Allstate’s Property-Liability business
is the second largest personal property and
casualty insurer in the United States. It
is principally engaged in the sale of private
passenger auto and homeowners insurance.
Premiums written
increased to $23.92 billion in 2002 from
$22.61 billion in 2001 due to increases
in the standard auto and homeowners lines.
These increases were due to increased premium
rates, but were partially offset by a decline
in the number of policies. Increases in
Premiums written in standard auto and homeowners
were partially offset by declines in Premiums
written in the Allstate brand non-standard
auto line related to the implementation
of programs to address profitability trends
in this line.
Net income for Property-Liability
increased to $1.27 billion in 2002 from $926
million in 2001. This increase was the result
of higher Operating income, partially offset
by increased realized capital losses and the
Cumulative effect of a change in accounting
principle.
Operating income for Property-Liability increased to $1.63
billion in 2002 from $1.05 billion in 2001.
This increase was due to higher Premiums earned
and lower catastrophe losses. These factors
were partially offset by higher insurance
claims and claims expenses and declines in
Net investment income. During 2002, claims
and claims expenses were affected by a higher
average cost per claim, which was partially
offset by a lower rate of claim occurrence.
Outlook
Property-Liability
will continue to seek approval for rate changes
wherever and whenever it’s appropriate,
and to pursue other actions such as underwriting
process improvements, that will promote a
targeted level of profitability. Strategic
plans are also in place to increase the retention
of current customers, increase the number
of agents and market to a focused group of
consumers who are best able to provide profitable
growth.
