The Allstate Corporation (NYSE: ALL) today reported financial
results for the fourth quarter of 2024.
The Allstate Corporation
Consolidated Highlights
Three months ended
December 31,
Twelve months ended
December 31,
($ in millions, except per share data
and ratios)
2024
2023
% / pts
Change
2024
2023
% / pts
Change
Consolidated revenues
$
16,506
$
14,832
11.3
%
$
64,106
$
57,094
12.3
%
Net income (loss) applicable to common
shareholders
1,899
1,460
30.1
%
4,550
(316
)
NM
per diluted common share (1)
7.07
5.52
28.1
%
16.99
(1.20
)
NM
Adjusted net income*
2,062
1,541
33.8
%
4,906
251
NM
per diluted common share*
7.67
5.82
31.8
%
18.32
0.95
NM
Return on Allstate common shareholders’
equity (trailing twelve months)
Net income (loss) applicable to common
shareholders
25.8
%
(2.0
)%
27.8
Adjusted net income (loss)*
26.8
%
1.5
%
25.3
Common shares outstanding (in
millions)
265.0
262.5
1.0
%
Book value per common share
$
72.35
$
59.39
21.8
%
Consolidated premiums written
(2)
$
15,055
$
13,835
8.8
%
$
60,644
$
54,856
10.6
%
Property-Liability insurance premiums
earned
13,933
12,601
10.6
%
53,866
48,427
11.2
%
Property-Liability combined
ratio
Recorded
86.9
89.5
(2.6
)
94.3
104.5
(10.2
)
Underlying combined ratio*
83.0
86.9
(3.9
)
84.6
91.2
(6.6
)
Catastrophe losses
$
410
$
68
NM
$
4,964
$
5,636
(11.9
)%
Total policies in force (in
thousands)
208,345
194,416
7.2
%
(1)
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.
(2)
Includes premiums written for the Allstate
Protection and Protection Services segments and 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
Fourth Quarter 2024 Results
- Total revenues of $16.5 billion in the fourth quarter of 2024
were $1.7 billion or 11.3% higher than the prior year quarter.
- Net income applicable to common shareholders was $1.9 billion
in the fourth quarter of 2024 compared to $1.5 billion in the prior
year quarter, as Property-Liability underwriting results
improved.
- Adjusted net income* was $2.1 billion, or $7.67 per diluted
share, compared to $1.5 billion in the prior year quarter.
Full Year 2024 Results
- Total revenues were $64.1 billion, 12.3% above the prior
year.
- Net income applicable to common shareholders was $4.6 billion
compared to a loss in 2023.
- Adjusted net income* was $4.9 billion generating an adjusted
net income return on equity* of 26.8%.
“Allstate finished 2024 with another excellent quarter both
financially and strategically,” said Tom Wilson, Chair, President
and CEO of The Allstate Corporation. “Fourth quarter revenue
reached $16.5 billion and net income was $1.9 billion, 11.3% and
30.1% above the prior year quarter, respectively. Operational
excellence resulted in solid profitability in auto and homeowners
insurance and Protection Services. Adjusted net income* for the
full year was $4.9 billion which represents an adjusted net income
return on equity* of 26.8%.”
“This performance reflects successful risk and return
management. Investment income increased to $3.1 billion in 2024,
24.8% above the prior year due to repositioning into higher
yielding fixed income securities, portfolio growth and stronger
performance-based results. Homeowners insurance generated $1.3
billion of underwriting income for the year while covering $3.7
billion of customers’ catastrophe losses, reflecting an
industry-leading business model. We rapidly supported customers
impacted by the January California wildfires and related losses are
expected to be about $1.1 billion, pre-tax, net of reinsurance,
reflecting a decision to reduce market share beginning in 2007 and
a comprehensive reinsurance program.”
“Progress was also made in executing the strategy to grow
personal Property-Liability market share, expand Protection
Services and sell the Health and Benefits businesses. Allstate has
a stronger competitive position, broader distribution and
significantly larger customer base since undertaking Transformative
Growth five years ago,” continued Wilson. “In the
Property-Liability business, the underwriting expense ratio has
been reduced, new Affordable, Simple and Connected products brought
to market and distribution significantly expanded in the direct and
independent agent channels. Total Property-Liability policies in
force are expected to grow in 2025 as auto insurance policy renewal
rates improve and new business continues to increase. Protection
Plans revenues reached nearly $2.0 billion for the year, increasing
policies in force by 60% since 2019 to 160 million with adjusted
net income of $157 million. The decision to maximize shareholder
value by combining the Health and Benefits businesses with
companies that have greater strategic alignment also was successful
with two of the three businesses now under contract to be sold for
$3.25 billion,” concluded Wilson.
