Tailwinds Are Fading for Allstate

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 increase in underwriting margins while social distancing efforts were in effect. Ultimately, though, this benefit waned as drivers returned to the road and the pricing cycle reset at a less attractive point. Furthermore, insurers absorbed higher claims costs due to multiple factors beyond the end of the pandemic. Outside of this issue, Allstate was also buffeted by relatively high catastrophe losses. These trends led the company to losses for 2022 and 2023.