tapebrief
ALL · Q2 2025
ALL · Q4 2025

ALL · Q3 2025 Earnings

Bullish

Allstate

Reported November 5, 2025

30-second summary

Allstate posted Q3 revenue of $17.26B (+3.8% YoY) with a Property-Liability combined ratio of 80.1% and underlying combined ratio of 78.7% — a sharp improvement from the prior-year quarter's 96.4%/83.2% that pushes adjusted ROE to 34.7%. Homeowners delivered a 59.8% underlying combined ratio with +14.0% revenue growth and underwriting income of $1.1B vs. $60M a year ago. Net income of $3.72B and GAAP EPS of $13.95 reflect a quarter where operating performance was strong across the enterprise.

Headline numbers

EPS

Q3 FY2025

$11.17

Revenue

Q3 FY2025

$17.25B

+3.8% YoY

Key financials

Q3 FY2025
MetricQ3 FY2025YoYQ2 FY2025QoQ
Revenue$17.25B+3.8%$16.63B+3.7%
EPS$11.17—$5.94+88.0%

Guidance

No quantitative guidance provided in current quarter; unable to assess raises, lowers, or reaffirmations versus prior quarter.

No quantitative guidance provided in current quarter; unable to assess raises, lowers, or reaffirmations versus prior quarter.

Segment performance

Q3 FY2025
SegmentQ3 FY2025YoY
Property-Liability Insurance$14.533B+6.1%
Protection Services$0.902B+9.7%
Allstate Protection Auto$9.593B+3.5%
Allstate Protection Homeowners$3.88B+14.0%
Protection Plans$0.588B+14.8%

Other KPIs

Q3 FY2025
SegmentQ3 FY2025
Property-Liability Combined Ratio80.1%
Property-Liability Underlying Combined Ratio78.7%
Allstate Protection Auto Underlying Combined Ratio86.0%
Allstate Protection Homeowners Underlying Combined Ratio59.8%
Policies in Force209.5 million
Adjusted Net Income Return on Common Shareholders Equity34.7%
Auto Insurance Policies in Force Growth1.3%
Homeowners Insurance Policies in Force Growth2.1%

Management tone

Press release tone is notably offensive, leading with new product rollouts, advertising expansion, and retention programs as growth drivers. The Protection Plans international callout (4.2% PIF, 14.8% revenue YoY) is fresh disclosure framing — management is now isolating international growth as a distinct vector. Wilson's quote emphasizes share gains in non-standard auto, homeowners, and the independent agent channel, and flags accelerated deployment of generative and agentic AI on the Transformative Growth platform as a cost and customer-value lever.

The 80.1% headline combined ratio and 34.7% ROE permit this register, though it is worth noting the underlying combined ratio improved 4.5 points YoY (83.2% → 78.7%) while the headline improved 16.3 points — the gap is weather. The bullish tone is earned at the surface; the attritional read, while still positive, is more measured.

Q&A highlights

Jimmy Bullard · J.P. Morgan

Are competitors becoming more aggressive on pricing given favorable auto frequency, or is the market remaining rational? Additionally, can Allstate sustain the recent improvement in policies in force given lower price increases and higher marketing spend?

Management indicated the industry is operating at good profitability levels with moderation in rate increases compared to 2022-2023. Competition remains rational with no evidence of soft market pricing. Allstate is leveraging its distribution breadth and competitive pricing to drive 2.8 million new business items. On retention, management noted it has stabilized but lags pricing trends by 12-18 months; the SAVE program targeting 25 million customer interactions is designed to improve retention through better affordability and customer experience.

2.8 million new business items written in Q1New business applications up 27% year-over-yearSAVE program targeting 25 million customer interactionsRetention stabilized in same zone as prior quarters

Rob Cox · Goldman Sachs

Are the elevated new business application levels being inflated by unusual shopping behavior, or can this level be sustained? Also, what drove the quarter-over-quarter uptick in auto underlying loss ratio?

Management stated new business levels this quarter mirror Q4 2024 levels, indicating sustainability without artificial shopping surge. They noted no capacity constraints and expect further growth as affordable/simple/connected products roll out to additional states. On loss ratios, management emphasized quarterly comparisons are not meaningful due to weather and frequency variations; on an absolute basis, auto profitability is 'outstanding' and 'broad-based across the country.'

