The Allstate Corporation has revealed that it experienced estimated catastrophe losses of $276 million in the month of January 2024. After-tax, these losses amounted to $218 million. The majority of these losses were driven by two events, which accounted for approximately 80% of the total losses. However, these losses were partially offset by favorable reserve reestimates for previous events.
In light of these losses, Allstate continues to pursue rate increases in order to improve profitability in its auto insurance sector and keep up with loss cost trends. Jess Merten, Chief Financial Officer of The Allstate Corporation, stated, "During the month of January, rate increases for Allstate brand auto insurance resulted in a premium impact of 1.4%." This increase is expected to raise annualized written premiums by around $363 million. Additionally, rate increases for Allstate brand homeowners insurance had a premium impact of 0.3%, which is anticipated to raise annualized written premiums by approximately $40 million.
Furthermore, due to implemented rate increases and the rising costs of insured home replacement, Allstate observed a significant increase in homeowners insurance average gross written premium in January 2024 compared to the previous year. Merten noted, "Implemented rate increases and inflation in insured home replacement costs resulted in a 12.1% increase in homeowners insurance average gross written premium in January 2024 compared to the prior year."
Allstate has posted its implemented rate exhibit for both auto and homeowners insurance on its website, www.allstateinvestors.com. This is part of the company's commitment to transparency and providing financial information to its stakeholders. In accordance with this, Allstate routinely posts material announcements and financial information on the aforementioned website.
It is important to note that the information in this news release contains forward-looking statements, which are subject to uncertainty. These statements are made with the understanding that they are based on estimates, assumptions, and plans. However, if these estimates, assumptions, or plans prove to be inaccurate or if other risks and uncertainties arise, the actual results may differ materially from those communicated in the forward-looking statements.
For more information and a comprehensive understanding of the factors that could potentially impact the company's results, individuals are encouraged to review Allstate's filings with the U.S. Securities and Exchange Commission. These filings, including the "Risk Factors" section in the most recent annual report on Form 10-K, provide a detailed analysis of potential risks and uncertainties.
As of now, Allstate has no obligation to update or revise any forward-looking statement, and the forward-looking statements are made as of the date of this news release.
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