Allstate 2015 Annual Report Download - page 133

The Allstate Corporation 2015 Annual Report 127
Pending MCCA claims differ from most personal lines insurance pending claims as other personal lines policies have
coverage limits and incurred claims settle in shorter periods. Claims are considered pending as long as payments are
continuing pursuant to an outstanding MCCA claim, which can be for a claimant’s lifetime. Claims that occurred more
than 5 years ago and continue to be paid often include lifetime benefits. Pending, new and closed claims for Michigan
personal injury protection exposures, including those covered and not covered by the MCCA reinsurance, for the years
ended December 31 are summarized in the following table.
Number of claims 2015 2014 2013
Pending, beginning of year 4,936 4,684 4,029
New 8,956 8,620 8,531
Total closed (8,765) (8,368) (7,876)
Pending, end of year 5,127 4,936 4,684
As of December 31, 2015, approximately 1,250 of our pending claims have been reported to the MCCA, of which
approximately 65% represents claims that occurred more than 5 years ago. There are 68 Allstate brand claims with
reserves in excess of $15 million as of December 31, 2015 which comprise approximately 40% of the gross ending
reserves in the table above. As a result, significant developments with a single claimant can result in volatility in prior
year incurred claims.
We enter into certain intercompany insurance and reinsurance transactions for the Property-Liability operations
in order to maintain underwriting control and manage insurance risk among various legal entities. These reinsurance
agreements have been approved by the appropriate regulatory authorities. All significant intercompany transactions
have been eliminated in consolidation.
Catastrophe reinsurance
Our catastrophe reinsurance program is designed, utilizing our risk management methodology, to address our
exposure to catastrophes nationwide. Our program is designed to provide reinsurance protection for catastrophes
resulting from multiple perils including hurricanes, windstorms, hail, tornados, fires following earthquakes, earthquakes
and wildfires. These reinsurance agreements are part of our catastrophe management strategy, which is intended to
provide our shareholders an acceptable return on the risks assumed in our property business, and to reduce variability of
earnings, while providing protection to our customers.
We anticipate completing the placement of our 2016 catastrophe reinsurance program in the second quarter of 2016.
We expect the program will be similar to our 2015 catastrophe reinsurance program. For further details of the existing
2015 program, see Note 10 of the consolidated financial statements.
ALLSTATE FINANCIAL 2015 HIGHLIGHTS
• Allstate Financial net income applicable to common shareholders was $663 million in 2015 compared to $631
million in 2014.
• Allstate Financial premiums and contract charges on underwritten products, including traditional life, interest-
sensitive life and accident and health insurance, totaled $2.14 billion in 2015, an increase of 0.5% from $2.13
billion in 2014.
• Allstate Financial investments totaled $36.79 billion as of December 31, 2015, reflecting a decrease of $2.02 billion
from $38.81 billion as of December 31, 2014. Net investment income decreased 11.6% to $1.88 billion in 2015
from $2.13 billion in 2014.
• Allstate Financial net realized capital gains totaled $267 million in 2015 compared to $144 million in 2014.
• Allstate Financial contractholder funds totaled $21.30 billion as of December 31, 2015, reflecting a decrease of
$1.23 billion from $22.53 billion as of December 31, 2014.
• On April 1, 2014, we sold Lincoln Benefit Life Company’s (“LBL”) life insurance business generated through
independent master brokerage agencies, and all of LBL’s deferred fixed annuity and long-term care insurance
business to Resolution Life Holdings, Inc. Therefore, 2014 includes LBL’s results for one quarter.