|
Delaware
|
|
36-3871531
|
|
|
(State or other jurisdiction of incorporation or organization)
|
|
(I.R.S. Employer Identification No.)
|
|
Title of each class
|
Trading Symbols
|
Name of each exchange
on which registered
|
Common Stock, par value $.01 per share
|
ALL
|
New York Stock Exchange
Chicago Stock Exchange |
5.100% Fixed-to-Floating Rate Subordinated Debentures due 2053
|
ALL.PR.B
|
New York Stock Exchange
|
Depositary Shares represent 1/1,000th of a share of 5.625% Noncumulative Preferred Stock, Series A
|
ALL PR A
|
New York Stock Exchange
|
Depositary Shares represent 1/1,000th of a share of 5.625% Noncumulative Preferred Stock, Series G
|
ALL PR G
|
New York Stock Exchange
|
Depositary Shares represent 1/1,000th of a share of 5.100% Noncumulative Preferred Stock, Series H
|
ALL PR H
|
New York Stock Exchange
|
Large accelerated filer
|
☒
|
Accelerated filer
|
☐
|
|
|
|
|
Non-accelerated filer
|
☐
|
Smaller reporting company
|
☐
|
|
|
|
|
|
|
Emerging growth company
|
☐
|
Part I Financial Information
|
Page
|
|
|
|
|
|
|
|
|
Condensed Consolidated Statements of Operations for the Three Month and Nine Month Periods Ended September 30, 2019 and 2018 (unaudited)
|
|
|
Condensed Consolidated Statements of Comprehensive Income for the Three Month and Nine Month Periods Ended September 30, 2019 and 2018 (unaudited)
|
|
|
Condensed Consolidated Statements of Financial Position as of September 30, 2019 and December 31, 2018 (unaudited)
|
|
|
Condensed Consolidated Statements of Shareholders’ Equity for the Three Month and Nine Month Periods Ended September 30, 2019 and 2018 (unaudited)
|
|
|
Condensed Consolidated Statements of Cash Flows for the Nine Month Periods Ended September 30, 2019 and 2018 (unaudited)
|
|
|
||
|
||
|
|
|
|
||
|
|
|
|
Highlights
|
|
|
Property-Liability Operations
|
|
|
||
– Allstate brand
|
||
– Esurance brand
|
||
– Encompass brand
|
||
Discontinued Lines and Coverages
|
||
Service Businesses
|
||
Allstate Life
|
||
Allstate Benefits
|
||
Allstate Annuities
|
||
|
||
|
||
|
||
|
||
|
|
|
Part II Other Information
|
||
($ in millions, except per share data)
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Property and casualty insurance premiums
|
|
$
|
9,094
|
|
|
$
|
8,595
|
|
|
$
|
26,882
|
|
|
$
|
25,341
|
|
Life premiums and contract charges
|
|
625
|
|
|
612
|
|
|
1,874
|
|
|
1,840
|
|
||||
Other revenue
|
|
273
|
|
|
238
|
|
|
794
|
|
|
682
|
|
||||
Net investment income
|
|
880
|
|
|
844
|
|
|
2,470
|
|
|
2,454
|
|
||||
Realized capital gains and losses:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total other-than-temporary impairment (“OTTI”) losses
|
|
(16
|
)
|
|
(4
|
)
|
|
(44
|
)
|
|
(8
|
)
|
||||
OTTI losses reclassified to (from) other comprehensive income ("OCI")
|
|
2
|
|
|
(1
|
)
|
|
1
|
|
|
(2
|
)
|
||||
Net OTTI losses recognized in earnings
|
|
(14
|
)
|
|
(5
|
)
|
|
(43
|
)
|
|
(10
|
)
|
||||
Sales and valuation changes on equity investments and derivatives
|
|
211
|
|
|
181
|
|
|
1,226
|
|
|
27
|
|
||||
Total realized capital gains and losses
|
|
197
|
|
|
176
|
|
|
1,183
|
|
|
17
|
|
||||
Total revenues
|
|
11,069
|
|
|
10,465
|
|
|
33,203
|
|
|
30,334
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Costs and expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Property and casualty insurance claims and claims expense
|
|
6,051
|
|
|
5,805
|
|
|
18,227
|
|
|
16,711
|
|
||||
Life contract benefits
|
|
513
|
|
|
498
|
|
|
1,521
|
|
|
1,485
|
|
||||
Interest credited to contractholder funds
|
|
169
|
|
|
163
|
|
|
487
|
|
|
489
|
|
||||
Amortization of deferred policy acquisition costs
|
|
1,425
|
|
|
1,317
|
|
|
4,151
|
|
|
3,886
|
|
||||
Operating costs and expenses
|
|
1,414
|
|
|
1,425
|
|
|
4,174
|
|
|
4,086
|
|
||||
Pension and other postretirement remeasurement gains and losses
|
|
225
|
|
|
(39
|
)
|
|
365
|
|
|
(32
|
)
|
||||
Restructuring and related charges
|
|
—
|
|
|
13
|
|
|
27
|
|
|
55
|
|
||||
Amortization of purchased intangibles
|
|
32
|
|
|
24
|
|
|
96
|
|
|
69
|
|
||||
Impairment of purchased intangibles
|
|
—
|
|
|
—
|
|
|
55
|
|
|
—
|
|
||||
Interest expense
|
|
80
|
|
|
82
|
|
|
245
|
|
|
251
|
|
||||
Total costs and expenses
|
|
9,909
|
|
|
9,288
|
|
|
29,348
|
|
|
27,000
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Gain on disposition of operations
|
|
—
|
|
|
1
|
|
|
3
|
|
|
4
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Income from operations before income tax expense
|
|
1,160
|
|
|
1,178
|
|
|
3,858
|
|
|
3,338
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Income tax expense
|
|
229
|
|
|
199
|
|
|
784
|
|
|
636
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Net income
|
|
931
|
|
|
979
|
|
|
3,074
|
|
|
2,702
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Preferred stock dividends
|
|
42
|
|
|
37
|
|
|
103
|
|
|
105
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Net income applicable to common shareholders
|
|
$
|
889
|
|
|
$
|
942
|
|
|
$
|
2,971
|
|
|
$
|
2,597
|
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings per common share
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income applicable to common shareholders per common share - Basic
|
|
$
|
2.71
|
|
|
$
|
2.72
|
|
|
$
|
8.98
|
|
|
$
|
7.43
|
|
Weighted average common shares - Basic
|
|
327.7
|
|
|
346.0
|
|
|
330.8
|
|
|
349.7
|
|
||||
Net income applicable to common shareholders per common share - Diluted
|
|
$
|
2.67
|
|
|
$
|
2.68
|
|
|
$
|
8.85
|
|
|
$
|
7.31
|
|
Weighted average common shares - Diluted
|
|
333.0
|
|
|
351.7
|
|
|
335.7
|
|
|
355.4
|
|
($ in millions)
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|||||||||
Net income
|
|
$
|
931
|
|
|
$
|
979
|
|
|
$
|
3,074
|
|
|
$
|
2,702
|
|
|
|
|
|
|
|
|
|
|
||||||||
Other comprehensive income (loss), after-tax
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Changes in:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Unrealized net capital gains and losses
|
|
369
|
|
|
(70
|
)
|
|
2,025
|
|
|
(768
|
)
|
||||
Unrealized foreign currency translation adjustments
|
|
(10
|
)
|
|
(14
|
)
|
|
(1
|
)
|
|
(22
|
)
|
||||
Unamortized pension and other postretirement prior service credit
|
|
(12
|
)
|
|
(15
|
)
|
|
(35
|
)
|
|
(45
|
)
|
||||
Other comprehensive income (loss), after-tax
|
|
347
|
|
|
(99
|
)
|
|
1,989
|
|
|
(835
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Comprehensive income
|
|
$
|
1,278
|
|
|
$
|
880
|
|
|
$
|
5,063
|
|
|
$
|
1,867
|
|
($ in millions, except par value data)
|
|
September 30, 2019
|
|
December 31, 2018
|
||||
Assets
|
|
|
|
|
||||
Investments
|
|
|
|
|
|
|
||
Fixed income securities, at fair value (amortized cost $56,263 and $57,134)
|
|
$
|
59,259
|
|
|
$
|
57,170
|
|
Equity securities, at fair value (cost $6,930 and $4,489)
|
|
8,206
|
|
|
5,036
|
|
||
Mortgage loans
|
|
4,694
|
|
|
4,670
|
|
||
Limited partnership interests
|
|
7,990
|
|
|
7,505
|
|
||
Short-term, at fair value (amortized cost $5,254 and $3,027)
|
|
5,254
|
|
|
3,027
|
|
||
Other
|
|
3,904
|
|
|
3,852
|
|
||
Total investments
|
|
89,307
|
|
|
81,260
|
|
||
Cash
|
|
587
|
|
|
499
|
|
||
Premium installment receivables, net
|
|
6,558
|
|
|
6,154
|
|
||
Deferred policy acquisition costs
|
|
4,683
|
|
|
4,784
|
|
||
Reinsurance and indemnification recoverables, net
|
|
9,363
|
|
|
9,565
|
|
||
Accrued investment income
|
|
613
|
|
|
600
|
|
||
Property and equipment, net
|
|
1,092
|
|
|
1,045
|
|
||
Goodwill
|
|
2,545
|
|
|
2,530
|
|
||
Other assets
|
|
3,383
|
|
|
3,007
|
|
||
Separate Accounts
|
|
2,942
|
|
|
2,805
|
|
||
Total assets
|
|
$
|
121,073
|
|
|
$
|
112,249
|
|
Liabilities
|
|
|
|
|
|
|
||
Reserve for property and casualty insurance claims and claims expense
|
|
$
|
28,076
|
|
|
$
|
27,423
|
|
Reserve for life-contingent contract benefits
|
|
12,378
|
|
|
12,208
|
|
||
Contractholder funds
|
|
17,804
|
|
|
18,371
|
|
||
Unearned premiums
|
|
15,343
|
|
|
14,510
|
|
||
Claim payments outstanding
|
|
952
|
|
|
1,007
|
|
||
Deferred income taxes
|
|
1,079
|
|
|
425
|
|
||
Other liabilities and accrued expenses
|
|
9,729
|
|
|
7,737
|
|
||
Long-term debt
|
|
6,630
|
|
|
6,451
|
|
||
Separate Accounts
|
|
2,942
|
|
|
2,805
|
|
||
Total liabilities
|
|
94,933
|
|
|
90,937
|
|
||
Commitments and Contingent Liabilities (Note 12)
|
|
|
|
|
|
|
||
Shareholders’ equity
|
|
|
|
|
|
|
||
Preferred stock and additional capital paid-in, $1 par value, 25 million shares authorized, 125.8 thousand and 79.8 thousand shares issued and outstanding, $3,145 and $1,995 aggregate liquidation preference
|
|
3,052
|
|
|
1,930
|
|
||
Common stock, $.01 par value, 2.0 billion shares authorized and 900 million issued, 325 million and 332 million shares outstanding
|
|
9
|
|
|
9
|
|
||
Additional capital paid-in
|
|
3,511
|
|
|
3,310
|
|
||
Retained income
|
|
46,527
|
|
|
44,033
|
|
||
Deferred Employee Stock Ownership Plan (“ESOP”) expense
|
|
(3
|
)
|
|
(3
|
)
|
||
Treasury stock, at cost (575 million and 568 million shares)
|
|
(29,063
|
)
|
|
(28,085
|
)
|
||
Accumulated other comprehensive income:
|
|
|
|
|
|
|
||
Unrealized net capital gains and losses:
|
|
|
|
|
|
|
||
Unrealized net capital gains and losses on fixed income securities with OTTI
|
|
82
|
|
|
75
|
|
||
Other unrealized net capital gains and losses
|
|
2,276
|
|
|
(51
|
)
|
||
Unrealized adjustment to DAC, DSI and insurance reserves
|
|
(335
|
)
|
|
(26
|
)
|
||
Total unrealized net capital gains and losses
|
|
2,023
|
|
|
(2
|
)
|
||
Unrealized foreign currency translation adjustments
|
|
(50
|
)
|
|
(49
|
)
|
||
Unamortized pension and other postretirement prior service credit
|
|
134
|
|
|
169
|
|
||
Total accumulated other comprehensive income (“AOCI”)
|
|
2,107
|
|
|
118
|
|
||
Total shareholders’ equity
|
|
26,140
|
|
|
21,312
|
|
||
Total liabilities and shareholders’ equity
|
|
$
|
121,073
|
|
|
$
|
112,249
|
|
($ in millions, except per share data)
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|||||||||
Preferred stock par value
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Preferred stock additional capital paid-in
|
|
|
|
|
|
|
|
|
|
|
||||||
Balance, beginning of period
|
|
1,930
|
|
|
2,303
|
|
|
1,930
|
|
|
1,746
|
|
||||
Preferred stock issuance, net of issuance costs
|
|
1,122
|
|
|
—
|
|
|
1,122
|
|
|
557
|
|
||||
Balance, end of period
|
|
3,052
|
|
|
2,303
|
|
|
3,052
|
|
|
2,303
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Common stock par value
|
|
9
|
|
|
9
|
|
|
9
|
|
|
9
|
|
||||
Common stock additional capital paid-in
|
|
|
|
|
|
|
|
|
|
|
||||||
Balance, beginning of period
|
|
3,477
|
|
|
3,391
|
|
|
3,310
|
|
|
3,313
|
|
||||
Forward contract on accelerated share repurchase agreement
|
|
—
|
|
|
—
|
|
|
150
|
|
|
45
|
|
||||
Activity under equity incentive plans
|
|
34
|
|
|
50
|
|
|
51
|
|
|
83
|
|
||||
Balance, end of period
|
|
3,511
|
|
|
3,441
|
|
|
3,511
|
|
|
3,441
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Retained income
|
|
|
|
|
|
|
|
|
|
|
||||||
Balance, beginning of period
|
|
45,803
|
|
|
43,997
|
|
|
44,033
|
|
|
41,579
|
|
||||
Cumulative effect of change in accounting principle
|
|
—
|
|
|
—
|
|
|
21
|
|
|
1,088
|
|
||||
Net income
|
|
931
|
|
|
979
|
|
|
3,074
|
|
|
2,702
|
|
||||
Dividends on common stock (declared per share of $0.50, $0.46, $1.50 and $1.38)
|
|
(165
|
)
|
|
(163
|
)
|
|
(498
|
)
|
|
(488
|
)
|
||||
Dividends on preferred stock
|
|
(42
|
)
|
|
(37
|
)
|
|
(103
|
)
|
|
(105
|
)
|
||||
Balance, end of period
|
|
46,527
|
|
|
44,776
|
|
|
46,527
|
|
|
44,776
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Deferred ESOP expense
|
|
(3
|
)
|
|
(3
|
)
|
|
(3
|
)
|
|
(3
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Treasury stock
|
|
|
|
|
|
|
|
|
|
|
||||||
Balance, beginning of period
|
|
(28,500
|
)
|
|
(26,818
|
)
|
|
(28,085
|
)
|
|
(25,982
|
)
|
||||
Shares acquired
|
|
(609
|
)
|
|
(225
|
)
|
|
(1,107
|
)
|
|
(1,117
|
)
|
||||
Shares reissued under equity incentive plans, net
|
|
46
|
|
|
32
|
|
|
129
|
|
|
88
|
|
||||
Balance, end of period
|
|
(29,063
|
)
|
|
(27,011
|
)
|
|
(29,063
|
)
|
|
(27,011
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Accumulated other comprehensive income
|
|
|
|
|
|
|
|
|
|
|
||||||
Balance, beginning of period
|
|
1,760
|
|
|
243
|
|
|
118
|
|
|
1,889
|
|
||||
Cumulative effect of change in accounting principle
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(910
|
)
|
||||
Change in unrealized net capital gains and losses
|
|
369
|
|
|
(70
|
)
|
|
2,025
|
|
|
(768
|
)
|
||||
Change in unrealized foreign currency translation adjustments
|
|
(10
|
)
|
|
(14
|
)
|
|
(1
|
)
|
|
(22
|
)
|
||||
Change in unamortized pension and other postretirement prior service credit
|
|
(12
|
)
|
|
(15
|
)
|
|
(35
|
)
|
|
(45
|
)
|
||||
Balance, end of period
|
|
2,107
|
|
|
144
|
|
|
2,107
|
|
|
144
|
|
||||
Total shareholders’ equity
|
|
$
|
26,140
|
|
|
$
|
23,659
|
|
|
$
|
26,140
|
|
|
$
|
23,659
|
|
($ in millions)
|
|
Nine months ended September 30,
|
||||||
|
2019
|
|
2018
|
|||||
Cash flows from operating activities
|
|
|
||||||
Net income
|
|
$
|
3,074
|
|
|
$
|
2,702
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
||
Depreciation, amortization and other non-cash items
|
|
476
|
|
|
376
|
|
||
Realized capital gains and losses
|
|
(1,183
|
)
|
|
(17
|
)
|
||
Pension and other postretirement remeasurement gains and losses
|
|
365
|
|
|
(32
|
)
|
||
Gain on disposition of operations
|
|
(3
|
)
|
|
(4
|
)
|
||
Interest credited to contractholder funds
|
|
487
|
|
|
489
|
|
||
Impairment of purchased intangibles
|
|
55
|
|
|
—
|
|
||
Changes in:
|
|
|
|
|
|
|
||
Policy benefits and other insurance reserves
|
|
29
|
|
|
90
|
|
||
Unearned premiums
|
|
813
|
|
|
785
|
|
||
Deferred policy acquisition costs
|
|
(66
|
)
|
|
(203
|
)
|
||
Premium installment receivables, net
|
|
(392
|
)
|
|
(422
|
)
|
||
Reinsurance recoverables, net
|
|
167
|
|
|
(103
|
)
|
||
Income taxes
|
|
254
|
|
|
(178
|
)
|
||
Other operating assets and liabilities
|
|
(181
|
)
|
|
335
|
|
||
Net cash provided by operating activities
|
|
3,895
|
|
|
3,818
|
|
||
Cash flows from investing activities
|
|
|
|
|
|
|
||
Proceeds from sales
|
|
|
|
|
|
|
||
Fixed income securities
|
|
23,075
|
|
|
26,223
|
|
||
Equity securities
|
|
3,735
|
|
|
4,637
|
|
||
Limited partnership interests
|
|
557
|
|
|
490
|
|
||
Other investments
|
|
279
|
|
|
234
|
|
||
Investment collections
|
|
|
|
|
|
|
||
Fixed income securities
|
|
1,847
|
|
|
2,388
|
|
||
Mortgage loans
|
|
451
|
|
|
378
|
|
||
Other investments
|
|
203
|
|
|
370
|
|
||
Investment purchases
|
|
|
|
|
|
|
||
Fixed income securities
|
|
(23,536
|
)
|
|
(29,049
|
)
|
||
Equity securities
|
|
(6,080
|
)
|
|
(4,791
|
)
|
||
Limited partnership interests
|
|
(989
|
)
|
|
(1,317
|
)
|
||
Mortgage loans
|
|
(475
|
)
|
|
(435
|
)
|
||
Other investments
|
|
(548
|
)
|
|
(686
|
)
|
||
Change in short-term investments, net
|
|
(1,509
|
)
|
|
(665
|
)
|
||
Change in other investments, net
|
|
66
|
|
|
(28
|
)
|
||
Purchases of property and equipment, net
|
|
(293
|
)
|
|
(195
|
)
|
||
Acquisition of operations
|
|
(18
|
)
|
|
(10
|
)
|
||
Net cash used in investing activities
|
|
(3,235
|
)
|
|
(2,456
|
)
|
||
Cash flows from financing activities
|
|
|
|
|
|
|
||
Proceeds from issuance of long-term debt
|
|
491
|
|
|
498
|
|
||
Redemption and repayment of long-term debt
|
|
(317
|
)
|
|
(401
|
)
|
||
Proceeds from issuance of preferred stock
|
|
1,122
|
|
|
557
|
|
||
Contractholder fund deposits
|
|
751
|
|
|
756
|
|
||
Contractholder fund withdrawals
|
|
(1,278
|
)
|
|
(1,474
|
)
|
||
Dividends paid on common stock
|
|
(490
|
)
|
|
(455
|
)
|
||
Dividends paid on preferred stock
|
|
(92
|
)
|
|
(97
|
)
|
||
Treasury stock purchases
|
|
(936
|
)
|
|
(1,062
|
)
|
||
Shares reissued under equity incentive plans, net
|
|
98
|
|
|
66
|
|
||
Other
|
|
79
|
|
|
93
|
|
||
Net cash used in financing activities
|
|
(572
|
)
|
|
(1,519
|
)
|
||
Net increase (decrease) in cash
|
|
88
|
|
|
(157
|
)
|
||
Cash at beginning of period
|
|
499
|
|
|
617
|
|
||
Cash at end of period
|
|
$
|
587
|
|
|
$
|
460
|
|
Note 1
|
General
|
Other information related to operating leases
|
|||
|
|
As of September 30, 2019
|
|
Weighted average remaining lease term (years)
|
|
6
|
|
Weighted average discount rate
|
|
3.32
|
%
|
Maturity of lease liabilities
|
||||
($ in millions)
|
|
Operating leases
|
||
2019 (1)
|
|
$
|
12
|
|
2020
|
|
141
|
|
|
2021
|
|
111
|
|
|
2022
|
|
91
|
|
|
2023
|
|
76
|
|
|
2024
|
|
59
|
|
|
Thereafter
|
|
108
|
|
|
Total lease payments
|
|
$
|
598
|
|
Less: interest
|
|
(56
|
)
|
|
Present value of lease liabilities
|
|
$
|
542
|
|
(1)
|
Excludes maturity of lease liabilities for the nine months ended September 30, 2019.
