Hailstorms hit Allstate hard in Q1

Hailstorms hit Allstate hard in Q1

The heavy storms that have battered Texas in recent months have taken a heavy toll on Allstate with the US personal lines giant recording first quarter catastrophe losses of $827m pre-tax.

These losses have arisen from 17 events that occurred during the first three months of 2016, although two hail storms that struck the state of Texas in March account for two-third of the quarter’s catastrophe claims. Allstate’s pre-tax catastrophe losses for March alone stand at $638m.

The larger of the two hail storms occurred on March 23 and extended from Texas to Florida and produced violent thunderstorms with hail that measured 2.5” and 65mph winds in Texas, and 1” hail and winds of a similar strength in Florida.

The smaller of the two events occurred during morning rush hour on March 17 and produced hail as large as 2.75” in Texas and 1.75” as it moved east into Louisiana.

Fort Worth and Arlington, both in Texas, were hit with the greatest amount of damage from the storm. Allstate’s exposure to claims has been heaviest in the counties of Collin, Dallas and Tarrant as the company has a greater average market share there than elsewhere in the state.

The hail storms have hit carriers across the state, with the Insurance Council of Texas believing the current catastrophe bill for March stands at some $1.3bn (www.reactionsnet.com Apr 15, 2016). The larger event is thought to be responsible for some $700m of claims, while the earlier storm is believed to have cost insurers an estimated $600m.

While there is no doubt the losses are sizeable, Allstate’s chairman and chief executive, Thomas Wilson, said one of the hail storms is the largest to ever hit his company.

“These storms, one of which ranks as the largest hailstorm to ever impact Allstate, produced unusually heavy damage to both homes and cars given the size of hail and wind speeds,” Wilson said.

“We have deployed over 1,200 claim professionals to assist local Allstate agencies in handling the more than 39,000 claims reported to date to ensure our policyholders can start the recovery and rebuilding process as quickly as possible.”

Allstate enjoyed a 13.7% year on year reduction in the level of catastrophe losses it suffered in 2015, with the carrier facing such claims of $1.72bn last year (www.reactionsnet.com Feb 4, 2016).

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