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Reporting Segments
 12 Months Ended
Dec. 31, 2019
Segment Reporting [Abstract]  
Reporting Segments
Note 4
Reportable Segments
The Company’s chief operating decision maker reviews financial performance and makes decisions about the allocation of resources for the seven reportable segments. These segments are described below and align with the Company’s key product and service offerings.
Allstate Protection principally offers private passenger auto and homeowners insurance in the United States and Canada, with earned premiums accounting for 78.0% of Allstate’s 2019 consolidated revenues. Allstate Protection primarily operates in the U.S. (all 50 states and the District of Columbia (“D.C.”)) and Canada. For 2019, the top U.S. geographic locations for premiums earned by the Allstate Protection segment were Texas, California, New York and Florida. No other jurisdiction accounted for more than 5% of premium earned for Allstate Protection. Revenues from external customers generated outside the United States were $1.37 billion, $1.20 billion and $1.13 billion in 2019, 2018 and 2017, respectively.
Discontinued Lines and Coverages includes property and casualty insurance coverage that primarily relates to policies written during the 1960s through the mid-1980s. Our exposure to asbestos, environmental and other discontinued lines claims arises principally from direct excess commercial insurance, assumed reinsurance coverage, direct primary commercial insurance and other businesses in run-off.
Service Businesses comprise Allstate Protection Plans, Allstate Dealer Services, Allstate Roadside Services, Arity and Allstate Identity Protection. Service Businesses offer consumer product protection plans, finance and insurance products (including vehicle service contracts, guaranteed asset protection waivers, road hazard tire and wheel and paintless dent repair protection), roadside assistance, device and mobile data collection services and analytic solutions using automotive telematics information and identity protection. The Service Businesses primarily operate in the U.S., with certain businesses offering services in Europe, Canada, and Puerto Rico. Revenues from
external customers generated outside the United States relate to consumer product protection plans sold primarily in the European Union and were $95 million, $61 million and $35 million in 2019, 2018 and 2017, respectively.
Allstate Life offers traditional, interest-sensitive and variable life insurance products. Allstate Life primarily operates in the U.S. (all 50 states and D.C.). For 2019, the top geographic locations for statutory direct life insurance premiums were New York, California, Texas, Florida and Illinois. No other jurisdiction accounted for more than 5% of statutory direct life insurance premiums.
Allstate Benefits offers voluntary benefits products, including life, accident, critical illness, short-term disability and other health products. Allstate Benefits primarily operates in the U.S. (all 50 states and D.C.) and Canada. For 2019, the top geographic locations for statutory direct accident and health insurance premiums were Florida, Texas, North Carolina, New York and California. No other jurisdiction accounted for more than 5% of statutory direct accident and health insurance premiums. Revenues from external customers generated outside the United States relate to voluntary accident and health insurance sold in Canada and were not material.
Allstate Annuities consists primarily of deferred fixed annuities and immediate annuities (including standard and sub-standard structured settlements). This segment is in run-off.
Corporate and Other comprises holding company activities and certain non-insurance operations, including expenses associated with strategic initiatives.
Allstate Protection and Discontinued Lines and Coverages segments comprise Property-Liability. The Company does not allocate 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, Service Businesses, Allstate Life,
Allstate Benefits, Allstate Annuities, and Corporate and Other levels for decision-making purposes.
The accounting policies of the reportable segments are the same as those described in Note 2. The effects of intersegment transactions are eliminated in the consolidated results. For segment results, services provided by Service Businesses to Allstate Protection are not eliminated as management considers those transactions in assessing the results of the respective segments.
Measuring segment profit or loss
The measure of segment profit or loss used in evaluating performance is underwriting income for the Allstate Protection and Discontinued Lines and Coverages segments and adjusted net income for the Service Businesses, Allstate Life, Allstate Benefits, Allstate Annuities, and Corporate and Other segments. A reconciliation of these measures to net income applicable to common shareholders is provided below.
Underwriting income is calculated as premiums earned and other revenue, less claims and claims expenses (“losses”), amortization of DAC, operating costs and expenses, restructuring and related charges and amortization or impairment of purchased intangibles as determined using GAAP.
Adjusted net income is net income applicable 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 adjusted net income
•  Pension and other postretirement remeasurement gains and losses, after-tax
• Valuation changes on embedded derivatives 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 not hedged, after-tax
•  Business combination expenses and the amortization or impairment of purchased intangibles, after-tax
• Gain (loss) on disposition of operations, after-tax
• 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

Reportable segments revenue information
 
 
For the years ended December 31,

($ in millions)
 
2019
 
2018
 
2017
Property-Liability
 
 
 
 
 
 
Insurance premiums
 
 
 
