The Allstate Corp. reported a 26.7% increase in its third quarter net income, primarily due to higher auto insurance underwriting income and net realized capital gains.
Allstate’s third quarter net income able to common shareholders was $1.13 billion, or $3.58 per diluted share, compared to $889 million, or $2.67 per diluted share, reported for the same period in 2019.
The recorded combined ratio of 91.6 in the third quarter of 2020 — which was level with Q3 2019 — generated underwriting income of $753 million, an increase of 2.2% over last year’s third quarter. Underwriting income rose due to a decline in auto losses and higher premiums earned. Underwriting income was partially offset by higher catastrophe losses of $990 million, an increase of 94.1% from $510 million reported during Q3 2019.
Revenues for the quarter were $11.5 billion, an increase of 3.9% from $11.1 billion reported for Q3 2019. This year’s revenues reflected net realized capital gains of $440 million and a 1.9% increase in Property-Liability insurance premiums earned. Partially offsetting was a $48 million reduction in net investment income due to lower fixed income yields.
Allstate reported Property-Liability written premium of $9.40 billion, an increase of 0.9% from the same period last year.
“Allstate delivered excellent returns while adapting to the pandemic and executing our strategy,” said Tom Wilson, chair, president and CEO of The Allstate Corp., in a statement. “We continue to operate virtually, including settlement of most claims, to better serve customers.”
He noted that total policies in force increased 27% over the last 12 months, reflecting strong growth of Allstate Protection Plans and modest growth in Property-Liability policies.
“The Property-Liability underlying combined ratio [of 79.7%] was excellent, reflecting lower frequency of auto accidents as the pandemic reduced miles driven. Investment income was down slightly from the prior year quarter, and the total year-to-date portfolio return was 4.4%,” Wilson continued.
“Net income was $1.1 billion for the quarter despite high catastrophe losses, non-recurring charges for a cost reduction program and the impact of low interest rates on future income levels. The return on equity was 18.9% for the last 12 months,” he said.
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