TAKING THE PULSE: U.S. property insurers with wide global exposure like American International Group Inc. (AIG) face one of the worst quarters for catastrophe losses in years because of natural disasters in Japan, New Zealand and Australia. Those like Travelers Cos. (TRV) and Allstate Corp. (ALL) that focus more on the U.S. are by no means immune: Severe snow and ice plagued large swaths of the country during the first quarter, and wildfires, harsh winds and hail hit smaller pockets of the country. Catastrophe costs are expected to be higher year-over-year, but the first quarter of last year included weighty disaster losses as well. Both Travelers and Allstate are expected to report better operating earnings in the period, unlike AIG.

Because disaster losses are expected to be extraordinary, analysts at Barclays Capital Equity Research expect investor interest will hone in on pricing outlooks. Lately, commercial-lines pricing was showing signs of leavening, and many insurers had been raising prices in personal lines. Investment income will likely struggle as insurers' large fixed-income portfolios continue to contend with low yields, though positivity in equities may offset that somewhat.

 
   COMPANIES TO WATCH: 
 
   Travelers Cos. (TRV)--Reports April 21

Wall Street Expectations: Analysts surveyed by Thomson Reuters expect $1.55 a share in operating earnings on revenue of $5.5 billion, which excludes investment gains and losses. For the same period a year earlier, operating earnings were $1.22 a share.

Key Issues: In the previous period, Travelers said its existing commercial clients had more to insure for the first time since the third quarter of 2008. Chief Executive Jay Fishman said pricing was modestly better for its commercial coverage, but he cautioned that one quarter isn't sufficient for a trend. In Travelers' smaller consumer unit, it insured a greater number of drivers and homeowners in the fourth quarter even as it raised prices.

 
   Allstate Corp. (ALL)--Reports April 27

Wall Street Expectations: The average analyst estimate predicts 72 cents in operating earnings on $6.2 billion in revenue, compared with 69 cents a year earlier.

Key Issues: The nation's biggest publicly traded home and auto insurer has exasperated some analysts recently with its below-expectations quarterly results. Its auto-insurance unit--which has been a steady source of profit for the company even though it has been losing customers for years--saw margin deteriorate under a sharp jump in claims costs in two states and higher ad spending. The homeowners business continued to lose money in the fourth quarter, largely because of a hailstorm in Arizona that Allstate had more exposure to than rivals. Chief Executive Thomas Wilson said more ad spending was starting to drive new business up, as was emphasizing customer loyalty in employee-incentive programs. The company also expanded online sales of auto coverage.

 
   American International Group Inc. (AIG)--Reports May 5

Wall Street Expectations: The average of two analysts surveyed by Thomson Reuters is for a loss of 21 cents a share on almost $15 billion in revenue. The company reported income of $1.21 a share in the year-earlier period excluding capital and derivative losses and net losses from divested businesses.

Key Issues: With transformational restructuring largely behind it, the huge government-owned insurer has seen investor focus increase on earnings outlook and growth prospects. In the previous period, it swung to a profit on gains from selling businesses that offset a charge to bolster reserves at the Chartis property-and-casualty insurer, its biggest segment by revenue. Chief Executive Robert Benmosche described "continued stabilization and strengthening" of its continuing businesses, although those core insurance businesses turned in a weaker performance. In March, AIG reorganized Chartis and installed risk-management lieutenant Peter D. Hancock as its head. Earlier this month, AIG estimated its P&C business would have to pay $700 million in Japan claims, excluding $500 million in reserves its Japanese operations earlier established.

(The Thomson Reuters estimates and year-earlier results may not be comparable because of one-time items and other adjustments.)

-By Joan E. Solsman, Dow Jones Newswires; 212-416-2291; joan.solsman@dowjones.com
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