10-QPeriod: Q1 FY2022

ALLSTATE CORP Quarterly Report for Q1 Ended Mar 31, 2022

Filed May 4, 2022For Securities:ALLALL-PJALL-PBALL-PHALL-PI

Summary

The Allstate Corporation (ALL) reported a net income of $630 million for the first quarter of 2022, a significant improvement from a net loss of $1.41 billion in the same period of 2021. This turnaround was primarily driven by the absence of a substantial loss from discontinued operations in the prior year, though it was partially offset by lower underwriting income in the Allstate Protection segment and decreased investment gains. Total revenues saw a slight decrease of 0.9% to $12.34 billion, mainly due to a swing from net investment gains in the prior year to net losses in the current quarter, along with lower net investment income. However, property and casualty insurance premiums earned increased by 6.5%, indicating underlying growth in the core insurance business. The company also highlighted a reduction in catastrophe losses compared to the prior year, though non-catastrophe losses, particularly in auto insurance, increased. The balance sheet shows a decrease in total investments and shareholders' equity, impacted by market valuations and share repurchases.

Financial Highlights

37 data points
Beta

Revenue

$12.34B

Net Income

$660.00M

5.4% Net Margin

EPS (Diluted)

$2.25

Total Assets

$97.15B

Cash & Equivalents

$1.13B

Free Cash Flow

$302.00M

Financial Statements
Beta
Revenue$12.34B
Operating Income$660.00M
Interest Expense$83.00M
Net Income$660.00M
EPS (Basic)$2.28
EPS (Diluted)$2.25
Shares Outstanding (Basic)278.10M
Shares Outstanding (Diluted)281.80M

Key Highlights

  • 1Net income of $630 million in Q1 2022, compared to a net loss of $1.41 billion in Q1 2021, primarily due to the absence of discontinued operations losses.
  • 2Total revenues decreased slightly by 0.9% to $12.34 billion, driven by lower investment gains and net investment income, partially offset by a 6.5% increase in property and casualty insurance premiums.
  • 3Allstate Protection segment underwriting income decreased significantly to $282 million from $1.66 billion year-over-year, mainly due to higher auto non-catastrophe losses.
  • 4Catastrophe losses were $462 million in Q1 2022, down from $590 million in Q1 2021.
  • 5Investments totaled $61.77 billion as of March 31, 2022, a decrease from $64.70 billion at the end of 2021, reflecting market valuations and share repurchases.
  • 6Allstate shareholders' equity was $23.21 billion as of March 31, 2022, down from $25.18 billion at the end of 2021, impacted by unrealized capital losses and share repurchases.
  • 7The company repurchased $794 million of common stock during the first quarter of 2022 as part of its ongoing $5 billion repurchase program.

Frequently Asked Questions

The primary driver for the significant improvement in net income was the absence of a substantial loss from discontinued operations in the first quarter of 2022, which had negatively impacted the prior year's results. While this was the main driver, it was partially offset by lower underwriting income in the Allstate Protection segment and decreased investment gains compared to the prior year.

The Allstate Protection segment's underwriting income decreased significantly to $282 million in Q1 2022 from $1.66 billion in Q1 2021. This decline was mainly attributed to higher auto non-catastrophe losses, coupled with the absence of prior year reserve reestimates that favorably impacted the prior year. However, increased premiums in both the Allstate and National General brands provided some offset.

The company experienced a decrease in net investment income to $594 million in Q1 2022 from $708 million in Q1 2021. This was driven by lower performance-based investment results, particularly from limited partnerships, and reduced yields on the fixed income portfolio. Net gains on investments and derivatives swung from a gain of $426 million in Q1 2021 to a loss of $267 million in Q1 2022, primarily due to lower valuations on equity investments and losses on sales, though gains from derivatives provided some partial offset. The company's investment portfolio was valued at $61.77 billion as of March 31, 2022.

Allstate shareholders' equity stood at $23.21 billion as of March 31, 2022. The company paid $230 million in common stock dividends and repurchased $794 million of common stock during the first quarter of 2022 as part of its ongoing $5 billion share repurchase program, which is expected to be completed by March 31, 2023. The company also noted that it met all requirements for preferred stock dividends and had no current restrictions on their payment.