The Allstate Corp. released Wednesday financial results for the three months and full year ending Dec. 31, recording net income of $2.3 billion on revenues of $33.3 billion in 2012. All figures are in U.S. dollars.
Net income for the fourth quarter dropped year-over year, from $712 million in 2011 to $394 million in 2012. In a press release, the Northbrook, Ill. carrier suggested the storm resulting from Hurricane Sandy was a factor.
"Catastrophe losses primarily attributable to Sandy drove the decline in net and operating income for the quarter, partially offset by a 4.0 point improvement in the underlying combined ratio," Allstate said.
Hurricane Sandy had been downgraded to post-tropical storm status when it made landfall in New Jersey Oct. 29, 2012, but it still caused major damage, especially in New York City.
"The loss estimate for Sandy was updated from an initial estimate of $1.075 billion to $1.117 billion," Allstate said. "Of the increase, approximately $22 million was due to higher losses not covered by our reinsurance programs, with the balance resulting from claim expenses not recoverable under the National Flood Insurance Program, additional reinsurance premiums and Fair Plan assessments."
Fourth-quarter revenue improved year over year, from $8.236 billion in 2011 to $8.547 billion in 2012.
Property and casualty claims and claims expenses were $5.042 billion during the final quarter of 2012, up from $4.198 billion during the same period in 2011. But for the full year, P&C claims and claims expenses were down to $18.484 billion in 2012, from $20.161 billion in 2011.
"In 2012, property-liability recorded a combined ratio of 95.5, a 7.9 point improvement from the 2011 combined ratio of 103.4," according to Allstate's press release. "Results benefited from reduced catastrophe losses and an improved underlying combined ratio compared to 2011. The 2012 underlying combined ratio was 87.2, better than the 88-91 outlook range established at the beginning of the year. The positive effects of rate and underwriting actions exceeding the loss trends in auto and property as well as the favorable effects of milder weather were the primary drivers of this result."
Net investment income for Allstate also improved year-over-year, from $3.971 billion in 2011 to $4.01 billion last year.