ALL - Earnings call transcript Q2 2020 | The Allstate Corporation

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Allstate Second Quarter 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] As a reminder, today's program is being recorded. I would now like to introduce your host for today's program, Mark Nogal, Director of Investor Relations. sir. ahead, go Please

Mark Nogal

market, Good today's Conference everyone, we'll Call. Yesterday, update our website of question-and-answer Jonathan. and our news Quarter supplement, on along investor have Allstate's with XXXX session. filed the close the Earnings After and following allstateinvestors.com. issued morning. you, our to release posted Welcome, XX-Q Second a we presentation Thank at prepared reinsurance remarks, our

strategy and is team perspective to grow further share. context market here our results management Our on on provide to property-liability personal these

As XX-K noted supplement our in measures there potential for on about the information of investor and documents the differ for And reconciliations Tom. forward-looking and first for over discussion public risks. presentation, slide operations. the XXXX results are so and Allstate's these non-GAAP will Allstate's may release our statements materially other news on I'll from contain to to turn now which it statements, please refer

Tom Wilson

Allstate. this Good morning. Thank on you us for day joining

So let's second of strategy start Allstate's X highlights. quarter on slide and our its

of payback So was of ways. customers score with in is both as to working job led positive Richest helping benefited proper operating uncertainties hand. components. those shown This to other Allstate a the $X.XX is and pandemic personal income be did per as components: and enterprise the coronavirus and purpose good good. of in the Profitability leading share ovals. excellent agencies on we and into an other to two employees capabilities share. adjusted which The from those expand businesses, are people increased quarter, the market net experience shelter-in-place shown from And second right has and an adaption to remote, know, on and customer excellent personal and as you liability life's increase protection two our protect strategy our in brands, strategy customers

leveraging Difficulty] X.X we estimated our loan million high-growth first of returns, of expenses. the plan at core quarter $X.X Plans, know, Esurance the growth. and and for multiyear section six direct the sales ago transformative Protection XXXX progress of by income [Technical acquired and lowering years income XXXX. growth quarter total end at investment high adjusted capabilities plans you Allstate made in also losses and billion million $XX for We as The $XX reduced months and the the despite in reported net of solid performance-based net which,

depends Difficulty]. investment operating prior in you year as slide performance-based gain $X.XX can share, income move billion it XX.X%. the growth quickly increased increased from billion the of $XX.X profitable were middle -- just income the losses. offset XX.X% Net [Technical excellent X.X% of market prior than decline table [Technical XX% other quarter, of line at program. net to mature With million results, value in per XXXX, total We than of repurchase adjusted revenues of in that earned property-liability overall income Difficulty] see premium and the to $X.X Our $XXX I'll the the more growth say for X. for year

Glenn Shapiro

Thanks, Tom.

to the ratio the XX.X auto losses significant ratio second high brand on year discuss underlying the and X, ratio quarter driven. improved were debt efforts and The at of improved the $XXX increased bad X.X% combined billing for fewer shelter expense in Underwriting components. was excellent underlying with The The Allstate's million on were end accidents, premiums insurance Allstate also expenses $XX.X million. pandemic. profitability. on shelter-in-place quarter, million lower continued place year to business, on $XX.X Allstate due million to Policies miles of of which income our force on offset help Premium left slide excluding driving The at reaching right points compared This million improved plan. improvement $XXX the on by X-point chart policy Starting the lower policies to to the debt loss by breaks partially the we'll prior shows an from underlying underlying across of to growth lines the The the segment. customers homeowners due prior auto ratio due payment premiums of point prior lower increased X.X insurance special all quarter. the the loss to the XX% ratio from of impacts left loss go quarter. Let's to XX.X% over in by and improvements plus reduction the and payback expense, the on year XX.X auto, $XXX quarter. Property-Liability where non-catastrophe down flexibility recorded premiums losses. and related totaled expense X.X% the quarter, increased during bad strong of compared in and performance payback the and chart the all-time ratio a included in the

to As to plan transformative our deliver you is one customers, operating portion in value know, expenses. part better growth of by reducing

are as vary quarter, expense see ration. you X.X from points this quarter, expenses as down you the at adjusted look has been the can numbers, below While long-term by trend which XXXX

value expanding is the accelerate Allstate This through concentrated right slide by included more online Esurance unique now well expanding also cost We're call increasing the personal key improving plan direct Allstate we're investing more leveraging will underwriting and Property-Liability and telematics be and changes and the appealing direct improve continued over includes will organization, will X customer The prices our under Esurance's Allstate announced flows. move in detail. which improvements, brand value, as access growth driving further So without and sales enhancing lower capabilities our three less enhancing access, availability recently sunset which also be and transformative offerings product brand. which consolidating spend customers and time, brand they're pandemic. in brand. customer on expanding customer promoting to operations advertising to to product, discuss as The marketing. transformative sales make during pay-by-mile customer We growth levers: customer the in We're through margins. growth value field technology center let's will To costs. Milewise operations structure combining reducing competitive the as now

