The Allstate Corporation (ALL) 6 May 202020 Q1 Earnings call transcript

Ladies and gentlemen, thank you for standing by, and welcome to The Allstate First Quarter 2020 Earnings Conference Call. [Operator Instructions]. And now I'd like to introduce your host for today's program, Mark Nogal, Head of Investor Relations. Please go ahead, sir.

Thank you, Jonathan. everyone, First welcome, Conference XXXX and Call. morning, to Quarter Allstate's Earnings Good we question-and-answer have prepared will After remarks, a session.

posted filed Yesterday, following news XX-Q our supplement, our on our we market, along website and reinsurance our at update the close release of and the today's with presentation, allstateinvestors.com. issued investor

to perspective response pandemic. coronavirus to these team and results management Our provide further is the here on context our on

information the reconciliations presentation, for As potential the our from will may refer slide noted XX-K XXXX please on on investor measures are the differ to so contain statements operations. for and risks. which release and of there forward-looking throughout in for first news non-GAAP materially and public Allstate's other statements, our discussion supplement these Allstate's results documents

turn I'll it Tom. to over now And

for you us joining you from place. in are Thank morning. Good sheltered wherever

Allstate's coronavirus right to jump on Let's response with X. Slide in the pandemic

years, to and Allstate for customers overcome helping catastrophes XX customers learned and put has we've quickly decisively, first. been act

As Payback program the a insurance medicine expanded of given the purposes. increased other personal Shelter-in-Place payment use offered to U.S. than residents, deliver the year challenges. million. $XXX for all experiencing food, created more plans financial vehicles Identity to industry customers. Special rest We to was customers result, Auto in exposure for for the being cybercrime. of commercial Protection free a goods used helping and coverage we've are Allstate cover for being is of led the to

Assist, as executed. agents. customers, our We QuickFoto were our and and expanded. Virtual employees leveraged better protect continuity capabilities innovations, Virtual support sales to and plans such were Claim digital Business

capital of reduce time, February, public agents a more support is billion reduce and In to capital in because we by But And this share strong will same economic financially given to out Allstate equity good and market back with the of to impact cover Mario remotely, employees. as we the downturn number working we than March. portfolio. later, Allstate and reduced the the turned the the and program capital amount liquidity. holdings repurchase XX% practices us timing position. to maintain $X agents our our to strong be of significant altered enabled will At investment it moved business Employees our in

For our demand deal on X. Slide money help an That's we $X which top grant year, communities, Allstate and employees' the pandemic every Foundation announced for to the of Move the million. substantial normally double is need. Allstate additional to with

base touch with strategy. Allstate's Let's

our share side increase other five. to all has X-part know, components: leads our shown on and of Property-Liability This around made strategy page, this the annual good you right personal progress is we market priorities, two As into operating protection and X which strategy expand businesses.

If strong you declined had Slide instead prior billion results financial $XX.X and of quarter. in year operating prior move year. X.X% X, due in losses the to to first quarter capital the capital gains of revenues the Allstate Total for

increase X.X% the a revenues table. you X%, the see Property-Liability premiums, can the in from exclude losses, you capital driven of impact realized increased If insurance by which

Adjusted Net share, net which to the adjusted with more Returns reflecting pension offset were prior in XX.X%. was billion the than lower of income to losses. significantly or the return the of $XXX on above catastrophe prior middle year, capital $X.X losses increased $X.XX and postretirement was year charges the million underwriting income, table, by and quarter's declined benefits. in equity was income, quarter diluted per for shown income improving excellent net

more in the will discuss now detail. Mario first results quarter

Thanks, Tom, and everybody. good morning,

of of recorded of prior combined with Starting and left, policy $X.XX continued, the ratio to income the the and growth strong quarter billion X with our the in discuss excellent quarter the performance a than Underwriting was premium Slide higher XX.X. $XXX million on Property-Liability to chart year with segment. go underlying first profitability. Let's

auto prior in premiums in driven. was to from year lower increased improvement the down quarter, frequency lower the gross by was prior to quarter. The frequency accident miles property driven the catastrophe Auto year several accident factors, decline damage frequency significantly and XX% earned compared including lower with losses,

offset For social property XX% severity the as and the by driven gross Shelter-in-Place Payback distancing frequency were as implementing expense. the measures. March, to month of began These declined states year, miles damage compared significantly, dropped benefits prior partially increased

on quarter, recorded our million we Shelter-in-Place expense Property-Liability increased over $XXX the specifically the expense the by shows X.X chart right the The points. first which in highlights expense Payback ratio time ratio and

quarter, this customer components ratio to the compared reflecting one the continued proposition, of enhancing Transformative of the key by expense impact, year prior on progress value point Growth the which improved Excluding Plan. is X our

for Let's performance first investment go to Slide highlights X, the which quarter.

by As you'd the reflect expect, our volatility portfolio market caused the of coronavirus. quarter first investment the results impact

page, middle in the return quarter lower was in largely negative total first shown the of the table As valuation. a the reflecting X.X%, for portfolio

income and reduced the significant in valuation more credit by X.X%. further return than Lower decreased interest-bearing spreads treasury rates widening supported decline offset of the While returns X%. prices, decline another equity fixed by valuations that benefit,

million performance-based the million $XXX shows a first loss quarter, than for the investment as in in chart million year. results The the net recorded $XXX prior income shown gray. quarter, in lower was We $XXX of of which

on a the As you on may our X-quarter recall, partnership booked typically limited lag. is income

