11th February 2018

Allstate has positive year

“In 2017, Allstate excelled at delivering strong current results and implementing multiple initiatives to drive long-term profitable growth,” said Tom Wilson, chairman and ceo Allstate Corporation. “Policies in force reached 82.3 million, revenues grew 5% to $38.5bn and net income was $3.07bn due to strong performance from our market-facing businesses and investments. The Tax Cuts and Jobs Act resulted in a $506m increase to net income and will provide future additional resources to accelerate the company’s strategies. Fourth quarter adjusted net income was $762m, excluding the impact of tax reform and goodwill impairment related to changes in reportable segments, as auto and homeowners insurance margins remained strong and performance-based investments had outstanding results. Adjusted net income return on equity was 13.3% for 2017 and book value per share increased by 13.4% for the year. Shareholders received cash returns of $1.9bn in 2017, which was 6% of the average market capitalisation, through a combination of dividends and share repurchases.
This operational strength will enable us to accelerate growth in 2018 while maintaining attractive returns. Allstate brand policies in force increased in the fourth quarter from the third quarter, reflecting a shift earlier in the year from improving auto insurance margins to growing profitably. We expect the underlying combined ratio for the Property-Liability business to be between 86 and 88 for 2018, including additional growth investments as a result of the recent tax cuts. Investments in marketing, distribution, telematics, new products and technology are being accelerated. Allstate Benefits, SquareTrade and Esurance are also expected to contribute to growth in 2018. Reflecting this outlook and a reduction in the US federal income tax rate, the quarterly dividend has been increased 24% to 46 cents per share for the first quarter of 2018.”

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