Investments - Rollforward of credit loss allowance for bank loans (Details) - USD ($)
$ in Millions

3 Months Ended

Mar. 31, 2021

Mar. 31, 2020

Credit Losses on Fixed Income Securities


Note 5			Investments


Portfolio composition

($ in millions)	March 31, 2021		December 31, 2020
Fixed income securities, at fair value	$	40,594	$	42,565
Equity securities, at fair value	3,154		3,168
Mortgage loans, net	902		746
Limited partnership interests	6,367		4,563
Short-term investments, at fair value	6,017		6,807
Other, net	3,042		1,691
Total	$	60,076	$	59,540


Amortized cost, gross unrealized gains (losses) and fair value for fixed income securities
($ in millions)	Amortized cost, net		Gross unrealized				Fair value
			Gains		Losses
March 31, 2021
U.S. government and agencies	$	3,103	$	26	$	(19)	$	3,110
Municipal	7,226		310		(36)		7,500
Corporate	27,145		1,045		(187)		28,003
Foreign government	977		16		(8)		985
ABS	934		11		(2)		943
MBS	52		1		—		53
Total fixed income securities	$	39,437	$	1,409	$	(252)	$	40,594



December 31, 2020
U.S. government and agencies	$	2,058	$	50	$	(1)	$	2,107
Municipal	7,100		480		(2)		7,578
Corporate	29,057		1,986		(26)		31,017
Foreign government	921		37		—		958
ABS	840		9		(3)		846
MBS	58		1		—		59
Total fixed income securities	$	40,034	$	2,563	$	(32)	$	42,565


Scheduled maturities for fixed income securities
($ in millions)	March 31, 2021
	Amortized cost, net		Fair value
Due in one year or less	$	1,279	$	1,291
Due after one year through five years	18,216		18,810
Due after five years through ten years	13,464		13,818
Due after ten years	5,492		5,679
	38,451		39,598
ABS and MBS	986		996
Total	$	39,437	$	40,594

Actual maturities may differ from those scheduled as a result of calls and make-whole payments by the issuers. ABS and MBS are shown separately because of potential prepayment of principal prior to contractual maturity dates.


Net investment income
($ in millions)	Three months ended March 31,
		2021		2020
Fixed income securities		$	301	$	298
Equity securities		14		10
Mortgage loans		10		9
Limited partnership interests		378		(77)
Short-term investments		1		11
Other		41		31
Investment income, before expense		745		282
Investment expense		(37)		(36)
Net investment income		$	708	$	246


Realized capital gains (losses) by asset type
($ in millions)	Three months ended March 31,
		2021		2020
Fixed income securities		$	183	$	374
Equity securities		164		(510)
Mortgage loans		6		(10)
Limited partnership interests		4		(86)
Derivatives		11		78
Other		58		(8)
Realized capital gains (losses)		$	426	$	(162)


Realized capital gains (losses) by transaction type
($ in millions)	Three months ended March 31,
		2021		2020
Sales		$	246	$	388
Credit losses		2		(37)

Valuation of equity investments (1)		167		(591)
Valuation and settlements of derivative instruments		11		78
Realized capital gains (losses)		$	426	$	(162)

(1)Includes valuation of equity securities and certain limited partnership interests where the underlying assets are predominately public equity securities.


Gross realized gains (losses) on sales of fixed income securities
($ in millions)	Three months ended March 31,
		2021		2020
Gross realized gains		$	245	$	435
Gross realized losses		(64)		(59)

The following table presents the net pre-tax appreciation (decline) recognized in net income of equity securities and limited partnership interests carried at fair value that are still held as of March 31, 2021 and 2020, respectively.


