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What changed in Allstate's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Allstate's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+522 added−518 removedSource: 10-K (2024-02-21) vs 10-K (2023-02-16)

Top changes in Allstate's 2023 10-K

522 paragraphs added · 518 removed · 413 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

37 edited+31 added−14 removed13 unchanged
Biggest changePrindiville 55 Executive Vice President and Chief Risk Officer of AIC (May 2020 to present); Senior Vice President of AIC (September 2016 to May 2020). 2016 Mario Rizzo 56 President, Property Liability of AIC (September 2022 to present); Executive Vice President and Chief Financial Officer of The Allstate Corporation and AIC (January 2018 to September 2022); Senior Vice President and Chief Financial Officer, Allstate Personal Lines of AIC (February 2015 to January 2018). 2010 Robert Toohey 55 Executive Vice President and Chief Human Resources Officer of AIC (March 2022 to present); Self-Employed Talent and Operations Advisor/Consultant (August 2021 to March 2022); President of Pymetrics (May 2019 to August 2021); Chief People Officer of Verizon Media (August 2016 to September 2018). 2022 Terrance Williams 54 President, Protection Products and Services of AIC (May 2022 to present); Executive Vice President, Allstate Sales and Distribution of AIC (November 2021 to May 2022); General Manager, Allstate Agency (January 2020 to November 2021); President of Emerging Businesses and EVP, Chief Marketing Officer of Nationwide Mutual Insurance Company (May 2017 to October 2019). 2020 20 www.allstate.com Item 1.
Biggest changePrindiville 56 Executive Vice President and Chief Risk Officer of AIC (May 2020 to present); Senior Vice President of AIC (September 2016 to May 2020). 2016 Mario Rizzo 57 President, Property-Liability of AIC (September 2022 to present); Executive Vice President and Chief Financial Officer of The Allstate Corporation and AIC (January 2018 to September 2022). 2010 Robert Toohey 56 Executive Vice President and Chief Human Resources Officer of AIC (March 2022 to present); Self-Employed Talent and Operations Advisor/Consultant (August 2021 to March 2022); President of Pymetrics (May 2019 to August 2021). 2022 20 www.allstate.com 2023 Form 10-K Item 1.
We use the “Allstate ®” , “National General ® ” and “Answer Financial ® ” brands extensively in our business. We also provide additional protection products and services through “Allstate SM Protection Plans”, “Allstate Dealer Services ® ”, “Allstate ® Roadside ”, “Arity ® ”, “Allstate SM Identity Protection” “Allstate ® Benefits” and “Allstate ® Health Solutions”, among others.
We use the “Allstate ®” , “National General ® ” and “Answer Financial ® ” brands extensively in our business. We also provide additional protection products and services through “Allstate ® Protection Plans”, “Allstate ® Dealer Services ® ”, “Allstate ® Roadside ”, “Arity ® ”, “Allstate ® Identity Protection” “Allstate ® Benefits” and “Allstate ® Health Solutions”, among others.
The Allstate Corporation’s annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments to such reports that we file or furnish pursuant to Section 13(a) of the Securities Exchange Act of 1934 are available on the Investor Relations section of our website (www.allstateinvestors.com), free of charge, as soon as reasonably practicable after they are electronically filed or furnished to the SEC.
The Allstate Corporation’s annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments to such reports that we file or furnish pursuant to Section 13(a) of the Securities Exchange Act of 1934 are available on the Investor Relations section of our website (www.allstateinvestors.com), free of charge, as soon as reasonably practicable after they are electronically filed or furnished to the SEC and available at www.sec.gov.
These risks and uncertainties include, but are not limited to, those described in Part 1, “Item 1A. Risk Factors” and elsewhere in this report and those described from time to time in our other reports filed with the Securities and Exchange Commission. The Allstate Corporation 21 2022 Form 10-K Part I - Item 1A. Risk Factors and Other Disclosures
These risks and uncertainties include, but are not limited to, those described in Part 1, “Item 1A. Risk Factors” and elsewhere in this report and those described from time to time in our other reports filed with the Securities and Exchange Commission. The Allstate Corporation 21 2023 Form 10-K Part I - Item 1A. Risk Factors and Other Disclosures
The statute, which became effective January 1, 2019, can be used to divide continuing blocks of insurance business from insurance business no longer marketed, or otherwise has been discontinued, into separate companies with separate capital. The statute can also be used for sale to a third party or to manage risks associated with indemnification programs.
The statute, which became effective January 1, 2019, can be used to divide continuing blocks of insurance business from insurance business no longer marketed, or otherwise discontinued into separate companies with separate capital. The statute can also be used for sale to a third party or to manage risks associated with indemnification programs.
We are unable to determine the impact, if any, that these developments will have on the collectability of reinsurance recoverables in the future. 16 www.allstate.com Item 1. Business 2022 Form 10-K Human Capital Allstate’s success is highly dependent on human capital.
We are unable to determine the impact, if any, that these developments will have on the collectability of reinsurance recoverables in the future. 16 www.allstate.com 2023 Form 10-K Item 1. Business Human Capital Allstate’s success is highly dependent on human capital.
Allstate Insurance Company and certain affiliate insurance companies utilized the division statute to form three Illinois domiciled insurance companies that retained assets and liabilities for certain Michigan automobile insurance policies with catastrophic personal injury claims that are ceded to the MCCA.
In 2021, Allstate Insurance Company and certain affiliate insurance companies utilized the division statute to form three Illinois domiciled insurance companies that retained assets and liabilities for certain Michigan automobile insurance policies with catastrophic personal injury claims that are ceded to the MCCA.
Merten 48 Executive Vice President and Chief Financial Officer of The Allstate Corporation and AIC (September 2022 to present); President, Financial Products of AIC (May 2020 to September 2022); Executive Vice President and Chief Risk Officer of AIC (December 2017 to May 2020); Treasurer of The Allstate Corporation (January 2015 to April 2019) and of AIC (February 2015 to May 2019). 2012 John C.
Merten 49 Executive Vice President and Chief Financial Officer of The Allstate Corporation and AIC (September 2022 to present); President, Financial Products of AIC (May 2020 to September 2022); Executive Vice President and Chief Risk Officer of AIC (December 2017 to May 2020); Treasurer of The Allstate Corporation (January 2015 to April 2019) and of AIC (February 2015 to May 2019). 2012 John C.
Business Information about our Executive Officers The following table sets forth the names of our executive officers as of February 1, 2023, their ages, positions, business experience, and the years of their first election as officers. “AIC” refers to Allstate Insurance Company.
Business Information about our Executive Officers The following table sets forth the names of our executive officers as of February 1, 2024, their ages, positions, business experience, and the years of their first election as officers. “AIC” refers to Allstate Insurance Company.
Wilson 65 Chairman of the Board (May 2008 to present), President (June 2005 to January 2015 and February 2018 to present), and Chief Executive Officer (January 2007 to present) of The Allstate Corporation and AIC. 1995 Elizabeth A.
Wilson 66 Chairman of the Board (May 2008 to present), President (June 2005 to January 2015 and February 2018 to present), and Chief Executive Officer (January 2007 to present) of The Allstate Corporation and AIC. 1995 Elizabeth A.
Pintozzi 57 Senior Vice President, Controller and Chief Accounting Officer of The Allstate Corporation and AIC (September 2019 to present); Senior Vice President and Chief Financial Officer, Allstate Investments (May 2012 to August 2019). 2005 Mark Q.
Pintozzi 58 Senior Vice President, Controller and Chief Accounting Officer of The Allstate Corporation and AIC (September 2019 to present); Senior Vice President and Chief Financial Officer, Allstate Investments (May 2012 to August 2019). 2005 Mark Q.
We believe that these service marks are important to our business and we intend to maintain our rights to them. The Allstate Corporation 19 2022 Form 10-K Item 1.
We believe that these service marks are important to our business and we intend to maintain our rights to them. The Allstate Corporation 19 2023 Form 10-K Item 1.
Business 2022 Form 10-K Forward-Looking Statements This report contains “forward-looking statements” that anticipate results based on our estimates, assumptions and plans that are subject to uncertainty. These statements are made subject to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995.
Business Forward-Looking Statements This report contains “forward-looking statements” that anticipate results based on our estimates, assumptions and plans that are subject to uncertainty. These statements are made subject to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995.
DeBiase 54 Executive Vice President, Chief Legal Officer, General Counsel and Corporate Secretary of The Allstate Corporation and AIC (January 2023 to present); Executive Vice President, Chief Administrative Officer and General Counsel of Brighthouse Financial (February 2018 to December 2022); Executive Vice President, General Counsel and Corporate Secretary of Brighthouse Financial (August 2017 to February 2018). 2023 John E.
DeBiase 55 Executive Vice President, Chief Legal Officer, General Counsel and Corporate Secretary of The Allstate Corporation and AIC (January 2023 to present); Executive Vice President, Chief Administrative Officer and General Counsel of Brighthouse Financial (February 2018 to December 2022). 2023 John E.
The Comprehensive Environmental Response Compensation and Liability Act of 1980 (the “Superfund”) and comparable state statutes (the “mini-Superfunds”) govern the clean-up and restoration of waste sites by Potentially Responsible Parties (“PRPs”).
Environmental Environmental pollution and clean-up of polluted waste sites is the subject of federal and state regulation. The Comprehensive Environmental Response Compensation and Liability Act of 1980 (the “Superfund”) and comparable state statutes (the “mini-Superfunds”) govern the clean-up and restoration of waste sites by Potentially Responsible Parties (“PRPs”).
In May 2017, the Environmental Protection Agency created a Superfund Task Force that issued proposed reforms in The Allstate Corporation 15 2022 Form 10-K Item 1. Business its 2019 final report. These recommendations address expediting clean-up and remediation processes, reducing the financial burden of the clean-up process, encouraging private investment, promoting redevelopment and community revitalization, and building and strengthening partnerships.
In May 2017, the Environmental Protection Agency created a Superfund Task Force that issued proposed reforms in its 2019 final report. These recommendations address expediting clean-up and remediation processes, reducing the financial burden of the clean-up process, encouraging private investment, promoting redevelopment and community revitalization, and building and strengthening partnerships.
Privacy Regulation and Data Security Federal law and the laws of many states require financial institutions to protect the security and confidentiality of consumer information and to notify consumers about their policies and practices relating to collection, use, and disclosure of consumer information and their policies relating to protecting the security and confidentiality of that information.
Privacy Regulation and Data Security Federal law and the laws of many states require financial institutions to protect the security and confidentiality of consumer information and to notify consumers about their policies and practices relating to collection, use, disclosure, and protection of consumer information. Federal law and the laws of many states also regulate disclosures and disposal of consumer information.
To date, courts have been inconsistent in their rulings on these issues. Allstate’s exposure to liability with regard to its insureds that have been, or may be, named as PRPs is uncertain. While comprehensive Superfund reform proposals have been introduced in Congress, only modest reform measures have been enacted.
To date, courts have been inconsistent in their rulings on these issues. The Allstate Corporation 15 2023 Form 10-K Item 1. Business Allstate’s exposure to liability with regard to its insureds that have been, or may be, named as PRPs is uncertain. While comprehensive Superfund reform proposals have been introduced in Congress, only modest reform measures have been enacted.
To address the requirements of the Covered Agreement, the NAIC formally adopted revisions to its existing credit for reinsurance model law and model regulation to conform with the requirements of the Covered Agreement with the expectation that states would adopt and implement the modified model law and regulation by September 2022.
To address the requirements of the Covered Agreement, the NAIC formally adopted revisions to its existing credit for reinsurance model law and model regulation, with the expectation that states would adopt and implement the modified model law and regulation by September 2022. A sufficient number of states have adopted the model law and/or regulation to avoid federal preemption.
Additional states are also likely to adopt similarly themed cybersecurity requirements in the future. We cannot predict the impact on our business of possible future legislative or regulatory measures regarding privacy or cybersecurity. Asbestos Congress has repeatedly considered legislation to address asbestos claims and litigation in the past.
We cannot predict the impact on our business of possible future legislative or regulatory measures regarding privacy or cybersecurity. Asbestos Congress has repeatedly considered legislation to address asbestos claims and litigation in the past. We cannot predict the impact on our business of possible future legislative measures regarding asbestos.
This has enabled us to recruit a more geographically dispersed and diverse talent pool, as well as to reduce our facilities footprint. • Performance review and development takes place throughout the year.
This has enabled us to recruit a more geographically dispersed and diverse talent pool, as well as to reduce our facilities footprint. • Performance review and development takes place throughout the year, with a renewed focus on driving performance through ongoing feedback and coaching.
The wellbeing of our employees is a key priority, and Allstate strives to promote a dynamic and welcoming workplace that promotes inclusive diversity and equity, fosters collaboration, and encourages employees to bring their best ideas to work every day. As of December 31, 2022, Allstate had approximately 54,000 full-time employees and 500 part-time employees.
The wellbeing of our employees is a key priority, and Allstate strives to promote a dynamic and welcoming workplace that promotes inclusive diversity and equity, fosters collaboration, and encourages employees to be fully engaged in their work every day. As of December 31, 2023, Allstate had approximately 53,000 full-time employees and 400 part-time employees.
Business Talent Recruitment and Management We seek to provide employees with rewarding work, professional growth and educational opportunities. • Our flexible work and equal opportunity policies support talent attraction and retention.
Allstate’s human capital management focuses on the following priorities: Talent Recruitment and Management We seek to provide employees with rewarding work, professional growth and educational opportunities. • Our flexible work and equal opportunity policies support talent attraction and retention.
For example, the California Consumer Privacy Act, which took effect in January 2020, as amended by the California Privacy Rights Act, which took effect in January 2023, as well as similar laws in Virginia and Connecticut, adopted significant compliance requirements for businesses in those states.
For example, the California Consumer Privacy Act, as amended by the California Privacy Rights Act, which took effect in January 2023, as well as similar laws in Virginia, Connecticut, and approximately nine other states (with various effective dates), impose significant compliance requirements for certain businesses in those states.
A sufficient number of states adopted the model and/or regulation to avoid federal preemption. Division Statute On November 27, 2018, the Illinois General Assembly passed legislation authorizing a statute that makes available a process by which a domestic insurance company may divide into two or more domestic insurance companies.
Division Statute On November 27, 2018, the Illinois General Assembly passed legislation authorizing a statute that makes available a process by which a domestic insurance company may divide into two or more domestic insurance companies.
Allstate’s human capital management focuses on the following priorities: Inclusive Diversity and Equity (“IDE”) We strive for a workforce where the breadth of our diversity makes us a better company. IDE is one of Allstate’s core values and serves as a foundation of Our Shared Purpose.
Inclusive Diversity and Equity We strive for a workforce where the breadth of our diversity makes us a better company. IDE is one of Allstate’s core values of Our Shared Purpose.
Brady 58 Executive Vice President, Chief Marketing, Customer and Communications Officer of AIC (January 2020 to present); Executive Vice President and Chief Marketing, Innovation and Corporate Relations Officer of AIC (August 2018 to January 2020); Senior Vice President, Global Brand Management of Kohler Co. (November 2013 to July 2018). 2018 Christine M.
Brady 59 Executive Vice President, Chief Marketing, Customer and Communications Officer of AIC (January 2020 to present); Executive Vice President and Chief Marketing, Innovation and Corporate Relations Officer of AIC (August 2018 to January 2020). 2018 Christine M.
For additional information, please see the section titled “Our Key ESG Priorities-People” in our Proxy Statement. In addition to the above discussion of our employees, please see information about Allstate agents under the caption “Allstate Protection Segment - Products and Distribution” in Part I, Item 1 of this report. 18 www.allstate.com Item 1.
In addition to the above discussion of our employees, please see information about Allstate agents under the caption “Allstate Protection Segment - Products and Distribution” in Part I, Item 1 of this report. 18 www.allstate.com 2023 Form 10-K Item 1. Business Website Our website is allstate.com.
Dugenske 56 President, Investments and Corporate Strategy of AIC (September 2022 to present); President, Investments and Financial Products of AIC (January 2020 to September 2022); Executive Vice President and Chief Investment and Corporate Strategy Officer of AIC (January 2018 to January 2020); Executive Vice President and Chief Investment Officer of AIC (March 2017 to January 2018). 2017 Suren Gupta 61 President, Enterprise Services (October 2022 to present); Executive Vice President, Chief Information Technology and Enterprise Services Officer of AIC (January 2020 to October 2022); Executive Vice President, Enterprise Technology and Strategic Ventures of AIC (February 2015 to January 2020). 2011 Jesse E.
