What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2024-05-01 compared with 2023-11-01 · 270 added, 433 removed, 726 unchanged (49% of the section changed)

4 unchanged sentences

of The Allstate Corporation annual report on Form 10-K for 2023, filed February 21, 2024.

Certain amounts have been reclassified to conform to current year presentation.

Further analysis of our insurance segments is provided in the Property-Liability Operations and Segment Results sections, including Allstate Protection and Run-off Property-Liability, Protection Services and Allstate Health and Benefits, of Management’s Discussion and Analysis (“MD&A”).

The segments are consistent with the way in which the chief operating decision maker reviews financial performance and makes decisions about the allocation of resources.

On November 1, 2023, we announced that we are pursuing the sale of the Health and Benefits business.

We continue to pursue the sale of the business but have not completed the sale process.

Macroeconomic Impacts

Macroeconomic factors have and may continue to impact the results of our operations, financial condition and liquidity, such as U.S.

government fiscal and monetary policies, banking system instability, the Russia/Ukraine and Israel/Hamas conflicts and the remaining impacts of the Novel Coronavirus Pandemic or COVID-19 (“Coronavirus”), through longer-term impacts such as supply chain disruptions, labor shortages and other macroeconomic factors that have increased inflation.

Inflation continues to remain elevated, which led to increases in interest rates by the Federal Reserve and a widening of credit spreads reflecting ongoing recession concerns.

Many foreign governmental authorities and central banks have also responded to inflationary pressure, generally through more restrictive monetary policy, such as increasing target interest rates.

These actions could create significant economic uncertainty.

Market volatility resulting from these factors and from disruptions in the banking industry have and may continue to impact our investment valuations and returns.

These factors have affected our operations and may continue to significantly affect our results of operations, financial condition and liquidity and should be considered when comparing the current period to prior periods.

government fiscal and monetary policies, the Russia/Ukraine and Israel/Hamas conflicts, supply chain disruptions, labor shortages and other macroeconomic factors that have increased inflation.

These factors have affected our operations and may continue to affect our results of operations, financial condition and liquidity and should be considered when comparing the current period to prior periods.

This is not inclusive of all potential impacts and should not be treated as such.

5 unchanged sentences

This is done by providing affordable, simple and connected protection through multiple distribution methods.

The ultimate objective is to create continuous transformative growth in all businesses.

The ultimate objective is to enhance customer value to drive growth in all businesses.

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

2 unchanged sentences

• Increasing sophistication and investment in customer acquisition

• Modernizing the technology ecosystem

• Deploying new technology ecosystem

• Driving organizational transformation

2 unchanged sentences

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

We use these measures in our evaluation of results of operations to analyze profitability.

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

We use this measure in our evaluation of results of operations to analyze profitability.

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

5 unchanged sentences

• Income tax expense or benefit on reconciling items

52 www.allstate.com

First Quarter 2024 Form 10-Q 43

Consolidated net income (loss) applicable to common shareholders

($ in millions)

Consolidated net loss applicable to common shareholders was $41 million in the third quarter of 2023 compared to a loss of $685 million in the third quarter of 2022, primarily due to higher Property-Liability premiums earned and lower unfavorable prior year reserve reestimates.

Net loss was $1.78 billion in the first nine months of 2023 compared to a loss of $1.09 billion in the first nine months of 2022 primarily due to higher catastrophe losses and higher incurred losses driven by severity, partially offset by increased Property-Liability premiums earned, lower unfavorable prior year reserve reestimates and gains on equity valuations in 2023 compared to losses in 2022.

For the nine months ended September 30, 2023, return on Allstate common shareholders’ equity was (14.7)%.

Consolidated net income applicable to common shareholders was $1.19 billion in the first quarter of 2024 compared to a loss of $346 million in the first quarter of 2023, primarily due to improved underwriting results.

For the twelve months ended March 31, 2024, return on Allstate common shareholders’ equity was 7.6%, an increase of 20.6 points from (13.0)% for the twelve months ended March 31, 2023.

Total revenue

($ in millions)

Total revenues increased 9.8% to $14.50 billion and increased 11.9% to $42.26 billion in the third quarter and first nine months of 2023, respectively, compared to the same periods of 2022 due to an increase of 10.1% and 10.2% in property and casualty insurance premiums earned in the third quarter and first nine months of 2023, respectively, compared to the third quarter and first nine months of 2022 and net gains on equity valuations in the first nine months of 2023 compared to losses in 2022.

Total revenues increased 10.7% to $15.26 billion in the first quarter of 2024 compared to the first quarter of 2023, primarily due to an increase of 11.0% in property and casualty insurance premiums earned.

Net investment income

($ in millions)

Net investment income decreased $1 million to $689 million in the third quarter of 2023, primarily due to lower performance-based investment results, partially offset by higher market-based income reflecting higher fixed income portfolio yields and investment balances.

Net investment income increased $28 million to $1.87 billion in the first nine months of 2023 compared to the same periods of 2022, primarily due to higher market-based income reflecting higher fixed income portfolio yields and investment balances, partially offset by lower performance-based investment results.

Third Quarter 2023 Form 10-Q 53

Net investment income increased $189 million to $764 million in the first quarter of 2024, primarily due to an increase in market-based income reflecting higher fixed income portfolio yields and investment balances, and higher performance-based valuation increases.

Financial highlights

Investments totaled $63.36 billion as of September 30, 2023, increasing from $61.83 billion as of December 31, 2022.

Allstate shareholders’ equity was $14.59 billion as of September 30, 2023, decreasing from $17.49 billion as of December 31, 2022, primarily due to a net loss, dividends paid to shareholders, common share repurchases, and higher unrealized net capital losses on investments.

Book value per diluted common share (ratio of Allstate common shareholders’ equity to total common shares outstanding and dilutive potential common shares outstanding) was $47.79, a decrease of 18.2% from $58.39 as of September 30, 2022, and a decrease of 17.8% from $58.12 as of December 31, 2022.

Return on average Allstate common shareholders’ equity For the twelve months ended September 30, 2023, return on Allstate common shareholders’ equity was (14.7)%, a decrease of 13.2 points from (1.5)% for the twelve months ended September 30, 2022.

The decrease was primarily due to a net loss applicable to common shareholders for the trailing twelve-month period ending September 30, 2023 and a decrease in average Allstate common shareholders’ equity.

Pension and other postretirement remeasurement gains and losses We recorded pension and other postretirement remeasurement losses of $149 million in the third quarter due to lower equity and fixed income valuations from higher market yields during the quarter.

We recorded losses of $56 million in the first nine months of 2023 due to lower fixed income valuations from higher market yields, partially offset by higher equity valuations.

Investments totaled $67.86 billion as of March 31, 2024, increasing from $66.68 billion as of December 31, 2023.

Allstate shareholders’ equity was $18.64 billion as of March 31, 2024, increasing from $17.77 billion as of December 31, 2023, primarily due to net income, partially offset by dividends to shareholders and higher unrealized net capital losses on investments.

Book value per diluted common share (ratio of Allstate common shareholders’ equity to total common shares outstanding and dilutive potential common shares outstanding) was $62.27, an increase of 6.2% from $58.65 as of March 31, 2023, and an increase of 4.8% from $59.39 as of December 31, 2023.

Return on average Allstate common shareholders’ equity for the twelve months ended March 31, 2024 was 7.6%, an increase of 20.6 points from (13.0)% for the twelve months ended March 31, 2023.

The increase was primarily due to net income applicable to common shareholders for the trailing twelve-month period ending March 31, 2024 compared to a net loss for the twelve-month period ending March 31, 2023.

Pension and other postretirement remeasurement gains and losses We recorded pension and other postretirement remeasurement gains of $2 million in the first quarter of 2024, primarily related to an increase in the liability discount rate, partially offset by unfavorable asset performance compared to expected return on plan assets.

44 www.allstate.com

Summarized consolidated financial results

Three months ended September 30, Nine months ended September 30,

Three months ended March 31,

($ in millions) 2024 2023

13 unchanged sentences

Total costs and expenses (13,795) (14,192)

Loss from operations before income tax expense (21) (910) (2,175) (1,420)

Income tax benefit 17 236 475 374

Net loss (4) (674) (1,700) (1,046)

Net income (loss) attributable to noncontrolling interest 1 (15) (23) (34)

Net loss attributable to Allstate (5) (659) (1,677) (1,012)

Income (loss) from operations before income tax expense 1,464 (406)

Income tax (expense) benefit (266) 85

Net income (loss) 1,198 (321)

Net loss attributable to noncontrolling interest (20) (1)

Net income (loss) attributable to Allstate 1,218 (320)

Preferred stock dividends (29) (26)

Net loss applicable to common shareholders $ (41) $ (685) $ (1,776) $ (1,091)

Net income (loss) applicable to common shareholders $ 1,189 $ (346)

Segment highlights

Allstate Protection underwriting loss was $331 million in the third quarter of 2023 compared to underwriting loss of $1.17 billion in the third quarter of 2022 due to increased premiums earned and lower unfavorable non-catastrophe reserve reestimates, partially offset by higher losses.

Underwriting loss totaled $3.42 billion in the first nine months of 2023 compared to underwriting loss of $1.75 billion in the first nine months of 2022 due to higher losses primarily for auto insurance, partially offset by increased premiums and lower unfavorable reserve reestimates.

We are executing a comprehensive plan to improve auto insurance profitability, by raising rates, reducing operating expenses and advertising, implementing underwriting restrictions in underperforming states and enhancing claims processes to manage loss costs.

Catastrophe losses were $1.18 billion and $5.57 billion in the third quarter and first nine months of 2023, respectively, compared to $763 million and $2.33 billion in the third quarter and first nine months of 2022, respectively.

54 www.allstate.com

Premiums written increased 10.5% to $13.30 billion and 9.9% to $37.71 billion in the third quarter and first nine months of 2023, respectively, compared to the same periods of 2022, reflecting higher premiums in both Allstate and National General brands.

Protection Services adjusted net income was $27 million in the third quarter of 2023 compared to $35 million in the third quarter of 2022.

Adjusted net income was $102 million in the first nine months of 2023 compared to $131 million in the first nine months of 2022.

The decrease in both periods was due to Allstate Protection Plans higher appliance and furniture claim severity, lower margins at Allstate Dealer Services, lower third-party advertising sales at Arity and higher restructuring charges across multiple businesses, partially offset by improved margins at Allstate Roadside and lower expenses at Allstate Identity Protection.

