Allstate Announces September and Third Quarter 2024 Catastrophe Losses, Run-off Reserve Review and Third Quarter 2024 Implemented Rates

Rhea-AI Summary

Allstate (NYSE: ALL) reported estimated catastrophe losses of $889 million ($702 million after-tax) for September 2024, including $630 million pre-tax related to Hurricane Helene. The third quarter saw total catastrophe losses of $1.70 billion ($1.35 billion after-tax), while year-to-date losses through September reached $4.55 billion ($3.60 billion after-tax).

The company's annual run-off property-liability reserve review resulted in unfavorable reserve reestimates of $58 million ($46 million after-tax). Allstate brand auto insurance rate increases led to a premium impact of 2.9% in Q3 and 6.3% year-to-date, including rate hikes approved in New York, New Jersey, and Texas. Updated rate information for auto and homeowners insurance is available on the Allstate investor website.

Positive

• Allstate implemented auto insurance rate increases, with a 2.9% premium impact in Q3 and 6.3% year-to-date
• Rate increases were approved in key markets: New York, New Jersey, and Texas

Negative

• Estimated catastrophe losses of $889 million for September 2024
• Total catastrophe losses of $1.70 billion for Q3 2024
• Year-to-date catastrophe losses of $4.55 billion through September
• Unfavorable reserve reestimates of $58 million from annual run-off property-liability reserve review

Insights

Insurance Actuary

The catastrophe losses reported by Allstate for September and Q3 2024 are significant, with $889 million for September alone and $1.70 billion for the quarter. Hurricane Helene's impact of $630 million is particularly noteworthy. These losses will substantially affect the company's profitability for the period.

The annual run-off property-liability reserve review resulting in $58 million unfavorable reserve reestimates suggests potential underestimation of past claims, which could impact future financial planning. On a positive note, the implemented rate increases for Allstate brand auto insurance, with a 2.9% premium impact in Q3 and 6.3% year-to-date, should help offset some of the catastrophe losses and improve future profitability. The approval of rate increases in key states like New York, New Jersey and Texas is particularly important for revenue growth.

Overall, while the catastrophe losses are concerning, the proactive rate adjustments demonstrate Allstate's efforts to maintain financial stability in a challenging environment. Investors should monitor how these factors balance out in the upcoming earnings report.

Financial Analyst

Allstate's financial performance in Q3 2024 is significantly impacted by catastrophe losses, which will likely lead to a substantial hit to earnings. The $1.70 billion in catastrophe losses for the quarter represents a major expense that could potentially erase profits for the period. Year-to-date catastrophe losses of $4.55 billion indicate a challenging year for the insurer.

However, the company's strategy to implement rate increases is a positive sign. The 2.9% premium impact in Q3 and 6.3% year-to-date for auto insurance rates should help improve underwriting margins over time. The approval of rate increases in major markets like New York, New Jersey and Texas is particularly beneficial for long-term revenue growth and profitability.

The $58 million unfavorable reserve reestimate, while not massive relative to the catastrophe losses, does suggest some potential underestimation of liabilities. Investors should pay close attention to how this might affect future reserve adequacy and financial stability. Overall, while the short-term outlook is challenging due to catastrophe losses, Allstate's pricing actions indicate a proactive approach to addressing profitability concerns.

NORTHBROOK, Ill.--(BUSINESS WIRE)-- The Allstate Corporation (NYSE: ALL) today announced estimated catastrophe losses for the month of September of $889 million or $702 million, after-tax, including $630 million, pre-tax, related to Hurricane Helene. Total catastrophe losses for the third quarter were $1.70 billion or $1.35 billion, after-tax, and total catastrophe losses for September year-to-date were $4.55 billion or $3.60 billion, after-tax.

During the third quarter of 2024, the Company performed its annual run-off property-liability reserve review, which resulted in unfavorable reserve reestimates totaling $58 million or $46 million, after-tax.

Rate increases for Allstate brand auto insurance resulted in a premium impact for rates implemented of 2.9% in third quarter and 6.3% year-to-date, which includes rate increases approved by the Departments of Insurance in New York, New Jersey and Texas this quarter. Our implemented rate exhibit for auto and homeowners insurance has been posted on www.allstateinvestors.com.

Financial information, including material announcements about The Allstate Corporation, is routinely posted on www.allstateinvestors.com.

Forward-Looking Statements

This news release contains “forward-looking statements” that anticipate results based on our estimates, assumptions and plans that are subject to uncertainty. These statements are made subject to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements do not relate strictly to historical or current facts and may be identified by their use of words like “plans,” “seeks,” “expects,” “will,” “should,” “anticipates,” “estimates,” “intends,” “believes,” “likely,” “targets” and other words with similar meanings. We believe these statements are based on reasonable estimates, assumptions and plans. However, if the estimates, assumptions or plans underlying the forward-looking statements prove inaccurate or if other risks or uncertainties arise, actual results could differ materially from those communicated in these forward-looking statements. Factors that could cause actual results to differ materially from those expressed in, or implied by, the forward-looking statements may be found in our filings with the U.S. Securities and Exchange Commission, including the “Risk Factors” section in our most recent annual report on Form 10-K. Forward-looking statements are as of the date on which they are made, and we assume no obligation to update or revise any forward-looking statement.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241017478332/en/

Nick Nottoli

Media Relations

(847) 402-5600

Allister Gobin

Investor Relations

(847) 402-2800

Source: Allstate Corporation

FAQ

What were Allstate's (ALL) catastrophe losses for September 2024?

Allstate reported estimated catastrophe losses of $889 million ($702 million after-tax) for September 2024, with $630 million pre-tax related to Hurricane Helene.

How much did Allstate (ALL) lose from catastrophes in Q3 2024?

Allstate's total catastrophe losses for the third quarter of 2024 were $1.70 billion ($1.35 billion after-tax).

What was the impact of Allstate's (ALL) auto insurance rate increases in Q3 2024?

Allstate brand auto insurance rate increases resulted in a premium impact of 2.9% in the third quarter of 2024 and 6.3% year-to-date.

Which states approved Allstate's (ALL) auto insurance rate increases in Q3 2024?

Allstate received approval for auto insurance rate increases from the Departments of Insurance in New York, New Jersey, and Texas during the third quarter of 2024.