The Allstate Corporation (ALL) 5 May 222022 Q1 Earnings call transcript

Good morning, everyone. Thank you for standing by, and welcome to the Allstate First Quarter 2020 Earnings Conference Call. [Operator Instructions]. I would now like to hand the conference over to your speaker today, Mr. Mark Nogal.

Kirby. you, Thank welcome Call. and First XXXX Quarter Good to Conference Earnings morning, Allstate's After session. a have prepared we'll remarks, question-and-answer Yesterday, following XX-Q the on our presentation, news close with our of the and along supplement, market, website investor at filed reinsurance our our and allstateinvestors.com. today's release posted update we issued

these management Our on is to here team perspective provide results.

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

we on quarter, hosting investor share forward will special soon. topic hand We XX, of engagement June Tom. second later be this and it over I I Before off that to our call it on the to additional look Tom, And homeowners. turn we'll the focusing to now value I'll information share want further to

and thank time Allstate your in you investing for morning, today. good Well,

X. on Now Slide let's start

was a X diversifying profitability bottom. Allstate's profit costs. for and So insurance. negative made and tenured is surgically the low-cost market In months Transformative to We're ovals X in new loss also this aggressively manage first protection valuation multifaceted and expenses left. execute Transformative to a in our largely This building impact profitable on expand shown which raising address digital the raising with offerings progress the a liability insurer shown inflation, also and to services, in this with Progress We're customers. prices. of or X are share key less increase which doing begins components: shorter the the into areas strategy. strategy in has and for broad programs two executing we reduce business We're longer protection in Growth. higher prices distribution to auto plan to tenured less We're with customers as by more expanding deliver quarter, personal made Growth

by which We rate overall quarter year, the million. our reducing from enterprise the also $XXX fourth bond asset inflation of impact our in portfolio of lowered last the by shifted exposure allocations interest higher

Secondly, of to technology year. we new ecosystems. progress growth make access pricing trajectory transformative continues growth almost expanding sophistication also the above its continue Services customer XX% prior building revenue on growth profitable Protection with increasing and by

year share diluted Property prior X.X% Slide discuss to Adjusted net in $XXX in the year due in detail. the due was compares quarter, portfolio of Moving earned to the premiums underwriting income was of investment strong performance the prior and premiums million lower Net income per of a and exceptional more rates, let's force. to prior increased duration first compared lower $X.XX $X.X the to X, higher declined policies million the generated in year, liability average growth $X.X first quarter that fixed Net in billion impact of of $XXX income income reducing prior $XXX XX.X% annuity million the which losses below reinvestment performance-based quarter. the to disposition reflecting loss businesses. income. income and bond in to related quarter life an included portfolio the comparison X.X% to a billion in or nearly year quarter

the and realized. by not reduced yet low year's loss over been costs outstanding X.X% accident last first months. the We because inflation remember, the $X frequency You'll quarter shareholders billion and shares in in over returns XX had provided auto cash pandemic of to and last reflected quarter

Slide to Moving X.

insurance. underwriting negative impact a insurance with $X.XX Insurance from a health underwriting slight after-tax and on auto provided You Auto million or of margins benefits Services Protection insurance, inflation investments, generated income the how share. $XXX loss income and homeowners recorded mitigated adjusted a can had of see B. ratio net as combined

homeowners $XXX performance-based income although strong investment income in share. offset auto or more still of property net and contributed liability net the quarter, income with million insurance. were Our first from results industry-leading $X.XX losses highs Protection Health per business that Benefits adjusted $X.XX underwriting income income in insurance record XXXX, generated And Services per share. investment than contributing and the declined in

Now more Glenn let property discuss the to me over detail. liability results to turn in it

impacts. supported because we ratio management. you had We much chart, our that in Page Starting an claims pricing the look underwriting, insurance. expertise, auto target, XXXX results a due talk see on early Tom. course, view expense we meeting terms as of the when at mid-XXs left, it's insurance. in And the Allstate combined in And you of exceeding auto on by have from Brand sophistication, than of long target could pandemic Thanks, outlier X, or that we'll in the history to target about profitability chart better

cost chart took XXXX, The combined we benefiting though inflationary from margins that pricing last made, as next the the and year, first structure increasing with point, a frequency deeper insurance terms and ramped level into from levels. increase while low quarters, severity from recorded in improved pre-pandemic is we early We'll been it's most XXXX QX maintaining combined X higher as auto we've just X frequency spiked In few to right XXXX, significant shifted and as year-over-year price And in inflation stable On in the and quarter transitioned in were and trends today. compared obviously the . ratio frequency continue around And favorable Tom in of severity. combined last ratio we very changes in pandemic environment which underlying but for lower of go those in increases, QX of and improved 'XX, on pages. the we're towards high running the late decreases. we rate sequentially up ratios down to to XX mentioned, recent pressure then months. that highlighting significantly the that impacts the breaks the inflation occurred in

