01—Abstract
Summary
Summary of the 10-K filed February 22, 2012. Cited figures are marked; the original filing is the authoritative source.
In 2011, The Allstate Corporation (ALL) demonstrated resilience amidst a challenging operating environment, reporting consolidated net income of $788 milliona, or $1.51 per diluted share.
While this represents a decrease from 2010's $928 millionb net income, the company's Allstate Protection segment navigated significant catastrophe losses, particularly impacting its homeowners business, leading to an underwriting loss of $849 million for the segment. Conversely, the Allstate Financial segment showed a strong recovery, posting net income of $586 million, a substantial increase from $58 million in 2010, driven by net realized capital gains and improved interest crediting management.
The company completed the acquisition of Esurance and Answer Financial, strengthening its presence in the direct-to-consumer insurance market. Allstate continued its commitment to shareholder returns through dividends and share repurchases, underscoring its focus on profitability, capital management, and strategic growth across its diverse business segments.
02—Key points
Key Highlights
- Consolidated net income decreased to $788 million in 2011 from $928 million in 2010, with diluted EPS at $1.51 versus $1.71.
- The Allstate Protection segment incurred an underwriting loss of $849 million due to increased homeowners underwriting losses and higher catastrophe losses, resulting in a combined ratio of 103.4%.
- Allstate Financial segment net income surged to $586 million in 2011, a significant improvement from $58 million in 2010, driven by net realized capital gains and reduced interest credited to contractholder funds.
- The acquisition of Esurance and Answer Financial for $1.01 billion was completed in October 2011, expanding the company's direct-to-consumer reach.
- Total revenues increased to $32.65 billion in 2011 from $31.40 billion in 2010.
- Net realized capital gains were $503 million in 2011, a substantial improvement from net realized capital losses of $827 million in 2010.
- Shareholders' equity decreased slightly to $18.67 billion as of December 31, 2011, from $19.02 billion as of December 31, 2010, while the company returned capital through dividends and share repurchases.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2011filed February 22, 2012Financial Statements
FY2011 against FY2010
| Line item | FY2011FY2010 | Change |
|---|---|---|
| Revenue | $32.65B$31.40B | +4.0% |
| Interest Expense | $367.00M$367.00M | 0.0% |
| Net Income | $787.00M$911.00M | −13.6% |
| EPS (Basic) | $1.51$1.69 | −10.7% |
| EPS (Diluted) | $1.50$1.68 | −10.7% |
| Shares Outstanding (Basic) | 520.70M540.30M | −3.6% |
| Shares Outstanding (Diluted) | 523.10M542.50M | −3.6% |
05—Questions
Frequently Asked Questions
What was the impact of catastrophes on Allstate's 2011 results?
Catastrophe losses significantly impacted Allstate's 2011 results, particularly in the Allstate Protection segment. Total catastrophe losses amounted to $3.82 billion, a substantial increase from $2.21 billion in 2010. This heavily influenced the homeowners segment, contributing to a higher loss ratio and an overall underwriting loss for the segment.
How did the Allstate Financial segment perform in 2011?
The Allstate Financial segment demonstrated a strong recovery in 2011, reporting net income of $586 million compared to $58 million in 2010. This improvement was driven by significant net realized capital gains ($388 million in 2011 vs. a net loss of $517 million in 2010) and a reduction in interest credited to contractholder funds. The segment also saw a decrease in contractholder funds and continued its strategy to reduce concentration in spread-based products.
What is the significance of the Esurance and Answer Financial acquisition?
The acquisition of Esurance and Answer Financial for $1.01 billion in October 2011 was a strategic move to enhance Allstate's capabilities in serving the self-directed and brand-sensitive market segments. Esurance focuses on online direct-to-consumer auto insurance, while Answer Financial operates as an independent agency offering comparison quotes, both of which expand Allstate's distribution channels and market reach.
How is Allstate managing its capital and liquidity?
Allstate maintained a strong capital position with shareholders' equity of $18.67 billion as of December 31, 2011. The company continued to return capital to shareholders through dividends and share repurchases. A $1.00 billion share repurchase program commenced in November 2011 is expected to be completed by March 2013. The company also has access to significant liquidity through its parent company's deployable invested assets and revolving credit facilities.
06—Continue