|
Condensed Consolidated Statements of Operations (unaudited)
|
||||||||||||
|
|
Previously reported
|
|
Impact of change
|
|
As adjusted
|
||||||
($ in millions, except per share data)
|
|
Three months ended September 30, 2018
|
||||||||||
Property and casualty insurance claims and claims expense
|
|
$
|
5,817
|
|
|
$
|
(12
|
)
|
|
$
|
5,805
|
|
Operating costs and expenses
|
|
1,510
|
|
|
(85
|
)
|
|
1,425
|
|
|||
Pension and other postretirement remeasurement gains and losses
|
|
—
|
|
|
(39
|
)
|
|
(39
|
)
|
|||
Restructuring and related charges
|
|
16
|
|
|
(3
|
)
|
|
13
|
|
|||
Total costs and expenses
|
|
9,427
|
|
|
(139
|
)
|
|
9,288
|
|
|||
Income from operations before income tax expense
|
|
1,039
|
|
|
139
|
|
|
1,178
|
|
|||
Income tax expense
|
|
169
|
|
|
30
|
|
|
199
|
|
|||
Net income
|
|
870
|
|
|
109
|
|
|
979
|
|
|||
Net income applicable to common shareholders
|
|
$
|
833
|
|
|
$
|
109
|
|
|
$
|
942
|
|
|
|
|
|
|
|
|
||||||
Earnings per common share:
|
|
|
|
|
|
|
||||||
Net income applicable to common shareholders per common share - Basic
|
|
$
|
2.41
|
|
|
$
|
0.31
|
|
|
$
|
2.72
|
|
Net income applicable to common shareholders per common share - Diluted
|
|
$
|
2.37
|
|
|
$
|
0.31
|
|
|
$
|
2.68
|
|
|
|
|
|
|
|
|
||||||
|
|
Nine months ended September 30, 2018
|
||||||||||
Property and casualty insurance claims and claims expense
|
|
$
|
16,758
|
|
|
$
|
(47
|
)
|
|
$
|
16,711
|
|
Operating costs and expenses
|
|
4,227
|
|
|
(141
|
)
|
|
4,086
|
|
|||
Pension and other postretirement remeasurement gains and losses
|
|
—
|
|
|
(32
|
)
|
|
(32
|
)
|
|||
Restructuring and related charges
|
|
65
|
|
|
(10
|
)
|
|
55
|
|
|||
Total costs and expenses
|
|
27,230
|
|
|
(230
|
)
|
|
27,000
|
|
|||
Income from operations before income tax expense
|
|
3,108
|
|
|
230
|
|
|
3,338
|
|
|||
Income tax expense
|
|
587
|
|
|
49
|
|
|
636
|
|
|||
Net income
|
|
2,521
|
|
|
181
|
|
|
2,702
|
|
|||
Net income applicable to common shareholders
|
|
$
|
2,416
|
|
|
$
|
181
|
|
|
$
|
2,597
|
|
|
|
|
|
|
|
|
||||||
Earnings per common share:
|
|
|
|
|
|
|
||||||
Net income applicable to common shareholders per common share - Basic
|
|
$
|
6.91
|
|
|
$
|
0.52
|
|
|
$
|
7.43
|
|
Net income applicable to common shareholders per common share - Diluted
|
|
$
|
6.80
|
|
|
$
|
0.51
|
|
|
$
|
7.31
|
|
Condensed Consolidated Statements of Comprehensive Income (unaudited)
|
||||||||||||
|
|
Previously reported
|
|
Impact of change
|
|
As adjusted
|
||||||
($ in millions)
|
|
Three months ended September 30, 2018
|
||||||||||
Net income
|
|
$
|
870
|
|
|
$
|
109
|
|
|
$
|
979
|
|
Other comprehensive income (loss), after-tax
|
|
|
|
|
|
|
||||||
Changes in:
|
|
|
|
|
|
|
||||||
Unrealized net capital gains and losses
|
|
(70
|
)
|
|
—
|
|
|
(70
|
)
|
|||
Unrealized foreign currency translation adjustments
|
|
(14
|
)
|
|
—
|
|
|
(14
|
)
|
|||
Unrecognized pension and other postretirement benefit cost
|
|
68
|
|
|
(83
|
)
|
|
(15
|
)
|
|||
Other comprehensive loss, after-tax
|
|
(16
|
)
|
|
(83
|
)
|
|
(99
|
)
|
|||
Comprehensive income
|
|
$
|
854
|
|
|
$
|
26
|
|
|
$
|
880
|
|
|
|
|
|
|
|
|
||||||
|
|
Nine months ended September 30, 2018
|
||||||||||
Net income
|
|
$
|
2,521
|
|
|
$
|
181
|
|
|
$
|
2,702
|
|
Other comprehensive income (loss), after-tax
|
|
|
|
|
|
|
||||||
Changes in:
|
|
|
|
|
|
|
||||||
Unrealized net capital gains and losses
|
|
(768
|
)
|
|
—
|
|
|
(768
|
)
|
|||
Unrealized foreign currency translation adjustments
|
|
(25
|
)
|
|
3
|
|
|
(22
|
)
|
|||
Unrecognized pension and other postretirement benefit cost
|
|
113
|
|
|
(158
|
)
|
|
(45
|
)
|
|||
Other comprehensive loss, after-tax
|
|
(680
|
)
|
|
(155
|
)
|
|
(835
|
)
|
|||
Comprehensive income
|
|
$
|
1,841
|
|
|
$
|
26
|
|
|
$
|
1,867
|
|
Condensed Consolidated Statements of Shareholders’ Equity (unaudited)
|
||||||||||||
|
|
Previous accounting principle
|
|
Impact of change
|
|
As reported
|
||||||
($ in millions)
|
|
Three months ended September 30, 2019
|
||||||||||
Retained income
|
|
|
|
|
|
|
||||||
Balance, beginning of period
|
|
$
|
47,542
|
|
|
$
|
(1,739
|
)
|
|
$
|
45,803
|
|
Cumulative effect of change in accounting principle
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net income
|
|
1,071
|
|
|
(140
|
)
|
|
931
|
|
|||
Dividends on common stock
|
|
(165
|
)
|
|
—
|
|
|
(165
|
)
|
|||
Dividends on preferred stock
|
|
(42
|
)
|
|
—
|
|
|
(42
|
)
|
|||
Balance, end of period
|
|
48,406
|
|
|
(1,879
|
)
|
|
46,527
|
|
|||
|
|
|
|
|
|
|
||||||
Accumulated other comprehensive income (loss)
|
|
|
|
|
|
|
||||||
Balance, beginning of period
|
|
248
|
|
|
1,512
|
|
|
1,760
|
|
|||
Cumulative effect of change in accounting principle
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Change in unrealized net capital gains and losses
|
|
369
|
|
|
—
|
|
|
369
|
|
|||
Change in unrealized foreign currency translation adjustments
|
|
(12
|
)
|
|
2
|
|
|
(10
|
)
|
|||
Change in unrecognized pension and other postretirement benefit cost (1)
|
|
20
|
|
|
(32
|
)
|
|
(12
|
)
|
|||
Balance, end of period
|
|
625
|
|
|
1,482
|
|
|
2,107
|
|
|||
Total shareholders’ equity
|
|
$
|
26,537
|
|
|
$
|
(397
|
)
|
|
$
|
26,140
|
|
|
|
|
|
|
|
|
||||||
|
|
Nine months ended September 30, 2019
|
||||||||||
Retained income
|
|
|
|
|
|
|
||||||
Balance, beginning of period
|
|
$
|
45,708
|
|
|
$
|
(1,675
|
)
|
|
$
|
44,033
|
|
Cumulative effect of change in accounting principle
|
|
21
|
|
|
—
|
|
|
21
|
|
|||
Net income
|
|
3,278
|
|
|
(204
|
)
|
|
3,074
|
|
|||
Dividends on common stock
|
|
(498
|
)
|
|
—
|
|
|
(498
|
)
|
|||
Dividends on preferred stock
|
|
(103
|
)
|
|
—
|
|
|
(103
|
)
|
|||
Balance, end of period
|
|
48,406
|
|
|
(1,879
|
)
|
|
46,527
|
|
|||
|
|
|
|
|
|
|
||||||
Accumulated other comprehensive income (loss)
|
|
|
|
|
|
|
||||||
Balance, beginning of period
|
|
(1,557
|
)
|
|
1,675
|
|
|
118
|
|
|||
Cumulative effect of change in accounting principle
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Change in unrealized net capital gains and losses
|
|
2,025
|
|
|
—
|
|
|
2,025
|
|
|||
Change in unrealized foreign currency translation adjustments
|
|
2
|
|
|
(3
|
)
|
|
(1
|
)
|
|||
Change in unrecognized pension and other postretirement benefit cost (1)
|
|
155
|
|
|
(190
|
)
|
|
(35
|
)
|
|||
Balance, end of period
|
|
625
|
|
|
1,482
|
|
|
2,107
|
|
|||
Total shareholders’ equity
|
|
$
|
26,537
|
|
|
$
|
(397
|
)
|
|
$
|
26,140
|
|
Condensed Consolidated Statements of Shareholders’ Equity (unaudited)
|
||||||||||||
|
|
Previously reported
|
|
Impact of change
|
|
As adjusted
|
||||||
($ in millions)
|
|
Three months ended September 30, 2018
|
||||||||||
Retained income
|
|
|
|
|
|
|
||||||
Balance, beginning of period
|
|
$
|
45,508
|
|
|
$
|
(1,511
|
)
|
|
$
|
43,997
|
|
Cumulative effect of change in accounting principle
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net income
|
|
870
|
|
|
109
|
|
|
979
|
|
|||
Dividends on common stock
|
|
(163
|
)
|
|
—
|
|
|
(163
|
)
|
|||
Dividends on preferred stock
|
|
(37
|
)
|
|
—
|
|
|
(37
|
)
|
|||
Balance, end of period
|
|
46,178
|
|
|
(1,402
|
)
|
|
44,776
|
|
|||
|
|
|
|
|
|
|
||||||
Accumulated other comprehensive income (loss)
|
|
|
|
|
|
|
||||||
Balance, beginning of period
|
|
(1,268
|
)
|
|
1,511
|
|
|
243
|
|
|||
Cumulative effect of change in accounting principle
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Change in unrealized net capital gains and losses
|
|
(70
|
)
|
|
—
|
|
|
(70
|
)
|
|||
Change in unrealized foreign currency translation adjustments
|
|
(14
|
)
|
|
—
|
|
|
(14
|
)
|
|||
Change in unrecognized pension and other postretirement benefit cost
|
|
68
|
|
|
(83
|
)
|
|
(15
|
)
|
|||
Balance, end of period
|
|
(1,284
|
)
|
|
1,428
|
|
|
144
|
|
|||
Total shareholders’ equity
|
|
$
|
23,633
|
|
|
$
|
26
|
|
|
$
|
23,659
|
|
|
|
|
|
|
|
|
||||||
|
|
Nine months ended September 30, 2018
|
||||||||||
Retained income
|
|
|
|
|
|
|
||||||
Balance, beginning of period
|
|
$
|
43,162
|
|
|
$
|
(1,583
|
)
|
|
$
|
41,579
|
|
Cumulative effect of change in accounting principle
|
|
1,088
|
|
|
—
|
|
|
1,088
|
|
|||
Net income
|
|
2,521
|
|
|
181
|
|
|
2,702
|
|
|||
Dividends on common stock
|
|
(488
|
)
|
|
—
|
|
|
(488
|
)
|
|||
Dividends on preferred stock
|
|
(105
|
)
|
|
—
|
|
|
(105
|
)
|
|||
Balance, end of period
|
|
46,178
|
|
|
(1,402
|
)
|
|
44,776
|
|
|||
|
|
|
|
|
|
|
||||||
Accumulated other comprehensive income (loss)
|
|
|
|
|
|
|
||||||
Balance, beginning of period
|
|
306
|
|
|
1,583
|
|
|
1,889
|
|
|||
Cumulative effect of change in accounting principle
|
|
(910
|
)
|
|
—
|
|
|
(910
|
)
|
|||
Change in unrealized net capital gains and losses
|
|
(768
|
)
|
|
—
|
|
|
(768
|
)
|
|||
Change in unrealized foreign currency translation adjustments
|
|
(25
|
)
|
|
3
|
|
|
(22
|
)
|
|||
Change in unrecognized pension and other postretirement benefit cost
|
|
113
|
|
|
(158
|
)
|
|
(45
|
)
|
|||
Balance, end of period
|
|
(1,284
|
)
|
|
1,428
|
|
|
144
|
|
|||
Total shareholders’ equity
|
|
$
|
23,633
|
|
|
$
|
26
|
|
|
$
|
23,659
|
|
Condensed Consolidated Statements of Cash Flows (unaudited)
|
|
|
||||||||||
|
|
Previous accounting principle
|
|
Impact of change
|
|
As reported
|
||||||
($ in millions)
|
|
Nine months ended September 30, 2019
|
||||||||||
Cash flows from operating activities
|
|
|
|
|
|
|
||||||
Net income
|
|
$
|
3,278
|
|
|
$
|
(204
|
)
|
|
$
|
3,074
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
||||||
Pension and other postretirement remeasurement gains and losses
|
|
—
|
|
|
365
|
|
|
365
|
|
|||
Income taxes
|
|
309
|
|
|
(55
|
)
|
|
254
|
|
|||
Other operating assets and liabilities
|
|
(75
|
)
|
|
(106
|
)
|
|
(181
|
)
|
|||
Net cash provided by operating activities
|
|
$
|
3,895
|
|
|
$
|
—
|
|
|
$
|
3,895
|
|
|
|
|
|
|
|
|
||||||
|
|
Previously reported
|
|
Impact of change
|
|
As adjusted
|
||||||
($ in millions)
|
|
Nine months ended September 30, 2018
|
||||||||||
Cash flows from operating activities
|
|
|
|
|
|
|
||||||
Net income
|
|
$
|
2,521
|
|
|
$
|
181
|
|
|
$
|
2,702
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
||||||
Pension and other postretirement remeasurement gains and losses
|
|
—
|
|
|
(32
|
)
|
|
(32
|
)
|
|||
Income taxes
|
|
(227
|
)
|
|
49
|
|
|
(178
|
)
|
|||
Other operating assets and liabilities
|
|
533
|
|
|
(198
|
)
|
|
335
|
|
|||
Net cash provided by operating activities
|
|
$
|
3,818
|
|
|
$
|
—
|
|
|
$
|
3,818
|
|
Note 2
|
Earnings per Common Share
|
Note 3
|
Acquisitions
|
Note 4
|
Reportable Segments
|
• Realized capital gains and losses, after-tax, except for periodic settlements and accruals on non-hedge derivative instruments, which are reported with realized capital gains and losses but included in adjusted net income
|
• Pension and other postretirement remeasurement gains and losses, after-tax
|
• Valuation changes on embedded derivatives not hedged, after-tax
|
• Amortization of DAC and DSI, to the extent they resulted from the recognition of certain realized capital gains and losses or valuation changes on embedded derivatives not hedged, after-tax
|
• Business combination expenses and the amortization or impairment of purchased intangibles, after-tax
|
• Gain (loss) on disposition of operations, after-tax
|
• 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
|
Reportable segments revenue information
|
|
|
|
|
||||||||||||
($ in millions)
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|||||||||
Property-Liability
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Insurance premiums
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Auto
|
|
$
|
6,080
|
|
|
$
|
5,798
|
|
|
$
|
18,045
|
|
|
$
|
17,094
|
|
Homeowners
|
|
1,997
|
|
|
1,891
|
|
|
5,890
|
|
|
5,603
|
|
||||
Other personal lines
|
|
469
|
|
|
455
|
|
|
1,390
|
|
|
1,354
|
|
||||
Commercial lines
|
|
236
|
|
|
176
|
|
|
645
|
|
|
477
|
|
||||
Allstate Protection
|
|
8,782
|
|
|
8,320
|
|
|
25,970
|
|
|
24,528
|
|
||||
Discontinued Lines and Coverages
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total Property-Liability insurance premiums
|
|
8,782
|
|
|
8,320
|
|
|
25,970
|
|
|
24,528
|
|
||||
Other revenue
|
|
195
|
|
|
192
|
|
|
561
|
|
|
550
|
|
||||
Net investment income
|
|
448
|
|
|
410
|
|
|
1,210
|
|
|
1,100
|
|
||||
Realized capital gains and losses
|
|
163
|
|
|
126
|
|
|
916
|
|
|
16
|
|
||||
Total Property-Liability
|
|
9,588
|
|
|
9,048
|
|
|
28,657
|
|
|
26,194
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Service Businesses
|
|
|
|
|
|
|
|
|
|
|
||||||
Consumer product protection plans
|
|
163
|
|
|
125
|
|
|
461
|
|
|
369
|
|
||||
Roadside assistance
|
|
57
|
|
|
66
|
|
|
183
|
|
|
198
|
|
||||
Finance and insurance products
|
|
92
|
|
|
84
|
|
|
268
|
|
|
246
|
|
||||
Intersegment premiums and service fees (1)
|
|
44
|
|
|
31
|
|
|
110
|
|
|
89
|
|
||||
Other revenue
|
|
47
|
|
|
16
|
|
|
142
|
|
|
48
|
|
||||
Net investment income
|
|
11
|
|
|
7
|
|
|
30
|
|
|
18
|
|
||||
Realized capital gains and losses
|
|
4
|
|
|
—
|
|
|
21
|
|
|
(6
|
)
|
||||
Total Service Businesses
|
|
418
|
|
|
329
|
|
|
1,215
|
|
|
962
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Allstate Life
|
|
|
|
|
|
|
|
|
||||||||
Traditional life insurance premiums
|
|
155
|
|
|
149
|
|
|
465
|
|
|
443
|
|
||||
Accident and health insurance premiums
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
||||
Interest-sensitive life insurance contract charges
|
|
176
|
|
|
173
|
|
|
535
|
|
|
531
|
|
||||
Other revenue
|
|
31
|
|
|
30
|
|
|
91
|
|
|
84
|
|
||||
Net investment income
|
|
128
|
|
|
128
|
|
|
380
|
|
|
380
|
|
||||
Realized capital gains and losses
|
|
5
|
|
|
(3
|
)
|
|
1
|
|
|
(9
|
)
|
||||
Total Allstate Life
|
|
495
|
|
|
477
|
|
|
1,473
|
|
|
1,430
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Allstate Benefits
|
|
|
|
|
|
|
|
|
||||||||
Traditional life insurance premiums
|
|
12
|
|
|
13
|
|
|
31
|
|
|
32
|
|
||||
Accident and health insurance premiums
|
|
250
|
|
|
246
|
|
|
746
|
|
|
739
|
|
||||
Interest-sensitive life insurance contract charges
|
|
29
|
|
|
26
|
|
|
86
|
|
|
83
|
|
||||
Net investment income
|
|
21
|
|
|
19
|
|
|
61
|
|
|
57
|
|
||||
Realized capital gains and losses
|
|
2
|
|
|
2
|
|
|
8
|
|
|
—
|
|
||||
Total Allstate Benefits
|
|
314
|
|
|
306
|
|
|
932
|
|
|
911
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Allstate Annuities
|
|
|
|
|
|
|
|
|
||||||||
Fixed annuities contract charges
|
|
3
|
|
|
5
|
|
|
10
|
|
|
11
|
|
||||
Net investment income
|
|
251
|
|
|
260
|
|
|
737
|
|
|
843
|
|
||||
Realized capital gains and losses
|
|
20
|
|
|
51
|
|
|
224
|
|
|
28
|
|
||||
Total Allstate Annuities
|
|
274
|
|
|
316
|
|
|
971
|
|
|
882
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Corporate and Other
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net investment income
|
|
21
|
|
|
20
|
|
|
52
|
|
|
56
|
|
||||
Realized capital gains and losses
|
|
3
|
|
|
—
|
|
|
13
|
|
|
(12
|
)
|
||||
Total Corporate and Other
|
|
24
|
|
|
20
|
|
|
65
|
|
|
44
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Intersegment eliminations (1)
|
|
(44
|
)
|
|
(31
|
)
|
|
(110
|
)
|
|
(89
|
)
|
||||
Consolidated revenues
|
|
$
|
11,069
|
|
|
$
|
10,465
|
|
|
$
|
33,203
|
|
|
$
|
30,334
|
|
(1)
|
Intersegment insurance premiums and service fees are primarily related to Arity and Allstate Roadside Services and are eliminated in the condensed consolidated financial statements.
|
Reportable segments financial performance
|
|
|
|
|
||||||||||||
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
($ in millions)
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Property-Liability
|
|
|
|
|
|
|
|
|
||||||||
Allstate Protection
|
|
$
|
836
|
|
|
$
|
587
|
|
|
$
|
1,909
|
|
|
$
|
2,053
|
|
Discontinued Lines and Coverages
|
|
(99
|
)
|
|
(80
|
)
|
|
(105
|
)
|
|
(86
|
)
|
||||
Total underwriting income
|
|
737
|
|
|
507
|
|
|
1,804
|
|
|
1,967
|
|
||||
Net investment income
|
|
448
|
|
|
410
|
|
|
1,210
|
|
|
1,100
|
|
||||
Income tax expense on operations
|
|
(236
|
)
|
|
(185
|
)
|
|
(617
|
)
|
|
(628
|
)
|
||||
Realized capital gains and losses, after-tax
|
|
127
|
|
|
103
|
|
|
724
|
|
|
16
|
|
||||
Tax Legislation expense
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
(3
|
)
|
||||
Property-Liability net income applicable to common shareholders
|
|
1,076
|
|
|
832
|
|
|
3,121
|
|
|
2,452
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Service Businesses
|
|
|
|
|
|
|
|
|
||||||||
Adjusted net income
|
|
8
|
|
|
1
|
|
|
35
|
|
|
—
|
|
||||
Realized capital gains and losses, after-tax
|
|
4
|
|
|
(1
|
)
|
|
17
|
|
|
(5
|
)
|
||||
Amortization of purchased intangibles, after-tax
|
|
(25
|
)
|
|
(16
|
)
|
|
(74
|
)
|
|
(48
|
)
|
||||
Impairment of purchased intangibles, after-tax
|
|
—
|
|
|
—
|
|
|
(43
|
)
|
|
—
|
|
||||
Tax Legislation expense
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
(4
|
)
|
||||
Service Businesses net loss applicable to common shareholders
|
|
(13
|
)
|
|
(20
|
)
|
|
(65
|
)
|
|
(57
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Allstate Life
|
|
|
|
|
|
|
|
|
||||||||
Adjusted net income
|
|
44
|
|
|
75
|
|
|
185
|
|
|
226
|
|
||||
Realized capital gains and losses, after-tax
|
|
4
|
|
|
(3
|
)
|
|
—
|
|
|
(7
|
)
|
||||
Valuation changes on embedded derivatives not hedged, after-tax
|
|
(9
|
)
|
|
—
|
|
|
(9
|
)
|
|
—
|
|
||||
DAC and DSI amortization related to realized capital gains and losses, after-tax
|
|
1
|
|
|
(1
|
)
|
|
(2
|
)
|
|
(6
|
)
|
||||
Tax Legislation expense
|
|
—
|
|
|
(16
|
)
|
|
—
|
|
|
(16
|
)
|
||||
Allstate Life net income applicable to common shareholders
|
|
40
|
|
|
55
|
|
|
174
|
|
|
197
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Allstate Benefits
|
|
|
|
|
|
|
|
|
||||||||
Adjusted net income
|
|
31
|
|
|
33
|
|
|
99
|
|
|
98
|
|
||||
Realized capital gains and losses, after-tax
|
|
2
|
|
|
2
|
|
|
7
|
|
|
—
|
|
||||
Allstate Benefits net income applicable to common shareholders
|
|
33
|
|
|
35
|
|
|
106
|
|
|
98
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Allstate Annuities
|
|
|
|
|
|
|
|
|
||||||||
Adjusted net income
|
|
16
|
|
|
20
|
|
|
43
|
|
|
99
|
|
||||
Realized capital gains and losses, after-tax
|
|
16
|
|
|
40
|
|
|
177
|
|
|
22
|
|
||||
Valuation changes on embedded derivatives not hedged, after-tax
|
|
(1
|
)
|
|
1
|
|
|
(6
|
)
|
|
5
|
|
||||
Gain on disposition of operations, after-tax
|
|
—
|
|
|
1
|
|
|
2
|
|
|
3
|
|
||||
Tax Legislation benefit
|
|
—
|
|
|
69
|
|
|
—
|
|
|
69
|
|
||||
Allstate Annuities net income applicable to common shareholders
|
|
31
|
|
|
131
|
|
|
216
|
|
|
198
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Corporate and Other
|
|
|
|
|
|
|
|
|
||||||||
Adjusted net loss
|
|
(101
|
)
|
|
(106
|
)
|
|
(302
|
)
|
|
(291
|
)
|
||||
Realized capital gains and losses, after-tax
|
|
2
|
|
|
—
|
|
|
10
|
|
|
(10
|
)
|
||||
Pension and other postretirement remeasurement gains and losses, after-tax
|
|
(179
|
)
|
|
30
|
|
|
(289
|
)
|
|
25
|
|
||||
Tax Legislation expense
|
|
—
|
|
|
(15
|
)
|
|
—
|
|
|
(15
|
)
|
||||
Consolidated and Other net loss applicable to common shareholders
|
|
(278
|
)
|
|
(91
|
)
|
|
(581
|
)
|
|
(291
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Consolidated net income applicable to common shareholders
|
|
$
|
889
|
|
|
$
|
942
|
|
|
$
|
2,971
|
|
|
$
|
2,597
|
|
Note 5
|
Investments
|
Amortized cost, gross unrealized gains (losses) and fair value for fixed income securities
|
||||||||||||||||
($ in millions)
|
|
Amortized cost
|
|
Gross unrealized
|
|
Fair
value
|
||||||||||
|
|
Gains
|
|
Losses
|
|
|||||||||||
September 30, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S. government and agencies
|
|
$
|
3,855
|
|
|
$
|
257
|
|
|
$
|
(1
|
)
|
|
$
|
4,111
|
|
Municipal
|
|
8,227
|
|
|
615
|
|
|
(4
|
)
|
|
8,838
|
|
||||
Corporate
|
|
42,013
|
|
|
2,075
|
|
|
(70
|
)
|
|
44,018
|
|
||||
Foreign government
|
|
972
|
|
|
24
|
|
|
(3
|
)
|
|
993
|
|
||||
Asset-backed securities (“ABS”)
|
|
818
|
|
|
10
|
|
|
(6
|
)
|
|
822
|
|
||||
Residential mortgage-backed securities (“RMBS”)
|
|
301
|
|
|
92
|
|
|
(1
|
)
|
|
392
|
|
||||
Commercial mortgage-backed securities (“CMBS”)
|
|
57
|
|
|
8
|
|
|
(1
|
)
|
|
64
|
|
||||
Redeemable preferred stock
|
|
20
|
|
|
1
|
|
|
—
|
|
|
21
|
|
||||
Total fixed income securities
|
|
$
|
56,263
|
|
|
$
|
3,082
|
|
|
$
|
(86
|
)
|
|
$
|
59,259
|
|
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S. government and agencies
|
|
$
|
5,386
|
|
|
$
|
137
|
|
|
$
|
(6
|
)
|
|
$
|
5,517
|
|
Municipal
|
|
8,963
|
|
|
249
|
|
|
(43
|
)
|
|
9,169
|
|
||||
Corporate
|
|
40,536
|
|
|
490
|
|
|
(890
|
)
|
|
40,136
|
|
||||
Foreign government
|
|
739
|
|
|
13
|
|
|
(5
|
)
|
|
747
|
|
||||
ABS
|
|
1,049
|
|
|
6
|
|
|
(10
|
)
|
|
1,045
|
|
||||
RMBS
|
|
377
|
|
|
89
|
|
|
(2
|
)
|
|
464
|
|
||||
CMBS
|
|
63
|
|
|
8
|
|
|
(1
|
)
|
|
70
|
|
||||
Redeemable preferred stock
|
|
21
|
|
|
1
|
|
|
—
|
|
|
22
|
|
||||
Total fixed income securities
|
|
$
|
57,134
|
|
|
$
|
993
|
|
|
$
|
(957
|
)
|
|
$
|
57,170
|
|
Net investment income
|
|
|
|
|
||||||||||||
($ in millions)
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|||||||||
Fixed income securities
|
|
$
|
546
|
|
|
$
|
527
|
|
|
$
|
1,627
|
|
|
$
|
1,544
|
|
Equity securities
|
|
57
|
|
|
35
|
|
|
155
|
|
|
130
|
|
||||
Mortgage loans
|
|
54
|
|
|
52
|
|
|
161
|
|
|
163
|
|
||||
Limited partnership interests
|
|
197
|
|
|
210
|
|
|
460
|
|
|
563
|
|
||||
Short-term investments
|
|
28
|
|
|
19
|
|
|
80
|
|
|
50
|
|
||||
Other
|
|
66
|
|
|
71
|
|
|
196
|
|
|
205
|
|
||||
Investment income, before expense
|
|
948
|
|
|
914
|
|
|
2,679
|
|
|
2,655
|
|
||||
Investment expense
|
|
(68
|
)
|
|
(70
|
)
|
|
(209
|
)
|
|
(201
|
)
|
||||
Net investment income
|
|
$
|
880
|
|
|
$
|
844
|
|
|
$
|
2,470
|
|
|
$
|
2,454
|
|
Realized capital gains (losses) by transaction type
|
|
|
|
|
|
|
|
|
||||||||
($ in millions)
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|||||||||
Impairment write-downs
|
|
$
|
(14
|
)
|
|
$
|
(5
|
)
|
|
$
|
(43
|
)
|
|
$
|
(10
|
)
|
Sales
|
|
147
|
|
|
(22
|
)
|
|
359
|
|
|
(139
|
)
|
||||
Valuation of equity investments (1)
|
|
24
|
|
|
198
|
|
|
851
|
|
|
149
|
|
||||
Valuation and settlements of derivative instruments
|
|
40
|
|
|
5
|
|
|
16
|
|
|
17
|
|
||||
Realized capital gains and losses
|
|
$
|
197
|
|
|
$
|
176
|
|
|
$
|
1,183
|
|
|
$
|
17
|
|
(1)
|
Includes valuation of equity securities and certain limited partnership interests where the underlying assets are predominately public equity securities.
|
OTTI losses by asset type
|
||||||||||||||||||||||||
($ in millions)
|
|
Three months ended
|
|
Three months ended
|
||||||||||||||||||||
|
September 30, 2019
|
|
September 30, 2018
|
|||||||||||||||||||||
|
Gross
|
|
Included
in OCI
|
|
Net
|
|
Gross
|
|
Included
in OCI
|
|
Net
|
|||||||||||||
Fixed income securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Municipal
|
|
$
|
(2
|
)
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Corporate
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
ABS
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
||||||
RMBS
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
CMBS
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
||||||
Total fixed income securities
|
|
(3
|
)
|
|
2
|
|
|
(1
|
)
|
|
(2
|
)
|
|
(1
|
)
|
|
(3
|
)
|
||||||
Limited partnership interests
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
||||||
Other
|
|
(12
|
)
|
|
—
|
|
|
(12
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
OTTI losses
|
|
$
|
(16
|
)
|
|
$
|
2
|
|
|
$
|
(14
|
)
|
|
$
|
(4
|
)
|
|
$
|
(1
|
)
|
|
$
|
(5
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
Nine months ended
|
|
Nine months ended
|
||||||||||||||||||||
|
September 30, 2019
|
|
September 30, 2018
|
|||||||||||||||||||||
|
Gross
|
|
Included
in OCI
|
|
Net
|
|
Gross
|
|
Included
in OCI
|
|
Net
|
|||||||||||||
Fixed income securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Municipal
|
|
$
|
(2
|
)
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Corporate
|
|
$
|
(5
|
)
|
|
$
|
(2
|
)
|
|
$
|
(7
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
ABS
|
|
(3
|
)
|
|
—
|
|
|
(3
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|
(2
|
)
|
||||||
RMBS
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
||||||
CMBS
|
|
(3
|
)
|
|
2
|
|
|
(1
|
)
|
|
(2
|
)
|
|
(1
|
)
|
|
(3
|
)
|
||||||
Total fixed income securities
|
|
(13
|
)
|
|
1
|
|
|
(12
|
)
|
|
(4
|
)
|
|
(2
|
)
|
|
(6
|
)
|
||||||
Limited partnership interests
|
|
(4
|
)
|
|
—
|
|
|
(4
|
)
|
|
(3
|
)
|
|
—
|
|
|
(3
|
)
|
||||||
Other
|
|
(27
|
)
|
|
—
|
|
|
(27
|
)
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
||||||
OTTI losses
|
|
$
|
(44
|
)
|
|
$
|
1
|
|
|
$
|
(43
|
)
|
|
$
|
(8
|
)
|
|
$
|
(2
|
)
|
|
$
|
(10
|
)
|
(1)
|
Unrealized net capital gains and losses for limited partnership interests represent the Company’s share of EMA limited partnerships’ OCI. Fair value and gross unrealized gains and losses are not applicable.
|
(2)
|
The insurance reserves adjustment represents the amount by which the reserve balance would increase if the net unrealized gains in the applicable product portfolios were realized and reinvested at lower interest rates, resulting in a premium deficiency. This adjustment primarily relates to structured settlement annuities with life contingencies (a type of immediate fixed annuities).
|
(3)
|
The DAC and DSI adjustment balance represents the amount by which the amortization of DAC and DSI would increase or decrease if the unrealized gains or losses in the respective product portfolios were realized.
