“Transformative Growth” program drives profit jump at Allstate
Allstate reported third quarter 2025 net income of $3.7 billion, up from $1.2 billion a year earlier, with adjusted net income of $3 billion or $11.17 per share. Total revenues rose 3.8% to $17.3 billion, and adjusted return on equity over the past twelve months reached 34.7%.
The Property Liability business did most of the lifting. Earned premiums grew 6.1% to $14.5 billion, while underwriting income jumped to $2.9 billion from $495 million. The segment’s combined ratio improved to 80.1 from 96.4, helped by lower catastrophe losses and non catastrophe reserve releases. Cat losses fell to $558 million from $1.7 billion in the prior year quarter.
Auto insurance continues to benefit from prior rate actions and more disciplined underwriting. Auto earned premiums grew 3.5%, and the recorded combined ratio improved to 82 from 94.8. Allstate released $480 million of prior year non catastrophe auto reserves, equal to 5 points on the combined ratio, reflecting favorable severity in injury and physical damage claims. New auto business increased 23%, while overall auto policies in force grew 1.3% as higher new business was offset by lower retention and runoff of legacy brands.
Homeowners delivered an outsized contribution. Earned premiums rose 14%, underwriting income climbed from $60 million to $1.1 billion, and the combined ratio dropped to 71.5 from 98.2. Catastrophe losses in homeowners fell to $479 million, down $752 million from the prior year, helped by fewer and less severe events and the absence of hurricanes. The underlying homeowners combined ratio improved to 59.8, supported by higher average premiums and favorable non catastrophe frequency.
Total policies in force across the enterprise increased 3.8% to 209.5 million, driven by growth in Protection Plans and personal lines auto and homeowners, while commercial policies declined 26.9%. Protection Services revenues rose 9.7% to $902 million, led by international Protection Plans, although segment adjusted net income slipped to $46 million due to higher expenses at Arity and increased claims in Protection Plans.
On capital, Allstate reported $22.5 billion in estimated statutory surplus and $5.5 billion of assets at the holding company. The insurer returned $624 million to common shareholders in the quarter through $360 million of share repurchases and $264 million of dividends, and $1.8 billion over the last twelve months. Management ties the performance to its “Transformative Growth” program, which includes new personal lines products, broader distribution, and a technology platform designed to support more extensive use of generative and agentic AI in underwriting and operations.
“Strong operating performance resulted in an excellent adjusted net income return on equity* of 34.7% for the latest 12 months. Allstate’s capital position is also exceptionally strong, reflecting increased income and the sale of the Employer Voluntary Benefits and Group Health businesses earlier in the year. Total estimated statutory surplus in the insurance companies increased to $22.5 billion and $5.5 billion of assets are held at the holding company. Allstate returned $624 million to common shareholders through a combination of $360 million in share repurchases and $264 million in common shareholder dividends in the third quarter. Total cash returned to shareholders was $1.8 billion over the latest twelve months which is 3.5% of the average market value of common equity. Allstate remains focused on deploying capital to profitably grow the business, generate investment returns and create value for shareholders.” – John Dugenske, Interim Chief Financial Officer and President, Investments and Corporate Strategy.
“Allstate delivered excellent operating results in the third quarter. Revenues increased to $17.3 billion, a 3.8% increase over the prior year. Policies in force increased to 209.5 million due to continued growth in Protection Plans and increased homeowners and auto insurance policies in force. Net income was $3.7 billion, driven by strong operating performance across the Property-Liability business, modest catastrophe losses, higher investment results and favorable insurance reserve releases. Adjusted net income was $3.0 billion, or $11.17 per diluted share.
The Transformative Growth strategy is increasing Property-Liability market share and expanding protection offerings. Property-Liability market share increased in non-standard auto and homeowners insurance and in the independent agent channel. Total auto insurance policies in force increased by 1.3%, 2.8% for active brands, versus the prior year. The rollout of new property-liability products, increased advertising, broad distribution and expanded retention programs are expected to drive continued growth. Protection Plans continues to grow internationally with policies in force and revenues increasing by 4.2% and 14.8% respectively over the prior year. The Transformative Growth technology platform also supports accelerated deployment of generative and agentic artificial intelligence to lower costs and reimagine customer value. Allstate will continue to create shareholder value by innovating, embracing change and being the best protection provider.” – Allstate CEO Tom Wilson.
