Allstate Corp., has announced that in the two month span between April and May, its catastrophe losses were greater than $2 billion.
According to Allstate, which is the biggest publically traded home and auto insurance company in the United States, the losses within these two months matched that of their losses for the entire 2010 year – which totaled $2.21 billion. This was primarily the result of massive devastation due to severe thunderstorms and tornadoes.
In fact, April and May 2011 have now become one of the worst two-month periods in the history of the company. It ranks in the same category as other devastating events such as the 1992 Hurricane Andrew disaster and the 1994 Northridge California earthquake.
This year, the pretax April losses for Allstate were reported to be $1.4 billion. May then brought another $600 million in losses due to seven more catastrophes. April was the first time that Allstate started reporting its disaster losses every month. This was in response to analysts who had been urging the insurer to provide greater exposure disclosure.
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According to AIR Worldwide, a risk modeling agency, the worst week in late May alone is estimated to have generated catastrophe losses of between $4 billion and $7 billion overall within the insurance industry. They added that the two severe tornado events within the United States in April and May were the most expensive in history.
For April and May, Travelers Companies Inc., another leading insurance company, announced that its losses totaled at least $1 billion and that this would lead to a slowdown in share buybacks due to second-quarter operating losses.