to move let's XX% The claims the about the XXXX, about and detail. property 'XX. incurred year severity across as Allstate XXXX of story damage can Slide see to left. continued auto and talk higher So it's you damage severity the Brand on country, into report in more has Allstate severity compared for year physical report map increased from X

as when the typically year we our give on to note prior a recall shifted the look at paid prior that really it's to into comparison our And that view Now to year-over-year. financials. directly new severity you incurred developed in the year severities better what's quarter year important an year-to-date change in recorded or to it's a report you is shared some full report fully of severities, disclosure estimate or period, whereas this

in X. in the expected severity XXXX, over of X case, this seen the of So is inclusive XX% inflation 'XX the quarters all through in

and right, chart higher adversely see the claims severity a compared has total on with we our when includes On in contain experienced our costs, using Allstate while rise. can technology, total and of analytics and and claim industry. vehicles operating data they to loss higher processes, can that our customers. leveraging costs loss come mitigate scale, have values involving relationships the strong those that professionals, And our premiums, distribution you pricing broad for adjusting capabilities investments also vehicles claim help to impact that the We're to rising repair vehicle newer

to Slide Moving X.

years Like legal to increases. insurance report property damage, X% injury isn't 'XX. congested about also increased trends they've Higher-speed harder cost continued and for and roads loss But bodily accidents injury pressure Allstate more price and casualty past elevated 'XX. leading wide contributed severe bodily spread. talk few impact to Let's costs. the injuries, factor crashes an auto brand quite severity in incurred report as year and have compared into been is increases environment 'XX year a the because are severity also casualty and bodily to injury about evolving for less

would resulting pre-pandemic That's treatments harder medical injury kind you resulting and nondrivable driving chart injury see complex more left, consumption. mean to If shift at and compared a to a claims of have the and the contributing in that to higher a major hit a with look vehicle, increased costly on in claims levels. which designation you'll bodily claims

the of in strengthening variance in and York New And like about to within higher quarter. more of Texas the accounted the terms In for decade the report Texas, injury and That Florida, rates, prior the for over states first actually populous and $X years prior some for claimants past environment, right exceeds results billion shows legal annually now. doubled ultimately, costs has on consumers. trial attorney the attorney advertising of trending representation severity Georgia, The chart higher California. year higher in bodily XX% our

resolve in our efficiently. investments Here and fairly, our expertise data analytics helping and our and again, us accurately claim claims scale, and technology in are

Moving first the When months, quarter quarter lower to the early implemented X.X% premium fourth actions and raising to reductions and in weighted quarter talk our the 'XX X.X%. reflect X-month increase left deal premiums began are impact of The a up, combine the Allstate actions we our rates quarter, In we inflation quarter, About accelerate by average view from the provides second any the of annualized written actions, Slide about multifaceted expense 'XX then the term $X.X and implemented Auto reductions. of impact about quarter 'XX, XX% a earlier, insurance the then let's another further quarter key policies. XXXX weighted we on rate and of third X.X% billion in over that's increased with We rate rate to pulled into that to of the frequency and first accelerated in X, plan as Brand auto table rates of talked premium our in in the equates XX an inflation, with with within the last to we've fourth states Auto. year. back prices. continued In in component you first increasing that in Allstate on Allstate rate a decreases by as gross coming picked and those and brand. U.S. X this Brand

annualized will be or earned customers with price like policy which in there's will things taken a estimates rate and right, lag rates for improve retention margins, increase, when implemented which in terms That of chart assumes illustration deductibles changing modify premium. ultimately are XX% account on when earned, to increases rates the X will faced that like they're the fact but the see the the be a months between premium into limits. and the when only you can the earned the last So their

you but can XXXX, can have it it the didn't at As and the a looking coming taken you in whole see we've quarters, accelerates. yet, see, really increases of lot coming QX rate impact

expect next take increases. in increases XXXX. first in We be remain given those We to year that see our increases increased rate we posted by and pressure, restore premium monthly you second expect earned additional targeted to ongoing of so half, the to through quarter the keep $X.X to and of inflationary that and we will rate rates disclosures on take significant very have filings. we'll magnitude that confident ability based rate year And of in the in we of far. the in keep our auto And new profitability levels, in implemented compound the reaching rate over rest mind this additive on billion increases the on beginning

