Allstate Expects Q3 Net Loss Up to $725M; Ian Caused $366M Net Loss

Allstate Corp said it expects to report a third quarter net loss of of between $675 million and $725 million with pre-tax catastrophe losses, net of reinsurance, of $763 million.

Catastrophe losses net of reinsurance for September were an estimated $440 million, the insurer said, with about 80% of losses related to late-September’s Hurricane Ian. For Q3, cat losses are about $763 million, pre tax.

Diving deeper into losses from one of the costliest storms in U.S. history, Allstate said estimated gross catastrophe losses from Ian, without National Flood Insurance Program losses, are $671 million – reduced about $305 million by reinsurance recoveries, for a net loss of $366 million.

Allstate holds a 2.6% share of the homeowners insurance market in Florida. About 25% of net losses will be attributed to property lines and about 75% to auto insurance, the insurer said.

The combined ratio for Allstate’s auto segment is expected to be 117.4 for the third quarter as it continued to implement rate hikes. During September, Allstate increased auto rates 16.2% in 8 locations. Rate increases this year have resulted in a premium impact of 10.8%.

Unfavorable prior-year reserves totaled $875 million in the third quarter, excluding catastrophes. Adverse reserve development was $643 million in Q3, primarily from bodily injury coverages due to medical inflation, complex treatment, accident severity, and litigation, Allstate said.

Allstate will release results for the third quarter on Nov. 2.

Reporting its hurricane loss estimates last week, another personal lines giant, Progressive, saw a greater gross loss impact—nearly $2.0 billion. For Progressive, reinsurance cessions were more than 60% of the total, bringing Progressive’s net Ian loss total to $785 million.