In January, we relaunched our approach to the insurance sector with a focus on cash distribution capacity (Cash Nexus). After a hiatus to deal with the sector balance sheet topics (assets, real estate and lapse), this note reviews what we learned on cash generation from Pru''s FY22 results. Context: one of the most popular long positions in the insurance sector Our downgrade of Pru to U/P has been one of our most controversial stock calls. Our conversations with investors suggest that Pru remains one of the most popular holdings in the insurance sector. Lifetime surplus emergence increased by 20% in FY22 - but back-end loaded In FY22, the lifetime surplus generation to come from the in-force book grew by c.20%, well above the 9% CAGR since 2010. This is a clear positive - but was largely driven by the movement in bond yields, with the effect most pronounced on outer years. On our basis, the present value grew by 7%. Acquisition capacity of USD4-6bn: about enough for either Indian or Chinese Life JVs Assessing Pru''s surplus capital position is not simple - but we estimate that there''s USD2-4bn that could be deployed, plus the company flagged USD1.6bn of debt leverage headroom. At a stretch, we think this would be just about sufficient to acquire the remaining 50% stake in the Chinese Life JV or the 52% maximum stake build in the Indian Life JV without raising equity (although the group might choose to raise equity for such sizeable deals to maintain balance sheet flexibility). In the context of IFRS d/g and a rate-driven EEV decline - what financial metrics matter? Guidance on IFRS 17/9 suggests op profit in FY22 would have been 19-25% lower. This doesn''t change the fundamentals. But the challenge for Pru, we think, is that the investment community is less clear on what financial metrics really are of fundamental importance. Management uses EEV as their priority reporting metric, but what also became clear in FY22 was how sensitive EEV is to...