 |
Well, it certainly isn’t due to financial problems.
The information below is taken directly from AllState’s
2004 Annual Report. The truth is that if they can get
around paying, they will.
2004
Summary Annual Report
Chairman’s Letter |
| Market +
Strategy = Value |
Financial Highlights Highlights:
In 2004, Allstate incurred $2.0 billion in losses
related to the
four hurricanes in the Southeastern U.S. Nevertheless,
net income grew to $3.2 billion. Operating income*
increased by 16.1 percent to $3.1 billion. We generated
a record $33.9 billion in total revenues. And we delivered
a 15 percent return on equity.
| Net Income Per Diluted Share |
Year |
% |
| $3.83 |
2003 |
|
| $4.54 |
2004 |
18.5 |
Net income per diluted share, which increased 18.5
percent in 2004, divides net income by the number
of weighted average diluted shares outstanding. It
demonstrates the growth of net income during the year
that is attributable to each share of stock. >
| Operating Income
($ in millions) |
Year |
% |
| $3,091 |
2003 |
|
| $2,662 |
2004 |
16.1 |
In 2004, operating income rose to a record $3.1
billion. This is a common measure used by the investment
community to analyze our results. Operating income
reveals trends in our insurance and financial services
business that may be obscured by business decisions
and economic developments unrelated to the insurance
underwriting process.
| Revenues
($ in millions) |
Year |
% |
| $33,936 |
2003 |
|
| $32,149 |
2004 |
5.6 |
Revenues rose 5.6 percent to $33.9 billion in 2004.
Revenues indicate Allstate’s total premium and investment
results.
| Return
on Equity |
Year |
% |
| 2003 |
15.0% |
| 2004 |
14.2% |
Return on equity, which measures how well Allstate
used shareholders’ equity to generate earnings, increased
to 15.0 percent in 2004 from 14.2 percent in 2003.
| Book Value Per
Diluted Share |
Year |
% |
| $31.72 |
2003 |
|
| $29.04 |
2004 |
9.2 |
Book value per share, which rose 9.2 percent in
2004, is shareholders’ equity divided by the number
of diluted shares outstanding on December 31. This
demonstrates an increasing ownership interest in Allstate
on a per share basis.
| Shareholders’
Equity ($ in millions) |
Year |
% |
| $21,823 |
2003 |
|
| $20,565 |
2004 |
6.1 |
Shareholders’ equity, which is the company’s total
assets minus total liabilities, indicates the value
of the ownership interest of Allstate shareholders.
It increased 6.1 percent in 2004 to $21.8 billion
from $20.6 billion in 2003.
* Measures we use that are
not based on generally accepted accounting principles
(non-GAAP) are defined and reconciled to the most
directly comparable GAAP measure, and operating measures
we use are defined in the “Definitions of Non-GAAP
and Operating Measures” section.
Chairman's Letter | Financial Highlights | Metrics
| Leadership | Product Overview
Definitions of Non-GAAP and Operating Measures | Download
2004 Summary Annual Report (PDF, 1.2 MB)
Back to top
|
 |
Florida’s First District Court of Appeal has
just issued a Catastrophe Claim decision in a
First Party Bad Faith case. The decision does
not represent new law but it is significant. The
results are a reminder to people who have
handled Claims of this kind and a caution to
people who have not.
Hurricane Ivan totaled the residence of Mr. and Mrs.
Roy and Kerry Golmon in 2004. Vanguard is the Golmons’
Homeowner’s Insurance Company. Vanguard paid part of
its policy limits for the residence, a fact which is
buried in the opinion, but left unpaid much of the loss
to Mr. and Mrs. Golmons’ dwelling, and Vanguard did
not pay any part of the Golmons’ other claimed losses
such as Other Structures, Personal Property, and Loss
of Use among others. Vanguard denied any remaining Coverage
on the ground that is at the heart of many, many CatClaims
Coverage disputes: Vanguard refused to pay the full
policy limit(s) “because the loss to the Golmons’ property
was caused by both wind damage, which was covered under
the policy, and flood damage, which was not covered.”
