Posted by Sure-Net.com on February 5, 2003 at 11:15:10:
ALLSTATE PROFITS UP AS PREMIUMS RISE Northbrook, IL, (Reuters) - Allstate
Corp. (NYSE:ALL), the No. 2 U.S. car and home insurer, on Wednesday reported
its fourth quarter profit rose almost 70 percent as it increased some premium
rates and trimmed expenses. The company said fourth-quarter profit rose to
$447 million, or 63 cents per share. That compares with $264 million, or 37
cents per share, a year earlier. Total revenues rose 3 percent to $7.59 billion,
helped by modest premium increases. "They beat expectations," said Deutsche
Bank analyst Alain Karaoglan. "They have reached price adequacy -- they don't
need to fix their margins that much any more." Allstate, which has been locked
in tight competition with State Farm and others for many years, has been
looking to raise premium rates in areas it was losing money. That strategy
is taking effect. In the fourth quarter it paid out 97.8 cents in claims
and expenses for every dollar of premium it received. It lost $1.04 for every
premium dollar in the year-ago quarter. "While we took some rate increases
in the fourth quarter, the need for rate actions abated somewhat in the second
half of 2002 as rates taken earlier in the year proved to be adequate," said
Allstate Chief Executive Edward Liddy. Liddy also said that claims for mold
damage in Texas -- which has cost insurers hundreds of millions of dollars
-- were reducing as it limits mold claims in its new policies.
