The initiative to reduce exposure has reduced the insurer's policy count by about one million, Mr. Wilson said.

The combined ratio for Allstate's homeowners line was 104.4 for the quarter, an improvement over results from the second quarter last year and over the first quarter this year, but still unprofitable. Mr. Wilson said Allstate will keep seeking price increases and tighten underwriting standards.

A 6.1 percent increase in homeowners average premium was offset by a 4 percent decline in policies in force, the company said. Rate increases averaging 11.3 percent in 14 states were approved during the second quarter.

Second-quarter catastrophe losses were $636 million from 30 events. Last year Allstate suffered a second-quarter record of $818 million in catastrophe losses. The losses added 9.8 points to the property-liability combined ratio of 96.8 during the second quarter

Joseph P. Lacher Jr., president of Allstate Protection, said the company continues "pounding away" at balancing risk and returns, adjusting cover and rates.

Declines for the Encompass brand were driven by Allstate's desire to broaden the subsidiary's appetite for mono-line products to much more standard policyholders. "We got ahead of our skis there," Mr. Lacher said.

After some promising new business numbers in California and Florida last year, Allstate experienced lower new business this year as it "backed off somewhat" from California and is taking "aggressive actions" in Florida, Lacher said.

Allstate's Florida-based companies, Castle Key Insurance Company and Castle Key Indemnity, are seeking rate increases of 33 percent and 18 percent, respectively.

Allstate Financial took a $107 million loss in the second quarter. Net income was down 5.3 percent to $1.05 billion compared to the second quarter in 2009.