Cover
Cover - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Jan. 29, 2021 | Jun. 30, 2020 | |
Document Information [Line Items] | |||
Document Type | 10-K | ||
Document Quarterly Report | true | ||
Document Period End Date | Dec. 31, 2020 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 1-11840 | ||
Entity Registrant Name | ALLSTATE CORP | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 36-3871531 | ||
Entity Address, Address Line One | 2775 Sanders Road | ||
Entity Address, City or Town | Northbrook | ||
Entity Address, State or Province | IL | ||
Entity Address, Postal Zip Code | 60062 | ||
City Area Code | 847 | ||
Local Phone Number | 402-5000 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 29,940 | ||
Entity Common Stock, Shares Outstanding | 302,873,426 | ||
Documents Incorporated by Reference | Documents Incorporated By Reference Portions of the following documents are incorporated herein by reference as follows: Part III of this Form 10-K incorporates by reference certain information from the registrant’s definitive proxy statement for its annual stockholders meeting to be held on May 25, 2021, (the “Proxy Statement”) to be filed not later than 120 days after the end of the fiscal year covered by this Form 10-K. | ||
Entity Central Index Key | 0000899051 | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Common stock par value | CHICAGO STOCK EXCHANGE, INC | |||
Document Information [Line Items] | |||
Title of 12(b) Security | Common Stock, par value $0.01 per share | ||
Trading Symbol | ALL | ||
Security Exchange Name | CHX | ||
Common stock par value | NEW YORK STOCK EXCHANGE, INC. | |||
Document Information [Line Items] | |||
Title of 12(b) Security | Common Stock, par value $0.01 per share | ||
Trading Symbol | ALL | ||
Security Exchange Name | NYSE | ||
5.100% Subordinated Debentures, due 2053 | NEW YORK STOCK EXCHANGE, INC. | |||
Document Information [Line Items] | |||
Title of 12(b) Security | 5.100% Fixed-to-Floating Rate Subordinated Debentures due 2053 | ||
Trading Symbol | ALL.PR.B | ||
Security Exchange Name | NYSE | ||
Series G Preferred Stock | NEW YORK STOCK EXCHANGE, INC. | |||
Document Information [Line Items] | |||
Title of 12(b) Security | Depositary Shares represent 1/1,000th of a share of 5.625% Noncumulative Preferred Stock, Series G | ||
Trading Symbol | ALL PR G | ||
Security Exchange Name | NYSE | ||
Series H | NEW YORK STOCK EXCHANGE, INC. | |||
Document Information [Line Items] | |||
Title of 12(b) Security | Depositary Shares represent 1/1,000th of a share of 5.100% Noncumulative Preferred Stock, Series H | ||
Trading Symbol | ALL PR H | ||
Security Exchange Name | NYSE | ||
Series I | NEW YORK STOCK EXCHANGE, INC. | |||
Document Information [Line Items] | |||
Title of 12(b) Security | Depositary Shares represent 1/1,000th of a share of 4.750% Noncumulative Preferred Stock, Series I | ||
Trading Symbol | ALL PR I | ||
Security Exchange Name | NYSE |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Revenues | |||
Property and casualty insurance premiums (net of reinsurance ceded and indemnification programs of $1,141, $1,122 and $1,016) | $ 39,517 | $ 38,577 | $ 36,513 |
Net investment income | 2,853 | 3,159 | 3,240 |
Realized capital gains (losses) | 1,356 | 1,885 | (877) |
Total revenues | 44,791 | 44,675 | 39,815 |
Costs and expenses | |||
Property and casualty insurance claims and claims expense (net of reinsurance ceded and indemnification programs of $530, $524 and $1,378) | 22,001 | 23,976 | 22,778 |
Shelter-in-Place Payback expense | 948 | 0 | 0 |
Life contract benefits (net of reinsurance ceded of $155, $165 and $240) | 2,243 | 2,039 | 1,973 |
Interest credited to contractholder funds (net of reinsurance ceded of $27, $20 and $24) | 638 | 640 | 654 |
Amortization of deferred policy acquisition costs | 5,630 | 5,533 | 5,222 |
Operating costs and expenses | 5,732 | 5,690 | 5,594 |
Pension and other postretirement remeasurement (gains) losses | (51) | 114 | 468 |
Restructuring and related charges | 259 | 41 | 67 |
Amortization of purchased intangibles | 118 | 126 | 105 |
Impairment of purchased intangibles | 0 | 106 | 0 |
Interest expense | 318 | 327 | 332 |
Total costs and expenses | 37,836 | 38,592 | 37,193 |
Gain on disposition of operations | 4 | 6 | 6 |
Income from operations before income tax expense | 6,959 | 6,089 | 2,628 |
Income tax expense | 1,383 | 1,242 | 468 |
Net income | 5,576 | 4,847 | 2,160 |
Preferred stock dividends | 115 | 169 | 148 |
Net income applicable to common shareholders | $ 5,461 | $ 4,678 | $ 2,012 |
Earnings per common share: | |||
Net income applicable to common shareholders earnings per common share - Basic (in dollars per share) | $ 17.53 | $ 14.25 | $ 5.78 |
Weighted average common shares - Basic (in shares) | 311.6 | 328.2 | 347.8 |
Net income applicable to common shareholders earnings per common share - Diluted (in dollars per share) | $ 17.31 | $ 14.03 | $ 5.70 |
Weighted average common shares - Diluted (in shares) | 315.5 | 333.5 | 353.2 |
Property and casualty insurance premiums | |||
Revenues | |||
Property and casualty insurance premiums (net of reinsurance ceded and indemnification programs of $1,141, $1,122 and $1,016) | $ 37,073 | $ 36,076 | $ 34,048 |
Life insurance | |||
Revenues | |||
Property and casualty insurance premiums (net of reinsurance ceded and indemnification programs of $1,141, $1,122 and $1,016) | 1,516 | 1,512 | 1,482 |
Insurance premiums, commissions and fees | 2,444 | 2,501 | 2,465 |
Other revenue | |||
Revenues | |||
Insurance premiums, commissions and fees | $ 1,065 | $ 1,054 | $ 939 |
Consolidated Statements of Op_2
Consolidated Statements of Operations (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Property-liability insurance premiums earned | $ 1,383 | $ 1,407 | $ 1,306 |
Property and casualty insurance claims and claims expense | |||
Reinsurance ceded amount | 530 | 524 | 1,378 |
Life contract benefits | |||
Reinsurance ceded amount | 155 | 165 | 240 |
Interest credited to contractholder funds | |||
Reinsurance ceded amount | 27 | 20 | 24 |
Property and casualty insurance premiums | |||
Property-liability insurance premiums earned | 1,141 | 1,122 | 1,016 |
Reinsurance ceded | |||
Life and annuity premiums and contract charges | $ 242 | $ 285 | $ 290 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 5,576 | $ 4,847 | $ 2,160 |
Changes in: | |||
Unrealized net capital gains and losses | 1,293 | 1,889 | (754) |
Unrealized foreign currency translation adjustments | 52 | (10) | (48) |
Unamortized pension and other postretirement prior service credit | 9 | (47) | (59) |
Other comprehensive income (loss), after-tax | 1,354 | 1,832 | (861) |
Comprehensive income | $ 6,930 | $ 6,679 | $ 1,299 |
Consolidated Statements of Fina
Consolidated Statements of Financial Position - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Investments | ||
Fixed income securities, at fair value (amortized cost, net $61,451 and $56,293) | $ 66,354 | $ 59,044 |
Equity securities, at fair value (cost $3,853 and $6,568) | 4,710 | 8,162 |
Mortgage loans, net | 4,075 | 4,817 |
Limited partnership interests | 7,609 | 8,078 |
Short-term investments | 7,800 | 4,256 |
Other, net | 3,689 | 4,005 |
Total investments | 94,237 | 88,362 |
Cash | 377 | 338 |
Premium installment receivables, net | 6,479 | 6,472 |
Deferred policy acquisition costs | 4,700 | 4,699 |
Reinsurance and indemnification recoverables, net | 9,220 | 9,211 |
Accrued investment income | 600 | 600 |
Property and equipment, net | 1,057 | 1,145 |
Goodwill | 2,544 | 2,545 |
Other assets, net | 3,429 | 3,534 |
Separate Accounts | 3,344 | 3,044 |
Total assets | 125,987 | 119,950 |
Liabilities | ||
Reserve for property and casualty insurance claims and claims expense | 27,610 | 27,712 |
Reserve for life-contingent contract benefits | 12,768 | 12,300 |
Contractholder funds | 17,213 | 17,692 |
Unearned premiums | 15,949 | 15,343 |
Claim payments outstanding | 957 | 929 |
Deferred income taxes | 1,355 | 1,154 |
Other liabilities and accrued expenses | 8,749 | 9,147 |
Long-term debt | 7,825 | 6,631 |
Separate Accounts | 3,344 | 3,044 |
Total liabilities | 95,770 | 93,952 |
Commitments and Contingent Liabilities (Note 7, 8 and 14) | ||
Shareholders’ equity | ||
Preferred stock and additional capital paid-in, $1 par value, 25 million shares authorized, 81.0 thousand and 92.5 thousand shares issued and outstanding, $2,025 and $2,313 aggregate liquidation preference | 1,970 | 2,248 |
Common stock, $.01 par value, 2.0 billion shares authorized and 900 million issued, 304 million and 319 million shares outstanding | 9 | 9 |
Additional capital paid-in | 3,498 | 3,463 |
Retained income | 52,767 | 48,074 |
Treasury stock, at cost (596 million and 581 million shares) | (31,331) | (29,746) |
Accumulated other comprehensive income: | ||
Unrealized net capital gains and losses on fixed income securities with credit losses | 0 | 70 |
Other unrealized net capital gains and losses | 3,860 | 2,094 |
Unrealized adjustment to DAC, DSI and insurance reserves | (680) | (277) |
Total unrealized net capital gains and losses | 3,180 | 1,887 |
Unrealized foreign currency translation adjustments | (7) | (59) |
Unamortized pension and other postretirement prior service credit | 131 | 122 |
Total accumulated other comprehensive income ("AOCI") | 3,304 | 1,950 |
Total shareholders’ equity | 30,217 | 25,998 |
Total liabilities and shareholders’ equity | $ 125,987 | $ 119,950 |
Consolidated Statements of Fi_2
Consolidated Statements of Financial Position (Parenthetical) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Amortized cost, net | $ 61,451 | $ 56,293 |
Equity securities, at fair value, cost | 3,853 | 6,568 |
Other short term Investments, amortized cost | $ 7,800 | $ 4,256 |
Preferred stock, par or stated value per share (in USD per share) | $ 1 | $ 1 |
Preferred stock, shares authorized (in shares) | 25,000,000 | 25,000,000 |
Preferred stock, shares issued (in shares) | 81,000 | 92,500 |
Preferred stock, shares outstanding (in shares) | 81,000 | 92,500 |
Preferred Stock, liquidation preference | $ 2,025 | $ 2,313 |
Common stock, par or stated value per share (in USD per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 2,000,000,000 | 2,000,000,000 |
Common stock, shares, issued (in shares) | 900,000,000 | 900,000,000 |
Common stock, shares, outstanding (in shares) | 304,000,000 | 319,000,000 |
Treasury stock, shares (in shares) | 596,000,000 | 581,000,000 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders’ Equity - USD ($) $ in Millions | Total | Preferred stock par value | Preferred stock additional capital paid-in | Common stock par value | Common stock additional capital paid-in | Retained income | Retained incomeCumulative effect of change in accounting principle | Deferred Employee Stock Ownership Plan (“ESOP”) expense | Treasury stock | Accumulated other comprehensive income (loss) | Accumulated other comprehensive income (loss)Cumulative effect of change in accounting principle |
Balance, beginning of year at Dec. 31, 2017 | $ 1,746 | $ 3,313 | $ 41,579 | $ 1,088 | $ (3) | $ (25,982) | $ 1,889 | $ (910) | |||
Increase (decrease) in equity [Roll forward] | |||||||||||
Preferred stock issuance, net of issuance costs | 557 | ||||||||||
Preferred stock redemption | (373) | ||||||||||
Forward contract on accelerated share repurchase agreement | (105) | ||||||||||
Equity incentive plans activity | 102 | ||||||||||
Net income | $ 2,160 | 2,160 | |||||||||
Dividends on common stock (declared per share of $2.16, $2.00 and $1.84) | (646) | ||||||||||
Dividends on preferred stock | (148) | ||||||||||
Payments | 0 | ||||||||||
Shares acquired | (2,198) | ||||||||||
Shares reissued under equity incentive plans, net | 95 | ||||||||||
Change in unrealized net capital gains and losses | (754) | (754) | |||||||||
Change in unrealized foreign currency translation adjustments | (48) | (48) | |||||||||
Change in unamortized pension and other postretirement prior service credit | (59) | (59) | |||||||||
Balance, end of year at Dec. 31, 2018 | 21,312 | $ 0 | 1,930 | $ 9 | 3,310 | 44,033 | 21 | (3) | (28,085) | 118 | 0 |
Increase (decrease) in equity [Roll forward] | |||||||||||
Preferred stock issuance, net of issuance costs | 1,414 | ||||||||||
Preferred stock redemption | (1,096) | ||||||||||
Forward contract on accelerated share repurchase agreement | 75 | ||||||||||
Equity incentive plans activity | 78 | ||||||||||
Net income | 4,847 | 4,847 | |||||||||
Dividends on common stock (declared per share of $2.16, $2.00 and $1.84) | (658) | ||||||||||
Dividends on preferred stock | (169) | ||||||||||
Payments | 3 | ||||||||||
Shares acquired | (1,810) | ||||||||||
Shares reissued under equity incentive plans, net | 149 | ||||||||||
Change in unrealized net capital gains and losses | 1,889 | 1,889 | |||||||||
Change in unrealized foreign currency translation adjustments | (10) | (10) | |||||||||
Change in unamortized pension and other postretirement prior service credit | (47) | (47) | |||||||||
Balance, end of year at Dec. 31, 2019 | 25,998 | 0 | 2,248 | 9 | 3,463 | 48,074 | $ (88) | 0 | (29,746) | 1,950 | $ 0 |
Increase (decrease) in equity [Roll forward] | |||||||||||
Preferred stock issuance, net of issuance costs | 0 | ||||||||||
Preferred stock redemption | (278) | ||||||||||
Forward contract on accelerated share repurchase agreement | (38) | ||||||||||
Equity incentive plans activity | 73 | ||||||||||
Net income | 5,576 | 5,576 | |||||||||
Dividends on common stock (declared per share of $2.16, $2.00 and $1.84) | (680) | ||||||||||
Dividends on preferred stock | (115) | ||||||||||
Payments | 0 | ||||||||||
Shares acquired | (1,700) | ||||||||||
Shares reissued under equity incentive plans, net | 115 | ||||||||||
Change in unrealized net capital gains and losses | 1,293 | 1,293 | |||||||||
Change in unrealized foreign currency translation adjustments | 52 | 52 | |||||||||
Change in unamortized pension and other postretirement prior service credit | 9 | 9 | |||||||||
Balance, end of year at Dec. 31, 2020 | $ 30,217 | $ 0 | $ 1,970 | $ 9 | $ 3,498 | $ 52,767 | $ 0 | $ (31,331) | $ 3,304 |
Consolidated Statements of Sh_2
Consolidated Statements of Shareholders’ Equity (Parenthetical) - $ / shares | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Statement of Stockholders' Equity [Abstract] | |||
Cash dividends declared per common share (in dollars per share) | $ 2.16 | $ 2 | $ 1.84 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Cash flows from operating activities | |||
Net income | $ 5,576 | $ 4,847 | $ 2,160 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation, amortization and other non-cash items | 686 | 647 | 511 |
Realized capital gains (losses) | (1,356) | (1,885) | 877 |
Pension and other postretirement remeasurement (gains) losses | (51) | 114 | 468 |
Gain on disposition of operations | (4) | (6) | (6) |
Interest credited to contractholder funds | 638 | 640 | 654 |
Impairment of purchased intangibles | 0 | 106 | 0 |
Changes in: | |||
Policy benefits and other insurance reserves | (682) | (508) | 469 |
Unearned premiums | 598 | 801 | 915 |
Deferred policy acquisition costs | (125) | (85) | (296) |
Premium installment receivables, net | (3) | (299) | (396) |
Reinsurance recoverables, net | (11) | 320 | (656) |
Income taxes | (232) | 487 | (380) |
Other operating assets and liabilities | 457 | (50) | 855 |
Net cash provided by operating activities | 5,491 | 5,129 | 5,175 |
Proceeds from sales | |||
Fixed income securities | 31,950 | 29,849 | 33,183 |
Equity securities | 8,405 | 5,277 | 6,859 |
Limited partnership interests | 1,350 | 756 | 764 |
Mortgage loans | 230 | 0 | 0 |
Other investments | 340 | 303 | 533 |
Investment collections | |||
Fixed income securities | 2,235 | 2,570 | 3,466 |
Mortgage loans | 626 | 695 | 529 |
Other investments | 209 | 254 | 488 |
Investment purchases | |||
Fixed income securities | (38,121) | (31,317) | (36,960) |
Equity securities | (4,648) | (7,176) | (5,936) |
Limited partnership interests | (1,265) | (1,332) | (1,679) |
Mortgage loans | (203) | (844) | (664) |
Other investments | (371) | (666) | (864) |
Change in short-term and other investments, net | (3,871) | (725) | (603) |
Purchases of property and equipment, net | (308) | (433) | (277) |
Acquisition of operations | 1 | (18) | (558) |
Net cash used in investing activities | (3,441) | (2,807) | (1,719) |
Cash flows from financing activities | |||
Proceeds from issuance of long-term debt | 1,189 | 491 | 498 |
Redemption and repayment of long-term debt | 0 | (317) | (400) |
Proceeds from issuance of preferred stock | 0 | 1,414 | 557 |
Redemption of preferred stock | (288) | (1,132) | (385) |
Contractholder fund deposits | 991 | 996 | 1,010 |
Contractholder fund withdrawals | (1,494) | (1,662) | (1,967) |
Dividends paid on common stock | (668) | (653) | (614) |
Dividends paid on preferred stock | (108) | (134) | (134) |
Treasury stock purchases | (1,737) | (1,735) | (2,303) |
Shares reissued under equity incentive plans, net | 63 | 120 | 73 |
Other | 41 | 129 | 91 |
Net cash used in financing activities | (2,011) | (2,483) | (3,574) |
Net increase (decrease) in cash | 39 | (161) | (118) |
Cash at beginning of year | 338 | 499 | 617 |
Cash at end of year | $ 377 | $ 338 | $ 499 |
General
General | 12 Months Ended |
Dec. 31, 2020 | |
General | |
General | Note 1 General Basis of presentation The accompanying consolidated financial statements include the accounts of The Allstate Corporation (the “Corporation”) and its wholly owned subsidiaries, primarily Allstate Insurance Company (“AIC”), a property and casualty insurance company with various property and casualty and life and investment subsidiaries, including Allstate Life Insurance Company (“ALIC”) (collectively referred to as the “Company” or “Allstate”). These consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). All significant intercompany accounts and transactions have been eliminated. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Nature of operations Allstate is engaged, principally in the United States, in the property and casualty insurance and life insurance businesses. Allstate is one of the country’s largest personal property and casualty insurers and is organized into seven reportable segments: Allstate Protection, Discontinued Lines and Coverages, Protection Services (previously Service Businesses), Allstate Life, Allstate Benefits, Allstate Annuities, and Corporate and Other. Allstate’s primary business is the sale of private passenger auto and homeowners insurance. The Company also offers several other personal property and casualty insurance products, select commercial property and casualty coverages, consumer product protection plans, device and mobile data collection services and analytic solutions using automotive telematics information, roadside assistance, finance and insurance products, life insurance, voluntary accident and health insurance and identity protection. Allstate primarily distributes its products through exclusive agents, financial specialists, independent agents and brokers, major retailers, contact centers and the internet. Risks and uncertainties Allstate has exposure to catastrophic events, including wind and hail, wildfires, tornadoes, hurricanes, tropical storms, earthquakes, volcanic eruptions, terrorism and industrial accidents. Catastrophes, an inherent risk of the property and casualty insurance business, have contributed, and will continue to contribute, to material year-to-year fluctuations in the Company’s results of operations and financial position (see Note 8). The nature and level of catastrophic loss experienced in any period cannot be predicted and could be material to results of operations and financial position. The Company considers the following categories and locations to be the greatest areas of potential catastrophe losses: • Wildfires — California, Oregon, Colorado, and Texas • Hurricanes — Major metropolitan centers in counties along the eastern and gulf coasts of the United States • Wind/Hail, Rain and Tornado — Texas, Illinois, Georgia and Colorado • Earthquakes and fires following earthquakes —Major metropolitan areas near fault lines in the states of California, Oregon, Washington, South Carolina, Missouri, Kentucky and Tennessee Recent development The Novel Coronavirus Pandemic or COVID-19 (“Coronavirus ”) resulted in governments worldwide enacting emergency measures to combat the spread of the virus. These measures, which have included the implementation of travel restrictions, government-imposed shelter-in-place orders, quarantine periods, social distancing, and restrictions on large gatherings, have caused material disruption to businesses globally, resulting in increased unemployment, a recession and increased economic uncertainty. Additionally, there is no way of predicting with certainty how long the pandemic might last, including the potential for restrictions being restored or new restrictions being implemented that could result in further economic volatility. The magnitude and duration of the global pandemic and the impact of actions taken by governmental authorities, businesses and consumers, including timing of vaccine distribution, to mitigate health risks create significant uncertainty. The Company will continue to closely monitor and proactively adapt to developments and changing conditions. Currently, it is not possible to reliably estimate the length and severity of the pandemic or its impact to the Company’s operations, but the effects could be material and may continue, emerge, evolve or accelerate in 2021. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2 Summary of Significant Accounting Policies Investments Fixed income securities include bonds, asset-backed securities (“ABS”) and mortgage-backed securities (“MBS”). MBS includes residential and commercial mortgage-backed securities. Fixed income securities, which may be sold prior to their contractual maturity, are designated as available-for-sale (“AFS”) and are carried at fair value. The difference between amortized cost, net of credit loss allowances (“amortized cost, net”) and fair value, net of deferred income taxes and related life and annuity deferred policy acquisition costs (“DAC”), deferred sales inducement costs (“DSI”) and reserves for life-contingent contract benefits, is reflected as a component of AOCI. The Company excludes accrued interest receivable from the amortized cost basis of its AFS fixed income securities. Cash received from calls and make-whole payments is reflected as a component of proceeds from sales and cash received from maturities and pay-downs is reflected as a component of investment collections within the Consolidated Statements of Cash Flows. Equity securities primarily include common stocks, exchange traded and mutual funds, non-redeemable preferred stocks and real estate investment trust equity investments. Certain exchange traded and mutual funds have fixed income securities as their underlying investments. Equity securities are carried at fair value. Equity securities without readily determinable or estimable fair values are measured using the measurement alternative, which is cost less impairment, if any, and adjustments resulting from observable price changes in orderly transactions for the identical or similar investment of the same issuer. Mortgage loans and loans reported in other investments (bank loans and agent loans) are carried at amortized cost, net, which represent the amount expected to be collected. The Company excludes accrued interest receivable from the amortized cost basis of its mortgage, bank and agent loans. Credit loss allowances are estimates of expected credit losses, established for loans upon origination or purchase, and are established considering all relevant information available, including past events, current conditions, and reasonable and supportable forecasts over the life of the loans. Loans are evaluated on a pooled basis when they share similar risk characteristics; otherwise, they are evaluated individually. Investments in limited partnership interests are primarily accounted for in accordance with the equity method of accounting (“EMA”) and include interests in private equity funds, real estate funds and other funds. Investments in limited partnership interests purchased prior to January 1, 2018, where the Company’s interest is so minor that it exercises virtually no influence over operating and financial policies, are accounted for at fair value primarily utilizing the net asset value (“NAV”) as a practical expedient to determine fair value. Short-term investments, including money market funds, commercial paper, U.S. Treasury bills and other short-term investments, are carried at fair value. Other investments primarily consist of bank loans, policy loans, real estate, agent loans and derivatives. Bank loans are primarily senior secured corporate loans. Policy loans are carried at unpaid principal balances. Real estate is carried at cost less accumulated depreciation. Agent loans are loans issued to exclusive Allstate agents. Derivatives are carried at fair value. Investment income primarily consists of interest, dividends, income from limited partnership interests, rental income from real estate, and income from certain derivative transactions. Interest is recognized on an accrual basis using the effective yield method and dividends are recorded at the ex-dividend date. Interest income for ABS and MBS is determined considering estimated pay-downs, including prepayments, obtained from third-party data sources and internal estimates. Actual prepayment experience is periodically reviewed, and effective yields are recalculated when differences arise between the prepayments originally anticipated and the actual prepayments received and currently anticipated. For ABS and MBS of high credit quality with fixed interest rates, the effective yield is recalculated on a retrospective basis. For all others, the effective yield is generally recalculated on a prospective basis. Net investment income for AFS fixed income securities includes the impact of accreting the credit loss allowance for the time value of money. Accrual of income is suspended for fixed income securities when the timing and amount of cash flows expected to be received is not reasonably estimable. Accrual of income is suspended for mortgage loans, bank loans and agent loans that are in default or when full and timely collection of principal and interest payments is not probable. Accrued income receivable is monitored for recoverability and when not expected to be collected is written off through net investment income. Cash receipts on investments on nonaccrual status are generally recorded as a reduction of amortized cost. Income from limited partnership interests carried at fair value is recognized based upon the changes in fair value of the investee’s equity primarily determined using NAV. Income from EMA limited partnership interests is recognized based on the Company’s share of the partnerships’ earnings. Income from EMA limited partnership interests is generally recognized on a three month delay due to the availability of the related financial statements from investees. Realized capital gains and losses include gains and losses on investment sales, changes in the credit loss allowances related to fixed income securities, mortgage loans, bank loans and agent loans, impairments, valuation changes of equity investments, including equity securities and certain limited partnerships where the underlying assets are predominately public equity securities, and periodic changes in fair value and settlements of certain derivatives, including hedge ineffectiveness. Realized capital gains and losses on investment sales are determined on a specific identification basis and are net of credit losses already recognized through an allowance. Derivative and embedded derivative financial instruments Derivative financial instruments include interest rate swaps, credit default swaps, futures (interest rate and equity), options (including swaptions), interest rate caps, warrants and rights, foreign currency swaps, foreign currency forwards, total return swaps and certain investment risk transfer reinsurance agreements. Derivatives required to be separated from the host instrument and accounted for as derivative financial instruments (“subject to bifurcation”) are embedded in equity-indexed life and annuity contracts and reinsured variable annuity contracts. All derivatives are accounted for on a fair value basis and reported as other investments, other assets, other liabilities and accrued expenses or contractholder funds. Embedded derivative instruments subject to bifurcation are also accounted for on a fair value basis and are reported together with the host contract. The change in fair value of derivatives embedded in life and annuity product contracts and subject to bifurcation is reported in life and annuity contract benefits or interest credited to contractholder funds. Cash flows from embedded derivatives subject to bifurcation and derivatives receiving hedge accounting are reported consistently with the host contracts and hedged risks, respectively, within the Consolidated Statements of Cash Flows. Cash flows from other derivatives are reported in cash flows from investing activities within the Consolidated Statements of Cash Flows. When derivatives meet specific criteria, they may be designated as accounting hedges and accounted for as fair value, cash flow, foreign currency fair value or foreign currency cash flow hedges. The hedged item may be either all or a specific portion of a recognized asset, liability or an unrecognized firm commitment attributable to a particular risk for fair value hedges. At the inception of the hedge, the Company formally documents the hedging relationship and risk management objective and strategy. The documentation identifies the hedging instrument, the hedged item, the nature of the risk being hedged and the methodology used to assess the effectiveness of the hedging instrument in offsetting the exposure to changes in the hedged item’s fair value attributable to the hedged risk. For a cash flow hedge, this documentation includes the exposure to changes in the variability in cash flows attributable to the hedged risk. The Company does not exclude any component of the change in fair value of the hedging instrument from the effectiveness assessment. At each reporting date, the Company confirms that the hedging instrument continues to be highly effective in offsetting the hedged risk. Fair value hedges The change in fair value of hedging instruments used in fair value hedges of investment assets or a portion thereof is reported in net investment income, together with the change in fair value of the hedged items. The change in fair value of hedging instruments used in fair value hedges of contractholder funds liabilities or a portion thereof is reported in interest credited to contractholder funds, together with the change in fair value of the hedged items. Accrued periodic settlements on swaps are reported together with the changes in fair value of the related swaps in net investment income or interest credited to contractholder funds. The amortized cost, net for fixed income securities or the carrying value of a designated hedged liability is adjusted for the change in fair value of the hedged risk. Cash flow hedges For hedging instruments used in cash flow hedges, the changes in fair value of the derivatives are reported in AOCI. Amounts are reclassified to net investment income, realized capital gains and losses or interest expense as the hedged or forecasted transaction affects income. Accrued periodic settlements on derivatives used in cash flow hedges are reported in net investment income. The amount reported in AOCI for a hedged transaction is the cumulative gain or loss on the derivative instrument from inception of the hedge less gains or losses previously reclassified from AOCI into income. If the Company expects at any time that the loss reported in AOCI would lead to a net loss on the combination of the hedging instrument and the hedged transaction which may not be recoverable, a loss is recognized immediately in realized capital gains and losses. If an impairment loss is recognized on an asset or an additional obligation is incurred on a liability involved in a hedge transaction, any offsetting gain in AOCI is reclassified and reported together with the impairment loss or recognition of the obligation. Termination of hedge accounting If, subsequent to entering into a hedge transaction, the derivative becomes ineffective (including if the hedged item is sold or otherwise extinguished, the occurrence of a hedged forecasted transaction is no longer probable or the hedged asset has a credit loss), the Company may terminate the derivative position. The Company may also terminate derivative instruments or redesignate them as non-hedge as a result of other events or circumstances. If the derivative instrument is not terminated when a fair value hedge is no longer effective, the future gains and losses recognized on the derivative are reported in realized capital gains and losses. When a fair value hedge is no longer effective, is redesignated as non-hedge or when the derivative has been terminated, the fair value gain or loss on the hedged asset, liability or portion thereof previously recognized in income while the hedge was in place and used to adjust the amortized cost, net of hedged fixed income securities or mortgage loans or carrying value of a hedged liability, is amortized over the remaining life of the hedged asset, liability or portion thereof, and reflected in net investment income or interest credited to contractholder funds beginning in the period that hedge accounting is no longer applied. When a derivative instrument used in a cash flow hedge of an existing asset or liability is no longer effective or is terminated, the gain or loss recognized on the derivative is reclassified from AOCI to income as the hedged risk impacts income. If the derivative instrument is not terminated when a cash flow hedge is no longer effective, future gains and losses recognized on the derivative are reported in realized capital gains and losses. When a derivative instrument used in a cash flow hedge of a forecasted transaction is terminated because it is probable the forecasted transaction will not occur, the gain or loss recognized on the derivative is immediately reclassified from AOCI to realized capital gains and losses in the period that hedge accounting is no longer applied. Non-hedge derivative financial instruments For derivatives for which hedge accounting is not applied, the income statement effects, including fair value gains and losses and accrued periodic settlements, are reported either in realized capital gains and losses or in a single line item together with the results of the associated asset or liability for which risks are being managed. Securities loaned The Company’s business activities include securities lending transactions, which are used primarily to generate net investment income. The proceeds received in conjunction with securities lending transactions can be reinvested in short-term investments or fixed income securities. These transactions are short-term in nature, usually 30 days or less. The Company receives cash collateral for securities loaned in an amount generally equal to 102% and 105% of the fair value of domestic and foreign securities, respectively, and records the related obligations to return the collateral in other liabilities and accrued expenses. The carrying value of these obligations approximates fair value because of their relatively short-term nature. The Company monitors the market value of securities loaned on a daily basis and obtains additional collateral as necessary under the terms of the agreements to mitigate counterparty credit risk. The Company maintains the right and ability to repossess the securities loaned on short notice. Recognition of premium revenues and contract charges, and related benefits and interest credited Property and casualty insurance premiums include premiums from personal lines policies, protection plans, other contracts (primarily finance and insurance products) and roadside assistance. Personal lines insurance premiums are deferred and earned on a pro-rata basis over the terms of the policies, typically periods of six Revenues related to protection plans, other contracts (primarily finance and insurance products) and roadside assistance are deferred and earned over the term of the contract in a manner that recognizes revenue as obligations under the contracts are performed. Revenues from these products are classified as premiums as the products are backed by insurance. Protection plans and finance and insurance premiums are recognized using a cost-based incurrence method over the term of the contracts, which is generally over one assistance premiums are recognized evenly over the term of the contract as performance obligations are fulfilled. The portion of premiums written applicable to the unexpired terms of the policies is recorded as unearned premiums. Unearned premiums As of December 31, ($ in millions) 2020 2019 Allstate Protection $ 12,772 $ 12,567 Protection Services 3,167 2,765 Total $ 15,939 $ 15,332 For the year ended December 31, 2020, the Company recognized $1.11 billion of Property and casualty insurance premiums for Protection Services that were included in the unearned premium balance as of December 31, 2019. For the year ended December 31, 2019, the Company recognized $996 million of Property and casualty insurance premiums for Protection Services that were included in the unearned premium balance as of December 31, 2018. The Company expects to recognize approximately $1.30 billion, $861 million and $1.00 billion of the December 31, 2020 the unearned premium balance in 2021, 2022 and thereafter, respectively. Premium installment receivables represent premiums written and not yet collected, net of the credit loss allowance for uncollectible premiums. These receivables are primarily outstanding for one year or less. The Company utilizes historical internal data including aging analyses to estimate allowances under current conditions and for the forecast period. The Company regularly evaluates and updates the data and adjusts its allowance as appropriate. The increase in the provision for credit losses primarily related to customer enrollment in the Allstate Special Payment plan implemented in response to the Coronavirus, starting in March 2020. Rollforward of credit loss allowance for premium installment receivables ($ in millions) For the year ended December 31, 2020 Beginning balance $ (91) Increase in the provision for credit losses (223) Write-off of uncollectible premium installment receivable amounts 161 Ending balance $ (153) Traditional life insurance products consist principally of products with fixed and guaranteed premiums and benefits, primarily term and whole life insurance products. Voluntary accident and health insurance products are expected to remain in force for an extended period and therefore are primarily classified as long-duration contracts. Premiums from these products are recognized as revenue when due from policyholders, net of any credit loss allowance for uncollectible premiums. Benefits are reflected in contract benefits and recognized over the life of the policy in relation to premiums. Immediate annuities with life contingencies, including certain structured settlement annuities, provide benefits over a period that extends beyond the period during which premiums are collected. Premiums from these products are recognized as revenue when received at the inception of the contract. Benefits are recognized in relation to premiums with the establishment of a reserve. The change in reserve over time is recorded in contract benefits and primarily relates to accumulation at the discount rate and annuitant mortality. Profits from these policies come primarily from investment income, which is recognized over the life of the contract. Interest-sensitive life contracts, such as universal life and single premium life, are insurance contracts whose terms are not fixed and guaranteed. The terms that may be changed include premiums paid by the contractholder, interest credited to the contractholder account balance and contract charges assessed against the contractholder account balance. Premiums from these contracts are reported as contractholder fund deposits. Contract charges consist of fees assessed against the contractholder account balance for the cost of insurance (mortality risk), contract administration and surrender of the contract prior to contractually specified dates. These contract charges are recognized as revenue when assessed against the contractholder account balance. Contract benefits include life-contingent benefit payments in excess of the contractholder account balance. Contracts that do not subject the Company to significant risk arising from mortality or morbidity are referred to as investment contracts. Fixed annuities, including market value adjusted annuities, equity-indexed annuities and immediate annuities without life contingencies, are considered investment contracts. Consideration received for such contracts is reported as contractholder fund deposits. Contract charges for investment contracts consist of fees assessed against the contractholder account balance for maintenance, administration and surrender of the contract prior to contractually specified dates, and are recognized when assessed against the contractholder account balance. Interest credited to contractholder funds represents interest accrued or paid on interest-sensitive life and investment contracts. Crediting rates for certain fixed annuities and interest-sensitive life contracts are adjusted periodically by the Company to reflect current market conditions subject to contractually guaranteed minimum rates. Crediting rates for indexed life and annuities are generally based on a specified interest rate index or an equity index, such as the Standard & Poor’s 500 Index (“S&P 500”). Interest credited also includes amortization of DSI expenses. DSI is amortized into interest credited using the same method used to amortize DAC. Contract charges for variable life and variable annuity products consist of fees assessed against the contractholder account balances for contract maintenance, administration, mortality, expense and surrender of the contract prior to contractually specified dates. Contract benefits incurred for variable annuity products include guaranteed minimum death, income, withdrawal and accumulation benefits. Substantially all of the Company’s variable annuity business is ceded through reinsurance agreements and the contract charges and contract benefits related thereto are reported net of reinsurance ceded. Other revenue Other revenue represents fees collected from policyholders relating to premium installment payments, commissions on sales of non-proprietary products, sales of identity protection services, fee-based services and other revenue transactions. Other revenue is recognized when performance obligations are fulfilled. Deferred policy acquisition and sales inducement costs Costs that are related directly to the successful acquisition of new or renewal insurance policies and investment contracts are deferred and recorded as DAC. These costs are principally agent and broker remuneration, premium taxes and certain underwriting expenses. DSI costs, which are deferred and recorded as other assets, relate to sales inducements offered on sales to new customers, principally on fixed annuity and interest-sensitive life contracts. These sales inducements are primarily in the form of additional credits to the customer’s account balance or enhancements to interest credited for a specified period which are in excess of the rates currently being credited to similar contracts without sales inducements. DSI is amortized into income using the same methodology and assumptions as DAC and is included in interest credited to contractholder funds. All other acquisition costs are expensed as incurred and included in operating costs and expenses. For property and casualty insurance, DAC is amortized into income as premiums are earned, typically over periods of six one For traditional life and voluntary accident and health insurance, DAC is amortized over the premium paying period of the related policies in proportion to the estimated revenues on such business. Assumptions used in the amortization of DAC and reserve calculations are established at the time the policy is issued and are generally not revised during the life of the policy. Any deviations from projected business in force resulting from actual policy terminations differing from expected levels and any estimated premium deficiencies may result in a change to the rate of amortization in the period such events occur. Generally, the amortization periods for these policies approximates the estimated lives of the policies. The Company periodically reviews the recoverability of DAC using actual experience and current assumptions. Traditional life insurance products, immediate annuities with life contingencies, and voluntary accident and health insurance products are reviewed individually. If actual experience and current assumptions are adverse compared to the original assumptions and a premium deficiency is determined to exist, any remaining unamortized DAC balance would be expensed to the extent not recoverable and the establishment of a premium deficiency reserve may be required for any remaining deficiency. For interest-sensitive life insurance, DAC and DSI are amortized in proportion to the incidence of the total present value of gross profits, which includes both actual historical gross profits (“AGP”) and estimated future gross profits (“EGP”) expected to be earned over the estimated lives of the contracts. The amortization is net of interest on the prior period DAC balance using rates established at the inception of the contracts. Actual amortization periods generally range from 15-30 years; however, incorporating estimates of the rate of customer surrenders, partial withdrawals and deaths generally results in the majority of the DAC being amortized during the surrender charge period, which is typically 10-20 years for interest-sensitive life. The rate of DAC and DSI amortization is reestimated and adjusted by a cumulative charge or credit to income when there is a difference between the incidence of actual versus expected gross profits in a reporting period or when there is a change in total EGP. When DAC or DSI amortization or a component of gross profits for a quarterly period is potentially negative (which would result in an increase of the DAC or DSI balance) as a result of negative AGP, the specific facts and circumstances surrounding the potential negative amortization are considered to determine whether it is appropriate for recognition in the consolidated financial statements. Negative amortization is only recorded when the increased DAC or DSI balance is determined to be recoverable based on facts and circumstances. Recapitalization of DAC and DSI is limited to the originally deferred costs plus interest. AGP and EGP primarily consist of the following components: contract charges for the cost of insurance less mortality costs and other benefits; investment income and realized capital gains and losses less interest credited; and surrender and other contract charges less maintenance expenses. The principal assumptions for determining the amount of EGP are mortality, persistency, expenses, investment returns, including capital gains and losses on assets supporting contract liabilities, interest crediting rates to contractholders, and the effects of any hedges. For products whose supporting investments are exposed to capital losses in excess of the Company’s expectations which may cause periodic AGP to become temporarily negative, EGP and AGP utilized in DAC and DSI amortization may be modified to exclude the excess capital losses. The Company performs quarterly reviews of DAC and DSI recoverability for interest-sensitive life and fixed annuity contracts using current assumptions. If a change in the amount of EGP is significant, it could result in the unamortized DAC or DSI not being recoverable, resulting in a charge which is included as a component of amortization of deferred policy acquisition costs or interest credited to contractholder funds, respectively. The DAC and DSI balances presented include adjustments to reflect the amount by which the amortization of DAC and DSI would increase or decrease if the unrealized capital gains or losses in the respective product investment portfolios were actually realized. The adjustments are recorded net of tax in AOCI. DAC, DSI and deferred income taxes determined on unrealized capital gains and losses and reported in AOCI recognize the impact on shareholders’ equity consistently with the amounts that would be recognized in the income statement on realized capital gains and losses. Customers of the Company may exchange one insurance policy or investment contract for another offered by the Company, or make modifications to an existing investment, life or property and casualty contract issued by the Company. These transactions are identified as internal replacements for accounting purposes. Internal replacement transactions determined to result in replacement contracts that are substantially unchanged from the replaced contracts are accounted for as continuations of the replaced contracts. Unamortized DAC and DSI related to the replaced contracts continue to be deferred and amortized in connection with the replacement contracts. For interest-sensitive life and investment contracts, the EGP of the replacement contracts are treated as a revision to the EGP of the replaced contracts in the determination of amortization of DAC and DSI. For traditional life and property and casualty insurance policies, any changes to unamortized DAC that result from replacement contracts are treated as prospective revisions. Any costs associated with the issuance of replacement contracts are characterized as maintenance costs and expensed as incurred. Internal replacement transactions determined to result in a substantial change to the replaced contracts are accounted for as an extinguishment of the replaced contracts, and any unamortized DAC and DSI related to the replaced contracts are eliminated with a corresponding charge to amortization of deferred policy acquisition costs or interest credited to contractholder funds, respectively. The costs assigned to the right to receive future cash flows from certain business purchased from other insurers are also classified as DAC in the Consolidated Statements of Financial Position. The costs capitalized represent the present value of future profits expected to be earned over the lives of the contracts acquired. These costs are amortized as profits emerge over the lives of the acquired business and are periodically evaluated for recoverability. The present value of future profits was $25 million and $39 million as of December 31, 2020 and 2019, respectively. Amortization expense of the present value of future profits was $14 million, $6 million and $2 million in 2020, 2019 and 2018, respectively. Reinsurance and Indemnification Reinsurance In the normal course of business, the Company seeks to limit aggregate and single exposure to losses on large risks by purchasing reinsurance. The Company has also used reinsurance to affect the disposition of certain blocks of business. Reinsurance does not extinguish the Company’s primary liability under the policies written. Therefore, in addition to establishing allowances as appropriate after evaluating reinsurers’ activities related to claims settlement practices and commutations, the Company evaluates reinsurer counterparty credit risk and records reinsurance recoverables net of credit loss allowances. The Company assesses counterparty credit risk for individual reinsurers separately when more relevant or on a pooled basis when shared risk characteristics exist. The evaluation considers the credit quality of the reinsurer and the period over which the recoverable balances are expected to be collected. The Company considers factors including past events, current conditions and reasonable and supportable forecasts in the development of the estimate of credit loss allowances. Allowances for property and casualty and life reinsurance recoverables are established primarily through risk-based evaluations. The property and casualty recoverable evaluation considers the credit rating of the reinsurer, the period over which the reinsurance recoverable balances are expected to be recovered and other relevant factors including historical experience of reinsurer failures. Reinsurers in liquidation or in default status are evaluated individually using the Company’s historical liquidation recovery assumptions and any other relevant information available including the most recent public information related to the financial condition or liquidation status of the reinsurer. For life reinsurance recoverables, the Company uses a probability of default and loss given default model developed independently of the Company to estimate current expected credit losses. The life reinsurance recoverable evaluation utilizes factors including historical industry factors based on the probability of liquidation, and incorporates current loss given default factors reflective of the industry. The Company monitors the credit ratings of reinsurer counterparties and evaluates the circumstances surrounding credit rating changes as inputs into its credit loss assessments. Uncollectible reinsurance recoverable balances are written off against the allowances when there is no reasonable expectation of recovery. The changes in the allowances are reported in property and casualty insurance claims and claims expense and life contract benefits. In |
Acquisitions and Disposition
Acquisitions and Disposition | 12 Months Ended |
Dec. 31, 2020 | |
Business Combinations [Abstract] | |
Acquisitions and Disposition | National General On July 7, 2020, the Company entered into a definitive agreement to acquire National General Holdings Corp. (“National General”), an insurance holding company serving customers through independent agents for property and casualty and accident and health products, for approximately $4 billion in cash. National General provides personal and commercial automobile, homeowners, umbrella, recreational vehicle, motorcycle, lender-placed property, supplemental health and other niche insurance products. This acquisition will increase the Company’s market share in personal property-liability and expand its independent agent distribution. On September 30, 2020, National General's shareholders voted to approve the definitive agreement. On November 19, 2020, the Company issued $600 million of 0.750% Senior Notes due 2025 and $600 million of 1.450% Senior Notes due 2030 to partially fund the acquisition. The transaction closed on January 4, 2021 and National General shareholders received $32.00 per share in cash from the Company, plus a closing dividend of $2.50 per share, providing $34.50 in total value per share. Due to the limited time since the closing date, the initial accounting for the acquisition is incomplete. As a result, the Company is unable to provide amounts recognized as of the closing date for the major classes of assets acquired and liabilities assumed. The Company will include this information in its Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2021. iCracked On February 12, 2019, the Company acquired iCracked Inc. (“iCracked”) which offers on-site, on-demand repair services for smartphones and tablets in North America, supporting Allstate Protection Plans' (formerly known as SquareTrade) operations. In conjunction with the iCracked acquisition, the Company recorded goodwill of $17 million. Subsequent event On January 26, 2021, the Company entered into a Stock Purchase Agreement (the “Purchase Agreement”) with Antelope US Holdings Company, an affiliate of an investment fund associated with The Blackstone Group Inc. to sell ALIC and certain affiliates for approximately $2.8 billion in cash. Allstate will retain ownership of ALNY while pursuing alternatives to sell or otherwise transfer risk to a third party. A loss on disposition estimated at $3 billion, after-tax, will be recorded in the first quarter of 2021. The loss on disposition is related to the run-off annuity segment, whose returns have been low. The ultimate amount of the loss on sale will be impacted by purchase price adjustments associated with certain pre-close transactions specified in the stock purchase agreement, changes in statutory capital and surplus prior to the closing date and the closing date equity of ALIC determined under GAAP, excluding unrealized gains and losses. The transaction is expected to close in the second half of 2021, subject to regulatory approvals and other customary closing conditions. |
Reportable Segments
Reportable Segments | 12 Months Ended |
Dec. 31, 2020 | |
Segment Reporting [Abstract] | |
Reportable Segments | Note 4 Reportable Segments The Company’s chief operating decision maker reviews financial performance and makes decisions about the allocation of resources for the seven reportable segments. These segments are described below and align with the Company’s key product and service offerings. Allstate Protection principally offers private passenger auto and homeowners insurance in the United States and Canada, with earned premiums accounting for 79.4% of Allstate’s 2020 consolidated revenues. Allstate Protection primarily operates in the U.S. (all 50 states and the District of Columbia (“D.C.”)) and Canada. For 2020, the top U.S. geographic locations for premiums earned by the Allstate Protection segment were Texas, California, New York and Florida. No other jurisdiction accounted for more than 5% of premium earned for Allstate Protection. Revenues from external customers generated outside the United States were $1.57 billion, $1.37 billion and $1.20 billion in 2020, 2019 and 2018, respectively. Discontinued Lines and Coverages includes property and casualty insurance coverage that primarily relates to policies written during the 1960s through the mid-1980s. Our exposure to asbestos, environmental and other discontinued lines claims arises principally from direct excess commercial insurance, assumed reinsurance coverage, direct primary commercial insurance and other businesses in run-off. Protection Services comprise Allstate Protection Plans, Allstate Dealer Services, Allstate Roadside, Arity and Allstate Identity Protection. Protection Services offer consumer product protection plans, finance and insurance products (including vehicle service contracts, guaranteed asset protection waivers, road hazard tire and wheel and paintless dent repair protection), roadside assistance, device and mobile data collection services and analytic solutions using automotive telematics information and identity protection. Protection Services primarily operate in the U.S. and Canada, with Allstate Protection Plans also offering services in Europe and Japan. Revenues from external customers generated outside the United States relate to consumer product protection plans sold primarily in the European Union and were $188 million, $95 million and $61 million in 2020, 2019 and 2018, respectively. Allstate Life consists of traditional, interest-sensitive and variable life insurance products. Allstate Life primarily operates in the U.S. (all 50 states and D.C.). For 2020, the top geographic locations for statutory direct life insurance premiums were New York, California, Texas, Florida and Illinois. No other jurisdiction accounted for more than 5% of statutory direct life insurance premiums. Allstate Benefits offers voluntary benefits products, including life, accident, critical illness, hospital, short-term disability and other health products. Allstate Benefits primarily operates in the U.S. (all 50 states and D.C.) and Canada. For 2020, the top geographic locations for statutory direct accident and health insurance premiums were Florida, Texas, North Carolina, and California. No other jurisdiction accounted for more than 5% of statutory direct accident and health insurance premiums. Revenues from external customers generated outside the United States relate to voluntary accident and health insurance sold in Canada and were not material. Allstate Annuities consists primarily of deferred fixed annuities and immediate annuities (including standard and sub-standard structured settlements). This segment is in run-off. Corporate and Other comprises holding company activities and certain non-insurance operations, including expenses associated with strategic initiatives. Allstate Protection and Discontinued Lines and Coverages segments comprise Property-Liability. The Company does not allocate investment income, realized capital gains and losses, or assets to the Allstate Protection and Discontinued Lines and Coverages segments. Management reviews assets at the Property-Liability, Protection Services, Allstate Life, Allstate Benefits, Allstate Annuities, and Corporate and Other levels for decision-making purposes. The accounting policies of the reportable segments are the same as those described in Note 2. The effects of intersegment transactions are eliminated in the consolidated results. For segment results, services provided by Protection Services to Allstate Protection are not eliminated as management considers those transactions in assessing the results of the respective segments. Measuring segment profit or loss The measure of segment profit or loss used in evaluating performance is underwriting income for the Allstate Protection and Discontinued Lines and Coverages segments and adjusted net income for the Protection Services, Allstate Life, Allstate Benefits, Allstate Annuities, and Corporate and Other segments. A reconciliation of these measures to net income applicable to common shareholders is provided below. Underwriting income is calculated as premiums earned and other revenue, less claims and claims expenses (“losses”), Shelter-in-Place Payback expense, amortization of DAC, operating costs and expenses, amortization or impairment of purchased intangibles and restructuring and related charges as determined using GAAP. Adjusted net income is net income applicable to common shareholders, excluding: • Realized capital gains and losses, after-tax, except for periodic settlements and accruals on non-hedge derivative instruments, which are reported with realized capital gains and losses but included in adjusted net income • Pension and other postretirement remeasurement gains and losses, after-tax • Valuation changes on embedded derivatives that are not hedged, after-tax • Amortization of DAC and DSI, to the extent they resulted from the recognition of certain realized capital gains and losses or valuation changes on embedded derivatives that are not hedged, after-tax • Business combination expenses and the amortization or impairment of purchased intangibles, after-tax • Gain (loss) on disposition of operations, after-tax • Adjustments for other significant non-recurring, infrequent or unusual items, when (a) the nature of the charge or gain is such that it is reasonably unlikely to recur within two years, or (b) there has been no similar charge or gain within the prior two years Reportable segments revenue information For the years ended December 31, ($ in millions) 2020 2019 2018 Property-Liability Insurance premiums Auto $ 24,640 $ 24,188 $ 22,970 Homeowners 8,254 7,912 7,517 Other personal lines 1,919 1,861 1,808 Commercial lines 767 882 655 Allstate Protection 35,580 34,843 32,950 Discontinued Lines and Coverages — — — Total Property-Liability insurance premiums 35,580 34,843 32,950 Other revenue 736 741 738 Net investment income 1,421 1,533 1,464 Realized capital gains (losses) 990 1,470 (639) Total Property-Liability 38,727 38,587 34,513 Protection Services Consumer product protection plans 909 633 503 Roadside assistance 188 238 263 Finance and insurance products 396 362 332 Intersegment premiums and service fees (1) 147 154 122 Other revenue (2) 208 188 82 Net investment income 44 42 27 Realized capital gains (losses) 30 32 (11) Total Protection Services 1,922 1,649 1,318 Allstate Life Traditional life insurance premiums 633 630 600 Accident and health insurance premiums 2 2 2 Interest-sensitive life insurance contract charges 705 711 713 Other revenue 121 125 119 Net investment income 502 514 505 Realized capital gains (losses) (10) 1 (14) Total Allstate Life 1,953 1,983 1,925 Allstate Benefits Traditional life insurance premiums 46 43 44 Accident and health insurance premiums 926 988 980 Interest-sensitive life insurance contract charges 122 114 111 Net investment income 78 83 77 Realized capital gains (losses) 8 12 (9) Total Allstate Benefits 1,180 1,240 1,203 Allstate Annuities Fixed annuities contract charges 10 13 15 Net investment income 761 917 1,096 Realized capital gains (losses) 279 346 (166) Total Allstate Annuities 1,050 1,276 945 Corporate and Other Net investment income 47 70 71 Realized capital gains (losses) 59 24 (38) Total Corporate and Other 106 94 33 Intersegment eliminations (1) (147) (154) (122) Consolidated revenues $ 44,791 $ 44,675 $ 39,815 (1) Intersegment insurance premiums and service fees are primarily related to Arity and Allstate Roadside and are eliminated in the consolidated financial statements. (2) Other revenue is primarily related to Allstate Identity Protection, Allstate Dealer Services, and Allstate Protection Plans. Reportable segments financial performance For the years ended December 31, ($ in millions) 2020 2019 2018 Property-Liability Allstate Protection $ 4,566 $ 2,912 $ 2,343 Discontinued Lines and Coverages (144) (108) (90) Total underwriting income 4,422 2,804 2,253 Net investment income 1,421 1,533 1,464 Income tax expense on operations (1,166) (887) (747) Realized capital gains (losses), after-tax 774 1,161 (500) Tax Legislation expense — — (5) Property-Liability net income applicable to common shareholders 5,451 4,611 2,465 Protection Services Adjusted net income 153 38 8 Realized capital gains (losses), after-tax 23 25 (9) Amortization of purchased intangibles, after-tax (84) (97) (74) Impairment of purchased intangibles, after-tax — (43) — Tax Legislation expense — — (4) Protection Services net income (loss) applicable to common shareholders 92 (77) (79) Allstate Life Adjusted net income 194 261 295 Realized capital gains (losses), after-tax (9) — (11) Valuation changes on embedded derivatives that are not hedged, after-tax (34) (9) — DAC and DSI amortization related to realized capital gains and losses and valuation changes on embedded derivatives that are not hedged, after-tax 8 (5) (8) Tax Legislation expense — — (16) Allstate Life net income applicable to common shareholders 159 247 260 Allstate Benefits Adjusted net income 96 115 124 Realized capital gains (losses), after-tax 7 9 (7) DAC and DSI amortization related to realized capital gains and losses, after-tax — — 1 Tax Legislation benefit — — — Allstate Benefits net income applicable to common shareholders 103 124 118 Allstate Annuities Adjusted net (loss) income (53) 10 131 Realized capital gains (losses), after-tax 221 274 (131) Valuation changes on embedded derivatives that are not hedged, after-tax (2) (6) 3 Premium deficiency for immediate annuities, after-tax (1) (178) — — Gain on disposition of operations, after-tax 3 4 4 Tax Legislation benefit — — 69 Allstate Annuities net (loss) income applicable to common shareholders (9) 282 76 Corporate and Other Adjusted net loss (428) (438) (406) Realized capital gains (losses), after-tax 47 19 (30) Pension and other postretirement remeasurement gains (losses), after-tax 39 (90) (370) Curtailment gain, after-tax 7 — — Business combination expenses, after-tax — — (7) Tax Legislation expense — — (15) Corporate and Other net loss applicable to common shareholders (335) (509) (828) Consolidated net income applicable to common shareholders $ 5,461 $ 4,678 $ 2,012 (1) Contract benefits increased by $225 million, pre-tax, for premium deficiency on immediate annuities with life contingencies due to updated investment and actuarial assumptions in the third quarter of 2020. Additional significant financial performance data For the years ended December 31, ($ in millions) 2020 2019 2018 Amortization of DAC Property-Liability $ 4,642 $ 4,649 $ 4,475 Protection Services 658 543 463 Allstate Life 149 173 132 Allstate Benefits 177 161 145 Allstate Annuities 4 7 7 Consolidated $ 5,630 $ 5,533 $ 5,222 Income tax expense (benefit) Property-Liability $ 1,382 $ 1,196 $ 613 Protection Services 26 (18) (19) Allstate Life 17 53 75 Allstate Benefits 28 35 32 Allstate Annuities (7) 73 (66) Corporate and Other (63) (97) (167) Consolidated $ 1,383 $ 1,242 $ 468 Interest expense is primarily incurred in the Corporate and Other segment. Capital expenditures for long-lived assets are generally made in Property-Liability as the Company does not allocate assets to the Allstate Protection and Discontinued Lines and Coverages segments. A portion of these long-lived assets are used by entities included in the Protection Services, Allstate Life, Allstate Benefits, Allstate Annuities and Corporate and Other segments and, accordingly, are charged to expenses in proportion to their use. Reportable segment total assets, investments and deferred policy acquisition costs (1) As of December 31, ($ in millions) 2020 2019 Assets Property-Liability $ 69,171 $ 67,243 Protection Services 6,177 5,746 Allstate Life 15,051 14,771 Allstate Benefits 2,905 2,915 Allstate Annuities 27,080 26,914 Corporate and Other 5,603 2,361 Consolidated $ 125,987 $ 119,950 Investments Property-Liability $ 50,134 $ 48,414 Protection Services 1,822 1,544 Allstate Life 12,406 11,914 Allstate Benefits 2,012 1,941 Allstate Annuities 22,291 22,221 Corporate and Other 5,572 2,328 Consolidated $ 94,237 $ 88,362 Deferred policy acquisition costs Property-Liability $ 1,608 $ 1,624 Protection Services 1,696 1,448 Allstate Life 909 1,079 Allstate Benefits 470 527 Allstate Annuities 17 21 Consolidated $ 4,700 $ 4,699 (1) The balances reflect the elimination of related party investments between segments. |
Investments
Investments | 12 Months Ended |
Dec. 31, 2020 | |
Investments [Abstract] | |
Investments | Note 5 Investments Portfolio composition As of December 31, ($ in millions) 2020 2019 Fixed income securities, at fair value $ 66,354 $ 59,044 Equity securities, at fair value 4,710 8,162 Mortgage loans, net 4,075 4,817 Limited partnership interests 7,609 8,078 Short-term investments, at fair value 7,800 4,256 Other, net 3,689 4,005 Total $ 94,237 $ 88,362 Amortized cost, gross unrealized gains (losses) and fair value for fixed income securities Amortized Gross unrealized Fair value ($ in millions) Gains Losses December 31, 2020 U.S. government and agencies $ 3,129 $ 94 $ (1) $ 3,222 Municipal 8,752 837 (2) 9,587 Corporate 47,226 3,981 (65) 51,142 Foreign government 1,013 42 — 1,055 ABS 1,260 15 (5) 1,270 MBS 71 7 — 78 Total fixed income securities $ 61,451 $ 4,976 $ (73) $ 66,354 December 31, 2019 U.S. government and agencies $ 4,971 $ 141 $ (26) $ 5,086 Municipal 8,080 551 (11) 8,620 Corporate 41,090 2,035 (47) 43,078 Foreign government 968 16 (5) 979 ABS 860 8 (6) 862 MBS 324 96 (1) 419 Total fixed income securities $ 56,293 $ 2,847 $ (96) $ 59,044 Scheduled maturities for fixed income securities As of December 31, 2020 ($ in millions) Amortized Fair value Due in one year or less $ 3,092 $ 3,136 Due after one year through five years 24,271 25,587 Due after five years through ten years 22,000 24,018 Due after ten years 10,757 12,265 60,120 65,006 ABS and MBS 1,331 1,348 Total $ 61,451 $ 66,354 Actual maturities may differ from those scheduled as a result of calls and make-whole payments by the issuers. ABS and MBS are shown separately because of potential prepayment of principal prior to contractual maturity dates. Net investment income For the years ended December 31, ($ in millions) 2020 2019 2018 Fixed income securities $ 2,136 $ 2,175 $ 2,077 Equity securities 98 206 170 Mortgage loans 220 220 217 Limited partnership interests 338 471 705 Short-term investments 23 102 73 Other 251 262 272 Investment income, before expense 3,066 3,436 3,514 Investment expense (213) (277) (274) Net investment income $ 2,853 $ 3,159 $ 3,240 Realized capital gains (losses) by asset type For the years ended December 31, ($ in millions) 2020 2019 2018 Fixed income securities $ 983 $ 461 $ (237) Equity securities 346 1,210 (594) Mortgage loans (47) — 2 Limited partnership interests 24 200 (101) Derivatives 53 (15) 46 Other (3) 29 7 Realized capital gains (losses) $ 1,356 $ 1,885 $ (877) Realized capital gains (losses) by transaction type For the years ended December 31, ($ in millions) 2020 2019 2018 Sales $ 1,017 $ 575 $ (215) Credit losses (1) (80) (47) (14) Valuation of equity investments (2) 366 1,372 (691) Valuation and settlements of derivative instruments 53 (15) 43 Realized capital gains (losses) $ 1,356 $ 1,885 $ (877) (1) Due to the adoption of the measurement of credit losses on financial instruments accounting standard, prior period other-than-temporary impairment write-downs are now presented as credit losses. (2) Includes valuation of equity securities and certain limited partnership interests where the underlying assets are predominately public equity securities. Gross realized gains (losses) on sales of fixed income securities For the years ended December 31, ($ in millions) 2020 2019 2018 Gross realized gains $ 1,209 $ 607 $ 120 Gross realized losses (221) (132) (347) The following table presents the net pre-tax appreciation (decline) recognized in net income of equity securities and limited partnership interests carried at fair value that are still held as of December 31, 2020 and 2019, respectively. Net appreciation (decline) recognized in net income For the years ended December 31, ($ in millions) 2020 2019 Equity securities $ 478 $ 1,073 Limited partnership interests carried at fair value 250 149 Total $ 728 $ 1,222 Credit losses recognized in net income (1) For the years ended December 31, ($ in millions) 2020 2019 2018 Assets Fixed income securities: Corporate $ (1) $ (7) $ (2) ABS (2) (4) (3) MBS (2) (3) (5) Total fixed income securities (5) (14) (10) Mortgage loans (39) — — Limited partnership interests (10) (6) (3) Other investments Bank loans (28) (26) — Agent loans — (1) (1) Total credit losses by asset type $ (82) $ (47) $ (14) Liabilities Commitments to fund commercial mortgage loans, bank loans and agent loans 2 — — Total $ (80) $ (47) $ (14) (1) Due to the adoption of the measurement of credit losses on financial instruments accounting standard, realized capital losses previously reported as other-than-temporary impairment write-downs are now presented as credit losses. Unrealized net capital gains and losses included in AOCI ($ in millions) Fair value Gross unrealized Unrealized net gains (losses) December 31, 2020 Gains Losses Fixed income securities $ 66,354 $ 4,976 $ (73) $ 4,903 Short-term investments 7,800 — — — Derivative instruments — — (3) (3) EMA limited partnerships (1) (4) Unrealized net capital gains and losses, pre-tax 4,896 Amounts recognized for: Insurance reserves (2) (496) DAC and DSI (3) (364) Amounts recognized (860) Deferred income taxes (856) Unrealized net capital gains and losses, after-tax $ 3,180 December 31, 2019 Fixed income securities $ 59,044 $ 2,847 $ (96) $ 2,751 Short-term investments 4,256 — — — Derivative instruments — — (3) (3) EMA limited partnerships (4) Unrealized net capital gains and losses, pre-tax 2,744 Amounts recognized for: Insurance reserves (126) DAC and DSI (224) Amounts recognized (350) Deferred income taxes (507) Unrealized net capital gains and losses, after-tax $ 1,887 (1) Unrealized net capital gains and losses for limited partnership interests represent the Company’s share of EMA limited partnerships’ OCI. Fair value and gross unrealized gains and losses are not applicable. (2) The insurance reserves adjustment represents the amount by which the reserve balance would increase if the net unrealized gains in the applicable product portfolios were realized and reinvested at lower interest rates, resulting in a premium deficiency. This adjustment primarily relates to structured settlement annuities with life contingencies (a type of immediate fixed annuity). (3) The DAC and DSI adjustment balance represents the amount by which the amortization of DAC and DSI would increase or decrease if the unrealized gains or losses in the respective product portfolios were realized. Change in unrealized net capital gains (losses) For the years ended December 31, ($ in millions) 2020 2019 2018 Fixed income securities $ 2,152 $ 2,715 $ (1,431) Short-term investments — — — Derivative instruments — — (2) EMA limited partnerships — (4) (1) Total 2,152 2,711 (1,434) Amounts recognized for: Insurance reserves (370) (126) 315 DAC and DSI (140) (191) 163 Amounts recognized (510) (317) 478 Deferred income taxes (349) (505) 202 Increase (decrease) in unrealized net capital gains and losses, after-tax $ 1,293 $ 1,889 $ (754) Mortgage loans The Company’s mortgage loans are commercial mortgage loans collateralized by a variety of commercial real estate property types located across the United States and totaled $4.08 billion and $4.82 billion, net of credit loss allowance, as of December 31, 2020 and 2019, respectively. Substantially all of the commercial mortgage loans are non-recourse to the borrower. Principal geographic distribution of commercial real estate exceeding 5% of the mortgage loans portfolio As of December 31, (% of mortgage loan portfolio carrying value) 2020 2019 Texas 20.6 % 16.9 % California 14.6 15.1 Florida 6.8 6.4 Illinois 6.1 7.1 North Carolina 5.1 4.5 New Jersey 3.5 5.6 Types of properties collateralizing the mortgage loan portfolio As of December 31, (% of mortgage loan portfolio carrying value) 2020 2019 Apartment complex 37.8 % 36.8 % Office buildings 23.2 22.6 Warehouse 14.6 16.8 Retail 13.9 13.4 Other 10.5 10.4 Total 100.0 % 100.0 % Contractual maturities of the mortgage loan portfolio As of December 31, 2020 ($ in millions) Number of loans Amortized cost, net Percent 2021 28 $ 277 6.8 % 2022 25 388 9.5 2023 42 556 13.7 2024 27 637 15.6 Thereafter 124 2,217 54.4 Total 246 $ 4,075 100.0 % Limited partnerships Investments in limited partnership interests include interests in private equity funds, real estate funds and other funds. Principal factors influencing carrying value appreciation or decline include operating performance, comparable public company earnings multiples, capitalization rates and the economic environment. For equity method limited partnerships, the Company recognizes an impairment loss when evidence demonstrates that the loss is other than temporary. Evidence of a loss in value that is other than temporary may include the absence of an ability to recover the carrying amount of the investment or the inability of the investee to sustain a level of earnings that would justify the carrying amount of the investment. Changes in fair value limited partnerships are recorded through net investment income and therefore are not tested for impairment. Carrying value for limited partnership interests As of December 31, 2020 As of December 31, 2019 ($ in millions) EMA Fair Value Total EMA Fair Value Total Private equity $ 4,417 $ 1,708 $ 6,125 $ 4,463 $ 1,668 $ 6,131 Real estate 958 116 1,074 899 142 1,041 Other (1) 410 — 410 902 4 906 Total $ 5,785 $ 1,824 $ 7,609 $ 6,264 $ 1,814 $ 8,078 (1) Other consists of certain limited partnership interests where the underlying assets are predominately public equity and debt securities. Municipal bonds The Company maintains a diversified portfolio of municipal bonds, including tax exempt and taxable securities, which totaled $9.59 billion and $8.62 billion as of December 31, 2020 and 2019, respectively. The municipal bond portfolio includes general obligations of state and local issuers and revenue bonds (including pre-refunded bonds, which are bonds for which an irrevocable trust has been established to fund the remaining payments of principal and interest). Principal geographic distribution of municipal bond issuers exceeding 5% of the portfolio As of December 31, (% of municipal bond portfolio carrying value) 2020 2019 California 12.8 % 8.6 % Texas 11.0 12.7 New York 5.3 3.7 Colorado 4.8 5.8 Washington 4.0 5.5 Short-term investments Short-term investments, including money market funds, commercial paper, U.S. Treasury bills and other short-term investments, are carried at fair value. As of December 31, 2020 and 2019, the fair value of short-term investments totaled $7.80 billion and $4.26 billion, respectively. Other investments Other investments primarily consist of bank loans, real estate, policy loans, agent loans and derivatives. Bank loans are primarily senior secured corporate loans and are carried at amortized cost, net. Policy loans are carried at unpaid principal balances. Real estate is carried at cost less accumulated depreciation. Agent loans are loans issued to exclusive Allstate agents and are carried at amortized cost, net. Derivatives are carried at fair value. Other investments by asset type As of December 31, ($ in millions) 2020 2019 Bank loans, net $ 1,018 $ 1,204 Real estate 974 1,005 Policy loans 754 894 Agent loans, net 631 666 Derivatives and other 312 236 Total $ 3,689 $ 4,005 Concentration of credit risk As of December 31, 2020, the Company is not exposed to any credit concentration risk of a single issuer and its affiliates greater than 10% of the Company’s shareholders’ equity, other than the U.S. government and its agencies and one government money market fund. Securities loaned The Company’s business activities include securities lending programs with third parties, mostly large banks. As of December 31, 2020 and 2019, fixed income and equity securities with a carrying value of $1.19 billion and $1.74 billion, respectively, were on loan under these agreements. Interest income on collateral, net of fees, was $3 million, $5 million and $4 million in 2020, 2019 and 2018, respectively. Other investment information Included in fixed income securities are below investment grade assets totaling $9.00 billion and $7.15 billion as of December 31, 2020 and 2019, respectively. As of December 31, 2020, fixed income securities and short-term investments with a carrying value of $141 million were on deposit with regulatory authorities as required by law. As of December 31, 2020, the carrying value of fixed income securities and other investments that were non-income producing was $80 million. Portfolio monitoring and credit losses Fixed income securities The Company has a comprehensive portfolio monitoring process to identify and evaluate each fixed income security that may require a credit loss allowance. For each fixed income security in an unrealized loss position, the Company assesses whether management with the appropriate authority has made the decision to sell or whether it is more likely than not the Company will be required to sell the security before recovery of the amortized cost basis for reasons such as liquidity, contractual or regulatory purposes. If a security meets either of these criteria, any existing credit loss allowance would be written-off against the amortized cost basis of the asset along with any remaining unrealized losses, with incremental losses recorded in earnings. If the Company has not made the decision to sell the fixed income security and it is not more likely than not the Company will be required to sell the fixed income security before recovery of its amortized cost basis, the Company evaluates whether it expects to receive cash flows sufficient to recover the entire amortized cost basis of the security. The Company calculates the estimated recovery value based on the best estimate of future cash flows considering past events, current conditions and reasonable and supportable forecasts. The estimated future cash flows are discounted at the security’s current effective rate and is compared to the amortized cost of the security. The determination of cash flow estimates is inherently subjective, and methodologies may vary depending on facts and circumstances specific to the security. All reasonably available information relevant to the collectability of the security is considered when developing the estimate of cash flows expected to be collected. That information generally includes, but is not limited to, the remaining payment terms of the security, prepayment speeds, the financial condition and future earnings potential of the issue or issuer, expected defaults, expected recoveries, the value of underlying collateral, origination vintage year, geographic concentration of underlying collateral, available reserves or escrows, current subordination levels, third-party guarantees and other credit enhancements. Other information, such as industry analyst reports and forecasts, credit ratings, financial condition of the bond insurer for insured fixed income securities, and other market data relevant to the realizability of contractual cash flows, may also be considered. The estimated fair value of collateral will be used to estimate recovery value if the Company determines that the security is dependent on the liquidation of collateral for ultimate settlement. If the Company does not expect to receive cash flows sufficient to recover the entire amortized cost basis of the fixed income security, a credit loss allowance is recorded in earnings for the shortfall in expected cash flows; however, the amortized cost, net of the credit loss allowance, may not be lower than the fair value of the security. The portion of the unrealized loss related to factors other than credit remains classified in AOCI. If the Company determines that the fixed income security does not have sufficient cash flow or other information to estimate a recovery value for the security, the Company may conclude that the entire decline in fair value is deemed to be credit related and the loss is recorded in earnings. When a security is sold or otherwise disposed or when the security is deemed uncollectible and written off, the Company removes amounts previously recognized in the credit loss allowance. Recoveries after write-offs are recognized when received. Accrued interest excluded from the amortized cost of fixed income securities totaled $548 million as of December 31, 2020 and is reported within the accrued investment income line of the Consolidated Statements of Financial Position. The Company monitors accrued interest and writes off amounts when they are not expected to be received. The Company’s portfolio monitoring process includes a quarterly review of all securities to identify instances where the fair value of a security compared to its amortized cost is below internally established thresholds. The process also includes the monitoring of other credit loss indicators such as ratings, ratings downgrades and payment defaults. The securities identified, in addition to other securities for which the Company may have a concern, are evaluated for potential credit losses using all reasonably available information relevant to the collectability or recovery of the security. Inherent in the Company’s evaluation of credit losses for these securities are assumptions and estimates about the financial condition and future earnings potential of the issue or issuer. Some of the factors that may be considered in evaluating whether a decline in fair value requires a credit loss allowance are: 1) the financial condition, near-term and long-term prospects of the issue or issuer, including relevant industry specific market conditions and trends, geographic location and implications of rating agency actions and offering prices; 2) the specific reasons that a security is in an unrealized loss position, including overall market conditions which could affect liquidity; and 3) the extent to which the fair value has been less than amortized cost. Rollforward of credit loss allowance for fixed income securities For the year ended ($ in millions) December 31, 2020 Beginning balance $ — Credit losses on securities for which credit losses not previously reported (5) Reduction of allowance related to sales 2 Write-offs — Ending balance (1) $ (3) (1) Allowance for fixed income securities as of December 31, 2020 comprised $1 million and $2 million of corporate bonds and ABS, respectively. Gross unrealized losses and fair value by type and length of time held in a continuous unrealized loss position Less than 12 months 12 months or more ($ in millions) Number of issues Fair value Unrealized losses Number of issues Fair value Unrealized losses Total unrealized losses December 31, 2020 Fixed income securities U.S. government and agencies 23 $ 185 $ (1) — $ — $ — $ (1) Municipal 47 148 (2) — — — (2) Corporate 127 1,229 (39) 27 187 (26) (65) Foreign government 7 7 — — — — — ABS 22 160 (2) 13 49 (3) (5) MBS 14 — — 67 — — — Total fixed income securities 240 $ 1,729 $ (44) 107 $ 236 $ (29) $ (73) Investment grade fixed income securities 163 $ 1,193 $ (13) 84 $ 117 $ (17) $ (30) Below investment grade fixed income securities 77 536 (31) 23 119 (12) (43) Total fixed income securities 240 $ 1,729 $ (44) 107 $ 236 $ (29) $ (73) December 31, 2019 Fixed income securities U.S. government and agencies 31 $ 1,713 $ (26) 10 $ 26 $ — $ (26) Municipal 307 576 (9) 1 14 (2) (11) Corporate 186 1,392 (20) 65 485 (27) (47) Foreign government 55 412 (4) 6 102 (1) (5) ABS 36 193 (2) 23 160 (4) (6) MBS 27 15 — 123 14 (1) (1) Total fixed income securities 642 $ 4,301 $ (61) 228 $ 801 $ (35) $ (96) Investment grade fixed income securities 581 $ 3,878 $ (41) 185 $ 594 $ (20) $ (61) Below investment grade fixed income securities 61 423 (20) 43 207 (15) (35) Total fixed income securities 642 $ 4,301 $ (61) 228 $ 801 $ (35) $ (96) Gross unrealized losses by unrealized loss position and credit quality as of December 31, 2020 ($ in millions) Investment grade Below investment grade Total Fixed income securities with unrealized loss position less than 20% of amortized cost, net (1) (2) $ (15) $ (24) $ (39) Fixed income securities with unrealized loss position greater than or equal to 20% of amortized cost, net (3) (4) (15) (19) (34) Total unrealized losses $ (30) $ (43) $ (73) (1) Below investment grade fixed income securities include $17 million that have been in an unrealized loss position for less than twelve months. (2) Related to securities with an unrealized loss position less than 20% of amortized cost, net, the degree of which suggests that these securities do not pose a high risk of having credit losses. (3) No below investment grade fixed income securities have been in an unrealized loss position for a period of twelve or more consecutive months. (4) Evaluated based on factors such as discounted cash flows and the financial condition and near-term and long-term prospects of the issue or issuer and were determined to have adequate resources to fulfill contractual obligations Investment grade is defined as a security having a rating of Aaa, Aa, A or Baa from Moody’s, a rating of AAA, AA, A or BBB from S&P Global Ratings (“S&P”), a comparable rating from another nationally recognized rating agency, or a comparable internal rating if an externally provided rating is not available. Market prices for certain securities may have credit spreads which imply higher or lower credit quality than the current third-party rating. Unrealized losses on investment grade securities are principally related to an increase in market yields which may include increased risk-free interest rates or wider credit spreads since the time of initial purchase. The unrealized losses are expected to reverse as the securities approach maturity. ABS and MBS in an unrealized loss position were evaluated based on actual and projected collateral losses relative to the securities’ positions in the respective securitization trusts, security specific expectations of cash flows, and credit ratings. This evaluation also takes into consideration credit enhancement, measured in terms of (i) subordination from other classes of securities in the trust that are contractually obligated to absorb losses before the class of security the Company owns, and (ii) the expected impact of other structural features embedded in the securitization trust beneficial to the class of securities the Company owns, such as overcollateralization and excess spread. Municipal bonds in an unrealized loss position were evaluated based on the underlying credit quality of the primary obligor, obligation type and quality of the underlying assets. As of December 31, 2020, the Company has not made the decision to sell and it is not more likely than not the Company will be required to sell fixed income securities with unrealized losses before recovery of the amortized cost basis. Loans The Company establishes a credit loss allowance for mortgage loans, bank loans and agent loans when they are originated or purchased, and for unfunded commitments unless they are unconditionally cancellable by the Company. The Company uses a probability of default and loss given default model for mortgage loans and bank loans to estimate current expected credit losses that considers all relevant information available including past events, current conditions, and reasonable and supportable forecasts over the life of an asset. The Company also considers such factors as historical losses, expected prepayments and various economic factors. For mortgage loans the Company considers origination vintage year and property level information such as debt service coverage, property type, property location and collateral value. For bank loans the Company considers the credit rating of the borrower, credit spreads and type of loan. After the reasonable and supportable forecast period, the Company’s model reverts to historical loss trends. Given the less complex and homogenous nature of agent loans, the Company estimates current expected credit losses using historical loss experience over the estimated life of the loans, adjusted for current conditions, reasonable and supportable forecasts and expected prepayments. Loans are evaluated on a pooled basis when they share similar risk characteristics. The Company monitors loans through a quarterly credit monitoring process to determine when they no longer share similar risk characteristics and are to be evaluated individually when estimating credit losses. Loans are written off against their corresponding allowances when there is no reasonable expectation of recovery. If a loan recovers after a write-off, the estimate of expected credit losses includes the expected recovery. Accrual of income is suspended for loans that are in default or when full and timely collection of principal and interest payments is not probable. Accrued income receivable is monitored for recoverability and when not expected to be collected is written off through net investment income. Cash receipts on loans on non-accrual status are generally recorded as a reduction of amortized cost. Accrued interest is excluded from the amortized cost of loans and is reported within the accrued investment income line of the Consolidated Statements of Financial Position. As of December 31, 2020, accrued interest totaled $15 million, $4 million and $2 million for mortgage loans, bank loans and agent loans, respectively. Mortgage loans When it is determined a mortgage loan shall be evaluated individually, the Company uses various methods to estimate credit losses on individual loans such as using collateral value less estimated costs to sell where applicable, including when foreclosure is probable or when repayment is expected to be provided substantially through the operation or sale of the collateral and the borrower is experiencing financial difficulty. When collateral value is used, the mortgage loans may not have a credit loss allowance when the fair value of the collateral exceeds the loan’s amortized cost. An alternative approach may be utilized to estimate credit losses using the present value of the loan’s expected future repayment cash flows discounted at the loan’s current effective interest rate. Individual loan credit loss allowances are adjusted for subsequent changes in the fair value of the collateral less costs to sell, when applicable, or present value of the loan’s expected future repayment cash flows. Debt service coverage ratio is considered a key credit quality indicator when mortgage loan credit loss allowances are estimated. Debt service coverage ratio represents the amount of estimated cash flow from the property available to the borrower to meet principal and interest payment obligations. Debt service coverage ratio estimates are updated annually or more frequently if conditions are warranted based on the Company’s credit monitoring process. Mortgage loans amortized cost by debt service coverage ratio distribution and year of origination December 31, 2020 December 31, 2019 ($ in millions) 2015 and prior 2016 2017 2018 2019 Current Total Total Below 1.0 $ 15 $ — $ — $ — $ — $ — $ 15 $ 56 1.0 - 1.25 133 27 36 70 48 24 338 225 1.26 - 1.50 378 41 144 187 333 6 1,089 1,237 Above 1.50 1,037 396 283 373 499 112 2,700 3,302 Amortized cost before allowance $ 1,563 $ 464 $ 463 $ 630 $ 880 $ 142 $ 4,142 $ 4,820 Allowance (1) (67) (3) Amortized cost, net $ 4,075 $ 4,817 (1) Due to the adoption of the measurement of credit losses on financial instruments accounting standard, prior valuation allowance is now presented as an allowance for expected credit losses. Mortgage loans with a debt service coverage ratio below 1.0 that are not considered impaired primarily relate to situations where the borrower has the financial capacity to fund the revenue shortfalls from the properties for the foreseeable term, the decrease in cash flows from the properties is considered temporary, or there are other risk mitigating factors such as additional collateral, escrow balances or borrower guarantees. Payments on all mortgage loans were current as of December 31, 2020, 2019 and 2018. During the fourth quarter of 2020, the Company sold $234 million of mortgage loans, net of a $17 million credit loss allowance, resulting in a net realized capital loss of $4 million. Rollforward of credit loss allowance for mortgage loans ($ in millions) For the year ended December 31, 2020 Beginning balance $ (3) Cumulative effect of change in accounting principle (42) Net increases related to credit losses (39) Reduction of allowance related to sales 17 Write-offs — Ending balance $ (67) Bank loans When it is determined a bank loan shall be evaluated individually, the Company uses various methods to estimate credit losses on individual loans such as the present value of the loan’s expected future repayment cash flows discounted at the loan’s current effective interest rate. Credit ratings of the borrower are considered a key credit quality indicator when bank loan credit loss allowances are estimated. The ratings are updated quarterly and are either received from a nationally recognized rating agency or a comparable internal rating is derived if an externally provided rating is not available. The year of origination is determined to be the year in which the asset is acquired. Bank loans amortized cost by credit rating and year of origination ($ in millions) As of December 31, 2020 2015 and prior 2016 2017 2018 2019 Current Total BBB $ — $ — $ 9 $ 7 $ 14 $ 13 $ 43 BB 20 2 25 58 53 54 212 B 11 23 115 141 122 195 607 CCC and below 7 16 44 50 74 32 223 Amortized cost before allowance $ 38 $ 41 $ 193 $ 256 $ 263 $ 294 $ 1,085 Allowance (67) Amortized cost, net $ 1,018 Rollforward of credit loss allowance for bank loans For the year ended December 31, 2020 ($ in millions) Beginning balance $ — Cumulative effect of change in accounting principle (53) Net increases related to credit losses (28) Reduction of allowance related to sales 9 Write-offs 5 Ending balance $ (67) Agent loans The Company monitors agent loans to determine when they should be removed from the pool and assessed for credit losses individually by using internal credit risk grades that classify the loans into risk categories. The categorization is based on relevant information about the ability of borrowers to service their debt, such as historical payment experience, current business trends, cash flow coverage and collateral quality. Internal credit risk grades are updated annually or more frequently if conditions are warranted based on the Company’s credit monitoring process. As of December 31, 2020, 85% of agent loans balance represents the top three highest credit quality categories. The allowance for agent loans totaled $5 million as of December 31, 2020 and did not change from January 1, 2020. |
