Allstate has released its financial update for June and the second quarter of 2023, detailing the impact of catastrophe losses and rate adjustments on its business.
The insurance giant announced estimated catastrophe losses of $1.01 billion for the month of June, with an after-tax impact of $799 million.
These losses include 18 events estimated at $1.13 billion. Approximately 60% of the losses were related to four wind and hail events, partially offset by favorable reserve reestimates related to prior events.
For the entire second quarter, total catastrophe losses reportedly reached $2.70 billion before taxes.
Aside from the catastrophe losses, Allstate also revealed unfavorable prior year reserve reestimates of $181 million during the second quarter, excluding catastrophes.
Within this amount, around $148 million was linked to the National General brand, primarily influenced by personal auto injury coverages. Additionally, approximately $31 million was related to litigation activity in the state of Florida.
To improve profitability, Allstate said it had implemented auto rate hikes of 11.6% across 12 locations in June. This move had an overall brand premium impact of 2.6%.
Chief financial officer Jess Merten emphasized Allstate’s commitment to enhance profitability through auto and homeowners insurance rate actions.
Allstate brand auto insurance has experienced a cumulative premium impact of 7.5% due to rate increases implemented since the beginning of the year, according to Merten. This is expected to raise annualized written premiums by an approximate total of $1.95 billion.
Meanwhile, the rate increases for Allstate brand homeowners insurance resulted in a premium impact of 7.4%, amounting to an anticipated annualized written premium increase of approximately $754 million.
“Allstate continued to implement significant auto and homeowners insurance rate actions as part of our comprehensive plan to improve profitability,” said Merten. “Beginning with this month’s release, we are expanding reporting transparency by disclosing implemented homeowners insurance rates monthly.”
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