2. The Allstate Corporation (NYSE:ALL)
Year-to-Date Performance: 34.05%
Number of Hedge Fund Holders: 61
The Allstate Corporation (NYSE:ALL) is an American insurance company that offers a wide variety of insurance products, including auto, home, renters, business, and life insurance. Known for its comprehensive protection plans, Allstate provides coverage for cars, homes, electronic devices, and even identity theft. The company’s insurance and protection products are available through a broad distribution network, which includes Allstate agents, independent agents, and major retailers.
A significant milestone for the company was the acquisition of National General in January 2021 for $4 billion. This move greatly expanded its independent agent channel and added various businesses to its portfolio, including personal auto insurance and group health services. Since the acquisition, The Allstate Corporation (NYSE:ALL) has seen substantial growth in the number of customers the corporation protects through independent agents, adding nearly 1.7 million policies and achieving a compound annual growth rate (CAGR) of 8% in policies over the past four years. This expansion has contributed to over $5.1 billion in premiums written in the first half of 2024.
In the second quarter of 2024, Allstate (NYSE:ALL) reported revenues of $15.7 billion, reflecting a 12% increase from the previous year. This growth was driven by higher insurance premiums and increased investment income. The company handled almost 2 million customer claims during this period, demonstrating its commitment to supporting customers after events like storms and accidents.
The company’s Property-Liability profit improvement plan has also shown positive results, with an underlying combined ratio of 85.3. This indicates effective management of expenses relative to earned premiums. The net income applicable to common shareholders reached $301 million, translating to adjusted net income of $1.61 per diluted share.
Premiums written rose by 13.1% compared to the same quarter last year. This growth was fueled by a 10% increase in premiums for the Allstate brand and a 29.1% rise for National General.
The growth in premiums and policies suggests robust market demand and effective operational strategies. As The Allstate Corporation (NYSE:ALL) continues to adapt and grow its business, it presents a compelling case for investors looking for stability and growth in the insurance sector.
ALL ranks second on our list of hot insurance stocks to buy right now. As of the second quarter of 2024, The Allstate Corporation (NYSE:ALL) was held by 61 hedge funds, according to Insider Monkey’s database. Ariel Investments stated the following regarding The Allstate Corporation (NYSE:ALL) in its “Ariel Global Fund” second-quarter 2024 investor letter:
“We added property and casualty insurer, The Allstate Corporation (NYSE:ALL). A challenging macro-environment, inflation and lower reserve development led to significant underwriting losses across key markets, presenting us with an attractive entry point. Looking ahead, we expect the strong pricing environment, coupled with lower inflationary pressure and future premium growth to yield upside for shares. Additionally, management is committed to improving its adjusted expense ratio and recently made upgrades to its claims handling processes to minimize loss development and lower claim severities.”
