What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2024-10-30 compared with 2024-07-31 · 322 added, 289 removed, 794 unchanged (43% of the section changed)

4 unchanged sentences

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

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

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

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

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

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

Macroeconomic Impacts

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

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

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

government fiscal and monetary policies, the Russia/Ukraine and Israel/Hamas conflicts, supply chain disruptions and labor shortages.These factors should be considered when comparing the current period to prior periods.

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

13 unchanged sentences

We are expanding protection services businesses utilizing enterprise capabilities and resources such as the Allstate brand, distribution, analytics, claims, investment expertise, talent and capital.

On August 13, 2024, we entered into a share purchase agreement with StanCorp Financial Group, Inc.

to sell American Heritage Life Insurance Company and American Heritage Service Company, comprising our 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 net assets related to this transaction, resulting in an expected gain that will be recognized at closing of the transaction.

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

We continue to pursue the sale of the group health and individual health businesses but have not completed the sale process.

Once the criteria for these businesses to be classified as held for sale is met, the entire Health and Benefits segment will be reported in discontinued operations.

46 www.allstate.com

Measuring segment profit or loss

9 unchanged sentences

• Income tax expense or benefit on reconciling items

Second Quarter 2024 Form 10-Q 45

Consolidated net income (loss) applicable to common shareholders

($ in millions)

Consolidated net income applicable to common shareholders was $301 million and $1.49 billion in the second quarter and first six months of 2024, respectively, compared to a loss of $1.39 billion and $1.74 billion in the second quarter and first six months of 2023, respectively, primarily due to improved underwriting results from increased earned premium and improved loss trends.

For the twelve months ended June 30, 2024, return on Allstate common shareholders’ equity was 19.3%.

Consolidated net income applicable to common shareholders was $1.16 billion and $2.65 billion in the third quarter and first nine months of 2024, respectively, compared to a loss of $41 million and $1.78 billion in the third quarter and first nine months of 2023, respectively, primarily due to improved underwriting results from increased earned premium and improved loss trends.

For the twelve months ended September 30, 2024, return on Allstate common shareholders’ equity was 26.1%.

Total revenues

($ in millions)

Total revenues increased 12.4% to $15.71 billion and increased 11.6% to $30.97 billion in the second quarter and first six months of 2024, respectively, compared to the same periods of 2023 due to higher average premium from rate increases and higher net investment income from fixed income securities.

Total revenues increased 14.7% to $16.63 billion and increased 12.6% to $47.60 billion in the third quarter and first nine months of 2024, respectively, compared to the same periods of 2023 due to premium rate increases and higher realized capital gains on investments compared to the prior year.

Net investment income

($ in millions)

Net investment income increased $102 million to $712 million in the second quarter of 2024 primarily due to higher market-based investment results, partially offset by lower performance-based investment results.

Net investment income increased $291 million to $1.48 billion in the first six months of 2024 compared to the same period of 2023, primarily due to higher market-based and performance-based investment results.

Net investment income increased $94 million to $783 million in the third quarter of 2024 primarily due to higher market-based investment results, partially offset by lower performance-based investment results.

Net investment income increased $385 million to $2.26 billion in the first nine months of 2024 compared to the same period of 2023, primarily due to higher market-based investment results.

Market-based results continue to benefit from portfolio repositioning into higher yielding fixed income securities and higher investment balances.

Third Quarter 2024 Form 10-Q 47

Financial highlights

Investments totaled $70.60 billion as of June 30, 2024, increasing from $66.68 billion as of December 31, 2023.

Allstate shareholders’ equity was $18.59 billion as of June 30, 2024, increasing from $17.77 billion as of December 31, 2023, primarily due to net income, partially offset by dividends to shareholders and higher unrealized net capital losses on investments.

Book value per diluted common share (ratio of Allstate common shareholders’ equity to total common

shares outstanding and dilutive potential common shares outstanding) was $62.14, an increase of 21.2% from $51.29 as of June 30, 2023, and an increase of 4.6% from $59.39 as of December 31, 2023.

Return on average Allstate common shareholders’ equity for the twelve months ended June 30, 2024 was 19.3%, an increase of 36.5 points from (17.2)% for the twelve months ended June 30, 2023.

The increase was primarily due to net income applicable to common shareholders for the trailing twelve-month period ending June 30, 2024 compared to a net loss for the twelve-month period ending June 30, 2023.

46 www.allstate.com

Investments totaled $73.60 billion as of September 30, 2024, increasing from $66.68 billion as of December 31, 2023.

Allstate shareholders’ equity was $20.88 billion as of September 30, 2024, increasing from $17.77 billion as of December 31, 2023, primarily due to net income and unrealized net capital gains, partially offset by dividends to shareholders.

Book value per diluted common share (ratio of Allstate common shareholders’ equity to total common shares outstanding and dilutive potential common

shares outstanding) was $70.35, an increase of 47.2% from $47.79 as of September 30, 2023, and an increase of 18.5% from $59.39 as of December 31, 2023.

Return on average Allstate common shareholders’ equity for the twelve months ended September 30, 2024 was 26.1%, an increase of 40.8 points from (14.7)% for the twelve months ended September 30, 2023.

The increase was primarily due to net income applicable to common shareholders for the trailing twelve-month period ending September 30, 2024 compared to a net loss for the twelve-month period ending September 30, 2023.

Summarized consolidated financial results

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

16 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)

2 unchanged sentences

Segment highlights

Allstate Protection underwriting loss was $142 million in the second quarter of 2024 compared to underwriting loss of $2.09 billion in the second quarter of 2023 and underwriting income totaled $761 million in the first six months of 2024 compared to an underwriting loss of $3.09 billion in the first six months of 2023, primarily due to increased premiums earned and lower catastrophe losses, partially offset by higher advertising costs.

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

Catastrophe losses were $2.12 billion and $2.85 billion in the second quarter and first six months of 2024, respectively, compared to $2.70 billion and $4.39 billion in the second quarter and first six months of 2023, respectively.

Premiums written increased 13.1% to $14.28 billion and increased 12.5% to $27.46 billion in the second quarter and first six months of 2024, respectively, compared to the same periods of 2023, reflecting higher premiums in both Allstate and National General brands.

Protection Services adjusted net income was $55 million in the second quarter of 2024 compared to $41 million in the second quarter of 2023, primarily due to revenue growth at Allstate Protection Plans.

Adjusted net income was $109 million the first six months of

2024 compared to $75 million in the first six months of 2023, primarily due to growth at Allstate Protection Plans and improved claim severity and lower expenses at Allstate Roadside.

Premiums and other revenue increased 12.3% to $711 million and increased 12.2% to $1.41 billion in the second quarter and first six months of 2024, respectively, compared to the same periods of 2023, primarily due to Allstate Protection Plans.

Allstate Health and Benefits adjusted net income was $58 million in the second quarter of 2024 compared to adjusted net income of $57 million in the second quarter of 2023, primarily due to an increase in group health and employer voluntary benefits, partially offset by a decline in individual health.

Adjusted net income was $114 million in the first six months of 2024 compared to $113 million in the first six months of 2023, primarily due to an increase in group health.

Premiums and contract charges increased 4.6% to $474 million in the second quarter of 2024 and increased 3.9% to $952 million in the first six months of 2024 compared to the same periods of 2023, primarily due to growth in group health and individual health.

The increase in the first six months of 2024 was partially offset by a decline in employer voluntary benefits.

Second Quarter 2024 Form 10-Q 47

Allstate Protection underwriting income was $555 million in the third quarter of 2024 compared to an underwriting loss of $331 million in the third quarter of 2023 due to increased premiums earned and lower non-catastrophe losses, partially offset by higher catastrophe losses and advertising costs.

Underwriting income totaled $1.32 billion in the first nine months of 2024 compared to an underwriting loss of $3.42 billion in the first nine months of 2023, primarily due to increased premiums earned and lower losses, partially offset by higher advertising costs.

As auto profitability improves, we are increasing advertising, expanding customer access and delivering personalized affordable, simple and connected consumer offerings to support growth.

Catastrophe losses were $1.70 billion and $4.55 billion in the third quarter and first nine months of 2024, respectively, compared to $1.18 billion and $5.57 billion in the third quarter and first nine months of 2023, respectively.