Dugenske 57 President, Investments and Corporate Strategy of AIC (September 2022 to present); President, Investments and Financial Products of AIC (January 2020 to September 2022); Executive Vice President and Chief Investment and Corporate Strategy Officer of AIC (January 2018 to January 2020). 2017 Suren Gupta 62 President, Protection Products & Enterprise Services (August 2023 to present); President, Enterprise Services (October 2022 to August 2023); Executive Vice President, Chief Information Technology and Enterprise Services Officer of AIC (January 2020 to October 2022); Executive Vice President, Enterprise Technology and Strategic Ventures of AIC (February 2015 to January 2020). 2011 Zulfikar Jeevanjee 59 Executive Vice President, Chief Information Officer of AIC (October 2022 to present); Senior Vice President, Chief Technology Officer, CVS Health (February 2021 to September 2022); Senior Vice President, Chief Enterprise Architect of AIC (November 2018 to February 2021); Senior Vice President, Group Technology Manager, Wells Fargo (December 2008 to October 2018). 2022 Jesse E.
We partner with external law and data analytics firms to provide a more detailed analysis to identify potential pay gaps across substantially similar employee groups as well as identify policies, practices or systematic issues that may contribute to pay gaps now or over time.
Annually, we identify potential pay gaps across substantially similar employee groups as well as identify policies, practices or systematic issues that may contribute to pay gaps.
Federal law and the laws of many states also regulate disclosures and disposal of consumer information. Congress, state legislatures, and regulatory authorities are currently considering additional regulation relating to privacy and other aspects of consumer information.
Congress, state legislatures, and regulatory authorities are currently considering additional regulation relating to privacy of personal information.
The U.S. had five years from the date of signing to amend its credit for reinsurance laws and regulations to conform with the requirements of the Covered Agreement or face federal preemption determinations by the FIO.
Dodd-Frank: Covered Agreement On September 22, 2017, the U.S. and European Union signed a Covered Agreement, a bilateral agreement that “relates to the recognition of prudential measures with respect to the business of insurance or reinsurance that achieves a level of protection for insurance or reinsurance consumers that is substantially equivalent to the level of protection achieved under State insurance or reinsurance regulation.” The U.S. had five years from the date of signing to amend its credit for reinsurance laws and regulations to conform with the requirements of the Covered Agreement or face federal preemption determinations by the FIO.
In another example, the New York State Department of Financial Services cybersecurity regulation and the NAIC Insurance Data Security Model Law, which has been adopted in some form by several states, establish standards for data security, including the investigation of and notification to insurance commissioners of cybersecurity events.
The NAIC created an Insurance Data Security Model Law, which several states have adopted in some form, establishing standards for data security, including the investigation of and notification to insurance commissioners of cybersecurity events. Additional states are also likely to adopt similarly themed cybersecurity requirements in the future.
The external analyses found that Allstate’s results compared well to benchmarks for companies of similar size and scope. • Allstate’s Employee Impact Groups (“EIG”) help advance IDE. – In 2022, Allstate rebranded “Employee Resource Groups” to “Employee Impact Groups” to focus on impact and integration into the business.
The external analyses found that Allstate’s results compared well to benchmarks for companies of similar size and scope. • Allstate supports and funds Employee Impact Groups (“EIGs”) and Business Impact Groups (“BIGs”) to help advance IDE and create opportunities for employees to work together to create business solutions. – EIGs are voluntary employee-led communities that enhance the employee experience through engagement, development and collaboration.
Allstate invests in training and re-skilling opportunities, with most of our learning experiences offered virtually to support our remote and global workforce. • In 2022: – Employees completed over 1.1 million hours in formal learning opportunities. – Over 700 employees participated in Allstate’s tuition reimbursement program, with $2.6 million paid in tuition reimbursement. – 40% of open positions were filled with internal applicants.
Allstate invests in training and re-skilling opportunities, with most of our learning experiences offered virtually to support our remote and global workforce. • In 2023, Allstate: – Introduced a new education benefit provider, Guild.
We expect all employees to be leaders and dedicate extensive resources to developing leaders at all levels. • Allstate defines culture as a self-sustaining system of shared values, priorities and principles that shape beliefs and drive behaviors and decision-making within an organization. • In 2022, we continued to focus on further embedding Our Shared Purpose into the employee experience, including in our recruiting and hiring practices, performance management, learning and development offerings, leadership development and employee feedback and measurement.
Organizational Culture Allstate defines culture as a self-sustaining system of shared values, priorities and principles that shape beliefs and drive behaviors and decision-making within an organization. Allstate encourages employees to proactively manage their career so it is integrated into their personal purpose.
They bring value to participants and impact Allstate through cultural education and awareness, market and community outreach, professional development, recruiting, retention, and customer engagement. – Officers from across the enterprise leverage their time, networks and resources to support the EIGs and positively impact employee engagement and feelings of belonging at Allstate. • In 2022, employees completed more than 31,000 IDE courses. • Allstate continues to look for ways to build awareness and drive action to be a differentiated leader in IDE.
They bring value to participants and impact Allstate through cultural education and awareness, market and community outreach, professional development, recruiting, retention, and customer engagement.
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Item 1. Business 2022 Form 10-K On September 22, 2017, the U.S. and European Union (“EU”) signed a Covered Agreement. In addition to signing the Covered Agreement, Treasury and the USTR jointly issued a policy statement clarifying how the U.S. views implementation of certain provisions of the Covered Agreement.
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Item 1. Business Recent regulatory changes have occurred related to the MCCA. • On July 2, 2021, Public Acts 21 and 22, which passed in 2019, became effective, setting fee schedules for personal injury protection claims.
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The policy statement affirms the U.S. system of insurance regulation, including the role of state insurance regulators as the primary supervisors of the business of insurance and addresses several other key provisions of the Covered Agreement for which constituents sought clarity, including prospective application to reinsurance agreements and an affirmation that the Covered Agreement does not require development of a group capital standard or group capital requirement in the U.S.
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Such fee schedules were set at 200% of Medicare rates in 2021, declining to 195% in 2022 and 190% in 2023, for any providers other than certain unique categories of providers and applying to treatment on existing and new claims. • Other legislative proposals to change the MCCA operation in the future and to adjust Public Acts 21 and 22 are put forth periodically, as well as a recent Michigan Supreme Court decision that found that the reimbursement rates described above applied only to motor vehicle accidents occurring in 2019 or later.
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Among other things, the California Privacy Rights Act expanded consumer privacy rights and established a new privacy regulatory agency.
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For a discussion of these items see Note 11 of the consolidated financial statements. Note 11 is incorporated in this Part I, Item 1 by reference. Guaranty Funds Under state insurance guaranty fund laws, insurers doing business in a state can be assessed, up to prescribed limits, in order to cover certain obligations of insolvent insurance companies.
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We cannot predict the impact on our business of possible future legislative measures regarding asbestos. Environmental Environmental pollution and clean-up of polluted waste sites is the subject of federal and state regulation.
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We do not anticipate any material adverse financial impact on Allstate from these assessments. Investment Regulation Our insurance subsidiaries are subject to state regulation that specifies the types of investments that can be made and concentration limits of invested assets.
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U.S. workforce diversity as of December 31, 2022 Women 58% Racially and ethnically diverse 42% • We track our workforce composition data over time to determine if we are making appropriate progress in advancing gender and racial representation in our employee population and we disclose our progress.
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Failure to comply with these rules leads to the treatment of non-conforming investments as non-admitted assets for purposes of measuring statutory surplus. Further, in some instances, these rules require divestiture of non-conforming investments. Exiting Geographic Markets; Canceling and Non-Renewing Policies Most states regulate an insurer’s ability to exit a market.
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In our Sustainability Report, we provide, among other things, five years of workforce composition data that shows a breakdown of salaried, hourly and management employees by gender and race. Beginning in 2021, we also disclose our EEO-1 data. • As part of our commitment to fair and equitable compensation practices, we complete an annual pay equity analysis.
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For example, states may limit, to varying degrees, an insurer’s ability to cancel and non-renew policies. Some states restrict or prohibit an insurer from withdrawing one or more types of insurance business from the state, except pursuant to a plan that is approved by the state insurance department.
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Allstate supports and funds ten EIGs. – EIGs are diverse communities that enhance the employee experience through engagement, development and collaboration.
Added
Regulations that limit cancellation and non-renewal and that subject withdrawal plans to prior approval requirements may restrict an insurer’s ability to exit unprofitable markets.
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In 2022, we: – Continued to drive skills-based hiring without 4-year degree requirements on job postings. – As a member of the OneTen Initiative, launched Apprenticeship Program, Internship Program and Entry Level Rotational Program. – Launched a new education strategy with offerings to build intercultural competence and an inclusive culture, and established metrics to measure the impact of course offerings on employees and the business. – Implemented an IDE Talent Scorecard to drive leadership accountability for developing a workforce that mirrors the diversity of the communities and customers Allstate serves. – Launched Allstate IDE A.C.T.
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Broker-Dealer and Investment Advisers The Allstate entities that operate as a broker-dealer and registered investment advisers are subject to regulation and supervision by the Securities and Exchange Commission (“SEC”), Financial Institution Regulatory Authority and/or, in some cases, state securities administrators.
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(Accountability, Clarity, Transparency) Framework, integrating IDE strategy, goals, and collaboration across Allstate. This model drives accountability and reduces complexity by clarifying roles. Employee Wellbeing and Safety We take seriously our responsibility to care for employees’ well-being, devoting resources to employee health and safety. • Allstate utilized strong guiding principles to drive our response to the pandemic.
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The SEC has proposed rules and amendments related to cybersecurity risk management and cybersecurity-related disclosure for broker-dealers, registered investment advisers, registered investment companies, and business development companies. Certain state and federal regulators are considering or have implemented best interest or fiduciary standards.
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These principles included complying with regulations, relying on expert medical advice, adapting our approach to individual circumstances, and keeping our employees, agents, and customers safe. • We conduct wellbeing assessments to solicit employee feedback about physical, emotional, mental and financial wellbeing.
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Such standards could impact products provided by Allstate agents and Allstate’s broker-dealer, their sales processes, sales volume, and producer compensation arrangements. Inflation Reduction Act of 2022 The Inflation Reduction Act of 2022, which contains several tax-related provisions, was signed into law in August 2022.
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Completing the assessment lowers the cost of benefits to employees. • We offer resilience and stress management programs, including Energy for Life, designed to help employees articulate and pursue their individual purpose and embrace new challenges with ease.
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The law creates a 15% corporate alternative minimum tax (“CAMT”) on certain large corporations and an excise tax of 1% on stock repurchases by publicly traded U.S. corporations, both effective after December 31, 2022. The excise tax on common stock repurchases is classified as an additional cost of the stock acquired included in treasury stock in shareholders' equity.
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Over 40,000 employees have taken this wellness workshop since 2010. • The EIGs provided multiple forums in 2022 to share wellness resources and support for their members. • Wellbeing Champions promote Allstate’s health and wellness resources across the enterprise, including yoga and meditation classes. The Allstate Corporation 17 2022 Form 10-K Item 1.
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The Company has determined that it is considered an “applicable corporation” under the rules of CAMT. 15% Global Minimum Tax The Organization for Economic Cooperation and Development (“OECD”) secured agreement from nearly 140 countries to address how corporate profits are taxed for multinational enterprises (“MNEs”).
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Organizational Culture At Allstate, we believe that when your passion fuels your purpose, you can achieve anything.
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OECD has released Pillar Two Model Rules, a 15% minimum effective tax rate (also known as the Global Anti-Base Erosion “GloBE” Rules), designed to ensure that large MNEs pay a minimum level of tax on the income arising in each jurisdiction where they operate and mandates sharing of certain company information with taxing authorities on a local and global basis.
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Business 2022 Form 10-K Website Our website is allstate.com.
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Certain jurisdictions have enacted, and others have proposed, legislation to implement certain provisions of Pillar Two for fiscal years beginning on or after December 31, 2023. We are continuing to monitor the implications resulting from the potential enactment of Pillar Two rules in the jurisdictions where we operate.
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Climate disclosures In March 2022, the SEC released its climate-related proposed regulation, requiring registrants to provide certain climate-related information in their registration statements and annual reports. The proposed rule would require information about a registrant’s climate-related risks that are reasonably likely to have a material impact on its business, results of operations, or financial condition.
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The required information about climate-related risks would also include disclosure of a registrant’s greenhouse gas emissions, which have become a commonly used metric to assess a registrant’s exposure to such risks. In addition, under the proposed rule, certain climate-related financial metrics would be required in a registrant’s audited financial statements.
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The Company is evaluating the anticipated impacts of the proposed guidance to its disclosures. In October 2023, California enacted several climate disclosure bills. One of these is the Climate Corporate Data Accountability Act (Senate Bill 253), which requires disclosure and assurance over greenhouse gas emissions using a phased reporting approach.
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The law requires the California Air Resources Board to develop and adopt implementing regulations no later than January 1, 2025. Allstate has publicly reported its greenhouse gas inventory since 2010. We will continue 14 www.allstate.com 2023 Form 10-K Item 1. Business evaluating the anticipated impacts and scope of the new laws on our reporting and disclosures.
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Among other things, these privacy laws provide consumers with privacy rights such as the right to request access to or deletion of their personal information. The California Privacy Rights Act established a new privacy regulatory agency. In November 2023, the New York State Department of Financial Services amended its cybersecurity regulation, including both new and heightened requirements.
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Guild expands support and access to over 80 tuition-free professional degrees, certificates and bootcamps to all U.S. based employees at more than 25 schools. – Completed more than 450 thousand hours of voluntary continued learning from external and internal providers – Delivered over 400 virtually facilitated workshops focused on technical upskilling, well-being, on-boarding, Inclusive Diversity and Equity (“IDE”), and leadership development, totaling close to 800 hours of learning for over 10,000 participants – Invested over $2.4 million towards the cost of the degrees of almost 700 U.S. employees. – Filled over 28% of open U.S. positions with internal applicants.
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U.S. workforce diversity as of December 31, 2023 Women 55% Racially and ethnically diverse 40% • Talent acquisition, development, retention, and mobility practices support employees in achieving their career aspirations. We work to create a diverse talent pipeline. • As part of our commitment to fair and equitable compensation practices, we complete pay equity analyses.
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EIGs are required to interact with at least two other EIGs annually. – BIGs, voluntary employee-led groups that focus on creating business impact and serve as an incubator for innovation, collaboration and professional development. – Officers from across the enterprise leverage their time, networks and resources to support the EIGs and BIGs, and positively impact employee engagement and feelings of belonging at Allstate. • Allstate continues to make significant progress on our IDE strategy while aligning it to Allstate’s global talent strategy.
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In 2023, we: – Improved representation by attracting more qualified candidates with remote work options. We’ve seen an increase in applicants since we announced our permanent flexible work environment, including an increase in diverse candidates. – Since the Allstate IDE A.C.T.
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(Accountability, Clarity, Transparency) Framework rolled out in 2022, every business unit now has either an IDE Inclusion Council or an IDE Business Lead that partners with Human Resources on their business area-based action plans to achieve our corporate IDE strategy. – Incorporated IDE behavior questions into structured interviews for executive candidates. The Allstate Corporation 17 2023 Form 10-K Item 1.
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Business Employee Well-being and Safety We believe in a culture of well-being and take our responsibility to care for employees’ well-being seriously, devoting resources to employee health and safety. • Allstate created a workplace well-being strategy based on employee feedback, including providing greater flexibility in how, when, and where work is done. • Allstate hosts enterprise-wide talks with subject matter experts sharing personal stories and fact-based best practices to provide tangible ways employees can support their individual journey.
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EIGs promote sessions that are relevant to their networks to build a sense of community. • Communications and voluntary courses facilitated by internal performance coaches on well-being themes of mind, body, wallet and community are shared so employees can engage in content that matters most to them. • Well-being assessments are offered to understand employee needs and wants to support their well-being.
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Completing the assessment lowers the cost of benefits to employees and allows Allstate to provide holistic programs based on personalized interests. • Our Wellbeing Champion community connects their teams and leaders with Allstate’s health and wellness resources and promotes opportunities to engage in programs, including virtual yoga and meditation classes offered four times a week.
