The Allstate Corporation (ALL) 8-K Allstate Reports Strong Fourth Quarter 2011 Earnings and Continued Progress

Exhibit 99.2

THE ALLSTATE CORPORATION

Investor Supplement

Fourth Quarter 2011

The consolidated financial statements and financial exhibits included herein are unaudited. These consolidated financial statements and exhibits should be read in conjunction with the consolidated financial statements and notes thereto included in the most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.  The results of operations for interim periods should not be considered indicative of results to be expected for the full year.

Measures used in these financial statements and exhibits that are not based on generally accepted accounting principles (“non-GAAP”) and operating measures are denoted with an asterisk (*) the first time they appear.  These measures are defined on the page “Definitions of Non-GAAP and Operating Measures” and non-GAAP measures are reconciled to the most directly comparable GAAP measure herein.

THE ALLSTATE CORPORATION

Investor Supplement - Fourth Quarter 2011

Table of Contents

	PAGE
Consolidated
Statements of Operations	1
Contribution to Income (1)	2
Revenues	3
Statements of Financial Position	4
Book Value Per Share	5
Return on Shareholders’ Equity	6
Debt to Capital	7
Statements of Cash Flows	8
Analysis of Deferred Policy Acquisition Costs	9-10
Historical Summary of Consolidated Operating and Financial Position Data (1)	11
Property-Liability Operations
Property-Liability Results (1)	12
Historical Property-Liability Results (1)	13
Underwriting Results by Area of Business	14
Historical Underwriting Results by Area of Business	15
Premiums Written by Market Segment (1)	16
Allstate Protection Market Segment Analysis (1)	17
Allstate Protection Historical Market Segment Analysis (1)	18
Historical Impact of Net Rate Changes Approved on Premiums Written (1)	19
Standard Auto Profitability Measures (1)	20
Non-standard Auto Profitability Measures	21
Auto Profitability Measures (1)	22
Homeowners Profitability Measures	23
Allstate Brand Domestic Operating Measures and Statistics (1)	24
Homeowners Supplemental Information	25
Effect of Catastrophe Losses on the Combined Ratio	26
Allstate Protection Historical Catastrophe by Size of Event	27
Effect of Prior Year Reserve Reestimates on the Combined Ratio (1)	28
Historical Prior Year Reserve Reestimate	29
Historical Property-Liability Loss Reserves	30
Asbestos and Environmental Reserves	31
Allstate Financial Operations and Reconciliations
Allstate Financial Results	32
Historical Allstate Financial Results	33
Return on Attributed Equity (1)	34
Premiums and Contract Charges (1)	35
Change in Contractholder Funds	36
Analysis of Net Income	37
Allstate Financial Weighted Average Investment Spreads	38
Allstate Financial Supplemental Product Information (1)	39
Corporate and Other Results (1)	40
Investments
Investments	41
Unrealized Net Capital Gains and Losses on Security Portfolio by Type	42
Gross Unrealized Gains and Losses on Fixed Income Securities by Type and Sector	43
Fair Value and Unrealized Net Capital Gains and Losses for Fixed Income Securities by Credit Rating	44
Realized Capital Gains and Losses by Transaction Type	45
Property-Liability Net Investment Income, Yields and Realized Capital Gains and Losses (Pre-tax)	46
Allstate Financial Net Investment Income, Yields and Realized Capital Gains and Losses (Pre-tax)	47
Definitions of Non-GAAP and Operating Measures	48

(1)Reflects new measures added since prior quarter

THE ALLSTATE CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

($ in millions, except per share data)

		Three months ended																								Twelve months ended
		Dec. 31, 2011			Sept. 30, 2011			June 30, 2011			March 31, 2011			Dec. 31, 2010			Sept. 30, 2010			June 30, 2010			March 31, 2010			Dec. 31, 2011			Dec. 31, 2010
Revenues
Property-liability insurance premiums	$	6,605		$	6,432		$	6,457		$	6,448		$	6,442		$	6,499		$	6,513		$	6,503		$	25,942		$	25,957
Life and annuity premiums and contract charges		570			552			547			569			531			548			545			544			2,238			2,168
Net investment income		975			994			1,020			982			998			1,005			1,049			1,050			3,971			4,102
Realized capital gains and losses:
Total other-than-temporary impairment losses		(128	)		(197	)		(82	)		(156	)		(300	)		(99	)		(288	)		(250	)		(563	)		(937	)
Portion of loss recognized in other comprehensive income		4			(6	)		(4	)		(27	)		27			(68	)		(18	)		(5	)		(33	)		(64	)
Net other-than-temporary impairment losses  recognized in earnings		(124	)		(203	)		(86	)		(183	)		(273	)		(167	)		(306	)		(255	)		(596	)		(1,001	)
Sales and other realized capital gains and losses		210			467			143			279			389			23			(145	)		(93	)		1,099			174
Total realized capital gains and losses		86			264			57			96			116			(144	)		(451	)		(348	)		503			(827	)
Total revenues		8,236			8,242			8,081			8,095			8,087			7,908			7,656			7,749			32,654			31,400
Costs and expenses
Property-liability insurance claims  and claims expense		4,198			5,132			6,355			4,476			4,842			4,603			4,714			4,792			20,161			18,951
Life and annuity contract benefits		430			455			422			454			443			445			485			442			1,761			1,815
Interest credited to contractholder funds		405			405			417			418			449			445			450			463			1,645			1,807
Amortization of deferred policy acquisition costs		1,042			1,122			1,018			1,051			1,065			1,006			949			1,014			4,233			4,034
Operating costs and expenses		1,003			825			802			838			835			828			789			829			3,468			3,281
Restructuring and related charges		16			8			11			9			(3	)		9			13			11			44			30
Interest expense		92			92			91			92			92			91			92			92			367			367
Total costs and expenses		7,186			8,039			9,116			7,338			7,723			7,427			7,492			7,643			31,679			30,285
Gain (loss) on disposition of operations		2			-			6			(23	)		(1	)		9			2			1			(15	)		11
Income (loss) from operations before income tax expense (benefit)		1,052			203			(1,029	)		734			363			490			166			107			960			1,126
Income tax expense (benefit)		328			38			(409	)		215			67			123			21			(13	)		172			198
Net income (loss)	$	724		$	165		$	(620	)	$	519		$	296		$	367		$	145		$	120		$	788		$	928
Earnings per share: (1)
Net income (loss) per share - Basic	$	1.44		$	0.32		$	(1.19	)	$	0.98		$	0.55		$	0.68		$	0.27		$	0.22		$	1.51		$	1.72
Weighted average shares - Basic		504.5			512.0			523.1			531.0			539.5			540.9			540.7			540.5			520.7			540.3
Net income (loss) per share - Diluted (2)	$	1.43		$	0.32		$	(1.19	)	$	0.97		$	0.55		$	0.68		$	0.27		$	0.22		$	1.51		$	1.71
Weighted average shares - Diluted (2)		506.8			514.2			523.1			533.6			542.0			543.0			543.0			541.8			523.1			542.5
Cash dividends declared per share	$	0.21		$	0.21		$	0.21		$	0.21		$	0.20		$	0.20		$	0.20		$	0.20		$	0.84		$	0.80

(1)In accordance with GAAP, the quarter and year-to-date per share amounts are calculated discretely.  Therefore, the sum of each quarter may not equal the year-to-date amount.

(2)As a result of the net loss for the three-months ended June 30, 2011, weighted average dilutive potential common shares outstanding resulting from 2.1 million stock options and 0.5 million restricted stock units (non-participating) were not included in the computation of diluted earnings per share in that quarter, since inclusion of these securities would have an anti-dilutive effect.

1

THE ALLSTATE CORPORATION

CONTRIBUTION TO INCOME

($ in millions, except per share data)

	Three months ended																									Twelve months ended
		Dec. 31, 2011			Sept. 30, 2011			June 30, 2011			March 31, 2011			Dec. 31, 2010			Sept. 30, 2010			June 30, 2010			March 31, 2010			Dec. 31, 2011			Dec. 31, 2010
Contribution to income
Operating income (loss) before the impact of restructuring and related charges	$	761		$	89		$	(635	)	$	503		$	270		$	457		$	450		$	382		$	718		$	1,559
Restructuring and related charges, after-tax		(11	)		(5	)		(7	)		(6	)		1			(5	)		(9	)		(7	)		(29	)		(20	)
Operating income (loss) *		750			84			(642	)		497			271			452			441			375			689			1,539
Realized capital gains and losses, after-tax		55			170			36			63			76			(93	)		(294	)		(226	)		324			(537	)
Valuation changes on embedded derivatives that are not hedged, after-tax		(13	)		(4	)		(3	)		8			-			-			-			-			(12	)		-
DAC and DSI (amortization) accretion relating to realized capital gains and losses and valuation changes on embedded derivatives that are not hedged, after-tax		(18	)		(78	)		(5	)		(26	)		(43	)		7			4			(2	)		(127	)		(34	)
DAC and DSI unlocking relating to realized capital gains and losses, after-tax		-			-			-			1			-			-			-			(18	)		1			(18	)
Reclassification of periodic settlements and accruals on non-hedge derivative instruments, after-tax		(8	)		(8	)		(10	)		(9	)		(7	)		(5	)		(7	)		(10	)		(35	)		(29	)
Business combination expenses and the amortization of purchased intangible assets, after-tax (3)		(42	)		-			-			-			-			-			-			-			(42	)		-
Gain (loss) on disposition of operations, after-tax		-			1			4			(15	)		(1	)		6			1			1			(10	)		7
Net income (loss)	$	724		$	165		$	(620	)	$	519		$	296		$	367		$	145		$	120		$	788		$	928
Income per share - Diluted (1)(2)
Operating income (loss) before the impact of restructuring and related charges	$	1.50		$	0.17		$	(1.21	)	$	0.94		$	0.50		$	0.84		$	0.83		$	0.70		$	1.37		$	2.87
Restructuring and related charges, after-tax		(0.02	)		(0.01	)		(0.02	)		(0.01	)		-			(0.01	)		(0.02	)		(0.01	)		(0.05	)		(0.03	)
Operating income (loss)		1.48			0.16			(1.23	)		0.93			0.50			0.83			0.81			0.69			1.32			2.84
Realized capital gains and losses, after-tax		0.11			0.33			0.07			0.12			0.14			(0.17	)		(0.53	)		(0.42	)		0.62			(0.99	)
Valuation changes on embedded derivatives that are not hedged, after-tax		(0.03	)		(0.01	)		(0.01	)		0.02			-			-			-			-			(0.02	)		-
DAC and DSI (amortization) accretion relating to realized capital gains and losses and valuation changes on embedded derivatives that are not hedged, after-tax		(0.03	)		(0.15	)		(0.01	)		(0.05	)		(0.08	)		0.01			-			-			(0.24	)		(0.06	)
DAC and DSI unlocking relating to realized capital gains and losses, after-tax		-			-			-			-			-			-			-			(0.03	)		-			(0.03	)
Reclassification of periodic settlements and accruals on non-hedge derivative instruments, after-tax		(0.02	)		(0.01	)		(0.02	)		(0.02	)		(0.01	)		-			(0.01	)		(0.02	)		(0.07	)		(0.06	)
Business combination expenses and the amortization of purchased intangible assets, after-tax (3)		(0.08	)		-			-			-			-			-			-			-			(0.08	)		-
Gain (loss) on disposition of operations, after-tax		-			-			0.01			(0.03	)		-			0.01			-			-			(0.02	)		0.01
Net income (loss)	$	1.43		$	0.32		$	(1.19	)	$	0.97		$	0.55		$	0.68		$	0.27		$	0.22		$	1.51		$	1.71
Weighted average shares - Diluted		506.8			514.2			523.1			533.6			542.0			543.0			543.0			541.8			523.1			542.5

(1)In accordance with GAAP, the quarter and year-to-date per share amounts are calculated discretely.  Therefore, the sum of each quarter may not equal the year-to-date amount.

(2)As a result of the net loss for the three-months ended June 30, 2011, weighted average dilutive potential common shares outstanding resulting from 2.1 million stock options and 0.5 million restricted stock units (non-participating) were not included in the computation of diluted earnings per share in that quarter, since inclusion of these securities would have an anti-dilutive effect.

(3)Reflects new measures added since prior quarter. In connection with the Esurance and Answer Financial acquisition, we recorded present value of future profits of $42 million and other intangible assets of $426 million.  The present value of future profits will be fully amortized by March 31, 2012.  The other intangible assets primarily relate to the value of customer and partner relationships, trade names and technology, and these will be amortized on an accelerated basis with over 80% of the amortization taking place by 2016.

2

THE ALLSTATE CORPORATION

REVENUES

($ in millions)

	Three months ended																									Twelve months ended
		Dec. 31, 2011			Sept. 30, 2011			June 30, 2011			March 31, 2011			Dec. 31, 2010			Sept. 30, 2010			June 30, 2010			March 31, 2010			Dec. 31, 2011			Dec. 31, 2010
Property-Liability
Property-liability insurance premiums	$	6,605		$	6,432		$	6,457		$	6,448		$	6,442		$	6,499		$	6,513		$	6,503		$	25,942		$	25,957
Net investment income		309			298			310			284			291			284			310			304			1,201			1,189
Realized capital gains and losses		12			24			(8	)		57			82			(107	)		(106	)		(190	)		85			(321	)
Total Property-Liability revenues		6,926			6,754			6,759			6,789			6,815			6,676			6,717			6,617			27,228			26,825
Allstate Financial
Life and annuity premiums and contract charges		570			552			547			569			531			548			545			544			2,238			2,168
Net investment income		656			682			694			684			692			707			723			731			2,716			2,853
Realized capital gains and losses		68			219			62			39			36			(38	)		(353	)		(162	)		388			(517	)
Total Allstate Financial revenues		1,294			1,453			1,303			1,292			1,259			1,217			915			1,113			5,342			4,504
Corporate and Other
Service fees (1)		2			1			2			2			3			2			3			3			7			11
Net investment income		10			14			16			14			15			14			16			15			54			60
Realized capital gains and losses		6			21			3			-			(2	)		1			8			4			30			11
Total Corporate and Other revenues before reclassification of services fees		18			36			21			16			16			17			27			22			91			82
Reclassification of service fees (1)		(2	)		(1	)		(2	)		(2	)		(3	)		(2	)		(3	)		(3	)		(7	)		(11	)
Total Corporate and Other revenues		16			35			19			14			13			15			24			19			84			71
Consolidated revenues	$	8,236		$	8,242		$	8,081		$	8,095		$	8,087		$	7,908		$	7,656		$	7,749		$	32,654		$	31,400

(1)For presentation in the Consolidated Statements of Operations, service fees of the Corporate and Other segment are reclassified to Operating costs and expenses.

3

THE ALLSTATE CORPORATION

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

($ in millions)

		Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,			Dec. 31,			Sept. 30,			June 30,			March 31,			Dec. 31,
		2011		2011		2011		2011		2010			2011			2011			2011			2011			2010
Assets											Liabilities
Investments											Reserve for property-liability insurance
Fixed income securities, at fair value											claims and claims expense	$	20,375		$	20,395		$	20,456		$	19,494		$	19,468
(amortized cost $73,379, $73,935,											Reserve for life-contingent contract benefits		14,449			14,308			13,787			13,552			13,482
$76,502, $79,292 and $78,786)	$	76,113	$	76,394	$	78,414	$	80,242	$	79,612	Contractholder funds		42,332			43,776			45,078			46,834			48,195
Equity securities, at fair value											Unearned premiums		10,057			10,002			9,727			9,563			9,800
(cost $4,203, $4,252, $4,329,											Claim payments outstanding		827			960			948			761			737
$3,792 and $4,228)		4,363		4,157		4,954		4,437		4,811	Other liabilities and accrued expenses		5,929			6,691			6,152			6,369			5,564
Mortgage loans		7,139		6,956		6,827		6,582		6,679	Long-term debt		5,908			5,907			5,907			5,908			5,908
Limited partnership interests		4,697		4,407		4,400		4,077		3,816	Separate Accounts		6,984			6,791			8,175			8,603			8,676
Short-term, at fair value											Total liabilities		106,861			108,830			110,230			111,084			111,830
(amortized cost $1,291, $3,517,
$2,536, $1,986 and $3,279)		1,291		3,517		2,536		1,986		3,279	Equity
Other		2,015		2,094		2,158		2,287		2,286	Common stock, 501 million, 505 million, 517 million,
Total investments		95,618		97,525		99,289		99,611		100,483	524 million and 533 million shares outstanding		9			9			9			9			9
											Additional capital paid-in		3,189			3,177			3,165			3,156			3,176
											Retained income		32,321			31,704			31,647			32,377			31,969
											Deferred ESOP expense		(43	)		(43	)		(43	)		(42	)		(44	)
											Treasury stock, at cost (399 million, 395 million,
											383 million, 376 million and 367 million shares)		(16,795	)		(16,693	)		(16,387	)		(16,173	)		(15,910	)
											Accumulated other comprehensive income:
											Unrealized net capital gains and losses:
											Unrealized net capital losses on fixed income
											securities with other-than-temporary impairments		(174	)		(155	)		(156	)		(167	)		(190	)
											Other unrealized net capital gains and losses		2,041			1,683			1,783			1,186			1,089
Cash		776		1,026		693		641		562	Unrealized adjustment to DAC, DSI and insurance
Premium installment receivables, net		4,920		4,988		4,869		4,842		4,839	reserves		(504	)		(496	)		(181	)		60			36
Deferred policy acquisition costs		4,443		4,444		4,572		4,697		4,769	Total unrealized net capital gains and losses		1,363			1,032			1,446			1,079			935
Reinsurance recoverables, net (1)		7,251		6,720		6,446		6,589		6,552	Unrealized foreign currency translation
Accrued investment income		826		854		875		885		809	adjustments		57			49			83			79			69
Deferred income taxes		520		792		525		612		784	Unrecognized pension and other
Property and equipment, net		914		908		914		912		921	postretirement benefit cost		(1,427	)		(1,135	)		(1,156	)		(1,173	)		(1,188	)
Goodwill		1,242		874		874		874		874	Total accumulated other comprehensive (loss)
Other assets		2,069		2,037		1,791		2,159		1,605	income		(7	)		(54	)		373			(15	)		(184	)
Separate Accounts		6,984		6,791		8,175		8,603		8,676	Total shareholders’ equity		18,674			18,100			18,764			19,312			19,016
											Noncontrolling interest		28			29			29			29			28
											Total equity		18,702			18,129			18,793			19,341			19,044
Total assets	$	125,563	$	126,959	$	129,023	$	130,425	$	130,874	Total liabilities and equity	$	125,563		$	126,959		$	129,023		$	130,425		$	130,874

(1)Reinsurance recoverables of unpaid losses related to Property-Liability were $2,588 million, $2,271 million, $2,099 million, $2,134 million and $2,072 million as of December 31, 2011, September 30, 2011, June 30, 2011, March 31, 2011 and December 31, 2010, respectively.

4

THE ALLSTATE CORPORATION

BOOK VALUE PER SHARE

($  in millions, except per share data )

		Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,		Sept. 30,		June 30,		March 31,
		2011		2011		2011		2011		2010		2010		2010		2010
Book value per share
Numerator:
Shareholders’ equity	$	18,674	$	18,100	$	18,764	$	19,312	$	19,016	$	19,274	$	18,039	$	17,560
Denominator:
Shares outstanding and dilutive potential shares outstanding		505.8		509.0		522.0		529.0		538.4		543.3		542.7		544.3
Book value per share	$	36.92	$	35.56	$	35.95	$	36.51	$	35.32	$	35.48	$	33.24	$	32.26
Book value per share, excluding the impact of unrealized net capital gains and losses on fixed income securities *
Numerator:
Shareholders’ equity	$	18,674	$	18,100	$	18,764	$	19,312	$	19,016	$	19,274	$	18,039	$	17,560
Unrealized net capital gains and losses on fixed income securities		1,274		1,103		1,062		678		573		1,138		398		(309)
Adjusted shareholders’ equity	$	17,400	$	16,997	$	17,702	$	18,634	$	18,443	$	18,136	$	17,641	$	17,869
Denominator:
Shares outstanding and dilutive potential shares outstanding		505.8		509.0		522.0		529.0		538.4		543.3		542.7		544.3
Book value per share, excluding the impact of unrealized net capital gains and losses on fixed income securities	$	34.40	$	33.39	$	33.91	$	35.22	$	34.26	$	33.38	$	32.51	$	32.83

5

THE ALLSTATE CORPORATION

RETURN ON SHAREHOLDERS’ EQUITY

($ in millions)

	Twelve months ended
			Dec. 31,			Sept. 30,		June 30,		March 31,			Dec. 31,			Sept. 30,		June 30,		March 31,
			2011			2011		2011		2011			2010			2010		2010		2010
Return on Shareholders’ Equity
Numerator:
Net income (1)		$	788		$	360	$	562	$	1,327		$	928		$	1,150	$	1,004	$	1,248
Denominator:
Beginning shareholders’ equity		$	19,016		$	19,274	$	18,039	$	17,560		$	16,692		$	17,505	$	15,068	$	12,242
Ending shareholders’ equity			18,674			18,100		18,764		19,312			19,016			19,274		18,039		17,560
Average shareholders’ equity (2)		$	18,845		$	18,687	$	18,402	$	18,436		$	17,854		$	18,390	$	16,554	$	14,901
Return on shareholders’ equity			4.2	%		1.9	%	3.1	%	7.2	%		5.2	%		6.3	%	6.1	%	8.4	%
Operating Income Return on Shareholders’ Equity *
Numerator:
Operating income (1)		$	689		$	210	$	578	$	1,661		$	1,539		$	1,860	$	1,946	$	1,802
Denominator:
Beginning shareholders’ equity		$	19,016		$	19,274	$	18,039	$	17,560		$	16,692		$	17,505	$	15,068	$	12,242
Unrealized net capital gains and losses			935			1,292		328		(84)			(870)			112		(2,112)		(3,767)
Adjusted beginning shareholders’ equity			18,081			17,982		17,711		17,644			17,562			17,393		17,180		16,009
Ending shareholders’ equity			18,674			18,100		18,764		19,312			19,016			19,274		18,039		17,560
Unrealized net capital gains and losses			1,363			1,032		1,446		1,079			935			1,292		328		(84)
Adjusted ending shareholders’ equity			17,311			17,068		17,318		18,233			18,081			17,982		17,711		17,644
Average adjusted shareholders’ equity (2)		$	17,696		$	17,525	$	17,515	$	17,939		$	17,822		$	17,688	$	17,446	$	16,827
Operating income return on shareholders’ equity			3.9	%		1.2	%	3.3	%	9.3	%		8.6	%		10.5	%	11.2	%	10.7	%

(1)	Net income and operating income reflect a trailing twelve-month period.
(2)	Average shareholders’ equity and average adjusted shareholders’ equity are determined using a two-point average, with the beginning and ending shareholders’ equity and adjusted shareholders’ equity, respectively, for the twelve-month period as data points.

