Allstate Corp (ALL) Q1 2022 Earnings Call Transcript

For the period ending March 31, 2022

May 5, 2022 9:00 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Good morning, everyone. Thank you for standing by, and welcome to the Allstate First Quarter 2022 Earnings Conference Call.

I would now like to hand the conference over to your speaker today, Mr. Mark Nogal.

Mark Nogal - Head, IR

Thank you, Kirby. Good morning, and welcome to Allstate's First Quarter 2022 Earnings Conference Call. After prepared remarks, we'll have a question-and-answer session. Yesterday, following the close of the market, we issued our news release and investor supplement, filed our 10-Q and posted today's presentation, along with our reinsurance update on our website at allstateinvestors.com. Our management team is here to provide perspective on these results. As noted on the first slide of the presentation, our discussion will contain non-GAAP measures, for which there are reconciliations in the news release and investor supplement and forward-looking statements about Allstate operations. Allstate's results could differ materially from these statements, so please refer to our 10-K for 2021 and other public documents for information on potential risks.

Before I hand it off to Tom, I want to share that we will be hosting our second special topic investor call on June 16, focusing on the value of homeowners. We look forward to the additional engagement later this quarter, and we'll share further information soon. And now I'll turn it over to Tom.

Thomas Wilson - Chairman, President & CEO

Well, good morning, and thank you for investing your time in Allstate today. Now let's start on Slide 2. So Allstate's strategy to deliver Transformative Growth and higher valuation has two components: increase personal profit liability market share and expand protection services, which are shown in the 2 ovals on the left. We're building a low-cost digital insurer with broad distribution to a Transformative Growth. We're also diversifying our business by expanding protection offerings as shown in the bottom.

In the first quarter, we made progress in 3 key areas to execute this strategy. We're 6 months into a multifaceted plan to address the negative impact of inflation, which is largely in auto insurance. This begins with aggressively raising prices. We're doing this surgically and raising prices more for new or shorter tenured customers with less profitability and less for longer tenured profitable customers. Progress was also made in executing programs to reduce expenses and manage loss costs. We also shifted our asset allocations by reducing the interest rate exposure of our bond portfolio in the fourth quarter of last year, which lowered the overall enterprise impact from higher inflation by $800 million.