In a reprise of third-quarter events, last night Allstate (NYSE:ALL) reported net income results that slightly lagged analyst expectations. And again, the market sent the shares down; after the release, they fell about 3%.

So is Allstate becoming a chronic underperformer? Hardly -- it's the among the largest property and casualty insurers out there, collecting premiums and paying claims for automobiles, homes, and all types of property. It's just that the insurance business doesn't lend itself to steady-eddy revenue and earnings growth. The last two years are a case in point; 2005 saw a record number of devastating hurricanes hit Southeastern shores, while the 2006 hurricane season turned out to be unusually calm.

As a result, overall annual profitability improved markedly; net income more than doubled, as catastrophe losses fell 86% from 2005. That sent return on equity up to 23.8% from 8.4%, and the combined ratio down 18.8 points to a money-making 83.6. But apparently investors were even expecting more for the fourth quarter (see our Fool by Numbers for a Q4 breakdown).

Perhaps the post-earnings stock drop of the last couple of quarters was the reason Allstate announced it would no longer be providing guidance on operating income per diluted share. In any case, the move makes sense and may encourage myopic-minded analysts to focus on the long-term picture instead of quarterly results.

That picture favors Allstate as it pursues premium growth in the hypercompetitive and mature insurance industry. Along with privately-held State Farm, it has some of the highest brand awareness, which provides an advantage over firms such as St. Paul Travelers (NYSE:STA) and Hartford Financial (NYSE:HIG). The auto insurance market is perhaps even tougher, as Progressive (NYSE:PGR) is well-known to consumers and Berkshire Hathaway's (NYSE:BRK-A) (NYSE:BRK-B) GEICO Insurance recently upped its advertising.

Investors in Allstate have done quite well over time; they're up more than 25% from lows reached last May, as hurricane worries were just subsiding. And while catastrophes create claims expenses for insurers, savvy investors should consider taking advantage of any related stock drops to pick up some shares on the cheap. The sun will eventually shine again, even if it won't be as bright as certain fickle investors had originally anticipated.

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Fool contributor Ryan Fuhrmann has no financial interest in any company mentioned. Feel free to email him with feedback or to discuss any companies mentioned further. The Fool has an ironclad disclosure policy.