ALLSTATE CORP (ALL) Q1 2025 Earnings Summary

Executive Summary

Q1 2025 delivered strong underlying profitability despite unprecedented catastrophe losses: revenues $16.45B (+7.8% YoY), GAAP EPS $2.11, adjusted EPS $3.53; Property-Liability recorded combined ratio 97.4 (underlying 83.1) as reinsurance recoveries ($1.1B) mitigated $3.3B gross CATs .
EPS and revenue beat consensus: adjusted EPS $3.53 vs $2.53* and revenue $16.45B vs $16.36B*; target price consensus stood at $236.1* (20 estimates). The beat was driven by attractive auto margins (CR 91.3) and favorable prior-year loss development .
Capital actions and portfolio focus are catalysts: dividend increased to $1.00 per share and $1.5B buyback program underway; EVB sale closed for $2.0B with ~$625M book gain recorded in Q2 2025; reinsurance single-event limit increased to $9.5B, lowering tail risk and volatility .
Transformative Growth gaining momentum: auto new applications +31% YoY with expanding distribution; homeowners PIF +2.5% YoY; management reiterated confidence in market share growth and balanced risk/return approach .

What Went Well and What Went Wrong

What Went Well

Auto insurance margins strengthened: auto recorded combined ratio 91.3 (down 4.7 pts YoY) on favorable physical damage trends and $238M favorable PY reserve reestimates; underwriting income rose to $816M (+133% YoY) .
Investment income and portfolio positioning: net investment income $854M (+$90M YoY), with market-based income +14.9% due to higher yields and asset balances .
Management confidence and growth execution: “Allstate’s strategy, operational excellence and risk management practices generated strong first quarter results, despite unprecedented severe weather” — Tom Wilson; “We continue to proactively manage capital… $1.5 billion share repurchase program and quarterly dividend increase to $1.00” — CFO Jess Merten .

What Went Wrong

Catastrophe losses were exceptional: gross CATs $3.3B (mostly California wildfires and March wind) leading to homeowners underwriting loss of ($451M) and recorded combined ratio 112.3 .
Health and Benefits pressure: adjusted net income fell to $30M (−46% YoY) due to increased benefit utilization; EVB segment sold, Group Health held for sale .
Retention remains a watch item: auto PIF declined slightly (−0.4% YoY) despite higher new applications; management is targeting retention via the SAVE program and customer affordability/experience initiatives .

Financial Results

Metric	Q3 2024	Q4 2024	Q1 2025
Revenues ($USD Billions)	$16.63	$16.51	$16.45
Net Income ($USD Millions)	$1,161	$1,899	$566
Diluted EPS ($USD)	$4.33	$7.07	$2.11
Adjusted Net Income ($USD Millions)	$1,048	$2,062	$949
Adjusted EPS ($USD)	$3.91	$7.67	$3.53
Property-Liability Recorded Combined Ratio (%)	96.4	86.9	97.4
Property-Liability Underlying Combined Ratio (%)	83.2	83.0	83.1
Net Investment Income ($USD Millions)	$783	$833	$854

Segment breakdown

Segment	Metric	Q3 2024	Q4 2024	Q1 2025
Auto	Premiums Earned ($MM)	$9,270	$9,348	$9,347
Auto	Underwriting Income ($MM)	$486	$603	$816
Auto	Recorded Combined Ratio (%)	94.8	93.5	91.3
Auto	Policies in Force (000s)	24,998	24,936	25,100
Homeowners	Premiums Earned ($MM)	$3,403	$3,548	$3,657
Homeowners	Underwriting Income (Loss) ($MM)	$60	$1,070	($451)
Homeowners	Recorded Combined Ratio (%)	98.2	69.8	112.3
Homeowners	Policies in Force (000s)	7,483	7,511	7,549

KPIs

KPI	Q3 2024	Q4 2024	Q1 2025
Total Property-Liability PIF (000s)	37,596	37,530	37,712
Auto New Issued Applications (000s)	1,892	1,812	2,191
Allstate Brand Auto Avg Gross Written Premium ($)	$852	$858	$853
Allstate Brand Homeowners Avg Gross Written Premium ($)	$2,050	$2,111	$2,210

Estimate comparison (consensus vs actual, Q1 2025)

Metric	Consensus	Actual
Adjusted EPS ($)	2.53*	3.53
Revenues ($USD Billions)	16.36*	16.45
EPS Estimates (#)	17*	—
Revenue Estimates (#)	2*	—
Target Price ($)	236.1*	—

Values with * were retrieved from S&P Global; consensus metrics may not include non-GAAP adjustments aligned to company definitions.