Fair Value of Assets and Liabil
Fair Value of Assets and Liabilities | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Assets and Liabilities | Note 6 Fair Value of Assets and Liabilities Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The hierarchy for inputs used in determining fair value maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that observable inputs be used when available. Assets and liabilities recorded on the Consolidated Statements of Financial Position at fair value are categorized in the fair value hierarchy based on the observability of inputs to the valuation techniques as follows: Level 1: Assets and liabilities whose values are based on unadjusted quoted prices for identical assets or liabilities in an active market that the Company can access. Level 2: Assets and liabilities whose values are based on the following: (a) Quoted prices for similar assets or liabilities in active markets; (b) Quoted prices for identical or similar assets or liabilities in markets that are not active; or (c) Valuation models whose inputs are observable, directly or indirectly, for substantially the full term of the asset or liability. Level 3: Assets and liabilities whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. Unobservable inputs reflect the Company’s estimates of the assumptions that market participants would use in valuing the assets and liabilities. The availability of observable inputs varies by instrument. In situations where fair value is based on internally developed pricing models or inputs that are unobservable in the market, the determination of fair value requires more judgment. The degree of judgment exercised by the Company in determining fair value is typically greatest for instruments categorized in Level 3. In many instances, valuation inputs used to measure fair value fall into different levels of the fair value hierarchy. The category level in the fair value hierarchy is determined based on the lowest level input that is significant to the fair value measurement in its entirety. The Company uses prices and inputs that are current as of the measurement date, including during periods of market disruption. In periods of market disruption, the ability to observe prices and inputs may be reduced for many instruments. The Company is responsible for the determination of fair value and the supporting assumptions and methodologies. The Company gains assurance that assets and liabilities are appropriately valued through the execution of various processes and controls designed to ensure the overall reasonableness and consistent application of valuation methodologies, including inputs and assumptions, and compliance with accounting standards. For fair values received from third parties or internally estimated, the Company’s processes and controls are designed to ensure that the valuation methodologies are appropriate and consistently applied, the inputs and assumptions are reasonable and consistent with the objective of determining fair value, and the fair values are accurately recorded. For example, on a continuing basis, the Company assesses the reasonableness of individual fair values that have stale security prices or that exceed certain thresholds as compared to previous fair values received from valuation service providers or brokers or derived from internal models. The Company performs procedures to understand and assess the methodologies, processes and controls of valuation service providers. In addition, the Company may validate the reasonableness of fair values by comparing information obtained from valuation service providers or brokers to other third-party valuation sources for selected securities. The Company performs ongoing price validation procedures such as back-testing of actual sales, which corroborate the various inputs used in internal models to market observable data. When fair value determinations are expected to be more variable, the Company validates them through reviews by members of management who have relevant expertise and who are independent of those charged with executing investment transactions. The Company has two types of situations where investments are classified as Level 3 in the fair value hierarchy: (1) Specific inputs significant to the fair value estimation models are not market observable. This primarily occurs in the Company’s use of broker quotes to value certain securities where the inputs have not been corroborated to be market observable, and the use of valuation models that use significant non-market observable inputs. (2) Quotes continue to be received from independent third-party valuation service providers and all significant inputs are market observable; however, there has been a significant decrease in the volume and level of activity for the asset when compared to normal market activity such that the degree of market observability has declined to a point where categorization as a Level 3 measurement is considered appropriate. The indicators considered in determining whether a significant decrease in the volume and level of activity for a specific asset has occurred include the level of new issuances in the primary market, trading volume in the secondary market, the level of credit spreads over historical levels, applicable bid-ask spreads, and price consensus among market participants and other pricing sources. Certain assets are not carried at fair value on a recurring basis, including mortgage loans, bank loans, agent loans and policy loans and are only included in the fair value hierarchy disclosure when the individual investment is reported at fair value. In determining fair value, the Company principally uses the market approach which generally utilizes market transaction data for the same or similar instruments. To a lesser extent, the Company uses the income approach which involves determining fair values from discounted cash flow methodologies. For the majority of Level 2 and Level 3 valuations, a combination of the market and income approaches is used. Summary of significant inputs and valuation techniques for Level 2 and Level 3 assets and liabilities measured at fair value on a recurring basis Level 2 measurements • Fixed income securities: U.S. government and agencies, municipal, corporate - public and foreign government: The primary inputs to the valuation include quoted prices for identical or similar assets in markets that are not active, contractual cash flows, benchmark yields and credit spreads. Corporate - privately placed: Privately placed are valued using a discounted cash flow model that is widely accepted in the financial services industry and uses market observable inputs and inputs derived principally from, or corroborated by, observable market data. The primary inputs to the discounted cash flow model include an interest rate yield curve, as well as published credit spreads for similar assets in markets that are not active that incorporate the credit quality and industry sector of the issuer. Corporate - privately placed also includes redeemable preferred stock that are valued using quoted prices for identical or similar assets in markets that are not active, contractual cash flows, benchmark yields, underlying stock prices and credit spreads. ABS and MBS: The primary inputs to the valuation include quoted prices for identical or similar assets in markets that are not active, contractual cash flows, benchmark yields, collateral performance, and credit spreads. Certain ABS are valued based on non-binding broker quotes whose inputs have been corroborated to be market observable. Residential MBS include prepayment speeds as a primary input for valuation. • Equity securities: The primary inputs to the valuation include quoted prices or quoted net asset values for identical or similar assets in markets that are not active. • Short-term: The primary inputs to the valuation include quoted prices for identical or similar assets in markets that are not active, contractual cash flows, benchmark yields and credit spreads. • Other investments: Free-standing exchange listed derivatives that are not actively traded are valued based on quoted prices for identical instruments in markets that are not active. Over-the-counter (“OTC”) derivatives, including interest rate swaps, foreign currency swaps, total return swaps, foreign exchange forward contracts, certain options and certain credit default swaps, are valued using models that rely on inputs such as interest rate yield curves, implied volatilities, index price levels, currency rates, and credit spreads that are observable for substantially the full term of the contract. The valuation techniques underlying the models are widely accepted in the financial services industry and do not involve significant judgment. Level 3 measurements • Fixed income securities: Municipal: Comprise municipal bonds that are not rated by third-party credit rating agencies. The primary inputs to the valuation of these municipal bonds include quoted prices for identical or similar assets in markets that exhibit less liquidity relative to those markets supporting Level 2 fair value measurements, contractual cash flows, benchmark yields and credit spreads. Also included are municipal bonds valued based on non-binding broker quotes where the inputs have not been corroborated to be market observable and municipal bonds in default valued based on the present value of expected cash flows. Corporate - public and privately placed, ABS and MBS: Primarily valued based on non-binding broker quotes where the inputs have not been corroborated to be market observable. Other inputs for corporate fixed income securities include an interest rate yield curve, as well as published credit spreads for similar assets that incorporate the credit quality and industry sector of the issuer. • Equity securities: The primary inputs to the valuation include quoted prices or quoted net asset values for identical or similar assets in markets that exhibit less liquidity relative to those markets supporting Level 2 fair value measurements. • Short-term: For certain short-term investments, amortized cost is used as the best estimate of fair value. • Other investments: Certain OTC derivatives, such as interest rate caps, certain credit default swaps and certain options (including swaptions), are valued using models that are widely accepted in the financial services industry. These are categorized as Level 3 as a result of the significance of non-market observable inputs such as volatility. Other primary inputs include interest rate yield curves and credit spreads. • Contractholder funds: Derivatives embedded in certain life and annuity contracts are valued internally using models widely accepted in the financial services industry that determine a single best estimate of fair value for the embedded derivatives within a block of contractholder liabilities. The models primarily use stochastically determined cash flows based on the contractual elements of embedded derivatives, projected option cost and applicable market data, such as interest rate yield curves and equity index volatility assumptions. These are categorized as Level 3 as a result of the significance of non-market observable inputs. Investments excluded from the fair value hierarchy Limited partnerships carried at fair value, which do not have readily determinable fair values, use NAV provided by the investees and are excluded from the fair value hierarchy. These investments are generally not redeemable by the investees and generally cannot be sold without approval of the general partner. The Company receives distributions of income and proceeds from the liquidation of the underlying assets of the investees, which usually takes place in years 4-9 of the typical contractual life of 10-12 years. As of December 31, 2020, the Company has commitments to invest $395 million in these limited partnership interests. Assets and liabilities measured at fair value As of December 31, 2020 ($ in millions) Quoted prices in active markets for identical assets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Counterparty and cash collateral netting Total Assets Fixed income securities: U.S. government and agencies $ 2,863 $ 359 $ — $ 3,222 Municipal — 9,520 67 9,587 Corporate - public — 36,346 98 36,444 Corporate - privately placed — 14,568 130 14,698 Foreign government — 1,055 — 1,055 ABS — 1,213 57 1,270 MBS — 51 27 78 Total fixed income securities 2,863 63,112 379 66,354 Equity securities 3,882 410 418 4,710 Short-term investments 7,477 288 35 7,800 Other investments: Free-standing derivatives — 219 — $ (15) 204 Separate account assets 3,344 — — 3,344 Other assets 1 — — 1 Total recurring basis assets 17,567 64,029 832 (15) 82,413 Total assets at fair value $ 17,567 $ 64,029 $ 832 $ (15) $ 82,413 % of total assets at fair value 21.3 % 77.7 % 1.0 % — % 100.0 % Investments reported at NAV 1,824 Total $ 84,237 Liabilities Contractholder funds: Derivatives embedded in life and annuity contracts $ — $ — $ (516) $ (516) Other liabilities: Free-standing derivatives — (153) — $ 27 (126) Total recurring basis liabilities $ — $ (153) $ (516) $ 27 $ (642) % of total liabilities at fair value — % 23.8 % 80.4 % (4.2) % 100.0 % Assets and liabilities measured at fair value As of December 31, 2019 ($ in millions) Quoted prices in active markets for identical assets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Counterparty and cash collateral netting Total Assets Fixed income securities: U.S. government and agencies $ 4,689 $ 397 $ — $ 5,086 Municipal — 8,558 62 8,620 Corporate - public — 30,819 61 30,880 Corporate - privately placed — 12,084 114 12,198 Foreign government — 979 — 979 ABS — 797 65 862 MBS — 379 40 419 Total fixed income securities 4,689 54,013 342 59,044 Equity securities 7,407 384 371 8,162 Short-term investments 1,940 2,291 25 4,256 Other investments: Free-standing derivatives — 180 — $ (40) 140 Separate account assets 3,044 — — 3,044 Other assets 1 — — 1 Total recurring basis assets 17,081 56,868 738 (40) 74,647 Total assets at fair value $ 17,081 $ 56,868 $ 738 $ (40) $ 74,647 % of total assets at fair value 22.9 % 76.2 % 1.0 % (0.1) % 100.0 % Investments reported at NAV 1,814 Total $ 76,461 Liabilities Contractholder funds: Derivatives embedded in life and annuity contracts $ — $ — $ (462) $ (462) Other liabilities: Free-standing derivatives — (84) — $ 12 (72) Total recurring basis liabilities $ — $ (84) $ (462) $ 12 $ (534) % of total liabilities at fair value — % 15.7 % 86.5 % (2.2) % 100.0 % Quantitative information about the significant unobservable inputs used in Level 3 fair value measurements ($ in millions) Fair value Valuation technique Unobservable input Range Weighted average December 31, 2020 Derivatives embedded in life and annuity contracts – Equity-indexed and forward starting options $ (483) Stochastic cash flow model Projected option cost 1.0% - 4.2% 2.80% December 31, 2019 Derivatives embedded in life and annuity contracts – Equity-indexed and forward starting options $ (430) Stochastic cash flow model Projected option cost 1.0% - 4.2% 2.67% The embedded derivatives are equity-indexed and forward starting options in certain life and annuity products that provide customers with interest crediting rates based on the performance of the S&P 500. If the projected option cost increased (decreased), it would result in a higher (lower) liability fair value. As of December 31, 2020 and 2019, Level 3 fair value measurements of fixed income securities total $379 million and $342 million, respectively, and include $93 million and $50 million, respectively, of securities valued based on non-binding broker quotes where the inputs have not been corroborated to be market observable and $35 million and $36 million, respectively, of municipal fixed income securities that are not rated by third-party credit rating agencies. As the Company does not develop the Level 3 fair value unobservable inputs for these fixed income securities, they are not included in the table above. However, an increase (decrease) in credit spreads for fixed income securities valued based on non-binding broker quotes would result in a lower (higher) fair value, and an increase (decrease) in the credit rating of municipal bonds that are not rated by third-party credit rating agencies would result in a higher (lower) fair value. Rollforward of Level 3 assets and liabilities held at fair value during the year ended December 31, 2020 Balance as of December 31, 2019 Total gains (losses) included in: Transfers Balance as of December 31, 2020 ($ in millions) Net income OCI Into Level 3 Out of Level 3 Purchases Sales Issues Settlements Assets Fixed income securities: Municipal $ 62 $ 1 $ 2 $ 20 $ (11) $ — $ (4) $ — $ (3) $ 67 Corporate - public 61 (1) 1 2 — 55 (19) — (1) 98 Corporate - privately placed 114 2 (12) 52 (31) 25 (17) — (3) 130 ABS 65 — (1) 54 (49) 48 (32) — (28) 57 MBS 40 1 (2) — — 11 (7) — (16) 27 Total fixed income securities 342 3 (12) 128 (91) 139 (79) — (51) 379 Equity securities 371 (3) — — — 66 (16) — — 418 Short-term investments 25 — — — (25) 35 — — — 35 Total recurring Level 3 assets 738 — (12) 128 (116) 240 (95) — (51) 832 Liabilities Contractholder funds: Derivatives embedded in life and annuity contracts (462) (43) — — — — — (34) 23 (516) Total recurring Level 3 liabilities $ (462) $ (43) $ — $ — $ — $ — $ — $ (34) $ 23 $ (516) Total Level 3 gains (losses) included in net income for the year ended December 31, 2020 ($ in millions) Net investment income Realized capital gains (losses) Life contract benefits Interest credited to contractholder funds Total Components of net income $ (23) $ 23 $ (1) $ (42) $ (43) Rollforward of Level 3 assets and liabilities held at fair value during the year ended December 31, 2019 Balance as of December 31, 2018 Total gains (losses) included in: Transfers Balance as of December 31, 2019 ($ in millions) Net income OCI Into Out of Level 3 Purchases Sales Issues Settlements Assets Fixed income securities: Municipal $ 70 $ 1 $ 4 $ — $ (5) $ — $ (5) $ — $ (3) $ 62 Corporate - public 70 — 3 30 (113) 86 (11) — (4) 61 Corporate - privately placed 90 (1) 2 43 (2) 4 (13) — (9) 114 ABS 69 1 (1) 76 (210) 159 (22) — (7) 65 MBS 26 — (2) 9 — 9 — — (2) 40 Total fixed income securities 325 1 6 158 (330) 258 (51) — (25) 342 Equity securities 341 30 — — — 82 (82) — — 371 Short-term investments 30 — — — — 35 (40) — — 25 Free-standing derivatives, net 1 (1) — — — — — — — — Total recurring Level 3 assets 697 30 6 158 (330) 375 (173) — (25) 738 Liabilities Contractholder funds: Derivatives embedded in life and annuity contracts (224) (61) — (175) — — — (16) 14 (462) Total recurring Level 3 liabilities $ (224) $ (61) $ — $ (175) $ — $ — $ — $ (16) $ 14 $ (462) Total Level 3 gains (losses) included in net income for the year ended December 31, 2019 ($ in millions) Net investment income Realized capital gains (losses) Life contract benefits Interest credited to contractholder funds Total Components of net income $ (2) $ 32 $ 7 $ (68) $ (31) Rollforward of Level 3 assets and liabilities held at fair value during the year ended December 31, 2018 Balance as of December 31, 2017 Total gains (losses) included in: Transfers Balance as of December 31, 2018 ($ in millions) Net income OCI Into Out of Level 3 Purchases Sales Issues Settlements Assets Fixed income securities: Municipal $ 101 $ 1 $ (2) $ — $ (26) $ 10 $ (8) $ — $ (6) $ 70 Corporate - public 108 — (3) 17 (21) 10 (38) — (3) 70 Corporate - privately placed 224 (1) (3) 20 (119) 22 (5) — (48) 90 ABS 147 — 2 42 (159) 160 (97) — (26) 69 MBS 26 — — — — 1 — — (1) 26 Total fixed income securities 606 — (6) 79 (325) 203 (148) — (84) 325 Equity securities 210 37 — — — 109 (15) — — 341 Short-term investments 20 — — — — 55 (45) — — 30 Free-standing derivatives, net 1 — — — — — — — — 1 Total recurring Level 3 assets 837 37 (6) 79 (325) 367 (208) — (84) 697 Liabilities Contractholder funds: Derivatives embedded in life and annuity contracts (286) 58 — — — — — (2) 6 (224) Total recurring Level 3 liabilities $ (286) $ 58 $ — $ — $ — $ — $ — $ (2) $ 6 $ (224) Total Level 3 gains (losses) included in net income for the year ended December 31, 2018 ($ in millions) Net investment income Realized capital gains (losses) Life contract benefits Interest credited to contractholder funds Total Components of net income $ — $ 37 $ (5) $ 63 $ 95 Transfers into Level 3 during 2020, 2019 and 2018 included situations where a quote was not provided by the Company’s independent third-party valuation service provider and as a result the price was stale or had been replaced with a broker quote where the inputs had not been corroborated to be market observable resulting in the security being classified as Level 3. Transfers into Level 3 during 2019 also included derivatives embedded in equity-indexed universal life contracts due to refinements in the valuation modeling resulting in an increase in significance of non-market observable inputs. Transfers out of Level 3 during 2020, 2019 and 2018 included situations where a broker quote was used in the prior period and a quote became available from the Company’s independent third-party valuation service provider in the current period. A quote utilizing the new pricing source was not available as of the prior period, and any gains or losses related to the change in valuation source for individual securities were not significant. Valuation changes included in net income and OCI for Level 3 assets and liabilities held as of December 31, ($ in millions) 2020 2019 2018 Assets Fixed income securities: Municipal $ 1 $ 1 $ — Corporate - public (2) — — Corporate - privately placed 2 — — Total fixed income securities 1 1 — Equity securities (3) 6 36 Free-standing derivatives, net — (1) — Total recurring Level 3 assets $ (2) $ 6 $ 36 Liabilities Contractholder funds: Derivatives embedded in life and annuity contracts $ (43) $ (61) $ 58 Total recurring Level 3 liabilities (43) (61) 58 Total included in net income $ (45) $ (55) $ 94 Components of net income Net investment income $ (24) $ (2) $ — Realized capital gains (losses) 22 8 36 Life contract benefits (1) 7 (5) Interest credited to contractholder funds (42) (68) 63 Total included in net income $ (45) $ (55) $ 94 Assets Municipal $ 2 Corporate - public 1 Corporate - privately placed (11) ABS (1) Changes in unrealized net capital gains and losses reported in OCI (1) $ (9) (1) Effective January 1, 2020, the Company adopted the fair value accounting standard that prospectively requires the disclosure of valuation changes reported in OCI. Financial instruments not carried at fair value ($ in millions) December 31, 2020 December 31, 2019 Financial assets Fair value level Amortized cost, net Fair value Amortized cost, net Fair value Mortgage loans Level 3 $ 4,075 $ 4,348 $ 4,817 $ 5,012 Bank loans Level 3 1,018 1,053 1,204 1,185 Agent loans Level 3 631 634 666 664 Financial liabilities Fair value level Carrying value (1) Fair value Carrying value (1) Fair value Contractholder funds on investment contracts Level 3 $ 7,795 $ 9,089 $ 8,438 $ 9,158 Long-term debt Level 2 7,825 9,489 6,631 7,738 Liability for collateral Level 2 1,249 1,249 1,829 1,829 (1) Represents the amounts reported on the Consolidated Statements of Financial Position . |
Derivative Financial Instrument
Derivative Financial Instruments and Off-balance sheet Financial Instruments | 12 Months Ended |
Dec. 31, 2020 | |
Derivative Financial Instruments and Off-balance sheet Financial Instruments | |
Derivative Financial Instruments and Off-balance sheet Financial Instruments | Note 7 Derivative Financial Instruments and Off-balance Sheet Financial Instruments The Company uses derivatives for risk reduction and to increase investment portfolio returns through asset replication. Risk reduction activity is focused on managing the risks with certain assets and liabilities arising from the potential adverse impacts from changes in risk-free interest rates, changes in equity market valuations, increases in credit spreads and foreign currency fluctuations. Asset replication refers to the “synthetic” creation of assets through the use of derivatives. The Company replicates fixed income securities using a combination of a credit default swap, index total return swap, options, or a foreign currency forward contract and one or more highly rated fixed income securities, primarily investment grade host bonds, to synthetically replicate the economic characteristics of one or more cash market securities. The Company replicates equity securities using futures, index total return swaps, and options to increase equity exposure. Property-Liability may use interest rate swaps, swaptions, futures and options to manage the interest rate risks of existing investments. These instruments are utilized to change the duration of the portfolio in order to offset the economic effect that interest rates would otherwise have on the fair value of its fixed income securities. Fixed income index total return swaps are used to offset valuation losses in the fixed income portfolio during periods of declining market values. Credit default swaps are typically used to mitigate the credit risk within the Property-Liability fixed income portfolio. Equity index total return swaps, futures and options are used by Property-Liability to offset valuation losses in the equity portfolio during periods of declining equity market values. In addition, equity futures are used to hedge the market risk related to deferred compensation liability contracts. Forward contracts are primarily used by Property-Liability to hedge foreign currency risk associated with holding foreign currency denominated investments and foreign operations. Asset-liability management is a risk management practice that is principally employed by Allstate Life and Allstate Annuities to balance the respective interest-rate sensitivities of its assets and liabilities. Depending upon the attributes of the assets acquired and liabilities issued, derivative instruments such as interest rate swaps, caps, swaptions and futures are utilized to change the interest rate characteristics of existing assets and liabilities to ensure the relationship is maintained within specified ranges and to reduce exposure to rising or falling interest rates. Fixed income index total return swaps are used to offset valuation losses in the portfolio during periods of declining market values. Credit default swaps are typically used to mitigate the credit risk within the Allstate Life and Allstate Annuities fixed income portfolios. Futures and options are used for hedging the equity exposure contained in equity indexed life and annuity product contracts that offer equity returns to contractholders. In addition, the Company uses equity index total return swaps, options and futures to offset valuation losses in the equity portfolio during periods of declining equity market values. Foreign currency swaps and forwards are primarily used to reduce the foreign currency risk associated with holding foreign currency denominated investments. The Company also has derivatives embedded in non-derivative host contracts that are required to be separated from the host contracts and accounted for at fair value with changes in fair value of embedded derivatives reported in net income. The Company’s primary embedded derivatives are equity options in life and annuity product contracts, which provide returns linked to equity indices to contractholders. When derivatives meet specific criteria, they may be designated as accounting hedges and accounted for as fair value, cash flow, foreign currency fair value or foreign currency cash flow hedges. The Company designates certain investment risk transfer reinsurance agreements as fair value hedges when the hedging instrument is highly effective in offsetting the risk of changes in the fair value of the hedged item. The fair value of the hedged liability is reported in contractholder funds in the Consolidated Statements of Financial Position. The impact from results of the fair value hedge is reported in interest credited to contractholder funds in the Consolidated Statements of Operations. The notional amounts specified in the contracts are used to calculate the exchange of contractual payments under the agreements and are generally not representative of the potential for gain or loss on these agreements. However, the notional amounts specified in credit default swaps where the Company has sold credit protection represent the maximum amount of potential loss, assuming no recoveries. Fair value, which is equal to the carrying value, is the estimated amount that the Company would receive or pay to terminate the derivative contracts at the reporting date. The carrying value amounts for OTC derivatives are further adjusted for the effects, if any, of enforceable master netting agreements and are presented on a net basis, by counterparty agreement, in the Consolidated Statements of Financial Position. For those derivatives which qualify and have been designated as fair value accounting hedges, net income includes the changes in the fair value of both the derivative instrument and the hedged risk. For cash flow hedges, gains and losses are amortized from AOCI and are reported in net income in the same period the forecasted transactions being hedged impact net income. Non-hedge accounting is generally used for “portfolio” level hedging strategies where the terms of the individual hedged items do not meet the strict homogeneity requirements to permit the application of hedge accounting. For non-hedge derivatives, net income includes changes in fair value and accrued periodic settlements, when applicable. With the exception of non-hedge derivatives used for asset replication and non-hedge embedded derivatives, all of the Company’s derivatives are evaluated for their ongoing effectiveness as either accounting hedge or non-hedge derivative financial instruments on at least a quarterly basis. Summary of the volume and fair value positions of derivative instruments as of December 31, 2020 Volume (1) ($ in millions, except number of contracts) Balance sheet location Notional amount Number of contracts Fair value, net Gross asset Gross liability Asset derivatives Derivatives designated as fair value accounting hedging instruments Other Other assets $ 3 n/a $ — $ — $ — Derivatives not designated as accounting hedging instruments Interest rate contracts Interest rate cap agreements Other investments 13 n/a — — — Futures Other assets n/a 602 — — — Equity and index contracts Options Other investments n/a 2,887 190 190 — Futures Other assets n/a 951 1 1 — Total return index contracts Total return swap agreements - equity index Other investments 8 n/a 1 1 — Foreign currency contracts Foreign currency forwards Other investments 404 n/a 5 13 (8) Embedded derivative financial instruments Other embedded derivative financial instruments Other investments 750 n/a — — — Credit default contracts Credit default swaps – buying protection Other investments 77 n/a (4) — (4) Credit default swaps – selling protection Other investments 754 n/a 13 13 — Subtotal 2,006 4,440 206 218 (12) Total asset derivatives $ 2,009 4,440 $ 206 $ 218 $ (12) Liability derivatives Derivatives not designated as accounting hedging instruments Interest rate contracts Interest rate cap agreements Other liabilities & accrued expenses $ 19 n/a $ — $ — $ — Futures Other liabilities & accrued expenses n/a 730 — — — Equity and index contracts Options Other liabilities & accrued expenses n/a 2,712 (110) — (110) Futures Other liabilities & accrued expenses n/a 666 — — — Total return index contracts Total return swap agreements - fixed income Other liabilities & accrued expenses 50 n/a — — — Foreign currency contracts Foreign currency forwards Other liabilities & accrued expenses 367 n/a (13) 2 (15) Embedded derivative financial instruments Guaranteed accumulation benefits Contractholder funds 128 n/a (18) — (18) Guaranteed withdrawal benefits Contractholder funds 190 n/a (15) — (15) Equity-indexed and forward starting options in life and annuity product contracts Contractholder funds 1,785 n/a (483) — (483) Credit default contracts Credit default swaps – buying protection Other liabilities & accrued expenses 638 n/a (16) — (16) Credit default swaps – selling protection Other liabilities & accrued expenses 5 n/a — — — Total liability derivatives 3,182 4,108 (655) $ 2 $ (657) Total derivatives $ 5,191 8,548 $ (449) (1) Volume for OTC and cleared derivative contracts is represented by their notional amounts. Volume for exchange traded derivatives is represented by the number of contracts, which is the basis on which they are traded. (n/a = not applicable) Summary of the volume and fair value positions of derivative instruments as of December 31, 2019 Volume ($ in millions, except number of contracts) Balance sheet location Notional amount Number of contracts Fair value, net Gross asset Gross liability Asset derivatives Derivatives designated as fair value accounting hedging instruments Other Other assets $ 2 n/a $ — $ — $ — Derivatives not designated as accounting hedging instruments Interest rate contracts Futures Other assets n/a 3,668 — — — Equity and index contracts Options Other investments n/a 5,539 140 140 — Futures Other assets n/a 1,533 1 1 — Total return index contracts Total return swap agreements - fixed income Other investments 56 n/a 1 1 — Credit default contracts Credit default swaps – buying protection Other investments 17 n/a — — — Subtotal 73 10,740 142 142 — Total asset derivatives $ 75 10,740 $ 142 $ 142 $ — Liability derivatives Derivatives not designated as accounting hedging instruments Interest rate contracts Interest rate cap agreements Other liabilities & accrued expenses $ 34 n/a $ — $ — $ — Futures Other liabilities & accrued expenses n/a 1,089 — — — Equity and index contracts Options Other liabilities & accrued expenses n/a 5,400 (68) — (68) Futures Other liabilities & accrued expenses n/a 3 — — — Total return index contracts Total return swap agreements - fixed income Other liabilities & accrued expenses 119 n/a — — — Total return swap agreements - equity index Other liabilities & accrued expenses 187 n/a 11 11 — Foreign currency contracts Foreign currency forwards Other liabilities & accrued expenses 745 n/a 19 28 (9) Embedded derivative financial instruments Guaranteed accumulation benefits Contractholder funds 161 n/a (18) — (18) Guaranteed withdrawal benefits Contractholder funds 205 n/a (14) — (14) Equity-indexed and forward starting options in life and annuity product contracts Contractholder funds 1,791 n/a (430) — (430) Credit default contracts Credit default swaps – buying protection Other liabilities & accrued expenses 152 n/a (7) — (7) Credit default swaps – selling protection Other liabilities & accrued expenses 9 n/a — — — Total liability derivatives 3,403 6,492 (507) $ 39 $ (546) Total derivatives $ 3,478 17,232 $ (365) Gross and net amounts for OTC derivatives (1) Offsets ($ in millions) Gross amount Counter- party netting Cash collateral (received) pledged Net amount on balance sheet Securities collateral (received) pledged Net amount December 31, 2020 Asset derivatives $ 16 $ (14) $ (1) $ 1 $ — $ 1 Liability derivatives (28) 14 13 (1) — (1) December 31, 2019 Asset derivatives $ 40 $ (39) $ (1) $ — $ — $ — Liability derivatives (16) 39 (27) (4) — (4) (1) All OTC derivatives are subject to enforceable master netting agreements. Gains (losses) from valuation and settlements reported on derivatives not designated as accounting hedges ($ in millions) Realized capital gains (losses) Life contract benefits Interest credited to contractholder funds Operating costs and expenses Total gain (loss) recognized in net income on derivatives 2020 Interest rate contracts $ 40 $ — $ — $ — $ 40 Equity and index contracts 21 — 22 29 72 Embedded derivative financial instruments — (1) (53) — (54) Foreign currency contracts (20) — — — (20) Credit default contracts 7 — — — 7 Total return swaps - fixed income 1 — — — 1 Total return swaps - equity index 4 — — — 4 Total $ 53 $ (1) $ (31) $ 29 $ 50 2019 Interest rate contracts $ 51 $ — $ — $ — $ 51 Equity and index contracts (116) — 63 40 (13) Embedded derivative financial instruments — 7 (70) — (63) Foreign currency contracts 8 — — — 8 Credit default contracts (8) — — — (8) Total return swaps - fixed income 14 — — — 14 Total return swaps - equity index 36 — — — 36 Total $ (15) $ 7 $ (7) $ 40 $ 25 2018 Interest rate contracts $ (2) $ — $ — $ — $ (2) Equity and index contracts 21 — (24) (21) (24) Embedded derivative financial instruments — (5) 67 — 62 Foreign currency contracts 29 — — (1) 28 Credit default contracts 2 — — — 2 Total return swaps - fixed income (1) — — — (1) Total return swaps - equity (6) — — — (6) Total $ 43 $ (5) $ 43 $ (22) $ 59 The Company manages its exposure to credit risk by utilizing highly rated counterparties, establishing risk control limits, executing legally enforceable master netting agreements (“MNAs”) and obtaining collateral where appropriate. The Company uses MNAs for OTC derivative transactions that permit either party to net payments due for transactions and collateral is either pledged or obtained when certain predetermined exposure limits are exceeded. As of December 31, 2020, counterparties pledged $7 million in collateral to the Company, and the Company pledged $19 million in cash and securities to counterparties which includes $17 million of collateral posted under MNAs for contracts containing credit-risk contingent provisions that are in a liability position. The Company has not incurred any losses on derivative financial instruments due to counterparty nonperformance. Other derivatives, including futures and certain option contracts, are traded on organized exchanges which require margin deposits and guarantee the execution of trades, thereby mitigating any potential credit risk. Counterparty credit exposure represents the Company’s potential loss if all of the counterparties concurrently fail to perform under the contractual terms of the contracts and all collateral, if any, becomes worthless. This exposure is measured by the fair value of OTC derivative contracts with a positive fair value at the reporting date reduced by the effect, if any, of legally enforceable master netting agreements. OTC derivatives counterparty credit exposure by counterparty credit rating ($ in millions) 2020 2019 Rating (1) Number of counter-parties Notional amount (2) Credit exposure (2) Exposure, net of collateral (2) Number of counter-parties Notional amount (2) Credit exposure (2) Exposure, net of collateral (2) A+ 3 $ 280 $ 7 $ — 6 $ 868 $ 29 $ — Total 3 $ 280 $ 7 $ — 6 $ 868 $ 29 $ — (1) Allstate uses the lower of S&P’s or Moody’s long-term debt issuer ratings. (2) Only OTC derivatives with a net positive fair value are included for each counterparty. For certain exchange traded and cleared derivatives, margin deposits are required as well as daily cash settlements of margin accounts. As of December 31, 2020, the Company pledged $60 million and received $12 million in the form of margin deposits. Market risk is the risk that the Company will incur losses due to adverse changes in market rates and prices. Market risk exists for all of the derivative financial instruments the Company currently holds, as these instruments may become less valuable due to adverse changes in market conditions. To limit this risk, the Company’s senior management has established risk control limits. In addition, changes in fair value of the derivative financial instruments that the Company uses for risk management purposes are generally offset by the change in the fair value or cash flows of the hedged risk component of the related assets, liabilities or forecasted transactions. Certain of the Company’s derivative transactions contain credit-risk-contingent termination events and cross-default provisions. Credit-risk-contingent termination events allow the counterparties to terminate the derivative agreement or a specific trade on certain dates if AIC’s financial strength credit ratings by Moody’s or S&P fall below a certain level. Credit-risk-contingent cross-default provisions allow the counterparties to terminate the derivative agreement if the Company defaults by pre-determined threshold amounts on certain debt instruments. The following summarizes the fair value of derivative instruments with termination, cross-default or collateral credit-risk-contingent features that are in a liability position as of December 31, as well as the fair value of assets and collateral that are netted against the liability in accordance with provisions within legally enforceable MNAs. ($ in millions) 2020 2019 Gross liability fair value of contracts containing credit-risk-contingent features $ 27 $ 16 Gross asset fair value of contracts containing credit-risk-contingent features and subject to MNAs (9) (11) Collateral posted under MNAs for contracts containing credit-risk-contingent features (17) (3) Maximum amount of additional exposure for contracts with credit-risk-contingent features if all features were triggered concurrently $ 1 $ 2 Credit derivatives - selling protection A credit default swap (“CDS”) is a derivative instrument, representing an agreement between two parties to exchange the credit risk of a specified entity (or a group of entities), or an index based on the credit risk of a group of entities (all commonly referred to as the “reference entity” or a portfolio of “reference entities”), in return for a periodic premium. In selling protection, CDS are used to replicate fixed income securities and to complement the cash market when credit exposure to certain issuers is not available or when the derivative alternative is less expensive than the cash market alternative. CDS typically have a five-year term. CDS notional amounts by credit rating and fair value of protection sold Notional amount ($ in millions) AAA AA A BBB BB and lower Total Fair value December 31, 2020 Single name Corporate debt $ — $ — $ — $ — $ 9 $ 9 $ — Index Corporate debt 6 12 156 492 84 750 13 Total $ 6 $ 12 $ 156 $ 492 $ 93 $ 759 $ 13 December 31, 2019 Single name Corporate debt $ — $ — $ — $ — $ 9 $ 9 $ — Total $ — $ — $ — $ — $ 9 $ 9 $ — In selling protection with CDS, the Company sells credit protection on an identified single name, a basket of names in a first-to-default (“FTD”) structure or credit derivative index (“CDX”) that is generally investment grade, and in return receives periodic premiums through expiration or termination of the agreement. With single name CDS, this premium or credit spread generally corresponds to the difference between the yield on the reference entity’s public fixed maturity cash instruments and swap rates at the time the agreement is executed. With a FTD basket, because of the additional credit risk inherent in a basket of named reference entities, the premium generally corresponds to a high proportion of the sum of the credit spreads of the names in the basket and the correlation between the names. CDX is utilized to take a position on multiple (generally 125) reference entities. Credit events are typically defined as bankruptcy, failure to pay, or restructuring, depending on the nature of the reference entities. If a credit event occurs, the Company settles with the counterparty, either through physical settlement or cash settlement. In a physical settlement, a reference asset is delivered by the buyer of protection to the Company, in exchange for cash payment at par, whereas in a cash settlement, the Company pays the difference between par and the prescribed value of the reference asset. When a credit event occurs in a single name or FTD basket (for FTD, the first credit event occurring for any one name in the basket), the contract terminates at the time of settlement. For CDX, the reference entity’s name incurring the credit event is removed from the index while the contract continues until expiration. The maximum payout on a CDS is the contract notional amount. A physical settlement may afford the Company with recovery rights as the new owner of the asset. The Company monitors risk associated with credit derivatives through individual name credit limits at both a credit derivative and a combined cash instrument/credit derivative level. The ratings of individual names for which protection has been sold are also monitored. Off-balance sheet financial instruments Contractual amounts of off-balance sheet financial instruments As of December 31, ($ in millions) 2020 2019 Commitments to invest in limited partnership interests $ 2,933 $ 2,837 Private placement commitments 36 68 Other loan commitments 92 189 In the preceding table, the contractual amounts represent the amount at risk if the contract is fully drawn upon, the counterparty defaults and the value of any underlying security becomes worthless. Unless noted otherwise, the Company does not require collateral or other security to support off-balance sheet financial instruments with credit risk. Commitments to invest in limited partnership interests represent agreements to acquire new or additional participation in certain limited partnership investments. The Company enters into these agreements in the normal course of business. Because the investments in limited partnerships are not actively traded, it is not practical to estimate the fair value of these commitments. Private placement commitments represent commitments to purchase private placement debt and private equity securities at a future date. The Company enters into these agreements in the normal course of business. The fair value of the debt commitments generally cannot be estimated on the date the commitment is made as the terms and conditions of the underlying private placement securities are not yet final. Because the private equity securities are not actively traded, it is not practical to estimate fair value of the commitments. |
Reserve for Property and Casual
Reserve for Property and Casualty Insurance Claims and Claims Expense | 12 Months Ended |
Dec. 31, 2020 | |
Reserve for Property-Liability Insurance Claims and Claims Expense | |
Reserve for Property and Casualty Insurance Claims and Claims Expense | Note 8 Reserve for Property and Casualty Insurance Claims and Claims Expense The Company establishes reserves for claims and claims expense on reported and unreported claims of insured losses. The Company’s reserving process takes into account known facts and interpretations of circumstances and factors including the Company’s experience with similar cases, actual claims paid, historical trends involving claim payment patterns and pending levels of unpaid claims, loss management programs, product mix and contractual terms, changes in law and regulation, judicial decisions, and economic conditions. When the Company experiences changes in the mix or type of claims or changing claim settlement patterns, it may need to apply actuarial judgment in the determination and selection of development factors to be more reflective of the new trends. For example, the Coronavirus has had a significant impact on driving patterns and auto frequency that may lead to historical development trends being less predictive of future loss development, potentially creating additional reserve variability. Generally, the initial reserves for a new accident year are established based on actual claim frequency and severity assumptions for different business segments, lines and coverages based on historical relationships to relevant inflation indicators. Reserves for prior accident years are statistically determined using several different actuarial estimation methods. Changes in auto claim frequency may result from changes in mix of business, the rate of distracted driving, miles driven or other macroeconomic factors. Changes in auto current year claim severity are generally influenced by inflation in the medical and auto repair sectors of the economy and the effectiveness and efficiency of claim practices. The Company mitigates these effects through various loss management programs. When such changes in claim data occur, actuarial judgment is used to determine appropriate development factors to establish reserves. As part of the reserving process, the Company may also supplement its claims processes by utilizing third-party adjusters, appraisers, engineers, inspectors, and other professionals and information sources to assess and settle catastrophe and non-catastrophe related claims. The effects of inflation are implicitly considered in the reserving process. Because reserves are estimates of unpaid portions of losses that have occurred, including incurred but not reported (“IBNR”) losses, the establishment of appropriate reserves, including reserves for catastrophes, Discontinued Lines and Coverages and reinsurance and indemnification recoverables, is an inherently uncertain and complex process. The ultimate cost of losses may vary materially from recorded amounts, which are based on management’s best estimates. The highest degree of uncertainty is associated with reserves for losses incurred in the initial reporting period as it contains the greatest proportion of losses that have not been reported or settled. The Company also has uncertainty in the Discontinued Lines and Coverages reserves that are based on events long since passed and are complicated by lack of historical data, legal interpretations, unresolved legal issues and legislative intent based on establishment of facts. The Company regularly updates its reserve estimates as new information becomes available and as events unfold that may affect the resolution of unsettled claims. Changes in prior year reserve estimates, which may be material, are reported in property and casualty insurance claims and claims expense in the Consolidated Statements of Operations in the period such changes are determined. Rollforward of reserve for property and casualty insurance claims and claims expense ($ in millions) 2020 2019 2018 Balance as of January 1 $ 27,712 $ 27,423 $ 26,325 Less recoverables (1) (6,912) (7,155) (6,471) Net balance as of January 1 20,800 20,268 19,854 Incurred claims and claims expense related to: Current year 22,437 24,106 23,033 Prior years (436) (130) (255) Total incurred 22,001 23,976 22,778 Claims and claims expense paid related to: Current year (14,245) (15,160) (14,877) Prior years (7,979) (8,284) (7,487) Total paid (22,224) (23,444) (22,364) Net balance as of December 31 20,577 20,800 20,268 Plus recoverables 7,033 6,912 7,155 Balance as of December 31 $ 27,610 $ 27,712 $ 27,423 (1) Recoverables comprises reinsurance and indemnification recoverables. See Note 10 for further details. Reconciliation of total claims and claims expense incurred and paid by coverage December 31, 2020 ($ in millions) Incurred Paid Allstate Protection Auto insurance - liability coverage $ 7,629 $ (7,939) Auto insurance - physical damage coverage 4,817 (4,716) Homeowners insurance 4,889 (4,731) Total auto and homeowners insurance 17,335 (17,386) Other personal lines 1,015 (1,007) Commercial lines 585 (463) Protection Services 319 (326) Discontinued Lines and Coverages 132 (88) Unallocated loss adjustment expenses (“ULAE”) 2,681 (2,590) Claims incurred and paid from before 2016 (32) (423) Other (34) 59 Total $ 22,001 $ (22,224) Incurred claims and claims expense represents the sum of paid losses, claim adjustment expenses and reserve changes in the calendar year. This expense includes losses from catastrophes of $2.81 billion, $2.56 billion and $2.86 billion in 2020, 2019 and 2018, respectively, net of recoverables. Catastrophes are an inherent risk of the property and casualty insurance business that have contributed to, and will continue to contribute to, material year-to-year fluctuations in the Company’s results of operations and financial position. The Company calculates and records a single best reserve estimate for losses from catastrophes, in conformance with generally accepted actuarial standards. As a result, management believes that no other estimate is better than the recorded amount. Due to the uncertainties involved, including the factors described above, the ultimate cost of losses may vary materially from recorded amounts, which are based on management’s best estimates. Accordingly, management believes that it is not practical to develop a meaningful range for any such changes in losses incurred. Prior year reserve reestimates included in claims and claims expense (1) Twelve months ended December 31, ($ in millions) Non-catastrophe losses Catastrophe losses Total 2020 2019 2018 2020 2019 2018 2020 2019 2018 Auto $ (63) $ (306) $ (416) $ (44) $ (17) $ (39) $ (107) $ (323) $ (455) Homeowners (17) (1) (51) (422) 66 65 (439) 65 14 Other personal lines (27) 8 (6) (39) — (1) (66) 8 (7) Commercial lines 34 18 108 2 (1) — 36 17 108 Discontinued Lines and Coverages (2) 141 105 87 — — — 141 105 87 Protection Services (1) (2) (2) — — — (1) (2) (2) Total prior year reserve reestimates $ 67 $ (178) $ (280) $ (503) $ 48 $ 25 $ (436) $ (130) $ (255) (1) Favorable reserve reestimates are shown in parentheses. (2) The Company’s 2020 annual reserve review, using established industry and actuarial best practices, resulted in unfavorable reestimates of $132 million. In the third quarter of 2020, the Company recognized favorable prior year catastrophe reserve reestimates of approximately $495 million, net of expenses and adjustments to reinsurance, related to two subrogation settlements, which is reflected as a reduction of claims and claims expense in the Consolidated Statements of Operations. PG&E settlement On June 20, 2020, the United States Bankruptcy Court for the Northern District of California confirmed PG&E Corporation’s and Pacific Gas and Electric Company’s (together, "PG&E") Chapter 11 Plan of Reorganization. The Plan of Reorganization included an agreement to resolve insurance subrogation claims arising from the 2017 Northern California wildfires and the 2018 Camp Fire for $11 billion. Allstate was party to the agreement. On July 1, 2020, PG&E emerged from Chapter 11 and funded the subrogation trust from which distributions will be made to the insurers. Insurers have five years from the effective date of the Plan of Reorganization to submit proof of paid losses to the trust prior to the final distribution. Allstate recognized a favorable impact of approximately $450 million. To date, the Company has received distributions from the trust representing approximately 80% of the expected recovery. Southern California Edison settlement On September 14, 2020, Southern California Edison reached a $1.16 billion settlement agreement with insurance companies, resolving all insurance subrogation claims arising from the December 2017 Thomas and Koenigstein Wildfires and January 2018 Montecito Mudslides litigation. Allstate was party to the agreement and recognized a favorable impact of approximately $45 million. The Company has received substantially all distributions from the trust for its expected recovery. Subsequent event On January 22, 2021, Southern California Edison reached a $2.20 billion settlement agreement with insurance companies, resolving subrogation claims arising from the Woolsey wildfire. Allstate is party to the agreement and expects to recognize a favorable impact of approximately $110 million in the first quarter of 2021. The following presents information about incurred and paid claims development as of December 31, 2020, net of recoverables, as well as the cumulative number of reported claims and the total of IBNR reserves plus expected development on reported claims included in the net incurred claims amounts. See Note 2 for the accounting policy and methodology for determining reserves for claims and claims expense, including both reported and IBNR claims. The cumulative number of reported claims is identified by coverage and excludes reported claims for industry pools and facilities where information is not available. The information about incurred and paid claims development for the 2016 to 2020 years, and the average annual percentage payout of incurred claims by age as of December 31, 2020, is presented as required supplementary information. Auto insurance – liability coverage ($ in millions, except number of reported claims) Incurred claims and allocated claim adjustment expenses, net of recoverables IBNR reserves plus expected development on reported claims Cumulative number of reported claims For the years ended December 31, Prior year reserve reestimates As of December 31, 2020 (unaudited) (unaudited) (unaudited) (unaudited) Accident year 2016 2017 2018 2019 2020 2016 $ 9,038 $ 8,841 $ 8,740 $ 8,690 $ 8,709 $ 19 $ 554 2,400,904 2017 — 8,465 8,396 8,312 8,330 18 1,017 2,217,132 2018 — — 8,734 8,715 8,731 16 1,846 2,180,275 2019 — — — 9,341 9,295 (46) 3,064 2,205,813 2020 — — — — 7,622 4,919 1,500,921 Total $ 42,687 $ 7 Reconciliation to total prior year reserve reestimates recognized by line Prior year reserve reestimates for pre-2016 accident years (20) Prior year reserve reestimates for ULAE 23 Other (3) Total prior year reserve reestimates $ 7 Cumulative paid claims and allocated claims adjustment expenses, net of recoverables For the years ended December 31, (unaudited) (unaudited) (unaudited) (unaudited) Accident year 2016 2017 2018 2019 2020 2016 $ 3,487 $ 5,772 $ 6,853 $ 7,700 $ 8,155 2017 — 3,151 5,333 6,532 7,313 2018 — — 3,231 5,618 6,885 2019 — — — 3,498 6,231 2020 — — — — 2,703 Total $ 31,287 All outstanding liabilities before 2016, net of recoverables 1,389 Liabilities for claims and claim adjustment expenses, net of recoverables $ 12,789 Average annual percentage payout of incurred claims by age, net of recoverables, as of December 31, 2020 1 year 2 years 3 years 4 years 5 years Auto insurance – liability coverage 39.4 % 27.5 % 13.1 % 8.4 % 4.9 % Auto insurance – physical damage coverage ($ in millions, except number of reported claims) Incurred claims and allocated claim adjustment expenses, net of recoverables IBNR reserves plus expected development on reported claims Cumulative number of reported claims For the years ended December 31, Prior year reserve reestimates As of December 31, 2020 (unaudited) (unaudited) (unaudited) (unaudited) Accident year 2016 2017 2018 2019 2020 2016 $ 5,128 $ 5,054 $ 5,027 $ 5,023 $ 5,022 $ (1) $ 5 4,432,048 2017 — 5,121 5,039 5,028 5,027 (1) 1 4,237,772 2018 — — 5,219 5,157 5,108 (49) 9 4,310,750 2019 — — — 5,662 5,606 (56) 26 4,469,473 2020 — — — — 4,924 324 3,493,530 Total $ 25,687 $ (107) Reconciliation to total prior year reserve reestimates recognized by line Prior year reserve reestimates for pre-2016 accident years (1) Prior year reserve reestimates for ULAE (5) Other (1) Total prior year reserve reestimates $ (114) Cumulative paid claims and allocated claims adjustment expenses, net of recoverables For the years ended December 31, (unaudited) (unaudited) (unaudited) (unaudited) Accident year 2016 2017 2018 2019 2020 2016 $ 4,890 $ 5,033 $ 5,022 $ 5,018 $ 5,017 2017 — 4,847 5,039 5,030 5,026 2018 — — 4,971 5,140 5,099 2019 — — — 5,418 5,580 2020 — — — — 4,600 Total $ 25,322 All outstanding liabilities before 2016, net of recoverables 8 Liabilities for claims and claim adjustment expenses, net of recoverables $ 373 Average annual percentage payout of incurred claims by age, net of recoverables, as of December 31, 2020 1 year 2 years 3 years 4 years 5 years Auto insurance – p hysical damage coverage 96.9 % 3.0 % (0.3) % (0.1) % — % Homeowners insurance ($ in millions, except number of reported claims) Incurred claims and allocated claim adjustment expenses, net of recoverables IBNR reserves plus expected development on reported claims Cumulative number of reported claims For the years ended December 31, Prior year reserve reestimates As of December 31, 2020 (unaudited) (unaudited) (unaudited) (unaudited) Accident year 2016 2017 2018 2019 2020 2016 $ 3,961 $ 3,995 $ 3,958 $ 3,953 $ 3,948 $ (5) $ 43 814,026 2017 — 4,477 4,619 4,614 4,390 (224) 61 908,714 2018 — — 4,749 4,854 4,551 (303) 182 811,046 2019 — — — 4,549 4,601 52 301 784,257 2020 — — — — 5,369 1,398 838,829 Total $ 22,859 $ (480) Reconciliation to total prior year reserve reestimates recognized by line Prior year reserve reestimates for pre-2016 accident years (11) Prior year reserve reestimates for ULAE 52 Other — Total prior year reserve reestimates $ (439) Cumulative paid claims and allocated claims adjustment expenses, net of recoverables For the years ended December 31, (unaudited) (unaudited) (unaudited) (unaudited) Accident year 2016 2017 2018 2019 2020 2016 $ 2,949 $ 3,680 $ 3,811 $ 3,876 $ 3,905 2017 — 3,228 4,249 4,437 4,329 2018 — — 3,491 4,514 4,369 2019 — — — 3,316 4,300 2020 — — — — 3,971 Total $ 20,874 All outstanding liabilities before 2016, net of recoverables 119 Liabilities for claims and claim adjustment expenses, net of recoverables $ 2,104 Average annual percentage payout of incurred claims by age, net of recoverables, as of December 31, 2020 1 year 2 years 3 years 4 years 5 years Homeowners insurance 75.2 % 19.4 % 2.5 % 0.9 % 0.7 % Reconciliation of the net incurred and paid claims development tables above to the reserve for property and casualty insurance claims and claims expense ($ in millions) As of December 31, 2020 Net outstanding liabilities Allstate Protection Auto insurance - liability coverage $ 12,789 Auto insurance - physical damage coverage 373 Homeowners insurance 2,104 Other personal lines 1,335 Commercial lines 1,132 Protection Services 30 Discontinued Lines and Coverages (1) 1,330 ULAE 1,484 Net reserve for property and casualty insurance claims and claims expense 20,577 Recoverables Allstate Protection Auto insurance - liability coverage 5,979 Auto insurance - physical damage coverage 4 Homeowners insurance 171 Other personal lines 153 Commercial lines 196 Protection Services 10 Discontinued Lines and Coverages 479 ULAE 41 Total recoverables 7,033 Gross reserve for property and casualty insurance claims and claims expense $ 27,610 (1) Discontinued Lines and Coverages includes business in run-off with most of the claims related to accident years more than 30 years ago. IBNR reserves represent $695 million of the total reserves as of December 31, 2020. Management believes that the reserve for property and casualty insurance claims and claims expense, net of recoverables, is appropriately established in the aggregate and adequate to cover the ultimate net cost of reported and unreported claims arising from losses which had occurred by the date of the Consolidated Statements of Financial Position based on available facts, technology, laws and regulations. Reserves for asbestos, environmental and other discontinued lines claims before and after the effects of reinsurance ($ in millions) December 31, 2020 December 31, 2019 Asbestos claims (1) Gross reserves $ 1,204 $ 1,172 Reinsurance (377) (362) Net reserves 827 810 Environmental claims (1) Gross reserves 249 219 Reinsurance (43) (40) Net reserves 206 179 Other discontinued lines Gross reserves 435 427 Reinsurance (60) (51) Net reserves 375 376 Total Gross reserves 1,888 1,818 Reinsurance (480) (453) Net reserves $ 1,408 $ 1,365 (1) For further discussion of asbestos and environmental reserves, see Note 14. |
Reserve for Life-Contingent Con
Reserve for Life-Contingent Contract Benefits and Contractholder Funds | 12 Months Ended |
Dec. 31, 2020 | |
Reserve for Life-Contingent Contract Benefits and Contractholder Funds | |
Reserve for Life-Contingent Contract Benefits and Contractholder Funds | Note 9 Reserve for Life-Contingent Contract Benefits and Contractholder Funds Reserve for life-contingent contract benefits As of December 31, ($ in millions) 2020 2019 Immediate fixed annuities: Structured settlement annuities $ 7,407 $ 6,840 Other immediate fixed annuities 1,511 1,612 Traditional life insurance 2,942 2,897 Accident and health insurance 841 873 Other 67 78 Total reserve for life-contingent contract benefits $ 12,768 $ 12,300 Key assumptions generally used in calculating the reserve for life-contingent contract benefits Product Mortality Interest rate Estimation method Structured settlement annuities Actual company experience with projected calendar year improvements 4.7% Present value of contractually specified future benefits and expenses Other immediate fixed annuities Actual company experience with projected calendar year improvements 4.7% Present value of expected future benefits and expenses Traditional life insurance Actual company experience plus loading Interest rate assumptions range from 2.5% to 11.3% Net level premium reserve method using the Company’s withdrawal experience rates; includes reserves for unpaid claims Accident and health insurance Actual company experience plus loading Interest rate assumptions range from 3.0% to 7.0% Unearned premium; additional contract reserves for mortality risk and unpaid claims Other: Variable annuity guaranteed minimum death benefits (1) Annuity 2012 mortality table with internal modifications Interest rate assumptions range from 1.4% to 5.8% Projected benefit ratio applied to cumulative assessments (1) In 2006, the Company disposed of substantially all of its variable annuity business through reinsurance agreements with The Prudential Insurance Company of America, a subsidiary of Prudential Financial, Inc. (collectively “Prudential”). In the third quarter of 2020, the premium deficiency evaluation of the Company’s immediate annuities with life contingencies resulted in a premium deficiency reserve of $225 million, pre-tax. The long-term investment yield assumption was lowered, which resulted in the prior sufficiency changing to a deficiency. The deficiency was recognized as an increase in the reserve for life contingent contract benefits. The original assumptions used to establish reserves were updated to reflect current assumptions, and the primary changes included mortality expectations, where annuitants are living longer than originally anticipated, and long-term investment yields. In 2019, the Company’s reviews concluded that no premium deficiency adjustments were necessary. The Company records an adjustment to the reserve for life-contingent contract benefits that represents the amount by which the reserve balance would increase if the net unrealized gains in the applicable product investment portfolios were realized and reinvested at current lower interest rates, resulting in a premium deficiency. The offset to this liability is recorded as a reduction of the unrealized net capital gains included in AOCI. This liability was $496 million and $126 million as of December 31, 2020 and 2019, respectively. Contractholder funds As of December 31, ($ in millions) 2020 2019 Interest-sensitive life insurance $ 8,493 $ 8,384 Investment contracts: Fixed annuities 8,196 8,845 Other investment contracts 524 463 Total contractholder funds $ 17,213 $ 17,692 Key contract provisions of contractholder funds Product Interest rate Withdrawal/surrender charges Interest-sensitive life insurance Interest rates credited range from 0.0% to 9.0% for equity-indexed life (whose returns are indexed to the S&P 500) and 1.0% to 6.0% for all other products Either a percentage of account balance or dollar amount grading off generally over 20 years Fixed annuities Interest rates credited range from 0.5% to 7.5% for immediate annuities; (8.0)% to 9.0% for equity-indexed annuities (whose returns are indexed to the S&P 500); and 0.1% to 5.0% for all other products Either a declining or a level percentage charge generally over ten years or less. Additionally, approximately 11.0% of fixed annuities are subject to market value adjustment for discretionary withdrawals Other investment contracts: Guaranteed minimum income, accumulation and withdrawal benefits on variable (1) and fixed annuities and secondary guarantees on interest-sensitive life insurance and fixed annuities Interest rates used in establishing reserves range from 1.7% to 10.3% Withdrawal and surrender charges are based on the terms of the related interest-sensitive life insurance or fixed annuity contract (1) In 2006, the Company disposed of substantially all of its variable annuity business through reinsurance agreements with Prudential. Contractholder funds activity For the years ended December 31, ($ in millions) 2020 2019 2018 Balance, beginning of year $ 17,692 $ 18,371 $ 19,434 Deposits 1,062 1,091 1,109 Interest credited 633 636 650 Benefits (775) (791) (844) Surrenders and partial withdrawals (728) (884) (1,135) Contract charges (836) (825) (824) Net transfers from separate accounts 5 10 6 Other adjustments 160 84 (25) Balance, end of year $ 17,213 $ 17,692 $ 18,371 The Company offered various guarantees to variable annuity contractholders. In 2006, the Company disposed of substantially all of its variable annuity business through reinsurance agreements with Prudential. Liabilities for variable contract guarantees related to death benefits are included in the reserve for life-contingent contract benefits and the liabilities related to the income, withdrawal and accumulation benefits are included in contractholder funds. All liabilities for variable contract guarantees are reported on a gross basis on the balance sheet with a corresponding reinsurance recoverable asset for those contracts subject to reinsurance. Absent any contract provision wherein the Company guarantees either a minimum return or account value upon death, a specified contract anniversary date, partial withdrawal or annuitization, variable annuity and variable life insurance contractholders bear the investment risk that the separate accounts’ funds may not meet their stated investment objectives. The account balances of variable annuity contracts’ separate accounts with guarantees included $2.96 billion and $2.68 billion of equity, fixed income and balanced mutual funds and $238 million and $253 million of money market mutual funds as of December 31, 2020 and 2019, respectively. The table below presents information regarding the Company’s variable annuity contracts with guarantees. The Company’s variable annuity contracts may offer more than one type of guarantee in each contract; therefore, the sum of amounts listed exceeds the total account balances of variable annuity contracts’ separate accounts with guarantees. ($ in millions) As of December 31, 2020 2019 In the event of death Separate account value $ 3,197 $ 2,928 Net amount at risk (1) $ 308 $ 373 Average attained age of contractholders 72 years 71 years At annuitization (includes income benefit guarantees) Separate account value $ 925 $ 848 Net amount at risk (2) $ 140 $ 173 Weighted average waiting period until annuitization options available None None For cumulative periodic withdrawals Separate account value $ 178 $ 190 Net amount at risk (3) $ 12 $ 13 Accumulation at specified dates Separate account value $ 93 $ 123 Net amount at risk (4) $ 11 $ 15 Weighted average waiting period until guarantee date 3 years 4 years (1) Defined as the estimated current guaranteed minimum death benefit in excess of the current account balance as of the balance sheet date. (2) Defined as the estimated present value of the guaranteed minimum annuity payments in excess of the current account balance. (3) Defined as the estimated current guaranteed minimum withdrawal balance (initial deposit) in excess of the current account balance as of the balance sheet date. (4) Defined as the estimated present value of the guaranteed minimum accumulation balance in excess of the current account balance. The liability for death and income benefit guarantees is equal to a benefit ratio multiplied by the cumulative contract charges earned, plus accrued interest less contract excess guarantee benefit payments. The benefit ratio is calculated as the estimated present value of all expected contract excess guarantee benefits divided by the present value of all expected contract charges. The establishment of reserves for these guarantees requires the projection of future fund values, mortality, persistency and customer benefit utilization rates. These assumptions are periodically reviewed and updated. For guarantees related to death benefits, benefits represent the projected excess guaranteed minimum death benefit payments. For guarantees related to income benefits, benefits represent the present value of the minimum guaranteed annuitization benefits in excess of the projected account balance at the time of annuitization. Projected benefits and contract charges used in determining the liability for certain guarantees are developed using models and stochastic scenarios that are also used in the development of estimated expected gross profits. Underlying assumptions for the liability related to income benefits include assumed future annuitization elections based on factors such as the extent of benefit to the potential annuitant, eligibility conditions and the annuitant’s attained age. The liability for guarantees is re-evaluated periodically, and adjustments are made to the liability balance through a charge or credit to life and annuity contract benefits. Guarantees related to the majority of withdrawal and accumulation benefits are considered to be derivative financial instruments; therefore, the liability for these benefits is established based on its fair value. Summary of liabilities for guarantees ($ in millions) Liability for guarantees related to death benefits and interest-sensitive life products Liability for guarantees related to income benefits Liability for guarantees related to accumulation and withdrawal benefits Total Balance, December 31, 2019 $ 293 $ 24 $ 102 $ 419 Less reinsurance recoverables 81 20 32 133 Net balance as of December 31, 2019 212 4 70 286 Incurred guarantee benefits 50 — 18 68 Paid guarantee benefits (2) — — (2) Net change 48 — 18 66 Net balance as of December 31, 2020 260 4 88 352 Plus reinsurance recoverables 69 23 33 125 Balance, December 31, 2020 $ 329 $ 27 $ 121 $ 477 Balance, December 31, 2018 $ 308 $ 39 $ 97 $ 444 Less reinsurance recoverables 111 35 39 185 Net balance as of December 31, 2018 197 4 58 259 Incurred guarantee benefits 18 — 12 30 Paid guarantee benefits (3) — — (3) Net change 15 — 12 27 Net balance as of December 31, 2019 212 4 70 286 Plus reinsurance recoverables 81 20 32 133 Balance, December 31, 2019 $ 293 $ 24 $ 102 $ 419 Reserves included in total liability balance for guarantees, as of December 31, by type of benefit ($ in millions) 2020 2019 2018 Variable annuity Death benefits $ 67 $ 78 $ 109 Income benefits 24 21 36 Accumulation benefits 18 18 25 Withdrawal benefits 15 14 14 Other guarantees 353 288 260 Total $ 477 $ 419 $ 444 |
Reinsurance and Indemnification
Reinsurance and Indemnification | 12 Months Ended |
Dec. 31, 2020 | |
Reinsurance Disclosures [Abstract] | |
