What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-07-31 compared with 2024-05-01 · 414 added, 290 removed, 1366 unchanged (34% of the section changed)

3 unchanged sentences

(In millions, except per share data) Three months ended

June 30, Six months ended June 30,

2024 2023 2024 2023

Property and casualty insurance premiums $ 13,952 $ 12,470 $ 27,464 $ 24,643

17 unchanged sentences

Net income (loss) 347 ( 1,375 ) 1,545 ( 1,696 )

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

Net income (loss) attributable to noncontrolling interest 16 ( 23 ) ( 4 ) ( 24 )

Net income (loss) attributable to Allstate 331 ( 1,352 ) 1,549 ( 1,672 )

7 unchanged sentences

See notes to condensed consolidated financial statements.

First Quarter 2024 Form 10-Q 1

Second Quarter 2024 Form 10-Q 1

Condensed Consolidated Financial Statements

1 unchanged sentence

Condensed Consolidated Statements of Comprehensive Income (Loss) (unaudited)

($ in millions) Three months ended March 31,

($ in millions) Three months ended June 30, Six months ended June 30,

2024 2023 2024 2023

Net income (loss) $ 347 $ ( 1,375 ) $ 1,545 $ ( 1,696 )

4 unchanged sentences

Discount rate for reserve for future policy benefits

( 1 ) 8 24 ( 1 )

Other comprehensive (loss) income, after-tax ( 143 ) ( 241 ) ( 326 ) 478

Comprehensive income 1,015 398

Comprehensive (loss) income attributable to noncontrolling interest ( 19 ) 4

Comprehensive income attributable to Allstate $ 1,034 $ 394

Comprehensive income (loss) 204 ( 1,616 ) 1,219 ( 1,218 )

Comprehensive income (loss) attributable to noncontrolling interest 16 ( 24 ) ( 3 ) ( 20 )

Comprehensive income (loss) attributable to Allstate $ 188 $ ( 1,592 ) $ 1,222 $ ( 1,198 )

See notes to condensed consolidated financial statements.

3 unchanged sentences

Condensed Consolidated Statements of Financial Position (unaudited)

($ in millions, except par value data) March 31, 2024 December 31, 2023

($ in millions, except par value data) June 30, 2024 December 31, 2023

Fixed income securities, at fair value (amortized cost, net $ 53,788 and $ 49,649 )

41 unchanged sentences

See notes to condensed consolidated financial statements.

First Quarter 2024 Form 10-Q 3

Second Quarter 2024 Form 10-Q 3

Condensed Consolidated Financial Statements

1 unchanged sentence

Condensed Consolidated Statements of Shareholders’ Equity (unaudited)

($ in millions, except per share data) Three months ended March 31,

($ in millions, except per share data) Three months ended June 30, Six months ended June 30,

2024 2023 2024 2023

Preferred stock par value $ — $ — $ — $ —

Preferred stock additional capital paid-in

Balance, beginning of period 2,001 1,970 2,001 1,970

Preferred stock issuance, net of issuance costs — 587 — 587

Preferred stock redemption — ( 556 ) — ( 556 )

Balance, end of period 2,001 2,001 2,001 2,001

Common stock par value 9 9 9 9

2 unchanged sentences

Equity incentive plans activity, net

33 6 73 ( 2 )

Balance, end of period 3,927 3,786 3,927 3,786

17 unchanged sentences

Change in discount rate for reserve for future policy benefits

( 1 ) 8 24 ( 1 )

Balance, end of period ( 1,026 ) ( 1,914 ) ( 1,026 ) ( 1,914 )

3 unchanged sentences

Change in unrealized net capital gains and losses — ( 1 ) 1 4

Noncontrolling loss ( 20 ) ( 1 )

Noncontrolling income (loss) 16 ( 23 ) ( 4 ) ( 24 )

Capital transaction for noncontrolling interest

Balance, end of period ( 20 ) ( 145 ) ( 20 ) ( 145 )

5 unchanged sentences

Condensed Consolidated Statements of Cash Flows (unaudited)

($ in millions) Three months ended March 31,

($ in millions) Six months ended June 30,

Cash flows from operating activities

35 unchanged sentences

Redemption and repayment of debt

( 350 ) ( 750 )

Proceeds from issuance of preferred stock — 587

Redemption of preferred stock — ( 575 )

Contractholder fund deposits 67 66

5 unchanged sentences

Other ( 6 ) ( 4 )

Net cash (used in) provided by financing activities ( 166 ) 121

Net increase (decrease) in cash 128 ( 74 )

Net cash used in financing activities ( 252 ) ( 758 )

Net decrease in cash ( 123 ) ( 37 )

Cash at beginning of period 722 736

1 unchanged sentence

See notes to condensed consolidated financial statements.

First Quarter 2024 Form 10-Q 5

Second Quarter 2024 Form 10-Q 5

Notes to Condensed Consolidated Financial Statements

5 unchanged sentences

These condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”).

The condensed consolidated financial statements and notes as of March 31, 2024 and for the three month periods ended March 31, 2024 and 2023 are unaudited.

The condensed consolidated financial statements and notes as of June 30, 2024 and for the three and six month periods ended June 30, 2024 and 2023 are unaudited.

The condensed consolidated financial statements reflect all adjustments (consisting only of normal recurring accruals) which are, in the opinion of management, necessary for the fair presentation of the financial position, results of operations and cash flows for the interim periods.

3 unchanged sentences

All significant intercompany accounts and transactions have been eliminated.

Pending accounting standard

Pending accounting standards

Accounting for joint ventures In August 2023, the Financial Accounting Standards Board (“FASB”) issued guidance requiring a joint venture to initially measure assets contributed and liabilities assumed at fair value as of the formation date.

27 unchanged sentences

Computation of basic and diluted earnings per common share

(In millions, except per share data) Three months ended March 31,

(In millions, except per share data) Three months ended June 30, Six months ended June 30,

2024 2023 2024 2023

Net income (loss) $ 347 $ ( 1,375 ) $ 1,545 $ ( 1,696 )

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

Net income (loss) attributable to noncontrolling interest 16 ( 23 ) ( 4 ) ( 24 )

Net income (loss) attributable to Allstate 331 ( 1,352 ) 1,549 ( 1,672 )

2 unchanged sentences

Weighted average common shares outstanding

264.1 262.6 263.8 263.1

Effect of dilutive potential common shares (1) :

2 unchanged sentences

Weighted average common and dilutive potential common shares outstanding

267.1 262.6 266.8 263.1

Earnings per common share - Basic $ 1.14 $ ( 5.29 ) $ 5.65 $ ( 6.59 )

2 unchanged sentences

Anti-dilutive options excluded from diluted earnings per common share

0.6 3.2 0.5 2.9

Weighted average dilutive potential common shares excluded due to net loss applicable to common shareholders (1)

(1) As a result of the net loss reported for the three month period ended March 31, 2023, weighted average shares for basic earnings per share is also used for calculating diluted earnings per share because all dilutive potential common shares are anti-dilutive and are therefore excluded from the calculation.

(1) As a result of the net loss reported for the three and six month periods ended June 30, 2023, weighted average shares for basic earnings per share is also used for calculating diluted earnings per share because all dilutive potential common shares are anti-dilutive and are therefore excluded from the calculation.

Note 3 Reportable Segments

4 unchanged sentences

Management reviews assets at the Property-Liability, Protection Services, Allstate Health and Benefits, and Corporate and Other levels for decision-making purposes.

Underwriting income is calculated as premiums earned and other revenue, less claims and claims expenses (“losses”), amortization of DAC, operating costs and expenses, amortization or impairment of

purchased intangibles and restructuring and related charges as determined using GAAP.

Underwriting income is calculated as premiums earned and other revenue, less claims and claims expenses (“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 GAAP.

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

5 unchanged sentences

• Income tax expense or benefit on reconciling items

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

First Quarter 2024 Form 10-Q 7

Second Quarter 2024 Form 10-Q 7

Notes to Condensed Consolidated Financial Statements

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

Reportable segments financial performance

Three months ended March 31,

Three months ended June 30, Six months ended June 30,

($ in millions) 2024 2023 2024 2023

2 unchanged sentences

Run-off Property-Liability

( 3 ) ( 2 ) ( 8 ) ( 5 )

Total Property-Liability ( 145 ) ( 2,094 ) 753 ( 3,095 )

2 unchanged sentences

Allstate Health and Benefits

58 57 114 113

Corporate and Other ( 104 ) ( 111 ) ( 210 ) ( 200 )

1 unchanged sentence

Allstate Protection and Run-off Property-Liability net investment income

643 544 1,345 1,053

Net gains (losses) on investments and derivatives ( 103 ) ( 151 ) ( 267 ) ( 137 )

3 unchanged sentences

Gain (loss) on disposition 1 ( 8 ) 5 1

Income tax (expense) benefit on reconciling items (2)

Non-recurring costs (2)

— ( 90 ) — ( 90 )

Income tax (expense) benefit on Property-Liability and reconciling items (3)

( 78 ) 384 ( 337 ) 476

Total reconciling items 453 695 720 1,348

Net loss attributable to noncontrolling interest (3)

Net income (loss) attributable to noncontrolling interest (4)

16 ( 23 ) ( 4 ) ( 24 )

Net income (loss) applicable to common shareholders $ 301 $ ( 1,389 ) $ 1,490 $ ( 1,735 )

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

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

(2) Relates to settlement costs for non-recurring litigation that is outside of the ordinary course of business.

(3) The tax computation of the reporting segments and income tax benefit (expense) on reconciling items to net income (loss) are computed discretely based on the tax law of the jurisdictions applicable to the reporting entities.

