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Allstate (ALL) Q2 Earnings Beat on Property-Liability Rate Hikes
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The Allstate Corporation (ALL - Free Report) reported strong second-quarter results, which benefited on the back of prudent rate increases, rise in Market-based investment income and insurance premiums. Also, improved Property-Liability underwriting results, thanks to its profit improvement plan, lower catastrophe losses and total expenses, aided the bottom line.
The second-quarter 2024 adjusted net income of $1.61 per share surpassed the Zacks Consensus Estimate of 33 cents. The company reported a loss of $4.42 per share in the year-ago quarter.
Operating revenues of $15.8 billion rose 12% year over year in the quarter under review. The top line beat the consensus mark by 1.7%.
The Allstate Corporation Price, Consensus and EPS Surprise
Net investment income improved 16.7% year over year to $712 million in the second quarter thanks to increased market-based income, partly offset by reduced performance-based income. However, it missed the Zacks Consensus Estimate of $731.5 million and our model estimate of $713.6 million. Market-based investment income increased 24.4% year over year thanks to increased yields in fixed-income portfolios. However, performance-based investment income was affected by lower real estate investment results.
Total costs and expenses of $15.3 billion decreased 2.8% year over year but were higher than our estimate of $15 billion. The year-over-year decline was due to lower property and casualty insurance claims and claims expenses.
Allstate generated a pretax income of $430 million in the quarter under review against the year-ago quarter’s pretax loss of $1.7 billion.
Total policies in force were 199.9 million as of Jun 30, 2024, up 6.3% year over year. Catastrophe losses dropped 21.4% year over year in the second quarter to $2.1 billion.
Segmental Performances
The Property-Liability segment recorded premiums earned of $13.3 billion, which advanced 11.9% year over year on the back of increased average premiums resulting from rate hikes. The metric beat our model estimate of $13.1 billion. Premiums earned from Allstate brand and National General jumped 8.9% and 27.3%, respectively, from the year-ago period.
Underwriting loss in the Property-Liability unit amounted to $145 million in the second quarter, improving from the prior-year quarter’s loss of $2.1 billion. The metric was aided by a rise in earned premiums, reduced catastrophe losses and favorable underlying loss experience. The combined ratio of 101.1% improved 1,650 basis points year over year in the quarter under review and met our estimate.
The Protection Services segment’s revenues grew 12.7% year over year to $773 million in the second quarter, thanks to strength in Allstate Protection Plans and Arity. Also, the figure beat the consensus mark by 4.8%. Adjusted net income of $55 million improved 34.1% year over year and beat our model estimate of $52.9 million on the back of Allstate Protection Plans.
The Allstate Health and Benefits segment reported premium and contract charges of $474 million, which improved 4.6% year over year in the quarter under review and beat the Zacks Consensus Estimate and our model estimate by more than 2%. The unit’s performance was driven by sound individual health and group health results. Adjusted net income grew 1.8% year over year to $58 million, which beat the consensus mark by 8.6%.
Financial Update (as of Jun 30, 2024)
Allstate exited the second quarter with a cash balance of $599 million, which decreased from $722 million at 2023-end. Total assets of $108.4 billion increased from $103.4 billion at 2023-end.
Debt amounted to $8.1 billion, which increased from $7.9 billion at 2023-end.
Total shareholders’ equity of $18.6 billion increased from $17.8 billion at 2023-end.
Book value per common share was $62.14 as of Jun 30, 2024, which grew from $58.65 at 2023-end.
The Zacks Consensus Estimate for W. R. Berkley’s current-year earnings is pegged at $3.96 per share, which indicates 20.7% year-over-year growth. It witnessed four upward estimate revisions in the past 30 days against one downward movement. The consensus mark for WRB’s current year revenues suggests an 11.4% increase from a year ago.
The Zacks Consensus Estimate for Progressive’s 2024 earnings indicates a 96.7% year-over-year surge. During the past month, PGR has witnessed 11 upward estimate revisions against none in the opposite direction. It beat earnings estimates in each of the past four quarters, with an average surprise of 24.1%.
The Zacks Consensus Estimate for Marsh & McLennan’s current-year earnings suggests a 9.1% year-over-year jump. During the past month, MMC has witnessed five upward estimate revisions against none in the opposite direction. The consensus mark for current-year revenues indicates 6.8% growth from a year ago.
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Allstate (ALL) Q2 Earnings Beat on Property-Liability Rate Hikes
The Allstate Corporation (ALL - Free Report) reported strong second-quarter results, which benefited on the back of prudent rate increases, rise in Market-based investment income and insurance premiums. Also, improved Property-Liability underwriting results, thanks to its profit improvement plan, lower catastrophe losses and total expenses, aided the bottom line.
