The Allstate Corporation (NYSE:ALL.PRF) Q4 2016 Earnings Conference Call - Final Transcript

Feb 02, 2017 • 09:00 am ET


The Allstate Corporation (NYSE:ALL.PRF) Q4 2016 Earnings Conference Call - Final Transcript


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Good day, ladies and gentlemen, and welcome to the Allstate fourth-quarter 2016 earnings conference call.

(Operator Instructions)

As a reminder, today's program is being recorded.

I would now like to introduce your host for today's program, Mr. John Griek. Please go ahead, sir.

John Griek

Thank you, Jonathan. Good morning and welcome, everyone, to Allstate's fourth quarter 2016 earnings conference call. After prepared remarks by our Chairman and CEO, Tom Wilson, Chief Financial Officer, Steve Shebik and me, we will have a question-and-answer session. Also here are Matt Winter, our President, Don Civgin, the President of Emerging Businesses, Mary Jane Fortin, President of Allstate Financial and Sam Pilch, our Corporate Controller.

In December, we announced that John Dugenske will be joining Allstate as Chief Investment Officer in early 2017. John will join the team next month, and will be part of our quarterly earnings calls beginning next quarter.

Yesterday, following the close of the market, we issued our news release and investor supplement and posted the results presentation we will discuss this morning. These documents are available on our website at We plan to file our 2016 Form 10-K later this month.

(Forward-Looking Cautionary Statements)

Also this discussion will contain some non-GAAP measures for which there are reconciliations in our news release in our investor supplement.

We are recording this call, and a replay will be available following its conclusion. And I'll be available to answer any follow-up questions you may have after the call. Now I'll turn it over to Tom.

Tom Wilson

Good morning, and thank you for investing the time to keep up on our progress at Allstate. Now let's start on slide 2.

We delivered excellent results for the year, and finished 2016 with another strong quarter as we continue to effectively execute our short-term plans and build on long-term strategies. As a result, Allstate is well-positioned for continued success.

Auto profit improvement plans over the last two years have enabled us to begin focusing on growth in 2017, while being able to react to further auto loss cost increases. The homeowners business continues to generate attractive returns, despite higher catastrophe losses. Investment results for the year were good, but bounced around from quarter to quarter, reflecting volatile external conditions. At the same time we are investing growth, both with existing businesses and new opportunities.

Net income was $811 million for the quarter and $1.76 billion for the year. Operating income was $2.17 per share for the fourth quarter and $4.87 per share for the year. The recorded combined ratio for the year was a touch over 96%, and the underlying combined ratio was at the favorable end of the range we provided to shareholders a year ago.

Shareholders received $1.8 billion in cash through a combination of dividends and share repurchases. We also welcomed SquareTrade into the fold, providing shareholders another opportunity for profitable growth.

Going to the box at the bottom, total revenues of $9.3 billion for the fourth quarter reflect a 2.8% increase in property liability insurance