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Allstate sees Q2 net loss of $1.4bn driven by heavy cat losses of $2.7bn - Reinsurance News

Allstate Corporation has reported a Q2 net loss applicable to common shareholders of $1.4 billion, chiefly driven by increased underwriting losses due to a massive catastrophe hit, which totaled $2.7 billion for the quarter.

Allstate’s catastrophe losses in Q2 last year were $1.1 billion, marking a substantial increase of 143.3% in 2023. For the first six months of this year, Allstate’s catastrophe losses stand at $4.39 billion, up 179.4% from 2022.

According to Allstate, the adjusted net loss in Q2 2023 was $1.2 billion, or $4.42 per diluted share, compared to an adjusted net loss of $207 million in the same quarter last year.

Allstate’s underlying combined ratio for Q2 was 92.9%, down slightly from 93.4% in Q2 of 2022.

Meanwhile, the firm also disclosed that total revenues grew 14.4%, or $1.8 billion, to $14 billion for Q2 2023 compared to the prior year quarter.

Allstate suggested that this was driven by a $1 billion increase in Property-Liability earned premium and net gains on equity valuations in Q2 compared to losses in 2022.

Indeed, Property-Liability earned premium increased 9.6% to $11.9 billion in Q2, due to higher average premiums.

Allstate noted the “$2.1 billion underwriting loss in Q2 increased by $1.2 billion compared to last year, driven by a $1.6 billion increase in catastrophe losses.”

AIG profit beats estimates

American International Group Inc. exceeded second-quarter profit expectations, driven by growth in its life and retirement unit and lower-than-expected catastrophe losses in what was a very expensive quarter for the industry.

AIG said net premiums written in its general insurance arm for the quarter grew 10% to $7.5 billion.

Adjusted after-tax income attributable to common shareholders climbed to $1.75 per share from $1.39 a year earlier. Analysts on average had expected $1.59, according to Refinitiv data.

AIG's life and retirement unit saw a 42% jump in premiums and deposits, partly helped by record sales in fixed index annuities.

Total consolidated net investment income rose 37% to $3.6 billion, helped by higher income from fixed maturity securities and loan portfolios due to the higher reinvestment rates.

The New York-based company's general insurance underwriting income fell 26%, hurt by $250 million in total catastrophe-related charges, mainly related to U.S. storms and Typhoon Mawar, which hit the Western Pacific island of Guam in May.

Reinsurance broker Gallagher Re preliminarily pegged global insured losses from natural hazards in the first six months of 2023 at $52 billion, while weather and climate events alone were expected to have driven an insurance bill of $46 billion.

AIG's general insurance accident year combined ratio was 88%, compared with 88.5% a year earlier. The metric excludes catastrophe losses, and a ratio below 100 signifies that the insurer earns more from premiums than it pays out in claims.

CNA Financial net income rises to $283m in Q2 2023

Chicago-based insurer CNA Financial Corporation has reported a 49% increase in net income, to $283 million, for the second quarter of 2023, which compares with $190 million reported in the prior year quarter.

Core income for the quarter was $374 million, versus $317 million in the prior year quarter, which according to CNA, reflects higher investment income and record high pretax underlying underwriting income, partially offset by higher catastrophe losses and lower favourable net prior year development.

While Net investment losses for the quarter were $25 million, compared to $40 million in the prior year quarter, Net investment income was up 33% to $575 million. Corporate & Other core loss of $46 million versus $78 million in the prior year quarter.

For Property & Casualty (P&C) business, core income was $374 million for Q2 2023, an increase of $57 million compared to the same period last year.

This growth was driven by higher investment income and record high pretax underlying underwriting income, partially offset by higher catastrophe losses and lower favourable net prior year development, CNA explained.

CCC Intelligent Solutions Holdings Inc. Announces Second Quarter 2023 Financial Results

CCC Intelligent Solutions Holdings Inc. (“CCC” or the “Company”) (NASDAQ: CCCS), a leading SaaS platform for the P&C insurance economy, today announced its financial results for the three months ended June 30, 2023.

“CCC delivered strong second quarter results, highlighted by 10% year-over-year revenue growth and 38% adjusted EBITDA margin. The strong performance in the first half of 2023 included multiple large renewals and relationship expansions that reinforce our confidence in our ability to deliver on our strategic and financial objectives,” said Githesh Ramamurthy, Chairman & CEO of CCC.

“We estimate that as a result of the continued macro pressures facing our customers, the cumulative annual cycle time for automotive claims in the U.S. increased to more than 2 billion days in 2022,” continued Ramamurthy. “This staggering figure underscores the importance of delivering effective and integrated state-of-the-art capabilities to help our clients in the P&C insurance economy address operational efficiency. Our solutions and use of AI are helping to do just that by helping customers to reduce the cycle time, administrative cost, and environmental impact of the claims process.”

California privacy regulator reviewing data collected by smart vehicles

California’s privacy regulator said Monday it will be reviewing the data privacy practices of connected car manufacturers.

Connected cars offer drivers smart features including web-based entertainment, location sharing, cameras and smartphone integration. In its announcement Monday, the California Privacy Protection Agency (CPAA) said in order to provide these features, the vehicles “often automatically gather consumers’ locations, personal preferences, and details about their daily lives.”

Ashkan Soltani, the CPAA’s executive director, said its enforcement division is inquiring into whether connected car companies are “complying with California law when they collect and use consumers’ data.”

Insurers are struggling with API security, report finds

During the past year, 17% of insurance companies and financial service firms had an application programming interface (API) related security breach, according to a survey from Salt Security, Inc., which found that 84% of API attacks against financial service and insurance businesses came from “authenticated” users that appeared legitimate but were not.

Survey participants included 71 financial and insurance respondents and 120 chief information security officers (CISO).

Additionally, 28% of respondents said they have no current API strategy, while 42% said they have little confidence in understanding which APIs could expose personally identifying information.

Just 13% of respondents said they felt their API security was “advanced,” Salt Security reported.

However, the challenges aren’t going unnoticed. Nearly 80% of CISO respondents said API security is a higher priority today than it was two years ago, while 76% said their organization is making it a priority for the coming two years. Around 13% said it will be a critical priority for the years to come.

Further, 56% of financial and insurance respondents said API security is now a C-level issue.

The above slideshow highlights five big takeaways from Salt Security’s State of API Security report covering the financial services and insurance industries.

“APIs are essential for the innovative digital services being delivered today by financial and insurance organizations,” Roey Eliyahu, CEO and co-founder of Salt Security, said in a release. “However, because these APIs transport sensitive customer and financial information, cybercriminals also know they share a wealth of data that can be leveraged for theft or fraud.”