Prudential Financial has agreed to buy InsurTech startup Assurance IQ for $2.35 billion, as the US insurance giant joins fellow incumbents in investing in digital channels used by a new generation of customers.

The deal will add Assurance IQ, an AI and data analytics consumer solutions platform for health and financial wellness, to Prudential Financial’s growing portfolio of digital services.

Terms of the acquisition include a total upfront consideration of $2.35 billion, plus an additional earnout of up to $1.15 billion in cash and equity, contingent upon Assurance IQ achieving multi-year growth objectives.

Under the terms of the agreement, Assurance IQ will become a wholly owned subsidiary of Prudential under the US businesses division.

Prudential said the startup would add an established direct-to-consumer channel to help it reach an underserved mass market.

Using a combination of advanced data science and human expertise, Assurance IQ matches buyers with customised solutions spanning life, health and auto insurance, giving them options to purchase entirely online or with the help of a technology-assisted live agent.

Prudential said this data-led approach is underpinned by an ongoing shift in consumer preferences, whereby individuals increasingly begin their research for personalized financial services online and then seek consultation with human experts to complete their purchase.

Charles Lowrey , Prudential chairman and chief executive, said: “Assurance accelerates the strategy and growth potential of Prudential’s financial wellness businesses, bringing us closer to more people across the entire socio-economic spectrum to better serve the full picture of their needs.”

Assurance IQ co-founders Michael Rowell and Michael Paulus will continue in the business to focus on its growth.

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