Allstate Unloads Group Health Business to Nationwide for $1.25B
Allstate has announced the sale of its Group Health business to Nationwide for $1.25 billion in cash. The division, which specializes in stop-loss insurance for small businesses, generated $608 million in revenue and $69 million in Adjusted Net Income during the first nine months of 2024.
With the previously announced sale of Employer Voluntary Benefits to StanCorp Financial Group, Allstate’s total sale proceeds will reach $3.25 billion. The transactions are expected to generate a financial book gain of about $450 million, increase deployable capital by $900 million, and reduce adjusted net income return on equity by 75 basis points after closing in 2025
Allstate’s Individual Health business, which reported $18 million in Adjusted Net Income for the first nine months of 2024, will either be retained or merged with another company. The decision aligns with Allstate’s ongoing portfolio optimization strategy, as it evaluates the best path forward for this segment.
The sale aligns with Allstate’s strategy to maximize shareholder value by merging its health and benefits businesses with firms that provide a better strategic fit, according to Tom Wilson, Chair, President, and CEO of Allstate.
“Group health provides stop-loss insurance to small businesses, which will gain access to Nationwide’s complementary product offerings,” Wilson said. Stop loss insurance helps protect employers that self-fund their health insurance plans against excessive financial losses.
J.P. Morgan and Ardea Partners are serving as financial advisors, and Willkie Farr & Gallagher LLP is providing legal counsel to Allstate. Citi is acting as financial advisor to Nationwide, with Squire Patton Boggs LLP as legal advisor.