(Bloomberg) -- A widespread decline in driving and car accidents that began as the coronavirus erupted in the U.S. in March is shifting, now closely tracking regional flareups of the pandemic, according to Allstate Corp.
“It's almost tied to whether it's a hotspot, people sequester more, or if they're wide open,” Chief Executive Officer Tom Wilson said Tuesday in a phone interview. “Florida went up for a while, and now Florida's back down. It follows the virus.”
The disappearance of cars from roadways during the pandemic has led to fewer accidents, benefiting Allstate and other insurers and prompting them to return some premiums to customers. The trend helped fuel a 6.1% increase in adjusted profit for Allstate in the second quarter, according to a statement Tuesday.
“You're continuing to see frequency of accidents be lower than it has been in the past,” Wilson said.
Allstate shares, which climbed as high as 4.5% in New York Wednesday, were little changed at 10:25 a.m. Earnings benefited from the “extremely favorable frequency trends,” Wells Fargo & Co analyst Elyse Greenspan wrote in a note to clients.
In July, Allstate struck its largest deal yet with an agreement to buy National General Holdings Corp. for $4 billion, helping deepen its ties to the independent agent channel. Chief Financial Officer Mario Rizzo said in the statement Tuesday that the deal won't affect its $3 billion share repurchase program, which the company expects to complete by the end of next year.
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