Prudential 2003 Annual Report Download - page 5

Enhancing domestic product and distribution
In July, we reorganized our proprietary mutual funds
under the brand JennisonDryden Funds. This unique
fund family leverages the capabilities of three respected
investment managers with distinctly different invest-
ment disciplines: Jennison Associates, Prudential Fixed
Income and Quantitative Management. As a comple-
ment to JennisonDryden Funds, we offer Strategic
Partners Funds, which feature high-quality investment
managers from throughout the industry. Together,
JennisonDryden and Strategic Partners present extra-
ordinary choice and value for investors and investment
professionals alike.
We also made significant product enhancements in
the domestic life insurance segment, introducing new
Universal Life products and re-pricing our Term port-
folio. As a result, both products now claim a larger
percentage of our sales.
In 2003, we made notable improvements to retail
distribution, growing our third-party channel and
strengthening our own sales force through highly selec-
tive recruitment and rigorous training programs.
In the Group Insurance segment, we continue to seek
controlled growth, retaining and adding business that will
enhance both profitability and scale. The Group
Insurance business delivered strong performance in
2003 and is well positioned for success in the years ahead.
Expanding our powerful international presence
In 2003, our International Life Insurance business had another
very successful year, accounting for more than 40 percent
of the company’s before-tax adjusted operating income.
Our life planner force, made up of highly trained insur-
ance professionals, grew more than 10 percent with
double-digit increases in our two major markets, Japan
and Korea. Globally, new annualized premiums for the life
planner businesses grew 13 percent on a constant currency
basis, with Japan—our largest life planner market—grow-
ing at 20 percent. Our life planner activities continue to
set high standards for service, generating excellent results
in sales, customer satisfaction and earnings.
Gibraltar Life, our traditional Japanese insurance
business, also had a very solid year. On a constant
currency basis, new annualized premiums increased 18
percent and adjusted operating income was 3 percent
ahead of 2002. Gibraltar’s success reflects our dedication
to quality recruitment, sales training and product
enhancement, which has helped stabilize our number of
life advisors and increase productivity.
In the International Investments segment, we con-
tinue to grow assets under management in our major
markets in Mexico and Taiwan, and in our joint ventures
in Italy and Germany. In addition, we announced in
November an agreement to acquire an 80-percent stake
in Hyundai Investment and Securities Company from the
Korean Government. This transaction, which closed in
February 2004, will significantly increase our market
position in Korea and add scale to our overall
International Investments business.
Positioning Prudential
to meet its strategic goals
Prudential Financial is making the right moves to be in
the right businesses at the right time. We are striving
toward leadership positions in growing businesses and
exiting those that have underperformed. We are
extremely diligent about managing capital and reducing
expenses. As a result, the company has made significant
strides to achieve three key goals:
• To be one of the top three life insurers in the world
• To be a top-10 global asset manager
• To be a leader in distribution
Most important, we have demonstrated our resolve
to achieve our goal of 12 percent return on equity (ROE)
in 2005, based on after-tax adjusted operating income,**
and we have made substantial progress toward that goal.
Through the efforts of all our employees, Prudential
Financial has proven over the past two years as a public
company that we can deliver for our investors. Now we
must work hard to sustain investor confidence and build
on it. We will continue to deliver outstanding service to
our 15 million valued customers around the world. We
will grow our businesses domestically and internationally,
striving for excellence in each one. We will strengthen
our powerful brand, assuring that more people world-
wide recognize Prudential Financial as a leader in
growing and protecting wealth. I am confident we have
the talent, the resources and the drive to succeed.
ARTHUR F. RYAN
Chairman and Chief Executive Officer
**See footnote (A) on page 5 and footnote (1) on page 16. Prudential Financial 2003 Annual Report 3