As positive as the insurance news is for property and casualty, life entities are still watch rated.
Fitch Ratings has affirmed the Insurer Financial Strength (IFS) A+ (strong) status of the core property and casualty insurance subsidiaries at Allstate Corporation.
This is positive insurance news for the company that has faced massive natural disaster losses.
Overall, the Rating Outlooks issued for the company are Stable. That said, at the same time that the insurance news was positive for Allstate Corporation P/C, Fitch maintained the Negative Watch on Allstate Life Insurance Company (AHLIC). Similarly, the Allstate Life Insurance Company of NY (ALICNY) received an Evolving Watch rating from Fitch.
The P/C subsidiary ratings affirmation is a solid reflection of the insurer’s favorable business profile, as well as its experience and skill in underwriting, not to mention its substantial operating scale. Also factored in was the company’s hefty risk-based capital position and its powerful financial performance, having consistently maintained favorable underwriting margins and operating returns. These were offset by risky investment asset allocations that were higher than its peers.
Many are looking to predictions for the future of the company following its National General acquisition.
Allstate recently completed its National General Holdings Corp. acquisition. That property liability and accident and health product provider was unrated by Fitch. Its products are sold through independent agents. Should Allstate successfully combine with National General’s underwriting strength, Fitch’s view of the insurer’s business profile will improve, as will its view of the insurer’s capacity to maintain or improve on its already solid financial performance.
Fitch has based its ALIC and ALICNY subsidiary ratings on their standalone profiles and on the “Limited Importance” strategic importance after the insurance news that Allstate had reached a deal for the sale of ALIC and is pursuing opportunities for stepping out of ALICNY’s business.
The Allstate corporation is among the most powerful major property and casualty insurers in the country. Its insurance news history of stability and positive underwriting margins. The company’s financial performance last year was very strong. Moreover, the auto results for this year are expected to be favorable due to ongoing reduced claims frequency due to the impact of the pandemic.