Allstate reported operating earnings of $1.39 per share, which beat consensus estimates of $1.33 per share. Allstate's earnings beat follows similarly strong results at The Travelers Companies and The Hartford Financial Services Group, which both reported third quarter earnings beats as well.
Though catastrophe losses affected Allstate's third quarter profitability by $517 million compared against just $128 million in the year ago quarter, Allstate's results nonetheless indicate a strongly performing insurance franchise.
Probably the biggest takeaway from Allstate's third quarter results was, that the company was affected by catastrophe losses that were four times larger than last year.
Despite that, Allstate was able to achieve a property-liability underwriting gain of $474 million in the most recent quarter. Its combined ratio has slightly improved sequentially to 93.5%, which compares against 97.4% in 2Q 2014 and against 90% in 3Q 2013. Allstate's underlying combined ratio, which adjusts for non-recurring items like catastrophe losses, however, remained in the mid-80% neighborhood with 86.1%.
Companies often resort to share repurchases to supplement a dividend that's paid to shareholders.
"Shareholders continued to realize good returns, with an operating income return on equity of 13% and $1.05 billion of dividends and share repurchases in the third quarter."
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