Despite the impact of the pandemic, the insurance giant reported a $1.2 billion net income.
The Allstate Q2 earnings report has revealed that the company brought in a net income of $1.2 billion and saw a 49 percent increase in profits over the second quarter of 2019.
The insurer saw a $904 million underwriting income, which is a 146 percent year over year rise.
The 146 percent increase in the Allstate Q2 underwriting income brought the company’s income from last year’s second quarter at $537 million to $904 million this year. The insurer’s total revenues rose by 0.5 percent to $11.2 billion, particularly driven by its property-liability premiums, which are making up for the investment income declines it has suffered.
“Allstate’s strong results reflect a resilient strategy and rapid adaptation to the coronavirus pandemic,” said Allstate Corp chairperson, president and CEO Tom Wilson.
The insurer also benefited form a reduction in auto losses due to the pandemic. Fewer cars on the road has reduced the number of claims from crashes. At the same time, the company experienced a rise in premiums earned, which was somewhat offset by the shelter-in-place paybacks made by the company to reflect a reduction in miles driven. Catastrophe losses further offset the auto premiums earnings.
The Allstate Q2 achievements were made even with the 15 percent auto premiums payback.
The insurer started its auto payback at the start of the pandemic lockdowns and extended it through June 30. It has faced criticism by some as many of the major auto insurers in the US kept up their various forms of discounts, rebates and reductions, and some are continuing to do so, while Allstate has brought its assistance to an end amid substantial profits.
Allstate’s insurance payback came to about 8.3 percent of its premiums across all business lines. The company saw an additional 0.5 percent of premiums affected by bad debt expense as a result of the insurer’s special payment plan for billing flexibility during the pandemic. That plan started in the first quarter and has come with a $948 million cost overall. Of that total, $738 million occurred during the second quarter.
Following the Allstate Q2 statement, the insurer said that it did not intend to provide any further customer paybacks. It said it intended to allow “losses to flow into our rating as we always do, and to be more precise on a state-by-state and market-by-market basis versus a broad shelter-in-place payback.”