Allstate has agreed to sell Allstate Life Insurance Company of New York (ALNY) to Wilton Re for $220m, marking its complete exit from life and annuity segments.
This follows the US-based auto insurer’s agreement to divest Allstate Life Insurance Company (ALIC) and certain affiliates to entities managed by Blackstone for $2.8bn.
Under the terms of the latest agreement, the company will also terminate an ALIC stop-loss reinsurance treaty.
Before receiving a payment of $220m from Wilton Re, Allstate agreed to inject $660m into ALNY.
The company said that its agents and exclusive financial specialists will continue catering to customers’ needs by providing a spectrum of life insurance and retirement solutions from third-party providers.
Allstate CFO Mario Rizzo said: “This transaction has minimal impact on our strategy of increasing market share in personal property-liability and expanding protection solutions for customers.
“Wilton Re is a trusted name with a history of excellent customer service and expert management of life insurance and annuity portfolios, so ALNY customers will be well protected.”
Allstate expects the transaction to cut down GAAP reserves by $5bn and invested assets by $6bn while the sale of ALIC and ALNY will collectively result in an estimated GAAP net loss of nearly $4bn.
It will generate around $1.7bn of deployable capital, the company said.
Both the ALIC and ALNY deals are expected to close in the second half of the year, subject to regulatory approval.
In January this year, Allstate completed its $4bn acquisition of New York City-headquartered insurer National General.