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

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

8 www.allstate.com

1 unchanged sentence

Reportable segments revenue information

($ in millions) Three months ended March 31,

($ in millions) Three months ended June 30, Six months ended June 30,

2024 2023 2024 2023

Property-Liability

16 unchanged sentences

Protection and insurance products

126 128 252 256

Intersegment premiums and service fees (1)

11 unchanged sentences

Total Allstate Health and Benefits

620 576 1,257 1,161

Corporate and Other

7 unchanged sentences

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

First Quarter 2024 Form 10-Q 9

Second Quarter 2024 Form 10-Q 9

Notes to Condensed Consolidated Financial Statements

1 unchanged sentence

Portfolio composition

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

($ in millions) June 30, 2024 December 31, 2023

Fixed income securities, at fair value $ 52,576 $ 48,865

7 unchanged sentences

($ in millions) Amortized cost, net Gross unrealized Fair

March 31, 2024

June 30, 2024

government and agencies $ 10,724 $ 34 $ ( 194 ) $ 10,564

12 unchanged sentences

Scheduled maturities for fixed income securities

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

($ in millions) June 30, 2024 December 31, 2023

Amortized cost, net Fair

10 unchanged sentences

Net investment income

($ in millions) Three months ended March 31,

($ in millions) Three months ended June 30, Six months ended June 30,

2024 2023 2024 2023

Fixed income securities $ 571 $ 422 $ 1,097 $ 812

7 unchanged sentences

Net investment income

$ 712 $ 610 $ 1,476 $ 1,185

10 www.allstate.com

1 unchanged sentence

Net gains (losses) on investments and derivatives by asset type

($ in millions) Three months ended March 31,

($ in millions) Three months ended June 30, Six months ended June 30,

2024 2023 2024 2023

Fixed income securities $ ( 96 ) $ ( 132 ) $ ( 197 ) $ ( 268 )

Equity securities 14 21 76 188

Mortgage loans 1 ( 3 ) 1 ( 3 )

Limited partnership interests ( 13 ) ( 15 ) ( 5 ) 7

1 unchanged sentence

Other investments 6 ( 15 ) 4 ( 2 )

— — ( 123 ) —

Net gains (losses) on investments and derivatives $ ( 103 ) $ ( 151 ) $ ( 267 ) $ ( 137 )

(1) Related to the valuation allowance established for the surplus notes issued by Adirondack Insurance Exchange and New Jersey Skylands Insurance Association (together “Reciprocal Exchanges”).

(1) Related to the loss for the carrying value of the surplus notes issued by Adirondack Insurance Exchange and New Jersey Skylands Insurance Association (together “Reciprocal Exchanges”).

See Note 7 for further detail.

1 unchanged sentence

($ in millions)

Three months ended March 31,

Three months ended June 30, Six months ended June 30,

2024 2023 2024 2023

Sales $ ( 90 ) $ ( 130 ) $ ( 201 ) $ ( 250 )

5 unchanged sentences

Gross realized gains (losses) on sales of fixed income securities

($ in millions) Three months ended March 31,

($ in millions) Three months ended June 30, Six months ended June 30,

2024 2023 2024 2023

Gross realized gains $ 33 $ 28 $ 74 $ 74

1 unchanged sentence

Net appreciation (decline) recognized in net income for assets that are still held

($ in millions) Three months ended March 31,

($ in millions) Three months ended June 30, Six months ended June 30,

2024 2023 2024 2023

Equity securities $ 18 $ 19 $ 78 $ 66

1 unchanged sentence

Total $ 35 $ 51 $ 125 $ 114

Second Quarter 2024 Form 10-Q 11

Notes to Condensed Consolidated Financial Statements

Credit losses recognized in net income

($ in millions) Three months ended March 31,

($ in millions) Three months ended June 30, Six months ended June 30,

2024 2023 2024 2023

Fixed income securities:

1 unchanged sentence

Total fixed income securities ( 5 ) ( 7 ) ( 1 ) ( 16 )

Mortgage loans 1 ( 3 ) 1 ( 3 )

Limited partnership interests ( 16 ) ( 16 ) ( 16 ) ( 16 )

Other investments

Bank loans 2 ( 11 ) 5 ( 14 )

— — ( 123 ) —

Total credit losses by asset type $ ( 16 ) $ ( 37 ) $ ( 132 ) $ ( 49 )

1 unchanged sentence

Total $ ( 16 ) $ ( 37 ) $ ( 131 ) $ ( 49 )

First Quarter 2024 Form 10-Q 11

Notes to Condensed Consolidated Financial Statements

Unrealized net capital gains and losses included in accumulated other comprehensive income (“AOCI”)

2 unchanged sentences

gains (losses)

March 31, 2024 Gains Losses

June 30, 2024 Gains Losses

Fixed income securities $ 52,576 $ 292 $ ( 1,504 ) $ ( 1,212 )

18 unchanged sentences

Change in unrealized net capital gains (losses)

($ in millions) Three months ended March 31, 2024

($ in millions) Six months ended June 30, 2024

Fixed income securities $ ( 428 )

6 unchanged sentences

Change in unrealized net capital gains and losses, after-tax

12 www.allstate.com

Notes to Condensed Consolidated Financial Statements

Carrying value for limited partnership interests

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

EMA Fair Value Total EMA Fair Value Total

($ in millions) June 30, 2024 December 31, 2023

Private equity $ 7,426 $ 7,154

Real estate 1,142 1,085

158 — 158 141 — 141

Total $ 8,730 $ 8,380

2 unchanged sentences

Treasury bills and other short-term investments, are carried at fair value.

As of March 31, 2024 and December 31, 2023, the fair value of short-term investments totaled $ 4.32 billion and $ 5.14 billion, respectively.

12 www.allstate.com

Notes to Condensed Consolidated Financial Statements

As of June 30, 2024 and December 31, 2023, the fair value of short-term investments totaled $ 5.29 billion and $ 5.14 billion, respectively.

Other investments Other investments primarily consist of bank loans, real estate, policy loans and derivatives.

Bank loans are primarily senior secured corporate loans and are carried at amortized cost, net.

Policy loans are carried at unpaid principal balances.

Real estate is carried at cost less accumulated depreciation.

Derivatives are carried at fair value.

Policy loans are carried at unpaid principal balances.

Other investments by asset type

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

($ in millions) June 30, 2024 December 31, 2023

Bank loans, net $ 149 $ 224

1 unchanged sentence

Policy loans 120 119

Derivatives 1 1

Total $ 979 $ 1,055

8 unchanged sentences

All reasonably available information relevant to the collectability of the security is considered when developing the estimate of cash flows expected to be collected.

That information generally includes, but is not limited to, the remaining payment terms of the security, prepayment speeds, the financial condition and future earnings potential of the issue or issuer, expected defaults, expected recoveries, the value of underlying collateral, origination vintage year, geographic concentration of underlying collateral, available reserves or escrows, current subordination levels, third-party guarantees and other credit enhancements.

Other information, such as industry analyst reports and forecasts, credit ratings, financial condition of the bond insurer for insured fixed income

securities, and other market data relevant to the realizability of contractual cash flows, may also be considered.

That information generally includes, but is

not limited to, the remaining payment terms of the security, prepayment speeds, the financial condition and future earnings potential of the issue or issuer, expected defaults, expected recoveries, the value of underlying collateral, origination vintage year, geographic concentration of underlying collateral, available reserves or escrows, current subordination levels, third-party guarantees and other credit enhancements.

Other information, such as industry analyst reports and forecasts, credit ratings, financial condition of the bond insurer for insured fixed income securities, and other market data relevant to the realizability of contractual cash flows, may also be considered.

The estimated fair value of collateral will be used to estimate recovery value if the Company determines that the security is dependent on the liquidation of collateral for ultimate settlement.

5 unchanged sentences

Recoveries after write-offs are recognized when received.

Accrued interest excluded from the amortized cost of fixed income securities totaled $ 527 million and $ 495 million as of March 31, 2024 and December 31, 2023, respectively, and is reported within the accrued investment income line of the Condensed Consolidated Statements of Financial Position.

Accrued interest excluded from the amortized cost of fixed income securities totaled $ 570 million and $ 495 million

Second Quarter 2024 Form 10-Q 13

Notes to Condensed Consolidated Financial Statements

as of June 30, 2024 and December 31, 2023, respectively, and is reported within the accrued investment income line of the Condensed Consolidated Statements of Financial Position.

The Company monitors accrued interest and writes off amounts when they are not expected to be received.

1 unchanged sentence

The process also includes the monitoring of other credit loss indicators such as ratings, ratings downgrades and payment defaults.

The securities identified, in addition to other securities for which the Company may have a concern, are evaluated for potential credit losses using all reasonably available information relevant to the collectability or recovery of the security.

The securities identified, in addition to other securities for which the Company may have a concern, are evaluated for potential credit losses using all reasonably available

information relevant to the collectability or recovery of the security.

Inherent in the Company’s evaluation of credit losses for these securities are assumptions and estimates about the financial condition and future earnings potential of the issue or issuer.

Some of the factors that may be considered in evaluating whether a

First Quarter 2024 Form 10-Q 13

Notes to Condensed Consolidated Financial Statements

decline in fair value requires a credit loss allowance are:

Some of the factors that may be considered in evaluating whether a decline in fair value requires a credit loss allowance are:

1) the financial condition, near-term and long-term prospects of the issue or issuer, including relevant industry specific market conditions and trends, geographic location and implications of rating agency actions and offering prices;

2) the specific reasons that

a security is in an unrealized loss position, including overall market conditions which could affect liquidity;

2) the specific reasons that a security is in an unrealized loss position, including overall market conditions which could affect liquidity;

and 3) the extent to which the fair value has been less than amortized cost.

Rollforward of credit loss allowance for fixed income securities

Three months ended March 31,

Three months ended June 30, Six months ended June 30,

($ in millions) 2024 2023 2024 2023

5 unchanged sentences

Ending balance $ ( 19 ) $ ( 29 ) $ ( 19 ) $ ( 29 )

Components of credit loss allowance as of March 31

Components of credit loss allowance as of June 30

Corporate bonds $ ( 18 ) $ ( 27 )

1 unchanged sentence

Total $ ( 19 ) $ ( 29 )

14 www.allstate.com

Notes to Condensed Consolidated Financial Statements

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

($ in millions) Less than 12 months 12 months or more Total

March 31, 2024

June 30, 2024

Fixed income securities

19 unchanged sentences

Total fixed income securities 611 $ 5,274 $ ( 91 ) 4,232 $ 23,017 $ ( 1,343 ) $ ( 1,434 )

(1) Includes fixed income securities with fair values of $ 3 million and $ 32 million and unrealized losses of zero and $ 3 million with credit loss allowances of $ 1 million and $ 8 million as of March 31, 2024 and December 31, 2023, respectively.

14 www.allstate.com

Notes to Condensed Consolidated Financial Statements

Gross unrealized losses by unrealized loss position and credit quality as of March 31, 2024

(1) Includes fixed income securities with fair values of $ 24 million and $ 32 million and unrealized losses of $ 6 million and $ 3 million with credit loss allowances of $ 4 million and $ 8 million as of June 30, 2024 and December 31, 2023, respectively.

Gross unrealized losses by unrealized loss position and credit quality as of June 30, 2024

($ in millions) Investment

13 unchanged sentences

This evaluation also takes into consideration credit enhancement, measured in terms of (i) subordination from other classes of securities in the trust that are contractually obligated to absorb losses before the class of security the Company owns, and (ii) the expected impact of other structural features embedded in the securitization trust beneficial to the class of securities the Company owns, such as overcollateralization and excess spread.

Municipal bonds in an unrealized loss position were evaluated based on the underlying credit quality of the primary obligor, obligation type and quality of the underlying assets.