- Property-Liability earned premiums of $13.9 billion
increased 10.6% in the fourth quarter of 2024 compared to the prior
year quarter, primarily driven by higher average premiums.
Underwriting income of $1.83 billion improved compared to $1.33
billion in the prior year quarter.
Property-Liability
Results
Three months ended
December 31,
Twelve months ended
December 31,
($ in millions)
2024
2023
% / pts
Change
2024
2023
% / pts
Change
Premiums earned
$
13,933
$
12,601
10.6
%
$
53,866
$
48,427
11.2
%
Premiums written
13,757
12,640
8.8
%
55,926
50,347
11.1
%
Policies in force (in
thousands)
37,530
37,768
(0.6
)%
Underwriting income (loss)
1,832
1,325
38.3
%
3,080
(2,184
)
NM
Recorded combined ratio
86.9
89.5
(2.6
)
94.3
104.5
(10.2
)
Underlying combined ratio*
83.0
86.9
(3.9
)
84.6
91.2
(6.6
)
- Premiums written increased 8.8% compared to the prior year
quarter driven by rate increases, partially offset by a decrease in
policies in force of 0.6%.
- Property-Liability combined ratio was 86.9 for the quarter
which was 2.6 points better than the prior year primarily due to
higher average earned premiums and improved loss experience more
than offsetting increased advertising investment and higher
catastrophe losses.
- Allstate Protection auto insurance results reflect
successful execution of the comprehensive plan to restore
margins.
Allstate Protection Auto
Results
Three months ended
December 31,
Twelve months ended
December 31,
($ in millions, except ratios)
2024
2023
% / pts
Change
2024
2023
% / pts
Change
Premiums earned
$
9,348
$
8,566
9.1
%
$
36,475
$
32,940
10.7
%
Premiums written
9,116
8,570
6.4
37,296
33,958
9.8
Underwriting income (loss)
603
93
NM
1,810
(1,109
)
NM
Policies in force (in
thousands)
24,936
25,283
(1.4
)
Recorded combined ratio
93.5
98.9
(5.4
)
95.0
103.4
(8.4
)
Underlying combined ratio*
93.0
96.4
(3.4
)
93.4
99.9
(6.5
)
- Earned premiums grew 9.1% compared to the prior year quarter.
The increase was driven by rate increases, partially offset by a
decline in policies in force of 1.4%. Policies in force grew
compared to prior year in 31 states, representing approximately 60%
of total auto written premiums.
- Auto rate increases result in an annualized premium impact of
0.9% in the quarter and 7.5% in 2024.
- The recorded auto insurance combined ratio of 93.5 in the
fourth quarter of 2024 was 5.4 points below the prior year quarter,
reflecting higher average earned premiums, improved underlying loss
experience and favorable prior year reserve reestimates. The
severity estimated for claims reported in the first three quarters
of the year moderated in the fourth quarter which had a favorable
impact on quarterly results. Excluding this impact, the fourth
quarter combined ratio would have been 95.0.
- Prior year non-catastrophe reserve reestimates were favorable
$35 million in the fourth quarter, reflecting favorable reserve
development, primarily driven by physical damage coverages.
- Allstate Protection homeowners insurance generates
attractive returns and is growing policies in force.
Allstate Protection Homeowners
Results
Three months ended
December 31,
Twelve months ended
December 31,
($ in millions, except ratios)
2024
2023
% / pts
Change
2024
2023
% / pts
Change
Premiums earned
$
3,548
$
3,077
15.3
%
$
13,360
$
11,739
13.8
%
Premiums written
3,624
3,144
15.3
14,416
12,584
14.6
Underwriting income (loss)
1,070
1,169
(8.5
)
1,319
(803
)
NM
Policies in force (in
thousands)
7,511
7,338
2.4
Recorded combined ratio
69.8
62.0
7.8
90.1
106.8
(16.7
)
Catastrophe Losses
$
315
$
21
NM
$
3,717
$
4,537
(18.1
)%
Underlying combined ratio*
59.5
61.3
(1.8
)
62.5
67.3
(4.8
)
- Earned premiums increased by 15.3% compared to the prior year
quarter, primarily reflecting higher average premium and policies
in force growth of 2.4%.
- A 12.8% increase in homeowners insurance average gross written
premium compared to the prior year quarter was due to approved rate
increases and inflation in insured home replacement costs.
- Catastrophe losses of $315 million in the quarter increased
$294 million compared to the prior year quarter mostly attributed
to Hurricane Milton and reestimates for Hurricane Helene.
