A Strong Third Quarter
Allstate reported third-quarter net income of $723 million, or $1.48 a share, beating the consensus estimate of $1.13, among analysts polled by Thomson Reuters. Earnings increased from $175 million, or 34 cents a share, during the third quarter of 2011, even though consolidated revenues declined to $8.128 billion from $8.242 billion. Catastrophe losses declined to $206 million in the third quarter, from $1.077 billion a year earlier. The company's property-liability combined ratio declined to 90.2 in the third quarter, from 104.8 in the third quarter of 2011. The combined ratio is the sum of incurred losses and expenses divided by earned premiums. It measures underwriting profitability, and a combined ratio of over 100% indicates an underwriting loss. The company's "underlying combined ratio," which excludes "the effect of catastrophes, prior year reserve re-estimates, business combination expenses and the amortization of purchased intangible assets," improved to 87.8 in the third quarter from 89.2 a year earlier, "reflecting favorable margins in the Allstate and Encompass brands."