Liberty Mutual, Allstate, Berkshire catastrophe losses exceed $3B in 2022

Liberty Mutual Holding Co., The Allstate Corp. and Berkshire Hathaway Inc. all exceeded $3 billion in 2022 global catastrophe losses, three of six property and casualty insurers who reported full-year cat losses in excess of $1.5 billion, according to an S&P Global Market Intelligence analysis.

Liberty Mutual had the highest total in the analysis of P&C insurers operating in the US with $3.55 billion, followed by Allstate with $3.11 billion and Berkshire Hathaway at $3.10 billion.

Chubb Ltd. ($2.2 billion), The Travelers Cos. ($1.88 billion), and The Progressive Corp. ($1.66 billion) rounded out the top six in the analysis.

US insurers were hit hard by severe weather events in 2022 that pushed total global cat loss estimates to $313 billion, according to Aon PLC. Those events included Hurricane Ian, a severe winter storm in December and severe convective storms that struck the Midwest in May and June.

One was enough

The arrival of Hurricane Ian on Florida's Gulf Coast on Sept. 28 wrecked what had been a comparatively calm Atlantic hurricane season and made a serious dent in some insurers' bottom lines.

The Category-4 event caused between $53 billion and $74 billion in insured losses after cutting a swath across Florida before turning its wrath on the Carolinas. It was, at $112.9 billion in adjusted costs, the third-costliest tropical cyclone in US history behind Hurricane Katrina ($190 billion) in 2005 and Hurricane Harvey ($151.3 billion) in 2017.

Allstate's estimated gross catastrophe losses from Ian totaled $671 million, Mario Rizzo, president of property-liability, said during a third-quarter earnings call. He said that total was reduced by $305 million in reinsurance recoveries related to property reinsurance for Castle Key, its standalone Florida property insurance company.

Of the $366 million net loss from Ian, approximately 25% was from property lines, Rizzo added.

Chubb was among the hardest hit by Ian, reporting $975 million in losses from the event. CEO Evan Greenberg said during the company's third-quarter earnings call that 77% of the pretax catastrophe losses from Ian was incurred by commercial lines, while the remainder was from personal lines.

Berkshire Hathaway's $2.5 billion in losses from Ian were divided between three of its business units. GEICO Corp. incurred losses and loss adjustment expenses of approximately $400 million, Berkshire Hathaway Primary Group lost $554 million and Berkshire Hathaway Reinsurance Group incurred $1.6 billion in losses.

Progressive reported that 45% of its $1.66 billion in 2022 cat losses, roughly $747 million, was from Hurricane Ian. Its personal lines and commercial lines of business incurred $575 million of those losses.

Severe winter storm's chilling effect

Liberty Mutual, Travelers, Allstate and Chubb were the companies in this analysis that were hardest hit by the December winter storm, which impacted 42 states between Dec. 21 and Dec. 26 and caused $5.4 billion in insured losses, according to risk modeler Karen Clark & Co.

The storm, which ravaged homes, businesses and infrastructure from the northwestern US to the northeast and down to the Gulf Coast, led to $568 million in incurred losses for Liberty Mutual, the highest among the companies featured in the analysis.

Travelers' $512 million in losses were "significant," CFO Daniel Frey said during the company's fourth-quarter earnings call, but they were not "outsized relative to our modeled estimates for a storm of this size and intensity."

Allstate's $478 million in losses from the storm were the primary cause of a 5.5-point year-over-year increase to 92.6% in the fourth-quarter combined ratio for the homeowners segment, according to Rizzo.