6 unchanged sentences
The segments are consistent with the way in which the chief operating decision maker reviews financial performance and makes decisions about the allocation of resources.
+Added: Subsequent event
+Added: 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.
+Added: $16 million of the gain will be classified in Property-Liability net gains and losses on investments and derivatives and $83 million will be classified as other income within the Corporate and Other segment, but excluded from adjusted net income, the measure of segment profit or loss.
+Added: The sale will reduce real estate expenses and further advance Allstate’s multi-year Transformative Growth initiative.
The Novel Coronavirus Pandemic or COVID-19 (“Coronavirus”)
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.
−Removed: These measures have moderated, but there is no way of predicting with certainty how long the pandemic might last.
+Added: 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.
2 unchanged sentences
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.
−Removed: Total auto claim frequency has increased through the first six months of 2022 and during 2021, but remains below pre-pandemic levels.
+Added: Total auto claim frequency has increased through the first nine months of 2022 and during 2021, but remains below pre-pandemic levels.
The Coronavirus has affected our operations and may continue to significantly affect our results of operations, financial condition and liquidity.
1 unchanged sentence
• Sales of new and retention of existing policies
−Removed: • Rate increases and average gross premiums
+Added: • Rate changes and average gross premiums
• Supply chain disruptions and labor shortages increasing the cost of settling claims
10 unchanged sentences
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.
−Removed: Allstate does not have operations or direct investments in Russia, Belarus or Ukraine.
−Removed: The conflict is evolving, but we have not experienced significant impacts to date on our investment portfolio, financial position, or results of operations.
+Added: 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.
Corporate Strategy
10 unchanged sentences
• Enhancing organizational capabilities
−Removed: The protection businesses are being expanded by leveraging enterprise capabilities and resources such as distribution, brand, analytics, claims, investment expertise, talent and capital.
+Added: 46 www.allstate.com
+Added: Protection services businesses are being expanded by leveraging enterprise capabilities and resources such as distribution, brand, analytics, claims, investment expertise, talent and capital.
Acquisitions and Dispositions
2 unchanged sentences
The transaction increased our market share in personal property-liability by over one percentage point and enhanced our independent agent-facing technology.
−Removed: Second Quarter 2022 Form 10-Q 45
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 $400 million.
14 unchanged sentences
• Income tax expense or benefit on reconciling items
−Removed: 46 www.allstate.com
+Added: Third Quarter 2022 Form 10-Q 47
Consolidated net income
($ in millions)
−Removed: Consolidated net loss applicable to common shareholders was $1.04 billion and $412 million in the second quarter and first six months of 2022, respectively, compared to income of $1.60 billion and $187 million in the second quarter and first six months of 2021 primarily due to higher non-catastrophe losses and equity valuation decreases, partially offset by increased Property-Liability premiums earned and the loss from discontinued operations in the first six months of 2021.
−Removed: For the twelve months ended June 30, 2022, return on Allstate common shareholders’ equity was 4.0%, a decrease of 11.3 points from 15.3% for the twelve months ended June 30, 2021.
+Added: Consolidated net loss applicable to common shareholders was $694 million and $1.11 billion in the third quarter and first nine months of 2022, respectively, compared to income of $508 million and $695 million in the third quarter and first nine months of 2021, respectively, primarily due to higher losses, excluding catastrophes, and equity valuation decreases, partially offset by increased Property-Liability premiums earned and the loss on the sale of the life and annuities business in the first nine months of 2021.
+Added: For the twelve months ended September 30, 2022, return on Allstate common shareholders’ equity was (1.6)%, a decrease of 14.8% from 13.2% for the twelve months ended September 30, 2021.
Total revenue
($ in millions)
−Removed: Total revenue decreased 3.4% to $12.22 billion and decreased 2.2% to $24.56 billion in the second quarter and first six months of 2022, respectively, compared to the same periods of 2021, driven by net losses on investments and derivatives in 2022 compared to net gains in 2021 and decreases in net investment income, partially offset by 8.8% and 7.7% increases in property and casualty insurance premiums earned in the second quarter and first six months of 2022, respectively.
+Added: Total revenue increased 5.8% to $13.21 billion and increased 0.5% to $37.77 billion in the third quarter and first nine months of 2022, respectively, compared to the same periods of 2021.
+Added: The increase in both periods is due to increases of 9.9% and 8.4% in property and casualty insurance premiums earned in the third quarter and first nine months of 2022, respectively, partially offset by net losses on investments and derivatives in 2022 compared to net gains in 2021 and decreases in net investment income.
Insurance premiums earned increased for Property-Liability and Protection Services.
1 unchanged sentence
($ in millions)
−Removed: Net investment income decreased $412 million to $562 million in the second quarter of 2022 and decreased $526 million to $1.16 billion in the first six months of 2022 compared to the same periods of 2021.
−Removed: The decrease in both periods was primarily due to lower performance-based investment results, mainly from limited partnerships.
−Removed: The decrease in the second quarter was slightly offset by higher market-based fixed income portfolio yields.
−Removed: Second Quarter 2022 Form 10-Q 47
+Added: Net investment income decreased $74 million to $690 million in the third quarter of 2022 and decreased $600 million to $1.85 billion in the first nine months of 2022 compared to the same periods of 2021.
+Added: The decrease in both periods was primarily due to lower performance-based investment results, mainly from limited partnerships, partially offset by higher market-based fixed income portfolio yields.
+Added: 48 www.allstate.com
Financial highlights
−Removed: Investments totaled $61.06 billion as of June 30, 2022, decreasing from $64.70 billion as of December 31, 2021.
−Removed: Allstate shareholders’ equity As of June 30, 2022, Allstate shareholders’ equity was $20.12 billion.
−Removed: Book value per common share (ratio of Allstate common shareholders’ equity to total common shares outstanding and dilutive potential common shares outstanding) was $66.15, a decrease of 23.4% from $86.33 as of June 30, 2021, and a decrease of 18.9% from $81.52 as of December 31, 2021.
−Removed: Return on average Allstate common shareholders’ equity For the twelve months ended June 30, 2022, return on Allstate common shareholders’ equity was 4.0%, a decrease of 11.3 points from 15.3% for the twelve months ended June 30, 2021.
−Removed: The decrease was primarily due to lower net income applicable to common shareholders for the trailing twelve-month period ending June 30, 2022.
−Removed: Pension and other postretirement remeasurement gains and losses We recorded pension and other postretirement remeasurement losses of $259 million and $12 million in the second quarter and first six months of 2022, respectively, primarily related to unfavorable asset performance compared to expected return on plan assets, partially offset by a reduction in the projected benefit obligation due to an increase in the liability discount rate and changes in other assumptions.
+Added: Investments totaled $61.01 billion as of September 30, 2022, decreasing from $64.70 billion as of December 31, 2021.
+Added: Allstate shareholders’ equity As of September 30, 2022, Allstate shareholders’ equity was $17.67 billion.
+Added: Book value per common share (ratio of Allstate common shareholders’ equity to total common shares outstanding and dilutive potential common shares outstanding) was $58.35, a decrease of 31.0% from $84.62 as of September 30, 2021, and a decrease of 28.4% from $81.52 as of December 31, 2021.
+Added: Return on average Allstate common shareholders’ equity For the twelve months ended September 30, 2022, return on Allstate common shareholders’ equity was (1.6)%, a decrease of 14.8 points from 13.2% for the twelve months ended September 30, 2021.
+Added: The decrease was primarily due to lower net income applicable to common shareholders for the trailing twelve-month period ending September 30, 2022.
+Added: Pension and other postretirement remeasurement gains and losses We recorded pension and other postretirement remeasurement losses of $79 million in the third quarter of 2022, primarily related to unfavorable asset performance compared to expected return on plan assets, partially offset by a reduction in the projected benefit obligation due to an increase in the liability discount rate.
+Added: We recorded losses of $91 million in the first nine months of 2022, primarily related to unfavorable asset performance compared to expected return on plan assets, partially offset by a reduction in the projected benefit obligation due to an increase in the liability discount rate and changes in other assumptions, primarily related to an increase in the long-term lump sum interest rate.
Summarized consolidated financial results
−Removed: Three months ended June 30, Six months ended June 30,
+Added: Three months ended September 30, Nine months ended September 30,
($ in millions) 2022 2021 2022 2021
19 unchanged sentences
Net (loss) income (683) 531 (1,061) 775
−Removed: Net (loss) income attributable to noncontrolling interest (9) 6 (19) —
+Added: Net loss attributable to noncontrolling interest (15) (7) (34) (7)
Net (loss) income attributable to Allstate (668) 538 (1,027) 782
1 unchanged sentence
Net (loss) income applicable to common shareholders $ (694) $ 508 $ (1,106) $ 695
−Removed: 48 www.allstate.com
+Added: Third Quarter 2022 Form 10-Q 49
Segment highlights
−Removed: Allstate Protection underwriting loss was $861 million in the second quarter of 2022, compared to underwriting income of $431 million in the second quarter of 2021.
−Removed: Underwriting loss totaled $579 million in the first six months of 2022 compared to underwriting income of $2.09 billion in the first six months of 2021.
−Removed: The decrease in both periods was primarily due to higher non-catastrophe losses, primarily in auto, and unfavorable non-catastrophe reserve reestimates, partially offset by increased premiums.
−Removed: We are executing a comprehensive plan to improve profitability, including broadly raising auto and home insurance rates, reducing expenses, advertising and growth investments, implementing underwriting restrictions in underperforming states and executing claims operating actions to manage loss costs.
−Removed: Catastrophe losses were $1.11 billion and $1.57 billion in the second quarter and first six months of 2022, respectively, compared to $952 million and $1.54 billion in the second quarter and first six months of 2021, respectively.
−Removed: Premiums written increased 11.5% to $11.51 billion and 10.8% to $22.27 billion in the second quarter and first six months of 2022, respectively, compared to the same periods of 2021, reflecting higher premiums in both Allstate and National General brands.
−Removed: Protection Services adjusted net income was $43 million in the second quarter of 2022 compared to $56 million in the second quarter of 2021.
−Removed: Adjusted net income was $96 million in the first six months of 2022 compared to $105 million in the first six months of 2021.
−Removed: The decrease in both periods was due to investments in geographic and product expansion at Allstate Protection Plans and increased severity at Allstate Roadside.
−Removed: Premiums and other revenue increased 10.7% or $56 million in the second quarter of 2022 and 12.9% or $132 million in the first six months of 2022 compared to the same periods of 2021, primarily due to Allstate Protection Plans.
−Removed: Allstate Health and Benefits adjusted net income was $65 million in the second quarter of 2022 compared to $62 million in the second quarter 2021, primarily due to an increase in group health revenues, partially offset by an increase in individual health claims.
