Allstate : Q2 2022 Reinsurance Update

2022-2023 Catastrophe Reinsurance Programs

Northbrook, IL, June 15, 2022 - We completed the placement of our 2022-2023 Nationwide Excess Catastrophe Reinsurance Program (1) that provides reinsurance protection to the Allstate Protection businesses of The Allstate Corporation (NYSE: ALL) in the first quarter of 2022 and the placement of our 2022-2023 Florida Excess Catastrophe Program and National General Lender Services Program in May 2022. The National General Reciprocal Excess Catastrophe Program is expected to be completed by the end of the second quarter of 2022.

The catastrophe reinsurance program is part of our catastrophe management strategy, which is intended to provide our shareholders with an acceptable return on the risks assumed in our personal lines business, reduce earnings variability, and provide protection to our customers. Our 2022 reinsurance program will continue to support our risk tolerance framework that targets less than a 1% likelihood of annual aggregate catastrophe losses from hurricanes, earthquakes and wildfires, net of reinsurance, exceeding $2.5 billion, based on modeled assumptions and applications currently used.

Allstate's catastrophe reinsurance program materially reduces our exposure to wind, earthquake, and wildfire losses. We employ a multi-year approach to placing reinsurance coverage to lessen the amount of reinsurance being placed in the market in any one year. Claim adjustment fees are indemnified as a percentage of ultimate net loss and are included within each contract's reinsurance limit.

The reinsurance agreements have been placed in the traditional reinsurance and Insurance-Linked Securities ("ILS") markets. In doing so, we consider a number of factors including coverage, cost, terms, and the period of protection. All reinsurers participating on our program have an A.M. Best insurance financial strength rating of A- or better, except one, that is not rated by A.M. Best. Additionally, all reinsurance agreements placed in the ILS markets are collateralized.

The total cost of our catastrophe reinsurance was $144 million and $113 million in the first quarter of 2022 and 2021, respectively. The total cost of our catastrophe reinsurance program during 2021 was $556 million.

The following pages summarize our 2022-2023 reinsurance program which includes:

• Nationwide Excess Catastrophe Reinsurance Program
• Florida Excess Catastrophe Reinsurance Program
• National General Lender Services Standalone Program
• National General Reciprocal Excess Catastrophe Reinsurance Contract
• Kentucky Earthquake Excess Catastrophe Reinsurance Contract
• Excess & Surplus Earthquake Contract
• Canada Catastrophe Excess of Loss Reinsurance Contract

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1. A reinsurance program comprises one or more reinsurance agreements and a reinsurance agreement comprises one or more reinsurance contracts

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Nationwide Excess Catastrophe Reinsurance Program

The Nationwide Excess Catastrophe Reinsurance Program (the "Nationwide Program") provides coverage up to $6.614 billion of loss less a $500 million retention and is subject to the percentage of reinsurance placed in each of its agreements. The agreements comprising the Nationwide Program are described below.

Per Occurrence and Aggregate Excess Agreements

The Nationwide Program includes occurrence coverage in contracts from both the traditional reinsurance and ILS markets, while annual aggregate protection is included in four contracts supported by the ILS market. The agreements provide multi-line catastrophe coverage in every state except Florida, where coverage is only provided for personal lines automobile.

The Nationwide Program includes multi-year agreements providing coverage up to $3.750 billion in excess of a $500 million retention, where 1/3 of the capacity is placed in any one year. The Program also provides reinsurance capacity above $4.250 billion through a combination of contracts placed with traditional market reinsurers and catastrophe bonds issued in the ILS market by Sanders Re.

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Traditional Reinsurance Market Multi-Year Per Occurrence Excess Agreements

The multi-yearPer Occurrence Excess Agreements placed in the traditional reinsurance market in 2022 consist of four contracts providing coverage up to $3.750 billion in excess of a $500 million retention and exhausting at $4.250 billion per loss occurrence and two eight-year term contracts providing coverage in excess of a $4.250 billion retention.