As of March 31, 2024, the Company has not made the decision to sell and it is not more likely than not the Company will be required to sell fixed income securities with unrealized losses before recovery of the amortized cost basis.

Municipal bonds in an unrealized loss position were evaluated based on the underlying credit

Second Quarter 2024 Form 10-Q 15

Notes to Condensed Consolidated Financial Statements

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

As of June 30, 2024, the Company has not made the decision to sell and it is not more likely than not the Company will be required to sell fixed income securities with unrealized losses before recovery of the amortized cost basis.

Loans The Company establishes a credit loss allowance for mortgage loans and bank loans when they are originated or purchased, and for unfunded commitments unless they are unconditionally cancellable by the Company.

1 unchanged sentence

The Company also considers such factors as historical losses, expected prepayments and various economic factors.

mortgage loans, the Company considers origination vintage year and property level information such as debt service coverage, property type, property location and collateral value.

For mortgage loans, the Company considers origination vintage year and property level information such as debt service coverage, property type, property location and collateral value.

For bank loans, the Company considers the credit rating of the borrower, credit spreads and type of loan.

4 unchanged sentences

If a loan recovers after a write-off, the estimate of expected credit losses includes the expected recovery.

Accrual of income is suspended for loans that are in default or when full and timely collection of principal and interest payments is not probable.

Accrual of income is suspended for loans that are in default or when full and timely collection of principal

and interest payments is not probable.

Accrued income receivable is monitored for recoverability and when not expected to be collected is written off through net investment income.

1 unchanged sentence

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

Accrued interest

($ in millions) March 31, December 31,

Mortgage loans $ 3 $ 3

Bank Loans 3 3

First Quarter 2024 Form 10-Q 15

Notes to Condensed Consolidated Financial Statements

Accrued interest as of June 30, 2024 and December 31, 2023 was not significant for bank loans or mortgage loans.

Mortgage loans When it is determined a mortgage loan shall be evaluated individually, the Company uses various methods to estimate credit losses on individual loans such as using collateral value less estimated costs to sell where applicable, including when foreclosure is probable or when repayment is expected to be provided substantially through the operation or sale of the collateral and the borrower is experiencing financial difficulty.

1 unchanged sentence

An alternative approach may be utilized to estimate credit losses using the present value of the loan’s expected future repayment cash flows discounted at the loan’s current effective interest rate.

Individual loan credit loss allowances are adjusted

for subsequent changes in the fair value of the collateral less costs to sell, when applicable, or present value of the loan’s expected future repayment cash flows.

Individual loan credit loss allowances are adjusted for subsequent changes in the fair value of the collateral less costs to sell, when applicable, or present value of the loan’s expected future repayment cash flows.

Debt service coverage ratio is considered a key credit quality indicator when mortgage loan credit loss allowances are estimated.

2 unchanged sentences

Mortgage loans amortized cost by debt service coverage ratio distribution and year of origination

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

($ in millions) 2019 and prior 2020 2021 2022 2023 Current Total Total

6 unchanged sentences

Amortized cost, net $ 815 $ 822

16 www.allstate.com

Notes to Condensed Consolidated Financial Statements

Mortgage loans with a debt service coverage ratio below 1.0 that are not considered impaired primarily relate to instances where the borrower has the financial capacity to fund the revenue shortfalls from the properties for the foreseeable term, the decrease in cash flows from the properties is considered

temporary, or there are other risk mitigating circumstances such as additional collateral, escrow balances or borrower guarantees.

Payments on all mortgage loans were current as of March 31, 2024 and December 31, 2023.

Payments on all mortgage loans were current as of June 30, 2024 and December 31, 2023.

Rollforward of credit loss allowance for mortgage loans

Three months ended March 31,

Three months ended June 30, Six months ended June 30,

($ in millions) 2024 2023 2024 2023

Beginning balance $ ( 11 ) $ ( 7 ) $ ( 11 ) $ ( 7 )

Net increases related to credit losses — —

Net (increases) decreases related to credit losses 1 ( 3 ) 1 ( 3 )

Write-offs — — — —

5 unchanged sentences

The year of origination is determined to be the year in which the asset is acquired.

16 www.allstate.com

Notes to Condensed Consolidated Financial Statements

Bank loans amortized cost by credit rating and year of origination

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

($ in millions) 2019 and prior 2020 2021 2022 2023 Current Total Total

7 unchanged sentences

Rollforward of credit loss allowance for bank loans

($ in millions) Three months ended March 31,

($ in millions) Three months ended June 30, Six months ended June 30,

2024 2023 2024 2023

Beginning balance $ ( 13 ) $ ( 52 ) $ ( 22 ) $ ( 57 )

7 unchanged sentences

The hierarchy for inputs used in determining fair value maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that observable inputs be used when available.

Assets and liabilities recorded on the Condensed Consolidated Statements of Financial Position at fair value are categorized in the fair value hierarchy based on the observability of inputs to the valuation techniques as follows:

Assets and liabilities recorded on the Condensed Consolidated Statements of Financial Position at fair value are categorized in the

fair value hierarchy based on the observability of inputs to the valuation techniques as follows:

Assets and liabilities whose values are based on unadjusted quoted prices for identical assets or liabilities in an active market that the Company can access.

1 unchanged sentence

(a) Quoted prices for similar assets or liabilities in active markets;

Second Quarter 2024 Form 10-Q 17

Notes to Condensed Consolidated Financial Statements

(b) Quoted prices for identical or similar assets or liabilities in markets that are not active;

12 unchanged sentences

For fair values received from third parties or internally estimated, the Company’s processes and controls are designed to ensure that the valuation methodologies are appropriate and consistently applied, the inputs and assumptions are reasonable and consistent with the objective of determining fair value, and the fair values are accurately recorded.

For example, on a continuing basis, the Company assesses the reasonableness of individual fair values that have stale security prices or that exceed certain thresholds as compared to previous fair values received from valuation service

First Quarter 2024 Form 10-Q 17

Notes to Condensed Consolidated Financial Statements

providers or brokers or derived from internal models.

The Company performs procedures to understand and assess the methodologies, processes and controls of valuation service providers.

1 unchanged sentence

The Company performs ongoing price validation procedures such as back-testing of actual sales, which corroborate the various inputs used in internal models to market observable data.

When fair value determinations are expected to be more variable, the Company validates them through reviews by members of management who have relevant expertise and who are independent of those charged with executing investment transactions.

value determinations are expected to be more variable, the Company validates them through reviews by members of management who have relevant expertise and who are independent of those charged with executing investment transactions.

The Company has two types of situations where investments are classified as Level 3 in the fair value hierarchy:

14 unchanged sentences

Corporate - privately placed:

Privately placed are valued using a discounted cash flow model that is widely accepted in the financial services industry and uses market observable inputs and inputs derived principally from, or corroborated by, observable market data.

Privately placed are valued using a discounted cash flow model that is widely accepted in the financial services industry

18 www.allstate.com

Notes to Condensed Consolidated Financial Statements

and uses market observable inputs and inputs derived principally from, or corroborated by, observable market data.

The primary inputs to the discounted cash flow model include an interest rate yield curve, as well as published credit spreads for similar assets in markets that are not active that incorporate the credit quality and industry sector of the issuer.

10 unchanged sentences

Over-the-counter (“OTC”) derivatives, including interest rate swaps, foreign currency swaps, total return swaps, foreign exchange forward contracts, certain options and certain credit default swaps, are valued using models that rely on inputs such as interest rate yield curves, implied volatilities, index price levels, currency rates, and credit spreads that are observable for substantially the full term of the contract.

The valuation techniques underlying the models are widely accepted in the financial

18 www.allstate.com

Notes to Condensed Consolidated Financial Statements

services industry and do not involve significant judgment.

The valuation techniques underlying the models are widely accepted in the financial services industry and do not involve significant judgment.

Level 3 measurements

2 unchanged sentences

The primary inputs to the valuation of these municipal bonds include quoted prices for identical or similar assets that are not market observable, contractual cash flows, benchmark yields and credit spreads.

Also included are municipal bonds valued based on non-binding broker quotes where the inputs have not been corroborated to be market observable and municipal bonds in default valued based on the present value of expected cash flows.

Also included are municipal bonds valued based on non-binding broker quotes where the inputs have not been corroborated to be market observable

and municipal bonds in default valued based on the present value of expected cash flows.

Corporate - public and privately placed and ABS:

16 unchanged sentences

Investments excluded from the fair value hierarchy

Investments reported at net asset value (“NAV”)

Limited partnerships carried at fair value, which do not have readily determinable fair values, use NAV provided by the investees and are excluded from the fair value hierarchy.

1 unchanged sentence

The Company receives distributions of income and proceeds from the liquidation of the underlying assets of the investees, which usually takes place in years 4-9 of the typical contractual life of 10 - 12 years.

As of March 31, 2024, the Company has commitments to invest $ 172 million in these limited partnership interests.

First Quarter 2024 Form 10-Q 19

As of June 30, 2024, the Company has commitments to invest $ 171 million in these limited partnership interests.

Second Quarter 2024 Form 10-Q 19

Notes to Condensed Consolidated Financial Statements

Assets and liabilities measured at fair value

March 31, 2024

June 30, 2024

($ in millions) Quoted prices in active markets for identical assets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Counterparty and cash collateral netting Total

52 unchanged sentences

(1) Excludes $ 150 million of preferred stock measured at cost.

As of March 31, 2024 and December 31, 2023, Level 3 fair value measurements of fixed income securities total $ 143 million and $ 153 million, respectively, and include $ 23 million and $ 26 million, respectively, of securities valued based on non-binding broker quotes where the inputs have not been corroborated to be market observable and $ 8 million and $ 11 million, respectively, of municipal fixed income securities that are not rated by third-party credit rating agencies.

As of June 30, 2024 and December 31, 2023, Level 3 fair value measurements of fixed income securities total $ 158 million and $ 153 million, respectively, and include $ 23 million and $ 26 million, respectively, of securities valued based on non-binding broker quotes where the inputs have not been corroborated to be market observable and $ 7 million and $ 11 million, respectively, of municipal fixed income securities that are not rated by third-party credit rating agencies.

An increase (decrease) in credit spreads for fixed income securities valued based on non-binding broker quotes would result in a lower (higher) fair value, and an increase (decrease) in the credit rating of municipal bonds that are not rated by third-party credit rating agencies would result in a higher (lower) fair value.

