Prudential Financial wants to make sure its position near the top of the life insurance summit is set in stone. Prudential, known for its Rock of Gibraltar logo, is one of the top US life insurers and also one of the largest insurance companies worldwide. The firm is perhaps best known for its individual life insurance, though it also sells group life and disability insurance, as well as annuities. Prudential also offers investment products and services, including asset management services, mutual funds, and retirement planning. In Asia, the company operates through its Gibraltar Life Insurance unit.
Prudential's US based life and retirement operations account for about 40% of sales. The company also offers international life insurance products in regions including Asia, Latin America, and Europe; this segment accounts for another 40% of Prudential's annual revenues.
The company's domestic operations are conducted through two divisions: US Retirement Solutions and Investment Management (individual and group annuities and asset management) and US Individual Life and Group Insurance (personal and commercial insurance).
Prudential's International Insurance and Investments business offers individual life insurance policies through Tokyo-based Gibraltar Life Insurance to affluent and middle income customers in Asia. Elsewhere it maintains a smaller presence in other parts of Europe and Latin America.
For accounting purposes, Prudential has separated any dividend-producing policies issued prior to its demutualization in 2001. That segment, known as its Closed Block Business, accounts for 15% of the company's revenues.
Sales and Marketing
Prudential distributes its insurance and annuity products through independent brokers and agencies as well as through its force of some 2,500 internal agents. The company's investment products are marketed through an in-house sales force.
Gibraltar Life distributes its products through affinity groups, banks, and from an in-house fleet of Life Planners who target affluent customers and small businesses.
Revenues for Prudential jumped 28% from $38.2 billion in 2010 to $49.0 billion in 2011. The bounce came from international acquisitions made that year. Net income made a more modest increase up to $3.6 billion in 2011.
Prudential's international division is seeking to expand its insurance and retirement operations in emerging markets. It is particularly intent on growing its Asian operations, and plans to double its business there by 2014. To reach that objective, the company has spent close to ten years building up its holdings in Japan through a series of acquisitions.
To expand in China, Prudential is also carefully working on a 50/50 joint venture with a unit of the Chinese conglomerate Fosun Group. The company has already established a joint venture in India, which it also considers a high-growth market.
Following a growing trend among life insurers, the company quit writing new long-term care insurance policies in 2012. While Prudential explained the decision as a desire to focus on its core business, it is likely that it found the business to be too expensive to sustain.
Another event that might become a trend: in 2012 Prudential agreed to take over maintenance of parts of General Motors' pension trust. The move will relieve GM of the work and add to Prudential's payout annuity business.
Mergers & Acquisitions
Prudential's splashiest move was the 2011 purchase of AIG's two Japanese life insurance companies as that company trimmed its international operations. Prudential paid $4.7 billion to acquire AIG Star Life Insurance and AIG Edison Life Insurance and placed them in its Gibraltar Life unit.
Giving some attention to its domestic operations, in early 2013 Prudential completed the acquisition of the individual life insurance operations of The Hartford for some $615 million. The purchase added some 700,000 policies to Prudential's roster and broadened its distribution network and product offerings in the US market.