US insurer The Allstate Corporation (Allstate) has reported a 59.3% decrease in its net income for the first quarter of 2020, as the COVID-19 pandemic hit investments and premiums were returned to customer.
Income totalled $513 million in Q1 2020, compared to $1.26 billion for the same period last year, as higher underwriting income was more than offset by net realized capital losses and pension and other post-retirement remeasurement losses.
Looking at revenue, Allstate saw an 8.3% decrease to $462 million, while investment income fell 35.0%.
The company recorded $462 million of realized capital losses in the quarter, versus gains of $662 million last year.
Allstate also provided a payback of more than $600 million to auto insurance customers, recording a $210 million expense, and enhanced its coverage for both auto and home insurance customers.
Additionally, Property-Liability written premium of $8.59 billion increased 3.2%, driven by higher average premiums and policy growth in the Allstate brand.
The recorded combined ratio of 84.9% in the first quarter of 2020 generated underwriting income of $1.35 billion, an increase of $645 million compared to the prior year quarter, primarily due to lower catastrophe losses, increased premiums earned and a decline in auto losses, partially offset by the premium payback.
Catastrophe losses decreased 69.0% to $211 million in Q1, compared with $680 million last year.
“Allstate’s proactive risk and return management served customers and shareholders exceptionally well as the coronavirus pandemic hit our shores. After 89 years in the catastrophe business, we know success is determined by acting decisively, quickly and putting people first,” said Tom Wilson, Chair, President and CEO of The Allstate Corporation.
“Operating and financial results were also strong with more policies in force and excellent returns for shareholders. Revenues were $10.1 billion and Property-Liability insurance premiums earned increased 4.4% over the prior year,” he continued. “Net income was $513 million in the quarter, and adjusted net income was $1.14 billion, or $3.54 per common share, which was 53.9% higher than last year, reflecting lower catastrophe losses.”
