Analysts at BMO Capital Markets have estimated that insurer Allstate Corporation will see Q2 2024 catastrophe losses of around $2.65 billion, of which $2.15 billion is made up from May to June.
If you recall, the US primary insurer disclosed in May that its estimated catastrophe losses for April amounted to $494 million.
According to Allstate, the losses in April 2024 resulted from 11 events valued at $491 million, with approximately 80% of these losses attributed to four wind, hail, or tornado events. Combined with BMO’s anticipated figure for May to June of $2.15 billion, Q2 2024 catastrophe losses would amount to somewhere around $2.65 billion, as the analysts observed.
In Q2 of 2023, Allstate reported a net loss applicable to common shareholders of $1.4 billion, chiefly driven by increased underwriting losses due to a massive catastrophe hit, which totalled $2.7 billion for the quarter.
For Q2 of 2024, BMO’s analysts have thus estimated a catastrophe loss ratio of 20.0% vs. 22.6% in Q2 of 2023.
According to analysts, Allstate will officially announce its May cat losses tomorrow, before the market opens.
“Similarly, our catastrophe loss ratio estimate for Progressive is an elevated 6.5% in Q2 of 2024, but lower than its 7.1% ratio in Q2 of 2023,” BMO’s analysts added.
The Property and auto-focused insurance group, Progressive, reported significant, net catastrophe losses of $722.1 million for May, leading the firm to record a reinsurance recoverable of $95.1 million in its property segment under its per occurrence reinsurance arrangements.
“Allstate’s quarterly catastrophe loss ratios since 2016 have exhibited >70% correlation with Progressive’s for both the Home and Auto segments. We also note that Allstate is overweight in Texas for its Home business, where we estimate (and Progressive cited) material severe weather losses occurred in May,” BMO’s analysts added.
