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Prudential plc

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This article is about the British company. For the unrelated American company, see Prudential Financial. For other uses, see Prudential (disambiguation).

Prudential plc is a British-domiciled multinational insurance and asset management company headquartered in London and Hong Kong.[4] It was founded in London in May 1848 to provide loans to professional and working people.[5]

Prudential plc
FormerlyPrudential Corporation Public Limited Company (1978–1999)[1]
Company typePublic
LSE: PRU
NYSE: PUK
SEHK: 2378
FTSE 100 Component
IndustryInsurance
Founded1848; 176 years ago (1848), in London
HeadquartersLondon, England, UK
Hong Kong, China
Area served
Worldwide
Key people
Services
Revenue Increase $9.371 billion (2023)[2]
Increase $2.097 billion (2023)[2]
Increase $1.712 billion (2023)[2]
Total assetsIncrease $174.066 billion (2023)[2]
Total equityIncrease $17.983 billion (2023)[2]
Number of employees
15,000 (2023)[3]
SubsidiariesEastspring Investments
ICICI Prudential Life Insurance
ICICI Prudential Mutual Fund
Websiteprudentialplc.com

Prudential has dual primary listings on the London Stock Exchange and Hong Kong Stock Exchange, and is a constituent of the FTSE 100 Index.[6] It also has secondary listings on the New York Stock Exchange and Singapore Exchange.

History

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Early history

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The company was founded in Hatton Garden in London in May 1848 as The Prudential, Investment, Loan, and Assurance Association and in September 1848 changed its name to The Prudential Mutual Assurance, Investment, and Loan Association,[7] to provide loans to professional and working people.[5] In 1854, the company began selling the relatively new concept of Industrial Branch insurance policies to the working class population for premiums as low as one penny a week through agents acting as door to door salesmen. The army of premium collection agents was for many years identified with the Prudential as the "Man from the Pru".[5] The company moved to its long-time home at Holborn Bars in 1879 and converted to a limited company in 1881.[5] The building was designed by Alfred Waterhouse, and is built of terracotta manufactured by Gibbs and Canning of Tamworth (c.1878): two of the same driving forces behind the Natural History Museum in London.[8]

Late 20th century

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Holborn Bars—Traditional home of Prudential

The company was first listed on the London Stock Exchange in 1924.[9]

In the mid-1980s, financial deregulation allowed financial institutions to own estate agencies, and Prudential decided to follow early market entrants such as Provident Financial Group plc (Whitegates) and Lloyds Bank (Black Horse Agencies),[10] in summer 1985 by purchasing a long-established and successful Huntingdon-based firm of estate agents, Ekins, Dilley and Handley, for £12 million.[11] This was originally intended as an experiment allowing the company a new route to market for mortgage-linked endowment policies; however after many other financial institutions followed suit, Prudential rapidly started to embark on an acquisition trail which would quickly see it become market leader in terms of number of offices.[12][10] Acquisitions included Chestertons Residential and Earl & Lawrence in August 1986,[13] Edward Bailey & Son in January 1987, The Channel Island Estate Agency Property Shop in February 1987, and Rogers & Clark in May 1987.[14] This was however done at great cost. Although a typical cost of establishing a new estate agency branch was around £75,000–£100,000, Prudential paid a total of £125 million for 337 of its branches: an average cost per branch of £371,000.[15]

In 1986, Prudential acquired the American insurer Jackson National Life.[16] In the same year, amongst many other acquisitions, Prudential Property Services acquired the fifty-two strong chain of Reeds Rains for £24 million.[17]

The collapse of the housing market in the south of England in 1989 brought about a slump in income at Prudential Property Services, which during the first half of 1990 lost £23 million. Prudential had been closing branches, with 100 closing between December 1988 and May 1990. After these losses were announced, another 175 branches closed in July 1990. In May 1991 Prudential sold the remainder of the chain for a total of £13.5 million, representing a 90% loss on the cost of acquisition. Some branches were purchased by their original owners for fractions of the price they had received from the Prudential just a few years earlier.[15] For example, the Prudential Property Services office in Hanwell was originally an independent agency, purchased by Prudential for £200,000: it was subsequently sold off to Rolfe East Estate Agents for £1.[18] The western division of Prudential Property Services was sold to Scottish Widows to join their Connells Estate Agents chain. The northern division[18] was sold in a £3.4 million management buyout reverting to the name, Reeds Rains,[17] the south east division was sold to become Arun Estates,[18] and Chestertons and another region were sold to the Woolwich Property Services.[19][20]

