ALL - Earnings call transcript Q2 2024 | The Allstate Corporation

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Operator

Good day, and thank you for standing by. Welcome to Allstate's Second Quarter Earnings Investor Call. [Operator Instructions] As a reminder, please be aware that this call is being recorded. And now I'd like to introduce your host for today's program, Brent Vandermause, Head of Investor Relations. Please go ahead, sir.

Brent Vandermause

Jonathan. you, Thank Good morning. XXXX Quarter Conference Second Call. Earnings Allstate's to Welcome allstateinvestors.com. market, following filed news our close website our the the of we at our release on and related issued posted Yesterday, XX-Q material and investor supplement,

an Our management team session. will our provide perspective we After remarks, a update strategy prepared on results. have on our will and question-and-answer

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

my of be Relations the Gobin, final earnings partner As will hands of role. a the some call you capable be our all. a I [ will Relations of be leader team transitioning since to be in Investor new Alastair you know, will will for who Investor as ] great this

I'll over to it now turn Tom. And

Thomas Wilson

address Well, you operating investing at for performance, your go results. provide then Jesse overview I'll of and we'll Allstate. Thank an Mario through good and time morning. will questions.

Slide on X. start Let's

property-liability personal on provided in share the Allstate the two components: X left. which are strategy has increase and protection ovals customers, expand market to shown

longer as good year. combined is profitable year business and first $XXX underlying an plan income On trajectory. higher assets. The the improvement growth a in million another results X protection quarter investment XX% on up growth Services fixed repositioning to portfolio had ratio was Protection successfully quarter yielding underwriting second profit right-hand and continues quarter income auto a good led over with into with was General had income profit in continues from side, you Net catastrophes. profitable benefit plans. the the has Net of duration could almost the see executed. highlights Homeowners improved quarter. X-year elevated The months the National in being prior the for by

yields. Let's move that increased reflecting insurance increases to Slide also execution was operational income. mostly liability quarter improved and and Net was fixed of reflecting year in holdings income premiums diluted from advantage prior the $XXX investment and show billion, the higher income extension and public take income equity the auto XXXX higher X rate million the and increased to underlying or in average which net earned quarter. than that was $X.XX in results property million Revenues second income included $XX.X $XXX to duration Adjusted how investment net XXXX. And for quarter per lowering fixed homeowners higher then share.

I'll for results. it Now property turn to liability over Mario

Mario Rizzo

X. Tom. covering start Thanks, by Slide I'll

X.X to noncore was quarter. ratio, expense The the year increased we excludes than investments X.X as XX.X advertising accelerate costs which points due ratio catastrophes. and advertising continue segments. in was adjusted The adequate earned higher rate table, of of $X.X of by average increased see left underwriting $XX.X margins due you and lower by the the compared premiums. improved On improved year quarter property quarter, driven in the billion to XX.X% top premiums loss higher liability prior $XXX underlying to can million of expense risk and in other points down the billion prior The states growth to second expenses

personal average driven XX.X ratio losses of were by and the ratio. had we The XXXX. depicts in points quarter reestimates, XXX.X umbrella the homeowners premium $X.X earned reserve The year the to Catastrophe liabilities in X.X the of combined quarter current results points increases commercial on X.X by of development exiting combined the year Prior only trends. chart cost a compared auto with as reserves contracts in late network related favorable impact underlying year to transportation loss the prior moderating and the components on excluding improved to personal began and right catastrophes, insurance quarter. billion favorable improvement higher auto minor offset prior

X. Turning Slide to

that profit improvement to our continue plan. successfully can see You execute we

The XXXX combined bars second XX.X the XX.X quarter each year updated quarter prior note consistent underlying reflect to show as average insurance adjusted adjustments. quarterly that have combined XXXX severity ratio. to the chart of years ratio recorded in the of remove to the compared intra-year the to severity volatility of of quarter. reported auto will we improved by estimates figures the those The and points related in improvement I end

underlying that second see of the quarter X business seen an of with improvement has can combined the underlying You XX.X XXXX. in of Auto ratio ratio sequential quarters combined

line light blue line starting chart expenses XXXX of half how The throughout shows premiums in XXXX. dark and second the rate blue pushed the average losses above XXXX and represented increases underlying the by in

continues incurred primarily expense, by average the This trend to as as the while above frequency increases bodily has quarter, advertising higher Relative severity profitability well year of see to As higher, estimates by accident severity higher moderate, to driven loss current Physical table. continue have X.X% and was investments. lower you increases year and offset inflation. bodily underlying injury injury loss damage coverage, severity the as improved. prior average row second premium expense reflects can outpaced in

focused in actions time and cycle fast trends is inflationary the focus and mitigate process on improve to claims of team the claims overall fair resolution. impact injuries on Our identifying to including operational earlier

the you the on review experienced an which low ratios underlying improved leader see favorably Let's the to years, can which right. industry, and chart industry ratio over loss XXX same insurance is over insurance, time Allstate combined as a generating had in X Slide Homeowners XX an compares This performance the that period. underwriting combined Homeowners performance. last on XXs in

policy of written policy table increased prior by average homeowners per and year, premium force compared higher the left. premium XX.X% growth to Allstate Moving the both Protection on written to in reflecting gross X.X%.

