Pruco Life Swings to Profit on Strong Investment Gains

TL;DR

**Pruco Life's massive profit swing makes it a buy, showing strong recovery and investment savvy.**

AI Summary

Pruco Life Insurance Company of New Jersey reported a significant turnaround in net income, reaching $31.58 million for the nine months ended September 30, 2025, compared to a net loss of $59.36 million in the same period of 2024. Total revenues also saw a substantial increase, climbing to $166.37 million for the nine months ended September 30, 2025, from $54.87 million in the prior year, primarily driven by a positive change in market risk benefits and higher net investment income. Policyholders' account balances grew to $5.76 billion as of September 30, 2025, up from $4.93 billion at December 31, 2024. The company's total assets increased to $27.68 billion from $25.42 billion over the same period, with total investments rising to $5.59 billion from $4.58 billion. Key risks include losses on investments due to credit quality deterioration, changes in interest rates and equity prices impacting product profitability, and liquidity needs from derivative collateral market exposure. The strategic outlook focuses on managing these market-sensitive products and maintaining strong investment performance.

Why It Matters

This turnaround is crucial for investors, signaling improved financial health and potentially higher returns. For employees, a profitable company offers greater job security and growth opportunities. Customers can expect continued stability and reliable service from their insurer. In the broader market, Pruco Life's performance, as a subsidiary of Prudential Financial, reflects trends in the life insurance sector, particularly regarding investment income and market risk management. This positive shift could enhance Prudential Financial's overall competitive standing.

Risk Assessment

Risk Level: medium — The company faces medium risk due to significant exposure to market fluctuations, as evidenced by 'losses on investments or financial contracts due to deterioration in credit quality or value' and 'changes in interest rates and equity prices that may adversely impact the profitability of our products.' The 'Change in value of market risk benefits, net of related hedging gains (losses)' also shows high volatility, with a $21.26 million gain in Q3 2025 compared to a $5.33 million loss in Q3 2024.

Analyst Insight

Investors should consider this filing a positive indicator, but remain vigilant regarding market risk exposures. Monitor future reports for sustained profitability and effective hedging strategies, especially given the volatility in market risk benefits.

Financial Highlights

debt To Equity

N/A

revenue

$166.37M

operating Margin

N/A

total Assets

$27.68B

total Debt

N/A

net Income

$31.58M

eps

N/A

gross Margin

N/A

cash Position

$144.96M

revenue Growth

N/A

Revenue Breakdown

Key Numbers

• $31.58M — Net Income (Nine months ended Sep 30, 2025, a significant turnaround from a $59.36M loss in 2024.)
• $166.37M — Total Revenues (Nine months ended Sep 30, 2025, up from $54.87M in the prior year.)
• $5.76B — Policyholders' Account Balances (As of Sep 30, 2025, an increase from $4.93B at Dec 31, 2024.)
• $27.68B — Total Assets (As of Sep 30, 2025, an increase from $25.42B at Dec 31, 2024.)
• $5.59B — Total Investments (As of Sep 30, 2025, an increase from $4.58B at Dec 31, 2024.)
• $21.26M — Change in Market Risk Benefits (Gain for three months ended Sep 30, 2025, compared to a $5.33M loss in 2024.)
• $69.97M — Net Investment Income (Three months ended Sep 30, 2025, up from $56.99M in 2024.)
• $41.66M — Net Income (Q3) (Three months ended Sep 30, 2025, up from $13.91M in 2024.)

Key Players & Entities

• Pruco Life Insurance Company of New Jersey (company) — registrant
• Pruco Life Insurance Company (company) — parent company
• Prudential Insurance Company of America (company) — grandparent company
• Prudential Financial, Inc. (company) — ultimate parent company
• $31.58 million (dollar_amount) — net income for nine months ended September 30, 2025
• $59.36 million (dollar_amount) — net loss for nine months ended September 30, 2024
• $166.37 million (dollar_amount) — total revenues for nine months ended September 30, 2025
• $54.87 million (dollar_amount) — total revenues for three months ended September 30, 2024
• $27.68 billion (dollar_amount) — total assets as of September 30, 2025
• $5.76 billion (dollar_amount) — policyholders' account balances as of September 30, 2025

FAQ

Risk Factors

• Investment Value Fluctuations [high — market]: The company's investments are subject to market risks, including changes in interest rates and equity prices. Losses on investments can occur due to credit quality deterioration. For example, fixed maturities available for sale were valued at $3,381,615 thousand as of September 30, 2025, and are susceptible to market value changes.
• Derivative Collateral Exposure [medium — financial]: The company faces liquidity needs arising from market exposure to derivative collateral. This means that adverse market movements could require the company to post additional collateral, impacting its cash position.
• Credit Quality Deterioration [medium — financial]: Deterioration in the credit quality of fixed income investments can lead to losses. The allowance for credit losses on fixed maturities available for sale was $472 thousand as of September 30, 2025, indicating a recognition of potential credit risk.
• Interest Rate and Equity Price Sensitivity [high — market]: Product profitability is sensitive to changes in interest rates and equity prices. These fluctuations can impact the value of assets and liabilities, as well as the company's ability to generate income from its investment portfolio.

