Allstate Q2 Performance: Growth in Auto and Homeowners Insurance
Allstate reported a notable increase in revenue, underwriting income, and investment income for the second quarter, showcasing growth across its auto, homeowners, and protection services sectors. The insurer's total revenue saw an 11.8% year-over-year increase, reaching $18.6 billion. Net premiums written rose by 2.6%, while net income hit $3.2 billion, with adjusted net income at $2.3 billion, or $8.99 per share. In the first half of 2026, adjusted net income amounted to $5.1 billion, equal to $19.65 per share.
Chair, President, and CEO Tom Wilson highlighted a strategic focus on expanding the company's property-liability market presence, enhancing protection services, and generating capital for growth investments and acquisitions. Allstate achieved an adjusted net income return on equity of 44.2% over the past 12 months.
In property-liability operations, the combined ratio improved by 4.5 points to 86.6 year-over-year, with underwriting income soaring nearly 57% to $2 billion. Jess Merten, President of Property-Liability, noted a 4% boost in net premiums earned within this segment, driven by growth in auto and homeowners insurance. Merten linked a significant portion of the higher expense ratio to advertising and non-recurring legal expenses.
The company executed auto claim reserve releases amounting to $1.5 billion year-to-date, particularly impacting bodily-injury claims for the 2023 and 2024 accident years. The auto segment experienced a new business volume increase to 2.3 million policies, while homeowners new business surged by 46.8% to 411,000 policies. Merten provided insights into severity trends, pointing out that bodily-injury severity remains higher than physical-damage severity, with future trends dependent on inflationary pressures affecting parts and labor.
Allstate's total policies in force rose 3.8% to 215.9 million, with growth in both property-liability and protection services sectors. Chief Operating Officer Mario Rizzo emphasized the Transformative Growth initiative, aimed at capturing market share through various distribution channels, including Allstate agents and direct sales. Advertising expenses reached $1.1 billion in the first half, focusing on marketing returns and acquisition strategies.
The Protection Services segment, comprising 177 million policies, generated $3.4 billion in revenue and over $200 million in adjusted net income in the past year. This includes Allstate Protection Plans, Dealer Services, Arity, and more, supported by significant distribution partnerships. Wilson introduced ALLIE, an advanced AI system designed to enhance customer service and drive growth, while reinforcing Allstate's commitment to data protection.
Net investment income jumped 33.8% to $1 billion during the quarter, supported by strategic portfolio management. The company returned $1.3 billion to shareholders through stock repurchases, with $2.6 billion remaining under its $4 billion plan. Allstate Corporation, headquartered in Northbrook, Illinois, is a major U.S. personal lines property and casualty insurer, expanding significantly since its founding in 1931 as a Sears subsidiary.