ALLSTATE CORP

Overview

The following discussion highlights significant factors influencing the consolidated financial position and results of operations of The Allstate Corporation (referred to in this document as “we,” “our,” “us,” the “Company” or “Allstate”). It should be read in conjunction with the condensed consolidated financial statements and related notes thereto found under Part I. Item 1. contained herein, and with the discussion, analysis, consolidated financial statements and notes thereto in Part I. Item 1. and Part II. Item 7. and Item 8. of The Allstate Corporation annual report on Form 10-K for 2024, filed February 24, 2025.

Further analysis of our insurance segments is provided in the Property-Liability Operations and Segment Results sections, including Allstate Protection, Run-off Property-Liability, Protection Services and Allstate Health and Benefits, of Management’s Discussion and Analysis (“MD&A”). The segments are consistent with the way in which the chief operating decision maker reviews financial performance and makes decisions about the allocation of resources.

Measuring segment profit or loss

The measure of segment profit or loss used in evaluating performance is underwriting income for the Allstate Protection and Run-off Property-Liability segments and adjusted net income for the Protection Services, Allstate Health and Benefits and Corporate and Other segments. We use these measures in our evaluation of results of operations to analyze profitability.

Underwriting income is calculated as premiums earned and other revenue, less claims and claims expense (“losses”), amortization of deferred policy acquisition costs (“DAC”), operating costs and expenses, amortization or impairment of purchased intangibles and restructuring and related charges, as determined using accounting principles generally accepted in the United States of America (“GAAP”).

Adjusted net income (loss) is net income (loss) applicable to common shareholders, excluding:

Macroeconomic impacts

Macroeconomic factors have and may continue to impact the results of our operations, financial condition and liquidity, such as U.S. government fiscal and monetary policies, conflict in the Middle East, the

Russia/Ukraine conflict, supply chain disruptions and labor shortages.

Tariffs Beginning on April 2, 2025, the U.S. government announced additional tariffs on goods imported to the U.S. These actions are expected to impact the results of our operations. Depending on the severity of these actions, the following may impact operations:

•Higher new and used vehicle pricing, increasing claims costs in Allstate Protection, Protection Plans and Dealer Services

•Adverse impact on investment valuations on fixed income securities, equity securities and performance-based investments

•Declines in auto new issued applications due to lower car sales

•Reduced demand in Allstate Dealer Services due to lower new car sales

•Lower premiums written from reduced retail sales in Allstate Protection Plans

•Bad debt and credit allowance exposure

This is not inclusive of all potential impacts and should not be treated as such.

Corporate strategy

Our strategy has two components: increase personal property-liability market share and expand protection offerings by leveraging the Allstate brand, customer base and capabilities.

Transformative Growth is about creating a business model, capabilities and culture that continually transform to better serve customers. This is done by providing affordable, simple and connected protection through multiple distribution methods. The ultimate objective is to enhance customer value to drive growth in all businesses.

In the personal property-liability businesses, this has five key components:

•Improving customer value

•Expanding customer access

•Increasing sophistication and investment in customer acquisition

•Deploying new technology ecosystems

•Driving organizational transformation

We are expanding Protection Services businesses by leveraging the Allstate brand, customer base and capabilities.

Dispositions

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 our employer voluntary benefits (“EVB”) business for approximately $2.0 billion in cash. The employer

First Quarter 2025 Form 10-Q 43 voluntary benefits business continues to be reported in the Allstate Health and Benefits segment, and the assets and liabilities of the business are classified as held for sale. 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 for approximately $1.25 billion in cash, adjusted for the closing balance sheet. The group health business continues to be reported in the Allstate Health and Benefits segment, and beginning in the first quarter of 2025, the assets and liabilities of the business are classified as held for sale. 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. The ultimate amount of the anticipated gain on the sale will be impacted by purchase price adjustments associated with certain pre-close transactions, changes in the carrying value of net assets, changes in accumulated other comprehensive income and the related tax effects.

See Note 3 of the condensed consolidated financial statements for further information on the employer voluntary benefits and group health dispositions.

Consolidated net income (loss) applicable to common shareholders

($ in millions)

Consolidated net income applicable to common shareholders decreased 52.4% to $566 million in the first quarter of 2025 compared to the first quarter of 2024, primarily due to higher catastrophe and realized capital losses.

Total revenues

($ in millions)

Total revenues increased 7.8% to $16.45 billion in the first quarter of 2025 compared to the first quarter of 2024, primarily due to premium rate increases and higher homeowners insurance policies in force.

Net investment income

($ in millions)

Net investment income increased $90 million to $854 million in the first quarter of 2025, due to higher market-based investment results.

Financial highlights

Investments totaled $74.05 billion as of March 31, 2025, increasing from $72.61 billion as of December 31, 2024.

Allstate shareholders’ equity was $22.06 billion as of March 31, 2025, increasing from $21.44 billion as of December 31, 2024, primarily due to net income and lower unrealized net capital losses on investments, partially offset by dividends to shareholders.

44 www.allstate.com

Book value per diluted common share (ratio of Allstate common shareholders’ equity to total common shares outstanding and dilutive potential common shares outstanding) was $74.61 as of March 31, 2025, an increase of 19.8% from $62.27 as of March 31, 2024, and an increase of 3.1% from $72.35 as of December 31, 2024.

Return on average Allstate common shareholders’ equityfor the twelve months ended March 31, 2025, was 21.4%, an increase of 13.8 points from 7.6% for the twelve months ended March 31, 2024. The increase was primarily due to higher net income applicable to common shareholders for the trailing twelve-month period ending March 31, 2025.

Summarized consolidated financial results

Segment highlights

Allstate Protection underwriting income was $364 million in the first quarter of 2025 compared to $903 million in the first quarter of 2024, due to higher catastrophe losses, partially offset by increased premiums earned.

Catastrophe losses were $2.20 billion in the first quarter of 2025 compared to $731 million in the first quarter of 2024.

Premiums written increased 8.5% to $14.30 billion in the first quarter of 2025 compared to the same period of 2024, reflecting higher premiums in auto and homeowners insurance and higher homeowners insurance policies in force.

Protection Services adjusted net income was $55 million in the first quarter of 2025 compared to $54 million in the first quarter of 2024, primarily due to premium growth at Allstate Protection Plans, partially offset by higher expenses due to growth at Arity and higher loss costs at Dealer Services.

Premiums and other revenue increased 14.6% to $799 million in the first quarter of 2025 compared to the same period of 2024, primarily due to growth at Allstate Protection Plans and higher lead generation revenue at Arity.

Allstate Health and Benefits adjusted net income was $30 million in the first quarter of 2025 compared to adjusted net income of $56 million in the first quarter of 2024. The decline was primarily due to increased benefit utilization in group health and individual health, partially offset by lower benefit utilization and expenses in employer voluntary benefits.

Premiums and contract charges increased 1.9% to $487 million in the first quarter of 2025 compared to the same period of 2024, primarily due to growth in individual health and group health, partially offset by a decline in employer voluntary benefits.

First Quarter 2025 Form 10-Q 45