Premiums and other revenue increased 9.5% or $56 million and 8.9% or $155 million in the third quarter and first nine months of 2023, respectively, compared to the same periods of 2022, primarily due to Allstate Protection Plans.

Allstate Health and Benefits adjusted net income was $69 million in the third quarter of 2023 compared to $63 million in the third quarter of 2022, primarily due to increases in group and individual health, partially offset by a decline in employer voluntary benefits.

Adjusted net income was $182 million in the first nine months of 2023 compared to $187 million in the first nine months of 2022, primarily due to a decline in employer voluntary benefits, partially offset by increases in group and individual health.

Premiums and contract charges were $463 million in the third quarter of 2023 and comparable to the third quarter of 2022.

Premiums and contract charges decreased 1.2% to $1.38 billion in the first nine months of 2023 compared to the same period of 2022, primarily due to a decline in individual health and employer voluntary benefits, partially offset by growth in group health.

Adopted accounting standard

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

Under the new guidance, measurement assumptions, including those for mortality, morbidity and policy lapses, are required to be reviewed at least annually, and updated as appropriate.

In addition, reserves under the new guidance are required to be discounted using an upper-medium grade fixed income instrument yield that is updated through other comprehensive income (“OCI”) at each reporting date.

Additionally, DAC for all long-duration products are amortized on a simplified basis.

Our reserve for future policy benefits and DAC are subject to new disclosure guidance.

In addition, the Company met the conditions included in Accounting Standards Update No.

2022-05, Transition for Sold Contracts , and elected to not apply the new guidance for contracts that were part of the 2021 sales of Allstate Life Insurance Company and Allstate Life Insurance Company of New York.

After-tax cumulative effect of change in accounting principle on transition date

($ in millions) January 1, 2021

Decrease in retained income $ 21

Decrease in accumulated other comprehensive income (“AOCI”) 277

Total decrease in equity $ 298

The decrease in AOCI was primarily attributable to a change in the discount rate used in measuring the reserve for future policy benefits for traditional life contracts and other long-term products with guaranteed terms from a portfolio-based rate at contract issuance to an upper-medium grade fixed income-based rate at the transition date.

The decrease in retained income primarily related to certain cohorts of long-term contracts whose expected net premiums exceeded expected gross premiums which resulted in an increase in reserves and a decrease in retained income equal to the present value of expected future benefits less the present value of expected future premiums at the transition date.

See Note 1 of the condensed consolidated financial statements for further information regarding the impact of the adopted accounting standard on our condensed consolidated financial statements.

Third Quarter 2023 Form 10-Q 55

Allstate Protection underwriting income was $903 million in the first quarter of 2024 compared to underwriting loss of $998 million in the first quarter of 2023 due to increased premiums earned and lower catastrophe losses, partially offset by higher non-catastrophe losses and advertising costs.

We continue to execute a comprehensive approach to restore auto margins, by raising rates in states not currently achieving acceptable returns, reducing operating expenses and continuing to enhance claims processes to manage loss costs.

As auto profitability improves, we are increasing advertising and removing underwriting restrictions to support growth.

Catastrophe losses decreased $960 million to $731 million in the first quarter of 2024 compared to the first quarter of 2023.

Premiums written increased 11.9% to $13.18 billion in the first quarter of 2024 compared to the same period of 2023, reflecting higher premiums in both Allstate and National General brands.

Protection Services adjusted net income was $54 million in the first quarter of 2024 compared to $34 million in the first quarter of 2023.

The increase was primarily due to gross margin improvement at Allstate Protection Plans and improved claim severity at Allstate Roadside.

Premiums and other revenue increased 12.1% or $75 million in the first quarter of 2024 compared to the same period of 2023, primarily due to Allstate Protection Plans.

Allstate Health and Benefits adjusted net income was $56 million in the first quarter of 2024 and 2023.

Premiums and contract charges increased 3.2% to $478 million in the first quarter of 2024 compared to the first quarter of 2023, primarily due to growth in group health and individual health, partially offset by a decline in employer voluntary benefits.

First Quarter 2024 Form 10-Q 45

Property-Liability Operations

25 unchanged sentences

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.

Commercial lines PIF counts for shared economy agreements reflected contracts that covered multiple rather than individual drivers.

Lender-placed policies are excluded from policy counts because relationships are with the lenders.

10 unchanged sentences

states, the District of Columbia or Canadian provinces) where rate changes were implemented during the period as a percentage of total brand prior year-end premiums written.

Frequency and severity statistics , which are influenced by driving patterns, inflation and other factors, are provided to describe the trends in loss costs.

Our reserving process incorporates changes in loss patterns, operational statistics and changes in claims reporting processes to determine our best estimate of recorded reserves.

We use the following statistics to evaluate losses:

• Gross claim frequency is calculated as annualized notice counts, excluding counts associated with catastrophe events, received in the period divided by the average of PIF with the applicable coverage during the period.

Gross claim frequency includes all actual notice counts, regardless of their current status (open or closed) or their ultimate disposition (closed with a payment or closed without payment).

46 www.allstate.com

Property-Liability Operations

• Report year incurred claim severity is calculated by dividing the sum of recorded estimated incurred losses and allocated loss adjustment expenses, excluding catastrophes, by the reported notice counts during that report year.

Report year incurred claim severity does not include incurred but not reported (“IBNR”) losses or benefits from subrogation and salvage.

• Paid claim severity is calculated by dividing the sum of paid losses and loss expenses by claims closed with a payment during the period.

• Percent change in frequency or paid claim severity statistics are calculated as the amount of increase or decrease in gross claim frequency or paid claim severity in the current period compared to the same period in the prior year, divided by the prior year gross claim frequency or paid claim severity.

• Percent change in report year incurred claim severity statistic is calculated as the amount of increase or decrease in report year incurred claim severity recorded in the year-to-date period divided by the current estimate of the prior report year incurred claim severity.

Underwriting results

Three months ended September 30, Nine months ended September 30,

Three months ended March 31,

($ in millions, except ratios) 2024 2023

6 unchanged sentences

Restructuring and related charges (1)

(74) (14) (121) (24)

Amortization of purchased intangibles (51) (57)

Underwriting (loss) income $ (414) $ (1,292) $ (3,509) $ (1,876)

Underwriting income (loss) $ 898 $ (1,001)

Catastrophe losses

3 unchanged sentences

Non-catastrophe reserve reestimates (2)

$ 166 $ 875 $ 375 $ 1,444

Prior year reserve reestimates (2)

183 866 381 1,473

GAAP operating ratios

1 unchanged sentence

Expense ratio (3)

21.2 22.6 20.9 23.2

Combined ratio 93.0 108.6

3 unchanged sentences

Effect of restructuring and related charges on combined ratio (1)

0.6 0.1 0.3 0.1

Effect of amortization of purchased intangibles on combined ratio 0.3 0.5

Effect of Run-off Property-Liability business on combined ratio — —

(1) Restructuring and related charges for the third quarter of 2023 primarily relate to implementing actions to achieve the organizational transformation component of the Transformative Growth plan designed to streamline the organization and outsource operations .

Restructuring and related charges for the first nine months of 2023 primarily relate to the organizational transformation and real estate costs related to facilities being vacated.

(1) Restructuring and related charges for the first quarter of 2024 primarily relate to implementing actions to streamline the organization and outsource operations, and real estate costs related to facilities being vacated.

See Note 12 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.

Third Quarter 2023 Form 10-Q 57

First Quarter 2024 Form 10-Q 47

Segment Results Allstate Protection

1 unchanged sentence

Underwriting results

Three months ended September 30, Nine months ended September 30,

Three months ended March 31,

($ in millions) 2024 2023

7 unchanged sentences

Amortization of purchased intangibles (51) (57)

Underwriting loss $ (331) $ (1,170) $ (3,421) $ (1,749)

Underwriting income (loss) $ 903 $ (998)

Catastrophe losses $ 731 $ 1,691

Underwriting loss improved to $331 million in the third quarter compared to underwriting loss of $1.17 billion in the third quarter of 2022 due to increased premiums earned and lower unfavorable non-catastrophe reserve reestimates, partially offset by higher losses.

Underwriting loss was $3.42 billion in the first nine months of 2023 compared to underwriting loss of $1.75 billion in the first nine months of 2022 due to higher losses primarily for auto insurance, partially offset by increased premiums and lower unfavorable reserve reestimates.

Underwriting income was $903 million in the first quarter of 2024 compared to underwriting loss of $998 million in the first quarter of 2023 due to increased premiums earned and lower catastrophe losses, partially offset by higher non-catastrophe losses and advertising costs.

As auto profitability improves, we are increasing advertising and removing underwriting restrictions to support growth.

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

($ in millions)

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

($ in millions)

58 www.allstate.com

Allstate Protection Segment Results

Underwriting income (loss) by brand and by line of business

1 unchanged sentence

($ in millions) 2024 2023 2024 2023 2024 2023

Three months ended September 30,

Three months ended March 31,

$ 261 $ (332) $ 90 $ (14) $ 351 $ (346)

Homeowners (1)

568 (508) (4) (26) 564 (534)

7 unchanged sentences

Total $ 790 $ (972) $ 110 $ (28) $ 903 $ (998)

Nine months ended September 30,

$ (953) $ (1,937) $ (249) $ (103) $ (1,202) $ (2,040)

Homeowners (1)

(1,772) 504 (200) (30) (1,972) 474

Other personal lines (159) 20 6 (1) (153) 19

Commercial lines (178) (280) (3) 6 (181) (274)

Other business lines (1)

75 70 3 (5) 78 65

Answer Financial — — — — 9 7

Total $ (2,987) $ (1,623) $ (443) $ (133) $ (3,421) $ (1,749)

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

In the first quarter of 2023, National General lender-placed products and related services results were reclassified from homeowners to other business lines.

Historical results have been updated to conform with this presentation.

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

48 www.allstate.com

Allstate Protection Segment Results

Premium measures and statistics include PIF, new issued applications, average premiums and renewal ratio to analyze our premium trends.

