The Allstate Corporation

ALL · NYSE · USD

Analysis

Last 4 earnings calls · through Q2 FY2026

Allstate is spending the profit it rebuilt, cutting prices and buying growth, and betting that three channels, new products and cheaper claims keep enough margin to pay for it. Management's own mid-90s target sits well above where auto profits run today. Which two states are still holding Allstate's growth back?

  • Allstate is trading margin for growth on purpose.

    Rate changes have been roughly flat, and the new auto product was repriced lower in 32 states, giving back $810 million of premium in 2025. Management expects the combined ratio to rise: today's profit pays for market share.

  • Auto profits run well above the company's own target.

    The ratio of claims and costs to premium runs below its mid-90s target, and $1.5 billion of reserve releases so far, mostly on older claims, helped. Management assumes no more: today's profit is a cushion, not a new normal. How much of Allstate's reserve release came from 2023 and 2024 claims?

  • Growth is being bought with advertising and AI spending.

    The expense ratio rose a point in Q2 FY2026, about half from advertising, and first-half ad spend hit $1.1 billion. Tom Wilson says building ALLIE, its AI system, will "cost more," so the spending lands before the growth it pays for. How much of Allstate's ad budget goes to lower-funnel spending?

Bullish
  • Distribution breadth and new products
    The bull case is that selling through agents, independent agents and direct channels lets new products and broader access grow policies without relying on one channel.
  • Lower costs fund price cuts
    Management argues cost cuts and better claims handling let it lower prices for customers, win new business and still earn returns above its target.
  • Homeowners profit advantage
    Homeowners insurance is the strongest part of the franchise, where Allstate's underwriting results have beaten the industry by a wide margin for a decade.
Bearish
  • Competitors can cut prices
    The bear case is that Allstate's strong margins invite Progressive, State Farm and GEICO to cut prices, so the company must give back profit to keep growing.
  • State approval of products
    Growth in large states depends on regulators approving new products and rates, and New York has not yet cleared the product Allstate says it needs.
  • Reserve releases in results
    Recent underwriting results are helped by releases of reserves set aside in earlier years, a benefit that cannot repeat indefinitely at the same size.
See the full bull & bear case
PoliticiansInstitutionsInsiders
PoliticianTransactionAmountTradedFiled
Donald Trump
Republican · Executive
Sale≥$1KJul 23Sep 22
Donald Trump
Republican · Executive
Purchase≥$15KJun 23Aug 22
Donald Trump
Republican · Executive
Purchase≥$15KMar 23May 13
Donald Trump
Republican · Executive
Sale≥$1KJan 21May 13
Michael A. Rulli
Republican · House · OH-6
Sale≥$1KAug 12Sep 2

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Product segmentsGeography
FY2025 · USD

How The Allstate turned $67.7B of revenue into $12.0B of operating income.

Revenue
Property Liability$59.7B▲ 2.38% YoY
Protection Services$3.5B▲ 10.15% YoY
Allstate Health And Benefits$676.0M▼ 73.36% YoY
Total revenue$67.7B
Operating income$12.0B17.7%
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