NORTHBROOK, Ill. (BestWire) - Continuing its trend of reducing its catastrophe risk, Allstate Corp. added Maryland, North Carolina, South Carolina, Alabama and Virginia to the list of states in which it has pulled back on homeowners' coverage.

Mike Trevino, a spokesman for the company, said the changes are multifaceted. In some cases, the company has decided to halt the writing of new homeowners' policies, and in others, some current policyholders will be unable to renew their policies.

Such is the case in South Carolina, where Allstate (NYSE:ALL) is dropping 12,000 homeowners in eight coastal counties. In North Carolina, the company will drop 4,000 policyholders in 14 counties.

No new policies will be written in many coastal counties in the other states, including Maryland, but current policyholders will retain coverage.

Earlier this month, Allstate announced a halt to new homeowners' policies statewide in Connecticut, Delaware and New Jersey.

Trevino said the actions represent a strategy the company has had in place since 2005.

"We have said for quite some time that we're concerned about the increased risk of hurricane damage to the United States and that we were going to, essentially, get smaller in our homeowners' business for areas that are exposed to hurricane damage," Trevino said. "The actions we're taking in Maryland are simply our continuation of our concern around hurricane exposure."

Earlier this year, Allstate announced it would not take on new homeowners policies in eight coastal counties in New York, including those in New York City and Long Island, and Westchester County (BestWire, Jan. 13, 2006). This followed the company's decision last year to withdraw from the commercial multi-peril market in Florida and to halt renewals of nearly 95,000 homeowners policies (BestWire, May 20, 2005).

Earlier this year, the company also said it would no longer would write new earthquake endorsements and that it would begin non-renewing current earthquake coverage in most parts of the United States (BestWire, June 6, 2006).

Allstate's cuts in coverage mirror those undertaken by numerous companies, particularly in the wake of the 2004 and 2005 hurricane seasons.

"What scientists and meteorologists are indicating is that the coast of the U.S. is entering a period that will be prolonged, where we will experience more frequent and more intense hurricanes," Trevino said. "We have reviewed that analysis, coupled with population shifts toward the coastal U.S., as well as increasing property values, and determined that we want less exposure for the coastal U.S. locations."

Long-term change where it pertains to the availability and affordability of homeowners' insurance won't happen without a federal backstop for natural disasters, Trevino added.

In addition to bills on Capitol Hill and actions by groups such as the National Association of Insurance Commissioners in moving toward a federal catastrophe backstop, Allstate has lobbied heavily on this front via its ProtectingAmerica.org, which is headed by James Lee Witt, former director of the Federal Emergency Management Agency and former deputy homeland security secretary Admiral James M. Loy.

"We think there's a better way for individuals to get the protection they need," Trevino said. "We have been saying for a long time, that we think the risk is rising. Some events are so large that they require the involvement of state and federal government."

Allstate Insurance Group currently has a Best's Financial Strength Rating of A+ (Superior).

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