Industry Context

The life insurance industry is characterized by its sensitivity to interest rates, equity market performance, and regulatory oversight. Companies like Pruco Life Insurance Company of New Jersey manage significant investment portfolios to back their policy liabilities. The competitive landscape often involves product innovation, efficient capital management, and strong investment returns to attract and retain customers.

Regulatory Implications

As a life insurance company, Pruco Life Insurance Company of New Jersey is subject to state-specific insurance regulations, including capital requirements and solvency standards. Changes in accounting standards or regulatory interpretations related to investments, derivatives, or policy liabilities could impact financial reporting and capital adequacy.

What Investors Should Do

1. Monitor investment performance and market risk exposures.
2. Analyze the drivers of revenue growth beyond investment income.
3. Assess the company's management of derivative collateral and liquidity.

Key Dates

• 2025-09-30: Nine months ended September 30, 2025 — Reported a net income of $31.58 million, a significant turnaround from a net loss of $59.36 million in the same period of 2024. Total revenues increased to $166.37 million from $54.87 million.
• 2025-09-30: As of September 30, 2025 — Policyholders' account balances grew to $5.76 billion, and total assets increased to $27.68 billion, indicating growth in the company's balance sheet.
• 2024-12-31: As of December 31, 2024 — Policyholders' account balances were $4.93 billion, and total assets were $25.42 billion, serving as a baseline for the subsequent growth.

Glossary

Market Risk Benefits

Liabilities or assets that represent the value of guarantees provided to policyholders related to market performance, such as minimum death benefits or account value guarantees in variable products. (A significant positive change in market risk benefits contributed to the company's improved net income in the nine months ended September 30, 2025.)

Policyholders' Account Balances

Represents the total value of funds held by the insurance company on behalf of policyholders, typically associated with annuity and life insurance products where the policyholder bears investment risk. (These balances grew to $5.76 billion as of September 30, 2025, indicating increased customer engagement and assets under management.)

Deferred Policy Acquisition Costs

Costs incurred in acquiring insurance policies that are capitalized and amortized over the expected life of the policies, rather than expensed immediately. (These costs are a significant asset on the balance sheet ($460.18 million as of September 30, 2025), reflecting the company's ongoing efforts to acquire new business.)

Fixed maturities, available for sale

Debt securities (like bonds) that the company intends to hold for an indefinite period but may sell in response to changes in interest rates, liquidity needs, or other economic factors. They are reported at fair value. (This is a major investment category ($3.38 billion as of September 30, 2025) and is subject to credit and interest rate risk.)

Separate account assets

Assets held in accounts that are legally separate from the insurer's general account. These assets typically fund variable annuity and variable life insurance products, and their value fluctuates with the underlying investments, with the policyholder bearing the investment risk. (These represent a substantial portion of the company's assets ($15.02 billion as of September 30, 2025), highlighting the company's role in managing investment products for customers.)

Year-Over-Year Comparison

Pruco Life Insurance Company of New Jersey has demonstrated a significant financial recovery compared to the prior year. Total revenues for the nine months ended September 30, 2025, surged to $166.37 million from $54.87 million in the same period of 2024. This revenue growth, coupled with a positive change in market risk benefits and higher net investment income, led to a substantial turnaround in net income, shifting from a loss of $59.36 million to a profit of $31.58 million. Total assets also grew from $25.42 billion to $27.68 billion, reflecting an expanding business base.

