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Variable Interest Entities | 3 Months Ended
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Mar. 31, 2025
Organization, Consolidation and Presentation of Financial Statements [Abstract] |
Variable Interest Entities |
Note 8 | Variable Interest Entities
Consolidated VIEs primarily include Adirondack, a New York reciprocal insurer, and Skylands, a New Jersey reciprocal insurer. The Reciprocal Exchanges are insurance carriers organized as unincorporated associations. The Company does not own the equity of the Reciprocal Exchanges, which is owned by their respective policyholders. The results of the Reciprocal Exchanges are included in the Allstate Protection segment as the Company manages the business operations of the Reciprocal Exchanges and has the power to direct their activities that most significantly impact their economic performance. Due to ongoing operating losses, the Company recorded a loss related to variable interests held in the Reciprocal Exchanges of $67 million in the first quarter of 2025 and $123 million in the first quarter of 2024. These losses have been reflected as capital transactions attributable to noncontrolling interest as the Company expects 100% of its interests in surplus notes and lines of credit to absorb expected losses of the Reciprocal Exchanges. Adirondack has withdrawn and stopped writing new business and Skylands has withdrawn substantially all business and stopped writing new business. As the reciprocal insurers are dissolved, policyholders will share any residual unassigned surplus but are not subject to assessment for any deficit in unassigned surplus of the Reciprocal Exchanges. The assets of the Reciprocal Exchanges can be used only to settle the obligations of the Reciprocal Exchanges and general creditors have no recourse to the Company. The New York State Department of Financial Services approved the withdrawal plan for Adirondack to non-renew or cancel all policies effective as of December 31, 2024. Additionally, the Company waived all fees payable by Adirondack after July 1, 2024, excluding Loss Adjustment Expenses associated with individual claims. The New Jersey Department of Banking and Insurance acknowledged the withdrawal plan filed on behalf of Skylands to withdraw from providing personal lines insurance, except dwelling fire and watercraft policies, beginning December 14, 2024. Skylands has a 100% quota share reinsurance agreement to cede all of Skylands’ business to the Company. Claims and claims expense ceded to the Company were $1 million and $12 million for the three months ended March 31, 2025 and 2024, respectively. The Company received a management fee for the services provided to the Reciprocal Exchanges totaling zero and $10 million for the three months ended March 31, 2025 and 2024, respectively. The Reciprocal Exchanges generated $1 million and $61 million of earned premiums for the three months ended March 31, 2025 and 2024, respectively. Total costs and expenses were $2 million and $87 million for the three months ended March 31, 2025 and 2024, respectively.
Assets and liabilities of Reciprocal Exchanges |  |
($ in millions) |  | March 31, 2025 |  | December 31, 2024 |  |
Assets |  |  |  |  |  |
Fixed income securities |  | $ | 3 |  |  | $ | 47 |  |  |
Short-term investments |  | 105 |  |  | 112 |  |  |
Premium installment and other receivables, net |  | 1 |  |  | 9 |  |  |
Reinsurance recoverables, net |  | 40 |  |  | 76 |  |  |
Other assets |  | 11 |  |  | 25 |  |  |
Total assets |  | 160 |  |  | 269 |  |  |
Liabilities |  |  |  |  |  |
Reserve for property and casualty insurance claims and claims expense |  | 159 |  |  | 214 |  |  |
Unearned premiums |  | 1 |  |  | 22 |  |  |
Other liabilities and expenses |  | 197 |  |  | 235 |  |  |
Total liabilities |  | $ | 357 |  |  | $ | 471 |  |  |

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- Definition The entire disclosure for a variable interest entity (VIE), including but not limited to, judgments and assumptions in determining whether to consolidate and in identifying the primary beneficiary, gain (loss) recognized on the initial consolidation of the VIE, terms of arrangements, amounts and classification of the VIE's assets and liabilities, and the entity's maximum exposure to loss. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 810 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/810/tableOfContent + Details
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