5 unchanged sentences

($ in millions) 2024 2023 2024 2023 2024 2023

Three months ended September 30,

Auto $ 7,206 $ 6,704 $ 1,564 $ 1,156 $ 8,770 $ 7,860

Homeowners 3,118 2,803 407 342 3,525 3,145

Other personal lines 621 564 55 42 676 606

Commercial lines 75 233 65 52 140 285

Other business lines — — 193 141 193 141

Total premiums written $ 11,020 $ 10,304 $ 2,284 $ 1,733 $ 13,304 $ 12,037

Nine months ended September 30,

Three months ended March 31,

Auto $ 7,399 $ 6,826 $ 1,958 $ 1,523 $ 9,357 $ 8,349

4 unchanged sentences

Total premiums written $ 10,509 $ 9,705 $ 2,674 $ 2,078 $ 13,183 $ 11,783

Third Quarter 2023 Form 10-Q 59

Segment Results Allstate Protection

Premiums earned by brand and by line of business

1 unchanged sentence

($ in millions) 2024 2023 2024 2023 2024 2023

Three months ended September 30,

Auto $ 6,910 $ 6,416 $ 1,435 $ 1,129 $ 8,345 $ 7,545

Homeowners 2,613 2,350 356 292 2,969 2,642

Other personal lines 554 505 54 35 608 540

Commercial lines 138 246 56 50 194 296

Other business lines — — 154 134 154 134

Total premiums earned $ 10,215 $ 9,517 $ 2,055 $ 1,640 $ 12,270 $ 11,157

Nine months ended September 30,

Three months ended March 31,

Auto $ 7,173 $ 6,660 $ 1,605 $ 1,248 $ 8,778 $ 7,908

5 unchanged sentences

Reconciliation of premiums written to premiums earned

Three months ended September 30, Nine months ended September 30,

Three months ended March 31,

($ in millions) 2024 2023

1 unchanged sentence

(Increase) decrease in unearned premiums

(1,082) (852) (1,962) (1,709)

Other (46) (21)

3 unchanged sentences

PIF (thousands) 2024 2023 2024 2023 2024 2023

As of March 31,

Auto 20,038 21,142 5,169 4,591 25,207 25,733

3 unchanged sentences

Total 31,339 32,569 6,354 5,646 37,693 38,215

Auto insurance premiums written increased 11.6% or $910 million in the third quarter of 2023 compared to the third quarter of 2022 and 10.9% or $2.50 billion in the first nine months of 2023 compared to the first nine months of 2022, primarily due to the following factors:

• Increased average premiums driven by rate increases primarily taken in 2022.

Additionally, in the nine months ended September 30, 2023:

Auto insurance premiums written increased 12.1% or $1.01 billion in the first quarter of 2024 compared to the first quarter of 2023 primarily due to the following factors:

• Increased average premiums driven by rate increases.

In the three months ended March 31, 2024:

– Rate increases of 8.4% were taken for Allstate brand in 27 locations, resulting in total Allstate brand insurance premium impact of 2.4%

– Rate increases of 12.7% were taken for National General brand in 46 locations, resulting in total National General brand insurance premium impact of 8.8%

• We expect to continue to pursue rate increases for both Allstate and National General brands for the remainder of 2023 to improve auto insurance profitability

• PIF decreased 2.9% or 755 thousand to 25,376 thousand as of September 30, 2023 compared to September 30, 2022

• Renewal ratio decreased 2.1 and 1.9 points in the third quarter and the first nine months of 2023, respectively, compared to the third quarter and first nine months of 2022

• Decreased new issued applications driven by the direct and exclusive agency channels, partially offset by growth in the independent agency channel

• The impact of the ongoing rate increases, underwriting restrictions in markets with returns below target levels and temporary reductions in advertising have and may continue to have an adverse effect on the renewal ratio, premiums and future PIF growth

60 www.allstate.com

Allstate Protection Segment Results

– Rate increases of 9.6% were taken for National General brand in 27 locations, resulting in total

National General brand insurance premium impact of 4.1%

• We expect to continue to pursue rate increases for both Allstate and National General brands in states currently not achieving acceptable returns to offset increases in loss costs throughout 2024

• PIF decreased 2.0% or 526 thousand to 25,207 thousand as of March 31, 2024 compared to March 31, 2023

• Renewal ratio increased 0.3 points in the first quarter compared to the first quarter of 2023

First Quarter 2024 Form 10-Q 49

Segment Results Allstate Protection

• Increased new issued applications driven by growth in all channels

• The impact of the ongoing rate increases and underwriting restrictions have and may continue to

have an adverse effect on the renewal ratio, premiums and future PIF growth

Auto premium measures and statistics

Three months ended September 30, Nine months ended September 30,

2023 2022 Change 2023 2022 Change

Three months ended March 31,

2024 2023 Change

New issued applications (thousands)

3 unchanged sentences

Total new issued applications 1,670 1,534 8.9

Allstate Protection by channel

Exclusive agency channel 582 624 (6.7) % 1,745 1,842 (5.3) %

Direct channel 398 535 (25.6) % 1,276 1,737 (26.5) %

Independent agency channel 525 422 24.4 % 1,496 1,315 13.8 %

Total new issued applications 1,505 1,581 (4.8) % 4,517 4,894 (7.7) %

Allstate brand average premium $ 823 $ 726 13.4 %

Allstate brand renewal ratio (%) 86.0 85.7 0.3

Homeowners insurance premiums written increased 12.1% or $380 million in the third quarter of 2023 compared to the third quarter of 2022 and increased 11.9% or $1.01 billion in the first nine months of 2023 compared to the first nine months of 2022, primarily due to the following factors:

• Higher Allstate brand average premiums from implemented rate increases primarily taken in 2022 and inflation in insured home replacement costs, combined with policies in force growth

• In the nine months ended September 30, 2023, rate increases of 14.4% were taken for Allstate brand in 39 locations, resulting in total Allstate brand insurance premium impact of 9.5%

• National General policy growth may be negatively impacted in future quarters as we improve underwriting margins to targeted levels in current books of business through underwriting and rate actions.

In the nine months ended September 30,

2023, rate increases of 19.5% were taken for National General brand in 22 locations, resulting in total National General brand insurance premium impact of 6.5%

• Decreased new issued applications in the direct and exclusive agency channels, partially offset by growth in the independent agency channel

Homeowners insurance premiums written increased 13.4% or $340 million in the first quarter of 2024 compared to the first quarter of 2023 primarily due to the following factors:

• Higher Allstate brand average premiums from implemented rate increases and inflation in insured home replacement costs, combined with policies in force growth

• In the three months ended March 31, 2024, rate increases of 11.7% were taken for Allstate brand in 15 locations, resulting in total Allstate brand insurance premium impact of 3.4%

• National General policy growth may be negatively impacted in future quarters as we improve certain underwriting margins to targeted levels through underwriting and rate actions.

In the three months ended March 31, 2024, rate increases of 14.0% were taken for National General brand in 12 locations, resulting in total National General brand insurance premium impact of 1.6%

• Increased new issued applications driven by growth in the exclusive agency and direct channels, partially offset by a decline in the independent agency channel

• Policy growth is being reduced in states and lines of business that are underperforming.

We are no longer writing new homeowners business in California and Florida, and we may take further actions to reduce our exposure, which have and will continue to negatively impact premiums

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

We are no longer writing new homeowners business in California, New Jersey and Florida, and we may take further actions to reduce our exposure, which have and will continue to negatively impact premiums

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

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

Homeowners premium measures and statistics

Three months ended September 30, Nine months ended September 30,

2023 2022 Change 2023 2022 Change

Three months ended March 31,

2024 2023 Change

New issued applications (thousands)

3 unchanged sentences

Total new issued applications 291 265 9.8

Allstate Protection by channel

Exclusive agency channel 211 219 (3.7) % 609 642 (5.1) %

Direct channel 22 24 (8.3) % 60 74 (18.9) %

Independent agency channel 69 65 6.2 % 178 157 13.4 %

Total new issued applications 302 308 (1.9) % 847 873 (3.0) %

Allstate brand average premium $ 1,912 $ 1,706 12.1 %

Allstate brand renewal ratio (%) 87.1 86.3 0.8

Other personal lines premiums written increased 11.6% or $70 million in the third quarter of 2023 compared to the third quarter of 2022 and increased 10.5% or $180 million in the first nine months of 2023 compared to the first nine months of 2022, primarily

due to increases in landlords and condominiums for Allstate brand.

We are no longer writing condominium new business in California and Florida, we are non-renewing certain policies in Florida, and we are taking

Third Quarter 2023 Form 10-Q 61

Segment Results Allstate Protection

further actions to reduce exposure in Florida, which will continue to negatively impact premiums.

Commercial lines premiums written decreased 50.9% or $145 million in the third quarter of 2023 compared to the third quarter of 2022 and decreased 35.3% or $309 million in the first nine months of 2023 compared to the first nine months of 2022, due to profitability actions taken to no longer offer coverage to transportation network companies unless the contracts utilize telematics-based pricing and the Allstate brand exiting traditional commercial insurance in five states, including non-renewals in 2023.

Other business lines premiums written increased 36.9% or $52 million in the third quarter of 2023 compared to the third quarter of 2022 and increased 7.0% or $27 million in the first nine months of 2023 compared to the first nine months of 2022.

Other personal lines premiums written increased 20.4% or $112 million in the first quarter of 2024 compared to the first quarter of 2023 primarily due to increases in landlords policies for Allstate brand.

We are no longer writing condominium new business in California and Florida and we are non-renewing certain policies in Florida, which may negatively impact premiums.

Commercial lines premiums written decreased 30.8% or $70 million in the first quarter of 2024 compared to the first quarter of 2023 due to profitability actions taken to no longer offer coverage

to transportation network companies unless the contracts utilize telematics-based pricing and the Allstate brand exiting traditional commercial insurance in five states, which will continue to negatively impact premiums.

Other business lines premiums written increased 8.0% or $10 million in the first quarter of 2024 compared to the first quarter of 2023.

50 www.allstate.com

Allstate Protection Segment Results

GAAP operating ratios include loss ratio, expense ratio and combined ratio to analyze our profitability trends.

