Allstate Announces Estimated Fourth Quarter 2022 Results

NORTHBROOK, Ill., January 18, 2023 – The Allstate Corporation (NYSE: ALL) in the present day introduced preliminary outcomes for the fourth quarter of 2022, with an estimated web loss between $285 million and $335 million and estimated adjusted web loss* between $335 million and $385 million.

 ^* Measures used on this launch that aren’t primarily based on accounting rules usually accepted within the United States of America (“non-GAAP”) are denoted with an asterisk and outlined and reconciled to essentially the most straight comparable GAAP measure within the “Definitions of Non-GAAP Measures” part of this doc.

Property-Liability Premiums

• Premiums written elevated 11.4% from fourth quarter of 2021 to $11.5 billion pushed primarily by larger common auto and residential insurance coverage premiums.
• Compared to fourth quarter of 2021, auto premiums written elevated 13.3% to $7.8 billion and premiums earned elevated 10.3% to $7.7 billion, reflecting a 14.4% enhance in Allstate model common premiums.
• Allstate continued to implement vital auto insurance coverage price actions within the second half of 2022 in response to elevated loss prices. Our applied auto price exhibit has been posted on allstateinvestors.com.
  • During the month of December, the Allstate model applied auto price will increase of 10.6% throughout 19 places, leading to complete model premium impression of 1.9%.
  • Total price will increase in 2022 for Allstate model auto insurance coverage are anticipated to boost annualized written premiums by roughly 16.9% or $4.1 billion.
• Compared to fourth quarter of 2021, owners premiums written elevated 9.3% to $2.9 billion and premiums earned elevated 9.4% to $2.8 billion reflecting a 12.0% enhance in Allstate model common premiums primarily as a result of will increase in insured dwelling valuations and price will increase.

Property-Liability Underwriting Results

Estimated fourth quarter and full yr recorded mixed ratios:

• The fourth quarter of 2022 mixed ratio of 109.1 was adversely impacted by will increase in declare reserves for the primary three quarters of 2022, prior yr declare reserves additions, and prices related to Winter Storm Elliott.
• The private auto insurance coverage mixed ratio of 112.6 included $410 million (5.3 factors) of reserve additions for the primary three quarters of 2022, and $180 million (2.3 factors) of incurred prior yr claims reserves. Personal auto insurance coverage declare frequency has continued to extend, however stays under 2019 ranges.
• Unfavorable prior yr reserve reestimates totaled $282 million, excluding catastrophes, within the fourth quarter.
• Approximately $100 million associated to elevated severity in industrial auto insurance coverage primarily from shared economic system and states which are being exited.
• The remaining $180 million primarily associated to a rise in private auto insurance coverage declare frequency attributable to prior accident years.

Catastrophe Losses

• Catastrophe losses for the fourth quarter are estimated to be $779 million, pre-tax, together with losses within the month of December of $593 million, pre-tax.
• Catastrophe losses for December occasions had been estimated at $616 million, partially offset by favorable reserve reestimates for prior occasions.
  • Winter Storm Elliott accounted for about 80% or $478 million of December’s estimated disaster losses.

Investment Results

• Net funding revenue within the fourth quarter of 2022 is estimated at $557 million, together with performance-based funding revenue estimated at $147 million.
• Net positive factors on investments and derivatives for the fourth quarter of 2022 are estimated to be $95 million, primarily as a result of elevated valuation on fairness investments, which is partially offset by losses on gross sales of fastened revenue securities.
• Proactive portfolio actions to cut back inflation and financial danger by shortening fastened revenue period and lowering fairness publicity mitigated portfolio losses by roughly $2 billion this yr. In the fourth quarter we eliminated roughly half of our period shortening rate of interest derivatives leading to a modest enhance to fastened revenue period. 
• Total return on the $61.8 billion portfolio was 2.5% within the fourth quarter of 2022 and (4.0)% for the yr ended December 31, 2022, and compares favorably to full yr 2022 efficiency of the S&P 500 of (18.1)% and the Bloomberg Intermediate Bond return of (9.4)%.

Capital Management

• We proceed to count on the share repurchase program to be accomplished by September 30, 2023.
• Holding firm belongings totaled roughly $4.0 billion as of December 31, 2022.

The firm plans to file a present report on Form 8-Ok with the Securities and Exchange Commission saying quarterly outcomes after shut of market on Wednesday, February 1.

Financial data, together with materials bulletins about The Allstate Corporation, is routinely posted on www.allstateinvestors.com.

