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Allstate (ALL) Q1 Earnings Beat on Expanding Auto Premiums
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The Allstate Corporation (ALL - Free Report) reported a first-quarter 2024 adjusted net income of $5.13 per share, which surpassed the Zacks Consensus Estimate by 24.8%. The company reported a loss of $1.30 per share in the year-ago quarter.
Operating revenues of $15.4 billion rose 12% year over year in the quarter under review. The year-over-year growth was due to a 10.9% increase in Property-Liability insurance premiums earned. The top line beat the consensus mark of $15.3 billion.
The quarterly results benefited on the back of prudent rate increases, a rise in investment income, strong underwriting results, favorable weather conditions and a decline in expenses. However, the upside was partly offset by lower policies in force in Allstate Protection Auto business and premiums and contract charges from Employer voluntary benefits.
The Allstate Corporation Price, Consensus and EPS Surprise
Net investment income improved 32.9% year over year to $764 million in the first quarter and beat the Zacks Consensus Estimate of $662 million. The metric benefited on the back of improved yields from the fixed-income portfolio, resulting in 23.5% year-over-year growth in market-based investment income. Performance-based investment income also rose 59.5% year over year due to an uprise in private equity valuation.
Total costs and expenses of $13.8 billion decreased 2.8% year over year and came in lower than our estimate of $14.1 billion. The year-over-year decline was due to lower property and casualty insurance claims and claims expenses.
Allstate generated a pretax income of $1.5 billion in the quarter under review against the year-ago quarter’s pretax loss of $406 million.
Total policies in force were 197.3 million as of Mar 31, 2024, up 5.7% year over year.
Catastrophe losses dropped 56.8% year over year to $731 million in the first quarter.
Segmental Performances
The Property-Liability segment recorded premiums earned of $12.9 billion, which advanced 10.9% year over year on the back of increased average premiums resulting from rate hikes. The metric beat our estimate of $12.8 billion. The Allstate brand gained from improved auto and homeowners’ average premiums, while average premium growth and an increase in the number of policies contributed to the results of National General.
Underwriting income in the unit amounted to $898 million in the first quarter against the prior-year quarter’s underwriting loss of $1 billion. The metric was aided by a rise in earned premiums, reduced catastrophe losses and favorable underlying loss experience. The combined ratio of 93% improved 1,560 basis points (bps) year over year in the quarter under review and came lower than our estimate of 97.1%.
The Protection Services segment’s revenues grew 12.2% year over year to $753 million in the first quarter, thanks to strength in Allstate Protection Plans. However, the figure fell short of the consensus mark by 2.2%. Adjusted net income of $54 million improved 58.8% year over year on the back of Allstate Roadside and Allstate Protection Plans.
The Allstate Health and Benefits segment reported premium and contract charges of $478 million, which improved 3.2% year over year in the quarter under review and beat the Zacks Consensus Estimate of $469 million and our estimate of $470 million. The unit’s performance was driven by sound individual health and group health results. Adjusted net income remained stable year over year at $56 million, which lagged the consensus mark of $65 million.
Financial Update (as of Mar 31, 2024)
Allstate exited the first quarter with a cash balance of $850 million, which increased from $722 million at 2023-end. Total assets of $105.2 billion increased from $103.4 billion at 2023-end.
Debt amounted to $7.9 billion, which remained stable from 2023-end.
Total shareholders’ equity of $18.6 billion increased from $17.8 billion at 2023-end.
Book value per common share was $62.27 as of Mar 31, 2024, which grew from $58.65 at 2023-end.
The adjusted net income return on ALL’s common shareholders’ equity in the trailing 12-month period was 11.3%. The metric was recorded at a negative figure of 6.7% in the prior-year comparable period.
The Travelers Companies (TRV - Free Report) reported first-quarter 2024 core income of $4.69 per share, which missed the Zacks Consensus Estimate of $4.75 on higher-than-expected catastrophe loss. The bottom line increased 14.1% year over year, driven by higher underlying underwriting gain and higher net investment income, partially offset by higher catastrophe losses. Travelers’ total revenues increased 15.3% from the year-ago quarter to $11.2 billion, primarily driven by higher premiums. The top-line figure beat the Zacks Consensus Estimate by 0.1%.
