Allstate profit sinks on disaster losses
(Reuters) - Allstate Corp (ALL.N) posted a sharply smaller profit for the third quarter, as the largest publicly traded home and auto insurer in the United States lost more than $1 billion due to natural disasters.
Allstate also said it completed a $1 billion share buyback during the quarter. Chief Executive Tom Wilson said in an interview the company finished buying back shares ahead of schedule and that it will make a decision in the current quarter on whether to launch a new buyback.
The company on Monday posted a profit of $165 million, or 32 cents per share, compared with a year-earlier profit of $367 million, or 68 cents per share.
On an operating basis, excluding investment results, the company posted a profit of 16 cents per share. Analysts polled by Thomson Reuters I/B/E/S on average expected earnings per share of 8 cents.
Those analyst expectations had come down sharply in the last month as a result of the company's disaster losses. According to Thomson Reuters data, the average earnings expectation a month ago was 25 cents a share.
Allstate, which has been trying to improve its profitability by raising pricing, as well as reducing coverage in less-favorable markets such as New York and Florida, said policies in force fell in both auto and homeowners.
Written auto premiums fell 0.8 percent, as higher prices were offset by fewer policies, while homeowners premiums rose 1.5 percent as stronger pricing was enough to offset the decline in policies.
"I feel like we're continuing to make progress. The weather is not cooperating with us, but we're controlling what we can," Wilson said of the turnaround in the homeowners unit.
Allstate also said profits grew in its financial business, as premiums and charges on new products sold grew more than 5 percent, offsetting a sharp decline in annuities.
Allstate shares rose 4 percent to $27.40 in after-hours trading.