April Fool – the joke’s on Allstate

Allstate Corporation announced a quarterly dividend of twenty cents ($0.20) on each outstanding share of the Corporation’s common stock – on Fat “cat” Tuesday, no less!  The dividend is payable in cash on April 1, 2009 to stockholders of record at the close of business on March 13, 2009. h/t ClS

Hopefully, Allstate didn’t tap whatever they might have set aside as a qui tam reserve.  If the 5th Circuits recent Opinion in error does move the government to intervene in Rigsby and Branch, we do not yet have the change we need.

Sop just  posted Insurers Kill the Rally Once Again over at the All finance board.  See if you don’t agree this further begs the government’s attention.

Here we go again with the insurance crash. This time it is fueled by the slash in the Allstate dividend off of life insurance worries. It comes right after Lincoln National almost eliminated its dividend yesterday. We have to understand that the pressure from these companies — and they include Prudential and Hartford (oh, man, is that one down) — is now coming directly from these firms’ investing portfolios. We are now in the throes of a remarkably vicious circle, in that these companies cannot raise enough capital to offset their commercial real estate holdings, which seem to decline by the day. It looks like all of these companies had the same optimistic playbook. Right now the focus is on Citigroup and Bank of America and nationalization. I am far more concerned right now about a life insurer or an annuity company going bust….

Now, for the rest of Allstate’s announced April Fool prank.

Allstate has a history of proactively and prudently managing our capital, while consistently returning substantial amounts of capital to our shareholders. As part of that process we calibrate our dividends to company earnings and also ensure that Allstate’s payout ratio is competitive with the marketplace,” said Thomas J. Wilson, chairman, president and chief executive officer. “In light of recent earnings, Allstate has decided to reduce our dividend for this quarter to a level we believe puts Allstate’s payout ratio in line with our peers.”

Wilson continued, “Recalibrating our dividend supports all three of our 2009 corporate priorities: maintaining financial strength; investing to build customer loyalty and funding initiatives to reinvent protection and retirement for the consumer. These priorities help us focus relentlessly on those actions that will help us manage through these turbulent times and build long term success. That, in turn, will provide the most value to our shareholders and customers.”

The Allstate Corporation (NYSE: ALLNews) is the nation’s largest publicly held personal lines insurer. Widely known through the “You’re In Good Hands With Allstate®” slogan, Allstate is reinventing protection and retirement to help individuals in approximately 17 million households protect what they have today and better prepare for tomorrow. Customers can access Allstate products and services such as auto insurance and homeowners insurance through approximately 14,700 exclusive Allstate agencies and financial representatives in the U.S. and Canada, or in select states at allstate.com and 1-800 Allstate®. Encompass® and Deerbrook® Insurance brand property and casualty products are sold exclusively through independent agents. The Allstate Financial Group provides life insurance, supplemental accident and health insurance, annuity, banking and retirement products designed for individual, institutional and worksite customers that are distributed through Allstate agencies, independent agencies, financial institutions and broker-dealers. Customers can also access information about Allstate Financial Group products and services at myallstatefinancial.com.

One thought on “April Fool – the joke’s on Allstate”

Leave a Reply

Your email address will not be published. Required fields are marked *