ALLSTATE CORP 10-Q

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations Overview The following discussion highlights significant factors influencing the consolidated financial position and results of operations of The Allstate Corporation (referred to in this document as “we,” “our,” “us,” the “Company” or “Allstate”). It should be read in conjunction with the condensed consolidated financial statements and related notes thereto found under Part I. Item 1. contained herein, and with the discussion, analysis, consolidated financial statements and notes thereto in Part I. Item 1. and Part II. Item 7. and Item 8. of The Allstate Corporation annual report on Form 10-K for 2024, filed February 24, 2025. 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. Measuring segment profit or loss The measure of segment profit or loss used in evaluating performance is underwriting income for the Allstate Protection and Run-off Property-Liability segments and adjusted net income for the Protection Services, Allstate Health and Benefits and Corporate and Other segments. We use these measures in our evaluation of results of operations to analyze profitability. Underwriting income is calculated as premiums earned and other revenue, less claims and claims expense (“losses”), amortization of deferred policy acquisition costs (“DAC”), operating costs and expenses, amortization or impairment of purchased intangibles and restructuring and related charges, as determined using accounting principles generally accepted in the United States of America (“GAAP”). Adjusted net income (loss) is net income (loss) applicable to common shareholders, excluding: • Net gains and losses on investments and derivatives • Pension and other postretirement remeasurement gains and losses • Amortization or impairment of purchased intangibles • Gain or loss on disposition • Adjustments for other significant non-recurring, infrequent or unusual items, when (a) the nature of the charge or gain is such that it is reasonably unlikely to recur within two years, or (b) there has been no similar charge or gain within the prior two years • Income tax expense or benefit on reconciling items 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, conflict in the Middle East, the Russia/Ukraine conflict, supply chain disruptions and labor shortages. Tariffs Beginning on April 2, 2025, the U.S. government announced additional tariffs on goods imported to the U.S. These actions are expected to impact the results of our operations. Depending on the severity of these actions, the following may impact operations: • Higher new and used vehicle pricing, increasing claims costs in Allstate Protection, Protection Plans and Dealer Services • Adverse impact on investment valuations on fixed income securities, equity securities and performance-based investments • Declines in auto new issued applications due to lower car sales • Reduced demand in Allstate Dealer Services due to lower new car sales • Lower premiums written from reduced retail sales in Allstate Protection Plans • Bad debt and credit allowance exposure This is not inclusive of all potential impacts and should not be treated as such. Corporate strategy Our strategy has two components: increase personal property-liability market share and expand protection offerings by leveraging the Allstate brand, customer base and capabilities. Transformative Growth is about creating a business model, capabilities and culture that continually transform to better serve customers. This is done by providing affordable, simple and connected protection through multiple distribution methods. The ultimate objective is to enhance customer value to drive growth in all businesses. In the personal property-liability businesses, this has five key components: • Improving customer value • Expanding customer access • Increasing sophistication and investment in customer acquisition • Deploying new technology ecosystems • Driving organizational transformation We are expanding Protection Services businesses by leveraging the Allstate brand, customer base and capabilities. Dispositions 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 (“EVB”) business for approximately $2.0 billion in cash. The employer First Quarter 2025 Form 10-Q 43 voluntary benefits business continues to be reported in the Allstate Health and Benefits segment, and the assets and liabilities of the business are classified as held for sale. The transaction closed on April 1, 2025, and we expect to record a gain on the sale of approximately $625 million in the second quarter of 2025. On January 30, 2025, Allstate entered into an agreement with Nationwide Life Insurance Company to sell Direct General Life Insurance Company, NSM Sales Corporation and The Association Benefits Solution, LLC, comprising the group health business for approximately $1.25 billion in cash, adjusted for the closing balance sheet. The group health business continues to be reported in the Allstate Health and Benefits segment, and beginning in the first quarter of 2025, the assets and liabilities of the business are classified as held for sale. The transaction is expected to close in 2025, subject to regulatory approvals and other customary closing conditions. The transaction price for the group health business, less costs to sell, exceeds the carrying value of net assets related to this transaction, resulting in an expected gain of approximately $450 million that will be recognized at closing of the transaction. The ultimate amount of the anticipated gain on the sale will be impacted by purchase price adjustments associated with certain pre-close transactions, changes in the carrying value of net assets, changes in accumulated other comprehensive income and the related tax effects. See Note 3 of the condensed consolidated financial statements for further information on the employer voluntary benefits and group health dispositions. Consolidated net income (loss) applicable to common shareholders ($ in millions) Consolidated net income applicable to common shareholders decreased 52.4% to $566 million in the first quarter of 2025 compared to the first quarter of 2024, primarily due to higher catastrophe and realized capital losses. Total revenues ($ in millions) Total revenues increased 7.8% to $16.45 billion in the first quarter of 2025 compared to the first quarter of 2024, primarily due to premium rate increases and higher homeowners insurance policies in force. Net investment income ($ in millions) Net investment income increased $90 million to $854 million in the first quarter of 2025, due to higher market-based investment results. Financial highlights Investments totaled $74.05 billion as of March 31, 2025, increasing from $72.61 billion as of December 31, 2024. Allstate shareholders’ equity was $22.06 billion as of March 31, 2025, increasing from $21.44 billion as of December 31, 2024, primarily due to net income and lower unrealized net capital losses on investments, partially offset by dividends to shareholders. 44 www.allstate.com Book value per diluted common share (ratio of Allstate common shareholders’ equity to total common shares outstanding and dilutive potential common shares outstanding) was $74.61 as of March 31, 2025, an increase of 19.8% from $62.27 as of March 31, 2024, and an increase of 3.1% from $72.35 as of December 31, 2024. Return on average Allstate common shareholders’ equity for the twelve months ended March 31, 2025, was 21.4%, an increase of 13.8 points from 7.6% for the twelve months ended March 31, 2024. The increase was primarily due to higher net income applicable to common shareholders for the trailing twelve-month period ending March 31, 2025. Summarized consolidated financial results Three months ended March 31, ($ in millions) 2025 2024 Revenues Property and casualty insurance premiums $ 14,698 $ 13,512 Accident and health insurance premiums and contract charges 487 478 Other revenue 762 669 Net investment income 854 764 Net gains (losses) on investments and derivatives (349) (164) Total revenues 16,452 15,259 Costs and expenses Property and casualty insurance claims and claims expense (10,815) (9,501) Accident, health and other policy benefits (333) (296) Amortization of deferred policy acquisition costs (2,087) (1,939) Operating, restructuring and interest expenses (2,361) (1,992) Pension and other postretirement remeasurement gains (losses) (78) 2 Amortization of purchased intangibles (59) (69) Total costs and expenses (15,733) (13,795) Income from operations before income tax expense 719 1,464 Income tax expense (123) (266) Net income 596 1,198 Less: Net income (loss) attributable to noncontrolling interest 1 (20) Net income attributable to Allstate 595 1,218 Preferred stock dividends (29) (29) Net income applicable to common shareholders $ 566 $ 1,189 Segment highlights Allstate Protection underwriting income was $364 million in the first quarter of 2025 compared to $903 million in the first quarter of 2024, due to higher catastrophe losses, partially offset by increased premiums earned. Catastrophe losses were $2.20 billion in the first