption		(847)
ASU 2016-01 | Pension and Postretirement Unrecognized Net Periodic Benefit (Cost)
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Cumulative effect of adoption		0
ASU 2016-01 | Accumulated Other Comprehensive Income (Loss)
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Cumulative effect of adoption		(847)
ASU 2017-12 | Foreign Currency Translation Adjustment
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Cumulative effect of adoption	0
ASU 2017-12 | Net Unrealized Investment Gains (Losses)
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Cumulative effect of adoption	7
ASU 2017-12 | Pension and Postretirement Unrecognized Net Periodic Benefit (Cost)
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Cumulative effect of adoption	0
ASU 2017-12 | Accumulated Other Comprehensive Income (Loss)
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Cumulative effect of adoption	$ 7
ASU 2018-02 | Foreign Currency Translation Adjustment
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Cumulative effect of adoption		(231)
ASU 2018-02 | Net Unrealized Investment Gains (Losses)
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Cumulative effect of adoption		2,282
ASU 2018-02 | Pension and Postretirement Unrecognized Net Periodic Benefit (Cost)
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Cumulative effect of adoption		(398)
ASU 2018-02 | Accumulated Other Comprehensive Income (Loss)
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Cumulative effect of adoption		$ 1,653

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Equity (Reclassifications out of Accumulated Other Comprehensive Income (Loss)) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Realized investment gains (losses), net	$ (766)	$ 425
Other income	1,254	(507)
Total foreign currency translation adjustment
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Amounts reclassified from AOCI	5	0
Net Unrealized Investment Gains (Losses)
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Amounts reclassified from AOCI	(275)	(26)
Total amortization of defined benefit pension items
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Amounts reclassified from AOCI	60	56
Accumulated Other Comprehensive Income (Loss)
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Amounts reclassified from AOCI	(210)	30
Amounts reclassified from AOCI
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Realized investment gains (losses), net	(5)	0
Other income	0	0
Amortization of defined benefit pension items:
Prior service cost	0	1
Actuarial gain (loss)	(60)	(57)
Amounts reclassified from AOCI | Total foreign currency translation adjustment
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Amounts reclassified from AOCI	(5)	0
Amounts reclassified from AOCI | Net Unrealized Investment Gains (Losses)
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Amounts reclassified from AOCI	275	26
Amounts reclassified from AOCI | Total amortization of defined benefit pension items
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Amounts reclassified from AOCI	(60)	(56)
Amounts reclassified from AOCI | Accumulated Other Comprehensive Income (Loss)
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Amounts reclassified from AOCI	210	(30)
Amounts reclassified from AOCI | Net unrealized investment gains (losses) on available-for-sale securities
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Net unrealized investment gains (losses)	260	78
Amounts reclassified from AOCI | Interest Rate | Cash flow hedges
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Net unrealized investment gains (losses)	(1)	0
Amounts reclassified from AOCI | Currency | Cash flow hedges
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Net unrealized investment gains (losses)	1	(3)
Amounts reclassified from AOCI | Currency/Interest rate | Cash flow hedges
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Net unrealized investment gains (losses)	$ 15	$ (49)

