Allstate Corp. struck another deal to sell part of a life-insurance business and warned investors that the divestitures will result in a roughly $4 billion net loss in the first quarter.
Wilton Re agreed to pay $220 million to buy Allstate Life Insurance Co. of New York in a transaction that will complete Allstate’s exit from the life and annuity market, according to a statement Monday. In January, Allstate reached a deal to sell a life business to Blackstone Group Inc. for $2.8 billion.
Allstate has been adjusting its strategy to focus more on personal property-liability coverage, expanding its distribution with independent agents through a $4 billion agreement to buy National General Holdings Corp. that was completed this year. The two life-insurance divestitures will contribute to the estimated $4 billion net loss under generally accepted accounting principles, while also generating $1.7 billion of deployable capital, the company said.
“This transaction has minimal impact on our strategy of increasing market share in personal property-liability and expanding protection solutions for customers,” Allstate Chief Financial Officer Mario Rizzo said in the statement. “Wilton Re is a trusted name with a history of excellent customer service and expert management of life-insurance and annuity portfolios.”
Allstate also agreed to contribute $660 million of capital into the New York life business unit and then receive the $220 million payment from Wilton Re. Both the New York sale and the deal with Blackstone are expected to be completed in the second half of this year, Allstate said.
This article was provided by Bloomberg News.