Item 8. Financial Statements and Supplementary Data

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Item 8. Financial Statements and Supplementary Data


Consolidated Financial Statements		Page
Consolidated Statements of Operations		98
Consolidated Statements of Comprehensive Income (Loss)		99
Consolidated Statements of Financial Position		100
Consolidated Statements of Shareholders’ Equity		101
Consolidated Statements of Cash Flows		102

Notes to Consolidated Financial Statements
Note 1	General	103
Note 2	Summary of Significant Accounting Policies	104
Note 3	Dispositions	118
Note 4	Reportable Segments	119
Note 5	Investments	123
Note 6	Fair Value of Assets and Liabilities	133
Note 7	Derivative Financial Instruments and Off-balance Sheet Financial Instruments	141
Note 8	Variable Interest Entities	146
Note 9	Reserve for Property and Casualty Insurance Claims and Claims Expense	147
Note 10	Reserve for Future Policy Benefits and Contractholder Funds	154
Note 11	Reinsurance and Indemnification	159
Note 12	Deferred Policy Acquisition Costs	164
Note 13	Capital Structure	165
Note 14	Company Restructuring	169
Note 15	Commitments, Guarantees and Contingent Liabilities	169
Note 16	Income Taxes	175
Note 17	Statutory Financial Information and Dividend Limitations	177
Note 18	Benefit Plans	178
Note 19	Equity Incentive Plans	184
Note 20	Supplemental Cash Flow Information	186
Note 21	Other Comprehensive Income (Loss)	187
Note 22	Quarterly Results (unaudited)	188

Report of Independent Registered Public Accounting Firm (Deloitte and Touche LLP: PCAOB ID No. 34)		189

The Allstate Corporation 97

2023 Form 10-K Financial Statements

The Allstate Corporation and Subsidiaries

Consolidated Statements of Operations


	Years Ended December 31,
(In millions, except per share data)	2023		2022		2021
Revenues
Property and casualty insurance premiums	$	50,670	$	45,904	$	42,218
Accident and health insurance premiums and contract charges	1,846		1,832		1,834
Other revenue	2,400		2,344		2,172
Net investment income	2,478		2,403		3,293
Net gains (losses) on investments and derivatives	(300)		(1,072)		1,084
Total revenues	57,094		51,411		50,601

Costs and expenses
Property and casualty insurance claims and claims expense	41,070		37,264		29,318
Shelter-in-Place Payback expense	—		—		29
Accident, health and other policy benefits (including remeasurement (gains) losses of $0, $(4), and $(11))	1,071		1,042		1,060
Amortization of deferred policy acquisition costs	7,278		6,634		6,236
Operating costs and expenses	7,137		7,446		7,260
Pension and other postretirement remeasurement (gains) losses	9		116		(644)
Restructuring and related charges	169		51		170
Amortization of purchased intangibles	329		353		376

Interest expense	379		335		330
Total costs and expenses	57,442		53,241		44,135

(Loss) income from operations before income tax expense	(348)		(1,830)		6,466

Income tax (benefit) expense	(135)		(488)		1,292

Net (loss) income from continuing operations	(213)		(1,342)		5,174

Loss from discontinued operations, net of tax	—		—		(3,593)

Net (loss) income	(213)		(1,342)		1,581

Less: Net loss attributable to noncontrolling interest	(25)		(53)		(33)

Net (loss) income attributable to Allstate	(188)		(1,289)		1,614

Less: Preferred stock dividends	128		105		114

Net (loss) income applicable to common shareholders	$	(316)	$	(1,394)	$	1,500

Earnings per common share applicable to common shareholders
Basic
Continuing operations	$	(1.20)	$	(5.14)	$	17.28
Discontinued operations	—		—		(12.19)
Total	$	(1.20)	$	(5.14)	$	5.09

Diluted
Continuing operations	$	(1.20)	$	(5.14)	$	17.03
Discontinued operations	—		—		(12.02)
Total	$	(1.20)	$	(5.14)	$	5.01

Weighted average common shares - Basic	262.5		271.2		294.8
Weighted average common shares - Diluted	262.5		271.2		299.1

See notes to consolidated financial statements.

98 www.allstate.com

2023 Form 10-K Financial Statements

The Allstate Corporation and Subsidiaries

Consolidated Statements of Comprehensive Income (Loss)


	Years Ended December 31,
($ in millions)	2023		2022		2021
Net (loss) income	$	(213)	$	(1,342)	$	1,581

Other comprehensive income (loss), after-tax
Changes in:
Unrealized net capital gains and losses	1,651		(2,853)		(2,583)
Unrealized foreign currency translation adjustments	67		(150)		(8)
Unamortized pension and other postretirement prior service credit	(16)		(43)		(59)
Discount rate for reserve for future policy benefits	(10)		228		49
Other comprehensive income (loss), after-tax	1,692		(2,818)		(2,601)

Comprehensive income (loss)	1,479		(4,160)		(1,020)
Less: Comprehensive loss attributable to noncontrolling interest	(15)		(73)		(36)
Comprehensive income (loss) attributable to Allstate	$	1,494	$	(4,087)	$	(984)

See notes to consolidated financial statements.

The Allstate Corporation 99

2023 Form 10-K Financial Statements

The Allstate Corporation and Subsidiaries

Consolidated Statements of Financial Position


	December 31,
($ in millions, except par value data)	2023		2022
Assets
Investments
Fixed income securities, at fair value (amortized cost, net $49,649 and $45,370)	$	48,865	$	42,485
Equity securities, at fair value (cost $2,244 and $4,253)	2,411		4,567
Mortgage loans, net	822		762
Limited partnership interests	8,380		8,114
Short-term, at fair value (amortized cost $5,145 and $4,174)	5,144		4,173
Other investments, net	1,055		1,728
Total investments	66,677		61,829
Cash	722		736
Premium installment receivables, net	10,044		9,165
Deferred policy acquisition costs	5,940		5,442
Reinsurance and indemnification recoverables, net	8,809		9,619
Accrued investment income	539		423
Deferred income taxes	219		382
Property and equipment, net	859		987
Goodwill	3,502		3,502
Other assets, net	6,051		5,904
Total assets	103,362		97,989
Liabilities
Reserve for property and casualty insurance claims and claims expense	39,858		37,541
Reserve for future policy benefits	1,347		1,322
Contractholder funds	888		879
Unearned premiums	24,709		22,299
Claim payments outstanding	1,353		1,268

Other liabilities and accrued expenses	9,635		9,353
Debt	7,942		7,964
Total liabilities	85,732		80,626
Commitments and Contingent Liabilities (Note 7, 9 and 15)
Shareholders’ equity
Preferred stock and additional capital paid-in, $1 par value, 25 million shares authorized, 82.0 thousand and 81.0 thousand shares issued and outstanding, $2,050 and $2,025 aggregate liquidation preference	2,001		1,970
Common stock, $.01 par value, 2.0 billion shares authorized and 900 million issued, 262 million and 263 million shares outstanding	9		9
Additional capital paid-in	3,854		3,788
Retained income	49,716		50,970
Treasury stock, at cost (638 million and 637 million shares)	(37,110)		(36,857)
Accumulated other comprehensive income:
Unrealized net capital gains and losses	(604)		(2,255)
Unrealized foreign currency translation adjustments	(98)		(165)
Unamortized pension and other postretirement prior service credit	13		29
Discount rate for reserve for future policy benefits	(11)		(1)
Total accumulated other comprehensive loss	(700)		(2,392)
Total Allstate shareholders’ equity	17,770		17,488
Noncontrolling interest	(140)		(125)
Total equity	17,630		17,363
Total liabilities and equity	$	103,362	$	97,989

See notes to consolidated financial statements.

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2023 Form 10-K Financial Statements

The Allstate Corporation and Subsidiaries

Consolidated Statements of Shareholders’ Equity


	Years Ended December 31,
($ in millions, except per share data)	2023		2022		2021
Preferred stock par value	$	—	$	—	$	—
Preferred stock additional capital paid-in
Balance, beginning of year	1,970		1,970		1,970
Acquisition	—		—		450
Preferred stock issuance, net of issuance costs	587		—		—
Preferred stock redemption	(556)		—		(450)
Balance, end of year	2,001		1,970		1,970

Common stock par value	9		9		9
Common stock additional capital paid-in
Balance, beginning of year	3,788		3,722		3,498
Forward contract on accelerated share repurchase agreement	—		—		113
Equity incentive plans activity, net	66		66		111
Balance, end of year	3,854		3,788		3,722

Retained income
Balance, beginning of year	50,970		53,288		52,767
Cumulative effect of change in accounting principle	—		—		(21)
Net (loss) income	(188)		(1,289)		1,614
Dividends on common stock (declared per share of $3.56, $3.40 and $3.24)	(938)		(924)		(958)
Dividends on preferred stock	(128)		(105)		(114)
Balance, end of year	49,716		50,970		53,288

Treasury stock
Balance, beginning of year	(36,857)		(34,471)		(31,331)
Shares acquired	(332)		(2,496)		(3,262)
Shares reissued under equity incentive plans, net	79		110		122
Balance, end of year	(37,110)		(36,857)		(34,471)

Accumulated other comprehensive income (loss)
Balance, beginning of year	(2,392)		426		3,304
Cumulative effect of change in accounting principle	—		—		(277)
Change in unrealized net capital gains and losses	1,651		(2,853)		(2,583)
Change in unrealized foreign currency translation adjustments	67		(150)		(8)
Change in unamortized pension and other postretirement prior service credit	(16)		(43)		(59)
Change in discount rate for reserve for future policy benefits	(10)		228		49
Balance, end of year	(700)		(2,392)		426
Total Allstate shareholders’ equity	17,770		17,488		24,944

Noncontrolling interest
Balance, beginning of year	(125)		(52)		—
Acquisition	—		—		(16)
Change in unrealized net capital gains and losses	10		(20)		(3)
Noncontrolling loss	(25)		(53)		(33)
Balance, end of year	(140)		(125)		(52)
Total equity	$	17,630	$	17,363	$	24,892

See notes to consolidated financial statements.

The Allstate Corporation 101

2023 Form 10-K Financial Statements

The Allstate Corporation and Subsidiaries Consolidated Statements of Cash Flows


	Years Ended December 31,
($ in millions)	2023		2022		2021
Cash flows from operating activities
Net (loss) income	$	(213)	$	(1,342)	$	1,581
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation, amortization and other non-cash items	704		847		1,086
Net (gains) losses on investments and derivatives	300		1,072		(1,279)
Pension and other postretirement remeasurement (gains) losses	9		116		(644)
Amortization of deferred gain on reinsurance	—		—		(4)

Loss on disposition of operations, net of tax	—		—		4,031
Changes in:
Policy benefits and other insurance reserves	2,202		4,445		2,444
Unearned premiums	2,385		2,539		1,608
Deferred policy acquisition costs	(489)		(713)		(624)
Premium installment receivables, net	(861)		(1,038)		(498)
Reinsurance recoverables, net	807		451		(1,570)
Income taxes	(229)		(715)		353
Other operating assets and liabilities	(387)		(541)		(1,368)
Net cash provided by operating activities	4,228		5,121		5,116
Cash flows from investing activities
Proceeds from sales
Fixed income securities	22,973		31,494		31,774
Equity securities	5,400		10,969		4,513
Limited partnership interests	710		970		886

Other investments	594		1,071		1,406
Investment collections
Fixed income securities	1,641		728		2,284
Mortgage loans	81		163		860
Other investments	152		167		550
Investment purchases
Fixed income securities	(29,431)		(36,920)		(33,857)
Equity securities	(2,935)		(9,294)		(6,409)
Limited partnership interests	(890)		(1,258)		(1,766)
Mortgage loans	(145)		(104)		(221)
Other investments	(292)		(295)		(1,647)
Change in short-term and other investments, net	(617)		792		4,017
Purchases of property and equipment, net	(267)		(420)		(345)
Proceeds from sale of property and equipment	27		209		—
Acquisition of operations, net of cash acquired	—		—		(3,593)

Proceeds from disposition of operations, net of cash transferred	—		—		2,058
Net cash (used in) provided by investing activities	(2,999)		(1,728)		510
Cash flows from financing activities
Proceeds from issuance of debt	743		—		—
Redemption and repayment of debt	(750)		—		(436)
Proceeds from issuance of preferred stock	587		—		—
Redemption of preferred stock	(575)		—		(450)
Contractholder fund deposits	130		133		826
Contractholder fund withdrawals	(35)		(49)		(1,140)
Dividends paid on common stock	(925)		(926)		(885)
Dividends paid on preferred stock	(107)		(105)		(114)
Treasury stock purchases	(335)		(2,520)		(3,120)
Shares reissued under equity incentive plans, net	73		82		114
Other	(49)		(35)		(35)
Net cash used in financing activities	(1,243)		(3,420)		(5,240)
Net (decrease) increase in cash, including cash classified as assets held for sale	(14)		(27)		386
Cash from continuing operations at beginning of period	736		763		311
Cash classified as assets held for sale at beginning of period	—		—		66
Less: Cash classified as assets held for sale at end of period	—		—		—
Cash from continuing operations at end of period	$	722	$	736	$	763

See notes to consolidated financial statements.

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2023 Form 10-K Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements


Note 1			General

Basis of presentation

The accompanying 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 consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). All significant intercompany accounts and transactions have been eliminated. Certain amounts have been reclassified or recast to reflect the application of the new guidance to all in-scope long-duration insurance contracts to conform to current year presentation. Additional details of the new guidance are included in Note 2.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates.

Nature of operations

Allstate is engaged, principally in the United States, in the property and casualty insurance business. Allstate is one of the country’s largest personal property and casualty insurers and is organized into five reportable segments: Allstate Protection, Run-off Property-Liability, Protection Services, Allstate Health and Benefits, and Corporate and Other.

Allstate’s primary business is the sale of private passenger auto and homeowners insurance. The Company also offers several other personal property and casualty insurance products, select commercial property and casualty coverages, consumer product protection plans, device and mobile data collection services and analytic solutions using automotive telematics information, roadside assistance, protection and insurance products, employer voluntary benefits and group accident and health insurance and identity protection. Allstate primarily distributes its products through exclusive agents, financial specialists, independent agents and brokers, major retailers, contact centers and the internet.

On November 1, 2023, the Company announced that it is pursuing the sale of the Health and Benefits business.

Discontinued Operations and Held for Sale

A business is classified as held for sale when management having the authority to approve the action commits to a plan to sell the business, the sale is probable to occur during the next 12 months at a price that is reasonable in relation to its current fair value and certain other criteria are met. A business classified as held for sale is recorded at the lower of its carrying amount or estimated fair value less cost to sell. When the carrying amount of the business exceeds its estimated fair value less cost to sell, a loss is recognized and updated each reporting period as appropriate.

The Company completed its sale of the life and annuity business in 2021.

The results of operations of business classified as held for sale are reported as discontinued operations if the disposal represents a strategic shift that will have a major effect on the entity’s operations and financial results. The disposal of a reportable segment generally qualifies for discontinued operations presentation.

When a business is identified for discontinued operations reporting:

Results for prior periods are retrospectively reclassified as discontinued operations
Results of operations are reported in a single line, net of tax, in the Consolidated Statements of Operations
Assets and liabilities are reported as held for sale in the Consolidated Statements of Financial Position in the period in which the business is classified as held for sale

Additional details by major classification of operating results are included in Note 3.

Risks and uncertainties

Allstate has exposure to catastrophic events, including wind/hail, wildfires, tornadoes, hurricanes, tropical storms, earthquakes, severe freeze events, volcanic eruptions, terrorism and industrial accidents.

Catastrophes, an inherent risk of the property and casualty insurance business, have contributed, and will continue to contribute, to material year-to-year fluctuations in the Company’s results of operations and financial position (see Note 9). The nature and level of catastrophic loss experienced in any period cannot be predicted and could be material to results of operations and financial position.

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2023 Form 10-K Notes to Consolidated Financial Statements

The Company considers the following categories and locations to be the greatest areas of potential catastrophe losses:

Wildfires — California, Hawaii, Colorado, Oregon and Texas
Hurricanes — Major metropolitan centers in counties along the eastern and gulf coasts of the United States
Wind/Hail, Rain and Tornado — Texas, Illinois, Georgia and Colorado
Earthquakes and fires following earthquakes —Major metropolitan areas near fault lines in the states of California, Oregon, Washington, South Carolina and Kentucky


Note 2			Summary of Significant Accounting Policies

Investments

Fixed income securities include bonds and asset-backed securities (“ABS”). Fixed income securities, which may be sold prior to their contractual maturity, are designated as available-for-sale (“AFS”) and are carried at fair value. The difference between amortized cost, net of credit loss allowances (“amortized cost, net”) and fair value, net of deferred income taxes, is reflected as a component of accumulated other comprehensive income (“AOCI”). The Company excludes accrued interest receivable from the amortized cost basis of its AFS fixed income securities. Cash received from calls and make-whole payments is reflected as a component of proceeds from sales and cash received from maturities and pay-downs is reflected as a component of investment collections within the Consolidated Statements of Cash Flows.

Equity securities primarily include common stocks, exchange traded and mutual funds, non-redeemable preferred stocks and real estate investment trust equity investments. Certain exchange traded and mutual funds have fixed income securities as their underlying investments. Equity securities are carried at fair value. Equity securities without readily determinable or estimable fair values are measured using the measurement alternative, which is cost less impairment, if any, and adjustments resulting from observable price changes in orderly transactions for the identical or similar investment of the same issuer.

Mortgage loans and bank loans are carried at amortized cost, net, which represent the amount expected to be collected. The Company excludes accrued interest receivable from the amortized cost basis of its mortgage and bank loans. Credit loss allowances are estimates of expected credit losses, established for loans upon origination or purchase, and are established considering all relevant information available, including past events, current conditions, and reasonable and supportable forecasts over the life of the loans. Loans are evaluated on a pooled basis when they share similar risk characteristics; otherwise, they are evaluated individually.

Investments in limited partnership interests are primarily accounted for in accordance with the equity method of accounting (“EMA”) and include interests in private equity funds, real estate funds and other funds. Investments in limited partnership interests purchased prior to January 1, 2018, where the Company’s interest is so minor that it exercises virtually no influence over operating and financial policies, are accounted for at

fair value primarily utilizing the net asset value (“NAV”) as a practical expedient to determine fair value.

Short-term investments, including money market funds, commercial paper, U.S. Treasury bills and other short-term investments, are carried at fair value. Other investments primarily consist of bank loans, policy loans, real estate and derivatives. Bank loans are primarily senior secured corporate loans. Policy loans are carried at unpaid principal balances. Real estate is carried at cost less accumulated depreciation. Derivatives are carried at fair value.

Investment income primarily consists of interest, dividends, income from limited partnership interests, rental income from real estate, and income from certain derivative transactions.

Interest is recognized on an accrual basis using the effective yield method and dividends are recorded at the ex-dividend date. Interest income for ABS is determined considering estimated pay-downs, including prepayments, obtained from third-party data sources and internal estimates. Actual prepayment experience is periodically reviewed, and effective yields are recalculated when differences arise between the prepayments originally anticipated and the actual prepayments received and currently anticipated. For ABS of high credit quality with fixed interest rates, the effective yield is recalculated on a retrospective basis. For all others, the effective yield is generally recalculated on a prospective basis. Net investment income for AFS fixed income securities includes the impact of accreting the credit loss allowance for the time value of money. Accrual of income is suspended for fixed income securities when the timing and amount of cash flows expected to be received is not probable. Accrual of income is suspended for mortgage loans and bank 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 investments on nonaccrual status are generally recorded as a reduction of amortized cost.

Income from limited partnership interests carried at fair value is recognized based upon the changes in fair value of the investee’s equity primarily determined using NAV. Income from EMA limited partnership interests is recognized based on the Company’s share of the partnerships’ earnings. Income from EMA limited partnership interests is generally recognized on a three

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2023 Form 10-K Notes to Consolidated Financial Statements

month delay due to the availability of the related financial statements from investees.

Net gains and losses on investments and derivatives include gains and losses on investment sales, changes in the credit loss allowances related to fixed income securities, mortgage loans and bank loans, impairments, valuation changes of equity investments, including equity securities and certain limited partnerships where the underlying assets are predominately public equity securities, and periodic changes in fair value and settlements of certain derivatives, including hedge ineffectiveness. Net gains and losses on sales of investments and derivatives are determined on a specific identification basis and are net of credit losses already recognized through an allowance.

Derivative and embedded derivative financial instruments

Derivative financial instruments include interest rate swaps, credit default swaps, futures (interest rate and equity), options (including swaptions), warrants and stock rights, foreign currency forwards and total return swaps.

All derivatives are accounted for on a fair value basis and reported as other investments, other assets and other liabilities and accrued expenses. Embedded derivative instruments subject to bifurcation are also accounted for on a fair value basis and are reported together with the host contract. Cash flows from other derivatives are reported in cash flows from investing activities within the Consolidated Statements of Cash Flows.

For derivatives for which hedge accounting is not applied, the income statement effects, including fair value gains and losses and accrued periodic settlements, are reported either in net gains and losses on investments and derivatives or in a single line item together with the results of the associated asset or liability for which risks are being managed.

Securities loaned

The Company’s business activities include securities lending transactions, which are used primarily to generate net investment income. The proceeds received in conjunction with securities lending transactions can be reinvested in short-term investments or fixed income securities. These transactions are short-term in nature, usually 30 days or less.

The Company receives cash collateral for securities loaned in an amount generally equal to 102% and 105% of the fair value of domestic and foreign securities, respectively, and records the related obligations to return the collateral in other liabilities and accrued expenses. The carrying value of these obligations approximates fair value because of their relatively short-term nature. The Company monitors the market value of securities loaned on a daily basis and obtains additional collateral as necessary under the terms of the agreements to mitigate counterparty credit risk.

The Company maintains the right and ability to repossess the securities loaned on short notice.

Recognition of premium revenues and contract charges, and related benefits and interest credited

Property and casualty insurance premiums include premiums from personal lines policies, protection plans, other contracts (primarily protection and insurance products) and roadside assistance.

Personal lines insurance premiums are deferred and earned on a pro-rata basis over the terms of the policies, typically periods of six or twelve months.

Revenues related to protection plans, other contracts (primarily protection and insurance products) and roadside assistance are deferred and earned over the term of the contract in a manner that recognizes revenue as obligations under the contracts are fulfilled. Revenues from these products are classified as premiums as the products are backed by insurance. Protection plans and protection and insurance premiums are recognized using a cost-based incurrence method over the term of the contracts, which is generally one to five years. Roadside assistance premiums are recognized evenly over the term of the contract as performance obligations are fulfilled.

The portion of premiums written applicable to the unexpired terms of the policies is recorded as unearned premiums.


Unearned premiums
	December 31,
($ in millions)	2023		2022
Allstate Protection	$	19,542	$	17,538
Protection Services	5,150		4,745
Total	$	24,692	$	22,283

Protection Services For the year ended December 31, 2023, the Company recognized $1.74 billion of property and casualty insurance premiums for Protection Services that were included in the unearned premium balance as of December 31, 2022.

For the year ended December 31, 2022, the Company recognized $1.46 billion of property and casualty insurance premiums for Protection Services that were included in the unearned premium balance as of December 31, 2021.

The Company expects to recognize approximately $1.85 billion, $1.43 billion and $1.87 billion of the December 31, 2023 unearned premium balance in 2024, 2025 and thereafter, respectively.

Health and benefits Voluntary accident and health insurance products are expected to remain in force for an extended period and therefore are primarily classified as long-duration contracts. Traditional life insurance products consist principally of products with fixed and guaranteed premiums and benefits, primarily term and whole life insurance products. Premiums from these products are recognized as revenue when due from policyholders, net of any credit loss allowance for uncollectible premiums. Benefits are reflected in

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2023 Form 10-K Notes to Consolidated Financial Statements

accident, health and other policy benefits and recognized over the life of the policy in relation to premiums.

Interest-sensitive life contracts, such as universal life, are insurance contracts whose terms are not fixed and guaranteed. The terms that may be changed include premiums paid by the contractholder, interest credited to the contractholder account balance and contract charges assessed against the contractholder account balance. Premiums from these contracts are reported as contractholder fund deposits. Contract charges consist of fees assessed against the contractholder account balance for the cost of insurance (mortality risk), contract administration and surrender of the contract prior to contractually specified dates. These contract charges are recognized as revenue when assessed against the contractholder account balance. Benefit payments in excess of the contractholder account balance are reflected in accident, health and other policy benefits.

Interest credited to contractholder funds, which are reported in accident, health and other policy benefits, represents interest accrued or paid on interest-sensitive life contracts. Crediting rates for interest-sensitive life contracts are adjusted periodically by the Company to reflect current market conditions subject to contractually guaranteed minimum rates.

Premium installment receivables represent premiums written and not yet collected, net of the credit loss allowance for uncollectible premiums. These receivables are primarily outstanding for one year or less. The Company utilizes historical internal data including aging analyses to estimate allowances under current conditions and for the forecast period. The Company regularly evaluates and updates the data and adjusts its allowance as appropriate.


Rollforward of credit loss allowance for premium installment receivables
	For the years ended December 31,
($ in millions)	2023		2022
Beginning balance	$	(132)	$	(107)
Increase in the provision for credit losses	(348)		(313)
Write-off of uncollectible premium installment receivable amounts	342		288
Ending balance	$	(138)	$	(132)

Other revenue

Other revenue represents fees collected from policyholders relating to premium installment payments, commissions on sales of non-proprietary products, sales of identity protection services, fee-based services and other revenue transactions. Other revenue is recognized when performance obligations are fulfilled.

The Company collects service fees in the form of commission and general agent fees by selling policies

issued by third-party insurance companies. The Company recognizes Medicare-related and other accident and health commission revenues equal to the estimated lifetime value of the revenues at the time when the policy is sold, net of an allowance for estimated policy cancellations, as no further performance obligations exist. The allowance for estimated third-party cancellations is periodically evaluated and adjusted as necessary.

Deferred policy acquisition costs

Deferred policy acquisition costs (“DAC”) are related directly to the successful acquisition of new or renewal insurance contracts and are deferred and recognized as an expense over the life of the related contracts. These costs are principally agent and broker remuneration, premium taxes and certain underwriting expenses and are included in amortization of deferred policy acquisition costs on the Consolidated Statements of Operations. All other acquisition costs are expensed as incurred and included in operating costs and expenses.

Customers of the Company may exchange one insurance policy for another offered by the Company, or make modifications to an existing life, accident and health or property and casualty contract issued by the Company. These transactions are identified as internal replacements for accounting purposes. Internal replacement transactions determined to result in replacement contracts that are substantially unchanged from the replaced contracts are accounted for as continuations of the replaced contracts. Unamortized DAC related to the replaced contracts continue to be deferred and amortized in connection with the replacement contracts. For traditional life, accident and health and property and casualty insurance policies, any changes to unamortized DAC that result from replacement contracts are treated as prospective revisions and any costs associated with the issuance of replacement contracts are characterized as maintenance costs and expensed as incurred.

Property and casualty insurance For property and casualty insurance, DAC is amortized into income as premiums are earned pro rata over the period of the policy. DAC associated with property and casualty insurance is periodically reviewed for recoverability and adjusted if necessary. Future investment income is considered in determining the recoverability of DAC.

