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Acquisitions Drive Growth in Prudential’s International Business

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Overview

Prudential Financial’s (PRU) International business mainly provides life and retirement products in countries like Japan, Korea, Taiwan, Malaysia, and India in Asia; Argentina, Brazil, and Mexico in Latin America; and Italy and Poland in Europe. In these regions, Prudential competes with Manulife (MFC), Aflac (AFL), and MetLife (MET).

Setting up business operations in fast-growing emerging markets remains a key trend among insurers who primarily operate in mature markets. We outlined this trend in our insurance industry overview An investor’s guide to the insurance business.

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Acquisitions

Prudential Financial is a key player in the Japanese insurance market. Prudential began its Life Planner model in 1988 in Japan, which targets affluent and mass affluent consumers, selling products through an experienced sales force.

In order to grow its business in the market, Prudential made several acquisitions, as shown in the chart above. These acquisitions resulted in increasing the policy count by a factor of 11 and increasing premiums written from new business fourfold. Prudential’s recent acquisitions include AIG’s Star Life and Edison Life businesses in Japan in 2011.

In our next article, we’ll focus on the Japanese insurance market.

Investors interested in gaining exposure to the insurance sector can invest through ETFs like the iShares US Financials ETF (IYF) or the Financial Select Sector SPDR ETF (XLF).

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