Two rating agencies have come to different conclusions about thelatest earnings news from Allstate, with A.M. Best saying it wouldtake no action while Fitch downgraded the company and itssubsidiaries.

Their actions followed Friday's move by New York-based Moody'sInvestors Service, which reacted to the insurer's announcement of afourth-quarter $1.3 billion loss by reducing the rating of thecompany and its subsidiaries, citing "significant investmentlosses, weak earnings and reduced capitalization."

Oldwick, N.J.-based Best said the ratings and outlook onAllstate Insurance Group and The Allstate Corp. remainedunchanged.

Best said it affirmed the financial strength rating of "A-plus(Superior)" on Oct. 23, 2008, but downgraded the issuer creditratings to "double-a-minus" from "double-a" of Allstate and itsmembers.

The financial strength rating of "A-plus (Superior)" wasaffirmed on the primary life and health member companies ofAllstate Financial.

Best said the October downgrade anticipated the "recent adversetrend in its risk-adjusted capital position" but it continues to"maintain adequate risk-adjusted capitalization for its currentratings."

The rating service added that it expects the company willproduce favorable results and replenish its risk-adjusted capitalposition in the near term.

Fitch Ratings downgraded the financial strength ratings ofAllstate's property-casualty to "A-plus" from "double-A" and lifeinsurance subsidiaries to "A" from "double-A-minus," with negativeoutlook.

Fitch said the negative outlook reflected the company's weakerfinancial position and uncertainty regarding further investmentportfolio deterioration this year. It also reflects capital ratiosthat "are still somewhat below targets for even the new ratingslevels."

Deterioration in risk-based capital would result in furtherdowngrades, said Fitch, while an increase in capital from "morenormalized operating results" and less investment losses wouldproduce a stable outlook.

Fitch added that the company's p-c business continues to offerfavorable cash flow and earnings potential.

Last week, the Northbrook, Ill.-based insurer in announcing itsfourth-quarter loss said it plans to eliminate 1,000 positions overthe next two years at its life operations (see NU Online, Jan.29).

Moody's reduced the insurance financial strength rating ofAllstate Insurance Co., the corporation's property-casualtysubsidiary, to "Aa3" from "Aa2."