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This includes investing in and holding management accountable for employee development and maintaining a culture aligned with Our Shared Purpose at all levels. • We have a strong culture built on shared purpose, values, standards, and behaviors and are transforming to become the lowest cost protection provider with an affordable, simple, connected experience. • We focus on Integrity & Ethics, Belonging, Meaningful Work, Performance Standards, Career Development, Employee Listening, Distributed Work and Well-being to make Allstate a place talent loves. • Allstate continues to commit to leadership development, now with the introduction of the Leading at Allstate program.
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This initiative, focusing on leading change, performance and growth, leadership styles, and leading distributed teams, saw a successful fourth quarter early adopter pilot.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeRisk Factors and Other Disclosures • Increases in market interest rates, credit spreads or a decrease in liquidity could have an adverse effect on the value of our fixed income securities that form a substantial majority of our investment portfolios • Supply chain disruptions, labor shortages and other factors have and may continue to increase inflation, which could have an adverse impact on investment valuations and returns • Weak performance of general and joint venture partners and underlying investments unrelated to general market or economic conditions could lead to declines in investment income and cause realized losses in our limited partnership interests • Concentration in any particular issuer, industry, collateral type, group of related industries, geographic sector or risk type The amount and timing of net investment income, capital contributions and distributions from our performance-based investments, which primarily include limited partnership interests that are recorded on a lag, can fluctuate significantly due to the underlying investments’ performance or changes in market or economic conditions.
Biggest changeRisk Factors and Other Disclosures Our investments are subject to risks associated with economic and capital market conditions and factors that may be unique to our portfolio, including: • General weakening of the economy, which is typically reflected through higher credit spreads and lower equity and real estate valuations • Declines in credit quality • Declines in interest rates, credit spreads or sustained low interest rates could lead to declines in portfolio yields and investment income • Increases in market interest rates, credit spreads or a decrease in liquidity could have an adverse effect on the value of our fixed income securities that form a substantial majority of our investment portfolios • Supply chain disruptions, labor shortages, macro trends impacting real estate supply and demand and other factors may have an adverse impact on investment valuations and returns • Weak performance of general and joint venture partners and underlying investments unrelated to general market or economic conditions could lead to declines in investment income and cause realized losses in our limited partnership interests • Concentration in any particular issuer, industry, collateral type, group of related industries, geographic sector or risk type The amount and timing of net investment income, capital contributions and distributions from our performance-based investments, which primarily include limited partnership interests that are recorded on a lag, can fluctuate significantly due to the underlying investments’ performance or changes in market or economic conditions.
Losses from legal and regulatory actions may be material to our results of operations, cash flows and financial condition We are involved in various legal actions, including class-action litigation challenging a range of company practices and coverages provided by our insurance products, some of which involve claims for substantial or indeterminate amounts.
Losses from legal and regulatory actions may be material to our results of operations, cash flows and financial condition We are involved in various legal actions, including class-action litigation challenging a range of company practices; including coverages provided by our insurance products, some of which involve claims for substantial or indeterminate amounts.
Accordingly, we may be required to adopt new guidance or interpretations, which may have a material effect on our results of operations and financial condition and could adversely impact financial strength ratings. • Market declines, changes in business strategies or other events impacting the fair value of goodwill or purchased intangible assets could result in an impairment charge to income • Realization of our deferred tax assets assumes that we can fully utilize the deductions recognized for tax purposes; we may recognize additional tax expense if these assets are not fully utilized • New tax legislative initiatives may be enacted that may impact our effective tax rate and could adversely affect our tax positions or tax liabilities See MD&A, Application of Critical Accounting Estimates and Note 2 of the consolidated financial statements for further details.
Accordingly, we may be required to adopt new guidance or interpretations, which may have a material effect on our results of operations and financial condition and could adversely impact financial strength ratings. • Market declines, changes in business strategies or other events impacting the fair value of goodwill or purchased intangible assets could result in an impairment charge to income • Realization of our deferred tax assets assumes that we can fully utilize the deductions recognized for tax purposes; we may recognize additional tax expense if these assets are not fully utilized • New tax legislative initiatives may be enacted that may impact our effective tax rate and could adversely affect our tax positions or tax liabilities See the Regulation section, MD&A, Application of Critical Accounting Estimates and Note 2 of the consolidated financial statements for further details.
Reinsurance subjects us to counterparty risk and may not be adequate to protect us against losses arising from ceded insurance Collecting from reinsurers is subject to uncertainty arising from factors that include: • Whether reinsurers, their affiliates or certain indemnitors have the financial capacity and willingness to make payments under the terms of a reinsurance treaty or contract • Whether insured losses meet the qualifying conditions of the reinsurance contract Our inability to recover from a reinsurer could have a material effect on our results of operations and financial condition.
Risk Factors and Other Disclosures Reinsurance subjects us to counterparty risk and may not be adequate to protect us against losses arising from ceded insurance Collecting from reinsurers is subject to uncertainty arising from factors that include: • Whether reinsurers, their affiliates or certain indemnitors have the financial capacity and willingness to make payments under the terms of a reinsurance treaty or contract • Whether insured losses meet the qualifying conditions of the reinsurance contract Our inability to recover from a reinsurer could have a material effect on our results of operations and financial condition.
Our reserving methodology may be impacted by the following: • Models that rely on the assumption that past loss development patterns will persist into the future • Internal factors including experience with similar cases, actual claims paid, historical trends involving claim payment patterns, pending levels of unpaid claims, loss management programs, product mix, contractual terms and changes in claim reporting and settlement practices • External factors such as inflation, court decisions, changes in law or litigation imposing unintended coverage, regulatory requirements, changes in driving patterns, delays in reporting of claims and economic conditions • Supply chain disruptions and labor shortages could increase the cost of settling claims • The ultimate cost of losses, or our current estimates, have and may continue to vary materially from recorded reserves and such variance may adversely affect our results of operations and financial condition as the reserves and amounts due from reinsurers are reestimated See MD&A, Application of Critical Accounting Estimates for further details.
Our reserving methodology may be impacted by the following: • Models that rely on the assumption that past loss development patterns will persist into the future • Internal factors including experience with similar cases, actual claims paid, historical trends involving claim payment and case reserving patterns, pending levels of unpaid claims, loss management programs, product mix, contractual terms and changes in claim reporting and settlement practices • External factors such as inflation, court decisions, changes in law or litigation imposing unintended coverage, regulatory requirements, changes in driving patterns, delays in reporting of claims and economic conditions, supply chain disruptions and labor shortages • The ultimate cost of losses, or our current estimates, have and may continue to vary materially from recorded reserves and such variance may adversely affect our results of operations and financial condition as the reserves and amounts due from reinsurers are reestimated See MD&A, Application of Critical Accounting Estimates for further details.
Changes in technology related to collection and application of data regarding customers could expose us to regulatory or legal actions and may have a material adverse effect on our business, reputation, results of operations and financial condition. Technology and customer preference changes may impact the ways in which we interact, do business with our customers and design our products.
Changes in technology related to collection and application of data regarding customers could expose us to regulatory or legal actions and may have a material adverse effect on our business, reputation, results of operations and financial condition. Changes in technology and customer preferences may impact the ways in which we interact, do business with our customers and design our products.
Its principal assets are the stock of its subsidiaries and its directly held cash and investment portfolios. Its liabilities include debt and pension and other postretirement benefit obligations related to Allstate Insurance Company employees. State insurance regulatory authorities limit the payment of dividends by insurance subsidiaries, as described in Note 17 of the consolidated financial statements.
Its principal assets are the stock of its subsidiaries and its directly held cash and investment portfolios. Its liabilities include debt and pension and other postretirement benefit obligations related to employees. State insurance regulatory authorities limit the payment of dividends by insurance subsidiaries, as described in Note 17 of the consolidated financial statements.
There is a risk that employers may be able to obtain more favorable terms from competitors than they could by renewing coverage with us. These competitive pressures may adversely affect the renewal of these contracts, as well as our ability to sell products.
There is a risk that employers and retailers may be able to obtain more favorable terms from competitors than they could by renewing coverage with us. These competitive pressures may adversely affect the renewal of these contracts, as well as our ability to sell products.
To the extent the MCCA’s current and future assessments are insufficient to reimburse its ultimate obligation on existing claims to member companies, our ability to obtain the 100% indemnification of ultimate loss could be impaired. We also participate in the Federal Government National Flood Insurance Program.
To the extent the MCCA’s current and future assessments are insufficient to reimburse its ultimate obligation on existing claims to member companies, our ability to obtain the 100% indemnification of ultimate losses could be impaired. We also participate in the Federal Government National Flood Insurance Program.
Macro, regulatory and risk environment Conditions in the global economy and capital markets could continue to adversely affect our business and results of operations Global economic and capital market conditions could continue to adversely impact demand for our products, returns on our investment portfolio and results of operations.
Macro, regulatory and risk environment Conditions in the global economy and capital markets could adversely affect our business and results of operations Global economic and capital market conditions could adversely impact demand for our products, returns on our investment portfolio and results of operations.
Our competitive position could be impacted if we are unable to deploy, in a cost effective and competitive manner, technology such as artificial intelligence and machine learning that collects and analyzes data to inform underwriting or other decisions, or if our competitors collect and use data which we do not have the ability to access or use.
Our competitive position could be impacted if we are unable to deploy, in a cost effective and competitive manner, technology such as artificial intelligence, large language models and machine learning that collects and analyzes data to inform underwriting or other decisions, or if our competitors collect and use data which we do not have the ability to access or use.
Reinsurance may be unavailable at current levels and prices, which may limit our ability to write new business Market conditions impact the availability and cost of the reinsurance we purchase. Reinsurance may not remain continuously available to us to the same extent and on the same terms and rates as is currently available.
Reinsurance may be unavailable at current levels and prices, which may limit our ability to write new business Market conditions impact the availability and cost of the reinsurance we purchase. Reinsurance may not remain continuously available to us to the same extent and on the same terms and rates as were historically available or is currently available.
These include vendors of computer hardware, software, cloud technology and software as a service, as well as vendors or outsourcing of services such as: • Claim adjustment services • Call center services for customer support • Human resource benefits management • Information technology support • Investment management services We continue to identify ways to improve operating efficiency and reduce cost, which may result in additional outsourcing arrangements in the future.
These include vendors of computer hardware, software, cloud technology and software as a service, as well as vendors or outsourcing of services such as: • Claim and administrative services • Call center services for customer support • Human resource benefits management • Information technology support • Investment management services • Financial and business support services We continue to identify ways to improve operating efficiency and reduce cost, which may result in additional outsourcing arrangements in the future.
Insurance and financial services Business, strategy and operations Macro, regulatory and risk environment Risks related to the insurance and financial services industries Risks related to Allstate’s business and operating model Risks that impact most companies • Claim frequency and severity volatility • Catastrophes and severe weather • Loss cost estimates are complex and losses are unknown at the time policies are sold • Investment results are subject to market volatility and valuation judgments • Highly competitive industry, impacted by new and changing technologies • Operating model effectiveness in light of changing customer preferences • Ability to maintain catastrophe reinsurance programs and limits • Fluctuations in financial strength and ratings • Adverse changes in economic and capital market conditions • Large-scale pandemic events • Cybersecurity and privacy events • Changing climate conditions • Evolving environmental, social and governance expectations and standards • Regulatory and political changes • Loss of key business relationships • Ability to attract, develop and retain talent The Allstate Corporation Board of Directors (“Allstate Board”) has overall responsibility for oversight of Management’s design and implementation of our Enterprise Risk and Return Management (“ERRM”) framework that manages the business on an integrated basis following our risk and return principles.
Insurance and financial services Business, strategy and operations Macro, regulatory and risk environment Risks related to the insurance and financial services industries Risks related to Allstate’s business and operating model Risks that impact most companies • Loss cost estimates are complex and losses are unknown at the time policies are sold • Claim frequency and severity volatility • Catastrophes and severe weather • Investment results are subject to market volatility and valuation judgments • Highly competitive industry • Changing consumer preferences • New or changing technologies • Ineffective Transformative Growth strategy implementation • Ability to maintain catastrophe reinsurance programs and limits • Fluctuations in financial strength and ratings • Loss of key business relationships • Ability to attract, develop and retain talent • Adverse changes in economic and capital market conditions • Large-scale pandemic events • Cybersecurity and privacy events • Changing climate conditions • Evolving environmental, social and governance expectations and standards • Regulatory and political changes The Allstate Corporation Board of Directors (“Allstate Board”) has overall responsibility for oversight of Management’s design and implementation of our Enterprise Risk and Return Management (“ERRM”) framework that manages the business on an integrated basis following our risk and return principles.
The following factors have and may continue to impact claim severity for auto bodily injury, auto physical damage (including collision and property damage) and homeowners coverages: • Bodily injury — increased claims with attorney representation, litigation costs and higher medical inflation • Vehicle physical damage — inflation and supply chain shortages impacting used vehicle and parts prices, labor rates, length of claim resolution and delays in the receipt of third-party carrier claims • Homeowners — inflation in the construction industry, building materials and home furnishings, changes in the mix of loss type, and other economic and environmental factors, including short-term supply imbalances for services and supplies in areas affected by catastrophes Catastrophes and severe weather events may subject us to significant losses Catastrophic events could adversely affect operating results and cause them to vary significantly from one period to the next.
The following factors have and may continue to impact claim severity for auto bodily injury, auto physical damage (including collision and property damage) and homeowners coverages: • Bodily injury — more severe accidents, an increase in claims with attorney representation, higher medical consumption, and inflation • Vehicle physical damage — inflation, supply chain disruptions and labor shortages impacting used vehicle and parts prices, labor rates, length of claim resolution, delays in the receipt of third-party carrier claims, and a higher mix of total losses • Homeowners — inflation in the construction industry, building materials and home furnishings, changes in the mix of loss type, and other economic and environmental factors, including short-term supply imbalances for services and supplies in areas affected by catastrophes Catastrophes and severe weather events may subject us to significant losses Catastrophic events could adversely affect operating results and cause them to vary significantly from one period to the next.
We are subject to extensive regulation, and potential further restrictive regulation may increase operating costs and limit growth We largely operate in the highly regulated insurance and broader financial services sectors and are subject to extensive laws and regulations that are complex and subject to change.
Risk Factors and Other Disclosures We are subject to extensive regulation, and potential further restrictive regulation may increase operating costs and limit growth We largely operate in the highly regulated insurance and broader financial services sectors and are subject to extensive laws and regulations that are complex and subject to change.
Adverse changes have and may continue to occur due to changes in monetary and fiscal policy, inflation and the economic climate, liquidity of a market or market segment, investor return expectations or risk tolerance, insolvency or financial distress of key market makers or participants, or changes in market perceptions of credit worthiness.
Adverse changes have and may continue to occur due to changes in monetary and fiscal policy, inflation, geopolitical events and the economic climate, liquidity of a market or market segment, investor return expectations or risk tolerance, insolvency or financial distress of key market makers or participants, instability of the banking sector, or changes in market perceptions of credit worthiness.
Risk Factors and Other Disclosures 2022 Form 10-K Our personal property insurance business may incur catastrophe losses greater than: • Those experienced in prior years • The average expected level used in pricing • Current reinsurance coverage limits • Loss estimates from hurricane and earthquake models at various levels of probability Property and casualty businesses are subject to claims arising from severe weather events such as winter storms, rain, hail and high winds.
Our personal property insurance business may incur catastrophe losses greater than: • Those experienced in prior years • The average expected level used in pricing • Current reinsurance coverage limits • Loss estimates from hurricane and earthquake models at various levels of probability Property and casualty businesses are subject to claims arising from severe weather events such as winter storms, rain, hail and high winds.
Risk Factors and Other Disclosures underwriting practices in markets with significant severe weather and catastrophe risk exposure could adversely impact premium growth rates and retention. The ability of our subsidiaries to pay dividends may affect our liquidity and ability to meet our obligations The Allstate Corporation is a holding company with no significant operations.
Adjustments to our business structure, size and underwriting practices in markets with significant severe weather and catastrophe risk exposure could adversely impact premium growth rates and retention. The ability of our subsidiaries to pay dividends may affect our liquidity and ability to meet our obligations The Allstate Corporation is a holding company with no significant operations.
Item 1A. Risk Factors Summary Risks are categorized by (1) insurance and financial services, (2) business, strategy and operations and (3) macro, regulatory and risk environment. Many risks may affect more than one category and are included where the impact is most significant.
