Prudential shuts down Assurance IQ

Prudential has made decision to shut down the operations of Assurance IQ, the company it bought in 2019 for $2.35 billion.

A message by Prudential’s US Businesses CEO Caroline Feeney was shared with employees today. The message states that Assurance IQ is no longer selling new policies, and over the next 2-3 months Prudential will take steps to wind down operations. Most of the workforce will be laid off and some will stay on for a longer period to ensure an orderly wind down.

Based on an internal email we obtained, today’s development was “unexpected and disappointing.” Another piece of communication described the event as unforeseen and unexpected. In February, Prudential made cuts at Assurance IQ that impacted 19% of the workforce. Around the same time, Assurance IQ shut down its Nectar platform, which sold auto, home, and life insurance leads to agents.

For twelve consecutive quarters since the acquisition, Assurance IQ reported losses totaling $381 million. The company finally turned a profit in Q4 2022, but in the following quarter Prudential stopped disclosing Assurance IQ’s performance. In between, Prudential reported multiple goodwill impairment charges due to the “decline in the fair value of Assurance IQ.”

Prudential shared the following comment with Coverager: “Prudential Financial routinely evaluates strategic opportunities for its businesses that are aligned with its long-term growth strategy. After a careful review, we made the decision to wind down the Assurance business.”