Reserve for Property and Casualty Insurance Claims and Claims Expense (Tables)

12 Months Ended

Dec. 31, 2022

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)	2022		2021		2020
Balance as of January 1	$	33,060	$	27,610	$	27,712
Less recoverables (1)	(9,479)		(7,033)		(6,912)
Net balance as of January 1	23,581		20,577		20,800
National General acquisition as of January 4, 2021	—		1,797		—
SafeAuto acquisition as of October 1, 2021	—		134		—
Incurred claims and claims expense related to:
Current year	35,523		29,196		22,437
Prior years	1,741		122		(436)
Total incurred	37,264		29,318		22,001
Claims and claims expense paid related to:
Current year	(20,739)		(18,438)		(14,245)
Prior years	(11,741)		(9,807)		(7,979)
Total paid	(32,480)		(28,245)		(22,224)
Net balance as of December 31	28,365		23,581		20,577
Plus recoverables	9,176		9,479		7,033
Balance as of December 31	$	37,541	$	33,060	$	27,610

(1) Recoverables comprises reinsurance and indemnification recoverables. See Note 11 for further details.

Reconciliation of total claims and claims expense incurred and paid by coverage
	December 31, 2022
($ in millions)	Incurred		Paid
Allstate Protection
Auto insurance - liability coverage	$	14,376	$	(11,173)
Auto insurance - physical damage coverage	9,411		(8,802)
Homeowners insurance	6,971		(5,977)
Total auto and homeowners insurance	30,758		(25,952)
Other personal lines	1,520		(1,317)
Commercial lines	1,256		(817)
Protection Services	440		(438)
Run-off Property-Liability	116		(86)
Unallocated loss adjustment expenses (“ULAE”)	3,048		(2,847)
Claims incurred and paid from before 2018	80		(787)
Other (1)	46		(236)
Total	$	37,264	$	(32,480)

(1)Paid and incurred amounts primarily related to the effect of foreign currency translation adjustments. Additionally, paid includes the acquisition of SafeAuto.

Prior year reserve reestimates included in claims and claims expense (1)
	Twelve months ended December 31,
	Non-catastrophe losses						Catastrophe losses						Total
($ in millions)	2022		2021		2020		2022		2021(2)(3)		2020 (4)		2022		2021		2020
Auto	$	1,249	$	178	$	(63)	$	(64)	$	(29)	$	(44)	$	1,185	$	149	$	(107)
Homeowners	113		12		(17)		81		(165)		(422)		194		(153)		(439)
Other personal lines	(34)		(96)		(27)		2		(11)		(39)		(32)		(107)		(66)
Commercial lines	273		116		34		(1)		3		2		272		119		36
Run-off Property-Liability (5)	125		116		141		—		—		—		125		116		141
Protection Services	(3)		(2)		(1)		—		—		—		(3)		(2)		(1)
Total prior year reserve reestimates	$	1,723	$	324	$	67	$	18	$	(202)	$	(503)	$	1,741	$	122	$	(436)

(1)Favorable reserve reestimates are shown in parentheses.

(2)Includes approximately $240 million of estimated recoveries related to Nationwide Aggregate Reinsurance Program cover for aggregate catastrophe losses occurring between April 1, 2020 and December 31, 2020, which primarily impacted homeowners reestimates.

(3)Includes approximately $110 million favorable subrogation settlements arising from the Woolsey wildfire, which primarily impacted homeowners reestimates.

(4)Includes approximately $495 million of favorable reserve reestimates related to the PG&E Corporation and Southern California Edison subrogation settlements, which primarily impacted homeowners.

(5)The Company’s 2022, 2021 and 2020 annual reserve review, using established industry and actuarial best practices, resulted in unfavorable reestimates of $118 million, $111 million and $132 million, respectively.

