Acquisitions and Dispositions

9 Months Ended

Sep. 30, 2022

Business Combination and Asset Acquisition [Abstract]


Note 3			Acquisitions and Dispositions

Acquisitions

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.


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 September 30, 2022, the Company had principal balance remaining of $350 million 6.750% Senior Notes due in 2024, with a fair value adjustment of $31 million.

SafeAuto On October 1, 2021, the Company completed the acquisition of Safe Auto Insurance Group, Inc. (“SafeAuto”), a non-standard auto insurance carrier focused on providing state-minimum private-passenger auto insurance direct to consumers with coverage options in 28 states for $267 million in cash.

Dispositions

Life and annuity business On October 1, 2021, the Company closed the sale of Allstate Life Insurance Company of New York (“ALNY”) to Wilton Reassurance Company for $400 million. On November 1, 2021, the Company closed the sale of Allstate Life Insurance Company (“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 and prior periods, the assets and liabilities of the businesses were reclassified as held for sale and results were presented as discontinued operations.


Financial results from discontinued operations
	Three months ended September 30,		Nine months ended September 30,
($ in millions)	2021		2021
Revenues
Life premiums and contract charges	$	331	$	1,007
Net investment income	427		1,251
Net gains (losses) on investments and derivatives	4		193
Total revenues	762		2,451

Costs and expenses
Life contract benefits	411		1,207
Interest credited to contractholder funds	127		371
Amortization of DAC	27		84
Operating costs and expenses	45		151
Restructuring and related charges	7		30
Total costs and expenses	617		1,843

Amortization of deferred gain on reinsurance	1		5

Income from discontinued operations before income tax expense	146		613

Income tax expense	38		131

Income from discontinued operations, net of tax	108		482

Loss on disposition of operations	89		(4,048)
Income tax benefit	(128)		(294)
Loss on disposition of operations, net of tax	217		(3,754)

Income (loss) from discontinued operations, net of tax	$	325	$	(3,272)


Cash flows from discontinued operations
	Nine months ended September 30,
($ in millions)	2021
Net cash provided by operating activities from discontinued operations	$	888
Net cash used in investing activities from discontinued operations	(405)