Will Allstate's (ALL) April Cat Loss be a Cause for Concern?

www.investing.com/analysis/will-allstates-all-april-cat-loss-be-a-cause-for-concern-200581792

By Zacks Investment Research | May 21, 2021 03:05AM ET

Saved. See Saved Items.

This article has already been saved in your Saved Items

AAPL

+1.60%

Add to/Remove from Watchlist

+1.02%

Add to/Remove from Watchlist

ALL

+1.52%

Add to/Remove from Watchlist

RLI

-0.02%

Add to/Remove from Watchlist

ACGL

-0.04%

Add to/Remove from Watchlist

The Allstate Corporation (NYSE:ALL) ALL estimates a headwind of $430 million after tax related to catastrophe loss for April.

The havoc was caused by five weather-related events. One large hail event, primarily impacting Texas and Oklahoma, induced nearly 60% of the above-mentioned losses.

Allstate’s exposure to property and casualty insurance makes its prone to losses due to cat occurrences. In the first quarter, it suffered gross catastrophe losses worth $1.67 billion, nearly eight times greater than the 2020 reading. These losses were, however, offset by $1.08 billion of reinsurance and subrogation recoveries.

This shows that Allstate can effectively deal with catastrophe losses via its catastrophe management strategy and reinsurance programs. It also aims at limiting its exposure to riskier geographies by raising premiums. This may, however, reduce the number of policies in force.

Other property and casualty insurers that incur catastrophe losses due to their exposure to property and casualty insurance are Chubb (NYSE:CB) Limited CB, RLI (NYSE:RLI) Corp. RLI, Arch Capital Group (NASDAQ:ACGL) ACGL among others.

Despite Allstate’s vulnerability to Mother Nature’s wrath, our confidence in its ability to deliver impressive underwriting results is intact.

This property and casualty insurer has been witnessing annual revenue growth since 2011 and also tided over the pandemic-ravaged 2020 with a 0.3% revenue rise. The company’s ability to stay in a positive territory against the backdrop of a tough operating environment is quite impressive. In the first quarter of 2021, the top line grew a good 14% while the bottom line was up a whopping 73%.

Allstate’s long-term strategy of boosting its personal property-liability market share and expanding protection offerings will fuel growth.

While increasing its personal property-liability market share, the company acquired National General in January 2021. The transaction will expand its market share in the said space by more than one percentage point and enhance its independent agent-facing technology.

It will significantly fortify its distribution footprint, thus leading the company to be one of the top five personal lines carriers in the independent agency distribution channel. Additional expansion opportunities through independent agents also exist in the standard auto and homeowners insurance realm.

Extension of its Protection Services segment is another key catalyst. A number of acquisitions from 2017 to 2019 led to the segment’s rapid growth and its revenues rose 21.6% in the first quarter.

Allstate also sold its Life insurance businesses in the March quarter to focus on its core growth areas, namely the auto and homeowners insurance.

The company is also overhauling by investing in technology. This should increase its efficiency and save operational costs.
We believe, the company is firing on all cylinders for growth and that the catastrophe losses will not mar its profitability.

Year to date, Allstate has gained 23.8% compared with the industry's growth of 19.9%.

Allstate currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here

More Stock News: This Is Bigger than the iPhone!

It could become the mother of all technological revolutions. Apple (NASDAQ:AAPL) sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 77 billion devices by 2025, creating a $1.3 trillion market.

Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 4 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2022.

Click here for the 4 trades >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

The Allstate Corporation (ALL): Free Stock Analysis Report

RLI Corp. (RLI): Free Stock Analysis Report

Chubb Limited (CB): Free Stock Analysis Report

Arch Capital Group Ltd. (ACGL): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

2 Top Stocks to Buy and Hold for the Rest of the Year By Jesse Cohen/Investing.com - Jun 02, 2023

Fed policy uncertainty, worries over a looming recession, and stubborn inflation will continue to dictate investor sentiment in 2023. I used InvestingPro's stock screener to find...

