I'm pleased to introduce Vice Chairman of Prudential, Mark Grier. Our view of Prudential is that they've been very good stewards of capital, whether it's been their M&A track record, variable annuity product design, or how they've returned capital via share buyback. Now I'll turn it over to Mark to hear about Pru's plans, whether we're looking at the same type of dynamic for capital return, and just general plans, what's going on with Pru.
Thanks, Tom. Good morning. We're hot on the heels of our earnings call from yesterday, which we think went extremely well. We finished a very strong year with a very strong quarter and have a lot of good stories to tell in terms of momentum in the business and capital deployment. I'm going to go through a general discussion of Prudential. I'm going to talk about how we see the world and what we're up to. I'm going to be referencing some of the nearer term developments and things that happened during last year and talk about what we're trying to accomplish in general. Obviously, the lawyers have been at this. This is a familiar slide to anyone who's followed Pru for very long. The themes for us have been consistent since we went public, emphasizing attractive return opportunities and high-quality businesses.
Part of the subtitle there is we don't view ourselves as a flavor-of-the-month kind of company, but a company that has staying power in its value propositions and builds real earnings power around adding value to our clients, supported by a strong balance sheet. We've always had aspirations to maintain an AA credit rating, and we manage accordingly with respect to capital strength and liquidity and asset quality. The balanced portfolio of selected risks has been a theme in both capital deployment and commercial business description for a long time. We've talked a lot about the mix between mortality risk and market sensitivities and how attractive it is for us to have the core strength in mortality risk, particularly in Japan, complemented by growth opportunities that tend to be tied more to market sensitivities than underlying either mortality or longevity type risks.
The value of that business mix is more and more evident. The quality of earnings across the board and the different sources of growth for us, I think reflect a very attractive balanced portfolio of risks, combined with the commercial opportunities that lie underneath either the things we do to take mortality risk or the more market sensitive growth opportunities that we have. The second part of that bullet that references improving risk profile is a reference to decreasing volatility in asset management as a result of changing both our co-investing profile as well as our proprietary trading principal investing profile. Also the growing weight, and you'll see a picture of this in our annuity portfolio, of a product that mitigates a lot of the risk to Prudential within the product as opposed to leaving it for our account in our overlay guarantee structure.
A couple of things going on in terms of the risk profile that are related to the way in which we're conducting our business that are having a nice structural impact on volatility, and in the annuity business, both volatility and tail risk. We have important growth engines in international insurance, and I'll talk about that one, in annuities, and I'll talk about that one, in asset management, and I'll talk about that one. The sub-bullet here is that not only are these growth opportunities, but these are also very attractive return opportunities. We have the luxury of being in a situation where the faster-growing businesses are also the highest returning businesses, and that's a big part of our ROE accretion story as we look out over the next couple of years and target ROE improvement to the 13% or 14% range.
A big piece of that is the fact that we'll grow faster in the businesses that do better in terms of ROE. At one time, we couldn't have talked about much of a distribution story for Prudential. We were proprietary, parochial, captive agents selling life insurance. We've made the transition over the past 10 years to something that in many dimensions looks like a real distribution powerhouse. Adding third-party channels and improving the quality and productivity of the captive channels to the point where now we can say that we have market leadership across multiple channels. This is a big change for us. The transition from the proprietary driven mutual to now the broader distribution machine that we've become in some of our U.S. products and also in Japan, is a very important part of our transition.
A strong piece of the foundation around the growth story, which is right now fairly elusive in financial services, but the opportunities that we have in channel penetration and the capabilities that we've built around third-party channels, I think give us a leg up in the pursuit of high-quality growth in businesses and in markets and in a sector overall that's kind of struggling to find that growth equation. I appreciate Tom's compliment about being stewards of capital. The next bullet refers to capital management, and I think this is something that has always been central to our story. Part of the theme of a demutualizing company in general was returning capital, and the early focus on share buybacks and achieving a market standard capital structure was an important part of our value proposition in 2001 when we went public 10 years ago or more.