4 unchanged sentences

2024 2023 2024 2023 2024 2023

Three months ended September 30,

Three months ended March 31,

75.4 83.4 20.6 21.0 96.0 104.4

6 unchanged sentences

Impact of restructuring and related charges 0.1 0.2 0.1 0.2

Nine months ended September 30,

Auto 84.2 86.1 20.7 23.2 104.9 109.3

Homeowners 101.8 71.3 21.0 22.5 122.8 93.8

Other personal lines 88.4 74.4 20.3 24.4 108.7 98.8

Commercial lines 103.2 112.0 25.6 19.4 128.8 131.4

Other business lines 48.1 41.7 32.6 40.6 80.7 82.3

Total 88.6 82.2 20.9 23.2 109.5 105.4

Impact of amortization of purchased intangibles 0.5 0.5 0.5 0.5

Impact of restructuring and related charges 0.3 0.1 0.3 0.1

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

3 unchanged sentences

2024 2023 2024 2023 2024 2023 2024 2023

Three months ended September 30,

Auto 81.4 95.3 2.6 4.4 0.4 8.4 0.1 (0.1)

Homeowners 82.4 67.4 29.6 13.4 2.1 2.0 0.6 0.1

Other personal lines 78.6 76.1 9.7 5.7 (2.3) (0.9) (1.8) (0.6)

Commercial lines 102.0 120.6 5.2 3.4 9.8 21.6 3.1 0.4

Other business lines 49.3 56.7 13.0 27.6 0.7 1.5 — 0.7

Total 81.5 88.0 9.6 6.8 0.8 6.7 0.1 (0.1)

Nine months ended September 30,

Three months ended March 31,

Auto 75.4 83.4 1.2 1.2 (0.8) (0.3) (0.1) (0.4)

4 unchanged sentences

Total 72.4 87.5 5.7 14.5 (1.2) (0.1) (1.3) (0.4)

(1) The ten-year average effect of catastrophe losses on the total combined ratio was 8.3 points in the third quarter of 2023.

62 www.allstate.com

Allstate Protection Segment Results

(1) The ten-year average effect of catastrophe losses on the total combined ratio was 7.1 points in the first quarter of 2024.

Auto underwriting results

For the periods ended

2023 2022 2021

($ in millions, except ratios) Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1

($ in millions, except ratios) Q1

Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1

Underwriting income (loss) $ 351 $ 93 $ (178) $ (678) $ (346) $ (974) $ (1,315) $ (578) $ (147)

4 unchanged sentences

• Supply chain disruptions and labor shortages

• Value of total losses due to higher used car prices

• Mix of repairable losses and total losses

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

• Changes in medical inflation and consumption

• Number of claims with attorney representation

• Labor and part cost increases

3 unchanged sentences

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

Auto loss ratio decreased 13.9 and 1.9 points in the third quarter and first nine months of 2023, respectively, compared to the same periods of 2022.

Estimated report year 2023 incurred claim severity for Allstate brand, excluding Esurance and Canada, had a weighted average increase of 9% compared to report year 2022 for major coverages due to higher part costs and labor rates for repairable vehicles, a higher mix of total losses, an increase in claims with attorney representation, higher medical consumption, and inflation.

Gross claim frequency increased relative to the prior year.

We are enhancing our claims practices to manage loss costs by increasing resources and expanding re-inspections, accelerating resolution of bodily injury claims, and negotiating improved vendor services and parts agreements.

Homeowners loss ratio increased 15.0 and 30.5 points in the third quarter and first nine months of 2023, respectively, compared to the same periods of 2022, primarily due to higher catastrophe losses and severity, partially offset by increased premiums earned.

Allstate brand homeowners frequency and severity statistics (excluding catastrophe losses)

(% change year-over-year)

Three months ended September 30, 2023

Gross claim frequency (4.3) %

Paid claim severity 16.0

Nine months ended September 30, 2023

Gross claim frequency (3.0) %

Paid claim severity 12.9

Gross claim frequency decreased in the third quarter and in the first nine months of 2023 compared to the same periods of 2022 due to water and fire

Paid claim severity increased in the third quarter and first nine months of 2023 compared to the same periods of 2022 due to inflationary loss cost pressure driven by increases in labor and materials costs.

Homeowner paid claim severity can be impacted by both the mix of perils and the magnitude of specific losses paid during the quarter.

Other personal lines loss ratio increased 2.5 points in the third quarter of 2023 compared to the third quarter of 2022, primarily due to increased severity and higher catastrophe losses, partially offset by increased premiums earned.

Other personal lines loss ratio increased 14.0 points in the first nine months of 2023 compared to the first nine months of 2022, primarily due to higher catastrophe losses and increased severity, partially offset by increased premiums earned.

Commercial lines loss ratio decreased 18.6 and 8.8 points in the third quarter and first nine months of 2023, respectively, compared to the same periods of 2022, primarily due to the result of profitability actions taken and less unfavorable reserve reestimates, partially offset by continued elevated frequency and severity.

Other business lines loss ratio decreased 7.4 points in the third quarter of 2023 compared to the third quarter of 2022, primarily due to increased premiums earned.

Other business lines loss ratio increased 6.4 points in the first nine months of 2023 compared to the first nine months of 2022, primarily due to higher non-catastrophe losses and unfavorable prior year reserve reestimates.

Catastrophe losses increased $418 million to $1.18 billion in the third quarter of 2023 compared to the third quarter of 2022 and increased $3.24 billion to $5.57 billion in the first nine months of 2023 compared to the first nine months of 2022 primarily related to an increased number of wind/hail events and larger losses per event.

The catastrophe losses for the first nine months of 2023 represent the highest level for the period in the Company’s history.

We define a “catastrophe” as an event that produces pre-tax losses before reinsurance in excess of $1 million and involves multiple first party policyholders, or a winter weather event that produces a number of claims in excess of a preset, per-event threshold of average claims in a specific area, occurring within a certain amount of time following the event.

Catastrophes are caused by various natural events including high winds, winter storms and freezes, tornadoes, hailstorms, wildfires, tropical storms, tsunamis, hurricanes, earthquakes and volcanoes.

Third Quarter 2023 Form 10-Q 63

Auto loss ratio decreased 8.0 points in the first quarter of 2024 compared to the same period of 2023 driven by increased earned premiums.

Estimated report year 2024 incurred claim severity for Allstate brand increased compared to report year 2023 for major coverages due to higher part costs and labor rates for repairable vehicles, a higher mix of total losses, an increase in claims with attorney representation, higher medical consumption, and inflation.

Gross claim frequency decreased relative to the prior year.

We continue to enhance our claims practices to manage loss costs by increasing resources and expanding re-inspections, accelerating resolution of bodily injury claims, and negotiating improved vendor services and parts agreements.

First Quarter 2024 Form 10-Q 51

Segment Results Allstate Protection

Homeowners loss ratio decreased 38.2 points in the first quarter of 2024 compared to the same period of 2023, primarily due to lower catastrophe losses and increased premiums earned.

Gross claim frequency decreased in the first quarter of 2024 compared to the same period of 2023 due to fewer wind/hail and fire claims reported.

Paid claim severity increased in the first quarter of 2024 compared to the same period of 2023 due to inflationary loss cost pressure driven by increases in labor and materials costs.

Homeowners paid claim severity can be impacted by both the mix of perils and the magnitude of specific losses paid during the quarter.

Other personal lines loss ratio decreased 8.2 points in the first quarter of 2024 compared to the first quarter of 2023 primarily due to increased premiums earned and lower catastrophe losses, partially offset by increased severity.

Commercial lines loss ratio increased 13.2 points in the first quarter of 2024 compared to the same period of 2023, primarily due to premiums earned decreasing as a result of profitability actions taken and higher unfavorable reserve reestimates related to the shared economy business.

Other business lines loss ratio increased 1.2 points in the first quarter of 2024 compared to the first quarter of 2023, primarily due to higher non-catastrophe losses and unfavorable prior year reserve reestimates.

Catastrophe losses decreased $960 million to $731 million in the first quarter of 2024 compared to the first quarter of 2023 primarily due to a decrease in number of events and lower losses per event compared to historically high levels in the prior year.

threshold of average claims in a specific area, occurring within a certain amount of time following the event.

Catastrophes are caused by various natural events including high winds, winter storms and freezes, tornadoes, hailstorms, wildfires, tropical storms, tsunamis, hurricanes, earthquakes and volcanoes.

We are also exposed to man-made catastrophic events, such as certain types of terrorism, civil unrest, wildfires or industrial accidents.

3 unchanged sentences

The establishment of appropriate reserves, including reserves for catastrophe losses, is an inherently uncertain and complex process.

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.

Reserving for hurricane losses is complicated by the inability of insureds to promptly report losses, limitations placed on claims adjusting staff affecting their ability to inspect losses, determining whether losses are covered by our homeowners policy (generally for damage caused by wind or wind driven rain) or specifically excluded coverage caused by flood, exposure to mold damage, and the effects of numerous other considerations, including the timing of a catastrophe in relation to other events, such as at or near the end of a financial reporting period, which can affect the availability of information needed to estimate reserves for that reporting period.

In these situations, we may need to adapt our practices to accommodate these circumstances in order to determine a best estimate of our losses from a catastrophe.

1 unchanged sentence

Catastrophe losses by the type of event

Three months ended September 30, Nine months ended September 30,

($ in millions) Number of events 2023 Number of events 2022 Number of events 2023 Number of events 2022

Hurricanes/tropical storms 3 $ 76 1 $ 378 3 $ 76 1 $ 378

Three months ended March 31,

($ in millions) Number of events 2024 Number of events 2023

Tornadoes — $ — 2 $ 133

3 unchanged sentences

Prior year reserve reestimates (162) (42)

Prior year aggregate reinsurance recoveries

Prior quarter reserve reestimates (214) (71) — —

Total catastrophe losses 21 $ 731 28 $ 1,691

Catastrophe reinsurance Our current catastrophe reinsurance program supports the Company’s risk framework 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.

This framework incorporates our robust economic capital model and is informed by catastrophe risk models including hurricanes, earthquakes and wildfires and adjusts based on premium and insured value growth.

Our reinsurance agreements are part of our capital models and our catastrophe management strategy.

As of September 30, 2023, our risk framework supports an aggregate catastrophe loss of approximately $2.5 billion, net of reinsurance.

Catastrophe reinsurance The catastrophe reinsurance program is part of our catastrophe management strategy, which is intended to provide our shareholders with an acceptable return on the risks assumed in our personal lines business, reduce earnings variability, and provide protection to our customers.

Our current catastrophe reinsurance program supports our risk and return framework which incorporates our robust economic capital model and is

informed by catastrophe risk models including hurricanes, earthquakes and wildfires and adjusts based on premium and insured value growth.

As of March 31, 2024, the modeled 1-in-100 probable maximum loss for hurricane, wildfire and earthquake perils is approximately $2.5 billion, net of reinsurance.

We continually review our aggregate risk appetite and the cost and availability of reinsurance to optimize the risk and return profile of this exposure.

The total cost of our property catastrophe reinsurance programs, excluding reinstatement premiums, during the third quarter and first nine months of 2023 was $268 million and $729 million, respectively, compared to $211 million and $528 million in the third quarter and first nine months of 2022, respectively.

