Reserve for Property and Casualty Insurance Claims and Claims Expense (Tables)

12 Months Ended

Dec. 31, 2021

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)	2021		2020		2019
Balance as of January 1	$	27,610	$	27,712	$	27,423
Less recoverables (1)	(7,033)		(6,912)		(7,155)
Net balance as of January 1	20,577		20,800		20,268
National General acquisition as of January 4, 2021	1,797		—		—
SafeAuto acquisition as of October 1, 2021	134		—		—
Incurred claims and claims expense related to:
Current year	29,196		22,437		24,106
Prior years	122		(436)		(130)
Total incurred	29,318		22,001		23,976
Claims and claims expense paid related to:
Current year	(18,438)		(14,245)		(15,160)
Prior years	(9,807)		(7,979)		(8,284)
Total paid	(28,245)		(22,224)		(23,444)
Net balance as of December 31	23,581		20,577		20,800
Plus recoverables	9,479		7,033		6,912
Balance as of December 31	$	33,060	$	27,610	$	27,712

(1) Recoverables comprises reinsurance and indemnification recoverables. See Note 11 for further details.

Reconciliation of total claims and claims expense incurred and paid by coverage
	December 31, 2021
($ in millions)	Incurred		Paid
Allstate Protection
Auto insurance - liability coverage	$	10,830	$	(9,420)
Auto insurance - physical damage coverage	7,170		(7,150)
Homeowners insurance	6,371		(6,045)
Total auto and homeowners insurance	24,371		(22,615)
Other personal lines	1,144		(1,163)
Commercial lines	767		(581)
Protection Services	376		(373)
Run-off Property-Liability	109		(97)
Unallocated loss adjustment expenses (“ULAE”)	2,569		(2,726)
Claims incurred and paid from before 2017	(69)		(622)
Other (1)	51		(68)
Total	$	29,318	$	(28,245)

(1)Paid and incurred includes amounts primarily related to the acquisition of SafeAuto. Additionally, incurred includes the amortization of the fair value adjustment related to the acquisition of National General.

Prior year reserve reestimates included in claims and claims expense (1)
	Twelve months ended December 31,
	Non-catastrophe losses						Catastrophe losses						Total
($ in millions)	2021		2020		2019		2021(2)(3)		2020 (4)		2019		2021		2020		2019
Auto	$	178	$	(63)	$	(306)	$	(29)	$	(44)	$	(17)	$	149	$	(107)	$	(323)
Homeowners	12		(17)		(1)		(165)		(422)		66		(153)		(439)		65
Other personal lines	(96)		(27)		8		(11)		(39)		—		(107)		(66)		8
Commercial lines	116		34		18		3		2		(1)		119		36		17
Run-off Property-Liability (5)	116		141		105		—		—		—		116		141		105
Protection Services	(2)		(1)		(2)		—		—		—		(2)		(1)		(2)
Total prior year reserve reestimates	$	324	$	67	$	(178)	$	(202)	$	(503)	$	48	$	122	$	(436)	$	(130)

(1)Favorable reserve reestimates are shown in parentheses.

(2)Includes approximately $240 million of estimated recoveries related to Nationwide Aggregate Reinsurance Program cover for aggregate catastrophe losses occurring between April 1, 2020 and December 31, 2020, which primarily impacted homeowners reestimates.

(3)Includes approximately $110 million favorable subrogation settlements arising from the Woolsey wildfire, which primarily impacted homeowners reestimates.

(4)2020 includes approximately $495 million of favorable reserve reestimates related to the PG&E Corporation and Southern California Edison subrogation settlements, which primarily impacted homeowners.

(5)The Company’s 2021 annual reserve review, using established industry and actuarial best practices, resulted in unfavorable reestimates of $111 million.

Short-duration insurance contracts, claims development

The information about incurred and paid claims development for the 2017 to 2021 years, and the average annual percentage payout of incurred claims by age as of December 31, 2021, 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, 2021
	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Accident year	2017		2018		2019		2020		2021
2017	$	9,424	$	9,341	$	9,286	$	9,332	$	9,392	$	60	$	581	2,519,909
2018	—		9,817		9,786		9,825		9,862		37		1,140		2,499,583
2019	—		—		10,557		10,503		10,750		247		2,080		2,632,610
2020	—		—		—		8,773		8,770		(3)		2,901		1,891,726
2021	—		—		—		—		10,489				6,860		2,150,167
							Total		$	49,263	$	341
Reconciliation to total prior year reserve reestimates recognized by line
Prior year reserve reestimates for pre-2017 accident years											(51)
Prior year reserve reestimates for ULAE											29
Other											(18)
Total prior year reserve reestimates											$	301
	Cumulative paid claims and allocated claims adjustment expenses, net of recoverables
	For the years ended December 31,
	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Accident year	2017		2018		2019		2020		2021
2017	$	3,554	$	6,058	$	7,386	$	8,241	$	8,811
2018	—		3,672		6,417		7,801		8,722
2019	—		—		3,985		7,096		8,670
2020	—		—		—		3,143		5,869
2021	—		—		—		—		3,629
							Total		$	35,701
All outstanding liabilities before 2017, net of recoverables									1,393
Liabilities for claims and claim adjustment expenses, net of recoverables									$	14,955

