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Allstate's (ALL) Q2 Earnings Beat Estimates, Improve Y/Y

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Allstate Corporation’s (ALL - Free Report) second-quarter 2020 earnings of $2.46 per share beat the Zacks Consensus Estimate by 74.47% and also increased 12.8% year over year, led by improved premiums and policies in force.

However, revenues of $10.49 billion missed the Zacks Consensus Estimate by 2.87% and also dipped 3% year over year due to weak net investment income, partly offset by higher premiums.

Total expenses declined 4.1% year over year to $9.6 billion on lower claim expenses,  partly offset by a $738-million Shelter-in-Pay expense.

Total policies in force as of Jun 30, 2020 were 167.54 million, up 28.7% year over year.

Net investment income of $409 million dropped 56.6% year over year.
The company incurred $1.19 billion of catastrophe losses, up 10.6% year over year. It also incurred a Shelter-in-Place payback expense of $738 million.

The Allstate Corporation Price, Consensus and EPS Surprise

The Allstate Corporation Price, Consensus and EPS Surprise

Solid Segmental Performances

Property-Liability insurance premiums of $9.17 billion inched up 1.4% year over year, driven by premium and policy growth in Allstate brand personal lines. The segment’s underwriting income of $904 million soared 146.3% year over year, primarily owing to a decline in auto losses from fewer accidents and higher premiums earned, partially offset by the Shelter-in-Place Payback expense and worse catastrophe losses.

Service Business’ revenues of $476 million were up 17.5% year over year owing to higher contributions from Protection Plans, Dealer Services, Arity and Indentity Protection businesses, partly offset by soft revenues from Roadside Servcies.

Allstate Life, Benefits and Annuities’ total premium and contract charges were $604 million, down 2.7% year over year, due to lower contribution from Allstate Benefits as well as Annuities businesses.

Capital Position (as of Jun 30, 2020)

Total shareholders’ equity was $26.98 billion, up 3.8% from the level as of Dec 31, 2019.

Total assets were $121.3 billion, up 1.1% from the level on Dec 31, 2019.
Adjusted return-on-equity of 18.2% was up 700 basis points year over year.

Share Buyback and Dividend Payment

The company returned $563 million in cash to its shareholders through $172 million as common shareholder dividends and the repurchase of $391 million worth common shares.

Zacks Rank and Performance of Other Players

Allstate carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Among other players in the insurance space that already reported second-quarter earnings, the bottom-line results of Principal Financial Group (PFG - Free Report) , The Progressive Corp. (PGR - Free Report) and Chubb Ltd. (CB - Free Report) beat the respective estimates by 11.45%, 6.4% and 15.1%.

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