quarter of 2025 compared to $731 million in the first quarter of 2024. Premiums written increased 8.5% to $14.30 billion in the first quarter of 2025 compared to the same period of 2024, reflecting higher premiums in auto and homeowners insurance and higher homeowners insurance policies in force. Protection Services adjusted net income was $55 million in the first quarter of 2025 compared to $54 million in the first quarter of 2024, primarily due to premium growth at Allstate Protection Plans, partially offset by higher expenses due to growth at Arity and higher loss costs at Dealer Services. Premiums and other revenue increased 14.6% to $799 million in the first quarter of 2025 compared to the same period of 2024, primarily due to growth at Allstate Protection Plans and higher lead generation revenue at Arity. Allstate Health and Benefits adjusted net income was $30 million in the first quarter of 2025 compared to adjusted net income of $56 million in the first quarter of 2024. The decline was primarily due to increased benefit utilization in group health and individual health, partially offset by lower benefit utilization and expenses in employer voluntary benefits. Premiums and contract charges increased 1.9% to $487 million in the first quarter of 2025 compared to the same period of 2024, primarily due to growth in individual health and group health, partially offset by a decline in employer voluntary benefits. First Quarter 2025 Form 10-Q 45 Property-Liability Operations Property-Liability Operations Overview Property-Liability operations consist of two reportable segments: Allstate Protection and Run-off Property-Liability. These segments are consistent with the groupings of financial information that management uses to evaluate performance and to determine the allocation of resources. We do not allocate Property-Liability investment income, net gains and losses on investments and derivatives, or assets to the Allstate Protection and Run-off Property-Liability segments. Management reviews assets at the Property-Liability level for decision-making purposes. GAAP operating ratios are used to measure our profitability to enhance an investor’s understanding of our financial results and are calculated as follows: • Loss ratio: the ratio of claims and claims expense (loss adjustment expenses), to premiums earned. Loss ratios include the impact of catastrophe losses and prior year reserve reestimates. • Expense ratio: the ratio of amortization of DAC, operating costs and expenses, amortization or impairment of purchased intangibles and restructuring and related charges, less other revenue to premiums earned. • Combined ratio: the sum of the loss ratio and the expense ratio. We have also calculated the following impacts of specific items on the GAAP operating ratios because of the volatility of these items between periods. The impacts are calculated by taking the specific items noted below divided by Property-Liability premiums earned: • Effect of catastrophe losses on combined ratio: includes catastrophe losses and prior year reserve reestimates of catastrophe losses included in claims and claims expense • Effect of prior year reserve reestimates on combined ratio • Effect of amortization of purchased intangibles on combined ratio • Effect of restructuring and related charges on combined ratio • Effect of Run-off Property-Liability business on combined ratio: includes claims and claims expense, restructuring and related charges and operating costs and expenses in the Run-off Property-Liability segment Premium measures and statistics are used to analyze our premium trends and are calculated as follows: • PIF : policy counts are based on items rather than customers. A multi-car customer would generate multiple item (policy) counts, even if all cars were insured under one policy. Lender-placed policies are excluded from policy counts because relationships are with the lenders. • New issued applications : item counts of automobile or homeowner insurance applications for insurance policies that were issued during the period, regardless of whether the customer was previously insured by another Allstate brand. • Average premium - gross written (“average premium”): gross premiums written divided by issued item count. Gross premiums written include the impacts from discounts, surcharges and ceded reinsurance premiums and exclude the impacts from mid-term premium adjustments and premium refund accruals. Average premiums represent the appropriate policy term for each line. • Implemented rate changes: represents the impact in the locations (U.S. states, the District of Columbia or Canadian provinces) where rate changes were implemented during the period as a percentage of total prior year-end premiums written. 46 www.allstate.com Property-Liability Operations Underwriting results Three months ended March 31, ($ in millions, except ratios) 2025 2024 Premiums written $ 14,297 $ 13,183 Premiums earned $ 14,027 $ 12,900 Other revenue 488 430 Claims and claims expense (10,660) (9,349) Amortization of DAC (1,732) (1,608) Other costs and expenses (1,701) (1,417) Restructuring and related charges (1) (16) (7) Amortization of purchased intangibles (46) (51) Underwriting income $ 360 $ 898 Catastrophe losses Catastrophe losses, excluding reserve reestimates $ 2,218 $ 893 Catastrophe reserve reestimates (2) (16) (162) Total catastrophe losses $ 2,202 $ 731 Non-catastrophe reserve reestimates (2) $ (235) $ 11 Prior year reserve reestimates (2) (251) (151) GAAP operating ratios Loss ratio 76.0 72.4 Expense ratio (3) 21.4 20.6 Combined ratio 97.4 93.0 Effect of catastrophe losses on combined ratio 15.7 5.7 Effect of prior year reserve reestimates on combined ratio (1.8) (1.2) Effect of catastrophe losses included in prior year reserve reestimates on combined ratio (0.1) (1.3) Effect of restructuring and related charges on combined ratio (1) 0.1 0.1 Effect of amortization of purchased intangibles on combined ratio 0.3 0.3 Effect of Run-off Property-Liability business on combined ratio — — (1) Restructuring and related charges for the first quarter of 2025 primarily relate to streamlining the organization and outsourcing certain aspects of operations. See Note 13 of the condensed consolidated financial statements for additional details. (2) Favorable reserve reestimates are shown in parentheses. (3) Other revenue is deducted from operating costs and expenses in the expense ratio calculation. First Quarter 2025 Form 10-Q 47 Segment Results Allstate Protection Allstate Protection Segment Underwriting results Three months ended March 31, ($ in millions) 2025 2024 Premiums written $ 14,297 $ 13,183 Premiums earned $ 14,027 $ 12,900 Other revenue 488 430 Claims and claims expense (10,657) (9,345) Amortization of DAC (1,732) (1,608) Other costs and expenses (1,700) (1,416) Restructuring and related charges (16) (7) Amortization of purchased intangibles (46) (51) Underwriting income $ 364 $ 903 Catastrophe losses $ 2,202 $ 731 Underwriting income decreased 59.7% or $539 million in the first quarter of 2025 compared to the first quarter of 2024 due to higher catastrophe losses, partially offset by increased premiums earned. Change in underwriting results from prior year period - three months ended ($ in millions) Underwriting income (loss) Three months ended March 31, ($ in millions) 2025 2024 Auto $ 816 $ 351 Homeowners (451) 564 Other personal lines (65) 7 Commercial lines 16 (70) Other business lines (1) 41 48 Answer Financial 7 3 Total $ 364 $ 903 (1) Represents commissions earned and other costs and expenses for Ivantage, non-proprietary life and annuity products and lender-placed products. 48 www.allstate.com Allstate Protection Segment Results Premium measures and statistics include PIF, new issued applications and average premiums to analyze our premium trends. Premiums written is the amount of premiums charged for policies issued during a reporting period. Premiums are considered earned and are included in the financial results on a pro-rata basis over the policy period. 