Reinsurance and Indemnification

12 Months Ended

Dec. 31, 2025


Note 11			Reinsurance and Indemnification


Effects of reinsurance and indemnification on property and casualty premiums written and earned and accident and health insurance premiums and contract charges
	For the years ended December 31,
($ in millions)	2025		2024		2023
Property and casualty insurance premiums written
Direct	$	64,596	$	60,574	$	54,632
Assumed	385		352		396
Ceded	(2,429)		(2,203)		(2,018)
Property and casualty insurance premiums written, net of recoverables	$	62,552	$	58,723	$	53,010

Property and casualty insurance premiums earned
Direct	$	62,511	$	58,221	$	52,301
Assumed	389		377		358
Ceded	(2,397)		(2,210)		(1,989)
Property and casualty insurance premiums earned, net of recoverables	$	60,503	$	56,388	$	50,670

Accident and health insurance premiums and contract charges
Direct	$	1,188	$	1,945	$	1,865
Assumed	42		26		28
Ceded	(284)		(50)		(47)
Accident and health insurance premiums and contract charges, net of recoverables (1)	$	946	$	1,921	$	1,846


Effects of reinsurance ceded and indemnification programs on property and casualty insurance claims and claims expense and accident, health and other policy benefits
($ in millions)	For the years ended December 31,
	2025		2024		2023
Property and casualty insurance claims and claims expense (2)	$	(1,348)	$	(1,716)	$	(633)
Accident, health and other policy benefits (1)	(254)		(36)		(44)

(1)Includes group health business sold through reinsurance to Nationwide Life Insurance Company.

(2)2025 includes ceded losses to the Nationwide Reinsurance Program for the California wildfires.


Reinsurance and indemnification recoverables, net
	As of December 31,
($ in millions)	2025		2024
Property and casualty
Paid and due from reinsurers and indemnitors	$	267	$	285
Unpaid losses estimated (including IBNR)	8,012		8,602
Total property and casualty	$	8,279	$	8,887
Accident and health insurance	222		37
Total	$	8,501	$	8,924


Rollforward of credit loss allowance for reinsurance recoverables
	For the years ended December 31,
($ in millions)	2025		2024
Property and casualty (1) (2)
Beginning balance	$	(63)	$	(62)
Increase in the provision for credit losses	(1)		(1)
Write-offs	10		—
Ending balance	$	(54)	$	(63)

(1)Primarily related to Run-off Property-Liability reinsurance ceded.

(2)Indemnification recoverables are considered collectible based on the industry pool and facility enabling legislation.

Property and casualty reinsurance and indemnifications recoverables

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 the shared economy program currently in run-off.

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 and 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 and 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 (“PIP”) 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, 2025 and 2024 include $5.83 billion and $6.48 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. 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 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 PIP 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 is $675 thousand per claim for the fiscal two-years ending June 30, 2027 compared to $635 thousand per claim for the fiscal two-years ending June 30, 2025.

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.

The MCCA annual assessments fund current operations, member company reimbursements and any deficit. 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 on June 30, 2028 to discount its liabilities for loss and loss adjustment expense. As of June 30, 2025, the date of its most recent annual financial report, the MCCA had cash and invested assets of $23.19 billion and an accumulated deficit of $1.76 billion. The permitted practice reduced the accumulated deficit by $50.00 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 PIP 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.

The amounts of paid and unpaid recoverables as of December 31, 2025 and 2024 were $347 million and $370 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. Assessments paid by the Company to PLIGA for the EMB program totaled $8 million in 2025. As of December 31, 2024, the date of its most recent annual financial report, PLIGA had a fund balance of $299 million.