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Equity (OTTI Net Unrealized Investment Gains and Losses in AOCI) (Details) $ in Millions	3 Months Ended
	Mar. 31, 2019 USD ($)
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Beginning balance	$ 10,906
Ending balance	17,218
Accumulated Other Comprehensive Income (Loss) Related to Net Unrealized Investment Gains (Losses)
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Beginning balance	14,745
Ending balance	21,115
OTTI | Net Unrealized Gains (Losses) on Investments
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Beginning balance	189
Net investment gains (losses) on investments arising during the period	68
Reclassification adjustment for (gains) losses included in net income	(5)
Reclassification adjustment for OTTI losses excluded from net income	(1)
Ending balance	251
OTTI | DAC, DSI, VOBA and Reinsurance Recoverables
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Beginning balance	(1)
Impact of net unrealized investment (gains) losses on DAC, DSI, VOBA and reinsurance recoverables	0
Ending balance	(1)
OTTI | Future Policy Benefits, Policyholders’ Account Balances and Reinsurance Payables
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Beginning balance	4
Impact of net unrealized investment (gains) losses on future policy benefits and policyholders’ account balances and reinsurance payables	0
Ending balance	4
OTTI | Policyholders’ Dividends
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Beginning balance	(23)
Impact of net unrealized investment (gains) losses on policyholders’ dividends	(9)
Ending balance	(32)
OTTI | Deferred Income Tax (Liability) Benefit
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Beginning balance	(61)
Net investment gains (losses) on investments arising during the period	(16)
Reclassification adjustment for (gains) losses included in net income	1
Reclassification adjustment for OTTI losses excluded from net income	0
Impact of net unrealized investment (gains) losses on DAC, DSI, VOBA and reinsurance recoverables	0
Impact of net unrealized investment (gains) losses on future policy benefits and policyholders’ account balances and reinsurance payables	0
Impact of net unrealized investment (gains) losses on policyholders’ dividends	2
Ending balance	(74)
OTTI | Accumulated Other Comprehensive Income (Loss) Related to Net Unrealized Investment Gains (Losses)
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Beginning balance	108
Net investment gains (losses) on investments arising during the period	52
Reclassification adjustment for (gains) losses included in net income	(4)
Reclassification adjustment for OTTI losses excluded from net income	(1)
Impact of net unrealized investment (gains) losses on DAC, DSI, VOBA and reinsurance recoverables	0
Impact of net unrealized investment (gains) losses on future policy benefits and policyholders’ account balances and reinsurance payables	0
Impact of net unrealized investment (gains) losses on policyholders’ dividends	(7)
Ending balance	$ 148

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Equity (All Other Net Unrealized Investment Gains and Losses in AOCI) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Beginning balance	$ 10,906
Ending balance	17,218
Accumulated Other Comprehensive Income (Loss) Related to Net Unrealized Investment Gains (Losses)
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Beginning balance	14,745	$ 19,968
Ending balance	21,115	$ 17,582
Accumulated Other Comprehensive Income (Loss) Related to Net Unrealized Investment Gains (Losses) | ASU 2017-12
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Cumulative effect of adoption	7
All Other | Net Unrealized Gains (Losses) on Investments
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Beginning balance	22,531
Net investment gains (losses) on investments arising during the period	10,532
Reclassification adjustment for (gains) losses included in net income	(270)
Reclassification adjustment for OTTI losses excluded from net income	1
Ending balance	32,803
All Other | Net Unrealized Gains (Losses) on Investments | ASU 2017-12
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Cumulative effect of adoption	9
All Other | DAC, DSI, VOBA and Reinsurance Recoverables
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Beginning balance	(738)
Impact of net unrealized investment (gains) losses on DAC, DSI, VOBA and reinsurance recoverables	(459)
Ending balance	(1,197)
All Other | Future Policy Benefits, Policyholders’ Account Balances and Reinsurance Payables
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Beginning balance	(791)
Impact of net unrealized investment (gains) losses on future policy benefits and policyholders’ account balances and reinsurance payables	(492)
Ending balance	(1,283)
All Other | Policyholders’ Dividends
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Beginning balance	(894)
Impact of net unrealized investment (gains) losses on policyholders’ dividends	(1,078)
Ending balance	(1,972)
All Other | Deferred Income Tax (Liability) Benefit
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Beginning balance	(5,471)
Net investment gains (losses) on investments arising during the period	(2,401)
Reclassification adjustment for (gains) losses included in net income	62
Reclassification adjustment for OTTI losses excluded from net income	0
Impact of net unrealized investment (gains) losses on DAC, DSI, VOBA and reinsurance recoverables	103
Impact of net unrealized investment (gains) losses on future policy benefits and policyholders’ account balances and reinsurance payables	98
Impact of net unrealized investment (gains) losses on policyholders’ dividends	227
Ending balance	(7,384)
All Other | Deferred Income Tax (Liability) Benefit | ASU 2017-12
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Cumulative effect of adoption	(2)
All Other | Accumulated Other Comprehensive Income (Loss) Related to Net Unrealized Investment Gains (Losses)
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Beginning balance	14,637
Net investment gains (losses) on investments arising during the period	8,131
Reclassification adjustment for (gains) losses included in net income	(208)
Reclassification adjustment for OTTI losses excluded from net income	1
Impact of net unrealized investment (gains) losses on DAC, DSI, VOBA and reinsurance recoverables	(356)
Impact of net unrealized investment (gains) losses on future policy benefits and policyholders’ account balances and reinsurance payables	(394)
Impact of net unrealized investment (gains) losses on policyholders’ dividends	(851)
Ending balance	20,967
All Other | Accumulated Other Comprehensive Income (Loss) Related to Net Unrealized Investment Gains (Losses) | ASU 2017-12
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Cumulative effect of adoption	$ 7

