The Allstate Corporation 10Q 2024 Q2 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______ to ______

Commission file number 1-11840

THE ALLSTATE CORPORATION

(Exact name of registrant as specified in its charter)

Delaware

36-3871531

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

3100 Sanders Road, Northbrook, Illinois 60062

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (847) 402-2800

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbols	Name of each exchange on which registered
Common Stock, par value $.01 per share	ALL	New York Stock Exchange Chicago Stock Exchange
5.100% Fixed-to-Floating Rate Subordinated Debentures due 2053	ALL.PR.B	New York Stock Exchange

Depositary Shares represent 1/1,000th of a share of 5.100% Noncumulative Preferred Stock, Series H	ALL PR H	New York Stock Exchange
Depositary Shares represent 1/1,000th of a share of 4.750% Noncumulative Preferred Stock, Series I	ALL PR I	New York Stock Exchange
Depositary Shares represent 1/1,000th of a share of 7.375% Noncumulative Preferred Stock, Series J	ALL PR J	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐

Non-accelerated filer	☐	Smaller reporting company	☐

		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of July 12, 2024, the registrant had 264,040,589 common shares, $.01 par value, outstanding.

The Allstate Corporation

Index to Quarterly Report on Form 10-Q

June 30, 2024


Part I Financial Information		Page

Item 1. Financial Statements (unaudited) as of June 30, 2024 and December 31, 2023 and for the Three Month and Six Month Periods Ended June 30, 2024 and 2023

	Condensed Consolidated Statements of Operations	1
	Condensed Consolidated Statements of Comprehensive Income (Loss)	2
	Condensed Consolidated Statements of Financial Position	3
	Condensed Consolidated Statements of Shareholders’ Equity	4
	Condensed Consolidated Statements of Cash Flows	5
	Notes to Condensed Consolidated Financial Statements (unaudited)	6
	Report of Independent Registered Public Accounting Firm	44

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

	Highlights	45
	Property-Liability Operations	48
	Segment results
	Allstate Protection	50
	Run-off Property-Liability	59
	Protection Services	61
	Allstate Health and Benefits	63
	Investments	65
	Capital Resources and Liquidity	72

	Forward-Looking Statements	74

Item 4. Controls and Procedures		74

Part II Other Information
Item 1. Legal Proceedings		75
Item 1A. Risk Factors		75
Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities		75
Item 5. Other Information		75
Item 6. Exhibits		76

Condensed Consolidated Financial Statements

Part I. Financial Information

Item 1. Financial Statements

The Allstate Corporation and Subsidiaries

Condensed Consolidated Statements of Operations (unaudited)


(In millions, except per share data)	Three months ended June 30,				Six months ended June 30,
	2024		2023		2024		2023
Revenues
Property and casualty insurance premiums	$	13,952	$	12,470	$	27,464	$	24,643
Accident and health insurance premiums and contract charges	474		453		952		916
Other revenue	679		597		1,348		1,158
Net investment income	712		610		1,476		1,185
Net gains (losses) on investments and derivatives	(103)		(151)		(267)		(137)
Total revenues	15,714		13,979		30,973		27,765

Costs and expenses
Property and casualty insurance claims and claims expense	10,801		11,727		20,302		22,053

Accident, health and other policy benefits	291		258		587		523
Amortization of deferred policy acquisition costs	2,001		1,789		3,940		3,533
Operating costs and expenses	2,019		1,786		3,904		3,502
Pension and other postretirement remeasurement (gains) losses	(9)		(40)		(11)		(93)
Restructuring and related charges	13		27		23		54
Amortization of purchased intangibles	70		82		139		163

Interest expense	98		98		195		184
Total costs and expenses	15,284		15,727		29,079		29,919

Income (loss) from operations before income tax expense	430		(1,748)		1,894		(2,154)

Income tax expense (benefit)	83		(373)		349		(458)

Net income (loss)	347		(1,375)		1,545		(1,696)

Less: Net income (loss) attributable to noncontrolling interest	16		(23)		(4)		(24)

Net income (loss) attributable to Allstate	331		(1,352)		1,549		(1,672)

Less: Preferred stock dividends	30		37		59		63

Net income (loss) applicable to common shareholders	$	301	$	(1,389)	$	1,490	$	(1,735)

Earnings per common share:
Net income (loss) applicable to common shareholders per common share - Basic	$	1.14	$	(5.29)	$	5.65	$	(6.59)
Weighted average common shares - Basic	264.1		262.6		263.8		263.1
Net income (loss) applicable to common shareholders per common share - Diluted	$	1.13	$	(5.29)	$	5.58	$	(6.59)
Weighted average common shares - Diluted	267.1		262.6		266.8		263.1

See notes to condensed consolidated financial statements.

Second Quarter 2024 Form 10-Q 1

Condensed Consolidated Financial Statements

The Allstate Corporation and Subsidiaries

Condensed Consolidated Statements of Comprehensive Income (Loss) (unaudited)


($ in millions)	Three months ended June 30,				Six months ended June 30,
	2024		2023		2024		2023
Net income (loss)	$	347	$	(1,375)	$	1,545	$	(1,696)

Other comprehensive (loss) income, after-tax
Changes in:
Unrealized net capital gains and losses	(119)		(272)		(334)		410
Unrealized foreign currency translation adjustments	(23)		28		(15)		78
Unamortized pension and other postretirement prior service credit	—		(5)		(1)		(9)
Discount rate for reserve for future policy benefits	(1)		8		24		(1)
Other comprehensive (loss) income, after-tax	(143)		(241)		(326)		478

Comprehensive income (loss)	204		(1,616)		1,219		(1,218)
Less: Comprehensive income (loss) attributable to noncontrolling interest	16		(24)		(3)		(20)
Comprehensive income (loss) attributable to Allstate	$	188	$	(1,592)	$	1,222	$	(1,198)

See notes to condensed consolidated financial statements.

2 www.allstate.com

Condensed Consolidated Financial Statements

The Allstate Corporation and Subsidiaries

Condensed Consolidated Statements of Financial Position (unaudited)


($ in millions, except par value data)	June 30, 2024		December 31, 2023
Assets
Investments
Fixed income securities, at fair value (amortized cost, net $53,788 and $49,649)	$	52,576	$	48,865
Equity securities, at fair value (cost $2,003 and $2,244)	2,216		2,411
Mortgage loans, net	815		822
Limited partnership interests	8,730		8,380
Short-term, at fair value (amortized cost $5,290 and $5,145)	5,288		5,144
Other investments, net	979		1,055
Total investments	70,604		66,677
Cash	599		722
Premium installment receivables, net	10,762		10,044
Deferred policy acquisition costs	6,112		5,940
Reinsurance and indemnification recoverables, net	8,730		8,809
Accrued investment income	609		539
Deferred income taxes	212		219
Property and equipment, net	777		859
Goodwill	3,502		3,502
Other assets, net	6,461		6,051
Total assets	108,368		103,362
Liabilities
Reserve for property and casualty insurance claims and claims expense	41,553		39,858
Reserve for future policy benefits	1,344		1,347
Contractholder funds	891		888
Unearned premiums	25,929		24,709
Claim payments outstanding	1,575		1,353

Other liabilities and accrued expenses	10,421		9,635
Debt	8,082		7,942
Total liabilities	89,795		85,732
Commitments and Contingent Liabilities (Note 14)
Equity
Preferred stock and additional capital paid-in, $1 par value, 25 million shares authorized, 82.0 thousand shares issued and outstanding, $2,050 aggregate liquidation preference	2,001		2,001
Common stock, $.01 par value, 2.0 billion shares authorized and 900 million issued, 264 million and 262 million shares outstanding	9		9
Additional capital paid-in	3,927		3,854
Retained income	50,718		49,716
Treasury stock, at cost (636 million and 638 million shares)	(37,036)		(37,110)
Accumulated other comprehensive income (loss):
Unrealized net capital gains and losses	(938)		(604)
Unrealized foreign currency translation adjustments	(113)		(98)
Unamortized pension and other postretirement prior service credit	12		13
Discount rate for reserve for future policy benefits	13		(11)
Total accumulated other comprehensive loss	(1,026)		(700)
Total Allstate shareholders’ equity	18,593		17,770
Noncontrolling interest	(20)		(140)
Total equity	18,573		17,630
Total liabilities and equity	$	108,368	$	103,362

See notes to condensed consolidated financial statements.

Second Quarter 2024 Form 10-Q 3

Condensed Consolidated Financial Statements

The Allstate Corporation and Subsidiaries

Condensed Consolidated Statements of Shareholders’ Equity (unaudited)


($ in millions, except per share data)	Three months ended June 30,				Six months ended June 30,
	2024		2023		2024		2023




Preferred stock par value	$	—	$	—	$	—	$	—
Preferred stock additional capital paid-in
Balance, beginning of period	2,001		1,970		2,001		1,970

Preferred stock issuance, net of issuance costs	—		587		—		587
Preferred stock redemption	—		(556)		—		(556)
Balance, end of period	2,001		2,001		2,001		2,001

Common stock par value	9		9		9		9
Common stock additional capital paid-in
Balance, beginning of period	3,894		3,780		3,854		3,788

Equity incentive plans activity, net	33		6		73		(2)
Balance, end of period	3,927		3,786		3,927		3,786

Retained income
Balance, beginning of period	50,662		50,388		49,716		50,970

Net income (loss)	331		(1,352)		1,549		(1,672)
Dividends on common stock (declared per share of $0.92, $0.89, $1.84, and $1.78 )	(245)		(233)		(488)		(469)
Dividends on preferred stock	(30)		(37)		(59)		(63)
Balance, end of period	50,718		48,766		50,718		48,766






Treasury stock
Balance, beginning of period	(37,044)		(36,980)		(37,110)		(36,857)
Shares acquired	—		(154)		—		(307)
Shares reissued under equity incentive plans, net	8		3		74		33
Balance, end of period	(37,036)		(37,131)		(37,036)		(37,131)

Accumulated other comprehensive income (loss)
Balance, beginning of period	(883)		(1,673)		(700)		(2,392)
Change in unrealized net capital gains and losses	(119)		(272)		(334)		410
Change in unrealized foreign currency translation adjustments	(23)		28		(15)		78
Change in unamortized pension and other postretirement prior service credit	—		(5)		(1)		(9)
Change in discount rate for reserve for future policy benefits	(1)		8		24		(1)
Balance, end of period	(1,026)		(1,914)		(1,026)		(1,914)
Total Allstate shareholders’ equity	18,593		15,517		18,593		15,517

Noncontrolling interest
Balance, beginning of period	(159)		(121)		(140)		(125)

Change in unrealized net capital gains and losses	—		(1)		1		4
Noncontrolling income (loss)	16		(23)		(4)		(24)
Capital transaction for noncontrolling interest	123		—		123		—
Balance, end of period	(20)		(145)		(20)		(145)
Total equity	$	18,573	$	15,372	$	18,573	$	15,372

See notes to condensed consolidated financial statements.

4 www.allstate.com

Condensed Consolidated Financial Statements

The Allstate Corporation and Subsidiaries

Condensed Consolidated Statements of Cash Flows (unaudited)


($ in millions)	Six months ended June 30,
	2024		2023
Cash flows from operating activities
Net income (loss)	$	1,545	$	(1,696)

Adjustments to reconcile net income (loss) to net cash provided by operating activities
Depreciation, amortization and other non-cash items	264		363
Net (gains) losses on investments and derivatives	267		137

Pension and other postretirement remeasurement (gains) losses	(11)		(93)

Changes in:
Policy benefits and other insurance reserves	1,750		2,917
Unearned premiums	1,262		1,032
Deferred policy acquisition costs	(175)		(162)
Premium installment receivables, net	(745)		(532)
Reinsurance recoverables, net	76		468
Income taxes	91		(538)
Other operating assets and liabilities	(299)		(126)
Net cash provided by operating activities	4,025		1,770
Cash flows from investing activities
Proceeds from sales
Fixed income securities	15,463		12,454
Equity securities	1,510		4,183
Limited partnership interests	248		516

Other investments	120		81
Investment collections
Fixed income securities	1,002		992
Mortgage loans	10		36
Other investments	19		53
Investment purchases
Fixed income securities	(20,376)		(15,875)
Equity securities	(1,257)		(1,717)
Limited partnership interests	(560)		(424)
Mortgage loans	(1)		(100)
Other investments	(59)		(140)
Change in short-term and other investments, net	64		(986)
Purchases of property and equipment, net	(97)		(141)
Proceeds from sale of property and equipment	18		19


Net cash used in investing activities	(3,896)		(1,049)
Cash flows from financing activities
Proceeds from issuance of debt	495		743
Redemption and repayment of debt	(350)		(750)
Proceeds from issuance of preferred stock	—		587
Redemption of preferred stock	—		(575)
Contractholder fund deposits	67		66
Contractholder fund withdrawals	(16)		(16)
Dividends paid on common stock	(476)		(459)
Dividends paid on preferred stock	(59)		(53)
Treasury stock purchases	—		(307)
Shares reissued under equity incentive plans, net	93		10

Other	(6)		(4)
Net cash used in financing activities	(252)		(758)
Net decrease in cash	(123)		(37)
Cash at beginning of period	722		736
Cash at end of period	$	599	$	699

See notes to condensed consolidated financial statements.

Second Quarter 2024 Form 10-Q 5

Notes to Condensed Consolidated Financial Statements

The Allstate Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(Unaudited)


Note 1			General

Basis of presentation

The accompanying condensed consolidated financial statements include the accounts of The Allstate Corporation (the “Corporation”) and its wholly owned subsidiaries, primarily Allstate Insurance Company (“AIC”), a property and casualty insurance company (collectively referred to as the “Company” or “Allstate”) and variable interest entities (“VIEs”) in which the Company is considered a primary beneficiary. These condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”).

The condensed consolidated financial statements and notes as of June 30, 2024 and for the three and six month periods ended June 30, 2024 and 2023 are unaudited. The condensed consolidated financial statements reflect all adjustments (consisting only of normal recurring accruals) which are, in the opinion of management, necessary for the fair presentation of the financial position, results of operations and cash flows for the interim periods. Certain amounts have been reclassified to conform to current year presentation.

These condensed consolidated financial statements and notes should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2023. The results of operations for the interim periods should not be considered indicative of results to be expected for the full year. All significant intercompany accounts and transactions have been eliminated.

Pending accounting standards

Accounting for joint ventures In August 2023, the Financial Accounting Standards Board (“FASB”) issued guidance requiring a joint venture to initially measure assets contributed and liabilities assumed at fair value as of the formation date. The new guidance will be applied prospectively for joint ventures with a formation date on or after January 1, 2025. The impact of the adoption is not expected to be material to the Company’s results of operations or financial position.

Segment reporting In November 2023, the FASB issued guidance expanding segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items, and interim disclosures of reportable segments’ profit or loss and assets. The guidance is effective for annual periods beginning after December 15, 2023 and interim periods beginning after December 15, 2024 and is to be applied retrospectively, with early adoption permitted. The Company is currently evaluating the impact of adopting the guidance to its disclosures.

Income tax disclosures In December 2023, the FASB issued guidance enhancing various aspects of income tax disclosures. The guidance requires a tabular reconciliation between statutory and effective income tax expense (benefit) with both amounts and percentages for a list of required categories. For certain required categories where an individual category is at least five percent of the statutory tax amount, the required category must be further broken out by nature and, for foreign tax effects, jurisdiction. Additionally, entities must disclose income taxes paid, net of refunds received, broken out between federal, state and foreign, and amounts paid, net of refunds received, to an individual jurisdiction when five percent or more of the total income taxes paid, net of refunds received.

All requirements in the guidance are annual in nature, and the guidance is effective for annual reporting periods beginning after December 15, 2024, with early adoption permitted. The guidance only affects disclosures and will have no impact on the Company’s consolidated financial statements. The Company is currently evaluating the impact of adopting the guidance to its disclosures.

Climate disclosures In March 2024, the Securities and Exchange Commission (“SEC”) adopted a final rule requiring registrants to disclose certain climate-related information in their registration statements and annual reports. The rule requires the disclosure of qualitative and quantitative information, with certain information, such as financial statement effects of severe weather events, included in the notes to the audited financial statements. Other disclosure requirements include material climate-related risks, processes to manage and govern those risks, disclosure of targets if the targets materially affect or are reasonably likely to materially affect the Company, and, if material, disclosure of certain greenhouse gas emissions. On April 4, 2024, the SEC issued a voluntary stay of the final rule, pending the outcome of pending litigation.

The requirements will be applied prospectively and have phased-in effective dates. For the Company, the Form 10-K for the year ended December 31, 2025, will be the first annual report with new climate-related disclosures. The Company is currently evaluating the impact of adopting the final rule.

6 www.allstate.com

Notes to Condensed Consolidated Financial Statements


Note 2			Earnings per Common Share

Basic earnings per common share is computed using the weighted average number of common shares outstanding, including vested unissued participating restricted stock units. Diluted earnings per common share is computed using the weighted average number of common and dilutive potential common shares outstanding.

For the Company, dilutive potential common shares consist of outstanding stock options, unvested

non-participating restricted stock units and contingently issuable performance stock awards. The effect of dilutive potential common shares does not include the effect of options with an anti-dilutive effect on earnings per common share because their exercise prices exceed the average market price of Allstate common shares during the period or for which the unrecognized compensation cost would have an anti-dilutive effect.


Computation of basic and diluted earnings per common share
(In millions, except per share data)	Three months ended June 30,				Six months ended June 30,
	2024		2023		2024		2023
Numerator:
Net income (loss)	$	347	$	(1,375)	$	1,545	$	(1,696)
Less: Net income (loss) attributable to noncontrolling interest	16		(23)		(4)		(24)
Net income (loss) attributable to Allstate	331		(1,352)		1,549		(1,672)
Less: Preferred stock dividends	30		37		59		63


Net income (loss) applicable to common shareholders	$	301	$	(1,389)	$	1,490	$	(1,735)

Denominator:
Weighted average common shares outstanding	264.1		262.6		263.8		263.1
Effect of dilutive potential common shares (1):
Stock options	2.5		—		2.5		—
Restricted stock units (non-participating) and performance stock awards	0.5		—		0.5		—
Weighted average common and dilutive potential common shares outstanding	267.1		262.6		266.8		263.1

Earnings per common share - Basic	$	1.14	$	(5.29)	$	5.65	$	(6.59)
Earnings per common share - Diluted (1)	$	1.13	$	(5.29)	$	5.58	$	(6.59)

Anti-dilutive options excluded from diluted earnings per common share	0.6		3.2		0.5		2.9
Weighted average dilutive potential common shares excluded due to net loss applicable to common shareholders (1)	—		1.7		—		2.1

(1)As a result of the net loss reported for the three and six month periods ended June 30, 2023, weighted average shares for basic earnings per share is also used for calculating diluted earnings per share because all dilutive potential common shares are anti-dilutive and are therefore excluded from the calculation.


Note 3			Reportable Segments

Measuring segment profit or loss

The measure of segment profit or loss used in evaluating performance is underwriting income for the Allstate Protection and Run-off Property-Liability segments and adjusted net income for the Protection Services, Allstate Health and Benefits and Corporate and Other segments.

Allstate Protection and Run-off Property Liability segments comprise Property-Liability. The Company does not allocate investment income, net gains and losses on investments and derivatives, or assets to the Allstate Protection and Run-off Property Liability segments. Management reviews assets at the Property-Liability, Protection Services, Allstate Health and Benefits, and Corporate and Other levels for decision-making purposes.

Underwriting income is calculated as premiums earned and other revenue, less claims and claims expenses (“losses”), amortization of deferred policy

acquisition costs (“DAC”), operating costs and expenses, amortization or impairment of purchased intangibles and restructuring and related charges as determined using GAAP.

Adjusted net income is net income (loss) applicable to common shareholders, excluding:


•			Net gains and losses on investments and derivatives
•			Pension and other postretirement remeasurement gains and losses
•			Amortization or impairment of purchased intangibles
•			Gain or loss on disposition
•			Adjustments for other significant non-recurring, infrequent or unusual items, when (a) the nature of the charge or gain is such that it is reasonably unlikely to recur within two years, or (b) there has been no similar charge or gain within the prior two years
•			Income tax expense or benefit on reconciling items

Second Quarter 2024 Form 10-Q 7

Notes to Condensed Consolidated Financial Statements

A reconciliation of these measures to net income (loss) applicable to common shareholders is provided below.


Reportable segments financial performance
	Three months ended June 30,				Six months ended June 30,
($ in millions)	2024		2023		2024		2023
Underwriting income (loss) by segment
Allstate Protection	$	(142)	$	(2,092)	$	761	$	(3,090)
Run-off Property-Liability	(3)		(2)		(8)		(5)
Total Property-Liability	(145)		(2,094)		753		(3,095)

Adjusted net income (loss) by segment, after-tax
Protection Services	55		41		109		75
Allstate Health and Benefits	58		57		114		113
Corporate and Other	(104)		(111)		(210)		(200)

Reconciling items
Allstate Protection and Run-off Property-Liability net investment income	643		544		1,345		1,053
Net gains (losses) on investments and derivatives	(103)		(151)		(267)		(137)
Pension and other postretirement remeasurement gains (losses)	9		40		11		93

Amortization of purchased intangibles (1)	(19)		(24)		(37)		(48)

Gain (loss) on disposition	1		(8)		5		1
Non-recurring costs (2)	—		(90)		—		(90)
Income tax (expense) benefit on Property-Liability and reconciling items (3)	(78)		384		(337)		476
Total reconciling items	453		695		720		1,348

Less: Net income (loss) attributable to noncontrolling interest (4)	16		(23)		(4)		(24)

Net income (loss) applicable to common shareholders	$	301	$	(1,389)	$	1,490	$	(1,735)

(1)Excludes amortization of purchased intangibles in Property-Liability, which is already included above in underwriting income.

(2)Relates to settlement costs for non-recurring litigation that is outside of the ordinary course of business.

(3)The tax computation of the reporting segments and income tax benefit (expense) on reconciling items to net income (loss) are computed discretely based on the tax law of the jurisdictions applicable to the reporting entities.

(4)Reflects net income (loss) attributable to noncontrolling interest in Property-Liability.

8 www.allstate.com

Notes to Condensed Consolidated Financial Statements


Reportable segments revenue information
($ in millions)	Three months ended June 30,				Six months ended June 30,
	2024		2023		2024		2023
Property-Liability
Insurance premiums
Auto	$	9,079	$	8,121	$	17,857	$	16,029
Homeowners	3,255		2,883		6,409		5,693
Other personal lines	701		587		1,360		1,149
Commercial lines	158		202		327		434
Other business lines	146		128		286		251
Allstate Protection	13,339		11,921		26,239		23,556
Run-off Property-Liability	—		—		—		—
Total Property-Liability insurance premiums	13,339		11,921		26,239		23,556
Other revenue	441		389		871		742
Net investment income	643		544		1,345		1,053
Net gains (losses) on investments and derivatives	(103)		(135)		(265)		(123)
Total Property-Liability	14,320		12,719		28,190		25,228

Protection Services
Protection plans	453		373		892		734
Roadside assistance	34		48		81		97
Protection and insurance products	126		128		252		256
Intersegment premiums and service fees (1)	39		35		74		68
Other revenue	98		84		183		168
Net investment income	23		18		44		34
Net gains (losses) on investments and derivatives	(1)		(4)		(6)		(5)
Total Protection Services	772		682		1,520		1,352

Allstate Health and Benefits
Employer voluntary benefits	246		245		494		500
Group health	120		110		238		217
Individual health	108		98		220		199
Other revenue	121		101		255		202
Net investment income	25		21		48		40
Net gains (losses) on investments and derivatives	—		1		2		3
Total Allstate Health and Benefits	620		576		1,257		1,161

Corporate and Other
Other revenue	19		23		39		46
Net investment income	21		27		39		58
Net gains (losses) on investments and derivatives	1		(13)		2		(12)
Total Corporate and Other	41		37		80		92

Intersegment eliminations (1)	(39)		(35)		(74)		(68)
Consolidated revenues	$	15,714	$	13,979	$	30,973	$	27,765

(1)Intersegment insurance premiums and service fees are primarily related to Arity and Allstate Roadside and are eliminated in the condensed consolidated financial statements.

Second Quarter 2024 Form 10-Q 9

Notes to Condensed Consolidated Financial Statements


Note 4			Investments


Portfolio composition
($ in millions)	June 30, 2024		December 31, 2023
Fixed income securities, at fair value	$	52,576	$	48,865
Equity securities, at fair value	2,216		2,411
Mortgage loans, net	815		822
Limited partnership interests	8,730		8,380
Short-term investments, at fair value	5,288		5,144
Other investments, net	979		1,055
Total	$	70,604	$	66,677


Amortized cost, gross unrealized gains (losses) and fair value for fixed income securities
($ in millions)	Amortized cost, net		Gross unrealized				Fair value
			Gains		Losses
June 30, 2024
U.S. government and agencies	$	10,724	$	34	$	(194)	$	10,564
Municipal	6,661		46		(169)		6,538
Corporate	33,443		191		(1,120)		32,514
Foreign government	1,299		5		(15)		1,289
ABS	1,661		16		(6)		1,671
Total fixed income securities	$	53,788	$	292	$	(1,504)	$	52,576

December 31, 2023
U.S. government and agencies	$	8,624	$	114	$	(119)	$	8,619
Municipal	6,049		109		(152)		6,006
Corporate	31,951		397		(1,143)		31,205
Foreign government	1,286		17		(13)		1,290
ABS	1,739		13		(7)		1,745
Total fixed income securities	$	49,649	$	650	$	(1,434)	$	48,865


Scheduled maturities for fixed income securities
($ in millions)	June 30, 2024				December 31, 2023
	Amortized cost, net		Fair value		Amortized cost, net		Fair value
Due in one year or less	$	2,692	$	2,655	$	3,422	$	3,374
Due after one year through five years	23,799		23,172		23,218		22,614
Due after five years through ten years	16,675		16,305		12,553		12,273
Due after ten years	8,961		8,773		8,717		8,859
	52,127		50,905		47,910		47,120
ABS	1,661		1,671		1,739		1,745
Total	$	53,788	$	52,576	$	49,649	$	48,865

Actual maturities may differ from those scheduled as a result of calls and make-whole payments by the issuers. ABS is shown separately because of potential prepayment of principal prior to contractual maturity dates.


