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Reporting Segments
 12 Months Ended
Dec. 31, 2014
Reporting Segments  
Reporting Segments

19.  Reporting Segments

       Allstate management is organized around products and services, and this structure is considered in the identification of its four reportable segments. These segments and their respective operations are as follows:

       Allstate Protection principally sells private passenger auto and homeowners insurance in the United States and Canada. Revenues from external customers generated outside the United States were $1.08 billion, $1.06 billion and $992 million in 2014, 2013 and 2012, respectively. The Company evaluates the results of this segment based upon underwriting results.

       Discontinued Lines and Coverages consists of property-liability business no longer written by Allstate, including results from asbestos, environmental and other discontinued lines claims, and certain commercial and other businesses in run-off. This segment also includes the historical results of the commercial and reinsurance businesses sold in 1996. The Company evaluates the results of this segment based upon underwriting results.

       Allstate Financial sells traditional, interest-sensitive and variable life insurance and voluntary accident and health insurance products. Allstate Financial previously offered and continues to have in force fixed annuities such as deferred and immediate annuities, and institutional products consisting of funding agreements sold to unaffiliated trusts that use them to back medium-term notes. Allstate Financial had no revenues from external customers generated outside the United States in 2014, 2013 or 2012. The Company evaluates the results of this segment based upon operating income.

       Corporate and Other comprises holding company activities and certain non-insurance operations.

       Allstate Protection and Discontinued Lines and Coverages comprise Property-Liability. The Company does not allocate Property-Liability investment income, realized capital gains and losses, or assets to the Allstate Protection and Discontinued Lines and Coverages segments. Management reviews assets at the Property-Liability, Allstate Financial, and Corporate and Other levels for decision-making purposes. Allstate Protection and Allstate Financial performance and resources are managed by committees of senior officers of the respective segments.

       The accounting policies of the reportable segments are the same as those described in Note 2. The effects of certain inter-segment transactions are excluded from segment performance evaluation and therefore are eliminated in the segment results.

Measuring segment profit or loss

       The measure of segment profit or loss used by Allstate's management in evaluating performance is underwriting income for the Allstate Protection and Discontinued Lines and Coverages segments and operating income for the Allstate Financial and Corporate and Other segments. A reconciliation of these measures to net income is provided below.

       Underwriting income is calculated as premiums earned, less claims and claims expenses ("losses"), amortization of DAC, operating costs and expenses, and restructuring and related charges as determined using GAAP.

       Operating income is net income available 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 operating income,

•
valuation changes on embedded derivatives that are 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 that are not hedged, after-tax,

•
amortization of purchased intangible assets, after-tax,

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

•
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.

       Summarized revenue data for each of the Company's reportable segments for the years ended December 31 are as follows:

($ in millions)
   2014   2013   2012  

Revenues

                    

Property-Liability

                    

Property-liability insurance premiums

                    

Auto

   $ 19,344   $ 18,449   $ 17,928  

Homeowners

     6,904     6,613     6,359  

Other personal lines

     1,662     1,629     1,594  

Commercial lines

     476     456     462  

Other business lines

     542     471     394  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Allstate Protection

     28,928     27,618     26,737  

Discontinued Lines and Coverages

     1     —     —  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total property-liability insurance premiums

     28,929     27,618     26,737  

Net investment income

     1,301     1,375     1,326  

Realized capital gains and losses

     549     519     335  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total Property-Liability

     30,779     29,512     28,398  

Allstate Financial

    
 		    
 		    
 		  

Life and annuity premiums and contract charges

                    

Traditional life insurance

     511     491     470  

Immediate annuities with life contingencies

     4     37     45  

Accident and health insurance

     744     720     653  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total life and annuity premiums

     1,259     1,248     1,168  

Interest-sensitive life insurance

     879     1,086     1,055  

Fixed annuities

     19     18     18  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total contract charges

     898     1,104     1,073  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total life and annuity premiums and contract charges

     2,157     2,352     2,241  

Net investment income

     2,131     2,538     2,647  

Realized capital gains and losses

     144     74     (13 )
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total Allstate Financial

     4,432     4,964     4,875  

Corporate and Other

    
 		    
 		    
 		  

Service fees

     5     9     4  

Net investment income

     27     30     37  

Realized capital gains and losses

     1     1     5  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total Corporate and Other before reclassification of service fees

     33     40     46  

Reclassification of service fees (1)

     (5 )   (9 )   (4 )
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total Corporate and Other

     28     31     42  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Consolidated revenues

   $ 35,239   $ 34,507   $ 33,315  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
(1)
For presentation in the Consolidated Statements of Operations, service fees of the Corporate and Other segment are reclassified to operating costs and expenses.

