Allstate (ALL) Shares Move -0.5% Today

The Allstate Corporation, founded in 1931 and headquartered in Northbrook, Illinois, provides property and casualty, and other insurance products in the United States and Canada. It operates through segments including Allstate Protection, Protection Services, Allstate Health and Benefits, and Run-off Property-Liability. The company sells its products through various channels, including agents, independent agents, call centers, retailers, and online and mobile applications.

Financial Highlights: - Total revenue increased by 11.1% to $57.09 billion in 2023 compared to 2022, primarily due to a 10.4% increase in property and casualty insurance premiums earned and net gains on equity valuations in 2023 compared to losses in 2022. - Net investment income increased by $75 million to $2.48 billion in 2023 compared to 2022, primarily due to higher market-based income reflecting increased fixed income portfolio yields and investment balances, partially offset by lower performance-based investment results. - Allstate Protection's underwriting loss decreased from $2.78 billion in 2022 to $2.09 billion in 2023, due to increased premiums earned and lower unfavorable non-catastrophe reserve reestimates, partially offset by higher incurred losses and higher catastrophe losses of $5.64 billion in 2023 compared to $3.11 billion in 2022.

Operating Priorities and Results: - Allstate focused on improving auto insurance profitability and achieved a Property-Liability combined ratio of 104.5 for the full year, reflecting increased premiums earned and partially offsetting continued high loss costs. - Consolidated policies in force reached 194 million, a 2.8% increase from the prior year. However, Property-Liability policies in force decreased by 2.0% compared to the prior year. - Allstate made substantial progress in advancing Transformative Growth in 2023, including continued cost reductions, deploying a new property-liability technology platform, and introducing a new auto insurance offering in seven states.

Challenges and Macroeconomic Impacts: - The company faced challenges related to increased catastrophe losses, higher incurred losses, and market volatility resulting from macroeconomic factors, including inflation and geopolitical conflicts such as the Russia-Ukraine and Israel/Hamas conflicts. - Allstate's effective tax rate increased to 38.8% in 2023 from 26.7% in 2022, primarily due to the total income tax benefit measured against a lower loss from operations before income tax expense.

Financial Position: - Investments totaled $66.68 billion as of December 31, 2023, increasing from $61.83 billion as of December 31, 2022. - Allstate shareholders' equity was $17.77 billion as of December 31, 2023, an increase from $17.49 billion as of December 31, 2022. - Book value per diluted common share increased by 2.2% to $59.39 as of December 31, 2023, from $58.12 as of December 31, 2022.

Overall, The Allstate Corporation experienced growth in total revenue and net investment income, but faced challenges related to underwriting losses and macroeconomic impacts, particularly in the context of increased catastrophe losses and market volatility. The company also made significant progress in advancing its Transformative Growth initiative, focusing on improving auto insurance profitability and expanding its customer base. The market has reacted to these announcements by moving the company's shares -0.5% to a price of $158.98. For more information, read the company's full 10-K submission here.

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