Item 1A. Risk Factors Summary Risks are grouped into three categories: (1) insurance and financial services, (2) business, strategy and operations and (3) macro, regulatory and risk environment. Many risks may affect more than one category and are included where the impact is most significant.
Changes in or the application of accounting standards issued by standard-setting bodies and changes in tax laws may adversely affect our results of operations and financial condition Our financial statements are subject to the application of accounting principles generally accepted in the United States of America, which are periodically revised, interpreted or expanded.
Changes in or the application of accounting standards issued by standard-setting bodies and changes in tax laws may adversely affect our results of operations and financial condition Our financial statements are subject to GAAP, which are periodically revised, interpreted or expanded.
Our integrated operational risk and return management processes and practices may not be sufficient to timely detect and mitigate operational risks that could have an adverse effect on our reputation and business. See the Regulation section, Privacy Regulation and Data Security, for additional information.
Our integrated operational risk and return management processes and practices may not be sufficient to timely detect and mitigate operational risks, including those posed by third-party service providers, that could have an adverse effect on our reputation and business. See the Regulation section, Privacy Regulation and Data Security, for additional information.
Innovations must be implemented in compliance with applicable insurance regulations and may require extensive modifications to our systems and processes and extensive coordination with and reliance on the systems and operations of third parties.
Innovations must be implemented in compliance with applicable insurance regulations and in a responsible and compliant manner. These changes may require extensive modifications to our systems and processes and extensive coordination with and reliance on the systems and operations of third parties.
Catastrophic losses are caused by wind and hail, wildfires, tornadoes, hurricanes, tropical storms, earthquakes, severe freeze events, volcanic eruptions, terrorism, cyber-attacks, civil unrest, industrial accidents and other such events. 22 www.allstate.com Part I - Item 1A.
Catastrophic losses are caused by wind and hail, wildfires, tornadoes, hurricanes, tropical storms, earthquakes, severe freeze events, volcanic eruptions, terrorism, cyber-attacks, civil unrest, industrial accidents and other such events.
For a discussion of capital requirements, including a change to a group capital calculation, see Regulation section, Limitations on Dividends by Insurance Subsidiaries.
For a discussion of capital requirements, see Regulation section, Limitations on Dividends by Insurance Subsidiaries.
Also, our liquidity could be constrained by a catastrophe, or multiple catastrophes, which could result in extraordinary losses, sales of investments or a downgrade of our debt or financial strength ratings.
Climate change could contribute to increased variability of catastrophe losses and underwriting results. Also, our liquidity could be constrained by a catastrophe, or multiple catastrophes, which could result in extraordinary losses, sales of investments or a downgrade of our debt or financial strength ratings.
There could also be more frequent wildfires in certain geographies, more flooding and the potential for increased severity of hurricanes due to higher sea surface temperatures. As a result, incurred losses from such events and the demand, price and availability of reinsurance coverages for automobile and homeowners insurance may be affected. 28 www.allstate.com Part I - Item 1A.
There could also be more frequent wildfires in certain geographies, more flooding and the potential for increased severity of hurricanes. As a result, incurred losses from such events and the demand, price and availability of reinsurance coverages for automobile and homeowners insurance may be affected.
Our catastrophe management strategy may adversely affect premium growth Catastrophe risk management actions have led us to reduce the size of our homeowners business, including customers with auto and other personal lines products and may negatively impact future sales. Adjustments to our business structure, size and The Allstate Corporation 25 2022 Form 10-K Part I - Item 1A.
Our catastrophe management strategy may adversely affect premium growth Catastrophe risk management actions have led us to reduce the size of our homeowners business, including customers with auto and other personal lines products and may negatively impact future sales.
Our ability to adequately and effectively price our products and services is affected by the evolving nature of consumer needs and preferences, market and regulatory dynamics, broader use of telematics-based rate segmentation and potential reduction in consumer demand. Many voluntary benefits contracts are renewed annually.
Our ability to adequately and effectively price our products is affected by the evolving nature of consumer needs and preferences, market and regulatory dynamics, broader use of telematics-based rate segmentation and potential change in consumer demand. Many voluntary benefits contracts are renewed annually and consumer protection plan contracts are generally multi-year, but renewals occur on a rolling basis.
As a result, if we do not manage these integrations effectively, the quality of our products as well as our relationships with customers and partners may result in the company not achieving returns on its investment at the level projected at acquisition. 26 www.allstate.com Part I - Item 1A.
As a result, if we do not manage these integrations effectively, the quality of our products as well as our relationships with customers and partners may result in the company not achieving returns on its investment at the level projected at acquisition. We also may divest businesses from time to time.
Risk Factors and Other Disclosures 2022 Form 10-K We also may divest businesses from time to time. These transactions may result in continued financial involvement in the divested businesses, such as through reinsurance, guarantees or other financial arrangements, following the transaction. If the acquiring companies do not perform under the arrangements, our financial results could be negatively impacted.
These transactions may result in continued financial involvement in the divested businesses, such as through reinsurance, guarantees or other financial arrangements, following the transaction. If the acquiring companies do not perform under the arrangements, our financial results could be negatively impacted.
If a significant number of employees were unavailable in the event of a disaster, our ability to effectively conduct business could be severely compromised. Our systems are also subject to compromise from internal threats.
If a significant number of employees were unavailable or unable to access our systems in the event of a disaster, our ability to effectively conduct business could be severely compromised.
Growth and retention may be materially affected if we are unable to attract and retain effective producers or if those producers are unable to attract and retain their licensed sales professionals or customers. Similarly, growth and retention may be impacted if customer preferences change and we are unable to effectively adapt our business model and processes.
Growth and retention may be materially affected if we are unable to attract and retain effective producers or if those producers are unable to attract and retain their licensed sales professionals or customers.
Systems are subject to increased cyberattacks and unauthorized access, such as physical and electronic break-ins or unauthorized tampering. We constantly defend against threats to our data and systems, including malware and computer virus attacks, unauthorized access, system failures and disruptions.
Systems are subject to increased cyberattacks and unauthorized access, such as physical and electronic break-ins or unauthorized tampering. 28 www.allstate.com 2023 Form 10-K Part I - Item 1A. Risk Factors and Other Disclosures We constantly defend against threats to our data and systems, including malware and computer virus attacks, unauthorized access, system failures and disruptions.
The increased prevalence of remote-working arrangements that do not require employees to relocate to take a new job could contribute to higher turnover.
The increased prevalence of remote-working arrangements that do not require employees to relocate to take a new job could contribute to higher turnover. The Allstate Corporation 27 2023 Form 10-K Part I - Item 1A.
Some regulators have proposed or adopted, or may propose or adopt, ESG rules or standards applicable to our business. Our Shared Purpose integrates strong ESG principles and practices into our culture, strategy and business practices. Our business practices and disclosures are evaluated against ESG standards which are continually evolving and not always well defined or readily measurable today.
Some regulators have proposed or adopted, or may propose or adopt, pro- or anti-ESG rules or standards applicable to our business. Our business practices and disclosures are evaluated against ESG standards which are continually evolving and not always well defined or readily measurable today. ESG-related expectations may also reflect contrasting or conflicting values or agendas.
The occurrence of a disaster, such as a natural catastrophe, pandemic, industrial accident, blackout, terrorist attack, war, cyberattack, computer virus, insider threat, unanticipated problems with our disaster recovery processes, or a support failure from external providers, could have an adverse effect on our ability to conduct business and on our results of operations and financial condition, particularly if those events affect our computer-based data processing, transmission, storage, and retrieval systems or destroy data.
The occurrence of a disaster or event that results in the shut-down, disruption, degradation or unavailability of one or more of our systems or facilities, unanticipated problems with our disaster recovery processes, or a support failure from external providers, could have an adverse effect on our ability to conduct business and on our results of operations and financial condition, particularly if those events affect our computer-based data processing, transmission, storage, and retrieval systems or destroy data.
Insurance and financial services Unexpected increases in the frequency or severity of property and casualty claims may adversely affect our results of operations and financial condition A significant increase in claim frequency could adversely affect our results of operations and financial condition.
Unexpected increases in the frequency or severity of property and casualty claims may adversely affect our results of operations and financial condition A significant increase in claim frequency could adversely affect our results of operations and financial condition. Changes in mix of business, miles driven, weather, driving behaviors or other factors can lead to changes in claim frequency.
Business, strategy and operations We operate in markets that are highly competitive and may be impacted by new or changing technologies Markets in which we operate are highly competitive, and we must continually allocate resources to refine and improve products and services to remain competitive.
Business, strategy and operations We operate in markets that are highly competitive Markets in which we operate are highly competitive, and we must continually allocate resources to refine and improve products and services to maintain our reputation, enhance brand perception, and remain competitive.
Such changes could disrupt the demand for products from current customers, create coverage issues, impact the frequency or severity of losses, or reduce the size of the automobile insurance market causing our auto insurance business to decline.
Our business may also be adversely impacted by new or changing technologies Technological changes, such as autonomous or partially autonomous vehicles or technologies that facilitate ride, car or home sharing could disrupt the demand for products from current customers, create coverage issues, impact the frequency or severity of losses, or reduce the size of the automobile insurance market causing our auto insurance business to decline.
Inflation has and continues to remain elevated, which has led to higher interest rates and a widening of credit spreads reflecting ongoing recession concerns. The U.S. Federal Reserve and other central banks have begun to respond to inflationary pressure, generally through more restrictive monetary policy, including increasing target interest rates.
Inflation has been and continues to remain elevated, which has led to volatility of interest rates. The U.S. Federal Reserve and other central banks have responded to inflationary pressure, generally through more restrictive monetary policy, including increasing target interest rates. These actions could create significant economic uncertainty.
Risk Factors and Other Disclosures Regulatory reforms, and the more stringent application of existing regulations, may make it more expensive for us to conduct our business The federal government has enacted comprehensive regulatory reforms for financial services entities.
Regulatory reforms, and the more stringent application of existing regulations, may make it more expensive for us to conduct our business The federal government has enacted and continues to propose comprehensive regulatory reforms for financial services entities. As part of a larger effort to strengthen the regulation of the financial services market, certain reforms are applicable to the insurance industry.
Changes in mix of business, miles driven, weather, driving behaviors or other factors can lead to changes in claim frequency. We may experience volatility in claim frequency, and short-term trends may not be predictive of future losses over the longer term. Increases in claim severity can arise from numerous causes that are inherently difficult to predict.
We may experience volatility in claim frequency, and short-term trends may not be predictive of future losses over the longer term. Increases in claim severity can arise from numerous causes that are inherently difficult to 22 www.allstate.com 2023 Form 10-K Part I - Item 1A. Risk Factors and Other Disclosures predict.
We have business process and information technology operations in Canada, India, the United Kingdom and Mexico that are subject to operating, regulatory and political risks in those countries. We may incur substantial costs and other negative consequences if any of these occur, including an adverse effect on our business, results of operations and financial condition.
We may incur substantial costs and other negative consequences if any of these risks occur, including an adverse effect on our business, results of operations and financial condition.
These funds periodically assess losses against all insurance companies doing business in the state. Our results of operations and financial condition could be adversely affected by any of these factors. The Allstate Corporation 29 2022 Form 10-K Part I - Item 1A.
Certain states require an insurer to participate in guaranty funds for impaired or insolvent insurance companies. These funds periodically assess losses against all insurance companies doing business in the state. Our results of operations and financial condition could be adversely affected by any of these factors.
Rating agencies could downgrade or change the outlook on our ratings due to: • Changes in the financial profile of one of our insurance companies • Changes in a rating agency’s determination of the amount of capital required to maintain a particular rating • Increases in the perceived risk of our investment portfolio, a reduced confidence in management or our business strategy, or other considerations that may or may not be under our control 24 www.allstate.com Part I - Item 1A.
Risk Factors and Other Disclosures • Changes in the financial profile of one of our insurance companies • Changes in a rating agency’s determination of the amount of capital required to maintain a particular rating • Increases in the perceived risk of our investment portfolio, a reduced confidence in management or our business strategy, or other considerations that may or may not be under our control A downgrade in our ratings could have an adverse effect on our sales, competitiveness, customer retention, the marketability of our product offerings, liquidity, access to and cost of borrowing or refinancing our existing debt obligations, results of operations and financial condition.
Risk Factors and Other Disclosures 2022 Form 10-K Climate change may also impact insurability by impairing our ability to identify and quantify potential hazards that will result in losses and offer our customers products at an affordable price.
Climate change may also impact insurability by impairing our ability to identify and quantify potential hazards that will result in losses and offer our customers products at an affordable price. Our investment portfolio is also subject to the effects of climate change as economic shifts alter the return dynamic of long-term investments and increase valuation risk.
Risk Factors and Other Disclosures 2022 Form 10-K The unexpected loss of key personnel could have a material adverse impact on our business because of the loss of their skills, knowledge of our products and offerings and years of industry experience and, in some cases, the difficulty of promptly finding qualified replacement personnel.
Risk Factors and Other Disclosures Factors that affect our ability to attract and retain such employees include: • Compensation and benefits • Training and re-skilling programs • Reputation as a successful business with a culture of fair hiring, and of training and promoting qualified employees • Recognition of and response to changing trends and other circumstances that affect employees The unexpected loss of key personnel could have a material adverse impact on our business because of the loss of their skills, knowledge of our products and offerings and years of industry experience and, in some cases, the difficulty of promptly finding qualified replacement personnel.
If the strategy is not implemented effectively, customer retention and policy growth objectives could be adversely impacted. Lost business opportunities may result due to slower than anticipated speed to market. External forces including competitor actions or regulatory changes may also have an adverse effect on the value generated from the transformation.
We have also expanded our product and service offerings through acquisitions and may continue to do so. If the strategy is not implemented effectively, customer retention and policy growth objectives could be adversely impacted. Lost business opportunities may result due to slower than anticipated speed to market.
A decline in the growth or profitability of the property and casualty businesses could have a material effect on our results of operations and financial condition. Property and casualty actual claim costs may exceed current reserves established for claims due to changes in the inflationary, regulatory and litigation environment Estimating claim reserves is an inherently uncertain and complex process.
Insurance and financial services Property and casualty actual claim costs may exceed current reserves established for claims due to changes in the inflationary, regulatory and litigation environment Estimating claim reserves is an inherently uncertain and complex process. We continually refine our best estimates of losses after considering known facts and interpretations of the circumstances.
Our policies and processes to evaluate and manage ESG priorities in coordination with other business priorities may not prove completely effective or fully satisfy our stakeholders. Customers and potential customers may choose not to do business with us based on our ESG practices and related policies and actions.
Our practices may not change in the particular ways or at the rate stakeholders expect. We may fail to meet our commitments or targets. Our policies and processes to evaluate and manage ESG priorities in coordination with other business priorities may not prove completely effective or fully satisfy our stakeholders.
We are also involved in various regulatory actions and inquiries, including market conduct exams by state insurance regulatory agencies.
We are also 30 www.allstate.com 2023 Form 10-K Part I - Item 1A. Risk Factors and Other Disclosures involved in various regulatory actions and inquiries, including market conduct exams by state insurance regulatory agencies.
Our investment portfolio is also subject to the effects of climate change as economic shifts alter the return dynamic of long-term investments and increase valuation risk. Due to significant variability associated with future changing climate conditions, we are unable to predict the impact climate change will have on our businesses.
Due to significant variability associated with future changing climate conditions, we are unable to predict the impact climate change will have on our businesses.
Transformative Growth strategy implementation may not be effective The Transformative Growth strategy is to accelerate growth by improving customer value, expanding customer access, increasing customer acquisition sophistication and investment, modernizing the technology ecosystem and driving organizational transformation. The strategy encompasses all aspects of Allstate’s customer experience and business model, spanning product distribution and sales, operations and servicing, and claims processing.
Advancements in technology and changes in consumer preferences may also impact our workforce needs in the future. Transformative Growth strategy implementation may not be effective The Transformative Growth strategy is to accelerate growth by improving customer value, expanding customer access, increasing sophistication and investment in customer acquisition, modernizing the technology ecosystem and driving organizational transformation.
These actions and other ongoing impacts from the pandemic could create significant economic uncertainty. Market volatility resulting from these factors has and may continue to impact our investment valuations and returns and impact our results of operations and financial condition.
Market volatility resulting from these factors has and may continue to impact our investment valuations and returns and impact our results of operations and financial condition. The Allstate Corporation 23 2023 Form 10-K Part I - Item 1A.