Now it's become a much more routine part of generating and deploying capital because we earn more than we can use in our businesses. We had a big year last year in terms of capital management. We bought back $1 billion worth of stock in the second half of the year when our authorization began. We paid almost $700 million in dividends in December and provided a healthy increase in the dividend for the year. We invested about $2 billion in the organic growth of our businesses, and we deployed about $4.5 billion in the acquisition of the Star and Edison insurance companies in Japan. Last year was maybe the flagship example of the point around capital management and the balanced approach that we take to investing in our businesses and returning capital to investors.
I think it's a great story for us because it continues to validate the availability of capital within the company. It continues to validate the credibility of the management team in talking about how we balance investing in the businesses with buying back stock or paying dividends. I think importantly, it also validates the business opportunities that we have in which to deploy capital. That $2 billion in organic growth is kind of a nice number. It's a good idea to be able to put capital into the businesses that are growing, and we've been able to do that. Nice capital management story.
On the call yesterday, John Strangfeld was asked about acquisitions and how we were thinking about it. He gave an answer that's very consistent in terms of how we've been thinking about it, driven in many respects by this notion that acquisitions are nice. They've got to be good deals for us. They've got to fit the business strategy. They've got to be attractively priced. He also made a comment that organic growth is cheaper. That continues to be an important point that's in front of us. Deals come and go that we would have the opportunity to overpay in quotes, as we would see it, to do things. We've let a lot of things go by and haven't done it. I think the emphasis on organic growth has served us very well.
I think that quote, that we recognize that organic growth is cheaper, is an important element of understanding how we balance the acquisition question with the organic growth question and with the broader capital deployment, capital strategy question. Our proven acquisition and integration track record is being tested once again as we consolidate and integrate two big insurance companies in Japan with one of ours, Star and Edison. Although when we talk about it, we get a little sloppy and say Star Edison, it's actually two different legal entities and two different platforms and two different portfolios and two different this and two different that. We are consolidating from a business operating platform standpoint, everything into our Gibraltar Insurance company there. We did consolidate the legal entities on January 1st, combining Star and Edison and Gibraltar into one legal entity in Japan.
The report yesterday on the call and the consistent story from the beginning, in spite of, by the way, an earthquake and a tsunami, is that we're on track with respect to the integration and consolidation of Star and Edison, and looking forward to realizing about $250 million of run rate savings by the time we finish consolidation, and improving the productivity and performance of the sales force as well. Second to the last bullet is being tested as we speak. I think right now we'd say it's going right on track and as expected. We're looking forward to a good outcome with the Star and the Edison deals. Finally, we've had a lot of continuity in management. We have a team that runs as a team.
We genuinely function that way and operate in ways that complement one another and place a very heavy emphasis on talent management and leadership within the company, spending a meaningful amount of time at the board level on things like succession planning and development of high talented people, that continues to serve us very well. This is a picture of our business mix. This is the deployment of capital within Prudential. It's attributed equity spread around a pie chart. This is arrayed so that the highest equity market sensitive businesses are shown in the upper left. That's where individual annuities is, then as you go counterclockwise around the circle, the equity market sensitivity decreases. International insurance is almost immune to equity markets entirely, very much driven by mortality profits. Then we become more equity market sensitive as we move around.
It's showing you a little bit of two things in this picture. You can see that international insurance now is 44% of our attributed equity and represents almost half of our earnings, by the way. This is a big deal. High quality earnings at high returns. Second largest deployment of capital is in the annuities business, driven partly by the acquisition of American Skandia back in 2003, but also now reflecting substantial organic growth. Then you see the rest of the picture with the capital deployment shown along. This is just a reminder that when we think about capital, in the middle of the crisis, defense was on top and offense was always out there. I think maybe we were unique in continuing to think about offense as we went through the crisis. You know we didn't need to get bailed out by anybody.
