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Allstate saw $223m in cat losses in July

18th August 2022 - Author: Pete Carvill

Allstate has said it is expecting catastrophe losses in July of $223m, or $176m after tax.

Allstate logoThe firm said that July catastrophe losses included 12 events, primarily wind and hail, that were geographically widespread, estimated at $233 million, partially offset by favourable reserve reestimates for prior period events.

Mario Rizzo, CFO of the firm, said: “Allstate will continue to implement significant rate actions in the second half of 2022 in response to inflationary increases to auto insurance severities. During the month of July, the Allstate brand implemented rate increases of 8.9% across 6 locations, resulting in total Allstate brand insurance premium impact of 1.0%.”

He added: “We have implemented 64 rate increases averaging approximately 9.0% across 51 locations since the beginning of the year. Allstate brand implemented auto rate increases totalled $240m in the month of July, after implementing $1.5bn in the previous two quarters.”

The firm recently announced a second quarter net loss applicable to common shareholders of $1.04bn, compared to an income of $1.6bn in the prior year quarter. The company noted that the loss was primarily due to lower underlying underwriting income, higher catastrophe losses, equity valuation declines and losses on fixed income sales.

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A comparison with June’s results tells a different story. Allstate said back then that it had seen saw catastrophe losses in June of $356m or $281m, after-tax. June catastrophe losses included 10 events, primarily wind and hail in the Midwest, estimated at $315m, plus unfavourable reserve reestimates for prior period events. Catastrophe losses for the second quarter totalled $1.11bn, pre-tax.

These latest results are roughly in line with the figures Allstate posted for July 2021, when catastrophe losses reached $227m, or $179m after tax. That July saw 18 events rack up $211m in losses, plus unfavourable prior period reserve estimates. In contrast, losses from the prior year period were $145m and driven by hurricane Hanna and two severe wind/hail weather events.

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