Premiums written increased 10.5% to $14.71 billion and increased 11.8% to $42.17 billion in the third quarter and first nine months of 2024, respectively, compared to the same periods of 2023, reflecting higher premiums in both Allstate and National General brands.

48 www.allstate.com

Protection Services adjusted net income was $58 million in the third quarter of 2024 compared to $27 million in the third quarter of 2023, primarily due to revenue growth and improved claim frequency at Allstate Protection Plans.

Adjusted net income was $167 million the first nine months of 2024 compared to $102 million in the first nine months of 2023, primarily due to growth at Allstate Protection Plans and improved claim severity at Allstate Roadside.

Premiums and other revenue increased 16.3% to $749 million and increased 13.6% to $2.16 billion in the third quarter and first nine months of 2024, respectively, compared to the same periods of 2023, primarily due to Allstate Protection Plans.

Allstate Health and Benefits adjusted net income was $37 million in the third quarter of 2024 compared to adjusted net income of $69 million in the third quarter of 2023, and adjusted net income was $151 million in the first nine months of 2024 compared to $182 million in the first nine months of 2023.

The decline in adjusted net income from the third quarter of 2023 was primarily due to increased benefit utilization across all lines of business.

Premiums and contract charges increased 5.2% to $487 million in the third quarter of 2024 and increased 4.4% to $1.44 billion in the first nine months of 2024 compared to the same periods of 2023, primarily due to growth in individual health and group health, partially offset by a decline in employer voluntary benefits.

Third Quarter 2024 Form 10-Q 49

Property-Liability Operations

41 unchanged sentences

Underwriting results

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

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

($ in millions, except ratios) 2024 2023 2024 2023

8 unchanged sentences

Amortization of purchased intangibles (52) (60) (154) (175)

Underwriting (loss) income $ (145) $ (2,094) $ 753 $ (3,095)

Underwriting income (loss) $ 495 $ (414) $ 1,248 $ (3,509)

Catastrophe losses

19 unchanged sentences

Effect of Run-off Property-Liability business on combined ratio 0.5 0.7 0.2 0.3

(1) Restructuring and related charges for the second quarter and first six months of 2024 primarily relate to implementing a new phase of the organizational transformation component of the Transformative Growth plan.

(1) Restructuring and related charges for the third quarter and first nine months of 2024 primarily relate to the organizational transformation component of the Transformative Growth plan.

See Note 14 of the condensed consolidated financial statements for additional details.

1 unchanged sentence

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

Second Quarter 2024 Form 10-Q 49

Third Quarter 2024 Form 10-Q 51

Segment Results Allstate Protection

1 unchanged sentence

Underwriting results

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

Amortization of purchased intangibles (52) (60) (154) (175)

Underwriting (loss) income $ (142) $ (2,092) $ 761 $ (3,090)

Underwriting income (loss) $ 555 $ (331) $ 1,316 $ (3,421)

Catastrophe losses $ 1,703 $ 1,181 $ 4,554 $ 5,568

Underwriting loss was $142 million in the second quarter of 2024 and underwriting income was $761 million in the first six months of 2024 compared to underwriting loss of $2.09 billion and $3.09 billion in the second quarter and first six months of 2023, respectively, due to increased premiums earned and lower catastrophe losses, partially offset by higher advertising costs.

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

Underwriting income was $555 million in the third quarter of 2024 compared to underwriting loss of $331 million in the third quarter of 2023 due to increased premiums earned and lower non-catastrophe losses, partially offset by higher catastrophe losses and advertising costs.

Underwriting income was $1.32 billion in the first nine months of 2024 compared to underwriting loss of $3.42 billion in the first nine months of 2023 due to increased premiums earned and lower losses, partially offset by higher advertising costs.

As auto profitability improves, we are increasing advertising, expanding customer access and delivering personalized affordable, simple and connected consumer offerings to support growth.

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

($ in millions)

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

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

($ in millions)

1 unchanged sentence

Allstate Protection Segment Results

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

Allstate brand National General Allstate Protection

Underwriting income (loss) by line of business

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

($ in millions) 2024 2023 2024 2023

Three months ended June 30,

$ 486 $ (178) $ 1,207 $ (1,202)

5 unchanged sentences

Other business lines (1)

35 24 17 (3) 52 21

Answer Financial 3 4 10 9

Total $ 555 $ (331) $ 1,316 $ (3,421)

Six months ended June 30,

$ 492 $ (878) $ 229 $ (146) $ 721 $ (1,024)

310 (1,703) (121) (138) 189 (1,841)

Other personal lines (51) (160) 3 1 (48) (159)

Commercial lines (213) (124) 5 3 (208) (121)

Other business lines (1)

63 46 37 4 100 50

Answer Financial 7 5

Total $ 601 $ (2,819) $ 153 $ (276) $ 761 $ (3,090)

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

Second Quarter 2024 Form 10-Q 51

Segment Results Allstate Protection

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

2 unchanged sentences

The portion of premiums written applicable to the unexpired term of the policies is recorded as unearned premiums on our Condensed Consolidated Statements of Financial Position.

Premiums written by brand and by line of business

Allstate brand National General Allstate Protection

Premiums written by line of business

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

($ in millions) 2024 2023 2024 2023

Three months ended June 30,

Auto $ 9,539 $ 8,770 $ 28,180 $ 25,388

4 unchanged sentences

Total premiums written $ 14,707 $ 13,304 $ 42,169 $ 37,707

Six months ended June 30,

Auto $ 14,887 $ 13,647 $ 3,754 $ 2,971 $ 18,641 $ 16,618

Homeowners 5,866 5,147 853 768 6,719 5,915

Other personal lines 1,197 1,113 308 110 1,505 1,223

Commercial lines 134 323 173 104 307 427

Other business lines — — 290 220 290 220

Total premiums written $ 22,084 $ 20,230 $ 5,378 $ 4,173 $ 27,462 $ 24,403

Premiums earned by brand and by line of business

Allstate brand National General Allstate Protection

Premiums earned by line of business

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

($ in millions) 2024 2023 2024 2023

Three months ended June 30,

Auto $ 9,270 $ 8,345 $ 27,127 $ 24,374

4 unchanged sentences

Total premiums earned $ 13,694 $ 12,270 $ 39,933 $ 35,826

Six months ended June 30,

Auto $ 14,536 $ 13,432 $ 3,321 $ 2,597 $ 17,857 $ 16,029

Homeowners 5,628 5,025 781 668 6,409 5,693

Other personal lines 1,155 1,061 205 88 1,360 1,149

Commercial lines 182 336 145 98 327 434

Other business lines — — 286 251 286 251

Total premiums earned $ 21,501 $ 19,854 $ 4,738 $ 3,702 $ 26,239 $ 23,556

Reconciliation of premiums written to premiums earned

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

4 unchanged sentences

Total premiums earned $ 13,694 $ 12,270 $ 39,933 $ 35,826

52 www.allstate.com

Allstate Protection Segment Results

Policies in force by brand and by line of business

Allstate brand National General Allstate Protection

PIF (thousands) 2024 2023 2024 2023 2024 2023

As of June 30,

Policies in force by line of business

As of September 30,

(In thousands)

Auto 24,998 25,376

3 unchanged sentences

Total 37,596 37,853

Auto insurance premiums written increased 12.3% or $1.02 billion in the second quarter of 2024 compared to the second quarter of 2023 and 12.2% or $2.02 billion in the first six months of 2024 compared to the first six months of 2023, primarily due to the following factors:

Third Quarter 2024 Form 10-Q 53

Segment Results Allstate Protection

Auto insurance premiums written increased 8.8% or $769 million in the third quarter of 2024 compared to the third quarter of 2023 and 11.0% or $2.79 billion in the first nine months of 2024 compared to the first nine months of 2023, primarily due to the following factors:

• Increased average premiums driven by rate increases.

In the six months ended June 30, 2024:

In the nine months ended September 30, 2024:

– Rate increases of 9.1% were taken for Allstate brand in 49 locations, resulting in total estimated Allstate brand insurance premium impact of 6.3%

– Rate increases of 10.1% were taken for National General brand in 44 locations, resulting in total estimated National General brand insurance premium impact of 7.8%

• We expect to continue to pursue targeted rate increases for both Allstate and National General brands in states currently not achieving acceptable

returns to offset increases in loss costs throughout 2024

• PIF decreased 1.6% or 396 thousand to 25,124 thousand as of June 30, 2024 compared to June 30, 2023

• Renewal ratio increased 0.2 points and 0.3 points in the second quarter and the first six months of 2024, respectively, compared to the second quarter and first six months of 2023

• Increased new issued applications driven by growth in all channels

• We have removed underwriting restrictions in areas that represent the majority of Allstate brand countrywide premiums, which is expected to increase premiums written and PIF

• In 2024, we have removed underwriting restrictions in areas that represent the majority of Allstate brand countrywide premiums, which is expected to increase premiums written and PIF.

