The Allstate Corporation. Bernstein 2015 Strategic Decisions Conference Thomas J. Wilson: Chairman and Chief Executive Officer May 28, 2015

Transcription

1 The Allstate Corporation Bernstein 2015 Strategic Decisions Conference Thomas J. Wilson: Chairman and Chief Executive Officer May 28, 2015

2 Forward-Looking Statements and Non-GAAP Financial Information This presentation contains forward-looking statements and information. Additional information on factors that could cause results to differ materially from those projected in this presentation is available in the 2014 Form 10-K, in our most recent earnings release, and at the end of these slides. These materials are available on our website, allstateinvestors.com, under the Quarterly Investor Info link. This presentation also contains some non-gaap measures. You can find the reconciliation of those measures to GAAP measures within our most recent earnings release and investor supplement. These materials are available on our website, allstateinvestors.com, under the Quarterly Investor Info link. 1

3 Allstate is an Attractive Investment Opportunity Celebrating 20 Years as an Independent Public Company Competitively differentiated strategy based on: Customer segmentation Analytics-based decision making Advanced technology Over 75,000 Allstate employees, exclusive agency owners, financial specialists and licensed sales producers Total shareholders equity has more than doubled Total shareholder return of 625% vs. S&P % More than $36 billion in cash returned to common shareholders Attractive returns generated from insurance and investments Auto, homeowners, other personal lines, life insurance, and workplace benefits Investment grade fixed income and performance-based equity portfolio Growth through focused customer value propositions and expansion of product and geographic footprint Proactive risk and capital management Long history of cash returns to shareholders 2

4 Deliver the Best Value to Each Customer Segment by Offering Unique Products and Services at a Competitive Price Brand Neutral Brand Neutral, Local Advice Simplified comprehensive protection Confidence broad coverage Makes insurance easier Personal connection through my agent Brand Neutral, Self-Directed Option to purchase brands from multiple companies Multiple products in addition to auto Easy and simple processes Local Advice and Assistance Self- Serve Brand Sensitive, Local Advice Always treats me with respect values my relationship Agency knows me smart about all the risks in my life Best use my hard-earned money protect what matters most to me Helps me when bad things happen Brand Sensitive, Self-Directed delivers in a way that fits my life and helps me make smart choices informative and intuitive tools so I can make smart choices I am able to save time and money I am able to recover quickly access to information, technology and people Brand Sensitive 3

5 Personal Lines Unit Growth With Attractive Returns The Allstate Brand is driving profitable growth Allstate Brand auto policy growth is broad-based Allstate brand homeowners beginning to grow modestly at acceptable returns Allstate Brand Auto & Homeowners Policy in Force Trends (Auto #M) (Home #M) Auto profitability managed by microsegmentation, broad-based analytics and local execution Q1 15 Auto Homeowners 5 (CR) 100 Allstate Brand Auto Combined Ratio Q1 15 (1) Allstate Brand Auto results prior to 2011 and Allstate Brand Homeowners results prior to 2008 are not adjusted for DAC accounting change adopted in

6 Allstate Brand Homeowners a Competitive Advantage Homeowners underlying combined ratio reduced to cover catastrophe losses Rate increases Underwriting sophistication Reduced size of business by 2 million policies from its peak in 2006 House & Home policy Allstate Brand Homeowners Combined Ratio x-catastrophes 1 (CR) Q1 15 (CR) Allstate Brand Homeowners Combined Ratio Q1 15 (1) Allstate Brand Auto results prior to 2011 and Allstate Brand Homeowners results prior to 2008 are not adjusted for DAC accounting change adopted in

7 Create Profitable Growth Using a Local and National Focus 14 local Market Operating Committees + Canada Develop and execute local strategies to drive profitable growth Capabilities include sales, agency support, claims, finance, field product, marketing, corporate relations, and human resources Allstate Brand Market Operating Committees focus on local market dynamics within their states to manage profitable growth Allstate Brand Regional Offices Local market intelligence to identify growth and profit opportunities, and competitor strategies Approximately 650 rate filings across Allstate Brand product lines in 2014 Support 130 local claims offices and 850+ drive-in claim locations with national catastrophe response team and centralized process design, technology and analytics Technology and analytics enhances agency placement and early warning loss trends Work across regional boundaries and with corporate partners to identify, analyze and respond to emerging trends and issues 6

