Allstate warned that catastrophe losses stemming from this fall’s California wildfires and a pension settlement will do significant damage to its 2018 fourth quarter financial results.
The property-casualty insurer said it will likely deal with $685 million in pre-tax catastrophe losses, or $541 million after-tax, for November 2018. That came from six events costing an estimated $679 million, pre-tax, or $536 million after-tax, as well as unfavorable reserve re-estimates of previously reported catastrophe losses.
In October, Allstate disclosed $202 million in pretax catastrophe losses, or $160 million, after tax.
Allstate, in its November loss disclosure, noted that the fall’s California wildfires (Camp and Wollsey) let to major losses of life and property, and it has already made more than $1.2 billion of gross insurance payments stemming from the disasters.
Allstate said it lost $670 million pre-tax, or $529 million after-tax, in November due just to the Camp and Woolsey fires, a result that reflects the impact of reinsurance recoveries and reinstatement premiums.
Separately, Allstate said it is dealing with costs stemming from pension settlement losses. In the third quarter, it concluded that benefit payments would lead to a pension settlement loss of $61 million pre-tax. Allstate said it additionally expects to record an additional pension settlement loss, based on current market conditions, of approximately $100 million to $125 million, pre-tax, in the 2018 fourth quarter, within the Corporate and Other segment.