ALL-PJ

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How ALL-PJ rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025

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Risk Factors’’, including the risk factors titled “ Widespread disruptive or destabilizing events may have an adverse effect on our business ” and “ Conditions in the global economy and capital markets could adversely affect the business and results of operations ”.
Tariffs Beginning on April 2, 2025, the U.S. government announced additional tariffs on goods imported to the U.S.
We regularly evaluate scenarios to understand the potential impact of tariffs on our businesses and incorporate estimates of the impact into our development of reserves for claims.
The evolving and uncertain global trade environment makes it difficult to predict the full effect on our business and it may take time for the impact of inflation to become evident.
The following factors may impact operations at levels beyond what we are currently observing: • Higher new and used vehicle pricing and replacement parts, increasing claims costs in Allstate Protection and Dealer Services The Allstate Corporation 35 • Increases in building material costs, driving increases in homeowners claim costs • Lack of availability of replacement parts from disruption in global trade broadly impacting all businesses • Fewer auto new issued applications due to lower new and used vehicle sales • Reduced demand in Dealer Services due to lower new vehicle sales • Lower premiums written from reduced U.S. retail sales in Protection Plans • Higher claims costs at Protection Plans • Bad debt and credit allowance exposure in all businesses • Adverse impacts on investment valuations and liquidity for market-based and performance-based investments This is not inclusive of all potential impacts and should not be treated as such.
Dispositions On April 1, 2025, we closed the sale of American Heritage Life Insurance Company and American Heritage Service Company, comprising our employer voluntary benefits business.
We recorded a gain on the sale of $888 million or $641 million, after-tax for the year ended December 31, 2025.
On July 1, 2025, we closed the sale of Direct General Life Insurance Company, NSM Sales Corporation and The Association Benefits Solution, LLC, comprising the group health business.
We recorded a gain on sale of $715 million or $499 million, after-tax for the year ended December 31, 2025.
See Note 4 of the consolidated financial statements for further information on the EVB and group health dispositions.
Financial Highlights ($ in millions) Consolidated net income applicable to common shareholders was $10.17 billion in 2025 compared to net income of $4.55 billion in 2024, primarily due to higher underwriting income and gains on dispositions.
Total revenue increased 5.6% to $67.69 billion in 2025 compared to 2024, primarily due to higher auto and homeowners insurance policies in force and premium rate increases.
Net investment income increased $357 million to $3.45 billion in 2025 compared to 2024, primarily due to higher market-based and performance-based investment results.
Financial Position Investments totaled $83.24 billion as of December 31, 2025, increasing from $72.61 billion as of December 31, 2024.
Allstate shareholders’ equity was $30.61 billion as of December 31, 2025 and $21.44 billion as of December 31, 2024.
The increase is primarily due to net income and an increase in unrealized net capital gains on investments in 2025, partially offset by common share repurchases and dividends to shareholders.
Book value per diluted common share (ratio of Allstate common shareholders’ equity to total common shares outstanding and dilutive potential common shares outstanding) was $108.45 as of December 31, 2025, an increase of 49.9% from $72.35 as of December 31, 2024.
Return on average Allstate common shareholders’ equity f or the twelve months ended December 31, 2025, was 42.3%, an increase of 16.5 points from 25.8% for the twelve months ended December 31, 2024. 36 www.allstate.com Property-Liability Operations Overview Property-Liability operations consist of two reportable segments: Allstate Protection and Run-off Property-Liability.
The impacts are calculated by taking the specific items noted below divided by Property-Liability premiums earned: • Effect of catastrophe losses on combined ratio: includes catastrophe losses and prior year reserve reestimates of catastrophe losses included in claims and claims expense • Effect of prior year reserve reestimates on combined ratio • Effect of restructuring and related charges on combined ratio • Effect of amortization of purchased intangibles on combined ratio • Effect of Run-off Property-Liability business on combined ratio: includes claims and claims expense, restructuring and related charges and operating costs and expenses in the Run-off Property-Liability segment Premium measures and statistics are used to analyze our premium trends and are calculated as follows: • PIF : policy counts are based on items rather than customers.
Lender-placed policies are excluded from policy counts. • New issued applications : item counts of automobile or homeowner insurance applications for insurance policies that were issued during the period, regardless of whether the customer was previously insured by another Allstate brand. • Average premium-gross written (“average premium”) : gross premiums written divided by issued item count.
Average premiums represent the appropriate policy term for each line, typically six months for an auto policy and twelve months for a homeowners policy. • Implemented rate changes : represents the impact in the locations (U.S. states, the District of Columbia or Canadian provinces) where rate changes were implemented during the period as a percentage of total prior year-end premiums written.
