Allstate (ALL) Risk Factor Changes

The Company is susceptible to past and future misconduct or fraudulent activities by employees, representative agents, vendors, customers and other third parties.

For additional information, see Note 14 of the consolidated financial statements.

We are involved in various legal actions, including class action litigation challenging a range of company practices; including coverages provided by insurance products, some of which involve claims for substantial or…

The Federal Insurance Office, Financial Stability Oversight Council or other federal government agencies may enact reforms that affect the state insurance regulatory framework.

Regulatory and federal agency reforms may make it more expensive for us to conduct our business

We conduct business outside of the United States, including customer, vendor and business partner relationships, process and information technology operations, and outsourcing of certain business functions.

There is risk that one regulator’s or enforcement authority’s interpretation of a legal issue may change to our detriment.

Personal information is subject to an increasing number of federal, state, local and international laws and regulations regarding privacy and data security, as well as contractual commitments.

Stakeholder expectations on environmental and social issues are continually evolving and not always well defined or readily measurable.

Some existing or potential investors, customers, employees, regulators, and other stakeholders evaluate business practices according to a variety of environmental and social standards and expectations, including those…

Our practices relating to environmental and social matters may not meet stakeholders' expectations

Climate change may also impair our ability to identify and quantify potential losses and offer customers products at an affordable price.

Increased global temperatures affect the occurrence of certain natural events, such as increasing the frequency or severity of wind, tornado, hailstorm and thunderstorm events due to increased convection in the atmosp…

•Trade policy actions, such as tariffs and quotas

Significant operational events may result in the shutdown, disruption, degradation or unavailability of one or more of our or third party systems or facilities, unanticipated problems with disaster recovery processes,…

also be subject to cybersecurity risks and our efforts to review and assess their security controls may not be successful in preventing or mitigating the effects of such events.

These risks may increase in the future as threats become more sophisticated.

We constantly defend against threats to our data and systems, including malware, ransomware and computer virus attacks, unauthorized access, system failures and disruptions.

We use technology algorithms, machine based learning, artificial intelligence and data to perform necessary business functions.

additional outsourcing arrangements or increased reliance on third-party technologies in the future.

Market conditions impact the availability and cost of the reinsurance we purchase.

For additional details, see Note 12 of the consolidated financial statements.

The Allstate Corporation is a holding company with no significant operations.

Catastrophe risk management actions have led us to reduce the size of the homeowners business in certain states, including customers with auto and other personal lines products, and may negatively impact future sales.

Executing our strategy to advance and innovate technology, including leveraging artificial intelligence, has and may continue to impact our workforce as we require new and different skills to achieve our strategic goals.

Technological advancements and innovation are occurring at a rapid pace that may continue to accelerate.

Increasing adoption of newer technologies such as advanced driver assistance systems and autonomous vehicles or changes in business models that increase ride or car sharing could disrupt the demand for products, creat…

Our business may also be adversely impacted by new or changing technologies and new business models affecting the auto insurance industry

Growth and retention may be impacted if customer preferences change and we are unable to effectively adapt our business model, technology and processes, including maintaining competitive products and allowing consumer…

For further discussion of these items, see Regulation section, Indemnification Programs and Note 11 of the consolidated financial statements.

Participation in state-based industry pools, facilities and associations may have a material, adverse effect on the results of operations and financial condition.

The amount and timing of net investment income, capital contributions and distributions from performance-based investments, which primarily include limited partnership interests that are recorded on a lag, can fluctua…

The approaches we use to actively manage exposure to market risk, including rebalancing existing asset or liability portfolios, changing the type of investments purchased in the future and use of derivative instrument…

•Increases in market interest rates, credit spreads or a decrease in liquidity could have an adverse effect on the value of fixed income securities

Our investment portfolios are subject to market risk, including interest rate risk and equity price risk, and declines in credit quality which may adversely affect or create volatility in investment income and cause r…

Alternatively, as the facilities recognize a financial deficit, they could have the ability to assess participating insurers, adversely affecting the results of operations and financial condition.

Regulatory approval of rates, especially during inflationary periods, may restrict rate changes that may be required to achieve targeted levels of profitability and returns on equity.

A regulatory environment that requires rates and products to be approved, can dictate underwriting practices and mandate participation in loss sharing arrangements, may increase the time to market of rate increases, n…

The personal property-liability market is highly competitive with carriers competing through underwriting, advertising, price, customer service, innovation and distribution.

The total number of policyholders affected by the event, the severity of the event and the coverage provided contribute to catastrophe and severe weather losses.

•Homeowners — inflation in the construction industry, building materials and home furnishings, changes in the mix of loss type, changes in building codes and other economic and environmental factors, including short-t…

•Vehicle physical damage — inflation, supply chain disruptions, labor shortages, labor rates, tariffs impacting vehicle and parts prices, increased repair costs for components that have embedded advanced driver assist…

The following factors have and may continue to impact claim severity for auto bodily injury, auto physical damage (including collision and property damage) and homeowners coverages:

2025 Form 10-K Part I - Item 1A.

A significant increase in claim frequency could adversely affect the results of operations and financial condition.

