Allstate to Sell Annuity Business, Focus on Growth Areas
April 9, 2019 by Zacks Equity Research
The Allstate Corporation ALL is in talks with FGL Holdings FG to sell-off its annuity business, per Reuters. Notably, the company has been looking for options to get rid of this business due to disappointing returns.
Allstate’s annuities segment accounted for about 2.4% of total revenues and 0.2% of total policies in force in 2018. The segment consists of deferred fixed annuities and immediate fixed annuities.
The segment is in run-off and focused on increasing lifetime economic value. Both the deferred fixed annuities and immediate fixed annuities have been adversely affected by the historically low interest rate environment.
The company’s immediate annuity business has also been affected by medical advancements that have resulted in annuitants living longer than anticipated when many of these contracts were signed.
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