What changed in this filing

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Item 1. Financial Statements

2024-10-30 compared with 2024-07-31 · 386 added, 329 removed, 1451 unchanged (33% of the section changed)

3 unchanged sentences

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

June 30, Six months ended June 30,

September 30, Nine months ended September 30,

2024 2023 2024 2023

7 unchanged sentences

Property and casualty insurance claims and claims expense 10,409 10,237 30,711 32,290

Accident, health and other policy benefits 291 258 587 523

Accident, health and other policy benefits (including remeasurement (gains) losses of $ 1 , $ 0 , $ 1 and $ 0 )

317 262 904 785

Amortization of deferred policy acquisition costs 2,037 1,841 5,977 5,374

8 unchanged sentences

Net income (loss) 1,164 ( 4 ) 2,709 ( 1,700 )

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

Net (loss) income attributable to noncontrolling interest ( 26 ) 1 ( 30 ) ( 23 )

Net income (loss) attributable to Allstate 1,190 ( 5 ) 2,739 ( 1,677 )

7 unchanged sentences

See notes to condensed consolidated financial statements.

Second Quarter 2024 Form 10-Q 1

Third 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 June 30, Six months ended June 30,

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

2024 2023 2024 2023

Net income (loss) $ 1,164 $ ( 4 ) $ 2,709 $ ( 1,700 )

Other comprehensive (loss) income, after-tax

Other comprehensive income (loss), after-tax

Unrealized net capital gains and losses 1,299 ( 667 ) 965 ( 257 )

3 unchanged sentences

( 36 ) 30 ( 12 ) 29

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

Other comprehensive income (loss), after-tax 1,277 ( 656 ) 951 ( 178 )

Comprehensive income (loss) 2,441 ( 660 ) 3,660 ( 1,878 )

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

Comprehensive loss attributable to noncontrolling interest ( 19 ) ( 1 ) ( 22 ) ( 21 )

Comprehensive income (loss) attributable to Allstate $ 2,460 $ ( 659 ) $ 3,682 $ ( 1,857 )

4 unchanged sentences

Condensed Consolidated Statements of Financial Position (unaudited)

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

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

Fixed income securities, at fair value (amortized cost, net $ 53,447 and $ 49,649 )

14 unchanged sentences

Other assets, net 5,834 6,051

Assets held for sale 3,163 —

Total assets 113,743 103,362

4 unchanged sentences

Claim payments outstanding 1,727 1,353

Deferred income taxes 211 —

Other liabilities and accrued expenses 10,644 9,635

Debt 8,083 7,942

Liabilities held for sale 2,164 —

Total liabilities 92,905 85,732

11 unchanged sentences

Discount rate for reserve for future policy benefits

Total accumulated other comprehensive loss ( 1,026 ) ( 700 )

( 23 ) ( 11 )

Total accumulated other comprehensive income (loss) 251 ( 700 )

Total Allstate shareholders’ equity 20,877 17,770

3 unchanged sentences

See notes to condensed consolidated financial statements.

Second Quarter 2024 Form 10-Q 3

Third 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 June 30, Six months ended June 30,

($ in millions, except per share data) Three months ended September 30, Nine months ended September 30,

2024 2023 2024 2023

9 unchanged sentences

Equity incentive plans activity, net

33 6 73 ( 2 )

Balance, end of period 3,987 3,811 3,987 3,811

23 unchanged sentences

Change in unrealized net capital gains and losses 7 ( 2 ) 8 2

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

Noncontrolling (loss) income ( 26 ) 1 ( 30 ) ( 23 )

Capital transaction for noncontrolling interest

6 unchanged sentences

Condensed Consolidated Statements of Cash Flows (unaudited)

($ in millions) Six months ended June 30,

($ in millions) Nine months ended September 30,

Cash flows from operating activities

44 unchanged sentences

Shares reissued under equity incentive plans, net 149 17

Other ( 6 ) ( 4 )

Net cash used in financing activities ( 437 ) ( 985 )

Net decrease in cash ( 123 ) ( 37 )

Net increase in cash 208 124

Cash at beginning of period 722 736

Cash classified as assets held for sale at end of period

Cash at end of period $ 816 $ 860

See notes to condensed consolidated financial statements.

Second Quarter 2024 Form 10-Q 5

Third 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 June 30, 2024 and for the three and six month periods ended June 30, 2024 and 2023 are unaudited.

The condensed consolidated financial statements and notes as of September 30, 2024 and for the three and nine month periods ended September 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.

Held for sale classification

A business is classified as held for sale when management having the authority to approve the action commits to a plan to sell the business, the sale is probable to occur during the next 12 months at a price that is reasonable in relation to its current fair value and certain other criteria are met.

A business classified as held for sale is recorded at the lower of its carrying amount or estimated fair value less cost to sell.

When the proceeds expected to be received from the sale exceed the carrying amount of the business, a gain is recognized when the sale closes.

Assets and liabilities related to a business classified as held for sale are segregated in the condensed consolidated statement of position in the period in which the business is classified as held for sale.

Additional details are included in Note 3.

Pending accounting standards

4 unchanged sentences

The guidance is effective for annual periods beginning after December 15, 2023 and interim periods beginning after December 15, 2024 and is to be applied retrospectively, with early adoption permitted.

The Company is currently evaluating the impact of adopting the guidance to its disclosures.

The guidance affects disclosures only.

Income tax disclosures In December 2023, the FASB issued guidance enhancing various aspects of income tax disclosures.

3 unchanged sentences

All requirements in the guidance are annual in nature, and the guidance is effective for annual reporting periods beginning after December 15, 2024, with early adoption permitted.

The guidance only affects disclosures and will have no impact on the Company’s consolidated financial statements.

The Company is currently evaluating the impact of adopting the guidance to its disclosures.

The guidance affects disclosures only.

Climate disclosures In March 2024, the Securities and Exchange Commission (“SEC”) adopted a final rule requiring registrants to disclose certain climate-related information in their registration statements and annual reports.

The rule requires the disclosure of qualitative and quantitative information, with certain information, such as financial statement effects of severe weather events, included in the notes to the audited financial statements.

