Reportable Segments

6 Months Ended

Jun. 30, 2020

Segment Reporting [Abstract]

Reportable Segments

Note 4 Reportable 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”), Shelter-in-Place Payback expense, amortization of DAC, operating costs and expenses, amortization of purchased intangibles and restructuring and related charges 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
($ in millions)	Three months ended June 30,						Six months ended June 30,
	2020			2019			2020			2019
Property-Liability
Insurance premiums
Auto	$	6,173		$	6,035		$	12,327		$	11,965
Homeowners	2,053			1,958			4,091			3,893
Other personal lines	478			462			949			921
Commercial lines	159			226			377			409
Allstate Protection	8,863			8,681			17,744			17,188
Discontinued Lines and Coverages	—			—			—			—
Total Property-Liability insurance premiums	8,863			8,681			17,744			17,188
Other revenue	182			190			363			366
Net investment income	178			471			380			762
Realized capital gains (losses)	382			256			279			753
Total Property-Liability	9,605			9,598			18,766			19,069
Service Businesses
Consumer product protection plans	219			153			425			298
Roadside assistance	44			63			95			126
Finance and insurance products	97			89			194			176
Intersegment premiums and service fees (1)	35			33			73			66
Other revenue	51			48			103			95
Net investment income	11			10			21			19
Realized capital gains (losses)	19			9			(5		)	17
Total Service Businesses	476			405			906			797
Allstate Life
Traditional life insurance premiums	164			156			317			310
Accident and health insurance premiums	1			1			1			1
Interest-sensitive life insurance contract charges	174			176			354			359
Other revenue	24			33			56			60
Net investment income	123			125			251			252
Realized capital gains (losses)	19			1			(12		)	(4		)
Total Allstate Life	505			492			967			978
Allstate Benefits
Traditional life insurance premiums	12			10			21			19
Accident and health insurance premiums	225			246			469			496
Interest-sensitive life insurance contract charges	26			28			55			57
Net investment income	20			21			40			40
Realized capital gains (losses)	11			2			(3		)	6
Total Allstate Benefits	294			307			582			618
Allstate Annuities
Fixed annuities contract charges	2			4			4			7
Net investment income	66			296			113			486
Realized capital gains (losses)	245			48			(24		)	204
Total Allstate Annuities	313			348			93			697
Corporate and Other
Net investment income	11			19			25			31
Realized capital gains (losses)	28			8			7			10
Total Corporate and Other	39			27			32			41
Intersegment eliminations (1)	(35		)	(33		)	(73		)	(66		)
Consolidated revenues	$	11,197		$	11,144		$	21,273		$	22,134

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

Reportable segments financial performance
	Three months ended June 30,						Six months ended June 30,
($ in millions)	2020			2019			2020			2019
Property-Liability
Allstate Protection (1)	$	907		$	370		$	2,255		$	1,073
Discontinued Lines and Coverages	(3		)	(3		)	(6		)	(6		)
Total underwriting income	904			367			2,249			1,067
Net investment income	178			471			380			762
Income tax expense on operations	(209		)	(179		)	(512		)	(381		)
Realized capital gains (losses), after-tax	299			204			217			597
Property-Liability net income applicable to common shareholders	1,172			863			2,334			2,045
Service Businesses
Adjusted net income	38			16			75			27
Realized capital gains (losses), after-tax	15			6			(4		)	13
Amortization of purchased intangibles, after-tax	(21		)	(25		)	(42		)	(49		)
Impairment of purchased intangibles, after-tax	—			(43		)	—			(43		)
Service Businesses net income (loss) applicable to common shareholders	32			(46		)	29			(52		)
Allstate Life
Adjusted net income	72			68			152			141
Realized capital gains (losses), after-tax	16			—			(9		)	(4		)
Valuation changes on embedded derivatives not hedged, after-tax	(35		)	—			(23		)	—
DAC and DSI amortization related to realized capital gains and losses, after-tax	11			(1		)	8			(3		)
Allstate Life net income applicable to common shareholders	64			67			128			134
Allstate Benefits
Adjusted net income	5			37			29			68
Realized capital gains (losses), after-tax	7			2			(3		)	5
Allstate Benefits net income applicable to common shareholders	12			39			26			73
Allstate Annuities
Adjusted net (loss) income	(111		)	52			(250		)	27
Realized capital gains (losses), after-tax	194			37			(19		)	161
Valuation changes on embedded derivatives not hedged, after-tax	(6		)	(2		)	(4		)	(5		)
Gain on disposition of operations, after-tax	1			1			2			2
Allstate Annuities net income (loss) applicable to common shareholders	78			88			(271		)	185
Corporate and Other
Adjusted net loss	(99		)	(98		)	(206		)	(201		)
Realized capital gains (losses), after-tax	23			7			6			8
Pension and other postretirement remeasurement gains (losses), after-tax	(58		)	(99		)	(309		)	(110		)
Corporate and Other net loss applicable to common shareholders	(134		)	(190		)	(509		)	(303		)
Consolidated net income applicable to common shareholders	$	1,224		$	821		$	1,737		$	2,082

⁽¹⁾ 

Due to the significant declines in the number of auto accidents caused by mandated stay-at-home orders, other pandemic containment actions and reduced economic activity, auto and commercial lines customers received a Shelter-in-Place Payback of $948 million with $210 million recognized in first quarter 2020 and $738 million recognized in second quarter 2020.