6

THE ALLSTATE CORPORATION

DEBT TO CAPITAL

($ in millions)

		Dec. 31,			Sept. 30,		June 30,		March 31,			Dec. 31,			Sept. 30,		June 30,		March 31,
		2011			2011		2011		2011			2010			2010		2010		2010
Debt
Long-term debt	$	5,908		$	5,907	$	5,907	$	5,908		$	5,908		$	5,909	$	5,909	$	5,910
Capital resources
Debt	$	5,908		$	5,907	$	5,907	$	5,908		$	5,908		$	5,909	$	5,909	$	5,910
Shareholders’ equity
Common stock		9			9		9		9			9			9		9		9
Additional capital paid-in		3,189			3,177		3,165		3,156			3,176			3,165		3,155		3,152
Retained income		32,321			31,704		31,647		32,377			31,969			31,781		31,552		31,514
Deferred ESOP expense		(43)			(43)		(43)		(42)			(44)			(45)		(44)		(44)
Treasury stock		(16,795)			(16,693)		(16,387)		(16,173)			(15,910)			(15,755)		(15,760)		(15,782)
Unrealized net capital gains and losses		1,363			1,032		1,446		1,079			935			1,292		328		(84)
Unrealized foreign currency translation adjustments		57			49		83		79			69			54		43		60
Unrecognized pension and other postretirement benefit cost		(1,427)			(1,135)		(1,156)		(1,173)			(1,188)			(1,227)		(1,244)		(1,265)
Total shareholders’ equity		18,674			18,100		18,764		19,312			19,016			19,274		18,039		17,560
Total capital resources	$	24,582		$	24,007	$	24,671	$	25,220		$	24,924		$	25,183	$	23,948	$	23,470
Ratio of debt to shareholders’ equity		31.6	%		32.6	%	31.5	%	30.6	%		31.1	%		30.7	%	32.8	%	33.7	%
Ratio of debt to capital resources		24.0	%		24.6	%	23.9	%	23.4	%		23.7	%		23.5	%	24.7	%	25.2	%

7

THE ALLSTATE CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

($ in millions)

	Three months ended																	Twelve months ended
		Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,		Dec. 31,
		2011		2011		2011		2011		2010		2010		2010		2010		2011		2010
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)	$	724	$	165	$	(620)	$	519	$	296	$	367	$	145	$	120	$	788	$	928
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation, amortization and other non-cash items		103		60		58		31		39		29		10		16		252		94
Realized capital gains and losses		(86)		(264)		(57)		(96)		(116)		144		451		348		(503)		827
(Gain) loss on disposition of operations		(2)		-		(6)		23		1		(9)		(2)		(1)		15		(11)
Interest credited to contractholder funds		405		405		417		418		449		445		450		463		1,645		1,807
Changes in:
Policy benefits and other insurance reserves		(623)		(119)		723		(58)		95		(163)		118		188		(77)		238
Unearned premiums		(183)		307		161		(248)		(212)		307		126		(261)		37		(40)
Deferred policy acquisition costs		29		81		(15)		72		44		(68)		(100)		30		167		(94)
Premium installment receivables, net		191		(136)		(25)		3		147		(146)		(15)		24		33		10
Reinsurance recoverables, net		(441)		(235)		77		(117)		(36)		(23)		(134)		(72)		(716)		(265)
Income taxes		322		38		(426)		200		22		104		1		73		134		200
Other operating assets and liabilities		(181)		109		247		(21)		(63)		(58)		80		36		154		(5)
Net cash provided by operating activities		258		411		534		726		666		929		1,130		964		1,929		3,689
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sales
Fixed income securities		5,520		9,776		5,777		8,363		5,536		8,231		4,184		4,930		29,436		22,881
Equity securities		896		262		212		642		87		1,216		1,056		1,990		2,012		4,349
Limited partnership interests		238		427		222		113		118		109		132		146		1,000		505
Mortgage loans		23		9		39		26		3		77		41		3		97		124
Other investments		15		40		46		63		23		36		25		37		164		121
Investment collections
Fixed income securities		1,087		1,479		1,184		1,201		1,475		1,281		1,269		1,122		4,951		5,147
Mortgage loans		143		183		220		88		292		146		375		263		634		1,076
Other investments		18		13		15		77		41		52		26		18		123		137
Investment purchases
Fixed income securities		(5,996)		(7,966)		(3,727)		(10,207)		(5,033)		(8,812)		(4,801)		(7,099)		(27,896)		(25,745)
Equity securities		(758)		(285)		(637)		(144)		(843)		(1,220)		(945)		(556)		(1,824)		(3,564)
Limited partnership interests		(537)		(394)		(431)		(334)		(302)		(424)		(431)		(185)		(1,696)		(1,342)
Mortgage loans		(345)		(360)		(510)		(26)		(65)		(45)		(9)		(1)		(1,241)		(120)
Other investments		(5)		(53)		(88)		(58)		(82)		(20)		(36)		(43)		(204)		(181)
Change in short-term investments, net		2,118		(1,102)		(483)		1,649		(486)		(335)		28		411		2,182		(382)
Change in other investments, net		(58)		(187)		(51)		(119)		(55)		(336)		(79)		(49)		(415)		(519)
(Acquisition) disposition of operations, net of cash acquired		(917)		2		-		(1)		-		7		-		-		(916)		7
Purchases of property and equipment, net		(86)		(54)		(58)		(48)		(48)		(45)		(45)		(24)		(246)		(162)
Net cash provided by (used in) investing activities		1,356		1,790		1,730		1,285		661		(82)		790		963		6,161		2,332
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of long-term debt		7		-		-		-		-		-		-		-		7		-
Repayment of long-term debt		(6)		-		(1)		-		(1)		-		(1)		-		(7)		(2)
Contractholder fund deposits		570		486		524		596		683		730		739		828		2,176		2,980
Contractholder fund withdrawals		(2,241)		(1,931)		(2,386)		(2,122)		(1,691)		(1,667)		(2,543)		(2,569)		(8,680)		(8,470)
Dividends paid		(108)		(109)		(111)		(107)		(108)		(107)		(108)		(107)		(435)		(430)
Treasury stock purchases		(95)		(314)		(239)		(305)		(147)		-		-		(5)		(953)		(152)
Shares reissued under equity incentive plans, net		1		1		8		9		2		1		11		14		19		28
Excess tax benefits on share-based payment arrangements		(1)		(1)		-		(3)		-		(3)		(2)		(2)		(5)		(7)
Other		9		-		(7)		-		(3)		(12)		(9)		6		2		(18)
Net cash used in financing activities		(1,864)		(1,868)		(2,212)		(1,932)		(1,265)		(1,058)		(1,913)		(1,835)		(7,876)		(6,071)
NET (DECREASE) INCREASE IN CASH		(250)		333		52		79		62		(211)		7		92		214		(50)
CASH AT BEGINNING OF PERIOD		1,026		693		641		562		500		711		704		612		562		612
CASH AT END OF PERIOD	$	776	$	1,026	$	693	$	641	$	562	$	500	$	711	$	704	$	776	$	562

8

THE ALLSTATE CORPORATION

ANALYSIS OF DEFERRED POLICY ACQUISITION COSTS

($ in millions)

		Change in Deferred Policy Acquisition Costs For the three months ended December 31, 2011
											Amortization
											relating to realized
											capital gains and			Amortization
											losses and			(acceleration)			Effect of
		Beginning			Acquisition			Amortization			valuation changes on			deceleration			unrealized			Ending
		balance			costs			before			embedded derivatives			(charged) credited			capital gains			balance
		Sept, 30, 2011			deferred			adjustments (1)(2)			that are not hedged (2)			to income (2)			and losses			Dec. 31, 2011
Property-Liability	$		1,396	$		937	$		(921)	$		-	$		-	$		-	$		1,412
Allstate Financial:
Traditional life and accident and health		731			52			(31)			-			-			-			752
Interest-sensitive life		2,033			62			(47)			(8)			-			(6)			2,034
Fixed annuity		281			7			(14)			(20)			-			(11)			243
Other		3			-			(1)			-			-			-			2
Sub-total		3,048			121			(93)			(28)			-			(17)			3,031
Consolidated	$		4,444	$		1,058	$		(1,014)	$		(28)	$		-	$		(17)	$		4,443

		Change in Deferred Policy Acquisition Costs For the three months ended December 31, 2010
											Accretion			Amortization
											(amortization)			(acceleration)			Effect of
		Beginning			Acquisition			Amortization			relating to realized			deceleration			unrealized			Ending
		balance			costs			before			capital gains and			(charged) credited			capital gains			balance
		Sept. 30, 2010			deferred			adjustments (1)(2)			losses (2)			to income (2)			and losses			Dec. 31, 2010
Property-Liability	$		1,406	$		895	$		(924)	$		-	$		-	$		-	$		1,377
Allstate Financial:
Traditional life and accident and health		677			44			(28)			-			-			-			693
Interest-sensitive life		2,113			76			(48)			(3)			-			127			2,265
Fixed annuity		471			8			(9)			(52)			-			13			431
Other		4			-			(1)			-			-			-			3
Sub-total		3,265			128			(86)			(55)			-			140			3,392
Consolidated	$		4,671	$		1,023	$		(1,010)	$		(55)	$		-	$		140	$		4,769

(1)	Amortization before adjustments reflects total DAC amortization before amortization/accretion related to realized capital gains and losses, valuation changes on embedded derivatives that are not hedged and amortization acceleration/deceleration charged/credited to income.
(2)	Included as a component of amortization of DAC on the Consolidated Statements of Operations.

9

THE ALLSTATE CORPORATION

ANALYSIS OF DEFERRED POLICY ACQUISITION COSTS

($ in millions)

		Change in Deferred Policy Acquisition Costs For the twelve months ended December 31, 2011														Reconciliation of Deferred Policy Acquisition Costs as of December 31, 2011
								Amortization
								relating to realized
								capital gains and		Amortization						DAC before				DAC after
								losses and		(acceleration)		Effect of				impact of		Impact of		impact of
		Beginning		Acquisition		Amortization		valuation changes on		deceleration		unrealized		Ending		unrealized		unrealized		unrealized
		balance		costs		before		embedded derivatives		(charged) credited		capital gains		balance		capital gains		capital gains		capital gains
		Dec. 31, 2010		deferred		adjustments (1)(2)		that are not hedged (2)		to income (2)		and losses		Dec. 31, 2011 (3)		and losses		and losses		and losses
Property-Liability	$	1,377	$	3,675	$	(3,640)	$	-	$	-	$	-	$	1,412	$	1,412	$	-	$	1,412
Allstate Financial:
Traditional life and accident and health		693		178		(119)		-		-		-		752		752		-		752
Interest-sensitive life		2,265		226		(212)		(24)		(17)		(204)		2,034		2,285		(251)		2,034
Fixed annuity		431		29		(65)		(160)		5		3		243		118		125		243
Other		3		-		(1)		-		-		-		2		2		-		2
Sub-total		3,392		433		(397)		(184)		(12)		(201)		3,031		3,157		(126)		3,031
Consolidated	$	4,769	$	4,108	$	(4,037)	$	(184)	$	(12)	$	(201)	$	4,443	$	4,569	$	(126)	$	4,443

		Change in Deferred Policy Acquisition Costs														Reconciliation of Deferred Policy
		For the twelve months ended December 31, 2010														Acquisition Costs as of December 31, 2010
								Accretion		Amortization						DAC before				DAC after
								(amortization)		(acceleration)		Effect of				impact of		Impact of		impact of
		Beginning		Acquisition		Amortization		relating to realized		deceleration		unrealized		Ending		unrealized		unrealized		unrealized
		balance		costs		before		capital gains and		(charged) credited		capital gains		balance		capital gains		capital gains		capital gains
		Dec. 31, 2009		deferred		adjustments (1)(2)		losses (2)		to income (2)		and losses		Dec. 31, 2010		and losses		and losses		and losses
Property-Liability	$	1,410	$	3,645	$	(3,678)	$	-	$	-	$	-	$	1,377	$	1,377	$	-	$	1,377
Allstate Financial:
Traditional life and accident and health		650		156		(113)		-		-		-		693		693		-		693
Interest-sensitive life		2,246		275		(140)		15		13		(144)		2,265		2,312		(47)		2,265
Fixed annuity		1,159		52		(71)		(57)		(1)		(651)		431		309		122		431
Other		5		-		(2)		-		-		-		3		3		-		3
Sub-total		4,060		483		(326)		(42)		12		(795)		3,392		3,317		75		3,392
Consolidated	$	5,470	$	4,128	$	(4,004)	$	(42)	$	12	$	(795)	$	4,769	$	4,694	$	75	$	4,769

(1)	Amortization before adjustments reflects total DAC amortization before amortization/accretion related to realized capital gains and losses, valuation changes on embedded derivatives that are not hedged and amortization acceleration/deceleration charged/credited to income.
(2)	Included as a component of amortization of DAC on the Consolidated Statements of Operations.
(3)	On January 1, 2012, we will adopt new DAC accounting guidance that modifies the definition of the types of costs that can be capitalized as DAC. Costs must be directly related to the successful acquisition of insurance contracts to be capitalized. We will adopt the new guidance on a retrospective basis. It is currently estimated that the restated Allstate Financial and Allstate Protection DAC balances will decline by $508 million and $63 million, respectively, when compared to the reported December 31, 2011 balances. We estimate that the new DAC accounting guidance will reduce Allsate Financial net income by approximately $40 million, after-tax in 2012. We estimate that the new DAC accounting guidance will have an insignificant effect on Allstate Protection’s net income in 2012.

10

THE ALLSTATE CORPORATION

HISTORICAL CONSOLIDATED OPERATING

AND FINANCIAL POSITION DATA

($ in millions except per share data)

		As of or for the Year Ended December 31,
		2011		2010		2009		2008		2007
Consolidated statements of operations data:
Insurance premiums and contract charges	$	28,180	$	28,125	$	28,152	$	28,862	$	29,099
Net investment income		3,971		4,102		4,444		5,622		6,435
Realized capital gains and losses		503		(827)		(583)		(5,090)		1,235
Total revenues	$	32,654	$	31,400	$	32,013	$	29,394	$	36,769
Operating income	$	689	$	1,539	$	1,881	$	1,758	$	3,863
Realized capital gains and losses, after-tax		324		(537)		(628)		(3,311)		798
Valuation changes on embedded derivatives that are not hedged, after-tax (3)		(12)		-		-		-		-
DAC and DSI (amortization) accretion relating to realized capital gains and losses and valuation changes on embedded derivatives that are not hedged, after-tax		(127)		(34)		(177)		385		12
DAC and DSI unlocking relating to realized capital gains and losses, after-tax		1		(18)		(224)		(274)		-
Non-recurring items, after-tax (1)		-		-		-		(219)		-
Reclassification of periodic settlements and accruals on non-hedge derivative instruments, after-tax		(35)		(29)		(2)		(14)		(29)
Business combination expenses and the amortization of purchased intangible assets, after-tax (3)		(42)		-		-		-		-
(Loss) gain on disposition of operations, after-tax		(10)		7		4		(4)		(8)
Net income (loss)	$	788	$	928	$	854	$	(1,679)	$	4,636
Income per share - Diluted
Operating income	$	1.32	$	2.84	$	3.48	$	3.21	$	6.47
Realized capital gains and losses, after-tax		0.62		(0.99)		(1.16)		(6.04)		1.33
Valuation changes on embedded derivatives that are not hedged, after-tax (3)		(0.02)		-		-		-		-
DAC and DSI (amortization) accretion relating to realized capital gains and losses and valuation changes on embedded derivatives that are not hedged, after-tax		(0.24)		(0.06)		(0.33)		0.70		0.02
DAC and DSI unlocking relating to realized capital gains and losses, after-tax		-		(0.03)		(0.42)		(0.50)		-
Non-recurring items, after-tax (1)		-		-		-		(0.40)		-
Reclassification of periodic settlements and accruals on non-hedge derivative instruments, after-tax		(0.07)		(0.06)		-		(0.02)		(0.05)
Business combination expenses and the amortization of purchased intangible assets, after-tax (3)		(0.08)		-		-		-		-
(Loss) gain on disposition of operations, after-tax		(0.02)		0.01		0.01		(0.01)		(0.01)
Net income (loss)	$	1.51	$	1.71	$	1.58	$	(3.06)	$	7.76
Net income (loss) per share - Basic	$	1.51	$	1.72	$	1.58	$	(3.06)	$	7.80
Consolidated statements of financial position data:
Investments	$	95,618	$	100,483	$	99,833	$	95,998	$	118,980
Total assets		125,563		130,874		132,652		134,798		156,408
Reserves for claims and claims expense, life-contingent contract benefits and contractholder funds		77,156		81,145		84,659		90,750		94,052
Debt		5,908		5,908		5,910		5,659		5,640
Shareholders’ equity		18,674		19,016		16,692		12,641		21,851
Book value per share		36.92		35.32		30.84		23.47		38.54
Operating ratios:
Annual statutory premiums written to surplus ratio (U.S. property-liability operations)		1.6x		1.6x		1.7x		1.9x		1.5x
Other operating data:
Total employees (excluding agents) (2)		37,300		35,200		36,000		38,500		38,400
Total Allstate agencies (2)		11,900		13,400		14,200		14,700		15,000

(1)	During the fourth quarter of 2008, for traditional life insurance and immediate annuities with life contingencies, an aggregate premium deficiency of $336 million, pre-tax ($219 million, after-tax) resulted primarily from an experience study indicating that the annuitants on certain life-contingent contracts are projected to live longer than we anticipated when the contracts were issued, and, to a lesser degree, a reduction in the related investment portfolio yield. The deficiency was recorded through a reduction in deferred acquisition costs.
(2)	Rounded to the nearest hundred. Total Allstate agencies represents exclusive Allstate agencies and financial representatives in the United States and Canada.
(3)	Reflects new measures added since prior year.

11

THE ALLSTATE CORPORATION

PROPERTY-LIABILITY RESULTS

($ in millions, except ratios)

	Three months ended																	Twelve months ended
		Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,		Dec. 31,
		2011		2011		2011		2011		2010		2010		2010		2010		2011		2010
Premiums written *	$	6,426	$	6,728	$	6,611	$	6,215	$	6,242	$	6,767	$	6,640	$	6,258	$	25,980	$	25,907
Decrease (increase) in unearned premiums		174		(276)		(165)		234		203		(319)		(110)		245		(33)		19
Other		5		(20)		11		(1)		(3)		51		(17)		-		(5)		31
Premiums earned		6,605		6,432		6,457		6,448		6,442		6,499		6,513		6,503		25,942		25,957
Claims and claims expense		(4,198)		(5,132)		(6,355)		(4,476)		(4,842)		(4,603)		(4,714)		(4,792)		(20,161)		(18,951)
Amortization of deferred policy acquisition costs		(921)		(907)		(908)		(904)		(924)		(915)		(914)		(925)		(3,640)		(3,678)
Operating costs and expenses		(861)		(696)		(685)		(730)		(726)		(706)		(664)		(704)		(2,972)		(2,800)
Restructuring and related charges		(13)		(8)		(11)		(11)		1		(9)		(14)		(11)		(43)		(33)
Underwriting income (loss) *		612		(311)		(1,502)		327		(49)		266		207		71		(874)		495
Net investment income		309		298		310		284		291		284		310		304		1,201		1,189
Periodic settlements and accruals on non-hedge derivative instruments		(3)		(5)		(3)		(4)		(3)		(2)		(1)		(1)		(15)		(7)
Business combination expenses and the amortization of purchased intangible assets (2)		49		-		-		-		-		-		-		-		49		-
Income tax (expense) benefit on operations		(306)		39		462		(180)		(33)		(154)		(148)		(88)		15		(423)
Operating income (loss)		661		21		(733)		427		206		394		368		286		376		1,254
Realized capital gains and losses, after-tax		7		15		(6)		38		54		(69)		(69)		(123)		54		(207)
Reclassification of periodic settlements and accruals on non-hedge derivative instruments, after-tax		2		4		1		3		1		2		-		1		10		4
Business combination expenses and the amortization of purchased intangible assets, after-tax (2)		(32)		-		-		-		-		-		-		-		(32)		-
(Loss) gain on disposition of operations, after-tax		-		-		-		-		(1)		4		-		-		-		3
Net income (loss)	$	638	$	40	$	(738)	$	468	$	260	$	331	$	299	$	164	$	408	$	1,054
Catastrophe losses	$	66	$	1,077	$	2,339	$	333	$	537	$	386	$	636	$	648	$	3,815	$	2,207
Operating ratios *
Claims and claims expense (“loss”) ratio		63.5		79.8		98.4		69.4		75.2		70.8		72.4		73.7		77.7		73.0
Expense ratio (1)		27.2		25.0		24.9		25.5		25.6		25.1		24.4		25.2		25.7		25.1
Combined ratio		90.7		104.8		123.3		94.9		100.8		95.9		96.8		98.9		103.4		98.1
Combined ratio excluding the effect of catastrophes *		89.7		88.1		87.1		89.7		92.5		90.0		87.0		88.9		88.7		89.6
Effect of catastrophe losses on combined ratio *		1.0		16.7		36.2		5.2		8.3		5.9		9.8		10.0		14.7		8.5
Combined ratio		90.7		104.8		123.3		94.9		100.8		95.9		96.8		98.9		103.4		98.1
Combined ratio excluding the effect of catastrophes, prior year reserve reestimates, business combination expenses and the amortization of purchased intangible assets (“underlying”) *		90.5		89.2		87.5		89.9		92.0		89.2		88.1		89.1		89.3		89.6
Effect of catastrophe losses on combined ratio *		1.0		16.7		36.2		5.2		8.3		5.9		9.8		10.0		14.7		8.5
Effect of prior year reserve reestimates on combined ratio *		(2.0)		(1.8)		(0.7)		(0.7)		0.1		0.2		(2.3)		(0.4)		(1.3)		(0.6)
Effect of catastrophe losses included in prior year reserve reestimates on combined ratio		0.5		0.7		0.3		0.5		0.4		0.6		1.2		0.2		0.5		0.6
Effect of business combination expenses and the amortization of purchased intangible assets on combined ratio* (2)		0.7		-		-		-		-		-		-		-		0.2		-
Combined ratio		90.7		104.8		123.3		94.9		100.8		95.9		96.8		98.9		103.4		98.1
Effect of restructuring and related charges on combined ratio *		0.2		0.1		0.2		0.2		-		0.1		0.2		0.2		0.2		0.1
Effect of Discontinued Lines and Coverages on combined ratio		-		0.2		0.1		0.1		0.1		0.3		-		0.1		0.1		0.1

(1)	The Company implemented a series of growth initiatives such as sales campaigns, agent incentives, referrals and additional marketing, including expenses of $78 million with a 1.2 point effect on the combined ratio, spent on the Grow to Win initiative in the fourth quarter of 2011.
(2)	Reflects new measures added since prior quarter.

