Allstate (NYSE:ALL) held its first-quarter earnings conference call on Thursday. Below is the complete transcript from the call.
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The full earnings call is available at https://edge.media-server.com/mmc/p/kwnctcyi/
Summary
Allstate reported total revenues of $16.9 billion for the first quarter, a 3% increase year-over-year, with investment income rising nearly 10% to $938 million.
The company saw a 2.5% increase in total policies in force, driven by a 2.3% rise in property liability policies, and a net income of $2.4 billion with an adjusted net income of $2.8 billion.
Strategically, Allstate focused on broadening protection offerings, competitive pricing, and leveraging advanced analytics to optimize growth and profitability.
Market share growth was noted in both auto and homeowners insurance, with significant gains in 29 states for auto insurance and 41 states for homeowners insurance.
Management emphasized the role of advanced analytics and AI in enhancing operational efficiency and customer experience, while maintaining a disciplined approach to capital allocation and share repurchases.
Allstate announced a new $4 billion share repurchase program, with $3.6 billion remaining, reflecting a commitment to returning capital to shareholders.
The company remains optimistic about future growth, particularly in the homeowners insurance sector, and is exploring AI to further improve service and reduce expenses.
Full Transcript
OPERATOR
Thank you for standing by. Welcome to Allstate’s first quarter earnings investor call. At this time, all participants are in listen only mode. After the prepared remarks, there will be a question and answer session. To ask a question during this session, you’ll need to press star 11 on your telephone. If your question has been answered and you’d like to remove yourself from the queue, simply press star one one. Again. Please limit your inquiry to one question and one follow up. As a reminder, please be aware this call is being recorded. And now I’d like to introduce your host for today’s call, Alistair Gobin, Head of Investor relations. Please go ahead, sir.
Alistair Gobin (Head of Investor Relations)
Good morning, everyone. Welcome to Allstate’s first quarter 2026 earnings call. Yesterday, following close of the market, we issued our news release and investor supplement and posted related materials on our website at Allstate Investins. Today, our management team will discuss how Allstate is creating shareholder value. Then we will open up the line for your questions. As noted on the first slide of the presentation the presentation, our discussion will include non GAAP measures for which reconciliations are provided in the news release and investor supplement. We will also make forward looking statements about Allstate’s operations. Actual results may differ materially from those statements. So please refer to our 2025 10K and other public filings for more information on potential risks. Let’s start with three of our recent advertisements and then Tom will be foreign.
Elm
I’m a 200 year old Elm, and while I might be holding up on the outside, on the inside, I’m dead. Oh, man, it feels good to just let go. If you don’t have the right home coverage. Well, this could break your bank. Switch to Allstate and you can save hundreds. Put it on my tab. I’ll show myself out.
Mario
Let’s start with the market share growth on slide 5. Starting on the left, Allstate increased auto insurance market share in 29 states in 2025 that comprise 57% of countrywide premiums. Looking down below, in the 29 states where share increased policies in force increased by 4.3% over the prior year and outpaced vehicle registration growth in those states. That means we increased our share of insurable vehicles in those states which we view as a better indicator of sustainable share growth than the traditional premium based market share metric. In the remainder of the country, policies in force decreased by 0.5% versus an increase in vehicle registration of 0.6%. The decline is heavily impacted by two large states where we have intentionally been reducing share because of profitability challenges. If you look at which companies this growth comes from by dividing the market into the top five market share leaders and the rest of the market. Slightly more comes from the medium sized and smaller carriers. The broad set of competitive tools that Tom referenced also drives growth in homeowners insurance. Homeowners insurance market share grew in 83% of the US market. This was in 41 states which had policy enforced growth of 4.1% in 2025 over the prior year. We have a broad competitive advantage over the companies we compete with in the homeowners insurance market as demonstrated by our ability to profitably gain share. Moving to Slide 6, Allstate’s business model enables us to consistently generate strong returns. On the chart, the blue bars represent the auto insurance underlying combined ratio which averaged 94, 95 and 94 over the last 5 and 10 years. Consistent with our mid 90s target. There was obviously an increase in the combined ratio in 2022 post pandemic which required significant price increases as shown by the light blue line in the middle of this chart. Since then, we have returned to levels at or below our mid-90s target with more modest price increases needed to generate and sustain attractive returns. In the first quarter of 2026, rate changes were implemented in 39 states which included a mix of both rate increases and decreases. These changes had a net overall neutral implemented rate impact across the book. Improving affordability will increase policy and force growth and raise shareholder value as long as the combined ratio continues to perform at or better than target levels. Let me note that these are underlying combined ratios that were reported for these years and as Jess will cover in a few minutes. Favorable subsequent reserve development shows that results for several of these years are actually better than what is shown on the chart. Moving to slide 7, you can see a similar story in the homeowners insurance business which also generates strong returns. Homeowners insurance over the last five and ten years had a recorded combined ratio of 93.5 and 92 respectively, and has generated underwriting income of $3.9 billion and $7.9 billion in those same periods. In the first quarter the combined ratio was 83.5 and average premiums increased 5.7% compared to the prior year quarter, keeping pace with loss costs as you saw this quarter. We also posted the disclosure related to the placement of our comprehensive nationwide reinsurance program which enhances the risk and return profile in the homeowners business by reducing capital requirements associated with catastrophe loss, tail risk and dampening earnings volatility. The homeowners insurance business remains a competitive advantage and growth opportunity for Allstate. Now let me turn it over to Jess.
