Truist Plans to Sell 20% of Its Strong Insurance Unit: Is This the Right Move?
After several months of speculation about its spinoff plans, large super-regional lender Truist Financial (NYSE: TFC) went ahead and sold a 20% stake in its insurance business to Stone Point Capital for $1.95 billion.
The deal values Truist Insurance Holdings -- the sixth-largest insurance brokerage in the U.S. -- at an aggregate value of $14.75 billion. The deal is unique because not many banks like Truist have such a large insurance business. Is this the right move for the bank?
Truist's insurance business has more than 250 offices across the U.S. and took in more than $45 billion in premiums in 2022. Roughly 60% of the unit's clients are wholesale, which is more than normal, while 40% are retail. The insurance business is also a material contributor to the bank's finances, providing 13% of its total revenue, 35% of its fee income, and 8% of its adjusted earnings.
Source Fool.com
