Allstate to sell voluntary employer benefits company StanCorp for $2 billion

Insurer Allstate has agreed to sell its voluntary benefits subsidiaries to StanCorp Financial Group (The Standard) in a $2 billion cash deal, the company said in a regulatory filing Tuesday.

The deal comes at a time when the economy is experiencing a slowdown in demand, which has led companies to exit ventures that are out of sync with their business goals.

The sale is the first step in the insurer’s strategic decision to enable its health and benefits businesses — voluntary employer benefits, individual and group health — to realize their full growth potential by merging them with its businesses that have additional capabilities, it said the company.

“The sale is expected to generate a gain of approximately $600 million and increase deployable capital by $1.6 billion,” said Chief Financial Officer Jess Merten.

The businesses sold had revenue of $535 million and adjusted net income of $45 million for the first half of 2024.

At the end of July, Allstate posted a profit in the second quarter, compared with a loss a year earlier.

JP Morgan and Ardea Partners acted as financial advisors to Allstate, while Citi acted as exclusive financial advisor to The Standard.

(Reporting by Jaiveer Singh Shekhawat in Bengaluru; Editing by Mohammed Safi Shamsi)

TOPICS
Commercial Lines Business Insurance Employee Benefits