The Allstate Corporation (ALL) 8-K Results of Operations and Financial Condition

Exhibit 99.2

THE ALLSTATE CORPORATION

Investor Supplement

Fourth Quarter 2013

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”) are denoted with an asterisk (*) the first time they appear.  These measures are defined on the page “Definitions of Non-GAAP Measures” and are reconciled to the most directly comparable GAAP measure herein.

THE ALLSTATE CORPORATION

Investor Supplement - Fourth Quarter 2013

Table of Contents

	PAGE
Consolidated
Statements of Operations	1
Contribution to Income	2
Revenues	3
Statements of Financial Position	4
Book Value Per Common Share	5
Return on Common 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	11
Property-Liability Operations
Property-Liability Results	12
Historical Property-Liability Results	13
Underwriting Results by Area of Business	14
Historical Underwriting Results by Area of Business	15
Premiums Written by Brand	16
Impact of Net Rate Changes Approved on Premiums Written	17
Policies in Force and Other Statistics	18
Allstate Brand Profitability Measures	19
Allstate Brand Statistics	20
Encompass Brand Profitability Measures and Statistics	21
Esurance Brand Profitability Measures and Statistics	22
Auto Profitability Measures	23
Homeowners Profitability Measures	24
Other Personal Lines Profitability Measures	25
Homeowners Supplemental Information	26
Catastrophe Losses by Brand	27
Effect of Catastrophe Losses on the Combined Ratio	28
Catastrophe by Size of Event	29
Prior Year Reserve Reestimates	30
Historical Prior Year Reserve Reestimate	31
Historical Property-Liability Loss Reserves	32
Asbestos and Environmental Reserves	33
Allstate Personal Lines Profitability Measures	34
Business to Business - Encompass, Commercial and Other Business Lines Profitability Measures	35
Allstate Financial Operations
Allstate Financial Results	36
Historical Allstate Financial Results	37
Return on Attributed Equity	38
Premiums and Contract Charges	39
Change in Contractholder Funds	40
Analysis of Net Income	41
Allstate Financial Weighted Average Investment Spreads	42
Allstate Financial Supplemental Product Information	43
Allstate Financial Insurance Policies and Annuities in Force	44
Allstate Life and Retirement and Allstate Benefits Results and Product Information	45
Corporate and Other Results	46
Investments
Investments	47
Investment Portfolio Details	48
Limited Partnership Investments	49
Unrealized Net Capital Gains and Losses on Security Portfolio by Type	50
Net Investment Income, Yields and Realized Capital Gains and Losses (Pre-tax)	51
Property-Liability Net Investment Income, Yields and Realized Capital Gains and Losses (Pre-tax)	52
Allstate Financial Net Investment Income, Yields and Realized Capital Gains and Losses (Pre-tax)	53
Investment Results	54
Definitions of Non-GAAP Measures	55

THE ALLSTATE CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

($ in millions, except per share data)

		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,
		2013		2013		2013		2013		2012		2012		2012		2012		2013		2012
Revenues
Property-liability insurance premiums	$	7,014	$	6,972	$	6,862	$	6,770	$	6,744	$	6,697	$	6,666	$	6,630	$	27,618	$	26,737
Life and annuity premiums and contract charges		610		584		579		579		566		563		559		553		2,352		2,241
Net investment income		1,026		950		984		983		1,033		940		1,026		1,011		3,943		4,010
Realized capital gains and losses:
Total other-than-temporary impairment losses		(29)		(96)		(55)		(27)		(44)		(39)		(69)		(87)		(207)		(239)
Portion of loss recognized in other comprehensive income		(1)		8		(5)		(10)		(10)		(7)		19		4		(8)		6
Net other-than-temporary impairment losses recognized in earnings		(30)		(88)		(60)		(37)		(54)		(46)		(50)		(83)		(215)		(233)
Sales and other realized capital gains and losses		172		47		422		168		258		(26)		77		251		809		560
Total realized capital gains and losses		142		(41)		362		131		204		(72)		27		168		594		327
Total revenues		8,792		8,465		8,787		8,463		8,547		8,128		8,278		8,362		34,507		33,315
Costs and expenses
Property-liability insurance claims and claims expense		4,283		4,427		4,741		4,460		5,042		4,293		4,810		4,339		17,911		18,484
Life and annuity contract benefits		490		498		471		458		464		453		462		439		1,917		1,818
Interest credited to contractholder funds		305		317		311		345		357		215		366		378		1,278		1,316
Amortization of deferred policy acquisition costs		1,069		1,026		961		946		947		1,016		942		979		4,002		3,884
Operating costs and expenses		1,258		937		1,090		1,102		1,095		1,010		996		1,017		4,387		4,118
Restructuring and related charges		11		13		20		26		9		9		10		6		70		34
Loss on extinguishment of debt		2		9		480		-		-		-		-		-		491		-
Interest expense		87		83		99		98		92		93		93		95		367		373
Total costs and expenses		7,505		7,310		8,173		7,435		8,006		7,089		7,679		7,253		30,423		30,027
(Loss) gain on disposition of operations		(44)		(646)		-		2		3		9		3		3		(688)		18
Income from operations before income tax expense		1,243		509		614		1,030		544		1,048		602		1,112		3,396		3,306
Income tax expense		422		193		180		321		150		325		179		346		1,116		1,000
Net income	$	821	$	316	$	434	$	709	$	394	$	723	$	423	$	766	$	2,280	$	2,306
Preferred stock dividends		11		6		-		-		-		-		-		-		17		-
Net income available to common shareholders	$	810	$	310	$	434	$	709	$	394	$	723	$	423	$	766	$	2,263	$	2,306
Earnings per common share: (1)
Net income available to common shareholders per common share - Basic	$	1.79	$	0.67	$	0.93	$	1.49	$	0.82	$	1.49	$	0.86	$	1.54	$	4.87	$	4.71
Weighted average common shares - Basic		452.8		461.1		468.3		475.4		482.2		485.9		490.6		498.7		464.4		489.4
Net income available to common shareholders per common share - Diluted	$	1.76	$	0.66	$	0.92	$	1.47	$	0.81	$	1.48	$	0.86	$	1.53	$	4.81	$	4.68
Weighted average common shares - Diluted		459.6		467.1		473.8		480.8		487.0		489.9		493.8		501.5		470.3		493.0
Cash dividends declared per common share	$	0.25	$	0.25	$	0.25	$	0.25	$	0.22	$	0.22	$	0.22	$	0.22	$	1.00	$	0.88

(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.

1

THE ALLSTATE CORPORATION

CONTRIBUTION TO INCOME

($ in millions, except per share data)

		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,
		2013		2013		2013		2013		2012		2012		2012		2012		2013		2012
Contribution to income
Operating income before the impact of restructuring and related charges	$	789	$	721	$	542	$	664	$	295	$	723	$	438	$	714	$	2,716	$	2,170
Restructuring and related charges, after-tax		(8)		(8)		(13)		(17)		(6)		(6)		(6)		(4)		(46)		(22)
Operating income *		781		713		529		647		289		717		432		710		2,670		2,148
Realized capital gains and losses, after-tax		94		(28)		234		85		136		(47)		17		110		385		216
Valuation changes on embedded derivatives that are not hedged, after-tax		(3)		(10)		3		(6)		(6)		97		(3)		(6)		(16)		82
DAC and DSI amortization relating to realized capital gains and losses and valuation changes on embedded derivatives that are not hedged, after-tax		(3)		1		(4)		1		(4)		(28)		-		(10)		(5)		(42)
DAC and DSI unlocking relating to realized capital gains and losses, after-tax		-		7		-		-		-		4		-		-		7		4
Reclassification of periodic settlements and accruals on non-hedge derivative instruments, after-tax		1		-		(3)		(5)		(7)		(8)		(9)		(9)		(7)		(33)
Business combination expenses and the amortization of purchased intangible assets, after-tax		(15)		(13)		(13)		(14)		(16)		(18)		(16)		(31)		(55)		(81)
(Loss) gain on disposition of operations, after-tax		(44)		(472)		-		1		2		6		2		2		(515)		12
Loss on extinguishment of debt, after-tax		(1)		(6)		(312)		-		-		-		-		-		(319)		-
Postretirement benefits curtailment gain, after-tax		-		118		-		-		-		-		-		-		118		-
Net income available to common shareholders	$	810	$	310	$	434	$	709	$	394	$	723	$	423	$	766	$	2,263	$	2,306
Income per common share - Diluted (1)
Operating income before the impact of restructuring and related charges	$	1.72	$	1.54	$	1.14	$	1.38	$	0.61	$	1.48	$	0.89	$	1.42	$	5.78	$	4.40
Restructuring and related charges, after-tax		(0.02)		(0.01)		(0.02)		(0.03)		(0.02)		(0.02)		(0.02)		-		(0.10)		(0.04)
Operating income		1.70		1.53		1.12		1.35		0.59		1.46		0.87		1.42		5.68		4.36
Realized capital gains and losses, after-tax		0.21		(0.06)		0.50		0.18		0.28		(0.09)		0.04		0.22		0.82		0.44
Valuation changes on embedded derivatives that are not hedged, after-tax		(0.01)		(0.02)		0.01		(0.02)		(0.01)		0.20		(0.01)		(0.01)		(0.03)		0.17
DAC and DSI amortization relating to realized capital gains and losses and valuation changes on embedded derivatives that are not hedged, after-tax		(0.01)		-		(0.01)		-		(0.01)		(0.06)		-		(0.02)		(0.01)		(0.09)
DAC and DSI unlocking relating to realized capital gains and losses, after-tax		-		0.01		-		-		-		0.01		-		-		0.01		0.01
Reclassification of periodic settlements and accruals on non-hedge derivative instruments, after-tax		-		-		(0.01)		(0.01)		(0.01)		(0.01)		(0.02)		(0.02)		(0.01)		(0.07)
Business combination expenses and the amortization of purchased intangible assets, after-tax		(0.03)		(0.03)		(0.03)		(0.03)		(0.03)		(0.04)		(0.03)		(0.06)		(0.12)		(0.16)
(Loss) gain on disposition of operations, after-tax		(0.10)		(1.01)		-		-		-		0.01		0.01		-		(1.10)		0.02
Loss on extinguishment of debt, after-tax		-		(0.01)		(0.66)		-		-		-		-		-		(0.68)		-
Postretirement benefits curtailment gain, after-tax		-		0.25		-		-		-		-		-		-		0.25		-
Net income available to common shareholders	$	1.76	$	0.66	$	0.92	$	1.47	$	0.81	$	1.48	$	0.86	$	1.53	$	4.81	$	4.68
Weighted average common shares - Diluted		459.6		467.1		473.8		480.8		487.0		489.9		493.8		501.5		470.3		493.0

(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

THE ALLSTATE CORPORATION

REVENUES

($ 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,
		2013		2013		2013		2013		2012		2012		2012		2012		2013		2012
Property-Liability
Property-Liability insurance premiums	$	7,014	$	6,972	$	6,862	$	6,770	$	6,744	$	6,697	$	6,666	$	6,630	$	27,618	$	26,737
Net investment income		382		309		343		341		362		299		352		313		1,375		1,326
Realized capital gains and losses		128		(26)		305		112		143		(16)		19		189		519		335
Total Property-Liability revenues		7,524		7,255		7,510		7,223		7,249		6,980		7,037		7,132		29,512		28,398
Allstate Financial
Life and annuity premiums and contract charges		610		584		579		579		566		563		559		553		2,352		2,241
Net investment income		637		633		633		635		665		632		663		687		2,538		2,647
Realized capital gains and losses		14		(16)		57		19		56		(56)		8		(21)		74		(13)
Total Allstate Financial revenues		1,261		1,201		1,269		1,233		1,287		1,139		1,230		1,219		4,964		4,875
Corporate and Other
Service fees (1)		3		3		2		1		1		1		1		1		9		4
Net investment income		7		8		8		7		6		9		11		11		30		37
Realized capital gains and losses		-		1		-		-		5		-		-		-		1		5
Total Corporate and Other revenues before reclassification of services fees		10		12		10		8		12		10		12		12		40		46
Reclassification of service fees (1)		(3)		(3)		(2)		(1)		(1)		(1)		(1)		(1)		(9)		(4)
Total Corporate and Other revenues		7		9		8		7		11		9		11		11		31		42
Consolidated revenues	$	8,792	$	8,465	$	8,787	$	8,463	$	8,547	$	8,128	$	8,278	$	8,362	$	34,507	$	33,315

(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,
		2013		2013		2013		2013		2012			2013		2013		2013		2013		2012
Assets											Liabilities
Investments											Reserve for property-liability insurance
Fixed income securities, at fair value											claims and claims expense	$	21,857	$	20,983	$	20,989	$	20,920	$	21,288
(amortized cost $59,008, $58,129,											Reserve for life-contingent contract benefits		12,386		12,590		14,242		14,767		14,895
$68,475, $70,957 and $71,915)	$	60,910	$	60,295	$	71,039	$	75,806	$	77,017	Contractholder funds		24,304		24,476		36,357		38,807		39,319
Equity securities, at fair value											Unearned premiums		10,932		11,016		10,510		10,218		10,375
(cost $4,473, $4,370, $4,237,											Claim payments outstanding		631		702		745		757		797
$3,777 and $3,577)		5,097		4,812		4,505		4,439		4,037	Deferred income taxes		635		440		250		782		597
Mortgage loans		4,721		4,817		6,413		6,434		6,570	Other liabilities and accrued expenses		5,156		5,245		6,055		6,436		6,429
Limited partnership interests		4,967		5,091		4,941		4,931		4,922	Short-term debt		-		-		500		-		-
Short-term, at fair value											Long-term debt		6,201		6,217		5,475		6,556		6,057
(amortized cost $2,393, $2,694,											Separate Accounts		5,039		4,928		6,488		6,750		6,610
$2,646, $3,169 and $2,336)		2,393		2,694		2,646		3,169		2,336	Liabilities held for sale		14,899		14,908		-		-		-
Other		3,067		2,774		2,771		2,603		2,396	Total liabilities		102,040		101,505		101,611		105,993		106,367
Total investments		81,155		80,483		92,315		97,382		97,278
											Equity
											Preferred stock and additional capital paid-in 32.3 thousand, 26.9 thousand and 11.5 thousand outstanding as of December 31 2013, September 30, 2013, June 30, 2013 and none outstanding as of all other periods presented		780		650		278		-		-
											Common stock, 449 million, 456 million, 465 million, 468 million and 479 million shares outstanding		9		9		9		9		9
											Additional capital paid-in		3,143		3,127		3,105		3,028		3,162
											Retained income		35,580		34,885		34,691		34,375		33,783
											Deferred ESOP expense		(31)		(39)		(39)		(39)		(41)
											Treasury stock, at cost (451 million, 444 million, 435 million, 432 million and 421 million)		(19,047)		(18,662)		(18,225)		(18,033)		(17,508)
											Accumulated other comprehensive income:
											Unrealized net capital gains and losses:
											Unrealized net capital gains and losses on fixed income securities with other-than-temporary impairments		50		33		36		30		(11)
Cash		675		1,069		634		820		806	Other unrealized net capital gains and losses		1,698		1,804		1,794		3,543		3,614
Premium installment receivables, net		5,237		5,341		5,116		5,066		5,051	Unrealized adjustment to DAC, DSI and insurance reserves		(102)		(123)		(179)		(668)		(769)
Deferred policy acquisition costs		3,372		3,286		3,914		3,660		3,621	Total unrealized net capital gains and losses		1,646		1,714		1,651		2,905		2,834
Reinsurance recoverables, net (1)		7,621		6,938		8,346		8,316		8,767	Unrealized foreign currency translation
Accrued investment income		624		617		773		792		781	adjustments		38		50		37		58		70
Property and equipment, net		1,024		993		971		998		989	Unrecognized pension and other
Goodwill		1,243		1,243		1,239		1,239		1,240	postretirement benefit cost		(638)		(954)		(1,638)		(1,684)		(1,729)
Other assets		1,937		1,810		1,684		1,589		1,804	Total accumulated other comprehensive
Separate Accounts		5,039		4,928		6,488		6,750		6,610	income		1,046		810		50		1,279		1,175
Assets held for sale		15,593		15,577		-		-		-	Total shareholders’ equity		21,480		20,780		19,869		20,619		20,580
											Total liabilities and shareholders’ equity	$	123,520	$	122,285	$	121,480	$	126,612	$	126,947
Total assets	$	123,520	$	122,285	$	121,480	$	126,612	$	126,947

(1)Reinsurance recoverables of unpaid losses related to Property-Liability were $4,664 million, $3,652 million, $3,613 million, $3,568 million and $4,010 million as of December 31, 2013, September 30, 2013, June 30, 2013, March 31, 2013 and December 31, 2012, respectively.

4

THE ALLSTATE CORPORATION

BOOK VALUE PER COMMON SHARE

($ in millions, except per share data )

		Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,		Sept. 30,		June 30,		March 31,
		2013		2013		2013		2013		2012		2012		2012		2012
Book value per common share
Numerator:
Common shareholders’ equity (1)	$	20,700	$	20,130	$	19,591	$	20,619	$	20,580	$	20,837	$	19,475	$	19,182
Denominator:
Common shares outstanding and dilutive potential common shares outstanding		456.9		462.9		470.6		474.4		485.5		488.7		490.2		497.3
Book value per common share	$	45.31	$	43.49	$	41.63	$	43.46	$	42.39	$	42.64	$	39.73	$	38.57
Book value per common share, excluding the impact of unrealized net capital gains and losses on fixed income securities *
Numerator:
Common shareholders’ equity	$	20,700	$	20,130	$	19,591	$	20,619	$	20,580	$	20,837	$	19,475	$	19,182
Unrealized net capital gains and losses on fixed income securities		1,258		1,445		1,489		2,486		2,549		2,602		1,919		1,620
Adjusted common shareholders’ equity	$	19,442	$	18,685	$	18,102	$	18,133	$	18,031	$	18,235	$	17,556	$	17,562
Denominator:
Common shares outstanding and dilutive potential common shares outstanding		456.9		462.9		470.6		474.4		485.5		488.7		490.2		497.3
Book value per common share, excluding the impact of unrealized net capital gains and losses on fixed income securities	$	42.55	$	40.37	$	38.47	$	38.22	$	37.14	$	37.31	$	35.81	$	35.31

(1)   Excludes equity related to preferred stock of $780 million, $650 million and $278 million as of December 31, 2013, September 30, 2013 and June 30, 2013, respectively.

