Allstate Corp.'s first-quarter underwriting profits grew 26 percent, compared with the same period in 2005, as earnings grew by a similar amount.
The Northbrook, Ill.-based insurer reported net income of $1.4 billion, up from $1.1 billion a year earlier, to beat analysts' expectations by a wide margin.
While underwriting premiums in property and liability grew 2.2 percent from the first quarter of last year, underwriting income increased $261 million to $1.24 billion for a 26.6 increase from $981 million in the same 2005 period.
Increased earned premium and continued favorable auto and homeowners' loss frequencies, plus net prior-year reserve re-estimates drove the underwriting profit hikes, the company reported.
Company chairman Edward Liddy said relatively light first-quarter catastrophe losses and progress in implementation of its new property management catastrophe program also helped to improve numbers.
“We are intentionally limiting the amount of new property insurance business we add to our books–particularly in parts of New York, Texas, California and certain other states–along with reducing our catastrophe exposure in coastal New York and Florida,” Mr. Liddy said.
The company has sought increases for nearly two-thirds of more than 300 property insurance filings in catastrophe-prone states to reflect the cost of a beefed-up reinsurance program, Mr. Liddy said.
“In most states we are no longer offering new coverage for earthquake damage, which is generally an optional coverage on property insurance coverage,” Mr. Liddy said.
Other results included:
o Property-liability premiums written grew 2.2 percent over the first quarter of 2005, driven by Allstate brand standard auto and homeowners increases of 4.1 percent and 2.4 percent, respectively.
o Excluding the cost of catastrophe reinsurance, premiums written grew 2.7 percent in the first quarter, compared with last year's same period.
o First-quarter catastrophe losses of $107 million represented a 34.8 percent decline from the 2005 figure of $164 million.
o Consolidated revenue rose 4.3 percent in the first quarter to $9.08 billion.
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