For the financial services company, the acquisition of Assurance adds an established direct-to-consumer channel to reach out to the underserved mass market
Image: Prudential acquires US insurtech company Assurance. Photo: courtesy of Tysto/Wikipedia.org.
Prudential Financial has completed its $2.35bn acquisition of US-based health and life insurtech company Assurance IQ.
As per the deal signed in September 2019, Assurance will also stand to receive an additional earnout of up to $1.15bn through a mix of cash and equity, based on meeting multi-year growth objectives.
Headquartered in Bellevue, Washington, the insurtech company is said to combine advanced data science and human expertise to match buyers with customised solutions for life, health, Medicare and auto insurance.
The insurance solutions from the company can be purchased completely online or by taking the help of a live agent equipped with technology.
The company’s platform matches consumers with the live agent or certain sales process that suits their needs in order to provide better customer outcomes and increased levels of engagement and conversion.
At the time of announcing the deal, Prudential Financial said that Assurance’s approach is supported by an ongoing change in consumer preferences, where buyers are increasingly going online to research the insurance products before meeting experts to complete their purchase.
Assurance will help Prudential Financial bring down cost of customer acquisition
Furthermore, Prudential Financial said that the technology-powered, on-demand service platform of Assurance cuts down the cost of customer acquisition. Thereby, the platform will help in achieving deeper reach into the mass market without having to compromise service and product selection.
Prudential Financial expects the insurtech company to add a large and fast growing direct-to-consumer channel to its financial wellness businesses, which will substantially expand the total addressable market of both the firms.
The two companies are expected to leverage their respective capabilities to develop a new end-to-end engagement model for providing better services to customers who want to shop on their own terms, irrespective of the time and place.
Prudential Financial plans to put up its own financial wellness solutions on the Assurance platform along with those from third-party providers.
Last year, the financial services firm completed the acquisition of a 13.1% stake in Peak Reinsurance Holdings, the sole shareholder of Hong Kong-based Peak Reinsurance Company.