ALLSTATE CORP

Allstate Protection Segment

Underwriting loss was $142 million in the second quarter of 2024 and underwriting income was $761 million in the first six months of 2024 compared to underwriting loss of $2.09 billion and $3.09 billion in the second quarter and first six months of 2023, respectively, due to increased premiums earned and lower catastrophe losses, partially offset by higher advertising costs. As auto profitability improves, we are increasing advertising and removing underwriting restrictions to support growth.

Change in underwriting results from prior year period - three months ended

($ in millions)

Change in underwriting results from prior year period - six months ended

($ in millions)

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(1)Other business lines represents commissions earned and other costs and expenses for Ivantage, non-proprietary life and annuity products, and lender-placed products.

Second Quarter 2024 Form 10-Q 51

Premium measures and statistics include PIF, new issued applications, average premiums and renewal ratio to analyze our premium trends. Premiums written is the amount of premiums charged for policies issued during a reporting period. Premiums are considered earned and are included in the financial results on a pro-rata basis over the policy period. The portion of premiums written applicable to the unexpired term of the policies is recorded as unearned premiums on our Condensed Consolidated Statements of Financial Position.

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Auto insurance premiums written increased 12.3% or $1.02 billion in the second quarter of 2024 compared to the second quarter of 2023 and 12.2% or $2.02 billion in the first six months of 2024 compared to the first six months of 2023, primarily due to the following factors:

•Increased average premiums driven by rate increases. In the six months ended June 30, 2024:

–Rate increases of 7.9% were taken for Allstate brand in 42 locations, resulting in total estimated Allstate brand insurance premium impact of 3.4%

–Rate increases of 11.2% were taken for National General brand in 38 locations, resulting in total estimated National General brand insurance premium impact of 6.1%

•We expect to continue to pursue targeted rate increases for both Allstate and National General brands in states currently not achieving acceptable

returns to offset increases in loss costs throughout 2024

•PIF decreased 1.6% or 396 thousand to 25,124 thousand as of June 30, 2024 compared to June 30, 2023

•Renewal ratio increased 0.2 points and 0.3 points in the second quarter and the first six months of 2024, respectively, compared to the second quarter and first six months of 2023

•Increased new issued applications driven by growth in all channels

•We have removed underwriting restrictions in areas that represent the majority of Allstate brand countrywide premiums, which is expected to increase premiums written and PIF

Homeowners insurance premiums written increased 13.7% or $464 million in the second quarter of 2024 compared to the second quarter of 2023 and increased 13.6% or $804 million in the first six months of 2024 compared to the first six months of 2023, primarily due to the following factors:

•Higher Allstate brand average premiums from implemented rate increases, combined with policies in force growth

•In the six months ended June 30, 2024, rate increases of 11.6% were taken for Allstate brand in 25 locations, resulting in total estimated Allstate brand insurance premium impact of 4.5%

•National General policy growth may be negatively impacted in future quarters as we improve certain underwriting margins to targeted levels through underwriting and rate actions. In the six months ended June 30, 2024, rate increases of 14.4% were taken for National General brand in 22 locations,

resulting in total estimated National General brand insurance premium impact of 3.9%

•Increased new issued applications driven by growth in the exclusive agency and direct channels

•Policy growth is being reduced in states and lines of business that are underperforming. We are no longer writing new homeowners business in California, New Jersey and Florida, and are non-renewing certain policies in Florida, which have and will continue to negatively impact premiums

•We may not be able to grow in certain states without regulatory or legislative reforms that enable customers to be provided coverage at appropriate risk adjusted returns

•The impact of the ongoing rate increases has and may continue to have an adverse effect on the renewal ratio, premiums and future PIF growth

Second Quarter 2024 Form 10-Q 53

Other personal lines premiums written increased 25.2% or $170 million in the second quarter of 2024 compared to the second quarter of 2023 and increased 23.1% or $282 million in the first six months of 2024 compared to the first six months of 2023 primarily due to increases in involuntary auto policies purchased from other carriers for National General and landlords policies for Allstate brand. We are no longer writing condominium new business in California and Florida, and we are non-renewing certain policies in Florida, which may negatively impact premiums.

Commercial lines premiums written decreased 25.0% or $50 million in the second quarter of 2024 compared to the second quarter of 2023 and decreased 28.1% or $120 million in the first six months of 2024 compared to the first six months of 2023 primarily due to the strategic decision for the Allstate brand to stop writing new business and non-renew

certain policies. We are committed to offering comprehensive commercial products to customers through our exclusive agency and independent agency channels, with solutions offered by the National General brand and NEXT Insurance.