Short-duration insurance contracts, claims development

The information about incurred and paid claims development for the 2018 to 2022 years, and the average annual percentage payout of incurred claims by age as of December 31, 2022, 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 recoverables												IBNR reserves plus expected development on reported claims		Cumulative number of reported claims
	For the years ended December 31,										Prior year reserve reestimates		As of December 31, 2022
	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Accident year	2018 (1)		2019 (1)		2020 (1)		2021		2022
2018	$	9,788	$	9,758	$	9,798	$	9,835	$	9,928	$	93	$	603	2,500,972
2019	—		10,526		10,471		10,716		10,905		189		1,242		2,637,152
2020	—		—		8,748		8,744		8,984		240		1,813		1,904,004
2021	—		—		—		10,365		10,823		458		3,488		2,291,873
2022	—		—		—		—		13,396				8,904		2,311,893
							Total		$	54,036	$	980
Reconciliation to total prior year reserve reestimates recognized by line
Prior year reserve reestimates for pre-2018 accident years											152
Prior year reserve reestimates for ULAE											18
Other											4
Total prior year reserve reestimates											$	1,154
	Cumulative paid claims and allocated claims adjustment expenses, net of recoverables
	For the years ended December 31,
	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Accident year	2018 (1)		2019 (1)		2020 (1)		2021		2022
2018	$	3,663	$	6,404	$	7,785	$	8,703	$	9,325
2019	—		3,974		7,080		8,651		9,663
2020	—		—		3,135		5,858		7,171
2021	—		—		—		3,601		7,335
2022	—		—		—		—		4,492
							Total		$	37,986
All outstanding liabilities before 2018, net of recoverables									1,332
Liabilities for claims and claim adjustment expenses, net of recoverables									$	17,382

(1) Results include certain National General commercial lines insurance products.

Auto insurance – physical damage coverage

($ in millions, except number of reported claims)	Incurred claims and allocated claim adjustment expenses, net of recoverables												IBNR reserves plus expected development on reported claims		Cumulative number of reported claims
	For the years ended December 31,										Prior year reserve reestimates		As of December 31, 2022
	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Accident year	2018 (1)		2019 (1)		2020 (1)		2021		2022
2018	$	5,775	$	5,692	$	5,647	$	5,640	$	5,637	$	(3)	$	—	4,686,877
2019	—		6,255		6,174		6,136		6,134		(2)		(1)		4,861,875
2020	—		—		5,495		5,407		5,381		(26)		(7)		4,013,428
2021	—		—		—		7,285		7,342		57		(23)		4,587,385
2022	—		—		—		—		9,385				1,060		4,711,189
							Total		$	33,879	$	26
Reconciliation to total prior year reserve reestimates recognized by line
Prior year reserve reestimates for pre-2018 accident years											—
Prior year reserve reestimates for ULAE											3
Other											2
Total prior year reserve reestimates											$	31
	Cumulative paid claims and allocated claims adjustment expenses, net of recoverables
	For the years ended December 31,
	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Accident year	2018 (1)		2019 (1)		2020 (1)		2021		2022
2018	$	5,464	$	5,681	$	5,638	$	5,635	$	5,637
2019	—		5,947		6,144		6,138		6,135
2020	—		—		5,129		5,415		5,388
2021	—		—		—		6,860		7,365
2022	—		—		—		—		8,325
							Total		$	32,850
All outstanding liabilities before 2018, net of recoverables									11
Liabilities for claims and claim adjustment expenses, net of recoverables									$	1,040

(1)Results include certain National General commercial lines insurance products.

Homeowners insurance

($ in millions, except number of reported claims)	Incurred claims and allocated claim adjustment expenses, net of recoverables												IBNR reserves plus expected development on reported claims		Cumulative number of reported claims
	For the years ended December 31,										Prior year reserve reestimates		As of December 31, 2022
	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Accident year	2018 (1)		2019 (1)		2020 (1)		2021		2022
2018	$	5,145	$	5,251	$	4,947	$	4,818	$	4,852	$	34	$	42	898,857
2019	—		4,853		4,912		4,920		4,931		11		85		869,860
2020	—		—		5,781		5,827		5,921		94		137		989,034
2021	—		—		—		6,404		6,532		128		385		992,897
2022	—		—		—		—		6,704				2,724		705,357
							Total		$	28,940	$	267
Reconciliation to total prior year reserve reestimates recognized by line
Prior year reserve reestimates for pre-2018 accident years											(72)
Prior year reserve reestimates for ULAE											2
Other											(3)
Total prior year reserve reestimates											$	194
	Cumulative paid claims and allocated claims adjustment expenses, net of recoverables
	For the years ended December 31,
	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Accident year	2018 (1)		2019 (1)		2020 (1)		2021		2022
2018	$	3,768	$	4,873	$	4,749	$	4,736	$	4,810
2019	—		3,527		4,576		4,768		4,846
2020	—		—		4,257		5,548		5,784
2021	—		—		—		4,538		6,147
2022	—		—		—		—		3,980
							Total		$	25,567
All outstanding liabilities before 2018, net of recoverables									86
Liabilities for claims and claim adjustment expenses, net of recoverables									$	3,459

(1)Results include National General packaged policies, which include auto, and commercial lines insurance products.