The Golmons sued Vanguard for breach of contract and
for Florida Statutory Bad Faith. Vanguard filed a motion
to dismiss the Statutory Bad Faith counts which the
Trial Court denied. On appeal, Florida’s First District
applied settled Florida law to hold two things: First,
in Florida establishing Insurance Coverage is a necessary
first step or condition to pursuing Statutory Bad Faith
Claims and, in addition, the Insurance Company would
be prejudiced if it was forced to defend itself simultaneously
on the Contract Claim and on the Bad Faith Counts. The
First District reached these twin holdings regardless
of the fact that “Vanguard’s attorney conceded at the
hearing that the insurer had some liability under the
policy”. (Vanguard paid part of its policy limit for
loss that Vanguard apparently admitted is covered under
its policy.) The First District held that the Trial
Court’s finding that Insurance Coverage is undisputed
in this case, is erroneous: “Both the existence of liability
and the extent of damages are elements of a statutory
cause of action for bad faith that must be determined
before a statutory cause of action for bad faith will
lie.”
Although the First District was forced in this case
to quash the Trial Court’s Order, the First District
strongly suggested, regardless, that the Trial Court
should consider abating but not dismissing the Bad Faith
Claims against Vanguard while the case goes forward
on the Contract Claims in which the issue of Coverage
will be determined.
|
|
Back to top |
Insurance Company Tactics and Your Hurricane Damage
Claim
You’ve already lost your home.
If you rent or own your own site-built or
manufactured home, you are a good candidate for
hurricane insurance anywhere in Florida.
The level of coverage you are recommended to
carry, and your premiums, are determined by past
hurricane activity.
However, no matter how good you think your
insurance company or policy is, you should prepare
for resistance by your property insurer to cover
what you think should be replaced in the event of
hurricane damage.
Perhaps the most difficult thing people have had to
deal with in the last few years is the refusal of
many insurance companies to pay for water damage
that the insurance adjusters are increasingly
blaming as the cause of your hurricane damage,
rather than the winds that blew off your roof and
toppled your trees.
Insurance companies are in the business of making
money, so it is not in the best interest of
adjusters to be generous.
Be sure as you go into a hurricane season
that you have an up-to-date and accurate record of
your belongings.
This should include fresh pictures of your
property taken each year.
If the worst should happen, you’ll want your
insurance company to know that you’re prepared to
restore your home and property to its original
condition.
Even if your expenses are already high, be prepared
to ask your insurance agent about sewage backup,
inflations costs, changes to your home or family
structure, living expenses and additional flood
insurance when you have your yearly review of your
property and hurricane insurance.
Even renters that live on upper floors should
inquire about separate flood and hurricane insurance
coverage.
You should also consider making sure your
most valuable items, such as electronics and jewelry,
are covered in your policy.
When damage occurs, it’s up to you to make sure the
adjuster that shows up gets a good look at every
aspect of your home and fairly assesses what can be
repaired and what must be replaced.
Even if you don’t have flood insurance,
interior damage that’s secondary to wind damage may
be covered, and this is especially important when
drywall becomes moldy.
Flareups of mold spores from a wall that was
sodden, even once, can cause serious health
problems. Many policies do not cover mold damage, so
you need to specifically ask about this coverage.
Another way insurers try to wiggle out of claim
monies is to nickel and dime people to death on
small issues you might not have thought of.
For instance, water-soaked carpets might be
estimated to be cleanable, even when they clearly
are not.
If they do replace the carpet, they may not
pay for the price of how wide an actual roll of
carpet is, leaving you the cost of paying for all
the useless remnants.
They are also responsible for the cost of
mouldings and carpet backing.
When painting is required, they may try and
claim they’re not responsible for all the labour
required.
When walls are damaged, they may argue that
they don’t need to replace the insulation behind.
Do not automatically accept an
adjuster’s assessment of what is or is not covered.
Demand that they provide you with the specific
policy language that excludes that item from
coverage. If you are still in doubt, consult with an
attorney.
|
 |
|
