Allstate Profit More Than Quadruples on Improved Underwriting Results
The insurer's net income reached $2.4 billion in the first quarter as its combined ratio improved 15.4 points to 82.0.
Allstate Corp. (ALL) reported first-quarter net income of $2.4 billion, or $9.25 a diluted share, a more than fourfold increase from $566 million, or $2.11 a share, a year earlier, as sharply lower catastrophe losses and prior-year reserve releases drove a dramatic improvement in underwriting profitability.
The results marked a significant inflection for the property-casualty insurer, which had been navigating elevated catastrophe exposure and rising loss costs. Adjusted net income nearly tripled to $2.8 billion, or $10.65 a share, from $949 million, or $3.53 a share, in the year-ago period. Consolidated revenues rose 3.0% to $16.9 billion.
The Property-Liability segment, which accounts for the bulk of Allstate's business, recorded a combined ratio of 82.0, improving 15.4 points from 97.4 in the first quarter of 2024. The underlying combined ratio, which strips out catastrophe losses and prior-year reserve development, improved 2.8 points to 80.3. Earned premiums in the segment grew 5.5% to $14.8 billion, though written premiums grew only 2.3%, reflecting affordability actions and lower average premiums on new policies.
Homeowners insurance was the standout, swinging to an underwriting profit of $685 million from a loss of $451 million a year ago, largely because catastrophe losses fell to $1.0 billion from $1.8 billion, a 42.7% decline that reflected the absence of the prior year's California wildfire losses. The homeowners recorded combined ratio improved 28.8 points to 83.5, while the underlying ratio improved 1.9 points to 60.5 on higher average premiums. Earned premiums in homeowners grew 13.9%, and policies in force rose 2.5%.
Auto insurance profitability also improved, with the recorded combined ratio falling 9.4 points to 81.9, aided by $838 million in prior-year reserve releases that contributed 8.8 points of improvement. The underlying auto combined ratio improved 1.7 points to 89.5. Auto policies in force grew 2.6%, with new business up 9.4% on expanded distribution and marketing, though written premiums were flat at $9.85 billion as higher policy counts were offset by lower average premiums.
Total policies in force across the company reached 212 million in the first quarter, up 2.5% from a year earlier. Net investment income increased 9.8% to $938 million, driven by growth in market-based income and higher private-equity and real-estate returns. Protection Services revenues grew 7.2% to $922 million, led by a 13.5% gain in Protection Plans, though Arity revenue declined 26.6% on lower lead-generation activity and its adjusted net loss widened.
Trailing twelve-month return on common shareholders' equity reached 48.4%, up from 21.4% a year ago, while book value per common share climbed 52.2% to $113.52. Allstate continued to shrink its share count, repurchasing stock to reduce outstanding shares by 2.8% to 257.8 million. The company also lengthened fixed-income duration to 5.7 years and increased economic capital allocated to its investment portfolio, reflecting higher public-equity exposure.
Allstate named Christian Lown as its next chief financial officer, effective Aug. 3, succeeding Jess Merten, who moved to president of Property-Liability in October 2024, and interim CFO John Dugenske.