ALLSTATE CORP
For the period ended Jun 30, 2025. Filed Jul 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.
Jun 30, 2025 · Filed Jul 30, 2025
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Allstate Health and Benefits
Segment Results Allstate Health and Benefits
Allstate Health and Benefits Segment
On April 1, 2025, we closed the sale of American Heritage Life Insurance Company and American Heritage Service Company, comprising our employer voluntary benefits business, to StanCorp Financial Group, Inc. We recorded a gain on the sale of $890 million or $643 million, after-tax in the second quarter of 2025. Starting in the second quarter of 2025, this segment excludes the employer voluntary benefits results and financial results will not be comparable between periods.
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. The assets and liabilities of the business are classified as held for sale at June 30, 2025. The transaction closed on July 1, 2025, and we expect to record a gain on the sale of approximately $500 million in the third quarter of 2025.
Starting in the third quarter of 2025, the retained individual health business that was included in the Allstate Health and Benefits segment will no longer be a reportable segment.
Goodwill A goodwill impairment test performed for the retained individual health business in the first quarter of 2025 resulted in an excess of fair value over carrying amount of less than 10%. Consequently, a goodwill impairment test was also performed in the second quarter of 2025 for this business which did not result in an impairment of goodwill. As of June 30, 2025, the individual health reporting unit had goodwill of $44 million. Estimating fair value is a subjective process that involves the use of significant estimates by management. Market declines and other events impacting the fair value, including discount rates, operating results, investment returns and strategies and growth rate assumptions or increases in the level of equity required to support the business could result in goodwill impairment.
| Summarized financial information | ||||||
|---|---|---|---|---|---|---|
| Three months ended June 30, · Six months ended June 30, | ||||||
| ($ in millions) · 2025 · 2024 · 2025 · 2024 | ||||||
| Revenues | ||||||
| Accident and health insurance premiums and contract charges | $235 | $474 | $722 | $952 | ||
| Other revenue | 109 | 121 | 240 | 255 | ||
| Net investment income | 5 | 25 | 30 | 48 | ||
| Costs and expenses | ||||||
| Accident, health and other policy benefits | (188) | (291) | (521) | (587) | ||
| Amortization of DAC | (6) | (32) | (43) | (74) | ||
| Operating costs and expenses | (149) | (224) | (383) | (449) | ||
| Restructuring and related charges | (1) | — | (1) | (1) | ||
| Income tax expense on operations | (1) | (15) | (10) | (30) | ||
| Adjusted net income | $4 | $58 | $34 | $114 | ||
| Employer voluntary benefits (1) | $— | $28 | $22 | $45 | ||
| Group health (2) | 9 | 28 | 21 | 56 | ||
| Individual health (3) | (5) | 2 | (9) | 13 | ||
| Adjusted net income | $4 | $58 | $34 | $114 | ||
| Policies in force | ||||||
| Employer voluntary benefits (1) | — | 3,577 | ||||
| Group health (2) | 136 | 148 | ||||
| Individual health (3) | 482 | 456 | ||||
| Policies in force as of June 30 (in thousands) | 618 | 4,181 | ||||
(1)Employer voluntary benefits included supplemental life and health products offered through workplace enrollment.
(2)Group health includes health products and administrative services sold to employers.
(3)Individual health includes short-term medical and other health products sold directly to individuals.
Premiums and contract charges decreased 50.4% or $239 million in the second quarter of 2025 and decreased 24.2% or $230 million in the first six months of 2025 compared to the same periods of 2024. Excluding the results of the EVB business sold on April 1, premiums and contract charges increased 3.1% or $7 million in the second quarter of 2025 and increased 4.6% or $21 million in the first six months of 2025 compared to the same periods of 2024 due to growth in individual health and group health. Starting in the second quarter of 2025, we significantly reduced the sale of new Medicare supplement products in individual health.
62 www.allstate.com
Allstate Health and Benefits Segment Results
| Premiums and contract charges | ||||
|---|---|---|---|---|
| Three months ended June 30, | Six months ended June 30, | |||
| ($ in millions) | 2025 | 2024 | 2025 | 2024 |
| Employer voluntary benefits | $— | $246 | $243 | $494 |
| Group health | 123 | 120 | 247 | 238 |
| Individual health | 112 | 108 | 232 | 220 |
| Premiums and contract charges | $235 | $474 | $722 | $952 |
Adjusted net income decreased 93.1% or $54 million in the second quarter of 2025 and decreased 70.2% or $80 million in the first six months of 2025 compared to the same periods of 2024. Excluding the results of the EVB business sold on April 1, adjusted net income decreased 86.7% or $26 million in the second quarter of 2025 and decreased 82.6% or $57 million in the first six months of 2025 compared to the same periods of 2024, due to increased benefit utilization in group health and individual health.
Other revenue decreased 9.9% or $12 million in the second quarter of 2025 and decreased 5.9% or $15 million in the first six months of 2025 compared to the same periods of 2024, primarily due to lower third-party commission revenues for the individual health business.
Accident, health and other policy benefits decreased 35.4% or $103 million in the second quarter
of 2025 and decreased 11.2% or $66 million in the first six months of 2025 compared to the same periods of 2024. Excluding the results of the EVB business sold on April 1, accident, health and other policy benefits increased 20.5% or $32 million in the second quarter of 2025 and increased 23.5% or $74 million in the first six months of 2025 compared to the same periods of 2024, due to higher benefit utilization in group health and individual health.
Amortization of DACdecreased 81.3% or $26 million in the second quarter of 2025 and decreased 41.9% or $31 million in the first six months of 2025 compared to the same periods of 2024. Excluding the results of the EVB business sold on April 1, amortization of DAC is flat in the second quarter of 2025 and decreased 7.14% or $1 million in the first six months of 2025 compared to the same periods of 2024.
| Operating costs and expenses | ||||
|---|---|---|---|---|
| ($ in millions) | Employer voluntary benefits | Group health | Individualhealth | Total |
| Non-deferrable commissions | $— | $27 | $22 | $49 |
| Operating costs and expenses | — | 46 | 54 | 100 |
| Total | $— | $73 | $76 | $149 |
| Non-deferrable commissions | $21 | $27 | $38 | $86 |
| Operating costs and expenses | 51 | 42 | 45 | 138 |
| Total | $72 | $69 | $83 | $224 |
| Non-deferrable commissions | $22 | $54 | $53 | $129 |
| Operating costs and expenses | 51 | 88 | 115 | 254 |
| Total | $73 | $142 | $168 | $383 |
| Non-deferrable commissions | $44 | $53 | $80 | $177 |
| Operating costs and expenses | 102 | 84 | 86 | 272 |
| Total | $146 | $137 | $166 | $449 |
Operating costs and expenses decreased 33.5% or $75 million in the second quarter of 2025 and decreased 14.7% or $66 million in the first six months of 2025 compared to the same periods of 2024. Excluding the results of the EVB business sold on April 1, operating costs and expenses decreased 2.0% or $3 million in the second quarter of 2025 compared to the second quarter of 2024 primarily due to a decrease in non-deferrable commissions in individual health, partially offset by higher administrative costs. Excluding the results of the EVB business sold on April 1, operating costs and expenses increased 2.3% or $7 million in the first six months of 2025 compared to the first six months of 2024 primarily due to higher administrative costs, partially offset by lower non-deferrable commissions in individual health.
Second Quarter 2025 Form 10-Q 63
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