Prudential 2001 Annual Report Download - page 5

Prude ntial Financ ial 2 00 1 Annual Repo rt 3
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
At 9:5 4 a.m. on
Decembe r 1 3 ,
200 1 , the
le tte rs PRU
rolled across
the NYSE
ticker fo r the
very firs t time,
and Prudential
Financial
officially
entered a
new era as a
publicly o wned
company.
Prudential Financial
Chairman and CEO
Art Ryan