−Removed: Adjusted net income was $118 million in the first six months of 2022 compared to $127 million in the first six months of 2021, primarily due to increases in individual and group health claims, partially offset by lower employer voluntary benefits claim utilization.
−Removed: Premiums and contract charges increased 4.3% to $466 million in the second quarter of 2022 and 3.7% to $935 million in the first six months of 2022 compared to the same periods of 2021, primarily due to growth in individual and group health.
−Removed: Second Quarter 2022 Form 10-Q 49
+Added: Allstate Protection underwriting loss was $1.17 billion in the third quarter of 2022 compared to underwriting loss of $421 million in the third quarter of 2021.
+Added: Underwriting loss totaled $1.75 billion in the first nine months of 2022 compared to underwriting income of $1.67 billion in the first nine months of 2021.
+Added: The decrease in both periods was primarily due to higher losses and unfavorable reserve reestimates, both excluding catastrophes, primarily for auto insurance, partially offset by increased premiums.
+Added: We are executing a comprehensive plan to improve 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.
+Added: At this time, we will no longer write new homeowners and condominium business in the state of California, although we will offer continuing coverage to existing customers.
+Added: Additional actions are likely in personal auto insurance.
+Added: Commercial insurance is being exited in five states and coverage to transportation network companies will not be offered unless it utilizes telematics-based pricing.
+Added: We expect these actions will negatively impact premiums starting in the fourth quarter.
+Added: Catastrophe losses were $763 million and $2.33 billion in the third quarter and first nine months of 2022, respectively, compared to $1.27 billion and $2.81 billion in the third quarter and first nine months of 2021, respectively.
+Added: Premiums written increased 9.8% to $12.04 billion and 10.5% to $34.31 billion in the third quarter and first nine months of 2022, respectively, compared to the same periods of 2021, reflecting higher premiums in both Allstate and National General brands.
+Added: Protection Services adjusted net income was $35 million in the third quarter of 2022 compared to $45 million in the third quarter of 2021, primarily due to a prior year restructuring benefit and higher current year technology expenses at Allstate Identity Protection.
+Added: Adjusted net income was $131 million in the first nine months of 2022 compared to $150 million in the first nine months of 2021, primarily related to investments in growth at Allstate Protection Plans and lower revenue at Arity.
+Added: Premiums and other revenue increased 8.7% or $47 million in the third quarter of 2022 and 11.4% or $179 million in the first nine months of 2022 compared to the same periods of 2021, primarily due to Allstate Protection Plans.
+Added: Allstate Health and Benefits adjusted net income was $54 million in the third quarter of 2022 compared to $33 million in the third quarter 2021, primarily due to lower individual health and employer voluntary benefits claims as well as lower restructuring charges compared to the prior year quarter.
+Added: Adjusted net income was $172 million in the first nine months of 2022 compared to $160 million in the first nine months of 2021, primarily due to increases in group health and employer voluntary benefits revenues, partially offset by higher group and individual health claims utilization.
+Added: Premiums and contract charges increased 0.7% to $463 million in the third quarter of 2022 and 2.6% to $1.40 billion in the first nine months of 2022 compared to the same periods of 2021, primarily due to growth in group health and employer voluntary benefits.
+Added: 50 www.allstate.com
Property-Liability Operations
25 unchanged sentences
policy counts are based on items rather than customers.
−Removed: A multi-car customer would generate multiple item (policy) counts, even if all cars were
−Removed: insured under one policy.
+Added: 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.
17 unchanged sentences
Report year incurred claim severity does not include incurred but not reported (“IBNR”) losses or benefits from subrogation and salvage.
−Removed: • Paid claim severity is calculated by dividing the sum of paid losses and loss expenses by claims closed with a payment during the period.
−Removed: • Percent change in frequency or paid claim severity statistics is calculated as the amount of increase or decrease in gross claim frequency or paid claim
−Removed: 50 www.allstate.com
+Added: Third Quarter 2022 Form 10-Q 51
Property-Liability Operations
−Removed: 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.
−Removed: • Percent change in report year incurred claim severity statistic is calculated as the amount of
−Removed: increase or decrease in report year incurred claim severity recorded in the year-to-date period divided by the current estimate of the prior report year incurred claim severity.
+Added: • Paid claim severity is calculated by dividing the sum of paid losses and loss expenses by claims closed with a payment during the period.
+Added: • 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.
+Added: • 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 year-to-date period divided by the current estimate of the prior report year incurred claim severity.
Underwriting results
−Removed: Three months ended June 30, Six months ended June 30,
+Added: Three months ended September 30, Nine months ended September 30,
($ in millions, except ratios) 2022 2021 2022 2021
28 unchanged sentences
Effect of restructuring and related charges on combined ratio (1)
+Added: 0.1 0.1 0.1 0.4
Effect of amortization of purchased intangibles on combined ratio 0.6 0.8 0.5 0.5
1 unchanged sentence
Effect of Run-off Property-Liability business on combined ratio 1.1 1.2 0.4 0.4
−Removed: (1) Restructuring and related charges for the second quarter and first six months of 2022 primarily related to future work environment.
+Added: (1) Restructuring and related charges for the third quarter and first nine months of 2022 primarily related to future work environment and employee costs.
See Note 11 of the condensed consolidated financial statements for additional details.
1 unchanged sentence
(3) Other revenue is deducted from operating costs and expenses in the expense ratio calculation.
−Removed: Second Quarter 2022 Form 10-Q 51
−Removed: Segment Results Allstate Protection
+Added: 52 www.allstate.com
+Added: Allstate Protection Segment Results
Allstate Protection Segment
Underwriting results
−Removed: Three months ended June 30, Six months ended June 30,
+Added: Three months ended September 30, Nine months ended September 30,
($ in millions) 2022 2021 2022 2021
10 unchanged sentences
Catastrophe losses $ 763 $ 1,269 $ 2,333 $ 2,811
−Removed: Underwriting loss was $861 million and $579 million in the second quarter and first six months of 2022, respectively, compared to underwriting income of $431 million and $2.09 billion in the second quarter and first six months of 2021, respectively, primarily due to higher non-catastrophe losses, primarily in auto, and unfavorable non-catastrophe reserve reestimates, partially offset by increased premiums.
−Removed: We are executing a comprehensive plan to improve profitability, including broadly raising auto and home insurance rates, reducing expenses, advertising and growth investments, implementing underwriting restrictions in underperforming states and executing claims operating actions to manage loss costs.
−Removed: Change in underwriting results from the prior period - three months ended
+Added: Underwriting loss was $1.17 billion in the third quarter of 2022 compared to underwriting loss of $421 million in the third quarter of 2021.
+Added: Underwriting loss totaled $1.75 billion in first nine months of 2022 compared to underwriting income of $1.67 billion in the first nine months of 2021.
+Added: The decrease in both periods was primarily due to higher losses and unfavorable reserve reestimates, both excluding catastrophes, primarily for auto insurance, partially offset by increased premiums.
+Added: We are executing a comprehensive plan to improve profitability, including broadly raising rates, reducing operating expenses and advertising, implementing underwriting restrictions in underperforming states and executing claims operating actions to manage loss costs.
+Added: Change in underwriting results from prior year period - three months ended
($ in millions)
−Removed: Change in underwriting results from the prior period - six months ended
+Added: Change in underwriting results from prior year period - nine months ended
($ in millions)
−Removed: 52 www.allstate.com
−Removed: Allstate Protection Segment Results
+Added: Third Quarter 2022 Form 10-Q 53
+Added: Segment Results Allstate Protection
Underwriting income (loss) by brand and by line of business
1 unchanged sentence
($ in millions) 2022 2021 2022 2021 2022 2021
−Removed: Three months ended June 30,
+Added: Three months ended September 30,
$ (1,222) $ (123) $ (93) $ (36) $ (1,315) $ (159)
9 unchanged sentences
Total $ (1,049) $ (311) $ (124) $ (112) $ (1,170) $ (421)
−Removed: Six months ended June 30,
+Added: Nine months ended September 30,
$ (1,937) $ 1,444 $ (103) $ 118 $ (2,040) $ 1,562
17 unchanged sentences
($ in millions) 2022 2021 2022 2021 2022 2021
−Removed: Three months ended June 30,
+Added: Three months ended September 30,
Auto $ 6,704 $ 6,153 $ 1,156 $ 1,018 $ 7,860 $ 7,171
3 unchanged sentences
Total premiums written $ 10,304 $ 9,355 $ 1,733 $ 1,611 $ 12,037 $ 10,966
−Removed: Six months ended June 30,
+Added: Nine months ended September 30,
Auto $ 19,386 $ 18,165 $ 3,506 $ 2,836 $ 22,892 $ 21,001
3 unchanged sentences
Total premiums written $ 29,201 $ 26,784 $ 5,106 $ 4,273 $ 34,307 $ 31,057
−Removed: Second Quarter 2022 Form 10-Q 53
−Removed: Segment Results Allstate Protection
+Added: 54 www.allstate.com
+Added: Allstate Protection Segment Results
Premiums earned by brand and by line of business
1 unchanged sentence
($ in millions) 2022 2021 2022 2021 2022 2021
−Removed: Three months ended June 30,
+Added: Three months ended September 30,
Auto $ 6,416 $ 6,009 $ 1,129 $ 903 $ 7,545 $ 6,912
3 unchanged sentences
Total premiums earned $ 9,517 $ 8,774 $ 1,640 $ 1,385 $ 11,157 $ 10,159
−Removed: Six months ended June 30,
+Added: Nine months ended September 30,
Auto $ 18,742 $ 18,059 $ 3,232 $ 2,545 $ 21,974 $ 20,604
4 unchanged sentences
Reconciliation of premiums written to premiums earned
−Removed: Three months ended June 30, Six months ended June 30,
+Added: Three months ended September 30, Nine months ended September 30,
($ in millions) 2022 2021 2022 2021
12 unchanged sentences
Total 33,293 33,219 5,315 4,740 38,608 37,959
−Removed: Auto insurance premiums written increased 9.6% or $652 million in the second quarter of 2022 compared to the second quarter of 2021 and 8.7% or $1.2 billion in the first six months of 2022 compared to the first six months of 2021, primarily due to the following factors:
+Added: Auto insurance premiums written increased 9.6% or $689 million in the third quarter of 2022 compared to the third quarter of 2021 and 9.0% or $1.89 billion in the first nine months of 2022 compared to the first nine months of 2021, primarily due to the following factors:
• Increased average premiums driven by rate increases.
−Removed: In the six months ended June 30, 2022, rate increases of 9.5% were taken for Allstate brand in 48 locations, resulting in total Allstate brand insurance premium impact of 6.1%, and 9.0% were taken for National General brand in 29 locations, resulting in total National General brand insurance premium impact of 4.7%, to improve underwriting results.
