Allstate hit with big catastrophe losses

The insurance giant expects to incur millions in catastrophe losses for the month of July

Allstate hit with big catastrophe losses

Insurance News

By Ryan Smith

Allstate expects to incur $181 million in pretax catastrophe losses for the month of July.

The loss, which will be $118 million after tax, is driven by 13 events that took place last month. Those events account for $151 million in pretax loss, and the company expects to incur the remaining $30 million in losses from the prior-period adverse reserve development.

In the first six months of 2017, Allstate saw catastrophe loss of $1.75 billion, down 2.2% year over year, according to a Nasdaq report. Despite the catastrophe losses, Allstate’s shares have seen a steady rise so far this year, outperforming the industry’s gain of 9.6% with a return of 26%.

The industry as a whole has been able to amass large capital reserves lately due to low catastrophe losses. Global insured losses from disasters dropped to $23 billion in the first half of 2017 from $36 billion for the same period in 2016, according to a report by Swiss Re. Lower claims numbers from natural disasters have put downward pressure on premiums.

“It remains to be seen if weather-related losses over the coming months can shrink the massive capital surplus and change the insurance pricing cycle,” Nasdaq said.

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