Allstate Q1 Profit Falls 7.4%; Home, Auto Policy Count Decline Slows

Nearly $360 million of first-quarter catastrophe losses drove a 7.4 percent decrease in net income for Allstate Corp.

The Northbrook, Ill.-based insurer posted first-quarter net income for $709 million compared to $766 million a year ago during the same time.

Catastrophe losses during the first three months were $359 million—about $100 million more than the same quarter in 2012.

The corporation’s property-liability segment booked net income of $616 million compared to $695 million a year ago during the first quarter. Consequently, the property-liability first-quarter combined ratio increased 1.1 points to 93.2. Net written premiums here increased 2.5 percent to $6.6 billion, Allstate says.

Allstate has been raising rates and reducing exposure over the last several years. These actions continued to reduce policy count during the first quarter in auto and home insurance, but at a slower rate, Allstate says.

The company says rate increases and a decline in frequency offset some pressure from severities in the insurer’s auto business.

Esurance, Allstate’s direct auto writer, experienced policy growth of 36.4 percent in the first quarter. Net premiums written grew 30.5 percent during the same time, when compared to 2012’s first three months.

The first-quarter combined ratio at Esurance was an unprofitable 116.7 as Allstate continues to invest in marketing the direct auto insurer.

In homeowners, a slight increase in frequency was offset by rate increases and a drop in severity, Allstate says. The segment recorded a combined ratio of 85.1, which included 18.7 points of catastrophe losses.