Allstate fourth-quarter hit by wildfire losses

NEW YORK (Reuters) - Allstate Corp (ALL.N), the largest publicly traded U.S. home insurer, said on Tuesday its net income fell 37.3 percent in the fourth quarter, hurt by catastrophe claims from California wildfires.

Allstate said net earnings were $760 million, or $1.36 a share, down from $1.21 billion, or $1.93 a share, in the year-earlier quarter.

Operating income, which excludes investment gains and losses, was $701 million, or $1.24 a share, in the fourth quarter, compared with $1.12 billion, or $1.78 a share, in the same quarter the prior year.

Total catastrophe losses were $472 million, compared with $279 million a year ago. Allstate said $318 million of those losses were from wildfires.

"While catastrophe costs were up, they weren't too onerous," said Douglas Pawlowski, an analyst with Fitch Ratings. "At $1.4 billion for 2007 they were a far cry from what we saw in 2005."

In 2005, following three hurricanes that devastated the Southeast coast of the United States, Allstate recorded $5.7 billion of losses from catastrophes.

Allstate did not provide a dollar figure outlook for the coming year but did estimate spending only 87 to 89 cents of every premium dollar it collected for claims and expenses.

In the fourth quarter it spent nearly 96 cents of each premium dollar to pay claims and expenses, but without the catastrophes, it was less than 89 cents, the insurer said.

Allstate said unrealized losses from mortgage and asset-backed securities totaled $502 million due to illiquidity in those markets. Write-downs on those investments were $82 million. Allstate said it did not anticipate any additional impairments to these securities that would be permanent unless there was sustained weakness in the market.

In aftermarket trading, the home and car insurer's shares were unchanged from their close at $52.25, down 42 cents, or 0.8 percent, on the New York Stock Exchange.

In the last 12 months, Allstate have fallen nearly 18 percent compared with a roughly 11 percent decline in the Standard & Poor's insurance index (.GSPINSC).