Allstate Corp.'s first-quarter underwriting profits grew 26percent, compared with the same period in 2005, as earnings grew bya similar amount.

The Northbrook, Ill.-based insurer reported net income of $1.4billion, up from $1.1 billion a year earlier, to beat analysts'expectations by a wide margin.

While underwriting premiums in property and liability grew 2.2percent from the first quarter of last year, underwriting incomeincreased $261 million to $1.24 billion for a 26.6 increase from$981 million in the same 2005 period.

Increased earned premium and continued favorable auto andhomeowners' loss frequencies, plus net prior-year reservere-estimates drove the underwriting profit hikes, the companyreported.

Company chairman Edward Liddy said relatively lightfirst-quarter catastrophe losses and progress in implementation ofits new property management catastrophe program also helped toimprove numbers.

“We are intentionally limiting the amount of new propertyinsurance business we add to our books–particularly in parts of NewYork, Texas, California and certain other states–along withreducing our catastrophe exposure in coastal New York and Florida,”Mr. Liddy said.

The company has sought increases for nearly two-thirds of morethan 300 property insurance filings in catastrophe-prone states toreflect the cost of a beefed-up reinsurance program, Mr. Liddysaid.

“In most states we are no longer offering new coverage forearthquake damage, which is generally an optional coverage onproperty insurance coverage,” Mr. Liddy said.

Other results included:

o Property-liability premiums written grew 2.2 percent over thefirst quarter of 2005, driven by Allstate brand standard auto andhomeowners increases of 4.1 percent and 2.4 percent,respectively.

o Excluding the cost of catastrophe reinsurance, premiumswritten grew 2.7 percent in the first quarter, compared with lastyear's same period.

o First-quarter catastrophe losses of $107 million represented a34.8 percent decline from the 2005 figure of $164 million.

o Consolidated revenue rose 4.3 percent in the first quarter to$9.08 billion.