XXXX sponsored statement related financial fourth million. to income Performance-based was $XXX quarter

ended. of would write-downs equity investments. X our recorded also private We In underperforming this quarter, million on typical process a where $XXX have is

disruption, we held XX market enough statement rather pricing, within on financial information which given publicly limited economic had March solely reduced relying than December of $XX we traded updating This of to volatility sponsored where million. to also XX. income make limited partnership investments value the interest, in market estimates informed their as investment included However, recognized partnership declines and by

increases X generated of $XXX believe the are in But in valuation of of loss better $XXX performance-based is Because current uncertain. exhibit idiosyncratic quarter We million sponsor's this investments return, indication the future these unrealized losses gains value. fourth in and The total statements. we and a million financial reported approach also items did these QX. risk quarter utilizing not sum recognize

from quarter the reflecting shown by in $XX the was portfolio, lower prior blue, market-based impact lower rates. million, than year of the Income reinvestment

We expect this the below reinvestment rates trend remain portfolio extent average to continue yield. to interest-bearing

and proactive X positioning and to disciplined Let's to of Slide turn has profile, portfolio approach our crisis. to mitigated return a the the our We the take positioning. discuss portfolio managing risk investment impact and current

returns income liquidity. duration We of chart the the which both -- of was Property-Liability of on rate portfolio As extended with left in you last the largely which high-quality portfolio securities our in substantial the environment. income fixed lower can page, is the the supported made see year, has and up

enhanced We these sectors provide are have exposures, To in we disclosures. closely. transparency to Form conservatively susceptible the more pandemic positioned exposures into those XX-Q continue and monitor our to

have long-dated performance-based XX% and We XX% from which liabilities investments capital. at securities, XXXX, to also a equity backed allocation year-end and public down

of level were the As X,XXX. of equity see the in the S&P executed on public the chart the exposure high-quality through equivalent fixed XXX These average trades compared with March can equity reduced income. February, securities in billion, you at to primarily proceeds X,XXX at an invested price our $X in month of bottom end by sale right, we

return conditions a continue framework to We employ disciplined evolve. as and the risk proactively portfolio economic to

year million costs loss quarter the Slide had $X increased let's for an first Life, and due on review generated quarter, Now operating bottom primarily investments Benefits shown net $XX expenses, results results compared driven first discussed to the $XXX million net due year turn technology Benefits' driven shown Annuities on higher amortization. the and and lower the decline the left, X was Allstate higher costs The to the operating the was of $X first to income increase performance-based we million right, in segment. income prior and an in adjusted earlier. Life, of to quarter, prior quarter, Allstate adjusted of in in of the investment Annuities, by below $XX the DAC million quarter. by net Allstate adjusted expenses. million to

Coronavirus developments quarter, to the claims did to in appear continue first businesses we monitor impact not any these of closely. materially though

to and improved million the Roadside XX.X% grew $XX million quarter. net the $XXX $XX profitability of increase Slide reflecting our first impact growth increase the The compared growth Plans Services. to of This of Allstate with improved of largely is Allstate income the an Businesses number by in driven customers policy to to Protection $XXX.X in gains protected of Businesses. turn due Service continued Now in-force to increase Service excluding the about Protection XXXX, let's first quarter, talk the Allstate first losses, to quarter million. million Adjusted Revenues, and of at X in XX.X% to Plans. realized to

position. attractive XX returns capital Slide Allstate's highlights strong and

the equity, Allstate's and of model, enables capital financial shareholders' market led diversified a effectively coronavirus liquidity strong in the through manage capacity us business impact this and substantial and While earnings to pandemic. drove instability decline to

billion We have securities saleable and highly in $X.X company week. of deployable holding X assets billion liquid $X.X within parent

$XXX of generate to strong $X XXXX. quarter combination first common end is while through capital in XX.X% and of continue a as million billion common be million to of plan the on current with We share return the of adjusted returning $XXX income net in returns repurchases our continued to quarter share by on the of We which repurchases the an dividends. equity to completed stock million expected end in $XXX under program, shareholders

insights over discuss the and how and data on turn auto to Glenn we're I'll to it leveraging make decisions. now insurance to impact And coronavirus

Mario, everyone. and morning, Thanks, good

which in auto Profit impacted impacts XX, and potential Slide reduction has will driven, which miles looks loss been, by at overall the on will costs. of lower to go Let's be, coronavirus insurance. a

it significant, to and as this While several there been economy over begins reopen, are offsets. has decline time will the

economic drivers prices We'll payment could who by impact loss costs the likely pandemic of growth. severity debt to has auto is required basis, can below manufacturers, lower road chain parts bad repair If parts increased will disrupted limit on from customers be per rate the prior premium to some driving chosen are also supply global increases which to increase terms. claim. extended raised additional reduction On continue take growth. the if The costs. year, average this incur lead have or First, will speeds, increased and slowdown longer-term the auto a also

our have economic could on impact levels. impact positive shopping a seen conditions side, business vehicle reduced and payment On in an and we're to a new grow Milewise, and competitive profitability profitably on Shelter-in-Place in business, be enable of will on may which as the trends responses. these positioned basis interest manage since position can new lower mile. latter The insurance important retention. is continue of And the sales be well with customer us will and we've to charges ahead precise both favorable unclear increase by telematics, increased Drivewise Getting to customers' the we market-by-market but

to now Slide XX. Let's move

but As where in Telematics-based how access much to drive a of to on much someone data, some things customer they set, this allows drives, only factor data Arity, drive. have how not a broader from insights of slide. which we is shown you like our and pricing they

enable combined do Our with us us judgments set a individual broader market. telematics by to when to which for customers, enables market products that make data, better of