|
Unrealized net capital gains and losses included in AOCI
|
||||||||||||||||
($ in millions)
|
|
Fair
value
|
|
Gross unrealized
|
|
Unrealized net
gains (losses)
|
||||||||||
December 31, 2018
|
|
|
Gains
|
|
Losses
|
|
||||||||||
Fixed income securities
|
|
$
|
57,170
|
|
|
$
|
993
|
|
|
$
|
(957
|
)
|
|
$
|
36
|
|
Short-term investments
|
|
3,027
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Derivative instruments
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
(3
|
)
|
||||
EMA limited partnerships
|
|
|
|
|
|
|
|
|
|
|
—
|
|
||||
Unrealized net capital gains and losses, pre-tax
|
|
|
|
|
|
|
|
|
|
|
33
|
|
||||
Amounts recognized for:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Insurance reserves
|
|
|
|
|
|
|
|
|
|
|
—
|
|
||||
DAC and DSI
|
|
|
|
|
|
|
|
|
|
|
(33
|
)
|
||||
Amounts recognized
|
|
|
|
|
|
|
|
|
|
|
(33
|
)
|
||||
Deferred income taxes
|
|
|
|
|
|
|
|
|
|
|
(2
|
)
|
||||
Unrealized net capital gains and losses, after-tax
|
|
|
|
|
|
|
|
|
|
|
$
|
(2
|
)
|
Change in unrealized net capital gains (losses)
|
||||
($ in millions)
|
|
Nine months ended September 30, 2019
|
||
Fixed income securities
|
|
$
|
2,960
|
|
Derivative instruments
|
|
—
|
|
|
EMA limited partnerships
|
|
(3
|
)
|
|
Total
|
|
2,957
|
|
|
Amounts recognized for:
|
|
|
|
|
Insurance reserves
|
|
(202
|
)
|
|
DAC and DSI
|
|
(188
|
)
|
|
Amounts recognized
|
|
(390
|
)
|
|
Deferred income taxes
|
|
(542
|
)
|
|
Increase in unrealized net capital gains and losses, after-tax
|
|
$
|
2,025
|
|
Gross unrealized losses and fair value by type and length of time held in a continuous unrealized loss position
|
||||||||||||||||||||||||||
($ in millions)
|
|
Less than 12 months
|
|
12 months or more
|
|
Total
unrealized
losses
|
||||||||||||||||||||
|
Number
of
issues
|
|
Fair
value
|
|
Unrealized
losses
|
|
Number
of
issues
|
|
Fair
value
|
|
Unrealized
losses
|
|
||||||||||||||
September 30, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Fixed income securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
U.S. government and agencies
|
|
8
|
|
|
$
|
165
|
|
|
$
|
(1
|
)
|
|
17
|
|
|
$
|
48
|
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
Municipal
|
|
204
|
|
|
373
|
|
|
(2
|
)
|
|
1
|
|
|
14
|
|
|
(2
|
)
|
|
(4
|
)
|
|||||
Corporate
|
|
206
|
|
|
1,671
|
|
|
(31
|
)
|
|
96
|
|
|
973
|
|
|
(39
|
)
|
|
(70
|
)
|
|||||
Foreign government
|
|
32
|
|
|
205
|
|
|
(2
|
)
|
|
6
|
|
|
103
|
|
|
(1
|
)
|
|
(3
|
)
|
|||||
ABS
|
|
33
|
|
|
150
|
|
|
(2
|
)
|
|
20
|
|
|
122
|
|
|
(4
|
)
|
|
(6
|
)
|
|||||
RMBS
|
|
26
|
|
|
15
|
|
|
—
|
|
|
145
|
|
|
20
|
|
|
(1
|
)
|
|
(1
|
)
|
|||||
CMBS
|
|
1
|
|
|
5
|
|
|
—
|
|
|
1
|
|
|
2
|
|
|
(1
|
)
|
|
(1
|
)
|
|||||
Redeemable preferred stock
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total fixed income securities
|
|
510
|
|
|
$
|
2,584
|
|
|
$
|
(38
|
)
|
|
286
|
|
|
$
|
1,282
|
|
|
$
|
(48
|
)
|
|
$
|
(86
|
)
|
Investment grade fixed income securities
|
|
426
|
|
|
$
|
2,088
|
|
|
$
|
(13
|
)
|
|
237
|
|
|
$
|
991
|
|
|
$
|
(23
|
)
|
|
$
|
(36
|
)
|
Below investment grade fixed income securities
|
|
84
|
|
|
496
|
|
|
(25
|
)
|
|
49
|
|
|
291
|
|
|
(25
|
)
|
|
(50
|
)
|
|||||
Total fixed income securities
|
|
510
|
|
|
$
|
2,584
|
|
|
$
|
(38
|
)
|
|
286
|
|
|
$
|
1,282
|
|
|
$
|
(48
|
)
|
|
$
|
(86
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Fixed income securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
U.S. government and agencies
|
|
11
|
|
|
$
|
55
|
|
|
$
|
—
|
|
|
38
|
|
|
$
|
364
|
|
|
$
|
(6
|
)
|
|
$
|
(6
|
)
|
Municipal
|
|
943
|
|
|
1,633
|
|
|
(10
|
)
|
|
1,147
|
|
|
1,554
|
|
|
(33
|
)
|
|
(43
|
)
|
|||||
Corporate
|
|
1,735
|
|
|
19,243
|
|
|
(543
|
)
|
|
645
|
|
|
8,374
|
|
|
(347
|
)
|
|
(890
|
)
|
|||||
Foreign government
|
|
7
|
|
|
20
|
|
|
(1
|
)
|
|
27
|
|
|
412
|
|
|
(4
|
)
|
|
(5
|
)
|
|||||
ABS
|
|
64
|
|
|
454
|
|
|
(5
|
)
|
|
28
|
|
|
161
|
|
|
(5
|
)
|
|
(10
|
)
|
|||||
RMBS
|
|
166
|
|
|
30
|
|
|
—
|
|
|
195
|
|
|
52
|
|
|
(2
|
)
|
|
(2
|
)
|
|||||
CMBS
|
|
3
|
|
|
7
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|||||
Redeemable preferred stock
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total fixed income securities
|
|
2,930
|
|
|
$
|
21,442
|
|
|
$
|
(559
|
)
|
|
2,082
|
|
|
$
|
10,917
|
|
|
$
|
(398
|
)
|
|
$
|
(957
|
)
|
Investment grade fixed income securities
|
|
2,348
|
|
|
$
|
17,485
|
|
|
$
|
(331
|
)
|
|
2,021
|
|
|
$
|
10,626
|
|
|
$
|
(360
|
)
|
|
$
|
(691
|
)
|
Below investment grade fixed income securities
|
|
582
|
|
|
3,957
|
|
|
(228
|
)
|
|
61
|
|
|
291
|
|
|
(38
|
)
|
|
(266
|
)
|
|||||
Total fixed income securities
|
|
2,930
|
|
|
$
|
21,442
|
|
|
$
|
(559
|
)
|
|
2,082
|
|
|
$
|
10,917
|
|
|
$
|
(398
|
)
|
|
$
|
(957
|
)
|
(1)
|
Below investment grade fixed income securities include $25 million that have been in an unrealized loss position for less than twelve months.
|
(2)
|
Related to securities with an unrealized loss position less than 20% of amortized cost, the degree of which suggests that these securities do not pose a high risk of being other-than-temporarily impaired.
|
(3)
|
Below investment grade fixed income securities include zero that have been in an unrealized loss position for a period of twelve or more consecutive months.
|
(4)
|
Evaluated based on factors such as discounted cash flows and the financial condition and near-term and long-term prospects of the issue or issuer and were determined to have adequate resources to fulfill contractual obligations.
|
Net carrying value of impaired mortgage loans
|
||||||||
($ in millions)
|
|
September 30, 2019
|
|
December 31, 2018
|
||||
Impaired mortgage loans with a valuation allowance
|
|
$
|
6
|
|
|
$
|
4
|
|
Impaired mortgage loans without a valuation allowance
|
|
—
|
|
|
—
|
|
||
Total impaired mortgage loans
|
|
$
|
6
|
|
|
$
|
4
|
|
Valuation allowance on impaired mortgage loans
|
|
$
|
3
|
|
|
$
|
3
|
|
Note 6
|
Fair Value of Assets and Liabilities
|
(a)
|
Quoted prices for similar assets or liabilities in active markets;
|
(b)
|
Quoted prices for identical or similar assets or liabilities in markets that are not active; or
|
(c)
|
Valuation models whose inputs are observable, directly or indirectly, for substantially the full term of the asset or liability.
|
•
|
Fixed income securities: Comprise certain U.S. Treasury fixed income securities. Valuation is based on unadjusted quoted prices for identical assets in active markets that the Company can access.
|
•
|
Equity securities: Comprise actively traded, exchange-listed equity securities. Valuation is based on unadjusted quoted prices for identical assets in active markets that the Company can access.
|
•
|
Short-term: Comprise U.S. Treasury bills valued based on unadjusted quoted prices for identical assets in active markets that the Company can access and actively traded money market funds that have daily quoted net asset values for identical assets that the Company can access.
|
•
|
Separate account assets: Comprise actively traded mutual funds that have daily quoted net asset values that are readily determinable for identical assets that the Company can access. Net asset values for the actively traded mutual funds in which the separate account assets are invested are obtained daily from the fund managers.
|
•
|
Other assets: Comprise free-standing exchange-listed derivatives that are valued based on unadjusted quoted prices for identical assets in active markets.
|
•
|
Fixed income securities:
|
•
|
Equity securities: The primary inputs to the valuation include quoted prices or quoted net asset values for identical or similar assets in markets that are not active.
|
•
|
Short-term: The primary inputs to the valuation include quoted prices for identical or similar assets in markets that are not active, contractual cash flows, benchmark yields and credit spreads.
|
•
|
Other investments: Free-standing exchange listed derivatives that are not actively traded are valued based on quoted prices for identical instruments in markets that are not active.
|
•
|
Fixed income securities:
|
•
|
Equity securities: The primary inputs to the valuation include quoted prices or quoted net asset values for identical or similar assets in markets that exhibit less liquidity relative to those markets supporting Level 2 fair value measurements.
|
•
|
Short-term: For certain short-term investments, amortized cost is used as the best estimate of fair value.
|
•
|
Other investments: Certain OTC derivatives, such as interest rate caps, certain credit default swaps
|
•
|
Contractholder funds: Derivatives embedded in certain life and annuity contracts are valued internally using models widely accepted in the financial services industry that determine a single best estimate of fair value for the embedded derivatives within a block of contractholder liabilities. The models primarily use stochastically determined cash flows based on the contractual elements of embedded derivatives, projected option cost and applicable market data, such as interest rate yield curves and equity index volatility assumptions. These are categorized as Level 3 as a result of the significance of non-market observable inputs.
|
Assets and liabilities measured at fair value
|
||||||||||||||||||||
|
|
As of September 30, 2019
|
||||||||||||||||||
($ in millions)
|
|
Quoted prices in active markets for identical assets (Level 1)
|
|
Significant other observable inputs (Level 2)
|
|
Significant unobservable inputs (Level 3)
|
|
Counterparty and cash collateral netting
|
|
Total
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Fixed income securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
U.S. government and agencies
|
|
$
|
3,707
|
|
|
$
|
404
|
|
|
$
|
—
|
|
|
|
|
|
$
|
4,111
|
|
|
Municipal
|
|
—
|
|
|
8,774
|
|
|
64
|
|
|
|
|
|
8,838
|
|
|||||
Corporate - public
|
|
—
|
|
|
31,538
|
|
|
104
|
|
|
|
|
|
31,642
|
|
|||||
Corporate - privately placed
|
|
—
|
|
|
12,289
|
|
|
87
|
|
|
|
|
12,376
|
|
||||||
Foreign government
|
|
—
|
|
|
993
|
|
|
—
|
|
|
|
|
|
993
|
|
|||||
ABS - CDO
|
|
—
|
|
|
297
|
|
|
63
|
|
|
|
|
|
360
|
|
|||||
ABS - consumer and other
|
|
—
|
|
|
447
|
|
|
15
|
|
|
|
|
462
|
|
||||||
RMBS
|
|
—
|
|
|
392
|
|
|
—
|
|
|
|
|
|
392
|
|
|||||
CMBS
|
|
—
|
|
|
30
|
|
|
34
|
|
|
|
|
|
64
|
|
|||||
Redeemable preferred stock
|
|
—
|
|
|
21
|
|
|
—
|
|
|
|
|
|
21
|
|
|||||
Total fixed income securities
|
|
3,707
|
|
|
55,185
|
|
|
367
|
|
|
|
|
|
59,259
|
|
|||||
Equity securities
|
|
7,453
|
|
|
368
|
|
|
385
|
|
|
|
|
|
8,206
|
|
|||||
Short-term investments
|
|
2,530
|
|
|
2,709
|
|
|
15
|
|
|
|
|
|
5,254
|
|
|||||
Other investments: Free-standing derivatives
|
|
—
|
|
|
186
|
|
|
—
|
|
|
$
|
(52
|
)
|
|
134
|
|
||||
Separate account assets
|
|
2,942
|
|
|
—
|
|
|
—
|
|
|
|
|
|
2,942
|
|
|||||
Other assets
|
|
1
|
|
|
—
|
|
|
—
|
|
|
|
|
|
1
|
|
|||||
Total recurring basis assets
|
|
16,633
|
|
|
58,448
|
|
|
767
|
|
|
(52
|
)
|
|
75,796
|
|
|||||
Total assets at fair value
|
|
$
|
16,633
|
|
|
$
|
58,448
|
|
|
$
|
767
|
|
|
$
|
(52
|
)
|
|
$
|
75,796
|
|
% of total assets at fair value
|
|
22.0
|
%
|
|
77.1
|
%
|
|
1.0
|
%
|
|
(0.1
|
)%
|
|
100.0
|
%
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Investments reported at NAV
|
|
|
|
|
|
|
|
|
|
1,761
|
|
|||||||||
Total
|
|
|
|
|
|
|
|
|
|
$
|
77,557
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Contractholder funds: Derivatives embedded in life and annuity contracts
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(454
|
)
|
|
|
|
|
$
|
(454
|
)
|
|
Other liabilities: Free-standing derivatives
|
|
(1
|
)
|
|
(59
|
)
|
|
—
|
|
|
$
|
5
|
|
|
(55
|
)
|
||||
Total recurring basis liabilities
|
|
$
|
(1
|
)
|
|
$
|
(59
|
)
|
|
$
|
(454
|
)
|
|
$
|
5
|
|
|
$
|
(509
|
)
|
% of total liabilities at fair value
|
|
0.2
|
%
|
|
11.6
|
%
|
|
89.2
|
%
|
|
(1.0
|
)%
|
|
100.0
|
%
|
Assets and liabilities measured at fair value
|
||||||||||||||||||||
|
|
As of December 31, 2018
|
||||||||||||||||||
($ in millions)
|
|
Quoted prices in active markets for identical assets (Level 1)
|
|
Significant other observable inputs (Level 2)
|
|
Significant unobservable inputs (Level 3)
|
|
Counterparty and cash collateral netting
|
|
Total
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Fixed income securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
U.S. government and agencies
|
|
$
|
5,085
|
|
|
$
|
432
|
|
|
$
|
—
|
|
|
|
|
|
$
|
5,517
|
|
|
Municipal
|
|
—
|
|
|
9,099
|
|
|
70
|
|
|
|
|
|
9,169
|
|
|||||
Corporate - public
|
|
—
|
|
|
29,200
|
|
|
70
|
|
|
|
|
|
29,270
|
|
|||||
Corporate - privately placed
|
|
—
|
|
|
10,776
|
|
|
90
|
|
|
|
|
10,866
|
|
||||||
Foreign government
|
|
—
|
|
|
747
|
|
|
—
|
|
|
|
|
|
747
|
|
|||||
ABS - CDO
|
|
—
|
|
|
263
|
|
|
6
|
|
|
|
|
|
269
|
|
|||||
ABS - consumer and other
|
|
—
|
|
|
713
|
|
|
63
|
|
|
|
|
776
|
|
||||||
RMBS
|
|
—
|
|
|
464
|
|
|
—
|
|
|
|
|
|
464
|
|
|||||
CMBS
|
|
—
|
|
|
44
|
|
|
26
|
|
|
|
|
|
70
|
|
|||||
Redeemable preferred stock
|
|
—
|
|
|
22
|
|
|
—
|
|
|
|
|
|
22
|
|
|||||
Total fixed income securities
|
|
5,085
|
|
|
51,760
|
|
|
325
|
|
|
|
|
|
57,170
|
|
|||||
Equity securities
|
|
4,364
|
|
|
331
|
|
|
341
|
|
|
|
|
|
5,036
|
|
|||||
Short-term investments
|
|
1,338
|
|
|
1,659
|
|
|
30
|
|
|
|
|
|
3,027
|
|
|||||
Other investments: Free-standing derivatives
|
|
—
|
|
|
139
|
|
|
1
|
|
|
$
|
(23
|
)
|
|
117
|
|
||||
Separate account assets
|
|
2,805
|
|
|
—
|
|
|
—
|
|
|
|
|
|
2,805
|
|
|||||
Other assets
|
|
2
|
|
|
—
|
|
|
—
|
|
|
|
|
|
2
|
|
|||||
Total recurring basis assets
|
|
$
|
13,594
|
|
|
$
|
53,889
|
|
|
$
|
697
|
|
|
$
|
(23
|
)
|
|
$
|
68,157
|
|
% of total assets at fair value
|
|
19.9
|
%
|
|
79.1
|
%
|
|
1.0
|
%
|
|
—
|
%
|
|
100.0
|
%
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Investments reported at NAV
|
|
|
|
|
|
|
|
|
|
1,779
|
|
|||||||||
Total
|
|
|
|
|
|
|
|
|
|
$
|
69,936
|
|
||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Contractholder funds: Derivatives embedded in life and annuity contracts
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(224
|
)
|
|
|
|
|
$
|
(224
|
)
|
|
Other liabilities: Free-standing derivatives
|
|
(1
|
)
|
|
(62
|
)
|
|
—
|
|
|
$
|
6
|
|
|
(57
|
)
|
||||
Total recurring basis liabilities
|
|
$
|
(1
|
)
|
|
$
|
(62
|
)
|
|
$
|
(224
|
)
|
|
$
|
6
|
|
|
$
|
(281
|
)
|
% of total liabilities at fair value
|
|
0.3
|
%
|
|
22.1
|
%
|
|
79.7
|
%
|
|
(2.1
|
)%
|
|
100.0
|
%
|
Rollforward of Level 3 assets and liabilities held at fair value during the three months period ended September 30, 2019
|
|
||||||||||||||||||||
|
|
Balance as of June 30, 2019
|
|
Total gains (losses) included in:
|
|
Transfers
into
Level 3
|
|
Transfers
out of
Level 3
|
|
||||||||||||
($ in millions)
|
|
|
Net income
|
|
OCI
|
|
|
|
|||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Fixed income securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Municipal
|
|
$
|
63
|
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Corporate - public
|
|
46
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
(7
|
)
|
|
|||||
Corporate - privately placed
|
|
89
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
|||||
ABS - CDO
|
|
10
|
|
|
1
|
|
|
—
|
|
|
50
|
|
|
(5
|
)
|
|
|||||
ABS - consumer and other
|
|
43
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(30
|
)
|
|
|||||
RMBS
|
|
1
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
|||||
CMBS
|
|
34
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|||||
Total fixed income securities
|
|
286
|
|
|
1
|
|
|
1
|
|
|
50
|
|
|
(42
|
)
|
|
|||||
Equity securities
|
|
319
|
|
|
11
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|||||
Short-term investments
|
|
5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|||||
Free-standing derivatives, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|||||
Total recurring Level 3 assets
|
|
$
|
610
|
|
|
$
|
12
|
|
|
$
|
1
|
|
|
$
|
50
|
|
|
$
|
(42
|
)
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Contractholder funds: Derivatives embedded in life and annuity contracts
|
|
$
|
(437
|
)
|
|
$
|
(14
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Total recurring Level 3 liabilities
|
|
$
|
(437
|
)
|
|
$
|
(14
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Purchases
|
|
Sales
|
|
Issues
|
|
Settlements
|
|
Balance as of September 30, 2019
|
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Fixed income securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Municipal
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
64
|
|
|
Corporate - public
|
|
66
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
104
|
|
|
|||||
Corporate - privately placed
|
|
1
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
87
|
|
|
|||||
ABS - CDO
|
|
8
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
63
|
|
|
|||||
ABS - consumer and other
|
|
3
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
15
|
|
|
|||||
RMBS
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|||||
CMBS
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
34
|
|
|
|||||
Total fixed income securities
|
|
78
|
|
|
(3
|
)
|
|
—
|
|
|
(4
|
)
|
|
367
|
|
|
|||||
Equity securities
|
|
55
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
385
|
|
|
|||||
Short-term investments
|
|
10
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15
|
|
|
|||||
Free-standing derivatives, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|||||
Total recurring Level 3 assets
|
|
$
|
143
|
|
|
$
|
(3
|
)
|
|
$
|
—
|
|
|
$
|
(4
|
)
|
|
$
|
767
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Contractholder funds: Derivatives embedded in life and annuity contracts
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(9
|
)
|
|
$
|
6
|
|
|
$
|
(454
|
)
|
|
Total recurring Level 3 liabilities
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(9
|
)
|
|
$
|
6
|
|
|
$
|
(454
|
)
|
|
Rollforward of Level 3 assets and liabilities held at fair value during the nine months period ended September 30, 2019
|
|
||||||||||||||||||||
|
|
Balance as of December 31, 2018
|
|
Total gains (losses) included in:
|
|
Transfers
into Level 3 |
|
Transfers
out of Level 3 |
|
||||||||||||
($ in millions)
|
|
|
Net income
|
|
OCI
|
|
|
|
|||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Fixed income securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Municipal
|
|
$
|
70
|
|
|
$
|
—
|
|
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
(5
|
)
|
|
Corporate - public
|
|
70
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
(47
|
)
|
|
|||||
Corporate - privately placed
|
|
90
|
|
|
(1
|
)
|
|
1
|
|
|
15
|
|
|
(2
|
)
|
|
|||||
ABS - CDO
|
|
6
|
|
|
1
|
|
|
—
|
|
|
51
|
|
|
(5
|
)
|
|
|||||
ABS - consumer and other
|
|
63
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(145
|
)
|
|
|||||
RMBS
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
1
|
|
|
—
|
|
|
|||||
CMBS
|
|
26
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
|||||
Total fixed income securities
|
|
325
|
|
|
—
|
|
|
7
|
|
|
70
|
|
|
(204
|
)
|
|
|||||
Equity securities
|
|
341
|
|
|
49
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|||||
Short-term investments
|
|
30
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|||||
Free-standing derivatives, net
|
|
1
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|||||
Total recurring Level 3 assets
|
|
$
|
697
|
|
|
$
|
48
|
|
|
$
|
7
|
|
|
$
|
70
|
|
|
$
|
(204
|
)
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Contractholder funds: Derivatives embedded in life and annuity contracts
|
|
$
|
(224
|
)
|
|
$
|
(54
|
)
|
|
$
|
—
|
|
|
$
|
(175
|
)
|
|
$
|
—
|
|
|
Total recurring Level 3 liabilities
|
|
$
|
(224
|
)
|
|
$
|
(54
|
)
|
|
$
|
—
|
|
|
$
|
(175
|
)
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Purchases
|
|
Sales
|
|
Issues
|
|
Settlements
|
|
Balance as of September 30, 2019
|
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Fixed income securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Municipal
|
|
$
|
—
|
|
|
$
|
(4
|
)
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
64
|
|
|
Corporate - public
|
|
86
|
|
|
(7
|
)
|
|
—
|
|
|
(1
|
)
|
|
104
|
|
|
|||||
Corporate - privately placed
|
|
2
|
|
|
(13
|
)
|
|
—
|
|
|
(5
|
)
|
|
87
|
|
|
|||||
ABS - CDO
|
|
11
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
63
|
|
|
|||||
ABS - consumer and other
|
|
124
|
|
|
(22
|
)
|
|
—
|
|
|
(5
|
)
|
|
15
|
|
|
|||||
RMBS
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|||||
CMBS
|
|
6
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
34
|
|
|
|||||
Total fixed income securities
|
|
229
|
|
|
(46
|
)
|
|
—
|
|
|
(14
|
)
|
|
367
|
|
|
|||||
Equity securities
|
|
77
|
|
|
(82
|
)
|
|
—
|
|
|
—
|
|
|
385
|
|
|
|||||
Short-term investments
|
|
25
|
|
|
(40
|
)
|
|
—
|
|
|
—
|
|
|
15
|
|
|
|||||
Free-standing derivatives, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|||||
Total recurring Level 3 assets
|
|
$
|
331
|
|
|
$
|
(168
|
)
|
|
$
|
—
|
|
|
$
|
(14
|
)
|
|
$
|
767
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Contractholder funds: Derivatives embedded in life and annuity contracts
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(9
|
)
|
|
$
|
8
|
|
|
$
|
(454
|
)
|
|
Total recurring Level 3 liabilities
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(9
|
)
|
|
$
|
8
|
|
|
$
|
(454
|
)
|
|
Rollforward of Level 3 assets and liabilities held at fair value during the three months period ended September 30, 2018
|
|
||||||||||||||||||||
|
|
Balance as of June 30, 2018
|
|
Total gains (losses) included in:
|
|
Transfers
into
Level 3
|
|
Transfers
out of
Level 3
|
|
||||||||||||
($ in millions)
|
|
|
Net income
|
|
OCI
|
|
|
|
|||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Fixed income securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Municipal
|
|
$
|
106
|
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
(9
|
)
|
|
Corporate - public
|
|
76
|
|
|
—
|
|
|
(1
|
)
|
|
12
|
|
|
(4
|
)
|
|
|||||
Corporate - privately placed
|
|
195
|
|
|
1
|
|
|
(1
|
)
|
|
—
|
|
|
(20
|
)
|
|
|||||
ABS - CDO
|
|
9
|
|
|
—
|
|
|
1
|
|
|
20
|
|
|
—
|
|
|
|||||
ABS - consumer and other
|
|
73
|
|
|
—
|
|
|
—
|
|
|
12
|
|
|
(29
|
)
|
|
|||||
CMBS
|
|
26
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|||||
Total fixed income securities
|
|
485
|
|
|
1
|
|
|
(2
|
)
|
|
44
|
|
|
(62
|
)
|
|
|||||
Equity securities
|
|
291
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|||||
Short-term investments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|||||
Free-standing derivatives, net
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|||||
Total recurring Level 3 assets
|
|
$
|
777
|
|
|
$
|
9
|
|
|
$
|
(2
|
)
|
|
$
|
44
|
|
|
$
|
(62
|
)
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Contractholder funds: Derivatives embedded in life and annuity contracts
|
|
$
|
(260
|
)
|
|
$
|
(7
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Total recurring Level 3 liabilities
|
|
$
|
(260
|
)
|
|
$
|
(7
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Purchases
|
|
Sales
|
|
Issues
|
|
Settlements
|
|
Balance as of September 30, 2018
|
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Fixed income securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Municipal
|
|
$
|
—
|
|
|
$
|
(6
|
)
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
89
|
|
|
Corporate - public
|
|
10
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
92
|
|
|
|||||
Corporate - privately placed
|
|
6
|
|
|
(2
|
)
|
|
—
|
|
|
(12
|
)
|
|
167
|
|
|
|||||
ABS - CDO
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
29
|
|
|
|||||
ABS - consumer and other
|
|
33
|
|
|
(20
|
)
|
|
—
|
|
|
(17
|
)
|
|
52
|
|
|
|||||
CMBS
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
26
|
|
|
|||||
Total fixed income securities
|
|
49
|
|
|
(29
|
)
|
|
—
|
|
|
(31
|
)
|
|
455
|
|
|
|||||
Equity securities
|
|
21
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
320
|
|
|
|||||
Short-term investments
|
|
20
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20
|
|
|
|||||
Free-standing derivatives, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
(1)
|
|||||
Total recurring Level 3 assets
|
|
$
|
90
|
|
|
$
|
(29
|
)
|
|
$
|
—
|
|
|
$
|
(31
|
)
|
|
$
|
796
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Contractholder funds: Derivatives embedded in life and annuity contracts
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
(266
|
)
|
|
Total recurring Level 3 liabilities
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
(266
|
)
|
|
(1)
|
Comprises $1 million of assets.
|
Rollforward of Level 3 assets and liabilities held at fair value during the nine months period ended September 30, 2018
|
|
||||||||||||||||||||
|
|
Balance as of December 31, 2017
|
|
Total gains (losses) included in:
|
|
Transfers
into Level 3 |
|
Transfers
out of Level 3 |
|
||||||||||||
($ in millions)
|
|
|
Net income
|
|
OCI
|
|
|
|
|||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Fixed income securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Municipal
|
|
$
|
101
|
|
|
$
|
1
|
|
|
$
|
(2
|
)
|
|
$
|
—
|
|
|
$
|
(11
|
)
|
|
Corporate - public
|
|
108
|
|
|
—
|
|
|
(3
|
)
|
|
16
|
|
|
(9
|
)
|
|
|||||
Corporate - privately placed
|
|
224
|
|
|
(1
|
)
|
|
(2
|
)
|
|
20
|
|
|
(49
|
)
|
|
|||||
ABS - CDO
|
|
99
|
|
|
—
|
|
|
1
|
|
|
20
|
|
|
(89
|
)
|
|
|||||
ABS - consumer and other
|
|
48
|
|
|
—
|
|
|
1
|
|
|
22
|
|
|
(45
|
)
|
|
|||||
CMBS
|
|
26
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|||||
Total fixed income securities
|
|
606
|
|
|
—
|
|
|
(5
|
)
|
|
78
|
|
|
(203
|
)
|
|
|||||
Equity securities
|
|
210
|
|
|
24
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|||||
Short-term investments
|
|
20
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|||||
Free-standing derivatives, net
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|||||
Total recurring Level 3 assets
|
|
$
|
837
|
|
|
$
|
24
|
|
|
$
|
(5
|
)
|
|
$
|
78
|
|
|
$
|
(203
|
)
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Contractholder funds: Derivatives embedded in life and annuity contracts
|
|
$
|
(286
|
)
|
|
$
|
17
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Total recurring Level 3 liabilities
|
|
$
|
(286
|
)
|
|
$
|
17
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Purchases
|
|
Sales
|
|
Issues
|
|
Settlements
|
|
Balance as of September 30, 2018
|
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Fixed income securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Municipal
|
|
$
|
10
|
|
|
$
|
(8
|
)
|
|
$
|
—
|
|
|
$
|
(2
|
)
|
|
$
|
89
|
|
|
Corporate - public
|
|
10
|
|
|
(27
|
)
|
|
—
|
|
|
(3
|
)
|
|
92
|
|
|
|||||
Corporate - privately placed
|
|
21
|
|
|
(5
|
)
|
|
—
|
|
|
(41
|
)
|
|
167
|
|
|
|||||
ABS - CDO
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
29
|
|
|
|||||
ABS - consumer and other
|
|
108
|
|
|
(62
|
)
|
|
—
|
|
|
(20
|
)
|
|
52
|
|
|
|||||
CMBS
|
|
1
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
26
|
|
|
|||||
Total fixed income securities
|
|
150
|
|
|
(102
|
)
|
|
—
|
|
|
(69
|
)
|
|
455
|
|
|
|||||
Equity securities
|
|
100
|
|
|
(14
|
)
|
|
—
|
|
|
—
|
|
|
320
|
|
|
|||||
Short-term investments
|
|
45
|
|
|
(45
|
)
|
|
—
|
|
|
—
|
|
|
20
|
|
|
|||||
Free-standing derivatives, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
(1)
|
|||||
Total recurring Level 3 assets
|
|
$
|
295
|
|
|
$
|
(161
|
)
|
|
$
|
—
|
|
|
$
|
(69
|
)
|
|
$
|
796
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Contractholder funds: Derivatives embedded in life and annuity contracts
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
4
|
|
|
$
|
(266
|
)
|
|
Total recurring Level 3 liabilities
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
4
|
|
|
$
|
(266
|
)
|
|
(1)
|
Comprises $1 million of assets.