Net investment income
($ in millions)	Three months ended June 30,				Six months ended June 30,
	2024		2023		2024		2023
Fixed income securities	$	571	$	422	$	1,097	$	812
Equity securities	18		21		33		32
Mortgage loans	9		8		18		16
Limited partnership interests	103		122		302		256
Short-term investments	62		69		129		135
Other investments	25		39		46		80
Investment income, before expense	788		681		1,625		1,331
Investment expense	(76)		(71)		(149)		(146)
Net investment income	$	712	$	610	$	1,476	$	1,185

10 www.allstate.com

Notes to Condensed Consolidated Financial Statements


Net gains (losses) on investments and derivatives by asset type
($ in millions)	Three months ended June 30,				Six months ended June 30,
	2024		2023		2024		2023
Fixed income securities	$	(96)	$	(132)	$	(197)	$	(268)
Equity securities	14		21		76		188
Mortgage loans	1		(3)		1		(3)
Limited partnership interests	(13)		(15)		(5)		7
Derivatives	(15)		(7)		(23)		(59)
Other investments	6		(15)		4		(2)
Other (1)	—		—		(123)		—
Net gains (losses) on investments and derivatives	$	(103)	$	(151)	$	(267)	$	(137)

(1)Related to the loss for the carrying value of the surplus notes issued by Adirondack Insurance Exchange and New Jersey Skylands Insurance Association (together “Reciprocal Exchanges”). See Note 7 for further detail.


Net gains (losses) on investments and derivatives by transaction type
($ in millions)	Three months ended June 30,				Six months ended June 30,
	2024		2023		2024		2023
Sales	$	(90)	$	(130)	$	(201)	$	(250)
Credit losses	(16)		(37)		(131)		(49)
Valuation change of equity investments (1)	18		23		88		221
Valuation change and settlements of derivatives	(15)		(7)		(23)		(59)
Net gains (losses) on investments and derivatives	$	(103)	$	(151)	$	(267)	$	(137)

(1)Includes valuation change of equity securities and certain limited partnership interests where the underlying assets are predominately public equity securities.


Gross realized gains (losses) on sales of fixed income securities
($ in millions)	Three months ended June 30,				Six months ended June 30,
	2024		2023		2024		2023
Gross realized gains	$	33	$	28	$	74	$	74
Gross realized losses	(124)		(153)		(270)		(326)


Net appreciation (decline) recognized in net income for assets that are still held
($ in millions)	Three months ended June 30,				Six months ended June 30,
	2024		2023		2024		2023
Equity securities	$	18	$	19	$	78	$	66
Limited partnership interests carried at fair value	17		32		47		48
Total	$	35	$	51	$	125	$	114

Second Quarter 2024 Form 10-Q 11

Notes to Condensed Consolidated Financial Statements


Credit losses recognized in net income
($ in millions)	Three months ended June 30,				Six months ended June 30,
	2024		2023		2024		2023
Assets
Fixed income securities:

Corporate	$	(5)	$	(7)	$	(1)	$	(16)

Total fixed income securities	(5)		(7)		(1)		(16)
Mortgage loans	1		(3)		1		(3)
Limited partnership interests	(16)		(16)		(16)		(16)
Other investments
Bank loans	2		(11)		5		(14)
Real estate	2		—		2		—
Other assets	—		—		(123)		—
Total credit losses by asset type	$	(16)	$	(37)	$	(132)	$	(49)

Liabilities
Commitments to fund commercial mortgage loans and bank loans	—		—		1		—
Total	$	(16)	$	(37)	$	(131)	$	(49)


Unrealized net capital gains and losses included in accumulated other comprehensive income (“AOCI”)
($ in millions)	Fair value		Gross unrealized				Unrealized net gains (losses)
June 30, 2024			Gains		Losses
Fixed income securities	$	52,576	$	292	$	(1,504)	$	(1,212)
Short-term investments	5,288		—		(2)		(2)
Derivative instruments	—		—		(2)		(2)
Limited partnership interests							—
Unrealized net capital gains and losses, pre-tax							(1,216)
Reclassification of noncontrolling interest							12
Deferred income taxes							266
Unrealized net capital gains and losses, after-tax							$	(938)

December 31, 2023
Fixed income securities	$	48,865	$	650	$	(1,434)	$	(784)
Short-term investments	5,144		—		(1)		(1)
Derivative instruments	—		—		(2)		(2)
Limited partnership interests (1)							(4)
Unrealized net capital gains and losses, pre-tax							(791)
Reclassification of noncontrolling interest							13
Deferred income taxes							174
Unrealized net capital gains and losses, after-tax							$	(604)

(1)Unrealized net capital gains and losses for limited partnership interests represent the Company’s share of the equity method of accounting (“EMA”) limited partnerships’ OCI. Fair value and gross unrealized gains and losses are not applicable.


Change in unrealized net capital gains (losses)
($ in millions)	Six months ended June 30, 2024
Fixed income securities	$	(428)
Short-term investments	(1)
Derivative instruments	—
Limited partnership interests	4
Total	(425)
Reclassification of noncontrolling interest	(1)
Deferred income taxes	92
Change in unrealized net capital gains and losses, after-tax	$	(334)

12 www.allstate.com

Notes to Condensed Consolidated Financial Statements


Carrying value for limited partnership interests
($ in millions)	June 30, 2024		December 31, 2023
Private equity	$	7,426	$	7,154
Real estate	1,142		1,085
Other (1)	162		141
Total	$	8,730	$	8,380

(1)Other consists of certain limited partnership interests where the underlying assets are predominately public equity and debt securities.

Short-term investments Short-term investments, including money market funds, commercial paper, U.S. Treasury bills and other short-term investments, are carried at fair value. As of June 30, 2024 and December 31, 2023, the fair value of short-term investments totaled $5.29 billion and $5.14 billion, respectively.

Other investments Other investments primarily consist of bank loans, real estate, policy loans and derivatives. Bank loans are primarily senior secured corporate loans and are carried at amortized cost, net. Real estate is carried at cost less accumulated depreciation. Policy loans are carried at unpaid principal balances.


Other investments by asset type
($ in millions)	June 30, 2024		December 31, 2023
Bank loans, net	$	149	$	224
Real estate	708		709
Policy loans	120		119
Other	2		3
Total	$	979	$	1,055

Portfolio monitoring and credit losses

Fixed income securities The Company has a comprehensive portfolio monitoring process to identify and evaluate each fixed income security that may require a credit loss allowance.

For each fixed income security in an unrealized loss position, the Company assesses whether management with the appropriate authority has made the decision to sell or whether it is more likely than not the Company will be required to sell the security before recovery of the amortized cost basis for reasons such as liquidity, contractual or regulatory purposes. If a security meets either of these criteria, any existing credit loss allowance would be written-off against the amortized cost basis of the asset along with any remaining unrealized losses, with incremental losses recorded in earnings.

If the Company has not made the decision to sell the fixed income security and it is not more likely than not the Company will be required to sell the fixed income security before recovery of its amortized cost basis, the Company evaluates whether it expects to receive cash flows sufficient to recover the entire amortized cost basis of the security. The Company calculates the estimated recovery value based on the best estimate of future cash flows considering past events, current conditions and reasonable and supportable forecasts. The estimated future cash flows are discounted at the security’s current effective rate and is compared to the amortized cost of the security.

The determination of cash flow estimates is inherently subjective, and methodologies may vary depending on facts and circumstances specific to the security. All reasonably available information relevant to the collectability of the security is considered when developing the estimate of cash flows expected to be collected. That information generally includes, but is

not limited to, the remaining payment terms of the security, prepayment speeds, the financial condition and future earnings potential of the issue or issuer, expected defaults, expected recoveries, the value of underlying collateral, origination vintage year, geographic concentration of underlying collateral, available reserves or escrows, current subordination levels, third-party guarantees and other credit enhancements. Other information, such as industry analyst reports and forecasts, credit ratings, financial condition of the bond insurer for insured fixed income securities, and other market data relevant to the realizability of contractual cash flows, may also be considered. The estimated fair value of collateral will be used to estimate recovery value if the Company determines that the security is dependent on the liquidation of collateral for ultimate settlement.

If the Company does not expect to receive cash flows sufficient to recover the entire amortized cost basis of the fixed income security, a credit loss allowance is recorded in earnings for the shortfall in expected cash flows; however, the amortized cost, net of the credit loss allowance, may not be lower than the fair value of the security. The portion of the unrealized loss related to factors other than credit remains classified in AOCI. If the Company determines that the fixed income security does not have sufficient cash flow or other information to estimate a recovery value for the security, the Company may conclude that the entire decline in fair value is deemed to be credit related and the loss is recorded in earnings.

When a security is sold or otherwise disposed or when the security is deemed uncollectible and written off, the Company removes amounts previously recognized in the credit loss allowance. Recoveries after write-offs are recognized when received. Accrued interest excluded from the amortized cost of fixed income securities totaled $570 million and $495 million

Second Quarter 2024 Form 10-Q 13

Notes to Condensed Consolidated Financial Statements

as of June 30, 2024 and December 31, 2023, respectively, and is reported within the accrued investment income line of the Condensed Consolidated Statements of Financial Position. The Company monitors accrued interest and writes off amounts when they are not expected to be received.

The Company’s portfolio monitoring process includes a quarterly review of all securities to identify instances where the fair value of a security compared to its amortized cost is below internally established thresholds. The process also includes the monitoring of other credit loss indicators such as ratings, ratings downgrades and payment defaults. The securities identified, in addition to other securities for which the Company may have a concern, are evaluated for potential credit losses using all reasonably available

information relevant to the collectability or recovery of the security. Inherent in the Company’s evaluation of credit losses for these securities are assumptions and estimates about the financial condition and future earnings potential of the issue or issuer. Some of the factors that may be considered in evaluating whether a decline in fair value requires a credit loss allowance are: 1) the financial condition, near-term and long-term prospects of the issue or issuer, including relevant industry specific market conditions and trends, geographic location and implications of rating agency actions and offering prices; 2) the specific reasons that a security is in an unrealized loss position, including overall market conditions which could affect liquidity; and 3) the extent to which the fair value has been less than amortized cost.


Rollforward of credit loss allowance for fixed income securities
	Three months ended June 30,				Six months ended June 30,
($ in millions)	2024		2023		2024		2023
Beginning balance	$	(17)	$	(22)	$	(36)	$	(13)
Credit losses on securities for which credit losses not previously reported	(4)		(4)		(7)		(4)
Net (increases) decreases related to credit losses previously reported	(1)		(3)		3		(12)
(Increase) decrease of allowance related to sales and other	—		—		3		—
Write-offs	3		—		18		—
Ending balance	$	(19)	$	(29)	$	(19)	$	(29)

Components of credit loss allowance as of June 30
Corporate bonds					$	(18)	$	(27)
ABS					(1)		(2)
Total					$	(19)	$	(29)

14 www.allstate.com

Notes to Condensed Consolidated Financial Statements


Gross unrealized losses and fair value by type and length of time held in a continuous unrealized loss position (1)
($ in millions)	Less than 12 months					12 months or more					Total unrealized losses
	Number of issues	Fair value		Unrealized losses		Number of issues	Fair value		Unrealized losses
June 30, 2024
Fixed income securities
U.S. government and agencies	106	$	3,935	$	(64)	135	$	3,297	$	(130)	$	(194)
Municipal	629	2,063		(19)		1,525	2,060		(150)		(169)
Corporate	712	7,939		(119)		1,883	14,087		(1,001)		(1,120)
Foreign government	36	257		(2)		76	286		(13)		(15)
ABS	72	345		(2)		98	92		(4)		(6)
Total fixed income securities	1,555	$	14,539	$	(206)	3,717	$	19,822	$	(1,298)	$	(1,504)
Investment grade fixed income securities	1,462	$	14,107	$	(196)	3,404	$	17,754	$	(1,148)	$	(1,344)
Below investment grade fixed income securities	93	432		(10)		313	2,068		(150)		(160)
Total fixed income securities	1,555	$	14,539	$	(206)	3,717	$	19,822	$	(1,298)	$	(1,504)

December 31, 2023
Fixed income securities
U.S. government and agencies	63	$	2,554	$	(38)	117	$	2,513	$	(81)	$	(119)
Municipal	271	400		(4)		1,784	2,245		(148)		(152)
Corporate	251	2,225		(48)		2,106	17,319		(1,095)		(1,143)
Foreign government	7	31		—		75	356		(13)		(13)
ABS	19	64		(1)		150	584		(6)		(7)
Total fixed income securities	611	$	5,274	$	(91)	4,232	$	23,017	$	(1,343)	$	(1,434)
Investment grade fixed income securities	568	$	5,061	$	(83)	3,864	$	20,429	$	(1,151)	$	(1,234)
Below investment grade fixed income securities	43	213		(8)		368	2,588		(192)		(200)
Total fixed income securities	611	$	5,274	$	(91)	4,232	$	23,017	$	(1,343)	$	(1,434)

(1)Includes fixed income securities with fair values of $24 million and $32 million and unrealized losses of $6 million and $3 million with credit loss allowances of $4 million and $8 million as of June 30, 2024 and December 31, 2023, respectively.


Gross unrealized losses by unrealized loss position and credit quality as of June 30, 2024
($ in millions)	Investment grade		Below investment grade		Total
Fixed income securities with unrealized loss position less than 20% of amortized cost, net (1)	$	(1,266)	$	(134)	$	(1,400)
Fixed income securities with unrealized loss position greater than or equal to 20% of amortized cost, net (2)	(78)		(26)		(104)
Total unrealized losses	$	(1,344)	$	(160)	$	(1,504)

(1)Related to securities with an unrealized loss position less than 20% of amortized cost, net, the degree of which suggests that these securities do not pose a high risk of having credit losses.

(2)Evaluated based on factors such as discounted cash flows and the financial condition and near-term and long-term prospects of the issue or issuer and were determined to have adequate resources to fulfill contractual obligations.

Investment grade is defined as a security having a National Association of Insurance Commissioners (“NAIC”) designation of 1 or 2, which is comparable to a rating of Aaa, Aa, A or Baa from Moody’s or AAA, AA, A or BBB from S&P Global Ratings (“S&P”), or a comparable internal rating if an externally provided rating is not available. Market prices for certain securities may have credit spreads which imply higher or lower credit quality than the current third-party rating. Unrealized losses on investment grade securities are principally related to an increase in market yields which may include increased risk-free interest rates or wider credit spreads since the time of initial purchase. The unrealized losses are expected to reverse as the securities approach maturity.

ABS in an unrealized loss position were evaluated based on actual and projected collateral losses relative to the securities’ positions in the respective securitization trusts, security specific expectations of cash flows, and credit ratings. This evaluation also takes into consideration credit enhancement, measured in terms of (i) subordination from other classes of securities in the trust that are contractually obligated to absorb losses before the class of security the Company owns, and (ii) the expected impact of other structural features embedded in the securitization trust beneficial to the class of securities the Company owns, such as overcollateralization and excess spread. Municipal bonds in an unrealized loss position were evaluated based on the underlying credit

Second Quarter 2024 Form 10-Q 15

Notes to Condensed Consolidated Financial Statements

quality of the primary obligor, obligation type and quality of the underlying assets.

As of June 30, 2024, the Company has not made the decision to sell and it is not more likely than not the Company will be required to sell fixed income securities with unrealized losses before recovery of the amortized cost basis.

Loans The Company establishes a credit loss allowance for mortgage loans and bank loans when they are originated or purchased, and for unfunded commitments unless they are unconditionally cancellable by the Company. The Company uses a probability of default and loss given default model for mortgage loans and bank loans to estimate current expected credit losses that considers all relevant information available including past events, current conditions, and reasonable and supportable forecasts over the life of an asset. The Company also considers such factors as historical losses, expected prepayments and various economic factors. For mortgage loans, the Company considers origination vintage year and property level information such as debt service coverage, property type, property location and collateral value. For bank loans, the Company considers the credit rating of the borrower, credit spreads and type of loan. After the reasonable and supportable forecast period, the Company’s model reverts to historical loss trends.

Loans are evaluated on a pooled basis when they share similar risk characteristics. The Company monitors loans through a quarterly credit monitoring process to determine when they no longer share similar risk characteristics and are to be evaluated individually when estimating credit losses.

Loans are written off against their corresponding allowances when there is no reasonable expectation of recovery. If a loan recovers after a write-off, the estimate of expected credit losses includes the expected recovery.

Accrual of income is suspended for loans that are in default or when full and timely collection of principal

and interest payments is not probable. Accrued income receivable is monitored for recoverability and when not expected to be collected is written off through net investment income. Cash receipts on loans on non-accrual status are generally recorded as a reduction of amortized cost.

Accrued interest is excluded from the amortized cost of loans and is reported within the accrued investment income line of the Condensed Consolidated Statements of Financial Position. Accrued interest as of June 30, 2024 and December 31, 2023 was not significant for bank loans or mortgage loans.

Mortgage loans When it is determined a mortgage loan shall be evaluated individually, the Company uses various methods to estimate credit losses on individual loans such as using collateral value less estimated costs to sell where applicable, including when foreclosure is probable or when repayment is expected to be provided substantially through the operation or sale of the collateral and the borrower is experiencing financial difficulty. When collateral value is used, the mortgage loans may not have a credit loss allowance when the fair value of the collateral exceeds the loan’s amortized cost. An alternative approach may be utilized to estimate credit losses using the present value of the loan’s expected future repayment cash flows discounted at the loan’s current effective interest rate. Individual loan credit loss allowances are adjusted for subsequent changes in the fair value of the collateral less costs to sell, when applicable, or present value of the loan’s expected future repayment cash flows.

Debt service coverage ratio is considered a key credit quality indicator when mortgage loan credit loss allowances are estimated. Debt service coverage ratio represents the amount of estimated cash flow from the property available to the borrower to meet principal and interest payment obligations. Debt service coverage ratio estimates are updated annually or more frequently if conditions are warranted based on the Company’s credit monitoring process.


Mortgage loans amortized cost by debt service coverage ratio distribution and year of origination
	June 30, 2024														December 31, 2023
($ in millions)	2019 and prior		2020		2021		2022		2023		Current		Total		Total
Below 1.0	$	—	$	—	$	—	$	13	$	—	$	—	$	13	$	13
1.0 - 1.25	39		—		—		—		2		—		41		41
1.26 - 1.50	74		10		—		30		66		—		180		133
Above 1.50	230		42		183		60		76		—		591		646
Amortized cost before allowance	$	343	$	52	$	183	$	103	$	144	$	—	$	825	$	833
Allowance													(10)		(11)
Amortized cost, net													$	815	$	822

16 www.allstate.com

Notes to Condensed Consolidated Financial Statements

Mortgage loans with a debt service coverage ratio below 1.0 that are not considered impaired primarily relate to instances where the borrower has the financial capacity to fund the revenue shortfalls from the properties for the foreseeable term, the decrease in cash flows from the properties is considered

temporary, or there are other risk mitigating circumstances such as additional collateral, escrow balances or borrower guarantees. Payments on all mortgage loans were current as of June 30, 2024 and December 31, 2023.


Rollforward of credit loss allowance for mortgage loans
	Three months ended June 30,				Six months ended June 30,
($ in millions)	2024		2023		2024		2023
Beginning balance	$	(11)	$	(7)	$	(11)	$	(7)

Net (increases) decreases related to credit losses	1		(3)		1		(3)
Write-offs	—		—		—		—

Ending balance	$	(10)	$	(10)	$	(10)	$	(10)

Bank loans When it is determined a bank loan shall be evaluated individually, the Company uses various methods to estimate credit losses on individual loans such as the present value of the loan’s expected future repayment cash flows discounted at the loan’s current effective interest rate.

Credit ratings of the borrower are considered a key credit quality indicator when bank loan credit loss allowances are estimated. The ratings are either received from the Securities Valuation Office of the NAIC based on availability of applicable ratings from rating agencies on the NAIC credit rating provider list or a comparable internal rating. The year of origination is determined to be the year in which the asset is acquired.


Bank loans amortized cost by credit rating and year of origination
	June 30, 2024														December 31, 2023
($ in millions)	2019 and prior		2020		2021		2022		2023		Current		Total		Total
NAIC 2 / BBB	$	—	$	1	$	—	$	—	$	1	$	1	$	3	$	9
NAIC 3 / BB	—		—		1		—		5		12		18		38
NAIC 4 / B	24		1		8		3		49		39		124		153
NAIC 5-6 / CCC and below	8		—		2		—		2		3		15		46
Amortized cost before allowance	$	32	$	2	$	11	$	3	$	57	$	55	$	160	$	246
Allowance													(11)		(22)
Amortized cost, net													$	149	$	224


Rollforward of credit loss allowance for bank loans
($ in millions)	Three months ended June 30,				Six months ended June 30,
	2024		2023		2024		2023
Beginning balance	$	(13)	$	(52)	$	(22)	$	(57)

Net (increases) decreases related to credit losses	2		(11)		5		(14)
Reduction of allowance related to sales	—		1		—		6
Write-offs	—		—		6		3

Ending balance	$	(11)	$	(62)	$	(11)	$	(62)


Note 5			Fair Value of Assets and Liabilities

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The hierarchy for inputs used in determining fair value maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that observable inputs be used when available. Assets and liabilities recorded on the Condensed Consolidated Statements of Financial Position at fair value are categorized in the

fair value hierarchy based on the observability of inputs to the valuation techniques as follows:

Level 1: Assets and liabilities whose values are based on unadjusted quoted prices for identical assets or liabilities in an active market that the Company can access.

Level 2: Assets and liabilities whose values are based on the following:

(a)Quoted prices for similar assets or liabilities in active markets;

Second Quarter 2024 Form 10-Q 17

Notes to Condensed Consolidated Financial Statements

(b)Quoted prices for identical or similar assets or liabilities in markets that are not active; or

(c)Valuation models whose inputs are observable, directly or indirectly, for substantially the full term of the asset or liability.

Level 3: Assets and liabilities whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. Unobservable inputs reflect the Company’s estimates of the assumptions that market participants would use in valuing the assets and liabilities.

The availability of observable inputs varies by instrument. In situations where fair value is based on internally developed pricing models or inputs that are unobservable in the market, the determination of fair value requires more judgment. The degree of judgment exercised by the Company in determining fair value is typically greatest for instruments categorized in Level 3. In many instances, valuation inputs used to measure fair value fall into different levels of the fair value hierarchy. The category level in the fair value hierarchy is determined based on the lowest level input that is significant to the fair value measurement in its entirety. The Company uses prices and inputs that are current as of the measurement date, including during periods of market disruption. In periods of market disruption, the ability to observe prices and inputs may be reduced for many instruments.

The Company is responsible for the determination of fair value and the supporting assumptions and methodologies. The Company gains assurance that assets and liabilities are appropriately valued through the execution of various processes and controls designed to ensure the overall reasonableness and consistent application of valuation methodologies, including inputs and assumptions, and compliance with accounting standards. For fair values received from third parties or internally estimated, the Company’s processes and controls are designed to ensure that the valuation methodologies are appropriate and consistently applied, the inputs and assumptions are reasonable and consistent with the objective of determining fair value, and the fair values are accurately recorded. For example, on a continuing basis, the Company assesses the reasonableness of individual fair values that have stale security prices or that exceed certain thresholds as compared to previous fair values received from valuation service providers or brokers or derived from internal models. The Company performs procedures to understand and assess the methodologies, processes and controls of valuation service providers.

In addition, the Company may validate the reasonableness of fair values by comparing information obtained from valuation service providers or brokers to other third-party valuation sources for selected securities. The Company performs ongoing price validation procedures such as back-testing of actual sales, which corroborate the various inputs used in internal models to market observable data. When fair

value determinations are expected to be more variable, the Company validates them through reviews by members of management who have relevant expertise and who are independent of those charged with executing investment transactions.

The Company has two types of situations where investments are classified as Level 3 in the fair value hierarchy:

(1)Specific inputs significant to the fair value estimation models are not market observable. This primarily occurs in the Company’s use of broker quotes to value certain securities where the inputs have not been corroborated to be market observable, and the use of valuation models that use significant non-market observable inputs.

(2)Quotes continue to be received from independent third-party valuation service providers and all significant inputs are market observable; however, there has been a significant decrease in the volume and level of activity for the asset when compared to normal market activity such that the degree of market observability has declined to a point where categorization as a Level 3 measurement is considered appropriate. The indicators considered in determining whether a significant decrease in the volume and level of activity for a specific asset has occurred include the level of new issuances in the primary market, trading volume in the secondary market, the level of credit spreads over historical levels, applicable bid-ask spreads, and price consensus among market participants and other pricing sources.

Certain assets are not carried at fair value on a recurring basis, including mortgage loans, bank loans, real estate and policy loans and are only included in the fair value hierarchy disclosure when the individual investment is reported at fair value.

In determining fair value, the Company principally uses the market approach which generally utilizes market transaction data for the same or similar instruments. To a lesser extent, the Company uses the income approach which involves determining fair values from discounted cash flow methodologies. For the majority of Level 2 and Level 3 valuations, a combination of the market and income approaches is used.

Summary of significant inputs and valuation techniques for Level 2 and Level 3 assets and liabilities measured at fair value on a recurring basis

Level 2 measurements

•Fixed income securities:

U.S. government and agencies, municipal, corporate - public and foreign government: The primary inputs to the valuation include quoted prices for identical or similar assets in markets that are not active, contractual cash flows, benchmark yields and credit spreads.

Corporate - privately placed: Privately placed are valued using a discounted cash flow model that is widely accepted in the financial services industry

18 www.allstate.com

Notes to Condensed Consolidated Financial Statements

and uses market observable inputs and inputs derived principally from, or corroborated by, observable market data. The primary inputs to the discounted cash flow model include an interest rate yield curve, as well as published credit spreads for similar assets in markets that are not active that incorporate the credit quality and industry sector of the issuer.

Corporate - privately placed also includes redeemable preferred stock that are valued using quoted prices for identical or similar assets in markets that are not active, contractual cash flows, benchmark yields, underlying stock prices and credit spreads.

ABS: The primary inputs to the valuation include quoted prices for identical or similar assets in markets that are not active, contractual cash flows, benchmark yields, collateral performance and credit spreads. Certain ABS are valued based on non-binding broker quotes whose inputs have been corroborated to be market observable. Residential mortgage-backed securities, included in ABS, use prepayment speeds as a primary input for valuation.

•Equity securities: The primary inputs to the valuation include quoted prices or quoted net asset values for identical or similar assets in markets that are not active.

•Short-term: The primary inputs to the valuation include quoted prices for identical or similar assets in markets that are not active, contractual cash flows, benchmark yields and credit spreads.

•Other investments: Free-standing exchange listed derivatives that are not actively traded are valued based on quoted prices for identical instruments in markets that are not active.

Over-the-counter (“OTC”) derivatives, including interest rate swaps, foreign currency swaps, total return swaps, foreign exchange forward contracts, certain options and certain credit default swaps, are valued using models that rely on inputs such as interest rate yield curves, implied volatilities, index price levels, currency rates, and credit spreads that are observable for substantially the full term of the contract. The valuation techniques underlying the models are widely accepted in the financial services industry and do not involve significant judgment.

