Allstate Reports Third Quarter 2023 Results
Pursuing Health and Benefits divestiture
NORTHBROOK, Ill.----November 01, 2023--
The Allstate Corporation (NYSE: ALL) today reported financial results for the third quarter of 2023.
The Allstate Corporation Consolidated Highlights (1)
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Three months ended Nine months ended
September 30, September 30,
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($ in millions,
except per share % / pts % / pts
data and ratios) 2023 2022 Change 2023 2022 Change
-------------------- -------- -------- --------- ------------ ------------ ---------
Consolidated
revenues $14,497 $13,208 9.8% $ 42,262 $ 37,763 11.9%
-------------------- ------ ------ ----- ------- ------- -----
Net loss applicable
to common
shareholders (41) (685) (94.0) (1,776) (1,091) 62.8
-------------------- ------ ------ ----- ------- ------- -----
per diluted
common share
(2) (0.16) (2.55) (93.7) (6.76) (3.99) 69.4
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Adjusted net income
(loss)* 214 (411) NM (1,290) 112 NM
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per diluted
common share*
(2) 0.81 (1.53) NM (4.91) 0.40 NM
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Return on Allstate common shareholders'
equity (trailing twelve months)
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Net income (loss)
applicable to
common
shareholders (14.7)% (1.5)% (13.2)
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Adjusted net
income (loss)* (9.7)% 4.4% (14.1)
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Common shares
outstanding (in
millions) 261.7 265.9 (1.6)
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Book value per
common share 47.79 58.39 (18.2)
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Consolidated
premiums written
(3) 14,425 13,157 9.6 41,021 37,660 8.9
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Property-Liability
insurance premiums
earned 12,270 11,157 10.0 35,826 32,529 10.1
-------------------- ------ ------ ----- ------- ------- -----
Property-Liability
combined ratio
-------------------- -------- -------- --------- ------------ ------------ ---------
Recorded 103.4 111.6 (8.2) 109.8 105.8 4.0
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Underlying
combined ratio* 91.9 96.4 (4.5) 92.7 93.6 (0.9)
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Catastrophe losses 1,181 763 54.8 5,568 2,333 138.7
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Total policies in
force (in
thousands) 190,089 185,007 2.7
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(1) Prior periods have been recast to reflect the impact of the adoption of
Financial Accounting Standard Board ("FASB") guidance revising the
accounting for certain long-duration insurance contracts in the Health
and Benefits segment.
(2) In periods where a net loss or adjusted net loss is reported, weighted
average shares for basic earnings per share is used for calculating
diluted earnings per share because all dilutive potential common shares
are anti-dilutive and are therefore excluded from the calculation.
(3) Includes premiums and contract charges for the Health and Benefits
segment.
* Measures used in this release that are not based on accounting
principles generally accepted in the United States of America
("non-GAAP") are denoted with an asterisk and defined and reconciled to
the most directly comparable GAAP measure in the "Definitions of
Non-GAAP Measures" section of this document.
NM = not meaningful
“Allstate’s focus on improving profitability while implementing our growth strategy made excellent progress this quarter,” said Tom Wilson, Chair, President and CEO of The Allstate Corporation. “Improved underwriting performance, strong investment income and profits from Protection Services and Health and Benefits generated adjusted net income* of $214 million, or $0.81 per diluted common share in the quarter. Property-Liability earned premium growth of 10.0% and execution of other components of the profit improvement plan improved the underlying combined ratio compared to the prior year quarter. Property-Liability had an underwriting loss in the quarter of $414 million, however, reflecting continued increases in auto insurance loss costs, elevated catastrophe losses and adverse prior year loss development. In response, we continue to raise auto and homeowners insurance prices, improve expense efficiencies, restrict growth in profit challenged states and enhance claims practices. The execution of these comprehensive actions will restore margins to target levels.”
“We are pursuing the sale of Allstate’s Health and Benefits businesses since substantial value can be realized when aligned with a broader set of complementary businesses and product offerings. Allstate’s voluntary workplace benefits business was combined with National General’s group and individual health business, creating a broad-based benefits platform that serves 4.3 million policyholders and generated $240 million of adjusted net income over the last twelve months. This value creation was integral to the National General acquisition plan and now positions the business for additional growth and value enhancement. A sale would likely be completed in 2024.”
“Significant progress has also been made in executing the strategy to increase property-liability market share and broaden protection provided to customers. Providing lowest cost protection requires continued cost reductions which is reflected in a lower expense ratio. Allstate exclusive agent productivity increased, excluding three states where profit improvement actions have reduced new business, and National General is growing through independent agents. Plans to increase growth in states that are achieving target auto insurance margins are now being initiated with further expansion planned for 2024. Allstate Protection Plans continues to grow its embedded protection offerings with U.S. retailers and internationally. Shareholder value will continue to grow with higher profitability, strategic capital allocation and organic long-term growth,” concluded Wilson.
Third Quarter 2023 Results
-- Total revenues of $14.5 billion in the third quarter of 2023 increased
9.8%, or $1.3 billion, compared to the prior year quarter driven by a
$1.1 billion increase in Property-Liability earned premium due to higher
average premiums.
-- Net loss applicable to common shareholders was $41 million in the third
quarter of 2023 compared to $685 million in the prior year quarter, due
to improved Property-Liability underwriting results. Adjusted net income*
was $214 million, or $0.81 per diluted share, in the third quarter of
2023, compared to an adjusted net loss* of $411 million in the prior year
quarter. Restructuring expenses of $87 million were incurred during the
third quarter of 2023 primarily related to the organizational component
of Transformative Growth designed to streamline the organization and
outsource operations.
-- Property-Liability earned premium of $12.3 billion increased 10.0% in
the third quarter of 2023 compared to the prior year quarter, primarily
driven by higher average premiums from rate increases. The $414 million
underwriting loss in the quarter decreased by $878 million compared to
the prior year quarter, due to increased premiums earned and lower
unfavorable prior year reserve reestimates, partially offset by higher
losses.
Property-Liability Results
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Three months ended Nine months ended
September 30, September 30,
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% / pts % / pts
($ in millions) 2023 2022 Change 2023 2022 Change
---------------- -------- -------- --------- -------- -------- --------
Premiums
earned $12,270 $11,157 10.0% $35,826 $32,529 10.1%
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Allstate