Allstate Corp (ALL) shares fell 2.5% in extended trading on Wednesday after the company’s fourth-quarter earnings dropped 52% due to higher catastrophe losses.

The insurer reported a net income of $566 million, or $2.11 per share, for the first quarter, compared to $1.19 billion, or $4.46 per share, in the same quarter a year earlier.

Its adjusted net income of $3.53 per share exceeded Wall Street’s expectations of $2.53 per share.

The company’s revenue increased 7.8% to $16.45 billion compared to the previous year. Analysts, on average, expected revenue of $16.36 billion.

Allstate’s property liability earned premiums rose 8.7% to $14 billion compared to the year-ago quarter, primarily driven by higher average premiums.

However, the firm’s catastrophe losses ballooned to $2.2 billion during the first quarter from $731 million in the year-ago quarter, primarily due to California wildfires and March winds.

Allstate Protection homeowners insurance generated an underwriting loss of $451 million compared to an income of $564 million in the year-ago quarter.

The January wildfires in Los Angeles have been described by many as the costliest in history and has led to a decline in profit for other insurers too, including Chubb and WR Berkley.

Allstate’s auto insurance unit premiums rose 5% to $9.84 billion, aided by rate increases partially offset by a decline in policies in force.

Its net investment income rose to $854 million from $764 million in the year-ago quarter, driven by repositioning into higher-yielding fixed-income securities.

Retail sentiment on Stocktwits was in the ‘bearish’ (28/100) territory, while retail chatter was ‘extremely low.’