For example, that then. then the sharply billion increase and shows slow declined through miles upper-left trips from X.X based since April, began in on a graph mid-March February driven

between the see those urban did not there's You while the mid-March. driving In which about and left, are are orders about that drivers of bigger had to by at can areas than graph driving. declined that drivers decline by in bars actually before that declined XX% the can difference top stay-at-home had all, driving which also about the shows bottom-left The a areas right, the upper at at are also XX%, they some the bottom, a those of more chart, XX%. see you rural states

Arity score, higher is a score, a driving the provides The also measure the risk. Drivesight the which risk. lower of

The of which cars despite and that As the this net a processes drivers has you faster. of the can Allstate to are changing some that correlates road, data data see fewer on to the has increased risk the all on the shows to proactively mean operating environment. adjust bottom business right, is driving

I'll now pass Tom. it back to

to have to people to move There And much Who immediate Payback want from happens need to where course, back move still can possibilities to want environment, decide To Shelter-in-Place we've how investment are the so into will as a past you home many but work? this there's to also look people is creating the Glenn. What to we answer walk. the actions. In into we of emergency right? offices? have where And you type intermediate-term moving you, Will nobody inaction. discuss market? XX, frozen to you look knows. obviously you moved of of the you the implementing work Thank of as step, Slide many into not to to future, get that clarity, to commute

what used see we alternative assumptions. under scenario to the future look planning So path like

This kind in Dutch came and Shell out of 'XXs, works the Royal this. like of it

that to be from X change. the the depth the vertical will and axis. of disruptive of top In things severity page, this bottom shown downturn we which which is the on find and case, economic primary shown the of health You drivers is length that of the of the the crisis, at box on severe, selected the

outcomes. You a X scenarios of possible represent then create to range

we've GDP sigh best in slide, over disrupted, quickly is relatively but relief. as in the long greater right, from over Depression, us and it a couple decline of the years. to the is right, labeled the lower government of enables crisis back by In care the next upper repeated see last in action. bounce than with can economy monetary the them. you The the is support case, of the government the is worst As Great because health The with virus. the case health distracted doesn't lockdowns impact but fiscal It significant reflects

what on it should consumer similar actions are, which For consequences This for ultimate then, will and also do each ability outcomes, There which what do. our to actions we take, the enables to of which each scenario, accidents help forecast what a look auto of to the in be. do, inform range And returns. road even not shown us outcome XX. scenario helps know insurance the decide we us what at though not we're establish signs determine It improves scenarios, is including to headed. we course, Slide helps direction investment behavior,

revenue outcomes, rates. In because interest increased many accidents, of auto of incomes, deteriorating the growth lower constrained fewer unemployment or is

Growth in As insurance in which Transformative as well, technologies, Plan, utilization you customer of new will a of result, markets new scenarios. the we costs will are improve auto our products. investment know with be volatile increased many accelerating And lower value these more

to like and behavior second Digital to is with things Allstate of who new a Zoom or Skype we're and a result, As provide to Many expanding can strategic can Enterprise. the to have focus from also one quickly. pretty asset part knew so the of of is you evaluating where in is strong offerings this likely result, array their our we technologies headed, broader our insurance on strategy, Consumer have maintain of your include we're allocation. or adopt meetings us As is found breadth going many commitment to Like And that a and your auto day? Teams change phone quality identity. protection the protection. a to telematics Integrated

open line for we'll the Now questions.

[Operator Instructions].

from of Wells Elyse Greenspan Our first line Fargo. the from question comes

think -- frequency. My is on on just first is question I

some the and you started on bounce said drop provided guys driven, back woes. to it I the COVID good disclosure believe miles from You in pretty

we're thinking March? to April saw about do So date, QX, later of May as you might towards of kind period about see we that the you compared so stages to frequency over and the benefit what think that how

then people it Glenn. it more they'll start toss and Well, start, Elyse, in me more, -- accidents. get obviously, is as let over drive to to

back the that office know this to you to going even many and predict Where will will up go site. people how at when back up. to hard point because end So to office people go the don't we expect it really is head to are

to that pretty of we've remote built we've more. I to probably XX% we it's the companies, already infrastructure think Allstate, that found At clear other As talk do we workforce. our me to this. do We before remote people can about had

it's and want number you work, where have hard anything out. to So that? from do that driving to people to Glenn, would obviously but predict exactly to add to fewer comes lead you the

Not too much.

