@Allstate.
Full-year 2024 results continue to roll in for some of the biggest names in the US market.
Most saw very good investment results primarily due to interest in fixed income, which still benefits from the “higher-for-longer” interest rate environment. Previous to announce were Travelers, Chubb and W.R. Berkley.
However, like with other results, this could begin to dissipate as quarters from when the US Federal Reserve made cuts that will be reflected in lower interest rates are recorded.
Large nat cat costs could also dent profitability.
Below, is a selection of some of the larger companies to announce results over the past week.
Massachusetts-based The Hanover Insurance Group has announced a net investment income of $372.6 million, up 12.2% from 2023 for its full-year 2024 results.
"We benefited from higher cash flows and earned yields,
as well as thoughtful portfolio repositioning."
These were driven primarily by higher bond reinvestment rates and higher cash flows, partially offset by lower partnership income; net investment income from fixed maturities up 14.5% in 2024.
"Our net investment income increased 23% for the quarter and 12% for the year, as we benefited from higher cash flows and earned yields, as well as thoughtful portfolio repositioning,” said Jeffrey Farber, executive vice president and Chief Financial Officer at The Hanover.
For Q4 2024, the net investment income of $100.7 million, which was up 23.4% from the prior-year quarter. Net premiums written increased by 7.4%.
For Q3 last year, it said its investment income was $91.8 million, which was up 9.0% from the prior-year quarter. This was “primarily due to higher bond reinvestment yields; net investment income from fixed maturities up 15.4% from the prior-year quarter” it said.
Elsewhere, Markel Corp said its investing results “benefited from more favourable market value movements” within its equity portfolio in 2024 compared to 2023, with the public equity portfolio returning over 20% in 2024. In 2024, it said net investment income for 2023 was $734.5 million, compared to $446.7 million in 2022. Net investment gains for 2023 were $1.52 billion compared to a loss of $1.59 billion in 2022.
Net investment income increased 25% in 2024, reflecting a higher yield and increased investment holdings. Net investment income for 2024 was $913.4 million compared to $729 million for the full-year results in 2023.
“Net investment income increased in 2024, primarily driven by higher interest income on fixed maturity securities due to a higher yield and higher average holdings of fixed maturity securities during 2024 compared to 2023, as well as higher yields on cash and short-term investment,” said the company’s press statement. “In 2024, we continued to allocate cash to money market funds, short-term investments and fixed maturity securities to take advantage of higher interest rates.”
Allstate, one of the largest insurance brands in the world, also said it saw great investment results for 2024. For the full year, total revenues were $64.1 billion, 12.3% above the prior year.
“Investment income increased due to repositioning into higher yielding fixed income securities, portfolio growth and stronger performance-based results.”
Total revenues of $16.5 billion in the fourth quarter of 2024 were $1.7 billion or 11.3% higher than the prior-year quarter.
“This performance reflects successful risk and return management,” said Tom Wilson, Chair, President and CEO of The Allstate Corporation. “Investment income increased to $3.1 billion in 2024, 24.8% above the prior year due to repositioning into higher yielding fixed income securities, portfolio growth and stronger performance-based results.”
Last year, the company said it had a strong Q4 2023 due to auto insurance and mild weather causing fewer natural catastrophe events. Full-year net investment income was $2.478 billion compared to $2.403 billion in 2022. For Q4, the net investment income was $604 million in 2023, compared to $557 million in 2022.
Wilson said that the impact of the January California wildfires and related losses were expected to be about $1.1 billion, pre-tax, net of reinsurance, reflecting a decision to reduce market share beginning in 2007 and a comprehensive reinsurance program.
For investments specifically, there was a net investment income of $833 million in Q4 2024, an increase of $229 million from the prior year quarter due to repositioning into higher yielding fixed income securities, portfolio growth, and “stronger performance-based results”.
Net losses on investments and derivatives were $201 million in the fourth quarter of 2024, compared to losses of $77 million in the prior year quarter. Net losses in the fourth quarter of 2024 were driven by valuation declines on equity investments and losses on the sales of fixed-income securities.
The total return on the investment portfolio was (1.1) % for the fourth quarter and 3.8% for the full year 2024.
More results will come in the next few weeks…