Not only didn't we need to get bailed out, we didn't stop looking for opportunities. In addition to that, we kept investing in our portfolio. We gained market share in a number of our products. Defense was the name of the game. The point of this is that now, even though it's 2012, don't lose sight of that fact. There's always a little bit of toggling back and forth between offense and defense going on, as there's a lot of uncertainty around right now, the issues in Europe, and more generally, the sustainability of the recovery. Just a reminder that although the balance has shifted, it's always out there. By the way, that offense during the crisis is what resulted in our ultimate consummation of the deal for Star and Edison with AIG.
We started pecking away at that as soon as AIG started getting on track to try to sell some things. This describes some elements of capital management philosophy, on the left-hand side there, you could replace capital management with risk management. There's an important link here, which is we approach the risk management issue the day we start to deploy capital into a business model. I'm saying it that way to contrast it to the after the fact analytical attribution or analytical value at risk assessment that supports a lot of contemporary risk models. Our view is that we're deciding to take equity risk when we decide to be in the asset management business, we're deciding to take equity risk when we decide to be in the annuity business.
We think about how that risk profile emerges as we deploy capital, and we think about the risks that are tagged along with that capital that's going into a business model. On the right-hand side, you see a number of the themes that I talked about in the opening slide that reflect the way we're thinking about the overall portfolio of our businesses.
I think the key here is maybe to use Tom's word, the stewardship of capital and making sure that as we think about the deployment of capital, not the allocation, attribution, or the analytical framework, but the real deployment, the investment of actual money into actual businesses with actual products and customers and risks, that we think about it the right way, and that we keep shaping that capital deployment picture to reflect the way we want it to look, as opposed to the accident of an analytical model that described it one way or another at one specific point in time. This is my ultimate slide. Not meaning last, by the way, meaning best. There are four pieces of information in this picture.
First of all, it's a stylized view, so you shouldn't get out a ruler or a protractor or a compass and try to measure stuff and plot exactly what we think is going on with one or another of these balloons. The picture is showing you in a stylized way, four things about Prudential. Well, five things. One is the overall business mix. Going along the horizontal axis, we have the ROE prospects for the businesses. Going up the vertical axis, we have the growth potential. The size of the balloon is the amount of capital that we have invested in that business, and the color of the balloon is a relative volatility index, and you can think of blue as being just about as volatile as the market, green as being less volatile than the market, and red as being levered to the market.
This picture shows how we view the overall portfolio in terms of, in essence, the four most important characteristics of what we're trying to put together. Now, I guess in the abstract, you would love to have only big green balloons in the top right corner, because those would be low risk, they'd be high growth, and they'd be high return. That's where all your capital would be. That perfect world doesn't exist. I think if you look at this and think about what's going on here, we have overall a pretty attractive array of balloons. International insurance is a big green balloon in the top right. High return, attractive growth, low volatility, and a lot of capital for us, as I said, 44% a minute ago.
If you move to the lower left corner, individual life and retirement, these are businesses that are stable, that produce cash, that help our credit rating, that help the diversification of the risk profile by taking more mortality risk and less equity market sensitive risk, for example. As a complement to the things that we do both overseas and in other parts of the U.S., we have cash flow generators that may grow more slowly, but with which we're very comfortable, and by the way, which we run very well. Individual life may be portrayed a little bit unfairly here. We've always kind of bought into the notion that in the U.S., individual life is a slow growth and a low return business. The track record of our individual life business is actually quite a lot better than it might be relatively portrayed on this picture.
We've earned ROEs in the mid-teens or higher, partly because of very good capital management, partly because we've been aggressive on expenses and margins and have continued to pound away at cutting expenses in that business, and partly because we're kind of riding the broader trend of better mortality margins than are priced into the products. There's some things that drive individual life actually over time to have done relatively better than it's pictured here. The change in DAC accounting, by the way, will change some of this dynamic on the books. Individual life will also be reporting a higher ROE because their denominator is going to go down because they're taking some DAC out as we recalibrate DAC on the balance sheet and then also remeasure DAC going forward. This is, I guess, the investment banking story would be the league table.
