Reserve for Property-Liability Insurance Claims and Claims Expense (Tables)

12 Months Ended

Dec. 31, 2017

Reserve for Property-Liability Insurance Claims and Claims Expense

Activity in the reserve for property-liability insurance claims and claims expense



Rollforward of reserve for property and casualty insurance claims and claims expense
($ in millions)	2017			2016			2015
Balance as of January 1	$	25,250		$	23,869		$	22,923
Less reinsurance recoverables	6,184			5,892			5,694
Net balance as of January 1	19,066			17,977			17,229
SquareTrade acquisition as of January 3, 2017	17			—			—
Incurred claims and claims expense related to:
Current year	22,432			22,238			20,953
Prior years	(503		)	(17		)	81
Total incurred	21,929			22,221			21,034
Claims and claims expense paid related to:
Current year	14,194			14,222			13,660
Prior years	6,964			6,910			6,626
Total paid	21,158			21,132			20,286
Net balance as of December 31	19,854			19,066			17,977
Plus reinsurance recoverables	6,471			6,184			5,892
Balance as of December 31	$	26,325		$	25,250		$	23,869

Incurred and paid claims and claims expense

The information about incurred and paid claims development for the 2013 to 2017 years, and the average annual percentage payout of incurred claims by age as of December 31, 2017, is presented as required supplementary information.

Auto insurance – liability coverage



($ in millions, except number of reported claims)	Incurred claims and allocated claim adjustment expenses, net of reinsurance										IBNR reserves plus expected development on reported claims		Cumulative number of reported claims
	For the years ended December 31,										As of December 31, 2017
	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Accident year	2013		2014		2015		2016		2017
2013	$	7,461	$	7,429	$	7,446	$	7,387	$	7,317	$	513	2,114,149
2014	—		7,889		7,955		7,882		7,785		951		2,194,476
2015	—		—		8,896		8,816		8,721		1,828		2,380,096
2016	—		—		—		9,169		8,926		3,149		2,387,023
2017	—		—		—		—		8,621		5,465		2,112,379
							Total		$	41,370

	Cumulative paid claims and allocated claims adjustment expenses, net of reinsurance
	For the years ended December 31,
	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Accident year	2013		2014		2015		2016		2017
2013	$	2,955	$	4,993	$	5,946	$	6,493	$	6,804
2014	—		3,177		5,322		6,265		6,834
2015	—		—		3,529		5,846		6,893
2016	—		—		—		3,491		5,777
2017	—		—		—		—		3,156
							Total		$	29,464
All outstanding liabilities before 2013, net of reinsurance									1,275
Liabilities for claims and claim adjustment expenses, net of reinsurance									$	13,181

Auto insurance – physical damage coverage



($ in millions, except number of reported claims)	Incurred claims and allocated claim adjustment expenses, net of reinsurance										IBNR reserves plus expected development on reported claims		Cumulative number of reported claims
	For the years ended December 31,										As of December 31, 2017
	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Accident year	2013		2014		2015		2016		2017
2013	$	3,894	$	3,866	$	3,854	$	3,844	$	3,842	$	1	3,777,287
2014	—		4,308		4,296		4,270		4,273		3		4,144,310
2015	—		—		4,663		4,688		4,676		11		4,388,829
2016	—		—		—		5,136		5,058		19		4,426,714
2017	—		—		—		—		5,131		278		4,075,755
							Total		$	22,980

	Cumulative paid claims and allocated claims adjustment expenses, net of reinsurance
	For the years ended December 31,
	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Accident year	2013		2014		2015		2016		2017
2013	$	3,718	$	3,848	$	3,841	$	3,841	$	3,841
2014	—		4,148		4,281		4,273		4,270
2015	—		—		4,513		4,679		4,665
2016	—		—		—		4,895		5,039
2017	—		—		—		—		4,853
							Total		$	22,668
All outstanding liabilities before 2013, net of reinsurance									9
Liabilities for claims and claim adjustment expenses, net of reinsurance									$	321

Homeowners insurance



($ in millions, except number of reported claims)	Incurred claims and allocated claim adjustment expenses, net of reinsurance										IBNR reserves plus expected development on reported claims		Cumulative number of reported claims
	For the years ended December 31,										As of December 31, 2017
	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Accident year	2013		2014		2015		2016		2017
2013	$	3,098	$	3,170	$	3,163	$	3,142	$	3,121	$	51	682,873
2014	—		3,608		3,651		3,653		3,621		88		765,001
2015	—		—		3,572		3,622		3,560		158		720,102
2016	—		—		—		3,972		4,001		319		809,045
2017	—		—		—		—		4,490		1,260		840,254
							Total		$	18,793

	Cumulative paid claims and allocated claims adjustment expenses, net of reinsurance
	For the years ended December 31,
	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Accident year	2013		2014		2015		2016		2017
2013	$	2,288	$	2,885	$	2,998	$	3,045	$	3,070
2014	—		2,736		3,365		3,481		3,533
2015	—		—		2,589		3,299		3,402
2016	—		—		—		2,950		3,682
2017	—		—		—		—		3,230
							Total		$	16,917
All outstanding liabilities before 2013, net of reinsurance									173
Liabilities for claims and claim adjustment expenses, net of reinsurance									$	2,049

Average annual percentage payout of incurred claims by age, net of reinsurance



Average annual percentage payout of incurred claims by age, net of reinsurance, as of December 31, 2017
	1 year		2 years		3 years		4 years		5 years
Auto insurance – physical damage coverage	96.6	%	3.2	%	(0.2	)%	—	%	—	%



Average annual percentage payout of incurred claims by age, net of reinsurance, as of December 31, 2017
	1 year		2 years		3 years		4 years		5 years
Auto insurance – liability coverage	40.2	%	27.4	%	12.5	%	8.0	%	4.7	%



Average annual percentage payout of incurred claims by age, net of reinsurance, as of December 31, 2017
	1 year		2 years		3 years		4 years		5 years
Homeowners insurance	74.6	%	18.6	%	2.9	%	1.3	%	0.7	%

Reconciliation of the net incurred claims and claims expense development



Reconciliation of the net incurred and paid claims development tables above to the reserve for property and casualty insurance claims and claims expense
($ in millions)	As of December 31, 2017
Net outstanding liabilities:
Allstate Protection
Auto insurance - Liability coverage	$	13,181
Auto insurance - Physical damage coverage	321
Homeowners insurance	2,049
Other personal lines	1,311
Commercial lines	593
Service Businesses	86
Discontinued Lines and Coverages ⁽¹⁾	1,335
Unallocated loss adjustment expenses	978
Net reserve for property and casualty insurance claims and claims expense	19,854

Reinsurance recoverable:
Allstate Protection
Auto insurance - Liability coverage	5,715
Auto insurance - Physical damage coverage	—
Homeowners insurance	23
Other personal lines	214
Commercial lines	20
Service Businesses	10
Discontinued Lines and Coverages	485
Unallocated loss adjustment expenses	4
Total reinsurance recoverable	6,471
Gross reserve for property and casualty insurance claims and claims expense	$	26,325


⁽¹⁾	Discontinued Lines and Coverages includes business in run-off. All of the claims primarily relate to accident years more than 30 years ago. IBNR reserves represent $733 million of the total reserves as of December 31, 2017.