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 increased 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	$	4,962
Cash	400
Premiums and other receivables, net	1,539
Deferred acquisition costs (value of business acquired)	317
Reinsurance recoverables, net	1,212
Intangible assets	1,199
Other assets	734
Goodwill (2)	1,038
Total assets	11,401

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	363
Debt (3)	593
Deferred tax liabilities	162
Other liabilities	776
Total liabilities	$	7,090

(1)The amounts reflect allocation of assets acquired and liabilities assumed.

(2)$675 million, $20 million and $343 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. As of December 31, 2021, the Company had principal balance remaining of $350 million 6.750% Senior Notes due 2024, with a fair value adjustment of $45 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 Consolidated Statements of Financial Position) consist of capitalized costs, primarily of the estimated fair value of distribution and customer relationships, trade names, licenses and technology 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 $251 million in 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 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, all of which was expensed in 2021. The most significant portion relates to insurance contracts in the Allstate Protection segment.

Other fair value adjustments included an increase in reserves of $62 million, a $9 million reduction to investments that were not held at fair value, and a net increase in current and deferred tax liabilities of $153 million.

Preferred stock On February 2, 2021, 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.

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 Consolidated Statements of Operations) of $22 million related to the acquisition were expensed as incurred in the Corporate and Other segment.

SafeAuto On June 1, 2021, the Company announced an agreement to acquire Safe Auto Insurance Group, Inc. (“SafeAuto”), a non-standard auto insurance carrier focused on providing state-minimum private-passenger auto insurance with coverage options in 28 states. On October 1, 2021, the Company completed the acquisition of SafeAuto for $262 million in cash. Starting in the fourth quarter of 2021, the Allstate Protection segment includes SafeAuto.

In connection with the acquisition, the Company recorded goodwill of $79 million, intangible assets of $30 million and value of business acquired of $7 million. The intangible assets include $24 million and $6 million related to acquired customer relationships and licenses, respectively.

On December 17, 2021, subsequent to the acquisition, the Company redeemed the outstanding principal of SafeAuto’s trust preferred securities for $13 million.

Dispositions

Life and annuity business On January 26, 2021, the Company entered into a Stock Purchase Agreement (the “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 ALIC and certain affiliates.

On March 29, 2021, the Company entered into a Stock Purchase Agreement with Wilton Reassurance Company to sell ALNY.

On October 1, 2021, the Company closed the sale of ALNY to Wilton Reassurance Company for $400 million. On November 1, 2021, the Company closed the sale of ALIC and certain affiliates to entities managed by Blackstone for total proceeds of $4 billion, including a pre-close dividend of $1.25 billion paid by ALIC.

In 2021, the loss on disposition was $4.09 billion, after-tax, and reflects 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 AOCI derecognized related to the dispositions.

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
	For the years ended December 31,
($ in millions)	2021		2020		2019
Revenues
Life premiums and contract charges	$	1,109	$	1,350	$	1,356
Net investment income	1,336		1,262		1,431
Net gains (losses) on investments and derivatives	195		269		347
Total revenues	2,640		2,881		3,134

Costs and expenses
Life contract benefits	1,315		1,726		1,438
Interest credited to contractholder funds	414		605		606
Amortization of DAC	87		153		180
Operating costs and expenses	163		238		268
Restructuring and related charges	31		7		2
Total costs and expenses	2,010		2,729		2,494

Amortization of deferred gain on reinsurance	4		4		6

Income (loss) from discontinued operations before income tax expense	634		156		646

Income tax expense	136		9		126

Income from discontinued operations, net of tax	498		147		520

Loss on disposition of operations	(4,315)		—		—
Income tax benefit	(224)		—		—
Loss on disposition of operations, net of tax	(4,091)		—		—

(Loss) income from discontinued operations, net of tax	$	(3,593)	$	147	$	520


Major classes of assets and liabilities disposed in transactions
($ in millions)	Closing (1)		December 31, 2020
Assets
Investments
Fixed income securities, at fair value	$	26,425	$	23,789
Equity securities, at fair value	11		1,542
Mortgage loans, net	2,662		3,329
Limited partnership interests	1,624		3,046
Short-term, at fair value	643		993
Other investments, net	690		1,998
Total investments	$	32,055	$	34,697
Cash	1,081		66
Deferred policy acquisitions costs	996		925
Reinsurance recoverables, net	1,979		2,005
Accrued investment income	240		229
Other assets	536		865
Separate accounts	3,465		3,344


Total assets	$	40,352	$	42,131

Liabilities
Reserve for future policy benefits	$	11,573	$	11,740
Contractholder funds	15,880		16,356
Deferred income taxes	834		973
Other liabilities and accrued expenses	452		912
Separate accounts	3,465		3,344
Total liabilities	$	32,204	$	33,325

(1)The Company closed the sales of Allstate Life Insurance Company of New York and Allstate Life Insurance Company and certain affiliates on October 1, 2021 and November 1, 2021, respectively.


Cash flows from discontinued operations
	For the years ended December 31,
($ in millions)	2021		2020		2019
Net cash provided by operating activities from discontinued operations	$	634	$	311	$	346
Net cash provided by investing activities from discontinued operations	984		330		448