The Allstate Corporation (ALL) | Investment Case

1. Company Snapshot

1.a. Company Description

The Allstate Corporation, together with its subsidiaries, provides property and casualty, and other insurance products in the United States and Canada.The company operates through Allstate Protection; Protection Services; Allstate Health and Benefits; and Run-off Property-Liability segments.The Allstate Protection segment offers private passenger auto and homeowners insurance; specialty auto products, including motorcycle, trailer, motor home, and off-road vehicle insurance; other personal lines products, such as renter, condominium, landlord, boat, umbrella, and manufactured home and stand-alone scheduled personal property; and commercial lines products under the Allstate and Encompass brand names.

The Protection Services segment provides consumer product protection plans and related technical support for mobile phones, consumer electronics, furniture, and appliances; finance and insurance products, including vehicle service contracts, guaranteed asset protection waivers, road hazard tire and wheel, and paint and fabric protection; roadside assistance; device and mobile data collection services; data and analytic solutions using automotive telematics information; and identity protection services.This segment offers its products under various brands including Allstate Protection Plans, Allstate Dealer Services, Allstate Roadside Services, Arity, and Allstate Identity Protection.The Allstate Health and Benefits provides life, accident, critical illness, short-term disability, and other health insurance products.

The Run-off Property-Liability offers property and casualty insurance.It sells its products through call centers, agencies, financial specialists, independent agents, brokers, wholesale partners, and affinity groups, as well as through online and mobile applications.The Allstate Corporation was founded in 1931 and is based in Northbrook, Illinois.

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1.b. Last Insights on ALL

The Allstate Corporation's recent performance has been driven by strong premium growth, strategic refocus on personal lines, and divestiture of noncore assets. Q2 results showed significant earnings beats, improved combined ratios, and positive investment income trends amid higher interest rates. The company's underwriting improvements have taken hold, with margins stabilizing and reinsurance costs declining. Additionally, Allstate's preferred stock offers decent yields, with most trading below par and callable at any time. The company has also announced preferred dividends payable on October 15, 2025.

1.c. Company Highlights

Last Price	202.27
Change Percentage	-1.99%
Open	206.47
Previous Close	206.37
Market Cap ( Millions)	53490
Volume	1272367
Year High	215.89
Year Low	176
M A 50	204.45
M A 200	201.53

FCF Yield	16.15%
Dividend Yield	1.98%
ROE	35.27%
Debt / Equity	29.41%
Net Debt / EBIDTA	62.23%
Price To Book	1.93
Price Earnings Ratio	6.35
Price To FCF	6.19
Price To sales	0.81
EV / EBITDA	5.27

2. Allstate's Strong Q3 2025 Earnings: A Closer Look

Allstate reported robust financial performance in the third quarter of 2025, with revenues increasing to $17.3 billion and net income reaching $3.7 billion. Adjusted net income was $3 billion, or $11.17 per share, driven by strong Property-Liability results, modest catastrophe losses, higher investment income, and favorable insurance reserve releases. This beat analyst estimates of $7.67 EPS. The return on equity for the last 12 months was 34.7%. Total year-to-date revenues increased 5.8% to $50.3 billion, driven by strong performance across the enterprise.

Publication Date: Nov -07

                                    📋 Highlights
                                    Strong Financial Performance::
                                                Q3 revenues rose to $17.3 billion, net income hit $3.7 billion, and adjusted net income reached $3 billion ($11.17/share), driven by Property-Liability gains and favorable reserves.
ROE of 34.7%::
                                                Allstate achieved a 34.7% return on equity over the past 12 months, reflecting efficient capital use and profitability.
Expense Ratio Reduction::
                                                The transformative growth initiative cut the expense ratio by 6.7 points, boosting operational efficiency while expanding distribution channels (agents, independent, direct) equally.
AI-Driven Innovation::
                                                Investment in Agentic AI aims to redefine customer value and streamline operations, with a focus on developing the ALLIE business model.
Capital Returns::
                                                Shareholders received $1.8 billion in returns (dividends/share repurchases) over 12 months, or 3.5% of average market value, alongside a $1.5 billion buyback program.

