ALLSTATE CORP (ALL) Q2 2025 Earnings Summary

Executive Summary

Q2 2025 was strong: revenue $16.63B (+5.8% y/y), GAAP diluted EPS $7.76, adjusted EPS $5.94; Property-Liability recorded combined ratio improved to 91.1 from 101.1 y/y, with $1.28B underwriting income .
EPS beat consensus materially; revenue was roughly in line: Q2 EPS $5.94 vs consensus $3.26; revenue $16.63B vs $16.60B; similar beats in Q1 and Q4 indicate estimate dispersion normalizing post-cat volatility (S&P Global data)* .
Auto profitability inflected: recorded CR 86.0 (−9.9 pts y/y), underlying CR 87.8; homeowners underlying margins robust (58.6) despite $1.61B catastrophe losses; Protection Services grew revenue +12% with APP revenue +16.6% .
Capital actions and divestitures are catalysts: dividend raised to $1.00/share, $341M repurchases, $3.25B health portfolio sold (Group Health closed July 1; ~$500M book gain to be recorded in Q3) .
Narrative drivers: NY/NJ auto now profitable with growth pending product approvals; aggregate catastrophe reinsurance limit expanded; marketing efficiency and SAVE retention program are in focus; management trimmed public equity exposure given trade-policy inflation risk .

What Went Well and What Went Wrong

What Went Well
- “Revenues increased to $16.6 billion and net income was $2.1 billion… Adjusted net income* was $1.6 billion, $5.94 per diluted share” — Tom Wilson .
- Auto recorded CR 86.0 (−9.9 pts y/y) with favorable prior-year reserve releases ($415M) and moderating loss costs; auto new business +24.8% y/y across channels .
- Protection Plans revenue +16.6% y/y (international strength), segment adjusted net income +$5M y/y to $60M .
- Investment income $754M; total portfolio return 1.4% Q2 and 5.4% TTM; risk reduced by cutting public equity and HY, shortening duration .
What Went Wrong
- Catastrophe losses remained heavy at $1.99B (June losses $619M; 15 events), pressuring homeowners (recorded CR 102.0) despite strong underlying margins .
- Health & Benefits down after divestiture: premiums/charges −50% y/y; adjusted net income fell to $4M (−$54M y/y) .
- Retention still below prior-year levels; inactive brand runoff and constrained NY/NJ impacted PIF, though management expects improvement as approvals arrive and SAVE program scales .

Financial Results

Metric	Q4 2024	Q1 2025	Q2 2025
Total Revenues ($USD)	$16.506B	$16.452B	$16.633B
Net Income to Common ($USD)	$1.899B	$0.566B	$2.079B
GAAP Diluted EPS ($)	$7.07	$2.11	$7.76
Adjusted Net Income ($USD)	$2.062B	$0.949B	$1.591B
Adjusted Diluted EPS ($)	$7.67	$3.53	$5.94
Property-Liability Recorded Combined Ratio (%)	86.9	97.4	91.1
Property-Liability Underlying Combined Ratio (%)	83.0	83.1	79.5

Estimate comparison

Metric	Q4 2024 Consensus	Q4 2024 Actual	Q1 2025 Consensus	Q1 2025 Actual	Q2 2025 Consensus	Q2 2025 Actual
EPS ($)	6.28*	7.67	2.53*	3.53	3.26*	5.94
Revenue ($USD)	$16.235B*	$16.506B	$16.362B*	$16.452B	$16.596B*	$16.633B

*Values retrieved from S&P Global.

Segment breakdown (Q2 2025)

Segment	Revenue/PE	Underwriting Income	CR (Recorded)	CR (Underlying)	Other KPIs
Allstate Protection Auto	Premiums earned: $9.528B	$1.331B	86.0	87.8	PIF 25,243k; written +2.7% y/y
Allstate Protection Homeowners	Premiums earned: $3.771B	$(76)M	102.0	58.6	Cat losses $1.614B; PIF 7,596k
Protection Services	Total revenues $867M	Adj. NI $60M	—	—	APP rev $563M; APP adj. NI $51M; Roadside rev $56M; Arity rev $59M
Health & Benefits	Premiums/charges $235M	Adj. NI $4M	—	—	EVB sale recorded in Q2; Group Health close July 1 (Q3 gain)
Investments	Net investment income $754M	—	—	—	Total return 1.4% Q2; unrealized gains +$492M q/q

KPIs and Operating metrics (Q2 2025)

KPI	Q2 2025	Notes
Total policies in force	208,187k	+4.2% y/y
Property-Liability premiums earned	$14.346B	+7.5% y/y
Catastrophe losses (quarter)	$1.990B	Similar to Q2 2024
Auto new applications (thousands)	Exclusive 764; IA 685; Direct 708	New business +24.8% y/y
Auto annualized avg earned premium	$1,510	Up y/y
Auto underlying pure premium YoY	−2.9%	Frequency down, severity moderated
Auto rate increase impact (Q2)	0.4%	Reflects moderating loss trends
Book value per common share	$82.40	+32.6% y/y

