Allstate Corporation: 10-K Risk Factor Changes

Macroeconomic factors have and may continue to impact the results of our operations, financial condition and liquidity, such as U.S. government fiscal and monetary policies, the Russia/Ukraine conflict, supply chain disruptions and labor shortages. These factors 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 “Widespread disruptive or destabilizing events may have an adverse effect on our business” and “Conditions in the global economy and capital markets could adversely affect the business and results of operations”. Tariffs Beginning on April 2, 2025, the U.S. government announced additional tariffs on goods imported to the U.S. We regularly evaluate scenarios to understand the potential impact of tariffs on our businesses and incorporate estimates of the impact into our development of reserves for claims. The evolving and uncertain global trade environment makes it difficult to predict the full effect on our business and it may take time for the impact of inflation to become evident. The following factors may impact operations at levels beyond what we are currently observing: •Higher new and used vehicle pricing and replacement parts, increasing claims costs in Allstate Protection and Dealer Services The Allstate Corporation 35 The Allstate Corporation 35 The Allstate Corporation 35 2025 Form 10-K 2025 Form 10-K •Increases in building material costs, driving increases in homeowners claim costs•Lack of availability of replacement parts from disruption in global trade broadly impacting all businesses•Fewer auto new issued applications due to lower new and used vehicle sales•Reduced demand in Dealer Services due to lower new vehicle sales•Lower premiums written from reduced U.S. retail sales in Protection Plans•Higher claims costs at Protection Plans•Bad debt and credit allowance exposure in all businesses•Adverse impacts on investment valuations and liquidity for market-based and performance-based investmentsThis is not inclusive of all potential impacts and should not be treated as such.Dispositions On April 1, 2025, we closed the sale of American Heritage Life Insurance Company and American Heritage Service Company, comprising our employer voluntary benefits business. We recorded a gain on the sale of $888 million or $641 million, after-tax for the year ended December 31, 2025.On July 1, 2025, we closed the sale of Direct General Life Insurance Company, NSM Sales Corporation and The Association Benefits Solution, LLC, comprising the group health business. We recorded a gain on sale of $715 million or $499 million, after-tax for the year ended December 31, 2025.See Note 4 of the consolidated financial statements for further information on the EVB and group health dispositions. •Increases in building material costs, driving increases in homeowners claim costs•Lack of availability of replacement parts from disruption in global trade broadly impacting all businesses•Fewer auto new issued applications due to lower new and used vehicle sales•Reduced demand in Dealer Services due to lower new vehicle sales•Lower premiums written from reduced U.S. retail sales in Protection Plans•Higher claims costs at Protection Plans•Bad debt and credit allowance exposure in all businesses•Adverse impacts on investment valuations and liquidity for market-based and performance-based investmentsThis is not inclusive of all potential impacts and should not be treated as such. •Increases in building material costs, driving increases in homeowners claim costs •Lack of availability of replacement parts from disruption in global trade broadly impacting all businesses •Fewer auto new issued applications due to lower new and used vehicle sales •Reduced demand in Dealer Services due to lower new vehicle sales •Lower premiums written from reduced U.S. retail sales in Protection Plans •Higher claims costs at Protection Plans •Bad debt and credit allowance exposure in all businesses •Adverse impacts on investment valuations and liquidity for market-based and performance-based investments This is not inclusive of all potential impacts and should not be treated as such. Dispositions On April 1, 2025, we closed the sale of American Heritage Life Insurance Company and American Heritage Service Company, comprising our employer voluntary benefits business. We recorded a gain on the sale of $888 million or $641 million, after-tax for the year ended December 31, 2025.On July 1, 2025, we closed the sale of Direct General Life Insurance Company, NSM Sales Corporation and The Association Benefits Solution, LLC, comprising the group health business. We recorded a gain on sale of $715 million or $499 million, after-tax for the year ended December 31, 2025.See Note 4 of the consolidated financial statements for further information on the EVB and group health dispositions.