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 both December 31, 2022 and 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 addition, the Company provides quota share reinsurance on the property business of the Reciprocal Exchanges.

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 $164 million and $181 million of earned premiums in 2022 and 2021, respectively.

Claims and claims expenses were $130 million and $135 million in 2022 and 2021, respectively.


Assets and liabilities of Reciprocal Exchanges
($ in millions)	December 31, 2022		December 31, 2021
Assets
Fixed income securities	$	302	$	324
Short-term investments	13		30
Deferred policy acquisition costs	15		15
Premium installment and other receivables, net	43		42
Reinsurance recoverables, net	97		114
Other assets	90		82
Total assets	560		607
Liabilities
Reserve for property and casualty insurance claims and claims expense	209		226
Unearned premiums	171		175
Other liabilities and expenses	311		265
Total liabilities	$	691	$	666