{ "ticker": "ALL", "company": "Allstate Corporation", "filing_type": "10-K", "year_current": "2024", "year_prior": "2023", "summary": { "added": 20, "removed": 8, "modified": 53, "unchanged": 13, "total_current": 86, "total_prior": 74 }, "source": "SEC EDGAR", "url": "https://riskdiff.com/all/2024-vs-2023/", "markdown_url": "https://riskdiff.com/all/2024-vs-2023/index.md", "json_url": "https://riskdiff.com/all/2024-vs-2023/index.json", "generated": "2026-06-01", "ai_summary": null, "risks": [ { "status": "ADDED", "current_title": "Risk Management and Strategy", "prior_title": null, "current_body": "The Enterprise Risk and Return Council has delegated the power and authority to manage cybersecurity risks to the Information Security Council (“ISC”). The CISO chairs the ISC, with senior management representation from across the Company including representatives from Privacy, Legal and Technology. The ISC monitors, makes mitigating decisions about, and escalates information security risks that are outside the Company’s established risk tolerance. Additionally, it provides executive sponsorship of information security controls and oversees the development and review of the information security policy and enterprise security standards. Allstate evaluates candidates for information security positions based on experience and qualifications. Senior leadership, team leads and subject matter experts conduct interviews to identify top candidates who represent the technical and behavioral acumen required of cybersecurity professionals at Allstate. Allstate provides cybersecurity employees with continuing education associated with their roles and responsibilities. Information Security Program Allstate has implemented a robust Information Security Program to manage material risks from cybersecurity threats. The Company’s Program uses a risk-based, defense-in-depth approach to identify, assess and manage cybersecurity risks to the Company’s information assets and systems, enabling the business to achieve its objectives. The Information Security Program is aligned with industry best practices and standards including the ISO 27001/27002 standards, the Control Objectives for Information and Related Technologies The Allstate Corporation 31 The Allstate Corporation 31 The Allstate Corporation 31 2023 Form 10-K Part I - Item 1A. Risk Factors and Other Disclosures 2023 Form 10-K Part I - Item 1A. Risk Factors and Other Disclosures Framework and the National Institute of Standards and Technology Cybersecurity Framework (“NIST CSF”). Allstate conducts risk and control assessments to proactively identify and assess the likelihood and impact of specific information security risks using the NIST CSF. The Company conducts these risk assessments at multiple levels of scope, including applications, business processes, business units, and enterprise. Allstate documents the identified risks, tracking them based on potential impact and the likelihood that harm might occur. The Company manages the risks in accordance with its Information Security Program.Allstate’s Information Security Program outlines the responsibilities and expectations for the security of Allstate information systems. The Program includes standards, policies and procedures requiring the implementation of technical, administrative and physical controls to manage the risk to Allstate information and systems. These standards, policies and procedures cover industry-standard information security domains, including risk assessment, third-party supplier risk management, vulnerability management, identity and access management, application security, network security, cybersecurity awareness training, encryption and incident management.Allstate conducts periodic assessments, designed to evaluate effectiveness of implemented controls. The Company performs vulnerability scans and penetration tests to assess controls and proactively identify vulnerabilities for prioritization and remediation. Findings are managed and tracked in accordance with Allstate’s governance, risk and compliance standards. Dedicated personnel support information security operations 24 hours per day, seven days per week. Allstate’s incident response program is designed to detect, respond and recover from a range of cybersecurity-related incidents.Item 2. PropertiesIn Illinois, the Company has 11 locations totaling approximately 480 thousand square feet of office space.In North America, we operate from approximately 780 retail stores, administrative, data processing, claims handling and other support facilities that total 710 thousand square feet owned and 4.3 million square feet leased.Outside North America, we own one and lease two properties in Northern Ireland comprising approximately 200 thousand square feet. We also have two leased facilities in India for approximately 500 thousand square feet and two leased facilities in London for approximately seven thousand square feet.The locations where Allstate exclusive agencies operate in the U.S. are typically leased by the agencies.Item 3. Legal ProceedingsInformation required for Item 3 is incorporated by reference to the discussion under the heading “Regulation and compliance” and under the heading “Legal and regulatory proceedings and inquiries” in Note 15 of the consolidated financial statements.Item 4. Mine Safety DisclosuresNot applicable. Framework and the National Institute of Standards and Technology Cybersecurity Framework (“NIST CSF”). Allstate conducts risk and control assessments to proactively identify and assess the likelihood and impact of specific information security risks using the NIST CSF. The Company conducts these risk assessments at multiple levels of scope, including applications, business processes, business units, and enterprise. Allstate documents the identified risks, tracking them based on potential impact and the likelihood that harm might occur. The Company manages the risks in accordance with its Information Security Program.Allstate’s Information Security Program outlines the responsibilities and expectations for the security of Allstate information systems. The Program includes standards, policies and procedures requiring the implementation of technical, administrative and physical controls to manage the risk to Allstate information and systems. These standards, policies and procedures cover industry-standard information security domains, including risk assessment, third-party supplier risk management, vulnerability management, identity and access management, application security, network security, cybersecurity awareness training, encryption and incident management.Allstate conducts periodic assessments, designed to evaluate effectiveness of implemented controls. The Company performs vulnerability scans and penetration tests to assess controls and proactively identify vulnerabilities for prioritization and remediation. Findings are managed and tracked in accordance with Allstate’s governance, risk and compliance standards. Dedicated personnel support information security operations 24 hours per day, seven days per week. Allstate’s incident response program is designed to detect, respond and recover from a range of cybersecurity-related incidents. Framework and the National Institute of Standards and Technology Cybersecurity Framework (“NIST CSF”). Allstate conducts risk and control assessments to proactively identify and assess the likelihood and impact of specific information security risks using the NIST CSF. The Company conducts these risk assessments at multiple levels of scope, including applications, business processes, business units, and enterprise. Allstate documents the identified risks, tracking them based on potential impact and the likelihood that harm might occur. The Company manages the risks in accordance with its Information Security Program. Allstate’s Information Security Program outlines the responsibilities and expectations for the security of Allstate information systems. The Program includes standards, policies and procedures requiring the implementation of technical, administrative and physical controls to manage the risk to Allstate information and systems. These standards, policies and procedures cover industry-standard information security domains, including risk assessment, third-party supplier risk management, vulnerability management, identity and access management, application security, network security, cybersecurity awareness training, encryption and incident management. Allstate conducts periodic assessments, designed to evaluate effectiveness of implemented controls. The Company performs vulnerability scans and penetration tests to assess controls and proactively identify vulnerabilities for prioritization and remediation. Findings are managed and tracked in accordance with Allstate’s governance, risk and compliance standards. Dedicated personnel support information security operations 24 hours per day, seven days per week. Allstate’s incident response program is designed to detect, respond and recover from a range of cybersecurity-related incidents. Item 2. PropertiesIn Illinois, the Company has 11 locations totaling approximately 480 thousand square feet of office space.In North America, we operate from approximately 780 retail stores, administrative, data processing, claims handling and other support facilities that total 710 thousand square feet owned and 4.3 million square feet leased.Outside North America, we own one and lease two properties in Northern Ireland comprising approximately 200 thousand square feet. We also have two leased facilities in India for approximately 500 thousand square feet and two leased facilities in London for approximately seven thousand square feet.The locations where Allstate exclusive agencies operate in the U.S. are typically leased by the agencies.Item 3. Legal ProceedingsInformation required for Item 3 is incorporated by reference to the discussion under the heading “Regulation and compliance” and under the heading “Legal and regulatory proceedings and inquiries” in Note 15 of the consolidated financial statements.Item 4. Mine Safety DisclosuresNot applicable. Item 2. Properties In Illinois, the Company has 11 locations totaling approximately 480 thousand square feet of office space. In North America, we operate from approximately 780 retail stores, administrative, data processing, claims handling and other support facilities that total 710 thousand square feet owned and 4.3 million square feet leased. Outside North America, we own one and lease two properties in Northern Ireland comprising approximately 200 thousand square feet. We also have two leased facilities in India for approximately 500 thousand square feet and two leased facilities in London for approximately seven thousand square feet. The locations where Allstate exclusive agencies operate in the U.S. are typically leased by the agencies. Item 3. Legal Proceedings Information required for Item 3 is incorporated by reference to the discussion under the heading “Regulation and compliance” and under the heading “Legal and regulatory proceedings and inquiries” in Note 15 of the consolidated financial statements. Item 4. Mine Safety Disclosures Not applicable. 32 www.allstate.com 32 www.allstate.com 32 www.allstate.com 2023 Form 10-K 2023 Form 10-K Part II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities As of January 31, 2024, there were 56,831 holders of record of The Allstate Corporation’s common stock. The principal market for the common stock is the New York Stock Exchange, where our common stock trades under the trading symbol “ALL”. Our common stock is also listed on the Chicago Stock Exchange. Common stock performance graph The following performance graph compares the cumulative total shareholder return on Allstate common stock for a five-year period (December 31, 2018 to December 31, 2023) with the cumulative total return of the S&P Property and Casualty Insurance Index (S&P P/C) and the S&P 500 stock index. Value at each year-end of $100 initial investment made on December 31, 201812/31/201812/31/201912/31/202012/31/202112/31/202212/31/2023Allstate$100.00 $138.82 $138.65 $152.35 $180.29 $191.72 S&P P/C$100.00 $125.87 $133.84 $157.27 $186.95 $207.04 S&P 500$100.00 $131.47 $155.65 $200.29 $163.98 $207.04" }, { "status": "ADDED", "current_title": "Israel/Hamas Conflict", "prior_title": null, "current_body": "As of December 31, 2023, we have approximately $47 million investment exposure in the Middle East, of which approximately $43 million is held in Israel, which is primarily indirect exposure through funds managed by external asset managers." }, { "status": "ADDED", "current_title": "Russia/Ukraine Conflict", "prior_title": null, "current_body": "The Russia-Ukraine war and related sanctions imposed as a result of this conflict have increased global economic and political uncertainty, including inflationary pressures and an increased risk of cybersecurity incidents. Allstate does not have operations or direct investments in Russia, Belarus or Ukraine, but we could experience significant indirect impacts on the investment portfolio, financial position, or results of operations." }, { "status": "ADDED", "current_title": "Improve Customer Value", "prior_title": null, "current_body": "Enterprise Net Promoter Score, which measures how likely customers are to recommend Allstate, finished below the prior year, reflecting the impact of substantial price increases necessary to offset higher loss costs. Consolidated policies in force reached 194 million, a 2.8% increase from prior year. Property-Liability policies in force decreased by 2.0% compared to the prior year, as continued growth at National General was more than offset by the Allstate brand and renewals declined in the auto insurance business. Protection Services policies in force increased 4.3%, primarily due to growth at Allstate Protection Plans. Return on average Allstate common shareholders’ equity was (2.0)% in 2023. The Property-Liability combined ratio of 104.5 for the full year decreased compared to the prior year primarily reflecting increased premiums earned, partially offsetting continued high loss costs. A comprehensive profitability plan is being executed. Net investment income of $2.48 billion in 2023 was $75 million higher than prior year as higher market-based investment income was partially offset by lower performance-based results. Total return on the $66.68 billion investment portfolio was 6.7% in 2023. Proactive portfolio management repositioned the fixed income portfolio into longer duration and higher-yielding assets that sustainably increase income." }, { "status": "ADDED", "current_title": "Execute Transformative Growth", "prior_title": null, "current_body": "Allstate made substantial progress in advancing Transformative Growth in 2023, including continued cost reductions, deploying a new property-liability technology platform and a new Affordable, Simple and Connected auto insurance offering in seven states. National General is building a strong competitive position in independent agent distribution. Build a digital enterprise by expanding utilization of machine-based learning and artificial intelligence. (1)2024 operating priorities will remain mostly consistent with the 2023 priorities. The Allstate Corporation 37 The Allstate Corporation 37 The Allstate Corporation 37 2023 Form 10-K 2023 Form 10-K" }, { "status": "ADDED", "current_title": "Total revenue", "prior_title": null, "current_body": "Total revenue increased 11.1% to $57.09 billion in 2023 compared to 2022, primarily due to a 10.4% increase in property and casualty insurance premiums earned and net gains on equity valuations in 2023 compared to losses in 2022. Total revenue increased 11.1% to $57.09 billion in 2023 compared to 2022, primarily due to a 10.4% increase in property and casualty insurance premiums earned and net gains on equity valuations in 2023 compared to losses in 2022. Total revenue increased 11.1% to $57.09 billion in 2023 compared to 2022, primarily due to a 10.4% increase in property and casualty insurance premiums earned and net gains on equity valuations in 2023 compared to losses in 2022. Total revenue increased 11.1% to $57.09 billion in 2023 compared to 2022, primarily due to a 10.4% increase in property and casualty insurance premiums earned and net gains on equity valuations in 2023 compared to losses in 2022. Net investment income($ in millions)" }, { "status": "ADDED", "current_title": "Net investment income", "prior_title": null, "current_body": "Net investment income increased $75 million to $2.48 billion in 2023 compared to 2022, primarily due to higher market-based income reflecting increased fixed income portfolio yields and investment balances, partially offset by lower performance-based investment results. Net investment income increased $75 million to $2.48 billion in 2023 compared to 2022, primarily due to higher market-based income reflecting increased fixed income portfolio yields and investment balances, partially offset by lower performance-based investment results. Net investment income increased $75 million to $2.48 billion in 2023 compared to 2022, primarily due to higher market-based income reflecting increased fixed income portfolio yields and investment balances, partially offset by lower performance-based investment results. Net investment income increased $75 million to $2.48 billion in 2023 compared to 2022, primarily due to higher market-based income reflecting increased fixed income portfolio yields and investment balances, partially offset by lower performance-based investment results. 38 www.allstate.com 38 www.allstate.com 38 www.allstate.com 2023 Form 10-K 2023 Form 10-K" }, { "status": "ADDED", "current_title": "Summarized financial results", "prior_title": null, "current_body": "Years Ended December 31,($ in millions)202320222021Revenues Property and casualty insurance premiums$50,670 $45,904 $42,218 Accident and health insurance premiums and contract charges1,846 1,832 1,834 Other revenue2,400 2,344 2,172 Net investment income 2,478 2,403 3,293 Net gains (losses) on investments and derivatives(300)(1,072)1,084 Total revenues57,094 51,411 50,601 Costs and expenses Property and casualty insurance claims and claims expense(41,070)(37,264)(29,318)Shelter-in-Place Payback expense— — (29)Accident, health and other policy benefits(1,071)(1,042)(1,060)Amortization of deferred policy acquisition costs(7,278)(6,634)(6,236)Operating, restructuring and interest expenses(7,685)(7,832)(7,760)Pension and other postretirement remeasurement gains (losses)(9)(116)644 Amortization of purchased intangibles(329)(353)(376)Total costs and expenses(57,442)(53,241)(44,135)(Loss) income from operations before income tax expense(348)(1,830)6,466 Income tax benefit (expense)135 488 (1,292)Net (loss) income from continuing operations(213)(1,342)5,174 Loss from discontinued operations, net of tax— — (3,593)Net (loss) income(213)(1,342)1,581 Less: Net loss attributable to noncontrolling interest(25)(53)(33)Net (loss) income attributable to Allstate(188)(1,289)1,614 Preferred stock dividends(128)(105)(114)Net (loss) income applicable to common shareholders$(316)$(1,394)$1,500 Segment HighlightsAllstate Protection underwriting loss was $2.09 billion in 2023 compared to underwriting loss of $2.78 billion in 2022, due to increased premiums earned and lower unfavorable non-catastrophe reserve reestimates, partially offset by higher incurred losses and higher catastrophe losses of $5.64 billion in 2023 compared to $3.11 billion in 2022.Premiums written increased 10.0% to $50.35 billion in 2023 compared to $45.79 billion in 2022, reflecting higher premiums in both Allstate and National General brands.Protection Services adjusted net income was $106 million in 2023 compared to $169 million in 2022. The decrease in 2023 was due to higher appliance and furniture claim severity at Allstate Protection Plans and lower third-party lead sales at Arity, partially offset by improved margins at Allstate Roadside and lower expenses at Allstate Identity Protection. Adjusted net income was also impacted by an increase in state income taxes and deferred tax liabilities for Allstate Dealer Services. Premiums and other revenues increased 9.4% or $220 million to $2.56 billion in 2023 from $2.34 billion in 2022 primarily due to Allstate Protection Plans.Allstate Health and Benefits adjusted net income was $242 million in 2023 compared to $245 million in 2022. The decrease was primarily due to a decline in employer voluntary benefits, partially offset by increases in individual and group health.Premiums and contract charges totaled $1.85 billion in 2023, an increase of 0.8% from $1.83 billion in 2022 primarily due to growth in group health, partially offset by a decline in employer voluntary benefits and individual health.Income TaxesThe effective tax rate is the ratio of income tax (benefit) expense divided by (loss) income from operations before income tax expense. The effective tax rate for 2023 was 38.8% compared to 26.7% in 2022 due to the total income tax benefit measured against a lower loss from operations before income tax expense of $348 million in 2023 compared to a loss of $1.83 billion in 2022. In both years, the effective tax rate was higher than the 21% federal statutory income tax rate, primarily due to tax credits, tax-exempt interest income and excess tax benefits on shared-based payments, offset by a change in valuation allowance and uncertain tax positions. In addition, in 2023, the Company recorded an additional tax benefit arising from the liquidation of a foreign subsidiary and the remeasurement of state deferred income taxes. The Segment HighlightsAllstate Protection underwriting loss was $2.09 billion in 2023 compared to underwriting loss of $2.78 billion in 2022, due to increased premiums earned and lower unfavorable non-catastrophe reserve reestimates, partially offset by higher incurred losses and higher catastrophe losses of $5.64 billion in 2023 compared to $3.11 billion in 2022.Premiums written increased 10.0% to $50.35 billion in 2023 compared to $45.79 billion in 2022, reflecting higher premiums in both Allstate and National General brands.Protection Services adjusted net income was $106 million in 2023 compared to $169 million in 2022. The decrease in 2023 was due to higher appliance and furniture claim severity at Allstate Protection Plans and lower third-party lead sales at Arity, partially offset by improved margins at Allstate Roadside and lower expenses at Allstate Identity Protection. Adjusted net income was also impacted by an increase in state income taxes and deferred tax liabilities for Allstate Dealer Services. Premiums and other revenues increased 9.4% or $220 million to $2.56 billion in 2023 from $2.34 billion in 2022 primarily due to Allstate Protection Plans." }, { "status": "ADDED", "current_title": "Income Taxes", "prior_title": null, "current_body": "The effective tax rate is the ratio of income tax (benefit) expense divided by (loss) income from operations before income tax expense. The effective tax rate for 2023 was 38.8% compared to 26.7% in 2022 due to the total income tax benefit measured against a lower loss from operations before income tax expense of $348 million in 2023 compared to a loss of $1.83 billion in 2022. In both years, the effective tax rate was higher than the 21% federal statutory income tax rate, primarily due to tax credits, tax-exempt interest income and excess tax benefits on shared-based payments, offset by a change in valuation allowance and uncertain tax positions. In addition, in 2023, the Company recorded an additional tax benefit arising from the liquidation of a foreign subsidiary and the remeasurement of state deferred income taxes. The The Allstate Corporation 39 The Allstate Corporation 39 The Allstate Corporation 39 2023 Form 10-K 2023 Form 10-K impact of the state deferred income taxes was not material to the consolidated results of operations but resulted in a tax expense to Protection Services and a tax benefit to Allstate Protection. For additional information, see Note 16 of the consolidated financial statements.Financial HighlightsInvestments totaled $66.68 billion as of December 31, 2023, increasing from $61.83 billion as of December 31, 2022.Allstate shareholders’ equity was $17.77 billion as of December 31, 2023 and $17.49 billion as of December 31, 2022. The increase is primarily due to lower unrealized net capital losses on investments, partially offset by dividends paid to shareholders, common share repurchases and a net loss.Book value per diluted common share (ratio of Allstate common shareholders’ equity to total common shares outstanding and dilutive potential common shares outstanding) was $59.39 as of December 31, 2023, an increase of 2.2% from $58.12 as of December 31, 2022.Return on average common Allstate shareholders’ equity For the twelve months ended December 31, 2023, return on Allstate common shareholders’ equity was (2.0)%, an increase of 5.2 points from (7.2)% for the twelve months ended December 31, 2022, primarily due to lower net loss applicable to common shareholders.Pension and other postretirement remeasurement gains and losses We recorded pension and other postretirement remeasurement losses of $9 million in 2023, primarily related to losses on the remeasurement of the projected benefit obligation driven by a decrease in the liability discount rate, partially offset by gains due to favorable asset performance compared to expected return on plan assets. See Note 18 of the consolidated financial statements and Application of Critical Accounting Estimates section of the MD&A for further information.Adopted accounting standardAccounting for Long-Duration Insurance Contracts Effective January 1, 2023, the Company adopted the Financial Accounting Standards Board (”FASB”) guidance revising the accounting for certain long-duration insurance contracts using the modified retrospective approach to the transition date of January 1, 2021.Under the new guidance, measurement assumptions, including those for mortality, morbidity and policy lapses, are required to be reviewed at least annually, and updated as appropriate. In addition, reserves under the new guidance are required to be discounted using an upper-medium grade fixed income instrument yield that is updated through other comprehensive income (“OCI”) at each reporting date. Additionally, deferred policy acquisition costs (“DAC”) for all long-duration products are amortized on a simplified basis. Also, the Company’s reserve for future policy benefits and DAC are subject to new disclosure guidance.In addition, the Company met the conditions included in Accounting Standards Update No. 2022-05, Transition for Sold Contracts, and elected to not apply the new guidance for contracts that were part of the 2021 sales of Allstate Life Insurance Company (“ALIC”) and Allstate Life Insurance Company of New York (“ALNY”).After-tax cumulative effect of change in accounting principle on transition date($ in millions)January 1, 2021Decrease in retained income$21 Decrease in accumulated other comprehensive income (“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 at the transition date. 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. impact of the state deferred income taxes was not material to the consolidated results of operations but resulted in a tax expense to Protection Services and a tax benefit to Allstate Protection. For additional information, see Note 16 of the consolidated financial statements.Financial HighlightsInvestments totaled $66.68 billion as of December 31, 2023, increasing from $61.83 billion as of December 31, 2022.Allstate shareholders’ equity was $17.77 billion as of December 31, 2023 and $17.49 billion as of December 31, 2022. The increase is primarily due to lower unrealized net capital losses on investments, partially offset by dividends paid to shareholders, common share repurchases and a net loss.Book value per diluted common share (ratio of Allstate common shareholders’ equity to total common shares outstanding and dilutive potential common shares outstanding) was $59.39 as of December 31, 2023, an increase of 2.2% from $58.12 as of December 31, 2022.Return on average common Allstate shareholders’ equity For the twelve months ended December 31, 2023, return on Allstate common shareholders’ equity was (2.0)%, an increase of 5.2 points from (7.2)% for the twelve months ended December 31, 2022, primarily due to lower net loss applicable to common shareholders.Pension and other postretirement remeasurement gains and losses We recorded pension and other postretirement remeasurement losses of $9 million in 2023, primarily related to losses on the remeasurement of the projected benefit obligation driven by a decrease in the liability discount rate, partially offset by gains due to favorable asset performance compared to expected return on plan assets. See Note 18 of the consolidated financial statements and Application of Critical Accounting Estimates section of the MD&A for further information.Adopted accounting standardAccounting 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. impact of the state deferred income taxes was not material to the consolidated results of operations but resulted in a tax expense to Protection Services and a tax benefit to Allstate Protection. For additional information, see Note 16 of the consolidated financial statements." }, { "status": "ADDED", "current_title": "Adopted accounting standard", "prior_title": null, "current_body": "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 other comprehensive income (“OCI”) at each reporting date. Additionally, deferred policy acquisition costs (“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, 2021Decrease in retained income$21 Decrease in accumulated other comprehensive income (“AOCI”)277 Total decrease in equity$298 The decrease in AOCI was primarily attributable to a change in the discount rate used in measuring the reserve for future policy benefits for traditional life contracts and other long-term products with guaranteed terms from a portfolio-based rate at contract issuance to an upper-medium grade fixed income-based rate at the transition date. The decrease in retained income primarily related to certain cohorts of long-term contracts whose expected net premiums exceeded expected gross premiums which resulted in an increase in reserves and a decrease in retained income equal to the present value of expected future benefits less the present value of expected future premiums at the transition date. Under the new guidance, measurement assumptions, including those for mortality, morbidity and policy lapses, are required to be reviewed at least annually, and updated as appropriate. In addition, reserves under the new guidance are required to be discounted using an upper-medium grade fixed income instrument yield that is updated through other comprehensive income (“OCI”) at each reporting date. Additionally, deferred policy acquisition costs (“DAC”) for all long-duration products are amortized on a simplified basis. Also, the Company’s reserve for future policy benefits and DAC are subject to new disclosure guidance. In addition, the Company met the conditions included in Accounting Standards Update No. 2022-05, Transition for Sold Contracts, and elected to not apply the new guidance for contracts that were part of the 2021 sales of Allstate Life Insurance Company (“ALIC”) and Allstate Life Insurance Company of New York (“ALNY”). After-tax cumulative effect of change in accounting principle on transition date($ in millions)January 1, 2021Decrease in retained income$21 Decrease in accumulated other comprehensive income (“AOCI”)277 Total decrease in equity$298" }, { "status": "ADDED", "current_title": "After-tax cumulative effect of change in accounting principle on transition date", "prior_title": null, "current_body": "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 at the transition date. 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. 40 www.allstate.com 40 www.allstate.com 40 www.allstate.com 2023 Form 10-K Property-Liability 2023 Form 10-K Property-Liability" }, { "status": "ADDED", "current_title": "Underwriting results", "prior_title": null, "current_body": "Shelter-in-Place Payback expense Restructuring and related charges (1) Catastrophe reserve reestimates (2) Non-catastrophe reserve reestimates (2) Prior year reserve reestimates (2) Expense ratio (3) Effect of prior year reserve reestimates on combined ratio Effect of restructuring and related charges on combined ratio (1) (1)Restructuring and related charges in 2023 primarily relate to implementing actions to streamline the organization and outsource operations, and real estate costs related to facilities being vacated. See Note 14 of the consolidated financial statements for additional details. (2)Favorable reserve reestimates are shown in parentheses. (3)Other revenue is deducted from operating costs and expenses in the expense ratio calculation. 42 www.allstate.com 42 www.allstate.com 42 www.allstate.com 2023 Form 10-K Allstate Protection 2023 Form 10-K Allstate Protection" }, { "status": "ADDED", "current_title": "Total premiums earned", "prior_title": null, "current_body": "44 www.allstate.com 44 www.allstate.com 44 www.allstate.com 2023 Form 10-K Allstate Protection 2023 Form 10-K Allstate Protection Unearned premium balance by line of business($ in millions)As of December 31,20232022Allstate brand:Auto$7,569 $7,039 Homeowners6,187 5,495 Other personal lines 1,264 1,151 Commercial lines194 314 Total Allstate brand15,214 13,999 National General:Auto2,547 2,017 Homeowners799 651 Other personal lines69 62 Commercial lines155 129 Other business lines317 294 Total National General3,887 3,153 Allstate Protection unearned premiums$19,101 $17,152" }, { "status": "ADDED", "current_title": "Number of claims (1)", "prior_title": null, "current_body": "(1)Total claims includes those covered and not covered by the MCCA indemnification. 62 www.allstate.com 62 www.allstate.com 62 www.allstate.com 2023 Form 10-K Allstate Health and Benefits 2023 Form 10-K Allstate Health and Benefits" }, { "status": "ADDED", "current_title": "Allstate Health and Benefits", "prior_title": null, "current_body": "Corporate and Other Fixed income securities (2) Equity securities (3) Short-term investments (4)" }, { "status": "ADDED", "current_title": "Unrealized net capital gains (losses)", "prior_title": null, "current_body": "Equity method of accounting (“EMA”) limited partnerships Gross unrealized gains (losses) on fixed income securities by type and sectorAs of December 31, 2023Amortized cost, netGross unrealizedFair value($ in millions)GainsLossesCorporateBanking (1)$4,189 $31 $(135)$4,085 Basic industry1,007 7 (42)972 Capital goods2,800 33 (97)2,736 Communications2,767 33 (115)2,685 Consumer goods (cyclical and non-cyclical)6,813 93 (251)6,655 Financial services2,111 17 (88)2,040 Energy2,645 35 (63)2,617 Technology2,800 21 (153)2,668 Transportation1,104 13 (45)1,072 Utilities5,330 109 (123)5,316 Other385 5 (31)359 Total corporate fixed income portfolio31,951 397 (1,143)31,205 U.S. government and agencies8,624 114 (119)8,619 Municipal6,049 109 (152)6,006 Foreign government1,286 17 (13)1,290 ABS1,739 13 (7)1,745 Total fixed income securities$49,649 $650 $(1,434)$48,865" }, { "status": "ADDED", "current_title": "Amortized cost, net", "prior_title": null, "current_body": "Banking In general, the gross unrealized losses are related to an increase in market yields, which may include increased risk-free interest rates and wider credit spreads since the time of initial purchase. Similarly, gross unrealized gains reflect a decrease in market yields since the time of initial purchase. Equity securities by sector($ in millions)December 31, 2023December 31, 2022CostOver (under) costFair valueCostOver (under) costFair valueBanking$30 $38 $68 $135 $56 $191 Basic Industry9 2 11 57 16 73 Capital Goods77 (27)50 196 3 199 Energy32 3 35 110 44 154 Funds Equities258 12 270 904 (19)885 Fixed income1,038 (15)1,023 1,067 (84)983 Other58 5 63 3 — 3 Total funds1,354 2 1,356 1,974 (103)1,871 Transportation16 $23 39 48 19 67 Utilities59 1 60 67 12 79 Other (1)667 125 792 1,666 267 1,933 Total equity securities$2,244 $167 $2,411 $4,253 $314 $4,567 Equities Fixed income Other" }, { "status": "ADDED", "current_title": "Total funds", "prior_title": null, "current_body": "Other (1) (1) Other is comprised of consumer goods, technology, REITs, financial services and communications sectors. The Allstate Corporation 71 The Allstate Corporation 71 The Allstate Corporation 71 2023 Form 10-K Investments 2023 Form 10-K Investments Net investment incomeFor the years ended December 31,($ in millions)202320222021Fixed income securities$1,761 $1,255 $1,148 Equity securities75 132 100 Mortgage loans35 33 43 Limited partnership interests499 985 1,973 Short-term investments253 82 5 Other investments169 162 195 Investment income, before expense2,792 2,649 3,464 Investment expenseInvestee level expenses(79)(68)(60)Securities lending expense(93)(30)— Operating costs and expenses(142)(148)(111)Total investment expense(314)(246)(171)Net investment income$2,478 $2,403 $3,293 Property-Liability$2,218 $2,190 $3,118 Protection Services73 48 43 Allstate Health and Benefits82 69 74 Corporate and Other105 96 58 Net investment income$2,478 $2,403 $3,293 Market-based$2,219 $1,566 $1,429 Performance-based573 1,083 2,035 Investment income, before expense$2,792 $2,649 $3,464" }, { "status": "ADDED", "current_title": "Investment income, before expense", "prior_title": null, "current_body": "Net investment income increased 3.1% or $75 million in 2023 compared to 2022, primarily due to higher market-based results driven by reinvesting into fixed income securities with higher yields and to a lesser extent, the reinvestment of proceeds from sales of equity securities into fixed income securities, partially offset by lower performance-based results, mainly from limited partnerships." }, { "status": "ADDED", "current_title": "Performance-based investment income", "prior_title": null, "current_body": "Investee level expenses (1) (1)Investee level expenses include asset level operating expenses on directly held real estate and other consolidated investments reported in investment expense. Performance-based investment income decreased 51.3% or $525 million in 2023 compared to 2022, primarily due to lower valuation increases compared to the prior year and lower income from the sales of underlying investments.Performance-based investment results and income can vary significantly between periods and are influenced by economic conditions, equity market performance, comparable public company earnings multiples, capitalization rates, operating performance of the underlying investments and the timing of asset sales. The company typically employs a lag in recording and recognizing changes in valuations of limited partnership interests due to the availability of investee financial statements. Performance-based investment income decreased 51.3% or $525 million in 2023 compared to 2022, primarily due to lower valuation increases compared to the prior year and lower income from the sales of underlying investments. Performance-based investment income decreased 51.3% or $525 million in 2023 compared to 2022, primarily due to lower valuation increases compared to the prior year and lower income from the sales of underlying investments. Performance-based investment results and income can vary significantly between periods and are influenced by economic conditions, equity market performance, comparable public company earnings multiples, capitalization rates, operating performance of the underlying investments and the timing of asset sales. The company typically employs a lag in recording and recognizing changes in valuations of limited partnership interests due to the availability of investee financial statements. Performance-based investment results and income can vary significantly between periods and are influenced by economic conditions, equity market performance, comparable public company earnings multiples, capitalization rates, operating performance of the underlying investments and the timing of asset sales. The company typically employs a lag in recording and recognizing changes in valuations of limited partnership interests due to the availability of investee financial statements. 72 www.allstate.com 72 www.allstate.com 72 www.allstate.com 2023 Form 10-K Investments 2023 Form 10-K Investments Components of net gains (losses) on investments and derivatives and the related tax effectFor the year December 31,($ in millions)202320222021Sales$(433)$(832)$578 Credit losses(99)(54)(42)Valuation change of equity investments - appreciation (decline):Equity securities239 (772)544 Equity fund investments in fixed income securities43 (128)(24)Limited partnerships (1)34 (160)(21)Total valuation of equity investments316 (1,060)499 Valuation change and settlements of derivatives(84)874 49 Net gains (losses) on investments and derivatives, pre-tax(300)(1,072)1,084 Income tax benefit (expense)63 230 (237)Net gains (losses) on investments and derivatives, after-tax$(237)$(842)$847 Property-Liability$(230)$(688)$798 Protection Services— (40)19 Allstate Health and Benefits2 (35)5 Corporate and Other(9)(79)25 Net gains (losses) on investments and derivatives, after-tax$(237)$(842)$847 Market-based$(352)$(1,083)$917 Performance-based52 11 167 Net gains (losses) on investments and derivatives, pre-tax$(300)$(1,072)$1,084" }, { "status": "REMOVED", "current_title": null, "prior_title": "Sale of Headquarters", "prior_body": "On October 18, 2022, Allstate closed the sale of its headquarters for $232 million resulting in a gain of approximately $99 million, pre-tax in the fourth quarter of 2022. $16 million of the gain was classified in Property-Liability net gains and losses on investments and derivatives and $83 million was classified as other revenue within the Corporate and Other segment. The sale reduces real estate expenses and further advances Allstate’s multi-year Transformative Growth initiative." }, { "status": "REMOVED", "current_title": null, "prior_title": "Acquisitions and Dispositions", "prior_body": "Acquisitions On January 4, 2021, we completed the acquisition of National General Holdings Corp. (“National General”), significantly enhancing our strategic position in the independent agency channel. Discontinued operations and held for sale On October 1, 2021, we closed the sale of Allstate Life Insurance Company of New York (“ALNY”) to Wilton Reassurance Company for $400 million. On November 1, 2021, we 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 $1.25 billion paid by ALIC. In 2021, the assets and liabilities of the businesses were reclassified as held for sale and results are presented as discontinued operations. This change was applied on a retrospective basis. In connection with the sale of ALIC and certain affiliates in 2021, the sale agreement includes a provision related to contingent consideration that may be earned over a ten-year period with the first potential payment date commencing on January 1, 2026 and a final potential payment date of January 1, 2035. The contingent consideration is determined annually based on the average ten-year Treasury rate over the preceding three-year period compared to a designated rate. The contingent consideration meets the definition of a derivative and is accounted for on a fair value basis with periodic changes in fair value reflected in earnings. See Note 3 of the consolidated financial statements for further information on acquisitions and dispositions." }, { "status": "REMOVED", "current_title": null, "prior_title": "Summarized financial results", "prior_body": "Years Ended December 31,($ in millions)202220212020Revenues Property and casualty insurance premiums$45,904 $42,218 $37,073 Accident and health insurance premiums and contract charges1,833 1,821 1,094 Other revenue2,344 2,172 1,065 Net investment income 2,403 3,293 1,590 Net gains (losses) on investments and derivatives(1,072)1,084 1,087 Total revenues51,412 50,588 41,909 Costs and expenses Property and casualty insurance claims and claims expense(37,264)(29,318)(22,001)Shelter-in-Place Payback expense— (29)(948)Accident, health and other policy benefits(1,061)(1,049)(549)Amortization of deferred policy acquisition costs(6,644)(6,252)(5,477)Operating, restructuring and interest expenses(7,832)(7,760)(6,065)Pension and other postretirement remeasurement gains (losses)(116)644 51 Amortization of purchased intangibles(353)(376)(118)Total costs and expenses(53,270)(44,140)(35,107)(Loss) income from operations before income tax expense(1,858)6,448 6,802 Income tax benefit (expense)494 (1,289)(1,373)Net (loss) income from continuing operations(1,364)5,159 5,429 (Loss) income from discontinued operations, net of tax— (3,593)147 Net (loss) income(1,364)1,566 5,576 Less: Net loss attributable to noncontrolling interest(53)(33)— Net (loss) income attributable to Allstate(1,311)1,599 5,576 Preferred stock dividends(105)(114)(115)Net (loss) income applicable to common shareholders$(1,416)$1,485 $5,461" }, { "status": "REMOVED", "current_title": null, "prior_title": "Total premiums earned", "prior_body": "The Allstate Corporation 43 The Allstate Corporation 43 The Allstate Corporation 43 2022 Form 10-K Allstate Protection 2022 Form 10-K Allstate Protection Unearned premium balance by line of business($ in millions)As of December 31,20222021Allstate brand:Auto$7,039 $6,426 Homeowners5,495 4,825 Other personal lines 1,151 1,078 Commercial lines314 315 Total Allstate brand13,999 12,644 National General:Auto2,016 1,764 Homeowners378 451 Other personal lines317 306 Commercial lines442 177 Total National General3,153 2,698 Allstate Protection unearned premiums$17,152 $15,342" }, { "status": "REMOVED", "current_title": null, "prior_title": "Number of claims (1)", "prior_body": "(1)Total claims includes those covered and not covered by the MCCA indemnification. As of December 31, 2022, approximately 1,450 of our pending claims have been reported to the MCCA, of which approximately 75% represents claims that occurred more than 5 years ago. There are 52 Allstate brand claims with reserves in excess of $15 million as of December 31, 2022, which comprise approximately 20% of the gross ending reserves in the table above. As a result, significant developments with a single claimant can result in volatility in prior year incurred claims.Intercompany reinsurance We enter into certain intercompany insurance and reinsurance transactions in order to maintain underwriting control and manage insurance risk among various legal entities. These reinsurance agreements have been approved by the appropriate regulatory authorities. All significant intercompany transactions have been eliminated in consolidation.Catastrophe reinsurance Our catastrophe reinsurance program is designed to address our exposure to catastrophes nationwide, utilizing our risk management methodology. Our program is designed to provide reinsurance protection for catastrophes resulting from multiple perils including hurricanes, windstorms, hail, tornadoes, earthquakes, wildfires, and fires following earthquakes. These reinsurance agreements are part of our catastrophe management strategy, which is intended to provide our shareholders an acceptable return on the risks assumed in our property business, while providing protection to our customers.We anticipate completing the placement of our 2023 nationwide catastrophe reinsurance program in the first half of 2023. For further details of the existing 2022 program, see Note 11 of the consolidated financial statements. As of December 31, 2022, approximately 1,450 of our pending claims have been reported to the MCCA, of which approximately 75% represents claims that occurred more than 5 years ago. There are 52 Allstate brand claims with reserves in excess of $15 million as of December 31, 2022, which comprise approximately 20% of the gross ending reserves in the table above. As a result, significant developments with a single claimant can result in volatility in prior year incurred claims.Intercompany reinsurance We enter into certain intercompany insurance and reinsurance transactions in order to maintain underwriting control and manage insurance risk among various legal entities. These reinsurance agreements have been approved by the appropriate regulatory authorities. All significant intercompany transactions have been eliminated in consolidation. As of December 31, 2022, approximately 1,450 of our pending claims have been reported to the MCCA, of which approximately 75% represents claims that occurred more than 5 years ago. There are 52 Allstate brand claims with reserves in excess of $15 million as of December 31, 2022, which comprise approximately 20% of the gross ending reserves in the table above. As a result, significant developments with a single claimant can result in volatility in prior year incurred claims. Intercompany reinsurance We enter into certain intercompany insurance and reinsurance transactions in order to maintain underwriting control and manage insurance risk among various legal entities. These reinsurance agreements have been approved by the appropriate regulatory authorities. All significant intercompany transactions have been eliminated in consolidation. Catastrophe reinsurance Our catastrophe reinsurance program is designed to address our exposure to catastrophes nationwide, utilizing our risk management methodology. Our program is designed to provide reinsurance protection for catastrophes resulting from multiple perils including hurricanes, windstorms, hail, tornadoes, earthquakes, wildfires, and fires following earthquakes. These reinsurance agreements are part of our catastrophe management strategy, which is intended to provide our shareholders an acceptable return on the risks assumed in our property business, while providing protection to our customers.We anticipate completing the placement of our 2023 nationwide catastrophe reinsurance program in the first half of 2023. For further details of the existing 2022 program, see Note 11 of the consolidated financial statements. Catastrophe reinsurance Our catastrophe reinsurance program is designed to address our exposure to catastrophes nationwide, utilizing our risk management methodology. Our program is designed to provide reinsurance protection for catastrophes resulting from multiple perils including hurricanes, windstorms, hail, tornadoes, earthquakes, wildfires, and fires following earthquakes. These reinsurance agreements are part of our catastrophe management strategy, which is intended to provide our shareholders an acceptable return on the risks assumed in our property business, while providing protection to our customers. We anticipate completing the placement of our 2023 nationwide catastrophe reinsurance program in the first half of 2023. For further details of the existing 2022 program, see Note 11 of the consolidated financial statements. The Allstate Corporation 61 The Allstate Corporation 61 The Allstate Corporation 61 2022 Form 10-K Allstate Health and Benefits 2022 Form 10-K Allstate Health and Benefits" }, { "status": "REMOVED", "current_title": null, "prior_title": "Changes in DAC", "prior_body": "Amortization of DAC before amortization relating to changes in assumptions (1) Amortization relating to net gains and losses on investments and derivatives (1) Amortization acceleration for DAC unlocking (1) Effect of unrealized capital gains and losses (2) (1)Included as a component of amortization of DAC on the Consolidated Statements of Operations. (2)Represents the change in the DAC adjustment for unrealized capital gains and losses. The DAC adjustment represents the amount by which the amortization of DAC would increase or decrease if the unrealized gains and losses in the respective product portfolios were realized. Operating costs and expensesFor the years ended December 31,($ in millions)202220212020Non-deferrable commissions$321 $316 $99 General and administrative expenses493 471 223 Total operating costs and expenses$814 $787 $322" }, { "status": "REMOVED", "current_title": null, "prior_title": "Gross unrealized gains (losses) on fixed income securities by type and sector", "prior_body": "70 www.allstate.com 70 www.allstate.com 70 www.allstate.com Investments 2022 Form 10-K Investments 2022 Form 10-K Gross unrealized gains (losses) on fixed income securities by type and sectorAs of December 31, 2021Amortized costGross unrealizedFair value($ in millions)GainsLossesCorporateConsumer goods (cyclical and non-cyclical)$6,817 $176 $(42)$6,951 Banking3,975 54 (31)3,998 Utilities2,009 43 (28)2,024 Technology2,947 80 (23)3,004 Communications2,077 58 (21)2,114 Financial services1,936 41 (14)1,963 Capital goods2,615 75 (12)2,678 Basic industry1,249 56 (6)1,299 EnergyMidstream1,132 37 (4)1,165 Integrated119 6 — 125 Independent/upstream312 18 (1)329 Other224 6 (1)229 Total energy1,787 67 (6)1,848 Transportation976 35 (5)1,006 Other446 3 (4)445 Total corporate fixed income portfolio26,834 688 (192)27,330 U.S. government and agencies6,287 12 (26)6,273 Municipal6,130 279 (16)6,393 Foreign government982 9 (6)985 ABS1,143 14 (2)1,155 Total fixed income securities$41,376 $1,002 $(242)$42,136" }, { "status": "REMOVED", "current_title": null, "prior_title": "Gross unrealized gains (losses) on fixed income securities by type and sector", "prior_body": "70 www.allstate.com 70 www.allstate.com 70 www.allstate.com Investments 2022 Form 10-K Investments 2022 Form 10-K Gross unrealized gains (losses) on fixed income securities by type and sectorAs of December 31, 2021Amortized costGross unrealizedFair value($ in millions)GainsLossesCorporateConsumer goods (cyclical and non-cyclical)$6,817 $176 $(42)$6,951 Banking3,975 54 (31)3,998 Utilities2,009 43 (28)2,024 Technology2,947 80 (23)3,004 Communications2,077 58 (21)2,114 Financial services1,936 41 (14)1,963 Capital goods2,615 75 (12)2,678 Basic industry1,249 56 (6)1,299 EnergyMidstream1,132 37 (4)1,165 Integrated119 6 — 125 Independent/upstream312 18 (1)329 Other224 6 (1)229 Total energy1,787 67 (6)1,848 Transportation976 35 (5)1,006 Other446 3 (4)445 Total corporate fixed income portfolio26,834 688 (192)27,330 U.S. government and agencies6,287 12 (26)6,273 Municipal6,130 279 (16)6,393 Foreign government982 9 (6)985 ABS1,143 14 (2)1,155 Total fixed income securities$41,376 $1,002 $(242)$42,136" }, { "status": "MODIFIED", "current_title": "Business, strategy and operations", "prior_title": "Business, strategy and operations", "similarity_score": 0.919, "confidence": "high", "key_changes": [ "Reworded sentence: \"We operate in markets that are highly competitive Markets in which we operate are highly competitive, and we must continually allocate resources to refine and improve products and services to maintain our reputation, enhance brand perception, and remain competitive.\"", "Reworded sentence: \"Our ability to adequately and effectively price our products is affected by the evolving nature of consumer needs and preferences, market and regulatory dynamics, broader use of telematics-based rate segmentation and potential change in consumer demand.\"", "Reworded sentence: \"Our competitive position could be impacted if we are unable to deploy, in a cost effective and competitive manner, technology such as artificial intelligence, large language models and machine learning that collects and analyzes data to inform underwriting or other decisions, or if our competitors collect and use data which we do not have the ability to access or use.\"", "Reworded sentence: \"Changes in technology and customer preferences may impact the ways in which we interact, do business with our customers and design our products.\"", "Added sentence: \"New products and services may not be as profitable as our existing products, may not perform as well as we expect and may change our risk exposures.\"" ], "current_body": "We operate in markets that are highly competitive Markets in which we operate are highly competitive, and we must continually allocate resources to refine and improve products and services to maintain our reputation, enhance brand perception, and remain competitive. If we are unsuccessful in generating new business, retaining customers or renewing contracts, our ability to maintain or increase premiums written or the ability to sell our products could be adversely impacted. Determining competitive position is complicated in the auto and homeowners insurance business as companies use different underwriting standards to accept new customers and quotes and close rates can fluctuate across companies and locations. Pricing of products is driven by multiple factors, including loss expectations, expense structure and dissimilar return targets. Additionally, sophisticated pricing algorithms make it difficult to determine what price potential customers would pay across competitors. There is also significant competition for producers, such as exclusive and independent agents and their licensed sales professionals. Growth and retention may be materially affected if we are unable to attract and retain effective producers or if those producers are unable to attract and retain their licensed sales professionals or customers. Our ability to adequately and effectively price our products is affected by the evolving nature of consumer needs and preferences, market and regulatory dynamics, broader use of telematics-based rate segmentation and potential change in consumer demand. Many voluntary benefits contracts are renewed annually and consumer protection plan contracts are generally multi-year, but renewals occur on a rolling basis. There is a risk that employers and retailers may be able to obtain more favorable terms from competitors than they could by renewing coverage with us. These competitive pressures may adversely affect the renewal of these contracts, as well as our ability to sell products.Changing consumer preferences may adversely impact the demand for our products which may adversely impact our business Growth and retention may be impacted if customer preferences change and we are unable to effectively adapt our business model and processes, including maintaining competitive products and allowing consumers to interact with us how they choose. Our business could be impacted by our ability to attract and retain customers through distribution channels that they prefer.Our business may also be adversely impacted by new or changing technologiesTechnological changes, such as autonomous or partially autonomous vehicles or technologies that facilitate ride, car or home sharing could disrupt the demand for products from current customers, create coverage issues, impact the frequency or severity of losses, or reduce the size of the automobile insurance market causing our auto insurance business to decline. Since auto insurance constitutes a significant portion of our overall business, we may be more sensitive than other insurers and more adversely affected by trends that could decrease auto insurance rates or reduce demand for auto insurance over time.Technological advancements and innovation are occurring in distribution, underwriting, claims and operations at a rapid pace that may continue to accelerate. Nontraditional competitors could enter the insurance market and further accelerate these trends. Our competitive position could be impacted if we are unable to deploy, in a cost effective and competitive manner, technology such as artificial intelligence, large language models and machine learning that collects and analyzes data to inform underwriting or other decisions, or if our competitors collect and use data which we do not have the ability to access or use. Innovations must be implemented in compliance with applicable insurance regulations and in a responsible and compliant manner. These changes may require extensive modifications to our systems and processes and extensive coordination with and reliance on the systems and operations of third parties. If we are unable to adapt to or bring such advancements and innovations to market, the quality of our products, our relationships with customers and agents, competitive position and business prospects may be materially affected. Changes in technology related to collection and application of data regarding customers could expose us to regulatory or legal actions and may have a material adverse effect on our business, reputation, results of operations and financial condition. Changes in technology and customer preferences may impact the ways in which we interact, do business with our customers and design our products. We may not be able to respond effectively or in a timely manner to these changes, including developing and deploying customer-facing technology to address these changing preferences and maintaining competitive technology, affect the renewal of these contracts, as well as our ability to sell products. Changing consumer preferences may adversely impact the demand for our products which may adversely impact our business Growth and retention may be impacted if customer preferences change and we are unable to effectively adapt our business model and processes, including maintaining competitive products and allowing consumers to interact with us how they choose. Our business could be impacted by our ability to attract and retain customers through distribution channels that they prefer. Our business may also be adversely impacted by new or changing technologies Technological changes, such as autonomous or partially autonomous vehicles or technologies that facilitate ride, car or home sharing could disrupt the demand for products from current customers, create coverage issues, impact the frequency or severity of losses, or reduce the size of the automobile insurance market causing our auto insurance business to decline. Since auto insurance constitutes a significant portion of our overall business, we may be more sensitive than other insurers and more adversely affected by trends that could decrease auto insurance rates or reduce demand for auto insurance over time. Technological advancements and innovation are occurring in distribution, underwriting, claims and operations at a rapid pace that may continue to accelerate. Nontraditional competitors could enter the insurance market and further accelerate these trends. Our competitive position could be impacted if we are unable to deploy, in a cost effective and competitive manner, technology such as artificial intelligence, large language models and machine learning that collects and analyzes data to inform underwriting or other decisions, or if our competitors collect and use data which we do not have the ability to access or use. Innovations must be implemented in compliance with applicable insurance regulations and in a responsible and compliant manner. These changes may require extensive modifications to our systems and processes and extensive coordination with and reliance on the systems and operations of third parties. If we are unable to adapt to or bring such advancements and innovations to market, the quality of our products, our relationships with customers and agents, competitive position and business prospects may be materially affected. Changes in technology related to collection and application of data regarding customers could expose us to regulatory or legal actions and may have a material adverse effect on our business, reputation, results of operations and financial condition. Changes in technology and customer preferences may impact the ways in which we interact, do business with our customers and design our products. We may not be able to respond effectively or in a timely manner to these changes, including developing and deploying customer-facing technology to address these changing preferences and maintaining competitive technology, The Allstate Corporation 25 The Allstate Corporation 25 The Allstate Corporation 25 2023 Form 10-K Part I - Item 1A. Risk Factors and Other Disclosures 2023 Form 10-K Part I - Item 1A. Risk Factors and Other Disclosures which could have an adverse effect on our results of operations and financial condition.Executing our strategy to advance and innovate technology has and may continue to impact our workforce as we require new and different skills, particularly those in areas such as digital, data and analytics and technology to achieve our strategic goals. Advancements in technology and changes in consumer preferences may also impact our workforce needs in the future.Transformative Growth strategy implementation may not be effectiveThe Transformative Growth strategy is to accelerate growth by improving customer value, expanding customer access, increasing sophistication and investment in customer acquisition, modernizing the technology ecosystem and driving organizational transformation. Implementation is focused on the property-liability businesses and impacts all aspects of Allstate’s customer experience and business model, spanning product distribution and sales, operations and servicing, and claims processing. As part of the strategy, we have developed and continue to develop new insurance and non-insurance products and services to provide affordable, simple, and connected protection through multiple distribution channels. We have also expanded our product and service offerings through acquisitions and may continue to do so. If the strategy is not implemented effectively, customer retention and policy growth objectives could be adversely impacted. Lost business opportunities may result due to slower than anticipated speed to market. New products and services may not be as profitable as our existing products, may not perform as well as we expect and may change our risk exposures. External forces including competitor actions or regulatory changes may also have an adverse effect on the value generated from the transformation.Our catastrophe management strategy may adversely affect premium growthCatastrophe risk management actions have led us to reduce the size of our homeowners business, including customers with auto and other personal lines products and may negatively impact future sales. Adjustments to our business structure, size and underwriting practices in markets with significant severe weather and catastrophe risk exposure could adversely impact premium growth rates and retention.The ability of our subsidiaries to pay dividends may affect our liquidity and ability to meet our obligationsThe Allstate Corporation is a holding company with no significant operations. Its principal assets are the stock of its subsidiaries and its directly held cash and investment portfolios. Its liabilities include debt and pension and other postretirement benefit obligations related to employees. State insurance regulatory authorities limit the payment of dividends by insurance subsidiaries, as described in Note 17 of the consolidated financial statements. The limitations are based on statutory income and surplus. In addition, competitive pressures generally require the subsidiaries to maintain insurance financial strength ratings. These restrictions and other regulatory requirements may affect the ability of subsidiaries to make dividend payments. Limits on the ability of the subsidiaries to pay dividends could adversely affect holding company liquidity, including the ability to pay dividends to shareholders, service debt or complete share repurchase programs as planned.Changes in regulatory or rating agency capital requirements could decrease deployable capital and potentially reduce future dividends paid by our insurance companies. For a discussion of capital requirements, see Regulation section, Limitations on Dividends by Insurance Subsidiaries.Our ability to pay dividends or repurchase stock is subject to limitations under terms of certain of our securitiesThe terms of the outstanding subordinated debentures prohibit us from declaring or paying any dividends or distributions on our common or preferred stock or redeeming, purchasing, acquiring or making liquidation payments on our common stock or preferred stock if we have elected to defer interest payments on the subordinated debentures, subject to certain limited exceptions. If the full preferred stock dividends for all preceding dividend periods have not been declared and paid, we generally may not repurchase or pay dividends on common stock during any dividend period while our preferred stock is outstanding. See Note 13 of the consolidated financial statements.Reinsurance may be unavailable at current levels and prices, which may limit our ability to write new businessMarket conditions impact the availability and cost of the reinsurance we purchase. Reinsurance may not remain continuously available to us to the same extent and on the same terms and rates as were historically available or is currently available. Our ability to economically justify reinsurance to reduce our catastrophe risk in designated areas may depend on our ability to adjust premium rates to fully or partially recover cost. If we cannot maintain our current level of reinsurance or purchase new reinsurance protection in amounts we consider sufficient at acceptable prices, we would have to either accept an increase in our catastrophe exposure, reduce our insurance exposure or seek other alternatives.Unfavorable conditions in the insurance-linked securities (“ILS”) market may increase the cost to use ILS or issue new securities in amounts we consider sufficient at acceptable prices. which could have an adverse effect on our results of operations and financial condition.Executing our strategy to advance and innovate technology has and may continue to impact our workforce as we require new and different skills, particularly those in areas such as digital, data and analytics and technology to achieve our strategic goals. Advancements in technology and changes in consumer preferences may also impact our workforce needs in the future.Transformative Growth strategy implementation may not be effectiveThe Transformative Growth strategy is to accelerate growth by improving customer value, expanding customer access, increasing sophistication and investment in customer acquisition, modernizing the technology ecosystem and driving organizational transformation. Implementation is focused on the property-liability businesses and impacts all aspects of Allstate’s customer experience and business model, spanning product distribution and sales, operations and servicing, and claims processing. As part of the strategy, we have developed and continue to develop new insurance and non-insurance products and services to provide affordable, simple, and connected protection through multiple distribution channels. We have also expanded our product and service offerings through acquisitions and may continue to do so. If the strategy is not implemented effectively, customer retention and policy growth objectives could be adversely impacted. Lost business opportunities may result due to slower than anticipated speed to market. New products and services may not be as profitable as our existing products, may not perform as well as we expect and may change our risk exposures. External forces including competitor actions or regulatory changes may also have an adverse effect on the value generated from the transformation.Our catastrophe management strategy may adversely affect premium growthCatastrophe risk management actions have led us to reduce the size of our homeowners business, including customers with auto and other personal lines products and may negatively impact future sales. Adjustments to our business structure, size and underwriting practices in markets with significant severe weather and catastrophe risk exposure could adversely impact premium growth rates and retention.The ability of our subsidiaries to pay dividends may affect our liquidity and ability to meet our obligationsThe Allstate Corporation is a holding company with no significant operations. Its principal assets are the stock of its subsidiaries and its directly held cash and investment portfolios. Its liabilities include debt and pension and other postretirement benefit obligations related to employees. State insurance regulatory authorities limit the payment of dividends by insurance subsidiaries, as described in Note 17 of the consolidated financial statements. The limitations are based on statutory income and surplus. In addition, competitive pressures generally require the which could have an adverse effect on our results of operations and financial condition. Executing our strategy to advance and innovate technology has and may continue to impact our workforce as we require new and different skills, particularly those in areas such as digital, data and analytics and technology to achieve our strategic goals. Advancements in technology and changes in consumer preferences may also impact our workforce needs in the future. Transformative Growth strategy implementation may not be effective The Transformative Growth strategy is to accelerate growth by improving customer value, expanding customer access, increasing sophistication and investment in customer acquisition, modernizing the technology ecosystem and driving organizational transformation. Implementation is focused on the property-liability businesses and impacts all aspects of Allstate’s customer experience and business model, spanning product distribution and sales, operations and servicing, and claims processing. As part of the strategy, we have developed and continue to develop new insurance and non-insurance products and services to provide affordable, simple, and connected protection through multiple distribution channels. We have also expanded our product and service offerings through acquisitions and may continue to do so. If the strategy is not implemented effectively, customer retention and policy growth objectives could be adversely impacted. Lost business opportunities may result due to slower than anticipated speed to market. New products and services may not be as profitable as our existing products, may not perform as well as we expect and may change our risk exposures. External forces including competitor actions or regulatory changes may also have an adverse effect on the value generated from the transformation. Our catastrophe management strategy may adversely affect premium growth Catastrophe risk management actions have led us to reduce the size of our homeowners business, including customers with auto and other personal lines products and may negatively impact future sales. Adjustments to our business structure, size and underwriting practices in markets with significant severe weather and catastrophe risk exposure could adversely impact premium growth rates and retention. The ability of our subsidiaries to pay dividends may affect our liquidity and ability to meet our obligations The Allstate Corporation is a holding company with no significant operations. Its principal assets are the stock of its subsidiaries and its directly held cash and investment portfolios. Its liabilities include debt and pension and other postretirement benefit obligations related to employees. State insurance regulatory authorities limit the payment of dividends by insurance subsidiaries, as described in Note 17 of the consolidated financial statements. The limitations are based on statutory income and surplus. In addition, competitive pressures generally require the subsidiaries to maintain insurance financial strength ratings. These restrictions and other regulatory requirements may affect the ability of subsidiaries to make dividend payments. Limits on the ability of the subsidiaries to pay dividends could adversely affect holding company liquidity, including the ability to pay dividends to shareholders, service debt or complete share repurchase programs as planned.Changes in regulatory or rating agency capital requirements could decrease deployable capital and potentially reduce future dividends paid by our insurance companies. For a discussion of capital requirements, see Regulation section, Limitations on Dividends by Insurance Subsidiaries.Our ability to pay dividends or repurchase stock is subject to limitations under terms of certain of our securitiesThe terms of the outstanding subordinated debentures prohibit us from declaring or paying any dividends or distributions on our common or preferred stock or redeeming, purchasing, acquiring or making liquidation payments on our common stock or preferred stock if we have elected to defer interest payments on the subordinated debentures, subject to certain limited exceptions. If the full preferred stock dividends for all preceding dividend periods have not been declared and paid, we generally may not repurchase or pay dividends on common stock during any dividend period while our preferred stock is outstanding. See Note 13 of the consolidated financial statements.Reinsurance may be unavailable at current levels and prices, which may limit our ability to write new businessMarket conditions impact the availability and cost of the reinsurance we purchase. Reinsurance may not remain continuously available to us to the same extent and on the same terms and rates as were historically available or is currently available. Our ability to economically justify reinsurance to reduce our catastrophe risk in designated areas may depend on our ability to adjust premium rates to fully or partially recover cost. If we cannot maintain our current level of reinsurance or purchase new reinsurance protection in amounts we consider sufficient at acceptable prices, we would have to either accept an increase in our catastrophe exposure, reduce our insurance exposure or seek other alternatives.Unfavorable conditions in the insurance-linked securities (“ILS”) market may increase the cost to use ILS or issue new securities in amounts we consider sufficient at acceptable prices. subsidiaries to maintain insurance financial strength ratings. These restrictions and other regulatory requirements may affect the ability of subsidiaries to make dividend payments. Limits on the ability of the subsidiaries to pay dividends could adversely affect holding company liquidity, including the ability to pay dividends to shareholders, service debt or complete share repurchase programs as planned. Changes in regulatory or rating agency capital requirements could decrease deployable capital and potentially reduce future dividends paid by our insurance companies. For a discussion of capital requirements, see Regulation section, Limitations on Dividends by Insurance Subsidiaries. Our ability to pay dividends or repurchase stock is subject to limitations under terms of certain of our securities The terms of the outstanding subordinated debentures prohibit us from declaring or paying any dividends or distributions on our common or preferred stock or redeeming, purchasing, acquiring or making liquidation payments on our common stock or preferred stock if we have elected to defer interest payments on the subordinated debentures, subject to certain limited exceptions. If the full preferred stock dividends for all preceding dividend periods have not been declared and paid, we generally may not repurchase or pay dividends on common stock during any dividend period while our preferred stock is outstanding. See Note 13 of the consolidated financial statements. Reinsurance may be unavailable at current levels and prices, which may limit our ability to write new business Market conditions impact the availability and cost of the reinsurance we purchase. Reinsurance may not remain continuously available to us to the same extent and on the same terms and rates as were historically available or is currently available. Our ability to economically justify reinsurance to reduce our catastrophe risk in designated areas may depend on our ability to adjust premium rates to fully or partially recover cost. If we cannot maintain our current level of reinsurance or purchase new reinsurance protection in amounts we consider sufficient at acceptable prices, we would have to either accept an increase in our catastrophe exposure, reduce our insurance exposure or seek other alternatives. Unfavorable conditions in the insurance-linked securities (“ILS”) market may increase the cost to use ILS or issue new securities in amounts we consider sufficient at acceptable prices. 26 www.allstate.com 26 www.allstate.com 26 www.allstate.com 2023 Form 10-K Part I - Item 1A. Risk Factors and Other Disclosures 2023 Form 10-K Part I - Item 1A. Risk Factors and Other Disclosures Reinsurance subjects us to counterparty risk and may not be adequate to protect us against losses arising from ceded insuranceCollecting from reinsurers is subject to uncertainty arising from factors that include:•Whether reinsurers, their affiliates or certain indemnitors have the financial capacity and willingness to make payments under the terms of a reinsurance treaty or contract•Whether insured losses meet the qualifying conditions of the reinsurance contractOur inability to recover from a reinsurer could have a material effect on our results of operations and financial condition.Acquisitions or divestitures of businesses may not produce anticipated benefits, resulting in operating difficulties, unforeseen liabilities or asset impairmentsThe ability to achieve certain anticipated financial benefits from the acquisition of businesses depends in part on our ability to successfully grow and integrate the businesses consistent with our anticipated acquisition economics. Financial results could be adversely affected by unanticipated performance issues, unforeseen liabilities, transaction-related charges, diversion of management time and resources to acquisition integration challenges or growth strategies, loss of key employees, challenges in integrating information technology systems of acquired companies with our own, amortization of expenses related to intangibles, charges for impairment of long-term assets or goodwill and indemnifications.Acquired businesses may not perform as projected, cost savings anticipated from the acquisition may not materialize, and costs associated with the integration may be greater than anticipated. As a result, if we do not manage these integrations effectively, the quality of our products as well as our relationships with customers and partners may result in the company not achieving returns on its investment at the level projected at acquisition.We also may divest businesses from time to time. These transactions may result in continued financial involvement in the divested businesses, such as through reinsurance, guarantees or other financial arrangements, following the transaction. If the acquiring companies do not perform under the arrangements, our financial results could be negatively impacted. We may be subject to the risks and costs associated with intellectual property infringement, misappropriation and third-party claimsWe rely on a combination of contractual rights and copyright, trademark, patent and trade secret laws to establish and protect our intellectual property. Third parties may infringe or misappropriate our intellectual property. We may have to litigate to enforce and protect intellectual property and to determine its scope, validity or enforceability, which could divert significant resources and prove unsuccessful. An inability to protect intellectual property or an inability to successfully defend against a claim of intellectual property infringement could have a material effect on our business.We may be subject to claims by third parties for patent, trademark or copyright infringement or breach of usage rights. Any such claims and any resulting litigation could result in significant expense and liability. If third-party providers or we are found to have infringed a third-party intellectual property right, either of us could be enjoined from providing certain products or services or from utilizing and benefiting from certain methods, processes, copyrights, trademarks, trade secrets or licenses. Alternatively, we could be required to enter into costly licensing arrangements with third parties or implement costly work-arounds. Any of these scenarios could have a material effect on our business and results of operations.Loss of key vendor relationships, disruptions to the provision of products or services by a vendor, or failure of a vendor to provide and protect reliable data, and proprietary information, or personal information of our customers, claimants or employees could adversely affect our operationsWe rely on services and products provided by many vendors in the U.S. and abroad. These include vendors of computer hardware, software, cloud technology and software as a service, as well as vendors or outsourcing of services such as:•Claim and administrative services•Call center services for customer support•Human resource benefits management •Information technology support •Investment management services•Financial and business support servicesWe continue to identify ways to improve operating efficiency and reduce cost, which may result in additional outsourcing arrangements in the future. If we are not successful transitioning work to a vendor or a key vendor becomes unable to continue to provide products or services, fails to meet service level standards, or if any vendor fails to protect our confidential, proprietary, and other information, or if our business continuity plans do not sufficiently address a vendor-related business interruption, we may suffer operational impairments and financial losses.Our ability to attract, develop, and retain talent to maintain appropriate staffing levels and establish a successful work culture is critical to our successCompetition for qualified employees with highly specialized knowledge in areas such as underwriting, data and analytics, technology and e-commerce, is intense and we have experienced increased competition in hiring and retaining employees. The increased prevalence of remote-working arrangements that do not require employees to relocate to take a new job could contribute to higher turnover. Reinsurance subjects us to counterparty risk and may not be adequate to protect us against losses arising from ceded insuranceCollecting from reinsurers is subject to uncertainty arising from factors that include:•Whether reinsurers, their affiliates or certain indemnitors have the financial capacity and willingness to make payments under the terms of a reinsurance treaty or contract•Whether insured losses meet the qualifying conditions of the reinsurance contractOur inability to recover from a reinsurer could have a material effect on our results of operations and financial condition.Acquisitions or divestitures of businesses may not produce anticipated benefits, resulting in operating difficulties, unforeseen liabilities or asset impairmentsThe ability to achieve certain anticipated financial benefits from the acquisition of businesses depends in part on our ability to successfully grow and integrate the businesses consistent with our anticipated acquisition economics. Financial results could be adversely affected by unanticipated performance issues, unforeseen liabilities, transaction-related charges, diversion of management time and resources to acquisition integration challenges or growth strategies, loss of key employees, challenges in integrating information technology systems of acquired companies with our own, amortization of expenses related to intangibles, charges for impairment of long-term assets or goodwill and indemnifications.Acquired businesses may not perform as projected, cost savings anticipated from the acquisition may not materialize, and costs associated with the integration may be greater than anticipated. As a result, if we do not manage these integrations effectively, the quality of our products as well as our relationships with customers and partners may result in the company not achieving returns on its investment at the level projected at acquisition.We also may divest businesses from time to time. These transactions may result in continued financial involvement in the divested businesses, such as through reinsurance, guarantees or other financial arrangements, following the transaction. If the acquiring companies do not perform under the arrangements, our financial results could be negatively impacted. We may be subject to the risks and costs associated with intellectual property infringement, misappropriation and third-party claimsWe rely on a combination of contractual rights and copyright, trademark, patent and trade secret laws to establish and protect our intellectual property. Third parties may infringe or misappropriate our intellectual property. We may have to litigate to enforce and protect intellectual property and to determine its scope, validity or enforceability, which could divert significant resources and prove unsuccessful. An Reinsurance subjects us to counterparty risk and may not be adequate to protect us against losses arising from ceded insurance Collecting from reinsurers is subject to uncertainty arising from factors that include: •Whether reinsurers, their affiliates or certain indemnitors have the financial capacity and willingness to make payments under the terms of a reinsurance treaty or contract •Whether insured losses meet the qualifying conditions of the reinsurance contract Our inability to recover from a reinsurer could have a material effect on our results of operations and financial condition. Acquisitions or divestitures of businesses may not produce anticipated benefits, resulting in operating difficulties, unforeseen liabilities or asset impairments The ability to achieve certain anticipated financial benefits from the acquisition of businesses depends in part on our ability to successfully grow and integrate the businesses consistent with our anticipated acquisition economics. Financial results could be adversely affected by unanticipated performance issues, unforeseen liabilities, transaction-related charges, diversion of management time and resources to acquisition integration challenges or growth strategies, loss of key employees, challenges in integrating information technology systems of acquired companies with our own, amortization of expenses related to intangibles, charges for impairment of long-term assets or goodwill and indemnifications. Acquired businesses may not perform as projected, cost savings anticipated from the acquisition may not materialize, and costs associated with the integration may be greater than anticipated. As a result, if we do not manage these integrations effectively, the quality of our products as well as our relationships with customers and partners may result in the company not achieving returns on its investment at the level projected at acquisition. We also may divest businesses from time to time. These transactions may result in continued financial involvement in the divested businesses, such as through reinsurance, guarantees or other financial arrangements, following the transaction. If the acquiring companies do not perform under the arrangements, our financial results could be negatively impacted. We may be subject to the risks and costs associated with intellectual property infringement, misappropriation and third-party claims We rely on a combination of contractual rights and copyright, trademark, patent and trade secret laws to establish and protect our intellectual property. Third parties may infringe or misappropriate our intellectual property. We may have to litigate to enforce and protect intellectual property and to determine its scope, validity or enforceability, which could divert significant resources and prove unsuccessful. An inability to protect intellectual property or an inability to successfully defend against a claim of intellectual property infringement could have a material effect on our business.We may be subject to claims by third parties for patent, trademark or copyright infringement or breach of usage rights. Any such claims and any resulting litigation could result in significant expense and liability. If third-party providers or we are found to have infringed a third-party intellectual property right, either of us could be enjoined from providing certain products or services or from utilizing and benefiting from certain methods, processes, copyrights, trademarks, trade secrets or licenses. Alternatively, we could be required to enter into costly licensing arrangements with third parties or implement costly work-arounds. Any of these scenarios could have a material effect on our business and results of operations.Loss of key vendor relationships, disruptions to the provision of products or services by a vendor, or failure of a vendor to provide and protect reliable data, and proprietary information, or personal information of our customers, claimants or employees could adversely affect our operationsWe rely on services and products provided by many vendors in the U.S. and abroad. These include vendors of computer hardware, software, cloud technology and software as a service, as well as vendors or outsourcing of services such as:•Claim and administrative services•Call center services for customer support•Human resource benefits management •Information technology support •Investment management services•Financial and business support servicesWe continue to identify ways to improve operating efficiency and reduce cost, which may result in additional outsourcing arrangements in the future. If we are not successful transitioning work to a vendor or a key vendor becomes unable to continue to provide products or services, fails to meet service level standards, or if any vendor fails to protect our confidential, proprietary, and other information, or if our business continuity plans do not sufficiently address a vendor-related business interruption, we may suffer operational impairments and financial losses.Our ability to attract, develop, and retain talent to maintain appropriate staffing levels and establish a successful work culture is critical to our successCompetition for qualified employees with highly specialized knowledge in areas such as underwriting, data and analytics, technology and e-commerce, is intense and we have experienced increased competition in hiring and retaining employees. The increased prevalence of remote-working arrangements that do not require employees to relocate to take a new job could contribute to higher turnover. inability to protect intellectual property or an inability to successfully defend against a claim of intellectual property infringement could have a material effect on our business. We may be subject to claims by third parties for patent, trademark or copyright infringement or breach of usage rights. Any such claims and any resulting litigation could result in significant expense and liability. If third-party providers or we are found to have infringed a third-party intellectual property right, either of us could be enjoined from providing certain products or services or from utilizing and benefiting from certain methods, processes, copyrights, trademarks, trade secrets or licenses. Alternatively, we could be required to enter into costly licensing arrangements with third parties or implement costly work-arounds. Any of these scenarios could have a material effect on our business and results of operations. Loss of key vendor relationships, disruptions to the provision of products or services by a vendor, or failure of a vendor to provide and protect reliable data, and proprietary information, or personal information of our customers, claimants or employees could adversely affect our operations We rely on services and products provided by many vendors in the U.S. and abroad. These include vendors of computer hardware, software, cloud technology and software as a service, as well as vendors or outsourcing of services such as: •Claim