UPDATE 1-Allstate to sell Lincoln Benefit Life insurance unit for $600 mln

Wed Jul 17, 2013 8:06pm EDT

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July 17 (Reuters) - Home and auto insurer Allstate Corp will sell one of its life insurance businesses, Lincoln Benefit Life Co, to Resolution Life Holdings for $600 million, the company said on Wednesday.

The deal is the latest example of an insurer selling a life and annuity business in the low interest-rate environment.

It follows AXA SA's sale of its U.S. life insurance unit to Protective Life Corp in April and Sun Life Financial Inc's sale of its variable annuity business to Delaware Life Holdings in December..

Reuters reported last month that British financial services firm Resolution Group was in the race to buy the Allstate unit for about $500 million to $900 million.

Allstate, the largest publicly traded home and auto insurer in the United States, said in a statement that the transaction would generate cash proceeds of about $785 million, including tax benefits.

The deal will result in a statutory gain of $350 million to $400 million and increase Allstate's deployable capital by about $1 billion.

Chief Executive Thomas Wilson said the sale, which represents only a portion of Allstate's life insurance business, would reduce the company's exposure to spread-based business and interest rates.

Allstate said it expected the deal to close by the end of the year.

Allstate shares, which have risen about 27 percent this year, closed at $51.03 on the New York Stock Exchange on Wednesday.