Slide 1: Special topic investor call: Current auto insurance operating environment
03.17.2022 The Allstate Corporation Special topic investor call Current auto insurance operating environment
Slide 2: Forward-looking statements and non-GAAP financial information
The Allstate Corporation 2022 PAGE 1 Forward-looking statements and non-GAAP financial information This presentation contains forward-looking statements and information. This presentation also contains non- GAAP measures that are denoted with an asterisk. You can find the reconciliation of those mea
Slide 3: Operating priorities
The Allstate Corporation 2022 PAGE 2 Operating priorities Improve customer value Achieve target economic returns on capital Grow customer base Proactively manage investments Build long-term growth platforms Increase Personal Property-Liability market share Expand Protection Services Allstate’s strat
Slide 4: Sustained industry-leading returns in auto insurance impacted by rising loss costs in 2021
The Allstate Corporation 2022 PAGE 3 Allstate auto insurance combined ratio(2) Underwriting income ($M) 1,437 1,791 1,688 3,444 1,262 1,327 394 (159) (300) Auto insurance industry combined ratios(1) (% EP) Sustained industry-leading returns in auto insurance impacted by rising loss costs in 2021 (1)
Slide 5: Industry loss ratio and estimated cumulative rate activity
The Allstate Corporation 2022 PAGE 4 65.5 47.3 72.1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2019 2020 2021 Private Passenger Auto Insurance - Industry Loss Ratio(1) (1) Source: NAIC statutory data per S&P Global Market Intelligence and internal company analysis. Implied rate impacts based on externally ava
Slide 6: Miles driven and frequency trends
The Allstate Corporation 2022 PAGE 5 -60% -40% -20% 0% 20% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2020 2021 PD frequency U.S. miles driven Claims by time of dayMiles driven and frequency trends (2)(1) (1) Source: Allstate brand auto property damage gross frequency (2) Source: FHWA Vehicle Miles Traveled -60% -40%
Slide 7: Auto severity increases reflect rising inflationary impacts across coverages
The Allstate Corporation 2022 PAGE 6 Price indices(1) 1.68 1.10 1.17 1.20 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2019 2020 2021 Manheim used vehicle value index Core CPI OEM parts (industry) CPI: Motor Vehicle Labor Costs Indexed to YE 2018 (1) Source: Manheim Used Vehicle Value Index; U.S. Bureau of L
Slide 8: Auto insurance profit improvement actions: rate increases, claims excellence, expense focus
The Allstate Corporation 2022 PAGE 7 Auto insurance profit improvement will be driven by: Actions taken and planned: Rate Increases • Pursuing rate actions broadly across states and segments • Pricing expertise and sophistication enables rapid adaptation and local market execution • Increased Allsta
Slide 9: Telematics improves pricing accuracy
The Allstate Corporation 2022 PAGE 8 TelematicsTraditional rate plans • Rate is distributed in market using micro-customer segmentation strategy • Allstate has a long history of leading the industry in pricing sophistication • Telematics enhances traditional rating factors to better match price to r
Slide 10: Allstate's expertise enables optimization for local markets
The Allstate Corporation 2022 PAGE 9 Allstate’s expertise enables optimization for local markets • Incorporates key inputs to achieve short and long-term profitable growth outcomes • Increasingly sophisticated models developed to predict loss and expense costs at a refined segment level • Proprietar
Slide 11: Portfolio actively managed to achieve profitable growth at mid-90s combined ratio
The Allstate Corporation 2022 PAGE 10 Premium distribution by underlying combined ratio* segment(2)Number of states (1) by underlying combined ratio* segment(2) (1) Reflects 50 U.S. states plus District of Columbia (2) Allstate brand excluding Esurance; Underlying combined ratio excludes the effect
Slide 12: Allstate brand auto implemented rate change impacts
The Allstate Corporation 2022 PAGE 11 Allstate brand auto – annualized implemented rate impact ($)(2)Allstate brand auto – implemented rate change impacts (1) Reflects number of U.S. states, the District of Columbia or Canadian provinces where rate changes have been implemented. Allstate brand opera
Slide 13: Physical damage and casualty severity have risen due to inflationary impacts
The Allstate Corporation 2022 PAGE 12 Casualty severityPhysical damage severity Physical damage and casualty severity have risen due to inflationary impacts Used car values/capitation (~60% of the increase) • Used car values have increased 68% since year end 2018 Higher impact accidents (~20% of the
Slide 14: Scale and expertise are advantages in resolving claims
The Allstate Corporation 2022 PAGE 13 Scale and expertise are advantages in accurately and efficiently resolving claims Predictive modeling • Leverage artificial intelligence and machine learning • Total loss claims are predicted at first notice of loss • Claims with higher likelihood of injury pred
Slide 15: Leveraging technology to reduce claims expenses while enhancing customer experience
The Allstate Corporation 2022 PAGE 14 Leveraging technology to reduce claims expenses while enhancing the customer experience Digital Payment First U.S. property- casualty company to offer instant claim payments going from days to seconds for customers to receive funds Quick Card Pay ® Virtual Estim
Slide 16: Ongoing cost reductions further improve margins
The Allstate Corporation 2022 PAGE 15 Ongoing cost reductions further improve margins and enhance competitive position Further cost reduction opportunitiesProperty-Liability adjusted expense ratio* 22.3 21.4 20.5 20.3 6.9 6.5 6.1 5.7 29.2 27.9 26.6 26.0 23.0 2018 2019 2020 2021 2024 Adjusted underwr
Slide 17: Enhanced disclosures: monthly rate increases, report year severity, state profitability
The Allstate Corporation 2022 PAGE 16 Monthly rate increases Providing monthly implemented auto rate disclosures in addition to quarterly reporting • Price increases to address rising loss costs will continue throughout 2022 • Implemented rate increases reflect premium changes that are currently in
Slide 18: Positioned to adapt to current inflationary environment and shift to growth
The Allstate Corporation 2022 PAGE 17 Allstate brand auto insurance underlying combined ratio*(1) Positioned to adapt to current inflationary environment and shift to growth Allstate has successfully navigated similar environments Auto insurance (2015 - 2016) • Rate increases in excess of $2.5 billi
Slide 19: Transformative Growth multi-year initiative
The Allstate Corporation 2022 PAGE 18 Transformative Growth is a multi-year initiative to build a low-cost digital insurer with broad distribution • Improve customer value • Expand customer access • Increase sophistication and investment in customer acquisition • Deploy new technology ecosystem • En
Slide 20: Financial metrics: Allstate vs. industry
The Allstate Corporation 2022 PAGE 19 Source: FactSet; S&P Global Market Intelligence; Note: Market data as of 12/31/21; 5-year CAGR period or financial metrics measured from 2016 – 2021 financial periods (1) P&C comparables includes North American P&C companies with a market cap of $4 billion or gr
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Slide 22: Forward-looking statements
The Allstate Corporation 2022 PAGE 21 Forward-looking statements This presentation 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 Priva