Allstate Has the Wind at Its Back for the Moment

The pandemic boosted personal auto results, as quarantine efforts led to a sharp decline in miles driven and claims, and Allstate 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 restarted the pricing cycle at a less attractive point. Furthermore, insurers absorbed higher claims costs due to multiple factors beyond the impact of drivers returning to the road. Outside of this issue, Allstate was buffeted by relatively high catastrophe losses. These trends led the company to losses for 2022 and 2023.