Early Access

10-QPeriod: Q3 FY1999

ALLSTATE CORP Quarterly Report for Q3 Ended Sep 30, 1999

Filed November 12, 1999For Securities:ALLALL-PJALL-PBALL-PHALL-PI

Summary

Allstate Corporation reported net income of $490 million ($0.62/diluted share) for the third quarter of 1999, a decrease from $713 million ($0.86/diluted share) in the prior year's quarter. This decline was primarily driven by increased property-liability claims and expenses, alongside higher operating costs, which more than offset growth in earned premiums and investment income. For the first nine months of 1999, net income was $2.30 billion ($2.84/diluted share), down from $2.53 billion ($3.01/diluted share) in the comparable period of 1998. The company completed two significant acquisitions in October 1999: the personal lines auto and homeowners insurance business from CNA Financial Corporation for approximately $1.2 billion in net cash and assets, and American Heritage Life Investment Corp. (AHL) for $1.1 billion in cash and stock. These acquisitions are expected to result in charges to earnings in the fourth quarter of 1999. Allstate also announced strategic initiatives to expand selling and service capabilities and reduce annual expenses by approximately $600 million, involving a significant reduction in non-agent positions.

Key Highlights

  • 1Net income for Q3 1999 decreased to $490 million from $713 million in Q3 1998.
  • 2Diluted EPS for Q3 1999 was $0.62, down from $0.86 in Q3 1998.
  • 3The company completed two major acquisitions in October 1999: CNA's personal lines business and American Heritage Life Investment Corp. (AHL).
  • 4Property-liability underwriting experienced a loss of $78 million in Q3 1999, compared to a gain of $291 million in Q3 1998, impacted by increased catastrophe losses.
  • 5Net investment income increased year-over-year for both the quarter and nine-month periods, driven by higher investment balances.
  • 6Allstate announced a plan to reduce annual expenses by $600 million and eliminate approximately 4,000 non-agent positions by the end of 2000.
  • 7The company repurchased approximately 32.7 million shares of common stock in Q3 1999, with an additional $2 billion repurchase program announced in November 1999.

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