Allstate reports $16.5 billion (7.8% increase) in revenues for the first quarter but common shareholders’ net income was down because of elevated catastrophic losses, a press release says. 

Net income dropped from $566 million in Q1 from $1.2 billion reported in Q1 2024, the release says. 

Mario Rizzo, Allstate property-liability president, said during an earnings call that the property-liability business generated $360 million of underwriting income in the quarter for a combined ratio of 97.4, which is 4.4 points above the prior year. 

He said the increase is “primarily due to $3.3 billion in gross catastrophe losses.” 

“Our claims team worked tirelessly to support over 70,000 customers as they recovered from the devastating California wildfires and a series of severe weather events that impacted multiple regions across the country in the first quarter,” Rizzo said. 

He noted that wind and hail events also were above the five and 10-year averages. 

However, the auto combined ratio was 91.3 in the first quarter as average earned premium increases outpaced losses, driven by favorable physical damage loss cost trends, he said. The release states the combined ratio is 4.7 points below Q1 2024. 

Auto rate increases resulted in an annualized premium impact of 1.4% in Q1, the press release states. 

Allstate ended the quarter with $25.1 million auto policies in force, which is down 0.4% compared to last year, he said. 

“Auto new business applications were 31.2% above prior year with strong growth across all three distribution channels,” Rizzo said. “And while relatively evenly distributed across channels, the direct channel generated the most auto new business volume this past quarter. The increase in new business applications was offset by lower retention, resulting in an overall slight decline in auto policies in force.” 

Rizzo said the company is focusing on improving retention trends by increasing value and improving interactions with existing customers. 

Tom Wilson, Allstate CEO, said there’s a trend in insurance companies reducing the rate of increases for auto insurance. 

“I don’t see us moving into an aggressive rate reduction, particularly when you look going forward at the possible impact,” Wilson said.

Images

Photo courtesy of JHVEPhoto/iStock