losses due to claim in underwriting $X.X higher loss resulted in of improved modest ratio than underlying noncatastrophe the the billion more average points quarter X.X increases premium combined XX.X of compared year. severity. of second lower The frequency, offset and noncatastrophe in ratio by prior to The combined $XXX which million XXX.X

first of million. X XXXX, insurance of the profit months underwriting $XXX For an Homeowners generated

Moving to Slide X.

our Growth, to multiyear make them. progress Transformative with the all side page, low-cost the Transformative discuss create continue the Growth in on we blue shown of a X Let's to of good and of strategy The left components digital distribution. panels on insurer are broad

and profitably the over of time. affordable, through customer objective are the new outcomes the those right-hand show that market Two the delivering tangible On I'd outcomes transformation, side, experience grow which tangible share proof examples this improve support that our to we're we points and highlight and technology by million new And support simple and product growth connected advertising approximately that XX with was states. efforts to is we built attractive on in in available now auto insurance in returns. $XXX our the states investment second that our platform increased quarter,

to on strategy, preferences. their Moving enables the based X. us distribution multichannel customers serve to personal on Slide double-click which We'll

business that advertising are insurance the of Our the exclusive increased advice direct attract in rates second for bundling personalized to new direct channel and customers agents prior increased in quarter, Agency of year. broad are capabilities point Enhancements available at and the local all-time production more self-directed needs. highs. with at sale seeking nearly to double has productivity customers fulfill

expanded significantly independent National General the acquisition agent The channel.

of balanced power shown we new the at the you you the The can a across the XX% split resulted channels. business If in look of increased write, of pricing bottom pie Customer and product sophistication capabilities, increase Expanded with advertising on greater the distribution business has new expansion Access. distribution in broader slide, charts see much XXXX applications more of since combination a in distribution

of General and has customers Slide and how selling health, who acquisition, group with with and brands, solely allowed us channel the independent X both marketing the $X deeper to including insurance the businesses, we auto billion Prior offered Encompass digital Allstate personal dedicated to independent accident through National Encompass acquisition through Now agents. turn the platforms. IAs. prefer acquisition serve to delve to agent let's a to the included The insurance, engage into to better number brands in health, individual

independent General, National go the in the we acquisition through the primarily channel, of National brand. With now agency General market to

the year. independent customer agent going and this written segments to forward personal of the lower for remain of force attractive is IA the reflecting into in supporting ownership expansion increased January independent now the largest lines National X since of the XXXX, Underwriting of annual insurers through in first of million have billion compound we past X.X premiums General significantly customers we rate the and policies protect policies almost a years number of over National agents, with margins in risk growth Through bringing growth channel. over having one added months additional X% $X.X X General

force for property all in reviews XX Slide brands. liability policies

that the opportunities. Given the will increase profit Auto Insurance growth execution offer new growth XX% of successful Auto attractive to in in plan, a led return These investments Personal improvement higher investments in the that sales. green of business policy on the growth left. the The show second can see new applications top quarter, of chart as at the the components you bars in

the new a X% X the operations in year volume brand. of enhancements agents in XX% resulted advertising prior in reflect XX% per prior first and drove increase increase Allstate compared to in the channel new year. investments increase bars to compared Higher the business the and productivity The drivers direct exclusive to business direct a

The that middle growth to last and market X from green sales national roll the general business higher volume in both we continue CustomXXX auto nonstandard reflect bars the out. offering

compared X.X% new year brand by prior as prior National total from moderate. in as in you points defections General. by X.X% of Allstate brand XXX,XXX did more customer brand right, at Allstate impact X.X decrease. see policy brand policies large increases compared compared in by rate force protection retention in auto partially the and decreased force enforced almost XX.X the that XXXX was prior of National to to can negative increase Allstate the General continues to to XX% growth the as decreased lost policies the year auto On than improve by Allstate XXXX offset policies of policies auto offset of sales. offset growth year decrease

impacted improvement were loss While actions have cost policy a trends period negatively loss of rapid during margin cost the actions to necessary growth, inflation. mitigate

And it over now I'll to Jesse. turn

Jesse Merten

second the Protection business the primarily quarter, In year XX of a Plans. Roadside see details increased the you Revenues most Allstate improvements. the the to prior will was in right, in quarter. in quarter, the by All net claims growth businesses right. Allstate reflecting quarter, growth exiting quarter compared to Protection million, the businesses Thank showing revenues plans continue income to Protection table in driven prior unprofitable Mario. the adjusted In increased of large as these year compared and This was adjusted result line. growth the you, $XXX prior in on than million wholesale XX.X% in to higher account. second income our $XX decreased XX.X% a of with growth trends impact net Profitable to profitable compared improved $XX year in year $XX prior benefit Services. which the resulted bottom million increase million, $XX revenue million quarter Slide

to by Slide platform Plans created products, and and $X.X plans. of profitability. electronics, a power retailers such also and point major wide value including consumer a The XX We're provides Allstate helped through for provides internationally with growth brand. of Plans retailers become XXXX at TVs, Sam's range with additional all Home secure Protection tablets, significant Allstate mobile and the appliances for in the expanding acquiring this Walmart, as Depot, Protection phones, insight Asia. of North Allstate Since sell billion, computers SquareTrade into in successful warranties partnerships Club, shareholder into has brand the scale has Target and under America. We Europe attractive protection sale furniture. large Costco,

