Financial services giant Prudential Financial Inc. (NYSE: PRU) is shutting down Seattle-based insurance tech subsidiary Assurance IQ, resulting in local layoffs.
Prudential CEO Charles Lowrey said on an analyst call Wednesday that Prudential wants to focus on its core businesses. Prudential acquired Assurance for $2.35 billion in 2019, and the deal included an extra $1.15 billion if Assurance hit certain growth goals.
"We anticipated a different outcome when we purchased Assurance, and we've incorporated these lessons into our M&A approach," Lowrey said on the call. "As we look forward, we will focus on acquisitions of more established businesses that present opportunities to expand our capabilities."
A Prudential spokesperson confirmed the decision via email Wednesday, adding that the company "routinely evaluates strategic opportunities for its businesses that are aligned with its long-term growth strategy."
Assurance has almost 3,000 employees listed on LinkedIn. A Worker Adjustment and Retraining Notification filed with the state of Washington said the shutdown will result in 112 job cuts in Seattle. Those layoffs will begin July 3.
Related coverage
Assurance was founded in 2016. The company uses artificial intelligence to match consumers with insurance products based on consumers' specific needs. Assurance also has insurance agents to guide consumers. According to its LinkedIn page, Assurance has worked with "millions" of customers.
GeekWire first reported the news.
Prudential is headquartered in Newark, New Jersey. The firm offers health insurance, life insurance, investment and retirement services. Prudential generated $1.14 billion in net income during the first quarter, down from $1.46 billion during the first quarter of 2023. The firm has $1.5 trillion in assets under management.
In a response to a question during the Wednesday call about whether Prudential would look to sell Assurance, Prudential Chief Financial Officer Yanela Frias said shutting down Assurance won't significantly impact Prudential's earnings. She added that Prudential "certainly will assess whether there is any incremental value to the assets and to the extent that there is, we will seek to monetize that value."
Editor's note: The story has been updated to provide details about the company's Seattle layoffs.