In locations not

achieving acceptable returns, we expect to continue to pursue targeted rate increases for both Allstate and National General brands.

In states where we are achieving acceptable returns, we plan to take rates that keep pace with increasing costs.

See Note 8 for additional details on actions taken related to Adirondack Insurance Exchange and New Jersey Skylands Insurance Association

• PIF decreased 1.5% or 378 thousand to 24,998 thousand as of September 30, 2024 compared to September 30, 2023

• Renewal ratio for Allstate brand decreased 0.2 points and increased 0.1 point in the third quarter and the first nine months of 2024, respectively, compared to the third quarter and first nine months of 2023

• Increased new issued applications in all channels

Auto premium measures and statistics

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

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

2024 2023 Change 2024 2023 Change

New issued applications (thousands)

Allstate Protection by brand

Allstate brand 892 724 23.2 % 1,692 1,475 14.7 %

National General 836 754 10.9 1,706 1,537 11.0

New issued applications (in thousands)

Allstate Protection by channel

Exclusive agency channel 675 582 16.0 % 1,908 1,745 9.3 %

Direct channel 620 398 55.8 1,668 1,276 30.7

Independent agency channel 597 525 13.7 1,714 1,496 14.6

Total new issued applications 1,892 1,505 25.7 % 5,290 4,517 17.1 %

1 unchanged sentence

Allstate brand renewal ratio (%) 84.7 84.9 (0.2) 85.5 85.4 0.1

Homeowners insurance premiums written increased 13.7% or $464 million in the second quarter of 2024 compared to the second quarter of 2023 and increased 13.6% or $804 million in the first six months of 2024 compared to the first six months of 2023, primarily due to the following factors:

Homeowners insurance premiums written increased 15.5% or $548 million in the third quarter of 2024 compared to the third quarter of 2023 and increased 14.3% or $1.35 billion in the first nine months of 2024 compared to the first nine months of 2023, primarily due to the following factors:

• Higher Allstate brand average premiums from implemented rate increases, combined with policies in force growth

• In the six months ended June 30, 2024, rate increases of 11.6% were taken for Allstate brand in 25 locations, resulting in total estimated Allstate brand insurance premium impact of 4.5%

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

In the six months ended June 30, 2024, rate increases of 14.4% were taken for National General brand in 22 locations,

resulting in total estimated National General brand insurance premium impact of 3.9%

• Increased new issued applications driven by growth in the exclusive agency and direct channels

• In the nine months ended September 30, 2024, rate increases of 14.0% were taken for Allstate brand in 34 locations, resulting in total estimated Allstate brand insurance premium impact of 7.6%

• In the nine months ended September 30, 2024, rate increases of 14.5% were taken for National General brand in 30 locations, resulting in total estimated National General brand insurance premium impact of 6.1%

• Increased new issued applications in the exclusive agency and direct channels

• Renewal ratio for Allstate brand increased 0.4 points and 0.7 points in the third quarter and the

first nine months of 2024, respectively, compared to the third quarter and first nine months of 2023

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

We are no longer writing new homeowners business in California, New Jersey and Florida, and are non-renewing certain policies in Florida, which have and will continue to negatively impact premiums

We are no longer writing new homeowners business in California, New Jersey and Florida, and are non-renewing certain policies in Florida.

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

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

Second Quarter 2024 Form 10-Q 53

Segment Results Allstate Protection

National General policy growth may be negatively impacted to improve underwriting margins to targeted levels through underwriting and rate actions.

See Note 8 for additional details on actions taken related to Adirondack Insurance Exchange and New Jersey Skylands Insurance Association.

54 www.allstate.com

Allstate Protection Segment Results

Homeowners premium measures and statistics

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

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

2024 2023 Change 2024 2023 Change

New issued applications (thousands)

Allstate Protection by brand

Allstate brand 293 234 25.2 % 552 464 19.0 %

National General 41 46 (10.9) 73 81 (9.9)

New issued applications (in thousands)

Allstate Protection by channel

Exclusive agency channel 260 211 23.2 % 719 609 18.1 %

Direct channel 39 22 77.3 96 60 60.0

Independent agency channel 63 69 (8.7) 172 178 (3.4)

Total new issued applications 362 302 19.9 % 987 847 16.5 %

1 unchanged sentence

Allstate brand renewal ratio (%) 87.2 86.8 0.4 87.2 86.5 0.7

Other personal lines premiums written increased 25.2% or $170 million in the second quarter of 2024 compared to the second quarter of 2023 and increased 23.1% or $282 million in the first six months of 2024 compared to the first six months of 2023 primarily due to increases in involuntary auto policies purchased from other carriers for National General and landlords policies for Allstate brand.

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

Commercial lines premiums written decreased 25.0% or $50 million in the second quarter of 2024 compared to the second quarter of 2023 and decreased 28.1% or $120 million in the first six months of 2024 compared to the first six months of 2023 primarily due to the strategic decision for the Allstate brand to stop writing new business and non-renew

certain policies.

We are committed to offering comprehensive commercial products to customers through our exclusive agency and independent agency channels, with solutions offered by the National General brand and NEXT Insurance.

Other business lines premiums written increased 63.2% or $60 million in the second quarter of 2024 compared to the second quarter of 2023 and increased 31.8% or $70 million in the first six months of 2024 compared to the first six months of 2023 due to growth in the lender-placed business.

Other personal lines premiums written increased 20.9% or $141 million in the third quarter of 2024 compared to the third quarter of 2023 and increased 22.3% or $423 million in the first nine months of 2024 compared to the first nine months of 2023 primarily due to increases in involuntary auto policies purchased from other carriers by National General and landlords policies for Allstate brand.

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

Commercial lines premiums written decreased 25.7% or $36 million in the third quarter of 2024 compared to the third quarter of 2023 and decreased 27.5% or $156 million in the first nine months of 2024 compared to the first nine months of 2023 primarily due to the strategic decision for the Allstate brand to stop writing new business and non-renew certain policies.

We are committed to offering comprehensive

commercial products to customers through our exclusive agency, independent agency and direct channels, with solutions offered by the National General brand, NEXT Insurance and other brokered solutions.

Other business lines premiums written decreased 9.8% or $19 million in the third quarter of 2024 compared to the third quarter of 2023 primarily driven by the loss of certain direct lender clients.

Other business lines premiums written increased 12.3% or $51 million in the first nine months of 2024 compared to the first nine months of 2023 due to growth in business placed by agents.

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

4 unchanged sentences

2024 2023 2024 2023 2024 2023

Three months ended June 30,

Three months ended September 30,

71.9 81.4 22.9 20.7 94.8 102.1

1 unchanged sentence

Other personal lines (1)

96.2 78.6 6.3 20.4 102.5 99.0

Commercial lines 84.8 102.0 25.8 28.9 110.6 130.9

Other business lines 72.4 49.3 1.3 (3)

32.5 73.7 81.8

Total 74.4 81.5 21.5 21.2 95.9 102.7

1 unchanged sentence

Impact of restructuring and related charges 0.1 0.6 0.1 0.6

Six months ended June 30,

Nine months ended September 30,

Auto 73.8 84.2 21.8 20.7 95.6 104.9

1 unchanged sentence

Other personal lines (1)

91.5 88.4 11.7 20.3 103.2 108.7

Commercial lines 120.1 103.2 26.8 25.6 146.9 128.8

3 unchanged sentences

Impact of restructuring and related charges 0.1 0.3 0.1 0.3

(1) Expense ratio includes other revenue of $97 million and $161 million for the three and nine months ended September 30, 2024, respectively, compared to $16 million and $33 million for the three and nine months ended September 30, 2023, respectively, for fees on involuntary auto policies.

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

54 www.allstate.com

Allstate Protection Segment Results

(3) Includes anticipated return commissions on lender-placed business due to increased losses.

