Can Prudential's New ActiveIncome Feature Redefine Retirement Planning?

Prudential Financial, Inc. PRU has announced the launch of ActiveIncome, an innovative insurance overlay feature now available through Dimensional Fund Advisors’ Unified Managed Accounts (UMA) platform. It is built to enhance retirement outcomes by carefully addressing the challenges of longevity risk.

As 11,200 Americans turn 65 each day and prepare for longer, healthier retirements, the demand for innovative financial solutions continues to rise. In response, Prudential is stepping up by partnering with Dimensional Fund Advisors and the insurance tech platform Fiduciary Exchange LLC (FIDx) to help more people safeguard their life’s work and enjoy longer, more secure retirements.

Without transferring assets to an insurance provider, PRU’s ActiveIncome enables clients to remain invested, preserving liquidity and flexibility, while offering the security of a seamless, performance-based lifetime income stream.It enhances retirement planning by providing a new solution within managed accounts that ensures steady income and long-term financial confidence. This is achieved through a special annuity feature that accommodates the evolving needs of retirement investors who work with financial advisors.

Accessible via the FIDx Insurance Overlay marketplace on Dimensional’s UMA platform, Prudential’s ActiveIncome supports all available investment options, including ETFs, mutual funds, SMAs, and model strategies. This move aligns with Dimensional’s systematic, research-driven approach to help investors pursue higher returns through thoughtful portfolio design, management, and trading.

Prudential, a leading global financial services and investment management firm, stands to benefit financially from ActiveIncome by creating a new stream of recurring revenue through insurance-based fees linked to the income overlay. This low-capital, scalable model allows Prudential to expand its footprint in retirement income solutions while maintaining operational efficiency. Additionally, positioning itself as an innovator in lifetime income solutions enhances its brand value and competitiveness.

PRU’s YTD Price Performance

In the year-to-date period, Prudential’s shares have lost 10.2% compared with the industry average. Due to higher expenses, unfavorable underwriting results, and other macroeconomic factors, Prudential continues to face pressure.

Zacks Rank & Key Picks

PRU currently has a Zacks Rank #3 (Hold).

Some better-ranked stocks in the  Insurance - Multi line space are Hamilton Insurance Group, Ltd. HG, EverQuote, Inc. EVER and Hippo Holdings Inc. HIPO, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for Hamilton’s current-year earnings is pegged at $3.15 per share. Hamilton surpassed estimates in three of the last four reported quarters, the average surprise being 264.1%. The consensus estimate for HG’s current-year revenues is pegged at $2.6 billion, implying 11% year-over-year growth.

The Zacks Consensus Estimate forEverQuote’s current-year earnings is pegged at $1.18 per share, implying a 34.1% year-over-year growth. EverQuote’s earnings surpassed estimates in each of the last four quarters, the average surprise being 122.6%. The consensus estimate for EVER’s current-year revenues is pegged at $644.1 million, implying 28.7% year-over-year growth.

The Zacks Consensus Estimate forHippo Holdings’s current-year earnings indicates 16.4% year-over-year growth and a massive improvement in the following year. Hippo surpassed earnings estimates in three of the last four reported quarters, with the average surprise being 22.8%. The consensus estimate for Hippo’s current-year revenues is pegged at $476.7 million, implying 28.1% year-over-year growth.

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This article originally published on Zacks Investment Research (zacks.com).

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