Allstate Posts Bigger Loss as Catastrophe Claims Rise

August 2, 2023

Insurer Allstate Corp. posted a bigger-than-expected quarterly loss on Tuesday as claims related to higher catastrophic events offset gains from strong investment income.

The insurer’s adjusted second-quarter loss widened to $4.42 per share from 75 cents a year earlier.

Analysts on an average had expected a loss of $4.18 per share, according to Refinitiv data.

Shares of the company was down about 1% in after-hours trading. The stock has declined 16.6% so far this year.

A series of storms and other weather-related events caused billions of dollars in insured losses, damaging property and infrastructure across the United States.

“Severe weather resulted in 42 catastrophe events, where we remediated losses for 160,000 customers,” Allstate CEO Tom Wilson said in a statement.

The insurer’s catastrophe losses in the quarter were $2.7 billion, compared to $1.11 billion a year earlier.

In a bright spot, investment income rose in the quarter as global markets recovered after a year of economic volatility. The benchmark S&P 500 Index .SPX has rebounded, gaining 19.3% this year.

The company’s net investment income for the quarter increased to $610 million from $562 a year ago.

Allstate posted an underlying combined ratio of 92.9%, compared to 93.4% a year earlier. A ratio below 100% means the insurer earned more in premiums than it paid out in claims.

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