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Aallstate(ALL) - 2024 Q3 - Quarterly Report
ALLAallstate(ALL)2024-10-30 20:16
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Financial Performance - Total revenues for Q3 2024 were 16.627billion,comparedto16.627 billion, compared to 14.497 billion in Q3 2023, representing a 14.7% increase[9] - Net income attributable to Allstate for Q3 2024 was 1.190billion,asignificantimprovementfromanetlossof1.190 billion, a significant improvement from a net loss of 5 million in Q3 2023[9] - Earnings per common share (diluted) for Q3 2024 were 4.33,comparedtoalossof4.33, compared to a loss of 0.16 per share in Q3 2023[9] - Comprehensive income attributable to Allstate for Q3 2024 was 2.460billion,asignificantturnaroundfromalossof2.460 billion, a significant turnaround from a loss of 659 million in Q3 2023[10] - Net income for the nine months ended September 30, 2024, was 2,709million,asignificantimprovementfromanetlossof2,709 million, a significant improvement from a net loss of 1,700 million in the same period of 2023[16] - Net income for Q3 2024 was 1.164billion,comparedtoanetlossof1.164 billion, compared to a net loss of 4 million in Q3 2023[21] - Net income for the nine months ended September 30, 2024, was 2.709billion,comparedtoanetlossof2.709 billion, compared to a net loss of 1.7 billion for the same period in 2023[21] - Basic earnings per share for Q3 2024 were 4.39,comparedtoalossof4.39, compared to a loss of 0.16 per share in Q3 2023[21] - Diluted earnings per share for Q3 2024 were 4.33,comparedtoalossof4.33, compared to a loss of 0.16 per share in Q3 2023[21] - Consolidated net income applicable to common shareholders was 1.16billioninQ32024,comparedtoalossof1.16 billion in Q3 2024, compared to a loss of 41 million in Q3 2023, primarily due to improved underwriting results[141] - Total revenues increased 14.7% to 16.63billioninQ32024comparedtothesameperiodin2023,drivenbypremiumrateincreasesandhigherrealizedcapitalgains[142]−Netinvestmentincomeincreased16.63 billion in Q3 2024 compared to the same period in 2023, driven by premium rate increases and higher realized capital gains[142] - Net investment income increased 94 million to 783millioninQ32024,primarilyduetohighermarket−basedinvestmentresults[143]−Allstateshareholders′equityincreasedto783 million in Q3 2024, primarily due to higher market-based investment results[143] - Allstate shareholders' equity increased to 20.88 billion as of September 30, 2024, from 17.77billionasofDecember31,2023,drivenbynetincomeandunrealizednetcapitalgains[144]−Bookvalueperdilutedcommonshareincreased47.217.77 billion as of December 31, 2023, driven by net income and unrealized net capital gains[144] - Book value per diluted common share increased 47.2% to 70.35 as of September 30, 2024, compared to 47.79asofSeptember30,2023[145]−ReturnonaverageAllstatecommonshareholders′equityforthetwelvemonthsendedSeptember30,2024was26.147.79 as of September 30, 2023[145] - Return on average Allstate common shareholders' equity for the twelve months ended September 30, 2024 was 26.1%, up from (14.7)% for the same period in 2023[145] Insurance Premiums and Claims - Property and casualty insurance premiums increased to 14.333 billion in Q3 2024, up 11.6% from 12.839billioninQ32023[9]−Propertyandcasualtyinsuranceclaimsandclaimsexpenseincreasedslightlyto12.839 billion in Q3 2023[9] - Property and casualty insurance claims and claims expense increased slightly to 10.409 billion in Q3 2024, up 1.7% from 10.237billioninQ32023[9]−TotalProperty−Liabilityinsurancepremiumsincreasedto10.237 billion in Q3 2023[9] - Total Property-Liability insurance premiums increased to 13.694 billion in Q3 2024, up from 12.270billioninQ32023[29]−Autoinsurancepremiumsgrewto12.270 billion in Q3 2023[29] - Auto insurance premiums grew to 9.270 billion in Q3 2024, a 11.1% increase from 8.345billioninQ32023[29]−Homeownersinsurancepremiumsroseto8.345 billion in Q3 2023[29] - Homeowners insurance premiums rose to 3.403 billion in Q3 2024, up 14.6% from 2.969billioninQ32023[29]−Propertyandcasualtyinsurancepremiumsincreasedto2.969 billion in Q3 2023[29] - Property and casualty insurance premiums increased to 14.33 