Why Allstate Stock Sank by Almost 10% This Week
In relatively prosperous times, insurance stocks are considered by many to be safe investments. That sure wasn't the case with Allstate (NYSE: ALL) this week, however. According to data compiled by S&P Global Market Intelligence, the veteran insurer's share price deteriorated by just shy of 10% during the period. Dispiriting preliminary results were the culprit behind the decline.
On Wednesday, Allstate furnished a set of projections for its fourth quarter. The insurer expects to report that its written premiums increased by over 11% year over year to $11.5 billion. That anticipated increase is due to higher premiums for vehicle and home insurance policies.
But with the awful weather the U.S. experienced in December with Winter Storm Elliott, catastrophe losses were considerable. Allstate is estimating that it will book $779 million in that line item before taxes for the quarter. Of that amount, $616 million was expected to have been incurred in December alone.
Source Fool.com