XX the from growth since million cumulatively XX-month Revenue Adjusted and million returns been months operational XXXX. right, charts has while income has to the distribution same in $XXX over strong. resulted broad see the period this execution $XXX can in totaled rapid grown in to you compared net almost last have and XXXX, business. the As customer-focused XX%

$XXX last higher optimize million, $XXX blue, Now million, in below quarter the yielding chart quarter, is fixed Performance-based as of return results. $XXX Result shift assets. lower $XXX million of was the Slide $XX second the investment left, investment is discuss prior in of due and from which estate results. across million unit income income, continues let's totaled again active million enterprise. XX real portfolio from repositioning into shown income of Net to benefited the million shown to to above above income year shown Market-based risk which $XXX management on seeks to the duration portfolio was prior benefit in the to per the in investment longer quarter quarter black, that year the year.

The enhance and returns performance-based to is these constructed assets volatility quarter-to-quarter is long-term from portfolio on expected.

annualized the can predictable portfolio return over strategy a long-term portfolio. market-based our diversifies see portfolio and portfolio risk you the On the horizon. return and in performance-based right, and while earnings short-term investment total delivers The $XX and by billion enhances

by adjusted benefits offset Moving Adjusted health. XX. than decrease The income individual net prior to $XXX in income by of health business quarter, of a $XX premium Benefits driven perform Revenues slightly in year health. to was increased higher million that Slide the the reflecting group second group partially year increased employee and quarter and to quarter, prior individual continues and net growth was the Health compared by $XX in million million well.

the a achievable and As based has logic. buyers and complementary that a Allstate. of potential progressing our The a capabilities by is beyond pursue was divestiture products process confirmed value with reminder, to businesses decision these what strategic will is well belief unlock on

is for homeowners' quarter's Slide We're that shareholders. auto Auto improved. policies portfolio And continues force. your with of the transformative questions. strategy to offerings Proactive has strategy and Homeowners increase force. broadened continue General and that Plans profitability our to management in growth in value. for the insurance results. and We're distribution. in XX growing recaps risk this is accelerating return policies and National create Allstate will value generate open context, confident investment with let's expanding product Protection And line to profitably this

Operator

today the Raymond for Gregory comes Peters question of from from first line Our James.

Charles Peters

now So in I applications. for transformational we're increase question, focus talking first and years seeing growth. strong for know And new you've growth several my I'll been Tom, this about issued on

result So some of that to new supplements. I'm in think that issued might is if how drive wondering in force you in increased policies application help you stats auto see us understand the going your we

Thomas Wilson

quarter billion Good morning channel. General over the and annual talked it. Greg. we on And here about National we feel Mario an Thank this you because highlighted like And being attention basis. appreciate for it's growth $XX paying business both by years, a includes lot it of But to of we're processes growth the in as doing market is not a National really remaking looking much. Transformative one Growth the includes in through that also General. Allstate inside terms business point, brand. really what your the

Mario couple he's So comments it let of talk to things about me various to that make a in specific give doing about and geographies.

most driven view more. factors: you X point keep by and just It's the more, sell out growth macro as

time a We And trajectory selling more. feel bunch so spent of we about there. talked Mario the good about

in will it the benefits the about. of increased in direct growth You agent advertising can increased talked volume and we productivity that see And also the Mario roll as out. the into translate channel Allstate

how quarter. course, retention up the quarter was do versus year slightly in is, the question you other then of prior So many And the keep?

XX kind last over flat in you reasonably look of it's months, If Insurance. been Auto the

couple increase. you're increases retention by Insurance, about Home It's down in you likely But breakdown, a assume not expect years. lot rate will you because talk of Auto for raised and we ask time. to think great would at it's pay the the broke opportunity on as way. me be last And well more the We it's say economics clear about over of that to and relatively think just point expect when elasticity I I been flat curves prices to come trend as that Insurance, I traditional what normally, I that talking stay the this Auto can us. price is down, more would that's that don't not reason a

in were the a pretty be it's tell why attribution So XX% hard because figure that of the what retention rates little hold hard in increase out well. to will we face on to to of did able tail it's

maybe understood government bunch -- people them. the maybe more, been gave their of is have car they had car cash Some a worth

rates, you really attribution also were Some raising so can't of why we do are as to its are. where we competitors

terms movement working one experience. is we said future. the hard customer to up close on the are there. tell taking do pretty to exactly it's looking obviously. a will To increases. not because price in -- So we little in of what it's waiting to growth, rate goes the extent, retention forward, happens retention thing, which and a That's it what We're fewer good improving But really we're around see almost

and goal annual improving by goal of million year, we're an customer basis interactions the that. XX well We have next a along on on

a out are all of continuous improvement. We've there, of we're growth. around which new designed improving tools bunch So tech and whole got doing new retention products,

to specific terms do want of growth talk or about Mario, states of in aspects you something?