and administrative services •Call center services for customer support •Human resource benefits management •Information technology support •Investment management services •Financial and business support services We continue to identify ways to improve operating efficiency and reduce cost, which may result in additional outsourcing arrangements in the future. If we are not successful transitioning work to a vendor or a key vendor becomes unable to continue to provide products or services, fails to meet service level standards, or if any vendor fails to protect our confidential, proprietary, and other information, or if our business continuity plans do not sufficiently address a vendor-related business interruption, we may suffer operational impairments and financial losses. Our ability to attract, develop, and retain talent to maintain appropriate staffing levels and establish a successful work culture is critical to our success Competition for qualified employees with highly specialized knowledge in areas such as underwriting, data and analytics, technology and e-commerce, is intense and we have experienced increased competition in hiring and retaining employees. The increased prevalence of remote-working arrangements that do not require employees to relocate to take a new job could contribute to higher turnover. The Allstate Corporation 27 The Allstate Corporation 27 The Allstate Corporation 27 2023 Form 10-K Part I - Item 1A. Risk Factors and Other Disclosures 2023 Form 10-K Part I - Item 1A. Risk Factors and Other Disclosures Factors that affect our ability to attract and retain such employees include:•Compensation and benefits•Training and re-skilling programs•Reputation as a successful business with a culture of fair hiring, and of training and promoting qualified employees•Recognition of and response to changing trends and other circumstances that affect employeesThe unexpected loss of key personnel could have a material adverse impact on our business because of the loss of their skills, knowledge of our products and offerings and years of industry experience and, in some cases, the difficulty of promptly finding qualified replacement personnel. Macro, regulatory and risk environmentConditions in the global economy and capital markets could adversely affect our business and results of operationsGlobal economic and capital market conditions could adversely impact demand for our products, returns on our investment portfolio and results of operations. The conditions that would have the largest impact on our business include: •Low or negative economic growth•Interest rate levels •Rising inflation increasing claims and claims expense•Substantial increases in delinquencies or defaults on debt•Significant downturns in the market value or liquidity of our investment portfolio•Prolonged downturn in equity valuations•Reduced consumer spending and business investmentStressed conditions, volatility and disruptions in global capital markets or financial asset classes could adversely affect our investment portfolio. Our assumptions about portfolio diversification may not hold across market conditions, which could lead to heightened investment losses. Capital and credit market conditions may significantly affect our ability to meet liquidity needs or obtain credit on acceptable termsIn periods of extreme volatility and disruption in the capital and credit markets, liquidity and credit capacity may be severely restricted. Our access to additional financing depends on a variety of factors such as market conditions, the general availability of credit, the overall availability of credit to our industry, our credit ratings and credit capacity, as well as lenders’ perception of our long- or short-term financial prospects. In such circumstances, our ability to obtain capital to fund operating expenses, financing costs, capital expenditures or acquisitions may be limited, and the cost of any such capital may be significant. A large-scale pandemic, the occurrence of terrorism, military actions, social unrest or other actions may have an adverse effect on our businessA large-scale pandemic, such as the Coronavirus and its impacts, the occurrence of terrorism, military actions, social unrest or other actions, may result in loss of life, property damage, and disruptions to commerce and reduced economic activity. Some of the assets in our investment portfolio may be adversely affected by declines in the equity markets, changes in interest rates, reduced liquidity and economic activity caused by a large-scale pandemic. Additionally, a large-scale pandemic or terrorist act could have a material effect on sales, liquidity and operating results.While most of the risks related to the Coronavirus have moderated, some longer-term impacts remain, such as supply chain disruptions, labor shortages, and other macroeconomic factors that have increased inflation and asset values. These factors have affected our operations and may continue to significantly affect our results of operations, financial condition and liquidity and should be considered when comparing the current period to prior periods. See MD&A, Highlights for a summary of the impacts on our operations, each of our segments and investments that may continue, emerge, evolve or accelerate into 2024.The failure in cyber or other information security controls, as well as the occurrence of events unanticipated in our disaster recovery processes and business continuity planning, could result in a loss or disclosure of confidential information, damage to our reputation, additional costs and impair our ability to conduct business effectivelyWe depend heavily on computer systems, mathematical algorithms and data to perform necessary business functions. There are threats that could impact our ability to protect our data and systems; if the threats materialize, they could impact confidentiality, integrity and availability:•Confidentiality — protecting our data from disclosure to unauthorized parties•Integrity — ensuring data is not changed accidentally or without authorization and is accurate•Availability — ensuring our data and systems are accessible to meet our business needs We collect, use, store or transmit a large amount of confidential, proprietary and other information (including personal information of customers, claimants or employees) in connection with the operation of our business. Systems are subject to increased cyberattacks and unauthorized access, such as physical and electronic break-ins or unauthorized tampering. Factors that affect our ability to attract and retain such employees include:•Compensation and benefits•Training and re-skilling programs•Reputation as a successful business with a culture of fair hiring, and of training and promoting qualified employees•Recognition of and response to changing trends and other circumstances that affect employeesThe unexpected loss of key personnel could have a material adverse impact on our business because of the loss of their skills, knowledge of our products and offerings and years of industry experience and, in some cases, the difficulty of promptly finding qualified replacement personnel. Macro, regulatory and risk environmentConditions in the global economy and capital markets could adversely affect our business and results of operationsGlobal economic and capital market conditions could adversely impact demand for our products, returns on our investment portfolio and results of operations. The conditions that would have the largest impact on our business include: •Low or negative economic growth•Interest rate levels •Rising inflation increasing claims and claims expense•Substantial increases in delinquencies or defaults on debt•Significant downturns in the market value or liquidity of our investment portfolio•Prolonged downturn in equity valuations•Reduced consumer spending and business investmentStressed conditions, volatility and disruptions in global capital markets or financial asset classes could adversely affect our investment portfolio. Our assumptions about portfolio diversification may not hold across market conditions, which could lead to heightened investment losses. Capital and credit market conditions may significantly affect our ability to meet liquidity needs or obtain credit on acceptable termsIn periods of extreme volatility and disruption in the capital and credit markets, liquidity and credit capacity may be severely restricted. Our access to additional financing depends on a variety of factors such as market conditions, the general availability of credit, the overall availability of credit to our industry, our credit ratings and credit capacity, as well as lenders’ perception of our long- or short-term financial prospects. In such circumstances, our ability to obtain capital to fund operating expenses, financing costs, Factors that affect our ability to attract and retain such employees include: •Compensation and benefits •Training and re-skilling programs •Reputation as a successful business with a culture of fair hiring, and of training and promoting qualified employees •Recognition of and response to changing trends and other circumstances that affect employees The unexpected loss of key personnel could have a material adverse impact on our business because of the loss of their skills, knowledge of our products and offerings and years of industry experience and, in some cases, the difficulty of promptly finding qualified replacement personnel.", "prior_body": "We operate in markets that are highly competitive and may be impacted by new or changing technologies Markets in which we operate are highly competitive, and we must continually allocate resources to refine and improve products and services to remain competitive. If we are unsuccessful in generating new business, retaining customers or renewing contracts, our ability to maintain or increase premiums written or the ability to sell our products could be adversely impacted. Determining competitive position is complicated in the auto and homeowners insurance business as companies use different underwriting standards to accept new customers and quotes and close rates can fluctuate across companies and locations. Pricing of products is driven by multiple factors, including loss expectations, expense structure and dissimilar return targets. Additionally, sophisticated pricing algorithms make it difficult to determine what price potential customers would pay across competitors. There is also significant competition for producers, such as exclusive and independent agents and their licensed sales professionals. Growth and retention may be materially affected if we are unable to attract and retain effective producers or if those producers are unable to attract and retain their licensed sales professionals or customers. Similarly, growth and retention may be impacted if customer preferences change and we are unable to effectively adapt our business model and processes. Our business could also be affected by technological changes, such as autonomous or partially autonomous vehicles or technologies that facilitate ride, car or home sharing. Such changes could disrupt the demand for products from current customers, create coverage issues, impact the frequency or severity of losses, or reduce the size of the automobile insurance market causing our auto insurance business to decline. Since auto insurance constitutes a significant portion of our overall business, we may be more sensitive than other insurers and more adversely affected by trends that could decrease auto insurance rates or reduce demand for auto insurance over time. Technological advancements and innovation are occurring in distribution, underwriting, claims and operations at a rapid pace that may continue to accelerate. Nontraditional competitors could enter the insurance market and further accelerate these trends. Our competitive position could be impacted if we are unable to deploy, in a cost effective and competitive manner, technology such as artificial intelligence and machine learning that collects and analyzes data to inform underwriting or other decisions, or if our competitors collect and use data which we do not have the ability to access or use. Innovations must be implemented in compliance with applicable insurance regulations and may require extensive modifications to our systems and processes and extensive coordination with and reliance on the systems and operations of third parties. If we are unable to adapt to or bring such advancements and innovations to market, the quality of our products, our relationships with customers and agents, competitive position and business prospects may be materially affected. Changes in technology related to collection and application of data regarding customers could expose us to regulatory or legal actions and may have a material adverse effect on our business, reputation, results of operations and financial condition. Technology and customer preference changes may impact the ways in which we interact, do business with our customers and design our products. We may not be able to respond effectively to these changes, which could have a material effect on our results of operations and financial condition.Our ability to adequately and effectively price our products and services is affected by the evolving nature of consumer needs and preferences, market and regulatory dynamics, broader use of telematics-based rate segmentation and potential reduction in consumer demand.Many voluntary benefits contracts are renewed annually. There is a risk that employers may be able to obtain more favorable terms from competitors than they could by renewing coverage with us. These competitive pressures may adversely affect the renewal of these contracts, as well as our ability to sell products.Transformative Growth strategy implementation may not be effectiveThe Transformative Growth strategy is to accelerate growth by improving customer value, expanding customer access, increasing customer acquisition sophistication and investment, modernizing the technology ecosystem and driving organizational transformation. The strategy encompasses all aspects of Allstate’s customer experience and business model, spanning product distribution and sales, operations and servicing, and claims processing. If the strategy is not implemented effectively, customer retention and policy growth objectives could be adversely impacted. Lost business opportunities may result due to slower than anticipated speed to market. External forces including competitor actions or regulatory changes may also have an adverse effect on the value generated from the transformation.Our catastrophe management strategy may adversely affect premium growthCatastrophe risk management actions have led us to reduce the size of our homeowners business, including customers with auto and other personal lines products and may negatively impact future sales. Adjustments to our business structure, size and inform underwriting or other decisions, or if our competitors collect and use data which we do not have the ability to access or use. Innovations must be implemented in compliance with applicable insurance regulations and may require extensive modifications to our systems and processes and extensive coordination with and reliance on the systems and operations of third parties. If we are unable to adapt to or bring such advancements and innovations to market, the quality of our products, our relationships with customers and agents, competitive position and business prospects may be materially affected. Changes in technology related to collection and application of data regarding customers could expose us to regulatory or legal actions and may have a material adverse effect on our business, reputation, results of operations and financial condition. Technology and customer preference changes may impact the ways in which we interact, do business with our customers and design our products. We may not be able to respond effectively to these changes, which could have a material effect on our results of operations and financial condition. Our ability to adequately and effectively price our products and services is affected by the evolving nature of consumer needs and preferences, market and regulatory dynamics, broader use of telematics-based rate segmentation and potential reduction in consumer demand. Many voluntary benefits contracts are renewed annually. There is a risk that employers may be able to obtain more favorable terms from competitors than they could by renewing coverage with us. These competitive pressures may adversely affect the renewal of these contracts, as well as our ability to sell products. Transformative Growth strategy implementation may not be effective The Transformative Growth strategy is to accelerate growth by improving customer value, expanding customer access, increasing customer acquisition sophistication and investment, modernizing the technology ecosystem and driving organizational transformation. The strategy encompasses all aspects of Allstate’s customer experience and business model, spanning product distribution and sales, operations and servicing, and claims processing. If the strategy is not implemented effectively, customer retention and policy growth objectives could be adversely impacted. Lost business opportunities may result due to slower than anticipated speed to market. External forces including competitor actions or regulatory changes may also have an adverse effect on the value generated from the transformation. Our catastrophe management strategy may adversely affect premium growth Catastrophe risk management actions have led us to reduce the size of our homeowners business, including customers with auto and other personal lines products and may negatively impact future sales. Adjustments to our business structure, size and The Allstate Corporation 25 The Allstate Corporation 25 The Allstate Corporation 25 2022 Form 10-K Part I - Item 1A. Risk Factors and Other Disclosures 2022 Form 10-K Part I - Item 1A. Risk Factors and Other Disclosures underwriting practices in markets with significant severe weather and catastrophe risk exposure could adversely impact premium growth rates and retention.The ability of our subsidiaries to pay dividends may affect our liquidity and ability to meet our obligationsThe Allstate Corporation is a holding company with no significant operations. Its principal assets are the stock of its subsidiaries and its directly held cash and investment portfolios. Its liabilities include debt and pension and other postretirement benefit obligations related to Allstate Insurance Company employees. State insurance regulatory authorities limit the payment of dividends by insurance subsidiaries, as described in Note 17 of the consolidated financial statements. The limitations are based on statutory income and surplus. In addition, competitive pressures generally require the subsidiaries to maintain insurance financial strength ratings. These restrictions and other regulatory requirements may affect the ability of subsidiaries to make dividend payments. Limits on the ability of the subsidiaries to pay dividends could adversely affect holding company liquidity, including the ability to pay dividends to shareholders, service debt or complete share repurchase programs as planned.Changes in regulatory or rating agency capital requirements could decrease deployable capital and potentially reduce future dividends paid by our insurance companies. For a discussion of capital requirements, including a change to a group capital calculation, see Regulation section, Limitations on Dividends by Insurance Subsidiaries.Our ability to pay dividends or repurchase stock is subject to limitations under terms of certain of our securitiesThe terms of the outstanding subordinated debentures prohibit us from declaring or paying any dividends or distributions on our common or preferred stock or redeeming, purchasing, acquiring or making liquidation payments on our common stock or preferred stock if we have elected to defer interest payments on the subordinated debentures, subject to certain limited exceptions.We are prohibited from declaring or paying dividends on our Series G preferred stock if we fail to meet specified capital adequacy, net income or shareholders’ equity levels. The prohibition is subject to an exception permitting us to declare dividends out of the net proceeds of common stock issued by us during the 90 days before the date of declaration even if we fail to meet such levels. If the full preferred stock dividends for all preceding dividend periods have not been declared and paid, we generally may not repurchase or pay dividends on common stock during any dividend period while our preferred stock is outstanding. See Note 13 of the consolidated financial statements.Reinsurance may be unavailable at current levels and prices, which may limit our ability to write new businessMarket conditions impact the availability and cost of the reinsurance we purchase. Reinsurance may not remain continuously available to us to the same extent and on the same terms and rates as is currently available. Our ability to economically justify reinsurance to reduce our catastrophe risk in designated areas may depend on our ability to adjust premium rates to fully or partially recover cost. If we cannot maintain our current level of reinsurance or purchase new reinsurance protection in amounts we consider sufficient at acceptable prices, we would have to either accept an increase in our catastrophe exposure, reduce our insurance exposure or seek other alternatives.Reinsurance subjects us to counterparty risk and may not be adequate to protect us against losses arising from ceded insuranceCollecting from reinsurers is subject to uncertainty arising from factors that include:•Whether reinsurers, their affiliates or certain indemnitors have the financial capacity and willingness to make payments under the terms of a reinsurance treaty or contract•Whether insured losses meet the qualifying conditions of the reinsurance contractOur inability to recover from a reinsurer could have a material effect on our results of operations and financial condition.Disruption, volatility or uncertainty in the insurance-linked securities market may decrease our ability to access such market on favorable terms or at all.Acquisitions or divestitures of businesses may not produce anticipated benefits, resulting in operating difficulties, unforeseen liabilities or asset impairmentsThe ability to achieve certain anticipated financial benefits from the acquisition of businesses depends in part on our ability to successfully grow and integrate the businesses consistent with our anticipated acquisition economics. Financial results could be adversely affected by unanticipated performance issues, unforeseen liabilities, transaction-related charges, diversion of management time and resources to acquisition integration challenges or growth strategies, loss of key employees, challenges in integrating information technology systems of acquired companies with our own, amortization of expenses related to intangibles, charges for impairment of long-term assets or goodwill and indemnifications.Acquired businesses may not perform as projected, cost savings anticipated from the acquisition may not materialize, and costs associated with the integration may be greater than anticipated. As a result, if we do not manage these integrations effectively, the quality of our products as well as our relationships with customers and partners may result in the company not achieving returns on its investment at the level projected at acquisition. underwriting practices in markets with significant severe weather and catastrophe risk exposure could adversely impact premium growth rates and retention.The ability of our subsidiaries to pay dividends may affect our liquidity and ability to meet our obligationsThe Allstate Corporation is a holding company with no significant operations. Its principal assets are the stock of its subsidiaries and its directly held cash and investment portfolios. Its liabilities include debt and pension and other postretirement benefit obligations related to Allstate Insurance Company employees. State insurance regulatory authorities limit the payment of dividends by insurance subsidiaries, as described in Note 17 of the consolidated financial statements. The limitations are based on statutory income and surplus. In addition, competitive pressures generally require the subsidiaries to maintain insurance financial strength ratings. These restrictions and other regulatory requirements may affect the ability of subsidiaries to make dividend payments. Limits on the ability of the subsidiaries to pay dividends could adversely affect holding company liquidity, including the ability to pay dividends to shareholders, service debt or complete share repurchase programs as planned.Changes in regulatory or rating agency capital requirements could decrease deployable capital and potentially reduce future dividends paid by our insurance companies. For a discussion of capital requirements, including a change to a group capital calculation, see Regulation section, Limitations on Dividends by Insurance Subsidiaries.Our ability to pay dividends or repurchase stock is subject to limitations under terms of certain of our securitiesThe terms of the outstanding subordinated debentures prohibit us from declaring or paying any dividends or distributions on our common or preferred stock or redeeming, purchasing, acquiring or making liquidation payments on our common stock or preferred stock if we have elected to defer interest payments on the subordinated debentures, subject to certain limited exceptions.We are prohibited from declaring or paying dividends on our Series G preferred stock if we fail to meet specified capital adequacy, net income or shareholders’ equity levels. The prohibition is subject to an exception permitting us to declare dividends out of the net proceeds of common stock issued by us during the 90 days before the date of declaration even if we fail to meet such levels. If the full preferred stock dividends for all preceding dividend periods have not been declared and paid, we generally may not repurchase or pay dividends on common stock during any dividend period while our preferred stock is outstanding. See Note 13 of the consolidated financial statements. underwriting practices in markets with significant severe weather and catastrophe risk exposure could adversely impact premium growth rates and retention. The ability of our subsidiaries to pay dividends may affect our liquidity and ability to meet our obligations The Allstate Corporation is a holding company with no significant operations. Its principal assets are the stock of its subsidiaries and its directly held cash and investment portfolios. Its liabilities include debt and pension and other postretirement benefit obligations related to Allstate Insurance Company employees. State insurance regulatory authorities limit the payment of dividends by insurance subsidiaries, as described in Note 17 of the consolidated financial statements. The limitations are based on statutory income and surplus. In addition, competitive pressures generally require the subsidiaries to maintain insurance financial strength ratings. These restrictions and other regulatory requirements may affect the ability of subsidiaries to make dividend payments. Limits on the ability of the subsidiaries to pay dividends could adversely affect holding company liquidity, including the ability to pay dividends to shareholders, service debt or complete share repurchase programs as planned. Changes in regulatory or rating agency capital requirements could decrease deployable capital and potentially reduce future dividends paid by our insurance companies. For a discussion of capital requirements, including a change to a group capital calculation, see Regulation section, Limitations on Dividends by Insurance Subsidiaries. Our ability to pay dividends or repurchase stock is subject to limitations under terms of certain of our securities The terms of the outstanding subordinated debentures prohibit us from declaring or paying any dividends or distributions on our common or preferred stock or redeeming, purchasing, acquiring or making liquidation payments on our common stock or preferred stock if we have elected to defer interest payments on the subordinated debentures, subject to certain limited exceptions. We are prohibited from declaring or paying dividends on our Series G preferred stock if we fail to meet specified capital adequacy, net income or shareholders’ equity levels. The prohibition is subject to an exception permitting us to declare dividends out of the net proceeds of common stock issued by us during the 90 days before the date of declaration even if we fail to meet such levels. If the full preferred stock dividends for all preceding dividend periods have not been declared and paid, we generally may not repurchase or pay dividends on common stock during any dividend period while our preferred stock is outstanding. See Note 13 of the consolidated financial statements. Reinsurance may be unavailable at current levels and prices, which may limit our ability to write new businessMarket conditions impact the availability and cost of the reinsurance we purchase. Reinsurance may not remain continuously available to us to the same extent and on the same terms and rates as is currently available. Our ability to economically justify reinsurance to reduce our catastrophe risk in designated areas may depend on our ability to adjust premium rates to fully or partially recover cost. If we cannot maintain our current level of reinsurance or purchase new reinsurance protection in amounts we consider sufficient at acceptable prices, we would have to either accept an increase in our catastrophe exposure, reduce our insurance exposure or seek other alternatives.Reinsurance subjects us to counterparty risk and may not be adequate to protect us against losses arising from ceded insuranceCollecting from reinsurers is subject to uncertainty arising from factors that include:•Whether reinsurers, their affiliates or certain indemnitors have the financial capacity and willingness to make payments under the terms of a reinsurance treaty or contract•Whether insured losses meet the qualifying conditions of the reinsurance contractOur inability to recover from a reinsurer could have a material effect on our results of operations and financial condition.Disruption, volatility or uncertainty in the insurance-linked securities market may decrease our ability to access such market on favorable terms or at all.Acquisitions or divestitures of businesses may not produce anticipated benefits, resulting in operating difficulties, unforeseen liabilities or asset impairmentsThe ability to achieve certain anticipated financial benefits from the acquisition of businesses depends in part on our ability to successfully grow and integrate the businesses consistent with our anticipated acquisition economics. Financial results could be adversely affected by unanticipated performance issues, unforeseen liabilities, transaction-related charges, diversion of management time and resources to acquisition integration challenges or growth strategies, loss of key employees, challenges in integrating information technology systems of acquired companies with our own, amortization of expenses related to intangibles, charges for impairment of long-term assets or goodwill and indemnifications.Acquired businesses may not perform as projected, cost savings anticipated from the acquisition may not materialize, and costs associated with the integration may be greater than anticipated. As a result, if we do not manage these integrations effectively, the quality of our products as well as our relationships with customers and partners may result in the company not achieving returns on its investment at the level projected at acquisition. Reinsurance may be unavailable at current levels and prices, which may limit our ability to write new business Market conditions impact the availability and cost of the reinsurance we purchase. Reinsurance may not remain continuously available to us to the same extent and on the same terms and rates as is currently available. Our ability to economically justify reinsurance to reduce our catastrophe risk in designated areas may depend on our ability to adjust premium rates to fully or partially recover cost. If we cannot maintain our current level of reinsurance or purchase new reinsurance protection in amounts we consider sufficient at acceptable prices, we would have to either accept an increase in our catastrophe exposure, reduce our insurance exposure or seek other alternatives. Reinsurance subjects us to counterparty risk and may not be adequate to protect us against losses arising from ceded insurance Collecting from reinsurers is subject to uncertainty arising from factors that include: •Whether reinsurers, their affiliates or certain indemnitors have the financial capacity and willingness to make payments under the terms of a reinsurance treaty or contract •Whether insured losses meet the qualifying conditions of the reinsurance contract Our inability to recover from a reinsurer could have a material effect on our results of operations and financial condition. Disruption, volatility or uncertainty in the insurance-linked securities market may decrease our ability to access such market on favorable terms or at all. Acquisitions or divestitures of businesses may not produce anticipated benefits, resulting in operating difficulties, unforeseen liabilities or asset impairments The ability to achieve certain anticipated financial benefits from the acquisition of businesses depends in part on our ability to successfully grow and integrate the businesses consistent with our anticipated acquisition economics. Financial results could be adversely affected by unanticipated performance issues, unforeseen liabilities, transaction-related charges, diversion of management time and resources to acquisition integration challenges or growth strategies, loss of key employees, challenges in integrating information technology systems of acquired companies with our own, amortization of expenses related to intangibles, charges for impairment of long-term assets or goodwill and indemnifications. Acquired businesses may not perform as projected, cost savings anticipated from the acquisition may not materialize, and costs associated with the integration may be greater than anticipated. As a result, if we do not manage these integrations effectively, the quality of our products as well as our relationships with customers and partners may result in the company not achieving returns on its investment at the level projected at acquisition. 26 www.allstate.com 26 www.allstate.com 26 www.allstate.com Part I - Item 1A. Risk Factors and Other Disclosures 2022 Form 10-K Part I - Item 1A. Risk Factors and Other Disclosures 2022 Form 10-K We also may divest businesses from time to time. These transactions may result in continued financial involvement in the divested businesses, such as through reinsurance, guarantees or other financial arrangements, following the transaction. If the acquiring companies do not perform under the arrangements, our financial results could be negatively impacted. We may be subject to the risks and costs associated with intellectual property infringement, misappropriation and third-party claimsWe rely on a combination of contractual rights and copyright, trademark, patent and trade secret laws to establish and protect our intellectual property. Third parties may infringe or misappropriate our intellectual property. We may have to litigate to enforce and protect intellectual property and to determine its scope, validity or enforceability, which could divert significant resources and prove unsuccessful. An inability to protect intellectual property or an inability to successfully defend against a claim of intellectual property infringement could have a material effect on our business.We may be subject to claims by third parties for patent, trademark or copyright infringement or breach of usage rights. Any such claims and any resulting litigation could result in significant expense and liability. If third-party providers or we are found to have infringed a third-party intellectual property right, either of us could be enjoined from providing certain products or services or from utilizing and benefiting from certain methods, processes, copyrights, trademarks, trade secrets or licenses. Alternatively, we could be required to enter into costly licensing arrangements with third parties or implement costly work-arounds. Any of these scenarios could have a material effect on our business and results of operations.Macro, regulatory and risk environmentConditions in the global economy and capital markets could continue to adversely affect our business and results of operationsGlobal economic and capital market conditions could continue to adversely impact demand for our products, returns on our investment portfolio and results of operations. The conditions that would have the largest impact on our business include: •Low or negative economic growth•Interest rate levels •Rising inflation increasing claims and claims expense•Substantial increases in delinquencies or defaults on debt•Significant downturns in the market value or liquidity of our investment portfolio•Prolonged downturn in equity valuations•Reduced consumer spending and business investmentStressed conditions, volatility and disruptions in global capital markets or financial asset classes could adversely affect our investment portfolio. Our assumptions about portfolio diversification may not hold across market conditions, which could lead to heightened investment losses. Capital and credit market conditions may significantly affect our ability to meet liquidity needs or obtain credit on acceptable termsIn periods of extreme volatility and disruption in the capital and credit markets, liquidity and credit capacity may be severely restricted. Our access to additional financing depends on a variety of factors such as market conditions, the general availability of credit, the overall availability of credit to our industry, our credit ratings and credit capacity, as well as lenders’ perception of our long- or short-term financial prospects. In such circumstances, our ability to obtain capital to fund operating expenses, financing costs, capital expenditures or acquisitions may be limited, and the cost of any such capital may be significant. A large-scale pandemic, the occurrence of terrorism, military actions, social unrest or other actions may have an adverse effect on our businessA large-scale pandemic, such as the Coronavirus and its impacts, the occurrence of terrorism, military actions, social unrest or other actions, may result in loss of life, property damage, and disruptions to commerce and reduced economic activity. Some of the assets in our investment portfolio may be adversely affected by declines in the equity markets, changes in interest rates, reduced liquidity and economic activity caused by a large-scale pandemic. Additionally, a large-scale pandemic or terrorist act could have a material effect on sales, liquidity and operating results.The Coronavirus resulted in governments worldwide enacting emergency measures to combat the spread of the virus, including travel restrictions, government-imposed shelter-in-place orders, quarantine periods, social distancing, and restrictions on large gatherings. These measures have moderated, but new variants of the Coronavirus could result in further economic volatility. We continue to closely monitor and proactively adapt to developments and changing conditions. Currently, it is not possible to reliably estimate the impact to our operations, but the effects have been and could be material. The Coronavirus has affected our operations and may continue to significantly affect our results of operations, financial condition and liquidity. The impact from the pandemic should be considered when comparing the current period to prior periods, including:•Sales of new and retention of existing policies•Rate changes and average gross premiums•Supply chain disruptions and labor shortages increase the cost of settling claims We also may divest businesses from time to time. These transactions may result in continued financial involvement in the divested businesses, such as through reinsurance, guarantees or other financial arrangements, following the transaction. If the acquiring companies do not perform under the arrangements, our financial results could be negatively impacted. We may be subject to the risks and costs associated with intellectual property infringement, misappropriation and third-party claimsWe rely on a combination of contractual rights and copyright, trademark, patent and trade secret laws to establish and protect our intellectual property. Third parties may infringe or misappropriate our intellectual property. We may have to litigate to enforce and protect intellectual property and to determine its scope, validity or enforceability, which could divert significant resources and prove unsuccessful. An inability to protect intellectual property or an inability to successfully defend against a claim of intellectual property infringement could have a material effect on our business.We may be subject to claims by third parties for patent, trademark or copyright infringement or breach of usage rights. Any such claims and any resulting litigation could result in significant expense and liability. If third-party providers or we are found to have infringed a third-party intellectual property right, either of us could be enjoined from providing certain products or services or from utilizing and benefiting from certain methods, processes, copyrights, trademarks, trade secrets or licenses. Alternatively, we could be required to enter into costly licensing arrangements with third parties or implement costly work-arounds. Any of these scenarios could have a material effect on our business and results of operations.Macro, regulatory and risk environmentConditions in the global economy and capital markets could continue to adversely affect our business and results of operationsGlobal economic and capital market conditions could continue to adversely impact demand for our products, returns on our investment portfolio and results of operations. The conditions that would have the largest impact on our business include: •Low or negative economic growth•Interest rate levels •Rising inflation increasing claims and claims expense•Substantial increases in delinquencies or defaults on debt•Significant downturns in the market value or liquidity of our investment portfolio•Prolonged downturn in equity valuations We also may divest businesses from time to time. These transactions may result in continued financial involvement in the divested businesses, such as through reinsurance, guarantees or other financial arrangements, following the transaction. If the acquiring companies do not perform under the arrangements, our financial results could be negatively impacted. We may be subject to the risks and costs associated with intellectual property infringement, misappropriation and third-party claims We rely on a combination of contractual rights and copyright, trademark, patent and trade secret laws to establish and protect our intellectual property. Third parties may infringe or misappropriate our intellectual property. We may have to litigate to enforce and protect intellectual property and to determine its scope, validity or enforceability, which could divert significant resources and prove unsuccessful. An inability to protect intellectual property or an inability to successfully defend against a claim of intellectual property infringement could have a material effect on our business. We may be subject to claims by third parties for patent, trademark or copyright infringement or breach of usage rights. Any such claims and any resulting litigation could result in significant expense and liability. If third-party providers or we are found to have infringed a third-party intellectual property right, either of us could be enjoined from providing certain products or services or from utilizing and benefiting from certain methods, processes, copyrights, trademarks, trade secrets or licenses. Alternatively, we could be required to enter into costly licensing arrangements with third parties or implement costly work-arounds. Any of these scenarios could have a material effect on our business and results of operations." }, { "status": "MODIFIED", "current_title": "Macro, regulatory and risk environment", "prior_title": "Macro, regulatory and risk environment", "similarity_score": 0.915, "confidence": "high", "key_changes": [ "Reworded sentence: \"Conditions in the global economy and capital markets could adversely affect our business and results of operations Global economic and capital market conditions could adversely impact demand for our products, returns on our investment portfolio and results of operations.\"", "Reworded sentence: \"Capital and credit market conditions may significantly affect our ability to meet liquidity needs or obtain credit on acceptable terms In periods of extreme volatility and disruption in the capital and credit markets, liquidity and credit capacity may be severely restricted.\"", "Reworded sentence: \"Additionally, a large-scale pandemic or terrorist act could have a material effect on sales, liquidity and operating results.While most of the risks related to the Coronavirus have moderated, some longer-term impacts remain, such as supply chain disruptions, labor shortages, and other macroeconomic factors that have increased inflation and asset values.\"", "Reworded sentence: \"While most of the risks related to the Coronavirus have moderated, some longer-term impacts remain, such as supply chain disruptions, labor shortages, and other macroeconomic factors that have increased inflation and asset values.\"", "Reworded sentence: \"Our integrated operational risk and return management processes and practices may not be sufficient to timely detect and mitigate operational risks, including those posed by third-party service providers, that could have an adverse effect on our reputation and business.\"" ], "current_body": "Conditions in the global economy and capital markets could adversely affect our business and results of operations Global economic and capital market conditions could adversely impact demand for our products, returns on our investment portfolio and results of operations. The conditions that would have the largest impact on our business include: •Low or negative economic growth •Interest rate levels •Rising inflation increasing claims and claims expense •Substantial increases in delinquencies or defaults on debt •Significant downturns in the market value or liquidity of our investment portfolio •Prolonged downturn in equity valuations •Reduced consumer spending and business investment Stressed conditions, volatility and disruptions in global capital markets or financial asset classes could adversely affect our investment portfolio. Our assumptions about portfolio diversification may not hold across market conditions, which could lead to heightened investment losses. Capital and credit market conditions may significantly affect our ability to meet liquidity needs or obtain credit on acceptable terms In periods of extreme volatility and disruption in the capital and credit markets, liquidity and credit capacity may be severely restricted. Our access to additional financing depends on a variety of factors such as market conditions, the general availability of credit, the overall availability of credit to our industry, our credit ratings and credit capacity, as well as lenders’ perception of our long- or short-term financial prospects. In such circumstances, our ability to obtain capital to fund operating expenses, financing costs, capital expenditures or acquisitions may be limited, and the cost of any such capital may be significant. A large-scale pandemic, the occurrence of terrorism, military actions, social unrest or other actions may have an adverse effect on our businessA large-scale pandemic, such as the Coronavirus and its impacts, the occurrence of terrorism, military actions, social unrest or other actions, may result in loss of life, property damage, and disruptions to commerce and reduced economic activity. Some of the assets in our investment portfolio may be adversely affected by declines in the equity markets, changes in interest rates, reduced liquidity and economic activity caused by a large-scale pandemic. Additionally, a large-scale pandemic or terrorist act could have a material effect on sales, liquidity and operating results.While most of the risks related to the Coronavirus have moderated, some longer-term impacts remain, such as supply chain disruptions, labor shortages, and other macroeconomic factors that have increased inflation and asset values. These factors have affected our operations and may continue to significantly affect our results of operations, financial condition and liquidity and should be considered when comparing the current period to prior periods. See MD&A, Highlights for a summary of the impacts on our operations, each of our segments and investments that may continue, emerge, evolve or accelerate into 2024.The failure in cyber or other information security controls, as well as the occurrence of events unanticipated in our disaster recovery processes and business continuity planning, could result in a loss or disclosure of confidential information, damage to our reputation, additional costs and impair our ability to conduct business effectivelyWe depend heavily on computer systems, mathematical algorithms and data to perform necessary business functions. There are threats that could impact our ability to protect our data and systems; if the threats materialize, they could impact confidentiality, integrity and availability:•Confidentiality — protecting our data from disclosure to unauthorized parties•Integrity — ensuring data is not changed accidentally or without authorization and is accurate•Availability — ensuring our data and systems are accessible to meet our business needs We collect, use, store or transmit a large amount of confidential, proprietary and other information (including personal information of customers, claimants or employees) in connection with the operation of our business. Systems are subject to increased cyberattacks and unauthorized access, such as physical and electronic break-ins or unauthorized tampering. capital expenditures or acquisitions may be limited, and the cost of any such capital may be significant. A large-scale pandemic, the occurrence of terrorism, military actions, social unrest or other actions may have an adverse effect on our business A large-scale pandemic, such as the Coronavirus and its impacts, the occurrence of terrorism, military actions, social unrest or other actions, may result in loss of life, property damage, and disruptions to commerce and reduced economic activity. Some of the assets in our investment portfolio may be adversely affected by declines in the equity markets, changes in interest rates, reduced liquidity and economic activity caused by a large-scale pandemic. Additionally, a large-scale pandemic or terrorist act could have a material effect on sales, liquidity and operating results. While most of the risks related to the Coronavirus have moderated, some longer-term impacts remain, such as supply chain disruptions, labor shortages, and other macroeconomic factors that have increased inflation and asset values. These factors have affected our operations and may continue to significantly affect our results of operations, financial condition and liquidity and should be considered when comparing the current period to prior periods. See MD&A, Highlights for a summary of the impacts on our operations, each of our segments and investments that may continue, emerge, evolve or accelerate into 2024. The failure in cyber or other information security controls, as well as the occurrence of events unanticipated in our disaster recovery processes and business continuity planning, could result in a loss or disclosure of confidential information, damage to our reputation, additional costs and impair our ability to conduct business effectively We depend heavily on computer systems, mathematical algorithms and data to perform necessary business functions. There are threats that could impact our ability to protect our data and systems; if the threats materialize, they could impact confidentiality, integrity and availability: •Confidentiality — protecting our data from disclosure to unauthorized parties •Integrity — ensuring data is not changed accidentally or without authorization and is accurate •Availability — ensuring our data and systems are accessible to meet our business needs We collect, use, store or transmit a large amount of confidential, proprietary and other information (including personal information of customers, claimants or employees) in connection with the operation of our business. Systems are subject to increased cyberattacks and unauthorized access, such as physical and electronic break-ins or unauthorized tampering. 28 www.allstate.com 28 www.allstate.com 28 www.allstate.com 2023 Form 10-K Part I - Item 1A. Risk Factors and Other Disclosures 2023 Form 10-K Part I - Item 1A. Risk Factors and Other Disclosures We constantly defend against threats to our data and systems, including malware and computer virus attacks, unauthorized access, system failures and disruptions. We have experienced breaches of our data and systems, although to date none of these breaches has had a material effect on our business, operations or reputation. Events like these jeopardize the information processed and stored in, and transmitted through, our computer systems and networks and otherwise cause interruptions or malfunctions in our operations, which could result in damage to our reputation, financial losses, litigation, increased costs, regulatory penalties or customer dissatisfaction.These risks may increase in the future as threats become more sophisticated and we continue to expand internet and mobile strategies, develop additional remote connectivity solutions to serve our employees and customers, develop and expand products and services designed to protect customers’ digital footprint, and build and maintain an integrated digital enterprise.Our increased use of third-party services (e.g., cloud technology and software as a service) can make it more difficult to identify and respond to cyberattacks in any of the above situations. Although we may review and assess third-party vendor cyber security controls, our efforts may not be successful in preventing or mitigating the effects of such events. Third parties to whom we outsource certain functions are also subject to cybersecurity risks. Personal information is subject to an increasing number of federal, state, local and international laws and regulations regarding privacy and data security, as well as contractual commitments. Any failure or perceived failure by us to comply with such obligations may result in governmental enforcement actions and fines, litigation or public statements against us by consumer advocacy groups or others and could cause our employees and customers to lose trust in us, which could have an adverse effect on our reputation and business. Our integrated operational risk and return management processes and practices may not be sufficient to timely detect and mitigate operational risks, including those posed by third-party service providers, that could have an adverse effect on our reputation and business. See the Regulation section, Privacy Regulation and Data Security, for additional information.The occurrence of a disaster or event that results in the shut-down, disruption, degradation or unavailability of one or more of our systems or facilities, unanticipated problems with our disaster recovery processes, or a support failure from external providers, could have an adverse effect on our ability to conduct business and on our results of operations and financial condition, particularly if those events affect our computer-based data processing, transmission, storage, and retrieval systems or destroy data. If a significant number of employees were unavailable or unable to access our systems in the event of a disaster, our ability to effectively conduct business could be severely compromised.Losses from changing climate and weather conditions may adversely affect our financial condition, profitability or cash flowsClimate change affects the occurrence of certain natural events, such as increasing the frequency or severity of wind, tornado, hailstorm and thunderstorm events due to increased convection in the atmosphere. There could also be more frequent wildfires in certain geographies, more flooding and the potential for increased severity of hurricanes. As a result, incurred losses from such events and the demand, price and availability of reinsurance coverages for automobile and homeowners insurance may be affected.Climate change may also impact insurability by impairing our ability to identify and quantify potential hazards that will result in losses and offer our customers products at an affordable price. Our investment portfolio is also subject to the effects of climate change as economic shifts alter the return dynamic of long-term investments and increase valuation risk.Due to significant variability associated with future changing climate conditions, we are unable to predict the impact climate change will have on our businesses.Our efforts to meet evolving environmental, social, and governance standards may not meet stakeholders' expectationsSome of our existing or potential investors, customers, employees, regulators, and other stakeholders evaluate our business practices according to a variety of environmental, social and governance (“ESG”) standards and expectations, including those related to climate change, inclusive diversity and equity, data privacy, and the well-being of our employees. Some regulators have proposed or adopted, or may propose or adopt, pro- or anti-ESG rules or standards applicable to our business.Our business practices and disclosures are evaluated against ESG standards which are continually evolving and not always well defined or readily measurable today. ESG-related expectations may also reflect contrasting or conflicting values or agendas. Our practices may not change in the particular ways or at the rate stakeholders expect. We may fail to meet our commitments or targets. Our policies and processes to evaluate and manage ESG priorities in coordination with other business priorities may not prove completely effective or fully satisfy our stakeholders. Customers and potential customers may choose not to do business with us based on our ESG practices and related policies and actions. We may face adverse regulatory, investor, media, or public scrutiny leading to business, reputational, or legal challenges. We constantly defend against threats to our data and systems, including malware and computer virus attacks, unauthorized access, system failures and disruptions. We have experienced breaches of our data and systems, although to date none of these breaches has had a material effect on our business, operations or reputation. Events like these jeopardize the information processed and stored in, and transmitted through, our computer systems and networks and otherwise cause interruptions or malfunctions in our operations, which could result in damage to our reputation, financial losses, litigation, increased costs, regulatory penalties or customer dissatisfaction.These risks may increase in the future as threats become more sophisticated and we continue to expand internet and mobile strategies, develop additional remote connectivity solutions to serve our employees and customers, develop and expand products and services designed to protect customers’ digital footprint, and build and maintain an integrated digital enterprise.Our increased use of third-party services (e.g., cloud technology and software as a service) can make it more difficult to identify and respond to cyberattacks in any of the above situations. Although we may review and assess third-party vendor cyber security controls, our efforts may not be successful in preventing or mitigating the effects of such events. Third parties to whom we outsource certain functions are also subject to cybersecurity risks. Personal information is subject to an increasing number of federal, state, local and international laws and regulations regarding privacy and data security, as well as contractual commitments. Any failure or perceived failure by us to comply with such obligations may result in governmental enforcement actions and fines, litigation or public statements against us by consumer advocacy groups or others and could cause our employees and customers to lose trust in us, which could have an adverse effect on our reputation and business. Our integrated operational risk and return management processes and practices may not be sufficient to timely detect and mitigate operational risks, including those posed by third-party service providers, that could have an adverse effect on our reputation and business. See the Regulation section, Privacy Regulation and Data Security, for additional information.The occurrence of a disaster or event that results in the shut-down, disruption, degradation or unavailability of one or more of our systems or facilities, unanticipated problems with our disaster recovery processes, or a support failure from external providers, could have an adverse effect on our ability to conduct business and on our results of operations and financial condition, particularly if those events affect our computer-based data processing, transmission, storage, and retrieval systems or destroy data. If a significant number of employees were unavailable or unable to access our systems in the We constantly defend against threats to our data and systems, including malware and computer virus attacks, unauthorized access, system failures and disruptions. We have experienced breaches of our data and systems, although to date none of these breaches has had a material effect on our business, operations or reputation. Events like these jeopardize the information processed and stored in, and transmitted through, our computer systems and networks and otherwise cause interruptions or malfunctions in our operations, which could result in damage to our reputation, financial losses, litigation, increased costs, regulatory penalties or customer dissatisfaction. These risks may increase in the future as threats become more sophisticated and we continue to expand internet and mobile strategies, develop additional remote connectivity solutions to serve our employees and customers, develop and expand products and services designed to protect customers’ digital footprint, and build and maintain an integrated digital enterprise. Our increased use of third-party services (e.g., cloud technology and software as a service) can make it more difficult to identify and respond to cyberattacks in any of the above situations. Although we may review and assess third-party vendor cyber security controls, our efforts may not be successful in preventing or mitigating the effects of such events. Third parties to whom we outsource certain functions are also subject to cybersecurity risks. Personal information is subject to an increasing number of federal, state, local and international laws and regulations regarding privacy and data security, as well as contractual commitments. Any failure or perceived failure by us to comply with such obligations may result in governmental enforcement actions and fines, litigation or public statements against us by consumer advocacy groups or others and could cause our employees and customers to lose trust in us, which could have an adverse effect on our reputation and business. Our integrated operational risk and return management processes and practices may not be sufficient to timely detect and mitigate operational risks, including those posed by third-party service providers, that could have an adverse effect on our reputation and business. See the Regulation section, Privacy Regulation and Data Security, for additional information. The occurrence of a disaster or event that results in the shut-down, disruption, degradation or unavailability of one or more of our systems or facilities, unanticipated problems with our disaster recovery processes, or a support failure from external providers, could have an adverse effect on our ability to conduct business and on our results of operations and financial condition, particularly if those events affect our computer-based data processing, transmission, storage, and retrieval systems or destroy data. If a significant number of employees were unavailable or unable to access our systems in the event of a disaster, our ability to effectively conduct business could be severely compromised.Losses from changing climate and weather conditions may adversely affect our financial condition, profitability or cash flowsClimate change affects the occurrence of certain natural events, such as increasing the frequency or severity of wind, tornado, hailstorm and thunderstorm events due to increased convection in the atmosphere. There could also be more frequent wildfires in certain geographies, more flooding and the potential for increased severity of hurricanes. As a result, incurred losses from such events and the demand, price and availability of reinsurance coverages for automobile and homeowners insurance may be affected.Climate change may also impact insurability by impairing our ability to identify and quantify potential hazards that will result in losses and offer our customers products at an affordable price. Our investment portfolio is also subject to the effects of climate change as economic shifts alter the return dynamic of long-term investments and increase valuation risk.Due to significant variability associated with future changing climate conditions, we are unable to predict the impact climate change will have on our businesses.Our efforts to meet evolving environmental, social, and governance standards may not meet stakeholders' expectationsSome of our existing or potential investors, customers, employees, regulators, and other stakeholders evaluate our business practices according to a variety of environmental, social and governance (“ESG”) standards and expectations, including those related to climate change, inclusive diversity and equity, data privacy, and the well-being of our employees. Some regulators have proposed or adopted, or may propose or adopt, pro- or anti-ESG rules or standards applicable to our business.Our business practices and disclosures are evaluated against ESG standards which are continually evolving and not always well defined or readily measurable today. ESG-related expectations may also reflect contrasting or conflicting values or agendas. Our practices may not change in the particular ways or at the rate stakeholders expect. We may fail to meet our commitments or targets. Our policies and processes to evaluate and manage ESG priorities in coordination with other business priorities may not prove completely effective or fully satisfy our stakeholders. Customers and potential customers may choose not to do business with us based on our ESG practices and related policies and actions. We may face adverse regulatory, investor, media, or public scrutiny leading to business, reputational, or legal challenges. event of a disaster, our ability to effectively conduct business could be severely compromised. Losses from changing climate and weather conditions may adversely affect our financial condition, profitability or cash flows Climate change affects the occurrence of certain natural events, such as increasing the frequency or severity of wind, tornado, hailstorm and thunderstorm events due to increased convection in the atmosphere. There could also be more frequent wildfires in certain geographies, more flooding and the potential for increased severity of hurricanes. As a result, incurred losses from such events and the demand, price and availability of reinsurance coverages for automobile and homeowners insurance may be affected. Climate change may also impact insurability by impairing our ability to identify and quantify potential hazards that will result in losses and offer our customers products at an affordable price. Our investment portfolio is also subject to the effects of climate change as economic shifts alter the return dynamic of long-term investments and increase valuation risk. Due to significant variability associated with future changing climate conditions, we are unable to predict the impact climate change will have on our businesses. Our efforts to meet evolving environmental, social, and governance standards may not meet stakeholders' expectations Some of our existing or potential investors, customers, employees, regulators, and other stakeholders evaluate our business practices according to a variety of environmental, social and governance (“ESG”) standards and expectations, including those related to climate change, inclusive diversity and equity, data privacy, and the well-being of our employees. Some regulators have proposed or adopted, or may propose or adopt, pro- or anti-ESG rules or standards applicable to our business. Our business practices and disclosures are evaluated against ESG standards which are continually evolving and not always well defined or readily measurable today. ESG-related expectations may also reflect contrasting or conflicting values or agendas. Our practices may not change in the particular ways or at the rate stakeholders expect. We may fail to meet our commitments or targets. Our policies and processes to evaluate and manage ESG priorities in coordination with other business priorities may not prove completely effective or fully satisfy our stakeholders. Customers and potential customers may choose not to do business with us based on our ESG practices and related policies and actions. We may face adverse regulatory, investor, media, or public scrutiny leading to business, reputational, or legal challenges. The Allstate Corporation 29 The Allstate Corporation 29 The Allstate Corporation 29 2023 Form 10-K Part I - Item 1A. Risk Factors and Other Disclosures 2023 Form 10-K Part I - Item 1A. Risk Factors and Other Disclosures We are subject to extensive regulation, and potential further restrictive regulation may increase operating costs and limit growthWe largely operate in the highly regulated insurance and broader financial services sectors and are subject to extensive laws and regulations that are complex and subject to change. Changes may lead to additional expenses, increased legal exposure, or increased reserve or capital requirements limiting our ability to grow or to achieve targeted profitability. Moreover, laws and regulations are administered and enforced by governmental authorities that exercise interpretive latitude, including:•State insurance regulators •State securities administrators•State attorneys general•Federal agencies including the SEC, the Financial Industry Regulatory Authority, the Department of Labor, the U.S. Department of Justice, the Consumer Financial Protection Bureau and the National Labor Relations BoardConsequently, compliance with one regulator’s or enforcement authority’s interpretation of a legal issue may not result in compliance with another’s interpretation of the same issue.There is risk that one regulator’s or enforcement authority’s interpretation of a legal issue may change to our detriment. There is also a risk that changes in the overall legal environment may cause us to change our views regarding the actions we need to take from a legal risk management perspective. This could necessitate changes to our practices that may adversely impact our business. In some cases, state insurance laws and regulations are generally intended to protect or benefit purchasers or users of insurance products, not holders of securities that we issue. These laws and regulations may limit our ability to grow or to improve the profitability of our business.We have business process and information technology operations in Canada, India, the United Kingdom and Mexico that are subject to operating, regulatory and political risks in those countries. We also outsource certain business functions to vendors located in foreign countries, including India, Mexico, Colombia, South Africa and the Philippines, that are subject to operating, regulatory and political risks in those countries. We may incur substantial costs and other negative consequences if any of these risks occur, including an adverse effect on our business, results of operations and financial condition.A regulatory environment that requires rate increases to be approved, can dictate underwriting practices and mandate participation in loss sharing arrangements, may adversely affect results of operations and financial conditionPolitical events and positions can affect the insurance market, including efforts to suppress rates to a level that may not allow us to reach targeted levels of profitability. Regulatory challenges to rate increases, especially during inflationary periods with more significant rate changes, may restrict rate changes that may be required to achieve targeted levels of profitability and returns on equity. If we are unsuccessful, our results of operations could be negatively impacted. Certain states may enact regulatory reforms regarding insurance rating that may make it more difficult to obtain rates that appropriately reflect the risk. In addition, certain states have enacted laws that require an insurer conducting business in that state to participate in assigned risk plans, reinsurance facilities and joint underwriting associations. Certain states also require the insurer to offer coverage to all consumers, often restricting an insurer’s ability to charge the price it might otherwise charge for the risk acceptance. In these markets, we may be compelled to underwrite significant amounts of business at lower-than-desired rates, possibly leading to an unacceptable return on equity. Alternatively, as the facilities recognize a financial deficit, they could have the ability to assess participating insurers, adversely affecting our results of operations and financial condition. Laws and regulations of many states also limit an insurer’s ability to withdraw from one or more lines of insurance, except pursuant to a plan that is approved by the state insurance department. Certain states require an insurer to participate in guaranty funds for impaired or insolvent insurance companies. These funds periodically assess losses against all insurance companies doing business in the state. Our results of operations and financial condition could be adversely affected by any of these factors.Regulatory reforms, and the more stringent application of existing regulations, may make it more expensive for us to conduct our businessThe federal government has enacted and continues to propose comprehensive regulatory reforms for financial services entities. As part of a larger effort to strengthen the regulation of the financial services market, certain reforms are applicable to the insurance industry. A growing number of state laws, enforced by a variety of regulators, on issues such as privacy and cybersecurity may also increase expenses and require additional compliance activities.The Federal Insurance Office and Financial Stability Oversight Council have been established, and the federal government may enact reforms that affect the state insurance regulatory framework. The potential impact of state or federal measures that change the nature or scope of insurance and financial regulation is uncertain but may make it more expensive for us to conduct business and limit our ability to grow or achieve profitability.Losses from legal and regulatory actions may be material to our results of operations, cash flows and financial conditionWe are involved in various legal actions, including class-action litigation challenging a range of company practices; including coverages provided by our insurance products, some of which involve claims for substantial or indeterminate amounts. We are also We are subject to extensive regulation, and potential further restrictive regulation may increase operating costs and limit growthWe largely operate in the highly regulated insurance and broader financial services sectors and are subject to extensive laws and regulations that are complex and subject to change. Changes may lead to additional expenses, increased legal exposure, or increased reserve or capital requirements limiting our ability to grow or to achieve targeted profitability. Moreover, laws and regulations are administered and enforced by governmental authorities that exercise interpretive latitude, including:•State insurance regulators •State securities administrators•State attorneys general•Federal agencies including the SEC, the Financial Industry Regulatory Authority, the Department of Labor, the U.S. Department of Justice, the Consumer Financial Protection Bureau and the National Labor Relations BoardConsequently, compliance with one regulator’s or enforcement authority’s interpretation of a legal issue may not result in compliance with another’s interpretation of the same issue.There is risk that one regulator’s or enforcement authority’s interpretation of a legal issue may change to our detriment. There is also a risk that changes in the overall legal environment may cause us to change our views regarding the actions we need to take from a legal risk management perspective. This could necessitate changes to our practices that may adversely impact our business. In some cases, state insurance laws and regulations are generally intended to protect or benefit purchasers or users of insurance products, not holders of securities that we issue. These laws and regulations may limit our ability to grow or to improve the profitability of our business.We have business process and information technology operations in Canada, India, the United Kingdom and Mexico that are subject to operating, regulatory and political risks in those countries. We also outsource certain business functions to vendors located in foreign countries, including India, Mexico, Colombia, South Africa and the Philippines, that are subject to operating, regulatory and political risks in those countries. We may incur substantial costs and other negative consequences if any of these risks occur, including an adverse effect on our business, results of operations and financial condition.A regulatory environment that requires rate increases to be approved, can dictate underwriting practices and mandate participation in loss sharing arrangements, may adversely affect results of operations and financial conditionPolitical events and positions can affect the insurance market, including efforts to suppress rates to a level that may not allow us to reach targeted levels of profitability. Regulatory challenges to rate increases, especially during inflationary periods with more We are subject to extensive regulation, and potential further restrictive regulation may increase operating costs and limit growth We largely operate in the highly regulated insurance and broader financial services sectors and are subject to extensive laws and regulations that are complex and subject to change. Changes may lead to additional expenses, increased legal exposure, or increased reserve or capital requirements limiting our ability to grow or to achieve targeted profitability. Moreover, laws and regulations are administered and enforced by governmental authorities that exercise interpretive latitude, including: •State insurance regulators •State securities administrators •State attorneys general •Federal agencies including the SEC, the Financial Industry Regulatory Authority, the Department of Labor, the U.S. Department of Justice, the Consumer Financial Protection Bureau and the National Labor Relations Board Consequently, compliance with one regulator’s or enforcement authority’s interpretation of a legal issue may not result in compliance with another’s interpretation of the same issue. There is risk that one regulator’s or enforcement authority’s interpretation of a legal issue may change to our detriment. There is also a risk that changes in the overall legal environment may cause us to change our views regarding the actions we need to take from a legal risk management perspective. This could necessitate changes to our practices that may adversely impact our business. In some cases, state insurance laws and regulations are generally intended to protect or benefit purchasers or users of insurance products, not holders of securities that we issue. These laws and regulations may limit our ability to grow or to improve the profitability of our business. We have business process and information technology operations in Canada, India, the United Kingdom and Mexico that are subject to operating, regulatory and political risks in those countries. We also outsource certain business functions to vendors located in foreign countries, including India, Mexico, Colombia, South Africa and the Philippines, that are subject to operating, regulatory and political risks in those countries. We may incur substantial costs and other negative consequences if any of these risks occur, including an adverse effect on our business, results of operations and financial condition. A regulatory environment that requires rate increases to be approved, can dictate underwriting practices and mandate participation in loss sharing arrangements, may adversely affect results of operations and financial condition Political events and positions can affect the insurance market, including efforts to suppress rates to a level that may not allow us to reach targeted levels of profitability. Regulatory challenges to rate increases, especially during inflationary periods with more significant rate changes, may restrict rate changes that may be required to achieve targeted levels of profitability and returns on equity. If we are unsuccessful, our results of operations could be negatively impacted. Certain states may enact regulatory reforms regarding insurance rating that may make it more difficult to obtain rates that appropriately reflect the risk. In addition, certain states have enacted laws that require an insurer conducting business in that state to participate in assigned risk plans, reinsurance facilities and joint underwriting associations. Certain states also require the insurer to offer coverage to all consumers, often restricting an insurer’s ability to charge the price it might otherwise charge for the risk acceptance. In these markets, we may be compelled to underwrite significant amounts of business at lower-than-desired rates, possibly leading to an unacceptable return on equity. Alternatively, as the facilities recognize a financial deficit, they could have the ability to assess participating insurers, adversely affecting our results of operations and financial condition. Laws and regulations of many states also limit an insurer’s ability to withdraw from one or more lines of insurance, except pursuant to a plan that is approved by the state insurance department. Certain states require an insurer to participate in guaranty funds for impaired or insolvent insurance companies. These funds periodically assess losses against all insurance companies doing business in the state. Our results of operations and financial condition could be adversely affected by any of these factors.Regulatory reforms, and the more stringent application of existing regulations, may make it more expensive for us to conduct our businessThe federal government has enacted and continues to propose comprehensive regulatory reforms for financial services entities. As part of a larger effort to strengthen the regulation of the financial services market, certain reforms are applicable to the insurance industry. A growing number of state laws, enforced by a variety of regulators, on issues such as privacy and cybersecurity may also increase expenses and require additional compliance activities.The Federal Insurance Office and Financial Stability Oversight Council have been established, and the federal government may enact reforms that affect the state insurance regulatory framework. The potential impact of state or federal measures that change the nature or scope of insurance and financial regulation is uncertain but may make it more expensive for us to conduct business and limit our ability to grow or achieve profitability.Losses from legal and regulatory actions may be material to our results of operations, cash flows and financial conditionWe are involved in various legal actions, including class-action litigation challenging a range of company practices; including coverages provided by our insurance products, some of which involve claims for substantial or indeterminate amounts. We are also significant rate changes, may restrict rate changes that may be required to achieve targeted levels of profitability and returns on equity. If we are unsuccessful, our results of operations could be negatively impacted. Certain states may enact regulatory reforms regarding insurance rating that may make it more difficult to obtain rates that appropriately reflect the risk. In addition, certain states have enacted laws that require an insurer conducting business in that state to participate in assigned risk plans, reinsurance facilities and joint underwriting associations. Certain states also require the insurer to offer coverage to all consumers, often restricting an insurer’s ability to charge the price it might otherwise charge for the risk acceptance. In these markets, we may be compelled to underwrite significant amounts of business at lower-than-desired rates, possibly leading to an unacceptable return on equity. Alternatively, as the facilities recognize a financial deficit, they could have the ability to assess participating insurers, adversely affecting our results of operations and financial condition. Laws and regulations of many states also limit an insurer’s ability to withdraw from one or more lines of insurance, except pursuant to a plan that is approved by the state insurance department. Certain states require an insurer to participate in guaranty funds for impaired or insolvent insurance companies. These funds periodically assess losses against all insurance companies doing business in the state. Our results of operations and financial condition could be adversely affected by any of these factors. Regulatory reforms, and the more stringent application of existing regulations, may make it more expensive for us to conduct our business The federal government has enacted and continues to propose comprehensive regulatory reforms for financial services entities. As part of a larger effort to strengthen the regulation of the financial services market, certain reforms are applicable to the insurance industry. A growing number of state laws, enforced by a variety of regulators, on issues such as privacy and cybersecurity may also increase expenses and require additional compliance activities. The Federal Insurance Office and Financial Stability Oversight Council have been established, and the federal government may enact reforms that affect the state insurance regulatory framework. The potential impact of state or federal measures that change the nature or scope of insurance and financial regulation is uncertain but may make it more expensive for us to conduct business and limit our ability to grow or achieve profitability. Losses from legal and regulatory actions may be material to our results of operations, cash flows and financial condition We are involved in various legal actions, including class-action litigation challenging a range of company practices; including coverages provided by our insurance products, some of which involve claims for substantial or indeterminate amounts. We are also 30 www.allstate.com 30 www.allstate.com 30 www.allstate.com 2023 Form 10-K Part I - Item 1A. Risk Factors and Other Disclosures 2023 Form 10-K Part I - Item 1A. Risk Factors and Other Disclosures involved in various regulatory actions and inquiries, including market conduct exams by state insurance regulatory agencies. In the event of an unfavorable outcome in any of these matters, the ultimate liability may be more than amounts currently accrued or disclosed in our reasonably possible loss range and may be material to our results of operations, cash flows and financial condition. See Note 15 of the consolidated financial statements. Changes in or the application of accounting standards issued by standard-setting bodies and changes in tax laws may adversely affect our results of operations and financial conditionOur financial statements are subject to GAAP, which are periodically revised, interpreted or expanded. Accordingly, we may be required to adopt new guidance or interpretations, which may have a material effect on our results of operations and financial condition and could adversely impact financial strength ratings.•Market declines, changes in business strategies or other events impacting the fair value of goodwill or purchased intangible assets could result in an impairment charge to income •Realization of our deferred tax assets assumes that we can fully utilize the deductions recognized for tax purposes; we may recognize additional tax expense if these assets are not fully utilized•New tax legislative initiatives may be enacted that may impact our effective tax rate and could adversely affect our tax positions or tax liabilities See the Regulation section, MD&A, Application of Critical Accounting Estimates and Note 2 of the consolidated financial statements for further details.Misconduct or fraudulent acts by employees, agents and third parties may expose us to financial loss, disruption of business, regulatory assessments and reputational harm The company and the insurance industry are susceptible to past and future misconduct or fraudulent activities by employees, representative agents, vendors, customers and other third parties. These activities could include:•Fraud against the company, its employees and its customers through illegal or prohibited activities •Unauthorized acts or representations, unauthorized use or disclosure of personal or proprietary information, deception, and misappropriation of funds or other benefitsItem 1B. Unresolved Staff CommentsNone.Item 1C. CybersecurityGovernanceThe Allstate Corporation Board of Directors (“Allstate Board”) has overall responsibility for oversight of enterprise risk. The Audit Committee of the Allstate Board oversees the effectiveness of the cybersecurity program. The Audit Committee retains an external cybersecurity advisor to consult on cybersecurity matters and perform assessments of the Allstate Information Security Program.The Chief Information Security Officer (“CISO”) regularly updates the Audit Committee and Allstate Board on Information Security Program status, cybersecurity risk management, the control environment, emerging threat intelligence and key risk and performance measurements. In addition, the CISO provides updates to senior leadership, the Audit Committee and the Allstate Board, as appropriate. Jeffrey Wright is senior vice president and CISO for Allstate. He is responsible for the development and execution of the security strategy which protects Allstate’s information from external and internal cybersecurity threats. Mr. Wright has more than 20 years of information security leadership experience.Risk Management and StrategyThe Enterprise Risk and Return Council has delegated the power and authority to manage cybersecurity risks to the Information Security Council (“ISC”). The CISO chairs the ISC, with senior management representation from across the Company including representatives from Privacy, Legal and Technology. The ISC monitors, makes mitigating decisions about, and escalates information security risks that are outside the Company’s established risk tolerance. Additionally, it provides executive sponsorship of information security controls and oversees the development and review of the information security policy and enterprise security standards. Allstate evaluates candidates for information security positions based on experience and qualifications. Senior leadership, team leads and subject matter experts conduct interviews to identify top candidates who represent the technical and behavioral acumen required of cybersecurity professionals at Allstate. Allstate provides cybersecurity employees with continuing education associated with their roles and responsibilities.Information Security Program Allstate has implemented a robust Information Security Program to manage material risks from cybersecurity threats. The Company’s Program uses a risk-based, defense-in-depth approach to identify, assess and manage cybersecurity risks to the Company’s information assets and systems, enabling the business to achieve its objectives. The Information Security Program is aligned with industry best practices and standards including the ISO 27001/27002 standards, the Control Objectives for Information and Related Technologies involved in various regulatory actions and inquiries, including market conduct exams by state insurance regulatory agencies. In the event of an unfavorable outcome in any of these matters, the ultimate liability may be more than amounts currently accrued or disclosed in our reasonably possible loss range and may be material to our results of operations, cash flows and financial condition. See Note 15 of the consolidated financial statements. Changes in or the application of accounting standards issued by standard-setting bodies and changes in tax laws may adversely affect our results of operations and financial conditionOur financial statements are subject to GAAP, which are periodically revised, interpreted or expanded. Accordingly, we may be required to adopt new guidance or interpretations, which may have a material effect on our results of operations and financial condition and could adversely impact financial strength ratings.