Level 3 measurements

•Fixed income securities:

Municipal: Comprise municipal bonds that are not rated by third-party credit rating agencies. The primary inputs to the valuation of these municipal bonds include quoted prices for identical or similar assets that are not market observable, contractual cash flows, benchmark yields and credit spreads. Also included are municipal bonds valued based on non-binding broker quotes where the inputs have not been corroborated to be market observable

and municipal bonds in default valued based on the present value of expected cash flows.

Corporate - public and privately placed and ABS: Primarily valued based on non-binding broker quotes where the inputs have not been corroborated to be market observable. Other inputs for corporate fixed income securities include an interest rate yield curve, as well as published credit spreads for similar assets that incorporate the credit quality and industry sector of the issuer.

•Equity securities: The primary inputs to the valuation include quoted prices or quoted net asset values for identical or similar assets that are not market observable.

•Short-term: For certain short-term investments, amortized cost is used as the best estimate of fair value.

•Other investments: Certain options (including swaptions) are valued using models that are widely accepted in the financial services industry. These are categorized as Level 3 as a result of the significance of non-market observable inputs such as volatility. Other primary inputs include interest rate yield curves and quoted prices for identical or similar assets in markets that exhibit less liquidity relative to those markets supporting Level 2 fair value measurements.

•Other assets: Includes the contingent consideration provision in the sale agreement for Allstate Life Insurance Company (“ALIC”) which meets the definition of a derivative. This derivative is valued internally using a model that includes stochastically determined cash flows and inputs that include spot and forward interest rates, volatility, corporate credit spreads and a liquidity discount. This derivative is categorized as Level 3 due to the significance of non-market observable inputs.

Assets measured at fair value on a non-recurring basis

Comprise long-lived assets to be disposed of by sale, including real estate, that are written down to fair value less costs to sell and bank loans written down to fair value in connection with recognizing credit losses.

Investments excluded from the fair value hierarchy

Investments reported at net asset value (“NAV”)

Limited partnerships carried at fair value, which do not have readily determinable fair values, use NAV provided by the investees and are excluded from the fair value hierarchy. These investments are generally not redeemable by the investees and generally cannot be sold without approval of the general partner. The Company receives distributions of income and proceeds from the liquidation of the underlying assets of the investees, which usually takes place in years 4-9 of the typical contractual life of 10-12 years. As of June 30, 2024, the Company has commitments to invest $171 million in these limited partnership interests.

Second Quarter 2024 Form 10-Q 19

Notes to Condensed Consolidated Financial Statements


Assets and liabilities measured at fair value
	June 30, 2024
($ in millions)	Quoted prices in active markets for identical assets (Level 1)			Significant other observable inputs (Level 2)			Significant unobservable inputs (Level 3)			Counterparty and cash collateral netting			Total
Assets
Fixed income securities:
U.S. government and agencies	$	10,551		$	13		$	—					$	10,564
Municipal	—			6,531			7						6,538
Corporate - public	—			23,470			30						23,500
Corporate - privately placed	—			8,964			50						9,014
Foreign government	—			1,289			—						1,289
ABS	—			1,600			71						1,671
Total fixed income securities	10,551			41,867			158						52,576
Equity securities (1)	1,451			222			393						2,066
Short-term investments	1,596			3,691			1						5,288
Other investments	—			7			2			$	(7)		2
Other assets	2			—			121						123
Total recurring basis assets	13,600			45,787			675			(7)			60,055
Non-recurring basis	—			—			11						11
Total assets at fair value	$	13,600		$	45,787		$	686		$	(7)		$	60,066
% of total assets at fair value	22.7		%	76.2		%	1.1		%	—		%	100.0		%

Investments reported at NAV													1,138
Total													$	61,204
Liabilities
Other liabilities	$	(3)		$	(2)		$	—		$	—		$	(5)
Total recurring basis liabilities	(3)			(2)			—			—			(5)

Total liabilities at fair value	$	(3)		$	(2)		$	—		$	—		$	(5)
% of total liabilities at fair value	60.0		%	40.0		%	—		%	—		%	100.0		%

(1)Excludes $150 million of preferred stock measured at cost.

20 www.allstate.com

Notes to Condensed Consolidated Financial Statements


Assets and liabilities measured at fair value
	December 31, 2023
($ in millions)	Quoted prices in active markets for identical assets (Level 1)			Significant other observable inputs (Level 2)			Significant unobservable inputs (Level 3)			Counterparty and cash collateral netting			Total
Assets
Fixed income securities:
U.S. government and agencies	$	8,606		$	13		$	—					$	8,619
Municipal	—			5,995			11						6,006
Corporate - public	—			23,272			26						23,298
Corporate - privately placed	—			7,849			58						7,907
Foreign government	—			1,290			—						1,290
ABS	—			1,687			58						1,745
Total fixed income securities	8,606			40,106			153						48,865
Equity securities (1)	1,656			203			402						2,261
Short-term investments	1,676			3,467			1						5,144
Other investments	—			3			2			$	(2)		3
Other assets	3			—			118						121
Total recurring basis assets	11,941			43,779			676			(2)			56,394
Non-recurring basis	—			—			15						15
Total assets at fair value	$	11,941		$	43,779		$	691		$	(2)		$	56,409
% of total assets at fair value	21.2		%	77.6		%	1.2		%	—		%	100.0		%

Investments reported at NAV													1,165
Total													$	57,574
Liabilities
Other liabilities	$	(2)		$	(10)		$	—		$	8		$	(4)
Total recurring basis liabilities	(2)			(10)			—			8			(4)

Total liabilities at fair value	$	(2)		$	(10)		$	—		$	8		$	(4)
% of total liabilities at fair value	50.0		%	250.0		%	—		%	(200.0)		%	100.0		%

(1)Excludes $150 million of preferred stock measured at cost.

As of June 30, 2024 and December 31, 2023, Level 3 fair value measurements of fixed income securities total $158 million and $153 million, respectively, and include $23 million and $26 million, respectively, of securities valued based on non-binding broker quotes where the inputs have not been corroborated to be market observable and $7 million and $11 million, respectively, of municipal fixed income securities that are not rated by third-party credit rating agencies.

An increase (decrease) in credit spreads for fixed income securities valued based on non-binding broker quotes would result in a lower (higher) fair value, and an increase (decrease) in the credit rating of municipal bonds that are not rated by third-party credit rating agencies would result in a higher (lower) fair value.

Second Quarter 2024 Form 10-Q 21

Notes to Condensed Consolidated Financial Statements


Rollforward of Level 3 assets and liabilities held at fair value during the three month period ended June 30, 2024
	Balance as of March 31, 2024		Total gains (losses) included in:				Transfers																Balance as of June 30, 2024
($ in millions)			Net income		OCI		Into Level 3		Out of Level 3		Purchases			Sales			Issues			Settlements
Assets
Fixed income securities:
Municipal	$	8	$	—	$	—	$	—	$	—		$	—		$	(1)		$	—		$	—	$	7
Corporate - public	23		1		(1)		—		—			11			(4)			—			—		30
Corporate - privately placed	54		(2)		—		—		—			—			(2)			—			—		50
ABS	58		—		—		—		—			14			—			—			(1)		71
Total fixed income securities	143		(1)		(1)		—		—			25			(7)			—			(1)		158
Equity securities	408		(3)		—		—		—			9			(21)			—			—		393
Short-term investments	21		—		—		—		—			1			(20)			—			(1)		1
Other investments	2		—		—		—		—			—			—			—			—		2
Other assets	120		1		—		—		—			—			—			—			—		121
Total recurring Level 3 assets	$	694	$	(3)	$	(1)	$	—	$	—		$	35		$	(48)		$	—		$	(2)	$	675


Rollforward of Level 3 assets and liabilities held at fair value during the six month period ended June 30, 2024
	Balance as of December 31, 2023		Total gains (losses) included in:				Transfers												Balance as of June 30, 2024
($ in millions)			Net income		OCI		Into Level 3		Out of Level 3		Purchases		Sales		Issues		Settlements
Assets
Fixed income securities:
Municipal	$	11	$	—	$	—	$	—	$	—	$	—	$	(2)	$	—	$	(2)	$	7
Corporate - public	26		1		1		—		—		11		(9)		—		—		30
Corporate - privately placed	58		(6)		—		—		—		—		(2)		—		—		50
ABS	58		—		—		—		—		14		—		—		(1)		71
Total fixed income securities	153		(5)		1		—		—		25		(13)		—		(3)		158
Equity securities	402		6		—		—		—		9		(24)		—		—		393
Short-term investments	1		—		—		—		—		21		(20)		—		(1)		1
Other investments	2		—		—		—		—		—		—		—		—		2
Other assets	118		3		—		—		—		—		—		—		—		121

Total recurring Level 3 assets	$	676	$	4	$	1	$	—	$	—	$	55	$	(57)	$	—	$	(4)	$	675

22 www.allstate.com

Notes to Condensed Consolidated Financial Statements


Rollforward of Level 3 assets and liabilities held at fair value during the three month period ended June 30, 2023
	Balance as of March 31, 2023		Total gains (losses) included in:				Transfers												Balance as of June 30, 2023
($ in millions)			Net income		OCI		Into Level 3		Out of Level 3		Purchases		Sales		Issues		Settlements
Assets
Fixed income securities:
Municipal	$	17	$	3	$	(1)	$	—	$	—	$	—	$	(6)	$	—	$	(1)	$	12
Corporate - public	29		—		—		—		—		—		(3)		—		—		26
Corporate - privately placed	49		(7)		1		16		—		1		—		—		—		60
ABS	27		—		—		—		—		7		—		—		—		34
Total fixed income securities	122		(4)		—		16		—		8		(9)		—		(1)		132
Equity securities	358		7		—		—		—		28		(12)		—		—		381
Short-term investments	6		—		—		—		—		—		—		—		—		6
Other investments	2		—		—		—		—		—		—		—		—		2
Other assets	112		(8)		—		—		—		—		—		—		—		104

Total recurring Level 3 assets	$	600	$	(5)	$	—	$	16	$	—	$	36	$	(21)	$	—	$	(1)	$	625


Rollforward of Level 3 assets and liabilities held at fair value during the six month period ended June 30, 2023
	Balance as of December 31, 2022		Total gains (losses) included in:				Transfers												Balance as of June 30, 2023
($ in millions)			Net income		OCI		Into Level 3		Out of Level 3		Purchases		Sales		Issues		Settlements
Assets
Fixed income securities:
Municipal	$	21	$	3	$	(1)	$	—	$	—	$	—	$	(9)	$	—	$	(2)	$	12
Corporate - public	69		(1)		2		—		—		—		(44)		—		—		26
Corporate - privately placed	55		(11)		1		16		—		1		(2)		—		—		60
ABS	28		—		—		—		—		7		—		—		(1)		34
Total fixed income securities	173		(9)		2		16		—		8		(55)		—		(3)		132
Equity securities	333		7		—		—		—		70		(29)		—		—		381
Short-term investments	6		—		—		—		—		—		—		—		—		6
Other investments	3		(1)		—		—		—		—		—		—		—		2
Other assets	103		1		—		—		—		—		—		—		—		104

Total recurring Level 3 assets	$	618	$	(2)	$	2	$	16	$	—	$	78	$	(84)	$	—	$	(3)	$	625


Total Level 3 gains (losses) included in net income
	Three months ended June 30,				Six months ended June 30,
($ in millions)	2024		2023		2024		2023
Net investment income	$	1	$	3	$	1	$	(2)
Net gains (losses) on investments and derivatives (1)	(5)		—		—		(1)
Operating costs and expenses (1)	1		(8)		3		1

(1)Prior to the first quarter of 2024, Level 3 gains (losses) included in operating costs and expenses were reported in this table within net gains (losses) on investments and derivatives. Historical results have been updated to conform with this presentation.

There were no transfers into Level 3 during the three and six months ended June 30, 2024. Transfers into Level 3 during the three and six months ended June 30, 2023 included situations where securities were written down utilizing an internal price where the inputs have not been corroborated to be market

observable resulting in the securities being classified as Level 3.

There were no transfers out of Level 3 during the three and six months ended June 30, 2024 and 2023.

Second Quarter 2024 Form 10-Q 23

Notes to Condensed Consolidated Financial Statements


Valuation changes included in net income and OCI for Level 3 assets and liabilities still held
	Three months ended June 30,				Six months ended June 30,
($ in millions)	2024		2023		2024		2023
Assets
Fixed income securities:

Corporate - public	$	1	$	—	$	1	$	—
Corporate - privately placed	(2)		(7)		(6)		(11)

Total fixed income securities	(1)		(7)		(5)		(11)
Equity securities	—		7		11		6

Other investments	—		—		—		(1)
Other assets	1		(8)		3		1


Total recurring Level 3 assets	$	—	$	(8)	$	9	$	(5)



Total included in net income	$	—	$	(8)	$	9	$	(5)

Components of net income
Net investment income	$	1	$	3	$	1	$	(2)
Net gains (losses) on investments and derivatives	(2)		(3)		5		(4)
Operating costs and expenses	1		(8)		3		1
Total included in net income	$	—	$	(8)	$	9	$	(5)

Assets

Corporate - public	$	(1)	$	—	$	1	$	1
Corporate - privately placed	—		1		—		1



Changes in unrealized net capital gains and losses reported in OCI	$	(1)	$	1	$	1	$	2


Financial instruments not carried at fair value
($ in millions)		June 30, 2024				December 31, 2023
Financial assets	Fair value level	Amortized cost, net		Fair value		Amortized cost, net		Fair value
Mortgage loans	Level 3	$	815	$	762	$	822	$	769
Bank loans	Level 3	149		161		224		238



Financial liabilities	Fair value level	Carrying value (1)		Fair value		Carrying value (1)		Fair value
Contractholder funds on investment contracts	Level 3	$	42	$	42	$	46	$	46
Debt	Level 2	8,082		7,690		7,942		7,655
Liability for collateral	Level 2	2,001		2,001		1,891		1,891

(1)Represents the amounts reported on the Condensed Consolidated Statements of Financial Position.


Note 6			Derivative Financial Instruments

The Company uses derivatives for risk reduction and to increase investment portfolio returns through asset replication. Risk reduction activity is focused on managing the risks with certain assets and liabilities arising from the potential adverse impacts from changes in risk-free interest rates, changes in equity market valuations, increases in credit spreads and foreign currency fluctuations.

Asset replication refers to the “synthetic” creation of assets through the use of derivatives. The Company replicates fixed income securities using a combination of a credit default swap, index total return swap, options, futures, or a foreign currency forward contract and one or more highly rated fixed income securities, primarily investment grade host bonds, to synthetically replicate the economic characteristics of one or more cash market securities. The Company replicates equity

securities using futures, index total return swaps, and options to increase equity exposure.

Property-Liability may use interest rate swaps, swaptions, futures and options to manage the interest rate risks of existing investments. These instruments are utilized to change the duration of the portfolio in order to offset the economic effect that interest rates would otherwise have on the fair value of its fixed income securities. Fixed income index total return swaps are used to offset valuation losses in the fixed income portfolio during periods of declining market values. Credit default swaps are typically used to mitigate the credit risk within the Property-Liability fixed income portfolio. Equity index total return swaps, futures and options are used by Property-Liability to offset valuation losses in the equity portfolio during periods of declining equity market values. In addition,

24 www.allstate.com

Notes to Condensed Consolidated Financial Statements

equity futures are used to hedge the market risk related to deferred compensation liability contracts. Forward contracts are primarily used by Property-Liability to hedge foreign currency risk associated with holding foreign currency denominated investments and foreign operations.

When derivatives meet specific criteria, they may be designated as accounting hedges and accounted for as fair value, cash flow, foreign currency fair value or foreign currency cash flow hedges.

The notional amounts specified in the contracts are used to calculate the exchange of contractual payments under the agreements and are generally not representative of the potential for gain or loss on these agreements. However, the notional amounts specified in credit default swaps where the Company has sold credit protection represent the maximum amount of potential loss, assuming no recoveries.

Fair value, which is equal to the carrying value, is the estimated amount that the Company would receive or pay to terminate the derivative contracts at the reporting date. The carrying value amounts for OTC derivatives are further adjusted for the effects, if any, of enforceable master netting agreements and are presented on a net basis, by counterparty agreement, in the Condensed Consolidated Statements of Financial Position.

For those derivatives which qualify and have been designated as fair value accounting hedges, net income includes the changes in the fair value of both the derivative instrument and the hedged risk. For

cash flow hedges, gains and losses are amortized from AOCI and are reported in net income in the same period the forecasted transactions being hedged impact net income.

Non-hedge accounting is generally used for “portfolio” level hedging strategies where the terms of the individual hedged items do not meet the strict homogeneity requirements to permit the application of hedge accounting. For non-hedge derivatives, net income includes changes in fair value and accrued periodic settlements, when applicable. With the exception of non-hedge derivatives used for asset replication and non-hedge embedded derivatives, all of the Company’s derivatives are evaluated for their ongoing effectiveness as either accounting hedge or non-hedge derivative financial instruments on at least a quarterly basis.

In connection with the sale of ALIC and certain affiliates in 2021, the sale agreement included a provision related to contingent consideration that may be earned over a ten-year period with the first potential payment date commencing on January 1, 2026 and a final potential payment date of January 1, 2035. The contingent consideration is determined annually based on the average ten-year Treasury rate over the preceding three-year period compared to a designated rate. The contingent consideration meets the definition of a derivative and is accounted for on a fair value basis with periodic changes in fair value reflected in earnings. There are no collateral requirements related to the contingent consideration.

Second Quarter 2024 Form 10-Q 25

Notes to Condensed Consolidated Financial Statements


Summary of the volume and fair value positions of derivative instruments as of June 30, 2024
($ in millions, except number of contracts)		Volume (1)
	Balance sheet location	Notional amount		Number of contracts	Fair value, net		Gross asset		Gross liability
Asset derivatives


Derivatives not designated as accounting hedging instruments
Interest rate contracts



Futures	Other assets	n/a		3,538	$	1	$	1	$	—
Equity and index contracts
Options	Other investments	n/a		28	—		—		—
Futures	Other assets	n/a		1,192	1		1		—






Contingent consideration	Other assets	$	250	n/a	121		121		—








Total asset derivatives		$	250	4,758	$	123	$	123	$	—

Liability derivatives


Derivatives not designated as accounting hedging instruments
Interest rate contracts




Futures	Other liabilities & accrued expenses	n/a		10,307	$	(2)	$	—	$	(2)
Equity and index contracts
Options	Other liabilities & accrued expenses	n/a		17	—		—		—
Futures	Other liabilities & accrued expenses	n/a		482	(1)		—		(1)




Foreign currency contracts
Foreign currency forwards	Other liabilities & accrued expenses	$	616	n/a	5		7		(2)





Credit default contracts
Credit default swaps – buying protection	Other liabilities & accrued expenses	30		n/a	—		—		—



Total liability derivatives		646		10,806	2		$	7	$	(5)
Total derivatives		$	896	15,564	$	125

(1) Volume for OTC and cleared derivative contracts is represented by their notional amounts. Volume for exchange traded derivatives is represented by the number of contracts, which is the basis on which they are traded. (n/a = not applicable)

26 www.allstate.com

Notes to Condensed Consolidated Financial Statements


Summary of the volume and fair value positions of derivative instruments as of December 31, 2023
($ in millions, except number of contracts)		Volume (1)
	Balance sheet location	Notional amount		Number of contracts	Fair value, net		Gross asset		Gross liability
Asset derivatives



Derivatives not designated as accounting hedging instruments
Interest rate contracts

Futures	Other assets	n/a		20,479	$	2	$	2	$	—
Equity and index contracts
Options	Other investments	n/a		32	—		—		—
Futures	Other assets	n/a		1,305	1		1		—



Foreign currency contracts
Foreign currency forwards	Other investments	$	278	n/a	(2)		2		(4)

Contingent consideration	Other assets	250		n/a	118		118		—
Credit default contracts
Credit default swaps – buying protection	Other investments	34		n/a	(1)		—		(1)





Total asset derivatives		$	562	21,816	$	118	$	123	$	(5)

Liability derivatives


Derivatives not designated as accounting hedging instruments
Interest rate contracts


Futures	Other liabilities & accrued expenses	n/a		2,175	$	(1)	$	—	$	(1)
Equity and index contracts

Futures	Other liabilities & accrued expenses	n/a		980	(1)		—		(1)



Foreign currency contracts
Foreign currency forwards	Other liabilities & accrued expenses	$	306	n/a	(3)		1		(4)


Credit default contracts
Credit default swaps – buying protection	Other liabilities & accrued expenses	19		n/a	(1)		—		(1)


Total liability derivatives		325		3,155	(6)		$	1	$	(7)
Total derivatives		$	887	24,971	$	112


Gross and net amounts for OTC derivatives (1)
($ in millions)			Offsets
	Gross amount		Counter-party netting		Cash collateral (received) pledged		Net amount on balance sheet		Securities collateral (received) pledged		Net amount
June 30, 2024
Asset derivatives	$	7	$	(7)	$	—	$	—	$	—	$	—
Liability derivatives	(2)		7		(7)		(2)		—		(2)

December 31, 2023
Asset derivatives	$	3	$	(6)	$	4	$	1	$	—	$	1
Liability derivatives	(10)		6		2		(2)		—		(2)

(1)All OTC derivatives are subject to enforceable master netting agreements.

Second Quarter 2024 Form 10-Q 27

Notes to Condensed Consolidated Financial Statements


Gains (losses) from valuation and settlements reported on derivatives not designated as accounting hedges
($ in millions)	Net gains (losses) on investments and derivatives		Operating costs and expenses		Total gain (loss) recognized in net income on derivatives
Three months ended June 30, 2024
Interest rate contracts	$	(14)	$	—	$	(14)
Equity and index contracts	(4)		—		(4)
Contingent consideration	—		1		1
Foreign currency contracts	3		—		3




Total	$	(15)	$	1	$	(14)

Six months ended June 30, 2024
Interest rate contracts	$	(21)	$	—	$	(21)
Equity and index contracts	(15)		14		(1)
Contingent consideration	—		3		3
Foreign currency contracts	14		—		14
Credit default contracts	(1)		—		(1)



Total	$	(23)	$	17	$	(6)

Three months ended June 30, 2023
Interest rate contracts	$	18	$	—	$	18
Equity and index contracts	(20)		10		(10)
Contingent consideration	—		(8)		(8)

Foreign currency contracts	(4)		—		(4)
Credit default contracts	(1)		—		(1)



Total	$	(7)	$	2	$	(5)

Six months ended June 30, 2023
Interest rate contracts	$	(17)	$	—	$	(17)
Equity and index contracts	(16)		18		2
Contingent consideration	—		1		1
Foreign currency contracts	(11)		—		(11)
Credit default contracts	(15)		—		(15)



Total	$	(59)	$	19	$	(40)

The Company manages its exposure to credit risk by utilizing highly rated counterparties, establishing risk control limits, executing legally enforceable master netting agreements (“MNAs”) and obtaining collateral where appropriate. The Company uses MNAs for OTC derivative transactions that permit either party to net payments due for transactions and collateral is either pledged or obtained when certain predetermined exposure limits are exceeded.


OTC cash and securities collateral pledged
($ in millions)	June 30, 2024
Pledged by the Company	$	—
Pledged to the Company (1)	7

(1) No collateral was posted under MNAs for contracts containing credit-risk-contingent provisions that are in a liability provision.

The Company has not incurred any losses on derivative financial instruments due to counterparty nonperformance. Other derivatives, including futures and certain option contracts, are traded on organized exchanges which require margin deposits and guarantee the execution of trades, thereby mitigating any potential credit risk.

Counterparty credit exposure represents the Company’s potential loss if all of the counterparties concurrently fail to perform under the contractual terms of the contracts and all collateral, if any, becomes worthless. This exposure is measured by the fair value of OTC derivative contracts with a positive fair value at the reporting date reduced by the effect, if any, of legally enforceable master netting agreements.


OTC derivatives counterparty credit exposure by counterparty credit rating
($ in millions)	June 30, 2024							December 31, 2023
Rating (1)	Number of counter- parties	Notional amount (2)		Credit exposure (2)		Exposure, net of collateral (2)		Number of counter- parties	Notional amount (2)		Credit exposure (2)		Exposure, net of collateral (2)

A+	3	$	458	$	5	$	—	—	$	—	$	—	$	—




Total	3	$	458	$	5	$	—	—	$	—	$	—	$	—

(1) Allstate uses the lower of S&P’s or Moody’s long-term debt issuer ratings.

(2) Only OTC derivatives with a net positive fair value are included for each counterparty.

28 www.allstate.com

Notes to Condensed Consolidated Financial Statements

For certain exchange traded and cleared derivatives, margin deposits are required as well as daily cash settlements of margin accounts.


Exchange traded and cleared margin deposits
($ in millions)	June 30, 2024
Pledged by the Company	$	79
Received by the Company	—

Market risk is the risk that the Company will incur losses due to adverse changes in market rates and prices. Market risk exists for all of the derivative financial instruments the Company currently holds, as these instruments may become less valuable due to adverse changes in market conditions. To limit this risk, the Company’s senior management has established risk control limits. In addition, changes in fair value of the derivative financial instruments that the Company uses for risk management purposes are generally offset by the change in the fair value or cash flows of the hedged risk component of the related assets, liabilities or forecasted transactions.

Certain of the Company’s derivative transactions contain credit-risk-contingent termination events and cross-default provisions. Credit-risk-contingent termination events allow the counterparties to terminate the derivative agreement or a specific trade on certain dates if AIC’s financial strength credit ratings by Moody’s or S&P fall below a certain level. Credit-risk-contingent cross-default provisions allow the counterparties to terminate the derivative agreement if the Company defaults by pre-determined threshold amounts on certain debt instruments.

The following table summarizes the fair value of derivative instruments with termination, cross-default or collateral credit-risk-contingent features that are in a liability position, as well as the fair value of assets and collateral that are netted against the liability in accordance with provisions within legally enforceable MNAs.


($ in millions)	June 30, 2024		December 31, 2023
Gross liability fair value of contracts containing credit-risk-contingent features	$	2	$	10
Gross asset fair value of contracts containing credit-risk-contingent features and subject to MNAs	(2)		(3)
Collateral posted under MNAs for contracts containing credit-risk-contingent features	—		(5)
Maximum amount of additional exposure for contracts with credit-risk-contingent features if all features were triggered concurrently	$	—	$	2


Note 7			Variable Interest Entities

Consolidated VIEs primarily include Adirondack Insurance Exchange (“Adirondack”), a New York reciprocal insurer, and New Jersey Skylands Insurance Association (“Skylands”), a New Jersey reciprocal insurer. The Reciprocal Exchanges are insurance carriers organized as unincorporated associations. The Company does not own the equity of the Reciprocal Exchanges, which is owned by their respective policyholders.

