Financial Performance - Allstate's total revenue reached $16.5 billion in the fourth quarter and $64.1 billion for the full year, representing increases of 11.3% and 12.3% respectively, compared to the prior year[6] - Net income applicable to common shareholders was $1.9 billion in the fourth quarter and $4.6 billion for the full year[6,8] - The adjusted net income return on equity was 26.8% over the last twelve months[6,8] Underwriting Results - Property-Liability insurance premiums reached $13.933 billion in the fourth quarter, up 10.6%, and $53.866 billion for the full year, up 11.2%[8] - The Property-Liability combined ratio was 86.9 in Q4, a decrease of 2.6 percentage points[10] - Auto Insurance underwriting income was $603 million in Q4, with a combined ratio of 93.5, improved by 5.4 percentage points[10] - Homeowners Insurance underwriting income was $1.070 billion in Q4, but the combined ratio increased to 69.8, up 7.8 percentage points[10] Strategic Initiatives - The sale of Group Health, combined with the previously announced Employer Voluntary Benefits sale, will generate $3.25 billion of total expected proceeds[6,7,33] - The adjusted expense ratio decreased from 27.9 in 2019 to 23.1 in 2024 due to Transformative Growth initiatives[9] Business Segment Performance - Protection Plans revenues increased 20.3% to $528 million in the fourth quarter and 21.2% to $1.987 billion for the full year[29,30] - Protection Plans adjusted net income was $37 million for the quarter and $157 million for the year[30] Investment Portfolio - Net investment income was $833 million in the fourth quarter, a 37.9% increase, and $3.092 billion for the full year, a 24.8% increase[8] - Market-based equity investments increased to $3.3 billion, representing 5% of the portfolio at year-end 2024[26] Policies in Force - Total policies in force reached 37.5 million[23] - Auto policies in force decreased by 347,000, a 1.4% decrease[23] - Homeowners policies in force increased by 173,000, a 2.4% increase[23] California Wildfire Impact - Gross losses from California wildfires are estimated at $2.0 billion, with reinsurance recoveries of $0.9 billion, resulting in net losses of $1.1 billion before tax[21]

Financial Performance - Consolidated revenues for Q4 2024 reached $16.5 billion, an increase of 11.3% compared to Q4 2023[9] - Net income applicable to common shareholders was $1.9 billion in Q4 2024, up 30.1% from $1.5 billion in the prior year quarter[9] - Adjusted net income for the full year 2024 was $4.9 billion, with an adjusted net income return on equity of 26.8%[9] - Total revenues for the twelve months ended December 31, 2024, reached $64,106 million, up from $57,094 million in 2023, marking an increase of 12.0%[33] - Net income attributable to Allstate for the twelve months ended December 31, 2024, was $4,667 million, a significant recovery from a net loss of $188 million in 2023[33] - Earnings per common share increased to $17.22 in 2024 from a loss of $1.20 in 2023, indicating a substantial turnaround[33] - Adjusted net income for the twelve months ended December 31, 2024, reached $4,906 million, significantly higher than $251 million in 2023, resulting in adjusted diluted earnings per share of $18.32 compared to $0.95[42] - The return on Allstate common shareholders' equity for 2024 was 25.8%, a substantial improvement from a negative 2.0% in 2023[42] Premiums and Policies - Property-Liability earned premiums increased by 10.6% to $13.9 billion in Q4 2024, driven by higher average premiums[10] - Total policies in force grew to 208,345 thousand, a 7.2% increase from the previous year[4] - Protection Plans revenues reached nearly $2.0 billion for the year, with policies in force increasing by 60% since 2019 to 160 million[8] - Earned premiums increased by 15.3% year-over-year, driven by a 2.4% growth in policies in force and higher average premiums[19] - Property and casualty insurance premiums rose to $56,388 million in 2024, compared to $50,670 million in 2023, reflecting an increase of 11.0%[33] Losses and Ratios - Catastrophe losses for the year were $4.964 billion, a decrease of 11.9% compared to the previous year[4] - Catastrophe losses in the fourth quarter amounted to $315 million, an increase of $294 million compared to the prior year quarter, primarily due to Hurricane Milton[19] - The recorded Property-Liability combined ratio improved to 86.9 in Q4 2024, a 2.6-point decrease from the prior year[10] - The recorded homeowners insurance combined ratio was 69.8, reflecting a 7.8-point increase from the previous year, while the underlying combined ratio improved by 1.8 points to 59.5[19] - The underlying combined ratio for the Property-Liability segment improved to 83.0% in Q4 2024 from 86.9% in Q4 2023, indicating better underwriting performance[45] - The combined ratio for Allstate Protection - Auto Insurance decreased to 93.5% in Q4 2024 from 98.9% in Q4 2023, reflecting enhanced operational efficiency[45] - The effect of catastrophe losses on the combined ratio for the twelve months ended December 31, 2024, was a reduction of 27.8%, down from 38.6% in 2023, showcasing improved risk management[45] Investments - Investment income increased to $3.1 billion in 2024, a 24.8% increase year-over-year due to repositioning into higher yielding fixed income securities[8] - Net investment income for the fourth quarter was $833 million, an increase of $229 million from the prior year quarter, attributed to repositioning into higher yielding fixed income securities[24] - The total return on the investment portfolio was (1.1)% for the fourth quarter and 3.8% for the full year 2024[27] - The company reported net investment income of $3,092 million for the twelve months ended December 31, 2024, compared to $2,478 million in 2023, an increase of 24.7%[33] - Net gains on investments and derivatives for the twelve months ended December 31, 2024, were $225 million, compared to $300 million in 2023, indicating a slight decline in investment performance[42] Assets and Liabilities - Total assets increased to $111,617 million in 2024 from $103,362 million in 2023, representing a growth of 8.1%[31] - Total liabilities grew to $90,250 million in 2024, up from $85,732 million in 2023, an increase of 5.9%[31] - The reserve for property and casualty insurance claims increased to $41,917 million in 2024 from $39,858 million in 2023, a rise of 5.2%[31] - The total equity attributable to Allstate shareholders increased to $21,442 million in 2024 from $17,770 million in 2023, a growth of 20.0%[31] Strategic Initiatives - The Health and Benefits businesses are being sold for $3.25 billion, with two of the three businesses now under contract[8] - The strategy to divest the Employer Voluntary Benefits and Group Health businesses is expected to yield combined proceeds of $3.25 billion, generating a financial book gain of approximately $1.0 billion in 2025[23] Non-Recurring Items - The company reported non-recurring costs of $90 million in 2023, which were excluded from the adjusted net income calculation for that year[42] - The pension and other postretirement remeasurement losses for the twelve months ended December 31, 2024, were $(37) million, a significant improvement from $9 million in 2023, reflecting better management of retirement obligations[42]