•Market declines, changes in business strategies or other events impacting the fair value of goodwill or purchased intangible assets could result in an impairment charge to income •Realization of our deferred tax assets assumes that we can fully utilize the deductions recognized for tax purposes; we may recognize additional tax expense if these assets are not fully utilized•New tax legislative initiatives may be enacted that may impact our effective tax rate and could adversely affect our tax positions or tax liabilities See the Regulation section, MD&A, Application of Critical Accounting Estimates and Note 2 of the consolidated financial statements for further details.Misconduct or fraudulent acts by employees, agents and third parties may expose us to financial loss, disruption of business, regulatory assessments and reputational harm The company and the insurance industry are susceptible to past and future misconduct or fraudulent activities by employees, representative agents, vendors, customers and other third parties. These activities could include:•Fraud against the company, its employees and its customers through illegal or prohibited activities •Unauthorized acts or representations, unauthorized use or disclosure of personal or proprietary information, deception, and misappropriation of funds or other benefitsItem 1B. Unresolved Staff CommentsNone. involved in various regulatory actions and inquiries, including market conduct exams by state insurance regulatory agencies. In the event of an unfavorable outcome in any of these matters, the ultimate liability may be more than amounts currently accrued or disclosed in our reasonably possible loss range and may be material to our results of operations, cash flows and financial condition. See Note 15 of the consolidated financial statements. Changes in or the application of accounting standards issued by standard-setting bodies and changes in tax laws may adversely affect our results of operations and financial condition Our financial statements are subject to GAAP, which are periodically revised, interpreted or expanded. Accordingly, we may be required to adopt new guidance or interpretations, which may have a material effect on our results of operations and financial condition and could adversely impact financial strength ratings. •Market declines, changes in business strategies or other events impacting the fair value of goodwill or purchased intangible assets could result in an impairment charge to income •Realization of our deferred tax assets assumes that we can fully utilize the deductions recognized for tax purposes; we may recognize additional tax expense if these assets are not fully utilized •New tax legislative initiatives may be enacted that may impact our effective tax rate and could adversely affect our tax positions or tax liabilities See the Regulation section, MD&A, Application of Critical Accounting Estimates and Note 2 of the consolidated financial statements for further details. Misconduct or fraudulent acts by employees, agents and third parties may expose us to financial loss, disruption of business, regulatory assessments and reputational harm The company and the insurance industry are susceptible to past and future misconduct or fraudulent activities by employees, representative agents, vendors, customers and other third parties. These activities could include: •Fraud against the company, its employees and its customers through illegal or prohibited activities •Unauthorized acts or representations, unauthorized use or disclosure of personal or proprietary information, deception, and misappropriation of funds or other benefits Item 1B. Unresolved Staff Comments None. Item 1C. CybersecurityGovernanceThe Allstate Corporation Board of Directors (“Allstate Board”) has overall responsibility for oversight of enterprise risk. The Audit Committee of the Allstate Board oversees the effectiveness of the cybersecurity program. The Audit Committee retains an external cybersecurity advisor to consult on cybersecurity matters and perform assessments of the Allstate Information Security Program.The Chief Information Security Officer (“CISO”) regularly updates the Audit Committee and Allstate Board on Information Security Program status, cybersecurity risk management, the control environment, emerging threat intelligence and key risk and performance measurements. In addition, the CISO provides updates to senior leadership, the Audit Committee and the Allstate Board, as appropriate. Jeffrey Wright is senior vice president and CISO for Allstate. He is responsible for the development and execution of the security strategy which protects Allstate’s information from external and internal cybersecurity threats. Mr. Wright has more than 20 years of information security leadership experience.Risk Management and StrategyThe Enterprise Risk and Return Council has delegated the power and authority to manage cybersecurity risks to the Information Security Council (“ISC”). The CISO chairs the ISC, with senior management representation from across the Company including representatives from Privacy, Legal and Technology. The ISC monitors, makes mitigating decisions about, and escalates information security risks that are outside the Company’s established risk tolerance. Additionally, it provides executive sponsorship of information security controls and oversees the development and review of the information security policy and enterprise security standards. Allstate evaluates candidates for information security positions based on experience and qualifications. Senior leadership, team leads and subject matter experts conduct interviews to identify top candidates who represent the technical and behavioral acumen required of cybersecurity professionals at Allstate. Allstate provides cybersecurity employees with continuing education associated with their roles and responsibilities.Information Security Program Allstate has implemented a robust Information Security Program to manage material risks from cybersecurity threats. The Company’s Program uses a risk-based, defense-in-depth approach to identify, assess and manage cybersecurity risks to the Company’s information assets and systems, enabling the business to achieve its objectives. The Information Security Program is aligned with industry best practices and standards including the ISO 27001/27002 standards, the Control Objectives for Information and Related Technologies Item 1C. Cybersecurity Governance The Allstate Corporation Board of Directors (“Allstate Board”) has overall responsibility for oversight of enterprise risk. The Audit Committee of the Allstate Board oversees the effectiveness of the cybersecurity program. The Audit Committee retains an external cybersecurity advisor to consult on cybersecurity matters and perform assessments of the Allstate Information Security Program. The Chief Information Security Officer (“CISO”) regularly updates the Audit Committee and Allstate Board on Information Security Program status, cybersecurity risk management, the control environment, emerging threat intelligence and key risk and performance measurements. In addition, the CISO provides updates to senior leadership, the Audit Committee and the Allstate Board, as appropriate. Jeffrey Wright is senior vice president and CISO for Allstate. He is responsible for the development and execution of the security strategy which protects Allstate’s information from external and internal cybersecurity threats. Mr. Wright has more than 20 years of information security leadership experience.", "prior_body": "Conditions in the global economy and capital markets could continue to adversely affect our business and results of operations Global economic and capital market conditions could continue to adversely impact demand for our products, returns on our investment portfolio and results of operations. The conditions that would have the largest impact on our business include: •Low or negative economic growth •Interest rate levels •Rising inflation increasing claims and claims expense •Substantial increases in delinquencies or defaults on debt •Significant downturns in the market value or liquidity of our investment portfolio •Prolonged downturn in equity valuations •Reduced consumer spending and business investmentStressed conditions, volatility and disruptions in global capital markets or financial asset classes could adversely affect our investment portfolio. Our assumptions about portfolio diversification may not hold across market conditions, which could lead to heightened investment losses. Capital and credit market conditions may significantly affect our ability to meet liquidity needs or obtain credit on acceptable termsIn periods of extreme volatility and disruption in the capital and credit markets, liquidity and credit capacity may be severely restricted. Our access to additional financing depends on a variety of factors such as market conditions, the general availability of credit, the overall availability of credit to our industry, our credit ratings and credit capacity, as well as lenders’ perception of our long- or short-term financial prospects. In such circumstances, our ability to obtain capital to fund operating expenses, financing costs, capital expenditures or acquisitions may be limited, and the cost of any such capital may be significant. A large-scale pandemic, the occurrence of terrorism, military actions, social unrest or other actions may have an adverse effect on our businessA large-scale pandemic, such as the Coronavirus and its impacts, the occurrence of terrorism, military actions, social unrest or other actions, may result in loss of life, property damage, and disruptions to commerce and reduced economic activity. Some of the assets in our investment portfolio may be adversely affected by declines in the equity markets, changes in interest rates, reduced liquidity and economic activity caused by a large-scale pandemic. Additionally, a large-scale pandemic or terrorist act could have a material effect on sales, liquidity and operating results.The Coronavirus resulted in governments worldwide enacting emergency measures to combat the spread of the virus, including travel restrictions, government-imposed shelter-in-place orders, quarantine periods, social distancing, and restrictions on large gatherings. These measures have moderated, but new variants of the Coronavirus could result in further economic volatility. We continue to closely monitor and proactively adapt to developments and changing conditions. Currently, it is not possible to reliably estimate the impact to our operations, but the effects have been and could be material. The Coronavirus has affected our operations and may continue to significantly affect our results of operations, financial condition and liquidity. The impact from the pandemic should be considered when comparing the current period to prior periods, including:•Sales of new and retention of existing policies•Rate changes and average gross premiums•Supply chain disruptions and labor shortages increase the cost of settling claims •Reduced consumer spending and business investment Stressed conditions, volatility and disruptions in global capital markets or financial asset classes could adversely affect our investment portfolio. Our assumptions about portfolio diversification may not hold across market conditions, which could lead to heightened investment losses. Capital and credit market conditions may significantly affect our ability to meet liquidity needs or obtain credit on acceptable terms In periods of extreme volatility and disruption in the capital and credit markets, liquidity and credit capacity may be severely restricted. Our access to additional financing depends on a variety of factors such as market conditions, the general availability of credit, the overall availability of credit to our industry, our credit ratings and credit capacity, as well as lenders’ perception of our long- or short-term financial prospects. In such circumstances, our ability to obtain capital to fund operating expenses, financing costs, capital expenditures or acquisitions may be limited, and the cost of any such capital may be significant. A large-scale pandemic, the occurrence of terrorism, military actions, social unrest or other actions may have an adverse effect on our business A large-scale pandemic, such as the Coronavirus and its impacts, the occurrence of terrorism, military actions, social unrest or other actions, may result in loss of life, property damage, and disruptions to commerce and reduced economic activity. Some of the assets in our investment portfolio may be adversely affected by declines in the equity markets, changes in interest rates, reduced liquidity and economic activity caused by a large-scale pandemic. Additionally, a large-scale pandemic or terrorist act could have a material effect on sales, liquidity and operating results. The Coronavirus resulted in governments worldwide enacting emergency measures to combat the spread of the virus, including travel restrictions, government-imposed shelter-in-place orders, quarantine periods, social distancing, and restrictions on large gatherings. These measures have moderated, but new variants of the Coronavirus could result in further economic volatility. We continue to closely monitor and proactively adapt to developments and changing conditions. Currently, it is not possible to reliably estimate the impact to our operations, but the effects have been and could be material. The Coronavirus has affected our operations and may continue to significantly affect our results of operations, financial condition and liquidity. The impact from the pandemic should be considered when comparing the current period to prior periods, including: •Sales of new and retention of existing policies •Rate changes and average gross premiums •Supply chain disruptions and labor shortages increase the cost of settling claims The Allstate Corporation 27 The Allstate Corporation 27 The Allstate Corporation 27 2022 Form 10-K Part I - Item 1A. Risk Factors and Other Disclosures 2022 Form 10-K Part I - Item 1A. Risk Factors and Other Disclosures •Premiums and losses for shared economy products, including transportation network companies and home rentals •Driving behavior and auto accident frequency•Hospital and outpatient claim costs •Investment valuations and returns•Bad debt and credit allowance exposure•Consumer utilization of Milewise®, our pay-per-mile insurance product •Retail sales in Allstate Protection Plans See MD&A, Highlights for a summary of the impacts of the Coronavirus on our operations, each of our segments and investments that may continue, emerge, evolve or accelerate into 2023.The failure in cyber or other information security controls, as well as the occurrence of events unanticipated in our disaster recovery processes and business continuity planning, could result in a loss or disclosure of confidential information, damage to our reputation, additional costs and impair our ability to conduct business effectivelyWe depend heavily on computer systems, mathematical algorithms and data to perform necessary business functions. There are threats that could impact our ability to protect our data and systems; if the threats materialize, they could impact confidentiality, integrity and availability:•Confidentiality — protecting our data from disclosure to unauthorized parties•Integrity — ensuring data is not changed accidentally or without authorization and is accurate•Availability — ensuring our data and systems are accessible to meet our business needs We collect, use, store or transmit a large amount of confidential, proprietary and other information (including personal information of customers, claimants or employees) in connection with the operation of our business. Systems are subject to increased cyberattacks and unauthorized access, such as physical and electronic break-ins or unauthorized tampering.We constantly defend against threats to our data and systems, including malware and computer virus attacks, unauthorized access, system failures and disruptions. We have experienced breaches of our data and systems, although to date none of these breaches has had a material effect on our business, operations or reputation. Events like these jeopardize the information processed and stored in, and transmitted through, our computer systems and networks and otherwise cause interruptions or malfunctions in our operations, which could result in damage to our reputation, financial losses, litigation, increased costs, regulatory penalties or customer dissatisfaction.These risks may increase in the future as threats become more sophisticated and we continue to expand internet and mobile strategies, develop additional remote connectivity solutions to serve our employees and customers, develop and expand products and services designed to protect customers’ digital footprint, and build and maintain an integrated digital enterprise.Our increased use of third-party services (e.g., cloud technology and software as a service) can make it more difficult to identify and respond to cyberattacks in any of the above situations. Although we may review and assess third-party vendor cyber security controls, our efforts may not be successful in preventing or mitigating the effects of such events. Third parties to whom we outsource certain functions are also subject to cybersecurity risks. Personal information is subject to an increasing number of federal, state, local and international laws and regulations regarding privacy and data security, as well as contractual commitments. Any failure or perceived failure by us to comply with such obligations may result in governmental enforcement actions and fines, litigation or public statements against us by consumer advocacy groups or others and could cause our employees and customers to lose trust in us, which could have an adverse effect on our reputation and business. Our integrated operational risk and return management processes and practices may not be sufficient to timely detect and mitigate operational risks that could have an adverse effect on our reputation and business. See the Regulation section, Privacy Regulation and Data Security, for additional information.The occurrence of a disaster, such as a natural catastrophe, pandemic, industrial accident, blackout, terrorist attack, war, cyberattack, computer virus, insider threat, unanticipated problems with our disaster recovery processes, or a support failure from external providers, could have an adverse effect on our ability to conduct business and on our results of operations and financial condition, particularly if those events affect our computer-based data processing, transmission, storage, and retrieval systems or destroy data. If a significant number of employees were unavailable in the event of a disaster, our ability to effectively conduct business could be severely compromised. Our systems are also subject to compromise from internal threats.Losses from changing climate and weather conditions may adversely affect our financial condition, profitability or cash flowsClimate change affects the occurrence of certain natural events, such as increasing the frequency or severity of wind, tornado, hailstorm and thunderstorm events due to increased convection in the atmosphere. There could also be more frequent wildfires in certain geographies, more flooding and the potential for increased severity of hurricanes due to higher sea surface temperatures. As a result, incurred losses from such events and the demand, price and availability of reinsurance coverages for automobile and homeowners insurance may be affected. •Premiums and losses for shared economy products, including transportation network companies and home rentals •Driving behavior and auto accident frequency•Hospital and outpatient claim costs •Investment valuations and returns•Bad debt and credit allowance exposure•Consumer utilization of Milewise®, our pay-per-mile insurance product •Retail sales in Allstate Protection Plans See MD&A, Highlights for a summary of the impacts of the Coronavirus on our operations, each of our segments and investments that may continue, emerge, evolve or accelerate into 2023.The failure in cyber or other information security controls, as well as the occurrence of events unanticipated in our disaster recovery processes and business continuity planning, could result in a loss or disclosure of confidential information, damage to our reputation, additional costs and impair our ability to conduct business effectivelyWe depend heavily on computer systems, mathematical algorithms and data to perform necessary business functions. There are threats that could impact our ability to protect our data and systems; if the threats materialize, they could impact confidentiality, integrity and availability:•Confidentiality — protecting our data from disclosure to unauthorized parties•Integrity — ensuring data is not changed accidentally or without authorization and is accurate•Availability — ensuring our data and systems are accessible to meet our business needs We collect, use, store or transmit a large amount of confidential, proprietary and other information (including personal information of customers, claimants or employees) in connection with the operation of our business. Systems are subject to increased cyberattacks and unauthorized access, such as physical and electronic break-ins or unauthorized tampering.We constantly defend against threats to our data and systems, including malware and computer virus attacks, unauthorized access, system failures and disruptions. We have experienced breaches of our data and systems, although to date none of these breaches has had a material effect on our business, operations or reputation. Events like these jeopardize the information processed and stored in, and transmitted through, our computer systems and networks and otherwise cause interruptions or malfunctions in our operations, which could result in damage to our reputation, financial losses, litigation, increased costs, regulatory penalties or customer dissatisfaction.These risks may increase in the future as threats become more sophisticated and we continue to expand internet and mobile strategies, develop •Premiums and losses for shared economy products, including transportation network companies and home rentals •Driving behavior and auto accident frequency •Hospital and outpatient claim costs •Investment valuations and returns •Bad debt and credit allowance exposure •Consumer utilization of Milewise®, our pay-per-mile insurance product •Retail sales in Allstate Protection Plans See MD&A, Highlights for a summary of the impacts of the Coronavirus on our operations, each of our segments and investments that may continue, emerge, evolve or accelerate into 2023. The failure in cyber or other information security controls, as well as the occurrence of events unanticipated in our disaster recovery processes and business continuity planning, could result in a loss or disclosure of confidential information, damage to our reputation, additional costs and impair our ability to conduct business effectively We depend heavily on computer systems, mathematical algorithms and data to perform necessary business functions. There are threats that could impact our ability to protect our data and systems; if the threats materialize, they could impact confidentiality, integrity and availability: •Confidentiality — protecting our data from disclosure to unauthorized parties •Integrity — ensuring data is not changed accidentally or without authorization and is accurate •Availability — ensuring our data and systems are accessible to meet our business needs We collect, use, store or transmit a large amount of confidential, proprietary and other information (including personal information of customers, claimants or employees) in connection with the operation of our business. Systems are subject to increased cyberattacks and unauthorized access, such as physical and electronic break-ins or unauthorized tampering. We constantly defend against threats to our data and systems, including malware and computer virus attacks, unauthorized access, system failures and disruptions. We have experienced breaches of our data and systems, although to date none of these breaches has had a material effect on our business, operations or reputation. Events like these jeopardize the information processed and stored in, and transmitted through, our computer systems and networks and otherwise cause interruptions or malfunctions in our operations, which could result in damage to our reputation, financial losses, litigation, increased costs, regulatory penalties or customer dissatisfaction. These risks may increase in the future as threats become more sophisticated and we continue to expand internet and mobile strategies, develop additional remote connectivity solutions to serve our employees and customers, develop and expand products and services designed to protect customers’ digital footprint, and build and maintain an integrated digital enterprise.Our increased use of third-party services (e.g., cloud technology and software as a service) can make it more difficult to identify and respond to cyberattacks in any of the above situations. Although we may review and assess third-party vendor cyber security controls, our efforts may not be successful in preventing or mitigating the effects of such events. Third parties to whom we outsource certain functions are also subject to cybersecurity risks. Personal information is subject to an increasing number of federal, state, local and international laws and regulations regarding privacy and data security, as well as contractual commitments. Any failure or perceived failure by us to comply with such obligations may result in governmental enforcement actions and fines, litigation or public statements against us by consumer advocacy groups or others and could cause our employees and customers to lose trust in us, which could have an adverse effect on our reputation and business. Our integrated operational risk and return management processes and practices may not be sufficient to timely detect and mitigate operational risks that could have an adverse effect on our reputation and business. See the Regulation section, Privacy Regulation and Data Security, for additional information.The occurrence of a disaster, such as a natural catastrophe, pandemic, industrial accident, blackout, terrorist attack, war, cyberattack, computer virus, insider threat, unanticipated problems with our disaster recovery processes, or a support failure from external providers, could have an adverse effect on our ability to conduct business and on our results of operations and financial condition, particularly if those events affect our computer-based data processing, transmission, storage, and retrieval systems or destroy data. If a significant number of employees were unavailable in the event of a disaster, our ability to effectively conduct business could be severely compromised. Our systems are also subject to compromise from internal threats.Losses from changing climate and weather conditions may adversely affect our financial condition, profitability or cash flowsClimate change affects the occurrence of certain natural events, such as increasing the frequency or severity of wind, tornado, hailstorm and thunderstorm events due to increased convection in the atmosphere. There could also be more frequent wildfires in certain geographies, more flooding and the potential for increased severity of hurricanes due to higher sea surface temperatures. As a result, incurred losses from such events and the demand, price and availability of reinsurance coverages for automobile and homeowners insurance may be affected. additional remote connectivity solutions to serve our employees and customers, develop and expand products and services designed to protect customers’ digital footprint, and build and maintain an integrated digital enterprise. Our increased use of third-party services (e.g., cloud technology and software as a service) can make it more difficult to identify and respond to cyberattacks in any of the above situations. Although we may review and assess third-party vendor cyber security controls, our efforts may not be successful in preventing or mitigating the effects of such events. Third parties to whom we outsource certain functions are also subject to cybersecurity risks. Personal information is subject to an increasing number of federal, state, local and international laws and regulations regarding privacy and data security, as well as contractual commitments. Any failure or perceived failure by us to comply with such obligations may result in governmental enforcement actions and fines, litigation or public statements against us by consumer advocacy groups or others and could cause our employees and customers to lose trust in us, which could have an adverse effect on our reputation and business. Our integrated operational risk and return management processes and practices may not be sufficient to timely detect and mitigate operational risks that could have an adverse effect on our reputation and business. See the Regulation section, Privacy Regulation and Data Security, for additional information. The occurrence of a disaster, such as a natural catastrophe, pandemic, industrial accident, blackout, terrorist attack, war, cyberattack, computer virus, insider threat, unanticipated problems with our disaster recovery processes, or a support failure from external providers, could have an adverse effect on our ability to conduct business and on our results of operations and financial condition, particularly if those events affect our computer-based data processing, transmission, storage, and retrieval systems or destroy data. If a significant number of employees were unavailable in the event of a disaster, our ability to effectively conduct business could be severely compromised. Our systems are also subject to compromise from internal threats. Losses from changing climate and weather conditions may adversely affect our financial condition, profitability or cash flows Climate change affects the occurrence of certain natural events, such as increasing the frequency or severity of wind, tornado, hailstorm and thunderstorm events due to increased convection in the atmosphere. There could also be more frequent wildfires in certain geographies, more flooding and the potential for increased severity of hurricanes due to higher sea surface temperatures. As a result, incurred losses from such events and the demand, price and availability of reinsurance coverages for automobile and homeowners insurance may be affected. 28 www.allstate.com 28 www.allstate.com 28 www.allstate.com Part I - Item 1A. Risk Factors and Other Disclosures 2022 Form 10-K Part I - Item 1A. Risk Factors and Other Disclosures 2022 Form 10-K Climate change may also impact insurability by impairing our ability to identify and quantify potential hazards that will result in losses and offer our customers products at an affordable price. Our investment portfolio is also subject to the effects of climate change as economic shifts alter the return dynamic of long-term investments and increase valuation risk.Due to significant variability associated with future changing climate conditions, we are unable to predict the impact climate change will have on our businesses. Our efforts to meet evolving environmental, social, and governance standards may not meet stakeholders' expectationsSome of our existing or potential investors, customers, employees, regulators, and other stakeholders evaluate our business practices according to a variety of environmental, social and governance (“ESG”) standards and expectations, including those related to climate change, inclusive diversity and equity, data privacy, and the well-being of our employees. Some regulators have proposed or adopted, or may propose or adopt, ESG rules or standards applicable to our business. Our Shared Purpose integrates strong ESG principles and practices into our culture, strategy and business practices.Our business practices and disclosures are evaluated against ESG standards which are continually evolving and not always well defined or readily measurable today. ESG-related expectations may also reflect contrasting or conflicting values or agendas. Our practices may not change in the particular ways or at the rate stakeholders expect. We may fail to meet our commitments or targets. Our policies and processes to evaluate and manage ESG priorities in coordination with other business priorities may not prove completely effective or fully satisfy our stakeholders. Customers and potential customers may choose not to do business with us based on our ESG practices and related policies and actions. We may face adverse regulatory, investor, media, or public scrutiny leading to business, reputational, or legal challenges.We are subject to extensive regulation, and potential further restrictive regulation may increase operating costs and limit growthWe largely operate in the highly regulated insurance and broader financial services sectors and are subject to extensive laws and regulations that are complex and subject to change. Changes may lead to additional expenses, increased legal exposure, or increased reserve or capital requirements limiting our ability to grow or to achieve targeted profitability. Moreover, laws and regulations are administered and enforced by governmental authorities that exercise interpretive latitude, including:•State insurance regulators •State securities administrators•State attorneys general•Federal agencies including the SEC, the Financial Industry Regulatory Authority, the Department of Labor, the U.S. Department of Justice, the Consumer Financial Protection Bureau and the National Labor Relations BoardConsequently, compliance with one regulator’s or enforcement authority’s interpretation of a legal issue may not result in compliance with another’s interpretation of the same issue.There is risk that one regulator’s or enforcement authority’s interpretation of a legal issue may change to our detriment. There is also a risk that changes in the overall legal environment may cause us to change our views regarding the actions we need to take from a legal risk management perspective. This could necessitate changes to our practices that may adversely impact our business. In some cases, state insurance laws and regulations are generally intended to protect or benefit purchasers or users of insurance products, not holders of securities that we issue. These laws and regulations may limit our ability to grow or to improve the profitability of our business.A regulatory environment that requires rate increases to be approved, can dictate underwriting practices and mandate participation in loss sharing arrangements, may adversely affect results of operations and financial conditionPolitical events and positions can affect the insurance market, including efforts to suppress rates to a level that may not allow us to reach targeted levels of profitability. Regulatory challenges to rate increases, especially during inflationary periods with more significant rate changes, may restrict rate changes that may be required to achieve targeted levels of profitability and returns on equity. If we are unsuccessful, our results of operations could be negatively impacted. In addition, certain states have enacted laws that require an insurer conducting business in that state to participate in assigned risk plans, reinsurance facilities and joint underwriting associations. Certain states also require the insurer to offer coverage to all consumers, often restricting an insurer’s ability to charge the price it might otherwise charge for the risk acceptance. In these markets, we may be compelled to underwrite significant amounts of business at lower-than-desired rates, possibly leading to an unacceptable return on equity. Alternatively, as the facilities recognize a financial deficit, they could have the ability to assess participating insurers, adversely affecting our results of operations and financial condition. Laws and regulations of many states also limit an insurer’s ability to withdraw from one or more lines of insurance, except pursuant to a plan that is approved by the state insurance department. Certain states require an insurer to participate in guaranty funds for impaired or insolvent insurance companies. These funds periodically assess losses against all insurance companies doing business in the state. Our results of operations and financial condition could be adversely affected by any of these factors. Climate change may also impact insurability by impairing our ability to identify and quantify potential hazards that will result in losses and offer our customers products at an affordable price. Our investment portfolio is also subject to the effects of climate change as economic shifts alter the return dynamic of long-term investments and increase valuation risk.Due to significant variability associated with future changing climate conditions, we are unable to predict the impact climate change will have on our businesses. Our efforts to meet evolving environmental, social, and governance standards may not meet stakeholders' expectationsSome of our existing or potential investors, customers, employees, regulators, and other stakeholders evaluate our business practices according to a variety of environmental, social and governance (“ESG”) standards and expectations, including those related to climate change, inclusive diversity and equity, data privacy, and the well-being of our employees. Some regulators have proposed or adopted, or may propose or adopt, ESG rules or standards applicable to our business. Our Shared Purpose integrates strong ESG principles and practices into our culture, strategy and business practices.Our business practices and disclosures are evaluated against ESG standards which are continually evolving and not always well defined or readily measurable today. ESG-related expectations may also reflect contrasting or conflicting values or agendas. Our practices may not change in the particular ways or at the rate stakeholders expect. We may fail to meet our commitments or targets. Our policies and processes to evaluate and manage ESG priorities in coordination with other business priorities may not prove completely effective or fully satisfy our stakeholders. Customers and potential customers may choose not to do business with us based on our ESG practices and related policies and actions. We may face adverse regulatory, investor, media, or public scrutiny leading to business, reputational, or legal challenges.We are subject to extensive regulation, and potential further restrictive regulation may increase operating costs and limit growthWe largely operate in the highly regulated insurance and broader financial services sectors and are subject to extensive laws and regulations that are complex and subject to change. Changes may lead to additional expenses, increased legal exposure, or increased reserve or capital requirements limiting our ability to grow or to achieve targeted profitability. Moreover, laws and regulations are administered and enforced by governmental authorities that exercise interpretive latitude, including:•State insurance regulators •State securities administrators•State attorneys general•Federal agencies including the SEC, the Financial Industry Regulatory Authority, the Department of Climate change may also impact insurability by impairing our ability to identify and quantify potential hazards that will result in losses and offer our customers products at an affordable price. Our investment portfolio is also subject to the effects of climate change as economic shifts alter the return dynamic of long-term investments and increase valuation risk. Due to significant variability associated with future changing climate conditions, we are unable to predict the impact climate change will have on our businesses. Our efforts to meet evolving environmental, social, and governance standards may not meet stakeholders' expectations Some of our existing or potential investors, customers, employees, regulators, and other stakeholders evaluate our business practices according to a variety of environmental, social and governance (“ESG”) standards and expectations, including those related to climate change, inclusive diversity and equity, data privacy, and the well-being of our employees. Some regulators have proposed or adopted, or may propose or adopt, ESG rules or standards applicable to our business. Our Shared Purpose integrates strong ESG principles and practices into our culture, strategy and business practices. Our business practices and disclosures are evaluated against ESG standards which are continually evolving and not always well defined or readily measurable today. ESG-related expectations may also reflect contrasting or conflicting values or agendas. Our practices may not change in the particular ways or at the rate stakeholders expect. We may fail to meet our commitments or targets. Our policies and processes to evaluate and manage ESG priorities in coordination with other business priorities may not prove completely effective or fully satisfy our stakeholders. Customers and potential customers may choose not to do business with us based on our ESG practices and related policies and actions. We may face adverse regulatory, investor, media, or public scrutiny leading to business, reputational, or legal challenges. We are subject to extensive regulation, and potential further restrictive regulation may increase operating costs and limit growth We largely operate in the highly regulated insurance and broader financial services sectors and are subject to extensive laws and regulations that are complex and subject to change. Changes may lead to additional expenses, increased legal exposure, or increased reserve or capital requirements limiting our ability to grow or to achieve targeted profitability. Moreover, laws and regulations are administered and enforced by governmental authorities that exercise interpretive latitude, including: •State insurance regulators •State securities administrators •State attorneys general •Federal agencies including the SEC, the Financial Industry Regulatory Authority, the Department of Labor, the U.S. Department of Justice, the Consumer Financial Protection Bureau and the National Labor Relations BoardConsequently, compliance with one regulator’s or enforcement authority’s interpretation of a legal issue may not result in compliance with another’s interpretation of the same issue.There is risk that one regulator’s or enforcement authority’s interpretation of a legal issue may change to our detriment. There is also a risk that changes in the overall legal environment may cause us to change our views regarding the actions we need to take from a legal risk management perspective. This could necessitate changes to our practices that may adversely impact our business. In some cases, state insurance laws and regulations are generally intended to protect or benefit purchasers or users of insurance products, not holders of securities that we issue. These laws and regulations may limit our ability to grow or to improve the profitability of our business.A regulatory environment that requires rate increases to be approved, can dictate underwriting practices and mandate participation in loss sharing arrangements, may adversely affect results of operations and financial conditionPolitical events and positions can affect the insurance market, including efforts to suppress rates to a level that may not allow us to reach targeted levels of profitability. Regulatory challenges to rate increases, especially during inflationary periods with more significant rate changes, may restrict rate changes that may be required to achieve targeted levels of profitability and returns on equity. If we are unsuccessful, our results of operations could be negatively impacted. In addition, certain states have enacted laws that require an insurer conducting business in that state to participate in assigned risk plans, reinsurance facilities and joint underwriting associations. Certain states also require the insurer to offer coverage to all consumers, often restricting an insurer’s ability to charge the price it might otherwise charge for the risk acceptance. In these markets, we may be compelled to underwrite significant amounts of business at lower-than-desired rates, possibly leading to an unacceptable return on equity. Alternatively, as the facilities recognize a financial deficit, they could have the ability to assess participating insurers, adversely affecting our results of operations and financial condition. Laws and regulations of many states also limit an insurer’s ability to withdraw from one or more lines of insurance, except pursuant to a plan that is approved by the state insurance department. Certain states require an insurer to participate in guaranty funds for impaired or insolvent insurance companies. These funds periodically assess losses against all insurance companies doing business in the state. Our results of operations and financial condition could be adversely affected by any of these factors. Labor, the U.S. Department of Justice, the Consumer Financial Protection Bureau and the National Labor Relations Board Consequently, compliance with one regulator’s or enforcement authority’s interpretation of a legal issue may not result in compliance with another’s interpretation of the same issue. There is risk that one regulator’s or enforcement authority’s interpretation of a legal issue may change to our detriment. There is also a risk that changes in the overall legal environment may cause us to change our views regarding the actions we need to take from a legal risk management perspective. This could necessitate changes to our practices that may adversely impact our business. In some cases, state insurance laws and regulations are generally intended to protect or benefit purchasers or users of insurance products, not holders of securities that we issue. These laws and regulations may limit our ability to grow or to improve the profitability of our business. A regulatory environment that requires rate increases to be approved, can dictate underwriting practices and mandate participation in loss sharing arrangements, may adversely affect results of operations and financial condition Political events and positions can affect the insurance market, including efforts to suppress rates to a level that may not allow us to reach targeted levels of profitability. Regulatory challenges to rate increases, especially during inflationary periods with more significant rate changes, may restrict rate changes that may be required to achieve targeted levels of profitability and returns on equity. If we are unsuccessful, our results of operations could be negatively impacted. In addition, certain states have enacted laws that require an insurer conducting business in that state to participate in assigned risk plans, reinsurance facilities and joint underwriting associations. Certain states also require the insurer to offer coverage to all consumers, often restricting an insurer’s ability to charge the price it might otherwise charge for the risk acceptance. In these markets, we may be compelled to underwrite significant amounts of business at lower-than-desired rates, possibly leading to an unacceptable return on equity. Alternatively, as the facilities recognize a financial deficit, they could have the ability to assess participating insurers, adversely affecting our results of operations and financial condition. Laws and regulations of many states also limit an insurer’s ability to withdraw from one or more lines of insurance, except pursuant to a plan that is approved by the state insurance department. Certain states require an insurer to participate in guaranty funds for impaired or insolvent insurance companies. These funds periodically assess losses against all insurance companies doing business in the state. Our results of operations and financial condition could be adversely affected by any of these factors. The Allstate Corporation 29 The Allstate Corporation 29 The Allstate Corporation 29 2022 Form 10-K Part I - Item 1A. Risk Factors and Other Disclosures 2022 Form 10-K Part I - Item 1A. Risk Factors and Other Disclosures Regulatory reforms, and the more stringent application of existing regulations, may make it more expensive for us to conduct our businessThe federal government has enacted comprehensive regulatory reforms for financial services entities. As part of a larger effort to strengthen the regulation of the financial services market, certain reforms are applicable to the insurance industry.The Federal Insurance Office and Financial Stability Oversight Council have been established, and the federal government may enact reforms that affect the state insurance regulatory framework. The potential impact of state or federal measures that change the nature or scope of insurance and financial regulation is uncertain but may make it more expensive for us to conduct business and limit our ability to grow or achieve profitability.We have business process and information technology operations in Canada, India, the United Kingdom and Mexico that are subject to operating, regulatory and political risks in those countries. We may incur substantial costs and other negative consequences if any of these occur, including an adverse effect on our business, results of operations and financial condition.Losses from legal and regulatory actions may be material to our results of operations, cash flows and financial conditionWe are involved in various legal actions, including class-action litigation challenging a range of company practices and coverages provided by our insurance products, some of which involve claims for substantial or indeterminate amounts. We are also involved in various regulatory actions and inquiries, including market conduct exams by state insurance regulatory agencies. In the event of an unfavorable outcome in any of these matters, the ultimate liability may be more than amounts currently accrued or disclosed in our reasonably possible loss range and may be material to our results of operations, cash flows and financial condition. See Note 15 of the consolidated financial statements. Changes in or the application of accounting standards issued by standard-setting bodies and changes in tax laws may adversely affect our results of operations and financial conditionOur financial statements are subject to the application of accounting principles generally accepted in the United States of America, which are periodically revised, interpreted or expanded. Accordingly, we may be required to adopt new guidance or interpretations, which may have a material effect on our results of operations and financial condition and could adversely impact financial strength ratings.•Market declines, changes in business strategies or other events impacting the fair value of goodwill or purchased intangible assets could result in an impairment charge to income •Realization of our deferred tax assets assumes that we can fully utilize the deductions recognized for tax purposes; we may recognize additional tax expense if these assets are not fully utilized•New tax legislative initiatives may be enacted that may impact our effective tax rate and could adversely affect our tax positions or tax liabilities See MD&A, Application of Critical Accounting Estimates and Note 2 of the consolidated financial statements for further details.Loss of key vendor relationships, disruptions to the provision of products or services by a vendor, or failure of a vendor to provide and protect reliable data, and proprietary information, or personal information of our customers, claimants or employees could adversely affect our operationsWe rely on services and products provided by many vendors in the U.S. and abroad. These include vendors of computer hardware, software, cloud technology and software as a service, as well as vendors or outsourcing of services such as:•Claim adjustment services•Call center services for customer support•Human resource benefits management •Information technology support •Investment management servicesWe continue to identify ways to improve operating efficiency and reduce cost, which may result in additional outsourcing arrangements in the future. If we are not successful transitioning work to a vendor or a key vendor becomes unable to continue to provide products or services, fails to meet service level standards, or if any vendor fails to protect our confidential, proprietary, and other information, or if our business continuity plans do not sufficiently address a vendor-related business interruption, we may suffer operational impairments and financial losses.Our ability to attract, develop, and retain talent to maintain appropriate staffing levels and establish a successful work culture is critical to our successCompetition for qualified employees with highly specialized knowledge in areas such as underwriting, data and analytics, technology and e-commerce, is intense and we have experienced increased competition in hiring and retaining employees. The increased prevalence of remote-working arrangements that do not require employees to relocate to take a new job could contribute to higher turnover.Factors that affect our ability to attract and retain such employees include:•Compensation and benefits•Training and re-skilling programs•Reputation as a successful business with a culture of fair hiring, and of training and promoting qualified employees•Recognition of and response to changing trends and other circumstances that affect employees Regulatory reforms, and the more stringent application of existing regulations, may make it more expensive for us to conduct our businessThe federal government has enacted comprehensive regulatory reforms for financial services entities. As part of a larger effort to strengthen the regulation of the financial services market, certain reforms are applicable to the insurance industry.The Federal Insurance Office and Financial Stability Oversight Council have been established, and the federal government may enact reforms that affect the state insurance regulatory framework. The potential impact of state or federal measures that change the nature or scope of insurance and financial regulation is uncertain but may make it more expensive for us to conduct business and limit our ability to grow or achieve profitability.We have business process and information technology operations in Canada, India, the United Kingdom and Mexico that are subject to operating, regulatory and political risks in those countries. We may incur substantial costs and other negative consequences if any of these occur, including an adverse effect on our business, results of operations and financial condition.Losses from legal and regulatory actions may be material to our results of operations, cash flows and financial conditionWe are involved in various legal actions, including class-action litigation challenging a range of company practices and coverages provided by our insurance products, some of which involve claims for substantial or indeterminate amounts. We are also involved in various regulatory actions and inquiries, including market conduct exams by state insurance regulatory agencies. In the event of an unfavorable outcome in any of these matters, the ultimate liability may be more than amounts currently accrued or disclosed in our reasonably possible loss range and may be material to our results of operations, cash flows and financial condition. See Note 15 of the consolidated financial statements. Changes in or the application of accounting standards issued by standard-setting bodies and changes in tax laws may adversely affect our results of operations and financial conditionOur financial statements are subject to the application of accounting principles generally accepted in the United States of America, which are periodically revised, interpreted or expanded. Accordingly, we may be required to adopt new guidance or interpretations, which may have a material effect on our results of operations and financial condition and could adversely impact financial strength ratings.•Market declines, changes in business strategies or other events impacting the fair value of goodwill or purchased intangible assets could result in an impairment charge to income Regulatory reforms, and the more stringent application of existing regulations, may make it more expensive for us to conduct our business The federal government has enacted comprehensive regulatory reforms for financial services entities. As part of a larger effort to strengthen the regulation of the financial services market, certain reforms are applicable to the insurance industry. The Federal Insurance Office and Financial Stability Oversight Council have been established, and the federal government may enact reforms that affect the state insurance regulatory framework. The potential impact of state or federal measures that change the nature or scope of insurance and financial regulation is uncertain but may make it more expensive for us to conduct business and limit our ability to grow or achieve profitability. We have business process and information technology operations in Canada, India, the United Kingdom and Mexico that are subject to operating, regulatory and political risks in those countries. We may incur substantial costs and other negative consequences if any of these occur, including an adverse effect on our business, results of operations and financial condition. Losses from legal and regulatory actions may be material to our results of operations, cash flows and financial condition We are involved in various legal actions, including class-action litigation challenging a range of company practices and coverages provided by our insurance products, some of which involve claims for substantial or indeterminate amounts. We are also involved in various regulatory actions and inquiries, including market conduct exams by state insurance regulatory agencies. In the event of an unfavorable outcome in any of these matters, the ultimate liability may be more than amounts currently accrued or disclosed in our reasonably possible loss range and may be material to our results of operations, cash flows and financial condition. See Note 15 of the consolidated financial statements. Changes in or the application of accounting standards issued by standard-setting bodies and changes in tax laws may adversely affect our results of operations and financial condition Our financial statements are subject to the application of accounting principles generally accepted in the United States of America, which are periodically revised, interpreted or expanded. Accordingly, we may be required to adopt new guidance or interpretations, which may have a material effect on our results of operations and financial condition and could adversely impact financial strength ratings. •Market declines, changes in business strategies or other events impacting the fair value of goodwill or purchased intangible assets could result in an impairment charge to income •Realization of our deferred tax assets assumes that we can fully utilize the deductions recognized for tax purposes; we may recognize additional tax expense if these assets are not fully utilized•New tax legislative initiatives may be enacted that may impact our effective tax rate and could adversely affect our tax positions or tax liabilities See MD&A, Application of Critical Accounting Estimates and Note 2 of the consolidated financial statements for further details.Loss of key vendor relationships, disruptions to the provision of products or services by a vendor, or failure of a vendor to provide and protect reliable data, and proprietary information, or personal information of our customers, claimants or employees could adversely affect our operationsWe rely on services and products provided by many vendors in the U.S. and abroad. These include vendors of computer hardware, software, cloud technology and software as a service, as well as vendors or outsourcing of services such as:•Claim adjustment services•Call center services for customer support•Human resource benefits management •Information technology support •Investment management servicesWe continue to identify ways to improve operating efficiency and reduce cost, which may result in additional outsourcing arrangements in the future. If we are not successful transitioning work to a vendor or a key vendor becomes unable to continue to provide products or services, fails to meet service level standards, or if any vendor fails to protect our confidential, proprietary, and other information, or if our business continuity plans do not sufficiently address a vendor-related business interruption, we may suffer operational impairments and financial losses.Our ability to attract, develop, and retain talent to maintain appropriate staffing levels and establish a successful work culture is critical to our successCompetition for qualified employees with highly specialized knowledge in areas such as underwriting, data and analytics, technology and e-commerce, is intense and we have experienced increased competition in hiring and retaining employees. The increased prevalence of remote-working arrangements that do not require employees to relocate to take a new job could contribute to higher turnover.Factors that affect our ability to attract and retain such employees include:•Compensation and benefits•Training and re-skilling programs•Reputation as a successful business with a culture of fair hiring, and of training and promoting qualified employees•Recognition of and response to changing trends and other circumstances that affect employees •Realization of our deferred tax assets assumes that we can fully utilize the deductions recognized for tax purposes; we may recognize additional tax expense if these assets are not fully utilized •New tax legislative initiatives may be enacted that may impact our effective tax rate and could adversely affect our tax positions or tax liabilities See MD&A, Application of Critical Accounting Estimates and Note 2 of the consolidated financial statements for further details. Loss of key vendor relationships, disruptions to the provision of products or services by a vendor, or failure of a vendor to provide and protect reliable data, and proprietary information, or personal information of our customers, claimants or employees could adversely affect our operations We rely on services and products provided by many vendors in the U.S. and abroad. These include vendors of computer hardware, software, cloud technology and software as a service, as well as vendors or outsourcing of services such as: •Claim adjustment services •Call center services for customer support •Human resource benefits management •Information technology support •Investment management services We continue to identify ways to improve operating efficiency and reduce cost, which may result in additional outsourcing arrangements in the future. If we are not successful transitioning work to a vendor or a key vendor becomes unable to continue to provide products or services, fails to meet service level standards, or if any vendor fails to protect our confidential, proprietary, and other information, or if our business continuity plans do not sufficiently address a vendor-related business interruption, we may suffer operational impairments and financial losses. Our ability to attract, develop, and retain talent to maintain appropriate staffing levels and establish a successful work culture is critical to our success Competition for qualified employees with highly specialized knowledge in areas such as underwriting, data and analytics, technology and e-commerce, is intense and we have experienced increased competition in hiring and retaining employees. The increased prevalence of remote-working arrangements that do not require employees to relocate to take a new job could contribute to higher turnover. Factors that affect our ability to attract and retain such employees include: •Compensation and benefits •Training and re-skilling programs •Reputation as a successful business with a culture of fair hiring, and of training and promoting qualified employees •Recognition of and response to changing trends and other circumstances that affect employees 30 www.allstate.com 30 www.allstate.com 30 www.allstate.com Part I - Item 1A. Risk Factors and Other Disclosures 2022 Form 10-K Part I - Item 1A. Risk Factors and Other Disclosures 2022 Form 10-K The unexpected loss of key personnel could have a material adverse impact on our business because of the loss of their skills, knowledge of our products and offerings and years of industry experience and, in some cases, the difficulty of promptly finding qualified replacement personnel. Misconduct or fraudulent acts by employees, agents and third parties may expose us to financial loss, disruption of business, regulatory assessments and reputational harm The company and the insurance industry are susceptible to past and future misconduct or fraudulent activities by employees, representative agents, vendors, customers and other third parties. These activities could include:•Fraud against the company, its employees and its customers through illegal or prohibited activities •Unauthorized acts or representations, unauthorized use or disclosure of personal or proprietary information, deception, and misappropriation of funds or other benefitsItem 1B. Unresolved Staff CommentsNone.Item 2. PropertiesOn October 18, 2022, Allstate closed the sale of its headquarters in Northbrook, Illinois. The sale will reduce real estate expenses and further advance Allstate’s multi-year Transformative Growth strategy.In Illinois, the Company has 49 locations totaling 609 thousand square feet of office space.In North America, we operate from approximately 862 retail stores, administrative, data processing, claims handling and other support facilities that total 1.1 million square feet owned and 5.0 million square feet leased.Outside North America, we own one and lease two properties in Northern Ireland comprising approximately 198 thousand square feet. We also have two leased facilities in India for approximately 441 thousand square feet, two leased facilities in London for seven thousand square feet and approximately two thousand square feet in other international locations.The locations where Allstate exclusive agencies operate in the U.S. are normally leased by the agencies.Item 3. Legal ProceedingsInformation required for Item 3 is incorporated by reference to the discussion under the heading “Regulation and compliance” and under the heading “Legal and regulatory proceedings and inquiries” in Note 15 of the consolidated financial statements.Item 4. Mine Safety DisclosuresNot applicable. The unexpected loss of key personnel could have a material adverse impact on our business because of the loss of their skills, knowledge of our products and offerings and years of industry experience and, in some cases, the difficulty of promptly finding qualified replacement personnel. Misconduct or fraudulent acts by employees, agents and third parties may expose us to financial loss, disruption of business, regulatory assessments and reputational harm The company and the insurance industry are susceptible to past and future misconduct or fraudulent activities by employees, representative agents, vendors, customers and other third parties. These activities could include:•Fraud against the company, its employees and its customers through illegal or prohibited activities •Unauthorized acts or representations, unauthorized use or disclosure of personal or proprietary information, deception, and misappropriation of funds or other benefitsItem 1B. Unresolved Staff CommentsNone. The unexpected loss of key personnel could have a material adverse impact on our business because of the loss of their skills, knowledge of our products and offerings and years of industry experience and, in some cases, the difficulty of promptly finding qualified replacement personnel. Misconduct or fraudulent acts by employees, agents and third parties may expose us to financial loss, disruption of business, regulatory assessments and reputational harm The company and the insurance industry are susceptible to past and future misconduct or fraudulent activities by employees, representative agents, vendors, customers and other third parties. These activities could include: •Fraud against the company, its employees and its customers through illegal or prohibited activities •Unauthorized acts or representations, unauthorized use or disclosure of personal or proprietary information, deception, and misappropriation of funds or other benefits Item 1B. Unresolved Staff Comments None. Item 2. PropertiesOn October 18, 2022, Allstate closed the sale of its headquarters in Northbrook, Illinois. The sale will reduce real estate expenses and further advance Allstate’s multi-year Transformative Growth strategy.In Illinois, the Company has 49 locations totaling 609 thousand square feet of office space.In North America, we operate from approximately 862 retail stores, administrative, data processing, claims handling and other support facilities that total 1.1 million square feet owned and 5.0 million square feet leased.Outside North America, we own one and lease two properties in Northern Ireland comprising approximately 198 thousand square feet. We also have two leased facilities in India for approximately 441 thousand square feet, two leased facilities in London for seven thousand square feet and approximately two thousand square feet in other international locations.The locations where Allstate exclusive agencies operate in the U.S. are normally leased by the agencies.Item 3. Legal ProceedingsInformation required for Item 3 is incorporated by reference to the discussion under the heading “Regulation and compliance” and under the heading “Legal and regulatory proceedings and inquiries” in Note 15 of the consolidated financial statements.Item 4. Mine Safety DisclosuresNot applicable. Item 2. Properties On October 18, 2022, Allstate closed the sale of its headquarters in Northbrook, Illinois. The sale will reduce real estate expenses and further advance Allstate’s multi-year Transformative Growth strategy. In Illinois, the Company has 49 locations totaling 609 thousand square feet of office space. In North America, we operate from approximately 862 retail stores, administrative, data processing, claims handling and other support facilities that total 1.1 million square feet owned and 5.0 million square feet leased. Outside North America, we own one and lease two properties in Northern Ireland comprising approximately 198 thousand square feet. We also have two leased facilities in India for approximately 441 thousand square feet, two leased facilities in London for seven thousand square feet and approximately two thousand square feet in other international locations. The locations where Allstate exclusive agencies operate in the U.S. are normally leased by the agencies. Item 3. Legal Proceedings Information required for Item 3 is incorporated by reference to the discussion under the heading “Regulation and compliance” and under the heading “Legal and regulatory proceedings and inquiries” in Note 15 of the consolidated financial statements. Item 4. Mine Safety Disclosures Not applicable. The Allstate Corporation 31 The Allstate Corporation 31 The Allstate Corporation 31 2022 Form 10-K 2022 Form 10-K Part II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities As of January 31, 2023, there were 59,597 holders of record of The Allstate Corporation’s common stock. The principal market for the common stock is the New York Stock Exchange, where our common stock trades under the trading symbol “ALL”. Our common stock is also listed on the Chicago Stock Exchange. Common stock performance graph The following performance graph compares the cumulative total shareholder return on Allstate common stock for a five-year period (December 31, 2017 to December 31, 2022) with the cumulative total return of the S&P Property and Casualty Insurance Index (S&P P/C) and the S&P 500 stock index. Value at each year-end of $100 initial investment made on December 31, 201712/31/201712/31/201812/31/201912/31/202012/31/202112/31/2022Allstate$100.00 $80.48 $111.72 $111.59 $122.61 $145.10 S&P P/C$100.00 $95.31 $119.96 $127.56 $149.89 $178.18 S&P 500$100.00 $95.61 $125.70 $148.81 $191.48 $156.77" }, { "status": "MODIFIED", "current_title": "Allstate Health and Benefits reinsurance ceded", "prior_title": "Allstate Health and Benefits reinsurance ceded", "similarity_score": 0.893, "confidence": "high", "key_changes": [ "Reworded sentence: \"Best financial strength ratingReinsurance recoverable on paid and unpaid benefitsAs of December 31,($ in millions)20232022Mutual of Omaha InsuranceA+A+$70 $65 Everlake Life Insurance CompanyNRA+33 35 Argo Capital Group Ltd.\"", "Reworded sentence: \"No reinsurance recoverables have been written off in the three-years ended December 31, 2023.\"" ], "current_body": "The vast majority of reinsurance relates to the disposition of long-term care and other closed blocks of business. We retain primary liability as a direct insurer for all risks ceded to reinsurers. Reinsurance recoverables by reinsurer, net S&P financial strength ratingA.M. Best financial strength ratingReinsurance recoverable on paid and unpaid benefitsAs of December 31,($ in millions)20232022Mutual of Omaha InsuranceA+A+$70 $65 Everlake Life Insurance CompanyNRA+33 35 Argo Capital Group Ltd. NRNR24 20 General Re Life CorporationAA+A++15 13 Midlands Casualty Insurance Company NRNR15 16 Other (1)5 6 Credit loss allowance(3)(3)Total$159 $152 Other (1) (1)As of December 31, 2023, the other category includes $4 million and $5 million of recoverables due from reinsurers rated A- or better by S&P and A.M. Best, respectively. As of December 31, 2022, the other category includes $3 million and $4 million of recoverables due from reinsurers rated A- or better by S&P and A.M. Best, respectively. We continuously monitor the creditworthiness of reinsurers in order to determine our risk of recoverability on an individual and aggregate basis. No reinsurance recoverables have been written off in the three-years ended December 31, 2023. 64 www.allstate.com 64 www.allstate.com 64 www.allstate.com 2023 Form 10-K Investments 2023 Form 10-K Investments", "prior_body": "The vast majority of reinsurance relates to the disposition of long-term care and other closed blocks of business. We retain primary liability as a direct insurer for all risks ceded to reinsurers. Reinsurance recoverables by reinsurer, net S&P financial strength ratingA.M. Best financial strength ratingReinsurance recoverable on paid and unpaid benefitsAs of December 31,($ in millions)20222021Mutual of Omaha InsuranceA+A+$55 $55 Everlake Life Insurance CompanyNRA+35 39 Argo Capital Group Ltd. NRNR20 19 General Re Life CorporationAA+A++10 16 Midlands Casualty Insurance Company NRNR16 16 Other (1)6 17 Credit loss allowance(3)(8)Total$139 $154 Other (1) (1)As of December 31, 2022, the other category includes $3 million and $4 million of recoverables due from reinsurers rated A- or better by S&P and A.M. Best, respectively. As of December 31, 2021, the other category includes $8 million and $5 million of recoverables due from reinsurers rated A- or better by S&P and A.M. Best, respectively. We continuously monitor the creditworthiness of reinsurers in order to determine our risk of recoverability on an individual and aggregate basis. No reinsurance recoverables have been written off in the three-years ended December 31, 2022. 64 www.allstate.com 64 www.allstate.com 64 www.allstate.com Investments 2022 Form 10-K Investments 2022 Form 10-K" }, { "status": "MODIFIED", "current_title": "Overview and strategy", "prior_title": "Overview and strategy", "similarity_score": 0.875, "confidence": "high", "key_changes": [ "Reworded sentence: \"The portfolio is largely comprised of high-quality liquid fixed income securities and short-term investments.\"", "Reworded sentence: \"A portion of these investments seek returns in markets or asset classes that are dislocated or special situations, primarily in private markets.Investments in the Middle East As of December 31, 2023, we have approximately $47 million investment exposure in the Middle East, of which approximately $43 million is held in Israel, which is primarily indirect exposure through funds managed by external asset managers.\"", "Reworded sentence: \"Investments in the Middle East As of December 31, 2023, we have approximately $47 million investment exposure in the Middle East, of which approximately $43 million is held in Israel, which is primarily indirect exposure through funds managed by external asset managers.\"" ], "current_body": "The return on our investment portfolios is an important component of our ability to offer good value to customers, fund business improvements and create value for shareholders. Investment portfolios are held for Property-Liability, Protection Services, Allstate Health and Benefits and Corporate and Other operations. While taking into consideration the investment portfolio in aggregate, management of the underlying portfolios is significantly influenced by the nature of each respective business and its corresponding liability profile. For each business, we identify a strategic asset allocation which considers both the nature of the liabilities and the risk and return characteristics of the various asset classes in which we invest. This allocation is informed by our long-term business and market expectations, as well as other considerations such as risk appetite, portfolio diversification, duration, desired liquidity and capital. Within appropriate ranges relative to strategic allocations, tactical allocations are made in consideration of prevailing and potential future market conditions. We manage risks that involve uncertainty related to interest rates, inflation, credit spreads, equity returns and currency exchange rates. The Property-Liability portfolio emphasizes protection of principal and consistent income generation, within a total return framework. This approach has produced competitive returns over the long term and is designed to ensure financial strength and stability for paying claims, while maximizing economic value and surplus growth. Products with lower liquidity needs, such as auto insurance and run-off lines, and capital create capacity to invest in less liquid higher yielding fixed income securities, performance-based investments such as limited partnerships and equity securities. Products with higher liquidity needs, such as homeowners insurance, are invested primarily in high quality liquid fixed income securities. The Protection Services portfolio is focused on protection of principal and consistent income generation, within a total return framework. The portfolio is largely comprised of fixed income securities with a lesser allocation to equity securities and short-term investments. The Allstate Health and Benefits portfolio is focused on protection of principal and consistent income generation while targeting an appropriate return on capital. The portfolio is largely comprised of fixed income securities with a small allocation to commercial mortgage loans and equity securities. The Corporate and Other portfolio is focused on liquidity needs and capital preservation within a total return framework. The portfolio is largely comprised of high-quality liquid fixed income securities and short-term investments. We utilize two primary strategies to manage risks and returns and to position our portfolio to take advantage of market opportunities while attempting to mitigate adverse effects. As strategies and market conditions evolve, the asset allocation may change.Market-based strategy seeks to deliver predictable earnings aligned to business needs and provide flexibility to adjust investment risk profile based on enterprise objectives and market opportunities primarily through public and private fixed income investments and public equity securities.Performance-based strategy seeks to deliver attractive risk-adjusted returns and supplement market risk with idiosyncratic risk. Returns are impacted by a variety of factors including general macroeconomic and public market conditions as public benchmarks are often used in the valuation of underlying investments. Variability in earnings will also result from the performance of the underlying assets or business and the timing of sales of those investments. Earnings from the sales of investments may be recorded as net investment income or net gains and losses on investments and derivatives. The portfolio, which primarily includes private equity (including infrastructure investments) and real estate with a majority being limited partnerships, is diversified across a number of characteristics, including managers or partners, vintage years, investment strategies, geographies (including international) and industry sectors or property types. These investments are generally illiquid in nature, often require specialized expertise, typically involve a third-party manager, and enhance returns and income through transformation at the company or property level. A portion of these investments seek returns in markets or asset classes that are dislocated or special situations, primarily in private markets.Investments in the Middle East As of December 31, 2023, we have approximately $47 million investment exposure in the Middle East, of which approximately $43 million is held in Israel, which is primarily indirect exposure through funds managed by external asset managers. Investments in Russia and Ukraine As of December 31, 2023, we do not have any direct or indirect investments in Russia, Belarus or Ukraine. We utilize two primary strategies to manage risks and returns and to position our portfolio to take advantage of market opportunities while attempting to mitigate adverse effects. As strategies and market conditions evolve, the asset allocation may change. Market-based strategy seeks to deliver predictable earnings aligned to business needs and provide flexibility to adjust investment risk profile based on enterprise objectives and market opportunities primarily through public and private fixed income investments and public equity securities. Performance-based strategy seeks to deliver attractive risk-adjusted returns and supplement market risk with idiosyncratic risk. Returns are impacted by a variety of factors including general macroeconomic and public market conditions as public benchmarks are often used in the valuation of underlying investments. Variability in earnings will also result from the performance of the underlying assets or business and the timing of sales of those investments. Earnings from the sales of investments may be recorded as net investment income or net gains and losses on investments and derivatives. The portfolio, which primarily includes private equity (including infrastructure investments) and real estate with a majority being limited partnerships, is diversified across a number of characteristics, including managers or partners, vintage years, investment strategies, geographies (including international) and industry sectors or property types. These investments are generally illiquid in nature, often require specialized expertise, typically involve a third-party manager, and enhance returns and income through transformation at the company or property level. A portion of these investments seek returns in markets or asset classes that are dislocated or special situations, primarily in private markets. Investments in the Middle East As of December 31, 2023, we have approximately $47 million investment exposure in the Middle East, of which approximately $43 million is held in Israel, which is primarily indirect exposure through funds managed by external asset managers. Investments in Russia and Ukraine As of December 31, 2023, we do not have any direct or indirect investments in Russia, Belarus or Ukraine. The Allstate Corporation 65 The Allstate Corporation 65 The Allstate Corporation 65 2023 Form 10-K Investments 2023 Form 10-K Investments Investments Outlook We plan to focus on the following priorities:•Enhance investment portfolio returns through use of a dynamic capital allocation framework and focus on tax efficiency.•Leverage our broad capabilities to manage the portfolio to earn higher risk-adjusted returns on capital.•Invest for the specific needs and characteristics of Allstate’s businesses, including its corresponding liability profile.We utilize our integrated enterprise risk and return management framework to determine the amount of investment risk we are willing to accept. After reducing interest rate risk by shortening the portfolio duration beginning in late 2021, during 2023 we extended the fixed income portfolio duration as the sustained higher market yields provide an opportunity to increase risk-adjusted returns. As recession risks remain elevated, we also retained defensive positioning to equity risk and credit risk in the portfolio through a reduced allocation to public equity, high yield bonds and bank loans. We expect to maintain performance-based investments in our portfolio, consistent with our strategy to have a greater proportion of return derived from idiosyncratic assets or operating performance.Contractual maturities and yields of fixed income securities for the next three yearsFixed income securities($ in millions)Carrying valueInvestment yield2024$3,374 3.0 %20256,288 3.5 20265,565 3.5 Investments Outlook We plan to focus on the following priorities:•Enhance investment portfolio returns through use of a dynamic capital allocation framework and focus on tax efficiency.•Leverage our broad capabilities to manage the portfolio to earn higher risk-adjusted returns on capital.•Invest for the specific needs and characteristics of Allstate’s businesses, including its corresponding liability profile.We utilize our integrated enterprise risk and return management framework to determine the amount of investment risk we are willing to accept. After reducing interest rate risk by shortening the portfolio duration beginning in late 2021, during 2023 we extended the fixed income portfolio duration as the sustained higher", "prior_body": "The return on our investment portfolios is an important component of our ability to offer good value to customers, fund business improvements and create value for shareholders. Investment portfolios are held for Property-Liability, Protection Services, Allstate Health and Benefits and Corporate and Other operations. While taking into consideration the investment portfolio in aggregate, management of the underlying portfolios is significantly influenced by the nature of each respective business and its corresponding liability profile. For each business, we identify a strategic asset allocation which considers both the nature of the liabilities and the risk and return characteristics of the various asset classes in which we invest. This allocation is informed by our long-term business and market expectations, as well as other considerations such as risk appetite, portfolio diversification, duration, desired liquidity and capital. Within appropriate ranges relative to strategic allocations, tactical allocations are made in consideration of prevailing and potential future market conditions. We manage risks that involve uncertainty related to interest rates, inflation, credit spreads, equity returns and currency exchange rates. The Property-Liability portfolio emphasizes protection of principal and consistent income generation, within a total return framework. This approach has produced competitive returns over the long term and is designed to ensure financial strength and stability for paying claims, while maximizing economic value and surplus growth. Products with lower liquidity needs, such as auto insurance and run-off lines, and capital create capacity to invest in less liquid higher yielding fixed income securities, performance-based investments such as limited partnerships and equity securities. Products with higher liquidity needs, such as homeowners insurance, are invested primarily in high quality liquid fixed income securities. The Protection Services portfolio is focused on protection of principal and consistent income generation, within a total return framework. The portfolio is largely comprised of fixed income securities with a lesser allocation to equity securities and short-term investments. The Allstate Health and Benefits portfolio is focused on protection of principal and consistent income generation while targeting an appropriate return on capital. The portfolio is largely comprised of fixed income securities with a small allocation to commercial mortgage loans and equity securities. The Corporate and Other portfolio is focused on liquidity needs and capital preservation within a total return framework. The portfolio is largely comprised of high-quality liquid fixed income securities and short-term investments.We utilize two primary strategies to manage risks and returns and to position our portfolio to take advantage of market opportunities while attempting to mitigate adverse effects. As strategies and market conditions evolve, the asset allocation may change.Market-based strategy seeks to deliver predictable earnings aligned to business needs and provide flexibility to adjust investment risk profile based on enterprise objectives and market opportunities primarily through public and private fixed income investments and public equity securities.Performance-based strategy seeks to deliver attractive risk-adjusted returns and supplement market risk with idiosyncratic risk. Returns are impacted by a variety of factors including general macroeconomic and public market conditions as public benchmarks are often used in the valuation of underlying investments. Variability in earnings will also result from the performance of the underlying assets or business and the timing of sales of those investments. Earnings from the sales of investments may be recorded as net investment income or net gains and losses on investments and derivatives. The portfolio, which primarily includes private equity (including infrastructure investments) and real estate with a majority being limited partnerships, is diversified across a number of characteristics, including managers or partners, vintage years, investment strategies, geographies (including international) and industry sectors or property types. These investments are generally illiquid in nature, often require specialized expertise, typically involve a third-party manager, and enhance returns and income through transformation at the company or property level. A portion of these investments seek returns in markets or asset classes that are dislocated or special situations, primarily in private markets. The Corporate and Other portfolio is focused on liquidity needs and capital preservation within a total return framework. The portfolio is largely comprised of high-quality liquid fixed income securities and short-term investments. We utilize two primary strategies to manage risks and returns and to position our portfolio to take advantage of market opportunities while attempting to mitigate adverse effects. As strategies and market conditions evolve, the asset allocation may change. Market-based strategy seeks to deliver predictable earnings aligned to business needs and provide flexibility to adjust investment risk profile based on enterprise objectives and market opportunities primarily through public and private fixed income investments and public equity securities. Performance-based strategy seeks to deliver attractive risk-adjusted returns and supplement market risk with idiosyncratic risk. Returns are impacted by a variety of factors including general macroeconomic and public market conditions as public benchmarks are often used in the valuation of underlying investments. Variability in earnings will also result from the performance of the underlying assets or business and the timing of sales of those investments. Earnings from the sales of investments may be recorded as net investment income or net gains and losses on investments and derivatives. The portfolio, which primarily includes private equity (including infrastructure investments) and real estate with a majority being limited partnerships, is diversified across a number of characteristics, including managers or partners, vintage years, investment strategies, geographies (including international) and industry sectors or property types. These investments are generally illiquid in nature, often require specialized expertise, typically involve a third-party manager, and enhance returns and income through transformation at the company or property level. A portion of these investments seek returns in markets or asset classes that are dislocated or special situations, primarily in private markets. The Allstate Corporation 65 The Allstate Corporation 65 The Allstate Corporation 65 2022 Form 10-K Investments 2022 Form 10-K Investments Macroeconomic impacts Supply chain disruptions, labor shortages and other macroeconomic factors have increased inflation, which may have an adverse impact on investment valuations and returns. As inflation continued to remain elevated, the Federal Reserve significantly increased interest rates and credit spreads widened reflecting ongoing recession concerns. These factors along with other ongoing impacts from the pandemic create significant economic uncertainty and the resulting market volatility may continue to impact our investment valuations and returns.Investments in Russia and Ukraine As of December 31, 2022, we do not have any direct investments in Russia, Belarus or Ukraine. We have indirect exposure of less than $1 million in Russia and Ukraine through broad-based, global funds managed by external asset managers.Investments Outlook We plan to focus on the following priorities:•Enhance investment portfolio returns through use of a dynamic capital allocation framework and focus on tax efficiency.•Leverage our broad capabilities to manage the portfolio to earn higher risk-adjusted returns on capital.•Invest for the specific needs and characteristics of Allstate’s businesses, including its corresponding liability profile.Through our integrated enterprise risk and return management framework, we concluded in late 2021 that due to increasing enterprise risks from elevated inflation, the amount of investment risk we were willing to accept had declined. As a result, we decreased the allocation of economic capital to the investment portfolio. This decision led to a reduction in interest rate risk by shortening the portfolio duration beginning in the fourth quarter of 2021, primarily through the sale of long corporate and municipal bonds and the use of derivatives. These proactive actions mitigated portfolio losses by approximately $2 billion in 2022. As recession risks increased during 2022, we also reduced the amount of equity risk and credit risk in the portfolio through a reduction in public equity, high yield bonds and bank loans. We expect to maintain performance-based investments in our portfolio, consistent with our strategy to have a greater proportion of return derived from idiosyncratic asset or operating performance. The portfolio remains defensively positioned to interest rate, equity and credit risk at year-end relative to our positioning prior to these risk-reducing actions.Contractual maturities and yields of fixed income securities for the next three yearsFixed income securities($ in millions)Carrying valueInvestment yield2023$2,836 2.9 %20247,504 2.9 20257,331 3.2 Macroeconomic impacts Supply chain disruptions, labor shortages and other macroeconomic factors have increased inflation, which may have an adverse impact on investment valuations and returns. As inflation continued to remain elevated, the Federal Reserve significantly increased interest rates and credit spreads widened reflecting ongoing recession concerns. These factors along with other ongoing impacts from the pandemic create significant economic uncertainty and the resulting market volatility may continue to impact our investment valuations and returns.Investments in Russia and Ukraine As of December 31, 2022, we do not have any direct investments in Russia, Belarus or Ukraine. We have indirect exposure of less than $1 million in Russia and Ukraine through broad-based, global funds managed by external asset managers.Investments Outlook We plan to focus on the following priorities:•Enhance investment portfolio returns through use of a dynamic capital allocation framework and focus on tax efficiency.•Leverage our broad capabilities to manage the portfolio to earn higher risk-adjusted returns on capital.