(Bloomberg) -- Allstate Corp., the largest publicly traded U.S.auto and home insurer, said second-quarter profit plunged 45percent on a surge in claims from automobile coverage.

Net income declined to $355 million, or 79 cents a share, from$645 million, or $1.39, a year earlier, the Northbrook,Illinois-based company said Monday in a statement. Operatingincome, which excludes some investment results, was 63 cents ashare, missing the 96-cent average estimate of 22 analysts surveyedby Bloomberg.

“The increase in auto accidents is broad-based by state, riskclass, rating plans and the maturity of the business, andconsequently appears to be driven by external factors,” ChiefExecutive Officer Tom Wilson said in the statement.

Property-damage frequency for Allstate brand auto coverage rose6.9 percent in the quarter from a year earlier. Wilson said in Maythat Allstate would raise rates for drivers, following competitorGeico’s announcement of increases. Auto insurers have facedpressure from mounting claims as more drivers take to the road amidan improving economy.

The insurer fell to $66.50 at 5:01 p.m. in extended New Yorktrading after the announcement. It gained less than 1 percent to$69.38 in regular trading and had declined 1.2 percent thisyear.

The firm boosted rates for its Allstate brand auto coverage 1.5percent in the second quarter in 34 states. “We anticipateincreasing the level of rate increases being pursued,” Allstatesaid in the statement.

Repricing effort

“It’s all about auto frequency versus pricing,” RobertGlasspiegel, an analyst at Janney Montgomery Scott, said in aninterview before results were announced. “They indicated thatfrequency’s elevated and they need to reprice. I’ve got a lot ofconviction they know how to do that.”

Book value, a measure of assets minus liabilities, fell to$47.96 a share from $49.19 at the end of March. Premium revenue inthe property and liability business rose to $7.5 billion from $7.2billion a year earlier.

Distance traveled on U.S. roads in May was up 2.7 percent, or7.3 billion vehicle miles, compared with a year earlier, accordingto the most recent monthly report from theFederal Highway Administration.

Catastrophes cost the company $797 million before taxes in theperiod, the firm said in a July 16 statement. That’s down from $936million a year earlier.

Progressive Corp. said in July that second-quarter profit rose24 percent after the acquisition of ARX Holding Corp. helped thecompany push into home insurance.

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