British Multinational Life Insurance Commerce Essay

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Prudential Plc. is a British multinational life insurance and financial services company headquartered in London, United Kingdom. It was founded in London in May 1848 as The Prudential Mutual Assurance Investment and Loan Association to provide loans to professional and working people. Prudential's largest division is Prudential Corporation Asia, which has over 15 million customers across 12 Asian markets and is a top-three provider of life insurance in Hong Kong, India, Indonesia, Malaysia, Singapore, the Philippines and Vietnam. Its Prudential UK division has around 7 million customers and is a leading provider of life insurance and pensions in the UK. Prudential also owns Jackson National Life Insurance Company, which is one of the largest life insurance providers in the United States.

Prudential Assurance Malaysia Berhad (PAMB) was established in Malaysia in 1924 which is a part of Prudential Plc of the United Kingdom. In 1994, Prudential Corporation Asia, Regional Headquarters was established in Hong Kong and in 1997, Prudential Corporation became first life insurer to launch an investment-linked product which is known as Prudential Investors Account, a single premium linked product. In the year 2000 Prudential Corporation forms partnership with London based international bank, Standard Chartered.In the year 2001, PAMB Officially launched new Head Office, Menara Prudential which is situated at the Golden Triangle of Kuala Lumpur city centre.

Currently the Chief Executive Officer of PAMB is Charlie Oropeza. As an innovative leading insurer, PAMB serves the savings, protection and investment needs of Malaysians by offering a full range of financial solution through its 43 branch nationwide. PAMB offers wide range of insurance service such as medical and health insurance, retirement annuity, travel insurance, house owner insurance, investment link insurance, life insurance and personal accident insurance. Other than that, PAMB also provides takaful service which is protection plan based on syariah principle. Takaful service provided by PAMB is investment link takaful, medical and health takaful, motor takaful, family takaful and house takaful.


In Chapter 10, we discussed about the issues regarding to motivating and rewarding employees. What is motivation? Motivation is a process by which a person's efforts are energized, directed, and sustained toward attaining a goal. As we all known, not all individuals can be driven with the same motivational drive. In this case, the company that we are studying is the well known insurance company known as Prudential.

The insurance agents that work under this great organization are ranging from the age of 18 to retired old folks. Working with multiple generations in one huge organization, the top management of the organization has to learn how to set up a correct objectives and appropriate rewards in order to motivate the employees. Regardless of which generations you are originated from, money is always a crucial element in order to survive. Just like other direct sales companies, commissions are given to agents for every successful insurance contract. Commissions given aren't just limited for once. Agents are allowed to collect commissions every time their clients pay. Will commissions collected till the day the client end their contract? The answer is no. The agents are only allowed to collect the commissions for 6 years starting from the year the contract was signed by the clients. The commissions collected for the first year of the contract is the highest regardless of which insurance policies. On the following years, the commission percentage will drop. In order to maintain a constant income, agents will be motivated to get more and more clients to maintain their current income.

There are three vital elements of motivation, namely Energy, Direction and Persistence. The energy element is a measure of intensity or drive. A motivated person puts forth effort and works hard. However, the quality of the effort must be considered as well as its intensity. High levels of effort don't necessarily lead to favorable job performance unless the effort is channeled in a direction that benefits the organization. Assuming that an insurance agent is working real hard on understanding the insurance policies introduced by his insurance company but he had never contacted any potential policyholder, does it benefits the company in any sense? Effort that's directed toward, and consistent with, organization goals is the kind of effort every organization want from the employees. Finally, motivation includes a persistence dimension. Organizations will want employees to persist in putting forth effort to achieve those goals.

In Prudential, they use a lot of ways to motivate their agents to channel in more and more effort into this industry. Just like a normal company, there are specific ranking in Prudential. Once you achieved a specific target of sales, you are allowed to get your own agents to work on behalf of you. When you have agents under your supervision, their performance will also affect your income. Their commissions are also considered as part of your monthly income. Well of course it's a huge amount of sales that is considered quite a long way to go. In Chapter 10, we learnt Goal-setting Theory which tell us that specific goals do increase performance of employees while difficult goals, when accepted, result in higher performance than do easy goals.

There are varieties of understanding on the Theories of Motivation. Abraham Maslow's Hierarchy of Need Theory, Douglas McGregor's Theory X and Theory Y and Frederick Herzberg's Two Factor Theory (also called motivation-hygiene theory) were introduced in the early 90's and it's still widely used in nowadays. In Herzberg's Two-Factor theory, it is divided into two parts - hygiene factors and motivators. Prudential has made full use of this theory by introducing a free and flexible working time to their agents. This surely doesn't motivate them but this surely does eliminate job dissatisfaction where they don't have to attend to office on time or hate any Mondays. Any day can be a holiday or working hours. The next thing is, as an insurance agent, you are not belongs to any managers, you are all by your own. No office affairs that you need to worry about, this too eliminate a factor that may cause job dissatisfaction. On the other hand, motivators are also widely used in the company. The annual bonus that an agent can get is quite a huge amount of money. In order to get more annual bonus, employees will strive for more and more and this in turn help the companies to gain more profits while they are getting their rewards.