•Invest for the specific needs and characteristics of Allstate’s businesses, including its corresponding liability profile. Macroeconomic impacts Supply chain disruptions, labor shortages and other macroeconomic factors have increased inflation, which may have an adverse impact on investment valuations and returns. As inflation continued to remain elevated, the Federal Reserve significantly increased interest rates and credit spreads widened reflecting ongoing recession concerns. These factors along with other ongoing impacts from the pandemic create significant economic uncertainty and the resulting market volatility may continue to impact our investment valuations and returns. Investments in Russia and Ukraine As of December 31, 2022, we do not have any direct investments in Russia, Belarus or Ukraine. We have indirect exposure of less than $1 million in Russia and Ukraine through broad-based, global funds managed by external asset managers." }, { "status": "MODIFIED", "current_title": "Run-off Property-Liability net reserve reestimates", "prior_title": "Run-off Property-Liability net reserve reestimates", "similarity_score": 0.868, "confidence": "high", "key_changes": [ "Added sentence: \"Reserve reestimates in 2023 primarily related to new reported information and defense costs for asbestos and other run-off exposures and higher than expected environmental reported losses.\"", "Reworded sentence: \"Reserve reestimates in 2023 primarily related to new reported information and defense costs for asbestos and other run-off exposures and higher than expected environmental reported losses.\"", "Reworded sentence: \"Reserves and claim activity before (Gross) and after (Net) the effects of reinsurance202320222021($ in millions, except ratios)GrossNetGrossNetGrossNetAsbestos claimsBeginning reserves$1,190 $811 $1,210 $828 $1,204 $827 Incurred claims and claims expense56 44 59 34 100 63 Claims and claims expense paid(80)(51)(79)(51)(94)(62)Ending reserves$1,166 $804 $1,190 $811 $1,210 $828 Annual survival ratio14.6 15.8 15.1 15.9 12.9 13.4 3-year survival ratio13.8 14.8 13.1 14.0 11.1 12.0 Environmental claimsBeginning reserves$328 $267 $273 $226 $249 $206 Incurred claims and claims expense23 18 79 56 50 40 Claims and claims expense paid(20)(18)(24)(15)(26)(20)Ending reserves$331 $267 $328 $267 $273 $226 Annual survival ratio16.6 14.8 13.7 17.8 10.5 11.3 3-year survival ratio14.4 15.1 14.5 15.4 10.6 10.6 Combined environmental and asbestos claimsAnnual survival ratio15.0 15.5 14.7 16.3 12.4 12.9 3-year survival ratio13.9 14.8 13.3 14.3 11.0 11.7 Percentage of IBNR in ending reserves55.7 %055.9 %054.8 %\"" ], "current_body": "Reserve reestimates in 2023 primarily related to new reported information and defense costs for asbestos and other run-off exposures and higher than expected environmental reported losses. Reserve reestimates in 2022 primarily related to new reported information and defense costs for asbestos and higher than expected reported losses for environmental and other run-off exposures. Reserve reestimates in 2023 primarily related to new reported information and defense costs for asbestos and other run-off exposures and higher than expected environmental reported losses. Reserve reestimates in 2023 primarily related to new reported information and defense costs for asbestos and other run-off exposures and higher than expected environmental reported losses. Reserve reestimates in 2022 primarily related to new reported information and defense costs for asbestos and higher than expected reported losses for environmental and other run-off exposures. Reserve reestimates in 2022 primarily related to new reported information and defense costs for asbestos and higher than expected reported losses for environmental and other run-off exposures. Reserves and claim activity before (Gross) and after (Net) the effects of reinsurance202320222021($ in millions, except ratios)GrossNetGrossNetGrossNetAsbestos claimsBeginning reserves$1,190 $811 $1,210 $828 $1,204 $827 Incurred claims and claims expense56 44 59 34 100 63 Claims and claims expense paid(80)(51)(79)(51)(94)(62)Ending reserves$1,166 $804 $1,190 $811 $1,210 $828 Annual survival ratio14.6 15.8 15.1 15.9 12.9 13.4 3-year survival ratio13.8 14.8 13.1 14.0 11.1 12.0 Environmental claimsBeginning reserves$328 $267 $273 $226 $249 $206 Incurred claims and claims expense23 18 79 56 50 40 Claims and claims expense paid(20)(18)(24)(15)(26)(20)Ending reserves$331 $267 $328 $267 $273 $226 Annual survival ratio16.6 14.8 13.7 17.8 10.5 11.3 3-year survival ratio14.4 15.1 14.5 15.4 10.6 10.6 Combined environmental and asbestos claimsAnnual survival ratio15.0 15.5 14.7 16.3 12.4 12.9 3-year survival ratio13.9 14.8 13.3 14.3 11.0 11.7 Percentage of IBNR in ending reserves55.7 %055.9 %054.8 %", "prior_body": "Reserve reestimates in 2022 primarily related to new reported information and defense costs for asbestos and higher than expected reported losses for environmental and other run-off exposures. Reserve reestimates in 2021 primarily related to new reported information for asbestos and environmental and higher than expected reported losses for environmental and other run-off exposures. Reserve reestimates in 2022 primarily related to new reported information and defense costs for asbestos and higher than expected reported losses for environmental and other run-off exposures. Reserve reestimates in 2022 primarily related to new reported information and defense costs for asbestos and higher than expected reported losses for environmental and other run-off exposures. Reserve reestimates in 2021 primarily related to new reported information for asbestos and environmental and higher than expected reported losses for environmental and other run-off exposures. Reserve reestimates in 2021 primarily related to new reported information for asbestos and environmental and higher than expected reported losses for environmental and other run-off exposures. Reserves and claim activity before (Gross) and after (Net) the effects of reinsurance202220212020($ in millions, except ratios)GrossNetGrossNetGrossNetAsbestos claimsBeginning reserves$1,210 $828 $1,204 $827 $1,172 $810 Incurred claims and claims expense59 34 100 63 132 78 Claims and claims expense paid(79)(51)(94)(62)(100)(61)Ending reserves$1,190 $811 $1,210 $828 $1,204 $827 Annual survival ratio15.1 15.9 12.9 13.4 12.0 13.6 3-year survival ratio13.1 14.0 11.1 12.0 10.3 12.0 Environmental claimsBeginning reserves$273 $226 $249 $206 $219 $179 Incurred claims and claims expense79 56 50 40 49 44 Claims and claims expense paid(24)(15)(26)(20)(19)(17)Ending reserves$328 $267 $273 $226 $249 $206 Annual survival ratio13.7 17.8 10.5 11.3 13.1 12.1 3-year survival ratio14.5 15.4 10.6 10.6 10.5 10.3 Combined environmental and asbestos claimsAnnual survival ratio14.7 16.3 12.4 12.9 12.2 13.2 3-year survival ratio13.3 14.3 11.0 11.7 10.3 11.6 Percentage of IBNR in ending reserves55.9 %054.8 %050.3 %" }, { "status": "MODIFIED", "current_title": "Run-off Property-Liability", "prior_title": "Run-off Property-Liability", "similarity_score": 0.847, "confidence": "high", "key_changes": [ "Reworded sentence: \"Run-off Property-Liability net reserve reestimates202320222021($ in millions)January 1 reservesReserve reestimatesJanuary 1 reservesReserve reestimatesJanuary 1 reservesReserve reestimatesAsbestos claims$811 $44 $828 $34 $827 $63 Environmental claims267 18 226 56 206 40 Other run-off lines373 27 367 35 375 13 Total $1,451 $89 $1,421 $125 $1,408 $116 Underwriting loss$(94)$(129)$(120)\"" ], "current_body": "We conduct an annual review in the third quarter of each year to evaluate and establish asbestos, environmental and other run-off reserves. Reserves are recorded in the reporting period in which they are determined. Using established industry and actuarial best practices and assuming no change in the regulatory or economic environment, this detailed and comprehensive methodology determines reserves based on assessments of the characteristics of exposure (e.g. claim activity, potential liability, jurisdiction, products versus non-products exposure) presented by policyholders. Run-off Property-Liability net reserve reestimates202320222021($ in millions)January 1 reservesReserve reestimatesJanuary 1 reservesReserve reestimatesJanuary 1 reservesReserve reestimatesAsbestos claims$811 $44 $828 $34 $827 $63 Environmental claims267 18 226 56 206 40 Other run-off lines373 27 367 35 375 13 Total $1,451 $89 $1,421 $125 $1,408 $116 Underwriting loss$(94)$(129)$(120)", "prior_body": "We conduct an annual review in the third quarter of each year to evaluate and establish asbestos, environmental and other run-off reserves. Reserves are recorded in the reporting period in which they are determined. Using established industry and actuarial best practices and assuming no change in the regulatory or economic environment, this detailed and comprehensive methodology determines reserves based on assessments of the characteristics of exposure (e.g. claim activity, potential liability, jurisdiction, products versus non-products exposure) presented by policyholders. Run-off Property-Liability net reserve reestimates202220212020($ in millions)January 1 reservesReserve reestimatesJanuary 1 reservesReserve reestimatesJanuary 1 reservesReserve reestimatesAsbestos claims$828 $34 $827 $63 $810 $78 Environmental claims226 56 206 40 179 44 Other run-off lines367 35 375 13 376 19 Total $1,421 $125 $1,408 $116 $1,365 $141 Underwriting loss$(129)$(120)$(144)" }, { "status": "MODIFIED", "current_title": "Total reserves, net of recoverables (“net reserves”), as of December 31", "prior_title": "Total reserves, net of recoverables (“net reserves”), as of December 31", "similarity_score": 0.841, "confidence": "high", "key_changes": [ "Reworded sentence: \"Run-off Property-Liability Protection Services Less: reinsurance and indemnification recoverables (1) (1)Includes $6.36 billion, $6.66 billion and $6.64 billion of unpaid indemnification recoverables related to the Michigan Catastrophic Claims Association (“MCCA”) as of December 31, 2023, 2022 and 2021, respectively.\"" ], "current_body": "Run-off Property-Liability Protection Services Less: reinsurance and indemnification recoverables (1) (1)Includes $6.36 billion, $6.66 billion and $6.64 billion of unpaid indemnification recoverables related to the Michigan Catastrophic Claims Association (“MCCA”) as of December 31, 2023, 2022 and 2021, respectively. Impact of reserve reestimates by brand on combined ratio and net income applicable to common shareholders(1) (2)202320222021($ in millions, except ratios)Reserve reestimatesEffect on combined ratioReserve reestimatesEffect on combined ratioReserve reestimatesEffect on combined ratioAllstate Protection$461 0.9 $1,619 3.6 $8 — Run-off Property-Liability89 0.2 125 0.3 116 0.3 Total Property-Liability550 1.1 1,744 3.9 124 0.3 Protection Services(1)— (3)— (2)— Total $549 $1,741 $122 Reserve reestimates, after-tax$434 $1,375 $96 Consolidated net (loss) income applicable to common shareholders$(316)$(1,394)$1,500 Reserve reestimates as a % impact on consolidated net (loss) income applicable to common shareholdersNM(98.6)%(6.4)%Property-Liability prior year reserve reestimates included in catastrophe losses$(24)$18 $(202)", "prior_body": "Run-off Property-Liability Protection Services Less: reinsurance and indemnification recoverables (1) (1)Includes $6.66 billion, $6.64 billion and $5.61 billion of unpaid indemnification recoverables related to the Michigan Catastrophic Claims Association (“MCCA”) as of December 31, 2022, 2021 and 2020, respectively. Impact of reserve reestimates by brand on combined ratio and net income applicable to common shareholders(1) (2)202220212020($ in millions, except ratios)Reserve reestimatesEffect on combined ratioReserve reestimatesEffect on combined ratioReserve reestimatesEffect on combined ratioAllstate Protection$1,619 3.6 $8 — $(576)(1.6)Run-off Property-Liability125 0.3 116 0.3 141 0.4 Total Property-Liability1,744 3.9 124 0.3 (435)(1.2)Protection Services(3)— (2)— (1)— Total $1,741 $122 $(436)Reserve reestimates, after-tax$1,375 $96 $(344)Consolidated net (loss) income applicable to common shareholders$(1,416)$1,485 $5,461 Reserve reestimates as a % impact on consolidated net (loss) income applicable to common shareholders(97.1)%(6.5)%6.3 %Property-Liability prior year reserve reestimates included in catastrophe losses$18 $(202)$(503)" }, { "status": "MODIFIED", "current_title": "Maximum number (or approximate dollar value) of shares (or units) that may yet be purchased under the plans or programs (2)", "prior_title": "Maximum number (or approximate dollar value) of shares (or units) that may yet be purchased under the plans or programs (3)", "similarity_score": 0.83, "confidence": "high", "key_changes": [ "Reworded sentence: \"October: 329 November: 125,437 December: 2,798 (2)In August 2021, we announced the approval of a common share repurchase program for $5 billion.\"", "Reworded sentence: \"The excise tax on common stock repurchases is classified as an additional cost of the stock acquired included in treasury stock in shareholders’ equity.\"" ], "current_body": "(1)In accordance with the terms of its equity compensation plans, Allstate acquired the following shares in connection with the vesting of restricted stock units and performance stock awards and the exercise of stock options held by employees and/or directors. The shares were acquired in satisfaction of withholding taxes due upon exercise or vesting and in payment of the exercise price of the options. October: 329 November: 125,437 December: 2,798 (2)In August 2021, we announced the approval of a common share repurchase program for $5 billion. In July 2023, we suspended repurchasing shares under the current authorization. The authorization for the share repurchase program expires on March 31, 2024. The Inflation Reduction Act, enacted in August 2022, imposes a 1% excise tax on stock repurchases occurring 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. Item 6. [Reserved] None. 34 www.allstate.com 34 www.allstate.com 34 www.allstate.com 2023 Form 10-K 2023 Form 10-K Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Page2023 Highlights36Property-Liability Operations41Allstate Protection 43Run-off Property-Liability51Protection Services54Property and Casualty Insurance Claims and Claims Expense Reserves56Allstate Health and Benefits63Investments65Market Risk74Capital Resources and Liquidity77Enterprise Risk and Return Management82Application of Critical Accounting Estimates85Regulation and Legal Proceedings96Pending Accounting Standards96 Page 2023 Highlights 36 Property-Liability Operations 41 Allstate Protection 43 Run-off Property-Liability 51 Protection Services 54 Property and Casualty Insurance Claims and Claims Expense Reserves 56 Allstate Health and Benefits 63 Investments 65 Market Risk 74 Capital Resources and Liquidity 77 Enterprise Risk and Return Management 82 Application of Critical Accounting Estimates 85 Regulation and Legal Proceedings 96 Pending Accounting Standards 96 The Allstate Corporation 35 The Allstate Corporation 35 The Allstate Corporation 35 2023 Form 10-K 2023 Form 10-K", "prior_body": "(1)In accordance with the terms of its equity compensation plans, Allstate acquired the following shares in connection with the vesting of restricted stock units and performance stock awards and the exercise of stock options held by employees and/or directors. The shares were acquired in satisfaction of withholding taxes due upon exercise or vesting and in payment of the exercise price of the options. October: 527 November: 953 December: 965 (2)From time to time, repurchases under our programs are executed under the terms of a pre-set trading plan meeting the requirements of Rule 10b5-1(c) of the Securities Exchange Act of 1934. (3)In August 2021, we announced the approval of a common share repurchase program for $5 billion which is expected to be completed by September 30, 2023. The Inflation Reduction Act, enacted in August 2022, imposes a 1% excise tax on stock repurchases occurring after December 31, 2022. The excise tax on common stock repurchases will be classified as an additional cost of the stock acquired included in treasury stock in shareholders’ equity. Item 6. [Reserved] None. The Allstate Corporation 33 The Allstate Corporation 33 The Allstate Corporation 33 2022 Form 10-K 2022 Form 10-K Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Page2022 Highlights35Property-Liability Operations40Allstate Protection 42Run-off Property-Liability50Protection Services53Property and Casualty Insurance Claims and Claims Expense Reserves55Allstate Health and Benefits62Investments65Market Risk74Capital Resources and Liquidity77Enterprise Risk and Return Management82Application of Critical Accounting Estimates85Regulation and Legal Proceedings96Pending Accounting Standards96 Page 2022 Highlights 35 Property-Liability Operations 40 Allstate Protection 42 Run-off Property-Liability 50 Protection Services 53 Property and Casualty Insurance Claims and Claims Expense Reserves 55 Allstate Health and Benefits 62 Investments 65 Market Risk 74 Capital Resources and Liquidity 77 Enterprise Risk and Return Management 82 Application of Critical Accounting Estimates 85 Regulation and Legal Proceedings 96 Pending Accounting Standards 96 34 www.allstate.com 34 www.allstate.com 34 www.allstate.com 2022 Form 10-K 2022 Form 10-K" }, { "status": "MODIFIED", "current_title": "Reserves and claim activity before (Gross) and after (Net) the effects of reinsurance", "prior_title": "Reserves and claim activity before (Gross) and after (Net) the effects of reinsurance", "similarity_score": 0.828, "confidence": "high", "key_changes": [ "Reworded sentence: \"58 www.allstate.com 58 www.allstate.com 58 www.allstate.com 2023 Form 10-K Property and Casualty Insurance Claims and Claims Expense Reserves 2023 Form 10-K Property and Casualty Insurance Claims and Claims Expense Reserves The survival ratio is calculated by taking our ending reserves divided by payments made during the year.\"", "Reworded sentence: \"The asbestos and environmental net 3-year survival ratio in 2023 increased from 2022 due to lower average payments.\"" ], "current_body": "58 www.allstate.com 58 www.allstate.com 58 www.allstate.com 2023 Form 10-K Property and Casualty Insurance Claims and Claims Expense Reserves 2023 Form 10-K Property and Casualty Insurance Claims and Claims Expense Reserves The survival ratio is calculated by taking our ending reserves divided by payments made during the year. This is a commonly used but simplistic and imprecise approach to measuring the adequacy of asbestos and environmental reserve levels. Many factors, such as mix of business, level of coverage provided and settlement procedures have significant impacts on the amount of environmental and asbestos claims and claims expense reserves, claim payments and the resultant ratio. As payments result in corresponding reserve reductions, survival ratios can be expected to vary over time. The asbestos and environmental net 3-year survival ratio in 2023 increased from 2022 due to lower average payments. Net asbestos reserves by type of exposure and total reserve additions December 31, 2023December 31, 2022December 31, 2021($ in millions)Net reserves% of reservesNet reserves% of reservesNet reserves% of reservesDirect:Primary$9 1 %$9 1 %$8 1 %Excess263 33 257 32 275 33 Total direct272 34 266 33 283 34 Assumed reinsurance91 11 97 12 104 13 IBNR441 55 448 55 441 53 Total net reserves$804 100 %$811 100 %$828 100 %Total reserve additions$44 $34 $63", "prior_body": "The Allstate Corporation 57 The Allstate Corporation 57 The Allstate Corporation 57 2022 Form 10-K Property and Casualty Insurance Claims and Claims Expense Reserves 2022 Form 10-K Property and Casualty Insurance Claims and Claims Expense Reserves The survival ratio is calculated by taking our ending reserves divided by payments made during the year. This is a commonly used but simplistic and imprecise approach to measuring the adequacy of asbestos and environmental reserve levels. Many factors, such as mix of business, level of coverage provided and settlement procedures have significant impacts on the amount of environmental and asbestos claims and claims expense reserves, claim payments and the resultant ratio. As payments result in corresponding reserve reductions, survival ratios can be expected to vary over time. The asbestos and environmental net 3-year survival ratio in 2022 increased from 2021 due to lower claim payments associated with settlement agreements. Net asbestos reserves by type of exposure and total reserve additions December 31, 2022December 31, 2021December 31, 2020($ in millions)Net reserves% of reservesNet reserves% of reservesNet reserves% of reservesDirect:Primary$9 1 %$8 1 %$10 1 %Excess257 32 275 33 291 35 Total direct266 33 283 34 301 36 Assumed reinsurance97 12 104 13 122 15 IBNR448 55 441 53 404 49 Total net reserves$811 100 %$828 100 %$827 100 %Total reserve additions$34 $63 $78" }, { "status": "MODIFIED", "current_title": "Net asbestos reserves by type of exposure and total reserve additions", "prior_title": "Net asbestos reserves by type of exposure and total reserve additions", "similarity_score": 0.824, "confidence": "high", "key_changes": [ "Reworded sentence: \"IBNR net reserves decreased $7 million as of December 31, 2023 compared to December 31, 2022.\"", "Reworded sentence: \"See Note 11 of the consolidated financial statements for additional details on these programs.Intercompany reinsurance We enter into certain intercompany insurance and reinsurance transactions in order to maintain underwriting control and manage insurance risk among various legal entities.\"", "Added sentence: \"See Note 11 of the consolidated financial statements for additional details on these programs.Intercompany reinsurance We enter into certain intercompany insurance and reinsurance transactions in order to maintain underwriting control and manage insurance risk among various legal entities.\"", "Added sentence: \"These reinsurance agreements have been approved by the appropriate regulatory authorities.\"", "Added sentence: \"All significant intercompany transactions have been eliminated in consolidation.Catastrophe reinsurance We anticipate completing the placement of our 2024 nationwide catastrophe reinsurance program in the first half of 2024.\"" ], "current_body": "IBNR net reserves decreased $7 million as of December 31, 2023 compared to December 31, 2022. IBNR provides for reserve development of known claims and future reporting of additional unknown claims from current policyholders and ceding companies.Reinsurance and indemnification programs We utilize reinsurance to reduce exposure to catastrophe risk and manage capital, and to support the required statutory surplus and the insurance financial strength ratings of certain subsidiaries such as Castle Key Insurance Company (“CKIC”) and Allstate New Jersey Insurance Company (“ANJ”). We purchase significant reinsurance to manage our aggregate countrywide exposure to an acceptable level. The price and terms of reinsurance and the credit quality of the reinsurer are considered in the purchase process. We have also purchased reinsurance to mitigate exposures in our long-tail liability lines, including environmental, asbestos and other run-off lines as well as our commercial lines, including shared economy. We also participate in various indemnification mechanisms, including state-based industry pool or facility programs mandating participation by insurers offering certain coverage in their state and the federal government National Flood Insurance Program (“NFIP”). See Note 11 of the consolidated financial statements for additional details on these programs.Intercompany reinsurance We enter into certain intercompany insurance and reinsurance transactions in order to maintain underwriting control and manage insurance risk among various legal entities. These reinsurance agreements have been approved by the appropriate regulatory authorities. All significant intercompany transactions have been eliminated in consolidation.Catastrophe reinsurance We anticipate completing the placement of our 2024 nationwide catastrophe reinsurance program in the first half of 2024. For further details of the existing 2023 program, see Note 11 of the consolidated financial statements. IBNR net reserves decreased $7 million as of December 31, 2023 compared to December 31, 2022. IBNR provides for reserve development of known claims and future reporting of additional unknown claims from current policyholders and ceding companies.Reinsurance and indemnification programs We utilize reinsurance to reduce exposure to catastrophe risk and manage capital, and to support the required statutory surplus and the insurance financial strength ratings of certain subsidiaries such as Castle Key Insurance Company (“CKIC”) and Allstate New Jersey Insurance Company (“ANJ”). We purchase significant reinsurance to manage our aggregate countrywide exposure to an acceptable level. The price and terms of reinsurance and the credit quality of the reinsurer are considered in the purchase process. We have also purchased reinsurance to mitigate exposures in our long-tail liability lines, including environmental, asbestos and other run-off lines as well as our commercial lines, including shared economy. We also participate in various indemnification mechanisms, IBNR net reserves decreased $7 million as of December 31, 2023 compared to December 31, 2022. IBNR provides for reserve development of known claims and future reporting of additional unknown claims from current policyholders and ceding companies. Reinsurance and indemnification programs We utilize reinsurance to reduce exposure to catastrophe risk and manage capital, and to support the required statutory surplus and the insurance financial strength ratings of certain subsidiaries such as Castle Key Insurance Company (“CKIC”) and Allstate New Jersey Insurance Company (“ANJ”). We purchase significant reinsurance to manage our aggregate countrywide exposure to an acceptable level. The price and terms of reinsurance and the credit quality of the reinsurer are considered in the purchase process. We have also purchased reinsurance to mitigate exposures in our long-tail liability lines, including environmental, asbestos and other run-off lines as well as our commercial lines, including shared economy. We also participate in various indemnification mechanisms, including state-based industry pool or facility programs mandating participation by insurers offering certain coverage in their state and the federal government National Flood Insurance Program (“NFIP”). See Note 11 of the consolidated financial statements for additional details on these programs.Intercompany reinsurance We enter into certain intercompany insurance and reinsurance transactions in order to maintain underwriting control and manage insurance risk among various legal entities. These reinsurance agreements have been approved by the appropriate regulatory authorities. All significant intercompany transactions have been eliminated in consolidation.Catastrophe reinsurance We anticipate completing the placement of our 2024 nationwide catastrophe reinsurance program in the first half of 2024. For further details of the existing 2023 program, see Note 11 of the consolidated financial statements. including state-based industry pool or facility programs mandating participation by insurers offering certain coverage in their state and the federal government National Flood Insurance Program (“NFIP”). See Note 11 of the consolidated financial statements for additional details on these programs. Intercompany reinsurance We enter into certain intercompany insurance and reinsurance transactions in order to maintain underwriting control and manage insurance risk among various legal entities. These reinsurance agreements have been approved by the appropriate regulatory authorities. All significant intercompany transactions have been eliminated in consolidation. Catastrophe reinsurance We anticipate completing the placement of our 2024 nationwide catastrophe reinsurance program in the first half of 2024. For further details of the existing 2023 program, see Note 11 of the consolidated financial statements. The Allstate Corporation 59 The Allstate Corporation 59 The Allstate Corporation 59 2023 Form 10-K Property and Casualty Insurance Claims and Claims Expense Reserves 2023 Form 10-K Property and Casualty Insurance Claims and Claims Expense Reserves Reinsurance and indemnification recoverables, net of the allowance established for uncollectible amountsS&P financial strength rating (1)A.M. Best financial strength rating (1)Reinsurance or indemnificationrecoverables on paid and unpaid claims, net($ in millions)20232022Indemnification programsState-based industry pool or facility programsMCCA (2) N/AN/A$6,424 $6,722 New Jersey Property-Liability Insurance Guaranty Association (“PLIGA”) N/AN/A326 330 North Carolina Reinsurance Facility (“NCRF”)N/AN/A382 292 Florida Hurricane Catastrophe Fund (“FHCF”)N/AN/A82 96 Other32 7 Federal Government - NFIPN/AN/A76 145 Subtotal7,322 7,592 Catastrophe reinsurance recoverablesSwiss Reinsurance America CorporationAA-A+37 64 Sanders RE II LTD.N/AN/A36 85 Renaissance Reinsurance LimitedA+A+31 56 Other246 558 Subtotal350 763 Other reinsurance recoverables, net (3)Lloyd’s of London (“Lloyd’s”)AA-A180 180 Aleka Insurance Inc.N/AN/A113 183 Pacific Valley Insurance Company, Inc.N/AN/A67 88 Swiss Reinsurance America CorporationAA-A+47 67 Other, including allowance for credit losses545 575 Subtotal952 1,093 Total Property-Liability 8,624 9,448 Protection Services26 19 Total $8,650 $9,467", "prior_body": "IBNR net reserves increased $7 million as of December 31, 2022 compared to December 31, 2021. IBNR provides for reserve development of known claims and future reporting of additional unknown claims from current policyholders and ceding companies.Reinsurance and indemnification programs We utilize reinsurance to reduce exposure to catastrophe risk and manage capital, and to support the required statutory surplus and the insurance financial strength ratings of certain subsidiaries such as Castle Key Insurance Company (“CKIC”) and Allstate New Jersey Insurance Company (“ANJ”). We purchase significant reinsurance to manage our aggregate countrywide exposure to an acceptable level. The price and terms of reinsurance and the credit quality of the reinsurer are considered in the purchase process. We have also purchased reinsurance to mitigate exposures in our long-tail liability lines, including environmental, asbestos and other run-off lines as well as our commercial lines, including shared economy. We also participate in various indemnification mechanisms, including state-based industry pool or facility programs mandating participation by insurers offering certain coverage in their state and the federal government National Flood Insurance Program (“NFIP”). See Note 11 of the consolidated financial statements for additional details on these programs. IBNR net reserves increased $7 million as of December 31, 2022 compared to December 31, 2021. IBNR provides for reserve development of known claims and future reporting of additional unknown claims from current policyholders and ceding companies. IBNR net reserves increased $7 million as of December 31, 2022 compared to December 31, 2021. IBNR provides for reserve development of known claims and future reporting of additional unknown claims from current policyholders and ceding companies. Reinsurance and indemnification programs We utilize reinsurance to reduce exposure to catastrophe risk and manage capital, and to support the required statutory surplus and the insurance financial strength ratings of certain subsidiaries such as Castle Key Insurance Company (“CKIC”) and Allstate New Jersey Insurance Company (“ANJ”). We purchase significant reinsurance to manage our aggregate countrywide exposure to an acceptable level. The price and terms of reinsurance and the credit quality of the reinsurer are considered in the purchase process. We have also purchased reinsurance to mitigate exposures in our long-tail liability lines, including environmental, asbestos and other run-off lines as well as our commercial lines, including shared economy. We also participate in various indemnification mechanisms, including state-based industry pool or facility programs mandating participation by insurers offering certain coverage in their state and the federal government National Flood Insurance Program (“NFIP”). See Note 11 of the consolidated financial statements for additional details on these programs. Reinsurance and indemnification programs We utilize reinsurance to reduce exposure to catastrophe risk and manage capital, and to support the required statutory surplus and the insurance financial strength ratings of certain subsidiaries such as Castle Key Insurance Company (“CKIC”) and Allstate New Jersey Insurance Company (“ANJ”). We purchase significant reinsurance to manage our aggregate countrywide exposure to an acceptable level. The price and terms of reinsurance and the credit quality of the reinsurer are considered in the purchase process. We have also purchased reinsurance to mitigate exposures in our long-tail liability lines, including environmental, asbestos and other run-off lines as well as our commercial lines, including shared economy. We also participate in various indemnification mechanisms, including state-based industry pool or facility programs mandating participation by insurers offering certain coverage in their state and the federal government National Flood Insurance Program (“NFIP”). See Note 11 of the consolidated financial statements for additional details on these programs. 58 www.allstate.com 58 www.allstate.com 58 www.allstate.com Property and Casualty Insurance Claims and Claims Expense Reserves 2022 Form 10-K Property and Casualty Insurance Claims and Claims Expense Reserves 2022 Form 10-K Reinsurance and indemnification recoverables, net of the allowance established for uncollectible amountsS&P financial strength rating (1)A.M. Best financial strength rating (1)Reinsurance or indemnificationrecoverables on paid and unpaid claims, net($ in millions)20222021Indemnification programsState-based industry pool or facility programsMCCA (2) N/AN/A$6,722 $6,695 New Jersey Property-Liability Insurance Guaranty Association (“PLIGA”) N/AN/A330 371 North Carolina Reinsurance Facility (“NCRF”)N/AN/A292 279 Florida Hurricane Catastrophe Fund (“FHCF”)N/AN/A96 25 Other7 7 Federal Government - NFIPN/AN/A145 34 Subtotal7,592 7,411 Catastrophe reinsurance recoverablesSanders RE II LTD.N/AN/A85 303 Swiss Reinsurance America CorporationAA-A+64 88 Renaissance Reinsurance LimitedN/AA+56 106 Other558 873 Subtotal763 1,370 Other reinsurance recoverables, net (3)Aleka Insurance Inc.N/AN/A183 187 Lloyd’s of London (“Lloyd’s”)A+A180 165 Pacific Valley Insurance Company, Inc.N/AN/A88 35 Swiss Reinsurance America CorporationAA-A+67 75 Other, including allowance for credit losses575 611 Subtotal1,093 1,073 Total Property-Liability 9,448 9,854 Protection Services19 16 Total $9,467 $9,870" }, { "status": "MODIFIED", "current_title": "Total catastrophe losses (1)", "prior_title": "Total catastrophe losses (1)", "similarity_score": 0.817, "confidence": "high", "key_changes": [ "Removed sentence: \"(2)2020 includes approximately $495 million of favorable reserve reestimates related to the PG&E Corporation and Southern California Edison subrogation settlements.\"" ], "current_body": "(1)2021 includes approximately $250 million of reinstatement premiums for the year ended December 31, 2021, related to the Nationwide Catastrophe Reinsurance Program, primarily due to Hurricane Ida.", "prior_body": "(1)2021 includes approximately $250 million of reinstatement premiums for the year ended December 31, 2021, related to the Nationwide Catastrophe Reinsurance Program, primarily due to Hurricane Ida. (2)2020 includes approximately $495 million of favorable reserve reestimates related to the PG&E Corporation and Southern California Edison subrogation settlements." }, { "status": "MODIFIED", "current_title": "Impact of reserve reestimates by brand on combined ratio and net income applicable to common shareholders(1) (2)", "prior_title": "Impact of reserve reestimates by brand on combined ratio and net income applicable to common shareholders(1) (2)", "similarity_score": 0.815, "confidence": "high", "key_changes": [ "Reworded sentence: \"NM = not meaningful 56 www.allstate.com 56 www.allstate.com 56 www.allstate.com 2023 Form 10-K Property and Casualty Insurance Claims and Claims Expense Reserves 2023 Form 10-K Property and Casualty Insurance Claims and Claims Expense Reserves The following tables reflect the accident years to which the reestimates shown above are applicable.\"", "Reworded sentence: \"Prior year reserve reestimates($ in millions)20232018 & prior2019202020212022TotalAllstate Protection$230 $130 $84 $401 $(384)$461 Run-off Property-Liability89 — — — — 89 Total Property-Liability319 130 84 401 (384)550 Protection Services— — — — (1)(1)Total$319 $130 $84 $401 $(385)$549 20222017 & prior2018201920202021TotalAllstate Protection$27 $161 $294 $345 $792 $1,619 Run-off Property-Liability125 — — — — 125 Total Property-Liability152 161 294 345 792 1,744 Protection Services— — — — (3)(3)Total$152 $161 $294 $345 $789 $1,741 20212016 & prior2017201820192020TotalAllstate Protection$(130)$100 $(67)$231 $(126)$8 Run-off Property-Liability116 — — — — 116 Total Property-Liability(14)100 (67)231 (126)124 Protection Services— — — — (2)(2)Total$(14)$100 $(67)$231 $(128)$122 2023 Run-off Property-Liability Protection Services 2022 Run-off Property-Liability Protection Services 2021 Run-off Property-Liability Protection Services\"" ], "current_body": "Run-off Property-Liability Protection Services (1)Favorable reserve reestimates are shown in parentheses. (2)Ratios are calculated using property and casualty premiums earned. NM = not meaningful 56 www.allstate.com 56 www.allstate.com 56 www.allstate.com 2023 Form 10-K Property and Casualty Insurance Claims and Claims Expense Reserves 2023 Form 10-K Property and Casualty Insurance Claims and Claims Expense Reserves The following tables reflect the accident years to which the reestimates shown above are applicable. Favorable reserve reestimates are shown in parentheses. Prior year reserve reestimates($ in millions)20232018 & prior2019202020212022TotalAllstate Protection$230 $130 $84 $401 $(384)$461 Run-off Property-Liability89 — — — — 89 Total Property-Liability319 130 84 401 (384)550 Protection Services— — — — (1)(1)Total$319 $130 $84 $401 $(385)$549 20222017 & prior2018201920202021TotalAllstate Protection$27 $161 $294 $345 $792 $1,619 Run-off Property-Liability125 — — — — 125 Total Property-Liability152 161 294 345 792 1,744 Protection Services— — — — (3)(3)Total$152 $161 $294 $345 $789 $1,741 20212016 & prior2017201820192020TotalAllstate Protection$(130)$100 $(67)$231 $(126)$8 Run-off Property-Liability116 — — — — 116 Total Property-Liability(14)100 (67)231 (126)124 Protection Services— — — — (2)(2)Total$(14)$100 $(67)$231 $(128)$122 2023 Run-off Property-Liability Protection Services 2022 Run-off Property-Liability Protection Services 2021 Run-off Property-Liability Protection Services", "prior_body": "Run-off Property-Liability Protection Services (1)Favorable reserve reestimates are shown in parentheses. (2)Ratios are calculated using property and casualty premiums earned. The Allstate Corporation 55 The Allstate Corporation 55 The Allstate Corporation 55 2022 Form 10-K Property and Casualty Insurance Claims and Claims Expense Reserves 2022 Form 10-K Property and Casualty Insurance Claims and Claims Expense Reserves The following tables reflect the accident years to which the reestimates shown above are applicable. Favorable reserve reestimates are shown in parentheses. Prior year reserve reestimates($ in millions)20222017 & prior2018201920202021TotalAllstate Protection$27 $161 $294 $345 $792 $1,619 Run-off Property-Liability125 — — — — 125 Total Property-Liability152 161 294 345 792 1,744 Protection Services— — — — (3)(3)Total$152 $161 $294 $345 $789 $1,741 20212016 & prior2017201820192020TotalAllstate Protection$(130)$100 $(67)$231 $(126)$8 Run-off Property-Liability116 — — — — 116 Total Property-Liability(14)100 (67)231 (126)124 Protection Services— — — — (2)(2)Total$(14)$100 $(67)$231 $(128)$122 20202015 & prior2016201720182019TotalAllstate Protection$(56)$42 $(199)$(353)$(10)$(576)Run-off Property-Liability141 — — — — 141 Total Property-Liability85 42 (199)(353)(10)(435)Protection Services— — — — (1)(1)Total$85 $42 $(199)$(353)$(11)$(436) 2022 Run-off Property-Liability Protection Services 2021 Run-off Property-Liability Protection Services 2020 Run-off Property-Liability Protection Services" }, { "status": "MODIFIED", "current_title": "Percentage of gross and ceded reserves by case and IBNR", "prior_title": "Percentage of gross and ceded reserves by case and IBNR", "similarity_score": 0.799, "confidence": "high", "key_changes": [ "Reworded sentence: \"Gross reserves (1) Ceded (2) Gross reserves (1)Approximately 68% and 64% of gross case reserves as of December 31, 2023 and December 31, 2022, respectively, are subject to settlement agreements.\"" ], "current_body": "Gross reserves (1) Ceded (2) Gross reserves (1)Approximately 68% and 64% of gross case reserves as of December 31, 2023 and December 31, 2022, respectively, are subject to settlement agreements. (2)Approximately 72% and 70% of ceded case reserves as of December 31, 2023 and December 31, 2022, respectively, are subject to settlement agreements. 52 www.allstate.com 52 www.allstate.com 52 www.allstate.com 2023 Form 10-K Run-off Property-Liability 2023 Form 10-K Run-off Property-Liability", "prior_body": "Gross reserves (1) Ceded (2) Gross reserves (1)Approximately 64% of gross case reserves as of December 31, 2022 are subject to settlement agreements. (2)Approximately 70% of ceded case reserves as of December 31, 2022 are subject to settlement agreements. The Allstate Corporation 51 The Allstate Corporation 51 The Allstate Corporation 51 2022 Form 10-K Run-off Property-Liability 2022 Form 10-K Run-off Property-Liability" }, { "status": "MODIFIED", "current_title": "Run-off Property-Liability Segment", "prior_title": "Run-off Property-Liability Segment", "similarity_score": 0.786, "confidence": "high", "key_changes": [ "Added sentence: \"We may pursue settlement agreements including policy buybacks on direct excess commercial business when appropriate to improve the certainty of the liabilities.\"", "Added sentence: \"Settlement agreements are negotiated contracts between Allstate and third parties that generally set forth the rights and obligations of the parties, including terms of payment for claims.\"", "Reworded sentence: \"Underwriting resultsFor the years ended December 31,($ in millions)202320222021Claims and claims expense Asbestos claims$(44)$(34)$(63)Environmental claims(18)(56)(40)Other run-off lines(27)(35)(13)Total claims and claims expense(89)(125)(116)Operating costs and expenses(5)(4)(4)Underwriting loss$(94)$(129)$(120) Underwriting losses in 2023 and 2022 primarily related to our annual reserve review using established industry and actuarial best practices.\"", "Reworded sentence: \"The reserve reestimates in 2023 primarily related to new reported information and defense costs for asbestos and other run-off exposures and higher than expected environmental reported losses.\"", "Reworded sentence: \"Reserves for asbestos, environmental and other run-off claims before and after the effects of reinsurance($ in millions) December 31, 2023December 31, 2022Asbestos claimsGross reserves$1,166 $1,190 Reinsurance (362)(379)Net reserves 804 811 Environmental claimsGross reserves331 328 Reinsurance (64)(61)Net reserves 267 267 Other run-off claimsGross reserves445 437 Reinsurance (72)(64)Net reserves373 373 Total Gross reserves 1,942 1,955 Reinsurance (498)(504)Net reserves$1,444 $1,451 Gross reserves Reinsurance The Allstate Corporation 51 The Allstate Corporation 51 The Allstate Corporation 51 2023 Form 10-K Run-off Property-Liability 2023 Form 10-K Run-off Property-Liability Reserves by type of exposure before and after the effects of reinsurance($ in millions)December 31, 2023December 31, 2022Direct excess commercial insurance Gross reserves $1,114 $1,106 Reinsurance (382)(385) Net reserves732 721 Assumed reinsurance coverage Gross reserves 603 618 Reinsurance (54)(56) Net reserves549 562 Direct primary commercial insurance Gross reserves 140 148 Reinsurance (61)(62) Net reserves79 86 Other run-off business Gross reserves1 1 Reinsurance— — Net reserves1 1 Unallocated loss adjustment expenses Gross reserves84 82 Reinsurance(1)(1) Net reserves83 81 Total Gross reserves1,942 1,955 Reinsurance(498)(504) Net reserves$1,444 $1,451\"" ], "current_body": "The Run-off Property-Liability segment includes results from property and casualty insurance coverage that primarily relates to policies written during the 1960s through the mid-1980s. Our exposure to asbestos, environmental and other run-off lines claims arises principally from direct excess commercial insurance, assumed reinsurance coverage, direct primary commercial insurance and other businesses in run-off. We may pursue settlement agreements including policy buybacks on direct excess commercial business when appropriate to improve the certainty of the liabilities. Settlement agreements are negotiated contracts between Allstate and third parties that generally set forth the rights and obligations of the parties, including terms of payment for claims. For additional information on our strategy and outlook, see Part I, Item 1. Business - Strategy and Segment Information. Underwriting resultsFor the years ended December 31,($ in millions)202320222021Claims and claims expense Asbestos claims$(44)$(34)$(63)Environmental claims(18)(56)(40)Other run-off lines(27)(35)(13)Total claims and claims expense(89)(125)(116)Operating costs and expenses(5)(4)(4)Underwriting loss$(94)$(129)$(120) Underwriting losses in 2023 and 2022 primarily related to our annual reserve review using established industry and actuarial best practices. The annual review resulted in unfavorable reserve reestimates totaling $80 million and $118 million in 2023 and 2022, respectively. The reserve reestimates are included as part of claims and claims expense. The reserve reestimates in 2023 primarily related to new reported information and defense costs for asbestos and other run-off exposures and higher than expected environmental reported losses. The reserve reestimates in 2022 primarily related to new reported information and defense costs for asbestos and higher than expected reported losses for environmental and other run-off exposures. We believe that our reserves are appropriately established based on available facts, technology, laws, regulations, and assessments of other pertinent factors and characteristics of exposure (e.g., claim activity, potential liability, jurisdiction, products versus non-products exposure) presented by individual policyholders, assuming no change in the legal, legislative or economic environment. However, as we progress with the resolution of disputed claims in the courts and arbitrations and with negotiations and settlements, our reported losses may be more variable. Reserves for asbestos, environmental and other run-off claims before and after the effects of reinsurance($ in millions) December 31, 2023December 31, 2022Asbestos claimsGross reserves$1,166 $1,190 Reinsurance (362)(379)Net reserves 804 811 Environmental claimsGross reserves331 328 Reinsurance (64)(61)Net reserves 267 267 Other run-off claimsGross reserves445 437 Reinsurance (72)(64)Net reserves373 373 Total Gross reserves 1,942 1,955 Reinsurance (498)(504)Net reserves$1,444 $1,451 Gross reserves Reinsurance The Allstate Corporation 51 The Allstate Corporation 51 The Allstate Corporation 51 2023 Form 10-K Run-off Property-Liability 2023 Form 10-K Run-off Property-Liability Reserves by type of exposure before and after the effects of reinsurance($ in millions)December 31, 2023December 31, 2022Direct excess commercial insurance Gross reserves $1,114 $1,106 Reinsurance (382)(385) Net reserves732 721 Assumed reinsurance coverage Gross reserves 603 618 Reinsurance (54)(56) Net reserves549 562 Direct primary commercial insurance Gross reserves 140 148 Reinsurance (61)(62) Net reserves79 86 Other run-off business Gross reserves1 1 Reinsurance— — Net reserves1 1 Unallocated loss adjustment expenses Gross reserves84 82 Reinsurance(1)(1) Net reserves83 81 Total Gross reserves1,942 1,955 Reinsurance(498)(504) Net reserves$1,444 $1,451", "prior_body": "The Run-off Property-Liability segment includes results from property and casualty insurance coverage that primarily relates to policies written during the 1960s through the mid-1980s. Our exposure to asbestos, environmental and other run-off lines claims arises principally from direct excess commercial insurance, assumed reinsurance coverage, direct primary commercial insurance and other businesses in run-off. For additional information on our strategy and outlook, see Part I, Item 1. Business - Strategy and Segment Information. Underwriting resultsFor the years ended December 31,($ in millions)202220212020Claims and claims expense Asbestos claims$(34)$(63)$(78)Environmental claims(56)(40)(44)Other run-off lines(35)(13)(19)Total claims and claims expense(125)(116)(141)Operating costs and expenses(4)(4)(3)Underwriting loss$(129)$(120)$(144) Underwriting losses in 2022 and 2021 primarily related to our annual reserve review using established industry and actuarial best practices. The annual review resulted in unfavorable reserve reestimates totaling $118 million and $111 million in 2022 and 2021, respectively. The reserve reestimates are included as part of claims and claims expense. Reserve reestimates in 2022 primarily related to new reported information and defense costs for asbestos and higher than expected reported losses for environmental and other run-off exposures. Reserve reestimates in 2021 primarily related to new reported information for asbestos and environmental and higher than expected reported losses for environmental and other run-off exposures. We believe that our reserves are appropriately established based on available facts, laws, regulations, and assessments of other pertinent factors and characteristics of exposure (e.g., claim activity, potential liability, jurisdiction, products versus non-products exposure) presented by individual policyholders, assuming no change in the legal, legislative or economic environment. However, as we progress with the resolution of disputed claims in the courts and arbitrations and with negotiations and settlements, our reported losses may be more variable. Reserves for asbestos, environmental and other run-off claims before and after the effects of reinsurance($ in millions) December 31, 2022December 31, 2021Asbestos claimsGross reserves$1,190 $1,210 Reinsurance (379)(382)Net reserves 811 828 Environmental claimsGross reserves328 273 Reinsurance (61)(47)Net reserves 267 226 Other run-off claimsGross reserves437 433 Reinsurance (64)(66)Net reserves373 367 Total Gross reserves 1,955 1,916 Reinsurance (504)(495)Net reserves$1,451 $1,421 Gross reserves Reinsurance 50 www.allstate.com 50 www.allstate.com 50 www.allstate.com Run-off Property-Liability 2022 Form 10-K Run-off Property-Liability 2022 Form 10-K Reserves by type of exposure before and after the effects of reinsurance($ in millions)December 31, 2022December 31, 2021Direct excess commercial insurance Gross reserves $1,106 $1,050 Reinsurance (385)(363) Net reserves721 687 Assumed reinsurance coverage Gross reserves 618 617 Reinsurance (56)(56) Net reserves562 561 Direct primary commercial insurance Gross reserves 148 168 Reinsurance (62)(75) Net reserves86 93 Other run-off business Gross reserves1 1 Reinsurance— — Net reserves1 1 Unallocated loss adjustment expenses Gross reserves82 80 Reinsurance(1)(1) Net reserves81 79 Total Gross reserves1,955 1,916 Reinsurance(504)(495) Net reserves$1,451 $1,421" }, { "status": "MODIFIED", "current_title": "Financial Highlights", "prior_title": "Financial Highlights", "similarity_score": 0.779, "confidence": "high", "key_changes": [ "Reworded sentence: \"Investments totaled $66.68 billion as of December 31, 2023, increasing from $61.83 billion as of December 31, 2022.\"", "Removed sentence: \"Return on average common Allstate shareholders’ equity For the twelve months ended December 31, 2022, return on Allstate common shareholders’ equity was (7.3)%, a decrease of 13.1 points from 5.8% for the twelve months ended December 31, 2021, primarily due to net loss applicable to common shareholders.\"", "Removed sentence: \"Pension and other postretirement remeasurement gains and losses We recorded pension and other postretirement remeasurement losses of $116 million in 2022, primarily related to unfavorable asset performance compared to the expected return on plan assets, partially offset by a reduction in the projected benefit obligation due to an increase in the liability discount rate.\"", "Removed sentence: \"See Note 18 of the consolidated financial statements and Application of Critical Accounting Estimates section of the MD&A for further information.\"", "Removed sentence: \"The Allstate Corporation 39 The Allstate Corporation 39 The Allstate Corporation 39 2022 Form 10-K Property-Liability 2022 Form 10-K Property-Liability\"" ], "current_body": "Investments totaled $66.68 billion as of December 31, 2023, increasing from $61.83 billion as of December 31, 2022. Allstate shareholders’ equity was $17.77 billion as of December 31, 2023 and $17.49 billion as of December 31, 2022. The increase is primarily due to lower unrealized net capital losses on investments, partially offset by dividends paid to shareholders, common share repurchases and a net loss. Book value per diluted common share (ratio of Allstate common shareholders’ equity to total common shares outstanding and dilutive potential common shares outstanding) was $59.39 as of December 31, 2023, an increase of 2.2% from $58.12 as of December 31, 2022. Return on average common Allstate shareholders’ equity For the twelve months ended December 31, 2023, return on Allstate common shareholders’ equity was (2.0)%, an increase of 5.2 points from (7.2)% for the twelve months ended December 31, 2022, primarily due to lower net loss applicable to common shareholders. Pension and other postretirement remeasurement gains and losses We recorded pension and other postretirement remeasurement losses of $9 million in 2023, primarily related to losses on the remeasurement of the projected benefit obligation driven by a decrease in the liability discount rate, partially offset by gains due to favorable asset performance compared to expected return on plan assets. See Note 18 of the consolidated financial statements and Application of Critical Accounting Estimates section of the MD&A for further information.", "prior_body": "Investments totaled $61.83 billion as of December 31, 2022, decreasing from $64.70 billion as of December 31, 2021. Allstate shareholders’ equity was $17.48 billion as of December 31, 2022 and $25.18 billion as of December 31, 2021. The decrease is primarily due to net unrealized capital losses on investments in 2022 compared to gains at 2021, common share repurchases, a net loss and dividends paid to shareholders. Book value per diluted common share (ratio of Allstate common shareholders’ equity to total common shares outstanding and dilutive potential common shares outstanding) was $58.07 as of December 31, 2022, a decrease of 28.8% from $81.52 as of December 31, 2021. Return on average common Allstate shareholders’ equity For the twelve months ended December 31, 2022, return on Allstate common shareholders’ equity was (7.3)%, a decrease of 13.1 points from 5.8% for the twelve months ended December 31, 2021, primarily due to net loss applicable to common shareholders.Pension and other postretirement remeasurement gains and losses We recorded pension and other postretirement remeasurement losses of $116 million in 2022, primarily related to unfavorable asset performance compared to the expected return on plan assets, partially offset by a reduction in the projected benefit obligation due to an increase in the liability discount rate. See Note 18 of the consolidated financial statements and Application of Critical Accounting Estimates section of the MD&A for further information. Return on average common Allstate shareholders’ equity For the twelve months ended December 31, 2022, return on Allstate common shareholders’ equity was (7.3)%, a decrease of 13.1 points from 5.8% for the twelve months ended December 31, 2021, primarily due to net loss applicable to common shareholders. Pension and other postretirement remeasurement gains and losses We recorded pension and other postretirement remeasurement losses of $116 million in 2022, primarily related to unfavorable asset performance compared to the expected return on plan assets, partially offset by a reduction in the projected benefit obligation due to an increase in the liability discount rate. See Note 18 of the consolidated financial statements and Application of Critical Accounting Estimates section of the MD&A for further information. The Allstate Corporation 39 The Allstate Corporation 39 The Allstate Corporation 39 2022 Form 10-K Property-Liability 2022 Form 10-K Property-Liability" }, { "status": "MODIFIED", "current_title": "Reserves by type of exposure before and after the effects of reinsurance", "prior_title": "Reserves by type of exposure before and after the effects of reinsurance", "similarity_score": 0.763, "confidence": "high", "key_changes": [ "Reworded sentence: \"Gross reserves Gross reserves Percentage of gross and ceded reserves by case and IBNRDecember 31, 2023December 31, 2022CaseIBNRCaseIBNRDirect excess commercial insurance Gross reserves (1)57 %43 %58 %42 %Ceded (2)63 37 63 37 Assumed reinsurance coverageGross reserves 32 68 31 69 Ceded 43 57 33 67 Direct primary commercial insuranceGross reserves59 41 57 43 Ceded83 17 81 19\"" ], "current_body": "Gross reserves Gross reserves Percentage of gross and ceded reserves by case and IBNRDecember 31, 2023December 31, 2022CaseIBNRCaseIBNRDirect excess commercial insurance Gross reserves (1)57 %43 %58 %42 %Ceded (2)63 37 63 37 Assumed reinsurance coverageGross reserves 32 68 31 69 Ceded 43 57 33 67 Direct primary commercial insuranceGross reserves59 41 57 43 Ceded83 17 81 19", "prior_body": "Gross reserves Gross reserves Percentage of gross and ceded reserves by case and IBNRDecember 31, 2022December 31, 2021CaseIBNRCaseIBNRDirect excess commercial insurance Gross reserves (1)58 %42 %61 %39 %Ceded (2)63 37 67 33 Assumed reinsurance coverageGross reserves 31 69 33 67 Ceded 33 67 38 62 Direct primary commercial insuranceGross reserves57 43 53 47 Ceded81 19 71 29" }, { "status": "MODIFIED", "current_title": "Net reserves by line", "prior_title": "Net reserves by line", "similarity_score": 0.756, "confidence": "high", "key_changes": [ "Reworded sentence: \"(2)2023 and 2022 include the unamortized fair value adjustment related to the acquisition of National General.\"" ], "current_body": "Auto (1) Homeowners (1) Commercial lines and other (2) (1)2022 includes a $944 million reclassification of reserves from homeowners to auto. (2)2023 and 2022 include the unamortized fair value adjustment related to the acquisition of National General. Impact of reserve reestimates by line on combined ratio and underwriting income202320222021($ in millions, except ratios)Reserve reestimatesEffect on combined ratioReserve reestimatesEffect on combined ratioReserve reestimatesEffect on combined ratioAuto$244 0.5 $1,185 2.7 $149 0.4 Homeowners102 0.2 200 0.4 (135)(0.3)Other personal lines19 0.1 (32)(0.1)(107)(0.3)Commercial lines84 0.2 272 0.6 119 0.3 Other business lines12 — (6)— (18)(0.1)Total Allstate Protection$461 1.0 $1,619 3.6 $8 — Underwriting (loss) income$(2,090)$(2,782)$1,785 Reserve reestimates as a % impact on underwriting (loss) income - favorable (unfavorable)(22.1)%(58.2)%(0.4)%", "prior_body": "Auto (1) Homeowners (1) Commercial lines and other (2) (1)2022 includes a $944 million reclassification of reserves from homeowners to auto. (2)2022 includes the unamortized fair value adjustment related to the acquisition of National General. Impact of reserve reestimates by line on combined ratio and underwriting income202220212020($ in millions, except ratios)Reserve reestimatesEffect on combined ratioReserve reestimatesEffect on combined ratioReserve reestimatesEffect on combined ratioAuto$1,185 2.7 $149 0.4 $(107)(0.3)Homeowners194 0.4 (153)(0.4)(439)(1.2)Other personal lines(32)(0.1)(107)(0.3)(66)(0.2)Commercial lines272 0.6 119 0.3 36 0.1 Total Allstate Protection$1,619 3.6 $8 — $(576)(1.6)Underwriting (loss) income$(2,782)$1,785 $4,569 Reserve reestimates as a % impact on underwriting (loss) income(58.2)%(0.4)%12.6 %" }, { "status": "MODIFIED", "current_title": "Summarized financial information", "prior_title": "Summarized financial information", "similarity_score": 0.755, "confidence": "high", "key_changes": [ "Reworded sentence: \"Benefit ratio (1) Employer voluntary benefits (2) Group health (3) Individual health (4) (1)Benefit ratio is calculated as accident, health and other policy benefits less interest credited to contractholder funds of $33 million, $33 million, and $34 million for the years ended December 31, 2023, 2022, and 2021, respectively, divided by premiums and contract charges.\"", "Reworded sentence: \"Adjusted net income decreased $3 million in 2023 compared to 2022, primarily due to a decline in employer voluntary benefits, partially offset by increases in individual and group health.Premiums and contract charges increased 0.8% or $14 million in 2023 compared to 2022, primarily due to growth in group health, partially offset by a decline in employer voluntary benefits and individual health.\"" ], "current_body": "Intersegment insurance premiums and service fees (1) (1)Primarily related to Arity and Allstate Roadside and are eliminated in our consolidated financial statements. Adjusted net income decreased 37.3% or $63 million in 2023 compared to 2022, due to an increase in state income taxes and deferred tax liabilities for Allstate Dealer Services, higher appliance and furniture claim severity at Allstate Protection Plans and lower third-party lead sales at Arity, partially offset by improved margins at Allstate Roadside and lower expenses at Allstate Identity Protection.Premiums written decreased 1.3% or $36 million in 2023 compared to 2022, primarily due to a decrease at Allstate Dealer Services and lower rescue volumes at Allstate Roadside, partially offset by international growth at Allstate Protection Plans.PIF increased 4.3% or 6 million in 2023 compared to 2022 due to an increase at Allstate Protection Plans.Other revenue decreased 8.1% or $28 million in 2023 compared to 2022, primarily due to reductions in third-party lead sales at Arity.Intersegment premiums and service fees decreased 7.4% to $138 million in 2023 compared to 2022, driven by decreased device sales for the Adjusted net income decreased 37.3% or $63 million in 2023 compared to 2022, due to an increase in state income taxes and deferred tax liabilities for Allstate Dealer Services, higher appliance and furniture claim severity at Allstate Protection Plans and lower third-party lead sales at Arity, partially offset by improved margins at Allstate Roadside and lower expenses at Allstate Identity Protection.Premiums written decreased 1.3% or $36 million in 2023 compared to 2022, primarily due to a decrease at Allstate Dealer Services and lower rescue volumes at Adjusted net income decreased 37.3% or $63 million in 2023 compared to 2022, due to an increase in state income taxes and deferred tax liabilities for Allstate Dealer Services, higher appliance and furniture claim severity at Allstate Protection Plans and lower third-party lead sales at Arity, partially offset by improved margins at Allstate Roadside and lower expenses at Allstate Identity Protection. Premiums written decreased 1.3% or $36 million in 2023 compared to 2022, primarily due to a decrease at Allstate Dealer Services and lower rescue volumes at Allstate Roadside, partially offset by international growth at Allstate Protection Plans.PIF increased 4.3% or 6 million in 2023 compared to 2022 due to an increase at Allstate Protection Plans.Other revenue decreased 8.1% or $28 million in 2023 compared to 2022, primarily due to reductions in third-party lead sales at Arity.Intersegment premiums and service fees decreased 7.4% to $138 million in 2023 compared to 2022, driven by decreased device sales for the Allstate Roadside, partially offset by international growth at Allstate Protection Plans. PIF increased 4.3% or 6 million in 2023 compared to 2022 due to an increase at Allstate Protection Plans. Other revenue decreased 8.1% or $28 million in 2023 compared to 2022, primarily due to reductions in third-party lead sales at Arity. Intersegment premiums and service fees decreased 7.4% to $138 million in 2023 compared to 2022, driven by decreased device sales for the 54 www.allstate.com 54 www.allstate.com 54 www.allstate.com 2023 Form 10-K Protection Services 2023 Form 10-K Protection Services Drivewise® offering at Arity due to a shift from devices to a lower cost mobile phone program.Claims and claims expense increased 18.8% or $100 million in 2023 compared to 2022, primarily driven by higher levels of claims at Allstate Protection Plans driven by growth in the business and higher severity at both Allstate Protection Plans and Allstate Dealer Services, partially offset by lower frequency at Allstate Roadside.Amortization of DAC increased 14.0% or $130 million in 2023 compared to 2022, driven by revenue growth at both Allstate Protection Plans and Allstate Dealer Services.Operating costs and expenses increased 1.7% or $15 million in 2023 compared to 2022, primarily due to growth at Allstate Protection Plans, partially offset by lower expenses at Arity.Restructuring and related charges increased $4 million in 2023 compared to 2022, primarily due to restructuring charges at Allstate Roadside. Drivewise® offering at Arity due to a shift from devices to a lower cost mobile phone program.Claims and claims expense increased 18.8% or $100 million in 2023 compared to 2022, primarily driven by higher levels of claims at Allstate Protection Plans driven by growth in the business and higher severity at both Allstate Protection Plans and Allstate Dealer Services, partially offset by lower frequency at Allstate Roadside.Amortization of DAC increased 14.0% or $130 million in 2023 compared to 2022, driven by revenue growth at both Allstate Protection Plans and Allstate Dealer Services. Drivewise® offering at Arity due to a shift from devices to a lower cost mobile phone program. Claims and claims expense increased 18.8% or $100 million in 2023 compared to 2022, primarily driven by higher levels of claims at Allstate Protection Plans driven by growth in the business and higher severity at both Allstate Protection Plans and Allstate Dealer Services, partially offset by lower frequency at Allstate Roadside. Amortization of DAC increased 14.0% or $130 million in 2023 compared to 2022, driven by revenue growth at both Allstate Protection Plans and Allstate Dealer Services. Operating costs and expenses increased 1.7% or $15 million in 2023 compared to 2022, primarily due to growth at Allstate Protection Plans, partially offset by lower expenses at Arity.Restructuring and related charges increased $4 million in 2023 compared to 2022, primarily due to restructuring charges at Allstate Roadside. Operating costs and expenses increased 1.7% or $15 million in 2023 compared to 2022, primarily due to growth at Allstate Protection Plans, partially offset by lower expenses at Arity. Restructuring and related charges increased $4 million in 2023 compared to 2022, primarily due to restructuring charges at Allstate Roadside. The Allstate Corporation 55 The Allstate Corporation 55 The Allstate Corporation 55 2023 Form 10-K Property and Casualty Insurance Claims and Claims Expense Reserves 2023 Form 10-K Property and Casualty Insurance Claims and Claims Expense Reserves", "prior_body": "Intersegment insurance premiums and service fees (1) (1)Primarily related to Arity and Allstate Roadside and are eliminated in our consolidated financial statements. Adjusted net income decreased 5.6% or $10 million in 2022 compared to 2021, primarily driven by higher technology expenses at Allstate Identity Protection and lower revenue at Arity.Premiums written increased 2.2% or $57 million in 2022 compared to 2021, primarily due to international growth at Allstate Protection Plans, partially offset by a decrease in sales at Allstate Dealer Services.PIF decreased 1.4% or 2 million in 2022 compared to 2021 due to a decline in Allstate Protection Plans .Other revenue decreased 2.0% or $7 million in 2022 compared to 2021, primarily due to lower revenue at Arity, partially offset by growth at Allstate Identity Protection.Intersegment premiums and service fees decreased 14.9% to $149 million in 2022 compared to 2021, driven by decreased Arity device sales due to a Adjusted net income decreased 5.6% or $10 million in 2022 compared to 2021, primarily driven by higher technology expenses at Allstate Identity Protection and lower revenue at Arity.Premiums written increased 2.2% or $57 million in 2022 compared to 2021, primarily due to international growth at Allstate Protection Plans, partially offset by a decrease in sales at Allstate Dealer Services. Adjusted net income decreased 5.6% or $10 million in 2022 compared to 2021, primarily driven by higher technology expenses at Allstate Identity Protection and lower revenue at Arity. Premiums written increased 2.2% or $57 million in 2022 compared to 2021, primarily due to international growth at Allstate Protection Plans, partially offset by a decrease in sales at Allstate Dealer Services. PIF decreased 1.4% or 2 million in 2022 compared to 2021 due to a decline in Allstate Protection Plans .Other revenue decreased 2.0% or $7 million in 2022 compared to 2021, primarily due to lower revenue at Arity, partially offset by growth at Allstate Identity Protection.Intersegment premiums and service fees decreased 14.9% to $149 million in 2022 compared to 2021, driven by decreased Arity device sales due to a PIF decreased 1.4% or 2 million in 2022 compared to 2021 due to a decline in Allstate Protection Plans . Other revenue decreased 2.0% or $7 million in 2022 compared to 2021, primarily due to lower revenue at Arity, partially offset by growth at Allstate Identity Protection. Intersegment premiums and service fees decreased 14.9% to $149 million in 2022 compared to 2021, driven by decreased Arity device sales due to a The Allstate Corporation 53 The Allstate Corporation 53 The Allstate Corporation 53 2022 Form 10-K Protection Services 2022 Form 10-K Protection Services shift from devices to a mobile program for the Drivewise® offering.Claims and claims expense increased 16.2% or $74 million in 2022 compared to 2021, primarily due to higher levels of claims at Allstate Protection Plans driven by growth in the business and higher severity at both Allstate Protection Plans and Allstate Roadside.Amortization of DAC increased 16.7% or $133 million in 2022 compared to 2021, driven by business growth at Allstate Protection Plans and Allstate Dealer Services.Operating costs and expenses increased 4.4% or $37 million in 2022 compared to 2021, primarily due to investments in technology and geographic and product expansion at Allstate Protection Plans and investments in technology at Allstate Identity Protection, partially offset by lower expenses at Arity.Restructuring and related charges decreased $12 million in 2022 compared to 2021, primarily due to a facility closure at Allstate Identity Protection and accelerated lease costs at Allstate Protection Plans in 2021. shift from devices to a mobile program for the Drivewise® offering.Claims and claims expense increased 16.2% or $74 million in 2022 compared to 2021, primarily due to higher levels of claims at Allstate Protection Plans driven by growth in the business and higher severity at both Allstate Protection Plans and Allstate Roadside.Amortization of DAC increased 16.7% or $133 million in 2022 compared to 2021, driven by business growth at Allstate Protection Plans and Allstate Dealer Services. shift from devices to a mobile program for the Drivewise® offering. Claims and claims expense increased 16.2% or $74 million in 2022 compared to 2021, primarily due to higher levels of claims at Allstate Protection Plans driven by growth in the business and higher severity at both Allstate Protection Plans and Allstate Roadside. Amortization of DAC increased 16.7% or $133 million in 2022 compared to 2021, driven by business growth at Allstate Protection Plans and Allstate Dealer Services. Operating costs and expenses increased 4.4% or $37 million in 2022 compared to 2021, primarily due to investments in technology and geographic and product expansion at Allstate Protection Plans and investments in technology at Allstate Identity Protection, partially offset by lower expenses at Arity.Restructuring and related charges decreased $12 million in 2022 compared to 2021, primarily due to a facility closure at Allstate Identity Protection and accelerated lease costs at Allstate Protection Plans in 2021. Operating costs and expenses increased 4.4% or $37 million in 2022 compared to 2021, primarily due to investments in technology and geographic and product expansion at Allstate Protection Plans and investments in technology at Allstate Identity Protection, partially offset by lower expenses at Arity. Restructuring and related charges decreased $12 million in 2022 compared to 2021, primarily due to a facility closure at Allstate Identity Protection and accelerated lease costs at Allstate Protection Plans in 2021. 54 www.allstate.com 54 www.allstate.com 54 www.allstate.com Property and Casualty Insurance Claims and Claims Expense Reserves 2022 Form 10-K Property and Casualty Insurance Claims and Claims Expense Reserves 2022 Form 10-K" }, { "status": "MODIFIED", "current_title": "Protection Services", "prior_title": "Protection Services", "similarity_score": 0.743, "confidence": "medium", "key_changes": [ "Reworded sentence: \"In 2023, ceded premiums earned increased primarily due to catastrophe reinsurance.\"", "Reworded sentence: \"In 2023, ceded claims and claims expenses decreased $967 million primarily due to lower amounts related to NFIP, and a reduction in gross reserves for Michigan personal injury protection coverage.\"", "Removed sentence: \"In 2021, ceded claims and claims expenses increased $2.95 billion primarily due to Hurricane Ida and Winter Storm Uri.\"", "Added sentence: \"In 2023, ceded premiums earned increased primarily due to catastrophe reinsurance.\"", "Reworded sentence: \"In 2023, ceded claims and claims expenses decreased $967 million primarily due to lower amounts related to NFIP, and a reduction in gross reserves for In 2023, ceded premiums earned increased primarily due to catastrophe reinsurance.\"" ], "current_body": "(1)N/A reflects no S&P Global Ratings (“S&P”) or A.M. Best ratings available. (2)As of December 31, 2023 and 2022, MCCA includes $62 million of reinsurance recoverable on paid claims and $6.36 billion and $6.66 billion of reinsurance recoverable on unpaid claims, respectively. (3)Other reinsurance recoverables primarily relate to commercial lines, including shared economy, as well as asbestos, environmental and other liability exposures. Reinsurance and indemnification recoverables include an estimate of the amount of insurance claims and claims expense reserves that are ceded under the terms of the agreements, including IBNR unpaid losses. We calculate our ceded reinsurance and indemnification estimates based on the terms of each applicable agreement, including an estimate of how IBNR losses will ultimately be ceded under the agreement. We also consider other limitations and coverage exclusions under our agreements. Accordingly, our estimate of recoverables is subject to similar risks and uncertainties as our estimate of reserves for claims and claims expense. We believe the recoverables are appropriately established; however, as our underlying reserves continue to develop, the amount ultimately recoverable may vary from amounts currently recorded. We regularly evaluate the reinsurers and the respective amounts of our reinsurance recoverables, and a provision for uncollectible reinsurance recoverables is recorded, if needed. The establishment of reinsurance recoverables and the related allowance for uncollectible reinsurance is also an inherently uncertain process involving estimates. Changes in estimates could result in additional changes to the Consolidated Statements of Operations. Indemnification recoverables are considered collectible based on the industry pool and facility enabling legislation and the Company has not had any credit losses related to these programs and we do not anticipate losses in the foreseeable future. We also have not experienced credit losses on our catastrophe reinsurance programs, which include highly rated reinsurers.The allowance for uncollectible reinsurance relates to other reinsurance programs primarily related to our Run-off Property-Liability segment. The allowance was $62 million as of December 31, 2023 and 2022.The allowance is based upon our ongoing review of amounts outstanding, length of collection periods, changes in reinsurer credit standing, and other relevant factors. In addition, in the ordinary course of Reinsurance and indemnification recoverables include an estimate of the amount of insurance claims and claims expense reserves that are ceded under the terms of the agreements, including IBNR unpaid losses. We calculate our ceded reinsurance and indemnification estimates based on the terms of each applicable agreement, including an estimate of how IBNR losses will ultimately be ceded under the agreement. We also consider other limitations and coverage exclusions under our agreements. Accordingly, our estimate of recoverables is subject to similar risks and uncertainties as our estimate of reserves for claims and claims expense. We believe the recoverables are appropriately established; however, as our underlying reserves continue to develop, the amount ultimately recoverable may vary from amounts currently recorded. We regularly evaluate the reinsurers and the respective amounts of our reinsurance recoverables, and a provision for uncollectible reinsurance recoverables is recorded, if needed. The establishment of reinsurance recoverables and the related allowance for Reinsurance and indemnification recoverables include an estimate of the amount of insurance claims and claims expense reserves that are ceded under the terms of the agreements, including IBNR unpaid losses. We calculate our ceded reinsurance and indemnification estimates based on the terms of each applicable agreement, including an estimate of how IBNR losses will ultimately be ceded under the agreement. We also consider other limitations and coverage exclusions under our agreements. Accordingly, our estimate of recoverables is subject to similar risks and uncertainties as our estimate of reserves for claims and claims expense. We believe the recoverables are appropriately established; however, as our underlying reserves continue to develop, the amount ultimately recoverable may vary from amounts currently recorded. We regularly evaluate the reinsurers and the respective amounts of our reinsurance recoverables, and a provision for uncollectible reinsurance recoverables is recorded, if needed. The establishment of reinsurance recoverables and the related allowance for uncollectible reinsurance is also an inherently uncertain process involving estimates. Changes in estimates could result in additional changes to the Consolidated Statements of Operations. Indemnification recoverables are considered collectible based on the industry pool and facility enabling legislation and the Company has not had any credit losses related to these programs and we do not anticipate losses in the foreseeable future. We also have not experienced credit losses on our catastrophe reinsurance programs, which include highly rated reinsurers.The allowance for uncollectible reinsurance relates to other reinsurance programs primarily related to our Run-off Property-Liability segment. The allowance was $62 million as of December 31, 2023 and 2022.The allowance is based upon our ongoing review of amounts outstanding, length of collection periods, changes in reinsurer credit standing, and other relevant factors. In addition, in the ordinary course of uncollectible reinsurance is also an inherently uncertain process involving estimates. Changes in estimates could result in additional changes to the Consolidated Statements of Operations. Indemnification recoverables are considered collectible based on the industry pool and facility enabling legislation and the Company has not had any credit losses related to these programs and we do not anticipate losses in the foreseeable future. We also have not experienced credit losses on our catastrophe reinsurance programs, which include highly rated reinsurers. The allowance for uncollectible reinsurance relates to other reinsurance programs primarily related to our Run-off Property-Liability segment. The allowance was $62 million as of December 31, 2023 and 2022. The allowance is based upon our ongoing review of amounts outstanding, length of collection periods, changes in reinsurer credit standing, and other relevant factors. In addition, in the ordinary course of 60 www.allstate.com 60 www.allstate.com 60 www.allstate.com 2023 Form 10-K Property and Casualty Insurance Claims and Claims Expense Reserves 2023 Form 10-K Property and Casualty Insurance Claims and Claims Expense Reserves business, we may become involved in coverage disputes with certain of our reinsurers that may ultimately result in lawsuits and arbitrations brought by or against such reinsurers to determine the parties’ rights and obligations under the various reinsurance agreements. We employ dedicated specialists to manage reinsurance collections and disputes. We also consider recent developments in commutation activity between reinsurers and cedents, and recent trends in arbitration and litigation outcomes in disputes between cedents and reinsurers in seeking to maximize our reinsurance recoveries. Adverse developments in the insurance industry have led to a decline in the financial strength of some of our reinsurance carriers, causing amounts recoverable from them and future claims ceded to them to be considered a higher risk. There has also been consolidation activity in the industry, which causes reinsurance risk across the industry to be concentrated among fewer companies. See Note 2 of the consolidated financial statements for a description of the methodology utilized to calculate the allowance for reinsurance recoverables.For further details related to our reinsurance and indemnification recoverables, see the Regulation section in Part I and Note 11 of the consolidated financial statements. business, we may become involved in coverage disputes with certain of our reinsurers that may ultimately result in lawsuits and arbitrations brought by or against such reinsurers to determine the parties’ rights and obligations under the various reinsurance agreements. We employ dedicated specialists to manage reinsurance collections and disputes. We also consider recent developments in commutation activity between reinsurers and cedents, and recent trends in arbitration and litigation outcomes in disputes between cedents and reinsurers in seeking to maximize our reinsurance recoveries. Adverse developments in the insurance industry have led to a decline in the financial strength of some of our reinsurance carriers, causing amounts business, we may become involved in coverage disputes with certain of our reinsurers that may ultimately result in lawsuits and arbitrations brought by or against such reinsurers to determine the parties’ rights and obligations under the various reinsurance agreements. We employ dedicated specialists to manage reinsurance collections and disputes. We also consider recent developments in commutation activity between reinsurers and cedents, and recent trends in arbitration and litigation outcomes in disputes between cedents and reinsurers in seeking to maximize our reinsurance recoveries. Adverse developments in the insurance industry have led to a decline in the financial strength of some of our reinsurance carriers, causing amounts recoverable from them and future claims ceded to them to be considered a higher risk. There has also been consolidation activity in the industry, which causes reinsurance risk across the industry to be concentrated among fewer companies. See Note 2 of the consolidated financial statements for a description of the methodology utilized to calculate the allowance for reinsurance recoverables.For further details related to our reinsurance and indemnification recoverables, see the Regulation section in Part I and Note 11 of the consolidated financial statements. recoverable from them and future claims ceded to them to be considered a higher risk. There has also been consolidation activity in the industry, which causes reinsurance risk across the industry to be concentrated among fewer companies. See Note 2 of the consolidated financial statements for a description of the methodology utilized to calculate the allowance for reinsurance recoverables. For further details related to our reinsurance and indemnification recoverables, see the Regulation section in Part I and Note 11 of the consolidated financial statements. Effects of reinsurance ceded and indemnification programs on our premiums earned and claims and claims expenseFor the years ended December 31,($ in millions)202320222021Allstate Protection - PremiumsIndemnification programsState-based industry pool or facility programsNCRF$323 $300 $310 MCCA29 18 20 PLIGA7 7 7 FHCF28 24 15 Other1 — 420 Federal Government - NFIP327 319 350 Catastrophe reinsurance995 764 541 Other reinsurance programs 110 261 60 Total Allstate Protection1,820 1,693 1,723 Run-off Property-Liability— — — Total Property-Liability1,820 1,693 1,723 Protection Services169 176 181 Total effect on premiums earned$1,989 $1,869 $1,904 Allstate Protection - ClaimsIndemnification programsState-based industry pool or facility programsMCCA$(185)$116 $611 NCRF379 294 279 PLIGA14 (24)— FHCF(6)74 13 Other 1 — 359 Federal Government - NFIP102 435 267 Catastrophe reinsurance 32 298 1,719 Other reinsurance programs151 261 85 Total Allstate Protection488 1,454 3,333 Run-off Property-Liability29 50 60 Total Property-Liability517 1,504 3,393 Protection Services116 96 91 Total effect on claims and claims expense$633 $1,600 $3,484", "prior_body": "(1)N/A reflects no S&P Global Ratings (“S&P”) or A.M. Best ratings available. (2)As of December 31, 2022 and 2021, MCCA includes $62 million and $51 million of reinsurance recoverable on paid claims, respectively, and $6.66 billion and $6.64 billion of reinsurance recoverable on unpaid claims, respectively. (3)Other reinsurance recoverables primarily relate to commercial lines, including shared economy, as well as asbestos, environmental and other liability exposures. Reinsurance and indemnification recoverables include an estimate of the amount of insurance claims and claims expense reserves that are ceded under the terms of the agreements, including IBNR unpaid losses. We calculate our ceded reinsurance and indemnification estimates based on the terms of each applicable agreement, including an estimate of how IBNR losses will ultimately be ceded under the agreement. We also consider other limitations and coverage exclusions under our agreements. Accordingly, our estimate of recoverables is subject to similar risks and uncertainties as our estimate of reserves claims and claims expense. We believe the recoverables are appropriately established; however, as our underlying reserves continue to develop, the amount ultimately recoverable may vary from amounts currently recorded. We regularly evaluate the reinsurers and the respective amounts of our reinsurance recoverables, and a provision for uncollectible reinsurance recoverables is recorded, if needed. The establishment of reinsurance recoverables and the related allowance for uncollectible reinsurance is also an inherently uncertain process involving estimates. Changes in estimates could result in additional changes to the Consolidated Statements of Operations. Indemnification recoverables are considered collectible based on the industry pool and facility enabling legislation and the Company has not had any credit losses related to these programs and we do not anticipate losses in the foreseeable future. We also have not experienced credit losses on our catastrophe reinsurance programs, which include highly rated reinsurers.The allowance for uncollectible reinsurance relates to other reinsurance programs primarily related to our Run-off Property-Liability segment. The allowance was $62 million and $66 million as of December 31, 2022 and 2021, respectively.The allowance is based upon our ongoing review of amounts outstanding, length of collection periods, changes in reinsurer credit standing, and other Reinsurance and indemnification recoverables include an estimate of the amount of insurance claims and claims expense reserves that are ceded under the terms of the agreements, including IBNR unpaid losses. We calculate our ceded reinsurance and indemnification estimates based on the terms of each applicable agreement, including an estimate of how IBNR losses will ultimately be ceded under the agreement. We also consider other limitations and coverage exclusions under our agreements. Accordingly, our estimate of recoverables is subject to similar risks and uncertainties as our estimate of reserves claims and claims expense. We believe the recoverables are appropriately established; however, as our underlying reserves continue to develop, the amount ultimately recoverable may vary from amounts currently recorded. We regularly evaluate the reinsurers and the respective amounts of our reinsurance recoverables, and a provision for uncollectible reinsurance recoverables is recorded, if needed. The establishment of reinsurance recoverables and the related allowance for Reinsurance and indemnification recoverables include an estimate of the amount of insurance claims and claims expense reserves that are ceded under the terms of the agreements, including IBNR unpaid losses. We calculate our ceded reinsurance and indemnification estimates based on the terms of each applicable agreement, including an estimate of how IBNR losses will ultimately be ceded under the agreement. We also consider other limitations and coverage exclusions under our agreements. Accordingly, our estimate of recoverables is subject to similar risks and uncertainties as our estimate of reserves claims and claims expense. We believe the recoverables are appropriately established; however, as our underlying reserves continue to develop, the amount ultimately recoverable may vary from amounts currently recorded. We regularly evaluate the reinsurers and the respective amounts of our reinsurance recoverables, and a provision for uncollectible reinsurance recoverables is recorded, if needed. The establishment of reinsurance recoverables and the related allowance for uncollectible reinsurance is also an inherently uncertain process involving estimates. Changes in estimates could result in additional changes to the Consolidated Statements of Operations. Indemnification recoverables are considered collectible based on the industry pool and facility enabling legislation and the Company has not had any credit losses related to these programs and we do not anticipate losses in the foreseeable future. We also have not experienced credit losses on our catastrophe reinsurance programs, which include highly rated reinsurers.The allowance for uncollectible reinsurance relates to other reinsurance programs primarily related to our Run-off Property-Liability segment. The allowance was $62 million and $66 million as of December 31, 2022 and 2021, respectively.The allowance is based upon our ongoing review of amounts outstanding, length of collection periods, changes in reinsurer credit standing, and other uncollectible reinsurance is also an inherently uncertain process involving estimates. Changes in estimates could result in additional changes to the Consolidated Statements of Operations. Indemnification recoverables are considered collectible based on the industry pool and facility enabling legislation and the Company has not had any credit losses related to these programs and we do not anticipate losses in the foreseeable future. We also have not experienced credit losses on our catastrophe reinsurance programs, which include highly rated reinsurers. The allowance for uncollectible reinsurance relates to other reinsurance programs primarily related to our Run-off Property-Liability segment. The allowance was $62 million and $66 million as of December 31, 2022 and 2021, respectively. The allowance is based upon our ongoing review of amounts outstanding, length of collection periods, changes in reinsurer credit standing, and other The Allstate Corporation 59 The Allstate Corporation 59 The Allstate Corporation 59 2022 Form 10-K Property and Casualty Insurance Claims and Claims Expense Reserves 2022 Form 10-K Property and Casualty Insurance Claims and Claims Expense Reserves relevant factors. In addition, in the ordinary course of business, we may become involved in coverage disputes with certain of our reinsurers that may ultimately result in lawsuits and arbitrations brought by or against such reinsurers to determine the parties’ rights and obligations under the various reinsurance agreements. We employ dedicated specialists to manage reinsurance collections and disputes. We also consider recent developments in commutation activity between reinsurers and cedents, and recent trends in arbitration and litigation outcomes in disputes between cedents and reinsurers in seeking to maximize our reinsurance recoveries. Adverse developments in the insurance industry have led to a decline in the financial strength of some of our reinsurance carriers, causing amounts recoverable from them and future claims ceded to them to be considered a higher risk. There has also been consolidation activity in the industry, which causes reinsurance risk across the industry to be concentrated among fewer companies. See Note 2 of the consolidated financial statements for a description of the methodology utilized to calculate the allowance for reinsurance recoverables.For further details related to our reinsurance and indemnification recoverables, see the Regulation section in Part I and Note 11 of the consolidated financial statements. relevant factors. In addition, in the ordinary course of business, we may become involved in coverage disputes with certain of our reinsurers that may ultimately result in lawsuits and arbitrations brought by or against such reinsurers to determine the parties’ rights and obligations under the various reinsurance agreements. We employ dedicated specialists to manage reinsurance collections and disputes. We also consider recent developments in commutation activity between reinsurers and cedents, and recent trends in arbitration and litigation outcomes in disputes between cedents and reinsurers in seeking to maximize our reinsurance recoveries. Adverse developments in the insurance industry have led to a decline in the financial strength of some of our reinsurance carriers, causing amounts relevant factors. In addition, in the ordinary course of business, we may become involved in coverage disputes with certain of our reinsurers that may ultimately result in lawsuits and arbitrations brought by or against such reinsurers to determine the parties’ rights and obligations under the various reinsurance agreements. We employ dedicated specialists to manage reinsurance collections and disputes. We also consider recent developments in commutation activity between reinsurers and cedents, and recent trends in arbitration and litigation outcomes in disputes between cedents and reinsurers in seeking to maximize our reinsurance recoveries. Adverse developments in the insurance industry have led to a decline in the financial strength of some of our reinsurance carriers, causing amounts recoverable from them and future claims ceded to them to be considered a higher risk. There has also been consolidation activity in the industry, which causes reinsurance risk across the industry to be concentrated among fewer companies. See Note 2 of the consolidated financial statements for a description of the methodology utilized to calculate the allowance for reinsurance recoverables.For further details related to our reinsurance and indemnification recoverables, see the Regulation section in Part I and Note 11 of the consolidated financial statements. recoverable from them and future claims ceded to them to be considered a higher risk. There has also been consolidation activity in the industry, which causes reinsurance risk across the industry to be concentrated among fewer companies. See Note 2 of the consolidated financial statements for a description of the methodology utilized to calculate the allowance for reinsurance recoverables. For further details related to our reinsurance and indemnification recoverables, see the Regulation section in Part I and Note 11 of the consolidated financial statements. Effects of reinsurance ceded and indemnification programs on our premiums earned and claims and claims expenseFor the years ended December 31,($ in millions)202220212020Allstate Protection - PremiumsIndemnification programsState-based industry pool or facility programsNCRF$300 $310 $63 MCCA18 20 61 PLIGA7 7 7 FHCF24 15 9 Other— 420 34 Federal Government - NFIP319 350 261 Catastrophe reinsurance764 541 416 Other reinsurance programs 261 60 110 Total Allstate Protection1,693 1,723 961 Run-off Property-Liability— — — Total Property-Liability1,693 1,723 961 Protection Services176 181 180 Total effect on premiums earned$1,869 $1,904 $1,141 Allstate Protection - ClaimsIndemnification programsState-based industry pool or facility programsMCCA$116 $611 $256 NCRF294 279 47 PLIGA(24)— (40)FHCF74 13 15 Other — 359 16 Federal Government - NFIP435 267 87 Catastrophe reinsurance 298 1,719 (105)(1)Other reinsurance programs261 85 88 Total Allstate Protection1,454 3,333 364 Run-off Property-Liability50 60 75 Total Property-Liability1,504 3,393 439 Protection Services96 91 91 Total effect on claims and claims expense$1,600 $3,484 $530" }, { "status": "MODIFIED", "current_title": "Gross payments from case reserves by type of exposure", "prior_title": "Gross payments from case reserves by type of exposure", "similarity_score": 0.743, "confidence": "medium", "key_changes": [ "Reworded sentence: \"Gross (1) Ceded (2) Gross (1) In 2023 and 2022, 85% and 88% of payments related to settlement agreements, respectively.