Allstate at 45th Annual William Blair Growth Stock Conference: Strategic Growth Insights

On Thursday, 05 June 2025, Allstate Corp (NYSE:ALL) presented at the 45th Annual William Blair Growth Stock Conference, outlining a robust strategy for growth amid challenges. The company reported strong financial performance and highlighted its strategic initiatives to enhance customer value and expand market share, while also addressing hurdles in regulatory rate approvals.

Key Takeaways

• Allstate’s Q1 2025 revenue increased by 7.8% year-over-year to $16.5 billion.
• The company is executing a transformative growth plan focusing on customer value and technology.
• A $1.5 billion share repurchase program was announced alongside an 8.7% dividend increase.
• Challenges remain in rate approvals in New York and New Jersey, but progress is noted in California.
• Investments in technology and direct channel capabilities are key strategic focuses.

Financial Results

• Q1 2025 Revenue:

- Total revenue: $16.5 billion, up 7.8% from the previous year.

- Property liability earned premiums: $14 billion.

- Protection Services revenue: $6.86 billion.

- Net investment income: $854 million.

• Full Year 2024 Results:

- Total revenue: $64.1 billion, a 12.3% increase.

- Net income: $4.6 billion; adjusted net income: $4.9 billion.

- Net income return on common equity: 25.8%.

- Net income per common share: $16.99.

- Property liability earned premiums: $54 billion.

- Protection Services revenue: $3.2 billion.

- Net investment income: $3 billion.

• Capital Management:

- 84% of shares repurchased since going public.

- 186 million shares bought back over 10 years for $17 billion.

- $7 billion in dividends paid over the past decade.

- New $1.5 billion share repurchase program initiated.

- Quarterly dividend increased by 8.7% to $1.

Operational Updates

• Transformative Growth Plan:

- Focus on making protection more affordable and accessible.

- Expanding customer access and maximizing marketing efficiency.

- Technology-driven solutions to offer simple and connected products.

- Differentiated auto insurance products available in 36 states.

• Distribution Channels:

- Expanded across Allstate agents, direct sales, and independent agents.

- Balanced distribution with increased agency productivity.

• Allstate Protection Services:

- Serves 62 million customers in 18 countries.

- Partnerships with five Fortune 40 companies.

• M&A Activity:

- Acquired National General in 2021 for $4 billion.

- Completed divestiture of employer voluntary benefits business for $2 billion.

- Sale of group health business expected to close for $1.25 billion.

Future Outlook

• Continued focus on growing property liability market share profitably.
• Investment in technology to enhance customer experience and efficiency.
• SAVE initiative to improve customer retention.
• Ongoing negotiations with DOIs in New York and New Jersey for rate approvals.
• Balanced distribution strategy across all channels.

Q&A Highlights

• Rate Increases:

- Challenges in New York and New Jersey, but progress in California.

• Technology Stack:

- Completion of foundational technology work.

- New policy administration system using flexible solutions.

• Competitive Conditions:

- Confidence in competitive positioning due to technology investments.

- Strong returns from homeowners insurance.

• Direct Channel:

- Importance of direct solutions for growth.

- Investments in leadership and virtual agencies.

• Wildfire Risk:

- Improved modeling and customer mitigation options.

Allstate’s detailed strategy and financial performance underscore its commitment to growth and shareholder value. For a complete understanding, refer to the full transcript below.

Full transcript - 45th Annual William Blair Growth Stock Conference:

Adam Klauber, Runs Insurance Group: Welcome, everyone. Thanks for joining. Good morning.

Adam Klauber. I run our insurance group here. First, please read our website for disclosures for compliance, blah blah blah. Thank you. But we are really lucky enough to have Allstate.

And this is, I think, the second year Allstate’s joined at the conference, which we really, really appreciate. And it seems obvious as a local company, we’re local. But, you know, we’ve really appreciated that Allstate has made a lot of strides changing the organization over the last four or five years, which you know, such a big organization that’s not easy. But we think, you know, there’s much more match with our, you know, more growth orientation. So, really happy we’re here.

We have Jess Merton, who’s CFO, and he’ll tell us a little bit about what Allstate is up to.