Catastrophe placement premiums reduce net written and earned premium with approximately 75% of the reduction related to homeowners premium.

Prior year reserve reestimates Unfavorable reserve reestimates, including catastrophes, were $101 million and $296 million in the third quarter and the first nine months of 2023, respectively, primarily due to National General personal auto lines and unfavorable reserve reestimates in homeowners lines.

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

52 www.allstate.com

Allstate Protection Segment Results

We have placed coverage related to our 2024-2025 Nationwide Excess Catastrophe Reinsurance Program (the “Nationwide Program”), the National General Reciprocal Excess Catastrophe Program, the Kentucky Earthquake Excess Catastrophe Reinsurance Contract, and the Canada Catastrophe Excess Reinsurance Contract.

The Florida Excess Catastrophe Reinsurance Program and the National General Lender Services Program will be completed in the second quarter of 2024.

We are continuing to evaluate complimentary coverage that, if purchased, we expect to have in place by June 1, 2024.

Similar to our 2023 program, our 2024 program includes coverage for losses to personal lines property, personal lines automobile, commercial lines property or commercial lines automobile arising out of multiple perils, in addition to hurricanes and earthquakes.

The Nationwide Program provides coverage up to $7.90 billion of loss less retentions of $500 million to $1.00 billion, and is subject to the percentage of reinsurance placed in each of its agreements.

Property business in the state of Florida is excluded from this program.

Separate reinsurance agreements address the distinct needs of separately capitalized legal entities.

The Nationwide Program includes reinsurance agreements with both the traditional and insurance-linked securities (“ILS”) markets as described below:

• Core traditional market multi-year and per occurrence agreements provide limits totaling $5.00 billion for catastrophe losses arising out of multiple perils and are comprised of the following:

– Multi-year contracts providing combined $3.25 billion of placed limits exhausting at $4.25 billion, with a 5% co-participation and one annual reinstatement.

One third of the contracts are structured with the first $250 million in excess of $500 million retained by the Company with remaining contracts attaching at a $1.00 billion retention.

– Two eight-year term contracts providing combined $236 million of placed limits, both with a 5% co-participation and one reinstatement of limits over each contract’s term.

– Five single-year contracts providing combined $1.52 billion of placed limits filling capacity around the multi-year and ILS placements, with two contracts providing one reinstatement of limits.

• ILS placements provide $1.95 billion of placed limits, with no reinstatement of limits, and are comprised of the following:

– Six contracts providing occurrence coverage of $1.30 billion of placed limits, reinsuring

losses in all states except Florida caused by named storms, earthquakes and fire following earthquakes, severe weather, wildfires, and other naturally occurring or man-made events determined to be a catastrophe by the Company.

– Two contracts providing occurrence and aggregate coverage of $325 million of placed limits, also provide that for each annual period beginning April 1, Allstate declared catastrophes to personal lines property and automobile business can be aggregated to erode the aggregate retention and qualify for coverage under the aggregate limits.

Recoveries are limited to the ultimate net loss from the reinsured event.

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

National General Reciprocal Excess Catastrophe Reinsurance Contracts are placed in the traditional market and provide $445 million of placed limits, subject to a $15 million retention, with one reinstatement of limits.

Kentucky Earthquake Excess Catastrophe Reinsurance Contract is placed in the traditional market and provides $27 million of placed limits, subject to a $2 million retention, with one reinstatement of limits.

Canada Catastrophe Excess of Loss Reinsurance Contract is placed in the traditional market and provides CAD 355 million of placed limits, subject to a CAD 75 million retention, with one reinstatement of limits.

The total cost of our property catastrophe reinsurance programs, excluding reinstatement premiums, during the first quarter of 2024 was $286 million compared to $219 million in the first quarter of 2023.

Catastrophe placement premiums reduce net written and earned premium with approximately 78% of the reduction related to homeowners premium.

Prior year reserve reestimates Favorable reserve reestimates, including catastrophes, were $155 million in the first quarter of 2024 primarily due to favorable reserve reestimates in homeowners lines and physical damage coverages in personal auto lines, partially offset by unfavorable reserve reestimates in other personal lines and commercial lines.

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

First Quarter 2024 Form 10-Q 53

Segment Results Allstate Protection

Prior year reserve reestimates

Three months ended September 30, Nine months ended September 30,

Prior year reserve

reestimates (1)

combined ratio (2)

Three months ended March 31,

Prior year reserve

13 unchanged sentences

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

Expense ratio decreased 1.3 and 2.3 points in the third quarter and the first nine months of 2023, respectively, compared to the third quarter and the first nine months of 2022, primarily due to higher earned premium growth relative to fixed costs, and lower advertising, agent and employee-related costs, partially offset by higher restructuring costs.

Expense ratio decreased 0.5 points in the first quarter of 2024 compared to the first quarter of 2023, primarily due to higher earned premium growth relative to fixed costs and lower employee-related costs, partially offset by an increase in advertising costs.

Impact of specific costs and expenses on the expense ratio

Three months ended September 30, Nine months ended September 30,

($ in millions, except ratios) 2023 2022 Change 2023 2022 Change

Three months ended March 31,

($ in millions, except ratios) 2024 2023 Change

Amortization of DAC $ 1,608 $ 1,452 $ 156

13 unchanged sentences

Total expense ratio 20.6 21.1 (0.5)

Third Quarter 2023 Form 10-Q 65

Segment Results Run-off Property-Liability

54 www.allstate.com

Run-off Property-Liability Segment Results

Run-off Property-Liability Segment

Underwriting results

($ in millions) Three months ended September 30, Nine months ended September 30,

2023 2022 2023 2022

($ in millions) Three months ended March 31,

Claims and claims expense $ (4) $ (2)

Asbestos claims

$ (44) $ (34) $ (44) $ (34)

Environmental claims

(18) (56) (18) (56)

Other run-off lines (20) (30) (23) (34)

Total claims and claims expense

(82) (120) (85) (124)

Operating costs and expenses (1) (1)

Underwriting loss

$ (83) $ (122) $ (88) $ (127)

Annual reserve review In the third quarter of 2023 and 2022, we performed our annual reserve review using established industry and actuarial best practices.

The annual review resulted in unfavorable reserve reestimates totaling $80 million and $118 million in 2023 and 2022, respectively.

The reserve reestimates are included as part of claims and claims expense.

The reserve reestimates in 2023 primarily related to new reported information and defense costs for asbestos and other run-off exposures and higher than expected environmental reported losses.

The reserve reestimates in 2022 primarily related to new reported information and defense costs for

asbestos and higher than expected reported losses for environmental and other run-off exposures.

We believe that our reserves are appropriately established based on available facts, technology, laws, regulations, and assessments of other pertinent factors and characteristics of exposure (e.g., claim activity, potential liability, jurisdiction, products versus non-products exposure) presented by individual policyholders, assuming no change in the legal, legislative or economic environment.

However, as we progress with the resolution of disputed claims in the courts and arbitrations and with negotiations and settlements, our reported losses may be more variable.

Reserves for asbestos, environmental and other run-off claims before and after the effects of reinsurance

($ in millions) September 30, 2023 December 31, 2022

($ in millions) March 31, 2024 December 31, 2023

Asbestos claims

13 unchanged sentences

Net reserves $ 1,430 $ 1,444

66 www.allstate.com

Run-off Property-Liability Segment Results

Reserves by type of exposure before and after the effects of reinsurance

($ in millions) September 30, 2023 December 31, 2022

($ in millions) March 31, 2024 December 31, 2023

Direct excess commercial insurance

22 unchanged sentences

Net reserves $ 1,430 $ 1,444

First Quarter 2024 Form 10-Q 55

Segment Results Run-off Property-Liability

Percentage of gross and ceded reserves by case and IBNR

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

Case IBNR Case IBNR

8 unchanged sentences

Ceded 86 14 83 17

(1) Approximately 68% and 64% of gross case reserves as of September 30, 2023 and December 31, 2022, respectively, are subject to settlement agreements.

(2) Approximately 72% and 70% of ceded case reserves as of September 30, 2023 and December 31, 2022, respectively, are subject to settlement agreements.

Third Quarter 2023 Form 10-Q 67

Segment Results Run-off Property-Liability

(1) Approximately 70% and 68% of gross case reserves as of March 31, 2024 and December 31, 2023, respectively, are subject to settlement agreements.

(2) Approximately 75% and 72% of ceded case reserves as of March 31, 2024 and December 31, 2023, respectively, are subject to settlement agreements.

Gross payments from case reserves by type of exposure

($ in millions) Three months ended September 30, Nine months ended September 30,

2023 2022 2023 2022

($ in millions) Three months ended March 31,

Direct excess commercial insurance

$ 13 $ 9 $ 45 $ 37

(7) (3) (16) (13)

Assumed reinsurance coverage

Ceded — — (3) (1)

Direct primary commercial insurance

Ceded — — — (1)

(1) In the third quarter and first nine months of 2023, 82% and 84% of payments related to settlement agreements, respectively, compared to 75% and 82% of the third quarter and first nine months of 2022, respectively.

(2) In the third quarter and first nine months of 2023, 56% and 77% of payments related to settlement agreements, respectively, compared to 88% and 90% of the third quarter and first nine months of 2022, respectively.

Total net reserves as of September 30, 2023, included $766 million or 52% of estimated IBNR reserves compared to $765 million or 53% of estimated IBNR reserves as of December 31, 2022.

Total gross payments were $20 million and $73 million for the third quarter and first nine months of 2023, respectively, compared to $25 million and $66 million for the third quarter and first nine months of 2022, respectively.

(1) In the first quarter of 2024 and 2023, 85% and 87% of payments, respectively, related to settlement agreements.

(2) In the first quarter of 2024 and 2023, 89% and 92% of payments, respectively, related to settlement agreements.

Total net reserves as of March 31, 2024, included $755 million or 53% of estimated IBNR reserves compared to $762 million or 53% of estimated IBNR reserves as of December 31, 2023.

Total gross payments were $23 million for the first quarter of 2024 compared to $29 million for the first quarter of 2023 .

Payments primarily related to settlement agreements reached with several insureds on large claims, mainly asbestos related losses, where the scope of coverages has been agreed upon.

The claims associated with these settlement agreements are expected to be substantially paid out over the next several years as qualified claims are submitted by these insureds.

Reinsurance collections were $6 million and $30 million for the third quarter and first nine months of 2023, respectively, compared to $6 million and $27 million for the third quarter and first nine months of 2022, respectively.

