Allstate 2011 Annual Report Download - page 117

expenses and catastrophe losses, including prior year reestimates for catastrophes, partially offset by average earned
premiums increasing faster than loss costs. Other personal lines underwriting income increased 6.7% to an
underwriting income of $95 million in 2010 from an underwriting income of $89 million in 2009 primarily due to lower
unfavorable reserve reestimates. For further discussion and quantification of the impact of reserve estimates and
assumptions, see the Application of Critical Accounting Estimates and Property-Liability Claims and Claims Expense
Reserves sections of the MD&A.
Allstate Protection experienced underwriting income of $1.03 billion during 2009 compared to $189 million in 2008
primarily due to decreases in homeowners underwriting loss, partially offset by decreases in standard auto underwriting
income. Homeowners underwriting loss decreased 89.4% to an underwriting loss of $125 million in 2009 from an
underwriting loss of $1.18 billion in 2008, primarily due to lower catastrophes losses, partially offset by increases in
homeowner claim frequency and claim severities excluding catastrophes. Standard auto underwriting income
decreased 20.9% to $987 million in 2009 from $1.25 billion in 2008, primarily due to increases in auto claim frequency
and lower premiums earned.
Catastrophe losses in 2010 were $2.21 billion as detailed in the table below. This compares to catastrophe losses
in 2009 of $2.07 billion.
We define a ‘‘catastrophe’’ as an event that produces pre-tax losses before reinsurance in excess of $1 million and
involves multiple first party policyholders, or an event that produces a number of claims in excess of a preset, per-event
threshold of average claims in a specific area, occurring within a certain amount of time following the event.
Catastrophes are caused by various natural events including high winds, winter storms, tornadoes, hailstorms, wildfires,
tropical storms, hurricanes, earthquakes and volcanoes. We are also exposed to man-made catastrophic events, such
as certain acts of terrorism or industrial accidents. The nature and level of catastrophes in any future period cannot be
reliably predicted.
Catastrophe losses related to events that occurred by the size of the event are shown in the following table.
2010
($ in millions)
Claims Combined Average
Number and claims ratio catastrophe
of events expense impact loss per event
Size of catastrophe
Greater than $250 million 1 1.1% $ 355 16.1% 1.4 $ 355
$101 million to $250 million 4 4.4 610 27.6 2.3 153
$50 million to $100 million 8 8.9 511 23.2 2.0 64
Less than $50 million 77 85.6 894 40.5 3.4 12
Total 90 100.0% 2,370 107.4 9.1 26
Prior year reserve reestimates (163) (7.4) (0.6)
Total catastrophe losses $ 2,207 100.0% 8.5
Catastrophe losses incurred by the type of event are shown in the following table.
2010 2009 2008
($ in millions)
Number Number Number
of events of events of events
Hurricanes/Tropical storms $ 15 1 $ 48 1 $ 1,381 5
Tornadoes 174 7 384 4 628 19
Wind/Hail 1,908 74 1,561 67 960 81
Wildfires 15 1 83 5 169 9
Other events 258 7 162 5 79 9
Prior year reserve reestimates (163) (169) 125
Total catastrophe losses $ 2,207 90 $ 2,069 82 $ 3,342 123
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MD&A