Allstate Corp., the largest listed U.S. home and auto insurer, said its first-quarter net income soared as catastrophe losses due to severe winter storms were lower than expected.
The Northbrook, Illinois-based Allstate beat analyst expectations, and its shares rose 3.6 percent in extended trading after the results were announced.
The insurer beat expectations that blizzards and other bad U.S. weather during the first quarter would cause higher customer claims and losses.
Instead, those losses fell 48.6 percent from a year earlier, to $333 million from $648 million a year ago.
"The first quarter of this year was a return to the averages we've seen over the last 10 years," said Thomas Wilson, Allstate's chairman and chief executive.
Wilson said that first quarter of 2010 was a record for weather-related losses for the company, but declined to predict what the company's losses may look like for the 2011 second quarter, after a series of severe thunderstorms and tornadoes have battered the Midwest and Southeast in recent weeks.
Overall, Allstate reported a first-quarter profit of $519 million, or 97 cents per share, compared with a year-earlier profit of $120 million, or 22 cents per share.
Adjusted earnings of 93 cents per share beat the average analyst estimate of 68 cents, according to Thomson Reuters I/B/E/S.
Consolidated revenue rose 4.5 percent to $8.1 billion from $7.7 billion.
During the quarter, Allstate's homeowners insurance business continued to report higher profitability, while auto insurance reported declines.
In the first quarter, homeowners' insurance premiums increased an average of 6 percent, and Wilson said such increases are likely to continue.
"We're not getting any resistance from customers" on rate increases, Wilson said. The bad weather through the early months of 2011 played a large role in consumers' reluctance to push back on price, he said.
Allstate's written homeowners premiums increased 3 percent during the quarter from a year ago.
However, written premiums declined 1 percent in its auto insurance business.
Average auto insurance premiums also declined 1 percent during the quarter, as drivers elected for lower levels of coverage and rates declined from 2010.
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