The Allstate Corporation (ALL) Investor Update summary

Transaction overview

• Agreement reached to sell the Employer Voluntary Benefits business to StanCorp Financial/The Standard for $2.0 billion in cash, representing a 20.6x earnings multiple over the last 12 months, subject to closing adjustments and approvals.

• The sale is part of a broader strategy to combine Health and Benefits businesses with partners to unlock growth and synergies.

• The transaction is expected to close in early to the first half of 2025, pending regulatory approvals from Florida, Oregon, and Hart-Scott-Rodino.

• Allstate will provide transition services for up to two years and its exclusive agents will offer The Standard's products for five years post-sale.

• Allstate will host a conference call and webcast to discuss the transaction, with J.P. Morgan and Ardea Partners advising Allstate and Citi advising The Standard.

Financial impact

• The transaction will generate a financial book gain of about $600 million and increase available capital by $1.6 billion, about 8% above June 30, 2024.

• The sale price nets to $1.7 billion after taxes, with a $600 million gain including goodwill allocation.

• Revenues, investments, and adjusted net income will decrease by 2%-3% after the sale.

• Adjusted net income return on equity will decrease by about 100 basis points due to lower income and higher equity.

• Assets and liabilities will be reduced by $2.9 billion and $2.1 billion, respectively, upon reclassification as Held for Sale starting Q3 2024.

Business segment details and performance

• Health & Benefits segment contributed 4% of 2023 revenues, with EVB accounting for 43% of segment revenue and 40% of adjusted net income.

• Employer Voluntary Benefits business served over 3.5 million customers, with $535 million in revenue and $45 million in adjusted net income for H1 2024.

• EVB serves 3.6 million policyholders through 4,000+ agents, offering life, accident, critical illness, and hospital indemnity products.

• Statutory capital and surplus for the business stood at $255 million as of H1 2024.

• Allstate retains the economics of the business until closing.