Is This Insurer's Loss Signaling a New Trend?
For the first time in a decade, Allstate (NYSE: ALL) announced an underwriting loss in its annual earnings. Despite raising premiums by double digits, the insurer failed to keep up with inflationary pressures in the economy.
Its performance signals a more extensive problem across the industry. Insurers are grappling with rising prices and increasing claims costs, sending ripple effects across the economy. For consumers, this means higher prices. For investors, it means insurers have pricing power on their side. Here's how Allstate plans to address its recent shortcomings and what to expect going forward.
Last year Allstate posted a net loss of $1.4 billion -- a drastic swing after posting a net profit of $1.5 billion just one year earlier. The insurer faced a challenging environment and saw costs to resolve claims rise dramatically.
Source Fool.com