Reinsurance and Indemnification | Note 10 Reinsurance and Indemnification Effects of reinsurance and indemnification on property and casualty premiums written and earned and life premiums and contract charges For the years ended December 31, ($ in millions) 2020 2019 2018 Property and casualty insurance premiums written Direct $ 38,695 $ 37,976 $ 35,895 Assumed 105 95 99 Ceded (1,142) (1,117) (1,008) Property and casualty insurance premiums written, net of recoverables $ 37,658 $ 36,954 $ 34,986 Property and casualty insurance premiums earned Direct $ 38,115 $ 37,104 $ 34,977 Assumed 99 94 87 Ceded (1,141) (1,122) (1,016) Property and casualty insurance premiums earned, net of recoverables $ 37,073 $ 36,076 $ 34,048 Life premiums and contract charges Direct $ 2,001 $ 2,074 $ 2,001 Assumed 685 712 754 Ceded (242) (285) (290) Life premiums and contract charges, net of recoverables $ 2,444 $ 2,501 $ 2,465 Reinsurance and indemnification recoverables Reinsurance and indemnification recoverables, net As of December 31, ($ in millions) 2020 2019 Property and casualty Paid and due from reinsurers and indemnitors $ 101 $ 112 Unpaid losses estimated (including IBNR) 7,033 6,912 Total property and casualty $ 7,134 $ 7,024 Allstate Annuities (1) $ 1,293 $ 1,305 Allstate Life (1) 712 794 Allstate Benefits (1) 81 88 Total $ 9,220 $ 9,211 (1) As of December 31, 2020 and 2019, approximately 94% and 93%, respectively, of the reinsurance recoverables are due from companies rated A- or better by S&P. Rollforward of credit loss allowance for reinsurance recoverables For the year ended ($ in millions) December 31, 2020 Property and casualty (1) (2) Beginning balance $ (60) Decrease in the provision for credit losses 1 Write-offs — Ending balance $ (59) Allstate Annuities, Allstate Life and Allstate Benefits Beginning balance $ (3) Cumulative effect of change in accounting principle (11) Increase in the provision for credit losses (1) Write-offs — Ending Balance $ (15) (1) Primarily related to discontinued lines and coverages reinsurance ceded. (2) Indemnification recoverables are considered collectible based on the industry pool and facility enabling legislation . Property and casualty Property and casualty programs are grouped by the following characteristics: 1. Indemnification programs - industry pools, facilities or associations that are governed by state insurance statutes or regulations or the federal government. 2. Catastrophe reinsurance programs - reinsurance protection for catastrophe exposure nationwide and by specific states, as applicable. 3. Other reinsurance programs - reinsurance protection for asbestos, environmental and other liability exposures as well as commercial lines, including shared economy. Property and casualty reinsurance is in place for the Allstate Protection, Discontinued Lines and Coverages and Protection Services segments. The Company purchases reinsurance after evaluating the financial condition of the reinsurer as well as the terms and price of coverage. Indemnification programs The Company participates in state-based industry pools or facilities mandating participation by insurers offering certain coverage in their state, including the Michigan Catastrophic Claims Association (“MCCA”), the New Jersey Property-Liability Insurance Guaranty Association (“PLIGA”), the North Carolina Reinsurance Facility (“NCRF”) and the Florida Hurricane Catastrophe Fund (“FHCF”). When the Company pays qualifying claims under the coverage indemnified by a state’s pool or facility, the Company is reimbursed for the qualifying claim losses or expenses. Each state pool or facility may assess participating companies to collect sufficient amounts to meet its total indemnification requirements. The enabling legislation for each state’s pool or facility compels the pool or facility only to indemnify participating companies for qualifying claim losses or expenses; the state pool or facility does not underwrite the coverage or take on the ultimate risk of the indemnified business. As a pass through, these pools or facilities manage the receipt of assessments paid by participating companies and payment of indemnified amounts for covered claims presented by participating companies. The Company has not had any credit losses related to these indemnification programs. State-based industry pools or facilities Michigan Catastrophic Claims Association The MCCA is a statutory indemnification mechanism for member insurers’ qualifying personal injury protection claims paid for the unlimited lifetime medical benefits above the applicable retention level for qualifying injuries from automobile, motorcycle and commercial vehicle accidents. Indemnification recoverables on paid and unpaid claims, including IBNR, as of December 31, 2020 and 2019 include $5.65 billion and $5.50 billion, respectively, from the MCCA for its indemnification obligation. The MCCA is funded by annually assessing participating member companies actively writing motor vehicle coverage in Michigan on a per vehicle basis that is currently $100 per vehicle insured. The MCCA’s calculation of the annual assessment is based upon the total of members’ actuarially determined present value of expected payments on lifetime claims by all persons expected to be catastrophically injured in that year and ultimately qualify for MCCA reimbursement, its operating expenses, and adjustments for the amount of excesses or deficiencies in prior assessments. The MCCA has also included its calculation of the impacts of the auto insurance reforms which have begun to phase in since their passage in June 2019, including the personal injury protection medical fee schedule that becomes effective July 2, 2021. The assessment is incurred by the Company as policies are written and recovered as a component of premiums from the Company’s customers. The MCCA indemnifies qualifying claims of all current and former member companies (whether or not actively writing motor vehicle coverage in Michigan) for qualifying claims and claims expenses incurred while the member companies were actively writing the mandatory personal injury protection coverage in Michigan. Member companies actively writing automobile coverage in Michigan include the MCCA annual assessments in determining the level of premiums to charge insureds in the state. As required for member companies by the MCCA, the Company reports covered paid and unpaid claims to the MCCA when estimates of loss for a reported claim are expected to exceed the retention level, the claims involve certain types of severe injuries, or there are litigation demands received suggesting the claim value exceeds certain thresholds. The retention level is adjusted upward every other MCCA fiscal year by the lesser of 6% or the increase in the Consumer Price Index. The retention level will be $600 thousand per claim for the fiscal two-years ending June 30, 2022 compared to $580 thousand per claim for the fiscal two-years ending June 30, 2020. The MCCA is obligated to fund the ultimate liability of member companies’ qualifying claims and claim expenses. The MCCA does not underwrite the insurance coverage or hold any underwriting risk. The MCCA indemnifies members as qualifying claims are paid and billed by members to the MCCA. Unlimited lifetime covered losses result in significant levels of ultimate incurred claim reserves being recorded by member companies along with offsetting indemnification recoverables. Disputes with claimants over coverage on certain reported claims can result in additional losses, which may be recoverable from the MCCA, excluding litigation expenses. There is currently no method by which insurers are able to obtain the benefit of managed care programs to reduce claims costs through the MCCA. The MCCA annual assessments fund current operations and member company reimbursements. The MCCA prepares statutory-basis financial statements in conformity with accounting practices prescribed or permitted by the State of Michigan Department of Insurance and Financial Services (“MI DOI”). The MI DOI has granted the MCCA a statutory permitted practice that expires in June 30, 2022 to discount its liabilities for loss and loss adjustment expense. As of June 30, 2020, the date of its most recent annual financial report, the MCCA had cash and invested assets of $23.41 billion and an accumulated surplus of $2.44 billion. The permitted practice reduced the accumulated deficit by $34.73 billion. New Jersey Property-Liability Insurance Guaranty Association PLIGA serves as the statutory administrator of the Unsatisfied Claim and Judgment Fund (“UCJF”), Workers’ Compensation Security Fund and the New Jersey Surplus Lines Insurance Guaranty Fund. In addition to its insolvency protection responsibilities, PLIGA reimburses insurers for unlimited excess medical benefits (“EMBs”) paid in connection with personal injury protection claims in excess of $75,000 for policies issued or renewed prior to January 1, 1991, and limited EMB claims in excess of $75,000 and capped at $250,000 for policies issued or renewed on or after January 1, 1991, to December 31, 2003. A significant portion of the incurred claim reserves and the recoverables can be attributed to a small number of catastrophic claims. Assessments paid to PLIGA for the EMB program totaled $7 million in 2020. The amounts of paid and unpaid recoverables as of December 31, 2020 and 2019 were $389 million and $446 million, respectively. PLIGA annually assesses all admitted property and casualty insurers writing covered lines in New Jersey for PLIGA indemnification and expenses. PLIGA assessments may be recouped as a surcharge on premiums collected. PLIGA does not ultimately retain underwriting risk as it assesses member companies for their expected qualifying losses to provide funding for payment of its indemnification obligation to member companies for their actual losses. As a pass through, PLIGA facilitates these transactions of receipt of assessments paid by member companies and payment to member companies for covered claims presented by them for indemnification. As of December 31, 2019, the date of its most recent annual financial report, PLIGA had a fund balance of $248 million. As statutory administrator of the UCJF, PLIGA provides compensation to qualified claimants for personal injury protection, bodily injury, or death caused by private passenger automobiles operated by uninsured or “hit and run” drivers. The UCJF also provides private passenger pedestrian personal injury protection benefits when no other coverage is available. PLIGA annually collects a UCJF assessment from all admitted property and casualty insurers writing motor vehicle liability insurance in New Jersey for UCJF indemnification and expenses. UCJF assessments can be expensed as losses recoverable in rates as appropriate. As of December 31, 2019, the date of its most recent annual financial report, the UCJF fund had a balance of $50 million. North Carolina Reinsurance Facility The NCRF provides automobile liability insurance to drivers that insurers are not otherwise willing to insure. All insurers licensed to write automobile insurance in North Carolina are members of the NCRF. Premiums, losses and expenses are assigned to the NCRF. North Carolina law allows the NCRF to recoup operating losses for certain insureds through a surcharge to policyholders. As of September 30, 2020, the NCRF reported a deficit of $125 million in members’ equity. The NCRF implemented a loss recoupment surcharge on all private passenger and commercial fleet policies effective October 1, 2020, through September 30, 2021. Member companies are assessed the recoupment surcharge. The loss recoupment surcharge will be adjusted on October 1, 2021 and discontinued once losses are recovered. The NCRF results are shared by the member companies in proportion to their respective North Carolina automobile liability writings. For the fiscal year ending September 30, 2020, net loss was $15 million, including $1.10 billion of earned premiums, $170 million of certain private passenger auto risk recoupment and $69.7 million of member loss recoupments. As of December 31, 2020, the NCRF recoverables on paid claims is $8.6 million and recoverables on unpaid claims is $58.4 million. Paid recoverable balances, if covered, are typically settled within sixty days of monthly filing. Florida Hurricane Catastrophe Fund Allstate subsidiaries Castle Key Insurance Company (“CKIC”) and Castle Key Indemnity Company (“CKI”, and together with CKIC, “Castle Key”) participate in the mandatory coverage provided by the FHCF and therefore have access to reimbursement for certain qualifying Florida hurricane losses from the FHCF. Castle Key has exposure to assessments and pays annual premiums to the FHCF for this reimbursement protection. The FHCF has the authority to issue bonds to pay its obligations to participating insurers in excess of its capital balances. Payment of these bonds is funded by emergency assessments on all property and casualty premiums in the state, except workers’ compensation, medical malpractice, accident and health insurance and policies written under the National Flood Insurance Program (“NFIP”). The FHCF emergency assessments are limited to 6% of premiums per year beginning the first year in which reimbursements require bonding, and up to a total of 10% of premiums per year for assessments in the second and subsequent years, if required to fund additional bonding. The FHCF issued $2.00 billion in pre-event bonds in 2013 to build its capacity to reimburse member companies’ claims. The FHCF plans to fund these pre-event bonds through current FHCF cash flows. Pursuant to an Order issued by the Florida Office of Insurance Regulation, the emergency assessment is zero for all policies issued or renewed on or after January 1, 2015. Annual premiums earned and paid under the FHCF agreement were $9 million, $9 million and $10 million in 2020, 2019 and 2018, respectively. Qualifying losses were $15 million, $33 million and $143 million in 2020, 2019 and 2018, respectively. The Company has access to reimbursement provided by the FHCF for 90% of qualifying personal property losses that exceed its current retention of $58 million for the two largest hurricanes and $19 million for other hurricanes, up to a maximum total of $146 million, effective from June 1, 2020 to May 31, 2021. The amounts recoverable from the FHCF totaled $32 million and $52 million as of December 31, 2020 and 2019, respectively. Federal Government - National Flood Insurance Program NFIP is a program administered by the Federal Emergency Management Agency (“FEMA”) whereby the Company sells and services NFIP flood insurance policies as an agent of FEMA and receives fees for its services. The Company is fully indemnified for claims and claim expenses and does not retain any ultimate risk for the indemnified business. The federal government is obligated to pay all claims and certain allocated loss adjustment expenses in accordance with the arrangement. Congressional authorization for the NFIP is periodically evaluated and may be subjected to freezes, including when the federal government experiences a shutdown. FEMA has a NFIP reinsurance program to manage the future exposure of the NFIP through the transfer of risk to private reinsurance companies and capital market investors. Congress is evaluating the funding of the program as well as considering reforms to the program that would be incorporated in legislation to reauthorize the NFIP. The amounts recoverable as of December 31, 2020 and 2019 were $30 million and $25 million, respectively. Premiums earned under the NFIP include $261 million, $258 million and $258 million in 2020, 2019 and 2018, respectively. Qualifying losses incurred include $87 million, $150 million and $118 million in 2020, 2019 and 2018, respectively. Catastrophe reinsurance The Company’s reinsurance program is designed to provide reinsurance protection for catastrophes resulting from multiple perils including hurricanes, windstorms, hail, tornadoes, earthquakes, wildfires, and fires following earthquakes. • The majority of the Company’s program comprises multi-year contracts, primarily placed in the traditional reinsurance market, such that generally one-third of the program is renewed every year. • Coverage is generally purchased on a broad geographic, product line and multiple peril loss basis. • The Company purchases reinsurance from traditional reinsurance companies as well as the insurance linked securities market. • Florida personal lines property is covered by a separate agreement, as the risk of loss is different and the Company’s subsidiaries operating in this state are separately capitalized. • A portion of New Jersey personal lines property and automobile remains covered by a separate standalone agreement. The Company’s current catastrophe reinsurance program supports the Company’s risk tolerance framework that targets less than a 1% likelihood of annual aggregate catastrophe losses from hurricanes and earthquakes, excluding other catastrophe losses and, net of reinsurance, exceeding $2 billion. The 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 and earthquakes. These reinsurance agreements are part of the catastrophe management strategy, which is intended to provide shareholders an acceptable return on the risks assumed in the property business, and to reduce variability of earnings, while providing protection to customers. The Company has the following catastrophe reinsurance agreements in effect as of December 31, 2020. The June 1, 2020 Nationwide Excess Catastrophe Reinsurance Program (the “Nationwide Program”) provides coverage up to $4.98 billion of loss less a $500 million retention, and is subject to the percentage of reinsurance placed in each of its agreements. Personal lines property business in the state of Florida is excluded from this program. New Jersey personal lines property and automobile are covered under portions of this program, in addition to a separate standalone agreement. 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: • The traditional market placement provides limits totaling $3.00 billion for losses arising out of multiple perils and is comprised of $2.25 billion of limits with 1 annual reinstatement of limits; two contracts combining $462 million of limits with one reinstatement of limits over a seven-year term; and two single-year term contracts combining $284 million of limits with no reinstatements. • ILS placements provide $1.53 billion of reinsurance limits for qualifying losses in all states except Florida caused by “Named Peril Basis” events with no reinstatement of the limits. ILS placements are comprised of $150 million and $375 million placements providing occurrence only coverage; and $100 million, $400 million and $500 million placements providing occurrence and aggregate protection. 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 limit. Recoveries are limited to our ultimate net loss from the reinsured event. The New Jersey standalone agreement comprises two contracts that reinsure personal lines property and automobile catastrophe losses caused by multiple perils in New Jersey and provides 63% of $400 million of limits in excess of provisional retentions of $150 million. Each contract includes one annual reinstatement of limits. The New Jersey contracts inure to portions of the Nationwide Program. The Kentucky earthquake agreement comprises a three-year term contract that reinsures personal lines property losses caused by earthquakes and fire following earthquakes in Kentucky and provides $28 million of limits, 95% placed, in excess of a $2 million retention. The 2020 Florida program provides coverage up to $633 million of loss less a $20 million retention. The Florida program includes reinsurance agreements placed with the traditional market, the Florida Hurricane Catastrophe Fund (“FHCF”), and the Insurance Linked Securities (“ILS”) market as follows: • The traditional market placement comprises $295 million of reinsurance limits for losses to personal lines property in Florida arising out of multiple perils. The Excess contract, which forms a part of the traditional market placement, with $264 million of limits, subject to a $20 million retention, provides coverage for perils not covered by the FHCF contracts, which only cover hurricanes. • The FHCF contracts provide approximately $118 million of limits for qualifying losses to personal lines property in Florida caused by storms the National Hurricane Center declares to be hurricanes. • The ILS placement provides $200 million of reinsurance limits for qualifying losses to personal lines property in Florida caused by a named storm event, a severe weather event, an earthquake event, a fire event, a volcanic eruption event, or a meteorite impact event. The Company has not experienced credit losses on its catastrophe reinsurance programs. The total cost of the property catastrophe reinsurance program was $425 million, $386 million and $343 million in 2020, 2019 and 2018, respectively. Other reinsurance programs The Company’s other reinsurance programs relate to asbestos, environmental, and other liability exposures and commercial lines, including shared economy. These programs include reinsurance recoverables of $166 million and $158 million from Lloyd’s of London as of December 31, 2020 and 2019, respectively. Excluding Lloyd’s of London, the largest reinsurance recoverable balance the Company had outstanding was $165 million and $115 million from Aleka Insurance Inc. as of December 31, 2020 and 2019, respectively. Lloyd’s of London, through the creation of Equitas Limited (“Equitas”), implemented a restructuring to solidify its capital base and to segregate claims for years prior to 1993. In 2007, Berkshire Hathaway’s subsidiary, National Indemnity Company, assumed responsibility for the Equitas’ claim liabilities through a loss portfolio transfer reinsurance agreement and continues to runoff the Equitas’ claims. Life and annuity reinsurance recoverables The Company reinsures certain life insurance and annuity risks to other insurers primarily under yearly renewable term, coinsurance, modified coinsurance and coinsurance with funds withheld agreements. These agreements result in a passing of the agreed-upon percentage of risk to the reinsurer in exchange for negotiated reinsurance premium payments. Modified coinsurance and coinsurance with funds withheld are similar to coinsurance, except that the cash and investments that support the liability for contract benefits are not transferred to the assuming company and settlements are made on a net basis between the companies. For certain term life insurance policies issued prior to October 2009, the Company ceded up to 90% of the mortality risk depending on the year of policy issuance under coinsurance agreements to a pool of fourteen unaffiliated reinsurers. Effective October 2009, mortality risk on term business is ceded under yearly renewable term agreements under which the Company cedes mortality in excess of its retention, which is consistent with how the Company generally reinsures its permanent life insurance business. Retention limits by period of policy issuance Period Retention limits April 2015 through current Single life: $2 million per life Joint life: no longer offered April 2011 through March 2015 Single life: $5 million per life, $3 million age 70 and over, and $10 million for contracts that meet specific criteria Joint life: $8 million per life, and $10 million for contracts that meet specific criteria July 2007 through March 2011 $5 million per life, $3 million age 70 and over, and $10 million for contracts that meet specific criteria September 1998 through June 2007 $2 million per life, in 2006 the limit was increased to $5 million for instances when specific criteria were met August 1998 and prior Up to $1 million per life In addition, the Company has used reinsurance to effect the disposition of certain blocks of business. The Company had reinsurance recoverables of $1.28 billion and $1.29 billion as of December 31, 2020 and 2019, respectively, due from Prudential related to the disposal of substantially all of its variable annuity business that was effected through reinsurance agreements. Amounts ceded to Prudential December 31, ($ in millions) 2020 2019 2018 Premiums and contract charges $ 64 $ 65 $ 72 Contract benefits 46 (4) 87 Interest credited to contractholder funds 20 19 20 Operating costs and expenses 12 12 14 As of December 31, 2020 and 2019, the Company had reinsurance recoverables of $99 million and $112 million, respectively, due from subsidiaries of Citigroup (Triton Insurance and American Health and Life Insurance) and Scottish Re (U.S.), Inc. in connection with the disposition of substantially all of the direct response distribution business in 2003. As of December 31, 2020 and 2019, the Company had $66 million and $73 million of reinsurance recoverables related to Scottish Re (U.S.), Inc. On December 14, 2018, the Delaware Insurance Commissioner placed Scottish Re (U.S.), Inc. under regulatory supervision. On March 6, 2019, the Chancery Court of the State of Delaware entered a Rehabilitation and Injunction Order (the “Rehabilitation Order”) in response to a petition filed by the Insurance Commissioner (the “Petition”). The Company joined in a joint motion filed on behalf of several affected parties asking the court to allow a specified amount of offsetting claim payments and losses against premiums remitted to Scottish Re (U.S.), Inc. The Company also filed a separate motion related to the reimbursement of claim payments where Scottish Re (U.S.), Inc. is also acting as administrator. The Court has not yet ruled on either of these motions. In the interim, the Company and several other affected parties have been permitted to exercise certain setoff rights while the parties address any potential disputes. On June 30, 2020, pursuant to the Petition, Scottish Re (U.S.), Inc. submitted a proposed Plan of Rehabilitation (“Plan”) for consideration by the Court. On November 2, 2020, the Court issued a Third Amended Order to Show Cause scheduling a hearing on the Petition and Plan for May 25, 2021. The Company continues to monitor Scottish Re (U.S.), Inc. for future developments and will reevaluate its allowance for expected credit losses as new information becomes available. The Company is the assuming reinsurer for Lincoln Benefit Life Company’s (“LBL’s”) life insurance business sold through the Allstate agency channel and LBL’s payout annuity business in force prior to the sale of LBL on April 1, 2014. Under the terms of the reinsurance agreement, the Company is required to have a trust with assets greater than or equal to the statutory reserves ceded by LBL to the Company, measured on a monthly basis. As of December 31, 2020, the trust held $6.29 billion of investments, which are reported in the Consolidated Statement of Financial Position. As of December 31, 2020, the gross life insurance in force was $425.44 billion of which $67.32 billion was ceded to the unaffiliated reinsurers. |
Deferred Policy Acquisition and
Deferred Policy Acquisition and Sales Inducement Costs | 12 Months Ended |
Dec. 31, 2020 | |
Deferred Policy Acquisition and Sales Inducement Costs | |
Deferred Policy Acquisition and Sales Inducement Costs | Note 11 Deferred Policy Acquisition and Sales Inducement Costs Deferred policy acquisition costs activity For the years ended December 31, ($ in millions) 2020 2019 2018 Balance, beginning of year $ 4,699 $ 4,784 $ 4,191 Acquisition costs deferred 5,758 5,622 5,663 Amortization charged to income (5,630) (5,533) (5,222) Effect of unrealized gains and losses (127) (174) 152 Balance, end of year $ 4,700 $ 4,699 $ 4,784 Deferred sales inducement costs activity (1) For the years ended December 31, ($ in millions) 2020 2019 2018 Balance, beginning of year $ 27 $ 34 $ 36 Amortization charged to income (5) (5) (4) Effect of unrealized gains and losses 3 (2) 2 Balance, end of year $ 25 $ 27 $ 34 (1) Deferred sales inducement costs primarily relate to fixed annuities and interest-sensitive life contracts and are recorded as part of other assets on the Consolidated Statements of Financial Position. |
Capital Structure
Capital Structure | 12 Months Ended |
Dec. 31, 2020 | |
Capital Structure | |
Capital Structure | Note 12 Capital Structure Total debt outstanding As of December 31, ($ in millions) 2020 2019 Floating Rate Senior Notes, due 2021 (1) $ 250 $ 250 Floating Rate Senior Notes, due 2023 (1) 250 250 3.150% Senior Notes, due 2023 (2) 500 500 0.750% Senior Notes, due 2025 (2) 600 — Due after one year through five years 1,600 1,000 3.280% Senior Notes, due 2026 (2) 550 550 1.450% Senior Notes, due 2030 (2) 600 — Due after five years through ten years 1,150 550 6.125% Senior Notes, due 2032 (2) 159 159 5.350% Senior Notes due 2033 (2) 323 323 5.550% Senior Notes due 2035 (2) 546 546 5.950% Senior Notes, due 2036 (2) 386 386 6.900% Senior Debentures, due 2038 165 165 5.200% Senior Notes, due 2042 (2) 62 62 4.500% Senior Notes, due 2043 (2) 500 500 4.200% Senior Notes, due 2046 (2) 700 700 3.850% Senior Notes, due 2049 (2) 500 500 5.100% Subordinated Debentures, due 2053 500 500 5.750% Subordinated Debentures, due 2053 800 800 6.500% Junior Subordinated Debentures, due 2067 500 500 Due after ten years 5,141 5,141 Long-term debt total principal 7,891 6,691 Debt issuance costs (66) (60) Total long-term debt 7,825 6,631 Short-term debt (3) — — Total debt $ 7,825 $ 6,631 (1) 2021 and 2023 Floating Rate Senior Notes are not redeemable prior to the applicable maturity dates and bear interest at a floating rate equal to three-month LIBOR, reset quarterly on each interest reset date, plus 0.43% and 0.63% per year, respectively. (2) Senior Notes are subject to redemption at the Company’s option in whole or in part at any time at the greater of either 100% of the principal amount plus accrued and unpaid interest to the redemption date or the discounted sum of the present values of the remaining scheduled payments of principal and interest and accrued and unpaid interest to the redemption date. (3) The Company classifies any borrowings which have a maturity of twelve months or less at inception as short-term debt. Debt maturities for each of the next five years and thereafter ($ in millions) 2021 $ 250 2022 — 2023 750 2024 — 2025 600 Thereafter 6,291 Total long-term debt principal $ 7,891 On November 19, 2020, the Company issued $600 million of 0.750% Senior Notes due 2025 and $600 million of 1.450% Senior Notes due 2030. Interest on the Senior Notes is payable semi-annually in arrears on June 15 and December 15 of each year, beginning on June 15, 2021. The Senior Notes are redeemable at any time at the applicable redemption price prior to the maturity date. The net proceeds of this issuance were used to partially fund the acquisition of National General. The Subordinated Debentures may be redeemed (i) in whole at any time or in part from time to time on or after January 15, 2023 for the 5.100% Subordinated Debentures and August 15, 2023 for the 5.750% Subordinated Debentures at their principal amount plus accrued and unpaid interest to, but excluding, the date of redemption; provided that if the Subordinated Debentures are not redeemed in whole, at least $25 million aggregate principal amount must remain outstanding, or (ii) in whole, but not in part, prior to January 15, 2023 for the 5.100% Subordinated Debentures and August 15, 2023 for the 5.750% Subordinated Debentures, within 90 days after the occurrence of certain tax and rating agency events, at their principal amount or, if greater, a make-whole redemption price, plus accrued and unpaid interest to, but excluding, the date of redemption. The 5.750% Subordinated Debentures have this make-whole redemption price provision only when a reduction of equity credit assigned by a rating agency has occurred. Interest on the 5.100% Subordinated Debentures is payable quarterly at the stated fixed annual rate to January 14, 2023, or any earlier redemption date, and then at an annual rate equal to the three-month LIBOR plus 3.165%. Interest on the 5.750% Subordinated Debentures is payable semi-annually at the stated fixed annual rate to August 14, 2023, or any earlier redemption date, and then quarterly at an annual rate equal to the three-month LIBOR plus 2.938%. The Company may elect to defer payment of interest on the Subordinated Debentures for one or more consecutive interest periods that do not exceed five years. During a deferral period, interest will continue to accrue on the Subordinated Debentures at the then-applicable rate and deferred interest will compound on each interest payment date. If all deferred interest on the Subordinated Debentures is paid, the Company can again defer interest payments. As of December 31, 2020, the Company had outstanding $500 million of Series A 6.500% Fixed-to-Floating Rate Junior Subordinated Debentures (“Debentures”). The scheduled maturity date for the Debentures is May 15, 2057 with a final maturity date of May 15, 2067. The Debentures may be redeemed (i) in whole or in part, at any time on or after May 15, 2037 at the principal amount plus accrued and unpaid interest to the date of redemption, or (ii) in certain circumstances, in whole or in part, prior to May 15, 2037 at the principal amount plus accrued and unpaid interest to the date of redemption or, if greater, a make-whole price. Interest on the Debentures is payable semi-annually at the stated fixed annual rate to May 15, 2037, and then payable quarterly at an annual rate equal to the three-month LIBOR plus 2.120%. The Company may elect at one or more times to defer payment of interest on the Debentures for one or more consecutive interest periods that do not exceed 10 years. Interest compounds during such deferral periods at the rate in effect for each period. The interest deferral feature obligates the Company in certain circumstances to issue common stock or certain other types of securities if it cannot otherwise raise sufficient funds to make the required interest payments. The Company has reserved 75 million shares of its authorized and unissued common stock to satisfy this obligation. The terms of the Company’s outstanding subordinated debentures prohibit the Company from declaring or paying any dividends or distributions on common or preferred stock or redeeming, purchasing, acquiring, or making liquidation payments on common stock or preferred stock if the Company has elected to defer interest payments on the subordinated debentures, subject to certain limited exceptions. In connection with the issuance of the Debentures, the Company entered into a replacement capital covenant (“RCC”). This covenant was not intended for the benefit of the holders of the Debentures and could not be enforced by them. Rather, it was for the benefit of holders of one or more other designated series of the Company’s indebtedness (“covered debt”), currently the 5.750% Subordinated Debentures due 2053. Pursuant to the RCC, the Company has agreed that it will not repay, redeem, or purchase the Debentures on or before May 15, 2067 (or such earlier date on which the RCC terminates by its terms) unless, subject to certain limitations, the Company has received net cash proceeds in specified amounts from the sale of common stock or certain other qualifying securities. The promises and covenants contained in the RCC will not apply if (i) S&P upgrades the Company’s issuer credit rating to A or above, (ii) the Company redeems the Debentures due to a tax event, (iii) after notice of redemption has been given by the Company and a market disruption event occurs preventing the Company from raising proceeds in accordance with the RCC, or (iv) the Company repurchases or redeems up to 10% of the outstanding principal of the Debentures in any one-year period, provided that no more than 25% will be so repurchased, redeemed or purchased in any ten-year period. The RCC terminates in 2067. The RCC will terminate prior to its scheduled termination date if (i) the Debentures are no longer outstanding and the Company has fulfilled its obligations under the RCC or it is no longer applicable, (ii) the holders of a majority of the then-outstanding principal amount of the then-effective series of covered debt consent to agree to the termination of the RCC, (iii) the Company does not have any series of outstanding debt that is eligible to be treated as covered debt under the RCC, (iv) the Debentures are accelerated as a result of an event of default, (v) certain rating agency or change in control events occur, (vi) S&P, or any successor thereto, no longer assigns a solicited rating on senior debt issued or guaranteed by the Company, or (vii) the termination of the RCC would have no effect on the equity credit provided by S&P with respect to the Debentures. An event of default, as defined by the supplemental indenture, includes default in the payment of interest or principal and bankruptcy proceedings. The administrator of LIBOR has announced it will consult on its intention to cease the publication of the one week and two month U.S. dollar (“USD”) LIBOR settings immediately following the LIBOR publication on December 31, 2021, and the remaining USD LIBOR settings immediately following the LIBOR publication on June 30, 2023. The Subordinated Debentures and the 2023 Floating Rate Senior Notes allow for the use of an alternative methodology to determine the interest rate if LIBOR is no longer available. To manage short-term liquidity, the Company maintains a commercial paper program and a credit facility as a potential source of funds. The commercial paper program has a borrowing limit of $750 million. In November 2020, the Company entered into a new agreement for a $750 million unsecured revolving credit facility with a maturity date of November 2025. This facility contains an increase provision that would allow up to an additional $500 million of borrowing. This facility has a financial covenant requiring the Company not to exceed a 37.5% debt to capitalization ratio as defined in the agreement. Although the right to borrow under the facility is not subject to a minimum rating requirement, the costs of maintaining the facility and borrowing under it are based on the ratings of the Company’s senior unsecured, unguaranteed long-term debt. The total amount outstanding at any point in time under the combination of the commercial paper program and the credit facility cannot exceed the amount that can be borrowed under the credit facility. No amounts were outstanding under the credit facility as of December 31, 2020 or 2019. The Company had no commercial paper outstanding as of December 31, 2020 or 2019. The Company paid $311 million, $312 million and $330 million of interest on debt in 2020, 2019 and 2018, respectively. The Company had $430 million and $389 million of investment-related debt that is reported in other liabilities and accrued expenses as of December 31, 2020 and 2019, respectively. During 2018, the Company filed a universal shelf registration statement with the Securities and Exchange Commission (“SEC”) that expires in 2021. The registration statement covers an unspecified amount of securities and can be used to issue debt securities, common stock, preferred stock, depositary shares, warrants, stock purchase contracts, stock purchase units and securities of trust subsidiaries. Common stock The Company had 900 million shares of issued common stock of which 304 million shares were outstanding and 596 million shares were held in treasury as of December 31, 2020. In 2020, the Company acquired 17 million shares at an average cost of $97.54 and reissued 3 million net shares under equity incentive plans. Preferred stock All outstanding preferred stock represents noncumulative perpetual preferred stock with a $1.00 par value per share and a liquidation preference of $25,000 per share. Total preferred stock outstanding As of December 31, Aggregate liquidation preference ($ in millions) Dividend per depository share (1) Aggregate dividend payment ($ in millions) 2020 2019 2020 2019 Dividend rate 2020 2019 2018 2020 2019 2018 Series A — 11,500 $ — $ 287.5 5.625 % $ — $ 1.41 $ 1.41 $ 4 (2) $ 16 $ 16 Series C — — — — 6.750 % — — 1.69 — — 26 (2) Series D — — — — 6.625 % — 1.66 1.66 — 9 (2) 9 Series E — — — — 6.625 % — 1.66 1.66 — 49 (2) 49 Series F — — — — 6.250 % — 1.56 1.56 — 16 (2) 16 Series G 23,000 23,000 575.0 575.0 5.625 % 1.41 1.41 1.41 32 32 18 Series H 46,000 46,000 1,150.0 1,150.0 5.100 % 1.28 1.28 — 59 12 — Series I 12,000 12,000 300.0 300.0 4.750 % 1.19 1.19 — 13 — — Total 81,000 92,500 $ 2,025 $ 2,313 $ 108 $ 134 (2) $ 134 (2) (1) Each depositary share represents a 1/1,000 th interest in a share of preferred stock. (2) Excludes $10 million, $37 million and $13 million in 2020, 2019 and 2018, respectively, related to original issuance costs in preferred stock dividends on the Consolidated Statements of Operations and Consolidated Statements of Shareholders’ Equity as a result of the preferred stock redemptions. On January 15, 2020, the Company redeemed all 11,500 shares of its Fixed Rate Noncumulative Preferred Stock, Series A, par value $1.00 per share and liquidation preference $25,000 per share and the corresponding depositary shares. The total redemption payment was $288 million, using the proceeds from the issuance of the Fixed Rate Noncumulative Perpetual Preferred Stock, Series I. In the first quarter of 2020, the Company recognized $10 million of original issuance costs in preferred stock dividends on the Consolidated Statements of Operations and Consolidated Statements of Shareholders’ Equity as a result of the preferred stock redemption. The preferred stock ranks senior to the Company’s common stock with respect to the payment of dividends and liquidation rights. The Company will pay dividends on the preferred stock on a noncumulative basis only when, as and if declared by the Company’s board of directors (or a duly authorized committee of the board) and to the extent that the Company has legally available funds to pay dividends. If dividends are declared on the preferred stock, they will be payable quarterly in arrears at an annual fixed rate. Dividends on the preferred stock are not cumulative. Accordingly, in the event dividends are not declared on the preferred stock for payment on any dividend payment date, then those dividends will cease to be payable. If the Company has not declared a dividend before the dividend payment date for any dividend period, the Company has no obligation to pay dividends for that dividend period, whether or not dividends are declared for any future dividend period. No dividends may be paid or declared on the Company’s common stock and no shares of the Company’s common stock may be repurchased unless the full dividends for the latest completed dividend period on the preferred stock have been declared and paid or provided for. The Company is prohibited from declaring or paying dividends on its Series G preferred stock in excess of the amount of net proceeds from an issuance of common stock taking place within 90 days before a dividend declaration date if, on that dividend declaration date, either: (1) the risk-based capital ratios of the largest U.S. property-casualty insurance subsidiaries that collectively account for 80% or more of the net written premiums of U.S. property-casualty insurance business on a weighted average basis were less than 175% of their company action level risk-based capital as of the end of the most recent year; or (2) consolidated net income for the four-quarter period ending on the preliminary quarter end test date (the quarter that is two quarters prior to the most recently completed quarter) is zero or negative and consolidated shareholders’ equity (excluding AOCI, and subject to certain other adjustments relating to changes in U.S. GAAP) as of each of the preliminary quarter test date and the most recently completed quarter has declined by 20% or more from its level as measured at the end of the benchmark quarter (the date that is ten quarters prior to the most recently completed quarter). If the Company fails to satisfy either of these tests on any dividend declaration date, the restrictions on dividends will continue until the Company is able again to satisfy the test on a dividend declaration date. In addition, in the case of a restriction arising under (2) above, the restrictions on dividends will continue until consolidated shareholders’ equity (excluding AOCI, and subject to certain other adjustments relating to changes in U.S. GAAP) has increased, or has declined by less than 20%, in either case as compared to its level at the end of the benchmark quarter for each dividend payment date as to which dividend restrictions were imposed. The preferred stock does not have voting rights except with respect to certain changes in the terms of the preferred stock, in the case of certain dividend nonpayments, certain other fundamental corporate events, mergers or consolidations and as otherwise provided by law. If and when dividends have not been declared and paid in full for at least six quarterly dividend periods or their equivalent (whether or not consecutive), the authorized number of directors then constituting our board of directors will be increased by two. The holders of the preferred stock, together with the holders of all other affected classes and series of voting parity stock, voting as a single class, will be entitled to elect the two additional members of the board of directors of the Company, subject to certain conditions. The board of directors shall at no time have more than two preferred stock directors. The preferred stock is perpetual and has no maturity date. The preferred stock is redeemable at the Company’s option in whole or in part, on or after April 15, 2023 for Series G, October 15, 2024 for Series H and January 15, 2025 for Series I at a redemption price of $25,000 per share of preferred stock, plus declared and unpaid dividends. Prior to April 15, 2023 for Series G, October 15, 2024 for Series H and January 15, 2025 for Series I, the preferred stock is redeemable at the Company’s option, in whole but not in part, within 90 days of the occurrence of certain regulatory capital event at a redemption price equal to $25,000 or $25,500 per share or a certain rating agency event at a redemption price equal to $25,000 or $25,500 per share, plus declared and unpaid dividends for Series G and for Series H and I, respectively. |
Company Restructuring
Company Restructuring | 12 Months Ended |
Dec. 31, 2020 | |
Restructuring and Related Activities [Abstract] | |
Company Restructuring | Note 13 Company Restructuring The Company undertakes various programs to reduce expenses. These programs generally involve a reduction in staffing levels, and in certain cases, office closures. Restructuring and related charges primarily include the following costs related to these programs: • Employee - severance and relocation benefits • Exit - contract termination penalties The expenses related to these activities are included in the Consolidated Statements of Operations as restructuring and related charges and totaled $259 million, $41 million and $67 million in 2020, 2019 and 2018, respectively. Restructuring expenses in 2020 are primarily due to Transformative Growth to optimize and simplify the Company’s operating model and cost structure. In connection with Transformative Growth, the Company expects to incur restructuring and related charges totaling approximately $290 million, with $238 million recorded in 2020, primarily in the Allstate Protection segment, and the remainder to be recognized in future quarters. The Company expects these actions will be completed in 2021. Employee costs of this program include severance and employee benefits primarily impacting claims, sales, service and support functions. Exit costs reflect real estate costs primarily related to accelerated amortization of right of use assets and related leasehold improvements at facilities to be vacated. Restructuring activity during the period ($ in millions) Employee costs Exit costs Total liability Restructuring liability as of December 31, 2019 $ 14 $ 8 $ 22 Expense incurred 214 46 260 Adjustments to liability 3 (4) (1) Payments and non-cash pension settlements (159) (50) (209) Restructuring liability as of December 31, 2020 $ 72 $ — $ 72 As of December 31, 2020, the cumulative amount incurred to date for active programs related to employee severance, relocation benefits and exit expenses totaled $223 million for employee costs and $52 million for exit costs. |
Commitments, Guarantees and Con
Commitments, Guarantees and Contingent Liabilities | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments, Guarantees and Contingent Liabilities | Note 14 Commitments, Guarantees and Contingent Liabilities Shared markets and state facility assessments The Company is required to participate in assigned risk plans, reinsurance facilities and joint underwriting associations in various states that provide insurance coverage to individuals or entities that otherwise are unable to purchase such coverage from private insurers. The Company routinely reviews its exposure to assessments from these plans, facilities and government programs. Underwriting results related to these arrangements, which tend to be adverse, have been immaterial to the Company’s results of operations in the last three years. Because of the Company’s participation, it may be exposed to losses that surpass the capitalization of these facilities or assessments from these facilities. Florida Citizens Castle Key is subject to assessments from Citizens Property Insurance Corporation in the state of Florida (“FL Citizens”), which was initially created by the state of Florida to provide insurance to property owners unable to obtain coverage in the private insurance market. FL Citizens, at the discretion and direction of its Board of Governors (“FL Citizens Board”), can levy a regular assessment on assessable insurers and assessable insureds for a deficit in any calendar year up to a maximum of the greater of: 2% of the projected deficit or 2% of the aggregate statewide direct written premium for the prior calendar year. The base of assessable insurers includes all property and casualty premiums in the state, except workers’ compensation, medical malpractice, accident and health insurance and policies written under the NFIP. An insurer may recoup a regular assessment through a surcharge to policyholders. In order to recoup this assessment, an insurer must file for a policy surcharge with the Florida Office of Insurance Regulation at least fifteen days prior to imposing the surcharge on policies. If a deficit remains after the regular assessment, FL Citizens can also levy emergency assessments in the current and subsequent years. Companies are required to collect the emergency assessments directly from residential property policyholders and remit to FL Citizens as collected. Currently, the emergency assessment is zero for all policies issued or renewed on or after July 1, 2015. Louisiana Citizens Louisiana Citizens Property Insurance Corporation (“LA Citizens”) can levy a regular assessment on participating companies for a deficit in any calendar year up to a maximum of the greater of 10% of the calendar year deficit or 10% of Louisiana direct property premiums industry-wide for the prior calendar year. If the plan year deficit exceeds the amount that can be recovered through Regular Assessments, LA Citizens may fund the remaining deficit by issuing revenue assessment bonds in the capital markets. LA Citizens then declares Emergency Assessments each year to provide debt service on the bonds until they are retired. Companies writing assessable lines must surcharge their policyholders Emergency Assessments in the percentage established annually by LA Citizens and must remit amounts collected to the bond trustee on a quarterly basis. Emergency assessments to pay off bonds issued in 2007 for the hurricanes of 2005 will continue until 2025. Facilities such as FL Citizens and LA Citizens are generally designed so that the ultimate cost is borne by policyholders; however, the exposure to assessments from these facilities and the availability of recoupments or premium rate increases may not offset each other in the Company’s financial statements. Moreover, even if they do offset each other, they may not offset each other in financial statements for the same fiscal period due to the ultimate timing of the assessments and recoupments or premium rate increases, as well as the possibility of policies not being renewed in subsequent years. California Earthquake Authority Exposure to certain potential losses from earthquakes in California is limited by the Company’s participation in the California Earthquake Authority (“CEA”), which provides insurance for California earthquake losses. The CEA is a privately-financed, publicly-managed state agency created to provide insurance coverage for earthquake damage. Insurers selling homeowners insurance in California are required to offer earthquake insurance to their customers either through their company or by participation in the CEA. The Company’s homeowners policies continue to include coverages for losses caused by explosions, theft, glass breakage and fires following an earthquake, which are not underwritten by the CEA. As of October 31, 2020, the CEA’s capital balance was approximately $6.00 billion. Should losses arising from an earthquake cause a deficit in the CEA, an additional $1.10 billion would be obtained from the proceeds of revenue bonds the CEA may issue, an existing $9.50 billion reinsurance layer, $1.00 billion from policy surcharge, and finally, if needed, assessments on participating insurance companies. Participating insurers are required to pay an assessment, currently estimated not to exceed $1.70 billion, if the capital of the CEA falls below $350 million. Within the limits previously described, the assessment could be intended to restore the CEA’s capital to a level of $350 million. There is no provision that allows insurers to recover assessments through a premium surcharge or other mechanism. The CEA’s projected aggregate claim paying capacity is $19.30 billion as of October 31, 2020 and if an event were to result in claims greater than its capacity, affected policyholders may be paid a prorated portion of their covered losses, paid on an installment basis, or no payments may be made if the claim paying capacity of the CEA is insufficient. All future assessments on participating CEA insurers are based on their CEA insurance market share as of December 31 of the preceding year. As of December 31, 2019, the Company’s market share was 9.3%. The Company does not expect its market share to materially change. At this level, the Company’s maximum possible CEA assessment was $155 million during 2020. These amounts are re-evaluated by the board of directors of the CEA on an annual basis. Accordingly, assessments from the CEA for a particular quarter or annual period may be material to the results of operations and cash flows, but not the financial position of the Company. Management believes the Company’s exposure to earthquake losses in California has been significantly reduced as a result of its participation in the CEA. Texas Windstorm Insurance Association The Company participates as a member of the Texas Windstorm Insurance Association (“TWIA”), which provides wind and hail property coverage to coastal risks unable to procure coverage in the voluntary market. Wind and hail coverage is written on a TWIA-issued policy. TWIA follows a funding structure first utilizing currently available funds set aside from current and prior years. Under the current law, to the extent losses exceed premiums received from policyholders, TWIA utilizes a combination of reinsurance, TWIA issued securities, as well as member and policyholder assessments to fund loss payments. During 2020, the TWIA Board announced additional assessments primarily related to Hurricane Harvey for which the Company’s share was $1 million. These costs were recorded in property and casualty insurance claims and claims expense as catastrophe losses on the Consolidated Statements of Operations. Any assessments from TWIA for a particular quarter or annual period may be material to the results of operations and cash flows, but not to the financial position of the Company. Texas Fair Plan Association The Company participates as a member of the Texas Fair Plan Association (“FAIR Plan”), which provides residential property insurance to inland areas designated as underserved by the Commissioner of Insurance and the applicant(s) are unable to procure coverage in the voluntary market. The FAIR Plan issues insurance policies, like an insurance company, and it also functions as a pooling mechanism that allocates premiums, claims and expenses back to the insurance industry. As a result of the losses incurred related to Hurricane Harvey, in 2017 the FAIR Plan Board unanimously voted to approve its first ever member assessment of which the Company’s share was $8 million based on total direct premium written in Texas. Insurers are permitted to recover the assessment through either a premium surcharge applied to existing customers over a three-year period or increased rates, but the ability to fully recover the assessment may be impacted by market conditions or other factors. North Carolina Joint Underwriters Association The North Carolina Joint Underwriters Association (“NCJUA”) was created to provide property insurance for properties (other than the state’s beach and coastal areas) that insurers are not otherwise willing to insure. All insurers licensed to write property insurance in North Carolina are members of the NCJUA. Premiums, losses and expenses of the NCJUA are shared by the member companies in proportion to their respective North Carolina property insurance writings. Member companies participate in plan deficits or surpluses based on their participation ratios, which are determined annually. The Company had a $6 million receivable from the NCJUA at December 31, 2020 representing our participation in the NCJUA’s surplus of $33 million for all open years. North Carolina Insurance Underwriting Association The North Carolina Insurance Underwriting Association (“NCIUA”) provides windstorm and hail coverage as well as homeowners policies for properties located in the state’s beach and coastal areas that insurers are not otherwise willing to insure. All insurers licensed to write residential and commercial property insurance in North Carolina are members of the NCIUA. Members are assessed in proportion to their North Carolina residential and commercial property insurance writings, which is determined annually and varies by coverage, for plan deficits. As of December 31, 2020, the NCIUA had a surplus of $555 million. No member company is entitled to the distribution of any portion of the Association’s surplus. The Company does not recognize any interest related to this surplus. Legislation in 2009 capped insurers’ assessments for losses incurred in any calendar year at $1.00 billion. Subsequent to an industry assessment of $1.00 billion, if the plan continues to require funding, it may authorize insurers to assess a 10% catastrophe recovery charge on each property insurance policy statewide to be remitted to the plan. Other programs The Company is also subject to assessments by the NCRF and the FHCF, which are described in Note 10. Guaranty funds Under state insurance guaranty fund laws, insurers doing business in a state can be assessed, up to prescribed limits, for certain obligations of insolvent insurance companies to policyholders and claimants. Amounts assessed to each company are typically related to its proportion of business written in each state. The Company’s policy is to accrue assessments when the entity for which the insolvency relates has met its state of domicile’s statutory definition of insolvency, the amount of the loss is reasonably estimable and the related premium upon which the assessment is based is written. In most states, the definition is met with a declaration of financial insolvency by a court of competent jurisdiction. In certain states there must also be a final order of liquidation. Since most states allow a credit against premium or other state related taxes for assessments, an asset is recorded based on paid and accrued assessments for the amount the Company expects to recover on the respective state’s tax return and is realized over the period allowed by each state. As of December 31, 2020 and 2019, the liability balance included in other liabilities and accrued expenses was $12 million and $13 million, respectively. The related premium tax offsets included in other assets were $14 million and $15 million as of December 31, 2020 and 2019, respectively. Guarantees In the normal course of business, the Company provides standard indemnifications to contractual counterparties in connection with numerous transactions, including acquisitions and divestitures. The types of indemnifications typically provided include indemnifications for breaches of representations and warranties, taxes and certain other liabilities, such as third-party lawsuits. The indemnification clauses are often standard contractual terms and are entered into in the normal course of business based on an assessment that the risk of loss would be remote. The terms of the indemnifications vary in duration and nature. In many cases, the maximum obligation is not explicitly stated and the contingencies triggering the obligation to indemnify have not occurred and are not expected to occur. Consequently, the maximum amount of the obligation under such indemnifications is not determinable. Historically, the Company has not made any material payments pursuant to these obligations. The aggregate liability balance related to all guarantees was not material as of December 31, 2020. Regulation and compliance The Company is subject to extensive laws, regulations, administrative directives, and regulatory actions. From time to time, regulatory authorities or legislative bodies seek to influence and restrict premium rates, require premium refunds to policyholders, require reinstatement of terminated policies, prescribe rules or guidelines on how affiliates compete in the marketplace, restrict the ability of insurers to cancel or non-renew policies, require insurers to continue to write new policies or limit their ability to write new policies, limit insurers’ ability to change coverage terms or to impose underwriting standards, impose additional regulations regarding agency and broker compensation, regulate the nature of and amount of investments, impose fines and penalties for unintended errors or mistakes, impose additional regulations regarding cybersecurity and privacy, and otherwise expand overall regulation of insurance products and the insurance industry. In addition, the Company is subject to laws and regulations administered and enforced by federal agencies, international agencies, and other organizations, including but not limited to the SEC, the Financial Industry Regulatory Authority, the U.S. Equal Employment Opportunity Commission, and the U.S. Department of Justice. The Company has established procedures and policies to facilitate compliance with laws and regulations, to foster prudent business operations, and to support financial reporting. The Company routinely reviews its practices to validate compliance with laws and regulations and with internal procedures and policies. As a result of these reviews, from time to time the Company may decide to modify some of its procedures and policies. Such modifications, and the reviews that led to them, may be accompanied by payments being made and costs being incurred. The ultimate changes and eventual effects of these actions on the Company’s business, if any, are uncertain. Legal and regulatory proceedings and inquiries The Company and certain subsidiaries are involved in a number of lawsuits, regulatory inquiries, and other legal proceedings arising out of various aspects of its business. Background These matters raise difficult and complicated factual and legal issues and are subject to many uncertainties and complexities, including the underlying facts of each matter; novel legal issues; variations between jurisdictions in which matters are being litigated, heard, or investigated; changes in assigned judges; differences or developments in applicable laws and judicial interpretations; judges reconsidering prior rulings; the length of time before many of these matters might be resolved by settlement, through litigation, or otherwise; adjustments with respect to anticipated trial schedules and other proceedings; developments in similar actions against other companies; the fact that some of the lawsuits are putative class actions in which a class has not been certified and in which the purported class may not be clearly defined; the fact that some of the lawsuits involve multi-state class actions in which the applicable law(s) for the claims at issue is in dispute and therefore unclear; and the challenging legal environment faced by corporations and insurance companies. The outcome of these matters may be affected by decisions, verdicts, and settlements, and the timing of such decisions, verdicts, and settlements, in other individual and class action lawsuits that involve the Company, other insurers, or other entities and by other legal, governmental, and regulatory actions that involve the Company, other insurers, or other entities. The outcome may also be affected by future state or federal legislation, the timing or substance of which cannot be predicted. In the lawsuits, plaintiffs seek a variety of remedies which may include equitable relief in the form of injunctive and other remedies and monetary relief in the form of contractual and extra-contractual damages. In some cases, the monetary damages sought may include punitive or treble damages. Often specific information about the relief sought, such as the amount of damages, is not available because plaintiffs have not requested specific relief in their pleadings. When specific monetary demands are made, they are often set just below a state court jurisdictional limit in order to seek the maximum amount available in state court, regardless of the specifics of the case, while still avoiding the risk of removal to federal court. In Allstate’s experience, monetary demands in pleadings bear little relation to the ultimate loss, if any, to the Company. In connection with regulatory examinations and proceedings, government authorities may seek various forms of relief, including penalties, restitution, and changes in business practices. The Company may not be advised of the nature and extent of relief sought until the final stages of the examination or proceeding. Accrual and disclosure policy The Company reviews its lawsuits, regulatory inquiries, and other legal proceedings on an ongoing basis and follows appropriate accounting guidance when making accrual and disclosure decisions. The Company establishes accruals for such matters at management’s best estimate when the Company assesses that it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. The Company does not establish accruals for such matters when the Company does not believe both that it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. The Company’s assessment of whether a loss is reasonably possible, or probable, is based on its assessment of the ultimate outcome of the matter following all appeals. The Company does not include potential recoveries in its estimates of reasonably possible or probable losses. Legal fees are expensed as incurred. The Company continues to monitor its lawsuits, regulatory inquiries, and other legal proceedings for further developments that would make the loss contingency both probable and estimable, and accordingly accruable, or that could affect the amount of accruals that have been previously established. There may continue to be exposure to loss in excess of any amount accrued. Disclosure of the nature and amount of an accrual is made when there have been sufficient legal and factual developments such that the Company’s ability to resolve the matter would not be impaired by the disclosure of the amount of accrual. When the Company assesses it is reasonably possible or probable that a loss has been incurred, it discloses the matter. When it is possible to estimate the reasonably possible loss or range of loss above the amount accrued, if any, for the matters disclosed, that estimate is aggregated and disclosed. Disclosure is not required when an estimate of the reasonably possible loss or range of loss cannot be made. For certain of the matters described below in the “Claims related proceedings” and “Other proceedings” subsections, the Company is able to estimate the reasonably possible loss or range of loss above the amount accrued, if any. In determining whether it is possible to estimate the reasonably possible loss or range of loss, the Company reviews and evaluates the disclosed matters, in conjunction with counsel, in light of potentially relevant factual and legal developments. These developments may include information learned through the discovery process, rulings on dispositive motions, settlement discussions, information obtained from other sources, experience from managing these and other matters, and other rulings by courts, arbitrators or others. When the Company possesses sufficient appropriate information to develop an estimate of the reasonably possible loss or range of loss above the amount accrued, if any, that estimate is aggregated and disclosed below. There may be other disclosed matters for which a loss is probable or reasonably possible, but such an estimate is not possible. Disclosure of the estimate of the reasonably possible loss or range of loss above the amount accrued, if any, for any individual matter would only be considered when there have been sufficient legal and factual developments such that the Company’s ability to resolve the matter would not be impaired by the disclosure of the individual estimate. The Company currently estimates that the aggregate range of reasonably possible loss in excess of the amount accrued, if any, for the disclosed matters where such an estimate is possible is zero to $85 million, pre-tax. This disclosure is not an indication of expected loss, if any. Under accounting guidance, an event is “reasonably possible” if “the chance of the future event or events occurring is more than remote but less than likely” and an event is “remote” if “the chance of the future event or events occurring is slight.” This estimate is based upon currently available information and is subject to significant judgment and a variety of assumptions, and known and unknown uncertainties. The matters underlying the estimate will change from time to time, and actual results may vary significantly from the current estimate. The estimate does not include matters or losses for which an estimate is not possible. Therefore, this estimate represents an estimate of possible loss only for certain matters meeting these criteria. It does not represent the Company’s maximum possible loss exposure. Information is provided below regarding the nature of all of the disclosed matters and, where specified, the amount, if any, of plaintiff claims associated with these loss contingencies. Due to the complexity and scope of the matters disclosed in the “Claims related proceedings” and “Other proceedings” subsections below and the many uncertainties that exist, the ultimate outcome of these matters cannot be predicted and in the Company’s judgment, a loss, in excess of amounts accrued, if any, is not probable. In the event of an unfavorable outcome in one or more of these matters, the ultimate liability may be in excess of amounts currently accrued, if any, and may be material to the Company’s operating results or cash flows for a particular quarterly or annual period. However, based on information currently known to it, management believes that the ultimate outcome of all matters described below, as they are resolved over time, is not likely to have a material effect on the financial position of the Company. Claims related proceedings The Company is managing various disputes in Florida that raise challenges to the Company’s practices, processes, and procedures relating to claims for personal injury protection benefits under Florida auto policies. Medical providers continue to pursue litigation under various theories that challenge the amounts that the Company pays under the personal injury protection coverage, seeking additional benefit payments, as well as applicable interest, penalties and fees. There are two pending class actions, Pierce v. Allstate Insurance Company, et al. (Broward County, Fla. filed August 2013), the class settlement of which has received final approval, and Revival Chiropractic v. Allstate Insurance Company, et al. (M.D. Fla. filed January 2019), where the court denied class certification and plaintiff’s request to file a renewed motion for class certification. The Company is also defending litigation involving individual plaintiffs. The Company is vigorously asserting both procedural and substantive defenses to these lawsuits. The Company is defending putative class actions in various courts that raise challenges to the Company’s depreciation practices in homeowner property claims. In these lawsuits, plaintiffs generally allege that, when calculating actual cash value, the costs of “non-materials” such as labor, general contractor’s overhead and profit, and sales tax should not be subject to depreciation. The Company is currently defending the following lawsuits on this issue: Perry v. Allstate Indemnity Company, et al. (N.D. Ohio filed May 2016); Lado v. Allstate Vehicle and Property Insurance Company (S.D. Ohio filed March 2020); Maniaci v. Allstate Insurance Company (N.D. Ohio filed March 2020); Ferguson-Luke et al. v. Allstate Property and Casualty Insurance Company (N.D. Ohio filed April 2020); Brasher v. Allstate Indemnity Company (N.D. Ala. filed February 2018); Huey v. Allstate Vehicle and Property Insurance Company (N.D. Miss. filed October 2019); Floyd, et al. v. Allstate Indemnity Company et al. (D.S.C. filed January 2020); Clark v. Allstate Vehicle and Property Insurance Company (Circuit Court of Independence Co., Ark. filed February 2016); Thaxton v. Allstate Indemnity Company (Madison Co., Ill. filed July 2020); Hester v. Allstate Vehicle and Property Insurance Company (St. Clair Co., Ill. filed June 2020). The trial court denied class certification in Brasher, and plaintiff’s motion for reconsideration of this ruling was denied. No classes have been certified in any of the other matters. The Company is defending putative class actions pending in multiple states alleging that the Company underpays total loss vehicle physical damage claims on auto policies. The allegedly systematic underpayments result from one or more of the following theories: (a) the third party valuation tool used by the Company as part of a comprehensive adjustment process is allegedly flawed, biased, or contrary to applicable law; (b) the Company allegedly does not pay sales tax, title fees, registration fees, and/or other specified fees that are allegedly mandatory under policy language or state legal authority; or (c) after paying for the value of the loss vehicle, then the Company allegedly is not entitled to retain the residual salvage value, and the Company allegedly must pay salvage value to the owner (or if the loss vehicle is retained by the owner, then the Company allegedly may not apply any offset for the salvage value). The following cases are currently pending against the Company: Olberg v. Allstate Insurance Company, Allstate Fire and Casualty Insurance Company, and CCC Information Services, Inc. (W.D. Wash., filed April 2018); Bloomgarden v. Allstate Fire and Casualty Insurance Company (S.D. Fla., filed July 2018, dismissed August 2019, refiled on September 2019, remanded to 17th Judicial Circuit, Broward County October 2020); Erby v. Allstate Fire and Casualty Insurance Company (E.D. Pa., filed October 2018); Kronenberg v. Allstate Insurance Company and Allstate Fire and Casualty Insurance Company (E.D. N.Y., filed December 2018); Ryan v. Allstate Fire and Casualty Insurance Company (7th Judicial Circuit, Volusia County, Fla.; filed May 2019, dismissed and refiled October 2019); Durgin v. Allstate Property and Casualty Insurance Company (W.D. LA, filed June 7, 2019); Anderson v. Allstate Insurance Company (20th Judicial Circuit, Collier County, Fla.; filed August 2019); Cody v. Allstate Fire and Casualty Insurance Company and Allstate County Mutual Insurance Company (N.D. Tex., filed August 2019); Williams v. Esurance Property and Casualty Insurance Company (C.D. Cal,; filed September 2020); Cotton v. Allstate Fire and Casualty Insurance Company (Cir. Ct. of Cook County, Chancery Div., Ill.; filed October 2020); Romaniak v. Esurance Property and Casualty Insurance Company (N.D. Ohio, filed December 2020); Gosa v. Esurance Property and Casualty Insurance Company (S.D. Ill., filed December 2020). None of the courts in any of the pending matters has ruled on class certification. Other proceedings The stockholder derivative actions described below are disclosed pursuant to SEC disclosure requirements for these types of matters. The putative class action alleging violations of the federal securities laws is disclosed because it involves similar allegations to those made in the stockholder derivative actions. Biefeldt / IBEW Consolidated Action. Two separately filed stockholder derivative actions have been consolidated into a single proceeding that is pending in the Circuit Court for Cook County, Illinois, Chancery Division. The original complaint in the first-filed of those actions, Biefeldt v. Wilson, et al. , was filed on August 3, 2017, in that court by a plaintiff alleging that she is a stockholder of the Company. On June 29, 2018, the court granted defendants’ motion to dismiss that complaint for failure to make a pre-suit demand on the Allstate Board but granted plaintiff permission to file an amended complaint. The original complaint in IBEW Local No. 98 Pension Fund v. Wilson, et al. , was filed on April 12, 2018, in the same court by another plaintiff alleging to be a stockholder of the Company. After the court issued its dismissal decision in the Biefeldt action, plaintiffs agreed to consolidate the two actions and filed a consolidated amended complaint naming as defendants the Company’s chairman, president and chief executive officer, its former president, and certain present or former members of the board of directors. In that complaint, plaintiffs allege that the directors and officer defendants breached their fiduciary duties to the Company in connection with allegedly material misstatements or omissions concerning the Company’s automobile insurance claim frequency statistics and the reasons for a claim frequency increase for Allstate brand auto i nsurance between October 2014 and August 3, 2015. The factual allegations are substantially similar to those at issue in In re The Allstate Corp. Securities Litigation . Plaintiffs further allege that a senior officer and several outside directors engaged in stock option exercises allegedly while in possession of material nonpublic information. Plaintiffs seek, on behalf of the Company, an unspecified amount of damages and various forms of equitable relief. Defendants moved to dismiss the consolidated complaint on September 24, 2018 for failure to make a demand on the Allstate Board. On May 14, 2019, the court granted defendants’ motion to dismiss the complaint, but allowed plaintiffs leave to file a second consolidated amended complaint which they filed on September 17, 2019. Defendants moved to dismiss the complaint on November 1, 2019 for failure to make a demand on the Allstate Board. The court subsequently requested supplemental briefing on the motion which concluded on February 1, 2021. A ruling is expected at a status conference scheduled for February 24, 2021. In Sundquist v. Wilson, et al ., another plaintiff alleging to be a stockholder of the Company filed a stockholder derivative complaint in the United States District Court for the Northern District of Illinois on May 21, 2018. Plaintiff seeks, on behalf of the Company, an unspecified amount of damages and various forms of equitable relief. The complaint names as defendants the Company’s chairman, president and chief executive officer, its former president, its former vice chairman, and certain present or former members of the board of directors. The complaint alleges breaches of fiduciary duty based on allegations similar to those asserted in In re The Allstate Corp. Securities Litigation as well as state law “misappropriation” claims based on stock option transactions by the Company’s chairman, president and chief executive officer, its former vice chairman, and certain members of the board of dire |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 15 Income Taxes The Company and its domestic subsidiaries file a consolidated federal income tax return. Tax liabilities and benefits realized by the consolidated group are allocated as generated by the respective entities. Deferred income taxes result from temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements that will result in taxable or deductible amounts in future years. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in years in which those temporary differences are expected to be recovered or settled. Deferred tax assets and liabilities are adjusted through income tax expense as changes in tax laws or rates are enacted. Regulatory tax examinations The Internal Revenue Service (“IRS”) has completed its exam of the Company’s 2013 through 2016 federal income tax returns. The 2017 and 2018 audit cycle is expected to begin in the first quarter of 2021. Any adjustments that may result from IRS examinations of the Company’s tax returns are not expected to have a material effect on the consolidated financial statements. Unrecognized tax benefits The Company recognizes tax positions in the consolidated financial statements only when it is more likely than not that the position will be sustained on examination by the relevant taxing authority based on the technical merits of the position. A position that meets this standard is measured at the largest amount of benefit that will more likely than not be realized on settlement. A liability is established for differences between positions taken in a tax return and amounts recognized in the consolidated financial statements. Reconciliation of the change in the amount of unrecognized tax benefits For the years ended December 31, ($ in millions) 2020 2019 2018 Balance – beginning of year $ 70 $ 70 $ 55 Increase for tax positions taken in a prior year — — 3 Increase for tax positions taken in the current year — — 12 Decrease for settlements (58) — — Balance – end of year $ 12 $ 70 $ 70 The Company believes that the unrecognized tax benefits balance will not materially change within the next twelve months. Components of the deferred income tax assets and liabilities As of December 31, ($ in millions) 2020 2019 Deferred tax assets Unearned premium reserves $ 659 $ 642 Pension 161 197 Accrued compensation 139 147 Discount on loss reserves 79 78 Other postretirement benefits 36 49 Net operating loss carryover 23 26 Other assets 68 54 Total deferred tax assets 1,165 1,193 Deferred tax liabilities DAC (858) (847) Unrealized net capital gains (856) (507) Investments (394) (567) Life and annuity reserves (216) (222) Intangible assets (87) (98) Other liabilities (109) (106) Total deferred tax liabilities (2,520) (2,347) Net deferred tax liability $ (1,355) $ (1,154) Although realization is not assured, management believes it is more likely than not that the deferred tax assets will be realized based on the Company’s assessment that the deductions ultimately recognized for tax purposes will be fully utilized. As of December 31, 2020, the Company has U.S. federal and foreign net operating loss carryforwards of $44 million and $68 million, respectively. The provisions of the Tax Cuts and Jobs Act of 2017 eliminated the 20-year carryforward period and made it indefinite for federal net operating losses generated in tax years after December 31, 2017. For such amounts generated prior to 2018, the 20-year carryforward period continues to apply. Components of the net operating loss carryforwards as of December 31, 2020 ($ in millions) 20-Year Carryforward Indefinite Carryforward Period Total US Federal $ 36 $ 8 $ 44 Foreign — 68 68 Total $ 36 $ 76 $ 112 Components of income tax expense For the years ended December 31, ($ in millions) 2020 2019 2018 Current $ 1,499 $ 991 $ 704 Deferred (116) 251 (236) Total income tax expense $ 1,383 $ 1,242 $ 468 The Company paid income taxes of $1.48 billion, $648 million and $731 million in 2020, 2019 and 2018, respectively. The Company had current income tax payable of $84 million and $124 million as of December 31, 2020 and 2019, respectively. Reconciliation of the statutory federal income tax rate to the effective income tax rate For the years ended December 31, ($ in millions) 2020 2019 2018 Income before income taxes $ 6,959 $ 6,089 $ 2,628 Statutory federal income tax rate on income from operations 1,461 21.0 % 1,279 21.0 % 552 21.0 % Tax credits (45) (0.7) (33) (0.5) (34) (1.3) Share-based payments (30) (0.4) (24) (0.4) (16) (0.6) Tax-exempt income (24) (0.3) (27) (0.4) (24) (0.9) State income taxes 35 0.5 41 0.7 27 1.0 Tax Legislation benefit — — — — (29) (1.1) Other (14) (0.2) 6 — (8) (0.3) Effective income tax rate on income from operations $ 1,383 19.9 % $ 1,242 20.4 % $ 468 17.8 % |
Statutory Financial Information
Statutory Financial Information and Dividend Limitations | 12 Months Ended |
Dec. 31, 2020 | |
Statutory Financial Information and Dividend Limitations [Abstract] | |
