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Allstate reports US$961 million in cat losses in second quarter of 2016


August 5, 2016   by Canadian Underwriter


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Northbrook, Ill.-based Allstate Corporation has reported catastrophe losses of US$961 million in the second quarter of 2016 compared to US$797 million in the same quarter of 2015 and US$1.79 billion in the first six months of the year compared to US$1.09 billion in H1 2015.

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Allstate Corporation said that its Property-Liability combined ratio was 100.8% for the three months ending June 30, compared to 100.1% for Q2 2015. For the first six months of the year, the Property-Liability combined ratio was 99.6%, up from 96.9% in H1 2015.

The effect of catastrophes on the combined ratio was 12.3 in the second quarter of 2016 compared to 10.6 in the second quarter of 2015, and 11.5 in the first six months of 2016 compared to 7.3 in the first six months of 2015.

Total revenues were US$9.16 billion in Q2 2016, compared to US$8.98 billion in Q2 2015 and US$18.04 billion in H1 2016 compared to US$17.93 billion in H1 2015, Allstate added in a statement.

Overall, consolidated net income applicable to common shareholders was US$242 million in Q2 2016, compared to US$326 million in the second quarter of 2015, and US$459 million in the first six months of 2016 compared to US$974 million in the first six months of 2015. For Property-Liability specifically, net income applicable to common shareholders was US$198 million in Q2 2016 (Q2 2015: US$222 million) and US$420 million in H1 2016 (H1 2015: US$760 million), Allstate said in the statement.

“Allstate delivered $242 million of net income, $0.64 per share, despite the impact of severe weather and increased frequency of auto accidents,” said Tom Wilson, chairman and chief executive officer of the Allstate Corporation, in the statement. “Homeowners insurance generated an underwriting profit despite seasonally high second quarter catastrophe losses and a record hail storm in Texas. Initiating an aggressive auto insurance profit improvement plan over a year ago enabled us to maintain underlying margins despite higher auto insurance frequency. The underlying combined ratio was 88.6 for the quarter and 87.9 for the first six months of 2016 in comparison to the full year outlook range between 88 and 90.”

For Allstate Financial, net income was US$116 million in the second quarter of 2016 compared to US$179 million in the second quarter of 2015. For the first six months of the year, net income for Allstate Financial was US$184 million compared to US$362 million in the first six months of 2015.

Looking at Property-Liability specifically, premiums written totalled US$8.05 billion in Q2 2016, an increase of 2.2% from US$7.88 billion in Q2 2015. For H1 2016, premiums written were US$15.57 billion, an increase of 2.5% from US$15.18 in H1 2015. Premiums earned totalled US$7.81 billion in Q2 2016, up 3.5% from US$7.55 billion in Q2 2015. Premiums earned in the first half of the year also increased 3.8% from US$14.98 billion in H1 2015 to US$15.54 billion. Underwriting loss was US$66 million in Q2 2016 (Q2 2015: US$10 million) and underwriting income was US$59 million in H1 2016 compared to US$457 million in H1 2015, Allstate reported.

By segment, auto premiums written totalled US$5.31 billion in Q2 2016, an increase of 3.5% from US$5.12 billion in Q2 2015. For the first six months of the year, auto premiums written increased 3.8% to US$10.63 billion from US$10.24 billion in the first six months of 2015.

Homeowners premiums written totalled US$1.97 billion in Q2 2016, nearly flat (up 0.5%) from US$1.96 billion in the second quarter of 2015. For the first half of the year, homeowners premiums written totalled US$3.48 billion, a 0.6% increase from US$3.46 billion in H1 2015.

Allstate brand other personal lines premiums written totaled US$428 million in the second quarter of 2016, a 0.9% increase from US$424 million in the second quarter of 2015, primarily due to increased condominium insurance, Allstate reported in the statement. Allstate brand other personal lines premiums written totalled US$781 million in the first six months of 2016, comparable to the same period of 2015.

Commercial lines premiums written totalled US$135 million in the second quarter of 2016, a 2.2% decrease from US$138 million in the second quarter of 2015, and US$261 million in the first six months of 2016, a 1.9% decrease from US$266 million in the first six months of 2015. “The decreases in both periods were driven by lower renewals and decreased new business due to profit improvement actions, partially offset by higher average premiums,” Allstate said.

Other business lines premiums written totalled US$183 million in the second quarter of 2016, an 8% decrease from US$199 million in the second quarter of 2015, and US$366 million in the six months of 2016, a 4.4% decrease from US$383 million in the first six months of 2015. The decreases in both periods were primarily due to declines in Allstate Roadside Services and Allstate Dealer Services premiums.