Allstate Q3 2022 Earnings Report
Key Takeaways
Allstate Corporation reported a net loss of $694 million for Q3 2022, compared to a net income of $508 million in the prior year quarter. The loss was primarily due to an underwriting loss and equity valuation declines. Revenues increased to $13.2 billion, driven by growth in Property-Liability earned premiums and Protection Services revenue. The company is raising insurance prices to reflect cost inflation and plans to reduce personal lines insurance in states with unacceptable margins.
Total revenues increased by 5.8% to $13.2 billion, driven by a 9.8% increase in Property-Liability earned premium and a 7.2% increase in Protection Services revenue.
Net loss applicable to common shareholders was $694 million, compared to a net income of $508 million in the prior year quarter.
Adjusted net loss was $420 million, or $1.56 per diluted share, compared to adjusted net income of $217 million in the prior year quarter.
The Property-Liability combined ratio was 111.6, 6.3 points higher than the prior year quarter, resulting in an underwriting loss of $1.3 billion.
Allstate
Allstate
Allstate Revenue by Segment
Forward Guidance
Allstate is implementing a multi-faceted program to restore Property-Liability margins to targeted levels. This includes continued increases in auto and home insurance prices, reducing expenses and adapting claims settlement practices to a high inflation environment. Growth is being reduced in states and lines of business that are underperforming.
Positive Outlook
- Continued increases in auto and home insurance prices.
- Reducing expenses.
- Adapting claims settlement practices to a high inflation environment.
- Growth is being reduced in states and lines of business that are underperforming.
- The company is taking a balanced approach to serve customers while generating appropriate returns for investors.
Challenges Ahead
- The company will no longer write new homeowners and condominium business in California.
- Commercial insurance is being exited in five states.
- Coverage to transportation network companies will not be offered unless it utilizes telematics-based pricing.
- Additional actions are likely in personal auto insurance.
- The company is facing a challenging inflationary environment.
Revenue & Expenses
Visualization of income flow from segment revenue to net income