•External factors such as inflation, court decisions, changes in law or litigation imposing unintended coverage or an unexpected increase in the number, size or types of claims, regulatory requirements, changes in dri…

• Evolving environmental and social expectations of stakeholders

•Ability to obtain approval for rate increases or new products

in the law relating to the liability of insurers or tort defendants, plaintiffs targeting insurers in purported class action litigation relating to claims handling and other practices, and rulings concerning the avail…

The federal government has enacted and continues to propose comprehensive regulatory reforms for financial services entities.

impact the business.

Integrated operational risk and return management processes and practices may not be sufficient to timely detect and mitigate operational risks, including those posed by third-party service providers, that could have…

The failure to identify, measure and manage risk effectively, or the failure to restore business operations after a cybersecurity event, could have a material impact on our financial condition or results of operations

Personal information is subject to an increasing number of federal, state, local and international laws and regulations regarding privacy and data security, as

The failure of our or third-party vendors’ business continuity plans to restore operations in a timely manner could result in business disruption and a financial impact

A large-scale pandemic, the occurrence of terrorism, military actions, political and social unrest or other disruptive or destabilizing events may have an adverse effect on our business

•Physical workspaces and return to office requirements

Competition for qualified employees with highly specialized knowledge in areas such as underwriting, data and analytics, technology and cybersecurity, is intense and we have experienced increased competition in hiring…

operations along with vendor contingencies do not sufficiently address a vendor-related business interruption, we may suffer operational impairments and financial losses.

subsidiaries to maintain insurance financial strength ratings.

able to respond effectively or in a timely manner to these changes, including developing and deploying customer-facing technology to address these changing preferences and maintaining competitive technology, which cou…

Changes in technology and customer preferences may impact the ways in which we interact, do business with customers and design products.

Innovations must be implemented in compliance with applicable insurance regulations and in a responsible and compliant manner.

Our ability to successfully deploy new technologies may adversely impact our business

Growth and retention may be impacted if customer preferences change and we are unable to effectively adapt our business model, technology and processes, including maintaining competitive products

Many voluntary benefits contracts are renewed annually and consumer protection plan contracts are generally multi-year, but renewals occur on a rolling basis.

characteristics of existing assets and liabilities or assets expected to be purchased may not perform as intended or expected, resulting in higher than expected realized and unrealized losses.

insurance department.

could increase the severity of claims from catastrophic and severe weather events.

•The average expected level used in pricing

trends may not be predictive of future losses over the longer term.

•External factors such as inflation, court decisions, changes in law or litigation imposing unintended

• Loss cost estimates are complex and losses are unknown at the time policies are sold

•Violations of the Company’s Global Code of Business Conduct, including public-facing statements by employees that violate our policies

Regulatory and federal agency reforms, including potential changes in the role of FEMA in coordinating disaster response, lapses in the authorization or changes in administration of the NFIP and potential discontinuat…

penalties for non-compliance based on consolidated enterprise revenue.

Widespread disruptive or destabilizing events may have an adverse effect on our business

•Ability to develop employees and create new roles that align with our automation priorities and deliver greater levels of customer value

•Hybrid work models, the design and location of physical workspaces and expectations for employee collaboration

Competition for qualified employees with highly specialized knowledge in areas such as underwriting, data and analytics, technology and cybersecurity, is intense.

Enterprise resilience is critical to the ability to restore business operations following a significant operational event

Integrated operational risk and return management processes and practices may not be sufficient to timely detect, mitigate and respond to cybersecurity operational risks, including those posed by the use of third-part…

We continue to identify ways to improve operating efficiency and reduce cost, which may result in

risk in designated areas may depend on our ability to adjust premium rates to fully or partially recover cost.

size and underwriting practices in markets with significant severe weather and catastrophe risk exposure could adversely impact premium growth rates and retention.

Changes in technology and customer preferences may impact the ways in which we invest in marketing and customer acquisition, interact and do business with customers and design products.

may materially adversely affect our operations or ability to write business profitably in one or more jurisdictions.

Innovations must be implemented in an ethical and responsible manner, in compliance with applicable laws and regulations.

Our competitive position depends on our ability to successfully deploy advanced technologies

Regulatory requirements affect the amount of

We also sell and service NFIP flood policies as an agent of FEMA.

Regulatory restrictions or potential delays in the regulatory approval process for new products and features or the use of advanced technologies, non-traditional data sources, or large language models may impact our a…

covered property, geographic concentration and the number of policyholders exposed to certain events could increase the severity of claims from catastrophic and severe weather events.

other factors can lead to changes in claim frequency.

• Complexity and uncertainty of loss cost estimates and reserves