Jess
All right, thanks Mario. Let’s look at the property liability results in total on slide 8, auto insurance policy growth of 2.6% and homeowners insurance policy growth of 2.5% drove an increase of 2.3% in total policies in force and written premiums earned Premiums increased by 5.5%. The property liability combined ratio was 82.0 as both auto and homeowners insurance profitability was better than our targeted levels. This result was due to strong ongoing performance as well as lower catastrophes and favorable prior year reserve releases, excluding the benefit of reserve changes and lower catastrophes. The auto insurance underlying combined ratio was 89.5, which is 1.7 points better than the prior year. Property liability underwriting income was $2.7 billion in the first quarter. Now turning to Slide 9. As Mario referenced in his comments, auto insurance profitability improved faster than original estimates in 2023 and 2024. The top of the stack bar is the underlying combined ratio as originally reported. The green bars represent the impact of subsequent prior year reserve reestimates. The light blue bars represent the adjusted underlying combined ratio, including the subsequent changes in our estimates of loss costs. As you can see, prior year losses developed more favorably than originally estimated. Reserving is an iterative process with strong governance and oversight. We use consistent practices, multiple analytical methods, and include external reviews by independent actuaries to ensure reserve adequacy as more claims settle. However, estimates each year are revised to reflect actual loss experience. In recent quarters, actual loss experience has outperformed initial expectations. This results in the release of reserves from prior years. The auto combined ratio in 2023 is now estimated at 95.4 and 2024 is estimated at 90.0. Auto insurance profitability improved faster than originally estimated. Slide 10 highlights how we expect to continually improve our strong performance, enhance and enhance competitive position Transformative growth built a comprehensive competitive model. This included new software and adapted legacy systems to build a connected technology ecosystem. The system enables the use of artificial intelligence to improve customer experience and lower costs. We’re leveraging this technology platform in building Allstate’s large language intelligent ecosystem which we call Alli, to harness the power of agentic AI.
