Southern Tornadoes Help Push Allstate April Losses to $1.4 Billion

The Allstate Corporation notified the public on Thursday that widespread damage from severe storms in the South are likely to help push the company’s April catastrophic losses up to $1.4 billion.

The auto insurance company saw “more than 100,000 claims reported to date in the areas affected by these catastrophes.”

Sign in front of Allstate corporate headquarters

Photo Courtesy of Allstate

Out of those catastrophes, the tornadoes that hit Arkansas, Alabama, Georgia and Virginia accounted for the largest losses, the company said.

Other insurers and state regulators have also been quantifying the effects of the storms’ devastation.

The Wall Street Journal reported that State Farm Mutual Automobile Insurance Co. had received nearly 12,800 auto claims from storm-ravaged areas as of midday April 29.

As for damages in the state of Alabama alone, risk-modeling company AIR Worldwide estimated this week that tornadoes that touched down at the end of April would end up causing “between $1.9 billion and $2.6 billion,” according to the Alabama Department of Insurance.

More than 2,200 Missouri auto insurance claims were filed by St. Louis policyholders alone after tornadoes hit the state at the end of April.

New Disclosure Policy for Allstate

Allstate also said in the announcement that it will provide “monthly and quarter-to-date estimates for catastrophe losses when monthly catastrophe losses are estimated to exceed $150 million.”

The company says the move is to keep investors informed and that it has had catastrophe losses over $150 million “in about 30 percent of months.”

Allstate’s stock dropped 3.6 percent in early February following a report of net-income slippage in its fourth-quarter 2010 results after the company experienced hundreds of millions of dollars in unexpected losses.

The stock appeared to be mostly unchanged hours after the Thursday announcement. The $1.4 billion in losses’ effect on overall income is yet to be seen.

About John Pirro
John Pirro is a licensed fire and casualty insurance agent specializing in various aspects of the auto insurance industry. He worked in the auto body repair industry before taking a reporting position at Online Auto Insurance News.

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