When the property-liability premiums written are broken down separately to auto and home insurance, auto premiums written for the quarter increased 9.6% to $7.9 billion and premiums earned increased 9.2% to $7.5 billion – reflecting a 10.4% increase in average premiums and a 1.9% increase in total auto policies in force from 2021.
Homeowners’ premiums written increased 9.4% to $3.3 billion, while premiums earned increased 10.1% to $2.8 billion. This, Allstate noted, reflects a 13.3% increase in Allstate brand average premiums due to inflation in insured home valuations and rate increases, and a 1.4% increase in total homeowners policies in force from last year.
The insurer also noted that for the second half of Q2 2022, it continued to implement “significant” auto insurance rate actions in response to inflationary increases in loss costs. In September, it implemented increases of 16.2% across 8 locations, which led to a total Allstate brand insurance premium impact of 0.9%. Rate increases resulting in a total Allstate brand auto insurance premium impact of 10.8% have been implemented since the beginning of the year, the insurer noted, which have generated increases of $2.6 billion year-to-date – $1.1 billion of which was in the third quarter.
Read more: Allstate unveils plans to further raise auto rates
Allstate said that in the second quarter, property-liability insurance loss costs “continued to increase in both bodily injury and physical damage coverages,” which meant that the estimated cost to settle claims was increased, in turn increasing current and prior year reserves. Unfavorable prior-year reserve re-estimates, excluding catastrophes, totaled $875 million for the third quarter.
Allstate also posted catastrophe losses for the third quarter (net of reinsurance), estimated at $763 million, pre-tax. For the month of September alone, estimated catastrophe losses hit $440 million before tax ($348 million after-tax). It was noted that approximately 80% of the losses suffered that month were attributed to Hurricane Ian.