Allstate Reports $1.06B Hurricane Loss
By Steve Tuckey
NU Online News Service, Oct. 14, 4:55 p.m.EDT?More than $1 4billion in hurricane-related payouts by Allstate will shrink third quarter profits the company said and there were reports the insurer was considering new Florida underwriting guidelines.[@@]
The company announced Wednesday that catastrophe losses stemming from the 2004 hurricane season will approximate $1.06 billion on an after tax basis net of recoveries from the Florida Hurricane Catastrophe Fund. Total catastrophe losses will come in around $1.11 billion after-tax.
The company stated it expects net income of 9 cents per share, which is almost two-third less than analysts' expectations.
In a prepared statement, Allstate chairman Edward Liddy said "the events of this hurricane season will likely result in a new round of examinations in the insurance marketplace in several states. Allstate looks forward to participating in the public discourse."
Company officials were not available to elaborate on what Mr. Liddy meant by "new round of examinations." Allstate is reportedly tightening up underwriting guidelines for the state, but that could not be confirmed.
Last month A.M. Best downgraded the Allstate subsidiary in Florida to B plus from A minus. At the same time it put Nationwide and State Farm under watch.
Best analysts expressed concern then about the potential impact from Hurricane Ivan, which at that point had not come ashore in the United States.
Today the Jersey City-based Insurance Services Office officially put the Ivan insured loss total for damage to homes and businesses at $6 billion. Modelers had initially put the damage in the $3 billion to $10 billion range.
In related news, New York-based American International Group this morning said that catastrophe losses from the third quarter could total $515 million.
In a prepared statement the company said the losses came from AIG's Domestic Brokerage Group, Domestic Personal Lines business foreign operations.
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