The Allstate Corporation 37 Underwriting results ($ in millions, except ratios) 2025 2024 2023 Premiums written $ 59,546 $ 55,926 $ 50,347 Premiums earned $ 57,682 $ 53,866 $ 48,427 Other revenue 2,051 1,895 1,545 Claims and claims expense (36,777) (39,118) (40,453) Amortization of DAC (7,003) (6,676) (6,070) Other costs and expenses (7,176) (6,630) (5,255) Restructuring and related charges (54) (51) (143) Amortization of purchased intangibles (183) (206) (235) Underwriting income (loss) $ 8,540 $ 3,080 $ (2,184) Catastrophe losses Catastrophe losses, excluding reserve reestimates $ 4,959 $ 5,334 $ 5,660 Catastrophe reserve reestimates (1) — (370) (24) Total catastrophe losses $ 4,959 $ 4,964 $ 5,636 Non-catastrophe reserve reestimates (1) $ (1,810) $ 62 $ 574 Prior year reserve reestimates (1) (1,810) (308) 550 GAAP operating ratios Loss ratio 63.8 72.6 83.5 Expense ratio (2) 21.4 21.7 21.0 Combined ratio 85.2 94.3 104.5 Effect of catastrophe losses on combined ratio 8.6 9.2 11.6 Effect of prior year reserve reestimates on combined ratio (3.1) (0.5) 1.2 Effect of catastrophe losses included in prior year reserve reestimates on combined ratio — (0.7) — Effect of restructuring and related charges on combined ratio 0.1 0.2 0.3 Effect of amortization of purchased intangibles on combined ratio 0.3 0.3 0.5 Effect of Run-off Property-Liability business on combined ratio 0.3 0.2 0.2 (1) Reserve releases are shown in parentheses.
(2) Other revenue is deducted from operating costs and expenses in the expense ratio calculation. 38 www.allstate.com Allstate Protection Segment Private passenger auto, homeowners, and other personal lines insurance products are offered to consumers through exclusive agents, independent agents and directly to the consumer through contact centers and online.
Underwriting results For the years ended December 31, ($ in millions) 2025 2024 2023 Premiums written $ 59,546 $ 55,926 $ 50,347 Premiums earned $ 57,682 $ 53,866 $ 48,427 Other revenue 2,051 1,895 1,545 Claims and claims expense (36,626) (39,050) (40,364) Amortization of DAC (7,003) (6,676) (6,070) Other costs and expenses (7,173) (6,625) (5,251) Restructuring and related charges (54) (51) (142) Amortization of purchased intangibles (183) (206) (235) Underwriting income (loss) $ 8,694 $ 3,153 $ (2,090) Catastrophe losses $ 4,959 $ 4,964 $ 5,636 Underwriting income was $8.69 billion in 2025 compared to $3.15 billion in 2024, primarily due to increased premiums earned and the benefit of prior year reserve releases, partially offset by higher expenses.
Underwriting income (loss) For the years ended December 31, ($ in millions) 2025 2024 2023 Auto $ 5,724 $ 1,810 $ (1,109) Homeowners 2,393 1,319 (803) Other personal lines (1) 190 67 (39) Commercial lines 137 (240) (265) Other business lines (2) 239 185 115 Answer Financial 11 12 11 Total $ 8,694 $ 3,153 $ (2,090) (1) Includes renters, condominium, landlord, boat, umbrella, manufactured home, scheduled personal property and valuable item protection products.
(2) Other business lines represents commissions earned from brokered property and casualty and life and annuity products, and lender-placed products.
Change in underwriting results from 2024 to 2025 ($ in millions) The Allstate Corporation 39 Change in underwriting results from 2023 to 2024 ($ in millions) Premium measures and statistics include PIF, new issued applications and average premiums.
The portion of premiums written applicable to the unexpired term of the policies is recorded as unearned premiums on the Consolidated Statements of Financial Position.
Premiums written For the years ended December 31, ($ in millions) 2025 2024 2023 Auto $ 38,649 $ 37,296 $ 33,958 Homeowners 16,565 14,416 12,584 Other personal lines 3,265 3,068 2,519 Commercial lines 402 495 720 Other business lines 665 651 566 Total premiums written $ 59,546 $ 55,926 $ 50,347 Premiums earned For the years ended December 31, ($ in millions) 2025 2024 2023 Auto $ 38,090 $ 36,475 $ 32,940 Homeowners 15,363 13,360 11,739 Other personal lines 3,134 2,823 2,387 Commercial lines 419 609 811 Other business lines 676 599 550 Total premiums earned $ 57,682 $ 53,866 $ 48,427 Policies in force (In thousands) 2025 2024 2023 Auto 25,504 24,936 25,283 Homeowners 7,697 7,511 7,338 Other personal lines 4,898 4,870 4,863 Commercial lines 176 213 284 Total 38,275 37,530 37,768 Auto insurance premiums written increased 3.6% or $1.35 billion in 2025 compared to 2024, primarily due to the following factors: • Rate increases that moderated from the prior year.
