From www.insurancebusinessmag.org, originally posted April 19, 2017, click HERE for the online version of the article.
Two insurance giants have seen hundreds of millions of dollars in catastrophe losses in the first quarter. The sharp spike in the frequency of natural disasters has taken its toll on both Allstate and Travelers – with Allstate seeing more than half a billion dollars in catastrophe losses in March alone.
Allstate today announced estimated catastrophe losses for the month of March of $516 million pre-tax ($335 million after tax), and total estimated catastrophe losses for the first quarter of $781 million pre-tax ($508 million after tax).
Allstate’s catastrophe losses for the first quarter were brought on by 28 separate events at an estimated total cost of $777 million pre-tax, plus unfavorable reserve re-estimates of prior catastrophe losses. Just one event – a hailstorm that hit Texas in March – accounted for over a third of the company’s catastrophe losses for the quarter.
Travelers, meanwhile, saw first-quarter catastrophe costs of $347 million pre-tax, up from $318 million a year earlier, according to a Bloomberg report. The company’s net income for the first quarter dropped to $617 million from $691 million for the first quarter of 2016, the fifth year-over-year decline in six quarters.
Many insurance companies have been pounded by the wave of natural disasters that have hit the country in recent years. During just the first half of 2016, damage from hailstorms accounted for $5.5 billion in insured losses in Texas alone. And last month – also in Texas – a series of tornadoes caused damages expected to total $100 million.