Stocks rose in January, boosted by encouraging inflation data, optimism about President Donald Trump's pro-business agenda, and the announcement of a major AI infrastructure investment. But the month wasn't without its road bumps. The Trump administration roiled markets on the last day of the month with his plan to move forward with tariffs against China, Canada, and Mexico, three of America's largest trading partners. Plus, tech investors were caught off guard by the release of a surprisingly efficient Ch ...

The upcoming report from Allstate (ALL) is expected to reveal quarterly earnings of $6.35 per share, indicating an increase of 9.1% compared to the year-ago period. Analysts forecast revenues of $16.71 billion, representing an increase of 12.1% year over year.Over the last 30 days, there has been a downward revision of 5.3% in the consensus EPS estimate for the quarter, leading to its current level. This signifies the covering analysts' collective reconsideration of their initial forecasts over the course o ...

Core Viewpoint - Nationwide has announced a definitive agreement to acquire The Allstate Corporation's employer stop loss segment for $1.25 billion, which is expected to close in the second half of 2025, enhancing its portfolio and service offerings for small businesses [1][2]. Group 1: Acquisition Details - The acquisition is valued at $1.25 billion and is anticipated to close in the second half of 2025, pending customary closing conditions [1]. - This transaction will allow Nationwide to expand its stop loss insurance offerings, which protect employers who self-fund their health insurance plans from excess losses [2][3]. Group 2: Strategic Implications - The acquisition is seen as a strong fit for Nationwide's mission to protect people and businesses, enabling the company to better serve the needs of business owners [2]. - It will broaden Nationwide Financial's portfolio, allowing the company to serve more customers and positioning it as a leading provider in the stop loss industry [3]. - The deal is expected to protect over 13,000 small businesses and complement Nationwide's existing market offerings, accelerating growth opportunities in employer benefits [3]. Group 3: Advisory Roles - Citi is acting as the exclusive financial advisor to Nationwide, while Squire Patton Boggs LLP serves as its legal advisor [4]. - J.P. Morgan and Ardea Partners are acting as financial advisors to Allstate, with Willkie Farr & Gallagher LLP as its legal advisor [4].

Core Viewpoint - The Allstate Corporation is expected to report its fourth-quarter 2024 results on February 5, 2025, with earnings estimated at $6.20 per share and revenues of $16.71 billion, indicating year-over-year growth in both earnings and revenues [1][2]. Earnings Estimates - The fourth-quarter earnings estimate has seen five upward revisions in the past 30 days, suggesting a positive outlook with a projected year-over-year growth of 6.5% for earnings and 12.1% for revenues [2][3]. - For the full year 2024, the revenue estimate stands at $64.32 billion, reflecting a 12.1% increase year-over-year, while the EPS estimate is $16.83, a significant rise from $0.95 a year ago [3]. Earnings Prediction Model - The company has a positive Earnings ESP of +4.69% and a Zacks Rank of 3 (Hold), indicating a likelihood of an earnings beat [4]. Revenue Drivers - Allstate's revenues are expected to benefit from improved net premiums earned across various business lines due to rate increases, with a consensus estimate indicating a 12.1% year-over-year growth in net premiums earned [6]. - Net investment income is projected to grow by 24.8% year-over-year, rising from $604 million [7]. - The underwriting income from the Auto brand is estimated at $658.3 million, a significant increase from $93 million a year ago, aided by expanding earned premiums and lower expenses [8]. Performance Metrics - The combined ratio for the Auto insurance business is expected to improve to 93.23% from 98.20% in the previous year, indicating better profitability [8]. - The consensus estimate for underwriting loss from Commercial Lines is projected to decrease to $19.6 million from $84 million a year ago [8]. Stock Performance - Allstate's stock has increased by 22.9% over the past year, outperforming the industry growth of 20.9% and the S&P 500 Index's 26.6% increase [10]. - Despite the stock appreciation, Allstate's valuation remains attractive, trading at 10.08X forward 12-month earnings, below its five-year median of 10.97X and the industry average of 28.05X [12]. Strategic Outlook - Allstate is positioned for steady revenue growth through a diversified product portfolio, strategic acquisitions, and disciplined pricing, with key initiatives aimed at enhancing operational efficiency and underwriting gains [14]. - The company is focusing on expanding its Protection Services business and reinvesting savings into technology and product management [14].