billion in Q3 2024, up from 12.84billioninQ32023,reflectingagrowthof11.612.84 billion in Q3 2023, reflecting a growth of 11.6%[146] - Premiums written in Q3 2024 increased by 10.5% to 14.71 billion compared to 13.30billioninQ32023[147]−TotalpremiumswrittenforQ32024were13.30 billion in Q3 2023[147] - Total premiums written for Q3 2024 were 14.707 billion, up from 13.304billioninQ32023,whiletotalpremiumsearnedwere13.304 billion in Q3 2023, while total premiums earned were 13.694 billion, up from 12.270billioninQ32023[153]−Autoinsurancepremiumswrittenincreasedby8.812.270 billion in Q3 2023[153] - Auto insurance premiums written increased by 8.8% or 769 million in Q3 2024 compared to Q3 2023, and by 11.0% or 2.79billioninthefirstninemonthsof2024comparedtothesameperiodin2023[159]−Homeownersinsurancepremiumswrittenincreasedby15.52.79 billion in the first nine months of 2024 compared to the same period in 2023[159] - Homeowners insurance premiums written increased by 15.5% or 548 million in Q3 2024 compared to Q3 2023, driven by higher average premiums and policy growth[160] - Other personal lines premiums written increased by 20.9% or 141millioninQ32024comparedtoQ32023,primarilyduetoincreasesininvoluntaryautopoliciesandlandlordspolicies[161]−Commerciallinespremiumswrittendecreasedby25.7141 million in Q3 2024 compared to Q3 2023, primarily due to increases in involuntary auto policies and landlords policies[161] - Commercial lines premiums written decreased by 25.7% or 36 million in Q3 2024 compared to Q3 2023, due to strategic decisions to stop writing new business and non-renew certain policies[161] - Premiums earned rose by 1,424million(11.61,424 million (11.6%) to 13,694 million for the three months ended September 30, 2024, compared to 12,270millionin2023[172]−Premiumswrittenincreased3.012,270 million in 2023[172] - Premiums written increased 3.0% or 20 million in Q3 2024 compared to Q3 2023, driven by growth at Allstate Protection Plans[179] - Premiums and contract charges increased 5.2% or 24millioninQ32024and4.424 million in Q3 2024 and 4.4% or 60 million in the first nine months of 2024 compared to the same periods in 2023, primarily due to growth in individual health and group health[183] Investment Performance - Net investment income rose to 783millioninQ32024,a13.6783 million in Q3 2024, a 13.6% increase from 689 million in Q3 2023[9] - Unrealized net capital gains and losses improved to 1.299billioninQ32024,comparedtoalossof1.299 billion in Q3 2024, compared to a loss of 667 million in Q3 2023[10] - Total investments grew to 73,602millioninQ32024,upfrom73,602 million in Q3 2024, up from 66,677 million at the end of 2023[12] - Fixed income securities at fair value increased to 53,961millioninQ32024,upfrom53,961 million in Q3 2024, up from 48,865 million at the end of 2023[12] - Net investment income for Property-Liability increased to 708millioninQ32024,comparedto708 million in Q3 2024, compared to 627 million in Q3 2023[29] - Total fixed income securities portfolio grew to 53.961billionasofSeptember30,2024,upfrom53.961 billion as of September 30, 2024, up from 48.865 billion at December 31, 2023[30] - Net investment income for the three months ended September 30, 2024, was 783million,comparedto783 million, compared to 689 million in the same period in 2023, representing a 13.6% increase[31] - Fixed income securities generated 587millionininvestmentincomeforthethreemonthsendedSeptember30,2024,upfrom587 million in investment income for the three months ended September 30, 2024, up from 457 million in the same period in 2023, a 28.4% increase[31] - Equity securities investment income for the three months ended September 30, 2024, was 17million,comparedto17 million, compared to 15 million in the same period in 2023, a 13.3% increase[31] - Net gains on investments and derivatives for the three months ended September 30, 2024, were 243million,comparedtoanetlossof243 million, compared to a net loss of 86 million in the same period in 2023[33] - Gross realized gains for the three months ended September 30, 2024, were 201million,comparedto201 million, compared to 11 million in the same period in 2023, a significant increase[35] - Credit losses recognized