Rob Falzon: Okay. Jimmy, let me start at a high level and then end with your specific question on maturity. So actually, there has not been a material change from year-end. We’ve got a $51 billion portfolio. It’s about 14% of our investments. The portfolio remains resilient. It’s high quality. It’s broadly diversified, looking at both geography and underlying property types. And as we pointed out before, we benefit significantly from PGIM’s direct origination of these loans, their deep knowledge of local markets and the proven track record they’ve had through prior cycles. It’s a management team with over 25 years of average industry experience. LTVs and debt service coverage ratios really did not change for the entire — on a portfolio-wide basis from the end of year to the — through the first quarter, we’re at 58% on a loan-to-value basis and almost 2.5 times on a debt service coverage ratio.
The office, as you might expect, Jimmy had some negative trends. It’s just pointing out that’s about $7 billion of our portfolio or about 14% of the mortgage portfolio. LTVs there were up, it gets lost in the rounding and the overall. So our — while our LTV for the overall portfolio didn’t rise within the office sector, we went up from 71% at year-end to 74%, but our coverage ratios remained the same at just over 2.5 times. So feel good about where we are in the overall portfolio. From an outlook standpoint — and I’m sorry, I’m not sure if you asked the question but reserves in the real estate portfolio, we added modestly to those from the first quarter experience. So they’re up they’re at $414 million, up from about $370-plus million as of year-end.
So a modest increase there. As we’re looking forward, expectation across the sort of across industry is that there’ll be another 5% to 10% valuation decline across the industry. Office is a subsector of that will probably be more like around 15% decline. And while our portfolio won’t be immune to further declines in value, we do expect it to continue to be resilient, given its construction the institutional quality of our underlying properties and the conservative loan underwriting that we’ve got in those LTVs and debt service coverage ratios that I shared with you. With respect to loan maturities, during 2023, we had about $2 billion worth of maturities. There were four modifications for under $400 million of that with long-term extensions.
The remainder were resolved favorably through refinancings payoffs or short-term extensions, which were then subsequently paid off. For the remainder of 2024, we’ve got $2 billion or about 4% of the portfolio that’s maturing. And then years after that, think of it as about being plus or minus 10% per year, so around $5.5 billion a year through 2028. We expect that there’ll be episodic issues that we’ll need to deal with in the way of ongoing loan modifications and extensions. But overall, we are quite comfortable with the quality and resilience of the portfolio.
Jimmy Bhullar: Thank you.
Operator: Thank you. Your next question is coming from Wilma Burdis from Raymond James. Your line is now live.
Wilma Burdis: Hey, good morning. Given the high level of retail sales, could you talk about the competition levels in annuity and life products. We would expect pricing to rationalize somewhat this year given regulatory changes in Bermuda. So have you seen any evidence of this? And maybe give us some broader color. Thanks.
Caroline Feeney: Yeah. So good morning, Wimla, it’s Caroline. So I’ll take your question. If I think about life for a moment and our sales results and our outlook going forward, I’ll take that first. We are very pleased, Wilma, with our first quarter results with over $165 million in sales an increase of more than 10% from the prior year quarter. That’s driven by our term and variable products, and we continue to write that new business at healthy returns continuing the trend we saw throughout the year in spite of competition. As we look to this year, we continue to see positive momentum for our portfolio. That does include core products like variable universal life and term where we are already a market leader. In addition, Wilma, and I think this is part of how we’re staying ahead and continuing our market leadership position with competition as we’ve rolled out new solutions.
Like our FlexGuard Life indexed variable universal life product to further penetrate the accumulation market and be able to reach new customers. And we achieved our highest quarterly sales of FlexGuard life this past quarter. So that we’re very confident that with these products, our pricing discipline, and our distribution strength we will remain and continue to be a leader in the life market. In terms of the annuities market, yeah, certainly, there is significant growth across the annuity space and increasing competition with the record industry sales that we’ve seen in each of the past two years. But as I shared earlier, and I think this is important to reiterate, we’ve been able to achieve the strong results, thanks to our brand and our industry leading execution and distribution.
We’ve maintained a distinct focus on our end-to-end customer and adviser experiences using automation and process enhancement to make it easier than ever to buy a Prudential policy. We also have deep and expanding partnerships across multiple distribution channels. And this enables us to scale quickly to meet increased market demand and allows us to expand distribution. And finally, we combine all of that with our world-class asset management capabilities through PGIM. So we believe we’re in a very strong position to continue to build on our growth and meet the market demand even with rising competition in the space.
