Allstate's earnings fall 16 percent

CHICAGO -- Allstate Corp., the second-largest U.S. property and casualty insurer, said Wednesday its third-quarter earnings fell 16 percent as the amount of catastrophe losses more than doubled from a year ago.

The results, while down from a relatively calm hurricane season last year, still exceeded Wall Street's expectations and kept Allstate on pace to top its record $5 billion full-year profit in 2006.

Net income for the July-September period was $978 million, or $1.70 per share, down from $1.16 billion, or $1.83 per share, for the third quarter last year. That was 3 cents a share better than the consensus estimate of analysts surveyed by Thomson Financial.

Revenue rose 2.9 percent to a better-than-expected $8.99 billion, from $8.74 billion last year.

Losses from catastrophes, or events generating more than $1 million in claims, jumped to $343 million from $169 million. But they were still light compared with the whopping $3.06 billion in catastrophe losses in the third quarter of 2005, when hurricanes Katrina and Rita battered the Gulf Coast and other storms also wreaked havoc.

Northbrook-based Allstate said the earnings decline also was attributable to the absence of favorable reserve re-estimates from a year ago.