Prudential Financial Inc. Overview

Prudential Financial Inc.

Financial services like mutual funds, annuities, life insurance, investment management, and retirement-related services are offered by Prudential Financial Inc. Individual variable annuities, fixed annuities, individual variable life insurance policies, term life insurance policies, group life insurance policies, long-term and short-term group disability insurance policies, and universal life insurance policies are among its offerings. It also provides administrative services for qualified and non-qualified retirement plans, as well as pension risk transfer solutions, guaranteed investment contracts, structured settlement annuities, investment-only stable value products, and funding agreements. Through proprietary and third-party distribution networks, it offers these goods and services to private and business customers. Asia, Europe, and North America are where the business is based. The United States headquarters of Prudential is in Newark, New Jersey.

The Prudential Friendly Society was first established in 1875 in Newark, New Jersey, and later changed its name to the Prudential Friendly Society. John F. Dryden, who later served as a U.S. senator, established it. It was the first company in the United States to make life insurance for working-class people affordable. With some weekly premiums as low as three cents, the company sold Industrial Insurance, which covered funeral and burial costs for low-income families. When Prudential issued its 5,000th policy in 1876, it marked a policy growth. Julia Babbit became Prudential’s first female life insurance agent later that same year. The company was renamed The Prudential Insurance Company of America in 1877. In 1879, four years later, Prudential’s sales grew to include New York City and Philadelphia in addition to New Jersey, and the company’s clientele grew to include the newly formed middle class. Assets reached $1 million as sales grew. John Dryden bought Prudential’s one millionth policy in 1885.bThe property at Bank and Broad Streets in Newark, which would be used to build Prudential’s headquarters, was purchased later that year. Additionally, it changed its name to “The Prudential Insurance Company of America”. Later, in that same year, Prudential used the Rock of Gibraltar as its company symbol to symbolize the strength and safety it provided to its customers. Prudential’s president was John Dryden until 1912. His son, Forrest F. Dryden, who served as president until 1922, took his place. At the turn of the 20th century, Prudential and other significant insurers made the majority of their profits from industrial life insurance, also known as insurance that was sold house to house by solicitors in slums and urban areas. Industrial workers paid twice as much as other people for standard life insurance, and as few as one in twelve policies matured due to high lapse rates. Prior to 1915, Prudential was a mutual insurance company owned by its policyholders. Now, it is a joint stock company. It is currently traded under the symbol PRU on the New York Stock Exchange. On December 13, 2001, the Prudential Stock was issued and began trading on the New York Stock Exchange. Large-scale security measures, including concrete barriers outside the building and internal X-ray machines, were implemented on August 1, 2004, when the U.S. Department of Homeland Security announced the discovery of terrorist threats against the Prudential Headquarters in Newark, New Jersey. Prudential and China Everbright Limited established a joint venture that same year. By 2017, Prudential had established a solid foundation of expertise in asset management and life insurance. Today, they provide a wide range of financial services, including life insurance, annuities, mutual funds, investment management, and retirement-related services, to individuals and businesses in the United States, Asia, Europe, and Latin America.

The stock brokerage service Bache & Co. was acquired by the company in 1981 and remained a wholly owned subsidiary until 2003, when Prudential and Wachovia combined their retail brokerage operations to form Wachovia Securities, with Prudential holding a minority stake. Aetna purchased Prudential HealthCare, Prudential’s healthcare division, for $1 billion in 1999.

American Skandia, the largest distributor of variable annuities through independent financial professionals in the United States, was officially acquired by Prudential on May 1, 2003. Wade Dokken, the chief executive officer of American Skandia, collaborated with Goldman Sachs to sell the division to Prudential for $1.2 billion. American Skandia variable annuities and Prudential fixed annuities were part of Prudential’s plan to acquire businesses that complement one another and help people reach their retirement goals.

The retirement division of CIGNA Corporation was acquired by the business in April 2004. Prudential sold Wells Fargo & Co. its minority stake in Wachovia Securities Financial Holdings LLC toward the end of 2009, and Prudential sold Prudential Bache Commodities, LLC to Jefferies in 2011.

For a total of $4.8 billion, the business acquired AIG Edison and AIG Star in Japan from American International Group, Inc. (AIG) in February 2011. Prudential’s Asian operations were bolstered by this acquisition, which also provided AIG with funds to repay the federal government for its 2008 bailout.

The individual life insurance business was sold to the company by The Hartford in January 2013 for $615 million in cash. 700,000 in-force life insurance policies with a face value of approximately $135 billion are included in the acquisition. Prudential generated additional revenue from life insurance as a result of this move.

The company agreed to purchase online startup Assurance IQ Inc. for $2.35 billion in September 2019. Industry commentators believe Prudential paid too much for the acquisition of Assurance because the company’s financial results have fallen short of expectations.

The Securities and Exchange Commission (SEC) was looking into claims of fraud against Prudential Securities Incorporated (PSI), which was once a part of Prudential Financial. The largest fraud discovered by the SEC in the United States’ history up to that point was PSI’s defrauding investors of close to $8 billion during the investigation. The SEC alleged that Prudential blithely ignored a 1986 SEC order to overhaul its internal securities law enforcement and allowed rogue executives to massively defraud customers. The deals cost approximately 400,000 individual investors money. Prudential Financial reached a $330 million settlement with investors in 1993. Customers in the United States who lost money on Prudential’s limited partnerships in the 1980s would be reimbursed, the insurance company stated. The company was also required to pay $41 million in additional fines. The National Association of Securities Dealers’ investigations of the company were also settled as part of the settlement.

Millions of Prudential customers who had been sold unnecessary life insurance by Prudential agents over a 13-year period beginning in 1995 settled a class action lawsuit in 1997. Customers would receive an estimated $2 billion in direct refunds and enhancements to existing policies as part of the settlement. Prudential and its clients, as well as insurance regulators in 30 states, had engaged in extensive negotiations for the settlement. In early 1997, Prudential agreed to pay a $35 million fine to settle state allegations of deceptive sales practices. Prudential acknowledged that its agents had erroneously persuaded customers for more than a decade to cash in old policies and purchase new ones in order to earn additional sales commissions.

• 24.37% more than in 2020, Prudential Financial generated $70.934 billion in revenue in 2021. As of June 30, 2022, Prudential Financial had revenue of $64.301 billion, a decrease of 0.03% year-over-year.
• The annual operating income of Prudential Financial in 2021 was $9.381 billion, a 3004.33% decrease from 2020. For the twelve months ending June 30, 2022, Prudential Financial operating income was $2.568 billion, a 69.91 percent decrease from the previous year.
• Net income for Prudential Financial in 2021 was $7.724 billion, a decrease of 2165.24 percent from 2020. For the twelve months ending June 30, 2022, Prudential Financial net income was $2.142 billion, a decrease of 70.63 percent year-over-year.
• In 2020, Prudential Financial shareholder equity was $68.21 billion, an increase of 7.05 percent from 2019. Shareholder equity for Prudential Financial in 2021 was $62.608 billion, an 8.21% decrease from 2020.
• Prudential Financial had 41,671 employees in 2020.