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Earnings Per Share (Reconciliation of the Numerators and Denominators of the Basic and Diluted Per Share) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Basic earnings per share
Net income (loss)	$ 937	$ 1,364
Less: Income (loss) attributable to noncontrolling interests	5	1
Less: Dividends and undistributed earnings allocated to participating unvested share-based payment awards	10	16
Net income (loss) attributable to Prudential Financial available to holders of Common Stock, Basic Income	$ 922	$ 1,347
Net income (loss) attributable to Prudential Financial available to holders of Common Stock, Basic Weighted Average Shares	409.2	422.0
Net income (loss) attributable to Prudential Financial available to holders of Common Stock, Basic Per Share Amount	$ 2.25	$ 3.19
Effect of dilutive securities and compensation programs
Add: Dividends and undistributed earnings allocated to participating unvested share-based payment awards—Basic	$ 10	$ 16
Less: Dividends and undistributed earnings allocated to participating unvested share-based payment awards—Diluted	$ 10	$ 16
Stock options, Weighted Average Shares	1.2	1.9
Deferred and long-term compensation programs, Weighted Average Shares	1.1	1.1
Exchangeable Surplus Notes	$ 5	$ 5
Exchangeable Surplus Notes, Weighted Average Shares	6.1	5.9
Diluted earnings per share
Net income (loss) attributable to Prudential Financial available to holders of Common Stock, Diluted Income	$ 927	$ 1,352
Net income (loss) attributable to Prudential Financial available to holders of Common Stock, Diluted Weighted Average Shares	417.6	430.9
Net income (loss) attributable to Prudential Financial available to holders of Common Stock, Diluted Per Share Amount	$ 2.22	$ 3.14

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Earnings Per Share (Narrative) (Details) $ / shares in Units, shares in Thousands	1 Months Ended	3 Months Ended
	Sep. 30, 2009 USD ($) $ / shares shares	Mar. 31, 2019 USD ($) $ / shares shares	Mar. 31, 2018 shares
Debt Instrument [Line Items]
Exchangeable surplus notes (in shares)		6,100	5,900
Undistributed earnings allocated to participating unvested share-based payment awards, weighted outstanding shares		4,600	4,900
Long-term debt | Exhangeable Surplus Notes
Debt Instrument [Line Items]
Debt instrument, face amount | $	$ 500,000,000
Surplus notes principal amount, for each | $	$ 1,000	$ 1,000
Interest rate	5.36%
Debt instrument, convertible, conversion ratio	10.1235	12.1719
Exchangeable surplus notes (in shares)	5,100	6,090
Exchange price of common stock, per share | $ / shares	$ 98.78	$ 82.16

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Earnings Per Share (Antidilutive Securities Excluded From the Computation of Diluted Earnings Per Share) (Details) - $ / shares shares in Millions	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings, Shares	1.1	0.3
Antidilutive stock options based on application of the treasury stock method
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings, Shares	1.1	0.3
Antidilutive securities excluded from computation of earnings, Exercise Price Per Share	$ 103.47	$ 107.65
Antidilutive stock options due to net loss available to holders of Common Stock
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings, Shares	0.0	0.0
Antidilutive shares based on application of the treasury stock method
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings, Shares	0.0	0.0
Antidilutive shares due to net loss available to holders of Common Stock
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings, Shares	0.0	0.0

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Segment Information (Narrative) (Details)	3 Months Ended
	Mar. 31, 2019 segment division
Segment Reporting [Abstract]
Number of operating divisions | division	5
Number of reportable segments | segment	7