Long-duration voluntary accident and health insurance, traditional life insurance contracts, and interest-sensitive life insurance contracts Voluntary accident and health insurance and traditional life insurance contracts are grouped by product and issue year into cohorts consistent with the cohorts used to calculate the reserve for future policy benefits (“RFPB”). Interest-sensitive life insurance contracts are grouped into cohorts by issue year, and the issue year is determined based on contract issue date. DAC is amortized on a constant level basis over the expected contract term. The constant level basis used for all cohorts is based on policies-in-force. The expected contract term and mortality, morbidity, and lapse

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assumptions are used to calculate both DAC amortization and the RFPB. If actual contract lapses are greater than expected lapses for any cohort, each affected cohort’s DAC balance will be reduced in the current period based on the difference between the actual and expected lapses. No adjustments to DAC amortization are recorded if actual contract lapses are less than expected lapses for any cohort. If the Company makes an update to any of its mortality, morbidity, or lapse assumptions, the Company will use the assumptions prospectively to amortize any cohort’s remaining DAC over the remaining expected contract term.

Present value of future profits The costs assigned to the right to receive future cash flows from certain business purchased from other insurers are also classified as DAC in the Consolidated Statements of Financial Position. The costs capitalized represent the present value of future profits expected to be earned over the lives of the contracts acquired.

The Company amortizes the present value of future profits for long-duration voluntary accident and health insurance, traditional life insurance contracts and interest-sensitive life insurance contracts using the same methodology and assumptions as the amortization of DAC. The present value of future profits for these products is subject to premium deficiency testing.

For property and casualty insurance, these costs are amortized as profits emerge over the lives of the acquired business and are periodically evaluated for recoverability.

The present value of future profits was $8 million and $10 million as of December 31, 2023 and 2022, respectively. Amortization expense of the present value of future profits was $2 million, $11 million and $324 million in 2023, 2022 and 2021, respectively.

Reinsurance and indemnification

Reinsurance In the normal course of business, the Company seeks to limit aggregate and single exposure to losses on large risks by purchasing reinsurance. The Company has also used reinsurance to affect the disposition of certain blocks of business. Reinsurance does not extinguish the Company’s primary liability under the policies written. Therefore, in addition to establishing allowances as appropriate after evaluating reinsurers’ activities related to claims settlement practices and commutations, the Company evaluates reinsurer counterparty credit risk and records reinsurance recoverables net of credit loss allowances. The Company assesses counterparty credit risk for individual reinsurers separately when more relevant or on a pooled basis when shared risk characteristics exist. The evaluation considers the credit quality of the reinsurer and the period over which the recoverable balances are expected to be collected. The Company considers factors including past events, current conditions and reasonable and supportable forecasts in the development of the estimate of credit loss allowances.

Allowances for property and casualty and accident and health reinsurance recoverables are established primarily through risk-based evaluations.

The property and casualty recoverable evaluation considers the credit rating of the reinsurer, the period over which the reinsurance recoverable balances are expected to be recovered and other relevant factors including historical experience of reinsurer failures. Reinsurers in liquidation or in default status are evaluated individually using the Company’s historical liquidation recovery assumptions and any other relevant information available including the most recent public information related to the financial condition or liquidation status of the reinsurer. For accident and health reinsurance recoverables, the Company uses a probability of default and loss given default model developed independently of the Company to estimate current expected credit losses. The accident and health reinsurance recoverable evaluation utilizes factors including historical industry factors based on the probability of liquidation, and incorporates current loss given default factors reflective of the industry.

The Company monitors the credit ratings of reinsurer counterparties and evaluates the circumstances surrounding credit rating changes as inputs into its credit loss assessments. Uncollectible reinsurance recoverable balances are written off against the allowances when there is no reasonable expectation of recovery.

The changes in the allowances are reported in property and casualty insurance claims and claims expense and accident, health and other policy benefits.

Indemnification The Company also participates in various indemnification mechanisms, including industry pools and facilities, which are reimbursement mechanisms that assess participating insurers for expected insured claims, reimburse participating insurers for qualifying paid claims and permit participating insurers to recoup amounts assessed directly from insureds. Indemnification recoverables are backed by the financial resources of the property and casualty insurance company market participants.

The design and function of these indemnification programs does not result in the retention of insurance or reinsurance risk by the indemnitee. Based on the Company’s evaluation of these programs on an individual basis, the establishment of credit loss allowances is not warranted at this time. The Company has not experienced any historical credit losses related to its indemnification programs. The Company continues to monitor these programs to determine whether any changes from historical experience have emerged or are expected to emerge or whether there have been any changes in the design or administration of the programs that would require establishment of credit loss allowances.

Revenue recognition The amounts reported as reinsurance and indemnification recoverables include amounts paid and due from reinsurers and indemnitors as well as estimates of amounts expected to be

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recovered from reinsurers and indemnitors on insurance liabilities that have been incurred but not yet paid. Reinsurance and indemnification recoverables on unpaid losses are estimated based upon assumptions consistent with those used in establishing the liabilities related to the underlying contract. Reinsurance and indemnification premiums are generally reflected in income in a manner consistent with the recognition of premiums on the associated contracts. For catastrophe coverage, the cost of reinsurance premiums is recognized ratably over the contract period to the extent coverage remains available. Certain catastrophe agreements are subject to reinstatement premiums which are recorded as catastrophe losses when earned.

Goodwill

Goodwill represents the excess of amounts paid for acquiring businesses over the fair value of the net assets acquired, less any impairment of goodwill recognized. The Company’s goodwill reporting units are equivalent to its reportable segments to which goodwill has been assigned: Allstate Protection, Protection Services, and Allstate Health and Benefits.


Goodwill by reporting unit
	December 31,
($ in millions)	2023		2022
Allstate Protection	$	1,563	$	1,563
Protection Services	1,494		1,494
Allstate Health and Benefits	445		445
Total	$	3,502	$	3,502

Goodwill is recognized when acquired and allocated to reporting units based on which unit is expected to benefit from the synergies of the business combination. Goodwill is not amortized but is tested for impairment at least annually. The Company performs its annual goodwill impairment testing during the fourth quarter of each year based upon data as of the close of the third quarter. Goodwill impairment is measured and recognized as the amount by which a reporting unit’s carrying value, including goodwill, exceeds its fair value, not to exceed the carrying amount of goodwill allocated to the reporting unit. The Company also reviews goodwill for impairment whenever events or changes in circumstances, such as deteriorating or adverse market conditions, indicate that it is more likely than not that the carrying amount of the reporting unit including goodwill may exceed the fair value of the reporting unit. The goodwill impairment analysis is performed at the reporting unit level.

As of December 31, 2023 and 2022, the fair value of the Company’s goodwill reporting units exceeded their carrying values.

Intangible assets

Intangible assets (reported in other assets) consist of capitalized costs primarily related to acquired distribution and customer relationships, trade names and licenses, technology and other assets. The estimated useful lives of distribution and customer relationships, technology and other intangible assets

are generally 10 years, 5 years and 5 years, respectively. Intangible assets are carried at cost less accumulated amortization.


Intangible assets by type
	December 31,
($ in millions)	2023		2022
Distribution and customer relationships	$	515	$	697
Trade names and licenses	159		179
Technology and other	292		301
Total	$	966	$	1,177

Amortization expense is calculated using an accelerated amortization method. Amortization expense on intangible assets was $329 million, $353 million and $376 million in 2023, 2022 and 2021, respectively.


Amortization expense of intangible assets for the next five years and thereafter
($ in millions)
2024	$	271
2025	215
2026	147
2027	98
2028	54
Thereafter	42
Total amortization	$	827

Accumulated amortization of intangible assets was $1.80 billion and $1.48 billion as of December 31, 2023 and 2022, respectively.

Trade names and licenses are considered to have an indefinite useful life and are reviewed for impairment at least annually or more frequent if circumstances arise that indicate an impairment may have occurred. An impairment is recognized if the carrying amount of the asset exceeds its estimated fair value.

Property and equipment

Property and equipment is carried at cost less accumulated depreciation. Included in property and equipment are capitalized costs related to computer software licenses and software developed for internal use. These costs generally consist of certain external payroll and payroll related costs. Property and equipment depreciation is calculated using the straight-line method over the estimated useful lives of the assets, generally 3 to 10 years for equipment and 40 years for real property. Depreciation expense is reported in operating costs and expenses. Accumulated depreciation on property and equipment was $2.59 billion and $2.45 billion as of December 31, 2023 and 2022, respectively. Depreciation expense on property and equipment was $343 million, $335 million and $411 million in 2023, 2022 and 2021, respectively. The Company reviews its property and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

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Income taxes

Income taxes are accounted for using the asset and liability method under which deferred tax assets and liabilities are recognized for temporary differences between the financial reporting and tax bases of assets and liabilities at the enacted tax rates. A deferred tax asset valuation allowance is established when it is more likely than not such assets will not be realized. The Company recognizes interest expense related to income tax matters in income tax expense and penalties in operating costs and expenses.

Reserve for property and casualty insurance claims and claims expense

The reserve for property and casualty insurance claims and claims expense is the estimate of amounts necessary to settle all reported and unreported incurred claims for the ultimate cost of insured property and casualty losses, based upon the facts of each case and the Company’s experience with similar cases. Estimated amounts of salvage and subrogation are deducted from the reserve for claims and claims expense. The establishment of appropriate reserves, including reserves for catastrophe losses, is an inherently uncertain and complex process. Reserve estimates are primarily derived using an actuarial estimation process in which historical loss patterns are applied to actual paid losses and reported losses (paid losses plus individual case reserves established by claim adjusters) for an accident or report year to create an estimate of how losses are likely to develop over time. Development factors are calculated quarterly and periodically throughout the year for data elements such as claims reported and settled, paid losses, and paid losses combined with case reserves.

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. The effects of inflation are implicitly considered in the reserving process as a development factor using historic data incorporated as a reasonable estimate of future inflation. The historical development patterns for these data elements are used as the assumptions to calculate reserve estimates, including the reserves for reported and unreported claims; however, when the Company experiences changes it may lead to historical development trends being less predictive of future loss development, potentially creating additional reserve variability. Reserve estimates are regularly reviewed and updated, using the most current data and information available. Any resulting reestimates are reflected in current results of operations.

Reserve for future policy benefits

Long-duration voluntary accident and health insurance and traditional life insurance contracts The reserve for future policy benefits (“RFPB”) is calculated using the net premium reserving model, which uses the present value of insurance contract benefits less the present value of net premiums. Under the net premium reserving model, the Company computes a net

premium ratio which is the present value of insurance contract benefits divided by the present value of gross premiums. The present value of contract benefits and gross premiums are determined using the discount rate at contract inception. The net premium ratio is applied to premiums due on a periodic basis to compute the RFPB. The net premium ratio is recomputed at least annually using both actual historical cash flows and future cash flows anticipated over the life of the cohort of contracts subject to measurement. Assumptions including mortality, morbidity, and lapses affect the timing and amount of estimated cash flows used to calculate the RFPB.

The Company has grouped contracts into cohorts based on product type and issue year. Examples of insurance product types include whole life, term life, critical illness and disability. Issue year is based on the issuance date of the contract to the policyholder, except in the case of contracts acquired in a business combination, where the issue date is based on the acquisition date of the business combination. The RFPB is calculated for contracts in force at the end of each period, which results in the Company recognizing the effects of actual experience in the period it occurs.

Annually, in the third quarter, the Company obtains historical premiums and benefits information and evaluates future cash flow assumptions that include mortality, morbidity, and lapses, and updates cash flow assumptions as necessary. The Company has elected to not update the expense assumption when annually reviewing and updating future cash flow assumptions. Actual premiums and benefits and any updates to future cash flow assumptions are incorporated into the calculation of an updated net premium ratio. Updates for actual premiums and benefits and changes to future cash flow assumptions will result in a liability remeasurement gain or loss. The first step to determining the liability remeasurement gain or loss is to calculate the RFPB using revised net premiums discounted at the locked-in discount rate set at contract issuance. The result of the first step is then compared to the carrying amount of the RFPB before the updates for actual experience and changes to future cash flow assumptions. The decrease (gain) or increase (loss) in the RFPB is reported as liability remeasurement gain or loss in net income and presented parenthetically as part of accident, health and other policy benefits on the Consolidated Statements of Operations. The updated net premium ratio is used in future quarters to measure the RFPB until the next annual update or an earlier date if the Company determines it is necessary to revise future cash flow assumptions based on available evidence, including actual experience.

The discount rate assumption is determined using a yield curve approach. The yield curve consists of U.S. dollar-denominated senior unsecured fixed-income securities issued by U.S. companies that have an A credit rating based on the ratings provided by nationally recognized rating agencies that include Moody’s, Standard & Poor’s, and Fitch. For points on the yield curve that do not have observable yields, the Company uses linear interpolation which calculates the

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2023 Form 10-K Notes to Consolidated Financial Statements

unobservable yield based on the two nearest observable yields, except for any points beyond the last observable yield at 30 years, where interest rates are held constant with the last observable point on the yield curve. The Company updates the current discount rate quarterly and the change in the RFPB resulting from the updated current discount rate is recognized in other comprehensive income (“OCI”).

Accident and health short-duration contracts The RFPB includes unpaid losses and loss adjustment expense (“LAE”) reserves for individual and certain voluntary accident and health short-duration contracts and is an estimate of the Company’s liability from incurred claims at the end of the reporting period. The unpaid losses and LAE reserves are the result of an ongoing analysis of recent loss development trends and emerging historical experience. Original estimates are increased or decreased as additional information becomes known regarding individual claims. In setting its reserves, the Company reviews its loss data to estimate expected loss development. Management believes that its use of standard actuarial methodology applied to its analyses of its historical experience provides a reasonable estimate of future losses. However, actual future losses may differ from the Company’s estimate, and may be affected by future events, including inflation and changes in law and judicial interpretations, which would favorably or unfavorably impact the ultimate settlement of the Company’s losses and LAE.

The anticipated effect of inflation is implicitly considered when estimating liabilities for losses and LAE. In addition to inflation, the average severity of claims is affected by a number of factors that may vary by types and features of policies written. Future average severities are projected from historical trends, adjusted for implemented changes in underwriting standards and policy provisions, as well as general economic trends. These estimated trends are monitored and revised as necessary based on actual development.

Unpaid losses include a provision for incurred-but-not-reported (“IBNR”) reserve estimates representing claims that have occurred but have not yet been reported, some of which are not yet known to the insured, as well as a provision for future development on reported claims. IBNR reserves are generally calculated by first projecting the ultimate cost of all claims that have occurred and then subtracting reported losses and loss expenses. Reported losses include cumulative paid losses and loss expenses plus case reserves.

Contractholder funds

Contractholder funds represent interest-bearing liabilities arising primarily from the sale of interest-sensitive life insurance contracts. Contractholder funds primarily comprise cumulative deposits received and interest credited to the contractholder less cumulative contract benefits, surrenders, withdrawals and contract charges for mortality or administrative expenses.

Pension and other postretirement remeasurement gains and losses

The Company’s policy is to remeasure its pension and postretirement plans on a quarterly basis. Pension and other postretirement gains and losses represent the remeasurement of projected benefit obligations and differences between the expected and actual return on plan assets, which are immediately recognized in earnings and are referred to as pension and other postretirement remeasurement gains and losses on the Consolidated Statements of Operations.

The primary factors contributing to pension and postretirement remeasurement gains and losses are:


• Changes in the discount rate used to value pension and postretirement obligations as of the measurement date
• Differences between the expected and the actual return on plan assets
• Changes in demographic assumptions, including mortality and participant experience
• Changes in lump sum interest rates used to value pension obligations as of the measurement date

Differences in actual experience and changes in other assumptions affect the Company’s pension and other postretirement obligations and expenses.

Pension and other postretirement service cost, interest cost, expected return on plan assets and amortization of prior service credits are allocated to the Company’s reportable segments. The pension and other postretirement remeasurement gains and losses are reported in the Corporate and Other segment.

Legal contingencies

The Company reviews its lawsuits, regulatory inquiries, and other legal proceedings on an ongoing basis. 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’s 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.

Debt

Debt includes senior notes, senior debentures, subordinated debentures and junior subordinated debentures issued by the Corporation. Unamortized debt issuance costs and fair value adjustments are reported in debt and are amortized over the expected period the debt will remain outstanding.

Equity incentive plans

The Company has equity incentive plans under which it grants nonqualified stock options, restricted stock units and performance stock awards (“equity awards”) to certain employees and directors of the Company. The Company measures the fair value of equity awards at the grant date and recognizes the

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expense over the shorter of the period in which the requisite service is rendered or retirement eligibility is attained. The expense for performance stock awards with no market condition is adjusted each period to reflect the performance factor most likely to be achieved at the end of the performance period. The expense for performance stock awards with a market condition is based on the fair value of the awards at the grant date which incorporates the probability of achieving the market condition. In the event the market condition is not met, any previously recognized expense is not reversed. The Company uses a binomial lattice model to determine the fair value of employee stock options. The Company uses a Monte Carlo simulation model to determine the fair value of performance stock awards with a market condition.

Measurement of credit losses

The Company carries an allowance for expected credit losses for all financial assets measured at

amortized cost on the Consolidated Statements of Financial Position. The Company considers past events, current conditions, and reasonable and supportable forecasts in estimating an allowance for credit losses. The Company also carries a credit loss allowance for fixed income securities where applicable and, when amortized cost is reported, it is net of credit loss allowances. For additional information, refer to the Investments, Reinsurance and indemnification or Recognition of premium revenues and contract charges topics of this section.

The Company also estimates a credit loss allowance for commitments to fund mortgage loans and bank loans unless they are unconditionally cancellable by the Company. The related allowance is reported in other liabilities and accrued expenses.


Allowance for credit losses
	As of December 31,
($ in millions)	2023		2022
Fixed income securities	$	36	$	13
Mortgage loans	11		7
Bank loans	22		57
Investments	69		77
Premium installment receivables	138		132
Reinsurance recoverables	65		65
Other assets	18		19
Assets	290		293

Commitments to fund mortgage loans and bank loans	1		—
Liabilities	1		—
Total	$	291	$	293

Leases

The Company has certain operating leases for office facilities, computer and office equipment, and vehicles. The Company’s leases have remaining lease terms of generally 1 year to 10 years, some of which include options to extend the leases for up to 20 years, and some of which include options to terminate the leases within 45 days.

The Company determines if an arrangement is a lease at inception. Leases with an initial term less than one year are not recorded on the balance sheet and the lease costs for these leases are recorded as an expense on a straight-line basis over the lease term. Operating leases with terms greater than one year result in a lease liability recorded in other liabilities and accrued expenses with a corresponding right-of-use (“ROU”) asset recorded in other assets on the Consolidated Statements of Financial Position. As of December 31, 2023 and 2022, the Company had $265 million and $343 million in lease liabilities and $163 million and $234 million in ROU assets, respectively.

Operating lease liabilities are recognized at the commencement date based on the present value of future minimum lease payments over the lease term. ROU assets are recognized based on the

corresponding lease liabilities adjusted for qualifying initial direct costs, prepaid or accrued lease payments and unamortized lease incentives. As most of the Company’s leases do not disclose the implicit interest rate, the Company uses collateralized incremental borrowing rates based on information available at lease commencement when determining the present value of future lease payments. The Company has lease agreements with lease and non-lease components, which are accounted for as a single lease. Lease terms may include options to extend or terminate the lease which are incorporated into the Company’s measurements when it is reasonably certain that the Company will exercise the option.

Operating lease costs are recognized on a straight-line basis over the lease term and include interest expense on the lease liability and amortization of the ROU asset. Variable lease costs are expensed as incurred and include maintenance costs and real estate taxes. Lease costs are reported in operating costs and expenses and totaled $102 million, $131 million and $162 million, including $19 million, $23 million and $30 million of variable lease costs in 2023, 2022 and 2021, respectively.

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Other information related to operating leases
	December 31,
	2023		2022
Weighted average remaining lease term (years)	3		4
Weighted average discount rate	3.48	%	3.08	%


Maturity of lease liabilities
($ in millions)	Operating leases
2024	$	92
2025	77
2026	48
2027	30
2028	18
Thereafter	20
Total lease payments	$	285
Less: interest	(20)
Present value of lease liabilities	$	265

Variable interest entities

A VIE is a legal entity that does not have sufficient equity at risk to finance its activities without additional financial support or is structured such that equity investors lack the ability to make significant decisions relating to the entity’s operations through voting rights or do not participate in the gains and losses of the entity. The Company consolidates VIEs in which the Company is deemed the primary beneficiary. The primary beneficiary is the entity that has both (1) the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE and (2) the power to direct the activities of the VIE that most significantly affect that entity’s economic performance.

Foreign currency translation

The local currency of the Company’s foreign subsidiaries is deemed to be the functional currency of the country in which these subsidiaries operate. The financial statements of the Company’s foreign subsidiaries are translated into U.S. dollars at the exchange rate in effect at the end of a reporting period for assets and liabilities and at average exchange rates during the period for results of operations.

The unrealized gains and losses from the translation of the net assets are recorded as unrealized foreign currency translation adjustments and included in AOCI. Changes in unrealized foreign currency translation adjustments are included in OCI. Gains and losses from foreign currency transactions are reported in operating costs and expenses and have not been material.

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 and unvested non-participating restricted stock units and contingently issuable performance stock awards. The effect of dilutive potential common shares does not include 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.

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Computation of basic and diluted earnings per common share
	For the years ended December 31,
($ in millions, except per share data)	2023		2022		2021
Numerator:
Net (loss) income from continuing operations	$	(213)	$	(1,342)	$	5,174
Less: Net loss attributable to noncontrolling interest	(25)		(53)		(33)
Net (loss) income from continuing operations attributable to Allstate	(188)		(1,289)		5,207
Less: Preferred stock dividends	128		105		114
Net (loss) income from continuing operations applicable to common shareholders	(316)		(1,394)		5,093
Income (loss) from discontinued operations, net of tax	—		—		(3,593)
Net (loss) income applicable to common shareholders	$	(316)	$	(1,394)	$	1,500

Denominator:
Weighted average common shares outstanding	262.5		271.2		294.8
Effect of dilutive potential common shares (1):
Stock options	—		—		2.7
Restricted stock units (non-participating) and performance stock awards	—		—		1.6
Weighted average common and dilutive potential common shares outstanding	262.5		271.2		299.1

Earnings per share applicable to common shareholders
Basic
Continuing operations	$	(1.20)	$	(5.14)	$	17.28
Discontinued operations	—		—		(12.19)
Total	$	(1.20)	$	(5.14)	$	5.09

Diluted (1)
Continuing operations	$	(1.20)	$	(5.14)	$	17.03
Discontinued operations	—		—		(12.02)
Total	$	(1.20)	$	(5.14)	$	5.01

Anti-dilutive options excluded from diluted earnings per common share	3.0		1.7		1.3
Weighted average dilutive potential common shares excluded due to net loss applicable to common shareholders (1)	2.2		3.1		—

(1)As a result of the net loss reported for the years ended December 31, 2023 and 2022, 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.

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2023 Form 10-K Notes to Consolidated Financial Statements

Adopted accounting standard

Accounting for Long-Duration Insurance Contracts Effective January 1, 2023, the Company adopted the Financial Accounting Standards Board (”FASB”) guidance revising the accounting for certain long-duration insurance contracts using the modified retrospective approach to the transition date of January 1, 2021.

Under the new guidance, measurement assumptions, including those for mortality, morbidity and policy lapses, are required to be reviewed at least annually, and updated as appropriate. In addition, reserves under the new guidance are required to be discounted using an upper-medium grade fixed income instrument yield that is updated through OCI at each reporting date. Additionally, DAC for all long-duration products are amortized on a simplified basis. Also, the Company’s reserve for future policy benefits and DAC are subject to new disclosure guidance.

In addition, the Company met the conditions included in Accounting Standards Update No. 2022-05, Transition for Sold Contracts, and elected to not apply the new guidance for contracts that were part of the 2021 sales of Allstate Life Insurance Company (“ALIC”) and Allstate Life Insurance Company of New York (“ALNY”).


After-tax cumulative effect of change in accounting principle on transition date
($ in millions)	January 1, 2021
Decrease in retained income	$	21
Decrease in AOCI	277
Total decrease in equity	$	298

The decrease in AOCI was primarily attributable to a change in the discount rate used in measuring the reserve for future policy benefits for traditional life contracts and other long-term products with guaranteed terms from a portfolio-based rate at contract issuance to an upper-medium grade fixed income-based rate. The decrease in retained income primarily related to certain cohorts of long-term contracts whose expected net premiums exceeded expected gross premiums which resulted in an increase in reserves and a decrease in retained income equal to the present value of expected future benefits less the present value of expected future premiums at the transition date.

Transition disclosures The following tables summarize the balance of and changes in the reserve for future policy benefits and DAC on January 1, 2021 upon the adoption of the guidance.


Impact of adoption for reserve for future policy benefits
( $ in millions)	Accident and health		Traditional life		Total
Pre-adoption 12/31/2020 balance (1)	$	728	$	311	$	1,039

Adjustments:
Effect of the remeasurement of the reserve at upper-medium grade fixed income-based rate (2)	232		153		385

Adjustments for contracts with net premiums in excess of gross premiums (3)	77		—		77
Total adjustments	309		153		462
Post-adoption 1/1/2021 balance	1,037		464		1,501
Less: reinsurance recoverables (4)	159		3		162
Post-adoption 1/1/2021 balance, after reinsurance recoverables	$	878	$	461	$	1,339

(1)Traditional life includes $11 million in reserves related to riders of traditional life insurance products reclassified from contractholder funds.

(2)Adjustment reflected with a corresponding decrease to AOCI.

(3)Adjustment reflected with a corresponding decrease to retained income.

(4)Represents post-adoption January 1, 2021 balance of reinsurance recoverables. Adjustments to reinsurance recoverables for accident and health products increased January 1, 2021 AOCI by $33 million due to the remeasurement of the reserve at upper-medium grade fixed income based rate and increased January 1, 2021 retained income by $51 million due to adjustments for contracts with net premiums in excess of gross premiums.


Impact of adoption for DAC
( $ in millions)	Accident and health		Traditional life		Interest- sensitive life		Total
Pre-adoption 12/31/2020 balance	$	343	$	32	$	95	$	470
Adjustment for removal of impact of unrealized gains or losses (1)	—		—		2		2

Post-adoption 1/1/2021 balance	$	343	$	32	$	97	$	472

(1)Adjustment reflected with a corresponding increase to AOCI.

