FINANCE

Financial Analysis of Prudential Financials Inc.

Financial Analysis of Prudential PLC

Prudential PLC Inc.

Prudential PLC Inc. is one of the largest financial institutions in the world. The company offers insurance, investment management services, annuities, retirement services, brokerage services in securities and real estate, and other products through its affiliated companies. One of these affiliates, the Prudential Insurance Company of America, was founded in 1875 by insurance agent John F. Dryden and is the company from which the current organization evolved. Prudential is a holding company. The company, together with its subsidiaries, is an international financial services group with its principal operations in the U.K., U.S. and Asia. The company operates in the U.K. through its subsidiaries, The Prudential Assurance Company Limited, Prudential Annuities Limited, Prudential Retirement Income Limited and M&G Investment Management Limited. In the U.S., the company's principal subsidiary is Jackson National Life Insurance Company. In Asia, the company's main operations are in Hong Kong, Malaysia, Singapore and Indonesia. The company's retail financial products and services principally include life insurance, pensions and annuities, as well as collective investment schemes.

Historical Review

Prudential Financial inaugurated its first office in Newark where it is still maintaining its corporate headquarters. The company took the name of a similarly titled British company, though there was, and is, no affiliation between the two. The company's logo is the Rock of Gibraltar; used for the first time in an 1896 advertisement, "The Rock" is one of the most-recognized brand symbols among U.S. consumers.

Prudential's initial business strategy was to offer industrial life insurance policies, which were priced within reach of people of small means. Other insurance products were added later, such as disability, health, and automobile coverage. In 1981, Prudential expanded beyond insurance with its purchase of the securities brokerage firm Bache Halsey Stuart Shields, later renamed Prudential Securities. In the 1990s, in response to lawsuits and regulatory inquiries arising from its sales practices from the 1980s to the mid 1990s, Prudential made widespread changes in the company's operations, in addition to making restitution payments.

From 1915 until 2001, Prudential was a mutual insurance company, owned by its insurance policyholders, rather than by stockholders. In 2001, the company received approval from its policyholders and the State of New Jersey to convert to a stock company that is to demutualize. Demutualization was completed with the initial public offering at USD 27.50 per share of Prudential Financial common stock on December 13, 2001.

Current Performance

The company started expanding beyond North America into Japan in 1979; Prudential Financials Inc. now has a global presence across the Americas, Asia, and Europe. The company's international businesses use various names, including Prumerica and Dryden. At present, the parent company's name changed from Prudential Insurance Company of America to Prudential Financial, Inc. As of December 31, 2002, Prudential had consolidated assets of USD 293 billion, equity of USD 21.3 billion, and more than USD 1 trillion of individual life insurance in force.

More recently, the firm was able to take advantage of a distressed competitor in AIG ...