Allstate (NYSE:ALL) reported adjusted net income of nearly $2.5 billion, or $9.76 per share, for the third quarter of 2026, as policy growth and higher investment income helped offset an increase in catastrophe losses.
Revenue was $17.3 billion, while Property-Liability net premiums written rose 2.5% to $16 billion, Chief Financial Officer Chris Lown said on the company’s earnings call. Total policies in force increased 3.9% from a year earlier, including 3.3% growth in Property-Liability policies and 4% growth in Protection Services.
The insurer’s Property-Liability combined ratio was 86.6, up 6.5 points from the prior-year quarter. Lown attributed the increase primarily to 7.1 points of higher catastrophe losses, partially offset by more favorable releases of reserves for prior-year non-catastrophe claims. A lower combined ratio generally indicates stronger underwriting profitability.
Auto Growth and Margins
Auto policies in force grew 3.4% from a year earlier, while homeowners policies increased 3.3%, said Jess Merten, president of Property-Liability. The business generated $2 billion in underwriting income during the quarter.
The recorded auto combined ratio was 83.2, benefiting from 9.1 points of prior-year reserve re-estimates. Excluding favorable development on claims reported in the first half of 2026, the adjusted underlying auto combined ratio was 91.4, below the company’s mid-90s target, Merten said.
Annualized average auto premium per policy was $1,474 in the quarter. Lown said average auto premiums had declined 2.7% over the past year as a greater share of customers moved to the company’s newer products. Average homeowners premiums continued to rise, reflecting higher loss costs and home values.
Asked about auto loss trends, Merten said inflation remained present in both physical damage and bodily injury claims. Allstate made rate adjustments in 39 locations during the quarter, producing an overall 0.4-point impact on auto rates. The company is monitoring trends by state and market, he said, rather than relying on a single national response.
Chairman and CEO Tom Wilson said much of the recent favorable reserve development came from bodily injury claims, which can take years to settle. He advised analysts not to forecast future reserve releases, saying the company’s aim is to record its best estimate of claim costs each quarter.
AI Assistant Planned for 2027
Allstate plans to launch a protection-focused personal agentic assistant in early 2027, extending its use of artificial intelligence beyond coding and customer service. Wilson said the tool is intended to help consumers compare insurance options, understand coverage and complete transactions.
The assistant will quote both Allstate and competing insurers, Wilson said. He pointed to Answer Financial, Allstate’s direct independent agency, which represents more than 30 insurance companies and writes over $500 million in annual premiums.
Wilson said the assistant could also work with other AI assistants, potentially reducing the computing needed to collect quotes from multiple websites. He cautioned that the pace of customer adoption remains uncertain and said Allstate is working with regulators on AI applications, including claims.
Allstate has already introduced AI-enabled service tools. Its Ask Allstate service, launched in July, handled 15% of chat volume for customers using its affordable, simple and connected auto products, Wilson said. The company is also investing in cybersecurity, software and computing while seeking to reduce overall expenses.
Investments and Capital
Net investment income increased 24% in the quarter, reflecting higher yields and premium growth, Lown said. The investment portfolio totaled $87 billion, with interest-bearing assets accounting for 80%, according to John Dugenske, president of investments.
The portfolio recorded a negative 2.1% return for the quarter as higher interest rates reduced unrealized fixed-income valuations, Dugenske said. Over the trailing 12 months, net investment income was $4 billion.
Allstate returned $1.5 billion to shareholders during the third quarter and $4.4 billion over the prior 12 months, Lown said. The company also repurchased 5.7% of its outstanding shares over that 12-month period. In response to an analyst’s question, Lown said approximately $9 billion of parent-company capital broadly equates to deployable capital, with no requirement to contribute funds to subsidiaries.
Lown also said Allstate intends to continue reporting quarterly, even as it places more emphasis on longer-term trends in its investor presentations.
About Allstate (NYSE:ALL)
Allstate Corporation is a U.S.-based insurance company that provides property and casualty coverage and related protection products. Its offerings include auto, homeowners, renters, condominium, motorcycle and recreational vehicle insurance, as well as life insurance and roadside assistance.
The company sells products through its Allstate-branded business and other businesses, including National General, using agents and direct-to-consumer channels. Allstate primarily serves customers in the United States.
Founded in 1931 as part of Sears, Roebuck and Co, Allstate became an independent, publicly traded company in 1993.
