The aim of that paper is to make a research of an annual report of the company, together with the market research and to try to advise the directions for short and long-term periods towards the financing of foreign operations and foreign investment analysis. Market data in the same sphere of business will be used for comparative analysis. Company overview Prudential plc is an international financial services group with significant operations in Asia, the US and the UK. It serves approximately 25 million customers and has 290 billion of assets under management.
The company is one of the best capitalized insurers in the world with an Insurance Groups Directive (IGD) capital surplus estimated at i?? 3. 4 billion. The Group is structured around four main business units: Prudential Corporation Asia, Jackson National Life Insurance Company, Prudential UK and M&G. Operating model of the company allows each of the businesses to stay close to their customers within the framework of a consistent, Group-wide global approach to managing risk, capital, cash, reputation and leadership development and succession.
Prudential Corporation Asia Through its life insurance and asset management operations, Prudential has 28 businesses in 13 countries across Asia. Prudential is a leading life insurer in Asia with a presence in 12 markets and a top three position in seven key locations: Hong Kong, India, Indonesia, Malaysia, Singapore, the Philippines and Vietnam. We provide a comprehensive range of savings, protection and investment products that are specifically designed to meet the needs of customers in each of our local markets.
Prudential’s asset management business in Asia has retail operations in 10 markets and independently manages assets on behalf of a wide range of retail and institutional investors across the region. Jackson National Life Insurance Company Jackson is one of the largest life insurance companies in the US, providing retirement savings and income solutions to more than 2. 8 million customers. Jackson is also one of the top five providers of variable and fixed index annuities in the US.
Founded nearly 50 years ago, Jackson has a long and successful record of providing advisers with the products, tools and support to design effective retirement solutions for their clients. Prudential UK Prudential UK is a leading life and pension’s provider to approximately 7 million customers in the United Kingdom. It has a number of major competitive advantages including significant longevity experience, multi-asset investment capabilities, a strong investment track record, a highly respected brand and financial strength.
Prudential UK continues to focus on its core strengths including its annuities, pensions and investment products where it can maximize the advantage it has in offering with-profits and other multi-asset investment funds. M&G M&G is Prudential’s UK and European fund management business with total assets under management of i?? 174 billion (at 31 December 2009). M;G has been investing money for individual and institutional clients for nearly 80 years. Today it is one of the largest investors in the UK stock market, as well as being a powerhouse in fixed income.
Market Overview Following the global financial crisis of 2008 and 2009, 2010 was marked by a steep recovery in Asia, with economies rebounding significantly and some achieving record growth performance. For insurance buyers in Asia, the conditions continued to be favorable with competition between underwriter, increased capacity in the region and increased demand for cover conspiring to drive rates lower. The insurance landscape in Hong Kong remains extremely competitive, with a significant amount of capacity continuing to flow into the market.
In general, and consistent with other Asian markets, insurance buyers have benefited from this competition with lower premiums, broader coverage and more choice in terms of underwriters1. The Indonesian marketplace continues to be highly competitive, driven by increased capacity and a desire to capture business in this revived star performer in Asia. Indonesia, with a stable government, abundant natural resources (especially oil and gas), has become a favored foreign direct investment destination.
The insurance industry continues to thrive with local and international players growing their capacity. In general, this renewed capacity has kept rates favourable for insurance buyers. However, there are pockets where rises can be expected, especially when it comes to off-shore risk. Singapore enjoys a reputation for being the region’s hub for insurance and reinsurance. The island city-state continues to be a major destination for regional operations of regional and international insurers and reinsurers.
The Singapore market is arguably the most advanced in Asia, with a significant increase in capacity flowing into the region via this regional hub. Like the rest of Asia, insurance buyers in Singapore have benefited from fierce competition between underwriters, with rate reductions occurring at a seemingly unending pace. However, there are some pockets of rate increases in particular lines such as Employers Liability and Workers’ Compensation primarily due to poor loss experience.
The Philippines experienced some of the worst natural catastrophes in its history at the end of 2009, with Typhoon Ketsana causing severe flooding in the heart of Manila, the country’s business and economic centre. As a result, property insurance rates significantly spiked during 2010. Other lines of insurance remained relatively stable, as capacity, competition and demand for cover continued to be well-balanced. Vietnam is truly an emerging market when it comes to insurance, offering plenty of opportunity for local and foreign players.
The market is still relatively immature, with cover being driven primarily by multinational corporations investing or operating in Vietnam. As with most emerging insurance markets, rates tend to be artificially low as insurers compete for business and this remains the case in Vietnam. Vietnam is a market to watch, as local insurers gain technical expertise and international insurers expand their operations, benefiting insurance buyers with plenty of capacity at competitive rates. The China insurance market maintained its fast growth throughout 2010.
In the first six months, premium income from the property insurance business rose 33. 5 percent from a year earlier, even though the Chinese economy faced some difficulties stemming from the global financial crisis and the fragile global economic recovery. In many ways, the North American insurance market in 2010 mirrored 2009. Competition among insurers remained intense, capacity was abundant, and there were relatively few insured catastrophe losses. The end result was a generally stable market in 2010-and one that is poised to be so again in 2011.
As always, however, an insured’s unique risk management strategy, insurance needs, industry issues, and other factors will dictate its relationship to the markets. The insurance industry in US, particularly the life insurance industry, is considered a pillar of the economy, with assets of $4. 6 trillion in 2010. Tied as it is to the public interest, the life insurance industry has been subject to governmental scrutiny and legislation almost since its inception in the eighteenth century.
Life and health insurance accounted for 59 percent of gross premiums for all insurance types in 2010, with the remainder dedicated to property/casualty. According to the American Council of Life Insurers, Americans bought $3. 0 trillion of new life insurance coverage in 2009. The Insurance Information Institute reported that independent agents were responsible for 56 percent of the market, followed by affiliated agents with 36 percent, direct marketers with 3 percent, and others, including stockbrokers, for the remaining 5 percent. By the end of 2009, total life insurance coverage in the United States was worth $19.
1 trillion. Thus, despite the financial problems of the late 2000s, the life insurance business was still a viable aspect of the U. S. economy as the country headed into the second decade of the twenty-first century. 2 As we can see, insurance market all around the world recovering, opening new markets and following new trends. Asia shows the biggest growth since crisis and it will be logical to continue intensive work in countries, where Prudential already has the leading positions widening old and researching the new spheres of insurance business.
Analysis of the investment market and financing of foreign operations Analyzing the world investments market I compile the world investment trends with the strategies of investment banks. The housing “bubble” brought out several issues and questions, concerning trust to US’ financial system. Nowadays, investors are trying to be more independent looking for new spheres of investments. As common spheres of investments still look attractive, there are new trends, which can be take into account.
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