Allstate added auto and homeowners policies across every distribution channel in the third quarter of 2026, posting new business growth of 6.3% in auto and 10.2% in homeowners. The auto underlying combined ratio climbed 3.8 points year over year to reach 89.8 as it did.
The underlying combined ratio strips out catastrophes and reserve development to show the pure loss cost picture. At 89.8, it still sits inside a profitable range against Allstate’s mid-90s recorded combined ratio target. But it has also worsened sequentially from Q2’s 87.6.
Allstate is growing its auto book partly by offering lower average premiums through its ‘Affordable, Simple, Connected’ (ASC) product, in a market where underlying loss costs have not stopped climbing.
Auto written premiums grew just 0.2% in Q3 despite 3.4% policy count growth, because lower average premiums in the ASC product largely offset the volume gain. Allstate has been reducing rates on the ASC product to drive growth and market share after two years of significant rate increases, but it means the carrier is writing more exposure at lower premium per policy at the same time as the underlying loss ratio is rising.
The 10-Q confirms that Q3 2026 favorable auto reserve releases of $876 million, comprising $802 million in injury coverages and $74 million in other auto reserves, kept the recorded auto combined ratio at 83.2. Those releases reflect better-than-expected prior-period loss outcomes. But they do not appear in the underlying ratio, which is why the two numbers tell different stories about the same book of business.
Agents placing personal auto and homeowners business with Allstate are dealing with a materially different carrier than three years ago. Independent agents accounted for 28% of Allstate auto new business applications in Q2 2026, up from 21% in Q2 2023. Total auto new business volume has also risen 58.8% over that period.
The product enabling that shift is Custom360, Allstate’s middle-market standard and preferred auto and homeowners product for the independent agent channel. The product is now available in 41 states for auto and 42 for homeowners, up from 36 states at year-end 2025.
By Q3, the ASC auto product was available in 46 states and ASC homeowners in 42, while Custom360 continues to absorb mid-market business that agents historically placed elsewhere. For agents who have not actively worked with Allstate on personal lines, the carrier’s distribution footprint looks different now than it did during the hard market years, when growth was deprioritized in favor of pricing recovery.
The underlying combined ratio of 60.1 in Q3, almost unchanged from 59.8 a year ago, reflects an exceptionally profitable book in normal conditions. The recorded combined ratio of 89.5 reflects $1.33 billion in catastrophe losses in Q3, up from $479 million in the same quarter of 2025. Those losses, primarily storms, pushed underwriting income down to $452 million from $1.1 billion a year ago.
Allstate filed in September 2026 to resume writing new homeowners policies in California for the first time since 2022, tied to a 1.4% average rate increase under the state’s Sustainable Insurance Strategy. Agents placing California homeowners business now have one of the country’s largest carriers filing to re-enter a market that had been shrinking for four years.
Net income of $2.1 billion compared to $3.7 billion in Q3 2025 reflects the catastrophe loss increase and the absence of a $723 million pre-tax gain on the group health business sale that inflated the prior year. Adjusted net income, which excludes investment gains and losses, was $2.5 billion versus $3 billion. Nine-month adjusted net income is $7.6 billion, up 38.1% from $5.5 billion a year ago, with the nine-month property-liability recorded combined ratio of 85.1 representing a meaningful improvement from 89.4 in the same period of 2025.
Net investment income rose $228 million year-over-year to $1.18 billion in Q3, supported by higher performance-based income from private equity. Total policies in force across the company reached 217.6 million, up 3.3%.
