Prudential Financial to acquire Assurance IQ, Inc. for $2.35 billion
- Adds established direct-to-consumer channel to reach underserved mass market
- Fast-growing, highly scalable business model offers significant upside potential
- Acquisition offers attractive financial benefits; accretive to EPS and ROE in year 1; enhances long-term growth profile
India, September 11, 2019 — Prudential Financial, Inc. today announced that it has signed a definitive agreement to acquire Assurance IQ, Inc., “Assurance,” a profitable, fast-growing direct-to-consumer platform that transforms the buying experience for individuals seeking personalized health and financial wellness solutions.
Terms of the acquisition include a total upfront consideration of $2.35 billion, plus an additional earnout of up to $1.15 billion in cash and equity, contingent upon Assurance achieving multi-year growth objectives.
Using a combination of advanced data science and human expertise, Assurance matches buyers with customized solutions spanning life, health, Medicare and auto insurance, giving them options to purchase entirely online or with the help of a technology-assisted live agent. Assurance’s innovative model also matches consumers with the live agent or specific sales process that is best suited to their needs, resulting in better customer outcomes that drive higher levels of engagement and conversion. This approach is underpinned by an ongoing shift in consumer preferences, whereby individuals increasingly begin their research for personalized financial services online and then seek consultation with human experts to complete their purchase.
By eliminating the inefficiencies of conventional models, Assurance’s technology driven, on-demand service platform lowers the cost of customer acquisition, allowing deeper reach into the mass market while maintaining a high level of service and product selection. Its rapid-growth model offers compelling economic advantages with low fixed costs and low capital requirements that produce high margins and a high degree of scalability.
“Assurance accelerates the strategy and growth potential of Prudential’s financial wellness businesses, bringing us closer to more people across the entire socioeconomic spectrum to better serve the full picture of their needs, ” said Prudential Chairman and CEO Charles Lowrey. “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.”
Michael Rowell, co-founder and CEO of Assurance, 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 will add a large and rapidly growing direct-to-consumer channel to Prudential’s financial wellness businesses, significantly expanding the total addressable market of both companies. Assurance and Prudential will leverage their respective capabilities to create a new end-to-end engagement model: one that better serves customers who want to shop on their own terms, when, where and how they want.