In a surprising move, Prudential has decided to shut down its online insurance startup Assurance IQ just five years after acquiring it for $2.35 billion. The company announced their decision during their first-quarter earnings call, citing a thorough review of strategic opportunities that align with their long-term growth strategy.
Assurance, founded in 2016 in Bellevue, Washington, had been operating as a wholly-owned subsidiary of Prudential since it was acquired in September 2019. The company used data science and machine learning to simplify the application process and offered health, life, Medigap, home, and auto policies from over 20 providers.
The acquisition of Assurance also included a potential earnout of up to $1.15 billion in cash and equity, dependent on Assurance meeting multi-year growth targets. Prudential CEO Charles Lowrey had previously stated that Assurance would enhance the strategy and growth potential of Prudential’s financial wellness businesses, allowing them to reach a wider range of individuals to better meet their comprehensive needs.
This decision marks a significant shift for Prudential, who saw Assurance as a key player in expanding their reach and services in the insurance market. The closure of Assurance will likely have implications for both companies and their customers as they navigate this change in operations.