12

THE ALLSTATE CORPORATION

HISTORICAL PROPERTY-LIABILITY RESULTS

($ in millions)

		Twelve months ended December 31,
		2011		2010		2009		2008		2007
Premiums written	$	25,980	$	25,907	$	25,971	$	26,584	$	27,183
(Increase) decrease in unearned premium		(33)		19		200		383		17
Other		(5)		31		23		-		33
Premiums earned		25,942		25,957		26,194		26,967		27,233
Claims and claims expense		(20,161)		(18,951)		(18,746)		(20,064)		(17,667)
Amortization of deferred policy acquisition costs		(3,640)		(3,678)		(3,789)		(3,975)		(4,121)
Operating costs and expenses		(2,972)		(2,800)		(2,559)		(2,742)		(2,634)
Restructuring and related charges		(43)		(33)		(105)		(22)		(27)
Underwriting (loss) income		(874)		495		995		164		2,784
Net investment income		1,201		1,189		1,328		1,674		1,972
Periodic settlement and accruals on non-hedge derivative instruments		(15)		(7)		(10)		1		-
Business combination expenses and the amortization of purchased intangible assets (1)		49		-		-		-		-
Income tax benefit (expense) on operations		15		(423)		(555)		(401)		(1,413)
Operating income		376		1,254		1,758		1,438		3,343
Realized capital gains and losses, after-tax		54		(207)		(222)		(1,209)		915
Reclassification of periodic settlements and accruals on non-hedge derivative instruments, after-tax		10		4		7		(1)		-
Business combination expenses and the amortization of purchased intangible assets, after-tax (1)		(32)		-		-		-		-
Gain on disposition of operations, after-tax		-		3		-		-		-
Net income	$	408	$	1,054	$	1,543	$	228	$	4,258
Catastrophe losses	$	3,815	$	2,207	$	2,069	$	3,342	$	1,409
Operating ratios
Loss ratio		77.7		73.0		71.6		74.4		64.9
Expense ratio		25.7		25.1		24.6		25.0		24.9
Combined ratio		103.4		98.1		96.2		99.4		89.8
Combined ratio excluding the effect of catastrophes		88.7		89.6		88.3		87.0		84.6
Effect of catastrophe losses on combined ratio		14.7		8.5		7.9		12.4		5.2
Combined ratio		103.4		98.1		96.2		99.4		89.8
Combined ratio excluding the effect of catastrophes, prior year reserve reestimates, business combination expenses and the amortization of purchased intangible assets (“underlying”)		89.3		89.6		88.1		86.8		85.7
Effect of catastrophe losses on combined ratio		14.7		8.5		7.9		12.4		5.2
Effect of prior year reserve reestimates on combined ratio		(1.3)		(0.6)		(0.4)		0.7		(0.6)
Effect of catastrophe losses included in prior year reserve reestimate on combined ratio		0.5		0.6		0.6		(0.5)		(0.5)
Effect of business combination expenses and the amortization of purchased intangible assets on combined ratio (1)		0.2		-		-		-		-
Combined ratio		103.4		98.1		96.2		99.4		89.8
Effect of restructuring and related charges on combined ratio		0.2		0.1		0.4		0.1		0.1
Effect of Discontinued Lines and Coverages on the combined ratio		0.1		0.1		0.1		0.1		0.2

(1) Reflects new measure added since prior year.

13

THE ALLSTATE CORPORATION

PROPERTY-LIABILITY UNDERWRITING RESULTS BY AREA OF BUSINESS

($ in millions)

		Three months ended																Twelve months ended
		Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,		Dec. 31,
		2011		2011		2011		2011		2010		2010		2010		2010		2011		2010
Property-Liability Underwriting Summary
Allstate Protection	$	615	$	(299)	$	(1,498)	$	333	$	(45)	$	287	$	209	$	75	$	(849)	$	526
Discontinued Lines and Coverages		(3)		(12)		(4)		(6)		(4)		(21)		(2)		(4)		(25)		(31)
Underwriting income (loss)	$	612	$	(311)	$	(1,502)	$	327	$	(49)	$	266	$	207	$	71	$	(874)	$	495
Allstate Protection Underwriting Summary
Premiums written	$	6,426	$	6,728	$	6,611	$	6,216	$	6,241	$	6,767	$	6,640	$	6,258	$	25,981	$	25,906
Premiums earned	$	6,604	$	6,432	$	6,457	$	6,449	$	6,441	$	6,498	$	6,513	$	6,503	$	25,942	$	25,955
Claims and claims expense		(4,195)		(5,121)		(6,352)		(4,472)		(4,838)		(4,582)		(4,713)		(4,790)		(20,140)		(18,923)
Amortization of deferred policy acquisition costs		(921)		(907)		(908)		(904)		(924)		(915)		(914)		(925)		(3,640)		(3,678)
Operating costs and expenses		(860)		(695)		(684)		(729)		(725)		(705)		(663)		(702)		(2,968)		(2,795)
Restructuring and related charges		(13)		(8)		(11)		(11)		1		(9)		(14)		(11)		(43)		(33)
Underwriting income (loss)	$	615	$	(299)	$	(1,498)	$	333	$	(45)	$	287	$	209	$	75	$	(849)	$	526
Catastrophe losses	$	66	$	1,077	$	2,339	$	333	$	537	$	386	$	636	$	648	$	3,815	$	2,207
Operating ratios
Loss ratio		63.5		79.6		98.4		69.3		75.1		70.5		72.4		73.6		77.6		72.9
Expense ratio		27.2		25.0		24.8		25.5		25.6		25.1		24.4		25.2		25.7		25.1
Combined ratio		90.7		104.6		123.2		94.8		100.7		95.6		96.8		98.8		103.3		98.0
Effect of catastrophe losses on combined ratio		1.0		16.7		36.2		5.2		8.3		5.9		9.8		10.0		14.7		8.5
Effect of restructuring and related charges on combined ratio		0.2		0.1		0.2		0.2		-		0.1		0.2		0.2		0.2		0.1
Effect of business combination expenses and the amortization of purchased intangible assets on combined ratio (1)		0.7		-		-		-		-		-		-		-		0.2		-
Discontinued Lines and Coverages Underwriting Summary
Premiums written	$	-	$	-	$	-	$	(1)	$	1	$	-	$	-	$	-	$	(1)	$	1
Premiums earned	$	1	$	-	$	-	$	(1)	$	1	$	1	$	-	$	-	$	-	$	2
Claims and claims expense		(3)		(11)		(3)		(4)		(4)		(21)		(1)		(2)		(21)		(28)
Operating costs and expenses		(1)		(1)		(1)		(1)		(1)		(1)		(1)		(2)		(4)		(5)
Underwriting loss	$	(3)	$	(12)	$	(4)	$	(6)	$	(4)	$	(21)	$	(2)	$	(4)	$	(25)	$	(31)
Effect of Discontinued Lines and Coverages on the Property-Liability combined ratio		-		0.2		0.1		0.1		0.1		0.3		-		0.1		0.1		0.1

(1) Reflects new measure added since prior quarter.

14

THE ALLSTATE CORPORATION

HISTORICAL PROPERTY-LIABILITY

UNDERWRITING RESULTS BY AREA OF BUSINESS

($ in millions)

		Twelve months ended December 31,
		2011			2010			2009			2008			2007
Property-Liability Underwriting Summary
Allstate Protection	$		(849)	$		526	$		1,027	$		189	$		2,838
Discontinued Lines and Coverages		(25)			(31)			(32)			(25)			(54)
Underwriting (loss) income	$		(874)	$		495	$		995	$		164	$		2,784
Allstate Protection Underwriting Summary
Premiums written	$		25,981	$		25,906	$		25,972	$		26,584	$		27,183
Premiums earned	$		25,942	$		25,955	$		26,195	$		26,967	$		27,232
Claims and claims expense		(20,140)			(18,923)			(18,722)			(20,046)			(17,620)
Amortization of deferred policy acquisition costs		(3,640)			(3,678)			(3,789)			(3,975)			(4,121)
Operating costs and expenses		(2,968)			(2,795)			(2,552)			(2,735)			(2,626)
Restructuring and related charges		(43)			(33)			(105)			(22)			(27)
Underwriting (loss) income	$		(849)	$		526	$		1,027	$		189	$		2,838
Catastrophe losses	$		3,815	$		2,207	$		2,069	$		3,342	$		1,409
Operating ratios
Loss ratio		77.6			72.9			71.5			74.3			64.7
Expense ratio		25.7			25.1			24.6			25.0			24.9
Combined ratio		103.3			98.0			96.1			99.3			89.6
Effect of catastrophe losses on combined ratio		14.7			8.5			7.9			12.4			5.2
Effect of restructuring and related charges on combined ratio		0.2			0.1			0.4			0.1			0.1
Effect of business combination expenses and the amortization of purchased intangible assets on combined ratio (1)		0.2			-			-			-			-
Discontinued Lines and Coverages Underwriting Summary
Premiums written	$		(1)	$		1	$		(1)	$		-	$		-
Premiums earned	$		-	$		2	$		(1)	$		-	$		1
Claims and claims expense		(21)			(28)			(24)			(18)			(47)
Operating costs and expenses		(4)			(5)			(7)			(7)			(8)
Restructuring and related charges		-			-			-			-			-
Underwriting loss	$		(25)	$		(31)	$		(32)	$		(25)	$		(54)
Effect of Discontinued Lines and Coverages on the Property-Liability combined ratio		0.1			0.1			0.1			0.1			0.2

(1) Reflects new measure added since prior year.

15

THE ALLSTATE CORPORATION

PROPERTY-LIABILITY PREMIUMS WRITTEN BY MARKET SEGMENT

($ in millions)

		Three months ended																Twelve months ended
		Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,		Dec. 31,
		2011		2011		2011		2011		2010		2010		2010		2010		2011		2010
Allstate brand
Standard auto	$	3,812	$	3,996	$	3,911	$	3,984	$	3,843	$	4,028	$	3,948	$	4,023	$	15,703	$	15,842
Non-standard auto		174		194		197		210		203		223		220		237		775		883
Auto		3,986		4,190		4,108		4,194		4,046		4,251		4,168		4,260		16,478		16,725
Involuntary auto		17		17		21		19		22		18		25		16		74		81
Commercial lines		111		116		125		120		120		130		137		131		472		518
Homeowners		1,428		1,634		1,606		1,225		1,389		1,610		1,565		1,189		5,893		5,753
Other personal lines		446		489		478		413		408		468		457		399		1,826		1,732
		5,988		6,446		6,338		5,971		5,985		6,477		6,352		5,995		24,743		24,809
Encompass brand
Standard auto		147		159		154		144		149		166		169		160		604		644
Non-standard auto		-		-		-		1		1		1		1		3		1		6
Auto		147		159		154		145		150		167		170		163		605		650
Involuntary auto		1		2		3		3		2		3		3		2		9		10
Homeowners		89		100		94		79		85		98		94		80		362		357
Other personal lines		20		21		22		18		19		22		21		18		81		80
		257		282		273		245		256		290		288		263		1,057		1,097
Esurance brand(1)
Standard auto		181		-		-		-		-		-		-		-		181		-
Allstate Protection		6,426		6,728		6,611		6,216		6,241		6,767		6,640		6,258		25,981		25,906
Discontinued Lines and Coverages		-		-		-		(1)		1		-		-		-		(1)		1
Property-Liability	$	6,426	$	6,728	$	6,611	$	6,215	$	6,242	$	6,767	$	6,640	$	6,258	$	25,980	$	25,907
Allstate Protection
Standard auto	$	4,140	$	4,155	$	4,065	$	4,128	$	3,992	$	4,194	$	4,117	$	4,183	$	16,488	$	16,486
Non-standard auto		174		194		197		211		204		224		221		240		776		889
Auto		4,314		4,349		4,262		4,339		4,196		4,418		4,338		4,423		17,264		17,375
Involuntary auto		18		19		24		22		24		21		28		18		83		91
Commercial lines		111		116		125		120		120		130		137		131		472		518
Homeowners		1,517		1,734		1,700		1,304		1,474		1,708		1,659		1,269		6,255		6,110
Other personal lines		466		510		500		431		427		490		478		417		1,907		1,812
	$	6,426	$	6,728	$	6,611	$	6,216	$	6,241	$	6,767	$	6,640	$	6,258	$	25,981	$	25,906

(1)  Reflects new measure added since prior quarter.

16

THE ALLSTATE CORPORATION

ALLSTATE PROTECTION MARKET SEGMENT ANALYSIS

($ in millions)

		Three months ended December 31,
		2011		2010		2011		2010		2011		2010		2011		2010	2011	2010	2011		2010	2011		2010	2011	2010	2011
																											Effect of business
																											combination
																											expenses and the
																											amortization of
																			Effect of			Effect of prior year					purchased intangible
										Incurred									catastrophe losses			reserve reestimates					assets on
		Premiums earned				Incurred losses				catastrophe losses				Expenses			Loss ratio (2)		on combined ratio			on combined ratio			Expense ratio		combined ratio
Allstate brand
Standard auto	$	3,897	$	3,941	$	2,713	$	2,941	$	8	$	32	$	1,008	$	990	69.6	74.6	0.2		0.8	(3.2	)	(1.2)	25.9	25.1	-
Non-standard auto		186		216		110		150		-		1		49		38	59.1	69.4	-		0.5	(7.0	)	(1.4)	26.4	17.6	-
Auto		4,083		4,157		2,823		3,091		8		33		1,057		1,028	69.1	74.4	0.2		0.8	(3.3	)	(1.2)	25.9	24.7	-
Homeowners		1,468		1,431		657		1,113		51		434		367		346	44.8	77.8	3.5		30.3	(2.4	)	(1.8)	25.0	24.2	-
Other personal lines (1)		587		573		351		431		(5)		52		211		194	59.8	75.2	(0.9	)	9.1	4.9		14.0	35.9	33.9	1.2
Total Allstate brand		6,138		6,161		3,831		4,635		54		519		1,635		1,568	62.4	75.2	0.9		8.4	(2.3	)	0.1	26.7	25.5	0.1
Encompass brand
Standard auto		151		164		129		125		1		2		44		45	85.4	76.2	0.7		1.2	-		(6.1)	29.2	27.5	-
Non-standard auto		-		1		-		1		-		-		-		2	-	100.0	-		-	-		-	-	200.0	-
Auto		151		165		129		126		1		2		44		47	85.4	76.3	0.7		1.2	-		(6.1)	29.2	28.5	-
Homeowners		92		93		56		60		10		15		29		28	60.9	64.5	10.9		16.1	5.4		5.4	31.5	30.1	-
Other personal lines (1)		22		22		22		17		1		1		5		5	100.0	77.3	4.5		4.5	18.2		-	22.7	22.7	-
Total Encompass brand		265		280		207		203		12		18		78		80	78.1	72.5	4.5		6.4	3.4		(1.8)	29.4	28.6	-
Esurance Brand(3)
Standard auto (4)		201		-		157		-		-		-		81		-	78.1	-	-		-	-		-	40.3	-	20.9
Allstate Protection	$	6,604	$	6,441	$	4,195	$	4,838	$	66	$	537	$	1,794	$	1,648	63.5	75.1	1.0		8.3	(2.0	)	-	27.2	25.6	0.7

		Twelve months ended December 31,
		2011		2010		2011		2010		2011		2010		2011		2010	2011	2010	2011	2010	2011		2010	2011	2010	2011
																										Effect of business
																										combination
																										expenses and the
																										amortization of
																			Effect of		Effect of prior year					purchased intangible
										Incurred									catastrophe losses		reserve reestimates					assets on
		Premiums earned				Incurred losses				catastrophe losses				Expenses			Loss ratio (2)		on combined ratio		on combined ratio			Expense ratio		combined ratio
Allstate brand
Standard auto	$	15,679	$	15,814	$	11,067	$	11,186	$	402	$	153	$	3,943	$	3,914	70.6	70.7	2.6	1.0	(2.3	)	(0.9)	25.1	24.8	-
Non-standard auto		797		896		500		602		9		3		193		215	62.8	67.2	1.1	0.3	(4.9	)	(3.6)	24.2	24.0	-
Auto		16,476		16,710		11,567		11,788		411		156		4,136		4,129	70.2	70.6	2.5	0.9	(2.4	)	(1.1)	25.1	24.7	-
Homeowners		5,835		5,693		5,720		4,672		2,919		1,782		1,374		1,338	98.0	82.1	50.0	31.3	(1.2	)	(0.3)	23.6	23.5	-
Other personal lines (1)		2,352		2,348		1,787		1,559		320		170		745		696	76.0	66.4	13.6	7.2	4.0		0.7	31.7	29.6	0.3
Total Allstate brand		24,663		24,751		19,074		18,019		3,650		2,108		6,255		6,163	77.3	72.8	14.8	8.5	(1.5	)	(0.7)	25.4	24.9	-
Encompass brand
Standard auto		620		716		507		540		11		6		177		198	81.8	75.4	1.8	0.8	2.4		-	28.5	27.7	-
Non-standard auto		2		9		3		9		-		-		2		5	150.0	100.0	-	-	(50.0	)	-	100.0	55.6	-
Auto		622		725		510		549		11		6		179		203	82.0	75.7	1.8	0.8	2.3		-	28.8	28.0	-
Homeowners		365		385		323		286		145		89		113		117	88.5	74.3	39.7	23.1	0.3		(1.3)	31.0	30.4	-
Other personal lines (1)		91		94		76		69		9		4		23		23	83.5	73.4	9.9	4.3	-		(1.1)	25.3	24.5	-
Total Encompass brand		1,078		1,204		909		904		165		99		315		343	84.3	75.1	15.3	8.2	1.4		(0.5)	29.2	28.5	-
Esurance Brand(3)
Standard auto		201		-		157		-		-		-		81		-	78.1	-	-	-	-		-	40.3	-	20.9
Allstate Protection	$	25,942	$	25,955	$	20,140	$	18,923	$	3,815	$	2,207	$	6,651	$	6,506	77.6	72.9	14.7	8.5	(1.4	)	(0.7)	25.7	25.1	0.2

(1)    Other personal lines includes commercial, condominium, renters, involuntary auto and other personal lines.

(2)    Ratios are calculated using the premiums earned for the respective line of business.

(3)    Reflects new measures added since prior quarter.

(4)    Esurance brand advertising expenses totaled $22 million and had a 10.9 point impact on its expense ratio in 2011.

17

THE ALLSTATE CORPORATION

ALLSTATE PROTECTION HISTORICAL MARKET SEGMENT ANALYSIS

($ in millions)

		Three months ended							Three months ended					Three months ended					Three months ended
		December 31, 2011							September 30, 2011					June 30, 2011					March 31, 2011
							Effect of
							bus. comb.
							expenses and
				Effect of			the amort.				Effect of					Effect of					Effect of
				CAT losses			of purchased				CAT losses					CAT losses					CAT losses
		Premiums	Loss	on combined		Expense	intangibles on		Premiums	Loss	on combined	Expense		Premiums	Loss	on combined	Expense		Premiums	Loss	on combined	Expense
		earned	ratio	ratio		ratio	combined ratio		earned	ratio	ratio	ratio		earned	ratio	ratio	ratio		earned	ratio	ratio	ratio
Allstate brand
Standard auto	$	3,897	69.6	0.2		25.9	-	$	3,916	69.3	2.9	24.9	$	3,938	73.2	6.7	25.0	$	3,928	70.3	0.5	24.8
Non-standard auto		186	59.1	-		26.4	-		196	57.1	0.5	24.5		205	69.3	3.9	23.4		210	64.8	-	22.8
Auto		4,083	69.1	0.2		25.9	-		4,112	68.7	2.7	24.9		4,143	73.0	6.6	24.9		4,138	70.0	0.4	24.7
Homeowners		1,468	44.8	3.5		25.0	-		1,462	108.6	55.8	23.3		1,457	171.1	123.2	22.3		1,448	67.9	17.7	23.5
Other personal lines (1)		587	59.8	(0.9	)	35.9	1.2		590	76.3	13.1	28.3		587	100.5	35.3	28.1		588	67.3	7.0	34.4
Total Allstate brand		6,138	62.4	0.9		26.7	0.1		6,164	78.9	16.3	24.8		6,187	98.7	36.8	24.6		6,174	69.2	5.1	25.4
Encompass brand
Standard auto		151	85.4	0.7		29.2	-		154	87.6	3.2	28.6		155	78.7	3.2	28.4		160	75.7	-	28.1
Non-standard auto		-	-	-		-	-		-	-	-	-		1	100.0	-	-		1	100.0	-	100.0
Auto		151	85.4	0.7		29.2	-		154	88.3	3.2	29.2		156	78.9	3.2	28.2		161	75.8	-	28.5
Homeowners		92	60.9	10.9		31.5	-		91	119.8	70.3	29.7		91	107.7	61.5	31.9		91	65.9	16.5	30.8
Other personal lines (1)		22	100.0	4.5		22.7	-		23	65.2	8.7	30.5		23	104.3	17.4	26.1		23	65.2	8.7	21.8
Total Encompass brand		265	78.1	4.5		29.4	-		268	97.0	26.5	29.5		270	90.7	24.1	29.3		275	71.7	6.2	28.7
Esurance Brand (2)
Standard auto		201	78.1	-		40.3	20.9		-	-	-	-		-	-	-	-		-	-	-	-
Allstate Protection	$	6,604	63.5	1.0		27.2	0.7	$	6,432	79.6	16.7	25.0	$	6,457	98.4	36.2	24.8	$	6,449	69.3	5.2	25.5

		Three months ended					Three months ended					Three months ended					Three months ended
		December 31, 2010					September 30, 2010					June 30, 2010					March 31, 2010
				Effect of					Effect of					Effect of					Effect of
				CAT losses					CAT losses					CAT losses					CAT losses
		Premiums	Loss	on combined	Expense		Premiums	Loss	on combined	Expense		Premiums	Loss	on combined	Expense		Premiums	Loss	on combined	Expense
		earned	ratio	ratio	ratio		earned	ratio	ratio	ratio		earned	ratio	ratio	ratio		earned	ratio	ratio	ratio
Allstate brand
Standard auto	$	3,941	74.6	0.8	25.1	$	3,961	68.7	0.4	24.5	$	3,969	70.1	2.0	24.4	$	3,943	69.4	0.7	25.0
Non-standard auto		216	69.4	0.5	17.6		222	61.7	-	27.5		228	68.9	0.4	26.3		230	68.7	0.4	24.3
Auto		4,157	74.4	0.8	24.7		4,183	68.4	0.4	24.6		4,197	70.1	1.9	24.5		4,173	69.4	0.7	25.0
Homeowners		1,431	77.8	30.3	24.2		1,430	80.5	23.1	24.2		1,416	82.6	34.7	21.8		1,416	87.5	37.1	23.8
Other personal lines (1)		573	75.2	9.1	33.9		591	61.4	4.4	27.3		592	65.7	8.3	28.4		592	63.5	7.3	29.2
Total Allstate brand		6,161	75.2	8.4	25.5		6,204	70.5	6.0	24.8		6,205	72.5	10.0	24.3		6,181	73.0	9.7	25.1
Encompass brand
Standard auto		164	76.2	1.2	27.5		173	75.7	0.6	30.1		185	73.0	0.5	27.0		194	76.8	1.0	26.3
Non-standard auto		1	100.0	-	200.0		2	100.0	-	50.0		2	100.0	-	50.0		4	100.0	-	25.0
Auto		165	76.3	1.2	28.5		175	76.0	0.6	30.3		187	73.2	0.5	27.3		198	77.3	1.0	26.2
Homeowners		93	64.5	16.1	30.1		96	63.5	13.5	32.3		96	64.6	15.6	30.2		100	103.0	46.0	29.0
Other personal lines (1)		22	77.3	4.5	22.7		23	60.9	-	30.4		25	64.0	-	20.0		24	91.7	12.5	25.0
Total Encompass brand		280	72.5	6.4	28.6		294	70.7	4.8	31.0		308	69.8	5.2	27.6		322	86.4	15.8	27.0
Esurance Brand (2)
Standard auto		-	-	-	-		-	-	-	-		-	-	-	-		-	-	-	-
Allstate Protection	$	6,441	75.1	8.3	25.6	$	6,498	70.5	5.9	25.1	$	6,513	72.4	9.8	24.4	$	6,503	73.6	10.0	25.2

(1)    Other personal lines includes commercial, condominium, renters, involuntary auto and other personal lines.

