• Revenue: $16.5 billion in Q1, up 7.8% compared to Q1 2024.
• Net Income: $566 million in Q1.
• Adjusted Net Income: $949 million, or $3.53 per diluted share.
• Adjusted Net Income Return on Equity: 23.7% over the last 12 months.
• Underwriting Income: $360 million in Property-Liability business.
• Combined Ratio: 97.4%, 4.4 points above the prior year quarter.
• Auto Combined Ratio: 91.3 in Q1.
• Homeowners Combined Ratio: Targeted low 60s range, 10-year recorded combined ratio of 91.5.
• Catastrophe Losses: $3.3 billion in gross catastrophe losses in Q1.
• Reinsurance Recoveries: $1.1 billion, primarily due to California wildfires.
• Policies in Force: 37.7 million total, with 25.1 million auto and 7.5 million homeowners.
• Auto New Business Applications: 31.2% increase over prior year.
• Homeowners New Business Growth: 10% increase in Q1.
• Protection Services Adjusted Net Income: $162 million in the past 12 months.

• Warning! GuruFocus has detected 1 Warning Sign with FMCC.

Release Date: May 01, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Allstate Corp (NYSE:ALL) reported a 7.8% increase in revenues for the first quarter, reaching $16.5 billion.
• The company achieved a net income of $566 million and an adjusted net income of $949 million, translating to $3.53 per diluted share.
• Allstate Corp (NYSE:ALL) has implemented a $1.5 billion share repurchase program and increased its quarterly dividend to $1 per share.
• The company has made significant progress in its transformative growth strategy, with new Allstate branded auto insurance available in 36 states.
• Allstate Corp (NYSE:ALL) has a well-diversified investment portfolio, which has been designed for resiliency in varying market conditions.

Negative Points

• The Property-Liability business experienced a combined ratio of 97.4%, which was 4.4 points higher than the prior year quarter due to $3.3 billion in gross catastrophe losses.
• Retention rates have been a challenge, with the company focusing on improving customer interactions and affordability to address this issue.
• The company faced significant catastrophe losses from California wildfires and severe weather events, impacting underwriting income.
• There is uncertainty regarding the impact of tariffs on auto insurance costs, which could lead to increased severity and potential price adjustments.
• The competitive environment in the personal auto market remains rational, but there is pressure from competitors who are also focusing on growth.

Q & A Highlights

Q: How is the competition in the personal auto market affecting Allstate, and are you seeing any aggressive pricing from competitors? A: Thomas Wilson, CEO, noted that the rate of increases in auto insurance has decreased compared to previous years, indicating that companies are operating at desired profitability levels. Mario Rizzo, President of Property-Liability, added that while competition has leaned into growth due to improved margins, the market remains rational. Allstate's transformative growth strategy is helping them compete effectively.

Q: With the recent improvement in policies in force (PIF), do you expect this trend to continue? A: Thomas Wilson, CEO, explained that growth requires both writing more new business and retaining existing customers. New business levels have been sustained due to competitive pricing and advertising. Retention has stabilized, and efforts like the S.A.V.E. program aim to further improve it by enhancing customer interactions and affordability.

Q: Can the current level of new applications be maintained, or is it influenced by increased shopping? A: Thomas Wilson, CEO, stated that the current new business levels are consistent with the end of last year, and Allstate is comfortable with this pace. The rollout of new products and expanded distribution channels are expected to drive further growth, although not necessarily at the same high percentage increase.

Q: How is Allstate managing its capital position and share repurchase program amid market volatility? A: Thomas Wilson, CEO, and Jesse Merten, CFO, emphasized that Allstate is in a strong capital position, with sufficient resources to support growth and shareholder returns. The $1.5 billion share repurchase program is ongoing, and the company maintains a balanced approach to capital allocation, focusing on growth and returning cash to shareholders.

Q: How is Allstate addressing retention challenges, and what impact does the S.A.V.E. program have? A: Mario Rizzo, President of Property-Liability, explained that retention remains stable, and the S.A.V.E. program targets reducing customer defections by improving affordability and customer experience. Bundling and a stable rate environment also contribute to enhancing retention.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.