How much of the earnings improvement came from lower catastrophe losses versus underlying operations?

A large share came from lower catastrophe losses, which fell $962M year over year to $1.24B, improving the combined ratio by roughly 7.3 points (from 15.7 to 8.4 points of effect). Prior-year reserve releases, mainly $838M in auto, also contributed favorably. The underlying combined ratio, which excludes catastrophes and prior-year reserve reestimates, improved a more modest 2.8 points to 80.3, indicating that underlying profitability improved but was not the sole driver of the results.

Is the growth in policies and premiums sustainable?

Policy counts are growing, with total policies in force up 2.5% and auto new business up 9.4%, supported by expanded distribution, marketing, and new products. However, Property-Liability written premiums grew only 2.3% and auto written premiums were flat, as lower average premiums on new policies and affordability actions offset policy growth. Investors should monitor whether premium growth can keep pace with policy growth without pressuring margins.

Why was the investment portfolio return negative despite higher investment income?

Net investment income increased 9.8% to $938M, but the portfolio posted a -0.2% total return for the quarter. Net realized and valuation losses of $405M, mainly from public equity valuation declines in March, were the primary cause, and the change in unrealized net capital gains swung to a $664M decrease as higher interest rates and wider credit spreads reduced fixed income valuations. Management stated that the equity valuation declines had since recovered.

Should investors rely on adjusted net income and the related return metrics?

Adjusted net income is a non-GAAP measure that excludes investment gains and losses, pension remeasurements, amortization of purchased intangibles, dispositions, and certain non-recurring items. It is useful for understanding ongoing operations, but it also excludes investment losses that were significant this quarter ($405M). Investors should review GAAP net income ($2.4B, $9.25 per share) alongside the adjusted figure, since the filing itself notes that adjusted measures are used in incentive compensation.

ALLSTATE CORP 8-K: Earnings & Results

01—Abstract

Summary

Summary of the 8-K filed April 29, 2026. Cited figures are marked; the original filing is the authoritative source.

Allstate reported strong first-quarter 2026 results, with consolidated revenues of $16.9 billion^a (up 3.0% year over year) and GAAP net income applicable to common shareholders of $2.4 billion ($9.25 per diluted share), versus $566 million a year earlier.

Adjusted net income, a non-GAAP measure, was $2.8 billion^b, or $10.65 per diluted share, compared with $949 million ($3.53) in the prior-year quarter. The step-up was driven largely by the Property-Liability segment, where the recorded combined ratio improved 15.4 points to 82.0 on sharply lower catastrophe losses ($1.24 billion versus $2.20 billion) and $838 million of favorable prior-year reserve releases in auto. The underlying combined ratio improved 2.8 points to 80.3, though part of the gain came from reserve releases, so investors should weigh the underlying ratio with care.

Growth indicators were also positive. Policies in force rose 2.5%^c to 212 million, with auto new business up 9.4% and Allstate-brand homeowners average written premium up 6.8%. Written premium growth of 2.3% in Property-Liability trailed earned premium growth of 5.5%, which management attributed to lower average premiums on new policies and affordability actions.

Investment results were mixed: net investment income rose 9.8% to $938 million^d, but the first-quarter total return on the portfolio was negative 0.2% because of $405 million of net realized and valuation losses and a $664 million swing in unrealized gains to a net loss. Capital management remained active, with $881 million returned to shareholders through dividends and buybacks and book value per share rising 52% year over year to $113.52. The filing is furnished under Item 2.02 rather than filed, so the earnings release and investor supplement are not incorporated into the company's Exchange Act filings for liability purposes.

The company also noted that a conference call would be held on April 30, 2026. The filing identifies John Dugenske as Interim Chief Financial Officer, which is a leadership point investors may want to monitor.

02—Key points

Key Highlights

Revenue of $16.9B (+3.0% YoY); GAAP net income to common shareholders of $2.4B ($9.25/diluted share) vs. $566M prior year.
Adjusted net income of $2.8B ($10.65/diluted share) vs. $949M ($3.53) prior year; adjusted ROE of 44.4% trailing twelve months.
Property-Liability recorded combined ratio improved to 82.0 from 97.4, driven by catastrophe losses falling 43.7% to $1.24B and $838M of auto prior-year reserve releases.
Underlying combined ratio improved to 80.3 from 83.1; homeowners underlying combined ratio 60.5 and auto underlying combined ratio 89.5.
Policies in force grew 2.5% to 212.1M, with auto new business up 9.4%; Property-Liability written premiums grew only 2.3% vs. 5.5% earned premium growth.
Investment portfolio of $85.2B: net investment income up 9.8% to $938M, but first-quarter total return was -0.2% due to equity valuation declines and rising rates.
Shareholder returns of $881M via dividends and buybacks; book value per share $113.52 (+52.2% YoY); John Dugenske serves as Interim CFO.

03—Questions

Frequently Asked Questions

How much of the earnings improvement came from lower catastrophe losses versus underlying operations?
A large share came from lower catastrophe losses, which fell $962M year over year to $1.24B, improving the combined ratio by roughly 7.3 points (from 15.7 to 8.4 points of effect). Prior-year reserve releases, mainly $838M in auto, also contributed favorably. The underlying combined ratio, which excludes catastrophes and prior-year reserve reestimates, improved a more modest 2.8 points to 80.3, indicating that underlying profitability improved but was not the sole driver of the results.
Is the growth in policies and premiums sustainable?
Policy counts are growing, with total policies in force up 2.5% and auto new business up 9.4%, supported by expanded distribution, marketing, and new products. However, Property-Liability written premiums grew only 2.3% and auto written premiums were flat, as lower average premiums on new policies and affordability actions offset policy growth. Investors should monitor whether premium growth can keep pace with policy growth without pressuring margins.
Why was the investment portfolio return negative despite higher investment income?
Net investment income increased 9.8% to $938M, but the portfolio posted a -0.2% total return for the quarter. Net realized and valuation losses of $405M, mainly from public equity valuation declines in March, were the primary cause, and the change in unrealized net capital gains swung to a $664M decrease as higher interest rates and wider credit spreads reduced fixed income valuations. Management stated that the equity valuation declines had since recovered.
Should investors rely on adjusted net income and the related return metrics?
Adjusted net income is a non-GAAP measure that excludes investment gains and losses, pension remeasurements, amortization of purchased intangibles, dispositions, and certain non-recurring items. It is useful for understanding ongoing operations, but it also excludes investment losses that were significant this quarter ($405M). Investors should review GAAP net income ($2.4B, $9.25 per share) alongside the adjusted figure, since the filing itself notes that adjusted measures are used in incentive compensation.

04—Continue

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