Truist to Sell $15.5B Insurance Biz to PE Firms

Truist Financial Corporation has agreed to sell the remaining 80% stake in its insurance brokerage business, Truist Insurance Holdings, to an investor group led by private equity firms Stone Point Capital and Clayton, Dubilier & Rice in an all-cash transaction valued at $15.5 billion.

Mubadala Investment Company and other co-investors are also participating in the investment.

The sale is expected to boost Truist’s CET1 capital ratio by 2.3% and tangible book value per share by $7.12, or 33%, according to the firm. The sale and reinvestment of the $10.1 billion in expected cash proceeds is predicted to dilute 2024 earnings per share by $0.20, assuming the sale occurred in early 2024 as expected and the proceeds were reinvested in cash yielding 4.5%.

Truist stated that it will consider a “variety of capital deployment options” for the approximately $10 billion in cash proceeds from the transaction, “including a potential balance sheet repositioning.”

“We are pleased to have reached an agreement to sell Truist Insurance Holdings as it will further strengthen our balance sheet, afford us the ability to maintain our earnings profile and create significant ongoing flexibility to invest in our core banking franchise,” Truist CEO Bill Rogers.

In October 2023, it was reported that Truist was in talks to sell Truist Insurance Holdings to Stone Point Capital for an estimated $10 billion. This followed the Federal Reserve’s June 2023 stress test, which identified Truist as one of the banks with the lowest stressed capital level.