Prudential plc (LON: PRU) is a UK-based financial services company with operations in the United Kingdom, the United States and Asia. It operates in the United Kingdom through its subsidiaries, primarily The Prudential Assurance Company Limited (PAC), Prudential Annuities Limited (PAL), Prudential Retirement Income Limited (PRIL) and M&G Investment Management Limited. In the United States, Prudential’s main subsidiary is Jackson National Life Insurance Company. The company also has operations in Hong Kong, Malaysia, Singapore, Indonesia and other Asian countries.
Prudential has two segments: insurance operations and asset management operations. Prudential offers a range of retail financial products and services, and asset management services. The retail financial products and services include life insurance, pensions and annuities, as well as collective investment schemes.
Prudential's new business profit was up 25% to £2.0 billion from £1.6 billion in 2009. IFRS operating profit based on long-term investment returns increased 24% to £1.9 billion from £1.6 billion in 2009.
Sales of Asian life insurance in 2010 were up 23% to £3.5 billion and margins increased to 58% from 57% in 2009. Performance in Asia was driven by Indonesia (up 49%), Malaysia (up 40%), Hong Kong (up 19%) and Singapore (up 37%).
In the U.S., sales of life insurance totaled £1.2 billion compared to £912 million in 2009, with profits rising 15% to £761 million. Prudential took advantage of the extreme dislocation prevalent in the corporate bond market. Jackson has capitalized on the weakened competitive environment in the U.S. life insurance market and has emerged as one of the top three players in the variable annuity market in terms of sales and number two in terms of net flows.
In recent years, Asia has been Prudential's main source of financial growth. The emerging markets of South-East Asia such as Indonesia, Malaysia, Vietnam, the Philippines, Thailand, Hong Kong, and Singapore are particularly attractive. Distribution remains critical to Prudential's business in Asia, with its unique combination of proprietary agency distribution and bank partnerships continuing to deliver excellent results. Prudential is poised to take advantage of the growing wealth of the Asian middle class.
In the United States, 78 million "baby boomers" are set to retire. Prudential is poised to benefit by offering retirement products, such as annuities, to these retirees.
In the U.S., Prudential has maintained its focus on value over sales volume growth, ensuring sales are delivered at highly profitable margin levels. Additionally, the flight to quality during the 2008 Financial Crisis has allowed Prudential's U.S. business to increase sales volumes and market share. Prudential plans to increase its number of licensed agents in the U.S. and registered representatives to more than 130,000.
Prudential, which competes primarily in the U.S., UK, and Asian markets, competes with large insurance and financial services companies from across the world such as MetLife (MET) and Lloyds Banking Group (LYG).