Net appreciation (decline) recognized in net income
($ in millions)	Three months ended March 31,
		2021		2020
Equity securities		$	125	$	(417)

Limited partnership interests carried at fair value		141		(28)
Total		$	266	$	(445)


Credit losses recognized in net income
($ in millions)	Three months ended March 31,
		2021		2020
Assets
Fixed income securities:

Corporate		$	1	$	(1)
ABS		1		—
MBS		—		(1)
Total fixed income securities		2		(2)
Mortgage loans		6		(9)
Limited partnership interests		—		(5)
Other investments
Bank loans		(6)		(20)

Total credit losses by asset type		$	2	$	(36)

Liabilities
Commitments to fund commercial mortgage loans, bank loans and agent loans		—		(1)
Total		$	2	$	(37)


Unrealized net capital gains and losses included in AOCI
($ in millions)	Fair value		Gross unrealized				Unrealized net gains (losses)
March 31, 2021			Gains		Losses
Fixed income securities	$	40,594	$	1,409	$	(252)	$	1,157

Short-term investments	6,017		—		—		—
Derivative instruments	—		—		(3)		(3)
Equity method of accounting (“EMA”) limited partnerships (1)							(1)
Investments classified as held for sale							1,562
Unrealized net capital gains and losses, pre-tax							2,715
Amounts recognized for:
Insurance reserves (2)							(358)
DAC and DSI (3)							(228)
Reclassification of noncontrolling interest							4
Amounts recognized							(582)
Deferred income taxes							(453)
Unrealized net capital gains and losses, after-tax							$	1,680

December 31, 2020
Fixed income securities	$	42,565	$	2,563	$	(32)	$	2,531
Short-term investments	6,807		—		—		—
Derivative instruments	—		—		(3)		(3)
EMA limited partnerships							(1)
Investments classified as held for sale							2,369
Unrealized net capital gains and losses, pre-tax							4,896
Amounts recognized for:
Insurance reserves							(496)
DAC and DSI							(364)
Amounts recognized							(860)
Deferred income taxes							(856)
Unrealized net capital gains and losses, after-tax							$	3,180

(1)Unrealized net capital gains and losses for limited partnership interests represent the Company’s share of EMA limited partnerships’ OCI. Fair value and gross unrealized gains and losses are not applicable.

(2)The insurance reserves adjustment represents the amount by which the reserve balance would increase if the net unrealized gains in the applicable product portfolios were realized and reinvested at lower interest rates, resulting in a premium deficiency. This adjustment primarily relates to structured settlement annuities with life contingencies (a type of immediate fixed annuity), which are now classified as held for sale.

(3)The DAC and DSI adjustment balance represents the amount by which the amortization of DAC and DSI would increase or decrease if the unrealized gains or losses in the respective product portfolios were realized. This adjustment relates to life insurance products, which are now primarily classified as held for sale.


Change in unrealized net capital gains (losses)
($ in millions)	Three months ended March 31, 2021
Fixed income securities	$	(1,374)
Short-term investments	—
Derivative instruments	—
EMA limited partnerships	—
Investments classified as held for sale	(807)
Total	(2,181)
Amounts recognized for:
Insurance reserves	138
DAC and DSI	136
Reclassification of noncontrolling interest	4
Amounts recognized	278
Deferred income taxes	403
Decrease in unrealized net capital gains and losses, after-tax	$	(1,500)


Carrying value for limited partnership interests
($ in millions)	March 31, 2021						December 31, 2020
	EMA		Fair Value		Total		EMA		Fair Value		Total
Private equity	$	3,935	$	1,295	$	5,230	$	2,667	$	988	$	3,655
Real estate	816		68		884		623		74		697
Other (1)	253		—		253		211		—		211
Total (2)	$	5,004	$	1,363	$	6,367	$	3,501	$	1,062	$	4,563

(1)Other consists of certain limited partnership interests where the underlying assets are predominately public equity and debt securities.

(2)Carrying value for limited partnership interests as of March 31, 2021 includes certain investments which were classified as assets held for sale as of December 31, 2020 and transferred to continuing operations in the first quarter of 2021.

Short-term investments Short-term investments, including money market funds, commercial paper, U.S. Treasury bills and other short-term investments, are carried at fair value. As of March 31, 2021 and December 31, 2020, the fair value of short-term investments totaled $6.02 billion and $6.81 billion, respectively.

Other investments Other investments primarily consist of bank loans, real estate, policy loans, agent loans and derivatives. Bank loans are primarily senior secured corporate loans and are carried at amortized cost, net. Policy loans are carried at unpaid principal balances. Real estate is carried at cost less accumulated depreciation. Agent loans are loans issued to exclusive Allstate agents and are carried at amortized cost, net. Derivatives are carried at fair value.