Mario Rizzo

Greg. Sure. Thanks for question, the

So maybe is we also the a more important retention significant that place York, there's increases those we're New with But trends the But handful is recently. we going retention that X and your Jersey, forward. Tom about have a California, growth, to said, recognize of little like continue are like bit talk pretty I'd stabilizing. we question. that obviously an get on start, retention at kind absent critically New some fact emerging. pleased going to are impact rate taken to production the want new I have But business those states, of to and states

we've past auto And be plan that's So years, the did here? obviously executed Greg, the of is, improvement kind we reality start state-by-state, being over where on as of the been market-by-market would couple profit I how get would basis. a implementing

lean volume we like increasing business, underwriting to in sit production guidelines the our X/X those of And where profit another more a states, target now, begun in states. what we growth invest that our rate are to adequate I'd would include so or of to restrict both represented kind And about in path like as gotten advertising are of locally. levels. the premium to then have on unwinding spend, there. about X/X right there's drive that and and nationally say, XX% things at And states states, consider as getting But as to We've level. would

been course the So the feel geographically the building we're majority good in comfortable over overall, you about the that's of where we see And investing. year. of terms really vast really country of the momentum

was total. quarter, about Last up X% in production

We're we ramped really to to growth do we're I as up retention. going aren't successful, we to continue loss to was to top that and quarter, parts about take necessary up there when as the But to the cost are we've on levels of of those diligent going broadly additive and be there to are states which, to XX% become that can rates we're to taking on And will focus country the growth mentioned, At that further now trends category This continue seen time, rate, investments, in states. that. us profitability. right some mentioned, get across where it that less helps as invest. Tom going continue got of you've we're staying same target

good seeing and of growth And across kind and we're us new at channels. the to in we're where got terms the of brands that So geography across news is business.

Charles Peters

ratio would as be on my I expense follow-up guess related -- the side. Great. follow-up a a in question

second increased the advertising in the out called You quarter. expense

forward, this longer-term When I your balance look how sort what kind your expectation the to what is do was of there? of have are adjusted move we year of property about ratio going X combined ratio. and you think it objectives liability the maybe through points expense of

Thomas Wilson

a both little first that then answer by up me going down and bit. Let coming

We've underlying proven out. was on Transform that through. to -- a had So the that not those, whether components Mario walked assumptions or each between good thing do X of Growth we've

increase get, now We think the is haven't you're so not which to right seeing are -- share. they working at market all all growth we same the time we can that

When work confident we're business in confident those in property to liability. into What we're get of in you We're that So direction. next quarter? market all retention the exporter? share going new personal what's same will things increase happens

to we I expenses, need price. means simple, low affordable, relates think to we it continue. to protection. As we mean wanted connected Affordable

continue to reduce means we're costs. That going to

to benefits. we now bunch that the we've years on. whole don't on working so we with -- more to got go. think still starting of things are we're been And -- of But for as have Like cost business, a working and drive are age things we've the we out, do that can generate there's couple of we you a on our we digitization in can point

attractive We've invest to expenses a people If the and the think market the but time, got to about idea continue that lower that. that, operating as to to is advertising will we don't to we earnings lower then reason increased returns. the multiple. get that re-rating which to value does wants of at relates creates long it a happy as growth, down broke talk out good capabilities people that comfortable and want miscommunicate share, anybody As for because relate we to set that advertising, to same lead think be to separately at we're growth returns, a can I'd we making is we fact there, shareholders good that of taking we're in good get of be there,

Operator

from next And JPMorgan. comes Bhullar line from Jimmy question the our of

Jamminder Bhullar

seems a on most I margins trends It question terms of to what market, companies pricing auto just for terms the in like you're of of getting and competitive advertising. seeing closer the personal had are in in both normal.

seeing out that price? starting But -- them to a know I see advertising on certainly some you there? if you're of been what spending has lot. aggressive going if are get up wondering So

Thomas Wilson

advertising, course, being biggest is Let a ones And competitors, of there's pricing. time on jump can for in mostly focus are on business that competitors lot of Mario and me in the the here. let's talk and about but play

because returns. just were is we're talking for shareholders, earning about, -- So it's we from good a growth as good good

more into and over broader and drives capital product on then should for good and other value a to do to first, you head multiple. a to you fight true what creation, And you a that to to base, lead capabilities differentiated then leveraging to which one. appeals re-rating that's a that And say, needs have shareholder customers. got be we're Secondly, advertising

product. the to So higher know from quote close with we it Auto that ASC ratios the have We with our product. new

You've you to about got returns to have -- got attractive talked at that we when be length. getting

because You got people of great heard great advertising consideration brand to people brand view first have and increases if -- time have a is the done a that effective. have like you, we great your consideration. dollar of Obviously,

to have You can and you access We our ties you go agent, to go advertise, with you together have this direct. on website, go broad can transforming growth. exclusive to can

you at those had effectively are I today, they sophistication, a to went that great used. on to, through precision, dollars want make pricing is advertising they good say advertising game however So to who this want as Then of win. sophistication though, push Auto sure come would Insurance much

sophisticated ratios the people our And all you in can see combined because look how today. have at thing good when like we that we're advertising we is really ratios you combined Same price of product. GEICO, in true Progressive, Allstate,

don't and good to search we're at reviews, good and to at just you We had listen search. ourselves. be So we external have really

stuff need we you're bidding good It's do. How elite. we're bidding to got good be at other strategy. much for for at perfect. to We're bidding a have not We elite? You like