Net written premiums increased 8% year over year to about $10.2 billion, driven by strong growth across all three segments. The figure was higher than our estimate of $9.9 billion. Travelers witnessed an underwriting gain of $1.4 billion, up 57.3% year over year, driven by higher business volumes.
Consolidated underlying combined ratio of 87.7 improved 290 bps year over year. The combined ratio improved 150 bps year over year to 93.9 due to an improvement in the underlying combined ratio, partially offset by higher catastrophe losses and lower net favorable prior-year reserve development. The Zacks Consensus Estimate was pegged at 94.
Progressive Corporation’s (PGR - Free Report) first-quarter 2024 earnings per share of $3.83 beat the Zacks Consensus Estimate of $3.20. The bottom line improved nearly eight times year over year. Operating revenues of $17.1 billion beat the Zacks Consensus Estimate by 2.4% and increased 20.1% year over year.
Net premiums earned grew 19% to $16 billion and beat our estimate of $14.4 billion. Combined ratio — the percentage of premiums paid out as claims and expenses — improved 1,290 bps from the prior-year quarter’s level to 86.1.
RLI Corp. (RLI - Free Report) reported first-quarter 2024 operating earnings of $1.89 per share, beating the Zacks Consensus Estimate as well as the year-ago number by 16%. The quarterly results reflected continued premium growth across all product segments. Operating revenues for the reported quarter were $394 million, up 17.6% year over year, driven by 17% higher net premiums earned and 21.3% higher net investment income. The top line, however, missed the Zacks Consensus Estimate by 0.1%.
Gross premiums written increased 13% year over year to $468 million. This uptick can be attributed to the solid performance of the Casualty (up 12.6%), Property (up 13.5%) and Surety (up 12.1%) segments. Our estimate was $511 million. Underwriting income of $77.7 million increased 16%. Combined ratio deteriorated 60 bps year over year to 78.5. The Zacks Consensus Estimate for the metric was pegged at 85, while our estimate was 77.7.
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Allstate (ALL) Q1 Earnings Beat on Expanding Auto Premiums
The Allstate Corporation (ALL - Free Report) reported a first-quarter 2024 adjusted net income of $5.13 per share, which surpassed the Zacks Consensus Estimate by 24.8%. The company reported a loss of $1.30 per share in the year-ago quarter.
Operating revenues of $15.4 billion rose 12% year over year in the quarter under review. The year-over-year growth was due to a 10.9% increase in Property-Liability insurance premiums earned. The top line beat the consensus mark of $15.3 billion.
The quarterly results benefited on the back of prudent rate increases, a rise in investment income, strong underwriting results, favorable weather conditions and a decline in expenses. However, the upside was partly offset by lower policies in force in Allstate Protection Auto business and premiums and contract charges from Employer voluntary benefits.
The Allstate Corporation Price, Consensus and EPS Surprise
The Allstate Corporation price-consensus-eps-surprise-chart | The Allstate Corporation Quote
Q1 Operations
Net investment income improved 32.9% year over year to $764 million in the first quarter and beat the Zacks Consensus Estimate of $662 million. The metric benefited on the back of improved yields from the fixed-income portfolio, resulting in 23.5% year-over-year growth in market-based investment income. Performance-based investment income also rose 59.5% year over year due to an uprise in private equity valuation.
Total costs and expenses of $13.8 billion decreased 2.8% year over year and came in lower than our estimate of $14.1 billion. The year-over-year decline was due to lower property and casualty insurance claims and claims expenses.
Allstate generated a pretax income of $1.5 billion in the quarter under review against the year-ago quarter’s pretax loss of $406 million.
Total policies in force were 197.3 million as of Mar 31, 2024, up 5.7% year over year.
Catastrophe losses dropped 56.8% year over year to $731 million in the first quarter.
Segmental Performances
The Property-Liability segment recorded premiums earned of $12.9 billion, which advanced 10.9% year over year on the back of increased average premiums resulting from rate hikes. The metric beat our estimate of $12.8 billion. The Allstate brand gained from improved auto and homeowners’ average premiums, while average premium growth and an increase in the number of policies contributed to the results of National General.