Statutory Financial Information and Dividend Limitations | Note 16 Statutory Financial Information and Dividend Limitations Allstate’s domestic property and casualty and life insurance subsidiaries prepare their statutory-basis financial statements in conformity with accounting practices prescribed or permitted by the insurance department of the applicable state of domicile. Prescribed statutory accounting practices include a variety of publications of the National Association of Insurance Commissioners (“NAIC”), as well as state laws, regulations and general administrative rules. Permitted statutory accounting practices encompass all accounting practices not so prescribed. All states require domiciled insurance companies to prepare statutory-basis financial statements in conformity with the NAIC Accounting Practices and Procedures Manual, subject to any deviations prescribed or permitted by the applicable insurance commissioner or director. Statutory accounting practices differ from GAAP primarily since they require charging policy acquisition and certain sales inducement costs to expense as incurred, establishing life insurance reserves based on different actuarial assumptions, and valuing certain investments and establishing deferred taxes on a different basis. Statutory net income (loss) and capital and surplus of Allstate’s domestic insurance subsidiaries Net income (loss) Capital and surplus ($ in millions) 2020 2019 2018 2020 2019 Amounts by major business type: Property and casualty insurance $ 6,232 $ 3,989 $ 2,939 $ 17,128 $ 16,192 Life insurance, annuities and voluntary accident and health insurance 14 422 465 4,255 4,208 Amount per statutory accounting practices $ 6,246 $ 4,411 $ 3,404 $ 21,383 $ 20,400 Dividend Limitations There are no regulatory restrictions that limit the payment of dividends by the Corporation, except those generally applicable to corporations incorporated in Delaware. Dividends are payable only out of certain components of shareholders’ equity as permitted by Delaware law. However, the ability of the Corporation to pay dividends is dependent on business conditions, income, cash requirements of the Company, receipt of dividends from AIC and other relevant factors. The payment of shareholder dividends by AIC without the prior approval of the Illinois Department of Insurance (“IL DOI”) is limited to formula amounts based on net income and capital and surplus, determined in conformity with statutory accounting practices, as well as the timing and amount of dividends paid in the preceding twelve months. AIC paid dividends of $4.44 billion in 2020. The maximum amount of dividends AIC will be able to pay without prior IL DOI approval at a given point in time during 2021 is $5.95 billion, less dividends paid during the preceding twelve months measured at that point in time. The payment of a dividend in excess of this amount requires 30 days advance written notice to the IL DOI. The dividend is deemed approved, unless the IL DOI disapproves it within the 30-day notice period. Additionally, any dividend must be paid out of unassigned surplus excluding unrealized appreciation from investments, which for AIC totaled $13.52 billion as of December 31, 2020, and cannot result in capital and surplus being less than the minimum amount required by law. Under state insurance laws, insurance companies are required to maintain paid up capital of not less than the minimum capital requirement applicable to the types of insurance they are authorized to write. Insurance companies are also subject to risk-based capital (“RBC”) requirements adopted by state insurance regulators. A company’s “authorized control level RBC” is calculated using various factors applied to certain financial balances and activity. Companies that do not maintain adjusted statutory capital and surplus at a level in excess of the company action level RBC, which is two times authorized control level RBC, are required to take specified actions. Company action level RBC is significantly in excess of the minimum capital requirements. Total adjusted statutory capital and surplus and authorized control level RBC of AIC were $20.54 billion and $2.92 billion, respectively, as of December 31, 2020. Most of the Corporation’s insurance subsidiaries are subsidiaries of or reinsure all of their business to AIC, including ALIC. AIC’s subsidiaries are included as a component of AIC’s total statutory capital and surplus. The amount of restricted net assets, as represented by the Corporation’s investment in its insurance subsidiaries, was $31.03 billion as of December 31, 2020. Intercompany transactions Notification and approval of intercompany lending activities is also required by the IL DOI for transactions that exceed a level that is based on a formula using statutory admitted assets and statutory surplus. |
Benefit Plans
Benefit Plans | 12 Months Ended |
Dec. 31, 2020 | |
Retirement Benefits [Abstract] | |
Benefit Plans | Note 17 Benefit Plans Pension and other postretirement plans Defined benefit pension plans cover most full-time employees, certain part-time employees and employee-agents. Benefits under the pension plans are based upon the employee’s length of service, eligible annual compensation and, prior to January 1, 2014, either a cash balance or final average pay formula. A cash balance formula applies to all eligible employees hired after August 1, 2002. Eligible employees hired before August 1, 2002 chose between the cash balance formula and the final average pay formula. In July 2013, the Company amended its primary plans effective January 1, 2014 to introduce a new cash balance formula to replace the previous formulas (including the final average pay formula and the previous cash balance formula) under which eligible employees accrue benefits. The Company merged two of its qualified pension plans effective March 31, 2019. The Company also provides a medical coverage subsidy for eligible employees hired before January 1, 2003, including their eligible dependents, when they retire and certain life insurance benefits for eligible retirees (“postretirement benefits”). In September 2020, the Company announced it will eliminate the medical coverage subsidy effective January 1, 2021 for employees who are not eligible to retire as of December 31, 2020. Qualified employees may become eligible for a medical subsidy if they retire in accordance with the terms of the applicable plans and are continuously insured under the Company’s group plans or other approved plans in accordance with the plan’s participation requirements. The Company shares the cost of retiree medical benefits with non Medicare-eligible retirees based on years of service, with the Company’s share being subject to a 5% limit on future annual medical cost inflation after retirement. For Medicare-eligible retirees, the Company provides a fixed Company contribution based on years of service and other factors, which is not subject to adjustments for inflation. In July 2013, the Company amended the plan to eliminate the life insurance benefits effective January 1, 2014 for current eligible employees and effective January 1, 2016 for eligible retirees who retired after 1989. Subject to a court order, the Company paid life insurance premiums for certain retiree plaintiffs until their lawsuit seeking to keep their life insurance benefits intact was resolved. In September 2020, the court entered summary judgment in favor of the Company and dismissed the action, releasing the Company from the order requiring the continued payment of premiums for certain retirees. The judgment in favor of the Company is currently on appeal. The Company has reserved the right to modify or terminate its benefit plans at any time and for any reason. Obligations and funded status The Company calculates benefit obligations based upon generally accepted actuarial methodologies using the projected benefit obligation (“PBO”) for pension plans and the accumulated postretirement benefit obligation (“APBO”) for other postretirement plans. Pension costs and other postretirement obligations are determined using a December 31 measurement date. The benefit obligations represent the actuarial present value of all benefits attributed to employee service rendered as of the measurement date. The PBO is measured using the pension benefit formulas and assumptions. A plan’s funded status is calculated as the difference between the benefit obligation and the fair value of plan assets. The Company’s funding policy for the pension plans is to make contributions at a level in accordance with regulations under the Internal Revenue Code (“IRC”) and generally accepted actuarial principles. The Company’s other postretirement benefit plans are not funded. Change in projected benefit obligation, plan assets and funded status As of December 31, Pension benefits Postretirement benefits ($ in millions) 2020 2019 2020 2019 Change in projected benefit obligation Benefit obligation, beginning of year $ 7,139 $ 6,224 $ 397 $ 375 Service cost 104 117 4 8 Interest cost 210 240 11 14 Participant contributions — — 14 15 Actuarial losses (gains) 813 927 22 19 Benefits paid (522) (356) (37) (39) Plan amendments — — (102) — Translation adjustment and other (1) (13) (1) 5 Curtailment losses (gains) 20 — 10 — Benefit obligation, end of year $ 7,763 $ 7,139 $ 318 $ 397 Change in plan assets Fair value of plan assets, beginning of year $ 6,192 $ 5,299 Actual return on plan assets 1,300 1,235 Employer contribution 18 27 Benefits paid (522) (356) Translation adjustment and other (1) (13) Fair value of plan assets, end of year $ 6,987 $ 6,192 Funded status (1) $ (776) $ (947) $ (318) $ (397) Amounts recognized in AOCI Unamortized pension and other postretirement prior service credit $ (78) $ (142) $ (89) $ (13) (1) The funded status is recorded within other liabilities and accrued expenses on the Consolidated Statements of Financial Position. Changes in items not yet recognized as a component of net cost for pension and other postretirement plans ($ in millions) Pension benefits Postretirement benefits Items not yet recognized as a component of net cost – December 31, 2019 $ (142) $ (13) Prior service credit arising during the period — (102) Prior service credit recognized during the period due to curtailment 10 18 Prior service credit amortized to net cost 54 10 Translation adjustment and other — (2) Items not yet recognized as a component of net cost – December 31, 2020 $ (78) $ (89) The prior service credit is recognized as a component of net cost for pension and other postretirement plans amortized over the average remaining service period of active employees expected to receive benefits. The prior service credit that will be amortized to net cost for pension and postretirement plans in 2021 is estimated to be $50 million and $25 million, respectively. The accumulated benefit obligation (“ABO”) for all defined benefit pension plans was $7.55 billion and $7.02 billion as of December 31, 2020 and 2019, respectively. The ABO is the actuarial present value of all benefits attributed by the pension benefit formula to employee service rendered at the measurement date. However, it differs from the PBO due to the exclusion of an assumption as to future compensation levels. The PBO, ABO and fair value of plan assets for the Company’s pension plans with an ABO in excess of plan assets were $7.33 billion, $7.13 billion and $6.56 billion, respectively, as of December 31, 2020 and $6.73 billion, $6.62 billion and $5.79 billion, respectively, as of December 31, 2019. Included in the accrued benefit cost of the pension benefits are certain unfunded non-qualified plans with accrued benefit costs of $139 million and $137 million for 2020 and 2019, respectively. Components of net cost (benefit) for pension and other postretirement plans For the years ended December 31, Pension benefits Postretirement benefits Total Pension and Postretirement Benefits ($ in millions) 2020 2019 2018 2020 2019 2018 2020 2019 2018 Service cost $ 104 $ 117 $ 110 $ 4 $ 8 $ 7 $ 108 $ 125 $ 117 Interest cost 210 240 255 11 14 15 221 254 270 Expected return on plan assets (414) (403) (427) — — — (414) (403) (427) Amortization of prior service credit (54) (56) (56) (10) (3) (21) (64) (59) (77) Curtailment losses (gains) 10 — — (8) — — 2 — — Costs and expenses (144) (102) (118) (3) 19 1 (147) (83) (117) Remeasurement of projected benefit obligation 813 927 (255) 22 19 (4) 835 946 (259) Remeasurement of plan assets (886) (832) 727 — — — (886) (832) 727 Remeasurement (gains) losses (73) 95 472 22 19 (4) (51) 114 468 Total net (benefit) cost $ (217) $ (7) $ 354 $ 19 $ 38 $ (3) $ (198) $ 31 $ 351 The service cost component is the actuarial present value of the benefits attributed by the plans’ benefit formula to services rendered by the employees during the period. Interest cost is the increase in the PBO in the period due to the passage of time at the discount rate. Interest cost fluctuates as the discount rate changes and is also impacted by the related change in the size of the PBO. The expected return on plan assets is determined as the product of the expected long-term rate of return on plan assets and the fair value of plan assets. Pension and other postretirement service cost, interest cost, expected return on plan assets, amortization of prior service credit and curtailment gains and losses are reported in property and casualty insurance claims and claims expense, operating costs and expenses, net investment income and (if applicable) restructuring and related charges on the Consolidated Statements of Operations. Remeasurement gains and losses relate to changes in discount rates, the differences between actual return on plan assets and the expected long-term rate of return on plan assets, and differences between actual plan experience and actuarial assumptions. Weighted average assumptions used to determine net pension cost and net postretirement benefit cost For the years ended December 31, Pension benefits Postretirement benefits 2020 2019 2018 2020 2019 2018 Discount rate 3.00 % 3.70 % 4.06 % 2.99 % 3.61 % 3.95 % Expected long-term rate of return on plan assets 7.08 7.34 7.33 n/a n/a n/a Weighted average assumptions used to determine benefit obligations For the years ended December 31, Pension benefits Postretirement benefits 2020 2019 2020 2019 Discount rate 2.51 % 3.31 % 2.39 % 3.27 % The weighted average health care cost trend rate used in measuring the accumulated postretirement benefit cost is 6.8% for 2021, gradually declining to 4.5% in 2035 and remaining at that level thereafter. Pension plan assets In general, the Company’s pension plan assets are managed in accordance with investment policies approved by pension investment committees. The purpose of the policies is to ensure the plans’ long-term ability to meet benefit obligations by prudently investing plan assets and Company contributions, while taking into consideration regulatory and legal requirements and current market conditions. The investment policies are reviewed periodically and specify target plan asset allocation by asset category. In addition, the policies specify various asset allocation and other risk limits. The target asset allocation takes the plans’ funding status into consideration, among other factors, including anticipated demographic changes or liquidity requirements that may affect the funding status such as the potential impact of lump sum settlements as well as existing or expected market conditions. In general, the allocation has a lower overall investment risk when a plan is in a stronger funded status position since there is less economic incentive to take risk to increase the expected returns on the plan assets. The pension plans’ asset exposure within each asset category is tracked against widely accepted established benchmarks for each asset class with limits on variation from the benchmark established in the investment policy. Pension plan assets are regularly monitored for compliance with these limits and other risk limits specified in the investment policies. Weighted average target asset allocation and actual percentage of plan assets by asset category As of December 31, 2020 Target asset allocation (1) Actual percentage of plan assets Pension plan’s asset category 2020 2020 2019 Equity securities (2) 43 - 62% 50 % 50 % Fixed income securities 33 - 45 38 38 Limited partnership interests — - 15 10 10 Short-term investments and other — 2 2 Total without securities lending (3) 100 % 100 % (1) The target asset allocation considers risk-based exposure while the actual percentage of plan assets utilizes a financial reporting view excluding exposure provided through derivatives. (2) The actual percentage of plan assets for equity securities includes zero and 1% of private equity investments in 2020 and 2019, respectively, that are subject to the limited partnership interests target allocation and 1% and zero of fixed income mutual funds in 2020 and 2019, respectively, that are subject to the fixed income securities target allocation. (3) Securities lending collateral reinvestment of $101 million and $258 million is excluded from the table above in 2020 and 2019, respectively. The target asset allocation for an asset category may be achieved either through direct investment holdings, through replication using derivative instruments (e.g., futures or swaps) or net of hedges using derivative instruments to reduce exposure to an asset category. The net notional amount of derivatives used for replication and non-hedging strategies is limited to 115% of total plan assets. Market performance of the different asset categories may, from time to time, cause deviation from the target asset allocation. The asset allocation mix is reviewed on a periodic basis and rebalanced to bring the allocation within the target ranges. Outside the target asset allocation, the pension plans participate in a securities lending program to enhance returns. As of December 31, 2020, fixed income and equity securities are lent out and cash collateral is invested in short-term investments. Fair values of pension plan assets as of December 31, 2020 ($ in millions) Quoted prices in active markets for identical assets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Balance as of December 31, 2020 Equity securities $ 227 $ 42 $ — $ 269 Fixed income securities: U.S. government and agencies 32 865 — 897 Corporate — 1,709 2 1,711 Short-term investments 210 35 — 245 Free-standing derivatives: Assets — 21 — 21 Liabilities (2) (21) — (23) Other assets 2 — — 2 Total plan assets at fair value $ 469 $ 2,651 $ 2 3,122 % of total plan assets at fair value 15.0 % 84.9 % 0.1 % 100.0 % Investments measured using the net asset value practical expedient 3,908 Securities lending obligation (1) (101) Derivatives counterparty and cash collateral netting (19) Other net plan assets (2) 77 Total reported plan assets $ 6,987 (1) The securities lending obligation represents the plan’s obligation to return securities lending collateral received under a securities lending program. The terms of the program allow both the plan and the counterparty the right and ability to redeem/return the securities loaned on short notice. Due to its relatively short-term nature, the outstanding balance of the obligation approximates fair value. (2) Other net plan assets represent cash and cash equivalents, interest and dividends receivable and net receivables related to settlements of investment transactions, such as purchases and sales. Fair values of pension plan assets as of December 31, 2019 ($ in millions) Quoted prices in active markets for identical assets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Balance as of December 31, 2019 Equity securities $ 216 $ 45 $ — $ 261 Fixed income securities: U.S. government and agencies 237 1,096 — 1,333 Corporate — 1,060 — 1,060 Short-term investments 128 252 — 380 Free-standing derivatives: Assets — 5 — 5 Liabilities (2) (17) — (19) Total plan assets at fair value $ 579 $ 2,441 $ — 3,020 % of total plan assets at fair value 19.2 % 80.8 % — % 100.0 % Investments measured using the net asset value practical expedient 3,418 Securities lending obligation (272) Derivatives counterparty and cash collateral netting 9 Other net plan assets 17 Total reported plan assets $ 6,192 The fair values of pension plan assets are estimated using the same methodologies and inputs as those used to determine the fair values for the respective asset category of the Company. These methodologies and inputs are disclosed in Note 6. Rollforward of Level 3 plan assets during December 31, 2020 Actual return on plan assets: ($ in millions) Balance as of December 31, 2019 Relating to assets sold during the period Relating to assets still held at the reporting date Purchases, sales and settlements, net Net transfers in (out) of Level 3 Balance as of December 31, 2020 Fixed income securities: Corporate $ — $ — $ — $ 2 $ — $ 2 Total Level 3 plan assets $ — $ — $ — $ 2 $ — $ 2 Rollforward of Level 3 plan assets during December 31, 2019 Actual return on plan assets: ($ in millions) Balance as of December 31, 2018 Relating to assets sold during the period Relating to assets still held at the reporting date Purchases, sales and settlements, net Net transfers in (out) of Level 3 Balance as of December 31, 2019 Fixed income securities: Corporate $ 5 $ — $ — $ (5) $ — $ — Total Level 3 plan assets $ 5 $ — $ — $ (5) $ — $ — Rollforward of Level 3 plan assets during December 31, 2018 Actual return on plan assets: ($ in millions) Balance as of December 31, 2017 Relating to assets sold during the period Relating to assets still held at the reporting date Purchases, sales and settlements, net Net transfers in (out) of Level 3 Balance as of December 31, 2018 Equity securities $ 29 $ — $ 3 $ — $ (32) $ — Fixed income securities: Corporate 10 — — (5) — 5 Total Level 3 plan assets $ 39 $ — $ 3 $ (5) $ (32) $ 5 The expected long-term rate of return on plan assets reflects the average rate of earnings expected on plan assets. The Company’s assumption for the expected long-term rate of return on plan assets is evaluated annually giving consideration to appropriate data including, but not limited to, the plan asset allocation, forward-looking expected returns for the period over which benefits will be paid, historical returns on plan assets and other relevant market data. Given the long-term forward-looking nature of this assumption, the actual returns in any one year do not immediately result in a change to the expected long-term rate of return on plan assets. In consideration of the targeted plan asset allocation, the Company evaluated expected returns using sources including historical average asset class returns from independent nationally recognized providers of this type of data blended together using the asset allocation policy weights for the Company’s pension plans; asset class return forecasts developed by employees with relevant expertise in such forecasts and who are independent from those charged with managing the pension plan assets; and expected portfolio returns from a proprietary simulation methodology of a widely recognized external investment consulting firm that performs asset allocation and actuarial services for corporate pension plan sponsors. The above sources support the Company’s weighted average long-term rate of return on plan assets assumption of 7.08% used for 2020 and an estimate of 7.06% that will be used for 2021. As of the 2020 measurement date, the arithmetic average of the annual actual return on plan assets for the most recent 10 and 5 years was 11.1% and 14.4%, respectively. Cash flows There was no required cash contribution necessary to satisfy the minimum funding requirement under the IRC for the tax qualified pension plan for the year ended December 31, 2020. The Company currently plans to contribute $24 million to its unfunded non-qualified plans and zero and $4 million to its primary and other qualified funded pension plans, respectively, in 2021. The Company contributed $23 million and $24 million to the postretirement benefit plans in 2020 and 2019, respectively. Contributions by participants were $14 million and $15 million in 2020 and 2019, respectively. Estimated future benefit payments expected to be paid in the next 10 years As of December 31, 2020 ($ in millions) Pension benefits Postretirement benefits 2021 $ 710 $ 25 2022 741 27 2023 733 27 2024 726 27 2025 694 26 2026-2030 2,320 98 Total benefit payments $ 5,924 $ 230 Allstate 401(k) Savings Plan Employees of the Company, with the exception of those employed by the Company’s international, SquareTrade and InfoArmor subsidiaries, are eligible to become members of the Allstate 401(k) Savings Plan (“Allstate Plan”). The Company’s contributions are based on the Company’s matching obligation. The Company is responsible for funding its contribution to the Allstate Plan. The Company’s contribution to the Allstate Plan was $103 million, $93 million and $89 million in 2020, 2019 and 2018, respectively. In 2019 and 2018, these amounts were reduced by $41 million and $2 million of ESOP benefit, respectively. |
Equity Incentive Plans
Equity Incentive Plans | 12 Months Ended |
Dec. 31, 2020 | |
Equity Incentive Plans [Abstract] | |
Equity Incentive Plans | Note 18 Equity Incentive Plans The Company currently has equity incentive plans under which it grants nonqualified stock options, restricted stock units and performance stock awards to certain employees and directors of the Company. Equity awards ($ in millions) 2020 2019 2018 Compensation expense $ 124 $ 105 $ 125 Income tax benefits 18 17 22 Cash received from exercise of options 111 154 92 Tax benefit realized on options exercised and release of stock restrictions 53 43 28 The Company records compensation expense related to awards under these plans over the shorter of the period in which the requisite service is rendered or retirement eligibility is attained. Compensation expense for performance stock awards with no market condition is based on the probable number of awards expected to vest using the performance level most likely to be achieved at the end of the performance period. Compensation expense for performance stock awards with a market condition is based on the number of awards expected to vest as estimated at the grant date and does not change if the market condition is not met. Nonvested awards as of December 31, 2020 ($ in millions) Unrecognized compensation Weighted average vesting period Nonqualified stock options $ 21 1.49 years Restricted stock units 33 1.85 years Performance stock awards 28 1.44 years Total $ 82 Options are granted to employees with exercise prices equal to the closing share price of the Company’s common stock on the applicable grant date. Options granted to employees on or after February 18, 2014 vest ratably over a three-year period. Options granted prior to February 18, 2014 vest 50% on the second anniversary of the grant date and 25% on each of the third and fourth anniversaries of the grant date. Vesting is subject to continued service, except for employees who are retirement eligible and in certain other limited circumstances. Options may be exercised once vested and will expire no later than ten years after the date of grant. Restricted stock units for directors vest immediately and convert into shares of stock on the earlier of the day of the third anniversary of the grant date or the date the director’s service terminates, unless a deferred period of restriction is elected. Restricted stock units granted to directors prior to June 1, 2016 convert upon leaving the board. Restricted stock units granted to employees prior to February 19, 2020 vest on the day prior to the third anniversary of the grant date. Restricted stock units granted to employees on or after February 19, 2020 vest ratably over a three-year period. Restricted stock units granted to employees subsequently convert into shares of stock on the day of the respective anniversary of the grant date. Vesting is subject to continued service, except for employees who are retirement eligible and in certain other limited circumstances. Performance stock awards vest into shares of stock based on achieving established company-specific performance goals. Performance stock awards granted prior to February 19, 2020 vest into shares of stock on the day prior to the third anniversary of the grant date. Performance stock awards granted on or after February 19, 2020 vest into shares of stock on the third anniversary of the grant date. The numbers of shares earned upon vesting of the performance stock awards is based on the attainment of performance goals for each of the performance periods, subject to continued service, except for employees who are retirement eligible and in certain other limited circumstances. Since 2001, a total of 110.8 million shares of common stock were authorized to be used for awards under the plans, subject to adjustment in accordance with the plans’ terms. As of December 31, 2020, 20.9 million shares were reserved and remained available for future issuance under these plans. The Company uses its treasury shares for these issuances. The fair value of each option grant is estimated on the date of grant using a binomial lattice model. The Company uses historical data to estimate option exercise and employee termination within the valuation model. In addition, separate groups of employees that have similar historical exercise behavior are considered separately for valuation purposes. The expected term of options granted is derived from the output of the binomial lattice model and represents the period of time that options granted are expected to be outstanding. The expected volatility of the price of the underlying shares is implied based on traded options and historical volatility of the Company’s common stock. The expected dividends were based on the current dividend yield of the Company’s stock as of the date of the grant. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. Option grant assumptions 2020 2019 2018 Weighted average expected term 6.1 years 5.8 years 5.7 years Expected volatility 16.3% - 37.1% 15.6% - 28.9% 15.6% - 30.7% Weighted average volatility 17.6 % 18.4 % 19.8 % Expected dividends 1.6% - 2.4% 1.9% - 2.2% 1.5% - 2.2% Weighted average expected dividends 1.8 % 2.2 % 2.0 % Risk-free rate 0.1% - 1.8% 1.3% - 2.7% 1.3% - 3.2% Summary of option activity For the year ended December 31, 2020 Number (in 000s) Weighted average exercise price Aggregate intrinsic value (in 000s) Weighted average remaining contractual term (years) Outstanding as of January 1, 2020 11,671 $ 73.40 Granted 1,555 123.43 Exercised (2,201) 53.75 Forfeited (394) 104.18 Expired (14) 81.21 Outstanding as of December 31, 2020 10,617 83.65 $ 298,537 6.1 Outstanding, net of expected forfeitures 10,543 83.46 297,990 6.1 Outstanding, exercisable (“vested”) 6,907 72.51 258,510 5.0 The weighted average grant date fair value of options granted was $18.17, $14.96 and $17.03 during 2020, 2019 and 2018, respectively. The intrinsic value, which is the difference between the fair value and the exercise price, of options exercised was $119 million, $114 million and $72 million during 2020, 2019 and 2018, respectively. Changes in restricted stock units For the year ended December 31, 2020 Number (in 000s) Weighted average grant date fair value Nonvested as of January 1, 2020 877 $ 83.87 Granted 407 118.61 Vested (278) 80.10 Forfeited (58) 105.03 Nonvested as of December 31, 2020 948 98.61 The fair value of restricted stock units is based on the market value of the Company’s stock as of the date of the grant. The market value in part reflects the payment of future dividends expected. The weighted average grant date fair value of restricted stock units granted was $118.61, $92.97 and $93.16 during 2020, 2019 and 2018, respectively. The total fair value of restricted stock units vested was $32 million, $29 million and $47 million during 2020, 2019 and 2018, respectively. Changes in performance stock awards For the year ended December 31, 2020 Number (in 000s) Weighted average grant date fair value Nonvested as of January 1, 2020 1,181 $ 87.78 Granted 282 123.48 Adjustment for performance achievement 408 78.49 Vested (816) 78.49 Forfeited (104) 101.10 Nonvested as of December 31, 2020 951 100.89 The change in performance stock awards comprises those initially granted in 2020 and the adjustment to previously granted performance stock awards for performance achievement. The fair value of performance stock awards that do not include a market condition is based on the market value of the Company’s stock as of the date of the grant. Starting with the February 2020 award, the fair value of performance stock awards includes a component with market-based condition measured on the grant date using a Monte Carlo simulation model. Market-based condition measures the Company’s total shareholder return (“TSR”) relative to the TSR of peer companies, expressed in terms of the Company’s TSR percentile rank among the peer companies, over a three-calendar-year performance period. The Monte Carlo simulation model uses a risk-neutral framework to model future stock price movements based upon the risk-free rate of return at the time of grant, volatilities of the Company and the peer companies, and expected term assumed to be equal to the remaining measurement period. The market value in part reflects the payment of future dividends expected. For the year ended December 31, 2020, the 2020 performance stock awards with market-based condition assumes a risk-free rate of 1.4%, volatility of 16.9%, average peer volatility of 35.1% and an expected term of 2.9 years. The weighted average grant date fair value of performance stock awards granted was $123.48, $92.49 and $92.88 during 2020, 2019 and 2018, respectively. The total fair value of performance stock awards vested was $101 million, $65 million and $15 million during 2020, 2019 and 2018, respectively. The Company recognizes all tax effects related to share-based payments at settlement or expiration through the income statement. |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 12 Months Ended |
Dec. 31, 2020 | |
Supplemental Cash Flow Information [Abstract] | |
Supplemental Cash Flow Information | Note 19 Supplemental Cash Flow Information Non-cash investing activities include $61 million, $198 million and $94 million related to mergers and exchanges completed with equity securities, fixed income securities and limited partnerships, and modifications of certain mortgage loans and other investments in 2020, 2019 and 2018, respectively. Non-cash financing activities include $56 million, $50 million and $32 million related to the issuance of Allstate common shares for vested equity awards in 2020, 2019 and 2018, respectively. Cash flows used in operating activities in the Consolidated Statements of Cash Flows include cash paid for operating leases related to amounts included in the measurement of lease liabilities of $156 million and $155 million for the twelve months ended December 31, 2020 and 2019, respectively. Non-cash operating activities include $51 million and $604 million related to ROU assets obtained in exchange for lease obligations for the twelve months ended December 31, 2020 and 2019, respectively. Non-cash operating activities related to ROU assets obtained in exchange for lease obligations for twelve months ended December 31, 2019 include the impact of $488 million related to the adoption of the accounting for leases standard. Liabilities for collateral received in conjunction with the Company’s securities lending program and OTC and cleared derivatives are reported in other liabilities and accrued expenses or other investments. The accompanying cash flows are included in cash flows from operating activities in the Consolidated Statements of Cash Flows along with the activities resulting from management of the proceeds as follows: For the years ended December 31, ($ in millions) 2020 2019 2018 Net change in proceeds managed Net change in fixed income securities $ — $ 80 $ 234 Net change in short-term investments 592 (451) (568) Operating cash flow provided (used) 592 (371) (334) Net change in cash (12) — — Net change in proceeds managed $ 580 $ (371) $ (334) Net change in liabilities Liabilities for collateral, beginning of year $ (1,829) $ (1,458) $ (1,124) Liabilities for collateral, end of year (1,249) (1,829) (1,458) Operating cash flow (used) provided $ (580) $ 371 $ 334 |
Other Comprehensive Income
Other Comprehensive Income | 12 Months Ended |
Dec. 31, 2020 | |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | |
Other Comprehensive Income | Note 20 Other Comprehensive Income Components of other comprehensive income (loss) on a pre-tax and after-tax basis For the years ended December 31, 2020 2019 2018 ($ in millions) Pre-tax Tax After-tax Pre-tax Tax After-tax Pre-tax Tax After-tax Unrealized net holding gains and losses arising during the period, net of related offsets $ 2,512 $ (532) $ 1,980 $ 2,807 $ (592) $ 2,215 $ (1,142) $ 241 $ (901) Less: reclassification adjustment of realized capital gains and losses 870 (183) 687 413 (87) 326 (186) 39 (147) Unrealized net capital gains and losses 1,642 (349) 1,293 2,394 (505) 1,889 (956) 202 (754) Unrealized foreign currency translation adjustments 66 (14) 52 (13) 3 (10) (61) 13 (48) Unamortized pension and other postretirement prior service credit (1) 12 (3) 9 (59) 12 (47) (77) 18 (59) Other comprehensive income (loss) $ 1,720 $ (366) $ 1,354 $ 2,322 $ (490) $ 1,832 $ (1,094) $ 233 $ (861) (1) Represents prior service credits reclassified out of other comprehensive income and amortized into operating costs and expenses. |
Quarterly Results (unaudited)
Quarterly Results (unaudited) | 12 Months Ended |
Dec. 31, 2020 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Results (unaudited) | Note 21 Quarterly Results (unaudited) First Quarter Second Quarter Third Quarter Fourth Quarter ($ in millions, except per share data) 2020 2019 2020 2019 2020 2019 2020 2019 Revenues $ 10,076 $ 10,990 $ 11,197 $ 11,144 $ 11,500 $ 11,069 $ 12,018 $ 11,472 Net income (loss) applicable to common shareholders 513 1,261 1,224 821 1,126 889 2,598 1,707 Earnings per common share - Basic 1.62 3.79 3.90 2.47 3.62 2.71 8.54 5.32 Earnings per common share - Diluted 1.59 3.74 3.86 2.44 3.58 2.67 8.45 5.23 |
Schedule I_- Summary of Investm
Schedule I - Summary of Investments Other than Investments in Related Parties | 12 Months Ended |
Dec. 31, 2020 | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Abstract] | |
Schedule I — Summary of Investments Other than Investments in Related Parties | Schedule I — Summary of Investments Other than Investments in Related Parties As of December 31, 2020 ($ in millions) Cost/amortized cost, net Fair value (if applicable) Amount shown in the Balance Sheet Type of investment Fixed maturities: Bonds: United States government, government agencies and authorities $ 3,129 $ 3,222 $ 3,222 States, municipalities and political subdivisions 8,752 9,587 9,587 Foreign governments 1,013 1,055 1,055 Public utilities 5,948 6,564 6,564 All other corporate bonds 41,278 44,578 44,578 Asset-backed securities 1,260 1,270 1,270 Mortgage-backed securities 71 78 78 Total fixed maturities 61,451 66,354 66,354 Equity securities: Common stocks: Public utilities 34 46 46 Banks, trusts and insurance companies 174 255 255 Industrial, miscellaneous and all other 3,393 4,087 4,087 Nonredeemable preferred stocks 252 322 322 Total equity securities 3,853 4,710 4,710 Mortgage loans on real estate 4,075 4,348 4,075 Real estate (none acquired in satisfaction of debt) 974 974 Policy loans 754 754 Derivative instruments 204 204 204 Limited partnership interests 7,609 7,609 Other long-term investments 1,757 1,757 Short-term investments 7,800 7,800 7,800 Total investments $ 88,477 $ 94,237 |
Schedule II_- Condensed Financi
Schedule II - Condensed Financial Information of Registrant | 12 Months Ended |
Dec. 31, 2020 | |
Condensed Financial Information Disclosure [Abstract] | |
Schedule II — Condensed Financial Information of Registrant | Schedule II — Condensed Financial Information of Registrant Statement of Operations Year Ended December 31, ($ in millions) 2020 2019 2018 Revenues Investment income, less investment expense $ 12 $ 35 $ 25 Realized capital gains (losses) 33 9 (10) Other income — 41 3 Total revenues 45 85 18 Expenses Interest expense 328 355 337 Pension and other postretirement remeasurement (gains) losses (73) 103 454 Pension and other postretirement benefit (168) (122) (116) Other operating expenses 73 49 50 Total expenses 160 385 725 Loss from operations before income tax benefit and equity in net income of subsidiaries (115) (300) (707) Income tax benefit (26) (75) (136) Loss before equity in net income of subsidiaries (89) (225) (571) Equity in net income of subsidiaries 5,665 5,072 2,731 Net income 5,576 4,847 2,160 Preferred stock dividends 115 169 148 Net income applicable to common shareholders 5,461 4,678 2,012 Other comprehensive income (loss), after-tax Changes in: Unrealized net capital gains and losses 1,293 1,889 (754) Unrealized foreign currency translation adjustments 52 (10) (48) Unamortized pension and other postretirement prior service credit 9 (47) (59) Other comprehensive income (loss), after-tax 1,354 1,832 (861) Comprehensive income $ 6,930 $ 6,679 $ 1,299 See accompanying notes to condensed financial information and notes to consolidated financial statements. The Allstate Corporation and Subsidiaries Schedule II (Continued) — Condensed Financial Information of Registrant Statement of Financial Position December 31, ($ in millions, except par value data) 2020 2019 Assets Investments in subsidiaries $ 35,603 $ 33,428 Fixed income securities, at fair value (amortized cost, net zero and $458) — 466 Short-term investments, at fair value (amortized cost, net $4,479 and $702) 4,479 702 Cash — 2 Receivable from subsidiaries 524 448 Deferred income taxes 187 230 Other assets 87 86 Total assets $ 40,880 $ 35,362 Liabilities Long-term debt $ 7,825 $ 6,631 Pension and other postretirement benefit obligations 874 1,081 Deferred compensation 351 327 Payable to subsidiaries — 14 Notes due to subsidiaries 1,250 1,000 Dividends payable to shareholders 201 199 Other liabilities 162 112 Total liabilities 10,663 9,364 Shareholders’ equity Preferred stock and additional capital paid-in, $1 par value, 25 million shares authorized, 81.0 thousand and 92.5 thousand shares issued and outstanding, $2,025 and $2,313 aggregate liquidation preference 1,970 2,248 Common stock, $.01 par value, 2.0 billion shares authorized and 900 million issued, 304 million and 319 million shares outstanding 9 9 Additional capital paid-in 3,498 3,463 Retained income 52,767 48,074 Treasury stock, at cost (596 million and 581 million shares) (31,331) (29,746) Accumulated other comprehensive income: Unrealized net capital gains and losses 3,180 1,887 Unrealized foreign currency translation adjustments (7) (59) Unamortized pension and other postretirement prior service credit 131 122 Total accumulated other comprehensive income 3,304 1,950 Total shareholders’ equity 30,217 25,998 Total liabilities and shareholders’ equity $ 40,880 $ 35,362 See accompanying notes to condensed financial information and notes to consolidated financial statements. The Allstate Corporation and Subsidiaries Schedule II (Continued) — Condensed Financial Information of Registrant Statement of Cash Flows Years Ended December 31, ($ in millions) 2020 2019 2018 Cash flows from operating activities Net income $ 5,576 $ 4,847 $ 2,160 Adjustments to reconcile net income to net cash provided by operating activities: Equity in net income of subsidiaries (5,665) (5,072) (2,731) Dividends received from subsidiaries 4,157 2,434 2,059 Realized capital (gains) losses (33) (9) 10 Pension and other postretirement remeasurement (gains) losses (73) 103 454 Changes in: Pension and other postretirement benefits (168) (122) (116) Income taxes 54 13 (28) Operating assets and liabilities 110 111 160 Net cash provided by operating activities 3,958 2,305 1,968 Cash flows from investing activities Proceeds from sales of investments 1,251 1,094 1,370 Proceeds from sales of investments to subsidiaries — — 390 Investment purchases (402) (892) (1,037) Investment collections 16 65 108 Capital contribution or return of capital from subsidiaries 251 43 (975) Change in short-term investments, net (3,777) (417) (115) Net cash used in investing activities (2,661) (107) (259) Cash flows from financing activities Proceeds from borrowings from subsidiaries 1,250 1,000 1,250 Repayment of notes due to subsidiaries (1,000) (1,250) (250) Proceeds from issuance of long-term debt 1,189 491 498 Redemption of preferred stock (288) (1,132) (385) Redemption and repayment of long-term debt — (317) (400) Proceeds from issuance of preferred stock — 1,414 557 Dividends paid on common stock (668) (653) (614) Dividends paid on preferred stock (108) (134) (134) Treasury stock purchases (1,737) (1,735) (2,303) Shares reissued under equity incentive plans, net 63 120 73 Other — — (1) Net cash used in financing activities (1,299) (2,196) (1,709) Net (decrease) increase in cash (2) 2 — Cash at beginning of year 2 — — Cash at end of year $ — $ 2 $ — See accompanying notes to condensed financial information and notes to consolidated financial statements. The Allstate Corporation and Subsidiaries Schedule II (Continued) — Condensed Financial Information of Registrant Notes to Condensed Financial Information 1. General Pursuant to rules and regulations of the SEC, the unconsolidated condensed financial statements of the Parent Company do not reflect all of the information and notes normally included with financial statements prepared in accordance with GAAP. Therefore, these condensed financial statements of the Registrant should be read in conjunction with the consolidated financial statements and notes thereto included in Item 8. The long-term debt presented in Note 12 “Capital Structure” are direct obligations of the Registrant. A majority of the pension and other postretirement benefits plans presented in Note 17 “Benefit Plans” are direct obligations of the Registrant. Participating subsidiaries fund the pension plans contributions under a master services cost sharing agreement. In addition, as a result of joint and several pension liability rules under the Internal Revenue Code and the Employee Retirement Income Security Act of 1974, as amended, many liabilities that arise in connection with pension plans are joint and several across all members of a controlled group of entities. 2. Notes due to subsidiaries On June 18, 2020 and December 29, 2020, the Registrant issued $1.00 billion and $250 million notes, with rates of 0.43% and 0.33%, due on June 18, 2021 and December 29, 2021, respectively, to Kennett Capital Inc. The proceeds of these issuances were used for cash management purposes. On June 19, 2019, the Registrant issued a $1.00 billion note, with a rate of 2.63% due on June 19, 2020 to Kennett Capital Inc. The proceeds of this issuance were used for cash management purposes. On June 18, 2020, the Registrant repaid $1.00 billion to Kennett Capital Inc. 3. Supplemental Disclosures of Cash Flow Information The Registrant paid $311 million, $312 million and $330 million of interest on debt in 2020, 2019 and 2018, respectively. |
Schedule III_- Supplementary In
Schedule III - Supplementary Insurance Information | 12 Months Ended |
Dec. 31, 2020 | |
SEC Schedule, 12-16, Insurance Companies, Supplementary Insurance Information [Abstract] | |
Schedule III — Supplementary Insurance Information | Schedule III — Supplementary Insurance Information ($ in millions) As of December 31, For the years ended December 31, Segment Deferred policy acquisition costs Reserves for claims and claims expense, contract benefits and contractholder funds Unearned premiums Premium revenue and contract charges Net investment income (1) Claims and claims expense, contract benefits and interest credited to contractholders Amortization of deferred policy acquisition costs Other operating costs and expenses Premiums written (excluding life) 2020 Property-Liability Allstate Protection $ 1,608 $ 25,679 $ 12,772 $ 35,580 $ 21,485 $ 4,642 $ 5,623 $ 35,768 Discontinued Lines and Coverages — 1,888 — — 141 — 3 — Total Property-Liability 1,608 27,567 12,772 35,580 $ 1,421 21,626 4,642 5,626 35,768 Protection Services (2) 1,696 43 3,167 1,640 44 386 658 760 1,890 Allstate Life 909 10,768 3 1,340 502 1,293 149 335 — Allstate Benefits 470 1,885 7 1,094 78 549 177 323 926 Allstate Annuities 17 17,328 — 10 761 1,039 4 27 — Corporate and Other — — — — 47 — — 389 — Intersegment Eliminations (2) — — — (147) — (11) — (136) — Total $ 4,700 $ 57,591 $ 15,949 $ 39,517 $ 2,853 $ 24,882 $ 5,630 $ 7,324 $ 38,584 2019 Property-Liability Allstate Protection $ 1,624 $ 25,843 $ 12,567 $ 34,843 $ 23,517 $ 4,649 $ 4,506 $ 35,419 Discontinued Lines and Coverages — 1,818 — — 105 — 3 — Total Property-Liability 1,624 27,661 12,567 34,843 $ 1,533 23,622 4,649 4,509 35,419 Protection Services (2) 1,449 51 2,765 1,387 42 363 543 838 1,535 Allstate Life 1,079 10,541 3 1,343 514 1,154 173 356 — Allstate Benefits 527 1,950 8 1,145 83 635 161 285 988 Allstate Annuities 20 17,501 — 13 917 890 7 30 — Corporate and Other — — — — 70 — — 531 — Intersegment Eliminations (2) — — — (154) — (9) — (145) — Total $ 4,699 $ 57,704 $ 15,343 $ 38,577 $ 3,159 $ 26,655 $ 5,533 $ 6,404 $ 37,942 2018 Property-Liability Allstate Protection $ 1,618 $ 25,495 $ 11,953 $ 32,950 $ 22,348 $ 4,475 $ 4,522 $ 33,555 Discontinued Lines and Coverages — 1,864 — — 87 — 3 — Total Property-Liability 1,618 27,359 11,953 32,950 $ 1,464 22,435 4,475 4,525 33,555 Protection Services (2) 1,290 64 2,546 1,220 27 350 463 603 1,431 Allstate Life 1,300 10,333 3 1,315 505 1,094 132 364 — Allstate Benefits 549 1,905 8 1,135 77 630 145 278 980 Allstate Annuities 27 18,341 — 15 1,096 903 7 31 — Corporate and Other — — — — 71 — — 880 — Intersegment Eliminations (2) — — — (122) — (7) — (115) — Total $ 4,784 $ 58,002 $ 14,510 $ 36,513 $ 3,240 $ 25,405 $ 5,222 $ 6,566 $ 35,966 (1) A single investment portfolio supports both Allstate Protection and Discontinued Lines and Coverages segments. (2) Includes intersegment premiums and service fees and the related incurred losses and expenses that are eliminated in the consolidated financial statements. |
Schedule IV_- Reinsurance
Schedule IV - Reinsurance | 12 Months Ended |
Dec. 31, 2020 | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Abstract] | |
Schedule IV — Reinsurance | Schedule IV — Reinsurance ($ in millions) Gross amount Ceded to other companies (1) Assumed from other companies Net amount Percentage of amount assumed to net Year ended December 31, 2020 Life insurance in force $ 208,417 $ 67,319 $ 217,020 $ 358,118 60.6 % Premiums and contract charges: Life insurance $ 1,053 $ 222 $ 685 $ 1,516 45.2 % Accident and health insurance 948 20 — 928 — % Property and casualty insurance 38,115 1,141 99 37,073 0.3 % Total premiums and contract charges $ 40,116 $ 1,383 $ 784 $ 39,517 2.0 % Year ended December 31, 2019 Life insurance in force $ 219,785 $ 74,021 $ 229,419 $ 375,183 61.1 % Premiums and contract charges: Life insurance $ 1,062 $ 262 $ 712 $ 1,512 47.1 % Accident and health insurance 1,012 23 — 989 — % Property and casualty insurance 37,104 1,122 94 36,076 0.3 % Total premiums and contract charges $ 39,178 $ 1,407 $ 806 $ 38,577 2.1 % Year ended December 31, 2018 Life insurance in force $ 207,434 $ 81,186 $ 243,161 $ 369,409 65.8 % Premiums and contract charges: Life insurance $ 994 $ 266 $ 754 $ 1,482 50.9 % Accident and health insurance 1,007 24 — 983 — % Property and casualty insurance 34,977 1,016 87 34,048 0.3 % Total premiums and contract charges $ 36,978 $ 1,306 $ 841 $ 36,513 2.3 % (1) No reinsurance or coinsurance income was netted against premium ceded in 2020, 2019 or 2018. |
Schedule V_- Valuation Allowanc
Schedule V - Valuation Allowances and Qualifying Accounts | 12 Months Ended |
Dec. 31, 2020 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |
Schedule V — Valuation Allowances and Qualifying Accounts | Schedule V — Valuation Allowances and Qualifying Accounts ($ in millions) Additions Description Balance as of beginning of period (1) Charged to costs and expenses Other additions Deductions Balance as of end of period Year ended December 31, 2020 Fixed income securities $ — $ 5 $ — $ 2 $ 3 Mortgage loans 45 39 — 17 67 Other investments Bank loans 53 28 — 14 67 Agent loans 5 — — — 5 Investments 103 72 — 33 142 Premium installment receivable 91 223 — 161 153 Reinsurance recoverables 74 — — — 74 Other assets 18 5 — — 23 Assets 286 300 — 194 392 Commitments to fund mortgage loans, bank loans and agent loans 3 — — 2 1 Liabilities 3 — — 2 1 Total $ 289 $ 300 $ — $ 196 $ 393 Year ended December 31, 2019 Reinsurance recoverables $ 65 $ (2) $ — $ — $ 63 Premium installment receivable 77 137 — 124 90 Deferred tax assets — — — — — Mortgage loans 3 — — — 3 Agent loans 2 1 — — 3 Year ended December 31, 2018 Reinsurance recoverables $ 70 $ (5) $ — $ — $ 65 Premium installment receivable 77 118 — 118 77 Deferred tax assets — — — — — Mortgage loans 3 — — — 3 Agent loans 2 — — — 2 (1) Effective January 1, 2020, the Company adopted the measurement of credit losses on financial instruments accounting standard that primarily affected mortgage loans, bank loans and reinsurance recoverables. After consideration of existing valuation allowances maintained prior to adopting the new guidance, the Company increased its valuation allowances for credit losses at January 1, 2020 to conform to the new requirements. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of presentation | Basis of presentation The accompanying consolidated financial statements include the accounts of The Allstate Corporation (the “Corporation”) and its wholly owned subsidiaries, primarily Allstate Insurance Company (“AIC”), a property and casualty insurance company with various property and casualty and life and investment subsidiaries, including Allstate Life Insurance Company (“ALIC”) (collectively referred to as the “Company” or “Allstate”). These consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). All significant intercompany accounts and transactions have been eliminated. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. |
Risks and uncertainties | Risks and uncertainties Allstate has exposure to catastrophic events, including wind and hail, wildfires, tornadoes, hurricanes, tropical storms, earthquakes, volcanic eruptions, terrorism and industrial accidents. Catastrophes, an inherent risk of the property and casualty insurance business, have contributed, and will continue to contribute, to material year-to-year fluctuations in the Company’s results of operations and financial position (see Note 8). The nature and level of catastrophic loss experienced in any period cannot be predicted and could be material to results of operations and financial position. The Company considers the following categories and locations to be the greatest areas of potential catastrophe losses: • Wildfires — California, Oregon, Colorado, and Texas • Hurricanes — Major metropolitan centers in counties along the eastern and gulf coasts of the United States • Wind/Hail, Rain and Tornado — Texas, Illinois, Georgia and Colorado • Earthquakes and fires following earthquakes —Major metropolitan areas near fault lines in the states of California, Oregon, Washington, South Carolina, Missouri, Kentucky and Tennessee |
Investments | Investments Fixed income securities include bonds, asset-backed securities (“ABS”) and mortgage-backed securities (“MBS”). MBS includes residential and commercial mortgage-backed securities. Fixed income securities, which may be sold prior to their contractual maturity, are designated as available-for-sale (“AFS”) and are carried at fair value. The difference between amortized cost, net of credit loss allowances (“amortized cost, net”) and fair value, net of deferred income taxes and related life and annuity deferred policy acquisition costs (“DAC”), deferred sales inducement costs (“DSI”) and reserves for life-contingent contract benefits, is reflected as a component of AOCI. The Company excludes accrued interest receivable from the amortized cost basis of its AFS fixed income securities. Cash received from calls and make-whole payments is reflected as a component of proceeds from sales and cash received from maturities and pay-downs is reflected as a component of investment collections within the Consolidated Statements of Cash Flows. Equity securities primarily include common stocks, exchange traded and mutual funds, non-redeemable preferred stocks and real estate investment trust equity investments. Certain exchange traded and mutual funds have fixed income securities as their underlying investments. Equity securities are carried at fair value. Equity securities without readily determinable or estimable fair values are measured using the measurement alternative, which is cost less impairment, if any, and adjustments resulting from observable price changes in orderly transactions for the identical or similar investment of the same issuer. Mortgage loans and loans reported in other investments (bank loans and agent loans) are carried at amortized cost, net, which represent the amount expected to be collected. The Company excludes accrued interest receivable from the amortized cost basis of its mortgage, bank and agent loans. Credit loss allowances are estimates of expected credit losses, established for loans upon origination or purchase, and are established considering all relevant information available, including past events, current conditions, and reasonable and supportable forecasts over the life of the loans. Loans are evaluated on a pooled basis when they share similar risk characteristics; otherwise, they are evaluated individually. Investments in limited partnership interests are primarily accounted for in accordance with the equity method of accounting (“EMA”) and include interests in private equity funds, real estate funds and other funds. Investments in limited partnership interests purchased prior to January 1, 2018, where the Company’s interest is so minor that it exercises virtually no influence over operating and financial policies, are accounted for at fair value primarily utilizing the net asset value (“NAV”) as a practical expedient to determine fair value. Short-term investments, including money market funds, commercial paper, U.S. Treasury bills and other short-term investments, are carried at fair value. Other investments primarily consist of bank loans, policy loans, real estate, agent loans and derivatives. Bank loans are primarily senior secured corporate loans. Policy loans are carried at unpaid principal balances. Real estate is carried at cost less accumulated depreciation. Agent loans are loans issued to exclusive Allstate agents. Derivatives are carried at fair value. Investment income primarily consists of interest, dividends, income from limited partnership interests, rental income from real estate, and income from certain derivative transactions. Interest is recognized on an accrual basis using the effective yield method and dividends are recorded at the ex-dividend date. Interest income for ABS and MBS is determined considering estimated pay-downs, including prepayments, obtained from third-party data sources and internal estimates. Actual prepayment experience is periodically reviewed, and effective yields are recalculated when differences arise between the prepayments originally anticipated and the actual prepayments received and currently anticipated. For ABS and MBS of high credit quality with fixed interest rates, the effective yield is recalculated on a retrospective basis. For all others, the effective yield is generally recalculated on a prospective basis. Net investment income for AFS fixed income securities includes the impact of accreting the credit loss allowance for the time value of money. Accrual of income is suspended for fixed income securities when the timing and amount of cash flows expected to be received is not reasonably estimable. Accrual of income is suspended for mortgage loans, bank loans and agent loans that are in default or when full and timely collection of principal and interest payments is not probable. Accrued income receivable is monitored for recoverability and when not expected to be collected is written off through net investment income. Cash receipts on investments on nonaccrual status are generally recorded as a reduction of amortized cost. Income from limited partnership interests carried at fair value is recognized based upon the changes in fair value of the investee’s equity primarily determined using NAV. Income from EMA limited partnership interests is recognized based on the Company’s share of the partnerships’ earnings. Income from EMA limited partnership interests is generally recognized on a three month delay due to the availability of the related financial statements from investees. Realized capital gains and losses include gains and losses on investment sales, changes in the credit loss allowances related to fixed income securities, mortgage loans, bank loans and agent loans, impairments, valuation changes of equity investments, including equity securities and certain limited partnerships where the underlying assets are predominately public equity securities, and periodic changes in fair value and settlements of certain derivatives, including hedge ineffectiveness. Realized capital gains and losses on investment sales are determined on a specific identification basis and are |
Derivative and embedded derivative financial instruments | Derivative and embedded derivative financial instruments Derivative financial instruments include interest rate swaps, credit default swaps, futures (interest rate and equity), options (including swaptions), interest rate caps, warrants and rights, foreign currency swaps, foreign currency forwards, total return swaps and certain investment risk transfer reinsurance agreements. Derivatives required to be separated from the host instrument and accounted for as derivative financial instruments (“subject to bifurcation”) are embedded in equity-indexed life and annuity contracts and reinsured variable annuity contracts. All derivatives are accounted for on a fair value basis and reported as other investments, other assets, other liabilities and accrued expenses or contractholder funds. Embedded derivative instruments subject to bifurcation are also accounted for on a fair value basis and are reported together with the host contract. The change in fair value of derivatives embedded in life and annuity product contracts and subject to bifurcation is reported in life and annuity contract benefits or interest credited to contractholder funds. Cash flows from embedded derivatives subject to bifurcation and derivatives receiving hedge accounting are reported consistently with the host contracts and hedged risks, respectively, within the Consolidated Statements of Cash Flows. Cash flows from other derivatives are reported in cash flows from investing activities within the Consolidated Statements of Cash Flows. When derivatives meet specific criteria, they may be designated as accounting hedges and accounted for as fair value, cash flow, foreign currency fair value or foreign currency cash flow hedges. The hedged item may be either all or a specific portion of a recognized asset, liability or an unrecognized firm commitment attributable to a particular risk for fair value hedges. At the inception of the hedge, the Company formally documents the hedging relationship and risk management objective and strategy. The documentation identifies the hedging instrument, the hedged item, the nature of the risk being hedged and the methodology used to assess the effectiveness of the hedging instrument in offsetting the exposure to changes in the hedged item’s fair value attributable to the hedged risk. For a cash flow hedge, this documentation includes the exposure to changes in the variability in cash flows attributable to the hedged risk. The Company does not exclude any component of the change in fair value of the hedging instrument from the effectiveness assessment. At each reporting date, the Company confirms that the hedging instrument continues to be highly effective in offsetting the hedged risk. Fair value hedges The change in fair value of hedging instruments used in fair value hedges of investment assets or a portion thereof is reported in net investment income, together with the change in fair value of the hedged items. The change in fair value of hedging instruments used in fair value hedges of contractholder funds liabilities or a portion thereof is reported in interest credited to contractholder funds, together with the change in fair value of the hedged items. Accrued periodic settlements on swaps are reported together with the changes in fair value of the related swaps in net investment income or interest credited to contractholder funds. The amortized cost, net for fixed income securities or the carrying value of a designated hedged liability is adjusted for the change in fair value of the hedged risk. Cash flow hedges For hedging instruments used in cash flow hedges, the changes in fair value of the derivatives are reported in AOCI. Amounts are reclassified to net investment income, realized capital gains and losses or interest expense as the hedged or forecasted transaction affects income. Accrued periodic settlements on derivatives used in cash flow hedges are reported in net investment income. The amount reported in AOCI for a hedged transaction is the cumulative gain or loss on the derivative instrument from inception of the hedge less gains or losses previously reclassified from AOCI into income. If the Company expects at any time that the loss reported in AOCI would lead to a net loss on the combination of the hedging instrument and the hedged transaction which may not be recoverable, a loss is recognized immediately in realized capital gains and losses. If an impairment loss is recognized on an asset or an additional obligation is incurred on a liability involved in a hedge transaction, any offsetting gain in AOCI is reclassified and reported together with the impairment loss or recognition of the obligation. Termination of hedge accounting If, subsequent to entering into a hedge transaction, the derivative becomes ineffective (including if the hedged item is sold or otherwise extinguished, the occurrence of a hedged forecasted transaction is no longer probable or the hedged asset has a credit loss), the Company may terminate the derivative position. The Company may also terminate derivative instruments or redesignate them as non-hedge as a result of other events or circumstances. If the derivative instrument is not terminated when a fair value hedge is no longer effective, the future gains and losses recognized on the derivative are reported in realized capital gains and losses. When a fair value hedge is no longer effective, is redesignated as non-hedge or when the derivative has been terminated, the fair value gain or loss on the hedged asset, liability or portion thereof previously recognized in income while the hedge was in place and used to adjust the amortized cost, net of hedged fixed income securities or mortgage loans or carrying value of a hedged liability, is amortized over the remaining life of the hedged asset, liability or portion thereof, and reflected in net investment income or interest credited to contractholder funds beginning in the period that hedge accounting is no longer applied. When a derivative instrument used in a cash flow hedge of an existing asset or liability is no longer effective or is terminated, the gain or loss recognized on the derivative is reclassified from AOCI to income as the hedged risk impacts income. If the derivative instrument is not terminated when a cash flow hedge is no longer effective, future gains and losses recognized on the derivative are reported in realized capital gains and losses. When a derivative instrument used in a cash flow hedge of a forecasted transaction is terminated because it is probable the forecasted transaction will not occur, the gain or loss recognized on the derivative is immediately reclassified from AOCI to realized capital gains and losses in the period that hedge accounting is no longer applied. Non-hedge derivative financial instruments For derivatives for which hedge accounting is not applied, the income statement effects, including fair value gains and losses and accrued periodic settlements, are reported either in realized capital gains and losses or in a single line item together with the results of the associated asset or liability for which risks are being managed. |
Securities loaned | Securities loaned The Company’s business activities include securities lending transactions, which are used primarily to generate net investment income. The proceeds received in conjunction with securities lending transactions can be reinvested in short-term investments or fixed income securities. These transactions are short-term in nature, usually 30 days or less. The Company receives cash collateral for securities loaned in an amount generally equal to 102% and 105% of the fair value of domestic and foreign securities, respectively, and records the related obligations to return the collateral in other liabilities and accrued expenses. The carrying value of these obligations approximates fair value because of their relatively short-term nature. The Company monitors the market value of securities loaned on a daily basis and obtains additional collateral as necessary under the terms of the agreements to mitigate counterparty credit risk. The Company maintains the right and ability to repossess the securities loaned on short notice. |
Recognition of premium revenues and contract charges, and related benefits and interest credited | Recognition of premium revenues and contract charges, and related benefits and interest credited Property and casualty insurance premiums include premiums from personal lines policies, protection plans, other contracts (primarily finance and insurance products) and roadside assistance. Personal lines insurance premiums are deferred and earned on a pro-rata basis over the terms of the policies, typically periods of six Revenues related to protection plans, other contracts (primarily finance and insurance products) and roadside assistance are deferred and earned over the term of the contract in a manner that recognizes revenue as obligations under the contracts are performed. Revenues from these products are classified as premiums as the products are backed by insurance. Protection plans and finance and insurance premiums are recognized using a cost-based incurrence method over the term of the contracts, which is generally over one assistance premiums are recognized evenly over the term of the contract as performance obligations are fulfilled. The portion of premiums written applicable to the unexpired terms of the policies is recorded as unearned premiums. Unearned premiums As of December 31, ($ in millions) 2020 2019 Allstate Protection $ 12,772 $ 12,567 Protection Services 3,167 2,765 Total $ 15,939 $ 15,332 For the year ended December 31, 2020, the Company recognized $1.11 billion of Property and casualty insurance premiums for Protection Services that were included in the unearned premium balance as of December 31, 2019. For the year ended December 31, 2019, the Company recognized $996 million of Property and casualty insurance premiums for Protection Services that were included in the unearned premium balance as of December 31, 2018. The Company expects to recognize approximately $1.30 billion, $861 million and $1.00 billion of the December 31, 2020 the unearned premium balance in 2021, 2022 and thereafter, respectively. Premium installment receivables represent premiums written and not yet collected, net of the credit loss allowance for uncollectible premiums. These receivables are primarily outstanding for one year or less. The Company utilizes historical internal data including aging analyses to estimate allowances under current conditions and for the forecast period. The Company regularly evaluates and updates the data and adjusts its allowance as appropriate. The increase in the provision for credit losses primarily related to customer enrollment in the Allstate Special Payment plan implemented in response to the Coronavirus, starting in March 2020. Rollforward of credit loss allowance for premium installment receivables ($ in millions) For the year ended December 31, 2020 Beginning balance $ (91) Increase in the provision for credit losses (223) Write-off of uncollectible premium installment receivable amounts 161 Ending balance $ (153) Traditional life insurance products consist principally of products with fixed and guaranteed premiums and benefits, primarily term and whole life insurance products. Voluntary accident and health insurance products are expected to remain in force for an extended period and therefore are primarily classified as long-duration contracts. Premiums from these products are recognized as revenue when due from policyholders, net of any credit loss allowance for uncollectible premiums. Benefits are reflected in contract benefits and recognized over the life of the policy in relation to premiums. Immediate annuities with life contingencies, including certain structured settlement annuities, provide benefits over a period that extends beyond the period during which premiums are collected. Premiums from these products are recognized as revenue when received at the inception of the contract. Benefits are recognized in relation to premiums with the establishment of a reserve. The change in reserve over time is recorded in contract benefits and primarily relates to accumulation at the discount rate and annuitant mortality. Profits from these policies come primarily from investment income, which is recognized over the life of the contract. Interest-sensitive life contracts, such as universal life and single premium life, are insurance contracts whose terms are not fixed and guaranteed. The terms that may be changed include premiums paid by the contractholder, interest credited to the contractholder account balance and contract charges assessed against the contractholder account balance. Premiums from these contracts are reported as contractholder fund deposits. Contract charges consist of fees assessed against the contractholder account balance for the cost of insurance (mortality risk), contract administration and surrender of the contract prior to contractually specified dates. These contract charges are recognized as revenue when assessed against the contractholder account balance. Contract benefits include life-contingent benefit payments in excess of the contractholder account balance. Contracts that do not subject the Company to significant risk arising from mortality or morbidity are referred to as investment contracts. Fixed annuities, including market value adjusted annuities, equity-indexed annuities and immediate annuities without life contingencies, are considered investment contracts. Consideration received for such contracts is reported as contractholder fund deposits. Contract charges for investment contracts consist of fees assessed against the contractholder account balance for maintenance, administration and surrender of the contract prior to contractually specified dates, and are recognized when assessed against the contractholder account balance. Interest credited to contractholder funds represents interest accrued or paid on interest-sensitive life and investment contracts. Crediting rates for certain fixed annuities and interest-sensitive life contracts are adjusted periodically by the Company to reflect current market conditions subject to contractually guaranteed minimum rates. Crediting rates for indexed life and annuities are generally based on a specified interest rate index or an equity index, such as the Standard & Poor’s 500 Index (“S&P 500”). Interest credited also includes amortization of DSI expenses. DSI is amortized into interest credited using the same method used to amortize DAC. Contract charges for variable life and variable annuity products consist of fees assessed against the contractholder account balances for contract maintenance, administration, mortality, expense and |
Deferred policy acquisition and sales inducement costs | Deferred policy acquisition and sales inducement costs Costs that are related directly to the successful acquisition of new or renewal insurance policies and investment contracts are deferred and recorded as DAC. These costs are principally agent and broker remuneration, premium taxes and certain underwriting expenses. DSI costs, which are deferred and recorded as other assets, relate to sales inducements offered on sales to new customers, principally on fixed annuity and interest-sensitive life contracts. These sales inducements are primarily in the form of additional credits to the customer’s account balance or enhancements to interest credited for a specified period which are in excess of the rates currently being credited to similar contracts without sales inducements. DSI is amortized into income using the same methodology and assumptions as DAC and is included in interest credited to contractholder funds. All other acquisition costs are expensed as incurred and included in operating costs and expenses. For property and casualty insurance, DAC is amortized into income as premiums are earned, typically over periods of six one For traditional life and voluntary accident and health insurance, DAC is amortized over the premium paying period of the related policies in proportion to the estimated revenues on such business. Assumptions used in the amortization of DAC and reserve calculations are established at the time the policy is issued and are generally not revised during the life of the policy. Any deviations from projected business in force resulting from actual policy terminations differing from expected levels and any estimated premium deficiencies may result in a change to the rate of amortization in the period such events occur. Generally, the amortization periods for these policies approximates the estimated lives of the policies. The Company periodically reviews the recoverability of DAC using actual experience and current assumptions. Traditional life insurance products, immediate annuities with life contingencies, and voluntary accident and health insurance products are reviewed individually. If actual experience and current assumptions are adverse compared to the original assumptions and a premium deficiency is determined to exist, any remaining unamortized DAC balance would be expensed to the extent not recoverable and the establishment of a premium deficiency reserve may be required for any remaining deficiency. For interest-sensitive life insurance, DAC and DSI are amortized in proportion to the incidence of the total present value of gross profits, which includes both actual historical gross profits (“AGP”) and estimated future gross profits (“EGP”) expected to be earned over the estimated lives of the contracts. The amortization is net of interest on the prior period DAC balance using rates established at the inception of the contracts. Actual amortization periods generally range from 15-30 years; however, incorporating estimates of the rate of customer surrenders, partial withdrawals and deaths generally results in the majority of the DAC being amortized during the surrender charge period, which is typically 10-20 years for interest-sensitive life. The rate of DAC and DSI amortization is reestimated and adjusted by a cumulative charge or credit to income when there is a difference between the incidence of actual versus expected gross profits in a reporting period or when there is a change in total EGP. When DAC or DSI amortization or a component of gross profits for a quarterly period is potentially negative (which would result in an increase of the DAC or DSI balance) as a result of negative AGP, the specific facts and circumstances surrounding the potential negative amortization are considered to determine whether it is appropriate for recognition in the consolidated financial statements. Negative amortization is only recorded when the increased DAC or DSI balance is determined to be recoverable based on facts and circumstances. Recapitalization of DAC and DSI is limited to the originally deferred costs plus interest. AGP and EGP primarily consist of the following components: contract charges for the cost of insurance less mortality costs and other benefits; investment income and realized capital gains and losses less interest credited; and surrender and other contract charges less maintenance expenses. The principal assumptions for determining the amount of EGP are mortality, persistency, expenses, investment returns, including capital gains and losses on assets supporting contract liabilities, interest crediting rates to contractholders, and the effects of any hedges. For products whose supporting investments are exposed to capital losses in excess of the Company’s expectations which may cause periodic AGP to become temporarily negative, EGP and AGP utilized in DAC and DSI amortization may be modified to exclude the excess capital losses. The Company performs quarterly reviews of DAC and DSI recoverability for interest-sensitive life and fixed annuity contracts using current assumptions. If a change in the amount of EGP is significant, it could result in the unamortized DAC or DSI not being recoverable, resulting in a charge which is included as a component of amortization of deferred policy acquisition costs or interest credited to contractholder funds, respectively. The DAC and DSI balances presented include adjustments to reflect the amount by which the amortization of DAC and DSI would increase or decrease if the unrealized capital gains or losses in the respective product investment portfolios were actually realized. The adjustments are recorded net of tax in AOCI. DAC, DSI and deferred income taxes determined on unrealized capital gains and losses and reported in AOCI recognize the impact on shareholders’ equity consistently with the amounts that would be recognized in the income statement on realized capital gains and losses. Customers of the Company may exchange one insurance policy or investment contract for another offered by the Company, or make modifications to an existing investment, life or property and casualty contract issued by the Company. These transactions are identified as internal replacements for accounting purposes. Internal replacement transactions determined to result in replacement contracts that are substantially unchanged from the replaced contracts are accounted for as continuations of the replaced contracts. Unamortized DAC and DSI related to the replaced contracts continue to be deferred and amortized in connection with the replacement contracts. For interest-sensitive life and investment contracts, the EGP of the replacement contracts are treated as a revision to the EGP of the replaced contracts in the determination of amortization of DAC and DSI. For traditional life and property and casualty insurance policies, any changes to unamortized DAC that result from replacement contracts are treated as prospective revisions. Any costs associated with the issuance of replacement contracts are characterized as maintenance costs and expensed as incurred. Internal replacement transactions determined to result in a substantial change to the replaced contracts are accounted for as an extinguishment of the replaced contracts, and any unamortized DAC and DSI related to the replaced contracts are eliminated with a corresponding charge to amortization of deferred policy acquisition costs or interest credited to contractholder funds, respectively. |
Reinsurance and Indemnification | Reinsurance and Indemnification Reinsurance In the normal course of business, the Company seeks to limit aggregate and single exposure to losses on large risks by purchasing reinsurance. The Company has also used reinsurance to affect the disposition of certain blocks of business. Reinsurance does not extinguish the Company’s primary liability under the policies written. Therefore, in addition to establishing allowances as appropriate after evaluating reinsurers’ activities related to claims settlement practices and commutations, the Company evaluates reinsurer counterparty credit risk and records reinsurance recoverables net of credit loss allowances. The Company assesses counterparty credit risk for individual reinsurers separately when more relevant or on a pooled basis when shared risk characteristics exist. The evaluation considers the credit quality of the reinsurer and the period over which the recoverable balances are expected to be collected. The Company considers factors including past events, current conditions and reasonable and supportable forecasts in the development of the estimate of credit loss allowances. Allowances for property and casualty and life reinsurance recoverables are established primarily through risk-based evaluations. The property and casualty recoverable evaluation considers the credit rating of the reinsurer, the period over which the reinsurance recoverable balances are expected to be recovered and other relevant factors including historical experience of reinsurer failures. Reinsurers in liquidation or in default status are evaluated individually using the Company’s historical liquidation recovery assumptions and any other relevant information available including the most recent public information related to the financial condition or liquidation status of the reinsurer. For life reinsurance recoverables, the Company uses a probability of default and loss given default model developed independently of the Company to estimate current expected credit losses. The life reinsurance recoverable evaluation utilizes factors including historical industry factors based on the probability of liquidation, and incorporates current loss given default factors reflective of the industry. The Company monitors the credit ratings of reinsurer counterparties and evaluates the circumstances surrounding credit rating changes as inputs into its credit loss assessments. Uncollectible reinsurance recoverable balances are written off against the allowances when there is no reasonable expectation of recovery. The changes in the allowances are reported in property and casualty insurance claims and claims expense and life contract benefits. Indemnification The Company also participates in various indemnification mechanisms, including industry pools and facilities, which are reimbursement |
Goodwill | Goodwill Goodwill represents the excess of amounts paid for acquiring businesses over the fair value of the net assets acquired, less any impairment of goodwill recognized. The Company’s goodwill reporting units are equivalent to its reportable segments, Allstate Protection, Protection Services, Allstate Life and Allstate Benefits to which goodwill has been assigned. Goodwill by reporting unit As of December 31, ($ in millions) 2020 2019 Allstate Protection $ 810 $ 810 Protection Services 1,463 1,464 Allstate Life 175 175 Allstate Benefits 96 96 Total $ 2,544 $ 2,545 Goodwill is recognized when acquired and allocated to reporting units based on which unit is expected to benefit from the synergies of the business combination. Goodwill is not amortized but is tested for impairment at least annually. The Company performs its annual goodwill impairment testing during the fourth quarter of each year based upon data as of the close of the third quarter. Goodwill impairment is measured and recognized as the amount by which a reporting unit’s carrying value, including goodwill, exceeds its fair value, not to exceed the carrying amount of goodwill allocated to the reporting unit. The Company also reviews goodwill for impairment whenever events or changes in circumstances, such as deteriorating or adverse market conditions, indicate that it is more likely than not that the carrying amount of the reporting unit including goodwill may exceed the fair value of the reporting unit. The goodwill impairment analysis is performed at the reporting unit level. As of December 31, 2020 and 2019, the fair value of the Company’s goodwill reporting units exceeded their carrying values. On January 26, 2021 the Company announced an agreement to sell ALIC and certain affiliates involving business in both the Allstate Life and Allstate Annuities segments. As a result of the pending sale of ALIC and certain affiliates, the Company’s goodwill will be reduced by $175 million. |
Intangible assets, finite-lived | Intangible assetsIntangible assets (reported in other assets) consist of capitalized costs primarily related to acquired customer relationships, trade names and licenses, technology and other assets. The estimated useful lives of customer relationships, technology and other intangible assets are generally 10 years, 5 years and 7 years, respectively. Intangible assets are carried at cost less accumulated amortization. Amortization expense is calculated using an accelerated amortization method. |
Intangible assets, indefinite-lived | Trade names and licenses are considered to have an indefinite useful life and are reviewed for impairment at least annually or more frequent if circumstances arise that indicate an impairment may have occurred. An impairment is recognized if the carrying amount of the asset exceeds its estimated fair value. |
