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The Prudential Insurance Company of America is one of the largest diversified financial institutions in the world and, based on total assets, the largest insurance company in North America. Along with its primary business, insurance, the company also operates in securities, investments, residential real estate, employee benefits, home mortgages, and the corporate relocation industry. In 1999 Prudential was in the process of reorganizing as preparation for a transition to demutualization and public ownership, pending regulatory approval, in 2000.

Investment Strategies for the 1960s

Under Shanks, Prudential also revised its investment strategies. Shanks consistently looked for niches where Prudential could risk a small amount yet increase its average return much above that of its competitors. In 1950 the Prudential began buying common stocks and, by 1964, had three percent of its assets in stock on which it realized $75 million in capital gains. The strategy was successful; by 1962, the life insurance industry averaged a return of 4.4 percent on all invested assets. Prudential averaged 4.7 percent, producing an additional $60 million in income for the company. After 1958, Prudential ceased to buy bonds in the market and instead negotiated separate loans with corporations for higher rates on which the corporations received more rapid, less costly, and more flexible financing. In 1956, Shanks created a commercial and industrial loan department to seek out small business loans.

When Shanks retired in 1960, the Prudential board named Louis R. Menagh, Jr., as chief executive officer. At 68 one of the oldest to win the post, Menagh had worked his way to the top from a position as clerk. Menagh retired in October 1962, and the board named Orville E. Beal president. Beal had headed the regional home office in Minneapolis, Minnesota, and was committed to Shanks's bold vision.

In 1964, Beal led Prudential in selling its first group variable annuity policy. These annuities were invested entirely in common stocks and were, thus, a much more attractive hedge against inflation than prior annuities based on bonds, mortgages, and similar investments. In 1967, Prudential surpassed the Metropolitan as the world's largest insurance company; total Met assets amounted to $23.51 billion while Prudential announced $23.6 billion. In 1968, it established PIC Realty Corporation as a wholly owned subsidiary that owned and leased commercial real estate through joint ventures with established real estate developers. Prudential shared additional profits as a principal in real estate development.

Beal stepped down in 1968, the same year the company abandoned its original pay-by-the-week policies, closing an important chapter in the company's history. He turned his leadership role over to Donald MacNaughton, who led the company through some of its most expansive innovations. MacNaughton particularly addressed issues of corporate social responsibility. When Newark suffered terribly after one of the worst urban riots in U.S. history, MacNaughton pledged to use Prudential's resources to help with the problems of urban centers and gave $50 million to Newark. He convinced the insurance industry to pledge $1 billion in help to U.S. cities, an amount later increased to $2 billion. In his nine years as CEO, MacNaughton developed an array of new products for the company and plunged it into the international marketplace, well ahead of most of the competition. In 1969, Prudential celebrated total assets of over $25 billion; when MacNaughton retired in 1978 reported assets were $35.8 billion.---Source: fundinguniverse.com