Third Quarter 2024 Form 10-Q 55

Segment Results Allstate Protection

Loss ratios by line of business

2 unchanged sentences

2024 2023 2024 2023 2024 2023 2024 2023

Three months ended June 30,

Three months ended September 30,

Auto 71.9 81.4 3.0 2.6 (0.7) 0.4 (0.1) 0.1

4 unchanged sentences

Total 74.4 81.5 12.4 9.6 (0.2) 0.8 (0.1) 0.1

Six months ended June 30,

Nine months ended September 30,

Auto 73.8 84.2 2.7 2.7 (1.1) 0.4 (0.1) (0.1)

4 unchanged sentences

Total 75.6 88.6 11.4 15.5 (1.0) 0.8 (0.8) —

(1) The ten-year average effect of catastrophe losses on the total combined ratio was 13.5 points in the second quarter of 2024.

(1) The ten-year average effect of catastrophe losses on the total combined ratio was 9.0 points and 9.9 points in the third quarter and first nine months of 2024, respectively.

Auto underwriting quarterly results

16 unchanged sentences

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

Auto loss ratio decreased 13.7 and 10.9 points in the second quarter and first six months of 2024, respectively, compared to the same periods of 2023 driven by increased earned premiums.

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

Auto loss ratio decreased 9.5 and 10.4 points in the third quarter and first nine months of 2024, respectively, compared to the same periods of 2023 driven by increased earned premiums and lower non-catastrophe losses.

Estimated report year 2024 incurred claim severity for Allstate brand increased compared to report year 2023 for major coverages due to higher repair costs, a higher mix of total losses, an

increase in claims with attorney representation, higher medical consumption, and inflation.

Gross claim frequency decreased relative to the prior year.

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

Homeowners loss ratio decreased 34.7 and 36.3 points in the second quarter and first six months of 2024, respectively, compared to the same periods of 2023, primarily due to lower catastrophe losses and increased premiums earned.

Gross claim frequency decreased in the second quarter and first six months of 2024 compared to the same periods of 2023 due to fewer fire claims reported.

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

Homeowners loss ratio decreased 6.1 points in the third quarter of 2024 compared to the same period of 2023 primarily due to increased premiums earned and lower non-catastrophe losses.

Homeowners loss ratio decreased 25.9 points in the first nine months of 2024 compared to the same period of 2023 primarily due to lower losses and increased premiums earned.

Gross claim frequency decreased in the third quarter and first nine months of 2024 compared to the same periods of 2023 due to fewer claims reported related to water and wind/hail perils.

Paid claim severity decreased in the third quarter of 2024 compared to the same period of 2023 due to lower losses from water and wind/hail perils.

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

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

Other personal lines loss ratio decreased 1.5 and 4.7 points in the second quarter and first six months of 2024, respectively, compared to the same periods of 2023 primarily due to increased premiums earned and lower catastrophe losses, partially offset by increased severity.

Second Quarter 2024 Form 10-Q 55

Segment Results Allstate Protection

Commercial lines loss ratio increased 53.4 and 32.7 points in the second quarter and first six months of 2024, respectively, compared to the same periods of 2023, primarily due to higher unfavorable reserve reestimates related to the shared economy business and premiums earned decreasing as a result of the strategic decision for the Allstate brand to stop writing new business and non-renew certain policies.

Other business lines loss ratio decreased 2.3 and 0.6 points in the second quarter and first six months of 2024, respectively, compared to the same periods of 2023, primarily due to increased premiums earned and favorable reserve development, partially offset by higher losses.

Catastrophe losses decreased $576 million to $2.12 billion in the second quarter of 2024 compared to the second quarter of 2023 and decreased $1.54 billion to $2.85 billion in the first six months of 2024 compared to the first six months of 2023, primarily due to lower losses per event compared to historically high levels in the prior year.

Favorable prior year reserve reestimates of $138 million and $300 million for the second quarter and first six months of 2024, respectively, were primarily due to reserve reestimates in homeowners lines for 2023 events.

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Allstate Protection Segment Results

Other personal lines loss ratio increased 17.6 and 3.1 points in the third quarter and first nine months of 2024, respectively, compared to the same periods of 2023 primarily due to higher losses and unfavorable reserve development, partially offset by increased premiums earned.

Commercial lines loss ratio decreased 17.2 points in the third quarter of 2024 compared to the same period of 2023, primarily due to lower non-catastrophe losses, partially offset by premiums earned decreasing as a result of the strategic decision for the Allstate brand to stop writing new business and non-renew certain policies.

C ommercial lines loss ratio increased 16.9 points in the first nine months of 2024 compared to the same period of 2023, primarily due to Allstate brand strategy changes and unfavorable reserve development related to the shared economy business, partially offset by lower non-catastrophe losses.

Other business lines loss ratio increased 23.1 and 7.6 points in the third quarter and first nine months of 2024, respectively, compared to the same periods of 2023, primarily due to higher losses.

Catastrophe losses increased $522 million to $1.70 billion in the third quarter of 2024 compared to the third quarter of 2023 due to larger losses per event, primarily from hurricanes, including $630 million related to Hurricane Helene and $220 million related to Hurricane Beryl.

Catastrophe losses decreased $1.01 billion to $4.55 billion in the first nine months of 2024 compared to the first nine months of 2023, primarily due to lower losses per event for wind and hail events.

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

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

Catastrophes are caused by various natural events

including high winds, winter storms and freezes, tornadoes, hailstorms, wildfires, tropical storms, tsunamis, hurricanes, earthquakes and volcanoes.

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

5 unchanged sentences

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

Over time, we have limited our aggregate insurance exposure to catastrophe losses in certain regions of the country that are subject to high levels of natural catastrophes by utilizing reinsurance and participating in various state facilities.

Over time, we have limited our aggregate insurance exposure to catastrophe losses in certain regions of the country that are subject to high levels of natural catastrophes by managing policies in force, utilizing reinsurance and participating in various state facilities.

Catastrophe losses by the type of event

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

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

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

Hurricanes/tropical storms 5 $ 953 3 $ 76 5 $ 953 3 $ 76

Tornadoes — — — — 1 57 3 133

6 unchanged sentences

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

Our current catastrophe reinsurance program supports our risk and return framework which incorporates our robust economic capital model and is informed by catastrophe risk models including hurricanes, earthquakes and wildfires and adjusts based on premium and insured value growth.

As of June 30, 2024, the modeled 1-in-100 probable

maximum loss for hurricane, wildfire and earthquake perils is approximately $2.9 billion, net of reinsurance.

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

During the second quarter of 2024, we completed the placement of our 2024-2025 Florida Excess Catastrophe Reinsurance Program (“Florida program”) and the National General Lender Services Standalone Program.

Additionally, we placed one single-year term contract as part of our 2024-2025 Nationwide Excess Catastrophe Reinsurance Program, providing $90

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Allstate Protection Segment Results

million of placed limit in excess of a $7.70 billion retention.

Florida program updates Our 2024 Florida program provides coverage for property policies of Castle Key Insurance Company and certain affiliate companies for Florida catastrophe events up to $890 million of loss less a $30 million retention.

The Florida program includes reinsurance agreements placed in the traditional market, the Florida Hurricane Catastrophe Fund (“FHCF”) and the insurance-linked securities (“ILS”) market as follows:

• Traditional market placements comprise reinsurance limits for losses to personal lines property in Florida arising out of multiple perils.

These contracts provide a combined $310 million of limits, with a portion of the traditional market placements providing coverage for perils not covered by the FHCF contracts, which only cover hurricanes.

• Three FHCF contracts provide $206 million of limits for qualifying losses to personal lines property in Florida caused by storms the National Hurricane Center declares to be hurricanes.

The three contracts are 90% placed.

• ILS placements provide $625 million of reinsurance limits for qualifying losses to personal lines property in Florida caused by a named storm event, a severe weather event, an earthquake event, a fire event, a volcanic eruption event, or a meteorite impact event.

National General Lender Services Standalone Program is placed in the traditional market and provides $265 million of coverage, subject to a $70 million retention, with one reinstatement of limits.

Inuring contracts include the National General FHCF contract providing $71 million of limits in excess of a $36 million retention, 90% placed.

For a complete summary of the 2024 reinsurance placement, please read this in conjunction with the discussion and analysis in Part I.