Property and equipment | Property and equipment Property and equipment is carried at cost less accumulated depreciation. Included in property and equipment are capitalized costs related to computer software licenses and software developed for internal use. These costs generally consist of certain external payroll and payroll related costs. Property and equipment depreciation is calculated using the straight-line method over the estimated useful lives of the assets, generally 3 to 10 years for equipment and 40 years for real property. Depreciation expense is reported in operating costs and expenses. Accumulated depreciation on property and equipment was $2.81 billion and $2.60 billion as of December 31, 2020 and 2019, respectively. Depreciation expense on property and equipment was $353 million, $326 million and $299 million in 2020, 2019 and 2018, respectively. The Company reviews its property and equipment for impairment at least annually and whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. |
Income taxes | Income taxesIncome taxes are accounted for using the asset and liability method under which deferred tax assets and liabilities are recognized for temporary differences between the financial reporting and tax bases of assets and liabilities at the enacted tax rates. The principal assets and liabilities giving rise to such differences are DAC, unearned premiums, investments (including unrealized capital gains and losses) and insurance reserves. A deferred tax asset valuation allowance is established when it is more likely than not such assets will not be realized. |
Reserves for property-liability insurance claims and claims expense and life-contingent contract benefits | Reserve for property and casualty insurance claims and claims expense The reserve for property and casualty insurance claims and claims expense is the estimate of amounts necessary to settle all reported and unreported incurred claims for the ultimate cost of insured property and casualty losses, based upon the facts of each case and the Company’s experience with similar cases. Estimated amounts of salvage and subrogation are deducted from the reserve for claims and claims expense. The establishment of appropriate reserves, including reserves for catastrophe losses, is an inherently uncertain and complex process. Reserve estimates are primarily derived using an actuarial estimation process in which historical loss patterns are applied to actual paid losses and reported losses (paid losses plus individual case reserves established by claim adjusters) for an accident or report year to create an estimate of how losses are likely to develop over time. Development factors are calculated quarterly and periodically throughout the year for data elements such as claims reported and settled, paid losses, and paid losses combined with case reserves. The historical development patterns for these data elements are used as the assumptions to calculate reserve estimates, including the reserves for reported and unreported claims. Reserve estimates are regularly reviewed and updated, using the most current information available. Any resulting reestimates are reflected in current results of operations. Reserve for life-contingent contract benefits The reserve for life-contingent contract benefits payable under insurance policies, including traditional life insurance, life-contingent immediate annuities and voluntary accident and health insurance products, is computed on the basis of long-term actuarial assumptions of future investment yields, mortality, morbidity, policy terminations and expenses. These assumptions, which for traditional life insurance are applied using the net level premium method, include provisions for adverse deviation and generally vary by characteristics such as type of coverage, year of issue and policy duration. The assumptions are established at the time the policy is issued and are generally not changed during the life of the policy. The Company periodically reviews the adequacy of reserves using actual experience and current assumptions. If actual experience and current assumptions are adverse compared to the original assumptions and a premium deficiency is determined to exist, any remaining unamortized DAC balance would be expensed to the extent not recoverable and the establishment of a premium deficiency reserve may be required for any remaining deficiency. Traditional life insurance products, immediate annuities with life contingencies, and voluntary accident and health insurance are reviewed individually. The Company also reviews these policies for circumstances where projected profits would be recognized in early years followed by projected losses in later years. If this circumstance exists, the Company will accrue a liability, during the period of profits, to offset the losses at such time as the future losses are expected to commence using a method updated prospectively over time. To the extent that unrealized gains on fixed income securities would result in a premium deficiency if those gains were realized, the related increase in reserves for certain immediate annuities with life contingencies is recorded net of tax as a reduction of unrealized net capital gains included in AOCI. |
Contractholder funds | Contractholder funds Contractholder funds represent interest-bearing liabilities arising from the sale of products such as interest-sensitive life insurance and fixed annuities. Contractholder funds primarily comprise cumulative deposits received and interest credited to the contractholder less cumulative contract benefits, surrenders, withdrawals and contract charges for |
Separate accounts | Separate accounts Separate accounts assets are carried at fair value. The assets of the separate accounts are legally segregated and available only to settle separate accounts contract obligations. Separate accounts liabilities represent the contractholders’ claims to the related assets and are carried at an amount equal to the separate accounts assets. Investment income and realized capital gains and losses of the separate accounts accrue directly to the contractholders and therefore are not included in the Company’s Consolidated Statements of Operations. Deposits to and surrenders and withdrawals from the separate accounts are reflected in separate accounts liabilities and are not included in consolidated cash flows. Absent any contract provision wherein the Company provides a guarantee, variable annuity and variable life insurance contractholders bear the investment risk that the separate accounts’ funds may not meet their stated investment objectives. Substantially all of the Company’s variable annuity business was reinsured beginning in 2006. |
Legal contingencies | Legal contingencies The Company reviews its lawsuits, regulatory inquiries, and other legal proceedings on an ongoing basis. The Company establishes accruals for such |
Equity incentive plans | Equity incentive plans The Company has equity incentive plans under which it grants nonqualified stock options, restricted stock units and performance stock awards (“equity awards”) to certain employees and directors of the Company. The Company measures the fair value of equity awards at the grant date and recognizes the expense over the shorter of the period in which the requisite service is rendered or retirement eligibility is attained. The expense for performance stock awards with no market condition is adjusted each period to reflect the performance factor most likely to be achieved at the end of the performance period. The expense for performance stock awards with a market condition is based on the fair value of the awards at the grant date which incorporates the probability of achieving the market condition. In the event the market condition is not met, any previously recognized expense is not reversed. The Company uses a binomial lattice model to determine the fair value of employee stock options. The Company uses a Monte Carlo simulation model to determine the fair value of performance stock awards with market condition. Measurement of credit losses The Company carries an allowance for expected credit losses for all financial assets measured at amortized cost on the Consolidated Statements of Financial Position. The Company considers past events, current conditions, and reasonable and supportable forecasts in estimating an allowance for credit losses. The Company also carries a credit loss allowance for fixed income securities where applicable and, when amortized cost is reported, it is net of credit loss allowances. For additional information, refer to the Investments, Reinsurance, Indemnification or Recognition of premium revenues and contract charges, topics of this section. The Company also estimates a credit loss allowance for commitments to fund mortgage loans, bank loans and agent loans unless they are unconditionally cancellable by the Company. The related allowance is reported in other liabilities and accrued expenses. Allowance for credit losses ($ in millions) December 31, 2020 January 1, 2020 Fixed income securities $ 3 $ — Mortgage loans 67 45 Other investments Bank loans 67 53 Agent loans 5 5 Investments 142 103 Premium installment receivables 153 91 Reinsurance recoverables 74 74 Other assets 23 18 Assets 392 286 Commitments to fund mortgage loans, bank loans and agent loans 1 3 Liabilities 1 3 Total $ 393 $ 289 |
Consolidation of variable interest entities ("VIEs") | Consolidation of variable interest entities (“VIEs”) The Company consolidates VIEs when it is the primary beneficiary. A primary beneficiary is the variable interest holder in a VIE with both the power to direct the activities of the VIE that most significantly impact the economic performance of the VIE and the obligation to absorb losses, or the right to receive benefits, that could potentially be significant to the VIE. |
Foreign currency translation | Foreign currency translation The local currency of the Company’s foreign subsidiaries is deemed to be the functional currency of the country in which these subsidiaries operate. The financial statements of the Company’s foreign subsidiaries are translated into U.S. dollars at the exchange rate in effect at the end of a reporting period for assets and liabilities and at average exchange rates during the period for results of operations. The unrealized gains and losses from the translation of the net assets are recorded as unrealized foreign currency translation adjustments and included in AOCI. Changes in unrealized foreign currency translation adjustments are included in OCI. Gains and losses from foreign currency transactions are reported in operating costs and expenses and have not been material. |
Earnings per common share | Earnings per common share Basic earnings per common share is computed using the weighted average number of common shares outstanding, including vested unissued participating restricted stock units. Diluted earnings per common share is computed using the weighted average number of common and dilutive potential common shares outstanding. For the Company, dilutive potential common shares consist of outstanding stock options and unvested non-participating restricted stock units and contingently issuable performance stock awards. The effect of dilutive potential common shares does not include options with an anti-dilutive effect on earnings per common share because their exercise prices exceed the average market price of Allstate common shares during the period or for which the unrecognized compensation cost would have an anti-dilutive effect. |
Off-balance sheet financial instruments | Off-balance sheet financial instruments Commitments to invest, commitments to purchase private placement securities, commitments to fund loans, financial guarantees and credit guarantees have off-balance sheet risk because their contractual amounts are not recorded in the Company’s Consolidated Statements of Financial Position (see Notes 7 and 14). |
Accounting standards | Adopted accounting standard Measurement of Credit Losses on Financial Instruments Effective January 1, 2020, the Company adopted new Financial Accounting Standards Board (“FASB”) guidance related to the measurement of credit losses on financial instruments that primarily affected mortgage loans, bank loans and reinsurance recoverables. Upon adoption of the guidance, the Company recorded a total allowance for expected credit losses of $289 million, pre-tax. After consideration of existing valuation allowances maintained prior to adopting the new guidance, the Company increased its valuation allowances for credit losses to conform to the new requirements which resulted in recognizing a cumulative effect decrease in retained income of $88 million, after-tax, at the date of adoption. The measurement of credit losses for AFS fixed income securities measured at fair value is not affected except that credit losses recognized are limited to the amount by which fair value is below amortized cost and the credit loss adjustment is recognized through a valuation allowance which may change over time but once recorded cannot subsequently be reduced to an amount below zero. Previously these credit loss adjustments were recorded as other-than-temporary impairments and were not reversed once recorded. Pending accounting standards Changes to the Disclosure Requirements for Defined Benefit Plans In August 2018, the FASB issued amendments to modify certain disclosure requirements for defined benefit plans. New disclosures include the weighted-average interest crediting rates for cash balance plans and other plans with interest crediting rates and explanations for significant gains and losses related to changes in the benefit obligation during the reporting period. Disclosures to be eliminated include amounts expected to be reclassified out of AOCI and into the income statement in the coming year and the anticipated impact of a one-percentage point change in the assumed health care cost trend rate on service and interest cost and on the accumulated benefit obligation. The amendments are effective for annual reporting periods beginning after December 15, 2020. The impacts of adoption are to the Company’s disclosures only. Accounting for Long-Duration Insurance Contracts In August 2018, the FASB issued guidance revising the accounting for certain long-duration insurance contracts. The new guidance introduces material changes to the measurement of the Company’s reserves for traditional life, life-contingent immediate annuities and certain voluntary accident and health insurance products. Under the new guidance, measurement assumptions, including those for mortality, morbidity and policy terminations, will be required to be reviewed and updated at least annually. The effect of updating measurement assumptions other than the discount rate are required to be measured on a retrospective basis and reported in net income. In addition, reserves under the new guidance are required to be discounted using an upper-medium grade fixed income instrument yield that is updated through OCI at each reporting date. Current GAAP requires the measurement of reserves to utilize assumptions set at policy issuance unless updated current assumptions indicate that recorded reserves are deficient. The new guidance also requires DAC and other capitalized balances currently amortized in proportion to premiums or gross profits to be amortized on a constant level basis over the expected term for all long-duration insurance contracts. DAC will not be subject to loss recognition testing but will be reduced when actual lapse experience exceeds expected experience. The new guidance will no longer require adjustments to DAC and deferred sales inducement costs (“DSI”) related to unrealized gains and losses on investment securities supporting the related business. All market risk benefit product features will be measured at fair value with changes in fair value recorded in net income with the exception of changes in the fair value attributable to changes in the reporting entity’s own credit risk, which are required to be recognized in OCI. Substantially all of the Company’s market risk benefits relate to variable annuities that are reinsured and therefore these impacts are not expected to be material to the Company. The new guidance is effective for financial statements issued for reporting periods beginning after December 15, 2022 and restatement of prior periods presented is required. Early adoption is permitted and if elected, restatement of only one prior period is required. The new guidance will be applied to affected contracts and DAC on the basis of existing carrying amounts at the earliest period presented or retrospectively using actual historical experience as of contract inception. The new guidance for market risk benefits is required to be adopted retrospectively. The Company is evaluating the anticipated impacts of applying the new guidance to both retained income and AOCI. As disclosed in Note 3, the Company entered into an agreement to sell ALIC and certain affiliates. The requirements of the new guidance represent a material change from existing GAAP, however, the underlying economics of the business and related cash flows are unchanged. The Company anticipates the financial statement impact of adopting the new guidance to be material with respect to Allstate Life Insurance Company of New York’s (“ALNY”) run-off annuity business, largely attributed to the impact of transitioning to a discount rate based on an upper-medium grade fixed income investment yield. The revised accounting for DAC will be applied prospectively using the new model and any DAC effects existing in AOCI as a result of applying existing GAAP at the date of adoption will be eliminated. Simplifications to the Accounting for Income Taxes In December 2019, the FASB issued amendments to simplify the accounting for income taxes. The amendments eliminate certain exceptions in the existing guidance including those related to intraperiod tax allocation and deferred tax liability recognition when a subsidiary meets the criteria to apply the equity method of accounting. The amendments require recognition of the effect of an enacted change in tax laws or rates in the interim period that includes the enactment date, provide an option to not allocate taxes to a legal entity that is not |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Schedule of unearned premiums | The portion of premiums written applicable to the unexpired terms of the policies is recorded as unearned premiums. Unearned premiums As of December 31, ($ in millions) 2020 2019 Allstate Protection $ 12,772 $ 12,567 Protection Services 3,167 2,765 Total $ 15,939 $ 15,332 |
Allowance for credit loss | Rollforward of credit loss allowance for premium installment receivables ($ in millions) For the year ended December 31, 2020 Beginning balance $ (91) Increase in the provision for credit losses (223) Write-off of uncollectible premium installment receivable amounts 161 Ending balance $ (153) Allowance for credit losses ($ in millions) December 31, 2020 January 1, 2020 Fixed income securities $ 3 $ — Mortgage loans 67 45 Other investments Bank loans 67 53 Agent loans 5 5 Investments 142 103 Premium installment receivables 153 91 Reinsurance recoverables 74 74 Other assets 23 18 Assets 392 286 Commitments to fund mortgage loans, bank loans and agent loans 1 3 Liabilities 1 3 Total $ 393 $ 289 Rollforward of credit loss allowance for fixed income securities For the year ended ($ in millions) December 31, 2020 Beginning balance $ — Credit losses on securities for which credit losses not previously reported (5) Reduction of allowance related to sales 2 Write-offs — Ending balance (1) $ (3) (1) Allowance for fixed income securities as of December 31, 2020 comprised $1 million and $2 million of corporate bonds and ABS, respectively. Rollforward of credit loss allowance for mortgage loans ($ in millions) For the year ended December 31, 2020 Beginning balance $ (3) Cumulative effect of change in accounting principle (42) Net increases related to credit losses (39) Reduction of allowance related to sales 17 Write-offs — Ending balance $ (67) Rollforward of credit loss allowance for bank loans For the year ended December 31, 2020 ($ in millions) Beginning balance $ — Cumulative effect of change in accounting principle (53) Net increases related to credit losses (28) Reduction of allowance related to sales 9 Write-offs 5 Ending balance $ (67) |
Schedule of goodwill by reporting unit | The Company’s goodwill reporting units are equivalent to its reportable segments, Allstate Protection, Protection Services, Allstate Life and Allstate Benefits to which goodwill has been assigned. Goodwill by reporting unit As of December 31, ($ in millions) 2020 2019 Allstate Protection $ 810 $ 810 Protection Services 1,463 1,464 Allstate Life 175 175 Allstate Benefits 96 96 Total $ 2,544 $ 2,545 |
Future amortization expense | Amortization expense of intangible assets for the next five years and thereafter ($ in millions) 2021 $ 91 2022 74 2023 60 2024 45 2025 33 Thereafter 31 Total amortization $ 334 |
Schedule of indefinite-lived intangible assets | Intangible assets by type As of December 31, ($ in millions) 2020 2019 Customers relationships $ 322 $ 419 Trade names and licenses 37 38 Technology and other 94 24 Total $ 453 $ 481 |
Schedule of finite-lived intangible assets | Intangible assets by type As of December 31, ($ in millions) 2020 2019 Customers relationships $ 322 $ 419 Trade names and licenses 37 38 Technology and other 94 24 Total $ 453 $ 481 |
Other information related to operating leases | Other information related to operating leases As of December 31, 2020 2019 Weighted average remaining lease term (years) 5 6 Weighted average discount rate 3.10 % 3.15 % |
Maturity of lease liabilities | Maturity of lease liabilities ($ in millions) Operating leases 2021 $ 120 2022 116 2023 95 2024 77 2025 63 Thereafter 84 Total lease payments $ 555 Less: interest (44) Present value of lease liabilities $ 511 |
Computation of basic and diluted earnings per common share | Computation of basic and diluted earnings per common share For the years ended December 31, ($ in millions, except per share data) 2020 2019 2018 Numerator: Net income $ 5,576 $ 4,847 $ 2,160 Less: Preferred stock dividends 115 169 148 Net income applicable to common shareholders (1) $ 5,461 $ 4,678 $ 2,012 Denominator: Weighted average common shares outstanding 311.6 328.2 347.8 Effect of dilutive potential common shares: Stock options 2.2 3.2 3.6 Restricted stock units (non-participating) and performance stock awards 1.7 2.1 1.8 Weighted average common and dilutive potential common shares outstanding 315.5 333.5 353.2 Earnings per common share – Basic $ 17.53 $ 14.25 $ 5.78 Earnings per common share – Diluted $ 17.31 $ 14.03 $ 5.70 Anti-dilutive options excluded from diluted earnings per common share 2.9 3.7 2.0 |
Reportable Segments (Tables)
Reportable Segments (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Segment Reporting [Abstract] | |
Schedule of business segments revenue disclosures | Reportable segments revenue information For the years ended December 31, ($ in millions) 2020 2019 2018 Property-Liability Insurance premiums Auto $ 24,640 $ 24,188 $ 22,970 Homeowners 8,254 7,912 7,517 Other personal lines 1,919 1,861 1,808 Commercial lines 767 882 655 Allstate Protection 35,580 34,843 32,950 Discontinued Lines and Coverages — — — Total Property-Liability insurance premiums 35,580 34,843 32,950 Other revenue 736 741 738 Net investment income 1,421 1,533 1,464 Realized capital gains (losses) 990 1,470 (639) Total Property-Liability 38,727 38,587 34,513 Protection Services Consumer product protection plans 909 633 503 Roadside assistance 188 238 263 Finance and insurance products 396 362 332 Intersegment premiums and service fees (1) 147 154 122 Other revenue (2) 208 188 82 Net investment income 44 42 27 Realized capital gains (losses) 30 32 (11) Total Protection Services 1,922 1,649 1,318 Allstate Life Traditional life insurance premiums 633 630 600 Accident and health insurance premiums 2 2 2 Interest-sensitive life insurance contract charges 705 711 713 Other revenue 121 125 119 Net investment income 502 514 505 Realized capital gains (losses) (10) 1 (14) Total Allstate Life 1,953 1,983 1,925 Allstate Benefits Traditional life insurance premiums 46 43 44 Accident and health insurance premiums 926 988 980 Interest-sensitive life insurance contract charges 122 114 111 Net investment income 78 83 77 Realized capital gains (losses) 8 12 (9) Total Allstate Benefits 1,180 1,240 1,203 Allstate Annuities Fixed annuities contract charges 10 13 15 Net investment income 761 917 1,096 Realized capital gains (losses) 279 346 (166) Total Allstate Annuities 1,050 1,276 945 Corporate and Other Net investment income 47 70 71 Realized capital gains (losses) 59 24 (38) Total Corporate and Other 106 94 33 Intersegment eliminations (1) (147) (154) (122) Consolidated revenues $ 44,791 $ 44,675 $ 39,815 (1) Intersegment insurance premiums and service fees are primarily related to Arity and Allstate Roadside and are eliminated in the consolidated financial statements. (2) Other revenue is primarily related to Allstate Identity Protection, Allstate Dealer Services, and Allstate Protection Plans. |
Schedule of business segments net income disclosures | Reportable segments financial performance For the years ended December 31, ($ in millions) 2020 2019 2018 Property-Liability Allstate Protection $ 4,566 $ 2,912 $ 2,343 Discontinued Lines and Coverages (144) (108) (90) Total underwriting income 4,422 2,804 2,253 Net investment income 1,421 1,533 1,464 Income tax expense on operations (1,166) (887) (747) Realized capital gains (losses), after-tax 774 1,161 (500) Tax Legislation expense — — (5) Property-Liability net income applicable to common shareholders 5,451 4,611 2,465 Protection Services Adjusted net income 153 38 8 Realized capital gains (losses), after-tax 23 25 (9) Amortization of purchased intangibles, after-tax (84) (97) (74) Impairment of purchased intangibles, after-tax — (43) — Tax Legislation expense — — (4) Protection Services net income (loss) applicable to common shareholders 92 (77) (79) Allstate Life Adjusted net income 194 261 295 Realized capital gains (losses), after-tax (9) — (11) Valuation changes on embedded derivatives that are not hedged, after-tax (34) (9) — DAC and DSI amortization related to realized capital gains and losses and valuation changes on embedded derivatives that are not hedged, after-tax 8 (5) (8) Tax Legislation expense — — (16) Allstate Life net income applicable to common shareholders 159 247 260 Allstate Benefits Adjusted net income 96 115 124 Realized capital gains (losses), after-tax 7 9 (7) DAC and DSI amortization related to realized capital gains and losses, after-tax — — 1 Tax Legislation benefit — — — Allstate Benefits net income applicable to common shareholders 103 124 118 Allstate Annuities Adjusted net (loss) income (53) 10 131 Realized capital gains (losses), after-tax 221 274 (131) Valuation changes on embedded derivatives that are not hedged, after-tax (2) (6) 3 Premium deficiency for immediate annuities, after-tax (1) (178) — — Gain on disposition of operations, after-tax 3 4 4 Tax Legislation benefit — — 69 Allstate Annuities net (loss) income applicable to common shareholders (9) 282 76 Corporate and Other Adjusted net loss (428) (438) (406) Realized capital gains (losses), after-tax 47 19 (30) Pension and other postretirement remeasurement gains (losses), after-tax 39 (90) (370) Curtailment gain, after-tax 7 — — Business combination expenses, after-tax — — (7) Tax Legislation expense — — (15) Corporate and Other net loss applicable to common shareholders (335) (509) (828) Consolidated net income applicable to common shareholders $ 5,461 $ 4,678 $ 2,012 (1) Contract benefits increased by $225 million, pre-tax, for premium deficiency on immediate annuities with life contingencies due to updated investment and actuarial assumptions in the third quarter of 2020. |
Additional significant financial performance data | Additional significant financial performance data For the years ended December 31, ($ in millions) 2020 2019 2018 Amortization of DAC Property-Liability $ 4,642 $ 4,649 $ 4,475 Protection Services 658 543 463 Allstate Life 149 173 132 Allstate Benefits 177 161 145 Allstate Annuities 4 7 7 Consolidated $ 5,630 $ 5,533 $ 5,222 Income tax expense (benefit) Property-Liability $ 1,382 $ 1,196 $ 613 Protection Services 26 (18) (19) Allstate Life 17 53 75 Allstate Benefits 28 35 32 Allstate Annuities (7) 73 (66) Corporate and Other (63) (97) (167) Consolidated $ 1,383 $ 1,242 $ 468 |
Summarized data for total assets and investments | Reportable segment total assets, investments and deferred policy acquisition costs (1) As of December 31, ($ in millions) 2020 2019 Assets Property-Liability $ 69,171 $ 67,243 Protection Services 6,177 5,746 Allstate Life 15,051 14,771 Allstate Benefits 2,905 2,915 Allstate Annuities 27,080 26,914 Corporate and Other 5,603 2,361 Consolidated $ 125,987 $ 119,950 Investments Property-Liability $ 50,134 $ 48,414 Protection Services 1,822 1,544 Allstate Life 12,406 11,914 Allstate Benefits 2,012 1,941 Allstate Annuities 22,291 22,221 Corporate and Other 5,572 2,328 Consolidated $ 94,237 $ 88,362 Deferred policy acquisition costs Property-Liability $ 1,608 $ 1,624 Protection Services 1,696 1,448 Allstate Life 909 1,079 Allstate Benefits 470 527 Allstate Annuities 17 21 Consolidated $ 4,700 $ 4,699 (1) The balances reflect the elimination of related party investments between segments. |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Investments [Abstract] | |
Portfolio composition | Portfolio composition As of December 31, ($ in millions) 2020 2019 Fixed income securities, at fair value $ 66,354 $ 59,044 Equity securities, at fair value 4,710 8,162 Mortgage loans, net 4,075 4,817 Limited partnership interests 7,609 8,078 Short-term investments, at fair value 7,800 4,256 Other, net 3,689 4,005 Total $ 94,237 $ 88,362 |
Schedule of amortized cost, gross unrealized gains (losses) and fair value for fixed income securities | Amortized cost, gross unrealized gains (losses) and fair value for fixed income securities Amortized Gross unrealized Fair value ($ in millions) Gains Losses December 31, 2020 U.S. government and agencies $ 3,129 $ 94 $ (1) $ 3,222 Municipal 8,752 837 (2) 9,587 Corporate 47,226 3,981 (65) 51,142 Foreign government 1,013 42 — 1,055 ABS 1,260 15 (5) 1,270 MBS 71 7 — 78 Total fixed income securities $ 61,451 $ 4,976 $ (73) $ 66,354 December 31, 2019 U.S. government and agencies $ 4,971 $ 141 $ (26) $ 5,086 Municipal 8,080 551 (11) 8,620 Corporate 41,090 2,035 (47) 43,078 Foreign government 968 16 (5) 979 ABS 860 8 (6) 862 MBS 324 96 (1) 419 Total fixed income securities $ 56,293 $ 2,847 $ (96) $ 59,044 |
Schedule for fixed income securities based on contractual maturities | Scheduled maturities for fixed income securities As of December 31, 2020 ($ in millions) Amortized Fair value Due in one year or less $ 3,092 $ 3,136 Due after one year through five years 24,271 25,587 Due after five years through ten years 22,000 24,018 Due after ten years 10,757 12,265 60,120 65,006 ABS and MBS 1,331 1,348 Total $ 61,451 $ 66,354 |
Realized gain (loss) on investments | Net investment income For the years ended December 31, ($ in millions) 2020 2019 2018 Fixed income securities $ 2,136 $ 2,175 $ 2,077 Equity securities 98 206 170 Mortgage loans 220 220 217 Limited partnership interests 338 471 705 Short-term investments 23 102 73 Other 251 262 272 Investment income, before expense 3,066 3,436 3,514 Investment expense (213) (277) (274) Net investment income $ 2,853 $ 3,159 $ 3,240 Gross realized gains (losses) on sales of fixed income securities For the years ended December 31, ($ in millions) 2020 2019 2018 Gross realized gains $ 1,209 $ 607 $ 120 Gross realized losses (221) (132) (347) The following table presents the net pre-tax appreciation (decline) recognized in net income of equity securities and limited partnership interests carried at fair value that are still held as of December 31, 2020 and 2019, respectively. Net appreciation (decline) recognized in net income For the years ended December 31, ($ in millions) 2020 2019 Equity securities $ 478 $ 1,073 Limited partnership interests carried at fair value 250 149 Total $ 728 $ 1,222 |
Schedule of realized capital gains and losses by asset type | Realized capital gains (losses) by asset type For the years ended December 31, ($ in millions) 2020 2019 2018 Fixed income securities $ 983 $ 461 $ (237) Equity securities 346 1,210 (594) Mortgage loans (47) — 2 Limited partnership interests 24 200 (101) Derivatives 53 (15) 46 Other (3) 29 7 Realized capital gains (losses) $ 1,356 $ 1,885 $ (877) |
Schedule of realized capital gains and losses by transaction type | Realized capital gains (losses) by transaction type For the years ended December 31, ($ in millions) 2020 2019 2018 Sales $ 1,017 $ 575 $ (215) Credit losses (1) (80) (47) (14) Valuation of equity investments (2) 366 1,372 (691) Valuation and settlements of derivative instruments 53 (15) 43 Realized capital gains (losses) $ 1,356 $ 1,885 $ (877) (1) Due to the adoption of the measurement of credit losses on financial instruments accounting standard, prior period other-than-temporary impairment write-downs are now presented as credit losses. |
Schedule of other-than-temporary impairment losses by asset type | Credit losses recognized in net income (1) For the years ended December 31, ($ in millions) 2020 2019 2018 Assets Fixed income securities: Corporate $ (1) $ (7) $ (2) ABS (2) (4) (3) MBS (2) (3) (5) Total fixed income securities (5) (14) (10) Mortgage loans (39) — — Limited partnership interests (10) (6) (3) Other investments Bank loans (28) (26) — Agent loans — (1) (1) Total credit losses by asset type $ (82) $ (47) $ (14) Liabilities Commitments to fund commercial mortgage loans, bank loans and agent loans 2 — — Total $ (80) $ (47) $ (14) (1) Due to the adoption of the measurement of credit losses on financial instruments accounting standard, realized capital losses previously reported as other-than-temporary impairment write-downs are now presented as credit losses. |
Schedule of unrealized net capital gains and losses | Unrealized net capital gains and losses included in AOCI ($ in millions) Fair value Gross unrealized Unrealized net gains (losses) December 31, 2020 Gains Losses Fixed income securities $ 66,354 $ 4,976 $ (73) $ 4,903 Short-term investments 7,800 — — — Derivative instruments — — (3) (3) EMA limited partnerships (1) (4) Unrealized net capital gains and losses, pre-tax 4,896 Amounts recognized for: Insurance reserves (2) (496) DAC and DSI (3) (364) Amounts recognized (860) Deferred income taxes (856) Unrealized net capital gains and losses, after-tax $ 3,180 December 31, 2019 Fixed income securities $ 59,044 $ 2,847 $ (96) $ 2,751 Short-term investments 4,256 — — — Derivative instruments — — (3) (3) EMA limited partnerships (4) Unrealized net capital gains and losses, pre-tax 2,744 Amounts recognized for: Insurance reserves (126) DAC and DSI (224) Amounts recognized (350) Deferred income taxes (507) Unrealized net capital gains and losses, after-tax $ 1,887 (1) Unrealized net capital gains and losses for limited partnership interests represent the Company’s share of EMA limited partnerships’ OCI. Fair value and gross unrealized gains and losses are not applicable. (2) The insurance reserves adjustment represents the amount by which the reserve balance would increase if the net unrealized gains in the applicable product portfolios were realized and reinvested at lower interest rates, resulting in a premium deficiency. This adjustment primarily relates to structured settlement annuities with life contingencies (a type of immediate fixed annuity). (3) The DAC and DSI adjustment balance represents the amount by which the amortization of DAC and DSI would increase or decrease if the unrealized gains or losses in the respective product portfolios were realized. |
Schedule of change in unrealized net capital gains and losses | Change in unrealized net capital gains (losses) For the years ended December 31, ($ in millions) 2020 2019 2018 Fixed income securities $ 2,152 $ 2,715 $ (1,431) Short-term investments — — — Derivative instruments — — (2) EMA limited partnerships — (4) (1) Total 2,152 2,711 (1,434) Amounts recognized for: Insurance reserves (370) (126) 315 DAC and DSI (140) (191) 163 Amounts recognized (510) (317) 478 Deferred income taxes (349) (505) 202 Increase (decrease) in unrealized net capital gains and losses, after-tax $ 1,293 $ 1,889 $ (754) Mortgage loans The Company’s mortgage loans are commercial mortgage loans collateralized by a variety of commercial real estate property types located across the United States and totaled $4.08 billion and $4.82 billion, net of credit loss allowance, as of December 31, 2020 and 2019, respectively. Substantially all of the commercial mortgage loans are non-recourse to the borrower. Principal geographic distribution of commercial real estate exceeding 5% of the mortgage loans portfolio As of December 31, (% of mortgage loan portfolio carrying value) 2020 2019 Texas 20.6 % 16.9 % California 14.6 15.1 Florida 6.8 6.4 Illinois 6.1 7.1 North Carolina 5.1 4.5 New Jersey 3.5 5.6 Types of properties collateralizing the mortgage loan portfolio As of December 31, (% of mortgage loan portfolio carrying value) 2020 2019 Apartment complex 37.8 % 36.8 % Office buildings 23.2 22.6 Warehouse 14.6 16.8 Retail 13.9 13.4 Other 10.5 10.4 Total 100.0 % 100.0 % Contractual maturities of the mortgage loan portfolio As of December 31, 2020 ($ in millions) Number of loans Amortized cost, net Percent 2021 28 $ 277 6.8 % 2022 25 388 9.5 2023 42 556 13.7 2024 27 637 15.6 Thereafter 124 2,217 54.4 Total 246 $ 4,075 100.0 % |
Carrying value for limited partnership interests | Carrying value for limited partnership interests As of December 31, 2020 As of December 31, 2019 ($ in millions) EMA Fair Value Total EMA Fair Value Total Private equity $ 4,417 $ 1,708 $ 6,125 $ 4,463 $ 1,668 $ 6,131 Real estate 958 116 1,074 899 142 1,041 Other (1) 410 — 410 902 4 906 Total $ 5,785 $ 1,824 $ 7,609 $ 6,264 $ 1,814 $ 8,078 (1) Other consists of certain limited partnership interests where the underlying assets are predominately public equity and debt securities. |
Principal geographic distribution of municipal bond | Principal geographic distribution of municipal bond issuers exceeding 5% of the portfolio As of December 31, (% of municipal bond portfolio carrying value) 2020 2019 California 12.8 % 8.6 % Texas 11.0 12.7 New York 5.3 3.7 Colorado 4.8 5.8 Washington 4.0 5.5 |
Schedule of other investments, by type | Other investments by asset type As of December 31, ($ in millions) 2020 2019 Bank loans, net $ 1,018 $ 1,204 Real estate 974 1,005 Policy loans 754 894 Agent loans, net 631 666 Derivatives and other 312 236 Total $ 3,689 $ 4,005 |
Allowance for credit loss | Rollforward of credit loss allowance for premium installment receivables ($ in millions) For the year ended December 31, 2020 Beginning balance $ (91) Increase in the provision for credit losses (223) Write-off of uncollectible premium installment receivable amounts 161 Ending balance $ (153) Allowance for credit losses ($ in millions) December 31, 2020 January 1, 2020 Fixed income securities $ 3 $ — Mortgage loans 67 45 Other investments Bank loans 67 53 Agent loans 5 5 Investments 142 103 Premium installment receivables 153 91 Reinsurance recoverables 74 74 Other assets 23 18 Assets 392 286 Commitments to fund mortgage loans, bank loans and agent loans 1 3 Liabilities 1 3 Total $ 393 $ 289 Rollforward of credit loss allowance for fixed income securities For the year ended ($ in millions) December 31, 2020 Beginning balance $ — Credit losses on securities for which credit losses not previously reported (5) Reduction of allowance related to sales 2 Write-offs — Ending balance (1) $ (3) (1) Allowance for fixed income securities as of December 31, 2020 comprised $1 million and $2 million of corporate bonds and ABS, respectively. Rollforward of credit loss allowance for mortgage loans ($ in millions) For the year ended December 31, 2020 Beginning balance $ (3) Cumulative effect of change in accounting principle (42) Net increases related to credit losses (39) Reduction of allowance related to sales 17 Write-offs — Ending balance $ (67) Rollforward of credit loss allowance for bank loans For the year ended December 31, 2020 ($ in millions) Beginning balance $ — Cumulative effect of change in accounting principle (53) Net increases related to credit losses (28) Reduction of allowance related to sales 9 Write-offs 5 Ending balance $ (67) |
Schedule of gross unrealized losses and fair value of available for sale securities by length of time | Gross unrealized losses and fair value by type and length of time held in a continuous unrealized loss position Less than 12 months 12 months or more ($ in millions) Number of issues Fair value Unrealized losses Number of issues Fair value Unrealized losses Total unrealized losses December 31, 2020 Fixed income securities U.S. government and agencies 23 $ 185 $ (1) — $ — $ — $ (1) Municipal 47 148 (2) — — — (2) Corporate 127 1,229 (39) 27 187 (26) (65) Foreign government 7 7 — — — — — ABS 22 160 (2) 13 49 (3) (5) MBS 14 — — 67 — — — Total fixed income securities 240 $ 1,729 $ (44) 107 $ 236 $ (29) $ (73) Investment grade fixed income securities 163 $ 1,193 $ (13) 84 $ 117 $ (17) $ (30) Below investment grade fixed income securities 77 536 (31) 23 119 (12) (43) Total fixed income securities 240 $ 1,729 $ (44) 107 $ 236 $ (29) $ (73) December 31, 2019 Fixed income securities U.S. government and agencies 31 $ 1,713 $ (26) 10 $ 26 $ — $ (26) Municipal 307 576 (9) 1 14 (2) (11) Corporate 186 1,392 (20) 65 485 (27) (47) Foreign government 55 412 (4) 6 102 (1) (5) ABS 36 193 (2) 23 160 (4) (6) MBS 27 15 — 123 14 (1) (1) Total fixed income securities 642 $ 4,301 $ (61) 228 $ 801 $ (35) $ (96) Investment grade fixed income securities 581 $ 3,878 $ (41) 185 $ 594 $ (20) $ (61) Below investment grade fixed income securities 61 423 (20) 43 207 (15) (35) Total fixed income securities 642 $ 4,301 $ (61) 228 $ 801 $ (35) $ (96) |
Carrying value of non-impaired fixed and variable rate mortgage loans by debt service coverage ratio distribution | Gross unrealized losses by unrealized loss position and credit quality as of December 31, 2020 ($ in millions) Investment grade Below investment grade Total Fixed income securities with unrealized loss position less than 20% of amortized cost, net (1) (2) $ (15) $ (24) $ (39) Fixed income securities with unrealized loss position greater than or equal to 20% of amortized cost, net (3) (4) (15) (19) (34) Total unrealized losses $ (30) $ (43) $ (73) (1) Below investment grade fixed income securities include $17 million that have been in an unrealized loss position for less than twelve months. (2) Related to securities with an unrealized loss position less than 20% of amortized cost, net, the degree of which suggests that these securities do not pose a high risk of having credit losses. (3) No below investment grade fixed income securities have been in an unrealized loss position for a period of twelve or more consecutive months. (4) Evaluated based on factors such as discounted cash flows and the financial condition and near-term and long-term prospects of the issue or issuer and were determined to have adequate resources to fulfill contractual obligations Mortgage loans amortized cost by debt service coverage ratio distribution and year of origination December 31, 2020 December 31, 2019 ($ in millions) 2015 and prior 2016 2017 2018 2019 Current Total Total Below 1.0 $ 15 $ — $ — $ — $ — $ — $ 15 $ 56 1.0 - 1.25 133 27 36 70 48 24 338 225 1.26 - 1.50 378 41 144 187 333 6 1,089 1,237 Above 1.50 1,037 396 283 373 499 112 2,700 3,302 Amortized cost before allowance $ 1,563 $ 464 $ 463 $ 630 $ 880 $ 142 $ 4,142 $ 4,820 Allowance (1) (67) (3) Amortized cost, net $ 4,075 $ 4,817 (1) Due to the adoption of the measurement of credit losses on financial instruments accounting standard, prior valuation allowance is now presented as an allowance for expected credit losses. |
Bank loans amortized cost by credit quality and year of origination | Bank loans amortized cost by credit rating and year of origination ($ in millions) As of December 31, 2020 2015 and prior 2016 2017 2018 2019 Current Total BBB $ — $ — $ 9 $ 7 $ 14 $ 13 $ 43 BB 20 2 25 58 53 54 212 B 11 23 115 141 122 195 607 CCC and below 7 16 44 50 74 32 223 Amortized cost before allowance $ 38 $ 41 $ 193 $ 256 $ 263 $ 294 $ 1,085 Allowance (67) Amortized cost, net $ 1,018 |
Fair Value of Assets and Liab_2
Fair Value of Assets and Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of assets and liabilities that are measured at fair value on a recurring and non-recurring basis | Assets and liabilities measured at fair value As of December 31, 2020 ($ in millions) Quoted prices in active markets for identical assets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Counterparty and cash collateral netting Total Assets Fixed income securities: U.S. government and agencies $ 2,863 $ 359 $ — $ 3,222 Municipal — 9,520 67 9,587 Corporate - public — 36,346 98 36,444 Corporate - privately placed — 14,568 130 14,698 Foreign government — 1,055 — 1,055 ABS — 1,213 57 1,270 MBS — 51 27 78 Total fixed income securities 2,863 63,112 379 66,354 Equity securities 3,882 410 418 4,710 Short-term investments 7,477 288 35 7,800 Other investments: Free-standing derivatives — 219 — $ (15) 204 Separate account assets 3,344 — — 3,344 Other assets 1 — — 1 Total recurring basis assets 17,567 64,029 832 (15) 82,413 Total assets at fair value $ 17,567 $ 64,029 $ 832 $ (15) $ 82,413 % of total assets at fair value 21.3 % 77.7 % 1.0 % — % 100.0 % Investments reported at NAV 1,824 Total $ 84,237 Liabilities Contractholder funds: Derivatives embedded in life and annuity contracts $ — $ — $ (516) $ (516) Other liabilities: Free-standing derivatives — (153) — $ 27 (126) Total recurring basis liabilities $ — $ (153) $ (516) $ 27 $ (642) % of total liabilities at fair value — % 23.8 % 80.4 % (4.2) % 100.0 % Assets and liabilities measured at fair value As of December 31, 2019 ($ in millions) Quoted prices in active markets for identical assets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Counterparty and cash collateral netting Total Assets Fixed income securities: U.S. government and agencies $ 4,689 $ 397 $ — $ 5,086 Municipal — 8,558 62 8,620 Corporate - public — 30,819 61 30,880 Corporate - privately placed — 12,084 114 12,198 Foreign government — 979 — 979 ABS — 797 65 862 MBS — 379 40 419 Total fixed income securities 4,689 54,013 342 59,044 Equity securities 7,407 384 371 8,162 Short-term investments 1,940 2,291 25 4,256 Other investments: Free-standing derivatives — 180 — $ (40) 140 Separate account assets 3,044 — — 3,044 Other assets 1 — — 1 Total recurring basis assets 17,081 56,868 738 (40) 74,647 Total assets at fair value $ 17,081 $ 56,868 $ 738 $ (40) $ 74,647 % of total assets at fair value 22.9 % 76.2 % 1.0 % (0.1) % 100.0 % Investments reported at NAV 1,814 Total $ 76,461 Liabilities Contractholder funds: Derivatives embedded in life and annuity contracts $ — $ — $ (462) $ (462) Other liabilities: Free-standing derivatives — (84) — $ 12 (72) Total recurring basis liabilities $ — $ (84) $ (462) $ 12 $ (534) % of total liabilities at fair value — % 15.7 % 86.5 % (2.2) % 100.0 % |
Summary of quantitative information about the significant unobservable inputs | Quantitative information about the significant unobservable inputs used in Level 3 fair value measurements ($ in millions) Fair value Valuation technique Unobservable input Range Weighted average December 31, 2020 Derivatives embedded in life and annuity contracts – Equity-indexed and forward starting options $ (483) Stochastic cash flow model Projected option cost 1.0% - 4.2% 2.80% December 31, 2019 Derivatives embedded in life and annuity contracts – Equity-indexed and forward starting options $ (430) Stochastic cash flow model Projected option cost 1.0% - 4.2% 2.67% |
Schedule of the rollforward of Level 3 assets and liabilities held at fair value on a recurring basis | Rollforward of Level 3 assets and liabilities held at fair value during the year ended December 31, 2020 Balance as of December 31, 2019 Total gains (losses) included in: Transfers Balance as of December 31, 2020 ($ in millions) Net income OCI Into Level 3 Out of Level 3 Purchases Sales Issues Settlements Assets Fixed income securities: Municipal $ 62 $ 1 $ 2 $ 20 $ (11) $ — $ (4) $ — $ (3) $ 67 Corporate - public 61 (1) 1 2 — 55 (19) — (1) 98 Corporate - privately placed 114 2 (12) 52 (31) 25 (17) — (3) 130 ABS 65 — (1) 54 (49) 48 (32) — (28) 57 MBS 40 1 (2) — — 11 (7) — (16) 27 Total fixed income securities 342 3 (12) 128 (91) 139 (79) — (51) 379 Equity securities 371 (3) — — — 66 (16) — — 418 Short-term investments 25 — — — (25) 35 — — — 35 Total recurring Level 3 assets 738 — (12) 128 (116) 240 (95) — (51) 832 Liabilities Contractholder funds: Derivatives embedded in life and annuity contracts (462) (43) — — — — — (34) 23 (516) Total recurring Level 3 liabilities $ (462) $ (43) $ — $ — $ — $ — $ — $ (34) $ 23 $ (516) Total Level 3 gains (losses) included in net income for the year ended December 31, 2020 ($ in millions) Net investment income Realized capital gains (losses) Life contract benefits Interest credited to contractholder funds Total Components of net income $ (23) $ 23 $ (1) $ (42) $ (43) Rollforward of Level 3 assets and liabilities held at fair value during the year ended December 31, 2019 Balance as of December 31, 2018 Total gains (losses) included in: Transfers Balance as of December 31, 2019 ($ in millions) Net income OCI Into Out of Level 3 Purchases Sales Issues Settlements Assets Fixed income securities: Municipal $ 70 $ 1 $ 4 $ — $ (5) $ — $ (5) $ — $ (3) $ 62 Corporate - public 70 — 3 30 (113) 86 (11) — (4) 61 Corporate - privately placed 90 (1) 2 43 (2) 4 (13) — (9) 114 ABS 69 1 (1) 76 (210) 159 (22) — (7) 65 MBS 26 — (2) 9 — 9 — — (2) 40 Total fixed income securities 325 1 6 158 (330) 258 (51) — (25) 342 Equity securities 341 30 — — — 82 (82) — — 371 Short-term investments 30 — — — — 35 (40) — — 25 Free-standing derivatives, net 1 (1) — — — — — — — — Total recurring Level 3 assets 697 30 6 158 (330) 375 (173) — (25) 738 Liabilities Contractholder funds: Derivatives embedded in life and annuity contracts (224) (61) — (175) — — — (16) 14 (462) Total recurring Level 3 liabilities $ (224) $ (61) $ — $ (175) $ — $ — $ — $ (16) $ 14 $ (462) Total Level 3 gains (losses) included in net income for the year ended December 31, 2019 ($ in millions) Net investment income Realized capital gains (losses) Life contract benefits Interest credited to contractholder funds Total Components of net income $ (2) $ 32 $ 7 $ (68) $ (31) Rollforward of Level 3 assets and liabilities held at fair value during the year ended December 31, 2018 Balance as of December 31, 2017 Total gains (losses) included in: Transfers Balance as of December 31, 2018 ($ in millions) Net income OCI Into Out of Level 3 Purchases Sales Issues Settlements Assets Fixed income securities: Municipal $ 101 $ 1 $ (2) $ — $ (26) $ 10 $ (8) $ — $ (6) $ 70 Corporate - public 108 — (3) 17 (21) 10 (38) — (3) 70 Corporate - privately placed 224 (1) (3) 20 (119) 22 (5) — (48) 90 ABS 147 — 2 42 (159) 160 (97) — (26) 69 MBS 26 — — — — 1 — — (1) 26 Total fixed income securities 606 — (6) 79 (325) 203 (148) — (84) 325 Equity securities 210 37 — — — 109 (15) — — 341 Short-term investments 20 — — — — 55 (45) — — 30 Free-standing derivatives, net 1 — — — — — — — — 1 Total recurring Level 3 assets 837 37 (6) 79 (325) 367 (208) — (84) 697 Liabilities Contractholder funds: Derivatives embedded in life and annuity contracts (286) 58 — — — — — (2) 6 (224) Total recurring Level 3 liabilities $ (286) $ 58 $ — $ — $ — $ — $ — $ (2) $ 6 $ (224) Total Level 3 gains (losses) included in net income for the year ended December 31, 2018 ($ in millions) Net investment income Realized capital gains (losses) Life contract benefits Interest credited to contractholder funds Total Components of net income $ — $ 37 $ (5) $ 63 $ 95 |
Schedule of gains and losses included in net income for Level 3 assets and liabilities still held at the balance sheet date | Valuation changes included in net income and OCI for Level 3 assets and liabilities held as of December 31, ($ in millions) 2020 2019 2018 Assets Fixed income securities: Municipal $ 1 $ 1 $ — Corporate - public (2) — — Corporate - privately placed 2 — — Total fixed income securities 1 1 — Equity securities (3) 6 36 Free-standing derivatives, net — (1) — Total recurring Level 3 assets $ (2) $ 6 $ 36 Liabilities Contractholder funds: Derivatives embedded in life and annuity contracts $ (43) $ (61) $ 58 Total recurring Level 3 liabilities (43) (61) 58 Total included in net income $ (45) $ (55) $ 94 Components of net income Net investment income $ (24) $ (2) $ — Realized capital gains (losses) 22 8 36 Life contract benefits (1) 7 (5) Interest credited to contractholder funds (42) (68) 63 Total included in net income $ (45) $ (55) $ 94 Assets Municipal $ 2 Corporate - public 1 Corporate - privately placed (11) ABS (1) Changes in unrealized net capital gains and losses reported in OCI (1) $ (9) |
Schedule of carrying values and fair value estimates of financial instruments not carried at fair value | Financial instruments not carried at fair value ($ in millions) December 31, 2020 December 31, 2019 Financial assets Fair value level Amortized cost, net Fair value Amortized cost, net Fair value Mortgage loans Level 3 $ 4,075 $ 4,348 $ 4,817 $ 5,012 Bank loans Level 3 1,018 1,053 1,204 1,185 Agent loans Level 3 631 634 666 664 Financial liabilities Fair value level Carrying value (1) Fair value Carrying value (1) Fair value Contractholder funds on investment contracts Level 3 $ 7,795 $ 9,089 $ 8,438 $ 9,158 Long-term debt Level 2 7,825 9,489 6,631 7,738 Liability for collateral Level 2 1,249 1,249 1,829 1,829 (1) Represents the amounts reported on the Consolidated Statements of Financial Position . |
Derivative Financial Instrume_2
Derivative Financial Instruments and Off-balance sheet Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Derivative Financial Instruments and Off-balance sheet Financial Instruments | |
Volume and fair value positions of derivative instruments and location in the Consolidated Statement of Financial Position | Summary of the volume and fair value positions of derivative instruments as of December 31, 2020 Volume (1) ($ in millions, except number of contracts) Balance sheet location Notional amount Number of contracts Fair value, net Gross asset Gross liability Asset derivatives Derivatives designated as fair value accounting hedging instruments Other Other assets $ 3 n/a $ — $ — $ — Derivatives not designated as accounting hedging instruments Interest rate contracts Interest rate cap agreements Other investments 13 n/a — — — Futures Other assets n/a 602 — — — Equity and index contracts Options Other investments n/a 2,887 190 190 — Futures Other assets n/a 951 1 1 — Total return index contracts Total return swap agreements - equity index Other investments 8 n/a 1 1 — Foreign currency contracts Foreign currency forwards Other investments 404 n/a 5 13 (8) Embedded derivative financial instruments Other embedded derivative financial instruments Other investments 750 n/a — — — Credit default contracts Credit default swaps – buying protection Other investments 77 n/a (4) — (4) Credit default swaps – selling protection Other investments 754 n/a 13 13 — Subtotal 2,006 4,440 206 218 (12) Total asset derivatives $ 2,009 4,440 $ 206 $ 218 $ (12) Liability derivatives Derivatives not designated as accounting hedging instruments Interest rate contracts Interest rate cap agreements Other liabilities & accrued expenses $ 19 n/a $ — $ — $ — Futures Other liabilities & accrued expenses n/a 730 — — — Equity and index contracts Options Other liabilities & accrued expenses n/a 2,712 (110) — (110) Futures Other liabilities & accrued expenses n/a 666 — — — Total return index contracts Total return swap agreements - fixed income Other liabilities & accrued expenses 50 n/a — — — Foreign currency contracts Foreign currency forwards Other liabilities & accrued expenses 367 n/a (13) 2 (15) Embedded derivative financial instruments Guaranteed accumulation benefits Contractholder funds 128 n/a (18) — (18) Guaranteed withdrawal benefits Contractholder funds 190 n/a (15) — (15) Equity-indexed and forward starting options in life and annuity product contracts Contractholder funds 1,785 n/a (483) — (483) Credit default contracts Credit default swaps – buying protection Other liabilities & accrued expenses 638 n/a (16) — (16) Credit default swaps – selling protection Other liabilities & accrued expenses 5 n/a — — — Total liability derivatives 3,182 4,108 (655) $ 2 $ (657) Total derivatives $ 5,191 8,548 $ (449) (1) Volume for OTC and cleared derivative contracts is represented by their notional amounts. Volume for exchange traded derivatives is represented by the number of contracts, which is the basis on which they are traded. (n/a = not applicable) Summary of the volume and fair value positions of derivative instruments as of December 31, 2019 Volume ($ in millions, except number of contracts) Balance sheet location Notional amount Number of contracts Fair value, net Gross asset Gross liability Asset derivatives Derivatives designated as fair value accounting hedging instruments Other Other assets $ 2 n/a $ — $ — $ — Derivatives not designated as accounting hedging instruments Interest rate contracts Futures Other assets n/a 3,668 — — — Equity and index contracts Options Other investments n/a 5,539 140 140 — Futures Other assets n/a 1,533 1 1 — Total return index contracts Total return swap agreements - fixed income Other investments 56 n/a 1 1 — Credit default contracts Credit default swaps – buying protection Other investments 17 n/a — — — Subtotal 73 10,740 142 142 — Total asset derivatives $ 75 10,740 $ 142 $ 142 $ — Liability derivatives Derivatives not designated as accounting hedging instruments Interest rate contracts Interest rate cap agreements Other liabilities & accrued expenses $ 34 n/a $ — $ — $ — Futures Other liabilities & accrued expenses n/a 1,089 — — — Equity and index contracts Options Other liabilities & accrued expenses n/a 5,400 (68) — (68) Futures Other liabilities & accrued expenses n/a 3 — — — Total return index contracts Total return swap agreements - fixed income Other liabilities & accrued expenses 119 n/a — — — Total return swap agreements - equity index Other liabilities & accrued expenses 187 n/a 11 11 — Foreign currency contracts Foreign currency forwards Other liabilities & accrued expenses 745 n/a 19 28 (9) Embedded derivative financial instruments Guaranteed accumulation benefits Contractholder funds 161 n/a (18) — (18) Guaranteed withdrawal benefits Contractholder funds 205 n/a (14) — (14) Equity-indexed and forward starting options in life and annuity product contracts Contractholder funds 1,791 n/a (430) — (430) Credit default contracts Credit default swaps – buying protection Other liabilities & accrued expenses 152 n/a (7) — (7) Credit default swaps – selling protection Other liabilities & accrued expenses 9 n/a — — — Total liability derivatives 3,403 6,492 (507) $ 39 $ (546) Total derivatives $ 3,478 17,232 $ (365) |
Schedule of gross and net amount for the Company's OTC derivatives subject to enforceable master netting arrangements | Gross and net amounts for OTC derivatives (1) Offsets ($ in millions) Gross amount Counter- party netting Cash collateral (received) pledged Net amount on balance sheet Securities collateral (received) pledged Net amount December 31, 2020 Asset derivatives $ 16 $ (14) $ (1) $ 1 $ — $ 1 Liability derivatives (28) 14 13 (1) — (1) December 31, 2019 Asset derivatives $ 40 $ (39) $ (1) $ — $ — $ — Liability derivatives (16) 39 (27) (4) — (4) |
Gains and losses from valuation, settlements, and hedge ineffectiveness, fair value hedges and derivatives not designated as hedges | Gains (losses) from valuation and settlements reported on derivatives not designated as accounting hedges ($ in millions) Realized capital gains (losses) Life contract benefits Interest credited to contractholder funds Operating costs and expenses Total gain (loss) recognized in net income on derivatives 2020 Interest rate contracts $ 40 $ — $ — $ — $ 40 Equity and index contracts 21 — 22 29 72 Embedded derivative financial instruments — (1) (53) — (54) Foreign currency contracts (20) — — — (20) Credit default contracts 7 — — — 7 Total return swaps - fixed income 1 — — — 1 Total return swaps - equity index 4 — — — 4 Total $ 53 $ (1) $ (31) $ 29 $ 50 2019 Interest rate contracts $ 51 $ — $ — $ — $ 51 Equity and index contracts (116) — 63 40 (13) Embedded derivative financial instruments — 7 (70) — (63) Foreign currency contracts 8 — — — 8 Credit default contracts (8) — — — (8) Total return swaps - fixed income 14 — — — 14 Total return swaps - equity index 36 — — — 36 Total $ (15) $ 7 $ (7) $ 40 $ 25 2018 Interest rate contracts $ (2) $ — $ — $ — $ (2) Equity and index contracts 21 — (24) (21) (24) Embedded derivative financial instruments — (5) 67 — 62 Foreign currency contracts 29 — — (1) 28 Credit default contracts 2 — — — 2 Total return swaps - fixed income (1) — — — (1) Total return swaps - equity (6) — — — (6) Total $ 43 $ (5) $ 43 $ (22) $ 59 |
Counterparty credit exposure by counterparty credit rating | OTC derivatives counterparty credit exposure by counterparty credit rating ($ in millions) 2020 2019 Rating (1) Number of counter-parties Notional amount (2) Credit exposure (2) Exposure, net of collateral (2) Number of counter-parties Notional amount (2) Credit exposure (2) Exposure, net of collateral (2) A+ 3 $ 280 $ 7 $ — 6 $ 868 $ 29 $ — Total 3 $ 280 $ 7 $ — 6 $ 868 $ 29 $ — (1) Allstate uses the lower of S&P’s or Moody’s long-term debt issuer ratings. (2) Only OTC derivatives with a net positive fair value are included for each counterparty. |
Derivative instruments with credit features in a liability position, including fair value of assets and collateral netted against the liability | ($ in millions) 2020 2019 Gross liability fair value of contracts containing credit-risk-contingent features $ 27 $ 16 Gross asset fair value of contracts containing credit-risk-contingent features and subject to MNAs (9) (11) Collateral posted under MNAs for contracts containing credit-risk-contingent features (17) (3) Maximum amount of additional exposure for contracts with credit-risk-contingent features if all features were triggered concurrently $ 1 $ 2 |
Schedule of derivative CDS notional amount by credit rating and fair value of protection sold | CDS notional amounts by credit rating and fair value of protection sold Notional amount ($ in millions) AAA AA A BBB BB and lower Total Fair value December 31, 2020 Single name Corporate debt $ — $ — $ — $ — $ 9 $ 9 $ — Index Corporate debt 6 12 156 492 84 750 13 Total $ 6 $ 12 $ 156 $ 492 $ 93 $ 759 $ 13 December 31, 2019 Single name Corporate debt $ — $ — $ — $ — $ 9 $ 9 $ — Total $ — $ — $ — $ — $ 9 $ 9 $ — |
Contractual amounts of off-balance-sheet financial instruments | Contractual amounts of off-balance sheet financial instruments As of December 31, ($ in millions) 2020 2019 Commitments to invest in limited partnership interests $ 2,933 $ 2,837 Private placement commitments 36 68 Other loan commitments 92 189 |
Reserve for Property and Casu_2
Reserve for Property and Casualty Insurance Claims and Claims Expense (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Reserve for Property-Liability Insurance Claims and Claims Expense | |
Activity in the reserve for property-liability insurance claims and claims expense | Rollforward of reserve for property and casualty insurance claims and claims expense ($ in millions) 2020 2019 2018 Balance as of January 1 $ 27,712 $ 27,423 $ 26,325 Less recoverables (1) (6,912) (7,155) (6,471) Net balance as of January 1 20,800 20,268 19,854 Incurred claims and claims expense related to: Current year 22,437 24,106 23,033 Prior years (436) (130) (255) Total incurred 22,001 23,976 22,778 Claims and claims expense paid related to: Current year (14,245) (15,160) (14,877) Prior years (7,979) (8,284) (7,487) Total paid (22,224) (23,444) (22,364) Net balance as of December 31 20,577 20,800 20,268 Plus recoverables 7,033 6,912 7,155 Balance as of December 31 $ 27,610 $ 27,712 $ 27,423 (1) Recoverables comprises reinsurance and indemnification recoverables. See Note 10 for further details. Reconciliation of total claims and claims expense incurred and paid by coverage December 31, 2020 ($ in millions) Incurred Paid Allstate Protection Auto insurance - liability coverage $ 7,629 $ (7,939) Auto insurance - physical damage coverage 4,817 (4,716) Homeowners insurance 4,889 (4,731) Total auto and homeowners insurance 17,335 (17,386) Other personal lines 1,015 (1,007) Commercial lines 585 (463) Protection Services 319 (326) Discontinued Lines and Coverages 132 (88) Unallocated loss adjustment expenses (“ULAE”) 2,681 (2,590) Claims incurred and paid from before 2016 (32) (423) Other (34) 59 Total $ 22,001 $ (22,224) Prior year reserve reestimates included in claims and claims expense (1) Twelve months ended December 31, ($ in millions) Non-catastrophe losses Catastrophe losses Total 2020 2019 2018 2020 2019 2018 2020 2019 2018 Auto $ (63) $ (306) $ (416) $ (44) $ (17) $ (39) $ (107) $ (323) $ (455) Homeowners (17) (1) (51) (422) 66 65 (439) 65 14 Other personal lines (27) 8 (6) (39) — (1) (66) 8 (7) Commercial lines 34 18 108 2 (1) — 36 17 108 Discontinued Lines and Coverages (2) 141 105 87 — — — 141 105 87 Protection Services (1) (2) (2) — — — (1) (2) (2) Total prior year reserve reestimates $ 67 $ (178) $ (280) $ (503) $ 48 $ 25 $ (436) $ (130) $ (255) (1) Favorable reserve reestimates are shown in parentheses. (2) The Company’s 2020 annual reserve review, using established industry and actuarial best practices, resulted in unfavorable reestimates of $132 million. Reserves for asbestos, environmental and other discontinued lines claims before and after the effects of reinsurance ($ in millions) December 31, 2020 December 31, 2019 Asbestos claims (1) Gross reserves $ 1,204 $ 1,172 Reinsurance (377) (362) Net reserves 827 810 Environmental claims (1) Gross reserves 249 219 Reinsurance (43) (40) Net reserves 206 179 Other discontinued lines Gross reserves 435 427 Reinsurance (60) (51) Net reserves 375 376 Total Gross reserves 1,888 1,818 Reinsurance (480) (453) Net reserves $ 1,408 $ 1,365 (1) For further discussion of asbestos and environmental reserves, see Note 14. |
Short-duration insurance contracts, claims development | The information about incurred and paid claims development for the 2016 to 2020 years, and the average annual percentage payout of incurred claims by age as of December 31, 2020, is presented as required supplementary information. Auto insurance – liability coverage ($ in millions, except number of reported claims) Incurred claims and allocated claim adjustment expenses, net of recoverables IBNR reserves plus expected development on reported claims Cumulative number of reported claims For the years ended December 31, Prior year reserve reestimates As of December 31, 2020 (unaudited) (unaudited) (unaudited) (unaudited) Accident year 2016 2017 2018 2019 2020 2016 $ 9,038 $ 8,841 $ 8,740 $ 8,690 $ 8,709 $ 19 $ 554 2,400,904 2017 — 8,465 8,396 8,312 8,330 18 1,017 2,217,132 2018 — — 8,734 8,715 8,731 16 1,846 2,180,275 2019 — — — 9,341 9,295 (46) 3,064 2,205,813 2020 — — — — 7,622 4,919 1,500,921 Total $ 42,687 $ 7 Reconciliation to total prior year reserve reestimates recognized by line Prior year reserve reestimates for pre-2016 accident years (20) Prior year reserve reestimates for ULAE 23 Other (3) Total prior year reserve reestimates $ 7 Cumulative paid claims and allocated claims adjustment expenses, net of recoverables For the years ended December 31, (unaudited) (unaudited) (unaudited) (unaudited) Accident year 2016 2017 2018 2019 2020 2016 $ 3,487 $ 5,772 $ 6,853 $ 7,700 $ 8,155 2017 — 3,151 5,333 6,532 7,313 2018 — — 3,231 5,618 6,885 2019 — — — 3,498 6,231 2020 — — — — 2,703 Total $ 31,287 All outstanding liabilities before 2016, net of recoverables 1,389 Liabilities for claims and claim adjustment expenses, net of recoverables $ 12,789 Auto insurance – physical damage coverage ($ in millions, except number of reported claims) Incurred claims and allocated claim adjustment expenses, net of recoverables IBNR reserves plus expected development on reported claims Cumulative number of reported claims For the years ended December 31, Prior year reserve reestimates As of December 31, 2020 (unaudited) (unaudited) (unaudited) (unaudited) Accident year 2016 2017 2018 2019 2020 2016 $ 5,128 $ 5,054 $ 5,027 $ 5,023 $ 5,022 $ (1) $ 5 4,432,048 2017 — 5,121 5,039 5,028 5,027 (1) 1 4,237,772 2018 — — 5,219 5,157 5,108 (49) 9 4,310,750 2019 — — — 5,662 5,606 (56) 26 4,469,473 2020 — — — — 4,924 324 3,493,530 Total $ 25,687 $ (107) Reconciliation to total prior year reserve reestimates recognized by line Prior year reserve reestimates for pre-2016 accident years (1) Prior year reserve reestimates for ULAE (5) Other (1) Total prior year reserve reestimates $ (114) Cumulative paid claims and allocated claims adjustment expenses, net of recoverables For the years ended December 31, (unaudited) (unaudited) (unaudited) (unaudited) Accident year 2016 2017 2018 2019 2020 2016 $ 4,890 $ 5,033 $ 5,022 $ 5,018 $ 5,017 2017 — 4,847 5,039 5,030 5,026 2018 — — 4,971 5,140 5,099 2019 — — — 5,418 5,580 2020 — — — — 4,600 Total $ 25,322 All outstanding liabilities before 2016, net of recoverables 8 Liabilities for claims and claim adjustment expenses, net of recoverables $ 373 Homeowners insurance ($ in millions, except number of reported claims) Incurred claims and allocated claim adjustment expenses, net of recoverables IBNR reserves plus expected development on reported claims Cumulative number of reported claims For the years ended December 31, Prior year reserve reestimates As of December 31, 2020 (unaudited) (unaudited) (unaudited) (unaudited) Accident year 2016 2017 2018 2019 2020 2016 $ 3,961 $ 3,995 $ 3,958 $ 3,953 $ 3,948 $ (5) $ 43 814,026 2017 — 4,477 4,619 4,614 4,390 (224) 61 908,714 2018 — — 4,749 4,854 4,551 (303) 182 811,046 2019 — — — 4,549 4,601 52 301 784,257 2020 — — — — 5,369 1,398 838,829 Total $ 22,859 $ (480) Reconciliation to total prior year reserve reestimates recognized by line Prior year reserve reestimates for pre-2016 accident years (11) Prior year reserve reestimates for ULAE 52 Other — Total prior year reserve reestimates $ (439) Cumulative paid claims and allocated claims adjustment expenses, net of recoverables For the years ended December 31, (unaudited) (unaudited) (unaudited) (unaudited) Accident year 2016 2017 2018 2019 2020 2016 $ 2,949 $ 3,680 $ 3,811 $ 3,876 $ 3,905 2017 — 3,228 4,249 4,437 4,329 2018 — — 3,491 4,514 4,369 2019 — — — 3,316 4,300 2020 — — — — 3,971 Total $ 20,874 All outstanding liabilities before 2016, net of recoverables 119 Liabilities for claims and claim adjustment expenses, net of recoverables $ 2,104 |
Average annual percentage payout of incurred claims by age, net of reinsurance | Average annual percentage payout of incurred claims by age, net of recoverables, as of December 31, 2020 1 year 2 years 3 years 4 years 5 years Auto insurance – liability coverage 39.4 % 27.5 % 13.1 % 8.4 % 4.9 % Average annual percentage payout of incurred claims by age, net of recoverables, as of December 31, 2020 1 year 2 years 3 years 4 years 5 years Auto insurance – p hysical damage coverage 96.9 % 3.0 % (0.3) % (0.1) % — % Average annual percentage payout of incurred claims by age, net of recoverables, as of December 31, 2020 1 year 2 years 3 years 4 years 5 years Homeowners insurance 75.2 % 19.4 % 2.5 % 0.9 % 0.7 % |
Reconciliation of the net incurred claims and claims expense development | Reconciliation of the net incurred and paid claims development tables above to the reserve for property and casualty insurance claims and claims expense ($ in millions) As of December 31, 2020 Net outstanding liabilities Allstate Protection Auto insurance - liability coverage $ 12,789 Auto insurance - physical damage coverage 373 Homeowners insurance 2,104 Other personal lines 1,335 Commercial lines 1,132 Protection Services 30 Discontinued Lines and Coverages (1) 1,330 ULAE 1,484 Net reserve for property and casualty insurance claims and claims expense 20,577 Recoverables Allstate Protection Auto insurance - liability coverage 5,979 Auto insurance - physical damage coverage 4 Homeowners insurance 171 Other personal lines 153 Commercial lines 196 Protection Services 10 Discontinued Lines and Coverages 479 ULAE 41 Total recoverables 7,033 Gross reserve for property and casualty insurance claims and claims expense $ 27,610 (1) Discontinued Lines and Coverages includes business in run-off with most of the claims related to accident years more than 30 years ago. IBNR reserves represent $695 million of the total reserves as of December 31, 2020. |
Reserve for Life-Contingent C_2
Reserve for Life-Contingent Contract Benefits and Contractholder Funds (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Reserve for Life-Contingent Contract Benefits and Contractholder Funds | |
Reserve for life-contingent contract benefits | Reserve for life-contingent contract benefits As of December 31, ($ in millions) 2020 2019 Immediate fixed annuities: Structured settlement annuities $ 7,407 $ 6,840 Other immediate fixed annuities 1,511 1,612 Traditional life insurance 2,942 2,897 Accident and health insurance 841 873 Other 67 78 Total reserve for life-contingent contract benefits $ 12,768 $ 12,300 |
Key assumptions generally used in calculating the reserve for life-contingent contract benefits | Key assumptions generally used in calculating the reserve for life-contingent contract benefits Product Mortality Interest rate Estimation method Structured settlement annuities Actual company experience with projected calendar year improvements 4.7% Present value of contractually specified future benefits and expenses Other immediate fixed annuities Actual company experience with projected calendar year improvements 4.7% Present value of expected future benefits and expenses Traditional life insurance Actual company experience plus loading Interest rate assumptions range from 2.5% to 11.3% Net level premium reserve method using the Company’s withdrawal experience rates; includes reserves for unpaid claims Accident and health insurance Actual company experience plus loading Interest rate assumptions range from 3.0% to 7.0% Unearned premium; additional contract reserves for mortality risk and unpaid claims Other: Variable annuity guaranteed minimum death benefits (1) Annuity 2012 mortality table with internal modifications Interest rate assumptions range from 1.4% to 5.8% Projected benefit ratio applied to cumulative assessments (1) In 2006, the Company disposed of substantially all of its variable annuity business through reinsurance agreements with The Prudential Insurance Company of America, a subsidiary of Prudential Financial, Inc. (collectively “Prudential”). |
Contractholder funds | Contractholder funds As of December 31, ($ in millions) 2020 2019 Interest-sensitive life insurance $ 8,493 $ 8,384 Investment contracts: Fixed annuities 8,196 8,845 Other investment contracts 524 463 Total contractholder funds $ 17,213 $ 17,692 |
Key contract provisions relating to contractholder funds | Key contract provisions of contractholder funds Product Interest rate Withdrawal/surrender charges Interest-sensitive life insurance Interest rates credited range from 0.0% to 9.0% for equity-indexed life (whose returns are indexed to the S&P 500) and 1.0% to 6.0% for all other products Either a percentage of account balance or dollar amount grading off generally over 20 years Fixed annuities Interest rates credited range from 0.5% to 7.5% for immediate annuities; (8.0)% to 9.0% for equity-indexed annuities (whose returns are indexed to the S&P 500); and 0.1% to 5.0% for all other products Either a declining or a level percentage charge generally over ten years or less. Additionally, approximately 11.0% of fixed annuities are subject to market value adjustment for discretionary withdrawals Other investment contracts: Guaranteed minimum income, accumulation and withdrawal benefits on variable (1) and fixed annuities and secondary guarantees on interest-sensitive life insurance and fixed annuities Interest rates used in establishing reserves range from 1.7% to 10.3% Withdrawal and surrender charges are based on the terms of the related interest-sensitive life insurance or fixed annuity contract (1) In 2006, the Company disposed of substantially all of its variable annuity business through reinsurance agreements with Prudential. |
Contractholder funds activity | Contractholder funds activity For the years ended December 31, ($ in millions) 2020 2019 2018 Balance, beginning of year $ 17,692 $ 18,371 $ 19,434 Deposits 1,062 1,091 1,109 Interest credited 633 636 650 Benefits (775) (791) (844) Surrenders and partial withdrawals (728) (884) (1,135) Contract charges (836) (825) (824) Net transfers from separate accounts 5 10 6 Other adjustments 160 84 (25) Balance, end of year $ 17,213 $ 17,692 $ 18,371 |
Variable annuity contracts with guarantees | The table below presents information regarding the Company’s variable annuity contracts with guarantees. The Company’s variable annuity contracts may offer more than one type of guarantee in each contract; therefore, the sum of amounts listed exceeds the total account balances of variable annuity contracts’ separate accounts with guarantees. ($ in millions) As of December 31, 2020 2019 In the event of death Separate account value $ 3,197 $ 2,928 Net amount at risk (1) $ 308 $ 373 Average attained age of contractholders 72 years 71 years At annuitization (includes income benefit guarantees) Separate account value $ 925 $ 848 Net amount at risk (2) $ 140 $ 173 Weighted average waiting period until annuitization options available None None For cumulative periodic withdrawals Separate account value $ 178 $ 190 Net amount at risk (3) $ 12 $ 13 Accumulation at specified dates Separate account value $ 93 $ 123 Net amount at risk (4) $ 11 $ 15 Weighted average waiting period until guarantee date 3 years 4 years (1) Defined as the estimated current guaranteed minimum death benefit in excess of the current account balance as of the balance sheet date. (2) Defined as the estimated present value of the guaranteed minimum annuity payments in excess of the current account balance. (3) Defined as the estimated current guaranteed minimum withdrawal balance (initial deposit) in excess of the current account balance as of the balance sheet date. (4) Defined as the estimated present value of the guaranteed minimum accumulation balance in excess of the current account balance. |
Liabilities for guarantees | Summary of liabilities for guarantees ($ in millions) Liability for guarantees related to death benefits and interest-sensitive life products Liability for guarantees related to income benefits Liability for guarantees related to accumulation and withdrawal benefits Total Balance, December 31, 2019 $ 293 $ 24 $ 102 $ 419 Less reinsurance recoverables 81 20 32 133 Net balance as of December 31, 2019 212 4 70 286 Incurred guarantee benefits 50 — 18 68 Paid guarantee benefits (2) — — (2) Net change 48 — 18 66 Net balance as of December 31, 2020 260 4 88 352 Plus reinsurance recoverables 69 23 33 125 Balance, December 31, 2020 $ 329 $ 27 $ 121 $ 477 Balance, December 31, 2018 $ 308 $ 39 $ 97 $ 444 Less reinsurance recoverables 111 35 39 185 Net balance as of December 31, 2018 197 4 58 259 Incurred guarantee benefits 18 — 12 30 Paid guarantee benefits (3) — — (3) Net change 15 — 12 27 Net balance as of December 31, 2019 212 4 70 286 Plus reinsurance recoverables 81 20 32 133 Balance, December 31, 2019 $ 293 $ 24 $ 102 $ 419 |
Reserves included in total liability balance for guarantees | Reserves included in total liability balance for guarantees, as of December 31, by type of benefit ($ in millions) 2020 2019 2018 Variable annuity Death benefits $ 67 $ 78 $ 109 Income benefits 24 21 36 Accumulation benefits 18 18 25 Withdrawal benefits 15 14 14 Other guarantees 353 288 260 Total $ 477 $ 419 $ 444 |
Reinsurance and Indemnificati_2
Reinsurance and Indemnification (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Reinsurance Disclosures [Abstract] | |
Effects of reinsurance on property-liability insurance premiums written and earned and life and annuity premiums and contract charges | Effects of reinsurance and indemnification on property and casualty premiums written and earned and life premiums and contract charges For the years ended December 31, ($ in millions) 2020 2019 2018 Property and casualty insurance premiums written Direct $ 38,695 $ 37,976 $ 35,895 Assumed 105 95 99 Ceded (1,142) (1,117) (1,008) Property and casualty insurance premiums written, net of recoverables $ 37,658 $ 36,954 $ 34,986 Property and casualty insurance premiums earned Direct $ 38,115 $ 37,104 $ 34,977 Assumed 99 94 87 Ceded (1,141) (1,122) (1,016) Property and casualty insurance premiums earned, net of recoverables $ 37,073 $ 36,076 $ 34,048 Life premiums and contract charges Direct $ 2,001 $ 2,074 $ 2,001 Assumed 685 712 754 Ceded (242) (285) (290) Life premiums and contract charges, net of recoverables $ 2,444 $ 2,501 $ 2,465 |
Summary of reinsurance recoverables on paid and unpaid benefits | Reinsurance and indemnification recoverables, net As of December 31, ($ in millions) 2020 2019 Property and casualty Paid and due from reinsurers and indemnitors $ 101 $ 112 Unpaid losses estimated (including IBNR) 7,033 6,912 Total property and casualty $ 7,134 $ 7,024 Allstate Annuities (1) $ 1,293 $ 1,305 Allstate Life (1) 712 794 Allstate Benefits (1) 81 88 Total $ 9,220 $ 9,211 (1) As of December 31, 2020 and 2019, approximately 94% and 93%, respectively, of the reinsurance recoverables are due from companies rated A- or better by S&P. |
Rollforward of credit loss allowance for reinsurance recoverables | Rollforward of credit loss allowance for reinsurance recoverables For the year ended ($ in millions) December 31, 2020 Property and casualty (1) (2) Beginning balance $ (60) Decrease in the provision for credit losses 1 Write-offs — Ending balance $ (59) Allstate Annuities, Allstate Life and Allstate Benefits Beginning balance $ (3) Cumulative effect of change in accounting principle (11) Increase in the provision for credit losses (1) Write-offs — Ending Balance $ (15) (1) Primarily related to discontinued lines and coverages reinsurance ceded. (2) Indemnification recoverables are considered collectible based on the industry pool and facility enabling legislation . |
Summary of retention limits by period of policy issuance | Retention limits by period of policy issuance Period Retention limits April 2015 through current Single life: $2 million per life Joint life: no longer offered April 2011 through March 2015 Single life: $5 million per life, $3 million age 70 and over, and $10 million for contracts that meet specific criteria Joint life: $8 million per life, and $10 million for contracts that meet specific criteria July 2007 through March 2011 $5 million per life, $3 million age 70 and over, and $10 million for contracts that meet specific criteria September 1998 through June 2007 $2 million per life, in 2006 the limit was increased to $5 million for instances when specific criteria were met August 1998 and prior Up to $1 million per life |
Schedule of reinsurance premium ceded | Amounts ceded to Prudential December 31, ($ in millions) 2020 2019 2018 Premiums and contract charges $ 64 $ 65 $ 72 Contract benefits 46 (4) 87 Interest credited to contractholder funds 20 19 20 Operating costs and expenses 12 12 14 |
Deferred Policy Acquisition a_2
Deferred Policy Acquisition and Sales Inducement Costs (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Deferred Policy Acquisition and Sales Inducement Costs | |
Schedule of deferred policy acquisition costs | Deferred policy acquisition costs activity For the years ended December 31, ($ in millions) 2020 2019 2018 Balance, beginning of year $ 4,699 $ 4,784 $ 4,191 Acquisition costs deferred 5,758 5,622 5,663 Amortization charged to income (5,630) (5,533) (5,222) Effect of unrealized gains and losses (127) (174) 152 Balance, end of year $ 4,700 $ 4,699 $ 4,784 |
Schedule of DSI activity for Allstate Financial | Deferred sales inducement costs activity (1) For the years ended December 31, ($ in millions) 2020 2019 2018 Balance, beginning of year $ 27 $ 34 $ 36 Amortization charged to income (5) (5) (4) Effect of unrealized gains and losses 3 (2) 2 Balance, end of year $ 25 $ 27 $ 34 (1) Deferred sales inducement costs primarily relate to fixed annuities and interest-sensitive life contracts and are recorded as part of other assets on the Consolidated Statements of Financial Position. |
Capital Structure (Tables)
Capital Structure (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Capital Structure | |
Total debt outstanding | Total debt outstanding As of December 31, ($ in millions) 2020 2019 Floating Rate Senior Notes, due 2021 (1) $ 250 $ 250 Floating Rate Senior Notes, due 2023 (1) 250 250 3.150% Senior Notes, due 2023 (2) 500 500 0.750% Senior Notes, due 2025 (2) 600 — Due after one year through five years 1,600 1,000 3.280% Senior Notes, due 2026 (2) 550 550 1.450% Senior Notes, due 2030 (2) 600 — Due after five years through ten years 1,150 550 6.125% Senior Notes, due 2032 (2) 159 159 5.350% Senior Notes due 2033 (2) 323 323 5.550% Senior Notes due 2035 (2) 546 546 5.950% Senior Notes, due 2036 (2) 386 386 6.900% Senior Debentures, due 2038 165 165 5.200% Senior Notes, due 2042 (2) 62 62 4.500% Senior Notes, due 2043 (2) 500 500 4.200% Senior Notes, due 2046 (2) 700 700 3.850% Senior Notes, due 2049 (2) 500 500 5.100% Subordinated Debentures, due 2053 500 500 5.750% Subordinated Debentures, due 2053 800 800 6.500% Junior Subordinated Debentures, due 2067 500 500 Due after ten years 5,141 5,141 Long-term debt total principal 7,891 6,691 Debt issuance costs (66) (60) Total long-term debt 7,825 6,631 Short-term debt (3) — — Total debt $ 7,825 $ 6,631 (1) 2021 and 2023 Floating Rate Senior Notes are not redeemable prior to the applicable maturity dates and bear interest at a floating rate equal to three-month LIBOR, reset quarterly on each interest reset date, plus 0.43% and 0.63% per year, respectively. (2) Senior Notes are subject to redemption at the Company’s option in whole or in part at any time at the greater of either 100% of the principal amount plus accrued and unpaid interest to the redemption date or the discounted sum of the present values of the remaining scheduled payments of principal and interest and accrued and unpaid interest to the redemption date. (3) The Company classifies any borrowings which have a maturity of twelve months or less at inception as short-term debt. |
Schedule of debt maturities for each of the next five years and thereafter | Debt maturities for each of the next five years and thereafter ($ in millions) 2021 $ 250 2022 — 2023 750 2024 — 2025 600 Thereafter 6,291 Total long-term debt principal $ 7,891 |
