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Fortune AIQ 75

The companies on the Global 500 employ 70.2 million people, and their revenue represents more than one-third of the world’s GDP.

Fortune Global 500

With a combined revenue of $21 trillion and $2.1 trillion in profits, the 2026 Fortune 500 is the definitive list of America's largest companies.

Fortune 500

The 300 companies on this year’s list brought in over $12.5 trillion in revenue for the latest 12 months, with the median revenue figure at $24 billion.

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The corporations on our annual list of the world's 500 largest companies combined to generate $41.7 trillion in revenue over the past year.

Almost $20 trillion in revenue—and a record-breaking $1.87 trillion in profits. Introducing the 2025 Fortune 500, the definitive list of the biggest companies in America.

The 300 companies on this year’s list brought in over $12.6 trillion in revenue for the latest 12 months, with the median revenue figure at $22 billion.

The corporations on our annual list posted aggregate revenues of $41 trillion for the second year in a row.

Industries included in the sector are banks, insurance, and real estate companies.

Fortune Sector Leaders: Financials

The Fortune 500, in its 70th year in 2024, ranks the biggest U.S. companies by revenue.

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The corporations on our annual list of the world’s largest companies delivered a record $41 trillion in aggregate revenues.

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F500-2023-084-Allstate

The insurance provider fell 18 spots on this year’s list as its revenue and profits both declined in 2022 from the year prior. 
<ul> 
 	<li>The insurance company’s revenue fell to $51 billion in 2022, down 3% from the year prior.</li> 
 	<li>Its profits took a nosedive in 2022. It lost $1.3 billion, a drop of 182% from the previous year. The company reported a net loss of $310 million in the fourth quarter in 2022 alone.</li> 
 	<li>CEO Tom Wilson blamed the rising cost of auto claims for the company’s losses. Many auto insurance companies struggled as auto claims became more expensive due to inflation and the increased cost of auto parts.</li> 
</ul>

Just as it dominates our economy, Big Tech now dominates Fortune’s annual ranking of corporate reputation.

Aggregate sales hit $37.8 trillion last year—an increase of 19%, the highest annual growth rate in the list’s history.

This year’s Fortune 500 marks the 68th running of the list.

F500-2022-066-Allstate

The insurance provider increased its revenue to $50.6 billion in 2021, enjoying a 20.7% jump from the previous year. Allstate’s strong growth came as the company reduced costs by divesting itself of $4.4 billion worth of ancillary businesses. The company also boosted its market share in the auto insurance space with its $4 billion purchase of National General. Allstate’s new-business acquisition for the year underperformed somewhat, however, with agents selling 2.5 million policies in 2021, down from 2.6 million the year before.

After a year in which humanity leaned more heavily than ever on tech giants, see which companies topped Fortune's ranking of corporate reputation.

Total revenue for the world’s biggest companies fell 4.8% to $31.7 trillion this year—the first decline in half a decade.

<span data-sheets-value="{&quot;1&quot;:2,&quot;2&quot;:&quot;The insurer moves up two spots, after a year in which revenues rose 0.3%, to $44 billion, while profits trended up nicely, rising 15% from 2019. In the first quarter of 2021, Allstate announced that it was divesting some businesses (life and annuity), which resulted in a $4 billion loss in the quarter. Still, adjusted net income (excluding the divestiture) was $1.9 billion, or $6.11 per common share, “representing a 23.2% return on equity over the last 12 months,” according to the company. Allstate shareholders have certainly been “in good hands”: The stock has been on a steady upward trajectory from its pandemic lows. The insurer’s odds of climbing higher on the list next year seem assured, given its acquisition of the nearly Fortune-500-size company National General Holdings (No. 535 on our list in 2020), which closed in January 2021.&quot;}" data-sheets-userformat="{&quot;2&quot;:12673,&quot;3&quot;:{&quot;1&quot;:0},&quot;10&quot;:2,&quot;11&quot;:4,&quot;15&quot;:&quot;Calibri, Arial&quot;,&quot;16&quot;:11}" data-sheets-textstyleruns="{&quot;1&quot;:0}{&quot;1&quot;:737,&quot;2&quot;:{&quot;6&quot;:1}}{&quot;1&quot;:744}">The insurer moves up nine spots, after a year in which revenues rose 0.3%, to $44 billion, while profits trended up nicely, rising 15% from 2019. In the first quarter of 2021, Allstate announced that it was divesting some businesses (life and annuity), which resulted in a $4 billion loss in the quarter. Still, adjusted net income (excluding the divestiture) was $1.9 billion, or $6.11 per common share, “representing a 23.2% return on equity over the last 12 months,” according to the company. Allstate shareholders have certainly been “in good hands”: The stock has been on a steady upward trajectory from its pandemic lows. The insurer’s odds of climbing higher on the list next year seem assured, given its acquisition of the nearly Fortune-500-size company National General Holdings (No. 535 on our list in 2020), which closed in January 2021.

