What dominates the section
- Prudential’s largest exposures are investment losses, adverse insurance experience, policyholder behavior, and market-driven pressure on product profitability.
- Cyberattacks, technology failures, liquidity needs, and third-party disruptions could impair operations or require immediate cash and collateral.
- Foreign pension reforms and other strategic changes could reduce Prudential’s role in emerging-market businesses.
- Financial-strength downgrades could trigger policy surrenders, increase collateral needs, and damage business prospects and liquidity.
The risks most specific to Prudential Financial
Our investment portfolios are subject to the risk of loss due to default or deterioration in credit quality or value
Investment portfolios—including fixed-income securities, loans, equities, private equity, hedge funds, and real estate—could lose value through defaults or deteriorating credit quality.
We have significant liabilities for policyholders’ benefits which are subject to insurance risk. Insurance risk is the risk that actual experience deviates adversely from our insurance assumptions, including mortality, morbidity, and policyholder behavior assumptions
Actual mortality, morbidity, and policyholder behavior could be worse than assumptions, increasing benefits liabilities and reducing insurance profitability.
Certain of our insurance products are subject to policyholder behavior risk, which is the risk that actual policyholder behavior deviates adversely from what is expected
Unexpected policy surrenders, especially after ratings downgrades or adverse publicity, could create short-term losses for affected insurance products.
- Market Risk
The profitability of many of our insurance and annuity products, as well as the fees we earn in our investment management business, are subject to market risk. Market risk is the risk of loss from changes in interest rates, equity prices and foreign currency exchange rates
Interest rates, equity prices, and foreign exchange movements could reduce separate-account values, insurance and annuity profitability, and investment-management fees.
- Market Risk
As a financial services company, we are exposed to liquidity risk, which is the risk that the Company is unable to meet near-term obligations as they come due
A major need for cash or collateral, combined with insufficient funding sources, could prevent Prudential from meeting near-term obligations.
- Operational Risk
Further, we face the risk of operational and technology failures experienced by others, including clearing agents, exchanges and other financial intermediaries, and vendors and other third parties to which we outsource the provision of services or business operations
Cyberattacks, information-security failures, or technology disruptions at Prudential, clearing agents, exchanges, vendors, or other outsourced providers could interrupt business.
- Operational Risk
See Note 25 to the Consolidated Financial Statements for additional information regarding litigation and regulatory matters relating to the distribution of products
Challenges to independent-contractor or franchisee classifications could create litigation, regulatory, employment-tax, and distribution-cost exposure.
- Strategic Risk
In addition, other risks may become strategic risks. For example, we have considered and must continue to consider the impact of the interest rate environment on new product development and continued sales of interest sensitive products
Foreign pension reforms, including proposals in Chile, Colombia, and Peru, could limit private companies’ roles and fundamentally change Prudential’s businesses there.
All 14 risk factors
Headings as the filing states them, in filing order.
Other
- 01Our investment portfolios are subject to the risk of loss due to default or deterioration in credit quality or value
- 02We have significant liabilities for policyholders’ benefits which are subject to insurance risk. Insurance risk is the risk that actual experience deviates adversely from our insurance assumptions, including mortality, morbidity, and policyholder behavior assumptions
- 03Certain of our insurance products are subject to policyholder behavior risk, which is the risk that actual policyholder behavior deviates adversely from what is expected
Market Risk
- 04The profitability of many of our insurance and annuity products, as well as the fees we earn in our investment management business, are subject to market risk. Market risk is the risk of loss from changes in interest rates, equity prices and foreign currency exchange rates
- 05instruments, require us to post additional collateral, and further increase the cost of executing product related hedges and such costs may not be recovered in the pricing of the underlying products being hedged
- 06As a financial services company, we are exposed to liquidity risk, which is the risk that the Company is unable to meet near-term obligations as they come due
Operational Risk
- 07Our operations are exposed to the risk of loss resulting from inadequate or failed processes or systems, human error or misconduct, and as a result of external events
- 08Key Enterprise Operational Risks
- 09Further, we face the risk of operational and technology failures experienced by others, including clearing agents, exchanges and other financial intermediaries, and vendors and other third parties to which we outsource the provision of services or business operations
- 10See Note 25 to the Consolidated Financial Statements for additional information regarding litigation and regulatory matters relating to the distribution of products
Strategic Risk
- 11We are subject to the risk of events that can cause our fundamental business model to change, either through a shift in the businesses in which we are engaged or a change in our execution
- 12In addition, other risks may become strategic risks. For example, we have considered and must continue to consider the impact of the interest rate environment on new product development and continued sales of interest sensitive products
- 13Changes in accounting rules applicable to our business may also have an adverse impact on our results of operations or financial condition. For a discussion of accounting pronouncements and their potential impact on our business see Note 2 to the Consolidated Financial Statements
- 14The following items are examples of other factors which could have a meaningful impact on our business
Other Prudential Financial 10-Ks
- 2026 10-K risk factors
14 risks, 4 new, 4 dropped, 9 reworded since the prior year. AI-related threats and an experienced cybersecurity incident receive greater emphasis, including risks involving third parties and sensitive health information.
Filed Feb 12, 2026
About this page
Item 1A of the 10-K on EDGAR was split into its risk factors and, where the company's previous 10-K is on file, each heading was matched to last year's and the text compared word for word. The headings are the filing's own. The one-line readings and the overview were written by a language model from the text of the new, dropped, and rewritten risks; they refer to risks by position and cannot misquote a heading.