Allstate Corp.

The stable outlook on Allstate reflects S&P Global Ratings' expectation the company will balance its capital management initiatives with prudent risk-reward optimization to sustain very strong capitalization. We expect Allstate to maintain its excellent competitive position, demonstrated by retention of its top-five market share in the U.S. personal lines market, as it implements its transformative growth strategy, leveraging new independent agents from the National General acquisition while achieving continued strong revenue and EBITDA growth for the Allstate Protection Plan business. We expect these initiatives will allow the company to achieve strong underwriting results with a combined ratio of 92%-96% and return on equity (excluding the loss booked for the ALIC sale) in excess of 12%. We may lower our ratings

...Allstate is a market leader in personal lines but faces long-term headwinds from technology disruption. As of year-end 2019, Allstate Corp. and its subsidiaries were the fourth-largest insurer in the U.S. measured by direct premiums written, which we expect to improve due to the recently closed National General Holdings Corp. (National General) acquisition. It is the second-largest personal lines and homeowner underwriter in the U.S. and fourth-largest auto underwriter, thought it has lost some market share to more direct writers over the last few years. With its expertise in pricing, it has managed to stay ahead of underwriting challenges in the industry in 2018-2019, supported by a solid understanding of its customer base and cost dynamics that lead to claims inflation and profitability challenges. The company continues to invest in technological improvements. These measures enhance distribution capabilities and usage based product offerings to provide the best solutions to policyholder...

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