Core Viewpoint - Allstate's second-quarter earnings exceeded expectations, driven by strong premium growth and improved investment income, although total revenues slightly missed consensus estimates [2][3]. Financial Performance - Adjusted net income for Q2 2025 was $5.94 per share, surpassing the Zacks Consensus Estimate by 78.9%, and significantly up from $1.61 a year ago [2]. - Operating revenues increased by 6.1% year over year to $16.8 billion, but fell short of the consensus mark by 2.9% [2]. - Property and casualty insurance premiums rose 7.8% year over year to $15 billion [4]. - Net investment income was $754 million, a 5.9% increase year over year, but missed the Zacks Consensus Estimate of $815.4 million [4]. - Total costs and expenses decreased by 3% year over year to $14.8 billion, lower than the estimated $16.2 billion [5]. Segment Performance - The Property-Liability segment's premiums earned increased by 7.5% year over year to $14.3 billion, although it fell short of the Zacks Consensus Estimate by 1.4% [7]. - The Protection Services segment reported revenues of $867 million, a 12.2% year-over-year increase [8]. - The Allstate Health and Benefits segment saw a 50.4% decline in premium and contract charges to $235 million due to the sale of the Employer Voluntary Benefits unit [8]. Financial Position - As of June 30, 2025, Allstate had a cash balance of $995 million, up from $704 million at the end of 2024 [9]. - Total assets increased to $115.9 billion from $111.6 billion at the end of 2024 [9]. - Total equity rose to $24 billion from $21.4 billion at the end of 2024, with a book value per common share of $82.40, reflecting a 32.6% year-over-year increase [9]. Market Outlook - Estimates for Allstate have trended upward, with a consensus estimate shift of 7.33% in the past month [10]. - The stock has a Zacks Rank 3 (Hold), indicating an expectation of in-line returns in the coming months [12]. - Allstate's overall VGM Score is A, indicating strong performance across growth, momentum, and value metrics [11].

Company Overview - The Allstate Corporation is the third-largest property-casualty insurer and the largest publicly-held personal lines carrier in the U.S. [12] - The company provides a range of life insurance and investment products to approximately 16 million households through over 12,000 exclusive agencies and financial specialists in the U.S. and Canada [12]. Investment Potential - Allstate has a Zacks Rank of 3 (Hold) and a VGM Score of A, indicating solid performance potential [13]. - The company is forecasted to have year-over-year earnings growth of 14.3% for the current fiscal year, supported by upward revisions from 10 analysts in the last 60 days [13]. - The Zacks Consensus Estimate for Allstate's earnings has increased by $2.73 to $20.93 per share [13]. - Allstate boasts an average earnings surprise of +57.7%, suggesting strong performance relative to expectations [13]. Recommendation - With a solid Zacks Rank and top-tier Growth and VGM Style Scores, Allstate is recommended for investors' consideration [14].