Management’s Discussion and Analysis - Allstate Protection Segment Results, Catastrophe Reinsurance of The Allstate Corporation Form 10-Q for the quarterly period ended March 31, 2024.

The total cost of our property catastrophe reinsurance programs, excluding reinstatement premiums, during the second quarter and first six months of 2024 was $296 million and $582 million, respectively, compared to $242 million and $461 million in the second quarter and first six months of 2023, respectively.

Our current catastrophe reinsurance program supports our risk and return framework which

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

As of September 30, 2024, the modeled 1-in-100 probable maximum loss for hurricane, wildfire and earthquake perils is approximately $2.9 billion, net of reinsurance.

We continually review our aggregate risk appetite and

Third Quarter 2024 Form 10-Q 57

Segment Results Allstate Protection

the cost and availability of reinsurance to optimize the risk and return profile of this exposure.

The total cost of our property catastrophe reinsurance programs, excluding reinstatement premiums, during the third quarter and first nine months of 2024 was $298 million and $880 million, respectively, compared to $268 million and $729 million in the third quarter and first nine months of 2023, respectively.

Catastrophe placement premiums reduce net written and earned premium with approximately 80% of the reduction related to homeowners premium.

Prior year reserve reestimates Favorable reserve reestimates, including catastrophes, were $204 million and $359 million in the second quarter and first six months of 2024, respectively, primarily due to favorable reserve reestimates in homeowners lines and personal auto lines, partially offset by unfavorable reserve reestimates in commercial lines and other personal lines.

Prior year reserve reestimates Favorable reserve reestimates, including catastrophes, were $28 million

in the third quarter of 2024 primarily due to favorable reserve reestimates in personal auto lines and homeowners lines, partially offset by unfavorable reserve reestimates in other personal lines.

Favorable reserve reestimates, including catastrophes, were $387 million in the first nine months of 2024 primarily due to favorable reserve reestimates in homeowners and personal auto lines, partially offset by unfavorable reserve reestimates in other personal lines and commercial lines.

For a more detailed discussion on reinsurance and reserve reestimates, see Note 9 of the condensed consolidated financial statements.

Prior year reserve reestimates

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

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

Prior year reserve

11 unchanged sentences

Total Allstate Protection $ (28) $ 101 (0.2) 0.8 $ (387) $ 296 (1.0) 0.8

Allstate brand $ (198) $ 36 (1.5) 0.3 $ (375) $ (18) (1.5) (0.1)

National General (6) 176 — 1.5 16 213 0.1 0.9

Total Allstate Protection $ (204) $ 212 (1.5) 1.8 $ (359) $ 195 (1.4) 0.8

(1) Favorable reserve reestimates are shown in parentheses.

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

Second Quarter 2024 Form 10-Q 57

Segment Results Allstate Protection

Expense ratio increased 0.8 and 0.1 points in the second quarter and first six months of 2024, respectively, compared to the second quarter and first six months of 2023, primarily due to an increase in advertising costs, partially offset by higher earned premium growth relative to fixed costs.

Expense ratio increased 0.3 points and 0.2 points in the third quarter and first nine months of 2024, respectively, compared to the third quarter and first nine months of 2023, primarily due to an increase in advertising costs, partially offset by higher earned premium growth relative to fixed costs.

Impact of specific costs and expenses on the expense ratio

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

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

($ in millions, except ratios) 2024 2023 Change 2024 2023 Change

19 unchanged sentences

Underwriting results

($ 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

Claims and claims expense

Asbestos claims

$ (19) $ (44) $ (19) $ (44)

Environmental claims

(10) (18) (10) (18)

Other run-off lines (30) (20) (36) (23)

Total claims and claims expense

(59) (82) (65) (85)

Operating costs and expenses (1) (1) (3) (3)

1 unchanged sentence

$ (60) $ (83) $ (68) $ (88)

Annual reserve review In the third quarter of 2024 and 2023, we performed our annual reserve review using established industry and actuarial best practices.

The annual review resulted in unfavorable reserve reestimates totaling $58 million and $80 million in 2024 and 2023, respectively.

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

The reserve reestimates in 2024 primarily related to new reported information for asbestos related claims and adverse developments within the other run-off lines.

The reserve reestimates in 2023 primarily related to new reported information and defense costs for asbestos related claims and other run-off exposures

and higher than expected environmental reported losses.

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

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

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

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

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

Asbestos claims

13 unchanged sentences

Net reserves $ 1,439 $ 1,444

Third Quarter 2024 Form 10-Q 59

Segment Results Run-off Property-Liability

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

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

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

Direct excess commercial insurance

22 unchanged sentences

Net reserves $ 1,439 $ 1,444

Second Quarter 2024 Form 10-Q 59

Segment Results Run-off Property-Liability

Percentage of gross and ceded reserves by case and incurred but not reported (“IBNR”)

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Case IBNR Case IBNR

8 unchanged sentences

Ceded 86 14 83 17

(1) Approximately 64% and 68% of gross case reserves as of June 30, 2024 and December 31, 2023, respectively, are subject to settlement agreements.

(2) Approximately 70% and 72% of ceded case reserves as of June 30, 2024 and December 31, 2023, respectively, are subject to settlement agreements.

(1) Approximately 66% and 68% of gross case reserves as of September 30, 2024 and December 31, 2023, respectively, are subject to settlement agreements.

(2) Approximately 73% and 72% of ceded case reserves as of September 30, 2024 and December 31, 2023, respectively, are subject to settlement agreements.

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Run-off Property-Liability Segment Results

Gross payments from case reserves by type of exposure

($ 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

6 unchanged sentences

Ceded (1) — (2) —

(1) In the second quarter and first six months of 2024 87% and 86% of payments related to settlement agreements, respectively, compared to 79% and 85% of the second quarter and first six months of 2023, respectively.

(2) In the second quarter and first six months of 2024 96% and 93% of payments related to settlement agreements, respectively, compared to 74% and 87% of the second quarter and first six months of 2023, respectively.

Total net reserves as of June 30, 2024, included $698 million or 50% of estimated IBNR reserves compared to $762 million or 53% of estimated IBNR reserves as of December 31, 2023.

Total gross payments were $39 million and $62 million for the second quarter and first six months of 2024, respectively, compared to $24 million and $53 million for the second quarter and first six months of 2023, respectively .

(1) In the third quarter and first nine months of 2024, 94% and 89% of payments related to settlement agreements, respectively, compared to 82% and 84% of the third quarter and first nine months of 2023, respectively.

(2) In the third quarter and first nine months of 2024, 98% and 95% of payments related to settlement agreements, respectively, compared to 56% and 77% of the third quarter and first nine months of 2023, respectively.

Total net reserves as of September 30, 2024, included $748 million or 52% of estimated IBNR reserves compared to $762 million or 53% of estimated IBNR reserves as of December 31, 2023.

Total gross payments were $26 million and $88 million for the third quarter and first nine months of 2024, respectively, compared to $20 million and $73 million for the third quarter and first nine months of 2023, respectively .

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

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

Reinsurance collections were $15 million and $26 million for the second quarter and first six months of 2024, respectively, compared to $9 million and $24 million for the second quarter and first six months of 2023, respectively.

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Protection Services Segment Results

Reinsurance collections were $5 million and $31 million for the third quarter and first nine months of 2024, respectively, compared to $6 million and $30 million for the third quarter and first nine months of 2023, respectively.

Third Quarter 2024 Form 10-Q 61

Segment Results Protection Services

Protection Services Segment

Summarized financial 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

3 unchanged sentences

Intersegment insurance premiums and service fees (1)

49 34 123 102

Net investment income 24 19 68 53

5 unchanged sentences

Income tax expense on operations (15) (8) (51) (34)

noncontrolling interest (1) (1) (1) (1)

Adjusted net income $ 58 $ 27 $ 167 $ 102

10 unchanged sentences

Allstate Identity Protection 2,538 2,965

Policies in force as of June 30 (in thousands) 158,019 145,764

Policies in force as of September 30 (in thousands) 163,729 147,980

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

Adjusted net income increased 34.1% or $14 million in the second quarter of 2024 compared to the second quarter of 2023, primarily due to revenue growth at Allstate Protection Plans.

Adjusted net income increased 45.3% or $34 million in the first six months of 2024 compared to the same period of 2023, due to growth at Allstate Protection Plans and improved claim severity and lower expenses at Allstate Roadside.

