Prudential Financial, Inc., through its subsidiaries, provides insurance, investment management, and other financial products and services in the United States and internationally. The company primarily offers life insurance, annuities, retirement-related, mutual funds, and investment management products and services. It operates through U.S. Retirement Solutions and Investment Management, U.S. Individual Life and Group Insurance, and International Insurance divisions. The U.S. Retirement Solutions and Investment Management division provides individual variable and fixed annuity products; and recordkeeping, plan administration, actuarial advisory, tailored participant education and communication, trustee, and institutional and retail investment services. It also offers brokerage services; guaranteed investment contracts, funding agreements, structured settlement annuities, and other group annuities; and investment management and advisory services to the public and private marketplace. The U.S. Individual Life and Group Insurance division provides individual variable, term, and universal life insurance products to mass middle, mass affluent, and affluent markets; and group life, and long-term and short-term group disability, as well as group corporate, bank, and trust-owned life insurance products to institutional clients. It also sells accidental death and dismemberment, and other ancillary coverages; and offers plan administrative services. The International Insurance division provides individual life insurance, retirement, and related products. The company serves individual and institutional customers through third-party broker-dealers, independent financial planners, financial professionals, third-party financial advisors, brokers, benefits consultants, sales force, wire houses, banks, general agencies, producer groups, life planners, and life consultants. Prudential Financial, Inc. was founded in 1875 and is headquartered in Newark, New Jersey.
Business Analysis of Prudential Financial
The Insurance Sector is witnessing a major shakeup, new age business models in the industry are transforming both customers and businesses. Faced with this uncertainity, companies are investing resources to transform their business. An in-depth business analysis is a valuable resource to identify and articulate the need for a business model change. At R&P Research we believe, the starting point for a business analysis is Benchmarking. Business benchmarking can be done at various levels: 1) Industry Benchmarking 2) Peer Benchmarking 3) Disruptors Benchmarking. In this report, we share the snapshot of how Prudential Financial compares against the industry on the major performance indicators. This analysis, along with peer group/disruptors benchmarking and revenue model understanding can help identify growth and cost optimization opportunities to maximize the value delivered by Prudential Financial to its stakeholders. R&P Research Industry Intelligence Platform provides historical data for last 15 years with an easy to use benchmarking interface for an in-depth comparative business analysis.
Here is the performance snapshot of Prudential Financial with an interactive chart.
- Revenue Growth: Prudential Financial reported a revenue growth of 2.9% year-on-year during 2016. Life Insurance Industry grew at -1.7% in the same period
- COGS share of Revenues: As a percentage of revenue, Prudential Financial spent 67.1% of its total revenues on COGS. Life Insurance industry average (COGS share of revenue) in the same period was 71.2%
- R&D share of Revenues: Prudential Financial R&D share of Revenues details are not available because either company does not share the data or we do not have it
- SG&A share of Revenues: As a percentage of revenue, Prudential Financial spent 20.0% of its total revenues on Sales, Marketing, and General Administration (SG&A). Life Insurance industry average SG&A spending in the same period was 10.6%
- Inventory share of Revenues: Prudential Financial Inventory share of Revenues details are not available because either company does not share the data or we do not have it
- Accounts Payable share of Revenues: Prudential Financial Accounts Payable share of Revenues details are not available because either company does not share the data or we do not have it
- Accounts Receivable share of Revenues: Prudential Financial Accounts Receivable share of Revenues details are not available because either company does not share the data or we do not have it
- PP&E share of Revenues: Prudential Financial PP&E share of Revenues details are not available because either company does not share the data or we do not have it
- Intangibles share of Revenues: Prudential Financial Intangibles share of Revenues details are not available because either company does not share the data or we do not have it
- Net Margins: Prudential Financial Net Margins in the year 2016 were 7.4%. Life Insurance industry average Net Margins in the same period were 4.3%
Sector and Industry Association of Prudential Financial
For the purpose of performance benchmarking of a company with a sector or industry average, R&P Research associates every company with one sector and one industry. An industry consists of companies with related/similar business models. A sector comprises of a group of related/similar industries. For high-level analysis purposes, related/similar sectors are grouped into sector groups.
Prudential Financial is associated with Financials Sector Group, Insurance Sector, and Life Insurance Industry.
Insurance sector is comprised of the following industries: Life Insurance; Property & Casualty Insurance; Surety & Title Insurance; Insurance Brokerage; Diversified Insurance. The definitions for each of the industries is as follows:
- Life Insurance industry includes companies engaged principally in life insurance.
- Property & Casualty Insurance industry includes companies engaged principally in accident, fire, automotive, marine, malpractice and other classes of non-life insurance.
- Surety & Title Insurance industry includes companies providing title & surety insurance.
- Insurance Brokerage industry includes insurance brokers and agencies.
- Diversified Insurance industry includes companies with life, health, property & casualty, and reinsurance interests, none of which predominates.
Industry Ranking of Prudential Financial
With $58.8 billion revenues, Prudential Financial ranked number 2 of all the companies in the US Life Insurance industry. There were a total of 14 public companies in the US Life Insurance industry that had revenues greater than $50 million during 2016.
The top-10 companies in the US Life Insurance industry by revenues during 2016 were:
- MetLife ($63.5 billion)
- Prudential Financial ($58.8 billion)
- Lincoln National ($13.3 billion)
- Reinsurance Group Of America ($11.5 billion)
- Voya Financial ($10.8 billion)
- Genworth Financial ($8.4 billion)
- Torchmark ($3.9 billion)
- American National Insurance ($3.2 billion)
- American Equity Investment Life ($2.2 billion)
- Primerica ($1.5 billion)
Business Model Analysis (BMA) Framework
We use the following framework to assess the business model of a company. Business Model Analysis framework can be used by organizations to articulate growth strategies and identify cost optimization opportunities. Technology and consulting companies can use this framework to identify the value drivers and pain points of their targeted customers. Entrepreneurs can use this framework to understand the language of business and identify promising business opportunities. This framework can be used by any professional aspiring to take up a leadership role to better understand the businesses challenges, articulate growth strategy, and monitor the business improvement requirements for the organization.
- Conduct a holistic benchmarking; to identify and target additional sources of value
- Get in touch with us to learn more about Business Model Analysis Framework
- Get free data, charts, and analysis of Prudential Financialand its peers on select key performance indicators by clicking the reports provided below