LOWER CAT LEVELS HELP ALLSTATE

Illinois-based insurer Allstate has booked a net gain $1.19bn for the first half, up from a loss of $100m in the first half of last year. Property-liability premiums rose to $13.30bn from $12.91bn. The combined ratio declined to 95.1% from 109.1%, after the effect of catastrophe losses declined from 20.7pp to 8.1pp. Prior year releases cut a further 2.7pp from the ratio, compared with 0.7pp in H1 2011. For Q2 the net gain was $423m, up from a loss of $624m in Q2 2011. Chairman, president and CEO Thomas Wilson said that "we improved our underlying margins in both auto and homeowners insurance". The market liked the numbers, with Allstate shares rising 3.6% to $35.53 in after-hours trading. Allstate's strategy is to maintain motor insurance margins while improving returns on homeowner insurance. In Q2 the property-liability combined ratio was 98.0%, down from 123.3% in Q2 2011. Catastrophe losses of $819m in the quarter were deemed "substantial", but significantly less than the catastrophe losses of $2.3bn incurred in Q2 2011" For Allstate-branded standard motor, the combined ratio was 95.5% for Q2, 2.8pp lower than the same period last year. Price increases "essentially matched the increase in loss costs." Allstate-branded homeowners combined ratio was 104.9% for the second quarter, down from 193.3% in the prior year quarter, driven by lower catastrophe losses and continued improvement in the underlying margin. Allstate said that premiums written grew by nearly 4% year on year, but that overall policies in force fell by 0.6% from December 31 2011, with declines in Allstate-branded policies being offset only partially by growth in other brands.