Allstate estimates $1.4B April catastrophe losses

AP News
Posted: May 12, 2011 12:06 PM
Allstate estimates $1.4B April catastrophe losses

Allstate Corp. said Thursday that the tornadoes that ripped through the South led to an estimated $1.4 billion in catastrophe losses last month.

The home and auto insurer said the losses include 13 natural disasters in the U.S. and Canada. But the largest losses came from tornadoes in Alabama, Arkansas, Georgia and Virginia in the last week of April.

More than 100,000 claims have been reported so far in these areas, the company said.

Allstate declined to give its previous monthly record for catastrophe losses. But the last time company's quarterly catastrophe losses exceeded the April estimate was in the third quarter of 2008, when Hurricanes Ike and Gustav drove up losses to $1.8 billion.

Quarterly catastrophe losses are typically far lower, however. In the first three months of this year, catastrophe losses totaled $333 million.

Severe weather-related incidents have become a growing concern for Allstate in recent years. CEO Tom Wilson has said he believes there have permanent changes in weather patterns, with a growing number of incidents such as hurricanes, floods and hailstorms.

As a result, the company has been pursuing rate hikes in several states to improve returns in its homeowners units to make up for the uptick in payouts

Allstate also said Thursday that it plans to announce monthly catastrophe losses when they are expected to top $150 million. Over the last decade, the company said that level of loss has occurred about one-third of the time.

Citing the estimated catastrophe losses for April, Citi analyst Keith Walsh lowered his estimate for Allstate's second quarter to a loss of 95 cents per share, compared with his previous forecast for a profit of 73 cents per share. For the full year, Walsh lowered his estimate to $1.37 per share from $30.5 per share.

Shares of Allstate, based in Northbrook, Ill. slipped 23 cents to $32.82 in midday trading.