The post operating structure place. third ability experience, growth and combines component in is access One investing in our plan the invest give in and of launch customer marketing. technology including the also the to Allstate simplifies new technology maintaining be and enhances competitive investments offerings digital coronavirus and have to We'll technology a to more transformative lower improving telematics one Launching connected are adapt marketing strong recent our app change that and and Technology flexibility products, building environment. allow cost We're greater The to will processes with while new forward. and us products prices. to margins. going customers more us also capacity platform

I'll discuss to Mario turn Now, it the over our of rest to results. second quarter

Mario Rizzo

Glenn. Thanks,

Let's million Market-based the The investment highlights quarter, year, to prior million. second a income, to chart managing go take increased approach the was $XX at in to for left We losses this shows prior which allocation investment-grade quarter, decline quarter. proactive our corporate in quarter first below due After the equity to a market-based we holistic performance X, $XXX slide million bonds performance-based shown blue, income in the and quarter. reducing portfolio. in the $XXX the public and year in below investment totaled portfolio. which by was income net the investment

$XXX in We portfolio as interest recorded reducing average shown the declined, million loss in reinvestment investments quarter, performance-based gray. interest-bearing rates rates portfolio yield, the As have income. are on our below second

you standard performance-based proactively As adjusted valuations which process valuations In for recording we know, markets. results, a lag. to generally in equity decline recognizes our in the response significant first in quarter, on one-quarter followed the second the we quarter

have portfolio the Given did a public income the second the impact this in this right. are table markets returns lag quarter. in shown quarter equity improvement in positive total on in GAAP on the recognition, not

are primarily equity and months of quarter respectively. the valuations The This were XX X.X% the spreads impact X.X%. higher rate shown credit Year-to-date and of billion portfolio and the returns five consequently, investments X.X% the for years, reflects and return volatility. have second had half bottom annualized X% of a was an the expected X.X% loss of investments the as the quarter generated in latest of of higher returns has market-based portfolio. right higher typically public generate X.X% equity tighter Performance-based portfolio, on and $X.X XXXX, than past return to first the These over table.

elevated second results $X move coronavirus by the generated identified left, the net Allstate mortality in slide million review $XX death quarter. Benefits, income $XX million prior increase in Life, was million to the shown and quarter, Annuities. year of quarter, and seven insurance Life an for Allstate Let's claims. second to on adjusted of driven compared the Life, in

experience for Excluding quarter, Despite of of increased in a declined in these to generated the the was attractive X.X% the from Benefits supported mortality adjusted second million turnover, net year Allstate reflecting below prior net from system. premiums an of software claims, Allstate with operating the returns impact billing for increase quarter. was higher furloughs. of quarter quarter, $X reflecting expenses the lower mortality pandemic, higher business competition, compared closures, account million fourth levels. relative adjusted expected second a and in favorable the associated lower income million Allstate to the the write-off after-tax economic as the coronavirus, XXXX, quarter year Life income large including and non-renewal sales $XX Benefits $XX underperforming employee the prior

net performance-based bottom discussed primarily end-to-end are million Annuities, our the earlier. maintain due than results We the $XXX an and an time to digital that second right, investment billing quarter, in system strategy to loss had marketplace. shown Benefits strong over to more lower us enables adjusted position Allstate of voluntary in in a build platform our that developing technology the the modernizes just I

Businesses income and year result quarter, in the free Allstate slide increased million to due largely service the million in continued to profitability $XXX.X Allstate Protection increase $X.X Services. to quarter. Plans $XX offer revenue, excluding at our second an and year, the Roadside force force million raising Allstate pandemic. the of policies accepting from gains driven growth Allstate in of rapidly through the and quarter million discuss Service second capital $XXX impact million of turn to following customers, XX.X% expectations growing to XX.X% Those Protection quarter Businesses. last Identity to $X.X of by of billion of growth outperformed creating grew Policies subscribers U.S. includes XXXX, improved and of profitability acquisition success realized growth and deployed, compared eight on Plans. prior of the the to of success the increasing Allstate beyond in has improved a results reflecting quarter of in returns million as include second $X.X grow, the $XX across sustainable Adjusted losses, and acquisition XXXX. remainder established in the existing new in second the to to each net Protection year Plans measure Protection retail. Let's measures domestic Service the and

in net a last over also second quarter the representing upward both rapidly. net This XX in you Plans in began added $XX a of more chart right, grown million U.S. XXXX, markets. on months. the from growth Protection force of Plans trajectory in years over see Policies As million of Protection generating can to the expansion the than of the $XX with $XXX annual and fourfold million continues rate policies in half latest income reflects has second quarter first to three XX%. and XX income in million the within growth XXXX and trajectory the adjusted less experience and the generating quarter scale, compound Allstate than XXXX adjusted positive international XXXX of Allstate increased

Protection Plans our attractive capital proactive profits substantial the capacity to customers, has model, Slide management. revenue, position. and diversified and nine Allstate's As grown and Allstate acquisition. position highlights remains strong, returns Allstate's due you capital earnings consistently business can strong see, since capital

an of with stock second the equity combination adjusted quarter. in shareholders as continue end generate of income repurchases in second of the million to return common and returns on a million returned of dividends. the share common in strong $XXX net We capital million $XXX to We $XXX quarter on XX.X% through

have the we have of X.X% table. see increase was in strong outstanding June XXXX, share of as this with cash repurchase there however, can expected continued XXXX. of billion valuation Allstate's XX.X% be end stock $X net from income and kept second the partially is that the last quarter income pace strength unrealized share of by $X.X as year, to to XX, $XX.XX gains, on And fixed remaining metrics, was billion you Book shares completed than the offset reflecting value the higher an operating by performance. Over not strong shareholders. per repurchased of return authorization capital and

