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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Run-off Property-Liability
Run-off Property-Liability Segment Results
Run-off Property-Liability Segment
| Underwriting results | ||||
|---|---|---|---|---|
| ($ in millions) | Three months ended September 30, | Nine months ended September 30, | ||
| 2024 | 2023 | 2024 | 2023 | |
| Claims and claims expense | ||||
| Asbestos claims | $(19) | $(44) | $(19) | $(44) |
| Environmental claims | (10) | (18) | (10) | (18) |
| Other run-off lines | (30) | (20) | (36) | (23) |
| Total claims and claims expense | (59) | (82) | (65) | (85) |
| Operating costs and expenses | (1) | (1) | (3) | (3) |
| Underwriting income (loss) | $(60) | $(83) | $(68) | $(88) |
Annual reserve review In the third quarter of 2024 and 2023, we performed our annual reserve review using established industry and actuarial best practices. The annual review resulted in unfavorable reserve reestimates totaling $58 million and $80 million in 2024 and 2023, respectively. The reserve reestimates are included as part of claims and claims expense.
The reserve reestimates in 2024 primarily related to new reported information for asbestos related claims and adverse developments within the other run-off lines.
The reserve reestimates in 2023 primarily related to new reported information and defense costs for asbestos related claims and other run-off exposures
and higher than expected environmental reported losses.
We believe that our reserves are appropriately established based on available facts, technology, laws, regulations, and assessments of other pertinent factors and characteristics of exposure (e.g., claim activity, potential liability, jurisdiction, products versus non-products exposure) presented by individual policyholders, assuming no change in the legal, legislative or economic environment. However, as we progress with the resolution of disputed claims in the courts and arbitrations and with negotiations and settlements, our reported losses may be more variable.
| Reserves for asbestos, environmental and other run-off claims before and after the effects of reinsurance | ||
|---|---|---|
| ($ in millions) | September 30, 2024 | December 31, 2023 |
| Asbestos claims | ||
| Gross reserves | $1,145 | $1,166 |
| Reinsurance | (356) | (362) |
| Net reserves | 789 | 804 |
| Environmental claims | ||
| Gross reserves | 326 | 331 |
| Reinsurance | (61) | (64) |
| Net reserves | 265 | 267 |
| Other run-off claims | ||
| Gross reserves | 447 | 445 |
| Reinsurance | (62) | (72) |
| Net reserves | 385 | 373 |
| Total | ||
| Gross reserves | 1,918 | 1,942 |
| Reinsurance | (479) | (498) |
| Net reserves | $1,439 | $1,444 |
Third Quarter 2024 Form 10-Q 59
Segment Results Run-off Property-Liability
| Reserves by type of exposure before and after the effects of reinsurance | ||
|---|---|---|
| ($ in millions) | September 30, 2024 | December 31, 2023 |
| Direct excess commercial insurance | ||
| Gross reserves | $1,098 | $1,114 |
| Reinsurance | (368) | (382) |
| Net reserves | 730 | 732 |
| Assumed reinsurance coverage | ||
| Gross reserves | 592 | 603 |
| Reinsurance | (54) | (54) |
| Net reserves | 538 | 549 |
| Direct primary commercial insurance | ||
| Gross reserves | 140 | 140 |
| Reinsurance | (56) | (61) |
| Net reserves | 84 | 79 |
| Other run-off business | ||
| Gross reserves | — | 1 |
| Reinsurance | — | — |
| Net reserves | — | 1 |
| Unallocated loss adjustment expenses | ||
| Gross reserves | 88 | 84 |
| Reinsurance | (1) | (1) |
| Net reserves | 87 | 83 |
| Total | ||
| Gross reserves | 1,918 | 1,942 |
| Reinsurance | (479) | (498) |
| Net reserves | $1,439 | $1,444 |
| Percentage of gross and ceded reserves by case and incurred but not reported (“IBNR”) | ||||
|---|---|---|---|---|
| September 30, 2024 | December 31, 2023 | |||
| Case | IBNR | Case | IBNR | |
| Direct excess commercial insurance | ||||
| Gross reserves (1) | 59% | 41% | 57% | 43% |
| Ceded (2) | 63 | 37 | 63 | 37 |
| Assumed reinsurance coverage | ||||
| Gross reserves | 31 | 69 | 32 | 68 |
| Ceded | 41 | 59 | 43 | 57 |
| Direct primary commercial insurance | ||||
| Gross reserves | 55 | 45 | 59 | 41 |
| Ceded | 86 | 14 | 83 | 17 |
(1)Approximately 66% and 68% of gross case reserves as of September 30, 2024 and December 31, 2023, respectively, are subject to settlement agreements.
(2)Approximately 73% and 72% of ceded case reserves as of September 30, 2024 and December 31, 2023, respectively, are subject to settlement agreements.
60 www.allstate.com
Run-off Property-Liability Segment Results
| Gross payments from case reserves by type of exposure | ||||
|---|---|---|---|---|
| ($ in millions) | Three months ended September 30, | Nine months ended September 30, | ||
| 2024 | 2023 | 2024 | 2023 | |
| Direct excess commercial insurance | ||||
| Gross (1) | $19 | $13 | $51 | $45 |
| Ceded (2) | (7) | (7) | (20) | (16) |
| Assumed reinsurance coverage | ||||
| Gross | 6 | 6 | 33 | 25 |
| Ceded | 1 | — | (1) | (3) |
| Direct primary commercial insurance | ||||
| Gross | 1 | 1 | 4 | 3 |
| Ceded | (1) | — | (2) | — |
(1)In the third quarter and first nine months of 2024, 94% and 89% of payments related to settlement agreements, respectively, compared to 82% and 84% of the third quarter and first nine months of 2023, respectively.
(2)In the third quarter and first nine months of 2024, 98% and 95% of payments related to settlement agreements, respectively, compared to 56% and 77% of the third quarter and first nine months of 2023, respectively.
Total net reserves as of September 30, 2024, included $748 million or 52% of estimated IBNR reserves compared to $762 million or 53% of estimated IBNR reserves as of December 31, 2023.
Total gross payments were $26 million and $88 million for the third quarter and first nine months of 2024, respectively, compared to $20 million and $73 million for the third quarter and first nine months of 2023, respectively. Payments primarily related to settlement agreements reached with several insureds on large claims, mainly asbestos related losses, where the scope of coverages has been agreed upon. The claims associated with these settlement agreements are expected to be substantially paid out over the next several years as qualified claims are submitted by these insureds. Reinsurance collections were $5 million and $31 million for the third quarter and first nine months of 2024, respectively, compared to $6 million and $30 million for the third quarter and first nine months of 2023, respectively.
Third Quarter 2024 Form 10-Q 61
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