Allstate Corp. (ALL) swung to a first-quarter profit after large
investment losses a year earlier, but the insurer's core results
fell more than analysts expected.
The nation's biggest publicly traded personal-lines insurer
reported catastrophe losses jumped 26% to $648 million. Lately, the
company had been holding back in its homeowners' insurance unit to
lower exposure to catastrophes.
Other catastrophe-prone insurers have taken big hits in the
first quarter because of disasters such as storms on the U.S. East
Coast, a large earthquake in Chile and damaging windstorms in
Europe. The latest period of soaring catastrophe losses follows a
period of strengthening for insurers due to a rally in equities and
little damage from weather.
Realized investment losses narrowed to $348 million from $359
million. Allstate has been benefiting from the stock market rally
buoying its investment portfolio and in turn its bottom line, while
its credit write-downs simultaneously subsided.
Allstate posted a profit of $120 million, or 22 cents a share,
compared with a year-earlier loss of $274 million, or 51 cents a
share, which included significant investment losses. Operating
earnings, which excludes investment gains or losses, fell to 69
cents from 84 cents. Analysts surveyed by Thomson Reuters predicted
79 cents.
Revenue decreased 1.7% to $7.75 billion.
Auto premiums written increased 1.1%, while homeowners' premiums
written grew 1.5%.
The property and liability segment's combined ratio--the
percentage of each dollar collected in premiums that the company
pays out as losses or expenses--rose to 98.9% from 96.8%.
Allstate shares closed Wednesday at $33.77 and weren't moving
after hours. The stock has risen 52% in the last year,
outperforming the broader market's growth.
-By Joan E. Solsman, Dow Jones Newswires; 212-416-2291;
joan.solsman@dowjones.com