Prudential Essay ⋆ Business Essay Examples ⋆ EssayEmpire

Prudential plc is a holding company headquartered in London, England, created in October 1999. The company was founded in 1848 as the Prudential Mutual Assurance Investment and Loan Association and provided loans secured by life insurance to professional people. Prudential became a limited company in 1881 and became a public company listed on the London Stock Exchange in 1924. In June 2000, it also listed its shares on the New York Stock Exchange.

As of December 31, 2007, Prudential listed approximately 75,948 shareholders. It is an international retail financial services company currently managing over £267 billion in funds derived from its customers, policyholders, and clients in Asia, the United States, and the United Kingdom. Prudential plc employs over 28,000 people around the world. The Prudential company is structured around four core business units: Prudential Corporation Asia, Jackson National Life Insurance Company, Prudential UK, and M&G. Group. Strategy, reputation management, cash and capital management, leadership development and succession, and other core functions are handled centrally.

Business Units

Prudential Corporation Asia was formed in 1994 in Hong Kong as a regional head office. Prudential Corporation Asia currently has life insurance and asset management operations in 13 markets across Asia: China, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, the Philippines, Singapore, Taiwan, Thailand, Vietnam, and the United Arab Emirates. Prudential Corporation Asia serves over 10 million customers in these markets, with some 410,000 agents providing savings, investment, and protection products tailored to each local market. Its top life insurance markets in Asia (as a percentage of total new life business) for 2007 were Korea (19), Taiwan (18), India (13), Hong Kong (13), and Singapore (10). Prudential Corporation Asia manages 17.4 billion pounds worth of branded mutual funds (equities, fixed income, private equity, and structured products) for retail investors, and manages £19.6 billion of institutional and internal assets. Its top retail mutual funds markets in Asia (as a percentage of total new business) for 2007 were Japan (250), India (21), Korea (20), Taiwan (12), and Singapore (7). Prudential Corporation Asia has strategic partnerships with CITIC Group in China, ICICI Bank in India, and the Bank of China International in Hong Kong.

The Jackson National Life Insurance Company was named after Andrew Jackson, the seventh president of the United States, and was founded in Jackson, Michigan. In 1961 Jackson was acquired by the Prudential Group in 1986 and is now headquartered in Lansing, Michigan. Jackson National Life Insurance Company provides products and services in all 50 states as well as the District of Columbia. Jackson provides variable annuities, fixed annuities, fixed index annuities, term insurance, and life insurance targeted to clients in the mass and mass-affluent markets in the United States through independent broker-dealers, regional broker-dealers, independent financial agents, and financial institutions. In 2005 Jackson acquired the Life Insurance Company of Georgia (now JNL Southeast Agency) with more than 100 career agents who also sell its products directly to customers residing in the southeastern United States. Jackson also sells institutional products such as guaranteed investment contracts (GICs), funding agreements, and medium-term notes (MTNs). Jackson’s Curial Capital subsidiary provides financial professionals with fee-based separately managed accounts (SMAs). Jackson’s affiliated network of independent broker-dealers, National Planning Holdings (NPH), is the investment holding company for four firms: INVEST Financial Corporation, Investment Centers of America, SII Investments, Inc., and National Planning Corporation.

M&G originated in 1901 as the Municipal and General Securities Company and was acquired by Prudential in 1999. M&G is Prudential’s European fund management business, with assets of some €167 billion (of which some €116 billion are internal corporate funds). M&G now runs operations in Germany, Austria, Luxembourg, Italy, France, Switzerland, and South Africa. M&G is composed of the M&G Asset Management business and Prudential Capital (renamed in 2007 Prudential Financial). M&G manages about €22.3 billion of retail assets invested in equities, fixed income instruments, and property. Its retail business offers open-ended investment companies (OEICs), investment trusts (ITs), individual savings accounts (ISAs), personal equity plans (PEPs), and mutual funds to investors in the UK, Europe, Asia, and South Africa.

Prudential Portfolio Managers (PPM) is the management entity for Prudential’s institutional funds. M&G manages some €28.9 billion of institutional assets for pension funds, insurance companies, and other financial institutions. It offers both segregated funds and pooled funds, as well as structured and private finance products. PPM Ventures provides private equity finance through offices in London, Paris, Munich, and Sydney. Prudential Property Investment Managers (PruPIM) is the property investment part of M&G with global property investments, including its Singapore joint venture Asian property fund entity, PRUPIM.

Prudential UK provides retirement savings and income solutions for its seven-plus million retail customers in the United Kingdom. These products and services include individual annuities, individual and corporate pensions, lifetime mortgages, and health insurance. The company also operates selectively in the wholesale market for insurance through bulk and back-book buyouts that appear actuarially favorable. Prudential UK uses a number of channels to reach customers: direct (telephone, mail, and internet), financial advisers and partnerships, and business-to-business advisers and consultants.

As suggested by its name, Prudential seeks to secure profitable growth through long-term value while acting responsibly with integrity. For its fiscal year 2007, Prudential delivered a European Embedded Value (EEV) calculated operating profit from its long-term business of 15.4 percent, about £2,542 million, and its International Financial Reporting Standards (IFRS) calculated an operating profit about £1,213 million. The operating profits by business unit for 2007 were as follows: Prudential Corporation Asia accounted for 41 percent of the EEV operating profits and 17 percent of the IFRS profits; Jackson National Life Insurance Company accounted for 25 percent of the EEV operating profits and 30 percent of the IFRS profits; Prudential UK accounted for 34 percent of the EEV operating profits and 36 percent of the IFRS profits; and M&G accounted for 17 percent of the IFRS profits.

Bibliography:

Prudential plc, www.prudential.co.uk (cited March 2009).

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