Nationwide to buy Allstate’s stop loss segment for $1.25 billion

COLUMBUS, Ohio - Nationwide, a major player in the U.S. insurance and financial services sector, has announced the acquisition of The Allstate Corporation (NYSE:ALL)’s employer stop loss insurance segment for $1.25 billion. The transaction, which is expected to conclude in the latter half of 2025, is subject to the usual closing conditions. Allstate, currently valued at over $51 billion in market capitalization, has demonstrated strong financial performance with revenue growth of nearly 12% in the last twelve months. According to InvestingPro analysis, the company appears undervalued based on its Fair Value calculations.

This strategic move is set to enhance Nationwide’s product offerings, specifically targeting the needs of small businesses by providing stop loss insurance, a product designed to shield employers who self-insure their health plans against significant losses.

Kirt Walker, Nationwide’s CEO, expressed that the acquisition aligns with the company’s commitment to delivering exceptional care by expanding their protection solutions. John Carter, president and COO of Nationwide Financial, added that integrating Allstate’s employer stop loss segment will not only broaden their portfolio but also strengthen their position as a leading provider in the stop loss market. The acquisition aims to protect over 13,000 small businesses and is expected to foster growth opportunities for Nationwide.

Citi is serving as the exclusive financial advisor, while Squire Patton Boggs LLP is the legal advisor to Nationwide. On the other side, Allstate has engaged J.P. Morgan and Ardea Partners for financial advice and Willkie Farr & Gallagher LLP for legal counsel.

Nationwide, headquartered in Columbus (WA:CLC), Ohio, is recognized for its A+ rating by Standard & Poor’s and is known for its innovative approach to customer service. The company offers a broad range of insurance and financial services products, including auto, business, home, and life insurance, as well as retirement plans and mutual funds.

The Allstate Corporation provides various protection products for automobiles, homes, electronic devices, and identity theft, available through multiple distribution channels.

The information reported is based on a press release statement.

In other recent news, Allstate Corporation has seen significant developments. Firstly, the company reported a notable 14.7% year-over-year increase in total revenues, hitting $16.6 billion in the third quarter. The Property-Liability business also demonstrated robust performance, with premiums rising by 11.6% to $13.7 billion.

Several analyst firms have revised their outlook on Allstate. Evercore ISI upgraded Allstate’s stock from In-line to Outperform and increased the price target to $226. Jefferies, on the other hand, raised Allstate’s price target from $231 to $267, while maintaining a Buy rating. Piper Sandler also increased the price target for Allstate’s shares to $244, while maintaining an Overweight rating.

In other company news, Allstate announced the sale of its Employer Voluntary Benefits business for $2 billion. The deal is expected to close in the first half of 2025 and generate about $1.6 billion in capital.

However, Allstate, along with other insurance companies, has been identified as one of the most exposed to the California homeowners’ market, which is expected to be heavily impacted by the claims resulting from recent wildfire damage.

These are among the recent developments that highlight Allstate’s strategic efforts to strengthen its market position and enhance customer retention.

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