This year’s Fortune 500 marks the 67th running of the list.

F500-2021-70-Allstate

<span data-sheets-value="{&quot;1&quot;:2,&quot;2&quot;:&quot;The insurer moves up two spots, after a year in which revenues rose 0.3%, to $44 billion, while profits trended up nicely, rising 15% from 2019. In the first quarter of 2021, Allstate announced that it was divesting some businesses (life and annuity), which resulted in a $4 billion loss in the quarter. Still, adjusted net income (excluding the divestiture) was $1.9 billion, or $6.11 per common share, “representing a 23.2% return on equity over the last 12 months,” according to the company. Allstate shareholders have certainly been “in good hands”: The stock has been on a steady upward trajectory from its pandemic lows. The insurer’s odds of climbing higher on the list next year seem assured, given its acquisition of the nearly Fortune-500-size company National General Holdings (No. 535 on our list in 2020), which closed in January 2021.&quot;}" data-sheets-userformat="{&quot;2&quot;:12673,&quot;3&quot;:{&quot;1&quot;:0},&quot;10&quot;:2,&quot;11&quot;:4,&quot;15&quot;:&quot;Calibri, Arial&quot;,&quot;16&quot;:11}" data-sheets-textstyleruns="{&quot;1&quot;:0}{&quot;1&quot;:737,&quot;2&quot;:{&quot;6&quot;:1}}{&quot;1&quot;:744}">The insurer moves up two spots, after a year in which revenues rose 0.3%, to $44 billion, while profits trended up nicely, rising 15% from 2019. In the first quarter of 2021, Allstate announced that it was divesting some businesses (life and annuity), which resulted in a $4 billion loss in the quarter. Still, adjusted net income (excluding the divestiture) was $1.9 billion, or $6.11 per common share, “representing a 23.2% return on equity over the last 12 months,” according to the company. Allstate shareholders have certainly been “in good hands”: The stock has been on a steady upward trajectory from its pandemic lows. The insurer’s odds of climbing higher on the list next year seem assured, given its acquisition of the nearly Fortune-500-size company National General Holdings (No. 535 on our list in 2020), which closed in January 2021.

For an astounding 13th straight year, Apple claims the top spot in Fortune’s annual ranking of corporate reputation, based on a survey of almost 3,800 executives, directors, and analysts.

This year's Fortune Global 500 generated $33.3 trillion in revenues and $2.1 trillion in profits.

G500-2020-263-Allstate

Allstate rebounded well in 2019 after the challenges of the previous year, when Hurricane Michael and the historic California wildfires resulted in higher payouts and a 29% decline in profit. Fewer catastrophe claims helped the Northfield Township, Ill. insurer climb 45 spots in the Global 500 rankings this year. Revenues rose 12% year-over-year, to $44.7 billion, while net income, aided by increased premiums, grew a substantial 133%, to $4.7 billion. CEO Tom Wilson has also attributed the profit surge to cost-cutting measures and increased investment in technology. One example of the latter: a new identity-theft protection product called Digital Footprint, which allows customers to view all websites with accounts that have their personal information, and helps them track data breaches that might affect them.

This year's Fortune 500 marks the 66th running of the list.

F500-2020-072-All-State

Allstate rebounded well in 2019 after the challenges of the previous year, when Hurricane Michael and the historic California wildfires resulted in higher payouts and a 29% decline in profit. Fewer catastrophe claims helped the Northfield Township, Ill., insurer climb 10 spots in the 500 rankings this year. Revenues rose 12% year-over-year, to $44.7 billion, while net income, aided by increased premiums, grew a substantial 133%, to $4.7 billion. CEO Tom Wilson has also attributed the profit surge to cost-cutting measures and increased investment in technology. One example of the latter, a new identity-theft protection product called Digital Footprint, allows customers to view all websites with accounts that have their personal information, and helps them track data breaches that might affect them.

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Change the World

This year's Fortune 500 marks the 63rd running of the list.