Jess Merton, CFO, Allstate: Alright. Thanks, Adam. So good morning. It’s good to be at the William Blair Growth Conference, as Adam said, for the second year so we can talk a little bit about Allstate. I’ll start out this morning with an overview of our strategy so you can see why I think Allstate’s an attractive investment.

And afterwards, we’ll have Q and A and Adam and all of you can ask me whatever questions are on your mind. So, you know, first off, I want to remind you all that I’m gonna get my clicker here, get the disclosures up. I’m going to be using forward looking statements and references to non GAAP measures in my remarks. Please evaluate these remarks in the context of all the information that we provide including information on potential risks in our recently issued Form 10 ks for 2024 and other public documents. The presentation and more specific information is also available on our website at allstateinvestors.com.

Alright, now for the good stuff. I know some of you follow Allstate closely and for those of you that aren’t as familiar, what we do is simple. Allstate protects people from life’s uncertainties. Our strategy has two components: increasing personal property liability market share while expanding the protection that we provide customers. We use a two two oval picture that you can see on this page to illustrate that strategy.

And as you can see on the right side of the slide, Allstate’s revenue primarily comes from three sources. The most significant source is property liability earned premiums. This includes auto insurance, homeowners insurance, renters umbrella. There’s a lot of examples that you’re all familiar with. And the property liability business generated $14,000,000,000 in earned premium in the first quarter of twenty twenty five and fifty four billion dollars for the full year of 2024.

The second source is our Protection Services segment. In these businesses, we deliver protection to customers through product warranties that cover important purchases like appliances, furniture, and consumer electronics. Other examples of the solutions that we provide in Protection Services include extended vehicle warranties, identity protection and regulatory services, as well as roadside assistance. Protection services generated $6,860,000,000 of revenue in the first quarter and 3,200,000,000.0 for the first, for the full year of 2024. Lastly, Allstate proactively manages a $74,000,000,000 investment portfolio, which provides a stable source of revenue.

Net investment income was $854,000,000 in the first quarter of twenty twenty five. And for the full year of 2024, the portfolio generated net investment income of $3,000,000,000 Allstate’s total revenues were $16,500,000,000 in the first quarter of twenty twenty five, which was up 7.8% to the prior year quarter. And for the full year of 2024, revenues grew 12.3%. Our 2025 operating priorities are supported by strong 2024 financial results, which are summarized here on the left side of the slide. In 2024, we generated $64,100,000,000 of revenue and delivered net income of $4,600,000,000 and $4,900,000,000 of adjusted net income.

Net income return on common equity was 25.8%, and net income per common share was $16.99 These results reflect our balanced approach to growth, profitability, and proactive capital management. In 2025, you can see Allstate is focused on creating shareholder value through a balanced set of operating priorities, which include delivering attractive financial returns, growing our customer base by attracting new customers and keeping existing customers, and executing our transformative growth initiative, which I’ll talk a little bit more about now. Allstate’s executing the transformative growth plan to grow property liability market share by making protection more affordable and more accessible to customers. The strategy was announced in late twenty nineteen and has five integrated components. The first component is to improve customer value.

We know price matters to customers, so we’ve lowered our cost structure to improve affordability. Excluding marketing expenses, the expense ratio improved by 6.7 points since 2018 and we remain focused on reducing expenses to lower the cost for our customers. Differentiated, affordable, simple and connected or ASC, you may hear us call it, auto insurance products are now available in 36 states and a new homeowners product is available in six states. These new products include our most sophisticated rating plans, design innovations and they’re all targeted at delivering the most value to customers at highly competitive prices. Middle market standard and preferred auto and homeowners products, which we call Custom three sixty, are offered under our National General brand through independent agents.

The foundation of these new products is the Allstate ASC product, which allows us to offer these highly competitive products through the independent agent channel. The SAVE program, which stands for Show Allstate Customers Value Every Day, is being embraced by employees and agents with a goal of improving 25,000,000 customer interactions this year. As part of this program, we also established a specific goal of reducing insurance premiums for millions of customers by adjusting coverage and making sure they fully utilize available premium discounts. Our objective is to increase retention because keeping the customers we have is an important driver of growth. The combination of strong new business levels and improvement in retention is the path to sustained market share growth for Allstate.

