10-QPeriod: Q3 FY2017

ALLSTATE CORP Quarterly Report for Q3 Ended Sep 30, 2017

Filed November 1, 2017For Securities:ALLALL-PJALL-PBALL-PHALL-PI

Summary

The Allstate Corporation reported a strong financial performance for the nine months ended September 30, 2017, with consolidated net income applicable to common shareholders reaching $1.85 billion, a significant increase from $950 million in the same period of the previous year. This growth was driven by robust performance across both Property-Liability and Allstate Financial segments. The Property-Liability segment saw a notable improvement in its combined ratio to 95.2 from 98.2, indicating better underwriting profitability, supported by increased premiums earned and favorable prior year reserve reestimates, though partially offset by higher catastrophe losses. Allstate Financial also demonstrated substantial growth, with net income applicable to common shareholders more than doubling year-over-year. This was fueled by increased net investment income and positive realized capital gains, contrasting with losses in the prior year. The company's investment portfolio also grew, with total investments reaching $82.77 billion. Investors should note the acquisition of SquareTrade for $1.4 billion in January 2017, which broadens Allstate's product offerings and contributes to the growth in premiums earned. The company also continued its commitment to shareholder returns through share repurchases and dividends.

Financial Highlights

34 data points
Beta

Revenue

$9.89B

Net Income

$666.00M

6.7% Net Margin

EPS (Diluted)

$1.74

Total Assets

$113.63B

Cash & Equivalents

$690.00M

Free Cash Flow

$1.80B

Financial Statements
Beta
Revenue$9.89B
Interest Expense$83.00M
Net Income$666.00M
EPS (Basic)$1.76
EPS (Diluted)$1.74
Shares Outstanding (Basic)361.30M
Shares Outstanding (Diluted)367.10M

Key Highlights

  • 1Consolidated net income applicable to common shareholders was $1.85 billion for the first nine months of 2017, up from $950 million in the prior year.
  • 2Property-Liability combined ratio improved to 95.2 for the first nine months of 2017, down from 98.2 in the prior year, indicating enhanced underwriting profitability.
  • 3Allstate Financial segment's net income applicable to common shareholders significantly increased to $422 million for the first nine months of 2017, from $264 million in the prior year.
  • 4Total revenues increased to $28.68 billion for the first nine months of 2017, up from $27.26 billion in the prior year.
  • 5Property-Liability premiums earned grew by 3.0% to $24.10 billion for the first nine months of 2017.
  • 6Net investment income increased by 11.0% to $2.49 billion for the first nine months of 2017.
  • 7The company completed the acquisition of SquareTrade for $1.4 billion in January 2017.
  • 8Book value per diluted common share increased by 9.7% to $50.77 as of December 31, 2016, from $55.69 as of September 30, 2017.

Frequently Asked Questions

Allstate reported a significant increase in net income applicable to common shareholders for the nine months ended September 30, 2017, reaching $1.85 billion, compared to $950 million for the same period in 2016. This represents a substantial year-over-year improvement.

The Property-Liability segment showed strong improvement, with its combined ratio decreasing to 95.2 for the first nine months of 2017 from 98.2 in the prior year. This was driven by higher premiums earned and favorable prior year reserve reestimates, though higher catastrophe losses had a dampening effect.

Allstate acquired SquareTrade in January 2017 for $1.4 billion. This acquisition contributed to the growth in premiums earned, with SquareTrade's premiums earned totaling $207 million for the first nine months of 2017. However, it also resulted in significant amortization of purchased intangible assets, impacting the underwriting income of the Allstate Protection segment.

Net investment income increased by 11.0% to $2.49 billion for the first nine months of 2017 compared to the prior year. This growth was attributed to strong performance-based results, particularly from limited partnerships, an increase in invested assets, and higher market-based income.