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Global business is back. After limping through a worldwide financial crisis and economic slowdown, the 500 largest companies ranked by revenues shattered all sorts of performance records in 2013: They racked up combined revenues of $31.1 trillion, up 2.5% from 2012, and profits soared 27% to nearly $2 trillion. China’s 95 companies (up from 89 last year) posted $5.8 trillion in revenues. The U.S. has four fewer companies on the list than last year but remains (for now) the country leader, with 128 corporations on the list—including No. 1 Wal-Mart Stores—reporting $8.6 trillion in revenues. 

Wal-Mart stayed on top as its sales crept closer to half-a-trillion dollars. Apple moved into the top five. And UnitedHealth Group continued its steady climb. 

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Allstate provides a wide variety of insurance products—auto, home, and life among them—throughout the U.S. and Canada. When the firm, founded in 1931, went public in 1993—parent company Sears sold nearly 20% of its holdings—it was, at the time, the largest IPO in history. The company has been known since the 1950s for its slogan “You’re in good hands."

Q2 2026

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Q4 2025

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Q4 2024

Allstate (ALL): Company Profile, Stock Price, News, Rankings

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Allstate

allstate

Good day and thank you for standing by. Welcome to Allstate's First Quarter Earnings Investor Call. At this time, all participants are in a listen only mode. After prepared remarks, there will be a question and answer session. To ask a question during this session, you'll need to press star one, one on your telephone.

Please limit your inquiry to one question and one follow-up. As a reminder, please be aware that this call is being recorded. And now I'd like to introduce your host for today's program, Alastair Gobin, Head of Investor Relations. Please go ahead, sir.

Good morning, everyone. Welcome to Allstate's first quarter twenty twenty five earnings call. Yesterday, following close of the market, we issued our news release and investor supplement, filed our 10 Q, and posted related materials on our website at allstateinvestors.com. Today, our management team will share perspective on our strategy and how Allstate is creating shareholder value. Then we will have a question and answer session.

As noted on the first slide of the presentation, our discussion will contain non GAAP measures for which there are reconciliations in the news release and investor supplement and forward looking statements about Allstate's operations. Allstate's results may differ materially from these statements, so please refer to our 10 ks for 2024 and other public documents for information on potential risks. And now I'll turn it over to Tom.

Good morning. Thank you for investing your time with Allstate.

I'm going to start with an overview of results and then the progress we're making on transformative growth. Mario will then cover property liability results. John will go through investments and Jessica can talk about protection services. Then we'll, as Alistair said, have any deal with any questions that you have. So let's start on slide two, which has Allstate strategy and first quarter results.

Allstate strategy, of course, has two components, increased personal property liability market share and expand protection provided to customers, which are shown in these two ovals on the left. On the right hand side, you can see Allstate's strong performance in the first quarter. Revenues were $16,500,000,000 in the first quarter, up 7.8% compared to the first quarter of twenty twenty four. Allstate generated net income of $566,000,000 in the quarter and adjusted net income of $949,000,000 which is $3.53 per diluted share. Adjusted net income return on equity was 23.7% over the last twelve months.

So we work on shareholder value with a balanced set of priorities. First, generating attractive returns on capital, which you can see from this year this quarter's results. Growing policies enforced in the Property Liability and Protection Services businesses will both generate increased earnings and should improve Allstate's valuation multiples. A diversified investment portfolio generates attractive returns on capital, which John will cover. Proactive enterprise risk and return management is also important and that includes whether that's utilization of reinsurance, our capital transactions or cash returns to shareholders.

Mario will discuss the benefits of our approach to reinsurance when we go through property liability. Justice team closed the sale of employee voluntary benefits business for $2,000,000,000 on April 1, so that's not in the results of that or not in this quarter, but it's because it happened shortly thereafter, we want to make sure we call it out for you. And that's the first of two large sales from that business segment. As you know, we increased the quarterly dividend to $1 a share and instituted $1,000,000,000 share repurchase program. Slide three is an update on the execution of transformative growth strategy in the property liability business.

So there are five integrated components to this strategy to increase market share, one of which is to improve customers' value and one of the key parts of it is lowering costs. And you can see on the left hand side, the adjusted expense ratio, which excludes advertising costs, has improved by six point seven percent six point seven points, eliminating outsourcing digitizing work, using less real estate and aligning our distribution expenses with customer value. And those lower costs enable us to offer more competitive prices without impacting margins. Substantial progress has also been made on other components, several of which are listed on the right. New Allstate branded affordable, simple and connected auto insurance are now available in 36 states, and we have the companion homeowners product is now available in six states.