Other investments by asset type
($ in millions)	March 31, 2021		December 31, 2020
Bank loans, net	$	1,260	$	772
Real estate	871		659
Policy loans	164		181
Agent loans, net	607		—
Derivatives	22		20
Other	118		59
Total (1)	$	3,042	$	1,691

(1)Other investments as of March 31, 2021 includes certain real estate, agent loans and other investments which were classified as assets held for sale as of December 31, 2020 and transferred to continuing operations in the first quarter of 2021.

Portfolio monitoring and credit losses

Fixed income securities The Company has a comprehensive portfolio monitoring process to identify and evaluate each fixed income security that may require a credit loss allowance.

For each fixed income security in an unrealized loss position, the Company assesses whether management with the appropriate authority has made the decision to sell or whether it is more likely than not the Company will be required to sell the security before recovery of the amortized cost basis for reasons such

as liquidity, contractual or regulatory purposes. If a security meets either of these criteria, any existing credit loss allowance would be written-off against the amortized cost basis of the asset along with any remaining unrealized losses, with incremental losses recorded in earnings.

If the Company has not made the decision to sell the fixed income security and it is not more likely than not the Company will be required to sell the fixed income security before recovery of its amortized cost basis, the Company evaluates whether it expects to

receive cash flows sufficient to recover the entire amortized cost basis of the security. The Company calculates 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 is compared to the amortized cost of the security.

The determination of cash flow estimates is inherently subjective, and methodologies may vary depending on facts and circumstances specific to the security. All reasonably available information relevant to the collectability of the security is considered when developing the estimate of cash flows expected to be collected. That information generally includes, but is not limited to, the remaining payment terms of the security, prepayment speeds, the financial condition and future earnings potential of the issue or issuer, expected defaults, expected recoveries, the value of underlying collateral, origination vintage year, geographic concentration of underlying collateral, available reserves or escrows, current subordination levels, third-party guarantees and other credit enhancements. Other information, such as industry analyst reports and forecasts, credit ratings, financial condition of the bond insurer for insured fixed income securities, and other market data relevant to the realizability of contractual cash flows, may also be considered. The estimated fair value of collateral will be used to estimate recovery value if the Company determines that the security is dependent on the liquidation of collateral for ultimate settlement.

If the Company does not expect to receive cash flows sufficient to recover the entire amortized cost basis of the fixed income security, a credit loss allowance is recorded in earnings for the shortfall in expected cash flows; however, the amortized cost, net of the credit loss allowance, may not be lower than the fair value of the security. The portion of the unrealized loss related to factors other than credit remains classified in AOCI. If the Company determines that the fixed income security does not have sufficient cash flow or other information to estimate a recovery value

for the security, the Company may conclude that the entire decline in fair value is deemed to be credit related and the loss is recorded in earnings.

When a security is sold or otherwise disposed or when the security is deemed uncollectible and written off, the Company removes amounts previously recognized in the credit loss allowance. Recoveries after write-offs are recognized when received. Accrued interest excluded from the amortized cost of fixed income securities totaled $322 million and $351 million as of March 31, 2021 and December 31, 2020 and is reported within the accrued investment income line of the Condensed Consolidated Statements of Financial Position. The Company monitors accrued interest and writes off amounts when they are not expected to be received.

The Company’s portfolio monitoring process includes a quarterly review of all securities to identify instances where the fair value of a security compared to its amortized cost is below internally established thresholds. The process also includes the monitoring of other credit loss indicators such as ratings, ratings downgrades and payment defaults. The securities identified, in addition to other securities for which the Company may have a concern, are evaluated for potential credit losses using all reasonably available information relevant to the collectability or recovery of the security. Inherent in the Company’s evaluation of credit losses for these securities are assumptions and estimates about the financial condition and future earnings potential of the issue or issuer. Some of the factors that may be considered in evaluating whether a decline in fair value requires a credit loss allowance are: 1) the financial condition, near-term and long-term prospects of the issue or issuer, including relevant industry specific market conditions and trends, geographic location and implications of rating agency actions and offering prices; 2) the specific reasons that a security is in an unrealized loss position, including overall market conditions which could affect liquidity; and 3) the extent to which the fair value has been less than amortized cost.


