Prudential Financial is a leading financial services company with approximately $942 billion in assets under management.
With over 50,000 employees, Prudential has operations in the United States, Europe, Asia and Latin America. The company has been in business for 136 years and is currently a listed company on the New York Stock Exchange.
Prudential Financial offers a variety of products and services, including life insurance, annuities, retirement-related services, mutual funds, investment management, and real estate services. Prudential is a leading provider of variable annuities in the United States.
Prudential's wide range of insurance and investment-related products and services enables the company to address the wealth growth and protection needs of millions of financial services consumers around the world.
|Prudential Product Reviews|
Product Review of Prudential Premier Retirement Variable Annuities L Series
The L series variable annuity from Prudential is supposed to provide some...
Product Review of Prudential Premier Retirement Variable Annuities B Series
The B series has a fee structure that is lower than the other variable...
Product Review of Prudential Premier Retirement Variable Annuities X Series
There are actually some pretty compelling liquidity features that come with...
Product Review of Prudential Premier Retirement Variable Annuities X Series
There are 4 variable annuities that are part of the Premier Retirement VA...
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Information & Articles about Prudential
S. Jay Olshansky is a Professor in the School of Public Health at the University of Illinois at Chicago and Research Associate at the Center on Aging at the University of Chicago and at the London School of Hygiene and Tropical Medicine. Much of Dr. Olshanky's research has focused on the upper limits to human longevity and the health and public policy implications associated with aging. We had an opportunity to connect with Jay at the recent SOA Living to 100 Symposium.
AD: As an expert in the field of biodemography, you seem to have a unique perspective on the factors driving advances in the duration of lifespans of individuals who are at ages beyond their reproductive years. Is there a disconnect between the quantitative and qualitative aspects of advancing longevity? In other words, is our ability to enable high quality of life at advanced ages lagging our ability to extend human lifespan?
Jay Olshansky: Good question.
Biodemography is important and let me try to explain why.
Years ago I trained as a pure demographer. The process is heavily quantitative and very much like the training of an actuary.
I knew, however, that there had to be biology that was driving the consistent math that we were observing in the life table indicating that there are limits to the duration of life. This--the biology behind longevity--is what I went back to graduate school to understand.
This study ultimately led me to the conclusion that life expectancy in and of itself is not a very good metric.
For example, to get a life expectancy of 120 you need some people to live close to or beyond 200. At this time, this is mathematically and biologically implausible, and I think that people who use these high numbers are simply not familiar with the subtle nature in which life tables work.
The price we pay for extended longevity now are the diseases associated with old age such as cancer, heart disease and Alzheimer’s.
We will get less and less from our future gains in longevity as a result of successful efforts to treat or prevent the diseases of old age (again, heart disease, cancer, stroke, Alzheimer’s) we traded for in the early 20th century because aging has now become the most important risk factor for most of what goes wrong us – and currently, aging is immutable. By way of example, someone saved from from heart disease will eventually be exposed to the elevated risk of all other fatal and disabling diseases expressed in later regions of the lifespan.
In short, we have become very good at extending life, but we have not got very good at extending health.
We are in a very unusual circumstance right now and it is our own fault – a product of success if you will.
This is not to say, though, that there are not a larger number of healthy old people – there are, and the demographics of our world suggest that their numbers will increase as well in the coming decades.
AD: Which factors (e.g. public policy, education, investments, etc) could have the greatest impact on improving the quality of life at advanced ages?
Jay Olshansky: There are a couple considerations. First, addressing the low hanging fruit of diet, exercise and smoking reduction could have a huge impact on quality of life, and this low hanging fruit can affect everyone (old, young, wealthy, poor, etc).
The second consideration is investing in a new effort to combat the biological processes of aging, which would have a positive impact on all fatal and disabling diseases simultaneously.
Aging research provides a foundation for attacking the underlying risk factors of these diseases rather than trying to attack the diseases themselves.
A cure for cancer, for example, would be amazing but would not extend overall life expectancy that much because we are still exposed to the other diseases.
In contrast, a minor change in aging (on the order of 3 years) would achieve far more in the way of extending healthy life than a cure for cancer. The effect of slowing aging does not just lower the risk of cancer, but everything else (both fatal and disabling diseases alike) at the same time. By way of example, imagine the world’s response to the discovery that a cure for cancer had been found. We would rejoice in this development to be sure – with good reason – but those saved from dying from cancer would eventually face all other fatal and disabling diseases of aging a short time later. Some diseases traded for, such as Alzheimer’s, would be highly undesirable. An announcement that science has found a way to slow aging should be viewed by the public as an advance that is far more important than curing cancer, but getting the public to understand the importance of a development of this kind has been difficult to achieve.
How we communicate this message is not easy because people do not intuitively understand what it means to slow aging. We need to prime the pump and get this message out to the public, policy makers, the National Institutes of Health, etc.
AD: Are there meaningful variations in the qualitative aspects of longevity? In other words, do some people experience better outcomes than others, and if so, what patterns and correlations are evident?
Jay Olshansky: Let me be blunt. The world of public health is devoted to disparities.
The fact is that the disparities in health and longevity can never be eliminated. Some people are destined to die young and some people have the potential to live a long time. This heterogeneity will always be there--it is basic biology and eliminating it just can’t happen. This doesn’t mean that disparities can’t be lessened – they can, it’s just that we need to be realistic that they can never be eliminated.
For example, we’ve taken a large colony of genetically identical mice who presumably should drop dead on the same day when raised in the same environment. They don’t – they actually die out at the same consistent rate as genetically heterogeneous mice raised under varying conditions. The reason is the stochastic component to aging that we just can’t get around.
