Blackstone and Allstate expect the deal to close during the second half of the year.
Photo:
Geert Vanden Wijngaert / Bloomberg News
Private equity giant Blackstone BX -0.12%
Group Inc. has agreed to buy Allstate ALL -1.29%
Life Insurance Co. of Allstate Corp. for $ 2.8 billion, the latest in a series of deals between financial companies and life insurance companies.
Allstate Life Insurance Co. it has about 80%, or $ 23 billion, of Allstate’s life and annuity reserves. The companies plan to close the deal during the second half of the year.
“We are pleased to enter into this transaction as Blackstone continues to grow its insurance business,” Gilles Dellaert, global head of Blackstone Insurance Solutions, said in a statement.
Financial companies have been caught buying life insurance and annuity companies. Last week, Sixth Street Partners announced a deal to buy the Talcott Resolution life insurance business for $ 2 billion.
Since the global financial crisis of 2008, private equity, asset management, and other types of financial firms have purchased life insurance policy blocks and annuities, and even entire operating units, as insurers reduced the focus and divested product lines. . Ultralight interest rates have caused much of the activity and harmed the profits of insurers.
Allstate said the life insurance unit had a net loss of $ 23 million during the first nine months of 2020.
In many deals involving financial buyers, newcomers aim to benefit from the investment management commissions and smart investments of premiums paid by customers. Many offers have resulted in a basic savings product known as fixed income, similar to the bank certificate of deposit.
—Leslie Scism contributed to this article.
Write to Josh Beckerman to [email protected]
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It appeared in the January 27, 2021 print edition as “Blackstone to Acquire Allstate Life Unit.”