In 2025, rate increases of 3.5% were implemented resulting in a total insurance premium impact of 2.6% • PIF increased 2.3% or 568 thousand to 25,504 thousand as of December 31, 2025 compared to December 31, 2024 • Increased new issued applications in all channels • In states where we are achieving acceptable returns, we will focus on implementing rates to keep pace with increasing costs and explore opportunities for rate investments towards growth 40 www.allstate.com Auto premium measures and statistics 2025 2024 2023 2025 vs. 2024 New issued applications (in thousands) Allstate Protection by channel Exclusive agency 3,129 2,579 2,294 21.3 % Independent agency 2,786 2,276 1,989 22.4 Direct 2,987 2,247 1,632 32.9 Total new issued applications 8,902 7,102 5,915 25.3 Allstate brand average premium $ 850 $ 843 $ 757 0.8 % Homeowners insurance premiums written increased 14.9% or $2.15 billion in 2025 compared to 2024, primarily due to the following factors: • Higher Allstate brand average premiums resulting from rate increases and inflation in insured home replacement costs, combined with policies in force growth • In 2025, rate increases of 7.6% were implemented resulting in a total estimated insurance premium impact of 5.1%, excluding the impact of changes in insured home replacement costs • PIF increased 2.5% or 186 thousand to 7,697 thousand as of December 31, 2025 compared to December 31, 2024, primarily in the direct and exclusive agency channels, partially offset by a reduction in the independent agency channel • Increased new issued applications in the exclusive agency and direct channels In Florida, we are not writing new homeowners business and are substantially complete with the non-renewal of certain policies.
Homeowners premium measures and statistics 2025 2024 2023 2025 vs. 2024 New issued applications (in thousands) Allstate Protection by channel Exclusive agency 982 946 800 3.8 % Independent agency 172 226 232 (23.9) Direct 233 133 79 75.2 Total new issued applications 1,387 1,305 1,111 6.3 Allstate brand average premium $ 2,263 $ 2,021 $ 1,812 12.0 % Other personal lines premiums written increased 6.4% or $197 million in 2025 compared to 2024, primarily due to increases in landlords and personal umbrella policies, partially offset by a decrease in auto assigned risk policies purchased from other carriers.
We are not writing new condominium business in Florida.
Commercial lines premiums written decreased 18.8% or $93 million in 2025 compared to 2024, due to the strategic decision for the Allstate brand to stop writing new business and non-renew certain policies.
We are offering comprehensive commercial products, including brokered solutions, to customers through our exclusive agency, independent agency and direct channels.
Other business lines premiums written increased 2.2% or $14 million in 2025 compared to 2024, due to growth in the lender-placed homeowners business, partially offset by lower lender-placed auto premiums.
The Allstate Corporation 41 Combined ratios For the years ended December 31, Loss ratio Expense ratio (3) Combined ratio 2025 2024 2023 2025 2024 2023 2025 2024 2023 Auto 63.4 72.7 82.8 21.6 22.3 20.6 85.0 95.0 103.4 Homeowners 62.8 68.1 85.4 21.6 22.0 21.4 84.4 90.1 106.8 Other personal lines (1) 77.4 85.9 82.0 16.5 11.7 19.6 93.9 97.6 101.6 Commercial lines 40.3 111.5 105.8 27.0 27.9 26.9 67.3 139.4 132.7 Other business lines (2) 34.7 55.8 48.4 29.9 13.3 30.7 64.6 69.1 79.1 Total 63.5 72.4 83.3 21.4 21.7 21.0 84.9 94.1 104.3 Impact of amortization of purchased intangibles 0.3 0.3 0.5 0.3 0.3 0.5 Impact of restructuring and related charges 0.1 0.2 0.3 0.1 0.2 0.3 (1) Expense ratio includes other revenue of $185 million, $223 million and $57 million in 2025, 2024 and 2023, respectively, for fees on auto assigned risk policies.
(2) Expense ratio includes profit-sharing commissions on lender-placed business, which increased in 2025 as losses declined and decreased in 2024 due to higher losses.
(3) Other revenue is deducted from operating costs and expenses in the expense ratio calculation.