The second component of transformative growth is to expand customer access through a broad distribution platform so that we’re growing in all channels. We’ve drastically improved our direct capabilities, and through the acquisition of National General, we have a strong presence in the independent agent space. When combined with our excellent exclusive agent channel, we’re positioned to reach customers wherever they choose to purchase their protection products. The third component is focused on customer acquisition and maximizing the efficiency and effectiveness of our marketing spend. In recent years, we’ve improved marketing sophistication while maintaining strong brand awareness and consideration.

Next, you’ll see we’re leaning into a technology driven strategy and which is instead of just being supported by technology. So technology driven, not just supported by technology. And this is enabling us to deliver new affordable, simple and connected products and experiences to our customers and improving overall operational effectiveness. The final component that you can see of our transformative growth initiative is focused on the team. We’re investing to make sure that we have the right people to execute on this strategy and deliver for our customers.

We’re embracing new ways of working to redesign business processes and increase efficiency across the business. These five components work together to drive us towards our strategic objective of profitably growing the property liability market share. As you can see on the next slide, transformative growth is generating strong new business and positioning Allstate well for the future. Starting with the chart on the left, you can see that Allstate has expanded distribution with competitive capabilities across all three channels. As I touched on previously, this expanded distribution effort has three components: improving Allstate agent productivity, expanding direct sales, and increasing independent agent distribution, all of which have been successful.

Allstate agency productivity has increased. Enhancements to direct capabilities, lowering prices, and increased advertising are attracting more self directed customers. And the National General acquisition significantly expand expanded our presence and capabilities in the independent agent channel. The new issued application pie charts that you see on this slide show two two key trends. First, we’re acquiring more customers than we were when we started transformative growth in 2019.

Second, new issued applications are almost evenly split across the three distribution channels. This mix is aligned with broader industry customer shopping behavior where each channel represents about a third of the market. We’re beginning to see signs of growth and our objective remains the same to increase personal property liability market share. As you can see on the chart on the right, policies in force increased sequentially and were slightly over prior year in the first quarter and this growth trend continued in April. The recent inflationary cycle required us to take significant price increases which impacted customer retention.

As the impact of those price increases moderates, we’re seeing the beginning of growth and policies in force supported by the strong new business trends that I just covered. We’ll continue to focus on improving customer retention as an important driver of growth through the SAVE initiative that I discussed earlier. Shifting gears, Allstate Protection Services segment is comprised of five businesses. We deliver protection to customers through warranties that cover important purchases like automobiles, furniture, consumer electronics, and we also provide products and services that include identity protection and roadside assistance to our customers. So it’s a broad range of solutions.

And we embed this protection in the flow of commerce to meet customers where they are, whether that’s in a retail store, online, or through a mobile phone provider. And that allows customers who may not normally interact with traditional insurance products to engage with the Allstate brand. The largest business in this segment is Allstate Protection Plans, which was acquired as SquareTrade in 2017 for $1,400,000,000 Since the acquisition, our customer grade customer base in that business has grown over four times and it serves a 62,000,000 customers in 18 countries. The Allstate brand has helped to secure distribution partnerships with large retailers in North America, providing access to a broader customer base through traditional retail channels and ecommerce platforms. Allstate is partnered with five Fortune 40 companies, and customers can now purchase protection plans at several major retailers.

The protection services segment allows Allstate to build for the future with broad protection offerings that provide a diversified source of profitable growth to the enterprise. Before we wrap up and move to questions, I want to provide an overview of Allstate’s capital management strategy which creates shareholder value through organic growth, strategic M and A, and by returning capital to shareholders through dividends and share repurchases. We’ve invested in growing our business through the execution of the Transformative Growth Plan to increase personal property liability market share. Allstate Protection Plans has grown to serve four times the number of policies since acquisition, as I mentioned, while also generating $157,000,000 of adjusted net income in 2024. And the businesses that we own generate attractive returns on capital at target margins as evidenced by the net income ROE that we reported at the end of the first quarter of twenty one point four percent.

Allstate pursues strategic M and A to create long term value and strengthen our competitive position. For example, our acquisition of SquareTrade in 2017, which again we now call Allstate Protection Plans, generated significant growth for protection services. By leveraging SquareTrade’s capabilities with the power of the Allstate brand, ours and our strong financial position, we’ve been able to partner with major retailers across the globe and profitably grow that business. We acquired National General for 2 for $4,000,000,000 in 2021, which improved our position in the independent agent channel, increased our presence, and broadened the range of customers who were able to provide protection products. In April, we completed the $2,000,000,000 divestiture of our employer voluntary benefits business, and we also expect to close the sale of our group health business for $1,250,000,000 at the end of this year.