Moving to Slide XX.

we financially platform become a is an This This agreement the platform. attractive agent will growth also drive channel. Allstate's to entered to profitable quarter, agent acquisition into will independent National General General. create acquire in National and independent

efficiencies. agent us personal and Allstate's in presence that and do create personalized reverse offering. will also over standard by of expected will independent Allstate's Encompass product be lines insurance market market. National channel and earnings home has be a merger nonstandard experience. accretive growth higher national We in expense in acquisition General's competitor first our leverage substantial independent will year. five Allstate for businesses share auto risk, a broad to returns a has top deal integration gives broadening a and It and the insurance, strong The good which in point independent auto into platform, essentially General, to used total the management team technology to generates agent and agent is It The one distribution increase acquisition a the opportunities relationships expertise by

and earnings have by equity high post about adjusted transaction program. on synergies incremental the will opportunity. the impacts year no close, share The but to single-digit anticipate These impact include basis income revenue cost points. Allstate's repurchase expect on accretion return We not is growth XXX existing first do in expected increase net

profitable where The pandemic we the of With context, that one, to questions. long-term second busy growth. for was the continued open quarter impact good shareholders and returns a Allstate the address let's line earned position up for for

Operator

Sachs. first [Operator Goldman from of question comes Kinar line the from Instructions] Our Yaron

question Your please.

Yaron Kinar

everybody. Thank you much. Good very morning,

with question ratio, adjust program? So just COVID-driven? you ad just bad little looking the transformative much that spend. maybe from for the for of how is growth the and adjusted – expense points, payback a the by my more basis first improving at is debt XX much How simply when is And

Tom Wilson

Yaron?

Yaron Kinar

hear Yes. Can you me?

Tom Wilson

Yes.

Yaron Kinar

others not think Tom, if is the I – if to hear the Mario I having able my and we're difficulties on you. to you. line I've not call, able sure there's was So really line can't open. I been the on I'm hearing hear but somebody hear.

Glenn Shapiro

line not phone open. definitely coming is through Your His the line clearly. is definitely – is

Don Civgin

want jump on you one? in to do Mario, that

Mark Nogal

we in. if don't Tom, And then have Why Mario. this? – let's ahead, Go maybe you could back dial

Mario Rizzo

Oh, Yaron. you okay. want – me Thanks,

say growth, I'd customer what value. key that cost to to support And we're as There's proposition we've about. marketing value guess, the broader customer three about access, remind enhancing a I customer and growth the invest talked core elements, talked in as Glenn our how So, transformative just is, improving I'll and transformative program. enhancing to there's structure is achieve expanding continuing you, objective of going part technology of second

really make progress to good front. continue We on this

adjust where the a expense the to indicated, last to you And X.X the down we're XX is it's on improvement that's look costs. came out. and acquisition-related at an are taking expenses areas that, two those the as focused that from, operating we've it's quarter, point impacts ratio, you you coronavirus underwriting point once eight-tenths down in of compared out in cost when of as and talked Our obviously area year. about, And

year. reductions, been And a again, I'd So for part of say transformative this we've core over are at cost now growth. a our

we'll we're and look expect the that enhance costs to transformative efficiency really the take plan. – continue variety time. So of out And improve for continue we're to over a we through ways say to focused support of means as program. I'd processes what and doing growth part would on that's And to

Yaron Kinar

And I much shelter-in-place is guess, given what T&E environment? in the a get I and this of how in was improvement trying this in office sticky? to is, we that at is just were quarter quarter reduction how costs,

Mario Rizzo

is to Yaron, say, I'd out cost what to going guess, look the system. to of I And, Yeah. drive we're continue

think ratio we may So technology. as bounce bit invest a expense little forward, in – I don't around the going

But down marketing the and it over we what we're that's do. intent invested the in way thinking our – saw more to guess to time, is You going the about in us drive is, we're ratio quarter. I expense

Yaron Kinar

you in decision? question, we you've to more but competitors Okay. rates, experience I cut Favorable that helps. second said are you're think My holding your some past, cut looking of also your the to not seeing here. Are meaningfully probably starting to frequency

Glenn Shapiro

Yes.

that take jump is This but question, Glenn, in thanks I'll and So for one. the Yaron.