North Carolina Reinsurance Facility The NCRF provides automobile liability insurance to drivers that private market 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, 2025, the NCRF reported $526 million in members’ equity. The NCRF implemented a recoupment surcharge on all private passenger and commercial fleet policies effective October 1, 2025, through September 30, 2026. The NCRF results are shared by the member companies in proportion to their respective North Carolina automobile liability writings. As of December 31, 2025, our NCRF recoverables on paid claims was $74 million and recoverables on unpaid claims was $371 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 (together with CKIC, “Castle Key”), Integon National Insurance Company and Century-National Insurance Company participate in the mandatory coverage provided by the FHCF and therefore have access to reimbursement for certain qualifying Florida hurricane losses from the

FHCF. The companies have exposure to assessments and pay 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 the issuance of a revenue bond, and up to a total of 10% of premiums per year for assessments in the second and subsequent years, if required to fund additional bonds. The FHCF has not issued an emergency assessment since 2015.

Annual premiums ceded to the FHCF were $18 million, $23 million and $28 million in 2025, 2024 and 2023, respectively. Qualifying losses were $(28) million in 2025 due to a reduction in the expected recoveries for Hurricane Ian, $(1) million in 2024 including final settlements related to Hurricane Michael recoveries and $(6) million in 2023 including final settlements related to Hurricane Irma recoveries.

For qualifying losses to personal lines property in Florida caused by storms the National Hurricane Center declares to be hurricanes, the Florida Program has three mandatory FHCF inuring contracts providing a combined $173 million of limits, 90% placed. Additionally, the National General Lender Services Standalone Program has one FHCF inuring contract that provides $97 million of limits in excess of a $51 million retention, 90% placed. The amounts recoverable from the FHCF totaled $29 million and $73 million as of December 31, 2025 and 2024, 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. Congress must periodically renew the funding of the program as well as consider reforms to the program that would be incorporated in legislation to reauthorize the NFIP. As of September 30, 2025, the NFIP owes $22.5 billion to the U.S. Treasury. On February 3, 2026, the president signed legislation passed by Congress that extends the NFIP authorization until September 30, 2026. Should authorization lapse, existing policies remain valid, but insurance companies operating on behalf of the NFIP may not enter into new flood insurance contracts. The

program will also have limited ability to issue increased coverage on existing policies, or issue renewal policies. The NFIP has the authority to process and pay new and existing flood insurance claims from the National Flood Insurance Fund and the National Flood Insurance Reserve Fund, but its borrowing capacity is reduced to $1 billion.

The amounts recoverable as of December 31, 2025 and 2024 were $22 million and $279 million, respectively. Annual premiums ceded to NFIP include $409 million, $368 million and $327 million in 2025, 2024 and 2023, respectively. Qualifying losses incurred that are ceded to NFIP include $111 million, $618 million and $102 million in 2025, 2024 and 2023, 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, winter storms, wildfires, earthquakes and fires following earthquakes.

•The Company purchases reinsurance from traditional reinsurance companies as well as the insurance-linked securities (“ILS”) market.

•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.

•Florida personal lines property is covered by separate agreements, as the risk of loss is different and the Company’s subsidiaries operating in this state are separately capitalized.

The Company’s current catastrophe reinsurance program utilizes the Company’s risk and return framework which is intended to provide shareholders with long-term returns on the risks assumed in the property business, reduce earnings volatility and provide protection to customers. This framework incorporates the Company’s robust economic capital model and is informed by catastrophe risk models including hurricanes, earthquakes and wildfires. The Company monitors risk both in the aggregate and by peril, while also evaluating model performance relative to experience and its expectations of catastrophe risk trends. As of December 31, 2025, the modeled 1-in-100 probable maximum loss for hurricane, earthquake and wildfire perils is approximately $3.1 billion, net of reinsurance. The Company continually reviews its aggregate risk appetite and the cost and availability of reinsurance to optimize the risk and return profile of this exposure. The following catastrophe reinsurance agreements are in effect as of December 31, 2025.

The Nationwide Excess Catastrophe Reinsurance Program (the “Nationwide Program”) provides per occurrence coverage to protect against a large single event up to $9.51 billion of loss less a $1.00 billion retention and is subject to the percentage of reinsurance placed in each of its agreements. It also

provides aggregate coverage to protect against an aggregation of losses from multiple events up to $500 million for catastrophe loss events in excess of a deductible of $50 million per event with $56 million of limit utilized by expected recoveries. Property business in the state of Florida is excluded from this program. Separate reinsurance agreements address the distinct needs of separately capitalized legal entities. The Nationwide Program includes reinsurance agreements with both the traditional and ILS markets as described below:

•Core traditional market multi-year and per occurrence agreements provide $6.08 billion of placed limits for losses from a large single catastrophe event and are comprised of the following:

–Contracts providing combined $3.24 billion of placed limits for a large single catastrophe event exhausting at $4.25 billion, with one annual reinstatement.