The results of the Reciprocal Exchanges are included in the Allstate Protection segment as the Company manages the business operations of the Reciprocal Exchanges and has the power to direct their activities that most significantly impact their economic performance. The Company receives a management fee for the services provided to the Reciprocal Exchanges totaling $11 million and $21 million for the three and six months ended June 30, 2024, respectively, compared to $12 million and $23 million for the three and six months ended June 30, 2023, respectively. In addition, as of June 30, 2024 and December 31, 2023, the Company holds interests of $123 million in the form of surplus notes that provide capital to the Reciprocal Exchanges and would absorb expected losses.

As of June 30, 2024, Adirondack’s capital was below levels required by insurance regulations and its December 31, 2023 statutory-basis audited financial statements included disclosure expressing substantial

doubt about Adirondack’s ability to continue as a going concern. Due to ongoing operating losses and the inability of the Reciprocal Exchanges to obtain approval for premium rate increases that are commensurate with increases in claims and claims expense, the Company recorded a loss for the carrying value of the surplus notes in the amount of $123 million in the first quarter of 2024. The loss has been reflected as a capital transaction attributable to noncontrolling interest as the Company expects 100% of its interests in surplus notes to absorb expected losses of the Reciprocal Exchanges.

In addition, the Company has a 100% quota share reinsurance agreement with Skylands to cede all of Skylands’ business to the Company. Claims and claims expense ceded to the Company were $18 million and $30 million for the three and six months ended June 30, 2024, respectively, compared to $10 million and $17 million for the three and six months ended June 30, 2023, respectively.

The Reciprocal Exchanges generated $61 million and $122 million of earned premiums for the three and six months ended June 30, 2024, respectively, compared to $57 million and $114 million for the three and six months ended June 30, 2023, respectively. Total costs and expenses were $58 million and $145 million for the three and six months ended June 30, 2024, respectively, compared to $85 million and $144

Second Quarter 2024 Form 10-Q 29

Notes to Condensed Consolidated Financial Statements

million for the three and six months ended June 30, 2023, respectively.

In the event of dissolution, policyholders would share any residual unassigned surplus but are not subject to assessment for any deficit in unassigned surplus of the Reciprocal Exchanges. The assets of the Reciprocal Exchanges can be used only to settle the obligations of the Reciprocal Exchanges and general creditors have no recourse to the Company.

The table below reflects the consolidated VIE results, which exclude all intercompany transactions including surplus notes and related accrued interest, management fees and intercompany reinsurance transactions.


Assets and liabilities of Reciprocal Exchanges included in the condensed consolidated statement of financial position (1)
($ in millions)	June 30, 2024		December 31, 2023
Assets
Fixed income securities	$	227	$	267
Short-term investments	30		7
Deferred policy acquisition costs	17		25
Premium installment and other receivables, net	41		44
Reinsurance recoverables, net	75		76
Other assets	15		54
Total assets	405		473
Liabilities
Reserve for property and casualty insurance claims and claims expense	226		201
Unearned premiums	160		177
Other liabilities and expenses	26		77
Total liabilities	$	412	$	455

(1) Intercompany balances eliminated in consolidation





Total assets	$	(57)	$	(26)




Total liabilities	(198)		(189)


Note 8			Reserve for Property and Casualty Insurance Claims and Claims Expense

The Company establishes reserves for claims and claims expense on reported and unreported claims of insured losses. The Company’s reserving process considers known facts and interpretations of circumstances and factors including the Company’s experience with similar cases, actual claims paid, historical trends involving claim payment patterns and pending levels of unpaid claims, loss management programs, product mix and contractual terms, changes in laws and regulations, judicial decisions, and economic conditions.

When the Company experiences changes in the mix or type of claims or changing claim settlement patterns or data, it applies actuarial judgment in the determination and selection of development factors to develop reserve liabilities. Inflation and a higher mix of more complex repairs, combined with skilled labor shortages, have increased physical damage loss costs. Medical inflation, increased treatment trends, higher attorney representation, rising litigation costs and more severe accidents have contributed to higher third-party bodily injury loss costs. The Company has also digitized and modified claim processes to increase effectiveness and efficiency. These factors may lead to historical development trends being less predictive of future loss development, potentially creating additional reserve variability.

Generally, the initial reserves for a new accident year are established based on claim frequency and

severity assumptions for different business segments, lines and coverages based on historical relationships to relevant inflation indicators. Reserves for prior accident years are statistically determined using several different actuarial estimation methods. Changes in auto claim frequency may result from changes in mix of business, driving behaviors, miles driven or other factors. Changes in auto current year claim severity are generally influenced by inflation in the medical and auto repair sectors, changes in attorney represented and litigated claim behavior, the effectiveness and efficiency of claim settlements and changes in mix of claim types. When changes in claim data occur, actuarial judgment is used to determine appropriate development factors to establish reserves. The Company’s reserving process incorporates changes in loss patterns, operational statistics and changes in claims reporting processes to determine its best estimate of recorded reserves.

As part of the reserving process, the Company may also supplement its claims processes by utilizing third-party adjusters, appraisers, engineers, inspectors, and other professionals and information sources to assess and settle catastrophe and non-catastrophe related claims. The effects of inflation are implicitly considered in the reserving process.

Because reserves are estimates of unpaid portions of losses that have occurred, including incurred but not reported (“IBNR”) losses, the establishment of

30 www.allstate.com

Notes to Condensed Consolidated Financial Statements

appropriate reserves, including reserves for catastrophes, Run-off Property-Liability and reinsurance and indemnification recoverables, is an inherently uncertain and complex process. The ultimate cost of losses may vary materially from recorded amounts, which are based on management’s best estimates.

The highest degree of uncertainty is associated with reserves for losses incurred in the initial reporting period as it contains the greatest proportion of losses that have not been reported or settled as well as heightened uncertainty for claims that involve litigation or take longer to settle during periods of rapidly increasing loss costs. The Company also has uncertainty in the Run-off Property-Liability reserves that are based on events long since passed and are complicated by lack of historical data, legal interpretations, unresolved legal issues and legislative intent based on establishment of facts.

The Company regularly updates its reserve estimates as new information becomes available and as events unfold that may affect the resolution of unsettled claims. Changes in reserve estimates, which may be material, are reported in property and casualty insurance claims and claims expense in the Condensed Consolidated Statements of Operations in the period such changes are determined.

Management believes that the reserve for property and casualty insurance claims and claims expense, net of recoverables, is appropriately established in the aggregate and adequate to cover the ultimate net cost of reported and unreported claims arising from losses which had occurred by the date of the Condensed Consolidated Statements of Financial Position based on available facts, laws and regulations.


Rollforward of the reserve for property and casualty insurance claims and claims expense
	Six months ended June 30,
($ in millions)	2024		2023
Balance as of January 1	$	39,858	$	37,541
Less: Recoverables (1)	8,396		9,176
Net balance as of January 1	31,462		28,365

Incurred claims and claims expense related to:
Current year	20,656		21,856
Prior years	(354)		197
Total incurred	20,302		22,053
Claims and claims expense paid related to:
Current year	(9,087)		(9,094)
Prior years	(9,465)		(9,523)
Total paid	(18,552)		(18,617)
Net balance as of June 30	33,212		31,801
Plus: Recoverables	8,341		8,730
Balance as of June 30	$	41,553	$	40,531

(1)Recoverables comprises reinsurance and indemnification recoverables.

Incurred claims and claims expense represents the sum of paid losses, claim adjustment expenses and reserve changes in the period. This expense included losses from catastrophes of $2.85 billion and $4.39 billion in the six months ended June 30, 2024 and 2023, respectively, net of recoverables.

Catastrophes are an inherent risk of the property and casualty insurance business that have contributed to, and will continue to contribute to, material year-to-year fluctuations in the Company’s results of operations and financial position.

Second Quarter 2024 Form 10-Q 31

Notes to Condensed Consolidated Financial Statements


Prior year reserve reestimates included in claims and claims expense (1)
	Non-catastrophe losses				Catastrophe losses				Total
($ in millions)	2024		2023		2024		2023		2024		2023
Three months ended June 30,
Auto	$	(171)	$	116	$	(9)	$	(19)	$	(180)	$	97
Homeowners	(63)		41		(128)		53		(191)		94
Other personal lines	60		8		1		(5)		61		3
Commercial lines	109		6		(2)		2		107		8
Other business lines	(1)		10		—		—		(1)		10
Run-off Property-Liability	2		1		—		—		2		1
Protection Services	(1)		(1)		—		—		(1)		(1)
Total prior year reserve reestimates	$	(65)	$	181	$	(138)	$	31	$	(203)	$	212

Six months ended June 30,
Auto	$	(238)	$	119	$	(16)	$	(47)	$	(254)	$	72
Homeowners	(103)		29		(277)		45		(380)		74
Other personal lines	115		18		(2)		(12)		113		6
Commercial lines	163		29		(5)		3		158		32
Other business lines	4		11		—		—		4		11
Run-off Property-Liability	6		3		—		—		6		3
Protection Services	(1)		(1)		—		—		(1)		(1)
Total prior year reserve reestimates	$	(54)	$	208	$	(300)	$	(11)	$	(354)	$	197

(1)Favorable reserve reestimates are shown in parentheses.

32 www.allstate.com

Notes to Condensed Consolidated Financial Statements


Note 9			Reserve for Future Policy Benefits and Contractholder Funds


Rollforward of reserve for future policy benefits (1)
	Six months ended June 30,
	Accident and health				Traditional life				Total
($ in millions)	2024		2023		2024		2023		2024		2023
Present value of expected net premiums
Beginning balance	$	1,688	$	1,464	$	325	$	238	$	2,013	$	1,702
Beginning balance at original discount rate	1,737		1,549		330		246		2,067		1,795
Effect of changes in cash flow assumptions	(1)		—		—		(12)		(1)		(12)
Effect of actual variances from expected experience	(27)		(26)		13		19		(14)		(7)
Adjusted beginning balance	1,709		1,523		343		253		2,052		1,776
Issuances	344		259		56		18		400		277
Interest accrual	39		25		7		5		46		30
Net premiums collected	(196)		(186)		(32)		(25)		(228)		(211)

Ending balance at original discount rate	1,896		1,621		374		251		2,270		1,872
Effect of changes in discount rate assumptions	(79)		(68)		(8)		(7)		(87)		(75)
Ending balance	1,817		1,553		366		244		2,183		1,797

Present value of expected future policy benefits
Beginning balance	2,453		2,229		657		524		3,110		2,753
Beginning balance at original discount rate	2,495		2,316		656		534		3,151		2,850
Effect of changes in cash flow assumptions	(6)		—		—		(12)		(6)		(12)
Effect of actual variances from expected experience	(25)		(30)		8		20		(17)		(10)
Adjusted beginning balance	2,464		2,286		664		542		3,128		2,828
Issuances	344		256		57		18		401		274
Interest accrual	53		47		15		12		68		59
Benefit payments	(210)		(199)		(19)		(26)		(229)		(225)

Ending balance at original discount rate	2,651		2,390		717		546		3,368		2,936
Effect of changes in discount rate assumptions	(84)		(64)		(20)		(7)		(104)		(71)
Ending balance	$	2,567	$	2,326	$	697	$	539	$	3,264	$	2,865

Net reserve for future policy benefits (1)	$	750	$	773	$	331	$	295	$	1,081	$	1,068
Less: reinsurance recoverables	80		84		1		2		81		86
Net reserve for future policy benefits, after reinsurance recoverables	$	670	$	689	$	330	$	293	$	1,000	$	982

(1)Excludes $263 million and $271 million of reserves related to short-duration and other contracts as of June 30, 2024 and 2023, respectively.


Revenue and interest recognized in the condensed consolidated statements of operations
($ in millions)	Six months ended June 30,
		2024		2023
Revenues (1)
Accident and health		$	436	$	446
Traditional life		68		50
Total		$	504	$	496

Interest expense (2)
Accident and health		$	14	$	22
Traditional life		8		7
Total		$	22	$	29

(1)Total revenues reflects gross premiums used in the calculation for reserve for future policy benefits. Revenues included in Accident and health insurance premiums and contract charges on the Condensed Consolidated Statements of Operations reflect premium revenue recognized for traditional life insurance and long-duration and short-duration accident and health insurance contracts.

(2)Total interest expense presented as part of Accident, health and other policy benefits on the Condensed Consolidated Statements of Operations.

Second Quarter 2024 Form 10-Q 33

Notes to Condensed Consolidated Financial Statements

The following table provides the amount of undiscounted and discounted expected gross premiums and expected future benefits and expenses for nonparticipating traditional and limited-payment contracts.


	As of June 30,
	2024				2023
($ in millions)	Undiscounted		Discounted		Undiscounted		Discounted
Accident and health
Expected future gross premiums	$	5,703	$	3,867	$	5,020	$	3,602
Expected future benefits and expenses	3,854		2,567		3,350		2,326
Traditional life
Expected future gross premiums	1,042		715		696		489
Expected future benefits and expenses	1,456		697		1,008		539

The following table provides the weighted-average duration and weighted-average interest rates for the reserve for future policy benefits.



	As of June 30,
	Accident and health				Traditional life
	2024		2023		2024		2023
Weighted-average duration (in years)	8.0		3.9		15.1		14.0
Weighted-average interest rates
Interest accretion rate (discount rate at contract issuance)	5.04	%	5.08	%	5.37	%	5.46	%
Current discount rate (upper-medium grade fixed income yield)	5.26		4.79		5.35		5.14

Significant assumptions To determine mortality and morbidity assumptions, the Company uses a combination of its historical experience and industry data. Mortality and morbidity are monitored throughout the year. Historical experience is obtained through annual Company experience studies in the third quarter that consider its historical claim patterns. The lapse assumption is determined based on historical lapses of the Company’s insurance contracts.

For the six months ended June 30, 2024 and 2023, actual experience for lapses in accident and health products was higher than expected.

For the six months ended June 30, 2024 and 2023, actual experience for lapses in traditional life products was lower than expected.

Contractholder funds


Contractholder funds activity
	Six months ended June 30,
($ in millions)	2024			2023
Beginning balance	$	888		$	879
Deposits	67			66
Interest credited	17			17
Benefits	(5)			(6)
Surrenders and partial withdrawals	(11)			(10)
Contract charges	(60)			(60)
Other adjustments	(5)			(5)
Ending balance	$	891		$	881

Components of contractholder funds
Interest-sensitive life insurance	$	849		$	833
Fixed annuities	42			48
Total	$	891		$	881

Weighted-average crediting rate	4.20		%	4.27		%
Net amount at risk (1)	$	11,165		$	11,640
Cash surrender value	732			725

(1)Guaranteed benefit amounts in excess of the current account balances.

34 www.allstate.com

Notes to Condensed Consolidated Financial Statements


Account values: comparison of current crediting rate to guaranteed minimum crediting rate (1)
($ in millions) Range of guaranteed minimum crediting rates	At guaranteed minimum		1-50 basis points above		Total
June 30, 2024
Less than 3.00%	$	—	$	—	$	—
3.00% - 3.49%	—		37		37
3.50% - 3.99%	10		—		10
4.00% - 4.49%	438		—		438
4.50% - 4.99%	259		—		259
5.00% or greater	66		—		66
Non-account balances (2)					81
Total	$	773	$	37	$	891

June 30, 2023
Less than 3.00%	$	—	$	—	$	—
3.00% - 3.49%	—		23		23
3.50% - 3.99%	11		—		11
4.00% - 4.49%	433		—		433
4.50% - 4.99%	265		—		265
5.00% or greater	69		—		69
Non-account balances (2)					80
Total	$	778	$	23	$	881

(1)Difference, in basis points, between rates being credited to contractholders and the respective guaranteed minimum crediting rates.

(2)Non-account balances include unearned revenue and amounts related to policies where a claim is either in the course of settlement or incurred but not reported. A claim on a life insurance policy results in the accrual of interest at a rate and over a period of time that is specified by state insurance regulations.


Note 10			Reinsurance and Indemnification


Effects of reinsurance ceded and indemnification programs on property and casualty premiums earned and accident and health insurance premiums and contract charges
($ in millions)	Three months ended June 30,				Six months ended June 30,
	2024		2023		2024		2023
Property and casualty insurance premiums earned	$	(588)	$	(495)	$	(1,145)	$	(941)
Accident and health insurance premiums and contract charges	(11)		(10)		(21)		(19)


Effects of reinsurance ceded and indemnification programs on property and casualty insurance claims and claims expense and accident, health and other policy benefits
($ in millions)	Three months ended June 30,				Six months ended June 30,
	2024		2023		2024		2023
Property and casualty insurance claims and claims expense	$	(284)	$	60	$	(516)	$	(260)
Accident, health and other policy benefits	(8)		(17)		(14)		(25)

Reinsurance and indemnification recoverables


Reinsurance and indemnification recoverables, net
($ in millions)	June 30, 2024		December 31, 2023
Property and casualty
Paid and due from reinsurers and indemnitors	$	229	$	254
Unpaid losses estimated (including IBNR)	8,341		8,396
Total property and casualty	$	8,570	$	8,650

Accident and health insurance	160		159
Total	$	8,730	$	8,809

Second Quarter 2024 Form 10-Q 35

Notes to Condensed Consolidated Financial Statements


Rollforward of credit loss allowance for reinsurance recoverables
($ in millions)	Three months ended June 30,				Six months ended June 30,
	2024		2023		2024		2023
Property and casualty (1) (2)
Beginning balance	$	(64)	$	(61)	$	(62)	$	(62)
(Increase) decrease in the provision for credit losses	—		—		(2)		1
Write-offs	—		—		—		—
Ending balance	$	(64)	$	(61)	$	(64)	$	(61)

Accident and health insurance
Beginning balance	$	(3)	$	(3)	$	(3)	$	(3)

Increase in the provision for credit losses	—		—		—		—
Write-offs	—		—		—		—
Ending balance	$	(3)	$	(3)	$	(3)	$	(3)

(1)Primarily related to Run-off Property-Liability reinsurance ceded.

(2)Indemnification recoverables are considered collectible based on the industry pool and facility enabling legislation.


Note 11			Deferred Policy Acquisition Costs

The following table shows a roll-forward of DAC on long-duration contracts in the Allstate Health and Benefits segment, along with a reconciliation to the Company’s total DAC balance.


Deferred policy acquisition costs activity
($ in millions)	Accident and health		Traditional life		Interest-sensitive life		Total
Six months ended June 30, 2024
Allstate Health and Benefits
Long-duration contracts
Beginning balance	$	321	$	90	$	100	$	511
Acquisition costs deferred	51		27		9		87
Amortization charged to income	(40)		(10)		(7)		(57)
Experience adjustment	(9)		(1)		(1)		(11)
Total	$	323	$	106	$	101	530
Short-duration contracts							32
Allstate Protection							2,478
Protection Services							3,072
Ending balance							$	6,112

Six months ended June 30, 2023
Allstate Health and Benefits
Long-duration contracts
Beginning balance	$	322	$	79	$	101	$	502
Acquisition costs deferred	25		13		7		45
Amortization charged to income	(16)		(7)		(7)		(30)
Experience adjustment	(13)		—		(1)		(14)
Total	$	318	$	85	$	100	503
Short-duration contracts							27
Allstate Protection							2,203
Protection Services							2,874
Ending balance							$	5,607


Note 12			Capital Structure

Repayment of debt On May 15, 2024, the Company repaid, at maturity, $350 million of 6.75% Senior Notes.

Issuance of debt On June 24, 2024, the Company issued $500 million of 5.05% Senior Notes due 2029. Interest on the Senior Notes is payable semi-annually

in arrears on June 24 and December 24 of each year, beginning on December 24, 2024. The Senior Notes are redeemable at any time at the applicable redemption price prior to the maturity date. The net proceeds of this issuance were used for general corporate purposes.

36 www.allstate.com

Notes to Condensed Consolidated Financial Statements


Note 13			Company Restructuring

The Company undertakes various programs to reduce expenses. These programs generally involve a reduction in staffing levels, and in certain cases, office closures. Restructuring and related charges primarily include the following costs related to these programs:

•Employee - severance and relocation benefits

•Exit - contract termination penalties and real estate costs primarily related to accelerated amortization of right-of-use assets and related leasehold improvements at facilities to be vacated

The expenses related to these activities are included in the Condensed Consolidated Statements of Operations as restructuring and related charges and totaled $13 million and $27 million during the three months ended June 30, 2024 and 2023, respectively, and $23 million and $54 million during the six months ended June 30, 2024 and 2023, respectively.

Restructuring expenses during the second quarter and first six months of 2024 primarily relate to implementing actions to achieve a new phase of the organizational transformation component of the Transformative Growth plan, which commenced in the second quarter of 2024. Organizational transformation includes streamlining the organization and outsourcing certain aspects of operations. The Company continues to identify ways to improve operating efficiency and reduce cost which may result in additional restructuring charges in the future.


Organizational transformation
($ in millions)
Expected program charges	$	24
2024 expenses	(20)
Remaining program charges	$	4

These charges are primarily recorded in the Allstate Protection segment. The Company expects these actions will be completed in the first half of 2025.


Restructuring activity during the period
($ in millions)	Employee costs		Exit costs		Total liability
Restructuring liability as of December 31, 2023	$	40	$	1	$	41
Expense incurred	25		9		34
Adjustments to liability	(11)		—		(11)
Payments and non-cash charges	(21)		(9)		(30)
Restructuring liability as of June 30, 2024	$	33	$	1	$	34

As of June 30, 2024, the cumulative amount incurred to date for active programs related to employee severance, relocation benefits and exit expenses totaled $107 million for employee costs and $7 million for exit costs.


Note 14			Guarantees and Contingent Liabilities

Shared markets and state facility assessments

The Company is required to participate in assigned risk plans, reinsurance facilities and joint underwriting associations in various states that provide insurance coverage to individuals or entities that otherwise are unable to purchase such coverage from private insurers.

The Company routinely reviews its exposure to assessments from these plans, facilities and government programs. Underwriting results related to these arrangements, which tend to be adverse, have been immaterial to the Company’s results of operations in the last two years. Because of the Company’s participation, it may be exposed to losses that surpass the capitalization of these facilities or assessments from these facilities.

Guarantees

In the normal course of business, the Company provides standard indemnifications to contractual counterparties in connection with numerous transactions, including acquisitions and divestitures. The types of indemnifications typically provided include indemnifications for breaches of representations and warranties, taxes and certain

other liabilities, such as third-party lawsuits. The indemnification clauses are often standard contractual terms and are entered into in the normal course of business based on an assessment that the risk of loss would be remote. The terms of the indemnifications vary in duration and nature. In many cases, the maximum obligation is not explicitly stated and the contingencies triggering the obligation to indemnify have not occurred and are not expected to occur. Consequently, the maximum amount of the obligation under such indemnifications is not determinable. Historically, the Company has not made any material payments pursuant to these obligations.

Related to the sale of ALNY on October 1, 2021, AIC agreed to indemnify Wilton Reassurance Company in connection with certain representations, warranties and covenants of AIC, and certain liabilities specifically excluded from the transaction, subject to specific contractual limitations regarding AIC’s maximum obligation. Management does not believe these indemnifications will have a material effect on results of operations, cash flows or financial position of the Company.

Related to the sale of ALIC and Allstate Assurance Company on November 1, 2021, AIC and Allstate

Second Quarter 2024 Form 10-Q 37

Notes to Condensed Consolidated Financial Statements

Financial Insurance Holdings Corporation (collectively, the “Sellers”) agreed to indemnify Everlake US Holdings Company in connection with certain representations, warranties and covenants of the Sellers, and certain liabilities specifically excluded from the transaction, subject to specific contractual limitations regarding the Sellers’ maximum obligation. Management does not believe these indemnifications will have a material effect on results of operations, cash flows or financial position of the Company.

The aggregate liability balance related to all guarantees was not material as of June 30, 2024.

Regulation and compliance

The Company is subject to extensive laws, regulations, administrative directives, and regulatory actions. From time to time, regulatory authorities or legislative bodies seek to influence and restrict premium rates, require premium refunds to policyholders, require reinstatement of terminated policies, prescribe rules or guidelines on how affiliates compete in the marketplace, restrict the ability of insurers to cancel or non-renew policies, require insurers to continue to write new policies or limit their ability to write new policies, limit insurers’ ability to change coverage terms or to impose underwriting standards, impose additional regulations regarding agency and broker compensation, regulate the nature of and amount of investments, impose fines and penalties for unintended errors or mistakes, impose additional regulations regarding cybersecurity and privacy, and otherwise expand overall regulation of insurance products and the insurance industry. In addition, the Company is subject to laws and regulations administered and enforced by federal agencies, international agencies, and other organizations, including but not limited to the SEC, the Financial Industry Regulatory Authority, the U.S. Equal Employment Opportunity Commission, and the U.S. Department of Justice. The Company has established procedures and policies to facilitate compliance with laws and regulations, to foster prudent business operations, and to support financial reporting. The Company routinely reviews its practices to validate compliance with laws and regulations and with internal procedures and policies. As a result of these reviews, from time to time the Company may decide to modify some of its procedures and policies. Such modifications, and the reviews that led to them, may be accompanied by payments being made and costs being incurred. The ultimate changes and eventual effects of these actions on the Company’s business, if any, are uncertain.

Legal and regulatory proceedings and inquiries

The Company and certain subsidiaries are involved in a number of lawsuits, regulatory inquiries, and other legal proceedings arising out of various aspects of its business.

Background These matters raise difficult and complicated factual and legal issues and are subject to many uncertainties and complexities, including the underlying facts of each matter; novel legal issues; variations between jurisdictions in which matters are

being litigated, heard, or investigated; changes in assigned judges; differences or developments in applicable laws and judicial interpretations; judges reconsidering prior rulings; the length of time before many of these matters might be resolved by settlement, through litigation, or otherwise; adjustments with respect to anticipated trial schedules and other proceedings; developments in similar actions against other companies; the fact that some of the lawsuits are putative class actions in which a class has not been certified and in which the purported class may not be clearly defined; the fact that some of the lawsuits involve multi-state class actions in which the applicable law(s) for the claims at issue is in dispute and therefore unclear; and the challenging legal environment faced by corporations and insurance companies.

The outcome of these matters may be affected by decisions, verdicts, and settlements, and the timing of such decisions, verdicts, and settlements, in other individual and class action lawsuits that involve the Company, other insurers, or other entities and by other legal, governmental, and regulatory actions that involve the Company, other insurers, or other entities. The outcome may also be affected by future state or federal legislation, the timing or substance of which cannot be predicted.

