THE ALLSTATE CORPORATION The Allstate Corporation
Raymond James 2023 Institutional Investors Conference Jess Merten, Chief Financial Officer
3.6.2023
Forward-looking Statements and Non-GAAP Financial Information
This presentation contains forward-looking statements
and information. This presentation also contains non- GAAP measures that are denoted with an asterisk. You can find the reconciliation of those measures to GAAP measures within our most recent earnings release, investor supplement or on our website, www.allstateinvestors.com, under the "Financials" link.
Additional information on factors that could cause results
to differ materially from this presentation is available in the 2022 Form 10-K, Form 10-Q for September 30, 2022, our most recent earnings release, and at the end of these slides. These materials are available on our website, www.allstateinvestors.com, under the "Financials" link.
The Allstate Corporation 2023 | PAGE 1 |
Allstate's Strategy To Increase Shareholder Value
Increase Personal
Property-Liability Market Share
Leveraging Allstate brand,
customer base and capabilities
Expand Protection
Services
Strategic Priorities
- Return auto insurance profitability to historical levels
- Grow Property-Liability market share
- Expand customer base through broad distribution and innovative protection
- Exceptional capital management
Long-term Target Return on Equity(1):
14 - 17%
- Adjusted net income return on Allstate common shareholders' equity; a reconciliation of this non-GAAP measure to return on common shareholders' equity, a GAAP measure, is not possible on a forward-looking basis because it is not possible to provide a reliable forecast for
catastrophes or investment income on limited partnership interests, and prior year reserve reestimates are expected to be zero because | The Allstate Corporation 2023 | PAGE 2 |
reserves are determined based on our best estimate of ultimate losses as of the reporting date | ||
Executing Comprehensive Approach to Restore Auto Margins
Auto insurance profit improvement will be driven by:
Rate | • Pursuing rate actions |
Actions taken and planned:
- Implemented Allstate brand rate increases of 16.9% in 2022
Increases
Expense
Focus
Underwriting Actions
• | Pricing expertise and sophistication | • | Expect to continue to pursue significant rate |
increases in 2023 | |||
• | Achieved approximately half the savings to date | ||
• | Reducing expenses as part of | • Temporarily reduced advertising spend to manage | |
new business volume | |||
Transformative Growth | |||
• Future cost reductions from digitization, sourcing and operating efficiency and distribution model
• Implementing stricter auto new | • Restricting new business in 37 states including CA, |
business underwriting requirements | NY and NJ |
Claims Excellence
- Modifying claims practices to manage loss costs
- Leverage scale with strategic partnerships and parts procurement
- Predictive modeling to enable fair and fast resolution and liability determination early in process
The Allstate Corporation 2023 | PAGE 3 |
Implemented Rate Increases Will Improve Auto Insurance Profitability; Additional Actions Needed to Offset Future Loss Cost Increases
Impact of rate actions already implemented and yet to be fully earned(1) expected to increase future premiums and improve margins
Prospective rate and other actions need to offset future loss cost increases to achieve long-term target
Allstate Protection auto recorded combined ratio
(Illustrative) | |||
110.1 | Future | ||
Loss Costs | |||
~ 4.5 | |||
Mid-90s | |||
~ 10.5 | Rates and | ||
Other | |||
Actions | |||
2022 Combined | PYRR and | Implemented Rates | Target Combined |
Ratio | Catastrophe | Through Q4 2022 | Ratio |
Losses (2)
Removes prior year reserve reestimates and adjusts catastrophe loss ratio to 5- year historical average
- Reflects estimated earned premium from rates already implemented and yet to be fully earned, including ~9.5 points in 2023 and ~1.0 point in 2024
- Adjusts combined ratio for impact of prior year reserve reestimates in 2022 and normalizes impact of catastrophe losses to average of the last 5 years
The Allstate Corporation 2023 | PAGE 4 |
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Disclaimer
The Allstate Corporation published this content on 06 March 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 06 March 2023 13:09:01 UTC.
