Prudential Buys Artificial Intelligence Startup For $2.3 Billion - Insurance News | InsuranceNewsNet

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September 6, 2019 Top Stories
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Prudential Buys Artificial Intelligence Startup For $2.3 Billion

Seattle Times (WA)

A Bellevue, Washington-based insurance startup that uses artificial intelligence to sell personalized insurance options has been sold for $2.35 billion to industry giant Prudential Financial.

Assurance IQ, an online insurance-tech company that started in 2016, meets its customers through an online portal instead of through a financial adviser. It sells life insurance, auto insurance, health insurance and Medicare options online from over 20 providers. The company says it has sold at least one insurance product to 300,000 customers and the site has had more than 18 million visitors."

To the 144-year-old insurance titan, the 3-year-old startup's value lies in its online-first platform, efficient data collection and artificial intelligence to find personalized insurance at a much faster rate, executives said.

"So rather than filling like a 10-page life-insurance application form, they were able to actually understand the customer by asking as few questions as they can," said Naveen Agarwal, Prudential's chief marketing officer, during an interview.

The company uses artificial intelligence and data collection to fill in the gaps -- after asking customers general questions about their age and medical and lifestyle habits -- and offer suggested insurance products. Its website also directs customers to human agents who can further personalize their care should they prefer that over an online transaction.

"So for example if you are in Wyoming, getting a local Wyoming agent helps because you can actually understand each other better because you understand the situation in your state," Agarwal said. Agents can be matched with customers based on age, lifestyle and other demographic information.

The popularity of Assurance IQ, and its rather large acquisition, signals a larger trend in personalized care that has been largely embraced by the insurance industry. Health IQ, Clover Health and Lemonade are other so-called "insurtech" companies that together have raised millions of dollars from investors this year alone.

The acquisition could also be the key to address Prudential Financial's continuing problems in the competitive-insurance space. In August, its shares fell by about 20% after the company reported dismal quarterly results.

It plans on selling its own insurance products through Assurance IQ, as well as earning commissions when Assurance IQ sells other providers' products. The acquisition would allow Prudential Financial to access more people from different markets that do not want traditional insurance plans.

"Insurance, as you may know, is not an easy thing to buy," Agarwal said. "So how they use artificial intelligence and the human touch together to create a much better customer experience ... That was very exciting for us."

CEO Michael Rowell will continue to run Assurance IQ under Prudential Financial. The deal includes a potential extra earn-out of $1.15 billion in cash and equity if Assurance IQ meets certain growth goals. Prudential Financial will fund the buyout through cash, equity financing and debt.

In 2020, the company and its 120 employees will move to the Madison Centre in Seattle from Bellevue to attract more talent and expand the business.

___

(c)2019 The Seattle Times

Visit The Seattle Times at www.seattletimes.com

Distributed by Tribune Content Agency, LLC.

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