Rollforward of credit loss allowance for fixed income securities
	Three months ended March 31,
($ in millions)		2021		2020
Beginning balance		$	(3)	$	—
Credit losses on securities for which credit losses not previously reported		—		(4)
Net decreases related to credit losses previously reported		2		—
Reduction of allowance related to sales		—		—



Ending balance (1) (2)		$	(1)	$	(4)

(1)Allowance for fixed income securities as of March 31, 2021 comprised $1 million of ABS. Allowance for fixed income securities as of March 31, 2020 comprised $1 million and $3 million of corporate bonds and MBS, respectively.

(2)Includes $1 million and $2 million of credit loss allowance for fixed income securities that are classified as held for sale as of March 31, 2021 and 2020, respectively.


Gross unrealized losses and fair value by type and length of time held in a continuous unrealized loss position
($ in millions)	Less than 12 months					12 months or more					Total unrealized losses
	Number of issues	Fair value		Unrealized losses		Number of issues	Fair value		Unrealized losses
March 31, 2021
Fixed income securities
U.S. government and agencies	108	$	2,084	$	(19)	—	$	—	$	—	$	(19)
Municipal	804	1,398		(36)		1	5		—		(36)
Corporate	1,003	6,715		(176)		25	121		(11)		(187)
Foreign government	64	289		(8)		—	—		—		(8)
ABS	15	79		(2)		13	50		—		(2)
MBS	15	2		—		55	—		—		—

Total fixed income securities	2,009	$	10,567	$	(241)	94	$	176	$	(11)	$	(252)
Investment grade fixed income securities	1,821	$	9,206	$	(207)	69	$	67	$	(1)	$	(208)
Below investment grade fixed income securities	188	1,361		(34)		25	109		(10)		(44)
Total fixed income securities	2,009	$	10,567	$	(241)	94	$	176	$	(11)	$	(252)

December 31, 2020
Fixed income securities
U.S. government and agencies	26	$	215	$	(1)	—	$	—	$	—	$	(1)
Municipal	43	116		(2)		—	—		—		(2)
Corporate	107	730		(21)		14	46		(5)		(26)
Foreign government	7	7		—		—	—		—		—
ABS	21	157		(2)		12	43		(1)		(3)
MBS	11	—		—		57	—		—		—
Total fixed income securities	215	$	1,225	$	(26)	83	$	89	$	(6)	$	(32)
Investment grade fixed income securities	146	$	855	$	(8)	66	$	45	$	—	$	(8)
Below investment grade fixed income securities	69	370		(18)		17	44		(6)		(24)
Total fixed income securities	215	$	1,225	$	(26)	83	$	89	$	(6)	$	(32)


Gross unrealized losses by unrealized loss position and credit quality as of March 31, 2021
($ in millions)	Investment grade		Below investment grade		Total
Fixed income securities with unrealized loss position less than 20% of amortized cost, net (1) (2)	$	(207)	$	(34)	$	(241)
Fixed income securities with unrealized loss position greater than or equal to 20% of amortized cost, net (3) (4)	(1)		(10)		(11)
Total unrealized losses	$	(208)	$	(44)	$	(252)

(1)Below investment grade fixed income securities include $30 million that have been in an unrealized loss position for less than twelve months.

(2)Related to securities with an unrealized loss position less than 20% of amortized cost, net, the degree of which suggests that these securities do not pose a high risk of having credit losses.

(3)No below investment grade fixed income securities have been in an unrealized loss position for a period of twelve or more consecutive months.

(4)Evaluated based on factors such as discounted cash flows and the financial condition and near-term and long-term prospects of the issue or issuer and were determined to have adequate resources to fulfill contractual obligations.

