Allstate Corp., the largest publicly traded U.S. home and auto insurer, which has Hudson-based operations, said Wednesday that third-quarter profit quadrupled on reduced disaster claims in the period before Hurricane Sandy lashed the East Coast.
Net income rose to $723 million, or $1.48 a share, from $175 million, or 34 cents, a year earlier, the Northbrook, Ill.-based insurer said in a statement. Operating income, which excludes some investment results, was $1.46 a share, beating the $1.13 average estimate of 26 analysts surveyed by Bloomberg News.
Allstate joins Chubb Corp. and Travelers Cos. in posting better third-quarter results a year after the industry faced record natural-disaster claims.
Chief Executive Officer Tom Wilson has scaled back sales in Florida, bought reinsurance and raised prices for homeowners’ coverage. Tornadoes and Hurricane Irene contributed to $3.8 billion in catastrophe claims at the company last year.
“Fundamentally, it was a benign weather quarter,” said Meyer Shields, an analyst at Stifel Nicolaus & Co., in an interview before the earnings were reported.
Allstate shares fell 0.4 percent to $39.98 before the announcement. The insurer has gained 46 percent this year, leading the 24-company KBW Insurance Index.
Insurers are assessing damage from Hurricane Sandy, which will affect results in the current period.
Insured losses could be between $7 billion and $15 billion industrywide in the U.S., said catastrophe risk modeler AIR Worldwide on Tuesday in a statement. Allstate is among the largest writers of primary property coverage in the states affected by the storm, Morgan Stanley analysts said Sunday. The company hasn’t yet released a loss estimate for the storm.
Wilson acquired online auto-insurance seller Esurance last year. Allstate has been losing customers for its namesake brand of coverage as younger drivers shunned buying from agents and chose to shop on the Web. Berkshire Hathaway Inc.’s Geico unit and Mayfield Village-based Progressive Corp., which sell directly to consumers through the Internet, have expanded in recent years.
Wilson hired Ally Financial Inc.’s Sanjay Gupta in August to lead Allstate’s marketing efforts. Geico led U.S. property-casualty insurers with $993.8 million in advertising spending last year, according to data compiled by SNL Financial. State Farm Mutual Automobile Insurance Co. was No. 2, at $813.5 million. Allstate spent $745.3 million, while Progressive’s cost was $536.1 million.