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 Three months ended March 31, ($ in millions) 2025 2024 Auto $ 9,848 $ 9,357 Homeowners 3,453 2,874 Other personal lines 729 660 Commercial lines 94 157 Other business lines 173 135 Total premiums written $ 14,297 $ 13,183 Premiums earned Three months ended March 31, ($ in millions) 2025 2024 Auto $ 9,347 $ 8,778 Homeowners 3,657 3,154 Other personal lines 741 659 Commercial lines 113 169 Other business lines 169 140 Total premiums earned $ 14,027 $ 12,900 Reconciliation of premiums written to premiums earned Three months ended March 31, ($ in millions) 2025 2024 Total premiums written $ 14,297 $ 13,183 (Increase) decrease in unearned premiums (272) (237) Other 2 (46) Total premiums earned $ 14,027 $ 12,900 Policies in force As of March 31, (In thousands) 2025 2024 Auto 25,100 25,207 Homeowners 7,549 7,364 Other personal lines 4,874 4,849 Commercial lines 189 273 Total 37,712 37,693 Auto insurance premiums written increased 5.2% or $491 million in the first quarter of 2025 compared to the first quarter of 2024, primarily due to the following factors: • Increased Allstate brand average premiums driven by rate increases. In the three months ended March 31, 2025, rate increases of 4.3% were implemented in 32 locations, resulting in total insurance premium impact of 1.4% • In locations not achieving acceptable returns, we expect to continue to pursue targeted rate increases. In states where we are achieving acceptable returns, we plan to implement rates that keep pace with increasing costs • PIF decreased 0.4% or 107 thousand to 25,100 thousand as of March 31, 2025 compared to March 31, 2024 • Increased new issued applications in all channels First Quarter 2025 Form 10-Q 49 Segment Results Allstate Protection Auto premium measures and statistics Three months ended March 31, 2025 2024 Change New issued applications (in thousands) Allstate Protection by channel Exclusive agency 748 605 23.6 % Independent agency 686 555 23.6 Direct 757 510 48.4 Total new issued applications 2,191 1,670 31.2 % Allstate brand average premium $ 853 $ 823 3.6 % Homeowners insurance premiums written increased 20.1% or $579 million in the first quarter of 2025 compared to the first quarter of 2024, primarily due to the following factors: • Higher Allstate brand average premiums from implemented rate increases and inflation in insured home replacement costs and other aging factor adjustments, combined with policies in force growth • In the three months ended March 31, 2025, rate increases of 5.9% were implemented in 19 locations, resulting in total estimated insurance premium impact of 1.5%, excluding the impact of changes in insured home replacement costs • Increased new issued applications in direct and exclusive agency channels We are not writing new homeowners business in California and Florida. We are also 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. National General policy growth may be negatively impacted as we improve underwriting margins to targeted levels through underwriting and rate actions. Homeowners premium measures and statistics Three months ended March 31, 2025 2024 Change New issued applications (in thousands) Allstate Protection by channel Exclusive agency 232 218 6.4 % Independent agency 47 48 (2.1) Direct 41 25 64.0 Total new issued applications 320 291 10.0 % Allstate brand average premium $ 2,210 $ 1,912 15.6 % Other personal lines premiums written increased 10.5% or $69 million in the first quarter of 2025 compared to the first quarter of 2024, primarily due to increases in landlords and personal umbrella policies, partially offset by a decrease in auto assigned risk policies purchased from other carriers. We are not writing new condominium business in California and Florida, and we are non-renewing certain policies in Florida. Commercial lines premiums written decreased 40.1% or $63 million in the first quarter of 2025 compared to the first quarter of 2024, primarily due to the strategic decision for the Allstate brand to stop writing new business and non-renew 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 increased 28.1% or $38 million in the first quarter of 2025 compared to the first quarter of 2024 due to growth in the lender-placed business. GAAP operating ratios include loss ratio, expense ratio and combined ratio to analyze our profitability trends. Frequency and severity changes are used to describe the trends in loss costs. 50 www.allstate.com Allstate Protection Segment Results Combined ratios Loss ratio Expense ratio (2) Combined ratio 2025 2024 2025 2024 2025 2024 Three months ended March 31, Auto 69.3 75.4 22.0 20.6 91.3 96.0 Homeowners 91.8 60.3 20.5 21.8 112.3 82.1 Other personal lines (1) 91.2 85.6 17.6 13.3 108.8 98.9 Commercial lines 58.4 115.4 27.4 26.0 85.8 141.4 Other business lines 49.7 44.3 26.0 21.4 75.7 65.7 Total 76.0 72.4 21.4 20.6 97.4 93.0 Impact of amortization of purchased intangibles 0.3 0.3 0.3 0.3 Impact of restructuring and related charges 0.1 0.1 0.1 0.1 (1) Expense ratio includes other revenue of $44 million for the three months ended March 31, 2025, compared to $38 million for the three months ended March 31, 2024, for fees on auto assigned risk policies. (2) Other revenue is deducted from operating costs and expenses in the expense ratio calculation. Loss ratios Loss ratio Effect of catastrophe losses (1) Effect of prior year reserve reestimates Effect of catastrophe losses included in prior year reserve reestimates 2025 2024 2025 2024 2025 2024 2025 2024 Three months ended March 31, Auto 69.3 75.4 2.2 1.2 (2.6) (0.8) (0.1) (0.1) Homeowners 91.8 60.3 49.9 (2) 17.6 (0.2) (6.0) — (4.7) Other personal lines 91.2 85.6 16.7 9.3 6.2 7.9 (1.0) (0.4) Commercial lines 58.4 115.4 2.7 0.6 (24.8) 30.2 2.7 (1.7) Other business lines 49.7 44.3 24.3 5.0 (8.9) 3.6 — — Total 76.0 72.4 15.7 5.7 (1.8) (1.2) (0.1) (1.3) (1) The ten-year average effect of first-quarter catastrophe losses on the total combined ratio was 8.6 points. (2) The ten-year average effect of first-quarter homeowner catastrophe losses on the total combined ratio was 29.3 points. Auto loss ratio decreased 6.1 points in the first quarter of 2025, compared to the same period of 2024 driven by increased earned premiums and lower non-catastrophe losses. Estimated report year 2025 incurred claim severity for Allstate increased compared to report year 2024 for major coverages due to higher repair costs, medical consumption and attorney representation. 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 and accelerating resolution of bodily injury claims. Homeowners loss ratio increased 31.5 points in the first quarter of 2025 compared to the same period of 2024 primarily due to higher catastrophe losses, partially offset by increased premiums earned. Gross claim frequency, excluding catastrophes, decreased in the first quarter of 2025 compared to the same period of 2024. Paid claim severity, excluding catastrophes, increased in the first quarter of 2025 compared to the same period of 2024 due to an increase in freeze related claims and larger losses within the fire peril. 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 increased 5.6 points in the first quarter of 2025, compared to the same period of 2024 primarily due to higher catastrophe losses. Commercial lines loss ratio decreased 57.0 points in the first quarter of 2025 compared to the same period of 2024, primarily due to lower losses, partially offset by a decrease in premiums earned driven by the strategic decision to exit an unprofitable business. Other business lines loss ratio increased 5.4 points in the first quarter of 2025, compared to the same period of 2024, primarily due to higher catastrophe losses. Catastrophe losses increased $1.47 billion to $2.20 billion in the first quarter of 2025 compared to the first quarter of 2024 due to $1.06 billion from the California wildfires, and larger losses per event from wind/hail events in March. The catastrophe losses in the first quarter of 2025 are net of $1.13 billion of expected reinsurance recoveries. The California wildfire event includes reinsurance reinstatement premiums and estimated California FAIR Plan assessments. 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 First Quarter 2025 Form 10-Q 51 Segment Results Allstate Protection within a certain amount of time following the event. Catastrophes are caused by various natural events including high winds, winter storms and freezes, tornadoes, hailstorms, wildfires, tropical storms, tsunamis, hurricanes, earthquakes and volcanoes. We are also exposed to man-made catastrophic events, such as certain types of terrorism, civil unrest, wildfires or industrial accidents. The nature and level of catastrophes in any period cannot be reliably predicted. Loss estimates are generally based on claim adjuster inspections and the application of historical loss development factors. Our loss estimates are calculated in accordance with the coverage provided by our policies. The establishment of appropriate reserves, including reserves for catastrophe losses, is an inherently uncertain and complex process. Reserving for hurricane losses is complicated by the inability of insureds to promptly report losses, limitations placed on claims adjusting staff affecting their ability to inspect losses, determining whether losses are covered by our homeowners policy (generally for damage caused by wind or wind driven rain) or specifically excluded coverage caused by flood, exposure to mold damage, and the effects of numerous other considerations, including the timing of a catastrophe in relation to other events, such as at or near the end of a financial reporting period, which can affect the availability of information needed to estimate reserves for that reporting period. In these situations, we may need to adapt our practices to accommodate these circumstances in order to determine a best estimate of our losses from a catastrophe. 