                                

Transformative Growth Initiative

The company's transformative growth initiative, started six years ago, aims to increase Property-Liability market share and has five components in five phases. The initiative has reduced the expense ratio by 6.7 points and has expanded customer access by broadening distribution beyond Allstate agents. New business is evenly split between Allstate agents, independent agents, and direct channels, with all three channels increasing. As Thomas Wilson stated, the goal is to build ALLIE, a new business model, with phases and components, and they are in the design and build phase.

Investment in Technology

The company is also investing in technology, including applied artificial intelligence, which is being used to simplify billing explanations, reduce claims processing time, and improve actuarial and financial work. The next frontier is Agentic AI, which will allow the company to reimagine customer value across the entire business model. This investment is expected to drive future growth and improve profitability.

Valuation Metrics

With a Price-to-Book Ratio of 1.89, the stock is trading at a reasonable valuation compared to its book value. The Combined Ratio, a measure of underwriting profitability, is expected to remain in the mid-90s, indicating a profitable underwriting business. The Dividend Yield is 1.98%, providing a relatively stable source of return for investors.

Capital Deployment

The company has a sophisticated approach to managing capital and has plenty of capital today. The company prioritizes uses of capital, with growing the business and investing in new technologies being the primary focus. Allstate has returned $1.8 billion to shareholders over the last 12 months, which is 3.5% of the average market value of common equity, through dividends and share repurchases.

Outlook

Analysts estimate revenue growth at 6.9% for next year, indicating a continued strong performance. With a robust financial position and a well-diversified business model, Allstate is well-positioned for continued growth and success. As Thomas Wilson stated, the company will keep working on shareholder value by embracing change and being the best at what they do.

3. NewsRoom

Looking for a Growth Stock? 3 Reasons Why Allstate (ALL) is a Solid Choice

Dec -04

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The Allstate Corporation $ALL Position Boosted by Groupe la Francaise

Dec -04

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This Insurer Is Quietly Up Double Digits in a Month. Should You Invest $1,000?

Nov -27

Source: fool.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (8.30%)

6. Segments

Property-Liability (Excluding Protection Services)

Expected Growth: 7.5%

The growth is slightly lower than the global hypothesis due to potential competition and regulatory challenges in the insurance market. However, the core nature of the business provides a stable foundation.

Protection Services

Expected Growth: 9.0%

The expected growth is higher than the global hypothesis because protection services are less commoditized and can benefit from increasing consumer demand for ancillary services, potentially leading to higher margins and growth.

Allstate Health and Benefits

Expected Growth: 8.0%

The growth is near the global hypothesis, reflecting a stable demand for health and benefits products. The segment's performance is influenced by the overall economic environment and regulatory factors.

Unallocated Net Investment Income

Expected Growth: 8.3%

The growth is in line with the global hypothesis, assuming a stable investment environment. However, actual growth can vary significantly based on market performance.

Unallocated Other Revenue

Expected Growth: 8.3%

Applying the global growth hypothesis as a default, given the diverse and potentially volatile nature of this category.

Unallocated Net Gains (Losses) on Investments and Derivatives

Expected Growth: 8.3%

Using the global hypothesis as a baseline, acknowledging that actual performance can vary significantly with market conditions.

Intersegment Eliminations

Expected Growth: None%

None

7. Detailed Products

Auto Insurance

Allstate's auto insurance provides financial protection against physical damage and bodily injury resulting from traffic collisions and other accidents.

Home Insurance

Allstate's home insurance provides financial protection against damage to a policyholder's home and personal belongings due to natural disasters, theft, and other perils.

Life Insurance

Allstate's life insurance provides a financial safety net for loved ones in the event of a policyholder's death, helping to ensure their financial well-being.

Motorcycle Insurance

Allstate's motorcycle insurance provides financial protection against physical damage and bodily injury resulting from motorcycle accidents.

