Allstate Corporation (The)

Good day and thank you for standing by. Welcome to Allstate's first quarter earnings investor call. Currently, 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 11 on your telephone. If your question has been answered and you'd like to remove yourself from the queue, simply press star 11 again. 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, Fred Vandermeer, head of investor relations. Please go ahead, sir.

Thank you, Jonathan. Good morning and welcome to Allstate's first quarter 2024 earnings conference call. Yesterday, following the close of market, we issued our news release and investor supplement, filed our 10-Q, and posted today's presentation, along with our reinsurance update, onto our website at allstateinvestors.com. Our management team is here to provide perspective on these results and our strategy. After prepared remarks, 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-K for 2023 and other public documents for information on potential risks. Before I turn the call over to Tom, I would also like to provide an update on our monthly financial disclosures. Since early 2022, implemented rate actions from the prior month have been included in our monthly release and disclosed on our investor relations website to provide additional transparency on our proactive response to the rapid rise in loss costs. Going forward, our implemented rate disclosures for auto and homeowners insurance will be disclosed on a quarterly basis instead of monthly within our investor supplement. And now I'll turn the call over to Tom.

Well, good morning. Thank you for investing your time and having interest in explaining why Allstate is such an attractive investment opportunity. I'll begin with an overview of the results, and then Mario and Jess are going to walk through the operating performance, and then, as Brent mentioned, after that we'll have time for Q&A. Let's begin on slide two. Allstate's strategy has two components, which are shown on the left there. Increased personal property liability market share and expanded protection provided to customers. On the right-hand side, you can see the highlights for the quarter. So we generated net income of $1.2 billion in the first quarter. The profit improvement was broad-based. It reflects successful execution of the auto insurance profit improvement plan. attractive homeowners insurance margins, and they also benefited from lower catastrophe losses in this quarter. Then investment income was up almost 33%, reflecting the 2022 and 2023 repositioning into longer duration, higher fixed income yields, and then yields also went up some. And we had good performance-based evaluations this quarter as well. Protection services also had a good quarter, and that was led by protection plans and roadside services. If you go down to the bottom, what do we do from here? We have a broad approach to further increase shareholder value. First, improving auto profitability in underperforming states will increase returns. Secondly, we're focused on increasing policies and force under the Allstate brand while continuing to expand national general. Mario's going to talk about that in a few minutes. Allstate's integrated approach to investing has and will continue to create value for shareholders. Expanding protection services will benefit both our customers and shareholders. And then the sale of the health and benefits business to a buyer that can further leverage our success will create more shareholder value. Although I point out it will have a short-term negative impact on return on equity. Let's review the broad-based profit improvement on slide three. So revenues were $15.3 billion in the first quarter, reflecting a 10.9% increase in property liability earned premium. And that, of course, was primarily due to rate increases in both auto and homeowners insurance. Over the last 12 months, property liability rate improvements have increased by almost $5 billion on an annual basis. That investment income in the quarter was $764 million, or 32.9% for the prior year. And that reflects those higher fixed income yields and the duration extension I just mentioned. The strong profitability in the quarter generated adjusted net income of $1.4 billion, or $5.13 per diluted share. Now let me turn it over to Mario to go through property liability results.