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 coverage, number of policies in force, utilizing reinsurance and participating in various state facilities. Catastrophe losses by the type of event Three months ended March 31, ($ in millions) Number of events 2025 Number of events 2024 Wind/hail 14 $ 1,209 18 $ 726 Wildfires 2 1,066 2 9 Freeze/other events — — 1 158 Prior year reserve reestimates (1) 50 (162) Prior year aggregate reinsurance recoveries (66) — Current year aggregate reinsurance recoveries (57) — Total catastrophe losses 16 $ 2,202 (2) 21 $ 731 (1) Includes reinsurance recoveries. (2) Gross losses before reinsurance recoverables and reinstatement premiums were $3.33 billion. 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 property 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. As of March 31, 2025, the modeled 1-in-100 annual aggregate probable maximum loss for hurricane, earthquake and wildfire perils is approximately $3.1 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. We have placed coverage related to our 2025-2026 Nationwide Excess Catastrophe Reinsurance Program (the “Nationwide Program”), the Kentucky Earthquake Catastrophe Reinsurance Contract and the Canada Catastrophe Excess Reinsurance Contract. The Florida Excess Catastrophe Reinsurance Program and the National General Lender Services Program will be completed in the second quarter of 2025. We are continuing to evaluate complimentary coverage that provides aggregate protection and reduces earnings volatility. Similar to our 2024 program, our 2025 program includes coverage for losses to personal lines property, personal lines automobile, commercial lines property or commercial lines automobile arising out of multiple perils, in addition to hurricanes, earthquakes and wildfires. The Nationwide Program provides per occurrence coverage up to $9.50 billion of loss less a $1.00 billion retention and is subject to the percentage of reinsurance placed in each of its agreements. It also provides aggregate coverage up to $500 million for catastrophe loss events in excess of a deductible of $50 million per event with $66 million of limit utilized by expected recoveries. Property business in the state of Florida is excluded from this program. Separate reinsurance agreements address the distinct needs of separately capitalized legal entities. The Nationwide Program includes reinsurance agreements with both the traditional and insurance-linked securities (“ILS”) markets as described below: • Core traditional market multi-year and per occurrence agreements provide limits totaling $5.87 billion for catastrophe losses arising out of multiple perils and are comprised of the following: 52 www.allstate.com Allstate Protection Segment Results – Contracts providing combined $3.25 billion of placed limits exhausting at $4.25 billion, with one annual reinstatement. – Three multi-year contracts providing combined $336 million of placed limits with two of the contracts providing one reinstatement of limits over each contract’s term. – Four single-year contracts providing combined $2.28 billion of placed limits filling capacity around the multi-year and ILS placements, with two contracts providing one reinstatement of limits. • ILS placements provide $2.70 billion of placed limits, with no reinstatement of limits, and are comprised of the following: – Ten contracts providing occurrence coverage of $2.20 billion of placed limits, reinsuring losses in all states except Florida caused by named storms, earthquakes and fire following earthquakes, severe weather, wildfires, and other naturally occurring or man-made events determined to be a catastrophe by the Company. – One contract providing occurrence and aggregate coverage of $175 million of placed limits, also provide that for each annual period beginning April 1, Allstate declared catastrophes to personal lines property and automobile business can be aggregated to erode the aggregate retention and qualify for coverage under the aggregate limits. Recoveries are limited to the ultimate net loss from the reinsured event. – Two contracts providing aggregate coverage of $325 million of placed limits, with $66 million of limit utilized by expected recoveries. Kentucky Earthquake Excess Catastrophe Reinsurance Contract is placed in the traditional market and provides $28 million of placed limits, subject to a $2 million retention with one reinstatement of limits. Canada Catastrophe Excess of Loss Reinsurance Contract is placed in the traditional market and provides CAD 478 million of placed limits, subject to a CAD 100 million retention, with one reinstatement of limits. The total cost of our property catastrophe reinsurance programs, excluding reinstatement premiums, during the first quarter of 2025 was $257 million, compared to $286 million in the first quarter of 2024. Catastrophe placement premiums reduce net written and earned premium with approximately 82% of the reduction related to homeowners premium. Prior year reserve reestimates Favorable reserve reestimates, including catastrophes, were $254 million in the first quarter of 2025 primarily due to favorable reserve reestimates in personal auto lines physical damage coverages. For a more detailed discussion on reinsurance and reserve reestimates, see Note 9 of the condensed consolidated financial statements. Prior year reserve reestimates Three months ended March 31, Prior year reserve reestimates (1) Effect on combined ratio (2) ($ in millions, except ratios) 2025 2024 2025 2024 Auto $ (249) $ (74) (1.8) (0.6) Homeowners (8) (189) (0.1) (1.4) Other personal lines 46 52 0.4 0.4 Commercial lines (28) 51 (0.2) 0.4 Other business lines (15) 5 (0.1) — Total Allstate Protection $ (254) $ (155) (1.8) (1.2) (1) Favorable reserve reestimates are shown in parentheses. (2) Ratios are calculated using Allstate Protection premiums earned. First Quarter 2025 Form 10-Q 53 Segment Results Allstate Protection Expense ratio increased 0.8 points in the first quarter of 2025, compared to the first quarter of 2024, 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 March 31, ($ in millions, except ratios) 2025 2024 Change Amortization of DAC $ 1,732 $ 1,608 $ 124 Advertising expense 523 283 240 Other costs and expenses, net of other revenue 689 703 (14) Amortization of purchased intangibles 46 51 (5) Restructuring and related charges 16 7 9 Total underwriting expenses $ 3,006 $ 2,652 $ 354 Premiums earned $ 14,027 $ 12,900 $ 1,127 Expense ratio Amortization of DAC 12.4 12.5 (0.1) Advertising expense 3.7 2.2 1.5 Other costs and expenses, net of other revenue 4.9 5.5 (0.6) Subtotal 21.0 20.2 0.8 Amortization of purchased intangibles 0.3 0.3 — Restructuring and related charges 0.1 0.1 — Total expense ratio 21.4 20.6 0.8 54 www.allstate.com Run-off Property-Liability Segment Results Run-off Property-Liability Segment Underwriting results ($ in millions) Three months ended March 31, 2025 2024 Claims and claims expense $ (3) $ (4) Operating costs and expenses (1) (1) Underwriting loss $ (4) $ (5) Reserves for asbestos, environmental and other run-off claims before and after the effects of reinsurance ($ in millions) March 31, 2025 December 31, 2024 Asbestos claims Gross reserves $ 1,098 $ 1,124 Reinsurance (341) (350) Net reserves 757 774 Environmental claims Gross reserves 316 320 Reinsurance (60) (61) Net reserves 256 259 Other run-off claims Gross reserves 437 439 Reinsurance (57) (58) Net reserves 380 381 Total Gross reserves 1,851 1,883 Reinsurance (458) (469) Net reserves $ 1,393 $ 1,414 Reserves by type of exposure before and after the effects of reinsurance ($ in millions) March 31, 2025 December 31, 2024 Direct excess commercial insurance Gross reserves $ 1,056 $ 1,082 Reinsurance (353) (363) Net reserves 703 719 Assumed reinsurance coverage Gross reserves 575 581 Reinsurance (53) (54) Net reserves 522 527 Direct primary commercial insurance Gross reserves 132 133 Reinsurance (51) (51) Net reserves 81 82 Unallocated loss adjustment expenses Gross reserves 88 87 Reinsurance (1) (1) Net reserves 87 86 Total Gross reserves 1,851 1,883 Reinsurance (458) (469) Net reserves $ 1,393 $ 1,414 First Quarter 2025 Form 10-Q 55 Segment Results Run-off Property-Liability Percentage of gross and ceded reserves by case and incurred but not reported (“IBNR”) March 31, 2025 December 31, 2024 Case IBNR Case IBNR Direct excess commercial insurance Gross reserves (1) 58 % 42 % 58 % 42 % Ceded (2) 61 39 62 38 Assumed reinsurance coverage Gross reserves 36 64 34 66 Ceded 55 45 51 49 Direct primary commercial insurance Gross reserves 54 46 54 46 Ceded 87 13 87 13 (1) Approximately 67% and 65% of gross case reserves as of March 31, 2025 and December 31, 2024, respectively, are subject to settlement agreements that define and limit our obligations. (2) Approximately 73% and 72% of ceded case reserves as of March 31, 2025 and December 31, 2024, respectively, are subject to settlement agreements that define and limit our obligations. Gross payments from case reserves by type of exposure ($ in millions) Three months ended March 31, 2025 2024 Direct excess commercial insurance Gross (1) $ 26 $ 16 Ceded (2) (11) (6) Assumed reinsurance coverage Gross 6 6 Ceded — — Direct primary commercial insurance Gross 1 1 Ceded — — (1) In the first quarter of 2025 and 2024, 90% and 85% of payments related to settlement agreements, respectively. (2) In the first quarter of 2025 and 2024, 93% and 89% of payments related to settlement agreements, respectively. Total net reserves as of March 31, 2025, included $709 million or 51% of estimated IBNR reserves compared to $723 million or 51% of estimated IBNR reserves as of December 31, 2024. Total gross payments were $33 million for the first quarter of 2025 compared to $23 million for the first quarter of 2024. Payments primarily related to settlement agreements reached with several insureds on large claims, mainly asbestos related losses, where the scope of coverages has been agreed upon. The claims associated with these settlement agreements are expected to be substantially paid out over the next several years as qualified claims are submitted by these insureds. Reinsurance collections were $6 million for the first quarter of 2025 compared to $11 million for the first quarter of 2024. 