Allstate’s 2006 Q3 results show rebound from 2005 Katrina losses

One year after sustaining enormous catastrophe losses, The Allstate Corporation posted a net profit in 2006 Q3 of about US$1.2 billion.
That’s compared to a $US1.5-billion loss registered during 2005 Q3, in the wake of Hurricane Katrina’s destruction in New Orleans and the southern United States generally.
“After-tax catastrophe losses, net of reinsurance, totaled US$110 million in the third quarter of 2006, compared to US$3.06 billion in the third quarter of 2005,” the company reported in a press release. “The effect of catastrophe losses on net income (loss) per diluted share was $0.17 in the third quarter of 2006 compared to $4.67 in the third quarter of 2005.”
Allstate said its property-liability premiums written declined 0.5% from the third quarter of 2005, reflecting the cost of the Allstate Protection catastrophe reinsurance program. “Excluding the cost of the reinsurance program, premiums written grew 1.6% in the third quarter compared to the third quarter of last year, driven by an Allstate brand standard auto increase of 2.2%.”
Property-liability underwriting income was US$1.08 billion compared to a US$3.36 billion loss in the third quarter of 2005, driven by lower catastrophe losses.
“It was another very solid quarter for Allstate, as overall profitability was excellent for the corporation,” said Edward M. Liddy, chairman and CEO for The Allstate Corporation. “Our auto insurance business continues to perform exceptionally well.
“While consolidated revenues were down 2.3%, property-liability premiums earned increased despite the costs associated with our broad and substantial reinsurance program and our efforts to reduce our exposure to catastrophic losses.”