ALL · Q2 2026 Earnings

Neutral

Allstate

Reported August 5, 2026

30-second summary

Allstate delivered Q2 revenue of $18.60B (+11.8% YoY), beating consensus by 7.6%, and non-GAAP EPS of $8.99 vs. $6.07 consensus — a 48.1% surprise driven by a Property-Liability underlying combined ratio of 79.4%, essentially unchanged from the prior-year 79.5%. The nuance that matters: homeowners underlying came in at 61.5%, up 290bps YoY (from 58.6%) as the press release explicitly cites higher loss costs — a softer read on the structural rate-adequacy thesis than the headline suggests. Auto underlying at 87.6% held 20bps better than prior-year Q2, comfortably inside the profitable half of management's historical band and aided by 6.6 pts of favorable prior-year reserve development. TTM adjusted ROE of 44.2% and net income of $3.24B keep the capital return engine intact, with $1.0B of buybacks and $280M of dividends returned in the quarter.

Headline numbers

EPS

Q2 FY2026

$8.99

Revenue

Q2 FY2026

$18.60B

+11.8% YoY

+7.6% vs est.

Key financials

Q2 FY2026

Metric	Q2 FY2026	Q2 FY2025	YoY	Q1 FY2026	QoQ
Revenue	$18.60B	$16.63B	+11.8%	$16.94B	+9.8%
EPS	$8.99	$5.94	+51.3%	$10.65	-15.6%

Guidance

No quantitative guidance provided this quarter; company relies on qualitative statements regarding strategic execution and shareholder value creation.

Segment performance

Q2 FY2026

Segment	Q2 FY2026	Q2 FY2025	YoY
Property-Liability	$14.918B	$14.346B	+4.0%
Allstate Protection Auto	$9.644B	$9.528B	+1.2%
Allstate Protection Homeowners	$4.201B	$3.771B	+11.4%
Protection Services	$0.935B	$0.867B	+7.8%

Capital & returns

Q2 FY2026

Segment	Q2 FY2026	Q2 FY2025	YoY
Adjusted Net Income Return on Equity (TTM)	44.2%	28.6%	—

Other KPIs

Q2 FY2026

Segment	Q2 FY2026	Q2 FY2025	YoY
Property-Liability Recorded Combined Ratio	86.6%	—	—
Property-Liability Underlying Combined Ratio	79.4%	79.5%	—
Allstate Protection Auto Recorded Combined Ratio	83.3%	—	—
Allstate Protection Auto Underlying Combined Ratio	87.6%	—	—
Allstate Protection Homeowners Recorded Combined Ratio	94.6%	—	—
Allstate Protection Homeowners Underlying Combined Ratio	61.5%	—	—
Total Policies in Force	215,935 thousand	208,187 thousand	—

Management tone

Q1 competitive-moat articulation → Q2 balance-sheet-and-capital-return framing.

Note: no transcript was available this quarter, so tone reading is anchored to the press-release language and how it registers against the prior-quarter arc.

The register has shifted from Q1's competitive-moat articulation to Q2's balance-sheet and capital-return framing. Last quarter's release leaned on "competitive levers" and "Transformative Growth" as offensive positioning. This quarter Dugenske leads capital commentary and Wilson closes on "operational excellence, sustainable growth and capital generation" with explicit dollar figures on returns — $1.3B in the quarter, $3.5B or 6.7% of market cap over the last year. On a +48% EPS beat, the measured tone reads as a pivot to capital-return narrative now that the underwriting cycle has delivered.

Protection Services surfaces as a strategic pillar in the quarterly framing. Q1's release led with Property-Liability and treated Protection Services as ancillary. Q2's qualitative statements explicitly flag "Protection Services expands protection offerings" alongside Transformative Growth — signaling that portfolio diversification is now part of the equity narrative.

The absence of a Q1-style affordability-and-competitive-tools narrative is itself a shift. Q1 defended the customer-value strategy as offensive; this quarter's release makes no comparable customer-affordability callout. Whether that reflects confidence (the bet is working) or de-emphasis is the open interpretive question.

Answers to last quarter's watch list

Homeowners underlying combined ratio in Q2 storm season — Q2 underlying came in at 61.5%, up 290bps vs. prior-year Q2's 58.6%, with the release explicitly citing higher loss costs. Recorded 94.6% absorbed $1.4B of cats and still produced $226M of underwriting profit, but the underlying trend is a caution flag on rate-adequacy, not a validation. Status: Resolved with reservations

Auto underlying combined ratio trajectory — Q2 underlying at 87.6% is 20bps better than prior-year Q2 and roughly 180bps better than the implied Q1 2026 print (~89.4% derived from 6M 88.5% and Q2 87.6%). The 2.4 pts of favorable development on Q1-reported claims is worth flagging as a non-repeating tailwind.

Resolved positively

Auto PIF growth disclosure and trajectory — Auto PIF disclosed at 25.95M, +2.8% YoY, with new business up 8.8% — the first quarter with clean unit acceleration alongside the top-line drag.

Resolved positively

Pace and magnitude of buyback execution — Q2 buybacks were $1.0B (increased from prior quarter), with total capital return of $1.3B including $280M of dividends; trailing-12-month returns of $3.5B equal 6.7% of market cap.

Resolved positively

Decay of favorable prior-year reserve releases — Auto favorable non-cat prior-year reserve reestimates were 6.6 pts of the combined ratio this quarter, up from 4.3 pts in prior-year Q2. The well is not yet metering out; if anything, releases widened. Status: Continue monitoring — direction opposite to expectation

New York no-fault reform progress — the press release makes no reference to legislative developments or market re-entry commentary. Without the transcript, no update.

Not resolved

What to watch into next quarter

Whether homeowners underlying reverts or extends the +290bps YoY deterioration — Q2's 61.5% is the first quarter the release has explicitly cited "higher loss costs" against rate. A Q3 print that widens the YoY gap would meaningfully reopen the rate-adequacy question; a narrowing would suggest Q2 was noise.

Auto favorable prior-year reserve development sustainability — 6.6 pts this quarter (vs. 4.3 pts prior-year Q2) is a large tailwind to the recorded ratio. Watch whether Q3 sustains, compresses, or begins to give back — the underlying at 87.6% is the cleaner forward read.

Auto premium earned inflection — written +0.4% and earned +1.2% with PIF +2.8% and new business +8.8% implies the price/mix drag is still working through. A Q3 crossover where earned premium growth exceeds PIF growth would signal the drag is behind.

Homeowners loss-cost commentary — the release language ("higher loss costs") is qualitative. Any Q3 elaboration on severity vs. frequency, or geographic concentration, would sharpen the read.

Capital return pace continuity — $1.0B of buybacks this quarter (up from prior). Whether Q3 sustains or steps down is the practical read on management's confidence in the balance sheet.

New York no-fault reform — no update this quarter; watch for Q3 transcript commentary.

Sources

Allstate Q2 2026 earnings release, SEC filing: https://www.sec.gov/Archives/edgar/data/899051/000089905126000117/allcorp63026earningsreleas.htm

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