5

THE ALLSTATE CORPORATION

RETURN ON COMMON SHAREHOLDERS’ EQUITY

($ in millions)

	Twelve months ended
		Dec. 31,			Sept. 30,			June 30,			March 31,			Dec. 31,			Sept. 30,			June 30,			March 31,
		2013			2013			2013			2013			2012			2012			2012			2012
Return on Common Shareholders’ Equity
Numerator:
Net income available to common shareholders (1)	$	2,263		$	1,847		$	2,260		$	2,249		$	2,306		$	2,624		$	2,076		$	1,029
Denominator:
Beginning common shareholders’ equity	$	20,580		$	20,837		$	19,475		$	19,182		$	18,298		$	17,732		$	18,382		$	18,898
Ending common shareholders’ equity		20,700			20,130			19,591			20,619			20,580			20,837			19,475			19,182
Average common shareholders’ equity (2)	$	20,640		$	20,484		$	19,533		$	19,901		$	19,439		$	19,285		$	18,929		$	19,040
Return on common shareholders’ equity		11.0	%		9.0	%		11.6	%		11.3	%		11.9	%		13.6	%		11.0	%		5.4	%
Operating Income Return on Common Shareholders’ Equity *
Numerator:
Operating income (1)	$	2,670		$	2,178		$	2,182		$	2,085		$	2,148		$	2,594		$	1,957		$	878
Denominator:
Beginning common shareholders’ equity	$	20,580		$	20,837		$	19,475		$	19,182		$	18,298		$	17,732		$	18,382		$	18,898
Unrealized net capital gains and losses		2,834			2,880			2,070			1,874			1,400			1,065			1,475			1,072
Adjusted beginning common shareholders’ equity		17,746			17,957			17,405			17,308			16,898			16,667			16,907			17,826
Ending common shareholders’ equity		20,700			20,130			19,591			20,619			20,580			20,837			19,475			19,182
Unrealized net capital gains and losses		1,646			1,714			1,651			2,905			2,834			2,880			2,070			1,874
Adjusted ending common shareholders’ equity		19,054			18,416			17,940			17,714			17,746			17,957			17,405			17,308
Average adjusted common shareholders’ equity (2)	$	18,400		$	18,187		$	17,673		$	17,511		$	17,322		$	17,312		$	17,156		$	17,567
Operating income return on common shareholders’ equity		14.5	%		12.0	%		12.3	%		11.9	%		12.4	%		15.0	%		11.4	%		5.0	%

(1)Net income available to common shareholders and operating income reflect a trailing twelve-month period.

(2)Average common shareholders’ equity and average adjusted common shareholders’ equity are determined using a two-point average, with the beginning and ending common shareholders’ equity and adjusted common 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,
		2013			2013			2013			2013			2012			2012			2012			2012
Debt
Short-term debt	$	-		$	-		$	500		$	-		$	-		$	-		$	-		$	-
Long-term debt		6,201			6,217			5,475			6,556			6,057			6,057			6,058			6,058
Total debt	$	6,201		$	6,217		$	5,975		$	6,556		$	6,057		$	6,057		$	6,058		$	6,058
Capital resources
Debt	$	6,201		$	6,217		$	5,975		$	6,556		$	6,057		$	6,057		$	6,058		$	6,058
Shareholders’ equity
Preferred stock and additional capital paid-in		780			650			278			-			-			-			-			-
Common stock		9			9			9			9			9			9			9			9
Additional capital paid-in		3,143			3,127			3,105			3,028			3,162			3,154			3,154			3,151
Retained income		35,580			34,885			34,691			34,375			33,783			33,496			32,880			32,565
Deferred ESOP expense		(31)			(39)			(39)			(39)			(41)			(41)			(41)			(41)
Treasury stock		(19,047)			(18,662)			(18,225)			(18,033)			(17,508)			(17,368)			(17,272)			(17,034)
Unrealized net capital gains and losses		1,646			1,714			1,651			2,905			2,834			2,880			2,070			1,874
Unrealized foreign currency translation adjustments		38			50			37			58			70			70			58			65
Unrecognized pension and other postretirement benefit cost		(638)			(954)			(1,638)			(1,684)			(1,729)			(1,363)			(1,383)			(1,407)
Total shareholders’ equity		21,480			20,780			19,869			20,619			20,580			20,837			19,475			19,182
Total capital resources	$	27,681		$	26,997		$	25,844		$	27,175		$	26,637		$	26,894		$	25,533		$	25,240
Ratio of debt to shareholders’ equity		28.9	%		29.9	%		30.1	%		31.8	%		29.4	%		29.1	%		31.1	%		31.6	%
Ratio of debt to capital resources		22.4	%		23.0	%		23.1	%		24.1	%		22.7	%		22.5	%		23.7	%		24.0	%

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,
		2013		2013		2013		2013		2012		2012		2012		2012		2013		2012
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	821	$	316	$	434	$	709	$	394	$	723	$	423	$	766	$	2,280	$	2,306
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and other non-cash items		122		66		93		87		95		92		105		96		368		388
Realized capital gains and losses		(142)		41		(362)		(131)		(204)		72		(27)		(168)		(594)		(327)
Loss on extinguishment of debt		2		9		480		-		-		-		-		-		491		-
Loss (gain) on disposition of operations		44		646		-		(2)		(3)		(9)		(3)		(3)		688		(18)
Interest credited to contractholder funds		305		317		311		345		357		215		366		378		1,278		1,316
Changes in:
Policy benefits and other insurance reserves		732		(180)		(93)		(514)		983		(392)		(31)		(346)		(55)		214
Unearned premiums		(68)		505		311		(146)		(115)		394		207		(180)		602		306
Deferred policy acquisition costs		(60)		(101)		(77)		(30)		(31)		7		(46)		52		(268)		(18)
Premium installment receivables, net		95		(219)		(59)		(22)		53		(169)		(28)		19		(205)		(125)
Reinsurance recoverables, net		(1,023)		(33)		(79)		406		(1,421)		(166)		(30)		57		(729)		(1,560)
Income taxes		118		172		6		277		29		328		8		333		573		698
Other operating assets and liabilities		225		(21)		(152)		(239)		299		(251)		23		(197)		(187)		(126)
Net cash provided by operating activities		1,171		1,518		813		740		436		844		967		807		4,242		3,054
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sales
Fixed income securities		5,889		4,893		4,987		5,474		4,920		4,034		4,229		5,689		21,243		18,872
Equity securities		942		489		1,532		210		150		70		216		1,059		3,173		1,495
Limited partnership interests		369		238		278		160		331		271		393		403		1,045		1,398
Mortgage loans		4		-		18		2		3		-		5		6		24		14
Other investments		58		55		23		15		44		16		52		36		151		148
Investment collections
Fixed income securities		1,029		1,221		1,913		1,745		1,525		1,751		1,175		966		5,908		5,417
Mortgage loans		237		308		238		237		382		224		288		170		1,020		1,064
Other investments		62		42		117		54		58		31		16		23		275		128
Investment purchases
Fixed income securities		(7,442)		(6,008)		(4,553)		(6,084)		(5,849)		(4,464)		(5,337)		(7,008)		(24,087)		(22,658)
Equity securities		(1,112)		(555)		(1,693)		(317)		(286)		(95)		(162)		(128)		(3,677)		(671)
Limited partnership interests		(401)		(434)		(222)		(255)		(292)		(568)		(346)		(318)		(1,312)		(1,524)
Mortgage loans		(115)		(109)		(239)		(75)		(53)		(205)		(51)		(216)		(538)		(525)
Other investments		(204)		(342)		(342)		(196)		(390)		(32)		(80)		(163)		(1,084)		(665)
Change in short-term investments, net		117		(121)		385		(808)		586		(892)		(13)		(379)		(427)		(698)
Change in other investments, net		5		1		57		34		64		51		(48)		(9)		97		58
Purchases of property and equipment, net		(91)		(73)		17		(60)		(109)		(60)		(65)		(51)		(207)		(285)
(Acquisition) disposition of operations		-		(24)		-		-		-		13		1		(1)		(24)		13
Net cash (used in) provided by investing activities		(653)		(419)		2,516		136		1,084		145		273		79		1,580		1,581
CASH FLOWS FROM FINANCING ACTIVITIES
Change in short-term debt		-		(500)		500		-		-		-		-		-		-		-
Proceeds from issuance of long-term debt		4		786		989		492		-		-		-		493		2,271		493
Repayment of long-term debt		(22)		(65)		(2,540)		-		(1)		-		(1)		(350)		(2,627)		(352)
Proceeds from issuance of preferred stock		130		373		278		-		-		-		-		-		781		-
Contractholder fund deposits		566		489		528		591		587		566		520		485		2,174		2,158
Contractholder fund withdrawals		(1,098)		(1,185)		(3,014)		(1,259)		(1,581)		(1,273)		(1,366)		(1,299)		(6,556)		(5,519)
Dividends paid on common stock		(115)		(118)		(119)		-		(212)		(107)		(109)		(106)		(352)		(534)
Dividends paid on preferred stock		(6)		-		-		-		-		-		-		-		(6)		-
Treasury stock purchases		(449)		(488)		(158)		(739)		(184)		(146)		(274)		(309)		(1,834)		(913)
Shares reissued under equity incentive plans, net		62		48		43		17		25		34		11		15		170		85
Excess tax benefits on share-based payment arrangements		5		4		6		23		3		3		5		(1)		38		10
Other		(2)		5		(28)		13		7		5		(32)		(13)		(12)		(33)
Net cash used in financing activities		(925)		(651)		(3,515)		(862)		(1,356)		(918)		(1,246)		(1,085)		(5,953)		(4,605)
Transfer of cash from (to) held for sale		13		(13)		-		-		-		-		-		-		-		-
NET (DECREASE) INCREASE IN CASH		(394)		435		(186)		14		164		71		(6)		(199)		(131)		30
CASH AT BEGINNING OF PERIOD		1,069		634		820		806		642		571		577		776		806		776
CASH AT END OF PERIOD	$	675	$	1,069	$	634	$	820	$	806	$	642	$	571	$	577	$	675	$	806

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, 2013
								Amortization
								relating to realized
								capital gains and		Amortization
								losses and		(acceleration)		Effect of
		Beginning		Acquisition		Amortization		valuation changes on		deceleration		unrealized		DAC		Ending
		balance		costs		before		embedded derivatives		for the changes		capital gains		classified as		balance
		Sept. 30, 2013		deferred		adjustments (1) (2)		that are not hedged (2)		in assumptions(2)		and losses		held for sale		Dec 31, 2013
Property-Liability	$	1,577	$	1,032	$	(984)	$	-	$	-	$	-	$	-	$	1,625
Allstate Financial:
Traditional life and accident and health		695		46		(29)		-		-		-		(1)		711
Interest-sensitive life		974		43		(49)		(4)		-		27		-		991
Fixed annuity		40		7		(2)		(1)		-		2		(1)		45
Subtotal		1,709		96		(80)		(5)		-		29		(2)		1,747
Consolidated	$	3,286	$	1,128	$	(1,064)	$	(5)	$	-	$	29	$	(2)	$	3,372
	Change in Deferred Policy Acquisition Costs For the three months ended December 31, 2012
								Amortization
								relating to realized
								capital gains and		Amortization
								losses and		(acceleration)		Effect of
		Beginning		Acquisition		Amortization		valuation changes on		deceleration		unrealized		DAC		Ending
		balance		costs		before		embedded derivatives		for the changes		capital gains		classified as		balance
		Sept. 30, 2012		deferred		adjustments (1) (2)		that are not hedged (2)		in assumptions(2)		and losses		held for sale		Dec 31, 2012
Property-Liability	$	1,400	$	866	$	(870)	$	-	$	-	$	-	$	-	$	1,396
Allstate Financial:
Traditional life and accident and health		654		44		(27)		-		-		-		-		671
Interest-sensitive life		1,504		59		(41)		(6)		-		13		-		1,529
Fixed annuity		20		7		(3)		-		-		1		-		25
Subtotal		2,178		110		(71)		(6)		-		14		-		2,225
Consolidated	$	3,578	$	976	$	(941)	$	(6)	$	-	$	14	$	-	$	3,621

(1)Amortization before adjustments reflects total DAC amortization before amortization/accretion related to realized capital gains and losses and valuation changes on embedded derivatives that are not hedged and amortization acceleration/deceleration for changes in assumptions.

(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																	Reconciliation of Deferred Policy
	For the twelve months ended December 31, 2013																	Acquisition Costs as of December 31, 2013
								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		DAC		Ending		unrealized		unrealized		unrealized
		balance		costs		before		embedded derivatives		for changes in		capital gains		classified as		balance		capital gains		capital gains		capital gains
		Dec. 31, 2012		deferred		adjustments (1) (2)		that are not hedged (2)		assumptions (2)		and losses		held for sale		Dec. 31, 2013		and losses		and losses		and losses
Property-Liability	$	1,396	$	3,903	$	(3,674)	$	-	$	-	$	-	$	-	$	1,625	$	1,625	$	-	$	1,625
Allstate Financial:
Traditional life and accident and health		671		164		(111)		-		-		-		(13)		711		711		-		711
Interest-sensitive life		1,529		176		(174)		(6)		(35)		201		(700)		991		1,084		(93)		991
Fixed annuity		25		24		(13)		(1)		12		28		(30)		45		51		(6)		45
Subtotal		2,225		364		(298)		(7)		(23)		229		(743)		1,747		1,846		(99)		1,747
Consolidated	$	3,621	$	4,267	$	(3,972)	$	(7)	$	(23)	$	229	$	(743)	$	3,372	$	3,471	$	(99)	$	3,372

	Change in Deferred Policy Acquisition Costs																	Reconciliation of Deferred Policy
	For the twelve months ended December 31, 2012																	Acquisition Costs as of December 31, 2012
								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		DAC		Ending		unrealized		unrealized		unrealized
		balance		costs		before		embedded derivatives		for changes in		capital gains		classified as		balance		capital gains		capital gains		capital gains
		Dec. 31, 2011		deferred		adjustments (1) (2)		that are not hedged (2)		assumptions (2)		and losses		held for sale		Dec. 31, 2012		and losses		and losses		and losses
Property-Liability	$	1,348	$	3,531	$	(3,483)	$	-	$	-	$	-	$	-	$	1,396	$	1,396	$	-	$	1,396
Allstate Financial:
Traditional life and accident and health		616		154		(99)		-		-		-		-		671		671		-		671
Interest-sensitive life		1,698		192		(186)		(18)		(30)		(127)		-		1,529		1,875		(346)		1,529
Fixed annuity		209		25		(25)		(39)		(4)		(141)		-		25		59		(34)		25
Subtotal		2,523		371		(310)		(57)		(34)		(268)		-		2,225		2,605		(380)		2,225
Consolidated	$	3,871	$	3,902	$	(3,793)	$	(57)	$	(34)	$	(268)	$	-	$	3,621	$	4,001	$	(380)	$	3,621

(1)     Amortization before adjustments reflects total DAC amortization before amortization/accretion related to realized capital gains and losses and valuation changes on embedded derivatives that are not hedged and amortization acceleration/deceleration for changes in assumptions.

(2)     Included as a component of amortization of DAC on the Consolidated Statements of Operations.

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,
		2013		2012		2011		2010		2009
Consolidated statement of operations data:
Insurance premiums and contract charges	$	29,970	$	28,978	$	28,180	$	28,125	$	28,152
Net investment income		3,943		4,010		3,971		4,102		4,444
Realized capital gains and losses		594		327		503		(827)		(583)
Total revenues	$	34,507	$	33,315	$	32,654	$	31,400	$	32,013
Operating income	$	2,670	$	2,148	$	662	$	1,506	$	1,880
Realized capital gains and losses, after-tax		385		216		324		(537)		(628)
Valuation changes on embedded derivatives that are not hedged, after-tax		(16)		82		(12)		-		-
DAC and DSI amortization relating to realized capital gains and losses and valuation changes on embedded derivatives that are not hedged, after-tax		(5)		(42)		(108)		(29)		(153)
DAC and DSI unlocking relating to realized capital gains and losses, after-tax		7		4		3		(12)		(219)
Reclassification of periodic settlements and accruals on non-hedge derivative instruments, after-tax		(7)		(33)		(35)		(29)		(2)
Business combination expenses and the amortization of purchased intangible assets, after-tax		(55)		(81)		(42)		-		-
(Loss) gain on disposition of operations, after-tax		(515)		12		(5)		12		10
Loss on extinguishment of debt, after-tax		(319)		-		-		-		-
Postretirement benefits curtalment gain, after-tax		118		-		-		-		-
Net income available to common shareholders	$	2,263	$	2,306	$	787	$	911	$	888
Income per common share - Diluted
Operating income	$	5.68	$	4.36	$	1.27	$	2.78	$	3.48
Realized capital gains and losses, after-tax		0.82		0.44		0.62		(0.99)		(1.16)
Valuation changes on embedded derivatives that are not hedged, after-tax		(0.03)		0.17		(0.02)		-		-
DAC and DSI amortization relating to realized capital gains and losses and valuation changes on embedded derivatives that are not hedged, after-tax		(0.01)		(0.09)		(0.21)		(0.05)		(0.29)
DAC and DSI unlocking relating to realized capital gains and losses, after-tax		0.01		0.01		-		(0.02)		(0.41)
Reclassification of periodic settlements and accruals on non-hedge derivative instruments, after-tax		(0.01)		(0.07)		(0.07)		(0.06)		-
Business combination expenses and the amortization of purchased intangible assets, after-tax		(0.12)		(0.16)		(0.08)		-		-
(Loss) gain on disposition of operations, after-tax		(1.10)		0.02		(0.01)		0.02		0.02
Loss on extinguishment of debt, after-tax		(0.68)		-		-		-		-
Postretirement benefits curtalment gain, after-tax		0.25		-		-		-		-
Net income available to common shareholders	$	4.81	$	4.68	$	1.50	$	1.68	$	1.64
Net income available to common sharelolders per share - Basic	$	4.87	$	4.71	$	1.51	$	1.69	$	1.65
Consolidated statement of financial position data:
Investments	$	81,155	$	97,278	$	95,618	$	100,483	$	99,833
Total assets		123,520		126,947		125,193		130,500		132,209
Reserves for claims and claims expense, life-contingent contract benefits and contractholder funds		58,547		75,502		77,113		81,113		84,659
Debt		6,201		6,057		5,908		5,908		5,910
Shareholders’ equity		21,480		20,580		18,298		18,617		16,184
Book value per share		45.31		42.39		36.18		34.58		29.90
Operating ratio:
Annual statutory premiums written to surplus ratio (U.S. property-liability operations)		1.6x		1.6x		1.6x		1.6x		1.7x
Other operating data:
Total employees (1)		39,400		38,500		37,300		35,200		36,000
Total Allstate agencies (1)(2)		11,600		11,200		11,900		13,400		14,200

(1)Rounded to the nearest hundred.

