Summary
The Allstate Corporation reported a net income of $389 million for the second quarter of 2009, a significant increase from $25 million in the same period of the previous year. This improvement was driven by a substantial increase in realized capital gains ($328 million in Q2 2009 vs. -$1.22 billion in Q2 2008). While property-liability premiums earned saw a slight decrease, the overall revenue increased due to the investment gains. However, the property-liability segment's combined ratio deteriorated to 100.0 in Q2 2009 from 94.4 in Q2 2008, primarily due to higher catastrophe losses and an increase in the standard auto loss ratio driven by higher claim frequencies and severities. Allstate Financial segment reported a net income of $19 million compared to a net loss of $379 million, also benefiting from realized capital gains. The company also adopted new accounting guidance for other-than-temporary impairments (FSP FAS 115-2), which resulted in a reclassification of previously recognized impairment write-downs, positively impacting equity. Despite the improved net income driven by investment performance, the operational challenges in the property-liability segment, particularly higher catastrophe losses and deteriorating loss ratios, warrant close monitoring by investors.
Financial Highlights
36 data points| Revenue | $8.49B |
| Interest Expense | $97.00M |
| Net Income | $389.00M |
| EPS (Basic) | $0.72 |
| EPS (Diluted) | $0.72 |
| Shares Outstanding (Basic) | 539.80M |
| Shares Outstanding (Diluted) | 540.60M |
Key Highlights
- 1Consolidated net income significantly increased to $389 million in Q2 2009 from $25 million in Q2 2008, primarily due to a large swing in realized capital gains.
- 2The Property-Liability combined ratio worsened to 100.0 in Q2 2009 from 94.4 in Q2 2008, indicating underwriting losses.
- 3Property-Liability segment's loss ratios for both standard auto and homeowners insurance increased, driven by higher claim frequencies and severities, and elevated catastrophe losses.
- 4Allstate Financial segment moved from a net loss in Q2 2008 to a net income in Q2 2009, also benefiting from realized capital gains.
- 5Total revenues increased due to realized capital gains, but property-liability premiums earned declined by 2.8% year-over-year.
- 6The company adopted FSP FAS 115-2, reclassifying $1.15 billion of other-than-temporary impairment write-downs, which improved equity by $285 million.
- 7Shareholders' equity increased to $15.07 billion as of June 30, 2009, from $12.64 billion as of December 31, 2008, partly due to the adoption of new accounting standards.