(2)    Reflects new measures added since prior quarter.

18

THE ALLSTATE CORPORATION

PROPERTY-LIABILITY

HISTORICAL IMPACT OF NET RATE CHANGES APPROVED ON PREMIUMS WRITTEN

	Three months ended				Three months ended				Three months ended				Three months ended
	December 31, 2011 (1)				September 30, 2011				June 30, 2011				March 31, 2011
	Number of			State	Number of			State	Number of			State	Number of			State
	states		Countrywide (%) (4)	specific (%) (5)	states		Countrywide (%) (4)	specific (%) (5)	states		Countrywide (%) (4)	specific (%) (5)	states		Countrywide (%) (4)	specific (%) (5)
Allstate brand
Standard auto (2)	12	(11)	0.7	3.9	10	(10)	0.9	7.3	18	(9)	1.9	5.3	13	(7)(8)	1.1	4.1
Non-standard auto	5	(6)	1.1	6.5	3		0.9	11.5	3		0.4	6.1	3		3.6	18.4
Auto	16	(6)	0.8	4.0	13		0.9	7.4	18		1.9	5.3	15		1.3	4.7
Homeowners (3)	17		2.9	7.8	15		2.3	13.9	18		1.5	6.0	12	(6)	1.8	9.9
Encompass brand
Standard auto	7		1.8	6.5	8		0.7	3.9	3		0.3	4.0	3		0.6	5.0
Non-standard auto	-		-	-	-		-	-	-		-	-	-		-	-
Auto	7		1.8	6.5	8		0.7	3.9	3		0.3	4.0	3		0.6	5.0
Homeowners	8		0.8	4.6	7		0.7	3.0	11	(6)	0.3	2.6	5		1.2	4.9
Esurance brand
Standard auto	n/a	(12)	n/a	n/a	-		-	-	-		-	-	-		-	-

	Three months ended				Three months ended				Three months ended				Three months ended
	December 31, 2010				September 30, 2010				June 30, 2010				March 31, 2010
	Number of			State	Number of			State	Number of			State	Number of		State
	states		Countrywide (%) (4)	specific (%) (5)	states		Countrywide (%) (4)	specific (%) (5)	states		Countrywide (%) (4)	specific (%) (5)	states	Countrywide (%) (4)	specific (%) (5)
Allstate brand
Standard auto (2)	14	(6) (7)	0.4	1.3	21	(7)	0.5	2.8	32	(6)(7)	0.2	0.5	8	0.3	2.9
Non-standard auto	2		0.4	3.2	4		0.7	5.8	5	(6)	2.7	10.9	1	0.9	22.1
Auto	14	(6)	0.4	1.4	24		0.5	2.9	33	(6)	0.3	0.9	9	0.3	3.3
Homeowners (3)	10		3.2	7.4	15		1.0	4.2	14	(6)	2.0	11.3	6	0.9	7.4
Encompass brand
Standard auto	6		0.1	1.1	12		(0.1)	(1.3)	10		(0.1)	(0.5)	6	1.5	7.1
Non-standard auto	-		-	-	-		-	-	-		-	-	-	-	-
Auto	6		0.1	1.1	12		(0.1)	(1.3)	10		(0.1)	(0.5)	6	1.4	7.1
Homeowners	5		0.1	0.8	8	(6)	-	(0.1)	7		-	(0.3)	5	0.7	5.2
Esurance brand
Standard auto	-		-	-	-		-	-	-		-	-	-	-	-

(1)Rate changes include changes approved based on our net cost of reinsurance.  These rate changes do not reflect initial rates filed for insurance subsidiaries initially writing business.  Based on historical premiums written in those states, rate changes approved for the three month period ending December 31, 2011 are estimated to total $314 million.  Rate changes do not include rating plan enhancements, including the introduction of discounts and surcharges, that result in no change in the overall rate level in the state.

(2)Impacts of Allstate brand standard auto effective rate changes as a percentage of total countrywide prior year-end premiums written were 1.2% 1.6%, 0.5%, 1.4%, 0.6%, 0.2%, (0.1)%, 1.5% and 1.6% for the three months ended December 31, 2011, September 30, 2011, June 30, 2011, March 31, 2011, December 31, 2010, September 30, 2010, June 30, 2010 and March 31, 2010, respectively.

(3)Impacts of Allstate brand homeowners effective rate changes as a percentage of total countrywide prior year-end premiums written were 2.6%, 1.1%, 1.2%, 2.9%, 2.5% 1.0%, 1.7% and 1.5% for the three months ended December 31, 2011, September 30, 2011, June 30, 2011, March 31, 2011, December 31, 2010, September 30, 2010, June 30, 2010 and March 31, 2010, respectively.

(4)Represents the impact in the states where rate changes were approved during the year as a percentage of total countrywide prior year-end premiums written.

(5)Represents the impact in the states where rate changes were approved during the year as a percentage of its respective total prior year-end premiums written in those states.

(6)Includes Washington, D.C.

(7)Includes targeted rate decreases in certain markets to improve our competitive position for target customers (multi-car residence owners).

(8)Includes the impact of a 20.9% and 2.3% rate increases in Florida and a 12.0% rate increase in New York in the first quarter of 2011.

(9)Includes the impact of a 20.0% and 6.0% rate increases in Florida and a 3.7% rate increase in New York in the second quarter of 2011.

(10)Includes the impact of a 9.9% average rate increase in New York in the third quarter of 2011.

(11)Includes the impact of a 8.0% rate increase in Florida and a 1.2% rate increase in New York in the fourth quarter of 2011.

(12)n/a reflects not available.

19

THE ALLSTATE CORPORATION

STANDARD AUTO PROFITABILITY MEASURES

		Three months ended																								Twelve months ended
		Dec. 31,			Sept. 30,			June 30,			March 31,			Dec. 31,			Sept. 30,			June 30,			March 31,			Dec. 31,			Dec. 31,
($ in millions)		2011			2011			2011			2011			2010			2010			2010			2010			2011			2010
Standard auto (1)
Net premiums written
Allstate brand	$	3,812		$	3,996		$	3,911		$	3,984		$	3,843		$	4,028		$	3,948		$	4,023		$	15,703		$	15,842
Encompass brand		147			159			154			144			149			166			169			160			604			644
Esurance brand (2)		181			-			-			-			-			-			-			-			181			-
		4,140			4,155			4,065			4,128			3,992			4,194			4,117			4,183			16,488			16,486
Net premiums earned
Allstate brand	$	3,897		$	3,916		$	3,938		$	3,928		$	3,941		$	3,961		$	3,969		$	3,943		$	15,679		$	15,814
Encompass brand		151			154			155			160			164			173			185			194			620			716
Esurance brand (2)		201			-			-			-			-			-			-			-			201			-
		4,249			4,070			4,093			4,088			4,105			4,134			4,154			4,137			16,500			16,530
Incurred losses
Allstate brand	$	2,713		$	2,712		$	2,882		$	2,760		$	2,941		$	2,723		$	2,783		$	2,739		$	11,067		$	11,186
Encompass brand		129			135			122			121			125			131			135			149			507			540
Esurance brand (2)		157			-			-			-			-			-			-			-			157			-
		2,999			2,847			3,004			2,881			3,066			2,854			2,918			2,888			11,731			11,726
Expenses
Allstate brand	$	1,008		$	975		$	986		$	974		$	990		$	970		$	969		$	985		$	3,943		$	3,914
Encompass brand		44			44			44			45			45			52			50			51			177			198
Esurance brand (2)		81			-			-			-			-			-			-			-			81			-
		1,133			1,019			1,030			1,019			1,035			1,022			1,019			1,036			4,201			4,112
Underwriting Income
Allstate brand	$	176		$	229		$	70		$	194		$	10		$	268		$	217		$	219		$	669		$	714
Encompass brand		(22	)		(25	)		(11	)		(6	)		(6	)		(10	)		-			(6	)		(64	)		(22	)
Esurance brand (2)		(37	)		-			-			-			-			-			-			-			(37	)		-
		117			204			59			188			4			258			217			213			568			692
Loss ratio
Allstate brand		69.6			69.3			73.2			70.3			74.6			68.7			70.1			69.4			70.6			70.7
Encompass brand		85.4			87.6			78.7			75.7			76.2			75.7			73.0			76.8			81.8			75.4
Esurance brand (2)		78.1			-			-			-			-			-			-			-			78.1			-
Allstate Protection		70.6			70.0			73.4			70.5			74.7			69.1			70.3			69.8			71.1			70.9
Expense ratio
Allstate brand		25.9			24.9			25.0			24.8			25.1			24.5			24.4			25.0			25.1			24.8
Encompass brand		29.2			28.6			28.4			28.1			27.5			30.1			27.0			26.3			28.5			27.7
Esurance brand (2)		40.3			-			-			-			-			-			-			-			40.3			-
Allstate Protection		26.6			25.0			25.2			24.9			25.2			24.7			24.5			25.1			25.5			24.9
Combined ratio
Allstate brand		95.5			94.2			98.2			95.1			99.7			93.2			94.5			94.4			95.7			95.5
Encompass brand		114.6			116.2			107.1			103.8			103.7			105.8			100.0			103.1			110.3			103.1
Esurance brand (2)		118.4			-			-			-			-			-			-			-			118.4			-
Allstate Protection		97.2			95.0			98.6			95.4			99.9			93.8			94.8			94.9			96.6			95.8
Effect of catastrophe losses on combined ratio
Allstate brand		0.2			2.9			6.7			0.5			0.8			0.4			2.0			0.7			2.6			1.0
Encompass brand		0.7			3.2			3.2			-			1.2			0.6			0.5			1.0			1.8			0.8
Esurance brand (2)		-			-			-			-			-			-			-			-			-			-
Effect of prior year reserve reestimates on combined ratio Allstate brand		(3.2	)		(3.3	)		(2.2	)		(0.4	)		(1.2	)		(0.6	)		(1.9	)		(0.1	)		(2.3	)		(0.9	)
Encompass brand		-			6.5			-			3.1			(6.1	)		(1.7	)		1.6			5.2			2.4			-
Esurance brand		-			-			-			-			-			-			-			-			-			-
Effect of business combination expenses and the amortization of purchased intangible assets on combined ratio (2)
Esurance brand		20.9			-			-			-			-			-			-			-			20.9			-
Allstate brand combined ratio excluding the effect of catastrophes and prior year reserve reestimates (“underlying”)		98.4			94.5			93.6			94.9			100.1			93.1			94.1			93.4			95.3			95.2
Effect of catastrophe losses on combined ratio		0.2			2.9			6.7			0.5			0.8			0.4			2.0			0.7			2.6			1.0
Effect of prior year reserve reestimates on combined ratio		(3.2	)		(3.3	)		(2.2	)		(0.4	)		(1.2	)		(0.6	)		(1.9	)		(0.1	)		(2.3	)		(0.9	)
Effect of catastrophe losses included in prior year reserve reestimates on combined ratio		0.1			0.1			0.1			0.1			-			0.3			0.3			0.4			0.1			0.2
Allstate brand combined ratio		95.5			94.2			98.2			95.1			99.7			93.2			94.5			94.4			95.7			95.5

(1)  Refer to the Allstate Brand Domestic Operating Measures and Statistics page for operating measures and trends.

(2)  Reflects new measures added since prior quarter.

20

THE ALLSTATE CORPORATION

NON-STANDARD AUTO PROFITABILITY MEASURES

	Three months ended																	Twelve months ended
		Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,		Dec. 31,
($ in millions)		2011		2011		2011		2011		2010		2010		2010		2010		2011		2010
Non-standard auto(1)
Net premiums written
Allstate brand	$	174	$	194	$	197	$	210	$	203	$	223	$	220	$	237	$	775	$	883
Encompass brand		-		-		-		1		1		1		1		3		1		6
		174		194		197		211		204		224		221		240		776		889
Net premiums earned
Allstate brand	$	186	$	196	$	205	$	210	$	216	$	222	$	228	$	230	$	797	$	896
Encompass brand		-		-		1		1		1		2		2		4		2		9
		186		196		206		211		217		224		230		234		799		905
Incurred losses
Allstate brand	$	110	$	112	$	142	$	136	$	150	$	137	$	157	$	158	$	500	$	602
Encompass brand		-		1		1		1		1		2		2		4		3		9
		110		113		143		137		151		139		159		162		503		611
Expenses
Allstate brand	$	49	$	48	$	48	$	48	$	38	$	61	$	60	$	56	$	193	$	215
Encompass brand		-		1		-		1		2		1		1		1		2		5
		49		49		48		49		40		62		61		57		195		220
Underwriting Income
Allstate brand	$	27	$	36	$	15	$	26	$	28	$	24	$	11	$	16	$	104	$	79
Encompass brand		-		(2)		-		(1)		(2)		(1)		(1)		(1)		(3)		(5)
		27		34		15		25		26		23		10		15		101		74
Loss ratio
Allstate brand		59.1		57.1		69.3		64.8		69.4		61.7		68.9		68.7		62.8		67.2
Encompass brand		-		-		100.0		100.0		100.0		100.0		100.0		100.0		150.0		100.0
Allstate Protection		59.1		57.7		69.4		64.9		69.6		62.0		69.2		69.2		63.0		67.5
Expense ratio
Allstate brand		26.4		24.5		23.4		22.8		17.6		27.5		26.3		24.3		24.2		24.0
Encompass brand		-		-		-		100.0		200.0		50.0		50.0		25.0		100.0		55.6
Allstate Protection		26.4		25.0		23.3		23.3		18.4		27.7		26.5		24.4		24.4		24.3
Combined ratio
Allstate brand		85.5		81.6		92.7		87.6		87.0		89.2		95.2		93.0		87.0		91.2
Encompass brand		-		-		100.0		200.0		300.0		150.0		150.0		125.0		250.0		155.6
Allstate Protection		85.5		82.7		92.7		88.2		88.0		89.7		95.7		93.6		87.4		91.8
Effect of catastrophe losses on combined ratio
Allstate brand		-		0.5		3.9		-		0.5		-		0.4		0.4		1.1		0.3
Encompass brand		-		-		-		-		-		-		-		-		-		-
Effect of prior year reserve reestimates on combined ratio
Allstate brand		(7.0)		(8.7)		(1.0)		(3.3)		(1.4)		(6.8)		(4.8)		(1.3)		(4.9)		(3.6)
Encompass brand		-		-		(100.0)		-		-		-		-		-		(50.0)		-

(1)    Refer to the Allstate Brand Domestic Operating Measures and Statistics page for operating measures and trends.

21

THE ALLSTATE CORPORATION

AUTO PROFITABILITY MEASURES

	Three months ended																	Twelve months ended
		Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,		Dec. 31,
($ in millions)		2011		2011		2011		2011		2010		2010		2010		2010		2011		2010
Auto (1)
Net premiums written
Allstate brand	$	3,986	$	4,190	$	4,108	$	4,194	$	4,046	$	4,251	$	4,168	$	4,260	$	16,478	$	16,725
Encompass brand		147		159		154		145		150		167		170		163		605		650
Esurance brand (2)		181		-		-		-		-		-		-		-		181		-
		4,314		4,349		4,262		4,339		4,196		4,418		4,338		4,423		17,264		17,375
Net premiums earned
Allstate brand	$	4,083	$	4,112	$	4,143	$	4,138	$	4,157	$	4,183	$	4,197	$	4,173	$	16,476	$	16,710
Encompass brand		151		154		156		161		165		175		187		198		622		725
Esurance brand (2)		201		-		-		-		-		-		-		-		201		-
		4,435		4,266		4,299		4,299		4,322		4,358		4,384		4,371		17,299		17,435
Incurred losses
Allstate brand	$	2,823	$	2,824	$	3,024	$	2,896	$	3,091	$	2,860	$	2,940	$	2,897	$	11,567	$	11,788
Encompass brand		129		136		123		122		126		133		137		153		510		549
Esurance brand (2)		157		-		-		-		-		-		-		-		157		-
		3,109		2,960		3,147		3,018		3,217		2,993		3,077		3,050		12,234		12,337
Expenses
Allstate brand	$	1,057	$	1,023	$	1,034	$	1,022	$	1,028	$	1,031	$	1,029	$	1,041	$	4,136	$	4,129
Encompass brand		44		45		44		46		47		53		51		52		179		203
Esurance brand (2)		81		-		-		-		-		-		-		-		81		-
		1,182		1,068		1,078		1,068		1,075		1,084		1,080		1,093		4,396		4,332
Underwriting Income
Allstate brand	$	203	$	265	$	85	$	220	$	38	$	292	$	228	$	235	$	773	$	793
Encompass brand		(22)		(27)		(11)		(7)		(8)		(11)		(1)		(7)		(67)		(27)
Esurance brand (2)		(37)		-		-		-		-		-		-		-		(37)		-
		144		238		74		213		30		281		227		228		669		766
Loss ratio
Allstate brand		69.1		68.7		73.0		70.0		74.4		68.4		70.1		69.4		70.2		70.6
Encompass brand		85.4		88.3		78.9		75.8		76.3		76.0		73.2		77.3		82.0		75.7
Esurance brand (2)		78.1		-		-		-		-		-		-		-		78.1		-
Allstate Protection		70.1		69.4		73.2		70.2		74.5		68.7		70.2		69.8		70.7		70.8
Expense ratio
Allstate brand		25.9		24.9		24.9		24.7		24.7		24.6		24.5		25.0		25.1		24.7
Encompass brand		29.2		29.2		28.2		28.5		28.5		30.3		27.3		26.2		28.8		28.0
Esurance brand (2)		40.3		-		-		-		-		-		-		-		40.3		-
Allstate Protection		26.7		25.0		25.1		24.8		24.8		24.9		24.6		25.0		25.4		24.8
Combined ratio
Allstate brand		95.0		93.6		97.9		94.7		99.1		93.0		94.6		94.4		95.3		95.3
Encompass brand		114.6		117.5		107.1		104.3		104.8		106.3		100.5		103.5		110.8		103.7
Esurance brand (2)		118.4		-		-		-		-		-		-		-		118.4		-
Allstate Protection		96.8		94.4		98.3		95.0		99.3		93.6		94.8		94.8		96.1		95.6
Effect of catastrophe losses on combined ratio
Allstate brand		0.2		2.7		6.6		0.4		0.8		0.4		1.9		0.7		2.5		0.9
Encompass brand		0.7		3.2		3.2		-		1.2		0.6		0.5		1.0		1.8		0.8
Esurance brand (2)		-		-		-		-		-		-		-		-		-		-
Effect of prior year reserve reestimates on combined ratio
Allstate brand		(3.3)		(3.6)		(2.1)		(0.6)		(1.2)		(0.9)		(2.1)		(0.1)		(2.4)		(1.1)
Encompass brand		-		6.5		(0.6)		3.1		(6.1)		(1.7)		1.6		5.1		2.3		-
Esurance brand (2)		-		-		-		-		-		-		-		-		-		-
Effect of business combination expenses and the amortization of purchased intangible assets on combined ratio (2)
Esurance brand		20.9		-		-		-		-		-		-		-		20.9		-

(1)    Refer to the Allstate Brand Domestic Operating Measures and Statistics page for operating measures and trends.

(2)    Reflects new measures added since prior quarter.