−Removed: Rate increases may accelerate in the second half of 2022
−Removed: • Renewal ratio increased 0.4 and 0.6 points in the second quarter and first six months of 2022, respectively, compared to the second quarter and first six months of 2021 and remains flat compared to prior quarter
−Removed: • PIF increased 2.3% or 578 thousand to 26,192 thousand as of June 30, 2022 compared to June 30, 2021 due to growth in National General, including SafeAuto acquisition, and Allstate brand
+Added: In the nine months ended September 30, 2022, rate increases of 14.7% were taken for Allstate brand in 52 locations, resulting in total Allstate brand insurance premium impact of 10.8%, and 9.1% were taken for National General brand in 36 locations, resulting in total National General brand insurance premium impact of 5.9%, to improve underwriting results.
+Added: Allstate expects to continue to pursue rate increases for the balance of 2022 and into 2023 to improve auto insurance profitability
+Added: • Renewal ratio decreased 0.2 in the third quarter and increased 0.3 points in the first nine months of 2022, respectively, compared to the third quarter and first nine months of 2021
+Added: • PIF increased 1.9% or 477 thousand to 26,131 thousand as of September 30, 2022 compared to September 30, 2021 due to growth in National General, including the SafeAuto acquisition
• The impact of the ongoing rate actions may have an adverse effect on the renewal ratio and future PIF growth
• Increased new issued applications driven by direct channel, including the acquisition of SafeAuto, and growth in the independent agency channel
−Removed: 54 www.allstate.com
−Removed: Allstate Protection Segment Results
+Added: Third Quarter 2022 Form 10-Q 55
+Added: Segment Results Allstate Protection
Auto premium measures and statistics
−Removed: Three months ended June 30, Six months ended June 30,
+Added: Three months ended September 30, Nine months ended September 30,
2022 2021 Change 2022 2021 Change
11 unchanged sentences
Allstate brand renewal ratio (%) 87.0 87.2 (0.2) 87.3 87.0 0.3
−Removed: Homeowners insurance premiums written increased 15.1% or $411 million in the second quarter of 2022 compared to the second quarter of 2021 and increased 15.2% or $729 million in the first six months of 2022 compared to the first six months of 2021, primarily due to the following factors:
−Removed: • Higher Allstate brand average premiums from approved rate increases and inflation adjustments to premium due to higher insured home valuations
−Removed: • Increased new issued applications driven by growth in the independent agency and direct channels
+Added: Homeowners insurance premiums written increased 9.4% or $282 million in the third quarter of 2022 compared to the third quarter of 2021 and increased 12.9% or $1.01 billion in the first nine months of 2022 compared to the first nine months of 2021, primarily due to the following factors:
+Added: • Higher Allstate brand average premiums from inflation in insured home replacement costs and implemented rate increases, combined with policies in force growth.
+Added: National General premiums and policies in force declined in the third quarter of 2022 as we improve underwriting margins to targeted levels
+Added: • Increased new issued applications driven by growth in the independent agency channel in the third quarter and first nine months of 2022 and direct channel in the first nine months of 2022 compared to the same periods of 2021
+Added: • Growth is being reduced in states and lines of business that are underperforming.
+Added: At this time, we will no longer write new homeowners and condominium business in the state of California, although we will offer continuing coverage to existing customers.
+Added: We expect this action will negatively impact premiums starting in the fourth quarter
Homeowners premium measures and statistics
−Removed: Three months ended June 30, Six months ended June 30,
+Added: Three months ended September 30, Nine months ended September 30,
2022 2021 Change 2022 2021 Change
11 unchanged sentences
Allstate brand renewal ratio (%) 87.4 87.1 0.3 86.9 87.1 (0.2)
−Removed: Other personal lines premiums written increased 5.2% or $30 million in the second quarter of 2022 compared to the second quarter of 2021 and increased 5.5% or $58 million in the first six months of 2022 compared to the first six months of 2021, primarily due to increases in condominiums, landlords and personal umbrella premiums for Allstate brand.
−Removed: Commercial lines premiums written increased 45.6% or $93 million in the second quarter of 2022 compared to the second quarter of 2021 and increased 47.4% or $190 million in the first six months of 2022 compared to the first six months of 2021, primarily due to increased average premium and higher miles driven in our shared economy business.
−Removed: Second Quarter 2022 Form 10-Q 55
−Removed: Segment Results Allstate Protection
+Added: Other personal lines premiums written increased 3.8% or $22 million in the third quarter of 2022 compared to the third quarter of 2021 and increased 4.9% or $80 million in the first nine months of 2022 compared to the first nine months of 2021, primarily due to increases in landlords, condominiums and personal umbrella premiums for Allstate brand.
+Added: Commercial lines premiums written increased 37.7% or $78 million in the third quarter of 2022 compared to the third quarter of 2021 and increased
+Added: 44.1% or $268 million in the first nine months of 2022 compared to the first nine months of 2021, primarily due to higher miles driven and increased average premium in our shared economy business in part due to higher rates.
+Added: Commercial insurance is being exited in five states and coverage to transportation network companies will not be offered unless it utilizes telematics-based pricing.
+Added: We expect these actions will negatively impact premiums starting in the fourth quarter.
+Added: 56 www.allstate.com
+Added: Allstate Protection Segment Results
GAAP operating ratios include loss ratio, expense ratio and combined ratio to analyze our profitability trends.
4 unchanged sentences
2022 2021 2022 2021 2022 2021
−Removed: Three months ended June 30,
+Added: Three months ended September 30,
95.3 76.9 22.1 25.4 117.4 102.3
−Removed: Impact of Shelter-in-Place Payback expense — — — 0.4 — 0.4
Homeowners 66.9 85.9 24.3 25.1 91.2 111.0
3 unchanged sentences
Impact of amortization of purchased intangibles — — 0.6 0.8 0.6 0.8
−Removed: Impact of Shelter-in-Place Payback expense — — — 0.3 — 0.3
Impact of restructuring and related charges — — 0.1 0.2 0.1 0.2
−Removed: Impact of Allstate Special Payment plan bad debt expense — — — (0.1) — (0.1)
−Removed: Six months ended June 30,
+Added: Nine months ended September 30,
Auto 86.1 67.7 23.2 24.7 109.3 92.4
13 unchanged sentences
2022 2021 2022 2021 2022 2021 2022 2021
−Removed: Three months ended June 30,
+Added: Three months ended September 30,
Auto 95.3 76.9 4.4 2.9 8.4 1.0 (0.1) (0.1)
3 unchanged sentences
Total 88.0 79.0 6.8 12.5 6.7 0.4 (0.1) —
−Removed: Six months ended June 30,
+Added: Nine months ended September 30,
Auto 86.1 67.7 2.2 1.9 4.6 — (0.3) (0.1)
3 unchanged sentences
Total 82.2 70.1 7.2 9.4 4.2 (0.6) 0.1 (0.7)
−Removed: (1) The ten-year average effect of catastrophe losses on the total combined ratio was 11.4 points in the second quarter of 2022.
−Removed: 56 www.allstate.com
−Removed: Allstate Protection Segment Results
−Removed: Auto loss ratio increased 16.2 and 18.3 points in the second quarter and first six months of 2022, respectively, compared to the same periods of 2021, primarily due to:
+Added: (1) The ten-year average effect of catastrophe losses on the total combined ratio was 7.5 points in the third quarter of 2022.
+Added: Third Quarter 2022 Form 10-Q 57
+Added: Segment Results Allstate Protection
+Added: Auto loss ratio increased 18.4 points in both the third quarter and first nine months of 2022 compared to the same periods of 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 quarter, it remains below pre-pandemic levels
−Removed: • Increased severity for all coverages, driven by inflationary pressures and medical service utilization for bodily injury claims
−Removed: • Unfavorable non-catastrophe prior year reserve reestimates in both physical damage and bodily injury coverages
+Added: • Increased severity for all coverages, driven by inflationary pressures in both physical damage and bodily injury claims
+Added: • Unfavorable prior year reserve reestimates, excluding catastrophes, in both bodily injury and physical damage coverages
The impacts of the Coronavirus affect frequency and severity statistics including:
4 unchanged sentences
• Changes in commuting activity
−Removed: • Driving behavior (e.g., speed, time of day) impacting mix of claim types
−Removed: Property damage gross claim frequency for Allstate brand increased 7.1% and 12.3% in the second quarter and first six months of 2022, respectively, compared to the same periods of 2021 due to factors including:
+Added: • Driving behavior (e.g., speed, time of day) impacting severity and mix of claim types
+Added: Property damage gross claim frequency for Allstate brand increased 3.5% and 9.1% in the third quarter and first nine months of 2022, respectively, compared to the same periods of 2021 due to factors including:
• Increases in miles driven compared to 2021 which was impacted by the pandemic
−Removed: • While gross claim frequency has rebounded from the low in 2020, it is 15.5% below pre-pandemic levels of 2019 as auto miles driven, particularly during peak commuting hours, remains lower than pre-pandemic levels
−Removed: Collision gross claim frequency for Allstate brand increased 5.1% and 9.8% in the second quarter and first six months of 2022, respectively, compared to the same periods of 2021.
−Removed: While gross claim frequency has rebounded from the low in 2020, it is 9.4% below pre-pandemic levels of 2019.
−Removed: Property damage estimated report year 2022 incurred claim severity for Allstate brand, excluding Esurance and Canada, increased approximately 12% compared to report year 2021 and also increased approximately 22% compared to the 2021 recorded severity as of June 30, 2021.
−Removed: Collision estimated report year 2022 incurred claim severity for Allstate brand, excluding Esurance and Canada, increased approximately 16% compared to report year 2021 and also increased approximately 22% compared to the 2021 recorded severity as of June 30, 2021.
−Removed: The increase in estimated report year 2022 incurred claim severity for both coverages is geographically widespread and is due to rising inflationary factors that began in the second quarter of
−Removed: 2021 impacting both repairable vehicles and total losses, including higher used car values, replacement part costs and labor rates, and higher costs to repair more sophisticated newer model vehicles.
−Removed: Bodily injury estimated report year 2022 incurred claim severity for Allstate brand, excluding Esurance and Canada, increased approximately 9% compared to report year 2021 and also increased approximately 16% compared to the 2021 recorded severity as of June 30, 2021.
−Removed: The increase is due to more severe auto accidents, higher consumption of medical treatment, increased severity of claims with attorney representation and higher medical care inflation.
−Removed: Homeowners loss ratio increased 6.0 points in the second quarter compared to the same period of 2021 primarily due to higher catastrophe losses and severity, partially offset by increased premiums earned.
−Removed: Homeowners loss ratio increased 1.0 point in the first six months of 2022, compared to the same period of 2021, primarily due to higher severity and unfavorable reserve reestimates compared to favorable reserve reestimates in 2021, partially offset by increased premiums earned.