New business levels similar to Q4 2024, demonstrating sustainabilityAuto combined ratio of 91.3 in Q1 (exceptional)No capacity constraints in agents, direct channels, or call centersAffordable/simple/connected products not yet in all states

Gregory Peters · Raymond James

What is Allstate's target for adjusted expense ratio over the next five years (below 20%)? Also, on catastrophe losses, how do subrogation recoveries affect the three-standard-deviation characterization, and what changed with reinsurance limits?

Management declined to set a specific expense ratio target but committed to continued reduction through digitization and process elimination, noting technological opportunities. On catastrophes, they clarified that displayed losses are gross of reinsurance; $1.1 billion in Q1 reinsurance recoveries were disclosed but do not include any subrogation. Reinsurance limits were increased by $1.5 billion (21%) to $9.5 billion per occurrence, reflecting homeowners' book growth and risk expansion, with costs declining on a risk-adjusted basis.

Adjusted expense ratio improved 6.7 percentage points since 2018No specific expense ratio target stated$1.1 billion reinsurance recovery in Q1Reinsurance limit increase of $1.5 billion (21%)

Elise Greenspan · Wells Fargo

Did tariff-driven auto purchasing pull forward distort March policy growth? How will Allstate respond to tariff-induced mid-single-digit severity increases—through margin absorption or price increases?

Management stated tariffs' impact timeline is unclear but acknowledged costs will likely increase, particularly for auto repair and replacement. They indicated willingness to raise prices if needed to maintain ROE, similar to pandemic inflation response. Noted that tort reform (Georgia, Florida) and continued cost reduction efforts should partially offset tariff impacts. Emphasized tariffs should not materially change competitive positioning in growth opportunity.

No evidence of significant tariff-driven car purchase pull-forward in MarchMid-single-digit to higher industry estimates for tariff impactHome repair cost increases likely lower than auto (roughly half)Pandemic saw 60% used car price increase in <2 years

Alex Scott · Barclays

Can you provide more specificity on retention trends—what portion is driven by prior rate actions vs. competitive pressure vs. shut-in business? How quickly will retention recover and what impact will SAVE program have?

Management declined to disclose specific Allstate-brand auto retention numbers, citing confusion from granular detail and risk-class mix shifts. Instead focused on total PIF growth as the relevant metric. Explained retention weakness partly reflects more aggressive non-standard market penetration (lower-retention segment). SAVE program targets three defection triggers: price increases (via improved affordability/coverage optimization), poor customer experience (improved interactions), and reduced bundling (now ~80% for new business). Management expected improvement from stable rate environment plus SAVE initiatives.

Retention in same zone as last two quartersNon-standard market segment growing, carries lower retentionAllstate brand new business bundling ~80%SAVE program focusing on three defection triggers

Answers to last quarter's watch list

Homeowners combined ratio — Underlying combined ratio came in at 59.8% (vs. 62.1% PY); recorded ratio 71.5% vs. 98.2% PY. Light cat quarter did much of the headline work, but the underlying trajectory is also favorable.
Resolved positively
Auto combined ratio — Auto underlying combined ratio printed 86.0%, a 6.0-point YoY improvement.
Resolved positively
Underlying combined ratio direction — P-L underlying improved 4.5 points YoY to 78.7%, confirming attritional improvement beyond cat tailwinds.
Resolved positively

What to watch into next quarter

Whether Q4 underlying combined ratio holds below 80% — Q3's 78.7% benefited from a quiet cat quarter. Q4 (winter storms, California fire season) is the harder test of whether attritional improvement holds.

Auto PIF growth accelerating beyond +1.3% — new business is up 23.0% YoY but retention is leaking; watch whether the gap narrows.

Homeowners underlying combined ratio on a normalized cat load — 59.8% is not the normalized number. A Q4 print that holds in the low-to-mid 60s would validate structural rate adequacy.

Whether Q4 release reintroduces quantitative guidance — Allstate's full-year-only cadence has been wholly qualitative through 2025. A return to quantitative framing would be a confidence signal.

Protection Plans international margin disclosure — management chose to isolate this segment's growth in Q3. Watch whether profitability of the international book gets surfaced in Q4 or stays as a top-line story.

Sources

  1. Allstate Q3 2025 earnings release, SEC filing: https://www.sec.gov/Archives/edgar/data/899051/000089905125000100/allcorp93025earningsreleas.htm

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