Consolidated VIEs, of which the Company is the primary beneficiary, primarily include Adirondack Insurance Exchange, a New York reciprocal insurer, and New Jersey Skylands Insurance Association, a New Jersey reciprocal insurer (together “Reciprocal Exchanges”). The Reciprocal Exchanges are insurance carriers organized as unincorporated associations. The Company does not own the equity of the Reciprocal Exchanges, which is owned by their respective policyholders.

The Company manages the business operations of the Reciprocal Exchanges and has the power to direct their activities that most significantly impact their economic performance. The Company receives a management fee for the services provided to the Reciprocal Exchanges. In addition, as of September 30, 2022 and December 31, 2021, the Company holds interests of $123 million in the form of surplus notes included in other liabilities and expenses on the Statement of Assets and Liabilities of the Reciprocal Exchanges that provide capital to the Reciprocal Exchanges and would absorb any expected losses. The Company is therefore the primary beneficiary.

In the event of dissolution, policyholders would share any residual unassigned surplus but are not subject to assessment for any deficit in unassigned surplus of the Reciprocal Exchanges. The assets of the Reciprocal Exchanges can be used only to settle the obligations of the Reciprocal Exchanges and general creditors have no recourse to the Company.

The results of operations of the Reciprocal Exchanges are included in the Company’s Allstate Protection segment and generated $39 million and $122 million of earned premiums for the three and nine months ended September 30, 2022, respectively, compared to $47 million and $137 million for the three and nine months ended September 30, 2021, respectively.

Claims and claims expenses were $31 million and $91 million for the three and nine months ended September 30, 2022, respectively, compared to $38 million and $105 million for the three and nine months ended September 30, 2021, respectively.


Assets and liabilities of Reciprocal Exchanges
($ in millions)	September 30, 2022		December 31, 2021
Assets
Fixed income securities	$	302	$	324
Short-term investments	12		30
Deferred policy acquisition costs	20		15
Premium installment and other receivables, net	41		42
Reinsurance recoverables, net	119		114
Other assets	89		82
Total assets	583		607
Liabilities
Reserve for property and casualty insurance claims and claims expense	200		226
Unearned premiums	174		175
Other liabilities and expenses	327		265
Total liabilities	$	701	$	666