DOW JONES NEWSWIRES
Allstate Corp.'s (ALL) fourth-quarter earnings fell 43%, falling
short of analysts' estimates, as the company's catastrophe losses
jumped sharply.
Shares dropped 5% to $30.75 in after-hours trading. As of the
close, the stock had risen 13% the past year.
The company's results "continued to be negatively impacted by
high catastrophe losses and increased frequency of auto insurance
claims," said Chairman and Chief Executive Thomas Wilson. "While we
were able to increase auto insurance new business levels at the end
of the year, this was not enough to offset lower customer renewals
reflecting actions to maintain auto profitability in several large
states."
The nation's biggest personal-lines insurer has been stung of
late by higher claims costs that have dropped its operating income.
The company on Tuesday said it would exit its banking business,
selling its deposits to Discover Financial Services (DFS).
Allstate reported a profit of $296 million, or 55 cents a share,
down from $518 million, or 96 cents, a year earlier. Operating
earnings, which strip out investment gains and losses, fell to 50
cents from $1.09. Premiums written fell 0.6% to $6.24 billion.
Analysts polled by Thomson Reuters had most recently forecast
earnings of 88 cents on $6.28 billion of premiums written.
The company's property-liability combined ratio--a gauge of how
much was paid out as losses or expenses compared with each dollar
collected in premiums--rose to 100.8% from 93.2%.
-By Nathan Becker, Dow Jones Newswires; 212-416-2855;
nathan.becker@dowjones.com;