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Impacts of the adoption on the financial statements


Consolidated Statements of Operations
($ in millions, except per share data)	As reported		Impact of change		As adjusted
	Year ended December 31, 2022
Revenues
Accident and health insurance premiums and contract charges	$	1,833	$	(1)	$	1,832
Total revenues	51,412		(1)		51,411

Costs and expenses
Accident, health and other policy benefits	1,061		(19)		$	1,042
Amortization of deferred policy acquisition costs	6,644		(10)		$	6,634

Total costs and expenses	53,270		(29)		53,241

Loss from operations before income tax expense	(1,858)		28		(1,830)
Income tax benefit	(494)		6		(488)
Net loss	(1,364)		22		(1,342)
Net loss attributable to Allstate	(1,311)		22		(1,289)
Net loss applicable to common shareholders	$	(1,416)	$	22	$	(1,394)

Earnings per common share:
Net loss applicable to common shareholders per common share - Basic	$	(5.22)	$	0.08	$	(5.14)
Net loss applicable to common shareholders per common share - Diluted	(5.22)		0.08		(5.14)
	Year ended December 31, 2021
Revenues
Accident and health insurance premiums and contract charges	$	1,821	$	13	$	1,834
Total revenues	50,588		13		50,601

Costs and expenses
Accident, health and other policy benefits	1,049		11		1,060
Amortization of deferred policy acquisition costs	6,252		(16)		6,236

Total costs and expenses	44,140		(5)		44,135

Income from operations before income tax expense	6,448		18		6,466
Income tax benefit	1,289		3		1,292
Net income from continuing operations	5,159		15		5,174
Net income	1,566		15		1,581
Net income attributable to Allstate	1,599		15		1,614
Net income applicable to common shareholders	$	1,485	$	15	$	1,500

Earnings per common share:
Net income from continuing operations applicable to common shareholders per common share - Basic	$	17.23	$	0.05	$	17.28
Net income applicable to common shareholders per common share - Basic	5.04		0.05		5.09
Net income from continuing operations applicable to common shareholders per common share - Diluted	16.98		0.05		17.03
Net income applicable to common shareholders per common share - Diluted	4.96		0.05		5.01

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2023 Form 10-K Notes to Consolidated Financial Statements


Consolidated Statements of Comprehensive Income (Loss)
($ in millions)	As reported		Impact of change		As adjusted
	Year ended December 31, 2022
Net loss	$	(1,364)	$	22	$	(1,342)

Other comprehensive loss, after-tax
Changes in:
Unrealized net capital gains and losses	(2,851)		(2)		(2,853)
Discount rate for reserve for future policy benefits	—		228		228
Other comprehensive loss, after-tax	(3,044)		226		(2,818)

Comprehensive loss	(4,408)		248		(4,160)
Comprehensive loss attributable to Allstate	$	(4,335)	$	248	$	(4,087)
	Year ended December 31, 2021
Net income	$	1,566	$	15	$	1,581

Other comprehensive loss, after-tax
Changes in:
Unrealized net capital gains and losses	(2,582)		(1)		(2,583)
Discount rate for reserve for future policy benefits	—		49		49
Other comprehensive loss, after-tax	(2,649)		48		(2,601)

Comprehensive loss	(1,083)		63		(1,020)
Comprehensive loss attributable to Allstate	$	(1,047)	$	63	$	(984)


Consolidated Statements of Financial Position
($ in millions)	As reported		Impact of change		As adjusted
	December 31, 2022
Assets
Deferred policy acquisition costs	$	5,418	$	24	$	5,442
Reinsurance and indemnification recoverables, net	9,606		13		9,619
Deferred income taxes	386		(4)		382
Other assets, net	5,905		(1)		5,904
Total assets	97,957		32		97,989
Liabilities
Reserve for future policy benefits	1,273		49		1,322
Contractholder funds	897		(18)		879
Unearned premiums	22,311		(12)		22,299

Total liabilities	80,607		19		80,626
Equity
Retained income	50,954		16		50,970
Accumulated other comprehensive income (loss):
Unrealized net capital gains and losses	(2,253)		(2)		(2,255)
Discount rate for reserve for future policy benefits	—		(1)		(1)
Total AOCI	(2,389)		(3)		(2,392)
Total Allstate shareholders’ equity	17,475		13		17,488
Total equity	17,350		13		17,363
Total liabilities and equity	$	97,957	$	32	$	97,989

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Consolidated Statements of Shareholders’ Equity
($ in millions)	As reported		Impact of change		As adjusted
	Year ended December 31, 2022
Retained income
Balance, beginning of period	$	53,294	$	(6)	$	53,288
Net loss	(1,311)		22		(1,289)
Balance, end of period	50,954		16		50,970

Accumulated other comprehensive income (loss)
Balance, beginning of period	655		(229)		426
Change in unrealized net capital gains and losses	(2,851)		(2)		(2,853)
Change in discount rate for reserve for future policy benefits	—		228		228
Balance, end of period	(2,389)		(3)		(2,392)

Total Allstate shareholders’ equity	17,475		13		17,488
Total equity	$	17,350	$	13	$	17,363
	Year ended December 31, 2021
Retained income
Balance, beginning of period	$	52,767	$	—	$	52,767
Cumulative effect of change in accounting principle	—		(21)		(21)
Net income	1,599		15		1,614
Balance, end of period	53,294		(6)		53,288

Accumulated other comprehensive income (loss)
Balance, beginning of period	3,304		—		3,304
Cumulative effect of change in accounting principle	—		(277)		(277)
Change in unrealized net capital gains and losses	(2,582)		(1)		(2,583)
Change in discount rate for reserve for future policy benefits	—		49		49
Balance, end of period	655		(229)		426

Total Allstate shareholders’ equity	25,179		(235)		24,944
Total equity	$	25,127	$	(235)	$	24,892


Consolidated Statements of Cash Flows
($ in millions)	As reported		Impact of change		As adjusted
	Year ended December 31, 2022
Cash flows from operating activities
Net loss	$	(1,364)	$	22	$	(1,342)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Changes in:
Policy benefits and other insurance reserves	4,503		(58)		4,445
Unearned premiums	2,541		(2)		2,539
Deferred policy acquisition costs	(702)		(11)		(713)
Reinsurance recoverables, net	408		43		451
Income taxes	(721)		6		(715)

Net cash provided by operating activities	$	5,121	$	—	$	5,121

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2023 Form 10-K Notes to Consolidated Financial Statements


Consolidated Statements of Cash Flows
($ in millions)	As reported		Impact of change		As adjusted
	Year ended December 31, 2021
Cash flows from operating activities
Net income	$	1,566	$	15	$	1,581
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Changes in:
Policy benefits and other insurance reserves	2,432		12		2,444
Unearned premiums	1,618		(10)		1,608
Deferred policy acquisition costs	(608)		(16)		(624)
Reinsurance recoverables, net	(1,565)		(5)		(1,570)
Income taxes	349		4		353

Net cash provided by operating activities	$	5,116	$	—	$	5,116

Pending accounting standards

Accounting for joint ventures In August 2023, the 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 on its disclosures.

Income tax disclosures In December 2023, the FASB issued guidance enhancing various aspects of income tax disclosures. The guidance now 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 disclosure 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 on its disclosures.


Note 3			Dispositions

Life and annuity business On October 1, 2021, the Company closed the sale of Allstate Life Insurance Company of New York (“ALNY”) to Wilton Reassurance Company for $400 million. On November 1, 2021, the Company closed the sale of Allstate Life Insurance Company (“ALIC”) and certain affiliates to entities managed by Blackstone for total proceeds of $4 billion, including a pre-close dividend of $1.25 billion paid by ALIC.

In connection with the sale of ALIC and certain affiliates, 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. See Note 7 for further details.

In 2021, the loss on disposition was $4.09 billion, after-tax, and reflects purchase price adjustments associated with certain pre-close transactions specified in the stock purchase agreements, changes in statutory capital and surplus prior to the closing date and the closing date equity of the sold entities determined under GAAP, excluding AOCI derecognized related to the dispositions.

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Beginning in the first quarter of 2021, the assets and liabilities of the business were reclassified as held for sale and results are presented as discontinued operations. This change was applied on a retrospective basis.


Financial results from discontinued operations
	For the year ended December 31,
($ in millions)	2021
Revenues
Life premiums and contract charges	$	1,109
Net investment income	1,336
Net gains (losses) on investments and derivatives	195
Total revenues	2,640

Costs and expenses
Life contract benefits	1,315
Interest credited to contractholder funds	414
Amortization of DAC	87
Operating costs and expenses	163
Restructuring and related charges	31
Total costs and expenses	2,010

Amortization of deferred gain on reinsurance	4

Income from discontinued operations before income tax expense	634

Income tax expense	136

Income from discontinued operations, net of tax	498

Loss on disposition of operations	(4,315)
Income tax benefit	(224)
Loss on disposition of operations, net of tax	(4,091)

(Loss) income from discontinued operations, net of tax	$	(3,593)


Cash flows from discontinued operations
	For the year ended December 31,
($ in millions)	2021
Net cash provided by operating activities from discontinued operations	$	634
Net cash provided by investing activities from discontinued operations	984


Note 4			Reportable Segments

The Company’s chief operating decision maker reviews financial performance and makes decisions about the allocation of resources for the five reportable segments. These segments are described below and align with the Company’s key product and service offerings.

Allstate Protection principally offers private passenger auto and homeowners insurance in the United States and Canada, with earned premiums accounting for 84.8% of Allstate’s 2023 consolidated revenues. Allstate Protection primarily operates in the U.S. (all 50 states and the District of Columbia (“D.C.”)) and Canada. For 2023, the top geographic locations for statutory direct premiums for the Allstate Protection segment were Texas, California, New York and Florida. No other jurisdiction accounted for more than 5% of statutory direct premiums for Allstate Protection. Revenues from external customers generated outside

the United States were $2.06 billion, $1.94 billion and $1.86 billion in 2023, 2022 and 2021, respectively.

Run-off Property-Liability includes results from property and casualty insurance coverage that primarily relates to policies written during the 1960s through the mid-1980s. Our exposure to asbestos, environmental and other run-off lines claims arises principally from direct excess commercial insurance, assumed reinsurance coverage, direct primary commercial insurance and other businesses in run-off.

Protection Services comprise Allstate Protection Plans, Allstate Dealer Services, Allstate Roadside, Arity and Allstate Identity Protection. Protection Services offer consumer product protection plans, protection and insurance products (including vehicle service contracts, guaranteed asset protection, road hazard tire and wheel and paintless dent repair protection), roadside assistance, device and mobile data collection

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2023 Form 10-K Notes to Consolidated Financial Statements

services and analytic solutions using automotive telematics information, identity theft protection and remediation services. Protection Services primarily operates in the U.S. and Canada, with Allstate Protection Plans also offering services in Europe, Australia and Asia. Revenues from external customers generated outside the United States were $346 million, $258 million and $232 million in 2023, 2022 and 2021, respectively and relate to consumer product protection plans sold primarily in the European Union and Australia.

Allstate Health and Benefits offers employer voluntary benefits, group health and individual health products, including life, accident, critical illness, hospital indemnity, short-term disability and other health products. Allstate Health and Benefits primarily operates in the U.S. (all 50 states and D.C.) and Canada. For 2023, the top geographic locations for statutory direct accident, health and life insurance premiums were Florida, Texas, and Georgia. No other jurisdiction accounted for more than 5% of statutory direct accident, health and life insurance premiums. Revenues from external customers generated outside the United States relate to voluntary accident and health insurance sold in Canada and were not material.

Corporate and Other comprises debt service, other holding company activities and certain non-insurance operations, including expenses associated with strategic initiatives, such as the Avail peer-to-peer car-sharing initiative.

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.

The accounting policies of the reportable segments are the same as those described in Note 2. The effects of intersegment transactions are eliminated in the consolidated results. For segment results, services provided by Protection Services to Allstate Protection are not eliminated as management considers those transactions in assessing the results of the respective 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 and adjusted net income for the Protection Services, Allstate Health and Benefits and Corporate and Other segments.

Underwriting income is calculated as premiums earned and other revenue, less claims and claims expenses (“losses”), Shelter-in-Place Payback expense, amortization of 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

•			Business combination expenses and the amortization or impairment of purchased intangibles
•			Income or loss from discontinued operations
•			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

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

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Reportable segments financial performance
	For the years ended December 31,
($ in millions)	2023		2022		2021
Underwriting income (loss) by segment
Allstate Protection	$	(2,090)	$	(2,782)	$	1,785
Run-off Property-Liability	(94)		(129)		(120)
Total Property-Liability	(2,184)		(2,911)		1,665

Adjusted net income (loss) by segment, after-tax
Protection Services	106		169		179
Allstate Health and Benefits	242		245		223
Corporate and Other	(415)		(422)		(433)

Reconciling items
Property-Liability net investment income	2,218		2,190		3,118
Net gains (losses) on investments and derivatives	(300)		(1,072)		1,084
Pension and other postretirement remeasurement gains (losses)	(9)		(116)		644

Business combination expenses and amortization of purchased intangibles (1)	(94)		(113)		(157)
Business combination fair value adjustment	—		—		6
Gain (loss) on disposition (2)	4		89		—

Non-recurring costs (3)	(90)		—		—
Income tax benefit (expense) on reconciling items (4)	182		495		(1,270)
Total reconciling items	1,911		1,473		3,425

Income (loss) from discontinued operations	—		—		(3,612)
Income tax benefit from discontinued operations	—		—		19
Total from discontinued operations	$	—	$	—	$	(3,593)

Less: Net loss attributable to noncontrolling interest (5)	(24)		(52)		(34)

Net (loss) income applicable to common shareholders	$	(316)	$	(1,394)	$	1,500

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

(2)Includes $83 million related to the gain on sale of headquarters in the fourth quarter of 2022 reported as other revenue in Corporate and Other segment.

(3)Relates to settlement costs for non-recurring litigation that is outside of the ordinary course of business. See Note 15 for additional details.

(4)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.

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

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Reportable segments revenue information
	For the years ended December 31,
($ in millions)	2023		2022		2021
Property-Liability
Insurance premiums
Auto	$	32,940	$	29,715	$	27,623
Homeowners	11,739		10,418		9,552
Other personal lines	2,387		2,159		2,077
Commercial lines	811		1,123		827
Other business lines	550		494		375
Allstate Protection	48,427		43,909		40,454
Run-off Property-Liability	—		—		—
Total Property-Liability insurance premiums	48,427		43,909		40,454
Other revenue	1,545		1,416		1,437
Net investment income	2,218		2,190		3,118
Net gains (losses) on investments and derivatives	(292)		(877)		1,021
Total Property-Liability	51,898		46,638		46,030

Protection Services
Protection Plans	1,540		1,307		1,132
Roadside assistance	195		202		192
Protection and insurance products	508		486		440
Intersegment premiums and service fees (1)	138		149		175
Other revenue	319		347		354
Net investment income	73		48		43
Net gains (losses) on investments and derivatives	—		(52)		25
Total Protection Services	2,773		2,487		2,361

Allstate Health and Benefits
Employer voluntary benefits	1,001		1,033		1,040
Group health	440		385		350
Individual health	405		414		444
Other revenue	447		402		359
Net investment income	82		69		74
Net gains (losses) on investments and derivatives	3		(44)		7
Total Allstate Health and Benefits	2,378		2,259		2,274

Corporate and Other
Other revenue	89		179		22
Net investment income	105		96		58
Net gains (losses) on investments and derivatives	(11)		(99)		31
Total Corporate and Other	183		176		111

Intersegment eliminations (1)	(138)		(149)		(175)
Consolidated revenues	$	57,094	$	51,411	$	50,601

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

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Additional significant financial performance data
	For the years ended December 31,
($ in millions)	2023		2022		2021
Amortization of DAC
Property-Liability	$	6,070	$	5,570	$	5,313
Protection Services	1,058		928		795
Allstate Health and Benefits	150		136		128
Consolidated	$	7,278	$	6,634	$	6,236

Income tax expense (benefit)
Property-Liability	$	(136)	$	(427)	$	1,151
Protection Services	66		5		39
Allstate Health and Benefits	57		45		53
Corporate and Other	(122)		(111)		49
Consolidated	$	(135)	$	(488)	$	1,292

Interest expense is primarily incurred in the Corporate and Other segment. Capital expenditures for long-lived assets are generally made in Property-Liability as the Company does not allocate assets to the Allstate Protection and Run-off Property-Liability segments. A portion of these long-lived assets are used by entities included in the Protection Services, Allstate Health and Benefits and Corporate and Other segments and, accordingly, are charged to expenses in proportion to their use.


Reportable segment total assets, investments and deferred policy acquisition costs
	As of December 31,
($ in millions)	2023		2022
Assets
Property-Liability	$	88,568	$	82,744
Protection Services	7,292		6,922
Allstate Health and Benefits	4,032		3,752
Corporate and Other	3,470		4,571
Consolidated	$	103,362	$	97,989

Investments (1)
Property-Liability	$	59,540	$	54,011
Protection Services	2,180		1,917
Allstate Health and Benefits	2,182		1,872
Corporate and Other	2,775		4,029
Consolidated	$	66,677	$	61,829

Deferred policy acquisition costs
Property-Liability	$	2,378	$	2,146
Protection Services	3,022		2,768
Allstate Health and Benefits	540		528
Consolidated	$	5,940	$	5,442

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


Note 5			Investments


Portfolio composition
	As of December 31,
($ in millions)	2023		2022
Fixed income securities, at fair value	$	48,865	$	42,485
Equity securities, at fair value	2,411		4,567
Mortgage loans, net	822		762
Limited partnership interests	8,380		8,114
Short-term investments, at fair value	5,144		4,173
Other investments, net	1,055		1,728
Total	$	66,677	$	61,829

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2023 Form 10-K Notes to Consolidated Financial Statements


Amortized cost, gross unrealized gains (losses) and fair value for fixed income securities
	Amortized cost, net			Gross unrealized					Fair value
($ in millions)			Gains			Losses
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

December 31, 2022
U.S. government and agencies	$	8,123		$	6		$	(231)	$	7,898
Municipal	6,500			36			(326)		6,210
Corporate	28,562			46			(2,345)		26,263
Foreign government	997			—			(40)		957
ABS	1,188			4			(35)		1,157
Total fixed income securities	$	45,370		$	92		$	(2,977)	$	42,485


Scheduled maturities for fixed income securities
	As of December 31, 2023				As of December 31, 2022
($ in millions)	Amortized cost, net		Fair value		Amortized cost, net		Fair value
Due in one year or less	$	3,422	$	3,374	$	2,870	$	2,836
Due after one year through five years	23,218		22,614		26,546		25,217
Due after five years through ten years	12,553		12,273		11,035		9,870
Due after ten years	8,717		8,859		3,731		3,405
	47,910		47,120		44,182		41,328
ABS	1,739		1,745		1,188		1,157
Total	$	49,649	$	48,865	$	45,370	$	42,485

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
	For the years ended December 31,
($ in millions)	2023		2022		2021
Fixed income securities	$	1,761	$	1,255	$	1,148
Equity securities	75		132		100
Mortgage loans	35		33		43
Limited partnership interests	499		985		1,973
Short-term investments	253		82		5
Other investments	169		162		195
Investment income, before expense	2,792		2,649		3,464
Investment expense	(314)		(246)		(171)
Net investment income	$	2,478	$	2,403	$	3,293


Net gains (losses) on investments and derivatives by asset type
	For the years ended December 31,
($ in millions)	2023		2022		2021
Fixed income securities	$	(540)	$	(875)	$	425
Equity securities	282		(900)		520
Mortgage loans	(4)		(1)		20
Limited partnership interests	4		(191)		(52)
Derivatives	(84)		874		49
Other investments	42		21		122
Net gains (losses) on investments and derivatives	$	(300)	$	(1,072)	$	1,084

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2023 Form 10-K Notes to Consolidated Financial Statements


Net gains (losses) on investments and derivatives by transaction type
	For the years ended December 31,
($ in millions)	2023		2022		2021
Sales	$	(433)	$	(832)	$	578
Credit losses	(99)		(54)		(42)
Valuation change of equity investments (1)	316		(1,060)		499
Valuation change and settlements of derivatives	(84)		874		49
Net gains (losses) on investments and derivatives	$	(300)	$	(1,072)	$	1,084

(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
	For the years ended December 31,
($ in millions)	2023		2022		2021
Gross realized gains	$	115	$	136	$	587
Gross realized losses	(633)		(1,004)		(158)


Net appreciation (decline) recognized in net income for assets that are still held
	For the years ended December 31,
($ in millions)	2023		2022		2021
Equity securities	$	151	$	(466)	$	377
Limited partnership interests carried at fair value	85		(5)		435
Total	$	236	$	(471)	$	812


Credit losses recognized in net income
	For the years ended December 31,
($ in millions)		2023		2022		2021
Assets
Fixed income securities:

Corporate		$	(24)	$	(6)	$	(5)
ABS		2		(1)		1
Total fixed income securities		(22)		(7)		(4)
Mortgage loans		(4)		(1)		18
Limited partnership interests		(25)		(4)		(34)
Other investments
Bank loans		(18)		(26)		(22)
Real estate		(29)		(16)		—
Total credit losses by asset type		$	(98)	$	(54)	$	(42)

Liabilities
Commitments to fund commercial mortgage loans and bank loans		(1)		—		—
Total		$	(99)	$	(54)	$	(42)

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2023 Form 10-K Notes to Consolidated Financial Statements


Unrealized net capital gains and losses included in AOCI
($ in millions)	Fair value			Gross unrealized					Unrealized net gains (losses)
December 31, 2023			Gains			Losses
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)

December 31, 2022
Fixed income securities	$	42,485		$	92		$	(2,977)	$	(2,885)
Short-term investments	4,173			—			(1)		(1)
Derivative instruments	—			—			(3)		(3)
Limited partnership interests									2
Unrealized net capital gains and losses, pre-tax									(2,887)
Reclassification of noncontrolling interest									23
Deferred income taxes									609
Unrealized net capital gains and losses, after-tax									$	(2,255)

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


Change in unrealized net capital gains (losses)
	For the years ended December 31,
($ in millions)	2023		2022		2021
Fixed income securities	$	2,101	$	(3,645)	$	(1,771)
Short-term investments	—		(1)		—
Derivative instruments	1		—		—
Limited partnerships interests	(6)		3		—
Investments classified as held for sale	—		—		(2,369)
Total	2,096		(3,643)		(4,140)
Reclassification of noncontrolling interest and other (1)	(10)		19		864
Deferred income taxes	(435)		771		693
Increase (decrease) in unrealized net capital gains and losses, after-tax	$	1,651	$	(2,853)	$	(2,583)

(1)2021 includes changes in amounts by which the amortization of DAC would increase or decrease if the unrealized gains or losses in the respective product portfolios were realized.

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2023 Form 10-K Notes to Consolidated Financial Statements

Mortgage loans The Company’s mortgage loans are commercial mortgage loans collateralized by a variety of commercial real estate property types located across the United States and totaled $822 million and $762 million, net of credit loss allowance, as of December 31, 2023 and 2022, respectively. Substantially all of the commercial mortgage loans are non-recourse to the borrower.


Principal geographic distribution of commercial real estate exceeding 5% of the mortgage loans portfolio
	As of December 31,
(% of mortgage loan portfolio carrying value)	2023		2022
California	21.9	%	24.9	%
Texas	17.9		16.3
Florida	7.5		6.4
Washington	5.8		7.3
Tennessee	5.6		6.1
Ohio	5.0		5.6


Types of properties collateralizing the mortgage loan portfolio
	As of December 31,
(% of mortgage loan portfolio carrying value)	2023		2022
Apartment complex	30.6	%	30.2	%
Retail	25.0		27.4
Warehouse	20.0		16.0
Office	15.2		17.5
Other	9.2		8.9
Total	100.0	%	100.0	%


Contractual maturities of the mortgage loan portfolio
	As of December 31, 2023
($ in millions)	Number of loans	Amortized cost, net		Percent
2024	5	$	88	10.7	%
2025	6	70		8.5
2026	11	166		20.2
2027	6	58		7.1
Thereafter	29	440		53.5
Total	57	$	822	100.0	%

Limited partnership interests include interests in private equity funds, real estate funds and other funds. Principal factors influencing carrying value appreciation or decline include operating performance, comparable public company earnings multiples, capitalization rates and the economic environment. For equity method limited partnerships, the Company recognizes an impairment loss when evidence demonstrates that the loss is other than temporary. Evidence of a loss in value that is other than temporary may include the absence of an ability to recover the carrying amount of the investment or the inability of the investee to sustain a level of earnings that would justify the carrying amount of the investment. Changes in fair value limited partnerships are recorded through net investment income and therefore are not tested for impairment.


Carrying value for limited partnership interests
	As of December 31, 2023						As of December 31, 2022
($ in millions)	EMA		Fair Value		Total		EMA		Fair Value		Total
Private equity	$	6,015	$	1,139	$	7,154	$	5,372	$	1,217	$	6,589
Real estate	1,059		26		1,085		1,013		29		1,042
Other (1)	141		—		141		483		—		483
Total	$	7,215	$	1,165	$	8,380	$	6,868	$	1,246	$	8,114

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

The Allstate Corporation 127

2023 Form 10-K Notes to Consolidated Financial Statements

Municipal bonds The Company maintains a diversified portfolio of municipal bonds, including tax exempt and taxable securities, which totaled $6.01 billion and $6.21 billion as of December 31, 2023 and 2022, respectively. The balance as of December 31, 2023 includes $4.85 billion of tax exempt securities. The municipal bond portfolio includes general obligations of state and local issuers and revenue bonds (including pre-refunded bonds, which are bonds for which an irrevocable trust has been established to fund the remaining payments of principal and interest).


Principal geographic distribution of municipal bond issuers exceeding 5% of the portfolio
	As of December 31,
(% of municipal bond portfolio carrying value)	2023		2022
Texas	12.8	%	9.6	%
California	7.7		8.5
New York	6.3		6.7
Illinois	5.4		5.6
Pennsylvania	5.4		5.4
Florida	4.8		5.0

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 December 31, 2023 and 2022, the fair value of short-term investments totaled $5.14 billion and $4.17 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. Policy loans are carried at unpaid principal balances. Real estate is carried at cost less accumulated depreciation. Derivatives are carried at fair value.


Other investments by asset type
	As of December 31,
($ in millions)	2023		2022
Bank loans, net	$	224	$	686
Real estate	709		813
Policy loans	119		120
Derivatives	1		1
Other	2		108
Total	$	1,055	$	1,728

Concentration of credit risk As of December 31, 2023, the Company is not exposed to any credit concentration risk of a single issuer and its affiliates greater than 10% of the Company’s shareholders’ equity, other than the U.S. government and its agencies.

Securities loaned The Company’s business activities include securities lending programs with third parties, mostly large banks. As of December 31, 2023 and 2022, fixed income and equity securities with a carrying value of $1.83 billion and $1.93 billion, respectively, were on loan under these agreements. Interest income on collateral, net of fees, was zero, $6 million and $1 million in 2023, 2022 and 2021, respectively.

Other investment information Included in fixed income securities are below investment grade assets totaling $4.18 billion and $4.10 billion as of December 31, 2023 and 2022, respectively.

As of December 31, 2023, fixed income securities and short-term investments with a carrying value of $201 million were on deposit with regulatory authorities as required by law.

As of December 31, 2023, the carrying value of fixed income securities and other investments that were non-income producing was $92 million.

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2023 Form 10-K Notes to Consolidated Financial Statements

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 $495 million and $389 million as of December 31, 2023, and 2022, respectively, and is reported within the accrued investment income line of the 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.

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2023 Form 10-K Notes to Consolidated Financial Statements


Rollforward of credit loss allowance for fixed income securities
	For the years ended December 31,
($ in millions)	2023		2022		2021
Beginning balance	$	(13)	$	(6)	$	(2)
Credit losses on securities for which credit losses not previously reported	(11)		(1)		(5)
Net (increases) decreases related to credit losses previously reported	(11)		(6)		1
(Increase) decrease of allowance related to sales and other	(1)		—		—
Write-offs	—		—		—
Ending balance	$	(36)	$	(13)	$	(6)

Components of credit loss allowance as of December 31
Corporate bonds	$	(35)	$	(11)	$	(6)
ABS	(1)		(2)		—
Total	$	(36)	$	(13)	$	(6)


Gross unrealized losses and fair value by type and length of time held in a continuous unrealized loss position (1)

	Less than 12 months					12 months or more
($ in millions)	Number of issues	Fair value		Unrealized losses		Number of issues	Fair value		Unrealized losses		Total unrealized losses
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)

December 31, 2022
Fixed income securities
U.S. government and agencies	112	$	4,900	$	(138)	75	$	2,393	$	(93)	$	(231)
Municipal	3,015	3,944		(215)		507	740		(111)		(326)
Corporate	2,085	18,072		(1,389)		845	6,105		(956)		(2,345)
Foreign government	74	739		(22)		42	200		(18)		(40)
ABS	194	874		(27)		83	109		(8)		(35)
Total fixed income securities	5,480	$	28,529	$	(1,791)	1,552	$	9,547	$	(1,186)	$	(2,977)
Investment grade fixed income securities	4,959	$	25,487	$	(1,409)	1,437	$	8,791	$	(1,009)	$	(2,418)
Below investment grade fixed income securities	521	3,042		(382)		115	756		(177)		(559)
Total fixed income securities	5,480	$	28,529	$	(1,791)	1,552	$	9,547	$	(1,186)	$	(2,977)

(1)Includes fixed income securities with fair values of $32 million and $10 million and unrealized losses of $3 million and $5 million with credit loss alllowances of $8 million and $11 million as of December 31, 2023, and 2022, respectively.

