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Allstate Posts Loss After Hurricanes

October 20, 2005|From Reuters

NEW YORK — Allstate Corp., the publicly traded insurer most exposed to hurricane-ravaged U.S. states, swung to a third-quarter loss Wednesday contrasted with a profit a year earlier after making big catastrophe payouts.

Allstate, which had not previously disclosed its losses from hurricanes, said hurricanes Katrina and Rita triggered more than $3 billion of catastrophe payouts in the quarter, up almost $2 billion from the same quarter last year.

The insurer's quarterly loss was bigger than analysts expected, but investors shrugged off the bad news, sending Allstate's shares higher in after-market trading.

"It's not the worst-case scenario, and Allstate has the money to ride it out," said analyst Rob Haines at CreditSights.

Allstate, the No. 2 U.S. property and home insurer, said its third-quarter loss was $1.55 billion, or $2.36 a share, contrasted with net income of $56 million, or 9 cents, a year earlier. Revenue rose 5.9% to $8.94 billion.

On an operating basis, excluding items such as gains and losses on security sales, the Northbrook, Ill., company lost $2.52 a share, contrasted with an 8-cent-a-share gain last year.

On that basis, analysts polled by Reuters Estimates were expecting a loss of $2.25 a share.

Allstate said its catastrophe losses in the third quarter were $3.06 billion compared with $1.11 billion a year earlier.

After hours, Allstate was at $55, up from its close of $54.40.

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