Allstate Quarterly Net Up 43%
By Michael Ha
NU Online News Service, April 21, 3:36 p.m. EDT?The Allstate Corporation said that lower losses and higher premiums helped push first-quarter net income up 42.7 percent to $949 million, compared with $665 million for the year-ago period.[@@]
Allstate's chief executive Edward Liddy, speaking at a conference call this morning, said Allstate's first-quarter results are an extension of the company's strong performances reported during 2003.
"It follows a great 2003?it really is a continuation of trends that we've established over the last few years," Mr. Liddy said. "It was a truly outstanding quarter."
He said this is the first time that Allstate's quarterly operating income broke the $1 billion level. The company's first-quarter operating profit came in at $1.02 billion, up from $673 million one year ago.
The company's first-quarter figures, Mr. Liddy commented, demonstrate Allstate's ability to successfully execute the company's strategic goals?which are to grow its business profitably while maintaining capital discipline and generating superior returns for shareholders.
The company reported that its property-liability premiums written were $6.33 billion for the quarter, up 6.7 percent from $5.94 billion reported one year ago. Allstate's property-liability underwriting income was $865 million for the first quarter, up 109 percent from $413 million reported during the year-ago period. The combined ratio also improved, dropping 6.7 points to 86.4.
Mr. Liddy said Allstate's property-liability business saw its premiums written rise despite the moderating rates. In its p-c lines, the company's policies in force also showed healthy growth, Mr. Liddy said. In particular, Allstate-brand standard-auto policies in force grew 3.6 percent, while homeowners policies in force rose 4.6 percent compared to a year ago.
Mr. Liddy said his company managed to retain more customers this past quarter. The company's retention ratio improved for Allstate brand's standard-auto and homeowners businesses, he said. He also observed that the company's underwriting business benefited from lower catastrophe losses and the mild winter, which contributed to favorable auto and homeowners loss frequency trends.
Allstate reported that catastrophe losses for the first quarter were $102 million, down from $133 million reported during the 2003 first quarter. The impact of CAT losses on the combined ratio was lowered to 1.6 points, from 2.2 points reported a year ago.
Allstate also saw its investment results improve. The company reported that its net investment income for the quarter was $424 million, up 3.9 percent compared to one year ago. The investment results reflected positive cash flows from operations, which were partially offset by lower yields.
The company also said its Allstate Financial unit had premiums and deposits of $3.46 billion, a 38 percent rise over the 2003 first quarter.
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