Core Insights - Allstate Insurance Company of Canada is launching a campaign to promote safe travel for pets as many Canadians prepare for summer road trips [1][4] - A survey reveals that while 84% of pet owners travel with their pets annually, only 50% use restraints, indicating a significant safety concern [2][6] Survey Findings - 84% of dog and cat owners travel with their pets at least once a year [2] - Only 50% of pet owners use restraints, with 12% using harnesses attached to seatbelts and 32% using crates [2] - 47% of pet owners report their pets are unprotected in the event of a crash [2] - Dog owners are more likely to leave their pets unrestrained (61%), while 63% of cat owners keep their pets restrained [2] Safety Recommendations - Allstate emphasizes the dangers of unrestrained pets in vehicles, which can lead to serious injuries during sudden stops or crashes [3] - Recommendations include using appropriate restraints, securing carriers or harnesses properly, and never leaving pets alone in parked cars [8] - Additional advice includes planning for comfort and safety, updating pet identification, and being mindful of motion sickness [8] Company Background - Allstate Insurance Company of Canada has been serving Canadians since 1953, focusing on prevention and protection products [9] - The company aims to make a positive impact in communities through charitable partnerships and volunteerism [9]

Financial Data and Key Metrics Changes - Revenues for the second quarter were $16.6 billion, a 5.8% increase compared to 2024 [6] - Net income was $2.1 billion, with adjusted net income at $1.6 billion or $5.94 per diluted share [6] - Adjusted net income return on equity was 28.6% over the trailing twelve months [7] Business Line Data and Key Metrics Changes - Total policies in force increased by 2.08 million, a 4.2% rise year-over-year, primarily driven by Allstate Protection Plans [6] - Personal Property Liability policies in force grew by 0.8% [6] - The Property Liability business generated nearly $1.3 billion in underwriting income, with a combined ratio of 91.1, a 10-point improvement from the prior year [15] - Auto insurance combined ratio improved to 86%, a 9.9-point improvement from 2024 [16] - Homeowners business had a combined ratio of 102% due to $1.6 billion in catastrophe losses, despite strong underlying margins [17] Market Data and Key Metrics Changes - Auto insurance policies in force increased by 2.4% compared to the prior year quarter, with growth in active brands [20] - Homeowners insurance policies in force grew by 2.3% relative to the prior year quarter [18] - The Protection Services segment generated $867 million in revenue for the quarter, reflecting a 16.6% increase year-over-year [12] Company Strategy and Development Direction - The company aims to increase personal property liability market share and expand customer protection [5] - The Transform and Grow strategy is in Phase four, focusing on new product offerings and enhanced distribution capabilities [8] - The company is leveraging advanced technology and pricing sophistication to improve competitiveness and customer access [10][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the transformative growth strategy, indicating it is working effectively [32] - The company is optimistic about growth in New York and New Jersey, anticipating regulatory approvals for new products [34] - Management highlighted the importance of retention and customer interaction to sustain growth [82] Other Important Information - The company completed divestitures of the employee voluntary benefits and group health businesses for a combined $3.25 billion [25] - Shareholder returns included $1.1 billion in dividends and $445 million in share repurchases [26] Q&A Session Summary Question: Can you talk about potential tailwinds and headwinds for growth? - Management acknowledged the decline of inactive brands but expects the rate of decline to diminish over time, emphasizing commitment to growth in personal property liability [31][32] Question: How do you think about the lifetime profitability of the business? - Management stated that all written business is evaluated for lifetime value, ensuring a clean book and strong profitability across channels [35][36] Question: Can you discuss frequency trends and the impact of technology? - Management noted a downward trend in auto frequency, driven by advanced safety features in vehicles, while also highlighting the importance of telematics [44][42] Question: Can you provide insights on the reinsurance program changes? - The company increased its total catastrophe reinsurance limit to over $11 billion, with a 10% risk-adjusted decrease in cost [49][50] Question: How is the competitive environment affecting growth? - Management believes the company is well-positioned to grow and earn attractive returns, citing broad distribution and competitive pricing as key advantages [78][79] Question: What is the outlook for the Canadian business? - Management expressed confidence in the Canadian market, indicating a belief in the company's ability to succeed there [59] Question: How do you view the direct-to-consumer strategy? - Management expects the direct-to-consumer segment to grow, with advertising expenses aligned with customer acquisition strategies [90][92]