The point of this slide is that we're very well-positioned in the markets that we've emphasized. Two comments on this. One is that in defined contribution, we wouldn't necessarily aspire to be in the top three or four. The top three or four in assets managed in defined contribution are much more technology driven than we are. We get a lot of value in our defined contribution business from the stable value products that we provide to our plan sponsors that are on the platform then as an investment choice for participants. Seven, maybe we'd like to be five, but we don't aspire to be one, two, or three there. That's a very different business in terms of margins and in terms of the product mix that supports that kind of asset portfolio.
The second comment is that asset management is not shown on this chart, and we need to get a good measure to start to include here. By most measures, I think we would be in the top 20 in the world in asset management. I'll come to it in a few minutes, but we manage over $600 billion in our asset management business. For the total company, we touch about $900 billion. I think asset management needs a way to measure it and a way to get it on this picture because we are a global leader with respect to the scale and penetration in asset management. I want to turn to the businesses now and start with international. Familiar themes if you've been listening to us for a while, we concentrate on a limited number of attractive countries.
Nowhere in Prudential have we got a chart on the wall where we stick little pins in and say we're covering 40 countries or 50 countries or 70 countries. We're heavily emphasizing countries that we like, where we think our business models will work. The headline success story there is Japan, but we've also done extremely well in Korea. Our focus and concentration is an important part of the discipline we have there. That's in contrast to some of the deals that have been done recently that are kind of spread out with a lot of little stuff everywhere. That's not particularly appealing to us. Within the markets we serve, we target the affluent and the mass affluent consumers. That's an important part of the way we decide which countries to enter. We want to go places that have money, not places that need money.
Needs-based selling is kind of a cliche in life insurance in a way, but there are three parts to this that make it very tangible in terms of the financial aspect of returns in international. One is that when we have a high-quality sales process, persistency is better. In fact, our persistency numbers in general in international insurance are off the chart, substantially better than any of our local competitors, and that's a big driver of profitability, the fact that we don't get this turnover in the book. The second tangible aspect of the result of a needs-based selling approach is repeat business. We get almost half of our business in international from clients we've dealt with before. If you satisfy them, it's cheaper to sell to them again.
We also get that lift in productivity as a result of having done a better job the first time around. We have persistency, and we have repeat business. Then the third tangible element, well, maybe somewhat less tangible but important, is around the brand and perception and the quality of the sales force, and that's all kind of bundled together. When we do a better job here, we attract better salespeople. They stay longer. The reputation of the company is better in the market. There's a whole thing that comes together there that makes managing the sales force more efficient and less expensive. We're emphasizing proprietary distribution in terms of quality, focused on productivity, focused on recruiting, training, and selection, and having the best agents, not necessarily having the most.
The emphasis in the proprietary channel is not so much on headcount, although that's been a theme, growth in Life Planners has been a theme around Prudential for a long time. The real story there is building that proprietary distribution system around the quality theme. We're also growing in bank channels, and we're also growing in independent channels, and those have become more and more important as you'll see in a minute. We have historically focused on protection life insurance, and the main extension of the business model reflected in the last bullet here to the retirement market is really focused on an extension, not a revision of the business model, and still using protection life insurance as kind of the core product to provide retirement type outcomes, either asset accumulation or retirement income outcomes for our clients.
The reason for this is that in several of these markets, Japan in particular, mortality margins are extraordinarily wide. As we can sell products that have more mortality content and not rely on investment margins, we can generate much higher returns. The extension to retirement isn't a compromise around profitability. It's really finding retirement applications for products that still have those very attractive returns. We're often asked why we like Japan, because at 40,000 feet, it looks like it's low growth, it looks like it's old people, it looks like it's well insured, and why would you want to be there? Well, there's some bullets here describing some of the attributes of the Japanese market.
