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Insurance carriers Q3 earnings call round-up

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Wildfire and hurricane season combined with the continuing chip and supply shortages hit insurers hard this past quarter, with most carriers dealing with large cat losses: 

  • The wildfire season has been growing longer and more destructive, with more than 42,299 fires scorching over 6 million acres across the western U.S. 
  • Policyholders are driving more in off-hours, and many are driving faster, resulting in higher-speed accidents and more serious vehicle damage and injuries.
  • The consumer auto price index for vehicle-repair costs increased 4.8% compared to the same period last year.

Here’s a round-up of some leading carriers’ latest financial results:

Allstate

The insurer has been expanding its presence in the independent agent channel with its acquisitions of National General and SafeAuto. This quarter, the leading carrier sold Allstate Life Insurance Company of New York to Wilson Re and Allstate Life Insurance Company entity to Blackstone for a combined cost of $4.4 billion. Allstate also sold its portfolio of $570 million of loans to Wintrust Financial earlier this month, making Wintrust the preferred lender to Allstate’s agents. 

Read the full earnings release.

Key Numbers

  • Combined ratio: 105.3, 13.7 point increase compared to Q3 2020
  • Net income: $508M, a 52.2% decrease compared to Q3 2020 
  • Catastrophe losses: $1.27B, a 28.2% increase compared to Q3 2020 
  • P&C written premiums: $11B, a 16.7% increase compared to Q3 2020 
  • Total revenue: $12.5B, a 16.9% increase compared to Q3 2020

Chubb

Overall, Chubb had a strong Q3, reporting outstanding premium revenue growth globally and the company’s strongest organic growth of its written P&C net premiums since 2004. Chubb also reported that the majority of its global personal lines growth was due to the 2.5% increase in homeowners insurance. The carrier also reported $806 million of catastrophic losses were from Hurricane Ida and recently announced that the company would be pulling out of the California homeowners insurance market due to the volatility of the wildfires.

Read the full earnings release.

Key Numbers

  • Combined ratio: 77, a 2.2 point increase compared to Q3 2020 
  • Net income: $1.83B, a 53% increase compared to Q3 2020 
  • Catastrophe losses: $1.1B, a 24% increase compared to Q3 2020
  • P&C net written premiums: $617M, up 58% compared to Q3 2020

The Hanover

The Hanover limited its Q3 cat losses by reducing its exposure to parts of the country most impacted by wildfires and hurricanes and sustained lower losses compared to the rest of the industry. The carrier also increased rates for its core commercial lines sector by 6.9% and its personal lines sector by 2.1%. During this period, the insurer’s personal lines business grew to $548.4 million in net premiums, up from $508 million during the same period last year. 

Read the full earnings release.

Key Numbers

  • Combined ratio: 103.8, a 13 point increase compared to Q3 2020 
  • Net income: $34M, a 71.4% decrease compared to Q3 2020 
  • Catastrophe losses: $152.5M
  • Personal lines written premiums: $548.4M, an 8% increase compared to Q3 2020
  • Total revenue: 1.27B, a 2% increase compared to Q3 2020

The Hartford

The Hartford’s overall numbers exceeded expectations this quarter. Much of the company’s earnings this quarter were powered by its commercial lines sector which is significantly larger than the company’s personal lines sector. The carrier also enacted an 8% rate hike in premiums costs for homeowners renewals this quarter. 

Read the full earnings release.

Key Numbers

  • Combined ratio: 87.2, a 6.5 point increase compared to Q3 2020 
  • Net income: $476M, a 5% increase compared to Q3 2020 
  • Catastrophe losses: $300M, a 35% increase compared to Q3 2020 
  • P&C written premiums: $765M, down 2% compared to Q3 2020 
  • Consolidated total revenue: $5.68B, up 0.1% compared to Q3 2020

Liberty Mutual

Liberty Mutual suggested that the growth in its personal lines and small business operations was due to higher retention and an increase in average written premiums due to rate increases. The private passenger auto sector saw net written premiums rise 5% to nearly $3.9B, and homeowners insurance saw premiums jump by 13.4% to nearly $2.2B. 

The insurer announced that it would be migrating its captive agents to a new entity called Comparion Insurance Agency, which will provide consumers with expert advice and tailored insurance options from several carriers. In the meantime, Liberty Mutual is hiring sales professional talent across the country and plans to be fully operational next year. 

Read the full earnings release.

Key Numbers

  • Combined ratio: 104.4, a 0.8 point increase compared to Q3 2020 
  • Net income: $721M, an 81.6% increase compared to Q3 2020 
  • Catastrophe losses: $1.21B, a 23.9% increase compared to Q3 2020
  • Net written premiums: $7.7B, a 5.4% increase compared to Q3 2020 
  • Total revenue: $12.3B, an 8.8% increase compared to Q3 2020

Progressive

The carrier stated that it received a majority of its losses in New Jersey, New York and Pennsylvania, with two-thirds of the losses being in the vehicle business. Prior to releasing September results, Progressive announced that it would be cutting back its advertising spending and increasing rates in August. Despite that, personal policies in force grew by 8% to about $23M by the end of the quarter. 

Read the full earnings release.

Key Numbers

  • Combined ratio: 100.4, a 12.6 point increase compared to Q3 2020
  • Net income: $118.5M, a 92% decrease compared to Q3 2020 
  • Catastrophe losses September: $167.6M
  • P&C written premiums: $12.4B, a 13% increase compared to Q3 2020
  • September total revenue: $35.2B, a 13% increase compared to September 2020

Travelers

Travelers posted an underwriting loss of $163M in its personal lines business this quarter, attributing the $200M loss compared to the same period the year prior to more auto accidents and higher cat losses. The carrier also reported that auto and home policies in force increased to record levels this quarter, and suggests that catastrophe losses primarily resulted from Hurricane Ida and other severe storms. 

Read the full earnings release.

Key Numbers

  • Combined ratio: 104.6, an 18.2 point increase compared to Q3 2020
  • Net income: $113M, a 15% decrease compared to Q3 2020 
  • Catastrophe losses: $317M, a 6% increase compared to Q3 2020
  • P&C written premiums: $3.4B, a 7% increase compared to Q3 2020
  • Total revenue: $8.8B, a 6% increase compared to Q3 2020
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