Allstate (ALL), the nation’s largest publicly traded personal-lines insurer, swung to a loss in dramatic fashion in the third quarter as catastrophes and the credit crunch took their toll.
“Catastrophes, including two of the ten costliest hurricanes in U.S. history, and the impact of a global financial crisis contributed to a quarterly net loss for our company. In this environment, our proactive and decisive approach to risk reduction has benefited Allstate,” Thomas J. Wilson, Allstate’s chairman, president and CEO, said in the company’s press release.
Allstate said it lost $923 million, or $1.71 a share, in the third quarter. It had made a profit of $978 million, or $1.70 a share, in the same period a year earlier.
Revenue was $7.32 billion, down 19% from $8.99 billion in the third quarter last year.
Catastrophe losses were $1.82 billion, up from $343 million in the third quarter last year. That reflected losses from 35 events, the company said, including Hurricane Gustav and Hurricane Ike, which were two of 10 costliest hurricanes in U.S. history.
Net realized capital losses were $1.3 billion that “reflect unprecedented declines in credit markets,” the release said.
Net unrealized losses, “primarily reflecting depressed valuations from widening credit spreads,” the company said, were $4.1 billion. The company continued, “Given its current level of liquidity, the Company intends and believes it has the ability to hold these assets to recovery and therefore does not anticipate significant conversion from unrealized to realized losses.”
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