The Allstate Corporation announced that its pre-tax catastrophe losses related to the California wildfires, which began on Oct. 21, 2003, are preliminarily estimated to be between $290 and $330 million, $190 and $215 million after-tax or $.27 and $.30 per diluted share after-tax. The types of losses suffered by policyholders include entire homes destroyed, partial losses, smoke damage and costs associated with living expenses due to evacuation and displacement.
“While this is our business – taking care of customers when disaster strikes – fires can be particularly devastating because of the completeness of their destruction,” chairman, president and CEO Edward M. Liddy said. “Our hearts go out to the people of Southern California. Our hope is that our customers will find comfort in knowing they are indeed in “‘Good Hands(SM)'” with Allstate. That is our commitment and we are delivering on it.”
After the end of the third quarter of 2003, we estimated that operating income per diluted share for 2003 would be in the range of $3.65 to $3.80. That estimate assumed the occurrence of an average expected level of catastrophe losses for the remainder of the year and excluded restructuring charges. The company continues to experience favorable underwriting results, including a lower level of catastrophe losses apart from those related to the California fires. While catastrophe losses in this quarter, plus our expectation for catastrophes losses for the remaining six weeks of the year, could exceed the average expected level by between $110 and $150 million pre-tax, we are reaffirming our year-end operating income guidance range of $3.65 to $3.80 (excluding restructuring charges and given actual catastrophes in the quarter through today and assuming the level of average expected catastrophe losses used in pricing for the remainder of the year). Including restructuring and related charges, our year-end 2003 operating income guidance range is $3.60 to $3.75 per diluted share.
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