The Allstate Corporation, a publicly held personal lines insurers in the United States, reported first quarter 2025 financial results reflecting a solid underwriting result and disciplined risk management, even in the face of severe weather events.
The company led with robust performance in underwriting, reporting a Property-Liability underlying combined ratio of 83.1%—an improvement of 3.8 points over the prior year.
However, the recorded combined ratio of 97.4% was 4.4 points higher than Q1 2024 due to elevated catastrophe losses.
Underwriting income totalled $360 million, significantly down from $898 million a year earlier, primarily due to these catastrophic events.
Gross catastrophes losses hit a record $3.3 billion for the insurer in Q1 2025, although $1.1 billion in reinsurance recoveries pushed net cat losses down to $2.2 billion in the quarter, which is still far higher than the $731 million of net cat losses recorded in Q1 2024.
Group-wide, premium growth remained solid. Property-Liability premiums earned rose 8.7% to $14 billion, and premiums written climbed 8.5% to $14.3 billion.
In auto insurance, written premiums rose 5.2% while the recorded combined ratio dropped to 91.3% from 96% last year, helped by favourable reserve releases and loss trends.
Homeowners insurance premiums saw even stronger growth, with written premiums increasing 20.1%, though the recorded combined ratio spiked to 112.3% due to $1.8 billion in net catastrophe losses, up on the prior year’s total by $1.3 billion. Within this segment, gross cat losses of $2.8 billion are mostly from the California wildfires and March wind events, offset by $1 billion of reinsurance recoveries.
The underlying combined ratio for homeowners, however, improved by 3.1 points to 62.4%, demonstrating underlying profitability.
Growth in Allstate’s Protection Plans business also contributed to the results. Protection Services revenue rose 14.2% to $860 million, driven by 16.4% growth in Allstate Protection Plans. Adjusted net income from this segment increased modestly to $55 million, supported by performance across its business units.
Net investment income was $854 million in the first quarter, up $90 million from the prior year. Market-based investment income rose to $719 million, while performance-based income dipped slightly to $196 million. Despite net investment and derivative losses of $349 million, the total return on the investment portfolio was 1.4% for the quarter.
All in all, Allstate has reported net income attributable to common shareholders of $566 million for Q1 2025, a decline from $1.2 billion in Q1 2024, reflecting the impact of the aforementioned cat losses.
Adjusted net income was $949 million, or $3.53 per diluted share. The adjusted net income return on equity jumped to 23.7%, up from 11.3% a year ago.
“Allstate’s performance this quarter demonstrates operational excellence and a balance of risk and return that provides stability for customers and shareholders,” added Jess Merten, Chief Financial Officer.
“Completion of the Employer Voluntary Benefits business sale and the agreement to sell the Group Health business will improve the growth opportunities of these businesses and creates value for Allstate shareholders. We continue to proactively manage capital, as evidenced by our previously announced $1.5 billion share repurchase programme and quarterly dividend increase to $1.00 per common share.”
Wilson emphasised Allstate’s long-term strategy, stating: “Transformative Growth gained momentum with strong underlying insurance profitability and sequential growth in auto and homeowners insurance policies in force. Proactive investment management supported enterprise risk and return objectives including the generation of $854 million of net investment income for the quarter.
“Protection Plans continues to grow in the US and internationally with revenues up 16.4% over the prior year. Closing the sale of the Employer Voluntary Benefits business on April 1 for $2.0 billion further strengthens capital. Allstate has the capabilities, brand, distribution and resources to increase Property-Liability market share and expand protection provided to customers.”
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