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Reportable Segments | 9 Months Ended
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Sep. 30, 2019
Segment Reporting [Abstract] |
Reportable Segments |
Note 4 | Reportable Segments
Change in accounting principle As discussed in Note 1, the Company changed its accounting principle for recognizing actuarial gains and losses and expected return on plan assets for its pension and other postretirement plans to a more preferable policy under U.S. GAAP. Under the new principle, remeasurement of projected benefit obligation and plan assets are immediately recognized through earnings and are referred to as pension and other postretirement remeasurement gains and losses on the Condensed Consolidated Statements of Operations. This change has been applied on a retrospective basis. See Note 1 for further information regarding the impact of the change in accounting principle on the condensed consolidated financial statements. 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 Service Businesses, 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”), amortization of DAC, operating costs and expenses, amortization 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 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 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 |  |  |  |
($ in millions) |  | Three months ended September 30, |  | Nine months ended September 30,
| 2019 |  | 2018 |  | 2019 |  | 2018
Property-Liability |  |  |  |  |  |  |  |  |  |  |  |
Insurance premiums |  |  |  |  |  |  |  |  |  |  |  |
Auto |  | $ | 6,080 |  |  | $ | 5,798 |  |  | $ | 18,045 |  |  | $ | 17,094 |
Homeowners |  | 1,997 |  |  | 1,891 |  |  | 5,890 |  |  | 5,603 |
Other personal lines |  | 469 |  |  | 455 |  |  | 1,390 |  |  | 1,354 |
Commercial lines |  | 236 |  |  | 176 |  |  | 645 |  |  | 477 |
Allstate Protection |  | 8,782 |  |  | 8,320 |  |  | 25,970 |  |  | 24,528 |
Discontinued Lines and Coverages |  | — |  |  | — |  |  | — |  |  | — |
Total Property-Liability insurance premiums |  | 8,782 |  |  | 8,320 |  |  | 25,970 |  |  | 24,528 |
Other revenue |  | 195 |  |  | 192 |  |  | 561 |  |  | 550 |
Net investment income |  | 448 |  |  | 410 |  |  | 1,210 |  |  | 1,100 |
Realized capital gains and losses |  | 163 |  |  | 126 |  |  | 916 |  |  | 16 |
Total Property-Liability |  | 9,588 |  |  | 9,048 |  |  | 28,657 |  |  | 26,194 |
Service Businesses |  |  |  |  |  |  |  |  |  |
Consumer product protection plans |  | 163 |  |  | 125 |  |  | 461 |  |  | 369 |
Roadside assistance |  | 57 |  |  | 66 |  |  | 183 |  |  | 198 |
Finance and insurance products |  | 92 |  |  | 84 |  |  | 268 |  |  | 246 |
Intersegment premiums and service fees (1) |  | 44 |  |  | 31 |  |  | 110 |  |  | 89 |
Other revenue |  | 47 |  |  | 16 |  |  | 142 |  |  | 48 |
Net investment income |  | 11 |  |  | 7 |  |  | 30 |  |  | 18 |
Realized capital gains and losses |  | 4 |  |  | — |  |  | 21 |  |  | (6 | )
Total Service Businesses |  | 418 |  |  | 329 |  |  | 1,215 |  |  | 962 |
Allstate Life |  |  |  |  |  |  |  |
Traditional life insurance premiums |  | 155 |  |  | 149 |  |  | 465 |  |  | 443 |
Accident and health insurance premiums |  | — |  |  | — |  |  | 1 |  |  | 1 |
Interest-sensitive life insurance contract charges |  | 176 |  |  | 173 |  |  | 535 |  |  | 531 |
Other revenue |  | 31 |  |  | 30 |  |  | 91 |  |  | 84 |
Net investment income |  | 128 |  |  | 128 |  |  | 380 |  |  | 380 |
Realized capital gains and losses |  | 5 |  |  | (3 | ) |  | 1 |  |  | (9 | )
Total Allstate Life |  | 495 |  |  | 477 |  |  | 1,473 |  |  | 1,430 |
Allstate Benefits |  |  |  |  |  |  |  |
Traditional life insurance premiums |  | 12 |  |  | 13 |  |  | 31 |  |  | 32 |
Accident and health insurance premiums |  | 250 |  |  | 246 |  |  | 746 |  |  | 739 |
Interest-sensitive life insurance contract charges |  | 29 |  |  | 26 |  |  | 86 |  |  | 83 |
Net investment income |  | 21 |  |  | 19 |  |  | 61 |  |  | 57 |
Realized capital gains and losses |  | 2 |  |  | 2 |  |  | 8 |  |  | — |
Total Allstate Benefits |  | 314 |  |  | 306 |  |  | 932 |  |  | 911 |
Allstate Annuities |  |  |  |  |  |  |  |
Fixed annuities contract charges |  | 3 |  |  | 5 |  |  | 10 |  |  | 11 |
Net investment income |  | 251 |  |  | 260 |  |  | 737 |  |  | 843 |
Realized capital gains and losses |  | 20 |  |  | 51 |  |  | 224 |  |  | 28 |
Total Allstate Annuities |  | 274 |  |  | 316 |  |  | 971 |  |  | 882 |
Corporate and Other |  |  |  |  |  |  |  |  |  |  |  |
Net investment income |  | 21 |  |  | 20 |  |  | 52 |  |  | 56 |
Realized capital gains and losses |  | 3 |  |  | — |  |  | 13 |  |  | (12 | )
Total Corporate and Other |  | 24 |  |  | 20 |  |  | 65 |  |  | 44 |
Intersegment eliminations (1) |  | (44 | ) |  | (31 | ) |  | (110 | ) |  | (89 | )
Consolidated revenues |  | $ | 11,069 |  |  | $ | 10,465 |  |  | $ | 33,203 |  |  | $ | 30,334 |
(1) | Intersegment insurance premiums and service fees are primarily related to Arity and Allstate Roadside Services and are eliminated in the condensed consolidated financial statements.
