ALLSTATE CORP
For the period ended Mar 31, 2025. Filed Apr 30, 2025.
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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.
Mar 31, 2025 · Filed Apr 30, 2025
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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 closed on April 1, 2025, and we expect to record a gain on the sale of approximately $625 million in the second quarter of 2025.
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, reported within this segment. The transaction is expected to close in 2025, subject to regulatory approvals and other customary closing conditions. The transaction price for the group health business, less costs to sell, exceeds the carrying value of net assets related to this transaction, resulting in an expected gain of approximately $450 million that will be recognized at closing of the transaction.
Goodwill In conjunction with the EVB and group health business dispositions, the Company reallocated goodwill among the components of the Health and Benefits reporting unit using a relative fair value approach. An interim goodwill impairment test was performed for each of the EVB and group health disposal groups and the goodwill allocated to the retained individual health business. The interim impairment test did not result in an impairment of goodwill. The excess of fair value over carrying amount for the retained individual health business was less than 10%. As of March 31, 2025, the individual health reporting unit had goodwill of $41 million. Estimating fair value is a subjective process that involves the use of significant estimates by management. Market declines and other events impacting the fair value, including discount rates, operating results, investment returns and strategies and growth rate assumptions or increases in the level of equity required to support the business could result in goodwill impairment.
| Summarized financial information | ||
|---|---|---|
| Three months ended March 31, | ||
| ($ in millions) | 2025 | 2024 |
| Revenues | ||
| Accident and health insurance premiums and contract charges | $487 | $478 |
| Other revenue | 131 | 134 |
| Net investment income | 25 | 23 |
| Costs and expenses | ||
| Accident, health and other policy benefits | (333) | (296) |
| Amortization of DAC | (37) | (42) |
| Operating costs and expenses | (234) | (225) |
| Restructuring and related charges | — | (1) |
| Income tax expense on operations | (9) | (15) |
| Adjusted net income | $30 | $56 |
| Benefit ratio (1) | 66.7 | 60.0 |
| Employer voluntary benefits (2) | $22 | $17 |
| Group health (3) | 12 | 28 |
| Individual health (4) | (4) | 11 |
| Adjusted net income | $30 | $56 |
| Policies in force | ||
| Employer voluntary benefits (2) | 3,553 | 3,594 |
| Group health (3) | 138 | 146 |
| Individual health (4) | 478 | 453 |
| Policies in force as of March 31 (in thousands) | 4,169 | 4,193 |
(1)Benefit ratio is calculated as accident, health and other policy benefits less interest credited to contractholder funds of $8 million and $9 million for the three months ended March 31, 2025 and 2024, respectively, 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 1.9% or $9 million in the first quarter of 2025 compared to the first quarter of 2024, primarily due to growth in individual health and group health, partially offset by a decline in employer voluntary benefits.
58 www.allstate.com
Allstate Health and Benefits Segment Results
| Premiums and contract charges | ||
|---|---|---|
| Three months ended March 31, | ||
| ($ in millions) | 2025 | 2024 |
| Employer voluntary benefits | $243 | $248 |
| Group health | 124 | 118 |
| Individual health | 120 | 112 |
| Premiums and contract charges | $487 | $478 |
Adjusted net income decreased $26 million in the first quarter of 2025 compared to the first quarter of 2024, primarily due to increased benefit utilization in group health and individual health, partially offset by lower benefit utilization and expenses in employer voluntary benefits.
Other revenue decreased $3 million in the first quarter of 2025 compared to the first quarter of 2024, primarily due to lower third-party commission revenues for the individual health business.
Accident, health and other policy benefits increased 12.5% or $37 million in the first quarter of 2025 compared to the first quarter of 2024, primarily from higher benefit utilization 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 6.7 points to 66.7 in the first quarter of 2025 compared to 60.0 in the first quarter of 2024, primarily due to higher claims experience across group health and individual health.
Amortization of DACdecreased 11.9% or $5 million in the first quarter of 2025 compared to the first quarter of 2024 primarily driven by employer voluntary benefits. For information on changes in DAC, see Note 12 of the consolidated financial statements.
| Operating costs and expenses | ||||
|---|---|---|---|---|
| ($ in millions) | Employer voluntary benefits | Group health | Individualhealth | Total |
| Non-deferrable commissions | $22 | $27 | $31 | $80 |
| Operating costs and expenses | 51 | 42 | 61 | 154 |
| Total | $73 | $69 | $92 | $234 |
| Non-deferrable commissions | $23 | $26 | $42 | $91 |
| Operating costs and expenses | 51 | 42 | 41 | 134 |
| Total | $74 | $68 | $83 | $225 |
Operating costs and expenses increased $9 million in the first quarter of 2025 compared to the first quarter of 2024, primarily due to growth in individual health.
First Quarter 2025 Form 10-Q 59
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