Slide 1: Special Topic Investor Call: Value of Homeowners Insurance
06.16.2022 The Allstate Corporation Special Topic Investor Call Value of Homeowners Insurance
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 and Today's Discussion
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: Innovating in Homeowners Insurance to Create Shareholder Value
The Allstate Corporation 2022 PAGE 3 Innovating in Homeowners Insurance to Create Shareholder Value Allstate Innovates (1995 – Today) Aggressively lowered catastrophe exposure • Allstate homeowners policies in force declined from approximately 8 million in 2005 to 6 million in 2013, which negatively
Slide 5: Diverse Product Offering Provides Bundled Savings and Higher Lifetime Value
The Allstate Corporation 2022 PAGE 4 Allstate’s Diverse Product Offering Provides Bundled Savings for Customers and Delivers Higher Lifetime Value Monoline Auto Auto + Home Additional Products Higher Household Retention Drives Lifetime Value 2.2x longer household retention compared to monoline auto
Slide 6: Integrated Homeowners System Creates Competitive Advantage
The Allstate Corporation 2022 PAGE 5 Integrated Homeowners System Creates Competitive Advantage Risk Selection Product Design and Experience Pricing Sophistication Claims Capabilities Meeting Customer Protection Needs • Advanced claims handling capabilities • Innovative roof coverage to address seve
Slide 7: Allstate Brand Homeowners Insurance Generates Attractive Returns
The Allstate Corporation 2022 PAGE 6 80 90 100 110 120 2017 2018 2019 2020 2021 Allstate brand Homeowners Insurance Generates Attractive Returns (1) Industry and competitor information represents statutory results per S&P Global Market Intelligence. Allstate information represents Allstate brand GAA
Slide 8: Homeowners Insurance Industry Results and Competitor Market Share
The Allstate Corporation 2022 PAGE 7 Competitors Market Share(1) U/W Income / (Loss) 2017-2021 ($B) Distribution Channel(2) DPW 5 Year Growth CAGR Allstate(3) 8.5% $3.3 Captive, IA, Direct 7.7% State Farm 18.0% ($5.1) Captive 4.6% Liberty Mutual 6.9% ($0.2) IA, Direct 5.2% USAA 6.4% ($1.8) Direct 8.
Slide 9: Sustaining Competitive Advantage Through Product Design and Risk Selection
The Allstate Corporation 2022 PAGE 8 Sustaining Competitive Advantage Through Innovative Product Design and Advanced Risk Selection Enhanced Risk Selection Innovative Product Design and Experience Coastal risk evaluation scoring Aerial imagery incorporated into risk assessment Strategic targeted ris
Slide 10: Pricing Sophistication Improves Segmentation and Ease of Business
The Allstate Corporation 2022 PAGE 9 Geocoding & Geographic Rating - Enhancing geographic rating leveraging geospatial variables, extensive historical data and catastrophe insights (wildfire/hurricane) Pricing Sophistication Improves Segmentation and Ease of Business >30K ~250M Geocoded grids (8,000
Slide 11: Homeowners Insurance is a Growth Business
The Allstate Corporation 2022 PAGE 10 1.25 1.51 1.19 1.13 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2018 2019 2020 2021 2022 Home Replacement Cost Index Lumber Asphalt Shingles Core CPI Homeowners Insurance is a Growth Business Increasing average premium per policy(2) 14.3 3.1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q
Slide 12: Allstate Meets Customer Protection Needs Through Sophisticated Portfolio Management
The Allstate Corporation 2022 PAGE 11 Allstate Property Market Share Rankings(1) Allstate Meets Customer’s Protection Needs Through Sophisticated Portfolio Management (1) Source: S&P Global Market Intelligence 2021 percent of direct written premiums; Includes homeowners, farmowners, condominium, ren
Slide 13: Accurate and Efficient Claims Resolution Leverages Technology
The Allstate Corporation 2022 PAGE 12 Advanced Technology • Satellite Imagery: Advance knowledge of dimensions and features • Aircraft: Survey the area to determine extent of damage • Video: Virtual Assist™ connects us live with contractors, local experts and customers >80% Of wind and hail claims h
Slide 14: Allstate's Integrated Response Delivers Speed and Accuracy
The Allstate Corporation 2022 PAGE 13 Allstate’s Integrated Response Delivers Speed and Accuracy Weather Data: Wind speed and hail diameter known in real time Imagery: Precise roofing features and dimensions determined Mobile App: Claim reporting, communication and payment preferences all handled on
Slide 15: Enterprise Risk Managed with Comprehensive Reinsurance Program
The Allstate Corporation 2022 PAGE 14 Enterprise Risk Managed with Comprehensive Reinsurance Program Retention Ceded $0.5B(1) $4.25B $6.6B Retention Per Occurrence Retention Catastrophe Bonds Reinsurer Supported Contracts Catastrophe Bonds & Reinsurer Supported Contracts Aggregate (1) Traditional co
Slide 16: Homeowners Insurance Generates Attractive Returns with Moderate Volatility
The Allstate Corporation 2022 PAGE 15 CB PGR TRV CINF SIGI SAFT THG HIG MCY HMN KMPR AIG ACGL RLI AFG WRB MKL AXS ARGO ALL (P-L) 10.4x ALL (HO) 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 82%84%86%88%90%92%94%96%98%100%102%104%106% S ta n d a rd D e v ia ti o n 2 0 1 7 – 2 0 2 1 C o m b in e d R a ti o Avg of
Slide 17: Homeowners Insurance Business is Significantly Undervalued at Current P/E
The Allstate Corporation 2022 PAGE 16 Price-to-Earnings Multiple 10.4x 12.0x 14.0x 16.0x 18.0x Adj. Net Income* $1.2 Implied Homeowners Valuation ($ in billions) $12.5 $14.4 $16.8 $19.2 21.6 ($ per share)(1) $45 $52 $61 $70 $78 Difference to Aggregate Value +$7 +$16 +$25 +$33 Allstate’s Homeowners I
Slide 18: Financial Metrics: Allstate vs. Industry
The Allstate Corporation 2022 PAGE 17 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 20: Forward-looking Statements
The Allstate Corporation 2022 PAGE 19 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