We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Allstate (ALL) to Sell Employer Voluntary Benefits Unit for $2B
Read MoreHide Full Article
The Allstate Corporation (ALL - Free Report) recently inked a definitive agreement to divest its Employer Voluntary Benefits business to StanCorp Financial Group, Inc. The unit, along with the Individual and Group Health businesses, forms a part of ALL’s Health & Benefits segment. Discussions remain underway regarding the sale of the Individual and Group Health businesses.
The company announced its intention to divest the Employer Voluntary Benefits unit last year. The unit’s subsidiaries will be sold to The Standard for $2 billion in cash, subject to adjustments based on the closing balance sheet and customary closing conditions and approvals. The transaction is projected to be closed in the first half of 2025.
The divestiture is anticipated to yield a gain of approximately $600 million and boost deployable capital by $1.6 billion. Following the transaction, adjusted net income return on equity is projected to decline around 100 basis points (bps).
The recent move marks the initial phase of Allstate’s strategic plan to unlock the growth potential of its three Health & Benefits units by integrating them with companies that offer enhanced capabilities. At the same time, the divestiture bears testament to ALL’s strategy to deploy greater capital in boosting market share in personal property-liability as well as expanding protection offerings.
Allstate had earlier resorted to divestitures to increase focus on growing its core businesses. In 2021, it marked an exit from Life and Annuity businesses by divesting Allstate Life Insurance Company and certain subsidiaries to entities managed by Blackstone (BX - Free Report) .
The Property-Liability and Protection Services units fared well in the second quarter of 2024. The company has pursued constant rate hikes in its Property-Liability business so far in 2024, which is likely to provide an impetus to overall premiums. P&C insurance premiums earned advanced 11.9% year over year in the second quarter of 2024. It also witnessed favorable underwriting results during the same time period.
On the other hand, strength in Allstate Protection Plans and Arity drives the performance of the Protection Services segment.
Other insurers, such as The Hartford Financial Services Group, Inc. (HIG - Free Report) and RenaissanceRe Holdings Ltd. (RNR - Free Report) , also benefited from higher premiums in the second quarter of 2024.
Hartford Financial’s earned premiums rose 6.9% to $5.6 billion. Pre-tax net investment income of $602 million grew 11.5% year over year. Pretax income of $912 million increased 35.7% year over year. The Commercial Lines segment’s revenues amounted to $3.5 billion, which rose 8.5% year over year.
Core earnings of $551 million climbed 11.8% year over year. Meanwhile, the Personal Lines unit recorded revenues of $924 million, which improved 12.7%. The underlying combined ratio of 96.7% improved 500 bps year over year. The Group Benefits segment’s revenues grew 2.6% to $1.8 billion.
RenaissanceRe’s net premiums earned were $2.54 billion, which soared 42.3% year over year. Net investment income of $410.8 million rose 40.4% year over year. It generated an underwriting income of $479.3 million, which advanced 36.6% year over year in the second quarter. The combined ratio of 81.1% deteriorated 80 bps year over year. The Property segment recorded gross premiums written of $1.75 billion, which grew 25% year over year. The Casualty and Specialty unit’s gross premiums written rose 33.9% to $1.67 billion.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Allstate (ALL) to Sell Employer Voluntary Benefits Unit for $2B
The Allstate Corporation (ALL - Free Report) recently inked a definitive agreement to divest its Employer Voluntary Benefits business to StanCorp Financial Group, Inc. The unit, along with the Individual and Group Health businesses, forms a part of ALL’s Health & Benefits segment. Discussions remain underway regarding the sale of the Individual and Group Health businesses.
The company announced its intention to divest the Employer Voluntary Benefits unit last year. The unit’s subsidiaries will be sold to The Standard for $2 billion in cash, subject to adjustments based on the closing balance sheet and customary closing conditions and approvals. The transaction is projected to be closed in the first half of 2025.
The divestiture is anticipated to yield a gain of approximately $600 million and boost deployable capital by $1.6 billion. Following the transaction, adjusted net income return on equity is projected to decline around 100 basis points (bps).
The recent move marks the initial phase of Allstate’s strategic plan to unlock the growth potential of its three Health & Benefits units by integrating them with companies that offer enhanced capabilities. At the same time, the divestiture bears testament to ALL’s strategy to deploy greater capital in boosting market share in personal property-liability as well as expanding protection offerings.
Allstate had earlier resorted to divestitures to increase focus on growing its core businesses. In 2021, it marked an exit from Life and Annuity businesses by divesting Allstate Life Insurance Company and certain subsidiaries to entities managed by Blackstone (BX - Free Report) .
The Property-Liability and Protection Services units fared well in the second quarter of 2024. The company has pursued constant rate hikes in its Property-Liability business so far in 2024, which is likely to provide an impetus to overall premiums. P&C insurance premiums earned advanced 11.9% year over year in the second quarter of 2024. It also witnessed favorable underwriting results during the same time period.
On the other hand, strength in Allstate Protection Plans and Arity drives the performance of the Protection Services segment.
Other insurers, such as The Hartford Financial Services Group, Inc. (HIG - Free Report) and RenaissanceRe Holdings Ltd. (RNR - Free Report) , also benefited from higher premiums in the second quarter of 2024.
Hartford Financial’s earned premiums rose 6.9% to $5.6 billion. Pre-tax net investment income of $602 million grew 11.5% year over year. Pretax income of $912 million increased 35.7% year over year. The Commercial Lines segment’s revenues amounted to $3.5 billion, which rose 8.5% year over year.
Core earnings of $551 million climbed 11.8% year over year. Meanwhile, the Personal Lines unit recorded revenues of $924 million, which improved 12.7%. The underlying combined ratio of 96.7% improved 500 bps year over year. The Group Benefits segment’s revenues grew 2.6% to $1.8 billion.
RenaissanceRe’s net premiums earned were $2.54 billion, which soared 42.3% year over year. Net investment income of $410.8 million rose 40.4% year over year. It generated an underwriting income of $479.3 million, which advanced 36.6% year over year in the second quarter. The combined ratio of 81.1% deteriorated 80 bps year over year. The Property segment recorded gross premiums written of $1.75 billion, which grew 25% year over year. The Casualty and Specialty unit’s gross premiums written rose 33.9% to $1.67 billion.