SafeAuto On June 1, 2021, the Company announced an agreement to acquire SafeAuto, a non-standard auto insurance carrier focused on providing state-minimum private-passenger auto insurance with coverage options in 28 states, for $270 million in cash. The transaction is expected to close in 2021, subject to regulatory approval and customary closing conditions.

National General On January 4, 2021, the Company completed the acquisition of National General Holdings Corp. (“National General”), an insurance holding company serving customers predominantly through independent agents for property and casualty and accident and health products.

National General provides personal and commercial automobile, homeowners, umbrella, recreational vehicle, motorcycle, lender-placed, health and other niche insurance products. This acquisition will increase the Company’s market share in personal property-liability and enhance its independent agent distribution platform.


Assets and liabilities recognized in the National General acquisition (1)
($ in millions)	January 4, 2021
Assets
Investments	$	4,958
Cash	400
Premiums and other receivables, net	1,545
Deferred acquisition costs (value of business acquired)	317
Reinsurance recoverables, net	1,219
Intangible assets	1,199
Other assets	736
Goodwill (2)	970
Total assets	11,344

Liabilities
Reserve for property and casualty insurance claims and claims expense	2,765
Reserve for future policy benefits	186
Unearned premiums	2,245
Reinsurance payable	364
Debt (3)	593
Deferred tax liabilities	179
Other liabilities	701
Total liabilities	$	7,033

(1)The amounts reflect preliminary allocation of assets acquired and liabilities assumed. The acquisition date fair values of assets and liabilities, including insurance reserves and intangible assets, as well as the related estimated useful lives of intangibles, are preliminary estimates and are subject to revisions within one year of acquisition date.

(2)$608 million, $21 million and $341 million of goodwill were allocated to the Allstate Protection, Protection Services and Allstate Health and Benefits segments, respectively, and is non-deductible for income tax purposes. Goodwill is primarily attributable to expected synergies and future growth opportunities.

(3)Subsequent to the acquisition, the Company repaid $100 million of 7.625% Subordinated Notes and $72 million of Subordinated Debentures on February 3, 2021 and March 15, 2021, respectively. The Company had principal balance remaining of $350 million 6.750% Senior Notes due 2024 as of June 30, 2021, with a fair value adjustment of $67 million.


Intangible assets by type
($ in millions)	January 4, 2021
Distribution and customer relationships	$	795
Trade names	102
Licenses	97
Technology	205
Total	$	1,199

Intangible assets (reported in other assets in the Condensed Consolidated Statements of Financial Position) consist of capitalized costs, primarily of the

estimated fair value of distribution, and customer relationships, trade names and licenses, technology and other assets. The estimated useful lives of these assets generally range from 3 to 10 years.

The estimated fair value of distribution and customer relationship intangible assets was determined using an income approach that considered cash flows and profits expected to be generated by the acquired relationships, a weighted-average cost of capital discount rate reflecting the relative risk of achieving the anticipated cash flows, profits, the time value of money, and other relevant inputs. Technology

and trade names were valued using estimated useful lives and market licensing rates discounted at a weighted-average cost of capital. Licenses are primarily insurance licenses which were valued using the median value of market transactions executed over an extended observation period.

Licenses are considered to have an indefinite useful life and are reviewed for impairment at least annually or more frequently if circumstances arise that indicate an impairment may have occurred. An impairment is recognized if the carrying amount of the asset exceeds its estimated fair value.

Intangible assets are carried at cost less accumulated amortization. Amortization expense is primarily calculated using accelerated amortization methods. Amortization expense on intangible assets was $76 million and $99 million for the three and six months ended June 30, 2021, respectively, and the Company expects to recognize $152 million of amortization expense for the remainder of 2021.


Estimated amortization expense of National General intangible assets for the next five years and thereafter
($ in millions)
2022	$	218
2023	185
2024	135
2025	103
2026	70
Thereafter	140
Total amortization	$	851

Value of business acquired (reported in DAC in the Condensed Consolidated Statements of Financial Position) recognized in connection with the acquisition of National General represents the value of future profits expected to be earned over the lives of the contracts acquired determined using a weighted-average cost of capital discount and other relevant assumptions. These costs are amortized over the policy term of the contracts in force at the acquisition date, generally over six or twelve months. The value of business acquired asset recognized in connection with the National General acquisition totaled $317 million; the most significant portion relates to insurance contracts in the Allstate Protection segment. Amortization expense of the value of business acquired was $98 million and $232 million for the three and six months ended June 30, 2021, respectively, and the Company expects to record an additional $85 million in 2021.

Other fair value adjustments included an increase in reserves of $62 million, a $13 million reduction to investments that were not held at fair value, and a net increase in current and deferred tax liabilities of $101 million.

