trending Market Intelligence /marketintelligence/en/news-insights/trending/5dmjzvR2xYCxvTbitLFVjg2 content esgSubNav
In This List

Prudential Financial acquiring insurtech startup Assurance IQ for $2.35B

Blog

The Big Picture 2022 Insurance Industry Outlook

Podcast

Next in Tech | Episode 37: Insurance impacts on technology and vice versa

Case Study

A Prestigious Global Business School Gains a Competitive Edge

Video

S&P Capital IQ Pro | Unrivaled Sector Coverage


Prudential Financial acquiring insurtech startup Assurance IQ for $2.35B

Prudential Financial Inc. is acquiring insurtech startup Assurance IQ Inc. for about $2.35 billion.

The consideration comprises $1.2 billion in cash, $680 million in debt and $470 million in restricted Prudential common stock and equity awards. A portion of the cash consideration is expected to settle in Prudential equity awards.

If certain growth objectives are attained in the 2020-22 period, the acquirer would make available up to an additional $1.15 billion in cash and equity.

Bellevue, Wash.-based Assurance IQ offers life, health, Medigap and auto policies from more than 20 providers, not including Prudential Financial. Prudential plans to offer its own financial wellness products on the Assurance platform, along with those of third-party providers.

"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," said Prudential Financial Chairman and CEO Charles Lowrey.

Assurance will become a wholly owned Prudential Financial unit within the U.S. businesses division. Co-founders Michael Rowell and Michael Paulus will remain CEO and president, respectively, of Assurance.

Prudential Financial expects the acquisition to be modestly accretive to EPS and return on equity from 2020, and it expects cost savings of $50 million to $100 million. The deal is expected to close early in the fourth quarter.

Additionally, Prudential Financial said its board authorized a $500 million increase to its 2019 share repurchase authorization, taking the full-year figure to $2.5 billion. As of June 30, Prudential Financial had repurchased $1.0 billion of shares, and it expects to use the entirety of the increased authorization by the end of the year.