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Member, Beacon International Group, Ltd.
NORTHBROOK, Ill. (Reuters)— The Allstate Corp., the largest publicly traded U.S. home and auto insurer, posted a second-quarter loss on historic catastrophe expenses, although the results were still better than expectations.
Catastrophe losses totaled $2.34 billion, making it one of the worst quarters in the company's history. Allstate had previously warned of losses in that range, largely because of record U.S. tornado activity in April and May.
Yet revenue was also higher than analysts expected, even as the number of policies in force fell compared with last year on both the auto and homeowner sides.
Allstate has said it needed to improve profitability in both those areas, which would mean raising prices in some cases and sacrificing customer numbers in the short term to improve results over the long term.
Allstate reported a net loss of $620 million, or $1.19 per share, compared with a year-earlier profit of $145 million, or 27 cents per share.
On an operating basis, excluding investment gains and losses, Allstate lost $1.23 per share. That compares with the average loss estimate of $1.56 per share from analysts polled by Thomson Reuters I/B/E/S.
Its shares closed at $27.72 on Friday, and at one point, the stock touched its lowest level since August 2010.
Allstate management has been under pressure lately to show a turnaround amid heavy competition in the auto segment and continued weakness in the homeowners business.
Last month, after a top executive left, a Langen McAlenney analyst said management was "under the gun to report improved results" and Barclays Capital said the company was fairly valued even though it was trading at a discount to book value.
NORTHBROOK, Ill.—The Allstate Corp. said Thursday that its insured losses from U.S. storms in April and May could reach up to $2 billion.