Group 1: Allstate - BofA expects Allstate Corp. to report $764 million in catastrophe losses for Q4, equating to a catastrophe load of 5.5% [2] - For Q1, BofA projects catastrophe losses of $1.46 billion, including $700 million from California wildfires, with expectations of higher losses from the Eaton fire compared to the Palisades fire [3] - Allstate is set to report Q4 financial results on Feb. 5, with expected earnings of $5.95 per share and revenue of $14.7 billion [4] Group 2: Chubb - BofA anticipates Chubb Ltd. to report $851 million in catastrophe losses for Q1, representing an 8.1% loss ratio impact [5] - The firm models $1.9 billion in catastrophe losses for Chubb in Q1, with $1.3 billion attributed to California wildfires [6] - Chubb is scheduled to report Q4 financial results on Jan. 28, with expected earnings of $5.46 per share and revenue of $12.277 billion [7] Group 3: Progressive - Analysts expect Progressive to report $104 million in catastrophe losses for December, totaling $340 million for Q4 [7] - BofA models Q1 catastrophe losses of $584 million for Progressive, including $90 million from California wildfires, with two-thirds of losses from the auto segment [8] - Progressive is set to report Q4 results on Jan. 29, with expected earnings of $3.52 per share and revenue of $18.357 billion [8]

Group 1 - The insurance industry faces increasing risks from wildfires and extreme heat due to climate change and rising global temperatures [1] - There is a growing frequency of extreme weather events impacting the insurance sector [1]

Economic Overview - The U.S. labor market added 256,000 jobs in December, significantly surpassing the estimate of 155,000, indicating strong job growth and economic resilience [1] - Despite robust job growth, major stock indices fell sharply on January 10, 2025, with the Dow Jones Industrial Average dropping 697 points, and the S&P 500 and Nasdaq declining by 1.5% and 1.6%, respectively [1] Interest Rate Outlook - JPMorgan economists suggest that the strong job creation makes a rate cut unlikely in the first half of 2025, as the Federal Reserve focuses on controlling inflation [2] - Goldman Sachs warns that while strong labor market data supports higher rates in the short term, slowing wage growth and cooling inflation could lead to rate cuts later in the year, assuming no new economic shocks occur [2] Bond Market Impact - Following the jobs data release, bond yields surged, with the 10-year Treasury Yield reaching 4.76% and the 30-year Treasury Yield climbing to 4.95%, making fixed-income investments more attractive compared to equities [3] Sector Impacts - Constellation Brands, Allstate Corporation, PG&E Corporation, and Citigroup experienced notable stock declines of 17.1%, 5.6%, 10.8%, and 2.5%, respectively [4] - Constellation Brands lowered its fiscal 2025 earnings outlook due to a 14% decline in wine and spirits sales, reflecting changing consumer preferences [5] - Allstate's stock decline is attributed to rising claims from Southern California wildfires, which may impact the insurer's financial stability [5] - PG&E's decline is linked to concerns over increasing liabilities from wildfire-related claims [5] - Citigroup's stock drop reflects broader concerns regarding the banking sector's exposure to higher borrowing costs and slower loan growth [5] Financial Strain on Insurers - Anticipated delays in interest rate cuts could lead to higher borrowing costs, which may negatively impact insurers like Allstate, already facing increased claims from natural disasters [6] - PG&E faces risks from higher liabilities related to fire claims, contributing to financial strain [6] Banking Sector Dynamics - A delay in interest rate cuts could have mixed effects on banking companies; while higher rates may improve net interest margins and profitability, prolonged elevated rates could reduce loan demand, particularly in mortgages and consumer lending, potentially slowing revenue growth [7]

Company Overview - Allstate Corporation (NYSE: ALL) has consistently outperformed sell-side estimates, leading to a significant rise in its share price over the past few years [1] - The company is a major player in the personal property and casualty insurance market, particularly excelling in auto insurance underwriting [1] Investment Philosophy - The investment philosophy emphasizes acquiring high-quality stocks and businesses that are managed by disciplined capital allocators, generate exceptional returns on capital, and can compound invested capital over long periods [1]