Following the announcement on Wednesday that the insurance company had sold its Employer Voluntary Benefits division to privately held StanCorp Financial Group, popularly known as The Standard, for $2 billion, Allstate (ALL) shares hit an all-time high. The insurer announced on Tuesday that this action marked the beginning of its plan to merge its three Allstate Health & Benefits insurance divisions Employee Voluntary Benefits, Individual Health, and Group Health with businesses that possess complementary skills in order to allow them to reach their maximum growth potential.
5% Increase In Allstate
On Wednesday, the insurance provider Allstate achieved a significant stock market milestone. The stock of the corporation increased by 5% to close at their highest point ever. The rapidly expanding business also profited from other wise analyst decisions. The S&P 500 index gained by little under 0.4% on the day, while Allstate’s increase outpaced that of the index. An announcement by Allstate that morning on a significant disposal thrilled investors in particular.
Selling Employer Voluntary Benefits
The corporation said that it has finalized a deal to sell its employer voluntary benefits division for a whopping $2 billion in cash. The purchaser is StanCorp Financial, a peer insurance provider. This action is a component of Allstate’s plan to dissolve its health and benefits division. Individual and group health will continue to be two of that umbrella’s sections after the sale. Allstate stated that it anticipates increasing its deployable capital by $1.6 billion and recording a gain of about $600 million from the announced transaction. It is expected that the acquisition would finalize in the first part of the upcoming year.
Deal With StanCorp
Allstate’s CEO, Tom Wilson, stated that the company was still in talks to sell off its individual and group health businesses, which should see similar success. According to CFO Jess Merten, Allstate anticipates that the deal with StanCorp will result in a gain of roughly $600 million and a $1.6 billion boost in deployable capital. Merten further stated that following the transaction’s anticipated conclusion in the first half of next year, the adjusted net income return on equity will decrease by roughly 100 basis points (bps). As of 3 p.m. Allstate stock had increased 4.7% to $180.05. Prior to that, it had reached a new all-time high of $181.28, placing it among the top four performers in the S&P 500 for the day. About 29% more shares were traded in 2024.
