Allstate Reports First Quarter 2025 Results

NORTHBROOK, Ill.–(BUSINESS WIRE)–The Allstate Corporation (NYSE: ALL) today reported financial results for the first quarter of 2025.

“Allstate’s strategy, operational excellence and risk management practices generated strong first quarter results, despite unprecedented severe weather,” said Tom Wilson, Chair, President and CEO of The Allstate Corporation. “Revenues increased to $16.5 billion, a 7.8% increase over the prior year, with growth in policies in force of 6.7% to 211 million. Net income was $566 million, lower than last year, as a record $3.3 billion of gross catastrophe losses were partially offset by $1.1 billion of reinsurance recoveries in the quarter. Adjusted net income* was $949 million, or $3.53 per diluted share.”

“Transformative Growth gained momentum with strong underlying insurance profitability and sequential growth in auto and homeowners insurance policies in force. Proactive investment management supported enterprise risk and return objectives including the generation of $854 million of net investment income for the quarter. Protection Plans continues to grow in the U.S and internationally with revenues up 16.4% over the prior year. Closing the sale of the Employer Voluntary Benefits business on April 1 for $2.0 billion further strengthens capital. Allstate has the capabilities, brand, distribution and resources to increase Property-Liability market share and expand protection provided to customers,” concluded Wilson.

First Quarter 2025 Results

• Total revenues of $16.5 billion in the first quarter of 2025 were $1.2 billion or 7.8% higher than the prior year quarter.
• Net income applicable to common shareholders was $566 million in the first quarter of 2025 compared to $1.2 billion in the prior year quarter, primarily driven by elevated catastrophe losses in the quarter.
• Adjusted net income* was $949 million, or $3.53 per diluted share, compared to $1.4 billion in the prior year quarter.
• Adjusted net income return on common shareholders equity* of 23.7%, significantly higher than prior year.

• Property-Liability earned premiums of $14.0 billion increased 8.7% in the first quarter of 2025 compared to the prior year quarter, primarily driven by higher average premiums. Underwriting income was $360 million compared to $898 million in the prior year quarter, reflecting the impact of increased catastrophe losses.

• Premiums written increased 8.5% compared to the prior year quarter driven by rate increases.

• Property-Liability combined ratio was 97.4 for the quarter which was 4.4 points above the prior year quarter primarily due to higher catastrophe losses partially offset by higher average earned premiums and favorable non-catastrophe prior year reserve reestimates.

• Allstate Protection auto insurance generated attractive margins and strong new business growth across all distribution channels.

• Written and earned premiums grew 5.2% and 6.5% compared to the prior year quarter, respectively. The increase was driven by rate increases, partially offset by a slight decline in policies in force of 0.4%, as a 31.2% increase in new business applications was offset by lower retention.

• Auto rate increases result in an annualized premium impact of 1.4% in the first quarter.

• The recorded auto insurance combined ratio of 91.3 in the first quarter of 2025 was 4.7 points below the prior year quarter, reflecting favorable physical damage loss costs and favorable prior year reserve releases.

• Prior year non-catastrophe reserve reestimates were favorable $238 million in the first quarter, a 2.5 point combined ratio impact, reflecting improvement in physical damage severity trends.

• Allstate Protection homeowners insurance generated an underwriting loss of $451 million compared to $564 million of income in the prior year, reflecting the impact of increased catastrophe losses. Underlying margins remain strong, and policies in force increased.

• Written premiums and earned premiums increased by 20.1% and 15.9% compared to the prior year quarter, respectively. The increase was driven by higher average premium and policies in force growth of 2.5%.

• A 15.6% increase in Allstate brand homeowners insurance average gross written premium compared to the prior year quarter was due to approved rate increases and inflation in insured home replacement costs.

• Gross catastrophe losses of $2.8 billion in the quarter, mostly attributed to California wildfires and March wind events, were offset by $1.0 billion of recoveries from the comprehensive reinsurance program that reduces capital requirements by lowering earnings volatility. Net losses of $1.8 billion were $1.3 billion greater than the prior year.