Differentiated custom three sixty middle market standard and preferred auto for independent agents is now in 31 states. One of the most significant changes is the expansion of customer access to improve growth, which resulted in increased new business from all channels this quarter versus the first quarter of twenty twenty four. This effort has three components, improve Allstate agent productivity, expand our direct sales and then increase independent agent distribution, all of which have been successful. Allstate agent productivity has increased, enhancements to direct capabilities are lower pricing and increased advertising are attracting more self directed customers. The National General acquisition significantly expanded our presence and capabilities in the independent agent channel.

So this quarter, personalized new business was 2,800,000 items, a 27% increase over the prior year. The SAVE program, which stands for Show Allstate Customers Value Every Day, following our acronyms, It's being embraced by employees and agents with a goal of improving 25,000,000 interactions this year, which builds on last year's success, was over 20,000,000. Our objective is to increase customer retention, an important driver of growth. The combination of strong new business levels and an improvement of retention is a path to market share growth. We're beginning to see signs of growth.

So property liability policies in force on a year over year business have stopped declining. And of course, that was due to the significant auto price increases and the economic decision to reduce new business in 2022 and 2023. Sequential growth over the end of twenty twenty four was half point. So Allstate remains focused on increasing market share and property liability and expanding protection provided to customers. Now let me turn it over to Mario.

Thanks, Tom. Let's take a look at first quarter property liability underwriting results on slide four. As you can see from the table on the left, the property liability business generated $360,000,000 of underwriting income this quarter. The combined ratio of 97.4% was 4.4 points above the prior year quarter, primarily due to $3,300,000,000 in gross catastrophe losses during the quarter, which was significantly higher than the first quarter of last year. This was partially offset by recoveries from a comprehensive reinsurance program, higher average earned premiums, favorable non catastrophe prior year reserve re estimates and favorable underlying loss trends.

The auto combined ratio was 91.3% in the quarter as average earned premium increases outpaced losses, driven by favorable physical damage loss cost trends. The underlying homeowners combined ratio, which excludes the impact of catastrophes and prior year reserve estimates, remained in our targeted low 60s range. While there may be fluctuations in catastrophe losses, the homeowners business consistently generates profits with a ten year recorded combined ratio of 91.5. Now let's move to slide five to discuss first quarter catastrophe results in more detail. Our claims team worked tirelessly to support over 70,000 customers as they recovered from the devastating California wildfires and a series of severe weather events that impacted multiple regions across the country in the first quarter.

The chart on the left depicts gross catastrophe losses as a percent of earned premium for the last ten years. As you can see, 2025 represents an outlier year that was more than three standard deviations above the mean, driven by the California wildfires represented by the orange bar. We generally do not see wildfire activity in the first quarter of the year. Wind and hail events represented by the dark gray bars were above the five and ten year averages, but there is no clear pattern over the last ten years for these perils. In the table on the right, you can see this quarter's catastrophe loss ratio and number of events by peril compared to five year and ten year averages.

On the second to the last row of the table, you can see the impact of our approach to risk and return management, which includes a comprehensive reinsurance program that reduces capital requirements by lowering catastrophe loss tail risk and earnings volatility. In the quarter, we had reinsurance recoveries of $1,100,000,000 primarily due to the California wildfires, but recoveries were also generated from aggregate catastrophe losses from events over $50,000,000 that occurred over the past twelve months. As I said earlier, while we expect some quarter to quarter volatility in the homeowners line of business, our industry leading capabilities remain a competitive advantage and we view homeowners insurance as a growth opportunity. Turning to slide six, let's discuss how expanded access under transformative growth is starting to increase growth. In the chart to the left, you can see the composition of property liabilities 37,700,000 policies in force.

Auto insurance in the dark blue makes up two thirds of total policies and ended the quarter with 25,100,000 policies in force, which was down 0.4% compared to last year. Homeowners with 7,500,000 policies is about 20% of the total and continued to grow this quarter, increasing 2.5 versus prior year. Total property liability policies grew by 0.1% in the quarter. As Tom discussed, expanding distribution to include capabilities across the exclusive agent, direct and independent agent channels is a key component of transformative growth. The stacked bars in the chart on the right demonstrate the impact of those expanded capabilities.

Auto new business applications were 31.2% above prior year, with strong growth across all three distribution channels. And while relatively evenly distributed across channels, the direct channel generated the most auto new business volume this past quarter. The increase in new business applications was offset by lower retention, resulting in an overall slight decline in auto policies in force. We continue to focus on improving retention trends by both increasing value and improving interactions with existing customers, which Tom described previously. Homeowners new business also continued to increase, growing by 10% this quarter.

