Allstate Winces at Cat Losses

Natural disasters continue to plague the property/casualty industry, and Allstate Corp. is the latest carrier to report a difficult quarter as a result. The insurer took a hit in its third quarter, saying natural disasters will cost the company $1.08 billion before taxes, including $215 million in September. The announcement yesterday follows Allstate’s report of a $2 billion in cat losses in its second quarter, resulting in a net loss of $620 million.

Allstate previously estimated cat losses for July and August at $865 million, with $500 million related to Hurricane Irene (Best's News Service, Sept. 15, 2011). The company announced earlier this year that it would update monthly and quarter-to-date estimates for such losses when they exceed $150 million per month.

The second quarter was one of the costliest for cat losses for Allstate since the third quarter of 2005, when the company recorded some $3.06 billion in after-tax losses. In 2005 the entire industry was affected by hurricanes Katrina, Rita, Dennis and Ophelia. The company will report third-quarter results on Oct. 31.

State Farm Group, meanwhile, reports that it made $5 billion in catastrophe claims payments so far this year and said 2011.