(2)Total Allstate agencies represents exclusive Allstate agencies and financial representatives in the United States and Canada.

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,
		2013		2013		2013		2013		2012		2012		2012		2012		2013		2012
Premiums written	$	6,950	$	7,438	$	7,151	$	6,625	$	6,637	$	7,063	$	6,864	$	6,463	$	28,164	$	27,027
Increase (decrease) in unearned premiums		84		(518)		(293)		155		120		(411)		(198)		167		(572)		(322)
Other		(20)		52		4		(10)		(13)		45		-		-		26		32
Premiums earned		7,014		6,972		6,862		6,770		6,744		6,697		6,666		6,630		27,618		26,737
Claims and claims expense		(4,283)		(4,427)		(4,741)		(4,460)		(5,042)		(4,293)		(4,810)		(4,339)		(17,911)		(18,484)
Amortization of deferred policy acquisition costs		(984)		(929)		(890)		(871)		(870)		(870)		(865)		(878)		(3,674)		(3,483)
Operating costs and expenses		(942)		(910)		(943)		(957)		(939)		(866)		(847)		(884)		(3,752)		(3,536)
Restructuring and related charges		(11)		(9)		(19)		(24)		(9)		(9)		(10)		(6)		(63)		(34)
Underwriting income (loss) *		794		697		269		458		(116)		659		134		523		2,218		1,200
Net investment income		382		309		343		341		362		299		352		313		1,375		1,326
Periodic settlements and accruals on non-hedge derivative instruments		(2)		(2)		(2)		(1)		(2)		(1)		(2)		(1)		(7)		(6)
Business combination expenses and the amortization of purchased intangible assets		23		21		20		21		25		26		26		47		85		124
Income tax expense on operations		(404)		(340)		(197)		(263)		(69)		(316)		(153)		(281)		(1,204)		(819)
Operating income		793		685		433		556		200		667		357		601		2,467		1,825
Realized capital gains and losses, after-tax		86		(17)		197		73		96		(11)		12		124		339		221
Reclassification of periodic settlements and accruals on non-hedge derivative instruments, after-tax		1		1		1		1		-		1		1		1		4		3
Business combination expenses and the amortization of purchased intangible assets, after-tax		(15)		(13)		(13)		(14)		(16)		(18)		(16)		(31)		(55)		(81)
Loss on disposition of operations, after-tax		-		-		(1)		-		-		-		-		-		(1)		-
Net income available to common shareholders	$	865	$	656	$	617	$	616	$	280	$	639	$	354	$	695	$	2,754	$	1,968
Catastrophe losses	$	117	$	128	$	647	$	359	$	1,061	$	206	$	819	$	259	$	1,251	$	2,345
Operating ratios
Claims and claims expense (“loss”) ratio		61.1		63.5		69.1		65.9		74.8		64.1		72.2		65.4		64.9		69.1
Expense ratio		27.6		26.5		27.0		27.3		26.9		26.1		25.8		26.7		27.1		26.4
Combined ratio		88.7		90.0		96.1		93.2		101.7		90.2		98.0		92.1		92.0		95.5
Combined ratio excluding the effect of catastrophes *		87.0		88.2		86.7		87.9		86.0		87.1		85.7		88.2		87.5		86.7
Effect of catastrophe losses on combined ratio		1.7		1.8		9.4		5.3		15.7		3.1		12.3		3.9		4.5		8.8
Combined ratio		88.7		90.0		96.1		93.2		101.7		90.2		98.0		92.1		92.0		95.5
Combined ratio excluding the effect of catastrophes, prior year reserve reestimates, business combination expenses and the amortization of purchased intangible assets (“underlying”)		87.5		86.9		86.9		87.7		86.7		87.8		86.3		88.1		87.3		87.2
Effect of catastrophe losses on combined ratio		1.7		1.8		9.4		5.3		15.7		3.1		12.3		3.9		4.5		8.8
Effect of prior year reserve reestimates on combined ratio		(0.9)		0.5		(0.8)		(0.6)		(2.3)		(2.2)		(2.4)		(3.1)		(0.4)		(2.5)
Effect of catastrophe losses included in prior year reserve reestimates on combined ratio		0.1		0.5		0.3		0.5		1.2		1.1		1.4		2.5		0.3		1.5
Effect of business combination expenses and the amortization of purchased intangible assets on combined ratio		0.3		0.3		0.3		0.3		0.4		0.4		0.4		0.7		0.3		0.5
Combined ratio		88.7		90.0		96.1		93.2		101.7		90.2		98.0		92.1		92.0		95.5
Effect of restructuring and related charges on combined ratio		0.2		0.1		0.3		0.4		0.1		0.1		0.2		0.1		0.2		0.1
Effect of Discontinued Lines and Coverages on combined ratio		-		1.9		0.1		-		-		0.7		0.1		-		0.5		0.2

12

THE ALLSTATE CORPORATION

HISTORICAL PROPERTY-LIABILITY RESULTS

($ in millions)

		Twelve months ended December 31,
		2013		2012		2011		2010		2009
Premiums written	$	28,164	$	27,027	$	25,980	$	25,907	$	25,971
(Increase) decrease in unearned premium		(572)		(322)		(33)		19		200
Other		26		32		(5)		31		23
Premiums earned		27,618		26,737		25,942		25,957		26,194
Claims and claims expense		(17,911)		(18,484)		(20,161)		(18,951)		(18,746)
Amortization of deferred policy acquisition costs		(3,674)		(3,483)		(3,477)		(3,517)		(3,615)
Operating costs and expenses		(3,752)		(3,536)		(3,143)		(2,962)		(2,728)
Restructuring and related charges		(63)		(34)		(43)		(33)		(105)
Underwriting income (loss)		2,218		1,200		(882)		494		1,000
Net investment income		1,375		1,326		1,201		1,189		1,328
Periodic settlement and accruals on non-hedge derivative instruments		(7)		(6)		(15)		(7)		(10)
Business combination expenses and the amortization of purchased intangible assets		85		124		49		-		-
Income tax (expense) benefit on operations		(1,204)		(819)		18		(423)		(557)
Operating income		2,467		1,825		371		1,253		1,761
Realized capital gains and losses, after-tax		339		221		54		(207)		(222)
Reclassification of periodic settlements and accruals on non-hedge derivative instruments, after-tax		4		3		10		4		7
Business combination expenses and the amortization of purchased intangible assets, after-tax		(55)		(81)		(32)		-		-
(Loss) gain on disposition of operations, after-tax		(1)		-		-		3		-
Net income	$	2,754	$	1,968	$	403	$	1,053	$	1,546
Catastrophe losses	$	1,251	$	2,345	$	3,815	$	2,207	$	2,069
Operating ratios
Loss ratio		64.9		69.1		77.7		73.0		71.6
Expense ratio		27.1		26.4		25.7		25.1		24.6
Combined ratio		92.0		95.5		103.4		98.1		96.2
Combined ratio excluding the effect of catastrophes		87.5		86.7		88.7		89.6		88.3
Effect of catastrophe losses on combined ratio		4.5		8.8		14.7		8.5		7.9
Combined ratio		92.0		95.5		103.4		98.1		96.2
Combined ratio excluding the effect of catastrophes, prior year reserve reestimates, business combination expenses and the amortization of purchased intangible assets (“underlying”)		87.3		87.2		89.3		89.6		88.1
Effect of catastrophe losses on combined ratio		4.5		8.8		14.7		8.5		7.9
Effect of prior year reserve reestimates on combined ratio		(0.4)		(2.5)		(1.3)		(0.6)		(0.4)
Effect of catastrophe losses included in prior year reserve reestimate on combined ratio		0.3		1.5		0.5		0.6		0.6
Effect of business combination expenses and the amortization of purchased intangible assets on combined ratio		0.3		0.5		0.2		-		-
Combined ratio		92.0		95.5		103.4		98.1		96.2
Effect of restructuring and related charges on combined ratio		0.2		0.1		0.2		0.1		0.4
Effect of Discontinued Lines and Coverages on the combined ratio		0.5		0.2		0.1		0.1		0.1

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,
		2013		2013		2013		2013		2012		2012		2012		2012		2013		2012
Property-Liability Underwriting Summary
Allstate Protection	$	795	$	831	$	273	$	462	$	(112)	$	701	$	138	$	526	$	2,361	$	1,253
Discontinued Lines and Coverages		(1)		(134)		(4)		(4)		(4)		(42)		(4)		(3)		(143)		(53)
Underwriting income (loss)	$	794	$	697	$	269	$	458	$	(116)	$	659	$	134	$	523	$	2,218	$	1,200
Allstate Protection Underwriting Summary
Premiums written	$	6,950	$	7,438	$	7,151	$	6,625	$	6,636	$	7,064	$	6,864	$	6,462	$	28,164	$	27,026
Premiums earned	$	7,014	$	6,972	$	6,862	$	6,770	$	6,745	$	6,696	$	6,666	$	6,630	$	27,618	$	26,737
Claims and claims expense		(4,282)		(4,292)		(4,738)		(4,457)		(5,038)		(4,251)		(4,808)		(4,336)		(17,769)		(18,433)
Amortization of deferred policy acquisition costs		(984)		(929)		(890)		(871)		(870)		(870)		(865)		(878)		(3,674)		(3,483)
Operating costs and expenses		(942)		(911)		(942)		(956)		(940)		(865)		(845)		(884)		(3,751)		(3,534)
Restructuring and related charges		(11)		(9)		(19)		(24)		(9)		(9)		(10)		(6)		(63)		(34)
Underwriting income (loss)	$	795	$	831	$	273	$	462	$	(112)	$	701	$	138	$	526	$	2,361	$	1,253
Catastrophe losses	$	117	$	128	$	647	$	359	$	1,061	$	206	$	819	$	259	$	1,251	$	2,345
Operating ratios
Loss ratio		61.1		61.6		69.0		65.9		74.7		63.5		72.1		65.4		64.4		68.9
Expense ratio		27.6		26.5		27.0		27.3		27.0		26.0		25.8		26.7		27.1		26.4
Combined ratio		88.7		88.1		96.0		93.2		101.7		89.5		97.9		92.1		91.5		95.3
Effect of catastrophe losses on combined ratio		1.7		1.8		9.4		5.3		15.7		3.1		12.3		3.9		4.5		8.8
Effect of restructuring and related charges on combined ratio		0.2		0.1		0.3		0.4		0.1		0.1		0.2		0.1		0.2		0.1
Effect of business combination expenses and the amortization of purchased intangible assets on combined ratio		0.3		0.3		0.3		0.3		0.4		0.4		0.4		0.7		0.3		0.5
Discontinued Lines and Coverages
Underwriting Summary
Premiums written	$	-	$	-	$	-	$	-	$	1	$	(1)	$	-	$	1	$	-	$	1
Premiums earned	$	-	$	-	$	-	$	-	$	(1)	$	1	$	-	$	-	$	-	$	-
Claims and claims expense		(1)		(135)		(3)		(3)		(4)		(42)		(2)		(3)		(142)		(51)
Operating costs and expenses		-		1		(1)		(1)		1		(1)		(2)		-		(1)		(2)
Underwriting loss	$	(1)	$	(134)	$	(4)	$	(4)	$	(4)	$	(42)	$	(4)	$	(3)	$	(143)	$	(53)
Effect of Discontinued Lines and Coverages on the Property-Liability combined ratio		-		1.9		0.1		-		-		0.7		0.1		-		0.5		0.2
Underwriting Income by Brand
Allstate brand	$	814	$	871	$	346	$	520	$	6	$	754	$	187	$	592	$	2,551	$	1,539
Encompass brand		41		19		(7)		(6)		(67)		1		(5)		1		47		(70)
Esurance brand		(56)		(54)		(61)		(47)		(46)		(46)		(39)		(61)		(218)		(192)
Answer Financial		(4)		(5)		(5)		(5)		(5)		(8)		(5)		(6)		(19)		(24)
Underwriting income (loss)	$	795	$	831	$	273	$	462	$	(112)	$	701	$	138	$	526	$	2,361	$	1,253

14

THE ALLSTATE CORPORATION

HISTORICAL PROPERTY-LIABILITY

UNDERWRITING RESULTS BY AREA OF BUSINESS

($ in millions)

		Twelve months ended December 31,
		2013		2012		2011		2010		2009
Property-Liability Underwriting Summary
Allstate Protection	$	2,361	$	1,253	$	(857)	$	525	$	1,032
Discontinued Lines and Coverages		(143)		(53)		(25)		(31)		(32)
Underwriting income (loss)	$	2,218	$	1,200	$	(882)	$	494	$	1,000
Allstate Protection Underwriting Summary
Premiums written	$	28,164	$	27,026	$	25,981	$	25,906	$	25,972
Premiums earned	$	27,618	$	26,737	$	25,942	$	25,955	$	26,195
Claims and claims expense		(17,769)		(18,433)		(20,140)		(18,923)		(18,722)
Amortization of deferred policy acquisition costs		(3,674)		(3,483)		(3,477)		(3,517)		(3,615)
Operating costs and expenses		(3,751)		(3,534)		(3,139)		(2,957)		(2,721)
Restructuring and related charges		(63)		(34)		(43)		(33)		(105)
Underwriting income (loss)	$	2,361	$	1,253	$	(857)	$	525	$	1,032
Catastrophe losses	$	1,251	$	2,345	$	3,815	$	2,207	$	2,069
Operating ratios
Loss ratio		64.4		68.9		77.6		72.9		71.5
Expense ratio		27.1		26.4		25.7		25.1		24.6
Combined ratio		91.5		95.3		103.3		98.0		96.1
Effect of catastrophe losses on combined ratio		4.5		8.8		14.7		8.5		7.9
Effect of restructuring and related charges on combined ratio		0.2		0.1		0.2		0.1		0.4
Effect of business combination expenses and the amortization of purchased intangible assets on combined ratio		0.3		0.5		0.2		-		-
Discontinued Lines and Coverages Underwriting Summary
Premiums written	$	-	$	1	$	(1)	$	1	$	(1)
Premiums earned	$	-	$	-	$	-	$	2	$	(1)
Claims and claims expense		(142)		(51)		(21)		(28)		(24)
Operating costs and expenses		(1)		(2)		(4)		(5)		(7)
Underwriting loss	$	(143)	$	(53)	$	(25)	$	(31)	$	(32)
Effect of Discontinued Lines and Coverages on the Property-Liability combined ratio		0.5		0.2		0.1		0.1		0.1

15

THE ALLSTATE CORPORATION

PROPERTY-LIABILITY PREMIUMS WRITTEN BY BRAND

($ 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,
		2013		2013		2013		2013		2012		2012		2012		2012		2013		2012
Allstate brand (1)
Auto	$	4,147	$	4,280	$	4,170	$	4,155	$	4,031	$	4,164	$	4,077	$	4,126	$	16,752	$	16,398
Homeowners		1,549		1,779		1,693		1,268		1,477		1,686		1,639		1,258		6,289		6,060
Other personal lines		368		417		406		348		362		407		404		342		1,539		1,515
Commercial lines		119		114		121		112		112		110		120		112		466		454
Other business lines		157		161		151		133		120		118		111		113		602		462
		6,340		6,751		6,541		6,016		6,102		6,485		6,351		5,951		25,648		24,889
Encompass brand
Auto		155		172		167		147		153		163		160		142		641		618
Homeowners		115		129		120		97		101		108		104		85		461		398
Other personal lines		25		28		28		23		24		26		25		22		104		97
		295		329		315		267		278		297		289		249		1,206		1,113
Esurance brand
Auto		315		357		294		342		256		282		224		262		1,308		1,024
Other personal lines		-		1		1		-		-		-		-		-		2		-
		315		358		295		342		256		282		224		262		1,310		1,024
Allstate Protection		6,950		7,438		7,151		6,625		6,636		7,064		6,864		6,462		28,164		27,026
Discontinued Lines and Coverages		-		-		-		-		1		(1)		-		1		-		1
Property-Liability	$	6,950	$	7,438	$	7,151	$	6,625	$	6,637	$	7,063	$	6,864	$	6,463	$	28,164	$	27,027
Allstate Protection
Auto	$	4,617	$	4,809	$	4,631	$	4,644	$	4,440	$	4,609	$	4,461	$	4,530	$	18,701	$	18,040
Homeowners		1,664		1,908		1,813		1,365		1,578		1,794		1,743		1,343		6,750		6,458
Other personal lines		393		446		435		371		386		433		429		364		1,645		1,612
Commercial lines		119		114		121		112		112		110		120		112		466		454
Other business lines		157		161		151		133		120		118		111		113		602		462
	$	6,950	$	7,438	$	7,151	$	6,625	$	6,636	$	7,064	$	6,864	$	6,462	$	28,164	$	27,026
(1) Canada premiums included in Allstate brand	$	262	$	297	$	319	$	235	$	253	$	279	$	291	$	218	$	1,113	$	1,041

16

THE ALLSTATE CORPORATION

PROPERTY-LIABILITY

IMPACT OF NET RATE CHANGES APPROVED ON PREMIUMS WRITTEN

	Three months ended			Three months ended			Three months ended
	December 31, 2013 (1)			September 30, 2013			June 30, 2013
	Number of		State	Number of		State	Number of			State
	states	Countrywide (%) (4)	specific (%) (5)	states	Countrywide (%) (4)	specific (%) (5)	states		Countrywide (%) (4)	specific (%) (5)
Allstate brand
Auto (2)	24	0.8	2.6	12	0.7	3.1	15		0.1	0.5
Homeowners (3)	21	1.5	4.5	3	0.3	6.8	8		0.5	6.2
Encompass brand
Auto	11	2.1	6.6	9	1.4	5.7	14		1.6	4.8
Homeowners	14	2.7	6.4	11	1.4	6.9	15		1.9	4.8
Esurance brand
Auto	16	1.1	5.5	14	1.1	5.2	15		1.7	4.7
	Three months ended			Three months ended			Three months ended
	March 31, 2013			December 31, 2012			September 30, 2012
	Number of		State	Number of		State	Number of			State
	states	Countrywide (%) (4)	specific (%) (5)	states	Countrywide (%) (4)	specific (%) (5)	states		Countrywide (%) (4)	specific (%) (5)
Allstate brand
Auto (2)	15	0.3	1.8	17	0.8	3.0	15		0.3	1.8
Homeowners (3)	16	1.3	4.8	20	2.3	6.2	10		0.8	7.3
Encompass brand
Auto	5	0.8	5.6	21	1.7	4.3	3		0.7	4.5
Homeowners	3	1.4	7.0	20	3.0	5.8	5	(6)	0.3	2.5
Esurance brand
Auto	11	0.9	4.2	21	2.0	4.4	7		1.2	4.2

(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 and twelve month period ending December 31, 2013 are estimated to total $255 million and $633 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.  Allstate Brand rate changes also exclude Canadian operations and specialty auto. In 2013, the Ontario government gave the Financial Services Commission of Ontario the authority to implement an average reduction of premium rates by 15%.  Regulator approval of the rate filings remains pending and is not expected to be finalized until early 2014.  The rate reductions are expected to be effective for new business in the second half of 2014 and renewal contracts in late 2014.  They are estimated to reduce premiums written by approximately $45 million and premiums earned by approximately $15 million in 2014.