The second-quarter 2024 adjusted net income of $1.61 per share surpassed the Zacks Consensus Estimate of 33 cents. The company reported a loss of $4.42 per share in the year-ago quarter.
Operating revenues of $15.8 billion rose 12% year over year in the quarter under review. The top line beat the consensus mark by 1.7%.
The Allstate Corporation Price, Consensus and EPS Surprise
The Allstate Corporation price-consensus-eps-surprise-chart | The Allstate Corporation Quote
Key Takeaways
Net investment income improved 16.7% year over year to $712 million in the second quarter thanks to increased market-based income, partly offset by reduced performance-based income. However, it missed the Zacks Consensus Estimate of $731.5 million and our model estimate of $713.6 million. Market-based investment income increased 24.4% year over year thanks to increased yields in fixed-income portfolios. However, performance-based investment income was affected by lower real estate investment results.
Total costs and expenses of $15.3 billion decreased 2.8% year over year but were higher than our estimate of $15 billion. The year-over-year decline was due to lower property and casualty insurance claims and claims expenses.
Allstate generated a pretax income of $430 million in the quarter under review against the year-ago quarter’s pretax loss of $1.7 billion.
Total policies in force were 199.9 million as of Jun 30, 2024, up 6.3% year over year. Catastrophe losses dropped 21.4% year over year in the second quarter to $2.1 billion.
Segmental Performances
The Property-Liability segment recorded premiums earned of $13.3 billion, which advanced 11.9% year over year on the back of increased average premiums resulting from rate hikes. The metric beat our model estimate of $13.1 billion. Premiums earned from Allstate brand and National General jumped 8.9% and 27.3%, respectively, from the year-ago period.
Underwriting loss in the Property-Liability unit amounted to $145 million in the second quarter, improving from the prior-year quarter’s loss of $2.1 billion. The metric was aided by a rise in earned premiums, reduced catastrophe losses and favorable underlying loss experience. The combined ratio of 101.1% improved 1,650 basis points year over year in the quarter under review and met our estimate.
The Protection Services segment’s revenues grew 12.7% year over year to $773 million in the second quarter, thanks to strength in Allstate Protection Plans and Arity. Also, the figure beat the consensus mark by 4.8%. Adjusted net income of $55 million improved 34.1% year over year and beat our model estimate of $52.9 million on the back of Allstate Protection Plans.
The Allstate Health and Benefits segment reported premium and contract charges of $474 million, which improved 4.6% year over year in the quarter under review and beat the Zacks Consensus Estimate and our model estimate by more than 2%. The unit’s performance was driven by sound individual health and group health results. Adjusted net income grew 1.8% year over year to $58 million, which beat the consensus mark by 8.6%.
Financial Update (as of Jun 30, 2024)
Allstate exited the second quarter with a cash balance of $599 million, which decreased from $722 million at 2023-end. Total assets of $108.4 billion increased from $103.4 billion at 2023-end.
Debt amounted to $8.1 billion, which increased from $7.9 billion at 2023-end.
Total shareholders’ equity of $18.6 billion increased from $17.8 billion at 2023-end.
Book value per common share was $62.14 as of Jun 30, 2024, which grew from $58.65 at 2023-end.
Zacks Rank & Key Picks
ALL currently carries a Zacks Rank #3 (Hold).
Investors interested in the broader Finance space may look at some better-ranked players like W. R. Berkley Corporation (WRB - Free Report) , The Progressive Corporation (PGR - Free Report) and Marsh & McLennan Companies, Inc. (MMC - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for W. R. Berkley’s current-year earnings is pegged at $3.96 per share, which indicates 20.7% year-over-year growth. It witnessed four upward estimate revisions in the past 30 days against one downward movement. The consensus mark for WRB’s current year revenues suggests an 11.4% increase from a year ago.
The Zacks Consensus Estimate for Progressive’s 2024 earnings indicates a 96.7% year-over-year surge. During the past month, PGR has witnessed 11 upward estimate revisions against none in the opposite direction. It beat earnings estimates in each of the past four quarters, with an average surprise of 24.1%.
The Zacks Consensus Estimate for Marsh & McLennan’s current-year earnings suggests a 9.1% year-over-year jump. During the past month, MMC has witnessed five upward estimate revisions against none in the opposite direction. The consensus mark for current-year revenues indicates 6.8% growth from a year ago.