Pro Research of the Week: Diversify Into Bitcoin With This Crypto... By David Wagner/Investing.com - Jun 02, 2023

Crypto stocks offer exposure to cryptocurrencies. Our InvestingPro advanced watchlist includes the best stocks in this category. Out of them, CleanSpark is a top pick with good...

S&P 500: Bull-Trap Negated as Sellers Lose Momentum By Declan Fallon - Jun 02, 2023 1

It's not exactly textbook, but whenever bears are able to punish markets, they are quickly undone, often by a single day of strong buying. The S&P 500 is an ideal case in point....

Add a Comment

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:

Enrich the conversation, don’t trash it.
Stay focused and on track. Only post material that’s relevant to the topic being discussed.
Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.
Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
Only English comments will be allowed.
Any comment you publish, together with your investing.com profile, will be public on investing.com and may be indexed and available through third party search engines, such as Google.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

I have read Investing.com's comments guidelines and agree to the terms described.

I Agree

Write your thoughts here

Are you sure you want to delete this chart?

Delete Cancel

Post

Post also to:

Replace the attached chart with a new chart ?

Replace Cancel

1000

Comment Guidelines

Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.

Please wait a minute before you try to comment again.

Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.

<div id="comment">
				<div class="comment js-comment" data-comment-id="{commentID}" id="comment-{commentID}" data-user-id="">
    <div class="mainComment js-content">
       <div class="commentInnerWrapper">
        <a href="{userLink}" class="js-user-link"><img src="{userImage}" width="33" height="33" alt="{usernameAlt}" class="img" onerror="this.src='https://i-invdn-com.investing.com/defaultUserMaleTmp.png';"></a><div class="commentBody">
                					<span class="commentUsername">
                    	<a href="{userLink}" class="js-user-link js-user-name">{username}</a>
					</span>
                                <span class="js-date" comment-date="{dateFormat}" comment-date-formatted="{dateFormatted}" title="{dateTitle}">Just Now</span>
                <div class="commentDropDown js-commentDropDownWrapper " data-user-id="" data-cid="{commentID}">
	<a href="javascript:void(0);" class="threeDotsIconSmall js-thinDropdownArrow"></a>
	<div class="tooltipPopup commentActionsPop noHeader js-commentDropDownOptions displayNone">
		<div class="addRow js-option share">
			<a href="javascript:void(0);" class="js-commentSharePopup" data-cid="{commentID}" data-curl="{commentLink}"><span class="smallShareIcon middle"></span>Share</a>
		</div>

<div class="js-option addRow follow">
            <div class="js-follow-post-button" data-reg_ep="follow comment">
                <span class="alertfollowIcon middle"></span>Follow this post            </div>
            <div class="js-unfollow-post-button displayNoneImp">
                <span class="alertUnfollowIcon middle"></span>Unfollow this post            </div>
        </div>

<div class="addRow js-option save"  data-reg_ep="save comment">
		<a href="javascript:void(0);" class="js-save-item-btn" data-item-type="comments" data-item-id="{commentID}">
			<i class="saveItemBigIcon middle"></i>
			Save		</a>
	</div>
	<div class="addRow saveItemsConfirmation noHover displayNone js-saveItemResult">
		
<div class="content js-saveItemSuccess displayNone">
	<span class="mediumGreenSuccessIcon"></span><span>Saved. See <a href="/members-admin/saved-items" target="_blank">Saved Items</a>.</span>
	<a href="javascript:void(0);" class="bugCloseIcon js-close"></a>
</div>
<div class="content js-saveItemAlreadySaved saveItemAlreadySaved displayNoneImp">
	<span>This comment has already been saved in your <a href="/members-admin/saved-items" target="_blank">Saved Items</a></span>
	<a href="javascript:void(0);" class="bugCloseIcon js-close"></a>
</div>
	</div>