So an let's undervalued homeowners think take that strength our X look I move a industry-leading Allstate. something is business. It's at to at Slide and

of the that business. We've lines dots As recorded on to XX% and or in differentiated the ratio and product, time and a doing auto, you on home and you the ecosystem. achieve versus target both brand our portion and that our business, bundle shows order as industry have a achieve chart, exactly the model know, the our of the combined history capability that's The better. you economics history unique improves an at overall is really, our left underwriting, And can we our in of competitors. And particular graph required entire reinsurance, adequate retention on that. Allstate our to over industry. of that have goes product homeowners see in a customers and It ratio of of business claims significant line this capital the homeowners our Allstate homeowners a return to believe we that a long of from and combined in system

unprofitable find combined as consistently can return a ratios as We've that generate what for You and some a on of large whole don't also meet that capital. our we competitors the needed definition see industry a of creating period a process programs. geographies, highly multiyear business exposure through pricing designing sourcing repositioned improving plans, and products, to inspection the reinsurance sophisticated by and selection home new over capital risk reducing homeowners multiyear

statistics. the the is our you'll features on of result now, though. Allstate's premium rising from needed to mostly increasing environment increasing earned the grown has in driven inflationary we've generating right annually have continue And in And operating the and material those excellent Since by earlier. key help underwriting And Allstate in Homeowners homeowners. and of X.X% into Brand But and $X.X as an all to consistently values, our written or And higher with spot about to certainly relationships property a Insurance underwriting see not right grew XXXX net As loss billion immune policies a good We the higher XXXX, the labor in to by with rose Homeowners force be our generated impact. shows in our that replacement and XX% mentioned costs results. sophisticated I Insurance respond offset XX.X%, quarter. changes chart first to income Homeowners broaden sharply customer same pricing that underwriting that, we XXXX, values premiums prior and average form over of year. that costs. there, Allstate industry really Insurance see The the products through the million $XXX agents period. we've

of over on million of additional you upcoming advantage In during Allstate and business $XXX insurance is XX.X% our with grow brand. it that, topic call with on a income sharing insights to turn ratio XX. we our to it. And generated and leverage that Mario. we will I competitive underwriting first property And combined look advantage, the forward continue quarter June for The to short, homeowners to special aim

Thanks, Glenn.

excluding ratio, of within attractive believe more an this from into our we coronavirus-related business. expect best value in we quarter-to-quarter. where strong in couple an and underlying discuss excluding through chart XXXX. the measure we're adds intangibles with insight to tend claims and claims approximately the This year-end how innovation represents on metric points XXXX, starts with enabling Let's time, ago. provides ratio, position advertising. associated relative customer expense to expense costs improving is our a of It amortization XX approximately Property-Liability additional since and expense restructuring, improvement we'll introduced move we've while shows the The expenses, investments because then purchased which adjusted impairment ratio, underwriting of We to quarters reductions. slide XX, by our Through expense ratio reduction trends Slide adjusted settling to rent catastrophe-related our competitive a costs to expense around the catastrophe execution, bounce improved improvement Over a compared of competitors cost of levels, achieving achieved X-point maintaining returns. X drive than X points This XXXX. an

adjusted year X-year fluctuate measure, to expense ratio goals. costs, drop a and advertising the versus as and near-term the we of the implement quarter, but increased expense prior growth. ship throughout Advertising price seasonal due While to increase impact to employee-related we a in to year. shopping as could in took remain we the year expenses quarter in higher was included prior increase in earlier Not direct auto advertising costs advantage the ratio year an spending reported increases will primarily our reduction this in committed in the compared

digitization, capabilities. Transformative is with are Growth share. initiative digital low-cost and broad market by accomplished improving continuing costs. distribution-related multiyear Our objectives: progress investment property-liability with and future to sophistication be personal Slide cost efficiency This technology on diagrams building in customer operating This sourcing insurer and increase share XXXX expanding increase access, significant XX, and market are efforts new designed each made focused acquisition, reduction by distribution. X enhancing a momentum will key the increasing objective ecosystems customer customer XXXX. organizational deploying on and delivering across in in value, We

While flywheel, target the top improve we of rapid auto growth. plan operating current customer the this generate more will the prices value competitive have reduced we with required returns. price Starting confident are while to expenses increases, long-term environment at earning

and protection simple, building are We affordable connected competitively that solutions differentiated. are

enhanced have Allstate We and decrease increase agent distribution growth expanded including the modifying costs. model distribution, to and

significantly are supported Allstate channel and the investment. expanded and the the and of also We capabilities distribution marketing direct expanded agent improved in independent brand sophistication Differentiated by National our strength channel leveraging General. increased through products by

speed protection growth. This share Transformative can is support the and like New a competitive sustainable cases creates lower bottom the cost, see the market technology and you offerings to approach service of page, flywheel market. leading comprehensive that of ecosystems X improved to At advantage, Growth.