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2023 Form 10-K Notes to Consolidated Financial Statements


Gross unrealized losses by unrealized loss position and credit quality as of December 31, 2023
($ in millions)	Investment grade		Below investment grade		Total
Fixed income securities with unrealized loss position less than 20% of amortized cost, net (1) (2)	$	(1,167)	$	(173)	$	(1,340)
Fixed income securities with unrealized loss position greater than or equal to 20% of amortized cost, net (3) (4)	(67)		(27)		(94)
Total unrealized losses	$	(1,234)	$	(200)	$	(1,434)

(1)Below investment grade fixed income securities include $5 million that have been in an unrealized loss position for less than twelve months.

(2)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.

(3)Below investment grade fixed income securities include $25 million that have been in an unrealized loss position for a period of twelve or more consecutive months.

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

As of December 31, 2023, 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.

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2023 Form 10-K Notes to Consolidated Financial Statements

Accrued interest is excluded from the amortized cost of loans and is reported within the accrued investment income line of the Consolidated Statements of Financial Position.


Accrued interest
	As of December 31,
($ in millions)	2023		2022
Mortgage loans	$	3	$	3
Bank Loans	3		3

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
	December 31, 2023														December 31, 2022
($ in millions)	2018 and prior		2019		2020		2021		2022		Current		Total		Total
Below 1.0	$	—	$	—	$	—	$	—	$	13	$	—	$	13	$	18
1.0 - 1.25	27		12		—		—		—		2		41		42
1.26 - 1.50	24		4		10		—		30		65		133		151
Above 1.50	65		220		42		184		59		76		646		558
Amortized cost before allowance	$	116	$	236	$	52	$	184	$	102	$	143	$	833	$	769
Allowance													(11)		(7)
Amortized cost, net													$	822	$	762

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 December 31, 2023, 2022 and 2021.


Rollforward of credit loss allowance for mortgage loans
	For the years ended December 31,
($ in millions)	2023		2022		2021
Beginning balance	$	(7)	$	(6)	$	(67)

Net (increases) decreases related to credit losses	(4)		(1)		40
Reduction of allowance related to sales	—		—		21
Write-offs	—		—		—
Ending balance	$	(11)	$	(7)	$	(6)

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.

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2023 Form 10-K Notes to Consolidated Financial Statements


Bank loans amortized cost by credit rating and year of origination
($ in millions)	December 31, 2023														December 31, 2022
	2018 and prior		2019		2020		2021		2022		Current		Total		Total
NAIC 2 / BBB	$	—	$	—	$	2	$	6	$	—	$	1	$	9	$	54
NAIC 3 / BB	—		—		—		21		—		17		38		266
NAIC 4 / B	—		17		1		33		16		86		153		329
NAIC 5-6 / CCC and below	21		—		—		11		5		9		46		94
Amortized cost before allowance	$	21	$	17	$	3	$	71	$	21	$	113	$	246	$	743
Allowance													(22)		(57)
Amortized cost, net													$	224	$	686


Rollforward of credit loss allowance for bank loans
	For the years ended December 31,
($ in millions)	2023		2022		2021
Beginning balance	$	(57)	$	(61)	$	(67)

Net increases related to credit losses	(18)		(26)		(15)
Reduction of allowance related to sales	50		30		21
Write-offs	3		—		—
Ending balance	$	(22)	$	(57)	$	(61)


Note 6			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 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;

(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.

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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 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

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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 OTC derivatives, such as interest rate caps, certain credit default swaps and 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 credit spreads 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 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 held for sale: Comprise municipal, corporate and ABS fixed income securities and equity securities. The valuation is based on the respective asset type as described above.
Liabilities held for sale: Comprise derivatives embedded in certain life and annuity contracts which are valued internally using models widely accepted in the financial services industry that determine a single best estimate of fair value for the embedded derivatives within a block of contractholder liabilities. The models primarily use stochastically determined cash flows based on the contractual elements of embedded derivatives, projected option cost and applicable market data, such as interest rate yield curves and equity index volatility assumptions. These are categorized as Level 3 as a result of 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

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 December 31, 2023, the Company has commitments to invest $175 million in these limited partnership interests.

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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)As of December 31, 2023, equity securities exclude $150 million of preferred stock measured at cost.

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Assets and liabilities measured at fair value
	December 31, 2022
($ 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	$	7,878		$	20		$	—					$	7,898
Municipal	—			6,189			21						6,210
Corporate - public	—			18,547			69						18,616
Corporate - privately placed	—			7,592			55						7,647
Foreign government	—			957			—						957
ABS	—			1,129			28						1,157
Total fixed income securities	7,878			34,434			173						42,485
Equity securities	3,936			298			333						4,567
Short-term investments	508			3,659			6						4,173
Other investments	—			23			3			$	(22)		4
Other assets	3			—			103						106
Total recurring basis assets	12,325			38,414			618			(22)			51,335
Non-recurring basis	—			—			23						23
Total assets at fair value	$	12,325		$	38,414		$	641		$	(22)		$	51,358
% of total assets at fair value	24.0		%	74.8		%	1.2		%	—		%	100.0		%

Investments reported at NAV													1,246
Total													$	52,604
Liabilities
Other liabilities	$	(1)		$	(25)		$	—		$	21		$	(5)
Total recurring basis liabilities	(1)			(25)			—			21			(5)
Total liabilities at fair value	$	(1)		$	(25)		$	—		$	21		$	(5)
% of total liabilities at fair value	20.0		%	500.0		%	—		%	(420.0)		%	100.0		%

As of December 31, 2023 and 2022, Level 3 fair value measurements of fixed income securities total $153 million and $173 million, respectively, and include $26 million and $70 million, respectively, of securities valued based on non-binding broker quotes where the inputs have not been corroborated to be market observable and $11 million and $21 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.

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2023 Form 10-K Notes to Consolidated Financial Statements


Rollforward of Level 3 assets and liabilities held at fair value during the year ended December 31, 2023
	Balance as of December 31, 2022			Total gains (losses) included in:						Transfers														Balance as of December 31, 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)		$	—		$	—		$	—	$	(10)	$	—	$	(2)	$	11
Corporate - public	69			(1)			2			—			—			—		(44)		—		—		26
Corporate - privately placed	55			(12)			1			16			—			1		(3)		—		—		58
ABS	28			—			—			—			—			31		—		—		(1)		58
Total fixed income securities	173			(10)			2			16			—			32		(57)		—		(3)		153
Equity securities	333			36			—			—			—			77		(44)		—		—		402
Short-term investments	6			—			—			—			—			13		—		—		(18)		1
Other investments	3			(1)			—			—			—			—		—		—		—		2
Other assets	103			15			—			—			—			—		—		—		—		118

Total recurring Level 3 assets	618			40			2			16			—			122		(101)		—		(21)		676
Liabilities

Total recurring Level 3 liabilities	$	—		$	—		$	—		$	—		$	—		$	—	$	—	$	—	$	—	$	—


Rollforward of Level 3 assets and liabilities held at fair value during the year ended December 31, 2022
	Balance as of December 31, 2021			Total gains (losses) included in:						Transfers																	Balance as of December 31, 2022
($ in millions)			Net income			OCI			Into Level 3			Out of Level 3			Purchases	Sales			Issues			Settlements
Assets
Fixed income securities:
Municipal	$	18		$	—		$	1		$	2		$	—			$	2		$	—		$	—	$	(2)	$	21
Corporate - public	20			—			(5)			—			—				66			(10)			—		(2)		69
Corporate - privately placed	66			19			2			—			—				34			(65)			—		(1)		55
ABS	40			1			—			—			(28)				17			—			—		(2)		28
Total fixed income securities	144			20			(2)			2			(28)				119			(75)			—		(7)		173
Equity securities	349			16			—			—			—				13			(45)			—		—		333
Short-term investments	5			—			—			—			—				23			—			—		(22)		6
Other investments	2			2			—			—			—				—			(1)			—		—		3
Other assets	65			38			—			—			—				—			—			—		—		103

Total recurring Level 3 assets	565			76			(2)			2			(28)				155			(121)			—		(29)		618
Liabilities

Total recurring Level 3 liabilities	$	—		$	—		$	—		$	—		$	—			$	—		$	—		$	—	$	—	$	—

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Rollforward of Level 3 assets and liabilities held at fair value during the year ended December 31, 2021
	Balance as of December 31, 2020			Total gains (losses) included in:						Transfers														Balance as of December 31, 2021
($ in millions)			Net income			OCI			Into Level 3			Out of Level 3			Purchases	Sales		Issues		Settlements
Assets
Fixed income securities:
Municipal	$	17		$	—		$	—		$	1		$	—		$	3	$	—	$	—	$	(3)	$	18
Corporate - public	67			1			(1)			—			—			13		(53)		—		—		20
Corporate - privately placed	63			(2)			3			10			—			6		(23)		—		(5)		66
ABS	79			—			1			4			(32)			47		(5)		—		(54)		40
Total fixed income securities	226			(1)			3			15			(32)			69		(81)		—		(62)		144
Equity securities	304			61			—			—			—			43		(160)		—		—		349
Short-term investments	35			—			—			—			—			5		—		—		(35)		5
Other investments	—			—			—			—			—			3		(1)		—		—		2
Other assets	—			65			—			—			—			—		—		—		—		65
Assets held for sale	267			3			(1)			17			(13)			4		(163)		—		(6)		—
Total recurring Level 3 assets	832			128			2			32			(45)			124		(405)		—		(103)		565
Liabilities
Liabilities held for sale	(516)			35			—			—			—			—		492		(28)		17		—
Total recurring Level 3 liabilities	$	(516)		$	35		$	—		$	—		$	—		$	—	$	492	$	(28)	$	17	$	—


Total Level 3 gains (losses) included in net income
	For the years ended December 31,
($ in millions)	2023		2022		2021
Net investment income	$	(1)	$	15	$	1
Net gains (losses) on investments and derivatives	41		61		124

Transfers into Level 3 during 2023 included situations where securities were written down utilizing an internal price where the inputs had not been corroborated to be market observable resulting in the security being classified as Level 3.

Transfers into Level 3 during 2022 and 2021 included situations where a quote was not provided by the Company’s independent third-party valuation service provider and as a result the price was stale or had been replaced with a broker quote where the inputs had not been corroborated to be market observable resulting in the security being classified as Level 3.

There were no transfers out of Level 3 during 2023. Transfers out of Level 3 during 2022 and 2021 included situations where a broker quote was used in the prior period and a quote became available from the Company’s independent third-party valuation service provider in the current period. A quote utilizing the new pricing source was not available as of the prior period, and any gains or losses related to the change in valuation source for individual securities were not significant.

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2023 Form 10-K Notes to Consolidated Financial Statements


Valuation changes included in net income and OCI for Level 3 assets and liabilities held as of December 31,
($ in millions)	2023		2022		2021
Assets
Fixed income securities:


Corporate - privately placed	$	(12)	$	1	$	(2)

Total fixed income securities	(12)		1		(2)
Equity securities	35		14		28

Other investments	(1)		2		—
Other assets	15		38		65
Total recurring Level 3 assets	$	37	$	55	$	91



Total included in net income	$	37	$	55	$	91

Components of net income
Net investment income	$	(1)	$	14	$	1
Net gains (losses) on investments and derivatives	38		41		90
Total included in net income	$	37	$	55	$	91

Assets
Municipal	$	—	$	1	$	—
Corporate - public	1		(5)		—
Corporate - privately placed	2		—		3


Changes in unrealized net capital gains and losses reported in OCI	$	3	$	(4)	$	3


Financial instruments not carried at fair value
($ in millions)		December 31, 2023				December 31, 2022
Financial assets	Fair value level	Amortized cost, net		Fair value		Amortized cost, net		Fair value
Mortgage loans	Level 3	$	822	$	769	$	762	$	700
Bank loans	Level 3	224		238		686		686

Financial liabilities	Fair value level	Carrying value (1)		Fair value		Carrying value (1)		Fair value
Contractholder funds on investment contracts	Level 3	$	46	$	46	$	50	$	50
Debt	Level 2	7,942		7,655		7,964		7,449
Liability for collateral	Level 2	1,891		1,891		2,011		2,011

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

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Note 7			Derivative Financial Instruments and Off-balance Sheet 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, 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.

In 2022, the Company also had a derivative embedded in a non-derivative host contract that was required to be separated from the host contract and accounted for at fair value with changes in fair value of the embedded derivative reported in net income.

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 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.

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2023 Form 10-K Notes to Consolidated Financial Statements


Summary of the volume and fair value positions of derivative instruments as of December 31, 2023
		Volume (1)
($ in millions, except number of contracts)	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

(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)

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Summary of the volume and fair value positions of derivative instruments as of December 31, 2022
		Volume (1)
($ in millions, except number of contracts)	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		24,380	$	3	$	3	$	—
Equity and index contracts

Futures	Other assets	n/a		343	—		—		—



Foreign currency contracts
Foreign currency forwards	Other investments	$	354	n/a	1		14		(13)



Contingent consideration	Other assets	250		n/a	103		103		—
Credit default contracts
Credit default swaps – buying protection	Other investments	24		n/a	—		1		(1)





Total asset derivatives		$	628	24,723	$	107	$	121	$	(14)

Liability derivatives


Derivatives not designated as accounting hedging instruments
Interest rate contracts



Futures	Other liabilities & accrued expenses	n/a		1,624	$	—	$	—	$	—
Equity and index contracts

Futures	Other liabilities & accrued expenses	n/a		1,229	(1)		—		(1)



Foreign currency contracts
Foreign currency forwards	Other liabilities & accrued expenses	$	283	n/a	—		7		(7)


Credit default contracts
Credit default swaps – buying protection	Other liabilities & accrued expenses	525		n/a	(3)		1		(4)



Total liability derivatives		808		2,853	(4)		$	8	$	(12)
Total derivatives		$	1,436	27,576	$	103


Gross and net amounts for OTC derivatives (1)
			Offsets
($ in millions)	Gross amount		Counter- party netting		Cash collateral (received) pledged		Net amount on balance sheet		Securities collateral (received) pledged		Net amount
December 31, 2023
Asset derivatives	$	3	$	(6)	$	4	$	1	$	—	$	1
Liability derivatives	(10)		6		2		(2)		—		(2)

December 31, 2022
Asset derivatives	$	23	$	(22)	$	—	$	1	$	—	$	1
Liability derivatives	(22)		22		(1)		(1)		—		(1)

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

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Gains (losses) from valuation and settlements reported on derivatives not designated as accounting hedges
($ in millions)	Net gains (losses) on investments and derivatives		Accident, health and other policy benefits		Operating costs and expenses		(Loss) income from discontinued operations		Total gain (loss) recognized in net income on derivatives
2023
Interest rate contracts	$	(8)	$	—	$	—	$	—	$	(8)
Equity and index contracts	(32)		—		28		—		(4)
Contingent consideration	—		—		15		—		15
Foreign currency contracts	(14)		—		—		—		(14)
Credit default contracts	(30)		—		—		—		(30)


Other contracts	—		—		(1)		—		(1)
Total	$	(84)	$	—	$	42	$	—	$	(42)

2022
Interest rate contracts	$	737	$	—	$	—	$	—	$	737
Equity and index contracts	94		—		(43)		—		51
Contingent consideration	—		—		38		—		38
Foreign currency contracts	47		—		(6)		—		41
Credit default contracts	(4)		—		—		—		(4)
Other contracts	—		—		(1)		—		(1)


Total	$	874	$	—	$	(12)	$	—	$	862

2021
Interest rate contracts	$	22	$	—	$	—	$	—	$	22
Equity and index contracts	(7)		27		45		—		65

Contingent consideration	—		—		—		65		65
Foreign currency contracts	32		—		—		—		32
Credit default contracts	7		—		—		—		7
Total return swaps - fixed income	4		—		—		—		4

Total	$	58	$	27	$	45	$	65	$	195

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)	December 31, 2023
Pledged by the Company	$	6
Pledged to the Company (1)	—

(1)$5 million of 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.

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OTC derivatives counterparty credit exposure by counterparty credit rating
($ in millions)	December 31, 2023							December 31, 2022
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+	—	$	—	$	—	$	—	1	$	128	$	5	$	—
A	—	—		—		—		1	192		7		—



Total	—	$	—	$	—	$	—	2	$	320	$	12	$	—

(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.

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)	December 31, 2023
Pledged by the Company	$	66
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)	December 31, 2023		December 31, 2022
Gross liability fair value of contracts containing credit-risk-contingent features	$	10	$	21
Gross asset fair value of contracts containing credit-risk-contingent features and subject to MNAs	(3)		(11)
Collateral posted under MNAs for contracts containing credit-risk-contingent features	(5)		(10)
Maximum amount of additional exposure for contracts with credit-risk-contingent features if all features were triggered concurrently	$	2	$	—

Off-balance sheet financial instruments

Commitments to invest, commitments to purchase private placement securities, commitments to fund loans, financial guarantees and credit guarantees have off-balance sheet risk because their contractual amounts are not recorded in the Company’s Consolidated Statements of Financial Position.


Contractual amounts of off-balance sheet financial instruments
	As of December 31,
($ in millions)	2023		2022
Commitments to invest in limited partnership interests	$	2,941	$	2,778
Private placement commitments	62		114
Other loan commitments	18		10

In the preceding table, the contractual amounts represent the amount at risk if the contract is fully drawn upon, the counterparty defaults and the value of any underlying security becomes worthless. Unless noted otherwise, the Company does not require

collateral or other security to support off-balance sheet financial instruments with credit risk.

Commitments to invest in limited partnership interests represent agreements to acquire new or additional participation in certain limited partnership investments. The Company enters into these

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2023 Form 10-K Notes to Consolidated Financial Statements

agreements in the normal course of business. Because the investments in limited partnerships are not actively traded, it is not practical to estimate the fair value of these commitments.

Private placement commitments represent commitments to purchase private placement debt and private equity securities at a future date. The Company enters into these agreements in the normal course of business. The fair value of the debt commitments generally cannot be estimated on the date the commitment is made as the terms and conditions of the underlying private placement securities are not yet final. Because the private equity securities are not

actively traded, it is not practical to estimate fair value of the commitments.

Other loan commitments are agreements to lend to a borrower provided there is no violation of any condition established in the contract. The Company enters into these agreements to commit to future loan fundings at predetermined interest rates. Unless unconditionally cancellable, the Company recognizes a credit loss allowance on such commitments. Commitments have either fixed or varying expiration dates or other termination clauses. The fair value of these commitments is insignificant.


Note 8			Variable Interest Entities

Consolidated VIEs, of which the Company is the primary beneficiary, primarily include Adirondack Insurance Exchange, a New York reciprocal insurer, and New Jersey Skylands Insurance Association, a New Jersey reciprocal insurer (together “Reciprocal Exchanges”). 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 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. In addition, as of both December 31, 2023 and 2022, the Company holds interests of $123 million in the form of surplus notes included in other liabilities and expenses on the Statement of Assets and Liabilities of the Reciprocal Exchanges that provide capital to the Reciprocal Exchanges and would absorb any expected losses.

The Company is therefore the primary beneficiary. In addition, the Company provides quota share reinsurance to the Reciprocal Exchanges.

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 results of operations of the Reciprocal Exchanges are included in the Company’s Allstate Protection segment and generated $224 million, $164 million and $181 million of earned premiums in 2023, 2022 and 2021, respectively.

Total costs and expenses were $251 million, $244 million and $248 million in 2023, 2022 and 2021, respectively.


Assets and liabilities of Reciprocal Exchanges
($ in millions)	December 31, 2023		December 31, 2022
Assets
Fixed income securities	$	267	$	302
Short-term investments	7		13
Deferred policy acquisition costs	20		15
Premium installment and other receivables, net	40		43
Reinsurance recoverables, net	111		97
Other assets	54		90
Total assets	499		560
Liabilities
Reserve for property and casualty insurance claims and claims expense	201		209
Unearned premiums	147		171
Other liabilities and expenses	296		311
Total liabilities	$	644	$	691

Nonconsolidated VIEs The Company makes investments in limited partnership interests and other alternative investments that may be issued by VIEs. These investments are generally accounted for under the equity method and are reported as limited partnership interests in the Company’s Consolidated Statements of Financial Position. The Company does

not take an active role in management of these investments. Therefore, the Company has determined it is not the primary beneficiary as it has no ability to direct activities that could significantly affect the economic performance of the investments. The Company’s maximum exposure to loss is limited to the investment carrying value and any unfunded

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commitments. Neither the Company’s carrying amounts nor the unfunded commitments related to these VIEs are material individually or in the aggregate.

In addition, the Company makes investments in structured securities issued by VIEs for which the Company is not the investment manager. These structured investments typically invest in fixed income securities and are managed by third parties and include ABS and collateralized debt obligations. The Company has not provided financial or other support other than its original investment. For these investments, the Company determined it is not the primary beneficiary due to the relative size of the

Company’s investment in comparison to the principal amount of the structured securities issued by the VIEs, the Company’s inability to direct the activities that most significantly impact the economic performance of the VIEs, and, where applicable, the level of credit subordination which reduces the Company’s obligation to absorb losses or right to receive benefits. The Company’s maximum exposure to loss on these investments is limited to the amount of the Company’s investment. Neither the Company’s carrying amounts nor the unfunded commitments related to these VIEs are material individually or in the aggregate.


Note 9			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. Supply chain disruptions and inflation have resulted in higher part costs, used car values and longer time to claim resolution, which have combined with labor shortages to increase physical damage loss costs. Medical inflation, treatment trends, attorney representation, 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, 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 IBNR losses, the establishment of 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 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 Consolidated Statements of Financial Position based on available facts, laws and regulations.

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2023 Form 10-K Notes to Consolidated Financial Statements


Rollforward of reserve for property and casualty insurance claims and claims expense
($ in millions)	2023		2022		2021
Balance as of January 1	$	37,541	$	33,060	$	27,610
Less recoverables (1)	(9,176)		(9,479)		(7,033)
Net balance as of January 1	28,365		23,581		20,577
National General acquisition as of January 4, 2021	—		—		1,797
SafeAuto acquisition as of October 1, 2021	—		—		134
Incurred claims and claims expense related to:
Current year	40,521		35,523		29,196
Prior years	549		1,741		122
Total incurred	41,070		37,264		29,318
Claims and claims expense paid related to:
Current year	(23,607)		(20,739)		(18,438)
Prior years	(14,366)		(11,741)		(9,807)
Total paid	(37,973)		(32,480)		(28,245)
Net balance as of December 31	31,462		28,365		23,581
Plus recoverables	8,396		9,176		9,479
Balance as of December 31	$	39,858	$	37,541	$	33,060

(1) Recoverables comprises reinsurance and indemnification recoverables. See Note 11 for further details.


Reconciliation of total claims and claims expense incurred and paid by coverage
	December 31, 2023
($ in millions)	Incurred		Paid
Allstate Protection
Auto insurance - liability coverage	$	15,752	$	(13,032)
Auto insurance - physical damage coverage	9,128		(9,290)
Homeowners insurance	9,330		(8,225)
Total auto and homeowners insurance	34,210		(30,547)
Other personal lines	1,827		(1,632)
Commercial lines	784		(951)
Other business lines	148		(206)
Protection Services	533		(522)
Run-off Property-Liability	78		(89)
Unallocated loss adjustment expenses (“ULAE”)	3,292		(3,269)
Claims incurred and paid from before 2019	243		(845)
Other (1)	(45)		88
Total	$	41,070	$	(37,973)

(1)Paid and incurred amounts primarily related to the effect of foreign currency translation adjustments.

Incurred claims and claims expense represents the sum of paid losses, claim adjustment expenses and reserve changes in the calendar year. This expense includes losses from catastrophes of $5.64 billion, $3.11 billion and $3.34 billion in 2023, 2022 and 2021, 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.

The Company calculates and records a single best reserve estimate for losses from catastrophes, in conformance with generally accepted actuarial standards. As a result, management believes that no other estimate is better than the recorded amount. Due to the uncertainties involved, including the factors described above, the ultimate cost of losses may vary materially from recorded amounts, which are based on management’s best estimates.

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Prior year reserve reestimates included in claims and claims expense (1)
	For the years ended December 31,
	Non-catastrophe losses						Catastrophe losses						Total
($ in millions)	2023		2022		2021		2023		2022		2021		2023		2022		2021
Auto	$	294	$	1,249	$	178	$	(50)	$	(64)	$	(29)	$	244	$	1,185	$	149
Homeowners	66		123		31		36		77		(166)		102		200		(135)
Other personal lines	37		(34)		(96)		(18)		2		(11)		19		(32)		(107)
Commercial lines	76		273		116		8		(1)		3		84		272		119
Other business lines	12		(10)		(19)		—		4		1		12		(6)		(18)
Run-off Property-Liability (2)	89		125		116		—		—		—		89		125		116
Protection Services	(1)		(3)		(2)		—		—		—		(1)		(3)		(2)
Total prior year reserve reestimates	$	573	$	1,723	$	324	$	(24)	$	18	$	(202)	$	549	$	1,741	$	122

(1)Favorable reserve reestimates are shown in parentheses.

(2)The Company’s 2023, 2022 and 2021 annual reserve review, using established industry and actuarial best practices, resulted in unfavorable reestimates of $80 million, $118 million and $111 million, respectively.

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The following presents information about incurred and paid claims development as of December 31, 2023, net of recoverables, as well as the cumulative number of reported claims and the total of IBNR reserves plus expected development on reported claims included in the net incurred claims amounts. See Note 2 for the accounting policy and methodology for determining reserves for claims and claims expense, including both reported and IBNR claims. The cumulative number of reported claims is identified by coverage and excludes reported claims for industry pools and facilities where information is not available. The information about incurred and paid claims development for the 2019 to 2023 years, and the average annual percentage payout of incurred claims by age as of December 31, 2023, is presented as required supplementary information.