in net income for the three months ended September 30, 2024, were 12million,comparedto12 million, compared to 19 million in the same period in 2023, a 36.8% decrease[36] - Unrealized net capital gains and losses included in accumulated other comprehensive income as of September 30, 2024, were 361millionafter−tax,comparedtoalossof361 million after-tax, compared to a loss of 604 million as of December 31, 2023[37] - The fair value of short-term investments as of September 30, 2024, was 6.99billion,comparedto6.99 billion, compared to 5.14 billion as of December 31, 2023, a 36.0% increase[41] - The carrying value of limited partnership interests as of September 30, 2024, was 8.925billion,comparedto8.925 billion, compared to 8.380 billion as of December 31, 2023, a 6.5% increase[40] - Other investments as of September 30, 2024, totaled 866million,comparedto866 million, compared to 1.055 billion as of December 31, 2023, a 17.9% decrease[43] - The company's credit loss allowance for fixed income securities as of September 30, 2024, was 22million,comparedto22 million, compared to 37 million as of December 31, 2023[47] - Corporate bonds accounted for the largest portion of the credit loss allowance at 18millionasofSeptember30,2024,downfrom18 million as of September 30, 2024, down from 34 million as of December 31, 2023[47] - Total unrealized losses on fixed income securities as of September 30, 2024, were 629million,with629 million, with 558 million attributed to investment grade securities and 71milliontobelowinvestmentgradesecurities[50]−U.S.governmentandagencysecuritieshadunrealizedlossesof71 million to below investment grade securities[50] - U.S. government and agency securities had unrealized losses of 41 million as of September 30, 2024, a decrease from 119millionasofDecember31,2023[48]−Municipalbondshadunrealizedlossesof119 million as of December 31, 2023[48] - Municipal bonds had unrealized losses of 96 million as of September 30, 2024, down from 152millionasofDecember31,2023[48]−Thecompany′saccruedinterestexcludedfromtheamortizedcostoffixedincomesecuritiestotaled152 million as of December 31, 2023[48] - The company's accrued interest excluded from the amortized cost of fixed income securities totaled 560 million as of September 30, 2024, up from 495millionasofDecember31,2023[45]−Thecompanyrecorded495 million as of December 31, 2023[45] - The company recorded 10 million in credit losses on securities for which credit losses were not previously reported during the nine months ended September 30, 2024[47] - Write-offs of fixed income securities totaled 18millionduringtheninemonthsendedSeptember30,2024[47]−Thecompany′sportfoliomonitoringprocessincludesaquarterlyreviewofallsecuritiestoidentifypotentialcreditlossesusingallreasonablyavailableinformation[46]−Thecompany′sevaluationofcreditlossesforfixedincomesecuritiesconsidersfactorssuchasthefinancialconditionandfutureearningspotentialoftheissueorissuer[46]−Mortgageloanswithadebtservicecoverageratiobelow1.0totaled18 million during the nine months ended September 30, 2024[47] - The company's portfolio monitoring process includes a quarterly review of all securities to identify potential credit losses using all reasonably available information[46] - The company's evaluation of credit losses for fixed income securities considers factors such as the financial condition and future earnings potential of the issue or issuer[46] - Mortgage loans with a debt service coverage ratio below 1.0 totaled 13 million as of September 30, 2024, primarily due to temporary cash flow decreases or risk-mitigating circumstances[53] - The amortized cost of mortgage loans before allowance was 776millionasofSeptember30,2024,withanallowanceof776 million as of September 30, 2024, with an allowance of (11) million, resulting in a net amortized cost of 765million[52]−BankloanswithacreditratingofNAIC4/Bhadthehighestamortizedcostbeforeallowanceat765 million[52] - Bank loans with a credit rating of NAIC 4 / B had the highest amortized cost before allowance at 119 million as of September 30, 2024[56] - The credit loss allowance for bank loans decreased by 5millionduringtheninemonthsendedSeptember30,2024,primarilyduetoreductionsrelatedtosales[56]−Theendingbalanceofthecreditlossallowanceformortgageloansremainedunchangedat5 