Investment grade is defined as a security having a rating of Aaa, Aa, A or Baa from Moody’s, a rating of AAA, AA, A or BBB from S&P Global Ratings (“S&P”), a comparable rating from another nationally recognized rating agency, or a comparable internal rating if an externally provided rating is not available. Market prices for certain securities may have credit spreads which imply higher or lower credit quality than the

current third-party rating. Unrealized losses on investment grade securities are principally related to an increase in market yields which may include increased risk-free interest rates and/or wider credit spreads since the time of initial purchase. The unrealized losses are expected to reverse as the securities approach maturity.

ABS and MBS in an unrealized loss position were evaluated based on actual and projected collateral losses relative to the securities’ positions in the respective securitization trusts, security specific expectations of cash flows, and credit ratings. This evaluation also takes into consideration credit enhancement, measured in terms of (i) subordination from other classes of securities in the trust that are contractually obligated to absorb losses before the class of security the Company owns, and (ii) the expected impact of other structural features embedded in the securitization trust beneficial to the class of securities the Company owns, such as overcollateralization and excess spread. Municipal bonds in an unrealized loss position were evaluated based on the underlying credit quality of the primary obligor, obligation type and quality of the underlying assets.

As of March 31, 2021, the Company has not made the decision to sell and it is not more likely than not the Company will be required to sell fixed income securities with unrealized losses before recovery of the amortized cost basis.

Loans The Company establishes a credit loss allowance for mortgage loans, bank loans and agent loans when they are originated or purchased, and for unfunded commitments unless they are unconditionally cancellable by the Company. The Company uses a probability of default and loss given default model for mortgage loans and bank loans to estimate current expected credit losses that considers all relevant information available including past events, current conditions, and reasonable and supportable forecasts over the life of an asset. The Company also considers such factors as historical losses, expected prepayments and various economic factors. For mortgage loans the Company considers origination vintage year and property level information such as debt service coverage, property type, property location and collateral value. For bank loans the Company considers the credit rating of the borrower, credit spreads and type of loan. After the reasonable and supportable forecast period, the Company’s model reverts to historical loss trends. Given the less complex and homogenous nature of agent loans, the Company estimates current expected credit losses using historical loss experience over the estimated life of the loans, adjusted for current conditions, reasonable and supportable forecasts and expected prepayments.

Loans are evaluated on a pooled basis when they share similar risk characteristics. The Company monitors loans through a quarterly credit monitoring process to determine when they no longer share similar risk characteristics and are to be evaluated individually when estimating credit losses.

Loans are written off against their corresponding allowances when there is no reasonable expectation of recovery. If a loan recovers after a write-off, the estimate of expected credit losses includes the expected recovery.

Accrual of income is suspended for loans that are in default or when full and timely collection of principal and interest payments is not probable. Accrued income receivable is monitored for recoverability and when not expected to be collected is written off through net investment income. Cash receipts on loans on non-accrual status are generally recorded as a reduction of amortized cost.

Accrued interest is excluded from the amortized cost of loans and is reported within the accrued investment income line of the Condensed Consolidated Statements of Financial Position. As of March 31, 2021, accrued interest totaled $4 million, $3 million and $2 million for mortgage loans, bank loans and agent loans, respectively. As of December 31, 2020, accrued interest totaled $2 million and $3 million for mortgage loans and bank loans, respectively.

Mortgage loans When it is determined a mortgage loan shall be evaluated individually, the Company uses various methods to estimate credit losses on individual loans such as using collateral value less estimated costs to sell where applicable, including when foreclosure is probable or when repayment is expected to be provided substantially through the operation or sale of the collateral and the borrower is experiencing financial difficulty. When collateral value is used, the mortgage loans may not have a credit loss allowance when the fair value of the collateral exceeds the loan’s amortized cost. An alternative approach may be utilized to estimate credit losses using the present value of the loan’s expected future repayment cash flows discounted at the loan’s current effective interest rate.

Individual loan credit loss allowances are adjusted for subsequent changes in the fair value of the collateral less costs to sell, when applicable, or present value of the loan’s expected future repayment cash flows.

Debt service coverage ratio is considered a key credit quality indicator when mortgage loan credit loss allowances are estimated. Debt service coverage ratio represents the amount of estimated cash flow from the property available to the borrower to meet principal and interest payment obligations. Debt service coverage ratio estimates are updated annually or more frequently if conditions are warranted based on the Company’s credit monitoring process.


