Allstate Corp. says it expects about $260 million in pre-tax catastrophe losses for the 2012 first quarter. The bulk of the loss was in March, says the Northbrook, Ill.—based insurer, estimating $190 million in pretax catastrophe losses during the last month of the first quarter.
Tornadoes have dominated the headlines and caused much of the insured catastrophe losses in the first quarter. March saw significant tornado events in Michigan, Indiana, and Kentucky.
Grouping the three states together, Allstate is the third-largest writer of homeowners' multi-peril and the third-largest writer of private passenger auto insurance, according to SNL Financial.
"Losses from 15 events during the first quarter actually totaled $420 million, which was offset by favorable reserve development on prior-year catastrophe losses," Allstate says.
Allstate Corp. ended 2011 with a fourth-quarter net income increase of $428 million to $724 million but net income for the year dropped 15 percent to $788 million.
The insurer used favorable reserve re-estimates to bring 2011 fourth-quarter catastrophe losses to $66 million. Allstate says it incurred $216 million in losses from 19 events during the fourth quarter.
The company posted a combined ratio of 103.4 for 2011.
State Auto, CinFin Reported Loss
According to State Auto Financial Corp., results for the first quarter will include pre-tax catastrophe losses of between $19 million and $21 million.
The Columbus, Ohio-based super-regional holding company says 85 percent of the losses came from Kentucky, Indiana, and Tennessee and are primarily related to the early-March tornadoes, as well as wind and hail in the southern United States that moved into the Ohio Valley. State Auto is scheduled to release official results for the first quarter on May 3.
Last year, State Auto turned to the reinsurance market for a homeowners' quota-share treaty to deal with historic loss trends, because price increases of 30 percent over the last three years haven't helped.
State Auto's group of insurance companies turned in a combined ratio of 116.3 in 2011 while posting a net loss of $146.8 million on more than $230 million in catastrophe losses.
Cincinnati Financial Corp. also shared first-quarter cat loss estimates. The company expects pre-tax catastrophe losses from its group of insurance companies of between $85 million and $95 million—mostly from two storms that happened in the Midwest and Southeast in late February and early March.
These losses will likely add about 10.5 to 11.5 points to the quarterly combined ratio, expected to be between 98 and 101, Cincinnati Financial adds.
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