million during the nine months ended September 30, 2024, primarily due to reductions related to sales[56] - The ending balance of the credit loss allowance for mortgage loans remained unchanged at (11) million for both the three and nine months ended September 30, 2024[54] - The amortized cost of bank loans before allowance was 198millionasofSeptember30,2024,withanallowanceof198 million as of September 30, 2024, with an allowance of (11) million, resulting in a net amortized cost of 187million[56]−Thecompanyusesaprobabilityofdefaultandlossgivendefaultmodeltoestimatecreditlossesformortgageandbankloans,consideringhistoricallosses,prepayments,andeconomicfactors[51]−Thedebtservicecoverageratioisakeycreditqualityindicatorformortgageloans,updatedannuallyormorefrequentlybasedonthecompany′screditmonitoringprocess[51]−Bankloansareevaluatedindividuallyusingmethodssuchasthepresentvalueofexpectedfuturerepaymentcashflowsdiscountedattheloan′scurrenteffectiveinterestrate[54]−Thecompanycategorizesassetsandliabilitiesrecordedatfairvalueintothreelevelsbasedontheobservabilityofinputsusedinvaluationtechniques[57]−Fixedincomesecuritiestotal187 million[56] - The company uses a probability of default and loss given default model to estimate credit losses for mortgage and bank loans, considering historical losses, prepayments, and economic factors[51] - The debt service coverage ratio is a key credit quality indicator for mortgage loans, updated annually or more frequently based on the company's credit monitoring process[51] - Bank loans are evaluated individually using methods such as the present value of expected future repayment cash flows discounted at the loan's current effective interest rate[54] - The company categorizes assets and liabilities recorded at fair value into three levels based on the observability of inputs used in valuation techniques[57] - Fixed income securities total 53.961 billion, with U.S. government and agencies at 9.246billion,municipalat9.246 billion, municipal at 8.258 billion, corporate - public at 24.320billion,corporate−privatelyplacedat24.320 billion, corporate - privately placed at 9.476 billion, foreign government at 1.477billion,andABSat1.477 billion, and ABS at 1.184 billion[65] - Equity securities total 1.941billion,withLevel1at1.941 billion, with Level 1 at 1.295 billion, Level 2 at 238million,andLevel3at238 million, and Level 3 at 408 million[65] - Short-term investments total 6.994billion,withLevel1at6.994 billion, with Level 1 at 2.771 billion, Level 2 at 4.221billion,andLevel3at4.221 billion, and Level 3 at 2 million[65] - Other investments total 2million,withLevel2at2 million, with Level 2 at 1 million and Level 3 at 2million[65]−Assetsheldforsaletotal2 million[65] - Assets held for sale total 1.718 billion, with Level 1 at 177million,Level2at177 million, Level 2 at 1.534 billion, and Level 3 at 7million[65]−Totalrecurringbasisassetsamountto7 million[65] - Total recurring basis assets amount to 64.741 billion, with Level 1 at 13.484billion,Level2at13.484 billion, Level 2 at 50.535 billion, and Level 3 at 723million[65]−Non−recurringbasisassetstotal723 million[65] - Non-recurring basis assets total 1 million, all classified as Level 3[65] - Investments reported at NAV total 1.124billion,excludedfromthefairvaluehierarchy[65]−Thecompanyhascommitmentstoinvest1.124 billion, excluded from the fair value hierarchy[65] - The company has commitments to invest 161 million in limited partnership interests as of September 30, 2024[64] - Total liabilities at fair value amount to 9million,withLevel1at9 million, with Level 1 at 9 million and Level 2 at 16million,offsetbycounterpartyandcashcollateralnettingof16 million, offset by counterparty and cash collateral netting of 16 million[65] - Total fixed income securities at fair value as of December 31, 2023, amounted to 48.865billion,withLevel1assetsat48.865 billion, with Level 1 assets at 8.606 billion (21.2%), Level 2 assets at 40.106billion(77.640.106 billion (77.6%), and Level 3 assets at 153 million (1.2%)[66] - Level 3 fixed income securities increased from 153millionasofDecember31,2023,to153 million as of December 