US freeze costs Allstate $277 million
Following a series of freezing windstorms in the US last month, America’s largest publicly held personal lines insurer Allstate estimated that natural catastrophe losses for January 2014 had reached $277 million, pre-tax ($180 million after-tax).
Six events in January cost the insurer $271 million, pre-tax, with additional costs from unfavorable reserve reestimates of prior reported catastrophe losses.
One of the events met the definition of a winter freeze catastrophe in one region of the country but not in other regions due to the amount of claim counts. Non-catastrophe losses in these other regions were $39 million, pre-tax, which will be reflected primarily in the homeowners combined ratio and the homeowners underlying combined ratio that excludes catastrophe losses and prior year reserve reestimates.
Meanwhile, the insurer announced that its board of directors had approved a 12 percent increase from the dividend declared in the previous quarter. Stockholders will receive a dividend of 28 cents on each outstanding share of the corporation's common stock, payable in cash on April 1, 2014.
In addition, the Allstate board approved a $2.5 billion common stock repurchase programme, to be completed over the next 18 months.
"Allstate continues to provide shareholders with attractive cash returns through quarterly dividends and common share repurchases," said Thomas Wilson, chairman, president and chief executive officer of The Allstate Corporation. "We paid out $2.5 billion in dividends and share repurchases over the last 13 months. Allstate maintains the capital strength and flexibility to increase shareholder value and capitalise on growth opportunities, with $2.6 billion in holding company deployable assets at year-end 2013."
