Allstate 2011 Annual Report Download - page 124

Allstate Protection
The tables below show Allstate Protection net reserves representing the estimated cost of outstanding claims as
they were recorded at the beginning of years 2010, 2009 and 2008, and the effect of reestimates in each year.
January 1 reserves
($ in millions)
2010 2009 2008
Auto $ 10,606 $ 10,220 $ 10,175
Homeowners 2,399 2,824 2,279
Other personal lines 2,145 2,207 2,131
Total Allstate Protection $ 15,150 $ 15,251 $ 14,585
2010 2009 2008
($ in millions, except ratios)
Effect on Effect on Effect on
Reserve combined Reserve combined Reserve combined
reestimate ratio reestimate ratio reestimate ratio
Auto $ (179) (0.7) $ (57) (0.2) $ (27) (0.1)
Homeowners (23) (0.1) (168) (0.6) 124 0.5
Other personal lines 15 0.1 89 0.3 55 0.2
Total Allstate Protection $ (187) (0.7) $ (136) (0.5) $ 152 0.6
Underwriting income $ 526 $ 1,027 $ 189
Reserve reestimates as a % of
underwriting income 35.6% 13.2% (80.4)%
Auto reserve reestimates in 2010 and 2009 were primarily due to claim severity development that was better than
expected. 2010 was also impacted by a litigation settlement. Auto reserve reestimates in 2008 were primarily the result
of a $45 million reclassification of IBNR losses from standard auto to other personal lines to be consistent with the
recording of excess liability policies’ premiums and losses.
Favorable homeowners reserve reestimates in 2010 were primarily due to favorable catastrophe reserve
reestimates, partially offset by a litigation settlement. Favorable homeowners reserve reestimates in 2009 were primarily
due to favorable reserve reestimates from Hurricanes Ike and Gustav and a catastrophe related subrogation recovery.
Unfavorable homeowners reserve reestimates in 2008 were primarily due to litigation filed in conjunction with a
Louisiana deadline for filing suits related to Hurricane Katrina.
Other personal lines reserve reestimates in 2010 and 2009 were primarily the result of loss development different
than anticipated in previous estimates. Other personal lines reserve reestimates in 2008 were primarily the result of a
$45 million reclassification of IBNR losses from standard auto to other personal lines to be consistent with the recording
of excess liability policies’ premiums and losses.
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MD&A