Key Financial Figures

• $5 — he registrant's Common Stock (par value $5) were outstanding. As of such date, Pru

Filing Documents

• cik1038509-20250930.htm (10-Q) — 4359KB
• plnj-20250930xex311.htm (EX-31.1) — 10KB
• plnj-20250930xex312.htm (EX-31.2) — 10KB
• plnj-20250930xex321.htm (EX-32.1) — 4KB
• plnj-20250930xex322.htm (EX-32.2) — 4KB
• 0001038509-25-000049.txt ( ) — 26294KB
• cik1038509-20250930.xsd (EX-101.SCH) — 101KB
• cik1038509-20250930_cal.xml (EX-101.CAL) — 125KB
• cik1038509-20250930_def.xml (EX-101.DEF) — 653KB
• cik1038509-20250930_lab.xml (EX-101.LAB) — 1203KB
• cik1038509-20250930_pre.xml (EX-101.PRE) — 933KB
• cik1038509-20250930_htm.xml (XML) — 7250KB

—FINANCIAL INFORMATION

PART I—FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements: Unaudited Interim Statements of Financial Position as of September 30, 2025 and December 31, 2024 4 Unaudited Interim Statements of Operations and Comprehensive Income (Loss) for the three and nine months ended September 30, 2025 and 2024 5 Unaudited Interim Statements of Equity for the three and nine months ended September 30, 2025 and 2024 6 Unaudited Interim Statements of Cash Flows for the nine months ended September 30, 2025 and 2024 7 Notes to Unaudited Interim Financial Statements 9 1. Business and Basis of Presentation 9 2. Significant Accounting Policies and Pronouncements 10 3. Investments 11 4. Derivatives and Hedging 22 5. Fair Value of Assets and Liabilities 28 6. Deferred Policy Acquisition Costs and Deferred Reinsurance 40 7. Separate Accounts 42 8. Liability for Future Policy Benefits 43 9. Policyholders' Account Balances 50 10. Market Risk Benefits 53 11. Reinsurance 55 12. Income Taxes 60 13. Equity 60 14. Related Party Transactions 62 15. Commitments and Contingent Liabilities 65

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 67

Controls and Procedures

Item 4. Controls and Procedures 74

—OTHER INFORMATION

PART II—OTHER INFORMATION 75

Legal Proceedings

Item 1. Legal Proceedings 75

Risk Factors

Item 1A. Risk Factors 75

Exhibits

Item 6. Exhibits 76

SIGNATURES

SIGNATURES 77 2 Table of Contents

FORWARD-LOOKING STATEMENTS

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 Pruco Life Insurance Company of New Jersey and its subsidiary. There can be no assurance that future developments affecting Pruco Life Insurance Company of New Jersey and its subsidiary 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 or policyholder behavior experience that differs significantly from our expectations when we price our products; (3) changes in interest rates and equity prices 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) liqui

—FINANCIAL INFORMATION

PART I—FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY Unaudited Interim Statements of Financial Position September 30, 2025 and December 31, 2024 (in thousands, except share amounts) September 30, 2025 December 31, 2024 ASSETS Fixed maturities, available for sale, at fair value (allowance for credit losses: 2025-$ 472 ; 2024-$ 0 ) (amortized cost: 2025-$ 3,575,236 ; 2024-$ 3,024,155 ) $ 3,381,615 $ 2,716,937 Fixed maturities, trading, at fair value (amortized cost: 2025-$ 22,145 ; 2024-$ 23,955 ) 22,486 21,252 Equity securities, at fair value (cost: 2025-$ 80,633 ; 2024-$ 353 ) 81,324 62 Policy loans 1,121,275 1,118,589 Short-term investments 2,237 11,394 Commercial mortgage and other loans (net of $ 2,771 and $ 1,713 allowance for credit losses at September 30, 2025 and December 31, 2024, respectively) 672,111 477,328 Other invested assets (includes $ 114,260 and $ 55,624 of assets measured at fair value at September 30, 2025 and December 31, 2024, respectively) 304,676 233,212 Total investments 5,585,724 4,578,774 Cash and cash equivalents 144,963 170,825 Deferred policy acquisition costs 460,176 417,316 Accrued investment income 55,337 60,368 Reinsurance recoverables and deposit receivables (includes $ 394,728 and $ 265,611 of embedded derivatives at fair value at September 30, 2025 and December 31, 2024, respectively) 5,687,885 4,929,428 Receivables from parent and affiliates 54,075 70,766 Income tax assets 100,616 113,718 Market risk benefit assets 496,751 492,444 Other assets 83,846 76,876 Separate account assets 15,015,462 14,507,553 TOTAL ASSETS $ 27,684,835 $ 25,418,068 LIABILITIES AND EQUITY LIABILITIES Policyholders' account balances $ 5,755,807 $ 4,928,299 Future policy benefits 2,703,432 2,517,483 Market risk benefit liabilities 496,751 492,444 Reinsurance payables 2,079,148 1,440,264 Payables to parent and affiliates 168 462 Other liabilities 289,698 281,973 Separate account liabilities 15,0

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