John
With that, I’ll turn it over to John. Thanks Jess. Good morning everyone. Moving to Slide 11, the Protection Services business grew to grow continue to grow profitably. This segment is comprised of five businesses shown on the left. Protection Plans, Dealer Services, Roadside erity and Identity Protection. The largest business in this segment is all state protection plans which grew revenue 13.5% versus the prior year quarter. This business provides protection for mobile phones, consumer electronics, major appliances and furniture. Protection plans generated $41 million in adjusted net income for the first quarter, down slightly due to higher claims costs. Arity is our mobile intelligence business. The higher loss this quarter reflects restructuring charge related to a reduced employee count. In total, protection service businesses increased revenue 7.2% from the first quarter of 2025 and generated $47 million in adjusted net income. Let’s turn to Slide 12 to discuss the investment portfolio. Investment income of $938 million increased $84 million or 9.8% compared to the prior year quarter. As shown on the chart on the left, net investment income has grown as the portfolio grew since the first quarter of 2024, portfolio book value has increased 24%, or approximately $17 billion. The increase reflects higher average investment balances from a 15% increase in earned premiums, strong underwriting income and improved fixed income yields. The table on the right side highlights the strength and consistencies of returns across asset classes. Over the last 12 months, the portfolio generated a 4.2% return. Fixed income results over the last five years are top. Quartile returns in our performance based portfolio have been below longer term historic averages over the last one and three years at 7.6% and 5.9% respectively, but remain above industry benchmarks. These results underscore the effectiveness of our active investment management approach. As a result, we increased the capital allocated to the investment portfolio in the first quarter, some of which is carried at the holding company. Let’s move to slide 13 to show that proactive capital management creates shareholder value. Allstate deploys capital in multiple ways which are shown on the left axis. Organic Growth Enhancing existing businesses, growth acquisitions and cash providing to shareholders Using capital for organic growth leverages Allstate’s capabilities and market presence with well understood and attractive risk and return opportunities. This is why we’re focusing on increasing market share in the property liability business. In addition, increasing market share should raise valuation multiples. Over the last three years, $3 billion of economic capital was utilized to support premium growth. As we just discussed, Allstate also deploys capital to support the investment portfolio to generate attractive risk adjusted returns. Capital is also used to strengthen existing businesses such as investments we made in our technology ecosystem or enhancing our independent agent business through the acquisition of national general. SquareTrade was a growth acquisition that leveraged the Allstate brand and capabilities. It also expanded protection offerings to execute the second part of our strategy and brought strong retail distribution partnerships. Since it was acquired, revenues have increased Eightfold and The business generated $175 million of adjusted net income over the last 12 months. Also, Allstate also has a long track record of returning capital to shareholders. In the first quarter, $881 million was returned to shareholders through repurchases and dividends. We completed the former $1.5 billion share repurchase program and launched a new $4 billion share repurchase program, accelerating the pace of repurchases. $3.6 billion remains on the current share repurchase authorization which represents approximately 40% of of holding company assets as of March 31 and 7% of outstanding shares. It’s an interesting observation. If you bought all of Allstate 10 years ago, you would have received 99% of the purchase price back in cash and would have a company that generated $12 billion in net income over the last 12 months. Wrapping up on Slide 14. In summary, Allstate’s broad set of competitive levers delivered strong results in the first quarter.
OPERATOR
Certainly. And our first question for today comes from the line of Mike Zyrimski from bmo. Your question, please.
Jack
Hey, good morning, this is Jack on for Mike. Just first one on the pricing outlook. Given how strong reported loss ratios are across your portfolio, wondering how you’re thinking about the opportunity to lean more aggressively on pricing this year. And does that calculus differ materially across auto, homeowners and bundled customers?
Tom
I would go back to the slide we talked about in terms of growing. We have a wide range of ways in which we grow. Price is certainly important, but it’s not the only one. And I know there’s a question for many. So let me maybe let’s spend a minute to. Because it’s what you described. We do it obviously by product, we do it by state, we do it by coverage. It’s highly complicated. If we think bundled customers lower acquisition costs, we give them a discount if they bundle. So yes, we do all that. But let me go up. So price is obviously important and it’s a key driver of profitability. As a result, we built this system of called operational levers, organizational accountability and sophisticated analytics. And our goal, of course, is to earn attractive margins and grow. And there’s always a plan on prices that looks forward six to 12 months. We’re going to talk about what that plan is here because it’s competitive and it changes all the time, but it’s based on what operational levers we think we can pull. So Jess will describe the system for you and give you a couple examples of how it works. The conclusion, however, is that the system works. It works for auto and it works for homeowners. And you can see that on slide six and seven. Our auto combined ratio is 94 to 95 over the last five and ten years. Homeowners insurance ratio 92 to 93 and a half over the last five and ten years. So the system itself works while price is important at just one component. Jess, why don’t you talk about how it works here and then give a couple examples. Got It So we think about the
Jess
system like a cube that has three elements. And Tom alluded to the three elements. You have operational levers, you have advanced analytics, and then organizational roles and responsibilities. And it’s a bit like a Rubik’s cube where it gives us multiple ways to both identify and address profit and growth opportunities that we have. What I’ll do quickly is go through each component and I’ll give a couple examples of what’s going on, a couple state examples of how the system works. So if you start with the operational lever element of our cube, we kind of covered this on slide 4. Tom went through it. You have new products, broad distribution, marketing. Effectively, we employ these operational levers at the state, individual market and product …
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