Prudential to Wind Down Direct-to-Consumer Assurance Business

My take away on this news is simple - people like to buy from people they know and trust.

Less than five years after acquiring online insurance startup Assurance IQ for $2.35 billion, Prudential is shutting it down.

“Prudential Financial routinely evaluates strategic opportunities for its businesses that are aligned with its long-term growth strategy,” the company said in an emailed statement. “After a careful review, we made the decision to wind down the Assurance business.”

Prudential during its first-quarter earnings call today said it “decided to exit Assurance business” as part of a PowerPoint presentation highlighting its divestment in low-growth businesses.

Launched in 2016 in Bellevue, Washington, Assurance had continued to operate as a wholly-owned subsidiary of Prudential after getting acquired in September 2019. It used data science and machine learning to speed up the application process and sold health, life, Medigap, home, and auto policies from more than 20 providers.

The deal included an additional earnout of up to $1.15 billion in cash and equity, contingent on Assurance achieving multi-year growth objectives.

At the time of the acquisition, Prudential CEO Charles Lowrey 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.”