UPDATE: Allstate Profit More Than Doubles As Weather Cooperates

Allstate Corp. (ALL), the largest publicly traded home and auto insurer in the U.S., more than doubled its fourth-quarter profit as the company won a rare reprieve from the severe weather that has dragged down results in recent years.

Operating profit also exceeded Wall Street expectations, and Allstate shares jumped 3.6% to $30.35 in late trading after the results were released.

Nineteen catastrophes cost the company about $216 million in the fourth quarter, but the insurer also cut its estimate of costs related to disasters that struck earlier last year. The re-estimation reduced the fourth-quarter hit to the bottom line to $66 million before taxes.

A long roster of severe natural disasters across the U.S. have plagued Allstate and its rivals in recent years, and prompted insurers to raise the price of home insurance in many areas.

Allstate's $2.34 billion in catastrophe costs in the second quarter were the most since Hurricane Katrina hit in 2005. But the $537 million from last years fourth quarter and $1.08 billion in the third quarter of 2011 were also well above average.

Overall, Allstate posted net income of $724 million, or $1.43 a share, in the latest period, up from $296 million, or 55 cents a share, a year earlier. Operating profit, which excludes some investment results, jumped to $1.48 a share from 50 cents.

Analysts surveyed by Thomson Reuters had expected operating earnings of 95 cents a share on average.

Underwriting income for its main auto-insurance brand was $203 million, while its newly acquired Esurance brand had an underwriting loss of $37 million. Allstates's home-insurance operation swung to an underwriting profit of $451 million from a loss of $23 million in the same period a year earlier.

Premiums written increased 2.9% to $6.43 billion.

The company kept its guidance for 2012 unchanged from 2011, predicting that its underlying underwriting profit at its property-casualty operation would be between 9 cents to 12 cents for every dollar it collects in premiums.

That underlying profit margin was 10.7 cents for all of 2011. The underlying margin excludes several factors, including catastrophes, investment returns and adjustments to reserves.

Operating income at Allstate Financial, its life insurance and retirement unit, rose 33% to $138 million as premiums and contract charges rose. Life insurance applications issues through Allstate agencies increased 43% in the fourth quarter compared to the same period a year earlier as the company pushed agents to sell the product.

In November, Allstate unveiled a new $1 billion stock buyback program. The company bought $106 million of its own shares in the quarter.

-By Erik Holm and Joan E. Solsman, Dow Jones Newswires; 212-416-2892; erik.holm@dowjones.com

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