In a recent announcement, the insurer showed that May’s figures weren’t as high as those in April.
Allstate catastrophe losses have reached $982 million for the combined months of April and May. May alone was responsible for estimated losses of $350 million. This will translate to $277 million after tax.
The American insurer had already announced its figures for April, which were an estimated $632 million.
In April, the announcement showed that the Allstate catastrophe losses were a notably higher pre-tax estimated $632 million. That would convert to $499 million after tax. When taking the two months together, the total comes to a pre-tax estimated total of $982 million. That would convert to $766 million after tax.
The figures show a substantially higher estimate than the insurer had experienced for the entire first quarter of this year. The insurer’s data for Q1 2020 showed that there was an estimated catastrophe loss of $211 million for the insurer. That was a substantial 69 percent drop when compared to the same quarter in 2019. That said, the company simultaneously reported an earnings reduction due to challenges associated with the COVID-19 pandemic crisis.
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The Allstate catastrophe losses estimate for May 2020 was made up of eight different events.
According to the insurer, there were eight different events that contributed to the total for the month of May 2020. Those events comprised $349 million of the total (which translates to $273 million after tax). Other contributing factors included unfavorable prior period reserve re-estimates.
Eighty percent of the cost from May arose from four severe weather events. Those included rain, wind and hail events that caused the most damage in the Midwest and in Texas. The majority of totals from events were linked to those four storms.
Closer to the end of the month, the Allstate catastrophe losses represented a harder hit to the company due to the insurer’s ongoing pandemic efforts. It was at that time that the company announced the extension of its Shelter-in-Place Payback strategy, stretching it through June. This was meant to help personal auto insurance policyholders to find their coverage more affordable throughout the pandemic crisis, using rebates and moratoriums on cancellations due to non-payment.