Reinsurance collections were $11 million for the first quarter of 2024 compared to $15 million for the first quarter of 2023.

56 www.allstate.com

2 unchanged sentences

Summarized financial information

($ in millions) Three months ended September 30, Nine months ended September 30,

2023 2022 2023 2022

($ in millions) Three months ended March 31,

Premiums written $ 627 $ 619

2 unchanged sentences

Intersegment insurance premiums and service fees (1)

34 39 102 118

Net investment income 21 16

17 unchanged sentences

Allstate Identity Protection 3,031 3,206

Policies in force as of September 30 (in thousands) 147,980 142,079

Policies in force as of March 31 (in thousands) 155,440 144,172

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

Adjusted net income decreased 22.9% or $8 million in the third quarter of 2023 and decreased 22.1% or $29 million in the first nine months of 2023 compared to the same periods of 2022, due to Allstate Protection Plans higher appliance and furniture claim severity, lower margins at Allstate Dealer Services, lower third-party advertising sales at Arity and higher restructuring charges across multiple businesses, partially offset by improved margins at Allstate Roadside and lower expenses at Allstate Identity Protection.

Premiums written increased 0.2% or $1 million in the third quarter of 2023 compared to the third quarter of 2022, primarily due to growth at Allstate Protection Plans, partially offset by a decrease at Allstate Dealer Services.

Premiums written decreased 1.1% or $22 million in the first nine months of 2023 compared to the same period of 2022, primarily due to a decrease at Allstate Dealer Services and lower rescue volumes at Allstate Roadside, partially offset by growth at Allstate Protection Plans.

PIF increased 4.2% or 6 million as of September 30, 2023 compared to September 30, 2022 due to an increase at Allstate Protection Plans.

Other revenue decreased 10.7% or $9 million in the third quarter of 2023 and decreased 9.7% or $26 million in the first nine months of 2023 compared to the same periods of 2022, primarily due to lower revenue from reductions in customer advertising at Arity.

Intersegment premiums and service fees decreased 12.8% or $5 million in the third quarter of 2023 and decreased 13.6% or $16 million in the first nine months of 2023 compared to the same periods of 2022, driven by decreased device sales for the Drivewise® offering at Arity due to a shift from devices to a lower cost mobile phone program.

Third Quarter 2023 Form 10-Q 69

Segment Results Protection Services

Claims and claims expense increased 17.7% or $25 million in the third quarter 2023 and increased 20.4% or $80 million in the first nine months of 2023 compared to the same periods of 2022, primarily driven by growth in the business and higher severity at both Allstate Protection Plans and Allstate Dealer Services, partially offset by lower frequency at Allstate Protection Plans.

Amortization of DAC increased 14.0% or $33 million in the third quarter of 2023 and increased 13.7% or $94 million in the first nine months of 2023 compared to the same periods of 2022, driven by revenue growth at both Allstate Protection Plans and Allstate Dealer Services.

Operating costs and expenses increased 5.1% or $11 million in the third quarter of 2023 and increased 2.9% or $19 million in the first nine months of 2023 compared to the same periods of 2022, primarily due to growth at Allstate Protection Plans, partially offset by lower expenses at Arity.

70 www.allstate.com

Allstate Health and Benefits Segment Results

Adjusted net income increased 58.8% or $20 million in the first quarter of 2024 compared to the first quarter of 2023, due to gross margin improvement at Allstate Protection Plans and improved claim severity at Allstate Roadside.

Premiums written increased 1.3% or $8 million in the first quarter of 2024 compared to the first quarter of 2023, primarily due to growth at Allstate Protection Plans, partially offset by lower sales at Allstate Dealer Services.

PIF increased 7.8% or 11 million as of March 31, 2024 compared to March 31, 2023 due to growth at Allstate Protection Plans.

Other revenue increased 1.2% or $1 million in the first quarter of 2024 compared to the first quarter of 2023, primarily due to higher advertising and Mobility Intelligence product sales at Arity.

Intersegment premiums and service fees increased 6.1% or $2 million in the first quarter of 2024 compared to the first quarter of 2023, driven by increased hardware revenue at Arity.

Claims and claims expense increased 3.3% or $5 million in the first quarter 2024 compared to the first quarter of 2023, primarily driven by growth at Allstate Protection Plans, partially offset by lower claim severity at Allstate Roadside.

Amortization of DAC increased 15.1% or $38 million in the first quarter of 2024 compared to the first quarter of 2023, driven by growth at Allstate Protection Plans.

Operating costs and expenses increased 5.9% or $13 million in the first quarter of 2024 compared to the first quarter of 2023, primarily due to growth at Allstate Protection Plans.

First Quarter 2024 Form 10-Q 57

Segment Results Allstate Health and Benefits

Allstate Health and Benefits Segment

Effective January 1, 2023, we adopted the FASB guidance revising the accounting for certain long-duration insurance contracts in the Allstate Health and Benefits segment using the modified retrospective approach at the transition date of January 1, 2021.

See Note 1 of the condensed consolidated financial statements for further information regarding the impact of the adopted accounting standard on our condensed consolidated financial statements.

Summarized financial information

Three months ended September 30, Nine months ended September 30,

Three months ended March 31,

($ in millions) 2024 2023

10 unchanged sentences

Benefit ratio (1)

54.9 52.7 55.1 54.4

Employer voluntary benefits (2)

1 unchanged sentence

Individual health (4)

Policies in force as of September 30 (in thousands) 4,256 4,320

(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, 2023 and 2022, and $25 million for both the nine months ended September 30, 2023 and 2022, divided by premiums and contract charges.

Policies in force as of March 31 (in thousands) 4,193 4,339

(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 March 31, 2024 and 2023, respectively, 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.

Adjusted net income increased $6 million in the third quarter of 2023 compared to the third quarter of 2022 primarily due to increases in group and individual health, partially offset by a decline in employer voluntary benefits.

Adjusted net income decreased $5 million in the first nine months of 2023 compared to the first nine months of 2022, primarily due to a decline in employer voluntary benefits, partially offset by increases in group and individual health.

Premiums and contract charges in the third quarter of 2023 were comparable to the third quarter of 2022.

Premiums and contract charges decreased 1.2% or $17 million in the first nine months of 2023 compared to the first nine months of 2022, primarily due to a decline in individual health and employer voluntary benefits, partially offset by growth in group health.

Adjusted net income in the first quarter of 2024 was comparable to the first quarter of 2023 due to an increase in individual health, offset by a decline in employer voluntary benefits.

Premiums and contract charges increased 3.2% or $15 million in the first quarter of 2024 compared to the first quarter of 2023, primarily due to growth in group health and individual health, partially offset by a decline in employer voluntary benefits.

Premiums and contract charges by line of business

Three months ended September 30, Nine months ended September 30,

Three months ended March 31,

($ in millions) 2024 2023

3 unchanged sentences

Premiums and contract charges $ 478 $ 463

Other revenue increased $14 million in the third quarter of 2023 and increased $29 million in the first nine months of 2023 compared to the same periods of 2022, primarily due to an increase in group health administrative fees.

Accident, health and other policy benefits increased 4.0% or $10 million in the third quarter of 2023 compared to the third quarter of 2022, primarily due to higher benefit utilization and growth in group health, partially offset by decreased contract benefits for individual health and employer voluntary benefits.

Accident, health and other policy benefits in the first

Third Quarter 2023 Form 10-Q 71

Segment Results Allstate Health and Benefits

nine months of 2023 were comparable to the first nine months of 2022.

Other revenue increased $33 million in the first quarter of 2024 compared to the first quarter of 2023, primarily due to an increase in individual health and group health administrative fees.

Accident, health and other policy benefits increased 11.7% or $31 million in the first quarter of 2024 compared to the first quarter of 2023, primarily from growth in group health and individual health and higher benefit utilization.

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

Benefit ratio increased 2.2 points to 54.9 in the third quarter of 2023 compared to 52.7 in the third quarter of 2022 primarily due to higher benefit

utilization in group health.

Benefit ratio increased 0.7 points to 55.1 in the first nine months of 2023 compared to 54.4 in the same period of 2022.

Amortization of DAC increased 18.2% or $6 million in the third quarter of 2023 and increased 6.5% or $7 million in the first nine months of 2023 compared to the same periods of 2022 primarily due to accelerated amortization related to large account terminations, partially offset by a reduction in policy benefits.

Benefit ratio increased 4.5 points to 60.0 in the first quarter of 2024 compared to 55.5 in the first quarter of 2023 primarily due to higher benefit utilization across all lines of business.

Amortization of DAC increased 2.4% or $1 million in the first quarter of 2024 compared to the first quarter of 2023.

58 www.allstate.com

Allstate Health and Benefits Segment Results

Operating costs and expenses

Three months ended September 30, Nine months ended September 30,

Three months ended March 31,

($ in millions) 2024 2023

2 unchanged sentences

Total operating costs and expenses $ 225 $ 203

Operating costs and expenses decreased $10 million in the third quarter of 2023 compared to the third quarter of 2022, primarily due to lower non-deferrable commissions.

Operating costs and expenses increased $16 million in the first nine months of 2023 compared to the first nine months of 2022, primarily due to growth in group health and investments in the business.

72 www.allstate.com

Operating costs and expenses increased $22 million in the first quarter of 2024 compared to the first quarter of 2023, primarily due to growth in individual health and group health and investments in the business.

First Quarter 2024 Form 10-Q 59

Portfolio composition and strategy by reporting segment (1)

September 30, 2023

March 31, 2024

($ in millions) Property-Liability Protection Services

19 unchanged sentences

(3) Equity securities are carried at fair value.

The fair value of equity securities held as of September 30, 2023, was $26 million in excess of cost.

These net gains were primarily concentrated in the technology and banking.

Equity securities include $1.28 billion of funds with underlying investments in fixed income securities as of September 30, 2023.

The fair value of equity securities held as of March 31, 2024, was $211 million in excess of cost.

These net gains were primarily concentrated in the technology and banking sectors.

Equity securities include $913 million of funds with underlying investments in fixed income securities as of March 31, 2024.

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

Investments totaled $63.36 billion as of September 30, 2023, increasing from $61.83 billion as of December 31, 2022, primarily due to positive operating cash flows, partially offset by dividends paid to shareholders and common share repurchases and lower fixed income valuations.

Investments totaled $67.86 billion as of March 31, 2024, increasing from $66.68 billion as of December 31, 2023, primarily due to positive operating cash flows, partially offset by dividends to shareholders and lower fixed income valuations.