Loss ratios For the years ended December 31, Loss ratio Effect of catastrophe losses Effect of prior year reserve reestimates Effect of catastrophe losses included in prior year reserve reestimates 2025 2024 2023 2025 2024 2023 2025 2024 2023 2025 2024 2023 Auto 63.4 72.7 82.8 1.4 2.2 2.1 (4.9) (1.0) 0.7 (0.1) (0.1) (0.2) Homeowners 62.8 68.1 85.4 26.6 27.8 38.6 (0.1) (2.9) 0.8 0.3 (2.4) 0.3 Other personal lines 77.4 85.9 82.0 9.0 12.8 14.6 4.1 7.7 0.8 (0.4) (0.2) (0.8) Commercial lines 40.3 111.5 105.8 — 2.8 3.7 (35.3) 27.3 10.4 (0.2) (0.8) 1.0 Other business lines 34.7 55.8 48.4 9.5 11.9 7.5 (6.7) — 2.2 — — — Total 63.5 72.4 83.3 8.6 9.2 11.6 (3.4) (0.7) 1.0 — (0.7) — Auto loss ratio decreased 9.3 points in 2025 compared to 2024 driven by increased earned premiums, lower claim frequency and the benefit of prior year non-catastrophe reserve releases.
Estimated report year 2025 incurred claim severity for Allstate brand increased compared to report year 2024 for major coverages due to higher repair costs, mix of total loss frequency, medical consumption and attorney representation.

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Risk Factors’’, including the risk factors titled “ A large-scale pandemic, the occurrence of terrorism, military actions, political and social unrest or other disruptive or destabilizing events may have an adverse effect on our business ” and “ Conditions in the global economy and capital markets could adversely affect the business and results of operations ”.
This is not inclusive of all potential impacts and should not be treated as such.
Within the MD&A, we have included further disclosures related to macroeconomic impacts on our 2024 results.
Dispositions On August 13, 2024, we entered into a share purchase agreement with StanCorp Financial Group, Inc. to sell American Heritage Life Insurance Company and American Heritage Service Company, comprising our employer voluntary benefits business for approximately $2.0 billion in cash.
The employer voluntary benefits business is reported in the Allstate Health and Benefits segment, and beginning in the third quarter of 2024, the assets and liabilities of the business were classified as held for sale.
The transaction is expected to close in the first half of 2025, subject to regulatory approvals and other customary closing conditions.
On January 30, 2025, Allstate entered into an agreement with Nationwide Life Insurance Company to sell Direct General Life Insurance Company, NSM Sales Corporation and The Association Benefits Solution, LLC, comprising the group health business for approximately $1.25 billion in cash, adjusted for the closing balance sheet.
The group health business is reported in the Allstate Health and Benefits segment, and beginning in the first quarter of 2025, the assets The Allstate Corporation 35 and liabilities of the business will be classified as held for sale.
The transaction is expected to close during 2025, subject to regulatory approvals and other customary closing conditions.
The individual health business will either be retained or divested.
The transaction prices less costs to sell exceeds the carrying value of the net assets of both transactions, resulting in an expected gain that will be recognized at closing of each transaction.
The ultimate amount of the anticipated gain on the sales will be impacted by purchase price adjustments associated with certain pre-close transactions, changes in the carrying value of net assets, changes in accumulated other comprehensive income and the related tax effects.
See Note 4 of the consolidated financial statements for further information on the employer voluntary benefits disposition. 2024 Operating priorities and results Allstate continued to focus on its operating priorities while successfully executing a comprehensive plan to improve auto insurance profitability and making substantial progress in advancing Transformative Growth.
The table below summarizes the results of our 2024 Operating Priorities. 2024 Operating priorities (1) Grow Customer Base Achieve 2024 Plan Growth Objectives Consolidated policies in force reached 208 million, a 7.2% increase from prior year.
Allstate Protection policies in force decreased by 0.6% compared to the prior year, as continued growth in the homeowners insurance business was more than offset by declines in the auto insurance business.
Protection Services policies in force and revenue increased 9.3% and 16.7%, respectively, primarily due to growth at Allstate Protection Plans through expanding distribution relationships and protection offerings.
Achieve Target Economic Returns on Capital Achieve 2024 Plan Returns Return on average Allstate common shareholders’ equity was 25.8% in 2024.
Total return on the $72.61 billion investment portfolio was 3.8% in 2024.
Proactive portfolio management repositioned the fixed income portfolio into longer duration and higher-yielding assets to increase income.
The Property-Liability combined ratio of 94.3 for the full year decreased compared to the prior year primarily reflecting successful execution of the Company’s comprehensive auto insurance profitability plan and lower catastrophe losses.