The information about incurred and paid claims development for the 2018 to 2022 years, as of December 31, 2022, is presented as required supplementary information.

Group and individual accident and health

($ in millions, except number of reported claims)	Incurred claims and allocated claim adjustment expenses, net of recoverables										IBNR reserves plus expected development on reported claims		Cumulative number of reported claims
	For the years ended December 31,										As of December 31, 2022
	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Accident year	2018		2019		2020		2021		2022
2018	$	235	$	205	$	203	$	203	$	203	$	—	292,491
2019	—		257		239		242		242		—		311,662
2020	—		—		297		293		294		4		414,634
2021	—		—		—		424		420		12		671,483
2022	—		—		—		—		437		162		427,124
							Total		$	1,596
	Cumulative paid claims and allocated claims adjustment expenses, net of recoverables
	For the years ended December 31,
	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Accident year	2018		2019		2020		2021		2022
2018	$	126	$	201	$	203	$	203	$	203
2019	—		158		234		242		242
2020	—		—		184		284		290
2021	—		—		—		272		408
2022	—		—		—		—		275
							Total		$	1,418
All outstanding liabilities before 2018, net of recoverables									—
Liabilities for claims and claim adjustment expenses, net of recoverables									$	178

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

Average annual percentage payout of incurred claims by age, net of recoverables, as of December 31, 2022
	1 year		2 years		3 years		4 years		5 years
Auto insurance – liability coverage	37.6	%	28.7	%	13.3	%	8.5	%	5.3	%

Average annual percentage payout of incurred claims by age, net of recoverables, as of December 31, 2022
	1 year		2 years		3 years		4 years		5 years
Auto insurance – physical damage coverage	95.2	%	4.4	%	(0.3)	%	(1.5)	%	1.6	%

Average annual percentage payout of incurred claims by age, net of recoverables, as of December 31, 2022
	1 year		2 years		3 years		4 years		5 years
Homeowners insurance	72.0	%	21.3	%	2.9	%	0.8	%	0.8	%

Average annual percentage payout of incurred claims by age, net of recoverables, as of December 31, 2022
	1 year		2 years		3 years		4 years		5 years
Group and individual accident and health	63.0	%	34.3	%	2.1	%	0.6	%	—	%

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, 2022
Net outstanding liabilities
Allstate Protection
Auto insurance - liability coverage	$	17,382
Auto insurance - physical damage coverage	1,040
Homeowners insurance	3,459
Other personal lines	1,558
Commercial lines	1,857
Protection Services	36
Run-off Property-Liability (1)	1,370
ULAE	1,649
Other (2)	14
Net reserve for property and casualty insurance claims and claims expense	28,365
Recoverables
Allstate Protection
Auto insurance - liability coverage	7,214
Auto insurance - physical damage coverage	44
Homeowners insurance	666
Other personal lines	320
Commercial lines	292
Protection Services	11
Run-off Property-Liability	503
ULAE	126
Total recoverables	9,176
Gross reserve for property and casualty insurance claims and claims expense	$	37,541

(1)Run-off Property-Liability includes business in run-off with most of the claims related to accident years more than 30 years ago. IBNR reserves represent $765 million of the total reserves as of December 31, 2022.

(2)Primarily related to the unamortized fair value adjustment related to the acquisition of National General.

Reconciliation of the net incurred and paid claims development tables above to the reserve for future policy benefits
($ in millions)	As of December 31, 2022
Net outstanding liabilities
Group and individual accident and health short-duration contracts	$	178
Other accident and health short-duration contracts	31
Long duration accident and health insurance	592
Long duration traditional life insurance and other	324
ULAE	9
Net reserve for future policy benefits	1,134
Recoverables
Group and individual accident and health short-duration contracts	35
Other accident and health short-duration contracts	—
Insurance lines other than short-duration	104
ULAE	—
Gross reserve for future policy benefits	$	1,273