Prudential to acquire online insurance startup Assurance IQ for $2.3bn
Prudential acquisition of Assurance IQ : US financial services giant Prudential Financial has signed a deal worth $2.35 billion to acquire Assurance IQ, an online insurance startup based in Bellevue, Washington.
Assurance IQ will be paid the amount upfront and will also be eligible to an additional earnout of up to $1.15 billion in the form of cash and equity, subject to meeting multi-year growth targets, as per the latest insurance acquisition news.
The online insurance startup provides customers with customized solutions for life, health, Medicare and auto insurance by combining advanced data science and human expertise. The custom insurance solutions and coverage are determined on a range of parameters like age, health, and enrollment periods.
According to Assurance IQ, most of its customers apply for the custom insurance solutions entirely online, while others go in for the combination of the company’s digital guidance and expert advice of its on-demand licensed agents.
Prudential Financial believes that this approach of Assurance IQ is in sync with an ongoing shift in consumer preferences, wherein customers are increasingly seeking to research about the different insurance plans online before they head to meet experts to complete the buying process.
Furthermore, Prudential Financial hopes that the technology-driven, on-demand insurance service platform of the online insurance startup will bring down its cost of customer acquisition, thereby facilitating deeper reach into the mass market while keeping the quality of service and product selection intact.
Michael Rowell – co-founder and CEO of Assurance IQ, commenting on Prudential acquisition of Assurance IQ, said: “Assurance was founded to protect and improve the personal and financial health of every individual. Prudential’s shared vision, coupled with the strength of its offering and capabilities, make it the ideal partner with which to begin our next chapter.
“We are excited to create an ecosystem that reaches more people and new markets with a more expansive suite of products to drive our combined growth.”
Assurance IQ will bring a large and quickly growing direct-to-consumer channel to the financial wellness businesses of the insurance major, thereby considerably expanding the total addressable market of the two parties.
Post-acquisition, Prudential Financial will look to provide its own financial wellness solutions on Assurance IQ’s platform alongside those of third-party providers.
Commenting on Prudential acquisition of Assurance IQ, Charles Lowrey – Prudential Chairman and CEO, said: “Assurance accelerates the strategy and growth potential of Prudential’s financial wellness businesses, bringing us closer to more people across the entire socio-economic spectrum to better serve the full picture of their needs.
“We look forward to working with Mike Rowell and his entire team to grow the Assurance business in the U.S., and, over time, to extend its unique approach to customers around the world.”
Prudential acquisition of Assurance IQ is expected to be closed in Q4 2019, as per the latest insurance acquisition news at Business News Today.