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Allstate Posts Fourth Consecutive Record Profit

NORTHBROOK, Ill., Feb. 10 /PRNewswire/ -- The Allstate Corporation (NYSE: ALL) today announced its year end results were the company's best ever, based on continued favorable results in its core businesses. For the year, Allstate recorded consolidated net income of $3.29 billion -- or $3.94 per share on a diluted basis, an increase of 10.7 percent. The result marked the fourth consecutive year that Allstate has returned record profits.

"Allstate's 1998 financial performance strengthens our ability to execute the strategies designed to take us to the next stage in our growth. While the Allstate agent remains the core strength of the Allstate brand, we are continuing the steps previously put in place to become multi-channel and multi-brand. Allstate is prepared to seize opportunities that enable the company to grow in ways that are in line with our strategic goals and core strengths," said Edward M. Liddy, Allstate's chairman, president and chief executive officer.

Annual Results

For the year ended December 1998, consolidated operating income rose to $2.57 billion, or $3.08 per share, an increase of 10.8 percent on a per share diluted basis. The increase was due to strong property-liability results. Property-liability premium growth and favorable frequency trends were partially offset by increased catastrophe losses during the year. Catastrophe losses for 1998 were $507 million after-tax, compared to $237 million for 1997.

Allstate's consolidated net income for the year increased to $3.29 billion, or $3.94 per share, reported on a diluted basis, a 10.7 percent earnings per share increase. Realized capital gains for the year were $694 million after-tax, up from $638 million in 1997. For the twelve months of 1998, consolidated revenues improved to $25.88 billion, an increase of 3.7 percent compared to the same period last year.

Fourth Quarter Results

Consolidated operating income for the fourth quarter was $641 million, or 78 cents per share, reported on a diluted basis, compared to $691 million for the fourth quarter of 1997. Catastrophes for the quarter were $108 million after-tax, compared to $8 million for the fourth quarter of 1997.

"Allstate posted strong fourth quarter results despite the competitive sales environment and higher catastrophe losses as compared to unusually low losses experienced last year," Liddy said.

For the fourth quarter of 1998, consolidated net income was $760 million, or 93 cents per share, on a diluted basis, compared to $871 million for the fourth quarter of 1997. Realized capital gains were $129 million for the fourth quarter of 1998 compared to $134 million for the fourth quarter of 1997. Revenues for the fourth quarter of 1998 increased 2.2 percent to $6.45 billion, due primarily to growth in the property-liability business.

Property-Liability Business

For the 1998 year end, property-liability revenues increased 3.3 percent to $21.84 billion, compared to $21.14 billion in 1997. The increase was due to growth in written premium of 3.9 percent over 1997 results to $19.52 billion. Operating income for 1998 increased 6.3 percent to $2.21 billion, compared to $2.08 billion for 1997, as a result of earned premium growth and favorable claim frequency. The property-liability combined ratio excluding catastrophes compared favorably to prior periods with a 2.8 point decline to 89.2 from 92.0 a year ago.

For the fourth quarter, property-liability revenues increased 3.0 percent to $5.45 billion, compared to the fourth quarter of 1997. Operating income for the fourth quarter was $550 million, compared to $604 million for the fourth quarter of 1997. The combined ratio for property-liability operations, excluding catastrophes, decreased to 89.7 from 90.5 in the same period of 1997.

Life and Savings Business

For the 1998 year end, life and savings revenues increased 4.8 percent to $3.96 billion, up from $3.78 billion in 1997. Realized capital gains and higher revenues from variable annuity and universal life products accounted for the majority of the increase. Operating income increased 4.0 percent to $392 million, compared to $377 million in 1997, due to increases in life and variable annuity business.

For the fourth quarter of 1998, life and savings revenues were $968 million, compared to $1.0 billion for the same period of 1997. Operating income was $96 million compared to $93 million for the same period in 1997.

The Allstate Corporation, parent of Allstate Insurance Company, is the nation's largest publicly held personal lines insurance company, insuring one of every eight autos and homes in the country. Allstate is also a major life insurer. The company provides insurance for more than 20 million customers and has more than 15,000 agents in the U.S. and Canada.

     Summary of results for the quarter and year ended December 31, 1998

                            Consolidated Highlights

    ($ in millions, except per-share amounts)
                              Quarter Ended               Year Ended
                               December 31                December 31
                        1998      1997     Change    1998      1997   Change
                          $         $        %        $         $        %
    Consolidated
       Revenues        6,454      6,313     2.2   25,879    24,949      3.7
    Operating Income     641        691    (7.2)   2,573     2,429      5.9
    Operating Income
       per share
      (Diluted)          .78        .80    (2.5)    3.08      2.78     10.8
    Realized Capital
       Gains after-tax   129        134    (3.7)     694       638      8.8
    Net Income           760        871   (12.7)   3,294     3,105      6.1
    Net Income per share
       (Diluted)         .93       1.01    (7.9)    3.94      3.56     10.7
    Weighted Average Shares
       Outstanding
      (Diluted)        823.8      860.9    (4.3)   836.6     872.8     (4.1)

    -- Consolidated operating income for 1998 rose to $2.57 billion or $3.08
       per diluted share, an increase on a per share basis of 10.8 percent
       over 1997 results.  Consolidated operating income for the quarter
       totaled $641 million, or 78 cents per share, on a diluted basis.

    -- Net income per share for 1998 increased 10.7 percent to $3.94 per
       diluted share, or $3.29 billion, compared to 1997 net income of $3.56
       per diluted share, or $3.11 billion.  For the fourth quarter of 1998,
       net income was $760 million, or 93 cents per share, reported on a
       diluted basis.

    -- Consolidated revenues increased in 1998 to $25.88 billion, compared to
       year end 1997 revenues of $24.95 billion.  Fourth quarter consolidated
       revenues increased to $6.45 billion, compared to $6.31 billion over the
       same period in 1997.

    -- During the quarter, the company acquired approximately 4.4 million
       shares at a cost of $176.1 million as part of its stock repurchase
       program.


                          Property-Liability Highlights

    ($ in millions, except ratios)

                             Quarter Ended                Year Ended
                              December 31                 December 31
                        1998       1997  Change     1998      1997   Change
                           $          $       %        $         $        %
    Property-Liability
       Revenues        5,454      5,293     3.0   21,836    21,137      3.3
    Operating Income     550        604    (8.9)   2,211     2,079      6.3
    Realized Capital
       Gains after-tax   109         93    17.2      514       511       .6
    Net Income           659        751   (12.3)   2,760     2,670      3.4
    Catastrophes
     after-tax           108          8      --      507       237       --
    Combined Ratio:

    including
      catastrophes      93.1       90.8  2.3pts     93.2      94.0  (.8)pts
    excluding
      catastrophes      89.7       90.5 (.8)pts     89.2      92.0 (2.8)pts


                           Life and Savings Highlights
    ($ in millions)

                             Quarter Ended                Year Ended
                              December 31                 December 31
                        1998       1997  Change     1998      1997   Change
                           $         $      %         $         $       %
    Life and Savings
      GAAP Revenues      968      1,003    (3.5)   3,959     3,777      4.8
    Operating Income      96         93     3.2      392       377      4.0
    Realized Capital
      Gains after-tax     11         37   (70.3)     158       123     28.5
    Net Income           107        132   (18.9)     550       497     10.7
    Investments including
      Separate
      Accounts        41,863     37,341    12.1   41,863    37,341     12.1

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Jul 21, 2014/4:00 p.m. ET
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