In the lawsuits, plaintiffs seek a variety of remedies which may include equitable relief in the form of injunctive and other remedies and monetary relief in the form of contractual and extra-contractual damages. In some cases, the monetary damages sought may include punitive or treble damages. Often specific information about the relief sought, such as the amount of damages, is not available because plaintiffs have not requested specific relief in their pleadings. When specific monetary demands are made, they are often set just below a state court jurisdictional limit in order to seek the maximum amount available in state court, regardless of the specifics of the case, while still avoiding the risk of removal to federal court. In Allstate’s experience, monetary demands in pleadings bear little relation to the ultimate loss, if any, to the Company.

In connection with regulatory examinations and proceedings, government authorities may seek various forms of relief, including penalties, restitution, and changes in business practices. The Company may not be advised of the nature and extent of relief sought until the final stages of the examination or proceeding.

Accrual and disclosure policy The Company reviews its lawsuits, regulatory inquiries, and other legal proceedings on an ongoing basis and follows appropriate accounting guidance when making accrual and disclosure decisions. The Company establishes accruals for such matters at management’s best estimate when the Company assesses that it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. The Company does not establish accruals for such matters when the Company does not believe both that it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. The Company’s

38 www.allstate.com

Notes to Condensed Consolidated Financial Statements

assessment of whether a loss is reasonably possible or probable is based on its assessment of the ultimate outcome of the matter following all appeals. The Company does not include potential recoveries in its estimates of reasonably possible or probable losses. Legal fees are expensed as incurred.

The Company continues to monitor its lawsuits, regulatory inquiries, and other legal proceedings for further developments that would make the loss contingency both probable and estimable, and accordingly accruable, or that could affect the amount of accruals that have been previously established. There may continue to be exposure to loss in excess of any amount accrued. Disclosure of the nature and amount of an accrual is made when there have been sufficient legal and factual developments such that the Company’s ability to resolve the matter would not be impaired by the disclosure of the amount of accrual.

When the Company assesses it is reasonably possible or probable that a loss has been incurred, it discloses the matter. When it is possible to estimate the reasonably possible loss or range of loss above the amount accrued, if any, for the matters disclosed, that estimate is aggregated and disclosed. Disclosure is not required when an estimate of the reasonably possible loss or range of loss cannot be made.

For certain of the matters described below in the “Claims related proceedings” and “Other proceedings” subsections, the Company is able to estimate the reasonably possible loss or range of loss above the amount accrued, if any. In determining whether it is possible to estimate the reasonably possible loss or range of loss, the Company reviews and evaluates the disclosed matters, in conjunction with counsel, in light of potentially relevant factual and legal developments.

These developments may include information learned through the discovery process, rulings on dispositive motions, settlement discussions, information obtained from other sources, experience from managing these and other matters, and other rulings by courts, arbitrators or others. When the Company possesses sufficient appropriate information to develop an estimate of the reasonably possible loss or range of loss above the amount accrued, if any, that estimate is aggregated and disclosed below. There may be other disclosed matters for which a loss is probable or reasonably possible, but such an estimate is not possible. Disclosure of the estimate of the reasonably possible loss or range of loss above the amount accrued, if any, for any individual matter would only be considered when there have been sufficient legal and factual developments such that the Company’s ability to resolve the matter would not be impaired by the disclosure of the individual estimate.

The Company currently estimates that the aggregate range of reasonably possible loss in excess of the amount accrued, if any, for the disclosed matters where such an estimate is possible is zero to $69 million, pre-tax. This disclosure is not an indication of expected loss, if any. Under accounting guidance, an event is “reasonably possible” if “the chance of the future event or events occurring is more than remote

but less than likely” and an event is “remote” if “the chance of the future event or events occurring is slight.” This estimate is based upon currently available information and is subject to significant judgment and a variety of assumptions and known and unknown uncertainties. The matters underlying the estimate will change from time to time, and actual results may vary significantly from the current estimate. The estimate does not include matters or losses for which an estimate is not possible. Therefore, this estimate represents an estimate of possible loss only for certain matters meeting these criteria. It does not represent the Company’s maximum possible loss exposure. Information is provided below regarding the nature of all of the disclosed matters and, where specified, the amount, if any, of plaintiff claims associated with these loss contingencies.

Due to the complexity and scope of the matters disclosed in the “Claims related proceedings” and “Other proceedings” subsections below and the many uncertainties that exist, the ultimate outcome of these matters cannot be predicted and in the Company’s judgment, a loss, in excess of amounts accrued, if any, is not probable. In the event of an unfavorable outcome in one or more of these matters, the ultimate liability may be in excess of amounts currently accrued, if any, and may be material to the Company’s operating results or cash flows for a particular quarterly or annual period. However, based on information currently known to it, management believes that the ultimate outcome of all matters described below, as they are resolved over time, is not likely to have a material effect on the financial position of the Company.

Claims related proceedings The Company is defending various disputes in Florida that raise challenges to the Company’s practices, processes, and procedures relating to claims for personal injury protection benefits under Florida auto policies. Medical providers continue to pursue litigation under various theories that challenge the amounts that the Company pays under the personal injury protection coverage, seeking additional benefit payments, as well as applicable interest, penalties and fees. In one such lawsuit, Revival Chiropractic v. Allstate Insurance Company, et al. (M.D. Fla. filed January 2019), the federal district court denied class certification and plaintiff’s request to file a renewed motion for class certification. In Revival, on June 2, 2022, the Eleventh Circuit certified to the Florida Supreme Court Allstate’s appeal of the federal district court’s interpretation of the state personal injury protection statute. The Eleventh Circuit held determination on plaintiff’s class certification appeal pending the outcome of the Florida Supreme Court certification. The oral argument before the Florida Supreme Court was on March 8, 2023. On April 25, 2024, the Florida Supreme Court issued a decision in the Company’s favor, finding that the Company’s practice with respect to its payment of certain medical provider charges is consistent with the Company’s policy language and with the state personal injury protection statute. On May 24, 2024, the Eleventh Circuit entered an order dismissing plaintiff’s class certification appeal and directing the federal district court to enter summary judgment in favor of

Second Quarter 2024 Form 10-Q 39

Notes to Condensed Consolidated Financial Statements

Allstate. On July 2, 2024, the federal district court entered judgment in Allstate’s favor.

The Company is defending putative class actions in various courts that raise challenges to the Company’s depreciation practices in homeowner property claims. In these lawsuits, plaintiffs generally allege that, when calculating actual cash value, the costs of “non-materials” such as labor, general contractor’s overhead and profit, and sales tax should not be subject to depreciation. The Company is currently defending the following lawsuits on this issue: Sims, et al. v. Allstate Fire and Casualty Insurance Company, et al. (W.D. Tex. filed June 2022); Thompson, et al. v. Allstate Insurance Company (Circuit Court of Cole Co., Mo. filed June 2022); Hill v. Allstate Vehicle and Property Insurance Company (Circuit Court of Cole Co., Mo. filed October 2022); and Hernandez v. Allstate Vehicle and Property Insurance Company (D. Ariz. filed April 2023). No classes have been certified in any of these matters.

The Company is defending putative class actions pending in multiple states alleging that the Company underpays total loss vehicle physical damage claims on auto policies. The alleged systematic underpayments result from the following theories: (a) the third-party valuation tool used by the Company as part of a comprehensive adjustment process is allegedly flawed, biased, or contrary to applicable law; and/or (b) the Company allegedly does not pay sales tax, title fees, registration fees, and/or other specified fees that are allegedly mandatory under policy language or state legal authority.

The Company is currently defending the following lawsuits: Kronenberg v. Allstate Insurance Company and Allstate Fire and Casualty Insurance Company (E.D.N.Y. filed December 2018); Durgin v. Allstate Property and Casualty Insurance Company (W.D. La. filed June 2019); Golla v. Allstate Insurance Company (N.D. Ohio filed June 2023); Bibbs v. Allstate Insurance Company and Allstate Fire and Casualty Insurance Company (N.D. Ohio filed August 2023); Hail v. Allstate Property and Casualty Insurance Company (State Court of Habersham Co., Ga. filed December 2023); Katz v. Esurance Property and Casualty Insurance Company and National General Insurance Company (E.D.N.Y. filed February 2024); and Jarrett-Kelly v. Direct General Insurance Agency, Inc. (Circuit Court of Pulaski Co., Ark. filed May 2024). No classes have been certified in any of these matters.

Settlements in principle have been reached in the following cases: Bass v. Imperial Fire and Casualty Insurance Company (W.D. La. filed February 2022); and Cummings v. Allstate Property and Casualty Insurance Company (M.D. La. filed April 2022).

The Company is defending putative class actions in the U.S. District Court for the District of Arizona that allege underpayment of uninsured/underinsured motorist claims. The lawsuits are Dorazio v. Allstate Fire and Casualty Insurance Company and Loughran v. MIC General Insurance Corporation, each filed December 2022. The plaintiffs allege that uninsured/underinsured motorist coverages must be stacked

where the defendants allegedly did not include specified policy language and did not provide specified notice to policyholders. No classes have been certified in these matters. In July 2023, the Arizona Supreme Court issued a ruling in Franklin v. CSAA General Insurance, a matter involving another insurer. The Franklin decision held, under the factual circumstances of that case, that stacking of uninsured/underinsured motorist coverages was required because the insurer did not include specified policy language and did not issue specified notice.

Other proceedings The Company has an investigatory hearing before the California Insurance Commissioner concerning the private passenger automobile insurance rating practices of Allstate Insurance Company and Allstate Indemnity Company in California. The investigatory hearing is captioned: In the Matter of the Rating Practices of Allstate Insurance Company and Allstate Indemnity Company. Pursuant to the Notice of Hearing issued by the California Insurance Commissioner, the California Insurance Commissioner is investigating: (1) whether Allstate has potentially violated California insurance law by using illegal price optimization; (2) how Allstate implemented any such potentially illegal price optimization in its private passenger auto insurance rates and/or class plans; and (3) how such potentially illegal price optimization impacted Allstate’s private passenger auto insurance policyholders. Allstate and the California Department of Insurance have reached an agreement in principle to resolve the investigatory hearing.

The Company is defending two putative class actions in the U.S. District Court for the Eastern District of California, Holland Hewitt v. Allstate Life Insurance Company filed May 2020, and Farley v. Lincoln Benefit Life Company (“LBL”) filed December 2020, following the sale of ALIC. On April 19, 2023, the district court certified a class in Farley. LBL is appealing the district court’s order in the Ninth Circuit Court of Appeals. On March 27, 2024, the Magistrate Judge issued his Findings and Recommendations denying class certification in Hewitt. Plaintiffs filed their objection to the Magistrate’s recommendation. In these cases, plaintiffs generally allege that the defendants failed to comply with certain California statutes which address contractual grace periods and lapse notice requirements for certain life insurance policies. Plaintiffs claim that these statutes apply to life insurance policies that existed before the statutes’ effective date. The plaintiffs seek damages and injunctive relief. Similar litigation is pending against other insurance carriers. In August 2021, the California Supreme Court in McHugh v. Protective Life, a matter involving another insurer, determined that the statutory notice requirements apply to life insurance policies issued before the statutes’ effective date. The Company asserts various defenses to plaintiffs’ claims and to class certification.

The Company is defending a lawsuit in the U.S. District Court for the Southern District of California, Chavez v. Allstate Northbrook Indemnity Company, filed February 2022, where plaintiffs generally allege that

40 www.allstate.com

Notes to Condensed Consolidated Financial Statements

Allstate’s Shelter In Place Payback program provided insufficient premium relief in response to the reduction in driving in California during the state’s COVID-19 stay-at-home restrictions in 2020 and 2021. Plaintiffs seek damages that include additional premium refunds and punitive damages. On June 25, 2024, the court issued an order granting plaintiffs’ motion for class certification. The Company continues to defend the litigation and oppose plaintiffs’ allegations.

On July 24, 2024, the Department of Justice filed a civil suit in the U.S. District Court for the Western

District of Pennsylvania against National General Holdings Corp., National General Insurance Company, National General Lender Services, Inc., and Newport Management Corp. The suit alleges that certain services that National General provided as a vendor to a large national bank for its collateral protection insurance program violated the Financial Institutions, Reform, Recovery, and Enforcement Act of 1989 (the “Act”), and it seeks civil monetary penalties available under the Act.


Note 15			Benefit Plans

For the second quarter and first six months of 2024, service cost includes a $38 million refund of premiums previously paid to the Pension Benefit Guaranty Corporation (“PBGC”). The PBGC insures defined benefit plans offered by private-sector employers. PBGC premiums are required to be paid annually and are calculated using a predefined calculation that includes interest rates to discount a plan’s vested benefits. During the second quarter of 2024, the Company’s defined benefit pension plan elected to use an alternative methodology to calculate the prescribed interest rate in determining premiums for plan year 2023, which resulted in a refund of $38 million in previously paid premiums.


Components of net cost (benefit) for pension and other postretirement plans
	Three months ended June 30,				Six months ended June 30,
($ in millions)	2024		2023		2024		2023
Pension benefits
Service cost	$	(7)	$	32	$	26	$	65
Interest cost	58		58		116		118
Expected return on plan assets	(76)		(79)		(153)		(156)


Costs and expenses	(25)		11		(11)		27
Remeasurement of projected benefit obligation	(68)		(68)		(93)		55
Remeasurement of plan assets	60		30		85		(150)
Remeasurement (gains) losses	(8)		(38)		(8)		(95)
Pension net benefit	$	(33)	$	(27)	$	(19)	$	(68)

Postretirement benefits
Service cost	$	—	$	—	$	—	$	—
Interest cost	3		2		5		5
Amortization of prior service credit	(1)		(6)		(1)		(12)

Costs and expenses	2		(4)		4		(7)
Remeasurement of projected benefit obligation	(1)		(2)		(3)		2
Remeasurement of plan assets	—		—		—		—
Remeasurement (gains) losses	(1)		(2)		(3)		2
Postretirement net cost (benefit)	$	1	$	(6)	$	1	$	(5)

Pension and postretirement benefits
Costs and expenses	$	(23)	$	7	$	(7)	$	20
Remeasurement (gains) losses	(9)		(40)		(11)		(93)
Total net benefit	$	(32)	$	(33)	$	(18)	$	(73)

Differences in actual experience and changes in other assumptions affect our pension and other postretirement obligations and expenses. Differences between expected and actual returns on plan assets affect remeasurement (gains) losses.

Pension and other postretirement service cost, interest cost, expected return on plan assets and

amortization of prior service credit are reported in property and casualty insurance claims and claims expense, operating costs and expenses, net investment income and (if applicable) restructuring and related charges on the Condensed Consolidated Statements of Operations.

Second Quarter 2024 Form 10-Q 41

Notes to Condensed Consolidated Financial Statements


Pension and postretirement benefits remeasurement gains and losses
	Three months ended June 30,				Six months ended June 30,
($ in millions)	2024		2023		2024		2023
Remeasurement of projected benefit obligation (gains) losses:
Discount rate	$	(57)	$	(73)	$	(98)	$	51
Other assumptions	(12)		3		2		6
Remeasurement of plan assets (gains) losses	60		30		85		(150)
Remeasurement (gains) losses	$	(9)	$	(40)	$	(11)	$	(93)

Remeasurement gains for the second quarter of 2024 primarily related to an increase in the liability discount rate and changes in other assumptions, partially offset by unfavorable asset performance compared to expected return on plan assets. Remeasurement gains in the first six months of 2024 primarily related to an increase in the liability discount rate, partially offset by unfavorable asset performance compared to expected return on plan assets.

The weighted average discount rate used to measure the pension benefit obligation increased to

5.62% at June 30, 2024 compared to 5.45% at March 31, 2024 and 5.35% at December 31, 2023 resulting in gains for the second quarter and first six months of 2024.

For the second quarter and first six months of 2024, the actual return on plan assets was lower than the expected return due to lower fixed income valuations from higher market yields, partially offset by higher public equity returns.


Note 16			Supplemental Cash Flow Information

Non-cash investing activities include $58 million and $53 million related to mergers and exchanges completed with equity securities, fixed income securities, bank loans, and limited partnerships for the six months ended June 30, 2024 and 2023, respectively. Non-cash investing activities include $18 million related to right-of-use property and equipment obtained in exchange for lease obligations for the six months ended June 30, 2024. Non-cash investing activities include $15 million related to right-of-use real estate obtained in exchange for lease obligations and $51 million related to debt assumed by purchaser on sale of real estate for the six months ended June 30, 2023.

Non-cash financing activities include $27 million and $37 million related to the issuance of Allstate common shares for vested equity awards for the six months ended June 30, 2024 and 2023, respectively.

Cash flows used in operating activities in the Condensed Consolidated Statements of Cash Flows include cash paid for operating leases related to amounts included in the measurement of lease liabilities of $58 million and $66 million for the six months ended June 30, 2024 and 2023, respectively. Non-cash operating activities include $22 million and $6 million related to right-of-use assets obtained in exchange for lease obligations for the six months ended June 30, 2024 and 2023, respectively.

Liabilities for collateral received in conjunction with the Company’s securities lending program and OTC and cleared derivatives are reported in other liabilities and accrued expenses or other investments. The accompanying cash flows are included in cash flows from operating activities in the Condensed Consolidated Statements of Cash Flows along with the activities resulting from management of the proceeds, as follows:


($ in millions)	Six months ended June 30,
	2024		2023
Cash flows from operating activities
Net change in proceeds managed
Net change in fixed income securities	$	80	$	202
Net change in short-term investments	(190)		18
Operating cash flow (used) provided	$	(110)	$	220



Net change in liabilities
Liabilities for collateral, beginning of period	$	(1,891)	$	(2,011)
Liabilities for collateral, end of period	(2,001)		(1,791)
Operating cash flow provided (used)	$	110	$	(220)

42 www.allstate.com

Notes to Condensed Consolidated Financial Statements


Note 17			Other Comprehensive Income (Loss)


Components of other comprehensive income (loss) on a pre-tax and after-tax basis
($ in millions)	Three months ended June 30,
	2024						2023
	Pre-tax		Tax		After-tax		Pre-tax		Tax		After-tax
Unrealized net holding gains and losses arising during the period, net of related offsets	$	(260)	$	56	$	(204)	$	(472)	$	96	$	(376)
Less: reclassification adjustment of realized capital gains and losses	(108)		23		(85)		(131)		27		(104)
Unrealized net capital gains and losses	(152)		33		(119)		(341)		69		(272)
Unrealized foreign currency translation adjustments	(29)		6		(23)		36		(8)		28
Unamortized pension and other postretirement prior service credit (1)	(1)		1		—		(6)		1		(5)
Discount rate for reserve for future policy benefits	(1)		—		(1)		10		(2)		8
Other comprehensive (loss) income	$	(183)	$	40	$	(143)	$	(301)	$	60	$	(241)

	Six months ended June 30,
	2024						2023
	Pre-tax		Tax		After-tax		Pre-tax		Tax		After-tax
Unrealized net holding gains and losses arising during the period, net of related offsets	$	(635)	$	136	$	(499)	$	257	$	(60)	$	197
Less: reclassification adjustment of realized capital gains and losses	(209)		44		(165)		(269)		56		(213)
Unrealized net capital gains and losses	(426)		92		(334)		526		(116)		410
Unrealized foreign currency translation adjustments	(19)		4		(15)		99		(21)		78
Unamortized pension and other postretirement prior service credit (1)	(2)		1		(1)		(12)		3		(9)
Discount rate for reserve for future policy benefits	31		(7)		24		(1)		—		(1)
Other comprehensive (loss) income	$	(416)	$	90	$	(326)	$	612	$	(134)	$	478

(1) Represents prior service credits reclassified out of other comprehensive income and amortized into operating costs and expenses.

Second Quarter 2024 Form 10-Q 43

Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Directors of

The Allstate Corporation

Results of Review of Interim Financial Information

We have reviewed the accompanying condensed consolidated statement of financial position of The Allstate Corporation and subsidiaries (the “Company”) as of June 30, 2024, the related condensed consolidated statements of operations, comprehensive income (loss), and shareholders’ equity for the three-month and six-month periods ended June 30, 2024 and 2023, and of cash flows for the six-month periods ended June 30, 2024 and 2023, and the related notes (collectively referred to as the “interim financial information”). Based on our reviews, we are not aware of any material modifications that should be made to the accompanying interim financial information for it to be in conformity with accounting principles generally accepted in the United States of America.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated statement of financial position of the Company as of December 31, 2023, and the related consolidated statements of operations, comprehensive income (loss), shareholders’ equity, and cash flows for the year then ended (not presented herein); and in our report dated February 21, 2024, we expressed an unqualified opinion on those consolidated financial statements and included an explanatory paragraph regarding a change in accounting principle for the measurement and disclosure of long-duration insurance contracts. In our opinion, the information set forth in the accompanying condensed consolidated statement of financial position as of December 31, 2023, is fairly stated, in all material respects, in relation to the consolidated statement of financial position from which it has been derived.

Basis for Review Results

This interim financial information is the responsibility of the Company's management. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our reviews in accordance with standards of the PCAOB. A review of the interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

/s/ Deloitte & Touche LLP

Chicago, Illinois

July 31, 2024

44 www.allstate.com

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview

The following discussion highlights significant factors influencing the consolidated financial position and results of operations of The Allstate Corporation (referred to in this document as “we,” “our,” “us,” the “Company” or “Allstate”). It should be read in conjunction with the condensed consolidated financial statements and related notes thereto found under Part I. Item 1. contained herein, and with the discussion, analysis, consolidated financial statements and notes thereto in Part I. Item 1. and Part II. Item 7. and Item 8. of The Allstate Corporation annual report on Form 10-K for 2023, filed February 21, 2024.

Further analysis of our insurance segments is provided in the Property-Liability Operations and Segment Results sections, including Allstate Protection and Run-off Property-Liability, Protection Services and Allstate Health and Benefits, of Management’s Discussion and Analysis (“MD&A”). The segments are consistent with the way in which the chief operating decision maker reviews financial performance and makes decisions about the allocation of resources.

On November 1, 2023, we announced that we are pursuing the sale of the Health and Benefits business. We continue to pursue the sale of the business but have not completed the sale process.

Macroeconomic Impacts

Macroeconomic factors have and may continue to impact the results of our operations, financial condition and liquidity, such as U.S. government fiscal and monetary policies, the Russia/Ukraine and Israel/Hamas conflicts, supply chain disruptions, labor shortages and other factors that have increased inflation.

These factors have affected our operations and may continue to affect our results of operations, financial condition and liquidity and should be considered when comparing the current period to prior periods. This is not inclusive of all potential impacts and should not be treated as such. Within the MD&A, we have included further disclosures related to macroeconomic impacts on our 2024 results.

Corporate Strategy

Our strategy has two components: increase personal property-liability market share and expand protection offerings by leveraging the Allstate brand, customer base and capabilities.

Transformative Growth is about creating a business model, capabilities and culture that continually transform to better serve customers. This is done by providing affordable, simple and connected protection through multiple distribution methods. The ultimate objective is to enhance customer value to drive growth in all businesses.

In the personal property-liability businesses, this has five key components:

•Improving customer value

•Expanding customer access

•Increasing sophistication and investment in customer acquisition

•Deploying new technology ecosystem

•Driving organizational transformation

We are expanding protection services businesses utilizing enterprise capabilities and resources such as the Allstate brand, distribution, analytics, claims, investment expertise, talent and capital.

Measuring segment profit or loss

Underwriting income is calculated as premiums earned and other revenue, less claims and claims expense (“losses”), amortization of deferred policy acquisition costs (“DAC”), operating costs and expenses, amortization or impairment of purchased intangibles and restructuring and related charges, as determined using accounting principles generally accepted in the United States of America (“GAAP”).

Adjusted net income is net income (loss) applicable to common shareholders, excluding:


•			Net gains and losses on investments and derivatives
•			Pension and other postretirement remeasurement gains and losses
•			Amortization or impairment of purchased intangibles
•			Gain or loss on disposition
•			Adjustments for other significant non-recurring, infrequent or unusual items, when (a) the nature of the charge or gain is such that it is reasonably unlikely to recur within two years, or (b) there has been no similar charge or gain within the prior two years
•			Income tax expense or benefit on reconciling items

Second Quarter 2024 Form 10-Q 45

Highlights

Consolidated net income (loss) applicable to common shareholders

($ in millions)


			Q1						Q2


Consolidated net income applicable to common shareholders was $301 million and $1.49 billion in the second quarter and first six months of 2024, respectively, compared to a loss of $1.39 billion and $1.74 billion in the second quarter and first six months of 2023, respectively, primarily due to improved underwriting results from increased earned premium and improved loss trends. For the twelve months ended June 30, 2024, return on Allstate common shareholders’ equity was 19.3%.

Total revenues

($ in millions)


Total revenues increased 12.4% to $15.71 billion and increased 11.6% to $30.97 billion in the second quarter and first six months of 2024, respectively, compared to the same periods of 2023 due to higher average premium from rate increases and higher net investment income from fixed income securities.

Net investment income

($ in millions)


Net investment income increased $102 million to $712 million in the second quarter of 2024 primarily due to higher market-based investment results, partially offset by lower performance-based investment results. Net investment income increased $291 million to $1.48 billion in the first six months of 2024 compared to the same period of 2023, primarily due to higher market-based and performance-based investment results. Market-based results continue to benefit from portfolio repositioning into higher yielding fixed income securities and higher investment balances.

Financial highlights

Investments totaled $70.60 billion as of June 30, 2024, increasing from $66.68 billion as of December 31, 2023.

Allstate shareholders’ equity was $18.59 billion as of June 30, 2024, increasing from $17.77 billion as of December 31, 2023, primarily due to net income, partially offset by dividends to shareholders and higher unrealized net capital losses on investments.

Book value per diluted common share (ratio of Allstate common shareholders’ equity to total common

shares outstanding and dilutive potential common shares outstanding) was $62.14, an increase of 21.2% from $51.29 as of June 30, 2023, and an increase of 4.6% from $59.39 as of December 31, 2023.

Return on average Allstate common shareholders’ equity for the twelve months ended June 30, 2024 was 19.3%, an increase of 36.5 points from (17.2)% for the twelve months ended June 30, 2023. The increase was primarily due to net income applicable to common shareholders for the trailing twelve-month period ending June 30, 2024 compared to a net loss for the twelve-month period ending June 30, 2023.

