Allstate Corp. second-quarter net income increased slightly to $434 million on lower catastrophe losses.
Pretax catastrophe losses during the second quarter were $647 million compared to $819 million during the same period a year ago, when the largest publicly-traded home and auto insurer in the U.S. posted net income of $423 million.
Gains outweighed a $312 million after-tax charge related to the extinguishment of $1.83 billion in debt.
Second-quarter operating income at the Northbrook, Ill.-based insurer grew to $529 million from $432 million in 2012.
Allstate says property-liability net premiums written increased 4.2 percent quarter-to-quarter. Property-liability net income grew more than 74 percent to $617 million, compred to $354 million during 2012′s second quarter. The combined ratio was 96.1 compared to 98 a year ago.
Direct auto writer Esurance grew NPW 31.7 percent during the second quarter, compared to the same time last year. NPW at the Encompass brand increased 9 percent.
Agency-driven business from Allstate brands grew NPW 3 percent due to higher retentions and new policies in auto and home. The company's home insurance line saw a combined ratio of 95.3, a 9.1-point improvement due to the lower catastrophe losses during the quarter.
During a conference call on earnings Matthew Winter, president of Allstate Auto, Home and Agencies, says the insurer's efforts to focus over the last several years on "PML (probably maximum loss) optimization" in honeowners has now resulted in a "careful, thoughtful growing" in some areas that do not pose a PML or concentration risk.
Allstate has said reshaping its book of business resulted in some reduction in policies over teh last several quarters, but the new business "engine is moving" now that the insurer has a better handle on underwriting guidelines, rates and has issued the nonrenewals necessary to make its book more profitable, says Winter. He says the insurer is also focused on retaining current policyholders.
The combined ratio in Allstate brand auto during the second quarter improved 0.6 points to 94.9, compared to a year ago.
The second-quarter combined ratio at Esurance increased 2.8 points to 119.5 due to new policies, price discounts and higher bodily-injury severity, as well as advertising spend.
Allstate says the unit is adjusting pricing and underwriting at Esurance.
For the year net income at Allstate is down slightly to $1.14 billion from $1.19 billion after six months in 2012.
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