with of number the proliferation imagine and it do different we're to complicated at pricing good of really media for can of out the you now, sophistication, can gets you using different messaging groups. And how got with segments figure it. channels, you You number messages you're really your of have, fast number AI, particularly kind of

and into other we it. we think this how you're good us we're good versus at people, are like, we're advertising the So thinking And you? about when go increasing well,

population look you run the of XX% where are with having around Arity bid we and really that's track driving. on U.S. work, you telematics more information on because our end we who at they're If to

device how a without or decide a we can So driver device or you phone sticking on in car. on are good an even your a your app you

will advertising? Probably. increase So competition in

who be of same have will do. those kind It the from carriers we capabilities

that to game. So fully up winning we're

I be capabilities they back do because drop think people the and hold have expertise will to or don't there some out it. who even other

that's So where good you because shareholders we the it's pricing are environment? good talk And do advertising, Mario, about for we want use money growth. in the for effectively.

Mario Rizzo

Jimmy, I'd there's the broadly, put thanks vary company to it's caveat just question. is lot say geographically around market. but going the And for that and what I'm operated the it to competitors the I'll because Yes. answer to question way, a obviously, has business going by and going that, vary a of in

the But system, will better, companies taking by equal, in discussed we are large, competitors profitability this that's the rate our vary when rate the as of than less many that activity in improving as that just over we're and I would there's of being margins Again, and years. say, reported what as happens by auto of last all less generally were couple saying and company. trends they things is and have morning loss cost have And improved.

than pushed getting along. later up. varies through. catching are started then Others are And as geographically less rate a generally, But Some see still little further well. certainly, and that others we

Having said positioned that the take along Tom say we're that, totality where I of when take advertising in you terms would of about with what that talked and building what and just we're in competitive investments Transformative growth to successful building, we That's and able with we're ability and positioned we our chances. be we're a increase where marketplace. like be our what Growth, in to like

Jamminder Bhullar

And the months, next few hasn't this year been assuming not if close late how drags and a an there announcement, year? And then process just bit to little close we're probably about maybe going on in on to but year, but it's the next are assuming it you still benefit I'm the the sale, within is talk the going. even

Jesse Merten

Jesse. Jimmy, it's

First, reminding by that in I you it I guess I would start results they're businesses, the great covered. everyone, the saw

give the I at the going. to a on understand where of really a happy we're into execution you might window to It where you focus continue in we're help to if and helpful of operations. we're process So little bit be

So single same we lot a transaction. they we could, a with So if we spent with transaction have in didn't of quite right? single that you in note, think the change started about options, our we terms the better that were But preference the process, preference, and/or for frankly. to out that a compromise time thought a buyer end, value for unwilling

buyers. what we a So on we of decided spent time process and, ultimately, there was with a work other lot to

things, delay And it for our businesses. we'll a the by making in better a that better we're outcome just confident outcome. better shareholders, a has. created that has for switch, get outcome A that But

would a what of and when you'll if close, and transactions how, get come. to helpful. But to little the that is and those that's the anything, would more we're get details and now, about right that's heard the So announcements haven't into I into of what window this be announce say in announcements I likely just bit what a you to process say still position why don't a of timing want year, I

Jamminder Bhullar

decide Or even entire And to to sell, if intend do unit pieces? retain? you pieces into dispose the there some it you are might eventually, goes of

Jesse Merten

divestiture of the to Benefits the We still and Health segment. make intend

Operator

Huang And from question from Bob of our comes Stanley. line the next Morgan

Jian Huang

Maybe Homeowners. one on

cat to was to a headwind think I correctly, comes obviously remember I one which cat storm numbers. was event, if convective severe in last your 'XX when it a year, losses,

the given things we the a 'XX terms is developing half, year? it curious first of event? worse how far, are how have for of than are developing more the in this Homeowner be Is to weathers in going on one what are Just side. pace Just in like tracking it how curious so

Thomas Wilson

Bob, X year. Thanks on a Homeowners. on longer-term I at would for Homeowners than the it's basis look Tom. question

the profit turning last happy of So were amount X/X if part less before domestically, XX% you market we've made look because talked hard we're us they go that so industry the over quarters, profit XX% the have the we has business. a lot having people what of when on part of sophisticated It's negative at entire were we and are years, led business to that XX of they to but we the growth whole have homeowners. or guess, call of do but market be good bailing that a because pool a, made that into, than we've in currently into total X pretty either we the I model, about the

So growth we a that great think is opportunity.

As it too year, hard It relates to this and predict to comes weather. goes.

we than of The didn't made XX XX for the money make an we on made feel where in we've first each year. months, That basis. money last the those prior X makes For money years. better year, whole me years, underwriting

I business So our good feel model. about

and take key good be As be to they're to there to problem there thing individual any it getting for want we're their claims. us their quarter, for the care tell got friends. Like a customers. relates of -- there at our I fast. when is to They We

particularly Our we're well Homeowners as extremely you It's saw is the bundling up. our agents growth with unit doing customers. -- in Allstate

right it segment. sales. in that We're cross now on interested other killing people just So are line

good feel that. So about we

Some hard of the market. that is

it's relationships. of Some great

of Some have. of product the pricing the comes all is It kind together. we and it

growth of or which to business. wanted it's you I higher too period -- depending evaluate it's this second long-term down We time good think quarter you is a on either -- we get like it's the quarterly got And decide focused against. or it can potential. basis, whether up on we lower So wouldn't on