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, 2021
	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Accident year	2017		2018		2019		2020		2021
2017	$	5,738	$	5,627	$	5,612	$	5,610	$	5,613	$	3	$	4	4,634,171
2018	—		5,788		5,704		5,659		5,652		(7)		5		4,686,395
2019	—		—		6,269		6,188		6,150		(38)		(2)		4,860,355
2020	—		—		—		5,508		5,419		(89)		(8)		4,008,243
2021	—		—		—		—		7,301				429		4,407,369
							Total		$	30,135	$	(131)
Reconciliation to total prior year reserve reestimates recognized by line
Prior year reserve reestimates for pre-2017 accident years											(5)
Prior year reserve reestimates for ULAE											(14)
Other											(2)
Total prior year reserve reestimates											$	(152)
	Cumulative paid claims and allocated claims adjustment expenses, net of recoverables
	For the years ended December 31,
	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Accident year	2017		2018		2019		2020		2021
2017	$	5,398	$	5,625	$	5,614	$	5,609	$	5,609
2018	—		5,475		5,693		5,650		5,647
2019	—		—		5,959		6,158		6,152
2020	—		—		—		5,140		5,427
2021	—		—		—		—		6,872
							Total		$	29,707
All outstanding liabilities before 2017, net of recoverables									7
Liabilities for claims and claim adjustment expenses, net of recoverables									$	435

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, 2021
	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Accident year	2017		2018		2019		2020		2021
2017	$	4,929	$	5,036	$	5,037	$	4,805	$	4,816	$	11	$	60	977,319
2018	—		5,155		5,262		4,958		4,829		(129)		82		898,425
2019	—		—		4,864		4,924		4,931		7		153		868,577
2020	—		—		—		5,792		5,839		47		280		982,690
2021	—		—		—		—		6,435				1,884		908,890
							Total		$	26,850	$	(64)
Reconciliation to total prior year reserve reestimates recognized by line
Prior year reserve reestimates for pre-2017 accident years											(13)
Prior year reserve reestimates for ULAE											(70)
Other											(6)
Total prior year reserve reestimates											$	(153)
	Cumulative paid claims and allocated claims adjustment expenses, net of recoverables
	For the years ended December 31,
	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Accident year	2017		2018		2019		2020		2021
2017	$	3,521	$	4,634	$	4,835	$	4,734	$	4,756
2018	—		3,775		4,883		4,759		4,747
2019	—		—		3,535		4,587		4,778
2020	—		—		—		4,266		5,559
2021	—		—		—		—		4,551
							Total		$	24,391
All outstanding liabilities before 2017, net of recoverables									115
Liabilities for claims and claim adjustment expenses, net of recoverables									$	2,574

The information about incurred and paid claims development for the 2017 to 2021 years, as of December 31, 2021, is presented as required supplementary information.

Group and individual accident and health

($ 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,										As of December 31, 2021
	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Accident year	2017		2018		2019		2020		2021
2017	$	211	$	186	$	183	$	183	$	183	$	—	302,100
2018	—		235		205		203		203		—		269,095
2019	—		—		257		239		242		—		306,998
2020	—		—		—		297		293		9		410,031
2021	—		—		—		—		424		152		465,525
							Total		$	1,345
	Cumulative paid claims and allocated claims adjustment expenses, net of recoverables
	For the years ended December 31,
	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Accident year	2017		2018		2019		2020		2021
2017	$	105	$	178	$	182	$	183	$	183
2018	—		126		201		203		203
2019	—		—		158		234		242
2020	—		—		—		184		284
2021	—		—		—		—		272
							Total		$	1,184
All outstanding liabilities before 2017, net of recoverables									—
Liabilities for claims and claim adjustment expenses, net of recoverables									$	161

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, 2021
	1 year		2 years		3 years		4 years		5 years
Auto insurance – liability coverage	38.8	%	28.1	%	13.2	%	8.4	%	5.1	%

Average annual percentage payout of incurred claims by age, net of recoverables, as of December 31, 2021
	1 year		2 years		3 years		4 years		5 years
Auto insurance – physical damage coverage	96.2	%	3.9	%	(0.3)	%	(0.1)	%	—	%

Average annual percentage payout of incurred claims by age, net of recoverables, as of December 31, 2021
	1 year		2 years		3 years		4 years		5 years
Homeowners insurance	73.7	%	20.7	%	2.8	%	0.8	%	0.7	%

Average annual percentage payout of incurred claims by age, net of recoverables, as of December 31, 2021
	1 year		2 years		3 years		4 years		5 years
Group and individual accident and health	62.6	%	35.1	%	1.9	%	0.4	%	—	%

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, 2021
Net outstanding liabilities
Allstate Protection
Auto insurance - liability coverage	$	14,955
Auto insurance - physical damage coverage	435
Homeowners insurance	2,574
Other personal lines	1,316
Commercial lines	1,316
Protection Services	33
Run-off Property-Liability (1)	1,342
ULAE	1,430
Other (2)	180
Net reserve for property and casualty insurance claims and claims expense	23,581
Recoverables
Allstate Protection
Auto insurance - liability coverage	7,247
Auto insurance - physical damage coverage	81
Homeowners insurance	1,023
Other personal lines	173
Commercial lines	256
Protection Services	9
Run-off Property-Liability	494
ULAE	196
Total recoverables	9,479
Gross reserve for property and casualty insurance claims and claims expense	$	33,060

(1)Run-off Property-Liability includes business in run-off with most of the claims related to accident years more than 30 years ago. IBNR reserves represent $733 million of the total reserves as of December 31, 2021.

(2)Includes amounts primarily related to the acquisition of SafeAuto and the unamortized fair value adjustment related to the acquisition of National General.

Reconciliation of the net incurred and paid claims development tables above to the reserve for future policy benefits
($ in millions)	As of December 31, 2021
Net outstanding liabilities
Group and individual accident and health short-duration contracts	$	161
Other accident and health short-duration contracts	28
Long duration accident and health insurance	617
Long duration traditional life insurance and other	313
Net reserve for future policy benefits	1,119
Recoverables
Group and individual accident and health short-duration contracts	38
Other accident and health short-duration contracts	—
Insurance lines other than short-duration	116
Gross reserve for future policy benefits	$	1,273