Allstate said unfavorable non-catastrophe prior-year reserve re-estimates were approximately $160 million for first-quarter 2022, primarily driven by auto physical damage and bodily injury severity.
These re-estimates “reflect the impact of rapid increases in loss costs since the second quarter of 2021.” The insurer noted that, due to “the impact of elevated severity inflation in the current report year,” incurred severity is estimated to increase 11 percent on property damage and 8 percent on bodily injury, relative to 2021.
“Given the ongoing loss-cost impacts of the current inflationary environment, Allstate has increased the magnitude of auto rate increases we expect to implement throughout 2022,” said Mario Rizzo, chief financial officer of The Allstate Corporation, in a statement.
She said that Allstate increased auto rates by 9.8 percent on average across 15 locations in March. The insurer implemented 53 rate increases averaging approximately 8.2 percent across 41 locations since the beginning of Q4 2021. She noted that Allstate’s National General brand also increased rates by an average of 3.8 percent across seven locations in March.
Allstate announced catastrophe losses for first-quarter 2022 of $462 million, pre-tax. Estimated catastrophe losses for March are $227 million, primarily from tornado and wind in Texas and the southeast.