The role of business is to create prosperity by serving customers, making a profit, creating jobs and improving communities. This Prosperity Report demonstrates how Allstate measures up to this role. It begins with Our Shared Purpose, which articulates our strategic vision, values, principles and priorities.
Allstate’s business strategy is to increase market share in our traditional auto, home and life insurance products and newer offerings such as electronic device and identity protection. Translating this strategy into daily activity requires a system of “strategic middleware,” including customer value propositions, competitively differentiated business models and annual operating priorities. We are the only company to offer four distinct customer value propositions for property-liability insurance. Acquiring SquareTrade and InfoArmor positions us in high growth protection categories with superior business models.
In 2018, Allstate made excellent progress in executing this strategy while delivering on annual operating priorities. Revenues reached almost $40 billion with premiums increasing 6.9% from the prior year. Policies in force grew by 38% to over 113 million reflecting outstanding organic growth from SquareTrade and a 2.9% increase in property-liability policies. Profitability was strong with adjusted net income* of $3.13 billion and return on equity* of 10%.
Reinventing protection requires us to innovate, take risks and create change, not just react to trends. Technology investments ensure customers get good value for their hard earned money. For example, auto insurance claims are now settled in hours instead of days by using digital images which requires fewer employees and lowers costs. At the same time new jobs were created by investing in telematics for auto insurance and expanding product offerings and distribution. The Allstate family has grown to 88,000 members over the past five years, an increase of 14,400.
Allstate’s culture is based on integrity, inclusive diversity and empowering people. We were once again named among the World’s Most Ethical Companies by Ethisphere. Employee engagement is high because helping customers navigate unexpected and unwanted events is rewarding. In addition, over 32,000 Allstaters have clarified their personal purpose through Energy for Life which links their objectives to Allstate’s.
Empowering others helps fulfill our responsibility to build stronger communities. Allstate’s philanthropy has enabled over six million youth to volunteer in their communities and helped victims of domestic violence free themselves from abuse.
All of us at Allstate are thankful for the opportunity to make a difference in society!
Tom Wilson, Chair, President and Chief Executive Officer