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Segment Information (Reconciliation of Adjusted Operating Income and Net Income (Loss)) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Consolidated income (loss) before income taxes and equity in earnings of operating joint ventures	$ 1,140	$ 1,693
Operating Segments
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Consolidated income (loss) before income taxes and equity in earnings of operating joint ventures	1,605	1,721
Operating Segments | Total PGIM division
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Consolidated income (loss) before income taxes and equity in earnings of operating joint ventures	214	232
Operating Segments | Total PGIM division | PGIM
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Consolidated income (loss) before income taxes and equity in earnings of operating joint ventures	214	232
Operating Segments | Total U.S. Workplace Solutions division
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Consolidated income (loss) before income taxes and equity in earnings of operating joint ventures	304	372
Operating Segments | Total U.S. Workplace Solutions division | Retirement
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Consolidated income (loss) before income taxes and equity in earnings of operating joint ventures	251	317
Operating Segments | Total U.S. Workplace Solutions division | Group Insurance
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Consolidated income (loss) before income taxes and equity in earnings of operating joint ventures	53	55
Operating Segments | Total U.S. Individual Solutions division
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Consolidated income (loss) before income taxes and equity in earnings of operating joint ventures	577	555
Operating Segments | Total U.S. Individual Solutions division | Individual Annuities
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Consolidated income (loss) before income taxes and equity in earnings of operating joint ventures	472	519
Operating Segments | Total U.S. Individual Solutions division | Individual Life
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Consolidated income (loss) before income taxes and equity in earnings of operating joint ventures	105	36
Operating Segments | Total International Insurance division
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Consolidated income (loss) before income taxes and equity in earnings of operating joint ventures	922	856
Operating Segments | Total International Insurance division | International Insurance
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Consolidated income (loss) before income taxes and equity in earnings of operating joint ventures	922	856
Operating Segments | Total Corporate and Other
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Consolidated income (loss) before income taxes and equity in earnings of operating joint ventures	(412)	(294)
Operating Segments | Total Corporate and Other | Corporate and Other operations
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Consolidated income (loss) before income taxes and equity in earnings of operating joint ventures	(412)	(294)
Segment Reconciling Items | Realized investment gains (losses), net, and related adjustments
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Consolidated income (loss) before income taxes and equity in earnings of operating joint ventures	(663)	87
Segment Reconciling Items | Charges related to realized investment gains (losses), net
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Consolidated income (loss) before income taxes and equity in earnings of operating joint ventures	25	(23)
Segment Reconciling Items | Investment gains (losses) on assets supporting experience-rated contractholder liabilities, net
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Consolidated income (loss) before income taxes and equity in earnings of operating joint ventures	454	(403)
Segment Reconciling Items | Change in experience-rated contractholder liabilities due to asset value changes
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Consolidated income (loss) before income taxes and equity in earnings of operating joint ventures	(403)	418
Segment Reconciling Items | Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Consolidated income (loss) before income taxes and equity in earnings of operating joint ventures	(33)	(26)
Segment Reconciling Items | Closed Block division
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Consolidated income (loss) before income taxes and equity in earnings of operating joint ventures	(19)	(9)
Segment Reconciling Items | Other divested businesses
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Consolidated income (loss) before income taxes and equity in earnings of operating joint ventures	$ 174	$ (72)