22

THE ALLSTATE CORPORATION

HOMEOWNERS PROFITABILITY MEASURES

	Three months ended																	Twelve months ended
													��
		Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,		Dec. 31,
($ in millions)		2011		2011		2011		2011		2010		2010		2010		2010		2011		2010
Homeowners (1)
Net premiums written
Allstate brand	$	1,428	$	1,634	$	1,606	$	1,225	$	1,389	$	1,610	$	1,565	$	1,189	$	5,893	$	5,753
Encompass brand		89		100		94		79		85		98		94		80		362		357
		1,517		1,734		1,700		1,304		1,474		1,708		1,659		1,269		6,255		6,110
Net premiums earned
Allstate brand	$	1,468	$	1,462	$	1,457	$	1,448	$	1,431	$	1,430	$	1,416	$	1,416	$	5,835	$	5,693
Encompass brand		92		91		91		91		93		96		96		100		365		385
		1,560		1,553		1,548		1,539		1,524		1,526		1,512		1,516		6,200		6,078
Incurred losses
Allstate brand	$	657	$	1,587	$	2,493	$	983	$	1,113	$	1,151	$	1,169	$	1,239	$	5,720	$	4,672
Encompass brand		56		109		98		60		60		61		62		103		323		286
		713		1,696		2,591		1,043		1,173		1,212		1,231		1,342		6,043		4,958
Expenses
Allstate brand	$	367	$	341	$	325	$	341	$	346	$	346	$	309	$	337	$	1,374	$	1,338
Encompass brand		29		27		29		28		28		31		29		29		113		117
		396		368		354		369		374		377		338		366		1,487		1,455
Underwriting Income
Allstate brand	$	444	$	(466)	$	(1,361)	$	124	$	(28)	$	(67)	$	(62)	$	(160)	$	(1,259)	$	(317)
Encompass brand		7		(45)		(36)		3		5		4		5		(32)		(71)		(18)
		451		(511)		(1,397)		127		(23)		(63)		(57)		(192)		(1,330)		(335)
Loss ratio
Allstate brand		44.8		108.6		171.1		67.9		77.8		80.5		82.6		87.5		98.0		82.1
Encompass brand		60.9		119.8		107.7		65.9		64.5		63.5		64.6		103.0		88.5		74.3
Allstate Protection		45.7		109.2		167.4		67.7		77.0		79.4		81.4		88.5		97.5		81.6
Expense ratio
Allstate brand		25.0		23.3		22.3		23.5		24.2		24.2		21.8		23.8		23.6		23.5
Encompass brand		31.5		29.7		31.9		30.8		30.1		32.3		30.2		29.0		31.0		30.4
Allstate Protection		25.4		23.7		22.8		24.0		24.5		24.7		22.4		24.2		24.0		23.9
Combined ratio
Allstate brand		69.8		131.9		193.4		91.4		102.0		104.7		104.4		111.3		121.6		105.6
Encompass brand		92.4		149.5		139.6		96.7		94.6		95.8		94.8		132.0		119.5		104.7
Allstate Protection		71.1		132.9		190.2		91.7		101.5		104.1		103.8		112.7		121.5		105.5
Effect of catastrophe losses on combined ratio
Allstate brand		3.5		55.8		123.2		17.7		30.3		23.1		34.7		37.1		50.0		31.3
Encompass brand		10.9		70.3		61.5		16.5		16.1		13.5		15.6		46.0		39.7		23.1
Effect of prior year reserve reestimates on combined ratio
Allstate brand		(2.4)		-		0.3		(2.7)		(1.8)		5.2		(4.2)		(0.4)		(1.2)		(0.3)
Encompass brand		5.4		(4.4)		(1.1)		1.1		5.4		(7.3)		(1.0)		(2.0)		0.3		(1.3)
Allstate brand combined ratio excluding the effect of catastrophes and prior year reserve reestimates (“underlying”)		66.8		73.3		69.5		74.0		72.2		75.0		69.8		74.7		70.9		72.9
Effect of catastrophe losses on combined ratio		3.5		55.8		123.2		17.7		30.3		23.1		34.7		37.1		50.0		31.3
Effect of prior year reserve reestimates on combined ratio		(2.4)		-		0.3		(2.7)		(1.8)		5.2		(4.2)		(0.4)		(1.2)		(0.3)
Effect of catastrophe losses included in prior year reserve reestimates on combined ratio		1.9		2.8		0.4		2.4		1.3		1.4		4.1		(0.1)		1.9		1.7
Allstate brand combined ratio		69.8		131.9		193.4		91.4		102.0		104.7		104.4		111.3		121.6		105.6

(1)    Refer to the Allstate Brand Domestic Operating Measures and Statistics page for operating measures and trends.

23

THE ALLSTATE CORPORATION

PROPERTY-LIABILITY

ALLSTATE BRAND DOMESTIC OPERATING MEASURES AND STATISTICS (1)

	Three months ended									Twelve months ended
		Dec. 31,	Sept. 30,	June 30,	March 31,	Dec. 31,	Sept. 30,	June 30,	March 31,	Dec. 31,	Dec. 31,
		2011	2011	2011	2011	2010	2010	2010	2010	2011	2010
Policies in Force (in thousands) (2)
Standard auto		17,213	17,286	17,420	17,456	17,484	17,479	17,529	17,581	17,213	17,484
Non-standard auto		571	599	599	627	640	671	706	724	571	640
Involuntary auto		28	32	39	42	43	41	39	32	28	43
Homeowners		6,369	6,459	6,555	6,631	6,690	6,740	6,821	6,886	6,369	6,690
Emerging business (3)		5,157	5,165	5,133	5,064	5,041	5,021	4,994	4,971	5,157	5,041
Canada		924	911	899	882	871	850	830	817	924	871
Allstate Roadside Services		1,043	1,029	1,045	1,039	1,032	1,048	1,058	1,073	1,043	1,032
		31,305	31,481	31,690	31,741	31,801	31,850	31,977	32,084	31,305	31,801
Good Hands Roadside Members (in thousands) (8)		390	129	75	25	10	-	-	-	390	10
New Issued Applications (in thousands) (4)
Standard auto		451	466	472	519	526	537	498	464	1,908	2,025
Non-standard auto		58	61	59	78	63	70	77	99	256	309
Auto		509	527	531	597	589	607	575	563	2,164	2,334
Homeowners		103	116	123	114	126	140	151	119	456	536
Average Premium - Gross Written ($) (5)
Standard auto		450	446	442	439	442	441	444	443	444	443
Non-standard auto		598	586	620	621	627	630	619	619	606	624
Auto		455	451	448	446	449	449	452	451	450	450
Homeowners		1,031	1,001	989	975	963	953	933	921	999	943
Average Premium - Net Earned ($)(6)
Standard auto		428	429	429	430	433	432	433	430	429	432
Non-standard auto		533	533	573	579	576	571	573	571	555	573
Auto		432	432	434	435	438	437	439	436	433	437
Homeowners		890	871	856	844	825	821	803	795	865	811
Renewal Ratio (%) (7)
Standard auto		88.8	89.1	89.2	88.9	88.4	88.7	89.0	88.8	89.0	88.7
Non-standard auto		69.7	70.6	70.8	70.4	70.5	70.8	72.5	71.8	70.4	71.4
Auto		88.0	88.4	88.5	88.1	88.0	87.9	88.3	88.0	88.3	88.1
Homeowners		88.1	88.4	88.4	88.3	88.5	88.6	88.3	88.0	88.3	88.4
Bodily Injury Claim Frequency
(% change year-over-year)
Standard auto		(3.5)	(3.3)	(2.3)	3.1	7.7	7.5	4.2	5.4	(1.6)	6.2
Non-standard auto		(0.3)	(5.9)	(2.4)	2.3	8.1	7.1	1.4	6.6	(1.6)	5.7
Auto		(3.8)	(3.9)	(2.7)	2.7	7.5	7.3	3.9	5.4	(2.0)	5.7
Property Damage Claim Frequency
(% change year-over-year)
Standard auto		(2.6)	(2.6)	(3.9)	1.2	2.4	3.7	1.9	(0.1)	(2.0)	2.0
Non-standard auto		1.1	(2.7)	(1.8)	0.5	0.3	3.3	0.8	3.1	(0.7)	1.8
Auto		(2.7)	(2.9)	(4.0)	0.9	2.2	3.6	1.8	-	(2.2)	1.9
Auto Paid Severity
(% change year-over-year)
Bodily injury		1.9	0.2	0.4	3.6	(0.2)	1.1	(1.0)	(1.3)	1.5	(0.3)
Property damage		5.8	1.0	1.1	0.8	(1.7)	1.0	(1.5)	0.4	2.2	(0.5)
Homeowners Excluding Catastrophe Losses
(% change year-over-year)
Claim frequency		4.5	6.0	(0.8)	1.7	(8.5)	(2.3)	1.7	5.1	2.9	(1.1)
Claim severity		(1.9)	3.3	3.4	3.5	8.0	2.1	(0.7)	(2.1)	2.1	1.6

(1)Measures and statistics presented for Allstate brand exclude the Company’s Canadian operations, loan protection and specialty auto, except for policies in force.

(2)Policies in Force:  Policy counts are based on items rather than customers.  A multi-car customer would generate multiple item (policy) counts, even if all cars were insured under one policy.

(3)Emerging Businesses include Business Insurance (commercial products for small business owners), Consumer Household (specialty products including motorcycle, boat, renters and condominium insurance policies), Allstate Dealer Services (insurance and non-insurance products sold primarily to auto dealers), Allstate Roadside Services (retail and wholesale roadside assistance products) and Ivantage (insurance agency).  Premiums written by Emerging Businesses totaled $582 million, $657 million, $672 million, $575 million, $554 million, $643 million, $659 million and $570 million for the three months ended  December 31, 2011, September 30, 2011, June 30, 2011, March 31, 2011, December 31, 2010, September 30, 2010, June 30, 2010 and March 31, 2010, respectively.  Premiums written by Emerging Businesses totaled $2.49 billion and $2.43 billion for the twelve months ended December 31, 2011 and 2010, respectively. Emerging Business policies in force presented in the table above include statistics for Consumer Household and Business Insurance which are not presented in other lines of business.

(4)New Issued Applications:  Item counts of automobiles or homeowners insurance applications for insurance policies that were issued during the period.  Does not include automobiles that are added by existing customers.

(5)Average Premium - Gross Written:  Gross premiums written divided by issued item count.  Gross premiums written include the impacts from discounts and surcharges; and exclude the impacts from mid-term premium adjustments, ceded reinsurance premiums, and premium refund accruals.  Average premiums represent the appropriate policy term for each line, which is 6 months for auto and 12 months for homeowners.

(6)Average Premium - Net Earned:  Earned premium divided by average policies in force for the period.  Earned premium includes the impacts from mid-term premium adjustments and ceded reinsurance, but does not include impacts of premium refund accruals.  Average premiums represent the appropriate policy term for each line, which is 6 months for auto and 12 months for homeowners.

(7)Renewal ratio:  Renewal policies issued during the period, based on contract effective dates, divided by the total policies issued 6 months prior for auto or 12 months prior for homeowners.

(8)Reflects new measure since prior quarter. Represents free membership which provides pay on demand access to roadside services.

24

THE ALLSTATE CORPORATION

HOMEOWNERS SUPPLEMENTAL INFORMATION

($ in millions)

		Twelve months ended December 31, 2011
										Premium rate changes (5)
Primary Exposure Groupings(1)		Earned premiums		Incurred losses	Loss ratios		Catastrophe losses	Effect of catastrophes on loss ratio	Number of catastrophes	Number of states	Annual impact of rate changes on state specific premiums written
Florida	$	98	$	92	93.9%	$	10	10.2%
Other hurricane exposure states		3,183		3,392	106.6%		1,916	60.2%
Total hurricane exposure states (2)		3,281		3,484	106.2%		1,926	58.7%		16	11.3	%
Other catastrophe exposure states		2,919		2,559	87.7%		1,138	39.0%		25	9.7	%
Total	$	6,200	$	6,043	97.5%	$	3,064	49.4%	91	41	10.7	%

		1992 to 2011 Historical Information								1992 to 2011 Historical Information (Adjusted for Industry Reinsurance or Insurance Mechanism)
Primary Exposure Groupings (1)		Earned premiums		Incurred losses	Loss ratios		Catastrophe losses	Effect of catastrophes on loss ratio		Earned premiums (4)		Incurred losses (3)	Loss ratios (3)		Catastrophe losses (3)	Effect of catastrophes on loss ratio (3)	Number of catastrophes
Florida	$	3,736	$	5,201	139.2%	$	3,570	95.6%	$	3,845	$	3,419	88.9%	$	1,788	46.5%
Other hurricane exposure states		44,879		36,773	81.9%		13,682	30.5%		44,948		36,706	81.7%		13,614	30.3%
Total hurricane exposure states  (2)		48,615		41,974	86.3%		17,252	35.5%		48,793		40,125	82.2%		15,402	31.6%
Other catastrophe exposure states		41,703		32,010	76.8%		10,415	25.0%		41,703		30,168	72.3%		8,573	20.6%
Total	$	90,318	$	73,984	81.9%	$	27,667	30.6%	$	90,496	$	70,293	77.7%	$	23,975	26.5%	1,364

(1) Basis of Presentation

This homeowners supplemental information schedule displays financial results for the homeowners business (defined to include standard homeowners, scheduled personal property and other than primary residence lines) for the period 1992 through 2011.  The premiums and losses are presented on a GAAP basis with adjustments as indicated in Notes 3 and 4.  Each state in which the Company writes business has been categorized into one of two exposure groupings (Hurricane or Other).   Hurricane exposure states are comprised of those states in which hurricanes are the primary catastrophe exposure. However, the catastrophe losses for these states include losses due to other kinds of catastrophes.  A catastrophe is defined by Allstate as an event that produces pre-tax losses before reinsurance in excess of $1 million, and involves multiple first party policyholders, or an event that produces a number of claims in excess of a preset per-event threshold of average claims in a specific area, occurring within a certain amount of time following the event.

(2) Hurricane Exposure States

Hurricane exposure states include the following coastal locations:  Alabama, Connecticut, Delaware, Florida, Georgia, Louisiana, Maine, Maryland, Massachusetts, Mississippi, New Hampshire, New Jersey, New York, North Carolina, Pennsylvania, Rhode Island, South Carolina, Texas, Virginia and Washington, D.C.

(3) Incurred Losses

Incurred losses (which include catastrophe losses) and Catastrophe losses, exclude the effects of those events for which the exposure is now covered, at least in part, by permanent industry reinsurance or insurance mechanism (i.e., Florida Hurricane Catastrophe Fund (“FHCF”), California Earthquake Authority) or with Hawaii hurricanes, coverage is being brokered to a non-affiliated insurance company.  Mechanisms such as the FHCF and external reinsurance are available and are reflected in our capital structure and help mitigate exposure to these types of events.   For the period 1992 - 2011, Incurred losses and Catastrophe losses for the Hurricane exposure states were adjusted to exclude $1.8 billion for losses related to Hurricane Andrew.  Incurred losses and Catastrophe losses for the Other catastrophe exposure states were adjusted to exclude an additional $1.8 billion for losses related to certain California earthquakes and Hawaii hurricanes.  Subsequent catastrophes of a similar magnitude are not excluded from the exhibit.  Through the use of the insurance mechanisms, Allstate may have a contingent liability for industry assessments and losses exceeding the claims paying capacity of these mechanisms as discussed in the Annual Report on Form 10-K.

(4) Earned Premiums

Earned premiums for the Hurricane exposure locations was adjusted to add back premium ceded to third party reinsurers of $178 million for hurricane reinsurance purchased in Florida, the Northeast and other states during the period 1992 to 2005.  These programs support management actions that address hurricane exposures.  Mechanisms such as the FHCF and external reinsurance are available and are reflected in our capital structure because they help mitigate exposure to these types of events, but no impact is reflected in earned premiums above.

(5) Premium Rate Changes

Represents the impact in the states where rate changes were approved during the year as a percentage of total prior year-end premiums written in those states.

25

THE ALLSTATE CORPORATION

PROPERTY-LIABILITY

EFFECT OF CATASTROPHE LOSSES ON THE COMBINED RATIO

($ in millions, except ratios)

										Excludes the effect of catastrophe losses relating to earthquakes and hurricanes
	Effect of all catastrophe losses on the Property-Liability combined ratio					Premiums earned		Total catastrophe		Total catastrophe		Effect on the Property-Liability
	Quarter 1	Quarter 2	Quarter 3	Quarter 4	Year	year-to-date		losses by year		losses by year		combined ratio
1992 (3)	3.2	7.1	48.7	25.5	21.2	$	15,542	$	3,301	$	680	4.4
1993 (3)	5.8	3.0	1.2	3.8	3.4	16,039		547		607		3.8
1994 (3)	27.4	4.4	9.5	7.3	12.0	16,513		1,989		529		3.2
1995	4.0	7.8	3.8	5.0	5.2	17,540		905		683		3.9
1996	5.1	6.0	6.4	3.8	5.4	18,366		983		837		4.6
1997	2.4	2.6	2.6	0.3	2.0	18,604		365		325		1.7
1998	2.5	6.3	3.9	3.4	4.0	19,307		780		615		3.2
1999	2.6	5.6	5.4	2.7	4.1	20,112		816		623		3.1
2000	7.0	6.7	1.7	2.3	4.4	21,871		967		930		4.3
2001	1.5	9.8	2.5	2.4	4.0	22,197		894		763		3.4
2002	1.9	5.0	1.6	4.0	3.1	23,361		731		638		2.7
2003	2.2	9.2	6.1	6.5	6.0	24,677		1,489		1,256		5.1
2004	1.6	3.8	26.0	6.2	9.5	25,989		2,468		467		1.8
2005	2.5	2.2	69.4	9.6	21.0	27,039		5,674		460		1.7
2006	1.6	3.7	2.5	4.1	3.0	27,369		810		1,044		3.8
2007	2.4	6.3	5.0	7.0	5.2	27,233		1,409		1,336		4.9
2008	8.4	10.3	26.8	3.9	12.4	26,967		3,342		1,876		7.0
2009	7.8	12.5	6.2	5.0	7.9	26,194		2,069		2,159		8.2
2010	10.0	9.8	5.9	8.3	8.5	25,957		2,207		2,272		8.8
2011	5.2	36.2	16.7	1.0	14.7	25,942		3,815		3,298		12.7
Average (2)	5.0	8.3	13.1	5.4	8.0							4.8
	Excludes the effect of catastrophe losses relating to Hurricane Andrew, California Earthquakes, and Hawaii Hurricanes (1)					Premiums earned		Total catastrophe
	Quarter 1	Quarter 2	Quarter 3	Quarter 4	Year	year-to-date		losses by year
1992 (3)	3.2	7.0	4.5	2.9	4.4	$	15,542	$	681
1993 (3)	5.6	3.0	1.5	5.1	3.8	16,039		607
1994 (3)	5.1	3.8	1.7	2.5	3.2	16,513		535
1995	4.0	7.7	1.8	5.0	4.6	17,540		843
1996	5.1	6.0	6.4	3.8	5.4	18,366		991
1997	2.4	2.6	1.8	0.3	1.8	18,604		329
1998	2.0	6.3	3.9	2.2	3.6	19,307		695
1999	2.6	5.6	5.4	2.3	3.9	20,112		790
2000	7.0	6.7	1.5	1.8	4.3	21,871		930
2001	1.5	8.1	2.5	1.7	3.5	22,197		769
2002	1.8	5.0	1.6	3.6	3.0	23,361		706
2003	2.1	9.0	6.1	6.4	5.9	24,677		1,458
2004	1.6	3.8	26.0	6.2	9.5	25,989		2,468
2005	2.5	2.2	69.4	9.6	21.0	27,039		5,674
2006	1.6	3.7	2.5	4.1	3.0	27,369		810
2007	2.4	6.3	5.0	7.0	5.2	27,233		1,409
2008	8.4	10.3	26.8	3.9	12.4	26,967		3,342
2009	7.8	12.5	6.2	5.0	7.9	26,194		2,069
2010	10.0	9.8	5.9	8.3	8.5	25,957		2,207
2011	5.2	36.2	16.7	1.0	14.7	25,942		3,815
Average (2)	4.1	8.2	11.2	4.3	7.0

(1)	The effect of Catastrophe losses on the combined ratio is presented excluding the effects of those events for which the exposure is now covered by an industry reinsurance or insurance mechanism (i.e., Florida Hurricane Catastrophe Fund and California Earthquake Authority) or with Hawaii hurricanes, coverage is being brokered to a non-affiliated insurance company (see the “Commitments, Guarantees and Contingent Liabilities” footnote to the Consolidated Financial Statements).
(2)	The effect of Catastrophes and Catastrophes excluding extraordinary catastrophes on the Combined Ratio calculated as an average for all periods since 1992.
(3)	The years 1992-1994 have been adjusted to exclude the premiums earned of the PMI Group, a mortgage guarantee insurer that was sold in 1995.

26

THE ALLSTATE CORPORATION

ALLSTATE PROTECTION HISTORICAL CATASTROPHE BY SIZE OF EVENT

($ in millions, except ratios)

Three months ended December 31, 2011
										Average
	Number				Claim and			Combined		catastrophe
Size of catastrophe	of events				claim expense			ratio impact		loss per event
Greater than $250 million	-	-	%	$	-	-	%	-	$	-
$101 million to $250 million	-	-			-	-		-		-
$50 million to $100 million	2	10.5			123	186.4		1.9		62
Less than $50 million	17	89.5			93	140.9		1.4		5
Total	19	100.0	%		216	327.3		3.3		11
Prior year reserve reestimates					(32)	(48.5)		(0.5)
Prior quarter reserve reestimates					(118)	(178.8)		(1.8)
Total catastrophe losses				$	66	100.0	%	1.0

Twelve months ended December 31, 2011
										Average
	Number				Claim and			Combined		catastrophe
Size of catastrophe	of events				claim expense			ratio impact		loss per event
Greater than $250 million	4	4.4	%	$	1,595	41.8	%	6.1	$	399
$101 million to $250 million	4	4.4			563	14.8		2.2		141
$50 million to $100 million	12	13.2			877	23.0		3.4		73
Less than $50 million	71	78.0			910	23.8		3.5		13
Total	91	100.0	%		3,945	103.4		15.2		43
Prior year reserve reestimates					(130)	(3.4)		(0.5)
Total catastrophe losses				$	3,815	100.0	%	14.7

1995 through December 31, 2011
	Principal										Average
	state with	Number				Claim and			Combined		catastrophe
Size of catastrophe	loss	of events				claim expense			ratio impact		loss per event
Greater than $250 million
Hurricane Katrina - 2005	LA				$	3,592	12.1	%	0.9	$	3,592
Hurricane Rita - 2005	TX					891	3.0		0.2		891
Hurricane Ike - 2008	TX					857	2.9		0.2		857
Hurricane Ivan - 2004	FL					632	2.1		0.2		632
Hurricane Charley - 2004	FL					604	2.0		0.1		604
Hurricane Frances - 2004	FL					549	1.9		0.1		549
Hurricane Wilma - 2005	FL					547	1.8		0.1		547
Hurricane Irene - 2011	NY, NJ, MD					522	1.8		0.1		522
May 2011 Tornados	TX, OH, MO					486	1.6		0.1		486
April 27th 2011 Tornados	AL					326	1.1		0.1		326
Hurricane Jeanne - 2004	FL					335	1.1		0.1		335
Arizona Hail - 2010	AZ					302	1.0		0.1		302
October 2003 Fires	CA					300	1.0		0.1		300
Hurricane Gustav - 2008	LA					271	0.9		0.1		271
April 24th 2011 Tornados	TN					261	0.9		0.1		261
Greater than $250 million		15	1.3	%		10,475	35.2		2.6		698
$101 million to $250 million		24	2.0			3,616	12.2		0.9		151
$50 million to $100 million		65	5.6			4,578	15.4		1.2		70
Less than $50 million		1,071	91.1			11,055	37.2		2.8		10
Total		1,175	100.0	%	$	29,724	100.0	%	7.5		25

27

THE ALLSTATE CORPORATION

PROPERTY-LIABILITY

EFFECT OF PRIOR YEAR RESERVE REESTIMATES ON THE COMBINED RATIO

($ in millions, except ratios)

		Three months ended																Twelve months ended
		Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,		Dec. 31,
		2011		2011		2011		2011		2010		2010		2010		2010		2011		2010
Prior Year Reserve Reestimates (1)
Auto	$	(136)	$	(136)	$	(90)	$	(19)	$	(59)	$	(40)	$	(85)	$	5	$	(381)	$	(179)
Homeowners		(30)		(4)		3		(38)		(21)		67		(61)		(8)		(69)		(23)
Other personal lines		33		12		36		13		80		(38)		(5)		(22)		94		15
Allstate Protection (2)		(133)		(128)		(51)		(44)		-		(11)		(151)		(25)		(356)		(187)
Discontinued Lines and Coverages		3		11		4		3		3		22		1		2		21		28
Property-Liability	$	(130)	$	(117)	$	(47)	$	(41)	$	3	$	11	$	(150)	$	(23)	$	(335)	$	(159)
Allstate brand	$	(142)	$	(132)	$	(49)	$	(48)	$	5	$	-	$	(152)	$	(34)	$	(371)	$	(181)
Encompass brand		9		4		(2)		4		(5)		(11)		1		9		15		(6)
Esurance brand (3)		-		-		-		-		-		-		-		-		-		-
Allstate Protection (2)	$	(133)	$	(128)	$	(51)	$	(44)	$	-	$	(11)	$	(151)	$	(25)	$	(356)	$	(187)
Effect of Prior Year Reserve
Reestimates on Combined Ratio (1)
Auto		(2.1)		(2.1)		(1.4)		(0.3)		(0.9)		(0.6)		(1.3)		0.1		(1.5)		(0.7)
Homeowners		(0.4)		(0.1)		-		(0.6)		(0.3)		1.0		(0.9)		(0.1)		(0.3)		(0.1)
Other personal lines		0.5		0.2		0.6		0.2		1.2		(0.6)		(0.1)		(0.4)		0.4		0.1
Allstate Protection (2)		(2.0)		(2.0)		(0.8)		(0.7)		-		(0.2)		(2.3)		(0.4)		(1.4)		(0.7)
Discontinued Lines and Coverages		-		0.2		0.1		-		0.1		0.4		-		-		0.1		0.1
Property-Liability		(2.0)		(1.8)		(0.7)		(0.7)		0.1		0.2		(2.3)		(0.4)		(1.3)		(0.6)
Allstate brand		(2.1)		(2.1)		(0.8)		(0.8)		0.1		-		(2.3)		(0.5)		(1.4)		(0.7)
Encompass brand		0.1		0.1		-		0.1		(0.1)		(0.2)		-		0.1		-		-
Esurance brand (3)		-		-		-		-		-		-		-		-		-		-
Allstate Protection (2)		(2.0)		(2.0)		(0.8)		(0.7)		-		(0.2)		(2.3)		(0.4)		(1.4)		(0.7)

(1)	Favorable reserve reestimates are shown in parentheses.
(2)	Favorable reserve reestimates included in catastrophe losses totaled $32 million and $23 million in the three months ended December 31, 2011 and 2010, respectively. Favorable reserve reestimates included in catastrophe losses totaled $130 million and $163 million in the twelve months ended December 31, 2011 and 2010, respectively.
(3)	Reflects new measures added since prior quarter.

