Summary of Allstate Corporation FY Conference Call (June 05, 2025) Company Overview - **Company**: Allstate Corporation (ALL) - **Industry**: Insurance, specifically focusing on personal property liability and protection services Core Points and Arguments 1. **Strategic Focus**: Allstate aims to increase market share in personal property liability while expanding customer protection offerings. The strategy is illustrated through a two-component approach: increasing market share and enhancing customer protection [6][10]. 2. **Revenue Sources**: - Property liability earned premiums generated $14 billion in Q1 2025 and $54 billion for the full year 2024 [7]. - Protection Services segment generated $6.86 billion in Q1 2025 and $3.2 billion for the full year 2024 [8]. - Net investment income was $854 million in Q1 2025 and $3 billion for the full year 2024 [9]. 3. **Financial Performance**: - Total revenues were $16.5 billion in Q1 2025, up 7.8% year-over-year, and $64.1 billion for 2024, growing 12.3% [9]. - Net income for 2024 was $4.6 billion, with a return on common equity of 25.8% [10]. 4. **Transformative Growth Initiative**: - The initiative includes five components: improving customer value, expanding access, enhancing customer acquisition, leveraging technology, and investing in talent [11][15]. - The SAVE program aims to improve customer interactions and reduce premiums for millions of customers [13]. 5. **Market Dynamics**: - The auto and homeowners insurance markets are becoming increasingly competitive, but Allstate remains confident in its ability to compete due to investments in technology and cost structure [39][42]. - The company has opened for new business in auto insurance in California, indicating improved rate levels [28]. Additional Important Insights 1. **Technology Investments**: Allstate has focused on building a new technology stack to support growth, including a new policy administration system and data-driven customer experiences [31][35]. 2. **Customer Acquisition**: The company has improved its direct capabilities and marketing sophistication to attract customers across all distribution channels [14][46]. 3. **Wildfire Risk Management**: Allstate is enhancing its modeling capabilities for wildfire risk and implementing solutions to manage this risk effectively [53][56]. 4. **Capital Management**: Allstate has a strong history of returning capital to shareholders, with $17 billion spent on share repurchases over the past ten years and a recent $1.5 billion share repurchase program initiated [24][25]. 5. **Agent Channel Performance**: The exclusive agent channel remains important, with agents becoming more efficient and effective in generating growth despite competitive pressures [61][62]. This summary encapsulates the key points discussed during the Allstate Corporation FY Conference Call, highlighting the company's strategic direction, financial performance, and market positioning.

Core Insights - Allstate is committed to youth empowerment by supporting initiatives that create safer spaces and opportunities for young athletes to thrive [2] - The partnership between Allstate and Tyler Adams aims to provide mini-pitches in underserved communities, enhancing accessibility to soccer [4][5] - The U.S. Soccer Foundation focuses on sports-based youth development in under-resourced areas, providing innovative play spaces and soccer programs [6] Group 1: Event and Community Impact - More than 75 children participated in a youth clinic led by Black Star, emphasizing the importance of community engagement in soccer [1] - The Philadelphia-area mini-pitch is the second installation in a three-year partnership, with the first unveiled in 2024 at Fisher Academy in Detroit [2] - The event included a block party with local food trucks, DJ, and inflatable soccer games, fostering community connection [2] Group 2: Organizational Roles and Goals - Black Star is focused on accelerating the growth and visibility of Black soccer players, coaches, and fans, and played a key role in the event [4][7] - The U.S. Soccer Foundation aims to change lives through soccer by providing access to play spaces and programs that foster youth development [6] - Allstate's partnership with Tyler Adams is seen as a step towards making soccer more accessible and inclusive for all youth [5]

Group 1 - Albert Anthony is a Croatian-American media personality and analyst for financial media platforms Investing.com and Seeking Alpha, focusing on dividend stocks and general market commentary [1] - Since 2023, Albert Anthony has gained over 1,000 followers and has covered more than 200 companies across multiple sectors [1] - He has experience as an analyst in the IT sector and was part of the IT team at a top 10 financial firm in the US [1] Group 2 - Albert Anthony holds a B.A. from Drew University and has completed coursework through the Corporate Finance Institute and Coursera [1] - In 2025, he plans to launch a new book on Amazon discussing his methodology as an analyst and how he rates stocks [1] - The Albert Anthony brand is owned by Albert Anthony & Co., a sole proprietorship registered in Austin, Texas [1]

Core Insights - The Allstate Corporation's operating performance was weak during 2022-23 due to higher claims costs linked to the inflationary environment, resulting in lower underwriting profitability [1]. Group 1: Company Performance - The Allstate Corporation faced challenges in its operating performance primarily due to increased claims costs [1]. - The inflationary environment has negatively impacted underwriting profitability for the company [1].