Laws and regulations of many states also limit an insurer’s ability to withdraw from one or more lines of insurance, except pursuant to a plan that is approved by the state insurance department. Certain states require an insurer to participate in guaranty funds for impaired or insolvent insurance companies.
Alternatively, as the facilities recognize a financial deficit, they could have the ability to assess participating insurers, adversely affecting our results of operations and financial condition. Laws and regulations of many states also limit an insurer’s ability to withdraw from one or more lines of insurance, except pursuant to a plan that is approved by the state insurance department.
In addition, certain states have enacted laws that require an insurer conducting business in that state to participate in assigned risk plans, reinsurance facilities and joint underwriting associations. Certain states also require the insurer to offer coverage to all consumers, often restricting an insurer’s ability to charge the price it might otherwise charge for the risk acceptance.
Certain states may enact regulatory reforms regarding insurance rating that may make it more difficult to obtain rates that appropriately reflect the risk. In addition, certain states have enacted laws that require an insurer conducting business in that state to participate in assigned risk plans, reinsurance facilities and joint underwriting associations.
As part of a larger effort to strengthen the regulation of the financial services market, certain reforms are applicable to the insurance industry. The Federal Insurance Office and Financial Stability Oversight Council have been established, and the federal government may enact reforms that affect the state insurance regulatory framework.
A growing number of state laws, enforced by a variety of regulators, on issues such as privacy and cybersecurity may also increase expenses and require additional compliance activities. The Federal Insurance Office and Financial Stability Oversight Council have been established, and the federal government may enact reforms that affect the state insurance regulatory framework.
In these markets, we may be compelled to underwrite significant amounts of business at lower-than-desired rates, possibly leading to an unacceptable return on equity. Alternatively, as the facilities recognize a financial deficit, they could have the ability to assess participating insurers, adversely affecting our results of operations and financial condition.
Certain states also require the insurer to offer coverage to all consumers, often restricting an insurer’s ability to charge the price it might otherwise charge for the risk acceptance. In these markets, we may be compelled to underwrite significant amounts of business at lower-than-desired rates, possibly leading to an unacceptable return on equity.
We may not be able to respond effectively to these changes, which could have a material effect on our results of operations and financial condition.
A decline in the growth or profitability of the property and casualty businesses could have a material effect on our results of operations and financial condition.
We may face adverse regulatory, investor, media, or public scrutiny leading to business, reputational, or legal challenges.
Customers and potential customers may choose not to do business with us based on our ESG practices and related policies and actions. We may face adverse regulatory, investor, media, or public scrutiny leading to business, reputational, or legal challenges. The Allstate Corporation 29 2023 Form 10-K Part I - Item 1A.
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We continually refine our best estimates of losses after considering known facts and interpretations of the circumstances.
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Rating agencies have and could downgrade or change the outlook on our ratings in the future due to: 24 www.allstate.com 2023 Form 10-K Part I - Item 1A.
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Our investments are subject to risks associated with economic and capital market conditions and factors that may be unique to our portfolio, including: • General weakening of the economy, which is typically reflected through higher credit spreads and lower equity and real estate valuations • Declines in credit quality • Declines in interest rates, credit spreads or sustained low interest rates could lead to declines in portfolio yields and investment income The Allstate Corporation 23 2022 Form 10-K Part I - Item 1A.
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Changing consumer preferences may adversely impact the demand for our products which may adversely impact our business Growth and retention may be impacted if customer preferences change and we are unable to effectively adapt our business model and processes, including maintaining competitive products and allowing consumers to interact with us how they choose.
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Risk Factors and Other Disclosures 2022 Form 10-K A downgrade in our ratings could have an adverse effect on our sales, competitiveness, customer retention, the marketability of our product offerings, liquidity, access to and cost of borrowing, results of operations and financial condition.
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Our business could be impacted by our ability to attract and retain customers through distribution channels that they prefer.
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Our business could also be affected by technological changes, such as autonomous or partially autonomous vehicles or technologies that facilitate ride, car or home sharing.
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We may not be able to respond effectively or in a timely manner to these changes, including developing and deploying customer-facing technology to address these changing preferences and maintaining competitive technology, The Allstate Corporation 25 2023 Form 10-K Part I - Item 1A.
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We are prohibited from declaring or paying dividends on our Series G preferred stock if we fail to meet specified capital adequacy, net income or shareholders’ equity levels.
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Risk Factors and Other Disclosures which could have an adverse effect on our results of operations and financial condition. Executing our strategy to advance and innovate technology has and may continue to impact our workforce as we require new and different skills, particularly those in areas such as digital, data and analytics and technology to achieve our strategic goals.
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The prohibition is subject to an exception permitting us to declare dividends out of the net proceeds of common stock issued by us during the 90 days before the date of declaration even if we fail to meet such levels.
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Implementation is focused on the property-liability businesses and impacts all aspects of Allstate’s customer experience and business model, spanning product distribution and sales, operations and servicing, and claims processing. As part of the strategy, we have developed and continue to develop new insurance and non-insurance products and services to provide affordable, simple, and connected protection through multiple distribution channels.
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Disruption, volatility or uncertainty in the insurance-linked securities market may decrease our ability to access such market on favorable terms or at all.
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New products and services may not be as profitable as our existing products, may not perform as well as we expect and may change our risk exposures. External forces including competitor actions or regulatory changes may also have an adverse effect on the value generated from the transformation.
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The Coronavirus resulted in governments worldwide enacting emergency measures to combat the spread of the virus, including travel restrictions, government-imposed shelter-in-place orders, quarantine periods, social distancing, and restrictions on large gatherings. These measures have moderated, but new variants of the Coronavirus could result in further economic volatility. We continue to closely monitor and proactively adapt to developments and changing conditions.
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Unfavorable conditions in the insurance-linked securities (“ILS”) market may increase the cost to use ILS or issue new securities in amounts we consider sufficient at acceptable prices. 26 www.allstate.com 2023 Form 10-K Part I - Item 1A.
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Currently, it is not possible to reliably estimate the impact to our operations, but the effects have been and could be material. The Coronavirus has affected our operations and may continue to significantly affect our results of operations, financial condition and liquidity.
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While most of the risks related to the Coronavirus have moderated, some longer-term impacts remain, such as supply chain disruptions, labor shortages, and other macroeconomic factors that have increased inflation and asset values.
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The impact from the pandemic should be considered when comparing the current period to prior periods, including: • Sales of new and retention of existing policies • Rate changes and average gross premiums • Supply chain disruptions and labor shortages increase the cost of settling claims The Allstate Corporation 27 2022 Form 10-K Part I - Item 1A.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeIn North America, we operate from approximately 862 retail stores, administrative, data processing, claims handling and other support facilities that total 1.1 million square feet owned and 5.0 million square feet leased. Outside North America, we own one and lease two properties in Northern Ireland comprising approximately 198 thousand square feet.
Biggest changeItem 2. Properties In Illinois, the Company has 11 locations totaling approximately 480 thousand square feet of office space. In North America, we operate from approximately 780 retail stores, administrative, data processing, claims handling and other support facilities that total 710 thousand square feet owned and 4.3 million square feet leased.
We also have two leased facilities in India for approximately 441 thousand square feet, two leased facilities in London for seven thousand square feet and approximately two thousand square feet in other international locations. The locations where Allstate exclusive agencies operate in the U.S. are normally leased by the agencies.
The locations where Allstate exclusive agencies operate in the U.S. are typically leased by the agencies.
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Item 2. Properties On October 18, 2022, Allstate closed the sale of its headquarters in Northbrook, Illinois. The sale will reduce real estate expenses and further advance Allstate’s multi-year Transformative Growth strategy. In Illinois, the Company has 49 locations totaling 609 thousand square feet of office space.
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Outside North America, we own one and lease two properties in Northern Ireland comprising approximately 200 thousand square feet. We also have two leased facilities in India for approximately 500 thousand square feet and two leased facilities in London for approximately seven thousand square feet.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings Information required for Item 3 is incorporated by reference to the discussion under the heading “Regulation and compliance” and under the heading “Legal and regulatory proceedings and inquiries” in Note 15 of the consolidated financial statements. Item 4. Mine Safety Disclosures Not applicable. The Allstate Corporation 31 2022 Form 10-K Part II
Biggest changeItem 3. Legal Proceedings Information required for Item 3 is incorporated by reference to the discussion under the heading “Regulation and compliance” and under the heading “Legal and regulatory proceedings and inquiries” in Note 15 of the consolidated financial statements. Item 4. Mine Safety Disclosures Not applicable. 32 www.allstate.com 2023 Form 10-K Part II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest change(3) In August 2021, we announced the approval of a common share repurchase program for $5 billion which is expected to be completed by September 30, 2023. The Inflation Reduction Act, enacted in August 2022, imposes a 1% excise tax on stock repurchases occurring after December 31, 2022.
Biggest changeThe authorization for the share repurchase program expires on March 31, 2024. The Inflation Reduction Act, enacted in August 2022, imposes a 1% excise tax on stock repurchases occurring after December 31, 2022. The excise tax on common stock repurchases is classified as an additional cost of the stock acquired included in treasury stock in shareholders’ equity .
Common stock performance graph The following performance graph compares the cumulative total shareholder return on Allstate common stock for a five-year period (December 31, 2017 to December 31, 2022) with the cumulative total return of the S&P Property and Casualty Insurance Index (S&P P/C) and the S&P 500 stock index.
Common stock performance graph The following performance graph compares the cumulative total shareholder return on Allstate common stock for a five-year period (December 31, 2018 to December 31, 2023) with the cumulative total return of the S&P Property and Casualty Insurance Index (S&P P/C) and the S&P 500 stock index.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities As of January 31, 2023, there were 59,597 holders of record of The Allstate Corporation’s common stock. The principal market for the common stock is the New York Stock Exchange, where our common stock trades under the trading symbol “ALL”.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities As of January 31, 2024, there were 56,831 holders of record of The Allstate Corporation’s common stock. The principal market for the common stock is the New York Stock Exchange, where our common stock trades under the trading symbol “ALL”.
Value at each year-end of $100 initial investment made on December 31, 2017 12/31/2017 12/31/2018 12/31/2019 12/31/2020 12/31/2021 12/31/2022 Allstate $ 100.00 $ 80.48 $ 111.72 $ 111.59 $ 122.61 $ 145.10 S&P P/C $ 100.00 $ 95.31 $ 119.96 $ 127.56 $ 149.89 $ 178.18 S&P 500 $ 100.00 $ 95.61 $ 125.70 $ 148.81 $ 191.48 $ 156.77 32 www.allstate.com 2022 Form 10-K Issuer Purchases of Equity Securities 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) October 1, 2022 - October 31, 2022 Open Market Purchases 1,645,463 $ 128.65 1,644,936 November 1, 2022 - November 30, 2022 Open Market Purchases 693,860 $ 128.40 692,907 December 1, 2022 - December 31, 2022 Open Market Purchases 400,465 $ 132.26 399,500 Total 2,739,788 $ 129.11 2,737,343 $ 802 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.
Value at each year-end of $100 initial investment made on December 31, 2018 12/31/2018 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 Allstate $ 100.00 $ 138.82 $ 138.65 $ 152.35 $ 180.29 $ 191.72 S&P P/C $ 100.00 $ 125.87 $ 133.84 $ 157.27 $ 186.95 $ 207.04 S&P 500 $ 100.00 $ 131.47 $ 155.65 $ 200.29 $ 163.98 $ 207.04 The Allstate Corporation 33 2023 Form 10-K Issuer Purchases of Equity Securities 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 Maximum number (or approximate dollar value) of shares (or units) that may yet be purchased under the plans or programs (2) October 1, 2023 - October 31, 2023 Open Market Purchases 329 $ 112.37 — November 1, 2023 - November 30, 2023 Open Market Purchases 125,437 $ 134.12 — December 1, 2023 - December 31, 2023 Open Market Purchases 2,798 $ 138.37 — Total 128,564 $ 134.15 — $ 472 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.
The shares were acquired in satisfaction of withholding taxes due upon exercise or vesting and in payment of the exercise price of the options. October: 329 November: 125,437 December: 2,798 (2) In August 2021, we announced the approval of a common share repurchase program for $5 billion. In July 2023, we suspended repurchasing shares under the current authorization.
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October: 527 November: 953 December: 965 (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.
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Item 6. [Reserved] None. 34 www.allstate.com 2023 Form 10-K
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The excise tax on common stock repurchases will be classified as an additional cost of the stock acquired included in treasury stock in shareholders’ equity . Item 6. [Reserved] None. The Allstate Corporation 33 2022 Form 10-K

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeDirect real estate investments by sector (% of carrying value) December 31, 2022 Residential 28.0 % Agriculture 22.3 Industrial 17.5 Retail 16.4 Other 15.8 Total 100.0 % The Allstate Corporation 69 2022 Form 10-K Investments Unrealized net capital gains (losses) As of December 31, ($ in millions) 2022 2021 U.S. government and agencies $ (225) $ (14) Municipal (290) 263 Corporate (2,299) 496 Foreign government (40) 3 ABS (31) 12 Fixed income securities (2,885) 760 Short-term investments (1) — Derivatives (3) (3) Equity method of accounting (“EMA”) limited partnerships 2 (1) Unrealized net capital gains and losses, pre-tax $ (2,887) $ 756 Gross unrealized gains (losses) on fixed income securities by type and sector As of December 31, 2022 Amortized cost, net Gross unrealized Fair value ($ in millions) Gains Losses Corporate Consumer goods (cyclical and non-cyclical) $ 5,984 $ 6 $ (531) $ 5,459 Banking 5,153 16 (314) 4,855 Utilities 2,633 7 (203) 2,437 Technology 3,137 4 (298) 2,843 Communications 2,422 1 (261) 2,162 Financial services 2,243 4 (176) 2,071 Capital goods 2,288 3 (197) 2,094 Basic industry 1,019 2 (75) 946 Energy Midstream 1,725 1 (110) 1,616 Integrated 67 — (4) 63 Independent/upstream 354 1 (29) 326 Other 218 — (13) 205 Total energy 2,364 2 (156) 2,210 Transportation 959 1 (73) 887 Other 360 — (61) 299 Total corporate fixed income portfolio 28,562 46 (2,345) 26,263 U.S. government and agencies 8,123 6 (231) 7,898 Municipal 6,500 36 (326) 6,210 Foreign government 997 — (40) 957 ABS 1,188 4 (35) 1,157 Total fixed income securities $ 45,370 $ 92 $ (2,977) $ 42,485 70 www.allstate.com Investments 2022 Form 10-K Gross unrealized gains (losses) on fixed income securities by type and sector As of December 31, 2021 Amortized cost Gross unrealized Fair value ($ in millions) Gains Losses Corporate Consumer goods (cyclical and non-cyclical) $ 6,817 $ 176 $ (42) $ 6,951 Banking 3,975 54 (31) 3,998 Utilities 2,009 43 (28) 2,024 Technology 2,947 80 (23) 3,004 Communications 2,077 58 (21) 2,114 Financial services 1,936 41 (14) 1,963 Capital goods 2,615 75 (12) 2,678 Basic industry 1,249 56 (6) 1,299 Energy Midstream 1,132 37 (4) 1,165 Integrated 119 6 — 125 Independent/upstream 312 18 (1) 329 Other 224 6 (1) 229 Total energy 1,787 67 (6) 1,848 Transportation 976 35 (5) 1,006 Other 446 3 (4) 445 Total corporate fixed income portfolio 26,834 688 (192) 27,330 U.S. government and agencies 6,287 12 (26) 6,273 Municipal 6,130 279 (16) 6,393 Foreign government 982 9 (6) 985 ABS 1,143 14 (2) 1,155 Total fixed income securities $ 41,376 $ 1,002 $ (242) $ 42,136 In general, the gross unrealized losses are related to an increase in market yields, which may include increased risk-free interest rates and wider credit spreads since the time of initial purchase.