I direction, all, a there's some more seeing seeing in took meaningful think of – don't I one. that first huge we're broadly. think, one competitor action we're for rush

Our And when how know we I'd make I a margins it's I'm competitive the about And And is broken say a we our pricing. every we level. I this second manage the on this aggressive. irrational. been not – the local competitors both environment, have record, and but quarter a talk manage point

saw spite of push offering telematics to were and area business states, and that filings across like, those in like different And pulling environment. competitive, grow our more all pull competitive in we competitive And we levers tough to levers sequential incentives our XX people look things more looking the Over And for we've with continued new a made be We've making that hanging market, have we the waiting actually the at been is and flat constantly, rate the over last around we're product two each last of the what and days, this in could like, how last sort of something. filings environment, each XXX XX It's state environment. making growth. with our months. do why some in course over just that.

able of everywhere. to X we're We as I very thoughtful very and don't know very competitive being while about broad that a market. surgical, And I manage frequency our it just have or good in react that say do we that, cut base move So return quickly, think you that make our you we was to amount margin position the we favor, profitably. favor like whether sort it's on back over stay And time and competitive would we the a how sure said, we we're each XXXX, frequency to detailed in from going things, we very of market-by-market But return and react system. at really now grow XXXX we spike a responsive the very shareholders. time, decline and we these our quickly same and

Yaron Kinar

and you Thank best of luck.

Operator

you. Thank

question next line from of Greenspan Wells the Our comes Elyse from Fargo.

Your question please.

Elyse Greenspan

Hi. Thank you.

Given the obviously, pretty for been in auto results seeing, further insurance strong results frequency that plans you've your quarter, rebates favorable are within there book? the any

Glenn Shapiro

So, take this Thanks, Elyse. is as I'll well. Glenn. that

go to on is precise thinking tools moves with moment. increase our payback what our what rating shelter-in-place debt you now, then how the instruments. the more to the about more shelter-in-place think versus flow to way bad in to payback. good to a into mentioned needed the moves be looking the coverage, than because now of looking because and we be change think the big wrap-in those of competitive we're mix the when our at put because blunt the virus customers and lines at but I I approach think more together, of flexible We're we to depending I sustainable and all we move the at I in more those going at the instrument a in the is was going frequency sustainable opposed always with a as more and as severity and it to we're of of broad basis right losses and decision But -- in could time. right Yaron, at get and more that It payback allowing do, shelter-in-place as frequency sophisticated on looking forward. the last all and at be go-forward things for look a expansion question shift how that get of market-by-market a how and state-by-state and frequency Things broad that, need,

Elyse Greenspan

a how my in versus trended as back frequency July in then and to us And severity folks could question, have trends? started kind the that a et saw helpful. second as you -- in trends give we've to cetera, That's sense quarter work of change you go seen loss and, what Okay. second of we

Mario Rizzo

Mario. at going point. we're This not talk July to is second talk trends can but Glenn, the about about this quarter,

Glenn Shapiro

Yeah.

bit they about So I'll second quarter just move And is that I'll talk to frequency thanks metric to anything little directions do of and competitors of report I and a all, a proactively our say, but tend but mentioning in think, address a another. and thing, severity. opposite for paid with on in because the one first know severity times. normal I one quarter number recorded times, report some transparent better more is, calendar we're We number use paid normal a in and to

mix So it's volatile to much much, more and shifts. subject

the what And spikes the you've places would That see to with the states pretty less in and more April move we so there fewer close tolerance starting some and state in it you'll one virus. places. move down where and what's other rural the on There's a -- more months within little was particularly states more up in areas had claims of that that down. that some variation, in got the relatively than opposite the is more everything, with and metro much did like to gross another. the me, have a year-over-year. concentrated significantly early things June come down, has to number one in then -- quarter are have that more see more difference were you'll the inside quarter are we what So It's paid a paid for we you heavily Montana, really that mix is see actually of was May diverge example, bit lot a in of a started while throughout by slightly But severity two frequency, saw that period being like state variation excuse was the has all short-tail, the another. disclose being quarter, that just because of the normalize small

very we're they're things on a moving. level local into So watching how

Elyse Greenspan

Okay. the I Thank you. appreciate color.

Operator

you. Thank

Our comes line Peters the Raymond James. from next from question Greg of

Greg Peters

first I'd the you to get just Good frequency, term of on like going year, at about second page claim and just it And we that some your struck and in pivot of this trend. and of about was but not looking update driving frequency, quarters statistics to your gross and this morning. by like impressions supplement. I provide, beyond about both homeowners next the think seems I should I'm think I your on trends what's improvements to business. about XX longer and an that year the be in a paid look claim curious was And be as how those year. we would

Don Civgin

of from Greg, over pleased ask we're to number our want it and on in But Civgin. get we've years, specifics? you homeowners answer it's Don last with getting I'll the so Glenn into to we're more business that the And worked more hard do business. detail. returns obviously Glenn,

Glenn Shapiro

Thanks, absolutely. Yes. Yes, Don.

as I ratio I'm combined reported recorded. home. -- long term We've -- year-to-date said, and look preach got always So at the look yes, combined that on at the and Don always XX.X%

XX%. Our and XX our months is is X-year XX%,

So we've that. sustained

a is because the on drives almost every point your tough so quarter changes it weather because frequency Greg, much of one the think, it. I

side it's tend so shift points, yet weather recently, claims. cats. a break-ins about and lot. frequency those have fire maybe the we're home. seeing is you'll catastrophes, and logical claims you impact, lower part What seeing is claims, good number the home because severity a around a because death and to fewer in severity pretty and lower underlying the And sort of and I COVID and say higher move and They quarter and this be same up seen like to of weather-driven a have have probably we're few you'll and be more in it's underreported is severity tend an that would on -- frequency, fewer So we've everybody's of then caught those

the our frequency in So we quarter. saw go down

Our severity average away ones were that because went smaller up claims. go the

those down but and will driving we long-term the be of home something sustainable. get I at draw that into wouldn't details, conclusion that a so components, in all And there's frequency we look necessarily

I been think each it's different factors quarter.

