Variable Interest Entities

6 Months Ended

Jun. 30, 2021

Organization, Consolidation and Presentation of Financial Statements [Abstract]


Note 8			Variable Interest Entities

Consolidated VIEs, of which the Company is the primary beneficiary, primarily include Adirondack Insurance Exchange, a New York reciprocal insurer, and New Jersey Skylands Insurance Association, a New Jersey reciprocal insurer (together “Reciprocal Exchanges”). The Reciprocal Exchanges are insurance carriers organized as unincorporated associations. The Company does not own the equity of the Reciprocal Exchanges, which is owned by their respective policyholders.

The Company manages the business operations of the Reciprocal Exchanges and has the power to direct their activities that most significantly impact their economic performance. The Company receives a management fee for the services provided to the Reciprocal Exchanges. In addition, the Company holds

interests that provide capital to the Reciprocal Exchanges and would absorb any expected losses. The Company is therefore the primary beneficiary.

In the event of dissolution, policyholders would share any residual unassigned surplus but are not subject to assessment for any deficit in unassigned surplus of the Reciprocal Exchanges. The assets of the Reciprocal Exchanges can be used only to settle the obligations of the Reciprocal Exchanges and general creditors have no recourse to the Company. The results of operations of the Reciprocal Exchanges are included in the Company’s Allstate Protection segment and generated $45 million and $90 million of earned premiums in the three and six months ended June 30, 2021, respectively.


Assets and liabilities of Reciprocal Exchanges
($ in millions)	June 30, 2021
Assets

Fixed income securities	$	332
Short-term investments	23



Deferred policy acquisition costs	11
Premium installment and other receivables, net	44
Reinsurance recoverables, net	99
Other assets	99
Total assets	608
Liabilities
Reserve for property and casualty insurance claims and claims expense	211
Unearned premiums	194
Other liabilities and expenses	226
Total liabilities	$	631