there, include, Tom -- you the some would I other got demand. it, Tom go some in if think, of you've side unknowns pent-up which said, as on

think about on some get who up fits and trips, Tom and, to you little postponed who they're want potential postponed it, some with to frequency, long-lasting, also some out sort a of because visiting bit downward catch people as bubbles there so but have people you described, If and of could want relatives starts stir-crazy. pressure driving on the therefore, where short-term

you program. helpful. That's then expect your buybacks. you Okay. to have know And said question on buyback second my is I maintain guys

program, the even some I we about XXXX, Would about through of think kind we it slowdown end here? just be of the position, completion evenly through think capital the we there expect from believe kind work pace of that the XXXX? an you way that buybacks given to should as of So over couple of quarters? runs of be Or next as maintained our

that Mario, take you question? will

Sure. questions. Elyse, for the thanks

start, for our So really company the capital feel $X.X of performing into our companies billion I billion well. we year. and out readily is $X.X company liquidity, I'd the are Elyse, place insurance the assets, businesses And $X.X our of good available holding billion of dividend capacity holding of position, think liquidity really about

next shares So we year how of in would expect a I I'd time just just to to lot back buy Board authorized. but over the we've to continue we say expect by program terms execute end flexibility think like complete the we of of period. got that And it, our

Peters comes Raymond of line Greg the from next James. Our question from

comment fits and -- you prepared on with you Allstate will color it talk more underlying provided about platform that that And ratio the us just in expense maybe expense question First ratio, your Agency's Can the part basic a And of LSPs? sequential about in what talk on services on decline be remarks. the that? your integrated Can give is how rollout? maybe you improvement.

you Glenn, expenses? will And take Mario, don't take you why agent? the

Yes, sure.

part expense look say in So the year-over-year in to the when first our acquisition operating deconstruct XX-XX, you ratio when decline And thing quite continues growth expense be and came a the of I'd it's X where from, And you improvement our of not quarter, is, sequential saw costs. at between cost point transformative a costs you ratio. reducing the about kind strategy. core

core two reducing continue and we're are position And still those both. obviously, our on be part a focused be to going growth competitive transformative cost in structure, to going us. of our saw And to those costs parts improvement and core to we take forward growth for enhance of

the things focused also the to on like a going it continue turn to we're need and Glenn over We're continuing part time. costs going transformative I'll to in marketing. bit for of invest reduce invest about But growth, in things agency to over we to it. technology little talk to forward

Yes. Greg, thanks the for question.

in you there, sales XX% being spite In count, about the a number. service. count professionals, at with terms they sales That's operative on their and licensed been sales, of look the agent historic you word of integrated question LSP part and spend on service. of the about in word hit your When of XX% it time only on

of work both not a they're things increasing through lot is And that time, work. self-service percentage we're as to committed that so selling much that one of and integrated they're of taking time over having well transactional service, the as out, the capabilities as do of to transactional

we'll probably part over that growth transformative we're doing. change overall that of see time. really work And our So that's

growing agency on count, of really the terms the quality terms agency and of in focused And force. with growth in we're

of changed on grow to expectations coming we with variable we production we a little I because agents in want part that agency So compensation their business. are from and invest increased for And this moved where year, everybody it. knew force new, our also bit, grow to into compensation looking renewal really those we think to

on the portfolio. follow-up investment -- next The my is question

you observer, portfolio? of a think equities on to made look the the public sell I permanent the stunning. assessment partnerships, reassessments? basis? in as adjustments your this what LPs that acknowledge approach by first -- -- decision as was change February. or valuation XXX% your adjacent the guess be Or include have your quarterly at But to all, It's is for the an quarter did adjustments that and portfolio the your you I brilliance limited First Or covered would a question percentage do an it in LPs, results to on of of to all of valuation I the to wasn't the of other the

be risk equity. was Greg, comment for on basis. to thank you and I return on done want It clear. a the just

-- have capital we decided So we looked it. we up We good on those that amount at of and as on capital up prospective just return a at equity. the had the looked wasn't the on outlook, to on

our you our doing of processes good by metrics obviously it by but wasn't processes frequency changing that coming. We the we and state the whether that's invest terms shows the that -- on like way and accounting or investment? to was crash for business of driven you them, question market Mario, business knew also it state. will this was talking pricing But in performance-based having take what benefit on stick timing, metric it were you the Glenn are about was how

Sure.

past, in start on where lag as performance-based a I'd on guess Greg, we partner financial the I is, statements end. the quarter the as prior income X-quarter based said we've of generally, So record

that's year-end in typically example, approach how for the relied quarter, accounting. we first we So And financial the would partner statements. on would have

need we accounting material did that market we when that's take event policy that to information account. into our what that and have However, this informed available And to does information require quarter. we a make estimates, occurs,

of market in the the valuation -- partnership in event year-end adjustments, were holdings We a there in statement. the then levels, two public equity because that's some reflected we that the was securities increases the accounting on in and financial XX the that marking material did March holdings to unrealized policy part the of So quarter. made because the suppressing

extent the where believe normal -- to was four $XXX we piece And our we to in impair quarter do other on a was The just And that million every through process need go that. we holdings. the specific holding, we watchlist holding. worth the