First Quarter 2024 Form 10-Q 21

Second Quarter 2024 Form 10-Q 21

Notes to Condensed Consolidated Financial Statements

Rollforward of Level 3 assets and liabilities held at fair value during the three month period ended March 31, 2024

Rollforward of Level 3 assets and liabilities held at fair value during the three month period ended June 30, 2024

Balance as of

December 31, 2023 Total gains (losses)

March 31, 2024 Total gains (losses)

Transfers Balance as of

March 31, 2024

June 30, 2024

($ in millions) Net income OCI Into Level 3 Out of Level 3 Purchases Sales Issues Settlements

10 unchanged sentences

Total recurring Level 3 assets $ 694 $ ( 3 ) $ ( 1 ) $ — $ — $ 35 $ ( 48 ) $ — $ ( 2 ) $ 675

Rollforward of Level 3 assets and liabilities held at fair value during the three month period ended March 31, 2023

Rollforward of Level 3 assets and liabilities held at fair value during the six month period ended June 30, 2024

Balance as of December 31, 2023 Total gains (losses)

Transfers Balance as of June 30, 2024

($ in millions) Net income OCI Into Level 3 Out of Level 3 Purchases Sales Issues Settlements

Fixed income securities:

Municipal $ 11 $ — $ — $ — $ — $ — $ ( 2 ) $ — $ ( 2 ) $ 7

Corporate - public 26 1 1 — — 11 ( 9 ) — — 30

Corporate - privately placed 58 ( 6 ) — — — — ( 2 ) — — 50

ABS 58 — — — — 14 — — ( 1 ) 71

Total fixed income securities 153 ( 5 ) 1 — — 25 ( 13 ) — ( 3 ) 158

Equity securities 402 6 — — — 9 ( 24 ) — — 393

Short-term investments 1 — — — — 21 ( 20 ) — ( 1 ) 1

Other investments 2 — — — — — — — — 2

Other assets 118 3 — — — — — — — 121

Total recurring Level 3 assets $ 676 $ 4 $ 1 $ — $ — $ 55 $ ( 57 ) $ — $ ( 4 ) $ 675

22 www.allstate.com

Notes to Condensed Consolidated Financial Statements

Rollforward of Level 3 assets and liabilities held at fair value during the three month period ended June 30, 2023

Balance as of

December 31, 2022 Total gains (losses)

March 31, 2023 Total gains (losses)

Transfers Balance as of

March 31, 2023

June 30, 2023

($ in millions) Net income OCI Into Level 3 Out of Level 3 Purchases Sales Issues Settlements

10 unchanged sentences

Total recurring Level 3 assets $ 600 $ ( 5 ) $ — $ 16 $ — $ 36 $ ( 21 ) $ — $ ( 1 ) $ 625

Rollforward of Level 3 assets and liabilities held at fair value during the six month period ended June 30, 2023

Balance as of

December 31, 2022 Total gains (losses)

Transfers Balance as of June 30, 2023

($ in millions) Net income OCI Into Level 3 Out of Level 3 Purchases Sales Issues Settlements

Fixed income securities:

Municipal $ 21 $ 3 $ ( 1 ) $ — $ — $ — $ ( 9 ) $ — $ ( 2 ) $ 12

Corporate - public 69 ( 1 ) 2 — — — ( 44 ) — — 26

Corporate - privately placed 55 ( 11 ) 1 16 — 1 ( 2 ) — — 60

ABS 28 — — — — 7 — — ( 1 ) 34

Total fixed income securities 173 ( 9 ) 2 16 — 8 ( 55 ) — ( 3 ) 132

Equity securities 333 7 — — — 70 ( 29 ) — — 381

Short-term investments 6 — — — — — — — — 6

Other investments 3 ( 1 ) — — — — — — — 2

Other assets 103 1 — — — — — — — 104

Total recurring Level 3 assets $ 618 $ ( 2 ) $ 2 $ 16 $ — $ 78 $ ( 84 ) $ — $ ( 3 ) $ 625

Total Level 3 gains (losses) included in net income

Three months ended March 31,

Three months ended June 30, Six months ended June 30,

($ in millions) 2024 2023 2024 2023

1 unchanged sentence

Net gains (losses) on investments and derivatives (1)

( 5 ) — — ( 1 )

Operating costs and expenses (1)

1 unchanged sentence

Historical results have been updated to conform with this presentation.

There were no transfers into or out of Level 3 during the three months ended March 31, 2024 and 2023.

22 www.allstate.com

There were no transfers into Level 3 during the three and six months ended June 30, 2024.

Transfers into Level 3 during the three and six months ended June 30, 2023 included situations where securities were written down utilizing an internal price where the inputs have not been corroborated to be market

observable resulting in the securities being classified as Level 3.

There were no transfers out of Level 3 during the three and six months ended June 30, 2024 and 2023.

Second Quarter 2024 Form 10-Q 23

Notes to Condensed Consolidated Financial Statements

Valuation changes included in net income and OCI for Level 3 assets and liabilities held as of March 31,

Three months ended March 31,

Valuation changes included in net income and OCI for Level 3 assets and liabilities still held

Three months ended June 30, Six months ended June 30,

($ in millions) 2024 2023 2024 2023

Fixed income securities:

Corporate - public $ 1 $ — $ 1 $ —

Corporate - privately placed ( 2 ) ( 7 ) ( 6 ) ( 11 )

11 unchanged sentences

Corporate - public $ ( 1 ) $ — $ 1 $ 1

Corporate - privately placed — 1 — 1

Changes in unrealized net capital gains and losses reported in OCI $ ( 1 ) $ 1 $ 1 $ 2

Financial instruments not carried at fair value

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

($ in millions) June 30, 2024 December 31, 2023

Financial assets Fair value level Amortized cost, net Fair

13 unchanged sentences

The Company replicates fixed income securities using a combination of a credit default swap, index total return swap, options, futures, or a foreign currency forward contract and one or more highly rated fixed income securities, primarily investment grade host bonds, to synthetically replicate the economic characteristics of one or more cash market securities.

The Company replicates equity securities using futures, index total return swaps, and options to increase equity exposure.

The Company replicates equity

securities using futures, index total return swaps, and options to increase equity exposure.

Property-Liability may use interest rate swaps, swaptions, futures and options to manage the interest rate risks of existing investments.

3 unchanged sentences

Equity index total return swaps, futures and options are used by Property-Liability to offset valuation losses in the equity portfolio during periods of declining equity market values.

In addition, equity futures are used to hedge the market risk related to deferred compensation liability contracts.

Forward contracts are primarily used by Property-Liability to hedge foreign currency risk associated with holding foreign currency denominated investments and foreign operations.

First Quarter 2024 Form 10-Q 23

24 www.allstate.com

Notes to Condensed Consolidated Financial Statements

equity futures are used to hedge the market risk related to deferred compensation liability contracts.

Forward contracts are primarily used by Property-Liability to hedge foreign currency risk associated with holding foreign currency denominated investments and foreign operations.

When derivatives meet specific criteria, they may be designated as accounting hedges and accounted for as fair value, cash flow, foreign currency fair value or foreign currency cash flow hedges.

4 unchanged sentences

For those derivatives which qualify and have been designated as fair value accounting hedges, net income includes the changes in the fair value of both the derivative instrument and the hedged risk.

For cash flow hedges, gains and losses are amortized from AOCI and are reported in net income in the same period the forecasted transactions being hedged impact net income.

cash flow hedges, gains and losses are amortized from AOCI and are reported in net income in the same period the forecasted transactions being hedged impact net income.

Non-hedge accounting is generally used for “portfolio” level hedging strategies where the terms of the individual hedged items do not meet the strict homogeneity requirements to permit the application of hedge accounting.

5 unchanged sentences

There are no collateral requirements related to the contingent consideration.

24 www.allstate.com

Second Quarter 2024 Form 10-Q 25

Notes to Condensed Consolidated Financial Statements

Summary of the volume and fair value positions of derivative instruments as of March 31, 2024

Summary of the volume and fair value positions of derivative instruments as of June 30, 2024

($ in millions, except number of contracts) Volume (1)

7 unchanged sentences

Futures Other assets n/a 1,192 1 1 —

Foreign currency contracts

Foreign currency forwards Other investments $ 183 n/a 2 2 —

Contingent consideration Other assets $ 250 n/a 121 121 —

Credit default contracts

Credit default swaps – buying protection Other investments 43 n/a ( 1 ) — ( 1 )

Total asset derivatives $ 250 4,758 $ 123 $ 123 $ —

15 unchanged sentences

(n/a = not applicable)

First Quarter 2024 Form 10-Q 25

26 www.allstate.com

Notes to Condensed Consolidated Financial Statements

33 unchanged sentences

Gross amount Counter-party netting Cash collateral (received) pledged Net amount on balance sheet Securities collateral (received) pledged Net amount

March 31, 2024

June 30, 2024

Asset derivatives $ 7 $ ( 7 ) $ — $ — $ — $ —

4 unchanged sentences

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

26 www.allstate.com

Second Quarter 2024 Form 10-Q 27

Notes to Condensed Consolidated Financial Statements

1 unchanged sentence

($ in millions) Net gains (losses) on investments and derivatives Operating costs and expenses Total gain (loss) recognized in net income on derivatives

Three months ended March 31, 2024

Three months ended June 30, 2024

Interest rate contracts $ ( 14 ) $ — $ ( 14 )

2 unchanged sentences

Foreign currency contracts 3 — 3

Total $ ( 15 ) $ 1 $ ( 14 )

Six months ended June 30, 2024

Interest rate contracts $ ( 21 ) $ — $ ( 21 )

Equity and index contracts ( 15 ) 14 ( 1 )

Contingent consideration — 3 3

Foreign currency contracts 14 — 14

Credit default contracts ( 1 ) — ( 1 )

Total $ ( 23 ) $ 17 $ ( 6 )

Three months ended March 31, 2023

Three months ended June 30, 2023

Interest rate contracts $ 18 $ — $ 18

4 unchanged sentences

Total $ ( 7 ) $ 2 $ ( 5 )

Six months ended June 30, 2023

Interest rate contracts $ ( 17 ) $ — $ ( 17 )

Equity and index contracts ( 16 ) 18 2

Contingent consideration — 1 1

Foreign currency contracts ( 11 ) — ( 11 )

Credit default contracts ( 15 ) — ( 15 )

Total $ ( 59 ) $ 19 $ ( 40 )

The Company manages its exposure to credit risk by utilizing highly rated counterparties, establishing risk control limits, executing legally enforceable master netting agreements (“MNAs”) and obtaining collateral where appropriate.

1 unchanged sentence

OTC cash and securities collateral pledged

($ in millions) March 31, 2024

($ in millions) June 30, 2024

Pledged by the Company $ —

Pledged to the Company (1)

(1) $ 1 million collateral was posted under MNAs for contracts containing credit-risk-contingent provisions that are in a liability provision.

