Prudential Financial has concluded the previously announced $2.35bn acquisition of the home-grown online insurance start-up Assurance IQ.

The agreement was originally signed in September this year.

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Besides $2.35bn upfront payment, Prudential has agreed to pay an additional $1.5bn earnout in a mixture of cash and equity, provided Assurance meets growth objectives in the future.

After completion of the transaction, Assurance will operate as a wholly-owned subsidiary of Prudential Financial under the US Businesses division.

Prudential stated that the acquisition of Assurance IQ will provide the company with an established direct-to-consumer channel to reach the underserved mass market.

Prudential chairman and CEO Charles Lowrey 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.

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“We look forward to working with Mike Rowell and his entire team to grow the Assurance business in the US, and, over time, to extend its unique approach to customers around the world.”

As per the agreement, Assurance co-founder Michael Rowell will continue to lead the firm as CEO. He will report to Andrew Sullivan, who has been named the executive vice president and head of US businesses.

Prudential Financial is a diversified global financial services firm which offers investment management as well as insurance solutions to its customers in the US, Asia, Europe, and Latin America.