Insurance giant Allstate will sell off its employer voluntary benefits arm to StanCorp Financial Group, also known as the Standard, in a deal valued at $2 billion.
The company said in an announcement the deal is the initial step in a strategic plan to push Allstate's three health and wellness segments to "realize their full growth potential by combining them with companies that have additional capabilities."
Tom Wilson, CEO of Allstate, said in the press release that the employer voluntary benefits unit serves 3.5 million people who will continue to receive their services of choice under the Standard. Agents will be able to provide a "broader array" of benefits as part of a five-year distribution deal, he said.
In addition, he said the company's shareholders will benefit as Allstate deploys the gained capital to grow its reach in the personal property-liability space and expand its protection offerings.
"The alignment between Allstate’s industry-leading product offerings, employer relationships, distribution and talented team and The Standard’s group benefits business will provide customers with broader protection and higher value," Wilson said.
Allstate is also seeking buyers for its individual and group health businesses, Wilson said.
Jess Merten, Allstate's chief financial officer, said in the press release the deal is set to generate a gain of $600 million and grow the company's deployable capital by $1.6 billion. It expects the sale to close in the first half of 2025.
The company noted in the release that during the first half of 2024, the employer voluntary benefits segment brought in revenues of $535 million and adjusted net income of $45 million.
“We see significant synergies between Allstate’s industry-leading supplemental and voluntary life products and The Standard’s expertise in workplace benefits," Dan McMillan, CEO of the Standard, said in the release. "This transaction enhances our suite of offerings for customers of all sizes."