Prudential plans to acquire U.S. based tech startup Assurance IQ

The insurance company has signed a deal with Assurance IQ for $2.35 billion and is willing to pay extra $1.15 billion in equity and cash.

Prudential Financial, Inc., a Fortune 500 company that offers investment management, insurance and other financial services, has recently signed a deal to acquire Assurance IQ, a Seattle-area insurance company for $2.35 billion.

According to reliable sources, the acquisition will allow Prudential to reach more customers online with the help of the tech-focused insurance seller’s expertise. Meanwhile, Assurance IQ, which sells several insurance policies over the internet, is expected to bag an additional amount of $1.15 billion in equity and cash if it achieves some growth objectives set by Prudential, besides the upfront $2.35 billion.

Reportedly, Assurance is a self-funded startup that is rapidly growing and is highly profitable. The company offers a wide range of third-party insurance plans, that fits right in the gap for Prudential, which currently is not available on its platforms.

As per the agreement, Prudential will offer its plans alongside other services on Assurance. Whereas the startup will become a fully owned subsidiary of Prudential after the deal closes in 2019, with all the 120 Assurance employees continuing to stay with the company after the acquisition.

Speaking on the move, Michael Rowell, CEO & Founder, Assurance, said that the take-over would permit the companies to expand into new markets and more people with a more expansive suite of offering to develop their combined growth.

Sources suggest that the purchase will also offer Prudential access to the insurance company’s technology and data science talent that complements the users with insurance plans which could be bought online or from an agent.

In addition, the two companies claim that this approach is reinforced by a continuous shift in customers preferences, whereas people are gradually starting their research for customized financial services online and request consultation with experts to complete their transaction.

Source Credit: https://www.geekwire.com/2019/prudential-buy-seattle-area-insurance-tech-startup-assurance-2-35b/