Financial Data and Key Metrics Changes - Revenues for the second quarter were $16.6 billion, a 5.8% increase compared to 2024 [5] - Net income was $2.1 billion, with adjusted net income at $1.6 billion or $5.94 per diluted share [5] - Adjusted net income return on equity was 28.6% over the trailing twelve months [6] Business Line Data and Key Metrics Changes - Total policies in force increased by 2.08 million, or 4.2% year-over-year, led by Allstate Protection Plans [5] - Personal Property Liability policies in force increased by 0.8% [5] - The Property Liability business generated nearly $1.3 billion of underwriting income with a combined ratio of 91.1, a 10-point improvement from the prior year [14] - Homeowners business had a combined ratio of 102% due to $1.6 billion in catastrophe losses, despite strong underlying margins [15] Market Data and Key Metrics Changes - Auto insurance policies in force increased by 0.5% year-over-year, while homeowners policies grew by 2.3% [16] - The auto insurance segment saw a combined ratio of 86%, a 9.9-point improvement from 2024 [14] - The Protection Services segment generated $867 million in revenue, reflecting a 16.6% increase year-over-year [10] Company Strategy and Development Direction - The company aims to increase personal property liability market share and expand customer protection [4] - The Transform and Grow strategy is in Phase four, focusing on new auto insurance products and enhanced distribution channels [6][7] - The company is leveraging advanced technology and large language models to improve customer access and claims processes [7] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the transformative growth strategy, indicating that it is generating significant new business [28] - The company is optimistic about growth in New York and New Jersey, anticipating regulatory approvals for new products [31] - Management highlighted the importance of retention and customer interaction to sustain growth [21] Other Important Information - The company completed divestitures of the employee voluntary benefits and group health businesses for a combined $3.25 billion [22] - Shareholder returns included $1.1 billion in dividends and $445 million in share repurchases [23] Q&A Session Summary Question: Can you discuss potential tailwinds and headwinds for growth? - Management acknowledged the decline of inactive brands but noted that the impact on overall results will diminish over time [28] Question: How do you view the lifetime profitability of the business across different channels? - Management emphasized confidence in the lifetime value of all written policies, supported by sophisticated analytical systems [32] Question: Can you elaborate on frequency trends and the impact of technology? - Management noted a downward trend in auto frequency, driven by advanced safety features in vehicles [39] Question: What changes have been made to the reinsurance program this year? - The company increased its total catastrophe reinsurance limit to over $11 billion, up $2 billion from last year, with a 10% risk-adjusted decrease in cost [44] Question: How is the competitive environment affecting new business retention? - Management expressed confidence in their competitive positioning, citing broad distribution and improved customer value [72] Question: What is the company's long-term view on the Canadian market? - Management remains optimistic about winning in Canada despite competitors exiting the market [54]