So process absent quarter, to make disruption this go would But what had we'll back our let's avoid that estimates additional do be. we market in that's we disruption exactly And could say, event did. policy we one because first our required what based that was good the this if we event, another hopefully, quarter, typical there that. we on, should information

question Piper comes next Our from Sandler. the line of from Paul Newsome

talk or in Plan. I you're you us You Growth was will hoping where on could will a give it. Transformative of acceleration accelerating color bit some little about the the mentioned thinking come What change?

idea capabilities enable Paul. lower to our the new the Esurance it's our The use on to expand multifaceted using products And and to access. putting reduce that to is increase launch right? together brand direct structure. Thanks, cost technology there. us the a customer to It's was to Obviously, program, and structure, under -- Allstate it's cost

have the Esurance Allstate progress So great. about this Allstate the And path Glenn operating -- can a the been under we're to and year. direct down the headed on on talk the brand that's start basis and brand,

particularly we building doing accelerate the Drivewise. will and things the some cost also on do on it like reduction, some work technologies, new of accelerate and it reduction, looks we're the Milewise cost On it will as stuff of

Payback large Shelter-in-Place attention of the about well. actions I with People "Oh, efforts product us few that. will the as saying, So do what didn't want harder it's paying from The know today the mile." of or competitors. Before, now our new and we the mile, by I when are one that to push you by pay maybe do companies on sold really think, insurance people the we're,

to be want people's in as you that Esurance to And pick do as the first it Esurance since the growth. up talk mind relates maybe on brand part? quarter Allstate transformative about may Glenn, the and well growth

Yes.

growth the part increased quarter. with So take on the was good, I'll I'll piece, a business as the Esurance really X-part to year. transformation. your and do We to latter as new pricing the hit and Esurance result. we're gotten far last Because that the was that brand was retention and trends towards and of profitability into and doing the that a changes little actually what is we've in start some as line had happens loss growth the first transformative We with of because January. end story. having -- with bit your actions. typically what as then a the go happens. growth needed of in It nothing take did, into which the the year is And underwriting But a happening you very in

of Now once worked doing were kind off those when pretty the actually March We reinvested in fell some February middle we early marketing. prices have quoting their through, in table way well and the of March.

nice windows start March, there and in early February, the slow to for few a January, momentum in So these fell then like really some X off of sort you everything a table have weeks.

going Fortunately, from to has actually indices, external as seen returned shopping forward. expected and accelerate we've is

how terms some it of got good moves we've So optimism as to Esurance growth. forward there in

the we're transformative In We together improve Allstate both the with Adkisson, our improve increase we in as took our Jonathan and the growth brand. been President of way who's now online flow. head of over our process going, and direct where terms such has under Esurance teams of working bringing and sales a or it business, that quote

leads. on and come in to to as and online basis. brand and pivot marketing we is What And process in well so for are go as happening on direct the with improvement our Allstate as It's a branding brand those still a agency-driven work both how invest continuous a effort. is our already market day-by-day to

about like the it similar also could relatedly, did have Somewhat X you with periods happened a talk sales the Did kind different bit what retention? a little of during quarter?

you will take Glenn, that?

really Retention it's because of would renewed. kind that -- no. includes of no when It lagging a say there's would at they coronavirus metric. the from yet have I cancellations Retention, Sure. measuring impact point midterm you're

on standpoint. we still that retention in coronavirus, customers. but And fairly impact, that fairly the XX% running good a extent about retention to of We good We're go-forward well are. unfavorable still see a standpoint. from our retention down year-over-year, see where from for do pretty or we'll we auto a whether a off and in So favorable work space I high to a to hard are feel watermark, we basis continue from think

areas our we were should, to can respond response something to and us that from think continue retention standpoint, coronavirus customers and, the for and help to multiple quick a I it's very at. hopefully work we

of from Motemaden the Evercore. next line from David comes Our question

about how thinking this? you investments. mentioned mentioned there a worth more LPs allocation of up at XX% and if the for capital -- you guess to just to guess, of are me it. Just of and I reducing billion at equities. Do forward? And much how of I the you decided you maybe portfolio looked you during and question going equities reducing the freed are $X terms reduce return required And the understand -- capital expect allocation the could the equity Tom help you do quarter, the to in by that on

the process, we logic about really pretty we we've a the about but answer growth going your -- to option. terms kind Thank best talk what talked we're at the invest you time forward, environment? is of should going you think Okay, question. John the in this of for And know, looking talk for is good the equity. is David. in figure end the the can about which don't out got is question, which you where process at then I'll

plan. annuities, equity pension think them the are A portfolio payout liabilities, the First, large equities. like portion long-dated a of to which of back

to want XX, years. so pay don't are for fixed be invested annuities that And in XX, income going out XX in to you

at appropriately to that's the to that's long And So want of trade picking term because bottom. from to start want a or liability that We be you match. And would be out. you sort in don't when bad away economically. don't matching it move

down good of to we us. are equities the the little amount we we that -- flexible We up return the is On to a of it capital, just use we are other -- at with. our wasn't support and need think look when had business hand, that put capital And which we we some for a thought enough we more for brought economic risk. capital,

So of specific overall the portfolio that to liability reduced entity, was asset of it, we is not which matching. sort equity related the why really

statutory to long relates of as reduces up amount capital obviously from But a little bit. it As we're is. it capital, David, freed the capital your capital standpoint, it a

