Allstate Corp. said Friday that it is buying American Heritage Life Investment Corp. of Jacksonville, Fla., for $1.1 billion.
American Heritage focuses on distributing life, disability, and health insurance to workers through their employers, a channel Allstate has not tapped.
There "wasn't a better way to get into the business than to acquire them," said John L. Carl, senior vice president and chief financial officer of Allstate.
The deal, expected to close by yearend, reflects Allstate's strategy to expand through multiple channels by offering numerous products and brands. The announcement comes a month after Allstate said it was buying the personal lines business of Chicago-based CNA. Allstate is also marketing variable annuities with Putnam Investments.
"Clearly they're doing major diversification," said Steven M. Landberg, a principal of Sibson & Co., a New York consulting firm.
Shareholders would receive $32.25 for each American Heritage share in either Allstate shares or cash.