Other disclosure requirements include material climate-related risks, processes to manage and govern those risks, disclosure of targets if the targets materially affect or are reasonably likely to materially affect the Company, and, if material, disclosure of certain greenhouse gas emissions.

Other disclosure requirements include material climate-related risks, processes to manage and govern those risks, disclosure of targets if the targets materially affect or are reasonably likely to

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Notes to Condensed Consolidated Financial Statements

materially affect the Company, and, if material, disclosure of certain greenhouse gas emissions.

On April 4, 2024, the SEC issued a voluntary stay of the final rule, pending the outcome of pending litigation.

The requirements will be applied prospectively and have phased-in effective dates.

For the Company, the Form 10-K for the year ended December 31, 2025, will be the first annual report with new climate-related disclosures.

For the Company, the

Form 10-K for the year ended December 31, 2025, will be the first annual report with new climate-related disclosures.

The Company is currently evaluating the impact of adopting the final rule.

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Notes to Condensed Consolidated Financial Statements

Note 2 Earnings per Common Share

5 unchanged sentences

Computation of basic and diluted earnings per common share

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

(In millions, except per share data) Three months ended September 30, Nine months ended September 30,

2024 2023 2024 2023

Net income (loss) $ 1,164 $ ( 4 ) $ 2,709 $ ( 1,700 )

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

Net (loss) income attributable to noncontrolling interest ( 26 ) 1 ( 30 ) ( 23 )

Net income (loss) attributable to Allstate 1,190 ( 5 ) 2,739 ( 1,677 )

14 unchanged sentences

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 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.

(1) As a result of the net loss reported for the three and nine month periods ended September 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 Disposition

On August 13, 2024, the Company entered into a share purchase agreement (the “Purchase Agreement”) with StanCorp Financial Group, Inc.

to sell American Heritage Life Insurance Company and American Heritage Service Company, comprising the Company’s employer voluntary benefits business for approximately $ 2.0 billion in cash.

The employer voluntary benefits business is reported in the Allstate Health and Benefits segment, and as of September 30, 2024, the assets and liabilities of the business are classified as held for sale.

The transaction price less costs to sell exceeds the carrying value of the net assets related to this transaction, resulting in an

estimated gain that will be recognized at closing of the transaction.

The anticipated gain on the sale will be impacted by purchase price adjustments associated with certain pre-close transactions, changes in the carrying value of net assets, changes in accumulated other comprehensive income and the related tax effects.

The amount of goodwill included in the carrying value is based on the relative fair value of the employer voluntary benefits business to the fair value of the Allstate Health and Benefits segment and is reported in other assets in the table below.

Third Quarter 2024 Form 10-Q 7

Notes to Condensed Consolidated Financial Statements

The transaction is expected to close in the first half of 2025, subject to regulatory approvals and other customary closing conditions.

The Company continues to pursue the sale of the group health and individual health businesses.

The employer voluntary benefits business generated $ 248 million and $ 742 million of premiums and contract charges for the three and nine months ended September 30, 2024, respectively, and adjusted net income of $ 19 million and $ 64 million for the three and nine months ended September 30, 2024, respectively.

Major classes of assets and liabilities classified as held for sale

($ in millions) September 30, 2024

Fixed income securities, at fair value (amortized cost, net $ 1,691 )

Equity securities, at fair value (cost $ 1 )

Short-term, at fair value (amortized cost $ 76 )

Other investments, net

Total investments 1,839

Deferred policy acquisitions costs 516

Reinsurance recoverables, net 117

Other assets 577

Total assets held for sale $ 3,163

Reserve for future policy benefits $ 1,141

Contractholder funds 891

Other liabilities and accrued expenses 132

Total liabilities held for sale $ 2,164

Included in shareholders' equity is $ 65 million of accumulated other comprehensive loss related to assets and liabilities held for sale.

Note 4 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 deferred policy

acquisition costs (“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, 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

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.

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Notes to Condensed Consolidated Financial Statements

Reportable segments financial performance

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

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

($ in millions) 2024 2023 2024 2023

18 unchanged sentences

Non-recurring costs (2)

— ( 90 ) — ( 90 )

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

1 unchanged sentence

Total reconciling items 656 389 1,376 1,737

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

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

( 25 ) 2 ( 29 ) ( 22 )

Net income (loss) applicable to common shareholders $ 1,161 $ ( 41 ) $ 2,651 $ ( 1,776 )

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

(1) Excludes amortization of purchased intangibles in Allstate Protection, 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.

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

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

Third Quarter 2024 Form 10-Q 9

Notes to Condensed Consolidated Financial Statements

Reportable segments revenue information

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

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

2024 2023 2024 2023

19 unchanged sentences

Intersegment premiums and service fees (1)

49 34 123 102

Other revenue 110 75 293 243

20 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.

Second Quarter 2024 Form 10-Q 9

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Notes to Condensed Consolidated Financial Statements

1 unchanged sentence

Portfolio composition

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

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

Fixed income securities, at fair value $ 53,961 $ 48,865

7 unchanged sentences

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

June 30, 2024

September 30, 2024

government and agencies $ 9,125 $ 162 $ ( 41 ) $ 9,246

12 unchanged sentences

Scheduled maturities for fixed income securities

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

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

Amortized cost, net Fair

10 unchanged sentences

Net investment income

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

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

2024 2023 2024 2023

9 unchanged sentences

$ 783 $ 689 $ 2,259 $ 1,874

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Third Quarter 2024 Form 10-Q 11

Notes to Condensed Consolidated Financial Statements

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

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

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

2024 2023 2024 2023

11 unchanged sentences

($ in millions)

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

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

2024 2023 2024 2023

2 unchanged sentences

Valuation change of equity investments (1)

119 ( 34 ) 207 187

Valuation change and settlements of derivatives 20 31 ( 3 ) ( 28 )

2 unchanged sentences

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

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

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

2024 2023 2024 2023

2 unchanged sentences

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

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

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

2024 2023 2024 2023

2 unchanged sentences

Total $ 125 $ ( 13 ) $ 235 $ 98

Second Quarter 2024 Form 10-Q 11

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Notes to Condensed Consolidated Financial Statements