\"", "Reworded sentence: \"Reinsurance collections were $35 million and $37 million for 2023 and 2022, respectively.\"", "Reworded sentence: \"Total net reserves as of December 31, 2023, included $762 million or 53% of estimated IBNR reserves compared to $765 million or 53% of estimated IBNR reserves as of December 31, 2022.\"", "Reworded sentence: \"Reinsurance collections were $35 million and $37 million for 2023 and 2022, respectively.\"" ], "current_body": "Gross (1) Ceded (2) Gross (1) In 2023 and 2022, 85% and 88% of payments related to settlement agreements, respectively. (2) In 2023 and 2022, 83% and 94% of payments related to settlement agreements, respectively. Total net reserves as of December 31, 2023, included $762 million or 53% of estimated IBNR reserves compared to $765 million or 53% of estimated IBNR reserves as of December 31, 2022.Total gross payments were $124 million and $125 million for 2023 and 2022, respectively. Payments primarily related to settlement agreements reached with several insureds on large claims, mainly asbestos related losses, where the scope of coverages has been agreed upon. The claims associated with these settlement agreements are expected to be substantially paid out over the next several years as qualified claims are submitted by these insureds. Reinsurance collections were $35 million and $37 million for 2023 and 2022, respectively. The allowance for uncollectible reinsurance recoverables was $59 million and $58 million as of December 31, 2023 and 2022, respectively. The allowance represents 10.3% and 10.0% of the related reinsurance recoverable balances as of December 31, 2023 and 2022, respectively. Total net reserves as of December 31, 2023, included $762 million or 53% of estimated IBNR reserves compared to $765 million or 53% of estimated IBNR reserves as of December 31, 2022.Total gross payments were $124 million and $125 million for 2023 and 2022, respectively. Payments primarily related to settlement agreements reached with several insureds on large claims, mainly asbestos related losses, where the scope of coverages has been agreed upon. The claims associated with these settlement agreements are expected to be substantially paid out over the next several years as qualified claims are submitted by these insureds. Total net reserves as of December 31, 2023, included $762 million or 53% of estimated IBNR reserves compared to $765 million or 53% of estimated IBNR reserves as of December 31, 2022. Total gross payments were $124 million and $125 million for 2023 and 2022, respectively. Payments primarily related to settlement agreements reached with several insureds on large claims, mainly asbestos related losses, where the scope of coverages has been agreed upon. The claims associated with these settlement agreements are expected to be substantially paid out over the next several years as qualified claims are submitted by these insureds. Reinsurance collections were $35 million and $37 million for 2023 and 2022, respectively. The allowance for uncollectible reinsurance recoverables was $59 million and $58 million as of December 31, 2023 and 2022, respectively. The allowance represents 10.3% and 10.0% of the related reinsurance recoverable balances as of December 31, 2023 and 2022, respectively. Reinsurance collections were $35 million and $37 million for 2023 and 2022, respectively. The allowance for uncollectible reinsurance recoverables was $59 million and $58 million as of December 31, 2023 and 2022, respectively. The allowance represents 10.3% and 10.0% of the related reinsurance recoverable balances as of December 31, 2023 and 2022, respectively. The Allstate Corporation 53 The Allstate Corporation 53 The Allstate Corporation 53 2023 Form 10-K Protection Services 2023 Form 10-K Protection Services", "prior_body": "Gross (1) Ceded (2) Gross (1) In 2022, 88% of payments related to settlement agreements. (2) In 2022, 94% of payments related to settlement agreements. Total net reserves as of December 31, 2022, included $765 million or 53% of estimated IBNR reserves compared to $733 million or 52% of estimated IBNR reserves as of December 31, 2021.Total gross payments were $125 million and $142 million for 2022 and 2021, respectively. Payments mainly related to settlement agreements reached with several insureds on large claims, mainly asbestos related losses, where the scope of liability has been agreed upon. The claims associated with these settlement agreements are expected to be substantially paid out over the next several years as qualified claims are submitted by these insureds. Reinsurance collections were $37 million and $39 million for 2022 and 2021, respectively. The allowance for uncollectible reinsurance recoverables was $58 million and $63 million as of December 31, 2022 and 2021, respectively. The allowance represents 10.0% and 11.0% of the related reinsurance recoverable balances as of December 31, 2022 and 2021, respectively. Total net reserves as of December 31, 2022, included $765 million or 53% of estimated IBNR reserves compared to $733 million or 52% of estimated IBNR reserves as of December 31, 2021.Total gross payments were $125 million and $142 million for 2022 and 2021, respectively. Payments mainly related to settlement agreements reached with several insureds on large claims, mainly asbestos related losses, where the scope of liability has been agreed upon. The claims associated with these settlement agreements are expected to be substantially paid out over the next several years as qualified claims are submitted by these insureds. Total net reserves as of December 31, 2022, included $765 million or 53% of estimated IBNR reserves compared to $733 million or 52% of estimated IBNR reserves as of December 31, 2021. Total gross payments were $125 million and $142 million for 2022 and 2021, respectively. Payments mainly related to settlement agreements reached with several insureds on large claims, mainly asbestos related losses, where the scope of liability has been agreed upon. The claims associated with these settlement agreements are expected to be substantially paid out over the next several years as qualified claims are submitted by these insureds. Reinsurance collections were $37 million and $39 million for 2022 and 2021, respectively. The allowance for uncollectible reinsurance recoverables was $58 million and $63 million as of December 31, 2022 and 2021, respectively. The allowance represents 10.0% and 11.0% of the related reinsurance recoverable balances as of December 31, 2022 and 2021, respectively. Reinsurance collections were $37 million and $39 million for 2022 and 2021, respectively. The allowance for uncollectible reinsurance recoverables was $58 million and $63 million as of December 31, 2022 and 2021, respectively. The allowance represents 10.0% and 11.0% of the related reinsurance recoverable balances as of December 31, 2022 and 2021, respectively. 52 www.allstate.com 52 www.allstate.com 52 www.allstate.com Protection Services 2022 Form 10-K Protection Services 2022 Form 10-K" }, { "status": "MODIFIED", "current_title": "For the year ended December 31, 2023", "prior_title": "For the year ended December 31, 2022", "similarity_score": 0.743, "confidence": "medium", "key_changes": [ "Reworded sentence: \"Gross claim frequency decreased in 2023 compared to 2022 primarily due to fire and water perils.\"", "Reworded sentence: \"Other business lines loss ratio increased 8.9 points in 2023 compared to 2022 primarily due to higher non-catastrophe losses and unfavorable prior year reserve reestimates.\"", "Reworded sentence: \"Catastrophe losses by the type of eventFor the years ended December 31,($ in millions)Number of events2023Number of events2022Number of events2021Hurricanes/tropical storms3 $66 2 $399 6 $742 Tornadoes4 189 4 192 3 107 Wind/hail136 5,065 106 1,936 85 1,878 Wildfires4 335 9 52 5 269 Freeze/other events2 5 3 515 2 611 Prior year reserve reestimates(24)28 35 Prior year aggregate reinsurance recoveries — (10)(237)Current year aggregate reinsurance recoveries— — (66)Total catastrophe losses (1)149 $5,636 124 $3,112 101 $3,339\"" ], "current_body": "Gross claim frequency decreased in 2023 compared to 2022 primarily due to fire and water perils. Paid claim severity increased in 2023 compared to 2022 due to inflationary loss cost pressure driven by increases in labor and materials costs. Homeowner paid claim severity can be impacted by both the mix of perils and the magnitude of specific losses paid during the period. Other personal lines loss ratio increased 2.3 points in 2023 compared to 2022, primarily due to higher catastrophe losses and increased severity, partially offset by increased premiums earned. Commercial lines loss ratio decreased 14.9 points in 2023 compared to 2022 primarily due to the result of profitability actions taken and lower unfavorable reserve reestimates, partially offset by continued elevated frequency and severity. Other business lines loss ratio increased 8.9 points in 2023 compared to 2022 primarily due to higher non-catastrophe losses and unfavorable prior year reserve reestimates.Catastrophe losses increased 81.1% or $2.52 billion in 2023 compared to 2022 primarily related to an increased number of wind/hail events and larger losses per event.Reinsurance recoveries in 2021 related to the Nationwide Aggregate Reinsurance Program for aggregate catastrophe losses occurring between April 1, 2020 and December 31, 2020, which primarily impacted homeowners prior year reserve reestimates.We define a “catastrophe” as an event that produces pre-tax losses before reinsurance in excess of $1 million and involves multiple first party policyholders, or a winter weather event that produces a number of claims in excess of a preset, per-event threshold of average claims in a specific area, occurring within a certain amount of time following the event. Catastrophes are caused by various natural events including high winds, winter storms and freezes, tornadoes, hailstorms, wildfires, tropical storms, tsunamis, hurricanes, earthquakes and volcanoes. We are also exposed to man-made catastrophic events, such as certain types of terrorism, civil unrest, wildfires or industrial accidents. The nature and level of catastrophes in any period cannot be reliably predicted. Other business lines loss ratio increased 8.9 points in 2023 compared to 2022 primarily due to higher non-catastrophe losses and unfavorable prior year reserve reestimates. Catastrophe losses increased 81.1% or $2.52 billion in 2023 compared to 2022 primarily related to an increased number of wind/hail events and larger losses per event. Reinsurance recoveries in 2021 related to the Nationwide Aggregate Reinsurance Program for aggregate catastrophe losses occurring between April 1, 2020 and December 31, 2020, which primarily impacted homeowners prior year reserve reestimates. We define a “catastrophe” as an event that produces pre-tax losses before reinsurance in excess of $1 million and involves multiple first party policyholders, or a winter weather event that produces a number of claims in excess of a preset, per-event threshold of average claims in a specific area, occurring within a certain amount of time following the event. Catastrophes are caused by various natural events including high winds, winter storms and freezes, tornadoes, hailstorms, wildfires, tropical storms, tsunamis, hurricanes, earthquakes and volcanoes. We are also exposed to man-made catastrophic events, such as certain types of terrorism, civil unrest, wildfires or industrial accidents. The nature and level of catastrophes in any period cannot be reliably predicted. Catastrophe losses by the type of eventFor the years ended December 31,($ in millions)Number of events2023Number of events2022Number of events2021Hurricanes/tropical storms3 $66 2 $399 6 $742 Tornadoes4 189 4 192 3 107 Wind/hail136 5,065 106 1,936 85 1,878 Wildfires4 335 9 52 5 269 Freeze/other events2 5 3 515 2 611 Prior year reserve reestimates(24)28 35 Prior year aggregate reinsurance recoveries — (10)(237)Current year aggregate reinsurance recoveries— — (66)Total catastrophe losses (1)149 $5,636 124 $3,112 101 $3,339", "prior_body": "Gross claim frequency decreased in 2022 compared to 2021 primarily due to a decline in the wind/hail and water perils. Paid claim severity increased in 2022 compared to 2021 due to inflationary loss cost pressure driven by increases in labor and materials costs and time to repair. Homeowner paid claim severity can be impacted by both the mix of perils and the magnitude of specific losses paid during the quarter. Other personal lines loss ratio increased 16.8 points in 2022 compared to 2021, primarily due to higher losses, excluding catastrophes, partially offset by increased premiums earned. Commercial lines loss ratio increased 23.2 points in 2022 compared to 2021 due to higher unfavorable prior year reserve reestimates, excluding catastrophes, primarily in bodily injury coverage for both shared economy and traditional segments with a large portion of the traditional segment increase related to states we are exiting, and higher auto severity, partially offset by increased premiums earned.Catastrophe losses decreased 6.8% or $227 million in 2022 compared to 2021. Catastrophe losses in 2022 included gross losses of $1.13 billion and net losses of $843 million related to Hurricane Ian and Winter Storm Elliott. Approximately 75% of Hurricane Ian net estimated losses relate to auto coverages. Auto policyholders generally have coverage for physical damage due to flood if they have purchased optional auto comprehensive coverage. Homeowners policies specifically exclude coverage for losses caused by flood.Reinsurance recoveries in 2021 related to the Nationwide Aggregate Reinsurance Program for aggregate catastrophe losses occurring between April 1, 2020 and December 31, 2020, which primarily impacted homeowners prior year reserve reestimates.We define a “catastrophe” as an event that produces pre-tax losses before reinsurance in excess of $1 million and involves multiple first party policyholders, or a winter weather event that produces a number of claims in excess of a preset, per-event threshold of average claims in a specific area, occurring within a certain amount of time following the event. Catastrophes are caused by various natural events including high winds, winter storms and freezes, tornadoes, hailstorms, wildfires, tropical storms, tsunamis, hurricanes, earthquakes and volcanoes. We are also exposed to man-made catastrophic events, such as certain types of terrorism, civil unrest, wildfires or industrial accidents. The nature and level of catastrophes in any period cannot be reliably predicted. we are exiting, and higher auto severity, partially offset by increased premiums earned. Catastrophe losses decreased 6.8% or $227 million in 2022 compared to 2021. Catastrophe losses in 2022 included gross losses of $1.13 billion and net losses of $843 million related to Hurricane Ian and Winter Storm Elliott. Approximately 75% of Hurricane Ian net estimated losses relate to auto coverages. Auto policyholders generally have coverage for physical damage due to flood if they have purchased optional auto comprehensive coverage. Homeowners policies specifically exclude coverage for losses caused by flood. Reinsurance recoveries in 2021 related to the Nationwide Aggregate Reinsurance Program for aggregate catastrophe losses occurring between April 1, 2020 and December 31, 2020, which primarily impacted homeowners prior year reserve reestimates. We define a “catastrophe” as an event that produces pre-tax losses before reinsurance in excess of $1 million and involves multiple first party policyholders, or a winter weather event that produces a number of claims in excess of a preset, per-event threshold of average claims in a specific area, occurring within a certain amount of time following the event. Catastrophes are caused by various natural events including high winds, winter storms and freezes, tornadoes, hailstorms, wildfires, tropical storms, tsunamis, hurricanes, earthquakes and volcanoes. We are also exposed to man-made catastrophic events, such as certain types of terrorism, civil unrest, wildfires or industrial accidents. The nature and level of catastrophes in any period cannot be reliably predicted. Catastrophe losses by the type of eventFor the years ended December 31,($ in millions)Number of events2022Number of events2021Number of events2020Hurricanes/tropical storms2 $399 6 $742 9 $1,001 Tornadoes4 192 3 107 3 43 Wind/hail106 1,936 85 1,878 73 1,940 Wildfires9 52 5 269 17 300 Freeze/other events3 515 2 611 3 30 Prior year reserve reestimates28 35 (503)(2)Prior year aggregate reinsurance recoveries (10)(237)— Current year aggregate reinsurance recoveries— (66)— Total catastrophe losses (1)124 $3,112 101 $3,339 105 $2,811" }, { "status": "MODIFIED", "current_title": "Impact of reserve reestimates by line on combined ratio and underwriting income", "prior_title": "Impact of reserve reestimates by line on combined ratio and underwriting income", "similarity_score": 0.738, "confidence": "medium", "key_changes": [ "Reworded sentence: \"Reserve reestimates as a % impact on underwriting (loss) income - favorable (unfavorable) Unfavorable reserve reestimates in 2023 were primarily due to National General personal auto lines, homeowners and commercial lines.Unfavorable reserve reestimates for personal auto in 2022 were primarily from bodily injury and physical damage coverages.\"", "Reworded sentence: \"Unfavorable reserve reestimates for commercial were primarily from auto injury coverages for both shared economy and traditional segments with a large portion of the traditional segment increase related to states where the Company will no longer be selling new business.Run-off Property-Liability We conduct an annual review in the third quarter of each year to evaluate and establish asbestos, environmental and other run-off reserves.\"", "Reworded sentence: \"Unfavorable reserve reestimates for commercial were primarily from auto injury coverages for both shared economy and traditional segments with a large portion of the traditional segment increase related to states where the Company will no longer be selling new business.\"", "Reworded sentence: \"Unfavorable reserve reestimates for commercial were primarily from auto injury coverages for both shared economy and traditional segments with a large portion of the traditional segment increase related to states where the Company will no longer be selling new business.\"" ], "current_body": "Reserve reestimates as a % impact on underwriting (loss) income - favorable (unfavorable) Unfavorable reserve reestimates in 2023 were primarily due to National General personal auto lines, homeowners and commercial lines.Unfavorable reserve reestimates for personal auto in 2022 were primarily from bodily injury and physical damage coverages. Increases in injury coverages reflected recent data and updated assumptions related to severity of third-party bodily injury claims, Unfavorable reserve reestimates in 2023 were primarily due to National General personal auto lines, homeowners and commercial lines. Unfavorable reserve reestimates in 2023 were primarily due to National General personal auto lines, homeowners and commercial lines. Unfavorable reserve reestimates for personal auto in 2022 were primarily from bodily injury and physical damage coverages. Increases in injury coverages reflected recent data and updated assumptions related to severity of third-party bodily injury claims, Unfavorable reserve reestimates for personal auto in 2022 were primarily from bodily injury and physical damage coverages. Increases in injury coverages reflected recent data and updated assumptions related to severity of third-party bodily injury claims, The Allstate Corporation 57 The Allstate Corporation 57 The Allstate Corporation 57 2023 Form 10-K Property and Casualty Insurance Claims and Claims Expense Reserves 2023 Form 10-K Property and Casualty Insurance Claims and Claims Expense Reserves increased claims with attorney representation, litigation costs, increased medical treatment utilization and higher medical inflation. Increases in physical damage reflected the ongoing inflationary factors and supply chain shortages impacting used vehicle and parts prices, labor rates and length of claim resolution. Delays in the receipt of claims, including third-party carrier claims also contributed to the adverse development of claims reported in prior years. Unfavorable reserve reestimates for commercial were primarily from auto injury coverages for both shared economy and traditional segments with a large portion of the traditional segment increase related to states where the Company will no longer be selling new business.Run-off Property-Liability We conduct an annual review in the third quarter of each year to evaluate and establish asbestos, environmental and other run-off reserves. Reserves are recorded in the reporting period in which they are determined. Using established industry and actuarial best practices and assuming no change in the regulatory or economic environment, this detailed and comprehensive methodology determines reserves based on assessments of the characteristics of exposure (e.g. claim activity, potential liability, jurisdiction, products versus non-products exposure) presented by policyholders. increased claims with attorney representation, litigation costs, increased medical treatment utilization and higher medical inflation. Increases in physical damage reflected the ongoing inflationary factors and supply chain shortages impacting used vehicle and parts prices, labor rates and length of claim resolution. Delays in the receipt of claims, including third-party carrier claims also contributed to the adverse development of claims reported in prior years. Unfavorable reserve reestimates for commercial were primarily from auto injury coverages for both shared economy and traditional segments with a large portion of the traditional segment increase related to states where the Company will no longer be selling new business. increased claims with attorney representation, litigation costs, increased medical treatment utilization and higher medical inflation. Increases in physical damage reflected the ongoing inflationary factors and supply chain shortages impacting used vehicle and parts prices, labor rates and length of claim resolution. Delays in the receipt of claims, including third-party carrier claims also contributed to the adverse development of claims reported in prior years. Unfavorable reserve reestimates for commercial were primarily from auto injury coverages for both shared economy and traditional segments with a large portion of the traditional segment increase related to states where the Company will no longer be selling new business. Run-off Property-Liability We conduct an annual review in the third quarter of each year to evaluate and establish asbestos, environmental and other run-off reserves. Reserves are recorded in the reporting period in which they are determined. Using established industry and actuarial best practices and assuming no change in the regulatory or economic environment, this detailed and comprehensive methodology determines reserves based on assessments of the characteristics of exposure (e.g. claim activity, potential liability, jurisdiction, products versus non-products exposure) presented by policyholders.", "prior_body": "Unfavorable reserve reestimates for personal auto are primarily from bodily injury and physical damage coverages. Increases in injury coverages reflect recent data and updated assumptions related to severity of third-party bodily injury claims, increased claims with attorney representation, litigation costs, increased medical treatment utilization and higher medical inflation. Increases in physical damage reflect the ongoing inflationary factors and supply chain shortages impacting used vehicle and parts prices, labor rates and length of claim resolution. Delays in the receipt of claims, including third-party carrier claims also contributed to the adverse development of claims reported in prior years. The estimate of the year-to- Unfavorable reserve reestimates for personal auto are primarily from bodily injury and physical damage coverages. Increases in injury coverages reflect recent data and updated assumptions related to severity of third-party bodily injury claims, increased claims with attorney representation, litigation costs, increased medical treatment utilization and higher medical Unfavorable reserve reestimates for personal auto are primarily from bodily injury and physical damage coverages. Increases in injury coverages reflect recent data and updated assumptions related to severity of third-party bodily injury claims, increased claims with attorney representation, litigation costs, increased medical treatment utilization and higher medical inflation. Increases in physical damage reflect the ongoing inflationary factors and supply chain shortages impacting used vehicle and parts prices, labor rates and length of claim resolution. Delays in the receipt of claims, including third-party carrier claims also contributed to the adverse development of claims reported in prior years. The estimate of the year-to- inflation. Increases in physical damage reflect the ongoing inflationary factors and supply chain shortages impacting used vehicle and parts prices, labor rates and length of claim resolution. Delays in the receipt of claims, including third-party carrier claims also contributed to the adverse development of claims reported in prior years. The estimate of the year-to- 56 www.allstate.com 56 www.allstate.com 56 www.allstate.com Property and Casualty Insurance Claims and Claims Expense Reserves 2022 Form 10-K Property and Casualty Insurance Claims and Claims Expense Reserves 2022 Form 10-K date current report year claim severity increased in the fourth quarter for bodily injury and physical damage coverages to reflect continued increases in loss costs. Personal auto insurance claim frequency has continued to increase, but remains below 2019 levels. Late reported claim frequency attributable to prior accident years also impacted reserve reestimates. Unfavorable reserve reestimates for commercial are primarily from auto injury coverages for both shared economy and traditional segments with a large portion of the traditional segment increase related to states where the Company will no longer be selling new business.Favorable results for homeowners insurance in 2021 were primarily due to catastrophe reserve reestimates driven by estimated recoveries related to our aggregate reinsurance coverage and wildfire subrogation settlements. Unfavorable reserve reestimates for auto and commercial lines in 2021 primarily related to auto liability coverages. date current report year claim severity increased in the fourth quarter for bodily injury and physical damage coverages to reflect continued increases in loss costs. Personal auto insurance claim frequency has continued to increase, but remains below 2019 levels. Late reported claim frequency attributable to prior accident years also impacted reserve reestimates. Unfavorable reserve reestimates for commercial are primarily from auto injury coverages for both shared economy and traditional segments with a large date current report year claim severity increased in the fourth quarter for bodily injury and physical damage coverages to reflect continued increases in loss costs. Personal auto insurance claim frequency has continued to increase, but remains below 2019 levels. Late reported claim frequency attributable to prior accident years also impacted reserve reestimates. Unfavorable reserve reestimates for commercial are primarily from auto injury coverages for both shared economy and traditional segments with a large portion of the traditional segment increase related to states where the Company will no longer be selling new business.Favorable results for homeowners insurance in 2021 were primarily due to catastrophe reserve reestimates driven by estimated recoveries related to our aggregate reinsurance coverage and wildfire subrogation settlements. Unfavorable reserve reestimates for auto and commercial lines in 2021 primarily related to auto liability coverages. portion of the traditional segment increase related to states where the Company will no longer be selling new business. Favorable results for homeowners insurance in 2021 were primarily due to catastrophe reserve reestimates driven by estimated recoveries related to our aggregate reinsurance coverage and wildfire subrogation settlements. Unfavorable reserve reestimates for auto and commercial lines in 2021 primarily related to auto liability coverages." }, { "status": "MODIFIED", "current_title": "Premiums and contract charges", "prior_title": "Premiums and contract charges", "similarity_score": 0.737, "confidence": "medium", "key_changes": [ "Reworded sentence: \"The Allstate Corporation 63 The Allstate Corporation 63 The Allstate Corporation 63 2023 Form 10-K Allstate Health and Benefits 2023 Form 10-K Allstate Health and Benefits New annualized premium sales (annualized premiums at initial employer voluntary benefits customer enrollment or health policy sale) decreased by $2 million to $732 million in 2023.\"" ], "current_body": "The Allstate Corporation 63 The Allstate Corporation 63 The Allstate Corporation 63 2023 Form 10-K Allstate Health and Benefits 2023 Form 10-K Allstate Health and Benefits New annualized premium sales (annualized premiums at initial employer voluntary benefits customer enrollment or health policy sale) decreased by $2 million to $732 million in 2023. The decrease in 2023 primarily relates to a decline in employer voluntary benefits, partially offset by growth in group health and individual health businesses.Other revenue increased $45 million in 2023 compared to 2022, primarily due to an increase in group health administrative fees.Accident, health and other policy benefits increased 2.8% or $29 million in 2023 compared to 2022, primarily due to growth in group health, partially offset by lower benefit utilization in individual health.Accident, health and other policy benefits include changes in the reserve for future policy benefits, expected development on reported claims, and reserves for incurred but not reported claims as shown in Note 10 of the consolidated financial statements.Benefit ratio increased 1.1 points to 56.2 in 2023 compared to 55.1 in 2022, primarily due to higher benefit utilization in employer voluntary benefits and group health, partially offset by lower benefit utilization in individual health.Amortization of DAC increased 10.3% or $14 million in 2023 compared to 2022, primarily due to higher amortization related to growth in individual health. For information on changes in DAC, see Note 12 of the consolidated financial statements. New annualized premium sales (annualized premiums at initial employer voluntary benefits customer enrollment or health policy sale) decreased by $2 million to $732 million in 2023. The decrease in 2023 primarily relates to a decline in employer voluntary benefits, partially offset by growth in group health and individual health businesses.Other revenue increased $45 million in 2023 compared to 2022, primarily due to an increase in group health administrative fees.Accident, health and other policy benefits increased 2.8% or $29 million in 2023 compared to 2022, primarily due to growth in group health, partially offset by lower benefit utilization in individual health.Accident, health and other policy benefits include changes in the reserve for future policy benefits, New annualized premium sales (annualized premiums at initial employer voluntary benefits customer enrollment or health policy sale) decreased by $2 million to $732 million in 2023. The decrease in 2023 primarily relates to a decline in employer voluntary benefits, partially offset by growth in group health and individual health businesses. Other revenue increased $45 million in 2023 compared to 2022, primarily due to an increase in group health administrative fees. Accident, health and other policy benefits increased 2.8% or $29 million in 2023 compared to 2022, primarily due to growth in group health, partially offset by lower benefit utilization in individual health. Accident, health and other policy benefits include changes in the reserve for future policy benefits, expected development on reported claims, and reserves for incurred but not reported claims as shown in Note 10 of the consolidated financial statements.Benefit ratio increased 1.1 points to 56.2 in 2023 compared to 55.1 in 2022, primarily due to higher benefit utilization in employer voluntary benefits and group health, partially offset by lower benefit utilization in individual health.Amortization of DAC increased 10.3% or $14 million in 2023 compared to 2022, primarily due to higher amortization related to growth in individual health. For information on changes in DAC, see Note 12 of the consolidated financial statements. expected development on reported claims, and reserves for incurred but not reported claims as shown in Note 10 of the consolidated financial statements. Benefit ratio increased 1.1 points to 56.2 in 2023 compared to 55.1 in 2022, primarily due to higher benefit utilization in employer voluntary benefits and group health, partially offset by lower benefit utilization in individual health. Amortization of DAC increased 10.3% or $14 million in 2023 compared to 2022, primarily due to higher amortization related to growth in individual health. For information on changes in DAC, see Note 12 of the consolidated financial statements. Operating costs and expensesFor the years ended December 31,($ in millions)202320222021Non-deferrable commissions$319 $321 $316 General and administrative expenses523 493 471 Total operating costs and expenses$842 $814 $787", "prior_body": "62 www.allstate.com 62 www.allstate.com 62 www.allstate.com Allstate Health and Benefits 2022 Form 10-K Allstate Health and Benefits 2022 Form 10-K New annualized premium sales (annualized premiums at initial employer voluntary benefits customer enrollment or health policy sale) decreased to $734 million in 2022. The decrease in 2022 primarily relates to a decline in employer voluntary benefits and individual health business, partially offset by growth in group health.Other revenue increased $43 million in 2022 compared to 2021, primarily due to an increase in group health administrative fees.Accident, health and other policy benefits increased 1.1% or $12 million in 2022 compared to 2021, primarily due to increased contract benefits for group health, partially offset by employer voluntary benefits and individual health.Benefit ratio increased to 56.1 in 2022 compared to 55.7 in 2021, primarily due to a higher benefit ratio in group and individual health, partially offset by a lower benefit ratio in employer voluntary benefits. Accident, health and other policy benefits include changes in estimated reserves for future policy benefits, expected development on reported claims, and reserves for incurred but not reported claims as discussed in Note 10. New annualized premium sales (annualized premiums at initial employer voluntary benefits customer enrollment or health policy sale) decreased to $734 million in 2022. The decrease in 2022 primarily relates to a decline in employer voluntary benefits and individual health business, partially offset by growth in group health.Other revenue increased $43 million in 2022 compared to 2021, primarily due to an increase in group health administrative fees. New annualized premium sales (annualized premiums at initial employer voluntary benefits customer enrollment or health policy sale) decreased to $734 million in 2022. The decrease in 2022 primarily relates to a decline in employer voluntary benefits and individual health business, partially offset by growth in group health. Other revenue increased $43 million in 2022 compared to 2021, primarily due to an increase in group health administrative fees. Accident, health and other policy benefits increased 1.1% or $12 million in 2022 compared to 2021, primarily due to increased contract benefits for group health, partially offset by employer voluntary benefits and individual health.Benefit ratio increased to 56.1 in 2022 compared to 55.7 in 2021, primarily due to a higher benefit ratio in group and individual health, partially offset by a lower benefit ratio in employer voluntary benefits. Accident, health and other policy benefits include changes in estimated reserves for future policy benefits, expected development on reported claims, and reserves for incurred but not reported claims as discussed in Note 10. Accident, health and other policy benefits increased 1.1% or $12 million in 2022 compared to 2021, primarily due to increased contract benefits for group health, partially offset by employer voluntary benefits and individual health. Benefit ratio increased to 56.1 in 2022 compared to 55.7 in 2021, primarily due to a higher benefit ratio in group and individual health, partially offset by a lower benefit ratio in employer voluntary benefits. Accident, health and other policy benefits include changes in estimated reserves for future policy benefits, expected development on reported claims, and reserves for incurred but not reported claims as discussed in Note 10. Changes in DACFor the years ended($ in millions)20222021Balance, beginning of year$477 $470 National General acquisition— 3 Acquisition costs deferred170 146 Amortization of DAC before amortization relating to changes in assumptions (1)(146)(146)Amortization relating to net gains and losses on investments and derivatives (1)(1)— Amortization acceleration for DAC unlocking (1) 1 2 Effect of unrealized capital gains and losses (2)3 2 Ending balance$504 $477" }, { "status": "MODIFIED", "current_title": "Portfolio composition by investment strategy", "prior_title": "Portfolio composition by investment strategy", "similarity_score": 0.733, "confidence": "medium", "key_changes": [ "Reworded sentence: \"During 2023, strategic actions focused on optimizing portfolio yield, return and risk in the more volatile and rising interest rate environment.\"", "Reworded sentence: \"During 2023, strategic actions focused on optimizing portfolio yield, return and risk in the more volatile and rising interest rate environment.\"", "Reworded sentence: \"features associated with the securities) during 2023 from 3.4 years as of December 31, 2022.\"" ], "current_body": "During 2023, strategic actions focused on optimizing portfolio yield, return and risk in the more volatile and rising interest rate environment. The sustained higher market yields provide an opportunity to increase risk-adjusted returns, so we extended the fixed income portfolio duration to 4.8 years (including the effect of interest rate derivatives and any call features associated with the securities) during 2023 from 3.4 years as of December 31, 2022. Considering the ongoing risk of recession, we retained a lower allocation to high-yield bonds, bank loans and public equity relative to year-end 2022. We maintained performance-based investments in the Property-Liability portfolio. During 2023, strategic actions focused on optimizing portfolio yield, return and risk in the more volatile and rising interest rate environment. The sustained higher market yields provide an opportunity to increase risk-adjusted returns, so we extended the fixed income portfolio duration to 4.8 years (including the effect of interest rate derivatives and any call During 2023, strategic actions focused on optimizing portfolio yield, return and risk in the more volatile and rising interest rate environment. The sustained higher market yields provide an opportunity to increase risk-adjusted returns, so we extended the fixed income portfolio duration to 4.8 years (including the effect of interest rate derivatives and any call features associated with the securities) during 2023 from 3.4 years as of December 31, 2022. Considering the ongoing risk of recession, we retained a lower allocation to high-yield bonds, bank loans and public equity relative to year-end 2022. We maintained performance-based investments in the Property-Liability portfolio. features associated with the securities) during 2023 from 3.4 years as of December 31, 2022. Considering the ongoing risk of recession, we retained a lower allocation to high-yield bonds, bank loans and public equity relative to year-end 2022. We maintained performance-based investments in the Property-Liability portfolio.", "prior_body": "During 2022, strategic actions focused on optimizing portfolio yield, return and risk in the more volatile and rising interest rate environment. In the first quarter, we continued to shorten the maturity profile of our fixed income portfolio through the sale of bonds and use of derivatives, to further reduce its sensitivity to higher interest rates. The sustained higher market yields provide an opportunity to increase risk-adjusted returns, so in the fourth quarter, we extended the duration to 3.4 years (including the effect of interest rate derivatives and any call features associated with the securities), and removed approximately half of the interest rate derivatives that we entered into in the first quarter of 2022. Considering the ongoing risk of recession, we retained a lower allocation to high-yield bonds, bank loans and public equity relative to year-end 2021. We maintained performance-based investments in the Property-Liability portfolio. During 2022, strategic actions focused on optimizing portfolio yield, return and risk in the more volatile and rising interest rate environment. In the first quarter, we continued to shorten the maturity profile of our fixed income portfolio through the sale of bonds and use of derivatives, to further reduce its sensitivity to higher interest rates. The sustained higher market yields provide an opportunity to increase risk-adjusted returns, so in the fourth quarter, we extended the duration to 3.4 years (including the effect of interest During 2022, strategic actions focused on optimizing portfolio yield, return and risk in the more volatile and rising interest rate environment. In the first quarter, we continued to shorten the maturity profile of our fixed income portfolio through the sale of bonds and use of derivatives, to further reduce its sensitivity to higher interest rates. The sustained higher market yields provide an opportunity to increase risk-adjusted returns, so in the fourth quarter, we extended the duration to 3.4 years (including the effect of interest rate derivatives and any call features associated with the securities), and removed approximately half of the interest rate derivatives that we entered into in the first quarter of 2022. Considering the ongoing risk of recession, we retained a lower allocation to high-yield bonds, bank loans and public equity relative to year-end 2021. We maintained performance-based investments in the Property-Liability portfolio. rate derivatives and any call features associated with the securities), and removed approximately half of the interest rate derivatives that we entered into in the first quarter of 2022. Considering the ongoing risk of recession, we retained a lower allocation to high-yield bonds, bank loans and public equity relative to year-end 2021. We maintained performance-based investments in the Property-Liability portfolio." }, { "status": "MODIFIED", "current_title": "Ending reserves (2)", "prior_title": "Ending reserves (2)", "similarity_score": 0.732, "confidence": "medium", "key_changes": [ "Reworded sentence: \"(1)Paid claims and claims expenses reported in the table for the current and prior years, recovered from the MCCA totaled $106 million, $114 million and $117 million in 2023, 2022 and 2021, respectively.\"", "Removed sentence: \"Gross reserves for the year ended December 31, 2020, comprise 82% case reserves and 18% IBNR.\"", "Reworded sentence: \"As of December 31, 2023, approximately 1,350 of our catastrophic claims that are eligible for reimbursement are pending with the MCCA, of which approximately 80% represents claims that occurred more than 5 years ago.\"" ], "current_body": "(1)Paid claims and claims expenses reported in the table for the current and prior years, recovered from the MCCA totaled $106 million, $114 million and $117 million in 2023, 2022 and 2021, respectively. (2)Gross reserves for the year ended December 31, 2023, comprise 77% case reserves and 23% IBNR. Gross reserves for the year ended December 31, 2022, comprise 76% case reserves and 24% IBNR. Gross reserves for the year ended December 31, 2021, comprise 74% case reserves and 26% IBNR. The MCCA does not require member companies to report ultimate case reserves. Pending MCCA claims differ from most personal lines insurance pending claims as other personal lines policies incurred claims settle in shorter periods due to having a coverage limit. MCCA claims can be outstanding for a claimant’s lifetime, as there is no contractual limitation. Many of these injuries are catastrophic in nature, resulting in serious permanent disabilities that require attendant and residential care for periods that may span decades. A significant portion of the ultimate incurred claim reserves and the recoverables can be attributed to a small number of catastrophic claims that occurred more than five years ago and continue to pay lifetime benefits. As of December 31, 2023, approximately 1,350 of our catastrophic claims that are eligible for reimbursement are pending with the MCCA, of which approximately 80% represents claims that occurred more than 5 years ago. There are 74 claims with reserves in excess of $15 million as of December 31, 2023, which comprise approximately 30% of the gross ending reserves in the table above. As a result, significant developments with a single claimant can result in volatility in prior year incurred claims. Pending MCCA claims differ from most personal lines insurance pending claims as other personal lines policies incurred claims settle in shorter periods due to having a coverage limit. MCCA claims can be outstanding for a claimant’s lifetime, as there is no contractual limitation. Many of these injuries are catastrophic in nature, resulting in serious permanent disabilities that require attendant and residential care for periods that may span decades. A significant portion of the ultimate incurred claim reserves and the recoverables can be attributed to a small number of catastrophic claims that occurred more than five years ago and continue to pay lifetime benefits. Pending MCCA claims differ from most personal lines insurance pending claims as other personal lines policies incurred claims settle in shorter periods due to having a coverage limit. MCCA claims can be outstanding for a claimant’s lifetime, as there is no contractual limitation. Many of these injuries are catastrophic in nature, resulting in serious permanent disabilities that require attendant and residential care for periods that may span decades. A significant portion of the ultimate incurred claim reserves and the recoverables can be attributed to a small number of catastrophic claims that occurred more than five years ago and continue to pay lifetime benefits. As of December 31, 2023, approximately 1,350 of our catastrophic claims that are eligible for reimbursement are pending with the MCCA, of which approximately 80% represents claims that occurred more than 5 years ago. There are 74 claims with reserves in excess of $15 million as of December 31, 2023, which comprise approximately 30% of the gross ending reserves in the table above. As a result, significant developments with a single claimant can result in volatility in prior year incurred claims. As of December 31, 2023, approximately 1,350 of our catastrophic claims that are eligible for reimbursement are pending with the MCCA, of which approximately 80% represents claims that occurred more than 5 years ago. There are 74 claims with reserves in excess of $15 million as of December 31, 2023, which comprise approximately 30% of the gross ending reserves in the table above. As a result, significant developments with a single claimant can result in volatility in prior year incurred claims. Pending, new and closed claims for Michigan personal injury protection exposureFor the years ended December 31,Number of claims (1)202320222021Pending, beginning of year5,568 5,421 4,857 National General acquisition as of January 4, 2021— — 525 New6,496 8,059 8,616 Closed(7,338)(7,912)(8,577)Pending, end of year4,726 5,568 5,421", "prior_body": "(1)Paid claims and claims expenses reported in the table for the current and prior years, recovered from the MCCA totaled $114 million, $117 million and $103 million in 2022, 2021 and 2020, respectively. (2)Gross reserves for the year ended December 31, 2022, comprise 76% case reserves and 24% IBNR. Gross reserves for the year ended December 31, 2021, comprise 74% case reserves and 26% IBNR. Gross reserves for the year ended December 31, 2020, comprise 82% case reserves and 18% IBNR. The MCCA does not require member companies to report ultimate case reserves. Pending MCCA claims differ from most personal lines insurance pending claims as other personal lines policies incurred claims settle in shorter periods due to having a coverage limit. MCCA claims can be outstanding for a claimant’s lifetime, as there is no contractual limitation. Many of these injuries are catastrophic in nature, resulting in serious permanent disabilities that require attendant and residential care for periods that may span decades. A significant portion of the ultimate incurred claim reserves and the recoverables can be attributed to a small number of catastrophic claims that occurred more than five years ago and continue to pay lifetime benefits. Pending, new and closed claims for Michigan personal injury protection exposureFor the years ended December 31,Number of claims (1)202220212020Pending, beginning of year5,421 4,857 4,942 National General acquisition as of January 4, 2021— 525 — New8,059 8,616 5,896 Closed(7,912)(8,577)(5,981)Pending, end of year5,568 5,421 4,857" }, { "status": "MODIFIED", "current_title": "DAC balance as of December 31 by product type", "prior_title": "DAC balance as of December 31 by product type", "similarity_score": 0.727, "confidence": "medium", "key_changes": [ "Reworded sentence: \"50 www.allstate.com 50 www.allstate.com 50 www.allstate.com 2023 Form 10-K Run-off Property-Liability 2023 Form 10-K Run-off Property-Liability\"" ], "current_body": "50 www.allstate.com 50 www.allstate.com 50 www.allstate.com 2023 Form 10-K Run-off Property-Liability 2023 Form 10-K Run-off Property-Liability", "prior_body": "The Allstate Corporation 49 The Allstate Corporation 49 The Allstate Corporation 49 2022 Form 10-K Run-off Property-Liability 2022 Form 10-K Run-off Property-Liability" }, { "status": "MODIFIED", "current_title": "Underwriting results", "prior_title": "Underwriting results", "similarity_score": 0.715, "confidence": "medium", "key_changes": [ "Reworded sentence: \"Shelter-in-Place Payback expense Restructuring and related charges (1) Catastrophe reserve reestimates (2) Non-catastrophe reserve reestimates (2) Prior year reserve reestimates (2) Expense ratio (3) Effect of prior year reserve reestimates on combined ratio Effect of restructuring and related charges on combined ratio (1) (1)Restructuring and related charges in 2023 primarily relate to implementing actions to streamline the organization and outsource operations, and real estate costs related to facilities being vacated.\"", "Reworded sentence: \"42 www.allstate.com 42 www.allstate.com 42 www.allstate.com 2023 Form 10-K Allstate Protection 2023 Form 10-K Allstate Protection\"" ], "current_body": "Shelter-in-Place Payback expense Restructuring and related charges (1) Catastrophe reserve reestimates (2) Non-catastrophe reserve reestimates (2) Prior year reserve reestimates (2) Expense ratio (3) Effect of prior year reserve reestimates on combined ratio Effect of restructuring and related charges on combined ratio (1) (1)Restructuring and related charges in 2023 primarily relate to implementing actions to streamline the organization and outsource operations, and real estate costs related to facilities being vacated. See Note 14 of the consolidated financial statements for additional details. (2)Favorable reserve reestimates are shown in parentheses. (3)Other revenue is deducted from operating costs and expenses in the expense ratio calculation. 42 www.allstate.com 42 www.allstate.com 42 www.allstate.com 2023 Form 10-K Allstate Protection 2023 Form 10-K Allstate Protection", "prior_body": "Shelter-in-Place Payback expense Restructuring and related charges (1) Catastrophe reserve reestimates (2) Non-catastrophe reserve reestimates (2) Prior year reserve reestimates (2) Expense ratio (3) Effect of prior year reserve reestimates on combined ratio Effect of restructuring and related charges on combined ratio (1) (1)Restructuring and related charges in 2022 primarily related to future work environment and employee costs. See Note 14 of the consolidated financial statements for additional details. (2)Favorable reserve reestimates are shown in parentheses. (3)Other revenue is deducted from operating costs and expenses in the expense ratio calculation. The Allstate Corporation 41 The Allstate Corporation 41 The Allstate Corporation 41 2022 Form 10-K Allstate Protection 2022 Form 10-K Allstate Protection" }, { "status": "MODIFIED", "current_title": "Allstate Protection Segment", "prior_title": "Allstate Protection Segment", "similarity_score": 0.705, "confidence": "medium", "key_changes": [ "Reworded sentence: \"Private passenger auto, homeowners, and other personal lines insurance products are offered to consumers through agents, directly through contact centers and online.\"", "Reworded sentence: \"Underwriting results For the years ended December 31,($ in millions)202320222021Premiums written$50,347 $45,787 $41,358 Premiums earned$48,427 $43,909 $40,454 Other revenue1,545 1,416 1,437 Claims and claims expense(40,364)(36,607)(28,760)Shelter-in-Place Payback expense— — (29)Amortization of DAC(6,070)(5,570)(5,313)Other costs and expenses(5,251)(5,646)(5,618)Restructuring and related charges(142)(44)(145)Amortization of purchased intangibles(235)(240)(241)Underwriting (loss) income$(2,090)$(2,782)$1,785 Catastrophe losses$5,636 $3,112 $3,339\"" ], "current_body": "Private passenger auto, homeowners, and other personal lines insurance products are offered to consumers through agents, directly through contact centers and online. Our strategy is to offer products that allow customers to interact with us when, where and how they want with affordable, simple and connected protection products. For additional information on our strategy and outlook, see Part I, Item 1. Business - Strategy and Segment Information. Underwriting results For the years ended December 31,($ in millions)202320222021Premiums written$50,347 $45,787 $41,358 Premiums earned$48,427 $43,909 $40,454 Other revenue1,545 1,416 1,437 Claims and claims expense(40,364)(36,607)(28,760)Shelter-in-Place Payback expense— — (29)Amortization of DAC(6,070)(5,570)(5,313)Other costs and expenses(5,251)(5,646)(5,618)Restructuring and related charges(142)(44)(145)Amortization of purchased intangibles(235)(240)(241)Underwriting (loss) income$(2,090)$(2,782)$1,785 Catastrophe losses$5,636 $3,112 $3,339", "prior_body": "Private passenger auto, homeowners, and other personal lines insurance products are offered to consumers through exclusive and independent agents, directly through contact centers and online. The Encompass brand was combined into National General beginning in the first quarter of 2021, and results prior to 2021 reflect Encompass brand results only. Our strategy is to offer products that allow customers to interact with us when, where and how they want with affordable, simple and connected protection products. For additional information on our strategy and outlook, see Part I, Item 1. Business - Strategy and Segment Information. Underwriting results For the years ended December 31,($ in millions)202220212020Premiums written$45,787 $41,358 $35,768 Premiums earned$43,909 $40,454 $35,580 Other revenue1,416 1,437 857 Claims and claims expense(36,607)(28,760)(21,485)Shelter-in-Place Payback expense— (29)(948)Amortization of DAC(5,570)(5,313)(4,642)Other costs and expenses(5,646)(5,618)(4,546)Restructuring and related charges(44)(145)(235)Amortization of purchased intangibles(240)(241)(12)Underwriting (loss) income$(2,782)$1,785 $4,569 Catastrophe losses$3,112 $3,339 $2,811" }, { "status": "MODIFIED", "current_title": "Allstate Protection", "prior_title": "Allstate Protection", "similarity_score": 0.701, "confidence": "medium", "key_changes": [ "Reworded sentence: \"The tables below show Allstate Protection net reserves representing the estimated cost of outstanding claims as they were recorded at the beginning of years 2023, 2022, and 2021, and the effect of reestimates in each year.\"" ], "current_body": "The tables below show Allstate Protection net reserves representing the estimated cost of outstanding claims as they were recorded at the beginning of years 2023, 2022, and 2021, and the effect of reestimates in each year. Net reserves by lineJanuary 1 reserves($ in millions)202320222021Auto (1)$19,365 $16,078 $14,164 Homeowners (1)3,520 2,731 2,315 Other personal lines1,653 1,844 1,463 Commercial lines and other (2)2,338 1,471 1,194 Total Allstate Protection$26,876 $22,124 $19,136", "prior_body": "The tables below show Allstate Protection net reserves representing the estimated cost of outstanding claims as they were recorded at the beginning of years 2022, 2021, and 2020, and the effect of reestimates in each year. Net reserves by lineJanuary 1 reserves($ in millions)202220212020Auto (1)$16,078 $14,164 $14,728 Homeowners (1)2,797 2,315 2,138 Other personal lines1,844 1,463 1,459 Commercial lines and other (2)1,405 1,194 1,071 Total Allstate Protection$22,124 $19,136 $19,396" }, { "status": "MODIFIED", "current_title": "Unearned premium balance by line of business", "prior_title": "Unearned premium balance by line of business", "similarity_score": 0.698, "confidence": "medium", "key_changes": [ "Reworded sentence: \"Other business lines Policies in force by brand and by line of businessAllstate brandNational GeneralAllstate ProtectionPIF (thousands)202320222021202320222021202320222021Auto20,326 21,658 21,972 4,957 4,376 3,944 25,283 26,034 25,916 Homeowners6,652 6,622 6,525 686 638 634 7,338 7,260 7,159 Other personal lines4,522 4,636 4,578 341 300 288 4,863 4,936 4,866 Commercial lines152 204 210 132 107 105 284 311 315 Total 31,652 33,120 33,285 6,116 5,421 4,971 37,768 38,541 38,256 Auto insurance premiums written increased 10.7% or $3.29 billion in 2023 compared to 2022, primarily due to the following factors:•Increased average premiums driven by 2022 and 2023 rate increases.\"" ], "current_body": "Other business lines Policies in force by brand and by line of businessAllstate brandNational GeneralAllstate ProtectionPIF (thousands)202320222021202320222021202320222021Auto20,326 21,658 21,972 4,957 4,376 3,944 25,283 26,034 25,916 Homeowners6,652 6,622 6,525 686 638 634 7,338 7,260 7,159 Other personal lines4,522 4,636 4,578 341 300 288 4,863 4,936 4,866 Commercial lines152 204 210 132 107 105 284 311 315 Total 31,652 33,120 33,285 6,116 5,421 4,971 37,768 38,541 38,256 Auto insurance premiums written increased 10.7% or $3.29 billion in 2023 compared to 2022, primarily due to the following factors:•Increased average premiums driven by 2022 and 2023 rate increases. In the year ended December 31, 2023: –Rate increases of 17.9% were taken for Allstate brand in 55 locations, resulting in total Allstate brand insurance premium impact of 16.4%–Rate increases of 18.8% were taken for National General brand in 48 locations, resulting in total National General brand insurance premium impact of 12.8%•We expect to continue to pursue rate increases for both Allstate and National General brands into 2024 to improve auto insurance profitability•PIF decreased 2.9% or 751 thousand to 25,283 thousand as of December 31, 2023 compared to December 31, 2022•Renewal ratio decreased 1.6 points as of December 31, 2023 compared to December 31, 2022•Decreased new issued applications driven by the direct and exclusive agency channels, partially offset by growth in the independent agency channel•The impact of the ongoing rate increases, underwriting restrictions in markets with returns below target levels and temporary reductions in advertising have and may continue to have an adverse effect on the renewal ratio, premiums and future PIF growth Auto insurance premiums written increased 10.7% or $3.29 billion in 2023 compared to 2022, primarily due to the following factors:•Increased average premiums driven by 2022 and 2023 rate increases. In the year ended December 31, 2023: –Rate increases of 17.9% were taken for Allstate brand in 55 locations, resulting in total Allstate brand insurance premium impact of 16.4%–Rate increases of 18.8% were taken for National General brand in 48 locations, resulting in total National General brand insurance premium impact of 12.8%•We expect to continue to pursue rate increases for both Allstate and National General brands into 2024 to improve auto insurance profitability Auto insurance premiums written increased 10.7% or $3.29 billion in 2023 compared to 2022, primarily due to the following factors: •Increased average premiums driven by 2022 and 2023 rate increases. In the year ended December 31, 2023: –Rate increases of 17.9% were taken for Allstate brand in 55 locations, resulting in total Allstate brand insurance premium impact of 16.4% –Rate increases of 18.8% were taken for National General brand in 48 locations, resulting in total National General brand insurance premium impact of 12.8% •We expect to continue to pursue rate increases for both Allstate and National General brands into 2024 to improve auto insurance profitability •PIF decreased 2.9% or 751 thousand to 25,283 thousand as of December 31, 2023 compared to December 31, 2022•Renewal ratio decreased 1.6 points as of December 31, 2023 compared to December 31, 2022•Decreased new issued applications driven by the direct and exclusive agency channels, partially offset by growth in the independent agency channel•The impact of the ongoing rate increases, underwriting restrictions in markets with returns below target levels and temporary reductions in advertising have and may continue to have an adverse effect on the renewal ratio, premiums and future PIF growth •PIF decreased 2.9% or 751 thousand to 25,283 thousand as of December 31, 2023 compared to December 31, 2022 •Renewal ratio decreased 1.6 points as of December 31, 2023 compared to December 31, 2022 •Decreased new issued applications driven by the direct and exclusive agency channels, partially offset by growth in the independent agency channel •The impact of the ongoing rate increases, underwriting restrictions in markets with returns below target levels and temporary reductions in advertising have and may continue to have an adverse effect on the renewal ratio, premiums and future PIF growth Auto premium measures and statistics2023202220212023 vs. 20222022 vs. 2021New issued applications (thousands)Allstate Protection by brandAllstate brand2,915 3,644 3,616 (20.0)%0.8 %National General3,000 2,677 2,057 12.1 %30.1 %Total new issued applications5,915 6,321 5,673 (6.4)%11.4 %Allstate Protection by channelExclusive agency channel 2,294 2,401 2,387 (4.5)%0.6 %Direct channel1,632 2,202 1,773 (25.9)%24.2 %Independent agency channel1,989 1,718 1,513 15.8 %13.5 %Total new issued applications5,915 6,321 5,673 (6.4)%11.4 %Allstate brand average premium$757 $659 $605 14.9 %8.9 %Allstate brand renewal ratio (%) 85.4 87.0 87.0 (1.6)—", "prior_body": "Policies in force by brand and by line of businessAllstate brandNational GeneralAllstate ProtectionPIF (thousands)202220212020202220212020202220212020Auto21,658 21,972 21,809 4,376 3,944 451 26,034 25,916 22,260 Homeowners6,622 6,525 6,427 638 634 216 7,260 7,159 6,643 Other personal lines4,636 4,578 4,459 300 288 71 4,936 4,866 4,530 Commercial lines204 210 216 107 105 — 311 315 216 Total 33,120 33,285 32,911 5,421 4,971 738 38,541 38,256 33,649 Auto insurance premiums written increased 10.1% or $2.80 billion in 2022 compared to 2021, primarily due to the following factors: •Increase in average premiums driven by rate increases. In the twelve months ended, December 31, 2022, implemented rate increases of 19.8% were taken for Allstate brand in 54 locations, resulting in total Allstate brand insurance premium impact of 16.9%•Rate increases of 13.7% were taken for National General brand in 35 locations, resulting in total National General brand insurance premium impact of 10.0%, to improve underwriting results•Allstate expects to continue to pursue rate increases for both Allstate and National General brands into 2023 to improve auto insurance profitability•Renewal ratio for Allstate brand in 2022 was comparable to 2021 •PIF increased 0.5% or 118 thousand to 26,034 thousand as of December 31, 2022 compared to December 31, 2021 due to growth in National General•Increased new issued applications driven by direct channel, including the acquisition of SafeAuto, and growth in the independent agency channel•The impact of the ongoing rate actions and temporary reductions in advertising may have an adverse effect on the renewal ratio, new issued applications and future PIF growth •Increase in average premiums driven by rate increases. In the twelve months ended, December 31, 2022, implemented rate increases of 19.8% were taken for Allstate brand in 54 locations, resulting in total Allstate brand insurance premium impact of 16.9%•Rate increases of 13.7% were taken for National General brand in 35 locations, resulting in total National General brand insurance premium impact of 10.0%, to improve underwriting results•Allstate expects to continue to pursue rate increases for both Allstate and National General brands into 2023 to improve auto insurance profitability •Increase in average premiums driven by rate increases. In the twelve months ended, December 31, 2022, implemented rate increases of 19.8% were taken for Allstate brand in 54 locations, resulting in total Allstate brand insurance premium impact of 16.9% •Rate increases of 13.7% were taken for National General brand in 35 locations, resulting in total National General brand insurance premium impact of 10.0%, to improve underwriting results •Allstate expects to continue to pursue rate increases for both Allstate and National General brands into 2023 to improve auto insurance profitability •Renewal ratio for Allstate brand in 2022 was comparable to 2021 •PIF increased 0.5% or 118 thousand to 26,034 thousand as of December 31, 2022 compared to December 31, 2021 due to growth in National General•Increased new issued applications driven by direct channel, including the acquisition of SafeAuto, and growth in the independent agency channel•The impact of the ongoing rate actions and temporary reductions in advertising may have an adverse effect on the renewal ratio, new issued applications and future PIF growth •Renewal ratio for Allstate brand in 2022 was comparable to 2021 •PIF increased 0.5% or 118 thousand to 26,034 thousand as of December 31, 2022 compared to December 31, 2021 due to growth in National General •Increased new issued applications driven by direct channel, including the acquisition of SafeAuto, and growth in the independent agency channel •The impact of the ongoing rate actions and temporary reductions in advertising may have an adverse effect on the renewal ratio, new issued applications and future PIF growth Auto premium measures and statistics2022202120202022 vs. 20212021 vs. 2020New issued applications (thousands)Allstate Protection by brandAllstate brand3,644 3,616 3,467 0.8 %4.3 %National General2,677 2,057 60 30.1 %NMTotal new issued applications6,321 5,673 3,527 11.4 %60.8 %Allstate Protection by channelExclusive agency channel 2,401 2,387 2,502 0.6 %(4.6)%Direct channel2,202 1,773 846 24.2 %109.6 %Independent agency channel1,718 1,513 179 13.5 %NMTotal new issued applications6,321 5,673 3,527 11.4 %60.8 %Allstate brand average premium$659 $605 $617 8.9 %(1.9)%Allstate brand renewal ratio (%) 87.0 87.0 87.5 — (0.5)" }, { "status": "MODIFIED", "current_title": "Allstate Health and Benefits Segment", "prior_title": "Allstate Health and Benefits Segment", "similarity_score": 0.693, "confidence": "medium", "key_changes": [ "Reworded sentence: \"Allstate Health and Benefits offers employer voluntary benefits, group health and individual health products, including life, accident, critical illness, hospital indemnity, short-term disability and other health products.\"", "Reworded sentence: \"Effective January 1, 2023, we adopted the FASB guidance revising the accounting for certain long-duration insurance contracts in the Allstate Health and Benefits segment using the modified retrospective approach at the transition date of January 1, 2021.\"" ], "current_body": "Allstate Health and Benefits offers employer voluntary benefits, group health and individual health products, including life, accident, critical illness, hospital indemnity, short-term disability and other health products. In 2023, Allstate Health and Benefits represented 2.1% of total PIF. Our target customers are consumers with family and financial protection needs. For additional information on our strategy and outlook, see Part I, Item 1. Business - Strategy and Segment Information. Effective January 1, 2023, we adopted the FASB guidance revising the accounting for certain long-duration insurance contracts in the Allstate Health and Benefits segment using the modified retrospective approach at the transition date of January 1, 2021. See Note 2 of the consolidated financial statements for further information regarding the impact of the adopted accounting standard on our consolidated financial statements. Summarized financial informationFor the years ended December 31,($ in millions)202320222021RevenuesAccident and health insurance premiums and contract charges$1,846 $1,832 $1,834 Other revenue447 402 359 Net investment income82 69 74 Costs and expensesAccident, health and other policy benefits(1,071)(1,042)(1,060)Amortization of DAC(150)(136)(128)Operating costs and expenses(842)(814)(787)Restructuring and related charges(7)(2)(9)Income tax expense on operations(63)(64)(60)Adjusted net income$242 $245 $223 Benefit ratio (1)56.2 55.1 55.9 Employer voluntary benefits (2)3,590 3,783 3,804 Group health (3)136 119 122 Individual health (4)417 394 407 Policies in force as of December 31 (in thousands)4,143 4,296 4,333", "prior_body": "Allstate Health and Benefits offers employer voluntary benefits, group health and individual health products, including life, accident, critical illness, hospital, short-term disability and other health products. Allstate Health and Benefits results include National General’s accident and health business, starting in the first quarter of 2021. Results prior to 2021 reflect historical Allstate Benefits results only. In 2022, Allstate Health and Benefits represented 2.3% of total PIF. Our target customers are middle market consumers with family and financial protection needs. For additional information on our strategy and outlook, see Part I, Item 1. Business - Strategy and Segment Information. Summarized financial informationFor the years ended December 31,($ in millions)202220212020RevenuesAccident and health insurance premiums and contract charges$1,833 $1,821 $1,094 Other revenue402 359 — Net investment income69 74 78 Costs and expensesAccident, health and other policy benefits(1,061)(1,049)(549)Amortization of DAC(147)(144)(177)Operating costs and expenses(814)(787)(322)Restructuring and related charges(2)(9)(1)Income tax expense on operations(58)(57)(27)Adjusted net income$222 $208 $96 Benefit ratio (1)56.1 55.7 47.2 Employer voluntary benefits (2)3,783 3,804 3,950 Group health (3)119 122 — Individual health (4)394 407 — Policies in force as of December 31 (in thousands)4,296 4,333 3,950" }, { "status": "MODIFIED", "current_title": "Percentage to total", "prior_title": "Allstate Health and Benefits", "similarity_score": 0.69, "confidence": "medium", "key_changes": [ "Reworded sentence: \"(1)Balances reflect the elimination of related party investments between segments.\"", "Reworded sentence: \"Amortized cost, net for these securities was $44.06 billion, $1.85 billion, $1.91 billion, $1.83 billion and $49.65 billion for Property-Liability, Protection Services, Allstate Health and Benefits, Corporate and Other, and in total, respectively.\"", "Reworded sentence: \"The fair value of equity securities held as of December 31, 2023 was $167 million in excess of cost.\"", "Reworded sentence: \"Investments totaled $66.68 billion as of December 31, 2023, increasing from $61.83 billion as of December 31, 2022, primarily due to positive operating cash flows, higher fixed income valuations and to support higher reserves, partially offset by dividends paid to shareholders and common share repurchases.\"" ], "current_body": "(1)Balances reflect the elimination of related party investments between segments. (2)Fixed income securities are carried at fair value. Amortized cost, net for these securities was $44.06 billion, $1.85 billion, $1.91 billion, $1.83 billion and $49.65 billion for Property-Liability, Protection Services, Allstate Health and Benefits, Corporate and Other, and in total, respectively. (3)Equity securities are carried at fair value. The fair value of equity securities held as of December 31, 2023 was $167 million in excess of cost. These net gains were primarily concentrated in the technology and banking sectors. Equity securities include $1.02 billion of funds with underlying investments in fixed income securities as of December 31, 2023. (4)Short-term investments are carried at fair value. Investments totaled $66.68 billion as of December 31, 2023, increasing from $61.83 billion as of December 31, 2022, primarily due to positive operating cash flows, higher fixed income valuations and to support higher reserves, partially offset by dividends paid to shareholders and common share repurchases. 66 www.allstate.com 66 www.allstate.com 66 www.allstate.com 2023 Form 10-K Investments 2023 Form 10-K Investments Portfolio composition by investment strategyAs of December 31, 2023($ in millions)Market-basedPerformance-basedTotalFixed income securities$48,749 $116 $48,865 Equity securities1,768 643 2,411 Mortgage loans, net822 — 822 Limited partnership interests141 8,239 8,380 Short-term investments5,144 — 5,144 Other investments, net310 745 1,055 Total$56,934 $9,743 $66,677 Percent to total85.4 %14.6 %100.0 %Unrealized net capital gains and lossesFixed income securities$(784)$— $(784)Limited partnership interests— (4)(4)Short-term investments(1)— (1)Other investments(2)— (2)Total$(787)$(4)$(791)", "prior_body": "Corporate and Other Fixed income securities (2) Equity securities (3) Short-term investments (4) (1)Balances reflect the elimination of related party investments between segments. (2)Fixed income securities are carried at fair value. Amortized cost, net for these securities was $38.59 billion, $1.83 billion, $1.73 billion, $3.22 billion and $45.37 billion for Property-Liability, Protection Services, Allstate Health and Benefits, Corporate and Other, and in total, respectively. (3)Equity securities are carried at fair value. The fair value of equity securities, held as of December 31, 2022, was $314 million in excess of cost. These net gains were primarily concentrated in the consumer goods, technology and banking sectors. Equity securities include $983 million of funds with underlying investments in fixed income securities as of December 31, 2022. (4)Short-term investments are carried at fair value. 66 www.allstate.com 66 www.allstate.com 66 www.allstate.com Investments 2022 Form 10-K Investments 2022 Form 10-K Investments totaled $61.83 billion as of December 31, 2022, decreasing from $64.70 billion as of December 31, 2021, primarily due to lower fixed income and equity valuations, common share repurchases and dividends paid to shareholders, partially offset by positive operating cash flows. Portfolio composition by investment strategyAs of December 31, 2022($ in millions)Market-basedPerformance-basedTotalFixed income securities$42,390 $95 $42,485 Equity securities4,112 455 4,567 Mortgage loans, net762 — 762 Limited partnership interests483 7,631 8,114 Short-term investments4,173 — 4,173 Other investments, net825 903 1,728 Total$52,745 $9,084 $61,829 Percent to total85.3 %14.7 %100.0 %Unrealized net capital gains and lossesFixed income securities$(2,884)$(1)$(2,885)Limited partnership interests— 2 2 Short-term investments(1)— (1)Other investments(3)— (3)Total$(2,888)$1 $(2,887)" }, { "status": "MODIFIED", "current_title": "Summarized financial information", "prior_title": "Summarized financial information", "similarity_score": 0.687, "confidence": "medium", "key_changes": [ "Reworded sentence: \"Adjusted net income decreased 37.3% or $63 million in 2023 compared to 2022, due to an increase in state income taxes and deferred tax liabilities for Allstate Dealer Services, higher appliance and furniture claim severity at Allstate Protection Plans and lower third-party lead sales at Arity, partially offset by improved margins at Allstate Roadside and lower expenses at Allstate Identity Protection.Premiums written decreased 1.3% or $36 million in 2023 compared to 2022, primarily due to a decrease at Allstate Dealer Services and lower rescue volumes at Allstate Roadside, partially offset by international growth at Allstate Protection Plans.PIF increased 4.3% or 6 million in 2023 compared to 2022 due to an increase at Allstate Protection Plans.Other revenue decreased 8.1% or $28 million in 2023 compared to 2022, primarily due to reductions in third-party lead sales at Arity.Intersegment premiums and service fees decreased 7.4% to $138 million in 2023 compared to 2022, driven by decreased device sales for the Adjusted net income decreased 37.3% or $63 million in 2023 compared to 2022, due to an increase in state income taxes and deferred tax liabilities for Allstate Dealer Services, higher appliance and furniture claim severity at Allstate Protection Plans and lower third-party lead sales at Arity, partially offset by improved margins at Allstate Roadside and lower expenses at Allstate Identity Protection.Premiums written decreased 1.3% or $36 million in 2023 compared to 2022, primarily due to a decrease at Allstate Dealer Services and lower rescue volumes at Adjusted net income decreased 37.3% or $63 million in 2023 compared to 2022, due to an increase in state income taxes and deferred tax liabilities for Allstate Dealer Services, higher appliance and furniture claim severity at Allstate Protection Plans and lower third-party lead sales at Arity, partially offset by improved margins at Allstate Roadside and lower expenses at Allstate Identity Protection.\"" ], "current_body": "Intersegment insurance premiums and service fees (1) (1)Primarily related to Arity and Allstate Roadside and are eliminated in our consolidated financial statements. Adjusted net income decreased 37.3% or $63 million in 2023 compared to 2022, due to an increase in state income taxes and deferred tax liabilities for Allstate Dealer Services, higher appliance and furniture claim severity at Allstate Protection Plans and lower third-party lead sales at Arity, partially offset by improved margins at Allstate Roadside and lower expenses at Allstate Identity Protection.Premiums written decreased 1.3% or $36 million in 2023 compared to 2022, primarily due to a decrease at Allstate Dealer Services and lower rescue volumes at Allstate Roadside, partially offset by international growth at Allstate Protection Plans.PIF increased 4.3% or 6 million in 2023 compared to 2022 due to an increase at Allstate Protection Plans.Other revenue decreased 8.1% or $28 million in 2023 compared to 2022, primarily due to reductions in third-party lead sales at Arity.Intersegment premiums and service fees decreased 7.4% to $138 million in 2023 compared to 2022, driven by decreased device sales for the Adjusted net income decreased 37.3% or $63 million in 2023 compared to 2022, due to an increase in state income taxes and deferred tax liabilities for Allstate Dealer Services, higher appliance and furniture claim severity at Allstate Protection Plans and lower third-party lead sales at Arity, partially offset by improved margins at Allstate Roadside and lower expenses at Allstate Identity Protection.Premiums written decreased 1.3% or $36 million in 2023 compared to 2022, primarily due to a decrease at Allstate Dealer Services and lower rescue volumes at Adjusted net income decreased 37.3% or $63 million in 2023 compared to 2022, due to an increase in state income taxes and deferred tax liabilities for Allstate Dealer Services, higher appliance and furniture claim severity at Allstate Protection Plans and lower third-party lead sales at Arity, partially offset by improved margins at Allstate Roadside and lower expenses at Allstate Identity Protection. Premiums written decreased 1.3% or $36 million in 2023 compared to 2022, primarily due to a decrease at Allstate Dealer Services and lower rescue volumes at Allstate Roadside, partially offset by international growth at Allstate Protection Plans.PIF increased 4.3% or 6 million in 2023 compared to 2022 due to an increase at Allstate Protection Plans.Other revenue decreased 8.1% or $28 million in 2023 compared to 2022, primarily due to reductions in third-party lead sales at Arity.Intersegment premiums and service fees decreased 7.4% to $138 million in 2023 compared to 2022, driven by decreased device sales for the Allstate Roadside, partially offset by international growth at Allstate Protection Plans. PIF increased 4.3% or 6 million in 2023 compared to 2022 due to an increase at Allstate Protection Plans. Other revenue decreased 8.1% or $28 million in 2023 compared to 2022, primarily due to reductions in third-party lead sales at Arity. Intersegment premiums and service fees decreased 7.4% to $138 million in 2023 compared to 2022, driven by decreased device sales for the 54 www.allstate.com 54 www.allstate.com 54 www.allstate.com 2023 Form 10-K Protection Services 2023 Form 10-K Protection Services Drivewise® offering at Arity due to a shift from devices to a lower cost mobile phone program.Claims and claims expense increased 18.8% or $100 million in 2023 compared to 2022, primarily driven by higher levels of claims at Allstate Protection Plans driven by growth in the business and higher severity at both Allstate Protection Plans and Allstate Dealer Services, partially offset by lower frequency at Allstate Roadside.Amortization of DAC increased 14.0% or $130 million in 2023 compared to 2022, driven by revenue growth at both Allstate Protection Plans and Allstate Dealer Services.Operating costs and expenses increased 1.7% or $15 million in 2023 compared to 2022, primarily due to growth at Allstate Protection Plans, partially offset by lower expenses at Arity.Restructuring and related charges increased $4 million in 2023 compared to 2022, primarily due to restructuring charges at Allstate Roadside. Drivewise® offering at Arity due to a shift from devices to a lower cost mobile phone program.Claims and claims expense increased 18.8% or $100 million in 2023 compared to 2022, primarily driven by higher levels of claims at Allstate Protection Plans driven by growth in the business and higher severity at both Allstate Protection Plans and Allstate Dealer Services, partially offset by lower frequency at Allstate Roadside.Amortization of DAC increased 14.0% or $130 million in 2023 compared to 2022, driven by revenue growth at both Allstate Protection Plans and Allstate Dealer Services. Drivewise® offering at Arity due to a shift from devices to a lower cost mobile phone program. Claims and claims expense increased 18.8% or $100 million in 2023 compared to 2022, primarily driven by higher levels of claims at Allstate Protection Plans driven by growth in the business and higher severity at both Allstate Protection Plans and Allstate Dealer Services, partially offset by lower frequency at Allstate Roadside. Amortization of DAC increased 14.0% or $130 million in 2023 compared to 2022, driven by revenue growth at both Allstate Protection Plans and Allstate Dealer Services. Operating costs and expenses increased 1.7% or $15 million in 2023 compared to 2022, primarily due to growth at Allstate Protection Plans, partially offset by lower expenses at Arity.Restructuring and related charges increased $4 million in 2023 compared to 2022, primarily due to restructuring charges at Allstate Roadside. Operating costs and expenses increased 1.7% or $15 million in 2023 compared to 2022, primarily due to growth at Allstate Protection Plans, partially offset by lower expenses at Arity. Restructuring and related charges increased $4 million in 2023 compared to 2022, primarily due to restructuring charges at Allstate Roadside. The Allstate Corporation 55 The Allstate Corporation 55 The Allstate Corporation 55 2023 Form 10-K Property and Casualty Insurance Claims and Claims Expense Reserves 2023 Form 10-K Property and Casualty Insurance Claims and Claims Expense Reserves", "prior_body": "Intersegment insurance premiums and service fees (1) (1)Primarily related to Arity and Allstate Roadside and are eliminated in our consolidated financial statements. Adjusted net income decreased 5.6% or $10 million in 2022 compared to 2021, primarily driven by higher technology expenses at Allstate Identity Protection and lower revenue at Arity.Premiums written increased 2.2% or $57 million in 2022 compared to 2021, primarily due to international growth at Allstate Protection Plans, partially offset by a decrease in sales at Allstate Dealer Services.PIF decreased 1.4% or 2 million in 2022 compared to 2021 due to a decline in Allstate Protection Plans .Other revenue decreased 2.0% or $7 million in 2022 compared to 2021, primarily due to lower revenue at Arity, partially offset by growth at Allstate Identity Protection.Intersegment premiums and service fees decreased 14.9% to $149 million in 2022 compared to 2021, driven by decreased Arity device sales due to a Adjusted net income decreased 5.6% or $10 million in 2022 compared to 2021, primarily driven by higher technology expenses at Allstate Identity Protection and lower revenue at Arity.Premiums written increased 2.2% or $57 million in 2022 compared to 2021, primarily due to international growth at Allstate Protection Plans, partially offset by a decrease in sales at Allstate Dealer Services. Adjusted net income decreased 5.6% or $10 million in 2022 compared to 2021, primarily driven by higher technology expenses at Allstate Identity Protection and lower revenue at Arity. Premiums written increased 2.2% or $57 million in 2022 compared to 2021, primarily due to international growth at Allstate Protection Plans, partially offset by a decrease in sales at Allstate Dealer Services. PIF decreased 1.4% or 2 million in 2022 compared to 2021 due to a decline in Allstate Protection Plans .Other revenue decreased 2.0% or $7 million in 2022 compared to 2021, primarily due to lower revenue at Arity, partially offset by growth at Allstate Identity Protection.Intersegment premiums and service fees decreased 14.9% to $149 million in 2022 compared to 2021, driven by decreased Arity device sales due to a PIF decreased 1.4% or 2 million in 2022 compared to 2021 due to a decline in Allstate Protection Plans . Other revenue decreased 2.0% or $7 million in 2022 compared to 2021, primarily due to lower revenue at Arity, partially offset by growth at Allstate Identity Protection. Intersegment premiums and service fees decreased 14.9% to $149 million in 2022 compared to 2021, driven by decreased Arity device sales due to a The Allstate Corporation 53 The Allstate Corporation 53 The Allstate Corporation 53 2022 Form 10-K Protection Services 2022 Form 10-K Protection Services shift from devices to a mobile program for the Drivewise® offering.Claims and claims expense increased 16.2% or $74 million in 2022 compared to 2021, primarily due to higher levels of claims at Allstate Protection Plans driven by growth in the business and higher severity at both Allstate Protection Plans and Allstate Roadside.Amortization of DAC increased 16.7% or $133 million in 2022 compared to 2021, driven by business growth at Allstate Protection Plans and Allstate Dealer Services.Operating costs and expenses increased 4.4% or $37 million in 2022 compared to 2021, primarily due to investments in technology and geographic and product expansion at Allstate Protection Plans and investments in technology at Allstate Identity Protection, partially offset by lower expenses at Arity.Restructuring and related charges decreased $12 million in 2022 compared to 2021, primarily due to a facility closure at Allstate Identity Protection and accelerated lease costs at Allstate Protection Plans in 2021. shift from devices to a mobile program for the Drivewise® offering.Claims and claims expense increased 16.2% or $74 million in 2022 compared to 2021, primarily due to higher levels of claims at Allstate Protection Plans driven by growth in the business and higher severity at both Allstate Protection Plans and Allstate Roadside.Amortization of DAC increased 16.7% or $133 million in 2022 compared to 2021, driven by business growth at Allstate Protection Plans and Allstate Dealer Services. shift from devices to a mobile program for the Drivewise® offering. Claims and claims expense increased 16.2% or $74 million in 2022 compared to 2021, primarily due to higher levels of claims at Allstate Protection Plans driven by growth in the business and higher severity at both Allstate Protection Plans and Allstate Roadside. Amortization of DAC increased 16.7% or $133 million in 2022 compared to 2021, driven by business growth at Allstate Protection Plans and Allstate Dealer Services. Operating costs and expenses increased 4.4% or $37 million in 2022 compared to 2021, primarily due to investments in technology and geographic and product expansion at Allstate Protection Plans and investments in technology at Allstate Identity Protection, partially offset by lower expenses at Arity.Restructuring and related charges decreased $12 million in 2022 compared to 2021, primarily due to a facility closure at Allstate Identity Protection and accelerated lease costs at Allstate Protection Plans in 2021. Operating costs and expenses increased 4.4% or $37 million in 2022 compared to 2021, primarily due to investments in technology and geographic and product expansion at Allstate Protection Plans and investments in technology at Allstate Identity Protection, partially offset by lower expenses at Arity. Restructuring and related charges decreased $12 million in 2022 compared to 2021, primarily due to a facility closure at Allstate Identity Protection and accelerated lease costs at Allstate Protection Plans in 2021. 54 www.allstate.com 54 www.allstate.com 54 www.allstate.com Property and Casualty Insurance Claims and Claims Expense Reserves 2022 Form 10-K Property and Casualty Insurance Claims and Claims Expense Reserves 2022 Form 10-K" }, { "status": "MODIFIED", "current_title": "Protection Services Segment", "prior_title": "Protection Services Segment", "similarity_score": 0.672, "confidence": "medium", "key_changes": [ "Reworded sentence: \"In 2023, Protection Services represented 78.5% of total PIF and 5.0% of premiums written.