Allstate has announced a second quarter net income applicable to common shareholders of $1.6 billion, up from the $1.2 billion announced in the prior year quarter.
This upswing was primarily driven by higher performance-based investment income results.
Adjusted net income of $1.1 billion, increased $333 million compared to the prior year quarter.
Allstate attributes the improvement to higher net investment income and higher earned premiums from the acquisition of National General and lower Shelter-in-Place Payback expense, partially offset by higher non-catastrophe losses.
The second quarter of 2020 was significantly impacted by the low level of auto accident frequency experienced due to the pandemic.
The underlying Q2 combined ratio of 85.7% was 8.9 points above the prior year quarter, reflecting higher non-catastrophe losses due to increased auto accident frequency and higher incurred auto and homeowners claims severity, partially offset by lower expenses.
Total revenues of $12.6 billion in the second quarter increased 21.6% primarily reflecting higher earned premiums from the acquisition of National General and increased net investment income.
Higher revenues from Protection Services, driven by the continued expansion of Allstate Protection Plans, also contributed to revenue growth in the quarter.
“Allstate has performed exceptionally as the economy rebounds from the pandemic by focusing on execution, innovation and long-term value creation,” said Tom Wilson, Chair, President and CEO of The Allstate Corporation.
“Revenues grew 21.6% over the prior year, reflecting execution of a multi-faceted plan to increase growth. The Property-Liability combined ratio of 95.7 was attractive despite an increase in the frequency of auto accidents and $952 million of catastrophe losses.
“Investment income from the performance-based portfolio increased by $759 million, reflecting our long-term approach to managing risk-adjusted returns. The Transformative Growth plan and innovation are also creating long-term shareholder value.”
“Property-Liability policies in force and premiums written were 12.1% and 12.5%, respectively, above the prior year due to expansion of auto insurance sold through independent agents with the National General acquisition,” he added.
“Policies in force through Allstate’s direct and agent operations were flat as a 6.7% increase in new business, due to improved auto insurance pricing and increased advertising, was offset by lower customer retention reflecting pandemic-related customer support in the prior year.