Exclusive agents who produce the highest volume of homeowners business continue to bundle at historically high rates, and we're making strong progress in the direct channel. Transformative growth is building momentum, and we are confident that expanded distribution, differentiated products, and increased customer value will lead to property liability market share growth. Now I'll turn it over to John.

Thanks, Mario. Turning to investments on slide seven, I'll cover how our proactive investment management approach creates value. First,

to point out that our portfolio has been designed for resiliency in varying market conditions, and it is built to support enterprise risk and return objectives at all times. As you can see from the pie chart, the portfolio is well diversified, allocated largely to public interest bearing assets, with some allocation to performance based assets, including private equity, private real estate, infrastructure and opportunistic. About 85% of the portfolio is in publicly traded securities, affording us the flexibility to dynamically adjust exposures to manage risk and seize opportunity. We use a proprietary dynamic asset allocation process, which uses an enterprise wide risk and return lens. Additionally, we lever both internal and external asset class experts to deliver performance that exceeds a passive approach and builds resiliency into the strategy.

Our active management has helped us preserve capital in down markets without sacrificing long term gains. On the bottom left of the slide, you'll see proof points of our success in active portfolio management. Let me describe how this has worked by focusing on late twenty twenty one. Auto insurance margins were beginning to decline because of inflation in used car prices parts, and we felt equity valuations were relatively high. As a result, we took down risk in the portfolio by reducing public equity exposure.

Additionally, we mitigated the adverse valuation impacts of rising inflation and rising rates by decreasing the portfolio's fixed income duration. As bond yields rose, we extended our duration, capturing higher market yields for longer and positioning the portfolio to benefit from rate declines. This is a prime example of our enterprise approach to portfolio. The portfolio is well positioned to face market uncertainties with over 81% in income generating assets. On the bottom right, you can see our active allocations, including performance based strategies.

Our team of asset managers has delivered performance consistent with upper quartile managers. Proactive investment management has consistently enhanced shareholder value and we continue to work to deliver similarly strong results moving forward. Now I'll pass it over to Jess.

Thank you, John. Let's move to slide eight to cover how Protection Services is providing additional growth platforms for Allstate. Allstate embeds protection in the flow of commerce through a range of strategic partnerships that include retailers, auto dealers, mobile phone carriers, benefit brokers, and financial institutions. We deliver protection to customers through product warranties to cover important purchases like automobiles, furniture and consumer electronics. Other examples of the protection we provide include identity protection and recovery services as well as roadside assistance.

The largest business in this segment is Allstate Protection Plans, which we acquired as SquareTrade in 2017 for $1,400,000,000 This business provides protection against broken or damaged consumer products, including computers, tablets, TVs, mobile phones, major devices

On the right side of the slide, you can see the excellent progress we've made in profitably growing Allstate Protection Plans business. Since the acquisition, our customer base has grown over four times and we now serve 162,000,000 customers in 18 countries. The Allstate brand has helped to secure distribution partnerships with large retailers in North America, providing access to a broader customer base through traditional retail channels and e commerce platforms. Allstate has partnered with five Fortune 40 companies and customers can now purchase protection plans at several major retailers. In the past twelve months, the business has generated $162,000,000 in adjusted net income, which is seven times greater than 2018, which was the year after we acquired the business, in the first year that it was profitable.

The Protection Services segment allows Allstate to build for the future with a broad protection offering suite that provides a diversified source of profitable growth. Now I want to wrap up on slide nine. Allstate remains focused on creating shareholder value. Strong underwriting capabilities position Allstate for continued success. Transformative growth is positively impacting property liability policies in force, and we remain focused on execution.

We take a balanced approach to investment risk and return, and we're building for the future with expanded protection offerings. Excellent capital management will continue to create lasting shareholder value. We remain confident in our strategy and ability to deliver value for shareholders and protection to our customers. Our first quarter results were strong, and we're entering the remainder of 2025 with a solid foundation. With that, I'd like to open it up for your questions.

Certainly. Our first question comes from the line of Jimmy Bhullar from JPMorgan. Your question please.

Hey, good morning. So I had a couple of questions, but maybe first starting with just your views on competition some auto frequency has been pretty favorable for you guys, for many of your peers as well. And are you seeing that result in companies getting a little bit more aggressive on pricing? Or do you feel competition is fairly rational overall?

Jimmy, I'll start and then Mario can jump in. First, you're seeing a reduction in the rate of increases in auto insurance this year versus 'twenty two, 'twenty three, And then it started to come down in '24. And it's a little bit lower this year. So which says that people are operating in basic kind of where they want to be from a profitability standpoint, one of the large competitors is still a little bit lagging, taking larger price increases, but they'll catch up. So I think what you can say is the industry is operating in good profitability.