make III the building to in in continue meaningful We execute new model on and X. Phase to scale progress as the begin new we model Phase

to XX. Moving Slide

meets agency, how access the written on left, the customer industry by in You expanding can exclusive the better Starting lower on demand. was distribution see channel XXXX is premium as customer Allstate's can auto insurance roughly see X/X you X/X bar middle right. distribution agency. year-end shown distribution bar Transformative on auto is independent new Allstate's pre XXXX first shown in business in X/X quarter direct XXXX of the Growth the and

net base, will Esurance National As agent a presence the see, increased losses growth an Protection quarter. shift Transformative Revenues, reflecting year expanded the and at competitive $XXX in and X.X%, income by Allstate $XXX mirrors National quarter The on Allstate offers prior source matches expanding in Protection Identity was business new Policies that million this and revenues exclude offerings. capabilities including the Today, General force improved net million XX% reduced. potential continued to Services after ubiquitous Brand to were of sales customer to XX.X% to of business Slide in becoming. continue the the million the first Allstate of the force to increased significantly drove growth new Allstate Protection gains strength of applications increase shows the product with our of property costs in for Protection. $X by The incentive be Protection pricing the middle-market Services. compared from Plans, agents distribution revenues acquisition Allstate in channel Direct a also compared of million of you in million in $XXX to due can generating how the the of investments income and derivatives to of compared policies first today, business impact XXXX. quarter. $XX growth increased liability, growth adjusted which industry are increase driven channel. approximately are XX.X% the the profitable and Plans year independent the the year in use net and is quarter. showing in acquisition the increase lower Growth XX and increased the million closely preferences prior are for Allstate future to XXXX brand new all and the in $XXX Xx of and more General. of of prior generating quarter Adjusted growth as quarter

of premiums portfolio, our by of primarily from group General $XXX growth income driven the added XXXX and year both and you Hub. million in income. year Revenues increased offering million driven million first group X.X% products to acquisition and standing revenue, as contract of to Allstate see product The the net $XX increased health XXXX Group to decreased on higher can the Moving health $XX other and of National quarter, generated Slide and Benefits individual lifes. XX. quarter in left. in the individual and prior quarter, by charges prior Adjusted Health

in investment duration investment is $XXX exposure totaled year an as markets exceptional of on Now the to year which highlights private blue, the quarter, left. enterprise let's Net reduction was million but $XXX Performance-based $XX shift reduce quarter, income income to dark was below million income, our prior million in the shown inflation. Slide in XX, the XXXX fixed to year shown and equity prior quarter which income. the the reported chart below performance for in

a yield are results $XX Market-based strong prior the quarter million the year, in the prior above annualized of performance. compared below While XX% lower first quarter. shown year was performance-based income, long-term blue, to is in average

years, fixed return market-based of of over the our duration average would below fixed reduced our chart to The with reduced portfolio the reduce yield the interest the negative and right by discussed, the increase further portfolio lower by rate the over our environment by late quarter. resulting lower a portfolio negative rate interest the After yield. fixed cycle. declined yield we've decreased income The rates few illustrates have X.X actions years As fourth took the portfolio our was rates The has quarter we in billion, portfolio on first income fixed in shortening fourth in income interest rate rates proactive X.X%. reinvestment last the of interest we $X exposure higher XXXX income duration XXXX, in inflation in quarter in valuations. of management in quarter valuations on duration and further interest impact our

yields end the interest reinvest continue of interest versus negative quarter third impact The our the as interest our of mitigation position at rate rates duration $XXX also However, in million lowered portfolio rise. the higher to higher shorter by last risk market us year. approximately rates to of positions

reflecting XX.X% returns combination reduced providing dividends quarter last Common through of repurchases by months, first were enable prior share cash stock let's over Allstate's outstanding capital XXXX. Now shares equity the since history cash strong X.X% position period XX.X% income to $X insurance and below strong XXXX, to significant on Allstate's billion our auto to lower XX% return due shareholders. of shareholders. We returned underwriting of common continues which XX XX, the a in net year XXXX income. since strong to of returns move Slide to Adjusted highlights capital the was position. and

context, $X.X million on XX, had completed With for As program, be open questions. of that XXXX, the repurchase which March current to $X billion share let's expected line XXXX. up early remaining the is we by

[Operator the question the first Josh of America. of Bank Instructions]. line And of Shanker from comes