The two most important ones to us are the third bullet and the fourth bullet. Actually the intersection of those two is really where we're growing and playing more and more aggressively in Japan. Those two bullets reference a $10 trillion pool of liquid assets held in the household sector. I describe this as money in the mattress. The U.S. equivalent is about $7 trillion. This is the largest pool of liquid assets, and right now in Japan, as you know, earning 0.1% or even less than that, the largest pool of liquid assets in the world. The intersection of that pool of liquid assets with the next bullet, the retirement opportunity, is really where we're trying to play.
What you ought to think about is that we're just trying to get ourselves in between the pure liquid assets and the retirement outcome with high margin products that create better results for consumers. In fact, that's what we're doing. We can provide better returns for them. We can provide better outcomes than the mattress does, but we can do it in ways that are very profitable for us. We see a growth opportunity in Japan, not because of those 40,000-foot descriptive economics, but because of this dynamic in the combination of wealth and the resources to meet the retirement challenge, which is unusual in the developed world. The way we can design products and sell products to meet those retirement needs that are very attractive to Prudential.
That's, in a lot of ways, the punchline around the growth opportunity in Japan and why we think it's so compelling. By the way, we continue to gain share in regular life insurance. Those products are extremely profitable for us. While we're emphasizing retirement and generating a lot of retirement-oriented sales, maybe as much as 40% or 50% of our total sales now, we're also continuing to do extremely well in the life insurance market. The point of this is there are things in this Japanese market, a real dynamic that presents a compelling growth opportunity that we've been able now to benefit from over the last couple of years in a really, really big way. You're going to see some sales results in a minute. In fact, you're going to see sales results right now. This is annualized new business premiums in Japan.
We're the 4th largest life insurance company in Japan now, not 4th largest foreign, but 4th largest overall. On the trajectory we're on, you could speculate that there may come a time when Prudential is the largest life insurance company in Japan by sales. 2011 sales you see were phenomenal. We had the addition of Star and Edison. That's a big part of that lift. But over $3 billion of new business premiums. I think in the U.S., Northwestern and New York Life sell around $1 billion. Is that about right? I think so. We're maybe in Japan three times as big as the largest companies in the United States in terms of sales. This is a phenomenal result. You see the mix of the bars here is a graphic representation of my statement that we're a distribution powerhouse.
Life Planners, which are the captive agents in Gibraltar, I mean in Prudential of Japan, Life Advisors, which is the captive agent force in Prudential of Japan, and then the bank channel in yellow and the independent agency channel in purple. We're growing rapidly, particularly in the bank channel. The independent agency channel came in with Star and Edison. That's why there's such a big jump there. This is a graphic representation of that distribution powerhouse story that I told earlier. The financial results are terrific. Since 2007, earnings have gone up by about two-thirds. Big jump as we went from 2010 to 2011, and now making pre-tax AOI, adjusted operating income, of somewhere over $2.5 billion last year. Turning to the U.S., this is much more familiar. I just have a few headlines that I want to hit on in the U.S., starting with annuities.
We've grown a lot, and that's gotten a lot of attention. I want to point out four things about growth in annuities that are important to understand because there's a tendency to migrate to thinking that this is a contest around who has the most attractively priced product with the best bells and whistles and pays the highest commissions. There are really four things I want to highlight here. One is that there's been a lot of turmoil in the market. Some of the biggest providers, which would be companies that are circled on the left, have a lot of assets under management, but not currently leading in sales, have gotten out of the market or significantly reconfigured. As we went through the crisis, companies like Hartford, Hancock, and ING all pulled back dramatically.
There was turmoil and turnover in market share. Pru and Met and Jackson National benefited a lot from that. We've got that element of market share dynamic where the ones that were left grew a lot and gained a lot of share just because they were left, not because they were promoting or doing crazy things with their products. The second element of this for us has been the maturity of channels. This is a picture of our distribution in individual annuities. You see that when sales doubled from 2008 to 2011, the balance of channels also improved. Less weight on the independent channel and more balance around wirehouses and around banks. Part of this for us is the maturity of the wirehouse channel. When we owned Pru Securities, we couldn't sell through the wirehouse channels any Prudential branded products.
