Allstate Corp (ALL) Q2 2022 Earnings Call Transcript

For the period ending June 30, 2022

August 4, 2022 9:00 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Thank you for standing by, and welcome to the Allstate Second Quarter 2022 Earnings Conference Call.

And now I'd like to introduce your host for today's program, Mark Nogal, Head of Investor Relations. Please go ahead, sir.

Mark Nogal - Head, IR

Thank you, Jonathan. Good morning. Welcome to Allstate's Second Quarter 2022 Earnings Conference Call. After prepared remarks, we will 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 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's operations. Allstate's results may differ materially from these statements, so please refer to our 10-K for 2021 and other public documents for information on potential risks. Additionally, we will be hosting our next special topic investor call on September 1, focusing on Allstate's investment strategy.

Now I'll turn it over to Tom.

Thomas Wilson - Chairman, President & CEO

Well, good morning. Thank you for investing your time with Allstate today. Let's start on Slide 2.

So Allstate's strategy to increase shareholder value has 2 components: increase personal property-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 we transformed the growth. We're also diversifying our business by expanding protection offers and by leveraging the Allstate brand, customer base capabilities and expanding distribution.

On the panel on the right, in the second quarter, we made progress executing this strategy, while we continue to implement a comprehensive strategy to improve profitability. That includes broadly raising auto and home insurance rates. In the second half of 2022, we plan to file for rate increases in excess of the increases implemented in the first half of this year, which were 6.1% of Allstate brand countrywide premiums. We're also reducing expenses on advertising and growth investments. Underwriting guidelines have been and will be changed to reduce new business volume, where we're not earning adequate returns. And we're also executing claims operating actions to manage loss cost in a high inflationary environment. These actions will likely have a negative impact on policy growth.