(Reuters) - U.S. insurer Nationwide said on Thursday that it would acquire property and casualty insurer Allstate Corp's ( ALL ) employer stop-loss segment in a $1.25 billion deal, as it seeks to expand its stop-loss insurance offering.

The transaction is expected to close in the second half of 2025, Nationwide said in a statement.

Stop-loss insurance serves as a financial safeguard for companies against large medical expenses incurred by an employee in any given year.

Ohio-based Nationwide is a diversified insurance and financial services firm that provides a range of products, including auto, business, farm and life insurance, among others.

"Acquiring Allstate's ( ALL ) employer stop-loss segment will broaden Nationwide Financial's portfolio, meeting the needs of small businesses, allowing us to serve more customers," said Nationwide President John Carter.

Allstate Corporation ( ALL ) is an insurance firm that offers protection for autos, homes, electronic devices and identity theft.

The sale is expected to help Allstate ( ALL ) with a financial book gain of about $450 million and increase deployable capital by $900 million after the deal's completion, which is expected in 2025, the firm said.

J.P. Morgan and Ardea Partners are acting as financial advisers on the deal.