(2)Impacts of Allstate brand auto effective rate changes as a percentage of total countrywide prior year-end premiums written were 0.5%, 0.7%, 0.2%, 0.5%, 0.6% and 1.1% for the three months ended December 31, 2013, September 30, 2013, June 30, 2013, March 31, 2013, December 31, 2012 and September 30, 2012, respectively.

(3)Impacts of Allstate brand homeowners effective rate changes as a percentage of total countrywide prior year-end premiums written were 0.4%, 0.3%, 1.2%, 1.7%, 1.0% and 0.7% for the three months ended December 31, 2013, September 30, 2013, June 30, 2013, March 31, 2013, December 31, 2012 and September 30, 2012 , respectively.

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

(6)Includes Washington, D.C.

17

THE ALLSTATE CORPORATION

POLICIES IN FORCE AND OTHER STATISTICS

		Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,		Sept. 30,		June 30,		March 31,
		2013		2013		2013		2013		2012		2012		2012		2012
Policies in Force (in thousands) (1)
Allstate Brand
Auto		19,362		19,247		19,155		19,020		19,084		19,110		19,211		19,215
Homeowners		6,077		6,077		6,097		6,136		6,213		6,277		6,379		6,489
Landlord		742		742		744		748		752		754		758		764
Renter		1,385		1,371		1,364		1,364		1,362		1,358		1,341		1,332
Condominium		645		641		640		639		641		640		640		638
Other		1,252		1,260		1,267		1,273		1,289		1,297		1,305		1,312
Other personal lines		4,024		4,014		4,015		4,024		4,044		4,049		4,044		4,046
Commercial lines		301		295		291		286		283		290		283		281
Other business lines		989		996		997		1,001		1,009		1,025		1,035		1,045
Excess and surplus		22		20		18		15		13		12		10		9
Total		30,775		30,649		30,573		30,482		30,646		30,763		30,962		31,085
Encompass Brand
Auto		774		767		752		737		731		719		709		697
Homeowners		356		350		341		333		327		320		314		309
Other personal lines		125		124		124		121		120		119		117		116
Total		1,255		1,241		1,217		1,191		1,178		1,158		1,140		1,122
Esurance Brand
Auto		1,286		1,254		1,207		1,151		1,029		962		892		849
Other personal lines		20		16		11		7		2		-		-		-
Total		1,306		1,270		1,218		1,158		1,031		962		892		849
Total Policies in Force		33,336		33,160		33,008		32,831		32,855		32,883		32,994		33,056
Other Customer Relationships
Good Hands Roadside Members (in thousands) (2)		1,585		1,439		1,272		1,099		870		758		656		569
Non-Proprietary Premiums ($ in millions)
Ivantage (3)	$	1,394	$	1,389	$	1,363	$	1,310	$	1,300	$	1,278	$	1,243	$	1,203
Answer Financial (4)		118		122		111		126		114		108		104		115

(1)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. Allstate Dealer Services (service contracts and other products sold in conjunction with auto lending and vehicle sales transactions) and Partnership Marketing Group (roadside assistance products) statistics are not included in total policies in force since these are not available.  Additionally, non-proprietary products offered by Ivantage (insurance agency) and Answer Financial (independent insurance agency) are not included.

(2)Membership provides pay on demand access to roadside services.  Fees for three months ended December 31, 2013 were $173 thousand.

(3)Represents non-proprietary premiums under management as of the end of the period related to personal and commercial line products offered by Ivantage when an Allstate product is not available. Premiums under management are reported on a one month delay. Premiums are estimates and are reported by entities which have brokering arrangements with Allstate. Fees for the three months ended December 31, 2013 were $14.3 million.

(4)Represents non-proprietary premiums written for the period. Fees for the three months ended December 31, 2013 were $16.2 million.

18

THE ALLSTATE CORPORATION

ALLSTATE BRAND PROFITABILITY MEASURES

($ 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,
		2013		2013		2013		2013		2012		2012		2012		2012		2013		2012
Net premiums written	$	6,340	$	6,751	$	6,541	$	6,016	$	6,102	$	6,485	$	6,351	$	5,951	$	25,648	$	24,889
Net premiums earned
Auto		4,186		4,165		4,133		4,094		4,092		4,087		4,093		4,080		16,578		16,352
Homeowners		1,574		1,568		1,525		1,516		1,514		1,499		1,487		1,480		6,183		5,980
Other personal lines (1)		384		384		380		379		377		377		377		370		1,527		1,501
Commercial lines		115		114		113		114		115		114		116		117		456		462
Other business lines (2)		126		124		115		106		108		100		90		96		471		394
Total		6,385		6,355		6,266		6,209		6,206		6,177		6,163		6,143		25,215		24,689
Incurred losses
Auto		2,876		2,857		2,843		2,774		3,092		2,720		2,846		2,836		11,350		11,494
Homeowners		656		645		1,084		914		1,045		735		1,218		836		3,299		3,834
Other personal lines		187		221		239		247		301		309		274		201		894		1,085
Commercial lines		77		70		69		61		82		62		59		76		277		279
Other business lines		58		60		49		47		46		45		36		37		214		164
Total		3,854		3,853		4,284		4,043		4,566		3,871		4,433		3,986		16,034		16,856
Expenses
Auto		1,114		1,068		1,069		1,068		1,046		1,020		1,042		1,042		4,319		4,150
Homeowners		393		379		368		376		377		358		342		351		1,516		1,428
Other personal lines		115		108		113		115		117		107		102		105		451		431
Commercial lines		37		34		33		34		39		31		30		32		138		132
Other business lines		58		42		53		53		55		36		27		35		206		153
Total		1,717		1,631		1,636		1,646		1,634		1,552		1,543		1,565		6,630		6,294
Underwriting income (loss)
Auto		196		240		221		252		(46)		347		205		202		909		708
Homeowners		525		544		73		226		92		406		(73)		293		1,368		718
Other personal lines		82		55		28		17		(41)		(39)		1		64		182		(15)
Commercial lines		1		10		11		19		(6)		21		27		9		41		51
Other business lines		10		22		13		6		7		19		27		24		51		77
Total		814		871		346		520		6		754		187		592		2,551		1,539
Loss ratio		60.4		60.6		68.4		65.1		73.6		62.7		71.9		64.9		63.6		68.3
Expense ratio		26.9		25.7		26.1		26.5		26.3		25.1		25.1		25.5		26.3		25.5
Combined ratio		87.3		86.3		94.5		91.6		99.9		87.8		97.0		90.4		89.9		93.8
Effect of catastrophe losses on combined ratio		1.8		1.7		9.8		5.5		15.5		3.1		12.9		4.1		4.7		8.9
Effect of prior year reserve reestimates on combined ratio		(0.6)		(1.4)		(0.9)		(0.6)		(2.2)		(2.9)		(2.5)		(3.3)		(0.9)		(2.7)
Effect of advertising expenses on combined ratio		2.3		2.7		3.2		2.7		2.5		2.4		2.9		3.1		2.8		2.7
Combined ratio excluding the effect of catastrophes and prior year reserve reestimates (“underlying”)		86.1		85.4		85.4		86.2		85.4		86.6		85.1		87.0		85.8		86.0
Effect of catastrophe losses		1.8		1.7		9.8		5.5		15.5		3.1		12.9		4.1		4.7		8.9
Effect of prior year non-catastrophe reserve reestimates		(0.6)		(0.8)		(0.7)		(0.1)		(1.0)		(1.9)		(1.0)		(0.7)		(0.6)		(1.1)
Combined ratio		87.3		86.3		94.5		91.6		99.9		87.8		97.0		90.4		89.9		93.8

(1)Other personal lines include renter, condominium, landlord and other personal lines.

(2)Other business lines include Allstate Roadside Services, Allstate Dealer Services and other business lines.

19

THE ALLSTATE CORPORATION

ALLSTATE BRAND 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,
		2013	2013	2013	2013	2012	2012	2012	2012	2013	2012
New Issued Applications (in thousands) (2)
Auto		664	720	709	656	572	610	630	631	2,749	2,443
Homeowners		157	180	167	121	117	124	126	108	625	475
Average Premium - Gross Written ($) (3)
Auto		473	467	466	464	464	459	455	454	468	458
Homeowners		1,126	1,119	1,109	1,104	1,092	1,083	1,066	1,054	1,115	1,074
Average Premium - Net Earned ($) (4)
Auto		434	433	433	430	429	425	426	423	433	426
Homeowners		1,029	1,024	990	976	965	942	918	898	1,005	930
Renewal Ratio (%) (5)
Auto		88.7	88.7	88.6	88.4	88.1	87.9	87.9	87.6	88.6	87.9
Homeowners		88.1	88.0	87.5	87.2	87.7	87.4	87.1	87.5	87.7	87.4
Bodily Injury Claim Frequency
(% change year-over-year)
Auto		(1.7)	0.8	(1.1)	(2.4)	(3.1)	(1.8)	1.2	(2.9)	(1.1)	(1.7)
Property Damage Claim Frequency
(% change year-over-year)
Auto		1.4	0.6	(0.3)	(0.7)	(4.3)	(1.8)	0.7	(4.8)	0.3	(2.6)
Auto Paid Severity
(% change year-over-year)
Bodily injury		2.0	2.3	4.1	6.7	5.4	6.6	2.8	(0.1)	3.8	3.6
Property damage		3.2	0.8	3.7	(0.2)	0.7	4.0	3.1	4.5	1.8	3.0
Homeowners Excluding Catastrophe Losses
(% change year-over-year)
Claim frequency		(2.2)	(1.1)	0.6	1.2	(10.4)	(11.4)	(7.1)	(5.4)	(0.3)	(8.8)
Claim severity		0.2	(2.2)	1.3	(0.2)	6.1	5.8	1.7	(0.7)	(0.2)	3.0

(1)Statistics presented for Allstate brand exclude excess and surplus lines. Beginning in the fourth quarter of 2013, statistics include the company’s Canadian operations and specialty auto. The prior periods were updated to conform to the current presentation. In addition, Auto is no longer being broken out into the Standard and Non-standard auto components.

(2)New Issued Applications:  Item counts of automobiles or homeowners insurance applications for insurance policies that were issued during the period, regardless of whether the customer was previously insured by another Allstate Protection brand.  Does not include automobiles that are added by existing customers.

(3)Average Premium - Gross Written:  Gross premiums written divided by issued item count.  Gross premiums written include the impacts from discounts, surcharges and ceded reinsurance premiums and exclude the impacts from mid-term premium adjustments 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.

(4)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.

(5)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.

20

THE ALLSTATE CORPORATION

ENCOMPASS BRAND PROFITABILITY MEASURES AND STATISTICS

($ 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,
		2013		2013		2013		2013		2012		2012		2012		2012		2013		2012
Net premiums written	$	295	$	329	$	315	$	267	$	278	$	297	$	289	$	249	$	1,206	$	1,113
Net premiums earned
Auto	$	155	$	158	$	158	$	155	$	153	$	152	$	153	$	151	$	626	$	609
Homeowners		114		111		105		100		98		96		93		92		430		379
Other personal lines		25		26		24		25		24		23		23		23		100		93
Total		294		295		287		280		275		271		269		266		1,156		1,081
Incurred losses
Auto	$	114	$	112	$	117	$	117	$	116	$	119	$	125	$	118	$	460	$	478
Homeowners		48		63		69		62		121		56		62		51		242		290
Other personal lines		-		13		21		20		20		13		10		20		54		63
Total		162		188		207		199		257		188		197		189		756		831
Expenses
Auto	$	49	$	47	$	48	$	47	$	48	$	45	$	42	$	43	$	191	$	178
Homeowners		35		34		33		32		31		30		28		28		134		117
Other personal lines		7		7		6		8		6		7		7		5		28		25
Total		91		88		87		87		85		82		77		76		353		320
Underwriting income (loss)
Auto	$	(8)	$	(1)	$	(7)	$	(9)	$	(11)	$	(12)	$	(14)	$	(10)	$	(25)	$	(47)
Homeowners		31		14		3		6		(54)		10		3		13		54		(28)
Other personal lines		18		6		(3)		(3)		(2)		3		6		(2)		18		5
Total		41		19		(7)		(6)		(67)		1		(5)		1		47		(70)
Loss ratio		55.1		63.7		72.1		71.1		93.5		69.4		73.3		71.0		65.4		76.9
Expense ratio		31.0		29.9		30.3		31.0		30.9		30.2		28.6		28.6		30.5		29.6
Combined ratio		86.1		93.6		102.4		102.1		124.4		99.6		101.9		99.6		95.9		106.5
Effect of catastrophe losses on combined ratio		0.3		5.8		10.1		4.6		34.9		5.5		6.7		2.6		5.2		12.6
Effect of prior year reserve reestimates on combined ratio		(7.5)		(5.1)		(1.4)		(0.7)		(8.4)		(3.7)		(3.7)		(0.8)		(3.7)		(4.2)
Effect of advertising expenses on combined ratio		0.3		-		0.7		0.7		0.7		-		0.4		0.8		0.4		0.5
Combined ratio excluding the effect of catastrophes and prior year reserve reestimates (“underlying”)		91.8		92.5		92.7		97.9		97.1		93.4		97.0		96.6		93.7		96.0
Effect of catastrophe losses		0.3		5.8		10.1		4.6		34.9		5.5		6.7		2.6		5.2		12.6
Effect of prior year non-catastrophe reserve reestimates		(6.0)		(4.7)		(0.4)		(0.4)		(7.6)		0.7		(1.8)		0.4		(3.0)		(2.1)
Combined ratio		86.1		93.6		102.4		102.1		124.4		99.6		101.9		99.6		95.9		106.5
Policies in Force (in thousands)
Auto		774		767		752		737		731		719		709		697		774		731
Homeowners		356		350		341		333		327		320		314		309		356		327
Other personal lines		125		124		124		121		120		119		117		116		125		120
		1,255		1,241		1,217		1,191		1,178		1,158		1,140		1,122		1,255		1,178
New Issued Applications (in thousands)
Auto		36		43		41		35		37		37		36		32		155		142
Homeowners		18		22		22		17		18		19		18		15		79		70
Average Premium - Gross Written ($)
Auto		886		879		872		882		884		890		886		899		880		890
Homeowners		1,392		1,390		1,362		1,346		1,312		1,323		1,309		1,299		1,374		1,311
Renewal Ratio (%)
Auto		79.1		79.4		78.4		77.8		79.5		76.9		75.2		71.8		78.7		75.8
Homeowners		86.2		87.4		86.4		86.1		86.5		84.5		82.6		79.6		86.6		83.3

21

THE ALLSTATE CORPORATION

ESURANCE PROFITABILITY MEASURES AND STATISTICS

	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)		2013		2013		2013		2013		2012		2012		2012		2012		2013		2012
Net premiums written	$	315	$	358	$	295	$	342	$	256	$	282	$	224	$	262	$	1,310	$	1,024
Net premiums earned
Auto	$	334	$	322	$	308	$	281	$	264	$	248	$	234	$	221	$	1,245	$	967
Other personal lines		1		-		1		-		-		-		-		-		2		-
		335		322		309		281		264		248		234		221		1,247		967
Incurred losses
Auto	$	266	$	251	$	246	$	215	$	215	$	192	$	178	$	161	$	978	$	746
Other personal lines		-		-		1		-		-		-		-		-		1		-
		266		251		247		215		215		192		178		161		979		746
Expenses
Auto	$	123	$	125	$	122	$	113	$	95	$	102	$	95	$	121	$	483	$	413
Other personal lines		2		-		1		-		-		-		-		-		3		-
		125		125		123		113		95		102		95		121		486		413
Underwriting loss
Auto	$	(55)	$	(54)	$	(60)	$	(47)	$	(46)	$	(46)	$	(39)	$	(61)	$	(216)	$	(192)
Other personal lines		(1)		-		(1)		-		-		-		-		-		(2)		-
		(56)		(54)		(61)		(47)		(46)		(46)		(39)		(61)		(218)		(192)
Loss ratio		79.4		78.0		79.9		76.5		81.4		77.4		76.1		72.8		78.5		77.2
Expense ratio		37.3		38.8		39.8		40.2		36.0		41.1		40.6		54.8		39.0		42.7
Combined ratio		116.7		116.8		119.7		116.7		117.4		118.5		116.7		127.6		117.5		119.9
Effect of catastrophe losses on combined ratio		0.3		0.6		1.6		1.1		2.3		0.8		2.6		0.4		0.9		1.6
Effect of prior year reserve reestimates on combined ratio		-		-		-		-		-		-		-		-		-		-
Effect of business combination expenses and the amortization of purchased intangible assets on combined ratio		4.5		4.7		5.2		5.3		7.2		8.1		8.1		18.1		4.9		10.1
Effect of advertising expenses on combined ratio		12.8		14.6		16.2		16.0		9.5		16.5		16.2		20.4		14.8		15.4
Combined ratio excluding the effect of catastrophes, prior year reserve reestimates, business combination expenses, and the amortization of purchased intangible assets (“underlying”)		111.9		111.5		112.9		110.3		107.9		109.6		106.0		109.1		111.7		108.2
Effect of catastrophe losses		0.3		0.6		1.6		1.1		2.3		0.8		2.6		0.4		0.9		1.6
Effect of prior year non-catastrophe reserve reestimates		-		-		-		-		-		-		-		-		-		-
Effect of business combination expenses and the amortization of purchased intangible assets		4.5		4.7		5.2		5.3		7.2		8.1		8.1		18.1		4.9		10.1
Combined ratio		116.7		116.8		119.7		116.7		117.4		118.5		116.7		127.6		117.5		119.9
Policies in Force (in thousands)
Auto		1,286		1,254		1,207		1,151		1,029		962		892		849		1,286		1,029
Other personal lines		20		16		11		7		2		-		-		-		20		-
		1,306		1,270		1,218		1,158		1,031		962		892		849		1,306		1,029
New Issued Applications (in thousands)
Auto		162		188		175		222		164		172		130		139		747		605
Other personal lines		4		5		6		5		2		-		-		-		20		2
		166		193		181		227		166		172		130		139		767		607
Average Premium - Gross Written ($)
Auto		483		480		481		494		484		485		490		508		485		493
Renewal Ratio (%)
Auto		80.1		79.9		81.7		81.2		80.1		79.7		81.9		80.5		80.7		80.5
Impact of Esurance brand on Allstate Protection combined ratio		0.8		0.8		0.9		0.7		0.7		0.7		0.6		0.9		0.8		0.7
Impact of Esurance brand on Allstate Protection expense ratio		1.8		1.8		1.8		1.7		1.4		1.5		1.4		1.8		1.8		1.5

