Prudential Retail Financial Services

“With one in six of the UK adult population as Prudential customers, we have an exceptional customer base which provides us with immense opportunities for expansion.” John Elbourne, Chief Executive, Prudential Retail Financial Services.

Prudential Retail Financial Services comprises four business units: Prudential Retail (with its 3,000-strong direct salesforce), Life and Pensions, Annuities and General Insurance.

In last year’s Annual Report, we set out some of the challenges faced by our retail businesses. Not least amongst these was to ensure the highest level of compliance and to complete the first phase of the personal pensions review. On both of these major issues, excellent progress has been made: the overhaul of the compliance function has progressed to such an extent that we were able to recommence selective recruitment to the direct salesforce in December. We were also amongst the first companies to complete Phase I of the pensions review process and Phase II has started well.

1998 has seen major restructuring of Prudential Retail Financial Services. The appointment of new managing directors of Retail and of Life and Pensions as well as other changes in senior personnel are designed to set the foundation for strong performance in the new Millennium. Our focus is on building long-term, profitable customer relationships by offering a high quality of advice and levels of service across a broad range of financial products.

Central to this reorientation has been a thorough review of the direct salesforce. The branch network has been streamlined to provide effective support for a smaller salesforce and we are now in the first stages of selective recruitment of financial consultants. As announced earlier this year, we moved away from commission-based remuneration for the salesforce, to a pay scheme which rewards quality of advice and high levels of customer service. The proposals, formulated in partnership with the National Union of Insurance Workers, were accepted in a ballot of the direct salesforce and will come into force in April 1999.

Jonathan Grant, voted Financial Adviser’s Company Representative of the Year, meeting with his clients John and Barbara Parker.

Underlying these changes is a commitment to providing the highest quality objective financial advice. Customer research shows that 80 per cent of our existing customers place a high value on face to face contact with our consultants. The relatively low level of general financial awareness, coupled with the increasing perceived need to make long-term financial provision, means that the need for financial advice is greater than ever before. It is our clear objective to be the leading provider of such a service.

Currently one in six of the UK adult population is a Prudential customer. That exceptional customer base provides us with immense opportunities for expansion through new products and new distribution channels which meet customers’ individual needs in new ways. Substantial progress has been made towards turning the salesforce into an integrated marketing operation and we are making significant investment in new technology both to upgrade our customer databases and to enhance computer links to the salesforce.

Sales and Profit
Weighted sales of long-term insurance products through Prudential’s direct salesforce were unchanged in 1998 at £306 million. Weighted sales of investment products have fallen from £86 million to £23 million following the decision to withdraw from the regular premium PEP market.

Profit of £333 million was three per cent ahead of 1997, with a corresponding increase in both the long-term and general insurance business.

Direct Salesforce Weighted New Business Premiums (£m)		Direct Sales Consultants (no.)

For more information, please visit Prudential’s website: www.pru.co.uk