Allstate Corporation (The)

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 11 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, Alistair Gobin, Head of Investor Relations. Please go ahead, Sarah.

Good morning, everyone. Welcome to Allstate's first quarter 2025 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 supplements 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 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 cover... Then we'll, as Alistair said, deal with any questions that you have. So let's start on slide two, which has Allstate's strategy and first quarter results. Allstate's strategy, of course, has two components, increased personal property liability market share and the expand protection provided to customers, which are shown in those two ovals on the left. On the right-hand side, you can see Allstate's strong performance in the first quarter. Revenues were $16.5 billion in the first quarter. up 7.8% compared to the first quarter of 2024. All state generated net income of $566 million in the quarter and adjusted net income of $949 million, which is $3.53 per diluted share. Adjusted net income return on equity was 23.7% over the last 12 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 quarter's results. Growing policies enforcing the property liability and protection services businesses will both generate increased earnings and should improve all states' 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 or 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 closes sales and employee voluntary benefits business for $2 billion on April 1st, so that's not in the results of that or not in this quarter, but it's because it happens 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 quarterly dividend to a dollar a share and instituted a billion and a half dollar 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 customer's value, And one of the key parts of that is lowering costs. And you can see on the left-hand side, the adjusted expense ratio, which excludes advertising costs, has improved by 6.7%, so 6.7 points, really, by 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 homeowner's product is now available in six states. Differentiated custom 360 middle market standard and preferred auto for independent agents is shown and 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 2024. 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 capability in the independent agent channel. So this quarter, personalized new business was 2.8 million items, a 27% increase over the prior year. The SAVE program, which stands for Show All State Customers Value Every Day, following our acronyms, is being embraced by employees and agents. with a goal of improving 25 million interactions this year, which builds on last year's success, which was over 20 million. Our objective is to increase customer retention and 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 liabilities, policies enforced on a year-on-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 2024 was half a point. So Allstate remains focused on increasing market share and profit liability and expanding protection provided to customers. Now let me turn it over to Mario.