Allstate Loses $2 Billion In 2 Months After Tornadoes, Thunderstorms

NEW YORK - Allstate Corp, the largest publicly traded U.S. home and auto insurer, said it lost $2 billion in April and May from severe tornadoes and thunderstorms, nearly equaling its catastrophe losses for all of 2010.

The devastating two-month period, taken as one block, now ranks as one of the worst in Allstate's history, alongside events like the 1994 Northridge earthquake in California and Hurricane Andrew in 1992.

In all of 2010, Allstate's catastrophe losses totaled $2.21 billion.

The company, which reported $1.4 billion in pretax losses for April, said on Thursday it lost an additional $600 million from seven events in May.

Allstate began reporting monthly disaster losses for the first time in April. It had been under pressure from analysts to offer more disclosure on its exposures.

For the industry as a whole, severe weather events in just one week in late May may result in insured losses of $4 billion to $7 billion, according to risk modeling agency AIR Worldwide. The two major U.S. tornado outbreaks in May and April were the costliest in history, the agency said.

Last week Travelers Cos Inc said it had at least $1 billion in catastrophe losses in April and May. It said this would result in a second-quarter operating loss and a slowdown in share buybacks.

(Reporting by Ben Berkowitz in New York and Rachel Chitra in Bangalore; Editing by Joyjeet Das and John Wallace)

Copyright 2011 Thomson Reuters. Click for Restrictions.

Comments

[Keyop]

01:48 PM on 06/19/2011

Pretty easy money for a company that just sits on others money and makes money, they build nothing and do no service but write checks. And like a ponzi scheme, when it all comes due they start freaking like madoff.

[Almondo]

12:29 PM on 06/19/2011

I think it is inappropriate to call claims losses. The reality is that these companies are in the insurance business and the point of people being forced to pay them when damage is not occurring is that they must then pay out when damage occurs. State Farm whined like an abused puppy for years in Florida, even threatening to leave if they did not get their way.

The insurance business is really nothing more than legalized forced gambling against yourself.

[SPacific]

10:31 PM on 06/18/2011

So typical of corporate owned Reuters to come up with a sob story like this one.......What the story conveniently leaves out are the obscene profits that Allstate has been making during the past few years....... Just how did this effect the insurance giant?: "it slowed down their share buyback".......Oh, poor dears!! This is nothing short of big business media "coverage" at its absolute worst.......

[maxfax]

02:35 PM on 06/18/2011

"Allstate Corp, the largest publicly traded U.S. home and auto insurer, said it lost $2 billion " Whine whine whine, the same company that bilked hurricane claimants, and paid millions to lobby Congress, state legislatures, to limit their liability while still collecting exorbitant premiums. They want your money, they just don't want to pay any out. All this complaining, watch, next they you know they'll be seeking "premium increases" from state Department(s) of Insurance. Cry babies.

[Kenz300]

12:50 PM on 06/18/2011

Insurance companies like banks need to have enough cash and liquid reserves to pay claims.

They seem more interested in big pay packages for executives and dividends for stock holders than in preparing foe any risks they might have.

[maxfax]

02:37 PM on 06/18/2011

You forgot the part where they pay millions to lobbyists around the country and inside the Beltway; making certain they can limit paying the insured while all the time continuing to take your premiums and demanding and getting increases year after year.

[Lolie Culley]

09:37 AM on 06/18/2011

Payback time Mr. Warren Buffet.

[Captain Hindsight]

08:39 AM on 06/18/2011

How much in profits did they have over the last 10 years?
They are in business to cover properties for risk of damage. They assume the risk that they will have to pay more than they take in.

[cyoohoos]

06:33 AM on 06/18/2011

If private industry uses global warming to increase premiums, then will Republicans acknowledge it? After all, if it keeps the capitalists from making money, it must be valid?

[lulubelle1956]

05:59 PM on 06/17/2011

Guess they lost the bet. Hope they cannot write off their losses on their taxes. Taxpayers are tired of subsidizing wall street, insurers and banks who gamble and lose.

[cyoohoos]

06:34 AM on 06/18/2011

1) I'm sure they can write off their losses
2) Yes taxpayers are tired of subsidizing businesses
3) Heads they win, tails we lose

[Shaun Patrick ORourke]

03:33 PM on 06/17/2011

I have no sympathy for the insurance companies. They suck this nation dry. They better pay up to everyone who has a current policy. Sons of bitches!

[nobodysgirl]

03:15 PM on 06/17/2011

Boo-hoo, so sorry. You rake in all those premiums and your CEO's take exotic vacations with riduculous obscene salaries and bonuses.

Tough - pay out. That's the way it's supposed to work, isn't that right allstate?

No sympathy.

[liberalandloveit]

12:24 PM on 06/17/2011

Insurance is a Ponzi scheme. Sort of like social security, except social security is honorable.

[american-dolt]

11:33 AM on 06/17/2011

They are only good at accepting money and playing golf.

[Jeanette DeBella Bogue]

08:54 AM on 06/17/2011

And how does that number compare to what they have made in the last fewyears?

[bola47]

08:52 AM on 06/17/2011

have no fear, all the policy holders in other areas who have never ever made a claim will be paying for this through higher premiums.

[jackox]

10:54 AM on 06/17/2011

Yes- that is for sure- and Allstate was one of the companies in New Orleans who did not pay on claims there. They just screwed the people, forcing them to sue. Also, not only will premiums go up-- they will add a $50,000.00 deductible for tornadoes-- All of the companies did this with hurricanes in NOLa. People will no longer be able to afford insurance in these areas. That is what we will continue to see with climate change-