Allstate Corporation (the) · NYSE:ALL
Allstate Corporation (the) — Q3 2022 Earnings Presentation
21 slides from Allstate Corporation (the)'s earnings presentation, Nov 3, 2022
Slide 1: The Allstate Corporation Third Quarter 2022 Earnings Presentation
The Allstate Corporation Third Quarter 2022 Earnings Presentation 11.03.2022
Slide 2: Forward-looking Statements and Non-GAAP Financial Information
Forward-looking Statements and Non-GAAP Financial Information This presentation contains forward-looking statements Additional information on factors that could cause results and information. This presentation also contains non- to differ materially from this presentation is available in the GAAP me
Slide 3: Allstate's Strategy To Increase Shareholder Value
Allstate’s Strategy To Increase Shareholder Value Increase Personal Third quarter 2022 highlights Property-Liability Market Share • Executing comprehensive plan to improve auto insurance profitability o Broadly raising insurance rates o Reducing operating expenses and advertising o Implementing unde
Slide 4: Allstate Is Focused on Improving Profitability
Allstate Is Focused on Improving Profitability Increased Property-Liability earned premiums driven by higher average premiums in auto and homeowners insurance Three months ended Nine months ended September 30, September 30, ($ in millions, except per share data and ratios) 2022 2021 Change 2022 2021
Slide 5: Transformative Growth To Increase Personal Property-Liability Market Share
Transformative Growth To Increase Personal Property-Liability Market Share 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 ecos
Slide 6: Underwriting Margins Impacted by Higher Loss Costs
Underwriting Margins Impacted by Higher Loss Costs Margin pressure driven by rapid Underlying combined ratio* above target levels escalation of current and prior year due to elevated loss cost trends in auto, severities beginning in 2021 homeowners and other lines Recorded combined ratio – Q3 2022 U
Slide 7: Auto Insurance Continues to Be Impacted by Rising Loss Costs
Auto Insurance Continues to Be Impacted by Rising Loss Costs Prior year non-catastrophe reserve strengthening Strengthening of current report year severities in third primarily due to bodily injury drove 8.5 points while quarter drove 3.7 points on the combined ratio with 2.6 catastrophe losses, pri
Slide 8: Broad Auto Insurance Rate Increases Will Continue Into 2023
Broad Auto Insurance Rate Increases Will Continue Into 2023 Growth in average earned premium per policy is accelerating, but lags average gross premium due to 6-month policy terms Auto earned premiums lag implemented rate increases Estimated Allstate brand auto earned premium from rates implemented
Slide 9: Rate Actions to Date Will Improve Auto Insurance Profitability
Rate Actions to Date Will Improve Auto Insurance Profitability; Additional Actions Needed to Offset Future Loss Cost Increases Impact of rate actions already implemented when fully earned(1) will increase annual premiums by approximately $2.3 billion Pursuing additional rate increases Allstate Prote
Slide 10: Homeowners Margins Impacted by Higher Severities, Offset by Lower Catastrophe Losses
Homeowners Margins Impacted by Higher Severities Though Offset by Lower Catastrophe Losses Enterprise risk and return management and Increased average premiums, primarily due to comprehensive reinsurance program mitigated net inflation in insured home valuations and losses from Hurricane Ian impleme
Slide 11: Improving Customer Value Through Cost Reductions
Improving Customer Value Through Cost Reductions Reduction of advertising spend given auto insurance profitability Allstate Protection underwriting expense ratio Q3 2022 compared to Q3 2021 Lower costs primarily driven by 26.8 phase out of new agent enhanced 25.1 24.5 25.1 24.1 compensation program
Slide 12: Increased Prior Year Reserves Largely Driven by Auto Insurance Bodily Injury
Increased Prior Year Reserves Largely Driven by Auto Insurance Bodily Injury Prior year non-catastrophe reserve strengthening driven Prior year non-catastrophe reserve strengthening by personal auto, run-off property-liability, commercial, primarily driven by non-customer claimants reflects more and
Slide 13: Bodily Injury Reserves Increased to Reflect Increased Accident Severity
Bodily Injury Reserves Increased to Reflect Increased Accident Severity and Higher Medical and Litigation Costs Higher mix of larger, more complex claims has doubled paid Paid severity for major injury claims in litigation are 3.9 times and case reserve development variability since 2020 resulting t
Slide 14: Physical Damage Loss Costs Impacted by Rising Inflation and Delay in Third Party Demands
Physical Damage Loss Costs Impacted by Rising Inflation and Delay in Third Party Demands Used car values below recent peak level is a Third party carrier (“TPC”) demand and inflation positive development, though costs remain above expectations led to increased current report year earned pricing phys
Slide 15: Protection Services Revenue Growing While Investing in Growth
Protection Services Revenue Growing While Investing in Growth Allstate Protection Plans revenues of $349 Decrease in Protection Services adjusted net million increased 12.2% compared to the prior income reflects increased severity on appliance year quarter repair and investments in growth Protection
Slide 16: Allstate Health and Benefits Growth Through Expanded Protection Offering
Allstate Health and Benefits Growth Through Expanded Protection Offering Breadth and size of the business Reflects lower benefit ratio and expanded with the National General increased revenue acquisition Health and Benefits revenues(1) Health and Benefits adjusted net income ($ in millions) ($ in mi
Slide 17: Net Investment Income Benefited From Higher Reinvestment Yields
Net Investment Income Benefited From Higher Reinvestment Yields; Proactive Portfolio Management Protected Portfolio Value Remained defensively positioned to interest rates and Three individual investments generated 97% of recession/inflation sensitive assets, mitigating negative impact of performanc
Slide 18: Financial Condition and Capital Position Remain Strong
Financial Condition and Capital Position Remain Strong Life and annuities sale reduced surplus by $1.3 billion. Cash returns represents $1.4 billion of Due to a lower risk profile, this also increased deployable repurchases and $1.0 billion of dividends, capital by $1.7 billion, which was included i
Slide 19: Strong Cash Returns to Shareholders
Strong Cash Returns to Shareholders Strong cash returns through combination of Achieving our target combined ratios $2.14 billion in share repurchases and $698 will generate returns in our 14-17% million in common shareholder dividends target range Capital Position 9/30/2021 9/30/2022 Inc / (Dec) Ad
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Slide 21: Forward-looking Statements
Forward-looking Statements This presentation contains “forward-looking statements” that anticipate (10) a downgrade in financial strength ratings; results based on our estimates, assumptions and plans that are subject to o Business, Strategy and Operations (11) competition in the industries uncertai
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