Allstate Corporation has announced that it has reached agreements with Prudential Financial for the reinsurance of its existing variable annuity business and for an exclusive distribution arrangement in a deal worth $580.5 million. The transaction is expected to be completed at the end of Q2 2006.
Allstate’s variable annuity products, with approximately $16 billion in account values, are manufactured by Allstate Financial, the business segment that provides life insurance, retirement and investment products to individuals and institutional customers.
As part of the transaction, Prudential Financial will become the exclusive provider of variable annuity products through Allstate’s exclusive agency channel and will take on Allstate’s distribution responsibilities in the broker-dealer channel.
Allstate Financial will continue to market variable annuities through its extensive set of bank distribution relationships by transitioning to an Allstate-branded, Prudential-designed variable annuity product.
This transaction will enable Allstate Financial to dedicate additional resources and better deploy capital to a more focused portfolio of life insurance, fixed annuity and equity indexed annuity products where we have scale and significant market presence, said Casey Sylla, chairman and president of Allstate Financial. It represents another action we are taking to deliver products and services on a more cost effective basis.