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Prudential Financial 2001 Annual Report - page 5 / 172





5 / 172

Message from the Chairman

Our IPO was truly historic—the largest ever in the insurance industry. And it was the culmination of a lot of years of hard work.

To the more than 4 million shareholders of Prudential Financial, I welcome you. And to the 60,000 employees who worked to get us here, I thank you.

Now the real challenge begins. We’re ready.

Drawing on our heritage as an insurance company and an asset manager, we’ve clearly defined our market position as a company that helps clients around the world both grow and protect their wealth.

We’ve introduced strict disciplines around the use of capital and human resources, exiting businesses that do not support our mission and acquiring valuable new businesses that do. And our management process is driven by consistent adherence to measurable, objective results.

We’re improving existing business models and developing new ones to meet the demands of our retail customer base of 11 million households.

Prudential Financial now begins its public life well-capitalized, strategically focused and well-positioned to create value for customers and shareholders. That boils down to two fundamental objectives: growing our businesses and raising our return on equity to market standards.

Transforming the business to create domestic growth.

In the U.S., we believe the keys to growth are threefold:

  • raising the quality and value of our products and services;

  • expanding our distribution capabilities; and

  • increasing productivity.

With these priorities in mind, we’re in the process of an important transformation. We’ve changed the way we build our portfolio of insurance and investment products. Since 2000, we’ve applied a unique, research-driven strategy we call “advised choice,” which makes selective use of outside asset managers to provide investment advice for our products. Additionally, we’ve consolidated our self-managed equity products under the highly regarded Jennison Associates, to bring a stronger growth orientation to our product mix. The result of these changes is a range of products—managed both internally and by others—that meets the marketplace demand for greater choice and objectivity.

We’ve changed the way we deliver investment research and advisory services, focusing on the needs of investors rather than on issuers. We limited our investment banking activities to co-managed roles, simplified our stock rating system, and encouraged greater clarity from our research analysts.

We’ve changed the way we distribute our products, making greater use of third-party distributors than ever before. Of course, our own domestic sales force—more than 9,000 strong—continues to be the backbone of our franchise.

And in recent years, we’ve made steady gains in agent productivity through higher production standards, selective recruiting and improved training. We believe the changes we’ve made in the infrastructure and organization of our field force give us a solid, more cost-effective platform on which to grow.

The blueprint for growth overseas.

Prudential Financial has an exciting international growth story, which started in Japan and has extended to other markets in Asia and around the world. We first entered the Japanese market in 1988, and today we’re one of the country’s fastest growing life insurers.

One key to our success is our “needs-based” business model, which raised the standard for life insurance selling in Japan, and thus contributed to higher

Prudential Financial Chairman and CEO Art Ryan

At 9:54 a.m. on December 13, 2001, the letters PRU rolled across the NYSE ticker for the very first time, and Prudential Financial officially entered a new era as a publicly owned company.

Prudential Financial 2001 Annual Report


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