S&P cuts Allstate to negative

Standard & Poor's said it revised the outlook to negative from stable on Allstate Corp., Allstate Insurance Co. and its core property-liability insurance companies, as well as the life insurance companies deemed strategically important to the group.

The agency also said it affirmed the A- counterparty credit rating, A-2 commercial-paper rating and BBB junior subordinated debt ratings on Allstate.

Also affirmed includes the AA- counterparty credit and financial strength ratings on Allstate Protection, along with the A+ counterparty credit and insurance financial strength ratings on Allstate Financial.

The negative outlook reflects a deterioration in enterprise capital adequacy resulting from a combination of sizable catastrophe losses, the acquisition of Esurance and Answer Financial, S&P said, and a continued aggressive share-repurchase and dividend strategy.

Capital adequacy is deficient at this rating level and is a rating weakness, the agency said.

The outlook revision also stems from an uncertainty in how continued catastrophe-risk reduction efforts in Allstate's homeowners business will affect its personal auto business and overall competitive position, S&P said.

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