Other business lines premiums written increased 63.2% or $60 million in the second quarter of 2024 compared to the second quarter of 2023 and increased 31.8% or $70 million in the first six months of 2024 compared to the first six months of 2023 due to growth in the lender-placed business.

GAAP operating ratios include loss ratio, expense ratio and combined ratio to analyze our profitability trends. Frequency and severity statistics are used to describe the trends in loss costs.

(1)Other revenue is deducted from operating costs and expenses in the expense ratio calculation.

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(1)The ten-year average effect of catastrophe losses on the total combined ratio was 13.5 points in the second quarter of 2024.

Frequency and severity are influenced by:

•Supply chain disruptions and labor shortages

•Mix of repairable losses and total losses

•Value of total losses due to changes in used car prices

•Changes in medical inflation and consumption

•Number of claims with attorney representation

•Labor and part cost increases

•Changes in commuting activity

•Driving behavior (e.g., speed, time of day) impacting severity and mix of claim types

•Organizational and process changes impacting claim opening and closing practices and shifts in timing, if any, can impact comparisons to prior periods

The quarterly auto loss ratio has been more variable due to these and additional factors discussed below.

Auto loss ratio decreased 13.7 and 10.9 points in the second quarter and first six months of 2024, respectively, compared to the same periods of 2023 driven by increased earned premiums. Estimated report year 2024 incurred claim severity for Allstate brand increased compared to report year 2023 for major coverages due to higher repair costs, a higher mix of total losses, an increase in claims with attorney representation, higher medical consumption, and

inflation. Gross claim frequency decreased relative to the prior year. We continue to enhance our claims practices to manage loss costs by increasing resources and expanding re-inspections, accelerating resolution of bodily injury claims, and negotiating improved vendor services and parts agreements.

Homeowners loss ratio decreased 34.7 and 36.3 points in the second quarter and first six months of 2024, respectively, compared to the same periods of 2023, primarily due to lower catastrophe losses and increased premiums earned.

Gross claim frequency decreased in the second quarter and first six months of 2024 compared to the same periods of 2023 due to fewer fire claims reported. Paid claim severity increased in the second quarter and first six months of 2024 compared to the same periods of 2023 due to inflationary loss cost pressure driven by increases in labor and materials costs. Homeowners paid claim severity can be impacted by both the mix of perils and the magnitude of specific losses paid during the quarter.

Other personal lines loss ratio decreased 1.5 and 4.7 points in the second quarter and first six months of 2024, respectively, compared to the same periods of 2023 primarily due to increased premiums earned and lower catastrophe losses, partially offset by increased severity.

Second Quarter 2024 Form 10-Q 55

Commercial lines loss ratio increased 53.4 and 32.7 points in the second quarter and first six months of 2024, respectively, compared to the same periods of 2023, primarily due to higher unfavorable reserve reestimates related to the shared economy business and premiums earned decreasing as a result of the strategic decision for the Allstate brand to stop writing new business and non-renew certain policies.

Other business lines loss ratio decreased 2.3 and 0.6 points in the second quarter and first six months of 2024, respectively, compared to the same periods of 2023, primarily due to increased premiums earned and favorable reserve development, partially offset by higher losses.

Catastrophe losses decreased $576 million to $2.12 billion in the second quarter of 2024 compared to the second quarter of 2023 and decreased $1.54 billion to $2.85 billion in the first six months of 2024 compared to the first six months of 2023, primarily due to lower losses per event compared to historically high levels in the prior year. Favorable prior year reserve reestimates of $138 million and $300 million for the second quarter and first six months of 2024, respectively, were primarily due to reserve reestimates in homeowners lines for 2023 events.

We define a “catastrophe” as an event that produces pre-tax losses before reinsurance in excess of $1 million and involves multiple first party policyholders, or a winter weather event that produces a number of claims in excess of a preset, per-event threshold of average claims in a specific area, occurring within a certain amount of time following the event. Catastrophes are caused by various natural events including high winds, winter storms and freezes, tornadoes, hailstorms, wildfires, tropical storms, tsunamis, hurricanes, earthquakes and volcanoes.

We are also exposed to man-made catastrophic events, such as certain types of terrorism, civil unrest, wildfires or industrial accidents. The nature and level of catastrophes in any period cannot be reliably predicted.