Credit losses recognized in net income

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

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

2024 2023 2024 2023

Fixed income securities:

Municipal $ ( 2 ) $ — $ ( 2 ) $ —

Corporate ( 1 ) ( 7 ) ( 2 ) ( 23 )

12 unchanged sentences

gains (losses)

June 30, 2024 Gains Losses

September 30, 2024 Gains Losses

Fixed income securities $ 53,961 $ 1,143 $ ( 629 ) $ 514

2 unchanged sentences

Limited partnership interests

Investments classified as held for sale ( 50 )

Unrealized net capital gains and losses, pre-tax 461

14 unchanged sentences

Change in unrealized net capital gains (losses)

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

($ in millions) Nine months ended September 30, 2024

Fixed income securities $ 1,298

2 unchanged sentences

Limited partnership interests 4

Total ( 425 )

Investments classified as held for sale

Reclassification of noncontrolling interest ( 8 )

1 unchanged sentence

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

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Third Quarter 2024 Form 10-Q 13

Notes to Condensed Consolidated Financial Statements

Carrying value for limited partnership interests

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

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

Private equity $ 7,531 $ 7,154

2 unchanged sentences

(1) Other consists of certain limited partnership interests where the underlying assets are predominately public equity and debt securities.

Short-term investments Short-term investments, including money market funds, commercial paper, U.S.

Short-term investments, including money market funds, commercial paper, U.S.

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

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.

As of September 30, 2024 and December 31, 2023, the fair value of short-term investments totaled $ 6.99 billion and $ 5.14 billion, respectively.

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

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

Real estate is carried at cost less accumulated depreciation.

Policy loans are carried at unpaid principal balances.

Other investments by asset type

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

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

Bank loans, net $ 187 $ 224

11 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.

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.

4 unchanged sentences

If the Company determines that the fixed income security does not have sufficient cash flow or other information to estimate a recovery value for the security, the Company may conclude that the entire decline in fair value is deemed to be credit related and the loss is recorded in earnings.

When a security is sold or otherwise disposed or when the security is deemed uncollectible and written off, the Company removes amounts previously recognized in the credit loss allowance.

When a security is sold or otherwise disposed or when the security is deemed uncollectible and written off, the Company reverses amounts previously recognized in the credit loss allowance.

Recoveries after write-offs are recognized when received.

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

Second Quarter 2024 Form 10-Q 13

Accrued interest excluded from the amortized cost of fixed income securities totaled $ 560 million and $ 495 million as of September 30, 2024 and December 31, 2023, respectively, and is reported within the accrued

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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.

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.

4 unchanged sentences

Rollforward of credit loss allowance for fixed income securities

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

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

($ in millions) 2024 2023 2024 2023

3 unchanged sentences

(Increase) decrease of allowance related to sales and other

— ( 1 ) 3 ( 1 )

Write-offs — — 18 —

Ending balance $ ( 22 ) $ ( 37 ) $ ( 22 ) $ ( 37 )

Components of credit loss allowance as of June 30

Components of credit loss allowance as of September 30

Municipal bonds

Corporate bonds ( 18 ) ( 34 )

1 unchanged sentence

Total $ ( 22 ) $ ( 37 )

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Third Quarter 2024 Form 10-Q 15

Notes to Condensed Consolidated Financial Statements

1 unchanged sentence

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

June 30, 2024

September 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 $ 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

(1) Includes fixed income securities with fair values of $ 19 million and $ 32 million and unrealized losses of $ 7 million and $ 3 million with credit loss allowances of $ 3 million and $ 8 million as of September 30, 2024 and December 31, 2023, respectively.

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

($ in millions) Investment

14 unchanged sentences

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

Second Quarter 2024 Form 10-Q 15

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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.

As of September 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.

13 unchanged sentences

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

Accrued interest as of September 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.

6 unchanged sentences

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

June 30, 2024 December 31, 2023

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

September 30, 2024 December 31, 2023

($ in millions) 2019 and prior 2020 2021 2022 2023 2024 Total Total

Below 1.0 $ — $ — $ — $ — $ — $ — $ — $ 13

5 unchanged sentences

Amortized cost, net $ 765 $ 822

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Third Quarter 2024 Form 10-Q 17

Notes to Condensed Consolidated Financial Statements

1 unchanged sentence

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 June 30, 2024 and December 31, 2023.

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

Rollforward of credit loss allowance for mortgage loans

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

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

($ in millions) 2024 2023 2024 2023

Beginning balance $ ( 10 ) $ ( 10 ) $ ( 11 ) $ ( 7 )

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

Net increases related to credit losses ( 1 ) ( 1 ) — ( 4 )

Write-offs — — — —

6 unchanged sentences

Bank loans amortized cost by credit rating and year of origination

June 30, 2024 December 31, 2023

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

September 30, 2024 December 31, 2023

($ in millions) 2019 and prior 2020 2021 2022 2023 2024 Total Total

$ — $ — $ — $ — $ — $ 10 $ 10 $ —

NAIC 2 / BBB — — — — — 37 37 9

6 unchanged sentences

Rollforward of credit loss allowance for bank loans

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

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

2024 2023 2024 2023

12 unchanged sentences

Assets and liabilities whose values are based on the following:

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

Second Quarter 2024 Form 10-Q 17

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Notes to Condensed Consolidated Financial Statements

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

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

15 unchanged sentences

In addition, the Company may validate the reasonableness of fair values by comparing information obtained from valuation service providers or brokers to other third-party valuation sources for selected securities.

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.

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 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.

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

13 unchanged sentences

The primary inputs to the valuation include quoted prices for identical or similar assets in markets that are not active, contractual cash flows, benchmark yields and credit spreads.

Corporate - privately placed:

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

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Third Quarter 2024 Form 10-Q 19

Notes to Condensed Consolidated Financial Statements

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

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.

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.

2 unchanged sentences

Certain ABS are valued based on non-binding broker quotes whose inputs have been corroborated to be market observable.

Residential mortgage-backed securities, included in ABS, use prepayment speeds as a primary input for valuation.

Residential mortgage-backed securities, included in ABS, also use prepayment speeds as a primary input for valuation.

