Allstate Sells Group Health Business to Nationwide for $1.25 Billion
Allstate Sells Group Health Business to Nationwide for $1.25 Billion
The Allstate Corporation has announced a definitive agreement to sell its Group Health business to Nationwide for $1.25 billion in cash, subject to closing adjustments and regulatory approvals.

The acquisition is set to bolster Nationwide Financial’s portfolio, particularly in employer benefits and stop-loss insurance for small businesses. Nationwide emphasized that the deal will provide a strong foundation for its expansion in the employer benefits sector.

For the first nine months of 2024, Allstate’s Group Health division reported revenues of $608 million and an adjusted net income of $69 million, highlighting its profitability ahead of the transaction.

J.P. Morgan and Ardea Partners served as financial advisors to Allstate, with Willkie Farr & Gallagher LLP acting as legal counsel. Citi advised Nationwide, while Squire Patton Boggs LLP provided legal representation.

The deal remains subject to regulatory approvals and is expected to close following standard closing conditions.

Tom Wilson, Chair, President and Chief Executive Officer, Allstate commented, “We reached another milestone in the strategy to maximise shareholder value by combining the Health & Benefits businesses with companies that have greater strategic alignment.

“Group Health provides stop-loss insurance to small businesses, which will gain access to Nationwide’s complementary product offerings. When combined with the previously announced sale of Employer Voluntary Benefits to StanCorp Financial Group, Inc., (The Standard), total sale proceeds will be $3.25 billion. The Individual Health business, with Adjusted Net Income of $18 million for the first nine months of 2024, will either be retained or combined with another company.”

Jess Merten, Chief Financial Officer, Allstate added, “Nationwide is extremely well capitalized and this transaction advances its growth strategy by expanding its product portfolio and distribution capabilities. Allstate acquired the Group Health business in 2021 as part of the $4.0 billion acquisition of National General.

“The sale is expected to generate a financial book gain of about $450 million, increase deployable capital by $0.9 billion but reduce adjusted net income return on equity by 75 basis points after closing, which is expected in 2025.”

Kirt Walker, CEO, Nationwide said, “As Nationwide continues to focus on our mission to protect people, businesses and futures with extraordinary care, this acquisition is a strong fit. We are extending our protection solutions to meet the needs of business owners today and into the future.”

John Carter, President and Chief Operating Officer, Nationwide Financial concluded, “Acquiring Allstate’s employer stop loss segment will broaden Nationwide Financial’s portfolio, meeting the needs of small businesses, allowing us to serve more customers and positioning us as a leading provider in the stop loss industry.

“This represents a significant investment in the stop loss market, adding experienced talent with proven business results, protecting over 13,000 small businesses and complementing our existing offerings in the market while accelerating our opportunity for growth.”

Share this article:

APPLY TO SPONSOR

Gain access to the most senior audience of insurance executives, entrepreneurs, and investors. We offer a wide range of opportunities for you to engage with our attendees from networking to thought leadership.

Sponsorship packages provide a wide range of opportunities developed for almost any budget and are designed to help achieve your branding, networking, and/or thought leadership goals. 

Insurtech Insights USA 2025

Join us at USA's leading insurtech conference at Javits Center, New York
on June 4-5th, uniting over 6,000 senior insurance professionals!