Renters Insurance

Allstate's renters insurance provides financial protection against damage to personal belongings and liability for accidents that occur in a rental property.

Business Insurance

Allstate's business insurance provides financial protection against various types of risks, such as liability, property damage, and business interruption.

Identity Protection

Allstate's identity protection provides monitoring and restoration services to help protect individuals from identity theft and fraud.

Roadside Services

Allstate's roadside services provide assistance with towing, fuel delivery, lockout services, and other roadside emergencies.

8. The Allstate Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Allstate Corporation is medium due to the presence of alternative insurance providers and financial institutions that offer similar products and services.

Bargaining Power Of Customers

The bargaining power of customers for Allstate Corporation is low due to the company's strong brand reputation and the lack of price sensitivity among customers.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Allstate Corporation is medium due to the company's dependence on a few large suppliers for certain products and services.

Threat Of New Entrants

The threat of new entrants for Allstate Corporation is low due to the high barriers to entry in the insurance industry, including regulatory requirements and capital requirements.

Intensity Of Rivalry

The intensity of rivalry for Allstate Corporation is high due to the highly competitive nature of the insurance industry, with many established players competing for market share.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	31.82%
Debt Cost	6.38%
Equity Weight	68.18%
Equity Cost	6.38%
WACC	6.38%
Leverage	46.66%

11. Quality Control: The Allstate Corporation passed 3 out of 9 key points

Strong Liquidity

Low Debt

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Allstate

A-Score: 7.2/10

Value: 7.3

Growth: 7.9

Quality: 6.6

Yield: 5.0

Momentum: 7.5

Volatility: 8.7

1-Year Total Return ->

Fairfax Financial Holdings

A-Score: 7.2/10

Value: 7.5

Growth: 6.9

Quality: 7.9

Yield: 2.0

Momentum: 9.0

Volatility: 9.7

1-Year Total Return ->

Travelers

A-Score: 7.0/10

Value: 7.0

Growth: 7.1

Quality: 6.6

Yield: 4.0

Momentum: 7.5

Volatility: 9.7

1-Year Total Return ->

CNA Financial

A-Score: 6.8/10

Value: 6.9

Growth: 4.6

Quality: 6.1

Yield: 10.0

Momentum: 3.5

Volatility: 10.0

1-Year Total Return ->

Cincinnati Financial

A-Score: 6.7/10

Value: 5.4

Growth: 6.4

Quality: 7.8

Yield: 4.0

Momentum: 7.5

Volatility: 9.0

1-Year Total Return ->

Progressive

A-Score: 6.4/10

Value: 5.6

Growth: 8.4

Quality: 7.0

Yield: 4.0

Momentum: 4.5

Volatility: 9.0

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

-8.15%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

6.38%

The Allstate Corporation - US0200021014

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on ALL

1.c. Company Highlights

Strong Momentum

Medium Volatility

Average Yield

Earnings Beats

Revenues Beats

Average Growth

Less Volatile

Average Quality

Fairly Valued

Stable Momentum

Higher Growth

Better Quality

Revenues Miss

2. Allstate's Strong Q3 2025 Earnings: A Closer Look

Transformative Growth Initiative

Investment in Technology

Valuation Metrics

Capital Deployment

Outlook

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (8.30%)

6. Segments

Property-Liability (Excluding Protection Services)

Expected Growth: 7.5%

Protection Services

Expected Growth: 9.0%

Allstate Health and Benefits

Expected Growth: 8.0%

Unallocated Net Investment Income

Expected Growth: 8.3%

Unallocated Other Revenue

Expected Growth: 8.3%

Unallocated Net Gains (Losses) on Investments and Derivatives

Expected Growth: 8.3%

Intersegment Eliminations

Expected Growth: None%

7. Detailed Products

Auto Insurance

Home Insurance

Life Insurance

Motorcycle Insurance

Renters Insurance

Business Insurance

Identity Protection

Roadside Services

8. The Allstate Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: The Allstate Corporation passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

12.e Scoring ^Insights

12.f DCF ^BETA