As a reminder, that business, the Group Health business, was acquired as part of the National General acquisition in 2021. Both of these divestitures maximize shareholder value while improving the growth opportunities for their respective businesses post divestiture. Overall, the transactions demonstrate our focus on using M and A strategically to grow and create shareholder value. Lastly, on the slide, as you can see, on the right side, we show that Allstate has a strong history of returning cash to our shareholders. Since going public over thirty years ago, we’ve repurchased 84% of the shares outstanding.

Over the past ten years, we repurchased 186,000,000 shares of common stock for over $17,000,000,000 which rep would represent about 45% of the outstanding common stock. In the same time period, we paid out over $7,000,000,000 of common stock dividends. We continue to be committed to returning capital to our shareholders and we recently initiated a $1,500,000,000 share repurchase program. I think it’s also important to note that Allstate has consistently raised our quarterly dividend in the past fifteen years, most recently increasing it by 8.7% to $1 per quarter. And those recent increases come on the heels of a 50% increase that we made to the common dividend in 2021.

So Allstate proactively manages capital and will continue to create shoulder shareholder value. Let me close with one comment. Allstate has excellent capabilities, a strong brand, broad distribution, and available resources to deliver on our strategy to grow property liability market share. I’m confident that executing that strategy will create value for our shareholders. And now we’ll shift over to Adam’s questions.

Adam Klauber, Runs Insurance Group: Thank you. I’ll kick off, but then if anyone has questions, please feel free to chime in. As you’ve been focused on growth, but dialing back a little over a year ago, some of the states were a little late in the industry, not just all states like California, New York, New Jersey to approve rate increases, so they came later in the cycle. And that’s been somewhat of a drag on your growth. Is that drag on growth from those generally those states, is that generally ending or is there still a bit of a drag to go from those states?

Jess Merton, CFO, Allstate: Well, have challenges in various states and you mentioned California, New York, and New Jersey. A gauge that I typically use on where we’re at in a state is whether or not we’re open for new If we’re at target margins, we’re typically open for new business. And we have opened up for new business in auto, not home, but auto insurance in the state of California. So that would mean that we feel good about where the rate levels are for new business in the state of California. It doesn’t mean that we don’t have more work to do, but we’re at comfortable with margins there.

That leaves New York and New Jersey where we continue to work with the DOIs in those respective states to get the rate level where we need to open up for new business. Otherwise, we’re generally open across the country, meaning we’re, you know, we’re reaching target margins and available to meet new customer needs.

Adam Klauber, Runs Insurance Group: Great. Great. One more question and then open it up. Again, you’ve been doing the transformation for four or five over five years at this point, and you’ve done a lot of heavy lifting to actually reposition the company. Can you talk about the underpinning?

What do you actually have to do to the core technology stack to get you ready to grow? What were some of the heavy lifting things there?

Jess Merton, CFO, Allstate: I think that that the foundational work from a technology perspective is done, Adam. Mhmm. That, you know, as you said, this is a five year journey and we started with the technology. As I said, we wanna go to a technology driven strategy, which means you have to sort of reinvent what that tech stack looks like. And as you know, in insurance, that’s not an easy task.

Right? Because there’s a lot of legacy systems. So what we did is we started with that early. And what I’m one of the things I’m most proud of is we invested we continue to invest in that technology through the cycle. Right?

So highly inflationary cycle, a lot of rate to take. We didn’t stop investing in the technology. So the technology foundation now is there to fuel the growth. We just have to keep making investments. We have to keep putting, you know, new products onto the platform.

So when you hear the number of states for ASC, the number of states for, you know, both ASC auto and home Mhmm. We have more states to roll out, and we’re doing that as quickly as possible, but that’s all going on to the new tech. So we’re using the new tech platform as we roll out new products, I think that all is gonna help us grow. It also contributes to, quite frankly, the growth in the direct channel, independent agent, like that broad platform. Because I think one of the things that’s overlooked sometimes about transformative growth is the breadth of the platform that we have now.