Biggest changeDirect real estate investments by sector (% of carrying value) December 31, 2023 Agriculture 28.6 % Industrial 23.7 Residential 20.6 Retail 18.5 Other 8.6 Total 100.0 % The Allstate Corporation 69 2023 Form 10-K Investments Unrealized net capital gains (losses) As of December 31, ($ in millions) 2023 2022 U.S. government and agencies $ (5) $ (225) Municipal (43) (290) Corporate (746) (2,299) Foreign government 4 (40) ABS 6 (31) Fixed income securities (784) (2,885) Short-term investments (1) (1) Derivatives (2) (3) Equity method of accounting (“EMA”) limited partnerships (4) 2 Unrealized net capital gains and losses, pre-tax $ (791) $ (2,887) Gross unrealized gains (losses) on fixed income securities by type and sector As of December 31, 2023 Amortized cost, net Gross unrealized Fair value ($ in millions) Gains Losses Corporate Banking (1) $ 4,189 $ 31 $ (135) $ 4,085 Basic industry 1,007 7 (42) 972 Capital goods 2,800 33 (97) 2,736 Communications 2,767 33 (115) 2,685 Consumer goods (cyclical and non-cyclical) 6,813 93 (251) 6,655 Financial services 2,111 17 (88) 2,040 Energy 2,645 35 (63) 2,617 Technology 2,800 21 (153) 2,668 Transportation 1,104 13 (45) 1,072 Utilities 5,330 109 (123) 5,316 Other 385 5 (31) 359 Total corporate fixed income portfolio 31,951 397 (1,143) 31,205 U.S. government and agencies 8,624 114 (119) 8,619 Municipal 6,049 109 (152) 6,006 Foreign government 1,286 17 (13) 1,290 ABS 1,739 13 (7) 1,745 Total fixed income securities $ 49,649 $ 650 $ (1,434) $ 48,865 (1) As of December 31, 2023, we have exposure of approximately $90 million to regional banks primarily through investment grade corporate bonds. 70 www.allstate.com 2023 Form 10-K Investments Gross unrealized gains (losses) on fixed income securities by type and sector As of December 31, 2022 Amortized cost, net Gross unrealized Fair value ($ in millions) Gains Losses Corporate Banking $ 5,153 $ 16 $ (314) $ 4,855 Basic industry 1,019 2 (75) 946 Capital goods 2,288 3 (197) 2,094 Communications 2,422 1 (261) 2,162 Consumer goods (cyclical and non-cyclical) 5,984 6 (531) 5,459 Financial services 2,243 4 (176) 2,071 Energy 2,364 2 (156) 2,210 Technology 3,137 4 (298) 2,843 Transportation 959 1 (73) 887 Utilities 2,633 7 (203) 2,437 Other 360 — (61) 299 Total corporate fixed income portfolio 28,562 46 (2,345) 26,263 U.S. government and agencies 8,123 6 (231) 7,898 Municipal 6,500 36 (326) 6,210 Foreign government 997 — (40) 957 ABS 1,188 4 (35) 1,157 Total fixed income securities $ 45,370 $ 92 $ (2,977) $ 42,485 In general, the gross unrealized losses are related to an increase in market yields, which may include increased risk-free interest rates and wider credit spreads since the time of initial purchase.
The valuation models take into account, among other things, market observable information as of the measurement date, as described above, as well as the specific attributes of the security being valued including its term, interest rate, credit rating, industry sector, and where applicable, collateral quality and other issue or issuer specific information.
The valuation models take into account, among other things, market observable information (as described above) as of the measurement date, as well as the specific attributes of the security being valued including its term, interest rate, credit rating, industry sector, and where applicable, collateral quality and other issue or issuer specific information.
Incurred but not reported (“IBNR”) • Comprises about 10% of total reserves. • IBNR can be a small percentage of reserves for relatively short-term claims, such as auto physical damage claims, or a large percentage of reserves for claims that have uncertain payout requirements over a long period of time, such as auto injury and MCCA claims.
Incurred but not reported (“IBNR”) • IBNR can be a small percentage of reserves for relatively short-term claims, such as auto physical damage claims, or a large percentage of reserves for claims that have uncertain payout requirements over a long period of time, such as auto injury and MCCA claims. • Comprises about 10% of total reserves.
We define a “catastrophe” as an event that produces pre-tax losses before reinsurance in excess of $1 million and involves multiple first party policyholders, or a winter weather event that produces a number of claims in excess of a preset, per-event threshold of average claims in a specific area, occurring within a certain amount of time following the event.
We define a “catastrophe” as an event that produces pre-tax losses before reinsurance in excess of $1 million and involves multiple first party policyholders, or a winter weather event that produces a number of claims in excess of a preset, per-event threshold of average claims in a specific area, occurring within a certain amount of time following the event.
We immediately recognize remeasurement of projected benefit obligation and plan assets in earnings as it provides greater transparency of our economic obligations in accounting results and better aligns the recognition of the effects of economic and interest rate changes on pension and other postretirement plan assets and liabilities in the year in which the gains and losses are incurred.
We immediately recognize the remeasurement of the projected benefit obligation and plan assets in earnings as it provides greater transparency of our economic obligations in accounting results and better aligns the recognition of the effects of economic and interest rate changes on pension and other postretirement plan assets and liabilities in the year in which the gains and losses are incurred.
We believe that our reserves are appropriately established based on available facts, laws, regulations, and assessments of other pertinent factors and characteristics of exposure (e.g., claim activity, potential liability, jurisdiction, products versus non-products exposure) presented by individual policyholders, assuming no change in the legal, legislative or economic environment.
We believe that our reserves are appropriately established based on available facts, technology, laws, regulations, and assessments of other pertinent factors and characteristics of exposure (e.g., claim activity, potential liability, jurisdiction, products versus non-products exposure) presented by individual policyholders, assuming no change in the legal, legislative or economic environment.
We also consider other limitations and coverage exclusions under our agreements. Accordingly, our estimate of recoverables is subject to similar risks and uncertainties as our estimate of reserves claims and claims expense. We believe the recoverables are appropriately established; however, as our underlying reserves continue to develop, the amount ultimately recoverable may vary from amounts currently recorded.
We also consider other limitations and coverage exclusions under our agreements. Accordingly, our estimate of recoverables is subject to similar risks and uncertainties as our estimate of reserves for claims and claims expense. We believe the recoverables are appropriately established; however, as our underlying reserves continue to develop, the amount ultimately recoverable may vary from amounts currently recorded.
Our primary market risk exposures are to changes in interest rates, credit spreads and equity prices, and to a lesser extent, foreign currency exchange rates. We also have direct and indirect exposure to commodity price changes through our diversified investments in timber, agriculture, infrastructure and energy primarily held in limited partnership interests and consolidated subsidiaries.
Our primary market risk exposures are to changes in interest rates, credit spreads and equity prices, and to a lesser extent, foreign currency exchange rates. We also have direct and indirect exposure to commodity price changes through our diversified investments in agriculture, infrastructure and energy primarily held in limited partnership interests and consolidated subsidiaries.
To develop a statistical indication of potential reserve variability within reasonably likely possible outcomes, an actuarial technique (stochastic modeling) is applied to the countrywide consolidated data elements for paid losses and paid losses combined with case reserves separately for injury losses, auto physical damage losses, and homeowners losses excluding catastrophe losses.
To develop a statistical indication of potential reserve variability within reasonably likely possible outcomes, an actuarial technique (stochastic modeling) is applied to the countrywide consolidated data elements for paid losses and paid losses combined with case reserves separately for injury losses, auto physical damage losses, and homeowners insurance losses excluding catastrophe losses.
The rating is either received from the SVO based on availability of applicable ratings from rating agencies on the NAIC Nationally Recognized Statistical Rating Organizations (“NRSRO”) provider list, including Moody’s Investors Service (“Moody’s”), S&P Global Ratings (“S&P”), Fitch Ratings (“Fitch”), or a comparable internal rating.
The rating is either received from the SVO based on availability of applicable ratings from rating agencies on the NAIC Nationally Recognized Statistical Rating Organizations provider list, including Moody’s Investors Service (“Moody’s”), S&P Global Ratings (“S&P”), Fitch Ratings (“Fitch”), or a comparable internal rating.
How reserve estimates are established and updated Reserve estimates are developed at a very detailed level, and the results are aggregated to form a consolidated reserve estimate. The detailed estimates include each line of insurance, major components of losses (such as coverages and perils), major states or groups of states and for reported losses and IBNR.
How reserve estimates are established and updated Reserve estimates are developed at a detailed level, and the results are aggregated to form a consolidated reserve estimate. The detailed estimates include each line of insurance, major components of losses (such as coverages and perils), major states or groups of states and for reported losses and IBNR.
The most important factors we monitor to evaluate the financial condition and performance for our reportable segments and the Company include: • Allstate Protection : premium, policies in force (“PIF”), new business sales, policy retention, price changes, claim frequency and severity, catastrophes, loss ratio, expenses, underwriting results, combined ratio and relative competitive position • Protection Services : revenues, premium written, PIF and adjusted net income • Allstate Health and Benefits : premiums, new business sales, PIF, benefit ratio, expenses and adjusted net income • Investments : exposure to market risk, asset allocation, credit quality, total return, net investment income, cash flows, net gains and losses on investments and derivatives, unrealized capital gains and losses, long-term returns and asset duration • Financial condition : liquidity, parent holding company deployable assets, financial strength ratings, operating leverage, debt levels, book value per share and return on equity Measuring segment profit or loss The measure of segment profit or loss used in evaluating performance is underwriting income for the Allstate Protection and Run-off Property-Liability segments and adjusted net income for the Protection Services, Allstate Health and Benefits, and Corporate and Other segments.
The most important factors we monitor to evaluate the financial condition and performance for our reportable segments and the Company include: • Allstate Protection : premium, policies in force (“PIF”), new business sales, policy retention, price changes, claim frequency and severity, catastrophes, loss ratio, expenses, underwriting results and combined ratio • Protection Services : revenues, premium written, PIF and adjusted net income • Allstate Health and Benefits : premiums, other revenue, new business sales, PIF, benefit ratio, expenses and adjusted net income • Investments : exposure to market risk, asset allocation, credit quality, total return, net investment income, cash flows, net gains and losses on investments and derivatives, unrealized capital gains and losses, long-term returns and asset duration • Financial condition : liquidity, parent holding company deployable assets, financial strength ratings, operating leverage, debt levels, book value per share and return on equity Measuring segment profit or loss The measure of segment profit or loss used in evaluating performance is underwriting income for the Allstate Protection and Run-off Property-Liability segments and adjusted net income for the Protection Services, Allstate Health and Benefits, and Corporate and Other segments.
Certain exchange traded and mutual funds have fixed income securities as their underlying investments. Mortgage loans of $762 million mainly comprise loans secured by first mortgages on developed commercial real estate. Key considerations used to manage our exposure include property type and geographic diversification. For further detail on our mortgage loan portfolio, see Note 5 of the consolidated financial statements.
Certain exchange traded and mutual funds have fixed income securities as their underlying investments. Mortgage loans of $822 million mainly comprise loans secured by first mortgages on developed commercial real estate. Key considerations used to manage our exposure include property type and geographic diversification. For further detail on our mortgage loan portfolio, see Note 5 of the consolidated financial statements.
Privately placed securities primarily consist of corporate issued senior debt securities that are negotiated with the borrower or are issued by entities in unregistered form under SEC Rule 144A which allows purchasers to more easily resell these securities under certain conditions. Our $7.65 billion portfolio of privately placed securities, primarily 144A bonds, is diversified by issuer, industry sector and country.
Privately placed securities primarily consist of corporate issued senior debt securities that are negotiated with the borrower or are issued by entities in unregistered form under SEC Rule 144A which allows purchasers to more easily resell these securities under certain conditions. Our $7.91 billion portfolio of privately placed securities, primarily 144A bonds, is diversified by issuer, industry sector and country.
Best The Allstate Corporation (debt) A3 A- a The Allstate Corporation (short-term issuer) P-2 A-2 AMB-1+ Allstate Insurance Company (insurance financial strength) Aa3 AA- A+ Our ratings are influenced by many factors including our operating and financial performance, asset quality, liquidity, overall portfolio mix, financial leverage (i.e., debt), exposure to risks such as catastrophes and the current level of operating leverage.
Best The Allstate Corporation (debt) A3 BBB+ a- The Allstate Corporation (short-term issuer) P-2 A-2 AMB-1 Allstate Insurance Company (insurance financial strength) Aa3 A+ A+ Our ratings are influenced by many factors including our operating and financial performance, asset quality, liquidity, overall portfolio mix, financial leverage (i.e., debt), exposure to risks such as catastrophes and the current level of operating leverage.
It should be read in conjunction with the consolidated financial statements and related notes found under Item 8. contained herein. A discussion of strategy, including updates to the multi-year Transformative Growth initiative, can be found in Part 1, Item 1. Business. This section of this Form 10-K generally discusses 2022 and 2021 results and year-to-year comparisons between 2022 and 2021.
It should be read in conjunction with the consolidated financial statements and related notes found under Item 8. contained herein. A discussion of strategy, including updates to the multi-year Transformative Growth initiative, can be found in Part 1, Item 1. Business. This section of this Form 10-K generally discusses 2023 and 2022 results and year-to-year comparisons between 2023 and 2022.
No reinsurance recoverables have been written off in the three-years ended December 31, 2022. 64 www.allstate.com Investments 2022 Form 10-K Investments Overview and strategy The return on our investment portfolios is an important component of our ability to offer good value to customers, fund business improvements and create value for shareholders.
No reinsurance recoverables have been written off in the three-years ended December 31, 2023. 64 www.allstate.com 2023 Form 10-K Investments Investments Overview and strategy The return on our investment portfolios is an important component of our ability to offer good value to customers, fund business improvements and create value for shareholders.
The ultimate cost of losses may vary materially from recorded amounts that are our best estimates. See Note 9 of the consolidated financial statements and Application of Critical Accounting Estimates section of the MD&A for further information. Reserve for future policy benefits We estimate the present value of cash payments to be made to contractholders and policyholders.
The ultimate cost of losses may vary materially from recorded amounts that are our best estimates. See Note 9 of the consolidated financial statements and Application of Critical Accounting Estimates section of the MD&A for further information. Reserve for future policy benefits and contractholder funds We estimate the present value of cash payments to be made to contractholders and policyholders.
The portfolio is made up of 463 issuers. Privately placed corporate obligations may contain structural security features such as financial covenants and call protections that provide investors greater protection against credit deterioration, reinvestment risk or fluctuations in interest rates than those typically found in publicly registered debt securities.
The portfolio is made up of 455 issuers. Privately placed corporate obligations may contain structural security features such as financial covenants and call protections that provide investors greater protection against credit deterioration, reinvestment risk or fluctuations in interest rates than those typically found in publicly registered debt securities.
We calculate the estimated recovery value based on the best estimate of future cash flows considering past events, current conditions and reasonable and 86 www.allstate.com Application of Critical Accounting Estimates 2022 Form 10-K supportable forecasts. The estimated future cash flows are discounted at the security’s current effective rate, and are compared to the amortized cost of the security.
We calculate the estimated recovery value based on the best estimate of future cash flows considering past events, current conditions and reasonable and supportable forecasts. The estimated future cash flows are discounted at the security’s current effective rate, and are compared to the amortized cost of the 86 www.allstate.com 2023 Form 10-K Application of Critical Accounting Estimates security.
These holding company assets and subsidiary dividends provide funds for the parent company’s fixed charges and other corporate purposes. Intercompany dividends were paid in 2022, 2021 and 2020 between the following companies: AIC, Allstate Insurance Holdings, LLC (“AIH”), the Corporation, ALIC, American Heritage Life Insurance Company (“AHL”) and Allstate Financial Insurance Holdings Corporation (“AFIHC”).
These holding company assets and subsidiary dividends provide funds for the parent company’s fixed charges and other corporate purposes. Intercompany dividends were paid in 2023, 2022 and 2021 between the following companies: AIC, Allstate Insurance Holdings, LLC (“AIH”), the Corporation, ALIC, American Heritage Life Insurance Company (“AHL”) and Allstate Financial Insurance Holdings Corporation (“AFIHC”).
The Allstate Corporation 85 2022 Form 10-K Application of Critical Accounting Estimates For most of our financial assets measured at fair value, all significant inputs are based on or corroborated by market observable data, and significant management judgment does not affect the periodic determination of fair value.
For most of our financial assets measured at fair value, all significant inputs are based on or corroborated by market observable data, and The Allstate Corporation 85 2023 Form 10-K Application of Critical Accounting Estimates significant management judgment does not affect the periodic determination of fair value.
Risk Factors’’, including the risk factors titled “ A large-scale pandemic, the occurrence of terrorism, military actions, social unrest or other actions may have an adverse effect on our business ” and “ Conditions in the global economy and capital markets could continue to adversely affect our business and results of operations ”.