|
Carrying values and fair value estimates of financial instruments not carried at fair value
|
||||||||||||||||||
($ in millions)
|
|
|
|
September 30, 2019
|
|
December 31, 2018
|
||||||||||||
|
Fair value level
|
|
Carrying
value
|
|
Fair
value
|
|
Carrying
value
|
|
Fair
value
|
|||||||||
Mortgage loans
|
|
Level 3
|
|
$
|
4,694
|
|
|
$
|
4,876
|
|
|
$
|
4,670
|
|
|
$
|
4,703
|
|
Bank loans
|
|
Level 3
|
|
1,223
|
|
|
1,199
|
|
|
1,350
|
|
|
1,298
|
|
||||
Agent loans
|
|
Level 3
|
|
663
|
|
|
666
|
|
|
620
|
|
|
617
|
|
Note 7
|
Derivative Financial Instruments
|
(1)
|
Volume for OTC and cleared derivative contracts is represented by their notional amounts. Volume for exchange traded derivatives is represented by the number of contracts, which is the basis on which they are traded. (n/a = not applicable)
|
Gross and net amounts for OTC derivatives (1)
|
||||||||||||||||||||||||
($ in millions)
|
|
|
|
Offsets
|
|
|
|
|
|
|
||||||||||||||
|
Gross amount
|
|
Counter-party netting
|
|
Cash collateral (received) pledged
|
|
Net amount on balance sheet
|
|
Securities collateral (received) pledged
|
|
Net amount
|
|||||||||||||
September 30, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Asset derivatives
|
|
$
|
55
|
|
|
$
|
(37
|
)
|
|
$
|
(15
|
)
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
3
|
|
Liability derivatives
|
|
(7
|
)
|
|
37
|
|
|
(32
|
)
|
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Asset derivatives
|
|
$
|
25
|
|
|
$
|
(18
|
)
|
|
$
|
(5
|
)
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
2
|
|
Liability derivatives
|
|
(12
|
)
|
|
18
|
|
|
(12
|
)
|
|
(6
|
)
|
|
—
|
|
|
(6
|
)
|
(1)
|
All OTC derivatives are subject to enforceable master netting agreements.
|
(1)
|
Allstate uses the lower of S&P’s or Moody’s long-term debt issuer ratings.
|
(2)
|
Only OTC derivatives with a net positive fair value are included for each counterparty.
|
($ in millions)
|
|
As of September 30, 2019
|
|
As of December 31, 2018
|
||||
Gross liability fair value of contracts containing credit-risk-contingent features
|
|
$
|
7
|
|
|
$
|
11
|
|
Gross asset fair value of contracts containing credit-risk-contingent features and subject to MNAs
|
|
(7
|
)
|
|
(5
|
)
|
||
Collateral posted under MNAs for contracts containing credit-risk-contingent features
|
|
—
|
|
|
(2
|
)
|
||
Maximum amount of additional exposure for contracts with credit-risk-contingent features if all features were triggered concurrently
|
|
$
|
—
|
|
|
$
|
4
|
|
Note 8
|
Reserve for Property and Casualty Insurance Claims and Claims Expense
|
(1)
|
Recoverables comprises reinsurance and indemnification recoverables.
|
Prior year reserve reestimates included in claims and claims expense (1)
|
|
|
||||||||||||||||||||||
|
|
Nine months ended September 30,
|
||||||||||||||||||||||
($ in millions)
|
|
Non-catastrophes
|
|
Catastrophes
|
|
Total
|
||||||||||||||||||
|
|
2019
|
|
2018
|
|
2019 (2)
|
|
2018
|
|
2019
|
|
2018
|
||||||||||||
Auto (3)
|
|
$
|
(302
|
)
|
|
$
|
(319
|
)
|
|
$
|
(9
|
)
|
|
$
|
(37
|
)
|
|
$
|
(311
|
)
|
|
$
|
(356
|
)
|
Homeowners
|
|
—
|
|
|
(38
|
)
|
|
59
|
|
|
84
|
|
|
59
|
|
|
46
|
|
||||||
Other personal lines
|
|
13
|
|
|
(13
|
)
|
|
4
|
|
|
(2
|
)
|
|
17
|
|
|
(15
|
)
|
||||||
Commercial lines
|
|
18
|
|
|
107
|
|
|
(1
|
)
|
|
—
|
|
|
17
|
|
|
107
|
|
||||||
Discontinued Lines and Coverages (4)
|
|
103
|
|
|
85
|
|
|
—
|
|
|
—
|
|
|
103
|
|
|
85
|
|
||||||
Service Businesses
|
|
(3
|
)
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
(2
|
)
|
||||||
Total prior year reserve reestimates
|
|
$
|
(171
|
)
|
|
$
|
(180
|
)
|
|
$
|
53
|
|
|
$
|
45
|
|
|
$
|
(118
|
)
|
|
$
|
(135
|
)
|
(1)
|
Favorable reserve reestimates are shown in parentheses.
|
(2)
|
Includes $13 million of reinstatement reinsurance premiums incurred during the period related to the 2018 Camp Fire, which primarily impacted homeowners reestimates.
|
(3)
|
Non-catastrophe results related to continued favorable personal lines auto injury coverage development.
|
(4)
|
The Company’s 2019 annual reserve review, using established industry and actuarial best practices, resulted in unfavorable reestimates of $95 million.
|
Note 9
|
Reinsurance
|
Effects of reinsurance ceded on property and casualty premiums earned and life premiums and contract charges
|
||||||||||||||||
($ in millions)
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|||||||||
Property and casualty insurance premiums earned
|
|
$
|
(289
|
)
|
|
$
|
(260
|
)
|
|
$
|
(836
|
)
|
|
$
|
(756
|
)
|
Life premiums and contract charges
|
|
(68
|
)
|
|
(76
|
)
|
|
(200
|
)
|
|
(221
|
)
|
Note 10
|
Capital Structure
|
Note 11
|
Company Restructuring
|
•
|
Employee - severance and relocation benefits
|
•
|
Exit - contract termination penalties
|
Restructuring activity during the period
|
||||||||||||
($ in millions)
|
|
Employee
costs
|
|
Exit
costs
|
|
Total
liability
|
||||||
Restructuring liability as of December 31, 2018
|
|
$
|
29
|
|
|
$
|
15
|
|
|
$
|
44
|
|
Expense incurred
|
|
31
|
|
|
3
|
|
|
34
|
|
|||
Adjustments to liability
|
|
(7
|
)
|
|
—
|
|
|
(7
|
)
|
|||
Payments
|
|
(37
|
)
|
|
(7
|
)
|
|
(44
|
)
|
|||
Restructuring liability as of September 30, 2019
|
|
$
|
16
|
|
|
$
|
11
|
|
|
$
|
27
|
|
Note 12
|
Guarantees and Contingent Liabilities
|
Note 13
|
Benefit Plans
|
Note 14
|
Supplemental Cash Flow Information
|
($ in millions)
|
|
Nine months ended September 30,
|
||||||
|
2019
|
|
2018
|
|||||
Net change in proceeds managed
|
|
|
|
|
|
|
||
Net change in fixed income securities
|
|
$
|
80
|
|
|
$
|
175
|
|
Net change in short-term investments
|
|
(709
|
)
|
|
(454
|
)
|
||
Operating cash flow used
|
|
$
|
(629
|
)
|
|
$
|
(279
|
)
|
|
|
|
|
|
||||
Net change in liabilities
|
|
|
|
|
||||
Liabilities for collateral, beginning of period
|
|
$
|
(1,458
|
)
|
|
$
|
(1,124
|
)
|
Liabilities for collateral, end of period
|
|
(2,087
|
)
|
|
(1,403
|
)
|
||
Operating cash flow provided
|
|
$
|
629
|
|
|
$
|
279
|
|
Note 15
|
Other Comprehensive Income
|
Components of other comprehensive income (loss) on a pre-tax and after-tax basis
|
||||||||||||||||||||||||
($ in millions)
|
|
Three months ended September 30,
|
||||||||||||||||||||||
|
2019
|
|
2018
|
|||||||||||||||||||||
|
Pre-tax
|
|
Tax
|
|
After-tax
|
|
Pre-tax
|
|
Tax
|
|
After-tax
|
|||||||||||||
Unrealized net holding gains and losses arising during the period, net of related offsets
|
|
$
|
603
|
|
|
$
|
(127
|
)
|
|
$
|
476
|
|
|
$
|
(116
|
)
|
|
$
|
25
|
|
|
$
|
(91
|
)
|
Less: reclassification adjustment of realized capital gains and losses
|
|
136
|
|
|
(29
|
)
|
|
107
|
|
|
(26
|
)
|
|
5
|
|
|
(21
|
)
|
||||||
Unrealized net capital gains and losses
|
|
467
|
|
|
(98
|
)
|
|
369
|
|
|
(90
|
)
|
|
20
|
|
|
(70
|
)
|
||||||
Unrealized foreign currency translation adjustments
|
|
(12
|
)
|
|
2
|
|
|
(10
|
)
|
|
(18
|
)
|
|
4
|
|
|
(14
|
)
|
||||||
Unamortized pension and other postretirement prior service credit (1)
|
|
(15
|
)
|
|
3
|
|
|
(12
|
)
|
|
(19
|
)
|
|
4
|
|
|
(15
|
)
|
||||||
Other comprehensive income (loss)
|
|
$
|
440
|
|
|
$
|
(93
|
)
|
|
$
|
347
|
|
|
$
|
(127
|
)
|
|
$
|
28
|
|
|
$
|
(99
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
Nine months ended September 30,
|
||||||||||||||||||||||
|
|
2019
|
|
2018
|
||||||||||||||||||||
|
|
Pre-tax
|
|
Tax
|
|
After-tax
|
|
Pre-tax
|
|
Tax
|
|
After-tax
|
||||||||||||
Unrealized net holding gains and losses arising during the period, net of related offsets
|
|
$
|
2,811
|
|
|
$
|
(593
|
)
|
|
$
|
2,218
|
|
|
$
|
(1,103
|
)
|
|
$
|
233
|
|
|
$
|
(870
|
)
|
Less: reclassification adjustment of realized capital gains and losses
|
|
244
|
|
|
(51
|
)
|
|
193
|
|
|
(129
|
)
|
|
27
|
|
|
(102
|
)
|
||||||
Unrealized net capital gains and losses
|
|
2,567
|
|
|
(542
|
)
|
|
2,025
|
|
|
(974
|
)
|
|
206
|
|
|
(768
|
)
|
||||||
Unrealized foreign currency translation adjustments
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|
(28
|
)
|
|
6
|
|
|
(22
|
)
|
||||||
Unamortized pension and other postretirement prior service credit (1)
|
|
(44
|
)
|
|
9
|
|
|
(35
|
)
|
|
(58
|
)
|
|
13
|
|
|
(45
|
)
|
||||||
Other comprehensive income (loss)
|
|
$
|
2,522
|
|
|
$
|
(533
|
)
|
|
$
|
1,989
|
|
|
$
|
(1,060
|
)
|
|
$
|
225
|
|
|
$
|
(835
|
)
|
(1)
|
Represents prior service credits reclassified out of other comprehensive income and amortized into operating costs and expenses.
|
• Better serve customers
|
• Achieve target economic returns on capital
|
• Grow customer base
|
• Proactively manage investments
|
• Build long-term growth platforms
|
• Realized capital gains and losses, after-tax, except for periodic settlements and accruals on non-hedge derivative instruments, which are reported with realized capital gains and losses but included in adjusted net income
|
• Pension and other postretirement remeasurement gains and losses, after-tax
|
• Valuation changes on embedded derivatives not hedged, after-tax
|
• Amortization of DAC and deferred sales inducement costs (“DSI”), to the extent they resulted from the recognition of certain realized capital gains and losses or valuation changes on embedded derivatives not hedged, after-tax
|
• Business combination expenses and the amortization or impairment of purchased intangibles, after-tax
|
• Gain (loss) on disposition of operations, after-tax
|
• 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
|
Consolidated net income
|
||||
($ in millions)
|
Consolidated net income applicable to common shareholders decreased 5.6% in the third quarter of 2019 compared to the same period of 2018, primarily due to pension and other postretirement remeasurement losses in 2019 compared to gains in 2018, higher Allstate Protection non-catastrophes claim and claims expense and higher amortization of DAC, partially offset by higher premiums earned. Consolidated net income applicable to common shareholders increased 14.4% in the first nine months of 2019 compared to the same period of 2018 primarily due to higher premiums earned and net realized capital gains, partially offset by higher Allstate Protection claim and claim expense and pension and other postretirement remeasurement losses.
The Property-Liability combined ratios were 91.6 and 93.1 in the third quarter and first nine months of 2019, respectively, compared to 93.9 and 92.0 in the third quarter and first nine months of 2018, respectively.
|
Total revenue
|
||||
($ in millions)
|
Total revenue increased 5.8% and 9.5% in the third quarter and first nine months of 2019, respectively, compared to the prior year periods, driven by higher net realized capital gains and a 5.6% and 5.8% increase in insurance premiums and contract charges in the third quarter and first nine months of 2019, respectively. Insurance premiums earned increased in the following segments: Allstate Protection (Allstate and Esurance brands), Service Businesses (Allstate Protection Plans and Allstate Dealer Services), Allstate Life and Allstate Benefits.
|
Net investment income
|
||||
($ in millions)
|
Net investment income increased 4.3% and 0.7% in the third quarter and first nine months of 2019 compared to the prior year periods, primarily due to higher income from market-based portfolios, partially offset by lower performance-based investment results, mainly from limited partnerships.
|
|
|
Q1
|
|
Q2
|
|
Q3
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
($ in millions)
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Revenues
|
|
|
|
|
|
|
|
|
||||||||
Property and casualty insurance premiums
|
|
$
|
9,094
|
|
|
$
|
8,595
|
|
|
$
|
26,882
|
|
|
$
|
25,341
|
|
Life premiums and contract charges
|
|
625
|
|
|
612
|
|
|
1,874
|
|
|
1,840
|
|
||||
Other revenue
|
|
273
|
|
|
238
|
|
|
794
|
|
|
682
|
|
||||
Net investment income
|
|
880
|
|
|
844
|
|
|
2,470
|
|
|
2,454
|
|
||||
Realized capital gains and losses
|
|
197
|
|
|
176
|
|
|
1,183
|
|
|
17
|
|
||||
Total revenues
|
|
11,069
|
|
|
10,465
|
|
|
33,203
|
|
|
30,334
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Costs and expenses
|
|
|
|
|
|
|
|
|
||||||||
Property and casualty insurance claims and claims expense
|
|
(6,051
|
)
|
|
(5,805
|
)
|
|
(18,227
|
)
|
|
(16,711
|
)
|
||||
Life contract benefits and interest credited to contractholder funds
|
|
(682
|
)
|
|
(661
|
)
|
|
(2,008
|
)
|
|
(1,974
|
)
|
||||
Amortization of deferred policy acquisition costs
|
|
(1,425
|
)
|
|
(1,317
|
)
|
|
(4,151
|
)
|
|
(3,886
|
)
|
||||
Other expenses
|
|
(1,494
|
)
|
|
(1,520
|
)
|
|
(4,446
|
)
|
|
(4,392
|
)
|
||||
Pension and other postretirement remeasurement gains and losses
|
|
(225
|
)
|
|
39
|
|
|
(365
|
)
|
|
32
|
|
||||
Amortization of purchased intangibles
|
|
(32
|
)
|
|
(24
|
)
|
|
(96
|
)
|
|
(69
|
)
|
||||
Impairment of purchased intangibles
|
|
—
|
|
|
—
|
|
|
(55
|
)
|
|
—
|
|
||||
Total costs and expenses
|
|
(9,909
|
)
|
|
(9,288
|
)
|
|
(29,348
|
)
|
|
(27,000
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Gain on disposition of operations
|
|
—
|
|
|
1
|
|
|
3
|
|
|
4
|
|
||||
Income tax expense
|
|
(229
|
)
|
|
(199
|
)
|
|
(784
|
)
|
|
(636
|
)
|
||||
Net income
|
|
931
|
|
|
979
|
|
|
3,074
|
|
|
2,702
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Preferred stock dividends
|
|
(42
|
)
|
|
(37
|
)
|
|
(103
|
)
|
|
(105
|
)
|
||||
Net income applicable to common shareholders
|
|
$
|
889
|
|
|
$
|
942
|
|
|
$
|
2,971
|
|
|
$
|
2,597
|
|
•
|
Loss ratio: the ratio of claims and claims expense to premiums earned. Loss ratios include the impact of catastrophe losses.
|
•
|
Expense ratio: the ratio of amortization of DAC, operating costs and expenses, amortization of purchased intangibles and restructuring and related charges, less other revenue to premiums earned.
|
•
|
Combined ratio: the ratio of claims and claims expense, amortization of DAC, operating costs and expenses, amortization of purchased intangibles and restructuring and related charges, less other revenue to premiums earned. The combined ratio is the sum of the loss ratio and the expense ratio. The difference between 100% and the combined ratio represents underwriting income as a percentage of premiums earned, or underwriting margin.
|
•
|
Effect of catastrophe losses on combined ratio: the ratio of catastrophe losses included in claims and claims expense to premiums earned. This ratio includes prior year reserve reestimates of catastrophe losses.
|
•
|
Effect of prior year reserve reestimates on combined ratio: the ratio of prior year reserve reestimates included in claims and claims expense to premiums earned. This ratio includes prior year reserve reestimates of catastrophe losses.
|
•
|
Effect of amortization of purchased intangibles on combined ratio: the ratio of amortization of purchased intangibles to premiums earned.
|
•
|
Effect of restructuring and related charges on combined ratio: the ratio of restructuring and related charges to premiums earned.
|
•
|
Effect of Discontinued Lines and Coverages on combined ratio: the ratio of claims and claims expense and operating costs and expenses in the Discontinued Lines and Coverages segment to Property-Liability premiums earned. The sum of the effect of Discontinued Lines and Coverages on the combined ratio and the Allstate Protection combined ratio is equal to the Property-Liability combined ratio.
|
Summarized financial data
|
|
|
|
|
||||||||||||
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
($ in millions, except ratios)
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Premiums written
|
|
$
|
9,312
|
|
|
$
|
8,800
|
|
|
$
|
26,682
|
|
|
$
|
25,185
|
|
|
|
|
|
|
|
|
|
|
||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Premiums earned
|
|
$
|
8,782
|
|
|
$
|
8,320
|
|
|
$
|
25,970
|
|
|
$
|
24,528
|
|
Other revenue
|
|
195
|
|
|
192
|
|
|
561
|
|
|
550
|
|
||||
Net investment income
|
|
448
|
|
|
410
|
|
|
1,210
|
|
|
1,100
|
|
||||
Realized capital gains and losses
|
|
163
|
|
|
126
|
|
|
916
|
|
|
16
|
|
||||
Total revenues
|
|
9,588
|
|
|
9,048
|
|
|
28,657
|
|
|
26,194
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Costs and expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Claims and claims expense
|
|
(5,960
|
)
|
|
(5,717
|
)
|
|
(17,962
|
)
|
|
(16,444
|
)
|
||||
Amortization of DAC
|
|
(1,167
|
)
|
|
(1,133
|
)
|
|
(3,494
|
)
|
|
(3,331
|
)
|
||||
Operating costs and expenses
|
|
(1,114
|
)
|
|
(1,143
|
)
|
|
(3,245
|
)
|
|
(3,285
|
)
|
||||
Restructuring and related charges
|
|
1
|
|
|
(12
|
)
|
|
(26
|
)
|
|
(51
|
)
|
||||
Total costs and expenses
|
|
(8,240
|
)
|
|
(8,005
|
)
|
|
(24,727
|
)
|
|
(23,111
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Income tax expense
|
|
(272
|
)
|
|
(211
|
)
|
|
(809
|
)
|
|
(631
|
)
|
||||
Net income applicable to common shareholders
|
|
$
|
1,076
|
|
|
$
|
832
|
|
|
$
|
3,121
|
|
|
$
|
2,452
|
|
|
|
|
|
|
|
|
|
|
||||||||
Underwriting income
|
|
$
|
737
|
|
|
$
|
507
|
|
|
$
|
1,804
|
|
|
$
|
1,967
|
|
Net investment income
|
|
448
|
|
|
410
|
|
|
1,210
|
|
|
1,100
|
|
||||
Income tax expense on operations
|
|
(236
|
)
|
|
(185
|
)
|
|
(617
|
)
|
|
(628
|
)
|
||||
Realized capital gains and losses, after-tax
|
|
127
|
|
|
103
|
|
|
724
|
|
|
16
|
|
||||
Tax Legislation expense
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
(3
|
)
|
||||
Net income applicable to common shareholders
|
|
$
|
1,076
|
|
|
$
|
832
|
|
|
$
|
3,121
|
|
|
$
|
2,452
|
|
|
|
|
|
|
|
|
|
|
||||||||
Catastrophe losses
|
|
|
|
|
|
|
|
|
||||||||
Catastrophe losses, excluding reserve reestimates
|
|
$
|
513
|
|
|
$
|
624
|
|
|
$
|
2,209
|
|
|
$
|
1,847
|
|
Catastrophe reserve reestimates (1)
|
|
(3
|
)
|
|
1
|
|
|
53
|
|
|
45
|
|
||||
Total catastrophe losses
|
|
$
|
510
|
|
|
$
|
625
|
|
|
$
|
2,262
|
|
|
$
|
1,892
|
|
|
|
|
|
|
|
|
|
|
||||||||
GAAP operating ratios
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Loss ratio
|
|
67.9
|
|
|
68.7
|
|
|
69.2
|
|
|
67.1
|
|
||||
Expense ratio (2)
|
|
23.7
|
|
|
25.2
|
|
|
23.9
|
|
|
24.9
|
|
||||
Combined ratio
|
|
91.6
|
|
|
93.9
|
|
|
93.1
|
|
|
92.0
|
|
||||
Effect of catastrophe losses on combined ratio
|
|
5.8
|
|
|
7.5
|
|
|
8.7
|
|
|
7.7
|
|
||||
Effect of prior year reserve reestimates on combined ratio (3)
|
|
(0.5
|
)
|
|
0.2
|
|
|
(0.4
|
)
|
|
(0.5
|
)
|
||||
Effect of catastrophe losses included in prior year reserve reestimates on combined ratio
|
|
—
|
|
|
—
|
|
|
0.2
|
|
|
0.2
|
|
||||
Effect of restructuring and related charges on combined ratio
|
|
—
|
|
|
0.1
|
|
|
0.1
|
|
|
0.2
|
|
||||
Effect of Discontinued Lines and Coverages on combined ratio
|
|
1.1
|
|
|
1.0
|
|
|
0.5
|
|
|
0.4
|
|
(1)
|
Favorable reserve reestimates are shown in parentheses. Prior year reserve reestimates included a $7 million reduction of reinstatement reinsurance premiums for the three months ended September 30, 2019 and an increase of $13 million for the nine months ended September 30, 2019 related to the 2018 Camp Fire.
|
(2)
|
Other revenue is deducted from operating costs and expenses in the expense ratio calculation.
|
(3)
|
Prior year reserve reestimates totaled $44 million and $115 million favorable in the three and nine months ended September 30, 2019, respectively, compared to $13 million unfavorable and $133 million favorable in the same periods of 2018, respectively.
|
Net investment income
|
|
|
|
|
|
|
|
|
||||||||
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
($ in millions)
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Fixed income securities
|
|
$
|
272
|
|
|
$
|
240
|
|
|
$
|
796
|
|
|
$
|
690
|
|
Equity securities
|
|
44
|
|
|
24
|
|
|
116
|
|
|
93
|
|
||||
Mortgage loans
|
|
4
|
|
|
5
|
|
|
12
|
|
|
13
|
|
||||
Limited partnership interests
|
|
128
|
|
|
136
|
|
|
286
|
|
|
301
|
|
||||
Short-term investments
|
|
13
|
|
|
11
|
|
|
44
|
|
|
26
|
|
||||
Other
|
|
27
|
|
|
33
|
|
|
80
|
|
|
93
|
|
||||
Investment income, before expense
|
|
488
|
|
|
449
|
|
|
1,334
|
|
|
1,216
|
|
||||
Investment expense (1) (2)
|
|
(40
|
)
|
|
(39
|
)
|
|
(124
|
)
|
|
(116
|
)
|
||||
Net investment income
|
|
$
|
448
|
|
|
$
|
410
|
|
|
$
|
1,210
|
|
|
$
|
1,100
|
|
(1)
|
Investment expense includes $11 million and $10 million of investee level expenses in the third quarter of 2019 and 2018, respectively, and $38 million and $34 million in the first nine months of 2019 and 2018, respectively. Investee level expenses include depreciation and asset level operating expenses on directly held real estate and other consolidated investments.
|
(2)
|
Investment expense includes $7 million and $6 million related to the portion of reinvestment income on securities lending collateral paid to the counterparties in the third quarter of 2019 and 2018, respectively, and $22 million and $12 million in the first nine months of 2019 and 2018, respectively.
|
Realized capital gains and losses
|
|
|
|
|
|
|
|
|
||||||||
($ in millions)
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|||||||||
Impairment write-downs
|
|
$
|
(6
|
)
|
|
$
|
(1
|
)
|
|
$
|
(23
|
)
|
|
$
|
(3
|
)
|
Sales
|
|
124
|
|
|
(16
|
)
|
|
332
|
|
|
(104
|
)
|
||||
Valuation of equity investments
|
|
13
|
|
|
142
|
|
|
607
|
|
|
114
|
|
||||
Valuation and settlements of derivative instruments
|
|
32
|
|
|
1
|
|
|
—
|
|
|
9
|
|
||||
Realized capital gains and losses, pre-tax
|
|
163
|
|
|
126
|
|
|
916
|
|
|
16
|
|
||||
Income tax expense
|
|
(36
|
)
|
|
(23
|
)
|
|
(192
|
)
|
|
—
|
|
||||
Realized capital gains and losses, after-tax
|
|
$
|
127
|
|
|
$
|
103
|
|
|
$
|
724
|
|
|
$
|
16
|
|
Underwriting results
|
|
|
|
|
|
|
|
|
||||||||
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
($ in millions)
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Premiums written
|
|
$
|
9,312
|
|
|
$
|
8,800
|
|
|
$
|
26,682
|
|
|
$
|
25,185
|
|
Premiums earned
|
|
$
|
8,782
|
|
|
$
|
8,320
|
|
|
$
|
25,970
|
|
|
$
|
24,528
|
|
Other revenue
|
|
195
|
|
|
192
|
|
|
561
|
|
|
550
|
|
||||
Claims and claims expense
|
|
(5,862
|
)
|
|
(5,637
|
)
|
|
(17,859
|
)
|
|
(16,359
|
)
|
||||
Amortization of DAC
|
|
(1,167
|
)
|
|
(1,133
|
)
|
|
(3,494
|
)
|
|
(3,331
|
)
|
||||
Other costs and expenses
|
|
(1,113
|
)
|
|
(1,143
|
)
|
|
(3,243
|
)
|
|
(3,284
|
)
|
||||
Restructuring and related charges
|
|
1
|
|
|
(12
|
)
|
|
(26
|
)
|
|
(51
|
)
|
||||
Underwriting income
|
|
$
|
836
|
|
|
$
|
587
|
|
|
$
|
1,909
|
|
|
$
|
2,053
|
|
Catastrophe losses
|
|
$
|
510
|
|
|
$
|
625
|
|
|
$
|
2,262
|
|
|
$
|
1,892
|
|
|
|
|
|
|
|
|
|
|
||||||||
Underwriting income (loss) by line of business
|
||||||||||||||||
Auto
|
|
$
|
421
|
|
|
$
|
394
|
|
|
$
|
1,332
|
|
|
$
|
1,410
|
|
Homeowners
|
|
349
|
|
|
208
|
|
|
403
|
|
|
564
|
|
||||
Other personal lines (1)
|
|
50
|
|
|
13
|
|
|
130
|
|
|
128
|
|
||||
Commercial lines
|
|
1
|
|
|
(42
|
)
|
|
1
|
|
|
(84
|
)
|
||||
Other business lines (2)
|
|
16
|
|
|
15
|
|
|
45
|
|
|
39
|
|
||||
Answer Financial
|
|
(1
|
)
|
|
(1
|
)
|
|
(2
|
)
|
|
(4
|
)
|
||||
Underwriting income
|
|
$
|
836
|
|
|
$
|
587
|
|
|
$
|
1,909
|
|
|
$
|
2,053
|
|
(1)
|
Other personal lines include renters, condominium, landlord and other personal lines products.
