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Allstate sells life insurance business – Crain’s Chicago Business

Allstate now has turned out all the lights at its life-insurance business.

The Northbrook-based insurance giant today announced a deal with Norwalk, Conn.-based Wilton Re to offload what remains of the unit after the $2.8 billion deal it struck in January with Blackstone Group to sell the valuable part of the business. This time, Allstate will book a $4 billion loss in the first quarter due to the deal.

But it frees up $1.7 billion of capital the company can spend on shareholder buybacks or acquisitions.

It also further reduces and simplifies Allstate’s investment portfolio. After both the Blackstone and Wilton deals close, Allstate’s portfolio will be about $55 billion. It was more than $90 billion at the end of 2020.

Wall Street shrugged off the large paper loss. Shares rose 70 cents, or 0.6 percent, in morning trading.

“This transaction has minimal impact on our strategy of increasing market share in personal property-liability and expanding protection solutions for customers,” Chief Financial Officer Mario Rizzo said in a statement. “Wilton Re is a trusted name with a history of excellent customer service and expert management of life insurance and annuity portfolios, so (our) customers will be well protected.”

Allstate has been a life insurer since the late 1950s, but over recent decades, the business generated substantially lower returns than the auto and home lines for which Allstate is much better known. Analysts have been calling for this move for years.

Allstate agents will continue to sell life insurance and retirement products of other companies.