Robert M. Falzon
Vice Chair at Prudential Financial
Thank you, Charlie. I'll provide an overview of our financial results and business performance for our PGIM, U.S. and International businesses. I'll begin on slide 6 with our financial results for the fourth quarter and full year of 2023. Our pretax adjusted operating income was $5.5 billion or $11.62 per share for 2023 and $1.3 billion or $2.58 per share in the fourth quarter. These results reflect an increase in the underlying earnings power of our businesses, including the benefits of strong sales growth and higher interest rates.
This was partially offset by pressure on variable investment income and higher expenses, primarily due to a $200 million restructuring charge in the fourth quarter. Our GAAP net income for the quarter was $374 million higher than our after-tax AOI primarily driven by net investment gains due to declining rates. Turning to the quarterly operating results of our businesses compared to the year ago quarter. PGIM, our global investment manager, had lower other related revenues driven by lower incentive fees and agency income and higher expenses.
This was partially offset by higher asset management fees, including the benefits from our acquisition of Deerpath Capital and of launching Prismic. Results of our U.S. businesses primarily reflected higher spread income driven by business growth and the benefit of higher interest rates and lower expenses. This was partially offset by lower legacy traditional variable annuity fee income as we pivot to less market-sensitive products. The earnings in our international businesses primarily reflected less favorable underwriting results, including unfavorable policyholder behavior partially offset by lower expenses.
Turning to slide 7; PGIM, our global active investment manager, has diversified capabilities in both public and private asset classes across fixed income, equities and alternatives. PGIM's strong investment performance over the past year has also driven attractive long-term performance with over 80% of assets under management outperforming their benchmarks over the last 5- and 10-year periods. PGIM's assets under management increased 6% to $1.3 trillion from the year ago quarter, primarily resulting from market appreciation. Third-party net outflows in the fourth quarter totaled $13.5 billion.
Institutional outflows of $6.3 billion were driven primarily by a large redemption of a low fee equity index mandate and redemptions in public fixed income resulting from client rebalancing and liquidity needs. Retail outflows of $7.2 billion were primarily driven by equity, sub-advised mandates and fixed income outflows. As the investment engine of Prudential, the success and growth of PGIM and of our U.S. and International Insurance and Retirement businesses are mutually reinforcing.
PGIM's asset origination capabilities, investment management expertise and access to institutional and other sources of private capital including through the recently launched reinsurer Prismic are a competitive advantage helping our businesses to bring enhanced solutions and create more value for our customers. Our insurance and retirement businesses, in turn, provide a source of growth for PGIM through affiliated net flows as well as unique access to insurance liabilities. In addition, we continue to grow both organically and through acquisitions, our PGIM Private Alternatives business, which has assets of approximately $240 billion across private, corporate and infrastructure credit, real estate equity and debt and secondary private equity.
Capital deployment across PGIM's private assets platform of $9 billion during the quarter benefited from robust private placement and direct lending originations. Turning to slide 8; our U.S. businesses produced diversified earnings from fees, net investment spread and underwriting income and benefit from our complementary mix of longevity and mortality businesses. We continue to drive growth by transforming our capabilities to improve customer experiences and expanding our addressable market with new financial solutions leveraging the capabilities across Prudential.
Retirement strategies generated strong sales of $16.4 billion in the fourth quarter across its institutional and individual lines of business. Institutional Retirement sales of $14.3 billion in the fourth quarter were driven by strong international reinsurance sales and our best quarter for structured settlements since 2016. International Reinsurance sales included a $9.2 billion transaction in the Netherlands and with the recently passed Dutch Pension Reform Legislation we anticipate this market will continue to grow over time.
Individual Retirement posted $2.1 billion in sales, reaching the highest level since the third quarter of 2019. Our product pivots have resulted in continued strong sales of FlexGuard and FlexGuard Income, which increased about 20% from the year ago quarter, while fixed annuity sales have doubled. Our Individual Life sales increased 33% from the year ago quarter, reflecting our product pivot strategy towards more capital-efficient products. Variable Life Protection and Accumulation products represented approximately 70% of sales for the year, including a benefit from our recently launched FlexGuard Life product.
In Group Insurance, we continue to execute on our strategy of product and client segment diversification while leveraging technology to increase operating efficiency and enhance the customer experience. Our full year sales were up 11% compared to the prior year, driven by growth in disability and supplemental health. Group's full year adjusted operating income was the highest in the past 15 years and included favorable underwriting experience. As a result, we are lowering our benefits ratio target range by 2 percentage points to 83% to 87%.
Turning to slide 9; our International businesses include our Japanese life insurance companies, where we have a differentiated multichannel distribution model as well as other businesses aimed at expanding our presence in targeted high-growth emerging markets. In Japan, we are focused on providing high-quality service and expanding our distribution and product offerings. Our needs-based approach and protection product focus continue to provide important value to our customers as we expand our product offerings to meet their evolving needs.
In emerging markets, we are focused on creating a selective portfolio of businesses in regions where customer needs are growing, where there are compelling opportunities to build market-leading businesses and where the Prudential enterprise can add value. Sales in our International businesses were up 24% compared to the year ago quarter. Life Planner sales were up 21%, including the benefits of recent product launches in Japan to diversify our product offering. In addition, Brazil sales were up 24%, reflecting growth across all channels and leading to a full year record.
Gibraltar sales were up 27%, primarily driven by higher independent agency sales and growth in the bank channel. As we look ahead, we are well positioned across our businesses to be a global leader in expanding access to investing, insurance and retirement security. We continue to focus on investing in growth businesses and markets, delivering industry-leading customer experiences and creating the next generation of financial solutions to serve the diverse needs of a broad range of customers.
And with that, I'll now hand it over to Ken.
