On February 7, 2024, Allstate Corp (ALL, Financial) released its 8-K filing, announcing a significant turnaround in its financial performance for the fourth quarter of 2023. The company, a leading U.S. property and casualty insurer known for its personal auto insurance and a range of other insurance products, reported consolidated revenues of $14.8 billion, an 8.7% increase from the previous year. This growth was primarily driven by higher average premiums and an increase in Property-Liability earned premium.
Allstate's net income applicable to common shareholders for the quarter was $1.5 billion, a notable recovery from the $303 million loss reported in the same period last year. Adjusted net income also showed a remarkable improvement, standing at $1.5 billion, or $5.82 per diluted common share, compared to an adjusted net loss of $351 million in the prior year quarter. These results reflect improved auto profitability and milder weather conditions, which contributed to lower catastrophe losses.
Performance Highlights
Property-Liability insurance premiums earned increased by 10.7% to $12.6 billion in Q4 2023, with underwriting income totaling $1.3 billion for the quarter. The combined ratio, a key metric indicating the profitability of an insurance company's underwriting activities, improved significantly to 89.5 from 109.1 in the prior year quarter. The underlying combined ratio, which excludes the impact of catastrophes and prior year reserve reestimates, also improved by 12.3 points to 86.9, signaling strong underwriting discipline and operational efficiency.
Allstate's investment portfolio also performed well, with a total return of 4.6% for the quarter. The company's proactive actions, including extending the fixed income duration, resulted in excellent investment returns, contributing to the overall financial strength of the company.
Capital Management and Outlook
According to Jess Merten, Chief Financial Officer, Allstate's financial condition and capital position remain robust, with statutory surplus in the insurance companies increasing to $14.6 billion. The company continues to progress on its comprehensive profit improvement plan and remains confident that strategic actions will generate attractive shareholder returns.
Allstate's performance in the fourth quarter of 2023 demonstrates the company's resilience and ability to adapt to changing market conditions. With a focus on improving profitability and generating long-term profitable growth, Allstate is well-positioned to continue delivering value to its shareholders.
For more detailed information about Allstate's Q4 2023 results, including a webcast of its quarterly conference call, visit www.allstateinvestors.com.
Explore the complete 8-K earnings release (here) from Allstate Corp for further details.