|
(2)
|
Other business lines represent Ivantage, a general agency for Allstate exclusive agencies. Ivantage provides agencies a solution for their customers when coverage through Allstate brand underwritten products is not available.
|
Changes in underwriting results from prior year by component and by line of business (1)
|
||||||||||||||||||||||||||||||||||||||||
|
|
Three months ended September 30,
|
||||||||||||||||||||||||||||||||||||||
|
|
Auto
|
|
Homeowners
|
|
Other personal lines
|
|
Commercial lines
|
|
Allstate Protection (2)
|
||||||||||||||||||||||||||||||
($ in millions)
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||||||||||||||
Underwriting income (loss) - prior period
|
|
$
|
394
|
|
|
$
|
187
|
|
|
$
|
208
|
|
|
$
|
320
|
|
|
$
|
13
|
|
|
$
|
(24
|
)
|
|
$
|
(42
|
)
|
|
$
|
(17
|
)
|
|
$
|
587
|
|
|
$
|
480
|
|
Changes in underwriting income (loss) from:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Increase (decrease) premiums earned
|
|
282
|
|
|
297
|
|
|
106
|
|
|
59
|
|
|
14
|
|
|
16
|
|
|
60
|
|
|
52
|
|
|
462
|
|
|
424
|
|
||||||||||
Increase (decrease) other revenue
|
|
5
|
|
|
5
|
|
|
—
|
|
|
2
|
|
|
1
|
|
|
(2
|
)
|
|
(1
|
)
|
|
—
|
|
|
3
|
|
|
7
|
|
||||||||||
(Increase) decrease incurred claims and claims expense (“losses”):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Incurred losses, excluding catastrophe losses and reserve reestimates
|
|
(300
|
)
|
|
(194
|
)
|
|
(54
|
)
|
|
(86
|
)
|
|
1
|
|
|
3
|
|
|
(58
|
)
|
|
(51
|
)
|
|
(411
|
)
|
|
(328
|
)
|
||||||||||
Catastrophe losses, excluding reserve reestimates
|
|
(17
|
)
|
|
259
|
|
|
100
|
|
|
(40
|
)
|
|
25
|
|
|
14
|
|
|
3
|
|
|
6
|
|
|
111
|
|
|
239
|
|
||||||||||
Catastrophe reserve reestimates
|
|
(3
|
)
|
|
—
|
|
|
4
|
|
|
(8
|
)
|
|
2
|
|
|
(1
|
)
|
|
1
|
|
|
1
|
|
|
4
|
|
|
(8
|
)
|
||||||||||
Non-catastrophe reserve reestimates
|
|
57
|
|
|
(90
|
)
|
|
(19
|
)
|
|
(21
|
)
|
|
(8
|
)
|
|
(2
|
)
|
|
41
|
|
|
(36
|
)
|
|
71
|
|
|
(149
|
)
|
||||||||||
Losses subtotal
|
|
(263
|
)
|
|
(25
|
)
|
|
31
|
|
|
(155
|
)
|
|
20
|
|
|
14
|
|
|
(13
|
)
|
|
(80
|
)
|
|
(225
|
)
|
|
(246
|
)
|
||||||||||
(Increase) decrease expenses
|
|
3
|
|
|
(70
|
)
|
|
4
|
|
|
(18
|
)
|
|
2
|
|
|
9
|
|
|
(3
|
)
|
|
3
|
|
|
9
|
|
|
(78
|
)
|
||||||||||
Underwriting income (loss)
|
|
$
|
421
|
|
|
$
|
394
|
|
|
$
|
349
|
|
|
$
|
208
|
|
|
$
|
50
|
|
|
$
|
13
|
|
|
$
|
1
|
|
|
$
|
(42
|
)
|
|
$
|
836
|
|
|
$
|
587
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
|
Nine months ended September 30,
|
||||||||||||||||||||||||||||||||||||||
|
|
Auto
|
|
Homeowners
|
|
Other personal lines
|
|
Commercial lines
|
|
Allstate Protection (2)
|
||||||||||||||||||||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||||||||||||||
Underwriting income (loss) - prior period
|
|
$
|
1,410
|
|
|
$
|
892
|
|
|
$
|
564
|
|
|
$
|
431
|
|
|
$
|
128
|
|
|
$
|
54
|
|
|
$
|
(84
|
)
|
|
$
|
(21
|
)
|
|
$
|
2,053
|
|
|
$
|
1,392
|
|
Changes in underwriting income (loss) from:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Increase (decrease) premiums earned
|
|
951
|
|
|
767
|
|
|
287
|
|
|
141
|
|
|
36
|
|
|
48
|
|
|
168
|
|
|
110
|
|
|
1,442
|
|
|
1,066
|
|
||||||||||
Increase (decrease) other revenue
|
|
8
|
|
|
15
|
|
|
—
|
|
|
4
|
|
|
2
|
|
|
1
|
|
|
(1
|
)
|
|
(3
|
)
|
|
11
|
|
|
17
|
|
||||||||||
(Increase) decrease losses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Incurred losses, excluding catastrophe losses and reserve reestimates
|
|
(833
|
)
|
|
(358
|
)
|
|
(144
|
)
|
|
(193
|
)
|
|
9
|
|
|
(41
|
)
|
|
(170
|
)
|
|
(80
|
)
|
|
(1,138
|
)
|
|
(672
|
)
|
||||||||||
Catastrophe losses, excluding reserve reestimates
|
|
(77
|
)
|
|
358
|
|
|
(276
|
)
|
|
377
|
|
|
(14
|
)
|
|
50
|
|
|
5
|
|
|
8
|
|
|
(362
|
)
|
|
793
|
|
||||||||||
Catastrophe reserve reestimates
|
|
(28
|
)
|
|
23
|
|
|
25
|
|
|
(86
|
)
|
|
(6
|
)
|
|
7
|
|
|
1
|
|
|
1
|
|
|
(8
|
)
|
|
(55
|
)
|
||||||||||
Non-catastrophe reserve reestimates
|
|
(17
|
)
|
|
(3
|
)
|
|
(38
|
)
|
|
(46
|
)
|
|
(26
|
)
|
|
8
|
|
|
89
|
|
|
(101
|
)
|
|
8
|
|
|
(142
|
)
|
||||||||||
Losses subtotal
|
|
(955
|
)
|
|
20
|
|
|
(433
|
)
|
|
52
|
|
|
(37
|
)
|
|
24
|
|
|
(75
|
)
|
|
(172
|
)
|
|
(1,500
|
)
|
|
(76
|
)
|
||||||||||
(Increase) decrease expenses
|
|
(82
|
)
|
|
(284
|
)
|
|
(15
|
)
|
|
(64
|
)
|
|
1
|
|
|
1
|
|
|
(7
|
)
|
|
2
|
|
|
(97
|
)
|
|
(346
|
)
|
||||||||||
Underwriting income (loss)
|
|
$
|
1,332
|
|
|
$
|
1,410
|
|
|
$
|
403
|
|
|
$
|
564
|
|
|
$
|
130
|
|
|
$
|
128
|
|
|
$
|
1
|
|
|
$
|
(84
|
)
|
|
$
|
1,909
|
|
|
$
|
2,053
|
|
(1)
|
The 2019 column presents changes in 2019 compared to 2018. The 2018 column presents changes in 2018 compared to 2017.
|
(2)
|
Includes other business lines underwriting income of $16 million and $15 million in the third quarter of 2019 and 2018, respectively, and $45 million and $39 million in the first nine months of 2019 and 2018, respectively. Includes Answer Financial underwriting loss of $1 million in both the third quarter of 2019 and 2018, and $2 million and $4 million in the first nine months of 2019 and 2018, respectively.
|
Premiums written and earned by line of business
|
|
|
|
|
|
|
|
|
||||||||
($ in millions)
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
Premiums written
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Auto
|
|
$
|
6,271
|
|
|
$
|
5,987
|
|
|
$
|
18,405
|
|
|
$
|
17,513
|
|
Homeowners
|
|
2,288
|
|
|
2,144
|
|
|
6,183
|
|
|
5,800
|
|
||||
Other personal lines
|
|
515
|
|
|
496
|
|
|
1,435
|
|
|
1,390
|
|
||||
Subtotal – Personal lines
|
|
9,074
|
|
|
8,627
|
|
|
26,023
|
|
|
24,703
|
|
||||
Commercial lines
|
|
238
|
|
|
173
|
|
|
659
|
|
|
482
|
|
||||
Total premiums written
|
|
$
|
9,312
|
|
|
$
|
8,800
|
|
|
$
|
26,682
|
|
|
$
|
25,185
|
|
Reconciliation of premiums written to premiums earned:
|
|
|
|
|
|
|
|
|
||||||||
Increase in unearned premiums
|
|
(538
|
)
|
|
(505
|
)
|
|
(743
|
)
|
|
(643
|
)
|
||||
Other
|
|
8
|
|
|
25
|
|
|
31
|
|
|
(14
|
)
|
||||
Total premiums earned
|
|
$
|
8,782
|
|
|
$
|
8,320
|
|
|
$
|
25,970
|
|
|
$
|
24,528
|
|
|
|
|
|
|
|
|
|
|
||||||||
Auto
|
|
$
|
6,080
|
|
|
$
|
5,798
|
|
|
$
|
18,045
|
|
|
$
|
17,094
|
|
Homeowners
|
|
1,997
|
|
|
1,891
|
|
|
5,890
|
|
|
5,603
|
|
||||
Other personal lines
|
|
469
|
|
|
455
|
|
|
1,390
|
|
|
1,354
|
|
||||
Subtotal – Personal lines
|
|
8,546
|
|
|
8,144
|
|
|
25,325
|
|
|
24,051
|
|
||||
Commercial lines
|
|
236
|
|
|
176
|
|
|
645
|
|
|
477
|
|
||||
Total premiums earned
|
|
$
|
8,782
|
|
|
$
|
8,320
|
|
|
$
|
25,970
|
|
|
$
|
24,528
|
|
Combined ratios by line of business
|
||||||||||||||||||
|
|
Loss ratio
|
|
Expense ratio (1)
|
|
Combined ratio
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||
Three months ended September 30,
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Auto
|
|
68.9
|
|
|
67.7
|
|
|
24.2
|
|
|
25.5
|
|
|
93.1
|
|
|
93.2
|
|
Homeowners
|
|
59.3
|
|
|
64.2
|
|
|
23.2
|
|
|
24.8
|
|
|
82.5
|
|
|
89.0
|
|
Other personal lines
|
|
62.7
|
|
|
69.0
|
|
|
26.6
|
|
|
28.1
|
|
|
89.3
|
|
|
97.1
|
|
Commercial lines
|
|
83.5
|
|
|
104.6
|
|
|
16.1
|
|
|
19.3
|
|
|
99.6
|
|
|
123.9
|
|
Total
|
|
66.8
|
|
|
67.7
|
|
|
23.7
|
|
|
25.2
|
|
|
90.5
|
|
|
92.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Nine months ended September 30,
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Auto
|
|
68.2
|
|
|
66.4
|
|
|
24.4
|
|
|
25.4
|
|
|
92.6
|
|
|
91.8
|
|
Homeowners
|
|
70.1
|
|
|
66.0
|
|
|
23.1
|
|
|
23.9
|
|
|
93.2
|
|
|
89.9
|
|
Other personal lines
|
|
64.4
|
|
|
63.3
|
|
|
26.2
|
|
|
27.2
|
|
|
90.6
|
|
|
90.5
|
|
Commercial lines
|
|
82.5
|
|
|
95.8
|
|
|
17.3
|
|
|
21.8
|
|
|
99.8
|
|
|
117.6
|
|
Total
|
|
68.7
|
|
|
66.7
|
|
|
23.9
|
|
|
24.9
|
|
|
92.6
|
|
|
91.6
|
|
(1)
|
Other revenue is deducted from operating costs and expenses in the expense ratio calculation.
|
Loss ratios by line of business
|
||||||||||||||||||||||||
|
|
Loss ratio
|
|
Effect of catastrophe losses
|
|
Effect of prior year reserve reestimates
|
|
Effect of catastrophe losses included in prior year reserve reestimates
|
||||||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Three months ended September 30,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Auto
|
|
68.9
|
|
|
67.7
|
|
|
2.4
|
|
|
2.1
|
|
|
(2.5
|
)
|
|
(1.7
|
)
|
|
—
|
|
|
(0.1
|
)
|
Homeowners
|
|
59.3
|
|
|
64.2
|
|
|
17.0
|
|
|
23.5
|
|
|
0.1
|
|
|
(0.7
|
)
|
|
0.1
|
|
|
0.3
|
|
Other personal lines
|
|
62.7
|
|
|
69.0
|
|
|
5.3
|
|
|
11.4
|
|
|
1.9
|
|
|
0.6
|
|
|
(0.4
|
)
|
|
—
|
|
Commercial lines
|
|
83.5
|
|
|
104.6
|
|
|
0.9
|
|
|
3.4
|
|
|
—
|
|
|
23.9
|
|
|
(0.4
|
)
|
|
—
|
|
Total
|
|
66.8
|
|
|
67.7
|
|
|
5.8
|
|
|
7.5
|
|
|
(1.6
|
)
|
|
(0.8
|
)
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Nine months ended September 30,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Auto
|
|
68.2
|
|
|
66.4
|
|
|
2.3
|
|
|
1.8
|
|
|
(1.7
|
)
|
|
(2.0
|
)
|
|
—
|
|
|
(0.2
|
)
|
Homeowners
|
|
70.1
|
|
|
66.0
|
|
|
28.9
|
|
|
25.8
|
|
|
1.0
|
|
|
0.8
|
|
|
1.0
|
|
|
1.5
|
|
Other personal lines
|
|
64.4
|
|
|
63.3
|
|
|
10.7
|
|
|
9.5
|
|
|
1.2
|
|
|
(1.1
|
)
|
|
0.3
|
|
|
(0.1
|
)
|
Commercial lines
|
|
82.5
|
|
|
95.8
|
|
|
1.0
|
|
|
2.7
|
|
|
2.6
|
|
|
22.4
|
|
|
(0.2
|
)
|
|
—
|
|
Total
|
|
68.7
|
|
|
66.7
|
|
|
8.7
|
|
|
7.7
|
|
|
(0.9
|
)
|
|
(0.9
|
)
|
|
0.2
|
|
|
0.2
|
|
Catastrophe losses by the size of event
|
||||||||||||||||||||
|
|
Three months ended September 30, 2019
|
||||||||||||||||||
($ in millions)
|
|
Number of events
|
|
|
|
Claims and claims expense
|
|
|
|
Combined
ratio
impact
|
|
Average catastrophe loss per event
|
||||||||
Size of catastrophe loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Greater than $250 million
|
|
—
|
|
|
—
|
%
|
|
$
|
—
|
|
|
—
|
%
|
|
—
|
|
|
$
|
—
|
|
$101 million to $250 million
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
$50 million to $100 million
|
|
2
|
|
|
7.1
|
|
|
178
|
|
|
34.9
|
|
|
2.0
|
|
|
89
|
|
||
Less than $50 million
|
|
26
|
|
|
92.9
|
|
|
314
|
|
|
61.6
|
|
|
3.6
|
|
|
12
|
|
||
Total
|
|
28
|
|
|
100.0
|
%
|
|
492
|
|
|
96.5
|
|
|
5.6
|
|
|
18
|
|
||
Prior year reserve reestimates
|
|
|
|
|
|
|
|
(3
|
)
|
|
(0.6
|
)
|
|
—
|
|
|
|
|
||
Prior quarter reserve reestimates
|
|
|
|
|
|
21
|
|
|
4.1
|
|
|
0.2
|
|
|
|
|||||
Total catastrophe losses
|
|
|
|
|
|
|
|
$
|
510
|
|
|
100.0
|
%
|
|
5.8
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
Nine months ended September 30, 2019
|
||||||||||||||||||
|
|
Number of events
|
|
|
|
Claims and claims expense
|
|
|
|
Combined
ratio
impact
|
|
Average catastrophe loss per event
|
||||||||
Size of catastrophe loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Greater than $250 million
|
|
1
|
|
|
1.1
|
%
|
|
$
|
360
|
|
|
15.9
|
%
|
|
1.4
|
|
|
$
|
360
|
|
$101 million to $250 million
|
|
1
|
|
|
1.1
|
|
|
194
|
|
|
8.6
|
|
|
0.7
|
|
|
194
|
|
||
$50 million to $100 million
|
|
9
|
|
|
10.4
|
|
|
666
|
|
|
29.5
|
|
|
2.6
|
|
|
74
|
|
||
Less than $50 million
|
|
76
|
|
|
87.4
|
|
|
989
|
|
|
43.7
|
|
|
3.8
|
|
|
13
|
|
||
Total
|
|
87
|
|
|
100.0
|
%
|
|
2,209
|
|
|
97.7
|
|
|
8.5
|
|
|
25
|
|
||
Prior year reserve reestimates
|
|
|
|
|
|
|
|
53
|
|
|
2.3
|
|
|
0.2
|
|
|
|
|||
Total catastrophe losses
|
|
|
|
|
|
|
|
$
|
2,262
|
|
|
100.0
|
%
|
|
8.7
|
|
|
|
Impact of specific costs and expenses on the expense ratio
|
|
|
|
|
|
|
|
|
||||
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||
Amortization of DAC
|
|
13.3
|
|
|
13.6
|
|
|
13.5
|
|
|
13.6
|
|
Advertising expense
|
|
2.3
|
|
|
2.9
|
|
|
2.2
|
|
|
2.3
|
|
Other costs and expenses (1)
|
|
8.1
|
|
|
8.6
|
|
|
8.1
|
|
|
8.8
|
|
Restructuring and related charges
|
|
—
|
|
|
0.1
|
|
|
0.1
|
|
|
0.2
|
|
Total expense ratio
|
|
23.7
|
|
|
25.2
|
|
|
23.9
|
|
|
24.9
|
|
Reserve reestimates
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||||||||||||||
|
|
Reserve
reestimate (1)
|
|
Effect on
combined ratio (2)
|
|
Reserve
reestimate (1)
|
|
Effect on
combined ratio (2)
|
||||||||||||||||||||
($ in millions, except ratios)
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||||||
Auto
|
|
$
|
(153
|
)
|
|
$
|
(99
|
)
|
|
(1.7
|
)
|
|
(1.2
|
)
|
|
$
|
(311
|
)
|
|
$
|
(356
|
)
|
|
(1.2
|
)
|
|
(1.4
|
)
|
Homeowners
|
|
2
|
|
|
(13
|
)
|
|
—
|
|
|
(0.1
|
)
|
|
59
|
|
|
46
|
|
|
0.2
|
|
|
0.2
|
|
||||
Other personal lines
|
|
9
|
|
|
3
|
|
|
0.1
|
|
|
—
|
|
|
17
|
|
|
(15
|
)
|
|
0.1
|
|
|
(0.1
|
)
|
||||
Commercial lines
|
|
—
|
|
|
42
|
|
|
—
|
|
|
0.5
|
|
|
17
|
|
|
107
|
|
|
—
|
|
|
0.4
|
|
||||
Total Allstate Protection (3)
|
|
$
|
(142
|
)
|
|
$
|
(67
|
)
|
|
(1.6
|
)
|
|
(0.8
|
)
|
|
$
|
(218
|
)
|
|
$
|
(218
|
)
|
|
(0.9
|
)
|
|
(0.9
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Allstate brand
|
|
$
|
(143
|
)
|
|
$
|
(64
|
)
|
|
(1.6
|
)
|
|
(0.8
|
)
|
|
$
|
(224
|
)
|
|
$
|
(216
|
)
|
|
(0.9
|
)
|
|
(0.9
|
)
|
Esurance brand
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Encompass brand
|
|
1
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
3
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
||||
Total Allstate Protection
|
|
$
|
(142
|
)
|
|
$
|
(67
|
)
|
|
(1.6
|
)
|
|
(0.8
|
)
|
|
$
|
(218
|
)
|
|
$
|
(218
|
)
|
|
(0.9
|
)
|
|
(0.9
|
)
|
(1)
|
Favorable reserve reestimates are shown in parentheses.
|
(2)
|
Ratios are calculated using Allstate Protection premiums earned.
|
(3)
|
Prior year reserve reestimates included in catastrophe losses totaled $3 million favorable and $53 million unfavorable in the three and nine months ended September 30, 2019, respectively, and $1 million and $45 million unfavorable in the three and nine months ended September 30, 2018, respectively.
|
Premiums written, policies in force and underwriting income (loss)
|
||||||||||||||||||||||||||||
($ in millions)
|
|
Allstate brand
|
|
Esurance brand
|
|
Encompass brand
|
|
Allstate Protection
|
||||||||||||||||||||
Premiums written
|
|
Amount
|
|
Percent to total brand
|
|
Amount
|
|
Percent to total brand
|
|
Amount
|
|
Percent to total brand
|
|
Amount
|
|
Percent to total
|
||||||||||||
Auto
|
|
$
|
16,466
|
|
|
67.8
|
%
|
|
$
|
1,526
|
|
|
94.0
|
%
|
|
$
|
413
|
|
|
52.9
|
%
|
|
$
|
18,405
|
|
|
69.0
|
%
|
Homeowners
|
|
5,784
|
|
|
23.8
|
|
|
92
|
|
|
5.6
|
|
|
307
|
|
|
39.4
|
|
|
6,183
|
|
|
23.2
|
|
||||
Other personal lines
|
|
1,369
|
|
|
5.7
|
|
|
6
|
|
|
0.4
|
|
|
60
|
|
|
7.7
|
|
|
1,435
|
|
|
5.4
|
|
||||
Commercial lines
|
|
659
|
|
|
2.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
659
|
|
|
2.4
|
|
||||
Total
|
|
$
|
24,278
|
|
|
100.0
|
%
|
|
$
|
1,624
|
|
|
100.0
|
%
|
|
$
|
780
|
|
|
100.0
|
%
|
|
$
|
26,682
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Percent to total Allstate Protection
|
|
|
|
91.0
|
%
|
|
|
|
6.1
|
%
|
|
|
|
2.9
|
%
|
|
|
|
100.0
|
%
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
PIF (thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Auto
|
|
20,339
|
|
|
65.3
|
%
|
|
1,543
|
|
|
91.0
|
%
|
|
496
|
|
|
61.4
|
%
|
|
22,378
|
|
|
66.5
|
%
|
||||
Homeowners
|
|
6,237
|
|
|
20.0
|
|
|
104
|
|
|
6.2
|
|
|
235
|
|
|
29.1
|
|
|
6,576
|
|
|
19.5
|
|
||||
Other personal lines
|
|
4,341
|
|
|
14.0
|
|
|
48
|
|
|
2.8
|
|
|
77
|
|
|
9.5
|
|
|
4,466
|
|
|
13.3
|
|
||||
Commercial lines
|
|
228
|
|
|
0.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
228
|
|
|
0.7
|
|
||||
Total
|
|
31,145
|
|
|
100.0
|
%
|
|
1,695
|
|
|
100.0
|
%
|
|
808
|
|
|
100.0
|
%
|
|
33,648
|
|
|
100.0
|
%
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Percent to total Allstate Protection
|
|
|
|
92.6
|
%
|
|
|
|
5.0
|
%
|
|
|
|
2.4
|
%
|
|
|
|
100.0
|
%
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Underwriting income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Auto
|
|
$
|
1,328
|
|
|
68.9
|
%
|
|
$
|
(2
|
)
|
|
33.3
|
%
|
|
$
|
6
|
|
|
(60.0
|
)%
|
|
$
|
1,332
|
|
|
69.8
|
%
|
Homeowners
|
|
424
|
|
|
22.0
|
|
|
(6
|
)
|
|
100.0
|
|
|
(15
|
)
|
|
150.0
|
|
|
403
|
|
|
21.1
|
|
||||
Other personal lines
|
|
129
|
|
|
6.7
|
|
|
2
|
|
|
(33.3
|
)
|
|
(1
|
)
|
|
10.0
|
|
|
130
|
|
|
6.8
|
|
||||
Commercial lines
|
|
1
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
0.1
|
|
||||
Other business lines
|
|
45
|
|
|
2.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
45
|
|
|
2.3
|
|
||||
Answer Financial
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
(0.1
|
)
|
||||
Total
|
|
$
|
1,927
|
|
|
100.0
|
%
|
|
$
|
(6
|
)
|
|
100.0
|
%
|
|
$
|
(10
|
)
|
|
100.0
|
%
|
|
$
|
1,909
|
|
|
100.0
|
%
|
•
|
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. Commercial lines PIF for shared economy agreements typically reflect contracts that cover multiple drivers as opposed to individual drivers.
|
•
|
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 Protection brand. Allstate brand includes automobiles added by existing customers when they exceed the number allowed (currently 10) on a policy.
|
•
|
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. Allstate and Esurance brand policy terms are 6 months for auto and 12 months for homeowners. Encompass brand policy terms are generally 12 months for auto and homeowners.
|
•
|
Renewal ratio: Renewal policy item counts issued during the period, based on contract effective dates, divided by the total policy item counts issued 6 months prior for auto (generally 12 months prior for Encompass brand) or 12 months prior for homeowners.
|
Underwriting results
|
|
|
|
|
|
|
|
|
||||||||
($ in millions)
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|||||||||
Premiums written
|
|
$
|
8,472
|
|
|
$
|
8,010
|
|
|
$
|
24,278
|
|
|
$
|
22,945
|
|
Premiums earned
|
|
$
|
7,997
|
|
|
$
|
7,587
|
|
|
$
|
23,651
|
|
|
$
|
22,386
|
|
Other revenue
|
|
153
|
|
|
152
|
|
|
439
|
|
|
431
|
|
||||
Claims and claims expense
|
|
(5,245
|
)
|
|
(5,109
|
)
|
|
(16,098
|
)
|
|
(14,815
|
)
|
||||
Amortization of DAC
|
|
(1,108
|
)
|
|
(1,076
|
)
|
|
(3,316
|
)
|
|
(3,157
|
)
|
||||
Other costs and expenses
|
|
(941
|
)
|
|
(956
|
)
|
|
(2,726
|
)
|
|
(2,751
|
)
|
||||
Restructuring and related charges
|
|
2
|
|
|
(11
|
)
|
|
(23
|
)
|
|
(43
|
)
|
||||
Underwriting income
|
|
$
|
858
|
|
|
$
|
587
|
|
|
$
|
1,927
|
|
|
$
|
2,051
|
|
Catastrophe losses
|
|
$
|
447
|
|
|
$
|
588
|
|
|
$
|
2,112
|
|
|
$
|
1,754
|
|
|
|
|
|
|
|
|
|
|
||||||||
Underwriting income (loss) by line of business
|
||||||||||||||||
Auto
|
|
$
|
429
|
|
|
$
|
391
|
|
|
$
|
1,328
|
|
|
$
|
1,387
|
|
Homeowners
|
|
361
|
|
|
217
|
|
|
424
|
|
|
591
|
|
||||
Other personal lines (1)
|
|
51
|
|
|
6
|
|
|
129
|
|
|
118
|
|
||||
Commercial lines
|
|
1
|
|
|
(42
|
)
|
|
1
|
|
|
(84
|
)
|
||||
Other business lines (2)
|
|
16
|
|
|
15
|
|
|
45
|
|
|
39
|
|
||||
Underwriting income
|
|
$
|
858
|
|
|
$
|
587
|
|
|
$
|
1,927
|
|
|
$
|
2,051
|
|
(1)
|
Other personal lines include renters, condominium, landlord and other personal lines products.
|
(2)
|
Other business lines represent Ivantage.
|
(1)
|
The 2019 column presents changes in 2019 compared to 2018. The 2018 column presents changes in 2018 compared to 2017.