Another theory that Prudential applies is the Hierarchy of Need Theory. Human beings have needs, namely Self-Actualizations, Esteem, Social, Safety and Physiological needs. The top management of Prudential understands their employees and thus providing lots of benefits and rewards to them. For example, they provide free tours to various countries for vacation. Vacation is a crucial part of every employee life as they can enjoy before striving for the next higher target. There's a Chinese saying that goes like this, 'A short break along the journey makes you travel further.' Other than that, they also provide employees to sign up for the latest insurance policies with a lower price. This in turn fulfills the theory whereby human beings have a need to feel secured while on the other hand motivating employees to continue their service in Prudential.

And of course, Equity Theory which includes Distributive justice and Procedural justice also applies in the reward system. Allocation of rewards among the individual are fair and so does the process used to determine the distribution of rewards. Every agent in Prudential will be given appropriate rewards based on their performance.


Business Strategies

Prudential's long term strategy emphasized on its diversification efforts, which focused the financial and investment services sector, in the 1990. Toward this end, the company made several key moves to re-establish its brand and transform it into a cutting edge global financial products and services and fund management firm. As part of its global expansion attempt, Prudential Corporation Asia was created in 1994 to gain upper hand of new business opportunities in the region. Sir Peter Davis took over as CEO in 1995, and under his leadership the Pru made key changes that proved to be vital to its successful entrance into the next century.

In 1997, the company purchased Scottish Amicable Life Assurance Society and renamed it Scottish Amicable plc. That year, the company also laid the groundwork for the launch of Egg plc, a branchless bank that originally operated by telephone and mail later transform into online based in 1998. The venture proved to be an instant success as the statistics shows the web site had over 1.75 million hits in its first week of operation.

Transformations were constantly made in the new millennium. By this time, the company's Egg subsidiary was operating as the UK's most successful Internet bank with over one million customers and $11 billion in assets. Prudential itself also listed on the New York Stock Exchange.


Prudential's approach included global expansion to offset weakening U.K. operations. The company was the first U.K. life insurer to become licensed in Vietnam and opened an office in Hanoi in March 2000. Asian expansion also continued in 2001 with the purchase of Orico Life Insurance Co. based in Japan.

Prudential forged ahead with its domestic insurance operations restructuring, and in late 2001 the company announced the sale of its general insurance business to Winterthur Insurance Company. As part of the deal, Prudential partnered with Winterthur's U.K. subsidiary, Churchill, to provide Prudential-branded general insurance products in the region.

With the dramatic changes from late 90s to now, Prudential now stood with five major business segments that included Prudential's U.K. and European insurance operations, M&G Investments, Egg plc, Jackson National Life, and Prudential Corporation Asia. Management's long term goals continued to be centred on building a global retail financial services business. With a longstanding history of success behind it, Prudential appeared to be well positioned to achieve future success.


Sybase IQ

As ICICI Prudential experienced rapid growth, synchronizing customer, business and financial portfolio information across multiple business channels became a major challenge. The company addressed the challenge by creating a single source of data through the deployment of a Sybase ASE transaction database along with a Sybase IQ reporting database. This allows the company to improve the performance of its business functions. ICICI Prudential now able to facilitate customers more effectively and to a wider scope because employees have instant access to accurate, up-to-date information.

To support and service a rapidly-growing customer base, the company has quickly matured its IT systems during the past several years by deploying best-in-market solutions and technologies. A variety of automated information systems with multiple sources of data had also evolved.

"The new sales information systems series powered by the warehouse allows us to aggregate data so that we can see how the company as a whole is performing and make sure we do the necessary things to ensure efficiencies and accuracy in decisions," said Dipak Nair, Vice President IT, ICICI Prudential Life, (, 2012).

BMC Software

BMC software enables ICICI Prudential Life Insurance to automate business and operational processes. The software allows the company to provide faster and error-free service delivery at a low cost. Key performance indicators for any operations depend on efficiency, effectiveness, value addition and control of those processes. BMC Control-M has enabled ICICI Prudential Life to achieve those objectives and is in line with their larger plan to automate virtually all processes over a period of time. This will enable the company to provide its customers with the highest level of real-time service.

SQL Anywhere

Prudential Insurance wanted to improve customer service through development of one comprehensive contact management program to support field agents and offices nationwide. It turned to a solution created with SQL Anywhere which now enables field agents access to customer information from anywhere in the country.