<div class="addRow shareButtons js-sharePopup displayNone">
			<div class="js-shareComment"><span class="js-shareCommentSpan"></span></div>
		</div>
	</div>
</div>
                 <div class="commentAuthor js-comment-by-author"><span class="commentAuthorIcon"></span>Author's response</div>             </div>
		<div id="commentText-{commentID}" class="js-text-wrapper commentText withImage">
							<div id="commentBigChart{commentID}" class="commentBigChart js-comment-chart" onclick="openViewChartPopup('{commentID}')">
					<img src="https://d1-invdn-com.investing.com/comments_images/{commentImage}" alt="{commentAlt}">
					<i class="newMagnifyChartIcon"></i>
				</div>
						<span class="js-text">{commentContent}</span>
			<div class="clear"></div>
							<div class="commentButtons js-not-master-user">
					<a href="javascript:void(0)" class="reply js-reply-btn" data-real-parent-id="{commentID}" data-to-user-name="{username}" data-to-user-id="">Reply</a>
					<div class="inlineblock likeDislikeBox js-like-dislike-box" data-item-id="{commentID}">
	<input class="js-like-checkbox" type="checkbox" name="option" value="Yes" id="like_{commentID}">
	<label for="like_{commentID}" class="like" title="I agree"></label>
	<span class="numOfLikes js-like-count lighterGrayFont">0</span>
	<input class="js-dislike-checkbox" type="checkbox" name="option" value="No" id="dislike_{commentID}">
	<label for="dislike_{commentID}" class="dislike" title="I disagree"></label>
	<span class="numOfDislikes js-dislike-count lighterGrayFont">0</span>
</div>

<div class="reportComment js-flag float_lang_base_2">
                            <a href="javascript:void(0);" id="commentFlag_{commentID}">
                                <span class="reportCommentIcon middle"></span><span class="inlineblock middle">Report</span>
                            </a>
                        </div>
                    				</div>
					</div>
	   </div>
	</div>
	</div>			</div>
			<div id="reply">
				
    <div class="commentReply js-comment js-comment-reply" data-comment-id="{commentID}" id="comment-{commentID}" data-user-id="">
		<div class="commentInnerWrapper"><a href="{userLink}" class="js-user-link"><img src="{userImage}" width="33" height="33" alt="{usernameAlt}" class="img" onerror="this.src='https://i-invdn-com.investing.com/defaultUserMaleTmp.png';"></a><div class="commentBody js-content">
            				<span class="commentUsername">
					<a href="{userLink}" class="commentUsername js-user-link js-user-name" onMouseOver="">{username}</a>
				</span>
                        <span class="js-date" comment-date="{dateFormat}" comment-date-formatted="{dateFormatted}" title="{dateTitle}">Just Now</span>
			 <div class="commentAuthor js-comment-by-author"><span class="commentAuthorIcon"></span>Author's response</div> 			<div class="commentDropDown js-commentDropDownWrapper " data-user-id="" data-cid="{commentID}">
	<a href="javascript:void(0);" class="threeDotsIconSmall js-thinDropdownArrow"></a>
	<div class="tooltipPopup commentActionsPop noHeader js-commentDropDownOptions displayNone">
		<div class="addRow js-option share">
			<a href="javascript:void(0);" class="js-commentSharePopup" data-cid="{commentID}" data-curl="{commentLink}"><span class="smallShareIcon middle"></span>Share</a>
		</div>

