Allstate Corporation (The)

Thank you for standing by and welcome to Allstate's first quarter 2023 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star 1-1 on your telephone. If you wish to remove yourself from the queue, simply press star 1-1 again. As a reminder, today's program is being recorded. And now I'd like to introduce your host for today's program, Mr. Mark Nogle, Head of Investor Relations. Please go ahead, sir.

Thank you, Jonathan. Good morning. Welcome to Allstate's first quarter 2023 earnings conference call. After prepared remarks, we'll have a question and answer session. Yesterday, following the close of the market, we issued our news release and investor supplement, filed our 10-Q, and posted related material on our website at allstateinvestors.com. Our management team is here to provide perspective on these results. 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-K for 2022 and other public documents for information on potential risks. As some of you know, this will be my final earnings call as the leader of our investor relations team, as I will be transitioning to a new role in our P&C finance area, supporting National General. I'm leaving investor relations in the capable hands of Brent Vandermoss, who will be a great partner for all of you going forward. And now I'll turn it over to Tom.

Good morning. We're excited for Mark, and we're completely confident that Brent is going to give you everything you need to help you decide how and why you want to invest in Allstate. So good morning. We appreciate the investment of your time in Allstate today. Let's start with an overview of results, and then Mario and Jess, are gonna walk through the operating results and the actions that we're taking to increase shareholder value. So let's start on slide two. Allstate's strategy, as you know, has two components, increased personal property liability market share and expanded protection services. Those are shown in the two ovals on the left. If you go to the right-hand side of the slide, you can see a summary of the results for the first quarter. We had a net loss of $346 million in the first quarter, which reflects a property liability underwriting loss which was only partially offset by strong investment income and profits from protection services and health and benefits. We're making good progress on executing comprehensive plans to improve auto insurance profitability, and, of course, we'll have a substantive discussion on that today. Not to be overlooked, we also continue to advance the Transformer Growth Plan, which is to execute the top oval there, which is to increase property liability market share. At the same time, all state protection plans in the lower oval continues to expand its product offering and geographic footprint. Let's review the financial results on slide three. Revenues of $13.8 billion in the first quarter increased 11.8%, or nearly $1.5 billion, as compared to the prior year quarter. The increase was driven by higher average premiums in auto and homeowners insurance. resulting in a property liability earned premium growth of 10.8%. In the auto insurance line, higher insurance premiums and lower expenses were essentially offset by increased loss costs. So the profit improvement plan had not yet returned margins to historical levels. The auto insurance line had an underwriting loss of $346 million in the quarter. In homeowners, the story is really about $1.7 billion in catastrophes which led to an underwriting loss of $534 million. That total underwriting loss was just under $1 billion. Net investment income of $575 million benefited from higher yields, which mostly offset an income decline from performance-based investments. Protection services and health and benefits generated adjusted net income of $90 million in the quarter. As a result, the adjusted net loss was $342 million, or $1.30 a share. Now I'm going to turn it over to Mario to discuss property liability results.