ALLSTATE CORP (ALL) Q3 2025 Earnings Summary

Executive Summary

Q3 2025 was exceptionally strong: revenue $17.26B (+3.8% y/y), net income $3.72B, adjusted EPS $11.17; Property-Liability underwriting income surged to $2.89B, with recorded combined ratio improving to 80.1 from 96.4 y/y .
Results beat Wall Street: EPS beat by ~$3.63 (actual $11.17 vs consensus $7.54*) and revenue beat by ~$0.31B (actual $17.26B vs consensus $16.94B*) — driven by modest catastrophe losses, favorable reserve releases, and higher investment income .
Momentum vs prior quarter: adjusted EPS rose to $11.17 from $5.94 in Q2 and $3.53 in Q1; net investment income increased to $949M; homeowners recorded combined ratio dropped to 71.5 vs 102.0 (Q2) and 112.3 (Q1), reflecting fewer/severe catastrophes .
Management emphasized Transformative Growth and accelerated deployment of generative/agentic AI (ALLI) to lower costs and reimagine customer value; capital return remained active with $624M in Q3 (repurchases $360M, dividends $264M) .

What Went Well and What Went Wrong

What Went Well

Property-Liability profitability: underwriting income $2.89B vs $495M y/y; recorded CR 80.1 (−16.3 pts y/y) on lower catastrophe losses and favorable reserve releases .
Homeowners strength: underwriting profit $1.11B vs $60M y/y; recorded CR 71.5 (−26.7 pts y/y); catastrophe losses declined to $479M (−61%) with no hurricanes/tropical storms .
Auto profitability and growth: recorded CR 82.0 (−12.8 pts y/y); underlying CR 86.0 (−6.0 pts y/y); 23% new business growth, supported by favorable severity development and non-cat reserve releases ($480M; 5.0 pt benefit) .

Management quote: “The Transformative Growth technology platform also supports accelerated deployment of generative and agentic artificial intelligence to lower costs and reimagine customer value.” — Tom Wilson .

What Went Wrong

Protection Services earnings mixed: revenues +9.7% y/y to $902M, but adjusted net income fell $12M (to $46M) due to higher Arity expenses and increased Protection Plans claims .
Arity results softened: revenue $68M (−$6M y/y); adjusted net loss −$8M vs +$1M y/y on increased operating expenses .
Retention headwinds: overall auto retention pressured by growth in non-standard cohorts (shop more, shorter life), and transitions from inactive brands; management is working SAVE program and product migrations (ASC) to improve retention .

Financial Results

Metric	Q1 2025	Q2 2025	Q3 2025
Revenue ($USD Billions)	$16.45	$16.63	$17.26
Net Income to Common ($USD Billions)	$0.57	$2.08	$3.72
Diluted EPS (GAAP)	$2.11	$7.76	$13.95
Adjusted Net Income ($USD Billions)	$0.95	$1.59	$2.98
Adjusted Diluted EPS	$3.53	$5.94	$11.17
Net Investment Income ($USD Millions)	$854	$754	$949

Property-Liability	Q1 2025	Q2 2025	Q3 2025
Premiums Earned ($USD Billions)	$14.03	$14.35	$14.53
Underwriting Income ($USD Millions)	$360	$1,280	$2,894
Recorded Combined Ratio	97.4	91.1	80.1
Underlying Combined Ratio	83.1	79.5	78.7
Catastrophe Losses ($USD Millions)	$2,202	$1,990	$558

Auto (Allstate Protection)	Q1 2025	Q2 2025	Q3 2025
Premiums Earned ($USD Billions)	$9.35	$9.53	$9.59
Underwriting Income ($USD Millions)	$816	$1,331	$1,726
Recorded Combined Ratio	91.3	86.0	82.0
Underlying Combined Ratio	91.2	87.8	86.0

