The Allstate Corporation (ALL) reported third-quarter catastrophe losses of $1.65 billion, lifting the Property-Liability recorded combined ratio to 86.6 and cutting underwriting income to $2.0 billion from $2.9 billion a year earlier.

Net income applicable to common shareholders was $2.1 billion, or $8.03 a share, compared with $3.7 billion, or $13.95 a share, in the year-ago quarter. The company said the year-over-year decline reflected increased catastrophe losses, a gain on sale of the group health business in 2025 and net losses on investments and derivatives, partially offset by increased premiums earned. Adjusted net income was $2.5 billion, or $9.76 a share.

Consolidated revenues were $17.3 billion. Property-Liability earned premiums were $15.1 billion, up 3.8% from the year-ago quarter, which the company attributed primarily to policies in force growth and higher homeowners insurance average premiums. Property-Liability policies in force were 39.3 million. Total policies in force reached 217.6 million.

The recorded combined ratio was 6.5 points above the year-ago quarter, which the company said was primarily due to 7.1 points of higher catastrophe losses, partially offset by 2.4 points of more favorable non-catastrophe prior-year reserve releases. The underlying combined ratio was 80.5.

Allstate Protection auto premiums written were $9.9 billion, up 0.2% from the year-ago quarter, as policies in force growth of 3.4% was largely offset by lower average premiums. New auto business rose 6.3%. The recorded auto combined ratio was 83.2; the underlying auto combined ratio was 89.8. Auto underwriting income was $1.6 billion. Auto policies in force were 26.2 million.

Homeowners premiums written were $5.0 billion, up 7.4% from the year-ago quarter, and earned premiums were $4.3 billion, up 11.5%. Allstate-brand homeowners average gross written premium rose 4.9%, which the company said reflected rate increases and higher home replacement costs. Homeowners catastrophe losses were $1.33 billion, compared with $479 million a year earlier. The recorded homeowners combined ratio was 89.5; the underlying homeowners combined ratio was 60.1. Homeowners underwriting income was $452 million. Homeowners policies in force were 7.9 million, with new business up 10.2%.

Protection Services revenues were $964 million, up 6.9% from the year-ago quarter, primarily due to Protection Plans and Roadside growth. Adjusted net income for the segment was $64 million. Protection Plans revenue was $631 million, with adjusted net income of $47 million. Roadside revenue was $70 million, up 18.6%, which the company said reflected increased bundling with Allstate-branded auto products and new partnerships. Arity revenue was $76 million. In October, Arity acquired INRIX, Inc., and in November entered a definitive agreement to acquire the remaining ownership of Replica, expected to close before the end of 2026.

Net investment income was $1.2 billion, up $228 million from the year-ago quarter, reflecting higher market-based and performance-based results. Market-based investment income was $887 million; performance-based investment income was $355 million. Net losses on investments and derivatives were $545 million, compared with gains of $252 million a year earlier, primarily the result of higher interest rates. Unrealized net capital losses were $2.6 billion pre-tax at September 30, 2026. Total return on the investment portfolio was negative 2.1% for the third quarter.

Chief Financial Officer Chris Lown said approximately $1.5 billion was returned to shareholders in the third quarter through share repurchases and dividends. As of September 30, $1.3 billion remained under the $4.0 billion share repurchase authorization initiated in February 2026. Adjusted net income return on equity was 39.7% over the last 12 months.