Northbrook, Ill.-based Allstate Corporation has reported a 2% increase in its property-liability combined ratio, from 90% for the three months ending Dec. 31, 2014 to 92% for the three months ending Dec. 31, 2015. For full-year 2015, the combined ratio was 94.9% at the end of last year, from 93.9% for full-year 2014.
Fourth quarter 2015 revenue of US$8.7 billion was 0.8% below the year-ago quarter, as 4.5% growth in property-liability insurance premium and 5.2% growth in Allstate Financial premium and contract charges were more than offset by an 8.9% decline in net investment income and net realized capital losses of US$250 million.
Allstate’s fourth quarter 2015 net income was US$460 million in Q4 2015, compared to US$795 million in Q4 2015. Operating income was US$625 million in Q4 2015, compared to US$736 million in the same period of 2014, Allstate, which offers auto, home, life and retirement products and services to customers in the United States and Canada, said in a statement earlier this week outlining its financial results.
Property-liability net written premium increased 3.6% in the fourth quarter of 2015 compared to the prior year quarter, resulting from policy growth of 1.3% and higher average premiums per policy. Allstate brand net written premium of US$6.9 billion was 3.9% higher in the fourth quarter of 2015 compared to the fourth quarter of 2014, driven by increases in Allstate brand auto of 5.3% and Allstate brand homeowners of 2.3%, the statement said. [click image below to enlarge]
Allstate brand auto losses remained elevated in the fourth quarter of 2015, reflecting a continuation of the trends experienced throughout 2015. Allstate brand auto had a fourth quarter 2015 recorded combined ratio of 98.6 and an underlying combined ratio of 97.6, which was 0.6 points favourable to the same quarter a year ago, driven by a 2.9 point reduction in the expense ratio. Property damage frequency and paid claim severities increased 7.5% and 4.0%, respectively, compared to the prior year quarter. Bodily injury frequency increased 3.9%, while paid severities decreased 7.0% compared to the same quarter a year ago, the statement said.
The Allstate brand homeowners recorded combined ratio of 71 in Q4 2015 was 7.4 points higher than the prior year quarter, driven by a US$189 million increase in catastrophe losses compared to the fourth quarter of 2014. The underlying combined ratio of 56 was five points lower than the same quarter a year ago, partially driven by decreased fire claim frequency, Allstate reported.
Esurance – which sells auto insurance in Alberta and 43 states, among other offerings – improved the underlying combined ratio to 105.3 in the fourth quarter of 2015, 8.1 points lower than the fourth quarter of 2014. Net written premium growth slowed in Q4 2015 to 5.3% versus the prior year quarter, “given profit improvement actions and reduced advertising,” Allstate said.