Wilton Re to Acquire Allstate Life of New York
Allstate will get $220 million for the unit, after putting in $660 million.
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.
The Companies
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.
The Allstate Benefits unit continues to sell disability insurance, critical illness insurance, cancer insurance, dental insurance and vision plans in the employee benefits market.
Wilton Re is a Norwalk, Connecticut-based reinsurer that has reinsured about $14 billion in life and annuity obligations for Transamerica. The company recently provided $100 million in financing for Nassau Financial Group L.P., the company that acquired The Phoenix Companies Inc. and Foresters’ old U.S. life and annuity businesses.
The Thinking
Mario Rizzo, Allstate’s chief financial officer, said that it should have a minimal impact on Allstate Life of New York’s policyholders.
“Wilton Re is a trusted name with a history of excellent customer service and expert management of life insurance and annuity portfolios,” Rizzo said.
Allstate’s own agents have been selling, and will continue to sell, life and annuity products from other insurers, Allstate said.
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