+Added: • While gross claim frequency has rebounded from the low in 2020, it is 13.8% and 15.0% below pre-pandemic levels of 2019 for the third quarter and first nine months of 2022, respectively
+Added: Collision gross claim frequency for Allstate brand increased 0.1% and 6.2% in the third quarter and first nine months of 2022, respectively, compared to the same periods of 2021.
+Added: While gross claim frequency has rebounded from the low in 2020, it is 9.3% and 10.0% below pre-pandemic levels of 2019 for the third quarter and first nine months of 2022, respectively.
+Added: Property damage estimated report year 2022 incurred claim severity for Allstate brand, excluding Esurance and Canada, increased approximately 17% compared to report year 2021 and also increased approximately 27% compared to the 2021 recorded severity as of September 30, 2021.
+Added: Collision estimated report year 2022 incurred claim severity for Allstate brand, excluding Esurance and Canada, increased approximately 17% compared to report year 2021 and also increased approximately 20% compared to the 2021 recorded severity as of September 30, 2021.
+Added: The increase in estimated report year 2022 incurred claim severity for both coverages is geographically widespread and is due to rising inflationary factors and supply chain shortages impacting both repairable vehicles and total losses,
+Added: including higher used car values, replacement part costs and labor rates and length of time to claim resolution.
+Added: Bodily injury estimated report year 2022 incurred claim severity for Allstate brand, excluding Esurance and Canada, increased approximately 12% compared to report year 2021 and also increased approximately 16% compared to the 2021 recorded severity as of September 30, 2021.
+Added: 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.
+Added: Homeowners loss ratio decreased 19.0 points and 6.0 points in the third quarter and first nine months of 2022, respectively, compared to the same periods of 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)
−Removed: Three months ended June 30, 2022
+Added: Three months ended September 30, 2022
Gross claim frequency (2.9) %
Paid claim severity 18.8
−Removed: Six months ended June 30, 2022
+Added: Nine months ended September 30, 2022
Gross claim frequency (2.8) %
Paid claim severity 22.1
−Removed: Gross claim frequency decreased in the second quarter and first six months of 2022 compared to the same periods of 2021 primarily due to a decline in the wind/hail peril.
−Removed: Paid claim severity increased in the second quarter and first six months of 2022 compared to the same periods of 2021 due to inflationary loss cost pressure driven by increases in labor and materials costs.
+Added: Gross claim frequency decreased in the third quarter and first nine months of 2022 compared to the same periods of 2021 primarily due to a decline in the wind/hail and water perils.
+Added: Paid claim severity increased in the third quarter and first nine months of 2022 compared to the same periods of 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.
−Removed: Other personal lines loss ratio increased 6.9 and 5.4 points in the second quarter and first six months of 2022, respectively, compared to the same periods of 2021, primarily due to higher non-catastrophe losses, partially offset by increased premiums earned.
−Removed: Commercial lines loss ratio increased 36.3 and 22.9 points in the second quarter and first six months of 2022, respectively, compared to the same periods of 2021, primarily due to higher auto severity and higher unfavorable non-catastrophe prior year reserve reestimates in the shared economy business, partially offset by increased premiums earned.
−Removed: Second Quarter 2022 Form 10-Q 57
−Removed: Segment Results Allstate Protection
−Removed: Catastrophe losses increased 16.4% or $156 million in the second quarter of 2022 compared to the second quarter of 2021.
−Removed: Catastrophe losses increased 1.8% or $28 million in the first six months of 2022 compared to the first six months of 2021.
−Removed: 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 reestimates.
+Added: Other personal lines loss ratio increased 11.2 and 7.4 points in the third quarter and first nine months of 2022, respectively, compared to the same periods of 2021, primarily due to higher losses, excluding catastrophes, partially offset by lower catastrophe losses and increased premiums earned.
+Added: Commercial lines loss ratio increased 16.2 and 20.5 points in the third quarter and first nine months of 2022, respectively, compared to the same periods of 2021, primarily due to higher unfavorable prior year reserve reestimates, excluding catastrophes, primarily in commercial auto bodily injury coverage, and higher auto severity, partially offset by increased premiums earned.
+Added: 58 www.allstate.com
+Added: Allstate Protection Segment Results
+Added: Catastrophe losses decreased 39.9% or $506 million in the third quarter of 2022 compared to the third quarter of 2021.
+Added: Catastrophe losses decreased 17.0% or $478 million in the first nine months of 2022 compared to the first nine months of 2021.
+Added: Hurricane Ian estimated gross catastrophe losses, excluding National Flood Insurance Program (“NFIP”) claim expenses, totaled $671 million, pre-tax, which will be reduced by $305 million in anticipated reinsurance recoveries for a net estimated loss of $366 million.
+Added: Approximately 75% of Hurricane Ian net estimated losses relate to auto coverages.
+Added: Auto policyholders generally have coverage for physical damage due to flood if they have purchased optional auto comprehensive coverage.
+Added: Homeowners policies specifically exclude coverage for losses caused by flood.
+Added: 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.
4 unchanged sentences
Our loss estimates are calculated in accordance with the coverage provided by our policies.
−Removed: Auto policyholders generally have coverage for physical damage due to flood if they have purchased optional auto comprehensive coverage.
−Removed: Our homeowners policies specifically exclude coverage for losses caused by flood.
−Removed: 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, limited by our participation in various state facilities.
+Added: The establishment of appropriate reserves, including reserves for catastrophe losses, is an inherently uncertain and complex process.
+Added: Reserving for hurricane losses is complicated by the inability of insureds to promptly report losses, limitations placed on claims adjusting staff affecting their ability to inspect losses, determining whether losses are covered by our homeowners policy (generally for damage caused by wind or wind driven rain) or specifically excluded coverage caused by flood, exposure to mold damage, and the effects of numerous other considerations, including the timing of a catastrophe in relation to other events, such as at or near the end of a financial reporting period, which can affect the availability of information needed to estimate reserves for that reporting period.
+Added: In these situations, we may need to adapt our practices to accommodate these circumstances in order to determine a best estimate of our losses from a catastrophe.
+Added: Over time, we have reduced our aggregate insurance exposure to catastrophe losses in certain regions of the country that are subject to high levels of natural catastrophes, limited by our participation in various state facilities.
Catastrophe losses by the type of event
−Removed: Three months ended June 30, Six months ended June 30,
−Removed: ($ in millions) Number of events 2022 Number of events 2021 Number of events 2022 Number of events 2021
+Added: Three months ended September 30, Nine months ended September 30,
+Added: ($ in millions) Number of events 2022 Number of events 2021 (2)
+Added: Number of events 2022 Number of events 2021 (2)
Hurricanes/Tropical storms (1)
+Added: 1 $ 378 5 $ 747 1 $ 378 6 $ 754
Tornadoes — — 1 9 3 148 2 26
9 unchanged sentences
Total catastrophe losses 37 $ 763 45 $ 1,269 91 $ 2,333 81 $ 2,811
−Removed: Catastrophe reinsurance Our current catastrophe reinsurance program supports our risk tolerance framework which utilizes a modeled 1-in-100 annual aggregate limit for catastrophe losses from hurricanes, earthquakes and wildfires of $2.5 billion, net of reinsurance.
−Removed: These reinsurance agreements are part of our catastrophe management strategy, which is intended to provide our shareholders with an acceptable return on the risks assumed in our property business, and to reduce variability of earnings, while providing protection to our customers.
−Removed: During the second quarter of 2022, we completed the placement of our 2022-2023 Florida Excess Catastrophe Reinsurance Program (“Florida program”), National General Lender Services Standalone Program and the National General Reciprocal Excess Catastrophe Reinsurance Contract.
−Removed: Florida program updates Our 2022 Florida program provides coverage up to $1.83 billion of loss less a $40 million retention.
−Removed: The Florida program includes reinsurance agreements placed in the traditional market, the Florida Hurricane Catastrophe Fund
−Removed: (“FHCF”), and the Insurance-Linked Securities (“ILS”) market as follows:
−Removed: • Traditional market placements comprise reinsurance limits for losses to personal lines property in Florida arising out of multiple perils.
−Removed: These contracts provide a combined $1.30 billion of limits, with a portion of the traditional market placements providing coverage for perils not covered by the FHCF contracts, which only cover hurricanes.
−Removed: • Two FHCF contracts provide $394 million of limits for qualifying losses to personal lines property in Florida caused by storms the National Hurricane Center declares to be hurricanes.
−Removed: The two contracts are 90% placed.
−Removed: • ILS placements provide $488 million of reinsurance limits for qualifying losses to personal lines property in Florida caused by a named storm event, a severe weather event, an earthquake event, a fire event, a volcanic eruption event, or a meteorite impact event.
−Removed: 58 www.allstate.com
−Removed: Allstate Protection Segment Results
−Removed: National General Lender Services Standalone Program is placed in the traditional market and provides $225 million of coverage, subject to a $50 million retention, with one reinstatement of limits.
−Removed: National General Reciprocal Excess Catastrophe Reinsurance Contracts are placed in the traditional market and provides $690 million of coverage, subject to a $20 million retention, with one reinstatement of limits.
−Removed: Canada Catastrophe Excess of Loss Reinsurance Contract is placed in the traditional market and provides CAD 175 million of coverage, subject to a CAD 50 million retention, with one reinstatement of limits.
−Removed: For a complete summary of the 2022 reinsurance placement, please read this in conjunction with the discussion and analysis in Part I.
−Removed: Management’s Discussion and Analysis - Allstate Protection Segment Results, Catastrophe Reinsurance of The Allstate Corporation Form 10-Q for the quarterly period ended March 31, 2022.
−Removed: The total cost of our property catastrophe reinsurance programs, excluding reinstatement premiums, during the second quarter and first six months of 2022 was $173 million and $317 million, respectively, compared to $128 million and $241 million in the second quarter and first six months of 2021, respectively.
−Removed: Catastrophe placement premiums reduce
−Removed: net written and earned premium with approximately 73% related to homeowners.
−Removed: Reserve reestimates Unfavorable reserve reestimates were $459 million and $603 million in the second quarter and first six months of 2022, respectively, primarily due to strengthening of non-catastrophe reserves in personal auto, primarily from physical damage and bodily injury coverages.
−Removed: 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, which contributed to the adverse development of claims reported in prior years but settled in 2022.
−Removed: Increases in injury coverages reflect the ongoing impacts of more severe auto accidents, increased medical inflation, higher consumption of medical treatment and the increased prevalence and severity of claims with attorney representation.
−Removed: Unfavorable reserve reestimates for homeowners were driven by catastrophe and non-catastrophe losses.