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.

3 unchanged sentences

These investments include investee level expenses, reflecting asset level operating expenses on directly held real estate and other consolidated investments.

Investments in the Middle East As of September 30, 2023, we have approximately $47 million investment exposure in the Middle East, of which approximately $42 million is held in Israel, which is primarily indirect exposure through foreign funds managed by external asset managers.

Third Quarter 2023 Form 10-Q 73

Investments in the Middle East As of March 31, 2024, we have approximately $42 million investment exposure in the Middle East, of which approximately $39 million is held in Israel, which is primarily indirect exposure through foreign funds managed by external asset managers.

60 www.allstate.com

Portfolio composition by investment strategy

September 30, 2023

March 31, 2024

($ in millions) Market-

10 unchanged sentences

Fixed income securities $ (1,060) $ — $ (1,060)

Limited partnership interests — (1) (1)

Short-term investments (2) — (2)

4 unchanged sentences

Fair value as of

($ in millions) September 30, 2023 December 31, 2022

($ in millions) March 31, 2024 December 31, 2023

government and agencies $ 10,030 $ 8,619

10 unchanged sentences

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

As of September 30, 2023, 91.4% of the consolidated fixed income securities portfolio was rated investment grade.

As of March 31, 2024, 91.4% of the consolidated fixed income securities portfolio was rated investment grade.

Credit ratings below these designations are considered lower credit quality or below investment grade, which includes high yield bonds.

4 unchanged sentences

For further detail on our fixed income portfolio monitoring process, see Note 4 of the condensed consolidated financial statements.

74 www.allstate.com

First Quarter 2024 Form 10-Q 61

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

Fair value and unrealized net capital gains (losses) for fixed income securities by credit rating

September 30, 2023

March 31, 2024

NAIC 1 NAIC 2 NAIC 3

31 unchanged sentences

For further detail on our mortgage loan portfolio, see Note 4 of the condensed consolidated financial statements.

Limited partnership interests include $7.09 billion of interests in private equity funds, $1.10 billion of interests in real estate funds and $168 million of interests in other funds as of September 30, 2023.

We have commitments to invest additional amounts in limited partnership interests totaling $2.71 billion as of September 30, 2023.

Other investments include $679 million of bank loans, net, and $700 million of direct investments in real estate as of September 30, 2023.

Third Quarter 2023 Form 10-Q 75

Limited partnership interests include $7.27 billion of interests in private equity funds, $1.14 billion of interests in real estate funds and $158 million of interests in other funds as of March 31, 2024.

We have commitments to invest additional amounts in limited partnership interests totaling $3.01 billion as of March 31, 2024.

Other investments include $164 million of bank loans, net, and $717 million of direct investments in real estate as of March 31, 2024.

62 www.allstate.com

Unrealized net capital gains (losses)

September 30, December 31,

March 31, December 31,

($ in millions) 2024 2023

11 unchanged sentences

Gross unrealized Fair

September 30, 2023

March 31, 2024

$ 4,060 $ 24 $ (114) $ 3,970

33 unchanged sentences

Total fixed income securities $ 49,649 $ 650 $ (1,434) $ 48,865

(1) As of September 30, 2023, we have exposure of approximately $85 million to regional banks primarily through investment grade corporate bonds.

76 www.allstate.com

First Quarter 2024 Form 10-Q 63

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

1 unchanged sentence

Equity securities by sector

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

($ in millions) Cost Over (under) cost Fair

8 unchanged sentences

Total funds 1,272 16 1,288 1,354 2 1,356

Utilities 56 — 56 67 12 79

Transportation 13 22 35 16 23 39

Utilities 59 7 66 59 1 60

676 138 814 667 125 792

Total equity securities $ 2,172 $ 211 $ 2,383 $ 2,244 $ 167 $ 2,411

(1) As of September 30, 2023, other is generally comprised of consumer goods, technology, REITs, financial services and communications sectors.

(1) As of March 31, 2024, other is generally comprised of consumer goods, technology, REITs, financial services and communications sectors.

Net investment income

Three months ended September 30, Nine months ended September 30,

Three months ended March 31,

($ in millions) 2024 2023

20 unchanged sentences

Investment income, before expense $ 837 $ 650

Net investment income decreased $1 million in the third quarter of 2023 compared to the same period of 2022, primarily due to lower performance-based investment results, partially offset by higher market-based income reflecting higher fixed income portfolio yields and investment balances.

Net investment income increased $28 million in the first nine months of 2023 compared to the same period of 2022, primarily due to higher market-based results driven by reinvesting into fixed income securities with higher yields and to a lesser extent, the reinvestment of proceeds from sales of equity securities into fixed income securities, partially offset by lower performance-based results, mainly from limited partnerships.

Third Quarter 2023 Form 10-Q 77

Net investment income increased $189 million in the first quarter of 2024 compared to the same period of 2023, primarily due to higher market-based and performance-based investment results.

64 www.allstate.com

Performance-based investment income

Three months ended September 30, Nine months ended September 30,

Three months ended March 31,

($ in millions) 2024 2023

3 unchanged sentences

Investee level expenses (1)

(16) (13) (48) (40)

Total performance-based income $ 201 $ 126

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

Performance-based investment income decreased $149 million and $438 million in the third quarter and first nine months of 2023, respectively, compared to the same periods of 2022, primarily due to lower net gains on the sales of underlying investments.

Performance-based investment income increased $75 million in the first quarter of 2024 compared to the same period of 2023, primarily due to higher private equity valuation increases.

Performance-based investment results and income can vary significantly between periods and are influenced by economic conditions, equity market

2 unchanged sentences

Components of net gains (losses) on investments and derivatives and the related tax effect

Three months ended September 30, Nine months ended September 30,

Three months ended March 31,

($ in millions) 2024 2023

5 unchanged sentences

Limited partnerships (2)

1 (46) 34 (199)

Total valuation of equity investments 70 198

1 unchanged sentence

Net gains (losses) on investments and derivatives, pre-tax (164) 14

Income tax benefit 19 35 48 251

Income tax benefit (expense) 36 (6)

Net gains (losses) on investments and derivatives, after-tax $ (128) $ 8

5 unchanged sentences

Market-based (1)

$ (185) $ (3)

Performance-based 21 17

Net gains (losses) on investments and derivatives, pre-tax $ (164) $ 14

(1) Includes $123 million loss related to the valuation allowance established for the surplus notes issued by Adirondack Insurance Exchange and New Jersey Skylands Insurance Association (together “Reciprocal Exchanges”).

See Note 7 for further details.

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

Net losses on investments and derivatives in the third quarter of 2023 related primarily to losses on sales of fixed income securities.

Net losses in the first nine months of 2023 related primarily to losses on sales, partially offset by higher valuation on equity investments.

Net losses on sales in the third quarter and first nine months of 2023 related primarily to sales of fixed income securities in connection with ongoing portfolio management.

Net gains on valuation change and settlements of derivatives of $31 million in the third quarter of 2023 primarily related to gains on foreign currency contracts due to the strengthening of the U.S.

dollar and net gains on equity futures used to manage equity exposure, and net gains on rate futures used to manage duration.

Net losses on valuation change and settlements of derivatives of $28 million in the first nine months of 2023 primarily related to losses on credit default swaps used to reduce credit risk, and net losses on interest rate futures used to manage duration.

78 www.allstate.com

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

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

Net losses on valuation change and settlements of derivatives of $8 million in the first quarter of 2024 primarily related to net losses on equity futures used to manage equity exposure and net losses on interest rate futures used to manage duration, partially offset by gains on foreign currency contracts used to manage foreign currency risk.

First Quarter 2024 Form 10-Q 65

Net gains (losses) on performance-based investments and derivatives

Three months ended September 30, Nine months ended September 30,

Three months ended March 31,

($ in millions) 2024 2023

4 unchanged sentences

Total performance-based $ 21 $ 17

Net gains on performance-based investments and derivatives in the third quarter and first nine months of 2023, primarily related to gains on sales, increased valuation of equity investments and valuation change and settlements of derivatives, partially offset by increased credit losses from limited partnerships.

Third Quarter 2023 Form 10-Q 79

Net gains on performance-based investments and derivatives in the first quarter of 2024, primarily related to increased valuation of equity investments and valuation change and settlements of derivatives.

66 www.allstate.com

Capital Resources and Liquidity

2 unchanged sentences

Capital resources

($ in millions) September 30, 2023 December 31, 2022

($ in millions) March 31, 2024 December 31, 2023

Preferred stock, common stock, treasury stock, retained income and other shareholders’ equity items $ 19,522 $ 18,470

5 unchanged sentences

Ratio of debt to capital resources 29.9 30.9

Allstate shareholders’ equity decreased in the first nine months of 2023, primarily due to a net loss, dividends paid to shareholders, common share repurchases, and higher unrealized net capital losses on investments.

In the nine months ended September 30, 2023, we paid dividends of $692 million and $71 million related to our common and preferred shares, respectively.

Repayment of debt On March 29, 2023, the Company repaid, at maturity, $250 million of Floating Rate Senior Notes that bear interest at a floating rate equal to three-month London Interbank Offered Rate (“LIBOR”) plus 0.63% per year.

On June 15, 2023, the Company repaid, at maturity, $500 million of 3.15% Senior Notes.

Issuance of debt On March 31, 2023, the Company issued $750 million of 5.250% Senior Notes due 2033.

Interest on the Senior Notes is payable semi-annually in arrears on March 30 and September 30 of each year, beginning on September 30, 2023.

The Senior Notes are redeemable at any time at the applicable redemption price prior to the maturity date.

The net proceeds of this issuance were used to repay the $500 million senior debt maturity and for general corporate purposes.

Debt maturities

Allstate shareholders’ equity increased in the first three months of 2024, primarily due to net income, partially offset by dividends to shareholders and higher unrealized net capital losses on investments.

In the three months ended March 31, 2024, we paid dividends of $233 million and $29 million related to our common and preferred shares, respectively.

Debt maturities We have $350 million of debt that is scheduled to mature in May 2024.

Debt maturities for each of the next five years

3 unchanged sentences

Total long-term debt principal $ 7,641

Redemption of preferred stock On April 17, 2023, the Company redeemed all 23,000 shares of Fixed Rate Noncumulative Preferred Stock, Series G, par value $1.00 per share and liquidation preference $25,000 per share, and the corresponding depositary shares for a total redemption payment of $575 million.