In 1997, Prudential acquired Scottish Amicable, a business founded in 1826 in Glasgow as the West of Scotland Life Insurance Company, for £1.75 bn.[21]

In 1998, Prudential set up Egg, an internet bank in the UK. The subsidiary reached 550,000 customers within nine months, but had difficulty achieving profitability.[22] In June 2000, an initial public offering of 21% was made to allow for further growth of the internet business, but in February 2006 Prudential decided to repurchase the 21% share of Egg.[23] Egg was subsequently sold to Citibank in January 2007.[24] In 1999, M&G, a UK fund management company, was acquired.[25] In June 2000, the company was first listed on the New York Stock Exchange to help focus on the US market.[26]

21st century

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In February 2002, Churchill bought Prudential's general insurance business.[27]

In October 2004, Prudential launched a new subsidiary, PruHealth, a joint venture with Discovery Holdings of South Africa selling private medical insurance to the UK market.[28] In April 2008, Prudential outsourced its back office functions to Capita: about 3,000 jobs were transferred (1,000 in Stirling, 750 in Reading and 1,250 in Mumbai).[29] This significant outsourcing deal, worth an estimated £722m over a 15-year contract, built on Prudential's existing relationship with Capita, who took over its Belfast operation in 2006 along with about 450 employees in a smaller operational restructure.[30]

On 1 March 2010, Prudential announced that it was in "advanced talks" to purchase the pan-Asian life insurance company of AIG, American International Assurance (AIA) for approximately £23 billion.[31] The deal later collapsed, and AIA ended up raising money in an IPO.[32]

In December 2013, Prudential announced the purchase of Ghana's Express Life Company. Express Life was subsequently rebranded as Prudential Ghana.[33] In April 2014, Prudential launched two corporate responsibility initiatives to support education in Ghana: the Prudential Scholarship Programme for more than 500 senior high school students, in partnership with the NGO Plan Ghana; and a scheme to support actuarial science graduates.[34] In September 2014, Prudential purchased Kenyan life insurer Shield Assurance and rebranded it as Prudential Kenya, further expanding the company's presence in Africa.[35] Prudential has since entered six other African countries – Uganda in 2015, Zambia in 2016, Nigeria in 2017, Cameroon, Côte d'Ivoire and Togo in 2019.[36]

On 10 March 2015, it was announced that the CEO, Tidjane Thiam, would leave Prudential to become the next CEO of Credit Suisse.[37] On 1 May 2015, it was announced that Mike Wells, head of the company's US business, would succeed Tidjane Thiam as CEO, on a pay package worth up to £7.5 million.[38]

In August 2017, it was announced that Prudential was to combine its asset manager, M&G, and Prudential UK & Europe to form M&GPrudential.[39]

In November 2017, Prudential announced the change in the name of its joint venture with Chinese investment company CITIC to "CITIC Prudential Life Insurance Company Limited".[40]

In March 2018, Prudential announced that it would demerge M&GPrudential from the Group;[41] the demerger was completed on 21 October 2019.[42]

In 2021, the company demerged its US business leaving it focused solely on African and Asian markets.[43]

As of March 2022, 60 percent of Prudential's head office staff were based in Hong Kong, and fewer than 200 employees were in London.[44]

Operations

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The company has two business units:[45]

  • Prudential Corporation Asia: based in Hong Kong,[46] the business is the largest UK life assurer in Asia. It has had a presence in the continent since 1923 when an overseas agency for life assurance was created in India. Although this was subsequently nationalised, Prudential relaunched in India in 2000 as ICICI Prudential, a 26% joint venture with ICICI Bank. As CITIC Prudential Life, a 50–50 joint venture, they were the first UK company to re-establish a life business in mainland China in 2000. There are also businesses in Cambodia, Mainland China, Hong Kong, India, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Taiwan, Thailand and Vietnam. Prudential's Asian asset management business, Eastspring Investments, has total funds under management of US$247.8 billion.[47]
  • Since 2014 Prudential has been building a multi-product, multi-distribution business in Africa, with operations now in eight countries across the continent, including Nigeria, Ghana, Togo, Cameroon and over one million customers. Nairobi has been the regional office for Prudential's Africa business since 2021.[48][49][50]

