Allstate reports that it has performed well during the first quarter of 2014
Allstate, one of the largest insurance companies in the U.S., has reported promising results from the past quarter. The company had expected the last quarter to be somewhat grim in terms of profits, but Allstate has performed quite well in light of several problematic issues that have emerged throughout the U.S. over the past quarter. The company’s property and auto insurance business segments were particularly successful despite a relatively dubious market.
Insurer’s premiums grew by 4% in the first quarter, reaching $7.1 million
Allstate reports that premiums earned through its property-liability division grew by 4%, reaching $7.1 billion. Higher premiums are the result of catastrophes that have lead to insured losses for Allstate. The company has been raising rates for homeowners insurance coverage in order to offset the financial impact of these catastrophes. Natural disasters have also caused losses in the auto insurance sector, but these losses were more modest than what was seen in the property sector.
Unexpected natural disasters throughout the US are leading to higher insured losses for many companies
During the first quarter of this year, the U.S. had fallen victim to numerous natural disasters that were particularly uncommon for that time of year. Severe storms and outbreaks of tornadoes caused significant damage in many parts of the country, the financial impact of which was also felt by the insurance industry. Much of the damage caused was covered by insurers like Allstate, but some of these companies have managed to pull out ahead of the losses they sustained during the first quarter.
Insurers are raising rates on property and vehicle protection
Natural disasters in the past have caused many companies in the insurance industry to raise rates on property protection and, in some cases, auto insurance coverage. Insurers have been raising rates in order to fortify themselves from the losses associated with natural disaster while also recover from the losses they sustained in the past. Given the unusual frequency at which natural disasters are occurring in some parts of the country, many insurers believe that their exposure to risk is increasing and that higher premiums are needed to offset this risk.