- The recorded homeowners insurance combined ratio of 69.8 was
7.8 points above the fourth quarter of 2023 reflecting increased
catastrophe losses partially offset by favorable underlying loss
performance. The underlying combined ratio* of 59.5 decreased by
1.8 points compared to the prior year quarter reflecting higher
average earned premiums exceeding average underlying loss costs
mainly driven by lower frequency.
- The recorded combined ratio for full year 2024 was 90.1 which
generated $1.3 billion of underwriting income compared to an
underwriting loss of $803 million in 2023.
- Protection Services provides protection solutions and
services through five businesses largely by embedding Allstate
branded offerings in non-insurance purchases. Revenues increased to
$889 million in the fourth quarter of 2024, 23.6% higher than the
prior year quarter, primarily due to Allstate Protection Plans and
Arity. Adjusted net income of $50 million increased by $46 million
compared to the prior year quarter.
Protection Services
Results
Three months ended
December 31,
Twelve months ended
December 31,
($ in millions)
2024
2023
% / $
Change
2024
2023
% / $
Change
Total revenues (1)
$
889
$
719
23.6
%
$
3,237
$
2,773
16.7
%
Allstate Protection Plans
528
439
20.3
1,987
1,639
21.2
Allstate Dealer Services
147
146
0.7
587
588
(0.2
)
Allstate Roadside
54
66
(18.2
)
224
265
(15.5
)
Arity
121
32
NM
286
133
115.0
Allstate Identity Protection
39
36
8.3
153
148
3.4
Adjusted net income (loss)
$
50
$
4
$
46
$
217
$
106
$
111
Allstate Protection Plans
37
38
(1
)
157
117
40
Allstate Dealer Services
4
(33
)
37
21
(15
)
36
Allstate Roadside
10
7
3
39
24
15
Arity
(3
)
(5
)
2
(8
)
(18
)
10
Allstate Identity Protection
2
(3
)
5
8
(2
)
10
(1)
Excludes net gains and losses on
investments and derivatives.
- Allstate Protection Plans continued to grow by expanding
distribution relationships and protection offerings. Revenue of
$528 million increased $89 million, or 20.3%, compared to the prior
year quarter driven by growth in North American and international
business. Adjusted net income of $37 million in the fourth quarter
of 2024 was $1 million lower than the prior year quarter.
- Allstate Dealer Services generated revenue of $147
million and adjusted net income of $4 million which was $37 million
higher than the prior year quarter due to a state tax change in the
prior year.
- Allstate Roadside revenue of $54 million in the fourth
quarter of 2024 decreased 18.2% compared to the prior year quarter
reflecting the exit from a large unprofitable customer
relationship. Adjusted net income of $10 million was $3 million
higher than the prior year quarter, primarily driven by improved
severities and lower costs.
- Arity revenue of $121 million increased $89 million
compared to the prior year quarter, due to higher revenue from lead
sales. Adjusted net loss of $3 million in the fourth quarter of
2024 improved compared to a $5 million loss in the prior year
quarter.
- Allstate Identity Protection revenue of $39 million in
the fourth quarter of 2024 increased 8.3% compared to the prior
year quarter. Adjusted net income of $2 million in the fourth
quarter of 2024 was $5 million higher than prior year quarter
driven by higher revenue.
- Allstate Health and Benefits
- The strategy to sell the three businesses to companies that
have greater strategic alignment reached another milestone with an
agreement to sell Group Health to Nationwide for $1.25 billion. The
expected combined proceeds of $3.25 billion from the sale of
Employer Voluntary Benefits and Group Health will generate a
financial book gain of approximately $1.0 billion in 2025. Assets
and liabilities for the Employer Voluntary Benefits business have
been classified as held for sale at December 31, 2024. Beginning in
the first quarter of 2025, the assets and liabilities of the Group
Health business will also be classified as held for sale. The
financial operating results of both businesses will continue to be
reported as a part of net income until sold.
- Premiums and contract charges for health and benefits increased
3.2%, or $15 million, compared to the prior year quarter primarily
due to growth in individual health and group health, partially
offset by a decline in employer voluntary benefits.
- Adjusted net income of $35 million in the fourth quarter was
$25 million lower than prior year quarter attributable to increased
benefit utilization across all businesses.