(1) No collateral was posted under MNAs for contracts containing credit-risk-contingent provisions that are in a liability provision.

The Company has not incurred any losses on derivative financial instruments due to counterparty nonperformance.

3 unchanged sentences

OTC derivatives counterparty credit exposure by counterparty credit rating

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

($ in millions) June 30, 2024 December 31, 2023

parties Notional

6 unchanged sentences

(2) Only OTC derivatives with a net positive fair value are included for each counterparty.

28 www.allstate.com

Notes to Condensed Consolidated Financial Statements

For certain exchange traded and cleared derivatives, margin deposits are required as well as daily cash settlements of margin accounts.

Exchange traded and cleared margin deposits

($ in millions) March 31, 2024

($ in millions) June 30, 2024

Pledged by the Company $ 79

2 unchanged sentences

Market risk exists for all of the derivative financial instruments the Company currently holds, as these instruments may become less valuable due to adverse changes in market conditions.

To limit this risk,

the Company’s senior management has established risk control limits.

To limit this risk, the Company’s senior management has established risk control limits.

In addition, changes in fair value of the derivative financial instruments that the Company uses for risk management purposes are generally offset by the change in the fair value or cash flows of the hedged risk component of the related assets, liabilities or forecasted transactions.

First Quarter 2024 Form 10-Q 27

Notes to Condensed Consolidated Financial Statements

Certain of the Company’s derivative transactions contain credit-risk-contingent termination events and cross-default provisions.

2 unchanged sentences

The following table summarizes the fair value of derivative instruments with termination, cross-default or collateral credit-risk-contingent features that are in a liability position, as well as the fair value of assets and collateral that are netted against the liability in accordance with provisions within legally enforceable MNAs.

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

($ in millions) June 30, 2024 December 31, 2023

Gross liability fair value of contracts containing credit-risk-contingent features $ 2 $ 10

7 unchanged sentences

The results of the Reciprocal Exchanges are included in the Allstate Protection segment as the Company manages the business operations of the Reciprocal Exchanges and has the power to direct their activities that most significantly impact their economic performance.

The Company receives a management fee for the services provided to the Reciprocal Exchanges totaling $ 10 million and $ 11 million for the three months ended March 31, 2024 and 2023, respectively.

In addition, as of March 31, 2024 and December 31, 2023, the Company holds interests of $ 123 million in the form of surplus notes that provide capital to the Reciprocal Exchanges and would absorb expected losses.

As of March 31, 2024, Adirondack’s capital was below levels required by insurance regulations.

Due to ongoing operating losses and the inability of the Reciprocal Exchanges to obtain approval for premium rate increases that are commensurate with increases in claims and claims expense, the Company established a valuation allowance of $ 123 million related to the surplus notes during the three months ended March 31, 2024.

In addition, the Company has a 100 % quota share reinsurance agreement with Skylands to cede all of Skylands’ business to the Company and a 36.5 % quota share reinsurance agreement with Adirondack.

Claims and claims expense ceded to the Company were $ 12 million and $ 7 million for the three months ended March 31, 2024 and 2023, respectively.

The Reciprocal Exchanges generated $ 61 million of earned premiums for the three months ended March 31, 2024 compared to $ 57 million for the three months ended March 31, 2023.

Total costs and expenses were $ 87 million for the three months ended March 31, 2024 compared to $ 59 million for the three months ended March 31, 2023.

The Company receives a management fee for the services provided to the Reciprocal Exchanges totaling $ 11 million and $ 21 million for the three and six months ended June 30, 2024, respectively, compared to $ 12 million and $ 23 million for the three and six months ended June 30, 2023, respectively.

In addition, as of June 30, 2024 and December 31, 2023, the Company holds interests of $ 123 million in the form of surplus notes that provide capital to the Reciprocal Exchanges and would absorb expected losses.

As of June 30, 2024, Adirondack’s capital was below levels required by insurance regulations and its December 31, 2023 statutory-basis audited financial statements included disclosure expressing substantial

doubt about Adirondack’s ability to continue as a going concern.

Due to ongoing operating losses and the inability of the Reciprocal Exchanges to obtain approval for premium rate increases that are commensurate with increases in claims and claims expense, the Company recorded a loss for the carrying value of the surplus notes in the amount of $ 123 million in the first quarter of 2024.

The loss has been reflected as a capital transaction attributable to noncontrolling interest as the Company expects 100 % of its interests in surplus notes to absorb expected losses of the Reciprocal Exchanges.

In addition, the Company has a 100 % quota share reinsurance agreement with Skylands to cede all of Skylands’ business to the Company.

Claims and claims expense ceded to the Company were $ 18 million and $ 30 million for the three and six months ended June 30, 2024, respectively, compared to $ 10 million and $ 17 million for the three and six months ended June 30, 2023, respectively.

The Reciprocal Exchanges generated $ 61 million and $ 122 million of earned premiums for the three and six months ended June 30, 2024, respectively, compared to $ 57 million and $ 114 million for the three and six months ended June 30, 2023, respectively.

Total costs and expenses were $ 58 million and $ 145 million for the three and six months ended June 30, 2024, respectively, compared to $ 85 million and $ 144

Second Quarter 2024 Form 10-Q 29

Notes to Condensed Consolidated Financial Statements

million for the three and six months ended June 30, 2023, respectively.

In the event of dissolution, policyholders would share any residual unassigned surplus but are not subject to assessment for any deficit in unassigned surplus of the Reciprocal Exchanges.

1 unchanged sentence

The table below reflects the consolidated VIE results, which exclude all intercompany transactions including surplus notes and related accrued interest, management fees and intercompany reinsurance transactions.

28 www.allstate.com

Notes to Condensed Consolidated Financial Statements

Assets and liabilities of Reciprocal Exchanges included in the condensed consolidated statement of financial position (1)

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

($ in millions) June 30, 2024 December 31, 2023

Fixed income securities $ 227 $ 267

16 unchanged sentences

When the Company experiences changes in the mix or type of claims or changing claim settlement patterns or data, it applies actuarial judgment in the determination and selection of development factors to develop reserve liabilities.

Supply chain disruptions and inflation have resulted in higher part costs, used car values and longer time to claim resolution, which have combined with labor shortages to increase physical damage loss costs.

Medical inflation, treatment trends, attorney representation, litigation costs and more severe accidents have contributed to higher third-party bodily injury loss costs.

Inflation and a higher mix of more complex repairs, combined with skilled labor shortages, have increased physical damage loss costs.

Medical inflation, increased treatment trends, higher attorney representation, rising litigation costs and more severe accidents have contributed to higher third-party bodily injury loss costs.

The Company has also digitized and modified claim processes to increase effectiveness and efficiency.

These factors may lead to historical development trends being less predictive of future loss development, potentially creating additional reserve variability.

Generally, the initial reserves for a new accident year are established based on claim frequency and severity assumptions for different business segments, lines and coverages based on historical relationships to relevant inflation indicators.

Generally, the initial reserves for a new accident year are established based on claim frequency and

severity assumptions for different business segments, lines and coverages based on historical relationships to relevant inflation indicators.

Reserves for prior accident years are statistically determined using several different actuarial estimation methods.

Changes in auto claim frequency may result from changes in mix of business, driving behaviors, miles driven or other factors.

Changes in auto current year claim severity are generally influenced by inflation in the medical and

auto repair sectors, the effectiveness and efficiency of claim settlements and changes in mix of claim types.

Changes in auto current year claim severity are generally influenced by inflation in the medical and auto repair sectors, changes in attorney represented and litigated claim behavior, the effectiveness and efficiency of claim settlements and changes in mix of claim types.

When changes in claim data occur, actuarial judgment is used to determine appropriate development factors to establish reserves.

2 unchanged sentences

The effects of inflation are implicitly considered in the reserving process.

Because reserves are estimates of unpaid portions of losses that have occurred, including incurred but not reported (“IBNR”) losses, the establishment of appropriate reserves, including reserves for catastrophes, Run-off Property-Liability and reinsurance and indemnification recoverables, is an inherently uncertain and complex process.

Because reserves are estimates of unpaid portions of losses that have occurred, including incurred but not reported (“IBNR”) losses, the establishment of

30 www.allstate.com

Notes to Condensed Consolidated Financial Statements

appropriate reserves, including reserves for catastrophes, Run-off Property-Liability and reinsurance and indemnification recoverables, is an inherently uncertain and complex process.

The ultimate cost of losses may vary materially from recorded amounts, which are based on management’s best estimates.

1 unchanged sentence

The Company also has uncertainty in the Run-off Property-Liability reserves that are based on events long since passed and are complicated by lack of historical data, legal interpretations, unresolved legal issues and legislative intent based on establishment of facts.

First Quarter 2024 Form 10-Q 29

Notes to Condensed Consolidated Financial Statements

The Company regularly updates its reserve estimates as new information becomes available and as events unfold that may affect the resolution of unsettled claims.

2 unchanged sentences

Rollforward of the reserve for property and casualty insurance claims and claims expense

Three months ended March 31,

Six months ended June 30,

($ in millions) 2024 2023

10 unchanged sentences

Total paid ( 18,552 ) ( 18,617 )

Net balance as of March 31 31,810 29,533

Balance as of March 31 $ 40,143 $ 38,644

Net balance as of June 30 33,212 31,801

Balance as of June 30 $ 41,553 $ 40,531

(1) Recoverables comprises reinsurance and indemnification recoverables.

Incurred claims and claims expense represents the sum of paid losses, claim adjustment expenses and reserve changes in the period.

This expense included losses from catastrophes of $ 731 million and $ 1.69 billion in the three months ended March 31, 2024 and 2023, respectively, net of recoverables.

This expense included losses from catastrophes of $ 2.85 billion and $ 4.39 billion in the six months ended June 30, 2024 and 2023, respectively, net of recoverables.

Catastrophes are an inherent risk of the property and casualty insurance business that have contributed to, and will continue to contribute to, material year-to-year fluctuations in the Company’s results of operations and financial position.

Second Quarter 2024 Form 10-Q 31

Notes to Condensed Consolidated Financial Statements

Prior year reserve reestimates included in claims and claims expense (1)

3 unchanged sentences

2023 2024 2023

Three months ended March 31,

Three months ended June 30,

Auto $ ( 171 ) $ 116 $ ( 9 ) $ ( 19 ) $ ( 180 ) $ 97

4 unchanged sentences

Run-off Property-Liability

Protection Services ( 1 ) ( 1 ) — — ( 1 ) ( 1 )

Total prior year reserve reestimates $ ( 65 ) $ 181 $ ( 138 ) $ 31 $ ( 203 ) $ 212

Six months ended June 30,

Auto $ ( 238 ) $ 119 $ ( 16 ) $ ( 47 ) $ ( 254 ) $ 72

Homeowners ( 103 ) 29 ( 277 ) 45 ( 380 ) 74

Other personal lines 115 18 ( 2 ) ( 12 ) 113 6

Commercial lines 163 29 ( 5 ) 3 158 32

Other business lines 4 11 — — 4 11

Run-off Property-Liability

Protection Services ( 1 ) ( 1 ) — — ( 1 ) ( 1 )

Total prior year reserve reestimates

$ ( 54 ) $ 208 $ ( 300 ) $ ( 11 ) $ ( 354 ) $ 197

(1) Favorable reserve reestimates are shown in parentheses.