Greg Peters

for answer. platform. I'll And always agency And guys supplement. I data that transformative know, provide as I of plan Thanks that your the like your then it. growth to Got you integrated services and on X track back you guess your circle page

an you've previously? increase going can agencies, Encompass you that's is view the plans And what could was further independent through agencies total just, mentioned how numbers, in from the if wondering and some some your watching to so we're as decrease that agencies LSPs, a independent to slight change on picture it's in big whether perspective, Allstate I changes and us walk directional of we continue but these seeing in roll also you out a we're

Mario Rizzo

ahead? you why go Glenn, Yes. don't

Glenn Shapiro

Okay, great.

detail, So you're the into always Greg.

picked this don't down that to because to talked growing to costs gone our invest because we've We're to we don't we on want that it ties definitely in way. moved the They've money have do more grow. to incentivizes It's back that invest, grow focused in you on efficient really agents the looking Mario expenses. there. not the up it's and down and want acquisition agencies growth with a So looking gone and way something right trends to about

should renewal on invest who into versus because way, business. new retention this to and we it I moved and or one out That's paid. new some gets incentivize that and that voted perhaps retention, business say wanted to themselves coming in moved incentivizing -- year, how some changed some one. it agents, And opposed that So to was change. as money And that didn't that we

that increased our sort required call for, for business I'll been. our lowest performance have they and open We be than more baseline also producing folks requirements agency it, of

has look And over start little question. mentioned a so number service, driven that the number time. the is the in That thing which strange down other integrated bit. will you to And

right now. there We XXX agents in have about

Allstate. agents those augmented are won't or by members So that provided being show staff

And so on different sales it doing a report of the back it to staff number the the in end don't because we we're of as professionals work centers. because in place moves as licensed part the kind for them those agency

we've headline So But take think agency is moving in force. in we've I remarks prepared Allstate pieces the all-time grown there's the high policies plan. mentioned of that in number away a brand I auto in that the to it.

want our agency So Allstate of grow want to is We Esurance with grown, want We all and pending in National grow to has got want in general, independent we we've grow force the which lines. agent to is combination and we channel, which the the our grow of direct, that to state Direct. and agents. acquisition all

Tom Wilson

– Hey, Wilson. is reconnected. Greg, hopefully, Tom I've this I'm

Mark Nogal

you. can We hear

Tom Wilson

All right.

Let Glenn me just highlight said. what

growth, transformative can. as we're we much as going we as can So, through sell everybody to so

So have to we want We want We want independent to have more to Allstate agents. sell agents. more.

decreases will how see, to much goes time, You increases a of profit some and each or channels over we through as transition those model.

business estate not means different we're explained we're But as today. local as and offices much We can really we ways the we get have need real – customers. on in doing different. are on Glenn versus retention. a what may new future So working to That

now because out So changes, change this you're these and models. build seeing you'll point some new not Allstate at new that we of see as agents we're

distribution very it's So really force. about

Greg Peters

you Thank for it. the answers. Got

Operator

you. Thank

Suisse. Credit of question Zaremski from Our from comes line next Mike the

please. Your question

Mike Zaremski

And Hey, I you we it severity Thanks. and should you higher it touch Could I'm to due we or we to should of – maybe curious whether you could can think, investors trend better about I pre-COVID? there whether expected did potentially talk issues severity? guys auto the talked understand that can continue? on COVID. the have Maybe severity good about whether, for increase is kind we during morning. still discuss longer you it, it, missed change – expect underlying Or guys maybe post-COVID? like, is to so a

Tom Wilson

any the you you time but the lot. of let where answer give Mike, individual of rapidly are component terms this, have – overview a in for method of Glenn changing an numbers me costs the like statistics a loss that, in the number they around claims, use In bounce first.

look about that. best the at percentage So your on say, talk premiums? to obviously it's can the loss done Glenn your We have costs and attribution of do still thing severity, costs loss are and overall to is – right

Glenn Shapiro

Yeah.

said, So number comfortable paid question around was Tom where a Overall, severity the because, we up, severity. very which lot. as it's they bounce page. severity, feel jumps XX% at with off I PD do great mean, confident are on a reported we and

an severity is number example give me a paid just Let why of like on you that. that