• Equity securities:

6 unchanged sentences

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

• Assets held for sale:

Comprise U.S.

government and agencies, municipal, corporate and MBS fixed income securities.

The significant inputs and valuation techniques are based on the respective asset type as described above.

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.

Corporate - public and privately placed and ABS:

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:

Primarily valued based on non-binding broker quotes where the inputs have not been corroborated to be market observable.

Other inputs for corporate fixed income securities include an interest rate yield curve, as well as published credit spreads for similar assets that incorporate the credit quality and industry sector of the issuer.

Other inputs for corporate fixed income securities include expected cash flows, an interest rate yield curve, as well as published credit spreads for similar assets that incorporate the credit quality and industry sector of the issuer.

The primary inputs to the valuation include expected cash flows, benchmark yields, collateral performance and credit spreads.

Residential mortgage-backed securities, included in ABS, also use prepayment speeds as a primary input for valuation.

• Equity securities:

10 unchanged sentences

This derivative is categorized as Level 3 due to the significance of non-market observable inputs.

• Assets held for sale:

Comprise corporate fixed income securities.

The significant inputs and valuation techniques are based on the respective asset type as described above.

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Notes to Condensed Consolidated Financial Statements

Assets measured at fair value on a non-recurring basis

2 unchanged sentences

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.

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.

These investments are generally not redeemable by the investees and generally cannot be sold without approval of the general partner.

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 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

As of September 30, 2024, the Company has commitments to invest $ 161 million in these limited partnership interests.

Assets and liabilities measured at fair value

June 30, 2024

September 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

12 unchanged sentences

Other assets 2 — 123 125

Assets held for sale

177 1,534 7 — 1,718

Total recurring basis assets 13,484 50,535 723 ( 1 ) 64,741

9 unchanged sentences

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

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Third Quarter 2024 Form 10-Q 21

Notes to Condensed Consolidated Financial Statements

26 unchanged sentences

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

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.

As of September 30, 2024 and December 31, 2023, Level 3 fair value measurements of fixed income securities total $ 181 million and $ 153 million, respectively, and include $ 28 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 $ 5 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.

Second Quarter 2024 Form 10-Q 21

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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, 2024

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

Balance as of

March 31, 2024 Total gains (losses)

Transfers Balance as of

June 30, 2024

June 30, 2024 Total gains (losses)

Transfers Transfers (to) from held for sale

Balance as of

September 30, 2024

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

9 unchanged sentences

Other assets 121 2 — — — — — — — — 123

Assets held for sale

— — — — — 7 — — — — 7

Total recurring Level 3 assets $ 675 $ 12 $ — $ — $ — $ — $ 39 $ ( 2 ) $ — $ ( 1 ) $ 723

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

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

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

Transfers Balance as of June 30, 2024

Transfers Transfers (to) from held for sale

Balance as of September 30, 2024

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

9 unchanged sentences

Other assets 118 5 — — — — — — — — 123

Assets held for sale — — — — — 7 — — — — 7

Total recurring Level 3 assets $ 676 $ 16 $ 1 $ — $ — $ — $ 94 $ ( 59 ) $ — $ ( 5 ) $ 723

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Third Quarter 2024 Form 10-Q 23

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

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

Balance as of

March 31, 2023 Total gains (losses)

June 30, 2023 Total gains (losses)

Transfers Balance as of

June 30, 2023

September 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 $ 625 $ 24 $ ( 2 ) $ — $ — $ 14 $ ( 14 ) $ — $ — $ 647

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

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

Balance as of

December 31, 2022 Total gains (losses)

Transfers Balance as of June 30, 2023

Transfers Balance as of September 30, 2023

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

11 unchanged sentences

Total Level 3 gains (losses) included in net income

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

Three months ended September 30, Nine months ended September 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 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

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

There were no transfers into Level 3 during the three months ended September 30, 2023.

Transfers into Level 3 during the nine months ended September 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 nine months ended September 30, 2024 and 2023.

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Notes to Condensed Consolidated Financial Statements

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,

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

($ in millions) 2024 2023 2024 2023

Fixed income securities:

Municipal $ ( 2 ) $ — $ ( 2 ) $ —

Corporate - public — — 1 —

15 unchanged sentences

Financial instruments not carried at fair value

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

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

Financial assets Fair value level Amortized cost, net Fair

4 unchanged sentences

value Carrying value (2)

Contractholder funds on investment contracts Level 3 $ 42 $ 42 $ 46 $ 46

Contractholder funds on investment contracts (1)

Level 3 $ — $ — $ 46 $ 46

Debt Level 2 8,083 8,027 7,942 7,655

Liability for collateral Level 2 2,021 2,021 1,891 1,891

Liabilities held for sale

Level 3 41 41 — —

(1) As of September 30, 2024, all contractholder funds on investment contracts are held for sale.

(2) Represents the amounts reported on the Condensed Consolidated Statements of Financial Position.

3 unchanged sentences

Asset replication refers to the “synthetic” creation of assets through the use of derivatives.

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.

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.

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

1 unchanged sentence

Fixed income index total return swaps are used to offset valuation losses in the fixed income portfolio during periods of declining market values.

Credit default swaps are typically used to mitigate the credit risk within the Property-Liability fixed income portfolio.

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.

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Credit default swaps are typically used to mitigate the credit risk within the Property-Liability

Third Quarter 2024 Form 10-Q 25

Notes to Condensed Consolidated Financial Statements

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

fixed income portfolio.

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.

Equity derivatives may also be utilized to replicate cash market positions to increase equity exposure.

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

4 unchanged sentences

The carrying value amounts for OTC derivatives are further adjusted for the effects, if any, of enforceable master netting agreements and are presented on a net basis, by counterparty agreement, in the Condensed Consolidated Statements of Financial Position.

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.

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.

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.

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.

Second Quarter 2024 Form 10-Q 25

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Notes to Condensed Consolidated Financial Statements

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

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

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

5 unchanged sentences

Equity and index contracts

Options Other investments n/a 28 — — —

Futures Other assets n/a 1,045 1 1 —

Foreign currency contracts

Foreign currency forwards Other investments $ 383 n/a ( 8 ) 1 ( 9 )

Contingent consideration Other assets 250 n/a 123 123 —

Credit default contracts

Credit default swaps – buying protection Other investments 30 n/a — — —

Total asset derivatives $ 663 4,565 $ 117 $ 126 $ ( 9 )

4 unchanged sentences

Equity and index contracts

Options Other liabilities & accrued expenses n/a 17 — — —

Futures Other liabilities & accrued expenses n/a 284 — — —

1 unchanged sentence

Foreign currency forwards Other liabilities & accrued expenses $ 262 n/a ( 7 ) — ( 7 )

Credit default contracts

Credit default swaps – buying protection Other liabilities & accrued expenses 30 n/a — — —

Total liability derivatives 262 22,390 ( 16 ) $ — $ ( 16 )

3 unchanged sentences

(n/a = not applicable)

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Third Quarter 2024 Form 10-Q 27

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

June 30, 2024

September 30, 2024

Asset derivatives $ 1 $ ( 9 ) $ 8 $ — $ — $ —

4 unchanged sentences

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

Second Quarter 2024 Form 10-Q 27

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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 June 30, 2024

Three months ended September 30, 2024

Interest rate contracts $ 42 $ — $ 42

2 unchanged sentences

Foreign currency contracts ( 23 ) — ( 23 )

Credit default contracts 3 — 3

Total $ 20 $ 12 $ 32

Six months ended June 30, 2024

Nine months ended September 30, 2024

Interest rate contracts $ 21 $ — $ 21

4 unchanged sentences

Total $ ( 3 ) $ 29 $ 26

Three months ended June 30, 2023

Three months ended September 30, 2023

Interest rate contracts $ 5 $ — $ 5

4 unchanged sentences

Total $ 31 $ ( 1 ) $ 30

Six months ended June 30, 2023

Nine months ended September 30, 2023

Interest rate contracts $ ( 12 ) $ — $ ( 12 )

7 unchanged sentences

OTC cash and securities collateral pledged

($ in millions) June 30, 2024

($ in millions) September 30, 2024

Pledged by the Company $ 15

Pledged to the Company (1)

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

(1) $ 14 million of 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.

2 unchanged sentences

This exposure is measured by the fair value of OTC derivative contracts with a positive fair value at the reporting date reduced by the effect, if any, of legally enforceable master netting agreements.

OTC derivatives counterparty credit exposure by counterparty credit rating

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

parties Notional

Exposure, net of collateral (2)

parties Notional

Exposure, net of collateral (2)

A+ 3 $ 458 $ 5 $ — — $ — $ — $ —

Total 3 $ 458 $ 5 $ — — $ — $ — $ —

(1) Allstate uses the lower of S&P’s or Moody’s long-term debt issuer ratings.

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

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Notes to Condensed Consolidated Financial Statements

As of September 30, 2024 and December 31, 2023, the Company did not have any counterparty credit exposure.

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) June 30, 2024

($ in millions) September 30, 2024

Pledged by the Company $ 82

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,

Third Quarter 2024 Form 10-Q 29

Notes to Condensed Consolidated Financial Statements

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.

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

Credit-risk-contingent termination events allow the counterparties to terminate the derivative agreement or a specific trade on certain dates if AIC’s financial strength credit ratings by Moody’s or S&P fall below a certain level.

Credit-risk-contingent termination events allow the counterparties to terminate the derivative agreement or a specific trade on certain dates if AIC’s financial strength credit

ratings by Moody’s or S&P fall below a certain level.

Credit-risk-contingent cross-default provisions allow the counterparties to terminate the derivative agreement if the Company defaults by pre-determined threshold amounts on certain debt instruments.

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) June 30, 2024 December 31, 2023

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

Gross liability fair value of contracts containing credit-risk-contingent features $ 16 $ 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 $ 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 Company received a management fee for the services provided to the Reciprocal Exchanges totaling $ 2 million and $ 23 million for the three and nine months ended September 30, 2024, respectively, compared to $ 14 million and $ 37 million for the three and nine months ended September 30, 2023, respectively.

In addition, as of September 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 absorb expected losses.

Due to ongoing operating losses, 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.

Adirondack and Skylands are withdrawing from writing substantially all business.

As the reciprocal insurers are dissolved, policyholders will share any residual unassigned surplus but are not subject to

assessment for any deficit in unassigned surplus of the Reciprocal Exchanges.

The assets of the Reciprocal Exchanges can be used only to settle the obligations of the Reciprocal Exchanges and general creditors have no recourse to the Company.

The New York State Department of Financial Services has approved the withdrawal plan for Adirondack to non-renew or cancel all policies effective as of December 31, 2024.

National General Holdings Corp.

entered into a $ 15 million line of credit agreement with Adirondack to pay claims if it is unable to pay, which will expire after a final reserve study is conducted to determine if additional funding is needed as of December 31, 2027.

As of September 30, 2024, there is no outstanding balance on the line of credit.

Additionally, the Company waived all fees payable by Adirondack after July 1, 2024, excluding Loss Adjustment Expenses associated with individual claims.

The New Jersey Department of Banking and Insurance has acknowledged the withdrawal plan filed on behalf of Skylands to withdraw from providing personal lines insurance, except dwelling fire and watercraft policies, beginning December 14, 2024.

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

Claims and claims expense ceded to the Company were $( 6 ) million and $ 24 million for the three and nine months ended September 30, 2024, respectively, compared to $ 10 million and $ 27 million for the three and nine months ended September 30, 2023, respectively.

The Reciprocal Exchanges generated $ 48 million and $ 170 million of earned premiums for the three and nine months ended September 30, 2024, respectively, compared to $ 59 million and $ 173 million for the three and nine months ended September 30, 2023,

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Notes to Condensed Consolidated Financial Statements

respectively.

Total costs and expenses were $ 62 million and $ 207 million for the three and nine months ended September 30, 2024, respectively, compared to $ 58 million and $ 202 million for the three and nine months ended September 30, 2023, respectively.

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.

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

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

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

Fixed income securities $ 121 $ 267

18 unchanged sentences

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.

The Company continues to digitize and modernize claim processes where necessary 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.

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

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.

4 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

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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.

