Allstate 2015 Annual Report Download - page 188

182 www.allstate.com
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. General
Basis of presentation
The accompanying consolidated financial statements include the accounts of The Allstate Corporation (the
“Corporation”) and its wholly owned subsidiaries, primarily Allstate Insurance Company (“AIC”), a property-liability
insurance company with various property-liability and life and investment subsidiaries, including Allstate Life Insurance
Company (“ALIC”) (collectively referred to as the “Company” or “Allstate”). These consolidated financial statements have
been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”).
All significant intercompany accounts and transactions have been eliminated.
To conform to the current year presentation, certain amounts in the prior year notes to consolidated financial statements
have been reclassified.
The preparation of financial statements in conformity with GAAP requires management to make estimates and
assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual
results could differ from those estimates.
Nature of operations
Allstate is engaged, principally in the United States, in the property-liability insurance and life insurance business.
Allstate’s primary business is the sale of private passenger auto and homeowners insurance. The Company also sells
several other personal property and casualty insurance products, select commercial property and casualty coverages,
life insurance and voluntary accident and health insurance. Allstate primarily distributes its products through exclusive
agencies, financial specialists, independent agencies, contact centers and the internet.
The Allstate Protection segment principally sells private passenger auto and homeowners insurance, with earned
premiums accounting for 85% of Allstate’s 2015 consolidated revenues. Allstate was the country’s second largest personal
property and casualty insurer as of December 31, 2014. Allstate Protection, through several companies, is authorized to
sell certain property-liability products in all 50 states, the District of Columbia and Puerto Rico. The Company is also
authorized to sell certain insurance products in Canada. For 2015, the top geographic locations for premiums earned by
the Allstate Protection segment were Texas, California, New York and Florida. No other jurisdiction accounted for more
than 5% of premiums earned for Allstate Protection.
Allstate has exposure to catastrophes, an inherent risk of the property-liability insurance business, which have
contributed, and will continue to contribute, to material year-to-year fluctuations in the Company’s results of operations
and financial position (see Note 8). The nature and level of catastrophic loss caused by natural events (high winds,
winter storms, tornadoes, hailstorms, wildfires, tropical storms, hurricanes, earthquakes and volcanoes) and man-made
events (terrorism and industrial accidents) experienced in any period cannot be predicted and could be material to
results of operations and financial position. The Company considers the greatest areas of potential catastrophe losses
due to hurricanes to generally be major metropolitan centers in counties along the eastern and gulf coasts of the United
States. The Company considers the greatest areas of potential catastrophe losses due to earthquakes and fires following
earthquakes to be major metropolitan areas near fault lines in the states of California, Oregon, Washington, South
Carolina, Missouri, Kentucky and Tennessee. The Company also has exposure to asbestos, environmental and other
discontinued lines claims (see Note 14).
The Allstate Financial segment sells traditional, interest-sensitive and variable life insurance and voluntary accident
and health insurance products. The Company previously offered and continues to have in force fixed annuities such as
deferred and immediate annuities, and institutional products consisting of funding agreements sold to unaffiliated trusts
that use them to back medium-term notes.
Allstate Financial, through several companies, is authorized to sell life insurance and retirement products in
all 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands and Guam. Voluntary accident and health
insurance products are also sold in Canada. For 2015, the top geographic locations for statutory premiums and annuity
considerations for the Allstate Financial segment were New York, Texas, Florida and California. No other jurisdiction
accounted for more than 5% of statutory premiums and annuity considerations for Allstate Financial. Allstate Financial
distributes its products through Allstate exclusive agencies and exclusive financial specialists, and workplace enrolling
independent agents.