There were no April Showers or May Flowers for Allstate Corp. this year. Rather the two spring months produced $340 million in catastrophe losses for the direct writer, whose announcement yesterday triggered a 7 percent reduction in the company’s stock value.
The estimated losses were in addition to severe losses during the first quarter. For the first five months of this year, Allstate will pay out an estimated $720 million in catastrophe coverage. For all of 1999, Allstate paid out only $780 million in storm-related claims.
Allstate has been hit especially hard in this area, paying out a much larger percentage of claims than its market share. During the first quarter Allstate paid out 22 percent of the catastrophe claims, though its market share was closer to 13 percent.
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