Premiums written increased 2.7% or $18 million in the second quarter of 2024 and increased 2.0% or $26 million in the first six months of 2024 compared to the same periods of 2023, primarily due to growth at Allstate Protection Plans, partially offset by lower sales at Allstate Dealer Services and Allstate Roadside.

PIF increased 8.4% or 12 million as of June 30, 2024 compared to June 30, 2023 due to growth at Allstate Protection Plans.

Other revenue increased 16.7% or $14 million in the second quarter of 2024 and increased 8.9% or $15 million in the first six months of 2024 compared to the same periods of 2023, primarily due to higher revenue from increased customer advertising at Arity.

Intersegment premiums and service fees increased 11.4% or $4 million in the second quarter of 2024 and increased 8.8% or $6 million in the first six months of 2024 compared to the same periods of 2023, driven by increased software revenue at Arity.

Second Quarter 2024 Form 10-Q 61

Segment Results Protection Services

Claims and claims expense increased 2.6% or $4 million in the second quarter 2024 and increased 2.9% or $9 million in the first six months of 2024 compared to the same periods of 2023, primarily driven by growth at Allstate Protection Plans, partially offset by lower claim severity at Allstate Roadside.

Amortization of DAC increased 14.3% or $37 million in the second quarter of 2024 and increased 14.7% or $75 million in the first six months of 2024 compared to the same periods of 2023, driven by growth at Allstate Protection Plans.

Operating costs and expenses increased 12.8% or $28 million in the second quarter of 2024 and increased 9.3% or $41 million in the first six months of 2024 compared to the same periods of 2023, primarily due to growth at Allstate Protection Plans and Arity, partially offset by lower expenses at Allstate Roadside.

Premiums written increased 3.0% or $20 million in the third quarter of 2024 compared to the third quarter of 2023, primarily due to growth at Allstate Protection Plans, partially offset by lower sales at Allstate Roadside.

Premiums written increased 2.4% or $46 million in the first nine months of 2024 compared to the same periods of 2023, primarily due to growth at Allstate Protection Plans, partially offset by lower sales at Allstate Dealer Services and Allstate Roadside.

Adjusted net income increased 114.8% or $31 million in the third quarter of 2024 compared to the third quarter of 2023, primarily due to revenue growth and improved claim frequency at Allstate Protection Plans.

Adjusted net income increased 63.7% or $65 million in the first nine months of 2024 compared to the same periods of 2023, due to growth at Allstate Protection Plans and improved claim severity at Allstate Roadside.

PIF increased 10.6% or 16 million as of September 30, 2024 compared to September 30, 2023 due to growth at Allstate Protection Plans.

Other revenue increased 46.7% or $35 million in the third quarter of 2024 and increased 20.6% or $50 million in the first nine months of 2024 compared to the same periods of 2023, primarily due to higher revenue from increased customer advertising at Arity.

Intersegment premiums and service fees increased 44.1% or $15 million in the third quarter of 2024 due to increased advertising at Arity and increased 20.6% or $21 million in the first nine months of 2024 compared to the same periods of 2023, driven by increased advertising and higher software revenue at Arity.

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Allstate Health and Benefits Segment Results

Protection Services Segment Results

Claims and claims expense in the third quarter of 2024 were comparable to the third quarter of 2023.

Claims and claims expense increased 1.9% or $9 million in the first nine months of 2024 compared to the same periods of 2023, primarily driven by growth at Allstate Protection Plans, partially offset by improved margins at Allstate Protection Plans due to lower frequency and lower claim severity at Allstate Roadside.

Amortization of DAC increased 13.0% or $35 million in the third quarter of 2024 and increased 14.1% or $110 million in the first nine months of 2024 compared to the same periods of 2023, driven by growth at Allstate Protection Plans.

Operating costs and expenses increased 24.4% or $55 million in the third quarter of 2024 and increased 14.5% or $96 million in the first nine months of 2024 compared to the same periods of 2023, primarily due to growth at Arity and Allstate Protection Plans, partially offset by lower expenses at Allstate Roadside and Allstate Identity Protection.

Third Quarter 2024 Form 10-Q 63

Segment Results Allstate Health and Benefits

Allstate Health and Benefits Segment

On August 13, 2024, we entered into a share 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, reported within this segment.

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

Summarized financial information

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

11 unchanged sentences

63.4 54.9 61.1 55.1

Employer voluntary benefits (2)

$ 19 $ 28 $ 64 $ 76

Group health and individual health (3) (4)

Adjusted net income $ 37 $ 69 $ 151 $ 182

Policies in force

2 unchanged sentences

Individual health (4)

Policies in force as of June 30 (in thousands) 4,181 4,273

(1) Benefit ratio is calculated as accident, health and other policy benefits less interest credited to contractholder funds of $8 million and $9 million for the three months ended June 30, 2024 and 2023, respectively, and $17 million for both the six months ended June 30, 2024 and 2023, divided by premiums and contract charges.

Policies in force as of September 30 (in thousands) 4,158 4,256

(1) Benefit ratio is calculated as accident, health and other policy benefits less interest credited to contractholder funds of $8 million for both the three months ended September 30, 2024 and 2023, and $25 million for both the nine months ended September 30, 2024 and 2023, divided by premiums and contract charges.

(2) Employer voluntary benefits include supplemental life and health products offered through workplace enrollment.

1 unchanged sentence

(4) Individual health includes short-term medical and other health products sold directly to individuals.

Adjusted net income increased $1 million in the second quarter of 2024 compared to the same period of 2023, primarily due to an increase in group health and employer voluntary benefits, partially offset by a decline in individual health.

Adjusted net income increased $1 million in the first six months of 2024 compared to the same period of 2023, primarily due to an increase in group health.

Premiums and contract charges increased 4.6% or $21 million in the second quarter of 2024 and increased 3.9% or $36 million in the first six months of 2024 compared to the same periods of 2023, primarily due to growth in group health and individual health.

The increase in the first six months of 2024 was partially offset by a decline in employer voluntary benefits.

Premiums and contract charges increased 5.2% or $24 million in the third quarter of 2024 and increased 4.4% or $60 million in the first nine months of 2024 compared to the same periods of 2023, primarily due to growth in individual health and group health, partially offset by a decline in employer voluntary benefits.

Adjusted net income decreased $32 million and $31 million in the third quarter and first nine months of 2024, respectively, compared to the same periods of 2023, primarily due to increased benefit utilization across all lines of business.

Premiums and contract charges by line of business

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

Premiums and contract charges $ 487 $ 463 $ 1,439 $ 1,379

Other revenue increased $20 million in the second quarter of 2024 and increased $53 million in the first six months of 2024 compared to the same periods of 2023, primarily due to an increase in individual health and group health administrative fees.

Accident, health and other policy benefits increased 12.8% or $33 million in the second quarter of 2024 and increased 12.2% or $64 million in the first six months of 2024 compared to the same periods of 2023, primarily from growth in group health and individual health and higher benefit utilization.

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

Second Quarter 2024 Form 10-Q 63

Segment Results Allstate Health and Benefits

Benefit ratio increased 4.7 points to 59.7 in the second quarter of 2024 compared to 55.0 in the second quarter of 2023 and increased 4.7 points to 59.9 in the first six months of 2024 compared to 55.2 in the same period of 2023, primarily due to higher benefit utilization in individual health and group health.

Amortization of DAC decreased 5.9% or $2 million in the second quarter of 2024 and decreased 1.3% or $1 million in the first six months of 2024 compared to the same periods of 2023.

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Allstate Health and Benefits Segment Results

Other revenue increased $19 million in the third quarter of 2024 and increased $72 million in the first nine months of 2024 compared to the same periods of 2023, primarily due to an increase in individual health and group health administrative fees.

Accident, health and other policy benefits increased 21.0% or $55 million in the third quarter of 2024 and increased 15.2% or $119 million in the first nine months of 2024 compared to the same periods of 2023, primarily from higher benefit utilization in all businesses and growth in group health and individual health.

Accident, health and other policy benefits include changes in the reserve for future policy benefits,

expected development on reported claims, and reserves for incurred but not reported claims as shown in Note 10.

Benefit ratio increased 8.6 points to 63.4 in the third quarter of 2024 compared to 54.9 in the third quarter of 2023 and increased 6.0 points to 61.1 in the first nine months of 2024 compared to 55.1 in the same period of 2023, primarily due to higher claims experience across all lines of business.

