Allstate expects to incur $181 million in pretax catastrophe losses for the month of July.
The loss, which will be $118 million after tax, is driven by 13 events that took place last month. Those events account for $151 million in pretax loss, and the company expects to incur the remaining $30 million in losses from the prior-period adverse reserve development.
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In the first six months of 2017, Allstate saw catastrophe loss of $1.75 billion, down 2.2% year over year, according to a Nasdaq report. Despite the catastrophe losses, Allstate’s shares have seen a steady rise so far this year, outperforming the industry’s gain of 9.6% with a return of 26%.
The industry as a whole has been able to amass large capital reserves lately due to low catastrophe losses. Global insured losses from disasters dropped to $23 billion in the first half of 2017 from $36 billion for the same period in 2016, according to a report by
Swiss Re. Lower claims numbers from natural disasters have put downward pressure on premiums.
“It remains to be seen if weather-related losses over the coming months can shrink the massive capital surplus and change the insurance pricing cycle,” Nasdaq said.
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