Resolution completes acquisition of Lincoln Benefit
The sale of life insurer Lincoln Benefit Life Company to firm Resolution Life Holdings, a company founded by Cowdery’s London-based Resolution Group, has been completed.
The acquisition of Lincoln, previously owned by personal lines insurer The Allstate Corporation, was announced in 2013.
The sale includes Lincoln’s life insurance business generated through independent agencies and its entire deferred fixed annuity and long-term care insurance businesses.
Life insurance policies sold through Allstate agencies will be retained through a reinsurance arrangement.
The sale will reduce Allstate's life and annuity reserves and investment portfolio by approximately $12.7 billion and $11.9 billion, respectively.
The estimated gross sale price is $796 million, representing $587 million of cash and the retention of tax benefits.
The estimated GAAP loss on sale is approximately $510 million, which is $11 million lower than the estimated loss of $521 million recorded in 2013 due to contractual closing adjustments.
The transaction is estimated to result in a statutory accounting gain of approximately $365 million and is expected to reduce Allstate Life Insurance Company's capital requirement by $1 billion.
Net income generated by Lincoln Benefit Life was approximately $140 million in 2013.
"This divestiture is another strategic step for Allstate to serve distinct consumer segments with differentiated offerings," said Thomas Wilson, chairman, president and chief executive officer of The Allstate Corporation.
"Allstate Financial will now focus on providing proprietary life and non-proprietary retirement products to the customer segment served by local Allstate agencies. This sale also supports our risk and return objectives of reducing exposure to interest rates and spread-based businesses."
