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Sep 30, 2024
Allstate Q3 2024 Earnings Report
Allstate demonstrated strong financial performance driven by revenue growth and improved underwriting results.
Key Takeaways
Allstate reported strong third-quarter results with a significant increase in net income and adjusted net income, driven by improved Property-Liability underwriting results and revenue growth. The company's focus on near-term performance and long-term growth strategies contributed to these positive outcomes.
Total revenues increased by 14.7% compared to the prior year quarter, driven by increased Property-Liability earned premium.
Net income applicable to common shareholders was $1.2 billion, a significant improvement from the prior year quarter's net loss.
The Property-Liability combined ratio improved to 96.4, reflecting higher average earned premiums and improved underlying loss experience.
Allstate Protection auto insurance results showed improved profitability due to successful execution of a comprehensive plan to restore margins.
Allstate
Allstate
Forward Guidance
Allstate is focused on increasing market share in personal Property-Liability and expanding protection solutions. The divestiture of the Employer Voluntary Benefits business is expected in the first half of 2025.
Positive Outlook
- Allstate Protection auto insurance new business sales increased 26% with increased advertising and expanded distribution.
- Homeowners insurance margins improved and policies in force are 2.5% higher than the prior year.
- Protection Plans expanded internationally and acquired Kingfisher to enhance mobile device protection capabilities.
- Operational excellence and implementation of the growth strategy will continue to create shareholder value.
- Fixed income duration was extended and public equity holdings significantly lowered to optimize risk adjusted returns on capital.
Challenges Ahead
- Retention losses reflecting the impact of significant price increases over the last several years offset this growth resulting in a decline in auto policies in force.
- Hurricane Milton impacted customers shortly after the quarter with estimated losses of approximately $100 million.
- Allstate Roadside revenue decreased 23.2% compared to the prior year quarter reflecting the discontinuance of a large unprofitable account.
- Adjusted net income of Health and Benefits decreased $32 million lower than prior year quarter attributable to increased benefit utilization across all businesses.
- Performance-based investment income decreased $43 million compared to the prior year quarter primarily reflecting lower real estate investment results.