Allstate Corp. reported net catastrophe losses of $2.7 billion in the second quarter, resulting in a net loss for the period of $1.4 billion as catastrophe and underwriting losses offset other favorable factors.
President and CEO Tom Wilson said the insurer had 42 catastrophe events from severe weather in the second quarter, and remediated losses for 160,000 customers.
“The auto insurance profit improvement plan is being successfully implemented and we continue to increase homeowners prices in response to higher severity and catastrophes, although price increases and operating efficiency gains were largely offset by increased claim frequency and severity in the quarter,” Wilson said in a statement.
Allstate’s property-liability segment combined ratio for Q2 was 117.6 compared to 107.9 a year ago during the period. The underlying combined ratio improved to 92.9 from 93.4.
Property-liability earned premium in Q2 increased 9.6% compared to the prior year quarter to $11.9 billion, primarily driven by higher average premiums. However, the segment recorded a $2.1 billion underwriting loss in the quarter, up $1.2 billion compared to Q2 2022, on a $1.6 billion increase in catastrophe losses.
Allstate brand implemented auto rate increases in 34 locations in Q2, at an average of 10.0%. National General auto rate increases were implemented in 27 locations in the second quarter at an average of 13.9%. “We expect to continue to pursue additional rate increases in 2023 to improve auto insurance profitability,” Allstate said.
Allstate’s auto segment recorded a combined ratio of 108.3 compared to 107.9 in Q2 2022.
The insurer’s homeowners segment booked a Q2 combined ratio of 145.3 from 107.5 a year ago as catastrophe losses here were about $2.2 billion – an increase of $1.3 billion over the prior year quarter due to “an increased number of wind/hail events and larger losses per event,” Allstate said. The second quarter combined ratio for homeowners was among the highest ever in Allstate’s history, said Mario PIzzo, property-liability president, during a conference call.
Allstate brand homeowners rates went up an average of 12.3% in 20 locations in Q2. National General homeowners rates increased in 10 locations at an average of 23.5%.
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