Reinsurance News

Allstate reports March cat losses of $227m

22nd April 2022 - Author: Pete Carvill

Allstate says that it has estimated catastrophe losses for the month of March of $227m or $179m, after-tax.

Allstate logoThe company said that March catastrophe losses included six events, primarily tornado and wind in Texas and the southeast, estimated at $246m, plus favorable reserve reestimates for prior events. Catastrophe losses for the first quarter totaled $462m, pre-tax.

Mario Rizzo, CFO of Allstate, said: “Given the ongoing loss-cost impacts of the current inflationary environment, Allstate has increased the magnitude of auto rate increases we expect to implement throughout 2022. In March, Allstate brand implemented rate increases averaged 9.8% across 15 locations, resulting in total Allstate brand insurance premium impact of 1.4%.”

He added: “National General implemented rate increases averaged 3.8% across 7 locations in the month. In the Allstate brand, we have implemented 53 rate increases averaging approximately 8.2% across 41 locations since the beginning of the fourth quarter 2021. These locations represent approximately 62% of 2021 Allstate brand auto written premiums. The increase to Allstate brand total auto insurance written premiums of approximately 6.5% implemented over this six-month period will be earned throughout this year and into 2023.”

The firm said that inflationary trends continue to adversely impact both current and prior report year incurred severity and loss reserve estimates. As a result, beginning with this month’s release, it said it was further expanding reporting transparency by disclosing quarterly non-catastrophe prior year reserve reestimates (favourable or unfavourable) in the release issued for the final month of each quarter.

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For Q1 2022, unfavourable non-catastrophe prior year reserve reestimates totalled approximately $160m and were primarily driven by both auto physical damage and bodily injury severity.

Prior year reestimates reflect the impact of rapid increases in loss costs since the second quarter of 2021. Allstate said it continued to experience the impact of elevated severity inflation in the current report year, with Allstate brand report year incurred severity on property damage and bodily injury coverages estimated to increase by 11% and 8%, respectively, relative to 2021.

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