What You Need to Know
- Allstate says it's now out of the life and annuity business.
- The Allstate Benefits unit still sells cancer insurance, disability insurance and critical illness insurance.
- The company's agents already sell life insurance and annuities from other companies.
Wilton Re — a reinsurer owned by the Canada Pension Plan Investment Board — has agreed to acquire Allstate Life Insurance Company of New York from The Allstate Corp.
Allstate has agreed to contribute $660 million of capital to Allstate Life of New York before handing the unit over to Wilton Re. Wilton Re will then pay $220 million to Allstate.
The Allstate Life of New York deal and the deal with Blackstone will result in a net loss for Allstate of about $4 billion, but it will also free up about $1.7 billion in capital, Allstate said.
Wilton Re and Allstate hope to complete the deal by the end of the year.
The deal “completes Allstate’s exit from the life and annuity businesses,” Allstate said Monday.
Allstate is a Northbrook, Illinois-based insurer that was once a major player in the U.S. life and annuity markets. It began to pull away from those markets after the 2007-2009 Great Recession.
The company agreed to sell its Allstate Life Insurance Company unit, which has operated outside of New York state, in January, to entities controlled by The Blackstone Group Inc.