John, economic strategic capital, something either capital amount that. like What's buy really the it the on to And though anything thing we as do shareholders shares And just capital on free it don't the have it some did to we for to basis? allocation? buy it look We to pure back a or statutory we long-term of so share that. available in right up up like what a doesn't at make some do look on want capital, difference you had asset economics. a minute but do we're to repurchases at or spend free doing

for Yes. Thanks, your question. you thank Tom. David, And

and a take to As department, with that's disciplined risk and We firm, had about think investment mentioned. course, -- risk at trade-offs. both opportunities and return highly the but investing way do matter we integrated managing we look return the of the across thoroughly then both that the the as directly a in Tom regular approach

we -- do to professionals and look across deeply different be we those believe drivers, One of team have at the observations a and And markets. that markets -- investment of are in a what key I is, about XXX technical are number experienced. strong economic fundamental, action, things first, of that a price we

We lines on basis, dealer try consultants people from subscriptions or the time, research via we economic to whether given relationships, return that's outside, portfolio, keen the our for that's from have and trade-off any especially the and the that regular teams whether in, in associated risk that at a specific we're also insight from bring best point formulate, business with.

started portfolio, that to that and the you a marketplace, markets that benefits became we've if seen. we flattening more the as took bit more opportunity. active about add is We unit to an in all per to pretty since concerned last see the whether we than paying return Tom as the the As out, as was transpired it if best offer which year, mentioned, a perceived duration opportunity a candidly, risk, ago, little What then -- Fed became is investment we today. little go of you year back

integrate to portfolio our tantamount proactive and with it's be So investment our of the desire firm. to the rest it to

push As banks that not to assets We had amount is likely thought returns we we And do continue was of we central fair that observed that into could the we growth, limit growth of to XXXX a or the in growth. risky that, moved the and into there assets. thought what multiple is a earnings just the much end is coming end. of there this things year, what was that on one to noticed of

As as event, one if much Tom be was going that. an an didn't really the really we enterprise predict weren't we that thing all giving that there event. an recognize to said, But there's compensation we for

trade levels. in February, we albeit good incorporated equity So this at very

on we with The through and down this regular process. deeply looking on quarterly, we days share a spend go a then allocation the we we basis way call markets, we of -- X and group investment And at an X, we what daily that capital that enterprise. the and accomplish rest in a sit

could, just Got follow-up. it. And if one I

what offset XX.X rest as Just growth potential by on I the given pressure, year, year top the the the in about of the think ratio, line the quarter. How like transformative the should that of for progresses? ramp-up expense sounds just

want to that? take you do Mario,

the what I'd costs to system continue view competitive and of to to take Sure. I'd is position. our expense Again, improve core of out look reiterate. say to the ratio a part general is of our Look, strategy downward

you a technology investments to choppiness you Having that, are going that. items things, is around we're couple and said, also, did of in in revenue, said that, continue uncertainty marketing. on cause articulated but to some I to say, the going there's make which like outlook that Number the one

look, focus is ratio say guess our down reducing still on what I'd So is, time. I costs expense and over the driving

part I'm that's to of trying today to to give and of But look what an to trajectory you that core we're strategically, here not going do. a going what like. be continues sit exact

reposition is but direct do the Glenn not mentioned, down, it more So do driving brand aggressive And as to it even go what like, to right? the some stupidly, manage try we cost Allstate growth. money. So to to into we have that's going

then works overall we what so economic we objective. do it for achieve And we upfront, we'll do our think So an we if shareholders. out it on think is

Jimmy the Bhullar question JPMorgan. Our from next of comes from line

couple a of had I questions. So

obviously terms new on just Do competition the companies if looking maybe seen looser you about a you're actually at of in see, any to the bit based rest auto you you First, through behavior? on business, margins the on And the companies at normal talk some are could indication as strong. of pretty adjust Everyone's little business recently? the is point, driving have sort pricing start whatever getting renewal of terms of year.

process, start, fill and me he thoughts specific Jimmy, in Let maybe talk about can has. some Glenn

to fair least really that just was That mean margins we they our only followed relatively means -- idea. it's or it view. that everybody with have did that we give and where it everybody quickly. doesn't was thought Payback, at obviously, So to the back customers It the that were, Shelter-in-Place

continue own will telematics Arity, of with because tell. and data is about people information our way I incredibly surgical What by do get have and data, claim we to data, both all that other is be to run react. we or data, that from line, what by market, know will by business our I we the that it's to do a can't precise speak whether coverage, do. historical people And our hard the which kinds not, model

-- clearer murky, today to anything you kind say. But would in been would has anything there add the is Glenn, of I competitive and is than environment is that? that

Yes. we're and came in anybody competitive premiums, fast, more this XX% came be of haven't is rate go others event for rate benign price in What to very into meaning period environment, Because the Like away mileage sure I I like understatement, to we reduction. are predicted is, see an would or might that an by by clearly environment. a have to going that over permanent is be state. rate like reduction seen filing some would fast. their this And I too. change drive think down it anybody That us, on think, numbers a that were whatever when or that we don't I'm a year, for a I say can going durable time. the -- making What permanent

standpoint time, think good as then we take have not real customers precision, make with I anybody to at said, by it the mind, So our do in increases looking overplay I that rate anything And in we doing but market we wouldn't to and the decisions, do rebound this, how are, then go it a be from on. everybody's have for with to hand afterwards. good know thing of react right Tom