22

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)		2013		2013		2013		2013		2012		2012		2012		2012		2013		2012
Net premiums written
Allstate brand	$	4,147	$	4,280	$	4,170	$	4,155	$	4,031	$	4,164	$	4,077	$	4,126	$	16,752	$	16,398
Encompass brand		155		172		167		147		153		163		160		142		641		618
Esurance brand		315		357		294		342		256		282		224		262		1,308		1,024
		4,617		4,809		4,631		4,644		4,440		4,609		4,461		4,530		18,701		18,040
Net premiums earned
Allstate brand	$	4,186	$	4,165	$	4,133	$	4,094	$	4,092	$	4,087	$	4,093	$	4,080	$	16,578	$	16,352
Encompass brand		155		158		158		155		153		152		153		151		626		609
Esurance brand		334		322		308		281		264		248		234		221		1,245		967
		4,675		4,645		4,599		4,530		4,509		4,487		4,480		4,452		18,449		17,928
Incurred losses
Allstate brand	$	2,876	$	2,857	$	2,843	$	2,774	$	3,092	$	2,720	$	2,846	$	2,836	$	11,350	$	11,494
Encompass brand		114		112		117		117		116		119		125		118		460		478
Esurance brand		266		251		246		215		215		192		178		161		978		746
		3,256		3,220		3,206		3,106		3,423		3,031		3,149		3,115		12,788		12,718
Expenses
Allstate brand	$	1,114	$	1,068	$	1,069	$	1,068	$	1,046	$	1,020	$	1,042	$	1,042	$	4,319	$	4,150
Encompass brand		49		47		48		47		48		45		42		43		191		178
Esurance brand		123		125		122		113		95		102		95		121		483		413
		1,286		1,240		1,239		1,228		1,189		1,167		1,179		1,206		4,993		4,741
Underwriting income
Allstate brand	$	196	$	240	$	221	$	252	$	(46)	$	347	$	205	$	202	$	909	$	708
Encompass brand		(8)		(1)		(7)		(9)		(11)		(12)		(14)		(10)		(25)		(47)
Esurance brand		(55)		(54)		(60)		(47)		(46)		(46)		(39)		(61)		(216)		(192)
		133		185		154		196		(103)		289		152		131		668		469
Loss ratio
Allstate brand		68.7		68.6		68.8		67.7		75.6		66.5		69.5		69.5		68.5		70.3
Encompass brand		73.6		70.9		74.0		75.5		75.8		78.3		81.7		78.1		73.5		78.5
Esurance brand		79.7		78.0		79.9		76.5		81.4		77.4		76.1		72.8		78.5		77.2
Allstate Protection		69.6		69.3		69.7		68.6		75.9		67.6		70.3		70.0		69.3		70.9
Expense ratio
Allstate brand		26.6		25.6		25.9		26.1		25.5		25.0		25.5		25.5		26.0		25.4
Encompass brand		31.6		29.7		30.4		30.3		31.4		29.6		27.5		28.5		30.5		29.2
Esurance brand		36.8		38.8		39.6		40.2		36.0		41.1		40.6		54.8		38.8		42.7
Allstate Protection		27.6		26.7		27.0		27.1		26.4		26.0		26.3		27.1		27.1		26.5
Combined ratio
Allstate brand		95.3		94.2		94.7		93.8		101.1		91.5		95.0		95.0		94.5		95.7
Encompass brand		105.2		100.6		104.4		105.8		107.2		107.9		109.2		106.6		104.0		107.7
Esurance brand		116.5		116.8		119.5		116.7		117.4		118.5		116.7		127.6		117.3		119.9
Allstate Protection		97.2		96.0		96.7		95.7		102.3		93.6		96.6		97.1		96.4		97.4
Effect of catastrophe losses on combined ratio
Allstate brand		-		0.8		1.9		1.1		8.9		1.2		3.8		1.2		1.0		3.8
Encompass brand		(0.6)		1.9		0.6		(0.6)		9.8		1.3		2.6		0.7		0.3		3.6
Esurance brand		0.3		0.6		1.6		1.1		2.3		0.8		2.6		0.4		0.9		1.6
Effect of prior year reserve reestimates on combined ratio
Allstate brand		(0.9)		(0.8)		(1.8)		(1.6)		(1.9)		(3.3)		(2.0)		(1.2)		(1.2)		(2.1)
Encompass brand		(4.5)		(7.6)		(3.2)		(3.9)		(15.0)		(0.7)		(0.7)		0.7		(4.8)		(3.9)
Esurance brand		-		-		-		-		-		-		-		-		-		-
Effect of business combination expenses and the amortization of purchased intangible assets on combined ratio
Esurance brand		4.5		4.7		5.2		5.3		7.2		8.1		8.1		18.1		4.9		10.1
Allstate brand combined ratio excluding the effect of catastrophes and prior year reserve reestimates (“underlying”)		95.9		94.3		94.1		93.2		94.0		93.3		93.0		94.8		94.4		93.8
Effect of catastrophe losses on combined ratio		-		0.8		1.9		1.1		8.9		1.2		3.8		1.2		1.0		3.8
Effect of prior year non-catastrophe reserve reestimates on combined ratio		(0.6)		(0.9)		(1.3)		(0.5)		(1.8)		(3.0)		(1.8)		(1.0)		(0.9)		(1.9)
Allstate brand combined ratio		95.3		94.2		94.7		93.8		101.1		91.5		95.0		95.0		94.5		95.7
Effect of catastrophe losses included in prior year reserve reestimates on combined ratio		(0.3)		0.1		(0.5)		(1.1)		(0.1)		(0.3)		(0.2)		(0.2)		(0.3)		(0.2)

23

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)		2013		2013		2013		2013		2012		2012		2012		2012		2013		2012
Net premiums written
Allstate brand	$	1,549	$	1,779	$	1,693	$	1,268	$	1,477	$	1,686	$	1,639	$	1,258	$	6,289	$	6,060
Encompass brand		115		129		120		97		101		108		104		85		461		398
		1,664		1,908		1,813		1,365		1,578		1,794		1,743		1,343		6,750		6,458
Net premiums earned
Allstate brand	$	1,574	$	1,568	$	1,525	$	1,516	$	1,514	$	1,499	$	1,487	$	1,480	$	6,183	$	5,980
Encompass brand		114		111		105		100		98		96		93		92		430		379
		1,688		1,679		1,630		1,616		1,612		1,595		1,580		1,572		6,613		6,359
Incurred losses
Allstate brand	$	656	$	645	$	1,084	$	914	$	1,045	$	735	$	1,218	$	836	$	3,299	$	3,834
Encompass brand		48		63		69		62		121		56		62		51		242		290
		704		708		1,153		976		1,166		791		1,280		887		3,541		4,124
Expenses
Allstate brand	$	393	$	379	$	368	$	376	$	377	$	358	$	342	$	351	$	1,516	$	1,428
Encompass brand		35		34		33		32		31		30		28		28		134		117
		428		413		401		408		408		388		370		379		1,650		1,545
Underwriting income
Allstate brand	$	525	$	544	$	73	$	226	$	92	$	406	$	(73)	$	293	$	1,368	$	718
Encompass brand		31		14		3		6		(54)		10		3		13		54		(28)
		556		558		76		232		38		416		(70)		306		1,422		690
Loss ratio
Allstate brand		41.6		41.1		71.1		60.3		69.0		49.0		81.9		56.5		53.4		64.1
Encompass brand		42.1		56.8		65.7		62.0		123.5		58.3		66.7		55.4		56.3		76.5
Allstate Protection		41.7		42.2		70.7		60.4		72.3		49.6		81.0		56.4		53.5		64.8
Expense ratio
Allstate brand		25.0		24.2		24.1		24.8		24.9		23.9		23.0		23.7		24.5		23.9
Encompass brand		30.7		30.6		31.4		32.0		31.6		31.3		30.1		30.5		31.1		30.9
Allstate Protection		25.4		24.6		24.6		25.2		25.3		24.3		23.4		24.1		25.0		24.3
Combined ratio
Allstate brand		66.6		65.3		95.2		85.1		93.9		72.9		104.9		80.2		77.9		88.0
Encompass brand		72.8		87.4		97.1		94.0		155.1		89.6		96.8		85.9		87.4		107.4
Allstate Protection		67.1		66.8		95.3		85.6		97.6		73.9		104.4		80.5		78.5		89.1
Effect of catastrophe losses on combined ratio
Allstate brand		7.1		4.7		32.5		18.7		32.0		7.8		40.2		12.6		15.6		23.2
Encompass brand		1.8		13.5		23.8		12.0		77.6		13.5		15.1		6.5		12.6		28.8
Effect of prior year reserve reestimates on combined ratio
Allstate brand		(0.3)		(3.3)		1.0		2.6		(5.0)		(4.3)		(3.5)		(7.9)		-		(5.2)
Encompass brand		(4.4)		-		(1.0)		1.0		2.0		(8.3)		(4.3)		(2.2)		(1.2)		(3.2)
Allstate brand combined ratio excluding the effect of catastrophes and prior year reserve reestimates (“underlying”)		60.7		61.8		62.7		65.8		62.4		66.2		64.6		67.0		62.7		65.1
Effect of catastrophe losses on combined ratio		7.1		4.7		32.5		18.7		32.0		7.8		40.2		12.6		15.6		23.2
Effect of prior year non-catastrophe reserve reestimates on combined ratio		(1.2)		(1.2)		-		0.6		(0.5)		(1.1)		0.1		0.6		(0.4)		(0.3)
Allstate brand combined ratio		66.6		65.3		95.2		85.1		93.9		72.9		104.9		80.2		77.9		88.0
Effect of catastrophe losses included in prior year reserve reestimates on combined ratio		0.9		(2.1)		1.0		2.0		(4.5)		(3.2)		(3.6)		(8.5)		0.4		(4.9)

24

THE ALLSTATE CORPORATION

OTHER PERSONAL LINES PROFITABILITY MEASURES (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,
($ in millions)		2013		2013		2013		2013		2012		2012		2012		2012		2013		2012
Net premiums written
Allstate brand	$	368	$	417	$	406	$	348	$	362	$	407	$	404	$	342	$	1,539	$	1,515
Encompass brand		25		28		28		23		24		26		25		22		104		97
Esurance brand		-		1		1		-		-		-		-		-		2		-
		393		446		435		371		386		433		429		364		1,645		1,612
Net premiums earned
Allstate brand	$	384	$	384	$	380	$	379	$	377	$	377	$	377	$	370	$	1,527	$	1,501
Encompass brand		25		26		24		25		24		23		23		23		100		93
Esurance brand		1		-		1		-		-		-		-		-		2		-
		410		410		405		404		401		400		400		393		1,629		1,594
Incurred losses
Allstate brand	$	187	$	221	$	239	$	247	$	301	$	309	$	274	$	201	$	894	$	1,085
Encompass brand		-		13		21		20		20		13		10		20		54		63
Esurance brand		-		-		1		-		-		-		-		-		1		-
		187		234		261		267		321		322		284		221		949		1,148
Expenses
Allstate brand	$	115	$	108	$	113	$	115	$	117	$	107	$	102	$	105	$	451	$	431
Encompass brand		7		7		6		8		6		7		7		5		28		25
Esurance brand		2		-		1		-		-		-		-		-		3		-
		124		115		120		123		123		114		109		110		482		456
Underwriting income
Allstate brand	$	82	$	55	$	28	$	17	$	(41)	$	(39)	$	1	$	64	$	182	$	(15)
Encompass brand		18		6		(3)		(3)		(2)		3		6		(2)		18		5
Esurance brand		(1)		-		(1)		-		-		-		-		-		(2)		-
		99		61		24		14		(43)		(36)		7		62		198		(10)
Loss ratio
Allstate brand		48.7		57.6		62.9		65.2		79.8		82.0		72.7		54.3		58.6		72.3
Encompass brand		-		50.0		87.5		80.0		83.3		56.5		43.5		87.0		54.0		67.7
Esurance brand		-		-		100.0		-		-		-		-		-		50.0		-
Allstate Protection		45.6		57.1		64.4		66.1		80.1		80.5		71.0		56.2		58.3		72.0
Expense ratio
Allstate brand		29.9		28.1		29.7		30.3		31.1		28.4		27.0		28.4		29.5		28.7
Encompass brand		28.0		26.9		25.0		32.0		25.0		30.5		30.4		21.7		28.0		26.9
Esurance brand		200.0		-		100.0		-		-		-		-		-		150.0		-
Allstate Protection		30.2		28.0		29.6		30.4		30.7		28.5		27.3		28.0		29.6		28.6
Combined ratio
Allstate brand		78.6		85.7		92.6		95.5		110.9		110.3		99.7		82.7		88.1		101.0
Encompass brand		28.0		76.9		112.5		112.0		108.3		87.0		73.9		108.7		82.0		94.6
Esurance brand		200.0		-		200.0		-		-		-		-		-		200.0		-
Allstate Protection		75.9		85.1		94.1		96.5		110.7		109.0		98.3		84.2		87.8		100.6
Effect of catastrophe losses on combined ratio
Allstate brand		1.0		(0.3)		8.7		4.7		26.3		5.6		13.5		3.8		3.5		12.3
Encompass brand		-		(3.8)		12.5		8.0		20.8		-		-		-		4.0		5.4
Esurance brand		-		-		-		-		-		-		-		-		-		-
Effect of prior year reserve reestimates on combined ratio
Allstate brand		-		2.6		4.2		0.3		5.0		10.3		1.1		(7.8)		1.8		2.2
Encompass brand		(40.0)		(11.5)		8.3		12.0		(8.3)		(4.3)		(21.7)		(4.3)		(8.0)		(9.7)
Esurance brand		-		-		-		-		-		-		-		-		-		-

(1)Other personal lines include renter, condominium, landlord and other personal lines. Beginning in fourth quarter of 2013, commercial lines and other business lines are reported separately. Profitability measures for these lines can be found on the Allstate Brand Profitability Measures page. The prior periods were updated to conform to the current presentation.

25

THE ALLSTATE CORPORATION

HOMEOWNERS SUPPLEMENTAL INFORMATION

($ in millions)

		Twelve months ended December 31, 2013
										Premium rate changes (3)
											Annual impact of
								Effect of			rate changes
		Earned		Incurred			Catastrophe	catastrophes	Number of	Number of	on state specific
Primary Exposure Groupings (1)		premiums		losses	Loss ratios		losses	on loss ratio	catastrophes	states	premiums written
Florida	$	131	$	67	51.1%	$	-	0.0%
Other hurricane exposure states		3,434		1,683	49.0%		461	13.4%
Total hurricane exposure states (2)		3,565		1,750	49.1%		461	12.9%		18	5.4%
Other catastrophe exposure states		3,048		1,791	58.8%		559	18.3%		27	5.4%
Total	$	6,613	$	3,541	53.5%	$	1,020	15.4%	76	45	5.4%

		2004 to 2013 Historical Information
								Effect of
		Earned		Incurred			Catastrophe	catastrophes
Primary Exposure Groupings(1)		premiums		losses	Loss ratios		losses	on loss ratio
Florida	$	1,352	$	2,272	168.0%	$	1,499	110.9%
Other hurricane exposure states		28,301		23,649	83.6%		11,152	39.4%
Total hurricane exposure states (2)		29,653		25,921	87.4%		12,651	42.7%
Other catastrophe exposure states		26,239		18,093	69.0%		6,103	23.3%
Total	$	55,892	$	44,014	78.7%	$	18,754	33.6%

(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).  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) 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.