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Segment Information (Reconciliation of Select Financial Information) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018		Dec. 31, 2018
Segment Reporting Information [Line Items]
Revenues	$ 15,091	$ 13,757
Total Assets	849,324			$ 815,078
Operating Segments
Segment Reporting Information [Line Items]
Revenues	13,648	12,875
Total Assets	789,112			756,039
Operating Segments | Total PGIM division
Segment Reporting Information [Line Items]
Revenues	870	826	[1]
Total Assets	47,987			47,690
Operating Segments | Total PGIM division | PGIM
Segment Reporting Information [Line Items]
Revenues	870	826
Total Assets	47,987			47,690
Operating Segments | Total U.S. Workplace Solutions division
Segment Reporting Information [Line Items]
Revenues	4,080	3,505	[1]
Total Assets	225,817			217,252
Operating Segments | Total U.S. Workplace Solutions division | Retirement
Segment Reporting Information [Line Items]
Revenues	2,639	2,089
Total Assets	183,175			175,525
Operating Segments | Total U.S. Workplace Solutions division | Group Insurance
Segment Reporting Information [Line Items]
Revenues	1,441	1,416
Total Assets	42,642			41,727
Operating Segments | Total U.S. Individual Solutions division
Segment Reporting Information [Line Items]
Revenues	2,717	2,677	[1]
Total Assets	266,571			251,638
Operating Segments | Total U.S. Individual Solutions division | Individual Annuities
Segment Reporting Information [Line Items]
Revenues	1,235	1,252
Total Assets	178,103			167,899
Operating Segments | Total U.S. Individual Solutions division | Individual Life
Segment Reporting Information [Line Items]
Revenues	1,482	1,425
Total Assets	88,468			83,739
Operating Segments | Total International Insurance division
Segment Reporting Information [Line Items]
Revenues	6,152	6,040
Total Assets	230,090			222,633
Operating Segments | Total International Insurance division | International Insurance
Segment Reporting Information [Line Items]
Revenues	6,152	6,040
Total Assets	230,090			222,633
Operating Segments | Total Corporate and Other
Segment Reporting Information [Line Items]
Revenues	(171)	(173)
Total Assets	18,647			16,826
Operating Segments | Total Corporate and Other | Corporate and Other operations
Segment Reporting Information [Line Items]
Revenues	(171)	(173)
Total Assets	18,647			16,826
Segment Reconciling Items | Realized investment gains (losses), net, and related adjustments
Segment Reporting Information [Line Items]
Revenues	(663)	87
Segment Reconciling Items | Charges related to realized investment gains (losses), net
Segment Reporting Information [Line Items]
Revenues	(72)	(71)
Segment Reconciling Items | Investment gains (losses) on assets supporting experience-rated contractholder liabilities, net
Segment Reporting Information [Line Items]
Revenues	454	(403)
Segment Reconciling Items | Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests
Segment Reporting Information [Line Items]
Revenues	(38)	(26)
Segment Reconciling Items | Closed Block division
Segment Reporting Information [Line Items]
Revenues	1,374	1,163
Total Assets	60,212			$ 59,039
Segment Reconciling Items | Other divested businesses
Segment Reporting Information [Line Items]
Revenues	388	132
Intersegment Eliminations | Total PGIM division | PGIM
Segment Reporting Information [Line Items]
Revenues	$ 180	$ 184

[1]

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Segment Information Segment Information (Asset Management and Service Fees) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Asset management and service fees	$ 1,016	$ 1,026
Asset-based management fees
Asset management and service fees	843	862
Performance-based incentive fees
Asset management and service fees	35	5
Other fees
Asset management and service fees	$ 138	$ 159

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Commitments and Contingent Liabilities (Details) - USD ($) $ in Millions	Mar. 31, 2019	Dec. 31, 2018
Commitments and Contingent Liabilities [Line Items]
Fair value of collateral supporting these assets	$ 736	$ 614
Commitments | Commercial Mortgage Loans
Commitments and Contingent Liabilities [Line Items]
Total outstanding mortgage loan commitments	1,878	3,299
Portion of commitment where prearrangement to sell to investor exists	822	1,490
Expected to be funded from the GA and other operations outside the SA
Commitments and Contingent Liabilities [Line Items]
Commitments to Purchase Investment (excluding Commercial Mortgage Loans)	6,456	6,941
Expected to be funded from separate accounts
Commitments and Contingent Liabilities [Line Items]
Commitments to Purchase Investment (excluding Commercial Mortgage Loans)	59	147
Indemnifications | Securities Lending Transactions
Commitments and Contingent Liabilities [Line Items]
Indemnification provided to certain clients for securities lending and securities repurchase transactions	6,001	5,399
Fair value of related collateral associated with above indemnifications	6,133	5,503
Accrued liability associated with guarantee	0	0
Indemnifications | Securities Repurchase Transactions
Commitments and Contingent Liabilities [Line Items]
Indemnification provided to certain clients for securities lending and securities repurchase transactions	89
Fair value of related collateral associated with above indemnifications	87
Indemnifications | Serviced Mortgage Loans
Commitments and Contingent Liabilities [Line Items]
Maximum exposure under indemnification agreements for mortgage loans serviced by the Company	1,874	1,828
First-loss exposure portion of above	554	543
Accrued liability associated with guarantee	18	17
Guarantees of Asset Values
Commitments and Contingent Liabilities [Line Items]
Guaranteed value of third-parties’ assets	80,168	79,215
Fair value of collateral supporting these assets	79,771	77,897
Asset (liability) associated with guarantee, carried at fair value	1	2
Other Guarantees
Commitments and Contingent Liabilities [Line Items]
Other guarantees where amount can be determined	68	77
Accrued liability associated with guarantee	$ 0	$ 0

