ALLSTATE CORP

Allstate Protection Segment

Underwriting income decreased 59.7% or $539 million in the first quarter of 2025 compared to the first quarter of 2024 due to higher catastrophe losses, partially offset by increased premiums earned.

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

($ in millions)

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

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Premium measures and statistics include PIF, new issued applications and average premiums 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.

Auto insurance premiums written increased 5.2% or $491 million in the first quarter of 2025 compared to the first quarter of 2024, primarily due to the following factors:

•Increased Allstate brand average premiums driven by rate increases. In the three months ended March 31, 2025, rate increases of 4.3% were implemented in 32 locations, resulting in total insurance premium impact of 1.4%

•In locations not achieving acceptable returns, we expect to continue to pursue targeted rate

increases. In states where we are achieving acceptable returns, we plan to implement rates that keep pace with increasing costs

•PIF decreased 0.4% or 107 thousand to 25,100 thousand as of March 31, 2025 compared to March 31, 2024

•Increased new issued applications in all channels

First Quarter 2025 Form 10-Q 49

Homeowners insurance premiums written increased 20.1% or $579 million in the first quarter of 2025 compared to the first quarter of 2024, primarily due to the following factors:

•Higher Allstate brand average premiums from implemented rate increases and inflation in insured home replacement costs and other aging factor adjustments, combined with policies in force growth

•In the three months ended March 31, 2025, rate increases of 5.9% were implemented in 19 locations, resulting in total estimated insurance premium impact of 1.5%, excluding the impact of changes in insured home replacement costs

•Increased new issued applications in direct and exclusive agency channels

We are not writing new homeowners business in California and Florida. We are also non-renewing certain policies in Florida. 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.

National General policy growth may be negatively impacted as we improve underwriting margins to targeted levels through underwriting and rate actions.

Other personal lines premiums written increased 10.5% or $69 million in the first quarter of 2025 compared to the first quarter of 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 California and Florida, and we are non-renewing certain policies in Florida.

Commercial lines premiums written decreased 40.1% or $63 million in the first quarter of 2025 compared to the first quarter of 2024, primarily due to the strategic decision for the Allstate brand to stop writing new business and non-renew policies. We are

committed to offering comprehensive commercial products to customers through our exclusive agency, independent agency and direct channels, with solutions offered by the National General brand, NEXT Insurance and other brokered solutions.

Other business lines premiums written increased 28.1% or $38 million in the first quarter of 2025 compared to the first quarter of 2024 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 changes are used to describe the trends in loss costs.

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(1)Expense ratio includes other revenue of $44 million for the three months ended March 31, 2025, compared to $38 million for the three months ended March 31, 2024, for fees on auto assigned risk policies.

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

(1)The ten-year average effect of first-quarter catastrophe losses on the total combined ratio was 8.6 points.

(2) The ten-year average effect of first-quarter homeowner catastrophe losses on the total combined ratio was 29.3 points.

Auto loss ratio decreased 6.1 points in the first quarter of 2025, compared to the same period of 2024 driven by increased earned premiums and lower non-catastrophe losses. Estimated report year 2025 incurred claim severity for Allstate increased compared to report year 2024 for major coverages due to higher repair costs, medical consumption and attorney representation. 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 and accelerating resolution of bodily injury claims.

Homeowners loss ratio increased 31.5 points in the first quarter of 2025 compared to the same period of 2024 primarily due to higher catastrophe losses, partially offset by increased premiums earned.

Gross claim frequency, excluding catastrophes, decreased in the first quarter of 2025 compared to the same period of 2024. Paid claim severity, excluding catastrophes, increased in the first quarter of 2025 compared to the same period of 2024 due to an increase in freeze related claims and larger losses within the fire peril. 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 increased 5.6 points in the first quarter of 2025, compared to the same

period of 2024 primarily due to higher catastrophe losses.

Commercial lines loss ratio decreased 57.0 points in the first quarter of 2025 compared to the same period of 2024, primarily due to lower losses, partially offset by a decrease in premiums earned driven by the strategic decision to exit an unprofitable business.

Other business lines loss ratio increased 5.4 points in the first quarter of 2025, compared to the same period of 2024, primarily due to higher catastrophe losses.

Catastrophe losses increased $1.47 billion to $2.20 billion in the first quarter of 2025 compared to the first quarter of 2024 due to $1.06 billion from the California wildfires, and larger losses per event from wind/hail events in March. The catastrophe losses in the first quarter of 2025 are net of $1.13 billion of expected reinsurance recoveries. The California wildfire event includes reinsurance reinstatement premiums and estimated California FAIR Plan assessments.