 
 
 
Auto
 
$
24,188

 
$
22,970

 
$
21,878

Homeowners
 
7,912

 
7,517

 
7,310

Other personal lines
 
1,861

 
1,808

 
1,750

Commercial lines
 
882

 
655

 
495

Allstate Protection
 
34,843

 
32,950

 
31,433

Discontinued Lines and Coverages
 
—

 
—

 
—

Total Property-Liability insurance premiums
 
34,843

 
32,950

 
31,433

Other revenue
 
741

 
738

 
703

Net investment income
 
1,533

 
1,464

 
1,478

Realized capital gains and losses
 
1,470

 
(639
)
 
401

Total Property-Liability
 
38,587

 
34,513

 
34,015

 
 
 
 
 
 
 
Service Businesses
 
 
 
 
 
 
Consumer product protection plans
 
633

 
503

 
295

Roadside assistance
 
238

 
263

 
268

Finance and insurance products
 
362

 
332

 
304

Intersegment premiums and service fees (1)
 
154

 
122

 
110

Other revenue
 
188

 
82

 
66

Net investment income
 
42

 
27

 
16

Realized capital gains and losses
 
32

 
(11
)
 
—

Total Service Businesses
 
1,649

 
1,318

 
1,059

 
 
 
 
 
 
 
Allstate Life
 
 
 
 
 
 
Traditional life insurance premiums
 
630

 
600

 
568

Accident and health insurance premiums
 
2

 
2

 
2

Interest-sensitive life insurance contract charges
 
711

 
713

 
710

Other revenue
 
125

 
119

 
114

Net investment income
 
514

 
505

 
489

Realized capital gains and losses
 
1

 
(14
)
 
5

Total Allstate Life
 
1,983

 
1,925

 
1,888

 
 
 
 
 
 
 
Allstate Benefits
 
 
 
 
 
 
Traditional life insurance premiums
 
43

 
44

 
42

Accident and health insurance premiums
 
988

 
980

 
928

Interest-sensitive life insurance contract charges
 
114

 
111

 
114

Net investment income
 
83

 
77

 
72

Realized capital gains and losses
 
12

 
(9
)
 
1

Total Allstate Benefits
 
1,240

 
1,203

 
1,157

 
 
 
 
 
 
 
Allstate Annuities
 
 
 
 
 
 
Fixed annuities contract charges
 
13

 
15

 
14

Net investment income
 
917

 
1,096

 
1,305

Realized capital gains and losses
 
346

 
(166
)
 
44

Total Allstate Annuities
 
1,276

 
945

 
1,363

 
 
 
 
 
 
 
Corporate and Other
 
 
 
 
 
 
Net investment income
 
70

 
71

 
41

Realized capital gains and losses
 
24

 
(38
)
 
(6
)
Total Corporate and Other
 
94

 
33

 
35

Intersegment eliminations (1)
 
(154
)
 
(122
)
 
(110
)
Consolidated revenues
 
$
44,675

 
$
39,815

 
$
39,407


(1) Intersegment insurance premiums and service fees are primarily related to Arity and Allstate Roadside Services and are eliminated in the consolidated financial statements.

Reportable segments financial performance
 
 
For the years ended December 31,
($ in millions)
 
2019
 
2018
 
2017
Property-Liability
 
 
 
 
 
 
Allstate Protection
 
$
2,912

 
$
2,343

 
$
2,304

Discontinued Lines and Coverages
 
(108
)
 
(90
)
 
(99
)
Total underwriting income
 
2,804

 
2,253

 
2,205

Net investment income
 
1,533

 
1,464

 
1,478

Income tax expense on operations
 
(887
)
 
(747
)
 
(1,187
)
Realized capital gains and losses, after-tax
 
1,161

 
(500
)
 
272

Gain on disposition of operations, after-tax
 
—

 
—

 
9

Tax Legislation (expense) benefit
 
—

 
(5
)
 
36

Property-Liability net income applicable to common shareholders
 
4,611

 
2,465

 
2,813

 
 
 
 
 
 
 
Service Businesses
 
 
 
 
 
 
Adjusted net income (loss)
 
38

 
8

 
(54
)
Realized capital gains and losses, after-tax
 
25

 
(9
)
 
—

Amortization of purchased intangibles, after-tax
 
(97
)
 
(74
)
 
(60
)
Impairment of purchased intangibles, after-tax
 
(43
)
 
—

 
—

Tax Legislation (expense) benefit
 
—

 
(4
)
 
137

Service Businesses net (loss) income applicable to common shareholders
 
(77
)
 
(79
)
 
23

 
 
 
 
 
 
 
Allstate Life
 
 
 
 
 
