Allstate Profit Up for 2016 Despite Higher Catastrophe Losses

Allstate ended 2016 with a solid profit thanks to premium hikes and tighter underwriting, despite a $853 million jump in catastrophe losses over the previous year.

The property/casualty insurer ended up with more than $2.5 billion in catastrophe losses for 2016, compared to $1.7 billion in 2015, reflecting a jump of nearly 50 percent. But net income was still in the black, coming in at $1.76 billion, or $4.67 per common share, versus $2 billion, or $5.05 billion per common share over the previous year.

For the 2016 fourth quarter, net income was $811 million, or $2.18 per share, versus $460 million, or $1.18 per share in the 2015 fourth quarter.

Allstate Chairman and CEO Tom Wilson noted the Allstate Benefits arm had strong growth, which offset a decline in property liability insurance due to “auto profit improvement actions” including tighter underwriting and higher rates.

Allstate said its property-liability combined ratio was 89.9 for the quarter, compared to 92 in the 2015 fourth quarter. For all of 2016, the combined ratio was 96.1, just slightly higher than the 94.9 recorded for 2015.

Consolidated catastrophe losses for Q4 were at $303 million, down from $358 million in the 2015 fourth quarter.

Here some of Allstate’s earnings highlights: