Allstate yesterday posted second-quarter earnings that rose 16.3 percent over the same period last year.
Catastrophe losses that declined to $146 million in this quarter from $248 million in the second quarter of last year were among the reasons given for the profit increase.
The company posted net income of $1.149 billion this quarter compared to $1.034 billion in the second quarter of 2004.
The Northbrook, Ill.-based multi-line company, the second largest personal lines insurer in the country, raised its outlook on earnings for the year to a range of $6 to $6.40 from a range of $5.40 to $5.80.
Allstate reported property-liability underwriting income increased 11.9 percent to $994 million this quarter due to increased premiums earned and continued favorable auto and homeowners loss frequencies.
Company CEO Edward Liddy said the increase could be attributed to a "relatively mild quarter for catastrophe losses and a continuation of favorable frequencies for auto and homeowners…"
Mr. Liddy said the company's new SRM IV pricing system is set to be online in a majority of states by the end of the year. "As evidenced by our results, tiered pricing allows us to segment risks with even more sophistication while helping us achieve the profitable growth we seek."
In a conference call with analysts today, Mr. Liddy referred to the recent adoption by State Farm of a tiered pricing system as a positive sign that will lead to further rational pricing in the industry.
As for pricing conditions, Mr. Liddy called them "competitive but in a disciplined way with no signs of the price-cutting that we have seen before."
Premiums written rose 3.8 percent compared to the second quarter of 2004. Allstate brand standard auto and homeowners premiums rose 5.3 percent and 8.1 percent, respectively, over the prior quarter.
Total policies in force for the Allstate brand in personal lines grew 3.4 percent.
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