56 www.allstate.com Protection Services Segment Results Protection Services Segment Summarized financial information ($ in millions) Three months ended March 31, 2025 2024 Premiums written $ 657 $ 627 Revenues Premiums $ 671 $ 612 Other revenue 128 85 Intersegment insurance premiums and service fees (1) 37 35 Net investment income 24 21 Costs and expenses Claims and claims expense (161) (158) Amortization of DAC (318) (289) Operating costs and expenses (309) (234) Restructuring and related charges — (1) Income tax expense on operations (17) (17) Less: noncontrolling interest — — Adjusted net income $ 55 $ 54 Allstate Protection Plans $ 45 $ 40 Allstate Dealer Services 4 6 Allstate Roadside 11 11 Arity (6) (4) Allstate Identity Protection 1 1 Adjusted net income $ 55 $ 54 Policies in force Allstate Protection Plans 161,503 148,086 Allstate Dealer Services 3,690 3,758 Allstate Roadside 867 565 Allstate Identity Protection 2,648 3,031 Policies in force as of March 31 (in thousands) 168,708 155,440 (1) Primarily related to Arity and Allstate Roadside and are eliminated in our condensed consolidated financial statements. Premiums written increased 4.8% or $30 million in the first quarter of 2025 compared to the first quarter of 2024, primarily due to higher average premiums at Dealer Services and international growth at Allstate Protection Plans, partially offset by lower sales at Allstate Roadside. Adjusted net income increased 1.9% or $1 million in the first quarter of 2025 compared to the first quarter of 2024, primarily due to premium growth at Allstate Protection Plans, partially offset by higher expenses due to growth at Arity and higher loss costs at Dealer Services. PIF increased 8.5% or 13 million as of March 31, 2025 compared to March 31, 2024 due to growth at Allstate Protection Plans. Other revenue increased 50.6% or $43 million in the first quarter of 2025 compared to the first quarter of 2024, primarily due to higher lead generation revenue at Arity. Intersegment premiums and service fees increased 5.7% or $2 million in the first quarter of 2025 compared to the first quarter of 2024, driven by higher lead generation revenue at Arity. Claims and claims expense increased 1.9% or $3 million in the first quarter of 2025 compared to the first quarter of 2024, primarily driven by growth at Allstate Protection Plans and increased severity at Dealer Services, partially offset by lower claim severity at Allstate Roadside. Amortization of DAC increased 10.0% or $29 million in the first quarter of 2025 compared to the first quarter of 2024, driven by growth at Allstate Protection Plans. Operating costs and expenses increased 32.1% or $75 million in the first quarter of 2025 compared to the first quarter of 2024, primarily due to expenses related to growth at Arity and Allstate Protection Plans. First Quarter 2025 Form 10-Q 57 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 closed on April 1, 2025, and we expect to record a gain on the sale of approximately $625 million in the second quarter of 2025. On January 30, 2025, Allstate entered into an agreement with Nationwide Life Insurance Company to sell Direct General Life Insurance Company, NSM Sales Corporation and The Association Benefits Solution, LLC, comprising the group health business, reported within this segment. The transaction is expected to close in 2025, subject to regulatory approvals and other customary closing conditions. The transaction price for the group health business, less costs to sell, exceeds the carrying value of net assets related to this transaction, resulting in an expected gain of approximately $450 million that will be recognized at closing of the transaction. Goodwill In conjunction with the EVB and group health business dispositions, the Company reallocated goodwill among the components of the Health and Benefits reporting unit using a relative fair value approach. An interim goodwill impairment test was performed for each of the EVB and group health disposal groups and the goodwill allocated to the retained individual health business. The interim impairment test did not result in an impairment of goodwill. The excess of fair value over carrying amount for the retained individual health business was less than 10%. As of March 31, 2025, the individual health reporting unit had goodwill of $41 million. Estimating fair value is a subjective process that involves the use of significant estimates by management. Market declines and other events impacting the fair value, including discount rates, operating results, investment returns and strategies and growth rate assumptions or increases in the level of equity required to support the business could result in goodwill impairment. Summarized financial information Three months ended March 31, ($ in millions) 2025 2024 Revenues Accident and health insurance premiums and contract charges $ 487 $ 478 Other revenue 131 134 Net investment income 25 23 Costs and expenses Accident, health and other policy benefits (333) (296) Amortization of DAC (37) (42) Operating costs and expenses (234) (225) Restructuring and related charges — (1) Income tax expense on operations (9) (15) Adjusted net income $ 30 $ 56 Benefit ratio (1) 66.7 60.0 Employer voluntary benefits (2) $ 22 $ 17 Group health (3) 12 28 Individual health (4) (4) 11 Adjusted net income $ 30 $ 56 Policies in force Employer voluntary benefits (2) 3,553 3,594 Group health (3) 138 146 Individual health (4) 478 453 Policies in force as of March 31 (in thousands) 4,169 4,193 (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 March 31, 2025 and 2024, respectively, divided by premiums and contract charges. (2) Employer voluntary benefits include supplemental life and health products offered through workplace enrollment. (3) Group health includes health products and administrative services sold to employers. (4) Individual health includes short-term medical and other health products sold directly to individuals. Premiums and contract charges increased 1.9% or $9 million in the first quarter of 2025 compared to the first quarter of 2024, primarily due to growth in individual health and group health, partially offset by a decline in employer voluntary benefits. 58 www.allstate.com Allstate Health and Benefits Segment Results Premiums and contract charges Three months ended March 31, ($ in millions) 2025 2024 Employer voluntary benefits $ 243 $ 248 Group health 124 118 Individual health 120 112 Premiums and contract charges $ 487 $ 478 Adjusted net income decreased $26 million in the first quarter of 2025 compared to the first quarter of 2024, primarily due to increased benefit utilization in group health and individual health, partially offset by lower benefit utilization and expenses in employer voluntary benefits. Other revenue decreased $3 million in the first quarter of 2025 compared to the first quarter of 2024, primarily due to lower third-party commission revenues for the individual health business. Accident, health and other policy benefits increased 12.5% or $37 million in the first quarter of 2025 compared to the first quarter of 2024, primarily from higher benefit utilization 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 6.7 points to 66.7 in the first quarter of 2025 compared to 60.0 in the first quarter of 2024, primarily due to higher claims experience across group health and individual health. Amortization of DAC decreased 11.9% or $5 million in the first quarter of 2025 compared to the first quarter of 2024 primarily driven by employer voluntary benefits. For information on changes in DAC, see Note 12 of the consolidated financial statements. Operating costs and expenses ($ in millions) Employer voluntary benefits Group health Individual health Total Three months ended March 31, 2025 Non-deferrable commissions $ 22 $ 27 $ 31 $ 80 Operating costs and expenses 51 42 61 154 Total $ 73 $ 69 $ 92 $ 234 Three months ended March 31, 2024 Non-deferrable commissions $ 23 $ 26 $ 42 $ 91 Operating costs and expenses 51 42 41 134 Total $ 74 $ 68 $ 83 $ 225 Operating costs and expenses increased $9 million in the first quarter of 2025 compared to the first