46 www.allstate.com

Summarized consolidated financial results


	Three months ended June 30,				Six months ended June 30,
($ in millions)	2024		2023		2024		2023
Revenues
Property and casualty insurance premiums	$	13,952	$	12,470	$	27,464	$	24,643
Accident and health insurance premiums and contract charges	474		453		952		916
Other revenue	679		597		1,348		1,158
Net investment income	712		610		1,476		1,185
Net gains (losses) on investments and derivatives	(103)		(151)		(267)		(137)
Total revenues	15,714		13,979		30,973		27,765

Costs and expenses
Property and casualty insurance claims and claims expense	(10,801)		(11,727)		(20,302)		(22,053)
Accident, health and other policy benefits	(291)		(258)		(587)		(523)
Amortization of deferred policy acquisition costs	(2,001)		(1,789)		(3,940)		(3,533)
Operating, restructuring and interest expenses	(2,130)		(1,911)		(4,122)		(3,740)
Pension and other postretirement remeasurement gains (losses)	9		40		11		93
Amortization of purchased intangibles	(70)		(82)		(139)		(163)

Total costs and expenses	(15,284)		(15,727)		(29,079)		(29,919)

Income (loss) from operations before income tax expense	430		(1,748)		1,894		(2,154)

Income tax (expense) benefit	(83)		373		(349)		458

Net income (loss)	347		(1,375)		1,545		(1,696)

Less: Net income (loss) attributable to noncontrolling interest	16		(23)		(4)		(24)

Net income (loss) attributable to Allstate	331		(1,352)		1,549		(1,672)

Preferred stock dividends	(30)		(37)		(59)		(63)

Net income (loss) applicable to common shareholders	$	301	$	(1,389)	$	1,490	$	(1,735)

Segment highlights

Allstate Protection underwriting loss was $142 million in the second quarter of 2024 compared to underwriting loss of $2.09 billion in the second quarter of 2023 and underwriting income totaled $761 million in the first six months of 2024 compared to an underwriting loss of $3.09 billion in the first six months of 2023, primarily due to increased premiums earned and lower catastrophe losses, partially offset by higher advertising costs. As auto profitability improves, we are increasing advertising and removing underwriting restrictions to support growth.

Catastrophe losses were $2.12 billion and $2.85 billion in the second quarter and first six months of 2024, respectively, compared to $2.70 billion and $4.39 billion in the second quarter and first six months of 2023, respectively.

Premiums written increased 13.1% to $14.28 billion and increased 12.5% to $27.46 billion in the second quarter and first six months of 2024, respectively, compared to the same periods of 2023, reflecting higher premiums in both Allstate and National General brands.

Protection Services adjusted net income was $55 million in the second quarter of 2024 compared to $41 million in the second quarter of 2023, primarily due to revenue growth at Allstate Protection Plans. Adjusted net income was $109 million the first six months of

2024 compared to $75 million in the first six months of 2023, primarily due to growth at Allstate Protection Plans and improved claim severity and lower expenses at Allstate Roadside.

Premiums and other revenue increased 12.3% to $711 million and increased 12.2% to $1.41 billion in the second quarter and first six months of 2024, respectively, compared to the same periods of 2023, primarily due to Allstate Protection Plans.

Allstate Health and Benefits adjusted net income was $58 million in the second quarter of 2024 compared to adjusted net income of $57 million in the second quarter of 2023, primarily due to an increase in group health and employer voluntary benefits, partially offset by a decline in individual health. Adjusted net income was $114 million in the first six months of 2024 compared to $113 million in the first six months of 2023, primarily due to an increase in group health.

Premiums and contract charges increased 4.6% to $474 million in the second quarter of 2024 and increased 3.9% to $952 million in the first six months of 2024 compared to the same periods of 2023, primarily due to growth in group health and individual health. The increase in the first six months of 2024 was partially offset by a decline in employer voluntary benefits.

Second Quarter 2024 Form 10-Q 47

Property-Liability Operations

Overview Property-Liability operations consist of two reportable segments: Allstate Protection and Run-off Property-Liability. These segments are consistent with the groupings of financial information that management uses to evaluate performance and to determine the allocation of resources.

We do not allocate Property-Liability investment income, net gains and losses on investments and derivatives, or assets to the Allstate Protection and Run-off Property-Liability segments. Management reviews assets at the Property-Liability level for decision-making purposes.

GAAP operating ratios are used to measure our profitability to enhance an investor’s understanding of our financial results and are calculated as follows:

•Loss ratio: the ratio of claims and claims expense (loss adjustment expenses), to premiums earned. Loss ratios include the impact of catastrophe losses and prior year reserve reestimates.

•Expense ratio: the ratio of amortization of DAC, operating costs and expenses, amortization or impairment of purchased intangibles and restructuring and related charges, less other revenue to premiums earned.

•Combined ratio: the sum of the loss ratio and the expense ratio.

We have also calculated the following impacts of specific items on the GAAP operating ratios because of the volatility of these items between periods. The impacts are calculated by taking the specific items noted below divided by Property-Liability premiums earned:

•Effect of catastrophe losses on combined ratio: includes catastrophe losses and prior year reserve reestimates of catastrophe losses included in claims and claims expense

•Effect of prior year reserve reestimates on combined ratio

•Effect of amortization of purchased intangibles on combined ratio

•Effect of restructuring and related charges on combined ratio

•Effect of Run-off Property-Liability business on combined ratio: includes claims and claims expense, restructuring and related charges and operating costs and expenses in the Run-off Property-Liability segment

Premium measures and statistics are used to analyze our premium trends and are calculated as follows:

•PIF: policy counts are based on items rather than customers. A multi-car customer would generate multiple item (policy) counts, even if all cars were insured under one policy. Commercial lines PIF counts for shared economy agreements reflected contracts that covered multiple rather than individual drivers. Lender-placed policies are excluded from policy counts because relationships are with the lenders.

•New issued applications: item counts of automobile or homeowner insurance applications for insurance policies that were issued during the period, regardless of whether the customer was previously insured by another Allstate brand.

•Average premium - gross written (“average premium”): gross premiums written divided by issued item count. Gross premiums written include the impacts from discounts, surcharges and ceded reinsurance premiums and exclude the impacts from mid-term premium adjustments and premium refund accruals. Average premiums represent the appropriate policy term for each line.

•Renewal ratio: renewal policy item counts issued during the period, based on contract effective dates, divided by the total policy item counts issued generally 6 months prior for auto or 12 months prior for homeowners.

•Implemented rate changes: represents the impact in the locations (U.S. states, the District of Columbia or Canadian provinces) where rate changes were implemented during the period as a percentage of total brand prior year-end premiums written.

48 www.allstate.com

Property-Liability Operations


Underwriting results
	Three months ended June 30,				Six months ended June 30,
($ in millions, except ratios)	2024		2023		2024		2023
Premiums written	$	14,279	$	12,620	$	27,462	$	24,403
Premiums earned	$	13,339	$	11,921	$	26,239	$	23,556
Other revenue	441		389		871		742
Claims and claims expense	(10,649)		(11,575)		(19,998)		(21,755)
Amortization of DAC	(1,673)		(1,496)		(3,281)		(2,948)
Other costs and expenses	(1,537)		(1,249)		(2,954)		(2,528)
Restructuring and related charges (1)	(15)		(26)		(22)		(47)
Amortization of purchased intangibles	(51)		(58)		(102)		(115)
Underwriting (loss) income	$	(145)	$	(2,094)	$	753	$	(3,095)

Catastrophe losses
Catastrophe losses, excluding reserve reestimates	$	2,258	$	2,665	$	3,151	$	4,398
Catastrophe reserve reestimates (2)	(138)		31		(300)		(11)
Total catastrophe losses	$	2,120	$	2,696	$	2,851	$	4,387

Non-catastrophe reserve reestimates (2)	$	(64)	$	182	$	(53)	$	209
Prior year reserve reestimates (2)	(202)		213		(353)		198

GAAP operating ratios
Loss ratio	79.8		97.1		76.2		92.3
Expense ratio (3)	21.3		20.5		20.9		20.8
Combined ratio	101.1		117.6		97.1		113.1
Effect of catastrophe losses on combined ratio	15.9		22.6		10.9		18.6
Effect of prior year reserve reestimates on combined ratio	(1.5)		1.9		(1.4)		0.8
Effect of catastrophe losses included in prior year reserve reestimates on combined ratio	(1.0)		0.3		(1.1)		(0.1)
Effect of restructuring and related charges on combined ratio (1)	0.1		0.2		0.1		0.2
Effect of amortization of purchased intangibles on combined ratio	0.4		0.5		0.4		0.5
Effect of Run-off Property-Liability business on combined ratio	—		0.1		—		—

(1)Restructuring and related charges for the second quarter and first six months of 2024 primarily relate to implementing a new phase of the organizational transformation component of the Transformative Growth plan. See Note 13 of the condensed consolidated financial statements for additional details.

(2)Favorable reserve reestimates are shown in parentheses.

(3)Other revenue is deducted from operating costs and expenses in the expense ratio calculation.

Second Quarter 2024 Form 10-Q 49

Segment Results Allstate Protection

Allstate Protection Segment


Underwriting results
	Three months ended June 30,				Six months ended June 30,
($ in millions)	2024		2023		2024		2023
Premiums written	$	14,279	$	12,620	$	27,462	$	24,403
Premiums earned	$	13,339	$	11,921	$	26,239	$	23,556
Other revenue	441		389		871		742
Claims and claims expense	(10,647)		(11,574)		(19,992)		(21,752)
Amortization of DAC	(1,673)		(1,496)		(3,281)		(2,948)
Other costs and expenses	(1,536)		(1,248)		(2,952)		(2,526)
Restructuring and related charges	(15)		(26)		(22)		(47)
Amortization of purchased intangibles	(51)		(58)		(102)		(115)
Underwriting (loss) income	$	(142)	$	(2,092)	$	761	$	(3,090)
Catastrophe losses	$	2,120	$	2,696	$	2,851	$	4,387

Underwriting loss was $142 million in the second quarter of 2024 and underwriting income was $761 million in the first six months of 2024 compared to underwriting loss of $2.09 billion and $3.09 billion in the second quarter and first six months of 2023, respectively, due to increased premiums earned and lower catastrophe losses, partially offset by higher advertising costs. As auto profitability improves, we are increasing advertising and removing underwriting restrictions to support growth.

Change in underwriting results from prior year period - three months ended

($ in millions)

Change in underwriting results from prior year period - six months ended

($ in millions)

50 www.allstate.com

Allstate Protection Segment Results


Underwriting income (loss) by brand and by line of business
	Allstate brand				National General				Allstate Protection
($ in millions)	2024		2023		2024		2023		2024		2023
Three months ended June 30,
Auto	$	231	$	(546)	$	139	$	(132)	$	370	$	(678)
Homeowners	(258)		(1,195)		(117)		(112)		(375)		(1,307)
Other personal lines	(53)		(70)		(2)		—		(55)		(70)
Commercial lines	(144)		(60)		6		(1)		(138)		(61)
Other business lines (1)	35		24		17		(3)		52		21
Answer Financial									4		3
Total	$	(189)	$	(1,847)	$	43	$	(248)	$	(142)	$	(2,092)

Six months ended June 30,
Auto	$	492	$	(878)	$	229	$	(146)	$	721	$	(1,024)
Homeowners	310		(1,703)		(121)		(138)		189		(1,841)
Other personal lines	(51)		(160)		3		1		(48)		(159)
Commercial lines	(213)		(124)		5		3		(208)		(121)
Other business lines (1)	63		46		37		4		100		50
Answer Financial									7		5
Total	$	601	$	(2,819)	$	153	$	(276)	$	761	$	(3,090)

(1)Other business lines represents commissions earned and other costs and expenses for Ivantage, non-proprietary life and annuity products, and lender-placed products.

Second Quarter 2024 Form 10-Q 51

Segment Results Allstate Protection

Premium measures and statistics include PIF, new issued applications, average premiums and renewal ratio to analyze our premium trends. Premiums written is the amount of premiums charged for policies issued during a reporting period. Premiums are considered earned and are included in the financial results on a pro-rata basis over the policy period. The portion of premiums written applicable to the unexpired term of the policies is recorded as unearned premiums on our Condensed Consolidated Statements of Financial Position.


Premiums written by brand and by line of business
	Allstate brand				National General				Allstate Protection
($ in millions)	2024		2023		2024		2023		2024		2023
Three months ended June 30,
Auto	$	7,488	$	6,821	$	1,796	$	1,448	$	9,284	$	8,269
Homeowners	3,349		2,937		496		444		3,845		3,381
Other personal lines	678		621		167		54		845		675
Commercial lines	60		146		90		54		150		200
Other business lines	—		—		155		95		155		95
Total premiums written	$	11,575	$	10,525	$	2,704	$	2,095	$	14,279	$	12,620

Six months ended June 30,
Auto	$	14,887	$	13,647	$	3,754	$	2,971	$	18,641	$	16,618
Homeowners	5,866		5,147		853		768		6,719		5,915
Other personal lines	1,197		1,113		308		110		1,505		1,223
Commercial lines	134		323		173		104		307		427
Other business lines	—		—		290		220		290		220
Total premiums written	$	22,084	$	20,230	$	5,378	$	4,173	$	27,462	$	24,403


Premiums earned by brand and by line of business
	Allstate brand				National General				Allstate Protection
($ in millions)	2024		2023		2024		2023		2024		2023
Three months ended June 30,
Auto	$	7,363	$	6,772	$	1,716	$	1,349	$	9,079	$	8,121
Homeowners	2,861		2,537		394		346		3,255		2,883
Other personal lines	591		540		110		47		701		587
Commercial lines	82		153		76		49		158		202
Other business lines	—		—		146		128		146		128
Total premiums earned	$	10,897	$	10,002	$	2,442	$	1,919	$	13,339	$	11,921

Six months ended June 30,
Auto	$	14,536	$	13,432	$	3,321	$	2,597	$	17,857	$	16,029
Homeowners	5,628		5,025		781		668		6,409		5,693
Other personal lines	1,155		1,061		205		88		1,360		1,149
Commercial lines	182		336		145		98		327		434
Other business lines	—		—		286		251		286		251
Total premiums earned	$	21,501	$	19,854	$	4,738	$	3,702	$	26,239	$	23,556


Reconciliation of premiums written to premiums earned
	Three months ended June 30,				Six months ended June 30,
($ in millions)	2024		2023		2024		2023
Total premiums written	$	14,279	$	12,620	$	27,462	$	24,403
(Increase) decrease in unearned premiums	(921)		(753)		(1,158)		(880)
Other	(19)		54		(65)		33
Total premiums earned	$	13,339	$	11,921	$	26,239	$	23,556

52 www.allstate.com

Allstate Protection Segment Results


Policies in force by brand and by line of business
	Allstate brand		National General		Allstate Protection
PIF (thousands)	2024	2023	2024	2023	2024	2023
As of June 30,
Auto	19,877	20,821	5,247	4,699	25,124	25,520
Homeowners	6,743	6,614	683	654	7,426	7,268
Other personal lines	4,469	4,574	402	316	4,871	4,890
Commercial lines	105	194	151	113	256	307

Total	31,194	32,203	6,483	5,782	37,677	37,985

Auto insurance premiums written increased 12.3% or $1.02 billion in the second quarter of 2024 compared to the second quarter of 2023 and 12.2% or $2.02 billion in the first six months of 2024 compared to the first six months of 2023, primarily due to the following factors:

•Increased average premiums driven by rate increases. In the six months ended June 30, 2024:

–Rate increases of 7.9% were taken for Allstate brand in 42 locations, resulting in total estimated Allstate brand insurance premium impact of 3.4%

–Rate increases of 11.2% were taken for National General brand in 38 locations, resulting in total estimated National General brand insurance premium impact of 6.1%

•We expect to continue to pursue targeted rate increases for both Allstate and National General brands in states currently not achieving acceptable

returns to offset increases in loss costs throughout 2024

•PIF decreased 1.6% or 396 thousand to 25,124 thousand as of June 30, 2024 compared to June 30, 2023

•Renewal ratio increased 0.2 points and 0.3 points in the second quarter and the first six months of 2024, respectively, compared to the second quarter and first six months of 2023

•Increased new issued applications driven by growth in all channels

•We have removed underwriting restrictions in areas that represent the majority of Allstate brand countrywide premiums, which is expected to increase premiums written and PIF


Auto premium measures and statistics
	Three months ended June 30,						Six months ended June 30,
	2024		2023		Change		2024		2023		Change
New issued applications (thousands)
Allstate Protection by brand
Allstate brand	892		724		23.2	%	1,692		1,475		14.7	%




National General	836		754		10.9		1,706		1,537		11.0




Total new issued applications	1,728		1,478		16.9		3,398		3,012		12.8







Allstate brand average premium	$	841	$	737	14.1	%	$	832	$	732	13.7	%
Allstate brand renewal ratio (%)	85.7		85.5		0.2		85.9		85.6		0.3

Homeowners insurance premiums written increased 13.7% or $464 million in the second quarter of 2024 compared to the second quarter of 2023 and increased 13.6% or $804 million in the first six months of 2024 compared to the first six months of 2023, primarily due to the following factors:

•Higher Allstate brand average premiums from implemented rate increases, combined with policies in force growth

•In the six months ended June 30, 2024, rate increases of 11.6% were taken for Allstate brand in 25 locations, resulting in total estimated Allstate brand insurance premium impact of 4.5%

•National General policy growth may be negatively impacted in future quarters as we improve certain underwriting margins to targeted levels through underwriting and rate actions. In the six months ended June 30, 2024, rate increases of 14.4% were taken for National General brand in 22 locations,

resulting in total estimated National General brand insurance premium impact of 3.9%

•Increased new issued applications driven by growth in the exclusive agency and direct channels

•Policy growth is being reduced in states and lines of business that are underperforming. We are no longer writing new homeowners business in California, New Jersey and Florida, and are non-renewing certain policies in Florida, which have and will continue to negatively impact premiums

•We may not be able to grow in certain states without regulatory or legislative reforms that enable customers to be provided coverage at appropriate risk adjusted returns

•The impact of the ongoing rate increases has and may continue to have an adverse effect on the renewal ratio, premiums and future PIF growth

Second Quarter 2024 Form 10-Q 53

Segment Results Allstate Protection


Homeowners premium measures and statistics
	Three months ended June 30,						Six months ended June 30,
	2024		2023		Change		2024		2023		Change
New issued applications (thousands)
Allstate Protection by brand
Allstate brand	293		234		25.2	%	552		464		19.0	%




National General	41		46		(10.9)		73		81		(9.9)




Total new issued applications	334		280		19.3		625		545		14.7











Allstate brand average premium	$	1,993	$	1,800	10.7	%	$	1,957	$	1,758	11.3	%
Allstate brand renewal ratio (%)	87.2		86.3		0.9		87.2		86.3		0.9

Other personal lines premiums written increased 25.2% or $170 million in the second quarter of 2024 compared to the second quarter of 2023 and increased 23.1% or $282 million in the first six months of 2024 compared to the first six months of 2023 primarily due to increases in involuntary auto policies purchased from other carriers for National General and landlords policies for Allstate brand. We are no longer writing condominium new business in California and Florida, and we are non-renewing certain policies in Florida, which may negatively impact premiums.

Commercial lines premiums written decreased 25.0% or $50 million in the second quarter of 2024 compared to the second quarter of 2023 and decreased 28.1% or $120 million in the first six months of 2024 compared to the first six months of 2023 primarily due to the strategic decision for the Allstate brand to stop writing new business and non-renew

certain policies. We are committed to offering comprehensive commercial products to customers through our exclusive agency and independent agency channels, with solutions offered by the National General brand and NEXT Insurance.

Other business lines premiums written increased 63.2% or $60 million in the second quarter of 2024 compared to the second quarter of 2023 and increased 31.8% or $70 million in the first six months of 2024 compared to the first six months of 2023 due to growth in the lender-placed business.

GAAP operating ratios include loss ratio, expense ratio and combined ratio to analyze our profitability trends. Frequency and severity statistics are used to describe the trends in loss costs.


Combined ratios by line of business
	Loss ratio		Expense ratio (1)		Combined ratio
	2024	2023	2024	2023	2024	2023
Three months ended June 30,
Auto	74.2	87.9	21.7	20.4	95.9	108.3
Homeowners	90.3	125.0	21.2	20.3	111.5	145.3
Other personal lines	92.0	93.5	15.8	18.4	107.8	111.9
Commercial lines	158.8	105.4	28.5	24.8	187.3	130.2
Other business lines	49.3	51.6	15.1	32.0	64.4	83.6

Total	79.8	97.0	21.3	20.5	101.1	117.5
Impact of amortization of purchased intangibles			0.4	0.5	0.4	0.5
Impact of restructuring and related charges			0.1	0.2	0.1	0.2

Six months ended June 30,
Auto	74.8	85.7	21.2	20.7	96.0	106.4
Homeowners	75.6	111.9	21.5	20.4	97.1	132.3
Other personal lines	88.9	93.6	14.6	20.2	103.5	113.8
Commercial lines	136.4	103.7	27.2	24.2	163.6	127.9
Other business lines	46.8	47.4	18.2	32.7	65.0	80.1

Total	76.2	92.3	20.9	20.8	97.1	113.1
Impact of amortization of purchased intangibles			0.4	0.5	0.4	0.5
Impact of restructuring and related charges			0.1	0.2	0.1	0.2

(1)Other revenue is deducted from operating costs and expenses in the expense ratio calculation.

54 www.allstate.com

Allstate Protection Segment Results


Loss ratios by line of business
	Loss ratio		Effect of catastrophe losses (1)		Effect of prior year reserve reestimates		Effect of catastrophe losses included in prior year reserve reestimates
	2024	2023	2024	2023	2024	2023	2024	2023
Three months ended June 30,
Auto	74.2	87.9	3.9	4.2	(2.0)	1.2	(0.1)	(0.2)
Homeowners	90.3	125.0	49.6	75.9	(5.8)	3.2	(3.9)	1.8
Other personal lines	92.0	93.5	17.3	24.2	8.7	0.5	0.2	(0.9)
Commercial lines	158.8	105.4	3.2	4.0	67.7	3.9	(1.2)	1.0
Other business lines	49.3	51.6	15.1	9.4	(0.7)	7.8	—	—
Total	79.8	97.0	15.9	22.6	(1.5)	1.8	(1.0)	0.3

Six months ended June 30,
Auto	74.8	85.7	2.6	2.7	(1.4)	0.5	(0.1)	(0.3)
Homeowners	75.6	111.9	33.9	63.9	(5.9)	1.3	(4.3)	0.8
Other personal lines	88.9	93.6	13.4	24.0	8.3	0.5	(0.1)	(1.1)
Commercial lines	136.4	103.7	1.8	3.9	48.3	7.4	(1.6)	0.7
Other business lines	46.8	47.4	10.1	7.2	1.4	4.4	—	—
Total	76.2	92.3	10.9	18.6	(1.4)	0.8	(1.1)	(0.1)

(1)The ten-year average effect of catastrophe losses on the total combined ratio was 13.5 points in the second quarter of 2024.


Auto underwriting quarterly results

	2024				2023					2022
($ in millions, except ratios)	Q2		Q1			Q4		Q3		Q2		Q1		Q4		Q3		Q2		Q1
Underwriting income (loss)	$	370	$	351		$	93	$	(178)	$	(678)	$	(346)	$	(974)	$	(1,315)	$	(578)	$	(147)
Loss ratio	74.2		75.4			78.5		81.4		87.9		83.4		90.6		95.3		84.9		77.6
Effect of prior year non-catastrophe reserve reestimates on combined ratio	(1.9)		(0.7)			1.7		0.3		1.4		(0.1)		2.3		8.5		3.8		2.1

Frequency and severity are influenced by:

•Supply chain disruptions and labor shortages

•Mix of repairable losses and total losses

•Value of total losses due to changes in used car prices

•Changes in medical inflation and consumption

•Number of claims with attorney representation

•Labor and part cost increases

•Changes in commuting activity

•Driving behavior (e.g., speed, time of day) impacting severity and mix of claim types

•Organizational and process changes impacting claim opening and closing practices and shifts in timing, if any, can impact comparisons to prior periods

The quarterly auto loss ratio has been more variable due to these and additional factors discussed below.

Auto loss ratio decreased 13.7 and 10.9 points in the second quarter and first six months of 2024, respectively, compared to the same periods of 2023 driven by increased earned premiums. Estimated report year 2024 incurred claim severity for Allstate brand increased compared to report year 2023 for major coverages due to higher repair costs, a higher mix of total losses, an increase in claims with attorney representation, higher medical consumption, and

inflation. Gross claim frequency decreased relative to the prior year. We continue to enhance our claims practices to manage loss costs by increasing resources and expanding re-inspections, accelerating resolution of bodily injury claims, and negotiating improved vendor services and parts agreements.

Homeowners loss ratio decreased 34.7 and 36.3 points in the second quarter and first six months of 2024, respectively, compared to the same periods of 2023, primarily due to lower catastrophe losses and increased premiums earned.

Gross claim frequency decreased in the second quarter and first six months of 2024 compared to the same periods of 2023 due to fewer fire claims reported. Paid claim severity increased in the second quarter and first six months of 2024 compared to the same periods of 2023 due to inflationary loss cost pressure driven by increases in labor and materials costs. Homeowners paid claim severity can be impacted by both the mix of perils and the magnitude of specific losses paid during the quarter.

Other personal lines loss ratio decreased 1.5 and 4.7 points in the second quarter and first six months of 2024, respectively, compared to the same periods of 2023 primarily due to increased premiums earned and lower catastrophe losses, partially offset by increased severity.

Second Quarter 2024 Form 10-Q 55

Segment Results Allstate Protection

Commercial lines loss ratio increased 53.4 and 32.7 points in the second quarter and first six months of 2024, respectively, compared to the same periods of 2023, primarily due to higher unfavorable reserve reestimates related to the shared economy business and premiums earned decreasing as a result of the strategic decision for the Allstate brand to stop writing new business and non-renew certain policies.

Other business lines loss ratio decreased 2.3 and 0.6 points in the second quarter and first six months of 2024, respectively, compared to the same periods of 2023, primarily due to increased premiums earned and favorable reserve development, partially offset by higher losses.

Catastrophe losses decreased $576 million to $2.12 billion in the second quarter of 2024 compared to the second quarter of 2023 and decreased $1.54 billion to $2.85 billion in the first six months of 2024 compared to the first six months of 2023, primarily due to lower losses per event compared to historically high levels in the prior year. Favorable prior year reserve reestimates of $138 million and $300 million for the second quarter and first six months of 2024, respectively, were primarily due to reserve reestimates in homeowners lines for 2023 events.

We define a “catastrophe” as an event that produces pre-tax losses before reinsurance in excess of $1 million and involves multiple first party policyholders, or a winter weather event that produces a number of claims in excess of a preset, per-event threshold of average claims in a specific area, occurring within a certain amount of time following the event. Catastrophes are caused by various natural events including high winds, winter storms and freezes, tornadoes, hailstorms, wildfires, tropical storms, tsunamis, hurricanes, earthquakes and volcanoes.

