:max_bytes(150000):strip_icc()/GettyImages-1993500393-2c627c1e039b4093b89bcfa1bbc2dd38.jpg "Allstate sells its voluntary benefits division; share price rises to record high")
Allstate sells its voluntary benefits division; share price rises to record high
Key findings
- Allstate sold its voluntary benefits business to StanCorp Financial Group for $2 billion.
- The insurance company said the decision was part of its efforts to sell its three Allstate Health & Benefits units.
- On the news, Allstate shares rose 4% to an all-time high on Wednesday, placing the company among the top four performers in the S&P 500 index.
Allstate (ALL) shares hit an all-time high on Wednesday after the insurer announced it sold its voluntary employee benefits business to privately held StanCorp Financial Group, also known as The Standard, for $2 billion.
The insurer said Tuesday that the move was the first step in its plan to enable its three Allstate Health & Benefits insurance units – Employee Voluntary Benefits, Individual Health and Group Health – to “realize their full growth potential by combining them with companies that have additional capacity.”
Allstate plans to sell two more Health & Benefits divisions
Chief Executive Officer (CEO) Tom Wilson said Allstate continues to have discussions about selling its Individual Health and Group Health segments, which are “expected to have the same level of success.”
Chief Financial Officer Jess Merten said Allstate expects the agreement with StanCorp to “generate approximately $600 million in gains and increase deployable capital by $1.6 billion.” Merten added that adjusted return on equity will decline by approximately 100 basis points (bps) following completion of the transaction, which is expected in the first half of next year.
Allstate shares rose 4.7% to $180.05 at 3 p.m. ET on Wednesday, after earlier hitting a new all-time high of $181.28, joining the day’s top four performers in the S&P 500. Shares are up about 29% in 2024.