And results so just on the I long-term say would from it. focus

Jian Huang

bit here. My shot of in second the question, a little dark a

under precedent some at has not been the DOJ if expect the potentially National you environment, get ] there that's I'm the point involved do SEC down can answer For should where Under road? Civil current the litigation you Faria the lawsuit sure involved. question can General case this that SEC General, Actions, National [ get Enforcement at for point. where

Thomas Wilson

that we I And what not I certainly Well, a when of people we will want for have know little -- give a in to obviously. or specifics the information. don't auto on stuff agents. can't speak It's will -- do what focused active the choose bit other lot is litigation, to a don't do. sold SEC us so through to This can I program, of lawsuit reference is lender-placed insurance What on insurance. give

Borrowers business. the in this Our that lawsuits we're we on treated prevail and will fairly. program confident And our no was ongoing were that impact have will transparent.

Operator

the from comes question line next from our Zaremski And Michael of BMO.

Francis Matten

This is Jack on for Mike.

success strategy. spend cycle? growth then your strategy transformative and how ad specifically, And today today follow-up historically evolving is how strategy base? a compares on the direct-to-consumer much been the in versus how the focus that your spend your has last I'm sales expense to And your lower of curious Just your targeted advertising more of geared agents? toward given supporting

Thomas Wilson

We this. talk was, think sophistication would transformative new the have did the of growth I people that third the investment and we more other much much, too. we've sophisticated here I But in acquisition. customer last Jack, it didn't gotten about say component but versus time increase

-- not everybody like to we're I I'm but X don't else miles we're want ahead conclude of good. So

feel Upper we which advertisements is make upper they're sophistication. sure better are in some so much get when through it of insurance. funnel to the lower being investment go about TV considering way And there, as allocation The about out our getting funnel. do you the think we brand people and

that you'll TV. more on notice So advertising

"Hey, we Then and something what browsing lower do a to web car, funnel, that there's new TV website, says, it. is addressable call on or which into around cruising we you're about your pop you're for what Allstate" use we the

investing there, for of increased little upper got we've brand ways of we great there's a bit the want people would to we different because because a our years in last you of lots couple try to what terms funnel. biggest So investing keep by of really class, and that. by we highly lower in by be in described, got gets our been and in The it risk Mario state, want how that. what unaided do to sophisticated That we've piece. it's forever. in market, to funnel great increase of portion is which remember one, in I terms down we off It's we some are the lower And do, just would we first call, because tied funnel recognition, do advertising, the tightly

both those the for channels, of to relates brand agents it so all lower funnel upper direct. and of and work As Allstate

where or Our other leads. agents lead brokers of areas do their some they local their buy in to own also people mortgage go and generation,

you globally where an if because like think area just than we increased bring something better need to sophistication it at limit you that. is would we're or there be Boeing I to doing it to

out got So we on machine can there's of increased sophistication the there. a gauges can we But has think good as it tell it a and what's end. has it, levers other we different got so number have -- pull, on coming large of

And dialing and current we that we're turning constantly watching and so gauges our those levers competition. so the beat

Francis Matten

That's maybe switching helpful. And cost then gears auto trends. loss to

average at I it's benefits loss severity. of than view look mentioned guess trends. now you're compared sustainability lower does higher offsetting frequency curious now that slightly underlying seeing weather. the And disclosed, you XXXX. how you the you to quarter, I mean last I'm favorable you favorable running current know frequency more If

Just curious moving. how pieces those are

Thomas Wilson

third and which A on Jack, costs and ago jump that through the the call to first, Mario is be about it's I'll just have year about been in nice say can halfway more second coverage. let severity into optimistic. loss frequency be by have both and and question. would I it much growth, talking

about value. go to think good because lot shareholder it's happy growth to create talking Mario question. So where a going a it, of we we're I'm but we're will that's

Mario, to you. So over

Mario Rizzo

were they're to we way components shouldn't Jack. guess at is that's system. the important, lose of the mid-XXs we severity as of we and expenses, Thanks, business we helps levers. would say, use mentioned some the that as because auto certainly, fact year. that what X.X% look targets entirety of combined across negative all need remarks, and there we frequency What to that the manage Sure. is dig into I mentioned, the trend as much and they do And all generate year-over-year levers ratios whether the bit like premium, there's of a the the other in place the in in negative but trend, pure last sight profitability, little around inform supplement, we I'd of start rates the of I I I we in with the loss intra-quarter see prepared you terms severity matter. as comparisons my And the noise moving

it's X%. So about numbers, the it's adjusted slightly positive,

used stabilizing inflation. it's prices bodily on of that the that's physical kind side, car But run above and all on. has continued injury, tailwinds that been severity reacting continue higher damage costs see and say So loss of through first I in not trend But predominantly And -- we year. to good the repair would which the favorable like to. continues some by offset overall different. we're things with so the half It's it's frequency to

has shorter. bit, it's our a trips of risk which and a telematics was question are lot to When year frequency, really it ago. of a of a weather operator rich the terms per is been segments In better at we answer. driven than like play. little all us sustainability look gives Things come but up geography and data, miles difficult into Frequency information,

on impact an could So frequency. be that having

Weather value, we've that's let risk growing, business, our shifted to having auto over as book around favorably of and improve years couple is I'd last the and bit been the lifetime impacted the of frequency thing higher the in type the segmentation to a well. frequency an looking first impact quarter. not profitability say And lower other has as mix

to that started. manage going to in in trends, the prospective So generate We go combined that One is we despite business, there's our to more go I parts will there. thing back a profitability, around. system entirety and say as do how where impact I and frequency I'll bounces to write ratio will lot of its moving forward new but continue we're frequency mid-XXs