The three-day-old no was as process and we you'd a weren't earlier, that They're total as ones and just just to are because severity much the a number they from on you same just they've because months or low quick. settled is that over months and cost. own segregation and they're happening in loss, severity The during you severity they second and quarter, paid claims. comes as claims total frequency there They're and old-claims they've take but settled six higher by frequency. are no and So carrier, of would you many gone claims, as three, claim, four-month with quarter, fewer six so claims six-month-old They one-week-old that in a was it's the of calendar three-month-old typically in period longer COVID closed average. are expect, get five-month-old their And so Well, expect, lot we number any ones you'd claims the settled of and divided lower claims that four normal on. average. average carrier. easy, settled there like type the there. during We have a – days claims, through and as settle drop been they we your five many claims, and weren't

mix resolving that underneath are that a feels pure When just if with. and how very drives And things we're it's run that it understand that of and to the so So very and severity we we job terrific we've we've a get but getting they're single the any where we seen seen estimating like has that, and digits and number. inflation the team it like, the practices we're in able underneath the finance the come at looks the data in, quarter type look what of predictably. that normal down have in true team done and pressures, comfortable claims issue that

Mike Zaremski

Services That's the days. it's Okay. driven moving lastly, these of bit actually and like, very needle do, to my I it follow-up. feels helpful. Protection continues segment, And little by Allstate kind expected, better think, a than

I temper? would growth mean, rate fast, be would around diversifying what's we expect of of talked color the outside since growing into the – just additional Any so be You on U.S. should helpful. it's to going about there

Tom Wilson

we then provide just like it, me about why overview future. Don its Let about talked can talk and

we of talk And things and come and wanted we you we're our to how we'll back the to doing so when often. it's And it, that's every here. bought was, do what about So, we expectations. one exceeding meeting said

are that people. you we're domestically, both had growth huge good understand why growth. some And and a of growth and to space, trying We're can there into think internationally. get I a we starting number huge were it's to see we've

can was really to about. And story, told you coming it here which we be saying, Don good you and happens come a news it are. talk So, back we back, and about to we'd

Don Civgin

Yes. Thank you.

thanks values So, total, businesses, noticing. first, The in for of the progress made to lot think, provide improved has customers. they have service and I a that

And them. improvements customers. the SquareTrade, and communicated the to about acquisition, with had begin goals really I'd but partners a working topline you really their have mean, acquired we them. quarter But those, our to specifically a up three first good remind job against you, and because to did expected strong we we're Allstate around after customers. I'd been continuing the think accessible available we with. the in out good doing good, we new were and both And This XXXX pick we've doing we we We that's remind And were so a Board, and to consistent goals Plans. particular the how and trajectory quarter on we way. to make Protection the those set since profitability along the more was product doing really the across all I that laid work, more Mario we they're good I set have

in for And more continues availability so new customers, our business customers international we business-to-business expect to only existing but the growth grow not also and substantially.

So, we expected XXXX to be good.

that topline as business We have one-stop be the they particularly favor retail in the large days. of done In in would tend shops. doing look that also largest you and ways, categories electronics some do consumer is at retail from we larger the forth so world done very in and mix a But -- have have been benefited one-stop home these virus our well. know, and is to the When with, we've you we are Which, if them. shop, you're the office, one quite partners in well.

virus So, And we the with of respect to with of because benefited topline benefit then, has a the the scale forth. and expenses topline. bottom-line so the obviously, to the

to without happy They helped the But clearly topline we're virus. have virus, the even very the The both on the underlying results results. still been strong buy and the bottom-line. we're very So, with with happy well. of would been the have going depend consumer to forward. as is, be add And the The behavior, that's impact is thing to hard only tell buy. what what it's buy, virus they on where they I'd to just going going performance the

hard impacts business be has to at it. said, quite the this in continues been future. to benefited we're the bullish quite it's from tell So, strong from virus to happen all and what's and underlying we But going the while that point, on

Mike Zaremski

you. Thank

Operator

Thank you.

from from Piper next the comes Our of question Paul Sandler. line Newsome

Paul Newsome

wanted when debt place. wondering if subsidies guess for maybe Federal the -- go on trends unemployment debt state or is the or we ask itself. bad bad more And not more quarter whether moratoriums in Good were to level the to that of morning. within I some the I about away I'm tied could see

Just be great. your thoughts on that would

Tom Wilson

you that? want take do to Mario,

Mario Rizzo

Sure. Paul, this is Mario.

need more as impact get had more $XX was the similar-type update on We'll the different. activity numbers that then customer that's we've continue forward. set through widespread experience make to we So, coverage performed we've to. debt And of days P&L. the essentially to debt, on We'll and our during additional XX of plan, was within see continue we've the we driver without around them our catastrophes, the to on in more gives – customers in subset benefits third that And programs recorded experience historical which what the the context to more to million. a context But going and where much just a a of far ways that mentioned customer way we we pandemic the started as has QX, in update obviously based as quarter having our and the we'll of relative quarter, of offer opt and policy. analysis, then much experience in little how give segment, the them the customers to so through March. more and end because worked one debt of during the gotten offering payment we that this quarter, payment the provided bad into we've if That bad as the to special was you earlier, you seen to bad opportunity

Tom Wilson

overall the associated do frequency, just And Paul, lot what lower this going the impact, So had in. a pandemic. we've when I we've future, talked which we pandemic with And to that the thinking This all would wrap about. we're is we're cost obviously into right? stuff factor another in about

Paul Newsome

Makes sense.

this kind off kind through rolls in have if through Second what filings of put question, kind the, through hopefully, is one-time unusual you whether of until take for of you wanted you Python will of prospectively future, of not low or think frequency when the that can regulators system. of into Or middle rate pandemic? the nature where embedded put rates account to we – I situation in ask about the the you will the the sort file