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.

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

Third Quarter 2024 Form 10-Q 31

Notes to Condensed Consolidated Financial Statements

The highest degree of uncertainty is associated with reserves for losses incurred in the initial reporting period as it contains the greatest proportion of losses that have not been reported or settled as well as heightened uncertainty for claims that involve litigation or take longer to settle during periods of rapidly increasing loss costs.

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.

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

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

unsettled claims.

Changes in reserve estimates, which may be material, are reported in property and casualty insurance claims and claims expense in the Condensed Consolidated Statements of Operations in the period such changes are determined.

1 unchanged sentence

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

Six months ended June 30,

Nine months ended September 30,

($ in millions) 2024 2023

10 unchanged sentences

Total paid ( 28,158 ) ( 28,650 )

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

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

Net balance as of September 30 34,015 32,005

Balance as of September 30 $ 42,743 $ 40,659

(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 $ 2.85 billion and $ 4.39 billion in the six months ended June 30, 2024 and 2023, respectively, net of recoverables.

This expense included losses from catastrophes of $ 4.55 billion and $ 5.57 billion in the nine months ended September 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

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Notes to Condensed Consolidated Financial Statements

4 unchanged sentences

2023 2024 2023

Three months ended June 30,

Three months ended September 30,

Auto $ ( 55 ) $ 27 $ ( 10 ) $ 6 $ ( 65 ) $ 33

4 unchanged sentences

Run-off Property-Liability

59 82 — — 59 82

Protection Services 1 — — — 1 —

Total prior year reserve reestimates $ 46 $ 166 $ ( 14 ) $ 17 $ 32 $ 183

Six months ended June 30,

Nine months ended September 30,

Auto $ ( 293 ) $ 146 $ ( 26 ) $ ( 41 ) $ ( 319 ) $ 105

4 unchanged sentences

Run-off Property-Liability

65 85 — — 65 85

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

2 unchanged sentences

(1) Favorable reserve reestimates are shown in parentheses.

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Third Quarter 2024 Form 10-Q 33

Notes to Condensed Consolidated Financial Statements

1 unchanged sentence

Rollforward of reserve for future policy benefits (1)

Six months ended June 30,

Nine months ended September 30,

health Traditional

11 unchanged sentences

Effect of changes in discount rate assumptions 6 ( 113 ) ( 1 ) ( 19 ) 5 ( 132 )

Reclassified to liabilities held for sale ( 1,270 ) — ( 345 ) — ( 1,615 ) —

Ending balance 685 1,586 6 289 691 1,875

10 unchanged sentences

Effect of changes in discount rate assumptions 27 ( 126 ) 8 ( 38 ) 35 ( 164 )

Reclassified to liabilities held for sale ( 1,998 ) — ( 704 ) — ( 2,702 ) —

Ending balance $ 731 $ 2,333 $ 14 $ 585 $ 745 $ 2,918

2 unchanged sentences

reinsurance recoverables (2)

— 82 — 2 — 84

Net reserve for future policy benefits, after reinsurance recoverables

$ 46 $ 665 $ 8 $ 294 $ 54 $ 959

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

(1) Excludes $ 220 million and $ 266 million of reserves related to short-duration and other contracts as of September 30, 2024 and 2023, respectively.

(2) Classified as held for sale as of September 30, 2024.

Revenue and interest recognized in the condensed consolidated statements of operations

($ in millions) Six months ended June 30,

($ in millions) Nine months ended September 30,

Accident and health $ 605 $ 600

8 unchanged sentences

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

Second Quarter 2024 Form 10-Q 33

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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 June 30,

As of September 30,

($ in millions) Undiscounted Discounted Undiscounted Discounted

5 unchanged sentences

Expected future benefits and expenses 1,345 718 1,153 585

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

As of June 30,

The following table provides the weighted-average duration and weighted-average interest rates for the reserve for future policy benefits, including those that are classified as held for sale as of September 30, 2024.

As of September 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 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.

The Company performed the annual review of the mortality, morbidity and lapse experience assumptions in the third quarter of 2024 and 2023 resulting in an increase of $ 1 million and an increase of less than $ 1 million, respectively, to the reserve for future policy benefits.

For the nine months ended September 30, 2024, actual experience for morbidity in accident and health products was higher than expected.

For the nine months ended September 30, 2023, actual experience for morbidity in accident and health products was lower than expected.

For the nine months ended September 30, 2024, actual experience for lapses in accident and health products was lower than expected.

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

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

Third Quarter 2024 Form 10-Q 35

Notes to Condensed Consolidated Financial Statements

Contractholder funds

As of September 30, 2024, all contractholder funds are classified as held for sale.

Contractholder funds activity

Six months ended June 30,

Nine months ended September 30,

($ in millions) 2024 2023

16 unchanged sentences

(1) Guaranteed benefit amounts in excess of the current account balances.

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Notes to Condensed Consolidated Financial Statements

Account values:

comparison of current crediting rate to guaranteed minimum crediting rate (1)

($ in millions)

Range of guaranteed minimum crediting rates

At guaranteed minimum 1 - 50 basis points above

June 30, 2024

Less than 3.00 %

3.00 % - 3.49 %

3.50 % - 3.99 %

4.00 % - 4.49 %

4.50 % - 4.99 %

5.00 % or greater

Non-account balances (2)

Total $ 773 $ 37 $ 891

June 30, 2023

Less than 3.00 %

3.00 % - 3.49 %

3.50 % - 3.99 %

4.00 % - 4.49 %

4.50 % - 4.99 %

5.00 % or greater

Non-account balances (2)

Total $ 778 $ 23 $ 881

(1) Difference, in basis points, between rates being credited to contractholders and the respective guaranteed minimum crediting rates.

(2) Non-account balances include unearned revenue and amounts related to policies where a claim is either in the course of settlement or incurred but not reported.

A claim on a life insurance policy results in the accrual of interest at a rate and over a period of time that is specified by state insurance regulations.

