Allstate has reported financial results for the first quarter of 2025, posting net income applicable to common shareholders of $566 million, down from $1.2 billion in the same quarter of the previous year. The decline was attributed to higher catastrophe losses during the period.
Total revenues rose 7.8% year over year to $16.5 billion. Adjusted net income was $949 million, or $3.53 per diluted share, compared to $1.4 billion in the first quarter of 2024. The adjusted net income return on common shareholders’ equity stood at 23.7%.
According to Allstate, its homeowners insurance segment within Allstate Protection recorded an underwriting loss of $451 million, compared to underwriting income of $564 million in the same quarter last year.
Gross written and earned premiums in the segment increased by 20.1% and 15.9%, respectively, driven by rate increases and a 2.5% growth in policies in force. Average gross written premiums in Allstate brand homeowners insurance were up 15.6% year over year, reflecting rate changes and inflation in insured home replacement costs.
Catastrophe losses totaled $2.8 billion during the quarter, largely stemming from California wildfires and March wind events. Allstate’s reinsurance program helped offset $1.0 billion of these losses, resulting in net catastrophe losses of $1.8 billion to $1.3 billion higher than the same period last year.
The homeowners insurance combined ratio reached 112.3, up 30.2 points from the prior-year quarter. The underlying combined ratio was 62.4, an improvement of 3.1 points.
Chair, president, and CEO Tom Wilson (pictured above) said that Allstate overall delivered a strong first quarter performance despite the severe weather events.
Allstate’s major hit in Q1 is a far cry from the figures it put up in 2024. According to a report from Insurance Business+, Allstate saw the greatest profit increase in the US for the first three quarters of the year.
One of the key drivers was a substantial 11.6% increase in property-liability earned premium. This growth was supported by ongoing premium rate hikes and high customer retention in the auto and homeowners’ insurance markets.
These pricing adjustments played a crucial role in offsetting the impact of elevated claims costs and a rise in catastrophe-related losses.
Allstate’s auto insurance division emerged as a standout contributor, generating $486 million in underwriting income for the quarter.
Meanwhile, Allstate’s property-liability segment reported earned premiums of $14 billion in Q1 2025, an 8.7% increase year over year. Premiums written rose 8.5% over the same period. The combined ratio for the segment was 97.4, which was 4.4 points higher than the first quarter of 2024, primarily due to increased catastrophe losses. Underwriting income was $360 million, down from $898 million a year ago.
Allstate Protection’s auto insurance business saw continued new business growth across channels, although total policies in force declined by 0.4%. New business applications increased 31.2%, but this was offset by lower retention. Written and earned premiums grew by 5.2% and 6.5%, respectively, supported by rate actions.
The company reported a combined ratio of 91.3 for auto insurance, a 4.7-point improvement from the prior year, reflecting favorable physical damage loss trends and reserve releases. Prior year non-catastrophe reserve reestimates contributed $238 million to the results, improving the combined ratio by 2.5 points.
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