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

First Quarter 2025 Form 10-Q 51 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 managing coverage, number of policies in force, utilizing reinsurance and participating in various state facilities.

(1)Includes reinsurance recoveries.

(2)Gross losses before reinsurance recoverables and reinstatement premiums were $3.33 billion.

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 property 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. As of March 31, 2025, the modeled 1-in-100 annual aggregate probable maximum loss for hurricane, earthquake and wildfire perils is approximately $3.1 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.

We have placed coverage related to our 2025-2026 Nationwide Excess Catastrophe Reinsurance Program (the “Nationwide Program”), the Kentucky Earthquake Catastrophe Reinsurance Contract and the Canada Catastrophe Excess Reinsurance Contract. The Florida Excess Catastrophe Reinsurance Program and the National General Lender Services Program will be completed in the second quarter of 2025. We are continuing to evaluate complimentary coverage that

provides aggregate protection and reduces earnings volatility.

Similar to our 2024 program, our 2025 program includes coverage for losses to personal lines property, personal lines automobile, commercial lines property or commercial lines automobile arising out of multiple perils, in addition to hurricanes, earthquakes and wildfires.

The Nationwide Program provides per occurrence coverage up to $9.50 billion of loss less a $1.00 billion retention and is subject to the percentage of reinsurance placed in each of its agreements. It also provides aggregate coverage up to $500 million for catastrophe loss events in excess of a deductible of $50 million per event with $66 million of limit utilized by expected recoveries. Property business in the state of Florida is excluded from this program. Separate reinsurance agreements address the distinct needs of separately capitalized legal entities. The Nationwide Program includes reinsurance agreements with both the traditional and insurance-linked securities (“ILS”) markets as described below:

•Core traditional market multi-year and per occurrence agreements provide limits totaling $5.87 billion for catastrophe losses arising out of multiple perils and are comprised of the following:

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–Contracts providing combined $3.25 billion of placed limits exhausting at $4.25 billion, with one annual reinstatement.

–Three multi-year contracts providing combined $336 million of placed limits with two of the contracts providing one reinstatement of limits over each contract’s term.

–Four single-year contracts providing combined $2.28 billion of placed limits filling capacity around the multi-year and ILS placements, with two contracts providing one reinstatement of limits.

•ILS placements provide $2.70 billion of placed limits, with no reinstatement of limits, and are comprised of the following:

–Ten contracts providing occurrence coverage of $2.20 billion of placed limits, reinsuring losses in all states except Florida caused by named storms, earthquakes and fire following earthquakes, severe weather, wildfires, and other naturally occurring or man-made events determined to be a catastrophe by the Company.

–One contract providing occurrence and aggregate coverage of $175 million of placed limits, also provide that for each annual period beginning April 1, Allstate declared catastrophes to personal lines property and automobile business can be aggregated to erode the aggregate retention and qualify for coverage under the aggregate limits.

Recoveries are limited to the ultimate net loss from the reinsured event.

–Two contracts providing aggregate coverage of $325 million of placed limits, with $66 million of limit utilized by expected recoveries.

Kentucky Earthquake Excess Catastrophe Reinsurance Contract is placed in the traditional market and provides $28 million of placed limits, subject to a $2 million retention with one reinstatement of limits.

Canada Catastrophe Excess of Loss Reinsurance Contract is placed in the traditional market and provides CAD 478 million of placed limits, subject to a CAD 100 million retention, with one reinstatement of limits.

The total cost of our property catastrophe reinsurance programs, excluding reinstatement premiums, during the first quarter of 2025 was $257 million, compared to $286 million in the first quarter of 2024. Catastrophe placement premiums reduce net written and earned premium with approximately 82% of the reduction related to homeowners premium.

Prior year reserve reestimates Favorable reserve reestimates, including catastrophes, were $254 million in the first quarter of 2025 primarily due to favorable reserve reestimates in personal auto lines physical damage coverages.

For a more detailed discussion on reinsurance and reserve reestimates, see Note 9 of the condensed consolidated financial statements.

(1)Favorable reserve reestimates are shown in parentheses.

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

First Quarter 2025 Form 10-Q 53

Expense ratio increased 0.8 points in the first quarter of 2025, compared to the first quarter of 2024, primarily due to an increase in advertising costs, partially offset by higher earned premium growth relative to fixed costs.

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