Allstate Records $630M In Losses From Hurricane Helene, Other Insurers Report Significant Losses As Damage Mounts

Allstate Corp ALL reported $630 million in catastrophe losses related to Hurricane Helene alone. The company reported total estimated catastrophe losses of $889 million for September, more than twice the amount reported for the same month last year. 

What Happened: The impact of Hurricane Helene has led to a substantial increase in Allstate’s losses for the third quarter of 2024 which the company reported as $1.7 billion, up from $1.18 billion in the same quarter in 2023. 

Other insurance companies affected by the recent hurricanes include Progressive Corp PGR, which recorded $563 million in catastrophe in September as a result of Hurricane Helene. Travelers Companies, Inc. TRV reported catastrophe losses of $939 million for the third quarter of 2024 due to Hurricane Helene, an increase of $89 million compared to the same period last year.

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Moody's Risk Management Solutions, or RMS, said it expects combined total insured losses from Hurricane Helene and Hurricane Milton to range between $35 billion and $55 billion.

According to a report from Insurtech Insights, Hurricanes Helene and Milton contributed to total losses for Florida insurers of more than $100 billion for the fifth consecutive year, comparable to the losses from Hurricane Katrina in 2005. 

Why It Matters: Citizens, Florida's state-backed insurer of last resort, has seen a surge in policyholders in recent years, especially after recent destructive hurricanes.

The rapid influx raises serious concerns about its financial stability as it has experienced massive underwriting losses, amounting to hundreds of millions of dollars. Citizens estimates it is currently at a 38% rate inadequate, meaning it needs a 38% rate increase to be solvent. However, Florida law caps its annual rate increases at 10%

Citizens is transferring more than 648,000 policies to private insurers, per Click Orlando. These companies are also experiencing financial strain due to increased claims, likely leading to higher premiums and reduced coverage availability.

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