10-QPeriod: Q1 FY2012

ALLSTATE CORP Quarterly Report for Q1 Ended Mar 31, 2012

Filed May 2, 2012For Securities:ALLALL-PJALL-PBALL-PHALL-PI

Summary

The Allstate Corporation's Q1 2012 results showed a significant increase in net income, driven by strong performance in the Property-Liability segment. Net income rose to $766 million ($1.53 per diluted share) from $524 million ($0.98 per diluted share) in the prior year's first quarter. This improvement was largely attributable to a lower combined ratio of 92.1% in the Property-Liability segment, down from 94.9% in Q1 2011, reflecting better underwriting results, particularly in homeowners and auto insurance. The Allstate Financial segment also demonstrated modest growth, with net income increasing to $112 million from $102 million, supported by stable investment income and a decrease in contract benefits. The company's investment portfolio saw an increase in total value to $97.01 billion, with a notable rise in unrealized net capital gains, indicating a strengthening of the investment portfolio's market value.

Financial Highlights

36 data points
Beta

Revenue

$8.36B

Net Income

$766.00M

9.2% Net Margin

EPS (Diluted)

$1.53

Total Assets

$125.93B

Cash & Equivalents

$577.00M

Free Cash Flow

$756.00M

Financial Statements
Beta
Revenue$8.36B
Interest Expense$95.00M
Net Income$766.00M
EPS (Basic)$1.54
EPS (Diluted)$1.53
Shares Outstanding (Basic)498.70M
Shares Outstanding (Diluted)501.50M

Key Highlights

  • 1Consolidated net income increased significantly to $766 million ($1.53 per diluted share) from $524 million ($0.98 per diluted share) in the prior year's first quarter.
  • 2The Property-Liability combined ratio improved to 92.1% from 94.9% year-over-year, driven by better underwriting performance, especially in homeowners and auto insurance.
  • 3Property-Liability premiums earned increased by 2.8% to $6.63 billion.
  • 4Allstate Financial segment net income grew to $112 million from $102 million in the prior year.
  • 5Total investments grew to $97.01 billion, with a substantial increase in unrealized net capital gains, reflecting improved market valuations.
  • 6Net realized capital gains increased to $168 million from $96 million, contributing positively to earnings.
  • 7Shareholders' equity increased to $19.18 billion, bolstered by net income and investment gains.

Frequently Asked Questions

The primary driver of the increase in net income was the improved performance in the Property-Liability segment. This improvement was largely due to a lower combined ratio, indicating better underwriting results and a reduction in catastrophe losses compared to the prior year's first quarter.

The total investment portfolio grew to $97.01 billion. Net investment income increased by 3.0% to $1.01 billion. Importantly, the portfolio experienced an increase in unrealized net capital gains, totaling $3.56 billion, suggesting a positive trend in the market value of the company's investments.

The Allstate Financial segment showed stable performance, with net income increasing to $112 million. While total revenues saw a slight decrease primarily due to lower realized capital gains compared to the prior year, the segment benefited from disciplined cost management and stable investment income. The company continues to focus on its product mix and managing expenses within this segment.

The company is involved in various legal proceedings and regulatory inquiries. While management believes the ultimate outcome of these matters is not likely to have a material adverse effect on the financial position, it is noted that the aggregate range of reasonably possible loss in excess of amounts accrued for disclosed matters is estimated between $0 and $855 million pre-tax. Investors should monitor these ongoing legal matters.