$3.750 billion in excess of a $500 million retention contracts

• Reinsure personal lines property and automobile losses arising out of multiple perils including, but not limited to, hurricane, windstorm, hail, tornado, earthquake, fires following earthquakes and wildfires in all states, excluding personal lines property in the state of Florida
• Include coverage for commercial lines property and automobile (physical damage only) in all states, excluding commercial lines property in the state of Florida
• Consist of multi-year contracts, each providing one-third of 95% of the total limit
• • Existing contracts effective June 1, 2020 consist of four layers and expires May 31, 2023
  • Existing contracts effective June 1, 2021 consist of four layers and expires May 31, 2024
• New contracts effective June 1, 2022 consist of four layers and are structured with a first event retention of $750 million and subsequent event retention of $500 million
• • Three layers expiring May 31, 2025
  • One layer consisting of multi-year contracts effective June 1, 2022 and expiring May 31, 2023, May 31, 2024 and May 31, 2025
• Includes one reinstatement of limits per year, with premium required
• Reinsurance premiums are subject to adjustment for exposure changes on an annual basis

Eight-Year Term Contracts

• Contain comparable contract terms and conditions as the $3.750 billion in excess of a $500 million retention contracts
• Provide a $210 million limit in excess of a minimum $4.250 billion retention and a $138 million limit in excess of a minimum $5.039 billion retention, are 95% placed and expire March 31, 2029
• Contain a variable reset option, which the ceding entities may elect to invoke at each anniversary, and which allows for the annual adjustment of each contract's attachment and exhaustion levels within specified limits
• Contain one reinstatement of limits over its eight-year term with premium required. Reinsurance premiums are subject to adjustment for exposure changes on an annual basis

Sanders Re Catastrophe Bonds Agreements

The Sanders Re Per Occurrence Excess Catastrophe Reinsurance Contracts

• Reinsures excess catastrophe losses caused by named storms, earthquakes and fire following earthquakes, severe weather, wildfires, and other naturally occurring or man-made events declared to be a catastrophe by Allstate
• Reinsure personal lines property and automobile excess catastrophe losses in 49 states and the District of Columbia, excluding the state of Florida
• Reinsure business located in the covered territory and arising out of covered events
• Contain a variable reset option, which the ceding entities may invoke for risk periods subsequent to the first risk period and which allows for the annual adjustment of the contract's attachment and exhaustion levels within specified limits
• Contracts do not include a reinstatement of limits

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The Sanders Re Per Occurrence & Aggregate Excess Catastrophe Reinsurance Contracts and Sanders

Re Aggregate Excess Catastrophe Reinsurance Contract

• Contain comparable contract terms and conditions as the Sanders Re Per Occurrence Excess Catastrophe Reinsurance Contracts
• For each annual period beginning April 1, Allstate declared catastrophes occurring during such annual period can be aggregated to erode the aggregate retention and qualify for coverage under the aggregate limit
• Reinsurance recoveries from the Nationwide Per Occurrence Excess Contract inure to the benefit of the annual aggregate layer
• Reinsurance recoveries collected under the per occurrence limit of each contract are not eligible for cession under the annual aggregate limit of that contract
• Reinsurance recoveries for all loss occurrences and annual aggregate losses qualifying for coverage during each contract's four-year risk period are limited to our ultimate net loss from covered events and subject to the contract's limit

