US insurer Nationwide has agreed to accumulate the employer cease loss insurance coverage unit Group Well being from Allstate for $1.25bn in money.
Nationwide stated this acquisition will improve and broaden Nationwide Monetary’s portfolio, growing its capability to supply cease loss insurance coverage to small companies.
Cease loss insurance coverage helps shield employers that self-fund their medical insurance plans in opposition to extreme monetary losses.
The acquisition will lay the groundwork for future development in employer advantages, Nationwide added.
Nationwide Monetary president and chief working officer John Carter stated: “Buying Allstate’s employer cease loss section will broaden Nationwide Monetary’s portfolio, assembly the wants of small companies, permitting us to serve extra prospects and positioning us as a number one supplier within the cease loss trade.
“This represents a major funding within the cease loss market, including skilled expertise with confirmed enterprise outcomes, defending over 13,000 small companies and complementing our present choices out there whereas accelerating our alternative for development.”
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Allstate chair, president and CEO Tom Wilson stated: “We reached one other milestone within the technique to maximise shareholder worth by combining the Well being & Advantages companies with firms which have better strategic alignment.
“Group Well being gives stop-loss insurance coverage to small companies, which can acquire entry to Nationwide’s complementary product choices.”
For the primary 9 months of 2024, Group Well being reported revenues of $608m and an adjusted web earnings of $69m.
In line with Allstate CFO Jess Merten, the Group Well being enterprise was acquired in 2021 as part of the $4bn buy of Nationwide Common.
Merten highlighted that the sale is anticipated to generate a monetary e book acquire of round $450m and enhance deployable capital by $900m.
When mixed with the beforehand introduced sale of Employer Voluntary Advantages to StanCorp Monetary Group, whole sale proceeds for Allstate will likely be $3.25bn.
Final month, Nationwide collaborated with water options supplier Phyn to supply leak detection options to policyholders with high-value properties.
