Blackstone wraps up $5bn life insurance deals with AIG and Allstate

American International Group (AIG) has completed the  sale of 9.9 percent equity stake in its life & retirement business to  Blackstone.

The completion of the deal will see Blackstone managing an initial $50 billion of AIG’s existing life & retirement investment portfolio, with that amount increasing to $92.5 billion by 2027.

In addition, Jon Gray, president and chief operating officer of Blackstone, will join the life & retirement board of directors of AIG.

The $2.2 billion all-cash deal, announced in July this year, will generate "significant new capital" for AIG as it looks to separate its L&R business.

Separately, Blackstone's $2.8 billion deal with US primary insurance carrier The Allstate Corporation has also closed this week.

The business has acquired Allstate Life Insurance Company (ALIC) and certain subsidiaries for total proceeds of $4 billion, which is inclusive of approximately $2.8 billion purchase price, as well as increases in statutory surplus since March 31, 2020.

ALIC has been renamed Everlake Life Insurance under its new ownership by entities managed by Blackstone.

Gilles Dellaert (pictured), global head of Blackstone Insurance Solutions, said: “We are pleased to complete this transaction. We believe the investment outperformance we can deliver through our industry-leading private credit origination platforms – while maintaining strong policyholder protections – will play a vital role in helping meet long-term customer obligations, especially at a time of historically low interest rates.”

Commenting on the transaction, Tom Wilson, chair, president and CEO of The Allstate Corporation, said: “Allstate’s strategy is to increase personal property-liability market share and expand protection offerings to customers. This sale redeploys capital into highly attractive property-liability and protection service businesses and reduces interest-rate exposure.”

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