Allstate shares boom on investment strategy for high inflation
TradeStation: Insurance carriers have become a quiet go-to for investors.
Allstate shares are skyrocketing in 2024 as Wall Street traders shift their investment strategies for high inflation.
Shares have risen roughly 4.3% over the last five days and are nearly 13% higher the last three months. Year-to-date, shares have jumped more than 37%. Over the last 12 months, shares have ballooned almost 52%.
“P&C companies like Allstate have become a quiet go-to for investors diversifying away from mega cap growth stocks,” TradeStation’s Global Head of Market Strategy David Russell told PropertyCasualty360.com.
“They’re classic value names that have enjoyed pricing power at a time of higher inflation,” he said. “Wall Street now sees the potential for margin expansion as losses narrow, especially in auto policies. Organic growth could follow if the housing market expands in the coming years.”
Allstate reported total revenues of $15.7 billion for the second quarter of 2024, notching a $1.7 billion increase from the same time in 2023. According to Allstate, the jump in revenue was driven by increased Property-Liability earned premium.
“Net income applicable to common shareholders was $301 million with adjusted net income of $1.61 per diluted common share,” said Allstate President and CEO Tom Wilson.
“Allstate’s strategy of providing affordable, simple and connected protection resulted in strong policy growth in National General branded property-liability insurance and Allstate protection plans sold by retailers,” he said. “National General’s policies in force increased by 12% over the prior year quarter and it is now one of the largest personal lines insurers serving the independent agent channel. Protection Plans policies in force increased by 9% with written premium of $518 million in the quarter, due to higher sales through U.S. retailers and expansion of mobile phone protection plans in Europe.”
Other highlights from Allstate’s second quarter 2024 include:
- Premiums written increased 13.1% compared to the prior year quarter driven by increases for Allstate brand of 10% and National General of 29.1%.
- Underwriting loss in the second quarter of 2024 of $145 million improved from a $2.1 billion loss in the prior year quarter, due to increased premiums earned, improved underlying loss experience and lower catastrophe losses.
Allstate’s third quarter 2024 earnings call is slated for Thursday Oct. 31, 2024 at 9 a.m. EDT.
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