Allstate 2015 Annual Report Download - page 2

Dear Fellow Shareholders
Allstate exists to protect people from life’s uncertainties both today
and far intothe future. We have the capabilities, business model,
people and financial resources to deal with the surprises that aect
ourcustomers and shareholders.
Last year had its share of surprises, including an economic
slowdown in China, the decision by major central banks
to use negative interest rates and a stock market that
declined despite lower unemployment. We also saw an
increase in thenumber of miles driven in the United States,
caused by higher employment and lower gas prices, which
led to more auto accidents and required us to raise auto
insurance prices.
Raising auto insurance prices, however, requires approval
from state insurance departments and, as a result, the
additional revenue lags cost increases. This caused
underwriting income* for auto insurance to decline last
yearby $581million. Despite this, the strength of the
homeowners insurance business and rapid execution of
an auto insurance profit improvement plan resulted in
anunderlying combined ratio* within the range established
asa target at the beginning of the year. Overall, Allstate
hadnet income of $2.1billion in 2015. Operating income*,
which excludes capital gains and losses, was also $2.1billion
or $5.19per diluted share in comparison to $5.40 per diluted
share in 2014.
GOOD OPERATING PERFORMANCE AND PROGRESS
ON OUR STRATEGY IN 2015
While building the future, we must continue to provide
excellent products and services to customers and
generatean appropriate return on capital for shareholders
every year.
Good progress was made on the five 2015 operating
priorities.
• Grow insurance policies in force. The strategy to deliver
unique value propositions to the four segments of
thepersonal lines market through Allstate, Esurance,
Thomas J. Wilson
Chairman and Chief Executive Oicer