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Allstate foresees $4B 1Q net loss

by The Washington Post | March 30, 2021 at 2:00 a.m.

Allstate Corp. struck another deal to sell part of a life insurance business and warned investors Monday that the divestitures will result in a roughly $4 billion net loss in the first quarter.

Wilton Re agreed to pay $220 million to buy Allstate Life Insurance Co. of New York in a transaction that will complete Allstate's exit from the life and annuity market, according to a statement Monday. In January, Allstate reached a deal to sell a life business to Blackstone Group Inc. for $2.8 billion.

Allstate has been adjusting its strategy to focus more on personal property-liability coverage, expanding its distribution with independent agents through a $4 billion agreement to buy National General Holdings Corp. that was completed this year. The two life insurance divestitures will contribute to the estimated $4 billion net loss under generally accepted accounting principles, while also generating $1.7 billion of deployable capital, the company said.

"This transaction has minimal impact on our strategy of increasing market share in personal property-liability and expanding protection solutions for customers," Allstate Chief Financial Officer Mario Rizzo said in the statement. "Wilton Re is a trusted name with a history of excellent customer service and expert management of life-insurance and annuity portfolios."

Allstate also agreed to contribute $660 million of capital into the New York life business unit and then receive the $220 million payment from Wilton Re. Both the New York sale and the deal with Blackstone are expected to be completed in the second half of this year, Allstate said.

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