28

THE ALLSTATE CORPORATION

PROPERTY-LIABILITY

HISTORICAL PRIOR YEAR RESERVE REESTIMATES(1)

($ in millions)

		Twelve months ended December 31,
		2011			2010			2009			2008			2007
Allstate brand	$	(371	)	$	(181	)	$	(126	)	$	155		$	(167	)
Encompass brand		15			(6	)		(10	)		(3	)		(52	)
Esurance brand		-			-			-			-			-
Allstate Protection		(356	)		(187	)		(136	)		152			(219	)
Discontinued Lines and Coverages		21			28			24			18			47
Property-Liability	$	(335	)	$	(159	)	$	(112	)	$	170		$	(172	)
Effect of Property-Liability prior year reserve reestimates on the combined ratio (1)		(1.3	)		(0.6	)		(0.4	)		0.7			(0.6	)

(1)   Favorable reserve reestimates are shown in parentheses.

29

THE ALLSTATE CORPORATION

HISTORICAL PROPERTY-LIABILITY LOSS RESERVES

($ in millions)

		Twelve months ended December 31,
		2011				2010				2009				2008				2007
(net of reinsurance)
Net reserve for claims and claims expense, beginning of year	$	17,396			$	17,028			$	17,182			$	16,660			$	16,610
Acquisitions		425				-				-				-				-
Claims and claims expense
Provision attributable to the current year		20,496				19,110				18,858				19,894				17,839
Change in provision attributable to prior years (1)		(335	)			(159	)			(112	)			170				(172	)
Total claims and claims expense		20,161				18,951				18,746				20,064				17,667
Payments
Claims and claims expense attributable to current year		(13,683	)			(12,012	)			(11,906	)			(12,658	)			(10,933	)
Claims and claims expense attributable to prior years		(6,512	)			(6,571	)			(6,994	)			(6,884	)			(6,684	)
Total payments		(20,195	)			(18,583	)			(18,900	)			(19,542	)			(17,617	)
Net reserve for claims and claims expense, end of year (2)	$	17,787			$	17,396			$	17,028			$	17,182			$	16,660
Percent change in loss reserves		2.2		%		2.2		%		(0.9	)	%		3.1		%		0.3		%
(1)Reserve reestimates due to:
Asbestos and environmental claims	$	26			$	23			$	5			$	8			$	80
All other property-liability claims		(361	)			(182	)			(117	)			162				(252	)
Change in pre-tax reserve	$	(335	)		$	(159	)		$	(112	)		$	170			$	(172	)

(2)Net reserves for claims and claims expense are net of expected reinsurance recoveries of $2.59 billion, $2.07 billion, $2.14 billion, $2.27 billion and $2.21 billion at December 31, 2011, 2010, 2009, 2008 and 2007, respectively.

30

THE ALLSTATE CORPORATION

ASBESTOS AND ENVIRONMENTAL RESERVES

($ in millions)

		Three months ended												Twelve months ended December 31,
		Dec. 31,			Sept. 30,			June 30,			March 31,
		2011			2011			2011			2011			2011			2010			2009			2008			2007
(net of reinsurance)
Asbestos claims
Beginning reserves	$	1,093		$	1,092		$	1,091		$	1,100		$	1,100		$	1,180		$	1,228		$	1,302		$	1,375
Incurred claims and claims expense		-			26			-			-			26			5			(8	)		8			17
Claims and claims expense paid		(15	)		(25	)		1			(9	)		(48	)		(85	)		(40	)		(82	)		(90	)
Ending reserves	$	1,078		$	1,093		$	1,092		$	1,091		$	1,078		$	1,100		$	1,180		$	1,228		$	1,302
Claims and claims expense paid as a percent of ending reserves		1.4%			2.3%			(0.1)%			0.8%			4.5%			7.7%			3.4%			6.7%			6.9%
Environmental claims
Beginning reserves	$	187		$	192		$	193		$	201		$	201		$	198		$	195		$	232		$	194
Incurred claims and claims expense		-			-			-			-			-			18			13			-			63
Claims and claims expense paid		(2	)		(5	)		(1	)		(8	)		(16	)		(15	)		(10	)		(37	)		(25	)
Ending reserves	$	185		$	187		$	192		$	193		$	185		$	201		$	198		$	195		$	232
Claims and claims expense paid as a percent of ending reserves		1.1%			2.7%			0.5%			4.1%			8.6%			7.5%			5.1%			19.0%			10.8%

31

THE ALLSTATE CORPORATION

ALLSTATE FINANCIAL RESULTS

($ in millions)

	Three months ended																									Twelve months ended
		Dec. 31,			Sept. 30,			June 30,			March 31,			Dec. 31,			Sept. 30,			June 30,			March 31,			Dec. 31,			Dec. 31,
		2011			2011			2011			2011			2010			2010			2010			2010			2011			2010
Investments	$	57,373		$	59,068		$	59,659		$	60,484		$	61,582		$	62,915		$	61,804		$	62,336		$	57,373		$	61,582
Premiums		305		$	287		$	286		$	312		$	273		$	290		$	286		$	289			1,190			1,138
Contract charges		265			265			261			257			258			258			259			255			1,048			1,030
Net investment income		656			682			694			684			692			707			723			731			2,716			2,853
Periodic settlements and accruals on non-hedge derivative instruments		16			18			19			17			13			10			11			17			70			51
Contract benefits		(430	)		(455	)		(422	)		(454	)		(443	)		(445	)		(485	)		(442	)		(1,761	)		(1,815	)
Interest credited to contractholder funds		(385	)		(395	)		(412	)		(425	)		(439	)		(446	)		(450	)		(463	)		(1,617	)		(1,798	)
Amortization of deferred policy acquisition costs		(93	)		(101	)		(103	)		(113	)		(86	)		(101	)		(41	)		(58	)		(410	)		(286	)
Operating costs and expenses		(131	)		(105	)		(110	)		(109	)		(115	)		(118	)		(116	)		(120	)		(455	)		(469	)
Restructuring and related charges		(3	)		-			-			2			2			-			1			-			(1	)		3
Income tax expense on operations		(62	)		(62	)		(72	)		(55	)		(51	)		(47	)		(63	)		(70	)		(251	)		(231	)
Operating income (1)		138			134			141			116			104			108			125			139			529			476
Realized capital gains and losses, after-tax		43			142			40			25			23			(25	)		(230	)		(105	)		250			(337	)
Valuation changes on embedded derivatives that are not hedged, after-tax		(13	)		(4	)		(3	)		8			-			-			-			-			(12	)		-
DAC and DSI (amortization) accretion relating to realized capital gains and losses and valuation changes on embedded derivatives that are not hedged, after-tax		(18	)		(78	)		(5	)		(26	)		(43	)		7			4			(2	)		(127	)		(34	)
DAC and DSI unlocking relating to realized capital gains and losses, after-tax		-			-			-			1			-			-			-			(18	)		1			(18	)
Reclassification of periodic settlements and accruals on non-hedge derivative instruments, after-tax		(10	)		(12	)		(11	)		(12	)		(8	)		(7	)		(7	)		(11	)		(45	)		(33	)
Gain (loss) on disposition of operations, after-tax		-			1			4			(15	)		-			2			1			1			(10	)		4
Net income (loss)	$	140		$	183		$	166		$	97		$	76		$	85		$	(107	)	$	4		$	586		$	58

(1) Operating income for the fourth quarter of 2011 includes $10 million of net favorable non-recurring items comprising a $25 million after-tax increase due to a reduction in accident and health insurance reserves at Allstate Benefits as of December 31, 2011 related to a contract modification, partially offset by a $7 million after-tax decrease due to a charge related to the liquidation plan for Executive Life Insurance Company of New York and $8 million after-tax decrease for other non-recurring expenses.

32

THE ALLSTATE CORPORATION

HISTORICAL ALLSTATE FINANCIAL RESULTS

($ in millions)

		As of or for the Year Ended December 31,
		2011			2010		2009		2008		2007
Investments	$	57,373		$	61,582	$	62,216	$	61,449	$	74,256
Premiums	1,190			1,138		969		943		870
Contract charges	1,048			1,030		989		952		996
Net investment income	2,716			2,853		3,064		3,811		4,297
Periodic settlements and accruals on non-hedge derivative instruments	70			51		14		20		46
Contract benefits	(1,761)			(1,815)		(1,617)		(1,612)		(1,589)
Interest credited to contractholder funds	(1,617)			(1,798)		(2,038)		(2,417)		(2,682)
Operating costs and expenses (1)	(865)			(755)		(867)		(1,051)		(1,042)
Restructuring and related charges	(1)			3		(25)		(1)		(2)
Income tax expense on operations		(251)			(231)		(149)		(207)		(279)
Operating income	529			476		340		438		615
Realized capital gains and losses, after-tax (2)	124			(389)		(818)		(1,923)		(113)
Non-recurring items, after-tax (3)	-			-		-		(219)		-
Valuation changes on embedded derivatives that are not hedged, after-tax	(12)			-		-		-		-
Reclassification of periodic settlements and accruals on non-hedge derivative instruments, after-tax	(45)			(33)		(9)		(13)		(29)
(Loss) gain on disposition of operations, after-tax		(10)			4		4		(4)		(8)
Net income (loss)	$	586		$	58	$	(483)	$	(1,721)	$	465
Life insurance in force, net of reinsurance	$	306,377	(4)	$	294,149	$	281,961	$	280,042	$	271,035

(1)	Includes amortization expense on DAC, excluding the portion relating to realized capital gains and losses.
(2)	Includes amortization expense on DAC and DSI relating to realized capital gains and losses, after-tax.
(3)	During the fourth quarter of 2008, for traditional life insurance and immediate annuities with life contingencies, an aggregate premium deficiency of $336 million, pre-tax ($219 million, after-tax) resulted primarily from an experience study indicating that the annuitants on certain life-contingent contracts are projected to live longer than we anticipated when the contracts were issued, and, to a lesser degree, a reduction in the related investment portfolio yield. The deficiency was recorded through a reduction in deferred acquisition costs.
(4)	Estimated using the most available information.

33

ALLSTATE FINANCIAL

RETURN ON ATTRIBUTED EQUITY

($ in millions)

	Twelve months ended
		Dec. 31,				Sept. 30,			June 30,			March 31,				Dec. 31,				Sept. 30,				June 30,				March 31,
		2011				2011			2011			2011				2010				2010				2010				2010
Return on Attributed Equity
Numerator:
Net income (loss) (1)	$		586		$		522	$		424	$		151		$		58		$		(155)		$		(278)		$		(152		)
Denominator:
Beginning attributed equity (2)	$		6,748		$		6,801	$		6,280	$		5,931		$		5,413		$		5,883		$		4,809		$		2,990
Ending attributed equity		7,563				7,378			7,214			6,946				6,748				6,801				6,280				5,931
Average attributed equity (3)	$		7,156		$		7,090	$		6,747	$		6,439		$		6,081		$		6,342		$		5,545		$		4,461
Return on attributed equity		8.2		%		7.4		%	6.3		%	2.3		%		1.0		%		(2.4)		%		(5.0)		%		(3.4		)		%
Operating Income Return on Attributed Equity
Numerator:
Operating income (1)	$		529		$		495	$		469	$		453		$		476		$		467		$		454		$		394
Denominator:
Beginning attributed equity	$		6,748		$		6,801	$		6,280	$		5,931		$		5,413		$		5,883		$		4,809		$		2,990
Unrealized net capital gains and losses		536				664			199			(256)				(794)				(65)				(1,155)				(2,457		)
Adjusted beginning attributed equity		6,212				6,137			6,081			6,187				6,207				5,948				5,964				5,447
Ending attributed equity		7,563				7,378			7,214			6,946				6,748				6,801				6,280				5,931
Unrealized net capital gains and losses		805				743			764			663				536				664				199				(256		)
Adjusted ending attributed equity		6,758				6,635			6,450			6,283				6,212				6,137				6,081				6,187
Average adjusted attributed equity (3)	$		6,485		$		6,386	$		6,266	$		6,235		$		6,210		$		6,043		$		6,023		$		5,817
Operating income return on attributed equity		8.2		%		7.8		%	7.5		%	7.3		%		7.7		%		7.7		%		7.5		%		6.8				%

(1)Net income (loss) and operating income reflect a trailing twelve-month period.

(2)Allstate Financial attributed equity is the sum of equity for Allstate Life Insurance Company, the applicable equity for Allstate Heritage Life Investment Corporation, and the equity for Allstate Bank.

(3)Average attributed equity and average adjusted attributed equity are determined using a two-point average, with the beginning and ending attributed equity and adjusted attributed equity, respectively, for the twelve-month period as data points.

34

THE ALLSTATE CORPORATION

ALLSTATE FINANCIAL PREMIUMS AND CONTRACT CHARGES

($ in millions)

	Three months ended																	Twelve months ended
		Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,		Dec. 31,
		2011		2011		2011		2011		2010		2010		2010		2010		2011		2010
PREMIUMS AND CONTRACT CHARGES - BY PRODUCT
Underwritten Products
Traditional life insurance premiums	$	113	$	111	$	109	$	108	$	103	$	107	$	104	$	106	$	441	$	420
Accident and health insurance premiums		160		160		162		161		157		157		151		156		643		621
Interest-sensitive life insurance contract charges		256		258		253		248		251		249		249		242		1,015		991
		529		529		524		517		511		513		504		504		2,099		2,032
Annuities
Immediate annuities with life contingencies premiums		32		16		15		43		13		26		31		27		106		97
Other fixed annuity contract charges		9		7		8		9		7		9		10		13		33		39
		41		23		23		52		20		35		41		40		139		136
Total	$	570	$	552	$	547	$	569	$	531	$	548	$	545	$	544	$	2,238	$	2,168
PREMIUMS AND CONTRACT CHARGES - BY DISTRIBUTION CHANNEL
Allstate agencies	$	264	$	260	$	256	$	251	$	253	$	247	$	247	$	246	$	1,031	$	993
Workplace enrolling agents		171		171		169		168		166		166		161		161		679		654
Other		135		121		122		150		112		135		137		137		528		521
Total	$	570	$	552	$	547	$	569	$	531	$	548	$	545	$	544	$	2,238	$	2,168
ISSUED LIFE INSURANCE APPLICATIONS BY DISTRIBUTION CHANNEL(1)
Allstate agencies		45,491		30,265		30,151		25,918		31,828		22,943		23,482		20,999		131,825		99,252
Other		970		973		997		981		810		1,174		1,727		2,437		3,921		6,148
Total		46,461		31,238		31,148		26,899		32,638		24,117		25,209		23,436		135,746		105,400

(1)      Reflects new measure added since prior quarter. Excludes Allstate Benefits and non-proprietary products.

35

THE ALLSTATE CORPORATION

CHANGE IN CONTRACTHOLDER FUNDS

($ in millions)

	Three months ended																	Twelve months ended
		Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,		Dec. 31,
		2011		2011		2011		2011		2010		2010		2010		2010		2011		2010
Beginning balance	$	43,776	$	45,078	$	46,834	$	48,195	$	48,936	$	49,443	$	51,027	$	52,582	$	48,195	$	52,582
Deposits
Fixed annuities		228		133		142		164		180		224		237		291		667		932
Interest-sensitive life insurance		324		319		316		329		363		363		391		395		1,288		1,512
Bank and other deposits		19		34		97		213		246		262		234		252		363		994
Total deposits		571		486		555		706		789		849		862		938		2,318		3,438
Interest credited		406		400		413		410		439		445		448		462		1,629		1,794
Maturities, benefits, withdrawals and other adjustments
Maturities and retirements of institutional products		(48)		(26)		(306)		(487)		(49)		(3)		(827)		(954)		(867)		(1,833)
Benefits		(326)		(396)		(367)		(372)		(365)		(397)		(395)		(395)		(1,461)		(1,552)
Surrenders and partial withdrawals		(1,869)		(1,513)		(1,723)		(1,293)		(1,305)		(1,295)		(1,355)		(1,248)		(6,398)		(5,203)
Contract charges		(265)		(257)		(255)		(251)		(252)		(247)		(243)		(241)		(1,028)		(983)
Net transfers from separate accounts		3		3		3		3		3		3		3		2		12		11
Fair value hedge adjustments for institutional products		-		-		-		(34)		(23)		24		(74)		(123)		(34)		(196)
Other adjustments		84		1		(76)		(43)		22		114		(3)		4		(34)		137
Total maturities, benefits, withdrawals  and other adjustments		(2,421)		(2,188)		(2,724)		(2,477)		(1,969)		(1,801)		(2,894)		(2,955)		(9,810)		(9,619)
Ending balance	$	42,332	$	43,776	$	45,078	$	46,834	$	48,195	$	48,936	$	49,443	$	51,027	$	42,332	$	48,195

36

THE ALLSTATE CORPORATION

ALLSTATE FINANCIAL ANALYSIS OF NET INCOME

($ in millions)

	Three months ended																	Twelve months ended
		Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,		Dec. 31,
		2011		2011		2011		2011		2010		2010		2010		2010		2011		2010
Benefit spread
Premiums	$	305	$	287	$	286	$	312	$	273	$	290	$	286	$	289	$	1,190	$	1,138
Cost of insurance contract charges (1)		168		167		162		162		161		161		159		156		659		637
Contract benefits excluding the implied interest on immediate annuities with life contingencies (2)		(294)		(320)		(287)		(319)		(307)		(310)		(346)		(303)		(1,220)		(1,266)
Total benefit spread		179		134		161		155		127		141		99		142		629		509
Investment spread
Net investment income		656		682		694		684		692		707		723		731		2,716		2,853
Implied interest on immediate annuities with life contingencies (2)		(136)		(135)		(135)		(135)		(136)		(135)		(139)		(139)		(541)		(549)
Interest credited to contractholder funds		(405)		(405)		(417)		(418)		(449)		(445)		(450)		(463)		(1,645)		(1,807)
Total investment spread		115		142		142		131		107		127		134		129		530		497
Surrender charges and contract maintenance expense fees (1)		97		98		99		95		97		97		100		99		389		393
Realized capital gains and losses		68		219		62		39		36		(38)		(353)		(162)		388		(517)
Amortization of deferred policy acquisition costs		(121)		(215)		(110)		(147)		(141)		(91)		(35)		(89)		(593)		(356)
Operating costs and expenses		(131)		(105)		(110)		(109)		(115)		(118)		(116)		(120)		(455)		(469)
Restructuring and related charges		(3)		-		-		2		2		-		1		-		(1)		3
Gain (loss) on disposition of operations		1		1		6		(23)		(1)		4		2		1		(15)		6
Income tax (expense) benefit on operations		(65)		(91)		(84)		(46)		(36)		(37)		61		4		(286)		(8)
Net income (loss)	$	140	$	183	$	166	$	97	$	76	$	85	$	(107)	$	4	$	586	$	58
Benefit spread by product group
Life insurance	$	74	$	90	$	98	$	93	$	78	$	93	$	23	$	88	$	355	$	282
Accident and health insurance		114		70		71		74		63		65		60		64		329		252
Annuities		(9)		(26)		(8)		(12)		(14)		(17)		16		(10)		(55)		(25)
Total benefit spread	$	179	$	134	$	161	$	155	$	127	$	141	$	99	$	142	$	629	$	509
Investment spread by product group
Annuities and institutional products	$	23	$	48	$	51	$	48	$	31	$	44	$	54	$	50	$	170	$	179
Life insurance		12		17		14		11		11		11		6		7		54		35
Allstate Bank products		2		6		6		8		7		8		8		8		22		31
Accident and health insurance		5		4		5		5		5		5		4		4		19		18
Net investment income on investments supporting capital		73		67		66		59		53		59		62		60		265		234
Total investment spread	$	115	$	142	$	142	$	131	$	107	$	127	$	134	$	129	$	530	$	497
(1) Reconciliation of contract charges
Cost of insurance contract charges	$	168	$	167	$	162	$	162	$	161	$	161	$	159	$	156	$	659	$	637
Surrender charges and contract maintenance expense fees		97		98		99		95		97		97		100		99		389		393
Total contract charges	$	265	$	265	$	261	$	257	$	258	$	258	$	259	$	255	$	1,048	$	1,030
(2) Reconciliation of contract benefits
Contract benefits excluding the implied interest
on immediate annuities with life contingencies	$	(294)	$	(320)	$	(287)	$	(319)	$	(307)	$	(310)	$	(346)	$	(303)	$	(1,220)	$	(1,266)
Implied interest on immediate annuities with life contingencies		(136)		(135)		(135)		(135)		(136)		(135)		(139)		(139)		(541)		(549)
Total contract benefits	$	(430)	$	(455)	$	(422)	$	(454)	$	(443)	$	(445)	$	(485)	$	(442)	$	(1,761)	$	(1,815)