31, 2023, to 181 million as of September 30, 2024, driven by purchases and transfers[67][68] - Equity securities at fair value as of December 31, 2023, totaled 2.261billion,withLevel1assetsat2.261 billion, with Level 1 assets at 1.656 billion, Level 2 assets at 203million,andLevel3assetsat203 million, and Level 3 assets at 402 million[66] - Total recurring Level 3 assets increased from 676millionasofDecember31,2023,to676 million as of December 31, 2023, to 723 million as of September 30, 2024, primarily due to gains in equity securities and other assets[67][68] - Short-term investments at fair value as of December 31, 2023, were 5.144billion,withLevel1assetsat5.144 billion, with Level 1 assets at 1.676 billion, Level 2 assets at 3.467billion,andLevel3assetsat3.467 billion, and Level 3 assets at 1 million[66] - Municipal fixed income securities at fair value as of December 31, 2023, were 6.006billion,withLevel2assetsat6.006 billion, with Level 2 assets at 5.995 billion and Level 3 assets at 11million[66]−Corporate−publicfixedincomesecuritiesatfairvalueasofDecember31,2023,were11 million[66] - Corporate - public fixed income securities at fair value as of December 31, 2023, were 23.298 billion, with Level 2 assets at 23.272billionandLevel3assetsat23.272 billion and Level 3 assets at 26 million[66] - ABS (Asset-Backed Securities) at fair value as of December 31, 2023, were 1.745billion,withLevel2assetsat1.745 billion, with Level 2 assets at 1.687 billion and Level 3 assets at 58million[66]−TotalassetsatfairvalueasofDecember31,2023,were58 million[66] - Total assets at fair value as of December 31, 2023, were 56.409 billion, with Level 1 assets at 11.941billion(21.211.941 billion (21.2%), Level 2 assets at 43.779 billion (77.6%), and Level 3 assets at 691million(1.2691 million (1.2%)[66] - Investments reported at NAV (Net Asset Value) as of December 31, 2023, totaled 1.165 billion, contributing to the total assets of 57.574billion[66]−TotalrecurringLevel3assetsincreasedfrom57.574 billion[66] - Total recurring Level 3 assets increased from 625 million to 647millionduringthenine−monthperiodendedSeptember30,2023,drivenbypurchasesandnetgains[69]−EquitysecuritiesunderLevel3assetsgrewfrom647 million during the nine-month period ended September 30, 2023, driven by purchases and net gains[69] - Equity securities under Level 3 assets grew from 333 million to 383million,withnetgainsof383 million, with net gains of 22 million included in net income over the nine-month period[70] - Fixed income securities under Level 3 assets decreased from 173millionto173 million to 133 million, primarily due to sales and losses, including a 9millionnetlossinnetincome[70]−Netgains(losses)oninvestmentsandderivativesforLevel3assetstotaled9 million net loss in net income[70] - Net gains (losses) on investments and derivatives for Level 3 assets totaled 16 million for the three months ended September 30, 2023, and 15millionforthenine−monthperiod[70]−TotalLevel3gainsincludedinnetincomefortheninemonthsendedSeptember30,2023,were15 million for the nine-month period[70] - Total Level 3 gains included in net income for the nine months ended September 30, 2023, were 19 million, with equity securities contributing 21million[71]−MortgageloansclassifiedasLevel3financialassetshadafairvalueof21 million[71] - Mortgage loans classified as Level 3 financial assets had a fair value of 736 million as of September 30, 2024, compared to 769millionasofDecember31,2023[72]−BankloansunderLevel3financialassetsincreasedinfairvaluefrom769 million as of December 31, 2023[72] - Bank loans under Level 3 financial assets increased in fair value from 238 million to 197millionasofSeptember30,2024[72]−ContractholderfundsoninvestmentcontractsclassifiedasLevel3liabilitiesdecreasedto197 million as of September 30, 2024[72] - Contractholder funds on investment contracts classified as Level 3 liabilities decreased to 0 as of September 30, 2024, from 46millionasofDecember31,2023[72]−DebtclassifiedasLevel2liabilitieshadafairvalueof46 million as of December 31, 2023[72] - Debt classified as Level 2 liabilities had a fair value of 8,027 million as of September 30, 2024, compared to $7,655 million as of December 31, 2023[72] -