Allstate's ALL third-quarter results were a significant improvement from the same period a year ago, but this wasn't unexpected given the positive market performance and the lack of catastrophes in the quarter; we will stick with our fair value estimate. The firm's property-casualty insurance segment posted an overall combined ratio of 94.7%, a healthy underwriting profit. This result was driven by strong underwriting in Allstate-branded auto insurance, where the combined ratio totaled 92.7%. The firm's other main property-casualty product, homeowners insurance, showed encouraging signs as well. This line is more directly exposed to catastrophe losses, and the dearth of hurricanes in the quarter helped push the combined ratio down to 98.3%. Midwest storms hurt the firm in the second quarter, and management has stated that they are increasing homeowners' rates in many states in order to boost margins. The firm's other segment, Allstate Financial, is showing signs of stabilization. Allstate is attempting to realign this business toward profitability by focusing on higher-margin, core businesses. The long-tailed nature of life insurance offerings caused Allstate to invest in a number of long-duration investments, including mortgage-backed securities, which the firm led to significant losses during the financial crisis. The markets bounced back somewhat in the quarter, and Allstate's unrealized loss position improved by $4.8 billion in the quarter. In part due to this investment portfolio improvement, the company's book value per share increased 16% to $32.29. We will listen to the company's conference call with analysts and investors and provide an update if merited.
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Analyst Notes
08-06-09 | 9:29AM Allstate under Review
08-05-09 | 4:33PM Catastrophe Losses Up at Allstate
05-19-09 | 9:27AM Allstate Declines TARP Funds
05-18-09 | 11:49AM Will Allstate Take the TARP?
05-15-09 | 9:10AM Six Insurers Eligible for TARP
05-08-09 | 11:10AM Allstate's First-Quarter Earnings
05-07-09 | 3:57PM Not a Good 1Q at Allstate
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