Business News

Prudential's $2.35 Billion Lesson

Why Compliance and Trust are the Keys to the Next Insurtech Success

Written by: Paul Bloodsworth

July 1, 2025

[5 minute read]

INTRODUCTION

Prudential’s 2019 acquisition of Assurance IQ for $2.35 billion, the largest insurtech deal in history, was a bold move to revolutionize insurance through digital innovation. Charles Lowrey, Andrew Sullivan, and Caroline Feeney, your ambition inspired the industry.

But Assurance IQ’s collapse, driven by TCPA noncompliance, was a stark lesson. Illegal robocalls, weak communication, and scam-like practices fueled consumer distrust and lawsuits, costing Prudential millions. At Excel Media, we believe your vision deserves better. Don't stop there, the next solution is out there. The industry needs one that offers a compliant, professional path to growth, restoring trust and sidestepping legal risks. Read on to learn what went wrong and how you can win.

Prudential's $2.35B Vision Deserves Recognition

Watch for our assessment on whether tech is even the answer.

Assurance IQ’s Noncompliance: What Went Wrong


Assurance IQ’s downfall wasn’t ambition—it was execution. The largest insurtech M&A, initially valued at $3.5 billion with $1.15 billion in earnouts, faltered due to subpar performance. Here’s why:

  • Illegal Autodialing: Assurance IQ deployed autodialing software to send millions of robocalls and prerecorded messages without prior express written consent, breaching FCC rules (Blair v. Assurance IQ, 2023, National Law Review). In 2022, FTC complaints surged, flagging their calls as spam, especially in Medicare operations.
  • Prerecorded Violations: Automated voicemails pitching insurance ignored TCPA consent requirements, sparking lawsuits. By 2024, Medicare and life insurance operations faced legal action, leading Prudential to shut it down.
  • Agent Liability: Agents risked personal lawsuits, as seen in a 2018 case where a CEO was held liable for $7.8 million for noncompliant faxes (Physicians Healthsource, Inc. v. A-S Medication Solutions LLC, ILR).
  • Financial Impact: In 2023, then-CFO Ken Tanji reported $713 million in goodwill impairment charges for Q4 2022, absorbing losses (Reuters). Prudential’s decisive closure underscored TCPA’s importance.

Like QuoteWizard’s $19 million TCPA settlement and 2025 Snowflake data breach exposing 190 million records (Insurance Business America), Assurance IQ’s “brown wall” strategy failed, damaging the industry.

Weak Communication: The Hidden Cost


Assurance IQ’s digital-first approach sidelined in-person communication, eroding trust. Today’s texting and emailing culture weakens intrapersonal skills vital for fiduciaries. Upcall’s 2024 report states: “Customers crave authenticity. They want empathetic humans, not machines” (Upcall). Clients reject “faceless insurance” where agents skip needs assessments or budget talks. Assurance IQ’s model—1,000 weekly calls per agent for one sale—fueled distrust, with 80% of homeowners using “No Soliciting” protections (Gitnux, 2025).

Telephone Scams: Assurance’s Unintended Legacy


  • Assurance IQ’s autodialing enabled scams. The Center for Medicare Advocacy (2022) exposed call centers using robocalls for fake Medicare benefits, like genetic testing, stealing data (Center for Medicare Advocacy). ACA subsidy fraud (LifeLock, 2023) and financial scams piggyback on this tech (Kazerouni Law Group, 2023). FTC data shows a 30% rise in scam calls since 2023, tainting all agents. Assurance IQ’s practices mirrored these tactics, deepening consumer skepticism.


A Path Forward: Lessons for Insurtech

Caroline Feeney, Charles Lowrey, Andrew Sullivan—your $2.35 billion vision was groundbreaking, but noncompliance derailed it. The industry needs a shift:

  • TCPA Compliance: Robust consent systems protect against violations and agent liability (ILR, 2018).
  • Human Connection: Prioritize empathetic outreach to rebuild trust (Upcall, 2024).
  • Consumer Focus: Respectful lead generation reduces nuisance calls and fosters loyalty.


Conclusion


Prudential’s ambition deserves praise, but Assurance IQ’s robocalls, like QuoteWizard’s data mishandling, damaged trust. Scam call centers, using similar illegal tech, cost billions and alienated clients (Center for Medicare Advocacy).

A compliant, professional approach can restore the industry’s reputation. Watch our analysis and join the conversation at go-excel.com/blueocean.