There is huge genetic variation that exists in the population that is only partially controlled by our lifestyles.
The only control we have over our duration of life is to shorten it. A lot of people who have the potential to make it to 100 will not because they adopt unhealthy lifestyles, but there is almost no prospect for someone that is biologically destined to die decades earlier, to live to 100 – no matter how perfect their lifestyle may be.
AD: The longevity dividend is premised on the notion that there is economic and social value associated with people who make it healthily to old age. Where are we in terms of economic benefits of the longevity dividend starting to be realized?
Jay Olshansky: That’s complicated. Aging is inherently modifiable. The questions are: can we do it in humans; how long would it take, and; what will the results be? The potential is huge. The only limiting factor is that dealing with humans requires clinical trials that take time to initiate and complete. While it not possible to accelerate clinical trials involving human health, it is possible to accelerate the biological research that gets us to the point where these trails can begin. We’re a ways-away from a therapeutic intervention. That said, I think there will be a therapeutic intervention that slows aging in people that will emerge during the lives of most people who are alive today.
AD: Are there any countries that stand-out as particularly advanced? If so, why is this the case?
Jay Olshansky: The United States for sure. Apparently there is a considerable effort in the European Union. Both the U.S. and EU seem further along than anyone else when it comes to advancing aging science.
AD: What needs to happen to advance this phenomenon--specifically in the areas of public policy and private investment?
Jay Olshansky: How the message is articulated is critical--the message about the impact and benefits of delaying aging. The exaggerated stuff, however, is harmful. By exaggerated stuff I am referring to claims and statements surrounding radical life extension which hurts overall funding and impedes real traction. Making sure we distance ourselves from the charlatans and bogus science that is out there is important. Let me be clear, the fundamental mission is about extending health--not length of life. With funding efforts and outreach, we’re not approaching governments but rather high net worth individuals who want to have an impact on public health.
AD: Is the Longevity Dividend possible if “healthy, high quality aging” gains are regressive rather than widespread?
Jay Olshansky: The reality is that every precious commodity is inequitably distributed today. Inequity is built into our world. This does not mean we should not pursue the scientific means to make our longer lives healthier. Does the fact that cutting-edge treatments for cancer are initially accessible to the wealthy mean we should stop pursuing cancer research? Of course not--this should not stop us from pursuing the overall goal.
AD: Financing human longevity is a challenge for both individuals and societies. Have any of your experiences or studies shed light on the benefits of guaranteed lifetime income for both individuals and populations? What are your views on the role of the private annuity market in addressing the needs of aging societies?
Jay Olshansky: I think we are starting to see a lot of traction in this area. Some of my favorite ads in this regard come from Prudential. They started with the radical lifespan stuff which seems to have been eliminated. The newer ads sensitize people to the need to plan for longer lives, and these ads are presented in both a realistic and scientifically justifiable way.
The creation of these annuity products is brilliant if they are done the right way.
You’re also seeing equally brilliant investment products that allow people to invest in longevity as an asset class.
AD: What is the “state of the union” so to speak with longevity risk and capital markets? Have you seen investors and other capital markets participants using more granular mortality data that leverages the link between biology and mortality, or the relationship between health conditions of an existing population and mortality?
Jay Olshansky: I will tell you that right up until now the investment community has not sensitized themselves to these issues very well (these issues being the linkages between finance and science).
People are just beginning to understand the linkage between finance and biology and why understanding the biology and the scientific study of aging is so valuable.
I’ll provide an example. In the world of science we know that women who go through menopause later in life tend to live longer. You would think insurance companies might consider this question as part of their underwriting process but they do not.
Another example involves calculating death rates based on a mid-year (July 1) population assumption. With the mid-year approach, all people born in the same calendar year are given the same longevity prospects regardless of what month they are born. At older ages, the chance of dying is much higher from one year to the next, so someone born on January 1 is biologically a year older than someone born on December 31 of the same year – even though they are both considered the same age. Given this fact, longevity investors who seek short exposure could choose people born earlier in the calendar year while those seeking long exposure could choose people born later in the calendar year.
One last example. There is a seasonality of mortality as death is not an equal opportunity phenomenon at different times of year. In the northern hemisphere, death rates are impacted during December through February because of the flu. Again, investors seeking short exposure to longevity could tilt towards the months of January and February while those on the long end would avoid these months.
The fact is that investors can use the science of aging to create an edge.
AD: Thanks very much Jay.
U.S. variable annuity sales grew by 24 percent from the same period a year earlier. Variable annuity sales for the first quarter of 2011 totaled $38.9 billion.
LIMRA reports that 16 of the top 20 variable annuity providers experienced sales growth relative to the previous year.
The strong sales results are attributed in part to rising equity markets. According to a Bloomberg article, another demand factor likely involves pending product changes that will make variable annuity terms less attractive:
“It’s reasonable to assume that a portion of our first- quarter sales represented accelerated purchases due to the anticipated product changeover,” Mark Grier, vice chairman of the Newark, New Jersey-based insurer, said on May 5 during a call with analysts to discuss first-quarter results.
Total annuity sales in the United States totaled $60 billion for January through March of 2011. Fixed annuities grew five percent to $20.2 billion, while indexed annuity sales grew one percent to $7 billion.
MetLife reported record variable annuity sales and a sharp rise in its retirement product fees.
Prudential also reported strength in its annuity business.
While annuity sales were strong at both companies, higher hedging costs had an adverse impact on the reported earnings of MetLife and Prudential.
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