Allstate Health and Benefits
Results
Three months ended December
31,
Twelve months ended December
31,
($ in millions)
2024
2023
% Change
2024
2023
% Change
Premiums and contract charges
$
482
$
467
3.2
%
$
1,921
$
1,846
4.1
%
Employer voluntary benefits
243
248
(2.0
)
985
1,001
(1.6
)
Group health
123
112
9.8
481
440
9.3
Individual health
116
107
8.4
455
405
12.3
Adjusted net income
$
35
$
60
(41.7
)
$
186
$
242
(23.1
)%
Employer voluntary benefits
21
24
(12.5
)
85
100
(15.0
)
Group health
2
16
(87.5
)
71
95
(25.3
)
Individual health
12
20
(40.0
)
30
47
(36.2
)
- Allstate Investments uses a proactive approach to
balancing risk and returns for the $72.6 billion portfolio. This
includes optimizing risk adjusted returns on capital. Net
investment income of $833 million in the fourth quarter of 2024,
increased by $229 million from the prior year quarter due to
repositioning into higher yielding fixed income securities,
portfolio growth and stronger performance-based results.
Allstate Investment
Results
Three months ended
December 31,
Twelve months ended
December 31,
($ in millions, except ratios)
2024
2023
$ / pts
Change
2024
2023
$ / pts
Change
Net investment income
$
833
$
604
$
229
$
3,092
$
2,478
$
614
Market-based (1)
727
604
123
2,728
2,214
514
Performance-based (1)
167
60
107
618
499
119
Net gains (losses) on investments and
derivatives
$
(201
)
$
(77
)
$
(124
)
$
(225
)
$
(300
)
$
75
Change in unrealized net capital gains
and losses, pre-tax (2)
$
(1,444
)
$
2,421
$
(3,865
)
$
(192
)
$
2,096
$
(2,288
)
Total return on investment portfolio
(2)
(1.1
)%
4.6
%
(5.7
)
3.8
%
6.7
%
(2.9
)
(1)
Investment expenses are not allocated
between market-based and performance-based portfolios with the
exception of investee level expenses.
(2)
Includes investments held for sale.
- Market-based investment income was $727 million in the
fourth quarter of 2024, an increase of $123 million, or 20.4%,
compared to the prior year quarter, reflecting increased asset
balances and higher yields in the $62.2 billion market-based
portfolio. Fixed income duration ended 2024 at 5.3 years, 0.5 years
above prior year end. Public equity holdings were increased by $2.4
billion to $3.3 billion in the fourth quarter.
- Performance-based investment income totaled $167
million in the fourth quarter of 2024, an increase of $107 million
compared to the prior year quarter reflecting higher private equity
and real estate investment results. The portfolio allocation to
performance-based assets provides a diversifying source of higher
long-term returns, and volatility in reported results is
expected.
- Net losses on investments and derivatives were $201
million in the fourth quarter of 2024, compared to losses of $77
million in the prior year quarter. Net losses in the fourth quarter
of 2024 were driven by valuation declines on equity investments and
losses on the sales of fixed income securities.
- Unrealized net capital losses totaled $1.0 billion
(pre-tax) as of year-end 2024 compared to net capital gains of $461
million from the third quarter of 2024 as higher interest rates
resulted in lower fixed income valuations.
- Total return on the investment portfolio was (1.1)% for
the fourth quarter and 3.8% for full year 2024.
Proactive Capital Management
“Allstate’s attractive financial returns and successful strategy
execution position us to increase shareholder value through higher
growth,” said Jess Merten, Chief Financial Officer. “Adjusted net
income return on equity* was 26.8% for 2024 and generated capital
to support revenue growth, pay $1.1 billion of common shareholder
and preferred dividends and increase total available capital to
$21.9 billion. The decision to sell the Employer Voluntary Benefits
and Group Health business to two buyers for a combined price of
$3.25 billion maximizes shareholder value. While return on equity
will be slightly lower, the capital can support additional growth.
The Individual Health business, with adjusted net income of $30
million in 2024, has attractive growth prospects and will either be
retained or divested. Allstate remains committed to managing
capital and enterprise risk and return to benefit shareholders,”
concluded Merten.
Visit www.allstateinvestors.com for additional information about
Allstate’s results, including a webcast of its quarterly conference
call and the call presentation. The conference call will be at 9
a.m. ET on Thursday, February 6. Financial information, including
material announcements about The Allstate Corporation, is routinely
posted on www.allstateinvestors.com.
Forward-Looking Statements
This news release contains “forward-looking statements” that
anticipate results based on our estimates, assumptions and plans
that are subject to uncertainty. These statements are made subject
to the safe-harbor provisions of the Private Securities Litigation
Reform Act of 1995. These forward-looking statements do not relate
strictly to historical or current facts and may be identified by
their use of words like “plans,” “seeks,” “expects,” “will,”
“should,” “anticipates,” “estimates,” “intends,” “believes,”
“likely,” “targets” and other words with similar meanings. We
believe these statements are based on reasonable estimates,
assumptions and plans. However, if the estimates, assumptions or
plans underlying the forward-looking statements prove inaccurate or
if other risks or uncertainties arise, actual results could differ
materially from those communicated in these forward-looking
statements. Factors that could cause actual results to differ
materially from those expressed in, or implied by, the
forward-looking statements may be found in our filings with the
U.S. Securities and Exchange Commission, including the “Risk
Factors” section in our most recent annual report on Form 10-K.
