Allstate Corp.'s balance sheet took another heavy hit in the second quarter thanks to a combination of substantial catastrophe losses and elevated frequency and severity in its personal auto segment.

The insurer reported a net loss before taxes of $1.75 billion in the period, compared to a net loss of $1.31 billion in the second quarter of 2022. Operating EPS plummeted to a loss of $4.42 per share from a loss of 75 cents while the insurer's combined ratio ballooned to 117.6% from 107.9%.

The Travelers Cos. Inc. and Root Inc. also recorded pretax losses in the second quarter, while American International Group Inc. had a hefty drop in income.

Travelers booked a pretax loss of $48 million, a decrease in net income from $657 million from the year-ago quarter. Root had a $36.7 million loss, an improvement from a loss of $89.9 million in the second quarter of 2022. AIG's pretax income for the quarter plunged 52.4% to $1.87 billion from $3.93 billion a year ago.

Markel Group Inc. had positive reversal in fortune in both EPS and pretax income. The Glen Allen, Va.-based carrier's EPS soared to $51.89, from a loss of $67.23 per share in the second quarter of 2022. Pretax income rose to $908 million, from a loss of $1.12 billion a year ago.

Progressive Corp.'s pretax income also returned to positive territory in the quarter, rising to $435.7 million from a loss of $635.9 million in the prior-year period.

Catastrophe losses mount up

It was the fifth straight quarter in which Allstate booked losses in pretax income and operating EPS and the second-consecutive quarter in which catastrophe losses exceeded $1.5 billion.

Allstate had the largest catastrophe loss load among insurers in the analysis at $2.7 billion, an increase from $1.69 billion in the first quarter of 2023. Travelers was second with a $1.48 billion catastrophe loss bill, and Progressive, whose losses totaled $1.02 billion, was third.

Allstate's catastrophe losses were driven by the business that handles private personal auto and homeowners coverage. The Allstate Protection segment recorded an underwriting loss of $2.09 billion in the quarter.

Mario Rizzo, Allstate's president of property and liability, said in a conference call that the underwriting losses were caused by higher catastrophe and noncatastrophe losses "from severe weather events and increased accident frequency and claim severity."

The $1.48 billion in catastrophe losses Travelers incurred was the insurer's second-largest ever for a second quarter, CFO Daniel Frey said during the company's earnings call. Six events in the quarter each surpassed the $100 million mark, the highest such total since 2013 when the company started disclosing statistics from its significant events table.

Progressive's catastrophe losses were "a significant part" of the insurer's "profitability pressures," CEO Susan Griffith said. Griffith said 43 events through the first half of 2023 had been "broadly felt" in 44 US states.

Those losses led to significant unfavorable reserve development for the Mayfield, Ohio-based insurer to the tune of $489.3 million, compared with favorable development of $45.9 million a year ago.