We are also exposed to man-made catastrophic events, such as certain types of terrorism, civil unrest, wildfires or industrial accidents. The nature and level of catastrophes in any period cannot be reliably predicted.

Loss estimates are generally based on claim adjuster inspections and the application of historical loss development factors. Our loss estimates are calculated in accordance with the coverage provided by our policies. The establishment of appropriate reserves, including reserves for catastrophe losses, is an inherently uncertain and complex process. Reserving for hurricane losses is complicated by the inability of insureds to promptly report losses, limitations placed on claims adjusting staff affecting their ability to inspect losses, determining whether losses are covered by our homeowners policy (generally for damage caused by wind or wind driven rain) or specifically excluded coverage caused by flood, exposure to mold damage, and the effects of numerous other considerations, including the timing of a catastrophe in relation to other events, such as at or near the end of a financial reporting period, which can affect the availability of information needed to estimate reserves for that reporting period. In these situations, we may need to adapt our practices to accommodate these circumstances in order to determine a best estimate of our losses from a catastrophe.

Over time, we have limited our aggregate insurance exposure to catastrophe losses in certain regions of the country that are subject to high levels of natural catastrophes by utilizing reinsurance and participating in various state facilities.


Catastrophe losses by the type of event
	Three months ended June 30,						Six months ended June 30,
($ in millions)	Number of events	2024		Number of events	2023		Number of events	2024		Number of events	2023

Tornadoes	1	$	53	1	$	25	1	$	53	3	$	138
Wind/hail	41	2,146		39	2,858		59	2,908		63	4,230
Wildfires	1	20		2	26		3	29		2	26
Freeze/other events	—	—		—	—		1	161		2	4
Prior year reserve reestimates		(138)			31			(300)			(11)


Prior quarter reserve reestimates		39			(244)			—			—
Total catastrophe losses	43	$	2,120	42	$	2,696	64	$	2,851	70	$	4,387

Catastrophe reinsurance The catastrophe reinsurance program is part of our catastrophe management strategy, which is intended to provide our shareholders with an acceptable return on the risks assumed in our personal lines business, reduce earnings variability, and provide protection to our customers. Our current catastrophe reinsurance program supports our risk and return framework which incorporates our robust economic capital model and is informed by catastrophe risk models including hurricanes, earthquakes and wildfires and adjusts based on premium and insured value growth. As of June 30, 2024, the modeled 1-in-100 probable

maximum loss for hurricane, wildfire and earthquake perils is approximately $2.9 billion, net of reinsurance. We continually review our aggregate risk appetite and the cost and availability of reinsurance to optimize the risk and return profile of this exposure.

During the second quarter of 2024, we completed the placement of our 2024-2025 Florida Excess Catastrophe Reinsurance Program (“Florida program”) and the National General Lender Services Standalone Program. Additionally, we placed one single-year term contract as part of our 2024-2025 Nationwide Excess Catastrophe Reinsurance Program, providing $90

56 www.allstate.com

Allstate Protection Segment Results

million of placed limit in excess of a $7.70 billion retention.

Florida program updates Our 2024 Florida program provides coverage for property policies of Castle Key Insurance Company and certain affiliate companies for Florida catastrophe events up to $890 million of loss less a $30 million retention. The Florida program includes reinsurance agreements placed in the traditional market, the Florida Hurricane Catastrophe Fund (“FHCF”) and the insurance-linked securities (“ILS”) market as follows:

•Traditional market placements comprise reinsurance limits for losses to personal lines property in Florida arising out of multiple perils. These contracts provide a combined $310 million of limits, with a portion of the traditional market placements providing coverage for perils not covered by the FHCF contracts, which only cover hurricanes.

•Three FHCF contracts provide $206 million of limits for qualifying losses to personal lines property in Florida caused by storms the National Hurricane Center declares to be hurricanes. The three contracts are 90% placed.

•ILS placements provide $625 million of reinsurance limits for qualifying losses to personal lines property in Florida caused by a named storm event, a severe weather event, an earthquake event, a fire event, a volcanic eruption event, or a meteorite impact event.

National General Lender Services Standalone Program is placed in the traditional market and provides $265 million of coverage, subject to a $70 million retention, with one reinstatement of limits. Inuring contracts include the National General FHCF contract providing $71 million of limits in excess of a $36 million retention, 90% placed.

For a complete summary of the 2024 reinsurance placement, please read this in conjunction with the discussion and analysis in Part I. Item 2. Management’s Discussion and Analysis - Allstate Protection Segment Results, Catastrophe Reinsurance of The Allstate Corporation Form 10-Q for the quarterly period ended March 31, 2024.

The total cost of our property catastrophe reinsurance programs, excluding reinstatement premiums, during the second quarter and first six months of 2024 was $296 million and $582 million, respectively, compared to $242 million and $461 million in the second quarter and first six months of 2023, respectively. Catastrophe placement premiums reduce net written and earned premium with approximately 79% of the reduction related to homeowners premium.

Prior year reserve reestimates Favorable reserve reestimates, including catastrophes, were $204 million and $359 million in the second quarter and first six months of 2024, respectively, primarily due to favorable reserve reestimates in homeowners lines and personal auto lines, partially offset by unfavorable reserve reestimates in commercial lines and other personal lines.

For a more detailed discussion on reinsurance and reserve reestimates, see Note 8 of the condensed consolidated financial statements.


Prior year reserve reestimates
	Three months ended June 30,						Six months ended June 30,
	Prior year reserve reestimates (1)				Effect on combined ratio (2)		Prior year reserve reestimates (1)				Effect on combined ratio (2)
($ in millions, except ratios)	2024		2023		2024	2023	2024		2023		2024	2023
Auto	$	(180)	$	97	(1.3)	0.8	$	(254)	$	72	(1.0)	0.3
Homeowners	(191)		94		(1.4)	0.8	(380)		74		(1.4)	0.3
Other personal lines	61		3		0.4	—	113		6		0.4	—
Commercial lines	107		8		0.8	0.1	158		32		0.6	0.1
Other business lines	(1)		10		—	0.1	4		11		—	0.1
Total Allstate Protection	$	(204)	$	212	(1.5)	1.8	$	(359)	$	195	(1.4)	0.8

Allstate brand	$	(198)	$	36	(1.5)	0.3	$	(375)	$	(18)	(1.5)	(0.1)
National General	(6)		176		—	1.5	16		213		0.1	0.9
Total Allstate Protection	$	(204)	$	212	(1.5)	1.8	$	(359)	$	195	(1.4)	0.8

(1)Favorable reserve reestimates are shown in parentheses.

(2)Ratios are calculated using Allstate Protection premiums earned.

Second Quarter 2024 Form 10-Q 57

Segment Results Allstate Protection

Expense ratio increased 0.8 and 0.1 points in the second quarter and first six months of 2024, respectively, compared to the second quarter and first six months of 2023, primarily due to an increase in advertising costs, partially offset by higher earned premium growth relative to fixed costs.


Impact of specific costs and expenses on the expense ratio
	Three months ended June 30,						Six months ended June 30,
($ in millions, except ratios)	2024		2023		Change		2024		2023		Change
Amortization of DAC	$	1,673	$	1,496	$	177	$	3,281	$	2,948	$	333
Advertising expense	402		113		289		685		271		414
Other costs and expenses, net of other revenue	693		746		(53)		1,396		1,513		(117)
Amortization of purchased intangibles	51		58		(7)		102		115		(13)
Restructuring and related charges	15		26		(11)		22		47		(25)
Total underwriting expenses	$	2,834	$	2,439	$	395	$	5,486	$	4,894	$	592

Premiums earned	$	13,339	$	11,921	$	1,418	$	26,239	$	23,556	$	2,683

Expense ratio
Amortization of DAC	12.6		12.6		—		12.5		12.5		—
Advertising expense	3.0		0.9		2.1		2.6		1.2		1.4
Other costs and expenses, net of other revenue	5.2		6.3		(1.1)		5.3		6.4		(1.1)
Subtotal	20.8		19.8		1.0		20.4		20.1		0.3
Amortization of purchased intangibles	0.4		0.5		(0.1)		0.4		0.5		(0.1)
Restructuring and related charges	0.1		0.2		(0.1)		0.1		0.2		(0.1)
Total expense ratio	21.3		20.5		0.8		20.9		20.8		0.1

58 www.allstate.com

Run-off Property-Liability Segment Results

Run-off Property-Liability Segment


Underwriting results
($ in millions)	Three months ended June 30,				Six months ended June 30,
	2024		2023		2024		2023



Claims and claims expense	$	(2)	$	(1)	$	(6)	$	(3)





Operating costs and expenses	(1)		(1)		(2)		(2)
Underwriting income (loss)	$	(3)	$	(2)	$	(8)	$	(5)


Reserves for asbestos, environmental and other run-off claims before and after the effects of reinsurance
($ in millions)	June 30, 2024		December 31, 2023
Asbestos claims
Gross reserves	$	1,132	$	1,166
Reinsurance	(350)		(362)
Net reserves	782		804
Environmental claims
Gross reserves	322		331
Reinsurance	(63)		(64)
Net reserves	259		267
Other run-off claims
Gross reserves	425		445
Reinsurance	(66)		(72)
Net reserves	359		373
Total
Gross reserves	1,879		1,942
Reinsurance	(479)		(498)
Net reserves	$	1,400	$	1,444


Reserves by type of exposure before and after the effects of reinsurance
($ in millions)	June 30, 2024		December 31, 2023
Direct excess commercial insurance
Gross reserves	$	1,082	$	1,114
Reinsurance	(370)		(382)
Net reserves	712		732
Assumed reinsurance coverage
Gross reserves	576		603
Reinsurance	(53)		(54)
Net reserves	523		549
Direct primary commercial insurance
Gross reserves	136		140
Reinsurance	(55)		(61)
Net reserves	81		79
Other run-off business
Gross reserves	1		1
Reinsurance	—		—
Net reserves	1		1
Unallocated loss adjustment expenses
Gross reserves	84		84
Reinsurance	(1)		(1)
Net reserves	83		83
Total
Gross reserves	1,879		1,942
Reinsurance	(479)		(498)
Net reserves	$	1,400	$	1,444

Second Quarter 2024 Form 10-Q 59

Segment Results Run-off Property-Liability


Percentage of gross and ceded reserves by case and incurred but not reported (“IBNR”)
	June 30, 2024				December 31, 2023
	Case		IBNR		Case		IBNR
Direct excess commercial insurance
Gross reserves (1)	62	%	38	%	57	%	43	%
Ceded (2)	65		35		63		37
Assumed reinsurance coverage
Gross reserves	31		69		32		68
Ceded	39		61		43		57
Direct primary commercial insurance
Gross reserves	58		42		59		41
Ceded	87		13		83		17

(1)Approximately 64% and 68% of gross case reserves as of June 30, 2024 and December 31, 2023, respectively, are subject to settlement agreements.

(2)Approximately 70% and 72% of ceded case reserves as of June 30, 2024 and December 31, 2023, respectively, are subject to settlement agreements.


Gross payments from case reserves by type of exposure
($ in millions)	Three months ended June 30,				Six months ended June 30,
	2024		2023		2024		2023
Direct excess commercial insurance
Gross (1)	$	16	$	9	$	32	$	32
Ceded (2)	(7)		(4)		(13)		(9)
Assumed reinsurance coverage
Gross	21		14		27		19
Ceded	(2)		(2)		(2)		(3)
Direct primary commercial insurance
Gross	2		1		3		2
Ceded	(1)		—		(1)		—

(1)In the second quarter and first six months of 2024 87% and 86% of payments related to settlement agreements, respectively, compared to 79% and 85% of the second quarter and first six months of 2023, respectively.

(2)In the second quarter and first six months of 2024 96% and 93% of payments related to settlement agreements, respectively, compared to 74% and 87% of the second quarter and first six months of 2023, respectively.

Total net reserves as of June 30, 2024, included $698 million or 50% of estimated IBNR reserves compared to $762 million or 53% of estimated IBNR reserves as of December 31, 2023.

Total gross payments were $39 million and $62 million for the second quarter and first six months of 2024, respectively, compared to $24 million and $53 million for the second quarter and first six months of 2023, respectively. Payments primarily related to settlement agreements reached with several insureds on large claims, mainly asbestos related losses, where the scope of coverages has been agreed upon. The claims associated with these settlement agreements are expected to be substantially paid out over the next several years as qualified claims are submitted by these insureds. Reinsurance collections were $15 million and $26 million for the second quarter and first six months of 2024, respectively, compared to $9 million and $24 million for the second quarter and first six months of 2023, respectively.

60 www.allstate.com

Protection Services Segment Results

Protection Services Segment ProtectionServicesLogos - Updated 1.6.23.jpg


Summarized financial information
($ in millions)	Three months ended June 30,				Six months ended June 30,
	2024		2023		2024		2023
Premiums written	$	676	$	658	$	1,303	$	1,277

Revenues
Premiums	$	613	$	549	$	1,225	$	1,087
Other revenue	98		84		183		168
Intersegment insurance premiums and service fees (1)	39		35		74		68
Net investment income	23		18		44		34

Costs and expenses
Claims and claims expense	(157)		(153)		(315)		(306)
Amortization of DAC	(296)		(259)		(585)		(510)
Operating costs and expenses	(246)		(218)		(480)		(439)
Restructuring and related charges	—		—		(1)		(1)

Income tax expense on operations	(19)		(15)		(36)		(26)



Adjusted net income	$	55	$	41	$	109	$	75

Allstate Protection Plans	$	41	$	31	$	81	$	59
Allstate Dealer Services	6		6		12		13
Allstate Roadside	8		6		19		10
Arity	(2)		(3)		(6)		(7)
Allstate Identity Protection	2		1		3		—
Adjusted net income	$	55	$	41	$	109	$	75

Policies in force
Allstate Protection Plans					151,172		138,172
Allstate Dealer Services					3,733		3,825
Allstate Roadside					604		545
Allstate Identity Protection					2,510		3,222
Policies in force as of June 30 (in thousands)					158,019		145,764

(1)Primarily related to Arity and Allstate Roadside and are eliminated in our condensed consolidated financial statements.

Adjusted net income increased 34.1% or $14 million in the second quarter of 2024 compared to the second quarter of 2023, primarily due to revenue growth at Allstate Protection Plans. Adjusted net income increased 45.3% or $34 million in the first six months of 2024 compared to the same period of 2023, due to growth at Allstate Protection Plans and improved claim severity and lower expenses at Allstate Roadside.

Premiums written increased 2.7% or $18 million in the second quarter of 2024 and increased 2.0% or $26 million in the first six months of 2024 compared to the same periods of 2023, primarily due to growth at Allstate Protection Plans, partially offset by lower sales at Allstate Dealer Services and Allstate Roadside.

PIF increased 8.4% or 12 million as of June 30, 2024 compared to June 30, 2023 due to growth at Allstate Protection Plans.

Other revenue increased 16.7% or $14 million in the second quarter of 2024 and increased 8.9% or $15 million in the first six months of 2024 compared to the same periods of 2023, primarily due to higher revenue from increased customer advertising at Arity.

Intersegment premiums and service fees increased 11.4% or $4 million in the second quarter of 2024 and increased 8.8% or $6 million in the first six months of 2024 compared to the same periods of 2023, driven by increased software revenue at Arity.

Second Quarter 2024 Form 10-Q 61

Segment Results Protection Services

Claims and claims expense increased 2.6% or $4 million in the second quarter 2024 and increased 2.9% or $9 million in the first six months of 2024 compared to the same periods of 2023, primarily driven by growth at Allstate Protection Plans, partially offset by lower claim severity at Allstate Roadside.

Amortization of DAC increased 14.3% or $37 million in the second quarter of 2024 and increased 14.7% or $75 million in the first six months of 2024 compared to the same periods of 2023, driven by growth at Allstate Protection Plans.

Operating costs and expenses increased 12.8% or $28 million in the second quarter of 2024 and increased 9.3% or $41 million in the first six months of 2024 compared to the same periods of 2023, primarily due to growth at Allstate Protection Plans and Arity, partially offset by lower expenses at Allstate Roadside.

62 www.allstate.com

Allstate Health and Benefits Segment Results

Allstate Health and Benefits Segment


Summarized financial information
	Three months ended June 30,				Six months ended June 30,
($ in millions)	2024		2023		2024		2023
Revenues
Accident and health insurance premiums and contract charges	$	474	$	453	$	952	$	916
Other revenue	121		101		255		202
Net investment income	25		21		48		40

Costs and expenses
Accident, health and other policy benefits	(291)		(258)		(587)		(523)
Amortization of DAC	(32)		(34)		(74)		(75)
Operating costs and expenses	(224)		(210)		(449)		(413)
Restructuring and related charges	—		—		(1)		(4)

Income tax expense on operations	(15)		(16)		(30)		(30)
Adjusted net income	$	58	$	57	$	114	$	113

Benefit ratio (1)	59.7		55.0		59.9		55.2

Policies in force
Employer voluntary benefits (2)					3,577		3,736
Group health (3)					148		131
Individual health (4)					456		406
Policies in force as of June 30 (in thousands)					4,181		4,273

(1)Benefit ratio is calculated as accident, health and other policy benefits less interest credited to contractholder funds of $8 million and $9 million for the three months ended June 30, 2024 and 2023, respectively, and $17 million for both the six months ended June 30, 2024 and 2023, divided by premiums and contract charges.

(2)Employer voluntary benefits include supplemental life and health products offered through workplace enrollment.

(3)Group health includes health products and administrative services sold to employers.

(4)Individual health includes short-term medical and other health products sold directly to individuals.

Adjusted net income increased $1 million in the second quarter of 2024 compared to the same period of 2023, primarily due to an increase in group health and employer voluntary benefits, partially offset by a decline in individual health. Adjusted net income increased $1 million in the first six months of 2024 compared to the same period of 2023, primarily due to an increase in group health.

Premiums and contract charges increased 4.6% or $21 million in the second quarter of 2024 and increased 3.9% or $36 million in the first six months of 2024 compared to the same periods of 2023, primarily due to growth in group health and individual health. The increase in the first six months of 2024 was partially offset by a decline in employer voluntary benefits.


Premiums and contract charges by line of business
	Three months ended June 30,				Six months ended June 30,
($ in millions)	2024		2023		2024		2023
Employer voluntary benefits	$	246	$	245	$	494	$	500
Group health	120		110		238		217
Individual health	108		98		220		199
Premiums and contract charges	$	474	$	453	$	952	$	916

Other revenue increased $20 million in the second quarter of 2024 and increased $53 million in the first six months of 2024 compared to the same periods of 2023, primarily due to an increase in individual health and group health administrative fees.

Accident, health and other policy benefits increased 12.8% or $33 million in the second quarter of 2024 and increased 12.2% or $64 million in the first six months of 2024 compared to the same periods of 2023, primarily from growth in group health and individual health and higher benefit utilization.

Accident, health and other policy benefits include changes in the reserve for future policy benefits, expected development on reported claims, and reserves for incurred but not reported claims as shown in Note 9.

Second Quarter 2024 Form 10-Q 63

Segment Results Allstate Health and Benefits

Benefit ratio increased 4.7 points to 59.7 in the second quarter of 2024 compared to 55.0 in the second quarter of 2023 and increased 4.7 points to 59.9 in the first six months of 2024 compared to 55.2 in the same period of 2023, primarily due to higher benefit utilization in individual health and group health.

Amortization of DAC decreased 5.9% or $2 million in the second quarter of 2024 and decreased 1.3% or $1 million in the first six months of 2024 compared to the same periods of 2023.


Operating costs and expenses
	Three months ended June 30,				Six months ended June 30,
($ in millions)	2024		2023		2024		2023
Non-deferrable commissions	$	86	$	78	$	177	$	157
General and administrative expenses	138		132		272		256
Total operating costs and expenses	$	224	$	210	$	449	$	413

Operating costs and expenses increased $14 million in the second quarter of 2024 and increased $36 million in the first six months of 2024 compared to the same periods of 2023, primarily due to growth in individual health and group health.

64 www.allstate.com

Investments


Portfolio composition and strategy by reporting segment (1)
	June 30, 2024
($ in millions)	Property-Liability			Protection Services			Allstate Health and Benefits			Corporate and Other			Total
Fixed income securities (2)	$	47,714		$	1,941		$	1,826		$	1,095		$	52,576
Equity securities (3)	1,541			236			59			380			2,216
Mortgage loans, net	699			—			116			—			815
Limited partnership interests	8,719			—			—			11			8,730
Short-term investments (4)	4,171			128			120			869			5,288
Other investments, net	859			—			120			—			979
Total	$	63,703		$	2,305		$	2,241		$	2,355		$	70,604
Percent to total	90.2		%	3.3		%	3.2		%	3.3		%	100.0		%

Market-based	$	53,839		$	2,305		$	2,241		$	2,097		$	60,482
Performance-based	9,864			—			—			258			10,122
Total	$	63,703		$	2,305		$	2,241		$	2,355		$	70,604

(1) Balances reflect the elimination of related party investments between segments.

(2) Fixed income securities are carried at fair value. Amortized cost, net for these securities was $48.72 billion, $2.00 billion, $1.96 billion, $1.11 billion and $53.79 billion for Property-Liability, Protection Services, Allstate Health and Benefits, Corporate and Other, and in total, respectively.

(3) Equity securities are carried at fair value. The fair value of equity securities held as of June 30, 2024, was $213 million in excess of cost. These net gains were primarily concentrated in the technology and banking sectors. Equity securities include $715 million of funds with underlying investments in fixed income securities as of June 30, 2024.

(4) Short-term investments are carried at fair value.

Investments totaled $70.60 billion as of June 30, 2024, increasing from $66.68 billion as of December 31, 2023, primarily due to positive operating cash flows, partially offset by lower fixed income valuations and dividends to shareholders.

Portfolio composition by investment strategy We utilize two primary strategies to manage risks and returns and to position our portfolio to take advantage of market opportunities while attempting to mitigate adverse effects. As strategies and market conditions evolve, the asset allocation may change.

Market-based strategy seeks to deliver predictable earnings aligned to business needs and provide flexibility to adjust investment risk profile based on enterprise objectives and market opportunities primarily through public and private fixed income investments and public equity securities.

Performance-based strategy seeks to deliver attractive risk-adjusted returns and supplement market risk with idiosyncratic risk primarily through investments in private equity, including infrastructure investments, and real estate with a majority being limited partnerships. These investments include investee level expenses, reflecting asset level operating expenses on directly held real estate and other consolidated investments.


Portfolio composition by investment strategy
	June 30, 2024
($ in millions)	Market- based			Performance-based			Total
Fixed income securities	$	52,456		$	120		$	52,576
Equity securities	1,539			677			2,216
Mortgage loans, net	815			—			815
Limited partnership interests	162			8,568			8,730
Short-term investments	5,288			—			5,288
Other investments, net	222			757			979
Total	$	60,482		$	10,122		$	70,604
Percent to total	85.7		%	14.3		%	100.0		%

Unrealized net capital gains and losses
Fixed income securities	$	(1,212)		$	—		$	(1,212)

Short-term investments	(2)			—			(2)
Other	(2)			—			(2)
Total	$	(1,216)		$	—		$	(1,216)

Second Quarter 2024 Form 10-Q 65

Investments

Fixed income securities


Fixed income securities by type
	Fair value as of
($ in millions)	June 30, 2024		December 31, 2023
U.S. government and agencies	$	10,564	$	8,619
Municipal	6,538		6,006
Corporate	32,514		31,205
Foreign government	1,289		1,290
Asset-backed securities (“ABS”)	1,671		1,745
Total fixed income securities	$	52,576	$	48,865

Fixed income securities are rated by third-party credit rating agencies or are internally rated. The Securities Valuation Office (“SVO”) of the National Association of Insurance Commissioners (“NAIC”) evaluates the fixed income securities of insurers for regulatory reporting and capital assessment purposes. The NAIC assigns securities to one of six credit quality categories defined as “NAIC designations”. In general, securities with NAIC designations of 1 and 2 are considered investment grade and securities with NAIC designations of 3 through 6 are considered below investment grade. The rating is either received from the SVO based on availability of applicable ratings from rating agencies on the NAIC Nationally Recognized Statistical Rating Organizations (“NRSRO”) provider list, including Moody’s Investors Service (“Moody’s”), S&P Global Ratings (“S&P”), Fitch Ratings (“Fitch”), or a comparable internal rating.

As a result of time lags between the funding of investments, the finalization of legal documents, and the completion of the SVO filing process, the portfolio includes certain securities that have not yet been designated by the SVO as of each balance sheet date and the categorization of these securities is based on the expected ratings indicated by internal analysis.

As of June 30, 2024, 91.4% of the consolidated fixed income securities portfolio was rated investment grade. Credit ratings below these designations are considered lower credit quality or below investment grade, which includes high yield bonds.

Market prices for certain securities may have credit spreads which imply higher or lower credit quality than the current third-party rating. Our initial investment decisions and ongoing monitoring procedures for fixed income securities are based on a due diligence process which includes, but is not limited to, an assessment of the credit quality, sector, structure, and liquidity risks of each issuer.

Fixed income portfolio monitoring is a comprehensive process to identify and evaluate each fixed income security that may require a credit loss allowance. The process includes a quarterly review of all securities to identify instances where the fair value of a security compared to its amortized cost is below internally established thresholds. For further detail on our fixed income portfolio monitoring process, see Note 4 of the condensed consolidated financial statements.

66 www.allstate.com

Investments

The following table presents total fixed income securities by the applicable NAIC designation and comparable S&P rating.


Fair value and unrealized net capital gains (losses) for fixed income securities by credit rating
	June 30, 2024
	NAIC 1				NAIC 2				NAIC 3
	A and above				BBB				BB
($ in millions)	Fair value		Unrealized gain (loss)		Fair value		Unrealized gain (loss)		Fair value		Unrealized gain (loss)
U.S. government and agencies	$	10,564	$	(160)	$	—	$	—	$	—	$	—
Municipal	6,352		(123)		179		(1)		5		—
Corporate
Public	6,982		(137)		15,829		(542)		583		(16)
Privately placed	1,978		(48)		3,306		(92)		2,331		(45)
Total corporate	8,960		(185)		19,135		(634)		2,914		(61)
Foreign government	1,288		(10)		1		—		—		—
ABS	1,571		—		13		—		29		—
Total fixed income securities	$	28,735	$	(478)	$	19,328	$	(635)	$	2,948	$	(61)

	NAIC 4				NAIC 5-6				Total
	B				CCC and lower
	Fair value		Unrealized gain (loss)		Fair value		Unrealized gain (loss)		Fair value		Unrealized gain (loss)
U.S. government and agencies	$	—	$	—	$	—	$	—	$	10,564	$	(160)
Municipal	—		—		2		1		6,538		(123)
Corporate
Public	104		(1)		2		1		23,500		(695)
Privately placed	1,284		(30)		115		(19)		9,014		(234)
Total corporate	1,388		(31)		117		(18)		32,514		(929)
Foreign government	—		—		—		—		1,289		(10)
ABS	1		—		57		10		1,671		10
Total fixed income securities	$	1,389	$	(31)	$	176	$	(7)	$	52,576	$	(1,212)

Municipal bonds, including tax-exempt and taxable securities, include general obligations of state and local issuers and revenue bonds.

