Reuters logo
UPDATE 1-Allstate profit beats estimates as premiums rise
February 5, 2015 / 12:06 AM / 3 years ago

UPDATE 1-Allstate profit beats estimates as premiums rise

(Adds details, background, CEO comment)

Feb 4 (Reuters) - Allstate Corp, the largest publicly traded home and auto insurer in the United States, reported a higher-than-expected quarterly profit as it earned more premiums, and the company said it would buy back $3 billion in shares.

Allstate’s shares, however, fell 2.5 percent in extended trading after the company said claim frequency for auto insurances rose in the fourth quarter ended Dec. 31. The stock hit an all-time high in regular trading on Wednesday.

Allstate’s underlying, or adjusted, combined ratio fell by 2 percentage points to 89.5 during the quarter.

Combined ratio is an indicator of the total claims and expenses incurred as a percentage of premiums earned. A combined ratio over 100 indicates that an insurer has an underwriting loss.

“Although Allstate had an ok quarter, investors’ focus will be on management’s discussion on change in claim frequency,” Macquarie Securities analyst Amit Kumar said.

The company maintained its underlying combined ratio outlook of 87-89 percent for 2015.

On an operating basis, Allstate reported fourth-quarter earnings of $1.72 per share, beating analysts’ average estimate of $1.68 per share, according to Thomson Reuters I/B/E/S.

The insurer has raised insurance premiums aggressively in the last few years without any significant loss to its share of the highly competitive home and auto insurance markets.

Property-liability premiums earned during the quarter rose 4.8 percent to $7.35 billion, while property-liability insurance claims rose about 7.8 percent to $4.62 billion.

Catastrophe losses decreased about 18.8 percent to $95 million.

Property and casualty insurers’ ability to raise premiums has slowed, mainly due to a lack of major catastrophe losses in recent times.

Allstate also increased its quarterly dividend by 7 percent to 30 cents per share.

Rival Travelers Companies Inc reported better-than-expected results last week, partly helped by lower claims. (Reporting By Sudarshan Varadhan; Editing by Joyjeet Das)

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below