Schedule of noncumulative outstanding preferred stock | Total preferred stock outstanding As of December 31, Aggregate liquidation preference ($ in millions) Dividend per depository share (1) Aggregate dividend payment ($ in millions) 2020 2019 2020 2019 Dividend rate 2020 2019 2018 2020 2019 2018 Series A — 11,500 $ — $ 287.5 5.625 % $ — $ 1.41 $ 1.41 $ 4 (2) $ 16 $ 16 Series C — — — — 6.750 % — — 1.69 — — 26 (2) Series D — — — — 6.625 % — 1.66 1.66 — 9 (2) 9 Series E — — — — 6.625 % — 1.66 1.66 — 49 (2) 49 Series F — — — — 6.250 % — 1.56 1.56 — 16 (2) 16 Series G 23,000 23,000 575.0 575.0 5.625 % 1.41 1.41 1.41 32 32 18 Series H 46,000 46,000 1,150.0 1,150.0 5.100 % 1.28 1.28 — 59 12 — Series I 12,000 12,000 300.0 300.0 4.750 % 1.19 1.19 — 13 — — Total 81,000 92,500 $ 2,025 $ 2,313 $ 108 $ 134 (2) $ 134 (2) (1) Each depositary share represents a 1/1,000 th interest in a share of preferred stock. (2) Excludes $10 million, $37 million and $13 million in 2020, 2019 and 2018, respectively, related to original issuance costs in preferred stock dividends on the Consolidated Statements of Operations and Consolidated Statements of Shareholders’ Equity as a result of the preferred stock redemptions. |
Company Restructuring (Tables)
Company Restructuring (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Restructuring and Related Activities [Abstract] | |
Schedule of changes in the restructuring liability | Restructuring activity during the period ($ in millions) Employee costs Exit costs Total liability Restructuring liability as of December 31, 2019 $ 14 $ 8 $ 22 Expense incurred 214 46 260 Adjustments to liability 3 (4) (1) Payments and non-cash pension settlements (159) (50) (209) Restructuring liability as of December 31, 2020 $ 72 $ — $ 72 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Reconciliation of the change in the amount of unrecognized tax benefits | Reconciliation of the change in the amount of unrecognized tax benefits For the years ended December 31, ($ in millions) 2020 2019 2018 Balance – beginning of year $ 70 $ 70 $ 55 Increase for tax positions taken in a prior year — — 3 Increase for tax positions taken in the current year — — 12 Decrease for settlements (58) — — Balance – end of year $ 12 $ 70 $ 70 |
Components of the deferred income tax assets and liabilities | Components of the deferred income tax assets and liabilities As of December 31, ($ in millions) 2020 2019 Deferred tax assets Unearned premium reserves $ 659 $ 642 Pension 161 197 Accrued compensation 139 147 Discount on loss reserves 79 78 Other postretirement benefits 36 49 Net operating loss carryover 23 26 Other assets 68 54 Total deferred tax assets 1,165 1,193 Deferred tax liabilities DAC (858) (847) Unrealized net capital gains (856) (507) Investments (394) (567) Life and annuity reserves (216) (222) Intangible assets (87) (98) Other liabilities (109) (106) Total deferred tax liabilities (2,520) (2,347) Net deferred tax liability $ (1,355) $ (1,154) |
Components of the net operating loss carryforwards | Components of the net operating loss carryforwards as of December 31, 2020 ($ in millions) 20-Year Carryforward Indefinite Carryforward Period Total US Federal $ 36 $ 8 $ 44 Foreign — 68 68 Total $ 36 $ 76 $ 112 |
Components of income tax expense | Components of income tax expense For the years ended December 31, ($ in millions) 2020 2019 2018 Current $ 1,499 $ 991 $ 704 Deferred (116) 251 (236) Total income tax expense $ 1,383 $ 1,242 $ 468 |
Reconciliation of the statutory federal income tax rate to the effective income tax rate on income from operations | Reconciliation of the statutory federal income tax rate to the effective income tax rate For the years ended December 31, ($ in millions) 2020 2019 2018 Income before income taxes $ 6,959 $ 6,089 $ 2,628 Statutory federal income tax rate on income from operations 1,461 21.0 % 1,279 21.0 % 552 21.0 % Tax credits (45) (0.7) (33) (0.5) (34) (1.3) Share-based payments (30) (0.4) (24) (0.4) (16) (0.6) Tax-exempt income (24) (0.3) (27) (0.4) (24) (0.9) State income taxes 35 0.5 41 0.7 27 1.0 Tax Legislation benefit — — — — (29) (1.1) Other (14) (0.2) 6 — (8) (0.3) Effective income tax rate on income from operations $ 1,383 19.9 % $ 1,242 20.4 % $ 468 17.8 % |
Statutory Financial Informati_2
Statutory Financial Information and Dividend Limitations (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Statutory Financial Information and Dividend Limitations [Abstract] | |
Statutory net income and capital and surplus | Statutory net income (loss) and capital and surplus of Allstate’s domestic insurance subsidiaries Net income (loss) Capital and surplus ($ in millions) 2020 2019 2018 2020 2019 Amounts by major business type: Property and casualty insurance $ 6,232 $ 3,989 $ 2,939 $ 17,128 $ 16,192 Life insurance, annuities and voluntary accident and health insurance 14 422 465 4,255 4,208 Amount per statutory accounting practices $ 6,246 $ 4,411 $ 3,404 $ 21,383 $ 20,400 |
Benefit Plans (Tables)
Benefit Plans (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Retirement Benefits [Abstract] | |
Components of the plans' funded status reflected in the Consolidated Statements of Financial Position | Change in projected benefit obligation, plan assets and funded status As of December 31, Pension benefits Postretirement benefits ($ in millions) 2020 2019 2020 2019 Change in projected benefit obligation Benefit obligation, beginning of year $ 7,139 $ 6,224 $ 397 $ 375 Service cost 104 117 4 8 Interest cost 210 240 11 14 Participant contributions — — 14 15 Actuarial losses (gains) 813 927 22 19 Benefits paid (522) (356) (37) (39) Plan amendments — — (102) — Translation adjustment and other (1) (13) (1) 5 Curtailment losses (gains) 20 — 10 — Benefit obligation, end of year $ 7,763 $ 7,139 $ 318 $ 397 Change in plan assets Fair value of plan assets, beginning of year $ 6,192 $ 5,299 Actual return on plan assets 1,300 1,235 Employer contribution 18 27 Benefits paid (522) (356) Translation adjustment and other (1) (13) Fair value of plan assets, end of year $ 6,987 $ 6,192 Funded status (1) $ (776) $ (947) $ (318) $ (397) Amounts recognized in AOCI Unamortized pension and other postretirement prior service credit $ (78) $ (142) $ (89) $ (13) |
Change during the period in items not yet recognized as a component of net periodic cost | Changes in items not yet recognized as a component of net cost for pension and other postretirement plans ($ in millions) Pension benefits Postretirement benefits Items not yet recognized as a component of net cost – December 31, 2019 $ (142) $ (13) Prior service credit arising during the period — (102) Prior service credit recognized during the period due to curtailment 10 18 Prior service credit amortized to net cost 54 10 Translation adjustment and other — (2) Items not yet recognized as a component of net cost – December 31, 2020 $ (78) $ (89) |
Components of net periodic cost | Components of net cost (benefit) for pension and other postretirement plans For the years ended December 31, Pension benefits Postretirement benefits Total Pension and Postretirement Benefits ($ in millions) 2020 2019 2018 2020 2019 2018 2020 2019 2018 Service cost $ 104 $ 117 $ 110 $ 4 $ 8 $ 7 $ 108 $ 125 $ 117 Interest cost 210 240 255 11 14 15 221 254 270 Expected return on plan assets (414) (403) (427) — — — (414) (403) (427) Amortization of prior service credit (54) (56) (56) (10) (3) (21) (64) (59) (77) Curtailment losses (gains) 10 — — (8) — — 2 — — Costs and expenses (144) (102) (118) (3) 19 1 (147) (83) (117) Remeasurement of projected benefit obligation 813 927 (255) 22 19 (4) 835 946 (259) Remeasurement of plan assets (886) (832) 727 — — — (886) (832) 727 Remeasurement (gains) losses (73) 95 472 22 19 (4) (51) 114 468 Total net (benefit) cost $ (217) $ (7) $ 354 $ 19 $ 38 $ (3) $ (198) $ 31 $ 351 |
Weighted average assumptions used to determine for pension plans and postretirement benefits plans the net benefit cost and benefit obligation | Weighted average assumptions used to determine net pension cost and net postretirement benefit cost For the years ended December 31, Pension benefits Postretirement benefits 2020 2019 2018 2020 2019 2018 Discount rate 3.00 % 3.70 % 4.06 % 2.99 % 3.61 % 3.95 % Expected long-term rate of return on plan assets 7.08 7.34 7.33 n/a n/a n/a Weighted average assumptions used to determine benefit obligations For the years ended December 31, Pension benefits Postretirement benefits 2020 2019 2020 2019 Discount rate 2.51 % 3.31 % 2.39 % 3.27 % |
Pension plans' weighted average target asset allocation and the actual percentage of plan assets | Weighted average target asset allocation and actual percentage of plan assets by asset category As of December 31, 2020 Target asset allocation (1) Actual percentage of plan assets Pension plan’s asset category 2020 2020 2019 Equity securities (2) 43 - 62% 50 % 50 % Fixed income securities 33 - 45 38 38 Limited partnership interests — - 15 10 10 Short-term investments and other — 2 2 Total without securities lending (3) 100 % 100 % (1) The target asset allocation considers risk-based exposure while the actual percentage of plan assets utilizes a financial reporting view excluding exposure provided through derivatives. (2) The actual percentage of plan assets for equity securities includes zero and 1% of private equity investments in 2020 and 2019, respectively, that are subject to the limited partnership interests target allocation and 1% and zero of fixed income mutual funds in 2020 and 2019, respectively, that are subject to the fixed income securities target allocation. (3) Securities lending collateral reinvestment of $101 million and $258 million is excluded from the table above in 2020 and 2019, respectively. |
Fair values of pension plan assets | Fair values of pension plan assets as of December 31, 2020 ($ in millions) Quoted prices in active markets for identical assets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Balance as of December 31, 2020 Equity securities $ 227 $ 42 $ — $ 269 Fixed income securities: U.S. government and agencies 32 865 — 897 Corporate — 1,709 2 1,711 Short-term investments 210 35 — 245 Free-standing derivatives: Assets — 21 — 21 Liabilities (2) (21) — (23) Other assets 2 — — 2 Total plan assets at fair value $ 469 $ 2,651 $ 2 3,122 % of total plan assets at fair value 15.0 % 84.9 % 0.1 % 100.0 % Investments measured using the net asset value practical expedient 3,908 Securities lending obligation (1) (101) Derivatives counterparty and cash collateral netting (19) Other net plan assets (2) 77 Total reported plan assets $ 6,987 (1) The securities lending obligation represents the plan’s obligation to return securities lending collateral received under a securities lending program. The terms of the program allow both the plan and the counterparty the right and ability to redeem/return the securities loaned on short notice. Due to its relatively short-term nature, the outstanding balance of the obligation approximates fair value. (2) Other net plan assets represent cash and cash equivalents, interest and dividends receivable and net receivables related to settlements of investment transactions, such as purchases and sales. Fair values of pension plan assets as of December 31, 2019 ($ in millions) Quoted prices in active markets for identical assets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Balance as of December 31, 2019 Equity securities $ 216 $ 45 $ — $ 261 Fixed income securities: U.S. government and agencies 237 1,096 — 1,333 Corporate — 1,060 — 1,060 Short-term investments 128 252 — 380 Free-standing derivatives: Assets — 5 — 5 Liabilities (2) (17) — (19) Total plan assets at fair value $ 579 $ 2,441 $ — 3,020 % of total plan assets at fair value 19.2 % 80.8 % — % 100.0 % Investments measured using the net asset value practical expedient 3,418 Securities lending obligation (272) Derivatives counterparty and cash collateral netting 9 Other net plan assets 17 Total reported plan assets $ 6,192 |
Rollforward of Level 3 plan assets | Rollforward of Level 3 plan assets during December 31, 2020 Actual return on plan assets: ($ in millions) Balance as of December 31, 2019 Relating to assets sold during the period Relating to assets still held at the reporting date Purchases, sales and settlements, net Net transfers in (out) of Level 3 Balance as of December 31, 2020 Fixed income securities: Corporate $ — $ — $ — $ 2 $ — $ 2 Total Level 3 plan assets $ — $ — $ — $ 2 $ — $ 2 Rollforward of Level 3 plan assets during December 31, 2019 Actual return on plan assets: ($ in millions) Balance as of December 31, 2018 Relating to assets sold during the period Relating to assets still held at the reporting date Purchases, sales and settlements, net Net transfers in (out) of Level 3 Balance as of December 31, 2019 Fixed income securities: Corporate $ 5 $ — $ — $ (5) $ — $ — Total Level 3 plan assets $ 5 $ — $ — $ (5) $ — $ — Rollforward of Level 3 plan assets during December 31, 2018 Actual return on plan assets: ($ in millions) Balance as of December 31, 2017 Relating to assets sold during the period Relating to assets still held at the reporting date Purchases, sales and settlements, net Net transfers in (out) of Level 3 Balance as of December 31, 2018 Equity securities $ 29 $ — $ 3 $ — $ (32) $ — Fixed income securities: Corporate 10 — — (5) — 5 Total Level 3 plan assets $ 39 $ — $ 3 $ (5) $ (32) $ 5 |
Estimated future benefit payments expected to be paid | Estimated future benefit payments expected to be paid in the next 10 years As of December 31, 2020 ($ in millions) Pension benefits Postretirement benefits 2021 $ 710 $ 25 2022 741 27 2023 733 27 2024 726 27 2025 694 26 2026-2030 2,320 98 Total benefit payments $ 5,924 $ 230 |
Equity Incentive Plans (Tables)
Equity Incentive Plans (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Equity Incentive Plans [Abstract] | |
Equity Awards | Equity awards ($ in millions) 2020 2019 2018 Compensation expense $ 124 $ 105 $ 125 Income tax benefits 18 17 22 Cash received from exercise of options 111 154 92 Tax benefit realized on options exercised and release of stock restrictions 53 43 28 |
Nonvested Awards | Nonvested awards as of December 31, 2020 ($ in millions) Unrecognized compensation Weighted average vesting period Nonqualified stock options $ 21 1.49 years Restricted stock units 33 1.85 years Performance stock awards 28 1.44 years Total $ 82 |
Assumptions used to determine the fair value of options granted | Option grant assumptions 2020 2019 2018 Weighted average expected term 6.1 years 5.8 years 5.7 years Expected volatility 16.3% - 37.1% 15.6% - 28.9% 15.6% - 30.7% Weighted average volatility 17.6 % 18.4 % 19.8 % Expected dividends 1.6% - 2.4% 1.9% - 2.2% 1.5% - 2.2% Weighted average expected dividends 1.8 % 2.2 % 2.0 % Risk-free rate 0.1% - 1.8% 1.3% - 2.7% 1.3% - 3.2% |
Summary of option activity | Summary of option activity For the year ended December 31, 2020 Number (in 000s) Weighted average exercise price Aggregate intrinsic value (in 000s) Weighted average remaining contractual term (years) Outstanding as of January 1, 2020 11,671 $ 73.40 Granted 1,555 123.43 Exercised (2,201) 53.75 Forfeited (394) 104.18 Expired (14) 81.21 Outstanding as of December 31, 2020 10,617 83.65 $ 298,537 6.1 Outstanding, net of expected forfeitures 10,543 83.46 297,990 6.1 Outstanding, exercisable (“vested”) 6,907 72.51 258,510 5.0 |
Changes in restricted stock units | Changes in restricted stock units For the year ended December 31, 2020 Number (in 000s) Weighted average grant date fair value Nonvested as of January 1, 2020 877 $ 83.87 Granted 407 118.61 Vested (278) 80.10 Forfeited (58) 105.03 Nonvested as of December 31, 2020 948 98.61 |
Changes in performance stock units | Changes in performance stock awards For the year ended December 31, 2020 Number (in 000s) Weighted average grant date fair value Nonvested as of January 1, 2020 1,181 $ 87.78 Granted 282 123.48 Adjustment for performance achievement 408 78.49 Vested (816) 78.49 Forfeited (104) 101.10 Nonvested as of December 31, 2020 951 100.89 |
Supplemental Cash Flow Inform_2
Supplemental Cash Flow Information (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Supplemental Cash Flow Information [Abstract] | |
Schedule of supplemental cash flow information from collateralized securities received | The accompanying cash flows are included in cash flows from operating activities in the Consolidated Statements of Cash Flows along with the activities resulting from management of the proceeds as follows: For the years ended December 31, ($ in millions) 2020 2019 2018 Net change in proceeds managed Net change in fixed income securities $ — $ 80 $ 234 Net change in short-term investments 592 (451) (568) Operating cash flow provided (used) 592 (371) (334) Net change in cash (12) — — Net change in proceeds managed $ 580 $ (371) $ (334) Net change in liabilities Liabilities for collateral, beginning of year $ (1,829) $ (1,458) $ (1,124) Liabilities for collateral, end of year (1,249) (1,829) (1,458) Operating cash flow (used) provided $ (580) $ 371 $ 334 |
Other Comprehensive Income (Tab
Other Comprehensive Income (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | |
Other comprehensive income (loss) on a pre-tax and after-tax basis | Components of other comprehensive income (loss) on a pre-tax and after-tax basis For the years ended December 31, 2020 2019 2018 ($ in millions) Pre-tax Tax After-tax Pre-tax Tax After-tax Pre-tax Tax After-tax Unrealized net holding gains and losses arising during the period, net of related offsets $ 2,512 $ (532) $ 1,980 $ 2,807 $ (592) $ 2,215 $ (1,142) $ 241 $ (901) Less: reclassification adjustment of realized capital gains and losses 870 (183) 687 413 (87) 326 (186) 39 (147) Unrealized net capital gains and losses 1,642 (349) 1,293 2,394 (505) 1,889 (956) 202 (754) Unrealized foreign currency translation adjustments 66 (14) 52 (13) 3 (10) (61) 13 (48) Unamortized pension and other postretirement prior service credit (1) 12 (3) 9 (59) 12 (47) (77) 18 (59) Other comprehensive income (loss) $ 1,720 $ (366) $ 1,354 $ 2,322 $ (490) $ 1,832 $ (1,094) $ 233 $ (861) (1) Represents prior service credits reclassified out of other comprehensive income and amortized into operating costs and expenses. |
Quarterly Results (unaudited) (
Quarterly Results (unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly results | First Quarter Second Quarter Third Quarter Fourth Quarter ($ in millions, except per share data) 2020 2019 2020 2019 2020 2019 2020 2019 Revenues $ 10,076 $ 10,990 $ 11,197 $ 11,144 $ 11,500 $ 11,069 $ 12,018 $ 11,472 Net income (loss) applicable to common shareholders 513 1,261 1,224 821 1,126 889 2,598 1,707 Earnings per common share - Basic 1.62 3.79 3.90 2.47 3.62 2.71 8.54 5.32 Earnings per common share - Diluted 1.59 3.74 3.86 2.44 3.58 2.67 8.45 5.23 |
General (Details)
General (Details) | 12 Months Ended |
Dec. 31, 2020segment | |
General | |
Number of reportable segments | 7 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Securities loaned and Recognition of premium revenues and contract charges, and related benefits and interest credited (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Securities loaned | |||
Cash collateral received as percentage of fair value of domestic securities loaned | 102.00% | ||
Cash collateral received as a percent of fair value of foreign securities loaned | 105.00% | ||
Deferred Policy Acquisition and Sales Inducement Costs | |||
Unearned premiums | $ 15,949,000,000 | $ 15,343,000,000 | |
Decrease in unearned premiums | (598,000,000) | (801,000,000) | $ (915,000,000) |
Unearned premium, year one | 1,300,000,000 | ||
Unearned premium, year two | 861,000,000 | ||
Unearned premium, thereafter | 1,000,000,000 | ||
Premium Receivable, Allowance for Credit Loss [Roll Forward] | |||
Beginning balance | (91,000,000) | ||
Increase in the provision for credit losses | (223,000,000) | ||
Write-off of uncollectible premium installment receivable amounts | 161,000,000 | ||
Ending balance | (153,000,000) | (91,000,000) | |
Present value of future profits | 25,000,000 | 39,000,000 | |
Amortization expense of present value of future profits | 14,000,000 | 6,000,000 | $ 2,000,000 |
Allstate Protection | |||
Deferred Policy Acquisition and Sales Inducement Costs | |||
Unearned premiums | 12,772,000,000 | 12,567,000,000 | |
Protection Services | |||
Deferred Policy Acquisition and Sales Inducement Costs | |||
Unearned premiums | 3,167,000,000 | 2,765,000,000 | |
Allstate Protection and Protection Services | |||
Deferred Policy Acquisition and Sales Inducement Costs | |||
Unearned premiums | $ 15,939,000,000 | 15,332,000,000 | |
Minimum | |||
Premium Receivable, Allowance for Credit Loss [Roll Forward] | |||
Period for amortization of DAC and DSI for interest-sensitive life, fixed annuities and other investment contracts | 15 years | ||
Maximum | |||
Securities loaned | |||
Securities lending transactions length | 30 days | ||
Premium Receivable, Allowance for Credit Loss [Roll Forward] | |||
Period for amortization of DAC and DSI for interest-sensitive life, fixed annuities and other investment contracts | 30 years | ||
Personal Lines | Minimum | |||
Deferred Policy Acquisition and Sales Inducement Costs | |||
Property and casualty insurance contract, terms | 6 months | ||
Period for amortization of DAC for property-liability insurance | 6 months | ||
Personal Lines | Maximum | |||
Deferred Policy Acquisition and Sales Inducement Costs | |||
Property and casualty insurance contract, terms | 12 months | ||
Period for amortization of DAC for property-liability insurance | 12 months | ||
Protection Plans and Other Contracts | Minimum | |||
Deferred Policy Acquisition and Sales Inducement Costs | |||
Period for amortization of DAC for property-liability insurance | 1 year | ||
Protection Plans and Other Contracts | Maximum | |||
Deferred Policy Acquisition and Sales Inducement Costs | |||
Period for amortization of DAC for property-liability insurance | 5 years | ||
Interest-sensitive life insurance contract charges | Minimum | |||
Premium Receivable, Allowance for Credit Loss [Roll Forward] | |||
Period for amortization of DAC and DSI for interest-sensitive life, fixed annuities and other investment contracts | 10 years | ||
Interest-sensitive life insurance contract charges | Maximum | |||
Premium Receivable, Allowance for Credit Loss [Roll Forward] | |||
Period for amortization of DAC and DSI for interest-sensitive life, fixed annuities and other investment contracts | 20 years | ||
Property and casualty insurance premiums | Protection Services | |||
Deferred Policy Acquisition and Sales Inducement Costs | |||
Decrease in unearned premiums | $ 1,110,000,000 | $ 996,000,000 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Goodwill (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Goodwill | |||
Goodwill allocated to segments | $ 2,544 | $ 2,545 | |
Forecast | |||
Goodwill | |||
Goodwill, written off | $ 175 | ||
Allstate Protection | |||
Goodwill | |||
Goodwill allocated to segments | 810 | 810 | |
Protection Services | |||
Goodwill | |||
Goodwill allocated to segments | 1,463 | 1,464 | |
Allstate Life | |||
Goodwill | |||
Goodwill allocated to segments | 175 | 175 | |
Allstate Benefits | |||
Goodwill | |||
Goodwill allocated to segments | $ 96 | $ 96 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Intangible assets (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Finite-Lived Intangible Assets [Line Items] | |||
Amortization of intangible assets | $ 118 | $ 126 | $ 105 |
2021 | 91 | ||
2022 | 74 | ||
2023 | 60 | ||
2024 | 45 | ||
2025 | 33 | ||
Thereafter | 31 | ||
Total amortization | 334 | ||
Accumulated amortization on intangible assets | 751 | 633 | |
Intangible assets by type | $ 453 | 481 | |
Impairment of intangible assets (Excluding Goodwill) | 106 | ||
Customers relationships | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-Lived intangible asset, useful life | 10 years | ||
Intangible assets by type | $ 322 | 419 | |
Technology-Based Intangible Assets | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-Lived intangible asset, useful life | 5 years | ||
Other Intangible Assets | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-Lived intangible asset, useful life | 7 years | ||
Technology and other | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets by type | $ 94 | 24 | |
Trade names and licenses | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets by type | $ 37 | $ 38 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Property and equipment (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Property and equipment | |||
Accumulated depreciation on property and equipment | $ 2,810 | $ 2,600 | |
Depreciation expense on property and equipment | $ 353 | $ 326 | $ 299 |
Equipment | Minimum | |||
Property and equipment | |||
Property and equipment, estimated useful life | 3 years | ||
Equipment | Maximum | |||
Property and equipment | |||
Property and equipment, estimated useful life | 10 years | ||
Real property | |||
Property and equipment | |||
Property and equipment, estimated useful life | 40 years |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Leases (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Lessee, Lease, Description [Line Items] | ||
Renewal term | 20 years | |
Lease, option to terminate | 60 days | |
Operating lease, liability | us-gaap:OtherLiabilities | |
Operating lease, right-of-use asset, | us-gaap:OtherAssets | |
Lease liability | $ 511 | |
Lease, cost | 166 | $ 171 |
Variable lease, cost | $ 30 | $ 30 |
Weighted average remaining lease term (years) | 5 years | 6 years |
Weighted average discount rate | 3.10% | 3.15% |
2021 | $ 120 | |
2022 | 116 | |
2023 | 95 | |
2024 | 77 | |
2025 | 63 | |
Thereafter | 84 | |
Total lease payments | 555 | |
Less: interest | (44) | |
Present value of lease liabilities | 511 | |
Other liabilities & accrued expenses | ||
Lessee, Lease, Description [Line Items] | ||
Lease liability | 511 | $ 586 |
Present value of lease liabilities | 511 | 586 |
Other assets | ||
Lessee, Lease, Description [Line Items] | ||
Right of use asset | $ 393 | $ 483 |
Minimum | ||
Lessee, Lease, Description [Line Items] | ||
Lease, term of contract | 1 year | |
Maximum | ||
Lessee, Lease, Description [Line Items] | ||
Lease, term of contract | 9 years |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Earnings per common share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Numerator: | |||||||||||
Net income | $ 5,576 | $ 4,847 | $ 2,160 | ||||||||
Less: Preferred stock dividends | 115 | 169 | 148 | ||||||||
Net income applicable to common shareholders | $ 2,598 | $ 1,126 | $ 1,224 | $ 513 | $ 1,707 | $ 889 | $ 821 | $ 1,261 | $ 5,461 | $ 4,678 | $ 2,012 |
Denominator: | |||||||||||
Weighted average common shares outstanding (in shares) | 311.6 | 328.2 | 347.8 | ||||||||
Effect of dilutive potential common shares: | |||||||||||
Stock options (in shares) | 2.2 | 3.2 | 3.6 | ||||||||
Restricted stock units (non-participating) and performance stock awards (in shares) | 1.7 | 2.1 | 1.8 | ||||||||
Weighted average common and dilutive potential common shares outstanding (in shares) | 315.5 | 333.5 | 353.2 | ||||||||
Earnings per common share - Basic (in dollars per share) | $ 8.54 | $ 3.62 | $ 3.90 | $ 1.62 | $ 5.32 | $ 2.71 | $ 2.47 | $ 3.79 | $ 17.53 | $ 14.25 | $ 5.78 |
Earnings per common share - Diluted (in dollars per share) | $ 8.45 | $ 3.58 | $ 3.86 | $ 1.59 | $ 5.23 | $ 2.67 | $ 2.44 | $ 3.74 | $ 17.31 | $ 14.03 | $ 5.70 |
Other Earnings Per Share Disclosures | |||||||||||
Antidilutive stock options, exercise price exceeds market price (in shares) | 2.9 | 3.7 | 2 |
Summary of Significant Accou_10
Summary of Significant Accounting Policies - Accounting standards (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Jan. 01, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Total allowance for expected credit losses | $ 393 | $ 289 | |||
Total shareholders’ equity | 30,217 | $ 25,998 | $ 21,312 | ||
Retained income | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Total shareholders’ equity | $ 52,767 | 48,074 | 44,033 | $ 41,579 | |
Retained income | Cumulative effect of change in accounting principle | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Total shareholders’ equity | $ (88) | $ 21 | $ 1,088 | ||
Retained income | Accounting Standards Update 2016-13 | Cumulative effect of change in accounting principle | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Total shareholders’ equity | $ 88 |
Summary of Significant Accou_11
Summary of Significant Accounting Policies - Allowance For Credit Loss (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Jan. 01, 2020 | Dec. 31, 2019 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Investments | $ 142 | $ 103 | |
Premium installment receivables | 153 | 91 | $ 91 |
Reinsurance recoverables | 74 | 74 | |
Other assets | 23 | 18 | |
Assets | 392 | 286 | |
Commitments to fund mortgage loans, bank loans and agent loans | 1 | 3 | |
Liabilities | 1 | 3 | |
Total | 393 | 289 | |
Fixed income securities | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Fixed income securities | 3 | 0 | 0 |
Mortgage loans | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Allowance credit losses | 67 | 45 | $ 3 |
Bank loans | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Allowance credit losses | 67 | 53 | |
Agent loans | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Allowance credit losses | $ 5 | $ 5 |
Acquisitions and Disposition -
Acquisitions and Disposition - Narrative (Details) - USD ($) | Jan. 26, 2021 | Jan. 04, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Nov. 19, 2020 | Dec. 31, 2019 | Feb. 12, 2019 |
Business Acquisition [Line Items] | |||||||
Long-term debt | $ 7,825,000,000 | $ 6,631,000,000 | |||||
Goodwill | $ 2,544,000,000 | $ 2,545,000,000 | |||||
Forecast | |||||||
Business Acquisition [Line Items] | |||||||
Loss on disposition | $ 3,000,000,000 | ||||||
Subsequent Event | |||||||
Business Acquisition [Line Items] | |||||||
Proceeds from affiliates | $ 2,800,000,000 | ||||||
Senior Notes Due 2025 at 0.750 Percent | |||||||
Business Acquisition [Line Items] | |||||||
Long-term debt | $ 600,000,000 | ||||||
Note stated interest rate (as a percent) | 0.75% | 0.75% | |||||
Senior Notes Due 2030 at 1.45 Percent | |||||||
Business Acquisition [Line Items] | |||||||
Long-term debt | $ 600,000,000 | ||||||
Note stated interest rate (as a percent) | 1.45% | 1.45% | |||||
National General | Subsequent Event | |||||||
Business Acquisition [Line Items] | |||||||
Consideration transferred | $ 4,000,000,000 | ||||||
Share price, cash (in shares) | $ 32 | ||||||
Share price, dividend (in USD per share) | 2.50 | ||||||
Share price (in USD per share) | $ 34.50 | ||||||
iCracked | |||||||
Business Acquisition [Line Items] | |||||||
Goodwill | $ 17,000,000 |
Reportable Segments - Narrative
Reportable Segments - Narrative (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020USD ($)segmentstate | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | |
Segment Reporting Information | |||
Number of reportable segments | segment | 7 | ||
Allstate Protection | |||
Segment Reporting Information | |||
Premium earned as percentage of consolidated revenues | 79.40% | ||
Number of states in which entity operates | state | 50 | ||
Minimum percentage of premiums to be considered as significant | 5.00% | ||
Revenues from external customers generated outside the United States | $ 1,570 | $ 1,370 | $ 1,200 |
Allstate Life | |||
Segment Reporting Information | |||
Number of states in which entity operates | state | 50 | ||
Minimum percentage of premiums to be considered as significant | 5.00% | ||
Consumer product protection plans | Protection Services | |||
Segment Reporting Information | |||
Insurance premiums, commissions and fees | $ 909 | 633 | 503 |
Consumer product protection plans | Protection Services | Non-US | |||
Segment Reporting Information | |||
Insurance premiums, commissions and fees | $ 188 | $ 95 | $ 61 |
Reportable Segments - Reportabl
Reportable Segments - Reportable segments revenue information (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Segment Reporting Information | |||||||||||
Insurance premiums | $ 39,517 | $ 38,577 | $ 36,513 | ||||||||
Net investment income | 2,853 | 3,159 | 3,240 | ||||||||
Realized capital gains (losses) | $ 4 | 1,356 | 1,885 | (877) | |||||||
Total revenues | $ 12,018 | $ 11,500 | $ 11,197 | $ 10,076 | $ 11,472 | $ 11,069 | $ 11,144 | $ 10,990 | 44,791 | 44,675 | 39,815 |
Allstate Protection | |||||||||||
Segment Reporting Information | |||||||||||
Insurance premiums | 35,580 | 34,843 | 32,950 | ||||||||
Discontinued Lines and Coverages | |||||||||||
Segment Reporting Information | |||||||||||
Insurance premiums | 0 | 0 | 0 | ||||||||
Property-Liability | |||||||||||
Segment Reporting Information | |||||||||||
Insurance premiums | 35,580 | 34,843 | 32,950 | ||||||||
Net investment income | 1,421 | 1,533 | 1,464 | ||||||||
Realized capital gains (losses) | 990 | 1,470 | (639) | ||||||||
Total revenues | 38,727 | 38,587 | 34,513 | ||||||||
Property-Liability | Auto | |||||||||||
Segment Reporting Information | |||||||||||
Insurance premiums | 24,640 | 24,188 | 22,970 | ||||||||
Property-Liability | Homeowners | |||||||||||
Segment Reporting Information | |||||||||||
Insurance premiums | 8,254 | 7,912 | 7,517 | ||||||||
Property-Liability | Other personal lines | |||||||||||
Segment Reporting Information | |||||||||||
Insurance premiums | 1,919 | 1,861 | 1,808 | ||||||||
Property-Liability | Commercial lines | |||||||||||
Segment Reporting Information | |||||||||||
Insurance premiums | 767 | 882 | 655 | ||||||||
Protection Services | |||||||||||
Segment Reporting Information | |||||||||||
Intersegment premiums and service fees | 147 | 154 | 122 | ||||||||
Net investment income | 44 | 42 | 27 | ||||||||
Realized capital gains (losses) | 30 | 32 | (11) | ||||||||
Total revenues | 1,922 | 1,649 | 1,318 | ||||||||
Protection Services | Consumer product protection plans | |||||||||||
Segment Reporting Information | |||||||||||
Insurance premiums, commissions and fees | 909 | 633 | 503 | ||||||||
Protection Services | Roadside assistance | |||||||||||
Segment Reporting Information | |||||||||||
Insurance premiums, commissions and fees | 188 | 238 | 263 | ||||||||
Protection Services | Finance and insurance products | |||||||||||
Segment Reporting Information | |||||||||||
Insurance premiums, commissions and fees | 396 | 362 | 332 | ||||||||
Allstate Life | |||||||||||
Segment Reporting Information | |||||||||||
Net investment income | 502 | 514 | 505 | ||||||||
Realized capital gains (losses) | (10) | 1 | (14) | ||||||||
Total revenues | 1,953 | 1,983 | 1,925 | ||||||||
Allstate Life | Traditional life insurance | |||||||||||
Segment Reporting Information | |||||||||||
Insurance premiums, commissions and fees | 633 | 630 | 600 | ||||||||
Allstate Life | Accident and health insurance premiums | |||||||||||
Segment Reporting Information | |||||||||||
Insurance premiums, commissions and fees | 2 | 2 | 2 | ||||||||
Allstate Life | Interest-sensitive life insurance contract charges | |||||||||||
Segment Reporting Information | |||||||||||
Insurance premiums, commissions and fees | 705 | 711 | 713 | ||||||||
Allstate Benefits | |||||||||||
Segment Reporting Information | |||||||||||
Net investment income | 78 | 83 | 77 | ||||||||
Realized capital gains (losses) | 8 | 12 | (9) | ||||||||
Total revenues | 1,180 | 1,240 | 1,203 | ||||||||
Allstate Benefits | Traditional life insurance | |||||||||||
Segment Reporting Information | |||||||||||
Insurance premiums, commissions and fees | 46 | 43 | 44 | ||||||||
Allstate Benefits | Accident and health insurance premiums | |||||||||||
Segment Reporting Information | |||||||||||
Insurance premiums, commissions and fees | 926 | 988 | 980 | ||||||||
Allstate Benefits | Interest-sensitive life insurance contract charges | |||||||||||
Segment Reporting Information | |||||||||||
Insurance premiums, commissions and fees | 122 | 114 | 111 | ||||||||
Allstate Annuities | |||||||||||
Segment Reporting Information | |||||||||||
Net investment income | 761 | 917 | 1,096 | ||||||||
Realized capital gains (losses) | 279 | 346 | (166) | ||||||||
Total revenues | 1,050 | 1,276 | 945 | ||||||||
Allstate Annuities | Fixed annuities contract charges | |||||||||||
Segment Reporting Information | |||||||||||
Insurance premiums, commissions and fees | 10 | 13 | 15 | ||||||||
Corporate and Other | |||||||||||
Segment Reporting Information | |||||||||||
Net investment income | 47 | 70 | 71 | ||||||||
Realized capital gains (losses) | 59 | 24 | (38) | ||||||||
Total revenues | 106 | 94 | 33 | ||||||||
Other revenue | Property-Liability | |||||||||||
Segment Reporting Information | |||||||||||
Insurance premiums, commissions and fees | 736 | 741 | 738 | ||||||||
Other revenue | Protection Services | |||||||||||
Segment Reporting Information | |||||||||||
Insurance premiums, commissions and fees | 208 | 188 | 82 | ||||||||
Other revenue | Allstate Life | |||||||||||
Segment Reporting Information | |||||||||||
Insurance premiums, commissions and fees | 121 | 125 | 119 | ||||||||
Intersegment eliminations | |||||||||||
Segment Reporting Information | |||||||||||
Total revenues | $ (147) | $ (154) | $ (122) |
Reportable Segments - Reporta_2
Reportable Segments - Reportable segments financial performance (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Segment Reporting Information | |||||||||||
Net investment income | $ 2,853 | $ 3,159 | $ 3,240 | ||||||||
Net income applicable to common shareholders | $ 2,598 | $ 1,126 | $ 1,224 | $ 513 | $ 1,707 | $ 889 | $ 821 | $ 1,261 | 5,461 | 4,678 | 2,012 |
Allstate Protection | |||||||||||
Segment Reporting Information | |||||||||||
Underwriting income | 4,566 | 2,912 | 2,343 | ||||||||
Discontinued Lines and Coverages | |||||||||||
Segment Reporting Information | |||||||||||
Underwriting income | (144) | (108) | (90) | ||||||||
Property-Liability | |||||||||||
Segment Reporting Information | |||||||||||
Underwriting income | 4,422 | 2,804 | 2,253 | ||||||||
Net investment income | 1,421 | 1,533 | 1,464 | ||||||||
Income tax expense on operations | (1,166) | (887) | (747) | ||||||||
Realized capital gains (losses), after-tax | 774 | 1,161 | (500) | ||||||||
Tax Legislation expense (benefit) | 0 | 0 | (5) | ||||||||
Net income applicable to common shareholders | 5,451 | 4,611 | 2,465 | ||||||||
Protection Services | |||||||||||
Segment Reporting Information | |||||||||||
Net investment income | 44 | 42 | 27 | ||||||||
Adjusted net income | 153 | 38 | 8 | ||||||||
Realized capital gains (losses), after-tax | 23 | 25 | (9) | ||||||||
Amortization of purchased intangibles, after-tax | (84) | (97) | (74) | ||||||||
Impairment of purchased intangibles, after-tax | 0 | (43) | 0 | ||||||||
Tax Legislation expense (benefit) | 0 | 0 | (4) | ||||||||
Net income applicable to common shareholders | 92 | (77) | (79) | ||||||||
Allstate Life | |||||||||||
Segment Reporting Information | |||||||||||
Net investment income | 502 | 514 | 505 | ||||||||
Adjusted net income | 194 | 261 | 295 | ||||||||
Realized capital gains (losses), after-tax | (9) | 0 | (11) | ||||||||
Valuation changes on embedded derivatives that are not hedged, after-tax | (34) | (9) | 0 | ||||||||
DAC and DSI amortization related to realized capital gains and losses and valuation changes on embedded derivatives that are not hedged, after-tax | 8 | (5) | (8) | ||||||||
Tax Legislation expense (benefit) | 0 | 0 | (16) | ||||||||
Net income applicable to common shareholders | 159 | 247 | 260 | ||||||||
Allstate Benefits | |||||||||||
Segment Reporting Information | |||||||||||
Net investment income | 78 | 83 | 77 | ||||||||
Adjusted net income | 96 | 115 | 124 | ||||||||
Realized capital gains (losses), after-tax | 7 | 9 | (7) | ||||||||
DAC and DSI amortization related to realized capital gains and losses and valuation changes on embedded derivatives that are not hedged, after-tax | 0 | 0 | 1 | ||||||||
Tax Legislation expense (benefit) | 0 | 0 | 0 | ||||||||
Net income applicable to common shareholders | 103 | 124 | 118 | ||||||||
Allstate Annuities | |||||||||||
Segment Reporting Information | |||||||||||
Net investment income | 761 | 917 | 1,096 | ||||||||
Adjusted net income | (53) | 10 | 131 | ||||||||
Realized capital gains (losses), after-tax | 221 | 274 | (131) | ||||||||
Valuation changes on embedded derivatives that are not hedged, after-tax | (2) | (6) | 3 | ||||||||
Premium deficiency for immediate annuities, after tax | (178) | 0 | 0 | ||||||||
Gain on disposition of operations, after-tax | 3 | 4 | 4 | ||||||||
Tax Legislation expense (benefit) | 0 | 0 | 69 | ||||||||
Net income applicable to common shareholders | (9) | 282 | 76 | ||||||||
Allstate Annuities | Reinsurance ceded | |||||||||||
Segment Reporting Information | |||||||||||
Premium deficiency for immediate annuities, after tax | $ 225 | ||||||||||
Corporate and Other | |||||||||||
Segment Reporting Information | |||||||||||
Net investment income | 47 | 70 | 71 | ||||||||
Adjusted net income | (428) | (438) | (406) | ||||||||
Realized capital gains (losses), after-tax | 47 | 19 | (30) | ||||||||
Pension and other postretirement remeasurement gains (losses), after-tax | 39 | (90) | (370) | ||||||||
Curtailment gain, after-tax | 7 | 0 | 0 | ||||||||
Business combination expenses, after-tax | 0 | 0 | (7) | ||||||||
Tax Legislation expense (benefit) | 0 | 0 | (15) | ||||||||
Net income applicable to common shareholders | $ (335) | $ (509) | $ (828) |
Reportable Segments - Performan
Reportable Segments - Performance data and tax items (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Segment Reporting Information | |||
Amortization of DAC | $ 5,630 | $ 5,533 | $ 5,222 |
Income tax expense (benefit) | 1,383 | 1,242 | 468 |
Property-Liability | |||
Segment Reporting Information | |||
Amortization of DAC | 4,642 | 4,649 | 4,475 |
Income tax expense (benefit) | 1,382 | 1,196 | 613 |
Protection Services | |||
Segment Reporting Information | |||
Amortization of DAC | 658 | 543 | 463 |
Income tax expense (benefit) | 26 | (18) | (19) |
Allstate Life | |||
Segment Reporting Information | |||
Amortization of DAC | 149 | 173 | 132 |
Income tax expense (benefit) | 17 | 53 | 75 |
Allstate Benefits | |||
Segment Reporting Information | |||
Amortization of DAC | 177 | 161 | 145 |
Income tax expense (benefit) | 28 | 35 | 32 |
Allstate Annuities | |||
Segment Reporting Information | |||
Amortization of DAC | 4 | 7 | 7 |
Income tax expense (benefit) | (7) | 73 | (66) |
Corporate and Other | |||
Segment Reporting Information | |||
Income tax expense (benefit) | $ (63) | $ (97) | $ (167) |
Reportable Segments - Total ass
Reportable Segments - Total assets and investments (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Segment Reporting Information | ||||
Assets | $ 125,987 | $ 119,950 | ||
Investments | 94,237 | 88,362 | ||
Deferred policy acquisition costs | 4,700 | 4,699 | $ 4,784 | $ 4,191 |
Property-Liability | ||||
Segment Reporting Information | ||||
Assets | 69,171 | 67,243 | ||
Investments | 50,134 | 48,414 | ||
Deferred policy acquisition costs | 1,608 | 1,624 | ||
Protection Services | ||||
Segment Reporting Information | ||||
Assets | 6,177 | 5,746 | ||
Investments | 1,822 | 1,544 | ||
Deferred policy acquisition costs | 1,696 | 1,448 | ||
Allstate Life | ||||
Segment Reporting Information | ||||
Assets | 15,051 | 14,771 | ||
Investments | 12,406 | 11,914 | ||
Deferred policy acquisition costs | 909 | 1,079 | ||
Allstate Benefits | ||||
Segment Reporting Information | ||||
Assets | 2,905 | 2,915 | ||
Investments | 2,012 | 1,941 | ||
Deferred policy acquisition costs | 470 | 527 | ||
Allstate Annuities | ||||
Segment Reporting Information | ||||
Assets | 27,080 | 26,914 | ||
Investments | 22,291 | 22,221 | ||
Deferred policy acquisition costs | 17 | 21 | ||
Corporate and Other | ||||
Segment Reporting Information | ||||
Assets | 5,603 | 2,361 | ||
Investments | $ 5,572 | $ 2,328 |
Investments - Portfolio composi
Investments - Portfolio composition (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Investments [Abstract] | ||
Fixed income securities, at fair value | $ 66,354 | $ 59,044 |
Equity securities, at fair value | 4,710 | 8,162 |
Mortgage loans, net | 4,075 | 4,817 |
Limited partnership interests | 7,609 | 8,078 |
Short-term investments, at fair value | 7,800 | 4,256 |
Other, net | 3,689 | 4,005 |
Total investments | $ 94,237 | $ 88,362 |
Investments - Amortized cost, g
Investments - Amortized cost, gross unrealized gains and losses and fair value for fixed income securities (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Schedule of Available for Sale Securities | ||
Amortized cost, net | $ 61,451 | $ 56,293 |
Gross unrealized gains | 4,976 | 2,847 |
Gross unrealized losses | (73) | (96) |
Fixed income securities | 66,354 | 59,044 |
U.S. government and agencies | ||
Schedule of Available for Sale Securities | ||
Amortized cost, net | 3,129 | 4,971 |
Gross unrealized gains | 94 | 141 |
Gross unrealized losses | (1) | (26) |
Fixed income securities | 3,222 | 5,086 |
Municipal | ||
Schedule of Available for Sale Securities | ||
Amortized cost, net | 8,752 | 8,080 |
Gross unrealized gains | 837 | 551 |
Gross unrealized losses | (2) | (11) |
Fixed income securities | 9,587 | 8,620 |
Corporate | ||
Schedule of Available for Sale Securities | ||
Amortized cost, net | 47,226 | 41,090 |
Gross unrealized gains | 3,981 | 2,035 |
Gross unrealized losses | (65) | (47) |
Fixed income securities | 51,142 | 43,078 |
Foreign government | ||
Schedule of Available for Sale Securities | ||
Amortized cost, net | 1,013 | 968 |
Gross unrealized gains | 42 | 16 |
Gross unrealized losses | 0 | (5) |
Fixed income securities | 1,055 | 979 |
ABS | ||
Schedule of Available for Sale Securities | ||
Amortized cost, net | 1,260 | 860 |
Gross unrealized gains | 15 | 8 |
Gross unrealized losses | (5) | (6) |
Fixed income securities | 1,270 | 862 |
MBS | ||
Schedule of Available for Sale Securities | ||
Amortized cost, net | 71 | 324 |
Gross unrealized gains | 7 | 96 |
Gross unrealized losses | 0 | (1) |
Fixed income securities | $ 78 | $ 419 |
Investments - Scheduled maturit
Investments - Scheduled maturities for fixed Income securities (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Amortized cost, net | ||
Due in one year or less | $ 3,092 | |
Due after one year through five years | 24,271 | |
Due after five years through ten years | 22,000 | |
Due after ten years | 10,757 | |
Subtotal | 60,120 | |
ABS and MBS | 1,331 | |
Amortized cost, net | 61,451 | $ 56,293 |
Fair value | ||
Due in one year or less | 3,136 | |
Due after one year through five years | 25,587 | |
Due after five years through ten years | 24,018 | |
Due after ten years | 12,265 | |
Subtotal | 65,006 | |
ABS and MBS | 1,348 | |
Fair value | $ 66,354 | $ 59,044 |
Investments - Net investment in
Investments - Net investment income (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Net Investment Income [Line Items] | |||
Investment income, before expense | $ 3,066 | $ 3,436 | $ 3,514 |
Investment expense | (213) | (277) | (274) |
Net investment income | 2,853 | 3,159 | 3,240 |
Fixed income securities | |||
Net Investment Income [Line Items] | |||
Investment income, before expense | 2,136 | 2,175 | 2,077 |
Equity securities | |||
Net Investment Income [Line Items] | |||
Investment income, before expense | 98 | 206 | 170 |
Mortgage loans | |||
Net Investment Income [Line Items] | |||
Investment income, before expense | 220 | 220 | 217 |
Limited partnership interests | |||
Net Investment Income [Line Items] | |||
Investment income, before expense | 338 | 471 | 705 |
Short-term investments | |||
Net Investment Income [Line Items] | |||
Investment income, before expense | 23 | 102 | 73 |
Other | |||
Net Investment Income [Line Items] | |||
Investment income, before expense | $ 251 | $ 262 | $ 272 |
Investments - Realized capital
Investments - Realized capital gains and losses by asset type (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Realized capital gains and losses by asset type | ||||
Realized capital gains (losses) | $ 4 | $ 1,356 | $ 1,885 | $ (877) |
Fixed income securities | ||||
Realized capital gains and losses by asset type | ||||
Realized capital gains (losses) | 983 | 461 | (237) | |
Equity securities | ||||
Realized capital gains and losses by asset type | ||||
Realized capital gains (losses) | 346 | 1,210 | (594) | |
Mortgage loans | ||||
Realized capital gains and losses by asset type | ||||
Realized capital gains (losses) | (47) | 0 | 2 | |
Limited partnership interests | ||||
Realized capital gains and losses by asset type | ||||
Realized capital gains (losses) | 24 | 200 | (101) | |
Derivatives | ||||
Realized capital gains and losses by asset type | ||||
Realized capital gains (losses) | 53 | (15) | 46 | |
Other | ||||
Realized capital gains and losses by asset type | ||||
Realized capital gains (losses) | $ (3) | $ 29 | $ 7 |
Investments - Realized capita_2
Investments - Realized capital gains and losses by transaction type (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Investments [Abstract] | ||||
Sales | $ 1,017 | $ 575 | $ (215) | |
Credit losses | (80) | (47) | (14) | |
Valuation of equity investments | 366 | 1,372 | (691) | |
Valuation and settlements of derivative instruments | 53 | (15) | 43 | |
Realized capital gains (losses) | $ 4 | 1,356 | 1,885 | (877) |
Fixed income and equity securities | ||||
Schedule of Available for Sale Securities | ||||
Gross realized gains | 1,209 | 607 | 120 | |
Gross realized losses | $ (221) | $ (132) | $ (347) |
Investments - Net appreciation
Investments - Net appreciation (decline) recognized in net income (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Debt and Equity Securities, FV-NI [Line Items] | ||
Total | $ 728 | $ 1,222 |
Equity securities | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Total | 478 | 1,073 |
Limited partnership interests carried at fair value | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Total | $ 250 | $ 149 |
Investments - OTTI losses by as
Investments - OTTI losses by asset type (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Other-than-temporary impairment losses by asset type | |||
Fixed income securities | $ (80) | $ (47) | $ (14) |
Total credit losses by asset type | (82) | (47) | (14) |
Commitments to fund commercial mortgage loans, bank loans and agent loans | 2 | 0 | 0 |
Fixed income securities | |||
Other-than-temporary impairment losses by asset type | |||
Fixed income securities | (5) | (14) | (10) |
Corporate | |||
Other-than-temporary impairment losses by asset type | |||
Fixed income securities | (1) | (7) | (2) |
ABS | |||
Other-than-temporary impairment losses by asset type | |||
Fixed income securities | (2) | (4) | (3) |
MBS | |||
Other-than-temporary impairment losses by asset type | |||
Fixed income securities | (2) | (3) | (5) |
Mortgage loans | |||
Other-than-temporary impairment losses by asset type | |||
Net increases related to credit losses | (39) | 0 | 0 |
Limited partnership interests | |||
Other-than-temporary impairment losses by asset type | |||
Limited partnership interests | (10) | (6) | (3) |
Bank loans | |||
Other-than-temporary impairment losses by asset type | |||
Net increases related to credit losses | (28) | (26) | 0 |
Agent loans | |||
Other-than-temporary impairment losses by asset type | |||
Net increases related to credit losses | $ 0 | $ (1) | $ (1) |
Investments - Unrealized net ca
Investments - Unrealized net capital gains and losses included in AOCI (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Fair value | ||
Fixed income securities | $ 66,354 | $ 59,044 |
Short-term investments | 7,800 | 4,260 |
Derivative instruments | 0 | 0 |
Gross unrealized Gains | ||
Fixed income securities | 4,976 | 2,847 |
Short-term investments | 0 | 0 |
Derivative instruments | 0 | 0 |
Gross unrealized Losses | ||
Fixed income securities | (73) | (96) |
Short-term investments | 0 | 0 |
Derivative instruments | (3) | (3) |
Unrealized net gains (losses) | ||
Fixed income securities | 4,903 | 2,751 |
Short-term investments | 0 | 0 |
Derivative instruments | (3) | (3) |
EMA limited partnerships | (4) | (4) |
Unrealized net capital gains and losses, pre-tax | 4,896 | 2,744 |
Amounts recognized for: | ||
Insurance reserves | (496) | (126) |
DAC and DSI | (364) | (224) |
Amounts recognized | (860) | (350) |
Deferred income taxes | (856) | (507) |
Total unrealized net capital gains and losses | $ 3,180 | $ 1,887 |
Investments - Change in unreali
Investments - Change in unrealized net capital gains and losses (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Change in Unrealized Gain (Loss) Recognized in Accumulated Other Comprehensive Income (Loss) | |||
Change in unrealized net capital gains and losses | $ 2,152 | $ 2,711 | $ (1,434) |
Amounts recognized for: | |||
Insurance reserves | (370) | (126) | 315 |
DAC and DSI | (140) | (191) | 163 |
Amounts recognized | (510) | (317) | 478 |
Deferred income taxes | (349) | (505) | 202 |
Increase (decrease) in unrealized net capital gains and losses, after-tax | 1,293 | 1,889 | (754) |
EMA limited partnerships | |||
Change in Unrealized Gain (Loss) Recognized in Accumulated Other Comprehensive Income (Loss) | |||
Change in unrealized net capital gains and losses | 0 | (4) | (1) |
Fixed income securities | |||
Change in Unrealized Gain (Loss) Recognized in Accumulated Other Comprehensive Income (Loss) | |||
Change in unrealized net capital gains and losses | 2,152 | 2,715 | (1,431) |
Short-term investments | |||
Change in Unrealized Gain (Loss) Recognized in Accumulated Other Comprehensive Income (Loss) | |||
Change in unrealized net capital gains and losses | 0 | 0 | 0 |
Derivatives | |||
Change in Unrealized Gain (Loss) Recognized in Accumulated Other Comprehensive Income (Loss) | |||
Change in unrealized net capital gains and losses | $ 0 | $ 0 | $ (2) |
Investments - Principal geograp
Investments - Principal geographic distribution of commercial real estate exceeding 5% of the mortgage loans portfolio (Details) $ in Millions | Dec. 31, 2020USD ($)loan | Dec. 31, 2019USD ($) |
Schedule of Available for Sale Securities | ||
Number of loans | loan | 246 | |
Mortgage loans, net | $ | $ 4,075 | $ 4,817 |
Mortgage loans on real estate, carrying value (percentage) | 100.00% | 100.00% |
2021 | Mortgage loans | ||
Schedule of Available for Sale Securities | ||
Number of loans | loan | 28 | |
Mortgage loans, net | $ | $ 277 | |
Mortgage loans on real estate, carrying value (percentage) | 6.80% | |
2022 | Mortgage loans | ||
Schedule of Available for Sale Securities | ||
Number of loans | loan | 25 | |
Mortgage loans, net | $ | $ 388 | |
Mortgage loans on real estate, carrying value (percentage) | 9.50% | |
2023 | Mortgage loans | ||
Schedule of Available for Sale Securities | ||
Number of loans | loan | 42 | |
Mortgage loans, net | $ | $ 556 | |
Mortgage loans on real estate, carrying value (percentage) | 13.70% | |
2024 | Mortgage loans | ||
Schedule of Available for Sale Securities | ||
Number of loans | loan | 27 | |
Mortgage loans, net | $ | $ 637 | |
Mortgage loans on real estate, carrying value (percentage) | 15.60% | |
Thereafter | Mortgage loans | ||
Schedule of Available for Sale Securities | ||
Number of loans | loan | 124 | |
Mortgage loans, net | $ | $ 2,217 | |
Mortgage loans on real estate, carrying value (percentage) | 54.40% | |
Apartment complex | ||
Schedule of Available for Sale Securities | ||
Mortgage loans on real estate, carrying value (percentage) | 37.80% | 36.80% |
Office buildings | ||
Schedule of Available for Sale Securities | ||
Mortgage loans on real estate, carrying value (percentage) | 23.20% | 22.60% |
Warehouse | ||
Schedule of Available for Sale Securities | ||
Mortgage loans on real estate, carrying value (percentage) | 14.60% | 16.80% |
Retail | ||
Schedule of Available for Sale Securities | ||
Mortgage loans on real estate, carrying value (percentage) | 13.90% | 13.40% |
Other | ||
Schedule of Available for Sale Securities | ||
Mortgage loans on real estate, carrying value (percentage) | 10.50% | 10.40% |
Texas | ||
Schedule of Available for Sale Securities | ||
Mortgage loans on real estate, carrying value (percentage) | 20.60% | 16.90% |
California | ||
Schedule of Available for Sale Securities | ||
Mortgage loans on real estate, carrying value (percentage) | 14.60% | 15.10% |
Florida | ||
Schedule of Available for Sale Securities | ||
Mortgage loans on real estate, carrying value (percentage) | 6.80% | 6.40% |
Illinois | ||
Schedule of Available for Sale Securities | ||
Mortgage loans on real estate, carrying value (percentage) | 6.10% | 7.10% |
North Carolina | ||
Schedule of Available for Sale Securities | ||
Mortgage loans on real estate, carrying value (percentage) | 5.10% | 4.50% |
New Jersey | ||
Schedule of Available for Sale Securities | ||
Mortgage loans on real estate, carrying value (percentage) | 3.50% | 5.60% |
Investments - Carrying value fo
Investments - Carrying value for limited partnership interests (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Debt and Equity Securities, FV-NI [Line Items] | ||
Limited partnership interests | $ 7,609 | $ 8,078 |
EMA | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Limited partnership interests | 5,785 | 6,264 |
Fair Value | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Limited partnership interests | 1,824 | 1,814 |
Private equity | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Limited partnership interests | 6,125 | 6,131 |
Private equity | EMA | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Limited partnership interests | 4,417 | 4,463 |
Private equity | Fair Value | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Limited partnership interests | 1,708 | 1,668 |
Real estate | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Limited partnership interests | 1,074 | 1,041 |
Real estate | EMA | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Limited partnership interests | 958 | 899 |
Real estate | Fair Value | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Limited partnership interests | 116 | 142 |
Other investments | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Limited partnership interests | 410 | 906 |
Other investments | EMA | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Limited partnership interests | 410 | 902 |
Other investments | Fair Value | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Limited partnership interests | $ 0 | $ 4 |
Investments - Narrative (Detail
Investments - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Investment [Line Items] | |||
Fixed income securities | $ 66,354 | $ 59,044 | |
Short-term investments | 7,800 | 4,260 | |
Fixed income and equity securities carrying value | 1,190 | 1,740 | |
Interest income on collateral, net of fees | 3 | 5 | $ 4 |
Debt Securities below Investment Grade | 9,000 | 7,150 | |
Fixed income and short-term investments carrying value | 141 | ||
Non-income producing fixed income securities | 80 | ||
Accrued investment income | 600 | 600 | |
Mortgage loans, net | $ 4,075 | 4,817 | |
Percentage of credit concentration risk of single issuer and affiliates of shareholder's equity | 10.00% | ||
Fixed income securities | |||
Investment [Line Items] | |||
Accrued investment income | $ 548 | ||
Mortgage loans on real estate | |||
Investment [Line Items] | |||
Accrued investment income | 15 | ||
Agent loans | |||
Investment [Line Items] | |||
Accrued investment income | $ 2 | ||
High credit quality, percentage | 85.00% | ||
Allowance | $ (5) | ||
Bank loans | |||
Investment [Line Items] | |||
Accrued investment income | 4 | ||
Municipal | |||
Investment [Line Items] | |||
Fixed income securities | 9,587 | 8,620 | |
Mortgage loans on real estate | |||
Investment [Line Items] | |||
Mortgage loans, net | 4,075 | 4,817 | |
Allowance | $ (67) | $ (3) |
Investments - Principal geogr_2
Investments - Principal geographic distribution of municipal bonds (Details) | Dec. 31, 2020 | Dec. 31, 2019 |
Texas | ||
Municipal Bonds | ||
Percentage of municipal bonds carrying value | 11.00% | 12.70% |
California | ||
Municipal Bonds | ||
Percentage of municipal bonds carrying value | 12.80% | 8.60% |
Colorado | ||
Municipal Bonds | ||
Percentage of municipal bonds carrying value | 4.80% | 5.80% |
Washington | ||
Municipal Bonds | ||
Percentage of municipal bonds carrying value | 4.00% | 5.50% |
New York | ||
Municipal Bonds | ||
Percentage of municipal bonds carrying value | 5.30% | 3.70% |
Investments - Other investments
Investments - Other investments by type (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Investment [Line Items] | ||
Other, net | $ 3,689 | $ 4,005 |
Bank loans | ||
Investment [Line Items] | ||
Other, net | 1,018 | 1,204 |
Real estate | ||
Investment [Line Items] | ||
Other, net | 974 | 1,005 |
Policy loans | ||
Investment [Line Items] | ||
Other, net | 754 | 894 |
Agent loans | ||
Investment [Line Items] | ||
Other, net | 631 | 666 |
Derivatives and other | ||
Investment [Line Items] | ||
Other, net | $ 312 | $ 236 |
Investments - Rollforward of cr
Investments - Rollforward of credit loss allowance for fixed income securities (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Jan. 01, 2020 | |
Fixed income securities | ||
Credit Losses on Fixed Income Securities [Roll Forward] | ||
Beginning balance | $ 0 | |
Credit losses on securities for which credit losses not previously reported | (5) | |
Reduction of allowance related to sales | 2 | |
Write-offs | 0 | |
Ending balance | (3) | |
Fixed income securities | 3 | $ 0 |
Corporate | ||
Credit Losses on Fixed Income Securities [Roll Forward] | ||
Ending balance | (1) | |
Fixed income securities | 1 | |
ABS | ||
Credit Losses on Fixed Income Securities [Roll Forward] | ||
Ending balance | (2) | |
Fixed income securities | $ 2 |
Investments - Gross unrealized
Investments - Gross unrealized losses and fair value by the type and length of time held in continuous unrealized loss position (Details) $ in Millions | Dec. 31, 2020USD ($)contract | Dec. 31, 2019USD ($)contract |
Total unrealized losses | ||
Total unrealized losses | $ (1) | |
U.S. government and agencies | ||
Less than 12 months | ||
Number of issues | contract | 23 | 31 |
Fair value | $ 185 | $ 1,713 |
Unrealized losses | $ (1) | $ (26) |
12 months or more | ||
Number of issues | contract | 0 | 10 |
Fair value | $ 0 | $ 26 |
Unrealized losses | $ 0 | 0 |
Total unrealized losses | ||
Total unrealized losses | $ (26) | |
Municipal | ||
Less than 12 months | ||
Number of issues | contract | 47 | 307 |
Fair value | $ 148 | $ 576 |
Unrealized losses | $ (2) | $ (9) |
12 months or more | ||
Number of issues | contract | 0 | 1 |
Fair value | $ 0 | $ 14 |
Unrealized losses | 0 | (2) |
Total unrealized losses | ||
Total unrealized losses | $ (2) | $ (11) |
Corporate | ||
Less than 12 months | ||
Number of issues | contract | 127 | 186 |
Fair value | $ 1,229 | $ 1,392 |
Unrealized losses | $ (39) | $ (20) |
12 months or more | ||
Number of issues | contract | 27 | 65 |
Fair value | $ 187 | $ 485 |
Unrealized losses | (26) | (27) |
Total unrealized losses | ||
Total unrealized losses | $ (65) | $ (47) |
Foreign government | ||
Less than 12 months | ||
Number of issues | contract | 7 | 55 |
Fair value | $ 7 | $ 412 |
Unrealized losses | $ 0 | $ (4) |
12 months or more | ||
Number of issues | contract | 0 | 6 |
Fair value | $ 0 | $ 102 |
Unrealized losses | 0 | (1) |
Total unrealized losses | ||
Total unrealized losses | $ 0 | $ (5) |
ABS | ||
Less than 12 months | ||
Number of issues | contract | 22 | 36 |
Fair value | $ 160 | $ 193 |
Unrealized losses | $ (2) | $ (2) |
12 months or more | ||
Number of issues | contract | 13 | 23 |
Fair value | $ 49 | $ 160 |
Unrealized losses | (3) | (4) |
Total unrealized losses | ||
Total unrealized losses | $ (5) | $ (6) |
Mortgage-backed securities | ||
Less than 12 months | ||
Number of issues | contract | 14 | 27 |
Fair value | $ 0 | $ 15 |
Unrealized losses | $ 0 | $ 0 |
12 months or more | ||
Number of issues | contract | 67 | 123 |
Fair value | $ 0 | $ 14 |
Unrealized losses | 0 | (1) |
Total unrealized losses | ||
Total unrealized losses | $ 0 | $ (1) |
Fixed income securities | ||
Less than 12 months | ||
Number of issues | contract | 240 | 642 |
Fair value | $ 1,729 | $ 4,301 |
Unrealized losses | $ (44) | $ (61) |
12 months or more | ||
Number of issues | contract | 107 | 228 |
Fair value | $ 236 | $ 801 |
Unrealized losses | (29) | (35) |
Total unrealized losses | ||
Total unrealized losses | $ (73) | $ (96) |
Investment grade fixed income securities | ||
Less than 12 months | ||
Number of issues | contract | 163 | 581 |
Fair value | $ 1,193 | $ 3,878 |
Unrealized losses | $ (13) | $ (41) |
12 months or more | ||
Number of issues | contract | 84 | 185 |
Fair value | $ 117 | $ 594 |
Unrealized losses | (17) | (20) |
Total unrealized losses | ||
Total unrealized losses | $ (30) | $ (61) |
Below investment grade fixed income securities | ||
Less than 12 months | ||
Number of issues | contract | 77 | 61 |
Fair value | $ 536 | $ 423 |
Unrealized losses | $ (31) | $ (20) |
12 months or more | ||
Number of issues | contract | 23 | 43 |
Fair value | $ 119 | $ 207 |
Unrealized losses | (12) | (15) |
Total unrealized losses | ||
Total unrealized losses | $ (43) | $ (35) |
Investments - Gross unrealize_2
Investments - Gross unrealized losses by unrealized loss position and credit quality (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Investment [Line Items] | ||
Total unrealized losses | $ 1,000,000 | |
Investment grade | ||
Investment [Line Items] | ||
Fixed income securities with unrealized loss position less than 20% of amortized cost, net | (15,000,000) | |
Fixed income securities with unrealized loss position greater than or equal to 20% of amortized cost, net | (15,000,000) | |
Total unrealized losses | 30,000,000 | $ 61,000,000 |
Below investment grade | ||
Investment [Line Items] | ||
Fixed income securities with unrealized loss position less than 20% of amortized cost, net | (24,000,000) | |
Fixed income securities with unrealized loss position greater than or equal to 20% of amortized cost, net | (19,000,000) | |
Total unrealized losses | 43,000,000 | 35,000,000 |
Available for sale securities, unrealized losses having loss of less than twenty percent, less than 12 months | (17,000,000) | |
Unrealized losses related to securities with unrealized loss position greater than 20% of cost or amortized cost, unrealized loss position of 12 or more consecutive months | 0 | |
Fixed income securities | ||
Investment [Line Items] | ||
Fixed income securities with unrealized loss position less than 20% of amortized cost, net | (39,000,000) | |
Fixed income securities with unrealized loss position greater than or equal to 20% of amortized cost, net | (34,000,000) | |
Total unrealized losses | $ 73,000,000 | $ 96,000,000 |
Investments - Mortgage loans (D
Investments - Mortgage loans (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Investment [Line Items] | ||||
Realized capital gains (losses) | $ 4 | $ 1,356 | $ 1,885 | $ (877) |
Mortgage loans | ||||
Investment [Line Items] | ||||
Payments to acquire investments | 234 | |||
Reduction of allowance related to sales | $ 17 |
Investments - Mortgage loans am
Investments - Mortgage loans amortized cost by debt service coverage ratio distribution and year of origination (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Debt and Equity Securities, FV-NI [Line Items] | ||
Mortgage loans, net | $ 4,075 | $ 4,817 |
Mortgage loans on real estate | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Amortized cost before allowance | 4,142 | 4,820 |
Allowance | (67) | (3) |
Mortgage loans, net | 4,075 | 4,817 |
Below 1.0 | Mortgage loans on real estate | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Amortized cost before allowance | 15 | 56 |
1.0 - 1.25 | Mortgage loans on real estate | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Amortized cost before allowance | 338 | 225 |
1.26 - 1.50 | Mortgage loans on real estate | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Amortized cost before allowance | 1,089 | 1,237 |
Above 1.50 | Mortgage loans on real estate | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Amortized cost before allowance | 2,700 | $ 3,302 |
2015 and prior | Mortgage loans on real estate | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Amortized cost before allowance | 1,563 | |
2015 and prior | Below 1.0 | Mortgage loans on real estate | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Amortized cost before allowance | 15 | |
2015 and prior | 1.0 - 1.25 | Mortgage loans on real estate | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Amortized cost before allowance | 133 | |
2015 and prior | 1.26 - 1.50 | Mortgage loans on real estate | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Amortized cost before allowance | 378 | |
2015 and prior | Above 1.50 | Mortgage loans on real estate | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Amortized cost before allowance | 1,037 | |
2016 | Mortgage loans on real estate | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Amortized cost before allowance | 464 | |
2016 | Below 1.0 | Mortgage loans on real estate | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Amortized cost before allowance | 0 | |
2016 | 1.0 - 1.25 | Mortgage loans on real estate | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Amortized cost before allowance | 27 | |
2016 | 1.26 - 1.50 | Mortgage loans on real estate | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Amortized cost before allowance | 41 | |
2016 | Above 1.50 | Mortgage loans on real estate | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Amortized cost before allowance | 396 | |
2017 | Mortgage loans on real estate | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Amortized cost before allowance | 463 | |
2017 | Below 1.0 | Mortgage loans on real estate | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Amortized cost before allowance | 0 | |
2017 | 1.0 - 1.25 | Mortgage loans on real estate | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Amortized cost before allowance | 36 | |
2017 | 1.26 - 1.50 | Mortgage loans on real estate | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Amortized cost before allowance | 144 | |
2017 | Above 1.50 | Mortgage loans on real estate | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Amortized cost before allowance | 283 | |
2018 | Mortgage loans on real estate | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Amortized cost before allowance | 630 | |
2018 | Below 1.0 | Mortgage loans on real estate | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Amortized cost before allowance | 0 | |
2018 | 1.0 - 1.25 | Mortgage loans on real estate | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Amortized cost before allowance | 70 | |
2018 | 1.26 - 1.50 | Mortgage loans on real estate | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Amortized cost before allowance | 187 | |
2018 | Above 1.50 | Mortgage loans on real estate | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Amortized cost before allowance | 373 | |
2019 | Mortgage loans on real estate | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Amortized cost before allowance | 880 | |
2019 | Below 1.0 | Mortgage loans on real estate | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Amortized cost before allowance | 0 | |
2019 | 1.0 - 1.25 | Mortgage loans on real estate | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Amortized cost before allowance | 48 | |
2019 | 1.26 - 1.50 | Mortgage loans on real estate | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Amortized cost before allowance | 333 | |
2019 | Above 1.50 | Mortgage loans on real estate | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Amortized cost before allowance | 499 | |
Current | Mortgage loans on real estate | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Amortized cost before allowance | 142 | |
Current | Below 1.0 | Mortgage loans on real estate | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Amortized cost before allowance | 0 | |
Current | 1.0 - 1.25 | Mortgage loans on real estate | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Amortized cost before allowance | 24 | |
Current | 1.26 - 1.50 | Mortgage loans on real estate | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Amortized cost before allowance | 6 | |
Current | Above 1.50 | Mortgage loans on real estate | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Amortized cost before allowance | $ 112 |
Investments - Rollforward of _2
Investments - Rollforward of credit loss allowance for mortgage loans (Details) - Mortgage loans on real estate - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Debt Securities, Held-to-maturity, Allowance for Credit Loss [Roll Forward] | |||
Beginning balance | $ (3) | ||
Net increases related to credit losses | (39) | $ 0 | $ 0 |
Reduction of allowance related to sales | 17 | ||
Write-offs | 0 | ||
Ending balance | (67) | (3) | |
Cumulative effect of change in accounting principle | |||
Debt Securities, Held-to-maturity, Allowance for Credit Loss [Roll Forward] | |||
Beginning balance | $ (42) | ||
Ending balance | $ (42) |
Investments - Bank loans amorti
Investments - Bank loans amortized cost by credit quality and year of acquisition (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Schedule of Available for Sale Securities | ||
Mortgage loans, net | $ 4,075 | $ 4,817 |
Bank loans | ||
Schedule of Available for Sale Securities | ||
Amortized cost before allowance | 1,085 | |
Allowance | (67) | |
Mortgage loans, net | 1,018 | |
2015 and prior | Bank loans | ||
Schedule of Available for Sale Securities | ||
Amortized cost before allowance | 38 | |
2016 | Bank loans | ||
Schedule of Available for Sale Securities | ||
Amortized cost before allowance | 41 | |
2017 | Bank loans | ||
Schedule of Available for Sale Securities | ||
Amortized cost before allowance | 193 | |
2018 | Bank loans | ||
Schedule of Available for Sale Securities | ||
Amortized cost before allowance | 256 | |
2019 | Bank loans | ||
Schedule of Available for Sale Securities | ||
Amortized cost before allowance | 263 | |
Current | Bank loans | ||
Schedule of Available for Sale Securities | ||
Amortized cost before allowance | 294 | |
BBB | Bank loans | ||
Schedule of Available for Sale Securities | ||
Amortized cost before allowance | 43 | |
BBB | 2015 and prior | Bank loans | ||
Schedule of Available for Sale Securities | ||
Amortized cost before allowance | 0 | |
BBB | 2016 | Bank loans | ||
Schedule of Available for Sale Securities | ||
Amortized cost before allowance | 0 | |
BBB | 2017 | Bank loans | ||
Schedule of Available for Sale Securities | ||
Amortized cost before allowance | 9 | |
BBB | 2018 | Bank loans | ||
Schedule of Available for Sale Securities | ||
Amortized cost before allowance | 7 | |
BBB | 2019 | Bank loans | ||
Schedule of Available for Sale Securities | ||
Amortized cost before allowance | 14 | |
BBB | Current | Bank loans | ||
Schedule of Available for Sale Securities | ||
Amortized cost before allowance | 13 | |
BB | Bank loans | ||
Schedule of Available for Sale Securities | ||
Amortized cost before allowance | 212 | |
BB | 2015 and prior | Bank loans | ||
Schedule of Available for Sale Securities | ||
Amortized cost before allowance | 20 | |
BB | 2016 | Bank loans | ||
Schedule of Available for Sale Securities | ||
Amortized cost before allowance | 2 | |
BB | 2017 | Bank loans | ||
Schedule of Available for Sale Securities | ||
Amortized cost before allowance | 25 | |
BB | 2018 | Bank loans | ||
Schedule of Available for Sale Securities | ||
Amortized cost before allowance | 58 | |
BB | 2019 | Bank loans | ||
Schedule of Available for Sale Securities | ||
Amortized cost before allowance | 53 | |
BB | Current | Bank loans | ||
Schedule of Available for Sale Securities | ||
Amortized cost before allowance | 54 | |
B | Bank loans | ||
Schedule of Available for Sale Securities | ||
Amortized cost before allowance | 607 | |
B | 2015 and prior | Bank loans | ||
Schedule of Available for Sale Securities | ||
Amortized cost before allowance | 11 | |
B | 2016 | Bank loans | ||
Schedule of Available for Sale Securities | ||
Amortized cost before allowance | 23 | |
B | 2017 | Bank loans | ||
Schedule of Available for Sale Securities | ||
Amortized cost before allowance | 115 | |
B | 2018 | Bank loans | ||
Schedule of Available for Sale Securities | ||
Amortized cost before allowance | 141 | |
B | 2019 | Bank loans | ||
Schedule of Available for Sale Securities | ||
Amortized cost before allowance | 122 | |
B | Current | Bank loans | ||
Schedule of Available for Sale Securities | ||
Amortized cost before allowance | 195 | |
CCC and below | Bank loans | ||
Schedule of Available for Sale Securities | ||
Amortized cost before allowance | 223 | |
CCC and below | 2015 and prior | Bank loans | ||
Schedule of Available for Sale Securities | ||
Amortized cost before allowance | 7 | |
CCC and below | 2016 | Bank loans | ||
Schedule of Available for Sale Securities | ||
Amortized cost before allowance | 16 | |
CCC and below | 2017 | Bank loans | ||
Schedule of Available for Sale Securities | ||
Amortized cost before allowance | 44 | |
CCC and below | 2018 | Bank loans | ||
Schedule of Available for Sale Securities | ||
Amortized cost before allowance | 50 | |
CCC and below | 2019 | Bank loans | ||
Schedule of Available for Sale Securities | ||
Amortized cost before allowance | 74 | |
CCC and below | Current | Bank loans | ||
Schedule of Available for Sale Securities | ||
Amortized cost before allowance | $ 32 |
Investments - Rollforward of _3
Investments - Rollforward of credit loss allowance for bank loans (Details) - Bank loans $ in Millions | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Debt and Equity Securities, FV-NI [Line Items] | |
Beginning balance | $ 0 |
Net increases related to credit losses | (28) |
Reduction of allowance related to sales | 9 |
Write-offs | 5 |
Ending balance | (67) |
Cumulative effect of change in accounting principle | |
Debt and Equity Securities, FV-NI [Line Items] | |
Beginning balance | $ (53) |
Ending balance |
Fair Value of Assets and Liab_3
Fair Value of Assets and Liabilities - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Fair value of assets and liabilities measured on recurring and non-recurring basis | ||
Commitments to invest in limited partnership interests | $ 2,933 | $ 2,837 |
Fixed income securities | 66,354 | 59,044 |
Fair Value | ||
Fair value of assets and liabilities measured on recurring and non-recurring basis | ||
Commitments to invest in limited partnership interests | $ 395 | |
Fair Value | Minimum | ||
Fair value of assets and liabilities measured on recurring and non-recurring basis | ||
Investment assets, useful life | 10 years | |
Fair Value | Maximum | ||
Fair value of assets and liabilities measured on recurring and non-recurring basis | ||
Investment assets, useful life | 12 years | |
Fixed Income Securities Valued Based on Nonbinding Broker Quotes | ||
Fair value of assets and liabilities measured on recurring and non-recurring basis | ||
Total assets at fair value | $ 93 | 50 |
Municipal Not Rated by Third Party Credit Rating Agencies | ||
Fair value of assets and liabilities measured on recurring and non-recurring basis | ||
Total assets at fair value | 35 | 36 |
Significant unobservable inputs (Level 3) | ||
Fair value of assets and liabilities measured on recurring and non-recurring basis | ||
Total assets at fair value | 832 | 738 |
Significant unobservable inputs (Level 3) | Recurring | ||
Fair value of assets and liabilities measured on recurring and non-recurring basis | ||
Fixed income securities | $ 379 | 342 |
Total assets at fair value | $ 738 |
Fair Value of Assets and Liab_4
Fair Value of Assets and Liabilities - Assets and liabilities measured at fair value on a recurring and non-recurring basis (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Assets | ||
Fixed income securities | $ 66,354 | $ 59,044 |
Equity securities | 4,710 | 8,162 |
Short-term investments | 7,800 | 4,256 |
Separate account assets | 3,344 | 3,044 |
Counterparty and cash collateral netting | (15) | |
Assets at fair value counterparty and cash collateral netting | $ (15) | $ (40) |
Assets as a percent of assets measured at fair value | 0.00% | (0.10%) |
Total | $ 84,237 | $ 76,461 |
Liabilities | ||
Liabilities as a percent of liabilities measured at fair value | (4.20%) | (2.20%) |
U.S. government and agencies | ||
Assets | ||
Fixed income securities | $ 3,222 | $ 5,086 |
Municipal | ||
Assets | ||
Fixed income securities | 9,587 | 8,620 |
Foreign government | ||
Assets | ||
Fixed income securities | 1,055 | 979 |
ABS | ||
Assets | ||
Fixed income securities | 1,270 | 862 |
MBS | ||
Assets | ||
Fixed income securities | 78 | 419 |
Quoted prices in active markets for identical assets (Level 1) | ||
Assets | ||
Total assets at fair value | $ 17,567 | $ 17,081 |
Assets as a percent of assets measured at fair value | 21.30% | 22.90% |
Liabilities | ||
Liabilities as a percent of liabilities measured at fair value | 0.00% | 0.00% |
Significant other observable inputs (Level 2) | ||
Assets | ||
Total assets at fair value | $ 64,029 | $ 56,868 |
Assets as a percent of assets measured at fair value | 77.70% | 76.20% |
Liabilities | ||
Liabilities as a percent of liabilities measured at fair value | 23.80% | 15.70% |
Significant unobservable inputs (Level 3) | ||
Assets | ||
Total assets at fair value | $ 832 | $ 738 |
Assets as a percent of assets measured at fair value | 1.00% | 1.00% |
Liabilities | ||
Liabilities as a percent of liabilities measured at fair value | 80.40% | 86.50% |
Investments reported at NAV | ||
Assets | ||
Investments measured using the net asset value practical expedient | $ 1,824 | $ 1,814 |
Recurring | ||
Assets | ||
Other investments: Free-standing derivatives, Counterparty and cash collateral netting | (15) | (40) |
Counterparty and cash collateral netting | (40) | |
Liabilities | ||
Counterparty and cash collateral netting | 27 | 12 |
Recurring | Quoted prices in active markets for identical assets (Level 1) | ||
Assets | ||
Fixed income securities | 2,863 | 4,689 |
Equity securities | 3,882 | 7,407 |
Short-term investments | 7,477 | 1,940 |
Other investments: Free-standing derivatives | 0 | 0 |
Separate account assets | 3,344 | 3,044 |
Other assets | 1 | 1 |
Total assets at fair value | 17,081 | |
Liabilities | ||
Other liabilities: Free-standing derivatives | 0 | 0 |
Total liabilities at fair value | 0 | 0 |
Recurring | Quoted prices in active markets for identical assets (Level 1) | Contractholder funds: Derivatives embedded in life and annuity contracts | ||
Liabilities | ||
Contractholder funds: Derivatives embedded in life and annuity contracts | 0 | 0 |
Recurring | Quoted prices in active markets for identical assets (Level 1) | U.S. government and agencies | ||
Assets | ||
Fixed income securities | 2,863 | 4,689 |
Recurring | Quoted prices in active markets for identical assets (Level 1) | Municipal | ||
Assets | ||
Fixed income securities | 0 | 0 |
Recurring | Quoted prices in active markets for identical assets (Level 1) | Corporate - public | ||
Assets | ||
Fixed income securities | 0 | 0 |
Recurring | Quoted prices in active markets for identical assets (Level 1) | Corporate - privately placed | ||
Assets | ||
Fixed income securities | 0 | 0 |
Recurring | Quoted prices in active markets for identical assets (Level 1) | Foreign government | ||
Assets | ||
Fixed income securities | 0 | 0 |
Recurring | Quoted prices in active markets for identical assets (Level 1) | ABS | ||
Assets | ||
Fixed income securities | 0 | 0 |
Recurring | Quoted prices in active markets for identical assets (Level 1) | MBS | ||
Assets | ||
Fixed income securities | 0 | 0 |
Recurring | Significant other observable inputs (Level 2) | ||
Assets | ||
Fixed income securities | 63,112 | 54,013 |
Equity securities | 410 | 384 |
Short-term investments | 288 | 2,291 |
Other investments: Free-standing derivatives | 219 | 180 |
Separate account assets | 0 | 0 |
Other assets | 0 | 0 |
Total assets at fair value | 56,868 | |
Liabilities | ||
Other liabilities: Free-standing derivatives | (153) | (84) |
Total liabilities at fair value | (153) | (84) |
Recurring | Significant other observable inputs (Level 2) | Contractholder funds: Derivatives embedded in life and annuity contracts | ||
Liabilities | ||
Contractholder funds: Derivatives embedded in life and annuity contracts | 0 | 0 |
Recurring | Significant other observable inputs (Level 2) | U.S. government and agencies | ||
Assets | ||
Fixed income securities | 359 | 397 |
Recurring | Significant other observable inputs (Level 2) | Municipal | ||
Assets | ||
Fixed income securities | 9,520 | 8,558 |
Recurring | Significant other observable inputs (Level 2) | Corporate - public | ||
Assets | ||
Fixed income securities | 36,346 | 30,819 |
Recurring | Significant other observable inputs (Level 2) | Corporate - privately placed | ||
Assets | ||
Fixed income securities | 14,568 | 12,084 |
Recurring | Significant other observable inputs (Level 2) | Foreign government | ||
Assets | ||
Fixed income securities | 1,055 | 979 |
Recurring | Significant other observable inputs (Level 2) | ABS | ||
Assets | ||
Fixed income securities | 1,213 | 797 |
Recurring | Significant other observable inputs (Level 2) | MBS | ||
Assets | ||
Fixed income securities | 51 | 379 |
Recurring | Significant unobservable inputs (Level 3) | ||
Assets | ||
Fixed income securities | 379 | 342 |
Equity securities | 418 | 371 |
Short-term investments | 35 | 25 |
Other investments: Free-standing derivatives | 0 | 0 |
Separate account assets | 0 | 0 |
Other assets | 0 | 0 |
Total assets at fair value | 738 | |
Liabilities | ||
Other liabilities: Free-standing derivatives | 0 | 0 |
Total liabilities at fair value | (516) | (462) |
Recurring | Significant unobservable inputs (Level 3) | Contractholder funds: Derivatives embedded in life and annuity contracts | ||
Liabilities | ||
Contractholder funds: Derivatives embedded in life and annuity contracts | (516) | (462) |
Recurring | Significant unobservable inputs (Level 3) | U.S. government and agencies | ||
Assets | ||
Fixed income securities | 0 | 0 |
Recurring | Significant unobservable inputs (Level 3) | Municipal | ||
Assets | ||
Fixed income securities | 67 | 62 |
Recurring | Significant unobservable inputs (Level 3) | Corporate - public | ||
Assets | ||
Fixed income securities | 98 | 61 |
Recurring | Significant unobservable inputs (Level 3) | Corporate - privately placed | ||
Assets | ||
Fixed income securities | 130 | 114 |
Recurring | Significant unobservable inputs (Level 3) | Foreign government | ||
Assets | ||
Fixed income securities | 0 | |
Fair value | ||
Assets | ||
Total assets at fair value | $ 82,413 | $ 74,647 |
Assets as a percent of assets measured at fair value | 100.00% | 100.00% |
Liabilities | ||
Liabilities as a percent of liabilities measured at fair value | 100.00% | 100.00% |
Fair value | Recurring | ||
Assets | ||
Fixed income securities | $ 66,354 | $ 59,044 |
Equity securities | 4,710 | 8,162 |
Short-term investments | 7,800 | 4,256 |
Other investments: Free-standing derivatives | 204 | 140 |
Separate account assets | 3,344 | 3,044 |
Other assets | 1 | 1 |
Total assets at fair value | 74,647 | |
Liabilities | ||
Other liabilities: Free-standing derivatives | (126) | (72) |
Total liabilities at fair value | (642) | (534) |
Fair value | Recurring | Contractholder funds: Derivatives embedded in life and annuity contracts | ||
Liabilities | ||
Contractholder funds: Derivatives embedded in life and annuity contracts | (516) | (462) |
Fair value | Recurring | U.S. government and agencies | ||
Assets | ||
Fixed income securities | 3,222 | 5,086 |
Fair value | Recurring | Municipal | ||
Assets | ||
Fixed income securities | 9,587 | 8,620 |
Fair value | Recurring | Corporate - public | ||
Assets | ||
Fixed income securities | 36,444 | 30,880 |
Fair value | Recurring | Corporate - privately placed | ||
Assets | ||