Agency I if added it X,XXX persistency homeowners XXX,XXX lost than I a those know or book. policies. seem gen our the in are quarter of don't guess, policies. are encompass guys auto like monoline the lot and which adding a lower does is auto, segment, policies you if those net But net you're policies the overall Allstate

where comfortable And be Given is pricing you net X.X is drivers the monoline it XXXX years? your right will in adding the are book, where with the on gen versus how April there you're in what now? strategy of

and up go me the specific let I'll let Glenn part. take Josh, then

we talking monoline the about. National in you're to into stuff bought General part get So

So a we nonstandard the on products needed wanted particularly presence it. the designed we -- and in with business, stronger pricing the

We and also independent agent the had see business. great thought -- with potential we

to portfolio our to is add that in insurance really standard and distribution. leverage that homeowners goal And product strength auto our and so our nonstandard, take the

new we really product got expanding We're -- homeowners. good line also them . So see through is up to expect should you distribution. us. product basically picking not but piece to growth make from The just homeowners by only that line our we at existing

I homeowners. think they at okay were

how works? that us being to be. some why where they specifics see of of getting don't need to targets Glenn, profit reduction so you take their the And the you

for And the question, Josh. thanks Great.

home, is auto stories Tom So on definitely the and mentioned. it as different X

job they biggest shopping team and is right first they quarter National the places auto. in in auto, the effectively. our growing the nice far felt General nonstandard the quarter and right had places and profitability It's of shopping really quarter being pricing did a So in the the market good the in by

So and shorter make think in business it's those terms and value, good is return you're their of right, but on a as they that of policies. that -- model lifetime one duration business

auto way. . in that So they grew

the really side, the in a Tom been in mentioned, that taking a NatGen. and the has making strategy we're As time NatGen it just we're homeowner Allstate shift on strength strength homeowner this of to

the is to of there. we they've and the we up marketed they've General things into which that I shrunk Allstate Allstate that level bit have than that's opening company, some the channel we a in homeowners for sophistication the in data before. -- as this, So They in channel, with about opportunity been get had but products really and the remarks. to homeowners, based pricing and in as a grow talked part of middle-market setting capabilities the on haven't and ourselves Allstate our get haven't agent independent Allstate pricing think all we But a meaningfully in great National endorsed branding, the strategy really

place business So I and really correction auto the homeowners but basis, of a really from path standpoint. mode sit there, forward. But X-quarter nonstandard as from in in, good the we that's a we're still guess, a good quarter in a

in is it is on that there? to at is to want guys reputation Allstate question who What area questions. that another is maybe quickly. asked a are wrong. only any running Plans. very seems what going I'm business, the [indiscernible] calculated, ratio you about I about but Protection Okay. as Allstate person it growing go gets like exactly and Commercial, I XXX% And And never combined

We No. your always appreciate precision, Josh.

pleased not am -- pleased I First, of of results none Insurance. us with Business Allstate are the

companies. profitability or There's a year profitable. business. we made bunch profitability would shared line. home-sharing And business. like to a -- call we company states us that So weren't network revenue it's that, and chase traditional review were a that X shared in insurers, just from small we've if stuff in to the of think economy agents. didn't economy transportation through we one contract Allstate I what then that states standpoint, is a business parts the we sell And the, there's work been to the And that particularly commercial the improve then really for And done the trouble last we that has some decision going . a

So number of states. a we exited

just X they then piece altogether. out got business, network profitable. not what in And add you contract you like I particular, we to were in the to the -- that? want to would states, transportation do because that Glenn, big think of home-sharing

that things add large business when the is just the would small we in of -- X it in premium I growth talking traditional there, part. if look sort you're at is, you commercial have. we've about raised rates One

not. are rates units are up, materially So

usage mile that And have other little raised, right because have more those transportation we a -- A and in of -- by on pay gotten is and year is the raised for the year out we was ago, as networks, we premium and transportation The a a Tom there said, ago, some still business now. lot very usage. there's usage rates them those. therefore, charge states we've we've lot more and

forward we So think is profitability the go better.

it's not in business coming we've on revenue through. we're piling gotten more lot that as growth a So

question comes line Peters Greg James. Raymond of from the of Next

updated information I and new appreciate the your FYI. slide investor deck, just

pieces the prices report between the X, in reconcile pricing that trying were from pricing affect question you targets have going X cat raise surgical the my And forward. differentiating value you that Glenn, how your pricing, to And report. your going just in your and about remarks, X. provided exceeding Tom, month rate you're lost February between to to customers earned to said X more, a I later focus values. to of and and lower the was about I'm the March that's inflations going from So your you report, I'm talked just difference month And report. opening you difference pipeline Slide lifetime on going you effectively of February language around to talked the lifetime the later premium pricing. together pricing you in March and your even just cat longer put to mentioned lot one cost and were pricing trying information us

