After the insurance company revealed that it 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 on Wednesday.
Employee Voluntary Benefits, Individual Health, and Group Health are the three insurance divisions of Allstate Health & Benefits. The insurer said on Tuesday that this action is the first step in its plan to allow these divisions to “realize their full growth potential by combining them with companies that have additional capabilities.”
Allstate is still in talks to sell off its individual and group health sectors, which “are expected to achieve the same success,” according to CEO Tom Wilson.
Allstate estimates the deal with StanCorp will “create a gain of about $600 million and increase deployable capital by $1.6 billion,” according to Chief Financial Officer (CFO) Jess Merten. 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. ET on Wednesday, Allstate stock had increased 4.7% to $180.05. Before 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.
