Transforming Allstate and improving society
Allstate’s role in society is to serve customers, earn a return for shareholders, create economic growth and strengthen communities. This Prosperity Report highlights our successes and challenges in accomplishing these objectives.
Allstate has been in the catastrophe business for 89 years and helped rebuild communities after hurricanes, earthquakes and wildfires. Islands cut in half by wind, roads turned into asphalt pretzels and homes melted by heat have been rebuilt with America’s massive resources, a can-do attitude and Allstate financial support of $48 billion over the last 25 years. The impact of these events was more geographically concentrated than the coronavirus pandemic yet the lessons from past disasters are valuable in helping customers cope with this crisis. Putting people first, we are giving money back to auto insurance customers as they drive less due to social distancing. Financially struggling customers can defer their payments. The Allstate Foundation and our people are supporting many social service organizations. We will get through this pandemic and be stronger.
Allstate’s strategy to stay strong is to increase market share in personal property-liability insurance and provide customers with a circle of protection through life, worksite, consumer product protection plans and identity protection. This is consistent with Our Shared Purpose, which is to protect people from life’s uncertainties. Our Transformative Growth Plan will provide customers with simple, affordable and connected products that will differentiate us from the competition. This multi-year undertaking increases operational risk but lowers strategic risk. As technology enables us to serve customers faster and better it will also require employees and Allstate agents to build new capabilities and embrace change.
We begin this transformation from a position of strength with excellent results on 2019’s operating and financial priorities. An intense customer focus enabled us to raise the Enterprise Net Promoter Score, a measure of customer satisfaction, for the third straight year. Property-liability written premiums reached $35.4 billion, an increase of approximately $2 billion. Adjusted net income* was $3.48 billion, reflecting excellent underwriting results in the property-liability businesses and strong earnings from other businesses and the investment portfolio. The adjusted net income return on equity* was 16.9%, in the range of our long-term goal of 14% to 17%. Shareholders also received $653 million in dividends and the percentage ownership of a share of stock in the company increased by 4.1% due to $1.8 billion of share repurchases.
While a sound strategy, excellent operating capabilities and significant capital are all critical to success, it is Allstate’s culture that ensures we stay successful. Our Shared Purpose articulates five core values which have resulted in recognition for strong ethics, inclusive diversity and innovation. We define culture as “a self-sustaining system of shared values, principles and priorities that shapes beliefs, drives behavior and influences decision-making within an organization.” The Transformative Growth Plan requires us to put even more focus on customers, empowerment and operational excellence. The Board has also elevated culture to one of Allstate’s primary risk and return categories.
I believe purpose-driven companies are powered by purpose-driven people. Everybody at Allstate must be a leader and 44% of active employees have completed the Energy for Life program. We also have assembled a senior leadership team that will drive success far into the future. I want to thank Vice Chair Steve Shebik, who has been an outstanding compatriot for 25 years and has decided to retire.
Allstate is a positive force in America and it is my responsibility to ensure it stays that way. We have successfully advocated at the state level for addressing the impacts of climate change by strengthening building codes, expanding emergency response capabilities and creating catastrophe insurance pools. Allstate’s Board governance has been recognized as amongst the best for public companies. The Allstate Foundation helps empower millions of youth and supports survivors of domestic violence. With your support, Allstate will continue to protect people from life’s uncertainties and help build a better world.
I am proud to have the opportunity to serve you and the millions of people who depend on Allstate.
Tom Wilson, Chair, President and CEO