ALLSTATE CORP
For the period ended Sep 30, 2024. Filed Oct 30, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Oct 30, 2024
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Allstate Health and Benefits
Segment Results Allstate Health and Benefits
Allstate Health and Benefits Segment
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 the Company’s employer voluntary benefits business, reported within this segment. The transaction is expected to close in the first half of 2025, subject to regulatory approvals and other customary closing conditions.
| Summarized financial information | ||||||
|---|---|---|---|---|---|---|
| Three months ended September 30, · Nine months ended September 30, | ||||||
| ($ in millions) · 2024 · 2023 · 2024 · 2023 | ||||||
| Revenues | ||||||
| Accident and health insurance premiums and contract charges | $487 | $463 | $1,439 | $1,379 | ||
| Other revenue | 123 | 104 | 378 | 306 | ||
| Net investment income | 26 | 20 | 74 | 60 | ||
| Costs and expenses | ||||||
| Accident, health and other policy benefits | (317) | (262) | (904) | (785) | ||
| Amortization of DAC | (37) | (39) | (111) | (114) | ||
| Operating costs and expenses | (232) | (197) | (681) | (610) | ||
| Restructuring and related charges | (2) | (2) | (3) | (6) | ||
| Income tax expense on operations | (11) | (18) | (41) | (48) | ||
| Adjusted net income | $37 | $69 | $151 | $182 | ||
| Benefit ratio (1) | 63.4 | 54.9 | 61.1 | 55.1 | ||
| Employer voluntary benefits (2) | $19 | $28 | $64 | $76 | ||
| Group health and individual health (3) (4) | 18 | 41 | 87 | 106 | ||
| Adjusted net income | $37 | $69 | $151 | $182 | ||
| Policies in force | ||||||
| Employer voluntary benefits (2) | 3,556 | 3,710 | ||||
| Group health (3) | 140 | 134 | ||||
| Individual health (4) | 462 | 412 | ||||
| Policies in force as of September 30 (in thousands) | 4,158 | 4,256 | ||||
(1)Benefit ratio is calculated as accident, health and other policy benefits less interest credited to contractholder funds of $8 million for both the three months ended September 30, 2024 and 2023, and $25 million for both the nine months ended September 30, 2024 and 2023, divided by premiums and contract charges.
(2)Employer voluntary benefits include supplemental life and health products offered through workplace enrollment.
(3)Group health includes health products and administrative services sold to employers.
(4)Individual health includes short-term medical and other health products sold directly to individuals.
Premiums and contract charges increased 5.2% or $24 million in the third quarter of 2024 and increased 4.4% or $60 million in the first nine months of 2024 compared to the same periods of 2023, primarily due to growth in individual health and group health, partially offset by a decline in employer voluntary benefits.
Adjusted net income decreased $32 million and $31 million in the third quarter and first nine months of 2024, respectively, compared to the same periods of 2023, primarily due to increased benefit utilization across all lines of business.
| Premiums and contract charges by line of business | ||||
|---|---|---|---|---|
| Three months ended September 30, | Nine months ended September 30, | |||
| ($ in millions) | 2024 | 2023 | 2024 | 2023 |
| Employer voluntary benefits | $248 | $253 | $742 | $753 |
| Group health | 120 | 111 | 358 | 328 |
| Individual health | 119 | 99 | 339 | 298 |
| Premiums and contract charges | $487 | $463 | $1,439 | $1,379 |
64 www.allstate.com
Allstate Health and Benefits Segment Results
Other revenue increased $19 million in the third quarter of 2024 and increased $72 million in the first nine months of 2024 compared to the same periods of 2023, primarily due to an increase in individual health and group health administrative fees.
Accident, health and other policy benefits increased 21.0% or $55 million in the third quarter of 2024 and increased 15.2% or $119 million in the first nine months of 2024 compared to the same periods of 2023, primarily from higher benefit utilization in all businesses and growth in group health and individual health.
Accident, health and other policy benefits include changes in the reserve for future policy benefits,
expected development on reported claims, and reserves for incurred but not reported claims as shown in Note 10.
Benefit ratio increased 8.6 points to 63.4 in the third quarter of 2024 compared to 54.9 in the third quarter of 2023 and increased 6.0 points to 61.1 in the first nine months of 2024 compared to 55.1 in the same period of 2023, primarily due to higher claims experience across all lines of business.
Amortization of DACdecreased 5.1% or $2 million in the third quarter of 2024 and decreased 2.6% or $3 million in the first nine months of 2024 compared to the same periods of 2023.
| Operating costs and expenses | |||
|---|---|---|---|
| ($ in millions) | Employer voluntary benefits | Group health and individual health | Total |
| Non-deferrable commissions | $20 | $60 | $80 |
| Operating costs and expenses | 56 | 96 | 152 |
| Total | $76 | $156 | $232 |
| Non-deferrable commissions | $64 | $193 | $257 |
| Operating costs and expenses | 158 | 266 | 424 |
| Total | $222 | $459 | $681 |
| Non-deferrable commissions | $19 | $47 | $66 |
| Operating costs and expenses | 51 | 80 | 131 |
| Total | $70 | $127 | $197 |
| Non-deferrable commissions | $66 | $157 | $223 |
| Operating costs and expenses | 152 | 235 | 387 |
| Total | $218 | $392 | $610 |
Operating costs and expenses increased $35 million in the third quarter of 2024 and increased $71 million in the first nine months of 2024 compared to the same periods of 2023, primarily due to growth in individual and group health.
Third Quarter 2024 Form 10-Q 65
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