Risk Factors’’, including the risk factors titled “ A large-scale pandemic, the occurrence of terrorism, military actions, social unrest or other actions may have an adverse effect on our business ” and “ Conditions in the global economy and capital markets could adversely affect our business and results of operations ”.
These developments are discussed further in the loss ratio disclosures within the Allstate Protection Segment and the Claims and Claims Expense Reserves sections of the MD&A. See Run-off Property-Liability reserve estimates section for specific disclosures of industry and actuarial best practices for this segment.
These developments are discussed further in the loss ratio disclosures within the Allstate Protection Segment and the Property and Casualty Insurance Claims and Claims Expense Reserves sections of the MD&A. See the Run-off Property-Liability reserve estimates section for specific disclosures of industry and actuarial best practices for this segment.
In general, securities with NAIC designations of 1 or 2 are considered investment grade and securities with NAIC designations of 3 through 6 are considered below investment grade.
In general, securities with NAIC designations of 1 and 2 are considered investment grade and securities with NAIC designations of 3 through 6 are considered below investment grade.
There were no borrowings under the credit facility during 2022. • To cover short-term cash needs, the Corporation has access to a commercial paper facility with a borrowing capacity limited to any undrawn credit facility balance up to $750 million. • As of December 31, 2022, there were no balances outstanding for the credit facility or the commercial paper facility and therefore the remaining borrowing capacity was $750 million. • The Corporation has access to a universal shelf registration statement with the Securities and Exchange Commission that expires in 2024.
There were no borrowings under the credit facility during 2023. • To cover short-term cash needs, the Corporation has access to a commercial paper facility with a borrowing capacity limited to any undrawn credit facility balance up to $750 million. • As of December 31, 2023, there were no balances outstanding for the credit facility or the commercial paper facility and therefore the remaining borrowing capacity was $750 million under each facility. • The Corporation has access to a universal shelf registration statement with the Securities and Exchange Commission that expires in 2024.
We retain approximately 38,000 PIF with earthquake coverage, with the largest number of policies located in Kentucky, due to regulatory and other reasons. We purchase reinsurance in Kentucky and enter into arrangements in many states to make earthquake coverage available through our brokerage platform.
We retain approximately 25,000 PIF with earthquake coverage, with the largest number of policies located in Kentucky, due to regulatory and other reasons. We purchase reinsurance in Kentucky and enter into arrangements in many states to make earthquake coverage available through our brokerage platform.
Decreases in rates could increase the fair value of our fixed income securities portfolio while decreasing investment income due to reinvestment at lower market yields and accelerated pay-downs and prepayments of certain investments. 74 www.allstate.com Market Risk 2022 Form 10-K For our issued debt, we monitor market interest rates and evaluate refinancing opportunities as maturity dates approach.
Decreases in rates could increase the fair value of our fixed income securities portfolio while decreasing future investment income due to reinvestment at lower market yields and accelerated pay-downs and prepayments of certain investments. 74 www.allstate.com 2023 Form 10-K Market Risk For our issued debt, we monitor market interest rates and evaluate refinancing opportunities as maturity dates approach.
Considering the ongoing risk of recession, we retained a lower allocation to high-yield bonds, bank loans and public equity relative to year-end 2021. We maintained performance-based investments in the Property-Liability portfolio.
Considering the ongoing risk of recession, we retained a lower allocation to high-yield bonds, bank loans and public equity relative to year-end 2022. We maintained performance-based investments in the Property-Liability portfolio.
The Allstate Corporation 73 2022 Form 10-K Market Risk Market Risk Market risk is the risk that we will incur losses due to adverse changes in interest rates, credit spreads, equity prices, commodity prices or foreign currency exchange rates.
The Allstate Corporation 73 2023 Form 10-K Market Risk Market Risk Market risk is the risk that we will incur losses due to adverse changes in interest rates, credit spreads, equity prices, commodity prices or foreign currency exchange rates.
The Allstate Corporation 77 2022 Form 10-K Capital Resources and Liquidity Financial ratings and strength Senior long-term debt, commercial paper and insurance financial strength ratings As of December 31, 2022 Moody’s S&P Global Ratings A.M.
The Allstate Corporation 77 2023 Form 10-K Capital Resources and Liquidity Financial ratings and strength Senior long-term debt, commercial paper and insurance financial strength ratings As of December 31, 2023 Moody’s S&P Global Ratings A.M.
The Allstate Corporation 75 2022 Form 10-K Market Risk Foreign currency exchange rate risk is the risk that we will incur economic losses due to adverse changes in foreign currency exchange rates. This risk primarily arises from our foreign equity investments, including common stocks, limited partnership interests, and our Canada, Northern Ireland and India operations.
The Allstate Corporation 75 2023 Form 10-K Market Risk Foreign currency exchange rate risk is the risk that we will incur economic losses due to adverse changes in foreign currency exchange rates. This risk primarily arises from our foreign equity investments, including common stocks, limited partnership interests, and our Canada, Northern Ireland, Europe and India operations.
As of December 31, 2022 and 2021, we did not adjust fair values provided by our valuation service providers or brokers or substitute them with an internal model for such securities.
As of December 31, 2023 and 2022, we did not adjust fair values provided by our valuation service providers or brokers or substitute them with an internal model for such securities.
Certain participants also have a significant portion of their benefits attributable to a former final average pay formula. 80% of the projected benefit obligation (“PBO”) of our primary qualified employee plan is related to the former final average pay formula.
Certain participants also have a significant portion of their benefits attributable to a former final average pay formula. 79% of the projected benefit obligation (“PBO”) of our primary qualified employee plan is related to the former final average pay formula.
We believe these issues are not likely to be resolved in the near future, and the ultimate costs may vary materially from the amounts currently recorded resulting in material changes in loss reserves. Historical variability of reserve estimates is demonstrated in the Claims and Claims Expense Reserves section of the MD&A.
We believe these issues are not likely to be resolved in the near future, and the ultimate costs may vary materially from the amounts currently recorded resulting in material changes in loss reserves. Historical variability of reserve estimates is demonstrated in the Property and Casualty Insurance Claims and Claims Expense Reserves section of the MD&A.
The most critical estimates, presented in the order they appear in the Consolidated Statements of Financial Position, include those used in determining: • Fair value of financial assets • Impairment of fixed income securities with credit losses • Business combinations and purchase price allocations • Evaluation of goodwill • Reserve for property and casualty insurance claims and claims expense estimation • Pension and other postretirement plans net costs and assumptions In making these determinations, management makes subjective and complex judgments that frequently require estimates about matters that are inherently uncertain.
The most critical estimates, presented in the order they appear in the Consolidated Statements of Financial Position, include those used in determining: • Fair value of financial assets • Impairment of fixed income securities with credit losses • Evaluation of goodwill • Reserve for property and casualty insurance claims and claims expense estimation • Pension and other postretirement plans net costs and assumptions In making these determinations, management makes subjective and complex judgments that frequently require estimates about matters that are inherently uncertain.
Change in fair value of foreign currency denominated investments (1) As of December 31, ($ in millions) 2022 2021 -10% change in foreign currency exchange rates $ (310) $ (379) -10% change in net investments in foreign subsidiaries (114) (130) (1) Represents an immediate, simultaneous depreciation in each of the foreign currency exchange rates to which we are exposed compared to the U.S. dollar, including the effects of foreign currency derivative contracts and excludes the offset from liabilities in foreign currencies. 76 www.allstate.com Capital Resources and Liquidity 2022 Form 10-K Capital Resources and Liquidity Capital resources consist of shareholders’ equity and debt, representing funds deployed or available to be deployed to support business operations or for general corporate purposes.
Change in fair value of foreign currency denominated investments (1) As of December 31, ($ in millions) 2023 2022 -10% change in foreign currency exchange rates $ (356) $ (310) -10% change in net investments in foreign subsidiaries (125) (114) (1) Represents an immediate, simultaneous depreciation in each of the foreign currency exchange rates to which we are exposed compared to the U.S. dollar, including the effects of foreign currency derivative contracts and excludes the offset from liabilities in foreign currencies. 76 www.allstate.com 2023 Form 10-K Capital Resources and Liquidity Capital Resources and Liquidity Capital resources consist of shareholders’ equity and debt, representing funds deployed or available to be deployed to support business operations or for general corporate purposes.
Although this evaluation reflects most reasonably likely outcomes, it is possible the final outcome may fall below or above these amounts. Historical variability of reserve estimates is reported in the Claims and Claims Expense Reserves section of the MD&A.
Although this evaluation reflects most reasonably likely outcomes, it is possible the final outcome may fall below or above these amounts. Historical variability of reserve estimates is reported in the Property and Casualty Insurance Claims and Claims Expense Reserves section of the MD&A.
Such risks are managed within processes listed above, but overall strategy is coordinated at the enterprise level, and holistic governance is provided by cross-functional committees such as the ERRC and ESG Steering Committee. 84 www.allstate.com Application of Critical Accounting Estimates 2022 Form 10-K Application of Critical Accounting Estimates The preparation of financial statements in conformity with GAAP requires management to adopt accounting policies and make estimates and assumptions that affect amounts reported in the consolidated financial statements.
Such risks are managed within processes listed above, but overall strategy is coordinated at the enterprise level, and holistic governance is provided by cross-functional committees such as the ERRC. 84 www.allstate.com 2023 Form 10-K Application of Critical Accounting Estimates Application of Critical Accounting Estimates The preparation of financial statements in conformity with GAAP requires management to adopt accounting policies and make estimates and assumptions that affect amounts reported in the consolidated financial statements.
The effects of inflation are implicitly considered in the reserving process, as a development factor. Historic data incorporates inflation from recent prior periods in estimating future loss costs. The development factor estimation methodology may require modification when data changes due to changing claim reporting practices, changing claim settlement patterns, external regulatory or financial influences, or contractual coverage changes.
The effects of inflation are implicitly considered in the reserving process, as development factors use historic data that incorporates inflation from recent prior periods in estimating future loss costs. The development factor estimation methodology may require modification when data changes due to changing claim reporting practices, changing claim settlement patterns, external regulatory or financial influences, or contractual coverage changes.
Statutory surplus is a measure that is often used as a basis for determining dividend paying capacity, operating leverage and premium growth capacity, and it is also reviewed by rating agencies in determining their ratings. The property and casualty business is comprised of 58 insurance companies as of December 31, 2022, each of which has individual company dividend limitations.
Statutory surplus is a measure that is often used as a basis for determining dividend paying capacity, operating leverage and premium growth capacity, and it is also reviewed by rating agencies in determining their ratings. The property and casualty business is comprised of 59 insurance companies as of December 31, 2023, each of which has individual company dividend limitations.
These estimates are considered in conjunction with known facts and interpretations of circumstances and factors including our experience with similar cases, actual claims paid, historical trends involving claim payment patterns and pending levels of unpaid claims, loss management programs, product mix and contractual terms, changes in law and regulation, judicial decisions, and economic conditions.
These estimates are considered in conjunction with known facts and interpretations of circumstances and factors including our experience with similar cases, actual claims paid, historical trends involving claim payment patterns and pending levels of unpaid claims, loss management programs, product mix and contractual terms, changes in laws and regulations, judicial decisions, and economic conditions.
Change in fair value of spread-sensitive assets (1) (2) As of December 31, ($ in millions) 2022 2021 +100 bps change $ (1,462) $ (1,767) (1) Includes the effects of credit derivatives and any call features associated with the securities. (2) Represents an immediate, parallel increase based on information and assumptions used in the spread duration calculations.
Change in fair value of spread-sensitive assets (1) (2) As of December 31, ($ in millions) 2023 2022 +100 bps change $ (1,898) $ (1,462) (1) Includes the effects of credit derivatives and any call features associated with the securities. (2) Represents an immediate, parallel increase based on information and assumptions used in the spread duration calculations.
The maximum amount of dividends that AIC will be able to pay, without prior Illinois Department of Insurance approval, at a given point in time in 2023, based on 10% of actual 2022 statutory surplus, is estimated at $1.22 billion, less dividends paid during the preceding twelve months measured at that point in time.
The maximum amount of dividends that AIC will be able to pay, without prior Illinois Department of Insurance approval, at a given point in time in 2024, based on 10% of actual 2023 statutory surplus, is estimated at $1.20 billion, less dividends paid during the preceding twelve months measured at that point in time.
Impact of assumption changes to net periodic pension cost as of December 31, 2022 ($ in millions) Basis/percentage point change Increase (decrease) to net cost, pre-tax Pension plans discount rate +100 basis points $ (404) -100 basis points 485 Expected long-term rate of return on assets +100 basis points (42) -100 basis points 42 The Allstate Corporation 95 2022 Form 10-K Regulation and Legal Proceedings We are subject to extensive regulation and we are involved in various legal and regulatory actions, all of which have an effect on specific aspects of our business.
Impact of assumption changes to net periodic pension cost as of December 31, 2023 ($ in millions) Basis/percentage point change Increase (decrease) to net cost, pre-tax Pension plans discount rate +100 basis points $ (398) -100 basis points 476 Expected long-term rate of return on assets +100 basis points (42) -100 basis points 42 The Allstate Corporation 95 2023 Form 10-K Regulation and Legal Proceedings We are subject to extensive regulation and we are involved in various legal and regulatory actions, all of which have an effect on specific aspects of our business.
For example: • The Coronavirus has had a significant impact on driving patterns and auto frequency and severity, including supply chain disruptions and labor shortages, higher used car prices, labor and part cost increases, unemployment levels, changes in commuting activity and driving behavior that may lead to historical development trends being less predictive of future loss development, potentially creating additional reserve variability. • If a legal change is expected to have a significant impact on the development of claim severity for a coverage which is part of a particular line of insurance in a specific state, judgment is applied to determine appropriate development factors that will most accurately reflect the expected impact on that specific estimate. • A change in economic conditions is expected to affect the cost of repairs to damaged autos or property for a particular line, coverage, or state, actuarial judgment is applied to determine appropriate development factors to use in the reserve estimate that will most accurately reflect the expected impacts on severity development.
For example: • Supply chain disruptions and labor shortages, higher used car prices, labor and part cost increases, unemployment levels, changes in commuting activity and driving behavior have and may continue to lead to historical development trends being less predictive of future loss development, potentially creating additional reserve variability. • If a legal change is expected to have a significant impact on the development of claim severity for a coverage which is part of a particular line of insurance in a specific state, judgment is applied to determine appropriate development factors that will most accurately reflect the expected impact on that specific estimate. • A change in economic conditions is expected to affect the cost of repairs to damaged autos or property for a particular line, coverage, or state, actuarial judgment is applied to determine appropriate development factors to use in the reserve estimate that will most accurately reflect the expected impacts on severity development.
The annual review resulted in unfavorable reserve reestimates totaling $118 million and $111 million in 2022 and 2021, respectively. The reserve reestimates are included as part of claims and claims expense. Reserve reestimates in 2022 primarily related to new reported information and defense costs for asbestos and higher than expected reported losses for environmental and other run-off exposures.
The annual review resulted in unfavorable reserve reestimates totaling $80 million and $118 million in 2023 and 2022, respectively. The reserve reestimates are included as part of claims and claims expense. The reserve reestimates in 2023 primarily related to new reported information and defense costs for asbestos and other run-off exposures and higher than expected environmental reported losses.
For a more detailed discussion of our off-balance sheet arrangements, see Note 7 of the consolidated financial statements. The Allstate Corporation 81 2022 Form 10-K Enterprise Risk and Return Management Enterprise Risk and Return Management Allstate is subject to significant risks as an insurer and a provider of other products and services.
For a more detailed discussion of our off-balance sheet arrangements, see Note 7 of the consolidated financial statements. The Allstate Corporation 81 2023 Form 10-K Enterprise Risk and Return Management Enterprise Risk and Return Management Allstate is subject to significant risks as an insurer and a provider of protection products and services.
Many risk drivers impact more than one of these key risk categories. Examples include risks related to the Coronavirus, inflation, and ESG factors.
Many risk drivers impact more than one of these key risk categories. Examples include risks related to inflation and ESG factors.
The underlying collateral may contain fixed interest rates, variable interest rates (such as adjustable rate mortgages), or both fixed and variable rate features. Equity securities of $4.57 billion primarily include common stocks, exchange traded and mutual funds, non-redeemable preferred stocks and real estate investment trust (“REIT”) equity investments.
The underlying collateral may contain fixed interest rates, variable interest rates (such as adjustable rate mortgages), or both fixed and variable rate features. Equity securities of $2.41 billion primarily include common stocks, exchange traded and mutual funds, non-redeemable preferred stocks and real estate investment trust (“REIT”) equity investments.
