Prudential 2006 Annual Report Download - page 6

PRUDENTIAL FINANCIAL, INC. 2006 ANNUAL REPORT
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In our International Insurance and Investments division, we
remain focused on building complementary insurance and asset
management businesses in key countries, including Japan, Korea,
Taiwan and Mexico. And we remain committed to continuing to
grow these businesses both organically and through opportunistic
acquisitions. Results for this division since our IPO in 2001 show
our success—over the past five years, before-tax adjusted operating
income for the division has nearly tripled to $1.57 billion.
Our international operations are another example of our work
to build complementary businesses that contribute to
Prudential’s overall strategy while also supporting one another
as they grow. By developing both insurance and investment
operations in key countries, we’ve gained a higher profile in
each individual marketplace, building on our already-strong
brand. We also have the opportunity to leverage and integrate
related operations and functional activities across these
businesses, offering the potential for additional cost savings and
efficiencies in the future.
We are committed to developing the long-term growth potential
of our international businesses. That’s one reason we’re investing
in exciting new markets in Latin America and China, where we
believe we can successfully export strategies and business models
that have served us well in Japan, Korea and Taiwan. Our
successful Life Planner business at Prudential of Japan, which
has been operating for nearly 20 years, is one example of the type
of record of achievement we seek to emulate.
For 2006, our International Insurance business had more than
$1.12 billion in annualized new business premiums and more
than 7 million total policies in force. The strength of our Life
Planner business—which relies on a distribution force of well-
educated, highly trained life insurance sales professionals—is the
driver behind this success. That’s one reason why we put
tremendous resources into growing our force of Life Planners,
increasing their numbers from about 4,000 at the end of 2001
to more than 5,800 by the end of 2006. And the needs-based
sales approach employed by our Life Planners translates into very
high policy persistency. The combination of increasing numbers
of Life Planners, strong sales and good persistency rates provides
a foundation for sustained revenue growth in this operation.
We’re also enjoying success in Gibraltar Life, our traditional life
insurance business in Japan. Before-tax adjusted operating
income for Gibraltar Life amounted to $493 million in 2006,
and our force of Life Advisors, who support this business, grew
to over 5,900, compared with approximately 5,400 at year-end
2005. We’re also seeing sustained high rates of persistency in the
Gibraltar operation, which, along with Prudential of Japan, our
flagship Life Planner operation, boasts some of the highest
persistency rates in Japan.
In 2006, we incorporated a new life insurance company in
Mexico, the eighth country in which we will sell protection-
oriented life insurance products through Life Planners. This new
venture joins our other existing businesses in Mexico, which
include a mutual fund operation, a pension joint venture, a real
estate investment business, and a relocation operation. The
addition of insurance offerings and expanded investment
capabilities will better position us to help consumers grow and
protect their wealth in this exciting market.