Underwriting income in the unit amounted to $898 million in the first quarter against the prior-year quarter’s underwriting loss of $1 billion. The metric was aided by a rise in earned premiums, reduced catastrophe losses and favorable underlying loss experience. The combined ratio of 93% improved 1,560 basis points (bps) year over year in the quarter under review and came lower than our estimate of 97.1%.
The Protection Services segment’s revenues grew 12.2% year over year to $753 million in the first quarter, thanks to strength in Allstate Protection Plans. However, the figure fell short of the consensus mark by 2.2%. Adjusted net income of $54 million improved 58.8% year over year on the back of Allstate Roadside and Allstate Protection Plans.
The Allstate Health and Benefits segment reported premium and contract charges of $478 million, which improved 3.2% year over year in the quarter under review and beat the Zacks Consensus Estimate of $469 million and our estimate of $470 million. The unit’s performance was driven by sound individual health and group health results. Adjusted net income remained stable year over year at $56 million, which lagged the consensus mark of $65 million.
Financial Update (as of Mar 31, 2024)
Allstate exited the first quarter with a cash balance of $850 million, which increased from $722 million at 2023-end. Total assets of $105.2 billion increased from $103.4 billion at 2023-end.
Debt amounted to $7.9 billion, which remained stable from 2023-end.
Total shareholders’ equity of $18.6 billion increased from $17.8 billion at 2023-end.
Book value per common share was $62.27 as of Mar 31, 2024, which grew from $58.65 at 2023-end.
The adjusted net income return on ALL’s common shareholders’ equity in the trailing 12-month period was 11.3%. The metric was recorded at a negative figure of 6.7% in the prior-year comparable period.
Zacks Rank
Allstate currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performances of Other Insurers
The Travelers Companies (TRV - Free Report) reported first-quarter 2024 core income of $4.69 per share, which missed the Zacks Consensus Estimate of $4.75 on higher-than-expected catastrophe loss. The bottom line increased 14.1% year over year, driven by higher underlying underwriting gain and higher net investment income, partially offset by higher catastrophe losses. Travelers’ total revenues increased 15.3% from the year-ago quarter to $11.2 billion, primarily driven by higher premiums. The top-line figure beat the Zacks Consensus Estimate by 0.1%.
Net written premiums increased 8% year over year to about $10.2 billion, driven by strong growth across all three segments. The figure was higher than our estimate of $9.9 billion. Travelers witnessed an underwriting gain of $1.4 billion, up 57.3% year over year, driven by higher business volumes.
Consolidated underlying combined ratio of 87.7 improved 290 bps year over year. The combined ratio improved 150 bps year over year to 93.9 due to an improvement in the underlying combined ratio, partially offset by higher catastrophe losses and lower net favorable prior-year reserve development. The Zacks Consensus Estimate was pegged at 94.
Progressive Corporation’s (PGR - Free Report) first-quarter 2024 earnings per share of $3.83 beat the Zacks Consensus Estimate of $3.20. The bottom line improved nearly eight times year over year. Operating revenues of $17.1 billion beat the Zacks Consensus Estimate by 2.4% and increased 20.1% year over year.
Net premiums earned grew 19% to $16 billion and beat our estimate of $14.4 billion. Combined ratio — the percentage of premiums paid out as claims and expenses — improved 1,290 bps from the prior-year quarter’s level to 86.1.
RLI Corp. (RLI - Free Report) reported first-quarter 2024 operating earnings of $1.89 per share, beating the Zacks Consensus Estimate as well as the year-ago number by 16%. The quarterly results reflected continued premium growth across all product segments. Operating revenues for the reported quarter were $394 million, up 17.6% year over year, driven by 17% higher net premiums earned and 21.3% higher net investment income. The top line, however, missed the Zacks Consensus Estimate by 0.1%.
Gross premiums written increased 13% year over year to $468 million. This uptick can be attributed to the solid performance of the Casualty (up 12.6%), Property (up 13.5%) and Surety (up 12.1%) segments. Our estimate was $511 million. Underwriting income of $77.7 million increased 16%. Combined ratio deteriorated 60 bps year over year to 78.5. The Zacks Consensus Estimate for the metric was pegged at 85, while our estimate was 77.7.