10-QPeriod: Q3 FY2020

ALLSTATE CORP Quarterly Report for Q3 Ended Sep 30, 2020

Filed November 4, 2020For Securities:ALLALL-PJALL-PBALL-PHALL-PI

Summary

Allstate Corporation's third quarter 2020 results showed a significant increase in net income applicable to common shareholders, up 26.7% year-over-year to $1.13 billion. This improvement was driven by favorable pension and other postretirement remeasurement gains compared to losses in the prior year, higher net realized capital gains, and growth in property and casualty insurance premiums earned. Despite a slight decrease in net investment income, the company demonstrated strong underwriting performance in its Allstate Protection segment. The company also announced a definitive agreement to acquire National General Holdings Corp. for approximately $4 billion, which is expected to enhance its market share and distribution footprint in the independent agent channel. Allstate continued to manage the impacts of COVID-19 by providing customer support through initiatives like the "Shelter-in-Place Payback" and offering flexible payment options. The company remains focused on its "Transformative Growth Plan" to expand customer access and improve value proposition.

Financial Highlights

36 data points
Beta

Revenue

$10.68B

Net Income

$1.15B

10.8% Net Margin

EPS (Diluted)

$3.58

Total Assets

$122.75B

Cash & Equivalents

$304.00M

Free Cash Flow

$1.23B

Financial Statements
Beta
Revenue$10.68B
Operating Income$3.16B
Interest Expense$78.00M
Net Income$1.15B
EPS (Basic)$3.62
EPS (Diluted)$3.58
Shares Outstanding (Basic)311.20M
Shares Outstanding (Diluted)314.10M

Key Highlights

  • 1Net income applicable to common shareholders increased 26.7% to $1.13 billion in Q3 2020 compared to Q3 2019.
  • 2Total revenues increased 3.9% to $11.50 billion in Q3 2020 compared to Q3 2019.
  • 3Property and casualty insurance premiums earned increased by 2.7% in Q3 2020 compared to Q3 2019.
  • 4Allstate Protection underwriting income increased to $888 million in Q3 2020 from $836 million in Q3 2019.
  • 5Announced acquisition of National General Holdings Corp. for approximately $4 billion, expected to close in early 2021.
  • 6Provided $948 million in "Shelter-in-Place Payback" to customers through June 30, 2020.
  • 7Shareholders' equity increased to $27.26 billion as of September 30, 2020.

Frequently Asked Questions

Allstate's net income applicable to common shareholders increased significantly by 26.7% to $1.13 billion in the third quarter of 2020, compared to $889 million in the third quarter of 2019. This improvement was driven by favorable pension remeasurement gains, higher net realized capital gains, and increased property and casualty premiums earned.

The Allstate Protection segment's underwriting income rose to $888 million in Q3 2020, up from $836 million in Q3 2019. This was mainly due to a decline in auto non-catastrophe losses, favorable catastrophe reserve reestimates from subrogation settlements in homeowners insurance, and increased premiums earned, partially offset by higher catastrophe losses and restructuring charges.

The COVID-19 pandemic has had various impacts, including changes in driving behavior affecting auto frequency and severity, and has led to increased economic uncertainty. Allstate provided a 'Shelter-in-Place Payback' of over $948 million, offered flexible payment options, and extended coverage for customers using vehicles for delivery services. The company is proactively managing these impacts and adapting its operations.

Allstate announced an agreement to acquire National General Holdings Corp. for approximately $4 billion. This acquisition is expected to increase Allstate's market share in personal property-liability by over one percentage point and significantly expand its distribution footprint in the independent agency channel, positioning it as a top five personal lines carrier in that channel.