Core Viewpoint - The Allstate Corporation reported a first-quarter 2025 adjusted net income of $3.53 per share, exceeding the Zacks Consensus Estimate by 56.2%, but showing a year-over-year decline of 31.2% [1]. Financial Performance - Operating revenues increased by 8.9% year over year to $16.8 billion, although it fell short of the consensus estimate by 1.9% [1][2]. - Property and casualty insurance premiums rose by 8.8% year over year to $14.7 billion, while net investment income grew by 11.8% year over year to $854 million, surpassing the Zacks Consensus Estimate of $821.4 million [3]. - Total costs and expenses increased by 14% year over year to $15.7 billion, driven by higher claims and operating costs, with catastrophe losses rising to $2.2 billion from $731 million a year ago [4]. Segment Performance - The Property-Liability segment's premiums earned increased by 8.7% year over year to $14 billion, but fell short of the Zacks Consensus Estimate by 1%. Underwriting income decreased to $360 million from $898 million in the prior year [6]. - The Protection Services segment reported revenues of $860 million, up 14.2% year over year, with adjusted net income slightly increasing to $55 million from $54 million [7]. - The Allstate Health and Benefits segment saw premiums and contract charges rise by 1.9% year over year to $487 million, missing the Zacks Consensus Estimate by 1%, while adjusted net income dropped by 46.4% year over year to $30 million [8]. Financial Update - As of March 31, 2025, Allstate had a cash balance of $840 million, total assets of $115.2 billion, and total equity of $22.1 billion, reflecting increases from the end of 2024. Book value per common share was $74.61, up 19.8% year over year [9]. Market Position - Allstate currently holds a Zacks Rank 3 (Hold) [10].

Financial Data and Key Metrics Changes - Revenues for the first quarter were $16.5 billion, an increase of 7.8% compared to the first quarter of 2024 [7] - Net income was $566 million, with adjusted net income at $949 million, translating to $3.53 per diluted share [7] - Adjusted net income return on equity was 23.7% over the last twelve months [7] Business Line Data and Key Metrics Changes - The property liability business generated $360 million of underwriting income, with a combined ratio of 97.4%, which was 4.4 points higher than the prior year due to $3.3 billion in gross catastrophe losses [14] - The auto combined ratio was 91.3%, with average earned premium increases outpacing losses [15] - Homeowners policies grew by 2.5% year-over-year, while total property liability policies increased by 0.1% in the quarter [19] Market Data and Key Metrics Changes - New business applications for auto insurance were 31.2% above the prior year, with strong growth across all distribution channels [20] - The company reported a 27% increase in personalized new business items compared to the previous year [12] - The homeowners business is experiencing mid-teens revenue growth, indicating a strong market position [72] Company Strategy and Development Direction - The company aims to increase personal property liability market share and expand customer protection [7] - A transformative growth strategy is being executed to improve customer value and lower costs, which has led to improved expense ratios [10] - The company is focused on expanding distribution channels, enhancing agent productivity, and increasing direct sales [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the rationality of the competitive market, with no aggressive rate reductions expected [34] - The company is optimistic about sustaining new business levels and improving retention through initiatives like the SAVE program [39] - Management highlighted the importance of maintaining profitability while managing potential impacts from tariffs and inflation [93] Other Important Information - The company completed the sale of its employee voluntary benefits business for $2 billion [9] - A $1 billion share repurchase program was instituted, with $100 million already executed in the first quarter [76] Q&A Session Summary Question: Views on competition and pricing aggressiveness - Management noted a reduction in the rate of increases in auto insurance and characterized the market as rational, with no aggressive rate reductions expected [33][34] Question: Insights on policy in force (PIF) count and retention - Management indicated that new business levels were up significantly, and retention is stabilizing, with efforts in the SAVE program aimed at improving customer interactions [37][41] Question: Capital position and allocation strategy - Management expressed comfort with the current capital position and outlined a balanced approach to capital allocation, focusing on growth and shareholder returns [75][76] Question: Impact of California's competitive environment on bundling strategy - Management acknowledged that competitors facing challenges in California could create opportunities for the company, particularly in the auto business [82][84] Question: Retention and SAVE program effectiveness - Management emphasized the importance of addressing customer defection triggers and improving customer experience through the SAVE program [108]