Forward-Looking Statements

This information launch incorporates “forward-looking statements” that anticipate outcomes primarily based on our estimates, assumptions and plans which are topic to uncertainty. These statements are made topic to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements don’t relate strictly to historic or present info and could also be recognized by their use of phrases like “plans,” “seeks,” “expects,” “will,” “should,” “anticipates,” “estimates,” “intends,” “believes,” “likely,” “targets” and different phrases with comparable meanings. We consider these statements are primarily based on cheap estimates, assumptions and plans. However, if the estimates, assumptions or plans underlying the forward-looking statements show inaccurate or if different dangers or uncertainties come up, precise outcomes might differ materially from these communicated in these forward-looking statements. Factors that would trigger precise outcomes to vary materially from these expressed in, or implied by, the forward-looking statements could also be present in our filings with the U.S. Securities and Exchange Commission, together with the “Risk Factors” part in our most up-to-date annual report on Form 10-Ok. Forward-looking statements are as of the date on which they’re made, and we assume no obligation to replace or revise any forward-looking assertion.

Definition of Non-GAAP Measure

We consider that buyers’ understanding of Allstate’s efficiency is enhanced by our disclosure of the next non-GAAP measure. Our methodology for calculating this measure might differ from these utilized by different corporations and due to this fact comparability could also be restricted.

Adjusted web revenue is web revenue (loss) relevant to frequent shareholders, excluding:

• Net positive factors and losses on investments and derivatives
  • Pension and different postretirement remeasurement positive factors and losses
• Business mixture bills and the amortization or impairment of bought intangibles
• Income or loss from discontinued operations
• Gain or loss on disposition
• Adjustments for different vital non-recurring, rare or uncommon objects, when (a) the character of the cost or acquire is such that it’s moderately unlikely to recur inside two years, or (b) there was no comparable cost or acquire inside the prior two years
• Related revenue tax expense or good thing about this stuff

Net revenue (loss) relevant to frequent shareholders is the GAAP measure that’s most straight similar to adjusted web revenue.

We use adjusted web revenue as an essential measure to judge our outcomes of operations. We consider that the measure supplies buyers with a helpful measure of the Company’s ongoing efficiency as a result of it reveals tendencies in our insurance coverage and monetary providers enterprise which may be obscured by the online impact of web positive factors and losses on investments and derivatives, pension and different postretirement remeasurement positive factors and losses, enterprise mixture bills and the amortization or impairment of bought intangibles, revenue or loss from discontinued operations, acquire or loss on disposition and changes for different vital non-recurring, rare or uncommon objects and the associated tax expense or good thing about this stuff. Net positive factors and losses on investments and derivatives, and pension and different postretirement remeasurement positive factors and losses might range considerably between intervals and are usually pushed by enterprise choices and exterior financial developments comparable to capital market circumstances, the timing of which is unrelated to the insurance coverage underwriting course of. Business mixture bills, revenue or loss from discontinued operations and acquire or loss on disposition are excluded as a result of they’re non-recurring in nature and the amortization or impairment of bought intangibles is excluded as a result of it pertains to the acquisition buy value and isn’t indicative of our underlying enterprise outcomes or tendencies. Non-recurring objects are excluded as a result of, by their nature, they aren’t indicative of our enterprise or financial tendencies. Accordingly, adjusted web revenue excludes the impact of things that are typically extremely variable from interval to interval and highlights the outcomes from ongoing operations and the underlying profitability of our enterprise. A byproduct of excluding this stuff to find out adjusted web revenue is the transparency and understanding of their significance to web revenue variability and profitability whereas recognizing these or comparable objects might recur in subsequent intervals. Adjusted web revenue is utilized by administration together with the opposite parts of web revenue (loss) relevant to frequent shareholders to evaluate our efficiency. We use adjusted measures of adjusted web revenue in incentive compensation. Therefore, we consider it’s helpful for buyers to judge web revenue (loss) relevant to frequent shareholders, adjusted web revenue and their parts individually and within the combination when reviewing and evaluating our efficiency. We notice that buyers, monetary analysts, monetary and enterprise media organizations and score businesses make the most of adjusted web revenue ends in their analysis of our and our business’s monetary efficiency and of their funding choices, suggestions and communications because it represents a dependable, consultant and constant measurement of the business and the Company and administration’s efficiency. We notice that the value to earnings a number of generally utilized by insurance coverage buyers as a forward-looking valuation method makes use of adjusted web revenue because the denominator. Adjusted web revenue shouldn’t be thought-about an alternative choice to web revenue (loss) relevant to frequent shareholders and doesn’t replicate the general profitability of our enterprise.

The following desk reconciles web revenue (loss) relevant to frequent shareholders and adjusted web revenue. Taxes on changes to reconcile web revenue (loss) relevant to frequent shareholders and adjusted web revenue usually use a 21% efficient tax price.

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