Reserve for Property-Liability Insurance Claims and Claims Expense (Tables)

12 Months Ended

Dec. 31, 2019

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)	2019			2018			2017
Balance as of January 1	$	27,423		$	26,325		$	25,250
Less recoverables ⁽¹⁾	(7,155		)	(6,471		)	(6,184		)
Net balance as of January 1	20,268			19,854			19,066
SquareTrade acquisition as of January 3, 2017	—			—			17
Incurred claims and claims expense related to:
Current year	24,106			23,033			22,350
Prior years	(130		)	(255		)	(503		)
Total incurred	23,976			22,778			21,847
Claims and claims expense paid related to:
Current year	(15,160		)	(14,877		)	(14,112		)
Prior years	(8,284		)	(7,487		)	(6,964		)
Total paid	(23,444		)	(22,364		)	(21,076		)
Net balance as of December 31	20,800			20,268			19,854
Plus recoverables	6,912			7,155			6,471
Balance as of December 31	$	27,712		$	27,423		$	26,325

⁽¹⁾Recoverables comprises reinsurance and indemnification recoverables. See Note 10 for further details.



Reconciliation of total claims and claims expense incurred and paid by coverage	December 31, 2019
($ in millions)	Incurred			Paid
Allstate Protection
Auto insurance - liability coverage	$	9,142		$	(8,419	)
Auto insurance - physical damage coverage	5,576			(5,570		)
Homeowners insurance	4,625			(4,616		)
Total auto and homeowners insurance	19,343			(18,605		)
Other personal lines	1,024			(1,059		)
Commercial lines	648			(404		)
Service Businesses	297			(311		)
Discontinued Lines and Coverages	91			(121		)
Unallocated loss adjustment expenses (“ULAE”)	2,687			(2,585		)
Claims incurred and paid from before 2015	(97		)	(444		)
Other	(17		)	85
Total	$	23,976		$	(23,444	)

Incurred and paid claims and claims expense

The information about incurred and paid claims development for the 2015 to 2019 years, and the average annual percentage payout of incurred claims by age as of December 31, 2019, 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, 2019
	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Accident year	2015		2016		2017		2018		2019
2015	$	8,763	$	8,733	$	8,677	$	8,617	$	8,578	$	(39	)	$	519	2,383,853
2016	—		9,030		8,833		8,732		8,683		(49		)	988		2,399,890
2017	—		—		8,457		8,389		8,305		(84		)	1,777		2,214,254
2018	—		—		—		8,727		8,708		(19		)	3,093		2,169,753
2019	—		—		—		—		9,333					5,838		2,108,919
							Total		$	43,607	$	(191	)
Reconciliation to total prior year reserve reestimates recognized by line
Prior year reserve reestimates for pre-2015 accident years											(56		)
Prior year reserve reestimates for ULAE											14
Other											(1		)
Total prior year reserve reestimates											$	(234	)

	Cumulative paid claims and allocated claims adjustment expenses, net of recoverables
	For the years ended December 31,
	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Accident year	2015		2016		2017		2018		2019
2015	$	3,524	$	5,837	$	6,883	$	7,565	$	8,059
2016	—		3,485		5,768		6,849		7,695
2017	—		—		3,149		5,330		6,528
2018	—		—		—		3,229		5,615
2019	—		—		—		—		3,495
							Total		$	31,392
All outstanding liabilities before 2015, net of recoverables									1,274
Liabilities for claims and claim adjustment expenses, net of recoverables									$	13,489

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, 2019
	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Accident year	2015		2016		2017		2018		2019
2015	$	3,558	$	3,611	$	3,553	$	3,537	$	3,520	$	(17	)	$	36	721,328
2016	—		3,959		3,993		3,955		3,951		(4		)	77		813,728
2017	—		—		4,475		4,617		4,612		(5		)	177		907,218
2018	—		—		—		4,747		4,851		104			340		807,012
2019	—		—		—		—		4,547					1,233		721,434
							Total		$	21,481	$	78
Reconciliation to total prior year reserve reestimates recognized by line
Prior year reserve reestimates for pre-2015 accident years											(36		)
Prior year reserve reestimates for ULAE											23
Other											—
Total prior year reserve reestimates											$	65