Prudential RideLondon

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Prudential were the inaugural sponsor of RideLondon, an annual two-day cycling festival, held for the first time in 2013. The 2017 Prudential RideLondon-Surrey 100 set a new fundraising record for the event, with £12.75 million raised for charity, bringing the total raised by the event to more than £53 million in its first five years.[51]

The event was developed by the Mayor of London and his agencies and is organised by the London & Surrey Cycling Partnership. The main events are a 100-mile professional road race through Surrey and London, and an amateur race along the same route. Participants in the amateur race typically raise money for good causes. The 20,709 finishers in the 2014 event raised more than £10 million for charity.[52] Prudential ended its title sponsorship of RideLondon in 2020.[53]

Senior management

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Key individuals are:

Chair of the Board of Directors Shriti Vadera[54]
Chief Executive Officer Anil Wadhwani[55]
Chief Financial Officer Ben Bulmer[56]
Group Chief Risk and Compliance Officer Avnish Kalra[57]

See also

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References

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  1. ^ "PRUDENTIAL PUBLIC LIMITED COMPANY overview". Companies House. 1 November 1978. Retrieved 23 January 2024.
  2. ^ a b c d e "Full Year Results 2023" (PDF). Prudential plc. Retrieved 20 March 2024.
  3. ^ "Prudential plc" (PDF). Annual Report. Retrieved 15 February 2023.
  4. ^ "Africa the next 'growth engine' for Prudential, says new chief". www.ft.com. Retrieved 2 July 2024.
  5. ^ a b c d "Timeline 1826–1901". Prudential plc. Retrieved 13 December 2013.
  6. ^ "2019 Annual Report" (PDF).
  7. ^ Dennett, Laurie. (1998). A Sense of Security: 150 Years of Prudential. Granta Editions. pp. 18–20. ISBN 978-1-85757-060-1.
  8. ^ Research page including details of many buildings that used Gibbs and Canning terracotta Archived 15 June 2007 at the Wayback Machine accessed 25 March 2012
  9. ^ "Timeline". www.prudentialplc.com. Retrieved 14 October 2024.
  10. ^ a b Ennew, Christine, ed. (1993). Cases in Marketing Financial Services. Oxford: Butterworth-Heinemann on behalf of the Chartered Institute of Marketing. pp. 196–200. ISBN 0750606614.
  11. ^ Dennett, Laurie (1998). A Sense of Security: 150 Years of Prudential. Cambridge: Granta Editions. p. 363. ISBN 185757060X.
  12. ^ Thomson, Richard (22 August 1993). "The lenders fold their cards: Richard Thomson looks into the story behind Abbey National's sale of its disastrous estate agency venture". The Independent. Retrieved 27 March 2020.
  13. ^ Eadie, Alison (8 August 1986). "Prudential buys two estate agencies". The Times. Retrieved 11 May 2020.
  14. ^ George, K D (1988). Mergers and Acquisitions Year Book. Basingstoke: Macmillan Publishers. pp. 68, 116, 402. ISBN 978-1-349-10005-7.
  15. ^ a b Hamnett, Chris (1998). Winners And Losers: Home Ownership in Modern Britain. Abingdon: Routledge. pp. 42–44. ISBN 978-1857283341.
  16. ^ "Prudential P.L.C. To Buy Jackson". The New York Times. 19 September 1986. Retrieved 9 April 2017.
  17. ^ a b Lawson, David (1999). Swiss Financial Giant Backs UK Residential Agents. Property Week, April 1999.
  18. ^ a b c Willcock, John (17 August 1993). "Abbey National sells estate agents for 8m pounds: Two entrepreneurs buy Cornerstone chain after bank's losses since 1987 mount to at least pounds 243m". The Independent. Retrieved 27 February 2020.
  19. ^ Woolwich Property Services Limited (1992). Accounts to 31 December 1991.
  20. ^ Backe-Hansen, Melanie (2018). The History of Chestertons. Chestertons Global Limited.
  21. ^ Pru of Britain in Deal to buy Scottish Life Insurancer. The New York Times, 26 March 1997.
  22. ^ Egg cracks internet for Pru BBC News, 1999
