Allstate Corp.'s 2011 first-quarter profit soared on half as much catastrophe-related losses compared to this time a year ago—and capital gains instead of losses.
Net income during the first quarter was $519 million compared with $120 million for the 2010 first quarter when catastrophe losses were $648 million. Weather-related losses for the first three months of this year were $333 million.
New auto-insurance business increased 12 percent as “marketing programs continue to be successful,” says Thomas J. Wilson, chairman, president and CEO, in a statement. But policies in force declined slightly as the company says it continues to balance profitability and growth. Lower customer renewals offset the increase in new applications issued. Standard auto premiums declined 1 percent.
The combined ratio in auto was 95.1, up 0.7 points from the 2010 first quarter as Allstate says it “continued to address adverse loss-cost trends,” especially in New York and Florida.
In these states, the industry has pushed for strong reform to the states' personal-injury protection, no-fault insurance systems, which the industry says are plagued with fraud. Legislation in the Florida did not make it out of a state House committee.
During a conference call, Wilson says Allstate has put in place pricing, underwriting and claims-handling initiatives in both states to improve profitability.
If the laws change and adjustments need to be made, Allstate will do so, Wilson says, but the company is “not waiting for someone else to fix the profitability there.”
Turning to the homeowners-insurance segment, premiums written increased 3 percent compared with the first quarter last year. A 3.7 percent drop in policies in force offset an increase in average premium of nearly 6 percent, Allstate says.
Rate increases averaging about 10 percent were approved in 12 states in the first quarter.
Net pretax realized capital gains were $96 million for the 2011 first quarter compared with a net loss of $348 million a year ago.
Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader
Your access to unlimited PropertyCasualty360 content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking insurance news and analysis, on-site and via our newsletters and custom alerts
- Weekly Insurance Speak podcast featuring exclusive interviews with industry leaders
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the employee benefits and financial advisory markets on our other ALM sites, BenefitsPRO and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
