Blackstone and Allstate expect the transaction to close in the second half of the year.
Photo:
Geert Vanden Wijngaert / Bloomberg News
Private equity giant Blackstone BX -0.12%
Group Inc. agreed to buy Allstate ALL -1.29%
Life Insurance Co. from Allstate Corp. for $ 2.8 billion, the latest in a series of bids between financial firms and life insurance companies.
Allstate Life Insurance Co. owns about 80 percent, or $ 23 billion, of Allstate’s life and annuity reserves. The companies expect to complete the transaction in the second half of the year.
“We are excited to conclude this transaction as Blackstone continues to grow its insurance business,” Gilles Dellaert, global head of Blackstone Insurance Solutions, said in a statement.
Financial firms have begun to buy life and annuity insurance companies. Last week, Sixth Street Partners announced a deal to buy Talcott Resolution, a life insurance company, for $ 2 billion.
Since the 2008 global financial crisis, private capital, asset management and other types of financial firms have bought blocks of life insurance policies and annuities and even entire operating units as insurers have narrowed their focus and divested their lines. of products. . Very low interest rates accounted for much of the business, affecting insurers’ profits.
Allstate said the life insurance unit had a net loss of $ 23 million in the first nine months of 2020.
In many offers involving financial buyers, newcomers aim to take advantage of investment management fees and smart investments of premiums paid by customers. Many offers involved a basic savings product known as a fixed annuity, similar to a bank certificate of deposit.
—Leslie Scism contributed to this article.
Write to Josh Beckerman at [email protected]
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It appeared in the January 27, 2021 print edition as the “Blackstone To Acquire Allstate Life Unit.”