Amortization of DAC decreased 5.1% or $2 million in the third quarter of 2024 and decreased 2.6% or $3 million in the first nine months of 2024 compared to the same periods of 2023.

Operating costs and expenses

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

($ in millions) 2024 2023 2024 2023

($ in millions) Employer voluntary benefits

Group health and individual health

Three months ended September 30, 2024

Non-deferrable commissions

General and administrative expenses 138 132 272 256

Total operating costs and expenses $ 224 $ 210 $ 449 $ 413

Operating costs and expenses increased $14 million in the second quarter of 2024 and increased $36 million in the first six months of 2024 compared to the same periods of 2023, primarily due to growth in individual health and group health.

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$ 20 $ 60 $ 80

Operating costs and expenses

Total $ 76 $ 156 $ 232

Nine months ended September 30, 2024

Non-deferrable commissions

$ 64 $ 193 $ 257

Operating costs and expenses

Total $ 222 $ 459 $ 681

Three months ended September 30, 2023

Non-deferrable commissions

$ 19 $ 47 $ 66

Operating costs and expenses

Total $ 70 $ 127 $ 197

Nine months ended September 30, 2023

Non-deferrable commissions

$ 66 $ 157 $ 223

Operating costs and expenses

Total $ 218 $ 392 $ 610

Operating costs and expenses increased $35 million in the third quarter of 2024 and increased $71 million in the first nine months of 2024 compared to the same periods of 2023, primarily due to growth in individual and group health.

Third Quarter 2024 Form 10-Q 65

Portfolio composition and strategy by reporting segment (1)

June 30, 2024

September 30, 2024

($ in millions) Property-Liability Protection Services

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(2) Fixed income securities are carried at fair value.

Amortized cost, net for these securities was $48.72 billion, $2.00 billion, $1.96 billion, $1.11 billion and $53.79 billion for Property-Liability, Protection Services, Allstate Health and Benefits, Corporate and Other, and in total, respectively.

Amortized cost, net for these securities was $49.91 billion, $2.06 billion, $359 million, $1.12 billion and $53.45 billion for Property-Liability, Protection Services, Allstate Health and Benefits, Corporate and Other, and in total, respectively.

(3) Equity securities are carried at fair value.

The fair value of equity securities held as of June 30, 2024, was $213 million in excess of cost.

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

Equity securities include $715 million of funds with underlying investments in fixed income securities as of June 30, 2024.

The fair value of equity securities held as of September 30, 2024, was $262 million in excess of cost.

These net gains were primarily concentrated in the technology, equity index funds and banking sectors.

Equity securities include $633 million of funds with underlying investments in fixed income securities as of September 30, 2024.

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

Investments totaled $70.60 billion as of June 30, 2024, increasing from $66.68 billion as of December 31, 2023, primarily due to positive operating cash flows, partially offset by lower fixed income valuations and dividends to shareholders.

Investments totaled $73.60 billion as of September 30, 2024, increasing from $66.68 billion as of December 31, 2023, primarily due to positive operating cash flows and higher fixed income valuations.

Portfolio composition by investment strategy We utilize two primary strategies to manage risks and returns and to position our portfolio to take advantage of market opportunities while attempting to mitigate adverse effects.

4 unchanged sentences

Portfolio composition by investment strategy

June 30, 2024

September 30, 2024

($ in millions) Market-

13 unchanged sentences

Total $ 510 $ 1 $ 511

Second Quarter 2024 Form 10-Q 65

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Fixed income securities

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Fair value as of

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

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

government and agencies $ 9,246 $ 8,619

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

As of June 30, 2024, 91.4% of the consolidated fixed income securities portfolio was rated investment grade.

As of September 30, 2024, 91.4% of the consolidated fixed income securities portfolio was rated investment grade.

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

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For further detail on our fixed income portfolio monitoring process, see Note 5 of the condensed consolidated financial statements.

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Third Quarter 2024 Form 10-Q 67

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

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

June 30, 2024

September 30, 2024

NAIC 1 NAIC 2 NAIC 3

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For further detail on our mortgage loan portfolio, see Note 5 of the condensed consolidated financial statements.

Limited partnership interests include $7.43 billion of interests in private equity funds, $1.14 billion of interests in real estate funds and $162 million of interests in other funds as of June 30, 2024.

We have commitments to invest additional amounts in limited partnership interests totaling $2.99 billion as of June 30, 2024.

Other investments include $149 million of bank loans, net, and $708 million of direct investments in real estate as of June 30, 2024.

Second Quarter 2024 Form 10-Q 67

Limited partnership interests include $7.53 billion of interests in private equity funds, $1.25 billion of interests in real estate funds and $148 million of interests in other funds as of September 30, 2024.

We have commitments to invest additional amounts in limited partnership interests totaling $3.18 billion as of September 30, 2024.

Other investments include $187 million of bank loans, net, and $677 million of direct investments in real estate as of September 30, 2024.

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Unrealized net capital gains (losses)

June 30, December 31,

September 30, December 31,

($ in millions) 2024 2023

7 unchanged sentences

Equity method of accounting (“EMA”) limited partnerships — (4)

Investments classified as held for sale (50) —

Unrealized net capital gains and losses, pre-tax $ 461 $ (791)

2 unchanged sentences

Gross unrealized Fair

June 30, 2024

September 30, 2024

$ 4,417 $ 110 $ (49) $ 4,478

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Consumer goods (cyclical and non-cyclical) 7,459 171 (106) 7,524

Financial services 2,294 8 (77) 2,225

Energy 3,020 73 (28) 3,065

Financial services 2,302 43 (37) 2,308

Technology 2,909 47 (72) 2,884

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Consumer goods (cyclical and non-cyclical) 6,813 93 (251) 6,655

Financial services 2,111 17 (88) 2,040

Energy 2,645 35 (63) 2,617

Financial services 2,111 17 (88) 2,040

Technology 2,800 21 (153) 2,668

8 unchanged sentences

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

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Third Quarter 2024 Form 10-Q 69

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

1 unchanged sentence

Equity securities by sector

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

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

17 unchanged sentences

Total equity securities $ 1,829 $ 262 $ 2,091 $ 2,244 $ 167 $ 2,411

(1) As of June 30, 2024, other is generally comprised of consumer goods and communications sectors.

(1) As of September 30, 2024, other is generally comprised of consumer goods and communications sectors.

Net investment 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

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Investment income, before expense $ 863 $ 771 $ 2,488 $ 2,102

Net investment income increased $102 million in the second quarter of 2024, primarily due to higher market-based investment results, partially offset by lower performance-based investment results.

Net investment income increased $291 million in the first six months of 2024 compared to the same period of 2023, due to higher market-based and performance-based investment results.

Net investment income increased $94 million in the third quarter of 2024, primarily due to higher market-based investment results, partially offset by lower performance-based investment results.

Net investment income increased $385 million in the first nine months of 2024 compared to the same period of 2023, due to higher market-based investment results.

Market-based results continue to benefit from portfolio repositioning into higher yielding fixed income securities and higher investment balances.

Second Quarter 2024 Form 10-Q 69

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Performance-based investment 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

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

Performance-based investment income decreased $20 million in the second quarter of 2024 compared to the same period of 2023 primarily due to lower real estate investments results.

Performance-based investment income increased $55 million in the first six months of 2024 compared to the same period of 2023, primarily due to higher private equity valuation increases.

Performance-based investment income decreased $43 million in the third quarter of 2024 compared to the same period of 2023 primarily due to lower real estate investments results.

Performance-based investment income increased $12 million in the first nine months of 2024 compared to the same period of 2023, primarily due to private equity valuation increases offset by lower real estate investment results, inclusive of investee level expenses.

Performance-based investment results and income can vary significantly between periods and are influenced by economic conditions, equity market performance, comparable public company earnings multiples, capitalization rates, operating performance of the underlying investments and the timing of asset sales.

