Allstate released $876 million of prior-year auto reserves in the third quarter of 2026, 9.1 points of the segment's $9.65 billion of earned premium against 5.0 points a year earlier (Allstate Form 8-K Exhibit 99.1, November 4, 2026). The auto underlying combined ratio rose 3.8 points to 89.8. The recorded ratio moved 1.2 points, to 83.2 from 82.0.
The Form 10-Q, filed the same day, splits the auto release into $802 million on injury coverages and $74 million on other auto reserves. Property-Liability catastrophe losses of $1.65 billion, $1.33 billion of them in homeowners, took the segment combined ratio to 86.6 from 80.1.
Progressive had reported $534 million of third-quarter favorable development three weeks earlier, 2.4 points of earned premium, on a book whose accident-year loss ratio is rising, the pairing the site read in its October filing. Allstate's quarter carries the same two numbers at nearly four times the weight.
Key Takeaways
- Allstate's auto releases nearly doubled year on year: 9.1 points of earned premium, $876 million, against 5.0 points and $480 million in the third quarter of 2025.
- The 89.8 underlying ratio counts 1.6 points of favorable development on first-half 2026 claims; without it the quarter reads 91.4, against 88.4 on the same basis a year earlier.
- Average underlying loss per policy was $1,010, up 2.7%, while annualized average earned premium fell 2.7% to $1,474.
- Homeowners' 18-point swing was almost all weather: catastrophe losses of $1.33 billion cost 30.8 points, while the underlying ratio moved 0.3 points to 60.1.
- Across Property-Liability, 2.4 points of extra releases covered about a third of a 7.1-point rise in catastrophe load, and auto's release alone exceeded the segment total.
The walk from 82.0 to 83.2
Allstate attributes the 1.2-point move in the recorded auto combined ratio to "3.6 points of higher underlying losses and 1.5 points of higher catastrophe losses, partially offset by 4.1 points of more favorable prior year reserve releases" (Allstate, November 2026).
| Allstate Protection auto, three months to September 30 | 2025 | 2026 |
|---|---|---|
| Premiums earned | $9,593M | $9,654M |
| Recorded combined ratio | 82.0 | 83.2 |
| Effect of catastrophe losses (points) | (0.7) | (2.2) |
| Effect of prior-year reserve reestimates, excluding catastrophes (points) | 5.0 | 9.1 |
| Underlying combined ratio | 86.0 | 89.8 |
| Favorable development on current-year claims inside the underlying ratio (points) | 2.4 | 1.6 |
| Underlying ratio before that development | 88.4 | 91.4 |
| Prior-year non-catastrophe release, dollars | $480M | $876M |
| Average underlying loss per policy (incurred pure premium) | $983 | $1,010 |
| Allstate brand average gross written premium | $853 | $811 |
Source: Allstate Form 8-K Exhibit 99.1 and investor supplement for the third quarters of 2025 and 2026; Form 10-Q for the quarter ended September 30, 2026. The "before that development" rows add the disclosed intra-year development back to the underlying ratio.
At 9.1 points of the quarter's earned premium the release is about $878 million; the 10-Q puts the auto total at $876 million (Allstate Form 10-Q, November 2026). A year earlier the figure was $480 million, a 5.0-point benefit the company attributed to favorable severity development in injury and physical damage coverages (Allstate Form 8-K, November 2025). Nine months in, the auto reestimates stand at 8.2 points against 4.0.
The 10-Q also dates the money. About 28% of the injury releases relate to accident year 2025 and about 55% to 2023 and 2024. Jess Merten, president of Property-Liability, confirmed the 9.1 points to analysts (Allstate Q3 2026 earnings call, November 5, 2026).
What the 89.8 still contains
Allstate's underlying combined ratio keeps development on claims from the current calendar year. In the release's words, "the third quarter benefited from 1.6 points of favorable development for claims reported in the first half of 2026." Adding that back puts the current-accident-year ratio at 91.4. Merten confirmed the figure on the call: "91.4 on an adjusted basis is still better than our 95 target."