       Summarized financial performance data for each of the Company's reportable segments for the years ended December 31 are as follows:

($ in millions)
   2014   2013   2012  

Net income

                    

Property-Liability

                    

Underwriting income

                    

Allstate Protection

   $ 1,887   $ 2,361   $ 1,253  

Discontinued Lines and Coverages

     (115 )   (143 )   (53 )
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total underwriting income

     1,772     2,218     1,200  

Net investment income

     1,301     1,375     1,326  

Income tax expense on operations

     (1,040 )   (1,177 )   (779 )

Realized capital gains and losses, after-tax

     357     339     221  

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

     37     (1 )   —  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Property-Liability net income available to common shareholders

     2,427     2,754     1,968  

Allstate Financial

    
 		    
 		    
 		  

Life and annuity premiums and contract charges

     2,157     2,352     2,241  

Net investment income

     2,131     2,538     2,647  

Periodic settlements and accruals on non-hedge derivative instruments

     (1 )   17     55  

Contract benefits and interest credited to contractholder funds

     (2,663 )   (3,171 )   (3,252 )

Operating costs and expenses and amortization of deferred policy acquisition costs

     (721 )   (895 )   (926 )

Restructuring and related charges

     (2 )   (7 )   —  

Income tax expense on operations

     (294 )   (246 )   (236 )
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Operating income

     607     588     529  

Realized capital gains and losses, after-tax

     94     46     (8 )

Valuation changes on embedded derivatives that are not hedged, after-tax

     (15 )   (16 )   82  

DAC and DSI amortization related to realized capital gains and losses and valuation changes on embedded derivatives that are not hedged, after-tax

     (3 )   (5 )   (42 )

DAC and DSI unlocking related to realized capital gains and losses, after-tax

     —     7     4  

Reclassification of periodic settlements and accruals on non-hedge derivative instruments, after-tax

     1     (11 )   (36 )

Loss on disposition of operations, after-tax

     (53 )   (514 )   12  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Allstate Financial net income available to common shareholders

     631     95     541  

Corporate and Other

    
 		    
 		    
 		  

Service fees (1)

     5     9     4  

Net investment income

     27     30     37  

Operating costs and expenses (1)

     (364 )   (627 )   (383 )

Income tax benefit on operations

     124     220     136  

Preferred stock dividends

     (104 )   (17 )   —  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Operating loss

     (312 )   (385 )   (206 )

Realized capital gains and losses, after-tax

     —     —     3  

Loss on extinguishment of debt, after-tax

     —     (319 )   —  

Postretirement benefits curtailment gain, after-tax           

     —     118     —  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Corporate and Other net loss available to common shareholders

     (312 )   (586 )   (203 )
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Consolidated net income available to common shareholders

   $ 2,746   $ 2,263   $ 2,306  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
(1)
For presentation in the Consolidated Statements of Operations, service fees of the Corporate and Other segment are reclassified to operating costs and expenses.

       Additional significant financial performance data for each of the Company's reportable segments for the years ended December 31 are as follows:

($ in millions)
   2014   2013   2012  

Amortization of DAC

                    

Property-Liability

   $ 3,875   $ 3,674   $ 3,483  

Allstate Financial

     260     328     401  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Consolidated

   $ 4,135   $ 4,002   $ 3,884  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Income tax expense

                    

Property-Liability

   $ 1,211   $ 1,357   $ 893  

Allstate Financial

     299     87     241  

Corporate and Other

     (124 )   (328 )   (134 )
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Consolidated

   $ 1,386   $ 1,116   $ 1,000  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

       Interest expense is primarily incurred in the Corporate and Other segment. Capital expenditures for long-lived assets are generally made in the Property-Liability segment. A portion of these long-lived assets are used by entities included in the Allstate Financial and Corporate and Other segments and, accordingly, are charged expenses in proportion to their use.

       Summarized data for total assets and investments for each of the Company's reportable segments as of December 31 are as follows:

($ in millions)
   2014   2013   2012  

Assets

                    

Property-Liability

   $ 55,767   $ 54,726   $ 52,201  

Allstate Financial

     49,248     65,707     72,368  

Corporate and Other

     3,518     3,087     2,378  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Consolidated

   $ 108,533   $ 123,520   $ 126,947  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Investments

                    

Property-Liability

   $ 39,083   $ 39,638   $ 38,215  

Allstate Financial

     38,809     39,105     56,999  

Corporate and Other

     3,221     2,412     2,064  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Consolidated

   $ 81,113   $ 81,155   $ 97,278  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

       The balances above reflect the elimination of related party investments between segments.