Allstate Reports Solid Q2 Results With Growth through Independent Agents
Allstate Corporation (NYSE: ALL) reported a net income of $301 million for the second quarter of 2024, marking a significant turnaround from the $1.39 billion loss in the same period last year. The insurance giant’s results reflect the successful execution of its auto insurance profit improvement plan and strong growth in its National General subsidiary, which sells its product through independent agents. [Agency Checklists, July 7, 2020, “Allstate Takes Aims At Becoming Top Five Independent Agent Carrier With NatGen Acquisition“]
Financial Highlights:
• Total revenues increased 12.4% to $15.71 billion in Q2 2024
• Property-liability insurance premiums earned rose 11.9% to $13.34 billion
• Adjusted net income was $429 million, or $1.61 per diluted share
• Book value per common share increased 21.2% to $62.14
“Allstate’s strong execution capabilities benefited second-quarter results and positioned us for continued success,” said Tom Wilson, Chair, President, and CEO of The Allstate Corporation. Revenues grew by 12% from the prior year to $15.7 billion for the quarter, reflecting increased insurance premiums and higher investment income.
Transformative Growth Strategy
Allstate’s Transformative Growth plan, aimed at building a low-cost digital insurer with broad distribution, continues to show progress. The company reported a 29% increase in exclusive agent productivity since 2018 and a significant improvement in direct channel production.
A key component of this strategy is expanding customer access, which the National General acquisition significantly bolstered.
National General: Driving Growth in Independent Agency Channel
The $4 billion acquisition of National General in 2021 has proven pivotal for Allstate’s growth strategy, particularly in the independent agency channel. National General’s policies in force increased by 12% over the prior-year quarter, making it one of the largest personal lines insurers serving the independent agent channel.
“National General is now one of the largest Personal Lines insurers serving the independent agent channel,” Wilson noted. The subsidiary has seen its net written premium grow at a compound annual growth rate of 23% since the first half of 2020, reaching $5.38 billion in the first half of 2024.
The charts below highlight the rapid growth of Allstate’s reliance on independent agency sales for growth since acquiring National General:
This growth has been driven by expanded product offerings, including non-standard auto insurance and the ongoing rollout of standard auto and homeowners insurance. The Custom360℠ product, targeted at middle-market customers, is now available to independent agents in 22 states.
Auto Insurance Performance
Allstate’s auto insurance segment showed marked improvement, with the recorded combined ratio decreasing to 95.9 in Q2 2024, down 12.4 points from the prior year quarter. This improvement reflects higher earned premiums, improved underlying loss experience, and operating efficiencies.
The company’s auto insurance newly issued applications increased by 17% in Q2 2024, driven by higher productivity per exclusive agent and a 92% increase in direct channel applications compared to the prior year.
Homeowners Insurance
Despite elevated catastrophe losses of $1.6 billion in Q2 2024, Allstate’s homeowners insurance segment showed resilience. The underlying combined ratio improved by 4.1 points to 63.5, driven by higher average premiums and favorable non-catastrophe claim frequency.
For the first six months of 2024, the homeowners insurance segment generated an underwriting profit of $189 million, compared to a loss of $1.8 billion in the same period of 2023.
Protection Services and Other Segments
Allstate Protection Plans, part of the company’s Protection Services segment, continued its strong performance, with revenues increasing 21.1% to $483 million in Q2 2024. The Health and Benefits segment also showed growth, with premiums and contract charges increasing by 4.6% to $474 million.
Investment Portfolio Performance
Net investment income rose to $712 million in Q2 2024, a 16.7% increase from the prior-year quarter. This growth reflects the benefits of portfolio repositioning into longer-duration and higher-yielding assets.
Management’s Perspective
“Allstate’s strategy of providing affordable, simple, and connected protection resulted in strong policy growth in National General branded property-liability insurance and Allstate protection plans sold by retailers,” Wilson commented. He emphasized the company’s focus on expanding customer access and increasing sophistication in customer acquisition.
Jess Merten, Chief Financial Officer, added, “Allstate has the financial flexibility, liquidity, and capital resources to continue to accelerate Transformative Growth.”
Looking ahead, Allstate remains committed to its strategy of increasing personal property-liability market share and expanding protection services. The company’s focus on leveraging its brand, customer base, and capabilities positions it well for future growth.
About Allstate
The Allstate Corporation protects people from life’s uncertainties with a broad array of protection for autos, homes, electronic devices, and identity. Products are sold through a variety of distribution channels, including Allstate exclusive agents, independent agents, major retailers, online, and at the workplace. Allstate is widely known for the slogan “You’re in Good Hands with Allstate.”
