We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
How Are Rate Hikes Aiding Allstate (ALL) to Combat Inflation?
Read MoreHide Full Article
The Allstate Corporation (ALL - Free Report) announced that it carried on auto insurance rate hikes in July to combat ongoing inflationary pressures. It also implemented homeowners’ insurance rate actions during the month. The company is likely to continue the momentum to improve profitability. It also reported July’s estimated catastrophe losses of $313 million ($247 million after taxes).
Let’s delve deeper.
Last month, Allstate hiked rates by 8.2% in 12 locations, which provided a total premium impact of 0.9%. The rate hikes since 2023 beginning had a premium impact of 8.4%, which are likely to boost annualized written premiums by around $2.19 billion. In Allstate brand homeowners insurance, rate increases had a premium impact of 7.8%, which is anticipated to enhance annualized written premiums by around $804 million.
The high inflation environment is expected to keep driving insurance prices higher for both auto and homeowners insurance. Apart from implementing higher rates, ALL is likely to improve profitability through cost-curbing efforts with the help of digitization, improving efficiency, leveraging scale with strategic partnerships and stricter underwriting requirements. Reducing distribution expenses will also support its margins.
ALL’s catastrophe losses for the last month incorporated 18 events estimated at $349 million, partly offset by favorable reserve re-estimates. The losses stemmed from hail events and geographically widespread wind.
ALL’s catastrophe losses were $4,387 million in the first half of 2023 alone, which surged 179.4% year over year. In 2021 and 2022, the company incurred catastrophe losses of $3,339 million and $3,112 million, respectively.
It remains focused on lowering losses through its catastrophe management strategy, reinsurance programs and restricting exposure to riskier geographic markets by expanding premiums. Nevertheless, this is likely to affect the growth rate of policies in force for Allstate Protection Homeowners. In Allstate Protection auto, policies in force declined 2.6% in the first half of 2023.
Price Performances
Allstate shares have declined 17.5% in the past year against the industry’s 12.8% rise.
The Zacks Consensus Estimate for Trupanion’s current year earnings has improved 9.2% in the past 30 days. Also, the consensus mark for TRUP’s revenues in 2023 suggests 19.2% year-over-year growth.
The consensus mark for Employers Holdings’ current year earnings indicates a 10.2% year-over-year increase. Furthermore, the consensus estimate for EIG’s revenues in 2023 suggests 20.5% year-over-year growth.
The Zacks Consensus Estimate for Aegon’s current year earnings has improved 16.7% in the Past 30 days. During this period, AEG has witnessed one upward estimate revision against none in the opposite direction.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
How Are Rate Hikes Aiding Allstate (ALL) to Combat Inflation?
The Allstate Corporation (ALL - Free Report) announced that it carried on auto insurance rate hikes in July to combat ongoing inflationary pressures. It also implemented homeowners’ insurance rate actions during the month. The company is likely to continue the momentum to improve profitability. It also reported July’s estimated catastrophe losses of $313 million ($247 million after taxes).
Let’s delve deeper.
Last month, Allstate hiked rates by 8.2% in 12 locations, which provided a total premium impact of 0.9%. The rate hikes since 2023 beginning had a premium impact of 8.4%, which are likely to boost annualized written premiums by around $2.19 billion. In Allstate brand homeowners insurance, rate increases had a premium impact of 7.8%, which is anticipated to enhance annualized written premiums by around $804 million.
The high inflation environment is expected to keep driving insurance prices higher for both auto and homeowners insurance. Apart from implementing higher rates, ALL is likely to improve profitability through cost-curbing efforts with the help of digitization, improving efficiency, leveraging scale with strategic partnerships and stricter underwriting requirements. Reducing distribution expenses will also support its margins.
ALL’s catastrophe losses for the last month incorporated 18 events estimated at $349 million, partly offset by favorable reserve re-estimates. The losses stemmed from hail events and geographically widespread wind.
ALL’s catastrophe losses were $4,387 million in the first half of 2023 alone, which surged 179.4% year over year. In 2021 and 2022, the company incurred catastrophe losses of $3,339 million and $3,112 million, respectively.
It remains focused on lowering losses through its catastrophe management strategy, reinsurance programs and restricting exposure to riskier geographic markets by expanding premiums. Nevertheless, this is likely to affect the growth rate of policies in force for Allstate Protection Homeowners. In Allstate Protection auto, policies in force declined 2.6% in the first half of 2023.
Price Performances
Allstate shares have declined 17.5% in the past year against the industry’s 12.8% rise.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
ALL currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader finance space are Trupanion, Inc. (TRUP - Free Report) , Employers Holdings, Inc. (EIG - Free Report) and Aegon N.V. (AEG - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Trupanion’s current year earnings has improved 9.2% in the past 30 days. Also, the consensus mark for TRUP’s revenues in 2023 suggests 19.2% year-over-year growth.
The consensus mark for Employers Holdings’ current year earnings indicates a 10.2% year-over-year increase. Furthermore, the consensus estimate for EIG’s revenues in 2023 suggests 20.5% year-over-year growth.
The Zacks Consensus Estimate for Aegon’s current year earnings has improved 16.7% in the Past 30 days. During this period, AEG has witnessed one upward estimate revision against none in the opposite direction.