Allstate
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The transaction will free up around $1.7bn in deployable capital.
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Independent agency distribution remains incredibly robust, despite the Covid-19 pandemic and the emergence of direct-to-consumer InsurTechs. -
The insurer will take a pre-tax net hit of $567mn from the winter loss, implying roughly $700mn of reinsurance recoveries before the impact of reinstatement premiums.
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State Farm wrote $1.8bn in premium in 2019, representing 18.3% of the market.
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InsurTech won’t knock incumbents off their pedestal just yet, said the Allstate CEO.
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Carriers too cautious on pricing could see retention trade-offs.
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Rate reductions were driven by a reduction in auto accident frequency and expense savings from cost-cutting measures.
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The carrier dropped its combined ratio by almost five points, despite a rise in cat losses and its first premium drop in 2020.
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Reduced accident development led to a prior underestimate in the December frequency benefit.
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The carrier says the divestment will reduce its GAAP reserves by $23bn.
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Karfunkel family shareholders had sold a roughly 40% NatGen stake as part of the $4bn deal.
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The early January close rests on achieving regulatory approvals by the end of December.