Core Insights - The Allstate Corporation reported a strong second-quarter 2025 adjusted net income of $5.94 per share, exceeding the Zacks Consensus Estimate by 78.9% and significantly up from $1.61 a year ago [1][9] - Operating revenues increased by 6.1% year over year to $16.8 billion, although this figure fell short of the consensus estimate by 2.9% [1][2] Financial Performance - The growth in earnings was driven by an increase in premiums and improved investment income in the Property-Liability business, along with reduced costs and expenses [2] - Property and casualty insurance premiums rose by 7.8% year over year to $15 billion, while net investment income reached $754 million, a 5.9% increase year over year, although it missed the consensus estimate of $815.4 million [3][9] - Total costs and expenses decreased by 3% year over year to $14.8 billion, attributed to lower claims and benefits, leading to a pretax income of $2.7 billion, up from $430 million a year ago [4][9] Segment Performance - The Property-Liability segment's earned premiums increased by 7.5% year over year to $14.3 billion, despite falling short of the consensus estimate by 1.4%. Underwriting income improved to $1.3 billion from a loss of $145 million in the prior year [6] - The Protection Services segment reported revenues of $867 million, a 12.2% year-over-year increase, while adjusted net income rose to $60 million from $55 million [7] - The Allstate Health and Benefits segment saw a significant decline in premiums and contract charges by 50.4% year over year to $235 million due to the sale of the Employer Voluntary Benefits unit, with adjusted net income dropping 93.1% year over year [7] Financial Position - As of June 30, 2025, Allstate had a cash balance of $995 million, up from $704 million at the end of 2024. Total assets increased to $115.9 billion from $111.6 billion [8] - Debt remained stable at $8.1 billion, while total equity rose to $24 billion from $21.4 billion at the end of 2024. Book value per common share increased by 32.6% year over year to $82.40 [8]

Financial Performance - Allstate's Q2 2025 revenues reached $16633 million, a 5.8% increase year-over-year[5] - The adjusted net income for Q2 2025 was $1591 million, resulting in a return on equity of 28.6%, which is 7.0 percentage points higher than the previous year[5] - Underwriting income for the first half of 2025 reached $4 billion, a 138.4% increase compared to the prior year[7] Property-Liability Segment - Personal lines policies in force grew to 37.7 million[5, 7] - The property-liability combined ratio was 91.1 in Q2 2025, a decrease of 10.0 percentage points year-over-year[14] - Auto insurance underwriting income was $1331 million in Q2 2025, a $961 million increase year-over-year, with a combined ratio of 86.0[14] Protection Services Segment - Protection Services revenue for Q2 2025 was $867 million[10] - Adjusted net income for Protection Services over the trailing twelve months was $223 million, a 59.3% increase year-over-year[10] - Policies in force for Protection Services reached 170 million, a 7.4% increase year-over-year[10] Investments and Capital Management - The investment portfolio value reached $77.4 billion, a 9.7% increase year-over-year[13] - Net investment income for Q2 2025 was $754 million, a 5.9% increase year-over-year[13] - The company divested Employer Voluntary Benefits and Group Health businesses for a combined $3.25 billion[24]

Core Insights - Allstate reported $16.78 billion in revenue for Q2 2025, a year-over-year increase of 6.1%, but fell short of the Zacks Consensus Estimate by 2.91% [1] - The EPS for the quarter was $5.94, significantly higher than the $1.61 reported a year ago, resulting in an EPS surprise of +78.92% compared to the consensus estimate of $3.32 [1] Financial Performance Metrics - The Property-Liability Combined Ratio was 91.1%, better than the average estimate of 97.2% [4] - The Property-Liability Loss Ratio stood at 70.3%, outperforming the average estimate of 75.2% [4] - The Property-Liability Expense Ratio was 20.8%, lower than the average estimate of 21.8% [4] - Net Premiums Earned in Property-Liability reached $14.35 billion, slightly below the average estimate of $14.55 billion, but represented a year-over-year increase of 7.6% [4] - Other Revenue in Property-Liability was reported at $504 million, exceeding the average estimate of $496.78 million, with a year-over-year increase of 14.3% [4] - Net Investment Income for Property-Liability was $687 million, below the average estimate of $742.78 million, but showed a year-over-year increase of 6.8% [4] - Accident and Health Insurance premiums and contract charges in Allstate Health and Benefits were $235 million, significantly lower than the estimated $350.91 million, reflecting a year-over-year decrease of 50.4% [4] - Corporate and Other Net Investment Income was reported at $37 million, surpassing the average estimate of $24.9 million, with a year-over-year increase of 76.2% [4] - Revenues from Property-Liability were $15.35 billion, below the average estimate of $15.76 billion, but represented a year-over-year increase of 7.2% [4] - Net Investment Income for Allstate Health and Benefits was $5 million, significantly lower than the average estimate of $19.98 million, indicating a year-over-year decrease of 80% [4] - Homeowners Net Premiums Earned were $3.77 billion, slightly below the average estimate of $3.86 billion, with a year-over-year increase of 15.9% [4] Stock Performance - Allstate shares have returned -3.1% over the past month, contrasting with the Zacks S&P 500 composite's +3.4% change [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

