Leading auto insurer
Allstate suffered a 17% decline in profit as losses from severe winter storms across most of North America put a dampener on returns.
Net income also suffered, down to $587 million for common shareholders as compared with $709 million in the same period last year. Operating earnings also shrunk to $1.30 per share, though beating the $1.20 per share predicted by analysts.
The losses mainly stemmed from the damaging winter weather that swept across most of the continent in January and February. According to Allstate reports, catastrophe losses were a whopping 24% higher than a year ago, at $445 million.
The news was not all bad, however. The number of Allstate-branded policies was up by 1.1% as compared to 2013’s first quarter, helped along by greater acceptance of its auto policies and a slowdown in the shedding of homeowners policies.
Revenue also surged to $8.68 billion, up from $8.46 billion in the same period last year.
“We continued providing strong cash returns to shareholders by authorizing a new $2.5 billion share repurchase program and raising the quarterly dividend by 12% for the first quarter,” said Allstate Chairman and Chief Executive Tom Wilson.
Allstate’s ownership of Esurance—which the company acquired in 2011—also helped stymie some of the losses. Esurance now offers auto insurance in 42 US states, renters insurance in 17, motorcycle insurance in seven and homeowners insurance in four states.
The company said it is planning on expanding its advertising campaign for Allstate, emphasizing the service’s promise of a quote within seven-and-a-half minutes.
As for Allstate agents, Matthew Winter of Allstate Personal Lines said the company is pushing its captives to become “trusted advisors” to their personal lines customers on a variety of P/C and life and retirement products. Through its Encompass independent agents, Allstate also plans to push packaging homeowners policies with auto.
Currently, roughly 80% of new homeowners business for Allstate is bundled with auto.