|
Auto premium measures and statistics
|
|
|
|
|
|
|
|
|
||||||||
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
PIF (thousands)
|
|
20,339
|
|
|
19,912
|
|
|
20,339
|
|
|
19,912
|
|
||||
New issued applications (thousands)
|
|
753
|
|
|
755
|
|
|
2,248
|
|
|
2,223
|
|
||||
Average premium (6-month policy)
|
|
$
|
589
|
|
|
$
|
572
|
|
|
$
|
583
|
|
|
$
|
567
|
|
Renewal ratio (%)
|
|
88.6
|
|
|
88.7
|
|
|
88.7
|
|
|
88.5
|
|
||||
Approved rate changes (1):
|
|
|
|
|
|
|
|
|
||||||||
Number of locations (2)
|
|
24
|
|
|
20
|
|
|
43
|
|
|
42
|
|
||||
Total brand (%) (3) (5)
|
|
0.5
|
|
|
—
|
|
|
1.9
|
|
|
0.8
|
|
||||
Location specific (%) (4) (5)
|
|
3.1
|
|
|
1.0
|
|
|
3.8
|
|
|
2.7
|
|
(1)
|
Rate changes do not include rating plan enhancements, including the introduction of discounts and surcharges that result in no change in the overall rate level in a location. These rate changes do not reflect initial rates filed for insurance subsidiaries initially writing business in a location.
|
(2)
|
Allstate brand operates in 50 states, the District of Columbia and 5 Canadian provinces.
|
(3)
|
Represents the impact in the states, the District of Columbia and Canadian provinces where rate changes were approved during the period as a percentage of total brand 2018 and 2017 premiums written, respectively.
|
(4)
|
Represents the impact in the states, the District of Columbia and Canadian provinces where rate changes were approved during the period as a percentage of their respective total 2018 and 2017 premiums written in those same locations.
|
(5)
|
Based on historical premiums written in the locations noted above, the annual impact of rate changes approved for auto totaled $110 million and $407 million in the three and nine months ended September 30, 2019, respectively, compared to $12 million and $165 million in the three and nine months ended September 30, 2018, respectively.
|
•
|
2.1% or 427 thousand increase in PIF as of September 30, 2019 compared to September 30, 2018. Auto PIF increased in 37 states, including 6 of our largest 10 states, as of September 30, 2019 compared to September 30, 2018.
|
•
|
0.1 point decrease and 0.2 point increase in the renewal ratio in the third quarter and first nine months of 2019, respectively, compared to the same periods of 2018.
|
•
|
0.3% decrease and 1.1% increase in new issued applications in the third quarter and first nine months of 2019, respectively, compared to the same periods of 2018.
|
•
|
3.0% and 2.8% increase in average premium in the third quarter and first nine months of 2019, respectively, compared to the same periods of 2018, primarily due to rate increases.
|
Homeowners premium measures and statistics
|
|
|
|
|
|
|
|
|
||||||||
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
PIF (thousands)
|
|
6,237
|
|
|
6,145
|
|
|
6,237
|
|
|
6,145
|
|
||||
New issued applications (thousands)
|
|
226
|
|
|
219
|
|
|
652
|
|
|
629
|
|
||||
Average premium (12-month policy)
|
|
$
|
1,308
|
|
|
$
|
1,238
|
|
|
$
|
1,292
|
|
|
$
|
1,227
|
|
Renewal ratio (%)
|
|
88.4
|
|
|
88.3
|
|
|
88.3
|
|
|
87.9
|
|
||||
Approved rate changes (1):
|
|
|
|
|
|
|
|
|
||||||||
Number of locations (2)
|
|
12
|
|
|
10
|
|
|
32
|
|
|
28
|
|
||||
Total brand (%) (3)
|
|
0.3
|
|
|
0.4
|
|
|
2.5
|
|
|
1.6
|
|
||||
Location specific (%) (3)
|
|
3.5
|
|
|
3.6
|
|
|
5.1
|
|
|
4.1
|
|
(1)
|
Includes rate changes approved based on our net cost of reinsurance.
|
(2)
|
Allstate brand operates in 50 states, the District of Columbia and 5 Canadian provinces.
|
(3)
|
Based on historical premiums written in the locations noted above, the annual impact of rate changes approved for homeowners totaled $21 million and $184 million in the three and nine months ended September 30, 2019, respectively, compared to $30 million and $115 million in the three and nine months ended September 30, 2018, respectively.
|
•
|
1.5% or 92 thousand increase in PIF as of September 30, 2019 compared to September 30, 2018. Homeowners PIF increased in 33 states, including 6 of our largest 10 states, as of September 30, 2019 compared to September 30, 2018.
|
•
|
0.1 point and 0.4 point increase in the renewal ratio in the third quarter and first nine months of 2019, respectively, compared to the same periods of 2018.
|
•
|
3.2% and 3.7% increase in new issued applications in the third quarter and first nine months of 2019, respectively, compared to the same periods of 2018.
|
•
|
5.7% and 5.3% increase in average premium in the third quarter and first nine months of 2019, respectively, compared to the same periods of 2018, primarily due to rate increases and inflationary increases in insured home valuations.
|
•
|
$10 million increase in the cost of our catastrophe reinsurance program to $75 million in the third quarter of 2019 from $65 million in the third quarter of 2018, and $12 million increase to $211 million in the first nine months of 2019 from $199 million in the first nine months of 2018. Catastrophe placement premiums are recorded primarily in the Allstate brand and are a reduction of premium.
|
Combined ratios by line of business
|
||||||||||||||||||
|
|
Loss ratio
|
|
Expense ratio (1)
|
|
Combined ratio
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||
Three months ended September 30,
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Auto
|
|
67.7
|
|
|
67.1
|
|
|
24.4
|
|
|
25.4
|
|
|
92.1
|
|
|
92.5
|
|
Homeowners
|
|
57.9
|
|
|
63.6
|
|
|
22.8
|
|
|
24.1
|
|
|
80.7
|
|
|
87.7
|
|
Other personal lines
|
|
62.0
|
|
|
70.6
|
|
|
26.6
|
|
|
28.0
|
|
|
88.6
|
|
|
98.6
|
|
Commercial lines
|
|
83.5
|
|
|
104.6
|
|
|
16.1
|
|
|
19.3
|
|
|
99.6
|
|
|
123.9
|
|
Total
|
|
65.6
|
|
|
67.4
|
|
|
23.7
|
|
|
24.9
|
|
|
89.3
|
|
|
92.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Nine months ended September 30,
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Auto
|
|
67.2
|
|
|
65.7
|
|
|
24.6
|
|
|
25.3
|
|
|
91.8
|
|
|
91.0
|
|
Homeowners
|
|
69.8
|
|
|
65.4
|
|
|
22.5
|
|
|
23.3
|
|
|
92.3
|
|
|
88.7
|
|
Other personal lines
|
|
64.2
|
|
|
64.0
|
|
|
26.1
|
|
|
26.8
|
|
|
90.3
|
|
|
90.8
|
|
Commercial lines
|
|
82.5
|
|
|
95.8
|
|
|
17.3
|
|
|
21.8
|
|
|
99.8
|
|
|
117.6
|
|
Total
|
|
68.1
|
|
|
66.2
|
|
|
23.8
|
|
|
24.6
|
|
|
91.9
|
|
|
90.8
|
|
(1)
|
Other revenue is deducted from operating costs and expenses in the expense ratio calculation.
|
• Paid claim frequency (1) is calculated as annualized notice counts closed with payment in the period divided by the average of PIF with the applicable coverage during the period.
|
• Gross claim frequency (1) is calculated as annualized notice counts received in the period divided by the average of PIF with the applicable coverage during the period. Gross claim frequency includes all actual notice counts, regardless of their current status (open or closed) or their ultimate disposition (closed with a payment or closed without payment).
|
• Paid claim severity is calculated by dividing the sum of paid losses and loss expenses by claims closed with a payment during the period.
|
• Percent change in frequency or severity statistic is calculated as the amount of increase or decrease in the paid or gross claim frequency or severity in the current period compared to the same period in the prior year divided by the prior year paid or gross claim frequency or severity.
|
(1)
|
Frequency statistics exclude counts associated with catastrophe events.
|
Impact of specific costs and expenses on the expense ratio
|
|
|
|
|
|
|
|
|
||||
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||
Amortization of DAC
|
|
13.8
|
|
|
14.2
|
|
|
14.0
|
|
|
14.1
|
|
Advertising expense
|
|
2.1
|
|
|
2.5
|
|
|
2.0
|
|
|
2.1
|
|
Other costs and expenses (1)
|
|
7.8
|
|
|
8.1
|
|
|
7.7
|
|
|
8.2
|
|
Restructuring and related charges
|
|
—
|
|
|
0.1
|
|
|
0.1
|
|
|
0.2
|
|
Total expense ratio
|
|
23.7
|
|
|
24.9
|
|
|
23.8
|
|
|
24.6
|
|
(1)
|
Other revenue is deducted from other costs and expenses in the expense ratio calculation.
|
Underwriting results
|
||||||||||||||||
($ in millions)
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|||||||||
Premiums written
|
|
$
|
562
|
|
|
$
|
519
|
|
|
$
|
1,624
|
|
|
$
|
1,471
|
|
Premiums earned
|
|
$
|
528
|
|
|
$
|
479
|
|
|
$
|
1,555
|
|
|
$
|
1,375
|
|
Other revenue
|
|
23
|
|
|
21
|
|
|
63
|
|
|
61
|
|
||||
Claims and claims expense
|
|
(424
|
)
|
|
(366
|
)
|
|
(1,227
|
)
|
|
(1,051
|
)
|
||||
Amortization of DAC
|
|
(11
|
)
|
|
(10
|
)
|
|
(34
|
)
|
|
(31
|
)
|
||||
Other costs and expenses
|
|
(122
|
)
|
|
(134
|
)
|
|
(363
|
)
|
|
(368
|
)
|
||||
Restructuring and related charges
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
||||
Underwriting loss
|
|
$
|
(6
|
)
|
|
$
|
(10
|
)
|
|
$
|
(6
|
)
|
|
$
|
(16
|
)
|
Catastrophe losses
|
|
$
|
16
|
|
|
$
|
14
|
|
|
$
|
47
|
|
|
$
|
46
|
|
|
|
|
|
|
|
|
|
|
||||||||
Underwriting income (loss) by line of business
|
||||||||||||||||
Auto
|
|
$
|
(9
|
)
|
|
$
|
(5
|
)
|
|
$
|
(2
|
)
|
|
$
|
1
|
|
Homeowners
|
|
1
|
|
|
(6
|
)
|
|
(6
|
)
|
|
(18
|
)
|
||||
Other personal lines
|
|
2
|
|
|
1
|
|
|
2
|
|
|
1
|
|
||||
Underwriting loss
|
|
$
|
(6
|
)
|
|
$
|
(10
|
)
|
|
$
|
(6
|
)
|
|
$
|
(16
|
)
|
(1)
|
The 2019 column presents changes in 2019 compared to 2018. The 2018 column presents changes in 2018 compared to 2017.
|
Auto premium measures and statistics
|
|
|
|
|
||||||||||||
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
PIF (thousands)
|
|
1,543
|
|
|
1,463
|
|
|
1,543
|
|
|
1,463
|
|
||||
New issued applications (thousands)
|
|
149
|
|
|
166
|
|
|
474
|
|
|
480
|
|
||||
Average premium (6-month policy)
|
|
$
|
626
|
|
|
$
|
603
|
|
|
$
|
621
|
|
|
$
|
603
|
|
Renewal ratio (%)
|
|
81.9
|
|
|
82.9
|
|
|
83.2
|
|
|
83.5
|
|
||||
Approved rate changes (1):
|
|
|
|
|
|
|
|
|
||||||||
Number of locations (2)
|
|
15
|
|
|
14
|
|
|
26
|
|
|
25
|
|
||||
Total brand (%) (3) (5)
|
|
1.1
|
|
|
0.9
|
|
|
4.1
|
|
|
1.6
|
|
||||
Location specific (%) (4) (5)
|
|
2.8
|
|
|
3.4
|
|
|
4.8
|
|
|
3.4
|
|
(1)
|
Rate changes do not include rating plan enhancements, including the introduction of discounts and surcharges that result in no change in the overall rate level in a location. These rate changes do not reflect initial rates filed for insurance subsidiaries initially writing business in a location.
|
(2)
|
Esurance brand operates in 43 states.
|
(3)
|
Represents the impact in the states where rate changes were approved during the period as a percentage of total brand 2018 and 2017 premiums written, respectively.
|
(4)
|
Represents the impact in the states where rate changes were approved during the period as a percentage of their respective total 2018 and 2017 premiums written in those same locations.
|
(5)
|
Based on historical premiums written in the locations noted above, the annual impact of rate changes approved for auto totaled $20 million and $74 million in the three and nine months ended September 30, 2019, respectively, compared to $13 million and $25 million in the three and nine months ended September 30, 2018, respectively.
|
•
|
5.5% or 80 thousand increase in PIF as of September 30, 2019 compared to September 30, 2018.
|
•
|
10.2% and 1.3% decrease in new issued applications in the third quarter and first nine months of 2019,
|
•
|
1.0 point and 0.3 point decrease in the renewal ratio in the third quarter and first nine months of 2019, respectively, compared to the same periods of 2018.
|
•
|
3.8% and 3.0% increase in average premium in the third quarter and first nine months of 2019, respectively, compared to the same periods of 2018, primarily due to rate changes approved and changes in business mix.
|
Homeowners premium measures and statistics
|
|
|
|
|
||||||||||||
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
PIF (thousands)
|
|
104
|
|
|
92
|
|
|
104
|
|
|
92
|
|
||||
New issued applications (thousands)
|
|
9
|
|
|
9
|
|
|
23
|
|
|
26
|
|
||||
Average premium (12-month policy)
|
|
$
|
1,082
|
|
|
$
|
984
|
|
|
$
|
1,057
|
|
|
$
|
982
|
|
Renewal ratio (%) (1)
|
|
84.1
|
|
|
85.9
|
|
|
84.8
|
|
|
85.6
|
|
||||
Approved rate changes (2):
|
|
|
|
|
|
|
|
|
||||||||
Number of locations (3)
|
|
1
|
|
|
—
|
|
|
5
|
|
|
5
|
|
||||
Total brand (%) (4)
|
|
—
|
|
|
—
|
|
|
4.7
|
|
|
1.7
|
|
||||
Location specific (%) (4)
|
|
(3.0
|
)
|
|
—
|
|
|
17.1
|
|
|
6.4
|
|
(1)
|
Esurance’s renewal ratios exclude the impact of risk related cancellations. Customers can enter into a policy without a physical inspection. During the underwriting review period, a number of policies may be canceled if upon inspection the condition is unsatisfactory.
|
(2)
|
Includes rate changes approved based on our net cost of reinsurance.
|
(3)
|
Esurance brand operates in 31 states.
|
(4)
|
Based on historical premiums written in the locations noted above, the annual impact of rate changes approved for homeowners totaled zero and $5 million in the three and nine months ended September 30, 2019, respectively, compared to zero and $1 million in the three and nine months ended September 30, 2018, respectively.
|
•
|
13.0% or 12 thousand increase in PIF as of September 30, 2019 compared to September 30, 2018.
|
•
|
10.0% and 7.6% increase in average premium in the third quarter and first nine months of 2019, respectively, compared to the same periods of 2018, primarily due to approved rate changes. As of September 30, 2019, Esurance continues to
|
•
|
1.8 point and 0.8 point decrease in the renewal ratio in the third quarter and first nine months of 2019, respectively, compared to the same periods of 2018.
|
•
|
No change in new issued applications in the third quarter of 2019 compared to the same period in 2018. 11.5% decrease in new issued applications in the first nine months of 2019 compared to the same period of 2018.
|
Combined ratios by line of business
|
||||||||||||||||||
|
|
Loss ratio
|
|
Expense ratio (1)
|
|
Combined ratio
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||
Three months ended September 30,
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Auto
|
|
81.1
|
|
|
76.0
|
|
|
20.7
|
|
|
25.1
|
|
|
101.8
|
|
|
101.1
|
|
Homeowners
|
|
71.4
|
|
|
90.9
|
|
|
25.0
|
|
|
36.4
|
|
|
96.4
|
|
|
127.3
|
|
Total
|
|
80.3
|
|
|
76.4
|
|
|
20.8
|
|
|
25.7
|
|
|
101.1
|
|
|
102.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Nine months ended September 30,
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Auto
|
|
78.8
|
|
|
75.8
|
|
|
21.3
|
|
|
24.1
|
|
|
100.1
|
|
|
99.9
|
|
Homeowners
|
|
82.5
|
|
|
92.2
|
|
|
25.0
|
|
|
35.9
|
|
|
107.5
|
|
|
128.1
|
|
Total
|
|
78.9
|
|
|
76.5
|
|
|
21.5
|
|
|
24.7
|
|
|
100.4
|
|
|
101.2
|
|
(1)
|
Other revenue is deducted from operating costs and expenses in the expense ratio calculation.
|
Impact of specific costs and expenses on the expense ratio
|
|
|
|
|
|
|
|
|
||||
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||
Amortization of DAC
|
|
2.1
|
|
|
2.1
|
|
|
2.2
|
|
|
2.2
|
|
Advertising expense
|
|
8.0
|
|
|
10.6
|
|
|
7.8
|
|
|
9.2
|
|
Amortization of purchased intangibles
|
|
—
|
|
|
0.2
|
|
|
0.1
|
|
|
0.1
|
|
Other costs and expenses (1)
|
|
10.7
|
|
|
12.8
|
|
|
11.4
|
|
|
13.0
|
|
Restructuring and related charges
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.2
|
|
Total expense ratio
|
|
20.8
|
|
|
25.7
|
|
|
21.5
|
|
|
24.7
|
|
(1)
|
Other revenue is deducted from other costs and expenses in the expense ratio calculation.
|
Underwriting results
|
|
|
|
|
||||||||||||
($ in millions)
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|||||||||
Premiums written
|
|
$
|
278
|
|
|
$
|
271
|
|
|
$
|
780
|
|
|
$
|
769
|
|
Premiums earned
|
|
$
|
257
|
|
|
$
|
254
|
|
|
$
|
764
|
|
|
$
|
767
|
|
Other revenue
|
|
2
|
|
|
1
|
|
|
4
|
|
|
4
|
|
||||
Claims and claims expense
|
|
(193
|
)
|
|
(162
|
)
|
|
(534
|
)
|
|
(493
|
)
|
||||
Amortization of DAC
|
|
(48
|
)
|
|
(47
|
)
|
|
(144
|
)
|
|
(143
|
)
|
||||
Other costs and expenses
|
|
(32
|
)
|
|
(34
|
)
|
|
(97
|
)
|
|
(107
|
)
|
||||
Restructuring and related charges
|
|
(1
|
)
|
|
(1
|
)
|
|
(3
|
)
|
|
(6
|
)
|
||||
Underwriting (loss) income
|
|
$
|
(15
|
)
|
|
$
|
11
|
|
|
$
|
(10
|
)
|
|
$
|
22
|
|
Catastrophe losses
|
|
$
|
47
|
|
|
$
|
23
|
|
|
$
|
103
|
|
|
$
|
92
|
|
|
|
|
|
|
|
|
|
|
||||||||
Underwriting income (loss) by line of business
|
||||||||||||||||
Auto
|
|
$
|
1
|
|
|
$
|
8
|
|
|
$
|
6
|
|
|
$
|
22
|
|
Homeowners
|
|
(13
|
)
|
|
(3
|
)
|
|
(15
|
)
|
|
(9
|
)
|
||||
Other personal lines
|
|
(3
|
)
|
|
6
|
|
|
(1
|
)
|
|
9
|
|
||||
Underwriting (loss) income
|
|
$
|
(15
|
)
|
|
$
|
11
|
|
|
$
|
(10
|
)
|
|
$
|
22
|
|
(1)
|
The 2019 column presents changes in 2019 compared to 2018. The 2018 column presents changes in 2018 compared to 2017.
|
Premiums written and earned by line of business
|
|
|
|
|
||||||||||||
($ in millions)
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Premiums written
|
|
|
|
|
|
|
|
|
||||||||
Auto
|
|
$
|
147
|
|
|
$
|
143
|
|
|
$
|
413
|
|
|
$
|
407
|
|
Homeowners
|
|
110
|
|
|
106
|
|
|
307
|
|
|
300
|
|
||||
Other personal lines
|
|
21
|
|
|
22
|
|
|
60
|
|
|
62
|
|
||||
Total
|
|
$
|
278
|
|
|
$
|
271
|
|
|
$
|
780
|
|
|
$
|
769
|
|
Premiums earned
|
|
|
|
|
|
|
|
|
||||||||
Auto
|
|
$
|
136
|
|
|
$
|
133
|
|
|
$
|
405
|
|
|
$
|
402
|
|
Homeowners
|
|
101
|
|
|
100
|
|
|
299
|
|
|
301
|
|
||||
Other personal lines
|
|
20
|
|
|
21
|
|
|
60
|
|
|
64
|
|
||||
Total
|
|
$
|
257
|
|
|
$
|
254
|
|
|
$
|
764
|
|
|
$
|
767
|
|
Auto premium measures and statistics
|
|
|
|
|
||||||||||||
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
PIF (thousands)
|
|
496
|
|
|
504
|
|
|
496
|
|
|
504
|
|
||||
New issued applications (thousands)
|
|
21
|
|
|
21
|
|
|
63
|
|
|
57
|
|
||||
Average premium (12-month policy)
|
|
$
|
1,137
|
|
|
$
|
1,115
|
|
|
$
|
1,134
|
|
|
$
|
1,112
|
|
Renewal ratio (%)
|
|
78.9
|
|
|
76.4
|
|
|
78.3
|
|
|
74.1
|
|
||||
Approved rate changes (1):
|
|
|
|
|
|
|
|
|
||||||||
Number of locations (2)
|
|
6
|
|
|
7
|
|
|
9
|
|
|
14
|
|
||||
Total brand (%) (3) (5)
|
|
0.3
|
|
|
0.6
|
|
|
0.8
|
|
|
1.9
|
|
||||
Location specific (%) (4) (5)
|
|
2.4
|
|
|
4.6
|
|
|
3.7
|
|
|
5.9
|
|
(1)
|
Rate changes that are indicated based on loss trend analysis to achieve a targeted return will continue to be pursued. Rate changes do not include rating plan enhancements, including the introduction of discounts and surcharges that result in no change in the overall rate level in a location. These rate changes do not reflect initial rates filed for insurance subsidiaries initially writing business in a location.
|
(2)
|
Encompass brand operates in 40 states and the District of Columbia.
|
(3)
|
Represents the impact in the states and the District of Columbia where rate changes were approved during the period as a percentage of total brand 2018 and 2017 premiums written, respectively.
|
(4)
|
Represents the impact in the states and the District of Columbia where rate changes were approved during the period as a percentage of their respective total 2018 and 2017 premiums written in those same locations.
|
(5)
|
Based on historical premiums written in the locations noted above, the annual impact of rate changes approved for auto totaled $2 million and $4 million in the three and nine months ended September 30, 2019, respectively, compared to $3 million and $10 million in the three and nine months ended September 30, 2018, respectively.
|
•
|
1.6% or 8 thousand decrease in PIF as of September 30, 2019 compared to September 30, 2018.
|
•
|
2.5 point and 4.2 point increase in the renewal ratio in the third quarter and first nine months of 2019, respectively, compared to the same periods of 2018.
|
•
|
10.5% increase in new issued applications in the first nine months of 2019 compared to the same period of 2018.
|
•
|
2.0% increase in average premium in both the third quarter and first nine months of 2019, respectively, compared to the same periods of 2018, primarily due to rate changes over the past 12 months.
|
Homeowners premium measure and statistics
|
|
|
|
|
||||||||||||
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
PIF (thousands)
|
|
235
|
|
|
240
|
|
|
235
|
|
|
240
|
|
||||
New issued applications (thousands)
|
|
12
|
|
|
10
|
|
|
33
|
|
|
28
|
|
||||
Average premium (12-month policy)
|
|
$
|
1,807
|
|
|
$
|
1,730
|
|
|
$
|
1,787
|
|
|
$
|
1,710
|
|
Renewal ratio (%)
|
|
83.0
|
|
|
80.9
|
|
|
82.6
|
|
|
79.5
|
|
||||
Approved rate changes (1):
|
|
|
|
|
|
|
|
|
||||||||
Number of locations (2)
|
|
11
|
|
|
11
|
|
|
21
|
|
|
19
|
|
||||
Total brand (%) (3)
|
|
3.5
|
|
|
2.7
|
|
|
6.3
|
|
|
3.5
|
|
||||
Location specific (%) (3)
|
|
9.4
|
|
|
7.8
|
|
|
9.2
|
|
|
7.5
|
|
(2)
|
Encompass brand operates in 40 states and the District of Columbia.
|
(3)
|
Based on historical premiums written in the locations noted above, the annual impact of rate changes approved for homeowners totaled $14 million and $26 million in the three and nine months ended September 30, 2019, respectively, compared to $12 million and $15 million in the three and nine months ended September 30, 2018, respectively.
|
•
|
2.1% or 5 thousand decrease in PIF as of September 30, 2019 compared to September 30, 2018.
|
•
|
2.1 point and 3.1 point increase in the renewal ratio in the third quarter and first nine months of 2019,
|
•
|
20.0% and 17.9% increase in new issued applications in the third quarter and first nine months of 2019, respectively, compared to the same periods of 2018.
|
•
|
4.5% increase in average premium in both the third quarter and first nine months of 2019, respectively, compared to the same periods of 2018, primarily due to rate changes over the past 12 months.
|
Combined ratios by line of business
|
||||||||||||||||||
|
|
Loss ratio
|
|
Expense ratio (1)
|
|
Combined ratio
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||
Three months ended September 30,
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Auto
|
|
69.1
|
|
|
62.4
|
|
|
30.2
|
|
|
31.6
|
|
|
99.3
|
|
|
94.0
|
|
Homeowners
|
|
81.2
|
|
|
70.0
|
|
|
31.7
|
|
|
31.9
|
|
|
112.9
|
|
|
101.9
|
|
Other personal lines
|
|
85.0
|
|
|
42.8
|
|
|
30.0
|
|
|
28.6
|
|
|
115.0
|
|
|
71.4
|
|
Total
|
|
75.1
|
|
|
63.8
|
|
|
30.7
|
|
|
31.9
|
|
|
105.8
|
|
|
95.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Nine months ended September 30,
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Auto
|
|
67.2
|
|
|
62.2
|
|
|
31.3
|
|
|
32.3
|
|
|
98.5
|
|
|
94.5
|
|
Homeowners
|
|
73.6
|
|
|
69.8
|
|
|
31.4
|
|
|
32.8
|
|
|
105.0
|
|
|
102.6
|
|
Other personal lines
|
|
70.0
|
|
|
51.5
|
|
|
31.7
|
|
|
34.4
|
|
|
101.7
|
|
|
85.9
|
|
Total
|
|
69.9
|
|
|
64.3
|
|
|
31.4
|
|
|
32.8
|
|
|
101.3
|
|
|
97.1
|
|
(1)
|
Other revenue is deducted from operating costs and expenses in the expense ratio calculation.
|
Loss ratios by line of business
|
||||||||||||||||||||||||
|
|
Loss ratio
|
|
Effect of catastrophe losses
|
|
Effect of prior year reserve reestimates
|
|
Effect of catastrophe losses included in prior year reserve reestimates
|
||||||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Three months ended September 30,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Auto
|
|
69.1
|
|
|
62.4
|
|
|
2.9
|
|
|
1.5
|
|
|
(0.7
|
)
|
|
(1.5
|
)
|
|
—
|
|
|
(0.8
|
)
|
Homeowners
|
|
81.2
|
|
|
70.0
|
|
|
40.6
|
|
|
20.0
|
|
|
3.0
|
|
|
3.0
|
|
|
3.0
|
|
|
3.0
|
|
Other personal lines
|
|
85.0
|
|
|
42.8
|
|
|
10.0
|
|
|
4.8
|
|
|
(5.0
|
)
|
|
(19.1
|
)
|
|
(5.0
|
)
|
|
—
|
|
Total
|
|
75.1
|
|
|
63.8
|
|
|
18.3
|
|
|
9.1
|
|
|
0.4
|
|
|
(1.2
|
)
|
|
0.8
|
|
|
0.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Nine months ended September 30,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Auto
|
|
67.2
|
|
|
62.2
|
|
|
2.5
|
|
|
1.7
|
|
|
(2.5
|
)
|
|
(0.7
|
)
|
|
—
|
|
|
(0.2
|
)
|
Homeowners
|
|
73.6
|
|
|
69.8
|
|
|
29.4
|
|
|
26.6
|
|
|
5.1
|
|
|
3.7
|
|
|
3.7
|
|
|
4.0
|
|
Other personal lines
|
|
70.0
|
|
|
51.5
|
|
|
8.3
|
|
|
7.8
|
|
|
(3.3
|
)
|
|
(15.6
|
)
|
|
(1.7
|
)
|
|
1.6
|
|
Total
|
|
69.9
|
|
|
64.3
|
|
|
13.5
|
|
|
12.0
|
|
|
0.4
|
|
|
(0.3
|
)
|
|
1.3
|
|
|
1.6
|
|
(1)
|
Other revenue is deducted from other costs and expenses in the expense ratio calculation.
