Goldman Sachs Financial Services Conference. December 10, Thomas J. Wilson Chairman, President, and Chief Executive Officer

Transcription

1 Goldman Sachs Financial Services Conference December 10, 2013 Thomas J. Wilson Chairman, President, and Chief Executive Officer

2 1 Safe Harbor This presentation contains forward-looking statements and information. Forward-looking statements are subject to the Private Securities Litigation Reform Act of 1995 and are based on management s estimates, assumptions and projections. Actual results may differ materially from those projected based on the risk factors described below. Additional information on factors that could cause results to differ materially from those projected in this presentation is available in the 2012 Form 10-K, our current Form 10-Q for the quarter ended September 30, 2013, and in our most recent earnings release, available on our website, allstate.com. This presentation also contains some non-gaap measures. You can find the reconciliation of those measures to GAAP measures on the Investor Relations portion of our website, allstate.com, under the Quarterly Investor Info link and Conference Call Archive link.

3 2 Allstate Is An Attractive Investment Opportunity Strategy creates sustainable revenue and earnings growth by offering unique products to four distinct consumer segments Focused, consistent priorities and a history of delivering on our commitments Attractive auto and underlying homeowner margins Well-established track record of strong cash returns to shareholders Valuation continues to have significant upside potential

4 Our Strategy to Provide Competitively Unique Offerings to Distinct Consumer Segments Continues to Gain Traction 3 Market Premium Share Auto: ~30% Property: ~35% Encompass Rank #15 Brand Neutral Market Premium Share Auto: <1% Property: <1% - Focus on Package Policy - Leverage Esurance Growth Local Advice and Assistance Self- Serve Market Premium Share Auto: ~45% Property: ~55% Allstate Rank #2 - Raise Customer Loyalty - Strengthen and Expand Agencies - Leverage Brand and Differentiated Product Offering Brand Sensitive - Increase Preferred Auto Risks - Broaden Product Offering Market Premium Share Auto: ~25% Property: ~10% Esurance Rank #7

5 Execution of Our Strategy is Progressing Well 2013 Operating Priorities and Results Grow insurance premiums Positive premium growth; all brands contributing Maintain auto profitability Protection Standard Auto combined ratio: 96.6 YTD Raise returns in homeowners & annuity businesses Protection Homeowners combined ratio: 82.4 YTD Divestiture of LBL, subject to regulatory approval Proactively manage investments Protection portfolio duration reduced to mitigate interest rate risk Annuity returns improved; long-term outlook remains challenging Financial Highlights Sep YTD 2013 Full Year 2012 Revenues $25.7B $33.3B Operating Income $1.89B $2.15B Per Diluted share $3.99 $4.36 Net Income (1) $1.45B $2.31B Per Diluted Share (1) $3.07 $4.68 Book Value Per Common Share $43.49 $42.39 ROE - Operating Income 12.0% 12.4% Capital Returned to Shareholders $2.0B (2) $1.4B Reduce the cost structure Property-liability expense ratio has decreased sequentially since Q (1) Available to common shareholders (2) Trailing 12 months 4

6 5 Strategically Responding to Dramatic External Change Selected Dramatic External Shocks Significant Hurricane Losses Significant Catastrophe and Severe Weather Losses Financial Crisis / Economic Recession Historically Low Interest Rate Environment Creating Sustainable Growth by Focusing on the Customer Maintain Auto Profitability Improve Homeowners Returns Reduced Capital in Spread-Based Businesses Proactively Manage Risk and Return in Investment Portfolio Competitively Differentiated Customer Value Propositions

7 6 Momentum is Evident in Growth Trends Each Brand is positively contributing to growth Allstate Brand standard auto growing over prior year Protection Written Premium & Items in Force Homeowners rate of decline decreasing; positioned for profitable growth Esurance, Encompass both growing Exclusive Agency force is energized and engaged Footprint is growing year over year Agencies are larger and better capitalized Agency relationship survey results significantly improved Allstate Brand Domestic Standard Auto and Homeowners Items in Force Agency engagement in writing Allstate Financial products continues to rise

8 7 Drivewise and DriveSense Position Us in the Connected Car More Touchpoints, Safer Drivers Drivewise currently in 30 states; DriveSense in 15 states Over 275,000 Drivewise and almost 10,000 DriveSense connected vehicles Nearly 1.5 billion miles of data recorded since inception between both programs Extending the value proposition beyond pricing: Improve driving behaviors Teen safe driving Platform for future services

9 Strong Cash Returns With Valuation Below Historical Levels Dividends Paid Share Repurchase Total Cash Return per Common Share % Return Sep TTM $449M $1,569M $2,018M $ % 2012 (2) $534M $913M $1,447M $ % 2011 $435M $953M $1,388M $ % Since the spin-off from Sears, Allstate has returned $32 Billion of capital to shareholders $65.37 ALL Stock Price $54.32 Price / Book Multiple (1) Price per share at: Mean = $60 +1 Std Dev = $77-1 Std Dev = $43 $22.77 $14.55 Jan 2005 Dec 2006 Mar 2009 Sep 2011 Dec 2013 Q Q Q Q (1) Price/Book and Book Value metrics stated on a Tangible Book Value basis (2) There were five dividend payments made in

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