Allstate are the latest U.S. insurer to announce massive losses due to the severe weather which hit the U.S. midwest and south during April and May. Being the largest home and auto insurer in the U.S. their losses were always going to be meaningful. The period of severe thunderstorms which spawned record breaking numbers of tornadoes has taken its toll on the catastrophe reserves of many U.S. insurers, leaving them with their catastrophe budgets near exhausted in many cases.
Allstate have announced that they estimate $600m in losses for the month of May from seven catastrophe events and $1.4 billion for April, bringing their Q2 losses to $2 billion so far.
The figures compare to a total loss for Q2 2010 of $636m for Allstate. It’s reported that they have responded to the extreme loss levels by raising their homeowners rates and pulling back on the sale of cover in disaster exposed regions of the U.S., particularly coastal areas.
Industry wide losses for the events of April and May are estimated at somewhere in the region of $7 billion to $12 billion with the figure likely to come in towards the upper end once the final loss tally is made.