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The Allstate Corporation ALL recently released estimates of catastrophe losses for February 2025. It amounted to $92 million, or $73 million after-tax. Notably, when combined with January’s catastrophe losses, ALL’s year-to-date total for February reached $1.17 billion, or $922 million after-tax.
The incidence of such catastrophe losses dampens an insurer’s underwriting profits and subsequently, the combined ratio. Softer underwriting results may also exert strain on a company’s margins. Since property and casualty (P&C) insurers usually remain susceptible to such losses, the companies have to remain equipped with measures such as rate hikes and favorable reserve development to counter the headwinds arising from such losses.
However, frequent catastrophe losses serve as a means for insurers to accelerate the policy renewal rate to make uninterrupted claim payments. Rate hikes are expected to bring higher premiums, which usually account for a massive chunk of an insurer’s top line. Catastrophe losses were $5 billion for 2024, while P&C insurance premiums earned advanced 11.2% year over year.
Update on ALL’s Policies in Force
Concurrent with announcing February catastrophe loss estimates, Allstate provided a detailed update of policy figures of Protection Plans. Auto policies in force increased marginally to 24.89 million, up from 24.84 million in January 2025, representing a 0.2% increase. However, this still marked a 0.9% decline from the figure as of Feb. 29, 2024. The homeowners policies in force also experienced a 0.2% month-over-month increase, rising to 7.5 million, and showed a healthy 2.5% year-over-year growth.
In other personal lines, which include products such as renters, condominiums, landlords, boats, umbrellas, manufactured homes, scheduled personal property and valuable items, policies in force edged up slightly to 4.873 million in February 2025, from 4.866 million in January. This reflected a 0.1% increase month over month and a 0.4% increase compared with the prior year.
Conversely, commercial lines continued to contract, with policies in force dropping to 196,000 in February from 204,000 in January 2025, a 3.9% sequential decline. On a year-over-year basis, the contraction was even more pronounced, with a 29% decrease from February 2024.
Overall, Allstate ended February 2025 with a total of 37.5 million policies in force, a 0.2% increase from the prior month but a 0.3% decrease from the same period last year. An increase in the number of policies in force implies more customers paying premiums, which, in turn, boosts the top-line growth of an insurer. Total policies in force were 208.3 million as of Dec. 31, 2024, which grew 7.2% from the figure as of Dec. 31, 2023.