–Three multi-year contracts providing combined $336 million of placed limits with two of the contracts providing one reinstatement of limits over each contract’s term.

–Five single-year contracts providing combined $2.50 billion of placed limits filling capacity around the multi-year and ILS placements, with two contracts providing one reinstatement of limits.

•ILS placements provide $2.70 billion of placed limits, with no reinstatement of limits, and are comprised of the following:

–Ten contracts providing occurrence coverage of $2.20 billion of placed limits, reinsuring losses in all states except Florida caused by named storms, earthquakes and fire following earthquakes, severe weather, wildfires, and other naturally occurring or man-made events determined to be a catastrophe by the Company.

–One contract providing occurrence and aggregate coverage of $175 million of placed limits, also provides that for each annual period beginning April 1, 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 limits. Recoveries are limited to the ultimate net loss from the reinsured event.

–Two contracts, providing aggregate coverage of $325 million of placed limits, with $56 million of limit utilized by expected recoveries.

Florida Program Our 2025 Florida Program provides coverage for property policies of CKIC and certain affiliate companies for Florida catastrophe events up to $1.10 billion of loss less a $30 million retention. This includes coverage for events up to $951 million of loss less a $30 million retention, in

addition to the FHCF which provides a combined placed limit of $156 million.

The Florida Program includes reinsurance agreements placed in the traditional market, the FHCF and the ILS market as follows:

•For qualifying losses to personal lines property in Florida caused by storms the National Hurricane Center declares to be hurricanes, the Florida Program has three mandatory FHCF inuring contracts providing a combined $173 million of limits, 90% placed.

• Traditional market placements comprise reinsurance limits for losses to personal lines property in Florida arising out of multiple perils including those not covered by the FHCF contracts. One contract provides combined $405 million of placed limit with one automatic reinstatement of limits with premium due, while a separate contract provides coverage to partially offset these reinstatement premiums. An additional contract provides $66 million of reinsurance limit for a second event.

•ILS placements provide $516 million of placed 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.

National General Lender Services Standalone Program is placed in the traditional market and provides $410 million of placed limits, subject to a $90 million retention, with one automatic reinstatement of limits. Inuring contracts include the National General FHCF contract providing $97 million of limits in excess of a $51 million retention, 90% placed.

U.S. Homeowners Aggregate A seven-month duration aggregate contract was placed with a risk period of June 1, 2025 to December 31, 2025. This contract provided $325 million of placed limit in excess of a $3.50 billion retention for US Homeowners catastrophe events, including the state of Florida. Inuring contracts included the Florida Program and National General Lender Services Standalone Program.

National General Flood Excess of Loss Reinsurance Contract provides $50 million of placed limits, subject to a $20 million retention, with one automatic reinstatement of limits.

Kentucky Earthquake Excess Catastrophe Reinsurance Contract is placed in the traditional market and provides $28 million of placed limits, subject to a $2 million retention with one reinstatement of limits.

Canada Catastrophe Excess of Loss Reinsurance Contract is placed in the traditional market and provides CAD 478 million of placed limits, subject to a CAD 100 million retention, with one reinstatement of limits.

The Company has not experienced credit losses on its catastrophe reinsurance programs. The total cost of the property catastrophe reinsurance program was $1.23 billion, $1.11 billion and $1.02 billion in 2025, 2024 and 2023, respectively.

Other reinsurance programs The Company’s other reinsurance programs relate to commercial lines and asbestos, environmental and other liability exposures. The largest reinsurance recoverable balance the Company had outstanding was $156 million and $175 million from Lloyd’s of London as of December 31, 2025 and 2024, respectively.