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2002 2008Sanford C. Bernstein Twenty-Ninth Annual
Strategic Decisions ConferenceMay 29, 2013
Thomas J. WilsonChairman, President, and Chief Executive Officer
Sanford C. Bernstein 29th Annual Strategic Decisions Conference – May 29, 2013
Bank of America Merrill Lynch Financial Services Conference
1
Safe Harbor
Forward-Looking Statements and Risk FactorsThis presentation may contain forward-looking statements about our outlook for the Property-Liability combined ratio excluding the effect of catastrophes, prior year reserve reestimates, business combination expenses, and the amortization of purchased intangible assets for 2013, our investment portfolio and our capital management plan. Additional information on factors that could cause results to differ materially from those projected in this presentation is available in the 2012 Form 10-K and in our most recent earnings release, available on our website, allstate.com. This presentation also contains some non-GAAP measures. You can find the reconciliation of those measures to GAAP measures on the Investor Relations portion of our website, allstate.com, under the “Quarterly Investor Info” link and “Conference Call Archive” link. Forward-looking statements are subject to the Private Securities Litigation Reform Act of 1995 and are based on management’s estimates, assumptions and projections. Actual results may differ materially from those projected based on the risk factors described below.
•Premiums written and premiums earned, the denominator of the underlying combined ratio, may be materially less than projected. Policyholder attrition may be greater than anticipated resulting in a lower amount of insurance in force.
•Unanticipated increases in the severity or frequency of standard auto insurance claims may adversely affect our underwriting results. Changes in the severity or frequency of claims may affect the profitability of our Allstate Protection segment.
•The actions we have taken to reduce the sensitivity of our investment portfolio to a rise in interest rates may not be effective.
•Statements about the implementation of our capital management plan are subject to market conditions.
We undertake no obligation to publicly correct or update any forward-looking statements. This news release contains unaudited financial information.
Sanford C. Bernstein 29th Annual Strategic Decisions Conference – May 29, 2013 22
Strategically Responded to Dramatic External Change, Now Positioned for Growth
Delivering Industry-
Leading Auto Margins
Delivering Industry-
Leading Auto Margins
Proactively Managing
Investment Portfolio
Proactively Managing
Investment Portfolio
Improving Returns from
Allstate Financial
Improving Returns from
Allstate Financial
Improving Returns from Homeowners
Improving Returns from Homeowners
Creating Sustainable Growth by Focusing on the Customer
20122004 201020082006
Significant Hurricane
LossesFinancial Crisis /
Economic Recession
Significant Catastrophe and Severe Weather Losses
Selected Dramatic External Shocks
Competitively Differentiated
Customer Value
Propositions
Competitively Differentiated
Customer Value
Propositions
Sanford C. Bernstein 29th Annual Strategic Decisions Conference – May 29, 2013
-4.1%-4.8%
-6.2% -5.8%
-3.6%
2.8%
2.4%
-1.9%
-1.3%
2.4%2.1%
-0.1%
7.1%
-3.4%
-4.2% -3.9%
3.4%
0.1%
-8.0%
-6.0%
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
2005 2006 2007 2008 2009 2010 2011 2012 Q12013
NWP Growth PIF(2) Growth
3
2002 2008
Combined Ratio(% of Earned Premium and Index to 2005)
64.872.0 73.6 74.3 71.6
64.8 66.4
70.5
10.9
19.5
46.5
29.0 31.3
50.0
18.775.7
91.5
102.6105.6
88.085.1
63.0
73.2
23.2
40
50
60
70
80
90
100
110
2005 2006 2007 2008 2009 2010 2011 2012 Q12013
CR ex-Cat Cat Ratio PML Index
121.6119.7133.5
Written Premium / Policies in Force
(1) Probable maximum loss for hurricanes and earthquakes as calculated by external risk models and after reinsurance recoveries(2) Excludes Canada(3 )Excludes TX and CA mandated rate reductions(4) Q1 2013 results on a 12 month moving basis for NWP Growth
Combined ratio excluding catastrophes has declined for the last 3 years
Policies in force have declined while rates have increased premiums written
CW Approved 1.0% 2.4% 3.6% 3.2% 8.4% 7.0% 8.6% 6.3% 5.6%Rate Changes
Improving Returns from Homeowners
(4)(3)(1)
Sanford C. Bernstein 29th Annual Strategic Decisions Conference – May 29, 2013
Focus on Delivering Attractive Risk Adjusted Returns
4
Corporate
Municipal
US & Foreign Gov't/Agency RMBS
Non-agency RMBS/ABS
Equity Securities
MortgageLoans/CMBS
Ltd PartnershipIntersts/Other
Short TermInvestments
$100.5$95.6 $97.3
Carrying Value ($ in billions)
38% 46% 50%
16%
16%
33%
21%
15%
11%7%
5%
9%
6%
5%
11%
6%5%
9%
2008
6%3%3%
5% 7%1%
9%
6%
4%8%
8%2%
2009 2010 2011 2012
16%
9%
6%
15%
3%5%
10%
23%
29%
$99.8$96.0
13%
(Measured at Year End)
21%25%
22%
46%
20%
12%
28%
47%
15%
10%13%
41%
0%
10%
20%
30%
40%
50%
Due in three years orless
Due after three yearsthrough seven years
Due after seven yearsthrough ten years Due after ten years
12/31/2011 12/31/2012 3/31/2013
Property-LiabilityFixed Income by Scheduled Maturity Date
Portfolio Total Return (GAAP)
-11.1
10.98.5
6.6 7.3
-15
-10
-5
0
5
10
15
2008 2009 2010 2011 2012
(%)
Sanford C. Bernstein 29th Annual Strategic Decisions Conference – May 29, 2013
80
85
90
95
100
105
110
115
120
125
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
ALL GEICO PGR State Farm Industry Average
5
