Allstate's Quarterly Profit Up 50%
NU Online News Service, Feb. 4, 2:30 p.m. EST?The Allstate Corporation reported that its fourth-quarter profit rose 50 percent to $1.14 billion, thanks to increased premiums earned as well as continued favorable auto and homeowners loss frequencies.[@@]
The figure compares with $761 million reported during the 2003 fourth quarter.
For full-year 2004, the insurer's net profit was $3.18 billion, up more than 17 percent from $2.7 billion income posted for 2003.
For the fourth quarter, the company's p-c net premiums written rose to $6.5 billion, compared to $6.1 billion during the comparable quarter in 2003. The company credited this increase to an increase in policies in force.
Growth in policies in force for Allstate brand standard auto and homeowners lines remained strong, at 5.5 percent for auto and 6.4 percent for homeowners from the 2003 fourth quarter, the company said. Total Allstate brand policies in force increased 3.9 percent.
For full-year 2004, p-c net premiums written came in at $26.5 billion, up from $25.2 billion during 2003.
At the same time, Allstate's fourth-quarter p-c underwriting income rose 57.8 percent over the 2003 fourth quarter to $762 million, thanks to increased premiums earned and continued favorable auto and homeowners loss frequencies, as well as favorable prior-year reserve re-estimates.
Prior-year favorable reserve re-estimates in the fourth quarter totaled $189 million, reflecting lower actual claim severity trends than anticipated in previous estimates. For full-year 2004, p-c underwriting income came in at $1.8 billion, improving from $1.3 billion for 2003.
Allstate achieved its strong earnings despite significant losses from last year's unprecedented hurricane season. The company said it had taken an additional $239 million in storm-related losses after estimates rose for claim severity on personal lines and commercial property claims in Florida.
Net investment income also improved for both fourth-quarter and full-year results. For the fourth quarter, the investment gain was $463 million, up from $435 million during the comparable quarter one year ago. The full-year 2004 investment income was $1.8 billion, better than $1.7 billion for 2003.
"It was a great quarter and a great year for Allstate," said Allstate Chief Executive Officer Edward Liddy. "I am very encouraged by the loss cost trends in our business during the fourth quarter and all of 2004. As I have said before, we might see occasional fluctuations in the frequency trends due to weather, but the underlying frequency trend remains favorable."
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