Property-liability premiums up, cat losses down at Allstate

The Allstate Corp. released Wednesday its financial results for the 2013 calendar year, recording a 13.7-point drop in its fourth-quarter loss ratio, a 4% year-over-year increase in fourth-quarter property-liability premiums earned and a slight drop in net investment income.

In filings with the United States Securities and Exchange Commission, Northbrook, Ill.-based Allstate reported its combined property-liability ratio was 88.7% for the three months ending Dec. 31, 2013, down 13 points from 101.7% in Q4 2012.

For the full year, the combined property-liability ratio was 92.0%, down 3.5 points from 2012.

Fourth-quarter catastrophe losses were $117 million in 2013, down from $1.061 billion in Q4 2012. For the full year, cat losses were down 46.7%, from $2.345 billion in 2012 to $1.251 billion in 2013. All figures are in U.S. currency.

During the last three months of 2012, Allstate had attributed most of its cat losses to Hurricane Sandy, which was downgraded to post-tropical storm status when it made landfall about 200 kilometres south of New York City on Oct. 29 of that year.

In the fourth quarter of 2012, Allstate had reported an underwriting loss of $116 million. In the most recent quarter, Allstate had underwriting income of $794 million.

Of Allstate’s $117 million in cat losses in the most recent quarter, most of those were in the Allstate brand, the company reported Wednesday. Broken down by coverage, Allstate reported auto cat losses of $1 million in Q4 2013 (down from $366 million in Q4 2012) and homeowner losses of $112 million. down from $485 million in Q4 2012.

For the three months ending Dec. 31, 2013, Allstate reported consolidated revenues of $8.792 billion, up 2.9% from $8.547 billion in 2012.

For the full year, consolidated revenues were $34.5 billion, up 3.6% from $33.31 billion in 2012.

In property-liability, Allstate reported premiums earned of $27.618 billion in 2013, up from $26.737 billion in 2012. For the fourth quarter, property-liability premiums earned were $7.014 billion in 2013, up 4% from $6.744 billion in the same period in 2012.

“Esurance, serving the self-directed consumer segment, continued to grow rapidly in the fourth quarter of 2013, with a 23.0% increase in net written premium and 26.7% increase in policies from the fourth quarter of 2012,” Allstate reported. “For the full year, Esurance increased net written premium 27.9% compared to 2012.”

Claims and claims expenses in the fourth quarter were down 15% year over year, from $5.042 billion in 2012 to $4.283 billion in 2013.

“Encompass, which serves consumers who value local advice and a choice of brand, grew net written premium in the fourth quarter of 2013 by 6.1% compared with the same quarter of 2012, and policies rose 6.5% from the prior year quarter,” Allstate reported. “Encompass grew net written premium by 8.4% in 2013 compared with 2012.

In property-liability, Allstate reported in Q4 2013 a loss ratio of 61.1% (down from 74.8% in Q4 2012) and an expense ratio of 27.6% (up from 26.9 % in Q4 2012).

Investment income was $1.026 billion in Q4 2013, down from $1.033 billion in Q4 2012. For the full year, investment income was $3.943 billion in 2013, down from $4.010 billion in 2012.

Net income in 2013 was $2.28 billion, down 1.1% from 2.306 billion in 2012. For the fourth quarter, Allstate reported net income of $821 in 2013, up from $394 million in Q4 2012.