Your Source for Up-To-Date News and Research on the Collision Repair Industry 

 

click here to subscribe to the FREE INSIGHT Editor's Desk News Alert Email

SUBSCRIBERS-ONLY
Today's News
INSIGHT This Month
INSIGHT Archives
Survey Center
Letter to the Editor

Business Tools
Subscription Information
CSI Reporting
Financial Analysis
IRS Audit Guide

Management/
Technical Info
Market Watch Rates
INSIGHT Inside this month's issue...

Feedback
Letter to the Editor

Allstate Reports 2001 Second Quarter Results

NORTHBROOK, Ill. -- The Allstate Corporation has reported that operating income per diluted share for the second quarter of 2001 was $.31 compared to $.58 in the second quarter of 2000. The decline was driven by catastrophe losses, by increased homeowners loss costs and market conditions in the financial services sector.

"The quarter was a particularly trying one for Allstate, as we experienced the highest level of quarterly catastrophe losses since the Northridge, California earthquake in 1994," said Chairman, President and CEO Edward M. Liddy. "The impact of the spring storms and Tropical Storm Allison was significant, with catastrophes this quarter at $537 million pre-tax, a full $170 million more than last year's second quarter. Also included in this total are $90 million of additional reserves that were recorded to provide for the resolution of claims remaining from the Northridge earthquake. The catastrophe impact aggravated an already difficult environment in the property insurance market, where we continue to experience significant loss cost pressure.

"The Good Hands(SM) Network continues to make encouraging progress, with the rollout of three more states in the second quarter. In those states where the Good Hands Network has been fully implemented, we see positive results from the interaction and integration between the three channels of agencies, call centers and the Internet for access to sales and servicing capabilities. We continue to work to fine-tune the Network, to make sure that it is as responsive as possible to the needs of the Allstate customer."

Operating income was $230 million in the second quarter of 2001, compared to $432 million in the second quarter of 2000. Consolidated revenues for the second quarter were $7.20 billion, compared to the 2000 second quarter consolidated revenues of $7.18 billion. Consolidated net income for the quarter was $168 million or $.23 per diluted share, compared to $459 million or $.61 per diluted share for the same period in 2000. The decline in consolidated net income reflects both decreased operating income and realized capital losses resulting from market conditions affecting investment write- downs and portfolio trading.

For the six months ended June 30, 2001, consolidated revenues were $14.33 billion, operating income was $782 million ($1.07 per diluted share), and net income was $668 million ($.91 per diluted share), compared to consolidated revenues of $14.47 billion, operating income of $895 million ($1.18 per diluted share), and net income of $1.02 billion ($1.34 per diluted share) in the first six months of 2000. Catastrophe losses for the first six months of 2001 were $402 million after-tax, compared to $487 million after-tax in the same period of the previous year. Consolidated realized capital losses were $80 million after-tax through June of 2001, compared to realized capital gains of $147 million after-tax for the first six months of 2000.

"We continue to see strong progress in the development of the Allstate standard auto book of business," Liddy said. "Allstate standard auto premiums written increased nearly 5 percent over the second quarter of last year, the volume of new business applications continued to accelerate during the quarter, retention remains on a positive trend and in states where the strategic risk management system has been implemented in connection with the rollout of the Good Hands Network our new business productivity has shown good progress.

"As expected, the steps we have taken to address the adverse profitability trends in our non-standard business continue to reduce written premiums in this line, but the impact from these actions is expected to begin to moderate in the second half. We have been actively pursuing appropriate rate increases for all Allstate product categories."

The combined ratio for the quarter was 106.3, compared to the 2000 second quarter ratio of 100.9. Excluding catastrophe losses and restructuring charges, the combined ratio was 96.5, compared to 93.9 in the second quarter of 2000. Property-Liability realized capital losses were $11 million after-tax in the second quarter of 2001, compared to realized capital gains of $91 million after-tax for the same period in 2000. Net income was $117 million for the quarter, compared to $393 million for the same period in the previous year.

For the first six months of 2001, Property-Liability written premiums increased 1.9 percent to $11.17 billion compared to $10.96 billion in the first six months of 2000. Revenues for the first six months of 2001 were $11.86 billion, operating income was $579 million, realized capital gains were $6 million after-tax and net income was $576 million, compared to revenues of $12.14 billion, operating income of $644 million, realized capital gains of $210 million after-tax and net income of $854 million in the first six months of 2000.

©2000 Collision Repair Industry INSIGHT
All Rights Reserved

FEATURED
LINKS:

INSIGHT Supports the NABC!
Do You?