Prudential 2003 Annual Report Download - page 66

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Fixed Maturity Securities
Investment Mix
Our fixed maturity securities portfolio consists of publicly traded and private placed debt securities across an array
of industry categories. Our international portfolios are predominantly foreign government securities.
We manage our public portfolio to a risk profile directed by the Asset Liability and Risk Management Group and,
in the case of our international insurance portfolios, to a profile that reflects local market regulations and our
investment competencies in these markets. We seek to employ relative value analysis both in credit selection and in
purchasing and selling securities. The total return that we earn on the portfolio will be reflected both as investment
income and also as realized gains or losses on investments.
We use our private placement and asset-backed portfolios to enhance the diversification and yield of our overall
fixed maturity portfolio. Within our domestic portfolios, we maintain a private fixed income portfolio that is larger
than the industry average as a percentage of total fixed income holdings. Over the last several years, our investment
staff has directly originated more than half of our annual private placement originations. Our origination capability
offers the opportunity to lead transactions and gives us the opportunity for better terms, including covenants and call
protection, and to take advantage of innovative deal structures.
Investments in fixed maturity securities attributable to the Financial Services Businesses were $83.0 billion at
amortized cost with an estimated fair value of $87.4 billion as of December 31, 2003 versus $77.3 billion at amortized
cost with an estimated fair value of $81.9 billion as of December 31, 2002.
Investments in fixed maturity securities attributable to the Closed Block Business were $41.3 billion at amortized
cost with an estimated fair value of $44.6 billion as of December 31, 2003 versus $43.2 billion at amortized cost with
an estimated fair value of $46.2 billion as of December 31, 2002.
Fixed Maturity Securities by Contractual Maturity Date
The following tables set forth the breakdown of our fixed maturity securities portfolio in total by contractual
maturity as of December 31, 2003.
As of December 31, 2003
Financial Services Businesses Closed Block Business
Amortized Cost %ofTotal
Amortized
Cost %ofTotal
($ in millions)
Maturing in 2004...................................................... $ 3,961 4.8% $ 2,319 5.6%
Maturing in 2005...................................................... 6,068 7.3 2,627 6.4
Maturing in 2006...................................................... 5,819 7.0 2,247 5.4
Maturing in 2007...................................................... 5,317 6.4 2,512 6.1
Maturing in 2008...................................................... 6,475 7.8 2,712 6.6
Maturing in 2009...................................................... 5,267 6.3 2,241 5.4
Maturing in 2010...................................................... 5,960 7.2 2,194 5.3
Maturing in 2011...................................................... 6,283 7.6 2,459 6.0
Maturing in 2012...................................................... 4,613 5.6 2,293 5.6
Maturing in 2013 and beyond ............................................ 33,203 40.0 19,689 47.6
Total Fixed Maturities .................................................. $82,966 100.0% $41,293 100.0%
Growing and Protecting Your Wealth64