Operator

Kinar from line comes question Jefferies. from next our And of Yaron the

Yaron Kinar

growth I wanted back or continue focus to go growth. to to on

about with mid- hopefully since we're to the Transformative program say was aftermath context of I some come Allstate. be Growth also of kicking think of had high Do see are now PIF. And issues what starting you launched. growth, be we growth and consistent, you call in -- cycle, a that or to kind not the But in transitionary at in, I maybe the growth period can think that achieving it, think should the the industry PIF leaders out from on Growth ever over expectations for in levers level? some think pretty think through. and even X- you this of COVID. maybe X-year I horizon, a high basis Transformative COVID, but help you've I'm reasonable and Clearly, asking you us the can announced of all single-digit that that

Thomas Wilson

it's that presumably market growth, customers but So Because in industry market to haven't more, we market looking it. that's a on by is when have for share, at our done PIF the could premiums. the basis, target out goal. your increase will not fewer lot think right given you're charge share Also a times, about way of share

Our goal is PIF growth.

the that If new low to stuff said, so cars in you you United of of going want a don't to be and I house to not assume cars, more be U.S. the a that, number like if bunch going single-digit okay, in know, economy increase, States. X%. terms it's of houses in whole There's

growth to that, that. PIF so higher than is And be got than higher obviously, has it and

You that can Homeowners see because business. winning now we're in right in

limit and competitors at profitability. called it's those General, that, a higher National we you as who look a our out. one than good get valuations do, reasons it of got the really bit far up some good we if how at don't is It's on we as got look much up, is every of you which When growth have

you increases which the you growth, And for the United you premiums, would We So should you put get what it assets there's is when And to revenue it the States, -- be that do overall on top think then is put in do if it. how great is on, X% here. timing? question what take know in growth and how potential growth X%. modest you we that translate call in above just into the of

well do You math we can. as And can as so the what that into? does turn

think you Mario's direct, think there's really we've people, into can that improved They're Allstate as what We at brand that. think potential good business. unleashed we just now charts But And say that new in bit on here. business out and we Particularly do. don't writing be the every great much is turn lead figured that and good can at When we're other what gold. gotten see they to they there. we you how growing how look from I would

would optimistic, there's think going very we're a number than have. potential, number we to. lead it valuation like to of of lots we here's don't we're but higher have, magic that our But to currently is, get So the we earnings whatever

Yaron Kinar

NatGen company Does with acquisition and the warranties in have the reps that's insurance question. Same associated effect? still

Thomas Wilson

If happens. you're eventually relating what just we that impact to will claim. But me think reiterate, I the DOJ don't we're with let lawsuit, where are really that confident in

Operator

question comes from next Evercore David line the our And ISI. from of Motemaden

David Motemaden

I think within improvement it any point was of called wonder if just I had in or about underlying if us factors talk something peers there, was your frequency I one by from there was of benefit out, could to was wondering within if of, size any, business? the in in quarter. insight one driven you the could any X.X the time the any auto give way ratio, is from you if unsustainable unsustainable terms there's auto unsustainable loss a that benefit if

Thomas Wilson

No.

then winter, if how give in get in matter X by I wet a sustainable it at summary and ice in the you me if and you it the you don't snows it if much. X determine of you Let accidents. go to snows in X:XX jump what's and it can turns of not know I'll a.m., Examples, the hour, time drops then a doesn't If it's so -- you the rush you Mario, give cars want. or p.m., little bunch at and get temperature through. frequency. quickly sustainable the kind

do things So the that Who often how you of drive? you example sure just and that's What you driving? in? you are drive? city else I'm -- drives? not far fast how drive about you of How really one myriad talked Mario How

or if -- how don't not I who who -- remember know don't it to don't it Mario precision What that would be come don't sure but the they is was I able I I we price know said, to -- know able to is. I we on I'm be math would Like what what's sustainable on how you determine that said and our with unsustainable. we what have, that, back

we it what in. is, factor what So is

don't Just down the in decrease rates. frequency a quarter, goes we suddenly

it we'll We in auto quarter, Just keep in a don't what get price that's insurance, and rates. combined to goes mid-XXs like we doing. a if up ratio suddenly increase

David Motemaden

is It do helpful. Understood. That's it. complex pretty that. to Got

And how it the assuming on you've that's under My in fair. clearly combined. XX just the think just are guess, there was I guess percentage on spend? spend? went holding are up as the follow-up book? could where big states I'm total ad past, And think back that states ad that -- this quarter. So And shown question wondering, I a I'm are I I if size is those you so, you're just of any