Corporate bonds include publicly traded and privately placed securities. Privately placed securities primarily consist of corporate issued senior debt securities that are negotiated with the borrower or are issued by public entities in unregistered form.

ABS includes collateralized debt obligations, consumer and other ABS. Credit risk is managed by monitoring the performance of the underlying collateral. Many of the securities in the ABS portfolio have credit enhancement with features such as overcollateralization, subordinated structures, reserve funds, guarantees or insurance. ABS also includes residential mortgage-backed securities and commercial mortgage-backed securities.

Equity securities of $2.22 billion primarily include common stocks, exchange traded and mutual funds, non-redeemable preferred stocks and real estate investment trust (“REIT”) equity investments. Certain exchange traded and mutual funds have fixed income securities as their underlying investments.

Mortgage loans of $815 million mainly comprise loans secured by first mortgages on developed commercial real estate. Key considerations used to manage our exposure include property type and geographic diversification. For further detail on our mortgage loan portfolio, see Note 4 of the condensed consolidated financial statements.

Limited partnership interests include $7.43 billion of interests in private equity funds, $1.14 billion of interests in real estate funds and $162 million of interests in other funds as of June 30, 2024. We have commitments to invest additional amounts in limited partnership interests totaling $2.99 billion as of June 30, 2024.

Other investments include $149 million of bank loans, net, and $708 million of direct investments in real estate as of June 30, 2024.

Second Quarter 2024 Form 10-Q 67

Investments


Unrealized net capital gains (losses)
	June 30,		December 31,
($ in millions)	2024		2023
U.S. government and agencies	$	(160)	$	(5)
Municipal	(123)		(43)
Corporate	(929)		(746)
Foreign government	(10)		4
ABS	10		6
Fixed income securities	(1,212)		(784)
Short-term investments	(2)		(1)
Derivatives	(2)		(2)
Equity method of accounting (“EMA”) limited partnerships	—		(4)
Unrealized net capital gains and losses, pre-tax	$	(1,216)	$	(791)


Gross unrealized gains (losses) on fixed income securities by type and sector
($ in millions)	Amortized cost, net		Gross unrealized				Fair value
			Gains		Losses
June 30, 2024
Corporate
Banking	$	4,125	$	24	$	(100)	$	4,049
Basic industry	1,027		4		(36)		995
Capital goods	3,118		16		(101)		3,033
Communications	2,684		9		(126)		2,567
Consumer goods (cyclical and non-cyclical)	7,611		43		(259)		7,395
Financial services	2,294		8		(77)		2,225
Energy	2,703		25		(59)		2,669





Technology	2,781		17		(143)		2,655
Transportation	903		4		(37)		870
Utilities	5,765		38		(154)		5,649
Other	432		3		(28)		407
Total corporate fixed income portfolio	33,443		191		(1,120)		32,514
U.S. government and agencies	10,724		34		(194)		10,564
Municipal	6,661		46		(169)		6,538
Foreign government	1,299		5		(15)		1,289
ABS	1,661		16		(6)		1,671
Total fixed income securities	$	53,788	$	292	$	(1,504)	$	52,576






December 31, 2023
Corporate
Banking	$	4,189	$	31	$	(135)	$	4,085
Basic industry	1,007		7		(42)		972
Capital goods	2,800		33		(97)		2,736
Communications	2,767		33		(115)		2,685
Consumer goods (cyclical and non-cyclical)	6,813		93		(251)		6,655
Financial services	2,111		17		(88)		2,040
Energy	2,645		35		(63)		2,617





Technology	2,800		21		(153)		2,668
Transportation	1,104		13		(45)		1,072
Utilities	5,330		109		(123)		5,316
Other	385		5		(31)		359
Total corporate fixed income portfolio	31,951		397		(1,143)		31,205
U.S. government and agencies	8,624		114		(119)		8,619
Municipal	6,049		109		(152)		6,006
Foreign government	1,286		17		(13)		1,290
ABS	1,739		13		(7)		1,745
Total fixed income securities	$	49,649	$	650	$	(1,434)	$	48,865

68 www.allstate.com

Investments

Gross unrealized losses are related to an increase in market yields which may include increased risk-free interest rates and wider credit spreads since the time of initial purchase. Similarly, gross unrealized gains reflect a decrease in market yields since the time of initial purchase.


Equity securities by sector
	June 30, 2024						December 31, 2023
($ in millions)	Cost		Over (under) cost		Fair value		Cost		Over (under) cost		Fair value

Banking	$	38	$	44	$	82	$	30	$	38	$	68
Basic industry	11		2		13		9		2		11
Capital goods	77		(23)		54		77		(27)		50
Energy	32		6		38		32		3		35
Financial services	210		15		225		210		12		222





Funds
Equities	285		36		321		258		12		270
Fixed income	730		(15)		715		1,038		(15)		1,023
Other	62		4		66		58		5		63
Total funds	1,077		25		1,102		1,354		2		1,356
REITs	173		15		188		179		21		200
Technology	179		84		263		138		50		188
Utilities	57		3		60		59		1		60
Other (1)	149		42		191		156		65		221
Total equity securities	$	2,003	$	213	$	2,216	$	2,244	$	167	$	2,411

(1)As of June 30, 2024, other is generally comprised of consumer goods and communications sectors.


Net investment income
	Three months ended June 30,				Six months ended June 30,
($ in millions)	2024		2023		2024		2023
Fixed income securities	$	571	$	422	$	1,097	$	812
Equity securities	18		21		33		32
Mortgage loans	9		8		18		16
Limited partnership interests	103		122		302		256
Short-term investments	62		69		129		135
Other investments	25		39		46		80
Investment income, before expense	788		681		1,625		1,331
Investment expense
Investee level expenses	(14)		(18)		(24)		(35)
Securities lending expense	(27)		(22)		(52)		(43)
Operating costs and expenses	(35)		(31)		(73)		(68)
Total investment expense	(76)		(71)		(149)		(146)
Net investment income	$	712	$	610	$	1,476	$	1,185

Property-Liability	$	643	$	544	$	1,345	$	1,053
Protection Services	23		18		44		34
Allstate Health and Benefits	25		21		48		40
Corporate and Other	21		27		39		58
Net investment income	$	712	$	610	$	1,476	$	1,185

Market-based	$	667	$	538	$	1,293	$	1,046
Performance-based	121		143		332		285
Investment income, before expense	$	788	$	681	$	1,625	$	1,331

Net investment income increased $102 million in the second quarter of 2024, primarily due to higher market-based investment results, partially offset by lower performance-based investment results. Net investment income increased $291 million in the first six months of 2024 compared to the same period of 2023, due to higher market-based and performance-based investment results. Market-based results continue to benefit from portfolio repositioning into higher yielding fixed income securities and higher investment balances.

Second Quarter 2024 Form 10-Q 69

Investments


Performance-based investment income
	Three months ended June 30,				Six months ended June 30,
($ in millions)	2024		2023		2024		2023
Private equity	$	119	$	112	$	315	$	217
Real estate	2		31		17		68
Total performance-based income before investee level expenses	$	121	$	143	$	332	$	285

Investee level expenses (1)	(14)		(16)		(24)		(32)
Total performance-based income	$	107	$	127	$	308	$	253

(1)Investee level expenses include asset level operating expenses on directly held real estate and other consolidated investments reported in investment expense.

Performance-based investment income decreased $20 million in the second quarter of 2024 compared to the same period of 2023 primarily due to lower real estate investments results. Performance-based investment income increased $55 million in the first six months of 2024 compared to the same period of 2023, primarily due to higher private equity valuation increases.

Performance-based investment results and income can vary significantly between periods and are influenced by economic conditions, equity market performance, comparable public company earnings multiples, capitalization rates, operating performance of the underlying investments and the timing of asset sales. The Company typically employs a lag in recording and recognizing changes in valuations of limited partnership interests due to the availability of investee financial statements.


Components of net gains (losses) on investments and derivatives and the related tax effect
	Three months ended June 30,				Six months ended June 30,
($ in millions)	2024		2023		2024		2023
Sales	$	(90)	$	(130)	$	(201)	$	(250)
Credit losses (1)	(16)		(37)		(131)		(49)
Valuation change of equity investments - appreciation (decline):
Equity securities	19		26		85		174
Equity fund investments in fixed income securities	(5)		(5)		(9)		14
Limited partnerships (2)	4		2		12		33
Total valuation of equity investments	18		23		88		221
Valuation change and settlements of derivatives	(15)		(7)		(23)		(59)
Net gains (losses) on investments and derivatives, pre-tax	(103)		(151)		(267)		(137)
Income tax benefit	22		35		58		29
Net gains (losses) on investments and derivatives, after-tax	$	(81)	$	(116)	$	(209)	$	(108)

Property-Liability (1)	$	(81)	$	(104)	$	(208)	$	(98)
Protection Services	(1)		(3)		(4)		(4)
Allstate Health and Benefits	1		1		2		3
Corporate and Other	—		(10)		1		(9)
Net gains (losses) on investments and derivatives, after-tax	$	(81)	$	(116)	$	(209)	$	(108)

Market-based (1)	$	(99)	$	(124)	$	(284)	$	(127)
Performance-based	(4)		(27)		17		(10)
Net gains (losses) on investments and derivatives, pre-tax	$	(103)	$	(151)	$	(267)	$	(137)

(1)Includes $123 million loss for the six months ended 2024 related to the carrying value of the surplus notes issued by Adirondack Insurance Exchange and New Jersey Skylands Insurance Association (together “Reciprocal Exchanges”). See Note 7 for further details.

(2)Relates to limited partnerships where the underlying assets are predominately public equity securities.

Net losses on investments and derivatives in the second quarter of 2024 primarily related to losses on sales of fixed income securities, partially offset by valuation gains on equity securities. Net losses in the first six months of 2024 primarily related to losses on sales of fixed income securities and a loss recognized related to surplus notes issued by the Reciprocal Exchanges, partially offset by valuation gains on equity securities.

Net losses on sales in the second quarter and first six months of 2024 related primarily to sales of fixed income securities in connection with ongoing portfolio management.

Net losses on valuation change and settlements of derivatives of $15 million and $23 million in the second quarter and first six months of 2024, respectively, primarily related to net losses on interest rate futures used to manage duration and net losses on equity

70 www.allstate.com

Investments

futures used to manage equity exposure, partially offset by gains on foreign currency contracts used to manage foreign currency risk.


Net gains (losses) on performance-based investments and derivatives
	Three months ended June 30,				Six months ended June 30,
($ in millions)	2024		2023		2024		2023
Sales	$	2	$	(5)	$	(2)	$	3
Credit losses	(17)		(24)		(21)		(27)
Valuation change of equity investments	8		6		26		25
Valuation change and settlements of derivatives	3		(4)		14		(11)
Total performance-based	$	(4)	$	(27)	$	17	$	(10)

Net losses on performance-based investments and derivatives in the second quarter of 2024 primarily included a credit loss related to real estate, partially offset by increased valuation of equity investments. Net gains on performance-based investments and derivatives in the first six months of 2024, primarily related to increased valuation of equity investments and valuation change and settlements of derivatives, partially offset by a credit loss related to real estate.

Second Quarter 2024 Form 10-Q 71

Capital Resources and Liquidity

Capital resources consist of shareholders’ equity and debt, representing funds deployed or available to be deployed to support business operations or for general corporate purposes.


Capital resources
($ in millions)	June 30, 2024			December 31, 2023
Preferred stock, common stock, treasury stock, retained income and other shareholders’ equity items	$	19,619		$	18,470
Accumulated other comprehensive loss	(1,026)			(700)
Total Allstate shareholders’ equity	18,593			17,770
Debt	8,082			7,942
Total capital resources	$	26,675		$	25,712

Ratio of debt to Allstate shareholders’ equity	43.5		%	44.7		%
Ratio of debt to capital resources	30.3			30.9

Allstate shareholders’ equity increased in the first six months of 2024, primarily due to net income, partially offset by dividends to shareholders and higher unrealized net capital losses on investments. In the six months ended June 30, 2024, we paid dividends of $476 million and $59 million related to our common and preferred shares, respectively.

Repayment of debt On May 15, 2024, the Company repaid, at maturity, $350 million of 6.75% Senior Notes.

Issuance of debt On June 24, 2024, the Company issued $500 million of 5.05% Senior Notes due 2029. Interest on the Senior Notes is payable semi-annually in arrears on June 24 and December 24 of each year, beginning on December 24, 2024. The Senior Notes are redeemable at any time at the applicable redemption price prior to the maturity date. The net proceeds of this issuance were used for general corporate purposes.

Debt maturities


Debt maturities for each of the next five years and thereafter (excluding issuance costs)
($ in millions)
2025	$	600
2026	550
2027	—
2028	—
2029	500

Thereafter	6,491
Total long-term debt principal	$	8,141

Common share repurchases On March 31, 2024, our $5.00 billion share repurchase authorization expired with $472 million remaining. A new common share repurchase program has not been authorized as of June 30, 2024.

Common shareholder dividends On January 2, 2024 and April 1, 2024, we paid a common shareholder dividend of $0.89 and $0.92, respectively. On May 14, 2024, we declared a common shareholder dividend of $0.92 payable on July 1, 2024.

Financial ratings and strength Our ratings are influenced by many factors including our operating and financial performance, asset quality, liquidity, overall portfolio mix, financial leverage (i.e., debt), exposure to risks such as catastrophes and the current level of

operating leverage. The preferred stock and subordinated debentures are viewed as having a common equity component by certain rating agencies and are given equity credit up to a pre-determined limit in our capital structure as determined by their respective methodologies. These respective methodologies consider the existence of certain terms and features in the instruments such as the noncumulative dividend feature in the preferred stock.

In May 2024, S&P affirmed the Corporation’s debt and short-term issuer ratings of BBB+ and A-2, respectively, and the insurance financial strength rating of A+ for AIC. The outlook for the ratings is stable.

Since December 31, 2023, A.M. Best and Moody’s have not affirmed or changed any of the Corporation’s ratings.

Liquidity sources and uses We actively manage our financial position and liquidity levels in light of changing market, economic and business conditions. Liquidity is managed at both the entity and enterprise level across the Company and is assessed on both base and stressed level liquidity needs. We believe we have sufficient liquidity to meet these needs. Additionally, we have existing intercompany agreements in place that facilitate liquidity management across the Company to enhance flexibility.

The Corporation is party to an Amended and Restated Intercompany Liquidity Agreement (“Liquidity Agreement”) with certain subsidiaries, which includes, but is not limited to Allstate Insurance Company (“AIC”). The Liquidity Agreement allows for short-term advances of funds to be made between parties for liquidity and other general corporate purposes. The Liquidity Agreement does not establish a commitment to advance funds on the part of any party. AIC serves as a lender and borrower, certain other subsidiaries serve only as borrowers, and the Corporation serves only as a lender. The maximum amount of potential funding under each of these agreements is $1.00 billion.

In addition to the Liquidity Agreement, the Corporation also has an intercompany loan agreement with certain of its subsidiaries, which includes, but is not limited to, AIC. The amount of intercompany loans

72 www.allstate.com

Capital Resources and Liquidity

available to the Corporation’s subsidiaries is at the discretion of the Corporation. The maximum amount of loans the Corporation will have outstanding to all its eligible subsidiaries at any given point in time is limited to $1.00 billion. The Corporation may use commercial paper borrowings, bank lines of credit and securities lending to fund intercompany borrowings.

Parent company capital capacity At the parent holding company level, we have deployable assets totaling $2.99 billion as of June 30, 2024, primarily comprised of cash and short-term, fixed income and equity securities that are generally saleable within one quarter. The earnings capacity of the operating subsidiaries is the primary source of capital generation for the Corporation.

As of June 30, 2024, we held $17.95 billion of cash, U.S. government and agencies fixed income securities, public equity securities, and short-term investments, which we would expect to be able to liquidate within one week.

Intercompany dividends of $18 million were paid from North Light Specialty Insurance Company to AIC in the first six months of 2024.

Based on the greater of 2023 statutory net income or 10% of statutory surplus, the maximum amount of dividends that AIC will be able to pay, without prior Illinois Department of Insurance approval, at a given point in time through February 2025, is estimated at $1.20 billion, less dividends paid during the preceding twelve months measured at that point in time. In the first six months of 2024, no dividends have been paid.

Dividends may not be paid or declared on our common stock and shares of common stock may not be repurchased unless the full dividends for the latest completed dividend period on our preferred stock have been declared and paid or provided for.

The terms of our outstanding subordinated debentures also prohibit us from declaring or paying any dividends or distributions on our common or preferred stock or redeeming, purchasing, acquiring, or making liquidation payments on our common stock or preferred stock if we have elected to defer interest payments on the subordinated debentures, subject to certain limited exceptions. In the first six months of 2024, we did not defer interest payments on the subordinated debentures.

Additional resources to support liquidity are as follows:

•The Corporation and AIC have access to a $750 million unsecured revolving credit facility that is available for short-term liquidity requirements. The maturity date of this facility is November 2027. The facility is fully subscribed among 11 lenders with the largest commitment being $95 million. The commitments of the lenders are several and no lender is responsible for any other lender’s commitment if such lender fails to make a loan under the facility. This facility contains an increase provision that would allow up to an additional $500 million of borrowing, subject to the lenders’ commitment. This facility has a financial covenant requiring that we not exceed a 37.5% debt to capitalization ratio as defined in the agreement. This ratio was 22.8% as of June 30, 2024. Although the right to borrow under the facility is not subject to a minimum rating requirement, the costs of maintaining the facility and borrowing under it are based on the ratings of our senior unsecured, unguaranteed long-term debt. There were no borrowings under the credit facility during 2024.

•To cover short-term cash needs, the Corporation has access to a commercial paper facility with a borrowing capacity limited to any undrawn credit facility balance up to $750 million.

•As of June 30, 2024, there were no balances outstanding for the credit facility or the commercial paper facility and therefore the remaining borrowing capacity was $750 million.

•The Corporation has access to a universal shelf registration statement with the Securities and Exchange Commission that was filed on April 30, 2024 and expires in 2027. We can use this shelf registration to issue an unspecified amount of debt securities, common stock (including 636 million shares of treasury stock as of June 30, 2024), preferred stock, depositary shares, warrants, stock purchase contracts and stock purchase units. The specific terms of any securities we issue under this registration statement will be provided in the applicable prospectus supplements.

Second Quarter 2024 Form 10-Q 73

Forward-Looking Statements

This report contains “forward-looking statements” that anticipate results based on our estimates, assumptions and plans that are subject to uncertainty. These statements are made subject to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements do not relate strictly to historical or current facts and may be identified by their use of words like “plans,” “seeks,” “expects,” “will,” “should,” “anticipates,” “estimates,” “intends,” “believes,” “likely,” “targets” and other words with similar meanings. These statements may address, among other things, our strategy for growth, catastrophe exposure management, product development, investment results, regulatory approvals, market position, expenses, financial results, litigation and reserves. We believe that these statements are based on reasonable estimates, assumptions and plans. Forward-looking statements speak only as of the date on which they are made, and we assume no obligation to update any forward-looking statements as a result of new information or future events or developments. In addition, forward-looking statements are subject to certain risks or uncertainties that could cause actual results to differ materially from those communicated in these forward-looking statements. Factors that could cause actual results to differ materially from those expressed in, or implied by, the forward-looking statements include risks related to:

Insurance and Financial Services (1) actual claim costs exceeding current reserves; (2) unexpected increases in claim frequency or severity; (3) catastrophes and severe weather events; (4) limitations in analytical models used for loss cost estimates; (5) price competition and changes in regulation and underwriting standards; (6) market risk, inflation, and declines in credit quality of our investment portfolios; (7) our subjective determination of fair value and amount of credit losses for investments; (8) our participation in indemnification programs, including state industry pools and facilities; (9) inability to mitigate the impact associated with changes in capital requirements; (10) a downgrade in financial strength ratings;

Business, Strategy and Operations (11) operations in markets that are highly competitive; (12) changing consumer preferences; (13) new or changing technologies; (14) implementation of our Transformative Growth strategy; (15) our catastrophe management strategy; (16) restrictions on our subsidiaries’ ability to pay dividends; (17) restrictions under terms of certain of our securities on our ability to pay dividends or repurchase our stock; (18) the availability of reinsurance at current levels and prices; (19) counterparty risk related to reinsurance; (20) acquisitions and divestitures of businesses; (21) intellectual property infringement, misappropriation and third-party claims; (22) vendor-related business disruptions or failure of a vendor to provide and protect data, confidential and proprietary information, or personal information of our customers, claimants or employees; (23) our ability to attract, develop and retain talent;

Macro, Regulatory and Risk Environment (24) conditions in the global economy and capital markets; (25) a large-scale pandemic, the occurrence of terrorism, military actions or social unrest; (26) the failure in cyber or other information security controls, as well as the occurrence of events unanticipated in our disaster recovery processes and business continuity planning; (27) changing climate and weather conditions; (28) evolving environmental, social and governance standards and expectations; (29) restrictive regulations and regulatory reforms and uncertainty around the interpretation and implementation of regulations in the U.S. and internationally; (30) regulatory limitations on rate increases and requirements to underwrite business and participate in loss sharing arrangements; (31) losses from legal and regulatory actions; (32) changes in or the application of accounting standards and changes in tax laws; and (33) misconduct or fraudulent acts by employees, agents and third parties.

Additional information concerning these and other factors may be found in our filings with the Securities and Exchange Commission, including the “Risk Factors” section in our most recent annual report on Form 10-K.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures. We maintain disclosure controls and procedures as defined in Rules 13a-15(e) under the Securities Exchange Act of 1934. Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based upon this evaluation, the principal executive officer and the principal financial officer concluded that our disclosure controls and procedures are effective in providing reasonable assurance that material information required to be disclosed in our reports filed with or submitted to the Securities and Exchange Commission under the Securities Exchange Act is made known to management, including the principal executive officer and the principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting. During the fiscal quarter ended June 30, 2024, there have been no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

74 www.allstate.com

Other Information Part II.

Part II. Other Information

Item 1. Legal Proceedings

Information required for Part II, Item 1 is incorporated by reference to the discussion under the heading “Regulation and compliance” and under the heading “Legal and regulatory proceedings and inquiries” in Note 14 of the condensed consolidated financial statements in Part I, Item 1 of this Form 10-Q.

Item 1A. Risk Factors

There have been no material changes in our risk factors from those disclosed in Part I, Item 1A in our annual report on Form 10-K for the year ended December 31, 2023.

Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities

Issuer Purchases of Equity Securities


Period	Total number of shares (or units) purchased (1)	Average price paid per share (or unit)		Total number of shares (or units) purchased as part of publicly announced plans or programs	Maximum number (or approximate dollar value) of shares (or units) that may yet be purchased under the plans or programs (2)
April 1, 2024 - April 30, 2024
Open Market Purchases	2,229	$	164.11	—

May 1, 2024 - May 31, 2024
Open Market Purchases	1,257	$	168.18	—

June 1, 2024 - June 30, 2024
Open Market Purchases	2,454	$	164.03	—

Total	5,940	$	164.94	—	$	—

(1)In accordance with the terms of its equity compensation plans, Allstate acquired the following shares in connection with the vesting of restricted stock units and performance stock awards and the exercise of stock options held by employees and/or directors. The shares were acquired in satisfaction of withholding taxes due upon exercise or vesting and in payment of the exercise price of the options.

April: 2,229

May: 1,257

June: 2,454

(2)A common share repurchase program has not been authorized as of June 30, 2024.

Item 5. Other Information

During the three months ended June 30, 2024, no director or officer who is required to file reports under Section 16 of the Securities Exchange Act adopted, modified or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

Second Quarter 2024 Form 10-Q 75

Item 6. Exhibits

(a)Exhibits

The following is a list of exhibits filed as part of this Form 10-Q.

Incorporated by Reference

Exhibit

Number

Exhibit Description

Form

File

Number

Exhibit

Filing

Date

Filed or

Furnished

Herewith

3.1

Restated Certificate of Incorporation filed with the Secretary of State of Delaware on May 23, 2012

8-K

1-11840

3(i)

May 23, 2012

3.2

Amended and Restated Bylaws of The Allstate Corporation as amended July 14, 2023

8-K

1-11840

3.1

July 17, 2023

3.3

Certificate of Designations with respect to the Preferred Stock of the Registrant, Series H, dated August 5, 2019

8-K

1-11840

3.1

August 5, 2019

3.4

Certificate of Designations with respect to the Preferred Stock of the Registrant, Series I, dated November 6, 2019

8-K

1-11840

3.1

November 8, 2019

3.5

Certificate of Elimination with respect to the Preferred Stock, Series A, C, D, E and F of the Registrant, dated February 20, 2020

10-K

1-11840

3.6

February 21, 2020

3.6

Certificate of Elimination with respect to the Preferred Stock, Series G of the Registrant, dated May 1, 2023

10-Q

1-11840

3.6

May 3, 2023

3.7

Certificate of Designations with respect to the Preferred Stock of the Registrant, Series J, dated May 16, 2023

8-K

1-11840

3.1

May 18, 2023

The Allstate Corporation hereby agrees to furnish to the Commission, upon request, the instruments defining the rights of holders of each issue of long-term debt of it and its consolidated subsidiaries

Acknowledgment of awareness from Deloitte & Touche LLP, dated July 31, 2024, concerning unaudited interim financial information

31(i)

Rule 13a-14(a) Certification of Principal Executive Officer

31(i)

Rule 13a-14(a) Certification of Principal Financial Officer

Section 1350 Certifications

101.INS

Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

101.SCH

Inline XBRL Taxonomy Extension Schema Document

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB

Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document

104

Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

76 www.allstate.com

Signature

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	The Allstate Corporation
	(Registrant)



July 31, 2024	By	/s/ Eric K. Ferren
		Eric K. Ferren
		Senior Vice President, Controller and Chief Accounting Officer
		(Authorized Signatory and Principal Accounting Officer)

Second Quarter 2024 Form 10-Q 77

Positive
Negative
Uncertain
Constraining
Legalese
Litigous
Readability	H.S. freshman Bad

The Allstate Corporation (ALL) 10-Q2024 Q2 Quarterly report

Content analysis