Allstate reports 1.0-point deterioration in combined ratio, 23% drop in Q4 catastrophe losses

The Allstate Corp. has released its financial results for the quarter and year ending December 31, reporting a 23% drop in fourth-quarter catastrophe losses, a 4.8% increase in property-liability insurance premiums and a 7.2% drop in underwriting income, with property-liability premiums of US$28.929 billion in 2014.

For the fourth quarter, Allstate reported Feb. 4 its property-liability combined ratio was 90.0% in 2014, up 1.3 points from 88.7% in 2013. For the full year, the same ratio deteriorated by 1.9 points, from 92% in 2013 to 93.9% last year.

The Northbrook, Ill.-based insurer reported $7.292 billion in property-liability premiums written for the latest quarter, up 4.8% from $6.95 billion during the last quarter of 2013. All figures are in United States dollars.

Allstate’s operations in Canada include Allstate Insurance Company of Canada, Pafco Insurance Company and Pembridge Insurance Company of Canada, based north of Toronto in Markham.

For the entire company, Allstate reported net income available to shareholders of $795 million in Q4 2014, down 1.9% from $810 million in Q4 2013. Consolidated revenues were down 0.4%, from $8.792 billion in Q4 2013 to $8.759 billion in the most recent quarter.

Claims and claims expenses were $4.618 billion in Q4 2014, up 7.8% from $4.283 billion in Q4 2013.Catastrophe loses were $95 million in Q4 2014, down 23% from $117 million in Q4 2013.

Fourth-quarter underwriting income dropped 7.2%, from $794 million in 2013 to $737 million last year.

“An increase in claim frequency in the first two months of the quarter adversely impacted the combined ratio for auto insurance, with the Allstate brand auto combined ratio rising to 97.0,” Allstate stated Feb. 4 of its fourth-quarter results. “This was 1.7 points higher than the prior year. The impact of precipitation in select markets and general economic trends will both be reflected in pricing as necessary to maintain adequate returns.”

For the full year, Allstate reported net income available to shareholders of $2.746 billion on revenues of $35.239 billion in 2014, compared to net income available to shareholders of $2.263 billion on revenues of $34.507 billion in 2013.

Property-liability insurance premiums were $28.929 billion in 2014, up 4.7% from $27.618 billion in 2013. Claims and claims expenses were $19.428 billion in 2014, up 8.5% from $17.911 billion in 2013. Underwriting income dropped 20.1%, from $2.218 billion in 2013 to $1.772 billion last year.

“Underwriting income for 2014 was adversely impacted by a 59.3% increase in catastrophe losses compared with historically low 2013 levels, and resulted in a property-liability combined ratio of 93.9 for 2014, 1.9 points unfavorable to the prior year,” Allstate said of its full year results. “The underlying property-liability combined ratio of 87.2 for 2014 was 0.1 point better than 2013, the result of our approach to managing pricing and underwriting actions on a local basis to keep pace with loss trends and maintain margins.”