We were behind in that channel. The industry was selling about 20% through that channel. We were selling 5%. That channel has matured for us. Again, another lift in sales that's not reflective of crazy pricing or crazy commissions, but a dynamic in the market that's unique to us, which was the maturity of a channel where we now feel like we're sort of getting what you would think of as our fair share. The third element of growth for us over the past few years has been a flight to quality. There's no doubt that coming out of the crisis, some of the stronger companies benefited at the expense of some of the more troubled companies. That also gave us a lift.
I mentioned Pru and Met and Jackson National as the beneficiaries of the market share turmoil, also probably beneficiaries of the flight to quality. There also was a brand issue in here that went beyond the product attributes. The fourth element of this growth story is the product itself. We have a good product. We have a product that's very attractive in terms of the value proposition for clients, but also helpful in terms of the risk management process for us. That has also positioned us distinctively in the market. The point of this is that this growth doesn't reflect the arms race around benefits and pricing and commissions. It reflects turmoil in the market. It reflects the maturity of the wirehouse channel.
It reflects the flight to quality, it also reflects the product that we put on the street and consistent execution around that product. The slide here shows the mix of our annuity portfolio based on three attributes. One is having no living benefits, and that's the top part. The second is having the old package of living benefits, the pure embedded derivative approach to living benefits, that's the green bar. The last is having the package of living benefits that are supported by an asset allocation algorithm within the account of the policy holder, not for Prudential's account. This is our risk mitigation product design that's a huge help to us in terms of the amount of residual equity risk that we take, and particularly the amount of tail risk that's part of this annuity story.
You can see that now the dominant portion of the assets under management and annuities are supported by an asset allocation algorithm as it relates to risk management and helping to manage and defease the obligation in that living benefit package, which is the step-up and then the withdrawal feature that ensures retirement income even if the assets run out. A big important story here, there's little or no tail risk in the portion of the portfolio covered by the blue bar. There's a lot of noise around ±20%, but if the market goes down 20%, stylized view, all the assets will be in fixed income. Account values will stop eroding, and we'll stop having to deal with all the aggravation of all the accounting stuff that goes with it.
There's kind of a stop loss on this that takes the tail risk out and is a huge help. In retirement, the headline stories here fall into two buckets. One is full service retirement is a tough business right now. The market's moving kind of slow. There are not a lot of RFPs. The market is unbundling the product offering and separating technology from consulting advice and all the other parts that it takes to run a retirement business. That's put some pressure on pricing and margins. We've got to rethink our value proposition and particularly the earnings power and how we're going to make money in full service. We make a lot of money in our stable value product, but the unbundling of that offering in the market is putting pressure on this business.
We've talked about it now for a couple of years, thinking about the strategic end game here. Second headline is that things are getting interesting in defined benefit risk transfer. We've actually done a couple of deals, and that's both important and attractive financially. Things have also been very interesting for us in the investment only stable value product where we essentially provide asset management services with a stable value wrapper. That business has grown rapidly. We've added $25 billion of assets under management maybe in that product in the past year and a half. Very attractive returns and very low risk.
While we used to talk a lot more about full service and not so much about the institutional side, right now there's a lot more action in defined benefit risk transfer and in investment only stable value and not quite so much action in the core full service retirement business, which is something that I think everybody's kind of strategically rethinking. Excuse me. This just shows our asset flows. They reinforce the story I just told about what's going on in the market. Finally, I want to comment on asset management. I mentioned that we're big. We're very strong at consistent execution in asset management. We've got an extraordinary record of retaining our portfolio managers and staff. The brand and reputation of Prudential have been a huge help as we've gone through the crisis. You see the highlights on the right-hand side.
