The Allstate Corporation has announced that its total revenue increased by 5.8% in the third-quarter of 2019 to $11.1 billion, while the firm’s underwriting income jumped by more than 45% and its combined ratio strengthened to 91.6, compared with 93.9 in the third-quarter of 2018.
Underwriting income totalled $737 million for Allstate in the third-quarter, primarily as a result of elevated earned premiums, reduced cat losses and lower operating expenses, and also helped by non-catastrophe prior year reserve releases of $41 million in the property liability segment.
Premiums written increased by 5.8% to $9.3 billion versus $8.8 billion in the same period in 2018, supported by premium growth in all segments.
At $889 million, Allstate has announced a decline in net income when compared with the previous year. Catastrophe losses had less of an impact this year than in the prior year, totalling $510 million, which is down 18.4% on the $625 million announced in Q3 2018.
Chair, President and Chief Executive Officer (CEO) of The Allstate Corporation, Tom Wilson said: “Excellent growth and profitability reflect a consistent strategy, innovation and strong operating capabilities.
“The strategy to increase market share in personal property-liability and diversify protection offerings is resonating with customers. Revenues for the last three months increased to $11.1 billion, up 5.8% from the prior year. Strong operating capabilities enabled us to generate net income of $889 million and adjusted net income* of $946 million in the quarter, which was $2.84 per share. Return on equity was 14.2% over the last 12 months, on an adjusted net income* basis.”
“Results were also strong on the five Operating Priorities, which focus on near-term performance and long-term value creation. Customer Net Promoter Scores improved, and growth in personal property-liability policies in force was achieved for both the Allstate and Esurance brands. Expansion into protection plans using innovative technology and the Allstate brand is working, with policies in force increasing by 39.4 million over the prior year.
“Proactive investment management resulted in a total return for the latest 12 months of 7.8% as we lengthened duration ahead of interest rate declines and remained invested in equities. Long-term growth investments in telematics, protection plans and identity protection are being funded while returning substantial capital to shareholders.”
Allstate’s net investment income declined slightly in the period to $880 million versus $844 million in Q3 2018. While the firm’s total return on the investment portfolio for the third-quarter of 2019 was 1.9% and 7.8% for the last 12 months, which it says is a reflection of lower market yields, higher equity values and proactive risk and return management.
Allstate’s Chief Financial Officer (CFO), Mario Rizzo, added: “Allstate continued to aggressively manage the cost of capital by issuing $1.15 billion of preferred stock in the quarter, which was used to redeem a similar amount of higher dividend preferred stock earlier this month.
“We also returned $775 million to shareholders during the third quarter through a combination of $166 million in common stock dividends and repurchasing $609 million of outstanding common shares. Allstate has repurchased 6.7% of common stock outstanding (23.0 million shares) over the past 12 months and has $962 million remaining on its current share repurchase authorization.”