|
Underwriting results
|
||||||||||||||||
($ in millions)
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|||||||||
Claims and claims expense
|
|
$
|
(98
|
)
|
|
$
|
(80
|
)
|
|
$
|
(103
|
)
|
|
$
|
(85
|
)
|
Operating costs and expenses
|
|
(1
|
)
|
|
—
|
|
|
(2
|
)
|
|
(1
|
)
|
||||
Underwriting loss
|
|
$
|
(99
|
)
|
|
$
|
(80
|
)
|
|
$
|
(105
|
)
|
|
$
|
(86
|
)
|
Claims and claims expense
|
|
|
|
|
|
|
|
|
||||||||
($ in millions)
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Asbestos claims
|
|
$
|
28
|
|
|
$
|
44
|
|
|
$
|
28
|
|
|
$
|
44
|
|
Environmental claims
|
|
36
|
|
|
20
|
|
|
36
|
|
|
20
|
|
||||
Other discontinued lines
|
|
34
|
|
|
16
|
|
|
39
|
|
|
21
|
|
||||
Total
|
|
$
|
98
|
|
|
$
|
80
|
|
|
$
|
103
|
|
|
$
|
85
|
|
Reserves by type of exposure before and after the effects of reinsurance
|
||||||||
($ in millions)
|
|
September 30, 2019
|
|
December 31, 2018
|
||||
Direct excess commercial insurance
|
|
|
|
|
||||
Gross reserves (1)
|
|
$
|
998
|
|
|
$
|
973
|
|
Reinsurance (2)
|
|
(358
|
)
|
|
(355
|
)
|
||
Net reserves
|
|
640
|
|
|
618
|
|
||
Assumed reinsurance coverage
|
|
|
|
|
||||
Gross reserves (3)
|
|
623
|
|
|
625
|
|
||
Reinsurance (4)
|
|
(55
|
)
|
|
(53
|
)
|
||
Net reserves
|
|
568
|
|
|
572
|
|
||
Direct primary commercial insurance
|
|
|
|
|
||||
Gross reserves (5)
|
|
167
|
|
|
171
|
|
||
Reinsurance (6)
|
|
(49
|
)
|
|
(48
|
)
|
||
Net reserves
|
|
118
|
|
|
123
|
|
||
Other run-off business
|
|
|
|
|
||||
Gross reserves
|
|
16
|
|
|
19
|
|
||
Reinsurance
|
|
(13
|
)
|
|
(16
|
)
|
||
Net reserves
|
|
3
|
|
|
3
|
|
||
Unallocated loss adjustment expenses
|
|
|
|
|
||||
Gross reserves
|
|
78
|
|
|
76
|
|
||
Reinsurance
|
|
(1
|
)
|
|
(1
|
)
|
||
Net reserves
|
|
77
|
|
|
75
|
|
||
Total
|
|
|
|
|
||||
Gross reserves
|
|
1,882
|
|
|
1,864
|
|
||
Reinsurance
|
|
(476
|
)
|
|
(473
|
)
|
||
Net reserves
|
|
$
|
1,406
|
|
|
$
|
1,391
|
|
Summarized financial information
|
||||||||||||||||
($ in millions)
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|||||||||
Premiums written
|
|
$
|
364
|
|
|
$
|
358
|
|
|
$
|
1,082
|
|
|
$
|
942
|
|
|
|
|
|
|
|
|
|
|
||||||||
Revenues
|
|
|
|
|
|
|
|
|
||||||||
Premiums
|
|
$
|
312
|
|
|
$
|
275
|
|
|
$
|
912
|
|
|
$
|
813
|
|
Other revenue
|
|
47
|
|
|
16
|
|
|
142
|
|
|
48
|
|
||||
Intersegment insurance premiums and service fees (1)
|
|
44
|
|
|
31
|
|
|
110
|
|
|
89
|
|
||||
Net investment income
|
|
11
|
|
|
7
|
|
|
30
|
|
|
18
|
|
||||
Realized capital gains and losses
|
|
4
|
|
|
—
|
|
|
21
|
|
|
(6
|
)
|
||||
Total revenues
|
|
418
|
|
|
329
|
|
|
1,215
|
|
|
962
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Costs and expenses
|
|
|
|
|
|
|
|
|
||||||||
Claims and claims expense
|
|
(93
|
)
|
|
(90
|
)
|
|
(271
|
)
|
|
(272
|
)
|
||||
Amortization of DAC
|
|
(139
|
)
|
|
(118
|
)
|
|
(400
|
)
|
|
(341
|
)
|
||||
Operating costs and expenses
|
|
(171
|
)
|
|
(124
|
)
|
|
(480
|
)
|
|
(357
|
)
|
||||
Restructuring and related charges
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
||||
Amortization of purchased intangibles
|
|
(31
|
)
|
|
(20
|
)
|
|
(93
|
)
|
|
(61
|
)
|
||||
Impairment of purchased intangibles
|
|
—
|
|
|
—
|
|
|
(55
|
)
|
|
—
|
|
||||
Total costs and expenses
|
|
(435
|
)
|
|
(352
|
)
|
|
(1,299
|
)
|
|
(1,032
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Income tax benefit
|
|
4
|
|
|
3
|
|
|
19
|
|
|
13
|
|
||||
Net loss applicable to common shareholders
|
|
$
|
(13
|
)
|
|
$
|
(20
|
)
|
|
$
|
(65
|
)
|
|
$
|
(57
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Adjusted net income
|
|
$
|
8
|
|
|
$
|
1
|
|
|
$
|
35
|
|
|
$
|
—
|
|
Realized capital gains and losses, after-tax
|
|
4
|
|
|
(1
|
)
|
|
17
|
|
|
(5
|
)
|
||||
Amortization of purchased intangibles, after-tax
|
|
(25
|
)
|
|
(16
|
)
|
|
(74
|
)
|
|
(48
|
)
|
||||
Impairment of purchased intangibles, after-tax
|
|
—
|
|
|
—
|
|
|
(43
|
)
|
|
—
|
|
||||
Tax Legislation expense
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
(4
|
)
|
||||
Net loss applicable to common shareholders
|
|
$
|
(13
|
)
|
|
$
|
(20
|
)
|
|
$
|
(65
|
)
|
|
$
|
(57
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Allstate Protection Plans (2)
|
|
$
|
15
|
|
|
$
|
7
|
|
|
$
|
48
|
|
|
$
|
14
|
|
Allstate Dealer Services
|
|
6
|
|
|
3
|
|
|
19
|
|
|
10
|
|
||||
Arity
|
|
(1
|
)
|
|
(4
|
)
|
|
(4
|
)
|
|
(10
|
)
|
||||
Allstate Identity Protection (3)
|
|
(7
|
)
|
|
—
|
|
|
(14
|
)
|
|
—
|
|
||||
Allstate Roadside Services
|
|
(5
|
)
|
|
(5
|
)
|
|
(14
|
)
|
|
(14
|
)
|
||||
Adjusted net income
|
|
$
|
8
|
|
|
$
|
1
|
|
|
$
|
35
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
||||||||
Allstate Protection Plans
|
|
|
|
|
|
|
|
89,783
|
|
|
52,151
|
|
||||
Allstate Dealer Services
|
|
|
|
|
|
4,224
|
|
|
4,402
|
|
||||||
Allstate Identity Protection
|
|
|
|
|
|
|
|
1,318
|
|
|
—
|
|
||||
Allstate Roadside Services
|
|
|
|
|
|
|
|
617
|
|
|
671
|
|
||||
Policies in force as of September 30 (in thousands)
|
|
|
|
|
|
|
|
95,942
|
|
|
57,224
|
|
(1)
|
Primarily related to Arity and Allstate Roadside Services and are eliminated in our condensed consolidated financial statements.
|
(2)
|
SquareTrade, which sells consumer protection plans using the Allstate Protection Plans name in the U.S., acquired PlumChoice on November 30, 2018 and iCracked on February 12, 2019.
|
(3)
|
InfoArmor, which sells identity protection plans using the Allstate Identity Protection name, was acquired on October 5, 2018.
|
Summarized financial information
|
||||||||||||||||
($ in millions)
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Premiums and contract charges
|
|
$
|
331
|
|
|
$
|
322
|
|
|
$
|
1,001
|
|
|
$
|
975
|
|
Other revenue
|
|
31
|
|
|
30
|
|
|
91
|
|
|
84
|
|
||||
Net investment income
|
|
128
|
|
|
128
|
|
|
380
|
|
|
380
|
|
||||
Realized capital gains and losses
|
|
5
|
|
|
(3
|
)
|
|
1
|
|
|
(9
|
)
|
||||
Total revenues
|
|
495
|
|
|
477
|
|
|
1,473
|
|
|
1,430
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Costs and expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Contract benefits
|
|
(202
|
)
|
|
(193
|
)
|
|
(632
|
)
|
|
(593
|
)
|
||||
Interest credited to contractholder funds
|
|
(85
|
)
|
|
(72
|
)
|
|
(227
|
)
|
|
(213
|
)
|
||||
Amortization of DAC
|
|
(84
|
)
|
|
(38
|
)
|
|
(141
|
)
|
|
(106
|
)
|
||||
Operating costs and expenses
|
|
(77
|
)
|
|
(88
|
)
|
|
(259
|
)
|
|
(257
|
)
|
||||
Restructuring and related charges
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|
(3
|
)
|
||||
Total costs and expenses
|
|
(448
|
)
|
|
(392
|
)
|
|
(1,260
|
)
|
|
(1,172
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Income tax expense
|
|
(7
|
)
|
|
(30
|
)
|
|
(39
|
)
|
|
(61
|
)
|
||||
Net income applicable to common shareholders
|
|
$
|
40
|
|
|
$
|
55
|
|
|
$
|
174
|
|
|
$
|
197
|
|
|
|
|
|
|
|
|
|
|
||||||||
Adjusted net income
|
|
$
|
44
|
|
|
$
|
75
|
|
|
$
|
185
|
|
|
$
|
226
|
|
Realized capital gains and losses, after-tax
|
|
4
|
|
|
(3
|
)
|
|
—
|
|
|
(7
|
)
|
||||
Valuation changes on embedded derivatives not hedged, after-tax
|
|
(9
|
)
|
|
—
|
|
|
(9
|
)
|
|
—
|
|
||||
DAC and DSI amortization related to realized capital gains and losses, after-tax
|
|
1
|
|
|
(1
|
)
|
|
(2
|
)
|
|
(6
|
)
|
||||
Tax Legislation (expense) benefit
|
|
—
|
|
|
(16
|
)
|
|
—
|
|
|
(16
|
)
|
||||
Net income applicable to common shareholders
|
|
$
|
40
|
|
|
$
|
55
|
|
|
$
|
174
|
|
|
$
|
197
|
|
|
|
|
|
|
|
|
|
|
||||||||
Reserve for life-contingent contract benefits as of September 30
|
|
|
|
|
|
$
|
2,718
|
|
|
$
|
2,672
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Contractholder funds as of September 30
|
|
|
|
|
|
$
|
7,733
|
|
|
$
|
7,650
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Policies in force as of September 30 by distribution channel (in thousands)
|
|
|
|
|
|
|
|
|
||||||||
Allstate agencies
|
|
|
|
|
|
1,818
|
|
|
1,820
|
|
||||||
Closed channels
|
|
|
|
|
|
185
|
|
|
198
|
|
||||||
Total
|
|
|
|
|
|
2,003
|
|
|
2,018
|
|
Premiums and contract charges by product
|
||||||||||||||||
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
($ in millions)
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Traditional life insurance premiums
|
|
$
|
155
|
|
|
$
|
149
|
|
|
$
|
465
|
|
|
$
|
443
|
|
Accident and health insurance premiums
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
||||
Interest-sensitive life insurance contract charges
|
|
176
|
|
|
173
|
|
|
535
|
|
|
531
|
|
||||
Premiums and contract charges (1)
|
|
$
|
331
|
|
|
$
|
322
|
|
|
$
|
1,001
|
|
|
$
|
975
|
|
(1)
|
Contract charges related to the cost of insurance totaled $123 million and $119 million for the third quarter of 2019 and 2018, respectively, and $375 million and $366 million for the first nine months of 2019 and 2018, respectively.
|
Investment spread
|
||||||||||||||||
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
($ in millions)
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Investment spread before valuation changes on embedded derivatives not hedged
|
|
$
|
55
|
|
|
$
|
56
|
|
|
$
|
165
|
|
|
$
|
167
|
|
Valuation changes on derivatives embedded in equity-indexed universal life contracts that are not hedged
|
|
(12
|
)
|
|
—
|
|
|
(12
|
)
|
|
—
|
|
||||
Total investment spread
|
|
$
|
43
|
|
|
$
|
56
|
|
|
$
|
153
|
|
|
$
|
167
|
|
Components of amortization of DAC
|
||||||||||||||||
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
($ in millions)
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Amortization of DAC before amortization relating to realized capital gains and losses, valuation changes on embedded derivatives that are not hedged, and changes in assumptions
|
|
$
|
27
|
|
|
$
|
31
|
|
|
$
|
80
|
|
|
$
|
93
|
|
Amortization relating to realized capital gains and losses (1) and valuation changes on embedded derivatives that are not hedged
|
|
(1
|
)
|
|
2
|
|
|
3
|
|
|
8
|
|
||||
Amortization acceleration for changes in assumptions (‘‘DAC unlocking’’)
|
|
58
|
|
|
5
|
|
|
58
|
|
|
5
|
|
||||
Total amortization of DAC
|
|
$
|
84
|
|
|
$
|
38
|
|
|
$
|
141
|
|
|
$
|
106
|
|
(1)
|
The impact of realized capital gains and losses on amortization of DAC is dependent upon the relationship between the assets that give rise to the gain or loss and the product liability supported by the assets. Fluctuations result from changes in the impact of realized capital gains and losses on actual and expected gross profits.
|
Reserve for life-contingent contract benefits
|
||||||||
($ in millions)
|
|
September 30, 2019
|
|
December 31, 2018
|
||||
Traditional life insurance
|
|
$
|
2,592
|
|
|
$
|
2,539
|
|
Accident and health insurance
|
|
126
|
|
|
138
|
|
||
Reserve for life-contingent contract benefits
|
|
$
|
2,718
|
|
|
$
|
2,677
|
|
Change in contractholder funds
|
||||||||||||||||
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
($ in millions)
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Contractholder funds, beginning balance
|
|
$
|
7,711
|
|
|
$
|
7,630
|
|
|
$
|
7,656
|
|
|
$
|
7,608
|
|
|
|
|
|
|
|
|
|
|
||||||||
Deposits
|
|
236
|
|
|
237
|
|
|
712
|
|
|
715
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Interest credited
|
|
83
|
|
|
71
|
|
|
225
|
|
|
212
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Benefits, withdrawals and other adjustments
|
|
|
|
|
|
|
|
|
|
|||||||
Benefits
|
|
(60
|
)
|
|
(59
|
)
|
|
(184
|
)
|
|
(174
|
)
|
||||
Surrenders and partial withdrawals
|
|
(65
|
)
|
|
(64
|
)
|
|
(198
|
)
|
|
(196
|
)
|
||||
Contract charges
|
|
(176
|
)
|
|
(176
|
)
|
|
(526
|
)
|
|
(527
|
)
|
||||
Net transfers from separate accounts
|
|
2
|
|
|
1
|
|
|
8
|
|
|
5
|
|
||||
Other adjustments (1)
|
|
2
|
|
|
10
|
|
|
40
|
|
|
7
|
|
||||
Total benefits, withdrawals and other adjustments
|
|
(297
|
)
|
|
(288
|
)
|
|
(860
|
)
|
|
(885
|
)
|
||||
Contractholder funds, ending balance
|
|
$
|
7,733
|
|
|
$
|
7,650
|
|
|
$
|
7,733
|
|
|
$
|
7,650
|
|
(1)
|
The table above illustrates the changes in contractholder funds, which are presented gross of reinsurance recoverables on the Condensed Consolidated Statements of Financial Position. The table above is intended to supplement our discussion and analysis of revenues, which are presented net of reinsurance on the Condensed Consolidated Statements of Operations. As a result, the net change in contractholder funds associated with products reinsured is reflected as a component of the other adjustments line.
|
Summarized financial information
|
||||||||||||||||
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
($ in millions)
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Premiums and contract charges
|
|
$
|
291
|
|
|
$
|
285
|
|
|
$
|
863
|
|
|
$
|
854
|
|
Net investment income
|
|
21
|
|
|
19
|
|
|
61
|
|
|
57
|
|
||||
Realized capital gains and losses
|
|
2
|
|
|
2
|
|
|
8
|
|
|
—
|
|
||||
Total revenues
|
|
314
|
|
|
306
|
|
|
932
|
|
|
911
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Costs and expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Contract benefits
|
|
(161
|
)
|
|
(159
|
)
|
|
(449
|
)
|
|
(451
|
)
|
||||
Interest credited to contractholder funds
|
|
(9
|
)
|
|
(8
|
)
|
|
(26
|
)
|
|
(25
|
)
|
||||
Amortization of DAC
|
|
(33
|
)
|
|
(26
|
)
|
|
(111
|
)
|
|
(103
|
)
|
||||
Operating costs and expenses
|
|
(69
|
)
|
|
(68
|
)
|
|
(211
|
)
|
|
(207
|
)
|
||||
Total costs and expenses
|
|
(272
|
)
|
|
(261
|
)
|
|
(797
|
)
|
|
(786
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Income tax expense
|
|
(9
|
)
|
|
(10
|
)
|
|
(29
|
)
|
|
(27
|
)
|
||||
Net income applicable to common shareholders
|
|
$
|
33
|
|
|
$
|
35
|
|
|
$
|
106
|
|
|
$
|
98
|
|
|
|
|
|
|
|
|
|
|
||||||||
Adjusted net income
|
|
$
|
31
|
|
|
$
|
33
|
|
|
$
|
99
|
|
|
$
|
98
|
|
Realized capital gains and losses, after-tax
|
|
2
|
|
|
2
|
|
|
7
|
|
|
—
|
|
||||
Net income applicable to common shareholders
|
|
$
|
33
|
|
|
$
|
35
|
|
|
$
|
106
|
|
|
$
|
98
|
|
|
|
|
|
|
|
|
|
|
||||||||
Benefit ratio (1)
|
|
55.3
|
|
|
55.8
|
|
|
52.0
|
|
|
52.8
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Operating expense ratio (2)
|
|
23.7
|
|
|
23.9
|
|
|
24.4
|
|
|
24.2
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Reserve for life-contingent contract benefits as of September 30
|
|
|
|
|
|
$
|
1,033
|
|
|
$
|
1,007
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Contractholder funds as of September 30
|
|
|
|
|
|
$
|
912
|
|
|
$
|
902
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Policies in force as of September 30 (in thousands)
|
|
|
|
|
|
4,287
|
|
|
4,241
|
|
(1)
|
Benefit ratio is calculated as contract benefits divided by premiums and contract charges.
|
(2)
|
Operating expense ratio is calculated as operating costs and expenses divided by premiums and contract charges.
|
Premiums and contract charges by product
|
||||||||||||||||
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
($ in millions)
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Life
|
|
$
|
41
|
|
|
$
|
39
|
|
|
$
|
117
|
|
|
$
|
115
|
|
Accident
|
|
76
|
|
|
75
|
|
|
226
|
|
|
224
|
|
||||
Critical illness
|
|
121
|
|
|
119
|
|
|
363
|
|
|
359
|
|
||||
Short-term disability
|
|
27
|
|
|
27
|
|
|
80
|
|
|
81
|
|
||||
Other health
|
|
26
|
|
|
25
|
|
|
77
|
|
|
75
|
|
||||
Premiums and contract charges
|
|
$
|
291
|
|
|
$
|
285
|
|
|
$
|
863
|
|
|
$
|
854
|
|
Operating costs and expenses
|
||||||||||||||||
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
($ in millions)
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Non-deferrable commissions
|
|
$
|
26
|
|
|
$
|
27
|
|
|
$
|
78
|
|
|
$
|
81
|
|
General and administrative expenses
|
|
43
|
|
|
41
|
|
|
133
|
|
|
126
|
|
||||
Total operating costs and expenses
|
|
$
|
69
|
|
|
$
|
68
|
|
|
$
|
211
|
|
|
$
|
207
|
|
Reserve for life-contingent contract benefits
|
||||||||
($ in millions)
|
|
September 30, 2019
|
|
December 31, 2018
|
||||
Traditional life insurance
|
|
$
|
279
|
|
|
$
|
269
|
|
Accident and health insurance
|
|
754
|
|
|
738
|
|
||
Reserve for life-contingent contract benefits
|
|
$
|
1,033
|
|
|
$
|
1,007
|
|
Summarized financial information
|
||||||||||||||||
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
($ in millions)
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Contract charges
|
|
$
|
3
|
|
|
$
|
5
|
|
|
$
|
10
|
|
|
$
|
11
|
|
Net investment income
|
|
251
|
|
|
260
|
|
|
737
|
|
|
843
|
|
||||
Realized capital gains and losses
|
|
20
|
|
|
51
|
|
|
224
|
|
|
28
|
|
||||
Total revenues
|
|
274
|
|
|
316
|
|
|
971
|
|
|
882
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Costs and expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Contract benefits
|
|
(150
|
)
|
|
(146
|
)
|
|
(440
|
)
|
|
(441
|
)
|
||||
Interest credited to contractholder funds
|
|
(75
|
)
|
|
(83
|
)
|
|
(234
|
)
|
|
(251
|
)
|
||||
Amortization of DAC
|
|
(2
|
)
|
|
(2
|
)
|
|
(5
|
)
|
|
(5
|
)
|
||||
Operating costs and expenses
|
|
(7
|
)
|
|
(7
|
)
|
|
(22
|
)
|
|
(25
|
)
|
||||
Total costs and expenses
|
|
(234
|
)
|
|
(238
|
)
|
|
(701
|
)
|
|
(722
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Gain on disposition of operations
|
|
—
|
|
|
1
|
|
|
3
|
|
|
4
|
|
||||
Income tax (expense) benefit
|
|
(9
|
)
|
|
52
|
|
|
(57
|
)
|
|
34
|
|
||||
Net income applicable to common shareholders
|
|
$
|
31
|
|
|
$
|
131
|
|
|
$
|
216
|
|
|
$
|
198
|
|
|
|
|
|
|
|
|
|
|
||||||||
Adjusted net income
|
|
$
|
16
|
|
|
$
|
20
|
|
|
$
|
43
|
|
|
$
|
99
|
|
Realized capital gains and losses, after-tax
|
|
16
|
|
|
40
|
|
|
177
|
|
|
22
|
|
||||
Valuation changes on embedded derivatives not hedged, after-tax
|
|
(1
|
)
|
|
1
|
|
|
(6
|
)
|
|
5
|
|
||||
Gain on disposition of operations, after-tax
|
|
—
|
|
|
1
|
|
|
2
|
|
|
3
|
|
||||
Tax legislation benefit
|
|
—
|
|
|
69
|
|
|
—
|
|
|
69
|
|
||||
Net income applicable to common shareholders
|
|
$
|
31
|
|
|
$
|
131
|
|
|
$
|
216
|
|
|
$
|
198
|
|
|
|
|
|
|
|
|
|
|
||||||||
Reserve for life-contingent contract benefits as of September 30
|
|
|
|
|
|
$
|
8,627
|
|
|
$
|
8,535
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Contractholder funds as of September 30
|
|
|
|
|
|
$
|
9,159
|
|
|
$
|
10,098
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Policies in force as of September 30 (in thousands)
|
|
|
|
|
|
|
|
|
||||||||
Deferred annuities
|
|
|
|
|
|
117
|
|
|
130
|
|
||||||
Immediate annuities
|
|
|
|
|
|
80
|
|
|
85
|
|
||||||
Total
|
|
|
|
|
|
197
|
|
|
215
|
|
Investment spread
|
||||||||||||||||
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
($ in millions)
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Investment spread before valuation changes on embedded derivatives not hedged
|
|
$
|
58
|
|
|
$
|
54
|
|
|
$
|
151
|
|
|
$
|
216
|
|
Valuation changes on derivatives embedded in equity-indexed annuity contracts that are not hedged
|
|
(2
|
)
|
|
—
|
|
|
(8
|
)
|
|
6
|
|
||||
Total investment spread
|
|
$
|
56
|
|
|
$
|
54
|
|
|
$
|
143
|
|
|
$
|
222
|
|
Analysis of investment spread
|
||||||||||||||||||
|
|
Three months ended September 30,
|
||||||||||||||||
|
|
Weighted average
investment yield
|
|
Weighted average
interest crediting rate
|
|
Weighted average
investment spreads
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||
Deferred fixed annuities
|
|
4.3
|
%
|
|
4.1
|
%
|
|
2.8
|
%
|
|
2.8
|
%
|
|
1.5
|
%
|
|
1.3
|
%
|
Immediate fixed annuities with and without life contingencies
|
|
5.9
|
|
|
6.0
|
|
|
5.9
|
|
|
6.0
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
Nine months ended September 30,
|
||||||||||||||||
|
|
Weighted average
investment yield
|
|
Weighted average
interest crediting rate
|
|
Weighted average
investment spreads
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||
Deferred fixed annuities
|
|
4.3
|
%
|
|
4.1
|
%
|
|
2.7
|
%
|
|
2.8
|
%
|
|
1.6
|
%
|
|
1.3
|
%
|
Immediate fixed annuities with and without life contingencies
|
|
5.6
|
|
|
6.6
|
|
|
5.9
|
|
|
6.0
|
|
|
(0.3
|
)
|
|
0.6
|
|
Product Liabilities
|
||||||||
($ in millions)
|
|
September 30, 2019
|
|
December 31, 2018
|
||||
Immediate fixed annuities with life contingencies
|
|
|
|
|
||||
Sub-standard structured settlements and group pension terminations (1)
|
|
$
|
5,151
|
|
|
$
|
4,990
|
|
Standard structured settlements and SPIA (2)
|
|
3,399
|
|
|
3,425
|
|
||
Other
|
|
77
|
|
|
109
|
|
||
Reserve for life-contingent contract benefits
|
|
$
|
8,627
|
|
|
$
|
8,524
|
|
|
|
|
|
|
||||
Deferred fixed annuities
|
|
$
|
6,648
|
|
|
$
|
7,156
|
|
Immediate fixed annuities without life contingencies
|
|
2,382
|
|
|
2,525
|
|
||
Other
|
|
129
|
|
|
136
|
|
||
Contractholder funds
|
|
$
|
9,159
|
|
|
$
|
9,817
|
|
(1)
|
Comprises structured settlement annuities for annuitants with severe injuries or other health impairments which increased their expected mortality rate at the time the annuity was issued (“sub-standard structured settlements”) and group annuity contracts issued to sponsors of terminated pension plans.
|
(2)
|
Comprises structured settlement annuities for annuitants with standard life expectancy (“standard structured settlements”) and single premium immediate annuities (“SPIA”) with life contingencies.
|
Changes in contractholder funds
|
||||||||||||||||
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
($ in millions)
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Contractholder funds, beginning balance
|
|
$
|
9,347
|
|
|
$
|
10,359
|
|
|
$
|
9,817
|
|
|
$
|
10,936
|
|
|
|
|
|
|
|
|
|
|
||||||||
Deposits
|
|
3
|
|
|
3
|
|
|
12
|
|
|
12
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Interest credited
|
|
75
|
|
|
82
|
|
|
233
|
|
|
248
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Benefits, withdrawals and other adjustments
|
|
|
|
|
|
|
|
|
|
|
||||||
Benefits
|
|
(143
|
)
|
|
(148
|
)
|
|
(419
|
)
|
|
(452
|
)
|
||||
Surrenders and partial withdrawals
|
|
(133
|
)
|
|
(197
|
)
|
|
(464
|
)
|
|
(625
|
)
|
||||
Contract charges
|
|
(2
|
)
|
|
(3
|
)
|
|
(6
|
)
|
|
(6
|
)
|
||||
Net transfers from separate accounts
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
||||
Other adjustments (1)
|
|
12
|
|
|
2
|
|
|
(13
|
)
|
|
(15
|
)
|
||||
Total benefits, withdrawals and other adjustments
|
|
(266
|
)
|
|
(346
|
)
|
|
(903
|
)
|
|
(1,098
|
)
|
||||
Contractholder funds, ending balance
|
|
$
|
9,159
|
|
|
$
|
10,098
|
|
|
$
|
9,159
|
|
|
$
|
10,098
|
|
(1)
|
The table above illustrates the changes in contractholder funds, which are presented gross of reinsurance recoverables on the Condensed Consolidated Statements of Financial Position. The table above is intended to supplement our discussion and analysis of revenues, which are presented net of reinsurance on the Condensed Consolidated Statements of Operations. As a result, the net change in contractholder funds associated with products reinsured is reflected as a component of the other adjustments line.
