The Allstate Corp. said its second quarter results show that its strategy of increasing its market share in property and liability insurance products while also expanding into other protection products is working.
Overall net income was $821 million compared to net income of $678 million in the second quarter of 2018.
Total revenue of $11.14 billion in the second quarter of 2019 increased 10.3% compared to the prior year quarter as property and liability insurance premiums earned increased 6.0%. Service businesses policies that include roadside assistance, SquareTrade mobile device warranties and InfoArmor ID theft protection grew to 89.7 million, and revenues increased 26.6% compared to the second quarter of 2018.
“Allstate’s customer-driven strategy produced excellent results in the second quarter,” said Tom Wilson, chair, president and CEO. He said the strategy of focusing on property-liability products and other business services products is “gaining momentum.”
Excerpts from the second quarter results showed:
Property and liability underwriting income of $367 million was $88 million below the prior year quarter, primarily due to higher catastrophe losses.
Auto insurance profitability continued to benefit from lower accident frequency. Allstate brand auto insurance net written premium grew 5.0% in the quarter of 2019, reflecting a 2.5% increase in policies in force and higher average premium. The recorded combined ratio of 92.8 in the second quarter of 2019 was 0.3 points higher than the prior year quarter.
Allstate brand homeowners insurance net written premium grew 6.5% due to a 5.6% increase in average premiums and 1.6% growth in policies in force. The recorded combined ratio of 104.3 in the second quarter was 6.4 points higher than the second quarter of 2018, primarily driven by elevated catastrophe losses.
Esurance brand policies in force increased 8.4%, resulting in net written premium growth of 9.6%. The recorded combined ratio of 100.6 in the second quarter of 2019 was 1.3 points lower than the prior year quarter.
Encompass brand net written premium increased 1.1% as higher average premiums offset a small decline in policies in force. The recorded combined ratio of 97.2 in the second quarter of 2019 was 0.8 points lower than the prior year quarter,
In the Service Businesses segment, SquareTrade revenue was $170 million in the second quarter of 2019, reflecting policy growth of 39.5 million. Allstate Roadside Services revenue was $73 million in the quarter of 2019. Arity revenue was $25 million, primarily from contracts with affiliates while InfoArmor (acquired in 2018) had revenues of $23 million and an adjusted net loss of $6 million in the quarter related to growth and integration investments.
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