Allstate faces risks from claims costs exceeding reserves, increased claim frequency/severity, catastrophes, limitations in loss cost models, price competition, market risk, investment portfolio declines, credit quality issues, regulatory changes, capital requirements, rating downgrades, competitive markets, changing consumer preferences, technology changes, business implementation challenges, reinsurance availability/counterparty risk, acquisitions/divestiture risks, legal/regulatory actions, accounting standard changes, and tax law changes. The company is also exposed to various legal proceedings and regulatory inquiries.
Financial Upside
Allstate anticipates increased personal property-liability market share and expanded protection offerings. Improved underwriting results, higher earned premiums, and realized capital gains on investments are expected to drive revenue growth. Positive investment income, particularly from market-based strategies, is anticipated. The sale of the employer voluntary benefits business is expected to generate a gain. The company is pursuing the sale of other businesses, which could also generate gains.
