Allstate Sells Group Health to Nationwide for $1.25 Billion

Allstate Corporation has taken a significant step by selling its Group Health business for $1.25 billion. This move aligns with their strategy to maximize shareholder value and enhance their financial book gain.

Date: 31-01-2025

AI Rating: 6

Impact of the Sale on Financial Metrics

Allstate's sale of its Group Health business to Nationwide for $1.25 billion directly impacts revenue growth, as the Group Health reported revenues of $608 million for the first nine months of 2024. Additionally, the adjusted net income from this business was $69 million, indicating a positive revenue stream from this segment prior to the sale.

The transaction is expected to provide a financial book gain of around $450 million and increase deployable capital by $0.9 billion. This boosts the company’s capital position, a critical factor for investor sentiment.

However, it is important to note that the sale will also reduce Allstate's adjusted net income return on equity by 75 basis points after the closing is expected in 2025, which could have a mildly negative impact on investor perception regarding the company's profitability metrics in the future.

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