Forward-looking statements are as of the date on which they are
made, and we assume no obligation to update or revise any
forward-looking statement.
THE ALLSTATE CORPORATION AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
FINANCIAL POSITION
($ in millions, except par value
data)
December 31,
2024
December 31,
2023
Assets
Investments
Fixed income securities, at fair value
(amortized cost, net $53,616 and $49,649)
$
52,747
$
48,865
Equity securities, at fair value (cost
$4,329 and $2,244)
4,463
2,411
Mortgage loans, net
784
822
Limited partnership interests
9,255
8,380
Short-term, at fair value (amortized cost
$4,539 and $5,145)
4,537
5,144
Other investments, net
824
1,055
Total investments
72,610
66,677
Cash
704
722
Premium installment receivables, net
10,614
10,044
Deferred policy acquisition costs
5,773
5,940
Reinsurance and indemnification
recoverables, net
8,924
8,809
Accrued investment income
615
539
Deferred income taxes
231
219
Property and equipment, net
669
859
Goodwill
3,245
3,502
Other assets, net
5,140
6,051
Assets held for sale
3,092
—
Total assets
$
111,617
$
103,362
Liabilities
Reserve for property and casualty
insurance claims and claims expense
$
41,917
$
39,858
Reserve for future policy benefits
269
1,347
Contractholder funds
—
888
Unearned premiums
26,909
24,709
Claim payments outstanding
1,567
1,353
Other liabilities and accrued expenses
9,390
9,635
Debt
8,085
7,942
Liabilities held for sale
2,113
—
Total liabilities
90,250
85,732
Equity
Preferred stock and additional capital
paid-in, $1 par value, 25 million shares authorized, 82.0 thousand
shares issued and outstanding, $2,050 aggregate liquidation
preference
2,001
2,001
Common stock, $.01 par value, 2.0 billion
shares authorized and 900 million issued, 265 million and 262
million shares outstanding
9
9
Additional capital paid-in
4,029
3,854
Retained income
53,288
49,716
Treasury stock, at cost (635 million and
638 million shares)
(36,996
)
(37,110
)
Accumulated other comprehensive income
(loss):
Unrealized net capital gains and
losses
(771
)
(604
)
Unrealized foreign currency translation
adjustments
(145
)
(98
)
Unamortized pension and other
postretirement prior service credit
11
13
Discount rate for reserve for future
policy benefits
16
(11
)
Total accumulated other comprehensive
loss
(889
)
(700
)
Total Allstate shareholders’
equity
21,442
17,770
Noncontrolling interest
(75
)
(140
)
Total equity
21,367
17,630
Total liabilities and equity
$
111,617
$
103,362
THE ALLSTATE CORPORATION AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
OPERATIONS
($ in millions, except per share
data)
Three months ended
December 31,
Twelve months ended
December 31,
2024
2023
2024
2023
Revenues
Property and casualty insurance
premiums
$
14,591
$
13,188
$
56,388
$
50,670
Accident and health insurance premiums and
contract charges
482
467
1,921
1,846
Other revenue
801
650
2,930
2,400
Net investment income
833
604
3,092
2,478
Net gains (losses) on investments and
derivatives
(201
)
(77
)
(225
)
(300
)
Total revenues
16,506
14,832
64,106
57,094
Costs and expenses
Property and casualty insurance claims and
claims expense
9,024
8,780
39,735
41,070
Accident, health and other policy benefits
(including remeasurement (gains) losses of $0, $0, $1 and $0)
337
286
1,241
1,071
Amortization of deferred policy
acquisition costs
2,062
1,904
8,039
7,278
Operating costs and expenses
2,505
1,864
8,626
7,137
Pension and other postretirement
remeasurement (gains) losses
(52
)
(47
)
(37
)
9
Restructuring and related charges
10
28
61
169
Amortization of purchased intangibles
70
83
280
329
Interest expense
101
107
400
379
Total costs and expenses
14,057
13,005
58,345
57,442
Income (loss) from operations before
income tax expense
2,449
1,827
5,761
(348
)
Income tax expense (benefit)
559
340
1,162
(135
)
Net income (loss)
1,890
1,487
4,599
(213
)
Less: Net loss attributable to
noncontrolling interest
(38
)
(2
)
(68
)
(25
)
Net income (loss) attributable to
Allstate
1,928
1,489
4,667
(188
)
Less: Preferred stock dividends
29
29
117
128
Net income (loss) applicable to common
shareholders
$
1,899
$
1,460
$
4,550
$
(316
)
Earnings per common share:
Net income (loss) applicable to common
shareholders per common share - Basic
$
7.16
$
5.57
$
17.22
$
(1.20
)
Weighted average common shares - Basic
265.1
262.2
264.3
262.5
Net income (loss) applicable to common
shareholders per common share - Diluted
$
7.07
$
5.52
$
16.99
$
(1.20
)
Weighted average common shares -
Diluted
268.7
264.7
267.8
262.5
Definitions of Non-GAAP Measures
We believe that investors’ understanding of Allstate’s
performance is enhanced by our disclosure of the following non-GAAP
measures. Our methods for calculating these measures may differ
from those used by other companies and therefore comparability may
be limited.