8 Investing in Sustainable Value Creation Expanding Allstate Exclusive Agency platform Underpenetrated markets Leveraging technology and analytics to increase advisory capacity Growing market share Geographic and product expansion Investing in customer acquisition to grow segment market share and build brand Expanding In Business Markets Innovative, broad solutions to protect the business, the business owner and the employees 230,000 local small business owners insured by Allstate 3 million policies through worksites 5 million dispatches in $2 billion of brokered business Building connected customer platform Expanding Allstate Drivewise and Esurance DriveSense Allstate Roadside Services innovation 7

9 Less Trading Activity Proactive Investment Approach Balances Risk and Return Source of Return Market Performance Market-Based Core (~85%) Market-Based Active Largely investment-grade fixed income and passive equity Predictable earnings profile Highly diversified and lower cost mix Performance-Based Long-Term Long-term idiosyncratic investments Invest with best-in-class partners Actively managed strategies Takes advantage of short term market opportunities Performance Based Opportunistic Leverage investment expertise and research Liquidity to distressed sellers / markets More Trading Activity Individual Asset Performance 8

10 Allstate is an Attractive Investment Opportunity with Significant Growth Potential Competitively differentiated strategy based on: Customer segmentation Analytics-based decision making Advanced technology 9.2% Total Cash Return per Common Share Common Dividends Common Share Repurchases 8.3% 9.4% 10.7% Attractive returns 6.3% 5.2% 7.9% 8.9% 3.5% Profitable growth 2.9% 3.1% 3.1% 1.5% 1.8% 0.4% (1) Q Proactive risk and capital management Total Shareholder Return Ending at 5/22/15 ALL Long history of excellent returns to shareholders S&P P&C S&P % 149.1% 110.6% 117.2% 77.4% 72.1% 17.9% 12.0% 14.6% 1 Year 3 Year 5 Year (1) There were five dividend payments in

11 Forward-Looking Statements Forward-Looking Statements This presentation contains forward-looking statements that anticipate results based on our estimates, assumptions and plans that are subject to uncertainty. These statements are made subject to the safe-harbor provisions of the Private Securities Litigation Reform Act of These forwardlooking statements do not relate strictly to historical or current facts and may be identified by their use of words like plans, seeks, expects, will, should, anticipates, estimates, intends, believes, likely, targets and other words with similar meanings. We believe these statements are based on reasonable estimates, assumptions and plans. However, if the estimates, assumptions or plans underlying the forward-looking statements prove inaccurate or if other risks or uncertainties arise, actual results could differ materially from those communicated in these forward-looking statements. Factors that could cause actual results to differ materially from those expressed in, or implied by, the forward-looking statements include risks related to: (1) adverse changes in the nature and level of catastrophes and severe weather events; (2) impacts of catastrophe management strategy on premium growth; (3) regulatory changes, including limitations on rate increases and requirements to underwrite business and participate in loss sharing arrangements; (4) market convergence and regulatory changes on our risk segmentation and pricing; (5) the cyclical nature of the property and casualty business; (6) unexpected increases in the severity or frequency of claims; (7) reestimates of reserves for claims; (8) adverse legal determinations regarding discontinued product lines and other legal and regulatory actions; (9) changes in underwriting and actual experience; (10) the influence of changes in market interest rates on spread-based products; (11) changes in estimates of profitability on interest-sensitive life products; (12) reducing our concentration in spread-based business and exiting certain distribution channels; (13) changes in tax laws; (14) our ability to mitigate the capital impact associated with statutory reserving requirements; (15) compliance and operational issues relating to dispositions and acquisitions of businesses; (16) market risk and declines in credit quality relating to our investment portfolio; (17) our subjective determination of the fair value of our fixed income and equity securities and the amount of realized capital losses recorded for impairments of our investments; (18) competition in the insurance industry; (19) conditions in the global economy and capital markets; (20) losses from legal and regulatory actions; (21) restrictive regulation and regulatory reforms; (22) the availability of reinsurance at current levels and prices; (23) credit risk of our reinsurers; (24) a downgrade in our financial strength ratings; (25) the effect of adverse capital and credit market conditions; (26) failure in cyber or other information security systems; (27) the impact of a large scale pandemic, the threat of terrorism or military action; (28) possible impairments in the value of goodwill; (29) changes in accounting standards; (30) the realization of deferred tax assets; (31) restrictions on our subsidiaries ability to pay dividends; (32) restrictions under the terms of certain of our securities on our ability to pay dividends or repurchase our stock; (33) changing climate conditions; (34) loss of key vendor relationships or failure of a vendor to protect confidential information; and (35) failure to protect intellectual property. Additional information concerning these and other factors may be found in our filings with the Securities and Exchange Commission, including the Risk Factors section in our most recent Annual Report on Form 10-K. Forward-looking statements speak only as of the date on which they are made, and we assume no obligation to update or revise any forward-looking statement. 10