Reserve for Property and Casualty Insurance Claims and Claims Expense (Tables)

6 Months Ended

Jun. 30, 2020

Reserve for Property-Liability Insurance Claims and Claims Expense [Abstract]

Schedule of liability for unpaid claims and claims adjustment expense



Prior year reserve reestimates included in claims and claims expense ⁽¹⁾
	Six months ended June 30,
	Non-catastrophes losses						Catastrophes losses						Total
($ in millions)	2020			2019			2020			2019			2020			2019
Auto	$	(26	)	$	(151	)	$	(15	)	$	(7	)	$	(41	)	$	(158	)
Homeowners	(3		)	—			19			57			16			57
Other personal lines	(6		)	2			(2		)	6			(8		)	8
Commercial lines	24			17			3			—			27			17
Discontinued Lines and Coverages	4			5			—			—			4			5
Service Businesses	(1		)	(3		)	—			—			(1		)	(3		)
Total prior year reserve reestimates	$	(8	)	$	(130	)	$	5		$	56		$	(3	)	$	(74	)


⁽¹⁾	Favorable reserve reestimates are shown in parentheses.

California wildfire subrogation subsequent event

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 is one of the insurance companies that is party to the agreement with subrogating insurers.

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.

The Company expects to recognize a favorable impact of approximately $400 million to $450 million, pre-tax, net of expenses and adjustments to reinsurance, in the third quarter 2020, which will be reflected as prior year catastrophe reserve reestimates in the Condensed Consolidated Statement of Operations. On July 24, 2020, the Company received an initial distribution from the trust representing approximately 80% of the expected recovery.



Rollforward of the reserve for property and casualty insurance claims and claims expense
	Six months ended June 30,
($ in millions)	2020			2019
Balance as of January 1	$	27,712		$	27,423
Less recoverables ⁽¹⁾	(6,912		)	(7,155		)
Net balance as of January 1	20,800			20,268
Incurred claims and claims expense related to:
Current year	10,566			12,250
Prior years	(3		)	(74		)
Total incurred	10,563			12,176
Claims and claims expense paid related to:
Current year	(5,777		)	(6,125		)
Prior years	(5,173		)	(5,237		)
Total paid	(10,950		)	(11,362		)
Net balance as of June 30	20,413			21,082
Plus recoverables	7,013			7,023
Balance as of June 30	$	27,426		$	28,105

⁽¹⁾

Recoverables comprises reinsurance and indemnification recoverables.