Prudential Financial Essay ⋆ Business Essay Examples ⋆ EssayEmpire

Prudential Financial (Prudential Financial, Inc.), as a holding company, is one of the biggest insurance companies in the United States. The company offers a variety of financial products and services, including life insurance, mutual funds, annuities, pension and retirement-related services, asset management, banking and trust services. Prudential Financial operates largely in the United States, but also in over 30 other countries. Prudential Financial incorporated in 1999 and now employs around 40,000 people (as of January 1, 2008). Its headquarters is located in Newark, New Jersey. Prudential Financial is quoted in the New York Stock Exchange with the ticker symbol of PRU. It has approximately 2.5 million shareholders (as of January 1, 2008).

Prudential Financial generates its revenues from four business divisions: insurance (28 percent of its revenues in 2006), investment (22 percent of its revenues in 2006), international insurance and investments (26 percent of its revenues in 2006), and closed block business (24 percent of its revenues in 2006).

The insurance division includes Individual Life, Individual Annuities, and Group Insurance segments. The Individual Life segment provides individual variable life, term life, universal life, and nonparticipating whole life insurance products. The Individual Annuities segment offers individual variable and fixed annuity products through independent financial planners, banks, and agents. The Group Insurance segment provides group life, long-term and short-term group disability, long-term care, and corporate and trust-owned life insurance products to institutional clients.

The investment division includes Asset Management, Financial Advisory, and Retirement segments. The Asset Management segment provides investment management and advisory services, mutual funds, and other structured products. The Financial Advisory segment provides trading, investment services, equity sales, and research operations. The Retirement segment provides recordkeeping, actuarial advisory services, planning, communication services, and institutional and retail investment funds to public, private, and not-for-profit organizations.

The company’s international insurance and investments division offers private banking, proprietary and nonproprietary asset management, and investment advice and services to high-net-worth retail clients and to institutional clients in certain international markets. The international insurance and investments division includes international insurance and international investments segments. The international insurance segment provides individual life insurance products to foreign countries.

The company’s closed block business is managed separately from its financial services business. The segment includes the closed block assets and certain related assets and liabilities, including its “IHC debt.” Prudential Financial has numerous subsidiary companies. These include, but are not limited to, Prudential Equity Group, Pruco Securities, Prudential Investment Management Services, Pruco Life Insurance Company, Pruco Life Insurance Company of New Jersey, and the Prudential Insurance Company of America.

Prudential Financial was founded in 1875 to operate as a provider of industrial insurance to workers and people of limited means. During the 1950s, Prudential Financial established regional home offices across the United States to reinforce its operations. Its common stock began trading on the New York Stock Exchange in 2001. The company reorganized its operations into four divisions in 2002. Prudential Financial preferred to grow by acquiring other insurance companies. As a result, it acquired Jennison Associates Capital Corporation in 1985; acquired Kyoei Life Insurance, a Japanese stock life insurance company in 2001; and acquired Aoba Life Insurance Company of Japan in 2004.

There are many reasons why Prudential Financial is successful. First of all, the company has a diversified product portfolio, including a range of financial products and services to various client segments. A wide collection of services enhances the company’s cross-selling opportunities. The second reason is Prudential Financial is one of the largest financial services companies in the United States. The company’s leading market position gives it a competitive advantage against its rivals. The company also owns a multi-net-work distribution channel, including advisers, fee-based consultants, specialized consultants, independent financial planners, insurance agents, banks, and direct channels. This strong distribution network provides Prudential Financial with many profitable opportunities.

Bibliography:

Prudential Financial, www. prudential. com (cited March 2009);
SEC-EDGAR, www.sec.gov (cited March 2009).

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