Nationwide announced the successful completion of its $1.25 billion acquisition of Allstate’s Group Health business segment. The deal was initially announced in January.
Nationwide stated that the acquisition will enhance and diversify Nationwide Financial’s portfolio, broadening the company’s capacity to offer stop-loss insurance—which safeguards employers with self-funded health plans against excessive losses—to small businesses.
“This acquisition expands the capabilities, specialized expertise and strong partnerships of our financial services organization, positioning our company as a leading provider in the employer stop loss industry,” said Nationwide CEO Kirt Walker, in a statement, adding that “enhancing our employer stop loss segment helps us continue to meet the needs of business owners today and into the future.”
Allstate Corp. CFO Jess Merten stated that the sale is projected to yield a financial book gain of approximately $500 million.
This agreement with Nationwide comes after Allstate’s sale last year of its subsidiaries offering employer voluntary benefits to StanCorp Financial Group in a $2 billion cash transaction.
“Selling the Group Health and Employer Voluntary Benefits businesses for a combined $3.25 billion demonstrates the strength of these businesses and Allstate’s strategic approach to capital management,” said Allstate CEO Tom Wilson.
Lindsey Murray, formerly Allstate Health’s chief operating officer, has joined Nationwide to lead its newly established Group Benefits division.