3 unchanged sentences

Rollforward of reserve for future policy benefits (1)

Three months ended March 31,

Six months ended June 30,

health Traditional

29 unchanged sentences

$ 670 $ 689 $ 330 $ 293 $ 1,000 $ 982

(1) Excludes $ 259 million and $ 271 million of reserves related to short-duration and other contracts as of March 31, 2024 and 2023, respectively.

(1) Excludes $ 263 million and $ 271 million of reserves related to short-duration and other contracts as of June 30, 2024 and 2023, respectively.

Revenue and interest recognized in the condensed consolidated statements of operations

($ in millions) Three months ended March 31,

($ in millions) Six months ended June 30,

Accident and health $ 436 $ 446

8 unchanged sentences

(2) Total interest expense presented as part of Accident, health and other policy benefits on the Condensed Consolidated Statements of Operations.

First Quarter 2024 Form 10-Q 31

Second Quarter 2024 Form 10-Q 33

Notes to Condensed Consolidated Financial Statements

The following table provides the amount of undiscounted and discounted expected gross premiums and expected future benefits and expenses for nonparticipating traditional and limited-payment contracts.

As of March 31,

As of June 30,

($ in millions) Undiscounted Discounted Undiscounted Discounted

5 unchanged sentences

Expected future benefits and expenses 1,456 697 1,008 539

Key assumptions used in calculating the reserve for future policy benefits

As of March 31,

The following table provides the weighted-average duration and weighted-average interest rates for the reserve for future policy benefits.

As of June 30,

Accident and health Traditional life

8 unchanged sentences

The lapse assumption is determined based on historical lapses of the Company’s insurance contracts.

For the first quarter of 2024, actual experience for lapses in accident and health products was higher than expected.

For the first quarter of 2023, actual experience for lapses in accident and health products was lower than expected.

For the first quarter of 2024 and 2023, actual experience for lapses in traditional life products was lower than expected.

For the six months ended June 30, 2024 and 2023, actual experience for lapses in accident and health products was higher than expected.

For the six months ended June 30, 2024 and 2023, actual experience for lapses in traditional life products was lower than expected.

Contractholder funds

Contractholder funds activity

Three months ended March 31,

Six months ended June 30,

($ in millions) 2024 2023

23 unchanged sentences

At guaranteed minimum 1 - 50 basis points above

March 31, 2024

June 30, 2024

Less than 3.00 %

6 unchanged sentences

Total $ 773 $ 37 $ 891

March 31, 2023

June 30, 2023

Less than 3.00 %

11 unchanged sentences

Effects of reinsurance ceded and indemnification programs on property and casualty premiums earned and accident and health insurance premiums and contract charges

($ in millions) Three months ended March 31,

($ in millions) Three months ended June 30, Six months ended June 30,

2024 2023 2024 2023

Property and casualty insurance premiums earned $ ( 588 ) $ ( 495 ) $ ( 1,145 ) $ ( 941 )

1 unchanged sentence

Effects of reinsurance ceded and indemnification programs on property and casualty insurance claims and claims expense and accident, health and other policy benefits

($ in millions) Three months ended March 31,

($ in millions) Three months ended June 30, Six months ended June 30,

2024 2023 2024 2023

Property and casualty insurance claims and claims expense

1 unchanged sentence

Accident, health and other policy benefits

( 8 ) ( 17 ) ( 14 ) ( 25 )

Reinsurance and indemnification recoverables

Reinsurance and indemnification recoverables, net

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

($ in millions) June 30, 2024 December 31, 2023

Property and casualty

4 unchanged sentences

Total $ 8,730 $ 8,809

First Quarter 2024 Form 10-Q 33

Second Quarter 2024 Form 10-Q 35

Notes to Condensed Consolidated Financial Statements

Rollforward of credit loss allowance for reinsurance recoverables

($ in millions) Three months ended March 31,

($ in millions) Three months ended June 30, Six months ended June 30,

2024 2023 2024 2023

Property and casualty (1) (2)

11 unchanged sentences

Note 11 Deferred Policy Acquisition Costs

The following table shows a roll-forward of DAC on long-duration contracts in the Allstate Health and Benefits segment, along with a reconciliation to the Company’s total DAC balance.

Deferred policy acquisition costs activity

1 unchanged sentence

life Interest-sensitive life Total

Three months ended March 31, 2024

Accident and health insurance

Six months ended June 30, 2024

Allstate Health and Benefits

Long-duration contracts

5 unchanged sentences

Short-duration contracts 32

Property and casualty 5,400

Allstate Protection

Protection Services

Ending balance $ 6,112

Three months ended March 31, 2023

Accident and health insurance

Six months ended June 30, 2023

Allstate Health and Benefits

Long-duration contracts

5 unchanged sentences

Short-duration contracts 27

Property and casualty 4,943

Allstate Protection

Protection Services

Ending balance $ 5,607

Note 12 Capital Structure

Repayment of debt On May 15, 2024, the Company repaid, at maturity, $ 350 million of 6.75 % Senior Notes.

Issuance of debt On June 24, 2024, the Company issued $ 500 million of 5.05 % Senior Notes due 2029.

Interest on the Senior Notes is payable semi-annually

in arrears on June 24 and December 24 of each year, beginning on December 24, 2024.

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 for general corporate purposes.

36 www.allstate.com

6 unchanged sentences

• Exit - contract termination penalties and real estate costs primarily related to accelerated amortization of right-of-use assets and related leasehold improvements at facilities to be vacated

The expenses related to these activities are included in the Condensed Consolidated Statements of Operations as restructuring and related charges and totaled $ 10 million and $ 27 million during the three months ended March 31, 2024 and 2023, respectively.

Restructuring expenses during 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.

The expenses related to these activities are included in the Condensed Consolidated Statements of Operations as restructuring and related charges and totaled $ 13 million and $ 27 million during the three months ended June 30, 2024 and 2023, respectively, and $ 23 million and $ 54 million during the six months ended June 30, 2024 and 2023, respectively.

Restructuring expenses during the second quarter and first six months of 2024 primarily relate to implementing actions to achieve a new phase of the organizational transformation component of the Transformative Growth plan, which commenced in the second quarter of 2024.

Organizational transformation includes streamlining the organization and outsourcing certain aspects of operations.

The Company continues to identify ways to improve operating efficiency and reduce cost which may result in additional restructuring charges in the future.

Organizational transformation

($ in millions)

Expected program charges $ 24

2024 expenses

Remaining program charges $ 4

These charges are primarily recorded in the Allstate Protection segment.

The Company expects these actions will be completed in the first half of 2025.

Restructuring activity during the period

4 unchanged sentences

Payments and non-cash charges ( 21 ) ( 9 ) ( 30 )

Restructuring liability as of March 31, 2024 $ 33 $ 1 $ 34

As of March 31, 2024, the cumulative amount incurred to date for active programs related to employee severance, relocation benefits and exit expenses totaled $ 105 million for employee costs and $ 79 million for exit costs.

Restructuring liability as of June 30, 2024 $ 33 $ 1 $ 34

As of June 30, 2024, the cumulative amount incurred to date for active programs related to employee severance, relocation benefits and exit expenses totaled $ 107 million for employee costs and $ 7 million for exit costs.

Note 14 Guarantees and Contingent Liabilities

5 unchanged sentences

In the normal course of business, the Company provides standard indemnifications to contractual counterparties in connection with numerous transactions, including acquisitions and divestitures.

The types of indemnifications typically provided include indemnifications for breaches of representations and warranties, taxes and certain other liabilities, such as third-party lawsuits.

The types of indemnifications typically provided include indemnifications for breaches of representations and warranties, taxes and certain

other liabilities, such as third-party lawsuits.

The indemnification clauses are often standard contractual terms and are entered into in the normal course of business based on an assessment that the risk of loss would be remote.

5 unchanged sentences

Management does not believe these indemnifications will have a material effect on results of operations, cash flows or financial position of the Company.

Related to the sale of ALIC and Allstate Assurance Company on November 1, 2021, AIC and Allstate Financial Insurance Holdings Corporation (collectively, the “Sellers”) agreed to indemnify Everlake US Holdings Company in connection with certain representations, warranties and covenants of the Sellers, and certain liabilities specifically excluded from the transaction, subject to specific contractual limitations regarding the Sellers’ maximum obligation.

Related to the sale of ALIC and Allstate Assurance Company on November 1, 2021, AIC and Allstate

Second Quarter 2024 Form 10-Q 37

Notes to Condensed Consolidated Financial Statements

Financial Insurance Holdings Corporation (collectively, the “Sellers”) agreed to indemnify Everlake US Holdings Company in connection with certain representations, warranties and covenants of the Sellers, and certain liabilities specifically excluded from the transaction, subject to specific contractual limitations regarding the Sellers’ maximum obligation.

Management does not believe these indemnifications will have a material effect on results of operations, cash flows or financial position of the Company.

The aggregate liability balance related to all guarantees was not material as of March 31, 2024.

The aggregate liability balance related to all guarantees was not material as of June 30, 2024.

Regulation and compliance

The Company is subject to extensive laws, regulations, administrative directives, and regulatory actions.

From time to time, regulatory authorities or

First Quarter 2024 Form 10-Q 35

Notes to Condensed Consolidated Financial Statements

legislative bodies seek to influence and restrict premium rates, require premium refunds to policyholders, require reinstatement of terminated policies, prescribe rules or guidelines on how affiliates compete in the marketplace, restrict the ability of insurers to cancel or non-renew policies, require insurers to continue to write new policies or limit their ability to write new policies, limit insurers’ ability to change coverage terms or to impose underwriting standards, impose additional regulations regarding agency and broker compensation, regulate the nature of and amount of investments, impose fines and penalties for unintended errors or mistakes, impose additional regulations regarding cybersecurity and privacy, and otherwise expand overall regulation of insurance products and the insurance industry.

