Prudential Financial Inc., Newark, N.J., said Thursday that it agreed to acquire Assurance IQ Inc., a startup that provides a technology platform for direct-to-consumer services, matching purchasers with various insurance products.
The services offered by Assurance IQ Inc. will play a role in Prudential's financial-wellness efforts that encompass corporate benefits and institutional retirement plans as well as the markets for individuals, Andrew Sullivan, head of Prudential's workplace solutions group, said in an interview. Mr. Sullivan will become executive vice president and head of U.S. businesses at Prudential Financial on Dec. 1, succeeding Stephen Pelletier, who is retiring.
Assurance IQ "is a perfect fit for financial wellness," said Mr. Sullivan, adding that the acquisition is expected to close in four to six weeks. "We will work with employees and participants to address their needs."
According to a Prudential news release, Assurance IQ matches buyers with products such as life and health insurance and auto insurance, enabling them to make purchases online or through an agent. Prudential will offer its own financial-wellness services on the Assurance IQ platform, which also will offer services from other providers, the news release said.
Assurance IQ will enhance Prudential's financial-wellness efforts to address issues such as mortgages, student loan debt and debt management, Mr. Sullivan said. Acquiring the three-year-old company meant that Prudential could move faster in offering more services than if it had tried to do by itself, he added.
Prudential wanted to move "as quickly and as boldly" as it could to enhance its financial-wellness efforts, he said. "This was a first mover advantage for us," he added. Creating internally what Assurance IQ offers now "would have taken us several years."
Assurance IQ will be a wholly owned subsidiary of Prudential. The company's co-founders Michael Rowell and Michael Paulus will continue to lead Assurance IQ, with Mr. Rowell as CEO and Mr. Paulus as president.
According to the Prudential news release, Prudential will pay $2.35 billion for the Bellevue, Wash., company, plus up to $1.15 billion in cash and equity if certain "growth objectives" are realized.
Mr. Sullivan said the private company, which has 120 employees, had revenue of $120 million last year and was on target for $500 million this year as a stand-alone company.