Allstate

(ALL) - Get Report

, aided by strong underwriting earnings at its property-liability unit, reported a 26% rise in first-quarter net income and boosted its profit outlook for the full year.

The insurance giant posted earnings of $1.42 billion, or $2.19 a share, up from $1.12 billion, or $1.64 a share, a year earlier.

Operating earnings, which exclude realized capital gains and losses, rose to $1.3 billion, or $2.01 a share, from $1.14 billion, or $1.67 a share, a year earlier. The results easily topped Thomson First Call's mean analyst estimate of $1.66 a share.

Revenue jumped to $9.08 billion from $8.71 billion, sailing past Wall Street's target of $8.51 billion.

The Northbrook, Ill., company said underwriting income at its property-liability was "very strong" at $1.24 billion, a 27% increase from a year ago, amid positive trends in the frequency of claims in its auto and homeowners insurance lines. That helped offset a decline in operating earnings at its Allstate Financial division, where income fell to $144 million from $149 million due to restructuring charges and lower premiums and deposits.

Allstate increased its 2006 operating earnings forecast to $6.00 to $6.40 a share from its previous forecast of $5.60 to $6.00. Analysts' average projection calls for earnings of $6.08 a share, according to First Call.