So we went from primarily exclusive agent based company to exclusive agents being a really important part, but we have a strong direct capability and independent agents. And that all feeds off of that tech platform. So really, we just have to keep our, you know, the the pedal down and keep implementing the tech. So, and that’s helpful.

Adam Klauber, Runs Insurance Group: Just to give people an idea, what were some of the changes you did to or made to your technology, I’ll call it stack, but your core systems to enable growth? Maybe just some examples or how did you change the technology system?

Jess Merton, CFO, Allstate: Well, we built from the ground up using new flexible technology solutions, right? So think new policy administration system, a new orchestration layer. Because what we wanted to do is not just build for today, but build for the future to enable growth so that we can implement implement advanced computing technology to make us you know, to provide better insights about what’s going on with customers. The whole customer experience is built on of the affordable, simple, and connected product is built on this new tech platform. Okay.

So what that means is that, a, it’s a contemporary experience that everyone would expect whether you’re on a mobile device or whether you’re on a website. But also it’s a more data driven experience for customers so they have to give us less information because we can pull that data. We can give recommendations to customers based on certain attributes that we know about here’s a coverage option that you should consider. And, oh, by the way, if you wanna understand it better, here you can click here and we’ll help explain what that coverage option means to you. Mhmm.

So really, it’s it’s it’s experience focused, but it’s also there’s a flexibility component when you talk about growth and our ability to grow. Being able to react quickly from a rate perspective to market conditions, we changed our this is somewhat off your question. We changed our go to market approach in our in sort of the way that we put leadership out in the field for our exclusive agents and we look at markets differently. Those markets give feedback now and the technology enables us to make quick adjustments to the feedback that we’re receiving from go to market leaders. Okay.

So it’s, again, it’s a technology foundation that we’re building the growth engine on top of.

Adam Klauber, Runs Insurance Group: Okay. Any any questions from the audience? Can you give us, you know, Allstate’s view of the current conditions in both the auto insurance

Jess Merton, CFO, Allstate: and the

Adam Klauber, Runs Insurance Group: property insurance?

Jess Merton, CFO, Allstate: Sure. So Allstate’s view on the auto insurance and homeowners insurance marketplace. Both are competitive, increasingly competitive as margins have have been restored for most companies. I think that auto and home are a little bit different. I think appetite in the homeowners space isn’t quite the same.

I think returns are not quite the same across homeowners. Allstate in a ten year period, you know, has made fantastic returns in homeowners insurance. I think we’ve run about a 92 combined ratio over a recent ten year period. So get really strong returns in home and we’ve continued to grow in homeowners through this, you know, through the the recent cycle. And we’ll continue to do that.

We like the market. I think what you’re seeing is that market’s getting a little bit more competitive in homeowners than it was a year or two ago. But that doesn’t I I don’t think that materially impacts our ability to grow in that space. I think, you know, Allstate’s always been strong. We have a great product.

We’re innovating. We have, you know, availability across the country that’s good. So I feel good about that market. Back to auto insurance, as I said, it’s getting more competitive, but we’re also really glad in the face of that competitive environment that we’ve been investing in the technology, as Adam talked about, in lowering our cost structure so we have the very most competitive rates that we can offer. So it’s a more competitive landscape, but we feel good about our ability to compete in that in that landscape given the work that we did to get here.

Adam Klauber, Runs Insurance Group: I’ll jump in. How important today to the growth strategy is the direct channel? And I do follow some of the lead aggregators and seems like your capabilities have come up a fair amount. So maybe describe, again, I guess, capabilities, what your strategy is in the in

Jess Merton, CFO, Allstate: the direct channel. So at the highest level, it’s very important. It’s you know, as I said, what we’ve we’ve built the company for is balance. And so I always start with what’s important is how customers wanna come to us and how they wanna buy our protection products. And so a lot of people wanna go direct, and so we should be best in class in offering them direct solutions.

And I think we’ve invested in the capability to do that, whether it’s leadership. We have new leadership, relatively new leadership in that space. Whether it’s building out the capabilities within sort of these these virtual agencies that exist or the call centers that help customers. But also some people don’t wanna talk to someone, they wanna go fully direct. And so the affordable, simple, and connected product is designed to allow you to do that.