All of those competitors have the objectives of profitable growth. So I don't see us headed into sometimes what you see in the commercial market, soft markets where people are chasing volume by lowering rates. So I don't see us moving into an aggressive rate reduction, particularly when you look going forward and the possible impact of tariffs. Art, anything you want to add to that?

Yes, Jimmy, I would say that it's really the combination of favorable frequency, which I think we and the industry have experienced and the moderation of physical damage severity is really that's been the story. I think that's improved margins broadly. And to Tom's point, I think the competition has leaned into growth more heavily, certainly as margins have improved. We still think it's a rational market. We like our capabilities and our ability to lean into what we've been doing with transformative growth to grow going forward.

But I would still characterize it as a rational market from a pricing perspective.

And Jimmy, I would say in that market, we wrote 2,800,000 new pieces of business in profit margin. Last quarter. Yep. That's one.

on the PIF count, obviously, you're not raising prices to the same extent as you were before, which means that your persistency should remain good or get better. And then just with more marketing spending, that should help new business volume, which sort of implies that the sort of turn that you've seen in PIF should sustain, but any reasons to believe that that the recent improvement would not continue?

Well, there's two pieces to that. Let me address it, Mara, you can jump in here. First, to grow, you're right, we need to write more new business. And then we also need to keep more existing customers we have persistency or in our vernacular retention. So new business levels were way up at a percentage versus the first quarter of last year, but they're kind of where we were at the end of last year, which says we're able to sustain this kind of new business volume on an ongoing basis because of the breadth of our distribution, our competitive pricing, our advertising, all the things you mentioned.

So we feel good about where we're at in new business. In retention, it lags much as the way it lagged on price going up. So when we were raising rates, we used to remember to show you the chart and said, here's what we did this quarter. But keep in mind, it takes about twelve to eighteen months to really come into the P and L. The same thing happens to customers and because they don't pay it right away.

And even when they do pay it right away, sometimes they don't shift right away. So your retention lags just as it would on the price increase. So our retention is flattened out and maybe Mario wants to talk about that. And our efforts in the SAFE program are to drive it up, besides just not taking more rate. We ought to be giving people more for what

Yeah, let me just maybe do a quick double click on retention, because I think the new business volume that we disclosed is pretty self explanatory. On retention, Jimmy, qualitatively, what I would say is it's down year over year, so Q1 to Q1. But as Tom indicated, it's stabilized in the same zone really that it's been over the past couple of quarters in Q1. Some of that is because there's less rate activity in the system.

But I think our view is while less rate will help, we're not waiting for that to improve retention. The SAVE program is intended to favorably impact customer interactions across at least 25,000,000 customers. One of the components is to improve affordability for customers by proactively engaging with them to make sure that they've got the right coverage, the right discounts, things like deductibles and so on, and they can get the best possible price from us, which we believe will help retention. The other part of it is just to improve the overall customer experience and how they interact with us. So we're leaning into that, as Tom mentioned earlier, both through our employees, our agency owners to really proactively engage with customers, improve the experience, improve affordability.

And that along with a more stable rate environment, our intent is to have that drive improved retention.

Thank you. And our next question comes from the line of Rob Cox from Goldman Sachs. Your question, please.

Hey, thanks. For my first question, maybe a similar line of questioning, but the new issued applications, as you mentioned, accelerated meaningfully in the quarter. I'm just curious if you think this level of new apps is being flattered by an unusually high amount of shopping, or if you think this level or higher can actually be maintained with further advertising investment and product rollout.

Well, as I mentioned, Rob, that the new business levels this quarter were similar to what we had towards the end of last year. So we are maintaining it and we're comfortable there. Our appetite depends on what states we're in advertising. So we want to grow as fast as we can. We don't really have any capacity constraints right now in terms of number of agents, number of people in the call centers or on the web or independent agents.

So rolling out affordable, simple, connected products are what really drives most of the growth. We mentioned we're not in all the states yet. So as we roll that out in the rest of the auto states and we get homeowners to go with it, it's a much better experience, better product. So we think we still have upward potential. Do I think it's going to be 27%?

No, because it wasn't 27% over the fourth quarter. So do I think we have a great distribution system that's scalable 100%.

Got it. Thank you. And then maybe following up on the auto underlying loss ratio. I was just wondering if there's anything unusual embedded, maybe any tariff impacts or anything like that contemplated in the loss ratio. I noticed it was kind of one of the first quarters in a long time that the underlying loss ratio actually went up in the first quarter versus the fourth quarter.