26

THE ALLSTATE CORPORATION

CATASTROPHE LOSSES BY BRAND

($ 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,
		2013		2013		2013		2013		2012		2012		2012		2012		2013		2012
Allstate brand
Auto	$	1	$	35	$	79	$	43	$	366	$	51	$	156	$	48	$	158		621
Homeowners		112		74		496		284		485		117		597		186		966		1,385
Other personal lines		4		(1)		33		18		99		21		51		14		54		185
Commercial lines		(2)		1		5		(2)		9		-		(9)		3		2		3
Other business lines		-		-		-		-		-		-		-		-		-		-
Total	$	115	$	109	$	613	$	343	$	959	$	189	$	795	$	251	$	1,180	$	2,194
Encompass brand
Auto	$	(1)	$	3	$	1	$	(1)	$	15	$	2	$	4	$	1	$	2	$	22
Homeowners		2		15		25		12		76		13		14		6		54		109
Other personal lines		-		(1)		3		2		5		-		-		-		4		5
Total	$	1	$	17	$	29	$	13	$	96	$	15	$	18	$	7	$	60	$	136
Esurance brand
Auto	$	1	$	2	$	5	$	3	$	6	$	2	$	6	$	1	$	11	$	15
Other personal lines		-		-		-		-		-		-		-		-		-		-
Total		1		2		5		3		6		2		6		1		11		15
Allstate Protection	$	117	$	128	$	647	$	359	$	1,061	$	206	$	819	$	259	$	1,251	$	2,345
Allstate Protection
Auto	$	1	$	40	$	85	$	45	$	387	$	55	$	166	$	50	$	171	$	658
Homeowners		114		89		521		296		561		130		611		192		1,020		1,494
Other personal lines		4		(2)		36		20		104		21		51		14		58		190
Commercial lines		(2)		1		5		(2)		9		-		(9)		3		2		3
Other business lines		-		-		-		-		-		-		-		-		-		-
	$	117	$	128	$	647	$	359	$	1,061	$	206	$	819	$	259	$	1,251	$	2,345

27

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					Premiums		Total		Total		Effect on the
	combined ratio					earned		catastrophe		catastrophe		Property-Liability
	Quarter 1	Quarter 2	Quarter 3	Quarter 4	Year	year-to-date		losses by year		losses by year		combined ratio
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
2012	3.9	12.3	3.1	15.7	8.8	26,737		2,345		1,324		5.0
2013	5.3	9.4	1.8	1.7	4.5	27,618		1,251		1,352		4.9
Average	4.8	10.6	16.4	6.2	9.5							5.8

28

THE ALLSTATE CORPORATION

CATASTROPHE BY SIZE OF EVENT

($ in millions, except ratios)

Three months ended December 31, 2013
											Average
		Number				Claims and			Combined		catastrophe
Size of catastrophe		of events				claims expense			ratio impact		loss per event
Greater than $250 million		-	-	%	$	-	-	%	-	$	-
$101 million to $250 million		-	-			-	-		-		-
$50 million to $100 million		-	-			-	-		-		-
Less than $50 million		15	100.0			116	99.1		1.7		8
Total		15	100.0	%		116	99.1		1.7		8
Prior year reserve reestimates						(4)	(3.4)		(0.1)
Prior quarter reserve reestimates						5	4.3		0.1
Total catastrophe losses					$	117	100.0	%	1.7
Twelve months ended December 31, 2013
											Average
		Number				Claims and			Combined		catastrophe
Size of catastrophe		of events				claims expense			ratio impact		loss per event
Greater than $250 million		-	-	%	$	-	-	%	-	$	-
$101 million to $250 million		2	2.6			297	23.7		1.1		149
$50 million to $100 million		5	6.6			386	30.9		1.4		77
Less than $50 million		69	90.8			656	52.4		2.3		10
Total		76	100.0	%		1,339	107.0		4.8		18
Prior year reserve reestimates						(88)	(7.0)		(0.3)
Total catastrophe losses					$	1,251	100.0	%	4.5
2004 through 2013
	Principal										Average
	state with	Number				Claims and			Combined		catastrophe
Size of catastrophe	loss	of events				claims expense			ratio impact		loss per event
Greater than $250 million
Hurricane Katrina - 2005	LA				$	3,558	14.0	%	1.3	$	3,558
Sandy - 2012	NY, NJ					1,076	4.2		0.4		1,076
Hurricane Rita - 2005	TX					891	3.5		0.3		891
Hurricane Ike - 2008	TX					837	3.3		0.3		837
Hurricane Ivan - 2004	FL					630	2.5		0.2		630
Hurricane Charley - 2004	FL					599	2.4		0.2		599
Hurricane Frances - 2004	FL					545	2.1		0.2		545
Hurricane Wilma - 2005	FL					517	2.0		0.2		517
May 2011 Tornados	TX, OH, MO					459	1.8		0.2		459
Hurricane Irene - 2011	NY, NJ, MD					401	1.6		0.2		401
Hurricane Jeanne - 2004	FL					334	1.3		0.2		334
April 27th 2011 Tornados	AL					299	1.2		0.1		299
Arizona Hail - 2010	AZ					283	1.1		0.1		283
Hurricane Gustav - 2008	LA					268	1.1		0.1		268
Greater than $250 million		14	1.7	%		10,697	42.1		4.0		764
$101 million to $250 million		22	2.7			3,284	12.9		1.2		149
$50 million to $100 million		58	7.1			4,070	16.1		1.5		70
Less than $50 million		721	88.5			7,339	28.9		2.8		10
Total		815	100.0	%	$	25,390	100.0	%	9.5		31

29

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,
		2013			2013			2013			2013			2012			2012			2012			2012			2013			2012
Prior Year Reserve Reestimates (1)
Auto	$	(44	)	$	(44	)	$	(79	)	$	(70	)	$	(100	)	$	(134	)	$	(83	)	$	(48	)	$	(237	)	$	(365	)
Homeowners		(10	)		(51	)		15			41			(74	)		(72	)		(56	)		(119	)		(5	)		(321	)
Other personal lines		(10	)		7			18			4			17			38			(1	)		(30	)		19			24
Commerical lines		1			(13	)		(14	)		(10	)		-			(23	)		(20	)		(5	)		(36	)		(48	)
Other business lines		-			-			(1	)		(3	)		-			-			(1	)		(5	)		(4	)		(6	)
Allstate Protection		(63	)		(101	)		(61	)		(38	)		(157	)		(191	)		(161	)		(207	)		(263	)		(716	)
Discontinued Lines and Coverages		1			135			3			3			3			42			3			3			142			51
Property-Liability	$	(62	)	$	34		$	(58	)	$	(35	)	$	(154	)	$	(149	)	$	(158	)	$	(204	)	$	(121	)	$	(665	)
Allstate brand (2)	$	(41	)	$	(86	)	$	(57	)	$	(36	)	$	(134	)	$	(181	)	$	(151	)	$	(205	)	$	(220	)	$	(671	)
Encompass brand (2)		(22	)		(15	)		(4	)		(2	)		(23	)		(10	)		(10	)		(2	)		(43	)		(45	)
Esurance		-			-			-			-			-			-			-			-			-			-
Allstate Protection (2)	$	(63	)	$	(101	)	$	(61	)	$	(38	)	$	(157	)	$	(191	)	$	(161	)	$	(207	)	$	(263	)	$	(716	)
Effect of Prior Year Reserve Reestimates on Combined Ratio (1)(3)
Auto		(0.5	)		(0.6	)		(1.2	)		(1.0	)		(1.5	)		(2.0	)		(1.3	)		(0.7	)		(0.9	)		(1.4	)
Homeowners		(0.2	)		(0.7	)		0.2			0.6			(1.1	)		(1.1	)		(0.8	)		(1.8	)		-			(1.2	)
Other personal lines		(0.2	)		0.1			0.3			-			0.3			0.6			-			(0.4	)		-			0.1
Commerical lines		-			(0.2	)		(0.2	)		(0.2	)		-			(0.4	)		(0.3	)		(0.1	)		(0.1	)		(0.2	)
Other business lines		-			-			-			-			-			-			-			(0.1	)		-			-
Allstate Protection		(0.9	)		(1.4	)		(0.9	)		(0.6	)		(2.3	)		(2.9	)		(2.4	)		(3.1	)		(1.0	)		(2.7	)
Discontinued Lines and Coverages		-			1.9			0.1			-			-			0.7			-			-			0.6			0.2
Property-Liability		(0.9	)		0.5			(0.8	)		(0.6	)		(2.3	)		(2.2	)		(2.4	)		(3.1	)		(0.4	)		(2.5	)
Allstate brand (2)		(0.6	)		(1.2	)		(0.8	)		(0.5	)		(2.0	)		(2.7	)		(2.3	)		(3.1	)		(0.8	)		(2.5	)
Encompass brand (2)		(0.3	)		(0.2	)		(0.1	)		(0.1	)		(0.3	)		(0.2	)		(0.1	)		-			(0.2	)		(0.2	)
Esurance		-			-			-			-			-			-			-			-			-			-
Allstate Protection		(0.9	)		(1.4	)		(0.9	)		(0.6	)		(2.3	)		(2.9	)		(2.4	)		(3.1	)		(1.0	)		(2.7	)

(1)Favorable reserve reestimates are shown in parentheses.

(2)Favorable reserve reestimates included in catastrophe losses for Allstate brand,  Encompass brand and Allstate Protection in the three months ended December 31, 2013 totaled $0 million, $4 million and $4 million, respectively, and totaled $78 million, $2 million and $80 million, respectively, in the three months ended December 31, 2012.  Favorable reserve reestimates included in catastrophe losses for Allstate brand, Encompass brand and Allstate Protection in the twelve months ended December 31, 2013 totaled $79 million, $9 million and $88 million, respectively and totaled $388 million, $22 million and $410 million, respectively, in the twelve months ended December 31, 2012.

(3)Calculated using Property-Liability premiums earned for the respective period.

30

THE ALLSTATE CORPORATION

PROPERTY-LIABILITY

HISTORICAL PRIOR YEAR RESERVE REESTIMATES (1)

($ in millions)

		Twelve months ended December 31,
		2013		2012		2011		2010		2009
Allstate brand	$	(220)	$	(671)	$	(371)	$	(181)	$	(126)
Encompass brand		(43)		(45)		15		(6)		(10)
Esurance brand		-		-		-		-		-
Allstate Protection		(263)		(716)		(356)		(187)		(136)
Discontinued Lines and Coverages		142		51		21		28		24
Property-Liability	$	(121)	$	(665)	$	(335)	$	(159)	$	(112)
Effect of Property-Liability prior year reserve reestimates on the combined ratio		(0.4)		(2.5)		(1.3)		(0.6)		(0.4)

(1)   Favorable reserve reestimates are shown in parentheses.

31

THE ALLSTATE CORPORATION

HISTORICAL PROPERTY-LIABILITY LOSS RESERVES

($ in millions)

		Twelve months ended December 31,
		2013		2012		2011		2010		2009
(net of reinsurance)
Net reserve for claims and claims expense, beginning of year	$	17,278	$	17,787	$	17,396	$	17,028	$	17,182
Acquisitions		-		(13)		425		-		-
Claims and claims expense
Provision attributable to the current year		18,032		19,149		20,496		19,110		18,858
Change in provision attributable to prior years (1)		(121)		(665)		(335)		(159)		(112)
Total claims and claims expense		17,911		18,484		20,161		18,951		18,746
Payments
Claims and claims expense attributable to current year		(11,658)		(12,545)		(13,893)		(12,012)		(11,906)
Claims and claims expense attributable to prior years		(6,338)		(6,435)		(6,302)		(6,571)		(6,994)
Total payments		(17,996)		(18,980)		(20,195)		(18,583)		(18,900)
Net reserve for claims and claims expense, end of year (2)	$	17,193	$	17,278	$	17,787	$	17,396	$	17,028
Percent change in loss reserves		(0.5)	%	(2.9)	%	2.2	%	2.2	%	(0.9)	%
(1)Reserve reestimates due to:
Asbestos and environmental claims	$	104	$	48	$	26	$	23	$	5
All other property-liability claims		(225)		(713)		(361)		(182)		(117)
Change in pre-tax reserve	$	(121)	$	(665)	$	(335)	$	(159)	$	(112)

(2)Net reserves for claims and claims expense are net of expected reinsurance recoveries of $4.66 billion, $4.01 billion, $2.59 billion, $2.07 billion and $2.14 billion at December 31, 2013, 2012, 2011, 2010 and 2009, respectively.

32

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,
		2013		2013		2013		2013		2013		2012		2011		2010		2009
(net of reinsurance)
Asbestos claims
Beginning reserves	$	1,033	$	973	$	1,004	$	1,026	$	1,026	$	1,078	$	1,100	$	1,180	$	1,228
Incurred claims and claims expense		-		74		-		-		74		26		26		5		(8)
Claims and claims expense paid		(16)		(14)		(31)		(22)		(83)		(78)		(48)		(85)		(40)
Ending reserves	$	1,017	$	1,033	$	973	$	1,004	$	1,017	$	1,026	$	1,078	$	1,100	$	1,180
Claims and claims expense paid as a percent of ending reserves		1.6%		1.4%		3.2%		2.2%		8.2%		7.6%		4.5%		7.7%		3.4%
Environmental claims
Beginning reserves	$	213	$	189	$	192	$	193	$	193	$	185	$	201	$	198	$	195
Incurred claims and claims expense		-		30		-		-		30		22		-		18		13
Claims and claims expense paid		(5)		(6)		(3)		(1)		(15)		(14)		(16)		(15)		(10)
Ending reserves	$	208	$	213	$	189	$	192	$	208	$	193	$	185	$	201	$	198
Claims and claims expense paid as a percent of ending reserves		2.4%		2.8%		1.6%		0.5%		7.2%		7.3%		8.6%		7.5%		5.1%

33

THE ALLSTATE CORPORATION

ALLSTATE PERSONAL LINES PROFITABILITY MEASURES (1)

($ in millions, except ratios and policies in force)

	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,
		2013		2013		2013		2013		2012		2012		2012		2012		2013		2012
Net premiums written
Auto	$	4,147	$	4,280	$	4,170	$	4,155	$	4,031	$	4,164	$	4,077	$	4,126	$	16,752	$	16,398
Homeowners		1,549		1,779		1,693		1,268		1,477		1,686		1,639		1,258		6,289		6,060
Landlord		138		143		135		124		137		140		132		123		540		532
Renter		58		69		59		53		52		62		54		50		239		218
Condominium		52		58		55		45		47		50		49		41		210		187
Other		120		147		157		126		126		155		169		128		550		578
Other personal lines		368		417		406		348		362		407		404		342		1,539		1,515
Total		6,064		6,476		6,269		5,771		5,870		6,257		6,120		5,726		24,580		23,973
Net premiums earned
Auto	$	4,186	$	4,165	$	4,133	$	4,094	$	4,092	$	4,087	$	4,093	$	4,080	$	16,578	$	16,352
Homeowners		1,574		1,568		1,525		1,516		1,514		1,499		1,487		1,480		6,183		5,980
Other personal lines		384		384		380		379		377		377		377		370		1,527		1,501
Total		6,144		6,117		6,038		5,989		5,983		5,963		5,957		5,930		24,288		23,833
Incurred losses
Auto	$	2,876	$	2,857	$	2,843	$	2,774	$	3,092	$	2,720	$	2,846	$	2,836	$	11,350	$	11,494
Homeowners		656		645		1,084		914		1,045		735		1,218		836		3,299		3,834
Other personal lines		187		221		239		247		301		309		274		201		894		1,085
Total		3,719		3,723		4,166		3,935		4,438		3,764		4,338		3,873		15,543		16,413
Expenses
Auto	$	1,114	$	1,068	$	1,069	$	1,068	$	1,046	$	1,020	$	1,042	$	1,042	$	4,319	$	4,150
Homeowners		393		379		368		376		377		358		342		351		1,516		1,428
Other personal lines		115		108		113		115		117		107		102		105		451		431
Total		1,622		1,555		1,550		1,559		1,540		1,485		1,486		1,498		6,286		6,009
Underwriting income (loss)
Auto	$	196	$	240	$	221	$	252	$	(46)	$	347	$	205	$	202	$	909	$	708
Homeowners		525		544		73		226		92		406		(73)		293		1,368		718
Other personal lines		82		55		28		17		(41)		(39)		1		64		182		(15)
Total		803		839		322		495		5		714		133		559		2,459		1,411
Loss ratio		60.5		60.9		69.0		65.7		74.2		63.1		72.8		65.3		64.0		68.9
Expense ratio		26.4		25.4		25.7		26.0		25.7		24.9		25.0		25.3		25.9		25.2
Combined ratio		86.9		86.3		94.7		91.7		99.9		88.0		97.8		90.6		89.9		94.1
Effect of catastrophe losses on combined ratio		1.9		1.8		10.1		5.8		15.9		3.2		13.5		4.2		4.9		9.2
Effect of prior year reserve reestimates on combined ratio		(0.7)		(1.2)		(0.7)		(0.4)		(2.2)		(2.7)		(2.2)		(3.3)		(0.7)		(2.6)
Combined ratio excluding the effect of catastrophes and prior year reserve reestimates		85.7		85.2		85.1		85.9		85.0		86.5		85.2		87.0		85.5		85.9
Effect of catastrophe losses		1.9		1.8		10.1		5.8		15.9		3.2		13.5		4.2		4.9		9.2
Effect of prior year non-catastrophe reserve reestimates		(0.7)		(0.7)		(0.5)		-		(1.0)		(1.7)		(0.9)		(0.6)		(0.5)		(1.0)
Combined ratio		86.9		86.3		94.7		91.7		99.9		88.0		97.8		90.6		89.9		94.1
Policies in Force (in thousands)
Auto		19,362		19,247		19,155		19,020		19,084		19,110		19,211		19,215		19,362		19,084
Homeowners		6,077		6,077		6,097		6,136		6,213		6,277		6,379		6,489		6,077		6,213
Other personal lines		4,024		4,014		4,015		4,024		4,044		4,049		4,044		4,046		4,024		4,044
Excess and surplus		22		20		18		15		13		12		10		9		22		13
Total		29,485		29,358		29,285		29,195		29,354		29,448		29,644		29,759		29,485		29,354

(1) Allstate Personal Lines comprise Allstate brand auto, homeowners and other personal lines. Allstate Protection segment comprises Allstate Personal Lines; Business to Business-Encompass, Commercial and Other Business Lines; Esurance; and Answer Financial.