\"", "Reworded sentence: \"Summarized financial informationFor the years ended December 31,($ in millions)202320222021Premiums written$2,663 $2,699 $2,642 RevenuesPremiums $2,243 $1,995 $1,764 Other revenue319 347 354 Intersegment insurance premiums and service fees (1)138 149 175 Net investment income73 48 43 Costs and expensesClaims and claims expense(632)(532)(458)Amortization of DAC(1,058)(928)(795)Operating costs and expenses(889)(874)(837)Restructuring and related charges(6)(2)(14)Income tax expense on operations(83)(35)(52)Less: noncontrolling interest(1)(1)1 Adjusted net income$106 $169 $179 Allstate Protection Plans $117 $150 $142 Allstate Dealer Services(15)35 34 Allstate Roadside24 7 7 Arity(18)(11)3 Allstate Identity Protection (2)(12)(7)Adjusted net income$106 $169 $179 Allstate Protection Plans145,292 138,726 141,073 Allstate Dealer Services3,776 3,865 3,956 Allstate Roadside553 531 525 Allstate Identity Protection2,884 3,112 2,802 Policies in force as of December 31 (in thousands)152,505 146,234 148,356\"" ], "current_body": "Protection Services comprise Allstate Protection Plans, Allstate Dealer Services, Allstate Roadside, Arity and Allstate Identity Protection. In 2023, Protection Services represented 78.5% of total PIF and 5.0% of premiums written. We offer consumer product protection plans, protection and insurance products (including vehicle service contracts, guaranteed asset protection, road hazard tire and wheel and paintless dent repair protection), roadside assistance, device and mobile data collection services and analytic solutions using automotive telematics information, identity theft protection and remediation services. For additional information on our strategy and outlook, see Part I, Item 1. Business - Strategy and Segment Information. Summarized financial informationFor the years ended December 31,($ in millions)202320222021Premiums written$2,663 $2,699 $2,642 RevenuesPremiums $2,243 $1,995 $1,764 Other revenue319 347 354 Intersegment insurance premiums and service fees (1)138 149 175 Net investment income73 48 43 Costs and expensesClaims and claims expense(632)(532)(458)Amortization of DAC(1,058)(928)(795)Operating costs and expenses(889)(874)(837)Restructuring and related charges(6)(2)(14)Income tax expense on operations(83)(35)(52)Less: noncontrolling interest(1)(1)1 Adjusted net income$106 $169 $179 Allstate Protection Plans $117 $150 $142 Allstate Dealer Services(15)35 34 Allstate Roadside24 7 7 Arity(18)(11)3 Allstate Identity Protection (2)(12)(7)Adjusted net income$106 $169 $179 Allstate Protection Plans145,292 138,726 141,073 Allstate Dealer Services3,776 3,865 3,956 Allstate Roadside553 531 525 Allstate Identity Protection2,884 3,112 2,802 Policies in force as of December 31 (in thousands)152,505 146,234 148,356", "prior_body": "Protection Services comprise Allstate Protection Plans, Allstate Dealer Services, Allstate Roadside, Arity and Allstate Identity Protection. Protection Services include National General’s LeadCloud and Transparent.ly’s results within Arity starting in the first quarter of 2021. These businesses provide marketing and integration platforms connecting data buyers and sellers. Results prior to 2021 reflect historical Arity results only. In 2022, Protection Services represented 77.3% of total PIF and 5.6% of premiums written. We offer consumer product protection plans, finance and insurance products (including vehicle service contracts, guaranteed asset protection waivers, road hazard tire and wheel and paintless dent repair protection), roadside assistance, device and mobile data collection services and analytic solutions using automotive telematics information and identity protection. For additional information on our strategy and outlook, see Part I, Item 1. Business - Strategy and Segment Information. Summarized financial informationFor the years ended December 31,($ in millions)202220212020Premiums written$2,699 $2,642 $1,890 RevenuesPremiums $1,995 $1,764 $1,493 Other revenue347 354 208 Intersegment insurance premiums and service fees (1)149 175 147 Net investment income48 43 44 Costs and expensesClaims and claims expense(532)(458)(386)Amortization of DAC(928)(795)(658)Operating costs and expenses(874)(837)(651)Restructuring and related charges(2)(14)(3)Income tax expense on operations(35)(52)(41)Less: noncontrolling interest(1)1 — Adjusted net income$169 $179 $153 Allstate Protection Plans $150 $142 $137 Allstate Dealer Services35 34 29 Allstate Roadside7 7 12 Arity(11)3 (11)Allstate Identity Protection (12)(7)(14)Adjusted net income$169 $179 $153 Allstate Protection Plans138,726 141,073 128,982 Allstate Dealer Services3,865 3,956 4,042 Allstate Roadside531 525 548 Allstate Identity Protection3,112 2,802 2,700 Policies in force as of December 31 (in thousands)146,234 148,356 136,272" }, { "status": "MODIFIED", "current_title": "Gross unrealized gains (losses) on fixed income securities by type and sector", "prior_title": "Unrealized net capital gains (losses)", "similarity_score": 0.658, "confidence": "medium", "key_changes": [ "Reworded sentence: \"Banking (1) (1) As of December 31, 2023, we have exposure of approximately $90 million to regional banks primarily through investment grade corporate bonds.\"" ], "current_body": "Banking (1) (1) As of December 31, 2023, we have exposure of approximately $90 million to regional banks primarily through investment grade corporate bonds. 70 www.allstate.com 70 www.allstate.com 70 www.allstate.com 2023 Form 10-K Investments 2023 Form 10-K Investments Gross unrealized gains (losses) on fixed income securities by type and sectorAs of December 31, 2022Amortized cost, netGross unrealizedFair value($ in millions)GainsLossesCorporateBanking $5,153 $16 $(314)$4,855 Basic industry1,019 2 (75)946 Capital goods2,288 3 (197)2,094 Communications2,422 1 (261)2,162 Consumer goods (cyclical and non-cyclical)5,984 6 (531)5,459 Financial services2,243 4 (176)2,071 Energy2,364 2 (156)2,210 Technology3,137 4 (298)2,843 Transportation959 1 (73)887 Utilities2,633 7 (203)2,437 Other360 — (61)299 Total corporate fixed income portfolio28,562 46 (2,345)26,263 U.S. government and agencies8,123 6 (231)7,898 Municipal6,500 36 (326)6,210 Foreign government997 — (40)957 ABS1,188 4 (35)1,157 Total fixed income securities$45,370 $92 $(2,977)$42,485", "prior_body": "Equity method of accounting (“EMA”) limited partnerships Gross unrealized gains (losses) on fixed income securities by type and sectorAs of December 31, 2022Amortized cost, netGross unrealizedFair value($ in millions)GainsLossesCorporateConsumer goods (cyclical and non-cyclical)$5,984 $6 $(531)$5,459 Banking5,153 16 (314)4,855 Utilities2,633 7 (203)2,437 Technology3,137 4 (298)2,843 Communications2,422 1 (261)2,162 Financial services2,243 4 (176)2,071 Capital goods2,288 3 (197)2,094 Basic industry1,019 2 (75)946 EnergyMidstream1,725 1 (110)1,616 Integrated67 — (4)63 Independent/upstream354 1 (29)326 Other218 — (13)205 Total energy2,364 2 (156)2,210 Transportation959 1 (73)887 Other360 — (61)299 Total corporate fixed income portfolio28,562 46 (2,345)26,263 U.S. government and agencies8,123 6 (231)7,898 Municipal6,500 36 (326)6,210 Foreign government997 — (40)957 ABS1,188 4 (35)1,157 Total fixed income securities$45,370 $92 $(2,977)$42,485" }, { "status": "MODIFIED", "current_title": "Fixed income securities", "prior_title": "Fixed income securities", "similarity_score": 0.651, "confidence": "medium", "key_changes": [ "Reworded sentence: \"Fixed income securities by typeFair value as of December 31,($ in millions)20232022U.S.\"" ], "current_body": "Fixed income securities by typeFair value as of December 31,($ in millions)20232022U.S. government and agencies$8,619 $7,898 Municipal6,006 6,210 Corporate31,205 26,263 Foreign government1,290 957 Asset-backed securities (“ABS”)1,745 1,157 Total fixed income securities$48,865 $42,485", "prior_body": "Fixed income securities by typeFair value as of December 31,($ in millions)20222021U.S. government and agencies$7,898 $6,273 Municipal6,210 6,393 Corporate26,263 27,330 Foreign government957 985 Asset-backed securities (“ABS”)1,157 1,155 Total fixed income securities$42,485 $42,136" }, { "status": "MODIFIED", "current_title": "Value at each year-end of $100 initial investment made on December 31, 2018", "prior_title": "Value at each year-end of $100 initial investment made on December 31, 2017", "similarity_score": 0.648, "confidence": "medium", "key_changes": [ "Reworded sentence: \"The Allstate Corporation 33 The Allstate Corporation 33 The Allstate Corporation 33 2023 Form 10-K 2023 Form 10-K Issuer Purchases of Equity Securities PeriodTotal number of shares(or units) purchased (1)Average pricepaid per share(or unit)Total number of shares (or units) purchased as part of publicly announced plans or programsMaximum number (or approximate dollar value) of shares (or units) that may yet be purchased under the plans or programs (2)October 1, 2023 - October 31, 2023 Open Market Purchases329 $112.37 — November 1, 2023 - November 30, 2023 Open Market Purchases125,437 $134.12 — December 1, 2023 - December 31, 2023 Open Market Purchases2,798 $138.37 — Total128,564 $134.15 — $472 million\"" ], "current_body": "The Allstate Corporation 33 The Allstate Corporation 33 The Allstate Corporation 33 2023 Form 10-K 2023 Form 10-K Issuer Purchases of Equity Securities PeriodTotal number of shares(or units) purchased (1)Average pricepaid per share(or unit)Total number of shares (or units) purchased as part of publicly announced plans or programsMaximum number (or approximate dollar value) of shares (or units) that may yet be purchased under the plans or programs (2)October 1, 2023 - October 31, 2023 Open Market Purchases329 $112.37 — November 1, 2023 - November 30, 2023 Open Market Purchases125,437 $134.12 — December 1, 2023 - December 31, 2023 Open Market Purchases2,798 $138.37 — Total128,564 $134.15 — $472 million", "prior_body": "32 www.allstate.com 32 www.allstate.com 32 www.allstate.com 2022 Form 10-K 2022 Form 10-K Issuer Purchases of Equity Securities PeriodTotal number of shares(or units) purchased (1)Average pricepaid per share(or unit)Total number of shares (or units) purchased as part of publicly announced plans or programs (2)Maximum number (or approximate dollar value) of shares (or units) that may yet be purchased under the plans or programs (3)October 1, 2022 - October 31, 2022 Open Market Purchases1,645,463 $128.65 1,644,936 November 1, 2022 - November 30, 2022 Open Market Purchases693,860 $128.40 692,907 December 1, 2022 - December 31, 2022 Open Market Purchases400,465 $132.26 399,500 Total2,739,788 $129.11 2,737,343 $802 million" }, { "status": "MODIFIED", "current_title": "prior year reserve reestimates", "prior_title": "prior year reserve reestimates (1)", "similarity_score": 0.647, "confidence": "medium", "key_changes": [ "Reworded sentence: \"Auto underwriting resultsFor the periods ended202320222021($ in millions, except ratios)Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Underwriting income (loss)$93 $(178)$(678)$(346)$(974)$(1,315)$(578)$(147)$(300)$(159)$394 $1,327 Loss ratio78.5 81.4 87.9 83.4 90.6 95.3 84.9 77.6 78.9 76.9 68.7 57.2 Effect of prior year non-catastrophe reserve reestimates1.7 0.3 1.4 (0.1)2.3 8.5 3.8 2.1 2.1 1.1 (0.4)(0.2)\"" ], "current_body": "Auto underwriting resultsFor the periods ended202320222021($ in millions, except ratios)Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Q2Q1Underwriting income (loss)$93 $(178)$(678)$(346)$(974)$(1,315)$(578)$(147)$(300)$(159)$394 $1,327 Loss ratio78.5 81.4 87.9 83.4 90.6 95.3 84.9 77.6 78.9 76.9 68.7 57.2 Effect of prior year non-catastrophe reserve reestimates1.7 0.3 1.4 (0.1)2.3 8.5 3.8 2.1 2.1 1.1 (0.4)(0.2)", "prior_body": "(1)2020 includes approximately $495 million of favorable reserve reestimates related to the PG&E Corporation and Southern California Edison subrogation settlements. Auto underwriting resultsFor the periods ended20222021($ in millions, except ratios)Q4Q3Q2Q1Q4Q3Q2Q1Underwriting income (loss)(974)(1,315)(578)(147)(300)(159)394 1,327 Loss ratio90.6 95.3 84.9 77.6 78.9 76.9 68.7 57.2 Effect of prior year non-catastrophe reserve reestimates2.3 8.5 3.8 2.1 2.1 1.1 (0.4)(0.2)" }, { "status": "MODIFIED", "current_title": "Investments Outlook", "prior_title": "Investments Outlook", "similarity_score": 0.641, "confidence": "medium", "key_changes": [ "Reworded sentence: \"We utilize our integrated enterprise risk and return management framework to determine the amount of investment risk we are willing to accept.\"" ], "current_body": "We plan to focus on the following priorities: •Enhance investment portfolio returns through use of a dynamic capital allocation framework and focus on tax efficiency. •Leverage our broad capabilities to manage the portfolio to earn higher risk-adjusted returns on capital. •Invest for the specific needs and characteristics of Allstate’s businesses, including its corresponding liability profile. We utilize our integrated enterprise risk and return management framework to determine the amount of investment risk we are willing to accept. After reducing interest rate risk by shortening the portfolio duration beginning in late 2021, during 2023 we extended the fixed income portfolio duration as the sustained higher market yields provide an opportunity to increase risk-adjusted returns. As recession risks remain elevated, we also retained defensive positioning to equity risk and credit risk in the portfolio through a reduced allocation to public equity, high yield bonds and bank loans. We expect to maintain performance-based investments in our portfolio, consistent with our strategy to have a greater proportion of return derived from idiosyncratic assets or operating performance.Contractual maturities and yields of fixed income securities for the next three yearsFixed income securities($ in millions)Carrying valueInvestment yield2024$3,374 3.0 %20256,288 3.5 20265,565 3.5 market yields provide an opportunity to increase risk-adjusted returns. As recession risks remain elevated, we also retained defensive positioning to equity risk and credit risk in the portfolio through a reduced allocation to public equity, high yield bonds and bank loans. We expect to maintain performance-based investments in our portfolio, consistent with our strategy to have a greater proportion of return derived from idiosyncratic assets or operating performance.", "prior_body": "We plan to focus on the following priorities: •Enhance investment portfolio returns through use of a dynamic capital allocation framework and focus on tax efficiency. •Leverage our broad capabilities to manage the portfolio to earn higher risk-adjusted returns on capital. •Invest for the specific needs and characteristics of Allstate’s businesses, including its corresponding liability profile. Through our integrated enterprise risk and return management framework, we concluded in late 2021 that due to increasing enterprise risks from elevated inflation, the amount of investment risk we were willing to accept had declined. As a result, we decreased the allocation of economic capital to the investment portfolio. This decision led to a reduction in interest rate risk by shortening the portfolio duration beginning in the fourth quarter of 2021, primarily through the sale of long corporate and municipal bonds and the use of derivatives. These proactive actions mitigated portfolio losses by approximately $2 billion in 2022. As recession risks increased during 2022, we also reduced the amount of equity risk and credit risk in the portfolio through a reduction in public equity, high yield bonds and bank loans. We expect to maintain performance-based investments in our portfolio, consistent with our strategy to have a greater proportion of return derived from idiosyncratic asset or operating performance. The portfolio remains defensively positioned to interest rate, equity and credit risk at year-end relative to our positioning prior to these risk-reducing actions.Contractual maturities and yields of fixed income securities for the next three yearsFixed income securities($ in millions)Carrying valueInvestment yield2023$2,836 2.9 %20247,504 2.9 20257,331 3.2 Through our integrated enterprise risk and return management framework, we concluded in late 2021 that due to increasing enterprise risks from elevated inflation, the amount of investment risk we were willing to accept had declined. As a result, we decreased the allocation of economic capital to the investment portfolio. This decision led to a reduction in interest rate risk by shortening the portfolio duration beginning in the fourth quarter of 2021, primarily through the sale of long corporate and municipal bonds and the use of derivatives. These proactive actions mitigated portfolio losses by approximately $2 billion in 2022. As recession risks increased during 2022, we also reduced the amount of equity risk and credit risk in the portfolio through a reduction in public equity, high yield bonds and bank loans. We expect to maintain performance-based investments in our portfolio, consistent with our strategy to have a greater proportion of return derived from idiosyncratic asset or operating performance. The portfolio remains defensively positioned to interest rate, equity and credit risk at year-end relative to our positioning prior to these risk-reducing actions." }, { "status": "MODIFIED", "current_title": "Change in underwriting results from 2021 to 2022", "prior_title": "Change in underwriting results from 2020 to 2021", "similarity_score": 0.63, "confidence": "medium", "key_changes": [ "Reworded sentence: \"The Allstate Corporation 43 The Allstate Corporation 43 The Allstate Corporation 43 2023 Form 10-K Allstate Protection 2023 Form 10-K Allstate Protection Underwriting income (loss) by brand and by line of businessFor the years ended December 31,Allstate Brand National GeneralAllstate Protection($ in millions)202320222021202320222021202320222021Auto (1)$(829)$(2,846)$1,208 $(280)$(168)$54 $(1,109)$(3,014)$1,262 Homeowners (2) (624)701 411 (179)(30)(98)(803)671 313 Other personal lines (3)(37)(85)216 (2)(3)17 (39)(88)233 Commercial lines(277)(478)(158)12 14 — (265)(464)(158)Other business lines (4)106 95 115 9 10 6 115 105 121 Answer Financial— — — — — — 11 8 14 Total$(1,661)$(2,613)$1,792 $(440)$(177)$(21)$(2,090)$(2,782)$1,785 Auto (1) Homeowners (2) Other personal lines (3) Other business lines (4) (1)2021 results include certain National General commercial lines insurance products.\"", "Reworded sentence: \"(3)Include renters, condominium, landlord and other personal lines products.\"", "Reworded sentence: \"In the first quarter of 2023, National General lender-placed products results were reclassified to other business lines.\"", "Reworded sentence: \"Premiums written by brand and line of businessFor the years ended December 31,Allstate BrandNational GeneralAllstate Protection ($ in millions)202320222021202320222021202320222021Auto$27,894 $25,946 $24,102 $6,064 $4,720 $3,763 $33,958 $30,666 $27,865 Homeowners11,018 9,936 8,717 1,566 1,273 1,365 12,584 11,209 10,082 Other personal lines 2,290 2,096 2,001 229 153 155 2,519 2,249 2,156 Commercial lines473 917 848 247 207 — 720 1,124 848 Other business lines — — — 566 539 407 566 539 407 Total premiums written$41,675 $38,895 $35,668 $8,672 $6,892 $5,690 $50,347 $45,787 $41,358\"" ], "current_body": "The Allstate Corporation 43 The Allstate Corporation 43 The Allstate Corporation 43 2023 Form 10-K Allstate Protection 2023 Form 10-K Allstate Protection Underwriting income (loss) by brand and by line of businessFor the years ended December 31,Allstate Brand National GeneralAllstate Protection($ in millions)202320222021202320222021202320222021Auto (1)$(829)$(2,846)$1,208 $(280)$(168)$54 $(1,109)$(3,014)$1,262 Homeowners (2) (624)701 411 (179)(30)(98)(803)671 313 Other personal lines (3)(37)(85)216 (2)(3)17 (39)(88)233 Commercial lines(277)(478)(158)12 14 — (265)(464)(158)Other business lines (4)106 95 115 9 10 6 115 105 121 Answer Financial— — — — — — 11 8 14 Total$(1,661)$(2,613)$1,792 $(440)$(177)$(21)$(2,090)$(2,782)$1,785 Auto (1) Homeowners (2) Other personal lines (3) Other business lines (4) (1)2021 results include certain National General commercial lines insurance products. (2)2021 results include National General packaged policies, which include auto, and commercial lines insurance products. (3)Include renters, condominium, landlord and other personal lines products. (4)Primarily represents revenue and direct operating expenses of Ivantage, distribution of non-proprietary life and annuity products and lender-placed products. Ivantage, a general agency for Allstate exclusive agents, provides agents a solution for their customers when coverage through Allstate brand underwritten products is not available. In the first quarter of 2023, National General lender-placed products results were reclassified to other business lines. Historical results have been updated to conform with this presentation. Premium measures and statistics include PIF, new issued applications, average premiums and renewal ratio to analyze our premium trends. Premiums written is the amount of premiums charged for policies issued during a fiscal period. Premiums are considered earned and are included in the financial results on a pro-rata basis over the policy period. The portion of premiums written applicable to the unexpired term of the policies is recorded as unearned premiums on our Consolidated Statements of Financial Position. Premiums written by brand and line of businessFor the years ended December 31,Allstate BrandNational GeneralAllstate Protection ($ in millions)202320222021202320222021202320222021Auto$27,894 $25,946 $24,102 $6,064 $4,720 $3,763 $33,958 $30,666 $27,865 Homeowners11,018 9,936 8,717 1,566 1,273 1,365 12,584 11,209 10,082 Other personal lines 2,290 2,096 2,001 229 153 155 2,519 2,249 2,156 Commercial lines473 917 848 247 207 — 720 1,124 848 Other business lines — — — 566 539 407 566 539 407 Total premiums written$41,675 $38,895 $35,668 $8,672 $6,892 $5,690 $50,347 $45,787 $41,358", "prior_body": "42 www.allstate.com 42 www.allstate.com 42 www.allstate.com Allstate Protection 2022 Form 10-K Allstate Protection 2022 Form 10-K Underwriting income (loss) by brand and by line of businessFor the years ended December 31,Allstate Brand National GeneralAllstate Protection($ in millions)202220212020202220212020202220212020Auto (1)$(2,846)$1,208 $3,404 $(168)$54 $40 $(3,014)$1,262 $3,444 Homeowners (2) (3)701 411 798 (20)(92)26 681 319 824 Other personal lines (4)(85)216 255 (3)17 9 (88)233 264 Commercial lines(478)(158)(36)14 — — (464)(158)(36)Other business lines (5)95 115 70 — — — 95 115 70 Answer Financial— — — — — — 8 14 3 Total$(2,613)$1,792 $4,491 $(177)$(21)$75 $(2,782)$1,785 $4,569 Auto (1) Homeowners (2) (3) Other personal lines (4) Other business lines (5) (1)2021 results include certain National General commercial lines insurance products. (2)2021 results include National General packaged policies, which include auto, and commercial lines insurance products. (3)Includes lender-placed property. (4)Other personal lines include renters, condominium, landlord and other personal lines products. (5)Other business lines primarily represents revenue and direct operating expenses of Ivantage and distribution of non-proprietary life and annuity products. Ivantage, a general agency for Allstate exclusive agents, provides agents a solution for their customers when coverage through Allstate brand underwritten products is not available. Underwriting loss was $2.78 billion in 2022 compared to underwriting income of $1.79 billion in 2021, primarily due to higher auto insurance losses and unfavorable reserve reestimates, both excluding catastrophes, partially offset by increased premiums earned. We are executing a comprehensive plan to improve auto insurance profitability, including broadly raising rates, reducing operating expenses and advertising, implementing underwriting restrictions in underperforming states and executing claims operating actions to manage loss costs. In 2023, Allstate brand will exit traditional commercial insurance in five states. Additionally, starting in the fourth quarter of 2022, coverage to transportation network companies will no longer be offered unless the contracts utilize telematics-based pricing. Premium measures and statistics include PIF, new issued applications, average premiums and renewal ratio to analyze our premium trends. Premiums written is the amount of premiums charged for policies issued during a fiscal period. Premiums are considered earned and are included in the financial results on a pro-rata basis over the policy period. The portion of premiums written applicable to the unexpired term of the policies is recorded as unearned premiums on our Consolidated Statements of Financial Position. Premiums written by brand and line of businessFor the years ended December 31,Allstate BrandNational GeneralAllstate Protection ($ in millions)202220212020202220212020202220212020Auto$25,946 $24,102 $24,103 $4,720 $3,763 $508 $30,666 $27,865 $24,611 Homeowners9,936 8,717 8,012 1,812 1,772 388 11,748 10,489 8,400 Other personal lines 2,096 2,001 1,889 153 155 76 2,249 2,156 1,965 Commercial lines917 848 792 207 — — 1,124 848 792 Total premiums written$38,895 $35,668 $34,796 $6,892 $5,690 $972 $45,787 $41,358 $35,768" }, { "status": "MODIFIED", "current_title": "Auto underwriting results", "prior_title": "Auto underwriting results", "similarity_score": 0.627, "confidence": "medium", "key_changes": [ "Reworded sentence: \"Frequency and severity are influenced by:•Supply chain disruptions and labor shortages•Mix of repairable losses and total losses•Value of total losses due to changes in used car prices•Changes in medical inflation and consumption•Number of claims with attorney representation•Labor and part costs•Changes in commuting activity•Driving behavior (e.g., speed, time of day) impacting severity and mix of claim types•Organizational and process changes impacting claim opening and closing practices and shifts in timing, if any, can impact comparisons to prior periods The quarterly auto loss ratio has been more variable due to these and additional factors discussed below.Auto loss ratio decreased 4.4 points in 2023 compared to 2022 driven by increased earned premium compared to the prior year.\"", "Reworded sentence: \"Homeowners loss ratio increased 14.3 points in 2023 compared to 2022, primarily due to higher catastrophe losses and severity, partially offset by increased premiums earned.Allstate brand homeowners frequency and severity statistics (excluding catastrophe losses)(% change year-over-year)For the year ended December 31, 2023Gross claim frequency(4.2)%Paid claim severity11.8 Gross claim frequency decreased in 2023 compared to 2022 primarily due to fire and water perils.\"" ], "current_body": "Frequency and severity are influenced by:•Supply chain disruptions and labor shortages•Mix of repairable losses and total losses•Value of total losses due to changes in used car prices•Changes in medical inflation and consumption•Number of claims with attorney representation•Labor and part costs•Changes in commuting activity•Driving behavior (e.g., speed, time of day) impacting severity and mix of claim types•Organizational and process changes impacting claim opening and closing practices and shifts in timing, if any, can impact comparisons to prior periods The quarterly auto loss ratio has been more variable due to these and additional factors discussed below.Auto loss ratio decreased 4.4 points in 2023 compared to 2022 driven by increased earned premium compared to the prior year. Estimated report year 2023 incurred claim severity for Allstate brand, excluding Esurance and Canada, had a weighted average increase of between 8% to 9% compared to report year 2022 for major coverages due to higher part costs and labor rates for repairable vehicles, a higher mix of total losses, higher costs for claims with attorney representation, higher medical consumption and inflation. Gross claim frequency increased relative to the prior year. We are enhancing our claims practices to manage loss costs by increasing resources and expanding re-inspections, accelerating resolution of bodily injury claims, and negotiating improved vendor services and parts agreements. Frequency and severity are influenced by:•Supply chain disruptions and labor shortages•Mix of repairable losses and total losses•Value of total losses due to changes in used car prices•Changes in medical inflation and consumption•Number of claims with attorney representation•Labor and part costs•Changes in commuting activity•Driving behavior (e.g., speed, time of day) impacting severity and mix of claim types•Organizational and process changes impacting claim opening and closing practices and shifts in timing, if any, can impact comparisons to prior periods Frequency and severity are influenced by: •Supply chain disruptions and labor shortages •Mix of repairable losses and total losses •Value of total losses due to changes in used car prices •Changes in medical inflation and consumption •Number of claims with attorney representation •Labor and part costs •Changes in commuting activity •Driving behavior (e.g., speed, time of day) impacting severity and mix of claim types •Organizational and process changes impacting claim opening and closing practices and shifts in timing, if any, can impact comparisons to prior periods The quarterly auto loss ratio has been more variable due to these and additional factors discussed below.Auto loss ratio decreased 4.4 points in 2023 compared to 2022 driven by increased earned premium compared to the prior year. Estimated report year 2023 incurred claim severity for Allstate brand, excluding Esurance and Canada, had a weighted average increase of between 8% to 9% compared to report year 2022 for major coverages due to higher part costs and labor rates for repairable vehicles, a higher mix of total losses, higher costs for claims with attorney representation, higher medical consumption and inflation. Gross claim frequency increased relative to the prior year. We are enhancing our claims practices to manage loss costs by increasing resources and expanding re-inspections, accelerating resolution of bodily injury claims, and negotiating improved vendor services and parts agreements. The quarterly auto loss ratio has been more variable due to these and additional factors discussed below. Auto loss ratio decreased 4.4 points in 2023 compared to 2022 driven by increased earned premium compared to the prior year. Estimated report year 2023 incurred claim severity for Allstate brand, excluding Esurance and Canada, had a weighted average increase of between 8% to 9% compared to report year 2022 for major coverages due to higher part costs and labor rates for repairable vehicles, a higher mix of total losses, higher costs for claims with attorney representation, higher medical consumption and inflation. Gross claim frequency increased relative to the prior year. We are enhancing our claims practices to manage loss costs by increasing resources and expanding re-inspections, accelerating resolution of bodily injury claims, and negotiating improved vendor services and parts agreements. The Allstate Corporation 47 The Allstate Corporation 47 The Allstate Corporation 47 2023 Form 10-K Allstate Protection 2023 Form 10-K Allstate Protection Homeowners loss ratio increased 14.3 points in 2023 compared to 2022, primarily due to higher catastrophe losses and severity, partially offset by increased premiums earned.Allstate brand homeowners frequency and severity statistics (excluding catastrophe losses)(% change year-over-year)For the year ended December 31, 2023Gross claim frequency(4.2)%Paid claim severity11.8 Gross claim frequency decreased in 2023 compared to 2022 primarily due to fire and water perils. Paid claim severity increased in 2023 compared to 2022 due to inflationary loss cost pressure driven by increases in labor and materials costs. Homeowner paid claim severity can be impacted by both the mix of perils and the magnitude of specific losses paid during the period.Other personal lines loss ratio increased 2.3 points in 2023 compared to 2022, primarily due to higher catastrophe losses and increased severity, partially offset by increased premiums earned.Commercial lines loss ratio decreased 14.9 points in 2023 compared to 2022 primarily due to the result of profitability actions taken and lower unfavorable reserve reestimates, partially offset by continued elevated frequency and severity.Other business lines loss ratio increased 8.9 points in 2023 compared to 2022 primarily due to higher non-catastrophe losses and unfavorable prior year reserve reestimates.Catastrophe losses increased 81.1% or $2.52 billion in 2023 compared to 2022 primarily related to an increased number of wind/hail events and larger losses per event.Reinsurance recoveries in 2021 related to the Nationwide Aggregate Reinsurance Program for aggregate catastrophe losses occurring between April 1, 2020 and December 31, 2020, which primarily impacted homeowners prior year reserve reestimates.We define a “catastrophe” as an event that produces pre-tax losses before reinsurance in excess of $1 million and involves multiple first party policyholders, or a winter weather event that produces a number of claims in excess of a preset, per-event threshold of average claims in a specific area, occurring within a certain amount of time following the event. Catastrophes are caused by various natural events including high winds, winter storms and freezes, tornadoes, hailstorms, wildfires, tropical storms, tsunamis, hurricanes, earthquakes and volcanoes. We are also exposed to man-made catastrophic events, such as certain types of terrorism, civil unrest, wildfires or industrial accidents. The nature and level of catastrophes in any period cannot be reliably predicted. Homeowners loss ratio increased 14.3 points in 2023 compared to 2022, primarily due to higher catastrophe losses and severity, partially offset by increased premiums earned.Allstate brand homeowners frequency and severity statistics (excluding catastrophe losses)(% change year-over-year)For the year ended December 31, 2023Gross claim frequency(4.2)%Paid claim severity11.8 Gross claim frequency decreased in 2023 compared to 2022 primarily due to fire and water perils. Paid claim severity increased in 2023 compared to 2022 due to inflationary loss cost pressure driven by increases in labor and materials costs. Homeowner paid claim severity can be impacted by both the mix of perils and the magnitude of specific losses paid during the period.Other personal lines loss ratio increased 2.3 points in 2023 compared to 2022, primarily due to higher catastrophe losses and increased severity, partially offset by increased premiums earned.Commercial lines loss ratio decreased 14.9 points in 2023 compared to 2022 primarily due to the result of profitability actions taken and lower unfavorable reserve reestimates, partially offset by continued elevated frequency and severity. Homeowners loss ratio increased 14.3 points in 2023 compared to 2022, primarily due to higher catastrophe losses and severity, partially offset by increased premiums earned.", "prior_body": "Frequency and severity statistics are provided to describe the trends in loss patterns and are influenced by: •Supply chain disruptions and labor shortages•Value of total losses due to higher used car prices•Labor and part cost increases•Changes in commuting activity•Driving behavior (e.g., speed, time of day) impacting severity and mix of claim types•Organizational and process changes impacting claim opening and closing practices and shifts in timing, if any, can impact comparisons to prior periods The quarterly auto loss ratio has been more variable over the last eight quarters due to these and additional factors discussed belowAuto loss ratio increased 16.7 points in 2022 compared to 2021, primarily due to:•Higher gross claim frequency in all coverages, as miles driven has rebounded toward pre-pandemic levels. While total frequency increased relative to the prior year, it remains below pre-pandemic levels•Increased severity for most coverages, driven by inflationary pressures in both physical damage and bodily injury claims. As loss cost pressure continued throughout 2022, our estimates of the year-to-date report year incurred claim severity variance to prior full year increased, partially reflecting higher losses from claims in prior quarters than initially expected•Unfavorable prior year reserve reestimates, excluding catastrophes, was $1.25 billion primarily in both bodily injury and physical damage coverages. Increases in injury coverages reflect recent data and updated assumptions related to severity with third-party bodily injury claims, increased claims with attorney representation, litigation costs and higher medical inflation. Increases in physical damage costs reflect the ongoing inflationary factors and supply chain shortages impacting used vehicle and parts prices and labor rates. Delays in the receipt of third-party carrier claims also contributed to the adverse development of claims reported in prior years. Late reported claim frequency attributable to prior accident years also impacted reserve reestimatesProperty damage gross claim frequency for Allstate brand increased 8.2% in 2022 compared to 2021 due to factors including:•Increases in miles driven compared to 2021•While gross claim frequency has rebounded from the low in 2020, it is 13.2% below pre-pandemic levels of 2019Collision gross claim frequency for Allstate brand increased 5.0% in 2022 compared to 2021. While gross claim frequency has rebounded from the low in 2020, it is 9.2% below pre-pandemic levels of 2019.Property damage estimated report year 2022 incurred claim severity for Allstate brand, excluding Esurance and Canada, increased approximately 21% compared to report year 2021.Collision estimated report year 2022 incurred claim severity for Allstate brand, excluding Esurance and Canada, increased approximately 17% compared to report year 2021.The increase in estimated report year 2022 incurred claim severity for both coverages is due to rising inflationary factors and supply chain shortages impacting both repairable vehicles and total losses, including higher used car values, replacement part costs and labor rates and length of time to claim resolution.Bodily injury estimated report year 2022 incurred claim severity for Allstate brand, excluding Esurance and Canada, increased approximately 14% compared to Frequency and severity statistics are provided to describe the trends in loss patterns and are influenced by: •Supply chain disruptions and labor shortages•Value of total losses due to higher used car prices•Labor and part cost increases•Changes in commuting activity•Driving behavior (e.g., speed, time of day) impacting severity and mix of claim types•Organizational and process changes impacting claim opening and closing practices and shifts in timing, if any, can impact comparisons to prior periods The quarterly auto loss ratio has been more variable over the last eight quarters due to these and additional factors discussed belowAuto loss ratio increased 16.7 points in 2022 compared to 2021, primarily due to:•Higher gross claim frequency in all coverages, as miles driven has rebounded toward pre-pandemic levels. While total frequency increased relative to the prior year, it remains below pre-pandemic levels•Increased severity for most coverages, driven by inflationary pressures in both physical damage and bodily injury claims. As loss cost pressure continued throughout 2022, our estimates of the year-to-date report year incurred claim severity variance to prior full year increased, partially reflecting higher losses from claims in prior quarters than initially expected•Unfavorable prior year reserve reestimates, excluding catastrophes, was $1.25 billion primarily in both bodily injury and physical damage coverages. Increases in injury coverages reflect recent data and updated assumptions related to severity with third-party bodily injury claims, increased claims with attorney representation, litigation costs and higher medical inflation. Increases in physical damage Frequency and severity statistics are provided to describe the trends in loss patterns and are influenced by: •Supply chain disruptions and labor shortages •Value of total losses due to higher used car prices •Labor and part cost increases •Changes in commuting activity •Driving behavior (e.g., speed, time of day) impacting severity and mix of claim types •Organizational and process changes impacting claim opening and closing practices and shifts in timing, if any, can impact comparisons to prior periods The quarterly auto loss ratio has been more variable over the last eight quarters due to these and additional factors discussed below Auto loss ratio increased 16.7 points in 2022 compared to 2021, primarily due to: •Higher gross claim frequency in all coverages, as miles driven has rebounded toward pre-pandemic levels. While total frequency increased relative to the prior year, it remains below pre-pandemic levels •Increased severity for most coverages, driven by inflationary pressures in both physical damage and bodily injury claims. As loss cost pressure continued throughout 2022, our estimates of the year-to-date report year incurred claim severity variance to prior full year increased, partially reflecting higher losses from claims in prior quarters than initially expected •Unfavorable prior year reserve reestimates, excluding catastrophes, was $1.25 billion primarily in both bodily injury and physical damage coverages. Increases in injury coverages reflect recent data and updated assumptions related to severity with third-party bodily injury claims, increased claims with attorney representation, litigation costs and higher medical inflation. Increases in physical damage costs reflect the ongoing inflationary factors and supply chain shortages impacting used vehicle and parts prices and labor rates. Delays in the receipt of third-party carrier claims also contributed to the adverse development of claims reported in prior years. Late reported claim frequency attributable to prior accident years also impacted reserve reestimatesProperty damage gross claim frequency for Allstate brand increased 8.2% in 2022 compared to 2021 due to factors including:•Increases in miles driven compared to 2021•While gross claim frequency has rebounded from the low in 2020, it is 13.2% below pre-pandemic levels of 2019Collision gross claim frequency for Allstate brand increased 5.0% in 2022 compared to 2021. While gross claim frequency has rebounded from the low in 2020, it is 9.2% below pre-pandemic levels of 2019.Property damage estimated report year 2022 incurred claim severity for Allstate brand, excluding Esurance and Canada, increased approximately 21% compared to report year 2021.Collision estimated report year 2022 incurred claim severity for Allstate brand, excluding Esurance and Canada, increased approximately 17% compared to report year 2021.The increase in estimated report year 2022 incurred claim severity for both coverages is due to rising inflationary factors and supply chain shortages impacting both repairable vehicles and total losses, including higher used car values, replacement part costs and labor rates and length of time to claim resolution.Bodily injury estimated report year 2022 incurred claim severity for Allstate brand, excluding Esurance and Canada, increased approximately 14% compared to costs reflect the ongoing inflationary factors and supply chain shortages impacting used vehicle and parts prices and labor rates. Delays in the receipt of third-party carrier claims also contributed to the adverse development of claims reported in prior years. Late reported claim frequency attributable to prior accident years also impacted reserve reestimates Property damage gross claim frequency for Allstate brand increased 8.2% in 2022 compared to 2021 due to factors including: •Increases in miles driven compared to 2021 •While gross claim frequency has rebounded from the low in 2020, it is 13.2% below pre-pandemic levels of 2019 Collision gross claim frequency for Allstate brand increased 5.0% in 2022 compared to 2021. While gross claim frequency has rebounded from the low in 2020, it is 9.2% below pre-pandemic levels of 2019. Property damage estimated report year 2022 incurred claim severity for Allstate brand, excluding Esurance and Canada, increased approximately 21% compared to report year 2021. Collision estimated report year 2022 incurred claim severity for Allstate brand, excluding Esurance and Canada, increased approximately 17% compared to report year 2021. The increase in estimated report year 2022 incurred claim severity for both coverages is due to rising inflationary factors and supply chain shortages impacting both repairable vehicles and total losses, including higher used car values, replacement part costs and labor rates and length of time to claim resolution. Bodily injury estimated report year 2022 incurred claim severity for Allstate brand, excluding Esurance and Canada, increased approximately 14% compared to 46 www.allstate.com 46 www.allstate.com 46 www.allstate.com Allstate Protection 2022 Form 10-K Allstate Protection 2022 Form 10-K report year 2021. The increase is due to recent data and updated assumptions related to more severe accidents, increased claims with attorney representation, litigation costs, higher medical consumption and inflation.Homeowners loss ratio decreased 2.6 points in 2022 compared to 2021, primarily due to lower catastrophe losses and increased premiums earned, partially offset by higher severity.Allstate brand homeowners frequency and severity statistics (excluding catastrophe losses)(% change year-over-year)For the year ended December 31, 2022Gross claim frequency(2.9)%Paid claim severity21.6 Gross claim frequency decreased in 2022 compared to 2021 primarily due to a decline in the wind/hail and water perils. Paid claim severity increased in 2022 compared to 2021 due to inflationary loss cost pressure driven by increases in labor and materials costs and time to repair. Homeowner paid claim severity can be impacted by both the mix of perils and the magnitude of specific losses paid during the quarter.Other personal lines loss ratio increased 16.8 points in 2022 compared to 2021, primarily due to higher losses, excluding catastrophes, partially offset by increased premiums earned.Commercial lines loss ratio increased 23.2 points in 2022 compared to 2021 due to higher unfavorable prior year reserve reestimates, excluding catastrophes, primarily in bodily injury coverage for both shared economy and traditional segments with a large portion of the traditional segment increase related to states we are exiting, and higher auto severity, partially offset by increased premiums earned.Catastrophe losses decreased 6.8% or $227 million in 2022 compared to 2021. Catastrophe losses in 2022 included gross losses of $1.13 billion and net losses of $843 million related to Hurricane Ian and Winter Storm Elliott. Approximately 75% of Hurricane Ian net estimated losses relate to auto coverages. Auto policyholders generally have coverage for physical damage due to flood if they have purchased optional auto comprehensive coverage. Homeowners policies specifically exclude coverage for losses caused by flood.Reinsurance recoveries in 2021 related to the Nationwide Aggregate Reinsurance Program for aggregate catastrophe losses occurring between April 1, 2020 and December 31, 2020, which primarily impacted homeowners prior year reserve reestimates.We define a “catastrophe” as an event that produces pre-tax losses before reinsurance in excess of $1 million and involves multiple first party policyholders, or a winter weather event that produces a number of claims in excess of a preset, per-event threshold of average claims in a specific area, occurring within a certain amount of time following the event. Catastrophes are caused by various natural events including high winds, winter storms and freezes, tornadoes, hailstorms, wildfires, tropical storms, tsunamis, hurricanes, earthquakes and volcanoes. We are also exposed to man-made catastrophic events, such as certain types of terrorism, civil unrest, wildfires or industrial accidents. The nature and level of catastrophes in any period cannot be reliably predicted. report year 2021. The increase is due to recent data and updated assumptions related to more severe accidents, increased claims with attorney representation, litigation costs, higher medical consumption and inflation.Homeowners loss ratio decreased 2.6 points in 2022 compared to 2021, primarily due to lower catastrophe losses and increased premiums earned, partially offset by higher severity.Allstate brand homeowners frequency and severity statistics (excluding catastrophe losses)(% change year-over-year)For the year ended December 31, 2022Gross claim frequency(2.9)%Paid claim severity21.6 Gross claim frequency decreased in 2022 compared to 2021 primarily due to a decline in the wind/hail and water perils. Paid claim severity increased in 2022 compared to 2021 due to inflationary loss cost pressure driven by increases in labor and materials costs and time to repair. Homeowner paid claim severity can be impacted by both the mix of perils and the magnitude of specific losses paid during the quarter.Other personal lines loss ratio increased 16.8 points in 2022 compared to 2021, primarily due to higher losses, excluding catastrophes, partially offset by increased premiums earned.Commercial lines loss ratio increased 23.2 points in 2022 compared to 2021 due to higher unfavorable prior year reserve reestimates, excluding catastrophes, primarily in bodily injury coverage for both shared economy and traditional segments with a large portion of the traditional segment increase related to states report year 2021. The increase is due to recent data and updated assumptions related to more severe accidents, increased claims with attorney representation, litigation costs, higher medical consumption and inflation. Homeowners loss ratio decreased 2.6 points in 2022 compared to 2021, primarily due to lower catastrophe losses and increased premiums earned, partially offset by higher severity." }, { "status": "MODIFIED", "current_title": "Premiums written by brand and line of business", "prior_title": "Premiums written by brand and line of business", "similarity_score": 0.625, "confidence": "medium", "key_changes": [ "Reworded sentence: \"Premiums earned by brand and line of businessFor the years ended December 31,Allstate BrandNational GeneralAllstate Protection ($ in millions)202320222021202320222021202320222021Auto$27,384 $25,286 $24,088 $5,556 $4,429 $3,535 $32,940 $29,715 $27,623 Homeowners10,333 9,249 8,272 1,406 1,169 1,280 11,739 10,418 9,552 Other personal lines2,179 2,016 1,925 208 143 152 2,387 2,159 2,077 Commercial lines593 919 827 218 204 — 811 1,123 827 Other business lines— — — 550 494 375 550 494 375 Total premiums earned$40,489 $37,470 $35,112 $7,938 $6,439 $5,342 $48,427 $43,909 $40,454\"" ], "current_body": "Premiums earned by brand and line of businessFor the years ended December 31,Allstate BrandNational GeneralAllstate Protection ($ in millions)202320222021202320222021202320222021Auto$27,384 $25,286 $24,088 $5,556 $4,429 $3,535 $32,940 $29,715 $27,623 Homeowners10,333 9,249 8,272 1,406 1,169 1,280 11,739 10,418 9,552 Other personal lines2,179 2,016 1,925 208 143 152 2,387 2,159 2,077 Commercial lines593 919 827 218 204 — 811 1,123 827 Other business lines— — — 550 494 375 550 494 375 Total premiums earned$40,489 $37,470 $35,112 $7,938 $6,439 $5,342 $48,427 $43,909 $40,454", "prior_body": "Premiums earned by brand and line of businessFor the years ended December 31,Allstate BrandNational GeneralAllstate Protection ($ in millions)202220212020202220212020202220212020Auto$25,286 $24,088 $24,115 $4,429 $3,535 $525 $29,715 $27,623 $24,640 Homeowners9,249 8,272 7,858 1,663 1,655 396 10,912 9,927 8,254 Other personal lines2,016 1,925 1,841 143 152 78 2,159 2,077 1,919 Commercial lines919 827 767 204 — — 1,123 827 767 Total premiums earned$37,470 $35,112 $34,581 $6,439 $5,342 $999 $43,909 $40,454 $35,580" }, { "status": "MODIFIED", "current_title": "Macroeconomic Impacts", "prior_title": "Macroeconomic Impacts", "similarity_score": 0.608, "confidence": "medium", "key_changes": [ "Reworded sentence: \"Macroeconomic factors have and may continue to impact the results of our operations, financial condition and liquidity, such as U.S.\"", "Reworded sentence: \"2023 Operating Priorities and ResultsAllstate continued to focus on its operating priorities while executing a comprehensive plan to improve auto insurance profitability.\"" ], "current_body": "Macroeconomic factors have and may continue to impact the results of our operations, financial condition and liquidity, such as U.S. government fiscal and monetary policies, banking system instability, the Russia/Ukraine and Israel/Hamas conflicts and the remaining impacts of the Novel Coronavirus Pandemic or COVID-19 (“Coronavirus”), such as supply chain disruptions, labor shortages and other macroeconomic factors that have increased inflation. Inflation continues to remain elevated, which led to increases in interest rates by the Federal Reserve and many foreign governmental authorities and central banks. These actions could create significant economic uncertainty. Market volatility resulting from these factors and from disruptions in the banking industry have and may continue to impact our investment valuations and returns. These factors have affected our operations and may continue to significantly affect our results of operations, financial condition and liquidity and should be considered when comparing the current period to prior periods. Macroeconomic impacts are disclosed in Part 1 “Item 1A. Risk Factors’’, including the risk factors titled “A large-scale pandemic, the occurrence of terrorism, military actions, social unrest or other actions may have an adverse effect on our business” and “Conditions in the global economy and capital markets could adversely affect our business and results of operations”. This is not inclusive of all potential impacts and should not be treated as such. Within the MD&A, we have included further disclosures related to macroeconomic impacts on our 2023 results.Israel/Hamas ConflictAs of December 31, 2023, we have approximately $47 million investment exposure in the Middle East, of which approximately $43 million is held in Israel, which is primarily indirect exposure through funds managed by external asset managers. Russia/Ukraine ConflictThe Russia-Ukraine war and related sanctions imposed as a result of this conflict have increased global economic and political uncertainty, including inflationary pressures and an increased risk of cybersecurity incidents. Allstate does not have operations or direct investments in Russia, Belarus or Ukraine, but we could experience significant indirect impacts on the investment portfolio, financial position, or results of operations. 2023 Operating Priorities and ResultsAllstate continued to focus on its operating priorities while executing a comprehensive plan to improve auto insurance profitability. The table below summarizes the results of our 2023 Operating Priorities. of operations”. This is not inclusive of all potential impacts and should not be treated as such. Within the MD&A, we have included further disclosures related to macroeconomic impacts on our 2023 results.", "prior_body": "The Novel Coronavirus Pandemic or COVID-19 (“Coronavirus”) resulted in governments worldwide enacting emergency measures to combat the spread of the virus, including travel restrictions, government-imposed shelter-in-place orders, quarantine periods, social distancing, and restrictions on large gatherings. These measures have moderated significantly, but new variants of the Coronavirus could result in further economic volatility. We continue to closely monitor and proactively adapt to developments and changing conditions. Currently, it is not possible to reliably estimate the continuing impact to operations, but the effects have been and could be material. Certain growth and profitability comparisons to the prior year were impacted, in part, by the effects the Coronavirus had on prior year results. Beginning in March 2020, when shelter-in-place orders and other restrictions were initiated, and throughout 2021, we experienced lower auto accident claim frequency and different claim patterns than historically experienced. Total auto claim frequency has since increased, but remains below pre-pandemic levels.The Coronavirus has affected operations and may continue to significantly affect results of operations, financial condition and liquidity. The impact from the pandemic should be considered when comparing the current year to the prior years, including:•Sales of new and retention of existing policies•Rate changes and average gross premiums•Supply chain disruptions and labor shortages impacts on the cost of settling claims•Premium for transportation network products•Driving behavior and auto accident frequency•Hospital and outpatient claim costs•Investment valuations and returns•Bad debt and credit allowance exposure•Consumer utilization of Milewise®, our pay-per-mile insurance product •Retail sales in Allstate Protection PlansA pandemic such as the Coronavirus and its impacts are disclosed in Part 1 “Item 1A. Risk Factors’’, including the risk factors titled “A large-scale pandemic, the occurrence of terrorism, military actions, social unrest or other actions may have an adverse effect on our business” and “Conditions in the global economy and capital markets could continue to adversely affect our business and results of operations”. Supply chain disruptions, labor shortages and other macroeconomic factors have increased inflation, which may have an adverse impact on investment valuations and returns. As inflation continued to remain elevated, the Federal Reserve significantly increased interest rates and credit spreads widened reflecting ongoing recession concerns. These factors along with other ongoing impacts from the pandemic create significant economic uncertainty and the resulting market volatility may continue to impact our investment valuations and returns.This list is not inclusive of all potential impacts and should not be treated as such. Within the MD&A we have included further disclosures related to macroeconomic impacts on our 2022 results.Russia/Ukraine ConflictThe Russia-Ukraine war and related sanctions imposed as a result of this conflict have increased global economic and political uncertainty, including inflationary pressures and an increased risk of cybersecurity incidents. Allstate does not have operations or direct investments in Russia, Belarus or Ukraine, but we could experience significant indirect impacts on the investment portfolio, financial position, or results of operations. Coronavirus had on prior year results. Beginning in March 2020, when shelter-in-place orders and other restrictions were initiated, and throughout 2021, we experienced lower auto accident claim frequency and different claim patterns than historically experienced. Total auto claim frequency has since increased, but remains below pre-pandemic levels. The Coronavirus has affected operations and may continue to significantly affect results of operations, financial condition and liquidity. The impact from the pandemic should be considered when comparing the current year to the prior years, including: •Sales of new and retention of existing policies •Rate changes and average gross premiums •Supply chain disruptions and labor shortages impacts on the cost of settling claims •Premium for transportation network products •Driving behavior and auto accident frequency •Hospital and outpatient claim costs •Investment valuations and returns •Bad debt and credit allowance exposure •Consumer utilization of Milewise®, our pay-per-mile insurance product •Retail sales in Allstate Protection Plans A pandemic such as the Coronavirus and its impacts are disclosed in Part 1 “Item 1A. Risk Factors’’, including the risk factors titled “A large-scale pandemic, the occurrence of terrorism, military actions, social unrest or other actions may have an adverse effect on our business” and “Conditions in the global economy and capital markets could continue to adversely affect our business and results of operations”. Supply chain disruptions, labor shortages and other macroeconomic factors have increased inflation, which may have an adverse impact on investment valuations and returns. As inflation continued to remain elevated, the Federal Reserve significantly increased interest rates and credit spreads widened reflecting ongoing recession concerns. These factors along with other ongoing impacts from the pandemic create significant economic uncertainty and the resulting market volatility may continue to impact our investment valuations and returns. This list is not inclusive of all potential impacts and should not be treated as such. Within the MD&A we have included further disclosures related to macroeconomic impacts on our 2022 results." }, { "status": "MODIFIED", "current_title": "2022 vs 2021", "prior_title": "2021 vs 2020", "similarity_score": 0.593, "confidence": "low", "key_changes": [ "Reworded sentence: \"DAC balance as of December 31 by product type($ in millions)20232022Auto$1,207 $1,089 Homeowners890 788 Other personal lines177 164 Commercial lines42 54 Other business lines63 51 Total DAC$2,379 $2,146\"" ], "current_body": "Restructuring and related charges Shelter-in-Place Payback expense Deferred acquisition costs We establish a DAC asset for costs that are related directly to the acquisition of new or renewal insurance policies, principally agent remuneration and premium taxes. DAC is amortized to income over the period in which premiums are earned. DAC balance as of December 31 by product type($ in millions)20232022Auto$1,207 $1,089 Homeowners890 788 Other personal lines177 164 Commercial lines42 54 Other business lines63 51 Total DAC$2,379 $2,146", "prior_body": "Restructuring and related charges Shelter-in-Place Payback expense Deferred acquisition costs We establish a DAC asset for costs that are related directly to the acquisition of new or renewal insurance policies, principally agent remuneration and premium taxes. DAC is amortized to income over the period in which premiums are earned. DAC balance as of December 31 by product type ($ in millions)20222021Auto$1,114 $1,023 Homeowners786 700 Other personal lines184 169 Commercial lines62 59 Total DAC$2,146 $1,951" }, { "status": "MODIFIED", "current_title": "Operating costs and expenses", "prior_title": "Operating costs and expenses", "similarity_score": 0.575, "confidence": "low", "key_changes": [ "Reworded sentence: \"Operating costs and expenses increased $28 million in 2023 compared to 2022, primarily due to growth in group health and investments in the employer voluntary benefits business.\"" ], "current_body": "Operating costs and expenses increased $28 million in 2023 compared to 2022, primarily due to growth in group health and investments in the employer voluntary benefits business.", "prior_body": "Operating costs and expenses increased $27 million in 2022 compared to 2021, primarily due to higher professional services and employee related expenses. The Allstate Corporation 63 The Allstate Corporation 63 The Allstate Corporation 63 2022 Form 10-K Allstate Health and Benefits 2022 Form 10-K Allstate Health and Benefits" }, { "status": "MODIFIED", "current_title": "Segment Highlights", "prior_title": "Segment Highlights", "similarity_score": 0.564, "confidence": "low", "key_changes": [ "Reworded sentence: \"Allstate Protection underwriting loss was $2.09 billion in 2023 compared to underwriting loss of $2.78 billion in 2022, due to increased premiums earned and lower unfavorable non-catastrophe reserve reestimates, partially offset by higher incurred losses and higher catastrophe losses of $5.64 billion in 2023 compared to $3.11 billion in 2022.\"" ], "current_body": "Allstate Protection underwriting loss was $2.09 billion in 2023 compared to underwriting loss of $2.78 billion in 2022, due to increased premiums earned and lower unfavorable non-catastrophe reserve reestimates, partially offset by higher incurred losses and higher catastrophe losses of $5.64 billion in 2023 compared to $3.11 billion in 2022. Premiums written increased 10.0% to $50.35 billion in 2023 compared to $45.79 billion in 2022, reflecting higher premiums in both Allstate and National General brands. Protection Services adjusted net income was $106 million in 2023 compared to $169 million in 2022. The decrease in 2023 was due to higher appliance and furniture claim severity at Allstate Protection Plans and lower third-party lead sales at Arity, partially offset by improved margins at Allstate Roadside and lower expenses at Allstate Identity Protection. Adjusted net income was also impacted by an increase in state income taxes and deferred tax liabilities for Allstate Dealer Services. Premiums and other revenues increased 9.4% or $220 million to $2.56 billion in 2023 from $2.34 billion in 2022 primarily due to Allstate Protection Plans. Allstate Health and Benefits adjusted net income was $242 million in 2023 compared to $245 million in 2022. The decrease was primarily due to a decline in employer voluntary benefits, partially offset by increases in individual and group health.Premiums and contract charges totaled $1.85 billion in 2023, an increase of 0.8% from $1.83 billion in 2022 primarily due to growth in group health, partially offset by a decline in employer voluntary benefits and individual health.Income TaxesThe effective tax rate is the ratio of income tax (benefit) expense divided by (loss) income from operations before income tax expense. The effective tax rate for 2023 was 38.8% compared to 26.7% in 2022 due to the total income tax benefit measured against a lower loss from operations before income tax expense of $348 million in 2023 compared to a loss of $1.83 billion in 2022. In both years, the effective tax rate was higher than the 21% federal statutory income tax rate, primarily due to tax credits, tax-exempt interest income and excess tax benefits on shared-based payments, offset by a change in valuation allowance and uncertain tax positions. In addition, in 2023, the Company recorded an additional tax benefit arising from the liquidation of a foreign subsidiary and the remeasurement of state deferred income taxes. The Allstate Health and Benefits adjusted net income was $242 million in 2023 compared to $245 million in 2022. The decrease was primarily due to a decline in employer voluntary benefits, partially offset by increases in individual and group health. Premiums and contract charges totaled $1.85 billion in 2023, an increase of 0.8% from $1.83 billion in 2022 primarily due to growth in group health, partially offset by a decline in employer voluntary benefits and individual health.", "prior_body": "Allstate Protection underwriting loss was $2.78 billion in 2022 compared to income of $1.79 billion in 2021, primarily due to higher auto insurance losses and unfavorable reserve reestimates, both excluding catastrophes, partially offset by increased premiums earned. We are executing a comprehensive plan to improve auto insurance profitability, including broadly raising rates, reducing operating expenses and advertising, implementing underwriting restrictions in underperforming states and executing claims operating actions to manage loss costs. Catastrophe losses were $3.11 billion in 2022 compared to $3.34 billion in 2021.Premiums written increased 10.7% to $45.79 billion in 2022 compared to $41.36 billion in 2021, reflecting higher premiums in both Allstate and National General brands.Protection Services adjusted net income was $169 million in 2022 compared to $179 million in 2021. The decrease in 2022 was primarily due to higher technology expenses at Allstate Identity Protection and lower revenue at Arity. Premiums and other revenues increased 10.6% or $224 million to $2.34 billion in 2022 from $2.12 billion in 2021 primarily due to Allstate Protection Plans. Allstate Health and Benefits adjusted net income was $222 million in 2022 compared to $208 million in 2021. The increase was primarily due to increases in group health revenues, partially offset by higher operating costs and expenses and group health contract benefits.Premiums and contract charges totaled $1.83 billion in 2022, an increase of 0.7% from $1.82 billion in 2021 primarily due to growth in group health, partially offset by a decline in individual health. Allstate Protection underwriting loss was $2.78 billion in 2022 compared to income of $1.79 billion in 2021, primarily due to higher auto insurance losses and unfavorable reserve reestimates, both excluding catastrophes, partially offset by increased premiums earned. We are executing a comprehensive plan to improve auto insurance profitability, including broadly raising rates, reducing operating expenses and advertising, implementing underwriting restrictions in underperforming states and executing claims operating actions to manage loss costs. Catastrophe losses were $3.11 billion in 2022 compared to $3.34 billion in 2021.Premiums written increased 10.7% to $45.79 billion in 2022 compared to $41.36 billion in 2021, reflecting higher premiums in both Allstate and National General brands.Protection Services adjusted net income was $169 million in 2022 compared to $179 million in 2021. The decrease in 2022 was primarily due to higher technology expenses at Allstate Identity Protection and lower revenue at Arity. Premiums and other revenues increased 10.6% or $224 million to $2.34 billion in 2022 from $2.12 billion in 2021 primarily due to Allstate Protection Plans. Allstate Protection underwriting loss was $2.78 billion in 2022 compared to income of $1.79 billion in 2021, primarily due to higher auto insurance losses and unfavorable reserve reestimates, both excluding catastrophes, partially offset by increased premiums earned. We are executing a comprehensive plan to improve auto insurance profitability, including broadly raising rates, reducing operating expenses and advertising, implementing underwriting restrictions in underperforming states and executing claims operating actions to manage loss costs. Catastrophe losses were $3.11 billion in 2022 compared to $3.34 billion in 2021. Premiums written increased 10.7% to $45.79 billion in 2022 compared to $41.36 billion in 2021, reflecting higher premiums in both Allstate and National General brands. Protection Services adjusted net income was $169 million in 2022 compared to $179 million in 2021. The decrease in 2022 was primarily due to higher technology expenses at Allstate Identity Protection and lower revenue at Arity. Premiums and other revenues increased 10.6% or $224 million to $2.34 billion in 2022 from $2.12 billion in 2021 primarily due to Allstate Protection Plans. Allstate Health and Benefits adjusted net income was $222 million in 2022 compared to $208 million in 2021. The increase was primarily due to increases in group health revenues, partially offset by higher operating costs and expenses and group health contract benefits.Premiums and contract charges totaled $1.83 billion in 2022, an increase of 0.7% from $1.82 billion in 2021 primarily due to growth in group health, partially offset by a decline in individual health. Allstate Health and Benefits adjusted net income was $222 million in 2022 compared to $208 million in 2021. The increase was primarily due to increases in group health revenues, partially offset by higher operating costs and expenses and group health contract benefits. Premiums and contract charges totaled $1.83 billion in 2022, an increase of 0.7% from $1.82 billion in 2021 primarily due to growth in group health, partially offset by a decline in individual health. 38 www.allstate.com 38 www.allstate.com 38 www.allstate.com 2022 Form 10-K 2022 Form 10-K Financial HighlightsInvestments totaled $61.83 billion as of December 31, 2022, decreasing from $64.70 billion as of December 31, 2021.Allstate shareholders’ equity was $17.48 billion as of December 31, 2022 and $25.18 billion as of December 31, 2021. The decrease is primarily due to net unrealized capital losses on investments in 2022 compared to gains at 2021, common share repurchases, a net loss and dividends paid to shareholders.Book value per diluted common share (ratio of Allstate common shareholders’ equity to total common shares outstanding and dilutive potential common shares outstanding) was $58.07 as of December 31, 2022, a decrease of 28.8% from $81.52 as of December 31, 2021.Return on average common Allstate shareholders’ equity For the twelve months ended December 31, 2022, return on Allstate common shareholders’ equity was (7.3)%, a decrease of 13.1 points from 5.8% for the twelve months ended December 31, 2021, primarily due to net loss applicable to common shareholders.Pension and other postretirement remeasurement gains and losses We recorded pension and other postretirement remeasurement losses of $116 million in 2022, primarily related to unfavorable asset performance compared to the expected return on plan assets, partially offset by a reduction in the projected benefit obligation due to an increase in the liability discount rate. See Note 18 of the consolidated financial statements and Application of Critical Accounting Estimates section of the MD&A for further information. Financial HighlightsInvestments totaled $61.83 billion as of December 31, 2022, decreasing from $64.70 billion as of December 31, 2021.Allstate shareholders’ equity was $17.48 billion as of December 31, 2022 and $25.18 billion as of December 31, 2021. The decrease is primarily due to net unrealized capital losses on investments in 2022 compared to gains at 2021, common share repurchases, a net loss and dividends paid to shareholders.Book value per diluted common share (ratio of Allstate common shareholders’ equity to total common shares outstanding and dilutive potential common shares outstanding) was $58.07 as of December 31, 2022, a decrease of 28.8% from $81.52 as of December 31, 2021." }, { "status": "MODIFIED", "current_title": "Expense ratio (1)", "prior_title": "Expense ratio (1)", "similarity_score": 0.563, "confidence": "low", "key_changes": [ "Reworded sentence: \"Loss ratios by line of business For the years ended December 31,Loss ratioEffect of catastrophe lossesEffect of prior year reserve reestimatesEffect of catastrophe losses included in prior year reserve reestimates 202320222021202320222021202320222021202320222021Auto82.8 87.2 70.5 2.1 1.7 1.7 0.7 4.0 0.5 (0.2)(0.2)(0.1)Homeowners85.4 71.1 73.5 38.6 21.6 27.2 0.8 1.9 (1.4)0.3 0.7 (1.7)Other personal lines82.0 79.7 62.9 14.6 12.3 11.0 0.8 (1.5)(5.1)(0.8)0.1 (0.5)Commercial lines105.8 120.7 97.5 3.7 2.5 2.9 10.4 24.2 14.4 1.0 (0.1)0.4 Other business lines48.4 39.5 38.4 7.5 9.1 5.3 2.2 (1.2)(4.8)— 0.8 0.3 Total83.3 83.3 71.1 11.6 7.1 8.3 1.0 3.6 — — — (0.5)\"" ], "current_body": "(1)Other revenue is deducted from operating costs and expenses in the expense ratio calculation. Loss ratios by line of business For the years ended December 31,Loss ratioEffect of catastrophe lossesEffect of prior year reserve reestimatesEffect of catastrophe losses included in prior year reserve reestimates 202320222021202320222021202320222021202320222021Auto82.8 87.2 70.5 2.1 1.7 1.7 0.7 4.0 0.5 (0.2)(0.2)(0.1)Homeowners85.4 71.1 73.5 38.6 21.6 27.2 0.8 1.9 (1.4)0.3 0.7 (1.7)Other personal lines82.0 79.7 62.9 14.6 12.3 11.0 0.8 (1.5)(5.1)(0.8)0.1 (0.5)Commercial lines105.8 120.7 97.5 3.7 2.5 2.9 10.4 24.2 14.4 1.0 (0.1)0.4 Other business lines48.4 39.5 38.4 7.5 9.1 5.3 2.2 (1.2)(4.8)— 0.8 0.3 Total83.3 83.3 71.1 11.6 7.1 8.3 1.0 3.6 — — — (0.5)", "prior_body": "(1)Other revenue is deducted from operating costs and expenses in the expense ratio calculation. The Allstate Corporation 45 The Allstate Corporation 45 The Allstate Corporation 45 2022 Form 10-K Allstate Protection 2022 Form 10-K Allstate Protection Loss ratios by line of business For the years ended December 31,Loss ratioEffect of catastrophe lossesEffect of prior year reserve reestimatesEffect of catastrophe losses included in prior year reserve reestimates (1)202220212020202220212020202220212020202220212020Auto87.2 70.5 57.5 1.7 1.7 1.2 4.0 0.5 (0.4)(0.2)(0.1)(0.1)Homeowners69.6 72.2 67.3 21.1 26.3 27.9 1.8 (1.5)(5.3)0.8 (1.7)(5.1)Other personal lines79.7 62.9 58.7 12.3 11.0 10.4 (1.5)(5.1)(3.5)0.1 (0.5)(2.0)Commercial lines120.7 97.5 82.4 2.5 2.9 3.5 24.2 14.4 4.7 (0.1)0.4 0.2 Total83.3 71.1 60.4 7.1 8.3 7.9 3.6 — (1.6)— (0.5)(1.4)" }, { "status": "MODIFIED", "current_title": "Measuring segment profit or loss", "prior_title": "Measuring segment profit or loss", "similarity_score": 0.507, "confidence": "low", "key_changes": [ "Reworded sentence: \"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 36 www.allstate.com 36 www.allstate.com 36 www.allstate.com 2023 Form 10-K 2023 Form 10-K Macroeconomic ImpactsMacroeconomic factors have and may continue to impact the results of our operations, financial condition and liquidity, such as U.S.\"", "Reworded sentence: \"2023 Operating Priorities and ResultsAllstate continued to focus on its operating priorities while executing a comprehensive plan to improve auto insurance profitability.\"" ], "current_body": "The measure of segment profit or loss used in evaluating performance is underwriting income for the Allstate Protection and Run-off Property-Liability segments and adjusted net income for the Protection Services, Allstate Health and Benefits, and Corporate and Other segments. Underwriting income is calculated as premiums earned and other revenue, less claims and claims expense (“losses”), Shelter-in-Place Payback expense, amortization of deferred policy acquisition costs (“DAC”), operating costs and expenses, amortization or impairment of purchased intangibles, and restructuring and related charges, as determined using accounting principles generally accepted in the United States of America (“GAAP”). We use this measure in our evaluation of results of operations to analyze profitability. 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 36 www.allstate.com 36 www.allstate.com 36 www.allstate.com 2023 Form 10-K 2023 Form 10-K Macroeconomic ImpactsMacroeconomic factors have and may continue to impact the results of our operations, financial condition and liquidity, such as U.S. government fiscal and monetary policies, banking system instability, the Russia/Ukraine and Israel/Hamas conflicts and the remaining impacts of the Novel Coronavirus Pandemic or COVID-19 (“Coronavirus”), such as supply chain disruptions, labor shortages and other macroeconomic factors that have increased inflation. Inflation continues to remain elevated, which led to increases in interest rates by the Federal Reserve and many foreign governmental authorities and central banks. These actions could create significant economic uncertainty. Market volatility resulting from these factors and from disruptions in the banking industry have and may continue to impact our investment valuations and returns.These factors have affected our operations and may continue to significantly affect our results of operations, financial condition and liquidity and should be considered when comparing the current period to prior periods. Macroeconomic impacts are disclosed in Part 1 “Item 1A. Risk Factors’’, including the risk factors titled “A large-scale pandemic, the occurrence of terrorism, military actions, social unrest or other actions may have an adverse effect on our business” and “Conditions in the global economy and capital markets could adversely affect our business and results of operations”. This is not inclusive of all potential impacts and should not be treated as such. Within the MD&A, we have included further disclosures related to macroeconomic impacts on our 2023 results.Israel/Hamas ConflictAs of December 31, 2023, we have approximately $47 million investment exposure in the Middle East, of which approximately $43 million is held in Israel, which is primarily indirect exposure through funds managed by external asset managers. Russia/Ukraine ConflictThe Russia-Ukraine war and related sanctions imposed as a result of this conflict have increased global economic and political uncertainty, including inflationary pressures and an increased risk of cybersecurity incidents. Allstate does not have operations or direct investments in Russia, Belarus or Ukraine, but we could experience significant indirect impacts on the investment portfolio, financial position, or results of operations. 2023 Operating Priorities and ResultsAllstate continued to focus on its operating priorities while executing a comprehensive plan to improve auto insurance profitability. The table below summarizes the results of our 2023 Operating Priorities. Macroeconomic ImpactsMacroeconomic factors have and may continue to impact the results of our operations, financial condition and liquidity, such as U.S. government fiscal and monetary policies, banking system instability, the Russia/Ukraine and Israel/Hamas conflicts and the remaining impacts of the Novel Coronavirus Pandemic or COVID-19 (“Coronavirus”), such as supply chain disruptions, labor shortages and other macroeconomic factors that have increased inflation. Inflation continues to remain elevated, which led to increases in interest rates by the Federal Reserve and many foreign governmental authorities and central banks. These actions could create significant economic uncertainty. Market volatility resulting from these factors and from disruptions in the banking industry have and may continue to impact our investment valuations and returns.These factors have affected our operations and may continue to significantly affect our results of operations, financial condition and liquidity and should be considered when comparing the current period to prior periods. Macroeconomic impacts are disclosed in Part 1 “Item 1A. Risk Factors’’, including the risk factors titled “A large-scale pandemic, the occurrence of terrorism, military actions, social unrest or other actions may have an adverse effect on our business” and “Conditions in the global economy and capital markets could adversely affect our business and results", "prior_body": "The measure of segment profit or loss used in evaluating performance is underwriting income for the Allstate Protection and Run-off Property-Liability segments and adjusted net income for the Protection Services, Allstate Health and Benefits, and Corporate and Other segments. Underwriting income is calculated as premiums earned and other revenue, less claims and claims expense (“losses”), Shelter-in-Place Payback expense, amortization of deferred policy acquisition costs (“DAC”), operating costs and expenses, amortization or impairment of purchased intangibles, and restructuring and related charges, as determined using accounting principles generally accepted in the United States of America (“GAAP”). We use this measure in our evaluation of results of operations to analyze profitability. 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 The Allstate Corporation 35 The Allstate Corporation 35 The Allstate Corporation 35 2022 Form 10-K 2022 Form 10-K Sale of HeadquartersOn October 18, 2022, Allstate closed the sale of its headquarters for $232 million resulting in a gain of approximately $99 million, pre-tax in the fourth quarter of 2022. $16 million of the gain was classified in Property-Liability net gains and losses on investments and derivatives and $83 million was classified as other revenue within the Corporate and Other segment. The sale reduces real estate expenses and further advances Allstate’s multi-year Transformative Growth initiative.Acquisitions and Dispositions Acquisitions On January 4, 2021, we completed the acquisition of National General Holdings Corp. (“National General”), significantly enhancing our strategic position in the independent agency channel.Discontinued operations and held for sale On October 1, 2021, we closed the sale of Allstate Life Insurance Company of New York (“ALNY”) to Wilton Reassurance Company for $400 million. On November 1, 2021, we 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 2021, the assets and liabilities of the businesses were reclassified as held for sale and results are presented as discontinued operations. This change was applied on a retrospective basis. In connection with the sale of ALIC and certain affiliates in 2021, the sale agreement includes 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. See Note 3 of the consolidated financial statements for further information on acquisitions and dispositions.Macroeconomic ImpactsThe Novel Coronavirus Pandemic or COVID-19 (“Coronavirus”) resulted in governments worldwide enacting emergency measures to combat the spread of the virus, including travel restrictions, government-imposed shelter-in-place orders, quarantine periods, social distancing, and restrictions on large gatherings. These measures have moderated significantly, but new variants of the Coronavirus could result in further economic volatility. We continue to closely monitor and proactively adapt to developments and changing conditions. Currently, it is not possible to reliably estimate the continuing impact to operations, but the effects have been and could be material. Certain growth and profitability comparisons to the prior year were impacted, in part, by the effects the Coronavirus had on prior year results. Beginning in March 2020, when shelter-in-place orders and other restrictions were initiated, and throughout 2021, we experienced lower auto accident claim frequency and different claim patterns than historically experienced. Total auto claim frequency has since increased, but remains below pre-pandemic levels.The Coronavirus has affected operations and may continue to significantly affect results of operations, financial condition and liquidity. The impact from the pandemic should be considered when comparing the current year to the prior years, including:•Sales of new and retention of existing policies•Rate changes and average gross premiums•Supply chain disruptions and labor shortages impacts on the cost of settling claims•Premium for transportation network products•Driving behavior and auto accident frequency•Hospital and outpatient claim costs•Investment valuations and returns•Bad debt and credit allowance exposure•Consumer utilization of Milewise®, our pay-per-mile insurance product •Retail sales in Allstate Protection PlansA pandemic such as the Coronavirus and its impacts are disclosed in Part 1 “Item 1A. Risk Factors’’, including the risk factors titled “A large-scale pandemic, the occurrence of terrorism, military actions, social unrest or other actions may have an adverse effect on our business” and “Conditions in the global economy and capital markets could continue to adversely affect our business and results of operations”. Supply chain disruptions, labor shortages and other macroeconomic factors have increased inflation, which may have an adverse impact on investment valuations and returns. As inflation continued to remain elevated, the Federal Reserve significantly increased interest rates and credit spreads widened reflecting ongoing recession concerns. These factors along with other ongoing impacts from the pandemic create significant economic uncertainty and the resulting market volatility may continue to impact our investment valuations and returns.This list is not inclusive of all potential impacts and should not be treated as such. Within the MD&A we have included further disclosures related to macroeconomic impacts on our 2022 results.Russia/Ukraine ConflictThe Russia-Ukraine war and related sanctions imposed as a result of this conflict have increased global economic and political uncertainty, including inflationary pressures and an increased risk of cybersecurity incidents. Allstate does not have operations or direct investments in Russia, Belarus or Ukraine, but we could experience significant indirect impacts on the investment portfolio, financial position, or results of operations. Sale of HeadquartersOn October 18, 2022, Allstate closed the sale of its headquarters for $232 million resulting in a gain of approximately $99 million, pre-tax in the fourth quarter of 2022. $16 million of the gain was classified in Property-Liability net gains and losses on investments and derivatives and $83 million was classified as other revenue within the Corporate and Other segment. The sale reduces real estate expenses and further advances Allstate’s multi-year Transformative Growth initiative.Acquisitions and Dispositions Acquisitions On January 4, 2021, we completed the acquisition of National General Holdings Corp. (“National General”), significantly enhancing our strategic position in the independent agency channel.Discontinued operations and held for sale On October 1, 2021, we closed the sale of Allstate Life Insurance Company of New York (“ALNY”) to Wilton Reassurance Company for $400 million. On November 1, 2021, we 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 2021, the assets and liabilities of the businesses were reclassified as held for sale and results are presented as discontinued operations. This change was applied on a retrospective basis. In connection with the sale of ALIC and certain affiliates in 2021, the sale agreement includes 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. See Note 3 of the consolidated financial statements for further information on acquisitions and dispositions.Macroeconomic ImpactsThe Novel Coronavirus Pandemic or COVID-19 (“Coronavirus”) resulted in governments worldwide enacting emergency measures to combat the spread of the virus, including travel restrictions, government-imposed shelter-in-place orders, quarantine periods, social distancing, and restrictions on large gatherings. These measures have moderated significantly, but new variants of the Coronavirus could result in further economic volatility. We continue to closely monitor and proactively adapt to developments and changing conditions. Currently, it is not possible to reliably estimate the continuing impact to operations, but the effects have been and could be material. Certain growth and profitability comparisons to the prior year were impacted, in part, by the effects the" }, { "status": "MODIFIED", "current_title": "2022 vs. 2021", "prior_title": "2021 vs. 2020", "similarity_score": 0.498, "confidence": "low", "key_changes": [ "Reworded sentence: \"Other personal lines premiums written increased 12.0% or $270 million in 2023 compared to 2022, primarily due to increases in landlords, condominiums and personal umbrella for Allstate brand.\"", "Reworded sentence: \"Other personal lines premiums written increased 12.0% or $270 million in 2023 compared to 2022, primarily due to increases in landlords, condominiums and personal umbrella for Allstate brand.\"" ], "current_body": "Exclusive agency channel The Allstate Corporation 45 The Allstate Corporation 45 The Allstate Corporation 45 2023 Form 10-K Allstate Protection 2023 Form 10-K Allstate Protection Homeowners insurance premiums written increased 12.3% or $1.38 billion in 2023 compared to 2022, primarily due to the following factors:•Higher Allstate brand average premiums from implemented rate increases taken in 2022 and 2023 and inflation in insured home replacement costs, combined with policies in force growth•In 2023 rate increases of 15.0% were taken for Allstate brand in 49 locations, resulting in total Allstate brand insurance premium impact of 11.3%•National General policy growth may be negatively impacted in future quarters as we improve underwriting margins to targeted levels in the current books of business through underwriting and rate actions. In 2023 rate increases of 23.4% were taken for National General brand in 32 locations, resulting in total National General brand insurance premium impact of 11.0%•Decreased new issued applications in the direct and exclusive agency channels, partially offset by growth in the independent agency channel•Policy growth is being reduced in states and lines of business that are underperforming. We are no longer writing new homeowners business in California and Florida, and we are non-renewing certain policies in Florida to reduce our exposure, which have and will continue to negatively impact premiums•The impact of the ongoing rate increases, underwriting restrictions in markets with returns below target levels and temporary reductions in advertising have and may continue to have an adverse effect on the renewal ratio, premiums and future PIF growth Homeowners insurance premiums written increased 12.3% or $1.38 billion in 2023 compared to 2022, primarily due to the following factors:•Higher Allstate brand average premiums from implemented rate increases taken in 2022 and 2023 and inflation in insured home replacement costs, combined with policies in force growth•In 2023 rate increases of 15.0% were taken for Allstate brand in 49 locations, resulting in total Allstate brand insurance premium impact of 11.3%•National General policy growth may be negatively impacted in future quarters as we improve underwriting margins to targeted levels in the current books of business through underwriting and rate actions. In 2023 rate increases of 23.4% were taken for National General brand in 32 locations, resulting in total National General brand insurance premium impact of 11.0% Homeowners insurance premiums written increased 12.3% or $1.38 billion in 2023 compared to 2022, primarily due to the following factors: •Higher Allstate brand average premiums from implemented rate increases taken in 2022 and 2023 and inflation in insured home replacement costs, combined with policies in force growth •In 2023 rate increases of 15.0% were taken for Allstate brand in 49 locations, resulting in total Allstate brand insurance premium impact of 11.3% •National General policy growth may be negatively impacted in future quarters as we improve underwriting margins to targeted levels in the current books of business through underwriting and rate actions. In 2023 rate increases of 23.4% were taken for National General brand in 32 locations, resulting in total National General brand insurance premium impact of 11.0% •Decreased new issued applications in the direct and exclusive agency channels, partially offset by growth in the independent agency channel•Policy growth is being reduced in states and lines of business that are underperforming. We are no longer writing new homeowners business in California and Florida, and we are non-renewing certain policies in Florida to reduce our exposure, which have and will continue to negatively impact premiums•The impact of the ongoing rate increases, underwriting restrictions in markets with returns below target levels and temporary reductions in advertising have and may continue to have an adverse effect on the renewal ratio, premiums and future PIF growth •Decreased new issued applications in the direct and exclusive agency channels, partially offset by growth in the independent agency channel •Policy growth is being reduced in states and lines of business that are underperforming. We are no longer writing new homeowners business in California and Florida, and we are non-renewing certain policies in Florida to reduce our exposure, which have and will continue to negatively impact premiums •The impact of the ongoing rate increases, underwriting restrictions in markets with returns below target levels and temporary reductions in advertising have and may continue to have an adverse effect on the renewal ratio, premiums and future PIF growth Homeowners premium measures and statistics2023202220212023 vs. 20222022 vs. 2021New issued applications (thousands) Allstate Protection by brandAllstate brand934 986 962 (5.3)%2.5 %National General177 136 102 30.1 %33.3 %Total new issued applications1,111 1,122 1,064 (1.0)%5.5 %Allstate Protection by channelExclusive agency channel800 826 840 (3.1)%(1.7)%Direct channel79 94 84 (16.0)%11.9 %Independent agency channel232 202 140 14.9 %44.3 %Total new issued applications 1,111 1,122 1,064 (1.0)%5.5 %Allstate brand average premium$1,812 $1,614 $1,426 12.3 %13.2 %Allstate brand renewal ratio (%) 86.7 86.8 87.1 (0.1)(0.3)", "prior_body": "Exclusive agency channel 44 www.allstate.com 44 www.allstate.com 44 www.allstate.com Allstate Protection 2022 Form 10-K Allstate Protection 2022 Form 10-K Homeowners insurance premiums written increased 12.0% or $1.26 billion in 2022 compared to 2021, primarily due to the following factors: •Higher Allstate brand average premiums from inflation in insured home replacement costs and implemented rate increases, combined with policies in force growth. National General premiums and policy growth negatively impacted as we focus on improving underwriting margins to targeted levels through underwriting and rate actions•Increased new issued applications driven by growth in the independent agency channel in 2022 compared to 2021•Policy growth is being reduced in states and lines of business that are underperforming. Starting in the fourth quarter of 2022, we no longer write new homeowners business in the state of California, although we will offer continuing coverage to existing customers. We also reduced homeowners new business in Florida. These actions have negatively impacted premiums starting in the fourth quarter •Higher Allstate brand average premiums from inflation in insured home replacement costs and implemented rate increases, combined with policies in force growth. National General premiums and policy growth negatively impacted as we focus on improving underwriting margins to targeted levels through underwriting and rate actions•Increased new issued applications driven by growth in the independent agency channel in 2022 compared to 2021 •Higher Allstate brand average premiums from inflation in insured home replacement costs and implemented rate increases, combined with policies in force growth. National General premiums and policy growth negatively impacted as we focus on improving underwriting margins to targeted levels through underwriting and rate actions •Increased new issued applications driven by growth in the independent agency channel in 2022 compared to 2021 •Policy growth is being reduced in states and lines of business that are underperforming. Starting in the fourth quarter of 2022, we no longer write new homeowners business in the state of California, although we will offer continuing coverage to existing customers. We also reduced homeowners new business in Florida. These actions have negatively impacted premiums starting in the fourth quarter •Policy growth is being reduced in states and lines of business that are underperforming. Starting in the fourth quarter of 2022, we no longer write new homeowners business in the state of California, although we will offer continuing coverage to existing customers. We also reduced homeowners new business in Florida. These actions have negatively impacted premiums starting in the fourth quarter Homeowners premium measures and statistics2022202120202022 vs. 20212021 vs. 2020New issued applications (thousands) Allstate Protection by brandAllstate brand986 962 899 2.5 %7.0 %National General136 102 34 33.3 %NMTotal new issued applications1,122 1,064 933 5.5 %14.0 %Allstate Protection by channelExclusive agency channel826 840 810 (1.7)%3.7 %Direct channel94 84 62 11.9 %35.5 %Independent agency channel202 140 61 44.3 %129.5 %Total new issued applications 1,122 1,064 933 5.5 %14.0 %Allstate brand average premium$1,614 $1,426 $1,328 13.2 %7.4 %Allstate brand renewal ratio (%) 86.8 87.1 87.5 (0.3)(0.4)" }, { "status": "MODIFIED", "current_title": "Consolidated net income (loss) applicable to common shareholders", "prior_title": "Allstate Delivered on 2022 Operating Priorities (1)", "similarity_score": 0.483, "confidence": "low", "key_changes": [ "Reworded sentence: \"Consolidated net loss applicable to common shareholders was $316 million in 2023 compared to net loss of $1.39 billion in 2022, primarily due to improved underwriting results and net gains on equity valuations compared to losses in 2022.For the twelve months ended December 31, 2023, return on Allstate common shareholders’ equity was (2.0)% compared to (7.2)% for the twelve months ended December 31, 2022.