Tornadoes & severe weather take Allstate’s Q1 cat losses to $462m

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Catastrophe losses suffered during the month of March 2022, largely from tornadoes and severe convective weather affecting Texas and the southeast of the United States, have elevated Allstate’s first-quarter catastrophe losses to $462 million pre-tax.

Allstate logoThat’s well down on the Q1 2021 catastrophe loss burden Allstate suffered through impacts from winter storm Uri, which triggered a significant reinsurance and catastrophe bond recovery for the insurer.

Allstate estimated catastrophe losses from March 2022 of $227 million before tax, or $179 million, after.

The insurer said the March catastrophe losses included six events, primarily tornado and wind-related impacts in Texas and the southeast, coming from the spate of severe thunderstorms and convective weather seen.

Allstate estimated the catastrophe losses at $246 million, but said this was partially offset by favorable reserve reestimates for prior events during March.

It was the first month that Allstate reported its catastrophe losses so far in 2022, as January and February came in below its reporting threshold.

But still, Allstate’s catastrophe losses for the first quarter of 2022 totalled $462 million, pre-tax.

Allstate also said that it has begun reporting quarterly non-catastrophe prior year reserve reestimates, as it now finds inflationary trends are adversely impacting both current and prior reported year incurred severity and loss reserve estimates.

As a result, the company said it is reporting Q1 2022 unfavorable non-catastrophe prior year reserve reestimates totalling roughly $160 million, which it said were primarily driven by both auto physical damage and bodily injury severity.

Allstate has lower-down aggregate catastrophe bond coverage in-force for its new annual risk period, which began in April, so going forwards investors will be watching its catastrophe loss disclosures closely through 2022 and into 2023.

As a reminder, Allstate made $1.37 billion of recoveries under its catastrophe reinsurance arrangements during calendar year 2021, $300 million of which came after a full exhaustion of its Sanders Re II 2019-1 catastrophe bond transaction.

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