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Commitments and Contingent Liabilities (Narrative Excluding Litigation) (Details) $ in Millions	3 Months Ended
	Mar. 31, 2019 USD ($)	Mar. 31, 2018 USD ($)	Dec. 31, 2018 USD ($)
Indemnifications | Securities Lending Transactions
Commitments and Contingent Liabilities [Line Items]
Guarantor Obligations, Liquidation Proceeds, Percentage	102.00%
Indemnifications | Securities Repurchase Transactions
Commitments and Contingent Liabilities [Line Items]
Guarantor Obligations, Liquidation Proceeds, Percentage	95.00%
Indemnifications | Serviced Mortgage Loans
Commitments and Contingent Liabilities [Line Items]
Mortgages subject to loss-sharing arrangements	$ 14,790		$ 14,335
Weighted-average debt service coverage ratio of mortgages subject to loss-sharing arrangements	1.87		1.83
Weighted-average loan-to-value ratio of mortgages subject to loss-sharing arrangements	61.00%		62.00%
Losses related to indemnifications that were settled	$ 0	$ 0
Indemnifications | Minimum | Serviced Mortgage Loans
Commitments and Contingent Liabilities [Line Items]
Percentage share of losses incurred on certain loans serviced	2.00%
Indemnifications | Maximum | Serviced Mortgage Loans
Commitments and Contingent Liabilities [Line Items]
Percentage share of losses incurred on certain loans serviced	20.00%
Yield Maintenance Guarantee
Commitments and Contingent Liabilities [Line Items]
Guarantees related to certain investments the Company sold	$ 13		$ 13

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Commitments and Contingent Liabilities (Litigation Narrative) (Details) $ in Millions	Mar. 31, 2019 USD ($)
Loss Contingencies [Line Items]
Estimate of possible losses in excess of accruals (less than) for litigation and regulatory matters	$ 250

XML

Label	Element	Value
Retained Earnings [Member]
Cumulative Effect of New Accounting Principle in Period of Adoption	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	$ (21,000,000)	[1]
AOCI Attributable to Parent [Member]
Cumulative Effect of New Accounting Principle in Period of Adoption	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	7,000,000	[1]
Parent [Member]
Cumulative Effect of New Accounting Principle in Period of Adoption	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	(14,000,000)	[1]
Accounting Standards Update 2016-01 [Member]
Cumulative Effect of New Accounting Principle in Period of Adoption	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	57,000,000
Accounting Standards Update 2016-01 [Member] | Retained Earnings [Member]
Cumulative Effect of New Accounting Principle in Period of Adoption	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	904,000,000
Accounting Standards Update 2016-01 [Member] | AOCI Attributable to Parent [Member]
Cumulative Effect of New Accounting Principle in Period of Adoption	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	(847,000,000)
Accounting Standards Update 2016-01 [Member] | Parent [Member]
Cumulative Effect of New Accounting Principle in Period of Adoption	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	57,000,000
Accounting Standard Update 2018-02 [Member]
Cumulative Effect of New Accounting Principle in Period of Adoption	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	0
Accounting Standard Update 2018-02 [Member] | Retained Earnings [Member]
Cumulative Effect of New Accounting Principle in Period of Adoption	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	(1,653,000,000)
Accounting Standard Update 2018-02 [Member] | AOCI Attributable to Parent [Member]
Cumulative Effect of New Accounting Principle in Period of Adoption	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	1,653,000,000
Accounting Standard Update 2018-02 [Member] | Parent [Member]
Cumulative Effect of New Accounting Principle in Period of Adoption	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	$ 0

[1] (1)Includes the impact from the adoption of ASUs 2017-08 and 2017-12. See Note 2.