Company Performance - Allstate reported quarterly earnings of $5.94 per share, significantly exceeding the Zacks Consensus Estimate of $3.32 per share, and up from $1.61 per share a year ago, representing an earnings surprise of +78.92% [1] - The company posted revenues of $16.78 billion for the quarter ended June 2025, which was 2.91% below the Zacks Consensus Estimate, but an increase from $15.82 billion year-over-year [2] - Over the last four quarters, Allstate has surpassed consensus EPS estimates four times, but has only topped revenue estimates once [2] Stock Outlook - Allstate shares have increased by approximately 0.6% since the beginning of the year, underperforming compared to the S&P 500's gain of 8.3% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The current consensus EPS estimate for the upcoming quarter is $4.38 on revenues of $17.54 billion, and for the current fiscal year, it is $18.29 on revenues of $69.06 billion [7] Industry Context - The Insurance - Property and Casualty industry, to which Allstate belongs, is currently ranked in the bottom 35% of over 250 Zacks industries, indicating potential challenges ahead [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Allstate's stock performance [5] - The Zacks Rank for Allstate is currently 3 (Hold), suggesting that the shares are expected to perform in line with the market in the near future [6]

[Part I Financial Information](index=3&type=section&id=Part%20I%20Financial%20Information) [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Net income for Q2 and H1 2025 reached **$2.1 billion** and **$2.7 billion** respectively, driven by higher premiums and asset disposition gains Condensed Consolidated Statements of Operations (unaudited) | (In millions, except per share data) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | **Total revenues** | **$16,633** | **$15,714** | **$33,085** | **$30,973** | | Property and casualty insurance premiums | $15,041 | $13,952 | $29,739 | $27,464 | | **Total costs and expenses** | **$14,820** | **$15,284** | **$30,553** | **$29,079** | | Gain on disposition of operations | $890 | $— | $890 | $— | | **Net income** | **$2,099** | **$347** | **$2,695** | **$1,545** | | **Net income applicable to common shareholders** | **$2,079** | **$301** | **$2,645** | **$1,490** | | **Net income per common share - Diluted** | **$7.76** | **$1.13** | **$9.85** | **$5.58** | Condensed Consolidated Statements of Financial Position (unaudited) | ($ in millions) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total investments** | **$77,437** | **$72,610** | | **Total assets** | **$115,894** | **$111,617** | | **Total liabilities** | **$91,889** | **$90,250** | | **Total Allstate shareholders' equity** | **$24,019** | **$21,442** | | **Total liabilities and equity** | **$115,894** | **$111,617** | Condensed Consolidated Statements of Cash Flows (unaudited) | ($ in millions) | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | **$3,837** | **$4,025** | | **Net cash used in investing activities** | **($2,501)** | **($3,896)** | | Proceeds from disposition of operations, net of cash transferred | $1,885 | $— | | **Net cash used in financing activities** | **($954)** | **($252)** | | Treasury stock purchases | ($439) | $— | | **Net increase (decrease) in cash** | **$382** | **($123)** | [Note 3: Dispositions](index=10&type=section&id=Note%203%3A%20Dispositions) The company completed the sale of its EVB business for **$1.9 billion**, generating a **$643 million** after-tax gain, and also sold its group health business - On April 1, 2025, the company closed the sale of its employer voluntary benefits (EVB) business for **$1.9 billion** in cash, recording a gain of **$890 million** (**$643 million** after-tax) in Q2 2025[28](index=28&type=chunk) - On January 30, 2025, an agreement was reached to sell the group health business for approximately **$1.25 billion**. The transaction closed on July 1, 2025, and a gain is expected in Q3 2025[31](index=31&type=chunk) [Note 4: Reportable Segments](index=11&type=section&id=Note%204%3A%20Reportable%20Segments) Segment performance improved significantly, with Allstate Protection's underwriting income reaching **$1.28 billion**, while Health and Benefits' adjusted net income declined due to dispositions Segment Financial Performance (Q2 2025 vs Q2 2024) | ($ in millions) | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | **Underwriting income (loss)** | | | | Allstate Protection | $1,283 | $(142) | | Run-off Property-Liability | $(3) | $(3) | | **Adjusted