Prudential Financial (PRU) risk factors, 2026 10-K

What changed since the prior 10-K

New

• New

  In each case, an increase in claims, or an increase in reserves due to revised morbidity assumptions can have an immediate adverse impact on our results of operations and financial condition, and the economic impact can be long-term as the morbidity claims are paid

  Policyholder behavior and morbidity changes could increase lapses, claims or reserves, impair liquidity, earnings and capital, with effects extending over years.

• NewOperational Risk

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

  Unsupervised agentic AI could take harmful actions affecting Prudential or its customers and amplify existing information-security risks.

• NewOperational Risk

  have insufficient recourse against such third parties from which such breaches originate. We have experienced cybersecurity events resulting in, among other things, the compromise of personal and confidential information, including sensitive health information, of our employees, customers and other stakeholders

  Breaches at Prudential or third parties could expose customer, employee and health information, with limited recourse and rising privacy-regulatory costs.

• NewOperational Risk

  See Note 25 to the Consolidated Financial Statements and Item 7. “Management Discussion and Analysis” for additional information regarding instances of employee misconduct in Japan

  Employee misconduct in Japan and intellectual-property infringement or misappropriation claims could create litigation expense, damages and competitive harm.

Dropped

• Dropped

  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

• DroppedMarket Risk

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

• DroppedOperational Risk

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

  Short-term lapse calamity risk for certain products, including surrender spikes after ratings downgrades or adverse publicity.

• DroppedStrategic 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

Reworded

• 100% rewrittenStrategic Risk

  We 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

  Strategic risk now includes interest-rate effects on new products, failed initiatives, competition and economic conditions, while retaining emerging-market government reforms.

• 94% rewrittenMarket 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

  The updated text retains separate-account, asset-management and derivative risks but removes detailed market-risk drivers and hedge-availability and cost language.

• 55% rewrittenOperational 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

  AI advances are newly identified as increasing cybersecurity risk alongside the existing threats from Prudential’s scale, brand and financial-sector role.

• 54% rewrittenOperational Risk

  See Note 25 to the Consolidated Financial Statements for additional information regarding litigation and regulatory matters relating to the distribution of products

  The reference to relationships with “certain key distributors” was broadened to relationships with key distributors, with the heading now citing product-distribution litigation.

• 30% rewritten

  Our investment portfolios are subject to the risk of loss due to default or deterioration in credit quality or value

  Structured finance was added to the listed investment categories, while the detailed list of economic, market, volatility, spread, rate, currency and collateral drivers was removed.

• 28% rewrittenStrategic Risk

  Changes 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

  Technology risk now highlights automated distribution and potential business-model disruption, and adds an investment-portfolio example while shortening customer-interaction discussion.

• 25% rewrittenStrategic Risk

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

  The example shifted from ratings downgrades affecting Japanese insurers’ capital to tariffs, retaliation, inflation, market declines, reserves and statutory accounting effects.

  Was: The following items are examples of other factors which could have a meaningful impact on our business

• 25% rewrittenOperational Risk

  Key Enterprise Operational Risks

  The business-continuity cyberattack example now refers to a cybersecurity incident Prudential experienced, while retaining systemic and targeted attack risks.

• 22% rewritten

  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

All 14 risk factors

Headings as the filing states them, in filing order.

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.