Auto insurance – liability coverage


($ in millions, except number of reported claims)	Incurred claims and allocated claim adjustment expenses, net of recoverables												IBNR reserves plus expected development on reported claims		Cumulative number of reported claims
	For the years ended December 31,										Prior year reserve reestimates		As of December 31, 2023
	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Accident year	2019		2020		2021		2022		2023
2019	$	10,377	$	10,307	$	10,557	$	10,729	$	10,812	$	83	$	642	2,569,785
2020	—		8,651		8,631		8,871		8,904		33		997		1,898,342
2021	—		—		10,365		10,851		11,180		329		2,057		2,229,946
2022	—		—		—		13,321		13,263		(58)		4,202		2,401,908
2023	—		—		—		—		15,365				10,258		2,283,467
							Total		$	59,524	$	387
Reconciliation to total prior year reserve reestimates recognized by line
Prior year reserve reestimates for pre-2019 accident years											229
Prior year reserve reestimates for ULAE											6
Other											—
Total prior year reserve reestimates											$	622

	Cumulative paid claims and allocated claims adjustment expenses, net of recoverables
	For the years ended December 31,
	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Accident year	2019		2020		2021		2022		2023
2019	$	3,936	$	6,995	$	8,530	$	9,519	$	10,170
2020	—		3,111		5,796		7,089		7,907
2021	—		—		3,589		7,304		9,123
2022	—		—		—		4,424		9,061
2023	—		—		—		—		5,107
							Total		$	41,368
All outstanding liabilities before 2019, net of recoverables									1,368
Liabilities for claims and claim adjustment expenses, net of recoverables									$	19,524


Average annual percentage payout of incurred claims by age, net of recoverables, as of December 31, 2023
	1 year		2 years		3 years		4 years		5 years
Auto insurance – liability coverage	36.6	%	29.2	%	13.6	%	8.6	%	5.6	%

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Auto insurance – physical damage coverage


($ in millions, except number of reported claims)	Incurred claims and allocated claim adjustment expenses, net of recoverables												IBNR reserves plus expected development on reported claims		Cumulative number of reported claims
	For the years ended December 31,										Prior year reserve reestimates		As of December 31, 2023
	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Accident year	2019		2020		2021		2022		2023
2019	$	6,241	$	6,162	$	6,121	$	6,120	$	6,113	$	(7)	$	(11)	4,864,602
2020	—		5,484		5,393		5,369		5,359		(10)		(11)		3,989,262
2021	—		—		7,269		7,326		7,269		(57)		(25)		4,567,859
2022	—		—		—		9,286		9,004		(282)		(79)		4,904,706
2023	—		—		—		—		9,484				970		4,591,024
							Total		$	37,229	$	(356)
Reconciliation to total prior year reserve reestimates recognized by line
Prior year reserve reestimates for pre-2019 accident years											(5)
Prior year reserve reestimates for ULAE											(20)
Other											3
Total prior year reserve reestimates											$	(378)

	Cumulative paid claims and allocated claims adjustment expenses, net of recoverables
	For the years ended December 31,
	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Accident year	2019		2020		2021		2022		2023
2019	$	5,936	$	6,132	$	6,126	$	6,123	$	6,124
2020	—		5,119		5,405		5,378		5,370
2021	—		—		6,847		7,351		7,294
2022	—		—		—		8,243		9,083
2023	—		—		—		—		8,514
							Total		$	36,385
All outstanding liabilities before 2019, net of recoverables									—
Liabilities for claims and claim adjustment expenses, net of recoverables									$	844


Average annual percentage payout of incurred claims by age, net of recoverables, as of December 31, 2023
	1 year		2 years		3 years		4 years		5 years
Auto insurance – physical damage coverage	95.0	%	5.0	%	(0.4)	%	(0.1)	%	—	%

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2023 Form 10-K Notes to Consolidated Financial Statements

Homeowners insurance


($ in millions, except number of reported claims)	Incurred claims and allocated claim adjustment expenses, net of recoverables												IBNR reserves plus expected development on reported claims		Cumulative number of reported claims
	For the years ended December 31,										Prior year reserve reestimates		As of December 31, 2023
	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Accident year	2019		2020		2021		2022		2023
2019	$	4,694	$	4,762	$	4,769	$	4,781	$	4,790	$	9	$	38	847,160
2020	—		5,626		5,680		5,773		5,824		51		83		977,647
2021	—		—		6,282		6,408		6,468		60		198		989,192
2022	—		—		—		6,537		6,489		(48)		567		784,867
2023	—		—		—		—		9,258				3,469		919,333
							Total		$	32,829	$	72
Reconciliation to total prior year reserve reestimates recognized by line
Prior year reserve reestimates for pre-2019 accident years											29
Prior year reserve reestimates for ULAE											(17)
Other											18
Total prior year reserve reestimates											$	102

	Cumulative paid claims and allocated claims adjustment expenses, net of recoverables
	For the years ended December 31,
	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Accident year	2019		2020		2021		2022		2023
2019	$	3,414	$	4,432	$	4,621	$	4,699	$	4,752
2020	—		4,162		5,423		5,649		5,741
2021	—		—		4,449		6,035		6,270
2022	—		—		—		3,866		5,922
2023	—		—		—		—		5,789
							Total		$	28,474
All outstanding liabilities before 2019, net of recoverables									95
Liabilities for claims and claim adjustment expenses, net of recoverables									$	4,450


Average annual percentage payout of incurred claims by age, net of recoverables, as of December 31, 2023
	1 year		2 years		3 years		4 years		5 years
Homeowners insurance	70.8	%	22.5	%	2.8	%	0.8	%	0.9	%

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Reconciliation of the net incurred and paid claims development tables above to the reserve for property and casualty insurance claims and claims expense
($ in millions)	As of December 31, 2023
Net outstanding liabilities
Allstate Protection
Auto insurance - liability coverage	$	19,524
Auto insurance - physical damage coverage	844
Homeowners insurance	4,450
Other personal lines	1,788
Commercial lines	1,745
Other business lines	17
Protection Services	46
Run-off Property-Liability (1)	1,361
ULAE	1,679
Other (2)	8
Net reserve for property and casualty insurance claims and claims expense	31,462

Recoverables
Allstate Protection
Auto insurance - liability coverage	6,880
Auto insurance - physical damage coverage	22
Homeowners insurance	343
Other personal lines	243
Commercial lines	326
Other business lines	1
Protection Services	14
Run-off Property-Liability	497
ULAE	70
Total recoverables	8,396
Gross reserve for property and casualty insurance claims and claims expense	$	39,858

(1)Run-off Property-Liability includes business in run-off with most of the claims related to accident years more than 40 years ago. IBNR reserves represent $762 million of the total reserves as of December 31, 2023.

(2)Primarily related to the unamortized fair value adjustment related to the acquisition of National General.

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Note 10			Reserve for Future Policy Benefits and Contractholder Funds


Rollforward of reserve for future policy benefits (1)
	For the years ended December 31,
	Accident and health						Traditional life						Total
($ in millions)	2023		2022		2021		2023		2022		2021		2023		2022		2021
Present value of expected net premiums
Beginning balance	$	1,464	$	1,785	$	1,575	$	238	$	254	$	204	$	1,702	$	2,039	$	1,779
Beginning balance at original discount rate	1,549		1,604		1,307		246		215		154		1,795		1,819		1,461
Effect of changes in cash flow assumptions	(12)		—		—		34		—		—		22		—		—
Effect of actual variances from expected experience	(10)		(137)		(32)		2		36		(5)		(8)		(101)		(37)
Adjusted beginning balance	1,527		1,467		1,275		282		251		149		1,809		1,718		1,424
Issuances (1)	501		371		620		89		34		83		590		405		703
Interest accrual	69		48		52		11		4		7		80		52		59
Net premiums collected	(360)		(337)		(343)		(52)		(43)		(24)		(412)		(380)		(367)

Ending balance at original discount rate	1,737		1,549		1,604		330		246		215		2,067		1,795		1,819
Effect of changes in discount rate assumptions	(49)		(85)		181		(5)		(8)		39		(54)		(93)		220
Ending balance	1,688		1,464		1,785		325		238		254		2,013		1,702		2,039

Present value of expected future policy benefits
Beginning balance	2,229		2,796		2,577		524		673		629		2,753		3,469		3,206
Beginning balance at original discount rate	2,316		2,426		2,070		534		511		426		2,850		2,937		2,496
Effect of changes in cash flow assumptions	21		(44)		(2)		30		—		—		51		(44)		(2)
Effect of actual variances from expected experience	(33)		(116)		(5)		1		24		4		(32)		(92)		(1)
Adjusted beginning balance	2,304		2,266		2,063		565		535		430		2,869		2,801		2,493
Issuances (1)	486		360		664		102		42		94		588		402		758
Interest accrual	103		76		80		25		12		21		128		88		101
Benefit payments	(398)		(386)		(381)		(36)		(55)		(34)		(434)		(441)		(415)

Ending balance at original discount rate	2,495		2,316		2,426		656		534		511		3,151		2,850		2,937
Effect of changes in discount rate assumptions	(42)		(87)		370		1		(10)		162		(41)		(97)		532
Ending balance	$	2,453	$	2,229	$	2,796	$	657	$	524	$	673	$	3,110	$	2,753	$	3,469

Net reserve for future policy benefits (2)	$	765	$	765	$	1,011	$	332	$	286	$	419	$	1,097	$	1,051	$	1,430
Less: reinsurance recoverables	81		76		149		2		1		2		83		77		151
Net reserve for future policy benefits, after reinsurance recoverables	$	684	$	689	$	862	$	330	$	285	$	417	$	1,014	$	974	$	1,279

(1)2021 includes assumed business from ALNY and business acquired from National General.

(2)Excludes $250 million, $271 million, and $265 million of reserves related to short-duration and other contracts as of December 31, 2023, 2022 and 2021, respectively.

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Revenue and interest recognized in the consolidated statements of operations
($ in millions)	For the years ended December 31,
		2023			2022			2021
Revenues (1)
Accident and health			$	814		$	838		$	872
Traditional life			106			94			55
Total			$	920		$	932		$	927

Interest expense (2)
Accident and health			$	34		$	28		$	28
Traditional life			14			8			14
Total			$	48		$	36		$	42

(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 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 Consolidated Statements of Operations.

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 December 31,
	2023				2022				2021
($ in millions)	Undiscounted		Discounted		Undiscounted		Discounted		Undiscounted		Discounted
Accident and health
Expected future gross premiums	$	5,339	$	3,744	$	4,919	$	3,517	$	5,166	$	4,369
Expected future benefits and expenses	3,578		2,453		3,243		2,229		3,426		2,796
Traditional life
Expected future gross premiums	896		623		679		465		614		505
Expected future benefits and expenses	1,301		657		978		524		940		673


Key assumptions used in calculating the reserve for future policy benefits
	As of December 31,
	Accident and health				Traditional life
	2023		2022		2023		2022
Weighted-average duration (in years)	4.0		3.6		15.0		13.8
Weighted-average interest rates
Interest accretion rate (discount rate at contract issuance)	5.83	%	4.97	%	5.41	%	5.56	%
Current discount rate (upper-medium grade fixed income yield)	4.77		4.72		4.97		5.23

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.

The Company’s annual review of the mortality, morbidity and lapse experience assumptions in 2023, 2022, and 2021 resulted in an increase of less than $1 million, a decrease of $4 million and a decrease of $11 million respectively, to the reserve for future policy benefits.

The following table summarizes the ratio of actual to expected experience used in the determination of the reserve for future policy benefits.


	As of December 31,
	Accident and health				Traditional life
	2023		2022		2023		2022
Actual to expected experience
Mortality	n/a		n/a		95	%	238	%

Morbidity	92	%	94	%	n/a		n/a


Lapses	110	%	112	%	78	%	61	%

n/a = not applicable

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2023 Form 10-K Notes to Consolidated Financial Statements

Contractholder funds


Contractholder funds activity
	For the years ended December 31,
($ in millions)	2023			2022			2021
Beginning balance	$	879		$	890		$	857
Deposits	130			133			118
Interest credited	34			32			34
Benefits	(14)			(21)			(41)
Surrenders and partial withdrawals	(21)			(28)			(23)
Contract charges	(119)			(117)			(111)
Other adjustments	(1)			(10)			56
Ending balance	$	888		$	879		$	890

Components of contractholder funds
Interest-sensitive life insurance	$	842		$	829		$	835
Fixed annuities	46			50			55
Total	$	888		$	879		$	890

Weighted-average crediting rate	4.21		%	4.28		%	4.29		%
Net amount at risk (1)	$	11,359		$	11,610		$	11,682
Cash surrender value	726			719			725

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


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
December 31, 2023
Less than 3.00%	$	—	$	—	$	—
3.00% - 3.49%	—		30		30
3.50% - 3.99%	11		—		11
4.00% - 4.49%	434		—		434
4.50% - 4.99%	262		—		262
5.00% or greater	67		—		67
Non-account balances (2)					84
Total	$	774	$	30	$	888

December 31, 2022
Less than 3.00%	$	—	$	—	$	—
3.00% - 3.49%	—		16		16
3.50% - 3.99%	12		—		12
4.00% - 4.49%	429		—		429
4.50% - 4.99%	267		—		267
5.00% or greater	69		—		69
Non-account balances (2)					86
Total	$	777	$	16	$	879

(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 IBNR. 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.

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Accident and health short-duration contracts

The following presents information about incurred and paid claims development as of December 31, 2023, net of recoverables, as well as the cumulative number of reported claims and the total of IBNR reserves plus expected development on reported claims included in the net incurred claims amounts. See Note 2 for the accounting policy and methodology for determining reserves for future policy benefits, including both reported and IBNR claims. The Company’s accident and health claims are counted by claim number assigned to each claimant per illness, injury or death, regardless of number of services rendered for each incident. Claims closed without payment are not included in the cumulative number of reported accident and health claims. The information about incurred and paid claims development for the 2019 to 2023 years, and the average annual percentage payout of incurred claims by age as of December 31, 2023, is presented as required supplementary information.

Group and individual accident and health


($ in millions, except number of reported claims)	Incurred claims and allocated claim adjustment expenses, net of recoverables										IBNR reserves plus expected development on reported claims		Cumulative number of reported claims
	For the years ended December 31,										As of December 31, 2023
	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Accident year	2019		2020		2021		2022		2023
2019	$	257	$	239	$	242	$	242	$	242	$	—	313,017
2020	—		297		293		294		291		1		415,364
2021	—		—		424		420		415		2		677,649
2022	—		—		—		437		402		8		587,462
2023	—		—		—		—		476		164		413,651
							Total		$	1,826

	Cumulative paid claims and allocated claims adjustment expenses, net of recoverables
	For the years ended December 31,
	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Accident year	2019		2020		2021		2022		2023
2019	$	158	$	234	$	242	$	242	$	242
2020	—		184		284		290		290
2021	—				272		408		414
2022	—		—		—		275		393
2023	—		—		—		—		312
							Total		$	1,651
All outstanding liabilities before 2019, net of recoverables									—
Liabilities for claims and claim adjustment expenses, net of recoverables									$	175

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2023 Form 10-K Notes to Consolidated Financial Statements


Reconciliation of the net incurred and paid claims development tables above to the reserve for future policy benefits
($ in millions)	As of December 31, 2023
Net outstanding liabilities
Group and individual accident and health short-duration contracts	$	175

Long-duration accident and health insurance	684
Long-duration traditional life insurance	330
Other contracts (1)	29
ULAE	9
Net reserve for future policy benefits	1,227
Recoverables
Group and individual accident and health short-duration contracts	37
Other accident and health short-duration contracts	—
Insurance lines other than short-duration	83
ULAE	—
Gross reserve for future policy benefits	$	1,347

(1)Other includes short-duration contracts related to employer voluntary benefits and other contracts.


Average annual percentage payout of incurred claims by age, net of recoverables, as of December 31, 2023
	1 year		2 years		3 years		4 years		5 years
Group and individual accident and health	64.2	%	33.1	%	2.0	%	0.5	%	0.2	%

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Note 11			Reinsurance and Indemnification


Effects of reinsurance and indemnification on property and casualty premiums written and earned and accident and health insurance premiums and contract charges
	For the years ended December 31,
($ in millions)	2023		2022		2021
Property and casualty insurance premiums written
Direct	$	54,632	$	50,065	$	45,523
Assumed	396		245		213
Ceded	(2,018)		(1,824)		(1,736)
Property and casualty insurance premiums written, net of recoverables	$	53,010	$	48,486	$	44,000

Property and casualty insurance premiums earned
Direct	$	52,301	$	47,552	$	43,944
Assumed	358		221		178
Ceded	(1,989)		(1,869)		(1,904)
Property and casualty insurance premiums earned, net of recoverables	$	50,670	$	45,904	$	42,218

Accident and health insurance premiums and contract charges
Direct	$	1,865	$	1,838	$	1,892
Assumed	28		31		21
Ceded	(47)		(37)		(79)
Accident and health insurance premiums and contract charges, net of recoverables	$	1,846	$	1,832	$	1,834


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)		For the years ended December 31,
	2023			2022			2021
Property and casualty insurance claims and claims expense (1)		$	(633)		$	(1,600)		$	(3,484)
Accident, health and other policy benefits		(44)			15			(91)

(1)Includes approximately $39 million of ceded losses related to the Nationwide Reinsurance Program for 2023.


Reinsurance and indemnification recoverables, net
	As of December 31,
($ in millions)	2023		2022
Property and casualty
Paid and due from reinsurers and indemnitors	$	254	$	291
Unpaid losses estimated (including IBNR)	8,396		9,176
Total property and casualty	$	8,650	$	9,467
Accident and health insurance	159		152
Total	$	8,809	$	9,619


Rollforward of credit loss allowance for reinsurance recoverables
	For the years ended December 31,
($ in millions)	2023		2022
Property and casualty (1) (2)
Beginning balance	$	(62)	$	(66)
Increase in the provision for credit losses	(1)		(5)
Write-offs	1		9
Ending balance	$	(62)	$	(62)

Accident and health insurance
Beginning balance	$	(3)	$	(8)

Decrease/(Increase) in the provision for credit losses	—		5
Write-offs	—		—
Ending Balance	$	(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.

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2023 Form 10-K Notes to Consolidated Financial Statements

Property and casualty reinsurance and indemnifications recoverables

Property and casualty programs are grouped by the following characteristics:

1.Indemnification programs - industry pools, facilities or associations that are governed by state insurance statutes or regulations or the federal government.

2.Catastrophe reinsurance programs - reinsurance protection for catastrophe exposure nationwide and by specific states, as applicable.

3.Other reinsurance programs - reinsurance protection for asbestos, environmental and other liability exposures as well as commercial lines, including shared economy.

Property and casualty reinsurance is in place for the Allstate Protection, Run-off lines and Protection Services segments. The Company purchases reinsurance after evaluating the financial condition of the reinsurer as well as the terms and price of coverage.

Indemnification programs The Company participates in state-based industry pools or facilities mandating participation by insurers offering certain coverage in their state, including the Michigan Catastrophic Claims Association (“MCCA”), the New Jersey Property-Liability Insurance Guaranty Association (“PLIGA”), the North Carolina Reinsurance Facility (“NCRF”) and the Florida Hurricane Catastrophe Fund (“FHCF”). When the Company pays qualifying claims under the coverage indemnified by a state’s pool or facility, the Company is reimbursed for the qualifying claim losses and expenses. Each state pool or facility may assess participating companies to collect sufficient amounts to meet its total indemnification requirements. The enabling legislation for each state’s pool or facility compels the pool or facility only to indemnify participating companies for qualifying claim losses and expenses; the state pool or facility does not underwrite the coverage or take on the ultimate risk of the indemnified business. As a pass through, these pools or facilities manage the receipt of assessments paid by participating companies and payment of indemnified amounts for covered claims presented by participating companies. The Company has not had any credit losses related to these indemnification programs.

State-based industry pools or facilities

Michigan Catastrophic Claims Association The MCCA is a statutory indemnification mechanism for member insurers’ qualifying personal injury protection claims paid for the unlimited lifetime medical benefits above the applicable retention level for qualifying injuries from automobile, motorcycle and commercial vehicle accidents. Indemnification recoverables on paid and unpaid claims, including IBNR, as of December 31, 2023 and 2022 include $6.42 billion and $6.72 billion, respectively, from the MCCA for its indemnification obligation.

The MCCA is funded by annually assessing participating member companies actively writing motor vehicle coverage in Michigan on a per vehicle basis that is currently $122 per vehicle insured for unlimited personal injury protection (“PIP”) coverage and $48 per vehicle for other PIP coverage. The MCCA’s calculation of the annual assessment is based upon the total of members’ actuarially determined present value of expected payments on lifetime claims by all persons expected to be catastrophically injured in that year and ultimately qualify for MCCA reimbursement, its operating expenses, and adjustments for the amount of excesses or deficiencies in prior assessments. The assessment is incurred by the Company as policies are written and recovered as a component of premiums from the Company’s customers.

The MCCA indemnifies qualifying claims of all current and former member companies (whether or not actively writing motor vehicle coverage in Michigan) for qualifying claims and claims expenses incurred while the member companies were actively writing the mandatory PIP coverage in Michigan. Member companies actively writing automobile coverage in Michigan include the MCCA annual assessments in determining the level of premiums to charge insureds in the state.

As required for member companies by the MCCA, the Company reports covered paid and unpaid claims to the MCCA when estimates of loss for a reported claim are expected to exceed the retention level, the claims involve certain types of severe injuries, or there are litigation demands received suggesting the claim value exceeds certain thresholds. The retention level is adjusted upward every other MCCA fiscal year by the lesser of 6% or the increase in the consumer price index. The retention level is $635 thousand per claim for the fiscal two-years ending June 30, 2025 compared to $600 thousand per claim for the fiscal two-years ending June 30, 2023.

The MCCA is obligated to fund the ultimate liability of member companies’ qualifying claims and claim expenses. The MCCA does not underwrite the insurance coverage or hold any underwriting risk.

The MCCA indemnifies members as qualifying claims are paid and billed by members to the MCCA. Unlimited lifetime covered losses result in significant levels of ultimate incurred claim reserves being recorded by member companies along with offsetting indemnification recoverables. Disputes with claimants over coverage on certain reported claims can result in additional losses, which may be recoverable from the MCCA, excluding litigation expenses. There is currently no method by which insurers are able to obtain the benefit of managed care programs to reduce claims costs through the MCCA.

The MCCA annual assessments fund current operations and member company reimbursements. The MCCA prepares statutory-basis financial statements in conformity with accounting practices prescribed or permitted by the State of Michigan Department of Insurance and Financial Services (“MI

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DOI”). The MI DOI has granted the MCCA a statutory permitted practice that expires in June 30, 2025 to discount its liabilities for loss and loss adjustment expense. As of June 30, 2023, the date of its most recent annual financial report, the MCCA had cash and invested assets of $21.58 billion and an accumulated deficit of $2.05 billion. The permitted practice reduced the accumulated deficit by $44.95 billion. As a result of this deficit, the assessment includes an increase of $48 per passenger and commercial vehicle and motorcycle insured beginning July 1, 2023, with varying assessments for commercial fleet and historical vehicles.

New Jersey Property-Liability Insurance Guaranty Association PLIGA serves as the statutory administrator of the Unsatisfied Claim and Judgment Fund (“UCJF”), Workers’ Compensation Security Fund and the New Jersey Surplus Lines Insurance Guaranty Fund.

In addition to its insolvency protection responsibilities, PLIGA reimburses insurers for unlimited excess medical benefits (“EMBs”) paid in connection with PIP claims in excess of $75,000 for policies issued or renewed prior to January 1, 1991, and limited EMB claims in excess of $75,000 and capped at $250,000 for policies issued or renewed on or after January 1, 1991, to December 31, 2003.

A significant portion of the incurred claim reserves and the recoverables can be attributed to a small number of catastrophic claims. Assessments paid to PLIGA for the EMB program totaled $7 million in 2023. The amounts of paid and unpaid recoverables as of December 31, 2023 and 2022 were $326 million and $330 million, respectively.

PLIGA annually assesses all admitted property and casualty insurers writing covered lines in New Jersey for PLIGA indemnification and expenses. PLIGA assessments may be recouped as a surcharge on premiums collected. PLIGA does not ultimately retain underwriting risk as it assesses member companies for their expected qualifying losses to provide funding for payment of its indemnification obligation to member companies for their actual losses. As a pass through, PLIGA facilitates these transactions of receipt of assessments paid by member companies and payment to member companies for covered claims presented by them for indemnification. As of December 31, 2022, the date of its most recent annual financial report, PLIGA had a fund balance of $271 million.

As statutory administrator of the UCJF, PLIGA provides compensation to qualified claimants for personal injury protection, bodily injury, or death caused by private passenger automobiles operated by uninsured or “hit and run” drivers. The UCJF also provides private passenger pedestrian personal injury protection benefits when no other coverage is available.

PLIGA annually collects a UCJF assessment from all admitted property and casualty insurers writing motor vehicle liability insurance in New Jersey for UCJF indemnification and expenses. UCJF assessments can

be expensed as losses recoverable in rates as appropriate. As of December 31, 2022, the date of its most recent annual financial report, the UCJF fund had a balance of $71 million.

North Carolina Reinsurance Facility The NCRF provides automobile liability insurance to drivers that private market insurers are not otherwise willing to insure. All insurers licensed to write automobile insurance in North Carolina are members of the NCRF. Premiums, losses and expenses are assigned to the NCRF. North Carolina law allows the NCRF to recoup operating losses for certain insureds through a surcharge to policyholders. As of September 30, 2023, the NCRF reported a deficit of $122 million in members’ equity. The NCRF implemented a loss recoupment surcharge on all private passenger and commercial fleet policies effective October 1, 2023, through March 31, 2024. Member companies are assessed the recoupment surcharge. The loss recoupment surcharge will be adjusted on April 1, 2024 and discontinued once losses are recovered. The NCRF results are shared by the member companies in proportion to their respective North Carolina automobile liability writings. For the fiscal year ending September 30, 2023, net gain was $25 million, including $1.2 billion of earned premiums, $364 million of certain private passenger auto risk recoupment and $153 million of member loss recoupments. As of December 31, 2023, the NCRF recoverables on paid claims is $83 million and recoverables on unpaid claims is $299 million. Paid recoverable balances, if covered, are typically settled within sixty days of monthly filing.

Florida Hurricane Catastrophe Fund Allstate subsidiaries Castle Key Insurance Company (“CKIC”) and Castle Key Indemnity Company (“CKI”, and together with CKIC, “Castle Key”) participate in the mandatory coverage provided by the FHCF and therefore have access to reimbursement for certain qualifying Florida hurricane losses from the FHCF. Castle Key has exposure to assessments and pays annual premiums to the FHCF for this reimbursement protection. The FHCF has the authority to issue bonds to pay its obligations to participating insurers in excess of its capital balances. Payment of these bonds is funded by emergency assessments on all property and casualty premiums in the state, except workers’ compensation, medical malpractice, accident and health insurance and policies written under the National Flood Insurance Program (“NFIP”). The FHCF emergency assessments are limited to 6% of premiums per year beginning the first year in which reimbursements require bonding, and up to a total of 10% of premiums per year for assessments in the second and subsequent years, if required to fund additional bonding. The FHCF has not issued an emergency assessment since 2015.

Annual premiums earned and paid under the FHCF agreement were $28 million, $24 million and $15 million in 2023, 2022 and 2021, respectively. Commuted contracts related to Hurricane Irma resulted in payments to the Company of $6 million in 2023. Qualifying losses were $74 million and $13 million in 2022 and 2021, respectively. The Company has access

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to reimbursement provided by the FHCF for 90% of qualifying personal property losses that exceed its current retention of $152 million for the two largest hurricanes and $51 million for other hurricanes, up to a maximum total of $312 million, effective from June 1, 2023 to May 31, 2024. The amounts recoverable from the FHCF totaled $82 million and $96 million as of December 31, 2023 and 2022, respectively.

Federal Government - National Flood Insurance Program NFIP is a program administered by the Federal Emergency Management Agency (“FEMA”) whereby the Company sells and services NFIP flood insurance policies as an agent of FEMA and receives fees for its services. The Company is fully indemnified for claims and claim expenses and does not retain any ultimate risk for the indemnified business. The federal government is obligated to pay all claims and certain allocated loss adjustment expenses in accordance with the arrangement.

