Wilton Re will acquire Allstate Life Insurance Company of New York (ALNY) for $220 million.
The Allstate Corporation had already agreed to sell Allstate Life Insurance Company (ALIC) and certain affiliated entities to Blackstone. The additional sale to Wilton Re completes its exit from the life and annuity businesses.
The definitive agreement between Allstate and Wilton Re divests ALNY and terminates an ALIC stop-loss reinsurance treaty. Allstate will contribute $660 million of capital into ALNY and receive a payment of $220 million from Wilton Re. The transaction will reduce GAAP reserves and invested assets by $5 billion and $6 billion respectively. The combined divestitures of ALIC and ALNY will result in an estimated GAAP net loss of approximately $4 billion, which will be recorded in the first quarter of 2021, and generate approximately $1.7 billion of deployable capital.
JP Morgan Securities and Ardea Partners acted as financial advisers on the Wilton Re deal, with Willkie Farr & Gallagher serving as the legal adviser to Allstate.
Both transactions are expected to close in the second half of 2021, subject to regulatory approval and other closing conditions.
Allstate agents and exclusive financial specialists will continue to offer a full suite of life insurance and retirement solutions from third-party providers.
Mario Rizzo, chief financial officer at Allstate, said: “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.”
Wilton Re, Allstate, Mario Rizzo