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Common Dividend per Share	Q1 2025 onward	$0.92 (Q4 2024 run-rate)	$1.00 declared May 28, payable July 1	Raised
Share Repurchase Authorization	2025	Announced $1.5B (Feb-26)	Program active; ~$100M repurchased pace in Q1 commentary	Maintained (execution update)
Reinsurance Single-Event Limit	2025 Placement	~<$8B prior year	Up to $9.5B; total limit +$1.5B (~21%), cost down risk-adjusted	Raised protection
Business Portfolio	2025	EVB pending close (Q4 update)	EVB sale closed Apr 1 ($2.0B), ~$625M book gain in Q2	Executed; gain timing
Health & Benefits – Group Health	2025	Signed to sell to Nationwide ($1.25B)	Classified held for sale; operating results continue until close	Maintained disposition path

Note: No explicit quantitative revenue/EPS/combined ratio guidance was provided; management emphasized market-share growth and balanced capital deployment .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3 2024)	Previous Mentions (Q4 2024)	Current Period (Q1 2025)	Trend
Auto profitability and pricing	Profit improvement plan; CR 94.8; rate adequacy gains	CR 93.5; favorable severity moderation; PY reserve releases	CR 91.3; favorable PD severity; PY reestimates +2.5 pts	Improving margins; broad-based adequacy
Homeowners growth and CAT volatility	Profitable despite higher CATs; PIF +2.5% YoY	Attractive returns; PIF +2.4% YoY	Large CATs (wildfires/wind); CR 112.3; underlying CR in low-60s	Structural profitability, CAT-driven volatility; stronger reinsurance
Distribution/Transformative Growth	New business +26%; expanded direct/IA	Continued expansion; expense ratio down	Auto new apps +31%; all channels; SAVE program to improve retention	Momentum building; focus on retention
Capital management	Strong capital, $3.0B holding co assets	ROE 26.8%; dividends $1.1B; disposition proceeds $3.25B	$1.5B buyback active; dividend $1.00; robust reinsurance program	Consistent, pro-shareholder
Tariffs/macro impacts	Not highlighted	Not highlighted	Potential mid-single-digit severity impact debated; manage via pricing/retention; auto more exposed; home less	Monitoring; plan to offset via pricing/costs
Regulatory/legal	—	Florida tort reform benefits noted	CA wildfire fund potential subrogation; Florida tort reform helps PD loss trends	Supportive in select states
Investments	NII up on higher yields	NII $833M; duration extended; equities increased	NII $854M; market-based +15% YoY; total return 1.4%	Continued tailwind

Management Commentary

“Revenues increased to $16.5 billion… Net income was $566 million… Adjusted net income* was $949 million, or $3.53 per diluted share.” — Tom Wilson .
“The auto combined ratio was 91.3… underlying homeowners margins remained in targeted low 60s range… reinsurance recoveries of $1.1 billion.” — Mario Rizzo .
“We increased the quarterly dividend to $1.00 per common share and instituted a $1.5 billion share repurchase program.” — Jess Merten .
“Auto new business was 2.8 million items, a 27% increase over the prior year… expanded direct and independent agent channels.” — Tom Wilson .

Q&A Highlights

Competition and pricing: Market remains rational; margin improvement industry-wide as frequency moderates and PD severities stabilize; Allstate leaning into growth without aggressive rate cuts .
Retention strategies: SAVE program drives affordability and experience improvements; retention stabilized but remains down YoY; bundling ~80% new business aids stickiness .
Advertising cadence: Q4 was a high watermark; spend calibrated to ROE and growth opportunities; aim for consistent presence in market .
California dynamics: Homeowners constrained until costs reflect in rates; auto now profitable and open across channels with recent +6.9% rate approval .
Capital deployment: Strong capital position with stress capital layer; ~$100M repurchases pace in Q1; continue balanced allocation to growth and buybacks .
Reinsurance update: Single-event limit raised to $9.5B; total limit up ~$1.5B (~21%); split evenly between traditional and ILS markets; risk-adjusted cost down .

Estimates Context

Q1 2025 results beat Street: adjusted EPS $3.53 vs $2.53*; revenue $16.45B vs $16.36B*; 17 EPS estimates, 2 revenue estimates; target price consensus $236.1* (20 estimates). Values retrieved from S&P Global.
Implications: Expect EPS revisions higher on auto margin strength and robust NII; some caution likely around homeowners CAT volatility and retention trajectory .

Key Takeaways for Investors

Underlying profitability is intact and improving: auto CR 91.3 and homeowners underlying CR 62.4, supporting sustained ROE despite CAT volatility .
Strong reinsurance and capital actions de-risk earnings: raised single-event limit to $9.5B; dividend to $1.00; $1.5B buyback provides support in pullbacks .
Growth narrative is accelerating: +31% auto new apps with multi-channel expansion; homeowners PIF +2.5% YoY; SAVE program aims to lift retention through H2 .
EVB divestiture and expected Q2 gain streamline portfolio and add capital for core growth; Group Health sale pending .
Near-term trading: EPS/revenue beat and capital returns are positive; watch CAT headlines and tariff-related severity; reinsurance program mitigates downside .
Medium-term thesis: Transformative Growth, expense ratio reductions, and higher NII support sustained high-teens to low-20s ROE across cycle subject to CAT normalization .

Non-GAAP measures are defined and reconciled in the company’s release; adjusted EPS excludes investment/derivative gains/losses, pension remeasurement, amortization, and other items .