Congressional authorization for the NFIP is periodically evaluated and may be subjected to freezes, including when the federal government experiences a shutdown. FEMA has a NFIP reinsurance program to manage the future exposure of the NFIP through the transfer of risk to private reinsurance companies and capital market investors. Congress is evaluating the funding of the program as well as considering reforms to the program that would be incorporated in legislation to reauthorize the NFIP. As of September 30, 2023, the NFIP owes $20.5 billion to the U.S. Treasury.

The amounts recoverable as of December 31, 2023 and 2022 were $76 million and $145 million, respectively. Premiums earned under the NFIP include $327 million, $319 million and $350 million in 2023, 2022 and 2021, respectively. Qualifying losses incurred include $102 million, $435 million and $267 million in 2023, 2022 and 2021, respectively.

Catastrophe reinsurance The Company’s reinsurance program is designed to provide reinsurance protection for catastrophes resulting from multiple perils including hurricanes, windstorms, hail, tornadoes, winter storms, wildfires, earthquakes and fires following earthquakes.

The Company purchases reinsurance from traditional reinsurance companies as well as the insurance-linked securities (“ILS”) market.
The majority of the Company’s program comprises multi-year contracts, primarily placed in the traditional reinsurance market, such that generally one-third of the program is renewed every year.
Coverage is generally purchased on a broad geographic, product line and multiple peril loss basis.
Florida personal lines property is covered by a separate agreement, as the risk of loss is different and the Company’s subsidiaries operating in this state are separately capitalized.
When applicable, reinsurance reinstatement premiums are recognized in the same period as

the loss event that gave rise to the reinstatement premium and are recorded in claims and claims expense in the consolidated statements of operations.

The Company’s current catastrophe reinsurance program supports the Company’s risk and return framework which is intended to provide shareholders with an acceptable return on the risks assumed in the property business, and to reduce variability of earnings, while providing protection to customers. This framework incorporates the Company’s 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. The Company’s reinsurance agreements are part of its capital models and its catastrophe risk management strategy. As of December 31, 2023, the modeled 1-in-100 probable maximum loss for hurricane, earthquake and wildfire perils is approximately $2.5 billion, net of reinsurance. The Company continually reviews its aggregate risk appetite and the cost and availability of reinsurance to optimize the risk and return profile of this exposure. The following catastrophe reinsurance agreements are in effect as of December 31, 2023.

The Nationwide Excess Catastrophe Reinsurance Program (the “Nationwide Program”) provides coverage up to $6.92 billion of loss less retention of $500 million to $750 million, and is subject to the percentage of reinsurance placed in each of its agreements. Property business in the state of Florida is excluded from this program. Separate reinsurance agreements address the distinct needs of separately capitalized legal entities. The Nationwide Program includes reinsurance agreements with both the traditional and ILS markets as described below:

*•*Core traditional market multi-year and per occurrence excess agreements provide limits totaling $4.69 billion for catastrophe losses arising out of multiple perils and are comprised of the following:

–$3.58 billion of placed limits exhausting at $4.25 billion, with one annual reinstatement:

▪31.6% of the coverage is provided in four multi-year contracts attaching at $500 million.

▪31.7% of the coverage is provided in five multi-year contracts with the first $250 million in excess of $500 million retained by Allstate.

▪31.7% of the coverage is provided in one single-year contract providing $250 million of placed limit in excess of a $750 million retention and four multi-year contracts attaching at $1.00 billion.

▪Three single-year contracts providing coverage between $1.75 billion and $4.25 billion, 4% placed.

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–Two single-year contracts providing $500 million of limits in excess of a $4.25 billion retention, one 95% placed and one 4% placed.

–$105 million of placed limits in excess of a $4.75 billion retention and $131 million of placed limits in excess of a $5.54 billion retention, both with a 5% co-participation and one reinstatement of limits over its eight-year term.

–$375 million of placed limits in single-year placements filling capacity around the multi-year and ILS placements:

▪One contract providing $95 million of placed limits in excess of a $4.75 billion retention, with two limits available in any one contract year.

▪One contract providing $260 million of placed limits in excess of a $4.75 billion retention, with no annual reinstatement.

▪One contract providing $20 million of placed limits in excess of a $6.82 billion retention, with no annual reinstatement.

*•*ILS placements provide $1.80 billion of placed limits, with no reinstatement of limits, and are comprised of the following:

–Six contracts providing occurrence coverage of $1.05 billion of placed limits, reinsuring losses in all states except Florida caused by named storms, earthquakes and fire following earthquakes, severe weather, wildfires, and other naturally occurring or man-made events determined to be a catastrophe by the Company.

–Three contracts providing occurrence and aggregate coverage of $425 million of placed limits, also provide that for each annual period beginning April 1, Allstate declared catastrophes to personal lines property and automobile business can be aggregated to erode the aggregate retention and qualify for coverage under the aggregate limits. Recoveries are limited to the ultimate net loss from the reinsured event.

–Two contracts, providing aggregate coverage of $325 million of placed limits.

Florida program The Florida program provides coverage for property policies of CKIC and certain affiliate companies for Florida catastrophe events up to $1.66 billion of a billion of losses less a $40 million retention. The Florida program includes reinsurance agreements placed in the traditional market, the FHCF, the Florida Reinsurance to Assist Policyholders Program (“RAP”) and the 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 $695 million of limits, with a portion of the traditional market

placements providing coverage for perils not covered by the FHCF and RAP contracts, which only cover hurricanes.

Three FHCF contracts provide $330 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.
Three RAP contracts provide $49 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 $620 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 $255 million of coverage, subject to a $60 million retention, with one reinstatement of limits. Inuring contracts include the National General Florida Hurricane Catastrophe Fund contract providing $64 million of limits in excess of a $33 million retention, 90% placed, and the National General RAP Contract providing $10 million of limits in excess of a $24 million retention, 90% placed.

National General Reciprocal Excess Catastrophe Reinsurance Contracts are placed in the traditional market and provide $600 million of coverage, subject to a $20 million retention, with one reinstatement of limits.

Kentucky Earthquake Excess Catastrophe Reinsurance Contract is placed in the traditional market and provides two limits of $28 million, subject to a $2 million retention with one reinstatement of limits.

Canada Catastrophe Excess of Loss Reinsurance Contract is placed in the traditional market and provides CAD 255 million of placed limits, subject to a CAD 75 million retention, with one reinstatement of limits.

The Company has not experienced credit losses on its catastrophe reinsurance programs. The total cost of the property catastrophe reinsurance program was $1.02 billion, $788 million and $556 million in 2023, 2022 and 2021, respectively.

Other reinsurance programs The Company’s other reinsurance programs relate to commercial lines, including shared economy, and asbestos, environmental, and other liability exposures. The largest reinsurance recoverable balance the Company had outstanding was $180 million from Lloyd’s of London as of December 31, 2023 and 2022. These programs also include reinsurance recoverables of $113 million and $183 million from Aleka Insurance Inc. as of December 31, 2023 and 2022, respectively.

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2023 Form 10-K Notes to Consolidated Financial Statements


Note 12			Deferred Policy Acquisition Costs


Deferred policy acquisition costs activity
	Accident and health insurance long-duration contracts						Accident and health insurance short-duration contracts		Property and casualty		Total
($ in millions)	Accident and health		Traditional life		Interest-sensitive life
Year ended December 31, 2023
Beginning balance	$	322	$	79	$	101	$	26	$	4,914	$	5,442
Acquisition costs deferred	100		33		16		13		7,614		7,776
Amortization charged to income	(73)		(21)		(14)		(10)		(7,128)		(7,246)
Experience adjustment	(28)		(1)		(3)		—		—		(32)
Ending balance	$	321	$	90	$	100	$	29	$	5,400	$	5,940

Year ended December 31, 2022
Beginning balance	$	339	$	47	$	90	$	17	$	4,245	$	4,738
Acquisition costs deferred	88		40		27		16		7,167		7,338
Amortization charged to income	(77)		(7)		(15)		(7)		(6,498)		(6,604)
Experience adjustment	(28)		(1)		(1)		—		—		(30)
Ending balance	$	322	$	79	$	101	$	26	$	4,914	$	5,442

Year ended December 31, 2021
Beginning balance	$	333	$	32	$	97	$	10	$	3,304	$	3,776
Acquisitions (1)	3		—		—		—		321		324

Acquisition costs deferred	93		26		14		13		6,728		6,874
Amortization charged to income	(64)		(10)		(17)		(6)		(6,108)		(6,205)
Experience adjustment	(26)		(1)		(4)		—		—		(31)
Ending balance	$	339	$	47	$	90	$	17	$	4,245	$	4,738

(1)Represents value of business acquired from National General and SafeAuto.

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2023 Form 10-K Notes to Consolidated Financial Statements


Note 13			Capital Structure


Total debt outstanding
	As of December 31,
($ in millions)	2023		2022
Floating Rate Senior Notes, due 2023 (1)	$	—	$	250
3.150% Senior Notes, due 2023 (2)	—		500
6.750% Senior Notes due 2024 (2) (4)	350		350
0.750% Senior Notes, due 2025 (2)	600		600
3.280% Senior Notes, due 2026 (2)	550		550
Due in one year through five years	1,500		2,250
1.450% Senior Notes, due 2030 (2)	600		600
6.125% Senior Notes, due 2032 (2)	159		159
5.250% Senior Notes due 2033 (2)	750		—
5.350% Senior Notes due 2033 (2)	323		323
Due after five years through ten years	1,832		1,082
5.550% Senior Notes due 2035 (2)	546		546
5.950% Senior Notes, due 2036 (2)	386		386
6.900% Senior Debentures, due 2038	165		165
5.200% Senior Notes, due 2042 (2)	62		62
4.500% Senior Notes, due 2043 (2)	500		500
4.200% Senior Notes, due 2046 (2)	700		700
3.850% Senior Notes, due 2049 (2)	500		500
Floating Rate Subordinated Debentures, due 2053 (3)	500		500
Floating Rate Subordinated Debentures, due 2053 (3)	800		800
6.500% Junior Subordinated Debentures, due 2067	500		500
Due after ten years	4,659		4,659

Long-term debt total principal	7,991		7,991
Fair value adjustments (4)	7		26
Debt issuance costs	(56)		(53)
Total long-term debt	7,942		7,964
Short-term debt (5)	—		—
Total debt	$	7,942	$	7,964

(1)2023 Floating Rate Senior Notes were not redeemable prior to the applicable maturity dates and bear interest at a floating rate equal to three-month LIBOR, reset quarterly on each interest reset date, plus 0.63% per year.

(2)Senior Notes are subject to redemption at the Company’s option in whole or in part at any time at the greater of either 100% of the principal amount plus accrued and unpaid interest to the redemption date or the discounted sum of the present values of the remaining scheduled payments of principal and interest and accrued and unpaid interest to the redemption date.

(3)2053 Subordinated Debentures became floating rate in 2023.

(4)Debt acquired as part of the National General acquisition completed on January 4, 2021.

(5)The Company classifies any borrowings which have a maturity of twelve months or less at inception as short-term debt.

Debt maturities


Debt maturities for each of the next five years and thereafter (excluding issuance costs and other)
($ in millions)
2024	$	350
2025	600
2026	550
2027	—
2028	—
Thereafter	6,491
Total long-term debt principal	$	7,991

Repayment of debt On March 29, 2023, the Company repaid, at maturity, $250 million of Floating Rate Senior Notes that bear interest at a floating rate equal to three-month London Interbank Offered Rate

(“LIBOR”) plus 0.63% per year. On June 15, 2023, the Company repaid, at maturity, $500 million of 3.15% Senior Notes.

Issuance of debt On March 31, 2023, the Company issued $750 million of 5.250% Senior Notes due 2033. Interest on the Senior Notes is payable semi-annually in arrears on March 30 and September 30 of each year, beginning on September 30, 2023. 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 to repay the $500 million senior debt maturity and for general corporate purposes.

LIBOR-linked debt The administrator of LIBOR ceased the publication of the U.S. dollar (“USD”) LIBOR settings on June 30, 2023. LIBOR was used as a

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2023 Form 10-K Notes to Consolidated Financial Statements

benchmark or reference rate for Subordinated Debentures that the Company has issued.

Subordinated Debentures The Subordinated Debentures allow for the use of an alternative methodology to determine the interest rate if LIBOR is no longer available. The Federal Reserve Board adopted a final rule that implemented the Adjustable Interest Rate (LIBOR) Act on December 16, 2022. This guidance impacts the alternative rate methodology utilized by the Subordinated Debentures.

Both Subordinated Debentures replaced the three-month LIBOR with the CME Term SOFR Reference Rate published for a three-month tenor plus a spread adjustment of 0.26161% effective for interest paid under the terms of each of the Subordinated Debentures after June 30, 2023, as shown in the table below.


Interest rates for LIBOR-linked debt
($ in millions)	5.100% Subordinated Debentures, due 2053		5.750% Subordinated Debentures, due 2053
Debt outstanding	$	500	$	800
Dividend accrual date (1)	July 15, 2023		August 15, 2023
Rate following commencement date	3-month SOFR + 3.165% + 0.26161%		3-month SOFR + 2.938% + 0.26161%

(1)First dividend accrual date following the last published three-month LIBOR rate on June 30, 2023.

The Subordinated Debentures may be redeemed (i) in whole at any time or in part from time to time on or after January 15, 2023 for the 5.100% Subordinated Debentures and August 15, 2023 for the 5.750% Subordinated Debentures at their principal amount plus accrued and unpaid interest to, but excluding, the date of redemption; provided that if the Subordinated Debentures are not redeemed in whole, at least $25 million aggregate principal amount must remain outstanding, or (ii) in whole, but not in part, prior to January 15, 2023 for the 5.100% Subordinated Debentures and August 15, 2023 for the 5.750% Subordinated Debentures, within 90 days after the occurrence of certain tax and rating agency events, at their principal amount or, if greater, a make-whole redemption price, plus accrued and unpaid interest to, but excluding, the date of redemption. The 5.750% Subordinated Debentures have this make-whole redemption price provision only when a reduction of equity credit assigned by a rating agency has occurred.

Interest on the 5.100% Subordinated Debentures was payable quarterly at the stated fixed annual rate to January 14, 2023, or any earlier redemption date, and then at an annual rate equal to the three-month LIBOR plus 3.165%. Interest on the 5.750% Subordinated Debentures was payable semi-annually at the stated fixed annual rate to August 14, 2023, or any earlier redemption date, and then quarterly at an annual rate equal to the three-month LIBOR plus 2.938%.

Junior Subordinated Debentures As of December 31, 2023, the Company had outstanding $500 million of Series A 6.500% Fixed-to-Floating Rate Junior Subordinated Debentures (“Junior Subordinated Debentures”). The scheduled maturity date for the Debentures is May 15, 2057 with a final maturity date of May 15, 2067. The Junior Subordinated Debentures may be redeemed (i) in whole or in part, at any time on or after May 15, 2037 at the principal amount plus accrued and unpaid interest to the date of redemption, or (ii) in certain circumstances, in whole or in part, prior to May 15, 2037 at the principal amount plus accrued and unpaid interest to the date of redemption or, if greater, a make-whole price.

Interest on the Junior Subordinated Debentures is payable semi-annually at the stated fixed annual rate to May 15, 2037, and then payable quarterly at an annual rate equal to the three-month LIBOR plus 2.120%. The LIBOR Act guidance impacted the alternative rate methodology utilized by the Debentures. The Junior Subordinated Debentures replaced the three-month LIBOR with the CME Term SOFR Reference Rate published for a three-month tenor plus a spread adjustment of 0.26161%. The Company may elect at one or more times to defer payment of interest on the Junior Subordinated Debentures for one or more consecutive interest periods that do not exceed 10 years. Interest compounds during such deferral periods at the rate in effect for each period. The interest deferral feature obligates the Company in certain circumstances to issue common stock or certain other types of securities if it cannot otherwise raise sufficient funds to make the required interest payments. The Company has reserved 75 million shares of its authorized and unissued common stock to satisfy this obligation.

The terms of the Subordinated Debentures and Junior Subordinated Debentures prohibit the Company from declaring or paying any dividends or distributions on common or preferred stock or redeeming, purchasing, acquiring, or making liquidation payments on common stock or preferred stock if the Company has elected to defer interest payments on the Subordinated Debentures or Junior Subordinated Debentures, respectively, subject to certain limited exceptions.

In connection with the issuance of the Junior Subordinated Debentures, the Company entered into a replacement capital covenant (“RCC”). This covenant was not intended for the benefit of the holders of the Junior Subordinated Debentures and could not be enforced by them. Rather, it was for the benefit of holders of one or more other designated series of the Company’s indebtedness (“covered debt”), currently the $800 million Floating Rate Subordinated Debentures due in 2053. Pursuant to the RCC, the Company has agreed that it will not repay, redeem, or purchase the Junior Subordinated Debentures on or before May 15, 2067 (or such earlier date on which the RCC terminates by its terms) unless, subject to certain limitations, the Company has received net cash proceeds in specified amounts from the sale of common stock or certain other qualifying securities.

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2023 Form 10-K Notes to Consolidated Financial Statements

The promises and covenants contained in the RCC will not apply if (i) S&P upgrades the Company’s issuer credit rating to A or above, (ii) the Company redeems the Junior Subordinated Debentures due to a tax event, (iii) after notice of redemption has been given by the Company and a market disruption event occurs preventing the Company from raising proceeds in accordance with the RCC, or (iv) the Company repurchases or redeems up to 10% of the outstanding principal of the Junior Subordinated Debentures in any one-year period, provided that no more than 25% will be so repurchased, redeemed or purchased in any ten-year period.

The RCC terminates in 2067. The RCC will terminate prior to its scheduled termination date if (i) the Junior Subordinated Debentures are no longer outstanding and the Company has fulfilled its obligations under the RCC or it is no longer applicable, (ii) the holders of a majority of the then-outstanding principal amount of the then-effective series of covered debt consent to agree to the termination of the RCC, (iii) the Company does not have any series of outstanding debt that is eligible to be treated as covered debt under the RCC, (iv) the Junior Subordinated Debentures are accelerated as a result of an event of default, (v) certain rating agency or change in control events occur, (vi) S&P, or any successor thereto, no longer assigns a solicited rating on senior debt issued or guaranteed by the Company, or (vii) the termination of the RCC would have no effect on the equity credit provided by S&P with respect to the Junior Subordinated Debentures. An event of default, as defined by the supplemental indenture, includes default in the payment of interest or principal and bankruptcy proceedings.

Other capital resources To manage short-term liquidity, the Company maintains a commercial paper program and a credit facility as a potential source of funds. In November, 2020, the Company entered into a new unsecured revolving credit facility agreement with a borrowing limit of $750 million. In November 2022, the maturity date was extended to November 2027 and the USD benchmark rate was amended from LIBOR to SOFR. This facility contains an increase provision that would allow up to an additional $500 million of borrowing. This facility has a financial covenant requiring the Company not to exceed a 37.5% debt to capitalization ratio as defined in the agreement. 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 the Company’s senior unsecured, unguaranteed long-term debt. The total amount outstanding at any point in time under

the combination of the commercial paper program and the credit facility cannot exceed the amount that can be borrowed under the credit facility. No amounts were outstanding under the credit facility as of December 31, 2023 or 2022. The Company had no commercial paper outstanding as of December 31, 2023 or 2022.

The Company paid $355 million, $323 million and $321 million of interest on debt in 2023, 2022 and 2021, respectively.

The Company had $209 million and $371 million of investment-related debt that is reported in other liabilities and accrued expenses as of December 31, 2023 and 2022, respectively.

During 2021, the Company filed a universal shelf registration statement with the Securities and Exchange Commission (“SEC”) that expires in 2024. The registration statement covers an unspecified amount of securities and can be used to issue debt securities, common stock, preferred stock, depositary shares, warrants, stock purchase contracts, stock purchase units and securities of trust subsidiaries.

Common stock The Company had 900 million shares of issued common stock of which 262 million shares were outstanding and 638 million shares were held in treasury as of December 31, 2023. In 2023, the Company acquired 3 million shares at an average cost of $118.18 and reissued 2 million net shares under equity incentive plans.

Preferred stock All outstanding preferred stock represents noncumulative perpetual preferred stock with a $1.00 par value per share and a liquidation preference of $25,000 per share.

Redemption of preferred stock On April 17, 2023, the Company redeemed all 23,000 shares of Fixed Rate Noncumulative Preferred Stock, Series G, par value $1.00 per share and liquidation preference amount of $25,000 per share, and the corresponding depositary shares for a total redemption payment of $575 million. The Company recognized $18 million of original issuance costs in preferred stock dividends on the Consolidated Statements of Operations and Consolidated Statements of Shareholders’ Equity.

Issuance of preferred stock On May 18, 2023, the Company issued 24,000 shares of Fixed Rate Noncumulative Preferred Stock, Series J, par value $1.00 per share and liquidation preference amount of $25,000 per share, and the corresponding depositary shares for gross proceeds of $600 million.

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2023 Form 10-K Notes to Consolidated Financial Statements


Total preferred stock outstanding
	As of December 31,		Aggregate liquidation preference ($ in millions)						Dividend per depository share (1)						Aggregate dividend payment ($ in millions)
	2023	2022	2023		2022		Dividend rate		2023		2022		2021		2023			2022		2021





Series G (2)	—	23,000	$	—	$	575.0	5.625	%	$	0.70	$	1.41	$	1.41	$	16	(3)	$	32	$	32
Series H	46,000	46,000	1,150.0		1,150.0		5.100	%	1.28		1.28		1.28		59			59		59
Series I	12,000	12,000	300.0		300.0		4.750	%	1.19		1.19		1.19		14			14		14
Series J	24,000	—	600.0		—		7.375	%	0.75		—		—		18			—		—
National General Series (4)															—			—		9
Total	82,000	81,000	$	2,050	$	2,025									$	107		$	105	$	114

(1)Each depository share represents a 1/1,000th interest in a share of preferred stock.

(2)On April 17, 2023, the Company redeemed all outstanding shares of Preferred Stock Series G.

(3)Excludes $18 million related to original issuance costs in preferred stock dividends on the Consolidated Statements of Operations and Consolidated Statements of Shareholders’ Equity as a result of the preferred stock redemptions.

(4)On February 2, 2021 and July 15, 2021, the Company redeemed all outstanding shares of National General Series A, B and D, and National General Preferred Stock Series C, respectively.

The preferred stock ranks senior to the Company’s common stock with respect to the payment of dividends and liquidation rights. The Company will pay dividends on the preferred stock on a noncumulative basis only when, as and if declared by the Company’s board of directors (or a duly authorized committee of the board) and to the extent that the Company has legally available funds to pay dividends. If dividends are declared on the preferred stock, they will be payable quarterly in arrears at an annual fixed rate. Dividends on the preferred stock are not cumulative. Accordingly, in the event dividends are not declared on the preferred stock for payment on any dividend payment date, then those dividends will cease to be payable. If the Company has not declared a dividend before the dividend payment date for any dividend period, the Company has no obligation to pay dividends for that dividend period, whether or not dividends are declared for any future dividend period. No dividends may be paid or declared on the Company’s common stock and no shares of the Company’s common stock may be repurchased unless the full dividends for the latest completed dividend period on the preferred stock have been declared and paid or provided for.

The preferred stock does not have voting rights except with respect to certain changes in the terms of the preferred stock, in the case of certain dividend nonpayments, certain other fundamental corporate events, mergers or consolidations and as otherwise provided by law. If and when dividends have not been declared and paid in full for at least six quarterly dividend periods or their equivalent (whether or not consecutive), the authorized number of directors then constituting the Company’s board of directors will be increased by two. The holders of the preferred stock, together with the holders of all other affected classes and series of voting parity stock, voting as a single class, will be entitled to elect the two additional members of the board of directors of the Company, subject to certain conditions. The board of directors

shall at no time have more than two preferred stock directors.

The preferred stock is perpetual and has no maturity date. The preferred stock is redeemable at the Company’s option in whole or in part, on or after October 15, 2024 for Series H, January 15, 2025 for Series I and July 15, 2028 for Series J at a redemption price of $25,000 per share, plus declared and unpaid dividends. Prior to October 15, 2024 for Series H, January 15, 2025 for Series I and July 15, 2028 for Series J, the preferred stock is redeemable at the Company’s option, in whole but not in part, within 90 days after the occurrence of certain regulatory capital events at a redemption price equal to $25,000 per share or within 90 days after the occurrence of a certain rating agency event at a redemption price equal to $25,500 per share, plus declared and unpaid dividends for Series H, I and J, respectively.

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2023 Form 10-K Notes to Consolidated Financial Statements


Note 14			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 Consolidated Statements of Operations as restructuring and related charges and totaled $169 million, $51 million and $170 million in 2023, 2022 and 2021, respectively.

Restructuring expenses in 2023 primarily relate to implementing actions to streamline the organization and outsource operations, and real estate costs related to facilities being vacated. 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	$	95
2023 expenses	(91)
Remaining program charges	$	4

These charges are primarily recorded in the Allstate Protection segment. The actions related to the organizational transformation component of the Transformative Growth plan are substantially complete as of December 31, 2023.


Restructuring activity during the period
($ in millions)	Employee costs		Exit costs		Total liability
Restructuring liability as of December 31, 2022	$	27	$	7	$	34
Expense incurred	104		71		175
Adjustments to liability	—		(6)		(6)
Payments and non-cash charges	(91)		(71)		(162)
Restructuring liability as of December 31, 2023	$	40	$	1	$	41

As of December 31, 2023, the cumulative amount incurred to date for active programs related to employee severance, relocation benefits and exit expenses totaled $103 million for employee costs and $76 million for exit costs.


Note 15			Commitments, 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 three 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.

Florida Citizens Castle Key is subject to assessments from Citizens Property Insurance Corporation in the state of Florida (“FL Citizens”), which was initially created by the state of Florida to provide insurance to property owners unable to obtain coverage in the private insurance market. FL Citizens, at the discretion and direction of its Board of Governors, can levy a regular assessment on assessable insurers and assessable insureds for a deficit in any calendar year up to a maximum of the

greater of: 2% of the projected deficit or 2% of the aggregate statewide direct written premium for the prior calendar year. The base of assessable insurers includes all property and casualty premiums in the state, except workers’ compensation, medical malpractice, accident and health insurance and policies written under the NFIP. An insurer may recoup a regular assessment through a surcharge to policyholders. In order to recoup this assessment, an insurer must file for a policy surcharge with the Florida Office of Insurance Regulation at least fifteen days prior to imposing the surcharge on policies. If a deficit remains after the regular assessment, FL Citizens can also levy emergency assessments in the current and subsequent years. Companies are required to collect the emergency assessments directly from residential property policyholders and remit to FL Citizens as collected. Currently, the emergency assessment is zero for all policies issued or renewed on or after July 1, 2015.

Louisiana Citizens Louisiana Citizens Property Insurance Corporation (“LA Citizens”) can levy a regular assessment on participating companies for a deficit in any calendar year up to a maximum of the greater of 10% of the calendar year deficit or 10% of Louisiana direct property premiums industry-wide for the prior calendar year. If the plan year deficit exceeds the

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amount that can be recovered through regular assessments, LA Citizens may fund the remaining deficit by issuing revenue assessment bonds in the capital markets. LA Citizens then declares emergency assessments each year to provide debt service on the bonds until they are retired. Companies writing assessable lines must surcharge their policyholders emergency assessments in the percentage established annually by LA Citizens and must remit amounts collected to the bond trustee on a quarterly basis. Emergency assessments to pay off bonds issued in 2007 for the hurricanes of 2005 will continue until 2025.