37

THE ALLSTATE CORPORATION

ALLSTATE FINANCIAL WEIGHTED AVERAGE INVESTMENT SPREADS

	Three months ended December 31, 2011						Three months ended December 31, 2010
	Weighted average		Weighted average		Weighted average		Weighted average		Weighted average		Weighted average
	investment yield		interest crediting rate		investment spreads		investment yield		interest crediting rate		investment spreads
Interest-sensitive life insurance	5.3	%	4.2	%	1.1	%	5.4	%	4.3	%	1.1	%
Deferred fixed annuities and institutional products	4.5		3.2		1.3		4.3		3.3		1.0
Immediate fixed annuities with and without life contingencies	6.2		6.2		-		6.5		6.3		0.2
Investments supporting capital, traditional life and other products	4.0		n/a		n/a		3.6		n/a		n/a

	Twelve months ended December 31, 2011						Twelve months ended December 31, 2010
	Weighted average		Weighted average		Weighted average		Weighted average		Weighted average		Weighted average
	investment yield		interest crediting rate		investment spreads		investment yield		interest crediting rate		investment spreads
Interest-sensitive life insurance	5.4	%	4.2	%	1.2	%	5.5	%	4.4	%	1.1	%
Deferred fixed annuities and institutional products	4.6		3.3		1.3		4.4		3.2		1.2
Immediate fixed annuities with and without life contingencies	6.3		6.2		0.1		6.4		6.4		-
Investments supporting capital, traditional life and other products	3.9		n/a		n/a		3.7		n/a		n/a

38

THE ALLSTATE CORPORATION

ALLSTATE FINANCIAL SUPPLEMENTAL PRODUCT INFORMATION

($ in millions)

		As of Dec. 31, 2011				Twelve months ended Dec. 31, 2011
				Attributed equity
		Reserves and		excluding unrealized		Operating	Operating income return
		Contractholder funds		capital gains/losses (3)(4)		income (5)	on attributed equity
Life insurance	$	14,004	$	2,676	$	274	11.1	%
Accident and health insurance		1,861		669		98	15.4
Annuities and institutional and bank products:
Deferred Annuities		25,699		2,069		180	8.8
Immediate Annuities:
Sub-standard structured settlements and group pension terminations (1)		5,188		822		(25)	(3.0)
Standard structured settlements and SPIA (2)		8,100		355		(1)	(0.5)
Institutional products		1,929		70		(5)	(6.9)
Bank		-		97		8	7.4
Sub-total		40,916		3,413		157	4.7
Total Allstate Financial	$	56,781	$	6,758	$	529	8.2

		Twelve months ended Dec. 31, 2011
						Annuities and
		Life		Accident and		institutional and		Allstate
		insurance		health insurance		bank products		Financial
Operating income	$	274	$	98	$	157	$	529
Realized capital gains and losses, after-tax		25		1		224		250
Valuation changes on embedded derivatives that are not hedged, after-tax		-		-		(12)		(12)
DAC and DSI (amortization) accretion relating to realized capital gains and losses and valuation changes on embedded derivatives that are not hedged, after-tax		(17)		-		(110)		(127)
DAC and DSI unlocking relating to realized capital gains and losses, after-tax		1		-		-		1
Reclassification of periodic settlements and accruals on non-hedge derivative instruments, after-tax		1		-		(46)		(45)
Loss on disposition of operations, after-tax		-		-		(10)		(10)
Net income	$	284	$	99	$	203	$	586

(1)Structured settlement annuities for annuitants with severe injuries or other health impairments which significantly reduced their life expectancy at the time the annuity was issued and group annuity contracts issued to sponsors of terminated pension plans.

(2)Life-contingent structured settlement annuities for annuitants with standard life expectancy, period certain structured settlements and single premium immediate annuities with and without life contingencies.

(3)Total Allstate Financial attributed equity is the sum of equity for Allstate Life Insurance Company, the applicable equity for Allstate Heritage Life Investment Corporation, and the equity for Allstate Bank.

(4)Attributed equity is allocated to each product line based on statutory capital adjusted for GAAP reporting differences and the amount of capital held in Allstate Financial may vary from economic capital. The calculation of statutory capital by product incorporates internal factors for invested asset risk, insurance risk (mortality and morbidity), interest rate risk and business risk.  Due to the unavailability of final statutory financial statements at the time we release our GAAP financial results, the allocation is derived from average statutory capital over the prior four quarters.  Statutory capital is adjusted for appropriate GAAP accounting differences.  Changes in internal capital factors, investment portfolio mix and risk as well as changes in GAAP and statutory reporting differences will result in changes to the allocation of attributed equity to products.

(5)Product line operating income includes allocation of income on investments supporting capital.

39

THE ALLSTATE CORPORATION

CORPORATE AND OTHER RESULTS

($ in millions)

	Three months ended																	Twelve months ended
		Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,		Dec. 31,
		2011		2011		2011		2011		2010		2010		2010		2010		2011		2010
Net investment income	$	10	$	14	$	16	$	14	$	15	$	14	$	16	$	15	$	54	$	60
Operating costs and expenses		(88)		(116)		(98)		(91)		(86)		(95)		(101)		(97)		(393)		(379)
Income tax benefit on operations		29		31		32		31		32		31		33		32		123		128
Operating loss		(49)		(71)		(50)		(46)		(39)		(50)		(52)		(50)		(216)		(191)
Business combination expenses, after-tax (1)		(10)		-		-		-		-		-		-		-		(10)		-
Realized capital gains and losses, after-tax		5		13		2		-		(1)		1		5		2		20		7
Net loss	$	(54)	$	(58)	$	(48)	$	(46)	$	(40)	$	(49)	$	(47)	$	(48)	$	(206)	$	(184)

(1)Reflects new measure added since prior quarter.

40

THE ALLSTATE CORPORATION

INVESTMENTS

($ in millions)

	PROPERTY-LIABILITY											ALLSTATE FINANCIAL
		Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,		Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,
		2011		2011		2011		2011		2010		2011		2011		2011		2011		2010
Fixed income securities, at fair value:
Tax-exempt	$	8,239	$	8,799	$	8,778	$	8,942	$	9,394	$	38	$	38	$	40	$	61	$	62
Taxable		19,562		18,203		18,726		19,126		18,019		46,252		46,829		47,821		49,117		49,872
Equity securities, at fair value		4,165		3,977		4,748		4,199		4,578		198		180		206		238		233
Mortgage loans		474		377		132		16		18		6,665		6,579		6,695		6,566		6,661
Limited partnership interests		3,055		2,863		2,913		2,684		2,506		1,612		1,508		1,449		1,358		1,274
Short-term, at fair value		451		719		770		473		430		645		1,908		1,342		874		1,297
Other		52		68		52		17		103		1,963		2,026		2,106		2,270		2,183
Total	$	35,998	$	35,006	$	36,119	$	35,457	$	35,048	$	57,373	$	59,068	$	59,659	$	60,484	$	61,582
Fixed income securities, at amortized cost:
Tax-exempt	$	7,935	$	8,568	$	8,650	$	8,981	$	9,399	$	37	$	37	$	39	$	59	$	59
Taxable		19,188		17,942		18,456		19,076		17,981		44,259		44,931		46,380		48,224		49,130
Ratio of fair value to amortized cost		102.5%		101.9%		101.5%		100.0%		100.1%		104.5%		104.2%		103.1%		101.9%		101.5%
Equity securities, at cost	$	4,044	$	4,094	$	4,170	$	3,616	$	4,043	$	159	$	158	$	159	$	176	$	185
Short-term, at amortized cost		451		719		770		473		430		645		1,908		1,342		874		1,297
	CORPORATE AND OTHER											CONSOLIDATED
		Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,		Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,
		2011		2011		2011		2011		2010		2011		2011		2011		2011		2010
Fixed income securities, at fair value:
Tax-exempt	$	728	$	732	$	698	$	706	$	658	$	9,005	$	9,569	$	9,516	$	9,709	$	10,114
Taxable		1,294		1,793		2,351		2,290		1,607		67,108		66,825		68,898		70,533		69,498
Equity securities, at fair value		-		-		-		-		-		4,363		4,157		4,954		4,437		4,811
Mortgage loans		-		-		-		-		-		7,139		6,956		6,827		6,582		6,679
Limited partnership interests		30		36		38		35		36		4,697		4,407		4,400		4,077		3,816
Short-term, at fair value		195		890		424		639		1,552		1,291		3,517		2,536		1,986		3,279
Other		-		-		-		-		-		2,015		2,094		2,158		2,287		2,286
Total	$	2,247	$	3,451	$	3,511	$	3,670	$	3,853	$	95,618	$	97,525	$	99,289	$	99,611	$	100,483
Fixed income securities, at amortized cost:
Tax-exempt	$	689	$	698	$	670	$	684	$	637	$	8,661	$	9,303	$	9,359	$	9,724	$	10,095
Taxable		1,271		1,759		2,307		2,268		1,580		64,718		64,632		67,143		69,568		68,691
Ratio of fair value to amortized cost		103.2%		102.8%		102.4%		101.5%		102.2%		103.7%		103.3%		102.5%		101.2%		101.0%
Equity securities, at cost	$	-	$	-	$	-	$	-	$	-	$	4,203	$	4,252	$	4,329	$	3,792	$	4,228
Short-term, at amortized cost		195		890		424		639		1,552		1,291		3,517		2,536		1,986		3,279

41

THE ALLSTATE CORPORATION

UNREALIZED NET CAPITAL GAINS AND LOSSES ON SECURITY PORTFOLIO BY TYPE

($ in millions)

		December 31, 2011						September 30, 2011						June 30, 2011
		Unrealized net				Fair value		Unrealized net				Fair value		Unrealized net				Fair value
		capital gains			Fair	as a percent of		capital gains			Fair	as a percent of		capital gains			Fair	as a percent of
		and losses			value	amortized cost (1)		and losses			value	amortized cost (1)		and losses			value	amortized cost (1)
Fixed income securities
U.S. government and agencies	$	349		$	6,315	105.8	$	337		$	4,346	108.4	$	315		$	6,187	105.4
Municipal		607			14,241	104.5		554			14,999	103.8		116			14,673	100.8
Corporate		2,364			43,581	105.7		2,194			44,529	105.2		1,759			42,369	104.3
Foreign government		215			2,081	111.5		192			2,133	109.9		323			3,043	111.9
Residential mortgage-backed securities (“RMBS”)		(411	)		4,121	90.9		(395	)		4,632	92.1		(366	)		5,990	94.2
Commercial mortgage-backed securities (“CMBS”)		(178	)		1,784	90.9		(221	)		1,824	89.2		(97	)		1,986	95.3
Asset-backed securities (“ABS”)		(214	)		3,966	94.9		(204	)		3,906	95.0		(139	)		4,142	96.8
Redeemable preferred stock		2			24	109.1		2			25	108.7		1			24	104.3
Total fixed income securities		2,734			76,113	103.7		2,459			76,394	103.3		1,912			78,414	102.5
Equity securities		160			4,363	103.8		(95	)		4,157	97.8		625			4,954	114.4
Short-term investments		-			1,291	100.0		-			3,517	100.0		-			2,536	100.0
Derivatives		(17	)		168	90.8		(15	)		244	94.2		(36	)		348	90.6
EMA limited partnership interests (2)		2			n/a	n/a		7			n/a	n/a		7			n/a	n/a
Unrealized net capital gains and losses, pre-tax	$	2,879		$	81,935	103.6	$	2,356		$	84,312	102.9	$	2,508		$	86,252	103.0
Amounts recognized for:
Insurance reserves (3)		(637	)					(641	)					(217	)
DAC and DSI (4)		(139	)					(122	)					(61	)
Amounts recognized		(776	)					(763	)					(278	)
Deferred income taxes		(740	)					(561	)					(784	)
Unrealized net capital gains and losses, after-tax	$	1,363					$	1,032					$	1,446
		March 31, 2011						December 31, 2010						September 30, 2010
		Unrealized net				Fair value		Unrealized net				Fair value		Unrealized net				Fair value
		capital gains			Fair	as a percent of		capital gains			Fair	as a percent of		capital gains			Fair	as a percent of
		and losses			value	amortized cost (1)		and losses			value	amortized cost (1)		and losses			value	amortized cost (1)
Fixed income securities
U.S. government and agencies	$	257		$	6,766	103.9	$	276		$	8,596	103.3	$	532		$	11,253	105.0
Municipal		(254	)		15,246	98.4		(267	)		15,934	98.4		402			16,768	102.5
Corporate		1,300			42,395	103.2		1,395			37,655	103.8		2,334			37,204	106.7
Foreign government		295			3,117	110.5		337			3,158	111.9		482			3,428	116.4
RMBS		(377	)		6,530	94.5		(516	)		7,993	93.9		(693	)		8,499	92.5
CMBS		(103	)		2,053	95.2		(219	)		1,994	90.1		(382	)		1,993	83.9
ABS		(169	)		4,111	96.1		(181	)		4,244	95.9		(270	)		4,010	93.7
Redeemable preferred stock		1			24	104.3		1			38	102.7		2			38	105.6
Total fixed income securities		950			80,242	101.2		826			79,612	101.0		2,407			83,193	103.0
Equity securities		645			4,437	117.0		583			4,811	113.8		260			3,707	107.5
Short-term investments		-			1,986	100.0		-			3,279	100.0		-			2,776	100.0
Derivatives		(30	)		512	94.5		(22	)		439	95.2		(17	)		318	94.9
EMA limited partnership interests (2)		7			n/a	n/a		-			n/a	n/a		-			n/a	n/a
Unrealized net capital gains and losses, pre-tax	$	1,572		$	87,177	101.8	$	1,387		$	88,141	101.6	$	2,650		$	89,994	103.0
Amounts recognized for:
Insurance reserves (3)		(2	)					(41	)					(608	)
DAC and DSI (4)		95						97						(49	)
Amounts recognized		93						56						(657	)
Deferred income taxes		(586	)					(508	)					(701	)
Unrealized net capital gains and losses, after-tax	$	1,079					$	935					$	1,292

(1)	The comparison of percentages from period to period may be distorted by investment transactions such as sales, purchases and impairment write-downs.
(2)	Unrealized net capital gains and losses for limited partnership interest represent the Company’s share of Equity Method of Accounting (“EMA”) limited partnerships’ other comprehensive income. Fair value and amortized cost are not applicable.
(3)	The insurance reserves adjustment represents the amount by which the reserve balance would increase if the net unrealized gains in the applicable product portfolios were realized and reinvested at current lower interest rates, resulting in a premium deficiency. Although we evaluate premium deficiencies on the combined performance of our life insurance and immediate annuities with life contingencies, the adjustment primarily relates to structured settlement annuities with life contingencies, in addition to annuity buy-outs and certain payout annuities with life contingencies.
(4)	The DAC and DSI adjustment balance represents the amount by which the amortization of DAC and DSI would increase or decrease if the unrealized gains or losses in the respective product portfolios were realized.

42

THE ALLSTATE CORPORATION

GROSS UNREALIZED GAINS AND LOSSES ON FIXED INCOME SECURITIES BY TYPE AND SECTOR

($ in millions)

		As of December 31, 2011
												Amortized
												cost as a		Fair value
		Par		Amortized		Gross unrealized					Fair	percent of		as a percent
		value (1)		cost		Gains		Losses			value	par value (2)		of par value (2)
Corporate:
Banking	$	3,649	$	3,621	$	96	$	(185	)	$	3,532	99.2	%	96.8	%
Financial services		3,695		3,643		169		(54	)		3,758	98.6		101.7
Capital goods		4,878		4,915		372		(32	)		5,255	100.8		107.7
Utilities		7,204		7,201		711		(32	)		7,880	100.0		109.4
Consumer goods (cyclical and non-cyclical)		8,250		8,361		521		(21	)		8,861	101.3		107.4
Transportation		1,851		1,858		164		(15	)		2,007	100.4		108.4
Communications		2,638		2,647		151		(14	)		2,784	100.3		105.5
Basic industry		2,287		2,302		140		(8	)		2,434	100.7		106.4
Energy		3,363		3,408		242		(4	)		3,646	101.3		108.4
Technology		1,841		1,874		109		(3	)		1,980	101.8		107.6
Other		1,491		1,387		68		(11	)		1,444	93.0		96.8
Total corporate fixed income portfolio		41,147		41,217		2,743		(379	)		43,581	100.2		105.9
U.S. government and agencies		6,310		5,966		349		-			6,315	94.5		100.1
Municipal		15,543		13,634		863		(256	)		14,241	87.7		91.6
Foreign government		1,951		1,866		216		(1	)		2,081	95.6		106.7
RMBS		5,292		4,532		110		(521	)		4,121	85.6		77.9
CMBS		2,017		1,962		48		(226	)		1,784	97.3		88.4
ABS		4,458		4,180		73		(287	)		3,966	93.8		89.0
Redeemable preferred stock		22		22		2		-			24	100.0		109.1
Total fixed income securities	$	76,740	$	73,379	$	4,404	$	(1,670	)	$	76,113	95.6		99.2

(1)Included in par value are zero-coupon securities that are generally purchased at a deep discount to the par value that is received at maturity.  These primarily included corporate, U.S. government and agencies, municipal and foreign government zero-coupon securities with par value of $514 million, $948 million, $3.48 billion and $382 million, respectively.

(2)Excluding the impact of zero-coupon securities, the percentage of amortized cost to par value would be 100.5% for corporates, 101.4% for U.S. government and agencies, 101.2% for municipals and 103.3% for foreign governments.  Similarly, excluding the impact of zero-coupon securities, the percentage of fair value to par value would be 106.2% for corporates, 104.7% for U.S. government and agencies, 106.1% for municipals and 111.3% for foreign governments.

43

THE ALLSTATE CORPORATION

FAIR VALUE AND UNREALIZED NET CAPITAL GAINS AND LOSSES FOR FIXED INCOME SECURITIES BY CREDIT RATING

($ in millions)

		As of December 31, 2011
		Aaa					Aa					A					Baa					Ba or lower (1)					Total
		Fair		Unrealized			Fair		Unrealized			Fair		Unrealized			Fair		Unrealized			Fair		Unrealized			Par		Fair		Unrealized
		value		gain/(loss)			value		gain/(loss)			value		gain/(loss)			value		gain/(loss)			value		gain/(loss)			value		value		gain/(loss)
U.S. government and agencies	$	6,315	$	349		$	-	$	-		$	-	$	-		$	-	$	-		$	-	$	-		$	6,310	$	6,315	$	349
Municipal
Tax exempt		901		61			4,557		227			2,134		106			966		9			447		(59	)		8,977		9,005		344
Taxable		208		23			2,690		289			1,093		79			394		(26	)		109		(22	)		5,744		4,494		343
Auction rate securities		511		(37	)		91		(13	)		78		(14	)		-		-			62		(16	)		822		742		(80	)
Sub-total		1,620		47			7,338		503			3,305		171			1,360		(17	)		618		(97	)		15,543		14,241		607
Corporate
Public		1,000		61			2,816		180			11,716		793			11,468		710			2,405		19			27,379		29,405		1,763
Privately placed		1,029		48			1,524		90			4,173		274			6,385		202			1,065		(13	)		13,768		14,176		601
Sub-total		2,029		109			4,340		270			15,889		1,067			17,853		912			3,470		6			41,147		43,581		2,364
Foreign government		821		124			478		35			486		29			296		27			-		-			1,951		2,081		215
RMBS
U.S. government sponsored entities		1,897		80			-		-			-		-			-		-			-		-			1,781		1,897		80
Prime residential mortgage-backed securities		185		2			55		-			161		2			36		-			475		(32	)		1,024		912		(28	)
Alt-A residential mortgage-backed securities		-		-			40		(1	)		68		-			27		-			364		(79	)		851		499		(80	)
Subprime residential mortgage-backed securities		-		-			52		(18	)		43		(7	)		61		(30	)		657		(328	)		1,636		813		(383	)
Sub-total		2,082		82			147		(19	)		272		(5	)		124		(30	)		1,496		(439	)		5,292		4,121		(411	)
CMBS		941		33			214		(5	)		166		(31	)		293		(83	)		170		(92	)		2,017		1,784		(178	)
ABS
Collateralized debt obligations		117		(2	)		750		(34	)		340		(74	)		183		(64	)		234		(79	)		2,156		1,624		(253	)
Consumer and other asset-backed securities		1,418		34			306		2			360		2			241		3			17		(2	)		2,302		2,342		39
Sub-total		1,535		32			1,056		(32	)		700		(72	)		424		(61	)		251		(81	)		4,458		3,966		(214	)
Redeemable preferred stock		-		-			1		-			-		-			23		2			-		-			22		24		2
Total fixed income securities	$	15,343	$	776		$	13,574	$	752		$	20,818	$	1,159		$	20,373	$	750		$	6,005	$	(703	)	$	76,740	$	76,113	$	2,734

(1)Securities rated below investment grade comprise securities with a rating of Ba or lower. As of December 31, 2011, 40% of our $825 million below investment grade gross unrealized losses related to Subprime RMBS.  The fair value of these securities totaled $586 million, a decrease of 26.4%, compared to $796 million as of December 31, 2010.  Gross unrealized losses on these securities totaled $334 million as of December 31, 2011, compared to $438 million as of December 31, 2010.

