The $620 million loss at the Northbrook, Ill. company amounted to $1.19 per share. That compared with a profit of $145 million, or 27 cents per share, in the same quarter a year ago.
Allstate provided coverage during 33 catastrophic events during the April through June quarter, including five tornadoes, three wildfires and 25 wind and hail storms. This year has been the deadliest for tornadoes since 1950, based on an assessment of figures from the National Weather Service.
The $2.34 billion total is up from $636 million in the year-ago quarter, and tops a recent quarterly high set in 2008, when Hurricanes Ike and Gustav drove up that year’s third-quarter catastrophe losses to $1.8 billion. The company reported $4.7 billion in losses as a result of Hurricanes Katrina and Rita in the third quarter of 2005.
Allstate’s catastrophe losses for the latest quarter were more than twice the $1.09 billion reported by a rival, Travelers Cos. about two weeks ago.
Allstate has been pursuing rate hikes in its homeowners unit to offset higher claims from violent storms. The company said rate increases averaging 6 percent were approved in 18 states during the second quarter.
Homeowner premiums written increased 2.6 percent in the second quarter, compared with a year ago. A 6 percent increase in average gross premium was partly offset by a nearly 4 percent decline in policies in force.
Allstate said its combined ratio improved to 87.5 during the second quarter, from 88.1 a year ago, excluding the impact of catastrophes as well as the previous year’s re-estimate of the company’s reserves. A ratio above 100 means that for every premium dollar taken in, more than a dollar went to cover claims and expenses. A figure below 100 means the company made a profit on its insurance operations.
Adding in catastrophe losses, Allstate’s combined ratio in the latest quarter was 123.3 points, compared with 96.8 in the year-ago quarter.Revenue rose nearly 6 percent to $8.08 billion from $7.66 billion in last year’s second quarter.
Shares of Allstate Corp. rose 78 cents to $28.50 in electronic trading.The spike in catastrophe losses has contributed to a 19 percent decline in the company’s stock price since early May, when shares hit a 52-week high of $34.40. Shares closed on Friday at $27.72.
The source article Allstate 2Q weather beaten, but a silver lining was published August 1st, 2011 by The Associated Press via Yahoo! Finance .