\"" ], "current_body": "Consolidated net loss applicable to common shareholders was $316 million in 2023 compared to net loss of $1.39 billion in 2022, primarily due to improved underwriting results and net gains on equity valuations compared to losses in 2022.For the twelve months ended December 31, 2023, return on Allstate common shareholders’ equity was (2.0)% compared to (7.2)% for the twelve months ended December 31, 2022. Consolidated net loss applicable to common shareholders was $316 million in 2023 compared to net loss of $1.39 billion in 2022, primarily due to improved underwriting results and net gains on equity valuations compared to losses in 2022.For the twelve months ended December 31, 2023, return on Allstate common shareholders’ equity was (2.0)% compared to (7.2)% for the twelve months ended December 31, 2022. Consolidated net loss applicable to common shareholders was $316 million in 2023 compared to net loss of $1.39 billion in 2022, primarily due to improved underwriting results and net gains on equity valuations compared to losses in 2022.For the twelve months ended December 31, 2023, return on Allstate common shareholders’ equity was (2.0)% compared to (7.2)% for the twelve months ended December 31, 2022. Consolidated net loss applicable to common shareholders was $316 million in 2023 compared to net loss of $1.39 billion in 2022, primarily due to improved underwriting results and net gains on equity valuations compared to losses in 2022. For the twelve months ended December 31, 2023, return on Allstate common shareholders’ equity was (2.0)% compared to (7.2)% for the twelve months ended December 31, 2022. Total revenue($ in millions)", "prior_body": "Enterprise Net Promoter Score, which measures how likely customers are to recommend us, finished below the prior year, reflecting substantial price increases necessary to offset higher loss costs. Consolidated policies in force reached 189.1 million, a 1.0% decrease from prior year. Property-Liability policies in force increased by 0.7% compared to the prior year, as continued growth at National General was substantially offset by the Allstate brand as new business was limited in many states. Protection Services policies in force declined 1.4%, primarily due to expiring low average premium policies from a major retail account that ended in 2019. Return on average Allstate common shareholders’ equity was (7.3)% in 2022. The Property-Liability combined ratio of 106.6 for the full year increased compared to the prior year primarily driven by higher auto losses. We continued to reduce expenses by lowering direct sales and advertising spend and are reducing exposure in states with unacceptable auto and home insurance margins through underwriting restrictions. Our claims organization is executing a plan to manage the impacts of a higher loss cost environment. Net investment income of $2.40 billion in 2022 was $890 million below prior year as higher market-based investment income was more than offset by lower performance-based results. Total return on the $61.83 billion investment portfolio was (4.0)% in 2022 and compares favorably to full year 2022 performance of the S&P 500 of (18.1)% and the Bloomberg Intermediate Bond return of (9.4)%. Proactive portfolio actions to reduce inflation and economic risk by shortening fixed income duration mitigated portfolio losses by approximately $2 billion this year. (1)2023 operating priorities will remain mostly consistent with the 2022 priorities, with “Building Long-Term Growth Platforms” expanding to “Execute Transformative Growth” to fully integrate Transformative Growth goals. Consolidated Net Income($ in millions) Consolidated net loss applicable to common shareholders was $1.42 billion in 2022 compared to net income of $1.49 billion in 2021, primarily due to an underwriting loss, equity valuation decreases and losses on investment sales, partially offset by the absence of the 2021 loss on sale of the life and annuities business.For the twelve months ended December 31, 2022, return on Allstate common shareholders’ equity was (7.3)% compared to 5.8% for the twelve months ended December 31, 2021. Consolidated net loss applicable to common shareholders was $1.42 billion in 2022 compared to net income of $1.49 billion in 2021, primarily due to an underwriting loss, equity valuation decreases and losses on investment sales, partially offset by the absence of the 2021 loss on sale of the life and annuities business.For the twelve months ended December 31, 2022, return on Allstate common shareholders’ equity was (7.3)% compared to 5.8% for the twelve months ended December 31, 2021. Consolidated net loss applicable to common shareholders was $1.42 billion in 2022 compared to net income of $1.49 billion in 2021, primarily due to an underwriting loss, equity valuation decreases and losses on investment sales, partially offset by the absence of the 2021 loss on sale of the life and annuities business.For the twelve months ended December 31, 2022, return on Allstate common shareholders’ equity was (7.3)% compared to 5.8% for the twelve months ended December 31, 2021. Consolidated net loss applicable to common shareholders was $1.42 billion in 2022 compared to net income of $1.49 billion in 2021, primarily due to an underwriting loss, equity valuation decreases and losses on investment sales, partially offset by the absence of the 2021 loss on sale of the life and annuities business. For the twelve months ended December 31, 2022, return on Allstate common shareholders’ equity was (7.3)% compared to 5.8% for the twelve months ended December 31, 2021. Total Revenue($ in millions) Total revenue increased 1.6% to $51.41 billion in 2022 compared to 2021, primarily due to an 8.7% increase in property and casualty insurance premiums earned, partially offset by net losses on investments and derivatives in 2022 compared to net gains in 2021 and a decrease in net investment income. Total revenue increased 1.6% to $51.41 billion in 2022 compared to 2021, primarily due to an 8.7% increase in property and casualty insurance premiums earned, partially offset by net losses on investments and derivatives in 2022 compared to net gains in 2021 and a decrease in net investment income. Total revenue increased 1.6% to $51.41 billion in 2022 compared to 2021, primarily due to an 8.7% increase in property and casualty insurance premiums earned, partially offset by net losses on investments and derivatives in 2022 compared to net gains in 2021 and a decrease in net investment income. Total revenue increased 1.6% to $51.41 billion in 2022 compared to 2021, primarily due to an 8.7% increase in property and casualty insurance premiums earned, partially offset by net losses on investments and derivatives in 2022 compared to net gains in 2021 and a decrease in net investment income. Net Investment Income($ in millions) Net investment income decreased $890 million to $2.40 billion in 2022 compared to 2021, primarily due to lower performance-based investment results, mainly from limited partnerships, partially offset by higher market-based fixed income portfolio yields. Net investment income decreased $890 million to $2.40 billion in 2022 compared to 2021, primarily due to lower performance-based investment results, mainly from limited partnerships, partially offset by higher market-based fixed income portfolio yields. Net investment income decreased $890 million to $2.40 billion in 2022 compared to 2021, primarily due to lower performance-based investment results, mainly from limited partnerships, partially offset by higher market-based fixed income portfolio yields. Net investment income decreased $890 million to $2.40 billion in 2022 compared to 2021, primarily due to lower performance-based investment results, mainly from limited partnerships, partially offset by higher market-based fixed income portfolio yields. The Allstate Corporation 37 The Allstate Corporation 37 The Allstate Corporation 37 2022 Form 10-K 2022 Form 10-K" }, { "status": "MODIFIED", "current_title": "Contractual maturities and yields of fixed income securities for the next three years", "prior_title": "Contractual maturities and yields of fixed income securities for the next three years", "similarity_score": 0.481, "confidence": "low", "key_changes": [ "Reworded sentence: \"Portfolio composition and strategy by reporting segment (1)As of December 31, 2023($ in millions)Property-LiabilityProtection ServicesAllstate Health and Benefits Corporate and OtherTotalFixed income securities (2)$43,466 $1,796 $1,806 $1,797 $48,865 Equity securities (3)1,516 254 44 597 2,411 Mortgage loans, net701 — 121 — 822 Limited partnership interests8,366 — — 14 8,380 Short-term investments (4)4,555 130 92 367 5,144 Other investments, net936 — 119 — 1,055 Total$59,540 $2,180 $2,182 $2,775 $66,677 Percentage to total 89.3 %3.3 %3.3 %4.1 %100.0 %Market-based$50,019 $2,180 $2,182 $2,553 $56,934 Performance-based9,521 — — 222 9,743 Total$59,540 $2,180 $2,182 $2,775 $66,677\"" ], "current_body": "Portfolio composition and strategy by reporting segment (1)As of December 31, 2023($ in millions)Property-LiabilityProtection ServicesAllstate Health and Benefits Corporate and OtherTotalFixed income securities (2)$43,466 $1,796 $1,806 $1,797 $48,865 Equity securities (3)1,516 254 44 597 2,411 Mortgage loans, net701 — 121 — 822 Limited partnership interests8,366 — — 14 8,380 Short-term investments (4)4,555 130 92 367 5,144 Other investments, net936 — 119 — 1,055 Total$59,540 $2,180 $2,182 $2,775 $66,677 Percentage to total 89.3 %3.3 %3.3 %4.1 %100.0 %Market-based$50,019 $2,180 $2,182 $2,553 $56,934 Performance-based9,521 — — 222 9,743 Total$59,540 $2,180 $2,182 $2,775 $66,677", "prior_body": "Portfolio composition and strategy by reporting segment (1)As of December 31, 2022($ in millions)Property-LiabilityProtection ServicesAllstate Health and Benefits Corporate and OtherTotalFixed income securities (2)$36,133 $1,694 $1,556 $3,102 $42,485 Equity securities (3)3,807 127 63 570 4,567 Mortgage loans, net661 — 101 — 762 Limited partnership interests8,106 — — 8 8,114 Short-term investments (4)3,698 96 32 347 4,173 Other investments, net1,606 — 120 2 1,728 Total$54,011 $1,917 $1,872 $4,029 $61,829 Percent to total 87.4 %3.1 %3.0 %6.5 %100.0 %Market-based$44,929 $1,917 $1,872 $4,027 $52,745 Performance-based9,082 — — 2 9,084 Total$54,011 $1,917 $1,872 $4,029 $61,829" }, { "status": "MODIFIED", "current_title": "2023 Operating Priorities and Results", "prior_title": "Russia/Ukraine Conflict", "similarity_score": 0.48, "confidence": "low", "key_changes": [ "Reworded sentence: \"Allstate continued to focus on its operating priorities while executing a comprehensive plan to improve auto insurance profitability.\"" ], "current_body": "Allstate continued to focus on its operating priorities while executing a comprehensive plan to improve auto insurance profitability. The table below summarizes the results of our 2023 Operating Priorities. 2023 Operating Priorities (1)Improve Customer ValueEnterprise Net Promoter Score, which measures how likely customers are to recommend Allstate, finished below the prior year, reflecting the impact of substantial price increases necessary to offset higher loss costs.Grow Customer BaseConsolidated policies in force reached 194 million, a 2.8% increase from prior year. Property-Liability policies in force decreased by 2.0% compared to the prior year, as continued growth at National General was more than offset by the Allstate brand and renewals declined in the auto insurance business.Protection Services policies in force increased 4.3%, primarily due to growth at Allstate Protection Plans.Achieve Target Economic Returns on CapitalReturn on average Allstate common shareholders’ equity was (2.0)% in 2023.The Property-Liability combined ratio of 104.5 for the full year decreased compared to the prior year primarily reflecting increased premiums earned, partially offsetting continued high loss costs. A comprehensive profitability plan is being executed.Proactively Manage InvestmentsNet investment income of $2.48 billion in 2023 was $75 million higher than prior year as higher market-based investment income was partially offset by lower performance-based results.Total return on the $66.68 billion investment portfolio was 6.7% in 2023. Proactive portfolio management repositioned the fixed income portfolio into longer duration and higher-yielding assets that sustainably increase income.Execute Transformative GrowthAllstate made substantial progress in advancing Transformative Growth in 2023, including continued cost reductions, deploying a new property-liability technology platform and a new Affordable, Simple and Connected auto insurance offering in seven states.National General is building a strong competitive position in independent agent distribution.Build a digital enterprise by expanding utilization of machine-based learning and artificial intelligence.", "prior_body": "The Russia-Ukraine war and related sanctions imposed as a result of this conflict have increased global economic and political uncertainty, including inflationary pressures and an increased risk of cybersecurity incidents. Allstate does not have operations or direct investments in Russia, Belarus or Ukraine, but we could experience significant indirect impacts on the investment portfolio, financial position, or results of operations. 36 www.allstate.com 36 www.allstate.com 36 www.allstate.com 2022 Form 10-K 2022 Form 10-K Allstate Delivered on 2022 Operating Priorities (1)Better Service CustomersEnterprise Net Promoter Score, which measures how likely customers are to recommend us, finished below the prior year, reflecting substantial price increases necessary to offset higher loss costs.Grow Customer BaseConsolidated policies in force reached 189.1 million, a 1.0% decrease from prior year. Property-Liability policies in force increased by 0.7% compared to the prior year, as continued growth at National General was substantially offset by the Allstate brand as new business was limited in many states.Protection Services policies in force declined 1.4%, primarily due to expiring low average premium policies from a major retail account that ended in 2019.Achieve Target Economic Returns on CapitalReturn on average Allstate common shareholders’ equity was (7.3)% in 2022.The Property-Liability combined ratio of 106.6 for the full year increased compared to the prior year primarily driven by higher auto losses. We continued to reduce expenses by lowering direct sales and advertising spend and are reducing exposure in states with unacceptable auto and home insurance margins through underwriting restrictions. Our claims organization is executing a plan to manage the impacts of a higher loss cost environment.Proactively Manage InvestmentsNet investment income of $2.40 billion in 2022 was $890 million below prior year as higher market-based investment income was more than offset by lower performance-based results.Total return on the $61.83 billion investment portfolio was (4.0)% in 2022 and compares favorably to full year 2022 performance of the S&P 500 of (18.1)% and the Bloomberg Intermediate Bond return of (9.4)%. Proactive portfolio actions to reduce inflation and economic risk by shortening fixed income duration mitigated portfolio losses by approximately $2 billion this year.Build Long-Term Growth PlatformsAllstate made substantial progress in advancing Transformative Growth initiatives in 2022, including continued cost reductions, deploying a new property-liability technology platform and a new Affordable, Simple and Connected auto insurance offering in two states.National General is meeting or exceeding acquisition performance targets with the objective of building a strong competitive position in independent agent distribution.Protection Services has increased revenues, particularly Allstate Protection Plans. Arity continued to expand its data acquisition platform with more than one trillion miles of traffic data and launched Arity IQ, a product to improve new business profitability for auto insurers." }, { "status": "MODIFIED", "current_title": "2022 vs. 2021", "prior_title": "2021 vs. 2020", "similarity_score": 0.478, "confidence": "low", "key_changes": [ "Reworded sentence: \"Exclusive agency channel The Allstate Corporation 45 The Allstate Corporation 45 The Allstate Corporation 45 2023 Form 10-K Allstate Protection 2023 Form 10-K Allstate Protection Homeowners insurance premiums written increased 12.3% or $1.38 billion in 2023 compared to 2022, primarily due to the following factors:•Higher Allstate brand average premiums from implemented rate increases taken in 2022 and 2023 and inflation in insured home replacement costs, combined with policies in force growth•In 2023 rate increases of 15.0% were taken for Allstate brand in 49 locations, resulting in total Allstate brand insurance premium impact of 11.3%•National General policy growth may be negatively impacted in future quarters as we improve underwriting margins to targeted levels in the current books of business through underwriting and rate actions.\"" ], "current_body": "Exclusive agency channel The Allstate Corporation 45 The Allstate Corporation 45 The Allstate Corporation 45 2023 Form 10-K Allstate Protection 2023 Form 10-K Allstate Protection Homeowners insurance premiums written increased 12.3% or $1.38 billion in 2023 compared to 2022, primarily due to the following factors:•Higher Allstate brand average premiums from implemented rate increases taken in 2022 and 2023 and inflation in insured home replacement costs, combined with policies in force growth•In 2023 rate increases of 15.0% were taken for Allstate brand in 49 locations, resulting in total Allstate brand insurance premium impact of 11.3%•National General policy growth may be negatively impacted in future quarters as we improve underwriting margins to targeted levels in the current books of business through underwriting and rate actions. In 2023 rate increases of 23.4% were taken for National General brand in 32 locations, resulting in total National General brand insurance premium impact of 11.0%•Decreased new issued applications in the direct and exclusive agency channels, partially offset by growth in the independent agency channel•Policy growth is being reduced in states and lines of business that are underperforming. We are no longer writing new homeowners business in California and Florida, and we are non-renewing certain policies in Florida to reduce our exposure, which have and will continue to negatively impact premiums•The impact of the ongoing rate increases, underwriting restrictions in markets with returns below target levels and temporary reductions in advertising have and may continue to have an adverse effect on the renewal ratio, premiums and future PIF growth Homeowners insurance premiums written increased 12.3% or $1.38 billion in 2023 compared to 2022, primarily due to the following factors:•Higher Allstate brand average premiums from implemented rate increases taken in 2022 and 2023 and inflation in insured home replacement costs, combined with policies in force growth•In 2023 rate increases of 15.0% were taken for Allstate brand in 49 locations, resulting in total Allstate brand insurance premium impact of 11.3%•National General policy growth may be negatively impacted in future quarters as we improve underwriting margins to targeted levels in the current books of business through underwriting and rate actions. In 2023 rate increases of 23.4% were taken for National General brand in 32 locations, resulting in total National General brand insurance premium impact of 11.0% Homeowners insurance premiums written increased 12.3% or $1.38 billion in 2023 compared to 2022, primarily due to the following factors: •Higher Allstate brand average premiums from implemented rate increases taken in 2022 and 2023 and inflation in insured home replacement costs, combined with policies in force growth •In 2023 rate increases of 15.0% were taken for Allstate brand in 49 locations, resulting in total Allstate brand insurance premium impact of 11.3% •National General policy growth may be negatively impacted in future quarters as we improve underwriting margins to targeted levels in the current books of business through underwriting and rate actions. In 2023 rate increases of 23.4% were taken for National General brand in 32 locations, resulting in total National General brand insurance premium impact of 11.0% •Decreased new issued applications in the direct and exclusive agency channels, partially offset by growth in the independent agency channel•Policy growth is being reduced in states and lines of business that are underperforming. We are no longer writing new homeowners business in California and Florida, and we are non-renewing certain policies in Florida to reduce our exposure, which have and will continue to negatively impact premiums•The impact of the ongoing rate increases, underwriting restrictions in markets with returns below target levels and temporary reductions in advertising have and may continue to have an adverse effect on the renewal ratio, premiums and future PIF growth •Decreased new issued applications in the direct and exclusive agency channels, partially offset by growth in the independent agency channel •Policy growth is being reduced in states and lines of business that are underperforming. We are no longer writing new homeowners business in California and Florida, and we are non-renewing certain policies in Florida to reduce our exposure, which have and will continue to negatively impact premiums •The impact of the ongoing rate increases, underwriting restrictions in markets with returns below target levels and temporary reductions in advertising have and may continue to have an adverse effect on the renewal ratio, premiums and future PIF growth Homeowners premium measures and statistics2023202220212023 vs. 20222022 vs. 2021New issued applications (thousands) Allstate Protection by brandAllstate brand934 986 962 (5.3)%2.5 %National General177 136 102 30.1 %33.3 %Total new issued applications1,111 1,122 1,064 (1.0)%5.5 %Allstate Protection by channelExclusive agency channel800 826 840 (3.1)%(1.7)%Direct channel79 94 84 (16.0)%11.9 %Independent agency channel232 202 140 14.9 %44.3 %Total new issued applications 1,111 1,122 1,064 (1.0)%5.5 %Allstate brand average premium$1,812 $1,614 $1,426 12.3 %13.2 %Allstate brand renewal ratio (%) 86.7 86.8 87.1 (0.1)(0.3)", "prior_body": "Exclusive agency channel 44 www.allstate.com 44 www.allstate.com 44 www.allstate.com Allstate Protection 2022 Form 10-K Allstate Protection 2022 Form 10-K Homeowners insurance premiums written increased 12.0% or $1.26 billion in 2022 compared to 2021, primarily due to the following factors: •Higher Allstate brand average premiums from inflation in insured home replacement costs and implemented rate increases, combined with policies in force growth. National General premiums and policy growth negatively impacted as we focus on improving underwriting margins to targeted levels through underwriting and rate actions•Increased new issued applications driven by growth in the independent agency channel in 2022 compared to 2021•Policy growth is being reduced in states and lines of business that are underperforming. Starting in the fourth quarter of 2022, we no longer write new homeowners business in the state of California, although we will offer continuing coverage to existing customers. We also reduced homeowners new business in Florida. These actions have negatively impacted premiums starting in the fourth quarter •Higher Allstate brand average premiums from inflation in insured home replacement costs and implemented rate increases, combined with policies in force growth. National General premiums and policy growth negatively impacted as we focus on improving underwriting margins to targeted levels through underwriting and rate actions•Increased new issued applications driven by growth in the independent agency channel in 2022 compared to 2021 •Higher Allstate brand average premiums from inflation in insured home replacement costs and implemented rate increases, combined with policies in force growth. National General premiums and policy growth negatively impacted as we focus on improving underwriting margins to targeted levels through underwriting and rate actions •Increased new issued applications driven by growth in the independent agency channel in 2022 compared to 2021 •Policy growth is being reduced in states and lines of business that are underperforming. Starting in the fourth quarter of 2022, we no longer write new homeowners business in the state of California, although we will offer continuing coverage to existing customers. We also reduced homeowners new business in Florida. These actions have negatively impacted premiums starting in the fourth quarter •Policy growth is being reduced in states and lines of business that are underperforming. Starting in the fourth quarter of 2022, we no longer write new homeowners business in the state of California, although we will offer continuing coverage to existing customers. We also reduced homeowners new business in Florida. These actions have negatively impacted premiums starting in the fourth quarter Homeowners premium measures and statistics2022202120202022 vs. 20212021 vs. 2020New issued applications (thousands) Allstate Protection by brandAllstate brand986 962 899 2.5 %7.0 %National General136 102 34 33.3 %NMTotal new issued applications1,122 1,064 933 5.5 %14.0 %Allstate Protection by channelExclusive agency channel826 840 810 (1.7)%3.7 %Direct channel94 84 62 11.9 %35.5 %Independent agency channel202 140 61 44.3 %129.5 %Total new issued applications 1,122 1,064 933 5.5 %14.0 %Allstate brand average premium$1,614 $1,426 $1,328 13.2 %7.4 %Allstate brand renewal ratio (%) 86.8 87.1 87.5 (0.3)(0.4)" }, { "status": "UNCHANGED", "current_title": "A.M. Best financial strength rating (1)", "prior_title": "A.M. Best financial strength rating (1)", "current_body": "State-based industry pool or facility programs MCCA (2) Federal Government - NFIP A+" }, { "status": "UNCHANGED", "current_title": "Protection Services", "prior_title": "Protection Services", "current_body": "(1)N/A reflects no S&P Global Ratings (“S&P”) or A.M. Best ratings available. (2)As of December 31, 2023 and 2022, MCCA includes $62 million of reinsurance recoverable on paid claims and $6.36 billion and $6.66 billion of reinsurance recoverable on unpaid claims, respectively. (3)Other reinsurance recoverables primarily relate to commercial lines, including shared economy, as well as asbestos, environmental and other liability exposures. Reinsurance and indemnification recoverables include an estimate of the amount of insurance claims and claims expense reserves that are ceded under the terms of the agreements, including IBNR unpaid losses. We calculate our ceded reinsurance and indemnification estimates based on the terms of each applicable agreement, including an estimate of how IBNR losses will ultimately be ceded under the agreement. We also consider other limitations and coverage exclusions under our agreements. Accordingly, our estimate of recoverables is subject to similar risks and uncertainties as our estimate of reserves for claims and claims expense. We believe the recoverables are appropriately established; however, as our underlying reserves continue to develop, the amount ultimately recoverable may vary from amounts currently recorded. We regularly evaluate the reinsurers and the respective amounts of our reinsurance recoverables, and a provision for uncollectible reinsurance recoverables is recorded, if needed. The establishment of reinsurance recoverables and the related allowance for uncollectible reinsurance is also an inherently uncertain process involving estimates. Changes in estimates could result in additional changes to the Consolidated Statements of Operations. Indemnification recoverables are considered collectible based on the industry pool and facility enabling legislation and the Company has not had any credit losses related to these programs and we do not anticipate losses in the foreseeable future. We also have not experienced credit losses on our catastrophe reinsurance programs, which include highly rated reinsurers.The allowance for uncollectible reinsurance relates to other reinsurance programs primarily related to our Run-off Property-Liability segment. The allowance was $62 million as of December 31, 2023 and 2022.The allowance is based upon our ongoing review of amounts outstanding, length of collection periods, changes in reinsurer credit standing, and other relevant factors. In addition, in the ordinary course of Reinsurance and indemnification recoverables include an estimate of the amount of insurance claims and claims expense reserves that are ceded under the terms of the agreements, including IBNR unpaid losses. We calculate our ceded reinsurance and indemnification estimates based on the terms of each applicable agreement, including an estimate of how IBNR losses will ultimately be ceded under the agreement. We also consider other limitations and coverage exclusions under our agreements. Accordingly, our estimate of recoverables is subject to similar risks and uncertainties as our estimate of reserves for claims and claims expense. We believe the recoverables are appropriately established; however, as our underlying reserves continue to develop, the amount ultimately recoverable may vary from amounts currently recorded. We regularly evaluate the reinsurers and the respective amounts of our reinsurance recoverables, and a provision for uncollectible reinsurance recoverables is recorded, if needed. The establishment of reinsurance recoverables and the related allowance for Reinsurance and indemnification recoverables include an estimate of the amount of insurance claims and claims expense reserves that are ceded under the terms of the agreements, including IBNR unpaid losses. We calculate our ceded reinsurance and indemnification estimates based on the terms of each applicable agreement, including an estimate of how IBNR losses will ultimately be ceded under the agreement. We also consider other limitations and coverage exclusions under our agreements. Accordingly, our estimate of recoverables is subject to similar risks and uncertainties as our estimate of reserves for claims and claims expense. We believe the recoverables are appropriately established; however, as our underlying reserves continue to develop, the amount ultimately recoverable may vary from amounts currently recorded. We regularly evaluate the reinsurers and the respective amounts of our reinsurance recoverables, and a provision for uncollectible reinsurance recoverables is recorded, if needed. The establishment of reinsurance recoverables and the related allowance for uncollectible reinsurance is also an inherently uncertain process involving estimates. Changes in estimates could result in additional changes to the Consolidated Statements of Operations. Indemnification recoverables are considered collectible based on the industry pool and facility enabling legislation and the Company has not had any credit losses related to these programs and we do not anticipate losses in the foreseeable future. We also have not experienced credit losses on our catastrophe reinsurance programs, which include highly rated reinsurers.The allowance for uncollectible reinsurance relates to other reinsurance programs primarily related to our Run-off Property-Liability segment. The allowance was $62 million as of December 31, 2023 and 2022.The allowance is based upon our ongoing review of amounts outstanding, length of collection periods, changes in reinsurer credit standing, and other relevant factors. In addition, in the ordinary course of uncollectible reinsurance is also an inherently uncertain process involving estimates. Changes in estimates could result in additional changes to the Consolidated Statements of Operations. Indemnification recoverables are considered collectible based on the industry pool and facility enabling legislation and the Company has not had any credit losses related to these programs and we do not anticipate losses in the foreseeable future. We also have not experienced credit losses on our catastrophe reinsurance programs, which include highly rated reinsurers. The allowance for uncollectible reinsurance relates to other reinsurance programs primarily related to our Run-off Property-Liability segment. The allowance was $62 million as of December 31, 2023 and 2022. The allowance is based upon our ongoing review of amounts outstanding, length of collection periods, changes in reinsurer credit standing, and other relevant factors. In addition, in the ordinary course of 60 www.allstate.com 60 www.allstate.com 60 www.allstate.com 2023 Form 10-K Property and Casualty Insurance Claims and Claims Expense Reserves 2023 Form 10-K Property and Casualty Insurance Claims and Claims Expense Reserves business, we may become involved in coverage disputes with certain of our reinsurers that may ultimately result in lawsuits and arbitrations brought by or against such reinsurers to determine the parties’ rights and obligations under the various reinsurance agreements. We employ dedicated specialists to manage reinsurance collections and disputes. We also consider recent developments in commutation activity between reinsurers and cedents, and recent trends in arbitration and litigation outcomes in disputes between cedents and reinsurers in seeking to maximize our reinsurance recoveries. Adverse developments in the insurance industry have led to a decline in the financial strength of some of our reinsurance carriers, causing amounts recoverable from them and future claims ceded to them to be considered a higher risk. There has also been consolidation activity in the industry, which causes reinsurance risk across the industry to be concentrated among fewer companies. See Note 2 of the consolidated financial statements for a description of the methodology utilized to calculate the allowance for reinsurance recoverables.For further details related to our reinsurance and indemnification recoverables, see the Regulation section in Part I and Note 11 of the consolidated financial statements. business, we may become involved in coverage disputes with certain of our reinsurers that may ultimately result in lawsuits and arbitrations brought by or against such reinsurers to determine the parties’ rights and obligations under the various reinsurance agreements. We employ dedicated specialists to manage reinsurance collections and disputes. We also consider recent developments in commutation activity between reinsurers and cedents, and recent trends in arbitration and litigation outcomes in disputes between cedents and reinsurers in seeking to maximize our reinsurance recoveries. Adverse developments in the insurance industry have led to a decline in the financial strength of some of our reinsurance carriers, causing amounts business, we may become involved in coverage disputes with certain of our reinsurers that may ultimately result in lawsuits and arbitrations brought by or against such reinsurers to determine the parties’ rights and obligations under the various reinsurance agreements. We employ dedicated specialists to manage reinsurance collections and disputes. We also consider recent developments in commutation activity between reinsurers and cedents, and recent trends in arbitration and litigation outcomes in disputes between cedents and reinsurers in seeking to maximize our reinsurance recoveries. Adverse developments in the insurance industry have led to a decline in the financial strength of some of our reinsurance carriers, causing amounts recoverable from them and future claims ceded to them to be considered a higher risk. There has also been consolidation activity in the industry, which causes reinsurance risk across the industry to be concentrated among fewer companies. See Note 2 of the consolidated financial statements for a description of the methodology utilized to calculate the allowance for reinsurance recoverables.For further details related to our reinsurance and indemnification recoverables, see the Regulation section in Part I and Note 11 of the consolidated financial statements. recoverable from them and future claims ceded to them to be considered a higher risk. There has also been consolidation activity in the industry, which causes reinsurance risk across the industry to be concentrated among fewer companies. See Note 2 of the consolidated financial statements for a description of the methodology utilized to calculate the allowance for reinsurance recoverables. For further details related to our reinsurance and indemnification recoverables, see the Regulation section in Part I and Note 11 of the consolidated financial statements. Effects of reinsurance ceded and indemnification programs on our premiums earned and claims and claims expenseFor the years ended December 31,($ in millions)202320222021Allstate Protection - PremiumsIndemnification programsState-based industry pool or facility programsNCRF$323 $300 $310 MCCA29 18 20 PLIGA7 7 7 FHCF28 24 15 Other1 — 420 Federal Government - NFIP327 319 350 Catastrophe reinsurance995 764 541 Other reinsurance programs 110 261 60 Total Allstate Protection1,820 1,693 1,723 Run-off Property-Liability— — — Total Property-Liability1,820 1,693 1,723 Protection Services169 176 181 Total effect on premiums earned$1,989 $1,869 $1,904 Allstate Protection - ClaimsIndemnification programsState-based industry pool or facility programsMCCA$(185)$116 $611 NCRF379 294 279 PLIGA14 (24)— FHCF(6)74 13 Other 1 — 359 Federal Government - NFIP102 435 267 Catastrophe reinsurance 32 298 1,719 Other reinsurance programs151 261 85 Total Allstate Protection488 1,454 3,333 Run-off Property-Liability29 50 60 Total Property-Liability517 1,504 3,393 Protection Services116 96 91 Total effect on claims and claims expense$633 $1,600 $3,484" }, { "status": "UNCHANGED", "current_title": "Effects of reinsurance ceded and indemnification programs on our premiums earned and claims and claims expense", "prior_title": "Effects of reinsurance ceded and indemnification programs on our premiums earned and claims and claims expense", "current_body": "State-based industry pool or facility programs Federal Government - NFIP" }, { "status": "UNCHANGED", "current_title": "Property-Liability Operations", "prior_title": "Property-Liability Operations", "current_body": "Overview Property-Liability operations consist of two reportable segments: Allstate Protection and Run-off Property-Liability. These segments are consistent with the groupings of financial information that management uses to evaluate performance and to determine the allocation of resources.We do not allocate Property-Liability investment income, net gains and losses on investments and derivatives, or assets to the Allstate Protection and Run-off Property-Liability segments. Management reviews assets at the Property-Liability level for decision-making purposes.GAAP operating ratios are used to measure our profitability to enhance an investor’s understanding of our financial results and are calculated as follows:•Loss ratio: the ratio of claims and claims expense (loss adjustment expenses), to premiums earned. Loss ratios include the impact of catastrophe losses and prior year reserve reestimates.•Expense ratio: the ratio of amortization of DAC, operating costs and expenses, amortization or impairment of purchased intangibles, restructuring and related charges and Shelter-in-Place Payback expense, less other revenue to premiums earned.•Combined ratio: the sum of the loss ratio and the expense ratio.We have also calculated the following impacts of specific items on the GAAP operating ratios because of the volatility of these items between periods. The impacts are calculated by taking the specific items noted below divided by Property-Liability premiums earned:•Effect of catastrophe losses on combined ratio: includes catastrophe losses and prior year reserve reestimates of catastrophe losses included in claims and claims expense•Effect of prior year reserve reestimates on combined ratio•Effect of amortization of purchased intangibles on combined ratio•Effect of restructuring and related charges on combined ratio•Effect of Shelter-in-Place Payback expense on combined and expense ratios•Effect of Run-off Property-Liability business on combined ratio: includes claims and claims expense, restructuring and related charges and operating costs and expenses in the Run-off Property-Liability segmentPremium measures and statistics are used to analyze our premium trends and are calculated as follows:•PIF: policy counts are based on items rather than customers. A multi-car customer would generate multiple item (policy) counts, even if all cars were insured under one policy. Commercial lines PIF counts for shared economy agreements typically reflect contracts that cover multiple rather than individual drivers. Lender-placed policies are excluded from policy counts because relationships are with the lenders. •New issued applications: item counts of automobile or homeowner insurance applications for insurance policies that were issued during the period, regardless of whether the customer was previously insured by another Allstate brand. •Average premium-gross written (“average premium”): gross premiums written divided by issued item count. Gross premiums written include the impacts from discounts, surcharges and ceded reinsurance premiums and exclude the impacts from mid-term premium adjustments and premium refund accruals. Average premiums represent the appropriate policy term for each line.•Renewal ratio: renewal policy item counts issued during the period, based on contract effective dates, divided by the total policy item counts issued generally 6 months prior for auto or 12 months prior for homeowners.•Implemented rate changes: represents the impact in the locations (U.S. states, the District of Columbia or Canadian provinces) where rate changes were implemented during the period as a percentage of total brand prior year-end premiums written.Frequency and severity statistics, which are influenced by driving patterns, inflation and other factors, are provided to describe the trends in loss costs. Our reserving process incorporates changes in loss patterns, operational statistics and changes in claims reporting processes to determine our best estimate of recorded reserves. We use the following statistics to evaluate losses:•Gross claim frequency is calculated as annualized notice counts, excluding counts associated with catastrophe events, received in the period divided by the average of PIF with the applicable coverage during the period. Gross claim frequency includes all actual notice counts, regardless of their current status (open or closed) or their ultimate disposition (closed with a payment or closed without payment).•Report year incurred claim severity is calculated by dividing the sum of recorded estimated incurred losses and allocated loss adjustment expenses, excluding catastrophes, by the reported notice counts during that report year. Report year incurred claim severity does not include incurred Overview Property-Liability operations consist of two reportable segments: Allstate Protection and Run-off Property-Liability. These segments are consistent with the groupings of financial information that management uses to evaluate performance and to determine the allocation of resources.We do not allocate Property-Liability investment income, net gains and losses on investments and derivatives, or assets to the Allstate Protection and Run-off Property-Liability segments. Management reviews assets at the Property-Liability level for decision-making purposes.GAAP operating ratios are used to measure our profitability to enhance an investor’s understanding of our financial results and are calculated as follows:•Loss ratio: the ratio of claims and claims expense (loss adjustment expenses), to premiums earned. Loss ratios include the impact of catastrophe losses and prior year reserve reestimates.•Expense ratio: the ratio of amortization of DAC, operating costs and expenses, amortization or impairment of purchased intangibles, restructuring and related charges and Shelter-in-Place Payback expense, less other revenue to premiums earned.•Combined ratio: the sum of the loss ratio and the expense ratio.We have also calculated the following impacts of specific items on the GAAP operating ratios because of the volatility of these items between periods. The impacts are calculated by taking the specific items noted below divided by Property-Liability premiums earned:•Effect of catastrophe losses on combined ratio: includes catastrophe losses and prior year reserve reestimates of catastrophe losses included in claims and claims expense•Effect of prior year reserve reestimates on combined ratio•Effect of amortization of purchased intangibles on combined ratio•Effect of restructuring and related charges on combined ratio•Effect of Shelter-in-Place Payback expense on combined and expense ratios•Effect of Run-off Property-Liability business on combined ratio: includes claims and claims expense, restructuring and related charges and operating costs and expenses in the Run-off Property-Liability segment Overview Property-Liability operations consist of two reportable segments: Allstate Protection and Run-off Property-Liability. These segments are consistent with the groupings of financial information that management uses to evaluate performance and to determine the allocation of resources. We do not allocate Property-Liability investment income, net gains and losses on investments and derivatives, or assets to the Allstate Protection and Run-off Property-Liability segments. Management reviews assets at the Property-Liability level for decision-making purposes. GAAP operating ratios are used to measure our profitability to enhance an investor’s understanding of our financial results and are calculated as follows: •Loss ratio: the ratio of claims and claims expense (loss adjustment expenses), to premiums earned. Loss ratios include the impact of catastrophe losses and prior year reserve reestimates. •Expense ratio: the ratio of amortization of DAC, operating costs and expenses, amortization or impairment of purchased intangibles, restructuring and related charges and Shelter-in-Place Payback expense, less other revenue to premiums earned. •Combined ratio: the sum of the loss ratio and the expense ratio. We have also calculated the following impacts of specific items on the GAAP operating ratios because of the volatility of these items between periods. The impacts are calculated by taking the specific items noted below divided by Property-Liability premiums earned: •Effect of catastrophe losses on combined ratio: includes catastrophe losses and prior year reserve reestimates of catastrophe losses included in claims and claims expense •Effect of prior year reserve reestimates on combined ratio •Effect of amortization of purchased intangibles on combined ratio •Effect of restructuring and related charges on combined ratio •Effect of Shelter-in-Place Payback expense on combined and expense ratios •Effect of Run-off Property-Liability business on combined ratio: includes claims and claims expense, restructuring and related charges and operating costs and expenses in the Run-off Property-Liability segment Premium measures and statistics are used to analyze our premium trends and are calculated as follows:•PIF: policy counts are based on items rather than customers. A multi-car customer would generate multiple item (policy) counts, even if all cars were insured under one policy. Commercial lines PIF counts for shared economy agreements typically reflect contracts that cover multiple rather than individual drivers. Lender-placed policies are excluded from policy counts because relationships are with the lenders. •New issued applications: item counts of automobile or homeowner insurance applications for insurance policies that were issued during the period, regardless of whether the customer was previously insured by another Allstate brand. •Average premium-gross written (“average premium”): gross premiums written divided by issued item count. Gross premiums written include the impacts from discounts, surcharges and ceded reinsurance premiums and exclude the impacts from mid-term premium adjustments and premium refund accruals. Average premiums represent the appropriate policy term for each line.•Renewal ratio: renewal policy item counts issued during the period, based on contract effective dates, divided by the total policy item counts issued generally 6 months prior for auto or 12 months prior for homeowners.•Implemented rate changes: represents the impact in the locations (U.S. states, the District of Columbia or Canadian provinces) where rate changes were implemented during the period as a percentage of total brand prior year-end premiums written.Frequency and severity statistics, which are influenced by driving patterns, inflation and other factors, are provided to describe the trends in loss costs. Our reserving process incorporates changes in loss patterns, operational statistics and changes in claims reporting processes to determine our best estimate of recorded reserves. We use the following statistics to evaluate losses:•Gross claim frequency is calculated as annualized notice counts, excluding counts associated with catastrophe events, received in the period divided by the average of PIF with the applicable coverage during the period. Gross claim frequency includes all actual notice counts, regardless of their current status (open or closed) or their ultimate disposition (closed with a payment or closed without payment).•Report year incurred claim severity is calculated by dividing the sum of recorded estimated incurred losses and allocated loss adjustment expenses, excluding catastrophes, by the reported notice counts during that report year. Report year incurred claim severity does not include incurred Premium measures and statistics are used to analyze our premium trends and are calculated as follows: •PIF: policy counts are based on items rather than customers. A multi-car customer would generate multiple item (policy) counts, even if all cars were insured under one policy. Commercial lines PIF counts for shared economy agreements typically reflect contracts that cover multiple rather than individual drivers. Lender-placed policies are excluded from policy counts because relationships are with the lenders. •New issued applications: item counts of automobile or homeowner insurance applications for insurance policies that were issued during the period, regardless of whether the customer was previously insured by another Allstate brand. •Average premium-gross written (“average premium”): gross premiums written divided by issued item count. Gross premiums written include the impacts from discounts, surcharges and ceded reinsurance premiums and exclude the impacts from mid-term premium adjustments and premium refund accruals. Average premiums represent the appropriate policy term for each line. •Renewal ratio: renewal policy item counts issued during the period, based on contract effective dates, divided by the total policy item counts issued generally 6 months prior for auto or 12 months prior for homeowners. •Implemented rate changes: represents the impact in the locations (U.S. states, the District of Columbia or Canadian provinces) where rate changes were implemented during the period as a percentage of total brand prior year-end premiums written. Frequency and severity statistics, which are influenced by driving patterns, inflation and other factors, are provided to describe the trends in loss costs. Our reserving process incorporates changes in loss patterns, operational statistics and changes in claims reporting processes to determine our best estimate of recorded reserves. We use the following statistics to evaluate losses: •Gross claim frequency is calculated as annualized notice counts, excluding counts associated with catastrophe events, received in the period divided by the average of PIF with the applicable coverage during the period. Gross claim frequency includes all actual notice counts, regardless of their current status (open or closed) or their ultimate disposition (closed with a payment or closed without payment). •Report year incurred claim severity is calculated by dividing the sum of recorded estimated incurred losses and allocated loss adjustment expenses, excluding catastrophes, by the reported notice counts during that report year. Report year incurred claim severity does not include incurred The Allstate Corporation 41 The Allstate Corporation 41 The Allstate Corporation 41 2023 Form 10-K Property-Liability 2023 Form 10-K Property-Liability but not reported (“IBNR”) losses or benefits from subrogation and salvage.•Paid claim severity is calculated by dividing the sum of paid losses and loss expenses by claims closed with a payment during the period.•Percent change in frequency or paid claim severity statistics are calculated as the amount of increase or decrease in gross claim frequency or paid claim severity in the current period compared to the same period in the prior year divided by the prior year gross claim frequency or paid claim severity.•Percent change in report year incurred claim severity statistic is calculated as the amount of increase or decrease in report year incurred claim severity recorded in the current year divided by the current estimate of the prior report year incurred claim severity. but not reported (“IBNR”) losses or benefits from subrogation and salvage.•Paid claim severity is calculated by dividing the sum of paid losses and loss expenses by claims closed with a payment during the period.•Percent change in frequency or paid claim severity statistics are calculated as the amount of increase or decrease in gross claim frequency or paid claim severity in the current period compared to the but not reported (“IBNR”) losses or benefits from subrogation and salvage. •Paid claim severity is calculated by dividing the sum of paid losses and loss expenses by claims closed with a payment during the period. •Percent change in frequency or paid claim severity statistics are calculated as the amount of increase or decrease in gross claim frequency or paid claim severity in the current period compared to the same period in the prior year divided by the prior year gross claim frequency or paid claim severity.•Percent change in report year incurred claim severity statistic is calculated as the amount of increase or decrease in report year incurred claim severity recorded in the current year divided by the current estimate of the prior report year incurred claim severity. same period in the prior year divided by the prior year gross claim frequency or paid claim severity. •Percent change in report year incurred claim severity statistic is calculated as the amount of increase or decrease in report year incurred claim severity recorded in the current year divided by the current estimate of the prior report year incurred claim severity. Underwriting results($ in millions, except ratios)202320222021Premiums written$50,347 $45,787 $41,358 Premiums earned$48,427 $43,909 $40,454 Other revenue1,545 1,416 1,437 Claims and claims expense(40,453)(36,732)(28,876)Shelter-in-Place Payback expense— — (29)Amortization of DAC(6,070)(5,570)(5,313)Other costs and expenses(5,255)(5,650)(5,622)Restructuring and related charges (1)(143)(44)(145)Amortization of purchased intangibles(235)(240)(241)Underwriting (loss) income$(2,184)$(2,911)$1,665 Catastrophe lossesCatastrophe losses, excluding reserve reestimates$5,660 $3,094 $3,541 Catastrophe reserve reestimates (2)(24)18 (202)Total catastrophe losses$5,636 $3,112 $3,339 Non-catastrophe reserve reestimates (2)$574 $1,726 $326 Prior year reserve reestimates (2)550 1,744 124 GAAP operating ratiosLoss ratio83.5 83.6 71.4 Expense ratio (3)21.0 23.0 24.5 Combined ratio104.5 106.6 95.9 Effect of catastrophe losses on combined ratio 11.6 7.1 8.3 Effect of prior year reserve reestimates on combined ratio 1.2 3.9 0.3 Effect of catastrophe losses included in prior year reserve reestimates on combined ratio— — (0.5)Effect of restructuring and related charges on combined ratio (1)0.3 0.1 0.4 Effect of amortization of purchased intangibles on combined ratio0.5 0.5 0.6 Effect of Shelter-in-Place Payback expense on combined and expense ratios— — 0.1 Effect of Run-off Property-Liability business on combined ratio0.2 0.3 0.3" }, { "status": "UNCHANGED", "current_title": "Investments", "prior_title": "Investments", "current_body": "Overview and strategyThe return on our investment portfolios is an important component of our ability to offer good value to customers, fund business improvements and create value for shareholders. Investment portfolios are held for Property-Liability, Protection Services, Allstate Health and Benefits and Corporate and Other operations. While taking into consideration the investment portfolio in aggregate, management of the underlying portfolios is significantly influenced by the nature of each respective business and its corresponding liability profile. For each business, we identify a strategic asset allocation which considers both the nature of the liabilities and the risk and return characteristics of the various asset classes in which we invest. This allocation is informed by our long-term business and market expectations, as well as other considerations such as risk appetite, portfolio diversification, duration, desired liquidity and capital. Within appropriate ranges relative to strategic allocations, tactical allocations are made in consideration of prevailing and potential future market conditions. We manage risks that involve uncertainty related to interest rates, inflation, credit spreads, equity returns and currency exchange rates.The Property-Liability portfolio emphasizes protection of principal and consistent income generation, within a total return framework. This approach has produced competitive returns over the long term and is designed to ensure financial strength and stability for paying claims, while maximizing economic value and surplus growth. Products with lower liquidity needs, such as auto insurance and run-off lines, and capital create capacity to invest in less liquid higher yielding fixed income securities, performance-based investments such as limited partnerships and equity securities. Products with higher liquidity needs, such as homeowners insurance, are invested primarily in high quality liquid fixed income securities.The Protection Services portfolio is focused on protection of principal and consistent income generation, within a total return framework. The portfolio is largely comprised of fixed income securities with a lesser allocation to equity securities and short-term investments.The Allstate Health and Benefits portfolio is focused on protection of principal and consistent income generation while targeting an appropriate return on capital. The portfolio is largely comprised of fixed income securities with a small allocation to commercial mortgage loans and equity securities.The Corporate and Other portfolio is focused on liquidity needs and capital preservation within a total return framework. The portfolio is largely comprised of high-quality liquid fixed income securities and short-term investments.We utilize two primary strategies to manage risks and returns and to position our portfolio to take advantage of market opportunities while attempting to mitigate adverse effects. As strategies and market conditions evolve, the asset allocation may change.Market-based strategy seeks to deliver predictable earnings aligned to business needs and provide flexibility to adjust investment risk profile based on enterprise objectives and market opportunities primarily through public and private fixed income investments and public equity securities.Performance-based strategy seeks to deliver attractive risk-adjusted returns and supplement market risk with idiosyncratic risk. Returns are impacted by a variety of factors including general macroeconomic and public market conditions as public benchmarks are often used in the valuation of underlying investments. Variability in earnings will also result from the performance of the underlying assets or business and the timing of sales of those investments. Earnings from the sales of investments may be recorded as net investment income or net gains and losses on investments and derivatives. The portfolio, which primarily includes private equity (including infrastructure investments) and real estate with a majority being limited partnerships, is diversified across a number of characteristics, including managers or partners, vintage years, investment strategies, geographies (including international) and industry sectors or property types. These investments are generally illiquid in nature, often require specialized expertise, typically involve a third-party manager, and enhance returns and income through transformation at the company or property level. A portion of these investments seek returns in markets or asset classes that are dislocated or special situations, primarily in private markets.Investments in the Middle East As of December 31, 2023, we have approximately $47 million investment exposure in the Middle East, of which approximately $43 million is held in Israel, which is primarily indirect exposure through funds managed by external asset managers. Investments in Russia and Ukraine As of December 31, 2023, we do not have any direct or indirect investments in Russia, Belarus or Ukraine. Overview and strategyThe return on our investment portfolios is an important component of our ability to offer good value to customers, fund business improvements and create value for shareholders. Investment portfolios are held for Property-Liability, Protection Services, Allstate Health and Benefits and Corporate and Other operations. While taking into consideration the investment portfolio in aggregate, management of the underlying portfolios is significantly influenced by the nature of each respective business and its corresponding liability profile. For each business, we identify a strategic asset allocation which considers both the nature of the liabilities and the risk and return characteristics of the various asset classes in which we invest. This allocation is informed by our long-term business and market expectations, as well as other considerations such as risk appetite, portfolio diversification, duration, desired liquidity and capital. Within appropriate ranges relative to strategic allocations, tactical allocations are made in consideration of prevailing and potential future market conditions. We manage risks that involve uncertainty related to interest rates, inflation, credit spreads, equity returns and currency exchange rates.The Property-Liability portfolio emphasizes protection of principal and consistent income generation, within a total return framework. This approach has produced competitive returns over the long term and is designed to ensure financial strength and stability for paying claims, while maximizing economic value and surplus growth. Products with lower liquidity needs, such as auto insurance and run-off lines, and capital create capacity to invest in less liquid higher yielding fixed income securities, performance-based investments such as limited partnerships and equity securities. Products with higher liquidity needs, such as homeowners insurance, are invested primarily in high quality liquid fixed income securities.The Protection Services portfolio is focused on protection of principal and consistent income generation, within a total return framework. The portfolio is largely comprised of fixed income securities with a lesser allocation to equity securities and short-term investments.The Allstate Health and Benefits portfolio is focused on protection of principal and consistent income generation while targeting an appropriate return on capital. The portfolio is largely comprised of fixed income securities with a small allocation to commercial mortgage loans and equity securities.The Corporate and Other portfolio is focused on liquidity needs and capital preservation within a total return framework. The portfolio is largely comprised of high-quality liquid fixed income securities and short-term investments." }, { "status": "UNCHANGED", "current_title": "Protection Services", "prior_title": "Protection Services", "current_body": "(1)N/A reflects no S&P Global Ratings (“S&P”) or A.M. Best ratings available. (2)As of December 31, 2023 and 2022, MCCA includes $62 million of reinsurance recoverable on paid claims and $6.36 billion and $6.66 billion of reinsurance recoverable on unpaid claims, respectively. (3)Other reinsurance recoverables primarily relate to commercial lines, including shared economy, as well as asbestos, environmental and other liability exposures. Reinsurance and indemnification recoverables include an estimate of the amount of insurance claims and claims expense reserves that are ceded under the terms of the agreements, including IBNR unpaid losses. We calculate our ceded reinsurance and indemnification estimates based on the terms of each applicable agreement, including an estimate of how IBNR losses will ultimately be ceded under the agreement. We also consider other limitations and coverage exclusions under our agreements. Accordingly, our estimate of recoverables is subject to similar risks and uncertainties as our estimate of reserves for claims and claims expense. We believe the recoverables are appropriately established; however, as our underlying reserves continue to develop, the amount ultimately recoverable may vary from amounts currently recorded. We regularly evaluate the reinsurers and the respective amounts of our reinsurance recoverables, and a provision for uncollectible reinsurance recoverables is recorded, if needed. The establishment of reinsurance recoverables and the related allowance for uncollectible reinsurance is also an inherently uncertain process involving estimates. Changes in estimates could result in additional changes to the Consolidated Statements of Operations. Indemnification recoverables are considered collectible based on the industry pool and facility enabling legislation and the Company has not had any credit losses related to these programs and we do not anticipate losses in the foreseeable future. We also have not experienced credit losses on our catastrophe reinsurance programs, which include highly rated reinsurers.The allowance for uncollectible reinsurance relates to other reinsurance programs primarily related to our Run-off Property-Liability segment. The allowance was $62 million as of December 31, 2023 and 2022.The allowance is based upon our ongoing review of amounts outstanding, length of collection periods, changes in reinsurer credit standing, and other relevant factors. In addition, in the ordinary course of Reinsurance and indemnification recoverables include an estimate of the amount of insurance claims and claims expense reserves that are ceded under the terms of the agreements, including IBNR unpaid losses. We calculate our ceded reinsurance and indemnification estimates based on the terms of each applicable agreement, including an estimate of how IBNR losses will ultimately be ceded under the agreement. We also consider other limitations and coverage exclusions under our agreements. Accordingly, our estimate of recoverables is subject to similar risks and uncertainties as our estimate of reserves for claims and claims expense. We believe the recoverables are appropriately established; however, as our underlying reserves continue to develop, the amount ultimately recoverable may vary from amounts currently recorded. We regularly evaluate the reinsurers and the respective amounts of our reinsurance recoverables, and a provision for uncollectible reinsurance recoverables is recorded, if needed. The establishment of reinsurance recoverables and the related allowance for Reinsurance and indemnification recoverables include an estimate of the amount of insurance claims and claims expense reserves that are ceded under the terms of the agreements, including IBNR unpaid losses. We calculate our ceded reinsurance and indemnification estimates based on the terms of each applicable agreement, including an estimate of how IBNR losses will ultimately be ceded under the agreement. We also consider other limitations and coverage exclusions under our agreements. Accordingly, our estimate of recoverables is subject to similar risks and uncertainties as our estimate of reserves for claims and claims expense. We believe the recoverables are appropriately established; however, as our underlying reserves continue to develop, the amount ultimately recoverable may vary from amounts currently recorded. We regularly evaluate the reinsurers and the respective amounts of our reinsurance recoverables, and a provision for uncollectible reinsurance recoverables is recorded, if needed. The establishment of reinsurance recoverables and the related allowance for uncollectible reinsurance is also an inherently uncertain process involving estimates. Changes in estimates could result in additional changes to the Consolidated Statements of Operations. Indemnification recoverables are considered collectible based on the industry pool and facility enabling legislation and the Company has not had any credit losses related to these programs and we do not anticipate losses in the foreseeable future. We also have not experienced credit losses on our catastrophe reinsurance programs, which include highly rated reinsurers.The allowance for uncollectible reinsurance relates to other reinsurance programs primarily related to our Run-off Property-Liability segment. The allowance was $62 million as of December 31, 2023 and 2022.The allowance is based upon our ongoing review of amounts outstanding, length of collection periods, changes in reinsurer credit standing, and other relevant factors. In addition, in the ordinary course of uncollectible reinsurance is also an inherently uncertain process involving estimates. Changes in estimates could result in additional changes to the Consolidated Statements of Operations. Indemnification recoverables are considered collectible based on the industry pool and facility enabling legislation and the Company has not had any credit losses related to these programs and we do not anticipate losses in the foreseeable future. We also have not experienced credit losses on our catastrophe reinsurance programs, which include highly rated reinsurers. The allowance for uncollectible reinsurance relates to other reinsurance programs primarily related to our Run-off Property-Liability segment. The allowance was $62 million as of December 31, 2023 and 2022. The allowance is based upon our ongoing review of amounts outstanding, length of collection periods, changes in reinsurer credit standing, and other relevant factors. In addition, in the ordinary course of 60 www.allstate.com 60 www.allstate.com 60 www.allstate.com 2023 Form 10-K Property and Casualty Insurance Claims and Claims Expense Reserves 2023 Form 10-K Property and Casualty Insurance Claims and Claims Expense Reserves business, we may become involved in coverage disputes with certain of our reinsurers that may ultimately result in lawsuits and arbitrations brought by or against such reinsurers to determine the parties’ rights and obligations under the various reinsurance agreements. We employ dedicated specialists to manage reinsurance collections and disputes. We also consider recent developments in commutation activity between reinsurers and cedents, and recent trends in arbitration and litigation outcomes in disputes between cedents and reinsurers in seeking to maximize our reinsurance recoveries. Adverse developments in the insurance industry have led to a decline in the financial strength of some of our reinsurance carriers, causing amounts recoverable from them and future claims ceded to them to be considered a higher risk. There has also been consolidation activity in the industry, which causes reinsurance risk across the industry to be concentrated among fewer companies. See Note 2 of the consolidated financial statements for a description of the methodology utilized to calculate the allowance for reinsurance recoverables.For further details related to our reinsurance and indemnification recoverables, see the Regulation section in Part I and Note 11 of the consolidated financial statements. business, we may become involved in coverage disputes with certain of our reinsurers that may ultimately result in lawsuits and arbitrations brought by or against such reinsurers to determine the parties’ rights and obligations under the various reinsurance agreements. We employ dedicated specialists to manage reinsurance collections and disputes. We also consider recent developments in commutation activity between reinsurers and cedents, and recent trends in arbitration and litigation outcomes in disputes between cedents and reinsurers in seeking to maximize our reinsurance recoveries. Adverse developments in the insurance industry have led to a decline in the financial strength of some of our reinsurance carriers, causing amounts business, we may become involved in coverage disputes with certain of our reinsurers that may ultimately result in lawsuits and arbitrations brought by or against such reinsurers to determine the parties’ rights and obligations under the various reinsurance agreements. We employ dedicated specialists to manage reinsurance collections and disputes. We also consider recent developments in commutation activity between reinsurers and cedents, and recent trends in arbitration and litigation outcomes in disputes between cedents and reinsurers in seeking to maximize our reinsurance recoveries. Adverse developments in the insurance industry have led to a decline in the financial strength of some of our reinsurance carriers, causing amounts recoverable from them and future claims ceded to them to be considered a higher risk. There has also been consolidation activity in the industry, which causes reinsurance risk across the industry to be concentrated among fewer companies. See Note 2 of the consolidated financial statements for a description of the methodology utilized to calculate the allowance for reinsurance recoverables.For further details related to our reinsurance and indemnification recoverables, see the Regulation section in Part I and Note 11 of the consolidated financial statements. recoverable from them and future claims ceded to them to be considered a higher risk. There has also been consolidation activity in the industry, which causes reinsurance risk across the industry to be concentrated among fewer companies. See Note 2 of the consolidated financial statements for a description of the methodology utilized to calculate the allowance for reinsurance recoverables. For further details related to our reinsurance and indemnification recoverables, see the Regulation section in Part I and Note 11 of the consolidated financial statements. Effects of reinsurance ceded and indemnification programs on our premiums earned and claims and claims expenseFor the years ended December 31,($ in millions)202320222021Allstate Protection - PremiumsIndemnification programsState-based industry pool or facility programsNCRF$323 $300 $310 MCCA29 18 20 PLIGA7 7 7 FHCF28 24 15 Other1 — 420 Federal Government - NFIP327 319 350 Catastrophe reinsurance995 764 541 Other reinsurance programs 110 261 60 Total Allstate Protection1,820 1,693 1,723 Run-off Property-Liability— — — Total Property-Liability1,820 1,693 1,723 Protection Services169 176 181 Total effect on premiums earned$1,989 $1,869 $1,904 Allstate Protection - ClaimsIndemnification programsState-based industry pool or facility programsMCCA$(185)$116 $611 NCRF379 294 279 PLIGA14 (24)— FHCF(6)74 13 Other 1 — 359 Federal Government - NFIP102 435 267 Catastrophe reinsurance 32 298 1,719 Other reinsurance programs151 261 85 Total Allstate Protection488 1,454 3,333 Run-off Property-Liability29 50 60 Total Property-Liability517 1,504 3,393 Protection Services116 96 91 Total effect on claims and claims expense$633 $1,600 $3,484" }, { "status": "UNCHANGED", "current_title": "Insurance and financial services", "prior_title": "Insurance and financial services", "current_body": "Property and casualty actual claim costs may exceed current reserves established for claims due to changes in the inflationary, regulatory and litigation environment Estimating claim reserves is an inherently uncertain and complex process. We continually refine our best estimates of losses after considering known facts and interpretations of the circumstances. Our reserving methodology may be impacted by the following: •Models that rely on the assumption that past loss development patterns will persist into the future •Internal factors including experience with similar cases, actual claims paid, historical trends involving claim payment and case reserving patterns, pending levels of unpaid claims, loss management programs, product mix, contractual terms and changes in claim reporting and settlement practices •External factors such as inflation, court decisions, changes in law or litigation imposing unintended coverage, regulatory requirements, changes in driving patterns, delays in reporting of claims and economic conditions, supply chain disruptions and labor shortages•The ultimate cost of losses, or our current estimates, have and may continue to vary materially from recorded reserves and such variance may adversely affect our results of operations and financial condition as the reserves and amounts due from reinsurers are reestimated See MD&A, Application of Critical Accounting Estimates for further details.Unexpected increases in the frequency or severity of property and casualty claims may adversely affect our results of operations and financial conditionA significant increase in claim frequency could adversely affect our results of operations and financial condition. Changes in mix of business, miles driven, weather, driving behaviors or other factors can lead to changes in claim frequency. We may experience volatility in claim frequency, and short-term trends may not be predictive of future losses over the longer term. Increases in claim severity can arise from numerous causes that are inherently difficult to coverage, regulatory requirements, changes in driving patterns, delays in reporting of claims and economic conditions, supply chain disruptions and labor shortages •The ultimate cost of losses, or our current estimates, have and may continue to vary materially from recorded reserves and such variance may adversely affect our results of operations and financial condition as the reserves and amounts due from reinsurers are reestimated See MD&A, Application of Critical Accounting Estimates for further details. Unexpected increases in the frequency or severity of property and casualty claims may adversely affect our results of operations and financial condition A significant increase in claim frequency could adversely affect our results of operations and financial condition. Changes in mix of business, miles driven, weather, driving behaviors or other factors can lead to changes in claim frequency. We may experience volatility in claim frequency, and short-term trends may not be predictive of future losses over the longer term. Increases in claim severity can arise from numerous causes that are inherently difficult to 22 www.allstate.com 22 www.allstate.com 22 www.allstate.com 2023 Form 10-K Part I - Item 1A. Risk Factors and Other Disclosures 2023 Form 10-K Part I - Item 1A. Risk Factors and Other Disclosures predict. The following factors have and may continue to impact claim severity for auto bodily injury, auto physical damage (including collision and property damage) and homeowners coverages: •Bodily injury — more severe accidents, an increase in claims with attorney representation, higher medical consumption, and inflation •Vehicle physical damage — inflation, supply chain disruptions and labor shortages impacting used vehicle and parts prices, labor rates, length of claim resolution, delays in the receipt of third-party carrier claims, and a higher mix of total losses•Homeowners — inflation in the construction industry, building materials and home furnishings, changes in the mix of loss type, and other economic and environmental factors, including short-term supply imbalances for services and supplies in areas affected by catastrophesCatastrophes and severe weather events may subject us to significant lossesCatastrophic events could adversely affect operating results and cause them to vary significantly from one period to the next. Climate change could contribute to increased variability of catastrophe losses and underwriting results. Also, our liquidity could be constrained by a catastrophe, or multiple catastrophes, which could result in extraordinary losses, sales of investments or a downgrade of our debt or financial strength ratings. Catastrophic losses are caused by wind and hail, wildfires, tornadoes, hurricanes, tropical storms, earthquakes, severe freeze events, volcanic eruptions, terrorism, cyber-attacks, civil unrest, industrial accidents and other such events.Our personal property insurance business may incur catastrophe losses greater than: •Those experienced in prior years •The average expected level used in pricing •Current reinsurance coverage limits •Loss estimates from hurricane and earthquake models at various levels of probability Property and casualty businesses are subject to claims arising from severe weather events such as winter storms, rain, hail and high winds. The incidence and severity of weather conditions resulting in claims are extremely volatile. The total number of policyholders affected by the event, the severity of the event and the coverage provided contribute to catastrophe and severe weather losses. Increases in the insured values of covered property, geographic concentration and the number of policyholders exposed to certain events could increase the severity of claims from catastrophic and severe weather events. Limitations in analytical models used to assess and predict the exposure to catastrophe losses may adversely affect our results of operations and financial condition We use internally developed and third-party vendor models along with our own historical data to assess exposure to catastrophe losses. The models assume various conditions and probability scenarios and may not accurately predict future losses or measure losses currently incurred. Price competition and changes in regulation and underwriting standards in property and casualty businesses may adversely affect our results of operations and financial condition The personal property-liability market is highly competitive with carriers competing through underwriting, advertising, price, customer service, innovation and distribution. Changes in regulatory standards regarding underwriting and rates could also affect the ability to predict future losses and could impact profitability. Competitors can alter underwriting standards, lower prices and increase advertising, which could result in lower growth or profitability for Allstate. A decline in the growth or profitability of the property and casualty businesses could have a material effect on our results of operations and financial condition.Our investment portfolios are subject to market risk and declines in credit quality which may adversely affect or create volatility in our investment income and cause realized and unrealized lossesWe continually evaluate investment management strategies since we are subject to risk of loss due to adverse changes in interest rates, credit spreads, equity prices, real estate values, currency exchange rates and liquidity. Adverse changes have and may continue to occur due to changes in monetary and fiscal policy, inflation, geopolitical events and the economic climate, liquidity of a market or market segment, investor return expectations or risk tolerance, insolvency or financial distress of key market makers or participants, instability of the banking sector, or changes in market perceptions of credit worthiness. Inflation has been and continues to remain elevated, which has led to volatility of interest rates. The U.S. Federal Reserve and other central banks have responded to inflationary pressure, generally through more restrictive monetary policy, including increasing target interest rates. These actions could create significant economic uncertainty. Market volatility resulting from these factors has and may continue to impact our investment valuations and returns and impact our results of operations and financial condition. predict. The following factors have and may continue to impact claim severity for auto bodily injury, auto physical damage (including collision and property damage) and homeowners coverages: •Bodily injury — more severe accidents, an increase in claims with attorney representation, higher medical consumption, and inflation •Vehicle physical damage — inflation, supply chain disruptions and labor shortages impacting used vehicle and parts prices, labor rates, length of claim resolution, delays in the receipt of third-party carrier claims, and a higher mix of total losses•Homeowners — inflation in the construction industry, building materials and home furnishings, changes in the mix of loss type, and other economic and environmental factors, including short-term supply imbalances for services and supplies in areas affected by catastrophesCatastrophes and severe weather events may subject us to significant lossesCatastrophic events could adversely affect operating results and cause them to vary significantly from one period to the next. Climate change could contribute to increased variability of catastrophe losses and underwriting results. Also, our liquidity could be constrained by a catastrophe, or multiple catastrophes, which could result in extraordinary losses, sales of investments or a downgrade of our debt or financial strength ratings. Catastrophic losses are caused by wind and hail, wildfires, tornadoes, hurricanes, tropical storms, earthquakes, severe freeze events, volcanic eruptions, terrorism, cyber-attacks, civil unrest, industrial accidents and other such events.Our personal property insurance business may incur catastrophe losses greater than: •Those experienced in prior years •The average expected level used in pricing •Current reinsurance coverage limits •Loss estimates from hurricane and earthquake models at various levels of probability Property and casualty businesses are subject to claims arising from severe weather events such as winter storms, rain, hail and high winds. The incidence and severity of weather conditions resulting in claims are extremely volatile. The total number of policyholders affected by the event, the severity of the event and the coverage provided contribute to catastrophe and severe weather losses. Increases in the insured values of covered property, geographic concentration and the number of policyholders exposed to certain events could increase the severity of claims from catastrophic and severe weather events. Limitations in analytical models used to assess and predict the exposure to catastrophe losses may adversely affect our results of operations and financial condition predict. The following factors have and may continue to impact claim severity for auto bodily injury, auto physical damage (including collision and property damage) and homeowners coverages: •Bodily injury — more severe accidents, an increase in claims with attorney representation, higher medical consumption, and inflation •Vehicle physical damage — inflation, supply chain disruptions and labor shortages impacting used vehicle and parts prices, labor rates, length of claim resolution, delays in the receipt of third-party carrier claims, and a higher mix of total losses •Homeowners — inflation in the construction industry, building materials and home furnishings, changes in the mix of loss type, and other economic and environmental factors, including short-term supply imbalances for services and supplies in areas affected by catastrophes Catastrophes and severe weather events may subject us to significant losses Catastrophic events could adversely affect operating results and cause them to vary significantly from one period to the next. Climate change could contribute to increased variability of catastrophe losses and underwriting results. Also, our liquidity could be constrained by a catastrophe, or multiple catastrophes, which could result in extraordinary losses, sales of investments or a downgrade of our debt or financial strength ratings. Catastrophic losses are caused by wind and hail, wildfires, tornadoes, hurricanes, tropical storms, earthquakes, severe freeze events, volcanic eruptions, terrorism, cyber-attacks, civil unrest, industrial accidents and other such events. Our personal property insurance business may incur catastrophe losses greater than: •Those experienced in prior years •The average expected level used in pricing •Current reinsurance coverage limits •Loss estimates from hurricane and earthquake models at various levels of probability Property and casualty businesses are subject to claims arising from severe weather events such as winter storms, rain, hail and high winds. The incidence and severity of weather conditions resulting in claims are extremely volatile. The total number of policyholders affected by the event, the severity of the event and the coverage provided contribute to catastrophe and severe weather losses. Increases in the insured values of covered property, geographic concentration and the number of policyholders exposed to certain events could increase the severity of claims from catastrophic and severe weather events. Limitations in analytical models used to assess and predict the exposure to catastrophe losses may adversely affect our results of operations and financial condition We use internally developed and third-party vendor models along with our own historical data to assess exposure to catastrophe losses. The models assume various conditions and probability scenarios and may not accurately predict future losses or measure losses currently incurred. Price competition and changes in regulation and underwriting standards in property and casualty businesses may adversely affect our results of operations and financial condition The personal property-liability market is highly competitive with carriers competing through underwriting, advertising, price, customer service, innovation and distribution. Changes in regulatory standards regarding underwriting and rates could also affect the ability to predict future losses and could impact profitability. Competitors can alter underwriting standards, lower prices and increase advertising, which could result in lower growth or profitability for Allstate. A decline in the growth or profitability of the property and casualty businesses could have a material effect on our results of operations and financial condition.Our investment portfolios are subject to market risk and declines in credit quality which may adversely affect or create volatility in our investment income and cause realized and unrealized lossesWe continually evaluate investment management strategies since we are subject to risk of loss due to adverse changes in interest rates, credit spreads, equity prices, real estate values, currency exchange rates and liquidity. Adverse changes have and may continue to occur due to changes in monetary and fiscal policy, inflation, geopolitical events and the