Allstate to Hire Sales Professionals

Yesterday, Allstate Corporation (ALL - Analyst Report) announced that the company’s insurance agency owners in Missouri and Nebraska are planning to hire 35 and 25 licensed sales professionals, respectively, by the end of this year.

Licensed sales professionals help the agencies by educating customers about the available insurance policies and assisting them in selecting the appropriate one. Thus, they play an important role in the growth of the agencies’ business.

However, the professionals will be employed by Allstate agencies and not the holding company itself. The agencies are independent contractors who work with Allstate. Currently, over 250 insurance agencies are working with the company.

The additional sales professionals are expected to improve the earnings and fundamental growth of Allstate that has faced significant declines based on higher catastrophe losses.

In the third quarter of 2011, operating income for the Allstate Financial segment spiked 24.1% year over year to $134 million, mainly due to improvement in the profitability of investment spread products along with expansion of underwritten products sales through Allstate agencies and growing Allstate Benefits.

Earnings Review

Allstate reported third quarter 2011 operating earnings per share of 16 cents, higher than the Zacks Consensus Estimate of 11 cents but significantly behind the year-ago quarter’s earnings of 83 cents.

The Zacks Consensus Estimate for fourth quarter earnings stands at 93 cents per share, showing  a jump of 83% from the year-ago quarter. In the past 30 days, 6 out of 19 firms, witnessed downward revisions, while 3 revised their estimates upward.

For 2011, earnings are estimated to be 81 cents per share, sinking about 72% from 2010. The company competes with The Travelers Companies (TRV - Analyst Report), Ace Limited (ACE - Analyst Report) and Berkshire Hathaway Inc. (BRK.A - Snapshot Report).

Allstate carries a Zacks #3 Rank, implying a short-term Hold rating with no clear directional pressure over the near term.

On Tuesday, the shares of the company closed at $26.63, up 0.53%, on the New York stock exchange.

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