Fixed income securities | 14,698 | 12,198 |
Fair value | Recurring | Foreign government | ||
Assets | ||
Fixed income securities | 1,055 | 979 |
Fair value | Recurring | ABS | ||
Assets | ||
Fixed income securities | 1,270 | 862 |
Fair value | Recurring | MBS | ||
Assets | ||
Fixed income securities | 78 | 419 |
Fair value | Recurring | Significant unobservable inputs (Level 3) | Foreign government | ||
Assets | ||
Fixed income securities | 0 | |
Fair value | Recurring | Significant unobservable inputs (Level 3) | ABS | ||
Assets | ||
Fixed income securities | 57 | 65 |
Fair value | Recurring | Significant unobservable inputs (Level 3) | MBS | ||
Assets | ||
Fixed income securities | $ 27 | $ 40 |
Fair Value of Assets and Liab_5
Fair Value of Assets and Liabilities - Quantitative information about Level 3 instruments (Details) - Equity-indexed and forward starting options in life and annuity product contracts - Significant unobservable inputs (Level 3) $ in Millions | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) |
Quantitative information about the significant unobservable inputs | ||
Fair value | $ (483) | $ (430) |
Projected option cost | Minimum | ||
Quantitative information about the significant unobservable inputs | ||
Weighted average | 0.010 | 0.010 |
Projected option cost | Maximum | ||
Quantitative information about the significant unobservable inputs | ||
Weighted average | 0.042 | 0.042 |
Projected option cost | Weighted Average | ||
Quantitative information about the significant unobservable inputs | ||
Weighted average | 0.0280 | 0.0267 |
Fair Value of Assets and Liab_6
Fair Value of Assets and Liabilities - Rollforward of level 3 assets and liabilities held at fair value (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Assets | |||
Balance at beginning of period | $ 738 | $ 697 | $ 837 |
Total gains (losses) included in: net income | 0 | 30 | 37 |
Total gains (losses) included in: OCI | (12) | 6 | (6) |
Transfers into Level 3 | 128 | 158 | 79 |
Transfers out of Level 3 | (116) | (330) | (325) |
Purchases | 240 | 375 | 367 |
Sales | (95) | (173) | (208) |
Issues | 0 | 0 | 0 |
Settlements | (51) | (25) | (84) |
Balance at end of period | 832 | 738 | 697 |
Liabilities | |||
Balance at beginning of period | (462) | (224) | (286) |
Total gains (losses) included in: net income | (43) | (61) | 58 |
Total gains (losses) included in: OCI | 0 | 0 | 0 |
Transfers into Level 3 | 0 | (175) | 0 |
Transfers out of Level 3 | 0 | 0 | 0 |
Purchases | 0 | 0 | 0 |
Sales | 0 | 0 | 0 |
Issues | (34) | (16) | (2) |
Settlements | 23 | 14 | 6 |
Balance at end of period | (516) | (462) | (224) |
Fair value assets and liabilities measured on recurring basis, gain (loss) included in earnings | |||
Gain (loss) included in earnings | (43) | (31) | 95 |
Net investment income | |||
Assets | |||
Total gains (losses) included in: net income | (23) | (2) | 0 |
Realized capital gains (losses) | |||
Assets | |||
Total gains (losses) included in: net income | 23 | 32 | 37 |
Life contract benefits | |||
Assets | |||
Total gains (losses) included in: net income | (1) | 7 | (5) |
Interest credited to contractholder funds | |||
Assets | |||
Total gains (losses) included in: net income | (42) | (68) | 63 |
Contractholder funds: Derivatives embedded in life and annuity contracts | |||
Liabilities | |||
Balance at beginning of period | (462) | (224) | (286) |
Total gains (losses) included in: net income | (43) | (61) | 58 |
Total gains (losses) included in: OCI | 0 | 0 | 0 |
Transfers into Level 3 | 0 | (175) | 0 |
Transfers out of Level 3 | 0 | 0 | 0 |
Purchases | 0 | 0 | 0 |
Sales | 0 | 0 | 0 |
Issues | (34) | (16) | (2) |
Settlements | 23 | 14 | 6 |
Balance at end of period | (516) | (462) | (224) |
Municipal | |||
Assets | |||
Balance at beginning of period | 62 | 70 | 101 |
Total gains (losses) included in: net income | 1 | 1 | 1 |
Total gains (losses) included in: OCI | 2 | 4 | (2) |
Transfers into Level 3 | 20 | 0 | 0 |
Transfers out of Level 3 | (11) | (5) | (26) |
Purchases | 0 | 0 | 10 |
Sales | (4) | (5) | (8) |
Issues | 0 | 0 | 0 |
Settlements | (3) | (3) | (6) |
Balance at end of period | 67 | 62 | 70 |
Corporate - public | |||
Assets | |||
Balance at beginning of period | 61 | 70 | 108 |
Total gains (losses) included in: net income | (1) | 0 | 0 |
Total gains (losses) included in: OCI | 1 | 3 | (3) |
Transfers into Level 3 | 2 | 30 | 17 |
Transfers out of Level 3 | 0 | (113) | (21) |
Purchases | 55 | 86 | 10 |
Sales | (19) | (11) | (38) |
Issues | 0 | 0 | 0 |
Settlements | (1) | (4) | (3) |
Balance at end of period | 98 | 61 | 70 |
Corporate - privately placed | |||
Assets | |||
Balance at beginning of period | 114 | 90 | 224 |
Total gains (losses) included in: net income | 2 | (1) | (1) |
Total gains (losses) included in: OCI | (12) | 2 | (3) |
Transfers into Level 3 | 52 | 43 | 20 |
Transfers out of Level 3 | (31) | (2) | (119) |
Purchases | 25 | 4 | 22 |
Sales | (17) | (13) | (5) |
Issues | 0 | 0 | 0 |
Settlements | (3) | (9) | (48) |
Balance at end of period | 130 | 114 | 90 |
ABS | |||
Assets | |||
Balance at beginning of period | 65 | 69 | 147 |
Total gains (losses) included in: net income | 0 | 1 | 0 |
Total gains (losses) included in: OCI | (1) | (1) | 2 |
Transfers into Level 3 | 54 | 76 | 42 |
Transfers out of Level 3 | (49) | (210) | (159) |
Purchases | 48 | 159 | 160 |
Sales | (32) | (22) | (97) |
Issues | 0 | 0 | 0 |
Settlements | (28) | (7) | (26) |
Balance at end of period | 57 | 65 | 69 |
MBS | |||
Assets | |||
Balance at beginning of period | 40 | 26 | 26 |
Total gains (losses) included in: net income | 1 | 0 | 0 |
Total gains (losses) included in: OCI | (2) | (2) | 0 |
Transfers into Level 3 | 0 | 9 | 0 |
Transfers out of Level 3 | 0 | 0 | 0 |
Purchases | 11 | 9 | 1 |
Sales | (7) | 0 | 0 |
Issues | 0 | 0 | 0 |
Settlements | (16) | (2) | (1) |
Balance at end of period | 27 | 40 | 26 |
Fixed income securities | |||
Assets | |||
Balance at beginning of period | 342 | 325 | 606 |
Total gains (losses) included in: net income | 3 | 1 | 0 |
Total gains (losses) included in: OCI | (12) | 6 | (6) |
Transfers into Level 3 | 128 | 158 | 79 |
Transfers out of Level 3 | (91) | (330) | (325) |
Purchases | 139 | 258 | 203 |
Sales | (79) | (51) | (148) |
Issues | 0 | 0 | 0 |
Settlements | (51) | (25) | (84) |
Balance at end of period | 379 | 342 | 325 |
Equity securities | |||
Assets | |||
Balance at beginning of period | 371 | 341 | 210 |
Total gains (losses) included in: net income | (3) | 30 | 37 |
Total gains (losses) included in: OCI | 0 | 0 | 0 |
Transfers into Level 3 | 0 | 0 | 0 |
Transfers out of Level 3 | 0 | 0 | 0 |
Purchases | 66 | 82 | 109 |
Sales | (16) | (82) | (15) |
Issues | 0 | 0 | 0 |
Settlements | 0 | 0 | 0 |
Balance at end of period | 418 | 371 | 341 |
Short-term investments | |||
Assets | |||
Balance at beginning of period | 25 | 30 | 20 |
Total gains (losses) included in: net income | 0 | 0 | 0 |
Total gains (losses) included in: OCI | 0 | 0 | 0 |
Transfers into Level 3 | 0 | 0 | 0 |
Transfers out of Level 3 | (25) | 0 | 0 |
Purchases | 35 | 35 | 55 |
Sales | 0 | (40) | (45) |
Issues | 0 | 0 | 0 |
Settlements | 0 | 0 | 0 |
Balance at end of period | 35 | 25 | 30 |
Free-standing derivatives, net | |||
Assets | |||
Balance at beginning of period | $ 0 | 1 | 1 |
Total gains (losses) included in: net income | (1) | 0 | |
Total gains (losses) included in: OCI | 0 | 0 | |
Transfers into Level 3 | 0 | 0 | |
Transfers out of Level 3 | 0 | 0 | |
Purchases | 0 | 0 | |
Sales | 0 | 0 | |
Issues | 0 | 0 | |
Settlements | 0 | 0 | |
Balance at end of period | $ 0 | $ 1 |
Fair Value of Assets and Liab_7
Fair Value of Assets and Liabilities - Change in level 3 assets and liabilities (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Gains (losses) included in net income for Level 3 assets and liabilities: | |||
Fair value assets measured on recurring basis, change in unrealized gain (loss) included in earnings | $ (2) | $ 6 | $ 36 |
Gains (losses) for Level 3 liabilities still held at the balance sheet date, included in earnings | (43) | (61) | 58 |
Gains (losses) for Level 3 assets and liabilities still held at the balance sheet date, included in earnings | (45) | (55) | 94 |
Changes in unrealized net capital gains and losses reported in OCI | (9) | ||
Net investment income | |||
Gains (losses) included in net income for Level 3 assets and liabilities: | |||
Gains (losses) for Level 3 assets still held at the balance sheet date | (24) | (2) | 0 |
Realized capital gains (losses) | |||
Gains (losses) included in net income for Level 3 assets and liabilities: | |||
Gains (losses) for Level 3 assets still held at the balance sheet date | 22 | 8 | 36 |
Life contract benefits | |||
Gains (losses) included in net income for Level 3 assets and liabilities: | |||
Gains (losses) for Level 3 assets still held at the balance sheet date | (1) | 7 | (5) |
Interest credited to contractholder funds | |||
Gains (losses) included in net income for Level 3 assets and liabilities: | |||
Gains (losses) for Level 3 assets still held at the balance sheet date | (42) | (68) | 63 |
Contractholder funds: Derivatives embedded in life and annuity contracts | |||
Gains (losses) included in net income for Level 3 assets and liabilities: | |||
Gains (losses) for Level 3 liabilities still held at the balance sheet date, included in earnings | (43) | (61) | 58 |
Municipal | |||
Gains (losses) included in net income for Level 3 assets and liabilities: | |||
Fair value assets measured on recurring basis, change in unrealized gain (loss) included in earnings | 1 | 1 | 0 |
Changes in unrealized net capital gains and losses reported in OCI | 2 | ||
Fixed income securities | |||
Gains (losses) included in net income for Level 3 assets and liabilities: | |||
Fair value assets measured on recurring basis, change in unrealized gain (loss) included in earnings | 1 | 1 | 0 |
Equity securities | |||
Gains (losses) included in net income for Level 3 assets and liabilities: | |||
Fair value assets measured on recurring basis, change in unrealized gain (loss) included in earnings | (3) | 6 | 36 |
Free-standing derivatives, net | |||
Gains (losses) included in net income for Level 3 assets and liabilities: | |||
Fair value assets measured on recurring basis, change in unrealized gain (loss) included in earnings | 0 | (1) | 0 |
Corporate - public | |||
Gains (losses) included in net income for Level 3 assets and liabilities: | |||
Fair value assets measured on recurring basis, change in unrealized gain (loss) included in earnings | (2) | 0 | 0 |
Changes in unrealized net capital gains and losses reported in OCI | 1 | ||
Corporate - privately placed | |||
Gains (losses) included in net income for Level 3 assets and liabilities: | |||
Fair value assets measured on recurring basis, change in unrealized gain (loss) included in earnings | 2 | $ 0 | $ 0 |
Changes in unrealized net capital gains and losses reported in OCI | (11) | ||
ABS | |||
Gains (losses) included in net income for Level 3 assets and liabilities: | |||
Changes in unrealized net capital gains and losses reported in OCI | $ (1) |
Fair Value of Assets and Liab_8
Fair Value of Assets and Liabilities - Carrying values and fair value estimates (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Financial assets | ||||
Mortgage loans, net | $ 4,075 | $ 4,817 | ||
Financial liabilities | ||||
Long-term debt | 7,825 | 6,631 | ||
Liability for collateral | 1,249 | 1,829 | $ 1,458 | $ 1,124 |
Significant unobservable inputs (Level 3) | Amortized cost, net | ||||
Financial assets | ||||
Mortgage loans, net | 4,075 | 4,817 | ||
Bank loans | 1,018 | 1,204 | ||
Agent loans | 631 | 666 | ||
Financial liabilities | ||||
Contractholder funds on investment contracts | 7,795 | 8,438 | ||
Significant unobservable inputs (Level 3) | Fair value | ||||
Financial assets | ||||
Mortgage loans, net | 4,348 | 5,012 | ||
Bank loans | 1,053 | 1,185 | ||
Agent loans | 634 | 664 | ||
Financial liabilities | ||||
Contractholder funds on investment contracts | 9,089 | 9,158 | ||
Significant other observable inputs (Level 2) | Amortized cost, net | ||||
Financial liabilities | ||||
Long-term debt | 7,825 | 6,631 | ||
Liability for collateral | 1,249 | 1,829 | ||
Significant other observable inputs (Level 2) | Fair value | ||||
Financial liabilities | ||||
Long-term debt | 9,489 | 7,738 | ||
Liability for collateral | $ 1,249 | $ 1,829 |
Derivative Financial Instrume_3
Derivative Financial Instruments and Off-balance sheet Financial Instruments - Narrative (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Derivative Financial Instruments and Off-balance sheet Financial Instruments | ||
Potential recoveries | $ 0 | |
Cash and securities pledged as collateral, from counterparties | 7,000,000 | |
Securities pledged as collateral to counterparties | 19,000,000 | |
Collateral posted | 17,000,000 | $ 3,000,000 |
Margin deposits | 60,000,000 | |
Margin deposit liabilities | $ 12,000,000 |
Derivative Financial Instrume_4
Derivative Financial Instruments and Off-balance sheet Financial Instruments - Summary of the volume and fair value positions (Details) $ in Millions | Dec. 31, 2020USD ($)contract | Dec. 31, 2019USD ($)contract |
Derivatives, Fair Value | ||
Total asset derivatives, notional amount | $ 2,009 | $ 75 |
Total liability derivatives, notional amount | 3,182 | 3,403 |
Total derivatives, notional amount | $ 5,191 | $ 3,478 |
Total asset derivatives, number of contracts | contract | 4,440 | 10,740 |
Total liability derivatives, number of contracts | contract | 4,108 | 6,492 |
Total derivatives, number of contracts | contract | 8,548 | 17,232 |
Net amount on balance sheet | $ 206 | $ 142 |
Net amount on balance sheet | (655) | (507) |
Total derivatives, fair value, net | (449) | (365) |
Asset derivatives, gross asset | 218 | 142 |
Liability derivatives, gross asset | 2 | 39 |
Asset derivatives, gross liability | (12) | 0 |
Liability derivatives, gross liability | (657) | (546) |
Derivatives not designated as accounting hedging instruments | ||
Derivatives, Fair Value | ||
Total asset derivatives, notional amount | $ 2,006 | $ 73 |
Total asset derivatives, number of contracts | contract | 4,440 | 10,740 |
Net amount on balance sheet | $ 206 | $ 142 |
Asset derivatives, gross asset | 218 | 142 |
Asset derivatives, gross liability | (12) | $ 0 |
Other liabilities & accrued expenses | Derivatives not designated as accounting hedging instruments | ||
Derivatives, Fair Value | ||
Total liability derivatives, number of contracts | contract | 1,089 | |
Net amount on balance sheet | $ 0 | |
Liability derivatives, gross asset | 0 | |
Liability derivatives, gross liability | 0 | |
Other | Other assets | Derivatives designated as accounting hedging instruments | ||
Derivatives, Fair Value | ||
Total asset derivatives, notional amount | 3 | 2 |
Net amount on balance sheet | 0 | 0 |
Asset derivatives, gross asset | 0 | 0 |
Asset derivatives, gross liability | 0 | 0 |
Interest rate cap agreements | Other investments | Derivatives not designated as accounting hedging instruments | ||
Derivatives, Fair Value | ||
Total asset derivatives, notional amount | 13 | |
Net amount on balance sheet | 0 | |
Asset derivatives, gross asset | 0 | |
Asset derivatives, gross liability | 0 | |
Interest rate cap agreements | Other liabilities & accrued expenses | Derivatives not designated as accounting hedging instruments | ||
Derivatives, Fair Value | ||
Total liability derivatives, notional amount | 19 | 34 |
Net amount on balance sheet | 0 | 0 |
Liability derivatives, gross asset | 0 | 0 |
Liability derivatives, gross liability | $ 0 | $ 0 |
Futures | Other assets | Derivatives not designated as accounting hedging instruments | ||
Derivatives, Fair Value | ||
Total asset derivatives, number of contracts | contract | 602 | 3,668 |
Net amount on balance sheet | $ 0 | $ 0 |
Asset derivatives, gross asset | 0 | 0 |
Asset derivatives, gross liability | $ 0 | $ 0 |
Futures | Other liabilities & accrued expenses | Derivatives not designated as accounting hedging instruments | ||
Derivatives, Fair Value | ||
Total liability derivatives, number of contracts | contract | 730 | |
Net amount on balance sheet | $ 0 | |
Liability derivatives, gross asset | 0 | |
Liability derivatives, gross liability | $ 0 | |
Options | Other investments | Derivatives not designated as accounting hedging instruments | ||
Derivatives, Fair Value | ||
Total asset derivatives, number of contracts | contract | 2,887 | 5,539 |
Net amount on balance sheet | $ 190 | $ 140 |
Asset derivatives, gross asset | 190 | 140 |
Asset derivatives, gross liability | $ 0 | $ 0 |
Options | Other liabilities & accrued expenses | Derivatives not designated as accounting hedging instruments | ||
Derivatives, Fair Value | ||
Total liability derivatives, number of contracts | contract | 2,712 | 5,400 |
Net amount on balance sheet | $ (110) | $ (68) |
Liability derivatives, gross asset | 0 | 0 |
Liability derivatives, gross liability | $ (110) | $ (68) |
Futures | Other assets | Derivatives not designated as accounting hedging instruments | ||
Derivatives, Fair Value | ||
Total asset derivatives, number of contracts | contract | 951 | 1,533 |
Net amount on balance sheet | $ 1 | $ 1 |
Asset derivatives, gross asset | 1 | 1 |
Asset derivatives, gross liability | $ 0 | $ 0 |
Futures | Other liabilities & accrued expenses | Derivatives not designated as accounting hedging instruments | ||
Derivatives, Fair Value | ||
Total liability derivatives, number of contracts | contract | 666 | 3 |
Net amount on balance sheet | $ 0 | $ 0 |
Liability derivatives, gross asset | 0 | 0 |
Liability derivatives, gross liability | 0 | 0 |
Total return swap agreements - fixed income | Other investments | Derivatives not designated as accounting hedging instruments | ||
Derivatives, Fair Value | ||
Total asset derivatives, notional amount | 56 | |
Net amount on balance sheet | 1 | |
Asset derivatives, gross asset | 1 | |
Asset derivatives, gross liability | 0 | |
Total return swap agreements - fixed income | Other liabilities & accrued expenses | Derivatives not designated as accounting hedging instruments | ||
Derivatives, Fair Value | ||
Total liability derivatives, notional amount | 50 | 119 |
Net amount on balance sheet | 0 | 0 |
Liability derivatives, gross asset | 0 | 0 |
Liability derivatives, gross liability | 0 | 0 |
Total return swap agreements - equity index | Other investments | Derivatives not designated as accounting hedging instruments | ||
Derivatives, Fair Value | ||
Total asset derivatives, notional amount | 8 | |
Net amount on balance sheet | 1 | |
Asset derivatives, gross asset | 1 | |
Asset derivatives, gross liability | 0 | |
Total return swap agreements - equity index | Other liabilities & accrued expenses | Derivatives not designated as accounting hedging instruments | ||
Derivatives, Fair Value | ||
Total liability derivatives, notional amount | 187 | |
Net amount on balance sheet | 11 | |
Liability derivatives, gross asset | 11 | |
Liability derivatives, gross liability | 0 | |
Foreign currency forwards | Other investments | Derivatives not designated as accounting hedging instruments | ||
Derivatives, Fair Value | ||
Total asset derivatives, notional amount | 404 | |
Net amount on balance sheet | 5 | |
Asset derivatives, gross asset | 13 | |
Asset derivatives, gross liability | (8) | |
Foreign currency forwards | Other liabilities & accrued expenses | Derivatives not designated as accounting hedging instruments | ||
Derivatives, Fair Value | ||
Total liability derivatives, notional amount | 367 | 745 |
Net amount on balance sheet | (13) | 19 |
Liability derivatives, gross asset | 2 | 28 |
Liability derivatives, gross liability | (15) | (9) |
Embedded derivative financial instruments | Other investments | ||
Derivatives, Fair Value | ||
Total asset derivatives, notional amount | 750 | |
Net amount on balance sheet | 0 | |
Asset derivatives, gross asset | 0 | |
Asset derivatives, gross liability | 0 | |
Guaranteed accumulation benefits | Contractholder funds | Derivatives not designated as accounting hedging instruments | ||
Derivatives, Fair Value | ||
Total liability derivatives, notional amount | 128 | 161 |
Net amount on balance sheet | (18) | (18) |
Liability derivatives, gross asset | 0 | 0 |
Liability derivatives, gross liability | (18) | (18) |
Guaranteed withdrawal benefits | Contractholder funds | Derivatives not designated as accounting hedging instruments | ||
Derivatives, Fair Value | ||
Total liability derivatives, notional amount | 190 | 205 |
Net amount on balance sheet | (15) | (14) |
Liability derivatives, gross asset | 0 | 0 |
Liability derivatives, gross liability | (15) | (14) |
Equity-indexed and forward starting options in life and annuity product contracts | Contractholder funds | Derivatives not designated as accounting hedging instruments | ||
Derivatives, Fair Value | ||
Total liability derivatives, notional amount | 1,785 | 1,791 |
Net amount on balance sheet | (483) | (430) |
Liability derivatives, gross asset | 0 | 0 |
Liability derivatives, gross liability | (483) | (430) |
Credit default swaps – buying protection | Other investments | Derivatives not designated as accounting hedging instruments | ||
Derivatives, Fair Value | ||
Total asset derivatives, notional amount | 77 | 17 |
Net amount on balance sheet | (4) | 0 |
Asset derivatives, gross asset | 0 | 0 |
Asset derivatives, gross liability | (4) | 0 |
Credit default swaps – buying protection | Other liabilities & accrued expenses | Derivatives not designated as accounting hedging instruments | ||
Derivatives, Fair Value | ||
Total liability derivatives, notional amount | 638 | 152 |
Net amount on balance sheet | (16) | (7) |
Liability derivatives, gross asset | 0 | 0 |
Liability derivatives, gross liability | (16) | (7) |
Credit default swaps – selling protection | Other investments | Derivatives not designated as accounting hedging instruments | ||
Derivatives, Fair Value | ||
Total asset derivatives, notional amount | 754 | |
Net amount on balance sheet | 13 | |
Asset derivatives, gross asset | 13 | |
Asset derivatives, gross liability | 0 | |
Credit default swaps – selling protection | Other liabilities & accrued expenses | Derivatives not designated as accounting hedging instruments | ||
Derivatives, Fair Value | ||
Total liability derivatives, notional amount | 5 | 9 |
Net amount on balance sheet | 0 | 0 |
Liability derivatives, gross asset | 0 | 0 |
Liability derivatives, gross liability | $ 0 | $ 0 |
Derivative Financial Instrume_5
Derivative Financial Instruments and Off-balance sheet Financial Instruments - Gross and net amounts for OTC derivatives (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Asset derivatives | ||
Gross amount | $ 218 | $ 142 |
Derivative asset, counterparty netting | (12) | 0 |
Net amount on balance sheet | 206 | 142 |
Liability derivatives | ||
Gross amount | (657) | (546) |
Derivative liability, counterparty netting | 2 | 39 |
Net amount on balance sheet | (655) | (507) |
OTC derivatives | ||
Asset derivatives | ||
Gross amount | 16 | 40 |
Derivative asset, counterparty netting | (14) | (39) |
Derivative asset, cash collateral (received) pledged | (1) | (1) |
Net amount on balance sheet | 1 | 0 |
Securities collateral (received) pledged | 0 | 0 |
Net amount | 1 | 0 |
Liability derivatives | ||
Gross amount | (28) | (16) |
Derivative liability, counterparty netting | 14 | 39 |
Derivative liability, cash collateral (received) pledged | 13 | (27) |
Net amount on balance sheet | (1) | (4) |
Securities collateral (received) pledged | 0 | 0 |
Net amount | $ (1) | $ (4) |
Derivative Financial Instrume_6
Derivative Financial Instruments and Off-balance sheet Financial Instruments - Derivatives not designated as accounting hedges (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Derivative Instruments, Gain (Loss) | |||
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | $ 50 | $ 25 | $ 59 |
Realized capital gains (losses) | |||
Derivative Instruments, Gain (Loss) | |||
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | 53 | (15) | 43 |
Life contract benefits | |||
Derivative Instruments, Gain (Loss) | |||
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | (1) | 7 | (5) |
Interest credited to contractholder funds | |||
Derivative Instruments, Gain (Loss) | |||
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | (31) | (7) | 43 |
Operating costs and expenses | |||
Derivative Instruments, Gain (Loss) | |||
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | 29 | 40 | (22) |
Interest rate contracts | |||
Derivative Instruments, Gain (Loss) | |||
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | 40 | 51 | (2) |
Interest rate contracts | Realized capital gains (losses) | |||
Derivative Instruments, Gain (Loss) | |||
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | 40 | 51 | (2) |
Interest rate contracts | Life contract benefits | |||
Derivative Instruments, Gain (Loss) | |||
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | 0 | 0 | 0 |
Interest rate contracts | Interest credited to contractholder funds | |||
Derivative Instruments, Gain (Loss) | |||
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | 0 | 0 | 0 |
Interest rate contracts | Operating costs and expenses | |||
Derivative Instruments, Gain (Loss) | |||
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | 0 | 0 | 0 |
Equity and index contracts | |||
Derivative Instruments, Gain (Loss) | |||
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | 72 | (13) | (24) |
Equity and index contracts | Realized capital gains (losses) | |||
Derivative Instruments, Gain (Loss) | |||
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | 21 | (116) | 21 |
Equity and index contracts | Life contract benefits | |||
Derivative Instruments, Gain (Loss) | |||
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | 0 | 0 | 0 |
Equity and index contracts | Interest credited to contractholder funds | |||
Derivative Instruments, Gain (Loss) | |||
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | 22 | 63 | (24) |
Equity and index contracts | Operating costs and expenses | |||
Derivative Instruments, Gain (Loss) | |||
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | 29 | 40 | (21) |
Embedded derivative financial instruments | |||
Derivative Instruments, Gain (Loss) | |||
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | (54) | (63) | 62 |
Embedded derivative financial instruments | Realized capital gains (losses) | |||
Derivative Instruments, Gain (Loss) | |||
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | 0 | 0 | 0 |
Embedded derivative financial instruments | Life contract benefits | |||
Derivative Instruments, Gain (Loss) | |||
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | (1) | 7 | (5) |
Embedded derivative financial instruments | Interest credited to contractholder funds | |||
Derivative Instruments, Gain (Loss) | |||
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | (53) | (70) | 67 |
Embedded derivative financial instruments | Operating costs and expenses | |||
Derivative Instruments, Gain (Loss) | |||
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | 0 | 0 | 0 |
Foreign currency contracts | |||
Derivative Instruments, Gain (Loss) | |||
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | (20) | 8 | 28 |
Foreign currency contracts | Realized capital gains (losses) | |||
Derivative Instruments, Gain (Loss) | |||
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | (20) | 8 | 29 |
Foreign currency contracts | Life contract benefits | |||
Derivative Instruments, Gain (Loss) | |||
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | 0 | 0 | 0 |
Foreign currency contracts | Interest credited to contractholder funds | |||
Derivative Instruments, Gain (Loss) | |||
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | 0 | 0 | 0 |
Foreign currency contracts | Operating costs and expenses | |||
Derivative Instruments, Gain (Loss) | |||
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | 0 | 0 | (1) |
Credit default contracts | |||
Derivative Instruments, Gain (Loss) | |||
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | 7 | (8) | 2 |
Credit default contracts | Realized capital gains (losses) | |||
Derivative Instruments, Gain (Loss) | |||
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | 7 | (8) | 2 |
Credit default contracts | Life contract benefits | |||
Derivative Instruments, Gain (Loss) | |||
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | 0 | 0 | 0 |
Credit default contracts | Interest credited to contractholder funds | |||
Derivative Instruments, Gain (Loss) | |||
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | 0 | 0 | 0 |
Credit default contracts | Operating costs and expenses | |||
Derivative Instruments, Gain (Loss) | |||
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | 0 | 0 | 0 |
Total return swap agreements - fixed income | |||
Derivative Instruments, Gain (Loss) | |||
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | 1 | 14 | (1) |
Total return swap agreements - fixed income | Realized capital gains (losses) | |||
Derivative Instruments, Gain (Loss) | |||
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | 1 | 14 | (1) |
Total return swap agreements - fixed income | Life contract benefits | |||
Derivative Instruments, Gain (Loss) | |||
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | 0 | 0 | 0 |
Total return swap agreements - fixed income | Interest credited to contractholder funds | |||
Derivative Instruments, Gain (Loss) | |||
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | 0 | 0 | 0 |
Total return swap agreements - fixed income | Operating costs and expenses | |||
Derivative Instruments, Gain (Loss) | |||
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | 0 | 0 | 0 |
Total return swap agreements - equity index | |||
Derivative Instruments, Gain (Loss) | |||
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | 4 | 36 | (6) |
Total return swap agreements - equity index | Realized capital gains (losses) | |||
Derivative Instruments, Gain (Loss) | |||
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | 4 | 36 | (6) |
Total return swap agreements - equity index | Life contract benefits | |||
Derivative Instruments, Gain (Loss) | |||
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | 0 | 0 | 0 |
Total return swap agreements - equity index | Interest credited to contractholder funds | |||
Derivative Instruments, Gain (Loss) | |||
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | 0 | 0 | 0 |
Total return swap agreements - equity index | Operating costs and expenses | |||
Derivative Instruments, Gain (Loss) | |||
Derivatives not designated as accounting hedging instruments, total gain (loss) recognized in net income on derivatives | $ 0 | $ 0 | $ 0 |
Derivative Financial Instrume_7
Derivative Financial Instruments and Off-balance sheet Financial Instruments - OTC derivatives counterparty credit exposure (Details) $ in Millions | Dec. 31, 2020USD ($)counter-party | Dec. 31, 2019USD ($)counter-party |
Credit Derivatives | ||
Number of counter-parties | counter-party | 3 | 6 |
Notional amount | $ 280 | $ 868 |
Credit exposure | 7 | 29 |
Exposure, net of collateral | 0 | 0 |
Gross liability fair value of contracts containing credit-risk-contingent features | 27 | 16 |
Gross asset fair value of contracts containing credit-risk-contingent features and subject to MNAs | (9) | (11) |
Collateral posted under MNAs for contracts containing credit-risk-contingent features | (17) | (3) |
Maximum amount of additional exposure for contracts with credit-risk-contingent features if all features were triggered concurrently | $ 1 | $ 2 |
A plus | ||
Credit Derivatives | ||
Number of counter-parties | counter-party | 3 | 6 |
Notional amount | $ 280 | $ 868 |
Credit exposure | 7 | 29 |
Exposure, net of collateral | $ 0 | $ 0 |
Derivative Financial Instrume_8
Derivative Financial Instruments and Off-balance sheet Financial Instruments - CDS notional amounts by credit rating (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Derivative Financial Instruments and Off-balance sheet Financial Instruments | ||
Term of credit default swaps | 5 years | |
Credit Derivatives | ||
Derivative, notional amount | $ 5,191 | $ 3,478 |
Credit default contracts | ||
Credit Derivatives | ||
Derivative, notional amount | 759 | 9 |
Fair value | 13 | 0 |
Credit default contracts | Single name | Corporate | ||
Credit Derivatives | ||
Derivative, notional amount | 9 | 9 |
Fair value | 0 | 0 |
Credit default contracts | Index | Corporate | ||
Credit Derivatives | ||
Derivative, notional amount | 750 | |
Fair value | 13 | |
AAA | Credit default contracts | ||
Credit Derivatives | ||
Derivative, notional amount | 6 | 0 |
AAA | Credit default contracts | Single name | Corporate | ||
Credit Derivatives | ||
Derivative, notional amount | 0 | 0 |
AAA | Credit default contracts | Index | Corporate | ||
Credit Derivatives | ||
Derivative, notional amount | 6 | |
AA | Credit default contracts | ||
Credit Derivatives | ||
Derivative, notional amount | 12 | 0 |
AA | Credit default contracts | Single name | Corporate | ||
Credit Derivatives | ||
Derivative, notional amount | 0 | 0 |
AA | Credit default contracts | Index | Corporate | ||
Credit Derivatives | ||
Derivative, notional amount | 12 | |
A | Credit default contracts | ||
Credit Derivatives | ||
Derivative, notional amount | 156 | 0 |
A | Credit default contracts | Single name | Corporate | ||
Credit Derivatives | ||
Derivative, notional amount | 0 | 0 |
A | Credit default contracts | Index | Corporate | ||
Credit Derivatives | ||
Derivative, notional amount | 156 | |
BBB | Credit default contracts | ||
Credit Derivatives | ||
Derivative, notional amount | 492 | 0 |
BBB | Credit default contracts | Single name | Corporate | ||
Credit Derivatives | ||
Derivative, notional amount | 0 | 0 |
BBB | Credit default contracts | Index | Corporate | ||
Credit Derivatives | ||
Derivative, notional amount | 492 | |
BB and lower | Credit default contracts | ||
Credit Derivatives | ||
Derivative, notional amount | 93 | 9 |
BB and lower | Credit default contracts | Single name | Corporate | ||
Credit Derivatives | ||
Derivative, notional amount | 9 | $ 9 |
BB and lower | Credit default contracts | Index | Corporate | ||
Credit Derivatives | ||
Derivative, notional amount | $ 84 |
Derivative Financial Instrume_9
Derivative Financial Instruments and Off-balance sheet Financial Instruments - Off balance sheet financial instruments (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Derivative Financial Instruments and Off-balance sheet Financial Instruments | ||
Commitments to invest in limited partnership interests | $ 2,933 | $ 2,837 |
Private placement commitments | 36 | 68 |
Other loan commitments | $ 92 | $ 189 |
Reserve for Property and Casu_3
Reserve for Property and Casualty Insurance Claims and Claims Expense - Rollforward of reserve for property and casualty insurance claims and claims expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Activity in the reserve for property-liability insurance claims and claims expense: | |||
Balance as of January 1 | $ 27,712 | $ 27,423 | |
Net balance as of January 1 | 20,800 | 20,268 | $ 19,854 |
Incurred claims and claims expense related to: | |||
Prior years | (436) | (130) | (255) |
Total incurred | 22,001 | 23,976 | 22,778 |
Claims and claims expense paid related to: | |||
Total paid | (22,224) | (23,444) | (22,364) |
Net balance as of December 31 | 20,577 | 20,800 | 20,268 |
Balance as of December 31 | 27,610 | 27,712 | 27,423 |
Property and casualty | |||
Activity in the reserve for property-liability insurance claims and claims expense: | |||
Balance as of January 1 | 27,712 | 27,423 | 26,325 |
Less recoverables | (6,912) | (7,155) | (6,471) |
Incurred claims and claims expense related to: | |||
Current year | 22,437 | 24,106 | 23,033 |
Prior years | (436) | (130) | (255) |
Claims and claims expense paid related to: | |||
Current year | (14,245) | (15,160) | (14,877) |
Prior years | (7,979) | (8,284) | (7,487) |
Plus recoverables | $ (7,033) | (6,912) | (7,155) |
Balance as of December 31 | $ 27,712 | $ 27,423 |
Reserve for Property and Casu_4
Reserve for Property and Casualty Insurance Claims and Claims Expense - Reconciliation of total claims and claims expense incurred and paid by coverage (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Increase (decrease) in claims and claims expense | |||
Incurred | $ 22,001 | $ 23,976 | $ 22,778 |
Paid | (22,224) | (23,444) | (22,364) |
Claims incurred and paid from before 2016 | |||
Increase (decrease) in claims and claims expense | |||
Incurred | (32) | ||
Paid | (423) | ||
Auto insurance - liability coverage | |||
Increase (decrease) in claims and claims expense | |||
Incurred | 7,629 | ||
Paid | (7,939) | ||
Auto insurance - physical damage coverage | |||
Increase (decrease) in claims and claims expense | |||
Incurred | 4,817 | ||
Paid | (4,716) | ||
Homeowners | |||
Increase (decrease) in claims and claims expense | |||
Incurred | 4,889 | ||
Paid | (4,731) | ||
Total auto and homeowners insurance | |||
Increase (decrease) in claims and claims expense | |||
Incurred | 17,335 | ||
Paid | (17,386) | ||
Other personal lines | |||
Increase (decrease) in claims and claims expense | |||
Incurred | 1,015 | ||
Paid | (1,007) | ||
Commercial lines | |||
Increase (decrease) in claims and claims expense | |||
Incurred | 585 | ||
Paid | (463) | ||
Protection Services | |||
Increase (decrease) in claims and claims expense | |||
Incurred | 319 | ||
Paid | (326) | ||
Unallocated loss adjustment expenses (“ULAE”) | |||
Increase (decrease) in claims and claims expense | |||
Incurred | 2,681 | ||
Paid | (2,590) | ||
Other | |||
Increase (decrease) in claims and claims expense | |||
Incurred | (34) | ||
Paid | 59 | ||
Discontinued Lines and Coverages | |||
Increase (decrease) in claims and claims expense | |||
Incurred | 132 | ||
Paid | (88) | ||
Catastrophe losses | |||
Increase (decrease) in claims and claims expense | |||
Incurred | $ 2,810 | $ 2,560 | $ 2,860 |
Reserve for Property and Casu_5
Reserve for Property and Casualty Insurance Claims and Claims Expense - Incurred and claims expense (Details) $ in Millions | Sep. 14, 2020USD ($) | Jul. 01, 2020USD ($) | Mar. 31, 2021USD ($) | Sep. 30, 2020USD ($)settlement | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Jan. 22, 2021USD ($) | Jun. 20, 2020USD ($) |
Increase (decrease) in claims and claims expense | |||||||||
Prior years | $ (436) | $ (130) | $ (255) | ||||||
Reinsurance expected recovery percentage | 80.00% | ||||||||
Auto | |||||||||
Increase (decrease) in claims and claims expense | |||||||||
Prior years | (107) | (323) | (455) | ||||||
Homeowners | |||||||||
Increase (decrease) in claims and claims expense | |||||||||
Prior years | (439) | 65 | 14 | ||||||
Other personal lines | |||||||||
Increase (decrease) in claims and claims expense | |||||||||
Prior years | (66) | 8 | (7) | ||||||
Commercial lines | |||||||||
Increase (decrease) in claims and claims expense | |||||||||
Prior years | 36 | 17 | 108 | ||||||
Discontinued Lines and Coverages | |||||||||
Increase (decrease) in claims and claims expense | |||||||||
Prior years | 141 | 105 | 87 | ||||||
Protection Services | |||||||||
Increase (decrease) in claims and claims expense | |||||||||
Prior years | (1) | (2) | (2) | ||||||
Catastrophe losses | |||||||||
Increase (decrease) in claims and claims expense | |||||||||
Prior years | $ (495) | (503) | 48 | 25 | |||||
Number of settlements | settlement | 2 | ||||||||
Catastrophe losses | Auto | |||||||||
Increase (decrease) in claims and claims expense | |||||||||
Prior years | (44) | (17) | (39) | ||||||
Catastrophe losses | Homeowners | |||||||||
Increase (decrease) in claims and claims expense | |||||||||
Prior years | (422) | 66 | 65 | ||||||
Catastrophe losses | Other personal lines | |||||||||
Increase (decrease) in claims and claims expense | |||||||||
Prior years | (39) | 0 | (1) | ||||||
Catastrophe losses | Commercial lines | |||||||||
Increase (decrease) in claims and claims expense | |||||||||
Prior years | 2 | (1) | 0 | ||||||
Catastrophe losses | Discontinued Lines and Coverages | |||||||||
Increase (decrease) in claims and claims expense | |||||||||
Prior years | 0 | 0 | 0 | ||||||
Catastrophe losses | Protection Services | |||||||||
Increase (decrease) in claims and claims expense | |||||||||
Prior years | 0 | 0 | 0 | ||||||
Fire | Pacific Gas And Electric | |||||||||
Increase (decrease) in claims and claims expense | |||||||||
Prior years | $ (450) | ||||||||
Catastrophe reinsurance settlement amount | $ 11,000 | ||||||||
Fire | Southern California Edison | |||||||||
Increase (decrease) in claims and claims expense | |||||||||
Prior years | $ (45) | ||||||||
Catastrophe reinsurance settlement amount | $ 1,160 | ||||||||
Fire | Southern California Edison | Forecast | |||||||||
Increase (decrease) in claims and claims expense | |||||||||
Prior years | $ (110) | ||||||||
Fire | Southern California Edison | Subsequent Event | |||||||||
Increase (decrease) in claims and claims expense | |||||||||
Catastrophe reinsurance settlement amount | $ 2,200 | ||||||||
Non-catastrophe losses | |||||||||
Increase (decrease) in claims and claims expense | |||||||||
Prior years | 67 | (178) | (280) | ||||||
Non-catastrophe losses | Auto | |||||||||
Increase (decrease) in claims and claims expense | |||||||||
Prior years | (63) | (306) | (416) | ||||||
Non-catastrophe losses | Homeowners | |||||||||
Increase (decrease) in claims and claims expense | |||||||||
Prior years | (17) | (1) | (51) | ||||||
Non-catastrophe losses | Other personal lines | |||||||||
Increase (decrease) in claims and claims expense | |||||||||
Prior years | (27) | 8 | (6) | ||||||
Non-catastrophe losses | Commercial lines | |||||||||
Increase (decrease) in claims and claims expense | |||||||||
Prior years | 34 | 18 | 108 | ||||||
Non-catastrophe losses | Discontinued Lines and Coverages | |||||||||
Increase (decrease) in claims and claims expense | |||||||||
Prior years | 141 | 105 | 87 | ||||||
Non-catastrophe losses | Protection Services | |||||||||
Increase (decrease) in claims and claims expense | |||||||||
Prior years | (1) | $ (2) | $ (2) | ||||||
Annual reserve review | Discontinued Lines and Coverages | |||||||||
Increase (decrease) in claims and claims expense | |||||||||
Prior years | $ 132 |
Reserve for Property and Casu_6
Reserve for Property and Casualty Insurance Claims and Claims Expense - Claims and allocated claim adjustment expenses, net of reinsurance (Details) $ in Millions | 12 Months Ended | ||||
Dec. 31, 2020USD ($)claim | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Increase (decrease) in claims and claims expense | |||||
Liabilities for claims and claim adjustment expenses, net of recoverables | $ 20,577 | ||||
Auto insurance - liability coverage | |||||
Increase (decrease) in claims and claims expense | |||||
Incurred claims and allocated claim adjustment expenses, net of recoverables | 42,687 | ||||
Prior year reserve reestimates | 7 | ||||
Prior year reserve reestimates | 7 | ||||
Cumulative paid claims and allocated claims adjustment expenses, net of recoverables | 31,287 | ||||
All outstanding liabilities before 2016, net of recoverables | 1,389 | ||||
Liabilities for claims and claim adjustment expenses, net of recoverables | 12,789 | ||||
Auto insurance - liability coverage | Accident Year 2016 | |||||
Increase (decrease) in claims and claims expense | |||||
Incurred claims and allocated claim adjustment expenses, net of recoverables | 8,709 | $ 8,690 | $ 8,740 | $ 8,841 | $ 9,038 |
Prior year reserve reestimates | 19 | ||||
IBNR reserves plus expected development on reported claims | $ 554 | ||||
Cumulative number of reported claims | claim | 2,400,904 | ||||
Cumulative paid claims and allocated claims adjustment expenses, net of recoverables | $ 8,155 | 7,700 | 6,853 | 5,772 | 3,487 |
Auto insurance - liability coverage | Accident Year 2017 | |||||
Increase (decrease) in claims and claims expense | |||||
Incurred claims and allocated claim adjustment expenses, net of recoverables | 8,330 | 8,312 | 8,396 | 8,465 | |
Prior year reserve reestimates | 18 | ||||
IBNR reserves plus expected development on reported claims | $ 1,017 | ||||
Cumulative number of reported claims | claim | 2,217,132 | ||||
Cumulative paid claims and allocated claims adjustment expenses, net of recoverables | $ 7,313 | 6,532 | 5,333 | 3,151 | |
Auto insurance - liability coverage | Accident Year 2018 | |||||
Increase (decrease) in claims and claims expense | |||||
Incurred claims and allocated claim adjustment expenses, net of recoverables | 8,731 | 8,715 | 8,734 | ||
Prior year reserve reestimates | 16 | ||||
IBNR reserves plus expected development on reported claims | $ 1,846 | ||||
Cumulative number of reported claims | claim | 2,180,275 | ||||
Cumulative paid claims and allocated claims adjustment expenses, net of recoverables | $ 6,885 | 5,618 | 3,231 | ||
Auto insurance - liability coverage | Accident Year 2019 | |||||
Increase (decrease) in claims and claims expense | |||||
Incurred claims and allocated claim adjustment expenses, net of recoverables | 9,295 | 9,341 | |||
Prior year reserve reestimates | (46) | ||||
IBNR reserves plus expected development on reported claims | $ 3,064 | ||||
Cumulative number of reported claims | claim | 2,205,813 | ||||
Cumulative paid claims and allocated claims adjustment expenses, net of recoverables | $ 6,231 | 3,498 | |||
Auto insurance - liability coverage | Accident Year 2020 | |||||
Increase (decrease) in claims and claims expense | |||||
Incurred claims and allocated claim adjustment expenses, net of recoverables | 7,622 | ||||
IBNR reserves plus expected development on reported claims | $ 4,919 | ||||
Cumulative number of reported claims | claim | 1,500,921 | ||||
Cumulative paid claims and allocated claims adjustment expenses, net of recoverables | $ 2,703 | ||||
Auto insurance - liability coverage | Prior year reserve reestimates for pre-2016 accident years | |||||
Increase (decrease) in claims and claims expense | |||||
Prior year reserve reestimates | (20) | ||||
Auto insurance - liability coverage | Prior year reserve reestimates for ULAE | |||||
Increase (decrease) in claims and claims expense | |||||
Prior year reserve reestimates | 23 | ||||
Auto insurance - physical damage coverage | |||||
Increase (decrease) in claims and claims expense | |||||
Incurred claims and allocated claim adjustment expenses, net of recoverables | 25,687 | ||||
Prior year reserve reestimates | (107) | ||||
Prior year reserve reestimates | (114) | ||||
Cumulative paid claims and allocated claims adjustment expenses, net of recoverables | 25,322 | ||||
All outstanding liabilities before 2016, net of recoverables | 8 | ||||
Liabilities for claims and claim adjustment expenses, net of recoverables | 373 | ||||
Auto insurance - physical damage coverage | Accident Year 2016 | |||||
Increase (decrease) in claims and claims expense | |||||
Incurred claims and allocated claim adjustment expenses, net of recoverables | 5,022 | 5,023 | 5,027 | 5,054 | 5,128 |
Prior year reserve reestimates | (1) | ||||
IBNR reserves plus expected development on reported claims | $ 5 | ||||
Cumulative number of reported claims | claim | 4,432,048 | ||||
Cumulative paid claims and allocated claims adjustment expenses, net of recoverables | $ 5,017 | 5,018 | 5,022 | 5,033 | 4,890 |
Auto insurance - physical damage coverage | Accident Year 2017 | |||||
Increase (decrease) in claims and claims expense | |||||
Incurred claims and allocated claim adjustment expenses, net of recoverables | 5,027 | 5,028 | 5,039 | 5,121 | |
Prior year reserve reestimates | (1) | ||||
IBNR reserves plus expected development on reported claims | $ 1 | ||||
Cumulative number of reported claims | claim | 4,237,772 | ||||
Cumulative paid claims and allocated claims adjustment expenses, net of recoverables | $ 5,026 | 5,030 | 5,039 | 4,847 | |
Auto insurance - physical damage coverage | Accident Year 2018 | |||||
Increase (decrease) in claims and claims expense | |||||
Incurred claims and allocated claim adjustment expenses, net of recoverables | 5,108 | 5,157 | 5,219 | ||
Prior year reserve reestimates | (49) | ||||
IBNR reserves plus expected development on reported claims | $ 9 | ||||
Cumulative number of reported claims | claim | 4,310,750 | ||||
Cumulative paid claims and allocated claims adjustment expenses, net of recoverables | $ 5,099 | 5,140 | 4,971 | ||
Auto insurance - physical damage coverage | Accident Year 2019 | |||||
Increase (decrease) in claims and claims expense | |||||
Incurred claims and allocated claim adjustment expenses, net of recoverables | 5,606 | 5,662 | |||
Prior year reserve reestimates | (56) | ||||
IBNR reserves plus expected development on reported claims | $ 26 | ||||
Cumulative number of reported claims | claim | 4,469,473 | ||||
Cumulative paid claims and allocated claims adjustment expenses, net of recoverables | $ 5,580 | 5,418 | |||
Auto insurance - physical damage coverage | Accident Year 2020 | |||||
Increase (decrease) in claims and claims expense | |||||
Incurred claims and allocated claim adjustment expenses, net of recoverables | 4,924 | ||||
IBNR reserves plus expected development on reported claims | $ 324 | ||||
Cumulative number of reported claims | claim | 3,493,530 | ||||
Cumulative paid claims and allocated claims adjustment expenses, net of recoverables | $ 4,600 | ||||
Auto insurance - physical damage coverage | Prior year reserve reestimates for pre-2016 accident years | |||||
Increase (decrease) in claims and claims expense | |||||
Prior year reserve reestimates | (1) | ||||
Auto insurance - physical damage coverage | Prior year reserve reestimates for ULAE | |||||
Increase (decrease) in claims and claims expense | |||||
Prior year reserve reestimates | (5) | ||||
Homeowners | |||||
Increase (decrease) in claims and claims expense | |||||
Incurred claims and allocated claim adjustment expenses, net of recoverables | 22,859 | ||||
Prior year reserve reestimates | (480) | ||||
Prior year reserve reestimates | (439) | ||||
Cumulative paid claims and allocated claims adjustment expenses, net of recoverables | 20,874 | ||||
All outstanding liabilities before 2016, net of recoverables | 119 | ||||
Liabilities for claims and claim adjustment expenses, net of recoverables | 2,104 | ||||
Homeowners | Accident Year 2016 | |||||
Increase (decrease) in claims and claims expense | |||||
Incurred claims and allocated claim adjustment expenses, net of recoverables | 3,948 | 3,953 | 3,958 | 3,995 | 3,961 |
Prior year reserve reestimates | (5) | ||||
IBNR reserves plus expected development on reported claims | $ 43 | ||||
Cumulative number of reported claims | claim | 814,026 | ||||
Cumulative paid claims and allocated claims adjustment expenses, net of recoverables | $ 3,905 | 3,876 | 3,811 | 3,680 | $ 2,949 |
Homeowners | Accident Year 2017 | |||||
Increase (decrease) in claims and claims expense | |||||
Incurred claims and allocated claim adjustment expenses, net of recoverables | 4,390 | 4,614 | 4,619 | 4,477 | |
Prior year reserve reestimates | (224) | ||||
IBNR reserves plus expected development on reported claims | $ 61 | ||||
Cumulative number of reported claims | claim | 908,714 | ||||
Cumulative paid claims and allocated claims adjustment expenses, net of recoverables | $ 4,329 | 4,437 | 4,249 | $ 3,228 | |
Homeowners | Accident Year 2018 | |||||
Increase (decrease) in claims and claims expense | |||||
Incurred claims and allocated claim adjustment expenses, net of recoverables | 4,551 | 4,854 | 4,749 | ||
Prior year reserve reestimates | (303) | ||||
IBNR reserves plus expected development on reported claims | $ 182 | ||||
Cumulative number of reported claims | claim | 811,046 | ||||
Cumulative paid claims and allocated claims adjustment expenses, net of recoverables | $ 4,369 | 4,514 | $ 3,491 | ||
Homeowners | Accident Year 2019 | |||||
Increase (decrease) in claims and claims expense | |||||
Incurred claims and allocated claim adjustment expenses, net of recoverables | 4,601 | 4,549 | |||
Prior year reserve reestimates | 52 | ||||
IBNR reserves plus expected development on reported claims | $ 301 | ||||
Cumulative number of reported claims | claim | 784,257 | ||||
Cumulative paid claims and allocated claims adjustment expenses, net of recoverables | $ 4,300 | $ 3,316 | |||
Homeowners | Accident Year 2020 | |||||
Increase (decrease) in claims and claims expense | |||||
Incurred claims and allocated claim adjustment expenses, net of recoverables | 5,369 | ||||
IBNR reserves plus expected development on reported claims | $ 1,398 | ||||
Cumulative number of reported claims | claim | 838,829 | ||||
Cumulative paid claims and allocated claims adjustment expenses, net of recoverables | $ 3,971 | ||||
Homeowners | Prior year reserve reestimates for pre-2016 accident years | |||||
Increase (decrease) in claims and claims expense | |||||
Prior year reserve reestimates | (11) | ||||
Homeowners | Prior year reserve reestimates for ULAE | |||||
Increase (decrease) in claims and claims expense | |||||
Prior year reserve reestimates | 52 | ||||
Other | Auto insurance - liability coverage | |||||
Increase (decrease) in claims and claims expense | |||||
Prior year reserve reestimates | (3) | ||||
Other | Auto insurance - physical damage coverage | |||||
Increase (decrease) in claims and claims expense | |||||
Prior year reserve reestimates | (1) | ||||
Other | Homeowners | |||||
Increase (decrease) in claims and claims expense | |||||
Prior year reserve reestimates | $ 0 |
Reserve for Property and Casu_7
Reserve for Property and Casualty Insurance Claims and Claims Expense - Average annual percentage payout of incurred claims by age, net of reinsurance (Details) | Dec. 31, 2020 |
Auto insurance – liability coverage | |
Claims Development [Line Items] | |
1 year | 39.40% |
2 years | 27.50% |
3 years | 13.10% |
4 years | 8.40% |
5 years | 4.90% |
Auto insurance - physical damage coverage | |
Claims Development [Line Items] | |
1 year | 96.90% |
2 years | 3.00% |
3 years | (0.30%) |
4 years | (0.10%) |
5 years | 0.00% |
Homeowners | |
Claims Development [Line Items] | |
1 year | 75.20% |
2 years | 19.40% |
3 years | 2.50% |
4 years | 0.90% |
5 years | 0.70% |
Reserve for Property and Casu_8
Reserve for Property and Casualty Insurance Claims and Claims Expense - Reconciliation of the net incurred and paid claims development (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Claims Development [Line Items] | |||
Net outstanding liabilities | $ 20,577 | ||
ULAE | 1,484 | ||
Recoverables | 7,033 | ||
ULAE | 41 | ||
Gross reserve for property and casualty insurance claims and claims expense | 27,610 | $ 27,712 | $ 27,423 |
Discontinued Lines and Coverages | |||
Claims Development [Line Items] | |||
Net outstanding liabilities | 1,330 | ||
Recoverables | 479 | ||
Gross reserve for property and casualty insurance claims and claims expense | 695 | ||
Auto insurance - liability coverage | |||
Claims Development [Line Items] | |||
Net outstanding liabilities | 12,789 | ||
Recoverables | 5,979 | ||
Auto insurance - physical damage coverage | |||
Claims Development [Line Items] | |||
Net outstanding liabilities | 373 | ||
Recoverables | 4 | ||
Homeowners insurance | |||
Claims Development [Line Items] | |||
Net outstanding liabilities | 2,104 | ||
Recoverables | 171 | ||
Other personal lines | |||
Claims Development [Line Items] | |||
Net outstanding liabilities | 1,335 | ||
Recoverables | 153 | ||
Commercial lines | |||
Claims Development [Line Items] | |||
Net outstanding liabilities | 1,132 | ||
Recoverables | 196 | ||
Protection Services | |||
Claims Development [Line Items] | |||
Net outstanding liabilities | 30 | ||
Recoverables | $ 10 |
Reserve for Property and Casu_9
Reserve for Property and Casualty Insurance Claims and Claims Expense - Reserves for asbestos, environmental and other discontinued lines claims before and after the effects of reinsurance (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Asbestos claims | ||
Gross reserves | $ 1,204 | $ 1,172 |
Reinsurance | (377) | (362) |
Net reserves | 827 | 810 |
Environmental claims | ||
Gross reserves | 249 | 219 |
Reinsurance | (43) | (40) |
Net reserves | 206 | 179 |
Other discontinued lines | ||
Gross reserves | 435 | 427 |
Reinsurance | (60) | (51) |
Net reserves | 375 | 376 |
Total | ||
Gross reserves | 1,888 | 1,818 |
Reinsurance | (480) | (453) |
Net reserves | $ 1,408 | $ 1,365 |
Reserve for Life-Contingent C_3
Reserve for Life-Contingent Contract Benefits and Contractholder Funds - Reserve for life-contingent contract benefits (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Reserve for life-contingent benefits: | ||||
Total reserve for life-contingent contract benefits | $ 12,768 | $ 12,300 | ||
Key assumptions generally used in calculating the reserve for life-contingent contract benefits: | ||||
Premium deficiency reserve | 496 | 126 | ||
Allstate Annuities | ||||
Key assumptions generally used in calculating the reserve for life-contingent contract benefits: | ||||
Premium deficiency for immediate annuities, after tax | (178) | 0 | $ 0 | |
Structured settlement annuities | ||||
Reserve for life-contingent benefits: | ||||
Total reserve for life-contingent contract benefits | $ 7,407 | 6,840 | ||
Structured settlement annuities | Minimum | ||||
Key assumptions generally used in calculating the reserve for life-contingent contract benefits: | ||||
Life contingent contract benefits, interest rate assumptions (as a percent) | 4.70% | |||
Other immediate fixed annuities | ||||
Reserve for life-contingent benefits: | ||||
Total reserve for life-contingent contract benefits | $ 1,511 | 1,612 | ||
Other immediate fixed annuities | Minimum | ||||
Key assumptions generally used in calculating the reserve for life-contingent contract benefits: | ||||
Life contingent contract benefits, interest rate assumptions (as a percent) | 4.70% | |||
Traditional life insurance | ||||
Reserve for life-contingent benefits: | ||||
Total reserve for life-contingent contract benefits | $ 2,942 | 2,897 | ||
Traditional life insurance | Minimum | ||||
Key assumptions generally used in calculating the reserve for life-contingent contract benefits: | ||||
Life contingent contract benefits, interest rate assumptions (as a percent) | 2.50% | |||
Traditional life insurance | Maximum | ||||
Key assumptions generally used in calculating the reserve for life-contingent contract benefits: | ||||
Life contingent contract benefits, interest rate assumptions (as a percent) | 11.30% | |||
Accident and health insurance | ||||
Reserve for life-contingent benefits: | ||||
Total reserve for life-contingent contract benefits | $ 841 | 873 | ||
Accident and health insurance | Minimum | ||||
Key assumptions generally used in calculating the reserve for life-contingent contract benefits: | ||||
Life contingent contract benefits, interest rate assumptions (as a percent) | 3.00% | |||
Accident and health insurance | Maximum | ||||
Key assumptions generally used in calculating the reserve for life-contingent contract benefits: | ||||
Life contingent contract benefits, interest rate assumptions (as a percent) | 7.00% | |||
Other | ||||
Reserve for life-contingent benefits: | ||||
Total reserve for life-contingent contract benefits | $ 67 | $ 78 | ||
Other | Minimum | ||||
Key assumptions generally used in calculating the reserve for life-contingent contract benefits: | ||||
Life contingent contract benefits, interest rate assumptions (as a percent) | 1.40% | |||
Other | Maximum | ||||
Key assumptions generally used in calculating the reserve for life-contingent contract benefits: | ||||
Life contingent contract benefits, interest rate assumptions (as a percent) | 5.80% | |||
Reinsurance ceded | Allstate Annuities | ||||
Key assumptions generally used in calculating the reserve for life-contingent contract benefits: | ||||
Premium deficiency for immediate annuities, after tax | $ 225 |
Reserve for Life-Contingent C_4
Reserve for Life-Contingent Contract Benefits and Contractholder Funds - Contractholder funds (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Key contract provisions relating to contractholder funds: | ||||
Total contractholder funds | $ 17,213 | $ 17,692 | $ 18,371 | $ 19,434 |
Interest-sensitive life insurance contract charges | ||||
Key contract provisions relating to contractholder funds: | ||||
Total contractholder funds | 8,493 | 8,384 | ||
Fixed annuities contract charges | ||||
Key contract provisions relating to contractholder funds: | ||||
Total contractholder funds | 8,196 | 8,845 | ||
Other investment contracts | ||||
Key contract provisions relating to contractholder funds: | ||||
Total contractholder funds | $ 524 | $ 463 | ||
Other investment contracts | Minimum | ||||
Key contract provisions relating to contractholder funds: | ||||
Contractholder funds, interest rate assumptions (as a percent) | 1.70% | |||
Other investment contracts | Maximum | ||||
Key contract provisions relating to contractholder funds: | ||||
Contractholder funds, interest rate assumptions (as a percent) | 10.30% | |||
Equity indexed life insurance | Minimum | ||||
Key contract provisions relating to contractholder funds: | ||||
Contractholder funds, interest rate assumptions (as a percent) | 0.00% | |||
Equity indexed life insurance | Maximum | ||||
Key contract provisions relating to contractholder funds: | ||||
Contractholder funds, interest rate assumptions (as a percent) | 9.00% | |||
Other life insurance | Minimum | ||||
Key contract provisions relating to contractholder funds: | ||||
Contractholder funds, interest rate assumptions (as a percent) | 1.00% | |||
Other life insurance | Maximum | ||||
Key contract provisions relating to contractholder funds: | ||||
Contractholder funds, interest rate assumptions (as a percent) | 6.00% | |||
Immediate fixed annuities | Minimum | ||||
Key contract provisions relating to contractholder funds: | ||||
Contractholder funds, interest rate assumptions (as a percent) | 0.50% | |||
Immediate fixed annuities | Maximum | ||||
Key contract provisions relating to contractholder funds: | ||||
Contractholder funds, interest rate assumptions (as a percent) | 7.50% | |||
Equity indexed fixed annuities | Minimum | ||||
Key contract provisions relating to contractholder funds: | ||||
Contractholder funds, interest rate assumptions (as a percent) | (8.00%) | |||
Equity indexed fixed annuities | Maximum | ||||
Key contract provisions relating to contractholder funds: | ||||
Contractholder funds, interest rate assumptions (as a percent) | 9.00% | |||
Other fixed annuities | Minimum | ||||
Key contract provisions relating to contractholder funds: | ||||
Contractholder funds, interest rate assumptions (as a percent) | 0.10% | |||
Other fixed annuities | Maximum | ||||
Key contract provisions relating to contractholder funds: | ||||
Contractholder funds, interest rate assumptions (as a percent) | 5.00% |
Reserve for Life-Contingent C_5
Reserve for Life-Contingent Contract Benefits and Contractholder Funds - Contractholder funds activity (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Contractholder funds activity | |||
Balance, beginning of year | $ 17,692 | $ 18,371 | $ 19,434 |
Deposits | 1,062 | 1,091 | 1,109 |
Interest credited | 633 | 636 | 650 |
Benefits | (775) | (791) | (844) |
Surrenders and partial withdrawals | (728) | (884) | (1,135) |
Contract charges | (836) | (825) | (824) |
Net transfers from separate accounts | 5 | 10 | 6 |
Other adjustments | 160 | 84 | (25) |
Balance, end of year | $ 17,213 | $ 17,692 | $ 18,371 |
Reserve for Life-Contingent C_6
Reserve for Life-Contingent Contract Benefits and Contractholder Funds - Variable annuity contracts with guarantees (Details) - Variable annuities - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Variable annuity contracts with guarantees | ||
Account balances of separate accounts with guarantees, invested in equity, fixed income and balanced mutual funds | $ 2,960 | $ 2,680 |
Account balances of separate accounts with guarantees, invested in money market mutual funds | 238 | 253 |
In the event of death | ||
Variable annuity contracts with guarantees | ||
Separate account value | 3,197 | 2,928 |
Net amount at risk | $ 308 | $ 373 |
Weighted average attained age | 72 years | 71 years |
At annuitization (includes income benefit guarantees) | ||
Variable annuity contracts with guarantees | ||
Separate account value | $ 925 | $ 848 |
Net amount at risk | 140 | 173 |
For cumulative periodic withdrawals | ||
Variable annuity contracts with guarantees | ||
Separate account value | 178 | 190 |
Net amount at risk | 12 | 13 |
Accumulation at specified dates | ||
Variable annuity contracts with guarantees | ||
Separate account value | 93 | 123 |
Net amount at risk | $ 11 | $ 15 |
Weighted average waiting period until guarantee date | 3 years | 4 years |
Reserve for Life-Contingent C_7
Reserve for Life-Contingent Contract Benefits and Contractholder Funds - Summary of liabilities for guarantees (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Movement in Liabilities for Guarantees on Long-Duration Contracts, Guaranteed Benefit Liability, Gross [Roll Forward] | ||
Balance at beginning of period | $ 419 | $ 444 |
Less reinsurance recoverables | 133 | 185 |
Net balance at beginning of period | 286 | 259 |
Incurred guarantee benefits | 68 | 30 |
Paid guarantee benefits | (2) | (3) |
Net change | 66 | 27 |
Net balance at end of period | 352 | 286 |
Plus reinsurance recoverables | 125 | 133 |
Balance at end of period | 477 | 419 |
Variable annuities | ||
Movement in Liabilities for Guarantees on Long-Duration Contracts, Guaranteed Benefit Liability, Gross [Roll Forward] | ||
Balance at beginning of period | 419 | 444 |
Balance at end of period | 477 | 419 |
Death benefits | Variable annuities | ||
Movement in Liabilities for Guarantees on Long-Duration Contracts, Guaranteed Benefit Liability, Gross [Roll Forward] | ||
Balance at beginning of period | 78 | 109 |
Balance at end of period | 67 | 78 |
At annuitization (includes income benefit guarantees) | Variable annuities | ||
Movement in Liabilities for Guarantees on Long-Duration Contracts, Guaranteed Benefit Liability, Gross [Roll Forward] | ||
Balance at beginning of period | 21 | 36 |
Balance at end of period | 24 | 21 |
Accumulation at specified dates | Variable annuities | ||
Movement in Liabilities for Guarantees on Long-Duration Contracts, Guaranteed Benefit Liability, Gross [Roll Forward] | ||
Balance at beginning of period | 18 | 25 |
Balance at end of period | 18 | 18 |
Withdrawal benefits | Variable annuities | ||
Movement in Liabilities for Guarantees on Long-Duration Contracts, Guaranteed Benefit Liability, Gross [Roll Forward] | ||
Balance at beginning of period | 14 | 14 |
Balance at end of period | 15 | 14 |
Other guarantees | Variable annuities | ||
Movement in Liabilities for Guarantees on Long-Duration Contracts, Guaranteed Benefit Liability, Gross [Roll Forward] | ||
Balance at beginning of period | 288 | 260 |
Balance at end of period | 353 | 288 |
Liability for guarantees related to death benefits and interest-sensitive life products | ||
Movement in Liabilities for Guarantees on Long-Duration Contracts, Guaranteed Benefit Liability, Gross [Roll Forward] | ||
Balance at beginning of period | 293 | 308 |
Less reinsurance recoverables | 81 | 111 |
Net balance at beginning of period | 212 | 197 |
Incurred guarantee benefits | 50 | 18 |
Paid guarantee benefits | (2) | (3) |
Net change | 48 | 15 |
Net balance at end of period | 260 | 212 |
Plus reinsurance recoverables | 69 | 81 |
Balance at end of period | 329 | 293 |
At annuitization (includes income benefit guarantees) | ||
Movement in Liabilities for Guarantees on Long-Duration Contracts, Guaranteed Benefit Liability, Gross [Roll Forward] | ||
Balance at beginning of period | 24 | 39 |
Less reinsurance recoverables | 20 | 35 |
Net balance at beginning of period | 4 | 4 |
Incurred guarantee benefits | 0 | 0 |
Paid guarantee benefits | 0 | 0 |
Net change | 0 | 0 |
Net balance at end of period | 4 | 4 |
Plus reinsurance recoverables | 23 | 20 |
Balance at end of period | 27 | 24 |
Liability for guarantees related to accumulation and withdrawal benefits | ||
Movement in Liabilities for Guarantees on Long-Duration Contracts, Guaranteed Benefit Liability, Gross [Roll Forward] | ||
Balance at beginning of period | 102 | 97 |
Less reinsurance recoverables | 32 | 39 |
Net balance at beginning of period | 70 | 58 |
Incurred guarantee benefits | 18 | 12 |
Paid guarantee benefits | 0 | 0 |
Net change | 18 | 12 |
Net balance at end of period | 88 | 70 |
Plus reinsurance recoverables | 33 | 32 |
Balance at end of period | $ 121 | $ 102 |
Reinsurance and Indemnificati_3
Reinsurance and Indemnification - Effects of reinsurance on property and casualty premiums (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Property and casualty insurance premiums earned | |||
Direct | $ 40,116 | $ 39,178 | $ 36,978 |
Assumed | 784 | 806 | 841 |
Ceded | (1,383) | (1,407) | (1,306) |
Net amount | 39,517 | 38,577 | 36,513 |
Property and casualty insurance premiums | |||
Property and casualty insurance premiums written | |||
Direct | 38,695 | 37,976 | 35,895 |
Assumed | 105 | 95 | 99 |
Ceded | (1,142) | (1,117) | (1,008) |
Property and casualty insurance premiums written, net of recoverables | 37,658 | 36,954 | 34,986 |
Property and casualty insurance premiums earned | |||
Direct | 38,115 | 37,104 | 34,977 |
Assumed | 99 | 94 | 87 |
Ceded | (1,141) | (1,122) | (1,016) |
Net amount | 37,073 | 36,076 | 34,048 |
Reinsurance ceded | |||
Life premiums and contract charges | |||
Direct | 2,001 | 2,074 | 2,001 |
Assumed | 685 | 712 | 754 |
Ceded | (242) | (285) | (290) |
Life premiums and contract charges, net of recoverables | $ 2,444 | $ 2,501 | $ 2,465 |
Reinsurance and Indemnificati_4
Reinsurance and Indemnification - Reinsurance recoverables on paid and unpaid benefits (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Reinsurance Retention Policy [Line Items] | ||
Recoverables | $ 7,033 | |
Reinsurance and indemnification recoverables, net | $ 9,220 | $ 9,211 |
A- | Reinsurer Concentration Risk | ||
Reinsurance Retention Policy [Line Items] | ||
Concentration risk, percentage | 94.00% | 93.00% |
Property and casualty | ||
Reinsurance Retention Policy [Line Items] | ||
Paid | $ 101 | $ 112 |
Recoverables | 7,033 | 6,912 |
Reinsurance and indemnification recoverables, net | 7,134 | 7,024 |
Allstate Annuities | ||
Reinsurance Retention Policy [Line Items] | ||
Reinsurance and indemnification recoverables, net | 1,293 | 1,305 |
Allstate Life | ||
Reinsurance Retention Policy [Line Items] | ||
Reinsurance and indemnification recoverables, net | 712 | 794 |
Allstate Benefits | ||
Reinsurance Retention Policy [Line Items] | ||
Reinsurance and indemnification recoverables, net | $ 81 | $ 88 |
Reinsurance and Indemnificati_5
Reinsurance and Indemnification - Rollforward of Credit Loss Allowance for Reinsurance Recoverables (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Reinsurance | |
Reinsurance Recoverable, Allowance for Credit Loss, Ending Balance | $ (74) |
Property and casualty | |
Reinsurance | |
Reinsurance Recoverable, Allowance for Credit Loss, Beginning Balance | (60) |
Increase (decrease) in the provision for credit losses | 1 |
Write-offs | 0 |
Reinsurance Recoverable, Allowance for Credit Loss, Ending Balance | (59) |
Allstate Annuities, Allstate Life and Allstate Benefits | |
Reinsurance | |
Reinsurance Recoverable, Allowance for Credit Loss, Beginning Balance | (3) |
Increase (decrease) in the provision for credit losses | (1) |
Write-offs | 0 |
Reinsurance Recoverable, Allowance for Credit Loss, Ending Balance | (15) |
Allstate Annuities, Allstate Life and Allstate Benefits | Cumulative effect of change in accounting principle | |
Reinsurance | |
Reinsurance Recoverable, Allowance for Credit Loss, Beginning Balance | $ (11) |
Reinsurance and Indemnificati_6
Reinsurance and Indemnification - Michigan Catastrophic Claims Association (Details) - USD ($) | 6 Months Ended | 12 Months Ended | 24 Months Ended | ||
Jun. 30, 2020 | Dec. 31, 2020 | Jun. 30, 2022 | Jun. 30, 2020 | Dec. 31, 2019 | |
Reinsurance Retention Policy [Line Items] | |||||
Assets | $ 125,987,000,000 | $ 119,950,000,000 | |||
Retained income | 52,767,000,000 | 48,074,000,000 | |||
Michigan Catastrophic Claim Association | |||||
Reinsurance Retention Policy [Line Items] | |||||
Reinsurance and indemnification recoverables, net | 5,650,000,000 | $ 5,500,000,000 | |||
Program funding, per vehicle annual assessment | $ 100 | ||||
Reinsurance increase, percentage | 6.00% | ||||
Retention level per claim | $ 580,000 | ||||
Term of catastrophe reinsurance agreement contract | 2 years | ||||
Assets | $ 23,410,000,000 | $ 23,410,000,000 | |||
Retained income | 2,440,000,000 | $ 2,440,000,000 | |||
Retained earnings accumulated deficit decrease | $ 34,730,000,000 | ||||
Subsequent Event | Michigan Catastrophic Claim Association | |||||
Reinsurance Retention Policy [Line Items] | |||||
Retention level per claim | $ 600,000 | ||||
Term of catastrophe reinsurance agreement contract | 2 years |
Reinsurance and Indemnificati_7
Reinsurance and Indemnification - New Jersey Property-Liability Insurance Guaranty Association (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
New Jersey Unsatisfied Claim and Judgment Fund | ||
Reinsurance Retention Policy [Line Items] | ||
Minimum medical benefits portion of personal injury protection coverage for reimbursement to insurers for policies issued or renewed prior to January 1, 1991 | $ 75,000 | |
Minimum medical benefits portion of personal injury protection coverage for reimbursement to insurers for policies issued or renewed from January 1, 1991 to December 31, 2004 | 75,000 | |
Maximum reimbursement to insurers for medical benefits paid under personal injury protection coverage. | 250,000 | |
Reinsurance, administration assessments paid | 7,000,000 | |
Reinsurance and indemnification recoverables, net | 389,000,000 | $ 446,000,000 |
Insurance fund balance | 50,000,000 | |
PLGIA | ||
Reinsurance Retention Policy [Line Items] | ||
Insurance fund balance | $ 248,000,000 |
Reinsurance and Indemnificati_8
Reinsurance and Indemnification - North Carolina Reinsurance Facility (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2020 | Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Reinsurance Retention Policy [Line Items] | ||||
Insurance premiums | $ 39,517 | $ 38,577 | $ 36,513 | |
Recoverables | 7,033 | |||
North Carolina Reinsurance Facility | ||||
Reinsurance Retention Policy [Line Items] | ||||
Funds deficit in member's equity | $ 125 | |||
Net income | 15 | |||
Insurance premiums | 1,100 | |||
Paid | 8.6 | |||
Recoverables | $ 58.4 | |||
Private Passenger Auto Risk Recoupment | North Carolina Reinsurance Facility | ||||
Reinsurance Retention Policy [Line Items] | ||||
Insurance premiums | 170 | |||
Member Loss Recoupments | North Carolina Reinsurance Facility | ||||
Reinsurance Retention Policy [Line Items] | ||||
Insurance premiums | $ 69.7 |
Reinsurance and Indemnificati_9
Reinsurance and Indemnification - Florida Hurricane Catastrophe Fund (Details) | 12 Months Ended | |||
Dec. 31, 2020USD ($) | May 31, 2020USD ($)hurricane | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | |
Reinsurance Retention Policy [Line Items] | ||||
Property-liability insurance premiums earned | $ 1,383,000,000 | $ 1,407,000,000 | $ 1,306,000,000 | |
Florida Hurricane Catastrophe Fund | ||||
Reinsurance Retention Policy [Line Items] | ||||
Emergency assessment maximum percentage of premiums first year | 6.00% | |||
Emergency assessment maximum percentage of premiums subsequent years | 10.00% | |||
Emergency assessment, bonds issued | 2,000,000,000 | |||
Emergency assessment maximum percentage of premiums subsequent years, FL OIR | 0.00% | |||
Florida Hurricane Catastrophe Fund | ||||
Reinsurance Retention Policy [Line Items] | ||||
Property-liability insurance premiums earned | $ 9,000,000 | 9,000,000 | 10,000,000 | |
Reinsurance recoverable, qualifying losses, amount | 15,000,000 | 33,000,000 | $ 143,000,000 | |
Reinsurance ceded amount | 118,000,000 | |||
Percent of losses in excess of retention level to be reimbursed | 90.00% | |||
Retention level for losses related to 2 largest hurricanes | $ 58,000,000 | |||
Number of storms | hurricane | 2 | |||
Retention level for losses related to other hurricanes | $ 19,000,000 | |||
Maximum Retention level for losses related to hurricanes | $ 146,000,000 | |||
Reinsurance and indemnification recoverables, net | $ 32,000,000 | $ 52,000,000 |
Reinsurance and Indemnificat_10
Reinsurance and Indemnification - National Flood Insurance Program (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Reinsurance Retention Policy [Line Items] | |||
Property-liability insurance premiums earned | $ 1,383 | $ 1,407 | $ 1,306 |
National Flood Insurance Program | |||
Reinsurance Retention Policy [Line Items] | |||
Reinsurance and indemnification recoverables, net | 30 | 25 | |
Property-liability insurance premiums earned | 261 | 258 | 258 |
Reinsurance ceded amount | $ 87 | $ 150 | $ 118 |
Reinsurance and Indemnificat_11
Reinsurance and Indemnification - Catastrophe reinsurance (Details) - Catastrophe Reinsurance Program $ in Millions | 12 Months Ended |
Dec. 31, 2020USD ($)contractreinstatement | |
Ceded Credit Risk [Line Items] | |
Catastrophe reinsurance loss amount | $ 2,000 |
Catastrophe reinsurance aggregate loss limit | 4,980 |
Retention amount for catastrophe reinsurance agreement contracts | 500 |
Limit of aggregate losses under aggregate excess agreement | 400 |
Loss from catastrophes | $ 2,250 |
Number of reinstatements each year for each contract | reinstatement | 1 |
Contracts number | contract | 2 |
Traditional Market | |
Ceded Credit Risk [Line Items] | |
Limit of aggregate losses under aggregate excess agreement | $ 3,000 |
Insurance Linked Securities (ILS) | |
Ceded Credit Risk [Line Items] | |
Limit of aggregate losses under aggregate excess agreement | 1,530 |
Contract One | |
Ceded Credit Risk [Line Items] | |
Loss from catastrophes | $ 462 |
Term of catastrophe reinsurance agreement contract | 7 years |
Contract Two | |
Ceded Credit Risk [Line Items] | |
Loss from catastrophes | $ 284 |
Contracts number | contract | 2 |
Term of catastrophe reinsurance agreement contract | 1 year |
Minimum | |
Ceded Credit Risk [Line Items] | |
Retention amount for catastrophe reinsurance agreement contracts | $ 100 |
Reinsurance ceded amount | 150 |
Maximum | |
Ceded Credit Risk [Line Items] | |
Reinsurance ceded amount | $ 375 |
Reinsurance and Indemnificat_12
Reinsurance and Indemnification - FHCF Contract (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Reinsurance Retention Policy [Line Items] | |||
Property-liability insurance premiums earned | $ 1,383 | $ 1,407 | $ 1,306 |
Florida Hurricane Catastrophe Fund | |||
Reinsurance Retention Policy [Line Items] | |||
Limit of aggregate losses under aggregate excess agreement | 295 | ||
Retention amount for catastrophe reinsurance agreement contracts | 20 | ||
Reinsurance ceded amount | 118 | ||
Property-liability insurance premiums earned | 9 | 9 | 10 |
Catastrophe Reinsurance Program | |||
Reinsurance Retention Policy [Line Items] | |||
Limit of aggregate losses under aggregate excess agreement | 400 | ||
Retention amount for catastrophe reinsurance agreement contracts | 500 | ||
Property-liability insurance premiums earned | $ 425 | $ 386 | $ 343 |
Reinsurance and Indemnificat_13
Reinsurance and Indemnification - New Jersey Excess Catastrophe Reinsurance Agreement (Details) - New Jersey Agreement $ in Millions | 12 Months Ended |
Dec. 31, 2020USD ($)contractreinstatement | |
Reinsurance Retention Policy [Line Items] | |
Contracts number | contract | 2 |
Retention percentage of reinsurance limit | 63.00% |
Limit of aggregate losses under aggregate excess agreement | $ 400 |
Retention amount for catastrophe reinsurance agreement contracts | $ 150 |
Number of reinstatements each year for each contract | reinstatement | 1 |
Reinsurance and Indemnificat_14
Reinsurance and Indemnification - Kentucky Earthquake Excess Catastrophe Reinsurance Contract (Details) - Kentucky Agreement $ in Millions | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Reinsurance Retention Policy [Line Items] | |
Term of catastrophe reinsurance agreement contract | 3 years |
Limit of aggregate losses under aggregate excess agreement | $ 28 |
Retention percentage of reinsurance limit | 95.00% |
Retention amount for catastrophe reinsurance agreement contracts | $ 2 |
Reinsurance and Indemnificat_15
Reinsurance and Indemnification- Florida Hurricane Catastrophe Fund (“FHCF”), Insurance Linked Securities (“ILS”) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Ceded Credit Risk [Line Items] | |||
Property-liability insurance premiums earned | $ 1,383 | $ 1,407 | $ 1,306 |
Florida Hurricane Catastrophe Fund | |||
Ceded Credit Risk [Line Items] | |||
Catastrophe reinsurance aggregate loss limit | 633 | ||
Retention amount for catastrophe reinsurance agreement contracts | 20 | ||
Limit of aggregate losses under aggregate excess agreement | 295 | ||
Catastrophe reinsurance loss amount | 264 | ||
Reinsurance ceded amount | 118 | ||
Property-liability insurance premiums earned | 9 | 9 | 10 |
Florida Hurricane Catastrophe Fund | Insurance Linked Securities (ILS) | |||
Ceded Credit Risk [Line Items] | |||
Limit of aggregate losses under aggregate excess agreement | 200 | ||
Catastrophe Reinsurance Program | |||
Ceded Credit Risk [Line Items] | |||
Catastrophe reinsurance aggregate loss limit | 4,980 | ||
Retention amount for catastrophe reinsurance agreement contracts | 500 | ||
Limit of aggregate losses under aggregate excess agreement | 400 | ||
Catastrophe reinsurance loss amount | 2,000 | ||
Property-liability insurance premiums earned | 425 | $ 386 | $ 343 |
Catastrophe Reinsurance Program | Insurance Linked Securities (ILS) | |||
Ceded Credit Risk [Line Items] | |||
Limit of aggregate losses under aggregate excess agreement | $ 1,530 |
Reinsurance and Indemnificat_16
Reinsurance and Indemnification - Other reinsurance programs (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Lloyds of London | ||
Reinsurance Retention Policy [Line Items] | ||
Reinsurance and indemnification recoverables, net | $ 166 | $ 158 |
Aleka Insurance Inc | ||
Reinsurance Retention Policy [Line Items] | ||
Largest reinsurance recoverable from a single reinsurer | $ 165 | $ 115 |
Reinsurance and Indemnificat_17
Reinsurance and Indemnification - Life and annuity reinsurance recoverables (Details) - Allstate Annuities | 12 Months Ended |
Dec. 31, 2020reinsurer | |
Reinsurance Retention Policy [Line Items] | |
Percent of morbidity risk ceded for term-life insurance policies | 90.00% |
Number of unaffiliated reinsurers | 14 |
Reinsurance and Indemnificat_18
Reinsurance and Indemnification - Retention limits by period of policy issuance (Details) - Allstate Annuities - USD ($) $ in Millions | 1 Months Ended | 45 Months Ended | 48 Months Ended | 69 Months Ended | 106 Months Ended |
Aug. 31, 1998 | Mar. 31, 2011 | Mar. 31, 2015 | Dec. 31, 2020 | Jun. 30, 2007 | |
Reinsurance Retention Policy [Line Items] | |||||
Retention level per claim | $ 1 | $ 5 | $ 2 | ||
Retention level for contracts issued to individuals age 70 and over | 3 | ||||
Retention level for certain large contracts meeting specific criteria | $ 10 | $ 5 | |||
Single life | |||||
Reinsurance Retention Policy [Line Items] | |||||
Retention level per claim | $ 5 | $ 2 | |||
Retention level for contracts issued to individuals age 70 and over | 3 | ||||
Retention level for certain large contracts meeting specific criteria | 10 | ||||
Joint life | |||||
Reinsurance Retention Policy [Line Items] | |||||
Retention level per claim | 8 | ||||
Retention level for certain large contracts meeting specific criteria | $ 10 |
Reinsurance and Indemnificat_19
Reinsurance and Indemnification - Other Reinsurance Narrative (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Reinsurance Retention Policy [Line Items] | |||
Reinsurance recoverables | $ 66 | $ 73 | |
Life insurance in force ceded to unaffiliated reinsurers | 67,319 | 74,021 | $ 81,186 |
Allstate Annuities | |||
Reinsurance Retention Policy [Line Items] | |||
Gross life insurance in force | 425,440 | ||
Life insurance in force ceded to unaffiliated reinsurers | 67,320 | ||
Prudential | Allstate Annuities | |||
Reinsurance Retention Policy [Line Items] | |||
Reinsurance recoverables | 1,280 | 1,290 | |
Citigroup Subsidiaries and Scottish Re | Operating costs and expenses | Allstate Annuities | |||
Reinsurance Retention Policy [Line Items] | |||
Reinsurance recoverables | 99 | $ 112 | |
Lincoln Benefit Life Company | |||
Reinsurance Retention Policy [Line Items] | |||
Investments held by trust | $ 6,290 |
Reinsurance and Indemnificat_20
Reinsurance and Indemnification - Amounts Ceded to Prudential (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Contract benefits | |||
Ceded Credit Risk [Line Items] | |||
Reinsurance ceded amount | $ 155 | $ 165 | $ 240 |
Interest credited to contractholder funds | |||
Ceded Credit Risk [Line Items] | |||
Reinsurance ceded amount | 27 | 20 | 24 |
Prudential | Premiums and contract charges | Allstate Financial | |||
Ceded Credit Risk [Line Items] | |||
Reinsurance ceded amount | 64 | 65 | 72 |
Prudential | Contract benefits | Allstate Financial | |||
Ceded Credit Risk [Line Items] | |||
Reinsurance ceded amount | 46 | (4) | 87 |
Prudential | Interest credited to contractholder funds | Allstate Financial | |||
Ceded Credit Risk [Line Items] | |||
Reinsurance ceded amount | 20 | 19 | 20 |
Prudential | Operating costs and expenses | Allstate Financial | |||
Ceded Credit Risk [Line Items] | |||
Reinsurance ceded amount | $ 12 | $ 12 | $ 14 |
Deferred Policy Acquisition a_3
Deferred Policy Acquisition and Sales Inducement Costs -Deferred policy acquisition costs activity (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Deferred policy acquisition costs activity | |||
Balance, beginning of year | $ 4,699 | $ 4,784 | $ 4,191 |
Acquisition costs deferred | 5,758 | 5,622 | 5,663 |
Amortization charged to income | (5,630) | (5,533) | (5,222) |
Effect of unrealized gains and losses | (127) | (174) | 152 |
Balance, end of year | $ 4,700 | $ 4,699 | $ 4,784 |
Deferred Policy Acquisition a_4
Deferred Policy Acquisition and Sales Inducement Costs - Deferred sales inducement costs activity (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Deferred sales inducement costs activity | |||
Balance, beginning of year | $ 27 | $ 34 | $ 36 |
Amortization charged to income | (5) | (5) | (4) |
Effect of unrealized gains and losses | 3 | (2) | 2 |
Balance, end of year | $ 25 | $ 27 | $ 34 |
Capital Structure - Total debt
Capital Structure - Total debt outstanding (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Nov. 19, 2020 | Dec. 31, 2019 | |
Debt Instrument [Line Items] | |||
Due after one year through five years | $ 1,600,000,000 | $ 1,000,000,000 | |
Due after five years through ten years | 1,150,000,000 | 550,000,000 | |
Due after ten years | 5,141,000,000 | 5,141,000,000 | |
Total long-term debt principal | 7,891,000,000 | 6,691,000,000 | |
Debt issuance costs | (66,000,000) | (60,000,000) | |
Total long-term debt | 7,825,000,000 | 6,631,000,000 | |
Short-term debt | 0 | 0 | |
Total debt | $ 7,825,000,000 | 6,631,000,000 | |
Redemption price as percentage of principal amount plus accrued and unpaid interest | 100.00% | ||
Floating Rate Senior Notes, due 2021 | |||
Debt Instrument [Line Items] | |||
Due after one year through five years | $ 250,000,000 | 250,000,000 | |
Interest rate spread over LIBOR (as a percent) | 0.43% | ||
Floating Rate Senior Notes, due 2023 | |||
Debt Instrument [Line Items] | |||
Due after one year through five years | $ 250,000,000 | 250,000,000 | |
Interest rate spread over LIBOR (as a percent) | 0.63% | ||
3.15% Senior Notes, due 2023 | |||
