Allstate Insurance saw a fourth quarter drop in net income of 43 percent on a rising number of claims directly linked to auto accidents and catastrophic events.
The fourth quarter 2010 net profit of $296 million fell far short of the 2009 figure of $518 million for the same period. Total operating income was tallied at $271 million compared to $592 million for the fourth quarter of 2009.
Still, the company posted a net profit of $928 million for the entire year, an increase from the $854 million Allstate earned in 2009. The company attributed the increase to improvements in investments and a higher operating income for Allstate Financial.
Thomas J. Wilson, chairman, president, and chief executive officer of The Allstate Corp., said, “While we were able to increase auto insurance new business levels at the end of the year, this was not enough to offset lower customer renewals.” And, he added, “When you look at the homeowners business, the amount of losses that are being paid out due to the severe weather is not just an anomaly.”
Catastrophic events that adversely affected corporate earings included a hailstorm in Arizona where estimated losses topped $355 million. Total catastrophic losses to the company, which included 20 separate events for the fourth quarter of 2010, totalled $537 million.
The Allstate Financial unit has been restructured and is now focusing on underwritten products sold thorugh Allstate agencies and the workplace. The company plans to phase out Allstate bank in the coming months.