Allstate records $307m cat losses for January

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The Allstate Corporation has announced estimated pre-tax catastrophe losses of $307 million ($243 million after-tax) for the month of January 2023.

Allstate logoThe U.S. primary insurer stated that catastrophe losses for the month of January were estimated at $309 million, related to nine events primarily in Texas and California.

According to Allstate, these were partially offset by favourable reserve estimates for prior events.

Jess Merten, Chief Financial Officer of The Allstate Corporation, commented: “Allstate continued to implement significant auto insurance rate actions in response to inflationary increases to loss costs.

“During the month of January, the Allstate brand implemented auto rate increases of 9.9% across 13 locations, resulting in total brand premium impact of 0.7% which are expected to raise annualised written premiums by approximately $182 million.”

This announcement follows Allstate Q4 2023 results where it reported a net loss of $310 million, primarily driven by auto insurance underwriting losses.

Auto insurance written premiums increased 13.3%, driven by significant rate increases in the Allstate brand and growth at National General.

Homeowners insurance written premiums increased by 9.3%, which Allstate noted, primarily reflects inflation in insured home replacement costs, rate increases and policies in force growth.

The underwriting loss reflects increases to current report year auto claim severities, higher catastrophe losses and adverse prior year reserve re-estimates. This was partially offset by higher earned premiums and lower expenses, said Allstate.

Tom Wilson, Chair, President and CEO of The Allstate Corporation, said: “While revenues increased to $13.6 billion, due to 9.5% growth in Property-Liability premiums, higher auto insurance prices were not sufficient to overcome increased loss costs and reserve increases.

“The comprehensive plan to return auto insurance margins to target levels continues to be implemented in 2023 and is expected to further increase average premiums, reduce expenses and lower policy growth.

“Homeowners insurance maintained attractive margins despite higher catastrophe losses from Winter Storm Elliott. The investment portfolio had a total return of 2.5% in the quarter. Allstate Protection Plans had excellent growth from U.S.-based retailers and expansion into furniture and international markets.”

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