A year earlier the same credit was larger. The third-quarter 2025 underlying ratio of 86.0 benefited from 2.4 points of favorable development on claims reported in the first two quarters of 2025 (Allstate, November 2025), so the adjusted basis is 88.4. On like-for-like terms the deterioration is 3.0 points, and a smaller intra-year credit accounts for the other 0.8.
Per-policy figures in the investor supplement show where the 3.0 points came from. Average underlying loss, the incurred pure premium per policy, was $1,010, up 2.7% after a 4.7% decline a year earlier. Annualized average earned premium fell 2.7% to $1,474 (Allstate Q3 2026 investor supplement). Allstate brand average gross written premium was $811, down 4.9% from $853.
Chief financial officer Chris Lown tied the lower premium to the shift toward the lower-priced Affordable, Simple, Connected products. New auto applications rose to 2.47 million from 2.33 million. Allstate adjusted rates in 39 locations in the quarter, a 0.4-point effect on auto premium overall (investor supplement), after no auto rate in the first two quarters of 2026 and 0.2 points in the fourth quarter of 2025. Rate at 0.4 points a quarter against loss cost up 2.7% a year sets the direction of the 2026 accident-year pick, whatever the 2023 and 2024 years keep paying back.
Chief executive Tom Wilson, asked whether the releases would continue, said the reserves were set at the level the company believed right: "I would not forecast in your earnings estimate reserve releases in the future."
Homeowners: an 18-point swing that is almost all weather
Homeowners went from a 71.5 combined ratio to 89.5. Nearly the whole move sits in one row of the reconciliation: catastrophe losses of $1.33 billion, 30.8 points of earned premium, against $479 million and 12.3 points a year earlier. Its underlying ratio moved from 59.8 to 60.1. Allstate had flagged the quarter's total in its October 15 catastrophe release: $1.65 billion pre-tax across Property-Liability, $1.30 billion after tax (Allstate, October 2026). September contributed $220 million.
Premium grew into the loss. Earned premium rose 11.5% to $4.33 billion, policies in force 3.3% to 7.9 million, and Allstate brand average gross written premium 4.9% to $2,408. Underwriting income fell to $452 million from $1.11 billion. Prior-year releases added 1.6 points, against 1.0.
Across Property-Liability the catastrophe load rose 7.1 points, to 10.9 from 3.8. Prior-year benefit rose 2.4 points, to 5.1 from 2.7, so releases covered about a third of the weather.
Auto's release also exceeded the segment total. A 5.1-point benefit on $15.09 billion of segment earned premium is roughly $770 million, less than auto's $876 million. Homeowners added about $69 million on 1.6 points of $4.33 billion. The remaining lines, other personal, commercial and run-off, were therefore net adverse by about $175 million. Allstate's release does not break them out.
Releases landing as premium per policy falls
Auto premiums written grew 0.2% to $9.88 billion while policies in force grew 3.4% to 26.2 million, an implied fall of about 3% in written premium per policy. BLS's motor vehicle insurance index fell 5.0% in the twelve months to September 2026 while motor vehicle maintenance and repair rose 5.8% (BLS, October 14, 2026).
Progressive's October 14 filing carried the same shape (Progressive Form 8-K, October 2026). Written premium rose 4% on 6% policy growth, the accident-year loss and LAE ratio rose 2.1 points over nine months, and $1.536 billion of favorable development held the reported combined ratio at 87.5. Chubb's $511 million of third-quarter releases included $379 million from North America Personal, as the site reported last month. Allstate's auto release is the largest of the three as a share of premium, 9.1 points against Progressive's 2.4.
Allstate's 2026 run stands at $838 million in the first quarter, $634 million in the second and $876 million in the third. Nine-month releases total $2.35 billion, $2.07 billion of it on injury coverages (Allstate Form 10-Q, November 2026). Accident year 2025 supplied 28% to 29% of the injury releases in both the quarter and the nine months, so the newest closed year is paying back at a steady rate while the 2026 year is written at lower premium.
Bank of America analyst Josh Shanker put the underlying move to management directly: "It just seems like a pretty high degree of deterioration for such a short period of time." Merten's answer was that the company is "taking rate by state, by market as needed to anticipate what those trends are going to do." In the third quarter that meant 0.4 points.