economic climate, liquidity of a market or market segment, investor return expectations or risk tolerance, insolvency or financial distress of key market makers or participants, instability of the banking sector, or changes in market perceptions of credit worthiness. Inflation has been and continues to remain elevated, which has led to volatility of interest rates. The U.S. Federal Reserve and other central banks have responded to inflationary pressure, generally through more restrictive monetary policy, including increasing target interest rates. These actions could create significant economic uncertainty. Market volatility resulting from these factors has and may continue to impact our investment valuations and returns and impact our results of operations and financial condition. We use internally developed and third-party vendor models along with our own historical data to assess exposure to catastrophe losses. The models assume various conditions and probability scenarios and may not accurately predict future losses or measure losses currently incurred. Price competition and changes in regulation and underwriting standards in property and casualty businesses may adversely affect our results of operations and financial condition The personal property-liability market is highly competitive with carriers competing through underwriting, advertising, price, customer service, innovation and distribution. Changes in regulatory standards regarding underwriting and rates could also affect the ability to predict future losses and could impact profitability. Competitors can alter underwriting standards, lower prices and increase advertising, which could result in lower growth or profitability for Allstate. A decline in the growth or profitability of the property and casualty businesses could have a material effect on our results of operations and financial condition. Our investment portfolios are subject to market risk and declines in credit quality which may adversely affect or create volatility in our investment income and cause realized and unrealized losses We continually evaluate investment management strategies since we are subject to risk of loss due to adverse changes in interest rates, credit spreads, equity prices, real estate values, currency exchange rates and liquidity. Adverse changes have and may continue to occur due to changes in monetary and fiscal policy, inflation, geopolitical events and the economic climate, liquidity of a market or market segment, investor return expectations or risk tolerance, insolvency or financial distress of key market makers or participants, instability of the banking sector, or changes in market perceptions of credit worthiness. Inflation has been and continues to remain elevated, which has led to volatility of interest rates. The U.S. Federal Reserve and other central banks have responded to inflationary pressure, generally through more restrictive monetary policy, including increasing target interest rates. These actions could create significant economic uncertainty. Market volatility resulting from these factors has and may continue to impact our investment valuations and returns and impact our results of operations and financial condition. The Allstate Corporation 23 The Allstate Corporation 23 The Allstate Corporation 23 2023 Form 10-K Part I - Item 1A. Risk Factors and Other Disclosures 2023 Form 10-K Part I - Item 1A. Risk Factors and Other Disclosures Our investments are subject to risks associated with economic and capital market conditions and factors that may be unique to our portfolio, including:•General weakening of the economy, which is typically reflected through higher credit spreads and lower equity and real estate valuations•Declines in credit quality •Declines in interest rates, credit spreads or sustained low interest rates could lead to declines in portfolio yields and investment income •Increases in market interest rates, credit spreads or a decrease in liquidity could have an adverse effect on the value of our fixed income securities that form a substantial majority of our investment portfolios•Supply chain disruptions, labor shortages, macro trends impacting real estate supply and demand and other factors may have an adverse impact on investment valuations and returns•Weak performance of general and joint venture partners and underlying investments unrelated to general market or economic conditions could lead to declines in investment income and cause realized losses in our limited partnership interests•Concentration in any particular issuer, industry, collateral type, group of related industries, geographic sector or risk typeThe amount and timing of net investment income, capital contributions and distributions from our performance-based investments, which primarily include limited partnership interests that are recorded on a lag, can fluctuate significantly due to the underlying investments’ performance or changes in market or economic conditions. Additionally, these investments are less liquid than similar, publicly-traded investments and a decline in market liquidity could impact our ability to sell them at their current carrying values.Declining equity markets or increases in interest rates or credit spreads could cause the value of the investments in our pension plans to decrease. Declines in interest rates could cause the funding ratio to decline and the value of the obligations for our pension and postretirement plans to increase. These factors could decrease the funded status of our pension and postretirement plans, increasing the likelihood or magnitude of future benefit expense and contributions. Determination of the fair value and amount of credit losses for investments includes subjective judgments and could materially impact our results of operations and financial conditionThe valuation of the portfolio is subjective, and the value of assets may differ from the actual amount received upon the sale of an asset. The degree of judgment required in determining fair values increases when: •Market observable information is less readily available•The use of different valuation assumptions may have a material effect on the assets’ fair values •Changing market conditions could materially affect the fair value of investmentsThe determination of the amount of credit losses varies by investment type and is based on ongoing evaluation and assessment of known and inherent risks associated with the respective asset class or investment.Such evaluations and assessments are highly judgmental and are revised as conditions change and new information becomes available.We update our evaluations regularly and reflect changes in credit losses in our results of operations. Our conclusions may ultimately prove to be incorrect as assumptions, facts and circumstances change. When estimating credit loss allowances, historical loss trends, consideration of current conditions, and forecasts may not be indicative of future changes in credit losses and additional amounts may need to be recorded in the future.Our participation in indemnification programs subjects us to the risk that reimbursement for qualifying claims and claims expenses may not be receivedParticipation in state-based industry pools, facilities and associations may have a material, adverse effect on our results of operations and financial condition. Our largest exposure is associated with the Michigan Catastrophic Claim Association (“MCCA”), a state-mandated indemnification mechanism for qualified personal injury protection losses that exceed a specified level. To the extent the MCCA’s current and future assessments are insufficient to reimburse its ultimate obligation on existing claims to member companies, our ability to obtain the 100% indemnification of ultimate losses could be impaired. We also participate in the Federal Government National Flood Insurance Program. For further discussion of these items, see Regulation section, Indemnification Programs and Note 11 of the consolidated financial statements.We may not be able to mitigate the impact associated with changes in capital requirementsRegulatory requirements affect the amount of capital to be maintained by our subsidiary insurance companies. Changes to requirements or regulatory interpretations may result in additional capital held in our insurance companies and could require us to increase prices, reduce our sales of certain products, or accept a return on equity below original levels assumed in pricing.A downgrade in financial strength ratings may have an adverse effect on our businessFinancial strength ratings are important factors in establishing the competitive position of insurance companies and their access to capital markets. Rating agencies have and could downgrade or change the outlook on our ratings in the future due to: Our investments are subject to risks associated with economic and capital market conditions and factors that may be unique to our portfolio, including:•General weakening of the economy, which is typically reflected through higher credit spreads and lower equity and real estate valuations•Declines in credit quality •Declines in interest rates, credit spreads or sustained low interest rates could lead to declines in portfolio yields and investment income •Increases in market interest rates, credit spreads or a decrease in liquidity could have an adverse effect on the value of our fixed income securities that form a substantial majority of our investment portfolios•Supply chain disruptions, labor shortages, macro trends impacting real estate supply and demand and other factors may have an adverse impact on investment valuations and returns•Weak performance of general and joint venture partners and underlying investments unrelated to general market or economic conditions could lead to declines in investment income and cause realized losses in our limited partnership interests•Concentration in any particular issuer, industry, collateral type, group of related industries, geographic sector or risk typeThe amount and timing of net investment income, capital contributions and distributions from our performance-based investments, which primarily include limited partnership interests that are recorded on a lag, can fluctuate significantly due to the underlying investments’ performance or changes in market or economic conditions. Additionally, these investments are less liquid than similar, publicly-traded investments and a decline in market liquidity could impact our ability to sell them at their current carrying values.Declining equity markets or increases in interest rates or credit spreads could cause the value of the investments in our pension plans to decrease. Declines in interest rates could cause the funding ratio to decline and the value of the obligations for our pension and postretirement plans to increase. These factors could decrease the funded status of our pension and postretirement plans, increasing the likelihood or magnitude of future benefit expense and contributions. Determination of the fair value and amount of credit losses for investments includes subjective judgments and could materially impact our results of operations and financial conditionThe valuation of the portfolio is subjective, and the value of assets may differ from the actual amount received upon the sale of an asset. The degree of judgment required in determining fair values increases when: •Market observable information is less readily available•The use of different valuation assumptions may Our investments are subject to risks associated with economic and capital market conditions and factors that may be unique to our portfolio, including: •General weakening of the economy, which is typically reflected through higher credit spreads and lower equity and real estate valuations •Declines in credit quality •Declines in interest rates, credit spreads or sustained low interest rates could lead to declines in portfolio yields and investment income •Increases in market interest rates, credit spreads or a decrease in liquidity could have an adverse effect on the value of our fixed income securities that form a substantial majority of our investment portfolios •Supply chain disruptions, labor shortages, macro trends impacting real estate supply and demand and other factors may have an adverse impact on investment valuations and returns •Weak performance of general and joint venture partners and underlying investments unrelated to general market or economic conditions could lead to declines in investment income and cause realized losses in our limited partnership interests •Concentration in any particular issuer, industry, collateral type, group of related industries, geographic sector or risk type The amount and timing of net investment income, capital contributions and distributions from our performance-based investments, which primarily include limited partnership interests that are recorded on a lag, can fluctuate significantly due to the underlying investments’ performance or changes in market or economic conditions. Additionally, these investments are less liquid than similar, publicly-traded investments and a decline in market liquidity could impact our ability to sell them at their current carrying values. Declining equity markets or increases in interest rates or credit spreads could cause the value of the investments in our pension plans to decrease. Declines in interest rates could cause the funding ratio to decline and the value of the obligations for our pension and postretirement plans to increase. These factors could decrease the funded status of our pension and postretirement plans, increasing the likelihood or magnitude of future benefit expense and contributions. Determination of the fair value and amount of credit losses for investments includes subjective judgments and could materially impact our results of operations and financial condition The valuation of the portfolio is subjective, and the value of assets may differ from the actual amount received upon the sale of an asset. The degree of judgment required in determining fair values increases when: •Market observable information is less readily available •The use of different valuation assumptions may have a material effect on the assets’ fair values •Changing market conditions could materially affect the fair value of investmentsThe determination of the amount of credit losses varies by investment type and is based on ongoing evaluation and assessment of known and inherent risks associated with the respective asset class or investment.Such evaluations and assessments are highly judgmental and are revised as conditions change and new information becomes available.We update our evaluations regularly and reflect changes in credit losses in our results of operations. Our conclusions may ultimately prove to be incorrect as assumptions, facts and circumstances change. When estimating credit loss allowances, historical loss trends, consideration of current conditions, and forecasts may not be indicative of future changes in credit losses and additional amounts may need to be recorded in the future.Our participation in indemnification programs subjects us to the risk that reimbursement for qualifying claims and claims expenses may not be receivedParticipation in state-based industry pools, facilities and associations may have a material, adverse effect on our results of operations and financial condition. Our largest exposure is associated with the Michigan Catastrophic Claim Association (“MCCA”), a state-mandated indemnification mechanism for qualified personal injury protection losses that exceed a specified level. To the extent the MCCA’s current and future assessments are insufficient to reimburse its ultimate obligation on existing claims to member companies, our ability to obtain the 100% indemnification of ultimate losses could be impaired. We also participate in the Federal Government National Flood Insurance Program. For further discussion of these items, see Regulation section, Indemnification Programs and Note 11 of the consolidated financial statements.We may not be able to mitigate the impact associated with changes in capital requirementsRegulatory requirements affect the amount of capital to be maintained by our subsidiary insurance companies. Changes to requirements or regulatory interpretations may result in additional capital held in our insurance companies and could require us to increase prices, reduce our sales of certain products, or accept a return on equity below original levels assumed in pricing.A downgrade in financial strength ratings may have an adverse effect on our businessFinancial strength ratings are important factors in establishing the competitive position of insurance companies and their access to capital markets. Rating agencies have and could downgrade or change the outlook on our ratings in the future due to: have a material effect on the assets’ fair values •Changing market conditions could materially affect the fair value of investments The determination of the amount of credit losses varies by investment type and is based on ongoing evaluation and assessment of known and inherent risks associated with the respective asset class or investment. Such evaluations and assessments are highly judgmental and are revised as conditions change and new information becomes available. We update our evaluations regularly and reflect changes in credit losses in our results of operations. Our conclusions may ultimately prove to be incorrect as assumptions, facts and circumstances change. When estimating credit loss allowances, historical loss trends, consideration of current conditions, and forecasts may not be indicative of future changes in credit losses and additional amounts may need to be recorded in the future. Our participation in indemnification programs subjects us to the risk that reimbursement for qualifying claims and claims expenses may not be received Participation in state-based industry pools, facilities and associations may have a material, adverse effect on our results of operations and financial condition. Our largest exposure is associated with the Michigan Catastrophic Claim Association (“MCCA”), a state-mandated indemnification mechanism for qualified personal injury protection losses that exceed a specified level. To the extent the MCCA’s current and future assessments are insufficient to reimburse its ultimate obligation on existing claims to member companies, our ability to obtain the 100% indemnification of ultimate losses could be impaired. We also participate in the Federal Government National Flood Insurance Program. For further discussion of these items, see Regulation section, Indemnification Programs and Note 11 of the consolidated financial statements. We may not be able to mitigate the impact associated with changes in capital requirements Regulatory requirements affect the amount of capital to be maintained by our subsidiary insurance companies. Changes to requirements or regulatory interpretations may result in additional capital held in our insurance companies and could require us to increase prices, reduce our sales of certain products, or accept a return on equity below original levels assumed in pricing. A downgrade in financial strength ratings may have an adverse effect on our business Financial strength ratings are important factors in establishing the competitive position of insurance companies and their access to capital markets. Rating agencies have and could downgrade or change the outlook on our ratings in the future due to: 24 www.allstate.com 24 www.allstate.com 24 www.allstate.com 2023 Form 10-K Part I - Item 1A. Risk Factors and Other Disclosures 2023 Form 10-K Part I - Item 1A. Risk Factors and Other Disclosures •Changes in the financial profile of one of our insurance companies•Changes in a rating agency’s determination of the amount of capital required to maintain a particular rating•Increases in the perceived risk of our investment portfolio, a reduced confidence in management or our business strategy, or other considerations that may or may not be under our controlA downgrade in our ratings could have an adverse effect on our sales, competitiveness, customer retention, the marketability of our product offerings, liquidity, access to and cost of borrowing or refinancing our existing debt obligations, results of operations and financial condition.Business, strategy and operationsWe operate in markets that are highly competitive Markets in which we operate are highly competitive, and we must continually allocate resources to refine and improve products and services to maintain our reputation, enhance brand perception, and remain competitive. If we are unsuccessful in generating new business, retaining customers or renewing contracts, our ability to maintain or increase premiums written or the ability to sell our products could be adversely impacted.Determining competitive position is complicated in the auto and homeowners insurance business as companies use different underwriting standards to accept new customers and quotes and close rates can fluctuate across companies and locations. Pricing of products is driven by multiple factors, including loss expectations, expense structure and dissimilar return targets. Additionally, sophisticated pricing algorithms make it difficult to determine what price potential customers would pay across competitors.There is also significant competition for producers, such as exclusive and independent agents and their licensed sales professionals. Growth and retention may be materially affected if we are unable to attract and retain effective producers or if those producers are unable to attract and retain their licensed sales professionals or customers.Our ability to adequately and effectively price our products is affected by the evolving nature of consumer needs and preferences, market and regulatory dynamics, broader use of telematics-based rate segmentation and potential change in consumer demand.Many voluntary benefits contracts are renewed annually and consumer protection plan contracts are generally multi-year, but renewals occur on a rolling basis. There is a risk that employers and retailers may be able to obtain more favorable terms from competitors than they could by renewing coverage with us. These competitive pressures may adversely affect the renewal of these contracts, as well as our ability to sell products.Changing consumer preferences may adversely impact the demand for our products which may adversely impact our business Growth and retention may be impacted if customer preferences change and we are unable to effectively adapt our business model and processes, including maintaining competitive products and allowing consumers to interact with us how they choose. Our business could be impacted by our ability to attract and retain customers through distribution channels that they prefer.Our business may also be adversely impacted by new or changing technologiesTechnological changes, such as autonomous or partially autonomous vehicles or technologies that facilitate ride, car or home sharing could disrupt the demand for products from current customers, create coverage issues, impact the frequency or severity of losses, or reduce the size of the automobile insurance market causing our auto insurance business to decline. Since auto insurance constitutes a significant portion of our overall business, we may be more sensitive than other insurers and more adversely affected by trends that could decrease auto insurance rates or reduce demand for auto insurance over time.Technological advancements and innovation are occurring in distribution, underwriting, claims and operations at a rapid pace that may continue to accelerate. Nontraditional competitors could enter the insurance market and further accelerate these trends. Our competitive position could be impacted if we are unable to deploy, in a cost effective and competitive manner, technology such as artificial intelligence, large language models and machine learning that collects and analyzes data to inform underwriting or other decisions, or if our competitors collect and use data which we do not have the ability to access or use. Innovations must be implemented in compliance with applicable insurance regulations and in a responsible and compliant manner. These changes may require extensive modifications to our systems and processes and extensive coordination with and reliance on the systems and operations of third parties. If we are unable to adapt to or bring such advancements and innovations to market, the quality of our products, our relationships with customers and agents, competitive position and business prospects may be materially affected. Changes in technology related to collection and application of data regarding customers could expose us to regulatory or legal actions and may have a material adverse effect on our business, reputation, results of operations and financial condition. Changes in technology and customer preferences may impact the ways in which we interact, do business with our customers and design our products. We may not be able to respond effectively or in a timely manner to these changes, including developing and deploying customer-facing technology to address these changing preferences and maintaining competitive technology, •Changes in the financial profile of one of our insurance companies•Changes in a rating agency’s determination of the amount of capital required to maintain a particular rating•Increases in the perceived risk of our investment portfolio, a reduced confidence in management or our business strategy, or other considerations that may or may not be under our controlA downgrade in our ratings could have an adverse effect on our sales, competitiveness, customer retention, the marketability of our product offerings, liquidity, access to and cost of borrowing or refinancing our existing debt obligations, results of operations and financial condition.Business, strategy and operationsWe operate in markets that are highly competitive Markets in which we operate are highly competitive, and we must continually allocate resources to refine and improve products and services to maintain our reputation, enhance brand perception, and remain competitive. If we are unsuccessful in generating new business, retaining customers or renewing contracts, our ability to maintain or increase premiums written or the ability to sell our products could be adversely impacted.Determining competitive position is complicated in the auto and homeowners insurance business as companies use different underwriting standards to accept new customers and quotes and close rates can fluctuate across companies and locations. Pricing of products is driven by multiple factors, including loss expectations, expense structure and dissimilar return targets. Additionally, sophisticated pricing algorithms make it difficult to determine what price potential customers would pay across competitors.There is also significant competition for producers, such as exclusive and independent agents and their licensed sales professionals. Growth and retention may be materially affected if we are unable to attract and retain effective producers or if those producers are unable to attract and retain their licensed sales professionals or customers.Our ability to adequately and effectively price our products is affected by the evolving nature of consumer needs and preferences, market and regulatory dynamics, broader use of telematics-based rate segmentation and potential change in consumer demand.Many voluntary benefits contracts are renewed annually and consumer protection plan contracts are generally multi-year, but renewals occur on a rolling basis. There is a risk that employers and retailers may be able to obtain more favorable terms from competitors than they could by renewing coverage with us. These competitive pressures may adversely •Changes in the financial profile of one of our insurance companies •Changes in a rating agency’s determination of the amount of capital required to maintain a particular rating •Increases in the perceived risk of our investment portfolio, a reduced confidence in management or our business strategy, or other considerations that may or may not be under our control A downgrade in our ratings could have an adverse effect on our sales, competitiveness, customer retention, the marketability of our product offerings, liquidity, access to and cost of borrowing or refinancing our existing debt obligations, results of operations and financial condition." }, { "status": "UNCHANGED", "current_title": "Property and Casualty Insurance Claims and Claims Expense Reserves", "prior_title": "Property and Casualty Insurance Claims and Claims Expense Reserves", "current_body": "Underwriting results are significantly influenced by estimates of claims and claims expense reserves. For a description of our reserve process, see Note 9 of the consolidated financial statements. Further, for a description of our reserving policies and the potential variability in our reserve estimates, see the Application of Critical Accounting Estimates section of the MD&A. These reserves are an estimate of amounts necessary to settle all outstanding claims, including IBNR claims, as of the reporting date.The facts and circumstances leading to reestimates of reserves relate to changes in claim activity and revisions to the development factors used to predict how losses are likely to develop from the end of a reporting period until all claims have been paid. Reestimates occur when actual losses differ from those predicted by the estimated development factors used in prior reserve estimates. We believe the net loss reserves exposures are appropriately established based on available facts, laws and regulations. Underwriting results are significantly influenced by estimates of claims and claims expense reserves. For a description of our reserve process, see Note 9 of the consolidated financial statements. Further, for a description of our reserving policies and the potential variability in our reserve estimates, see the Application of Critical Accounting Estimates section of the MD&A. These reserves are an estimate of amounts necessary to settle all outstanding claims, including IBNR claims, as of the reporting date. Underwriting results are significantly influenced by estimates of claims and claims expense reserves. For a description of our reserve process, see Note 9 of the consolidated financial statements. Further, for a description of our reserving policies and the potential variability in our reserve estimates, see the Application of Critical Accounting Estimates section of the MD&A. These reserves are an estimate of amounts necessary to settle all outstanding claims, including IBNR claims, as of the reporting date. The facts and circumstances leading to reestimates of reserves relate to changes in claim activity and revisions to the development factors used to predict how losses are likely to develop from the end of a reporting period until all claims have been paid. Reestimates occur when actual losses differ from those predicted by the estimated development factors used in prior reserve estimates. We believe the net loss reserves exposures are appropriately established based on available facts, laws and regulations. The facts and circumstances leading to reestimates of reserves relate to changes in claim activity and revisions to the development factors used to predict how losses are likely to develop from the end of a reporting period until all claims have been paid. Reestimates occur when actual losses differ from those predicted by the estimated development factors used in prior reserve estimates. We believe the net loss reserves exposures are appropriately established based on available facts, laws and regulations. Total reserves, net of recoverables (“net reserves”), as of December 31($ in millions)202320222021Allstate Protection$29,969 $26,876 $22,124 Run-off Property-Liability1,444 1,451 1,421 Total Property-Liability31,413 28,327 23,545 Protection Services49 38 36 Total net reserves $31,462 $28,365 $23,581 Reserve for property and casualty insurance claims and claims expense$39,858 $37,541 $33,060 Less: reinsurance and indemnification recoverables (1)8,396 9,176 9,479 Total net reserves$31,462 $28,365 $23,581" }, { "status": "UNCHANGED", "current_title": "Fair value and unrealized net capital gains (losses) for fixed income securities by credit rating", "prior_title": "Fair value and unrealized net capital gains (losses) for fixed income securities by credit rating", "current_body": "Fair value Fair value Fair value Fair value Fair value Fair value Municipal bonds, including tax exempt and taxable securities, include general obligations of state and local issuers and revenue bonds.Our practice for acquiring and monitoring municipal bonds is predominantly based on the underlying credit quality of the primary obligor. We currently rely on the primary obligor to pay all contractual cash flows and are not relying on bond insurers for payments. As a result of downgrades in the insurers’ credit ratings, the ratings of the insured municipal bonds generally reflect the underlying ratings of the primary obligor.Corporate bonds include publicly traded and privately placed securities. Privately placed securities primarily consist of corporate issued senior debt securities that are negotiated with the borrower or are issued by entities in unregistered form under SEC Rule 144A which allows purchasers to more easily resell these securities under certain conditions.Our $7.91 billion portfolio of privately placed securities, primarily 144A bonds, is diversified by issuer, industry sector and country. The portfolio is made up of 455 issuers. Privately placed corporate obligations may contain structural security features such as financial covenants and call protections that provide investors greater protection against credit deterioration, reinvestment risk or fluctuations in interest rates than those typically found in publicly registered debt securities. Additionally, investments in these securities are made after fundamental analysis of issuers and sectors along with macro and asset class views. Ongoing monitoring includes continuous assessment of operating performance and financial position. Every issue not rated by an independent rating agency is internally rated with a formal rating affirmation at least once a year. Liquidity of securities issued by public entities in unregistered form is similar to public debt markets.Our corporate bond portfolio includes $4.11 billion of below investment grade bonds, $3.39 billion of which are privately placed, primarily 144A bonds. These securities are diversified by issuer and industry sector. The below investment grade corporate bonds portfolio is made up of 317 issuers. We employ fundamental analyses of issuers and sectors along with macro and asset class views to identify investment opportunities. This results in a portfolio with broad exposure to the high yield market with an emphasis on idiosyncratic positions reflective of our views of market conditions and opportunities.Foreign government securities consist of Canadian governmental and provincial securities (all of which are held by our Canadian companies). Municipal bonds, including tax exempt and taxable securities, include general obligations of state and local issuers and revenue bonds.Our practice for acquiring and monitoring municipal bonds is predominantly based on the underlying credit quality of the primary obligor. We currently rely on the primary obligor to pay all contractual cash flows and are not relying on bond insurers for payments. As a result of downgrades in the insurers’ credit ratings, the ratings of the insured municipal bonds generally reflect the underlying ratings of the primary obligor.Corporate bonds include publicly traded and privately placed securities. Privately placed securities primarily consist of corporate issued senior debt securities that are negotiated with the borrower or are issued by entities in unregistered form under SEC Rule 144A which allows purchasers to more easily resell these securities under certain conditions.Our $7.91 billion portfolio of privately placed securities, primarily 144A bonds, is diversified by issuer, industry sector and country. The portfolio is made up of 455 issuers. Privately placed corporate obligations may contain structural security features such as financial covenants and call protections that provide investors greater protection against credit deterioration, reinvestment risk or fluctuations in interest rates than those typically found in publicly registered debt Municipal bonds, including tax exempt and taxable securities, include general obligations of state and local issuers and revenue bonds. Our practice for acquiring and monitoring municipal bonds is predominantly based on the underlying credit quality of the primary obligor. We currently rely on the primary obligor to pay all contractual cash flows and are not relying on bond insurers for payments. As a result of downgrades in the insurers’ credit ratings, the ratings of the insured municipal bonds generally reflect the underlying ratings of the primary obligor. Corporate bonds include publicly traded and privately placed securities. Privately placed securities primarily consist of corporate issued senior debt securities that are negotiated with the borrower or are issued by entities in unregistered form under SEC Rule 144A which allows purchasers to more easily resell these securities under certain conditions. Our $7.91 billion portfolio of privately placed securities, primarily 144A bonds, is diversified by issuer, industry sector and country. The portfolio is made up of 455 issuers. Privately placed corporate obligations may contain structural security features such as financial covenants and call protections that provide investors greater protection against credit deterioration, reinvestment risk or fluctuations in interest rates than those typically found in publicly registered debt securities. Additionally, investments in these securities are made after fundamental analysis of issuers and sectors along with macro and asset class views. Ongoing monitoring includes continuous assessment of operating performance and financial position. Every issue not rated by an independent rating agency is internally rated with a formal rating affirmation at least once a year. Liquidity of securities issued by public entities in unregistered form is similar to public debt markets.Our corporate bond portfolio includes $4.11 billion of below investment grade bonds, $3.39 billion of which are privately placed, primarily 144A bonds. These securities are diversified by issuer and industry sector. The below investment grade corporate bonds portfolio is made up of 317 issuers. We employ fundamental analyses of issuers and sectors along with macro and asset class views to identify investment opportunities. This results in a portfolio with broad exposure to the high yield market with an emphasis on idiosyncratic positions reflective of our views of market conditions and opportunities.Foreign government securities consist of Canadian governmental and provincial securities (all of which are held by our Canadian companies). securities. Additionally, investments in these securities are made after fundamental analysis of issuers and sectors along with macro and asset class views. Ongoing monitoring includes continuous assessment of operating performance and financial position. Every issue not rated by an independent rating agency is internally rated with a formal rating affirmation at least once a year. Liquidity of securities issued by public entities in unregistered form is similar to public debt markets. Our corporate bond portfolio includes $4.11 billion of below investment grade bonds, $3.39 billion of which are privately placed, primarily 144A bonds. These securities are diversified by issuer and industry sector. The below investment grade corporate bonds portfolio is made up of 317 issuers. We employ fundamental analyses of issuers and sectors along with macro and asset class views to identify investment opportunities. This results in a portfolio with broad exposure to the high yield market with an emphasis on idiosyncratic positions reflective of our views of market conditions and opportunities. Foreign government securities consist of Canadian governmental and provincial securities (all of which are held by our Canadian companies). 68 www.allstate.com 68 www.allstate.com 68 www.allstate.com 2023 Form 10-K Investments 2023 Form 10-K Investments ABS are structured securities that are primarily collateralized by consumer or corporate borrowings and residential and commercial real estate loans. The cash flows from the underlying collateral paid to the securitization trust are generally applied in a pre-determined order and are designed so that each security issued by the trust, typically referred to as a “class”, qualifies for a specific original rating.ABS includes collateralized debt obligations, consumer and other ABS. Credit risk is managed by monitoring the performance of the underlying collateral. Many of the securities in the ABS portfolio have credit enhancement with features such as overcollateralization, subordinated structures, reserve funds, guarantees or insurance. ABS also includes residential mortgage-backed securities and commercial mortgage-backed securities. For example, the “senior” portion or “top” of the capital structure, or rating class, which would originally qualify for a rating of Aaa typically has priority in receiving principal repayments on the underlying collateral and retains this priority until the class is paid in full. In a sequential structure, underlying collateral principal repayments are directed to the most senior rated Aaa class in the structure until paid in full, after which principal repayments are directed to the next most senior Aaa class in the structure until it is paid in full. Senior Aaa classes generally share any losses from the underlying collateral on a pro-rata basis after losses are absorbed by classes with lower original ratings.The payment priority and class subordination included in these securities serves as credit enhancement for holders of the senior or top portions of the structures. These securities continue to retain the payment priority features that existed at the origination of the securitization trust. Other forms of credit enhancement may include structural features embedded in the securitization trust, such as overcollateralization, excess spread and bond insurance. The underlying collateral may contain fixed interest rates, variable interest rates (such as adjustable rate mortgages), or both fixed and variable rate features.Equity securities of $2.41 billion primarily include common stocks, exchange traded and mutual funds, non-redeemable preferred stocks and real estate investment trust (“REIT”) equity investments. Certain exchange traded and mutual funds have fixed income securities as their underlying investments.Mortgage loans of $822 million mainly comprise loans secured by first mortgages on developed commercial real estate. Key considerations used to manage our exposure include property type and geographic diversification. For further detail on our mortgage loan portfolio, see Note 5 of the consolidated financial statements.Limited partnership interests include $7.15 billion of interests in private equity funds, $1.09 billion of interests in real estate funds and $141 million of interests in other funds as of December 31, 2023. We have commitments to invest additional amounts in limited partnership interests totaling $2.94 billion as of December 31, 2023. Private equity limited partnerships by sector(% of carrying value)December 31, 2023Industrial20.8 %Healthcare12.5 Information technology11.3 Consumer discretionary10.9 Consumer staples8.8 Other35.7 Total100.0 %Real estate limited partnerships by sector(% of carrying value)December 31, 2023Industrial28.8 %Residential19.1 Data centers19.0 Healthcare11.4 Consumer staples5.1 Other16.6 Total100.0 %Short-term investments of $5.14 billion primarily comprise money market funds, commercial paper, U.S. Treasury bills and other short-term investments, including securities lending collateral of $1.59 billion. Other investments primarily comprise $224 million of bank loans, $709 million of real estate, $119 million of policy loans and $1 million of derivatives as of December 31, 2023. For further detail on our use of derivatives, see Note 7 of the consolidated financial statements.Direct real estate investments by sector(% of carrying value)December 31, 2023Agriculture28.6 %Industrial23.7 Residential20.6 Retail18.5 Other8.6 Total100.0 % ABS are structured securities that are primarily collateralized by consumer or corporate borrowings and residential and commercial real estate loans. The cash flows from the underlying collateral paid to the securitization trust are generally applied in a pre-determined order and are designed so that each security issued by the trust, typically referred to as a “class”, qualifies for a specific original rating.ABS includes collateralized debt obligations, consumer and other ABS. Credit risk is managed by monitoring the performance of the underlying collateral. Many of the securities in the ABS portfolio have credit enhancement with features such as overcollateralization, subordinated structures, reserve funds, guarantees or insurance. ABS also includes residential mortgage-backed securities and commercial mortgage-backed securities. For example, the “senior” portion or “top” of the capital structure, or rating class, which would originally qualify for a rating of Aaa typically has priority in receiving principal repayments on the underlying collateral and retains this priority until the class is paid in full. In a sequential structure, underlying collateral principal repayments are directed to the most senior rated Aaa class in the structure until paid in full, after which principal repayments are directed to the next most senior Aaa class in the structure until it is paid in full. Senior Aaa classes generally share any losses from the underlying collateral on a pro-rata basis after losses are absorbed by classes with lower original ratings.The payment priority and class subordination included in these securities serves as credit enhancement for holders of the senior or top portions of the structures. These securities continue to retain the payment priority features that existed at the origination of the securitization trust. Other forms of credit enhancement may include structural features embedded in the securitization trust, such as overcollateralization, excess spread and bond insurance. The underlying collateral may contain fixed interest rates, variable interest rates (such as adjustable rate mortgages), or both fixed and variable rate features.Equity securities of $2.41 billion primarily include common stocks, exchange traded and mutual funds, non-redeemable preferred stocks and real estate investment trust (“REIT”) equity investments. Certain exchange traded and mutual funds have fixed income securities as their underlying investments.Mortgage loans of $822 million mainly comprise loans secured by first mortgages on developed commercial real estate. Key considerations used to manage our ABS are structured securities that are primarily collateralized by consumer or corporate borrowings and residential and commercial real estate loans. The cash flows from the underlying collateral paid to the securitization trust are generally applied in a pre-determined order and are designed so that each security issued by the trust, typically referred to as a “class”, qualifies for a specific original rating. ABS includes collateralized debt obligations, consumer and other ABS. Credit risk is managed by monitoring the performance of the underlying collateral. Many of the securities in the ABS portfolio have credit enhancement with features such as overcollateralization, subordinated structures, reserve funds, guarantees or insurance. ABS also includes residential mortgage-backed securities and commercial mortgage-backed securities. For example, the “senior” portion or “top” of the capital structure, or rating class, which would originally qualify for a rating of Aaa typically has priority in receiving principal repayments on the underlying collateral and retains this priority until the class is paid in full. In a sequential structure, underlying collateral principal repayments are directed to the most senior rated Aaa class in the structure until paid in full, after which principal repayments are directed to the next most senior Aaa class in the structure until it is paid in full. Senior Aaa classes generally share any losses from the underlying collateral on a pro-rata basis after losses are absorbed by classes with lower original ratings. The payment priority and class subordination included in these securities serves as credit enhancement for holders of the senior or top portions of the structures. These securities continue to retain the payment priority features that existed at the origination of the securitization trust. Other forms of credit enhancement may include structural features embedded in the securitization trust, such as overcollateralization, excess spread and bond insurance. The underlying collateral may contain fixed interest rates, variable interest rates (such as adjustable rate mortgages), or both fixed and variable rate features. Equity securities of $2.41 billion primarily include common stocks, exchange traded and mutual funds, non-redeemable preferred stocks and real estate investment trust (“REIT”) equity investments. Certain exchange traded and mutual funds have fixed income securities as their underlying investments. Mortgage loans of $822 million mainly comprise loans secured by first mortgages on developed commercial real estate. Key considerations used to manage our exposure include property type and geographic diversification. For further detail on our mortgage loan portfolio, see Note 5 of the consolidated financial statements.Limited partnership interests include $7.15 billion of interests in private equity funds, $1.09 billion of interests in real estate funds and $141 million of interests in other funds as of December 31, 2023. We have commitments to invest additional amounts in limited partnership interests totaling $2.94 billion as of December 31, 2023. Private equity limited partnerships by sector(% of carrying value)December 31, 2023Industrial20.8 %Healthcare12.5 Information technology11.3 Consumer discretionary10.9 Consumer staples8.8 Other35.7 Total100.0 %Real estate limited partnerships by sector(% of carrying value)December 31, 2023Industrial28.8 %Residential19.1 Data centers19.0 Healthcare11.4 Consumer staples5.1 Other16.6 Total100.0 %Short-term investments of $5.14 billion primarily comprise money market funds, commercial paper, U.S. Treasury bills and other short-term investments, including securities lending collateral of $1.59 billion. Other investments primarily comprise $224 million of bank loans, $709 million of real estate, $119 million of policy loans and $1 million of derivatives as of December 31, 2023. For further detail on our use of derivatives, see Note 7 of the consolidated financial statements.Direct real estate investments by sector(% of carrying value)December 31, 2023Agriculture28.6 %Industrial23.7 Residential20.6 Retail18.5 Other8.6 Total100.0 % exposure include property type and geographic diversification. For further detail on our mortgage loan portfolio, see Note 5 of the consolidated financial statements. Limited partnership interests include $7.15 billion of interests in private equity funds, $1.09 billion of interests in real estate funds and $141 million of interests in other funds as of December 31, 2023. We have commitments to invest additional amounts in limited partnership interests totaling $2.94 billion as of December 31, 2023. Private equity limited partnerships by sector(% of carrying value)December 31, 2023Industrial20.8 %Healthcare12.5 Information technology11.3 Consumer discretionary10.9 Consumer staples8.8 Other35.7 Total100.0 % Real estate limited partnerships by sector(% of carrying value)December 31, 2023Industrial28.8 %Residential19.1 Data centers19.0 Healthcare11.4 Consumer staples5.1 Other16.6 Total100.0 % Short-term investments of $5.14 billion primarily comprise money market funds, commercial paper, U.S. Treasury bills and other short-term investments, including securities lending collateral of $1.59 billion. Other investments primarily comprise $224 million of bank loans, $709 million of real estate, $119 million of policy loans and $1 million of derivatives as of December 31, 2023. For further detail on our use of derivatives, see Note 7 of the consolidated financial statements. Direct real estate investments by sector(% of carrying value)December 31, 2023Agriculture28.6 %Industrial23.7 Residential20.6 Retail18.5 Other8.6 Total100.0 % The Allstate Corporation 69 The Allstate Corporation 69 The Allstate Corporation 69 2023 Form 10-K Investments 2023 Form 10-K Investments Unrealized net capital gains (losses)As of December 31,($ in millions)20232022U.S. government and agencies$(5)$(225)Municipal(43)(290)Corporate(746)(2,299)Foreign government4 (40)ABS6 (31)Fixed income securities(784)(2,885)Short-term investments(1)(1)Derivatives(2)(3)Equity method of accounting (“EMA”) limited partnerships(4)2 Unrealized net capital gains and losses, pre-tax$(791)$(2,887)" }, { "status": "UNCHANGED", "current_title": "Fixed income securities by type", "prior_title": "Fixed income securities by type", "current_body": "Fixed income securities are rated by third-party credit rating agencies or are internally rated. The Securities Valuation Office (“SVO”) of the National Association of Insurance Commissioners (“NAIC”) evaluates the fixed income securities of insurers for regulatory reporting and capital assessment purposes. The NAIC assigns securities to one of six credit quality categories defined as “NAIC designations”. In general, securities with NAIC designations of 1 and 2 are considered investment grade and securities with NAIC designations of 3 through 6 are considered below investment grade. The rating is either received from the SVO based on availability of applicable ratings from rating agencies on the NAIC Nationally Recognized Statistical Rating Organizations provider list, including Moody’s Investors Service (“Moody’s”), S&P Global Ratings (“S&P”), Fitch Ratings (“Fitch”), or a comparable internal rating.As a result of time lags between the funding of investments, the finalization of legal documents, and the completion of the SVO filing process, the portfolio includes certain securities that have not yet been designated by the SVO as of each balance sheet date and the categorization of these securities is based on the expected ratings indicated by internal analysis.As of December 31, 2023, 91.5% of the consolidated fixed income securities portfolio was rated investment grade. Credit ratings below these designations are considered lower credit quality or below investment grade, which includes high yield bonds. Market prices for certain securities may have credit spreads which imply higher or lower credit quality than the current third-party rating. Our initial investment decisions and ongoing monitoring procedures for fixed income securities are based on a due diligence process which includes, but is not limited to, an assessment of the credit quality, sector, structure and liquidity risks of each issuer.Fixed income portfolio monitoring is a comprehensive process to identify and evaluate each fixed income security that may require a credit loss allowance. The process includes a quarterly review of all securities to identify instances where the fair value of a security compared to its amortized cost is below internally established thresholds. For further detail on Fixed income securities are rated by third-party credit rating agencies or are internally rated. The Securities Valuation Office (“SVO”) of the National Association of Insurance Commissioners (“NAIC”) evaluates the fixed income securities of insurers for regulatory reporting and capital assessment purposes. The NAIC assigns securities to one of six credit quality categories defined as “NAIC designations”. In general, securities with NAIC designations of 1 and 2 are considered investment grade and securities with NAIC designations of 3 through 6 are considered below investment grade. The rating is either received from the SVO based on availability of applicable ratings from rating agencies on the NAIC Nationally Recognized Statistical Rating Organizations provider list, including Moody’s Investors Service (“Moody’s”), S&P Global Ratings (“S&P”), Fitch Ratings (“Fitch”), or a comparable internal rating.As a result of time lags between the funding of investments, the finalization of legal documents, and the completion of the SVO filing process, the portfolio includes certain securities that have not yet been designated by the SVO as of each balance sheet date Fixed income securities are rated by third-party credit rating agencies or are internally rated. The Securities Valuation Office (“SVO”) of the National Association of Insurance Commissioners (“NAIC”) evaluates the fixed income securities of insurers for regulatory reporting and capital assessment purposes. The NAIC assigns securities to one of six credit quality categories defined as “NAIC designations”. In general, securities with NAIC designations of 1 and 2 are considered investment grade and securities with NAIC designations of 3 through 6 are considered below investment grade. The rating is either received from the SVO based on availability of applicable ratings from rating agencies on the NAIC Nationally Recognized Statistical Rating Organizations provider list, including Moody’s Investors Service (“Moody’s”), S&P Global Ratings (“S&P”), Fitch Ratings (“Fitch”), or a comparable internal rating. As a result of time lags between the funding of investments, the finalization of legal documents, and the completion of the SVO filing process, the portfolio includes certain securities that have not yet been designated by the SVO as of each balance sheet date and the categorization of these securities is based on the expected ratings indicated by internal analysis.As of December 31, 2023, 91.5% of the consolidated fixed income securities portfolio was rated investment grade. Credit ratings below these designations are considered lower credit quality or below investment grade, which includes high yield bonds. Market prices for certain securities may have credit spreads which imply higher or lower credit quality than the current third-party rating. Our initial investment decisions and ongoing monitoring procedures for fixed income securities are based on a due diligence process which includes, but is not limited to, an assessment of the credit quality, sector, structure and liquidity risks of each issuer.Fixed income portfolio monitoring is a comprehensive process to identify and evaluate each fixed income security that may require a credit loss allowance. The process includes a quarterly review of all securities to identify instances where the fair value of a security compared to its amortized cost is below internally established thresholds. For further detail on and the categorization of these securities is based on the expected ratings indicated by internal analysis. As of December 31, 2023, 91.5% of the consolidated fixed income securities portfolio was rated investment grade. Credit ratings below these designations are considered lower credit quality or below investment grade, which includes high yield bonds. Market prices for certain securities may have credit spreads which imply higher or lower credit quality than the current third-party rating. Our initial investment decisions and ongoing monitoring procedures for fixed income securities are based on a due diligence process which includes, but is not limited to, an assessment of the credit quality, sector, structure and liquidity risks of each issuer. Fixed income portfolio monitoring is a comprehensive process to identify and evaluate each fixed income security that may require a credit loss allowance. The process includes a quarterly review of all securities to identify instances where the fair value of a security compared to its amortized cost is below internally established thresholds. For further detail on The Allstate Corporation 67 The Allstate Corporation 67 The Allstate Corporation 67 2023 Form 10-K Investments 2023 Form 10-K Investments our fixed income portfolio monitoring process, see Note 5 of the consolidated financial statements.The following table presents total fixed income securities by the applicable NAIC designation and comparable S&P rating. our fixed income portfolio monitoring process, see Note 5 of the consolidated financial statements. our fixed income portfolio monitoring process, see Note 5 of the consolidated financial statements. The following table presents total fixed income securities by the applicable NAIC designation and comparable S&P rating. The following table presents total fixed income securities by the applicable NAIC designation and comparable S&P rating. Fair value and unrealized net capital gains (losses) for fixed income securities by credit ratingDecember 31, 2023NAIC 1NAIC 2NAIC 3A and aboveBBBBB($ in millions)FairvalueUnrealized gain (loss)FairvalueUnrealized gain (loss)FairvalueUnrealized gain (loss)U.S. government and agencies$8,619 $(5)$— $— $— $— Municipal5,963 (43)34 (1)7 — CorporatePublic7,019 (55)15,560 (392)611 (28)Privately placed1,651 (54)2,867 (92)1,890 (45)Total corporate8,670 (109)18,427 (484)2,501 (73)Foreign government1,289 4 1 — — — ABS1,669 (1)16 — 10 — Total fixed income securities$26,210 $(154)$18,478 $(485)$2,518 $(73)NAIC 4NAIC 5-6TotalBCCC and lowerFairvalueUnrealized gain (loss)FairvalueUnrealized gain (loss)FairvalueUnrealized gain (loss)U.S. government and agencies$— $— $— $— $8,619 $(5)Municipal— — 2 1 6,006 (43)CorporatePublic108 (3)— — 23,298 (478)Privately placed1,358 (59)141 (18)7,907 (268)Total corporate1,466 (62)141 (18)31,205 (746)Foreign government— — — — 1,290 4 ABS— — 50 7 1,745 6 Total fixed income securities$1,466 $(62)$193 $(10)$48,865 $(784)" }, { "status": "UNCHANGED", "current_title": "Michigan personal injury protection reserve and claim activity before and after the effects of MCCA recoverables", "prior_title": "Michigan personal injury protection reserve and claim activity before and after the effects of MCCA recoverables", "current_body": "Incurred claims and claims expense - current year Incurred claims and claims expense - prior years Claims and claims expense paid - current year (1) Claims and claims expense paid - prior years (1)" }, { "status": "UNCHANGED", "current_title": "Catastrophe management", "prior_title": "Catastrophe management", "current_body": "Historical catastrophe experience For the last ten years, the average annual impact of catastrophes on our loss ratio was 8.3 points, but it has varied from 5.7 points to 11.6 points. The average annual impact of catastrophes on the homeowners loss ratio for the last ten years was 27.1 points. Over time, we have limited our aggregate insurance exposure to catastrophe losses in certain regions of the country that are subject to high levels of natural catastrophes by our participation in various state facilities. For further discussion of these facilities, see Note 15 of the consolidated financial statements. However, the impact of these actions may be diminished by the growth in insured values, the effect of state insurance laws and regulations and we may not be able to maintain our current level of reinsurance or purchase new reinsurance protection in amounts we consider sufficient at acceptable prices. In addition, in various states we are required to participate in assigned risk plans, reinsurance facilities and joint underwriting associations that provide insurance coverage to individuals or entities that otherwise are unable to purchase such coverage from private insurers. Because of our participation in these and other state facilities such as wind pools, we may be exposed to losses that surpass the capitalization of these facilities and to assessments from these facilities. Historical catastrophe experience For the last ten years, the average annual impact of catastrophes on our loss ratio was 8.3 points, but it has varied from 5.7 points to 11.6 points. The average annual impact of catastrophes on the homeowners loss ratio for the last ten years was 27.1 points. Over time, we have limited our aggregate insurance exposure to catastrophe losses in certain regions of the country that are subject to high levels of natural catastrophes by our participation in various state facilities. For further discussion of these facilities, see Note 15 of the consolidated financial statements. However, the impact of these actions may be diminished by the growth in insured values, the effect of state insurance Historical catastrophe experience For the last ten years, the average annual impact of catastrophes on our loss ratio was 8.3 points, but it has varied from 5.7 points to 11.6 points. The average annual impact of catastrophes on the homeowners loss ratio for the last ten years was 27.1 points. Over time, we have limited our aggregate insurance exposure to catastrophe losses in certain regions of the country that are subject to high levels of natural catastrophes by our participation in various state facilities. For further discussion of these facilities, see Note 15 of the consolidated financial statements. However, the impact of these actions may be diminished by the growth in insured values, the effect of state insurance laws and regulations and we may not be able to maintain our current level of reinsurance or purchase new reinsurance protection in amounts we consider sufficient at acceptable prices. In addition, in various states we are required to participate in assigned risk plans, reinsurance facilities and joint underwriting associations that provide insurance coverage to individuals or entities that otherwise are unable to purchase such coverage from private insurers. Because of our participation in these and other state facilities such as wind pools, we may be exposed to losses that surpass the capitalization of these facilities and to assessments from these facilities. laws and regulations and we may not be able to maintain our current level of reinsurance or purchase new reinsurance protection in amounts we consider sufficient at acceptable prices. In addition, in various states we are required to participate in assigned risk plans, reinsurance facilities and joint underwriting associations that provide insurance coverage to individuals or entities that otherwise are unable to purchase such coverage from private insurers. Because of our participation in these and other state facilities such as wind pools, we may be exposed to losses that surpass the capitalization of these facilities and to assessments from these facilities. 48 www.allstate.com 48 www.allstate.com 48 www.allstate.com 2023 Form 10-K Allstate Protection 2023 Form 10-K Allstate Protection We have continued to take actions to maintain an appropriate level of exposure to catastrophic events while continuing to meet the needs of our customers, including the following:•Continuing to limit or not offer new homeowners, manufactured home and landlord package policy business in certain coastal geographies. Additionally, we:–Wrote a limited number of homeowners policies in select areas of California from 2016 to 2022, but are no longer writing new homeowners and condominium business in the state of California. We may take further action to reduce our exposure.–Reduced our exposure to high risk areas, including California and Florida. Since December 31, 2022, PIF has declined by an average of approximately 7% in those two states. –Write homeowners coverage, excluding in Florida, through our excess and surplus lines carrier, North Light Specialty Insurance Company (“North Light”), which includes earthquake coverage (other than fire following earthquakes) that is currently ceded via quota share reinsurance. •Increased capacity in our brokerage platform for customers not offered an Allstate policy. As of December 31, 2023, Ivantage had $2.19 billion non-proprietary premiums under management.•Ceded wind exposure related to insured property located in wind pool eligible areas in certain states.•Generally require higher deductibles for tropical cyclone than all peril deductibles and are in place for a large portion of coastal insured properties.•Include coverage for flood-related losses for auto comprehensive damage coverage since we have additional catastrophe exposure, beyond the property lines, for auto customers who have purchased comprehensive damage coverage. •Offer a homeowners policy in 43 states. Allstate House and Home® provides options of coverage for roof damage, including graduated coverage and pricing based on roof type and age. In 2023, premiums written totaled $6.84 billion or 54.3% of homeowners premiums written compared to $5.60 billion or 49.9% in 2022.Hurricanes We consider the greatest areas of potential catastrophe losses due to hurricanes to be major metropolitan centers in counties along the eastern and gulf coasts of the United States. The average premium on a property policy near these coasts is generally greater than in other areas. However, average premiums are often not considered commensurate with the inherent risk of loss. In addition, as explained in Note 15 of the consolidated financial statements, in various states Allstate is subject to assessments from assigned risk plans, reinsurance facilities and joint underwriting associations providing insurance for wind related property losses.We have addressed our risk of hurricane loss by, among other actions, purchasing reinsurance for specific states and on a countrywide basis for our personal lines property insurance in areas most exposed to hurricanes, limiting personal homeowners, landlord package policy and manufactured home new business writings in coastal areas in southern and eastern states, implementing tropical cyclone deductibles where appropriate, and not offering continuing coverage on certain policies in coastal counties in certain states. We continue to seek appropriate returns for the risks we write. This may require further actions, similar to those already taken, in geographies where we are not getting appropriate returns. However, we may maintain or opportunistically increase our presence in areas where adequate risk adjusted returns can be achieved.Earthquakes We do not offer earthquake coverage in most states. We retain approximately 25,000 PIF with earthquake coverage, with the largest number of policies located in Kentucky, due to regulatory and other reasons. We purchase reinsurance in Kentucky and enter into arrangements in many states to make earthquake coverage available through our brokerage platform. We continue to have exposure to earthquake risk on certain policies that do not specifically exclude coverage for earthquake losses, including our auto policies, and to fires following earthquakes. Allstate homeowner policyholders in California are offered coverage for damage caused by an earthquake through the California Earthquake Authority (“CEA”), a privately-financed, publicly-managed state agency created to provide insurance coverage for earthquake damage. Allstate is subject to assessments from the CEA under certain circumstances as explained in Note 15 of the consolidated financial statements. While North Light writes property policies in California, which can include earthquake coverage, this coverage is 100% ceded via quota share reinsurance. Fires following earthquakes Under a standard homeowners policy we cover fire losses, including those caused by an earthquake. Actions taken related to our risk of loss from fires following earthquakes include restrictive underwriting guidelines in California for new business writings, purchasing reinsurance for Kentucky personal lines property risks, and purchasing nationwide occurrence reinsurance, excluding Florida.Wildfires Actions taken related to managing our risk of loss from wildfires include purchasing nationwide occurrence reinsurance, new and renewal inspection programs to identify and remediate wildfire risk as well as leveraging contemporary underwriting tools in select areas. While these programs are designed to mitigate risk, the exposure to wildfires still exists. We continue to manage our exposure and seek appropriate returns for the risks we write.To manage the exposure, we may implement further actions, similar to those already taken, in geographies where we are not achieving appropriate returns. However, we may maintain or opportunistically We have continued to take actions to maintain an appropriate level of exposure to catastrophic events while continuing to meet the needs of our customers, including the following:•Continuing to limit or not offer new homeowners, manufactured home and landlord package policy business in certain coastal geographies. Additionally, we:–Wrote a limited number of homeowners policies in select areas of California from 2016 to 2022, but are no longer writing new homeowners and condominium business in the state of California. We may take further action to reduce our exposure.–Reduced our exposure to high risk areas, including California and Florida. Since December 31, 2022, PIF has declined by an average of approximately 7% in those two states. –Write homeowners coverage, excluding in Florida, through our excess and surplus lines carrier, North Light Specialty Insurance Company (“North Light”), which includes earthquake coverage (other than fire following earthquakes) that is currently ceded via quota share reinsurance. •Increased capacity in our brokerage platform for customers not offered an Allstate policy. As of December 31, 2023, Ivantage had $2.19 billion non-proprietary premiums under management.•Ceded wind exposure related to insured property located in wind pool eligible areas in certain states.•Generally require higher deductibles for tropical cyclone than all peril deductibles and are in place for a large portion of coastal insured properties.•Include coverage for flood-related losses for auto comprehensive damage coverage since we have additional catastrophe exposure, beyond the property lines, for auto customers who have purchased comprehensive damage coverage. •Offer a homeowners policy in 43 states. Allstate House and Home® provides options of coverage for roof damage, including graduated coverage and pricing based on roof type and age. In 2023, premiums written totaled $6.84 billion or 54.3% of homeowners premiums written compared to $5.60 billion or 49.9% in 2022.Hurricanes We consider the greatest areas of potential catastrophe losses due to hurricanes to be major metropolitan centers in counties along the eastern and gulf coasts of the United States. The average premium on a property policy near these coasts is generally greater than in other areas. However, average premiums are often not considered commensurate with the inherent risk of loss. In addition, as explained in Note 15 of the consolidated financial statements, in various states Allstate is subject to assessments from assigned risk plans, reinsurance facilities and joint underwriting associations providing insurance for wind related property losses. We have continued to take actions to maintain an appropriate level of exposure to catastrophic events while continuing to meet the needs of our customers, including the following: •Continuing to limit or not offer new homeowners, manufactured home and landlord package policy business in certain coastal geographies. Additionally, we: –Wrote a limited number of homeowners policies in select areas of California from 2016 to 2022, but are no longer writing new homeowners and condominium business in the state of California. We may take further action to reduce our exposure. –Reduced our exposure to high risk areas, including California and Florida. Since December 31, 2022, PIF has declined by an average of approximately 7% in those two states. –Write homeowners coverage, excluding in Florida, through our excess and surplus lines carrier, North Light Specialty Insurance Company (“North Light”), which includes earthquake coverage (other than fire following earthquakes) that is currently ceded via quota share reinsurance. •Increased capacity in our brokerage platform for customers not offered an Allstate policy. As of December 31, 2023, Ivantage had $2.19 billion non-proprietary premiums under management. •Ceded wind exposure related to insured property located in wind pool eligible areas in certain states. •Generally require higher deductibles for tropical cyclone than all peril deductibles and are in place for a large portion of coastal insured properties. •Include coverage for flood-related losses for auto comprehensive damage coverage since we have additional catastrophe exposure, beyond the property lines, for auto customers who have purchased comprehensive damage coverage. •Offer a homeowners policy in 43 states. Allstate House and Home® provides options of coverage for roof damage, including graduated coverage and pricing based on roof type and age. In 2023, premiums written totaled $6.84 billion or 54.3% of homeowners premiums written compared to $5.60 billion or 49.9% in 2022. Hurricanes We consider the greatest areas of potential catastrophe losses due to hurricanes to be major metropolitan centers in counties along the eastern and gulf coasts of the United States. The average premium on a property policy near these coasts is generally greater than in other areas. However, average premiums are often not considered commensurate with the inherent risk of loss. In addition, as explained in Note 15 of the consolidated financial statements, in various states Allstate is subject to assessments from assigned risk plans, reinsurance facilities and joint underwriting associations providing insurance for wind related property losses. We have addressed our risk of hurricane loss by, among other actions, purchasing reinsurance for specific states and on a countrywide basis for our personal lines property insurance in areas most exposed to hurricanes, limiting personal homeowners, landlord package policy and manufactured home new business writings in coastal areas in southern and eastern states, implementing tropical cyclone deductibles where appropriate, and not offering continuing coverage on certain policies in coastal counties in certain states. We continue to seek appropriate returns for the risks we write. This may require further actions, similar to those already taken, in geographies where we are not getting appropriate returns. However, we may maintain or opportunistically increase our presence in areas where adequate risk adjusted returns can be achieved.Earthquakes We do not offer earthquake coverage in most states. We retain approximately 25,000 PIF with earthquake coverage, with the largest number of policies located in Kentucky, due to regulatory and other reasons. We purchase reinsurance in Kentucky and enter into arrangements in many states to make earthquake coverage available through our brokerage platform. We continue to have exposure to earthquake risk on certain policies that do not specifically exclude coverage for earthquake losses, including our auto policies, and to fires following earthquakes. Allstate homeowner policyholders in California are offered coverage for damage caused by an earthquake through the California Earthquake Authority (“CEA”), a privately-financed, publicly-managed state agency created to provide insurance coverage for earthquake damage. Allstate is subject to assessments from the CEA under certain circumstances as explained in Note 15 of the consolidated financial statements. While North Light writes property policies in California, which can include earthquake coverage, this coverage is 100% ceded via quota share reinsurance. Fires following earthquakes Under a standard homeowners policy we cover fire losses, including those caused by an earthquake. Actions taken related to our risk of loss from fires following earthquakes include restrictive underwriting guidelines in California for new business writings, purchasing reinsurance for Kentucky personal lines property risks, and purchasing nationwide occurrence reinsurance, excluding Florida.Wildfires Actions taken related to managing our risk of loss from wildfires include purchasing nationwide occurrence reinsurance, new and renewal inspection programs to identify and remediate wildfire risk as well as leveraging contemporary underwriting tools in select areas. While these programs are designed to mitigate risk, the exposure to wildfires still exists. We continue to manage our exposure and seek appropriate returns for the risks we write.To manage the exposure, we may implement further actions, similar to those already taken, in geographies where we are not achieving appropriate returns. However, we may maintain or opportunistically We have addressed our risk of hurricane loss by, among other actions, purchasing reinsurance for specific states and on a countrywide basis for our personal lines property insurance in areas most exposed to hurricanes, limiting personal homeowners, landlord package policy and manufactured home new business writings in coastal areas in southern and eastern states, implementing tropical cyclone deductibles where appropriate, and not offering continuing coverage on certain policies in coastal counties in certain states. We continue to seek appropriate returns for the risks we write. This may require further actions, similar to those already taken, in geographies where we are not getting appropriate returns. However, we may maintain or opportunistically increase our presence in areas where adequate risk adjusted returns can be achieved. Earthquakes We do not offer earthquake coverage in most states. We retain approximately 25,000 PIF with earthquake coverage, with the largest number of policies located in Kentucky, due to regulatory and other reasons. We purchase reinsurance in Kentucky and enter into arrangements in many states to make earthquake coverage available through our brokerage platform. We continue to have exposure to earthquake risk on certain policies that do not specifically exclude coverage for earthquake losses, including our auto policies, and to fires following earthquakes. Allstate homeowner policyholders in California are offered coverage for damage caused by an earthquake through the California Earthquake Authority (“CEA”), a privately-financed, publicly-managed state agency created to provide insurance coverage for earthquake damage. Allstate is subject to assessments from the CEA under certain circumstances as explained in Note 15 of the consolidated financial statements. While North Light writes property policies in California, which can include earthquake coverage, this coverage is 100% ceded via quota share reinsurance. Fires following earthquakes Under a standard homeowners policy we cover fire losses, including those caused by an earthquake. Actions taken related to our risk of loss from fires following earthquakes include restrictive underwriting guidelines in California for new business writings, purchasing reinsurance for Kentucky personal lines property risks, and purchasing nationwide occurrence reinsurance, excluding Florida. Wildfires Actions taken related to managing our risk of loss from wildfires include purchasing nationwide occurrence reinsurance, new and renewal inspection programs to identify and remediate wildfire risk as well as leveraging contemporary underwriting tools in select areas. While these programs are designed to mitigate risk, the exposure to wildfires still exists. We continue to manage our exposure and seek appropriate returns for the risks we write. To manage the exposure, we may implement further actions, similar to those already taken, in geographies where we are not achieving appropriate returns. However, we may maintain or opportunistically The Allstate Corporation 49 The Allstate Corporation 49 The Allstate Corporation 49 2023 Form 10-K Allstate Protection 2023 Form 10-K Allstate Protection increase our presence in areas where adequate risk adjusted returns can be achieved.Catastrophe reinsurance The total cost of our property catastrophe reinsurance programs, excluding reinstatement premiums, during 2023 was $1.02 billion compared to $788 million during 2022. Catastrophe placement premiums are a reduction of premium with approximately 74% related to homeowners. The increases were driven by higher Nationwide program costs. A description of our current catastrophe reinsurance program appears in Note 11 of the consolidated financial statements.Expense ratio decreased 2.0 points in 2023 compared to 2022, primarily due to higher earned premium growth relative to fixed costs and lower advertising costs, partially offset by higher restructuring costs. increase our presence in areas where adequate risk adjusted returns can be achieved.Catastrophe reinsurance The total cost of our property catastrophe reinsurance programs, excluding reinstatement premiums, during 2023 was $1.02 billion compared to $788 million during 2022. Catastrophe placement premiums are a reduction of premium with approximately 74% related to homeowners. The increases were driven by higher Nationwide program increase our presence in areas where adequate risk adjusted returns can be achieved. Catastrophe reinsurance The total cost of our property catastrophe reinsurance programs, excluding reinstatement premiums, during 2023 was $1.02 billion compared to $788 million during 2022. Catastrophe placement premiums are a reduction of premium with approximately 74% related to homeowners. The increases were driven by higher Nationwide program costs. A description of our current catastrophe reinsurance program appears in Note 11 of the consolidated financial statements.Expense ratio decreased 2.0 points in 2023 compared to 2022, primarily due to higher earned premium growth relative to fixed costs and lower advertising costs, partially offset by higher restructuring costs. costs. A description of our current catastrophe reinsurance program appears in Note 11 of the consolidated financial statements. Expense ratio decreased 2.0 points in 2023 compared to 2022, primarily due to higher earned premium growth relative to fixed costs and lower advertising costs, partially offset by higher restructuring costs. Impact of specific costs and expenses on the expense ratioFor the years ended December 31,($ in millions, except ratios)2023202220212023 vs 20222022 vs 2021Amortization of DAC$6,070 $5,570 $5,313 $500 $257 Advertising expense638 934 1,249 (296)(315)Amortization of purchased intangibles235 240 241 (5)(1)Other costs and expenses, net of other revenue3,068 3,296 2,952 (228)344 Restructuring and related charges142 44 145 98 (101)Shelter-in-Place Payback expense— — 29 — (29)Allstate Special Payment plan bad debt expense— — (20)— 20 Total underwriting expenses$10,153 $10,084 $9,909 $69 $175 Premiums earned$48,427 $43,909 $40,454 $4,518 $3,455 Expense ratioAmortization of DAC12.5 12.7 13.1 (0.2)(0.4)Advertising expense1.3 2.2 3.1 (0.9)(0.9)Other costs and expenses6.4 7.5 7.2 (1.1)0.3 Subtotal20.2 22.4 23.4 (2.2)(1.0)Amortization of purchased intangibles0.5 0.5 0.6 — (0.1)Restructuring and related charges0.3 0.1 0.4 0.2 (0.3)Shelter-in-Place Payback expense— — 0.1 — (0.1)Allstate Special Payment plan bad debt expense— — — — — Total expense ratio21.0 23.0 24.5 (2.0)(1.5)" }, { "status": "UNCHANGED", "current_title": "2023 Highlights", "prior_title": "2022 Highlights", "current_body": "OverviewThe following discussion highlights significant factors influencing the consolidated financial position and results of operations of The Allstate Corporation (referred to in this document as “we,” “our,” “us,” the “Company” or “Allstate”). It should be read in conjunction with the consolidated financial statements and related notes found under Item 8. contained herein.A discussion of strategy, including updates to the multi-year Transformative Growth initiative, can be found in Part 1, Item 1. Business.This section of this Form 10-K generally discusses 2023 and 2022 results and year-to-year comparisons between 2023 and 2022. Discussions of 2021 results and year-to-year comparisons between 2022 and 2021 that are not included in this Form 10-K can be found in Management’s Discussion and Analysis (“MD&A”) in Part II, Item 7 of our annual report on Form 10-K for 2022, filed February 16, 2023. Certain amounts have been reclassified or recast to reflect the application of the new guidance to all in-scope long-duration insurance contracts and to conform to current year presentation.The most important factors we monitor to evaluate the financial condition and performance for our reportable segments and the Company include:•Allstate Protection: premium, policies in force (“PIF”), new business sales, policy retention, price changes, claim frequency and severity, catastrophes, loss ratio, expenses, underwriting results and combined ratio•Protection Services: revenues, premium written, PIF and adjusted net income•Allstate Health and Benefits: premiums, other revenue, new business sales, PIF, benefit ratio, expenses and adjusted net income•Investments: exposure to market risk, asset allocation, credit quality, total return, net investment income, cash flows, net gains and losses on investments and derivatives, unrealized capital gains and losses, long-term returns and asset duration•Financial condition: liquidity, parent holding company deployable assets, financial strength ratings, operating leverage, debt levels, book value per share and return on equityMeasuring segment profit or lossThe measure of segment profit or loss used in evaluating performance is underwriting income for the Allstate Protection and Run-off Property-Liability segments and adjusted net income for the Protection Services, Allstate Health and Benefits, and Corporate and Other segments. Underwriting income is calculated as premiums earned and other revenue, less claims and claims expense (“losses”), Shelter-in-Place Payback expense, amortization of deferred policy acquisition costs (“DAC”), operating costs and expenses, amortization or impairment of purchased intangibles, and restructuring and related charges, as determined using accounting principles generally accepted in the United States of America (“GAAP”). We use this measure in our evaluation of results of operations to analyze profitability. 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 OverviewThe following discussion highlights significant factors influencing the consolidated financial position and results of operations of The Allstate Corporation (referred to in this document as “we,” “our,” “us,” the “Company” or “Allstate”). It should be read in conjunction with the consolidated financial statements and related notes found under Item 8. contained herein.A discussion of strategy, including updates to the multi-year Transformative Growth initiative, can be found in Part 1, Item 1. Business.This section of this Form 10-K generally discusses 2023 and 2022 results and year-to-year comparisons between 2023 and 2022. Discussions of 2021 results and year-to-year comparisons between 2022 and 2021 that are not included in this Form 10-K can be found in Management’s Discussion and Analysis (“MD&A”) in Part II, Item 7 of our annual report on Form 10-K for 2022, filed February 16, 2023. Certain amounts have been reclassified or recast to reflect the application of the new guidance to all in-scope long-duration insurance contracts and to conform to current year presentation.The most important factors we monitor to evaluate the financial condition and performance for our reportable segments and the Company include:•Allstate Protection: premium, policies in force (“PIF”), new business sales, policy retention, price changes, claim frequency and severity, catastrophes, loss ratio, expenses, underwriting results and combined ratio•Protection Services: revenues, premium written, PIF and adjusted net income•Allstate Health and Benefits: premiums, other revenue, new business sales, PIF, benefit ratio, expenses and adjusted net income•Investments: exposure to market risk, asset allocation, credit quality, total return, net investment income, cash flows, net gains and losses on investments and derivatives, unrealized capital gains and losses, long-term returns and asset duration•Financial condition: liquidity, parent holding company deployable assets, financial strength ratings, operating leverage, debt levels, book value per share and return on equity Overview The following discussion highlights significant factors influencing the consolidated financial position and results of operations of The Allstate Corporation (referred to in this document as “we,” “our,” “us,” the “Company” or “Allstate”). It should be read in conjunction with the consolidated financial statements and related notes found under Item 8. contained herein. A discussion of strategy, including updates to the multi-year Transformative Growth initiative, can be found in Part 1, Item 1. Business. This section of this Form 10-K generally discusses 2023 and 2022 results and year-to-year comparisons between 2023 and 2022. Discussions of 2021 results and year-to-year comparisons between 2022 and 2021 that are not included in this Form 10-K can be found in Management’s Discussion and Analysis (“MD&A”) in Part II, Item 7 of our annual report on Form 10-K for 2022, filed February 16, 2023. Certain amounts have been reclassified or recast to reflect the application of the new guidance to all in-scope long-duration insurance contracts and to conform to current year presentation. The most important factors we monitor to evaluate the financial condition and performance for our reportable segments and the Company include: •Allstate Protection: premium, policies in force (“PIF”), new business sales, policy retention, price changes, claim frequency and severity, catastrophes, loss ratio, expenses, underwriting results and combined ratio •Protection Services: revenues, premium written, PIF and adjusted net income •Allstate Health and Benefits: premiums, other revenue, new business sales, PIF, benefit ratio, expenses and adjusted net income •Investments: exposure to market risk, asset allocation, credit quality, total return, net investment income, cash flows, net gains and losses on investments and derivatives, unrealized capital gains and losses, long-term returns and asset duration •Financial condition: liquidity, parent holding company deployable assets, financial strength ratings, operating leverage, debt levels, book value per share and return on equity Measuring segment profit or lossThe measure of segment profit or loss used in evaluating performance is underwriting income for the Allstate Protection and Run-off Property-Liability segments and adjusted net income for the Protection Services, Allstate Health and Benefits, and Corporate and Other segments. Underwriting income is calculated as premiums earned and other revenue, less claims and claims expense (“losses”), Shelter-in-Place Payback expense, amortization of deferred policy acquisition costs (“DAC”), operating costs and expenses, amortization or impairment of purchased intangibles, and restructuring and related charges, as determined using accounting principles generally accepted in the United States of America (“GAAP”). We use this measure in our evaluation of results of operations to analyze profitability. 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" } ] }