  23. ^ Prudential to swallow the Egg whole. BBC News, 2005.
  24. ^ Pru sells Egg to Citigroup. BBC News, 2007.
  25. ^ Pru pounces on investment rival BBC News, 1999
  26. ^ Prudential goes to New York BBC News, 2000
  27. ^ "Churchill set to cull Pru suppliers". Insurance Times. 31 January 2002. Retrieved 11 May 2020.
  28. ^ Insurance boon for health conscious. BBC News, 2004.
  29. ^ Prudential jobs deal with Capita BBC News, 2007
  30. ^ Prudential outsources 450 jobs in Belfast to Capita Group. The Independent, 17 August 2006.
  31. ^ "Prudential gambles on Asia with $35bn deal". The Guardian. 1 March 2010. Retrieved 18 April 2011.
  32. ^ "Prudential abandons bid for AIA". BBC News. 2 June 2010. Retrieved 25 March 2012.
  33. ^ "Prudential Moves into Insurance in Ghana". The Financial Times. Retrieved 5 December 2013.
  34. ^ "Prudential Increases Capital Base". Business and Financial Times. 25 April 2014. Archived from the original on 3 August 2014. Retrieved 25 April 2014.
  35. ^ Jones, Sarah (16 September 2014). "Prudential Buys Kenyan Insurer in Second African Purchase". Bloomberg Business. Retrieved 16 September 2014.
  36. ^ Taofik Salako (4 September 2017). "UK's Prudential becomes majority investor in Zenith Life Assurance". thenationonlineng.net. Retrieved 4 September 2017.
  37. ^ Milmo, Dan (10 March 2015). "Prudential's Tidjane Thiam to take top role at Credit Suisse". The Guardian. Retrieved 10 March 2015.
  38. ^ Julia Kollewe (May 2015). "Prudential appoints new CEO on £7.5m pay package". The Guardian. Retrieved 26 March 2016.
  39. ^ "Prudential announces merger of M&G and Prudential UK & Europe". FT.com. Retrieved 12 December 2017.
  40. ^ "Prudential changes name of Chinese joint venture". Sina Finance. Retrieved 12 December 2017.
  41. ^ Lucy Burton (14 March 2018). "Prudential unveils radical overhaul as it splits itself in two FTSE 100 firms". The Telegraph. Retrieved 14 March 2018.
  42. ^ Senior City Correspondent, Ben Martin (21 October 2019). "M&G makes its debut after demerger from Prudential". The Times. ISSN 0140-0460. Retrieved 21 October 2019. {{cite news}}: |last= has generic name (help)
  43. ^ "Prudential carve-up set to complete next month". Financial Times. 11 August 2021. Retrieved 13 September 2021.
  44. ^ "Prudential hit by China's zero-Covid policy". www.ft.com. Retrieved 2 July 2024.
  45. ^ "Our businesses". prudentialplc.com. Retrieved 11 May 2021.
  46. ^ "Prudential Corporation Asia – How to contact us". Prudential.co.uk. Archived from the original on 18 December 2013. Retrieved 13 December 2013.
  47. ^ "fact-file" (PDF). Prudential plc. Retrieved 23 May 2018.
  48. ^ Costello, Miles. "Breaking up is the right thing to do at Prudential". The Times. Retrieved 10 February 2021.
  49. ^ "Prudential Plc : Everything you need to know". Insurance Business UK.
  50. ^ "Prudential plc 2020 Full Year Results" (PDF). Prudential plc. Retrieved 3 March 2021.
  51. ^ "Riders raise record £12.75 million for charity in 2017". Prudentialridelondon.co.uk. Archived from the original on 7 March 2016. Retrieved 18 December 2017.
  52. ^ "Prudential RideLondon raises record-breaking £10 million for charity". Prudentialridelondon.co.uk. Archived from the original on 10 February 2015. Retrieved 18 December 2014.
  53. ^ "Prudential to end title sponsorship of RideLondon". cyclingnews.
  54. ^ "The Pru's Shriti Vadera under pressure over conduct". The Times. 13 March 2022. Retrieved 16 February 2023.
  55. ^ "Anil Wadhwani (華康堯) joins Prudential plc as Chief Executive". 23 February 2023.
  56. ^ "Prudential appoints Ben Bulmer as Chief Financial Officer". 31 May 2023.
  57. ^ "Avnish Kalra appointed Prudential CRO in major management reshuffle". Insurance ERM. 10 February 2022. Retrieved 16 February 2023.
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