−Removed: Unfavorable reserve reestimates for commercial auto during the second quarter are primarily from shared economy business written in states which Allstate has exited.
+Added: (1) 2022 includes $12 million of claims expenses related to the National Flood Insurance Program.
+Added: (2) Includes $173 million and $256 million of reinstatement premiums for the three and nine months ended September 30, 2021, related to the Nationwide Catastrophe Reinsurance Program, primarily due to Hurricane Ida.
+Added: Third Quarter 2022 Form 10-Q 59
+Added: Segment Results Allstate Protection
+Added: Catastrophe reinsurance The total cost of our property catastrophe reinsurance programs, excluding reinstatement premiums, during the third quarter and first nine months of 2022 was $211 million and $528 million, respectively, compared to $109 million and $345 million in the third quarter and first nine months of 2021, respectively.
+Added: Catastrophe placement premiums reduce net written and earned premium with approximately 73% related to homeowners.
+Added: Prior year reserve reestimates Unfavorable reserve reestimates were $746 million and $1.35 billion in the third quarter and first nine months of 2022, respectively, primarily due to strengthening of reserves, excluding catastrophes, in personal auto, primarily from bodily injury and physical damage coverages.
+Added: Increases in injury coverages reflect recent data and updated assumptions related to severity with third-party bodily injury claims, increased claims with
+Added: attorney representation, litigation costs and higher medical inflation.
+Added: 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.
+Added: Delays in the receipt of third-party carrier claims also contributed to the adverse development of claims reported in prior years.
+Added: Unfavorable reserve reestimates for homeowners were driven by losses, excluding catastrophes.
+Added: Unfavorable reserve reestimates for commercial auto during the third quarter were primarily from bodily injury coverage.
For a more detailed discussion on reinsurance and reserve reestimates, see Note 9 of the condensed consolidated financial statements.
−Removed: Reserve reestimates
−Removed: Three months ended June 30, Six months ended June 30,
+Added: Prior year reserve reestimates
+Added: Three months ended September 30, Nine months ended September 30,
reestimates (1)
13 unchanged sentences
(2) Ratios are calculated using Allstate Protection premiums earned.
−Removed: Second Quarter 2022 Form 10-Q 59
−Removed: Segment Results Allstate Protection
−Removed: Expense ratio decreased 1.7 and 0.5 points in the second quarter and first six months of 2022, respectively, compared to the second quarter and first six months of 2021, primarily due to lower advertising costs, restructuring and related charges and the impact of amortization of DAC, partially offset by higher operating costs.
−Removed: Higher operating costs are primarily due to employee-related costs.
+Added: 60 www.allstate.com
+Added: Allstate Protection Segment Results
+Added: Expense ratio decreased 2.6 and 1.1 points in the third quarter and first nine months of 2022, respectively, compared to the third quarter and first nine months of 2021, primarily due to lower advertising costs and the impact of amortization of DAC.
+Added: The expense ratio for the first nine months of 2022 was partially offset by higher operating costs, primarily due to employee-related costs.
Impact of specific costs and expenses on the expense ratio
−Removed: Three months ended June 30, Six months ended June 30,
+Added: Three months ended September 30, Nine months ended September 30,
($ in millions, except ratios) 2022 2021 Change 2022 2021 Change
18 unchanged sentences
Total expense ratio 22.5 25.1 (2.6) 23.2 24.3 (1.1)
−Removed: 60 www.allstate.com
−Removed: Run-off Property-Liability Segment Results
+Added: Third Quarter 2022 Form 10-Q 61
+Added: Segment Results Run-off Property-Liability
Run-off Property-Liability Segment
Underwriting results
−Removed: ($ in millions) Three months ended June 30, Six months ended June 30,
+Added: ($ in millions) Three months ended September 30, Nine months ended September 30,
2022 2021 2022 2021
Claims and claims expense
+Added: Asbestos claims
+Added: $ (34) $ (64) $ (34) $ (64)
+Added: Environmental claims
+Added: (56) (40) (56) (40)
+Added: Other run-off lines (30) (9) (34) (11)
+Added: Total claims and claims expense
+Added: (120) (113) (124) (115)
Operating costs and expenses (2) — (3) (3)
1 unchanged sentence
$ (122) $ (113) $ (127) $ (118)
+Added: Annual reserve review In the third quarter of 2022 and 2021, we performed our annual reserve review using established industry and actuarial best practices.
+Added: The annual review resulted in unfavorable reserve reestimates totaling $118 million and $111 million in 2022 and 2021, respectively.
+Added: The reserve reestimates are included as part of claims and claims expense.
+Added: The reserve reestimates in 2022 primarily related to new reported information and defense costs for asbestos and higher than expected reported losses for environmental and other run-off exposures.
+Added: The reserve reestimates in 2021 primarily related to new reported information for asbestos and
+Added: environmental and higher than expected reported losses for environmental and other run-off exposures.
+Added: We believe that our reserves are appropriately established based on available facts, technology, laws, regulations, and assessments of other pertinent factors and characteristics of exposure (e.g., claim activity, potential liability, jurisdiction, products versus non-products exposure) presented by individual policyholders, assuming no change in the legal, legislative or economic environment.
+Added: However, as we progress with the resolution of disputed claims in the courts and arbitrations and with negotiations and settlements, our reported losses may be more variable.
Reserves for asbestos, environmental and other run-off claims before and after the effects of reinsurance
−Removed: ($ in millions) June 30, 2022 December 31, 2021
+Added: ($ in millions) September 30, 2022 December 31, 2021
Asbestos claims
13 unchanged sentences
Net reserves $ 1,487 $ 1,421
+Added: 62 www.allstate.com
+Added: Run-off Property-Liability Segment Results
Reserves by type of exposure before and after the effects of reinsurance
−Removed: ($ in millions) June 30, 2022 December 31, 2021
+Added: ($ in millions) September 30, 2022 December 31, 2021
Direct excess commercial insurance
22 unchanged sentences
Net reserves $ 1,487 $ 1,421
−Removed: Second Quarter 2022 Form 10-Q 61
−Removed: Segment Results Run-off Property-Liability
Percentage of gross and ceded reserves by case and IBNR
−Removed: June 30, 2022 December 31, 2021
+Added: September 30, 2022 December 31, 2021
Case IBNR Case IBNR
8 unchanged sentences
Ceded 81 19 71 29
−Removed: (1) Approximately 63% of gross case reserves as of June 30, 2022 are subject to settlement agreements.
−Removed: (2) Approximately 69% of ceded case reserves as of June 30, 2022 are subject to settlement agreements.
+Added: (1) Approximately 64% of gross case reserves as of September 30, 2022 are subject to settlement agreements.
+Added: (2) Approximately 68% of ceded case reserves as of September 30, 2022 are subject to settlement agreements.
+Added: Third Quarter 2022 Form 10-Q 63
+Added: Segment Results Run-off Property-Liability
Gross payments from case reserves by type of exposure
−Removed: ($ in millions) Three months ended June 30, Six months ended June 30,
+Added: ($ in millions) Three months ended September 30, Nine months ended September 30,
2022 2021 2022 2021
6 unchanged sentences
Ceded — 2 (1) (1)
−Removed: Other run-off business
−Removed: Gross — — — —
−Removed: Ceded — — — —
−Removed: (1) In the second quarter and first six months of 2022, 77% and 84% of payments related to settlement agreements.
−Removed: (2) In the second quarter and first six months of 2022, 85% and 91% of payments related to settlement agreements.
−Removed: Total net reserves as of June 30, 2022, included $652 million or 47% of estimated IBNR reserves compared to $733 million or 52% of estimated IBNR reserves as of December 31, 2021.
−Removed: Total gross payments were $16 million and $41 million for the second quarter and first six months of 2022, respectively.
−Removed: Payments for the second quarter and first six months of 2022 primarily related to settlement agreements reached with several insureds
−Removed: on large claims, mainly asbestos claims, where the scope of coverages has been agreed upon.
+Added: (1) In the third quarter and first nine months of 2022, 75% and 82% of payments related to settlement agreements.
+Added: (2) In the third quarter and first nine months of 2022, 88% and 90% of payments related to settlement agreements.
+Added: Total net reserves as of September 30, 2022, included $769 million or 52% of estimated IBNR reserves compared to $733 million or 52% of estimated IBNR reserves as of December 31, 2021.
+Added: Total gross payments were $25 million and $66 million for the third quarter and first nine months of 2022, respectively, primarily related to asbestos claims, mainly from settlement agreements reached with
+Added: several insureds on large claims 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.
−Removed: Reinsurance collections were $11 million and $21 million for the second quarter and first six months of 2022, respectively.
+Added: Reinsurance collections were $6 million and $27 million for the third quarter and first nine months of 2022, respectively.
64 www.allstate.com
2 unchanged sentences
Summarized financial information
−Removed: ($ in millions) Three months ended June 30, Six months ended June 30,
+Added: ($ in millions) Three months ended September 30, Nine months ended September 30,
2022 2021 2022 2021
3 unchanged sentences
Intersegment insurance premiums and service fees (1)
+Added: 39 46 118 133
Net investment income 13 10 34 32
17 unchanged sentences
Allstate Identity Protection 2,968 3,197
−Removed: Policies in force as of June 30 (in thousands) 144,693 147,046
+Added: Policies in force as of September 30 (in thousands) 142,079 149,519
(1) Primarily related to Arity and Allstate Roadside and are eliminated in our condensed consolidated financial statements.
−Removed: Adjusted net income decreased 23.2% or $13 million in the second quarter of 2022 and decreased 8.6% or $9 million in the first six months of 2022 compared to the same periods of 2021, primarily driven by investments in geographic and product expansion at Allstate Protection Plans and increased severity at Allstate Roadside.
−Removed: Premiums written decreased 3.2% or $22 million in the second quarter of 2022 primarily due to a decline in sales at Allstate Dealer Services and Allstate Protection Plans.
−Removed: Premiums written increased 2.0% or $25 million in the first six months of 2022, compared to the same periods of 2021, primarily due to growth at Allstate Roadside and Allstate Protection Plans.
−Removed: PIF decreased 1.6% or 2 million as of June 30, 2022 compared to June 30, 2021 due to a decline in Allstate Protection Plans.
−Removed: Other revenue increased 3.4% or $3 million in the second quarter of 2022 and increased 3.9% or $7 million in the first six months of 2022 compared to the same periods of 2021, reflecting growth at Allstate Identity Protection.
−Removed: Intersegment premiums and service fees decreased 17.4% or $8 million in the second quarter of 2022 and decreased 9.2% or $8 million in the first six months of 2022, compared to the same periods of 2021 driven by decreased Arity device sales due to a shift from Drivewise® devices to a mobile program.
