THE ALLSTATE CORPORATION The Allstate Corporation
First Quarter 2024 Earnings Presentation
05.02.2024
Forward-looking statements and non-GAAP financial information
This presentation contains forward-looking statements and information. This presentation also contains non- GAAP measures that are denoted with an asterisk. You can find the reconciliation of those measures to GAAP measures within our most recent earnings release, investor supplement or on our website, www.allstateinvestors.com, under the "Financials" link.
Additional information on factors that could cause results to differ materially from this presentation is available in the 2023 Form 10-K, Form 10-Q for March 31, 2024, our most recent earnings release, and at the end of these slides. These materials are available on our website, www.allstateinvestors.com, under the "Financials" link.
The Allstate Corporation 2024 | PAGE 1 |
Allstate's Strategy To Create Shareholder Value
Increase Personal
Property-Liability Market Share
Leveraging Allstate brand,
customer base and capabilities
Expand Protection
Services
First quarter 2024 highlights
- Net income of $1.2 billion in the first quarter
- Successfully executing auto insurance profit improvement plan
- Homeowners insurance generating attractive returns; first quarter benefited from fewer catastrophe losses
- Increased investment income reflects 2022- 2023 duration extensions and higher fixed income yields
- Profitable growth in Protection Services
- Taking broad approach to increasing shareholder value
- Improved auto insurance profitability
- Growth in auto and homeowners insurance policies in force
- Proactive risk and return management of the investment portfolio
- Expand Protection Services
- Sale of Health and Benefits businesses
The Allstate Corporation 2024 | PAGE 2 |
Broad-Based Profit Improvement
Property-Liability premiums increased 10.9%, or $1.3 billion, | |||||
driven by rate increases | |||||
Three months ended | |||||
March 31 | |||||
($ in millions, except per share data and ratios) | 2024 | 2023 | Change | ||
Total revenues | $15,259 | $13,786 | 10.7% | ||
Property-Liability insurance premiums | 12,900 | 11,635 | 10.9% | ||
Accident and health insurance premiums and contract charges | 478 | 463 | 3.2% | ||
Net investment income | 764 | 575 | 32.9% | ||
Net gains (losses) on investments and derivatives | (164) | 14 | NM | ||
Income applicable to common shareholders: | |||||
Net income (loss) | 1,189 | (346) | NM | ||
Adjusted net income (loss)* | Benefited from higher fixed income | 1,367 | (342) | NM | |
and performance-based results | |||||
Per diluted common share(1) | |||||
Net income (loss) | 4.46 | (1.31) | NM | ||
Adjusted net income (loss)* | 5.13 | (1.30) | NM |
Return on Allstate common shareholders' equity (trailing twelve months) Net income (loss) applicable to common shareholders
Adjusted net income (loss)*
Reflects improved Property-Liability underlying
profitability and lower catastrophe losses
7.6% (13.0)% 20.6 pts
11.3% (6.7)% 18.0 pts
NM = Not meaningful
- In periods where a net loss or adjusted net loss is reported, weighted average shares for basic earnings per share is used for calculating diluted earnings per share because all dilutive potential common shares are anti-dilutive and are therefore excluded from the calculation
The Allstate Corporation 2024 | PAGE 3 |
Property-Liability Generated An Attractive Combined Ratio
Earned premium increase driven by higher auto and homeowners insurance rates, partially offset by a decline in policies in force
Property-Liability statistics
($ in millions)
Property-Liability combined ratio components
Premiums Earned
Policies in Force (in thousands)
Catastrophe Losses
Underwriting Income (Loss)
(% to premiums earned)
Loss Ratio
Expense Ratio
Three months ended
March 31
2024 | Var to PY |
(%/$) | |
12,900 | 10.9% |
37,693 | (1.4)% |
- (960)
- 1,899
72.4 (15.1) pts
20.6 (0.5) pts
92.0
7.3
-0.3
85.0
87.6
7.9
79.4
0.3
95.9
8.3
1.4
86.2
106.6
7.1
4.4
95.1
104.5
11.6
1.7
91.2
108.6
14.5
93.0
0.8
5.7 0.4
93.3
86.9
Combined Ratio
Catastrophe Loss Ratio
Underlying Combined Ratio*
93.0 (15.6) pts
5.7 (8.8) pts
86.9 (6.4) pts
2019 | 2020 | 2021 | 2022 | 2023 | Q1 2023 | Q1 2024 |
Underlying combined ratio* | PYRR and APIA(1) | Catastrophe losses | ||||
Lower catastrophe losses due to mild weather
conditions in the quarter - 1.4 points below the 10-year
average from 2014-2023
Underlying combined ratio* improvement reflects higher average
premium, moderating loss costs and improved efficiency
(1) Reflects combined ratio impact of non-catastrophe prior year reserve reestimates (PYRR) and amortization of purchased intangibles (APIA)
The Allstate Corporation 2024 | PAGE 4 |
Auto Insurance Margins Improved
Higher average premium from implemented rates and expense efficiencies outpacing moderating underlying loss costs per policy in 2024
Allstate Protection auto underlying combined ratio* - adjusted 2022 and 2023 quarterly results(1) for each respective year-end severity level
103.2 104.2 103.2 103.9
101.0 100.7 99.9
98.2
95.1
