10-KPeriod: FY2011

ALLSTATE CORP Annual Report, Year Ended Dec 31, 2011

Filed February 22, 2012For Securities:ALLALL-PJALL-PBALL-PHALL-PI

Summary

In 2011, The Allstate Corporation (ALL) demonstrated resilience amidst a challenging operating environment, reporting consolidated net income of $788 million, or $1.51 per diluted share. While this represents a decrease from 2010's $928 million 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.

Financial Highlights

39 data points
Beta

Revenue

$32.65B

Net Income

$787.00M

2.4% Net Margin

EPS (Diluted)

$1.50

Total Assets

$125.19B

Cash & Equivalents

$776.00M

Free Cash Flow

$1.68B

Financial Statements
Beta
Revenue$32.65B
Interest Expense$367.00M
Net Income$787.00M
EPS (Basic)$1.51
EPS (Diluted)$1.50
Shares Outstanding (Basic)520.70M
Shares Outstanding (Diluted)523.10M

Key Highlights

  • 1Consolidated net income decreased to $788 million in 2011 from $928 million in 2010, with diluted EPS at $1.51 versus $1.71.
  • 2The 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%.
  • 3Allstate 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.
  • 4The acquisition of Esurance and Answer Financial for $1.01 billion was completed in October 2011, expanding the company's direct-to-consumer reach.
  • 5Total revenues increased to $32.65 billion in 2011 from $31.40 billion in 2010.
  • 6Net realized capital gains were $503 million in 2011, a substantial improvement from net realized capital losses of $827 million in 2010.
  • 7Shareholders' 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.

Frequently Asked Questions

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.

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.

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.

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.