Notes: ALL data is Allstate Brand Standard AutoIndustry source is SNLAmounts prior to 2008 do not reflect change in accounting for acquisition costs
Auto performance has yielded attractive profitability and returns
Standard Auto Combined Ratio
Delivering Industry-Leading Auto Margins
Sanford C. Bernstein 29th Annual Strategic Decisions Conference – May 29, 2013
Improving Returns from Allstate Financial
Exited variable annuity business in 2006
Reduced fixed annuity business
New premiums and deposits peaked in 2004; were cut in half by 2008, and have exited most product lines today
Lowered cost structure by 20% in 2009
Expanding higher margin benefits and Life business
Investing in higher return cash-generating investments
6
Sanford C. Bernstein 29th Annual Strategic Decisions Conference – May 29, 2013 7
Brand Neutral
Brand Sensitive
Local Advice &Assistance Self Serve
Distinct offerings and strategies to drive growth in all consumer segments
Market Premium ShareAuto: ~30%
Property: ~35%Encompass Rank #15
Market Premium ShareAuto: <1%
Property: <1%
Market Premium ShareAuto: ~25%
Property: ~10%Esurance Rank #7
Market Premium ShareAuto: ~45%
Property: ~55%Allstate Rank #2
Competitively Differentiated Customer Value Propositions
Sanford C. Bernstein 29th Annual Strategic Decisions Conference – May 29, 2013
05
1015202530354045
Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013
Allstate Brand Standard AutoStates with Increases in New Issued Apps
05
1015202530354045
Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013
Allstate Brand Standard AutoStates with Improved Retention
Allstate Brand Unit Growth Trend Slowly Improving . . .
8
Allstate Brand Policies in Force*
0
10
20
30
40
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Q12013
Thou
sand
s
Total Std. Auto Homeowners
(Mil)
* U.S.
Q12013
Change since2003(Mil)
TotalStd. AutoN/S AutoHome.All Other
30.516.9
.55.97.2
-1.3.6
-.9-1.2
.2
In 2012, 27 states had favorable comparisons to 2011. In 2012, 11 states had favorable comparisons to 2011.
Sanford C. Bernstein 29th Annual Strategic Decisions Conference – May 29, 2013
Esurance . . . Off To a Good Start
NWP
PIF
100
150
200
250
300
350
400
Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013400
500
600
700
800
900
1000
1100
1200($ Mil) (000)
9
NWP PIF
Objective ProgressImprove marketing effectiveness Launched successful new ad campaign
Improved awareness, consideration, and conversion rateIncreased advertising spending
Improve customer mix and increase policyholder retention Shifting new business mix towards preferredWriting more multi-car policiesImproving customer retention Increasing lifetime premium
Broaden product portfolio Expanded auto coverage to additional statesLaunched rentersLaunching homeowners and motorcycle
Leverage claims capabilities Applying best practices and technologyImproved vendor pricing
Utilize Allstate’s scale Achieving savings from Allstate’s purchasing scale, personnel costs, operating centers, information technology development and investments
Sanford C. Bernstein 29th Annual Strategic Decisions Conference – May 29, 2013
2013 Priorities
10
Grow insurance premiums
Overall net premiums written increased 2.5% from Q1 2012, with all brands contributing
Maintain auto profitability
Allstate brand standard auto combined ratio of 94.2, an underlying combined ratio of 93.5
Esurance combined ratio of 116.7 remains elevated due to higher new business growth
Encompass combined ratio of 105.8, trend improved, further profit improvement actions required
Raise returns in the homeowners and annuity businesses
Improved Allstate brand homeowners profitability with an underlying combined ratio of 65.8 and a recorded combined ratio of 85.1
Annuity returns declined due to reduced limited partnership income and continued low interest rates
Proactively manage investments
Total return on investment portfolio … 1.2% for Q1 2013
Progress made on strategic initiatives to deliver more attractive risk-adjusted returns
Reduce our cost structure
Operating expenses increased driven by employee costs and accelerated technology investments
Reinsurance program costs lowered beginning June 1, 2013
Sanford C. Bernstein 29th Annual Strategic Decisions Conference – May 29, 2013 11
Innovating Around the Connected Consumer with Drivewise®
Value proposition extends beyond pricing
Currently in 16 states
High acceptance rate
Over 40,000 enrollments each month
More than 450 million miles recorded
Aggressively expanding into new states while building innovative services to augment current offering
Sanford C. Bernstein 29th Annual Strategic Decisions Conference – May 29, 2013
Additional Growth Platforms
12
Sanford C. Bernstein 29th Annual Strategic Decisions Conference – May 29, 2013
Actively Manage Capital to Increase Shareholder Value Opportunities
Capital Management Plan . . . Actions enhance Allstate’s strategicand capital flexibility
Lower cost of capital
Minimal impact on earnings
No impact on share repurchase program
13
Sanford C. Bernstein 29th Annual Strategic Decisions Conference – May 29, 2013
A Focused Strategy and Proven Ability to Execute Creates Value for Customers and Shareholders
Unparalleled brand and franchise
Only competitor able to offer products and services to all four unique consumer segments
Focused and consistent priorities
Proactive execution
Significant return of capital
Business model and capabilities to drive real growth
14
Bank of America Merrill Lynch Financial Services Conference
15