Note 11 Reinsurance and Indemnification

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 June 30, Six months ended June 30,

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

2024 2023 2024 2023

2 unchanged sentences

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 June 30, Six months ended June 30,

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

2024 2023 2024 2023

Property and casualty insurance claims and claims expense $ ( 662 ) $ ( 274 ) $ ( 1,178 ) $ ( 534 )

$ ( 284 ) $ 60 $ ( 516 ) $ ( 260 )

Accident, health and other policy benefits

2 unchanged sentences

Reinsurance and indemnification recoverables, net

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

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

Property and casualty

4 unchanged sentences

Total $ 9,013 $ 8,809

Second Quarter 2024 Form 10-Q 35

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Notes to Condensed Consolidated Financial Statements

Rollforward of credit loss allowance for reinsurance recoverables

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

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

2024 2023 2024 2023

1 unchanged sentence

Beginning balance $ ( 64 ) $ ( 61 ) $ ( 62 ) $ ( 62 )

(Increase) decrease in the provision for credit losses — — ( 2 ) 1

Decrease in the provision for credit losses 2 — — 1

Write-offs — — — —

4 unchanged sentences

Write-offs — — — —

Reinsurance recoverables classified as held for sale

Ending balance $ ( 2 ) $ ( 3 ) $ ( 2 ) $ ( 3 )

6 unchanged sentences

life Interest-sensitive life Total

Six months ended June 30, 2024

Nine months ended September 30, 2024

Allstate Health and Benefits

4 unchanged sentences

Experience adjustment ( 15 ) ( 1 ) — ( 16 )

Reclassified to assets held for sale ( 277 ) ( 111 ) ( 101 ) ( 489 )

Total $ 46 $ 3 $ — $ 49

3 unchanged sentences

Ending balance $ 5,751

Six months ended June 30, 2023

Nine months ended September 30, 2023

Allstate Health and Benefits

9 unchanged sentences

Ending balance $ 5,824

Third Quarter 2024 Form 10-Q 37

Notes to Condensed Consolidated Financial Statements

Note 13 Capital Structure

5 unchanged sentences

The net proceeds of this issuance were used for general corporate purposes.

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Notes to Condensed Consolidated Financial Statements

Note 14 Company Restructuring

4 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 $ 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.

The expenses related to these activities are included in the Condensed Consolidated Statements of Operations as restructuring and related charges and totaled $ 28 million and $ 87 million during the three months ended September 30, 2024 and 2023, respectively, and $ 51 million and $ 141 million during the nine months ended September 30, 2024 and 2023, respectively.

Restructuring expenses during the third quarter and first nine 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.

3 unchanged sentences

Expected program charges $ 24

Change in estimated program costs

2024 expenses

8 unchanged sentences

Payments and non-cash charges ( 38 ) ( 15 ) ( 53 )

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.

Restructuring liability as of September 30, 2024 $ 37 $ 2 $ 39

As of September 30, 2024, the cumulative amount incurred to date for active programs related to employee severance, relocation benefits and exit expenses totaled $ 127 million for employee costs and $ 11 million for exit costs.

Note 15 Guarantees and Contingent Liabilities

3 unchanged sentences

Underwriting results related to these arrangements, which tend to be adverse, have been immaterial to the Company’s results of operations in the last two years.

Because of the Company’s participation, it may be exposed to losses that surpass the capitalization of these facilities or assessments from these facilities.

Because of the Company’s participation, it may be exposed to losses

that surpass the capitalization of these facilities or assessments from these facilities.

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.

The terms of the indemnifications vary in duration and nature.

The terms of the indemnifications

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Notes to Condensed Consolidated Financial Statements

vary in duration and nature.

In many cases, the maximum obligation is not explicitly stated and the contingencies triggering the obligation to indemnify have not occurred and are not expected to occur.

3 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

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.

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.

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 June 30, 2024.

The aggregate liability balance related to all guarantees was immaterial as of September 30, 2024.

Regulation and compliance

5 unchanged sentences

The Company has established procedures and policies to facilitate compliance with laws and regulations, to foster prudent business operations, and to support financial reporting.

The Company routinely reviews its practices to validate compliance with laws and regulations and with internal procedures and policies.

Company routinely reviews its practices to validate compliance with laws and regulations and with internal procedures and policies.

As a result of these reviews, from time to time the Company may decide to modify some of its procedures and policies.

5 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;

13 unchanged sentences

When specific monetary demands are made, they are often set just below a state court jurisdictional limit in order to seek the maximum amount available in state court, regardless of the specifics of the case, while still avoiding the risk of removal to federal court.

In Allstate’s experience, monetary demands in pleadings bear little relation to the ultimate loss, if any, to the Company.

In Allstate’s experience, monetary demands in

Third Quarter 2024 Form 10-Q 39

Notes to Condensed Consolidated Financial Statements

pleadings bear little relation to the ultimate loss, if any, to the Company.

In connection with regulatory examinations and proceedings, government authorities may seek various forms of relief, including penalties, restitution, and changes in business practices.

3 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

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

9 unchanged sentences

These developments may include information learned through the discovery process, rulings on dispositive motions, settlement discussions, information obtained from other sources, experience from managing these and other matters, and other rulings by courts, arbitrators or others.

When the Company possesses sufficient appropriate information to develop an estimate of the reasonably possible loss or range of loss above the amount accrued, if any, that estimate is aggregated and disclosed below.

Company possesses sufficient appropriate information to develop an estimate of the reasonably possible loss or range of loss above the amount accrued, if any, that estimate is aggregated and disclosed below.

There may be other disclosed matters for which a loss is probable or reasonably possible, but such an estimate is not possible.

2 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.

7 unchanged sentences

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.

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Notes to Condensed Consolidated Financial Statements

applicable interest, penalties and fees.

In one such lawsuit, Revival Chiropractic v.

5 unchanged sentences

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.

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 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 Allstate.

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

27 unchanged sentences

Ohio filed August 2023);

Allstate Property and Casualty Insurance Company (State Court of Habersham Co., Ga.

Property and Casualty Insurance Company (State Court of Habersham Co., Ga.

filed December 2023);

1 unchanged sentence

filed February 2024);

and Jarrett-Kelly v.

Jarrett-Kelly v.

Direct General Insurance Agency, Inc .

1 unchanged sentence

filed May 2024);

and Schott v.