Adjusted net income (loss) is net income (loss)
applicable to common shareholders, excluding:
- Net gains and losses on investments and derivatives
- Pension and other postretirement remeasurement gains and
losses
- Amortization or impairment of purchased intangibles
- Gain or loss on disposition
- Adjustments for other significant non-recurring, infrequent or
unusual items, when (a) the nature of the charge or gain is such
that it is reasonably unlikely to recur within two years, or (b)
there has been no similar charge or gain within the prior two
years
- Related income tax expense or benefit of these items
Net income (loss) applicable to common shareholders is the GAAP
measure that is most directly comparable to adjusted net
income.
We use adjusted net income as an important measure to evaluate
our results of operations. We believe that the measure provides
investors with a valuable measure of the Company’s ongoing
performance because it reveals trends in our insurance and
financial services business that may be obscured by the net effect
of net gains and losses on investments and derivatives, pension and
other postretirement remeasurement gains and losses, amortization
or impairment of purchased intangibles, gain or loss on disposition
and adjustments for other significant non-recurring, infrequent or
unusual items and the related tax expense or benefit of these
items. Net gains and losses on investments and derivatives, and
pension and other postretirement remeasurement gains and losses may
vary significantly between periods and are generally driven by
business decisions and external economic developments such as
capital market conditions, the timing of which is unrelated to the
insurance underwriting process. Gain or loss on disposition is
excluded because it is non-recurring in nature and the amortization
or impairment of purchased intangibles is excluded because it
relates to the acquisition purchase price and is not indicative of
our underlying business results or trends. Non-recurring items are
excluded because, by their nature, they are not indicative of our
business or economic trends. Accordingly, adjusted net income
excludes the effect of items that tend to be highly variable from
period to period and highlights the results from ongoing operations
and the underlying profitability of our business. A byproduct of
excluding these items to determine adjusted net income is the
transparency and understanding of their significance to net income
variability and profitability while recognizing these or similar
items may recur in subsequent periods. Adjusted net income is used
by management along with the other components of net income (loss)
applicable to common shareholders to assess our performance. We use
adjusted measures of adjusted net income in incentive compensation.
Therefore, we believe it is useful for investors to evaluate net
income (loss) applicable to common shareholders, adjusted net
income and their components separately and in the aggregate when
reviewing and evaluating our performance. We note that investors,
financial analysts, financial and business media organizations and
rating agencies utilize adjusted net income results in their
evaluation of our and our industry’s financial performance and in
their investment decisions, recommendations and communications as
it represents a reliable, representative and consistent measurement
of the industry and the Company and management’s performance. We
note that the price to earnings multiple commonly used by insurance
investors as a forward-looking valuation technique uses adjusted
net income as the denominator. Adjusted net income should not be
considered a substitute for net income (loss) applicable to common
shareholders and does not reflect the overall profitability of our
business.
The following tables reconcile net income (loss) applicable to
common shareholders and adjusted net income (loss). Taxes on
adjustments to reconcile net income (loss) applicable to common
shareholders and adjusted net income (loss) generally use a 21%
effective tax rate.
