Allstate Is Enjoying Multiple Tailwinds

The coronavirus boosted personal auto results, as quarantine efforts led to a stark decline in miles driven and claims and the company saw a dramatic short-term boost to underwriting margins while social distancing efforts were in effect. Ultimately, though, this benefit waned as vaccination efforts took hold, and the pandemic appears to have restarted the pricing cycle at a less attractive point. Further, insurers are absorbing a rise in claims costs due to multiple factors beyond the impact of drivers returning to the road. Auto insurers have endured a very difficult period recently, which has pushed Allstate to significant underwriting losses. Outside of this issue, Allstate was buffeted by relatively high catastrophe losses recently. These two trends pushed the company into meaningful losses for 2022 and 2023.