−Removed: Claims and claims expense increased 17.4% or $19 million in the second quarter 2022 and increased 18.4% or $39 million in the first six months of 2022 compared to the same periods of 2021, primarily due to higher levels of claims at Allstate Protection Plans driven by growth of the business and increased claims cost at Allstate Roadside due to higher severity and rescue volumes.
−Removed: Second Quarter 2022 Form 10-Q 63
+Added: Adjusted net income decreased 22.2% or $10 million in the third quarter of 2022 compared to the third quarter of 2021, primarily due to a prior year restructuring benefit and higher current year technology expenses at Allstate Identity Protection.
+Added: Adjusted net income decreased 12.7% or $19 million in the first nine months of 2022 compared to the same period of 2021, primarily driven by investments in growth at Allstate Protection Plans and lower revenue at Arity.
+Added: Premiums written increased 0.9% or $6 million in the third quarter of 2022 and increased 1.6% or $31 million in the first nine months of 2022 compared to the same periods of 2021, primarily due to international growth at Allstate Protection Plans, partially offset by a decrease in North American sales at both Allstate Protection Plans and Allstate Dealer Services.
+Added: PIF decreased 5.0% or 7 million as of September 30, 2022 compared to September 30, 2021 primarily related to a decline in Allstate Protection Plans.
+Added: Other revenue decreased 1.2% or $1 million in the third quarter of 2022 compared to the third quarter of 2021, primarily due to lower Arity revenue.
+Added: Other revenue increased 2.3% or $6 million in the first nine months of 2022 compared to the same period of 2021, reflecting growth at Allstate Identity Protection partially offset by lower revenue at Arity.
+Added: Intersegment premiums and service fees decreased 15.2% or $7 million in the third quarter of 2022 and decreased 11.3% or $15 million in the first nine months of 2022 compared to the same periods of 2021, driven by decreased Arity device sales due to a shift from Drivewise® devices to a mobile program.
+Added: Third Quarter 2022 Form 10-Q 65
Segment Results Protection Services
−Removed: Amortization of DAC increased 17.5% or $34 million in the second quarter of 2022 and increased 19.7% or $74 million in the first six months of 2022 compared to the same periods of 2021, driven by Allstate Protection Plans and Allstate Dealer Services business growth.
−Removed: Operating costs and expenses increased 4.9% or $10 million in the second quarter of 2022 and increased 7.5% or $30 million in the first six months of 2022 compared to the same periods of 2021, primarily due to investments in geographic and product expansion at Allstate Protection Plans and Allstate Identity Protection.
−Removed: Restructuring and related charges decreased $4 million in the second quarter of 2022 and decreased $13 million in the first six months of 2022 compared to the same periods of 2021, primarily due to a facility closure at Allstate Identity Protection in the first quarter of 2021.
+Added: Claims and claims expense increased 15.6% or $19 million in the third quarter 2022 compared to the third quarter of 2021, primarily due to higher claim severity at Allstate Protection Plans.
+Added: Claims and claims expense increased 17.4% or $58 million in the first nine months of 2022 compared to the same period of 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.
+Added: Amortization of DAC increased 14.6% or $30 million in the third quarter of 2022 and increased 17.9% or $104 million in the first nine months of 2022 compared to the same periods of 2021, driven by Allstate Protection Plans and Allstate Dealer Services business growth.
+Added: Operating costs and expenses increased 2.4% or $5 million in the third quarter of 2022 and increased 5.7% or $35 million in the first nine months of 2022 compared to the same periods of 2021, primarily due to investments in technology and geographic and product expansion at Allstate Protection Plans and Allstate Identity Protection, partially offset by lower expenses at Arity.
+Added: Restructuring and related charges increased $2 million in the third quarter of 2022 compared to the same period of 2021.
+Added: Restructuring and related charges decreased $11 million in the first nine months of 2022 compared to the same period of 2021, primarily due to a facility closure at Allstate Identity Protection in the first quarter of 2021 and accelerated lease costs at Allstate Protections Plans in the third quarter of 2021.
66 www.allstate.com
2 unchanged sentences
Summarized financial information
−Removed: Three months ended June 30, Six months ended June 30,
+Added: Three months ended September 30, Nine months ended September 30,
($ in millions) 2022 2021 2022 2021
14 unchanged sentences
Individual health (4)
−Removed: Policies in force as of June 30 (in thousands) 4,368 4,452
−Removed: (1) Benefit ratio is calculated as accident, health and other policy benefits less interest credited to contractholder funds of $9 million and $8 million for the three months ended June 30, 2022 and 2021, respectively, and $17 million for both the six months ended June 30, 2022 and 2021 , divided by premiums and contract charges.
+Added: Policies in force as of September 30 (in thousands) 4,320 4,378
+Added: (1) Benefit ratio is calculated as accident, health and other policy benefits less interest credited to contractholder funds of $8 million for both the three months ended September 30, 2022 and 2021, and $25 million for both the nine months ended September 30, 2022 and 2021, divided by premiums and contract charges.
(2) Employer voluntary benefits include supplemental life and health products offered through workplace enrollment.
1 unchanged sentence
(4) Individual health includes short-term medical and other health products sold directly to individuals.
−Removed: Adjusted net income increased $3 million in the second quarter of 2022 compared to the second quarter of 2021, primarily due to an increase in group health revenues, partially offset by an increase in individual health claims.
−Removed: Adjusted net income decreased $9 million in the first six months of 2022, compared to the same period of 2021, primarily due to increases in individual and group health claims, partially offset by lower employer voluntary benefits claim utilization.
−Removed: Premiums and contract charges increased 4.3% or $19 million in the second quarter of 2022 and increased 3.7% or $33 million in the first six months of 2022 compared to the same periods of 2021, primarily due to growth in individual and group health.
+Added: Adjusted net income increased $21 million in the third quarter of 2022 compared to the third quarter of 2021, primarily due to lower individual health and employer voluntary benefits claims as well as lower restructuring charges compared to the prior year quarter.
+Added: Adjusted net income increased $12 million in the first nine months of 2022, compared to the same period of 2021, primarily due to increases in group health and employer voluntary benefits revenues, partially offset by higher group and individual health claims utilization.
+Added: Premiums and contract charges increased 0.7% or $3 million in the third quarter of 2022 and increased 2.6% or $36 million in the first nine months of 2022 compared to the same periods of 2021, primarily due to growth in group health and employer voluntary benefits.
Premiums and contract charges by line of business
−Removed: Three months ended June 30, Six months ended June 30,
+Added: Three months ended September 30, Nine months ended September 30,
($ in millions) 2022 2021 2022 2021
3 unchanged sentences
Premiums and contract charges $ 463 $ 460 $ 1,398 $ 1,362
−Removed: Other revenue increased $9 million and $24 million in the second quarter and first six months of 2022, respectively, compared to the same periods of 2021, primarily due to an increase in group health administrative fees.
−Removed: Accident, health and other policy benefits increased 6.7% or $17 million in the second quarter of 2022 and increased 8.9% or $44 million in the first six months of 2022 compared to the same periods of 2021, primarily due to increased benefits utilization for
−Removed: individual health and group health, partially offset by lower utilization for employer voluntary benefits.
−Removed: Benefit ratio increased to 55.8 and 55.7 in the second quarter and the first six months of 2022, respectively, compared to 54.6 and 52.9 in the same periods of 2021, primarily due to an increase in individual and group health claims, partially offset by a lower benefit ratio for employer voluntary benefits products due to lower accident and health claim
−Removed: Second Quarter 2022 Form 10-Q 65
+Added: Other revenue increased $5 million and $29 million in the third quarter and first nine months of 2022, respectively, compared to the same periods of 2021, primarily due to an increase in group health administrative fees.
+Added: Accident, health and other policy benefits decreased 5.1% or $14 million in the third quarter of 2022 compared to the third quarter of 2021, primarily due to lower benefit utilization in individual health and
+Added: employer voluntary benefits.
+Added: Accident, health and other policy benefits increased 3.9% or $30 million in the first nine months of 2022 compared to the same period of 2021, primarily due to increased benefits utilization for group and individual health products, offset by employer voluntary benefits.
+Added: Benefit ratio decreased to 55.1 in the third quarter of 2022 compared to 58.5 in the third quarter of 2021, primarily due to a lower benefit ratio for individual
+Added: Third Quarter 2022 Form 10-Q 67
Segment Results Allstate Health and Benefits
−Removed: experience and lower life mortality compared to the prior year.
−Removed: Amortization of DAC increased 12.5% or $4 million in the second quarter of 2022 and increased 11.3% or
−Removed: $8 million in the first six months of 2022 compared to the same periods of 2021, primarily related to employer voluntary benefits.
+Added: health products and lower life mortality in employer voluntary benefits.
+Added: Benefit ratio increased to 55.5 in the first nine months of 2022 compared to 54.8 in the same period of 2021, primarily due to a higher benefit ratio in group and individual health, partially offset by lower accident and health claims in employer voluntary benefits.
+Added: Amortization of DAC increased 6.7% or $2 million in the third quarter of 2022 and increased 9.9% or $10 million in the first nine months of 2022 compared to the same periods of 2021, primarily related to employer voluntary benefits and individual health.
Operating costs and expenses
−Removed: Three months ended June 30, Six months ended June 30,
+Added: Three months ended September 30, Nine months ended September 30,
($ in millions) 2022 2021 2022 2021
2 unchanged sentences
Total operating costs and expenses $ 207 $ 206 $ 594 $ 582
−Removed: Operating costs and expenses decreased $1 million in the second quarter of 2022 compared to the second quarter of 2021, primarily due to a decrease in employer voluntary benefits.
−Removed: Operating costs and expenses increased $11 million in the first six months of 2022 compared to the same period of 2021, primarily due to growth in group health.
+Added: Operating costs and expenses increased $1 million and $12 million in the third quarter and first nine months of 2022, respectively, compared to the same periods of 2021, primarily due to growth and higher employee related expenses.
Analysis of reserves
Reserve for future policy benefits
−Removed: ($ in millions) June 30, 2022 December 31, 2021
+Added: ($ in millions) September 30, 2022 December 31, 2021
Traditional life insurance and other $ 314 $ 313
3 unchanged sentences
Portfolio composition and strategy by reporting segment (1)
−Removed: June 30, 2022
+Added: September 30, 2022
($ in millions) Property-Liability Protection Services
19 unchanged sentences
(3) Equity securities are carried at fair value.
−Removed: The fair value of equity securities held as of June 30, 2022, was $271 million in excess of cost.
+Added: The fair value of equity securities held as of September 30, 2022, was $71 million in excess of cost.
These net gains were primarily concentrated in the technology, consumer goods and banking sectors.
−Removed: Equity securities include $1.08 billion of funds with underlying investments in fixed income securities as of June 30, 2022.