2022-1 Excess Catastrophe Reinsurance Contract

• Placed with Sanders Re III Ltd. which obtained funding from the ILS market to collateralize the contract's limit
• Risk period began April 1, 2022, and terminates on March 31, 2026
• Consists of three tranches
• • Class A (Per Occurrence) provides a $200 million limit in excess of a minimum $3.750 billion retention. While inuring layers are fully intact, the contract would begin to pay subject losses in excess of $4.460 billion
  • Class B (Per Occurrence & Aggregate) provides one limit of $175 million for catastrophe loss events in excess of a $50 million event deductible, during its four-year term which can be used on a per occurrence or an annual aggregate basis
  • • For a qualifying loss occurrence, the contract provides $175 million in reinsurance limits in excess of a minimum $3.750 billion retention. While inuring layers are fully intact, the contract would begin to pay subject losses in excess of $5.940 billion
    • Provides an annual aggregate limit of $175 million between a $3.000 billion to $3.500 billion layer subject to an annual retention of $3.000 billion
  • Class C (Aggregate) provides one limit of $175 million of placed limit for catastrophe loss events in excess of a $50 million event deductible

2021-2 Excess Catastrophe Reinsurance Contracts

• Placed with Sanders Re II Ltd. which obtained funding from the ILS market to collateralize the contract's limit
• Risk period began December 1, 2021, and terminates on March 31, 2025
• Consist of two tranches
• • Class A (Per Occurrence) provides a $250 million limit in excess of a minimum $3.750 billion retention. While inuring layers are fully intact, the contract would begin to pay subject losses in excess of $5.335 billion
  • Class B (Per Occurrence & Aggregate) provides one limit of $150 million for catastrophe loss events in excess of a $50 million event deductible, during its four-year term which can be used on a per occurrence or an annual aggregate basis
  • • For a qualifying loss occurrence, the contract provides $150 million in reinsurance limits in excess of a minimum $3.750 billion retention. While inuring layers are fully intact, the contract would begin to pay subject losses in excess of $5.598 billion
    • Provides an annual aggregate limit of $150 million between a $2.705 billion to $3.205 billion layer subject to an annual retention of $2.705 billion

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2021-1 Excess Catastrophe Reinsurance Contract

• Placed with Sanders Re II Ltd. which obtained funding from the ILS market to collateralize the contract's limit
• Risk period began June 1, 2021, and terminates on March 31, 2025
• Provides a $250 million per occurrence limit in excess of a minimum $3.750 billion retention. While inuring layers are fully intact, the contract would begin to pay subject losses in excess of $4.460 billion

2020-1 Excess Catastrophe Reinsurance Contracts

• Placed with Sanders Re II Ltd. which obtained funding from the ILS market to collateralize the contract's limit
• Risk period began April 1, 2020, and terminates on March 31, 2024
• Consist of two tranches
• • Class A (Per Occurrence) provides a $150 million limit in excess of a minimum $3.750 billion retention. While inuring layers are fully intact, the contract would begin to pay subject losses in excess of $5.177 billion
  • Class B (Per Occurrence & Aggregate) provides one limit of $100 million for catastrophe loss events in excess of $1 million franchise deductible during its four-year term which can be used on a per occurrence or an annual aggregate basis
  • • For a qualifying loss occurrence, the contract provides $100 million in reinsurance limits in excess of a minimum $3.750 billion retention. While inuring layers are fully intact, the contract would begin to pay subject losses in excess of $5.835 billion
    • Provides an annual aggregate limit of $100 million between a $4.397 billion to $4.497 billion layer subject to an annual retention of $4.397 billion

Traditional Reinsurance Market Single-Year Per Occurrence Excess Agreements

The single-yearPer Occurrence Excess Agreements placed in the traditional reinsurance market in 2022 consist of five contracts, filling capacity around the traditional market and ILS multi-year placements

• Contain comparable contract terms and conditions as the $3.750 billion in excess of a $500 million retention contracts
• Provide combined $640 million in limit, with three contracts providing $465 million of placed limit between $5.939 billion and $6.614 billion of loss and two contracts providing $175 million of placed limit between $3.750 billion and $5.939 billion of loss
• Provide additional gap coverage as the layer shifts down in attachment, subject to the $3.750 billion minimum retention level as lower layer limits are exhausted
• A retention co-participation of 5% for a layer of $2.864 billion in excess of $3.750 billion is deemed in place and inures to the benefit of the contracts
• Contracts do not include a reinstatement of limits

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