net income (loss), after-tax** | | | | Protection Services | $60 | $55 | | Allstate Health and Benefits | $4 | $58 | Property-Liability Insurance Premiums by Line (Q2 2025 vs Q2 2024) | ($ in millions) | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Auto | $9,528 | $9,079 | | Homeowners | $3,771 | $3,255 | | Other personal lines | $779 | $701 | [Note 5: Investments](index=16&type=section&id=Note%205%3A%20Investments) The investment portfolio grew to **$77.4 billion**, with net investment income rising to **$754 million** in Q2 2025, despite **$144 million** in net investment losses Investment Portfolio Composition | ($ in millions) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Fixed income securities, at fair value | $54,435 | $52,747 | | Equity securities, at fair value | $2,397 | $4,463 | | Limited partnership interests | $9,194 | $9,255 | | Short-term investments, at fair value | $9,640 | $4,537 | | **Total** | **$77,437** | **$72,610** | Net Investment Income (Q2 2025 vs Q2 2024) | ($ in millions) | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Fixed income securities | $602 | $571 | | Limited partnership interests | $74 | $103 | | Short-term investments | $97 | $62 | | **Total Net investment income** | **$754** | **$712** | - Net investment losses were **$144 million** in Q2 2025, primarily driven by losses on sales of fixed income securities of **$245 million**, partially offset by valuation gains on equity investments of **$170 million**[48](index=48&type=chunk) [Note 9: Reserve for Property and Casualty Insurance Claims and Claims Expense](index=37&type=section&id=Note%209%3A%20Reserve%20for%20Property%20and%20Casualty%20Insurance%20Claims%20and%20Claims%20Expense) Net P&C claims reserve increased to **$34.9 billion**, with H1 2025 incurred claims at **$21.1 billion**, including **$4.19 billion** in catastrophe losses, offset by **$621 million** in favorable reestimates Rollforward of Net P&C Claims Reserve (Six months ended June 30, 2025) | ($ in millions) | Amount | | :--- | :--- | | Net balance as of January 1 | $33,315 | | Total incurred claims and claims expense | $21,064 | | *Current year* | *$21,685* | | *Prior years (favorable reestimate)* | *($621)* | | Total paid claims and claims expense | ($19,523) | | **Net balance as of June 30** | **$34,856** | - Catastrophe losses for the first six months of 2025 were **$4.19 billion**, a significant increase from **$2.85 billion** in the same period of 2024[153](index=153&type=chunk) - Favorable prior year non-catastrophe reserve reestimates were **$378 million** for Q2 2025 and **$616 million** for the first six months of 2025, primarily driven by the auto insurance line[41](index=41&type=chunk)[156](index=156&type=chunk) [Note 12: Guarantees and Contingent Liabilities](index=41&type=section&id=Note%2012%3A%20Guarantees%20and%20Contingent%20Liabilities) The company faces various legal proceedings, with an estimated aggregate reasonably possible loss between zero and **$72 million** pre-tax, including class actions - The company estimates the aggregate range of reasonably possible loss for certain disclosed legal matters, in excess of amounts already accrued, is between zero and **$72 million**, pre-tax[182](index=182&type=chunk) - Allstate is defending several putative class actions challenging its depreciation practices in homeowner claims, its valuation methods for total loss auto claims, and its handling of uninsured/underinsured motorist coverage in Arizona[184](index=184&type=chunk)[185](index=185&type=chunk)[186](index=186&type=chunk) - The Department of Justice filed a civil suit against National General entities alleging violations related to its collateral protection insurance program[191](index=191&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=49&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management's discussion highlights significant financial improvement driven by the 'Transformative Growth' strategy, including underwriting income turnaround and strategic asset dispositions [Highlights](index=50&type=section&id=Highlights) Consolidated net income applicable to common shareholders surged to **$2.08 billion** in Q2 2025, driven by higher premiums and the EVB sale gain, with total revenues reaching **$16.63 billion** - Consolidated net income applicable to common shareholders increased by **$1.78 billion** to **$2.08 billion** in Q2 2025 compared to Q2 2024[223](index=223&type=chunk) - Total revenues for Q2 2025 increased by **$919 million** to **$16.63 billion**, primarily due to higher homeowners and auto insurance policies in force and premium rate increases[223](index=223&type=chunk) - Book value per diluted common share was **$82.40** as of June 30, 2025, a **32.6%** increase from June 