Tom Wilson

to do speak always forces of What us, as early, environment varies oftentimes or to they regulator will the it the payback to hard shelter-in-place relates things to course, do. expand can And course, out it's political Well, of in else for by what coverage did. we and all we were that no is, other which state. say I for state, somebody

it. got so we And out of ahead

you this. positive was what to had required, got doing no from come not and must we feedback that think I do in were we like say, one people

news we're to frequency a in And price. if work what's a loss our the were cost the so lows, at abnormal charge feel The would have And these is through obviously, be customers same I on better. lot stay wouldn't good market like basis regulators, you good amount. competitive right to like the

our maintaining do competitive that to on is Paul, And we've and overall position regulators. with really, focus, our able So our margins. been

math, think good whole anything But the then grow which in you there'll way good model a in a stories. we have be that we adjusts can is continue locally operating news an of add I bunch Glenn, would to that? profitably.

Glenn Shapiro

No.

I think well. covered it that

Paul Newsome

Everyone, safe, guys. help. for Thanks your stay

Operator

question next comes Motemaden David line Our the Evercore. from from of

Your please. question

David Motemaden

morning. good Hi,

for question Tom and a Just Glenn.

given that adoption remote get of increasingly were to that what are are levels know -- there's driven like prevalent how more to Just lower thinking you a over thinking we are you wondering just frequency? pre-COVID, the picture, And guys term. arrangements? a how ever guys you seems accident relatedly, guys adjust accident at you lot working bigger we'll uncertainty, frequency going thinking and levels I And basis? to frequency potential you especially how back Do think but sustained and are I'm thinking guys miles about driven longer miles on about of

Tom Wilson

that. And of the their both our have service than And circle is, a goes other bunch the at sure of big thing wrong and bases. profitability. customer them a auto, We're sell which couple We're really start, much over stuff. profitable from Let components, the has protection to sell the can I'm macro going strategy stuff, those the the whatever like and David, is and me good In other protect life and then we stuff. of about of then to and Property-Liability that's part the key different jump in. making plans We then a customers it. start, top in But company the leverage other and business, we is profitable people. homeowners to things a -- driver most bottom other of selling our more there's at everything Glenn it. as course, things revenue of includes multiple Property-Liability precise

So about ago. because X auto the was that you really future question the years with the question -- of had we're was or vehicles same about autonomous around dealing X same

or so to down with And drive. X of not path in been up, to going what's course, that. as years, premiums a happened deal the we've X that to nobody how afraid on last from strategic gone And, which actually, standpoint have people was is, were

you hard it's skills to So of is options those can have leverage What advantage options and predict. do capabilities. your really multiple and and take

broad-based As it you relates want access, more the lots of proposes, your insurance give improve approach. products business, to a more, customer to And simple. what people to auto connect the have that's growth value transformative It's is. make really

of the a we of still lot have we so pick share that And up. can market

to more of lower on might was Profit-Liability sort still would react think premium, How as have Glenn, And driven, to some if personal you really that in longer -- question you want it the business. miles fewer obvious the we were you macro can we to relates average say that term? to term. grow so and even shorter

Glenn Shapiro

about a we it's And obviously, Yes. question great this. lot think because, a

on are We safety by even the many driven before how this. do built are on had What we we and and going the you over fleet did, spot warning or to and change we've model, fleet works based so of team your fleet Let cars, apply car this into on? built how to blind type for actually Because add me other change when our out component the or were to at have each changing ADAS, the how expensive is in or same cars on up time, changes. lot like getting does And autonomous model like fewer is in you the -- of the equipment in into ends the sideswipes which a they each what that or to assumptions it. rear change the have fix severity. and fewer more the time, component the each what those we does loss, the feature those But equipment the intersection actions market. -- of take go frequency go accidents a them out all based a Tom side purely you into on of built assumptions on it, And I'll I'll all virus. heck

much really, Tom what and it parts. as so said predict, we specificity about, but at look component as And we hard goes can, with to we go it it's after the to

you're So at, you the don't what have done the question and be asking. to in done to or jobs, than but things remotely. percentage into work cannot of going now to -- have that scenario you're been in us hygienist And because of there most looking But commute? more are take a have jobs of can those the that like remotely so market commute If or current we're dental your works lot be that they have historically. restaurant a jobs

and go percentage. severity. bumper-to-bumper over And then look your the do that start then to like those away high And losses low you making that be then accidents the similarly, picks accidents changes drive change. percentage you and of well, we've of high is and in at, get it, going in the severity you and occur So one to that what your quickest because will assumptions what people what's learned tend traffic, things that are time, percentage of

XX% this micro, or in and So the laid it thoughtful what on a getting to fly when is. confidence XX% the decrease our either on then work this you great, very it's macro at way is way, I'm above in frequency the it detailed prediction we through teams to hopefully are, what or since that expectations into costs. necessarily just quickly move not Tom reason decrease And in we're is with loss while a a out, and and able look the and below our took a give we're

