Allstate’s Q3 revenues reach $14.5B, GEICO’s earnings also up  November 8th 2023

Allstate’s Q3 revenues reach $14.5B, GEICO’s earnings also up

Allstate’s total revenues reached $14.5 billion during Q3, representing a 9.8% year-over-increase, the insurer said when announcing its financial results for the period.

The company said its $1.3 billion increase could be attributed largely to a $1.1 billion increase in property liability income from higher average premiums.

“Allstate’s focus on improving profitability while implementing our growth strategy made excellent progress this quarter,” said Tom Wilson, Allstate’s president and CEO, in a press release. “…Property liability had an underwriting loss in the quarter of $414 million, however, reflecting continued increases in auto insurance loss costs, elevated catastrophe losses, and adverse prior year loss development

Meanwhile, Berkshire Hathaway reported insurance underwriting profits for GEICO of $2.4 billion during Q3, up from the $1.07 billion in losses during the same period last year.

For the first nine months of this year, the conglomerate earned nearly $4.56 billion through its insurance company. During the first nine months of 2022, GEICO lost $190 million.

Separately, rising auto insurance rates throughout the nation have prompted discussions among consumer advocacy groups, industry stakeholders, and policymakers.

Munich Re posts strong Q3'23 results as P&C combined ratio strengthens to 82%

European reinsurer Munich Re has lifted its annual guidance for its net result to €4.5 billion after reporting a solid set of third quarter and nine month 2023 results, as the firm closed a third consecutive quarter with a net result above pro-rate guidance.

For Q3 and 9M 2023, Munich Re has posted a net result of €1.2 billion and €3.6 billion, respectively, compared with €1.1 billion and €4.2 billion, respectively, a year earlier.

Group-wide, insurance revenue fell by less than 1% to €14.5 billion in the quarter, but rose 3% to €42.9 billion in 9M 2023.

Within reinsurance, the segment contributed €995 million to the Group net result in the quarter, up from €851 million in Q3 2022, while the 9M 2023 result fell from €3.6 billion to €2.95 billion. Insurance revenue fell 6% year-on-year to €9.5 billion in the quarter, while the technical result increased to €1.6 billion.

The firm’s property and casualty reinsurance business produced a net result of €664 million in Q3 2023 compared with €309 million a year earlier, although as a result of a one-off effect in the quarter, insurance revenue decreased 5% to €6.9 billion. The P&C reinsurance combined ratio strengthened 6.9 percentage points to 82% in the quarter, but increased 3.1 percentage points to 83% for the nine month period.

AM Best turns positive on E&S lines insurance segment

AM Best has revised its outlook on the excess and surplus (E&S) lines insurance segment to positive from stable, citing increased business due to declining capacity in commercial lines and some personal lines markets.

The rating agency also referenced strong underwriting results, which are driving favourable operating profitability and strengthened capital positions, as a key reason for the revision.

AM Best observed that admitted carriers continue to constrict their underwriting criteria, leading accounts to seek coverage in the E&S market.

“Lines of business being cast off by admitted carriers include commercial auto and directors’ and officers’ liability,” the firm explained.

Meanwhile, AM Best noted that cyber liability and coverage for the expanding legal cannabis industry also continue to leverage the capabilities of E&S carriers.

The rating agency continued, “As these accounts tap into the core competencies of the surplus lines market, these E&S participants are posting more favourable underwriting results and greater top-line growth than those in the broader property/casualty industry.

Allstate revamps mobile app

It includes new features through several partnerships

Allstate has released an updated version of its mobile app, introducing new features that cater to customers’ broader needs and “go beyond” traditional insurance services.

The update incorporates partnerships with GasBuddy, SpotHero, Risk Factor, and Allstate’s own Good Hands Repair Network.

It also includes several user-focused enhancements bringing improved access to ID cards, streamlined messaging capabilities, and a redesigned launch screen, according to a news release from the insurance giant.

"We’re listening to our customers, and these updates give them more personalized value and control to protect what matters most,” said Mike Antognoli, Allstate’s mobile product director.

“The Allstate mobile app offers a hotbed of innovation that’s transforming how people interact with an insurer.”

Extreme weather measurement is becoming more accurate: here’s why, and what it means for insurers

On 5 October, Typhoon Koinu passed over Orchid Island, a small landmass off the coast of Taiwan, with a reported wind gust of 213 mph.

If approved by the World Meteorological Organization, this observation would be among the highest wind gusts ever measured at a surface weather station.

For insurers it’s vital we keep track of how we measure extreme weather events like this one. But a huge challenge to the industry today is how we keep track of changing weather observation techniques, and the technologies that sit behind them.

As the accuracy with which we can record weather observations improves, and our global observation networks become denser, there is a good chance we will see more extreme weather events being recorded.

This is firstly because the world is installing more weather monitoring stations to capture extremes. To take Orchid Island as an example, the Lanyu weather station was established in 1941 – we have no idea what historical typhoons could have produced in terms of wind speeds prior to that date. Today, with the lower cost of weather stations and solar power with cell services, many areas of the world are installing new weather station networks. This will help us better understand regional extreme weather, particularly in regions that have previously had little monitoring coverage, such as Africa.

We must also account for improvements in technology, which are enhancing monitoring accuracy.

Taking hurricanes as an example, observations suggest that storms are more frequently undergoing rapid intensification (an increase in the sustained winds of a cyclone or hurricane of at least 35 mph in a 24-hour period). A commonly used method for estimating rapid intensification is the Dvorak Technique. Unsurprisingly, this technique has evolved significantly since it was first introduced in the 1960s, and today modifications continue to be made to improve its accuracy. We now know that it’s likely that in the past certain storm intensities would have been underestimated by the Dvorak Technique, due to limited information.

Andrew Siffert, SVP and senior meteorologist, BMS