Allstate Corporation has entered an agreement to sell Allstate Life Insurance Company (ALIC) to Blackstone for almost $3 billion.
The insurer will sell ALIC and certain subsidiaries to entities managed by Blackstone for $2.8 billion, including a pre-closing dividend from ALIC of up to $400 million.
The transaction is subject to regulatory approval, with an expected closing in the second half of 2021.
ALIC holds about 80% of Allstate’s life and annuity reserves, and generated income of $467 million in 2019, and a net loss of $23 million in the first nine months of 2020.
“Allstate is deploying capital out of lower growth and return businesses while continuing to execute our strategy to grow market share in personal property-liability and expand protection solutions for customers,” said Allstate chair, president, and CEO Tom Wilson. “Customers will be protected using non-proprietary life insurance products, as is currently done for annuities. Deployable capital will increase, and the transaction also provides increased transparency to the industry-leading returns of our core protection businesses.”
“We’re pleased to enter into this transaction as Blackstone continues growing its insurance business,” commented Blackstone Insurance solutions global head Gilles Dellaert. “We believe our team’s extensive experience in the insurance sector and world-class asset origination capabilities will deliver significant benefits to policyholders and investors over the long term.”
Despite the sale of its life insurance unit, Allstate will not sell Allstate Life Insurance Company of New York (ALNY). The insurer will retain ownership of ALNY, which has $5 billion of GAAP reserves, and is looking into alternatives to sell or transfer the risk to a third party.