Allstate Says Profit Won’t Meet Forecasts

Allstate Corp., the No. 2 U.S. auto and home insurer, said third-quarter profit will fall short because of bigger-than-expected losses on homeowner policies.

The announcement sent Allstate shares down $3.43, or 9%, to $32.85 on the New York Stock Exchange.

The Northbrook, Ill.-based firm said operating earnings for the third quarter will be 53 cents to 57 cents a share, down from 71 cents a year earlier, based on preliminary estimates. Analysts on average were expecting 64 cents, according to Thomson Financial/First Call.

Allstate is facing competition from providers of low-cost homeowners insurance when home-repair costs are soaring and regulatory constraints are limiting rate increases.