Allstate Corp. says it expects $1.08 billion in pretax catastrophe losses for the month of October, primarily due to Superstorm Sandy.
The Northbrook, Ill.-based insurance group says in a statement that while gross losses are higher, the company expects to get about $200 million from reinsurance.
Allstate says Sandy was the largest of five catastrophe events in October, but it did not break down each event.
About 66 percent of the gross catastrophe-loss estimate of around $1.28 billion is attributable to New York, says Allstate. About 20 percent comes from New Jersey, with 14 percent generated by other affected states.
Delving further, auto claims represent about 40 percent of the total gross losses. Nearly 80 percent of that stems from New York, Allstate adds.
The insurer says its nationwide reinsurance agreement excludes New Jersey and Florida, but Allstate has three reinsurance contracts specifically for the Garden State.
Allstate expects Sandy losses "will be contained within the first layer of the nationwide reinsurance agreement," and it predicts "minimal recovery under the New Jersey reinsurance agreements."
The estimate is based on inspections by adjusters and the company's historical loss-development factors.
Sandy made landfall Oct. 29 in southern New Jersey before heading inland and up toward Maine. Most estimates have indicated a majority of insured losses occurred in New Jersey and New York. Catastrophe-modeler Risk Management Solutions has issued the highest Sandy-related insured-loss estimate among the major modelers, at up to $25 billion. AIR Worldwide recently upped its prediction to as much as $22 billion in insured losses, and Eqecat says losses will be up to $20 billion.
Allstate joins a growing group of insurers that have announced losses tied to the event. Cincinnati Financial Corp. expects a $25-$35 million loss to be recorded in the fourth quarter thanks to Sandy-generated claims, while fellow Ohio-based Progressive Corp. says it sustained catastrophe losses of about $55 million in October due to the storm.
Tower Group says it expects an after-tax net loss from Superstorm Sandy of between $55 million and $68 million in the fourth quarter.
Swiss Re, meanwhile, says Sandy could cause the company $900 million in pretax catastrophe losses—but the Zurich-based reinsurer says its estimate may need to be revisited once further damage assessments are made.
Group Chief Underwriting Officer Matthias Weber notes that the storm "led to prolonged power outages, disruption to public transport and damage to other infrastructure that have made recovery efforts very difficult."
"It also complicates the loss-assessment process," he adds. "Our claims estimate, therefore, is subject to a higher than usual degree of uncertainty and may need to be subsequently adjusted."
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