The Allstate Corporation, based in Northbrook, Ill., generated operating income in third-quarter 2005 of $156 million, an increase of $5 million or 3.3 percent compared to the third quarter of 2004. Non-deferred operating expenses were held flat compared to the third quarter of 2004. Total premiums and deposits were down $1.6 billion in the quarter compared to the third quarter of 2004, primarily due to declines in sales of traditional fixed annuities and the absence of opportunistic sales of institutional products.
After-tax catastrophe losses, net of reinsurance, totaled $3.06 billion in the third quarter of 2005 compared to $1.11 billion in the third quarter of 2004. The effect of catastrophes on net (loss) income per diluted share was $4.67 in the third quarter of 2005 compared to $1.59 in the third quarter of 2004. Catastrophe losses in the quarter included the impacts of Hurricanes Katrina ($3.68 billion pre-tax or $2.39 billion after-tax), Rita ($850 million pre-tax or $553 million after-tax, net of reinsurance), Dennis and Ophelia. For further information, see the Impacts of Hurricanes Katrina and Rita section.
Property-liability premiums written grew 2.9 percent over the third quarter of 2004, driven by an increase in standard auto and homeowners premiums written, which grew 4.7 percent and 6.0 percent, respectively. Premiums written grew 3.7 percent, excluding the cost of catastrophe reinsurance programs purchased in 2005, impacts of Hurricane Katrina and business ceded to Universal Insurance Company of North America. Allstate auto and homeowners policies in force increased 3.6 percent and 4.4 percent, respectively, from Sept. 30, 2004 levels.
Property-liability underwriting loss was $3.36 billion compared to an underwriting loss of $685 million in the third quarter of 2004, due to higher catastrophes, partially offset by increased premiums earned, continued favorable auto and homeowners loss frequencies, excluding catastrophes, and net favorable prior year reserve reestimates.
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