The Allstate Corporation ALL reported third-quarter 2024 adjusted net income of $3.91 per share, which outpaced the Zacks Consensus Estimate by a whopping 77.7%. The bottom line increased nearly five-fold year over year.
Operating revenues advanced 12.3% year over year to $16.4 billion on the back of higher earned premiums from Property-Liability unit. The top line beat the consensus mark by 0.9%.
The quarterly results benefited from strong growth in earned premiums, improved underwriting income and robust market-based investment income due to higher yields. However, the upside was partly offset by elevated catastrophe losses, increased insurance claims and claims expenses and softer real estate investment performance.
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The Allstate Corporation Price, Consensus and EPS Surprise
The Allstate Corporation Price, Consensus and EPS Surprise
The Allstate Corporation price-consensus-eps-surprise-chart | The Allstate Corporation Quote
Key Takeaways From ALL’s Results
Consolidated premiums written of $15.9 billion improved 10% year over year.
Net investment income was $783 million, which rose 13.6% year over year, resulting from increased market-based income, partly offset by reduced performance-based income. The metric surpassed the Zacks Consensus Estimate of $733.4 million and our model estimate of $690 million. Market-based investment income climbed 24.9% year over year on the back of increased yields and asset balances in the market-based portfolio. However, performance-based investment income was affected by softer real estate investment results.
Total costs and expenses escalated 4.8% year over year to $15.2 billion, higher than our estimate of $15 billion. The year-over-year rise was due to increased property and casualty insurance claims and claims expenses, and operating costs and expenses.
Allstate’s pretax income was $1.4 billion in the third quarter against the year-ago quarter’s pretax loss of $21 million.
As of Sept. 30, 2024, total policies in force were 205.5 million, which grew 8.1% year over year. Catastrophe losses escalated 44.2% year over year to $1.7 billion.
ALL’ s Segmental Performances
The Property-Liability segment’s premiums earned advanced 11.6% year over year to $13.7 billion, attributable to improved premiums derived from the Allstate and General National brands. Yet, the metric fell short of the Zacks Consensus Estimate of $13.8 billion but beat our estimate of $13.6 billion.
Underwriting income in the unit amounted to $495 million against the prior-year quarter’s loss of $414 million. The metric benefited on the back of improved average earned premiums and favorable underlying loss experience. The underlying combined ratio improved 870 basis points year over year to 83.2%.
The Protection Services segment recorded revenues of $822 million, which advanced 17.9% year over year. The metric, which was aided by an expanding North America and international business, surpassed the consensus mark of $753.2 million, as well as our estimate of $781.4 million. Adjusted net income more than doubled year over year to $58 million on the back of Allstate Protection Plans.
The Allstate Health and Benefits segment’s premium and contract charges improved 5.2% year over year to $487 million, thanks to well-performing individual health and group health businesses. The metric beat the Zacks Consensus Estimate of $474.9 million and our estimate of $465.3 million. Adjusted net income of $37 million dropped 46.4% year over year but outpaced our estimate of $22.7 million.
Financial Update (as of Sept. 30, 2024)
Allstate exited the third quarter with a cash balance of $816 million, which grew 13% from the 2023-end level.
Total assets of $113.7 billion increased 10% from the figure at 2023-end.
Debt amounted to $8.1 billion, which inched up 1.8% from the figure as of Dec. 31, 2023.
Total shareholders’ equity of $20.9 billion advanced 17.5% from the 2023-end level.
Book value per common share was $70.35 as of Sept. 30, 2024, which climbed 47.2% year over year.
The adjusted net income return on equity in the trailing 12-month period was 26.1%. The metric was recorded at a negative figure of 9.7% in the prior-year period.
ALL’s Zacks Rank
Allstate currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Insurers
Of the insurance industry players that have reported third-quarter 2024 results so far, the bottom-line results of RLI Corp. RLI, W. R. Berkley Corporation WRB and Kinsale Capital Group, Inc. KNSL beat the respective Zacks Consensus Estimate.
RLI reported third-quarter operating earnings of $1.31 per share, which beat the Zacks Consensus Estimate by 33.7%. The bottom line more than doubled year over year. Operating revenues were $426 million, up 1.4% year over year, driven by 22.3% higher net premiums earned and 14.8% higher net investment income. The top line beat the Zacks Consensus Estimate of $420 million.
Gross premiums written increased 13% year over year to $563.4 million. This uptick can be attributed to the solid performance of the Casualty (up 15.7%), Property (up 9.6%) and Surety segments (up 9%). Net investment income increased 15% year over year to $36.7 million. Our estimate was $39.1 million. Underwriting income increased to $40.7 million from $4.2 million in the year-ago quarter. The combined ratio improved 910 basis points (bps) year over year to 89.6.
W.R. Berkley’s third-quarter operating income of 93 cents per share beat the Zacks Consensus Estimate by 1.1%. The bottom line improved 3.3% year over year. W.R. Berkley’s net premiums written were a record $3.1 billion, up 7.3% year over year. Operating revenues were $3.4 billion, up 10.9% year over year. The top line, however, missed the consensus estimate by 0.8%. Net investment income surged 19.5% to a record $323.8 million.
The loss ratio deteriorated 50 bps to 62.4, while the expense ratio deteriorated 20 bps year over year to 28.5. Catastrophe losses of $978 million were wider than $61.5 million incurred in the year-ago quarter. The consolidated combined ratio (a measure of underwriting profitability) deteriorated 70 bps year over year to 90.9. The Zacks Consensus Estimate was 92. Net premiums written at the Insurance segment increased 7.6% year over year to $2.7 billion.
Kinsale Capital delivered third-quarter net operating earnings of $4.20 per share, which outpaced the Zacks Consensus Estimate by 13.5%. The bottom line increased 26.9% year over year. Operating revenues jumped 33.1% year over year to $418 million. Revenues beat the consensus estimate by 4.2%. Gross written premiums of $448.6 million rose 18.8% year over year. Net written premiums climbed 18.9% year over year to $349.9 million.
Net investment income increased 46.4% year over year to $39.6 million and beat our estimate of $38.6 million. Kinsale Capital’s underwriting income was $86.9 million, which grew 20% year over year. The combined ratio deteriorated 90 bps to 75.7. The expense ratio deteriorated 130 bps to 19.6. The loss ratio improved 220 bps to 56.1.
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