quarter of 2024, primarily due to growth in individual health. First Quarter 2025 Form 10-Q 59 Investments Investments Portfolio composition and strategy by reporting segment (1) March 31, 2025 ($ in millions) Property-Liability Protection Services Allstate Health and Benefits (5) Corporate and Other Total Fixed income securities (2) $ 48,824 $ 1,879 $ 150 $ 1,140 $ 51,993 Equity securities (3) 3,811 261 — 393 4,465 Mortgage loans, net 770 — — — 770 Limited partnership interests 9,370 — — 10 9,380 Short-term investments (4) 5,897 194 37 413 6,541 Other investments, net 901 — — — 901 Total $ 69,573 $ 2,334 $ 187 $ 1,956 $ 74,050 Percent to total 93.9 % 3.2 % 0.3 % 2.6 % 100.0 % Market-based $ 59,277 $ 2,334 $ 187 $ 1,689 $ 63,487 Performance-based 10,296 — — 267 10,563 Total $ 69,573 $ 2,334 $ 187 $ 1,956 $ 74,050 (1) Balances reflect the elimination of related-party investments between segments. (2) Fixed income securities are carried at fair value. Amortized cost, net for these securities was $49.15 billion, $1.90 billion, $151 million, $1.14 billion and $52.34 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 March 31, 2025, was $73 million in excess of cost. These net gains were primarily concentrated in the banking and communications sectors. Equity securities include $920 million of funds with underlying investments in fixed income securities as of March 31, 2025. (4) Short-term investments are carried at fair value. (5) As of March 31, 2025, $2.07 billion of investments are classified as held for sale. Investments totaled $74.05 billion as of March 31, 2025, increasing from $72.61 billion as of December 31, 2024, primarily due to positive operating and investment cash flows. Portfolio composition by investment strategy We utilize two primary strategies to manage risks and returns and to position our portfolio to take advantage of market opportunities while attempting to mitigate adverse effects. As strategies and market conditions evolve, the asset allocation may change. Market-based strategy seeks to deliver predictable earnings aligned to business needs and provide flexibility to adjust investment risk profile based on enterprise objectives and market opportunities primarily through public and private fixed income investments and public equity securities. Performance-based strategy seeks to deliver attractive risk-adjusted returns and supplement market risk with idiosyncratic risk primarily through investments in private equity, including infrastructure investments, and real estate with a majority being limited partnerships. These investments include investee level expenses, reflecting asset level operating expenses on directly held real estate and other consolidated investments. Portfolio composition by investment strategy March 31, 2025 ($ in millions) Market- based Performance-based Total Fixed income securities $ 51,857 $ 136 $ 51,993 Equity securities 3,795 670 4,465 Mortgage loans, net 770 — 770 Limited partnership interests 281 9,099 9,380 Short-term investments 6,541 — 6,541 Other investments, net 243 658 901 Total $ 63,487 $ 10,563 $ 74,050 Percent to total 85.7 % 14.3 % 100.0 % Unrealized net capital gains and losses Fixed income securities $ (346) $ (1) $ (347) Short-term investments (3) — (3) Other investments (2) — (2) Total $ (351) $ (1) $ (352) 60 www.allstate.com Investments Fixed income securities Fixed income securities by type Fair value as of ($ in millions) March 31, 2025 December 31, 2024 U.S. government and agencies $ 10,705 $ 11,108 Municipal 7,474 8,842 Corporate 30,767 30,192 Foreign government 1,334 1,364 Asset-backed securities (“ABS”) 1,713 1,241 Total fixed income securities $ 51,993 $ 52,747 Fixed income securities are rated by third-party credit rating agencies or are internally rated. The Securities Valuation Office (“SVO”) of the National Association of Insurance Commissioners (“NAIC”) evaluates the fixed income securities of insurers for regulatory reporting and capital assessment purposes. The NAIC assigns securities to one of six credit quality categories defined as “NAIC designations”. In general, securities with NAIC designations of 1 and 2 are considered investment grade and securities with NAIC designations of 3 through 6 are considered below investment grade. The rating is either received from the SVO based on availability of applicable ratings from rating agencies on the NAIC Nationally Recognized Statistical Rating Organizations provider list, including Moody’s Investors Service (“Moody’s”), S&P Global Ratings (“S&P”), Fitch Ratings (“Fitch”) or a comparable internal rating. As a result of time lags between the funding of investments, the finalization of legal documents, and the completion of the SVO filing process, the portfolio includes certain securities that have not yet been designated by the SVO as of each balance sheet date and the categorization of these securities is based on the expected ratings indicated by internal analysis . As of March 31, 2025, 91.2% 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. Market prices for certain securities may have credit spreads which imply higher or lower credit quality than the current third-party rating. Our initial investment decisions and ongoing monitoring procedures for fixed income securities are based on a due diligence process which includes, but is not limited to, an assessment of the credit quality, sector, structure and liquidity risks of each issuer. Fixed income portfolio monitoring is a comprehensive process to identify and evaluate each fixed income security that may require a credit loss allowance. The process includes a quarterly review of all securities to identify instances where the fair value of a security compared to its amortized cost is below internally established thresholds. For further detail on our fixed income portfolio monitoring process, see Note 5 of the condensed consolidated financial statements. First Quarter 2025 Form 10-Q 61 Investments 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 March 31, 2025 NAIC 1 NAIC 2 NAIC 3 A and above BBB BB ($ in millions) Fair value Unrealized gain (loss) Fair value Unrealized gain (loss) Fair value Unrealized gain (loss) U.S. government and agencies $ 10,705 $ 5 $ — $ — $ — $ — Municipal 7,369 (204) 103 (3) — — Corporate Public 6,049 38 14,752 (136) 552 (11) Privately placed 1,756 (2) 3,722 (16) 2,344 (21) Total corporate 7,805 36 18,474 (152) 2,896 (32) Foreign government 1,334 23 — — — — ABS 1,617 (4) 23 — 27 — Total fixed income securities $ 28,830 $ (144) $ 18,600 $ (155) $ 2,923 $ (32) NAIC 4 NAIC 5-6 Total B CCC and lower Fair value Unrealized gain (loss) Fair value Unrealized gain (loss) Fair value Unrealized gain (loss) U.S. government and agencies $ — $ — $ — $ — $ 10,705 $ 5 Municipal — — 2 2 7,474 (205) Corporate Public 87 (1) — — 21,440 (110) Privately placed 1,384 (17) 121 (6) 9,327 (62) Total corporate 1,471 (18) 121 (6) 30,767 (172) Foreign government — — — — 1,334 23 ABS 1 — 45 6 1,713 2 Total fixed income securities $ 1,472 $ (18) $ 168 $ 2 $ 51,993 $ (347) Municipal bonds , including tax-exempt and taxable securities, include general obligations of state and local issuers and revenue bonds. Corporate bonds include publicly traded and privately placed securities. Privately placed securities primarily consist of corporate issued senior debt securities that are negotiated with the borrower or are issued by public entities in unregistered form. ABS includes collateralized debt obligations, consumer and other ABS. Credit risk is managed by monitoring the performance of the underlying collateral. Many of the securities in the ABS portfolio have credit enhancement with features such as overcollateralization, subordinated structures, reserve funds, guarantees or insurance. ABS also includes residential mortgage-backed securities and commercial mortgage-backed securities. Equity securities of $4.47 billion primarily include common stocks, exchange traded and mutual funds, non-redeemable preferred stocks and REITs. Exchange traded and mutual funds that have fixed income securities as their underlying investments total $920 million as of March 31, 2025. Mortgage loans of $770 million comprise loans secured by first mortgages on developed commercial real estate of $690 million and residential mortgage loans of $80 million. Key considerations used to manage our exposure include property type and geographic diversification. For further detail on our mortgage loan portfolio, see Note 5 of the condensed consolidated financial statements. Limited partnership interests include $7.74 billion of interests in private equity funds, $1.36 billion of interests in real estate funds and $281 million of interests in other funds as of March 31, 2025. We have commitments to invest additional amounts in limited partnership interests totaling $3.25 billion as of March 31, 2025. Other investments include $274 million of bank loans, net and $625 million of direct investments in real estate as of March 31, 2025. 