Execute Transformative Growth Improve Customer Value Enterprise Net Promoter Score, which measures how likely customers are to recommend Allstate, finished below the prior year, reflecting the impact of substantial price increases necessary to offset higher loss costs.
Improved over 25 million customer interactions.
Expand Customer Access Increased auto insurance new issued applications in all channels.
National General continues to build a strong competitive position in independent agent distribution with successful expansion on non-standard auto sales and roll-out of our auto and home Custom360 product now available in 30 states.
Increase Sophistication and Investment in Customer Acquisition Increased advertising and reduced underwriting restrictions as higher average premium outpaced increased loss costs per policy.
Deploy New Technology Ecosystems Continued roll-out of Affordable, Simple and Connected auto insurance offering now available in 31 states for auto, 28 states for renters and Affordable, Simple and Connected homeowners insurance offering now available in 4 states.
Continued to build a digital enterprise by expanding utilization of machine-based learning and artificial intelligence.
Drive Organizational Transformation Streamlined the organization by reducing bureaucracy, risk aversion and organizational silos.
(1) 2025 operating priorities will remain mostly consistent with the 2024 priorities. 36 www.allstate.com Consolidated net income (loss) applicable to common shareholders ($ in millions) Consolidated net income applicable to common shareholders was $4.55 billion in 2024 compared to net loss of $316 million in 2023, primarily due to improved underwriting results from increased earned premium and improved loss trends.
For the twelve months ended December 31, 2024, return on average Allstate common shareholders’ equity was 25.8% compared to (2.0)% for the twelve months ended December 31, 2023.
Total revenue ($ in millions) Total revenue increased 12.3% to $64.11 billion in 2024 compared to 2023, primarily due to premium rate increases and higher net investment income.
Net investment income ($ in millions) Net investment income increased $614 million to $3.09 billion in 2024 compared to 2023, primarily due to higher market-based investment results.
Market-based results continue to benefit from portfolio repositioning into higher yielding fixed income securities and higher investment balances.
Financial highlights Investments totaled $72.61 billion as of December 31, 2024, increasing from $66.68 billion as of December 31, 2023.
Allstate shareholders’ equity was $21.44 billion as of December 31, 2024 and $17.77 billion as of December 31, 2023.
The increase is primarily due to net income, partially offset by dividends to shareholders.
Book value per diluted common share (ratio of Allstate common shareholders’ equity to total common shares outstanding and dilutive potential common shares outstanding) was $72.35 as of December 31, 2024, an increase of 21.8% from $59.39 as of December 31, 2023.
Return on average Allstate common shareholders’ equity For the twelve months ended December 31, 2024, return on Allstate common shareholders’ equity was 25.8%, an increase of 27.8 points from (2.0)% for the twelve months ended December 31, 2023, primarily due to net income applicable to common shareholders.
The Allstate Corporation 37 Summarized financial results Years Ended December 31, ($ in millions) 2024 2023 2022 Revenues Property and casualty insurance premiums $ 56,388 $ 50,670 $ 45,904 Accident and health insurance premiums and contract charges 1,921 1,846 1,832 Other revenue 2,930 2,400 2,344 Net investment income 3,092 2,478 2,403 Net gains (losses) on investments and derivatives (225) (300) (1,072) Total revenues 64,106 57,094 51,411 Costs and expenses Property and casualty insurance claims and claims expense (39,735) (41,070) (37,264) Accident, health and other policy benefits (1,241) (1,071) (1,042) Amortization of deferred policy acquisition costs (8,039) (7,278) (6,634) Operating, restructuring and interest expenses (9,087) (7,685) (7,832) Pension and other postretirement remeasurement gains (losses) 37 (9) (116) Amortization of purchased intangibles (280) (329) (353) Total costs and expenses (58,345) (57,442) (53,241) Income (loss) from operations before income tax expense 5,761 (348) (1,830) Income tax (expense) benefit (1,162) 135 488 Net income (loss) 4,599 (213) (1,342) Less: Net loss attributable to noncontrolling interest (68) (25) (53) Net income (loss) attributable to Allstate 4,667 (188) (1,289) Preferred stock dividends (117) (128) (105) Net income (loss) applicable to common shareholders $ 4,550 $ (316) $ (1,394) Segment highlights Allstate Protection underwriting income was $3.15 billion in 2024 compared to an underwriting loss of $2.09 billion in 2023, primarily due to increased premiums earned, favorable reserve reestimates and lower losses, partially offset by higher advertising costs.
Premiums written increased 11.1% to $55.93 billion in 2024 compared to $50.35 billion in 2023, reflecting higher premiums in auto and homeowners insurance.

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Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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