The Allstate Corporation ALL recently closed the sale of its Group Health business to Nationwide for a total consideration of $1.25 billion. ALL initially announced its intention to divest this business in January 2025, and as anticipated, successfully finalized the transaction in 2025.
The divestiture of the Group Health business is projected to yield a financial book gain of around $500 million and marks an effort of Allstate to sustain its strong record of returning value to shareholders.
Meanwhile, out of the recent divestiture, Nationwide is expected to benefit from a diversified portfolio and enhanced capacity to offer stop-loss insurance solutions to small businesses.
The recent sale is part of Allstate’s strategy to divest its Health and Benefits business, for which it made an announcement to explore opportunities in November 2023. The unit comprises employer voluntary benefits, group health and individual health businesses.
In April 2025, ALL closed the divestiture of its Employer Voluntary Benefits business to StanCorp Financial Group, Inc. The leftover Individual Health business will either be retained by Allstate or merged with another company. The combined proceeds derived from selling the Group Health and Employer Voluntary Benefits businesses stand at $3.25 billion.
Motive of ALL Behind Such Divestitures
Allstate strategically engages in divestitures to reallocate capital away from businesses that generate lower returns and limited growth prospects. This approach enables the company to reinvest more effectively in its core operational areas. Consequently, such divestiture announcements underscore Allstate’s commitment to strengthening its market presence in the Property-Liability segment as well as expanding its suite of protection service offerings.
Premiums earned in the Property-Liability segment benefited from the back of rate increases in the first quarter of 2025. Meanwhile, higher contributions from Allstate Protection Plans and Arity drove the performance of the Protection Services unit. Strong distribution relationships and product suite led to the growth of Allstate Protection Plans, while improved lead sales propel Arity revenues.
Allstate’s Price Performance & Zacks Rank
Shares of Allstate have gained 25.6% in the past year compared with the industry’s 19.8% growth. ALL currently carries a Zacks Rank #2 (Buy).
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Other Stocks to Consider
Some other top-ranked stocks in the insurance space are Palomar Holdings, Inc. PLMR, Heritage Insurance Holdings, Inc. HRTG and Horace Mann Educators Corporation HMN, each currently sporting a Zacks Rank #1 (Strong 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 16.42%. The Zacks Consensus Estimate for PLMR’s 2025 earnings indicates a rise of 39.3% while the same for revenues implies an improvement of 42.5% from the respective 2024 figures. The consensus mark for PLMR’s 2025 earnings has moved 0.4% north in the past 30 days.
The bottom line of Heritage Insurance beat estimates in each of the trailing four quarters, the average surprise being 363.17%. The Zacks Consensus Estimate for HRTG’s 2025 earnings indicates a rise of 61.7% while the same for revenues implies an improvement of 4.6% from the respective 2024 figures. The consensus mark for HRTG’s 2025 earnings has moved 33.7% north in the past 60 days.
Horace Mann’s earnings surpassed estimates in three of the last four quarters and matched the mark once, the average surprise being 24.09%. The Zacks Consensus Estimate for HMN’s 2025 earnings indicates a rise of 26.1% while the same for revenues implies an improvement of 6.6% from the respective 2024 figures. The consensus mark for HMN’s 2025 earnings has moved 5.5% north in the past 60 days.
Shares of Palomar, Heritage Insurance and Horace Mann have gained 72.8%, 242.7% and 30.2%, respectively, in the past year.
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Free: See Our Top Stock And 4 Runners UpThe Allstate Corporation (ALL) : Free Stock Analysis Report
Horace Mann Educators Corporation (HMN) : Free Stock Analysis Report
Heritage Insurance Holdings, Inc. (HRTG) : Free Stock Analysis Report
Palomar Holdings, Inc. (PLMR) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
