Allstate Shares Suffer Longest Slump in 17 Years as Fires Raged
(Bloomberg) -- Allstate Corp. tumbled for nine straight days, the longest string of losses since 2001, as coverage costs from the deadliest fires in California’s history are tallied.
The company seemed to have “out-sized exposure” to the location of the blazes, Wells Fargo & Co. analyst Elyse Greenspan said Thursday in a note to clients. The shares have dropped 11 percent this month, erasing about $3 billion from the car and home-insurance giant’s market capitalization, according to data compiled by Bloomberg.
The Camp and Woolsey fires will cost Allstate $529 million after taxes, the company said on Wednesday. California’s insurance commissioner estimates that November’s fires will cost insurers a total of $9.05 billion, a figure that could climb as companies process more claims. The Camp, Hill and Woolsey fires destroyed 18,000 properties, said Brad Alexander, a spokesman for California Office of Emergency Services.
The fires also spurred the insurer to demand better building codes and power line maintenance.
“It’s time to address the impact that more severe weather is having on Americans instead of fighting about climate change,” Chief Executive Officer Tom Wilson said Wednesday in a statement. “It is now time to come up with longer term solutions, such as ensuring power lines are properly maintained, homes have natural fire barriers and building codes reflect increased severe weather.”
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