Loss estimates are generally based on claim adjuster inspections and the application of historical loss development factors. Our loss estimates are calculated in accordance with the coverage provided by our policies. The establishment of appropriate reserves, including reserves for catastrophe losses, is an inherently uncertain and complex process. Reserving for hurricane losses is complicated by the inability of insureds to promptly report losses, limitations placed on claims adjusting staff affecting their ability to inspect losses, determining whether losses are covered by our homeowners policy (generally for damage caused by wind or wind driven rain) or specifically excluded coverage caused by flood, exposure to mold damage, and the effects of numerous other considerations, including the timing of a catastrophe in relation to other events, such as at or near the end of a financial reporting period, which can affect the availability of information needed to estimate reserves for that reporting period. In these situations, we may need to adapt our practices to accommodate these circumstances in order to determine a best estimate of our losses from a catastrophe.

Over time, we have limited our aggregate insurance exposure to catastrophe losses in certain regions of the country that are subject to high levels of natural catastrophes by utilizing reinsurance and participating in various state facilities.

Catastrophe reinsurance The catastrophe reinsurance program is part of our catastrophe management strategy, which is intended to provide our shareholders with an acceptable return on the risks assumed in our personal lines business, reduce earnings variability, and provide protection to our customers. Our current catastrophe reinsurance program supports our risk and return framework which incorporates our robust economic capital model and is informed by catastrophe risk models including hurricanes, earthquakes and wildfires and adjusts based on premium and insured value growth. As of June 30, 2024, the modeled 1-in-100 probable

maximum loss for hurricane, wildfire and earthquake perils is approximately $2.9 billion, net of reinsurance. We continually review our aggregate risk appetite and the cost and availability of reinsurance to optimize the risk and return profile of this exposure.

During the second quarter of 2024, we completed the placement of our 2024-2025 Florida Excess Catastrophe Reinsurance Program (“Florida program”) and the National General Lender Services Standalone Program. Additionally, we placed one single-year term contract as part of our 2024-2025 Nationwide Excess Catastrophe Reinsurance Program, providing $90

56 www.allstate.com million of placed limit in excess of a $7.70 billion retention.

Florida program updates Our 2024 Florida program provides coverage for property policies of Castle Key Insurance Company and certain affiliate companies for Florida catastrophe events up to $890 million of loss less a $30 million retention. The Florida program includes reinsurance agreements placed in the traditional market, the Florida Hurricane Catastrophe Fund (“FHCF”) and the insurance-linked securities (“ILS”) market as follows:

•Traditional market placements comprise reinsurance limits for losses to personal lines property in Florida arising out of multiple perils. These contracts provide a combined $310 million of limits, with a portion of the traditional market placements providing coverage for perils not covered by the FHCF contracts, which only cover hurricanes.

•Three FHCF contracts provide $206 million of limits for qualifying losses to personal lines property in Florida caused by storms the National Hurricane Center declares to be hurricanes. The three contracts are 90% placed.

•ILS placements provide $625 million of reinsurance limits for qualifying losses to personal lines property in Florida caused by a named storm event, a severe weather event, an earthquake event, a fire event, a volcanic eruption event, or a meteorite impact event.

National General Lender Services Standalone Program is placed in the traditional market and provides $265 million of coverage, subject to a $70 million retention, with one reinstatement of limits. Inuring contracts include the National General FHCF contract providing $71 million of limits in excess of a $36 million retention, 90% placed.

For a complete summary of the 2024 reinsurance placement, please read this in conjunction with the discussion and analysis in Part I. Item 2. Management’s Discussion and Analysis - Allstate Protection Segment Results, Catastrophe Reinsurance of The Allstate Corporation Form 10-Q for the quarterly period ended March 31, 2024.

The total cost of our property catastrophe reinsurance programs, excluding reinstatement premiums, during the second quarter and first six months of 2024 was $296 million and $582 million, respectively, compared to $242 million and $461 million in the second quarter and first six months of 2023, respectively. Catastrophe placement premiums reduce net written and earned premium with approximately 79% of the reduction related to homeowners premium.

Prior year reserve reestimates Favorable reserve reestimates, including catastrophes, were $204 million and $359 million in the second quarter and first six months of 2024, respectively, primarily due to favorable reserve reestimates in homeowners lines and personal auto lines, partially offset by unfavorable reserve reestimates in commercial lines and other personal lines.

For a more detailed discussion on reinsurance and reserve reestimates, see Note 8 of the condensed consolidated financial statements.

(1)Favorable reserve reestimates are shown in parentheses.

(2)Ratios are calculated using Allstate Protection premiums earned.

Second Quarter 2024 Form 10-Q 57

Expense ratio increased 0.8 and 0.1 points in the second quarter and first six months of 2024, respectively, compared to the second quarter and first six months of 2023, primarily due to an increase in advertising costs, partially offset by higher earned premium growth relative to fixed costs.

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