 
Adjusted net income
 
261

 
295

 
259

Realized capital gains and losses, after-tax
 
—

 
(11
)
 
2

Valuation changes on embedded derivatives not hedged, after-tax
 
(9
)
 
—

 
—

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

 
(5
)
 
(8
)
 
(10
)
Tax Legislation (expense) benefit
 
—

 
(16
)
 
338

Allstate Life net income applicable to common shareholders
 
247

 
260

 
589

 
 
 
 
 
 
 
Allstate Benefits
 
 
 
 
 
 
Adjusted net income
 
115

 
124

 
100

Realized capital gains and losses, after-tax
 
9

 
(7
)
 
—

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

 
1

 
—

Tax Legislation benefit
 
—

 
—

 
54

Allstate Benefits net income applicable to common shareholders
 
124

 
118

 
154

 
 
 
 
 
 
 
Allstate Annuities
 
 
 
 
 
 
Adjusted net income
 
10

 
131

 
205

Realized capital gains and losses, after-tax
 
274

 
(131
)
 
28

Valuation changes on embedded derivatives not hedged, after-tax
 
(6
)
 
3

 
—

Gain on disposition of operations, after-tax
 
4

 
4

 
4

Tax Legislation benefit
 
—

 
69

 
182

Allstate Annuities net income applicable to common shareholders
 
282

 
76

 
419

 
 
 
 
 
 
 
Corporate and Other
 
 
 
 
 
 
Adjusted net loss
 
(438
)
 
(406
)
 
(320
)
Realized capital gains and losses, after-tax
 
19

 
(30
)
 
(4
)
Pension and other postretirement remeasurement gains and losses, after-tax
 
(90
)
 
(370
)
 
141

Goodwill impairment
 
—

 
—

 
(125
)
Business combination expenses, after-tax
 
—

 
(7
)
 
(14
)
Tax Legislation expense
 
—

 
(15
)
 
(238
)
Consolidated and Other net loss applicable to common shareholders
 
(509
)
 
(828
)
 
(560
)
 
 
 
 
 
 
 
Consolidated net income applicable to common shareholders
 
$
4,678

 
$
2,012

 
$
3,438



Additional significant financial performance data
 
 
 
 
 
 
 
 
For the years ended December 31,
($ in millions)
 
2019
 
2018
 
2017
Amortization of DAC
 
 
 
 
 
 
Property-Liability
 
$
4,649

 
$
4,475

 
$
4,205

Service Businesses
 
543

 
463

 
296

Allstate Life
 
173

 
132

 
134

Allstate Benefits
 
161

 
145

 
142

Allstate Annuities
 
7

 
7

 
7

Consolidated
 
$
5,533

 
$
5,222

 
$
4,784

 
 
 
 
 
 
 
Income tax expense (benefit)
 
 
 
 
 
 
Property-Liability
 
$
1,196

 
$
613

 
$
1,285

Service Businesses
 
(18
)
 
(19
)
 
(194
)
Allstate Life
 
53

 
75

 
(226
)
Allstate Benefits
 
35

 
32

 
1

Allstate Annuities
 
73

 
(66
)
 
(58
)
Corporate and Other
 
(97
)
 
(167
)
 
187

Consolidated
 
$
1,242

 
$
468

 
$
995


Interest expense is primarily incurred in the Corporate and Other segment. Capital expenditures for long-lived assets are generally made in Property-Liability as the Company does not allocate assets to the Allstate Protection and Discontinued Lines and Coverages segments. A portion of these long-lived assets are used by entities included in the Service Businesses, Allstate Life, Allstate Benefits, Allstate Annuities and Corporate and Other segments and, accordingly, are charged to expenses in proportion to their use.
Reportable segment total assets and investments (1)
 
 
 
 
 
 
As of December 31,
($ in millions)
 
2019
 
2018
Assets
 
 
 
 
Property-Liability
 
$
67,243

 
$
61,947

Service Businesses
 
5,746

 
5,473

Allstate Life
 
14,771

 
13,613

Allstate Benefits
 
2,915

 
2,822

Allstate Annuities
 
26,914

 
26,798

Corporate and Other
 
2,361

 
1,596

Consolidated
 
$
119,950

 
$
112,249

 
 
 
 
 
Investments
 
 
 
 
Property-Liability
 
$
48,414

 
$
43,634

Service Businesses
 
1,544

 
1,203

Allstate Life
 
11,914

 
10,809

Allstate Benefits
 
1,941

 
1,809

Allstate Annuities
 
22,221

 
22,336

Corporate and Other
 
2,328

 
1,469

Consolidated
 
$
88,362

 
$
81,260


(1) 
The balances reflect the elimination of related party investments between segments.