Illinois-based life insurance company Allstate Corporation has agreed to sell its life insurance business to Blackstone Group for $2.8 billion.

Blackstone is aiming for the acquisition to further expand its foothold in the lucrative insurance market.

Blackstone will purchase Allstate life Insurance through its controlled subsidiaries, the company said Wednesday. Allstate will retain some portions of the business, including its operations in New York. Allstate said that it is working to find a way to sell or transfer risk from its New York unit to a third party.

The divestment is part of Allstate's strategy to pivot away from the life insurance and annuities markets and to focus more on its property-casualty products.

In recent months, life insurers have experienced massive losses due to a surge in payouts stemming from the pandemic. For the first nine months of 2020, Allstate reported a net loss of $23 million.

According to the U.S. Society of Actuaries, around 8% of claims made from April to August last attributed the coronavirus as the cause of death. Industry experts said that the long-term health consequences of the pandemic are not yet fully understood, which means that it still poses a risk for insurers.

For Blackstone, the acquisition will help it expand its business with FGL Holdings, which was bought by Fidelity National Financial last year. The deal is the latest move made by private equity firms, which have recently been drawn to annuity businesses as safe assets for investment.

"We believe our team's extensive experience in the insurance sector and world-class asset origination capabilities will deliver significant benefits to policyholders and investors over the long term," Blackstone's global head of insurance solutions, Gilles Dallaert, said in a statement.

Allstate's chief executive officer, Tom Wilson, said in a separate statement that the deal should help the company deploy more capital to boost its market share in the property-liability segment.

Allstate said that it expects the deal to be closed within the second half of 2021. Morgan Stanley and Credit Suisse Securities acted as advisors for Blackstone, while JP Morgan Securities, Lazard, and Ardea Partners worked with Allstate on the deal.