Reportable Segments

9 Months Ended

Sep. 30, 2020

Segment Reporting [Abstract]

Reportable Segments

Note 4 Reportable Segments

Measuring segment profit or loss

The measure of segment profit or loss used in evaluating performance is underwriting income for the Allstate Protection and Discontinued Lines and Coverages segments and adjusted net income for the Service Businesses, Allstate Life, Allstate Benefits, Allstate Annuities, and Corporate and Other segments. A reconciliation of these measures to net income applicable to common shareholders is provided below.

Underwriting income is calculated as premiums earned and other revenue, less claims and claims expenses (“losses”), Shelter-in-Place Payback expense, amortization of DAC, operating costs and expenses, amortization of purchased intangibles and restructuring and related charges as determined using GAAP.

Adjusted net income is net income applicable to common shareholders, excluding:

• Realized capital gains and losses, after-tax, except for periodic settlements and accruals on non-hedge derivative instruments, which are reported with realized capital gains and losses but included in adjusted net income

• Pension and other postretirement remeasurement gains and losses, after-tax

• Valuation changes on embedded derivatives not hedged, after-tax

• Amortization of DAC and DSI, to the extent they resulted from the recognition of certain realized capital gains and losses or valuation changes on embedded derivatives not hedged, after-tax

•  Business combination expenses and the amortization or impairment of purchased intangibles, after-tax

• Gain (loss) on disposition of operations, after-tax

• Adjustments for other significant non-recurring, infrequent or unusual items, when (a) the nature of the charge or gain is such that it is reasonably unlikely to recur within two years, or (b) there has been no similar charge or gain within the prior two years

Reportable segments revenue information
($ in millions)	Three months ended September 30,						Nine months ended September 30,
	2020			2019			2020			2019
Property-Liability
Insurance premiums
Auto	$	6,210		$	6,080		$	18,537		$	18,045
Homeowners	2,073			1,997			6,164			5,890
Other personal lines	486			469			1,435			1,390
Commercial lines	183			236			560			645
Allstate Protection	8,952			8,782			26,696			25,970
Discontinued Lines and Coverages	—			—			—			—
Total Property-Liability insurance premiums	8,952			8,782			26,696			25,970
Other revenue	192			195			555			561
Net investment income	422			448			802			1,210
Realized capital gains (losses)	292			163			571			916
Total Property-Liability	9,858			9,588			28,624			28,657
Service Businesses
Consumer product protection plans	236			163			661			461
Roadside assistance	48			57			143			183
Finance and insurance products	100			92			294			268
Intersegment premiums and service fees (1)	36			44			109			110
Other revenue (2)	52			47			155			142
Net investment income	12			11			33			30
Realized capital gains (losses)	14			4			9			21
Total Service Businesses	498			418			1,404			1,215
Allstate Life
Traditional life insurance premiums	154			155			471			465
Accident and health insurance premiums	—			—			1			1
Interest-sensitive life insurance contract charges	176			176			530			535
Other revenue	28			31			84			91
Net investment income	123			128			374			380
Realized capital gains (losses)	9			5			(3		)	1
Total Allstate Life	490			495			1,457			1,473
Allstate Benefits
Traditional life insurance premiums	12			12			33			31
Accident and health insurance premiums	235			250			704			746
Interest-sensitive life insurance contract charges	40			29			95			86
Net investment income	18			21			58			61
Realized capital gains (losses)	3			2			—			8
Total Allstate Benefits	308			314			890			932
Allstate Annuities
Fixed annuities contract charges	3			3			7			10
Net investment income	245			251			358			737
Realized capital gains (losses)	112			20			88			224
Total Allstate Annuities	360			274			453			971
Corporate and Other
Net investment income	12			21			37			52
Realized capital gains (losses)	10			3			17			13
Total Corporate and Other	22			24			54			65
Intersegment eliminations (1)	(36		)	(44		)	(109		)	(110		)
Consolidated revenues	$	11,500		$	11,069		$	32,773		$	33,203

⁽¹⁾  Intersegment insurance premiums and service fees are primarily related to Arity and Allstate Roadside Services and are eliminated in the condensed consolidated financial statements.

⁽²⁾  Other revenue is primarily related to Allstate Identity Protection, Allstate Dealer Services, and Allstate Protection Plans.

Reportable segments financial performance
	Three months ended September 30,						Nine months ended September 30,
($ in millions)	2020			2019			2020			2019
Property-Liability
Allstate Protection	$	888		$	836		$	3,143		$	1,909
Discontinued Lines and Coverages	(135		)	(99		)	(141		)	(105		)
Total underwriting income	753			737			3,002			1,804
Net investment income	422			448			802			1,210
Income tax expense on operations	(240		)	(236		)	(752		)	(617		)
Realized capital gains (losses), after-tax	230			127			447			724
Property-Liability net income applicable to common shareholders	1,165			1,076			3,499			3,121
Service Businesses
Adjusted net income	40			8			115			35
Realized capital gains (losses), after-tax	11			4			7			17
Amortization of purchased intangibles, after-tax	(21		)	(25		)	(63		)	(74		)
Impairment of purchased intangibles, after-tax	—			—			—			(43		)
Service Businesses net income (loss) applicable to common shareholders	30			(13		)	59			(65		)
Allstate Life
Adjusted net (loss) income	(14		)	44			138			185
Realized capital gains (losses), after-tax	6			4			(3		)	—
Valuation changes on embedded derivatives not hedged, after-tax	(1		)	(9		)	(24		)	(9		)
DAC and DSI amortization related to realized capital gains and losses, after-tax	(4		)	1			4			(2		)
Allstate Life net (loss) income applicable to common shareholders	(13		)	40			115			174
Allstate Benefits
Adjusted net income	33			31			62			99
Realized capital gains (losses), after-tax	3			2			—			7
Allstate Benefits net income applicable to common shareholders	36			33			62			106
Allstate Annuities
Adjusted net income (loss)	37			16			(213		)	43
Realized capital gains (losses), after-tax	89			16			70			177
Valuation changes on embedded derivatives not hedged, after-tax	1			(1		)	(3		)	(6		)
Premium deficiency for immediate annuities, after-tax (1)	(178		)	—			(178		)	—
Gain on disposition of operations, after-tax	—			—			2			2
Allstate Annuities net (loss) income applicable to common shareholders	(51		)	31			(322		)	216
Corporate and Other
Adjusted net loss	(111		)	(101		)	(317		)	(302		)
Realized capital gains (losses), after-tax	7			2			13			10
Pension and other postretirement remeasurement gains (losses), after-tax	56			(179		)	(253		)	(289		)
Curtailment gain, after-tax	7			—			7			—
Corporate and Other net loss applicable to common shareholders	(41		)	(278		)	(550		)	(581		)
Consolidated net income applicable to common shareholders	$	1,126		$	889		$	2,863		$	2,971

⁽¹⁾ 

Contract benefits increased by $225 million, pre-tax, for premium deficiency on immediate annuities with life contingencies due to updated investment and actuarial assumptions in the third quarter of 2020.