34

THE ALLSTATE CORPORATION

BUSINESS TO BUSINESS - ENCOMPASS, COMMERCIAL AND OTHER BUSINESS LINES PROFITABILITY MEASURES

($ in millions, except ratios and policies in force)

	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,
		2013			2013			2013			2013			2012			2012			2012			2012			2013			2012
Net premiums written
Auto	$	155		$	172		$	167		$	147		$	153		$	163		$	160		$	142		$	641		$	618
Homeowners		115			129			120			97			101			108			104			85			461			398
Other personal lines		25			28			28			23			24			26			25			22			104			97
Subtotal - Encompass		295			329			315			267			278			297			289			249			1,206			1,113
Commercial lines		119			114			121			112			112			110			120			112			466			454
Allstate Roadside Services		88			91			88			82			75			74			71			76			349			296
Allstate Dealer Services		69			70			63			51			45			44			40			37			253			166
Other business lines		157			161			151			133			120			118			111			113			602			462
Total		571			604			587			512			510			525			520			474			2,274			2,029
Net premiums earned
Auto	$	155		$	158		$	158		$	155		$	153		$	152		$	153		$	151		$	626		$	609
Homeowners		114			111			105			100			98			96			93			92			430			379
Other personal lines		25			26			24			25			24			23			23			23			100			93
Subtotal - Encompass		294			295			287			280			275			271			269			266			1,156			1,081
Commercial lines		115			114			113			114			115			114			116			117			456			462
Other business lines		126			124			115			106			108			100			90			96			471			394
Total		535			533			515			500			498			485			475			479			2,083			1,937
Incurred losses
Auto	$	114		$	112		$	117		$	117		$	116		$	119		$	125		$	118		$	460		$	478
Homeowners		48			63			69			62			121			56			62			51			242			290
Other personal lines		-			13			21			20			20			13			10			20			54			63
Subtotal - Encompass		162			188			207			199			257			188			197			189			756			831
Commercial lines		77			70			69			61			82			62			59			76			277			279
Other business lines		58			60			49			47			46			45			36			37			214			164
Total		297			318			325			307			385			295			292			302			1,247			1,274
Expenses
Auto	$	49		$	47		$	48		$	47		$	48		$	45		$	42		$	43		$	191		$	178
Homeowners		35			34			33			32			31			30			28			28			134			117
Other personal lines		7			7			6			8			6			7			7			5			28			25
Subtotal - Encompass		91			88			87			87			85			82			77			76			353			320
Commercial lines		37			34			33			34			38			31			30			32			138			131
Other business lines		58			42			53			53			55			36			27			35			206			153
Total		186			164			173			174			178			149			134			143			697			604
Underwriting income (loss)
Auto	$	(8	)	$	(1	)	$	(7	)	$	(9	)	$	(11	)	$	(12	)	$	(14	)	$	(10	)	$	(25	)	$	(47	)
Homeowners		31			14			3			6			(54	)		10			3			13			54			(28	)
Other personal lines		18			6			(3	)		(3	)		(2	)		3			6			(2	)		18			5
Subtotal - Encompass		41			19			(7	)		(6	)		(67	)		1			(5	)		1			47			(70	)
Commercial lines		1			10			11			19			(5	)		21			27			9			41			52
Other business lines		10			22			13			6			7			19			27			24			51			77
Total		52			51			17			19			(65	)		41			49			34			139			59
Loss ratio		55.5			59.7			63.1			61.4			77.3			60.8			61.5			63.0			59.9			65.8
Expense ratio		34.8			30.7			33.6			34.8			35.8			30.7			28.2			29.9			33.4			31.2
Combined ratio		90.3			90.4			96.7			96.2			113.1			91.5			89.7			92.9			93.3			97.0
Effect of catastrophe losses on combined ratio		(0.2	)		3.4			6.6			2.2			21.1			3.1			1.9			2.1			3.0			7.2
Effect of prior year reserve reestimates on combined ratio		(3.9	)		(5.3	)		(3.7	)		(3.0	)		(4.6	)		(6.8	)		(6.5	)		(2.5	)		(4.0	)		(5.1	)
Effect of amortization of purchased intangible assets (1)		0.4			-			-			-			-			-			-			-			0.1			-
Combined ratio excluding the effect of catastrophes, prior year reserve reestimates, and the amortization of purchased intangible assets (“underlying”)		93.1			92.1			92.2			96.2			96.0			92.2			90.1			92.3			93.4			92.7
Effect of catastrophe losses		(0.2	)		3.4			6.6			2.2			21.1			3.1			1.9			2.1			3.0			7.2
Effect of prior year non-catastrophe reserve reestimates		(3.0	)		(5.1	)		(2.1	)		(2.2	)		(4.0	)		(3.8	)		(2.3	)		(1.5	)		(3.2	)		(2.9	)
Effect of the amortization of purchased intangible assets		0.4			-			-			-			-			-			-			-			0.1			-
Combined ratio		90.3			90.4			96.7			96.2			113.1			91.5			89.7			92.9			93.3			97.0
Policies in Force (in thousands)
Auto		774			767			752			737			731			719			709			697			774			731
Homeowners		356			350			341			333			327			320			314			309			356			327
Other personal lines		125			124			124			121			120			119			117			116			125			120
Subtotal - Encompass		1,255			1,241			1,217			1,191			1,178			1,158			1,140			1,122			1,255			1,178
Commercial lines		301			295			291			286			283			290			283			281			301			283
Other business lines		989			996			997			1,001			1,009			1,025			1,035			1,045			989			1,009
Total		2,545			2,532			2,505			2,478			2,470			2,473			2,458			2,448			2,545			2,470

(1)Relates to the acquisition of Northeast Agency in 2013.

35

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,
		2013			2013			2013			2013			2012			2012			2012			2012			2013			2012
Premiums	$	332		$	306		$	307		$	303		$	299		$	291		$	291		$	287		$	1,248		$	1,168
Contract charges		278			278			272			276			267			272			268			266			1,104			1,073
Net investment income		637			633			633			635			665			632			663			687			2,538			2,647
Periodic settlements and accruals on non-hedge derivative instruments		-			2			5			10			10			15			15			15			17			55
Contract benefits		(490	)		(498	)		(471	)		(458	)		(464	)		(453	)		(462	)		(439	)		(1,917	)		(1,818	)
Interest credited to contractholder funds		(301	)		(302	)		(315	)		(336	)		(347	)		(357	)		(362	)		(368	)		(1,254	)		(1,434	)
Amortization of deferred policy acquisition costs		(80	)		(109	)		(65	)		(76	)		(71	)		(117	)		(76	)		(86	)		(330	)		(350	)
Operating costs and expenses		(145	)		(132	)		(140	)		(148	)		(152	)		(147	)		(135	)		(142	)		(565	)		(576	)
Restructuring and related charges		-			(4	)		(1	)		(2	)		-			-			-			-			(7	)		-
Income tax expense on operations		(71	)		(47	)		(68	)		(60	)		(63	)		(39	)		(64	)		(70	)		(246	)		(236	)
Operating income		160			127			157			144			144			97			138			150			588			529
Realized capital gains and losses, after-tax		9			(12	)		37			12			37			(36	)		5			(14	)		46			(8	)
Valuation changes on embedded derivatives that are not hedged, after-tax		(3	)		(10	)		3			(6	)		(6	)		97			(3	)		(6	)		(16	)		82
DAC and DSI amortization relating to realized capital gains and losses and valuation changes on embedded derivatives that are not hedged, after-tax		(3	)		1			(4	)		1			(4	)		(28	)		-			(10	)		(5	)		(42	)
DAC and DSI unlocking relating to realized capital gains and losses, after-tax		-			7			-			-			-			4			-			-			7			4
Reclassification of periodic settlements and accruals on non-hedge derivative instruments, after-tax		-			(1	)		(4	)		(6	)		(7	)		(9	)		(10	)		(10	)		(11	)		(36	)
(Loss) gain on disposition of operations, after-tax		(44	)		(472	)		1			1			2			6			2			2			(514	)		12
Net income (loss) available to common shareholders (1)	$	119		$	(360	)	$	190		$	146		$	166		$	131		$	132		$	112		$	95		$	541

(1)Net income available to common shareholders relating to the Lincoln Benefit Life business being sold was approximately $140 million in 2013.

36

THE ALLSTATE CORPORATION

HISTORICAL ALLSTATE FINANCIAL RESULTS

($ in millions)

		As of or for the Year Ended December 31,
		2013			2012		2011		2010		2009
Premiums	$	1,248	$		1,168	$	1,190	$	1,138	$	969
Contract charges		1,104			1,073		1,048		1,030		989
Net investment income		2,538			2,647		2,716		2,853		3,064
Periodic settlements and accruals on non-hedge derivative instruments		17			55		70		51		14
Contract benefits		(1,917)			(1,818)		(1,761)		(1,815)		(1,617)
Interest credited to contractholder funds		(1,254)			(1,434)		(1,617)		(1,798)		(2,038)
Amortization of deferred policy acquisition costs		(330)			(350)		(343)		(236)		(337)
Operating costs and expenses		(565)			(576)		(555)		(568)		(535)
Restructuring and related charges		(7)			-		(1)		3		(25)
Income tax expense on operations		(246)			(236)		(240)		(214)		(148)
Operating income		588			529		507		444		336
Realized capital gains and losses, after-tax		46			(8)		250		(337)		(417)
Valuation changes on embedded derivatives that are not hedged, after-tax		(16)			82		(12)		-		-
DAC and DSI amortization relating to realized capital gains and losses and valuation changes on embedded derivatives that are not hedged, after-tax		(5)			(42)		(108)		(29)		(153)
DAC and DSI unlocking relating to realized capital gains and losses, after-tax		7			4		3		(12)		(219)
Reclassification of periodic settlements and accruals on non-hedge derivative instruments, after-tax		(11)			(36)		(45)		(33)		(9)
(Loss) gain on disposition of operations, after-tax		(514)			12		(5)		9		10
Net income (loss)	$	95	$		541	$	590	$	42	$	(452)
Life insurance in force, net of reinsurance	$	346,202	(1)	$	326,169	$	306,397	$	294,149	$	281,961

(1)      Estimated using the most available information.

37

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,
		2013			2013			2013			2013			2012			2012			2012			2012
Return on Attributed Equity
Numerator:
Net income available to common shareholders(1)	$	95		$	142		$	633		$	575		$	541		$	510		$	571		$	600
Denominator:
Beginning attributed equity (2)	$	8,446		$	8,291		$	7,737		$	7,475		$	7,230		$	7,044		$	6,868		$	6,568
Ending attributed equity		7,273			7,819			8,224			8,617			8,446			8,291			7,737			7,475
Average attributed equity (3)	$	7,860		$	8,055		$	7,981		$	8,046		$	7,838		$	7,668		$	7,303		$	7,022
Return on attributed equity		1.2	%		1.8	%		7.9	%		7.1	%		6.9	%		6.7	%		7.8	%		8.5	%
Operating Income Return on Attributed Equity
Numerator:
Operating income (1)	$	588		$	572		$	542		$	523		$	529		$	515		$	547		$	544
Denominator:
Beginning attributed equity (2)	$	8,446		$	8,291		$	7,737		$	7,475		$	7,230		$	7,044		$	6,868		$	6,568
Unrealized net capital gains and losses		1,678			1,666			1,240			1,073			842			776			792			656
Adjusted ending attributed equity		6,768			6,625			6,497			6,402			6,388			6,268			6,076			5,912
Ending attributed equity		7,273			7,819			8,224			8,617			8,446			8,291			7,737			7,475
Unrealized net capital gains and losses		946			1,076			1,120			1,702			1,678			1,666			1,240			1,073
Adjusted ending attributed equity		6,327			6,743			7,104			6,915			6,768			6,625			6,497			6,402
Average adjusted attributed equity (3)	$	6,548		$	6,684		$	6,801		$	6,659		$	6,578		$	6,447		$	6,287		$	6,157
Operating income return on attributed equity		9.0	%		8.6	%		8.0	%		7.9	%		8.0	%		8.0	%		8.7	%		8.8	%

(1)Net income available to common shareholders and operating income reflect a trailing twelve-month period.

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

(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.

38

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,
		2013		2013		2013		2013		2012		2012		2012		2012		2013		2012
PREMIUMS AND CONTRACT CHARGES - BY PRODUCT
Underwritten Products
Traditional life insurance premiums	$	136	$	120	$	119	$	116	$	123	$	117	$	117	$	113	$	491	$	470
Accident and health insurance premiums		181		180		179		180		167		164		160		162		720		653
Interest-sensitive life insurance contract charges		273		272		268		273		265		267		263		260		1,086		1,055
		590		572		566		569		555		548		540		535		2,297		2,178
Annuities
Immediate annuities with life contingencies premiums		15		6		9		7		9		10		14		12		37		45
Other fixed annuity contract charges		5		6		4		3		2		5		5		6		18		18
		20		12		13		10		11		15		19		18		55		63
Total	$	610	$	584	$	579	$	579	$	566	$	563	$	559	$	553	$	2,352	$	2,241
PREMIUMS AND CONTRACT CHARGES - BY DISTRIBUTION CHANNEL
Allstate agencies (1)	$	294	$	283	$	281	$	276	$	278	$	261	$	272	$	266	$	1,134	$	1,077
Workplace enrolling agents		195		195		189		188		180		174		170		170		767		694
Other (2)		121		106		109		115		108		128		117		117		451		470
Total	$	610	$	584	$	579	$	579	$	566	$	563	$	559	$	553	$	2,352	$	2,241
PREMIUMS AND CONTRACT CHARGES - BY PRODUCT INCLUDED IN LINCOLN  BENEFIT LIFE COMPANY SALE (3)
Underwritten Products
Traditional life insurance premiums	$	7	$	4	$	6	$	5	$	7	$	7	$	10	$	6	$	22	$	30
Accident and health insurance premiums		7		6		5		6		6		6		6		6		24		24
Interest-sensitive life insurance contract charges		73		71		70		74		69		80		64		67		288		280
		87		81		81		85		82		93		80		79		334		334
Annuities
Immediate annuities with life contingencies premiums		-		-		-		-		-		-		-		-		-		-
Other fixed annuity contract charges		2		2		1		2		1		2		2		2		7		7
		2		2		1		2		1		2		2		2		7		7
Total	$	89	$	83	$	82	$	87	$	83	$	95	$	82	$	81	$	341	$	341
ISSUED LIFE INSURANCE POLICIES BY DISTRIBUTION CHANNEL(4)
Allstate agencies (1)		42,286		35,537		34,074		36,421		50,428		32,076		30,544		29,714		148,318		142,762
Other		146		447		618		879		1,006		766		780		876		2,090		3,428
Total		42,432		35,984		34,692		37,300		51,434		32,842		31,324		30,590		150,408		146,190
ALLSTATE BENEFITS NEW BUSINESS WRITTEN PREMIUMS (5)	$	164	$	59	$	64	$	52	$	136	$	62	$	59	$	53	$	339	$	310

(1)Includes products directly sold through call centers and internet.

(2)Primarily represents independent master brokerage agencies, and to a lesser extent, specialized brokers.

(3)Amounts are included in counts above.

(4)Excludes Allstate Benefits and non-proprietary products.

(5)New business written premiums reflect annualized premiums at initial customer enrollment (including new accounts and new employees or policies of existing accounts), reduced by an estimate for certain policies that are expected to lapse. A significant portion of Allstate Benefits business is seasonally written in the fourth quarter during many clients’ annual employee benefits enrollment.

39

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,
		2013		2013		2013		2013		2012		2012		2012		2012		2013		2012
Beginning balance	$	24,476	$	36,357	$	38,807	$	39,319	$	40,110	$	40,832	$	41,603	$	42,332	$	39,319	$	42,332
Deposits
Fixed annuities		276		218		281		287		318		272		185		153		1,062		928
Interest-sensitive life insurance		334		330		328		386		357		323		335		332		1,378		1,347
Total deposits		610		548		609		673		675		595		520		485		2,440		2,275
Interest credited		310		321		314		350		362		213		369		379		1,295		1,323
Benefits, withdrawals, maturities and other adjustments
Benefits		(349)		(392)		(399)		(395)		(434)		(341)		(331)		(357)		(1,535)		(1,463)
Surrenders and partial withdrawals		(756)		(807)		(845)		(891)		(1,157)		(941)		(949)		(943)		(3,299)		(3,990)
Maturities of and interest payments on institutional products		-		(1)		(1,797)		(1)		(48)		(1)		(88)		(1)		(1,799)		(138)
Contract charges		(282)		(279)		(274)		(277)		(272)		(264)		(266)		(264)		(1,112)		(1,066)
Net transfers from separate accounts		4		2		5		1		4		3		2		2		12		11
Other adjustments		(47)		10		(63)		28		79		14		(28)		(30)		(72)		35
Total benefits, withdrawals, maturities and other adjustments		(1,430)		(1,467)		(3,373)		(1,535)		(1,828)		(1,530)		(1,660)		(1,593)		(7,805)		(6,611)
Contractholder funds classified as held for sale		338		(11,283)		-		-		-		-		-		-		(10,945)		-
Ending balance	$	24,304	$	24,476	$	36,357	$	38,807	$	39,319	$	40,110	$	40,832	$	41,603	$	24,304	$	39,319

40

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,
		2013		2013		2013		2013		2012		2012		2012		2012		2013		2012
Benefit spread
Premiums	$	332	$	306	$	307	$	303	$	299	$	291	$	291	$	287	$	1,248	$	1,168
Cost of insurance contract charges (1)		184		182		179		180		173		180		173		170		725		696
Contract benefits excluding the implied interest on immediate annuities with life contingencies (2)		(359)		(365)		(341)		(325)		(331)		(318)		(326)		(305)		(1,390)		(1,280)
Total benefit spread		157		123		145		158		141		153		138		152		583		584
Investment spread
Net investment income		637		633		633		635		665		632		663		687		2,538		2,647
Implied interest on immediate annuities with life contingencies (2)		(131)		(133)		(130)		(133)		(133)		(135)		(136)		(134)		(527)		(538)
Interest credited to contractholder funds		(305)		(317)		(311)		(345)		(357)		(215)		(366)		(378)		(1,278)		(1,316)
Total investment spread		201		183		192		157		175		282		161		175		733		793
Surrender charges and contract maintenance expense fees (1)		94		96		93		96		94		92		95		96		379		377
Realized capital gains and losses		14		(16)		57		19		56		(56)		8		(21)		74		(13)
Amortization of deferred policy acquisition costs		(85)		(97)		(71)		(75)		(77)		(146)		(77)		(101)		(328)		(401)
Operating costs and expenses		(145)		(132)		(140)		(148)		(152)		(147)		(135)		(142)		(565)		(576)
Restructuring and related charges		-		(4)		(1)		(2)		-		-		-		-		(7)		-
(Loss) gain on disposition of operations		(44)		(646)		1		2		3		9		3		3		(687)		18
Income tax benefit (expense)		(73)		133		(86)		(61)		(74)		(56)		(61)		(50)		(87)		(241)
Net (loss) income available to common shareholders	$	119	$	(360)	$	190	$	146	$	166	$	131	$	132	$	112	$	95	$	541
Benefit spread by product group
Life insurance	$	101	$	60	$	75	$	86	$	79	$	90	$	87	$	91	$	322	$	347
Accident and health insurance		78		85		86		89		82		76		72		73		338		303
Annuities		(22)		(22)		(16)		(17)		(20)		(13)		(21)		(12)		(77)		(66)
Total benefit spread	$	157	$	123	$	145	$	158	$	141	$	153	$	138	$	152	$	583	$	584
Investment spread by product group
Annuities and institutional products	$	95	$	100	$	88	$	59	$	85	$	39	$	71	$	97	$	342	$	292
Life insurance		28		25		25		27		21		23		20		18		105		82
Accident and health insurance		6		6		7		6		6		7		6		6		25		25
Net investment income on investments supporting capital		75		69		67		74		72		64		68		64		285		268
Investment spread before valuation changes on embedded derivatives that are not hedged		204		200		187		166		184		133		165		185		757		667
Valuation changes on derivatives embedded in equity- indexed annuity contracts that are not hedged		(3)		(17)		5		(9)		(9)		149		(4)		(10)		(24)		126
Total investment spread	$	201	$	183	$	192	$	157	$	175	$	282	$	161	$	175	$	733	$	793
(1) Reconciliation of contract charges
Cost of insurance contract charges	$	184	$	182	$	179	$	180	$	173	$	180	$	173	$	170	$	725	$	696
Surrender charges and contract maintenance expense fees		94		96		93		96		94		92		95		96		379		377
Total contract charges	$	278	$	278	$	272	$	276	$	267	$	272	$	268	$	266	$	1,104	$	1,073
(2) Reconciliation of contract benefits
Contract benefits excluding the implied interest on immediate annuities with life contingencies	$	(359)	$	(365)	$	(341)	$	(325)	$	(331)	$	(318)	$	(326)	$	(305)	$	(1,390)	$	(1,280)
Implied interest on immediate annuities with life contingencies		(131)		(133)		(130)		(133)		(133)		(135)		(136)		(134)		(527)		(538)
Total contract benefits	$	(490)	$	(498)	$	(471)	$	(458)	$	(464)	$	(453)	$	(462)	$	(439)	$	(1,917)	$	(1,818)

41

THE ALLSTATE CORPORATION

ALLSTATE FINANCIAL WEIGHTED AVERAGE INVESTMENT SPREADS

	Three months ended December 31, 2013(1)						Three months ended December 31, 2012
	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	5.2	%	3.9	%	1.3	%	5.1	%	4.0	%	1.1	%
Deferred fixed annuities and institutional products	4.2		2.9		1.3		4.8		3.2		1.6
Immediate fixed annuities with and without life contingencies	7.8		6.0		1.8		6.9		6.1		0.8
Investments supporting capital, traditional life and other products	4.1		n/a		n/a		4.1		n/a		n/a

	Twelve months ended December 31, 2013(1)						Twelve months ended December 31, 2012
	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	5.1	%	3.8	%	1.3	%	5.2	%	4.0	%	1.2	%
Deferred fixed annuities and institutional products	4.5		2.9		1.6		4.6		3.2		1.4
Immediate fixed annuities with and without life contingencies	6.9		6.0		0.9		6.9		6.1		0.8
Investments supporting capital, traditional life and other products	4.0		n/a		n/a		4.0		n/a		n/a

(1)For purposes of these calculations, investments, reserves and contractholder funds classified as held for sale are included.

