Thanks largely to lower-than-expected catastrophe costs in the final quarter of 2014, auto and home insurer
Allstate posted premiums that outstripped analyst expectations last week.
Property-liability written premiums increased 4.9% to $7.29 billion, the carrier reported, as catastrophe losses fell from $117 million to $95 million. Analysts expected premiums written of roughly $7.27 billion, and a per-share operating profit of $1.68.
After boosting its quarterly dividend by two cents a share to 30 cents, the carrier said it plans to start a new $3 billion share repurchase program, which will be completed by July 2016.
It was not all good news, however. Allstate's operating earnings were up to $736 million, or $1.72 a share, versus $781 million, or $1.70 a share the same time last year. Allstate's shares dropped about 2% after the earnings reports were released.
During the earnings call, Allstate also fielded questions from analysts on the threat presented by Google's entrance into the auto insurance business.
As
Chubb Corp. recently did, Allstate rejected insinuations that Google would take business away from the carrier by creating an quote comparison aggregator to allow consumers to comparison shop. CEO Tom Wilson said Allstate's Answer Financial provides a similar service, generating about $500 million in premiums for other insurers like Progressive and the
Hartford.
As such, Wilson is not concerned.
"They have been talking about doing that for some time," Wilson said. "We're in the marketplace, and it's not as big a market as you would see in the UK and other places" for many reasons.
"But I would say we're there and active."
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