NEW YORK (CNN/Money) - Allstate observers may want to brace themselves for a particularly dismal third quarter earnings report.

But with a little help from its life and auto operations, the hit for the largest auto and home insurer may not be so bad.

At first glance, though, Allstate (Research)'s earnings numbers due after the bell Wednesday are likely to be disappointing in the wake of the devastating hurricanes in the third quarter.

Earnings tracker Thomson First Call estimates Allstate could post a loss of 68 cents, down from an 8 cents a share profit one year ago. Still analyst estimates vary widely from a $2.58 loss to $1.59 cents in profit for the company. It's difficult to determine a true consensus as many have opted not to revise estimates to reflect the effect of the hurricanes.

But one thing's for sure – Allstate will post a significant loss when it reports its third quarter earnings after the bell Wednesday.

According to the most recent 2004 data by Insurance Information Institute, Allstate had a 21 percent market share in Louisiana, making it the second-largest homeowners' insurance provider.

Risk modeling firms have suggested that total insured losses from Hurricane Katrina alone could cost the industry $25 billion to $60 billion.

But just what kind of loss the company will experience is still up in the air. Unlike competitors, such as American International Group which estimated that it will see a $1 billion loss from the hurricanes, Allstate has chosen to stay mum on its loss prospects.

"We expect it to be a really big loss in the quarter but Allstate hasn't come out with an estimate and its hard to tell how big of a loss it will be," said Paul Newsome, senior property-casualty analyst at A.G. Edwards. "That's pretty unusual and it makes me a little nervous that they might post a bigger loss than expected."

Analysts expectations are widely varied with some calling for a loss of $2 billion to as much as $6 billion.

Newsome said fundamentally the size of the loss won't matter as much because the company is well-capitalized and will be able to absorb the losses without worrying about raising additional capital.

Donald Light, senior analyst at research and consulting firm Celent LLC, added that while it will experience an earnings hit, the company may have been able to mitigate some of the damage if it was properly reinsured in the region.

He added that once the initial dismay from the report passes, market watchers may breathe a sigh of relief if the company is able to post solid earnings in the absence of the storms. Light said the company's life insurance and investment operations within its Allstate Financial business have been growing rapidly and could be a source of positive news for investors.

"If they are able pump through their life and banking products, that would be good news for the company because that's a more predictable flow of earnings than property casualty," he said.

Industry observers are also going to be keeping an eye on the company's auto lines. Auto insurance has been a steady performer in recent quarters given favorable loss cost trends -- which means insurers incurred fewer expenses from claims.

Analysts said, however, that there have been recent signs that loss cost trends may be worsening and the market will be looking to Allstate for any indication of weakness.

"Ex-catastrophes, auto profitability is going to be the biggest thing for the company" said Adam Klauber, managing director at Cochran, Caronia Securities. "If you see a profitable auto business for Allstate, then that might indicate stronger than expected numbers for 2006."

And rate increases will also dominate the market. A debate has been brewing within the insurance industry in the wake of the third quarter hurricanes. Market observers speculated that the industry may be inclined to raise homeowner rates – a scenario that helped lift insurance stocks after the hurricanes.

"Rate increases is one of a number of questions that personal lines companies, like Allstate, will face," A.G. Edwards' Newsome said.

He added while the market is pricing in the potential for rate increases, it's unclear whether insurers will raise rates in the affected region or across the board and market watchers will be following Allstate's comments closely for an answer.

Overall though, analysts, are expecting most market watchers to disregard the third quarter when determining Allstate's strength.

"The third quarter is clearly an anomaly," said Newsome. "I think to a certain extent Allstate will get a pass this time because everyone is expecting a huge loss."

Analysts said the company is undervalued related to its peers, such as Progressive, given concerns over its hurricane losses. But Cochran, Caronia Securities' Klauber, who has an aggressive buy on the stock, said Allstate is trading at 8-times its forward-looking price-earnings ratio and he has a price target of $70 on the stock. Allstate recently traded at about $53.46.

"This is a stock that produces high returns on an historical basis," he said. "If third quarter results are favorable, you should see some positive momentum in the stock."

None of the analysts quoted in the story own shares of Allstate.

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