Financial Data and Key Metrics Changes - Revenues for Q1 2025 were $16.5 billion, an increase of 7.8% compared to Q1 2024 [6] - Net income for the quarter was $566 million, with adjusted net income at $949 million, translating to $3.53 per diluted share [6] - Adjusted net income return on equity was 23.7% over the last twelve months [6] Business Line Data and Key Metrics Changes - Property liability business generated $360 million in underwriting income, with a combined ratio of 97.4%, which was 4.4 points higher than the prior year due to $3.3 billion in gross catastrophe losses [13] - The auto combined ratio was 91.3%, with average earned premium increases outpacing losses [14] - Homeowners policies grew by 2.5% year-over-year, while total property liability policies increased by 0.1% in the quarter [17] Market Data and Key Metrics Changes - New business applications for auto insurance were up 31.2% compared to the prior year, with strong growth across all distribution channels [18] - The homeowners business generated mid-teens growth in revenue, indicating a strong growth opportunity [70] Company Strategy and Development Direction - The company aims to increase personal property liability market share and expand customer protection [6] - A transformative growth strategy is being executed to improve customer value and lower costs, which has resulted in a 6.7-point improvement in the adjusted expense ratio [9] - The company is focused on expanding distribution channels, enhancing agent productivity, and increasing direct sales [10] Management's Comments on Operating Environment and Future Outlook - Management noted that the industry is operating with good profitability and does not foresee aggressive rate reductions despite competitive pressures [31] - The SAVE program aims to improve customer interactions and retention, with a goal of enhancing affordability and overall customer experience [39] - Management expressed confidence in the company's strategy and ability to deliver value for shareholders and protection to customers [28] Other Important Information - The company completed the sale of its employee voluntary benefits business for $2 billion on April 1, 2025 [8] - A $1 billion share repurchase program was instituted, with a quarterly dividend increase to $1 per share [8] Q&A Session Summary Question: Views on competition and pricing aggressiveness - Management indicated that while there is a reduction in the rate of increases in auto insurance, the market remains rational with a focus on profitability [31][33] Question: Sustainability of recent improvements in policies in force - Management noted that new business levels are up significantly, and retention is stabilizing, with efforts in the SAVE program aimed at improving customer retention [36][39] Question: New applications and advertising impact - Management confirmed that new business levels are being maintained and that there is potential for further growth with product rollouts and advertising investments [44] Question: Impact of tariffs on auto insurance margins - Management stated that they will manage through tariff impacts and are prepared to adjust pricing as necessary to maintain margins [92] Question: Retention challenges and SAVE program effectiveness - Management acknowledged that retention remains a challenge but emphasized efforts to improve customer experience and affordability through the SAVE program [104][108]

The Allstate Corporation First Quarter 2025 Earnings Presentation 05.01.2025 Forward-looking statements and non-GAAP financial information Allstate Delivers Excellent Returns While Advancing Strategy Allstate's Strategy To Create Shareholder Value Increase Personal Property-Liability Market Share Expand Protection Services Leveraging Allstate brand, customer base and capabilities A strong start to 2025 The Allstate Corporation 2025 PAGE 2 ➢ First quarter highlights o Total revenue of $16.5 billion increased ...

Core Insights - Allstate reported $16.8 billion in revenue for Q1 2025, an 8.9% year-over-year increase, but fell short of the Zacks Consensus Estimate of $17.13 billion by 1.91% [1] - The company's EPS for the quarter was $3.53, down from $5.13 a year ago, but exceeded the consensus estimate of $2.26 by 56.19% [1] Financial Performance Metrics - Combined Ratio for Property-liability was 97.4%, better than the average estimate of 98% [4] - Expense Ratio for Property-liability was 21.4%, lower than the average estimate of 22.5% [4] - Loss Ratio for Property-liability was 76%, slightly above the average estimate of 75.2% [4] - Loss Ratio for Auto was 69.3%, better than the average estimate of 71.5% [4] - Property-Liability Net Premiums Earned were $14.03 billion, a year-over-year increase of 8.7%, but below the average estimate of $14.17 billion [4] - Property-Liability Other Revenue was $488 million, a 13.5% year-over-year increase, slightly above the average estimate of $485.47 million [4] - Property-Liability Net Investment Income was $783 million, an 11.5% year-over-year increase, exceeding the average estimate of $741.90 million [4] - Allstate Health and Benefits Net Investment Income was $25 million, an 8.7% year-over-year increase, slightly below the average estimate of $26 million [4] - Allstate Health and Benefits Other Revenue was $131 million, a 2.2% year-over-year decrease, below the average estimate of $132.46 million [4] - Accident and health insurance premiums and contract charges for Allstate Health and Benefits were $487 million, a 1.9% year-over-year increase, below the average estimate of $491.66 million [4] - Corporate and Other Net Investment Income was $22 million, a 22.2% year-over-year increase, below the average estimate of $25.06 million [4] - Premiums earned by Allstate Protection for Homeowners were $3.66 billion, a 16% year-over-year increase, slightly above the average estimate of $3.64 billion [4] Stock Performance - Allstate shares returned -4.2% over the past month, compared to the Zacks S&P 500 composite's -0.2% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market [3]

Group 1 - Allstate reported quarterly earnings of $3.53 per share, exceeding the Zacks Consensus Estimate of $2.26 per share, but down from $5.13 per share a year ago, representing an earnings surprise of 56.19% [1][2] - The company posted revenues of $16.8 billion for the quarter ended March 2025, missing the Zacks Consensus Estimate by 1.91%, compared to $15.42 billion in the same quarter last year [2] - Allstate has surpassed consensus EPS estimates in all four of the last quarters and has topped consensus revenue estimates two times during the same period [2][6] Group 2 - The stock has increased approximately 3.1% since the beginning of the year, while the S&P 500 has declined by 5.5% [3] - The current consensus EPS estimate for the upcoming quarter is $3.22 on revenues of $17.18 billion, and for the current fiscal year, it is $16.94 on revenues of $69.45 billion [7] - The Zacks Industry Rank for Insurance - Property and Casualty is in the top 17% of over 250 Zacks industries, indicating a favorable outlook for the industry [8]