+Added: Equity securities include $1.11 billion of funds with underlying investments in fixed income securities as of September 30, 2022.
(4) Short-term investments are carried at fair value.
−Removed: Investments totaled $61.06 billion as of June 30, 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.
+Added: Investments totaled $61.01 billion as of September 30, 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 strategy We utilize two primary strategies to manage risks and returns and to position our portfolio to take advantage of market opportunities while attempting to mitigate adverse effects.
1 unchanged sentence
Market-based strategy seeks to deliver predictable earnings aligned to business needs and take advantage of short-term opportunities primarily through public and private fixed income investments and public equity securities.
−Removed: Performance-based strategy seeks to deliver attractive risk-adjusted returns and supplement market risk with idiosyncratic risk primarily through investments in private equity, including infrastructure
−Removed: investments, and real estate, most of which were limited partnerships.
−Removed: These investments include investee level expenses, reflecting asset level operating expenses on directly held real estate and other consolidated investments.
−Removed: Macroeconomic impacts Future investment results will be influenced by the magnitude and duration of the global pandemic and the impact of actions taken by governmental authorities, businesses and consumers, which creates significant uncertainty.
−Removed: Supply chain disruptions, labor shortages and other macroeconomic factors have increased inflation, which may have an adverse impact on investment valuations and returns.
−Removed: Investments in Russia and Ukraine As of June 30, 2022, we do not have any direct investments in Russia, Belarus or Ukraine.
+Added: Performance-based strategy seeks to deliver attractive risk-adjusted returns and supplement market risk with idiosyncratic risk primarily through investments in private equity, including infrastructure investments, and real estate, most of which were limited partnerships.
+Added: These investments include investee level expenses, reflecting asset level
+Added: operating expenses on directly held real estate and other consolidated investments.
+Added: 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.
+Added: Over the past several quarters, inflation continued to remain elevated, which led to increases in interest rates by the Federal Reserve and a widening of credit spreads reflecting ongoing recession concerns.
+Added: Many governmental authorities and central banks have begun to respond to inflationary pressure, generally through more restrictive monetary policy, such as increasing target interest rates.
+Added: These actions and other ongoing impacts from the pandemic could create significant economic uncertainty.
+Added: Market volatility resulting from these factors has and may continue to impact our investment valuations and returns.
+Added: Investments in Russia and Ukraine As of September 30, 2022, we do not have any direct investments in Russia, Belarus or Ukraine.
We have indirect exposure of less than $1 million in Russia and Ukraine through broad-based, global funds managed by external asset managers.
−Removed: Second Quarter 2022 Form 10-Q 67
+Added: Third Quarter 2022 Form 10-Q 69
Portfolio composition by investment strategy
−Removed: June 30, 2022
+Added: September 30, 2022
($ in millions) Market-
11 unchanged sentences
Limited partnership interests — 7 7
+Added: Short-term investments (1) — (1)
Other (3) — (3)
3 unchanged sentences
Fair value as of
−Removed: ($ in millions) June 30, 2022 December 31, 2021
+Added: ($ in millions) September 30, 2022 December 31, 2021
government and agencies $ 8,444 $ 6,273
6 unchanged sentences
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.
−Removed: 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.
+Added: The NAIC assigns securities to one of six credit quality categories defined as “NAIC designations”.
+Added: In general, securities with NAIC designations of 1 and 2 are considered investment grade and securities with NAIC designations of 3 through 6 are considered below investment grade.
The rating is either received from the SVO based on availability of applicable ratings from rating agencies on the NAIC Nationally Recognized Statistical Rating Organizations (“NRSRO”) provider list, including Moody’s Investors Service (“Moody’s”), S&P Global Ratings (“S&P”), Fitch Ratings (“Fitch”), or a comparable internal rating.
As a result of time lags between the funding of investments, the finalization of legal documents, and the completion of the SVO filing process, the portfolio includes certain securities that have not yet been designated by the SVO as of each balance sheet date and the categorization of these securities is based on the expected ratings indicated by internal analysis .
−Removed: As of June 30, 2022, 88.8% of the consolidated fixed income securities portfolio was rated investment grade.
+Added: As of September 30, 2022, 89.4% of the consolidated fixed income securities portfolio was rated investment grade.
Credit ratings below these designations are considered lower credit quality or below investment grade, which includes high yield bonds.
7 unchanged sentences
Fair value and unrealized net capital gains (losses) for fixed income securities by credit rating
−Removed: June 30, 2022
+Added: September 30, 2022
NAIC 1 NAIC 2 NAIC 3
31 unchanged sentences
For further detail on our mortgage loan portfolio, see Note 5 of the condensed consolidated financial statements.
−Removed: Limited partnership interests include $6.58 billion of interests in private equity funds, $928 million of interests in real estate funds and $437 million of interests in other funds as of June 30, 2022.
−Removed: We have commitments to invest additional amounts in limited partnership interests totaling $2.64 billion as of June 30, 2022.
−Removed: Other investments include $868 million of bank loans, net, and $741 million of direct investments in real estate as of June 30, 2022.
−Removed: Second Quarter 2022 Form 10-Q 69
+Added: Limited partnership interests include $6.57 billion of interests in private equity funds, $919 million of interests in real estate funds and $421 million of interests in other funds as of September 30, 2022.
+Added: We have commitments to invest additional amounts in limited partnership interests totaling $2.69 billion as of September 30, 2022.
+Added: Other investments include $748 million of bank loans, net, and $774 million of direct investments in real estate as of September 30, 2022.
+Added: Third Quarter 2022 Form 10-Q 71
Unrealized net capital gains (losses)
−Removed: June 30, December 31,
+Added: September 30, December 31,
($ in millions) 2022 2021
10 unchanged sentences
Gross unrealized gains (losses) on fixed income securities by type and sector
−Removed: June 30, 2022
+Added: September 30, 2022
($ in millions) Amortized
47 unchanged sentences
Similarly, gross unrealized gains reflect a decrease in market yields since the time of initial purchase.
−Removed: Second Quarter 2022 Form 10-Q 71
+Added: Third Quarter 2022 Form 10-Q 73
Equity securities by sector
−Removed: June 30, 2022 December 31, 2021
+Added: September 30, 2022 December 31, 2021
($ in millions) Cost Over (under) cost Fair
17 unchanged sentences
Net investment income
−Removed: Three months ended June 30, Six months ended June 30,
+Added: Three months ended September 30, Nine months ended September 30,
($ in millions) 2022 2021 2022 2021
20 unchanged sentences
Investment income, before expense $ 754 $ 801 $ 2,017 $ 2,561
−Removed: Net investment income decreased $412 million and $526 million in the second quarter and first six months of 2022, respectively, compared to the same periods of 2021, primarily due to lower performance-based results, mainly from limited partnerships.
−Removed: The decrease in the second quarter was slightly offset by higher market-based fixed income portfolio yields.
+Added: Net investment income decreased $74 million and $600 million in the third quarter and first nine months of 2022, respectively, compared to the same periods of 2021, primarily due to lower performance-based results, mainly from limited partnerships, partially offset by higher market-based fixed income portfolio yields.
74 www.allstate.com
Performance-based investment income
−Removed: Three months ended June 30, Six months ended June 30,
+Added: Three months ended September 30, Nine months ended September 30,
($ in millions) 2022 2021 2022 2021
6 unchanged sentences
(1) Investee level expenses include asset level operating expenses reported in investment expense.
−Removed: Performance-based investment income decreased $413 million and $485 million in the second quarter and first six months of 2022, respectively, compared to strong results in the same periods of 2021, primarily due to lower valuation increases and net gains on the sale of underlying investments.
+Added: Performance-based investment income decreased $102 million and $587 million in the third quarter and first nine months of 2022, respectively, compared to strong results in the same periods of 2021, primarily due to lower valuation increases, partially offset by net gains on the sale of underlying investments.
+Added: Three individual investments generated 97% of the performance-based investment income in the third quarter.
Performance-based investment results and income can vary significantly between periods and are
2 unchanged sentences
Components of net gains (losses) on investments and derivatives and the related tax effect
−Removed: Three months ended June 30, Six months ended June 30,
+Added: Three months ended September 30, Nine months ended September 30,
($ in millions) 2022 2021 2022 2021
20 unchanged sentences
(1) Relates to limited partnerships where the underlying assets are predominately public equity securities.
−Removed: Net losses on investments and derivatives in the second quarter and first six months of 2022 related primarily to lower valuation on equity investments and losses on sales, partially offset by increased valuation change and settlements of derivatives.
−Removed: Sales in the second quarter and first six months of 2022 related primarily to sales of fixed income securities in connection with ongoing portfolio management.
−Removed: Valuation change and settlements of derivatives of $272 million and $590 million in the second quarter and first six months of 2022, respectively, primarily comprised of gains on interest rate futures used as part of an interest rate risk reduction strategy to mitigate the impact of increases in interest rates and gains on equity futures and options used to mitigate the impact of declining equity markets.
−Removed: Second Quarter 2022 Form 10-Q 73
+Added: Net losses on investments and derivatives in the third quarter and first nine months of 2022 related primarily to lower valuation on equity investments and losses on sales, partially offset by increased valuation change and settlements of derivatives.
+Added: Sales in the third quarter and first nine months of 2022 related primarily to sales of fixed income securities in connection with ongoing portfolio management.
+Added: Valuation change and settlements of derivatives of $299 million and $889 million in the third quarter and first nine months of 2022, respectively, primarily comprised of gains on interest rate futures used as part of an interest rate risk reduction strategy to mitigate the impact of increases in interest rates and gains on foreign currency contracts due to the strengthening of the U.S dollar.
+Added: Third Quarter 2022 Form 10-Q 75
Net gains (losses) on performance-based investments and derivatives
−Removed: Three months ended June 30, Six months ended June 30,
+Added: Three months ended September 30, Nine months ended September 30,
($ in millions) 2022 2021 2022 2021
4 unchanged sentences
Total performance-based $ (11) $ 31 $ 71 $ 159
−Removed: Net gains on performance-based investments and derivatives in the second quarter and first six months of 2022 primarily related to increased valuation change and settlements of derivatives and gains on sales, partially offset by decreased valuation of equity investments.
+Added: Net losses on performance-based investments and derivatives in the third quarter of 2022 primarily related to decreased valuation of equity investments, partially offset by increased valuation change and settlements of derivatives.
+Added: Net gains on performance-based investments and derivatives in the first nine months of 2022 primarily related to increased valuation change and settlements of derivatives and gains on sales, partially offset by decreased valuation of equity investments.
