Allstate Q4 Catastrophe Loss Tempered by Higher Premiums, Reduced Auto Claims

February 8, 2019

The Allstate Corp. lost $312 million in its 2018 fourth quarter, which was attributable to higher catastrophe losses, lower investment income and a pension settlement charge.

Catastrophe losses hit $963 million, versus just under $600 million in Q4 2017.

However, the insurer said that higher premiums earned and reduced auto insurance accident frequency partially offset its Q4 financial hits.

Tom Wilson, Allstate chairman, president and CEO, said that catastrophe hits aside, the insurer has otherwise strong operating results and continues to generate progress on long-term plans.

“Allstate continues to deliver strong operating results while building the future,” Wilson said in prepared remarks. “The strategy to grow market share in personal protection is working with growth in auto and home insurance, workplace benefits and protection plans. We also expanded identity protection by acquiring InfoArmor.”

In the fourth quarter, net income was $1.2 billion. The property liability combined ratio was 97, compared to 91 in the same quarter last year.

Net investment income reached $786 million for Q4, down from $913 million in the 2017 fourth quarter and a nearly 14 percent drop.

The company’s full-year revenues grew to $40.7 billion. Policies in force also increased.

Here are other Q4 and year-end results:

  • Consolidated revenues for the quarter were $9.5 billion, down from $10 billion in Q4 2017.
  • Q4 consolidated property/casualty insurance premiums written surpassed $8.85 billion, versus $8.1 billion in Q4 2017.
  • Net written premiums grew for Allstate and homeowners insurance, as well as its Esurance and Encompass brands.
  • Esurance saw its combined ratio inch higher to 101.8 (1.6 points higher than the previous year) due to increased claims severity, higher catastrophe losses and more advertising spending. Encompass booked a 102 combined ratio in Q4, 4.4 points better than Q4 2017.
  • Allstate’s Q4 property-liability insurance premiums grew by 5.7 percent, and its service business revenue jumped 27 percent. Realized capital losses reduced revenues by $894 million.
  • For the full year, Allstate booked $39.8 billion in consolidated revenues, slightly higher than the $39.4 billion reported in 2017.
  • Allstate’s consolidated P/C insurance premiums written for 2018 came in at just under $35 billion, compared to $32.7 billion in 2017.
  • 2018 consolidated net income was $2.1 billion, down from $3 billion in 2017.
  • The 2018 consolidated property combined ratio was 93.6, on par with 2017.

Source: Allstate

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