62 www.allstate.com Investments Unrealized net capital gains (losses) March 31, December 31, ($ in millions) 2025 2024 U.S. government and agencies $ 5 $ (315) Municipal (205) (143) Corporate (172) (438) Foreign government 23 12 ABS 2 15 Fixed income securities (347) (869) Short-term investments (3) (2) Derivatives (2) (2) Investments classified as held for sale (91) (110) Unrealized net capital gains and losses, pre-tax $ (443) $ (983) Gross unrealized gains (losses) on fixed income securities by type and sector ($ in millions) Amortized cost, net Gross unrealized Fair value Gains Losses March 31, 2025 Corporate Banking $ 4,434 $ 61 $ (36) $ 4,459 Basic industry 1,044 8 (18) 1,034 Capital goods 2,738 34 (52) 2,720 Communications 2,371 24 (51) 2,344 Consumer goods (cyclical and non-cyclical) 6,576 65 (126) 6,515 Energy 2,769 34 (36) 2,767 Financial services 2,191 22 (42) 2,171 Technology 2,761 25 (72) 2,714 Transportation 822 8 (13) 817 Utilities 4,876 70 (62) 4,884 Other 357 3 (18) 342 Total corporate fixed income portfolio 30,939 354 (526) 30,767 U.S. government and agencies 10,700 123 (118) 10,705 Municipal 7,679 18 (223) 7,474 Foreign government 1,311 31 (8) 1,334 ABS 1,711 10 (8) 1,713 Total fixed income securities $ 52,340 $ 536 $ (883) $ 51,993 December 31, 2024 Corporate Banking $ 4,194 $ 38 $ (63) $ 4,169 Basic industry 833 6 (21) 818 Capital goods 2,706 25 (62) 2,669 Communications 2,364 16 (73) 2,307 Consumer goods (cyclical and non-cyclical) 6,674 51 (165) 6,560 Energy 2,771 32 (50) 2,753 Financial services 2,104 17 (53) 2,068 Technology 2,613 18 (94) 2,537 Transportation 815 7 (19) 803 Utilities 5,125 56 (89) 5,092 Other 431 6 (21) 416 Total corporate fixed income portfolio 30,630 272 (710) 30,192 U.S. government and agencies 11,423 15 (330) 11,108 Municipal 8,985 33 (176) 8,842 Foreign government 1,352 22 (10) 1,364 ABS 1,226 19 (4) 1,241 Total fixed income securities $ 53,616 $ 361 $ (1,230) $ 52,747 First Quarter 2025 Form 10-Q 63 Investments In general, 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. Similarly, gross unrealized gains reflect a decrease in market yields since the time of initial purchase. Equity securities by sector March 31, 2025 December 31, 2024 ($ in millions) Cost Over (under) cost Fair value Cost Over (under) cost Fair value Banking $ 140 $ 37 $ 177 $ 119 $ 41 $ 160 Basic industry 44 4 48 39 (2) 37 Capital goods 195 (8) 187 201 (23) 178 Consumer goods 505 (27) 478 462 (25) 437 Energy 93 8 101 88 1 89 Financial services 348 17 365 332 6 338 Funds Equities 797 (10) 787 1,077 22 1,099 Fixed income 930 (10) 920 764 (14) 750 Other 76 (1) 75 75 (2) 73 Total funds 1,803 (21) 1,782 1,916 6 1,922 REITs 163 19 182 159 17 176 Technology 822 7 829 746 88 834 Utilities 95 5 100 92 1 93 Other (1) 184 32 216 175 24 199 Total equity securities $ 4,392 $ 73 $ 4,465 $ 4,329 $ 134 $ 4,463 (1) Other is generally comprised of transportation and communications sectors. Net investment income Three months ended March 31, ($ in millions) 2025 2024 Fixed income securities $ 608 $ 526 Equity securities 20 15 Mortgage loans 10 9 Limited partnership interests 194 199 Short-term investments 72 67 Other investments 21 21 Investment income, before expense 925 837 Investment expense Investee level expenses (10) (10) Securities lending expense (22) (25) Operating costs and expenses (39) (38) Total investment expense (71) (73) Net investment income $ 854 $ 764 Property-Liability $ 783 $ 702 Protection Services 24 21 Allstate Health and Benefits 25 23 Corporate and Other 22 18 Net investment income $ 854 $ 764 Market-based $ 719 $ 626 Performance-based 206 211 Investment income, before expense $ 925 $ 837 Net investment income increased 11.8% or $90 million in the first quarter of 2025, due to higher market-based results. Market-based investment results continue to benefit from higher investment balances and portfolio repositioning into higher yielding fixed income securities. 64 www.allstate.com Investments Performance-based investment income Three months ended March 31, ($ in millions) 2025 2024 Private equity $ 103 $ 196 Real estate 103 15 Total performance-based income before investee level expenses $ 206 $ 211 Investee level expenses (1) (10) (10) Total performance-based income $ 196 $ 201 (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 2.5% or $5 million in the first quarter of 2025 compared to the same period of 2024 primarily due to lower private equity valuation increases offset by higher real estate investment results. Performance-based investment results and income can vary significantly between periods and are influenced by economic conditions, equity market performance, comparable public company earnings multiples, capitalization rates, operating performance of the underlying investments and the timing of asset sales. The Company typically employs a lag in recording and recognizing changes in valuations of limited partnership interests due to the availability of investee financial statements. Components of net gains (losses) on investments and derivatives and the related tax effect Three months ended March 31, ($ in millions) 2025 2024 Sales $ (137) $ (111) Credit losses (1) (76) (115) Valuation change of equity investments - appreciation (decline): Equity securities (117) 66 Equity fund investments in fixed income securities 5 (4) Limited partnerships (2) (5) 8 Total valuation of equity investments (117) 70 Valuation change and settlements of derivatives (19) (8) Net gains (losses) on investments and derivatives, pre-tax (349) (164) Income tax benefit 73 36 Net gains (losses) on investments and derivatives, after-tax $ (276) $ (128) Property-Liability (1) $ (260) $ (127) Protection Services (8) (3) Allstate Health and Benefits (1) 1 Corporate and Other (7) 1 Net gains (losses) on investments and derivatives, after-tax $ (276) $ (128) Market-based (1) $ (321) $ (185) Performance-based (28) 21 Net gains (losses) on investments and derivatives, pre-tax $ (349) $ (164) (1) 2025 includes losses recorded for variable interests in Reciprocal Exchanges. 2024 includes losses related to the carrying value of the surplus notes issued by 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 first quarter of 2025 primarily related to losses on sales of fixed income securities, valuation losses on equity investments and losses recorded for variable interests in Reciprocal Exchanges. Net losses on sales in the first quarter of 2025 related primarily to sales of fixed income securities in connection with ongoing portfolio management. Net losses on valuation change and settlements of derivatives of $19 million in the first quarter of 2025 primarily related to losses on foreign currency contracts used to manage foreign currency risk. First Quarter 2025 Form 10-Q 65 Investments Net gains (losses) on performance-based investments and derivatives Three months ended March 31, ($ in millions) 2025 2024 Sales $ (9) $ (4) Credit losses (7) (4) Valuation change of equity investments 7 18 Valuation change and settlements of derivatives (19) 11 Total performance-based $ (28) $ 21 Net losses on performance-based investments and derivatives in the first quarter of 2025 primarily related to decreased valuation change and settlements of derivatives from losses on foreign currency contracts used to manage foreign currency risk. 66 www.allstate.com Capital Resources and Liquidity Capital Resources and Liquidity Capital resources consist of shareholders’ equity and debt, representing funds deployed or available to be deployed to support business operations or for general corporate purposes. Capital resources ($ in millions) March 31, 2025 December 31, 2024 Preferred stock, common stock, treasury stock, retained income and other shareholders’ equity items $ 22,564 $ 22,331 Accumulated other comprehensive loss (509) (889) Total Allstate shareholders’ equity 22,055 21,442 Debt (1) 8,086 8,085 Total capital resources $ 30,141 $ 29,527 Ratio of debt to Allstate shareholders’ equity 36.7 % 37.7 % Ratio of debt to capital resources 26.8 27.4 (1) Includes debt issuance costs of $55 million and $56 million as of March 31, 2025 and December 31, 2024, respectively. Allstate shareholders’ equity increased in the first three months of 2025, primarily due to net income and lower unrealized net capital losses on investments, partially offset by dividends to shareholders. In the three months ended March 31, 2025, we paid dividends of $244 million and $29 million related to our common and preferred shares, respectively. Debt maturities We have $600 million of debt that is scheduled to mature in December 2025. Debt maturities for each of the next five years and thereafter (excluding issuance costs) ($ in millions) 2026 $ 550 2027 — 2028 — 2029 500 2030 600 Thereafter 5,891 Total long-term debt principal $ 7,541 Common share repurchases On February 26, 2025, the Board of Directors authorized a new $1.50 billion common share repurchase program that must be completed by September 30, 2026. As of March 31, 2025, there was $1.40 billion remaining in the $1.50 billion common share repurchase program. During the first three months of 2025, we repurchased 511 thousand common shares, or 0.2% of total common shares outstanding at December 