Allstate’s Esurance continued its path of slow, steady improvement in the final months of 2015.
The online auto and home insurance provider booked a 107 combined ratio for the 2015 fourth quarter, versus 115.5 in the same period last year. Ideally, that number would be below 100 (the threshold for profitability) but it reflects steady improvement. In the 2015 third quarter, Esurance also produced a 106.5 combined ratio.
Why the improvement? There’s a continued plan in place across to tighten underwriting, advertise less and increase prices. Chief Executive Officer Thomas Wilson explained during the company’s Feb. 4 investor call that Esurance saw slower growth throughout 2015 because of the strategy, which reflects a broader focus toward profit improvement.
The policy of slowing Esurance growth is designed to help it gradually get a handle on its expenses and inch closer to profitability.
For Esurance, that meant policies in force were 1.4 percent higher at the end of 2015 versus the previous year, a deliberate action of slower growth as part of the profit improvement focus. Net written premium growth was 6.6 percent for the year—still a healthy number.
For the quarter, however, net written premium growth slowed to 5.3 percent, versus a sizable 14 percent expansion in Q4 2014.
For more on Allstate’s Q4 results, click here.