(Bloomberg) -- Allstate Corp., thelargest publicly traded U.S. car and home insurer, saidfourth-quarter profit fell on a surge in auto claims.

Net income declined 41% percent to $489 million, or $1.18 ashare, from $824 million, or $1.86, a year earlier, Northbrook,Illinois-based Allstate said Wednesday in a statement. Operatingprofit, which excludes some investment results, was $1.60 a share,beating the $1.35 average estimate of 24 analysts surveyed byBloomberg.

Allstate has struggled with a high level of car claims as lowerfuel prices put more people on the road last year. Chief ExecutiveOfficer Tom Wilson’s company has been raising prices for autocoverage while cutting expenses related to professional servicesand advertising for its Esurance brand, he said in an interview.The insurer has also been focusing on expanding home coverage.

“Our homeowner’s business did a little better than peopleexpected, secondly the benefits of our auto profit improvementactions are starting to come into fruition,” Wilson said by phoneafter results were released. “Probably not factored into as manypeople’s expectations were the amount by which we were able toreduce expenses.”

Allstate declined less than 1% to $59.64 as of 4 p.m. Wednesdayin New York. It has slipped 4% this year, after falling about 12%in 2015.

Combined ratio

Allstate spent about 92 cents for every premium dollar taken inat its property-and-liability unit in the quarter, up from costs of90 cents a year earlier. The underlying combined ratio, whichexcludes catastrophes and adjustments tied to reserves, improved to87.4 from 89.5.

Premium revenue in the property and liability business advancedto $7.68 billion in the fourth quarter from $7.35 billion a yearearlier. Catastrophe costs surged to $358 million, from $95million.

For the full year, net income declined to $2.17 billion from$2.85 billion in 2014. Book value, a measure of assets toliabilities, slipped to $47.34 a share in the fourth quarter from$47.54 at the end of September.

Net investment income in the quarter declined to $710 millionfrom $779 million a year earlier.

Related: Allstate's quarterly profit slides 45% as autolosses rise

Wilson’s company and rival firms have been investing in privateequity and real estate to support portfolios. Allstate may sufferfrom an interest-rate increase that could hurt the value of some ofits credit investments, said Paul Newsome, an analyst with SandlerO’Neill & Partners. The insurer, which also invests inequities, may also be affected by volatile stock markets globally,he said.

Allstate’s board meets in February, which is when it willdiscuss the dividend, Wilson said. As of Dec. 31, more than $500million was left of the insurer’s $3 billion share buyback program,which is expected to be completed by July.

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