31, 2024, for $104 million. Common shareholder dividends On January 2, 2025, we paid a common shareholder dividend of $0.92. On February 26, 2025, we declared a common shareholder dividend of $1.00 payable on April 1, 2025. Financial ratings and strength Our ratings are influenced by many factors including our operating and financial performance, asset quality, liquidity, overall portfolio mix, financial leverage (i.e., debt), exposure to risks such as catastrophes and the current level of operating leverage. The preferred stock and subordinated debentures are viewed as having a common equity component by certain rating agencies and are given equity credit up to a pre-determined limit in our capital structure as determined by their respective methodologies. These respective methodologies consider the existence of certain terms and features in the instruments such as the noncumulative dividend feature in the preferred stock. There have been no changes to any of our ratings from A.M. Best, S&P or Moody’s since December 31, 2024. Liquidity sources and uses We actively manage our financial position and liquidity levels in light of changing market, economic and business conditions. Liquidity is managed at both the entity and enterprise level across the Company and is assessed on both base and stressed level liquidity needs. We believe we have sufficient liquidity to meet these needs. Additionally, we have existing intercompany agreements in place that facilitate liquidity management across the Company to enhance flexibility. The Corporation is party to an Amended and Restated Intercompany Liquidity Agreement (“Liquidity Agreement”) with certain subsidiaries, which includes, but is not limited to Allstate Insurance Company (“AIC”). The Liquidity Agreement allows for short-term advances of funds to be made between parties for liquidity and other general corporate purposes. 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. 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 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 First Quarter 2025 Form 10-Q 67 Capital Resources and Liquidity totaling $2.99 billion as of March 31, 2025, primarily comprised of cash and short-term, fixed income and equity securities that are generally saleable within one quarter. The proceeds from the EVB disposition will increase deployable assets at the parent holding company level. The earnings capacity of the operating subsidiaries is the primary source of capital generation for the Corporation. As of March 31, 2025, we held $21.77 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. No intercompany capital transactions from insurance companies were paid in the first three months of 2025. Based on the greater of 2024 statutory net income or 10% of actual December 31, 2024 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 2026, is estimated to be $3.95 billion, less dividends paid during the preceding twelve months measured at that point in time. In the first three months of 2025, 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 three months of 2025, we did not defer interest payments on the subordinated debentures. Additional resources to support liquidity are as follows: • The Corporation and AIC have access to a $750 million unsecured revolving credit facility that is available for short-term liquidity requirements. The maturity date of this facility is November 2027. The facility is fully subscribed among 11 lenders with the largest commitment being $95 million. The commitments of the lenders are several and no lender is responsible for any other lender’s commitment if such lender fails to make a loan under the facility. This facility contains an increase provision that would allow up to an additional $500 million of borrowing, subject to the lenders’ commitment. 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 20.7% as of March 31, 2025. 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. There were no borrowings under the credit facility during 2025. • 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 March 31, 2025, 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 635 million shares of treasury stock as of March 31, 2025), 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. 68 www.allstate.com Forward-Looking Statements This report contains “forward-looking statements” that anticipate results based on our estimates, assumptions and plans that are subject to uncertainty. These statements are made subject to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements do not relate strictly to historical or current facts and may be identified by their use of words like “plans,” “seeks,” “expects,” “will,” “should,” “anticipates,” “estimates,” “intends,” “believes,” “likely,” “targets” and other words with similar meanings. These statements may address, among other things, our strategy for growth, catastrophe exposure management, product development, investment results, regulatory approvals, market position, expenses, financial results, litigation and reserves. We believe that these statements are based on reasonable estimates, assumptions and plans. Forward-looking statements speak only as of the date on which they are made, and we assume no obligation to update any forward-looking statements resulting from new information or future events or developments. In addition, forward-looking statements are subject to certain risks or uncertainties that could cause actual results to differ materially from those communicated in these forward-looking statements. Factors that could cause actual results to differ materially from those expressed in, or implied by, the forward-looking statements include risks related to: Insurance and Financial Services (1) actual claim costs exceeding current reserves; (2) unexpected increases in claim frequency or severity; (3) catastrophes and severe weather events; (4) limitations in analytical models used for loss cost estimates; (5) price competition and changes in regulation and underwriting standards; (6) regulatory limitations on rate increases and requirements to underwrite business and participate in loss sharing arrangements; (7) market risk and declines in credit quality of our investment portfolios; (8) economic and capital market conditions affecting investments; (9) subjective determination of fair value and amount of credit losses for investments; (10) participation in indemnification programs, including state industry pools and facilities; (11) inability to mitigate the impact associated with changes in capital requirements; (12) a downgrade in financial strength ratings; Business, Strategy and Operations (13) operations in markets that are highly competitive; (14) changing consumer preferences; (15) new or changing technologies impacting the business; (16) inability to successfully deploy new technologies; (17) Transformative Growth strategy; (18) catastrophe management strategy; (19) restrictions on our subsidiaries’ ability to pay dividends; (20) restrictions under terms of some of our securities on the ability to pay dividends or repurchase stock; (21) the availability and cost of reinsurance; (22) counterparty risk related to reinsurance; (23) acquisitions and divestitures of businesses; (24) intellectual property infringement, misappropriation and third-party claims; (25) reliance on vendors for products, services or protection of data and information; (26) inability to attract, develop and retain talent; Macro, Regulatory and Risk Environment (27) conditions in the global economy and capital markets, including changes in U.S. trade and tariff policy, newly imposed U.S. tariffs and any additional responsive non-U.S. tariffs or additional U.S. tariffs, and our ability to plan for and respond to the impact of those changes; (28) restrictions on liquidity or availability of credit on acceptable terms; (29) a large-scale pandemic, the occurrence of terrorism, military actions or political and social unrest or other disruptive or destabilizing events; (30) the failure in cyber or other information security controls; (31) failure of business continuity following a disaster or other event; (32) changing climate and weather conditions; (33) evolving environmental, social and governance standards and expectations; (34) evolving privacy and data security regulations and increased focus on enforcement; (35) failure to manage risk and to timely detect and mitigate a cybersecurity event; (36) restrictive regulations and uncertainty around the interpretation and implementation of regulations in the U.S. and internationally; (37) regulatory reforms and stringent application of existing regulations; (38) losses from legal and regulatory actions; (39) changes in or the application of accounting standards and changes in tax laws; and (40) misconduct or fraudulent acts by employees, agents and third parties. Additional information concerning these and other factors may be found in our filings with the Securities and Exchange Commission, including the “Risk Factors” section in our most recent annual report on Form 10-K. First Quarter 2025 Form 10-Q 69