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4-Traders Homepage  >  Equities  >  Nyse  >  The Allstate Corporation    ALL

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The Allstate Corporation : Allstate : Rivals Now Joining Us In Raising Home Insurance Rates

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05/03/2012 | 05:16pm CEST
   By Erik Holm 
   Of  
 

Allstate Corp. (ALL) executives said rivals are beginning to raise U.S. home-insurance rates, joining Allstate in an effort to offset rising claims costs.

Allstate has been boosting the price of coverage for years as severe weather pushed the company to repeated underwriting losses in its home-insurance operation.

But several analysts on Thursday highlighted the company's first-quarter profit margins, saying the company appeared to be closing in on its goal of achieving appropriate returns from the segment.

The underlying profit margin in the home-insurance business, a measure that excludes some effects out of the company's control, was 33 cents on the dollar in the quarter.

Competitors "are now raising their homeowners rates a little later than I think we did," said Matthew Winter, the head of Allstate's home and auto operations. "My expectation is that we will no longer be alone in the marketplace taking rate."

Allstate shares rose 4.1% to $34.26 in morning trading after the company released first quarter results late Wednesday. The stock jump came after the improved home-insurance results helped push first-quarter profit up 46% to $766 million. Operating income of $1.42 a share beat the consensus estimate of analysts surveyed by Thomson Reuters by 30 cents.

Allstate's efforts to raise home-insurance rates continue, which has had a "chilling effect" on the company's auto-insurance division, Winter said. The company is "accepting, but not liking" the knock-on effect, he said.

"Growth in the absence of profitability is the wrong strategy," he said.

Some of the recent price hikes have reflected the rising costs of repairing roofs, which increased dramatically in 2011, Winter said.

-By Erik Holm, Dow Jones Newswires; 212-416-2892; erik.holm@dowjones.com

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Financials ($)
Sales 2017 32 635 M
EBIT 2017 2 601 M
Net income 2017 2 434 M
Debt 2017 -
Yield 2017 1,57%
P/E ratio 2017 14,00
P/E ratio 2018 13,31
Capi. / Sales 2017 1,04x
Capi. / Sales 2018 1,01x
Capitalization 33 885 M
Chart THE ALLSTATE CORPORATION
Duration : Period :
The Allstate Corporation Technical Analysis Chart | ALL | US0200021014 | 4-Traders
Technical analysis trends THE ALLSTATE CORPORATION
Short TermMid-TermLong Term
TrendsBullishBullishBullish
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus OUTPERFORM
Number of Analysts 19
Average target price 99,8 $
Spread / Average Target 6,4%
EPS Revisions
Managers
NameTitle
Thomas Joseph Wilson Chairman & Chief Executive Officer
Matthew E. Winter President
Steven E. Shebik Chief Financial Officer & Executive Vice President
Mary Alice Taylor Independent Director
Judith A. Sprieser Lead Independent Director
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