($ in millions, except per share
data)
Three months ended December
31,
2024
2023
2024
2023
Consolidated
Per diluted common
share
Net income (loss) applicable to common
shareholders
$
1,899
$
1,460
$
7.07
$
5.52
Net (gains) losses on investments and
derivatives
201
77
0.75
0.29
Pension and other postretirement
remeasurement (gains) losses
(52
)
(47
)
(0.20
)
(0.18
)
Amortization of purchased intangibles
70
83
0.26
0.31
(Gain) loss on disposition
(10
)
(8
)
(0.04
)
(0.03
)
Non-recurring costs
—
—
—
—
Income tax expense (benefit)
(46
)
(24
)
(0.17
)
(0.09
)
Adjusted net income (loss) *
$
2,062
$
1,541
$
7.67
$
5.82
Weighted average dilutive potential common
shares excluded due to net loss applicable to common shareholders
(1)
—
—
Twelve months ended December
31,
2024
2023
2024
2023
Consolidated
Per diluted common
share
Net income (loss) applicable to common
shareholders (1)
$
4,550
$
(316
)
$
16.99
$
(1.20
)
Net (gains) losses on investments and
derivatives
225
300
0.84
1.13
Pension and other postretirement
remeasurement (gains) losses
(37
)
9
(0.14
)
0.04
Amortization of purchased intangibles
280
329
1.05
1.24
(Gain) loss on disposition
(16
)
(4
)
(0.06
)
(0.01
)
Non-recurring costs (2)
—
90
—
0.34
Income tax expense (benefit)
(96
)
(157
)
(0.36
)
(0.59
)
Adjusted net income (loss) *
$
4,906
$
251
$
18.32
$
0.95
Weighted average dilutive potential common
shares excluded due to net loss applicable to common shareholders
(1)
—
2.2
_____________
(1)
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.
(2)
Relates to settlement costs for
non-recurring litigation that is outside of the ordinary course of
business.
Adjusted net income (loss) return on Allstate common
shareholders’ equity is a ratio that uses a non-GAAP measure.
It is calculated by dividing the rolling 12-month adjusted net
income by the average of Allstate common shareholders’ equity at
the beginning and at the end of the 12-months, after excluding the
effect of unrealized net capital gains and losses. Return on
Allstate common shareholders’ equity is the most directly
comparable GAAP measure. We use adjusted net income as the
numerator for the same reasons we use adjusted net income, as
discussed previously. We use average Allstate common shareholders’
equity excluding the effect of unrealized net capital gains and
losses for the denominator as a representation of common
shareholders’ equity primarily applicable to Allstate's earned and
realized business operations because it eliminates the effect of
items that are unrealized and vary significantly between periods
due to external economic developments such as capital market
conditions like changes in equity prices and interest rates, the
amount and timing of which are unrelated to the insurance
underwriting process. We use it to supplement our evaluation of net
income (loss) applicable to common shareholders and return on
Allstate common shareholders’ equity because it excludes the effect
of items that tend to be highly variable from period to period. We
believe that this measure is useful to investors and that it
provides a valuable tool for investors when considered along with
return on Allstate common shareholders’ equity because it
eliminates the after-tax effects of realized and unrealized net
capital gains and losses that can fluctuate significantly from
period to period and that are driven by economic developments, the
magnitude and timing of which are generally not influenced by
management. In addition, it eliminates non-recurring items that are
not indicative of our ongoing business or economic trends. A
byproduct of excluding the items noted above to determine adjusted
net income return on Allstate common shareholders’ equity from
return on Allstate common shareholders’ equity is the transparency
and understanding of their significance to return on common
shareholders’ equity variability and profitability while
recognizing these or similar items may recur in subsequent periods.
We use adjusted measures of adjusted net income return on Allstate
common shareholders’ equity in incentive compensation. Therefore,
we believe it is useful for investors to have adjusted net income
return on Allstate common shareholders’ equity and return on
Allstate common shareholders’ equity when evaluating our
performance. We note that investors, financial analysts, financial
and business media organizations and rating agencies utilize
adjusted net income return on common shareholders’ equity results
in their evaluation of our and our industry’s financial performance
and in their investment decisions, recommendations and
communications as it represents a reliable, representative and
consistent measurement of the industry and the company and
management’s utilization of capital. We also provide it to
facilitate a comparison to our long-term adjusted net income return
on Allstate common shareholders’ equity goal. Adjusted net income
return on Allstate common shareholders’ equity should not be
considered a substitute for return on Allstate common shareholders’
equity and does not reflect the overall profitability of our
business.
The following tables reconcile return on Allstate common
shareholders’ equity and adjusted net income (loss) return on
Allstate common shareholders’ equity.
