Allstate adjusted EPS of $9.76 beats $6.96 consensus in third quarter

A 40 percent beat on adjusted earnings

Net income attributable to Allstate fell 44.5% to $2.08 billion from $3.75 billion a year earlier, and diluted earnings per share dropped to $8.03 from $13.95.

Adjusted net income fell 16.2% to $2.49 billion from $2.98 billion, or $9.76 per diluted share against $11.17.

The quarter showed earnings supported by pricing and investment income while underwriting profit fell. Homeowners earned premiums rose 11.5% to $4.33 billion as rate increases flowed through. The open question is whether Allstate can keep adding policies at 3.3% a year without giving back the underlying margin, which worsened to 80.5 from 78.7.

That $9.76 cleared the $6.96 consensus cited by 24/7 Wall St by 40%. Revenue was $17.35 billion, up 0.5% from $17.26 billion, the company said. Zacks had put the consensus revenue estimate at $17.84 billion.

Expectations had already moved up. Zacks said on 29 October that its consensus for the quarter had risen 4.6% over 30 days to $7.03 a share, which would still have been a 37.1% year-on-year decline.

Catastrophes add 7.1 points to the combined ratio

The recorded Property-Liability combined ratio rose to 86.6 from 80.1, 6.5 points above the prior year. Allstate said 7.1 points of higher catastrophe losses drove the increase, partly offset by 2.4 points of more favorable non-catastrophe prior-year reserve releases. Underwriting income fell 30.1% to $2.02 billion from $2.89 billion.

Homeowners carried the worst of it. Catastrophe losses in the segment reached $1.33 billion against $479 million, cutting underwriting income 59% to $452 million from $1.11 billion, and the recorded combined ratio jumped to 89.5 from 71.5.

The industry backdrop was benign. Gallagher Re counted $92 billion of global insured catastrophe losses in the first nine months of 2026, 29% below the 10-year average and the lowest comparable total since 2019, according to Zacks' preview of insurer results. The third quarter was the sixth in a row without a single natural catastrophe causing more than $10 billion in insured losses.

Auto margins worsen beyond the weather

Strip out catastrophes and prior-year reserve moves and the quarter looks less comfortable. The group underlying combined ratio rose to 80.5 from 78.7.

Auto did most of the damage. Underwriting income slipped to $1.62 billion from $1.73 billion and the underlying combined ratio worsened to 89.8 from 86.0. Earned premiums rose only 0.6% to $9.65 billion, as policy growth was offset by lower average premiums. The recorded auto combined ratio was 83.2 versus 82.0. Homeowners was almost flat on the same underlying basis, at 60.1 against 59.8, Securities.io reported, which isolates weather as the reason reported homeowners profit fell.

Growth is back, and investment income helped

Total policies in force reached 217.6 million, with Property-Liability policies up 3.3%, the company said. Auto policies in force rose 3.4% and new auto applications 6.3%. Homeowners new business rose 10.2% and net premiums written 7.4% to nearly $5 billion.

"Allstate delivered excellent financial results and increased Property-Liability growth in the third quarter," Tom Wilson, who leads the company, said in the results release. Wilson said Affordable, Simple and Connected products and broader distribution lifted market share.

Investment income helped. Net investment income rose $228 million to $1.177 billion on larger asset balances and higher fixed-income yields, Allstate said. Performance-based income was $355 million, up from $227 million on private-equity valuation increases. Over nine months, net income rose 21.3% to $7.7 billion and underwriting income 47.5% to $6.7 billion.

What happens next

Management discusses the quarter on a call at 9 a.m. Eastern on Thursday, 5 November. The number to watch is whether the underlying combined ratio holds as policy counts grow.