In an aerial view, burned structures and cars are seen two months after a devastating wildfire on Oct. 9 in Lahaina, Hawaii. The wind-whipped wildfire on Aug. 8 killed at least 98 people, the deadliest wildfire in modern US history, while displacing thousands more and destroying over 2,000 buildings.
Source: Mario Tama via Getty Images
The Allstate Corp. and Liberty Mutual Holding Co. Inc. had the highest third-quarter catastrophe losses among US property and casualty insurers, with both topping the $1 billion plateau, according to an analysis by S&P Global Market Intelligence.
Severe weather events, such as Hurricane Idalia on Florida's Gulf Coast, convective storms in the Midwest and wildfires on Maui were the driving factors in the quarter's cat loss reports.
Allstate booked $1.18 billion in cat losses, up from $763 million a year ago, but significantly down from the $2.70 billion booked in the second quarter. Allstate said in its third-quarter earnings release that the cat losses were primarily from the Maui wildfires and 48 wind-hail events, including a hailstorm that hit Texas in September.
Allstate's cat losses for the first nine months of 2023 were $5.57 billion, the highest level for the period in the company's history, compared with $2.33 billion in the year-ago period. An increase in severe storms is the driving force behind those higher losses, CEO Tom Wilson said during the earnings call.
"The fact that you have a more severe storm will increase the severity of the losses that you have," Wilson said. "Whether it's a hailstorm, a tornado or a hurricane, it just causes more damage."
Liberty Mutual had $1.11 billion in third-quarter cat losses, down year over year from $1.39 billion. The company said in its third-quarter discussion of financial results that its cat losses were "higher than expected" and were driven by "several hail and wind-related events that resulted in significantly elevated severity" in the third quarter versus the year-ago quarter.
The Travelers Cos. Inc.'s cat losses rose 66% year over year to $850 million from $512 million, third highest in the analysis. The losses were spawned by weather activity, specifically related to wind and hail events, President of Personal Insurance Michael Klein said during an earnings call.
Klein said there were 19 designated Property Claims Services events specifically related to wind, hail and tornado activity in the quarter, nearly twice the 10-year average and the highest number for a third quarter in more than a decade.
The severe storms in the Midwest also impacted The Hanover Insurance Group Inc. as cat losses totaled $195.8 million, up from $90.1 million last year. The company said in its earnings release that hail and wind damage represented the majority of reported losses and primarily impacted its personal lines segment.
Getting some relief
Chubb Ltd., The Progressive Corp., American International Group Inc. and Arch Capital Group Ltd. all logged lower cat losses compared with the third quarter of 2022 when Hurricane Ian tore through Florida.
Arch Capital had the steepest decrease, percentage-wise, among those companies as losses fell 67.3% to $180 million from $550 million. Progressive, which was hit hard by Ian, saw a 47% decrease in its cat losses in the third quarter to $470.8 million from $883.2 million in the same period last year, and $1.02 billion in the second quarter.
Chubb, despite experiencing weather-related events and wildfires in North America, saw its cat losses fall year over year to $670 million from $1.16 billion, a 42% decrease, and sequentially from $1.48 billion. AIG's losses decreased to $25 million from $600 million in 2022.