Based on these evaluations, case reserves are established by claims adjusting staff and actuarial analysis is employed to develop an IBNR reserve, which includes estimated potential reserve development and claims that have occurred but have not been reported. As of December 31, 2022 and 2021, IBNR was 55.9% and 54.8%, respectively, of combined net asbestos and environmental reserves.
Based on these evaluations, case reserves are established by claims adjusting staff and actuarial analysis is employed to develop an IBNR reserve, which includes estimated potential reserve development and claims that have occurred but have not been reported. As of December 31, 2023 and 2022, IBNR was 55.7% and 55.9%, respectively, of combined net asbestos and environmental reserves.
(2) 2021 results include National General packaged policies, which include auto, and commercial lines insurance products. (3) Includes lender-placed property. (4) Other personal lines include renters, condominium, landlord and other personal lines products. (5) Other business lines primarily represents revenue and direct operating expenses of Ivantage and distribution of non-proprietary life and annuity products.
(2) 2021 results include National General packaged policies, which include auto, and commercial lines insurance products. (3) Include renters, condominium, landlord and other personal lines products. (4) Primarily represents revenue and direct operating expenses of Ivantage, distribution of non-proprietary life and annuity products and lender-placed products.
Change in fair value of equity investments (1) (2) As of December 31, ($ in millions) 2022 2021 -10% change in equity valuations $ (402) $ (670) (1) Includes the effects of equity derivatives. (2) Represents an immediate change in equity valuations for investments. We periodically use derivatives to reduce equity price risk or to adjust our equity risk profile.
Change in fair value of equity investments (1) (2) As of December 31, ($ in millions) 2023 2022 -10% change in equity valuations $ (127) $ (402) (1) Includes the effects of equity derivatives. (2) Represents an immediate change in equity valuations for investments. We periodically use derivatives to reduce equity price risk or to adjust our equity risk profile.
Report year incurred claim severity does not include incurred but not reported (“IBNR”) losses or benefits from subrogation and salvage. 40 www.allstate.com Property-Liability 2022 Form 10-K • 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 paid claim severity statistics are calculated as the amount of increase or decrease in gross claim frequency or paid claim severity in the current period compared to the same period in the prior year divided by the prior year gross claim frequency or paid claim severity. • Percent change in report year incurred claim severity statistic is calculated as the amount of increase or decrease in report year incurred claim severity recorded in the current report year divided by the current estimate of the prior report year incurred claim severity.
Report year incurred claim severity does not include incurred The Allstate Corporation 41 2023 Form 10-K Property-Liability but not reported (“IBNR”) losses or benefits from subrogation and salvage. • 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 paid claim severity statistics are calculated as the amount of increase or decrease in gross claim frequency or paid claim severity in the current period compared to the same period in the prior year divided by the prior year gross claim frequency or paid claim severity. • Percent change in report year incurred claim severity statistic is calculated as the amount of increase or decrease in report year incurred claim severity recorded in the current year divided by the current estimate of the prior report year incurred claim severity.
Net losses on investments and derivatives in 2022 related primarily to decreased valuation on equity investments and losses on sales of fixed income securities, partially offset by increased valuation change and settlements of derivatives. Net gains on investments and derivatives in 2021 related primarily to gains on sales and higher valuation on equity investments.
Net losses on investments and derivatives in 2023 related primarily to losses on sales, partially offset by higher valuation on equity investments. Net losses on investments and derivatives in 2022 related primarily to decreased valuation on equity investments and losses on sales of fixed income securities, partially offset by increased valuation change and settlements of derivatives.
Further discussion of reserve estimates For further discussion of these estimates and quantification of the impact of reserve estimates, reserve reestimates and assumptions, see Note 9 and Note 15 of the consolidated financial statements and the Claims and Claims Expense Reserves section of the MD&A.
For further discussion of these estimates and quantification of the impact of reserve estimates, reserve reestimates and assumptions, see Note 9 and Note 15 of the consolidated financial statements and the Property and Casualty Insurance Claims and Claims Expense Reserves section of the MD&A.
As of December 31, 2022, the fixed income portfolio duration (1) was 3.4 compared to 3.8 as of December 31, 2021.
As of December 31, 2023, the fixed income portfolio duration (1) was 4.8 compared to 3.4 as of December 31, 2022.
We can use this shelf registration to issue an unspecified amount of debt securities, common stock (including 637 million shares of treasury stock as of December 31, 2022), preferred stock, depository shares, warrants, stock purchase contracts, stock purchase units and securities of trust subsidiaries.
We can use this shelf registration to issue an unspecified amount of debt securities, common stock (including 638 million shares of treasury stock as of December 31, 2023), preferred stock, depository shares, warrants, stock purchase contracts, stock purchase units and securities of trust subsidiaries.
(2) As of December 31, 2022 and 2021, MCCA includes $62 million and $51 million of reinsurance recoverable on paid claims, respectively, and $6.66 billion and $6.64 billion of reinsurance recoverable on unpaid claims, respectively. (3) Other reinsurance recoverables primarily relate to commercial lines, including shared economy, as well as asbestos, environmental and other liability exposures.
(2) As of December 31, 2023 and 2022, MCCA includes $62 million of reinsurance recoverable on paid claims and $6.36 billion and $6.66 billion of reinsurance recoverable on unpaid claims, respectively. (3) Other reinsurance recoverables primarily relate to commercial lines, including shared economy, as well as asbestos, environmental and other liability exposures.
Equity investments (1) As of December 31, 2022, we held $4.06 billion in equity investments that comprise equity securities, excluding those with fixed income securities as their underlying investments, and including limited partnership interests where the underlying assets are predominately public equity securities, compared to $6.67 billion as of December 31, 2021.
Equity investments (1) As of December 31, 2023, we held $1.52 billion in equity investments that comprise equity securities, excluding those with fixed income securities as their underlying investments, and including limited partnership interests where the underlying assets are predominately public equity securities, compared to $4.06 billion as of December 31, 2022.
As of December 31, 2022, cash and estimated liquidity available within one quarter, under normal market conditions and at current market prices, was $23.44 billion. Certain remote events and circumstances could constrain our liquidity.
As of December 31, 2023, cash and estimated liquidity available within one quarter, under normal market conditions and at current market prices, was $23.52 billion. Certain remote events and circumstances could constrain our liquidity.
We have reissued 154 million common shares since 1995, primarily associated with our equity incentive plans, the 1999 acquisition of American Heritage Life Investment Corporation and the 2001 redemption of certain mandatorily redeemable preferred securities. Since 1995, total common shares outstanding has decreased by 635 million shares or 70.7%, primarily due to our repurchase programs.
We have reissued 156 million common shares since 1995, primarily associated with our equity incentive plans, the 1999 acquisition of American Heritage Life Investment Corporation and the 2001 redemption of certain mandatorily redeemable preferred securities. Since 1995, total common shares outstanding has decreased by 636 million shares or 70.8%, primarily due to our repurchase programs.
The Allstate Corporation 63 2022 Form 10-K Allstate Health and Benefits Allstate Health and Benefits reinsurance ceded The vast majority of reinsurance relates to the disposition of long-term care and other closed blocks of business. We retain primary liability as a direct insurer for all risks ceded to reinsurers. Reinsurance recoverables by reinsurer, net S&P financial strength rating A.M.
Allstate Health and Benefits reinsurance ceded The vast majority of reinsurance relates to the disposition of long-term care and other closed blocks of business. We retain primary liability as a direct insurer for all risks ceded to reinsurers. Reinsurance recoverables by reinsurer, net S&P financial strength rating A.M.
We assess credit spread risk by evaluating spread duration which measures the price sensitivity of the assets to changes in spreads. As of December 31, 2022, the spread duration (1) was 4.0 compared to 4.6 as of December 31, 2021.
We assess credit spread risk by evaluating spread duration which measures the price sensitivity of the assets to changes in spreads. As of December 31, 2023, the spread duration (1) was 4.7 compared to 4.0 as of December 31, 2022.
Derivatives provide an offset to changes in equity market values. Limited partnership interests As of December 31, 2022, we held $7.64 billion in limited partnership interests excluding those limited partnership interests where the underlying assets are predominately public equity securities compared to $7.26 billion as of December 31, 2021.
Derivatives provide an offset to changes in equity market values. Limited partnership interests As of December 31, 2023, we held $8.24 billion in limited partnership interests excluding those limited partnership interests where the underlying assets are predominately public equity securities compared to $7.64 billion as of December 31, 2022.
Best, respectively. As of December 31, 2021, the other category includes $8 million and $5 million of recoverables due from reinsurers rated A- or better by S&P and A.M. Best, respectively. We continuously monitor the creditworthiness of reinsurers in order to determine our risk of recoverability on an individual and aggregate basis.
Best, respectively. As of December 31, 2022, the other category includes $3 million and $4 million of recoverables due from reinsurers rated A- or better by S&P and A.M. Best, respectively. We continuously monitor the creditworthiness of reinsurers in order to determine our risk of recoverability on an individual and aggregate basis.
When we experience changes of the type previously mentioned, we apply actuarial judgment in the determination and selection of development factors considered more reflective of the new trends, such as combining shorter or longer periods of historical results with current actual results to produce development factors based on two-year, three-year, or longer development periods to reestimate our reserves.
When we experience changes of the type previously mentioned, we apply actuarial judgment in the determination and selection of development factors considered more reflective of the new trends, such as combining shorter or longer periods of historical results with current actual results to produce development factors used to reestimate our reserves.
Investments Outlook We plan to focus on the following priorities: • Enhance investment portfolio returns through use of a dynamic capital allocation framework and focus on tax efficiency. • Leverage our broad capabilities to manage the portfolio to earn higher risk-adjusted returns on capital. • Invest for the specific needs and characteristics of Allstate’s businesses, including its corresponding liability profile.
The Allstate Corporation 65 2023 Form 10-K Investments Investments Outlook We plan to focus on the following priorities: • Enhance investment portfolio returns through use of a dynamic capital allocation framework and focus on tax efficiency. • Leverage our broad capabilities to manage the portfolio to earn higher risk-adjusted returns on capital. • Invest for the specific needs and characteristics of Allstate’s businesses, including its corresponding liability profile.
Change in fair value of limited partnership interests (1) As of December 31, ($ in millions) 2022 2021 -10% change in private market valuations $ (764) $ (726) (1) Represents an immediate change in the value of limited partnership interests.
Change in fair value of limited partnership interests (1) As of December 31, ($ in millions) 2023 2022 -10% change in private market valuations $ (824) $ (764) (1) Represents an immediate change in the value of limited partnership interests.
We use foreign currency derivative contracts to partially offset this risk. As of December 31, 2022, we had $3.10 billion in foreign currency denominated investments, including the effects of foreign currency derivative contracts, and $1.14 billion net investment in our foreign subsidiaries, primarily related to our Canada operations.
We use foreign currency derivative contracts to partially offset this risk. As of December 31, 2023, we had $3.56 billion in foreign currency denominated investments, including the effects of foreign currency derivative contracts, and $1.25 billion net investment in our foreign subsidiaries, primarily related to our Canada operations.
A more detailed discussion of reserve reestimates is presented in the Claims and Claims Expense Reserves section of the MD&A.
A more detailed discussion of reserve reestimates is presented in the Property and Casualty Insurance Claims and Claims Expense Reserves section of the MD&A.
However, the The Allstate Corporation 47 2022 Form 10-K Allstate Protection impact of these actions may be diminished by the growth in insured values, the effect of state insurance laws and regulations and we may not be able to maintain our current level of reinsurance or purchase new reinsurance protection in amounts we consider sufficient at acceptable prices.
However, the impact of these actions may be diminished by the growth in insured values, the effect of state insurance laws and regulations and we may not be able to maintain our current level of reinsurance or purchase new reinsurance protection in amounts we consider sufficient at acceptable prices.
Case and supplemental reserves • Typically, the case, including statistical case, and supplemental development reserves comprise about 90% of total reserves. • As claims are reported, for certain liability claims of sufficient size and complexity, the field adjusting staff establishes case reserve estimates of ultimate cost, based on their assessment of facts and circumstances related to each individual claim. • For other claims which occur in large volumes and settle in a relatively short time frame, it is not practical or efficient to set case reserves for each claim, and a statistical case reserve is set for these claims based on estimation techniques described above. • In the normal course of business, we may also supplement our claims processes by utilizing third-party adjusters, appraisers, engineers, inspectors, and other professionals and information sources to assess and settle catastrophe and non-catastrophe related claims. • Historically, the case reserves set by the field adjusting staff have not proven to be an entirely accurate estimate of the ultimate cost of claims.
Case and supplemental reserves • As claims are reported, for certain liability claims of sufficient size and complexity, the field adjusting staff establishes case reserve estimates of ultimate cost, based on their assessment of facts and circumstances related to each individual claim. • For other claims which occur in large volumes and settle in a relatively short time frame, it is not practical or efficient to set case reserves for each claim, and a statistical case reserve is set for these claims based on estimation techniques described above. • In the normal course of business, we may also supplement our claims processes by utilizing third-party adjusters, appraisers, engineers, inspectors, and other professionals and information sources to assess and settle catastrophe and non-catastrophe related claims.
Paid claim severity increased in 2022 compared to 2021 due to inflationary loss cost pressure driven by increases in labor and materials costs and time to repair. Homeowner paid claim severity can be impacted by both the mix of perils and the magnitude of specific losses paid during the quarter.
Paid claim severity increased in 2023 compared to 2022 due to inflationary loss cost pressure driven by increases in labor and materials costs. Homeowner paid claim severity can be impacted by both the mix of perils and the magnitude of specific losses paid during the period.
Reserve reestimates in 2021 primarily related to new reported information for asbestos and environmental and higher than expected reported losses for environmental and other run-off exposures.
Reserve reestimates in 2022 primarily related to new reported information and defense costs for asbestos and higher than expected reported losses for environmental and other run-off exposures.
The decrease in 2022 primarily relates to a decline in employer voluntary benefits and individual health business, partially offset by growth in group health. Other revenue increased $43 million in 2022 compared to 2021, primarily due to an increase in group health administrative fees.
The decrease in 2023 primarily relates to a decline in employer voluntary benefits, partially offset by growth in group health and individual health businesses. Other revenue increased $45 million in 2023 compared to 2022, primarily due to an increase in group health administrative fees.
The below investment grade corporate bonds portfolio is made up of 328 issuers. We employ fundamental analyses of issuers and sectors along with macro and asset class views to identify investment opportunities. This results in a portfolio with broad exposure to the high yield market with an emphasis on idiosyncratic positions reflective of our views of market conditions and opportunities.
We employ fundamental analyses of issuers and sectors along with macro and asset class views to identify investment opportunities. This results in a portfolio with broad exposure to the high yield market with an emphasis on idiosyncratic positions reflective of our views of market conditions and opportunities.
Allstate’s approach is grounded in its Risk and Return Principles and organized by Our Shared Purpose. Culture is managed using a set of cultural risk categories established as a basis for assessment and measurement, and the Learning Loop is applied to ensure continuous improvement. Results of culture risk assessments are reported to the ERRC and RRC throughout the year.
Allstate’s approach is grounded in its Risk and Return Principles and organized by Our Shared Purpose. Culture is managed using a set of cultural risk categories established as a basis for assessment and measurement, and the Learning Loop is applied to ensure continuous improvement.
We also consider recent developments in commutation activity between reinsurers and cedents, and recent trends in arbitration and litigation outcomes in disputes between cedents and reinsurers in seeking to maximize our reinsurance recoveries.
We employ dedicated specialists to manage reinsurance collections and disputes. We also consider recent developments in commutation activity between reinsurers and cedents, and recent trends in arbitration and litigation outcomes in disputes between cedents and reinsurers in seeking to maximize our reinsurance recoveries.
We develop probabilistic estimates of risk based on our exposures, historical observed volatility or industry-recognized models in the case of catastrophe risk. • Scenario analysis: measures and monitors risks and estimated losses due to extreme low frequency events that include combined multiple event scenarios across risk categories and time periods.
We develop probabilistic estimates of risk based on our exposures, historical observed volatility or industry-recognized models in the case of catastrophe risk. • Scenario analysis: measures and monitors risks and estimated losses due to extreme low frequency events that include combined multiple The Allstate Corporation 83 2023 Form 10-K Enterprise Risk and Return Management event scenarios across risk categories and time periods.

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