	Cumulative paid claims and allocated claims adjustment expenses, net of recoverables
	For the years ended December 31,
	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Accident year	2015		2016		2017		2018		2019
2015	$	2,586	$	3,296	$	3,399	$	3,458	$	3,484
2016	—		2,947		3,678		3,809		3,874
2017	—		—		3,227		4,246		4,435
2018	—		—		—		3,489		4,511
2019	—		—		—		—		3,314
							Total		$	19,618
All outstanding liabilities before 2015, net of recoverables									126
Liabilities for claims and claim adjustment expenses, net of recoverables									$	1,989

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, 2019
	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Accident year	2015		2016		2017		2018		2019
2015	$	4,653	$	4,681	$	4,669	$	4,660	$	4,656	$	(4	)	$	2		4,390,288
2016	—		5,125		5,052		5,025		5,020		(5		)	5			4,431,735
2017	—		—		5,119		5,037		5,025		(12		)	(2		)	4,236,640
2018	—		—		—		5,216		5,154		(62		)	17			4,306,335
2019	—		—		—		—		5,659					244			4,312,306
							Total		$	25,514	$	(83	)
Reconciliation to total prior year reserve reestimates recognized by line
Prior year reserve reestimates for pre-2015 accident years											(4		)
Prior year reserve reestimates for ULAE											(2		)
Other											—
Total prior year reserve reestimates											$	(89	)

	Cumulative paid claims and allocated claims adjustment expenses, net of recoverables
	For the years ended December 31,
	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Accident year	2015		2016		2017		2018		2019
2015	$	4,507	$	4,672	$	4,658	$	4,655	$	4,654
2016	—		4,887		5,031		5,019		5,016
2017	—		—		4,845		5,036		5,027
2018	—		—		—		4,968		5,137
2019	—		—		—		—		5,414
							Total		$	25,248
All outstanding liabilities before 2015, net of recoverables									7
Liabilities for claims and claim adjustment expenses, net of recoverables									$	273

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, 2019
	1 year		2 years		3 years		4 years		5 years
Homeowners insurance	74.5	%	18.9	%	3.1	%	1.4	%	0.7	%



Average annual percentage payout of incurred claims by age, net of recoverables, as of December 31, 2019
	1 year		2 years		3 years		4 years		5 years
Auto insurance – liability coverage	40.0	%	27.2	%	12.9	%	8.2	%	4.9	%



Average annual percentage payout of incurred claims by age, net of recoverables, as of December 31, 2019
	1 year		2 years		3 years		4 years		5 years
Auto insurance – physical damage coverage	97.0	%	3.0	%	(0.2	)%	—	%	—	%

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, 2019
Net outstanding liabilities
Allstate Protection
Auto insurance - liability coverage	$	13,489
Auto insurance - physical damage coverage	273
Homeowners insurance	1,989
Other personal lines	1,326
Commercial lines	1,010
Service Businesses	36
Discontinued Lines and Coverages ⁽¹⁾	1,286
ULAE	1,391
Net reserve for property and casualty insurance claims and claims expense	20,800

Recoverables
Allstate Protection
Auto insurance - liability coverage	5,891
Auto insurance - physical damage coverage	3
Homeowners insurance	214
Other personal lines	160
Commercial lines	130
Service Businesses	13
Discontinued Lines and Coverages	452
ULAE	49
Total recoverables	6,912
Gross reserve for property and casualty insurance claims and claims expense	$	27,712

⁽¹⁾

Discontinued Lines and Coverages includes business in run-off with most of the claims related to accident years more than 30 years ago. IBNR reserves represent $660 million of the total reserves as of December 31, 2019.