The Allstate Corporation has completed its exit from the life and annuity sectors with the sale of Allstate Life Insurance Company of New York (ALNY) to Wilton Re for a sum of $220 million.
Under the terms of this definitive agreement, Allstate divests ALNY and also terminates an ALIC stop-loss reinsurance treaty.
The U.S. primary insurer has agreed to contribute $660 million of capital into ALNY, then receive the $220 million fee from Wilton Re, a provider of in force and reinsurance solutions in the North American life insurance industry.
This deal, alongside Allstate’s previously announced agreement to sell Allstate Life Insurance Company (ALIC) and certain subsidiaries to entities managed by private equity investment giant, Blackstone, completes the firm’s exit from the life and annuity businesses.
It’s expected that this transaction with Wilton Re will reduce GAAP reserves by $5 billion and invested assets by $6 billion. Combined, the sale of both ALIC and ALNY will result in an estimated GAAP net loss of around $4 billion, and generate roughly $1.7 billion of deployable capital.
Mario Rizzo, Chief Financial Officer (CFO) of Allstate, commented: “This transaction has minimal impact on our strategy of increasing market share in personal property-liability and expanding protection solutions for customers. Wilton Re is a trusted name with a history of excellent customer service and expert management of life insurance and annuity portfolios, so ALNY customers will be well protected.”
Both the ALIC and ALNY transactions are expected to close in the second half of this year, subject to regulatory approval and other closing conditions.
J.P. Morgan Securities LLC and Ardea Partners LP acted as financial advisers, and Willkie Farr & Gallagher LLP was the legal adviser to Allstate.