Insurer Allstate has agreed to sell its subsidiaries that provide employer voluntary benefits to StanCorp Financial Group (The Standard) in a $2 billion cash deal, the company said in a regulatory filing on Tuesday.

The deal comes at a time when the economy is seeing slowing demand that has prompted companies to exit ventures not in sync with their business objectives.

The sale is the first step in insurer’s strategic decision to enable its health & benefits businesses — employer voluntary benefits, individual and group health — to realize their full growth potential by merging them with its ventures that have additional capabilities, the company said.

“The sale is expected to generate a gain of about $600 million and increase deployable capital by $1.6 billion,” Chief Financial Officer Jess Merten said.

The businesses being sold had revenues of $535 million and adjusted net income of $45 million for the first half of 2024.

Late in July, Allstate posted a second-quarter profit, compared with a year-earlier loss.

J.P. Morgan and Ardea Partners acted as financial advisors to Allstate while Citi acted as exclusive financial advisor to The Standard.

(Reporting by Jaiveer Singh Shekhawat in Bengaluru; Editing by Mohammed Safi Shamsi)