Allstate Insurance Company and Allstate Property and Casualty Insurance Company (M.D.

filed October 2024).

No classes have been certified in any of these matters.

10 unchanged sentences

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.

The plaintiffs allege that uninsured/underinsured motorist coverages must be stacked, which is combining separate uninsured/underinsured coverage limits of multiple vehicles into one higher coverage limit, 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.

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:

Other proceedings The Company had 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 was captioned:

In the Matter of the Rating Practices of Allstate Insurance Company and Allstate Indemnity Company .

Pursuant to the Notice of Hearing issued by the California Insurance Commissioner, the California Insurance Commissioner is investigating:

Pursuant to the Notice of Hearing issued by the California Insurance Commissioner, the California Insurance Commissioner was investigating:

(1) whether Allstate has potentially violated California insurance law by using illegal price optimization;

1 unchanged sentence

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

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

Pursuant to an agreement between the Company and the California Department of Insurance, the matter was dismissed on September 17, 2024.

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

2 unchanged sentences

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.

On April 19, 2023, the district court

Third Quarter 2024 Form 10-Q 41

Notes to Condensed Consolidated Financial Statements

certified a class in Farley.

LBL is appealing the district court’s order in the Ninth Circuit Court of Appeals.

9 unchanged sentences

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

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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.

District Court for the Southern District of California,

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

2 unchanged sentences

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.

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 16 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”).

For the first nine 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.

2 unchanged sentences

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

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

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

($ in millions) 2024 2023 2024 2023

7 unchanged sentences

Remeasurement (gains) losses 19 158 11 63

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

Pension net cost $ 30 $ 172 $ 11 $ 104

Postretirement benefits

3 unchanged sentences

Costs and expenses 2 ( 3 ) 6 ( 10 )

Remeasurement of projected benefit obligation ( 1 ) ( 2 ) ( 3 ) 2

Remeasurement of benefit obligation

7 ( 9 ) 4 ( 7 )

Remeasurement of plan assets — — — —

4 unchanged sentences

Remeasurement (gains) losses 26 149 15 56

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

Total net cost $ 39 $ 160 $ 21 $ 87

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Notes to Condensed Consolidated Financial Statements

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

Differences between expected and actual returns on plan assets affect remeasurement (gains) losses.

Pension and other postretirement service cost, interest cost, expected return on plan assets and

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 other postretirement service cost, interest cost, expected return on plan assets and 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.

Pension and postretirement benefits remeasurement gains and losses

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

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

($ in millions) 2024 2023 2024 2023

Remeasurement of projected benefit obligation (gains) losses:

Remeasurement of benefit obligation (gains) losses:

Discount rate $ 213 $ ( 231 ) $ 115 $ ( 180 )

2 unchanged sentences

Remeasurement (gains) losses $ 26 $ 149 $ 15 $ 56

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

5.62 % 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.

Remeasurement losses of $ 26 million and $ 15 million for the third quarter and first nine months of 2024, respectively, related to a decrease in the liability discount rate and changes in other assumptions, partially offset by favorable asset performance compared to expected return on plan assets.

The weighted average discount rate used to measure the pension benefit obligation decreased to 5.02 % at September 30, 2024 compared to 5.62 % at June 30, 2024 and 5.35 % at December 31, 2023 resulting in losses for the third quarter and first nine months of 2024.

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

For the first nine months of 2024, the actual return on plan assets was higher than the expected return due to higher equity valuations and tighter credit spreads, partially offset by higher rates.

Note 17 Supplemental Cash Flow Information

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.

Non-cash investing activities include $ 70 million and $ 54 million related to mergers and exchanges completed with equity securities, fixed income securities, bank loans, and limited partnerships for the nine months ended September 30, 2024 and 2023, respectively.

Non-cash investing activities include $ 19 million related to right-of-use property and equipment obtained in exchange for lease obligations for the nine months ended September 30, 2024.

Non-cash investing activities include $ 1 million and $ 15 million related to right-of-use real estate obtained in exchange for lease obligations for the nine months ended September 30, 2024 and 2023, respectively, and $ 123 million related to debt assumed by purchaser on sale of real estate for the nine months ended September 30, 2023.

Non-cash financing activities include $ 28 million and $ 38 million related to the issuance of Allstate common shares for vested equity awards for the nine months ended September 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 $ 86 million and $ 101 million for the nine months ended September 30, 2024 and 2023, respectively.

Non-cash operating activities include $ 50 million and $ 26 million related to right-of-use assets obtained in exchange for lease obligations for the nine months ended September 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) Six months ended June 30,

Third Quarter 2024 Form 10-Q 43

Notes to Condensed Consolidated Financial Statements

($ in millions) Nine months ended September 30,

Cash flows from operating activities

7 unchanged sentences

Operating cash flow provided (used) $ 130 $ ( 265 )

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Notes to Condensed Consolidated Financial Statements

Note 18 Other Comprehensive Income (Loss)

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

($ in millions) Three months ended June 30,

($ in millions) Three months ended September 30,

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

7 unchanged sentences

( 46 ) 10 ( 36 ) 38 ( 8 ) 30

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

Six months ended June 30,

Other comprehensive income (loss) $ 1,642 $ ( 365 ) $ 1,277 $ ( 839 ) $ 183 $ ( 656 )

Nine months ended September 30,

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

7 unchanged sentences

( 15 ) 3 ( 12 ) 37 ( 8 ) 29

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

Other comprehensive income (loss) $ 1,226 $ ( 275 ) $ 951 $ ( 227 ) $ 49 $ ( 178 )

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

Second Quarter 2024 Form 10-Q 43

Included in shareholders' equity is $ 65 million of accumulated other comprehensive loss related to assets and liabilities held for sale as of September 30, 2024.

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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 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”).

We have reviewed the accompanying condensed consolidated statement of financial position of The Allstate Corporation and subsidiaries (the “Company”) as of September 30, 2024, the related condensed consolidated statements of operations, comprehensive income (loss), and shareholders’ equity for the three-month and nine-month periods ended September 30, 2024 and 2023, and of cash flows for the nine-month periods ended September 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

October 30, 2024

Third Quarter 2024 Form 10-Q 45

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