So to rate negative a benign, to opposed going as a you're very I is think one. see what flat environment

top of drop-off and see near these should businesses line in that term? the businesses, sales Benefits Life sort or sales environment we the on then a COVID of Shelter-in-Place, And assume in growth in that of Services, you'll or in sort the because the some

Life, growth I do to that could haven't last it just want to which, about the -- continuing of amongst get plans, the summarize Don And think in lost I coronavirus Protection Services is Let really answer reboot say, years, Don, And incredibly to to... still much Allstate couple there trying rapidly. we strategy. particularly in me Business, to you for just saw, would and had then I grow hate that the part. growth you I have that we're as story

Sure.

going obviously, the each trends. be think, to So I impacted businesses are different by of

Some such as driven our them will be roadside business. frequency of by

and like Some services dealer will a be driven economic kind so conditions of by sales general auto and forth.

by impacted different I every factors. will some be So think business

Plans, quarters. has for growing have terrific they've level, continued a Protection which broader been number Allstate on a of to growth, first,

So this first of is to XXXX. unique not the quarter

with the And and that been overall so profitability pleased growth improvement been we've exhibit. to really they've overall able in

the suffering, retail which "Well, to are have sales now. through but true retail -- being with look is a Now get customers you maybe purchased have, at of and their and, look retail." we to extent, in nuanced bit what's little business the you at do and at their when And of right types most types some might look say, is quarter, of more retailers general, they the first you

want if of at shops, you where tend when get all look going of since be kind SquareTrade's stop because with the their do they they larger to purchases to one done more coronavirus one-stop largest have they been can to frequently BXB shop hit So customers, so. people

of Second, getting be set lot environment, extent, up, some the to been to in to have then extended offices opportunity which of period has to for houses stimulus impact adapting a put as be setup stuck because go been going obviously they're entertainment of in well pockets people time, which some for funds home as check spend. and come the home with to people's their kind able what's purchased, as been warranties out the

saw first nice the what particular coronavirus of looking type their customer at increase. So when after look for, you was a quarter

It's hard whether that tell will and to last that last. how will long

out But domestically some I have headwind those recently, first a the as going little of been to was hit term, get say dip those nice say a at of and And think some people both trying of to in tailwind. least stores Allstate overseas, programs bit short business, slight, in fewer as claims after for which open. how a submitted would from been actually large slowed quarter, down the the virus a also time. there retail have benefit be the that they're for claims period a people would they've figure I it's trends up in Protection rollouts I point, picked new accounts will overall Plans. at number

the impact line. it's been of good what continue to be the But to Protection term, trends tell Plans really top from the for on Allstate overall, Hard going in to So kind immediate term be their long is strong. virus.

strategy business? Okay. reinsurance you of annuity long-term And of that sale the likelihood the just on lastly, comments or and have any for a block

Sure.

at jump Jimmy. me Let that,

plus. force. I XX-plus should -- has longitudinal policies XX on in perspective, when million the Plans it, million First, more we Allstate also Protection I over about think bought now out Don, on XXX point right? was million it

Yes.

run a carpet. it's team. So to be the really swept tremendous had great under not a It's

it of As have lot we huge portfolio to behind a equities drag that's because we our a we it's thing do. believe that on -- to as because ROE mentioned right annuities, I earlier, the relates

place care and we to on a of and because hope a XX.X% get off give luck, to our drag where a "Good want could largely do somebody way pay you only when do If we So we on eliminate our there." so. And want paper. includes we it it investments that the our some drag, don't taken find well to And with is large from whole people we annuities. customers do this say, the you But written bunch will something would be they of stupid.

find we be solution, are event, just mark be as long-dated to the is well that ROE could sale, it it that today. think its in -- keep accounting run We it will go to will it on away terms accounting we -- So that Either we in reinsurance is In differently. be rough. comes place any could we it, managing we a it of a it solution, have when you'll a where don't that, annuity drag long-dated market. new little accounting could a

ROE. overall will end, other drag the on it On eliminate the

line of next Our Mike Zaremski question the from Suisse. comes Crédit from

commercial whether you seen interruption commercial of exclusions? have talk can This specifically, policies your exposure if talk claims Charlie And Mike. you virus you've about Can exposures is lines general, outside in your and auto? about on actually for business

in Don, report? your

insurance, in disruption do. we by caused and our have many actually Okay. others do Charlie, we -- for exclusions like so so the business pandemic

that And and lot back implementing also to about were excluded insurance of requirements out were so for. go there's for but explicitly, a coverages there companies only not priced noise provide not

exposure, we that. in about is that I have explicitly be our obviously would sort relatively that, policies said, XX,XXX said we so exposure that of which There's as small. excluded. is total And Having against

like a relatively company number Allstate. So for it's a small

for have million for be Got the there month of the a $XXX premium ratio larger the in either you does the it. of talked an that duration balance And get the charge second to the then further potential per on discounts? about? the will discounts Shelter-in-Place to or reductions, the quarter, expense first is Payback quarter imply guys included in And extension the