So it’s really, from my perspective, about making sure that we’re doing what customers want. That makes direct very important because the reality is there’s a lot of growth in direct, a lot of people want to come to us on a direct basis, and so we have to be there to meet that need. And I think we’ve invested in the capabilities and we’re continuing to because as you said, there’s the capabilities within the direct channel, there’s also the marketing sophistication to make sure that you’re wisely investing marketing dollars to get those direct leads into your call center on the most kind of efficient and effective basis. And there’s a ton of data that we can use to do that. So I view it as a system.

It’s a system across all three channels, but there’s a system within direct and we’ve really been investing in that over the last several years and I feel good about where our capabilities are at. And certainly it’s an important driver of our growth going forward.

Adam Klauber, Runs Insurance Group: Okay. Okay. And on that, just just so people have an idea, what roughly what percent of the market shops digitally, would you say, for auto insurance?

Jess Merton, CFO, Allstate: It’s about a third. Okay. Well, of the it’s more of the shoppers, Adam, if that’s what you’re getting. Think more of your regular shoppers tend to be direct. It’s not entirely true, but certainly there’s a lot more shoppers that are direct.

I don’t have the percentage off top of my head. We like to you know, as I said in the prepared remarks, what we like to see is where you have that new business coming in spread across all of the channels, But direct is is where there’s a fair number of shoppers at times.

Adam Klauber, Runs Insurance Group: Okay. Okay. And you mentioned the home business that Allstate in a very, very tough line, you know, does make money and actually is there Your combined ratios are some of the best in the industry and, you know, that’s just not an easy task doing that. What are you doing today to actually, you know, in a continually, you know, weather volatile world to, you know, make sure that you’ll stay profitable on the on the home side?

Jess Merton, CFO, Allstate: Well, do a few things. One, we invest in product innovation. So I mentioned we have an affordable, simple, and connected homeowners product. That’s the next version of our, you know, sort of best in class segmentation rating risk evaluation. We have a really good risk and return management team that looks at diversification to make sure that we don’t get, you know, out of balance from a concentration perspective.

So I think we’re doing a lot of the things that we’ve done for a long time in homeowners, but also continuing to innovate and be leading edge so that we can maintain that. When you think about the volatility in in the environment, weather patterns, that’s something that we have to continually adjust for and you do it through rate. We also do some of that through our robust reinsurance program. So Allstate has a very robust prevent reinsurance program that allows us to manage the overall risk of the homeowners block by buying, you know, coverage from reinsurers for significant single event or two events in a year type of type of situation. So I think, you know, a little bit of is is looking back and saying what’s made us successful

Mhmm. You don’t wanna change that too much. What you wanna do is continually, you know, strive to be excellent and improve on what we’ve done, what’s gotten us here, and acknowledge that in a changing environment, you know, some of that’s just gonna be you’re gonna have to charge a little bit more rate to cover the fact that there’s inflation in some of the underlying components and there’s just more events.

Adam Klauber, Runs Insurance Group: Yeah. And this is a very general question, but how do do you think about fire risk? Because that’s traditionally been really tough to model. And, obviously, the headlines were were awful from a little while back from California, but it’s not just California. It’s Colorado, Nevada, you know, up up the West Coast.

So how do you think about it, and how are you looking to manage it over over time?

Jess Merton, CFO, Allstate: I think that the modeling is getting a lot better. So that is one thing I would say. So our ability as an industry to model wildfire risk is going up. One of the key components, and I know we certainly saw this in California, is insurers, we have to be able to use that modeling to inform rates and charge the appropriate rate to a customer that’s at high high wildfire risk. And also it lets us go in and sort of contact those customers or a potential customer and say, like, we can’t write it for this reason, but if you did these five things, your house might be insurable.

Right? But you, you know, sort of the the core of that is a regulatory environment that allows you to use wildfire modeling. And again, that was a challenge that we had in California. It’s something that they’re talking about doing. But so one, I think the the modeling is getting better.

I think some of our traditional tactics, we’ve looked at this as a risk. You know, there’s been wildfire risk all along and we’ve helped to manage that. There’s things that you can do from an aerial imaging perspective as we think about new homeowners products where you can actually look during the underwriting and you can use, you know, AI technology to say what’s going on in this property. Is there tree overhang? Is, you know, are there bushes right up against the side?

