Aug. 05--Allstate customers are crashing their cars harder and more often -- and the insurance giant is paying the price.
The Northbrook-based insurer late Monday blamed an "increased frequency and severity of auto accidents" for lower-than-expected earnings in the second quarter of 2015.
Earnings per share fell 38 percent from $1.01 over the same period last year to $0.63.
And that sent the firm's stock price tumbling Tuesday, when it fell more than 10 percent, closing at $62.34.
Allstate said the increase in auto accidents was "broad-based by state, risk class, rating plans and the maturity of the business." In other words, an across-the-board increase in wrecks.
While Allstate didn't specify the cause, U.S. Department of Transportation data show the total number of miles Americans drive is up 3 percent over the last 18 months. Low gas prices -- down more than 80 cents over the last year nationwide -- and soaring auto sales likely contributed to the problem.
Customers can expect to see that increased risk reflected in their insurance bills. Allstate raised its rates by 1.5 percent in 34 states in the second quarter and said it expects further raises to follow. Including its Esurance business, rates went up 4.8 percent over the last year.