Mario, if up other first the and anything second the all debts else it's sure you'll then in take make or the things, piece coming about -- talk the whether we quarter. bad

struggling. XX to our said came along another relatively a what We to it relates get The This days country, we is as implement program, easier of moved treat money the people's what not April in by to it because going come government got needed Charlie, And they were -- that was Everybody to in we're to Shelter-in-Place ubiquitous yet quickly. we it always home. fairly. and within May. people all felt terms into across As ubiquitous XX% had customers customer. do we

So gone opportunity we even on the even payment cash, might they for provided them us. with plan to a get have though deferred

it so need If we our as showed. And though, that something to Glenn will and was something we driving time, knew fast. was the thought continuous, be else stay because for of customers fact help, so was Shelter-in-Place not frequency were down graphs for may -- because not precise. needed to our customers those do This down we of that they're to If time that it period to was more longer it there, reflect it stayed that -- a done it need want much. we much do

data driving seem about, at are to people right? It we'll their should to not talked driving feel have some so more, doesn't Glenn a they like somebody use all doesn't fair but car as who's get And -- the Payback, we it all. as Shelter-in-Place

urban want The working Now comprehensive what live quarter driver? we everybody's what fair the to you from really our it do Is second what we frequency more would area -- so customers. in we area you a take live like. will which in, already as of down, driving? Mario, you on your impact as or same rural is done? fast area. thing precise you a telematics, kind But not get about an Are for we've stay on should we do are we and think approach can't

Sure.

So a payment, be recorded we in we portion with first The the on the respect will saw of the balance second to quarter. SIPP recorded it in -- quarter.

pretty kind customers was of one's allowing the SIPP explicitly one That expense that straightforward. we're debt payment, associated our to with things we for bad the the that we in happen. decided factored So will potential on plan the When payment into. special of opt

bad As we debt opted from evaluated that in pretty our that the was with experience, the immaterial. March, end impact along first debt customers perspective of number had quarter of historical bad a of into the the as

terms we of well But in And first the quarter the have into we'll customers establishing the signed as account reasonably prospectively. immaterial. that going as Obviously, take in at will exposure quarter up second number that debt look of was bad forward.

second the incremental look it appropriately, Second in update quarter, and at something quarter. we'll analysis. we'll take We'll the then a record

for today the Kinar line then from question of final Goldman Our Sachs. comes Yaron from

the that to Just that, price with about the Can of Shelter-in-Place sales go business force. is to more with variable generation and want timing -- you has also agency options well? talk been impacting the lower new environment the how -- maybe channel the customers on touch a kind bit. And of to compensation back shifting as agent a distribution by for looking maybe impacted and to potentially a how little

that best answer Glenn to question. person be will the

Yaron. Thanks, right. All

about of close that to all I all of they're businesses up there's First agents revenue benefit this the think think in significantly down different The of about the middle of when because of businesses the way impacts types because of you actually that type stream, in coronavirus, all, it's important, that in have compensation. new it their if that still renewal type the you of think business is fall wins environment. through kind

force, and some cases, to agency the even XX% individual XXX%. will somewhere and you range to if XXX% break any or, above agent, down compensation between total in Our

growing more middle post of versus March Some before. are

remains. the So income of core their

piece. that So you've got

company really think able show make be in that, don't watch think it forward. how I another will this business, value our agents I there's where value I that they agree something that be for think But the of time see. go and to have to will impacts been our history I to following also something as in process. their terms people statement. I In their looking could

have Over almost last their all the agents course almost weeks, of all of called of X the our customers.

just they trusted time this b, So adviser; that unique are a, more committed more and have you've c, a hear because want folks questions, period really be to of national and really people got crisis. from reached; of are they to their to our where, available

And transformative Transformative forward, have accelerating so Tom I having be out the which base customer more and keep we're and everything on a Growth talked going what there's consumers in portion least said, the growth of moment think this out Mario our more about time adviser. some of they've affordable why our That others Plan. got taking value value that we've where for call and really of will gotten costs at and is, to about system trusted of is their relationship a this competitive agency and see

Milewise, you then maybe talked accelerating follow-up. Got it and quick potentially it. one about understood. And

you to were Any thoughts quickly as really all the you XX think can states? how as of I program states. year-end, in to expand XX

Glenn, give that? on want update do an to you

Yes.

the a a uptick it. it. a the XX value shown in states has in pandemic for quickly as demand Certainly, as we're we're and on the product, of pay-per-mile nice So we light seeing on moving can and

this, up two see effects kind Milewise something like telematics of going the public as over-demand the X You the actually up. just is acceptance going that and now. of One result a all is of right notion in for is the is of

and We a seeing percentages double-digit other being of of the in new products. up states week-by-week since in have sold terms the their XX% on regularly middle versus Milewise business of basis March some sales

part result the it's doing a It our the of more do we're as great absolutely think consumers expand we So a will to for to filings across of try be pandemic. country and that broadly opportunity.

know you do protect Thank strong that as position. Okay. to and crisis. life's navigate a through uncertainties, all. we customers Allstate to is in our this We we'll how continue from

So and talk thank you you quarter. participating, to next for we'll

you, does and conclude for participation program. Thank This gentlemen, today's your conference. in ladies the

day. Good now may disconnect. You