Allstate Corp.

The negative outlook indicates our expectation that Allstate's underwriting and capitalization will remain challenged over the next 6-18 months as it works through rate needs, reinsurance renewals for certain programs, business expansion, and shareholder return initiatives. We now expect this will lead to net premiums written growth of 7%-9% in 2023, falling to 6%-8% in 2024, with a combined ratio of 101%-103% in 2023, improving to 97%-100% in 2024. Although capital is below historical levels and our base case expectations in a normalized environment, we believe it will recover due to accumulated other comprehensive income (AOCI) recoveries, improving underwriting performance, higher net investment income levels from fixed income, and strategic repositioning of the investment portfolio, with capital returns slowing as

...Allstate is a market leader in personal lines with recent share increases from completed acquisitions. As of year-end 2022, Allstate Corp. and its subsidiaries were the fourth-largest insurer in the U.S. by direct premiums written. We expect Allstate to maintain this position despite an expected slowdown in growth measured by policies in force as the group remains focused on improving the underlying profitability for key product lines before transitioning back toward gaining personal lines market share. Allstate is the second-largest personal lines and homeowners underwriter in the U.S. and fourth-largest personal auto underwriter, with its continued focus on improving expense infrastructure allowing it to be more competitive with pricing to regain market share lost over the last few years. Despite navigating previous underwriting cycles well, Allstate has been challenged over the last 15 months as elevated severity, supply chain disruption, and elongated claims cycles weakened underwriting...

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