Allstate may pay more wildfire claims than rivals

Allstate Corp., the largest publicly traded home insurer in the U.S., may face more claims from the California wildfires than competitors including Travelers Cos. and Chubb Corp., an analyst at Barclays Plc said.

Allstate's claims costs from the fires will potentially be below Barclays's catastrophe estimate for the third quarter, and losses "should be manageable" for the entire industry, Jay Gelb wrote today in a note to clients. The largest blaze, the so-called Station Fire, has caused at least $7.7 million in property damage so far, Los Angeles County Fire Department inspector Steve Zermeno said yesterday.

Allstate, with about 11 percent of the California home insurance market, is the third-largest in the state behind policyholder-owned State Farm Mutual Automobile Insurance Co. and Farmers Insurance Group, a unit of Zurich Financial Services AG. California's Witch Fire of 2007, the third-costliest wildfire in U.S. history, caused about $1.3 billion in insured damages and cost Allstate $318 million, Gelb said.

"In 2007, Allstate's losses were significantly larger than would be implied by its market share," Gelb said. Travelers and Chubb are among insurers with a smaller market share that will have "modest" losses.

The 121,762-acre fire north of Los Angeles is threatening more than 12,000 homes and has destroyed at least 53 buildings, the U.S. Forest Service said today. More than 4,300 people have been evacuated.

Allstate fell 95 cents, or 3.2 percent, to $28.44 at 2:03 p.m. in New York Stock Exchange composite trading. The Northbrook-based insurer has declined 13 percent this year.

"We are just here assisting our customers who have been mandatorily evacuated or those that know their homes have been damaged," Allstate spokesman Mike Siemienas said near the scene of the fire in the city of La Canada Flintridge. "It's way too early to have any estimates."

Chubb's spokesman Mark Greenberg and Matt Bordonaro of Travelers said estimates for costs tied to the wildfire weren't yet available.