The Allstate Corporation (ALL – Free Report) recently closed the divestiture of its Employer Voluntary Benefits business to StanCorp Financial Group, Inc. (The Standard). Plans to sell this business were disclosed by the company in August 2024, and as targeted, the transaction was completed within the first half of 2025. The Standard paid $2 billion to acquire the business, a part of ALL’s Health and Benefits segment.
Moreover, the sale of the Employer Voluntary Benefits business resulted in a pre-tax book gain of approximately $625 million. The funds will strengthen Allstate’s disciplined approach to capital management, which encompasses the newly announced share buyback program of $1.5 billion, which will run till Sept. 30, 2026.
Along with the Employer Voluntary Benefits business, the Health and Benefits business comprises Group Health and Individual Health businesses. In January 2025, Allstate inked a definitive deal to divest its Group Health business to Nationwide, which is likely to be completed by 2025 and expected to fetch cash proceeds of $1.25 billion. The leftover Individual Health business will either be retained by Allstate or merged with another company.
The combined transaction proceeds fetched by Allstate out of Employer Voluntary Benefits and Group Health divestitures are expected to be $3.25 billion in 2025.
Divestitures: ALL’s Strategy to Boost Focus on Core Operations
Allstate follows a remarkable strategy of undertaking divestitures to extract capital out of businesses that fetch lower returns and growth, and invest more capital in its core areas of operations. Therefore, such divestiture announcements reflect ALL’s strategic focus to boost market share in the personal property-liability business and enhance its protection services offerings suite.
Insurance premiums earned from the Property-Liability business advanced 11.2% year over year in 2024 on the back of prudent rate hikes. Meanwhile, the Protection Services segment delivers a range of protection solutions and services, primarily by integrating Allstate-branded offerings into non-insurance purchases. Total revenues in the unit improved 16.7% year over year in 2024, driven mainly by strength in Allstate Protection Plans and Arity.
Allstate’s Price Performance & Zacks Rank
Shares of Allstate have gained 19.7% in the past year compared with the industry’s 24.5% growth. ALL currently carries a Zacks Rank #3 (Hold).
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks in the insurance space are Palomar Holdings, Inc. (PLMR – Free Report) , Horace Mann Educators Corporation (HMN – Free Report) and Jackson Financial Inc. (JXN – Free Report) . While Palomar currently sports a Zacks Rank #1 (Strong Buy), Horace Mann and Jackson Financial carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Palomar’s earnings surpassed estimates in each of the last four quarters, the average surprise being 16.64%. The Zacks Consensus Estimate for PLMR’s 2025 earnings indicates a rise of 32.6% while the same for revenues implies an improvement of 38.9% from the respective 2024 figures. The consensus mark for PLMR’s 2025 earnings has moved 0.6% north in the past seven days.
The bottom line of Horace Mann beat estimates in two of the trailing four quarters, matched the mark once and missed the same in the remaining one occasion, the average surprise being 13.17%. The Zacks Consensus Estimate for HMN’s 2025 earnings indicates a rise of 21.7% while the same for revenues implies an improvement of 8.7% from the respective 2024 figures. The consensus mark for HMN’s 2025 earnings has moved 1.3% north in the past 60 days.
Jackson Financial’s earnings surpassed estimates in two of the last four quarters and missed the mark twice, the average surprise being 8.91%. The Zacks Consensus Estimate for JXN’s 2025 earnings indicates a rise of 11% from the 2024 figure. The consensus mark for JXN’s 2025 earnings has moved 1.5% north in the past 60 days.
Shares of Palomar, Horace Mann and Jackson Financial have gained 69.2%, 18.1% and 27.8%, respectively, in the past year.
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