• The recorded homeowners insurance combined ratio of 112.3 was 30.2 points above the first quarter of 2024, reflecting increased catastrophe losses, partially offset by favorable underlying loss performance. The underlying combined ratio* of 62.4 decreased by 3.1 points compared to the prior year quarter.

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• Protection Services provides protection solutions and services through five businesses that include embedded Allstate branded offerings in non-insurance purchases. Revenues increased to $860 million in the first quarter of 2025, 14.2% higher than the prior year quarter, primarily due to Allstate Protection Plans and Arity. Adjusted net income of $55 million increased by $1 million compared to the prior year quarter.

• Allstate Protection Plans continued to grow by expanding distribution relationships and product offerings. Revenue of $540 million increased $76 million, or 16.4%, compared to the prior year quarter reflecting international and domestic growth. Adjusted net income of $45 million in the first quarter of 2025 was $5 million higher than the prior year quarter.

• Allstate Dealer Services generated revenue of $146 million and adjusted net income of $4 million, a slight decline compared to $6 million in the prior year quarter due to higher loss costs, partially offset by lower underlying operating expenses.

• Allstate Roadside revenue of $55 million in the first quarter of 2025 decreased 16.7% compared to the prior year quarter reflecting the exit from a large unprofitable customer relationship. Adjusted net income of $11 million was unchanged compared to the prior year quarter.

• Arity revenue of $79 million increased $40 million compared to the prior year quarter, due to increased lead sales. Adjusted net loss of $6 million in the first quarter of 2025 compared to a $4 million loss in the prior year reflecting investments in growth.

• Allstate Identity Protection revenue of $40 million in the first quarter of 2025 increased 5.3% compared to the prior year quarter reflecting unit growth in the employee benefit channel. Adjusted net income of $1 million in the first quarter of 2025 was unchanged compared to the prior year quarter.

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• Allstate Health and Benefits
  • The sale of the Employer Voluntary Benefits business closed on April 1, 2025, generating a financial book gain of approximately $625 million that will be recorded in the second quarter of 2025. Operating results were reported in the Health and Benefits segment, and the assets and liabilities of the business are classified as held for sale for the first quarter.
  • The assets and liabilities of the Group Health business are classified as held for sale. The financial operating results of the Group Health business will continue to be reported as part of net income until the transaction closes.
  • Premiums and contract charges for health and benefits increased 1.9%, or $9 million, compared to the prior year quarter primarily due to growth in Individual Health and Group Health, partially offset by a decline in Employer Voluntary Benefits.
  • Adjusted net income of $30 million in the first quarter was $26 million lower than prior year quarter attributable to increased benefit utilization in the Group Health and Individual Health businesses.

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• Allstate Investments uses a proactive approach to balancing risk and returns for the $74.1 billion portfolio. Net investment income of $854 million in the first quarter of 2025, increased by $90 million from the prior year quarter due to portfolio growth and repositioning into higher yielding fixed income securities.

• Market-based investment income was $719 million in the first quarter of 2025, an increase of $93 million, or 14.9%, compared to the prior year quarter, reflecting increased asset balances and higher yields in the $63.5 billion market-based portfolio. Public common equity holdings, excluding funds with underlying investments in fixed income securities, were $3.2 billion on March 31, below strategic asset allocation targets.

• Performance-based investment income totaled $196 million in the first quarter of 2025, a decrease of $5 million compared to the prior year quarter reflecting lower private equity valuation increases, offset by higher real estate investment results. The portfolio allocation to performance-based assets provides a diversifying source of higher long-term returns, and volatility in reported results is expected.

• Net losses on investments and derivatives were $349 million in the first quarter of 2025, compared to losses of $164 million in the prior year quarter. Net losses in the first quarter of 2025 were driven by losses on the sales of fixed income securities, valuation declines on equity investments and credit losses, including $67 million related to the Reciprocal Exchanges.