"Prudential Insurance implemented CDS to give our insurance agents an easy-to-use tool to keep track of important information on their existing and prospective customers. It also helps them provide enhanced customer service to help their clients manage their financial needs," says Barbara Koster, Vice President and Chief Information Officer of Prudential Insurance, (, 2012).


Prudential faces two business challenges which are an aggressively competitive financial services market and increased regulation from the UK Financial Services Authority. Prudential conscious of implementing ways to reduce operational costs, increase productivity and sales per agent, improve customer service and implement a higher level of compliance in its sales call centres.

Prudential bears the challenge of managing the sales and customer service performance of more than 2,000 call centre representatives geographically dispersed across five locations in the United Kingdom, Ireland and India.

The major challenges facing Prudential Insurance industry are:

Increasing competition from international insurers that are larger, better skilled and more focused on core areas of competence.

Competition from new players such as asset managers, captive insurers (general insurance), independent financial advisers and internet players.

Adapting to technological advances that have fundamentally changed the way business is conducted.

Meeting the needs of more sophisticated and more informed consumers.

Critical Review


Positioned to manage through the current market

Prudential has the diversified mix of businesses as capital strength for sustain the position in coming future, long-term performance. As example, the Indian life insurance market is one of the world's most dynamic. Since liberalization, there are more oriented to build distribution networks to expanding the market. Therefore, providing careers for many thousands of industry specialists, raising the awareness of personal financial solutions amongst ordinary people and channeling the savings of many millions of hardworking Indians into more productive bond and equity based products. At Prudential, they have a somewhat unique perspective on the life insurance. They understand the need for and actively support initiatives that are progressive for the industry and help in raising standards and improve the quality of service to customers.

Strong financial base, money power

Prudential is one of Asia's leading insurers and one of the region's largest asset management companies. By the views of past years, they have maintained good presence. With their significant portfolio of business, multi-channel distribution capabilities, strong strategic partnerships, customer-centric products and services, and considerable brand equity, Prudential generate a very strong financial strength, this helps the company can go through the developments and maintains an unrivalled position for continues growth.

Well efficient management and Technology

Prudential have a good management system or structure to support them to success in coming time. They praise highly in cooperate management, as example, the group governance framework, by doing documentation along the internal control policies and processes in an online manual, including the group's risk framework, code of business conduct and detailed policies on key operational and financial risk. On the other hand, the company also associate with corporate responsibility framework to provide an overview of the group-wide philosophy and approach to corporate responsibility. Due to tis act, the management of the company become more systematic and corporate with each other in order to increase the efficiency on performing. Nowadays, technology getting more improved, as this fact, the market more oriented to convenience, Prudential will budget up to updated and refresh the technology every year. As reference, BMC software enables ICICI prudential Life Insurance to automate business and operational processes.

Motivation factors provided by the Company

Prudential produced such effective motivations to enhance the company. A company's success always come from the employees, the top management always generate a lot of motivation to the employees by create the particular event. Energy, direction and persistence are fulfilled in the employees by motivation. The upper managers are giving rewards to those who have good performance in working, as annual bonus. Specific goals do increase performance, and success the company.

Dedicated Employees

Prudential trained up many talented employees, by giving rewards and reasonable salary they exploited their responsibilities in their jobs, there are such great goals are set by them in order to recompense company. Dedicated employees is one of the property or strength to company.


Many competitors in the market offer same products by title different in premium and offerings

Prudential face a lots of problems that created by competitors, as Great Eastern, they have also provided the same product that Prudential offers. As example in medical card, Prudential offer the limit is at RM625k, but will auto upgrade to 1 million after 10 years. In Great Eastern, they offer the policy seems to cover more, such as hospitalization allowance, RM10k more for accident. As this fact, Prudential may lose their market in particular comparative situation. As a consumer, they are able choose the best as their authority. Prudential may provide such unique products to overcome the competitors.

Less coverage in rural areas

Prudential more focusing their business strategy on industries or urban areas, this may considered a weakness to the company. Nowadays all oriented to urbanization, so company more following to this trend which means centralized in cities. Not only the citizen can offered the products by company, we need opportunities up the provincial peoples can involve in business or insurances. There is a market to widening the company's network.

Services and features

Prudential do update their services and features frequently to make their customers or merchants feel easy and clear to access their websites or subsidiary outlets. Unfortunately, the idea of Prudential introduced for their new service and feature would be copy by the competitors quickly. Hence, Prudential features do not look much different when comparing with others because other competitors will quickly add those Prudential's new features into their selling series.

