(Bloomberg) -- Allstate Corp., the largest U.S. publicly tradedseller of auto and home insurance, said first-quarter profit rose13% as margins improved at the property-liability business andcatastrophe losses fell.

Net income climbed to $677 million, or $1.53 a share, from $600million, or $1.30, a year earlier, the Northbrook, Illinois-basedcompany said Tuesday in a statement. Operating income was $1.46 ashare, beating the $1.44 average estimate of 22 analysts surveyedby Bloomberg.

Chief Executive Officer Tom Wilson has been investing intechnology that can track driver behavior to improve underwriting.Allstate said it spent 93.7 cents for every premium dollar in itsproperty-and-liability unit in the first quarter, compared with94.7 cents a year earlier. Catastrophe costs fell to $294 millionfrom $445 million.

“There was no news on the catastrophes. That’s news,” CliffGallant, an analyst at Nomura Holdings Inc., in an interview beforeresults were released. “The weather was good for Allstate. They’remuch more sensitive than anyone else” because of their homeownersexposure, he said.

Allstate rose less than 1% to $70 in New York on Tuesday, and islittle changed this year. The insurer released results after theclose of regular trading.

Auto Coverage

While profit improved at Allstate’s namesake homeowners unit,underwriting income from auto coverage fell 48% to $144 million.Geico, the auto insurer owned by Berkshire Hathaway Inc., said in afiling on Friday that it will charge drivers more after marginsdeclined due to a higher frequency of claims for collisions andinjuries.

“There are more accidents now over the last couple of years thanthere have been because economic activity has gone up” and morepeople are driving, Tom Wilson, Allstate’s chief executive officer,said in an interview. “We and other people have been raising ourrates to account for that.”

Allstate’s premium revenue in the property and liabilitybusiness advanced to $7.43 billion from $7.06 billion a yearearlier. Book value, a measure of assets minus liabilities, rose to$49.19 a share from $48.24 at the end of December.

Net investment income fell 11% to $850 million from a year ago.Insurers’ bond portfolios have been pressured by low interestrates, and for Allstate, the decline was also tied to the sale ofthe Lincoln Benefit life insurer, Wilson said.

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