Facilities such as FL Citizens and LA Citizens are generally designed so that the ultimate cost is borne by policyholders; however, the exposure to assessments from these facilities and the availability of recoupments or premium rate increases may not offset each other in the Company’s financial statements. Moreover, even if they do offset each other, they may not offset each other in financial statements for the same fiscal period due to the ultimate timing of the assessments and recoupments or premium rate increases, as well as the possibility of policies not being renewed in subsequent years.

California Earthquake Authority Exposure to certain potential losses from earthquakes in California is limited by the Company’s participation in the California Earthquake Authority (“CEA”), which provides insurance for California earthquake losses. The CEA is a privately-financed, publicly-managed state agency created to provide insurance coverage for earthquake damage. Insurers selling homeowners insurance in California are required to offer earthquake insurance to their customers either through their company or by participation in the CEA. The Company’s homeowners policies continue to include coverages for losses caused by explosions, theft, glass breakage and fires following an earthquake, which are not underwritten by the CEA.

As of October 31, 2023, the CEA’s capital balance was approximately $6.00 billion. Should losses arising from an earthquake cause a deficit in the CEA, an additional $2.10 billion would be obtained from the proceeds of revenue bonds the CEA may issue, an existing $9.30 billion reinsurance layer, $1.00 billion from policy surcharge, and finally, if needed, assessments on participating insurance companies. Participating insurers are required to pay an assessment, currently estimated not to exceed $1.70 billion, if the capital of the CEA falls below $350 million. Within the limits previously described, the assessment could be intended to restore the CEA’s capital to a level of $350 million. There is no provision that allows insurers to recover assessments through a premium surcharge or other mechanism. The CEA’s projected aggregate claim paying capacity is $20.10 billion as of October 31, 2023 and if an event were to result in claims greater than its capacity, affected policyholders may be paid a prorated portion of their covered losses, paid on an installment basis, or no payments may be made if the claim paying capacity of the CEA is insufficient.

All future assessments on participating CEA insurers are based on their CEA insurance market share as of December 31 of the preceding year. As of December 31, 2023, the Company’s market share was 8.5%. The Company’s market share will increase 0.3% with the addition of National General as a participating CEA insurer in 2023. At the current level, the Company’s maximum possible CEA assessment was $141 million during 2023. These amounts are re-evaluated by the board of directors of the CEA on an annual basis. Accordingly, assessments from the CEA for a particular quarter or annual period may be material to the results of operations and cash flows, but not the financial position of the Company. Management believes the Company’s exposure to earthquake losses in California has been significantly reduced as a result of its participation in the CEA.

Texas Windstorm Insurance Association The Company participates as a member of the Texas Windstorm Insurance Association (“TWIA”), which provides wind and hail property coverage to coastal risks unable to procure coverage in the voluntary market. Wind and hail coverage is written on a TWIA-issued policy. TWIA follows a funding structure first utilizing currently available funds set aside from current and prior years. Under the current law, to the extent losses exceed premiums received from policyholders, TWIA utilizes a combination of reinsurance, TWIA issued securities, as well as member and policyholder assessments to fund loss payments.

Any assessments from TWIA for a particular quarter or annual period may be material to the results of operations and cash flows, but not to the financial position of the Company.

North Carolina Joint Underwriters Association The North Carolina Joint Underwriters Association (“NCJUA”) was created to provide property insurance for properties, other than the state’s beach and coastal areas, that insurers are not otherwise willing to insure. All insurers licensed to write property insurance in North Carolina are members of the NCJUA. Premiums, losses and expenses of the NCJUA are shared by the member companies in proportion to their respective North Carolina property insurance writings. Member companies participate in plan deficits or surpluses based on their participation ratios, which are determined annually. The Company had a $7 million receivable from the NCJUA at December 31, 2023 representing its participation in the NCJUA’s surplus of $10 million for all open years.

North Carolina Insurance Underwriting Association The North Carolina Insurance Underwriting Association (“NCIUA”) provides property insurance, including windstorm and hail coverage, for properties located in the state’s beach and coastal areas that insurers are not otherwise willing to insure. All insurers licensed to write residential and commercial property insurance in North Carolina are members of the NCIUA. Members are assessed in proportion to their North Carolina residential and commercial property insurance writings, which is determined annually and varies by coverage, for plan deficits. As of December 31, 2023,

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the NCIUA had a surplus of $1.03 billion. No member company is entitled to the distribution of any portion of the NCIUA’s surplus. The Company does not recognize any interest related to this surplus. Legislation in 2009 capped insurers’ assessments for losses incurred in any calendar year at $1.00 billion. Subsequent to an industry assessment of $1.00 billion, if the plan continues to require funding, it may authorize insurers to assess a 10% catastrophe recovery charge on each property insurance policy statewide to be remitted to the plan.

Other programs The Company is also subject to assessments by the NCRF and the FHCF, which are described in Note 11.

Guaranty funds

Under state insurance guaranty fund laws, insurers doing business in a state can be assessed, up to prescribed limits, for certain obligations of insolvent insurance companies to policyholders and claimants. Amounts assessed to each company are typically related to its proportion of business written in each state. The Company’s policy is to accrue assessments when the entity for which the insolvency relates has met its state of domicile’s statutory definition of insolvency, the amount of the loss is reasonably estimable and the related premium upon which the assessment is based is written. In most states, the definition is met with a declaration of financial insolvency by a court of competent jurisdiction. In certain states there must also be a final order of liquidation. Since most states allow a credit against premium or other state related taxes for assessments, an asset is recorded based on paid and accrued assessments for the amount the Company expects to recover on the respective state’s tax return and is realized over the period allowed by each state. As of December 31, 2023 and 2022, the liability balance included in other liabilities and accrued expenses was $23 million and $29 million, respectively. The related premium tax offsets included in other assets were $5 million and $6 million as of December 31, 2023 and 2022, respectively.

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 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 December 31, 2023.

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 Securities and Exchange Commission (“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

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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 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

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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 $56 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 managing 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. There is a pending lawsuit, Revival Chiropractic v. Allstate Insurance Company, et al. (M.D. Fla. filed January 2019; appeal pending, Eleventh Circuit Court of Appeals),

where 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 is holding 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. The Company is also defending litigation involving individual plaintiffs.

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); Tabuga v. Allstate Vehicle and Property Insurance Company (D. Md. filed April 2023); and Hernandez v. Allstate Vehicle and Property Insurance Company (D. Ariz. filed April 2023) (the Shumway plaintiff was substituted with Hernandez). 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); and Katz v. Esurance Property and Casualty Insurance Company and National General Insurance Company (E.D.N.Y. filed February 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

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Cummings v. Allstate Property and Casualty Insurance Company (M.D. La. filed April 2022).

The Company is defending putative class actions in Arizona federal court that are alleging underpayment of uninsured/underinsured motorist claims. The lawsuits are Dorazio v. Allstate Fire and Casualty Insurance Company (D. Ariz. filed December 2022) and Loughran v. MIC General Insurance Corporation (D. Ariz. 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.

The Company is currently defending its insureds against plaintiffs’ bodily injury lawsuit stemming from a 2018 automobile accident, Equihua v. Chausse and Nash (Superior Court of Los Angeles Co., Cal. filed Jan. 2019). On August 18, 2021, a jury returned a verdict against the insureds. The Company then moved to intervene in the lawsuit on September 9, 2021 and together with the insureds, sought to vacate the judgment and to obtain a new trial. On November 2, 2021, the trial court denied the post-trial motions to vacate the judgment and for a new trial and the Company’s motion to intervene. The Company and the insureds subsequently filed an appeal with the California Court of Appeal, Second District, which affirmed judgment in favor of plaintiffs on November 6, 2023. On December 18, 2023, the insureds filed a petition for review with the California Supreme Court. On February 14, 2024, the California Supreme Court entered an order denying the petition for review.

Other proceedings The Company has pending 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. Fact discovery was completed in the investigatory hearing. Allstate and the California Department of Insurance have reached an agreement in principle to resolve the investigatory hearing. The May 22, 2023 hearing was continued. A new hearing date has not been set.

In re The Allstate Corp. Securities Litigation is a certified class action filed on November 11, 2016, in the United States District Court for the Northern District of Illinois against the Company and two of its officers asserting claims under the federal securities laws. Plaintiffs allege that they purchased Allstate common stock during the class period and suffered damages as the result of the conduct alleged. Plaintiffs seek an unspecified amount of damages, costs, attorney’s fees, and other relief as the court deems appropriate. Plaintiffs allege that the Company and certain senior officers made allegedly material misstatements or omissions concerning claim frequency statistics and the reasons for a claim frequency increase for Allstate brand auto insurance between October 2014 and August 3, 2015.

Plaintiffs further allege that a senior officer engaged in stock option exercises during that time allegedly while in possession of material nonpublic information about Allstate brand auto insurance claim frequency. The Company, its chairman, president and chief executive officer, and its former president are the named defendants. After the court denied their motion to dismiss on February 27, 2018, defendants answered the complaint, denying plaintiffs’ allegations that there was any misstatement or omission or other misconduct. On June 22, 2018, plaintiffs filed their motion for class certification. The court allowed the lead plaintiffs to amend their complaint to add the City of Providence Employee Retirement System as a proposed class representative and on September 12, 2018, the amended complaint was filed. A class was certified on March 26, 2019, vacated by the U.S. Court of Appeals for the Seventh Circuit on July 16, 2020 and remanded for further consideration by the district court. On December 21, 2020, the district court again granted plaintiffs’ motion for class certification and certified a class consisting of all persons who purchased Allstate common stock between October 29, 2014 and August 3, 2015. Defendants’ petition for permission to appeal this ruling was denied on January 28, 2021. Following the close of discovery, defendants moved for summary judgment on March 23, 2022. On July 26, 2022, the court entered its order granting summary judgment in part (as to plaintiffs’ claims relating to certain statements made in October 2014) and denying it as to the remainder of plaintiffs’ claims. On January 10, 2023, the parties filed a joint pre-trial order. A pre-trial conference did not occur. Subsequently, on June 28, 2023, the parties reached an agreement in principle to settle the action, without any admission of liability or wrongdoing. On September 26, 2023, an order was entered by the district court granting preliminary approval of the class settlement. On December 19, 2023, the district court granted final approval of the class settlement. No appeal was filed.

The Company is continuing to defend two putative class actions in California federal court, Holland Hewitt v. Allstate Life Insurance Company (E.D. Cal. filed May 2020) and Farley v. Lincoln Benefit Life Company (E.D. Cal. filed Dec. 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. There has been no ruling on

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plaintiff’s motion for class certification in Hewitt. 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.


Note 16			Income Taxes

The Company and its eligible domestic subsidiaries file a U.S. consolidated federal income tax return. The Company also files tax returns in various states and foreign jurisdictions. Tax liabilities and benefits realized by the consolidated group are allocated as generated by the respective entities.

Deferred income taxes result from temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements that will result in taxable or deductible amounts in future years. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in years in which those temporary differences are expected to be recovered or settled. Deferred tax assets and liabilities are adjusted through income tax expense as changes in tax laws or rates are enacted.

Inflation Reduction Act of 2022 The Inflation Reduction Act of 2022 (“Act”), which contains several tax-related provisions, was signed into law on August 16, 2022. The Act created a 15% corporate alternative minimum tax (“CAMT”) on certain large corporations and an excise tax of 1% on stock repurchases by publicly traded U.S. corporations, both effective after December 31, 2022. The excise tax on common stock repurchases is classified as an additional cost of the stock acquired included in treasury stock in shareholders' equity.

In addition, under the CAMT rules, the Company has determined that it is considered an “Applicable Corporation” which requires computation of federal income tax liability under two tax systems, the U.S. regular corporate tax and the CAMT. Although the CAMT may apply in any given year where the CAMT liability exceeds the regular tax liability, the CAMT would generate a non-expiring tax credit carryforward which would be accounted for as a deferred tax asset. The CAMT credit can be used to reduce regular tax in future years when the regular tax liability is greater than the CAMT liability.

The impact of a change in tax law is required to be recognized in the period of enactment. As such in assessing the realizability of our deferred tax assets, including determination of valuation allowance, the Company has made an accounting policy election to evaluate the realizability of deferred tax assets excluding the impact of the CAMT.

15% Global Minimum Tax The Organization for Economic Cooperation and Development (“OECD”) secured agreement from nearly 140 countries to address how corporate profits are taxed for multinational enterprises (“MNEs”). OECD has released Pillar Two Model Rules, a 15% minimum effective tax rate (also known as the Global Anti-Base Erosion “GloBE” Rules), designed to ensure that large MNEs pay a minimum level of tax on the income arising in each jurisdiction where they operate and mandates sharing of certain company information with taxing authorities on a local and global basis.

Certain jurisdictions have enacted, and others have proposed, legislation to implement certain provisions of Pillar Two for fiscal years beginning on or after December 31, 2023. The Company is continuing to monitor the implications resulting from the potential enactment of Pillar Two rules in the jurisdictions where it operates.

Regulatory tax examinations On January 4, 2021 and October 1, 2021, the Company acquired National General and SafeAuto, respectively. For tax years prior to the acquisition, National General is under a separate audit by the Internal Revenue Service (“IRS”). The IRS has completed its exam of Allstate’s tax years prior to 2017 and National General tax years prior to 2015. Currently, the Company is under exam for the 2017 and 2018 tax years and National General is under exam for the 2015 through 2019 tax years. The Company believes that adequate provision has been made in the consolidated financial statements for any potential adjustments that may result from IRS examinations or any other tax authorities related to all open tax years.

Unrecognized tax benefits The Company recognizes tax positions in the consolidated financial statements only when it is more likely than not that the position will be sustained on examination by the relevant taxing authority based on the technical merits of the position. A position that meets this standard is measured at the largest amount of benefit that will more likely than not be realized on settlement. A liability is established for differences between positions taken in a tax return and amounts recognized in the consolidated financial statements.

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Reconciliation of the change in the amount of unrecognized tax benefits
	For the years ended December 31,
($ in millions)	2023		2022		2021
Balance – beginning of year	$	17	$	17	$	12
Acquisitions	—		—		5
Increase for tax positions taken in a prior year	23		—		—

Increase for tax positions taken in the current year	5		—		—



Balance – end of year	$	45	$	17	$	17

The Company believes that it is reasonably possible that a portion of the unrecognized tax benefits could decrease within the next twelve months as a result of the lapse of the applicable statute of limitations, which is not expected to be material to the financial statements.

The Company recognizes interest expense related to uncertain tax benefits in income tax (benefit)

expense and penalties in operating costs and expenses. For the years ended December 31, 2023, 2022, and 2021, interest expense related to unrecognized tax benefits of $7 million, $3 million, and zero was recorded, respectively. The total accrued interest expense and penalties as of December 31, 2023 and 2022 were $24 million and $17 million, respectively.


Components of the deferred income tax assets and liabilities
	As of December 31,
($ in millions)	2023		2022
Deferred tax assets
Unearned premium reserves	$	897	$	815
Discount on loss reserves	269		228
Net operating loss carryover	258		97
Research & development capitalization	228		219
Unrealized net capital losses	174		609
Accrued compensation	121		128

General business credits carryover	110		—
Pension	26		10
Other postretirement benefits	13		15
Other	110		95
Total deferred tax assets before valuation allowance	2,206		2,216
Valuation allowance	(69)		(34)
Total deferred tax assets after valuation allowance	2,137		2,182
Deferred tax liabilities
DAC	(1,075)		(1,018)
Investments	(455)		(431)
Intangible assets	(99)		(147)



Other	(289)		(204)
Total deferred tax liabilities	(1,918)		(1,800)
Net deferred tax assets	$	219	$	382

As of December 31, 2023, the Company has U.S. federal, state and foreign net operating loss (“NOL”) and general business credit carryforwards. In assessing the realizability of gross deferred tax assets, management considers whether it is more likely than not that some portion or all of the gross deferred tax assets will not be realized. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in

making this assessment, as well as limitations on use in future periods. Accordingly, management believes that it is more likely than not that the benefit from certain NOL carryforwards will not be fully realized. The Company has a valuation allowance of $69 million on the deferred tax assets related to these NOL carryforwards.

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The following table sets forth the amounts and expiration dates of federal, foreign, state net operating loss carryforwards and tax credit carryforwards.


Components of the net operating loss carryforwards as of December 31, 2023
($ in millions)	20-Year Carryforward Expires in 2025-2043		Indefinite		20-Year Carryforward Expires in 2043		Various
U.S. Federal NOL	$	255	$	12	$	—	$	—
Foreign NOL	—		398		—		—
State NOL (1)	—		—		—		134
U.S. Federal general business credits	—		—		110		—

(1)Multiple state net operating loss carryforwards expiring in various periods, beginning in 2029.


Components of income tax expense
	For the years ended December 31,
($ in millions)	2023		2022		2021
Current	$	114	$	(35)	$	841
Deferred	(249)		(453)		451
Total income tax (benefit) expense	$	(135)	$	(488)	$	1,292

The Company received an income tax refund of $45 million in 2023, and paid income taxes of $95 million and $1.05 billion in 2022 and 2021, respectively.

The Company had current income tax receivable of $663 million and $677 million as of December 31, 2023 and 2022, respectively.


Reconciliation of the statutory federal income tax rate to the effective income tax rate
	For the years ended December 31,
($ in millions)	2023				2022				2021
(Loss) income before income taxes	$	(348)			$	(1,830)			$	6,466

Statutory federal income tax rate on income from operations	(73)		21.0	%	(384)		21.0	%	1,357		21.0	%
Tax credits	(47)		13.5		(55)		3.0		(42)		(0.6)
Tax-exempt income	(23)		6.6		(17)		0.9		(18)		(0.3)
U.S. shareholder’s tax (benefit) expense	(17)		4.9		13		(0.7)		4		0.1
Share-based payments	(14)		4.0		(22)		1.2		(18)		(0.3)
State income taxes	(7)		2.0		—		—		13		0.2
Dividend received deduction	(4)		1.1		(7)		0.4		(5)		(0.1)
Uncertain tax positions	33		(9.5)		2		(0.1)		—		—
Change in valuation allowance	6		(1.7)		10		(0.6)		(3)		(0.1)
Other	11		(3.1)		(28)		1.6		4		0.1
Effective income tax rate on income from operations	$	(135)	38.8	%	$	(488)	26.7	%	$	1,292	20.0	%


Note 17			Statutory Financial Information and Dividend Limitations

Allstate’s domestic property and casualty and life, accident and health insurance subsidiaries prepare their statutory-basis financial statements in conformity with accounting practices prescribed or permitted by the insurance department of the applicable state of domicile. Prescribed statutory accounting practices include a variety of publications of the NAIC, as well as state laws, regulations and general administrative rules. Permitted statutory accounting practices encompass all accounting practices not so prescribed.

All states require domiciled insurance companies to prepare statutory-basis financial statements in conformity with the NAIC Accounting Practices and Procedures Manual, subject to any deviations prescribed or permitted by the applicable insurance commissioner or director. Statutory accounting practices differ from GAAP primarily since they require charging policy acquisition costs to expense as incurred, establishing life insurance reserves based on different actuarial assumptions, and valuing certain investments and establishing deferred taxes on a different basis.

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2023 Form 10-K Notes to Consolidated Financial Statements


Statutory net income (loss) and capital and surplus of Allstate’s domestic insurance subsidiaries
	Net income (loss)						Capital and surplus
($ in millions)	2023		2022		2021		2023		2022
Amounts by major business type:
Property and casualty insurance	$	(487)	$	(1,653)	$	5,975	$	14,250	$	14,997
Life, accident and health insurance	61		70		96		310		279
Life and annuity business sold	—		—		1,642		—		—
Amount per statutory accounting practices	$	(426)	$	(1,583)	$	7,713	$	14,560	$	15,276

Dividend Limitations

There are no regulatory restrictions that limit the payment of dividends by the Corporation, except those generally applicable to corporations incorporated in Delaware. Dividends are payable only out of certain components of shareholders’ equity as permitted by Delaware law. However, the ability of the Corporation to pay dividends is dependent on business conditions, income, cash requirements of the Company, receipt of dividends from AIC and other relevant factors.

The payment of shareholder dividends by AIC without the prior approval of the Illinois Department of Insurance (“IL DOI”) is limited to formula amounts based on net income and capital and surplus, determined in conformity with statutory accounting practices, as well as the timing and amount of dividends paid in the preceding twelve months. There were no dividends paid by AIC in 2023. The maximum amount of dividends AIC will be able to pay without prior IL DOI approval at a given point in time during 2024 is $1.20 billion, less dividends paid during the preceding twelve months measured at that point in time. The payment of a dividend in excess of this amount requires 30 days advance written notice to the IL DOI. The dividend is deemed approved, unless the IL DOI disapproves it within the 30-day notice period. Additionally, any dividend must be paid out of unassigned surplus excluding unrealized appreciation from investments, which for AIC totaled $7.15 billion as of December 31, 2023, and cannot result in capital and surplus being less than the minimum amount required by law.

Under state insurance laws, insurance companies are required to maintain paid up capital of not less

than the minimum capital requirement applicable to the types of insurance they are authorized to write. Insurance companies are also subject to risk-based capital (“RBC”) requirements adopted by state insurance regulators. A company’s “authorized control level RBC” is calculated using various factors applied to certain financial balances and activity. Companies that do not maintain adjusted statutory capital and surplus at a level in excess of the company action level RBC, which is two times authorized control level RBC, are required to notify and file a RBC remediation plan to the domiciliary regulator and provide a copy of the remediation plan to state insurance regulators in which the insurer is authorized to do business. Company action level RBC is significantly in excess of the minimum capital requirements. Total adjusted statutory capital and surplus and authorized control level RBC of AIC were $11.99 billion and $3.07 billion, respectively, as of December 31, 2023. Most of the Corporation’s insurance subsidiaries are subsidiaries of or reinsure all of their business to AIC. AIC’s subsidiaries are included as a component of AIC’s total statutory capital and surplus.

The amount of restricted net assets, as represented by the Corporation’s investment in its insurance subsidiaries, was $21.18 billion as of December 31, 2023.

Intercompany transactions

Notification and approval of intercompany lending activities is also required by the IL DOI for transactions that exceed a level that is based on a formula using statutory admitted assets and statutory surplus.


Note 18			Benefit Plans

Pension and other postretirement plans

Defined benefit pension plans cover most U.S. employees. Benefits under the U.S. pension plans are based upon the employee’s length of service, eligible annual compensation and, prior to January 1, 2014, either a cash balance or final average pay formula. A cash balance formula applies to all eligible employees hired after August 1, 2002. Eligible employees hired before August 1, 2002 chose between the cash balance formula and the final average pay formula. In July 2013, the Company amended its primary plans effective January 1, 2014 to introduce a new cash balance formula to replace the previous formulas (including the final average pay formula and the previous cash balance formula) under which eligible employees accrue benefits.

The Company also provides a medical coverage subsidy for eligible employees hired before January 1, 2003, including their eligible dependents, when they retire and certain life insurance benefits for eligible retirees (“postretirement benefits”). Effective January 1, 2021, the Company eliminated the medical coverage subsidy for employees who were not eligible to retire as of December 31, 2020.

Certain employees may become eligible for a medical subsidy if they retire in accordance with the terms of the applicable plans and are insured under the Company’s group plans or other approved plans in accordance with the plan’s participation requirements. The Company shares the cost of retiree medical benefits with non Medicare-eligible retirees based on years of service, with the Company’s share being

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subject to a 5% limit on future annual medical cost inflation after retirement. For Medicare-eligible retirees, the Company provides a fixed Company contribution based on years of service and other factors, which is not subject to adjustments for inflation.

In July 2013, the Company amended the plan to eliminate the life insurance benefits effective January 1, 2014 for current eligible employees and effective January 1, 2016 for eligible retirees who retired after 1989. Subject to a court order, the Company paid life insurance premiums for certain retiree plaintiffs until their lawsuit seeking to keep their life insurance benefits intact was resolved. In September 2020, the court entered summary judgment in favor of the Company and dismissed the action, releasing the Company from the order requiring the continued payment of premiums for certain retirees. In December 2021, the Court of Appeals affirmed summary judgment in favor of the Company. In October 2022, the U.S. Supreme Court denied the plaintiffs' petition for appeal. On December 13, 2022, the trial court denied the plaintiffs' motions to vacate the summary judgment decision and seek further discovery. On December 15, 2023, the 11th Circuit Court of Appeals affirmed the trial court’s denial of plaintiffs’ motion to vacate. This decision is subject to any appeals.

The Company has reserved the right to modify or terminate its benefit plans at any time and for any reason.

Obligations and funded status

The Company calculates benefit obligations based upon generally accepted actuarial methodologies using the projected benefit obligation (“PBO”) for pension plans and the accumulated postretirement benefit obligation (“APBO”) for other postretirement plans. Pension costs and other postretirement obligations are determined using a December 31 measurement date. The benefit obligations represent the actuarial present value of all benefits attributed to employee service rendered as of the measurement date. The PBO is measured using the pension benefit formulas and assumptions. A plan’s funded status is calculated as the difference between the benefit obligation and the fair value of plan assets. The Company’s funding policy for the pension plans is to make contributions at a level in accordance with regulations under the Internal Revenue Code (“IRC”) and generally accepted actuarial principles. The Company’s other postretirement benefit plans are not funded.


Change in projected benefit obligation, plan assets and funded status
	As of December 31,
	Pension benefits				Postretirement benefits
($ in millions)	2023		2022		2023		2022
Change in projected benefit obligation
Benefit obligation, beginning of year	$	4,511	$	6,500	$	203	$	284
Service cost	132		101		1		1
Interest cost	239		219		10		10
Participant contributions	—		—		16		16
Remeasurement of projected benefit obligation (gains) losses	125		(1,382)		(4)		(62)
Benefits paid	(379)		(894)		(42)		(42)

Translation adjustment and other	(44)		(33)		1		(4)

Benefit obligation, end of year	$	4,584	$	4,511	$	185	$	203

Change in plan assets
Fair value of plan assets, beginning of year	$	4,430	$	6,525
Actual return on plan assets	418		(1,189)
Employer contribution	14		24
Benefits paid	(379)		(894)
Translation adjustment and other	(43)		(36)
Fair value of plan assets, end of year	$	4,440	$	4,430

Funded status (1)	$	(144)	$	(81)	$	(185)	$	(203)

Amounts recognized in AOCI
Unamortized pension and other postretirement prior service credit	$	—	$	—	$	(18)	$	(39)

(1)The funded status is recorded within other assets or other liabilities and accrued expenses on the Consolidated Statements of Financial Position.

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2023 Form 10-K Notes to Consolidated Financial Statements


Changes in items not yet recognized as a component of net cost for pension and other postretirement plans
($ in millions)	Pension benefits		Postretirement benefits
Items not yet recognized as a component of net cost – December 31, 2022	$	—	$	(39)




Prior service credit amortized to net cost	—		21
Translation adjustment and other	—		—
Items not yet recognized as a component of net cost – December 31, 2023	$	—	$	(18)

The prior service credit is recognized as a component of net cost for pension and other postretirement plans amortized over the average remaining service period of active employees expected to receive benefits.