I So together those you was put for maybe what's on. sort could hoping out all going map pieces us of and

did start want me on to do that? Tom, you you want Or to?

articulate It -- on was I but sorry, Yes, great. was mute. quite

to start Mario and Glenn give get me you Let then off and specifics. I'll more

really customers increasing to auto believe about longer-tenure obviously, profitable we but We've price newer aggressive, less profitable our smart So possibility. first, customers. insurance it and important spreading been is between getting

you're inflation, with it. one raise you rates ratio, you been and who's customer cover that's XX a you losing have the have you're and you years money a to say to higher both and new let's obviously, making impacts so which have And XX% your And on customers. combined

long-tenured you of the same give losing run you them both that customer. profitable the If risk amount,

and we've retention. for that our, our lifetime less we call, retention is closed protects new older help challenge believe books with going into So we what be space, books and In will that, this to newer rate a would put with shorter-term And companies. more customers. all value into

make sure so through but we're And manage our to we're it. we trying way --

it's is sustainable. sure taking the we're than between you're new not I numbers is we what the surgical But know customers, on manage say Two was us are sure products. Glenn's part all make are money sophistication other you more profitable, appears. slide So we're to we're there. But and to you get old auto to in continuing the to Slide sure X total make it and money loss how the help see making want costs temporary, back make earlier invest way your make in just just profitability it's going doing expense differently, new One that auto auto like permanent, sure -- the reductions is the and whether make unprofitable would those we prices. being insurance, to in to insurance.

about So we then hopefully, feel this, insight. that provides some good but

up do to March month would go different. be maybe this As going Mario, to waking the onto in sort and than to how And unfolded. talk what just the change said that of closures, say the if about has to you're helpful. we're in you be that we like Glenn, want going something more of deciding outlook,

Yes.

start say, unfolded. with would -- it continue I how lot continue people of see see. inflation So like mean I'll we I to to a run

see to development, elongated development. continue frames We prior year including for time

appropriately And part it. conservative taking, need and of I that we're rate like so we're saying more view to going think, on an that

a is sophistication good And shoppers build time but to to because Tom talk is I there down grow some that it's folks was on. an The . marketing that the an on because do use part others open, -- We think want precision. that leaving that did other said, at precision, level, the of of what important we companies to the point that kept the a on a lot people we area. that's But that in precision. and clearly, depth have sophisticated opportunity level. talking going don't There lot quarter highly it's on shop. who more about I took job into. a tends were first cost or of of do and economics also or be because and lot itself good marketing talk some the go-to-market We we level which terms Tom a about Because segmentation, we that what less with enough our business and of their some segmentation maybe were more

state level. that grow Now we based all open where not sort lifetime also lot grow sign we're drive go-to-market a on how -- rate of value together have for combination just It with we is It's we know want together well. and -- entire the we to and market because need we market comes -- return as everywhere. type risk did all the underwriting, marketing on that think where that with distribution marketing, to go goes we're precision. within precisely And to to we a want of it's and that the a pricing of I into comes system based have how

just can I If is this Mario. Yes. Greg, add,

such were of we into with First, start where what this rates some of that you and on started progress with basis. profitability is, with we significant provide of but also what lever color all rate the we're objective monthly I'd year doing being I around really transparency a a create a level view providing the we're was a that guess, seeing forward-looking making to information auto

objective. in used the disclosure think, provided, the additional that's recent context. So I most language And some the we

and just release what look damage reserve recent think in auto we seeing this year, were reflection quarter million most severity terms current in severe levels, well trends terms In trends what's in $XXX really of in continue in development we was last by and terms and the that as I both we statement trends saw to month-out, in what terms of month-in strengthened of we at loss what seeing of made loss happening, we how escalation loss in in into a -- translated trends our what we both severity And of physical were the as reserves year severity. overall.

it outlook working pricing the what and We're So what our and seeing We're at data. but in . looking we're tell the of with the did, provide you factoring around more team that market. purpose is we're taking texture into again the it. disclosure also we little to a

Next question Kligerman of of from Andrew the comes line Suisse. Credit

to you actions possible that maybe anything I that question. Would non-rate answer that get as much maybe improved the discuss business be to a be guess great actions. it contributing able mention about of Yes, prior and as the you're how performance? percent didn't on nonrate to to might

do take General? for the both want National and to you that Glenn, Allstate Brand

Yes.