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

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

9 unchanged sentences

Net gains (losses) on investments and derivatives, pre-tax 243 (86) (24) (223)

Income tax benefit 22 35 58 29

Income tax (expense) benefit (54) 19 4 48

Net gains (losses) on investments and derivatives, after-tax $ 189 $ (67) $ (20) $ (175)

9 unchanged sentences

Net gains (losses) on investments and derivatives, pre-tax $ 243 $ (86) $ (24) $ (223)

(1) Includes $123 million loss for the six months ended 2024 related to the carrying value of the surplus notes issued by Adirondack Insurance Exchange and New Jersey Skylands Insurance Association (together “Reciprocal Exchanges”).

(1) Includes $123 million loss for the nine months ended 2024 related to the carrying value of the surplus notes issued by Adirondack Insurance Exchange and New Jersey Skylands Insurance Association (together “Reciprocal Exchanges”).

See Note 8 for further details.

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

Net losses on investments and derivatives in the second quarter of 2024 primarily related to losses on sales of fixed income securities, partially offset by valuation gains on equity securities.

Net losses in the first six months of 2024 primarily related to losses on sales of fixed income securities and a loss recognized related to surplus notes issued by the Reciprocal Exchanges, partially offset by valuation gains on equity securities.

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

Net losses on valuation change and settlements of derivatives of $15 million and $23 million in the second quarter and first six months of 2024, respectively, primarily related to net losses on interest rate futures used to manage duration and net losses on equity

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futures used to manage equity exposure, partially offset by gains on foreign currency contracts used to manage foreign currency risk.

Net gains on investments and derivatives in the third quarter of 2024 primarily related to valuation gains on equity investments and gains on sales of fixed income securities.

Net losses in the first nine months of 2024 primarily related to a loss recognized related to surplus notes issued by the Reciprocal Exchanges and losses on sales of fixed income securities, partially offset by valuation gains on equity securities.

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

Net gains on valuation change and settlements of derivatives of $20 million in the third quarter of 2024 primarily related to net gains on interest rate futures used to manage duration, partially offset by losses on foreign currency contracts used to manage foreign

Third Quarter 2024 Form 10-Q 71

currency risk.

Net losses of $3 million for the first nine months of 2024 primarily related to net losses on equity futures used to manage equity exposure and losses on foreign currency contracts used to manage

foreign currency risk, partially offset by net gains on rate futures used to manage duration.

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

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

4 unchanged sentences

Total performance-based $ 12 $ 80 $ 29 $ 70

Net losses on performance-based investments and derivatives in the second quarter of 2024 primarily included a credit loss related to real estate, partially offset by increased valuation of equity investments.

Net gains on performance-based investments and derivatives in the first six months of 2024, primarily related to increased valuation of equity investments and valuation change and settlements of derivatives, partially offset by a credit loss related to real estate.

Second Quarter 2024 Form 10-Q 71

Net gains on performance-based investments and derivatives in the third quarter of 2024 primarily included increased valuation of equity investments, partially offset by losses on valuation change and settlements of derivatives.

Net gains on performance-based investments and derivatives in the first nine months of 2024, primarily related to increased valuation of equity investments, partially offset by credit losses.

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Capital Resources and Liquidity

2 unchanged sentences

Capital resources

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

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

Preferred stock, common stock, treasury stock, retained income and other shareholders’ equity items $ 20,626 $ 18,470

Accumulated other comprehensive loss (1,026) (700)

Accumulated other comprehensive income (loss) 251 (700)

Total Allstate shareholders’ equity 20,877 17,770

3 unchanged sentences

Ratio of debt to capital resources 27.9 30.9

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

In the six months ended June 30, 2024, we paid dividends of $476 million and $59 million related to our common and preferred shares, respectively.

Allstate shareholders’ equity increased in the first nine months of 2024, primarily due to net income and unrealized net capital gains, partially offset by dividends to shareholders.

In the nine months ended September 30, 2024, we paid dividends of $719 million and $88 million related to our common and preferred shares, respectively.

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

9 unchanged sentences

Total long-term debt principal $ 8,141

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

A new common share repurchase program has not been authorized as of June 30, 2024.

Common shareholder dividends On January 2, 2024 and April 1, 2024, we paid a common shareholder dividend of $0.89 and $0.92, respectively.

On May 14, 2024, we declared a common shareholder dividend of $0.92 payable on July 1, 2024.

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

A new common share repurchase program has not been authorized as of September 30, 2024.

Common shareholder dividends On January 2, 2024, April 1, 2024, and July 1, 2024, we paid a common shareholder dividend of $0.89, $0.92 and $0.92, respectively.

On July 17, 2024, we declared a common shareholder dividend of $0.92 payable on October 1, 2024.

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

2 unchanged sentences

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

In May 2024, S&P affirmed the Corporation’s debt and short-term issuer ratings of BBB+ and A-2, respectively, and the insurance financial strength rating of A+ for AIC.

In May 2024, S&P affirmed The Allstate Corporation’s (the “Corporation”) senior debt and short-term issuer ratings of BBB+ and A-2, respectively, and Allstate Insurance Company’s (“AIC”) insurance financial strength rating of A+.

The outlook for the ratings is stable.

Since December 31, 2023, A.M.

Best and Moody’s have not affirmed or changed any of the Corporation’s ratings.

In August 2024, A.M.

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

The outlook for the ratings is stable.

In October 2024, Moody’s affirmed the Corporation’s senior debt and short-term issuer ratings of A3 and P-2, respectively, and AIC’s insurance financial strength rating of Aa3.

The outlook for the ratings is negative.

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

5 unchanged sentences

The Liquidity Agreement does not establish a commitment to advance funds on the part of any party.

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

AIC serves as a lender and borrower, certain other subsidiaries

Third Quarter 2024 Form 10-Q 73

Capital Resources and Liquidity

serve only as borrowers, and the Corporation serves only as a lender.

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

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

The amount of intercompany loans

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Capital Resources and Liquidity

available to the Corporation’s subsidiaries is at the discretion of the Corporation.

The amount of intercompany loans available to the Corporation’s subsidiaries is at the discretion of the Corporation.

The maximum amount of loans the Corporation will have outstanding to all its eligible subsidiaries at any given point in time is limited to $1.00 billion.

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

Parent company capital capacity At the parent holding company level, we have deployable assets totaling $2.99 billion as of June 30, 2024, primarily comprised of cash and short-term, fixed income and equity securities that are generally saleable within one quarter.

Parent company capital capacity At the parent holding company level, we have deployable assets totaling $2.95 billion as of September 30, 2024, primarily comprised of cash and short-term, fixed income and equity securities that are generally saleable within one quarter.

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

As of June 30, 2024, we held $17.95 billion of cash, U.S.

As of September 30, 2024, we held $10.60 billion of cash, U.S.

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

Intercompany dividends of $18 million were paid from North Light Specialty Insurance Company to AIC in the first six months of 2024.

Intercompany dividends were paid in the first nine months of 2024 between the following companies:

American Heritage Life (“AHL”), Allstate Financial Insurance Holdings Corporation (“AFIHC”), the Corporation, North Light Specialty Insurance Company (“NLSIC”) and AIC.

Intercompany dividends

($ in millions)

AHL to AFIHC $ 130

AFIHC to the Corporation 130

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

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

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

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

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

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

In the first nine months of

2024, we did not defer interest payments on the subordinated debentures.

Additional resources to support liquidity are as follows:

5 unchanged sentences

This facility has a financial covenant requiring that we not exceed a 37.5% debt to capitalization ratio as defined in the agreement.

This ratio was 22.8% as of June 30, 2024.

This ratio was 22.0% as of September 30, 2024.

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

1 unchanged sentence

• To cover short-term cash needs, the Corporation has access to a commercial paper facility with a borrowing capacity limited to any undrawn credit facility balance up to $750 million.

• As of June 30, 2024, there were no balances outstanding for the credit facility or the commercial paper facility and therefore the remaining borrowing capacity was $750 million.

• As of September 30, 2024, there were no balances outstanding for the credit facility or the commercial paper facility and therefore the remaining borrowing capacity was $750 million.

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

We can use this shelf registration to issue an unspecified amount of debt securities, common stock (including 636 million shares of treasury stock as of June 30, 2024), preferred stock, depositary shares, warrants, stock purchase contracts and stock purchase units.

We can use this shelf registration to issue an unspecified amount of debt securities, common stock (including 635 million shares of treasury stock as of September 30, 2024), preferred stock, depositary shares, warrants, stock purchase contracts and stock purchase units.

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

Second Quarter 2024 Form 10-Q 73

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Forward-Looking Statements

43 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis