(Reuters) – Allstate Corporation said on Tuesday it had agreed to sell most of its life insurance business to entities managed by buyout firm Blackstone Group Inc for $2.8 billion.<\/p>\n
The deal comes as global life insurers are taking steps to curb payouts stemming from the COVID-19 pandemic, including long-term health consequences that are not fully understood.<\/p>\n
In the United States, 8% of reported group life insurance claims from April to August attributed the cause of death to COVID-19, according to the U.S. Society of Actuaries.<\/p>\n
\u201cAllstate is deploying capital out of lower growth and return businesses while continuing to execute our strategy to grow market share in personal property-liability,\u201d Chief Executive Officer Tom Wilson said.<\/p>\n
The company said the unit, Allstate Life Insurance Company, holds about 80% or $23 billion of its life and annuity reserves and reported a net loss of $23 million for the first nine months of 2020.<\/p>\n
The deal, which excludes Allstate Life Insurance Company of New York (ALNY), is expected to close in the second half of 2021.<\/p>\n
The insurer said it was looking at alternatives to sell or otherwise transfer risk associated with ALNY to a third party.<\/p>\n
J.P. Morgan Securities LLC, Ardea Partners LP and Lazard acted as financial advisers to Allstate, while Morgan Stanley & Co. LLC and Credit Suisse Securities advised Blackstone.<\/p>\n