The Allstate Corp., The Travelers Cos. Inc. and The Progressive Corp. had the highest second-quarter catastrophe loss increases among US property and casualty insurers, according to an analysis by S&P Global Market Intelligence.
Severe weather, including hailstorms that scientists believe may be driven by climate change, coupled with rising populations in areas prone to violent weather, pummeled insurers during the first half of 2023.
Allstate had the worst of it in the second quarter, posting catastrophe losses totaling $2.70 billion, more than double the $1.11 billion it posted during the prior-year quarter.
The losses were the result of 42 catastrophe events and impacted 160,000 customers and were partially offset by strong fixed income results from higher bond yields, according to comments made by Allstate CEO Thomas Wilson during a second-quarter earnings call.
However, catastrophe losses have already hit an early high, according to comments made by CFO Jesse Merten during the same call.
"Even at more normal levels of catastrophes for the rest of the year, 2023 will be the highest year for catastrophe losses on a pure dollar basis in about 25 years," Merten said.
In June, Allstate had $1.13 billion in catastrophe losses resulting from 18 weather events, with approximately 60% of those events being related to four wind and hail events, according to the insurer's Form 8-K.
Travelers posted $1.48 billion in second-quarter catastrophe losses, up from $746 million in the prior-year period.
The high figure was the result of "historic level of industrywide catastrophe losses," according to comments made by Travelers CEO Alan Schnitzer during a second-quarter earnings call.
Later in the same call, Executive Vice President Michael Klein said while second-quarter catastrophe losses are not unusual, losses for the industry were "significantly elevated compared to historical results."
Posting the third-highest catastrophe losses, Progressive's losses grew from $528.3 million in the second quarter of 2022 to $1.02 billion in 2023.
– Compare figures from a year ago.
– Explore S&P Global Market Intelligence coverage on catastrophes and natural disasters.
Catastrophe losses double
Of the five US insurers with the largest catastrophe losses, Chubb Ltd. posted a figure closest to its second-quarter 2022 results.
With catastrophe losses of $400 million in the second quarter of 2023, Chubb still saw losses rise from $291 million in the prior-year period.
During a second-quarter earnings call acknowledging the higher industrywide figures, Chubb CEO Evan Greenberg said catastrophe losses are never in line with expectations.
"I don't think there's any particular magic as to why Chubb's was lower," Greenberg said. "We underwrite well, we have a good spread of business, we select risk well."
Allstate, Travelers, Progressive and American International Group Inc. all saw their losses either double or nearly double year over year.
Each of the insurers has posted subsequently higher losses since 2021, except for AIG, which saw its second-quarter catastrophe losses decline from $138 million in 2021 to $121 million in 2022.