Prudential Dumped Assurance IQ

Insurance giant Prudential is shutting down Assurance IQ, five years after spending $2.35 billion to acquire the under-the-radar tech startup based in the Seattle region. Prudential noted in its first quarter earnings report it “decided to exit” the Assurance business.

Assurance IQ - Assurance uses technology to match consumers with insurance plans that are purchased online or through an agent. Its acquisition to Prudential was one of the largest in Seattle tech history, and the largest insurance tech exit in history.  

The startup, founded in 2016 never raised any outside capital and reached a $1 billion company. At the time of the deal, Prudential claimed Assurance’s “rapid-growth model offers compelling economic advantages with low fixed costs and low capital requirements that produce high margins and high degree of scalability.”

But just a few years later there were signs of trouble with missed financial targets and government inquiries over regulatory matters. Many insurance technology companies struggled amid the broader tech downturn that started in 2022.

Poor Performance - Prudential stopped reporting Assurance financial data in January 2023, in part because “its financial results and operations are not considered significant. Assurance reported adjusted operating income of $29 million in the fourth quarter of 2022, compared to a net operating loss of $10 million a year prior.

Prudential took goodwill impairment charges, used when a company’s value decreases following an acquisition, of $177 million, $903 million and $1.06 billion in the fourth quarters of 2023, 2022 and 2021, respectively.

Assurance had around 1,700 employees as of December 2022 and now has 1,000 employees, in addition to contract workers who help customers find insurance plans.