Like, there’s a lot that we can do and so we implement those solutions into our processes just to make sure that we’re managing the risk. I mean, at our core we’re there to help people in a time of need. So you’re not going to completely eliminate the risk. We just want to make sure that we appropriately price the risk that exists for any given, you know, home in that situation.

Adam Klauber, Runs Insurance Group: So, with your scale, the ability to not just take in the models, but implement the models and also that you have been traditionally on the leading edge in homeowners, is that ultimately more of an opportunity because know, wildfire is just tough for the industry and tough for lot of competitors, big and small, to get their arms around. So in in a way, is that more of an opportunity for you? Would you say

Jess Merton, CFO, Allstate: I think Allstate is good at at managing homeowners and understanding homeowners risk. So, you know, it’s not that we wanna run out and ensure wildfire zones as a as a strategy, but certainly there’s areas that I mean, as you noted, there’s wildfire risk is not just in California. Right? It’s there’s a a number of places. We wanna understand, get paid appropriately to manage the risk, and work with customers to mitigate the risk.

And I think that continues to be an opportunity for Allstate. I think there was a question.

Adam Klauber, Runs Insurance Group: Oh, yeah. Please do. Yeah. Oh,

Jess Merton, CFO, Allstate: portfolio? I mean, we don’t have we haven’t taken a view on, like, given a forward view on rates. If you look at our duration and we tend to be we’ve been around target duration recently. So we and we continue to we continue to reinvest the portfolio. Now you’ll see as rates come down to the extent where, you know, we have some shorter duration instruments, they’re gonna roll into lower rates.

What you’ve seen over the last couple years though is a lot of stability in the portfolio yield because of where rates have been and we’ve been able to first shift the portfolio and then now reinvest at relatively good rates particularly in comparison to, you know, five years ago. So, you know, the outlook would be I don’t I’m not I’m not gonna give you a firm outlook on what rates will do. We all can guess on what’s exactly gonna happen, but I feel good about where our portfolio is positioned to take advantage of changing interest rates.

Adam Klauber, Runs Insurance Group: For one last question if anyone wants to chime in, then I’ll chime in. Can you talk about how’s the how’s the momentum in the, you know, the traditional Allstate agents, the the captives? Mhmm. You know, there’s been some changes and, you know, it’s been a work in progress for a long time, but I guess how’s the momentum in that channel?

Jess Merton, CFO, Allstate: I feel good about the momentum in that channel. They’re more efficient than they’ve been. They’re bundling more than they’ve been in the past. So I think what we have is a group of agents. There’s fewer, but we have fewer agents that are doing more for customers, and I think that’s good.

We’ve been making changes. What we’re trying to do is make changes to that distribution channel that helps everyone win long term and also helps make sure that we’re matching the cost of distribution to what customers are expecting. And I think our agents generally are in a good spot. I’m sure if you, you know, surveyed the thousands, you’ll find some that aren’t as happy and some that are, but that’s, I think, gonna always be true. I feel good about the the the sort of the the positioning and the future of the Allstate agency.

I mean, you heard me. We want, you know, balanced distribution, which is all three channels, and that includes a strong exclusive agent channel.

Adam Klauber, Runs Insurance Group: So I feel encouraged by it. As your rates have, I’ll say, stabilized away in the last, say, six months, have you seen more growth coming out of that channel, would you say?

Jess Merton, CFO, Allstate: I you know, honestly, Adam, Allstate agents are always very good at generating growth. I think that they part of the value that an agent brings is explaining premium increases. And so I think what we’ve seen, you know, through this cycle is even when rates were going up, Allstate agents were able to sell new business because they could go and sit with you and say, Hey, here’s what you’re seeing, you know, from Allstate or here’s what you’re seeing from a competitor. Here’s why and here’s some things you can do back to our SAVE program. Here’s some things you can do to lower your premium.

That advice that they provide I think has allowed them to be consistent through the cycle versus seeing a big spike now that we’ve lightened up on rates.

Adam Klauber, Runs Insurance Group: Okay, okay. Then I’d like to thank Jess for joining us.

Jess Merton, CFO, Allstate: Thank you.

Adam Klauber, Runs Insurance Group: We’ll continue in the Richardson Breakout Room. Thank you, guys.

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