Allstate Q3 2025: Strong Growth, Improved Underwriting, and Technology-Driven Expansion
The Allstate Corporation reported strong financial results for the third quarter of 2025, reflecting the effectiveness of its Transformative Growth strategy.
Revenues increased by 3.8% year-over-year to $17.3 billion, driven by growth in policies in force which rose to 209.5 million, including notable increases in Protection Plans and homeowners and auto insurance policies. Net income applicable to common shareholders surged to $3.7 billion, supported by solid underwriting gains, modest catastrophe losses, improved investment income, and favorable reserve releases. Adjusted net income was $3.0 billion or $11.17 per diluted share, reflecting a substantial increase from the previous year.
Property-Liability segments showed increased market share in non-standard auto and homeowners insurance, including gains through the independent agent channels. Auto insurance policies in force grew by 1.3%, with active brand policies increasing 2.8%. Homeowners insurance premiums written jumped 13.1% in the quarter. The company is expanding its property-liability product lineup and retention programs, supported by technology enhancements leveraging generative and agentic AI to reduce costs and enhance customer value.
Protection Plans, including international operations, contributed revenue growth of 14.8% year-over-year, highlighting diversification beyond traditional insurance lines. The company’s strategic focus on technology and product innovation aims to build shareholder value and capture market opportunities.
Property-Liability premiums earned totaled $14.5 billion, up 6.1%, with an improved combined ratio of 80.1% compared to 96.4% in the prior-year quarter, reflecting better underwriting discipline and lower catastrophe losses. Catastrophe-related losses decreased 67.2% to $558 million. Homeowners insurance notably improved with a combined ratio improvement from 98.2% to 71.5%. Auto insurance combined ratio improved to 82.0% from 94.8%.
Investment income rose to $949 million, a 21% increase compared to the previous year’s quarter, driven by higher market-based and performance-based income. The investment portfolio returned 2.0% in the quarter and 3.8% for the trailing twelve months. Despite a decline in unrealized capital gains relative to the prior year, income from investments remained a key contributor to Allstate's profitability.
Allstate's capital position remains robust with statutory surplus increasing to $22.5 billion among insurance companies and $5.5 billion held at the holding company. The company returned $624 million to shareholders through share repurchases and dividends in the quarter, reflecting disciplined capital management. Over the trailing twelve months, total shareholder returns amounted to $1.8 billion, or 3.5% of average market value of common equity.
The company reported a return on common shareholders’ equity of 37.2% and an adjusted net income return on equity of 34.7%, both significantly improved over the prior year. Book value per common share increased 36.4% to $95.95, supported by strong earnings and capital appreciation.
Allstate's Property-Liability underwriting income improved substantially to $2.9 billion, from $495 million a year earlier, driven by lower loss and expense ratios. Underwriting margin showed marked improvement, reflecting disciplined risk selection and improved claims management.
Protection Services revenues increased nearly 10% year-over-year, led by Protection Plans growth, despite modest declines in segments like Arity. Underwriting profitability in Protection Services remained flat to slightly decreased, reflecting the evolving product mix.
The company continues to focus on strategic execution through product innovation, distribution expansion, technology deployment, and capital discipline to sustain growth and profitability in a competitive insurance market. Upcoming shareholder communications include a webcast and conference call to discuss these results further.