Allstate Corp.'s (ALL) third-quarter profit surged 66% on
investment impacts as core earnings dropped much deeper than
analysts expected as claims costs rose.
Shares were down 3.8% at $31.25 after hours.
The nation's biggest publicly traded personal-lines insurer had
lower realized capital losses, which helped the company's
unadjusted bottom line improve. But operating profit, which strips
out investment effects, dropped sharply.
The insurance sector has remained inhospitable to price
increases because of slow economic recovery and competition. Over
the last year, Allstate increased prices, bucking the trend of
rivals.
Allstate posted a profit of $367 million, or 68 cents a share,
compared with $221 million, or 41 cents a share, a year earlier.
Operating earnings, which excludes investment gains or losses, fell
to 83 cents from 99 cents as premiums written fell 0.6% to $6.77
billion.
Analysts surveyed by Thomson Reuters predicted operating
earnings of 98 cents on premiums written of $6.84 billion.
Auto premiums written fell 0.5%, while homeowners' premiums
written increased 2.4%.
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 95.9% from 94.7%.
-By Joan E. Solsman, Dow Jones Newswires; 212-416-2291;
joan.solsman@dowjones.com