Allstate Q3 profit falls to $2.1 billion as catastrophe losses jump, policies grow

Earnings fall on catastrophe losses and a 2025 gain

Allstate (NYSE: ALL) said net income applicable to common shareholders was $2.1 billion, or $8.03 per diluted share, compared with $3.7 billion, or $13.95 per diluted share, in the prior year quarter. The company attributed the decline primarily to increased catastrophe losses, a gain on the sale of its group health business in 2025 and net losses on investments and derivatives. Higher premiums earned partly offset those factors.

Adjusted net income, a non-GAAP measure, was $2.5 billion, or $9.76 per diluted share, versus $3.0 billion, or $11.17 per share, a year earlier. Total revenues were $17.3 billion, up $93 million from the prior year quarter.

Over the first nine months of 2026, the picture was stronger. Net income applicable to common shareholders was $7,719 million, up 21.3%, and adjusted net income was $7,620 million, up 38.1%. Return on common shareholders' equity over the trailing 12 months was 41.3% on a net income basis. Book value per common share reached $120.23, up 25.3%.

Property-Liability: premiums up, margins squeezed

Property-Liability earned premiums rose 3.8% to $15.1 billion, driven by policy growth and higher homeowners average premiums. Premiums written increased 2.5% to $16,020 million. The recorded combined ratio was 86.6, up 6.5 points from 80.1, mainly because of 7.1 points of higher catastrophe losses. Catastrophe losses were $1,650 million against $558 million a year earlier. Underwriting income fell to $2.0 billion from $2.9 billion.

The underlying combined ratio, which excludes catastrophes and prior year reserve effects, was 80.5, compared with 78.7.

Auto: Policies in force grew 3.4% to 26,204 thousand, and new business increased 6.3%, which Allstate linked to expanded distribution, more marketing and new products. Written premiums grew only 0.2% because lower average premiums largely offset the policy growth, reflecting a shift toward Allstate-branded Affordable, Simple, Connected products. The recorded combined ratio was 83.2 versus 82.0, and underwriting income was $1,623 million.

Homeowners: Written premiums rose 7.4% and earned premiums 11.5%. Allstate brand average gross written premium increased 4.9%, which the company tied to rate increases and higher home replacement costs. The recorded combined ratio rose to 89.5 from 71.5 as catastrophe losses reached $1.3 billion, compared with $479 million. The underlying combined ratio was 60.1. Underwriting income was $452 million, down from $1.1 billion. Policies in force grew 3.3%.

Strategy, ALLIE and what comes next

Tom Wilson, who leads the company, said Allstate delivered "excellent financial results and increased Property-Liability growth in the third quarter." Total policies in force reached 217.6 million.

He pointed to the Transformative Growth strategy and the build-out of Allstate's Large Language Intelligent Ecosystem (ALLIE) as having reached "several important milestones." According to the company, ALLIE has been expanded to handle millions of service calls, with additional capabilities planned for early 2027. Wilson also said Protection Plans' international revenues are growing rapidly.

On distribution, Allstate said its Affordable, Simple, Connected auto products are now available in 46 states, and the homeowners product in 42 states. Custom360 middle market standard and preferred auto and homeowners products for independent agents are available in 41 and 42 states, respectively.

For investors and policyholders, the results show a company growing its customer base in both auto and homeowners insurance while absorbing a sharp rise in weather-related losses. Auto pricing is moving lower on average as the product mix shifts, while homeowners premiums are rising.