Allstate reports strong Q4, 2024 performance; investments cited

Allstate Corporation ended 2024 on a high note, reporting strong financial and strategic performance in the fourth quarter and full year. The company posted $16.5 billion in total revenue for Q4, marking an 11.3% increase from the previous year’s quarter.

Net income applicable to common shareholders surged 30.1% to $1.9 billion, reflecting real improvements in underwriting results across its Property-Liability and Protection Services segments.

For the full year, total revenue reached $64.1 billion, up 12.3% year-over-year, and net income rebounded to $4.6 billion, a sharp turnaround from 2023’s loss. Adjusted net income for the year stood at $4.9 billion, delivering a strong 26.8% return on equity.

“Allstate finished 2024 with another excellent quarter both financially and strategically,” said Tom Wilson, Chair, President, and CEO. “Operational excellence resulted in solid profitability in auto and homeowners insurance and Protection Services. We have successfully navigated market challenges, optimized investments, and positioned ourselves for sustained growth.”

Investment gains, strategic growth drive results

Investment performance was a standout in 2024, with net investment income rising 24.8% to $3.1 billion for the year. This increase was fueled by a strategic shift into higher-yielding fixed income securities, portfolio growth, and strong performance-based results.

“Allstate's investment strategy helped generate meaningful gains, reinforcing our financial strength, “Wilson said. “This diversification in our portfolio, including higher allocations to public equities and private investments, provided steady returns in a volatile market.”

Property-liability delivers solid performance

Allstate’s Property-Liability segment saw earned premiums grow by 10.6% to $13.9 billion in Q4, with underwriting income reaching $1.83 billion, up 38.3% from Q4 2023. The recorded combined ratio improved to 86.9, reflecting disciplined underwriting and premium growth.
Auto insurance premiums earned grew 9.1% year-over-year, driven by rate increases. The segment’s combined ratio improved to 93.5, indicating stronger profitability and a $1.8 billion underwriting gain for the year.

Homeowners insurance posted a 15.3% growth in earned premiums, as policies in force increased and rates were adjusted. The segment achieved $1.3 billion in underwriting income for the year, despite catastrophe losses.

Protection services, health & benefits divestitures

Protection Services revenue reached $889 million in Q4, up 23.6% year-over-year. Allstate Protection Plans and Arity drove this growth, with Protection Plans policies increasing 60% since 2019 to 160 million.

The sale of two Health & Benefits businesses for $3.25 billion is expected to generate a $1.0 billion financial book gain in 2025, streamlining Allstate’s business focus.

Quarterly Snapshot

• Total Q4 revenue: $16.5 billion (+11.3% YoY)
• Q4 net income: $1.9 billion (+30.1% YoY)
• Full-year revenue: $64.1 billion (+12.3% YoY)
• Full-year net income: $4.6 billion (compared to a loss in 2023)
• Adjusted net income: $4.9 billion (26.8% return on equity)
• Property-Liability earned premiums: $13.9 billion (+10.6% YoY)
• Investment income: $3.1 billion (+24.8% YoY)
• Protection Services revenue: $889 million (+23.6% YoY)

Management Perspective

Wilson emphasized that Allstate’s 2024 results reflect strategic execution and operational excellence.

“We strengthened our competitive position, broadened distribution, and expanded our customer base,” he said.

In a call with analysts Wilson said “Improving customer value, requires us to lower our costs and provide differentiated products.”

He added the effort to improve customer access to Allstate’s products contains three components. “Improve all state agent productivity, expand direct sales, and increase independent agent distribution, all of which have been successful.”

Auto and homeowners insurance achieved improved profitability despite catastrophe losses.

The health and benefits business divestiture unlocks $3.25 billion in value, enhancing capital allocation flexibility.

The company expects continued growth in policies in force in 2025, particularly in auto insurance as renewal rates improve.

CFO Jess Merten added that shareholder value remains a priority, highlighting:

• $1.1 billion in dividends paid in 2024
• Total available capital of $21.9 billion
• A focus on capital deployment to fuel growth

By The Numbers

• Property-Liability Combined Ratio (Q4): 86.9 (Improved from 89.5 in Q4 2023)
• Auto Insurance Combined Ratio: 93.5 (Q4), 95.0 (Full Year)
• Homeowners Insurance Combined Ratio: 69.8 (Q4), 90.1 (Full Year)
• Net Investment Income: $833 million in Q4 (+38% YoY)
• Protection Services Policies in Force: 160 million
• Expected Proceeds from Health & Benefits Divestitures: $3.25 billion

Looking Ahead

Allstate expects continued policy growth in 2025, driven by auto insurance renewal rates and strategic expansion of its direct and independent agent distribution channels. Protection Services remains a key growth area, and the company will evaluate whether to retain or divest its Individual Health business.

The financial impact of the California were mitigated by the company’s decision to reduce exposure in the state beginning in 2007, which dropped its market share by more than 50%. Mario Rizzo, Allstate’s president or property/liability said he expects net losses to total 1.1 billion dollars which will be reflected in first quarter 2025 earnings.

With a strengthened balance sheet, improved underwriting performance, and strategic capital management, Allstate executives said the company enters 2025 well-positioned for further growth and profitability.

Doug Bailey is a journalist and freelance writer who lives outside of Boston. He can be reached at [email protected].