From time to time, regulatory authorities or legislative bodies seek to influence and restrict premium rates, require premium refunds to policyholders, require reinstatement of terminated policies, prescribe rules or guidelines on how affiliates compete in the marketplace, restrict the ability of insurers to cancel or non-renew policies, require insurers to continue to write new policies or limit their ability to write new policies, limit insurers’ ability to change coverage terms or to impose underwriting standards, impose additional regulations regarding agency and broker compensation, regulate the nature of and amount of investments, impose fines and penalties for unintended errors or mistakes, impose additional regulations regarding cybersecurity and privacy, and otherwise expand overall regulation of insurance products and the insurance industry.

In addition, the Company is subject to laws and regulations administered and enforced by federal agencies, international agencies, and other organizations, including but not limited to the SEC, the Financial Industry Regulatory Authority, the U.S.

10 unchanged sentences

novel legal issues;

variations between jurisdictions in which matters are being litigated, heard, or investigated;

variations between jurisdictions in which matters are

being litigated, heard, or investigated;

changes in assigned judges;

19 unchanged sentences

The Company does not establish accruals for such matters when the Company does not believe both that it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated.

The Company’s assessment of whether a loss is reasonably possible or probable is based on its assessment of the ultimate outcome of the matter following all appeals.

The Company’s

38 www.allstate.com

Notes to Condensed Consolidated Financial Statements

assessment of whether a loss is reasonably possible or probable is based on its assessment of the ultimate outcome of the matter following all appeals.

The Company does not include potential recoveries in its estimates of reasonably possible or probable losses.

2 unchanged sentences

There may continue to be exposure to loss in excess of any amount accrued.

Disclosure of the nature and amount of an accrual is made when there have been sufficient legal and factual developments such that the

36 www.allstate.com

Notes to Condensed Consolidated Financial Statements

Company’s ability to resolve the matter would not be impaired by the disclosure of the amount of accrual.

Disclosure of the nature and amount of an accrual is made when there have been sufficient legal and factual developments such that the Company’s ability to resolve the matter would not be impaired by the disclosure of the amount of accrual.

When the Company assesses it is reasonably possible or probable that a loss has been incurred, it discloses the matter.

9 unchanged sentences

This disclosure is not an indication of expected loss, if any.

Under accounting guidance, an event is “reasonably possible” if “the chance of the future event or events occurring is more than remote but less than likely” and an event is “remote” if “the chance of the future event or events occurring is slight.” This estimate is based upon currently available information and is subject to significant judgment and a variety of assumptions and known and unknown uncertainties.

Under accounting guidance, an event is “reasonably possible” if “the chance of the future event or events occurring is more than remote

but less than likely” and an event is “remote” if “the chance of the future event or events occurring is slight.” This estimate is based upon currently available information and is subject to significant judgment and a variety of assumptions and known and unknown uncertainties.

The matters underlying the estimate will change from time to time, and actual results may vary significantly from the current estimate.

6 unchanged sentences

However, based on information currently known to it, management believes that the ultimate outcome of all matters described below, as they are resolved over time, is not likely to have a material effect on the financial position of the Company.

Claims related proceedings The Company is managing various disputes in Florida that raise challenges to the Company’s practices, processes, and procedures relating to claims for personal injury protection benefits under Florida auto policies.

Claims related proceedings The Company is defending various disputes in Florida that raise challenges to the Company’s practices, processes, and procedures relating to claims for personal injury protection benefits under Florida auto policies.

Medical providers continue to pursue litigation under various theories that challenge the amounts that the Company pays under the personal injury protection coverage, seeking additional benefit payments, as well as applicable interest, penalties and fees.

There is a pending lawsuit, Revival Chiropractic v.

In one such lawsuit, Revival Chiropractic v.

Allstate Insurance Company, et al.

filed January 2019;

appeal pending, Eleventh Circuit Court of Appeals), where the federal district court denied class certification and plaintiff’s request to file a renewed motion for class certification.

filed January 2019), the federal district court denied class certification and plaintiff’s request to file a renewed motion for class certification.

In Revival , on June 2, 2022, the Eleventh Circuit certified to the Florida Supreme Court Allstate’s appeal of the federal district court’s interpretation of the state personal injury protection statute.

The Eleventh Circuit is holding determination on plaintiff’s class certification appeal pending the outcome of the Florida Supreme Court certification.

The Eleventh Circuit held determination on plaintiff’s class certification appeal pending the outcome of the Florida Supreme Court certification.

The oral argument before the Florida Supreme Court was on March 8, 2023.

On April 25, 2024, the Florida Supreme Court issued a decision in the Company’s favor, finding that the Company’s practice with respect to its payment of certain medical provider charges is consistent with the Company’s policy language and with the state personal injury protection statute.

While this appeal has been pending, the Company has been managing litigation involving individual plaintiffs.

On May 24, 2024, the Eleventh Circuit entered an order dismissing plaintiff’s class certification appeal and directing the federal district court to enter summary judgment in favor of

Second Quarter 2024 Form 10-Q 39

Notes to Condensed Consolidated Financial Statements

On July 2, 2024, the federal district court entered judgment in Allstate’s favor.

The Company is defending putative class actions in various courts that raise challenges to the Company’s depreciation practices in homeowner property claims.

10 unchanged sentences

Allstate Vehicle and Property Insurance Company (D.

First Quarter 2024 Form 10-Q 37

Notes to Condensed Consolidated Financial Statements

April 2023) (the Shumway plaintiff was substituted with Hernandez).

filed April 2023).

No classes have been certified in any of these matters.

17 unchanged sentences

filed February 2024);

and Jarrett-Kelly v.

Direct General Insurance Agency, Inc .

(Circuit Court of Pulaski Co., Ark.

filed May 2024).

No classes have been certified in any of these matters.

5 unchanged sentences

filed April 2022).

The Company is defending putative class actions in Arizona federal court that are alleging underpayment of uninsured/underinsured motorist claims.

The Company is defending putative class actions in the U.S.

District Court for the District of Arizona that allege underpayment of uninsured/underinsured motorist claims.

The lawsuits are Dorazio v.

Allstate Fire and Casualty Insurance Company (D.

filed December 2022) and Loughran v.

MIC General Insurance Corporation (D.

filed December 2022).

The plaintiffs allege that uninsured/underinsured motorist coverages must be stacked where the defendants allegedly did not include specified policy language and did not provide specified notice to policyholders.

Allstate Fire and Casualty Insurance Company and Loughran v.

MIC General Insurance Corporation , each filed December 2022.

The plaintiffs allege that uninsured/underinsured motorist coverages must be stacked

where the defendants allegedly did not include specified policy language and did not provide specified notice to policyholders.

No classes have been certified in these matters.

2 unchanged sentences

The Franklin decision held, under the factual circumstances of that case, that stacking of uninsured/underinsured motorist coverages was required because the insurer did not include specified policy language and did not issue specified notice.

The Company is currently defending its insureds against plaintiffs’ bodily injury lawsuit stemming from a 2018 automobile accident, Equihua v.

Chausse and Nash (Superior Court of Los Angeles Co., Cal.

On August 18, 2021, a jury returned a verdict against the insureds.

The Company then moved to intervene in the lawsuit on September 9, 2021 and together with the insureds, sought to vacate the

judgment and to obtain a new trial.

On November 2, 2021, the trial court denied the post-trial motions to vacate the judgment and for a new trial and the Company’s motion to intervene.

The Company and the insureds subsequently filed an appeal with the California Court of Appeal, Second District, which affirmed judgment in favor of plaintiffs on November 6, 2023.

On December 18, 2023, the insureds filed a petition for review with the California Supreme Court.

On February 14, 2024, the California Supreme Court entered an order denying the petition for review.

The Company satisfied the judgment on March 19, 2024.

Other proceedings The Company has pending an investigatory hearing before the California Insurance Commissioner concerning the private passenger automobile insurance rating practices of Allstate Insurance Company and Allstate Indemnity Company in California.

Other proceedings The Company has an investigatory hearing before the California Insurance Commissioner concerning the private passenger automobile insurance rating practices of Allstate Insurance Company and Allstate Indemnity Company in California.

The investigatory hearing is captioned:

4 unchanged sentences

and (3) how such potentially illegal price optimization impacted Allstate’s private passenger auto insurance policyholders.

Fact discovery was completed in the investigatory hearing.

Allstate and the California Department of Insurance have reached an agreement in principle to resolve the investigatory hearing.

The May 22, 2023 hearing was continued.

A new hearing date has not been set.

In re The Allstate Corp.

Securities Litigation was a certified class action filed on November 11, 2016, in the United States District Court for the Northern District of Illinois against the Company and two of its officers asserting claims under the federal securities laws.

Plaintiffs alleged that they purchased Allstate common stock during the class period and suffered damages as the result of the conduct alleged.

Plaintiffs sought an unspecified amount of damages, costs, attorney’s fees, and other relief.

Plaintiffs alleged that the Company and certain senior officers made allegedly material misstatements or omissions concerning claim frequency statistics and the reasons for a claim frequency increase for Allstate brand auto insurance between October 2014 and August 3, 2015.

Plaintiffs further alleged that a senior officer engaged in stock option exercises during that time allegedly while in possession of material nonpublic information about Allstate brand auto insurance claim frequency.

The Company, its chairman, president and chief executive officer, and its former president were the named defendants.

After the court denied their motion to dismiss on February 27, 2018, defendants answered the complaint, denying plaintiffs’ allegations that there was any misstatement or omission or other misconduct.

On June 22, 2018, plaintiffs filed their motion for class certification.

On September 12, 2018, the lead plaintiffs amended the complaint to add the

38 www.allstate.com

Notes to Condensed Consolidated Financial Statements

City of Providence Employee Retirement System as a proposed class representative.

A class was certified on March 26, 2019, vacated by the U.S.

Court of Appeals for the Seventh Circuit on July 16, 2020 and remanded for further consideration by the district court.

On December 21, 2020, the district court again granted plaintiffs’ motion for class certification and certified a class consisting of all persons who purchased Allstate common stock between October 29, 2014 and August 3, 2015.

Defendants’ petition for permission to appeal this ruling was denied on January 28, 2021.

Following the close of discovery, defendants moved for summary judgment on March 23, 2022.

On July 26, 2022, the court entered its order granting summary judgment in part (as to plaintiffs’ claims relating to certain statements made in October 2014) and denying it as to the remainder of plaintiffs’ claims.

On June 28, 2023, the parties reached an agreement in principle to settle the action, without any admission of liability or wrongdoing.

The district court granted preliminary approval of the class settlement on September 26, 2023, and granted final approval of the class settlement on December 19, 2023.

The settlement became final after the expiration of the time for filing an appeal of the district court’s approval order.

No appeal of the district court’s approval order was filed, and the settlement is now final.

The Company is continuing to defend two putative class actions in California federal court, Holland Hewitt v.

Allstate Life Insurance Company (E.D.

filed May 2020) and Farley v.

