Allstate Corp.

The stable outlook on Allstate reflects our expectation that 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, as shown 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 and seeing continued strong revenue and EBITDA growth for the Allstate Protection Plan business. We expect these will allow the company to achieve strong underwriting results with a combined ratio of 94%-96% and return on equity (excluding the loss booked for the life and annuity entities sale) above 12%. We could lower our ratings

...Allstate is a market leader in personal lines with recent share increases from completed acquisitions. As of year-end 2020, Allstate Corp. and its subsidiaries were the fourth-largest insurer (pro forma) in the U.S. by direct premiums written (DPW). We expect this to continue with the company benefiting from favorable pricing across most business lines and growing relationships with independent agents. It is the second-largest personal lines and homeowner underwriter in the U.S. and fourth-largest auto underwriter, with a focus on regaining market share lost to competitors over the past few years. With its sophistication in pricing and risk segmentation, it managed to stay ahead of underwriting challenges in 2018-2019, and we expect those capabilities will help it navigate current market challenges in the personal auto line. This is supported by a solid understanding of its customer base and cost dynamics that lead to claims inflation and profitability challenges. The company continues...

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