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.

The Move to Go Public in the Year 2000

In 1998, Ryan went before New Jersey's insurance commissioner to lobby for passage of a law that would allow a mutual insurance company to sell shares to the public. Under Ryan's plan, the company would change its corporate structure so that it could raise money by selling stock. Detractors of the plan, such as the insurance director for the Consumer Federation of America, argued that it would enrich management via stock options, while causing policyholders to lose out in the form of lower dividends. In 1999, in preparation for becoming a stock-owned firm, Prudential undertook another reorganization, dividing its businesses into international, institutional, and retail units. The firm's life, property/casualty, mutual fund, and investment products fell within the retail unit, while group life, 401k and other employee benefit products became part of the institutional unit.

To focus on insurance and financial products, Prudential divested some of its business, including healthcare operations, which it proposed to sell to Aetna for $1 billion. In late 1998, it had announced its intention to pull out of unprofitable Medicare markets, dropping coverage for about 20 percent of its seniors in the SeniorCare program by refusing to renew Medicare-risk contracts in northern and southern California; Maryland; Washington, D.C.; New York; New Jersey; and parts of Florida. Also in 1999, Prudential began rapid global expansion; early that year, it opened a mutual fund company with Mitsui Trust & Banking Co. in Japan, acquired a license to open an office in Poland, and launched new insurance companies in Argentina and the Philippines.

Prudential ranked as the largest life insurer in terms of assets in the United States in 1998. It placed second in net premiums written that year and occupied sixth place in annuity sales during the preceding three years. About 55 percent of the company's earnings came from the sale of insurance, which grew by 21 percent in 1998, while 45 percent came from its investment and securities businesses. As it approached the 21st century, Prudential faced competition not only from a host of domestic giants, including Citigroup, MetLife, and Merrill Lynch, but from the overseas financial service titans as well.

Principal Subsidiaries: Gifford Fong Associates, Inc.; Merrill Lynch Mortgage Corporation; PIC Realty Canada, Ltd,; PRUCO, Inc.; PRICOA International Bank, S.A. (Luxembourg): The Prudential Life Insurance Company, Ltd. (Japan); AMODA, Sdn. Bhd. (Malaysia; 40%); HSG Health Systems Group Limited (Canada); Jennison Associates Capital Corp.; PRICOA Vita S.p.A. (Italy); PRUCO, Inc.; PRUCO Life Insurance Company; Premisys Real Estates Services, Inc.; PRUCO Life Insurance Company of Illinois; Prudential Fund Management Canada Ltd.; Prudential of America General Insurance Company (Canada); Prudential Overseas Funding Corporation N.V. (Netherlands Antilles); U.S. High Yield Management Company; Prudential Realty Securities II, Inc.; Prudential Special Equity Fund (Luxembourg; 47%); PruServicos Participacoes, S.A. (Brazil); Tesseract Corporation; The Prudential Insurance Company of Korea, Ltd.; The Prudential Insurance Company of New Jersey; The Prudential Investment Corporation; The Prudential Life Insurance Company of Arizona; The Prudential Real Estate Affiliates, Inc.; Prudential Mutual Fund Management, Inc.---Source: fundinguniverse.com