NEW YORK (CNN/Money) - Allstate, the largest publicly traded homeowners and auto insurer in the U.S., said it plans to scale back its exposure to the Gulf Coast homeowner's market following the devastation of hurricanes Katrina and Rita this summer.
Speaking at the company's third quarter earnings conference call with analysts earlier Thursday, Chief Executive Edward Liddy said Allstate would continue to provide assistance to those affected by the deadly hurricanes but would curb its exposure, a company spokeswoman confirmed. Liddy didn't provide an estimate of how much the company would scale back in the region.
The news came as Allstate, which had not previously disclosed its losses from hurricanes, said hurricanes Katrina and Rita triggered over $3 billion of catastrophe payouts in the quarter, up almost $2 billion from the same quarter last year. The company slashed its full-year operating profit target to between $2.35 and $2.50 per share from an earlier range of $6 to $6.40 a share as a result of the hurricanes.
The Northbrook, Illinois-based company said its third quarter loss was $1.55 billion, or $2.36 a share, compared with net income of $56 million, or 9 cents a share, a year ago.
On an operating basis, excluding items such as gains and losses on security sales, Allstate lost $2.52 a share, compared with an 8 cent a share gain last year.
Allstate was expected to lose 68 cents per share in the period, according to a consensus of analysts surveyed by earnings tracker Thomson First Call. However, because of uncertainty surrounding Katrina losses, estimates ranged from a profit of $1.59 per share to a loss of $2.85 a share.
Allstate said its catastrophe losses in the third quarter were $3.06 billion compared with $1.11 billion during the third quarter of last year. Analysts expectations had widely varied with some calling for a loss of $2 billion to as much as $6 billion.
The effect of the hurricanes on the net loss was $4.67 a share compared with $1.59 in the year ago period.
Allstate's move to cut exposure in the region mirrors a similar pullback Allstate enacted in Florida after the barrage of hurricanes last year. The company didn't renew coverage for over 90,000 homeowners in hurricane-battered Florida last year and received rate increases throughout the state to reflect the increasing risk.