Looking past catastrophe losses, Allstate is making progress on its plans to improve profit by raising rates and reducing its presence in less-favorable areas, says Thomas J. Wilson, chairman, president and chief executive officer, in a statement.

Homeowners' insurance rate increases averaging nearly 14 percent were approved during the third quarter in 15 states. Premiums written increased 1.5 percent over the same period in 2010 as a 5 percent jump in average gross premium was offset somewhat by a 4.2 percent drop in policies-in-force because of restrictions in new business and decision not to offer renewals to some policyholders, Allstate says.

Allstate's auto insurance segment has reduced volumes in New York and Florida “as growth was balanced with a focus on maintaining auto profitability,” says Allstate. For this reason, premiums written during the third quarter declined 0.8 percent compared to the same time last year despite increasing average premiums.

Steps to adjust its book of business along with investment portfolio management allowed the company to earn a profit and overcome the catastrophe losses, adds Wilson.

Allstate Financial reduced the size of fixed annuity business in its portfolio, as Allstate's consolidated investment portfolio was $97.5 billion as of September 30 compared to $100.5 billion at Dec. 31, 2010.

Net investment income was $994 million, a 1.1 percent decline from the third quarter a year ago.

During the quarter Allstate closed on its acquisition of Esurance and Answer Financial from White Mountains Insurance Group. Allstate also completed a $1 billion share repurchase program during the quarter.