44

THE ALLSTATE CORPORATION

REALIZED CAPITAL GAINS AND LOSSES BY TRANSACTION TYPE

($ in millions)

		Three months ended																Twelve months ended
		Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,		Dec. 31,
		2011		2011		2011		2011		2010		2010		2010		2010		2011		2010
Impairment write-downs	$	(122)	$	(190)	$	(70)	$	(114)	$	(198)	$	(137)	$	(239)	$	(223)	$	(496)	$	(797)
Change in intent write-downs		(2)		(13)		(16)		(69)		(75)		(30)		(67)		(32)		(100)		(204)
Net other-than-temporary impairment losses recognized in earnings		(124)		(203)		(86)		(183)		(273)		(167)		(306)		(255)		(596)		(1,001)
Sales		220		692		141		283		134		319		145		88		1,336		686
Valuation of derivative instruments		(9)		(254)		(50)		22		144		(133)		(283)		(155)		(291)		(427)
Settlements of derivative instruments		(33)		20		(3)		(89)		35		(152)		(27)		(30)		(105)		(174)
EMA limited partnership income		32		9		55		63		76		(11)		20		4		159		89
Total	$	86	$	264	$	57	$	96	$	116	$	(144)	$	(451)	$	(348)	$	503	$	(827)

45

THE ALLSTATE CORPORATION

PROPERTY-LIABILITY

NET INVESTMENT INCOME, YIELDS AND REALIZED CAPITAL GAINS AND LOSSES (PRE-TAX)

($ in millions)

	Three months ended																	Twelve months ended
		Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,		Dec. 31,
		2011		2011		2011		2011		2010		2010		2010		2010		2011		2010
NET INVESTMENT INCOME
Fixed income securities:
Tax-exempt	$	96	$	100	$	108	$	111	$	118	$	132	$	153	$	165	$	415	$	568
Taxable		170		176		180		169		154		152		143		130		695		579
Equity securities		44		20		32		18		25		16		23		20		114		84
Mortgage loans		4		3		1		-		1		-		-		1		8		2
Cost limited partnership interests(1)		12		15		7		5		10		3		3		3		39		19
Short-term		1		1		-		1		-		1		1		1		3		3
Other		1		-		1		1		1		1		5		1		3		8
Sub-total		328		315		329		305		309		305		328		321		1,277		1,263
Less: Investment expense		(19)		(17)		(19)		(21)		(18)		(21)		(18)		(17)		(76)		(74)
Net investment income	$	309	$	298	$	310	$	284	$	291	$	284	$	310	$	304	$	1,201	$	1,189
Net investment income, after-tax	$	233	$	225	$	236	$	219	$	225	$	225	$	249	$	247	$	913	$	946
PRE-TAX YIELDS (2)
Fixed income securities:
Tax-exempt		4.6		4.6		4.9		4.8		4.9		4.9		4.9		4.9		4.8		4.9
Equivalent yield for tax-exempt		6.7		6.7		7.1		7.0		7.1		7.1		7.1		7.1		7.0		7.1
Taxable		3.7		3.9		3.8		3.6		3.4		3.4		3.5		3.5		3.8		3.5
Equity securities		4.3		1.9		3.3		1.9		2.7		2.0		2.9		2.0		2.8		2.3
Mortgage loans		4.2		4.5		3.2		6.7		7.1		4.2		5.4		6.0		4.0		5.7
Cost limited partnership interests		6.3		8.8		4.2		2.9		5.8		2.0		1.8		2.4		5.6		3.1
Total portfolio (3)		4.0		3.9		4.0		3.7		3.8		3.7		3.9		3.8		3.9		3.8
REALIZED CAPITAL GAINS AND LOSSES
(PRE-TAX) BY ASSET TYPE
Fixed income securities:
Tax-exempt	$	5	$	30	$	(16)	$	(13)	$	(29)	$	76	$	(23)	$	(4)	$	6	$	20
Taxable		28		119		9		(29)		(11)		25		6		(43)		127		(23)
Equity securities		3		(77)		(2)		124		10		68		25		14		48		117
Limited partnership interests		33		(3)		20		46		44		(13)		15		(7)		96		39
Derivatives and other		(57)		(45)		(19)		(71)		68		(263)		(129)		(150)		(192)		(474)
Total	$	12	$	24	$	(8)	$	57	$	82	$	(107)	$	(106)	$	(190)	$	85	$	(321)
REALIZED CAPITAL GAINS AND LOSSES
(PRE-TAX) BY TRANSACTION TYPE
Impairment write-downs	$	(54)	$	(105)	$	(27)	$	(64)	$	(63)	$	(57)	$	(96)	$	(79)	$	(250)	$	(295)
Change in intent write-downs		(1)		(10)		(11)		(27)		(33)		(10)		(10)		(9)		(49)		(62)
Net other-than-temporary impairment losses recognized in earnings		(55)		(115)		(38)		(91)		(96)		(67)		(106)		(88)		(299)		(357)
Sales		82		186		29		172		65		228		121		41		469		455
Valuation of derivative instruments		(12)		(56)		(12)		26		47		(143)		(134)		(101)		(54)		(331)
Settlements of derivative instruments		(36)		11		(7)		(95)		21		(118)		3		(49)		(127)		(143)
EMA limited partnership income		33		(2)		20		45		45		(7)		10		7		96		55
Total	$	12	$	24	$	(8)	$	57	$	82	$	(107)	$	(106)	$	(190)	$	85	$	(321)
AVERAGE INVESTED ASSETS (in billions) (4)	$	34.9	$	34.9	$	35.0	$	34.7	$	34.7	$	34.9	$	34.8	$	34.6	$	34.9	$	34.7

(1)As of December 31, 2011, Property-Liability has commitments to invest in additional limited partnership interests totaling $1.22 billion.

(2)Pre-tax yields are calculated as annualized investment income (including dividend income in the case of equity securities) divided by the average of investment balances at the end of each quarter during the year.  Investment balances, for purposes of the pre-tax yield calculation, exclude unrealized capital gains and losses.

(3)The pre-tax yield for the total portfolio reflects the yield on total investments.  Total investments includes fixed income and equity securities, mortgage loans, cost limited partnership interests, short-term and other investments.

(4)Average invested assets for the quarter are calculated as the average of the current and prior quarter invested assets. Year-to-date average invested assets are calculated as the average of invested assets at the end of each quarter during the year.  For purposes of the average invested assets calculation, unrealized capital gains and losses are excluded.

46

THE ALLSTATE CORPORATION

ALLSTATE FINANCIAL

NET INVESTMENT INCOME, YIELDS AND REALIZED CAPITAL GAINS AND LOSSES (PRE-TAX)

($ in millions)

		Three months ended																Twelve months ended
		Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,		Dec. 31,
		2011		2011		2011		2011		2010		2010		2010		2010		2011		2010
NET INVESTMENT INCOME
Fixed income securities	$	546	$	572	$	596	$	607	$	614	$	631	$	646	$	652	$	2,321	$	2,543
Equity securities		2		3		2		1		2		1		2		1		8		6
Mortgage loans		88		88		86		89		89		92		99		103		351		383
Cost limited partnership interests (1)		15		18		11		5		11		3		4		3		49		21
Short-term		-		1		-		1		-		1		-		1		2		2
Other		29		26		24		9		5		3		-		(2)		88		6
Sub-total		680		708		719		712		721		731		751		758		2,819		2,961
Less: Investment expense		(24)		(26)		(25)		(28)		(29)		(24)		(28)		(27)		(103)		(108)
Net investment income	$	656	$	682	$	694	$	684	$	692	$	707	$	723	$	731	$	2,716	$	2,853
Net investment income, after-tax	$	431	$	448	$	455	$	449	$	453	$	463	$	473	$	478	$	1,783	$	1,867
PRE-TAX YIELDS (2)
Fixed income securities		4.9		5.0		5.0		5.0		5.0		5.0		5.1		5.1		5.0		5.0
Equity securities		4.6		8.0		2.9		3.3		3.6		2.8		3.5		2.3		4.6		3.1
Mortgage loans		5.3		5.3		5.2		5.4		5.3		5.2		5.4		5.3		5.3		5.3
Cost limited partnership interests		8.6		10.2		6.3		2.7		7.0		1.8		3.3		1.9		7.0		3.6
Total portfolio (3)		4.9		5.0		4.9		4.8		4.8		4.8		4.8		4.8		4.9		4.8
REALIZED CAPITAL GAINS AND LOSSES
(PRE-TAX) BY ASSET TYPE
Fixed income securities	$	56	$	433	$	46	$	15	$	(85)	$	(19)	$	(177)	$	(92)	$	550	$	(373)
Equity securities		-		-		17		(2)		1		15		20		-		15		36
Mortgage loans		10		(28)		(3)		(4)		(17)		(1)		(28)		(25)		(25)		(71)
Limited partnership interests		(1)		11		30		22		28		(6)		9		(15)		62		16
Derivatives and other		3		(197)		(28)		8		109		(27)		(177)		(30)		(214)		(125)
Total	$	68	$	219	$	62	$	39	$	36	$	(38)	$	(353)	$	(162)	$	388	$	(517)
REALIZED CAPITAL GAINS AND LOSSES
(PRE-TAX) BY TRANSACTION TYPE
Impairment write-downs	$	(68)	$	(85)	$	(43)	$	(50)	$	(134)	$	(80)	$	(143)	$	(144)	$	(246)	$	(501)
Change in intent write-downs		(1)		(3)		(5)		(42)		(42)		(20)		(57)		(23)		(51)		(142)
Net other-than-temporary impairment losses recognized in earnings		(69)		(88)		(48)		(92)		(176)		(100)		(200)		(167)		(297)		(643)
Sales		130		485		112		111		68		89		18		44		838		219
Valuation of derivative instruments		3		(198)		(38)		(4)		99		10		(149)		(54)		(237)		(94)
Settlements of derivative instruments		3		9		4		6		14		(34)		(30)		19		22		(31)
EMA limited partnership income		1		11		32		18		31		(3)		8		(4)		62		32
Total	$	68	$	219	$	62	$	39	$	36	$	(38)	$	(353)	$	(162)	$	388	$	(517)
AVERAGE INVESTED ASSETS (in billions) (4)	$	56.2	$	57.7	$	58.8	$	60.2	$	61.0	$	61.4	$	62.5	$	63.9	$	58.2	$	62.3

(1)	As of December 31, 2011, Allstate Financial has commitments to invest in additional limited partnership interests totaling $797 million.
(2)	Pre-tax yields are calculated as annualized investment income (including dividend income in the case of equity securities) divided by the average of investment balances at the end of each quarter during the year. Investment balances, for purposes of the pre-tax yield calculation, exclude unrealized capital gains and losses.
(3)	The pre-tax yield for the total portfolio reflects the yield on total investments. Total investments include fixed income and equity securities, mortgage loans, cost limited partnership interests, short-term and other investments.
(4)	Average invested assets for the quarter are calculated as the average of the current and prior quarter invested assets. Year-to-date average invested assets are calculated as the average of invested assets at the end of each quarter during the year. For purposes of the average invested assets calculation, unrealized capital gains and losses are excluded.

47

Definitions of Non-GAAP and Operating Measures

We believe that investors’ understanding of Allstate’s performance is enhanced by our disclosure of the following non-GAAP financial measures.  Our methods for calculating these measures may differ from those used by other companies and therefore comparability may be limited.

Operating income (loss) is net income (loss), excluding:

- realized capital gains and losses, after-tax, except for periodic settlements and accruals on non-hedge derivative instruments, which are reported with realized capital gains and losses but included in operating income (loss),

- valuation changes on embedded derivatives that are not hedged, after-tax,

- amortization of deferred acquisition costs (“DAC”) and deferred sales inducements (“DSI”), to the extent they resulted from the recognition of certain realized capital gains and losses or valuation changes on embedded derivatives that are not hedged, after-tax,

- business combination expenses and the amortization of purchased intangible assets, after-tax,

- gain (loss) on disposition of operations, after-tax, and

- adjustments for other significant non-recurring, infrequent or unusual items, when (a) the nature of the charge or gain is such that it is reasonably unlikely to recur within two years, or (b) there has been no similar charge or gain within the prior two years.

Net income (loss) is the GAAP measure that is most directly comparable to operating income (loss).   We use operating income (loss) as an important measure to evaluate our results of operations.  We believe that the measure provides investors with a valuable measure of the Company’s ongoing performance because it reveals trends in our insurance and financial services business that may be obscured by the net effect of realized capital gains and losses, valuation changes on embedded derivatives that are not hedged, business combination expenses and the amortization of certain purchased intangible assets, gain (loss) on disposition of operations and adjustments for other significant non-recurring, infrequent or unusual items.  Realized capital gains and losses, valuation changes on embedded derivatives that are not hedged and gain (loss) on disposition of operations may vary significantly between periods and are generally driven by business decisions and external economic developments such as capital market conditions, the timing of which is unrelated to the insurance underwriting process.  Consistent with our intent to protect results or earn additional income, operating income (loss) includes periodic settlements and accruals on certain derivative instruments that are reported in realized capital gains and losses because they do not qualify for hedge accounting or are not designated as hedges for accounting purposes.  These instruments are used for economic hedges and to replicate fixed income securities, and by including them in operating income (loss), we are appropriately reflecting their trends in our performance and in a manner consistent with the economically hedged investments, product attributes (e.g. net investment income and interest credited to contractholder funds) or replicated investments.  Business combination expenses are excluded because they are non-recurring in nature and the amortization of purchased intangible assets is excluded because it relates to the acquisition purchase price and is not indicative of our underlying insurance business results or trends. Non-recurring items are excluded because, by their nature, they are not indicative of our business or economic trends.  Accordingly, operating income (loss) excludes the effect of items that tend to be highly variable from period to period and highlights the results from ongoing operations and the underlying profitability of our business.  A byproduct of excluding these items to determine operating income (loss) is the transparency and understanding of their significance to net income variability and profitability while recognizing these or similar  items may recur in subsequent periods.  Operating income (loss) is used by management along with the other components of net income (loss) to assess our performance.  We use adjusted measures of operating income (loss) and operating income (loss) per diluted share in incentive compensation.  Therefore, we believe it is useful for investors to evaluate net income (loss), operating income (loss) and their components separately and in the aggregate when reviewing and evaluating our performance.  We note that investors, financial analysts, financial and business media organizations and rating agencies utilize operating income (loss) results in their evaluation of our and our industry’s financial performance and in their investment decisions, recommendations and communications as it represents a reliable, representative and consistent measurement of the industry and the Company and management’s performance.  We note that the price to earnings multiple commonly used by insurance investors as a forward-looking valuation technique uses operating income (loss) as the denominator.  Operating income (loss) should not be considered as a substitute for net income (loss) and does not reflect the overall profitability of our business.  A reconciliation of operating income (loss) to net income (loss) is provided in the schedule, “Contribution to Income”.

Underwriting income (loss) is calculated as premiums earned, less claims and claims expense (“losses”), amortization of DAC, operating costs and expenses and restructuring and related charges as determined using GAAP.  Management uses this measure in its evaluation of the results of operations to analyze the profitability of our Property-Liability insurance operations separately from investment results.  It is also an integral component of incentive compensation.  It is useful for investors to evaluate the components of income separately and in the aggregate when reviewing performance.   Net income (loss) is the most directly comparable GAAP measure.  Underwriting income (loss) should not be considered as a substitute for net income (loss) and does not reflect the overall profitability of our business.  A reconciliation of Property-Liability underwriting income (loss) to net income (loss) is provided in the schedule, “Property-Liability Results”.

Combined ratio excluding the effect of catastrophes is a non-GAAP ratio, which is computed as the difference between two GAAP operating ratios:  the combined ratio and the effect of catastrophes on the combined ratio.  The most directly comparable GAAP measure is the combined ratio. We believe that this ratio is useful to investors and it is used by management to reveal the trends in our Property-Liability business that may be obscured by catastrophe losses.  Catastrophe losses cause our loss trends to vary significantly between periods as a result of their incidence of occurrence and magnitude and can have a significant impact on the combined ratio.  We believe it is useful for investors to evaluate these components separately and in the aggregate when reviewing our underwriting performance.  The combined ratio excluding the effect of catastrophes should not be considered a substitute for the combined ratio and does not reflect the overall underwriting profitability of our business.  A reconciliation of combined ratio excluding the effect of catastrophes to combined ratio is provided in the schedule, “Property-Liability Results”.

Combined ratio excluding the effect of catastrophes, prior year reserve reestimates, business combination expenses and the amortization of purchased intangible assets (“underlying combined ratio”) is a non-GAAP ratio, which is computed as the difference between four GAAP operating ratios: the combined ratio, the effect of catastrophes on the combined ratio, the effect of prior year reserve reestimates on the combined ratio, the effect of business combination expenses and the amortization of purchased intangible assets on the combined ratio.   We believe that this ratio is useful to investors and it is used by management to reveal the trends in our Property-Liability business that may be obscured by catastrophe losses, prior year reserve reestimates, and business combination expenses and the amortization of purchased intangible assets. These catastrophe losses cause our loss trends to vary significantly between periods as a result of their incidence of occurrence and magnitude, and can have a significant impact on the combined ratio.  Prior year reserve reestimates are caused by  unexpected loss development on historical reserves.  Business combination expenses and the amortization of purchased intangible assets primarily relate to the acquisition purchase price and are not indicative of our underlying insurance business results or trends.  We believe it is useful for investors to evaluate these components separately and in the aggregate when reviewing our underwriting performance.  We also provide it to facilitate a comparison to our outlook on the underlying combined ratio. The most directly comparable GAAP measure is the combined ratio.  The underlying combined ratio should not be considered a substitute for the combined ratio and does not reflect the overall underwriting profitability of our business.  A reconciliation of the underlying combined ratio to combined ratio is provided in the schedules, “Property-Liability Results”, “Standard Auto Profitability Measures” and “Homeowners Profitability Measures”.

Operating income return on shareholders’ equity is a ratio that uses a non-GAAP measure. It is calculated by dividing the rolling 12-month operating income by the average of shareholders’ equity at the beginning and at the end of the 12-months, after excluding the effect of unrealized net capital gains and losses. Return on shareholders’ equity is the most directly comparable GAAP measure.  We use operating income as the numerator for the same reasons we use operating income, as discussed above.  We use average shareholders’ equity excluding the effect of unrealized net capital gains and losses for the denominator as a representation of shareholders’ equity primarily attributable to the Company’s earned and realized business operations because it eliminates the effect of items that are unrealized and vary significantly between periods due to external economic developments such as capital market conditions like changes in equity prices and interest rates, the amount and timing of which are unrelated to the insurance underwriting process.  We use it to supplement our evaluation of net income and return on shareholders’ equity because it excludes the effect of items that tend to be highly variable from period to period.  We believe that this measure is useful to investors and that it provides a valuable tool for investors when considered along with net income return on shareholders’ equity because it eliminates the after-tax effects of realized and unrealized net capital gains and losses that can fluctuate significantly from period to period and that are driven by economic developments, the magnitude and timing of which are generally not influenced by management.  In addition, it eliminates non-recurring items that are not indicative of our ongoing business or economic trends. A byproduct of excluding the items noted above to determine operating income return on shareholders’ equity from return on shareholders’ equity is the transparency and understanding of their significance to return on shareholders’ equity variability and profitability while recognizing these or similar items may recur in subsequent periods.  Therefore, we believe it is useful for investors to have operating income return on shareholders’ equity and return on shareholders’ equity when evaluating our performance.  We note that investors, financial analysts, financial and business media organizations and rating agencies utilize operating income return on shareholders’ equity results in their evaluation of our and our industry’s financial performance and in their investment decisions, recommendations and communications as it represents a reliable, representative and consistent measurement of the industry and the company and management’s utilization of capital.  Operating income return on shareholders’ equity should not be considered as a substitute for return on shareholders’ equity and does not reflect the overall profitability of our business.  A reconciliation of return on shareholders’ equity and operating income return on shareholders’ equity can be found in the schedule, “Return on Shareholders’ Equity”.

Book value per share, excluding the impact of unrealized net capital gains and losses on fixed income securities, is a ratio that uses a non-GAAP measure.  It is calculated by dividing shareholders’ equity after excluding the impact of unrealized net capital gains and losses on fixed income securities and related DAC, DSI and life insurance reserves by total shares outstanding plus dilutive potential shares outstanding.  We use the trend in book value per share, excluding the impact of unrealized net capital gains and losses on fixed income securities, in conjunction with book value per share to identify and analyze the change in net worth attributable to management efforts between periods.  We believe the non-GAAP ratio is useful to investors because it eliminates the effect of items that can fluctuate significantly from period to period and are generally driven by economic developments, primarily capital market conditions, the magnitude and timing of which are generally not influenced by management, and we believe it enhances understanding and comparability of performance by highlighting underlying business activity and profitability drivers.  We note that book value per share, excluding the impact of unrealized net capital gains and losses on fixed income securities, is a measure commonly used by insurance investors as a valuation technique.  Book value per share is the most directly comparable GAAP measure.  Book value per share, excluding the impact of unrealized net capital gains and losses on fixed income securities, should not be considered as a substitute for book value per share, and does not reflect the recorded net worth of our business.  A reconciliation of book value per share, excluding the impact of unrealized net capital gains on fixed income securities, and book value per share can be found in the schedule, “Book Value per Share”.

Operating Measure

We believe that investors’ understanding of Allstate’s performance is enhanced by our disclosure of the following operating financial measure.  Our method for calculating this measure may differ from those used by other companies and therefore comparability may be limited.

Premiums written is the amount of premiums charged for policies issued during a fiscal period.  Premiums earned is a GAAP measure.  Premiums are considered earned and are included in financial results on a pro-rata basis over the policy period.  The portion of premiums written applicable to the unexpired terms of the policies is recorded as unearned premiums on our Consolidated Statements of Financial Position.  A reconciliation of premiums written to premiums earned is presented in the schedule, “Property-Liability Results”.

Definitions of GAAP Operating Ratios and Impacts of Specific Items on the GAAP Operating Ratios

We use the following operating ratios to measure the profitability of our Property-Liability results.  We believe that they enhance an investor’s understanding of our profitability.  They are calculated as follows:

Claims and claims expense (“loss”) ratio is the ratio of claims and claims expense to premiums earned.  Loss ratios include the impact of catastrophe losses.

Expense ratio is the ratio of amortization of DAC, operating costs and expenses and restructuring and related charges to premiums earned.

Combined ratio is the ratio of claims and claims expense, amortization of DAC, operating costs and expenses and restructuring and related charges to premiums earned.  The combined ratio is the sum of the loss ratio and the expense ratio.  The difference between 100% and the combined ratio represents underwriting income (loss) as a percentage of premiums earned or underwriting margin.

Effect of Discontinued Lines and Coverages on combined ratio is the ratio of claims and claims expense and operating costs and expenses in the Discontinued Lines and Coverages segment to Property-Liability premiums earned.  The sum of the effect of Discontinued Lines and Coverages on the combined ratio and the Allstate Protection combined ratio is equal to the Property-Liability combined ratio.

Effect of catastrophe losses on combined ratio is the percentage of catastrophe losses included in claims and claims expense to premiums earned.  This ratio includes prior year reserve reestimates of catastrophe losses.

Effect of prior year reserve reestimates on combined ratio is the percentage of prior year reserve reestimates included in claims and claims expense to premiums earned.  This ratio includes prior year reserve reestimates of catastrophe losses.

Effect of pre-tax reserve reestimates on combined ratio is the percentage of prior year reserve reestimates included in claims and claims expense to premiums earned.  This ratio includes prior year reserve reestimates of catastrophe losses.

Effect of restructuring and related charges on combined ratio is the percentage of restructuring and related charges to premiums earned.

Effect of business combination expenses and the amortization of purchased intangible assets on the combined and expense ratio is the percentage of business combination expenses and the amortization of purchased intangible assets to premiums earned.

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