The impact of hurricane Michael in the Florida Panhandle counties and neighbouring states has driven around 78% of U.S. primary insurance giant Allstate’s $202 million of October catastrophe losses.
The insurer said today that its $202 million October catastrophe loss toll was driven by 8 events across the month, as well as unfavourable reserve re-estimates on prior month cat loss events.
The estimated cost, pre-tax, of the 8 catastrophe events that hit Allstate in October was $174 million.
Hurricane Michael is estimated to have driven 78%, or $136 million of these losses for Allstate, before tax.
The rest of the $202 million, so $28 million of catastrophe impacts, was driven by deterioration related to previously reported catastrophe loss events for the insurer.
The $202 million October impact from catastrophes is reduced to $160 million after tax. Allstate typically reports its catastrophe losses after any reinsurance recoveries have been taken into account, although it’s always hard to tell how significant, or otherwise, they could be.
Reinsurance may come more into play for the fourth-quarter as a whole for Allstate it seems, as analysts have forecast that the insurer could take anywhere around $400 million to as much as $600 million of pre-tax and before reinsurance losses from the ongoing California wildfires.
While that’s unlikely to result in a loss for the fourth-quarter for Allstate, it will signficantly erode its profits for the period and the insurer would benefit from reinsurance support on that event it appears.
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