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Combined ratio down 1.9 points for Allstate as catastrophe losses drop 47.8%


November 3, 2015   by Canadian Underwriter


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The Allstate Corp. reported Monday a 4.2% increase in property-liability insurance premiums written while catastrophe losses for the third quarter were 47.8% lower this year than in 2014, while third-quarter net income dropped 17% year over year.

Northbrook, Ill.-based Allstate released its financial results for the third quarter, reporting its combined ratio improved 1.9 points, from 95.5% in the three months ending Sept. 30, 2014 to 93.6% in the most recent quarter.

The Allstate Corp. reported a 4.2% increase in Q3 property and liability insurance premiums, from 2014 to 2015

Property-liability premiums written increased 4.2%, from $7.806 billion in Q3 2014 to $8.137 billion in Q3 2015. All figures are in United States dollars.

Allstate’s claims and claims expense ratio increased 1.5 points, from 67.2% in Q3 2014 to 68.7% in the latest quarter.

Property-liability underwriting income was $491 million in Q3 2015, up 3.6% from $474 million during the same period last year.

“Property-liability underwriting income in the third quarter of 2015 included an unfavorable reserve re-estimate of $47 million, primarily due to the annual review of asbestos and environmental exposures in the discontinued lines and coverages segment,” Allstate reported.

Catastrophe losses were $270 million in the latest quarter, down 47.8% from $517 million in Q3 2014.

For the first nine months of the year, catastrophe losses dropped 28%, from $1.89 billion in 2014 to $1.36 billion this year.

Allstate reported there were 22 catastrophe events in the three months ending Sept. 30. Two cost the insurer between $50 and $100 million each, with total claims and claims expenses of $115 million. The other 20 cost less than $50 million each, with total claims and claims expenses of $137 million.

In the nine months ending Sept. 30, Allstate reported a total of 66 catastrophe events, with total losses of $1.36 billion. Of those, two cost between $101 and $250 million each, nine cost between $50 million and $100 million each while the other 55 cost less than $50 million each.

Broken down by product, Allstate reported premiums of $5.154 billion in auto in the latest quarter, compared to $4.89 billion in Q3 2014. Homeowners premiums were $1.795 billion in Q3 2015, up from $1.74 billion in the same period last year. Premiums from other personal lines were $425 million in Q3 2015, up from $418 million in Q3 2014. Commercial lines premiums were up from $120 million in Q3 2014 to $128 million in Q3 2015 while other business lines premiums increased from $138 million in Q3 2014 to $148 million in 2015.

For the nine months ending Sept. 30, Allstate reported property-liability premiums written of $22.625 billion this year, up 4.8% from $21.575 billion in 2014.

The combined ratio was 95.8% during the first nine months of this year, up 0.6 points from 95.2% during the same period in 2014.

The effect of catastrophe losses on the combined ratio was 3.5 points in Q3 2015, 7.1 points in Q3 2014, 7 points in the first nine months of this year and 8.8 points during the first nine months of 2014.

Total revenue increased 1%, from $8.936 billion in Q3 2014 to $9.028 billion in the latest quarter. For the first nine months, total revenue increased slightly, from $26.48 billion in 2014 to $26.962 billion this year.

Allstate’s third-quarter net income dropped 17%, from $750 million in 2014 to $621 million this year. For the first ninem months of the year, net income dropped from $435 million in 2014 to $406.5 million this year.