76 www.allstate.com
3 unchanged sentences
Capital resources
−Removed: ($ in millions) June 30, 2022 December 31, 2021
+Added: ($ in millions) September 30, 2022 December 31, 2021
Preferred stock, common stock, treasury stock, retained income and other shareholders’ equity items $ 20,716 $ 24,524
5 unchanged sentences
Ratio of debt to capital resources 31.1 24.1
−Removed: Allstate shareholders’ equity decreased in the first six months of 2022, primarily due to net unrealized capital losses on investments in 2022 compared to gains at December 31, 2021, common share repurchases, dividends paid to shareholders and a net loss.
−Removed: In the six months ended June 30, 2022, we paid dividends of $466 million and $53 million related to our common and preferred shares, respectively.
+Added: Allstate shareholders’ equity decreased in the first nine months of 2022, primarily due to net unrealized capital losses on investments in 2022 compared to gains at December 31, 2021, common share repurchases, a net loss and dividends paid to shareholders.
+Added: In the nine months ended September 30, 2022, we paid dividends of $698 million and $79 million related to our common and preferred shares, respectively.
Debt maturities We do not have any scheduled debt maturities in 2022.
4 unchanged sentences
Total long-term debt principal $ 7,991
−Removed: Common share repurchases As of June 30, 2022, there was $1.82 billion remaining in the $5.00 billion common share repurchase program that is expected to be completed by March 31, 2023.
−Removed: During the first six months of 2022, we repurchased 11.6 million common shares, or 4.1% of total common shares outstanding at December 31, 2021, for $1.48 billion.
−Removed: Common shareholder dividends On January 3, 2022 and April 1, 2022, we paid a common shareholder dividend of $0.81 and $0.85, respectively.
−Removed: On May 23, 2022, we declared a common shareholder dividend of $0.85 payable on July 1, 2022.
+Added: Common share repurchases As of September 30, 2022, there was $1.16 billion remaining in the $5.00 billion common share repurchase program.
+Added: We expect the program to be completed after March 31, 2023, as we moderate the pace of share repurchases.
+Added: During the first nine months of 2022, we repurchased 17.0 million common shares, or 6.1% of total common shares outstanding at December 31, 2021, for $2.14 billion.
+Added: Common shareholder dividends On January 3, 2022, April 1, 2022 and July 1, 2022 we paid a common shareholder dividend of $0.81, $0.85 and $0.85 respectively.
+Added: On July 19, 2022, we declared a common shareholder dividend of $0.85 payable on October 3, 2022.
Financial ratings and strength Our ratings are influenced by many factors including our operating and financial performance, asset quality, liquidity, overall portfolio mix, financial leverage (i.e., debt), exposure to risks such as catastrophes and the current level of operating leverage.
−Removed: The preferred stock and subordinated debentures are viewed as having a common equity component by certain rating agencies and are given equity credit up to a pre-determined limit in our capital structure as determined by their respective methodologies.
−Removed: These respective
−Removed: methodologies consider the existence of certain terms and features in the instruments such as the noncumulative dividend feature in the preferred stock.
+Added: The preferred stock and subordinated debentures are viewed as having a common equity component by certain rating agencies
+Added: and are given equity credit up to a pre-determined limit in our capital structure as determined by their respective methodologies.
+Added: These respective methodologies consider the existence of certain terms and features in the instruments such as the noncumulative dividend feature in the preferred stock.
In May 2022, Moody’s affirmed The Allstate Corporation’s (the “Corporation’s”) debt and short-term issuer ratings of A3 and P-2, respectively, and the insurance financial strength rating of Aa3 for Allstate Insurance Company (“AIC”).
2 unchanged sentences
The outlook for the ratings is stable.
−Removed: There have been no changes to our ratings for A.M.
−Removed: Best since December 31, 2021.
+Added: In August 2022, A.M.
+Added: Best affirmed the Corporation’s debt and short-term issuer ratings of a and AMB-1+, respectively, and the insurance financial strength rating of A+ for AIC.
+Added: The outlook for the ratings is stable.
Liquidity sources and uses We actively manage our financial position and liquidity levels in light of changing market, economic and business conditions.
6 unchanged sentences
AIC serves as a lender and borrower, certain other subsidiaries serve only as borrowers, and the Corporation serves only as a lender.
−Removed: The maximum amount of potential funding under each of these agreements is $1.00 billion.
−Removed: In addition to the Liquidity Agreement, the Corporation also has an intercompany loan agreement with certain of its subsidiaries, which includes, but is not limited to, AIC.
−Removed: The amount of intercompany loans available to the Corporation’s subsidiaries is at the
−Removed: Second Quarter 2022 Form 10-Q 75
+Added: Third Quarter 2022 Form 10-Q 77
Capital Resources and Liquidity
−Removed: discretion of the Corporation.
+Added: amount of potential funding under each of these agreements is $1.00 billion.
+Added: In addition to the Liquidity Agreement, the Corporation also has an intercompany loan agreement with certain of its subsidiaries, which includes, but is not limited to, AIC.
+Added: The amount of intercompany loans available to the Corporation’s subsidiaries is at the discretion of the Corporation.
The maximum amount of loans the Corporation will have outstanding to all its eligible subsidiaries at any given point in time is limited to $1.00 billion.
The Corporation may use commercial paper borrowings, bank lines of credit and securities lending to fund intercompany borrowings.
−Removed: Parent company capital capacity Parent holding company deployable assets totaled $5.13 billion as of June 30, 2022, primarily comprised of cash and investments that are generally saleable within one quarter.
+Added: Parent company capital capacity Parent holding company deployable assets totaled $4.47 billion as of September 30, 2022, primarily comprised of cash and investments that are generally saleable within one quarter.
The earnings capacity of the operating subsidiaries is the primary source of capital generation for the Corporation.
−Removed: As of June 30, 2022, we held $13.52 billion of cash, U.S.
+Added: As of September 30, 2022, we held $13.38 billion of cash, U.S.
government and agencies fixed income securities, and public equity securities which we would expect to be able to liquidate within one week.
−Removed: Intercompany dividends were paid in the first six months of 2022 between the following companies:
+Added: Intercompany dividends were paid in the first nine months of 2022 between the following companies:
AIC, Allstate Insurance Holdings, LLC (“AIH”), the Corporation, American Heritage Life Insurance Company (“AHL”) and Allstate Financial Insurance Holdings Corporation (“AFIHC”).
4 unchanged sentences
AHL to AFIHC 50
+Added: AFIHC to the Corporation 47
Based on the greater of 2021 statutory net income or 10% of statutory surplus, the maximum amount of dividends that AIC will be able to pay, without prior Illinois Department of Insurance approval, at a given point in time through February 2023 is estimated at $5.51 billion, less dividends paid during the preceding twelve months measured at that point in time.
−Removed: As of June 30, 2022, we paid dividends of $3.95 billion.
+Added: As of September 30, 2022, we paid dividends of $4.20 billion.
Dividends may not be paid or declared on our common stock and shares of common stock may not be repurchased unless the full dividends for the latest completed dividend period on our preferred stock have been declared and paid or provided for.
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, except out of the net proceeds of common stock issued during the 90 days prior to the date of declaration.
−Removed: As of June 30, 2022, we satisfied all the requirements with no current restrictions on the payment of preferred stock dividends.
+Added: As of September 30, 2022, we satisfied all the requirements with no current restrictions on the payment of preferred stock dividends.
The terms of our outstanding subordinated debentures also prohibit us from declaring or paying any dividends or distributions on our common or preferred stock or redeeming, purchasing, acquiring, or making liquidation payments on our common stock or preferred stock if we have elected to defer interest payments on the subordinated debentures, subject to certain limited exceptions.
−Removed: In the first six months of 2022, we did not defer interest payments on the subordinated debentures.
+Added: In the first nine months of 2022, we did not defer interest payments on the subordinated debentures.
Additional resources to support liquidity are as follows:
5 unchanged sentences
This facility has a financial covenant requiring that we not exceed a 37.5% debt to capitalization ratio as defined in the agreement.
−Removed: This ratio was 20.5% as of June 30, 2022.
+Added: This ratio was 21.6% as of September 30, 2022.
Although the right to borrow under the facility is not subject to a minimum rating requirement, the costs of maintaining the facility and borrowing under it are based on the ratings of our senior unsecured, unguaranteed long-term debt.
1 unchanged sentence
• To cover short-term cash needs, the Corporation has access to a commercial paper facility with a borrowing capacity limited to any undrawn credit facility balance up to $750 million.
−Removed: • As of June 30, 2022, there were no balances outstanding for the credit facility or the commercial paper facility and therefore the remaining borrowing capacity was $750 million.
+Added: • As of September 30, 2022, there were no balances outstanding for the credit facility or the commercial paper facility and therefore the remaining borrowing capacity was $750 million.
• The Corporation has access to a universal shelf registration statement with the Securities and Exchange Commission that expires in 2024.
−Removed: We can use this shelf registration to issue an unspecified amount of debt securities, common stock (including 629 million shares of treasury stock as of June 30, 2022), preferred stock, depositary shares, warrants, stock purchase contracts, stock purchase units and securities of trust subsidiaries.
+Added: We can use this shelf registration to issue an unspecified amount of debt securities, common stock (including 634 million shares of treasury stock as of September 30, 2022), preferred stock, depositary shares, warrants, stock purchase contracts, stock purchase units and securities of trust subsidiaries.
The specific terms of any securities we issue under this registration statement will be provided in the applicable prospectus supplements.
3 unchanged sentences
Regulation in our annual report on Form 10-K for the year ended December 31, 2021.
−Removed: Securities and Exchange Commission (“SEC”) proposed rule changes
Climate disclosures.
−Removed: In March 2022, the SEC released its climate-related proposed regulation, requiring registrants to provide certain climate-related information in their registration statements and annual reports.
+Added: In March 2022, the Securities and Exchange Commission (“SEC”) released its climate-related proposed regulation, requiring registrants to provide certain climate-related information in their registration statements and annual reports.
The proposed rule would require information about a registrant’s climate-related risks that are reasonably likely to have a material impact on its business, results of operations, or financial condition.
11 unchanged sentences
The Company is evaluating the anticipated impacts of the proposed guidance to its disclosures.
−Removed: Second Quarter 2022 Form 10-Q 77
+Added: Inflation Reduction Act of 2022.
+Added: The Inflation Reduction Act of 2022 (“Act”), which contains several tax-related provisions, was signed into law in August 2022.
+Added: The Act creates a 15% corporate alternative minimum tax on certain large corporations and an excise tax of 1% on stock repurchases by publicly traded U.S.
+Added: corporations, effective for repurchases after December 31, 2022.
+Added: The excise tax on stock repurchases will be classified as an additional cost of the stock acquired included in treasury stock in shareholders' equity.
+Added: The Company is evaluating the anticipated impacts of the enacted legislation.
+Added: Third Quarter 2022 Form 10-Q 79
Forward-Looking Statements
38 unchanged sentences
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.