Insurance firm
Allstate had estimated April’s catastrophe losses in Texas to be around $633 million, with one hail storm event responsible for causing more than half of the total.
In the first quarter of the year, the insurer posted catastrophe losses amounting to $827 million.
According to
artemis.bm, the insurer’s estimate combined the catastrophe losses recorded from eight separate weather events. Altogether, the severe weather events cost Allstate $660 million, pre-tax. After tax, the total becomes $411 million, but this was partly offset by $27 million of favorable reserve developments in March.
One particularly devastating hail storm event that occurred from April 10 to 12 caused more than half of Allstate’s catastrophe losses for the month.
Allstate’s high catastrophe losses suggests that other insurers operating in the region will likely see their losses for April similarly exceed their expectations.
It is also believed that primary insurers’ reinsurance retentions would have taken a hit as a result of the losses. Some claims could even trickle down to reinsurers and any collateralized reinsurance or ILS funds with exposure.
With Allstate’s size and capital, the insurer retains a considerable portion of its catastrophe losses. The insurer’s reinsurance arrangements could potentially insure that Allstate is not too adversely affected by its catastrophe losses.
