Summary
The Allstate Corporation's first quarter 2008 results showed a significant decline in net income, dropping to $348 million ($0.62 per diluted share) from $1.495 billion ($2.41 per diluted share) in the same period of 2007. This substantial decrease was largely driven by a significant increase in catastrophe losses and unfavorable prior-year reserve reestimates within the Property-Liability segment, which resulted in a higher combined ratio of 94.0 compared to 84.6 in the prior year. Additionally, the Allstate Financial segment reported a net loss of $111 million, a reversal from a net income of $164 million in Q1 2007, primarily due to substantial realized capital losses. Despite the decline in profitability, the company continued its share repurchase program and increased its quarterly dividend, signaling confidence in its long-term outlook.
Key Highlights
- 1Net income significantly decreased by $1.15 billion to $348 million in Q1 2008 from $1.495 billion in Q1 2007, with diluted EPS falling to $0.62 from $2.41.
- 2The Property-Liability combined ratio deteriorated to 94.0 in Q1 2008 from 84.6 in Q1 2007, primarily due to a substantial increase in catastrophe losses and unfavorable prior-year reserve reestimates.
- 3Allstate Financial segment reported a net loss of $111 million in Q1 2008, a sharp decline from a net income of $164 million in Q1 2007, largely driven by realized capital losses.
- 4Total revenues decreased by 13.3% to $8.09 billion in Q1 2008 compared to $9.33 billion in Q1 2007.
- 5Realized capital losses amounted to $655 million in Q1 2008, a significant swing from realized capital gains of $471 million in Q1 2007.
- 6The company repurchased $424 million of its stock in Q1 2008 and increased its quarterly dividend to $0.41 per share.
- 7Book value per diluted share decreased by 5.5% from December 31, 2007, to $36.45 as of March 31, 2008.