Homeowners (Allstate Protection)	Q1 2025	Q2 2025	Q3 2025
Premiums Earned ($USD Billions)	$3.66	$3.77	$3.88
Underwriting (Loss)/Income ($USD Millions)	$(451)	$(76)	$1,107
Recorded Combined Ratio	112.3	102.0	71.5
Underlying Combined Ratio	62.4	58.6	59.8
Catastrophe Losses ($USD Millions)	$1,824	$1,614	$479

Protection Services	Q1 2025	Q2 2025	Q3 2025
Revenues ($USD Millions)	$860	$867	$902
Adjusted Net Income ($USD Millions)	$55	$60	$46
Protection Plans Revenue ($USD Millions)	$540	$563	$588

KPIs	Q1 2025	Q2 2025	Q3 2025
Total Policies in Force (000s)	210,589	208,187	209,481
Auto Policies in Force (000s)	25,100	25,243	25,332
Homeowners Policies in Force (000s)	7,549	7,596	7,642
Book Value per Common Share ($)	74.61	82.40	95.95
ROE (TTM) — Adjusted	23.7%	28.6%	34.7%

Guidance Changes

Metric	Period	Previous Guidance/Target	Current Guidance/Target	Change
Auto recorded combined ratio target	Ongoing	Mid-90s target	Mid-90s target reaffirmed	Maintained
Homeowners recorded CR target; underlying CR target	Ongoing	Recorded low-90s; underlying low–mid 60s	Targets reaffirmed	Maintained
Common dividend per share	Q2 vs Q3 2025	$1.00 (Q2)	$1.00 (Q3)	Maintained
Share repurchase program	FY 2025	$1.5B authorization (announced; ongoing)	Repurchases $360M in Q3; $624M total return incl. dividends	Ongoing execution
Auto rate actions (annualized premium impact)	Q2 vs Q3 2025	0.4% (Q2)	0.6% (Q3)	Slightly raised due to approvals
Pricing outlook	2026 view	Respond to trends; book broadly rate adequate	Same stance; limited need for rate if trends benign	Maintained

No numerical revenue/EPS/expense guidance was provided. Management reiterated combined ratio targets and capital deployment priorities .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 & Q2 2025)	Current Period (Q3 2025)	Trend
AI/Technology (Generative/Agentic AI; ALLI)	Transformative Growth progressing; investments and efficiency focus	ALLI introduced to reimagine customer value, reduce costs, and accelerate deployment across billing, claims, coding	Expanding scope and ambition
Pricing/Rate Adequacy	Auto rate actions moderating; annualized impact 1.4% (Q1) and 0.4% (Q2)	Book broadly rate adequate; minimal rate need excluding NY/NJ; will respond to trends into 2026	Moderating; focus shifts to retention
Catastrophes & Homeowners	Elevated in Q1 (homeowners CR 112.3); still high Q2 (CR 102.0)	Lower cat losses; homeowners CR 71.5; strong underwriting profit	Marked improvement
Capital & Investments	Portfolio duration shortened in Q2; proactive reallocation; divestitures closed	Duration lengthened; added equity exposure; NII $949M; ROE 34.7%	More constructive risk posture
Distribution & Agents	Expanded distribution; agent productivity strong	Agents down to ~6,000 from >10,000 over TG; higher productivity; equal new business across channels	Balanced multi-channel growth
Retention & SAVE program	Retention pressured by shopping; SAVE, telematics, bundling initiatives	SAVE tailored offers; migrate customers to ASC products to improve retention and pricing	Execution focus intensifies
Regulatory/Legal	Divestitures completed; limited legal noted	Florida tort reform praised; NY/NJ approvals pending for ASC; profitability present; selective reopening	Regulatory engagement ongoing
Non-standard Auto Growth	Strong growth via Direct Auto/National General	Non-standard contributes to PIF growth; acceptable economics despite lower retention	Continued emphasis

