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Allstate life insurance unit fetches $2.8 billion

Deal with Blackstone Group is expected to close in latter half of 2021.

The Allstate Corp. headquarters in Northbrook
The Allstate Corp. headquarters in Northbrook

Northbrook-based Allstate said Wednesday it is selling its life insurance unit, with results hurt by record-low interest rates, to the investment firm Blackstone Group for $2.8 billion.

The business, Allstate Life Insurance, generated net income of $467 million in 2019 and a net loss of $23 million for the first nine months of 2020, the company said. It said the deal is subject to regulatory approval and could close in the second half of 2021.

Allstate said the life insurance business accounts for $23 billion, or 80%, of its life and annuity reserves. Not part of the sale is Allstate Life Insurance Co. of New York. The company said it wants to sell it or find someone to assume its risks.

“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,” Allstate Chairman Tom Wilson said.

Gilles Dellaert, global head of Blackstone Insurance Solutions, said, “We’re pleased to enter into this transaction as Blackstone continues growing its insurance business. We believe our team’s extensive experience in the insurance sector and world-class asset origination capabilities will deliver significant benefits to policyholders and investors over the long term.”