Allstate Protection auto premium and underlying loss and expense* per policy
Q1 2024 | Var PY | |
Annualized Avg. Premium: | $1,393 | 13.3% |
Avg. Underlying Loss and Expense(1)*: | $1,325 | 6.7% |
$1,450 | 1,393 | |
$1,350 | ||
1,242 | 1,325 | |
$1,250 | ||
1,229 | ||
$1,150 | ||
$1,050 |
Underlying Combined Ratio* - as reported
Combined Ratio
Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 |
2022 | 2023 | 2024 | ||||||
98.8 | 102.1 | 104.0 | 109.2 | 102.6 | 102.2 | 98.8 | 96.4 | 95.1 |
102.1 | 107.9 | 117.4 | 112.6 | 104.4 | 108.3 | 102.1 | 98.9 | 96.0 |
$950 | ||||||||||||
$850 | Difference | |||||||||||
83 | 165 | 80 | -35 | -47 | -37 | -47 | -13 | -9 | 1 | 24 | 68 | |
Year-end | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 | |||
2019 | 2020 | 2021 | 2022 | 2023 | 2024 | |||||||
2022 and 2023 Underlying combined ratio* (at full year average severity level) 2024 Underlying combined ratio*
Annualized Avg. Premium Avg. Underlying Loss and Expense(1)*
(1) Adjusts quarterly underlying combined ratios* and underlying losses per policy to reflect year-end current report year ultimate severities for 2022 and 2023 | The Allstate Corporation 2024 | PAGE 5 |
Auto Insurance Underlying Profitability Attractive in Approximately Two-Thirds of Markets
Continuing to pursue and implement
necessary rate increases
Allstate brand auto - Implemented rate increases
Q1 | Q2 | Q3 | Q4 |
16.9% | 16.4% | ||
6.1% | 6.9% | ||
4.7% | 2.0% | ||
2.5% | 5.8% | ||
3.6% | 1.7% | 2.4% | |
2022 | 2023 | 2024 |
(1) Reflects 50 U.S. states plus District of Columbia for Allstate brand auto, excluding Esurance and Canada
Allstate brand auto countrywide premium distribution by underlying combined ratio* segment(1)
100% | ||||||||||
12% | ||||||||||
90% | ||||||||||
35% | 35% | 26% | >100 | |||||||
80% | ||||||||||
70% | 71% | 10% | ||||||||
60% | ||||||||||
96-100 | ||||||||||
50% | 88% | 100% | 31% | |||||||
40% | ||||||||||
65% | 64% | <96 | ||||||||
30% | ||||||||||
20% | ||||||||||
21% | 34% | |||||||||
10% | ||||||||||
8% | ||||||||||
0% | ||||||||||
2017-2019 | 2020 | 2021 | 2022 | 2023 | 2024-Q1 | |||||
Proportion of premium from states achieving or approaching targeted
underlying margins nearly doubled compared to year-end 2023
The Allstate Corporation 2024 | PAGE 6 |
Auto Policies In Force Decline For Allstate Brand While National General Increases
Rate of decline improved in the first quarter compared to year end 2023
Allstate Protection auto policies in force
(in millions)
-2.0%
-5.2%
25.7 | 25.2 | |||||||
21.1 | 20.0 | |||||||
+12.6% | ||||||||
4.6 | 5.2 | |||||||
Protection Auto | Allstate brand | National General | ||||||
First quarter | ||||||||
2023 | 2024 | |||||||
Allstate brand auto renewal ratio
- Renewal ratio of 86.0 increased 0.3 points in the first quarter compared to the prior year
Allstate brand auto new issued applications
- New business increased 7% to prior year quarter driven by advertising investments in rate adequate states and increased Allstate agent productivity and direct sales
National General growth
- Non-standardauto insurance and Custom360SM
The Allstate Corporation 2024 | PAGE 7 |
Homeowners Insurance Generates Strong Returns
Allstate Protection homeowners combined ratio components
2014-2023 Average: ~92 | 119.0 | |||||||
106.8 | ||||||||
93.6 | 90.0 | 96.7 | 93.6 | |||||
90.6 | 88.4 | 51.4 | ||||||
82.1 | ||||||||
39.5 | ||||||||
28.0 | 23.3 | |||||||
29.4 | ||||||||
29.5 | 24.8 | 27.7 | 16.6 | |||||
61.1 | 64.2 | 63.6 | 62.3 | 68.7 | 70.3 | 67.3 | 67.6 | 65.5 |
2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | Q1 | Q1 |
2023 | 2024 |
Underlying combined ratio* | Catastrophe losses, PYRR and APIA(1) |
Includes first quarter catastrophe losses of $555 million which were below prior year quarter by $894 million
(1) Reflects combined ratio impact of catastrophe losses, prior year reserve reestimates and amortization of purchased intangibles | The Allstate Corporation 2024 | PAGE 8 |
Property-Liability Growth Opportunities
Key Growth Levers:
Near-Term Focus Areas:
Improve Customer Retention
Reduce New Business Restrictions
Increase Advertising
Transformative Growth
- Auto and homeowners insurance renewal ratios stabilizing following decline due to significant price increases in 2022-2023
- Unwound auto underwriting restrictions in states representing about 75% of Allstate brand auto countrywide premium
- Significant increases in Allstate brand advertising investment
- Improved competitive price position due to expense reductions
- Expand customer access
- Increase Allstate exclusive agent productivity
- Enhanced Allstate direct distribution capabilities o Expand independent agent product offering
- New affordable, simple and connected auto and homeowners insurance offerings
- New technology ecosystem improves customer quoting experience
The Allstate Corporation 2024 | PAGE 9 |
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Disclaimer
The Allstate Corporation published this content on 01 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 02 May 2024 11:52:36 UTC.
