Kenneth Tanji: Yes. So I think, Ryan, we expect, as you just heard from Charlie, a number of benefits in the way we’re transforming but also financially, the restructuring will result in annual cost savings that will be greater than the restructuring charge of $200 million. And those savings will provide expense capacity to invest in capabilities and gain further efficiencies sort of, as Charlie described there to help offset inflation and also to grow our businesses. And the way we think when we put that all together is we’ll be keeping expenses flat over the near term. . And that’s, again, how we think of things holistically, not just the saves but also combined with the investments in growing our businesses while keeping operating expenses flat and improving margins. And that’s the continuous improvement mindset that we’re striving for.
Ryan Krueger: And then a question on Prismic, you launched it with $1 billion of capital. I assume that the structured settlements transaction consumed a good amount of that. Can you give us any color on how much committed capital that you have already in place for future growth?
Robert Axel: Ryan, Rob, maybe let me give a perspective about that. If you’re asking that from the perspective of sort of the Prismic standpoint in terms of the appetite there. A couple of thoughts. One is, as Charlie actually indicated in opening remarks, we see very interesting opportunities, growth opportunities that are at the intersection of asset management and insurance, and we expect Prismic to play a material role in executing against that. And we think the benefit of that is it’s going to actually accelerate growth across all of our businesses. . And in the course of doing so, actually helped to shift the business mix so that it’s higher growth, less market-sensitive and more highly valued at the end of the day. With respect to Prismic itself, I think what we’ve articulated before is that we and our investors share operations that go well beyond the initial $10 billion structured settlement transaction.
So we anticipate that, that will include opportunities to further optimize our balance sheet. It’s going to include what’s closed. So the reserve and capital financing for our new sales across our businesses and importantly, third-party blocks that will be — we’re looking to reinsure into Prismic as well.
Operator: Next question is coming from John Barnidge from Piper Sandler.
John Barnidge: Great. Appreciate the opportunity. The restructuring program, you talked about a portion being there to invest. Can you talk about human capital versus automation and then the offshoring opportunity as well?
Charles Lowrey: Sure. It’s Charlie again. As part of the continuous improvement process, we’ll be simplifying our operating model and organizational structure, as you said, really streamlining decision-making to create a leaner, faster and more agile company so we can better meet the needs — better meet the needs of our customers while driving growth and efficiency. So we are far more focused on optimizing organizational structure through organizational design and investments in technology as opposed to offshoring. That is the predominant direction in which we’re going. .
John Barnidge: Fantastic. And my follow-up question, can you maybe talk about M&A interest? Do you have what you need to grow organically from a product perspective? And is there opportunities for PGIM to get larger insurances?
Charles Lowrey: Yes. It’s Charlie again. Let me take that. We’ve done many acquisitions that have significantly grown the company over time. And these acquisitions include companies of various sizes as well as teams of specialists. And programmatic M&A, to your point, will continue to play a role as we think about the development of the — of what we want to do going forward and a series of well-executed programmatic M&A transactions will become material over time. As a result, we continue to look at a variety of opportunities and different sizes. . But we’re continuing to be thoughtful about the deployment of capital, especially in light of the current macroeconomic conditions. And our M&A interest continue to be focused on mature companies that support our strategy of growing PGIM and emerging markets by which we can expand our capabilities or our distribution and continue to increase the scale of our existing businesses.