Me on auto insurance, probably I'll make comments. Mario can jump in here. First, when you evaluate it at the absolute level, it's outstanding. We are getting really strong returns on capital. We're better than our targets.

It's broad based across the country and by risk level inside the auto book. So we're feeling really good about where it is. I think quarterly comparisons are really not that meaningful, to be honest. You got all kinds of things happening. Fourth quarter has got different kind of weather than the first quarter.

So you have frequency bounces and then you have, of course, just weather changes, not even inside individual quarters. And then the type of weather and the type of accidents also changes the mix of your claims, which has some impact on severity. And those can easily move a combined ratio by a point to two points. So I don't get that focused on that. If you want to look at it on a longer basis, first quarter looks great with a lot of them where we're at.

Mario, what would you add about like breadth and depth?

Yeah, look, I think when we look at auto profitability, certainly in absolute terms, the combined ratio is performing exceptionally well. And when we look at a state level with literally a handful of exceptions, we like where our price position is and our rate adequacy and feel really good about profit levels across the vast majority of states that we operate in. The trend on profitability is really unchanged from the last couple of quarters. We continue to earn the rate that we implemented over the last twelve months. And then we look at loss cost, the combination of favorable frequency and physical damage to severities and loss cost kind of flattening out.

You actually saw a drop in pure premium year over year, and that drove a pretty substantial improvement in the underlying combined ratio in auto. But we feel good about auto profitability. And that's one of the things that as margins improved over the course of last year, we opened up markets and we started to expand our risk appetite for new business. And we're going to continue to do that because we feel good about where we're positioned from a margin perspective.

Thank you. And our next question comes from the line of Gregory Peters from Raymond James. Your question, please.

Good morning, everyone. I would like to pivot to Slide three of your presentation, where you highlight the improvement in the adjusted expense ratio since 2018. And I'm just trying to understand what your objective will be, say, for the next five years. Do you anticipate bringing this down below 20%? And inside the expense ratio for the first quarter, we did note that it looks like the advertising expense was down sequentially a little bit.

So I know that's outside of the adjusted expense ratio, but maybe you can tie in with your answer or perspective on advertising expense.

So, morning, Greg. We haven't put a target out for expenses, but our goal should always be to lower expenses. And that's both as a percentage and in an absolute dollar basis. So some of the decline, of course, as you raise prices faster than the cost of inflation, then your expense ratio goes on. That's not the way to really get there for your customers.

So we've made but we've made substantial cuts in absolute expenses, and we're going back at it again. Jess is now just starting to lead a new effort to go back. And so we don't have a goal, but expect it to keep coming down. We think with our new technology platform and new technologies available out there that there's the opportunity to digitize and eliminate a number of processes that are done by people today, which will be faster, better and cheaper for customers. So we're back at it again.

We're excited about it. We think there's good opportunity On advertising, it depends how good we think the opportunities are to grow, where we're trying to get into markets, whether we're launching new products. So fourth quarter was a high watermark for us. We were testing some new stuff. I don't expect it to stay at that fourth quarter level really any time this year that we were really leaning to see how much we could drive growth in its workforce.

And what we'll do is to extend its economic, we'll continue to spend. If it's not economic, then we won't. And that means both are you getting a good return, are people shopping, buying your product, you have a competitive price And how do you feel about your margins going forward? We feel really good about our margins going forward in both auto and home. So you should expect to see us do more there.

Okay. I guess for my follow-up question, I'll pivot to the slide five, which is the catastrophe loss slide. I thought your chart there on the left is interesting, you know, in the context of framing, what goes beyond one standard deviation and two standard deviations. So inside that disclosure, a couple things, you know, first of all, it looks like, you know, there could be some material subrogation event for you on the wildfire. So I'm just curious how that might change your perspective on whether this is a two standard deviation or three standard deviation event.

And then secondly, in your first quarter supplement, you provided a reinsurance update and it looks like you raised some of the limits, so maybe you can talk a little bit about that.

Well, thank you for liking our slide. We work hard on them.

to take the first part? And Jess, do you want to take the reinsurance?

Yes. So Greg, the first thing I'd say is obviously the chart on Page five, those are gross losses, so they're not net of reinsurance. And the reinsurance recoveries we did disclose in the first quarter, '1 point '1 billion the bulk of which was California wildfire related, and the net loss does not consider any subrole recoveries. Having said that, to the extent there are potential subrole recoveries from at fault parties, we would certainly want to pursue those. And there is that new wildfire fund that was established by the utilities in California.

