Allstate to Add New Agencies - Analyst Blog

Date : 05/15/2012 @ 5:45AM
Source : Zacks
Stock : The Travelers Companies, Inc. (TRV)
Quote : 134.9  -3.25 (-2.35%) @ 3:59PM
The Travelers Companies, Inc. share price Chart

Allstate to Add New Agencies - Analyst Blog

Going ahead with its proactive investment approach, Allstate Corp. (ALL) is in the process of employing over 150 new insurance agencies across the Northern US and Florida. However, the company has not disclosed a definite time-line when it plans to complete the process.

Accordingly, Allstate plans to increase its agency owners in the North of US by about 140, primarily in the regions of Connecticut, Maine, New Hampshire, Pennsylvania, Rhode Island and Vermont. The company positioned about 220 agents in these areas between 2009 and 2011. Hence, the latest addition goal appears to be significant.

Moreover, Allstate plans to deploy more than 12 agency owners in North and Central Florida, which is further expected to hire over 100 support professionals in 2012. Meanwhile, the company has been aggressively building upon its business strength by deploying agencies in other parts of the US as well.

Earlier this year, Allstate laid out its aim of appointing about 28 new agency owners in Michigan by the end of 2012. The company also expects to deploy 35 agency owners in Ohio and another 20 in Indiana. Besides, the Allstate agencies in Michigan and Ohio intend to hire over 200 sales professionals in each of the states through 2012, while more than 100 sales representatives are projected to be hired in Indiana.

Hiring Plans In Line with Growth Strategy

The recent surge in sales professionals along with the expansion of agency owners reflect the company’s capital efficiency, strong operating leverage and its aim to generate an operating return on equity (ROE) of 13% by 2014 through business growth. This also complements Allstate’s long-term growth strategy to reposition products and distribution platforms to meet the changing needs of consumers.

Meanwhile, Allstate continues to work relentlessly to maintain its standard auto margins and improve returns in homeowners and Allstate Financial along with managing capital aggressively. The company is also taking strategic actions to reduce losses for Allstate business from catastrophes through enhanced property catastrophe reinsurance program, non-renewals, stricter underwriting guidelines, increased deductibles and discontinuance of selected lines of coverage, including earthquake.

Earnings Review

Beginning this month, Allstate reported operating earnings per share of $1.42 that outpaced the Zacks Consensus Estimate of $1.12 as well as the year-ago quarter earnings of 93 cents. A prudent capital management coupled with an impressive liquidity position resulted in considerable improvement in book value per share and combined ratio excluding the effect of catastrophes.

Besides, the Zacks Consensus Estimate for the second quarter of 2012 earnings is currently pegged at 92 cents, which is about 175% above the prior-year quarter’s earnings results. Of the 22 firms covering the stock, 12 revised their estimates upward in the last 30 days, while 4 downward revisions were witnessed. The upside potential for the second quarter currently stands at 1.09%.

Our Take

Overall, we believe Allstate will continually benefit due to its diversification, superior financial strength rating and proactive approach to investment. These factors have helped Allstate gain the second-largest personal lines writer position in the US, which also reflects its competitive strength against arch rivals such as Berkshire Hathaway-A (BRK.A) and The Travelers Companies (TRV).

However, Allstate’s exposure to catastrophe risks, capital losses and volatility in pricing, interest and loss costs will continue to impact the premiums and investment portfolio in the upcoming quarters. Hence, we maintain a Neutral rating on Allstate in the long run, with a Zacks Rank #3, which translates in to a short-term Hold recommendation.

ALLSTATE CORP (ALL): Free Stock Analysis Report
BERKSHIRE HTH-A (BRK.A): Free Stock Analysis Report
TRAVELERS COS (TRV): Free Stock Analysis Report
To read this article on click here.
Zacks Investment Research

The Travelers Companies, Inc. (NYSE:TRV)
Historical Stock Chart

1 Year : From Mar 2017 to Mar 2018

Click Here for more The Travelers Companies, Inc. Charts.

The Travelers Companies, Inc. (NYSE:TRV)
Intraday Stock Chart

Today : Saturday 24 March 2018

Click Here for more The Travelers Companies, Inc. Charts.

Latest TRV Messages

{{bbMessage.M_Alias}} {{bbMessage.MSG_Date}} {{bbMessage.HowLongAgo}} {{bbMessage.MSG_ID}} {{bbMessage.MSG_Subject}}

Loading Messages....

No posts yet, be the first! No {{symbol}} Message Board. Create One! See More Posts on {{symbol}} Message Board See More Message Board Posts
Your Recent History
Gulf Keyst..
FTSE 100
UK Sterlin..
Stocks you've viewed will appear in this box, letting you easily return to quotes you've seen previously.

Register now to create your own custom streaming stock watchlist.

NYSE, AMEX, and ASX quotes are delayed by at least 20 minutes.
All other quotes are delayed by at least 15 minutes unless otherwise stated.

By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions

P:33 V:us D:20180325 03:37:39