Preferred stock Subsequent to the acquisition, the Company redeemed all outstanding shares of 7.50% Non-Cumulative Preferred Stock, Series A, par value $0.01 per share, all outstanding Depositary shares, representing 1/40th of a Share of 7.50% Non-Cumulative Preferred Stock, Series B, and the underlying shares of 7.50% Non-Cumulative Preferred Stock, Series B, par value $0.01 per share, and all outstanding shares of Fixed/Floating Rate Non-Cumulative Convertible Preferred Stock, Series D, par value $0.01 per share for a total redemption payment of $250 million.

Subsequent event On July 15, 2021, the Company redeemed all outstanding Depositary shares, representing 1/40th of a share of National General’s 7.50% Noncumulative Preferred Stock, Series C, and the underlying shares of 7.50% Noncumulative Preferred Stock, Series C, par value $0.01 per share for a total redemption payment of $200 million.

Transactions costs (reported in operating costs and expenses in the Condensed Consolidated Statements of Operations) of $22 million related to the acquisition were expensed as incurred in the Corporate and Other segment.

Dispositions

On January 26, 2021, the Company entered into a Stock Purchase Agreement with Everlake US Holdings Company (formerly Antelope US Holdings Company), an affiliate of an investment fund associated with The Blackstone Group Inc. to sell Allstate Life Insurance Company and certain affiliates for approximately $2.8 billion in cash.

On March 29, 2021, the Company entered into a Stock Purchase Agreement with Wilton Reassurance Company to sell Allstate Life Insurance Company of New York for $220 million in cash.

A loss on disposition of $4 billion, after-tax, was recorded in the first quarter of 2021 related to these transactions. The loss on disposition is related to the run-off annuity segment, whose returns have been low. The ultimate amount of the loss on sale will be impacted by purchase price adjustments associated with certain pre-close transactions specified in the stock purchase agreements, changes in statutory capital and surplus prior to the closing date and the closing date equity of the sold entities determined under GAAP, excluding unrealized gains and losses. The transactions are expected to close in 2021, subject to regulatory approvals and other customary closing conditions.

Beginning in the first quarter of 2021, the assets and liabilities of the business were reclassified as held for sale and results are presented as discontinued operations. This change was applied on a retrospective basis.


Financial results from discontinued operations
	Three months ended June 30,				Six months ended June 30,
($ in millions)	2021		2020		2021		2020
Revenues
Life premiums and contract charges	$	336	$	341	$	676	$	676
Net investment income	385		189		824		364
Realized capital gains (losses)	110		264		189		(36)
Total revenues	831		794		1,689		1,004

Costs and expenses
Life contract benefits	386		374		796		734
Interest credited to contractholder funds	159		191		244		314
Amortization of DAC	21		5		57		41
Operating costs and expenses	51		57		106		118
Restructuring and related charges	4		1		23		2
Total costs and expenses	621		628		1,226		1,209

Amortization of deferred gain on reinsurance	2		1		4		2

Income (loss) from discontinued operations before income tax expense	212		167		467		(203)

Income tax expense (benefit)	43		23		93		(59)

Income (loss) from discontinued operations, net of tax	169		144		374		(144)

Loss on disposition of operations	281		—		(4,137)		—
Income tax expense (benefit)	254		—		(166)		—
Loss on disposition, net of tax	27		—		(3,971)		—

Income (loss) from discontinued operations, net of tax	$	196	$	144	$	(3,597)	$	(144)


Major classes of assets and liabilities to be transferred in transactions
($ in millions)	June 30, 2021		December 31, 2020
Assets
Investments
Fixed income securities, at fair value (amortized cost, net $23,968 and $21,417)	$	25,948	$	23,789
Equity securities, at fair value (cost $1,050 and $1,113)	1,519		1,542
Mortgage loans, net	2,855		3,329
Limited partnership interests	1,746		3,046
Short-term, at fair value (amortized cost $901 and $993)	901		993
Other, net	923		1,998
Total investments	33,892		34,697
Cash	158		66
Deferred policy acquisitions costs	978		925
Reinsurance recoverables, net	1,956		2,005
Accrued investment income	242		229
Other assets	378		865
Separate accounts	3,486		3,344
Assets held for sale	41,090		42,131
Less: loss accrual	4,121		—
Total assets held for sale	$	36,969	$	42,131

Liabilities
Reserve for future policy benefits	$	11,633	$	11,740
Contractholder funds	16,025		16,356

Deferred income taxes	1,028		973
Other liabilities and accrued expenses	603		912
Separate accounts	3,486		3,344
Total liabilities held for sale	$	32,775	$	33,325


Cash flows from discontinued operations
	Six months ended June 30,
($ in millions)	2021		2020
Net cash provided by operating activities from discontinued operations	$	66	$	113
Net cash provided by investing activities from discontinued operations	317		169