Allstate to Sell Life Insurance Unit to Blackstone for $2.8 Billion -- Update
January 26 2021 - 08:37PM
Dow Jones News
By Josh Beckerman
Private equity giant Blackstone Group Inc. has agreed to buy
Allstate Life Insurance Co. from Allstate Corp. for $2.8 billion,
the latest in a slew of deals between financial firms and life
insurance businesses.
Allstate Life Insurance Co. holds about 80%, or $23 billion, of
Allstate's life and annuity reserves. The companies expect to close
the deal in the second half of the year.
"We're pleased to enter into this transaction as Blackstone
continues growing its insurance business," said Gilles Dellaert,
global head of Blackstone Insurance Solutions, in a statement.
Financial firms have been on a tear buying up life insurance and
annuities businesses. Last week, Sixth Street Partners announced a
deal to buy life insurance business Talcott Resolution for $2
billion.
Since the world-wide financial crisis of 2008, private-equity,
asset-management and other types of financial firms have bought up
blocks of life-insurance policies and annuities, and even entire
operating units, as insurers narrowed their focus and divested
product lines. Ultralow interest rates have prompted much of the
activity, hurting insurers' profits.
Allstate said the life insurance unit had a net loss of $23
million in the first nine months of 2020.
In many deals involving financial buyers, the newcomers aim to
profit from investment-management fees and by savvy investments of
the premiums paid by customers. Many deals have involved a basic
savings product known as a fixed annuity, akin to a bank
certificate of deposit.
Leslie Scism contributed to this article.
Write to Josh Beckerman at josh.beckerman@wsj.com
(END) Dow Jones Newswires
January 26, 2021 20:22 ET (01:22 GMT)
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