We have almost $300 billion of third-party assets under management. That asset under management pool has grown by about 12% a year over the last five years. We've had terrific inflows into asset management reflecting the qualities that are shown on the left-hand side of the slide. Just to put a little bit more behind the asset management picture that I referenced upfront, the total company touches about $900 billion in assets. About $620 billion of that is associated with what we call our asset management business. That's where we run the commercial part of managing assets. It's not everything we do, but the point of this is we have an asset management business that's not a department. It's a real commercial enterprise with $300 billion of third-party money in addition to the money that it manages for the house.
This is just a mix of assets by type. We're active in all the major asset classes, but particularly strong in fixed income, no surprise, as an insurance company. This is the flow picture. We had an extraordinary year in institutional asset flows in 2010 with almost $30 billion of net positive inflows. Again, in 2011, we had more than $15 billion. Continue to do extremely well in asset management. I know I'm running out of time, but this is the end of it. Individual and group insurance, I mentioned as stable cash flow providers, mortality risk driven, potentially attractive margins. They bounce around a little bit, especially group. Over time, we think potentially attractive margins and returns and an important anchor to the overall financial profile and risk profile of the company.
The headline over managing these two is emphasize returns and margins and the quality of the business model. Don't emphasize league tables and market share. Particularly in individual life, we compete with mutuals who play a very different game. We don't go out and chase after them to try to maintain market share in individual life. Rather, we focus on what we do well, and we focus on the margins and the returns that we can generate, and it's worked extremely well for us. I'm probably more than out of time, so I'm going to have to stop there, and I think we're all moving on to whatever's next.
Sure. We'll continue the discussion in Hong Kong Room A. Mark, the one I would just ask you before-
We're in Bangkok Room A. Bangkok?
Bangkok? Okay. I think for the breakout, it's going to be Hong Kong A, then you move over to your one-on-one room. We'll confirm that.
Oh, no. I thought breakout was just a coffee break.
It's Q&A.
Oh.
The one I just wanted to ask you in the couple of minutes we have here would be on the variable annuity side. Clearly, you guys were the runaway leader, if I go back nine to 12 months ago. MetLife sort of catapulted itself above you. Now every indication is Met wants to substantially pull back in that business. My question for you really is, if you don't restructure your product at all from here, in fact, sales do take off again, would Pru be fine with that? I think there is this dynamic of not wanting sales levels to get too robust.
The starting point in thinking about that for us is the margins and the returns and the risks that we're willing to tolerate. We're much more focused on our own agenda and how this fits into what we're trying to do and what would or would not be worried about than we are on market share and the dynamic of Met coming and going and Hartford coming and going, and however those companies currently either introduce products or reprice products. Our agenda wouldn't be so focused on the fact that Met got out. It would be on our own pricing and our own returns and our own risk. We have said that there's a limit to how much risk we want to take in equity sensitive businesses in general, and in businesses that are levered equity sensitive in particular.
We've thought about kind of 25% as an earnings trigger where we would think about exactly how much more of this we wanted. We would pay attention to that, although I'd have to add that 25% was set when we were selling the old embedded derivative products. Now the asset algorithm rebalancing based product has significantly less risk, and as I said, almost no tail risk at all. When we got to 25% under the scenario you're talking about, that would trigger some rethinking, and we'd have to assess our view based on the risk profile of what we're selling and based on the return opportunity. In a way, this is an unfortunate challenge for the business because there's a core here where assets under management grow, and they throw off a lot of fees.
The fee schedules that are attached to assets and annuities are very lucrative. We have that happening, and now up to, in our case, well over $100 billion. Around that, you've got a huge amount of, in many respects, accounting driven volatilities. I'm saying volatilities plural because it comes from a few different places. Accounting driven volatilities that kind of make it hard to see that real core thing building up and throwing off so much in fee-based revenue. That's a long answer, but the point is we would think about the dynamic of earnings mix and the threshold that we've set at which we would run up a red flag and reconsider. We'd have to think about the risk of the product we're selling now and how we view risk and return and the opportunity.
Great. Thanks, Mark. Let's continue the discussion in Hong Kong A.