(Updates share price in the fifth paragraph.)
June 16 (Bloomberg) -- Allstate Corp., the largest publicly traded U.S. home and auto insurer, had pretax losses of $600 million last month from natural disasters such as tornadoes and hailstorms, less than in April.
Seven events contributed to the claims in May, bringing total losses tied to disasters to $2 billion in the first two months of the quarter, Northbrook, Illinois-based Allstate said today in a statement. That compares with $636 million in catastrophe costs in the entire second quarter last year.
An above-average number of tornadoes striking the U.S. led to higher claims for insurers, including Travelers Cos., MetLife Inc. and policyholder-owned State Farm Mutual Automobile Insurance Co. AIR Worldwide, a modeling firm, projected insured losses of about $7.7 billion to $12.5 billion industrywide from two weeks of storms in April and May.
“The good news is, from Allstate’s perspective, the losses were less than they were in April,” said Paul Newsome, an analyst with Sandler O’Neill and Partners LP, in an interview.
Allstate advanced 7 cents to $29.55 at 4 p.m. in New York Stock Exchange composite trading. The insurer has slipped 7.3 percent this year, matching the decline in the 24-company KBW Insurance Index.
A tornado that tore through Joplin, Missouri, on May 22 killed more than 125 people, making it the single deadliest U.S. storm in at least 60 years. The National Oceanic and Atmospheric Administration said that 1,482 tornadoes were reported in the U.S. this year through June 15, up from 1,282 in all of 2010.
Allstate said last month that catastrophes, including tornadoes in Alabama, cost the company $1.4 billion in April. Chief Executive Officer Thomas Wilson has been raising rates for homeowners’ coverage and scaling back the insurer’s risk of losses from natural disasters by curtailing the sale of policies in the most vulnerable regions and buying reinsurance.
Travelers reduced share repurchases after saying that about $1 billion in costs tied to storms will wipe out second-quarter profit. MetLife, which relies mostly on life insurance and retirement products, said natural disasters in April and May probably cost $160 million to $180 million after tax at its auto and home business.
--Editors: Dan Reichl, Dan Kraut
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