For Allstate, Q2 Results Reflected Relative Stability

August 7, 2020

The Allstate Corp. saw its net income climb during the second quarter, driven in part by rate increases and COVID-19-related shelter-in-place programs that led to a huge premium giveback to customers. At the same time, net investment income dropped by half.

Consolidated net income in the 2020 second quarter surpassed $1.2 billion, or $3.86 per common share, compared to $821 million, or $2.44 per common share in the 2019 second quarter. Allstate said that more underwriting income and higher net realized capital gains produced that result. Adjusted net income was $780 million, about 6 percent higher than the previous year’s quarter, with growth stemming from improved underlying loss experience for auto insurance, though it was partially offset by lower net investment income, higher catastrophe losses and COVID-19-related shelter-in-place payback expenses of $738 million.

“Allstate’s strong results reflect a resilient strategy and rapid adaptation to the coronavirus pandemic,” Tom Wilson, Chair, President and CEO of The Allstate Corporation, said in prepared remarks.

Q2 Result highlights:

Allstate is in the process of phasing out its money-losing Esurance unit, and will combine Allstate, Esurance, Encompass and Answer Financial groups into a single business as part of its “Transformative Growth Plan.” There has also been a change in variable compensation used for agent renewals; Executives moved it to new business in a bid to incentivize growth. More advertising will also be in the mix.

Source: Allstate