Reportable segments financial performance |  |  |  |
|  | Three months ended September 30, |  | Nine months ended September 30,
($ in millions) |  | 2019 |  | 2018 |  | 2019 |  | 2018
Property-Liability |  |  |  |  |  |  |  |
Allstate Protection |  | $ | 836 |  |  | $ | 587 |  |  | $ | 1,909 |  |  | $ | 2,053 |
Discontinued Lines and Coverages |  | (99 | ) |  | (80 | ) |  | (105 | ) |  | (86 | )
Total underwriting income |  | 737 |  |  | 507 |  |  | 1,804 |  |  | 1,967 |
Net investment income |  | 448 |  |  | 410 |  |  | 1,210 |  |  | 1,100 |
Income tax expense on operations |  | (236 | ) |  | (185 | ) |  | (617 | ) |  | (628 | )
Realized capital gains and losses, after-tax |  | 127 |  |  | 103 |  |  | 724 |  |  | 16 |
Tax Legislation expense |  | — |  |  | (3 | ) |  | — |  |  | (3 | )
Property-Liability net income applicable to common shareholders |  | 1,076 |  |  | 832 |  |  | 3,121 |  |  | 2,452 |
Service Businesses |  |  |  |  |  |  |  |
Adjusted net income |  | 8 |  |  | 1 |  |  | 35 |  |  | — |
Realized capital gains and losses, after-tax |  | 4 |  |  | (1 | ) |  | 17 |  |  | (5 | )
Amortization of purchased intangibles, after-tax |  | (25 | ) |  | (16 | ) |  | (74 | ) |  | (48 | )
Impairment of purchased intangibles, after-tax |  | — |  |  | — |  |  | (43 | ) |  | — |
Tax Legislation expense |  | — |  |  | (4 | ) |  | — |  |  | (4 | )
Service Businesses net loss applicable to common shareholders |  | (13 | ) |  | (20 | ) |  | (65 | ) |  | (57 | )
Allstate Life |  |  |  |  |  |  |  |
Adjusted net income |  | 44 |  |  | 75 |  |  | 185 |  |  | 226 |
Realized capital gains and losses, after-tax |  | 4 |  |  | (3 | ) |  | — |  |  | (7 | )
Valuation changes on embedded derivatives not hedged, after-tax |  | (9 | ) |  | — |  |  | (9 | ) |  | — |
DAC and DSI amortization related to realized capital gains and losses, after-tax |  | 1 |  |  | (1 | ) |  | (2 | ) |  | (6 | )
Tax Legislation expense |  | — |  |  | (16 | ) |  | — |  |  | (16 | )
Allstate Life net income applicable to common shareholders |  | 40 |  |  | 55 |  |  | 174 |  |  | 197 |
Allstate Benefits |  |  |  |  |  |  |  |
Adjusted net income |  | 31 |  |  | 33 |  |  | 99 |  |  | 98 |
Realized capital gains and losses, after-tax |  | 2 |  |  | 2 |  |  | 7 |  |  | — |
Allstate Benefits net income applicable to common shareholders |  | 33 |  |  | 35 |  |  | 106 |  |  | 98 |
Allstate Annuities |  |  |  |  |  |  |  |
Adjusted net income |  | 16 |  |  | 20 |  |  | 43 |  |  | 99 |
Realized capital gains and losses, after-tax |  | 16 |  |  | 40 |  |  | 177 |  |  | 22 |
Valuation changes on embedded derivatives not hedged, after-tax |  | (1 | ) |  | 1 |  |  | (6 | ) |  | 5 |
Gain on disposition of operations, after-tax |  | — |  |  | 1 |  |  | 2 |  |  | 3 |
Tax Legislation benefit |  | — |  |  | 69 |  |  | — |  |  | 69 |
Allstate Annuities net income applicable to common shareholders |  | 31 |  |  | 131 |  |  | 216 |  |  | 198 |
Corporate and Other |  |  |  |  |  |  |  |
Adjusted net loss |  | (101 | ) |  | (106 | ) |  | (302 | ) |  | (291 | )
Realized capital gains and losses, after-tax |  | 2 |  |  | — |  |  | 10 |  |  | (10 | )
Pension and other postretirement remeasurement gains and losses, after-tax |  | (179 | ) |  | 30 |  |  | (289 | ) |  | 25 |
Tax Legislation expense |  | — |  |  | (15 | ) |  | — |  |  | (15 | )
Consolidated and Other net loss applicable to common shareholders |  | (278 | ) |  | (91 | ) |  | (581 | ) |  | (291 | )
Consolidated net income applicable to common shareholders |  | $ | 889 |  |  | $ | 942 |  |  | $ | 2,971 |  |  | $ | 2,597 |

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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