Allstate Swings To 3Q Profit On Smaller Catastrophe Losses
DOW JONES NEWSWIRES
Allstate Corp. (ALL) swung to a third-quarter profit as it benefited from far
smaller catastrophe and investment losses than a year earlier.
Shares rose 2.3% to $30.30 in after-hours trading, although the insurance
giant's results fell short of Wall Street's expectations. The stock has more
than doubled from a 14-year low in March but is still down 11% from its 52-week
high in January.
"For the third quarter in a row, customer loyalty increased and we delivered a
double-digit percentage increase in new standard auto business," said Chairman
and Chief Executive Thomas Wilson.
Property and casualty insurers have benefited from a mild hurricane season and
rallying stock markets, though they have had trouble raising rates. Allstate,
the nation's largest publicly held personal-lines insurer, continued to see its
investments improve after earlier this year suffering more than many insurers
from losses on mortgage-related securities.
For the latest quarter, Allstate reported a profit of $221 million, or 41
cents a share, compared with a year-earlier loss of $923 million, or $1.70 a
share. Operating earnings, which exclude investment gains and losses, were 99
cents in the latest quarter, while the prior year had a 35-cent loss.
Revenue rose 3.6% to $7.58 billion.
Analysts estimated operating earnings of $1.01 on revenue of $8.5 billion,
according to a poll by Thomson Reuters.
Catastrophe losses sank 78% from $1.82 billion a year earlier because of
Hurricanes Gustav and Ike.
The property and liability segment's combined ratio, the percentage of each
dollar the company collects in premiums against what it pays out on losses and
expenses, improved to 94.7% from 112.7%. A combined ratio of more than 100%
represents an underwriting loss.
Auto premiums were flat, while homeowners' premiums declined 0.2%. The loss in
Allstate's financial services division narrowed substantially.
Allstate's investment portfolio rose $4.2 billion during the quarter to $100.6
billion.
-By Kathy Shwiff, Dow Jones Newswires; 212-416-2357; kathy.shwiff@dowjones.com
(END) Dow Jones Newswires
11-04-091644ET
Copyright (c) 2009 Dow Jones & Company, Inc.
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