(Bloomberg)—Allstate is exploring a sale of its fixed-annuities enterprise, which stopped promoting new insurance policies about 5 years in the past, folks conversant in the matter mentioned.
The insurer is working with monetary advisers to hunt consumers for the enterprise, which has a e book worth of $four billion to $5 billion, mentioned the folks, who requested to not be recognized as a result of the matter isn’t public. It isn’t clear how a lot the unit may fetch in a sale, although annuities companies are likely to promote at a reduction to e book worth.
A consultant for Northbrook-based Allstate didn’t have a right away remark.
Property and casualty and life insurers have been steadily promoting blocks of annuities or hanging reinsurance offers to unload the insurance policies, which individuals purchase to make sure a gradual stream of revenue after they retire. It’s onerous to earn a living on annuities when rates of interest are low and securities markets are risky. Insurers have been significantly desperate to do away with outdated insurance policies written earlier than the 2008 monetary disaster that promised beneficiant payouts.
They’ve discovered keen consumers in private-equity companies and insurers resembling Athene Holding and Decision Re focusing on managing advanced, long-term liabilities.
Hartford Monetary Providers Group closed the sale of most of its annuity unit in Could, whereas Manulife Monetary introduced reinsurance offers to cede a few of its annuities this month.
Allstate has been retreating from life insurance coverage for greater than a decade. It struck a reinsurance deal to dump its variable annuity enterprise in 2006 and offered a life insurer in 2013. It additionally mentioned that 12 months that it will cease promoting its personal mounted annuities, although its brokers proceed to promote insurance policies issued by different insurers.