Allstate reduces millions of property premiums after doubling net income in 2025
Allstate reports reducing premiums for 7.8 million auto and homeowners insurance customers by an average of 17% after more than doubling its net income in 2025.
“Allstate had a terrific year by better serving customers and making protection more affordable,” said Tom Wilson, Allstate president and CEO, in a press release. “We proactively reduced premiums for 7.8 million auto and homeowners insurance customers by an average of 17% through tailored coverage reviews to offset cost inflation. We also improved 69 million customer interactions and provided customers with nearly $38 billion in support and financial resources when the unexpected happened in 2025.”
Allstate’s net income to common shareholders was $10.2 billion for 2025, compared to $4.6 billion in 2024.
Allstate’s combined ratio for property-liability improved by 14 points to 72.9 for the fourth quarter, compared to 2024. The release states this was due to higher average earned premiums, the benefit of non-catastrophe reserve releases, and lower catastrophe losses.
The auto insurance combined ratio lowered by 12.7 points to 80.8 in the fourth quarter, compared to the previous year.
The company’s total revenues also grew by 5.6% to $67.7 billion and its adjusted net income was $9.3 billion.
Fourth-quarter results show $17.3 billion in revenue, $839 million (5.1%) higher than the third quarter. Net income applicable to common shareholders was $3.8 billion, compared to $1.9 billion in Q4 2024. Adjusted net income was $3.8 billion compared to $2.1 billion in the previous quarter.
“Total policies in force increased to 210.9 million in the fourth quarter, up 3.0% from the prior year, driven by broad distribution and affordable, simple, connected products,” Wilson said in the release.
Property-liability earned premiums increased by 6.1% in the fourth quarter to $14.8 billion, compared to the prior year, the release says. The release attributes the increase to higher average premiums and policy-in-force growth.
Underwriting income was $4 billion compared to $1.8 billion in 2024.
“Prior year non-catastrophe reserve reestimates were $719 million in the fourth quarter, a 7.5 point benefit to the combined ratio, reflecting favorable severity development in personal auto injury and physical damage coverages,” the release says.
Auto insurance policies in force grew by 2.3%, with a 22.8% increase in new business reflecting expanded distribution, increased marketing, new products, and sophisticated rating plans.
Doug Heller, Consumer Federation of America director of insurance, recently discussed insurance costs during the Automotive Insights Symposium held by the Federal Reserve Bank of Chicago.
A number of insurance companies aggressively set prices as inflation climbed, he said.
“A number of the big players really overshot in terms of their expectation of inflation,” Heller said. “They were building their insurance premiums as though that peak of inflation in ’22 and ’23 was going to last into ’24, ’25, and ’26.”
This gave many companies and shareholders big dividends and profits in 2024 and 2025.
Without naming the company, he mentioned an insurer in Florida that had to give back $1 billion due to excessive rates.
He later said that states that invest more resources in insurance regulatory oversight have a more stable pricing environment.
“Because one of the problems that we see in less regulated states, insurance companies will come in and try to grab up market share with these low prices, and then they will feel the bite of claims, and that’s when they will start doing things like negotiating downward with repair shops and removing protections for consumers,” Heller said. “My experience is from the late 90s, when I started looking at this. Having a stable regulatory environment is much better than this sort of wild west approach that we see in some states. The insurance companies go up and down, they chase money when they want to invest, when investment times are good, but when the federal funds rate is really low, and there’s not much to do with your money on hand than they don’t want as much business, so they jack up rates again.”
Consumers can’t handle the volatility as easily as the companies can, he said.
A recent Insurify report found that insurance dropped 6% nationally in 2025. The decrease follows the average cost of insurance rising 46% since 2022 to 2024, it says.
Thirty-nine states saw their prices fall, including eight states with decreases of 15% or more, the report says.
However, not every state saw a decline. Four states had double-digit cost increases in 2025, including New Jersey, where rates increased by an average of 20%. Others that saw large increases include D.C. (18%), Rhode Island (13%), and Michigan (12%).
Insurance companies used the elevated premiums to improve their financial footing, helping the industry absorb tariff-driven costs without raising prices, according to the report. Yet, the report notes that the full effects of tariffs have not hit repair costs.
“Now, many insurers are cutting rates to attract and retain new customers,” the report says.
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