Management Commentary

“Revenues increased to $17.3 billion… Net income was $3.7 billion… Adjusted net income* was $3.0 billion, or $11.17 per diluted share.” — Tom Wilson .
“Transformative Growth… supports accelerated deployment of generative and agentic artificial intelligence… Allstate will continue to create shareholder value by innovating.” — Tom Wilson .
“Adjusted net income return on equity* was 34.7%… statutory surplus increased to $22.5B… returned $624M to common shareholders (repurchases $360M; dividends $264M).” — John Dugenske .
“In auto insurance, we target a mid-90s recorded combined ratio… homeowners target a low-90s recorded CR and underlying in the low- to mid-60s.” — Mario Rizzo .
“We’re lowering prices while maintaining attractive margins… transitioning customers to our new auto and home products… bundling is increasing.” — Jess Merten .

Q&A Highlights

Capital deployment: Ample Holdco liquidity; priority to invest in core growth, optimize investments, pursue M&A opportunistically, and maintain buybacks/dividends .
Pricing outlook: Book broadly rate adequate; minimal rate need ex-NY/NJ; 2026 response will be data-driven based on loss trends (frequency the wild card) .
AI strategy: ALLI in design/build; generative AI already deployed in billing, claims communications, actuarial/finance; goal to reduce costs and personalize offerings at scale .
Competition: Highly competitive landscape (Progressive, State Farm, GEICO); Allstate gaining new business above industry shopping growth, with strong economics in non-standard .
Retention: SAVE program and migration to ASC products to enhance retention; agents leveraging AI/data to deepen relationships .
Regulatory: Florida tort reform commended; NY/NJ ASC approvals sought; profitable and writing some new business with existing product; expanding as approvals come .

Estimates Context

Q3 2025: EPS consensus $7.54* vs actual adjusted EPS $11.17 — Beat; Revenue consensus $16.94B* vs actual $17.26B — Beat .
Limited estimate depth on revenue (# of estimates = 1–2), but magnitude of beat implies upward estimate revisions for FY run-rate. Target price consensus mean $236.1* (20 estimates).
Values retrieved from S&P Global.

Metric	Q3 2025 Consensus	Q3 2025 Actual
EPS (Primary)	7.54*	11.17
Revenue ($USD Billions)	16.94*	17.26

Key Takeaways for Investors

Strong beat and inflection in underwriting profitability, with homeowners catastrophe normalization and auto underlying margins improving; supports sustained ROE >30% near term .
Growth engine intact: PIFs expanding across active brands; non-standard gains via National General/Direct Auto; homeowners new business and bundling robust .
AI/ALLI is a multi-year cost and CX lever; early generative AI deployments are tangible, with agentic AI potentially expanding margin and retention — a medium-term multiple catalyst .
Pricing stance pragmatic: limited rate need as book broadly adequate; management poised to flex if frequency/severity trends change — reduces downside estimate risk .
Capital strength and deployment optionality (repurchases, dividends, selective growth exposure in portfolio) likely to underpin total shareholder return while enabling growth .
Watchlist: NY/NJ product approvals (ASC) to unlock additional PIF growth; Arity profitability path; Protection Plans claims normalization .
Near-term trading: positive setup on beat/raise dynamic and narrative of cost leverage + homeowners normalization; monitor macro (rates/inflation) and catastrophe seasonality .

Notes:
* Non-GAAP adjusted figures are reconciled in company materials; adjusted EPS excludes investment/derivative gains/losses, pension remeasurement, intangibles amortization, disposition gains, and related tax effects **[899051_4c876febe3494369b5935d64fd5d7900_12]** **[899051_4c876febe3494369b5935d64fd5d7900_15]**.
* Segment/ratio definitions (underlying combined ratio, adjusted expense ratios) provided in investor supplement **[899051_0000899051-25-000100_allcorp93025investorsupp.htm:12]** **[899051_0000899051-25-000100_allcorp93025investorsupp.htm:14]** **[899051_0000899051-25-000100_allcorp93025earningsreleas.htm:15]**.