Debt Instrument [Line Items] | |||
Due after one year through five years | $ 500,000,000 | 500,000,000 | |
Note stated interest rate (as a percent) | 3.15% | ||
0.75% Senior Notes, due 2025 | |||
Debt Instrument [Line Items] | |||
Due after one year through five years | $ 600,000,000 | 0 | |
Total long-term debt | $ 600,000,000 | ||
Note stated interest rate (as a percent) | 0.75% | 0.75% | |
3.28% Senior Notes, due 2026 | |||
Debt Instrument [Line Items] | |||
Due after five years through ten years | $ 550,000,000 | 550,000,000 | |
Note stated interest rate (as a percent) | 3.28% | ||
1.45% Senior Notes, due 2030 | |||
Debt Instrument [Line Items] | |||
Due after five years through ten years | $ 600,000,000 | 0 | |
Total long-term debt | $ 600,000,000 | ||
Note stated interest rate (as a percent) | 1.45% | 1.45% | |
6.125% Senior Notes, due 2032 | |||
Debt Instrument [Line Items] | |||
Due after ten years | $ 159,000,000 | 159,000,000 | |
Note stated interest rate (as a percent) | 6.125% | ||
5.35% Senior Notes due 2033 | |||
Debt Instrument [Line Items] | |||
Due after ten years | $ 323,000,000 | 323,000,000 | |
Note stated interest rate (as a percent) | 5.35% | ||
5.55% Senior Notes due 2035 | |||
Debt Instrument [Line Items] | |||
Due after ten years | $ 546,000,000 | 546,000,000 | |
Note stated interest rate (as a percent) | 5.55% | ||
5.95% Senior Notes, due 2036 | |||
Debt Instrument [Line Items] | |||
Due after ten years | $ 386,000,000 | 386,000,000 | |
Note stated interest rate (as a percent) | 5.95% | ||
6.900% Senior Debentures, due 2038 | |||
Debt Instrument [Line Items] | |||
Due after ten years | $ 165,000,000 | 165,000,000 | |
Note stated interest rate (as a percent) | 6.90% | ||
5.20% Senior Notes due 2042 | |||
Debt Instrument [Line Items] | |||
Due after ten years | $ 62,000,000 | 62,000,000 | |
Note stated interest rate (as a percent) | 5.20% | ||
4.50% Senior Notes, due 2043 | |||
Debt Instrument [Line Items] | |||
Due after ten years | $ 500,000,000 | 500,000,000 | |
Note stated interest rate (as a percent) | 4.50% | ||
4.20% Senior Notes, due 2046 | |||
Debt Instrument [Line Items] | |||
Due after ten years | $ 700,000,000 | 700,000,000 | |
Note stated interest rate (as a percent) | 4.20% | ||
3.85% Senior Notes, due 2049 | |||
Debt Instrument [Line Items] | |||
Due after ten years | $ 500,000,000 | 500,000,000 | |
Note stated interest rate (as a percent) | 3.85% | ||
5.100% Subordinated Debentures, due 2053 | |||
Debt Instrument [Line Items] | |||
Due after ten years | $ 500,000,000 | 500,000,000 | |
Note stated interest rate (as a percent) | 5.10% | ||
5.750% Subordinated Debentures, due 2053 | |||
Debt Instrument [Line Items] | |||
Due after ten years | $ 800,000,000 | 800,000,000 | |
Note stated interest rate (as a percent) | 5.75% | ||
6.500% Junior Subordinated Debentures, due 2067 | |||
Debt Instrument [Line Items] | |||
Due after ten years | $ 500,000,000 | $ 500,000,000 | |
Total long-term debt | $ 500,000,000 | ||
Note stated interest rate (as a percent) | 6.50% |
Capital Structure - Debt maturi
Capital Structure - Debt maturities (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Total debt outstanding by maturity: | ||
2021 | $ 250 | |
2022 | 0 | |
2023 | 750 | |
2024 | 0 | |
2025 | 600 | |
Thereafter | 6,291 | |
Total long-term debt principal | $ 7,891 | $ 6,691 |
Capital Structure - Narrative (
Capital Structure - Narrative (Details) | Jan. 15, 2020USD ($)$ / sharesshares | Dec. 31, 2020USD ($)director$ / sharesshares | Dec. 31, 2019USD ($)$ / sharesshares | Dec. 31, 2018USD ($) | Nov. 30, 2020USD ($) | Nov. 19, 2020USD ($) |
Class of Stock [Line Items] | ||||||
Long-term debt | $ 7,825,000,000 | $ 6,631,000,000 | ||||
Unsecured revolving credit facility | $ 750,000,000 | |||||
Additional borrowing capacity under credit facility increase provision | $ 500,000,000 | |||||
Maximum debt to capital ratio allowed under credit facility covenant (as a percent) | 37.50% | |||||
Credit facility, amount outstanding | $ 0 | 0 | ||||
Interest paid on debt | 311,000,000 | 312,000,000 | $ 330,000,000 | |||
Other liabilities and accrued expenses | $ 430,000,000 | $ 389,000,000 | ||||
Common stock | ||||||
Common stock, shares, issued (in shares) | shares | 900,000,000 | 900,000,000 | ||||
Common stock, shares, outstanding (in shares) | shares | 304,000,000 | 319,000,000 | ||||
Treasury stock, shares (in shares) | shares | 596,000,000 | 581,000,000 | ||||
Reacquired shares (in shares) | shares | 17,000,000 | |||||
Average cost of reacquired shares (in dollars per share) | $ / shares | $ 97.54 | |||||
Reissued net shares under equity incentive plans (in shares) | shares | 3,000,000 | |||||
Preferred stock | ||||||
Preferred stock, par or stated value per share (in USD per share) | $ / shares | $ 1 | $ 1 | ||||
Redemption of preferred stock | $ 288,000,000 | |||||
Preferred stock redemption premium | $ 10,000,000 | |||||
Period of issuance of common stock prior to dividend declaration date during which dividend declaration is prohibited | 90 days | |||||
Noncumulative Perpetual Preferred Stock | ||||||
Class of Stock [Line Items] | ||||||
Period after occurrence of certain tax and rating agency events in which redemption of debt in whole permissible | 90 days | |||||
Preferred stock | ||||||
Preferred stock, par or stated value per share (in USD per share) | $ / shares | $ 1 | |||||
Preferred stock, shares liquidation preference (in dollars per share) | $ / shares | 25,000 | |||||
Preferred stock, redemption price (in dollars per share) | $ / shares | $ 25,000 | |||||
Series A Preferred Stock | ||||||
Preferred stock | ||||||
Preferred stock, par or stated value per share (in USD per share) | $ / shares | $ 1 | |||||
Preferred stock, shares liquidation preference (in dollars per share) | $ / shares | $ 25,000 | |||||
Stock redeemed (in shares) | shares | 11,500 | |||||
Minimum | ||||||
Preferred stock | ||||||
Collective risk-based capital ratios of subsidiaries as a percentage of net written premiums of insurance business | 80.00% | |||||
Percentage of decline in consolidated shareholders' equity from benchmark quarter | 20.00% | |||||
Minimum | Noncumulative Perpetual Preferred Stock | ||||||
Preferred stock | ||||||
Preferred stock, redemption price (in dollars per share) | $ / shares | $ 25,000 | |||||
Maximum | ||||||
Preferred stock | ||||||
Risk-based capital ratios as a percentage of action level risk-based capital | 175.00% | |||||
Percentage by which consolidated shareholders' equity should increase or decrease to avoid restriction on dividends | 20.00% | |||||
Maximum | Noncumulative Perpetual Preferred Stock | ||||||
Preferred stock | ||||||
Additional members of the board of directors | director | 2 | |||||
Preferred stock, redemption price (in dollars per share) | $ / shares | $ 25,500 | |||||
Commercial Paper | ||||||
Class of Stock [Line Items] | ||||||
Commercial Paper maximum borrowing capacity | $ 750,000,000 | |||||
Amount of commercial paper outstanding | $ 0 | $ 0 | ||||
Senior Notes Due 2025 at 0.750 Percent | ||||||
Class of Stock [Line Items] | ||||||
Debt instrument, face amount | $ 600,000,000 | |||||
Note stated interest rate (as a percent) | 0.75% | 0.75% | ||||
Long-term debt | $ 600,000,000 | |||||
Senior Notes Due 2030 at 1.45 Percent | ||||||
Class of Stock [Line Items] | ||||||
Debt instrument, face amount | $ 600,000,000 | |||||
Note stated interest rate (as a percent) | 1.45% | 1.45% | ||||
Long-term debt | $ 600,000,000 | |||||
7.45% Senior Notes, due 2019 | ||||||
Class of Stock [Line Items] | ||||||
Threshold percentage of repurchase or redemption of outstanding principal debentures for non applicability of promises and covenants contained in the new RCC | 10.00% | |||||
Period within which threshold percentage of outstanding principal of debentures is to be purchased for non applicability of promises and covenants contained in the new RCC | 1 year | |||||
Specified period within which percentage of outstanding principal of debentures is to be purchased for non applicability of promises and covenants contained in the new RCC | 10 years | |||||
7.45% Senior Notes, due 2019 | Maximum | ||||||
Class of Stock [Line Items] | ||||||
Percentage of repurchase or redemption of outstanding principal debentures within specified period for non applicability of promises and covenants contained in the new RCC | 25.00% | |||||
5.100% Subordinated Debentures, due 2053 | ||||||
Class of Stock [Line Items] | ||||||
Note stated interest rate (as a percent) | 5.10% | |||||
5.100% Subordinated Debentures, due 2053 | London Interbank Offered Rate (LIBOR) | ||||||
Class of Stock [Line Items] | ||||||
Interest rate spread over LIBOR (as a percent) | 3.165% | |||||
5.750% Subordinated Debentures, due 2053 | ||||||
Class of Stock [Line Items] | ||||||
Note stated interest rate (as a percent) | 5.75% | |||||
5.750% Subordinated Debentures, due 2053 | London Interbank Offered Rate (LIBOR) | ||||||
Class of Stock [Line Items] | ||||||
Interest rate spread over LIBOR (as a percent) | 2.938% | |||||
Subordinated Debentures | ||||||
Class of Stock [Line Items] | ||||||
Minimum principal outstanding amount for redemption of debt in whole or in part | $ 25,000,000 | |||||
Period after occurrence of certain tax and rating agency events in which redemption of debt in whole permissible | 90 days | |||||
Maximum period for deferment of interest payment | 5 years | |||||
6.500% Junior Subordinated Debentures, due 2067 | ||||||
Class of Stock [Line Items] | ||||||
Note stated interest rate (as a percent) | 6.50% | |||||
Long-term debt | $ 500,000,000 | |||||
6.500% Junior Subordinated Debentures, due 2067 | London Interbank Offered Rate (LIBOR) | ||||||
Class of Stock [Line Items] | ||||||
Interest rate spread over LIBOR (as a percent) | 2.12% | |||||
The Debentures | ||||||
Class of Stock [Line Items] | ||||||
Maximum period for deferment of interest payment | 10 years | |||||
Reserved common stock authorized and unissued for debentures obligations (in shares) | shares | 75,000,000 |
Capital Structure - Outstanding
Capital Structure - Outstanding preferred stock (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Class of Stock [Line Items] | |||
Preferred stock, shares issued (in shares) | 81,000 | 92,500 | |
Proceeds from issuance of preferred stock, gross | $ 2,025 | $ 2,313 | |
Aggregate dividend payment | 108 | 134 | $ 134 |
Excess redemption price over carrying value | $ 10 | $ 37 | $ 13 |
Series A | |||
Class of Stock [Line Items] | |||
Preferred stock, shares issued (in shares) | 0 | 11,500 | |
Proceeds from issuance of preferred stock, gross | $ 0 | $ 287.5 | |
Dividend rate | 5.625% | ||
Dividends payable, amount per share (in usd per share) | $ 0 | $ 1.41 | $ 1.41 |
Aggregate dividend payment | $ 4 | $ 16 | $ 16 |
Series C | |||
Class of Stock [Line Items] | |||
Preferred stock, shares issued (in shares) | 0 | 0 | |
Proceeds from issuance of preferred stock, gross | $ 0 | $ 0 | |
Dividend rate | 6.75% | ||
Dividends payable, amount per share (in usd per share) | $ 0 | $ 0 | $ 1.69 |
Aggregate dividend payment | $ 0 | $ 0 | $ 26 |
Series D | |||
Class of Stock [Line Items] | |||
Preferred stock, shares issued (in shares) | 0 | 0 | |
Proceeds from issuance of preferred stock, gross | $ 0 | $ 0 | |
Dividend rate | 6.625% | ||
Dividends payable, amount per share (in usd per share) | $ 0 | $ 1.66 | $ 1.66 |
Aggregate dividend payment | $ 0 | $ 9 | $ 9 |
Series E | |||
Class of Stock [Line Items] | |||
Preferred stock, shares issued (in shares) | 0 | 0 | |
Proceeds from issuance of preferred stock, gross | $ 0 | $ 0 | |
Dividend rate | 6.625% | ||
Dividends payable, amount per share (in usd per share) | $ 0 | $ 1.66 | $ 1.66 |
Aggregate dividend payment | $ 0 | $ 49 | $ 49 |
Series F | |||
Class of Stock [Line Items] | |||
Preferred stock, shares issued (in shares) | 0 | 0 | |
Proceeds from issuance of preferred stock, gross | $ 0 | $ 0 | |
Dividend rate | 6.25% | ||
Dividends payable, amount per share (in usd per share) | $ 0 | $ 1.56 | $ 1.56 |
Aggregate dividend payment | $ 0 | $ 16 | $ 16 |
Series G | |||
Class of Stock [Line Items] | |||
Preferred stock, shares issued (in shares) | 23,000 | 23,000 | |
Proceeds from issuance of preferred stock, gross | $ 575 | $ 575 | |
Dividend rate | 5.625% | ||
Dividends payable, amount per share (in usd per share) | $ 1.41 | $ 1.41 | $ 1.41 |
Aggregate dividend payment | $ 32 | $ 32 | $ 18 |
Series H | |||
Class of Stock [Line Items] | |||
Preferred stock, shares issued (in shares) | 46,000 | 46,000 | |
Proceeds from issuance of preferred stock, gross | $ 1,150 | $ 1,150 | |
Dividend rate | 5.10% | ||
Dividends payable, amount per share (in usd per share) | $ 1.28 | $ 1.28 | $ 0 |
Aggregate dividend payment | $ 59 | $ 12 | $ 0 |
Series I | |||
Class of Stock [Line Items] | |||
Preferred stock, shares issued (in shares) | 12,000 | 12,000 | |
Proceeds from issuance of preferred stock, gross | $ 300 | $ 300 | |
Dividend rate | 4.75% | ||
Dividends payable, amount per share (in usd per share) | $ 1.19 | $ 1.19 | $ 0 |
Aggregate dividend payment | $ 13 | $ 0 | $ 0 |
Company Restructuring - Narrati
Company Restructuring - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and related charges | $ 259 | $ 41 | $ 67 | |
Transformative Growth Plan | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and related charges | 238 | |||
Transformative Growth Plan | Forecast | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and related charges | $ 290 | |||
Employee costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Cumulative amount incurred to date for active programs | 223 | |||
Exit costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Cumulative amount incurred to date for active programs | $ 52 |
Company Restructuring - Changes
Company Restructuring - Changes in the restructuring liability (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Restructuring Reserve | |
Restructuring liability as of December 31, 2019 | $ 22 |
Expense incurred | 260 |
Adjustments to liability | (1) |
Payments and non-cash pension settlements | (209) |
Restructuring liability as of December 31, 2020 | 72 |
Employee costs | |
Restructuring Reserve | |
Restructuring liability as of December 31, 2019 | 14 |
Expense incurred | 214 |
Adjustments to liability | 3 |
Payments and non-cash pension settlements | (159) |
Restructuring liability as of December 31, 2020 | 72 |
Exit costs | |
Restructuring Reserve | |
Restructuring liability as of December 31, 2019 | 8 |
Expense incurred | 46 |
Adjustments to liability | (4) |
Payments and non-cash pension settlements | (50) |
Restructuring liability as of December 31, 2020 | $ 0 |
Commitments, Guarantees and C_2
Commitments, Guarantees and Contingent Liabilities - Florida and Louisiana Citizens (Details) | 12 Months Ended |
Dec. 31, 2020 | |
FL Citizens | |
Loss Contingencies | |
Assessment rate, percent of deficit or prior year premiums | 2.00% |
Surcharge on policies, deadline for filing prior to imposing | 15 days |
Emergency assessment maximum percentage of premiums subsequent years, FL OIR | 0.00% |
LA Citizens | |
Loss Contingencies | |
Assessment rate, percent of deficit or prior year premiums | 10.00% |
Commitments, Guarantees and C_3
Commitments, Guarantees and Contingent Liabilities - Florida Hurricane Catastrophe Fund and California Earthquake Authority (Details) - California Earthquake Authority - USD ($) $ in Millions | Oct. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 |
Loss Contingencies | |||
CEA capital balance | $ 6,000 | ||
Proceeds of revenue bonds | 1,100 | ||
CEA existing reinsurance layer | 9,500 | ||
Policy holder surcharge | 1,000 | ||
Current estimated maximum CEA assessment | 1,700 | ||
CEA capital balance threshold | 350 | ||
CEA capital balance to be restored | 350 | ||
Projected aggregate claim paying capacity | $ 19,300 | ||
Share of the CEA (as a percent) | 9.30% | ||
Maximum possible assessment | $ 155 |
Commitments, Guarantees and C_4
Commitments, Guarantees and Contingent Liabilities - Texas Associations (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Loss Contingencies | ||
Portion of assessment | $ 1 | |
Liability for claims | 27,610 | $ 27,712 |
Texas Fair Plan Association | ||
Loss Contingencies | ||
Liability for claims | $ 8 |
Commitments, Guarantees and C_5
Commitments, Guarantees and Contingent Liabilities - New Jersey and North Carolina (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2020USD ($) | |
North Carolina Joint Underwriters Association | |
Loss Contingencies | |
Plan surplus receivable | $ 6 |
Funds surplus in member's equity | 33 |
North Carolina Insurance Underwriting Association | |
Loss Contingencies | |
Funds surplus in member's equity | 555 |
Maximum possible assessment | $ 1,000 |
Percentage of surcharge on property insurance policy statewide to be remitted to the plan | 10.00% |
Commitments, Guarantees and C_6
Commitments, Guarantees and Contingent Liabilities - Guaranty funds and Guarantees (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Guaranty Funds | ||
Loss Contingencies | ||
Liability for insurance assessments | $ 12,000,000 | $ 13,000,000 |
Insurance assessments, premium tax offsets | 14,000,000 | $ 15,000,000 |
Minimum | ||
Loss Contingencies | ||
Reasonably possible additional losses | 0 | |
Maximum | ||
Loss Contingencies | ||
Reasonably possible additional losses | $ 85,000,000 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Operating Loss Carryforwards [Line Items] | |||
Operating loss carryforwards | $ 112 | ||
Income tax paid | 1,480 | $ 648 | $ 731 |
Current income tax payable | 84 | $ 124 | |
US Federal | |||
Operating Loss Carryforwards [Line Items] | |||
Operating loss carryforwards | 44 | ||
Foreign | |||
Operating Loss Carryforwards [Line Items] | |||
Operating loss carryforwards | $ 68 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of unrecognized tax benefits (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Reconciliation of the change in the amount of unrecognized tax benefits | |||
Balance – beginning of year | $ 70 | $ 70 | $ 55 |
Increase for tax positions taken in a prior year | 0 | 0 | 3 |
Increase for tax positions taken in the current year | 0 | 0 | 12 |
Decrease for settlements | (58) | 0 | 0 |
Balance – end of year | $ 12 | $ 70 | $ 70 |
Income Taxes - Components of th
Income Taxes - Components of the deferred tax assets and liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred tax assets | ||
Unearned premium reserves | $ 659 | $ 642 |
Pension | 161 | 197 |
Accrued compensation | 139 | 147 |
Discount on loss reserves | 79 | 78 |
Other postretirement benefits | 36 | 49 |
Net operating loss carryover | 23 | 26 |
Other assets | 68 | 54 |
Total deferred tax assets | 1,165 | 1,193 |
Deferred tax liabilities | ||
DAC | (858) | (847) |
Unrealized net capital gains | (856) | (507) |
Investments | (394) | (567) |
Life and annuity reserves | (216) | (222) |
Intangible assets | (87) | (98) |
Other liabilities | (109) | (106) |
Total deferred tax liabilities | (2,520) | (2,347) |
Net deferred tax liability | $ (1,355) | $ (1,154) |
Income Taxes - Components of _2
Income Taxes - Components of the net operating loss carryforwards (Details) $ in Millions | Dec. 31, 2020USD ($) |
Operating Loss Carryforwards [Line Items] | |
Operating loss carryforwards | $ 112 |
20-Year Carryforward Expires in 2025-2037 | |
Operating Loss Carryforwards [Line Items] | |
Operating loss carryforwards | 36 |
Indefinite Carryforward Period | |
Operating Loss Carryforwards [Line Items] | |
Operating loss carryforwards | 76 |
US Federal | |
Operating Loss Carryforwards [Line Items] | |
Operating loss carryforwards | 44 |
US Federal | 20-Year Carryforward Expires in 2025-2037 | |
Operating Loss Carryforwards [Line Items] | |
Operating loss carryforwards | 36 |
US Federal | Indefinite Carryforward Period | |
Operating Loss Carryforwards [Line Items] | |
Operating loss carryforwards | 8 |
Foreign | |
Operating Loss Carryforwards [Line Items] | |
Operating loss carryforwards | 68 |
Foreign | 20-Year Carryforward Expires in 2025-2037 | |
Operating Loss Carryforwards [Line Items] | |
Operating loss carryforwards | 0 |
Foreign | Indefinite Carryforward Period | |
Operating Loss Carryforwards [Line Items] | |
Operating loss carryforwards | $ 68 |
Income Taxes - Components of in
Income Taxes - Components of income tax expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Components of income tax expense (benefit) | |||
Current | $ 1,499 | $ 991 | $ 704 |
Deferred | (116) | 251 | (236) |
Total income tax expense | $ 1,383 | $ 1,242 | $ 468 |
Income Taxes - Reconciliation_2
Income Taxes - Reconciliation of income tax rate (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Effective Income Tax Rate Reconciliation, Amount [Abstract] | |||
Income before income taxes | $ 6,959 | $ 6,089 | $ 2,628 |
Statutory federal income tax rate on income from operations | 1,461 | 1,279 | 552 |
Tax credits | (45) | (33) | (34) |
Share-based payments | (30) | (24) | (16) |
Tax-exempt income | (24) | (27) | (24) |
State income taxes | 35 | 41 | 27 |
Tax Legislation benefit | 0 | 0 | (29) |
Other | (14) | 6 | (8) |
Total income tax expense | $ 1,383 | $ 1,242 | $ 468 |
Effective Income Tax Rate, Continuing Operations, Tax Rate Reconciliation | |||
Statutory federal income tax rate on income from operations | 21.00% | 21.00% | 21.00% |
Tax credits | (0.70%) | (0.50%) | (1.30%) |
Share-based payments | (0.40%) | (0.40%) | (0.60%) |
Tax-exempt income | (0.30%) | (0.40%) | (0.90%) |
State income taxes | 0.50% | 0.70% | 1.00% |
Tax Legislation benefit | 0.00% | 0.00% | (1.10%) |
Other | (0.20%) | 0.00% | (0.30%) |
Effective income tax rate on income from operations | 19.90% | 20.40% | 17.80% |
Statutory Financial Informati_3
Statutory Financial Information and Dividend Limitations - Allstates domestic insurance subsidiaries (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Amount per statutory accounting practices | |||
Net income (loss) | $ 6,246 | $ 4,411 | $ 3,404 |
Capital and surplus | 21,383 | 20,400 | |
Property and casualty | |||
Amount per statutory accounting practices | |||
Net income (loss) | 6,232 | 3,989 | 2,939 |
Capital and surplus | 17,128 | 16,192 | |
Allstate Annuities | |||
Amount per statutory accounting practices | |||
Net income (loss) | 14 | 422 | $ 465 |
Capital and surplus | $ 4,255 | $ 4,208 |
Statutory Financial Informati_4
Statutory Financial Information and Dividend Limitations - Narrative (Details) $ in Millions | 12 Months Ended | |
Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | |
Dividend Limitations | ||
Action level RBC expressed as a multiplier of authorized control level RBC, which if not achieved would require specific actions to be taken | 2 | |
Capital and surplus | $ 21,383 | $ 20,400 |
Restricted net assets | 31,030 | |
Allstate Insurance Company | ||
Dividend Limitations | ||
Dividends paid | 4,440 | |
Maximum amount of dividends without prior approval | $ 5,950 | |
Advance notice period required for payment of dividend in excess of amount available for distribution without prior approval | 30 days | |
Unassigned surplus excluding unrealized appreciation from investments | $ 13,520 | |
Capital and surplus | 20,540 | |
Authorized control level RBC | $ 2,920 |
Benefit Plans - Future amortiza
Benefit Plans - Future amortization amounts (Details) $ in Millions | Dec. 31, 2020USD ($) |
Pension benefits | |
Estimates of the net actuarial loss (gain) and prior service credit expected to be recognized as a component of net periodic benefit cost during 2015 | |
Prior service credit | $ 50 |
Postretirement benefits | |
Estimates of the net actuarial loss (gain) and prior service credit expected to be recognized as a component of net periodic benefit cost during 2015 | |
Prior service credit | $ 25 |
Benefit Plans - Changes in bene
Benefit Plans - Changes in benefit obligations (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Change in benefit obligation | |||
Service cost | $ 108 | $ 125 | $ 117 |
Interest cost | 221 | 254 | 270 |
Pension benefits | |||
Change in benefit obligation | |||
Benefit obligation, beginning of year | 7,139 | 6,224 | |
Service cost | 104 | 117 | 110 |
Interest cost | 210 | 240 | 255 |
Participant contributions | 0 | 0 | |
Actuarial losses (gains) | 813 | 927 | |
Benefits paid | (522) | (356) | |
Plan amendments | 0 | 0 | |
Translation adjustment and other | (1) | (13) | |
Curtailment losses (gains) | 20 | 0 | |
Benefit obligation, end of year | 7,763 | 7,139 | 6,224 |
Change in plan assets | |||
Fair value of plan assets, beginning of year | 6,192 | 5,299 | |
Actual return on plan assets | 1,300 | 1,235 | |
Employer contribution | 18 | 27 | |
Benefits paid | (522) | (356) | |
Translation adjustment and other | (1) | (13) | |
Fair value of plan assets, end of year | 6,987 | 6,192 | 5,299 |
Funded status | (776) | (947) | |
Prior service credit | (78) | ||
Unamortized pension and other postretirement prior service credit | (78) | (142) | |
Postretirement benefits | |||
Change in benefit obligation | |||
Benefit obligation, beginning of year | 397 | 375 | |
Service cost | 4 | 8 | 7 |
Interest cost | 11 | 14 | 15 |
Participant contributions | 14 | 15 | |
Actuarial losses (gains) | 22 | 19 | |
Benefits paid | (37) | (39) | |
Plan amendments | (102) | 0 | |
Translation adjustment and other | (1) | 5 | |
Curtailment losses (gains) | 10 | 0 | |
Benefit obligation, end of year | 318 | 397 | $ 375 |
Change in plan assets | |||
Fair value of plan assets, beginning of year | |||
Employer contribution | 23 | 24 | |
Fair value of plan assets, end of year | |||
Funded status | (318) | (397) | |
Prior service credit | (89) | ||
Unamortized pension and other postretirement prior service credit | $ (89) | $ (13) |
Benefit Plans - Changes not yet
Benefit Plans - Changes not yet recognized (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Pension benefits | |
Change in items not yet recognized as a component of defined benefit plans, net periodic cost | |
Items not yet recognized as a component of net cost – December 31, 2019 | $ (142) |
Prior service credit arising during the period | 0 |
Prior service credit recognized during the period due to curtailment | 10 |
Prior service credit amortized to net cost | 54 |
Translation adjustment and other | 0 |
Items not yet recognized as a component of net cost – December 31, 2020 | (78) |
Postretirement benefits | |
Change in items not yet recognized as a component of defined benefit plans, net periodic cost | |
Items not yet recognized as a component of net cost – December 31, 2019 | (13) |
Prior service credit arising during the period | (102) |
Prior service credit recognized during the period due to curtailment | 18 |
Prior service credit amortized to net cost | 10 |
Translation adjustment and other | (2) |
Items not yet recognized as a component of net cost – December 31, 2020 | $ (89) |
Benefit Plans - Obligations and
Benefit Plans - Obligations and funded status narrative (Details) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2019pension_plan | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | |
Retirement Benefits [Abstract] | |||
Number of pension plans | pension_plan | 2 | ||
Maximum annual medical cost inflation after retirement for Company's share of retiree medical benefits cost for non Medicare-eligible retirees (as a percent) | 5.00% | ||
Pension benefits | |||
Components of net periodic cost | |||
Accumulated benefit obligation (ABO) | $ 7,550 | $ 7,020 | |
Company's Pension Plans with an ABO in excess of plan assets | |||
Company's pension plans with ABO in excess of plan assets, aggregate projected benefit obligation | 7,330 | 6,730 | |
Company's pension plans with ABO in excess of plan assets, aggregate accumulated benefit obligation | 7,130 | 6,620 | |
Company's pension plans with ABO in excess of plan assets, aggregate fair value of plan assets | 6,560 | 5,790 | |
Defined benefit plans' accrued benefit costs related to certain unfunded and non-qualified plans | $ 139 | $ 137 | |
Postretirement benefits | |||
Defined benefit plan, assumed health care cost trend rates | |||
Weighted average health care cost trend rate | 6.80% | ||
Ultimate health care cost trend rate in 2038 and thereafter | 4.50% |
Benefit Plans - Components of n
Benefit Plans - Components of net periodic cost (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Components of net periodic cost | |||
Service cost | $ 108 | $ 125 | $ 117 |
Interest cost | 221 | 254 | 270 |
Expected return on plan assets | (414) | (403) | (427) |
Amortization of prior service credit | (64) | (59) | (77) |
Curtailment losses (gains) | 2 | 0 | 0 |
Costs and expenses | (147) | (83) | (117) |
Remeasurement of projected benefit obligation | 835 | 946 | (259) |
Remeasurement of plan assets | (886) | (832) | 727 |
Remeasurement (gains) losses | (51) | 114 | 468 |
Total net (benefit) cost | (198) | 31 | 351 |
Pension benefits | |||
Components of net periodic cost | |||
Service cost | 104 | 117 | 110 |
Interest cost | 210 | 240 | 255 |
Expected return on plan assets | (414) | (403) | (427) |
Amortization of prior service credit | (54) | (56) | (56) |
Curtailment losses (gains) | 10 | 0 | 0 |
Costs and expenses | (144) | (102) | (118) |
Remeasurement of projected benefit obligation | 813 | 927 | (255) |
Remeasurement of plan assets | (886) | (832) | 727 |
Remeasurement (gains) losses | (73) | 95 | 472 |
Total net (benefit) cost | (217) | (7) | 354 |
Postretirement benefits | |||
Components of net periodic cost | |||
Service cost | 4 | 8 | 7 |
Interest cost | 11 | 14 | 15 |
Expected return on plan assets | 0 | 0 | 0 |
Amortization of prior service credit | (10) | (3) | (21) |
Curtailment losses (gains) | (8) | 0 | 0 |
Costs and expenses | (3) | 19 | 1 |
Remeasurement of projected benefit obligation | 22 | 19 | (4) |
Remeasurement of plan assets | 0 | 0 | 0 |
Remeasurement (gains) losses | 22 | 19 | (4) |
Total net (benefit) cost | $ 19 | $ 38 | $ (3) |
Benefit Plans - Weighted averag
Benefit Plans - Weighted average assumptions used (Details) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Pension benefits | |||
Weighted average assumptions used to determine net pension cost and net postretirement benefit cost | |||
Discount rate | 3.00% | 3.70% | 4.06% |
Expected long-term rate of return on plan assets | 7.08% | 7.34% | 7.33% |
Weighted average assumptions used to determine benefit obligations | |||
Discount rate | 2.51% | 3.31% | |
Postretirement benefits | |||
Weighted average assumptions used to determine net pension cost and net postretirement benefit cost | |||
Discount rate | 2.99% | 3.61% | 3.95% |
Weighted average assumptions used to determine benefit obligations | |||
Discount rate | 2.39% | 3.27% |
Benefit Plans - Weighted aver_2
Benefit Plans - Weighted average target allocation and actual percentage (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Private equity funds | |||
Pension plans' weighted average target percentage of plan assets and the actual percentage of plan assets | |||
Actual percentage of plan assets | 0.00% | 1.00% | |
Mutual funds | |||
Pension plans' weighted average target percentage of plan assets and the actual percentage of plan assets | |||
Target asset allocation | 1.00% | 0.00% | |
Pension benefits | |||
Pension plans' weighted average target percentage of plan assets and the actual percentage of plan assets | |||
Actual percentage of plan assets | 100.00% | 100.00% | |
Fair value of plan assets | $ 6,987 | $ 6,192 | $ 5,299 |
Pension benefits | Equity securities | |||
Pension plans' weighted average target percentage of plan assets and the actual percentage of plan assets | |||
Actual percentage of plan assets | 50.00% | 50.00% | |
Pension benefits | Equity securities | Minimum | |||
Pension plans' weighted average target percentage of plan assets and the actual percentage of plan assets | |||
Target asset allocation | 43.00% | ||
Pension benefits | Equity securities | Maximum | |||
Pension plans' weighted average target percentage of plan assets and the actual percentage of plan assets | |||
Target asset allocation | 62.00% | ||
Pension benefits | Fixed income securities | |||
Pension plans' weighted average target percentage of plan assets and the actual percentage of plan assets | |||
Actual percentage of plan assets | 38.00% | 38.00% | |
Pension benefits | Fixed income securities | Minimum | |||
Pension plans' weighted average target percentage of plan assets and the actual percentage of plan assets | |||
Target asset allocation | 33.00% | ||
Pension benefits | Fixed income securities | Maximum | |||
Pension plans' weighted average target percentage of plan assets and the actual percentage of plan assets | |||
Target asset allocation | 45.00% | ||
Pension benefits | Limited partnership interests | |||
Pension plans' weighted average target percentage of plan assets and the actual percentage of plan assets | |||
Actual percentage of plan assets | 10.00% | 10.00% | |
Pension benefits | Limited partnership interests | Minimum | |||
Pension plans' weighted average target percentage of plan assets and the actual percentage of plan assets | |||
Target asset allocation | 0.00% | ||
Pension benefits | Limited partnership interests | Maximum | |||
Pension plans' weighted average target percentage of plan assets and the actual percentage of plan assets | |||
Target asset allocation | 15.00% | ||
Pension benefits | Short-term investments and other | |||
Pension plans' weighted average target percentage of plan assets and the actual percentage of plan assets | |||
Target asset allocation | 0.00% | ||
Actual percentage of plan assets | 2.00% | 2.00% | |
Pension benefits | Securities pledged as collateral | |||
Pension plans' weighted average target percentage of plan assets and the actual percentage of plan assets | |||
Fair value of plan assets | $ 101 | $ 258 |
Benefit Plans - Fair Value of p
Benefit Plans - Fair Value of pension plan assets (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Free Standing Derivative Liabilities | Quoted prices in active markets for identical assets (Level 1) | ||||
Components of net periodic cost | ||||
Total plan assets at fair value | $ (2) | |||
Free Standing Derivative Liabilities | Significant other observable inputs (Level 2) | ||||
Components of net periodic cost | ||||
Total plan assets at fair value | (17) | |||
Free Standing Derivative Liabilities | Significant unobservable inputs (Level 3) | ||||
Components of net periodic cost | ||||
Total plan assets at fair value | 0 | |||
Pension benefits | ||||
Components of net periodic cost | ||||
Total plan assets at fair value | $ 3,122 | $ 3,020 | ||
Total plan assets at fair value, allocation (as a percent) | 100.00% | 100.00% | ||
Investments measured using the net asset value practical expedient | $ 3,908 | $ 3,418 | ||
Securities lending obligation | (101) | (272) | ||
Derivatives counterparty and cash collateral netting | (19) | 9 | ||
Other net plan assets | 77 | 17 | ||
Fair value of plan assets | 6,987 | 6,192 | $ 5,299 | |
Pension benefits | Quoted prices in active markets for identical assets (Level 1) | ||||
Components of net periodic cost | ||||
Total plan assets at fair value | $ 469 | $ 579 | ||
Total plan assets at fair value, allocation (as a percent) | 15.00% | 19.20% | ||
Pension benefits | Significant other observable inputs (Level 2) | ||||
Components of net periodic cost | ||||
Total plan assets at fair value | $ 2,651 | $ 2,441 | ||
Total plan assets at fair value, allocation (as a percent) | 84.90% | 80.80% | ||
Pension benefits | Significant unobservable inputs (Level 3) | ||||
Components of net periodic cost | ||||
Total plan assets at fair value | $ 2 | $ 0 | ||
Total plan assets at fair value, allocation (as a percent) | 0.10% | 0.00% | ||
Fair value of plan assets | $ 2 | $ 0 | 5 | $ 39 |
Pension benefits | Equity securities | ||||
Components of net periodic cost | ||||
Total plan assets at fair value | 269 | 261 | ||
Pension benefits | Equity securities | Quoted prices in active markets for identical assets (Level 1) | ||||
Components of net periodic cost | ||||
Total plan assets at fair value | 227 | 216 | ||
Pension benefits | Equity securities | Significant other observable inputs (Level 2) | ||||
Components of net periodic cost | ||||
Total plan assets at fair value | 42 | 45 | ||
Pension benefits | Equity securities | Significant unobservable inputs (Level 3) | ||||
Components of net periodic cost | ||||
Total plan assets at fair value | 0 | 0 | ||
Fair value of plan assets | 0 | 29 | ||
Pension benefits | U.S. government and agencies | ||||
Components of net periodic cost | ||||
Total plan assets at fair value | 897 | 1,333 | ||
Pension benefits | U.S. government and agencies | Quoted prices in active markets for identical assets (Level 1) | ||||
Components of net periodic cost | ||||
Total plan assets at fair value | 32 | 237 | ||
Pension benefits | U.S. government and agencies | Significant other observable inputs (Level 2) | ||||
Components of net periodic cost | ||||
Total plan assets at fair value | 865 | 1,096 | ||
Pension benefits | U.S. government and agencies | Significant unobservable inputs (Level 3) | ||||
Components of net periodic cost | ||||
Total plan assets at fair value | 0 | 0 | ||
Pension benefits | Corporate | ||||
Components of net periodic cost | ||||
Total plan assets at fair value | 1,711 | 1,060 | ||
Pension benefits | Corporate | Quoted prices in active markets for identical assets (Level 1) | ||||
Components of net periodic cost | ||||
Total plan assets at fair value | 0 | 0 | ||
Pension benefits | Corporate | Significant other observable inputs (Level 2) | ||||
Components of net periodic cost | ||||
Total plan assets at fair value | 1,709 | 1,060 | ||
Pension benefits | Corporate | Significant unobservable inputs (Level 3) | ||||
Components of net periodic cost | ||||
Total plan assets at fair value | 2 | 0 | ||
Fair value of plan assets | 2 | 0 | $ 5 | $ 10 |
Pension benefits | Short-term investments | ||||
Components of net periodic cost | ||||
Total plan assets at fair value | 245 | 380 | ||
Pension benefits | Short-term investments | Quoted prices in active markets for identical assets (Level 1) | ||||
Components of net periodic cost | ||||
Total plan assets at fair value | 210 | 128 | ||
Pension benefits | Short-term investments | Significant other observable inputs (Level 2) | ||||
Components of net periodic cost | ||||
Total plan assets at fair value | 35 | 252 | ||
Pension benefits | Short-term investments | Significant unobservable inputs (Level 3) | ||||
Components of net periodic cost | ||||
Total plan assets at fair value | 0 | 0 | ||
Pension benefits | Free Standing Derivative Assets | ||||
Components of net periodic cost | ||||
Total plan assets at fair value | 21 | 5 | ||
Pension benefits | Free Standing Derivative Assets | Quoted prices in active markets for identical assets (Level 1) | ||||
Components of net periodic cost | ||||
Total plan assets at fair value | 0 | 0 | ||
Pension benefits | Free Standing Derivative Assets | Significant other observable inputs (Level 2) | ||||
Components of net periodic cost | ||||
Total plan assets at fair value | 21 | 5 | ||
Pension benefits | Free Standing Derivative Assets | Significant unobservable inputs (Level 3) | ||||
Components of net periodic cost | ||||
Total plan assets at fair value | 0 | 0 | ||
Pension benefits | Free Standing Derivative Liabilities | ||||
Components of net periodic cost | ||||
Total plan assets at fair value | (23) | $ (19) | ||
Pension benefits | Free Standing Derivative Liabilities | Quoted prices in active markets for identical assets (Level 1) | ||||
Components of net periodic cost | ||||
Total plan assets at fair value | (2) | |||
Pension benefits | Free Standing Derivative Liabilities | Significant other observable inputs (Level 2) | ||||
Components of net periodic cost | ||||
Total plan assets at fair value | (21) | |||
Pension benefits | Free Standing Derivative Liabilities | Significant unobservable inputs (Level 3) | ||||
Components of net periodic cost | ||||
Total plan assets at fair value | 0 | |||
Pension benefits | Free Standing Derivative Other Assets | ||||
Components of net periodic cost | ||||
Total plan assets at fair value | 2 | |||
Pension benefits | Free Standing Derivative Other Assets | Quoted prices in active markets for identical assets (Level 1) | ||||
Components of net periodic cost | ||||
Total plan assets at fair value | 2 | |||
Pension benefits | Free Standing Derivative Other Assets | Significant other observable inputs (Level 2) | ||||
Components of net periodic cost | ||||
Total plan assets at fair value | 0 | |||
Pension benefits | Free Standing Derivative Other Assets | Significant unobservable inputs (Level 3) | ||||
Components of net periodic cost | ||||
Total plan assets at fair value | $ 0 |
Benefit Plans - Rollforward of
Benefit Plans - Rollforward of level 3 plan assets (Details) - Pension benefits - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Change in plan assets | |||
Fair value of plan assets, beginning of year | $ 6,192 | $ 5,299 | |
Fair value of plan assets, end of year | 6,987 | 6,192 | $ 5,299 |
Significant unobservable inputs (Level 3) | |||
Change in plan assets | |||
Fair value of plan assets, beginning of year | 0 | 5 | 39 |
Actual return on plan assets: Relating to assets sold during the period | 0 | 0 | 0 |
Actual return on plan assets: Relating to assets still held at the reporting date | 0 | 0 | 3 |
Purchases, sales and settlements, net | 2 | (5) | (5) |
Net transfers in (out) of Level 3 | 0 | 0 | (32) |
Fair value of plan assets, end of year | 2 | 0 | 5 |
Significant unobservable inputs (Level 3) | Equity securities | |||
Change in plan assets | |||
Fair value of plan assets, beginning of year | 0 | 29 | |
Actual return on plan assets: Relating to assets sold during the period | 0 | ||
Actual return on plan assets: Relating to assets still held at the reporting date | 3 | ||
Purchases, sales and settlements, net | 0 | ||
Net transfers in (out) of Level 3 | (32) | ||
Fair value of plan assets, end of year | 0 | ||
Significant unobservable inputs (Level 3) | Corporate | |||
Change in plan assets | |||
Fair value of plan assets, beginning of year | 0 | 5 | 10 |
Actual return on plan assets: Relating to assets sold during the period | 0 | 0 | 0 |
Actual return on plan assets: Relating to assets still held at the reporting date | 0 | 0 | 0 |
Purchases, sales and settlements, net | 2 | (5) | (5) |
Net transfers in (out) of Level 3 | 0 | 0 | 0 |
Fair value of plan assets, end of year | $ 2 | $ 0 | $ 5 |
Benefit Plans - Pension plan as
Benefit Plans - Pension plan assets narrative (Details) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Pension plans' assets | |||
Expected weighted average long-term rate of return on primary employee plan assets for the next fiscal year | 10 years | ||
Expected weighted average long-term rate of return on employee-agent plan assets for the next fiscal year | 5 years | ||
Pension benefits | |||
Pension plans' assets | |||
Notional amount of derivatives, minimum percentage of plan assets | 115.00% | ||
Expected weighted average long-term rate of return on plan assets | 7.08% | 7.34% | 7.33% |
Expected weighted average long-term rate of return on plan assets for the next fiscal year | 7.06% | ||
Arithmetic average of the annual actual return on plan assets for the last 10 years | 11.10% | ||
Arithmetic average of the annual actual return on plan assets for the last 5 years | 14.40% |
Benefit Plans - Cash flows narr
Benefit Plans - Cash flows narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Pension benefits | ||
Components of net periodic cost | ||
Defined benefit pension plans, estimated employer contributions in next fiscal year | $ 24 | |
Employer contribution | 18 | $ 27 |
Postretirement benefits | ||
Components of net periodic cost | ||
Defined benefit pension plans, estimated employer contributions in next fiscal year | 0 | |
Employer contribution | 23 | 24 |
Participant contributions | 14 | $ 15 |
Other Pension Plan | ||
Components of net periodic cost | ||
Defined benefit pension plans, estimated employer contributions in next fiscal year | $ 4 |
Benefit Plans - Estimated futur
Benefit Plans - Estimated future benefit payments (Details) $ in Millions | Dec. 31, 2020USD ($) |
Pension benefits | |
Estimated future benefit payments | |
2021 | $ 710 |
2022 | 741 |
2023 | 733 |
2024 | 726 |
2025 | 694 |
2026-2030 | 2,320 |
Total benefit payments | 5,924 |
Postretirement benefits | |
Estimated future benefit payments | |
2021 | 25 |
2022 | 27 |
2023 | 27 |
2024 | 27 |
2025 | 26 |
2026-2030 | 98 |
Total benefit payments | $ 230 |
Benefit Plans - Allstate 401(k)
Benefit Plans - Allstate 401(k) savings plan (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Retirement Benefits [Abstract] | |||
Company's contribution to the Allstate Plan | $ 103 | $ 93 | $ 89 |
ESOP benefit | (41) | (2) | |
Principal balance of note from ESOP | 2 | ||
Defined contribution plan expense for eligible employees of Canadian insurance subsidiaries and Sterling | $ 13 | $ 15 | $ 15 |
Equity Incentive Plans - Equity
Equity Incentive Plans - Equity Awards (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Equity Incentive Plans [Abstract] | |||
Compensation expense | $ 124 | $ 105 | $ 125 |
Income tax benefits | 18 | 17 | 22 |
Cash received from exercise of options | 111 | 154 | 92 |
Tax benefit realized on options exercised and release of stock restrictions | $ 53 | $ 43 | $ 28 |
Equity Incentive Plans- Nonvest
Equity Incentive Plans- Nonvested awards (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Equity Incentive Plans | |
Unrecognized compensation | $ 82 |
Nonqualified stock options | |
Equity Incentive Plans | |
Unrecognized compensation | $ 21 |
Weighted average vesting period | 1 year 5 months 26 days |
Restricted stock units | |
Equity Incentive Plans | |
Unrecognized compensation | $ 33 |
Weighted average vesting period | 1 year 10 months 6 days |
Performance stock awards | |
Equity Incentive Plans | |
Unrecognized compensation | $ 28 |
Weighted average vesting period | 1 year 5 months 8 days |
Equity Incentive Plans - Narrat
Equity Incentive Plans - Narrative (Details) - shares shares in Millions | Feb. 17, 2014 | Dec. 31, 2020 |
Equity Incentive Plans | ||
Common stock authorized for stock-based awards (in shares) | 110.8 | |
Common stock reserved for further issuance (in shares) | 20.9 | |
Stock options | ||
Equity Incentive Plans | ||
Vesting period of options granted | 3 years | |
Portion of awards vesting and unrestricting on second anniversary of grant date (as a percent) | 50.00% | |
Portion of awards vesting and unrestricting on third and fourth anniversaries of grant date (as a percent) | 25.00% | |
Expiration term for options | 10 years |
Equity Incentive Plans - Option
Equity Incentive Plans - Option grant assumptions (Details) - Stock options | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Assumptions used to determine fair value of options granted | |||
Weighted average expected term | 6 years 1 month 6 days | 5 years 9 months 18 days | 5 years 8 months 12 days |
Expected volatility, low end of the range (as a percent) | 16.30% | 15.60% | 15.60% |
Expected volatility, high end of the range (as a percent) | 37.10% | 28.90% | 30.70% |
Weighted average volatility (as a percent) | 17.60% | 18.40% | 19.80% |
Expected dividends, minimum range (as a percent) | 1.60% | 1.90% | 1.50% |
Expected dividends, maximum range (as a percent) | 2.40% | 2.20% | 2.20% |
Weighted average expected dividends (as a percent) | 1.80% | 2.20% | 2.00% |
Risk-free rate, low end of the range (as a percent) | 0.10% | 1.30% | 1.30% |
Risk-free rate, high end of the range (as a percent) | 1.80% | 2.70% | 3.20% |
Equity Incentive Plans - Summar
Equity Incentive Plans - Summary of option activity (Details) - Stock options - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Stock option activity | |||
Outstanding at the beginning of the period (in shares) | 11,671 | ||
Granted (in shares) | 1,555 | ||
Exercised (in shares) | (2,201) | ||
Forfeited (in shares) | (394) | ||
Expired (in shares) | (14) | ||
Outstanding at the end of the period (in shares) | 10,617 | 11,671 | |
Outstanding, net of expected forfeitures (in shares) | 10,543 | ||
Outstanding, exercisable ("vested") (in shares) | 6,907 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | |||
Outstanding at the beginning of the period (in dollars per share) | $ 73.40 | ||
Granted (in dollars per share) | 123.43 | ||
Exercised (in dollars per share) | 53.75 | ||
Forfeited (in dollars per share) | 104.18 | ||
Expired (in dollars per share) | 81.21 | ||
Outstanding at the end of the period (in dollars per share) | 83.65 | $ 73.40 | |
Outstanding, net of expected forfeitures (in dollars per share) | 83.46 | ||
Outstanding, exercisable ("vested") (in dollars per share) | $ 72.51 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | |||
Aggregate intrinsic value, Outstanding | $ 298,537 | ||
Aggregate intrinsic value, net of expected forfeitures, outstanding | 297,990 | ||
Aggregate intrinsic value, exercisable ("vested"), outstanding | $ 258,510 | ||
Weighted average remaining contractual term, Outstanding | 6 years 1 month 6 days | ||
Weighted average remaining contractual term, net of expected forfeitures, outstanding | 6 years 1 month 6 days | ||
Weighted average remaining contractual term, exercisable ("vested"), outstanding | 5 years | ||
Weighted average grant date fair value of options granted (in dollars per share) | $ 18.17 | $ 14.96 | $ 17.03 |
Intrinsic value of options exercised | $ 119,000 | $ 114,000 | $ 72,000 |
Equity Incentive Plans - Change
Equity Incentive Plans - Changes in restricted stock units (Details) - Restricted stock units - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Stock units activity | |||
Outstanding at the beginning of the period (in shares) | 877 | ||
Granted (in shares) | 407 | ||
Vested (in shares) | (278) | ||
Forfeited (in shares) | (58) | ||
Outstanding at the end of the period (in shares) | 948 | 877 | |
Weighted average grant date fair value | |||
Weighted average grant date fair value, nonvested at the beginning of the period (in dollars per share) | $ 83.87 | ||
Weighted average grant date fair value, granted (in dollars per share) | 118.61 | $ 92.97 | $ 93.16 |
Weighted average grant date fair value, vested (in dollars per share) | 80.10 | ||
Weighted average grant date fair value, forfeited (in dollars per share) | 105.03 | ||
Weighted average grant date fair value, nonvested at the end of the period (in dollars per share) | $ 98.61 | $ 83.87 | |
Total fair value of restricted stock and restricted stock units vested | $ 32 | $ 29 | $ 47 |
Equity Incentive Plans - Chan_2
Equity Incentive Plans - Changes in performance stock awards (Details) - Performance stock awards - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Stock units activity | |||
Outstanding at the beginning of the period (in shares) | 1,181 | ||
Granted (in shares) | 282 | ||
Adjustment for performance achievement (in shares) | 408 | ||
Vested (in shares) | (816) | ||
Forfeited (in shares) | (104) | ||
Outstanding at the end of the period (in shares) | 951 | 1,181 | |
Weighted average grant date fair value | |||
Weighted average grant date fair value, nonvested at the beginning of the period (in dollars per share) | $ 87.78 | ||
Weighted average grant date fair value, granted (in dollars per share) | 123.48 | $ 92.49 | $ 92.88 |
Weighted average grant date fair value, adjustment for performance achievement (in dollars per share) | 78.49 | ||
Weighted average grant date fair value, vested (in dollars per share) | 78.49 | ||
Weighted average grant date fair value, forfeited (in dollars per share) | 101.10 | ||
Weighted average grant date fair value, nonvested at the end of the period (in dollars per share) | $ 100.89 | $ 87.78 | |
Risk-free rate, high end of the range (as a percent) | 1.40% | ||
Expected volatility rate (as a percent) | 16.90% | ||
Weighted average volatility (as a percent) | 35.10% | ||
Weighted average expected term | 2 years 10 months 24 days | ||
Total fair value of restricted stock and restricted stock units vested | $ 101 | $ 65 | $ 15 |
Supplemental Cash Flow Inform_3
Supplemental Cash Flow Information - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Supplementary Insurance Information | |||
Non-cash modifications of certain mortgage loans, fixed income securities, limited partnership interests and other investments, as well as mergers completed with equity securities | $ 61 | $ 198 | $ 94 |
Non-cash financing activities related to the issuance of shares for vested restricted stock units | 56 | 50 | $ 32 |
Operating lease, payments | 156 | 155 | |
Right-of-use asset obtained in exchange for operating lease liability | $ 51 | 604 | |
Accounting Standards Update 2016-02 | |||
Supplementary Insurance Information | |||
Right-of-use asset obtained in exchange for operating lease liability | $ 488 |
Supplemental Cash Flow Inform_4
Supplemental Cash Flow Information - Net change (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Net change in proceeds managed | |||
Net change in fixed income securities | $ 0 | $ 80 | $ 234 |
Net change in short-term investments | 592 | (451) | (568) |
Operating cash flow provided (used) | 592 | (371) | (334) |
Net change in cash | (12) | 0 | 0 |
Net change in proceeds managed | 580 | (371) | (334) |
Net change in liabilities | |||
Liabilities for collateral, beginning of year | (1,829) | (1,458) | (1,124) |
Liabilities for collateral, end of year | (1,249) | (1,829) | (1,458) |
Operating cash flow (used) provided | $ (580) | $ 371 | $ 334 |
Other Comprehensive Income (Det
Other Comprehensive Income (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Pre-tax | |||
Other comprehensive income (loss) | $ 1,720 | $ 2,322 | $ (1,094) |
Tax | |||
Other comprehensive income (loss) | (366) | (490) | 233 |
After-tax | |||
Other comprehensive income (loss) | 1,354 | 1,832 | (861) |
Unrealized net capital gains and losses | |||
Pre-tax | |||
Unrealized net holding gains and losses arising during the period, net of related offsets | 2,512 | 2,807 | (1,142) |
Less: reclassification adjustment of realized capital gains and losses | 870 | 413 | (186) |
Other comprehensive income (loss) | 1,642 | 2,394 | (956) |
Tax | |||
Unrealized net holding gains and losses arising during the period, net of related offsets | (532) | (592) | 241 |
Less: reclassification adjustment of realized capital gains and losses | (183) | (87) | 39 |
Other comprehensive income (loss) | (349) | (505) | 202 |
After-tax | |||
Unrealized net holding gains and losses arising during the period, net of related offsets | 1,980 | 2,215 | (901) |
Less: reclassification adjustment of realized capital gains and losses | 687 | 326 | (147) |
Other comprehensive income (loss) | 1,293 | 1,889 | (754) |
Unrealized foreign currency translation adjustments | |||
Pre-tax | |||
Other comprehensive income (loss) | 66 | (13) | (61) |
Tax | |||
Other comprehensive income (loss) | (14) | 3 | 13 |
After-tax | |||
Other comprehensive income (loss) | 52 | (10) | (48) |
Unamortized pension and other postretirement prior service credit | |||
Pre-tax | |||
Other comprehensive income (loss) | 12 | (59) | (77) |
Tax | |||
Other comprehensive income (loss) | (3) | 12 | 18 |
After-tax | |||
Other comprehensive income (loss) | $ 9 | $ (47) | $ (59) |
Quarterly Results (unaudited)_2
Quarterly Results (unaudited) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Revenues | $ 12,018 | $ 11,500 | $ 11,197 | $ 10,076 | $ 11,472 | $ 11,069 | $ 11,144 | $ 10,990 | $ 44,791 | $ 44,675 | $ 39,815 |
Net income (loss) applicable to common shareholders | $ 2,598 | $ 1,126 | $ 1,224 | $ 513 | $ 1,707 | $ 889 | $ 821 | $ 1,261 | $ 5,461 | $ 4,678 | $ 2,012 |
Earnings per common share - Basic (in dollars per share) | $ 8.54 | $ 3.62 | $ 3.90 | $ 1.62 | $ 5.32 | $ 2.71 | $ 2.47 | $ 3.79 | $ 17.53 | $ 14.25 | $ 5.78 |
Earnings per common share - Diluted (in dollars per share) | $ 8.45 | $ 3.58 | $ 3.86 | $ 1.59 | $ 5.23 | $ 2.67 | $ 2.44 | $ 3.74 | $ 17.31 | $ 14.03 | $ 5.70 |
Schedule I_- Summary of Inves_2
Schedule I - Summary of Investments Other than Investments in Related Parties (Details) $ in Millions | Dec. 31, 2020USD ($) |
Summary of Investments Other Than Investments in Related Parties | |
Cost/amortized cost, net | $ 88,477 |
Amount shown in the Balance Sheet | 94,237 |
United States government, government agencies and authorities | |
Summary of Investments Other Than Investments in Related Parties | |
Cost/amortized cost, net | 3,129 |
Fair value (if applicable) | 3,222 |
Amount shown in the Balance Sheet | 3,222 |
States, municipalities and political subdivisions | |
Summary of Investments Other Than Investments in Related Parties | |
Cost/amortized cost, net | 8,752 |
Fair value (if applicable) | 9,587 |
Amount shown in the Balance Sheet | 9,587 |
Foreign governments | |
Summary of Investments Other Than Investments in Related Parties | |
Cost/amortized cost, net | 1,013 |
Fair value (if applicable) | 1,055 |
Amount shown in the Balance Sheet | 1,055 |
Public utilities | |
Summary of Investments Other Than Investments in Related Parties | |
Cost/amortized cost, net | 5,948 |
Fair value (if applicable) | 6,564 |
Amount shown in the Balance Sheet | 6,564 |
All other corporate bonds | |
Summary of Investments Other Than Investments in Related Parties | |
Cost/amortized cost, net | 41,278 |
Fair value (if applicable) | 44,578 |
Amount shown in the Balance Sheet | 44,578 |
Asset-backed securities | |
Summary of Investments Other Than Investments in Related Parties | |
Cost/amortized cost, net | 1,260 |
Fair value (if applicable) | 1,270 |
Amount shown in the Balance Sheet | 1,270 |
Mortgage-backed securities | |
Summary of Investments Other Than Investments in Related Parties | |
Cost/amortized cost, net | 71 |
Fair value (if applicable) | 78 |
Amount shown in the Balance Sheet | 78 |
Total fixed maturities | |
Summary of Investments Other Than Investments in Related Parties | |
Cost/amortized cost, net | 61,451 |
Fair value (if applicable) | 66,354 |
Amount shown in the Balance Sheet | 66,354 |
Public utilities | |
Summary of Investments Other Than Investments in Related Parties | |
Cost/amortized cost, net | 34 |
Fair value (if applicable) | 46 |
Amount shown in the Balance Sheet | 46 |
Banks, trusts and insurance companies | |
Summary of Investments Other Than Investments in Related Parties | |
Cost/amortized cost, net | 174 |
Fair value (if applicable) | 255 |
Amount shown in the Balance Sheet | 255 |
Industrial, miscellaneous and all other | |
Summary of Investments Other Than Investments in Related Parties | |
Cost/amortized cost, net | 3,393 |
Fair value (if applicable) | 4,087 |
Amount shown in the Balance Sheet | 4,087 |
Nonredeemable preferred stocks | |
Summary of Investments Other Than Investments in Related Parties | |
Cost/amortized cost, net | 252 |
Fair value (if applicable) | 322 |
Amount shown in the Balance Sheet | 322 |
Total equity securities | |
Summary of Investments Other Than Investments in Related Parties | |
Cost/amortized cost, net | 3,853 |
Fair value (if applicable) | 4,710 |
Amount shown in the Balance Sheet | 4,710 |
Mortgage loans on real estate | |
Summary of Investments Other Than Investments in Related Parties | |
Cost/amortized cost, net | 4,075 |
Fair value (if applicable) | 4,348 |
Amount shown in the Balance Sheet | 4,075 |
Real estate (none acquired in satisfaction of debt) | |
Summary of Investments Other Than Investments in Related Parties | |
Cost/amortized cost, net | 974 |
Amount shown in the Balance Sheet | 974 |
Policy loans | |
Summary of Investments Other Than Investments in Related Parties | |
Cost/amortized cost, net | 754 |
Amount shown in the Balance Sheet | 754 |
Derivative instruments | |
Summary of Investments Other Than Investments in Related Parties | |
Cost/amortized cost, net | 204 |
Fair value (if applicable) | 204 |
Amount shown in the Balance Sheet | 204 |
Limited partnership interests | |
Summary of Investments Other Than Investments in Related Parties | |
Cost/amortized cost, net | 7,609 |
Amount shown in the Balance Sheet | 7,609 |
Other long-term investments | |
Summary of Investments Other Than Investments in Related Parties | |
Cost/amortized cost, net | 1,757 |
Amount shown in the Balance Sheet | 1,757 |
Short-term investments | |
Summary of Investments Other Than Investments in Related Parties | |
Cost/amortized cost, net | 7,800 |
Fair value (if applicable) | 7,800 |
Amount shown in the Balance Sheet | $ 7,800 |
Schedule II_- Condensed Finan_2
Schedule II - Condensed Financial Information of Registrant - Statement of Operations (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Revenues | |||||||||||
Investment income, less investment expense | $ 2,853 | $ 3,159 | $ 3,240 | ||||||||
Realized capital gains (losses) | $ 4 | 1,356 | 1,885 | (877) | |||||||
Total revenues | 12,018 | $ 11,500 | $ 11,197 | $ 10,076 | $ 11,472 | $ 11,069 | $ 11,144 | $ 10,990 | 44,791 | 44,675 | 39,815 |
Expenses | |||||||||||
Interest expense | 318 | 327 | 332 | ||||||||
Pension and other postretirement remeasurement (gains) losses | (51) | 114 | 468 | ||||||||
Other operating expenses | 5,732 | 5,690 | 5,594 | ||||||||
Total costs and expenses | 37,836 | 38,592 | 37,193 | ||||||||
Income tax expense (benefit) | 1,383 | 1,242 | 468 | ||||||||
Net income | 5,576 | 4,847 | 2,160 | ||||||||
Preferred stock dividends | 115 | 169 | 148 | ||||||||
Net income (loss) applicable to common shareholders | $ 2,598 | $ 1,126 | $ 1,224 | $ 513 | $ 1,707 | $ 889 | $ 821 | $ 1,261 | 5,461 | 4,678 | 2,012 |
Other comprehensive income (loss), after-tax | |||||||||||
Unrealized net capital gains and losses | 1,293 | 1,889 | (754) | ||||||||
Unrealized foreign currency translation adjustments | 52 | (10) | (48) | ||||||||
Unamortized pension and other postretirement prior service credit | 9 | (47) | (59) | ||||||||
Other comprehensive income (loss), after-tax | 1,354 | 1,832 | (861) | ||||||||
Comprehensive income | 6,930 | 6,679 | 1,299 | ||||||||
Allstate Corporation | |||||||||||
Revenues | |||||||||||
Investment income, less investment expense | 12 | 35 | 25 | ||||||||
Realized capital gains (losses) | 33 | 9 | (10) | ||||||||
Other income | 0 | 41 | 3 | ||||||||
Total revenues | 45 | 85 | 18 | ||||||||
Expenses | |||||||||||
Interest expense | 328 | 355 | 337 | ||||||||
Pension and other postretirement remeasurement (gains) losses | (73) | 103 | 454 | ||||||||
Pension and other postretirement benefit | (168) | (122) | (116) | ||||||||
Other operating expenses | 73 | 49 | 50 | ||||||||
Total costs and expenses | 160 | 385 | 725 | ||||||||
Loss from operations before income tax benefit and equity in net income of subsidiaries | (115) | (300) | (707) | ||||||||
Income tax expense (benefit) | (26) | (75) | (136) | ||||||||
Loss before equity in net income of subsidiaries | (89) | (225) | (571) | ||||||||
Equity in net income of subsidiaries | 5,665 | 5,072 | 2,731 | ||||||||
Net income | 5,576 | 4,847 | 2,160 | ||||||||
Preferred stock dividends | 115 | 169 | 148 | ||||||||
Net income (loss) applicable to common shareholders | 5,461 | 4,678 | 2,012 | ||||||||
Other comprehensive income (loss), after-tax | |||||||||||
Unrealized net capital gains and losses | 1,293 | 1,889 | (754) | ||||||||
Unrealized foreign currency translation adjustments | 52 | (10) | (48) | ||||||||
Unamortized pension and other postretirement prior service credit | 9 | (47) | (59) | ||||||||
Other comprehensive income (loss), after-tax | 1,354 | 1,832 | (861) | ||||||||
Comprehensive income | $ 6,930 | $ 6,679 | $ 1,299 |
Schedule II_- Condensed Finan_3
Schedule II - Condensed Financial Information of Registrant - Financial Position (Details) - USD ($) $ / shares in Units, $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Assets | ||||
Fixed income securities | $ 66,354 | $ 59,044 | ||
Short-term investments | 7,800 | 4,256 | ||
Cash | 377 | 338 | ||
Total assets | 125,987 | 119,950 | ||
Liabilities | ||||
Long-term debt | 7,825 | 6,631 | ||
Total liabilities | 95,770 | 93,952 | ||
Shareholders’ equity | ||||
Preferred stock and additional capital paid-in, $1 par value, 25 million shares authorized, 81.0 thousand and 92.5 thousand shares issued and outstanding, $2,025 and $2,313 aggregate liquidation preference | 1,970 | 2,248 | ||
Common stock, $.01 par value, 2.0 billion shares authorized and 900 million issued, 304 million and 319 million shares outstanding | 9 | 9 | ||
Additional capital paid-in | 3,498 | 3,463 | ||
Retained income | 52,767 | 48,074 | ||
Treasury Stock, Value | (31,331) | (29,746) | ||
Accumulated other comprehensive income: | ||||
Unrealized net capital gains and losses | 3,180 | 1,887 | ||
Unrealized foreign currency translation adjustments | (7) | (59) | ||
Unamortized pension and other postretirement prior service credit | 131 | 122 | ||
Total accumulated other comprehensive income | 3,304 | 1,950 | ||
Total shareholders’ equity | 30,217 | 25,998 | $ 21,312 | |
Total liabilities and shareholders’ equity | 125,987 | 119,950 | ||
Additional balance sheet disclosures: | ||||
Other short term Investments, amortized cost | $ 7,800 | $ 4,256 | ||
Preferred stock, par or stated value per share (in USD per share) | $ 1 | $ 1 | ||
Preferred stock, shares authorized (in shares) | 25,000,000 | 25,000,000 | ||
Preferred stock, shares issued (in shares) | 81,000 | 92,500 | ||
Preferred stock, shares outstanding (in shares) | 81,000 | 92,500 | ||
Preferred Stock, liquidation preference | $ 2,025 | $ 2,313 | ||
Common stock, par or stated value per share (in USD per share) | $ 0.01 | $ 0.01 | ||
Common stock, shares authorized (in shares) | 2,000,000,000 | 2,000,000,000 | ||
Common stock, shares, issued (in shares) | 900,000,000 | 900,000,000 | ||
Common stock, shares, outstanding (in shares) | 304,000,000 | 319,000,000 | ||
Treasury stock, shares (in shares) | 596,000,000 | 581,000,000 | ||
Allstate Corporation | ||||
Assets | ||||
Investments in subsidiaries | $ 35,603 | $ 33,428 | ||
Fixed income securities | 0 | 466 | ||
Short-term investments | 4,479 | 702 | ||
Cash | 0 | 2 | $ 0 | $ 0 |
Receivable from subsidiaries | 524 | 448 | ||
Deferred income taxes | 187 | 230 | ||
Other assets | 87 | 86 | ||
Total assets | 40,880 | 35,362 | ||
Liabilities | ||||
Long-term debt | 7,825 | 6,631 | ||
Pension and other postretirement benefit obligations | 874 | 1,081 | ||
Deferred compensation | 351 | 327 | ||
Payable to subsidiaries | 0 | 14 | ||
Notes due to subsidiaries | 1,250 | 1,000 | ||
Dividends payable to shareholders | 201 | 199 | ||
Other liabilities | 162 | 112 | ||
Total liabilities | 10,663 | 9,364 | ||
Shareholders’ equity | ||||
Preferred stock and additional capital paid-in, $1 par value, 25 million shares authorized, 81.0 thousand and 92.5 thousand shares issued and outstanding, $2,025 and $2,313 aggregate liquidation preference | 1,970 | 2,248 | ||
Common stock, $.01 par value, 2.0 billion shares authorized and 900 million issued, 304 million and 319 million shares outstanding | 9 | 9 | ||
Additional capital paid-in | 3,498 | 3,463 | ||
Retained income | 52,767 | 48,074 | ||
Treasury Stock, Value | (31,331) | (29,746) | ||
Accumulated other comprehensive income: | ||||
Unrealized net capital gains and losses | 3,180 | 1,887 | ||
Unrealized foreign currency translation adjustments | (7) | (59) | ||
Unamortized pension and other postretirement prior service credit | 131 | 122 | ||
Total accumulated other comprehensive income | 3,304 | 1,950 | ||
Total shareholders’ equity | 30,217 | 25,998 | ||
Total liabilities and shareholders’ equity | 40,880 | 35,362 | ||
Additional balance sheet disclosures: | ||||
AFSs, debt securities, amortized cost | 0 | 458 | ||
Other short term Investments, amortized cost | $ 4,479 | $ 702 | ||
Preferred stock, par or stated value per share (in USD per share) | $ 1 | $ 1 | ||
Preferred stock, shares authorized (in shares) | 25,000,000 | 25,000,000 | ||
Preferred stock, shares issued (in shares) | 81,000 | 92,500 | ||
Preferred stock, shares outstanding (in shares) | 81,000 | 92,500 | ||
Preferred Stock, liquidation preference | $ 2,025 | $ 2,313 | ||
Common stock, par or stated value per share (in USD per share) | $ 0.01 | $ 0.01 | ||
Common stock, shares authorized (in shares) | 2,000,000,000 | 2,000,000,000 | ||
Common stock, shares, issued (in shares) | 900,000,000 | 900,000,000 | ||
Common stock, shares, outstanding (in shares) | 304,000,000 | 319,000,000 | ||
Treasury stock, shares (in shares) | 596,000,000 | 581,000,000 |
Schedule II_- Condensed Finan_4
Schedule II - Condensed Financial Information of Registrant - Cash Flows (Details) - USD ($) $ in Millions | Jan. 15, 2020 | Dec. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Cash flows from operating activities | |||||
Net income | $ 5,576 | $ 4,847 | $ 2,160 | ||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||
Realized capital gains (losses) | $ (4) | (1,356) | (1,885) | 877 | |
Pension and other postretirement remeasurement (gains) losses | 51 | (114) | (468) | ||
Changes in: | |||||
Net cash provided by operating activities | 5,491 | 5,129 | 5,175 | ||
Cash flows from investing activities | |||||
Change in short-term and other investments, net | (3,871) | (725) | (603) | ||
Net cash used in investing activities | (3,441) | (2,807) | (1,719) | ||
Cash flows from financing activities | |||||
Proceeds from issuance of long-term debt | 1,189 | 491 | 498 | ||
Redemption of preferred stock | $ (288) | ||||
Redemption and repayment of long-term debt | 0 | (317) | (400) | ||
Proceeds from issuance of preferred stock | 0 | 1,414 | 557 | ||
Dividends paid on common stock | (668) | (653) | (614) | ||
Dividends paid on preferred stock | (108) | (134) | (134) | ||
Treasury stock purchases | (1,737) | (1,735) | (2,303) | ||
Shares reissued under equity incentive plans, net | 63 | 120 | 73 | ||
Other | 41 | 129 | 91 | ||
Net cash used in financing activities | (2,011) | (2,483) | (3,574) | ||
Cash at beginning of year | 338 | ||||
Cash at end of year | 377 | 377 | 338 | ||
Allstate Corporation | |||||
Cash flows from operating activities | |||||
Net income | 5,576 | 4,847 | 2,160 | ||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||
Equity in net income of subsidiaries | (5,665) | (5,072) | (2,731) | ||
Dividends received from subsidiaries | 4,157 | 2,434 | 2,059 | ||
Realized capital gains (losses) | (33) | (9) | 10 | ||
Pension and other postretirement remeasurement (gains) losses | (73) | 103 | 454 | ||
Changes in: | |||||
Pension and other postretirement benefits | (168) | (122) | (116) | ||
Income taxes | 54 | 13 | (28) | ||
Operating assets and liabilities | 110 | 111 | 160 | ||
Net cash provided by operating activities | 3,958 | 2,305 | 1,968 | ||
Cash flows from investing activities | |||||
Proceeds from sales of investments | 1,251 | 1,094 | 1,370 | ||
Proceeds from sales of investments to subsidiaries | 0 | 0 | 390 | ||
Investment purchases | (402) | (892) | (1,037) | ||
Investment collections | 16 | 65 | 108 | ||
Capital contribution or return of capital from subsidiaries | 251 | 43 | (975) | ||
Change in short-term and other investments, net | (3,777) | (417) | (115) | ||
Net cash used in investing activities | (2,661) | (107) | (259) | ||
Cash flows from financing activities | |||||
Proceeds from borrowings from subsidiaries | 1,250 | 1,000 | 1,250 | ||
Repayment of notes due to subsidiaries | (1,000) | (1,250) | (250) | ||
Proceeds from issuance of long-term debt | 1,189 | 491 | 498 | ||
Redemption of preferred stock | (288) | (1,132) | (385) | ||
Redemption and repayment of long-term debt | 0 | (317) | (400) | ||
Proceeds from issuance of preferred stock | 0 | 1,414 | 557 | ||
Dividends paid on common stock | (668) | (653) | (614) | ||
Dividends paid on preferred stock | (108) | (134) | (134) | ||
Treasury stock purchases | (1,737) | (1,735) | (2,303) | ||
Shares reissued under equity incentive plans, net | 63 | 120 | 73 | ||
Other | 0 | 0 | (1) | ||
Net cash used in financing activities | (1,299) | (2,196) | (1,709) | ||
Net (decrease) increase in cash | (2) | 2 | 0 | ||
Cash at beginning of year | 2 | 0 | 0 | ||
Cash at end of year | $ 0 | $ 0 | $ 2 | $ 0 |
Schedule II_- Condensed Finan_5
Schedule II - Condensed Financial Information of Registrant - Narrative (Details) - USD ($) $ in Millions | Jun. 18, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 29, 2020 | Jun. 19, 2019 |
Condensed Financial Information of Registrant | ||||||
Interest paid on debt | $ 311 | $ 312 | $ 330 | |||
Allstate Corporation | ||||||
Condensed Financial Information of Registrant | ||||||
Notes due to subsidiaries | 1,250 | 1,000 | ||||
Repayment of notes due to subsidiaries | 1,000 | 1,250 | 250 | |||
Interest paid on debt | $ 311 | $ 312 | $ 330 | |||
Kennett Capital Inc | Subsidiaries | Allstate Corporation | ||||||
Condensed Financial Information of Registrant | ||||||
Notes due to subsidiaries | $ 1,000 | $ 250 | $ 1,000 | |||
Note stated interest rate (as a percent) | 0.43% | 0.33% | 2.63% | |||
Repayment of notes due to subsidiaries | $ 1,000 |
Schedule III_- Supplementary _2
Schedule III - Supplementary Insurance Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Supplementary Insurance Information | |||
Deferred policy acquisition costs | $ 4,700 | $ 4,699 | $ 4,784 |
Reserves for claims and claims expense, contract benefits and contractholder funds | 57,591 | 57,704 | 58,002 |
Unearned premiums | 15,949 | 15,343 | 14,510 |
Premium revenue and contract charges | 39,517 | 38,577 | 36,513 |
Net investment income | 2,853 | 3,159 | 3,240 |
Claims and claims expense, contract benefits and interest credited to contractholders | 24,882 | 26,655 | 25,405 |
Amortization of deferred policy acquisition costs | 5,630 | 5,533 | 5,222 |
Other operating costs and expenses | 7,324 | 6,404 | 6,566 |
Premiums written (excluding life) | 38,584 | 37,942 | 35,966 |
Intersegment Eliminations | |||
Supplementary Insurance Information | |||
Deferred policy acquisition costs | 0 | 0 | 0 |
Reserves for claims and claims expense, contract benefits and contractholder funds | 0 | 0 | 0 |
Unearned premiums | 0 | 0 | 0 |
Premium revenue and contract charges | (147) | (154) | (122) |
Net investment income | 0 | 0 | 0 |
Claims and claims expense, contract benefits and interest credited to contractholders | (11) | (9) | (7) |
Amortization of deferred policy acquisition costs | 0 | 0 | 0 |
Other operating costs and expenses | (136) | (145) | (115) |
Premiums written (excluding life) | 0 | 0 | 0 |
Allstate Protection | Other revenue | |||
Supplementary Insurance Information | |||
Deferred policy acquisition costs | 1,608 | 1,624 | 1,618 |
Reserves for claims and claims expense, contract benefits and contractholder funds | 25,679 | 25,843 | 25,495 |
Unearned premiums | 12,772 | 12,567 | 11,953 |
Premium revenue and contract charges | 35,580 | 34,843 | 32,950 |
Claims and claims expense, contract benefits and interest credited to contractholders | 21,485 | 23,517 | 22,348 |
Amortization of deferred policy acquisition costs | 4,642 | 4,649 | 4,475 |
Other operating costs and expenses | 5,623 | 4,506 | 4,522 |
Premiums written (excluding life) | 35,768 | 35,419 | 33,555 |
Discontinued Lines and Coverages | Other revenue | |||
Supplementary Insurance Information | |||
Deferred policy acquisition costs | 0 | 0 | 0 |
Reserves for claims and claims expense, contract benefits and contractholder funds | 1,888 | 1,818 | 1,864 |
Unearned premiums | 0 | 0 | 0 |
Premium revenue and contract charges | 0 | 0 | 0 |
Claims and claims expense, contract benefits and interest credited to contractholders | 141 | 105 | 87 |
Amortization of deferred policy acquisition costs | 0 | 0 | 0 |
Other operating costs and expenses | 3 | 3 | 3 |
Premiums written (excluding life) | 0 | 0 | 0 |
Property and casualty | Other revenue | |||
Supplementary Insurance Information | |||
Deferred policy acquisition costs | 1,608 | 1,624 | 1,618 |
Reserves for claims and claims expense, contract benefits and contractholder funds | 27,567 | 27,661 | 27,359 |
Unearned premiums | 12,772 | 12,567 | 11,953 |
Premium revenue and contract charges | 35,580 | 34,843 | 32,950 |
Net investment income | 1,421 | 1,533 | 1,464 |
Claims and claims expense, contract benefits and interest credited to contractholders | 21,626 | 23,622 | 22,435 |
Amortization of deferred policy acquisition costs | 4,642 | 4,649 | 4,475 |
Other operating costs and expenses | 5,626 | 4,509 | 4,525 |
Premiums written (excluding life) | 35,768 | 35,419 | 33,555 |
Protection Services | Other revenue | |||
Supplementary Insurance Information | |||
Deferred policy acquisition costs | 1,696 | 1,449 | 1,290 |
Reserves for claims and claims expense, contract benefits and contractholder funds | 43 | 51 | 64 |
Unearned premiums | 3,167 | 2,765 | 2,546 |
Premium revenue and contract charges | 1,640 | 1,387 | 1,220 |
Net investment income | 44 | 42 | 27 |
Claims and claims expense, contract benefits and interest credited to contractholders | 386 | 363 | 350 |
Amortization of deferred policy acquisition costs | 658 | 543 | 463 |
Other operating costs and expenses | 760 | 838 | 603 |
Premiums written (excluding life) | 1,890 | 1,535 | 1,431 |
Allstate Life | Other revenue | |||
Supplementary Insurance Information | |||
Deferred policy acquisition costs | 909 | 1,079 | 1,300 |
Reserves for claims and claims expense, contract benefits and contractholder funds | 10,768 | 10,541 | 10,333 |
Unearned premiums | 3 | 3 | 3 |
Premium revenue and contract charges | 1,340 | 1,343 | 1,315 |
Net investment income | 502 | 514 | 505 |
Claims and claims expense, contract benefits and interest credited to contractholders | 1,293 | 1,154 | 1,094 |
Amortization of deferred policy acquisition costs | 149 | 173 | 132 |
Other operating costs and expenses | 335 | 356 | 364 |
Premiums written (excluding life) | 0 | 0 | 0 |
Allstate Benefits | Other revenue | |||
Supplementary Insurance Information | |||
Deferred policy acquisition costs | 470 | 527 | 549 |
Reserves for claims and claims expense, contract benefits and contractholder funds | 1,885 | 1,950 | 1,905 |
Unearned premiums | 7 | 8 | 8 |
Premium revenue and contract charges | 1,094 | 1,145 | 1,135 |
Net investment income | 78 | 83 | 77 |
Claims and claims expense, contract benefits and interest credited to contractholders | 549 | 635 | 630 |
Amortization of deferred policy acquisition costs | 177 | 161 | 145 |
Other operating costs and expenses | 323 | 285 | 278 |
Premiums written (excluding life) | 926 | 988 | 980 |
Allstate Annuities | Other revenue | |||
Supplementary Insurance Information | |||
Deferred policy acquisition costs | 17 | 20 | 27 |
Reserves for claims and claims expense, contract benefits and contractholder funds | 17,328 | 17,501 | 18,341 |
Unearned premiums | 0 | 0 | 0 |
Premium revenue and contract charges | 10 | 13 | 15 |
Net investment income | 761 | 917 | 1,096 |
Claims and claims expense, contract benefits and interest credited to contractholders | 1,039 | 890 | 903 |
Amortization of deferred policy acquisition costs | 4 | 7 | 7 |
Other operating costs and expenses | 27 | 30 | 31 |
Premiums written (excluding life) | 0 | 0 | 0 |
Corporate and Other | Other revenue | |||
Supplementary Insurance Information | |||
Deferred policy acquisition costs | 0 | 0 | 0 |
Reserves for claims and claims expense, contract benefits and contractholder funds | 0 | 0 | 0 |
Unearned premiums | 0 | 0 | 0 |
Premium revenue and contract charges | 0 | 0 | 0 |
Net investment income | 47 | 70 | 71 |
Claims and claims expense, contract benefits and interest credited to contractholders | 0 | 0 | 0 |
Amortization of deferred policy acquisition costs | 0 | 0 | 0 |
Other operating costs and expenses | 389 | 531 | 880 |
Premiums written (excluding life) | $ 0 | $ 0 | $ 0 |
Schedule IV_- Reinsurance (Deta
Schedule IV - Reinsurance (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Life insurance in force | |||
Gross amount | $ 208,417,000,000 | $ 219,785,000,000 | $ 207,434,000,000 |
Ceded to other companies | 67,319,000,000 | 74,021,000,000 | 81,186,000,000 |
Assumed from other companies | 217,020,000,000 | 229,419,000,000 | 243,161,000,000 |
Net amount | $ 358,118,000,000 | $ 375,183,000,000 | $ 369,409,000,000 |
Percentage of amount assumed to net | 60.60% | 61.10% | 65.80% |
Premiums and contract charges: | |||
Property and casualty insurance | $ 40,116,000,000 | $ 39,178,000,000 | $ 36,978,000,000 |
Ceded to other companies | 1,383,000,000 | 1,407,000,000 | 1,306,000,000 |
Assumed from other companies | 784,000,000 | 806,000,000 | 841,000,000 |
Net amount | $ 39,517,000,000 | $ 38,577,000,000 | $ 36,513,000,000 |
Percentage of amount assumed to net | 2.00% | 2.10% | 2.30% |
Reinsurance or coinsurance income netted against premium ceded | $ 0 | $ 0 | $ 0 |
Life insurance | |||
Premiums and contract charges: | |||
Property and casualty insurance | 1,053,000,000 | 1,062,000,000 | 994,000,000 |
Ceded to other companies | 222,000,000 | 262,000,000 | 266,000,000 |
Assumed from other companies | 685,000,000 | 712,000,000 | 754,000,000 |
Net amount | $ 1,516,000,000 | $ 1,512,000,000 | $ 1,482,000,000 |
Percentage of amount assumed to net | 45.20% | 47.10% | 50.90% |
Accident and health insurance | |||
Premiums and contract charges: | |||
Property and casualty insurance | $ 948,000,000 | $ 1,012,000,000 | $ 1,007,000,000 |
Ceded to other companies | 20,000,000 | 23,000,000 | 24,000,000 |
Assumed from other companies | 0 | 0 | 0 |
Net amount | $ 928,000,000 | $ 989,000,000 | $ 983,000,000 |
Percentage of amount assumed to net | 0.00% | 0.00% | 0.00% |
Property and casualty insurance | |||
Premiums and contract charges: | |||
Property and casualty insurance | $ 38,115,000,000 | $ 37,104,000,000 | $ 34,977,000,000 |
Ceded to other companies | 1,141,000,000 | 1,122,000,000 | 1,016,000,000 |
Assumed from other companies | 99,000,000 | 94,000,000 | 87,000,000 |
Net amount | $ 37,073,000,000 | $ 36,076,000,000 | $ 34,048,000,000 |
Percentage of amount assumed to net | 0.30% | 0.30% | 0.30% |
Schedule V_- Valuation Allowa_2
Schedule V - Valuation Allowances and Qualifying Accounts (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Valuation allowances and qualifying accounts | |||
Additions, Charged to costs and expenses | $ 300 | ||
Additions, Other additions | 0 | ||
Deductions | 196 | ||
Balance as of end of period | 393 | ||
Cumulative Effect, Period of Adoption, Adjusted Balance | |||
Valuation allowances and qualifying accounts | |||
Balance as of beginning of period | 289 | ||
Balance as of end of period | $ 289 | ||
Fixed income securities | |||
Valuation allowances and qualifying accounts | |||
Additions, Charged to costs and expenses | 5 | ||
Additions, Other additions | 0 | ||
Deductions | 2 | ||
Balance as of end of period | 3 | ||
Fixed income securities | Cumulative Effect, Period of Adoption, Adjusted Balance | |||
Valuation allowances and qualifying accounts | |||
Balance as of beginning of period | 0 | ||
Balance as of end of period | 0 | ||
Mortgage loans | |||
Valuation allowances and qualifying accounts | |||
Balance as of beginning of period | 3 | 3 | $ 3 |
Additions, Charged to costs and expenses | 39 | 0 | 0 |
Additions, Other additions | 0 | 0 | 0 |
Deductions | 17 | 0 | 0 |
Balance as of end of period | 67 | 3 | 3 |
Mortgage loans | Cumulative Effect, Period of Adoption, Adjusted Balance | |||
Valuation allowances and qualifying accounts | |||
Balance as of beginning of period | 45 | ||
Balance as of end of period | 45 | ||
Bank loans | |||
Valuation allowances and qualifying accounts | |||
Additions, Charged to costs and expenses | 28 | ||
Additions, Other additions | 0 | ||
Deductions | 14 | ||
Balance as of end of period | 67 | ||
Bank loans | Cumulative Effect, Period of Adoption, Adjusted Balance | |||
Valuation allowances and qualifying accounts | |||
Balance as of beginning of period | 53 | ||
Balance as of end of period | 53 | ||
Agent loans | |||
Valuation allowances and qualifying accounts | |||
Balance as of beginning of period | 3 | 2 | 2 |
Additions, Charged to costs and expenses | 0 | 1 | 0 |
Additions, Other additions | 0 | 0 | 0 |
Deductions | 0 | 0 | 0 |
Balance as of end of period | 5 | 3 | 2 |
Agent loans | Cumulative Effect, Period of Adoption, Adjusted Balance | |||
Valuation allowances and qualifying accounts | |||
Balance as of beginning of period | 5 | ||
Balance as of end of period | 5 | ||
Investments | |||
Valuation allowances and qualifying accounts | |||
Additions, Charged to costs and expenses | 72 | ||
Additions, Other additions | 0 | ||
Deductions | 33 | ||
Balance as of end of period | 142 | ||
Investments | Cumulative Effect, Period of Adoption, Adjusted Balance | |||
Valuation allowances and qualifying accounts | |||
Balance as of beginning of period | 103 | ||
Balance as of end of period | 103 | ||
Premium installment receivable | |||
Valuation allowances and qualifying accounts | |||
Balance as of beginning of period | 90 | 77 | 77 |
Additions, Charged to costs and expenses | 223 | 137 | 118 |
Additions, Other additions | 0 | 0 | 0 |
Deductions | 161 | 124 | 118 |
Balance as of end of period | 153 | 90 | 77 |
Premium installment receivable | Cumulative Effect, Period of Adoption, Adjusted Balance | |||
Valuation allowances and qualifying accounts | |||
Balance as of beginning of period | 91 | ||
Balance as of end of period | 91 | ||
Reinsurance recoverables | |||
Valuation allowances and qualifying accounts | |||
Balance as of beginning of period | 63 | 65 | 70 |
Additions, Charged to costs and expenses | 0 | (2) | (5) |
Additions, Other additions | 0 | 0 | 0 |
Deductions | 0 | 0 | 0 |
Balance as of end of period | 74 | 63 | 65 |
Reinsurance recoverables | Cumulative Effect, Period of Adoption, Adjusted Balance | |||
Valuation allowances and qualifying accounts | |||
Balance as of beginning of period | 74 | ||
Balance as of end of period | 74 | ||
Other assets | |||
Valuation allowances and qualifying accounts | |||
Additions, Charged to costs and expenses | 5 | ||
Additions, Other additions | 0 | ||
Deductions | 0 | ||
Balance as of end of period | 23 | ||
Other assets | Cumulative Effect, Period of Adoption, Adjusted Balance | |||
Valuation allowances and qualifying accounts | |||
Balance as of beginning of period | 18 | ||
Balance as of end of period | 18 | ||
Assets | |||
Valuation allowances and qualifying accounts | |||
Additions, Charged to costs and expenses | 300 | ||
Additions, Other additions | 0 | ||
Deductions | 194 | ||
Balance as of end of period | 392 | ||
Assets | Cumulative Effect, Period of Adoption, Adjusted Balance | |||
Valuation allowances and qualifying accounts | |||
Balance as of beginning of period | 286 | ||
Balance as of end of period | 286 | ||
Commitments to fund mortgage loans, bank loans and agent loans | |||
Valuation allowances and qualifying accounts | |||
Additions, Charged to costs and expenses | 0 | ||
Additions, Other additions | 0 | ||
Deductions | 2 | ||
Balance as of end of period | 1 | ||
Commitments to fund mortgage loans, bank loans and agent loans | Cumulative Effect, Period of Adoption, Adjusted Balance | |||
Valuation allowances and qualifying accounts | |||
Balance as of beginning of period | 3 | ||
Balance as of end of period | 3 | ||
Liabilities | |||
Valuation allowances and qualifying accounts | |||
Additions, Charged to costs and expenses | 0 | ||
Additions, Other additions | 0 | ||
Deductions | 2 | ||
Balance as of end of period | 1 | ||
Liabilities | Cumulative Effect, Period of Adoption, Adjusted Balance | |||
Valuation allowances and qualifying accounts | |||
Balance as of beginning of period | 3 | ||
Balance as of end of period | 3 | ||
Deferred tax assets | |||
Valuation allowances and qualifying accounts | |||
Balance as of beginning of period | $ 0 | 0 | 0 |
Additions, Charged to costs and expenses | 0 | 0 | |
Additions, Other additions | 0 | 0 | |
Deductions | 0 | 0 | |
Balance as of end of period | $ 0 | $ 0 |