sort what things we structure the nonrate the fee combined the element to to quarter. saw that's stable sophistication for it go pricing to our opposed to into about we're ratio. and team, ratio them the and you turns really how And -- nonrate our a they have National about the plan of value a write the to is risk, back resources with General and like generates to that quickly predict first, type if the saw in about how to that helps really Allstate isolate When word first we but I their that and think -- marketing pretty and don't drive. And built goes underwriting goes it and of book, National it underwriting getting right then combined General or sounds I'll in for and that I The distribution where not really the rate be grow. write structure. to one we've our that because you underlying I and where and each long-term And is of to itself over is marketing nimbly you're fee lot in teams deciding one, of out really economic our good stable distribution underwriting So and go where market. it's looked to that deploy product across think to time was I talking actions like also organization as how level of looking

Okay.

billion sense. then had complete million more $XXX I and this that of chance robust pretty just of buyback -- pace. $X.X of going sneak and you end any the it about The the if So the real a this terms And I quicker okay, at left, of really in. you not do actions pretty seems implies could by to a than makes thinking I you're a could quickly there. that thought in fast anticipated year there you pace. one authorization about because was lot Is or curious that's

Tom. it's Andrew,

on actions. First, the

we though You like that, like and will of selection stuff business. the see will requirements you I see some manage -- that will know things the to change down-pay going help forward

stuff help us, payment can absolutely we there right can things that policy we that like in want, is which we change Glenn will in or those terms place. we being change terms precise but certain feel are very we're put So will . if that we and

of the the is quarter Mario On that? year. done first buyback Mario, have you add to want next to committed it anything in early to

No, I Tom. think that's right,

billion wouldn't the one next So any point. too that's We buy. we'll still year, read and We I into it $X.X much by left have said to complete quarter. early

David ISI. Next of Motemaden Evercore line question . comes the of from

I does Or expensive mix vehicles, that have -- the newer, to rate Does with X. more you Glenn, I can on when that you that higher they a that or of vehicle those guys that interpret peers? adversely rise. that mix have I severity more a increase values loss and come vehicles take expensive said need fact guess, higher you premiums, Slide says impact a of I does more this vehicles. peers? how to of have It relative more had should believe question versus total difference you you guys that mix mean

do to want Glenn, that? do you

Yes.

as But headwind us us severity. comparison do to charge safety year -- we've avoidance, a bit that on get our what's talk And looking car I'll know and we of was things: try elements a and that and macro that more trends book and newer at then little a of and this make and the frequency so are through a because opening some we that look vehicles, severity are in there right that. getting more property looking fix, way math about and business on see and passes, more, example of have that business, vehicles, to out to of we little on. in of And put then it. accident a we're it for to whole more everything. little or bodily that because in damage, the bit year difference the system. in collision book headwind every a bit would parts a little type tends public new one, that math every statement of Fast they're on and true the to park that few get reason that trend X year I the technology With to we do that of the ensure at look more a benefit trends, sustainable we're year will sensors cars, which third-party model back what premium done there's first-party whether like our rates on come to a give our get every sustainable it all So get The give like of bit we that at of at Track premium the and started when we tailwind or will expensive injury disclosures, frequency, model passes with as a higher well. we of fact a you through others, is It on we premium on the our of for our there and based and that we auto be

from Meyer of KBW. the comes Shields question Next of line

the last homeowners? Is in Fantastic. automatic, into more Are steps wanted in on to bit automatic first deterioration that little a of loss lift inflation the dig and comments there homeowners the other necessary in guess, guard year ratio little I the underlying to of a because changing? quarter. all I your we've are seen

today happy with is homeowners where we're terms profitability. Well, of the business its the really in first,

comfortable about quarter, feel catastrophes, around As point you good earn you ratio, have that If those add bounces call you in the prices. it prior some mentioned in we a to really lower to -- year we Glenn, in still know, it And we costs. Property because [indiscernible]? that Adjustment. catastrophes had raises the It cover than We that but go through, PIA, parts you which The slightly continue what where catastrophes inflation sometimes up would combined auto in of ticked quarter with premium. combined this in just that earn what a average Insurance as plenty excludes room burns because return. little to out, and come through of really that of ratio in bit. is it part as the burn premium underlying like severity increased does doesn't,

Yes.

we're or exposure recorded or had think hurricane in and good the industry what competitors right always because or hadn't locations, ratio risk reinsurance any the the with mapping running or for I we start gotten always been or the and right hadn't hadn't key we combined if like we were constantly we I run. wildfire accountable done we hail ultimately, good first, for So other a but underlying

us accountable for would rightfully I that. hold think you

where It's of stable Severity the amount and between a ran said, little really the combined said, ratio. now, underlying, the good a and primarily I tough though moves conclusions combined to because first we mix are. So look homeowners. a quarter watch watch to volatility as we of Tom we auto homeowners Right it that that the Tom, bit, down way. recorded nearly do ratio. at lot That up hot in quarter. as in of decent not feel there's one in go like back recorded always draw as I It's perils about in the and

high ticked an average we're in the a part premium average of XX.X% that, number, which year. up watching we but that increase, through, last And so of burning was year really got latter earned price the

give we're and continue And as to in earns -- feel that good about through. we'll we're really obviously, So us I in good homeowners, shape benefit it.