Mortgage loans amortized cost by debt service coverage ratio distribution and year of origination
($ in millions)	March 31, 2021														December 31, 2020
	2016 and prior		2017		2018		2019		2020		Current		Total		Total
Below 1.0	$	15	$	—	$	—	$	—	$	—	$	—	$	15	$	—
1.0 - 1.25	29		—		13		23		10		—		75		46
1.26 - 1.50	105		36		24		130		—		—		295		201
Above 1.50	134		45		119		166		67		—		531		507
Amortized cost before allowance	$	283	$	81	$	156	$	319	$	77	$	—	$	916	$	754
Allowance													(14)		(8)
Amortized cost, net													$	902	$	746

Mortgage loans with a debt service coverage ratio below 1.0 that are not considered impaired primarily relate to situations where the borrower has the financial capacity to fund the revenue shortfalls from the properties for the foreseeable term, the decrease in cash flows from the properties is considered

temporary, or there are other risk mitigating factors such as additional collateral, escrow balances or borrower guarantees. Payments on all mortgage loans were current as of March 31, 2021 and December 31, 2020.


Rollforward of credit loss allowance for mortgage loans
	Three months ended March 31,
($ in millions)		2021		2020
Beginning balance		$	(67)	$	(3)
Cumulative effect of change in accounting principle		—		(42)
Net decreases (increases) related to credit losses		22		(40)
Write-offs		—		—

Ending balance (1)		$	(45)	$	(85)

(1)Includes $31 million and $68 million of credit loss allowance for mortgage loans that are classified as held for sale as of March 31, 2021 and 2020, respectively.

Bank loans When it is determined a bank loan shall be evaluated individually, the Company uses various methods to estimate credit losses on individual loans such as the present value of the loan’s expected future repayment cash flows discounted at the loan’s current effective interest rate.

Credit ratings of the borrower are considered a key credit quality indicator when bank loan credit loss allowances are estimated. The ratings are updated quarterly and are either received from a nationally recognized rating agency or a comparable internal rating is derived if an externally provided rating is not available. The year of origination is determined to be the year in which the asset is acquired.


Bank loans amortized cost by credit rating and year of origination
($ in millions)	March 31, 2021														December 31, 2020
	2016 and prior		2017		2018		2019		2020		Current		Total		Total
BBB	$	—	$	5	$	7	$	11	$	8	$	29	$	60	$	38
BB	9		22		30		42		36		172		311		168
B	13		68		86		77		139		389		772		456
CCC and below	11		28		32		55		27		13		166		161




Amortized cost before allowance	$	33	$	123	$	155	$	185	$	210	$	603	$	1,309	$	823
Allowance													(49)		(51)
Amortized cost, net													$	1,260	$	772


Rollforward of credit loss allowance for bank loans
($ in millions)	Three months ended March 31,
		2021		2020
Beginning balance		$	(67)	$	—
Cumulative effect of change in accounting principle		—		(53)
Net increases related to credit losses		(2)		(27)
Reduction of allowance related to sales		9		1
Write-offs		—		—

Ending balance (1)		$	(60)	$	(79)

(1)Includes $11 million and $22 million of credit loss allowance for bank loans that are classified as held for sale as of March 31, 2021 and 2020, respectively.

Agent loans The Company monitors agent loans to determine when they should be removed from the pool and assessed for credit losses individually by using internal credit risk grades that classify the loans into risk categories. The categorization is based on relevant information about the ability of borrowers to service their debt, such as historical payment experience, current business trends, cash flow coverage and collateral quality. Internal credit risk grades are updated annually or more frequently if conditions are warranted based on the Company’s credit monitoring process.

As of March 31, 2021, 85% of agent loans balance represents the top three highest credit quality categories. The allowance for agent loans totaled $6 million as of March 31, 2021. Agent loans were all classified as assets held for sale as of December 31, 2020 and transferred to continuing operations in the first quarter of 2021.

Bank loans, net

Credit Losses on Fixed Income Securities

Beginning balance

$ (67)

$ 0

Net increases related to credit losses

(2)

(27)

Reduction of allowance related to sales

Write-offs

Ending balance

(60)