Allstate Corp (NYSE: ALL) stock fell over 0.2% on 5th November, 2020 (as of 11:41 am GMT-5 ; Source: Google finance) after the company post mixed third quarter of FY 20. The company reported 2.4% fall in the adjusted net income to $923 million to the prior year quarter due to higher catastrophe losses, restructuring charges related to the Transformative Growth Plan and lower Allstate Life income, which is partially offset by an improved underlying combined ratio in auto insurance.
Property-Liability written premium increased 0.9% to $9.40 billion in the third quarter of 2020 compared to the prior year. The recorded combined ratio of 91.6 in the third quarter of 2020 led to underwriting income of $753 million, which is a growth of 2.2% compared to the prior year quarter. Income increased due to a decrease in auto losses and increased premiums earned, which was partially offset by higher catastrophe losses and restructuring charges related to the Transformative Growth Plan.
Moreover, Allstate brand auto insurance net written premium posted growth of 1.1%, and policies in force rose 0.1% in the third quarter of 2020 compared to the prior year quarter. The recorded combined ratio of 85.2 in the third quarter of 2020 was 7.7 points below the prior year quarter, and the underlying combined ratio of 84.2 in the third quarter was 8.9 points below the third quarter of 2019, mainly due to higher premiums earned and lower loss costs from reduced miles driven. Allstate brand homeowner’s insurance net written premium rose 2.6%, and policies in force grew 1.2% in the third quarter of 2020 compared to the prior year quarter. This is mainly due to increased catastrophe losses, despite the favorable impact of prior year catastrophe reserve estimates from wildfire subrogation settlements.
ALL in the third quarter of FY 20 has reported the adjusted earnings per share of $2.94, while reported the adjusted revenue growth of 3.9 percent to $11.5 billion in the third quarter of FY 20.
Additionally, in the third quarter, the company returned $967 million in cash to shareholders through a combination of $169 million in common shareholder dividends and $798 million in share repurchases. This includes a $750 million accelerated share repurchase agreement in September expected to be completed on or before January 12, 2021. There has been 3.5 points increase in the adjusted net income return on equity to 17.7%. Book value per share increased 18.0% to $82.39.