BizAims

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.

A Major Innovator in Life Insurance: 1870s--1900s

A Yale dropout named John F. Dryden established the forerunner of Prudential in 1873, naming it the Widows and Orphans Friendly Society. Two years later, influenced by the British Prudential Assurance Company, Dryden changed his company's name to The Prudential Friendly Society (the company settled on its current name in 1877). When Dryden visited British Prudential at this time, he was impressed by several key elements, including the British company's offering of low-cost industrial insurance for laborers; the fact that agents collected premiums each week from customers at home; and that the company served not the wealthy or middle class, but the working class. Unable to find backers in his native New England or New York to build the company he envisioned, Dryden crossed the Hudson to Newark, New Jersey, and convinced several Newark citizens to purchase $30,000 of capital stock.

The first prospectus of the company succinctly set forth its aims: Relief in sickness and accident for people of meager means, pensions for old age, adult and infant burial funds--all goals which corresponded closely to the needs of the diverse ethnic groups then immigrating to the United States. Yet the company's first directors failed to recognize Dryden's vision or organizational talents. As a result, Newark real estate broker Allen L. Bassett was installed as president. His tenure was short-lived, however, and Noah Blanchard, a tanner, took the helm. In 1881, when Blanchard died, the directors finally elected John Dryden president by one vote. He served in that position for 30 years. During those years, he led Prudential to several major innovations and established a corporate culture that marked Prudential for generations.

Under Dryden's leadership, Prudential enjoyed explosive growth. In 1885, it reported 422,671 policies in force; by 1905 it had 6.49 million. Assets grew from $1.03 million in 1885 to $102.38 million in 1905. Prudential expanded to neighboring states, and, in 1909, opened its first international branch in Toronto, Canada. In 1896, the company's advertising department created Prudential's longstanding logo and slogan: the Rock of Gibraltar accompanied by the words, "The Prudential has the strength of Gibraltar." Both were chosen to express the solidity of the products the company offered. The company's image was further bolstered by the outcome of a New York state legislative committee investigation under Senator William W. Armstrong in 1905. While the major companies of the day became targets of the investigation into violation of customer interests, Prudential emerged relatively unscathed.

When Dryden died in 1911, his son, Forrest Dryden, followed him as president. Under Forrest's leadership, the company continued its rapid growth.---Source: fundinguniverse.com