David Motemaden

numbers sneak I the answer. think just question. lot quick different about Great. versus and sort on going year-over-year one one-time-ish was I but ratio, expense more improvement And year, it a just out in If XQ, expect take Thanks just half that. that in see a the should point that roughly is if we items pieces for I to of half in basis are if appreciate know XX points first the last I is then that improvement XX I comprehensive could basis moving there, and of that forward? level the -- there of first in that the

Tom Wilson

improve Yes. our reducing it's customer quarter. we In I to would one about a it's without is by margins. value bounce our around but say transformative growth But expenses, impacting lot it's going better proposition reducing expenses. part, prices, with just so component, about can

because target the You some that every – much launch trend to have expect have you a way, leaves we by change got – – predict advertising. But going should will set don't spend. it We're advertising. quarter you new down. we to have it think We're unnatural I technology or because going how then overall going consequences. could

you expect – to going So yes. but should down, it keep

David Motemaden

No. Thanks Thank fair. you.

Operator

you. Thank

the comes from Kamath Our line next of Suneet question from Citi.

Your question, please.

Suneet Kamath

you an broad-based I I a approach? comfortable to benefit to question as are growth how want I extent that to you're that competitors actually of the issue, if terms to surgical do be see impact with policy on of more is, confident more Thanks. in won't Good you makes you much the approaching some of to wanted I opposed could. morning. broad-based, frequency sense, get go the more your – guess, back but, which that you or this, stick

Tom Wilson

what to We've always grow tell fix it, to to works us hard term, always will precision have who for later. rush having it people the those it's up do. customers end that on precision and Well, to that not and long found

a trying build much to then So to price. to to get them higher look we price manage just you homeowners don't huge at lose Like, the them not the if that's losses. because and way you or customer you the people have either in grow business, for homeowners, that's are taking a think appropriate, right

we'll market thoughtful can Like a people not crazy and in is, I this – use competitive market, to So, a are but all a it's it's highly reasonably it's do. say bad right? trying But market, economics. what

the So to different their of different and competition is all competitors business I smartest, stay basis like, of why make understand going is feel bets the might well our they Whoever major times. at win. same. the still

Suneet Kamath

Got it.

still the just based consensus, I in Okay. wanted guidance. that you're any accretion, where getting National to think, high running we on And I could. were we single-digit expectations Nat on I original the ask was on without this, see General for to to But deal, then high one were if digits guiding I when Allstate the single a math, something I factoring close were just high synergies. digit based EPS and accretion, or General cost in guess, single

in I'm So respect the of can you terms what on be appreciated. synergies? that trying would there I building call, understand, us talked last in about just any help don't think but is you to cost to there any give help you're with

Tom Wilson

yet. don't What, own I it would say is, we

and we And is program. transition as out. lead we're it we price to in in we changed. accretion, projections we – to of terms on point that cost We haven't factored Glenn the when working did. it now, have you the we So what did do -- figured Barry on really working are right bought the what agreed saves pay middle out when hard our in But of

we we're now, we we'll But, do get out like into measurable month things our that that. just for specifics goals, So right as you it. more lay here's are, can on a that

Suneet Kamath

Tom. All right. Thanks,

Operator

you. Thank

Mark Nogal

for we Jonathan, time think question. one more I have

Operator

from final today the comes Ryan from line Certainly. our Tunis Research. question Then for Autonomous

please. question, Your

Ryan Tunis

my but predictive is for miles environment? seeing declining be might guess what there's what between book best you in frequency Good it I quite a doing frequency question in trends is, indicators bit a decoupling indicators this the and actually question in you're trends with, the current think seems of latter that are more. morning. Glenn, driven in guess, do I your like This some

Tom Wilson

let I do That's that question. tough one. will a Glenn

Glenn Shapiro

Thanks.

equal. about on you're the I'll And question. little a all background created good a so Not it's right decoupling, So miles that. give you are

are accident If you're get forgiving. you a it's an less much likely because driving to in environment, more high-traffic

You take your road. off the eyes

loose by it in traffic you're if I and you're You're distracted recommend into way, you're in traffic. less But likely which, somebody high make than a mistake, any don't time. driving, when it at to you bump doing doing the

is So frequency. what effect an we're seeing bit exponential with has miles commuting way that little of being a on down,

lower normal on but new effect on non-commuting, were only it commuting, have a would back if to So came a the for miles disproportionate frequency.

the It's with those, partnership the in they that get that. at out partnerships helpful hopefully, miles-driven So own we're in a the data – they answers your lot way. Arity looking the a our of there, they companies and is do what and extremely with on that question. non-insurance And our have and with lot data, – for with of us data that

Tom Wilson

just Ryan and Glenn's And for time also – goes right? think day same So also. and and not too, example rural is urban of thing, the

less in congestion. people. much is There's fewer So areas urban is always not as frequency it there's down Montana, because as the

But a We'll you good listening the it. for of Thank top call. So next it another on you question. our talk difficult know we're to quarter. you participating is to have is story. news all and I

Operator

your today's does conference. you, for Thank in participation ladies program. conclude gentlemen, This and the

You may now disconnect. Good day.

The Allstate Corporation (ALL) 5 Aug 202020 Q2 Earnings call transcript