Allstate
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Any faster-than-anticipated re-opening could have a negative impact on loss cost trends. -
Allstate will keep the brand going while putting advertising dollars behind its core direct business.
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Net investment income surged more than threefold to $673mn.
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Reinsurance recoveries and subrogation payouts helped to minimize retained cat losses to $466mn, post-tax.
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The next few years could prove to be more active in consolidation than normal for underwriters.
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On a forward basis, frequency estimates could look high with base figures in 2020 being significantly impacted by initial lockdown measures.
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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.
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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.