|
Portfolio composition and strategy by reporting segment (1)
|
||||||||||||||||||||||||||||
|
|
As of September 30, 2019
|
||||||||||||||||||||||||||
($ in millions)
|
|
Property-Liability
|
|
Service Businesses
|
|
Allstate Life
|
|
Allstate Benefits
|
|
Allstate Annuities
|
|
Corporate and Other
|
|
Total
|
||||||||||||||
Fixed income securities (2)
|
|
$
|
32,471
|
|
|
$
|
1,161
|
|
|
$
|
7,773
|
|
|
$
|
1,323
|
|
|
$
|
14,514
|
|
|
$
|
2,017
|
|
|
$
|
59,259
|
|
Equity securities (3)
|
|
6,203
|
|
|
272
|
|
|
104
|
|
|
130
|
|
|
1,162
|
|
|
335
|
|
|
8,206
|
|
|||||||
Mortgage loans
|
|
393
|
|
|
—
|
|
|
1,953
|
|
|
212
|
|
|
2,136
|
|
|
—
|
|
|
4,694
|
|
|||||||
Limited partnership interests
|
|
4,703
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,287
|
|
|
—
|
|
|
7,990
|
|
|||||||
Short-term investments (4)
|
|
2,387
|
|
|
116
|
|
|
520
|
|
|
35
|
|
|
981
|
|
|
1,215
|
|
|
5,254
|
|
|||||||
Other
|
|
1,604
|
|
|
—
|
|
|
1,351
|
|
|
311
|
|
|
638
|
|
|
—
|
|
|
3,904
|
|
|||||||
Total
|
|
$
|
47,761
|
|
|
$
|
1,549
|
|
|
$
|
11,701
|
|
|
$
|
2,011
|
|
|
$
|
22,718
|
|
|
$
|
3,567
|
|
|
$
|
89,307
|
|
Percent to total
|
|
53.5
|
%
|
|
1.7
|
%
|
|
13.1
|
%
|
|
2.3
|
%
|
|
25.4
|
%
|
|
4.0
|
%
|
|
100.0
|
%
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Market-based core
|
|
$
|
33,369
|
|
|
$
|
1,549
|
|
|
$
|
11,701
|
|
|
$
|
2,011
|
|
|
$
|
17,766
|
|
|
$
|
3,567
|
|
|
$
|
69,963
|
|
Market-based active
|
|
9,366
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,384
|
|
|
—
|
|
|
10,750
|
|
|||||||
Performance-based
|
|
5,026
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,568
|
|
|
—
|
|
|
8,594
|
|
|||||||
Total
|
|
$
|
47,761
|
|
|
$
|
1,549
|
|
|
$
|
11,701
|
|
|
$
|
2,011
|
|
|
$
|
22,718
|
|
|
$
|
3,567
|
|
|
$
|
89,307
|
|
(1)
|
Balances reflect the elimination of related party investments between segments.
|
(2)
|
Fixed income securities are carried at fair value. Amortized cost basis for these securities was $31.24 billion, $1.12 billion, $7.12 billion, $1.25 billion, $13.56 billion, $1.97 billion and $56.26 billion for Property-Liability, Service Businesses, Allstate Life, Allstate Benefits, Allstate Annuities, Corporate and Other, and in Total, respectively.
|
(3)
|
Equity securities are carried at fair value. The fair value of equity securities held as of September 30, 2019, was $1.28 billion in excess of cost. These net gains were primarily concentrated in the consumer goods and technology sectors and in domestic equity index funds.
|
(4)
|
Short-term investments are carried at fair value.
|
Portfolio composition by investment strategy
|
||||||||||||||||
|
As of September 30, 2019
|
|||||||||||||||
($ in millions)
|
|
Market-based core
|
|
Market-based active
|
|
Performance-based
|
|
Total
|
||||||||
Fixed income securities
|
|
$
|
50,508
|
|
|
$
|
8,662
|
|
|
$
|
89
|
|
|
$
|
59,259
|
|
Equity securities
|
|
7,064
|
|
|
823
|
|
|
319
|
|
|
8,206
|
|
||||
Mortgage loans
|
|
4,694
|
|
|
—
|
|
|
—
|
|
|
4,694
|
|
||||
Limited partnership interests
|
|
587
|
|
|
233
|
|
|
7,170
|
|
|
7,990
|
|
||||
Short-term investments
|
|
4,351
|
|
|
903
|
|
|
—
|
|
|
5,254
|
|
||||
Other
|
|
2,759
|
|
|
129
|
|
|
1,016
|
|
|
3,904
|
|
||||
Total
|
|
$
|
69,963
|
|
|
$
|
10,750
|
|
|
$
|
8,594
|
|
|
$
|
89,307
|
|
Percent to total
|
|
78.4
|
%
|
|
12.0
|
%
|
|
9.6
|
%
|
|
100.0
|
%
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Unrealized net capital gains and losses
|
|
|
|
|
|
|
|
|
||||||||
Fixed income securities
|
|
$
|
2,692
|
|
|
$
|
305
|
|
|
$
|
(1
|
)
|
|
$
|
2,996
|
|
Limited partnership interests
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
(3
|
)
|
||||
Other
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
||||
Total
|
|
$
|
2,689
|
|
|
$
|
305
|
|
|
$
|
(4
|
)
|
|
$
|
2,990
|
|
Fixed income securities by type
|
||||||||
|
|
Fair value as of
|
||||||
($ in millions)
|
|
September 30, 2019
|
|
December 31, 2018
|
||||
U.S. government and agencies
|
|
$
|
4,111
|
|
|
$
|
5,517
|
|
Municipal
|
|
8,838
|
|
|
9,169
|
|
||
Corporate
|
|
44,018
|
|
|
40,136
|
|
||
Foreign government
|
|
993
|
|
|
747
|
|
||
Asset-backed securities (“ABS”)
|
|
822
|
|
|
1,045
|
|
||
Residential mortgage-backed securities (“RMBS”)
|
|
392
|
|
|
464
|
|
||
Commercial mortgage-backed securities (“CMBS”)
|
|
64
|
|
|
70
|
|
||
Redeemable preferred stock
|
|
21
|
|
|
22
|
|
||
Total fixed income securities
|
|
$
|
59,259
|
|
|
$
|
57,170
|
|
Fair value and unrealized net capital gains and losses for fixed income securities by credit quality
|
|||||||||||||||||||||||||||
|
|
As of September 30, 2019
|
|||||||||||||||||||||||||
|
|
Investment grade
|
|
Below investment grade
|
|
Total
|
|
|
|||||||||||||||||||
($ in millions)
|
|
Fair
value
|
|
Unrealized
gain (loss)
|
|
Fair
value
|
|
Unrealized
gain (loss)
|
|
Fair
value
|
|
Unrealized
gain (loss)
|
|
Percent rated investment grade
|
|||||||||||||
U.S. government and agencies
|
|
$
|
4,111
|
|
|
$
|
256
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,111
|
|
|
$
|
256
|
|
|
100.0
|
%
|
Municipal
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Tax exempt
|
|
6,937
|
|
|
286
|
|
|
17
|
|
|
1
|
|
|
6,954
|
|
|
287
|
|
|
99.8
|
|
||||||
Taxable
|
|
1,841
|
|
|
320
|
|
|
43
|
|
|
4
|
|
|
1,884
|
|
|
324
|
|
|
97.7
|
|
||||||
Total Municipal
|
|
8,778
|
|
|
606
|
|
|
60
|
|
|
5
|
|
|
8,838
|
|
|
611
|
|
|
99.3
|
|
||||||
Corporate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Public
|
|
28,371
|
|
|
1,421
|
|
|
3,271
|
|
|
84
|
|
|
31,642
|
|
|
1,505
|
|
|
89.7
|
|
||||||
Privately placed
|
|
8,804
|
|
|
409
|
|
|
3,572
|
|
|
91
|
|
|
12,376
|
|
|
500
|
|
|
71.1
|
|
||||||
Total Corporate
|
|
37,175
|
|
|
1,830
|
|
|
6,843
|
|
|
175
|
|
|
44,018
|
|
|
2,005
|
|
|
84.5
|
|
||||||
Foreign government
|
|
986
|
|
|
21
|
|
|
7
|
|
|
—
|
|
|
993
|
|
|
21
|
|
|
99.3
|
|
||||||
ABS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Collateralized debt obligations (“CDO”)
|
|
313
|
|
|
(3
|
)
|
|
47
|
|
|
1
|
|
|
360
|
|
|
(2
|
)
|
|
86.9
|
|
||||||
Consumer and other asset-backed securities (“Consumer and other ABS”) (1)
|
|
447
|
|
|
7
|
|
|
15
|
|
|
(1
|
)
|
|
462
|
|
|
6
|
|
|
96.8
|
|
||||||
Total ABS
|
|
760
|
|
|
4
|
|
|
62
|
|
|
—
|
|
|
822
|
|
|
4
|
|
|
92.5
|
|
||||||
RMBS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
U.S. government sponsored entities (“U.S. Agency”)
|
|
61
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
61
|
|
|
1
|
|
|
100.0
|
|
||||||
Non-agency
|
|
37
|
|
|
2
|
|
|
294
|
|
|
88
|
|
|
331
|
|
|
90
|
|
|
11.2
|
|
||||||
Total RMBS
|
|
98
|
|
|
3
|
|
|
294
|
|
|
88
|
|
|
392
|
|
|
91
|
|
|
25.0
|
|
||||||
CMBS
|
|
34
|
|
|
1
|
|
|
30
|
|
|
6
|
|
|
64
|
|
|
7
|
|
|
53.1
|
|
||||||
Redeemable preferred stock
|
|
21
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
21
|
|
|
1
|
|
|
100.0
|
|
||||||
Total fixed income securities
|
|
$
|
51,963
|
|
|
$
|
2,722
|
|
|
$
|
7,296
|
|
|
$
|
274
|
|
|
$
|
59,259
|
|
|
$
|
2,996
|
|
|
87.7
|
%
|
(1)
|
Total Consumer and other ABS consists of $117 million of consumer auto, $102 million of credit card and $243 million of other ABS with unrealized net capital gains of $1 million, $1 million and $4 million, respectively.
|
Carrying value and other information for limited partnership interests
|
||||||||||||||
|
|
As of September 30, 2019
|
||||||||||||
($ in millions)
|
|
Limited partnership interests (1)
|
|
Number of managers
|
|
Number of individual investments
|
|
Largest exposure to single investment
|
||||||
Private equity
|
|
$
|
6,162
|
|
|
153
|
|
|
302
|
|
|
$
|
189
|
|
Real estate
|
|
1,008
|
|
|
37
|
|
|
73
|
|
|
69
|
|
||
Other
|
|
820
|
|
|
11
|
|
|
12
|
|
|
416
|
|
||
Total
|
|
$
|
7,990
|
|
|
201
|
|
|
387
|
|
|
|
|
(1)
|
We have commitments to invest in additional limited partnership interests totaling $2.87 billion.
|
Unrealized net capital gains (losses)
|
||||||||
($ in millions)
|
|
September 30, 2019
|
|
December 31, 2018
|
||||
U.S. government and agencies
|
|
$
|
256
|
|
|
$
|
131
|
|
Municipal
|
|
611
|
|
|
206
|
|
||
Corporate
|
|
2,005
|
|
|
(400
|
)
|
||
Foreign government
|
|
21
|
|
|
8
|
|
||
ABS
|
|
4
|
|
|
(4
|
)
|
||
RMBS
|
|
91
|
|
|
87
|
|
||
CMBS
|
|
7
|
|
|
7
|
|
||
Redeemable preferred stock
|
|
1
|
|
|
1
|
|
||
Fixed income securities
|
|
2,996
|
|
|
36
|
|
||
Derivatives
|
|
(3
|
)
|
|
(3
|
)
|
||
EMA limited partnerships
|
|
(3
|
)
|
|
—
|
|
||
Unrealized net capital gains and losses, pre-tax
|
|
$
|
2,990
|
|
|
$
|
33
|
|
Gross unrealized gains (losses) on fixed income securities by type and sector
|
||||||||||||||||
|
|
As of September 30, 2019
|
||||||||||||||
($ in millions)
|
|
Amortized
cost
|
|
Gross unrealized
|
|
Fair
value
|
||||||||||
|
Gains
|
|
Losses
|
|
||||||||||||
Corporate:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Energy
|
|
$
|
2,701
|
|
|
$
|
140
|
|
|
$
|
(23
|
)
|
|
$
|
2,818
|
|
Banking
|
|
4,360
|
|
|
141
|
|
|
(15
|
)
|
|
4,486
|
|
||||
Consumer goods (cyclical and non-cyclical)
|
|
11,898
|
|
|
516
|
|
|
(13
|
)
|
|
12,401
|
|
||||
Utilities
|
|
5,333
|
|
|
422
|
|
|
(6
|
)
|
|
5,749
|
|
||||
Technology
|
|
2,845
|
|
|
106
|
|
|
(4
|
)
|
|
2,947
|
|
||||
Financial services
|
|
2,602
|
|
|
103
|
|
|
(3
|
)
|
|
2,702
|
|
||||
Communications
|
|
2,815
|
|
|
159
|
|
|
(2
|
)
|
|
2,972
|
|
||||
Basic industry
|
|
2,072
|
|
|
111
|
|
|
(2
|
)
|
|
2,181
|
|
||||
Capital goods
|
|
5,104
|
|
|
237
|
|
|
(1
|
)
|
|
5,340
|
|
||||
Transportation
|
|
2,031
|
|
|
131
|
|
|
(1
|
)
|
|
2,161
|
|
||||
Other
|
|
252
|
|
|
9
|
|
|
—
|
|
|
261
|
|
||||
Total corporate fixed income portfolio
|
|
42,013
|
|
|
2,075
|
|
|
(70
|
)
|
|
44,018
|
|
||||
U.S. government and agencies
|
|
3,855
|
|
|
257
|
|
|
(1
|
)
|
|
4,111
|
|
||||
Municipal
|
|
8,227
|
|
|
615
|
|
|
(4
|
)
|
|
8,838
|
|
||||
Foreign government
|
|
972
|
|
|
24
|
|
|
(3
|
)
|
|
993
|
|
||||
ABS
|
|
818
|
|
|
10
|
|
|
(6
|
)
|
|
822
|
|
||||
RMBS
|
|
301
|
|
|
92
|
|
|
(1
|
)
|
|
392
|
|
||||
CMBS
|
|
57
|
|
|
8
|
|
|
(1
|
)
|
|
64
|
|
||||
Redeemable preferred stock
|
|
20
|
|
|
1
|
|
|
—
|
|
|
21
|
|
||||
Total fixed income securities
|
|
$
|
56,263
|
|
|
$
|
3,082
|
|
|
$
|
(86
|
)
|
|
$
|
59,259
|
|
Net investment income
|
||||||||||||||||
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
($ in millions)
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Fixed income securities
|
|
$
|
546
|
|
|
$
|
527
|
|
|
$
|
1,627
|
|
|
$
|
1,544
|
|
Equity securities
|
|
57
|
|
|
35
|
|
|
155
|
|
|
130
|
|
||||
Mortgage loans
|
|
54
|
|
|
52
|
|
|
161
|
|
|
163
|
|
||||
Limited partnership interests
|
|
197
|
|
|
210
|
|
|
460
|
|
|
563
|
|
||||
Short-term investments
|
|
28
|
|
|
19
|
|
|
80
|
|
|
50
|
|
||||
Other
|
|
66
|
|
|
71
|
|
|
196
|
|
|
205
|
|
||||
Investment income, before expense
|
|
948
|
|
|
914
|
|
|
2,679
|
|
|
2,655
|
|
||||
Investment expense (1) (2)
|
|
(68
|
)
|
|
(70
|
)
|
|
(209
|
)
|
|
(201
|
)
|
||||
Net investment income
|
|
$
|
880
|
|
|
$
|
844
|
|
|
$
|
2,470
|
|
|
$
|
2,454
|
|
|
|
|
|
|
|
|
|
|
||||||||
Market-based core
|
|
$
|
637
|
|
|
$
|
609
|
|
|
$
|
1,897
|
|
|
$
|
1,814
|
|
Market-based active
|
|
91
|
|
|
76
|
|
|
259
|
|
|
222
|
|
||||
Performance-based
|
|
220
|
|
|
229
|
|
|
523
|
|
|
619
|
|
||||
Investment income, before expense
|
|
$
|
948
|
|
|
$
|
914
|
|
|
$
|
2,679
|
|
|
$
|
2,655
|
|
(1)
|
Investment expense includes $19 million and $17 million of investee level expenses in the third quarter of 2019 and 2018, respectively, and $59 million and $53 million in the first nine months of 2019 and 2018, respectively. Investee level expenses include depreciation and asset level operating expenses on directly held real estate and other consolidated investments.
|
(2)
|
Investment expense includes $10 million and $8 million related to the portion of reinvestment income on securities lending collateral paid to the counterparties in the third quarter of 2019 and 2018, respectively, and $32 million and $19 million in the first nine months of 2019 and 2018, respectively.
|
Performance-based investment income
|
||||||||||||||||
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
($ in millions)
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Limited partnerships
|
|
|
|
|
|
|
|
|
||||||||
Private equity
|
|
$
|
125
|
|
|
$
|
123
|
|
|
$
|
336
|
|
|
$
|
452
|
|
Real estate
|
|
71
|
|
|
87
|
|
|
121
|
|
|
111
|
|
||||
Performance-based - limited partnerships
|
|
196
|
|
|
210
|
|
|
457
|
|
|
563
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Non-limited partnerships
|
|
|
|
|
|
|
|
|
||||||||
Private equity
|
|
5
|
|
|
1
|
|
|
18
|
|
|
7
|
|
||||
Real estate
|
|
19
|
|
|
18
|
|
|
48
|
|
|
49
|
|
||||
Performance-based - non-limited partnerships
|
|
24
|
|
|
19
|
|
|
66
|
|
|
56
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Total
|
|
|
|
|
|
|
|
|
||||||||
Private equity
|
|
130
|
|
|
124
|
|
|
354
|
|
|
459
|
|
||||
Real estate
|
|
90
|
|
|
105
|
|
|
169
|
|
|
160
|
|
||||
Total performance-based
|
|
$
|
220
|
|
|
$
|
229
|
|
|
$
|
523
|
|
|
$
|
619
|
|
|
|
|
|
|
|
|
|
|
||||||||
Investee level expenses (1)
|
|
$
|
(18
|
)
|
|
$
|
(15
|
)
|
|
$
|
(54
|
)
|
|
$
|
(48
|
)
|
(1)
|
Investee level expenses include depreciation and asset level operating expenses reported in investment expense.
|
Components of realized capital gains (losses) and the related tax effect
|
||||||||||||||||
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
($ in millions)
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Impairment write-downs
|
|
|
|
|
|
|
|
|
||||||||
Fixed income securities
|
|
$
|
(1
|
)
|
|
$
|
(3
|
)
|
|
$
|
(12
|
)
|
|
$
|
(6
|
)
|
Limited partnership interests
|
|
(1
|
)
|
|
(2
|
)
|
|
(4
|
)
|
|
(3
|
)
|
||||
Other investments
|
|
(12
|
)
|
|
—
|
|
|
(27
|
)
|
|
(1
|
)
|
||||
Total impairment write-downs
|
|
(14
|
)
|
|
(5
|
)
|
|
(43
|
)
|
|
(10
|
)
|
||||
Sales
|
|
147
|
|
|
(22
|
)
|
|
359
|
|
|
(139
|
)
|
||||
Valuation of equity investments
|
|
24
|
|
|
198
|
|
|
851
|
|
|
149
|
|
||||
Valuation and settlements of derivative instruments
|
|
40
|
|
|
5
|
|
|
16
|
|
|
17
|
|
||||
Realized capital gains and losses, pre-tax
|
|
197
|
|
|
176
|
|
|
1,183
|
|
|
17
|
|
||||
Income tax expense
|
|
(42
|
)
|
|
(35
|
)
|
|
(248
|
)
|
|
(1
|
)
|
||||
Realized capital gains and losses, after-tax
|
|
$
|
155
|
|
|
$
|
141
|
|
|
$
|
935
|
|
|
$
|
16
|
|
|
|
|
|
|
|
|
|
|
||||||||
Market-based core
|
|
$
|
107
|
|
|
$
|
121
|
|
|
$
|
838
|
|
|
$
|
(6
|
)
|
Market-based active
|
|
64
|
|
|
42
|
|
|
225
|
|
|
(18
|
)
|
||||
Performance-based
|
|
26
|
|
|
13
|
|
|
120
|
|
|
41
|
|
||||
Realized capital gains and losses, pre-tax
|
|
$
|
197
|
|
|
$
|
176
|
|
|
$
|
1,183
|
|
|
$
|
17
|
|
Capital resources
|
||||||||
($ in millions)
|
|
September 30, 2019
|
|
December 31, 2018
|
||||
Preferred stock, common stock, treasury stock, retained income and other shareholders’ equity items
|
|
$
|
24,033
|
|
|
$
|
21,194
|
|
Accumulated other comprehensive income
|
|
2,107
|
|
|
118
|
|
||
Total shareholders’ equity
|
|
26,140
|
|
|
21,312
|
|
||
Debt
|
|
6,630
|
|
|
6,451
|
|
||
Total capital resources
|
|
$
|
32,770
|
|
|
$
|
27,763
|
|
|
|
|
|
|
||||
Ratio of debt to shareholders’ equity
|
|
25.4
|
%
|
|
30.3
|
%
|
||
Ratio of debt to capital resources
|
|
20.2
|
%
|
|
23.2
|
%
|
Intercompany dividends
|
||||
($ in millions)
|
|
September 30, 2019
|
||
AIC to AIH
|
|
$
|
2,132
|
|
AIH to the Corporation
|
|
2,134
|
|
|
ALIC to AIC
|
|
75
|
|
•
|
The Corporation has access to a commercial paper facility with a borrowing limit of $1.00 billion to cover short-term cash needs. As of September 30, 2019, there were no balances outstanding and therefore the remaining borrowing capacity was $1.00 billion.
|
•
|
The Corporation, AIC and ALIC have access to a $1.00 billion unsecured revolving credit facility that is available for short-term liquidity requirements. The maturity date of this facility is April 2021. The facility is fully subscribed among 11 lenders with the largest commitment being $115 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 $500 million of borrowing. This facility has a financial covenant requiring that we not exceed a 37.5% debt to capitalization ratio as defined in the agreement. This ratio was 15.9% as of September 30, 2019. Although the right to borrow under the facility is not subject to a minimum rating requirement, the costs of maintaining the facility and borrowing under it are based on the ratings of our senior unsecured, unguaranteed long-term debt. There were no borrowings under the credit facility during 2019.
|
•
|
The Corporation has access to a universal shelf registration statement with the Securities and Exchange Commission that expires in 2021. We can use this shelf registration to issue an unspecified amount of debt securities, common stock (including 575 million shares of treasury stock as of September 30, 2019), preferred stock, depositary shares, warrants, stock purchase contracts, stock purchase units and securities of trust subsidiaries. The specific terms of any securities we issue under this registration statement will be provided in the applicable prospectus supplements.
|
Contractholder funds by contractual withdrawal provisions
|
|||||||
($ in millions)
|
|
|
|
Percent
to total
|
|||
Not subject to discretionary withdrawal
|
|
$
|
2,726
|
|
|
15.3
|
%
|
Subject to discretionary withdrawal with adjustments:
|
|
|
|
|
|||
Specified surrender charges (1)
|
|
4,723
|
|
|
26.5
|
|
|
Market value adjustments (2)
|
|
850
|
|
|
4.8
|
|
|
Subject to discretionary withdrawal without adjustments (3)
|
|
9,505
|
|
|
53.4
|
|
|
Total contractholder funds (4)
|
|
$
|
17,804
|
|
|
100.0
|
%
|
(1)
|
Includes $1.36 billion of liabilities with a contractual surrender charge of less than 5% of the account balance.
|
(2)
|
$399 million of the contracts with market value adjusted surrenders have a 30-45 day period at the end of their initial and subsequent interest rate guarantee periods (which are typically 1, 5, 7 or 10 years) during which there is no surrender charge or market value adjustment.
|
(3)
|
89% of these contracts have a minimum interest crediting rate guarantee of 3% or higher.
|
(4)
|
Includes $699 million of contractholder funds on variable annuities reinsured to The Prudential Insurance Company of America, a subsidiary of Prudential Financial Inc., in 2006.
|
Period
|
|
Total number of shares
(or units) purchased (1)
|
|
Average price
paid per share
(or unit)
|
|
Total number of shares (or units) purchased as part of publicly announced plans or programs (2)
|
|
Maximum number (or approximate dollar value) of shares (or units) that may yet be purchased under the plans or programs (3)
|
||||||
July 1, 2019 -
July 31, 2019
|
|
|
|
|
|
|
|
|
||||||
Open Market Purchases
|
|
1,800,424
|
|
|
$
|
103.22
|
|
|
1,800,329
|
|
|
|
||
August 1, 2019 -
August 31, 2019
|
|
|
|
|
|
|
|
|
||||||
Open Market Purchases
|
|
2,161,418
|
|
|
$
|
103.37
|
|
|
2,161,154
|
|
|
|
||
September 1, 2019 -
September 30, 2019
|
|
|
|
|
|
|
|
|
||||||
Open Market Purchases
|
|
1,876,001
|
|
|
$
|
106.59
|
|
|
1,875,686
|
|
|
|
||
Total
|
|
5,837,843
|
|
|
$
|
104.35
|
|
|
5,837,169
|
|
|
$
|
962
|
million
|
(1)
|
In accordance with the terms of its equity compensation plans, Allstate acquired the following shares in connection with the vesting of restricted stock units and performance stock awards and the exercise of stock options held by employees and/or directors. The shares were acquired in satisfaction of withholding taxes due upon exercise or vesting and in payment of the exercise price of the options.
|
(2)
|
From time to time, repurchases under our programs are executed under the terms of a pre-set trading plan meeting the requirements of Rule 10b5-1(c) of the Securities Exchange Act of 1934.
|
(3)
|
On October 31, 2018, we announced the approval of a common share repurchase program for $3 billion, which is expected to be completed by April 2020.
|
(a)
|
Exhibits
|
|
|
Incorporated by Reference
|
|
|||
Exhibit
Number
|
Exhibit Description
|
Form
|
File
Number
|
Exhibit
|
Filing
Date
|
Filed or
Furnished
Herewith
|
3.1
|
8-K
|
1-11840
|
3.1
|
August 5, 2019
|
|
|
4.1
|
The Allstate Corporation hereby agrees to furnish to the Commission, upon request, the instruments defining the rights of holders of each issue of long-term debt of it and its consolidated subsidiaries
|
|
|
|
|
|
4.2
|
8-K
|
1-11840
|
4.1
|
August 8, 2019
|
|
|
4.3
|
8-K
|
1-11840
|
4.2
|
August 8, 2019
|
|
|
4.4
|
8-K
|
1-11840
|
4.3
|
August 8, 2019
|
|
|
15
|
|
|
|
|
X
|
|
31(i)
|
|
|
|
|
X
|
|
31(i)
|
|
|
|
|
X
|
|
32
|
|
|
|
|
X
|
|
101.INS
|
Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
|
|
|
|
|
X
|
101.SCH
|
Inline XBRL Taxonomy Extension Schema Document
|
|
|
|
|
X
|
101.CAL
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
|
X
|
101.DEF
|
Inline XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
|
X
|
101.LAB
|
Inline XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
|
X
|
101.PRE
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
|
X
|
104
|
Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)
|
|
|
|
|
X
|
|
The Allstate Corporation
|
|
|
(Registrant)
|
|
|
|
|
|
|
|
|
|
|
October 29, 2019
|
By
|
/s/ John C. Pintozzi
|
|
|
John C. Pintozzi
|
|
|
Senior Vice President, Controller, and Chief Accounting Officer
|
|
|
(Authorized Signatory and Principal Accounting Officer)
|
Certifications
|
Exhibit 31 (i)
|
/s/ Thomas J. Wilson
|
Thomas J. Wilson
|
Chairman of the Board, President, and Chief Executive Officer
|
Certifications
|
Exhibit 31 (i)
|
/s/ Mario Rizzo
|
Mario Rizzo
|
Executive Vice President and Chief Financial Officer
|
/s/ Thomas J. Wilson
|
Thomas J. Wilson
|
Chairman of the Board, President, and Chief Executive Officer
|
|
/s/ Mario Rizzo
|
Mario Rizzo
|
Executive Vice President and Chief Financial Officer
|