2024 Financial Highlights

Overview The Allstate Corporation had a strong financial performance in 2024, with consolidated net income applicable to common shareholders of $4.55 billion, compared to a net loss of $316 million in 2023. This was primarily due to improved underwriting results from increased earned premium and better loss trends across the business. Return on average Allstate common shareholders’ equity was 25.8% in 2024, up from (2.0)% in 2023.

Total revenue increased 12.3% to $64.11 billion in 2024, driven by premium rate increases and higher net investment income. Net investment income rose $614 million to $3.09 billion, benefiting from portfolio repositioning into higher-yielding fixed income securities and increased investment balances.

Allstate’s total investments reached $72.61 billion as of December 31, 2024, up from $66.68 billion a year earlier. Shareholders’ equity grew to $21.44 billion, up from $17.77 billion at the end of 2023, primarily due to the net income generated during the year.

Segment Highlights Allstate Protection The Allstate Protection segment reported underwriting income of $3.15 billion in 2024, compared to an underwriting loss of $2.09 billion in 2023. This improvement was driven by increased premiums earned, favorable reserve reestimates, and lower losses, partially offset by higher advertising costs.

Premiums written increased 11.1% to $55.93 billion, reflecting higher premiums in both auto and homeowners insurance. Rate increases of 10.4% were implemented in 55 locations in 2024, resulting in a total premium impact of 7.5%. Auto insurance premiums written grew 9.8%, while homeowners premiums written increased 14.6%.

The auto insurance loss ratio decreased 10.1 points in 2024 compared to 2023, driven by increased earned premiums and lower non-catastrophe losses. Homeowners loss ratio decreased 17.3 points, primarily due to increased premiums earned and lower losses.

Catastrophe losses decreased 11.9% or $672 million in 2024 compared to 2023, primarily due to lower losses per event for wind and hail events, partially offset by higher losses from hurricanes. The expense ratio increased 0.7 points, mainly due to higher advertising costs.

Protection Services The Protection Services segment reported adjusted net income of $217 million in 2024, up from $106 million in 2023. This increase was driven by premium growth at Allstate Protection Plans, improved claim severity at Allstate Roadside, higher lead sales revenue at Arity, and both growth and lower costs at Allstate Identity Protection.

Premiums and other revenues increased 15.7% or $401 million to $2.96 billion in 2024, primarily due to growth at Allstate Protection Plans. Policies in force increased 9.3% to 166.7 million.

Allstate Health and Benefits Adjusted net income for the Allstate Health and Benefits segment was $186 million in 2024, down from $242 million in 2023. The decrease was primarily due to increased benefit utilization across all lines of business. Premiums and contract charges totaled $1.92 billion in 2024, up 4.1% from 2023, driven by growth in individual health and group health, partially offset by a decline in employer voluntary benefits.

Income Taxes The effective tax rate was 20.2% in 2024, lower than the federal statutory rate of 21%, primarily due to tax benefits from credits, tax-exempt interest income, and share-based payments, offset by state income tax expense. In 2023, the effective tax rate was 38.8%, higher than the statutory rate due to changes in valuation allowance and uncertain tax positions.

Outlook and Risks Macroeconomic factors, such as U.S. government policies, global conflicts, supply chain disruptions, and labor shortages, have and may continue to impact Allstate’s results. The company has disclosed these risks in its filings.

Allstate also announced two significant dispositions in 2024 and 2025 related to its employer voluntary benefits and group health businesses. These transactions are expected to result in gains that will be recognized upon closing, subject to purchase price adjustments and other factors.

Analysis and Outlook

Allstate’s strong financial performance in 2024 was driven by successful execution of its comprehensive plan to improve auto insurance profitability and continued progress on its Transformative Growth initiative. The company was able to grow its customer base, achieve target economic returns on capital, and make substantial improvements in customer value, access, and technology.

The Allstate Protection segment was the primary driver of the company’s improved underwriting results. The segment was able to increase premiums written through rate actions and growth in both auto and homeowners insurance, while also benefiting from favorable reserve reestimates and lower non-catastrophe losses. This helped offset the impact of higher advertising costs.

The Protection Services segment also contributed to Allstate’s overall success, with robust growth in premiums and policies in force, as well as improved profitability across its various businesses. This demonstrates the value of Allstate’s diversified portfolio of insurance and protection products.

However, the Allstate Health and Benefits segment saw a decline in adjusted net income due to increased benefit utilization. This highlights the importance of Allstate’s focus on managing costs and maintaining underwriting discipline across all its business lines.

Looking ahead, Allstate faces several macroeconomic risks that could impact its financial performance, including government policies, global conflicts, supply chain issues, and labor shortages. The company has taken steps to manage these risks, such as implementing rate increases and adjusting underwriting guidelines in certain geographies. Additionally, the planned dispositions of the employer voluntary benefits and group health businesses will allow Allstate to focus on its core property-liability and protection services operations.

Overall, Allstate’s strong 2024 results demonstrate the effectiveness of its strategic initiatives and the resilience of its diversified business model. The company’s focus on improving profitability, expanding customer access, and investing in technology should position it well for continued success in the future. However, Allstate will need to remain vigilant in managing the evolving macroeconomic landscape and adapting its operations accordingly.