The Company recognized $18 million of original issuance costs in preferred stock dividends on the Condensed Consolidated Statements of Operations

and Condensed Consolidated Statements of Shareholders’ Equity.

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

The preferred stock is perpetual and has no maturity date.

The preferred stock is redeemable at the Company’s option in whole or in part, on or after July 15, 2028 at a redemption price of $25,000 per share, plus declared and unpaid dividends.

Prior to July 15, 2028, the preferred stock is redeemable at the Company’s option, in whole but not in part, within 90 days of the occurrence of certain rating agency events at a redemption price equal to $25,500 per share, plus declared and unpaid dividends, or in whole but not in part, within 90 days after the occurrence of a regulatory capital event, at a redemption price equal to $25,000 per share, plus declared and unpaid dividends.

Common share repurchases As of September 30, 2023, there was $472 million remaining in the $5.00 billion common share repurchase program.

In July 2023, we suspended repurchasing shares under the current authorization.

The authorization for the share repurchase program expires in March 2024.

During the first nine months of 2023, we repurchased 2.8 million common shares, or 1.1% of total common shares outstanding at December 31, 2022, for $330 million.

Common shareholder dividends On January 3, 2023, April 3, 2023 and July 3, 2023, we paid a common shareholder dividend of $0.85, $0.89 and $0.89, respectively.

On July 14, 2023, we declared a common shareholder dividend of $0.89 payable on October 2, 2023.

Common share repurchases On March 31, 2024, our $5.00 billion share repurchase authorization expired with $472 million remaining.

In the first quarter of 2024, we did not repurchase any shares under the program.

A new common share repurchase program has not been authorized as of March 31, 2024.

Common shareholder dividends On January 2, 2024, we paid a common shareholder dividend of $0.89.

On February 23, 2024, we declared a common shareholder dividend of $0.92 payable on April 1, 2024.

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

The preferred stock and subordinated debentures are viewed as having a common equity component by certain rating agencies and are given equity credit up to a pre-determined

80 www.allstate.com

Capital Resources and Liquidity

limit in our capital structure as determined by their respective methodologies.

The preferred stock and subordinated debentures are viewed as having a common equity component by certain rating agencies and are given equity credit up to a pre-determined limit in our capital structure as determined by their respective methodologies.

These respective methodologies consider the existence of certain terms and features in the instruments such as the noncumulative dividend feature in the preferred stock.

In March 2023, Moody’s affirmed The Allstate Corporation’s (the “Corporation”) senior debt and short-term issuer ratings of A3 and P-2, respectively, and Allstate Insurance Company’s (“AIC”) insurance financial strength rating of Aa3.

The outlook for the ratings was changed from stable to negative.

In August 2023, A.M.

Best downgraded the Corporation’s senior debt and short-term issuer ratings to a- and AMB-1, respectively, and affirmed AIC’s insurance financial strength rating of A+.

The outlook for the ratings is stable.

In August 2023, A.M.

Best downgraded the insurance financial strength ratings of the members of Castle Key Group (Castle Key Insurance Company, Castle Key Indemnity Company, Encompass Floridian Insurance Company, Encompass Floridian Indemnity Company) to B.

The outlook for the ratings changed from negative to stable.

In August 2023, A.M.

Best affirmed the insurance financial strength rating of A of the members of Allstate New Jersey Group (Allstate New Jersey Insurance Company, Allstate New Jersey Property and Casualty Insurance Company, Encompass Insurance Company of New Jersey, Encompass Property and Casualty Insurance Company of New Jersey, Esurance Insurance Company of New Jersey).

The outlook for the rating changed from stable to negative.

In August 2023, S&P downgraded the Corporation’s senior debt rating and AIC’s insurance financial strength rating to BBB+ and A+, respectively, and affirmed the Corporation’s short-term issuer rating of A-2.

The outlook for the ratings changed from negative to stable.

There have been no changes to any of our ratings from A.M.

Best, S&P or Moody’s since December 31, 2023.

Liquidity sources and uses We actively manage our financial position and liquidity levels in light of changing market, economic and business conditions.

2 unchanged sentences

Additionally, we have existing intercompany agreements in place that facilitate liquidity management across the Company to enhance flexibility.

The Corporation is party to an Amended and Restated Intercompany Liquidity Agreement (“Liquidity Agreement”) with certain subsidiaries, which includes, but is not limited to AIC.

The Corporation is party to an Amended and Restated Intercompany Liquidity Agreement (“Liquidity Agreement”) with certain subsidiaries, which includes, but is not limited to Allstate Insurance Company (“AIC”).

The Liquidity Agreement allows for short-term advances of funds to be made between parties for liquidity and other general corporate purposes.

1 unchanged sentence

AIC serves as a lender and borrower, certain other subsidiaries serve only as borrowers, and the Corporation serves only as a lender.

amount of potential funding under each of these agreements is $1.00 billion.

The maximum amount of potential funding under each of these agreements is $1.00 billion.

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

2 unchanged sentences

The Corporation may use commercial paper borrowings, bank lines of credit and securities lending to fund intercompany borrowings.

Parent company capital capacity At the parent holding company level, we have deployable assets totaling $2.92 billion as of September 30, 2023, primarily comprised of cash and investments that are generally saleable within one quarter.

Parent company capital capacity At the parent holding company level, we have deployable assets totaling $3.17 billion as of March 31, 2024, primarily comprised of cash and short-term, fixed income and equity securities that are generally saleable within one quarter.

The earnings capacity of the operating subsidiaries is the primary source of capital generation for the Corporation.

As of September 30, 2023, we held $14.36 billion of cash, U.S.

First Quarter 2024 Form 10-Q 67

Capital Resources and Liquidity

As of March 31, 2024, we held $16.86 billion of cash, U.S.

government and agencies fixed income securities, public equity securities, and short-term investments, which we would expect to be able to liquidate within one week.

Intercompany dividends were paid in the first nine months of 2023 between the following companies:

American Heritage Life Insurance Company (“AHL”), Allstate Financial Insurance Holdings Corporation (“AFIHC”) and the Corporation.

Intercompany dividends

($ in millions)

AHL to AFIHC $ 40

AFIHC to the Corporation 40

No intercompany dividends from insurance companies were paid in the first three months of 2024.

Based on the greater of 2023 statutory net income or 10% of statutory surplus, the maximum amount of dividends that AIC will be able to pay, without prior Illinois Department of Insurance approval, at a given point in time through February 2025, is estimated at $1.20 billion, less dividends paid during the preceding twelve months measured at that point in time.

In the first nine months of 2023, no dividends have been paid.

In the first three months of 2024, no dividends have been paid.

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

The terms of our outstanding subordinated debentures also prohibit us from declaring or paying any dividends or distributions on our common or preferred stock or redeeming, purchasing, acquiring, or making liquidation payments on our common stock or preferred stock if we have elected to defer interest payments on the subordinated debentures, subject to certain limited exceptions.

In the first nine months of 2023, we did not defer interest payments on the subordinated debentures.

In the first three months of 2024, we did not defer interest payments on the subordinated debentures.

Additional resources to support liquidity are as follows:

Third Quarter 2023 Form 10-Q 81

Capital Resources and Liquidity

• The Corporation and AIC have access to a $750 million unsecured revolving credit facility that is available for short-term liquidity requirements.

4 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.

This ratio was 24.6% as of September 30, 2023.

This ratio was 22.5% as of March 31, 2024.

Although the right to borrow under the facility is not subject to a minimum rating requirement, the costs of maintaining the facility and borrowing under it are based on the ratings of our senior unsecured, unguaranteed long-term debt.

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.

• As of September 30, 2023, 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.

We can use this shelf registration to issue an unspecified amount of debt securities, common stock (including 638 million shares of treasury stock as of September 30, 2023), preferred stock, depositary shares, warrants, stock purchase contracts, stock purchase units and securities of trust subsidiaries.

• As of March 31, 2024, there were no balances outstanding for the credit facility or the commercial paper facility and therefore the remaining borrowing capacity was $750 million.

• The Corporation has access to a universal shelf registration statement with the Securities and Exchange Commission that was filed on April 30, 2024 and expires in 2027.

We can use this shelf registration to issue an unspecified amount of debt securities, common stock (including 636 million shares of treasury stock as of March 31, 2024), preferred stock, depositary shares, warrants, stock purchase contracts and stock purchase units.

The specific terms of any securities we issue under this registration statement will be provided in the applicable prospectus supplements.

9 unchanged sentences

Factors that could cause actual results to differ materially from those expressed in, or implied by, the forward-looking statements include risks related to:

Insurance and Financial Services (1) unexpected increases in claim frequency and severity;

Insurance and Financial Services (1) actual claim costs exceeding current reserves;

(2) unexpected increases in claim frequency or severity;

(3 ) catastrophes and severe weather events;

1 unchanged sentence

(5) price competition and changes in regulation and underwriting standards;

(5) actual claim costs exceeding current reserves;

(6) market risk, inflation, and declines in credit quality of our investment portfolios;

3 unchanged sentences

(10) a downgrade in financial strength ratings;

Business, Strategy and Operations (11) competition in the industries in which we compete and new or changing technologies;

Business, Strategy and Operations (11) operations in markets that are highly competitive;

(12) changing consumer preferences;

(13) new or changing technologies;

(14) implementation of our Transformative Growth strategy;

6 unchanged sentences

(21) intellectual property infringement, misappropriation and third-party claims;

(22) vendor-related business disruptions or failure of a vendor to provide and protect data, confidential and proprietary information, or personal information of our customers, claimants or employees;

(23) our ability to attract, develop and retain talent;

Macro, Regulatory and Risk Environment (24) conditions in the global economy and capital markets;

3 unchanged sentences

(28) evolving environmental, social and governance standards and expectations;

(25) restrictive regulations and regulatory reforms, including limitations on rate increases and requirements to underwrite business and participate in loss sharing arrangements;

(29) restrictive regulations and regulatory reforms in the U.S.

and internationally;

(30) regulatory limitations on rate increases and requirements to underwrite business and participate in loss sharing arrangements;

(31) losses from legal and regulatory actions;

(27) changes in or the application of accounting standards;

(28) vendor-related business disruptions or failure of a vendor to provide and protect data, confidential and proprietary information, or personal information of our customers, claimants or employees;

(29) our ability to attract, develop and retain talent;

(32) changes in or the application of accounting standards and changes in tax laws;

and (33) misconduct or fraudulent acts by employees, agents and third parties.

1 unchanged sentence

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.

What changed 10-Q

Item 2. Management’s Discussion and Analysis