Lincoln Benefit Life Company (E.D.

2020), following the sale of ALIC.

The Company is defending two putative class actions in the U.S.

District Court for the Eastern District of California, Holland Hewitt v.

Allstate Life Insurance Company filed May 2020, and Farley v.

Lincoln Benefit Life Company (“LBL”) filed December 2020, following the sale of ALIC.

On April 19, 2023, the district court certified a class in Farley.

9 unchanged sentences

The Company asserts various defenses to plaintiffs’ claims and to class certification.

The Company is defending a lawsuit in the U.S.

District Court for the Southern District of California, Chavez v.

Allstate Northbrook Indemnity Company , filed February 2022, where plaintiffs generally allege that

40 www.allstate.com

Notes to Condensed Consolidated Financial Statements

Allstate’s Shelter In Place Payback program provided insufficient premium relief in response to the reduction in driving in California during the state’s COVID-19 stay-at-home restrictions in 2020 and 2021.

Plaintiffs seek damages that include additional premium refunds and punitive damages.

On June 25, 2024, the court issued an order granting plaintiffs’ motion for class certification.

The Company continues to defend the litigation and oppose plaintiffs’ allegations.

On July 24, 2024, the Department of Justice filed a civil suit in the U.S.

District Court for the Western

District of Pennsylvania against National General Holdings Corp., National General Insurance Company, National General Lender Services, Inc., and Newport Management Corp.

The suit alleges that certain services that National General provided as a vendor to a large national bank for its collateral protection insurance program violated the Financial Institutions, Reform, Recovery, and Enforcement Act of 1989 (the “Act”), and it seeks civil monetary penalties available under the Act.

Note 15 Benefit Plans

For the second quarter and first six months of 2024, service cost includes a $ 38 million refund of premiums previously paid to the Pension Benefit Guaranty Corporation (“PBGC”).

The PBGC insures defined benefit plans offered by private-sector employers.

PBGC premiums are required to be paid annually and are calculated using a predefined calculation that includes interest rates to discount a plan’s vested benefits.

During the second quarter of 2024, the Company’s defined benefit pension plan elected to use an alternative methodology to calculate the prescribed interest rate in determining premiums for plan year 2023, which resulted in a refund of $ 38 million in previously paid premiums.

Components of net cost (benefit) for pension and other postretirement plans

Three months ended March 31,

Three months ended June 30, Six months ended June 30,

($ in millions) 2024 2023 2024 2023

3 unchanged sentences

Expected return on plan assets ( 76 ) ( 79 ) ( 153 ) ( 156 )

Amortization of prior service credit — —

Costs and expenses ( 25 ) 11 ( 11 ) 27

2 unchanged sentences

Remeasurement (gains) losses ( 8 ) ( 38 ) ( 8 ) ( 95 )

Pension net cost (benefit) $ 14 $ ( 41 )

Pension net benefit $ ( 33 ) $ ( 27 ) $ ( 19 ) $ ( 68 )

Postretirement benefits

6 unchanged sentences

Remeasurement (gains) losses ( 1 ) ( 2 ) ( 3 ) 2

Postretirement net cost $ — $ 1

Postretirement net cost (benefit) $ 1 $ ( 6 ) $ 1 $ ( 5 )

Pension and postretirement benefits

1 unchanged sentence

Remeasurement (gains) losses ( 9 ) ( 40 ) ( 11 ) ( 93 )

Total net cost (benefit) $ 14 $ ( 40 )

First Quarter 2024 Form 10-Q 39

Notes to Condensed Consolidated Financial Statements

Total net benefit $ ( 32 ) $ ( 33 ) $ ( 18 ) $ ( 73 )

Differences in actual experience and changes in other assumptions affect our pension and other postretirement obligations and expenses.

2 unchanged sentences

amortization of prior service credit are reported in property and casualty insurance claims and claims expense, operating costs and expenses, net investment income and (if applicable) restructuring and related charges on the Condensed Consolidated Statements of Operations.

Second Quarter 2024 Form 10-Q 41

Notes to Condensed Consolidated Financial Statements

Pension and postretirement benefits remeasurement gains and losses

Three months ended March 31,

Three months ended June 30, Six months ended June 30,

($ in millions) 2024 2023 2024 2023

4 unchanged sentences

Remeasurement (gains) losses $ ( 9 ) $ ( 40 ) $ ( 11 ) $ ( 93 )

Remeasurement gains for the first quarter of 2024 are primarily related to an increase in the liability discount rate, partially offset by unfavorable asset performance compared to expected return on plan assets.

Remeasurement gains for the second quarter of 2024 primarily related to an increase in the liability discount rate and changes in other assumptions, partially offset by unfavorable asset performance compared to expected return on plan assets.

Remeasurement gains in the first six months 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.

The weighted average discount rate used to measure the pension benefit obligation increased to

5.45 % at March 31, 2024 compared to 5.35 % at December 31, 2023, resulting in gains for the first quarter of 2024.

For the first quarter of 2024, the actual return on plan assets was lower than the expected return due to lower fixed income valuations from higher market yields, partially offset by strong public equity returns.

5.62 % at June 30, 2024 compared to 5.45 % at March 31, 2024 and 5.35 % at December 31, 2023 resulting in gains for the second quarter and first six months of 2024.

For the second quarter and first six months of 2024, the actual return on plan assets was lower than the expected return due to lower fixed income valuations from higher market yields, partially offset by higher public equity returns.

Note 16 Supplemental Cash Flow Information

Non-cash investing activities include $ 34 million and $ 36 million related to mergers and exchanges completed with equity securities, fixed income securities, bank loans, and limited partnerships for the three months ended March 31, 2024 and 2023, respectively.

Non-cash investing activities include $ 18 million related to right-of-use property and equipment obtained in exchange for lease obligations for the three months ended March 31, 2024.

Non-cash investing activities include $ 17 million related to right-of-use real estate obtained in exchange for lease obligations and $ 51 million related to debt assumed by purchaser on sale of real estate for the three months ended March 31, 2023.

Non-cash financing activities include $ 26 million and $ 35 million related to the issuance of Allstate common shares for vested equity awards for the three months ended March 31, 2024 and 2023, respectively.

Cash flows used in operating activities in the Condensed Consolidated Statements of Cash Flows include cash paid for operating leases related to amounts included in the measurement of lease liabilities of $ 30 million and $ 33 million for the three months ended March 31, 2024 and 2023, respectively.

Non-cash operating activities include $ 10 million and $ 4 million related to right-of-use assets obtained in exchange for lease obligations for the three months ended March 31, 2024 and 2023, respectively.

Non-cash investing activities include $ 58 million and $ 53 million related to mergers and exchanges completed with equity securities, fixed income securities, bank loans, and limited partnerships for the six months ended June 30, 2024 and 2023, respectively.

Non-cash investing activities include $ 18 million related to right-of-use property and equipment obtained in exchange for lease obligations for the six months ended June 30, 2024.

Non-cash investing activities include $ 15 million related to right-of-use real estate obtained in exchange for lease obligations and $ 51 million related to debt assumed by purchaser on sale of real estate for the six months ended June 30, 2023.

Non-cash financing activities include $ 27 million and $ 37 million related to the issuance of Allstate common shares for vested equity awards for the six months ended June 30, 2024 and 2023, respectively.

Cash flows used in operating activities in the Condensed Consolidated Statements of Cash Flows include cash paid for operating leases related to amounts included in the measurement of lease liabilities of $ 58 million and $ 66 million for the six months ended June 30, 2024 and 2023, respectively.

Non-cash operating activities include $ 22 million and $ 6 million related to right-of-use assets obtained in exchange for lease obligations for the six months ended June 30, 2024 and 2023, respectively.

Liabilities for collateral received in conjunction with the Company’s securities lending program and OTC and cleared derivatives are reported in other liabilities and accrued expenses or other investments.

The accompanying cash flows are included in cash flows from operating activities in the Condensed Consolidated Statements of Cash Flows along with the activities resulting from management of the proceeds, as follows:

($ in millions) Three months ended March 31,

($ in millions) Six months ended June 30,

Cash flows from operating activities

11 unchanged sentences

Components of other comprehensive income (loss) on a pre-tax and after-tax basis

($ in millions) Three months ended March 31,

($ in millions) Three months ended June 30,

Pre-tax Tax After-tax Pre-tax Tax After-tax

8 unchanged sentences

Other comprehensive (loss) income $ ( 183 ) $ 40 $ ( 143 ) $ ( 301 ) $ 60 $ ( 241 )

Six months ended June 30,

Pre-tax Tax After-tax Pre-tax Tax After-tax

Unrealized net holding gains and losses arising during the period, net of related offsets $ ( 635 ) $ 136 $ ( 499 ) $ 257 $ ( 60 ) $ 197

reclassification adjustment of realized capital gains and losses ( 209 ) 44 ( 165 ) ( 269 ) 56 ( 213 )

Unrealized net capital gains and losses ( 426 ) 92 ( 334 ) 526 ( 116 ) 410

Unrealized foreign currency translation adjustments ( 19 ) 4 ( 15 ) 99 ( 21 ) 78

Unamortized pension and other postretirement prior service credit (1)

( 2 ) 1 ( 1 ) ( 12 ) 3 ( 9 )

Discount rate for reserve for future policy benefits

31 ( 7 ) 24 ( 1 ) — ( 1 )

Other comprehensive (loss) income $ ( 416 ) $ 90 $ ( 326 ) $ 612 $ ( 134 ) $ 478

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

First Quarter 2024 Form 10-Q 41

Second Quarter 2024 Form 10-Q 43

Report of Independent Registered Public Accounting Firm

2 unchanged sentences

Results of Review of Interim Financial Information

We have reviewed the accompanying condensed consolidated statement of financial position of The Allstate Corporation and subsidiaries (the “Company”) as of March 31, 2024, the related condensed consolidated statements of operations, comprehensive income (loss), shareholders’ equity and cash flows for the three months ended March 31, 2024 and 2023, and the related notes (collectively referred to as the “interim financial information”).

We have reviewed the accompanying condensed consolidated statement of financial position of The Allstate Corporation and subsidiaries (the “Company”) as of June 30, 2024, the related condensed consolidated statements of operations, comprehensive income (loss), and shareholders’ equity for the three-month and six-month periods ended June 30, 2024 and 2023, and of cash flows for the six-month periods ended June 30, 2024 and 2023, and the related notes (collectively referred to as the “interim financial information”).

Based on our reviews, we are not aware of any material modifications that should be made to the accompanying interim financial information for it to be in conformity with accounting principles generally accepted in the United States of America.

12 unchanged sentences

Chicago, Illinois

July 31, 2024

44 www.allstate.com

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 1. Financial Statements