Allstate Profit Falls 15% as Reserves Rise
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Allstate Corp. said first-quarter net income fell 15% to $426 million, or 60 cents a share, as it increased reserves for mold damage in Texas and other homeowner claims, which are costing millions of dollars more than the insurer expected.
Excluding one-time items, Allstate’s first-quarter profit fell to 68 cents a share, far surpassing analysts’ estimates of 58 cents.
Like other car and home insurers, Allstate is recovering from several years of patchy earnings, hit by rising claim costs and slumping rates after a decade-long price war. New rate increases are aimed at catching up with rising claims, but they will not boost profit until next year.
The Northbrook, Ill.-based company’s revenue rose 2% to $7.3 billion.
Allstate shares rose $2.01 to $41.06 on the NYSE.
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