• Unrealized net capital losses totaled $443 million (pre-tax) as of March 31, a $540 million improvement to the prior year end as lower interest rates resulted in higher fixed income valuations.

• Total return on the investment portfolio was 1.4% for the first quarter of 2025 and 4.7% for the latest twelve months.

Proactive Capital Management

“Allstate’s performance this quarter demonstrates operational excellence and a balance of risk and return that provides stability for customers and shareholders,” said Jess Merten, Chief Financial Officer. “Completion of the Employer Voluntary Benefits business sale and the agreement to sell the Group Health business will improve the growth opportunities of these businesses and creates value for Allstate shareholders. We continue to proactively manage capital, as evidenced by our previously announced $1.5 billion share repurchase program and quarterly dividend increase to $1.00 per common share.”

Visit www.allstateinvestors.com for additional information about Allstate’s results, including a webcast of its quarterly conference call and the call presentation. The conference call will be at 9 a.m. ET on Thursday, May 1. Financial information, including material announcements about The Allstate Corporation, is routinely posted on www.allstateinvestors.com.

Forward-Looking Statements

This news release contains “forward-looking statements” that anticipate results based on our estimates, assumptions and plans that are subject to uncertainty. These statements are made subject to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements do not relate strictly to historical or current facts and may be identified by their use of words like “plans,” “seeks,” “expects,” “will,” “should,” “anticipates,” “estimates,” “intends,” “believes,” “likely,” “targets” and other words with similar meanings. We believe these statements are based on reasonable estimates, assumptions and plans. However, if the estimates, assumptions or plans underlying the forward-looking statements prove inaccurate or if other risks or uncertainties arise, actual results could differ materially from those communicated in these forward-looking statements. Factors that could cause actual results to differ materially from those expressed in, or implied by, the forward-looking statements may be found in our filings with the U.S. Securities and Exchange Commission, including the “Risk Factors” section in our most recent annual report on Form 10-K. Forward-looking statements are as of the date on which they are made, and we assume no obligation to update or revise any forward-looking statement.

Definitions of Non-GAAP Measures

We believe that investors’ understanding of Allstate’s performance is enhanced by our disclosure of the following non-GAAP measures. Our methods for calculating these measures may differ from those used by other companies and therefore comparability may be limited.

Adjusted net income (loss) is net income (loss) applicable to common shareholders, excluding:

• Net gains and losses on investments and derivatives

• Pension and other postretirement remeasurement gains and losses

• Amortization or impairment of purchased intangibles

• Gain or loss on disposition

• Adjustments for other significant non-recurring, infrequent or unusual items, when (a) the nature of the charge or gain is such that it is reasonably unlikely to recur within two years, or (b) there has been no similar charge or gain within the prior two years

• Related income tax expense or benefit of these items

Net income (loss) applicable to common shareholders is the GAAP measure that is most directly comparable to adjusted net income.

We use adjusted net income as an important measure to evaluate our results of operations. We believe that the measure provides investors with a valuable measure of the Company’s ongoing performance because it reveals trends in our insurance and financial services business that may be obscured by the net effect of net gains and losses on investments and derivatives, pension and other postretirement remeasurement gains and losses, amortization or impairment of purchased intangibles, gain or loss on disposition and adjustments for other significant non-recurring, infrequent or unusual items and the related tax expense or benefit of these items. Net gains and losses on investments and derivatives, and pension and other postretirement remeasurement gains and losses may vary significantly between periods and are generally driven by business decisions and external economic developments such as capital market conditions, the timing of which is unrelated to the insurance underwriting process. Gain or loss on disposition is excluded because it is non-recurring in nature and the amortization or impairment of purchased intangibles is excluded because it relates to the acquisition purchase price and is not indicative of our underlying business results or trends.

Contacts

Nick Nottoli

Media Relations

(847) 402-5600

Allister Gobin

Investor Relations

(847) 402-2800

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