Profits fall 60% at Allstate amid COVID-19 crisis
US insurer Allstate Corporation saw a sharp decline in the first quarter of 2020 but managed to post a modest profit driven by "proactive risk and return management", according to its chief executive Tom Wilson.
The company posted a net income of $513 million in Q1 2020, 59.2 percent down from the net income of $1.26 billion in the first quarter of 2019.
Allstate's total revenue was $10.08 billion in the quarter, down 8.3 percent compared to the prior year quarter, primarily driven by net realised capital losses of $462 million.
The net investment income also decreased 35 percent in the first quarter on lower performance-based results. Property-Liability insurance premiums earned increased 4.4 percent.
Wilson said: “Allstate’s proactive risk and return management served customers and shareholders exceptionally well as the coronavirus pandemic hit our shores. After 89 years in the catastrophe business, we know success is determined by acting decisively, quickly and putting people first."
“We led the industry in helping customers, including providing a Shelter-in-Place Payback of over $600 million since they are driving less due to social distancing requirements. Our employees and agents reacted quickly, with over 95% working from home to serve customers. Allstate Identity Protection is also providing free identity protection to any U.S. resident for the rest of the year. Public equity holdings were reduced in February by $4 billion as we adjusted our risk and return profile, which lowered the negative impact of the March equity market decline,” he added.
Mario Rizzo, chief financial officer of the company, said: “Allstate’s capital position and liquidity remain strong, including $3.4 billion in parent holding company deployable assets and $8.8 billion in highly liquid securities generally saleable in one week. In the first quarter we generated strong returns on capital and plan to continue share repurchases under the current $3 billion program, which is expected to be completed by the end of 2021.”
