Overview

The Allstate Corporation reported net income of $1.19 billion in the first quarter of 2024, a significant improvement from the net loss of $346 million in the first quarter of 2023. This was primarily driven by improved underwriting results in the company’s property-liability insurance business.

The company’s total revenues increased 10.7% to $15.26 billion, largely due to an 11.0% increase in property and casualty insurance premiums earned. Net investment income also increased by $189 million to $764 million, reflecting higher portfolio yields and valuation gains.

Allstate Protection, the company’s largest segment, generated an underwriting profit of $903 million compared to an underwriting loss of $998 million in the prior year quarter. This significant swing reflects increased premiums earned and lower catastrophe losses, partially offset by higher non-catastrophe losses.

Premium Growth

Total premiums written in Allstate Protection increased 11.9% to $13.18 billion, driven by growth in both the Allstate and National General brands across auto, homeowners and other personal lines. New issued applications grew 8.9% to 1.67 million. Auto premiums were positively impacted by rate increases for both brands.

Underwriting Results

Allstate Protection’s combined ratio improved to 93.0 from 108.6, due to lower catastrophe losses and an improved loss ratio. Catastrophe losses decreased by $960 million to $731 million. The auto loss ratio improved 8.0 points but remains elevated at 75.4, reflecting continued pressure from supply chain issues, used car prices, attorney involvement and medical cost inflation. Prior year reserve reestimates were favorable by $155 million, further aiding underwriting results.

Investment Portfolio

The investment portfolio grew to $67.86 billion, with fixed income securities representing 75% of holdings. Overall unrealized net capital losses were $1.06 billion, primarily concentrated in the fixed income portfolio. Net investment income increased 33% to $764 million, reflecting higher market-based income and valuation increases on performance-based investments.

Capital Position

Allstate’s shareholders’ equity stands at $18.64 billion, with a debt-to-capital ratio of 29.9%. The company has strong liquidity including $16.86 billion of cash and highly liquid securities. Financial leverage is modest and credit ratings are stable. The company is well positioned to pursue its Transformative Growth strategy focused on improving customer value.

Outlook

Allstate is focused on restoring auto profitability through pricing sophistication, expense reductions and claims process improvements, while increasing advertising and marketing to drive new business growth. Catastrophe losses are expected to remain elevated. Overall results in 2024 will depend on the profit improvement in auto insurance and investment portfolio performance.