The FINANCIAL -- Allstate Corp. said its third-quarter operating earnings rose 2% on stronger premiums and a decline in catastrophe-related losses, though the insurer's auto business continued to suffer from elevated car-accident-related claims, according to Nasdaq.
Operating earnings are a widely watched benchmark for the insurance industry because they exclude realized capital gains and losses from companies' investment portfolios, among other items that aren't considered recurring on a quarterly basis.
During the previous quarter, Allstate was among the property and casualty insurers whose results were hurt by an increase in the number and severity of auto claims.
The company, one of the largest auto insurers in the U.S., reported that in the latest quarter, auto underwriting income declined amid continued high auto claims, including an 8.9% increase in property damage frequency and 5.4% growth in paid claim severities. Allstate added that it continued to implement its plans to improve the performance of its auto segment, which includes raising prices, tightening underwriting standards and managing loss costs.
For the third quarter, the overall property-liability combined ratio—a measure of the portion of premiums used to cover claims and expenses—edged up to 93.6% from 93.5%.
However, excluding catastrophe losses and other items, the underlying property-liability combined ratio rose to 89.3% from 86.1%, driven by higher underlying auto losses.
Pretax catastrophe-related losses decreased to $270 million from $517 million a year earlier. Catastrophe losses a year earlier were mostly the result of severe weather in Colorado in September 2014.
Allstate reported operating earnings of $610 million, or $1.52 a share, up from $598 million, or $1.39 a share, a year earlier.
Property-liability premiums written increased 4.2% to $8.14 billion, driven by a 4.7% increase in Allstate brand premiums.
Analysts polled by Thomson Reuters expected per-share operating profit of $1.32 and net premiums written of $8.14 billion.
Overall, Allstate reported a profit of $621 million, down from $750 million a year earlier. On a per-share basis, which reflects preferred dividend impacts, earnings fell to $1.54 from $1.74.