Allstate Announces Estimated Fourth Quarter 2022 Results

NORTHBROOK, Illinois, Jan. 19 (TNSres) -- Allstate, a property and casualty insurance company, issued the following news release on Jan. 18, 2023:

The Allstate Corporation (NYSE: ALL) announced preliminary results for the fourth quarter of 2022, with an estimated net loss between $285 million and $335 million and estimated adjusted net loss* between $335 million and $385 million.

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Property-Liability Premiums

* Premiums written increased 11.4% from fourth quarter of 2021 to $11.5 billion driven primarily by higher average auto and home insurance premiums.

* Compared to fourth quarter of 2021, auto premiums written increased 13.3% to $7.8 billion and premiums earned increased 10.3% to $7.7 billion, reflecting a 14.4% increase in Allstate brand average premiums.

* Allstate continued to implement significant auto insurance rate actions in the second half of 2022 in response to increased loss costs. Our implemented auto rate exhibit has been posted on allstateinvestors.com.

- During the month of December, the Allstate brand implemented auto rate increases of 10.6% across 19 locations, resulting in total brand premium impact of 1.9%.

- Total rate increases in 2022 for Allstate brand auto insurance are expected to raise annualized written premiums by approximately 16.9% or $4.1 billion.

* Compared to fourth quarter of 2021, homeowners premiums written increased 9.3% to $2.9 billion and premiums earned increased 9.4% to $2.8 billion reflecting a 12.0% increase in Allstate brand average premiums primarily due to increases in insured home valuations and rate increases.

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Property-Liability Underwriting Results

Estimated fourth quarter and full year recorded combined ratios:

* The fourth quarter of 2022 combined ratio of 109.1 was adversely impacted by increases in claim reserves for the first three quarters of 2022, prior year claim reserves additions, and costs associated with Winter Storm Elliott.

* The personal auto insurance combined ratio of 112.6 included $410 million (5.3 points) of reserve additions for the first three quarters of 2022, and $180 million (2.3 points) of incurred prior year claims reserves. Personal auto insurance claim frequency has continued to increase, but remains below 2019 levels.

* Unfavorable prior year reserve reestimates totaled $282 million, excluding catastrophes, in the fourth quarter.

* Approximately $100 million related to increased severity in commercial auto insurance primarily from shared economy and states that are being exited.

* The remaining $180 million primarily related to an increase in personal auto insurance claim frequency attributable to prior accident years.

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Catastrophe Losses

* Catastrophe losses for the fourth quarter are estimated to be $779 million, pre-tax, including losses in the month of December of $593 million, pre-tax.

* Catastrophe losses for December events were estimated at $616 million, partially offset by favorable reserve reestimates for prior events.

- Winter Storm Elliott accounted for approximately 80% or $478 million of December's estimated catastrophe losses.

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Investment Results

* Net investment income in the fourth quarter of 2022 is estimated at $557 million, including performance-based investment income estimated at $147 million.

* Net gains on investments and derivatives for the fourth quarter of 2022 are estimated to be $95 million, primarily due to increased valuation on equity investments, which is partially offset by losses on sales of fixed income securities.

* Proactive portfolio actions to reduce inflation and economic risk by shortening fixed income duration and reducing equity exposure mitigated portfolio losses by approximately $2 billion this year. In the fourth quarter we removed approximately half of our duration shortening interest rate derivatives resulting in a modest increase to fixed income duration.

* Total return on the $61.8 billion portfolio was 2.5% in the fourth quarter of 2022 and (4.0)% for the year ended December 31, 2022, and compares favorably to full year 2022 performance of the S&P 500 of (18.1)% and the Bloomberg Intermediate Bond return of (9.4)%.

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Capital Management

* We continue to expect the share repurchase program to be completed by September 30, 2023.

* Holding company assets totaled approximately $4.0 billion as of December 31, 2022.

The company plans to file a current report on Form 8-K with the Securities and Exchange Commission announcing quarterly results after close of market on Wednesday, February 1.

Financial information, including material announcements about The Allstate Corporation, is routinely posted on www.allstateinvestors.com.

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Original text here: https://www.allstatenewsroom.com/news/allstate-announces-estimated-fourth-quarter-2022-results/