I think it's funded at about $15,000,000,000 or so with additional capacity beyond that. So to the extent there is subrole that we can pursue, we would certainly do that. But we have not reflected any of that in our numbers. And ultimately, the dollars would recover given that we're into the reinsurance layers will go to reinsurers. It's also our customers' money as well.

And I think to the extent it provides relief from our rating perspective, it's the right thing to do for our customers.

Now on the reinsurance program, just a reminder to everyone, we do post a very robust disclosure on the changes so that you can find on our investor website. We did place the bulk of the national program this quarter and so we've announced that. You can see and I'm sure this is what you saw Greg, reinsurance limit purchase was up $1,500,000,000 that's about 21% and that now we have single event protection up to $9,500,000,000 up from just under $8,000,000,000 last year on a per occurrence basis.

doing that really to reflect the change in the risk profile. We buy reinsurance based on our risk and return framework and our economic capital model, And the market in the placement went very well. We split it evenly between traditional markets and the catastrophe bond or the ILS market and had good support for the program this year. On a risk adjusted basis, the cost will be down, which I think is a really good outcome and it helps protect us from single event risk like we saw recently. We'll announce the remainder of the program that gets placed in Q2 at the end of next quarter and that's just as a reminder that's the Florida program and then the National General Lender Place Program reinsurance gets done this quarter.

So all in all, again, we have very detailed disclosure that we put out, but in general, we increased the total limit that we bought this year to reflect the expansion of the homeowners both on the expansion of risk.

Hey, Greg, let me just add on to it. So it's really the homeowners business is growing. I mean, there's a lot of conversation appropriately on auto insurance growth, we're, of course, highly focused on that. But the home insurance business, it just units for up 2.5 points. As far as I know, we're not adding 2.5% to the housing stock, and I'd say, which means we're picking up unit share.

And then it's mid teens growth in revenue. That's a growth business. And I feel like it's been overlooked by some people. We've had some shareholders recently saying, oh, that's a story not being told. So I'm trying to tell the story on their behalf and our behalf.

It is a good growth business, which is why we need more reinsurance.

Thank you. And our next question comes from the line of Bob Jung Hong from Morgan Stanley. Your question please.

Yes, good morning. So maybe one real quick on how we should think about essentially the capital position, right? So you bought back about $100,000,000 of stock this quarter. Just given the market volatility, you're fairly stable capital position. Curious

think about capital allocation, but also capital return at this point of the junction given market has been volatile, your shares has been moving around?

I'll start and maybe Jess, you want to jump in. First, we're very comfortable where we're at. We've got plenty of capital. We've got it's in the right places. We're earning good returns.

We've got the right risk profile. As John talked about, we look in our capital position relative to the whole enterprise in terms of our investment risk as well as our insurance risk. We're really comfortable with where we're at there. We're also comfortable with our program of how we're deploying it, first into growth and because that generates the kind of ROEs that we talked about earlier in the conversation. Secondly, to the extent we need don't we have cash, we can give it to investors and we do.

And we have a great track record of doing that. We're comfortable with the $1,000,000,000 share repurchase program. We're 100,000,000 in. So it's a little early to start talking about what else we're going to do. Jeff, anything else you want to know?

it, Tom. We use and we've talked about this Bob. We use a sophisticated economic capital framework to look at our capital position. We're doing that continually and looking at priorities the way that Tom laid out. So you saw the announced repurchases, as Tom said, were $100,000,000 into $1,000,000,000 So we've got a little bit of time on that.

We'll continue to watch where we sit relative to our target.

Okay. No, that's very helpful. So it's not you're not front loading April for buybacks, I guess is what I'm trying to say, right?

From a pace perspective, we don't put forward guidance out on how we're going to repurchase stock. What we do is we like to have a continual presence in the market with our repurchases, Bob. So you can see what we did in Q1 and sort of project out the meeting where we announced was the February, So we effectively did the $100,000,000 over about a month. And we like to have that consistent presence in the market. So I would say on a go forward basis, we'll continue to evaluate and adjust as needed.

But that gives you some sense for the pace of what we did in the first quarter.

Okay. No, thank you. So my second question, just maybe thinking about California. Obviously, some competitors are facing more challenges in the homeowner environment. If if homeowner competitors were to pull back, does that disrupt their bundling strategy in your view?

Do you think the current environment in California changes the competitive environment there and then a consequence, maybe makes an opening for you? I understand that California previously has been a challenge, but maybe just any color there.

Allstate (ALL) Q1 2025 Earnings Call Transcript

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