Property and casualty insurer, The Allstate Corporation ALL remains well-poised on the back of rising premiums, growing protection services business and streamlining initiatives.
Let’s delve deeper and analyze the factors aiding Allstate.
ALL’s Impressive Earnings Surprise History
Allstate boasts a robust earnings surprise record. It has outpaced estimates in each of the trailing four quarters, the average surprise being 127.1%.
Allstate’s Continued Top-Line Growth
Premium growth has been a key driver of Allstate’s success, supported by a diversified portfolio, strategic acquisitions and disciplined pricing. Net premiums earned have steadily increased — rising 13.9% in 2021, 8.7% in 2022, 10.4% in 2023 and 11.3% in 2024 — demonstrating the strength of its growth strategy.
Strong contributions by the Property-Liability, Protection Services and Allstate Health and Benefits segments should help sustain the top-line growth momentum of Allstate. Peer companies like Palomar Holdings, Inc. PLMR and Arch Capital Group Ltd. ACGL have witnessed premium increases of 54.6% and 17.1% year over year in the fourth quarter of 2024.
Allstate’s Share Repurchase Plan
Allstate recently announced an 8.7% or eight cents hike in its quarterly dividend payout. The hiked dividend will be paid out on April 1, 2025, to shareholders of record as of March 10.
In addition, Allstate has recently approved a new $1.5 billion share repurchase program for outstanding common stock, effective through Sept. 30, 2026. Its previous $5 billion buyback authorization expired on March 31, 2024. Since 1995, the company has repurchased 793 million shares for $43.2 billion, reducing overall common shares outstanding by 634 million, or 70.5%, primarily through buybacks.
ALL’s 2025 View
The company expects total Property-Liability policies in force to increase this year as auto insurance policy renewal rates improve and new business continues to grow.
Allstate’s Streamlining Initiatives
Allstate continues to refine its business strategy by focusing on core strengths and shedding underperforming segments. In 2021, the company sold Allstate Life Insurance Company of New York, shifting its focus to personal property-liability. Through these strategic exits and cost-cutting initiatives, Allstate aims to enhance overall operational efficiency, strengthen underwriting profitability and reinvest savings into technology and product innovation. These efforts have already yielded results, with the property-liability adjusted expense ratio improving 160 basis points year over year in 2024.
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This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
