Allstate's continued synergies from decent capital position,
divestment of redundant operations, pricing discipline and
diversified mix aid efficient capital deployment, reflected by new
share buybacks. Its third-quarter earnings surpassed the Zacks
Consensus Estimate but missed the year-over-year mark. Higher
catastrophe losses and claims expenses marred underwriting results.
Improvement in P&C premiums and net realized investment gains
were partially offset by lower net investment income and life,
annuity premiums and contract charges. Operating cash flow weakened
further, though financial leverage, book value and ROE improved.
Allstate's strategy of minimizing risk exposure and maximizing
returns from its industry-leading position are likely to mitigate
cyclical declines and enhance earnings potential in the long run,
justifying our Neutral recommendation.
Founded in 1931 and headquartered in Northbrook, Illinois, The
Allstate Corporation is the second-largest property-casualty
(P&C) insurer and the largest publicly-held personal lines
carrier in the U.S. The company also provides a range of life
insurance and investment products to its diverse customer base.
Allstate provides insurance products to approximately 16 million
households through more than 12,000 exclusive agencies and
financial specialists in the U.S. and Canada. The company operates
through its subsidiaries - Allstate Insurance Company, Allstate
Life Insurance Company and affiliates. As of Dec 31, 2013, Allstate
had approximately 38,800 full-time employees and 600 part-time
The company primarily operates through three reportable
segments: Allstate Property-Liability, Allstate Financial Group and
Corporate & other.
Property-Liability primarily underwrites policies relating to
private passenger automobile and homeowners' insurance in the U.S.
and Canada. The company sells Allstate-branded policies through
Allstate agencies and through the Internet, other than selling
Encompass, Esurance and Answer Financial brand policies through its
network of independent agencies. Allstate acquired Esurance and
Answer Financial from White Mountains Insurance Group Ltd. for
approximately $1 billion in Oct 2011, in an attempt to expand its
online home-auto sales.
Allstate Financial Group provides life insurance, retirement
policies and structured financial products to individuals and
institutions through Allstate agencies, independent agencies,
financial institutions and broker-dealers. This segment also offers
banking products and services to customers through the Allstate
Corporate & Other consists of conducting holding company
activities and certain non-insurance operations.
Meanwhile, Allstate ceased the operations of Allstate Bank in
2011, after receiving regulatory approval to dissolve it. In Mar
2012, the company also annulled the bank's charter and as of Jul 1,
2012, Allstate is no longer a savings and loan holding company.
The Allstate Corp. (ALL): Read the Full Research
Want the latest recommendations from Zacks Investment Research?
Today, you can download 7 Best Stocks for the Next 30 Days.
Click to get this free report
ALLSTATE CORP (ALL): Free Stock Analysis Report
To read this article on Zacks.com click here.