($ in millions)
For the twelve months
ended
December 31,
2024
2023
Return on Allstate common
shareholders’ equity
Numerator:
Net income (loss) applicable to common
shareholders
$
4,550
$
(316
)
Denominator:
Beginning Allstate common shareholders’
equity
$
15,769
$
15,518
Ending Allstate common shareholders’
equity (1)
19,441
15,769
Average Allstate common shareholders’
equity
$
17,605
$
15,644
Return on Allstate common shareholders’
equity
25.8
%
(2.0
)%
($ in millions)
For the twelve months
ended
December 31,
2024
2023
Adjusted net income (loss) return on
Allstate common shareholders’ equity
Numerator:
Adjusted net income (loss) *
$
4,906
$
251
Denominator:
Beginning Allstate common shareholders’
equity
$
15,769
$
15,518
Less: Unrealized net capital gains and
losses
(604
)
(2,255
)
Adjusted beginning Allstate common
shareholders’ equity
16,373
17,773
Ending Allstate common shareholders’
equity (1)
19,441
15,769
Less: Unrealized net capital gains and
losses
(771
)
(604
)
Adjusted ending Allstate common
shareholders’ equity
20,212
16,373
Average adjusted Allstate common
shareholders’ equity
$
18,293
$
17,073
Adjusted net income (loss) return on
Allstate common shareholders’ equity *
26.8
%
1.5
%
_____________
(1)
Excludes equity related to preferred stock
of $2,001 million as of both December 31, 2024 and 2023.
Combined ratio excluding the effect of catastrophes, prior
year reserve reestimates and amortization or impairment of
purchased intangibles (“underlying combined ratio”) is a
non-GAAP ratio, which is computed as the difference between four
GAAP operating ratios: the combined ratio, the effect of
catastrophes on the combined ratio, the effect of prior year
non-catastrophe reserve reestimates on the combined ratio, and the
effect of amortization or impairment of purchased intangibles on
the combined ratio. We believe that this ratio is useful to
investors, and it is used by management to reveal the trends in our
Property-Liability business that may be obscured by catastrophe
losses, prior year reserve reestimates and amortization or
impairment of purchased intangibles. Catastrophe losses cause our
loss trends to vary significantly between periods as a result of
their incidence of occurrence and magnitude, and can have a
significant impact on the combined ratio. Prior year reserve
reestimates are caused by unexpected loss development on historical
reserves, which could increase or decrease current year net income.
Amortization or impairment of purchased intangibles relates to the
acquisition purchase price and is not indicative of our underlying
insurance business results or trends. We believe it is useful for
investors to evaluate these components separately and in the
aggregate when reviewing our underwriting performance. The most
directly comparable GAAP measure is the combined ratio. The
underlying combined ratio should not be considered a substitute for
the combined ratio and does not reflect the overall underwriting
profitability of our business.
The following tables reconcile the respective combined ratio to
the underlying combined ratio. Underwriting margin is calculated as
100% minus the combined ratio.
Property-Liability
Three months ended
December 31,
Twelve months ended
December 31,
2024
2023
2024
2023
Combined ratio
86.9
89.5
94.3
104.5
Effect of catastrophe losses
(2.9
)
(0.5
)
(9.2
)
(11.6
)
Effect of prior year non-catastrophe
reserve reestimates
(0.6
)
(1.6
)
(0.2
)
(1.2
)
Effect of amortization of purchased
intangibles
(0.4
)
(0.5
)
(0.3
)
(0.5
)
Underlying combined ratio*
83.0
86.9
84.6
91.2
Effect of prior year catastrophe reserve
reestimates
(0.4
)
(0.2
)
(0.7
)
—
Allstate
Protection - Auto Insurance
Three months ended
December 31,
Twelve months ended
December 31,
2024
2023
2024
2023
Combined ratio
93.5
98.9
95.0
103.4
Effect of catastrophe losses
(0.6
)
(0.3
)
(2.2
)
(2.1
)
Effect of prior year non-catastrophe
reserve reestimates
0.4
(1.7
)
0.9
(0.9
)
Effect of amortization of purchased
intangibles
(0.3
)
(0.5
)
(0.3
)
(0.5
)
Underlying combined ratio*
93.0
96.4
93.4
99.9
Effect of prior year catastrophe reserve
reestimates
(0.1
)
(0.1
)
(0.1
)
(0.2
)
Allstate
Protection - Homeowners Insurance
Three months ended
December 31,
Twelve months ended
December 31,
2024
2023
2024
2023
Combined ratio
69.8
62.0
90.1
106.8
Effect of catastrophe losses
(8.9
)
(0.7
)
(27.8
)
(38.6
)
Effect of prior year non-catastrophe
reserve reestimates
(1.1
)
0.3
0.5
(0.5
)
Effect of amortization of purchased
intangibles
(0.3
)
(0.3
)
(0.3
)
(0.4
)
Underlying combined ratio*
59.5
61.3
62.5
67.3
Effect of prior year catastrophe reserve
reestimates
(1.2
)
(0.8
)
(2.4
)
0.3
View source
version on businesswire.com: https://www.businesswire.com/news/home/20250205585520/en/
Nick Nottoli Media Relations (847) 402-5600
Allister Gobin Investor Relations (847) 402-2800
Allstate (NYSE:ALL)
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