The accumulated benefit obligation (“ABO”) for all defined benefit pension plans was $4.48 billion and $4.42 billion as of December 31, 2023 and 2022, respectively. The ABO is the actuarial present value of all benefits attributed by the pension benefit formula

to employee service rendered at the measurement date. However, it differs from the PBO due to the

exclusion of an assumption as to future compensation levels.

The PBO, ABO and fair value of plan assets for the Company’s pension plans with an ABO in excess of plan assets were $4.27 billion, $4.18 billion and $4.09 billion, respectively, as of December 31, 2023 and $84 million, $83 million and zero, respectively, as of December 31, 2022. Included in the accrued benefit cost of the pension benefits are certain unfunded non-qualified plans with accrued benefit costs of $78 million and $84 million for 2023 and 2022, respectively.


Components of net cost (benefit) for pension and other postretirement plans
	For the years ended December 31,
	Pension benefits						Postretirement benefits						Total pension and postretirement benefits
($ in millions)	2023		2022		2021		2023		2022		2021		2023		2022		2021
Service cost	$	132	$	101	$	103	$	1	$	1	$	1	$	133	$	102	$	104
Interest cost	239		219		191		10		10		8		249		229		199
Expected return on plan assets	(306)		(371)		(445)		—		—		—		(306)		(371)		(445)
Amortization of prior service credit	—		(27)		(50)		(21)		(25)		(25)		(21)		(52)		(75)

Costs and expenses	65		(78)		(201)		(10)		(14)		(16)		55		(92)		(217)
Remeasurement of projected benefit obligation	125		(1,382)		(309)		(4)		(62)		(16)		121		(1,444)		(325)
Remeasurement of plan assets	(112)		1,560		(319)		—		—		—		(112)		1,560		(319)
Remeasurement (gains) losses	13		178		(628)		(4)		(62)		(16)		9		116		(644)
Total net (benefit) cost	$	78	$	100	$	(829)	$	(14)	$	(76)	$	(32)	$	64	$	24	$	(861)

The service cost component is the actuarial present value of the benefits attributed by the plans’ benefit formula to services rendered by the employees during the period.

Interest cost is the increase in the PBO in the period due to the passage of time at the discount rate.

Interest cost fluctuates as the discount rate changes and is also impacted by the related change in the size of the PBO.

The expected return on plan assets is determined as the product of the expected long-term rate of return on plan assets and the fair value of plan assets.

Pension and other postretirement service cost, interest cost, expected return on plan assets, amortization of prior service credit and curtailment gains and losses 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 Consolidated Statements of Operations.

Remeasurement gains and losses relate to changes in discount rates, the differences between actual return on plan assets and the expected long-term rate of return on plan assets, and differences between actual plan experience and actuarial assumptions.


Weighted average assumptions used to determine net pension cost and net postretirement benefit cost
	For the years ended December 31,
	Pension benefits						Postretirement benefits
	2023		2022		2021		2023		2022		2021
Discount rate	5.65	%	4.27	%	2.84	%	5.66	%	4.24	%	2.75	%
Expected long-term rate of return on plan assets	7.35		7.06		7.06		n/a		n/a		n/a
Cash balance interest credit rate	4.05		2.74		2.04		n/a		n/a		n/a

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Weighted average assumptions used to determine benefit obligations
	As of December 31,
	Pension benefits				Postretirement benefits
	2023		2022		2023		2022
Discount rate	5.35	%	5.64	%	5.28	%	5.58	%
Cash balance interest credit rate	4.03		3.97		n/a		n/a

The weighted average health care cost trend rate used in measuring the accumulated postretirement benefit cost is 6.8% for 2024, gradually declining to 4.5% in 2035 and remaining at that level thereafter.

Pension plan assets In general, the Company’s pension plan assets are managed in accordance with investment policies approved by pension investment committees. The purpose of the policies is to ensure the plans’ long-term ability to meet benefit obligations by prudently investing plan assets and Company contributions, while taking into consideration regulatory and legal requirements and current market conditions. The investment policies are reviewed periodically and specify target plan asset allocation by asset category. In addition, the policies specify various asset allocation and other risk limits. The target asset allocation takes the plans’ funding status into

consideration, among other factors, including anticipated demographic changes or liquidity requirements that may affect the funding status such as the potential impact of lump sum settlements as well as existing or expected market conditions. In general, the allocation has a lower overall investment risk when a plan is in a stronger funded status position since there is less economic incentive to take risk to increase the expected returns on the plan assets. The pension plans’ asset exposure within each asset category is tracked against widely accepted established benchmarks for each asset class with limits on variation from the benchmark established in the investment policy. Pension plan assets are regularly monitored for compliance with these limits and other risk limits specified in the investment policies.


Weighted average target asset allocation and actual percentage of plan assets by asset category
	As of December 31, 2023
	Target asset allocation (1)	Actual percentage of plan assets
Pension plan’s asset category	2023	2023		2022
Equity securities	17 - 36%	26	%	27	%
Fixed income securities	38 - 54	48		49
Limited partnership interests	1 - 29	23		21
Short-term investments and other	NA	3		3
Total without securities lending (2)		100	%	100	%

(1)The target asset allocation considers risk-based exposure while the actual percentage of plan assets utilizes a financial reporting view excluding exposure provided through derivatives.

(2)Securities lending collateral reinvestment of $180 million and $297 million is excluded from the table above in 2023 and 2022, respectively.

The target asset allocation for an asset category may be achieved either through direct investment holdings, through replication using derivative instruments (e.g., futures or swaps) or net of hedges using derivative instruments to reduce exposure to an asset category. The net notional amount of derivatives used for replication and non-hedging strategies is limited to 115% of total plan assets. Market performance of the different asset categories may, from time to time, cause deviation from the target

asset allocation. The asset allocation mix is reviewed on a periodic basis and rebalanced to bring the allocation within the target ranges.

Outside the target asset allocation, the pension plans participate in a securities lending program to enhance returns. As of both December 31, 2023 and 2022, fixed income securities are lent out and cash collateral is invested in short-term investments.

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2023 Form 10-K Notes to Consolidated Financial Statements


Fair values of pension plan assets as of 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)			Balance as of December 31, 2023
Equity securities	$	132		$	28		$	—		$	160
Fixed income securities:
Government bonds (1)	323			1,007			—			1,330
Corporate bonds (2)	—			794			—			794
Short-term investments	154			144			—			298
Free-standing derivatives:
Assets	—			—			—			—
Liabilities	(1)			(8)			—			(9)
Other assets	1			—			—			1
Total plan assets at fair value	$	609		$	1,965		$	—		2,574
% of total plan assets at fair value	23.7		%	76.3		%	—		%	100.0		%

Investments measured using the net asset value practical expedient										2,019
Securities lending obligation (3)										(179)
Derivatives counterparty and cash collateral netting										8
Other net plan assets (4)										18
Total reported plan assets										$	4,440


Fair values of pension plan assets as of December 31, 2022
($ in millions)	Quoted prices in active markets for identical assets (Level 1)			Significant other observable inputs (Level 2)			Significant unobservable inputs (Level 3)			Balance as of December 31, 2022
Equity securities	$	120		$	25		$	—		$	145
Fixed income securities:
Government bonds (1)	496			896			—			1,392
Corporate bonds (2)	—			757			—			757
Short-term investments	163			279			—			442
Free-standing derivatives:
Assets	—			1			—			1
Liabilities	(1)			(5)			—			(6)
Other assets	1			—			—			1
Total plan assets at fair value	$	779		$	1,953		$	—		$	2,732
% of total plan assets at fair value	28.5		%	71.5		%	—		%	100.0		%

Investments measured using the net asset value practical expedient										$	1,975
Securities lending obligation (3)										(296)
Derivatives counterparty and cash collateral netting										2
Other net plan assets (4)										17
Total reported plan assets										$	4,430

(1)Includes U.S. government and agencies and foreign government bonds.

(2)Includes ABS securities.

(3)The securities lending obligation represents the plan’s obligation to return securities lending collateral received under a securities lending program. The terms of the program allow both the plan and the counterparty the right and ability to redeem/return the securities loaned on short notice. Due to its relatively short-term nature, the outstanding balance of the obligation approximates fair value.

(4)Other net plan assets represent cash and cash equivalents, interest and dividends receivable and net receivables related to settlements of investment transactions, such as purchases and sales.

The fair values of pension plan assets are estimated using the same methodologies and inputs as those used to determine the fair values for the respective asset category of the Company. These methodologies and inputs are disclosed in Note 6.

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Rollforward of Level 3 plan assets during December 31, 2023
			Actual return on plan assets:
($ in millions)	Balance as of December 31, 2022		Relating to assets sold during the period		Relating to assets still held at the reporting date		Purchases, sales and settlements, net		Net transfers in (out) of Level 3		Balance as of December 31, 2023
Equity securities	$	—	$	—	$	—	$	—	$	—	$	—


Total Level 3 plan assets	$	—	$	—	$	—	$	—	$	—	$	—


Rollforward of Level 3 plan assets during December 31, 2022
			Actual return on plan assets:
($ in millions)	Balance as of December 31, 2021		Relating to assets sold during the period		Relating to assets still held at the reporting date		Purchases, sales and settlements, net		Net transfers in (out) of Level 3		Balance as of December 31, 2022
Equity securities	$	2	$	—	$	—	$	—	$	(2)	$	—


Total Level 3 plan assets	$	2	$	—	$	—	$	—	$	(2)	$	—


Rollforward of Level 3 plan assets during December 31, 2021
			Actual return on plan assets:
($ in millions)	Balance as of December 31, 2020		Relating to assets sold during the period		Relating to assets still held at the reporting date		Purchases, sales and settlements, net		Net transfers in (out) of Level 3		Balance as of December 31, 2021
Equity securities	$	—	$	—	$	—	$	2	$	—	$	2
Fixed income securities:
Corporate	$	2	$	—	$	—	$	(2)	$	—	$	—
Total Level 3 plan assets	$	2	$	—	$	—	$	—	$	—	$	2

The expected long-term rate of return on plan assets reflects the average rate of earnings expected on plan assets. The Company’s assumption for the expected long-term rate of return on plan assets is evaluated annually giving consideration to appropriate data including, but not limited to, the plan asset allocation, forward-looking expected returns for the period over which benefits will be paid, historical returns on plan assets and other relevant market data. Given the long-term forward-looking nature of this assumption, the actual returns in any one year do not immediately result in a change to the expected long-term rate of return on plan assets. In consideration of the targeted plan asset allocation, the Company evaluated expected returns using sources including historical average asset class returns from independent nationally recognized providers of this type of data blended together using the asset allocation policy weights for the Company’s pension plans; asset class return forecasts developed by employees with relevant expertise in such forecasts and who are independent from those charged with managing the pension plan assets; and expected portfolio returns from a proprietary simulation methodology of a widely recognized external

investment consulting firm that performs asset allocation and actuarial services for corporate pension plan sponsors. The above sources support the Company’s weighted average long-term rate of return on plan assets assumption of 7.35% used for 2023 and an estimate of 7.34% that will be used for 2024. As of the 2023 measurement date, the arithmetic average of the annual actual return on plan assets for the most recent 10 and 5 years was 8.3% and 10.0%, respectively.

Cash flows There was no required cash contribution necessary to satisfy the minimum funding requirement under the IRC for the tax qualified pension plan for the year ended December 31, 2023.

The Company currently plans to contribute $19 million to its unfunded non-qualified plans and zero to both its primary and other qualified funded pension plans in 2024.

The Company contributed $26 million and $26 million to the postretirement benefit plans in 2023 and 2022, respectively. Contributions by participants were $16 million and $16 million in 2023 and 2022, respectively.

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2023 Form 10-K Notes to Consolidated Financial Statements


Estimated future benefit payments expected to be paid in the next 10 years
	As of December 31, 2023
($ in millions)	Pension benefits		Postretirement benefits
2024	$	495	$	23
2025	487		23
2026	488		21
2027	477		20
2028	472		18
2029-2033	1,740		60
Total benefit payments	$	4,159	$	165

Allstate 401(k) Savings Plan

Employees of the Company, with the exception of those employed by the Company’s international, SquareTrade and InfoArmor subsidiaries, are eligible to become members of the Allstate 401(k) Savings Plan (“Allstate Plan”). The Company’s contributions are based on the Company’s matching obligation. The Company is responsible for funding its contribution to the Allstate Plan.

The Company’s contribution to the Allstate Plan was $124 million, $131 million and $110 million in 2023, 2022 and 2021, respectively.

Allstate’s Canadian, SquareTrade and InfoArmor subsidiaries sponsor defined contribution plans for their eligible employees. Expense for subsidiary sponsored defined contribution plans was $14 million, $9 million and $9 million in 2023, 2022 and 2021, respectively.


Note 19			Equity Incentive Plans

The Company currently has equity incentive plans under which it grants nonqualified stock options, restricted stock units and performance stock awards to certain employees and directors of the Company.


Equity awards
($ in millions)	2023		2022		2021
Compensation expense	$	73	$	93	$	120
Income tax benefits	12		16		18
Cash received from exercise of options	103		130		151
Tax benefit realized on options exercised and release of stock restrictions	31		44		37

The Company records compensation expense related to awards under these plans over the shorter of the period in which the requisite service is rendered or retirement eligibility is attained. Compensation expense for performance stock awards with no market condition is based on the probable number of awards expected to vest using the performance level most likely to be achieved at the end of the performance period. Compensation expense for performance stock awards with a market condition is based on the number of awards expected to vest as estimated at the grant date and does not change if the market condition is not met.


Nonvested awards as of December 31, 2023
($ in millions)	Unrecognized compensation		Weighted average vesting period
Nonqualified stock options	$	17	1.68
Restricted stock units	48		1.74
Performance stock awards	17		1.69
Total	$	82

Options are granted to employees with exercise prices equal to the closing share price of the Company’s common stock on the applicable grant date. Options granted to employees vest ratably over a three-year period. Vesting is subject to continued service, except for employees who are retirement eligible and in certain other limited circumstances. Options may be exercised once vested and will expire no later than ten years after the date of grant.

Restricted stock units for directors vest immediately and convert into shares of stock on the earlier of the day of the third anniversary of the grant date or the date the director’s service terminates, unless a deferred period of restriction is elected. Restricted stock units granted to directors prior to June 1, 2016 convert upon leaving the board. Restricted stock units granted to employees prior to February 19, 2020 vest on the day prior to the third anniversary of the grant date. Restricted stock units granted to employees on or after February 19, 2020 vest ratably over a three-year period. Restricted stock units granted to employees subsequently convert into shares of stock on the day of the respective anniversary of the grant date. Vesting is subject to continued service, except for employees who are

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retirement eligible and in certain other limited circumstances.

Performance stock awards vest into shares of stock based on achieving established company-specific performance goals. Performance stock awards granted prior to February 19, 2020 vest into shares of stock on the day prior to the third anniversary of the grant date. Performance stock awards granted on or after February 19, 2020 vest into shares of stock on the third anniversary of the grant date.

The numbers of shares earned upon vesting of the performance stock awards is based on the attainment of performance goals for each of the performance periods, subject to continued service, except for employees who are retirement eligible and in certain other limited circumstances.

Since 2001, a total of 110.8 million shares of common stock were authorized to be used for awards under the plans, subject to adjustment in accordance with the plans’ terms. As of December 31, 2023, 12.3 million shares were reserved and remained available

for future issuance under these plans. The Company uses its treasury shares for these issuances.

The fair value of each option grant is estimated on the date of grant using a binomial lattice model. The Company uses historical data to estimate option exercise and employee termination within the valuation model. In addition, separate groups of employees that have similar historical exercise behavior are considered separately for valuation purposes. The expected term of options granted is derived from the output of the binomial lattice model and represents the period of time that options granted are expected to be outstanding. The expected volatility of the price of the underlying shares is implied based on traded options and historical volatility of the Company’s common stock. The expected dividends were based on the current dividend yield of the Company’s stock as of the date of the grant. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant.


Option grant assumptions
	2023		2022		2021
Weighted average expected term	5.8 years		5.9 years		7.5 years
Expected volatility	20.0% - 31.6%		19.8% - 29.9%		16.5% - 28.8%
Weighted average volatility	24.9	%	23.2	%	23.0	%
Expected dividends	2.4% - 3.3%		2.5% - 3.0%		2.0% - 3.0%
Weighted average expected dividends	2.6	%	2.8	%	3.1	%
Risk-free rate	3.3% - 5.6%		0% - 4.8%		0% - 1.7%


Summary of option activity
	For the year ended December 31, 2023
	Number (in 000s)	Weighted average exercise price		Aggregate intrinsic value (in 000s)		Weighted average remaining contractual term (years)
Outstanding as of January 1, 2023	8,953	$	95.72
Granted	910	136.63
Exercised	(1,499)	80.27
Forfeited	(170)	124.26
Expired	(67)	117.79
Outstanding as of December 31, 2023	8,127	102.37		$	305,666	5.2
Outstanding, net of expected forfeitures	8,091	102.24		305,369		5.2
Outstanding, exercisable (“vested”)	6,146	95.05		276,112		4.3

The weighted average grant date fair value of options granted was $31.45, $21.16 and $15.61 during 2023, 2022 and 2021, respectively. The intrinsic value, which is the difference between the fair value and the exercise price, of options exercised was $79 million, $107 million and $112 million during 2023, 2022 and 2021, respectively.


Changes in restricted stock units
	For the year ended December 31, 2023
	Number (in 000s)	Weighted average grant date fair value
Nonvested as of January 1, 2023	929	$	110.75
Granted	417	132.65
Vested	(371)	117.28
Forfeited	(73)	124.84
Nonvested as of December 31, 2023	902	117.05

The fair value of restricted stock units is based on the market value of the Company’s stock as of the date of the

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2023 Form 10-K Notes to Consolidated Financial Statements

grant. The market value in part reflects the payment of future dividends expected. The weighted average grant date fair value of restricted stock units granted was $132.65, $123.98 and $108.99 during 2023, 2022 and 2021, respectively. The total fair value of restricted stock units vested was $49 million, $59 million and $35 million during 2023, 2022 and 2021, respectively.


Changes in performance stock awards
	For the year ended December 31, 2023
	Number (in 000s)	Weighted average grant date fair value
Nonvested as of January 1, 2023	796	$	116.36
Granted	240	136.62
Adjustment for performance achievement	54	123.72
Vested	(309)	122.47
Forfeited	(47)	120.53
Nonvested as of December 31, 2023	734	120.68

The change in performance stock awards primarily comprises awards vested and granted in 2023.

The fair value of performance stock awards that do not include a market condition is based on the market value of the Company’s stock as of the date of the grant.

Starting with the February 2020 award, the fair value of performance stock awards includes a component with market-based condition measured on the grant date using a Monte Carlo simulation model. Market-based condition measures the Company’s total shareholder return (“TSR”) relative to the TSR of peer companies, expressed in terms of the Company’s TSR percentile rank among the peer companies, over a three-calendar-year performance period. The Monte Carlo simulation model uses a risk-neutral framework to model future stock price movements based upon the risk-free rate of return at the time of grant, volatilities of the Company and the peer companies,

and expected term assumed to be equal to the remaining measurement period. The market value in part reflects the payment of future dividends expected.

For the year ended December 31, 2023, the 2023 performance stock awards with market-based condition assumes a risk-free rate of 1.7%, volatility of 24.8%, average peer volatility of 29.9% and an expected term of 2.9 years.

The weighted average grant date fair value of performance stock awards granted was $136.62, $123.08 and $107.14 during 2023, 2022 and 2021, respectively. The total fair value of performance stock awards vested was $41 million, $87 million and $70 million during 2023, 2022 and 2021, respectively.

The Company recognizes all tax effects related to share-based payments at settlement or expiration through the income statement.


Note 20			Supplemental Cash Flow Information

Non-cash investing activities include $64 million, $185 million and $51 million related to mergers and exchanges completed with equity and fixed income securities, bank loans, real estate and limited partnerships in 2023, 2022 and 2021, respectively. Non-cash investing activities include $15 million related to right-of-use real estate obtained in exchange for lease obligations and $123 million related to debt assumed by purchaser on sale of real estate for the year ended December 31, 2023.

Non-cash financing activities include $39 million, $65 million and $53 million related to the issuance of Allstate common shares for vested equity awards in 2023, 2022 and 2021, respectively.

Cash flows used in operating activities in the Consolidated Statements of Cash Flows include cash paid for operating leases related to amounts included

in the measurement of lease liabilities of $130 million, $163 million and $181 million for the year ended December 31, 2023, 2022 and 2021, respectively. Non-cash operating activities include $30 million, $26 million and $98 million related to right-of-use assets obtained in exchange for lease obligations for the year ended December 31, 2023, 2022 and 2021, 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 Consolidated Statements of Cash Flows along with the activities resulting from management of the proceeds, as follows:

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2023 Form 10-K Notes to Consolidated Financial Statements


	For the years ended December 31,
($ in millions)	2023		2022		2021
Net change in proceeds managed
Net change in fixed income securities	$	259	$	(521)	$	—
Net change in short-term investments	(139)		(49)		(539)
Operating cash flow provided (used)	120		(570)		(539)
Net change in cash	—		3		9
Net change in proceeds managed	$	120	$	(567)	$	(530)

Cash flows from operating activities
Net change in liabilities
Liabilities for collateral, beginning of year	$	(2,011)	$	(1,444)	$	(914)
Liabilities for collateral, end of year	(1,891)		(2,011)		(1,444)
Operating cash flow (used) provided	$	(120)	$	567	$	530


Note 21			Other Comprehensive Income (Loss)


Components of other comprehensive income (loss) on a pre-tax and after-tax basis
	For the years ended December 31,
	2023						2022						2021
($ in millions)	Pre-tax		Tax		After-tax		Pre-tax		Tax		After-tax		Pre-tax		Tax		After-tax
Unrealized net holding gains and losses arising during the period, net of related offsets (1)	$	1,547	$	(322)	$	1,225	$	(4,472)	$	949	$	(3,523)	$	(2,840)	$	601	$	(2,239)
Less: reclassification adjustment of realized capital gains and losses	(539)		113		(426)		(848)		178		(670)		436		(92)		344
Unrealized net capital gains and losses	2,086		(435)		1,651		(3,624)		771		(2,853)		(3,276)		693		(2,583)
Unrealized foreign currency translation adjustments	85		(18)		67		(190)		40		(150)		(10)		2		(8)
Unamortized pension and other postretirement prior service credit (2)	(20)		4		(16)		(54)		11		(43)		(75)		16		(59)
Discount rate for reserve for future policy benefits	(13)		3		(10)		289		(61)		228		62		(13)		49
Other comprehensive income (loss)	$	2,138	$	(446)	$	1,692	$	(3,579)	$	761	$	(2,818)	$	(3,299)	$	698	$	(2,601)

(1)2021 includes $2.4 billion of losses related to held for sale investments in connection with the sale of the life and annuity business.

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

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2023 Form 10-K Notes to Consolidated Financial Statements


Note 22			Quarterly Results (unaudited)


	First Quarter				Second Quarter				Third Quarter				Fourth Quarter
($ in millions, except per share data)	2023		2022		2023		2022		2023		2022		2023		2022
Revenues	$	13,786	$	12,336	$	13,979	$	12,219	$	14,497	$	13,208	$	14,832	$	13,648


Net income (loss) applicable to common shareholders	(346)		634		(1,389)		(1,040)		(41)		(685)		1,460		(303)




Earnings per common share applicable to common shareholders - Basic	(1.31)		2.28		(5.29)		(3.80)		(0.16)		(2.55)		5.57		(1.15)




Earnings per common share applicable to common shareholders - Diluted (1)	(1.31)		2.25		(5.29)		(3.80)		(0.16)		(2.55)		5.52		(1.15)

(1)For periods presented with a net loss from continuing operations applicable to common shareholders, 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.

Consolidated net income applicable to common shareholders was $1.46 billion in the fourth quarter of 2023 compared to net loss of $303 million in the fourth quarter of 2022, primarily due to improved underwriting results.

Effective January 1, 2023, the Company adopted the FASB guidance revising the accounting for certain long-duration insurance contracts using the modified retrospective approach to the transition date of January 1, 2021. See Note 2 for discussion of the guidance and further information regarding the impact of the adoption on the consolidated financial statements.


Impact of adoption for reserve for future policy benefits
	First Quarter		Second Quarter		Third Quarter		Fourth Quarter
($ in millions, except per share data)	2022		2022		2022		2022
Revenues	$	(1)	$	(1)	$	—	$	1


Net income (loss) applicable to common shareholders	4		2		9		7




Earnings per common share applicable to common shareholders - Basic	0.01		0.01		0.03		0.02




Earnings per common share applicable to common shareholders - Diluted	0.01		0.01		0.03		0.02

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2023 Form 10-K

Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Directors of The Allstate Corporation

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying Consolidated Statements of Financial Position of The Allstate Corporation and subsidiaries (the “Company”) as of December 31, 2023 and 2022, the related Consolidated Statements of Operations, Comprehensive Income (Loss), Shareholders’ Equity, and Cash Flows, for each of the three years in the period ended December 31, 2023, and the related notes and the schedules listed in the Index at Item 15 (collectively referred to as the "financial statements"). We also have audited the Company’s internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control - Integrated Framework (2013) issued by COSO.

Change in Accounting Principle

As discussed in Note 2 to the financial statements, the Company has changed its method of accounting for the measurement and disclosure of long-duration insurance contracts using the modified retrospective approach to the transition date of January 1, 2021 due to the adoption of Accounting Standards Update 2018-12, Targeted Improvements to the Accounting for Long-Duration Contracts.

Basis for Opinions

The Company’s management is responsible for these financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Item 9A*.* Controls and Procedures. Our responsibility is to express an opinion on these financial statements and an opinion on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (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 audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the financial statements included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures to respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

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2023 Form 10-K

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Reserve for Property and Casualty Insurance Claims and Claims Expense - Refer to Notes 2 and 9 to the Financial Statements

Critical Audit Matter Description

The Company establishes reserves for property and casualty insurance claims and claims expense on reported and unreported claims of insured losses. Using established industry and actuarial best practices as well as the Company’s historical claims experience, the reserve for property and casualty insurance claims and claims expense is estimated based on (i) claims reported, (ii) claims incurred but not reported, and (iii) projections of claim payments to be made in the future.

Given the subjectivity of estimating claims incurred but not reported and projections of claim payments to be made in the future, particularly those with payout requirements over a longer period of time, the related audit effort in evaluating the reserve for property and casualty insurance claims and claims expense required a high degree of auditor judgment and an increased extent of effort, including involvement of our actuarial specialists.

How the Critical Audit Matter Was Addressed in the Audit

Our principal audit procedures related to the reserve for property and casualty insurance claims and claims expense included the following:

We tested the effectiveness of controls related to the reserve for property and casualty insurance claims and claims expense, including those over the Company’s estimates and projections.
We evaluated the methods and assumptions used by the Company to estimate the reserve for property and casualty insurance claims and claims expense by:

–Testing the underlying data that served as the basis for the actuarial analysis, including historical claims, to test that the inputs to the actuarial estimate were complete and accurate.

–Performing a retrospective review, including comparing prior year estimates of expected incurred losses to actual experience during the current year to identify potential bias in the determination of the reserve for property and casualty insurance claims and claims expense.

With the assistance of our actuarial specialists, we developed independent estimates for the reserve for property and casualty insurance claims and claims expense, particularly those with payout requirements over a longer period of time, utilizing loss data and industry claim development factors, and compared our estimates to management’s estimates and assessed the consistency of management’s approach.

/s/ Deloitte & Touche LLP

Chicago, Illinois

February 21, 2024

We have served as the Company's auditor since 1992.

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