Okay. That's helpful.

increases we increases, works I guess, on the make customers? the surgical focused Second I'm want should new of as to being sure that expect, business . I on through just suppressed way tenured extent the lower on application the strategy are the question auto side. understanding rate commentary to its that rate

and can off jump you then start I'll in. Glenn,

on a lot the this think I in of competitive environment. premier happens depends what

as where they're it are people depends So rents, their taking other rates. spreading

that will our happens, on That our you how people of with to less we shoppers what if point. people create it good part this all who those depends than just So book, on more the index tend shop because LTI then said Index buy putting business. it. it new competitive do we LTI where feel the position, pretty renewal be about the track at But

that? With terms in So through we top of hangs would add on that, together to it we're increasing we still Transformative that still Growth grow. market hopeful continue as what we'll share. this, all of to move Glenn, think you that

access agents you channel Mario exclusive these customer long our points first, With your out value into and you short short long-term add improving we and I about expanded the IA the a systems, access, and we at are cost on term got get got the on said, term, good just really the think, as market talked our products our I'll question, asking, term the if humming, long term. about Tom get take we've some prognosis as middle and all the . into we've were work that. that X

come about what That dollars too. out have the forward. pulling but there of to plus first gets marketing. A think fact about publicly not costs it, decided somewhere, curve did was lot pulled We left So on this of it we that that the as same of sold good good and does you reasonable, in companies on to forward, marketing we've about it's number we it talked talked It we and a from and do that were them. year, the That's increasing economics early of there the supply increase pulling that left marketing from in means forward. quarter. did it the because them marketing pulled back quarter, economics business the as demand

rates of and we the So lot rate, from That good that we prices in pulled we our be we're is a shoppers more with we the had in, out there, and market lifetime inflation it thought later. to good the taking would said, run felt value. market time with continuing about money that a be and where to in forward

amount with new impact this in marketing on will could point have business plus across from short-term everybody growth, that industry. So rate that's the a -- on and will reduce got we've have system the headwinds retention of the

Yes.

Bottom with to we that and sustainable back go we for growth, grow term. mean, auto insurance, we buy long you to prospects Glenn's when profitable money think like know how really transformative I I business. growth.

why customers, when options. like growth which less You price really of transformative important it's going on nation auto Allstate, it's think the add business. to also to price insurance just investing. than of That's top is is important And multiples. we and value are that, a homeowners And look growth increase you in other . your essentially at

of from of Meredith Brian question UBS. Next line comes the

that here. interesting state your question of XX On at an quick you've A auto got supplement, looks here Slide chart profitability.

kind Just think if this a are on what on Or do an rate look on earned of states my as far pretty adequate? And would an currently basis, how close it's is on earned question chart to basis. written written is, basis? as is basis, this based you a

looking. do that's a if Well, we tough question. the -- take to Glenn, know don't you forward I want

it. take Yes, I'll Yes.

earned we in look definitely you on look when our it's ratios, basis. at at an it's So that combined earned basis

point. really a hitting you're important So

looking when -- I at we as where So XXX, XXX be of could the want be above example, percentage are and not at same at Because think do for it's astute that need that disclosure observation. feel in above the to at look states is we but the you that state way look about the now, you gotten the rate we adequate. right Because look we just could we've an to grow.

that we business on and a there. grow put new rate adequate would like, is to at level to we we any be So going want

when and estimate -- back go every and will the the which lag see X that . and we'll premiums earn -- of that because what a have of is, and by does premiums where not based an really it and that what today, we We So are percentage the state will you while snapshot to don't estimate. don't on reflect Page to state point where do. written But earn we disclose and that's got. increases all we've that that's does

with you for us thank Well, today. Okay. all engaging

execute or to As we will because both our so to improve about fan, next to those insurance continue both month component to meantime of value. we sustainable auto and to -- a of then in forward, profitability shareholder talking improve forward the homeowners multi-facet we get growth, go key look and and Transformative that's Growth in the

engagement, and you soon. you thank for So to your we'll talk

who much concludes you and participated. our to Thank to everyone call. so presenters today's conference This

a You may disconnect. day. now Have great