In a deal announced earlier this week, Allstate has agreed to sell its Allstate Life Insurance Company (ALIC) to entities managed by investment firm Blackstone for $2.8 billion.

Discussing the sale, Allstate President and CEO Tom Wilson highlighted the need to release capital to pursue a strategic direction more in line with growth in the personal lines property-casualty market. 

“Allstate is deploying capital out of lower growth and return businesses while continuing to execute our strategy to grow market share in personal property-liability and expand protection solutions for customers," Wilson said.

Earlier in January, Allstate closed its $4 billion acquisition of National General, a North Carolina-based property-casualty insurance group. 

ALIC holds $23 billion, approximately 80%, of Allstate's life and annuity reserves and generated net income of $467 million in 2019 and a net loss of $23 million in the first nine months of 2020. The deal does not include Allstate Life Insurance Company of New York (ALNY), which has $5 billion of Generally Accepted Accounting Principles (GAAP) reserves. Allstate will retain ownership of ALNY but will pursue alternatives to sell or transfer risk to a third party, according to a statement.

"We're pleased to enter into this transaction as Blackstone continues growing its insurance business," said Gilles Dellaert, global head of Blackstone Insurance Solutions.

“We're excited to have raised long-term capital to invest in the business," added Menes Chee, senior managing director at Blackstone. “Allstate's team has created a strong book of business and we look forward to helping continue to provide exceptional service to policyholders moving forward."

The transaction is subject to regulatory approval with an expected closing in the second half of 2021.

Olivia Overman is IA content editor.