After tornadoes, Allstate faces losses
NORTHBROOK, Ill. — Allstate Corp. said tornadoes that ripped through the South led to an estimated $1.4 billion in catastrophe losses last month.
The insurer said the losses include 13 natural disasters in the United States and Canada. But the largest losses came from tornadoes in Alabama, Arkansas, Georgia, and Virginia in April. More than 100,000 claims have been reported so far in these areas.
Allstate declined to give its previous monthly record for catastrophe losses. But the last time company’s quarterly catastrophe losses exceeded the April estimate was in the third quarter of 2008, when Hurricanes Ike and Gustav drove up losses to $1.8 billion. Quarterly catastrophe losses are typically far lower, however. In the first three months of this year, catastrophe losses totaled $333 million.
Chief executive Tom Wilson has said he believes there have been permanent changes in weather patterns, with a growing number of hurricanes, floods, and hailstorms. As a result, the company has been pursuing rate increases in several states.
Allstate also said it plans to announce monthly catastrophe losses when they are expected to top $150 million. Over the last decade, the company said that level of loss has occurred about one-third of the time.
Citi analyst Keith Walsh lowered his estimate for Allstate’s second quarter to a loss of 95 cents per share, compared with his previous forecast for a profit of 73 cents per share.