30, 2024[225](index=225&type=chunk) [Property-Liability Operations](index=53&type=section&id=Property-Liability%20Operations) The Property-Liability business saw a significant turnaround, with the combined ratio improving to **91.1%** in Q2 2025 from **101.1%**, driven by a lower loss ratio and premium increases Property-Liability Underwriting Results (Q2 2025 vs Q2 2024) | ($ in millions, except ratios) | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Premiums written | $15,047 | $14,279 | | Premiums earned | $14,346 | $13,339 | | Underwriting income (loss) | $1,280 | $(145) | | **Combined ratio** | **91.1%** | **101.1%** | | Loss ratio | 70.3% | 79.8% | | Expense ratio | 20.8% | 21.3% | | Effect of catastrophe losses on combined ratio | 13.9 pts | 15.9 pts | [Allstate Protection](index=55&type=section&id=Allstate%20Protection) The Allstate Protection segment generated **$1.28 billion** in underwriting income in Q2 2025, a significant recovery, driven by improved auto and homeowners combined ratios due to rate increases - Auto insurance premiums written increased **2.7%** in Q2 2025, driven by rate increases and a **24.8%** rise in new issued applications[250](index=250&type=chunk)[251](index=251&type=chunk) - Homeowners insurance premiums written grew **14.3%** in Q2 2025, reflecting higher average premiums from rate increases and a **2.3%** growth in policies in force[251](index=251&type=chunk)[255](index=255&type=chunk) - Catastrophe losses for the segment were **$1.99 billion** in Q2 2025, down from **$2.12 billion** in Q2 2024. Wind/hail events were the primary cause of losses[244](index=244&type=chunk)[272](index=272&type=chunk) - Favorable prior year reserve reestimates for the segment were **$372 million** in Q2 2025, mainly from personal auto lines[279](index=279&type=chunk)[280](index=280&type=chunk) [Run-off Property-Liability](index=63&type=section&id=Run-off%20Property-Liability) The Run-off Property-Liability segment reported a stable underwriting loss of **$3 million** for Q2 2025, with net reserves for legacy claims decreasing slightly to **$1.36 billion** Run-off Net Reserves | ($ in millions) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Asbestos claims | $738 | $774 | | Environmental claims | $245 | $259 | | Other run-off claims | $377 | $381 | | **Total Net reserves** | **$1,360** | **$1,414** | [Protection Services](index=65&type=section&id=Protection%20Services) The Protection Services segment reported adjusted net income of **$60 million** in Q2 2025, driven by Allstate Protection Plans' increased premiums, with total policies in force growing **7.4%** Protection Services Financial Summary (Q2 2025 vs Q2 2024) | ($ in millions) | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Premiums written | $733 | $676 | | Revenues | $868 | $772 | | Adjusted net income | $60 | $55 | | *Allstate Protection Plans* | *$51* | *$41* | - Policies in force increased by **7.4%** to **169.7 million** as of June 30, 2025, mainly due to growth at Allstate Protection Plans[290](index=290&type=chunk)[291](index=291&type=chunk) [Allstate Health and Benefits](index=66&type=section&id=Allstate%20Health%20and%20Benefits) The Allstate Health and Benefits segment is transforming with the completed sale of its EVB business and pending group health sale, leading to adjusted net income falling to **$4 million** in Q2 2025 - The sale of the employer voluntary benefits (EVB) business closed on April 1, 2025. The sale of the group health business closed on July 1, 2025[295](index=295&type=chunk)[296](index=296&type=chunk) - Adjusted net income for Q2 2025 was **$4 million**, down from **$58 million** in Q2 2024. Excluding the sold EVB business, adjusted net income decreased by **$26 million**, primarily due to higher benefit utilization in group and individual health[233](index=233&type=chunk)[300](index=300&type=chunk) - A goodwill impairment test for the retained individual health business did not result in an impairment, but the excess of fair value over carrying amount was less than **10%**, indicating potential future risk[298](index=298&type=chunk) [Investments](index=68&type=section&id=Investments) The investment portfolio grew to **$77.4 billion**, with a Q2 2025 risk reduction strategy implemented, resulting in net investment income of **$754 million** despite **$144 million** in net losses from repositioning - In Q2 2025, the company lowered its allocation to investment risk, reducing public equity securities and high-yield bonds and shortening the fixed income portfolio duration[307](index=307&type=chunk) Net Investment Income by Strategy (Q2 2025 vs Q2 2024) | ($ in millions) | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Market-based | $733 | $667 | | Performance-based | $90 | $121 | | **Investment income, before expense** | **$823** | **$788** | - Net losses on investments and derivatives were **$144 million** in Q2 2025, primarily due to losses on sales of fixed income securities (**$245 million**) as part of the portfolio repositioning[330](index=330&type=chunk)[331](index=331&type=chunk) - As of June 30, 2025, **92.3%** of the consolidated fixed income securities portfolio was rated investment grade[312](index=312&type=chunk) [Capital Resources and Liquidity](index=77&type=section&id=Capital%20Resources%20and%20Liquidity) Total capital resources grew to **$32.1 billion**, improving the debt-to-capital ratio to **25.2%**, driven by strong net income and unrealized gains, while the company returned capital to shareholders and maintained strong liquidity Capital Resources Summary | ($ in millions) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Allstate shareholders' equity | $24,019 | $21,442 | | Debt | $8,087 | $8,085 | | **Total capital resources** | **$32,106** | **$29,527** | | Ratio of debt to capital resources | 25.2% | 27.4% | - The Board authorized a new **$1.50 billion** share repurchase program in February 2025. As of June 30, 2025, **$1.06 billion** remained available under this program[338](index=338&type=chunk) - In May 2025, Moody's affirmed AIC's financial strength rating of **Aa3** and changed the outlook from negative to stable. S&P affirmed its **A+** rating with a stable outlook[341](index=341&type=chunk) - The parent holding company has deployable assets of **$3.98 billion** as of June 30, 2025, which will be further increased by proceeds from the group health disposition in Q3 2025[347](index=347&type=chunk) [Controls and Procedures](index=79&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded the company's disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting during the quarter - The principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures are effective in providing reasonable assurance that material information is properly disclosed[356](index=356&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls[357](index=357&type=chunk) [Part II Other Information](index=80&type=section&id=Part%20II%20Other%20Information) [Legal Proceedings](index=80&type=section&id=Item%201.%20Legal%20Proceedings) This section incorporates by reference the detailed discussion of legal and regulatory matters from Note 12 of the financial statements, covering various lawsuits and inquiries - Information regarding legal proceedings is incorporated by reference from the discussion under "Regulation and compliance" and "Legal and regulatory proceedings and inquiries" in Note 12 of the condensed consolidated financial statements[359](index=359&type=chunk) [Risk Factors](index=80&type=section&id=Item%201A.%20Risk%20Factors) The company reported no material changes to the risk factors previously disclosed in its 2024 Annual Report on Form 10-K - There have been no material changes in the company's risk factors from those disclosed in the 2024 Annual Report on Form 10-K[360](index=360&type=chunk) [Issuer Purchases of Equity Securities](index=80&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%2C%20Use%20of%20Proceeds%2C%20and%20Issuer%20Purchases%20of%20Equity%20Securities) During Q2 2025, Allstate repurchased **1.81 million** shares at an average price of **$199.46**, as part of a **$1.50 billion** program with **$1.06 billion** remaining Issuer Purchases of Equity Securities (Q2 2025) | Period | Total number of shares purchased | Average price paid per share | Maximum approximate dollar value that may yet be purchased under the plans or programs ($ in billions) | | :--- | :--- | :--- | :--- | | April 2025 | 592,338 | $193.89 | | | May 2025 | 662,738 | $204.12 | | | June 2025 | 555,570 | $199.85 | | | **Total** | **1,810,646** | **$199.46** | **$1.06 billion** | [Other Information](index=80&type=section&id=Item%205.%20Other%20Information) Two executives, Suren Gupta and Thomas J. Wilson, adopted Rule 10b5-1 trading plans for the potential sale of company common stock during the quarter - On June 9, 2025, Suren Gupta adopted a Rule 10b5-1 trading plan for the sale of up to **48,400** shares of common stock[362](index=362&type=chunk) - On June 27, 2025, Thomas J. Wilson adopted a Rule 10b5-1 trading plan for the sale of up to **201,684** shares of common stock[363](index=363&type=chunk) [Exhibits](index=81&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the Form 10-Q, including corporate governance documents, officer certifications, and XBRL data files - The exhibits filed with this Form 10-Q include the Restated Certificate of Incorporation, Amended and Restated Bylaws, officer certifications, and Inline XBRL documents[367](index=367&type=chunk)