Allstate Will Reduce Equity, Interest Rate Hedges In 2011 -CEO
February 10 2011 - 10:11AM
Dow Jones News
Insurer Allstate Corp. (ALL) plans to reduce the size of a
hedging program designed to protect its $100 billion investment
portfolio from steep declines.
The insurer spent "over several hundred million dollars" on the
hedges in 2010 to shield the portfolio from sharp interest rate
increases or a substantial drop in equities, Chief Executive Tom
Wilson said on a conference call with analysts and investors
Thursday.
Allstate first put many of the hedges in place after $8.8
billion in pre-tax unrealized capital losses in 2008. But the
portfolio has recovered substantially from the market lows brought
on by the financial crisis.
"Given the substantial increases in our capital levels in 2010,
we will reduce the size of these programs in 2011," Wilson said on
the call, which was convened to discuss fourth-quarter results.
-By Erik Holm, Dow Jones Newswires; 212-416-2892;
erik.holm@dowjones.com
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