Thomas Wilson

it percentage say turned. the answer think Mario question. was a let lever would that you in I'll I that a dial -- as hold -- back, I trying of

high and Some Other were states appropriate really we is what were levels. testing wide at there. states open think

bid and learning there's much testing very on and just managing I how mean constantly stuff. -- sophisticated. we're on live we it's market in So a

making there states money. like So no-go a to level. important it's from point, a is, like But or standpoint, not you're go many macro there's your how

Mario Rizzo

go I say, David, to I'd said Yes. And what back earlier. what I'd

X/X a say in states XX% at to states, combined of path about that underwriting states or of guidelines getting spend, that's mix there's I about things at As are same terms that already leaning ratio. we but on around look like And true volume or of our the guess not of I'd another it are handful kind so in below target and and premium of approved. advertising be that beyond we've there with rate we're on. the just so would

talked New California, we've about York, got California, New as Jersey. a rate. we for XX% much As approval

in are business all We across California. new writing channels

the we're and stay loss writing get write. matter of side are rate trend the active an in a on want other conversations said Having we rate in And ones stance. another ahead Jersey, spending approvals two X.X% July, to last of we're rate But still resolution a on teens we XX% hope And of effectively low gotten the the we've that now on that we'll country, don't December. to the we writing Jersey, low are soon. with rate get business. that, York in reasonably filed year. of that additional because that managing fact, York. what revisit in and New We're As New And California. dollars we rate to department at volumes approved we got We of in then California, you just filed and we coming New implemented The that end hopefully some marketing another we're got New there. very we've in in behind one

positions a path how And is evaluate we us need that multiple we and appetite reassess is to the returns function to objective reality to get back we And there, write much and I've attractive our we times, we'll as Once our to then to see to able want able appetite our geographies. in be But we'll profitability go to said where I'll do what risk be invest. every state. expand across to that. saying

Thomas Wilson

couple a add just things. would of I

same high-growth be in ever XXX%. First, situation. goes us that I think in or Like you're guess, that competitor, every at business. don't has to, I we'll well I not your this think that the But the also everything comparing competitors probably it state --

trying So people to I do. see can what are

into growth between our gap we're decrease that be Like between say multiple the substantially in translate current be that higher that auto in and valuation. I and on increase narrower probably going the between thing, the the Appropriate gap small is, focused than small well. would a to just the what's could is growth valuation moves insurance increase to gap triangulate what as You're trying rate. to is the in the the of it valuation how with potential multiple. even does

focusing, and grow think one-to-one whether think going pay be it same You But worth going to we to have we the to it's know want confident how a you you that it's that's we're for all to run happen or not time. like not. to business. and decide this not I at can thing, But what

Operator

to comes Vikram proceed... question Vikram line you HSBC. might mute. on hearing me your from have We're like of not phone next our And Gandhi from you. still you the Would

Thomas Wilson

next Why question? to the don't we go

Operator

Our line Lederer then comes next Charles question from Citi. of from the

Charles Lederer

expense X. see new as your channels appetite issued I things Can does app And ratio mix you that you given margins on understand up? across talk tends the about how it? Slide back open have do higher direct your customer to how differ as I guess upfront you a impacting

Thomas Wilson

First, locations, would want say not-standard, all most Mario, all we specialist, about all talk want to or standard. you I levels. non-general do customers, locations risk but or maybe

Mario Rizzo

from have perspective, direct. between Yes, Charlie, channel I'd differentiated pricing brand, say and like we a the in Allstate agency

to in price the the cost channel that charge. So have match ability business we do to that we with doing the the of

have the we'll preferred write in in In standard and agent of channel, we terms channel, price in underwriting agent we'll and the risk the of in entirety write if And appetite, the risk we also across segment. write indirect. it the right

terms few very in So across standards underwriting channels. of different there's exceptions

nonstandard I acquired meaningful think in in, a didn't the is of acquired one we the Allstate we way. that which the In terms segment in sense participate of is auto General National business, new risk really brands, historically when it

nonstandard really growth premium, thing unit of a in And auto I'd the segment. one profitability. That's a That's the segment that with just generating to that be business. shoppers very of currently lot tend lion's strong strong of there growth, on under XX% business, of really say the well-run share

turn can rapidly. off on you more So growth and a lot

pretty reprice that's the be retention And think lever to because to real lower. a book I for able the tend become growth us. You quickly is

business, As didn't now grow you we to right that it been profitably we which we've have because that capabilities when in in see have to can segment, able numbers, Transformative started the write Growth. we our grow

I've CustomXXX and across now, Tom as of General in about, the -- rolling write National brand to in risk out product, we the we're and positioned equally across go well. positioned across channel across write But importantly, mentioned, through middle to can as Auto. but system. we're market channels, nonstandard independent standard entirety as upmarket preferred talked So the Homeowner But and we're segments agent

Thomas Wilson

with time us. spending Okay. Thank you all for your

investment to business, growth in move on going customers. offerings protection well, platforms doing really our in results we but As our And profit do work and on spent accelerating like had We'll that great We're you investing we've the what we'll of to have which lot portfolio. forward, a then we sure see Protection next we Thank time keep didn't our serve great we're is through proactively all. our quarter. expanding liability today, Plans. you making

Operator

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

day. may Good now You disconnect.

The Allstate Corporation (ALL) 1 Aug 242024 Q2 Earnings call transcript