Highest targets set by financial advisor

Goals-setting as we know can result in higher performance and get rewards from superior. Although it can success but also can spoiled someone's performance, a high a goal-setting is a must to employees. As example, in Prudential, there are some superior management overset the target in financial result, this will enforce employees by chasing their jobs in good performing. It is because of that, they will stress up employees while doing their jobs. This may causes that the outstanding achievement of Prudential become low, this also considered a weakness to Prudential.


Prudential Company, it is much more fortunate company as it stresses on loyalty and respect to the authority hierarchy from their employees. Although it could help to bring up the performances of the company, but this situation would not last long as it is only "one site" cooperation from employees mostly from the lower position. So in order to hold on the cooperation and trust from the employees, company must concern not only the company s' benefits but as well as their employees. As the conclusion from above, employees' benefits, service and contribution must be improved so that relationship between company and employees can form a trust but not only "one site" cooperation.

We recommended that Prudential company need pay attention on consumers which they characterized a significant role in views of company. As this fact, company is suggested to doing marketing and research to find that how image established in consumers. The feedback or survey also need doing continually to ensure that what recommendations or suggestions made by them, collect data and finalized the report. Advertising is the important to the company, Prudential budget up to promote the products, insurances via different medium such as TV channels, newspapers, and magazines. Actually, the first image always come from advertising. In future, the company is suggested engage more professional to enhance the performance.

We also suggested that Prudential company must always updated and refreshing the management system, for example, company was encouraged to open course or skill class to improve the knowledge of employees. Although this action need pay up a lot of fees but the employees are getting more experienced or mastered in management education ; skill. By doing this, the company will overcome the orderless situation, the future orientation in company become more systematic and clear. Therefore, company earn money and success the journey in coming future.

There are a lot of competitors in the field of insurances or diversified business, these companies tend to globalize their product to increase their number of sale in the world and as well as to reduce the conflict between companies which is different brand (competitor). As the result, they are increasing their performances in a short time to support enough supply or demand of clients from around world. Prudential was considered as a global insurances and business company which is well known by its brand and as a big company. It tends to increase their performances in a short time to whole world and causes defection to some products. However there are ways to improve from this problem, Prudential must slow down their productivity and be more focusing on their products' quality. But how could Prudential do that? In every company, they should have their new product to be launched to whole world. So Prudential is not an exception, Prudential should have many task and check on their new product before they launch it to minimize any error of the product before in the hand of customer which eventually can improve the trust of the customer toward the Prudential. As the result, whenever people want to but insurances or doing business, they will be always thinking the company because of its good quality of product.



Prudential Plc. is a British multinational life insurance and financial services company headquartered in London, United Kingdom. Prudential Assurance Malaysia Berhad (PAMB) is a part of Prudential Plc of the United Kingdom that offers wide range of insurance service such as medical and health insurance, retirement annuity, travel insurance, house owner insurance, investment link insurance, life insurance and personal accident insurance. To ensure an employee's loyalty and continues service to the company, Prudential does motivate their employees with rewards that both tangible in the forms of commission per each contract transaction and annual bonuses and intangible in the form of vacation with family members and fellow staffs and a deal of insurance policies with lowest price possible for employees.

Prudential company able to be among the leading insurer globally, contributed by the following key success factors such innovative business strategies, abroad partnership and utilisation of fine software and technologies. As globalisation is a one continues trend, all business venture do face challenges. Prudential company have to compete with other leading insurer, facing competition among employees and staffs, to adhere to the latest technologies and modernisation and finally to cater the unlimited needs for its customers. The strength of the company is through its positioned to manage through the current market, strong financial base, money power, well efficient management and technology, motivation factors provided by the company and dedicated employees. In contrast, the company weakness is due to many competitors in the market offer same products by title different in premium and offerings, less coverage in rural areas, services and features and highest targets set by financial advisor.

Lesson Learned

The first thing learned is, able to know an organisation background in a more detail context. Comprehend the nature of the company of what it dealt with, with who the dealing is, how the business conducted and where the company operates. Next able to recognised key person in the organisation, the hierarchical structure, management style and its custom and tradition practised inside the organisation. A thorough analysis of company practises was done to relate its practises to the perspective (Topic 10 Motivating and Rewarding Employees) of the subject learned Management Principle. Identification of the four management function in a greater aspect by analysing and explaining the organisation studied by categorised into planning, leading, organising and controlling. The success factor that leads the company to achieve its goals and objectives and what are the innovation and improvement made throughout each year was able to be recognised. Even if the company prepared in advance, what could be the possible hindrances and challenges might emerge that need to face by the company in the near future was also able to be identified. At the same time, the critical review done enable to identify the strength of the organisation which serve as an advantage to outshines its competitors. In contrast, what is the possible weakness in the company studied that became hindrances in attaining its purpose was also managed to be examined.