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Allstate 4Q profit doubles as disaster losses shrink

February 5, 2014

By Becky Yerak, Chicago Tribune

Feb. 05 -- Allstate Corp. said Wednesday its profit more than doubled in the fourth quarter as losses from catastrophes declined by about 90 percent. The Northbrook -based home and auto insurer said net income in the period was $810 million , or $1.76 a share, compared with $394 million , or 81 cents a share, in the same period a year ago. Operating income, which excludes most gains and losses, was $1.70 a share. It beat the $1.37 average estimate of analysts surveyed by Bloomberg . The number of insurance policies on the books grew overall for the company's three key brands -- Allstate , Encompass and Esurance -- both from the year-ago quarter and the prior quarter. Chief Executive Officer Tom Wilson cited such factors as "strong marketing" as well as a smaller decline in homeowners' policies on the books. As Allstate has sought to limit its exposure in homeowners' insurance, its policies have been falling for years. While they fell to 6.1 million in the fourth quarter of 2013 from 6.2 million in the fourth quarter of 2012, the latest homeowners' number was virtually unchanged from the third quarter of 2013. Catastrophe losses were $117 million in the fourth quarter, compared with $1.06 billion in the same period a year ago. The total return of Allstate stock over the past year is 14 percent, compared with 22 percent for the 21-company Standard & Poor's 500 Insurance Index. Allstate's revenues rose 3 percent to $8.79 billion for the quarter. Allstate bought Esurance in 2011 to better compete against online insurers. Although the unit is selling more policies under Allstate , Esurance is still losing money as an underwriter. An insurer loses money on underwriting when its premiums aren't enough to cover claims and expenses. -- Twitter: @beckyyerak ___ (c)2014 the Chicago Tribune Visit the Chicago Tribune at Distributed by MCT Information Services

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Source: Chicago Tribune (IL)

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