</div>
		<div id="commentText-{commentID}" class="js-text-wrapper commentText withImage">
							<div id="commentBigChart{commentID}" class="replyBigChart displayNone js-comment-chart">
					<img src="https://d1-invdn-com.investing.com/comments_images/{commentImage}" alt="{commentAlt}">
					<i class="newMagnifyChartIcon"></i>
				</div>
				<span id="commentSmallChart{commentID}" class="commentSmallChart pointer js-comment-chart" onclick="openViewChartPopup('{commentID}')">
                    <img src="https://d1-invdn-com.investing.com/comments_images/{commentImageSmall}" width="116" height="52" alt="{commentAlt}">
                    <span class="chartMagnifyOverlay displayNone"></span>
                    <span class="searchGlassIcon chartMagnify displayNone"></span>
                </span>
						<span class="js-text">{commentContent}</span>
			<div class="clear"></div>
							<div class="commentButtons js-not-master-user">
					<a href="javascript:void(0)" class="reply js-reply-btn" data-real-parent-id="{commentID}" data-to-user-name="{username}" data-to-user-id="">Reply</a>
					<div class="inlineblock likeDislikeBox js-like-dislike-box" data-item-id="{commentID}">
	<input class="js-like-checkbox" type="checkbox" name="option" value="Yes" id="like_{commentID}">
	<label for="like_{commentID}" class="like" title="I agree"></label>
	<span class="numOfLikes js-like-count lighterGrayFont">0</span>
	<input class="js-dislike-checkbox" type="checkbox" name="option" value="No" id="dislike_{commentID}">
	<label for="dislike_{commentID}" class="dislike" title="I disagree"></label>
	<span class="numOfDislikes js-dislike-count lighterGrayFont">0</span>
</div>

Are you sure you want to delete this chart?

Delete Cancel

Post

Replace the attached chart with a new chart ?

Replace Cancel

1000

Comment Guidelines

Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.

Please wait a minute before you try to comment again.

I feel that this comment is:

Spam

Offensive

Thank You!

Your report has been sent to our moderators for review

Central Banks

Interest Rates

Next Meeting

FED

5.25%

Jun 14, 2023

ECB

3.75%

Jun 15, 2023

BOE

4.50%

Jun 22, 2023

SNB

1.50%

Jun 22, 2023

RBA

3.85%

Jun 06, 2023

BOC

4.50%

Jun 07, 2023

RBNZ

5.50%

Jul 12, 2023

BOJ

-0.10%

Jun 16, 2023

CBR

7.50%

Jun 09, 2023

RBI

6.50%

Jun 08, 2023

PBOC

3.65%

BCB

13.75%

Jun 21, 2023

US 30	33,200.4	+138.8	+0.42%
US 500	4,239.5	+18.5	+0.44%
Dow Jones	33,061.57	+153.30	+0.47%
S&P 500	4,221.02	+41.19	+0.99%
Nasdaq	13,100.98	+165.70	+1.28%
S&P 500 VIX	15.48	-0.17	-1.09%
Dollar Index	103.453	-0.049	-0.05%

Crude Oil WTI	71.47	+1.37	+1.95%
Brent Oil	75.68	+1.40	+1.88%
Natural Gas	2.144	-0.014	-0.65%
Gold	1,996.40	+0.90	+0.05%
Silver	24.012	+0.025	+0.10%
Copper	3.7742	+0.0632	+1.70%
US Soybeans	1,327.75	-1.25	-0.09%

U.S. 10Y	3.616	+0.005	+0.14%
U.S. 30Y	3.832	-0.006	-0.16%
U.S. 5Y	3.704	+0.003	+0.09%
U.S. 3M	5.393	+0.008	+0.15%
US 10Y T-Note	114.70	-0.03	-0.03%
Euro Bund	135.94	-0.39	-0.29%
10-2 Yield Spread	-76.44	+0.37	+-0.48%

Apple	180.09	+2.84	+1.60%
Alphabet A	123.72	+0.85	+0.69%
Tesla	207.52	+3.59	+1.76%
Amazon.com	122.77	+2.19	+1.82%
Netflix	403.13	+7.90	+2.00%
Meta Platforms	272.61	+7.89	+2.98%
Bank of America	27.78	+0.21	+0.76%

Will Allstate's (ALL) April Cat Loss be a Cause for Concern?

More Stock News: This Is Bigger than the iPhone!

Related Articles