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Quarterly dividend per common share	Ongoing	$0.92 (2024)	$1.00 (declared Jul 15, 2025)	Raised
Catastrophe reinsurance total limit	2025 program vs 2024	~+$9B prior year baseline (implied)	Just over $11B (up $2B, −10% risk-adjusted cost)	Raised
US Homeowners aggregate cat limit	2025	Prior lower aggregate	$825M aggregate; +$325M added; $58M utilized	Raised
Group Health sale gain recognition	Q3 2025	N/A	~$500M book gain to be recorded Q3	New
Share repurchases	2025 YTD	Authorization $1.5B	$341M repurchased in Q2	Ongoing execution

Note: No explicit numerical guidance was issued for revenue, combined ratio, operating expense, OI&E, or tax rate in Q2 materials; management indicated “less need for rate going forward” and continued SAVE retention program execution .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4 2024, Q1 2025)	Current Period (Q2 2025)	Trend
AI/Technology and pricing sophistication	Transformative Growth, cost reductions, tech platform gains	New auto product in 40 states; homeowners ASC in 16; pricing sophistication and LLMs mentioned	Accelerating deployment
Telematics/Arity data	Arity revenue up; lead sales growth	ARITY data: 2T miles; expanding to mobility intelligence	Expanding scope
Tariffs/Macro risk	Investment repositioning; duration longer at YE 2024	Reduced public equity exposure due to trade-policy inflation risk; tariffs impact deemed manageable	Proactive risk management
Auto profitability & growth	Auto CR 93.5 in Q4, strong progress	Auto CR 86.0; NY/NJ profitable; pending approvals for ASC to drive growth	Sustained improvement
Homeowners underlying margins	Underlying CR 59.5 in Q4; cat volatility	Underlying CR 58.6; recorded CR 102.0 on high cats; continued confidence	Robust underlying; cat headwinds persist
Regulatory/legal	EVB sale closed Q2; Group Health held for sale	Group Health sale closed July 1; California sustainable insurance strategy filing under review	Divestiture completed; regulatory dialogue ongoing
Distribution/bundling	Multi-channel growth; bundling impactful	New business +21% PPL; agents more productive; roadside bundling supports persistency	Strengthening across channels

Management Commentary

Tom Wilson: “Allstate had strong operating and financial performance… Adjusted net income* was $1.6 billion, $5.94 per diluted share” .
Mario Rizzo: “Auto insurance… combined ratio was 86%… our auto book is now broadly profitable… homeowners underlying combined ratio 58.6% but $1.6B cat losses drove a 102% recorded CR” .
Jess Merten: “Adjusted net income ROE* was 28.6%… divestitures totaled $3.25B… dividend increased to $1.00 and we repurchased $341 million of common stock” .
On NY/NJ: “We’re now generating an underwriting profit… approvals for ASC products would open these markets for growth” .
On reinsurance: “Total catastrophe reinsurance limit… just over $11 billion, up $2 billion… added $325 million of aggregate limit on U.S. homeowners” .

Q&A Highlights

Growth tailwinds vs headwinds: inactive brand runoff diminishing; NY/NJ profitability achieved; approvals expected to unlock growth .
Frequency/severity: technology-driven frequency decline; pure premium down ~3% y/y; injury severity remains elevated .
Reinsurance structure: +$2B total limit, −10% risk-adjusted cost; $825M aggregate homeowners limit with ~$58M utilized .
Retention: stabilized but below prior year; SAVE program targeting 25M interactions; “less need for rate” should aid retention .
California homeowners: reviewing sustainable insurance framework; still not writing new business pending filing outcome .
Tariffs: impact manageable; pricing precision and claim-cycle timing incorporated .

Estimates Context

Q2 2025 EPS and revenue versus consensus: adjusted EPS $5.94 vs $3.26; revenue $16.63B vs $16.60B (S&P Global)* .
Q1 2025 and Q4 2024: continued beats on EPS with revenue in-line to slight beats, reflecting better auto/home performance and investment income (S&P Global)* .
Implication: Sell-side models likely need to raise FY EPS for improved auto profitability, while keeping catastrophe assumptions conservative in homeowners.
*Values retrieved from S&P Global.

Key Takeaways for Investors

Auto inflection sustained: recorded CR 86.0 and underlying 87.8, with new business acceleration and improving pricing sophistication — supports upward EPS estimate revisions .
Homeowners remains a long-term ROE engine despite cat volatility; underlying CR ~59 and policy growth +2.3% y/y — maintain exposure but expect quarterly noise .
Capital deployment is active: dividend increased to $1.00, repurchases ongoing; health divestitures free capital and add ~$500M gain in Q3 — potential near-term stock catalyst .
Risk posture tightened: portfolio duration shortened; public equity and HY reduced; expanded cat reinsurance limits — buffers macro/cat shocks .
Growth narrative credible: NY/NJ profitability achieved; pending product approvals could unlock PIF growth; SAVE program targets retention — watch regulatory milestones .
Protection Services (APP) offers diversified growth; strong international expansion and margin contribution — supports multiple expansion .
Trading lens: Expect positive estimate revisions and dividend yield support; monitor monthly cat updates and California filing outcomes as event risks .