42

THE ALLSTATE CORPORATION

ALLSTATE FINANCIAL SUPPLEMENTAL PRODUCT INFORMATION

($ in millions)

		As of December 31, 2013				Twelve months ended December 31, 2013	Twelve months ended
							Dec.		Sept.		June		March		Dec.
				Attributed equity			2013		2013		2013		2013		2012
		Reserves and		excluding unrealized			Operating income return
		Contractholder funds(7)		capital gains/losses (3)(4)		Operating income (5)	on attributed equity (%)
Underwritten products
Life insurance	$	14,492	$	2,774	$	245	9.0	%	8.1	%	8.6	%	8.9	%	9.0	%
Accident and health insurance		2,142		626		90	14.8		15.5		15.5		13.5		12.7
Subtotal		16,634		3,400		335	10.1		9.4		9.8		9.8		9.7
Annuities and institutional products:
Deferred Annuities		20,202		1,732		211	11.5		12.0		11.3		10.9		9.8
Immediate Annuities:
Sub-standard structured settlements and group pension terminations (1)		5,074		1,089		(5)	(0.5)		(1.3)		(1.8)		(1.9)		(0.7)
Standard structured settlements and SPIA (2)		7,530		615		51	9.1		7.4		5.5		5.1		9.0
Subtotal		12,604		1,704		46	2.8		1.6		0.7		0.4		2.4
Institutional products		89		12		(4)
Subtotal		32,895		3,448		253	7.3		7.1		6.2		6.0		6.5
Loss on sale of Lincoln Benefit Life Company		-		(521)		-
Total Allstate Financial (6)	$	49,529	$	6,327	$	588	9.0		8.6		8.0		7.9		8.0

		Twelve months ended December 31, 2013
		Life		Accident and		Annuities and		Allstate
		insurance		health insurance		institutional products		Financial
Operating income	$	245	$	90	$	253		$	588
Realized capital gains and losses, after-tax		(5)		(1)		52		46
Valuation changes on embedded derivatives that are not hedged, after-tax		-		-		(16)		(16)
DAC and DSI amortization relating to realized capital gains and losses and valuation changes on embedded derivatives that are not hedged, after-tax		(4)		-		(1)		(5)
DAC and DSI unlocking relating to realized capital gains and losses, after-tax		(1)		-		8		7
Reclassification of periodic settlements and accruals on non-hedge derivative instruments, after-tax		1		-		(12)		(11)
(Loss) gain on disposition of operations, after-tax		(1)		-		8		7
Loss on sale of Lincoln Benefit Life Company		-		-		-		(521)
Net loss available to common shareholders	$	235	$	89	$	292	$	95

(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 and the applicable equity for American Heritage Life Investment Corporation.
(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 prior quarter statutory capital. 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. Operating income reflects a trailing twelve-month period.
(6)	Reserves and contractholder funds included with the sale of Lincoln Benefit Life Company transaction and the attributed equity comprise 28% of life insurance and 37% of deferred annuity. Accident and health insurance reserves (long-term care) included with the sale have attributed equity of approximately $27 million and are mostly reinsured with a third party.
(7)	Includes reserves and contractholder funds classified as held for sale.

43

THE ALLSTATE CORPORATION

ALLSTATE FINANCIAL INSURANCE POLICIES AND ANNUITIES IN FORCE (1)

(in thousands)

	Dec. 31,	Sept. 30,	June 30,	March 31,	Dec. 31,	Sept. 30,	June 30,	March 31,
	2013	2013	2013	2013	2012	2012	2012	2012
ALLSTATE FINANCIAL INSURANCE POLICIES AND ANNUITIES IN FORCE BY PRODUCT
Underwritten products
Life insurance	2,567	2,572	2,574	2,572	2,566	2,564	2,573	2,577
Accident and health insurance	2,342	2,322	2,322	2,338	2,117	2,114	2,094	2,077
	4,909	4,894	4,896	4,910	4,683	4,678	4,667	4,654
Annuities
Deferred annuities	346	353	362	373	385	398	408	421
Immediate annuities	112	112	113	114	114	115	115	115
	458	465	475	487	499	513	523	536
Total	5,367	5,359	5,371	5,397	5,182	5,191	5,190	5,190
ALLSTATE FINANCIAL INSURANCE POLICIES AND ANNUITIES IN FORCE BY SOURCE OF BUSINESS
Allstate Agencies (2)	1,939	1,938	1,936	1,930	1,929	1,924	1,925	1,925
Allstate Benefits	2,762	2,741	2,741	2,757	2,528	2,524	2,506	2,490
Other (3)	666	680	694	710	725	743	759	775
Total	5,367	5,359	5,371	5,397	5,182	5,191	5,190	5,190
INSURANCE POLICIES AND ANNUITIES IN FORCE INCLUDED IN LINCOLN BENEFIT LIFE COMPANY SALE (4)
Life insurance	145	148	150	152	155	156	158	160
Deferred annuities	128	132	138	144	151	156	161	168
Total	273	280	288	296	306	312	319	328

(1)	Allstate Financial insurance policies and annuities in force reflect the number of contracts in force excluding sold blocks of business that remain on the balance sheet due to the dispositions of the business being effected through reinsurance arrangements. Also excluded are long-term care contracts for which the morbidity risk is 100% reinsured. Policy counts associated with our voluntary employee benefits group business reflect certificate counts as opposed to group counts.
(2)	Excludes Allstate Benefits products sold through Allstate Agencies, which are included in the Allstate Benefits line.
(3)	Primarily business sold by independent master brokerage agencies, banks/broker-dealers and specialized structured settlement brokers.
(4)	Amounts are included in counts above.

44

THE ALLSTATE CORPORATION

ALLSTATE LIFE AND RETIREMENT AND ALLSTATE BENEFITS RESULTS AND PRODUCT INFORMATION

($ in millions)

		For the twelve months ended December 31, 2013						For the twelve months ended December 31, 2012						For the twelve months ended December 31, 2011
						Allstate						Allstate						Allstate
		Allstate Life and		Allstate		Financial		Allstate Life and		Allstate		Financial		Allstate Life and		Allstate		Financial
		Retirement		Benefits		Segment		Retirement		Benefits		Segment		Retirement		Benefits		Segment
Premiums	$	518	$	730	$	1,248	$	505	$	663	$	1,168	$	539	$	651	$	1,190
Contract charges		1,009		95		1,104		987		86		1,073		968		80		1,048
Net investment income		2,466		72		2,538		2,575		72		2,647		2,645		71		2,716
Periodic settlements and accruals on non-hedge derivative instruments		17		-		17		55		-		55		70		-		70
Contract benefits		(1,512)		(405)		(1,917)		(1,434)		(384)		(1,818)		(1,417)		(344)		(1,761)
Interest credited to contractholder funds		(1,219)		(35)		(1,254)		(1,399)		(35)		(1,434)		(1,583)		(34)		(1,617)
Amortization of deferred policy acquisition costs		(228)		(102)		(330)		(261)		(89)		(350)		(267)		(76)		(343)
Operating costs and expenses		(366)		(199)		(565)		(389)		(187)		(576)		(366)		(189)		(555)
Restructuring and related charges		(6)		(1)		(7)		-		-		-		(1)		-		(1)
Income tax expense on operations		(192)		(54)		(246)		(191)		(45)		(236)		(185)		(55)		(240)
Operating income		487		101		588		448		81		529		403		104		507
Realized capital gains and losses, after-tax		47		(1)		46		(10)		2		(8)		248		2		250
Valuation changes on embedded derivatives that are not hedged, after-tax		(16)		-		(16)		82		-		82		(12)		-		(12)
DAC and DSI amortization relating to realized capital gains and losses and valuation changes on embedded derivatives that are not hedged, after-tax		(5)		-		(5)		(42)		-		(42)		(108)		-		(108)
DAC and DSI unlocking relating to realized capital gains and losses, after-tax		7		-		7		4		-		4		3		-		3
Reclassification of periodic settlements and accruals on non-hedge derivative instruments, after-tax		(11)		-		(11)		(36)		-		(36)		(45)		-		(45)
(Loss) gain on disposition of operations, after-tax		(514)		-		(514)		12		-		12		(5)		-		(5)
Net (loss) income	$	(5)	$	100	$	95	$	458	$	83	$	541	$	484	$	106	$	590
Premiums and Contract Charges - by Product
Underwritten Product
Traditional life insurance premiums	$	455	$	36	$	491	$	434	$	36	$	470	$	406	$	35	$	441
Accident and health insurance premiums		26		694		720		26		627		653		27		616		643
Interest-sensitive life insurance contract charges		991		95		1,086		969		86		1,055		935		80		1,015
		1,472		825		2,297		1,429		749		2,178		1,368		731		2,099
Annuities
Immediate annuities with life contingencies premiums		37		-		37		45		-		45		106		-		106
Other fixed annuity contract charges		18		-		18		18		-		18		33		-		33
		55		-		55		63		-		63		139		-		139
Total life and annuity premiums and contract charges	$	1,527	$	825	$	2,352	$	1,492	$	749	$	2,241	$	1,507	$	731	$	2,238
Benefit Spread by Product Group
Life Insurance	$	301	$	21	$	322	$	330	$	17	$	347	$	338	$	17	$	355
Accident and health insurance		(18)		356		338		(9)		312		303		(9)		338		329
Annuities		(77)		-		(77)		(66)		-		(66)		(55)		-		(55)
Total benefit spread	$	206	$	377	$	583	$	255	$	329	$	584	$	274	$	355	$	629
Investment Spread by Product Group
Annuities and institutional products	$	342	$	-	$	342	$	292	$	-	$	292	$	188	$	-	$	188
Life insurance		93		12		105		72		10		82		42		12		54
Accident and health insurance		14		11		25		13		12		25		8		11		19
Allstate Bank products		-		-		-		-		-		-		22		-		22
Net investment income on investments supporting capital		271		14		285		253		15		268		251		14		265
Investment spread before valuation changes on embedded derivatives that are not hedged		720		37		757		630		37		667		511		37		548
Valuation changes on derivatives embedded in equity-indexed annuity contracts that are not hedged		(24)		-		(24)		126		-		126		(18)		-		(18)
Total investment spread	$	696	$	37	$	733	$	756	$	37	$	793	$	493	$	37	$	530

45

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,
		2013		2013		2013		2013		2012		2012		2012		2012		2013		2012
Net investment income	$	7	$	8	$	8	$	7	$	6	$	9	$	11	$	11	$	30	$	37
Operating costs and expenses (1)		(258)		(159)		(106)		(95)		(96)		(90)		(107)		(86)		(618)		(379)
Income tax benefit on operations		90		58		37		35		35		34		33		34		220		136
Preferred stock dividends		(11)		(6)		-		-		-		-		-		-		(17)		-
Operating loss		(172)		(99)		(61)		(53)		(55)		(47)		(63)		(41)		(385)		(206)
Realized capital gains and losses, after-tax		(1)		1		-		-		3		-		-		-		-		3
Loss on extinguishment of debt, after-tax		(1)		(6)		(312)		-		-		-		-		-		(319)		-
Postretirement benefits curtailment gain, after-tax		-		118		-		-		-		-		-		-		118		-
Net (loss) income available to common shareholders	$	(174)	$	14	$	(373)	$	(53)	$	(52)	$	(47)	$	(63)	$	(41)	$	(586)	$	(203)

(1) Includes pension settlement loss of $231 million recorded for the twelve months ended December 31, 2013.

46

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,
		2013		2013		2013		2013		2012		2013		2013(1)		2013		2013		2012
Fixed income securities, at fair value:
Tax-exempt	$	4,711	$	5,484	$	5,754	$	6,470	$	7,419	$	2	$	1	$	2	$	2	$	3
Taxable		24,867		22,920		22,359		22,635		22,262		29,646		30,216		41,347		45,176		45,793
Equity securities, at fair value		4,396		4,156		3,932		4,037		3,671		701		656		573		402		366
Mortgage loans		429		431		479		488		493		4,292		4,386		5,934		5,946		6,077
Limited partnership interests		2,898		3,043		2,991		2,994		2,991		2,064		2,044		1,946		1,933		1,924
Short-term, at fair value		1,002		1,056		1,182		1,171		912		668		629		821		1,391		907
Other		1,335		1,102		813		600		467		1,732		1,672		1,958		2,003		1,929
Total	$	39,638	$	38,192	$	37,510	$	38,395	$	38,215	$	39,105	$	39,604	$	52,581	$	56,853	$	56,999
Fixed income securities, at amortized cost:
Tax-exempt	$	4,625	$	5,367	$	5,617	$	6,168	$	7,061	$	2	$	1	$	2	$	2	$	3
Taxable		24,424		22,464		21,930		21,721		21,311		28,295		28,648		39,371		41,582		42,043
Ratio of fair value to amortized cost		101.8%		102.1%		102.1%		104.4%		104.6%		104.8%		105.5%		105.0%		108.6%		108.9%
Equity securities, at cost	$	3,866	$	3,769	$	3,702	$	3,449	$	3,250	$	607	$	601	$	535	$	328	$	327
Short-term, at amortized cost		1,002		1,056		1,182		1,171		912		668		629		821		1,391		907
	CORPORATE AND OTHER										CONSOLIDATED
		Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,		Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,
		2013		2013		2013		2013		2012		2013		2013		2013		2013		2012
Fixed income securities, at fair value:
Tax-exempt	$	570	$	576	$	578	$	604	$	616	$	5,283	$	6,061	$	6,334	$	7,076	$	8,038
Taxable		1,114		1,098		999		919		924		55,627		54,234		64,705		68,730		68,979
Equity securities, at fair value		-		-		-		-		-		5,097		4,812		4,505		4,439		4,037
Mortgage loans		-		-		-		-		-		4,721		4,817		6,413		6,434		6,570
Limited partnership interests		5		4		4		4		7		4,967		5,091		4,941		4,931		4,922
Short-term, at fair value		723		1,009		643		607		517		2,393		2,694		2,646		3,169		2,336
Other		-		-		-		-		-		3,067		2,774		2,771		2,603		2,396
Total	$	2,412	$	2,687	$	2,224	$	2,134	$	2,064	$	81,155	$	80,483	$	92,315	$	97,382	$	97,278
Fixed income securities, at amortized cost:
Tax-exempt	$	552	$	556	$	558	$	572	$	580	$	5,179	$	5,924	$	6,177	$	6,742	$	7,644
Taxable		1,110		1,093		997		912		917		53,829		52,205		62,298		64,215		64,271
Ratio of fair value to amortized cost		101.3%		101.5%		101.4%		102.6%		102.9%		103.2%		103.7%		103.7%		106.8%		107.1%
Equity securities, at cost	$	-	$	-	$	-	$	-	$	-	$	4,473	$	4,370	$	4,237	$	3,777	$	3,577
Short-term, at amortized cost		723		1,009		643		607		517		2,393		2,694		2,646		3,169		2,336

(1) Excludes investments classified as held for sale that totaled $12.0 billion and $12.2 billion as of December 31, 2013 and September 30, 2013 respectively.

47

THE ALLSTATE CORPORATION

INVESTMENT PORTFOLIO DETAILS

($ in millions)

		Financial statement classification as of December 31, 2013
								Limited
		Fixed income		Equity		Mortgage		partnership		Short-
		securities		securities		loans		interests		term		Other		Total
Infrastructure and real assets
Infrastructure and real assets - debt (1)	$	10,388	$	-	$	-	$	-	$	-	$	-	$	10,388
Infrastructure and real assets - equity		-		746		-		526		-		-		1,272
Infrastructure and real assets - other (2)		-		-		-		-		-		169		169
		10,388		746		-		526		-		169		11,829
Real estate
Real estate - debt		2,304		-		4,721		-		-		-		7,025
Real estate - equity		-		173		-		1,687		-		126		1,986
Tax credit funds		-		-		-		626		-		-		626
		2,304		173		4,721		2,313		-		126		9,637
Consumer goods (cyclical and non-cyclical) (1)		9,329		786		-		-		-		-		10,115
Banking & financial services
Banking		3,381		192		-		-		-		-		3,573
Financial services (1)		3,074		224		-		-		-		-		3,298
Credit card and student loan ABS		1,178		-		-		-		-		-		1,178
Consumer auto ABS		1,244		-		-		-		-		-		1,244
		8,877		416		-		-		-		-		9,293
Municipal - General obligation, revenue and taxable		8,723		-		-		-		-		-		8,723
Government & agencies
U.S. government and agencies		2,913		-		-		-		752		-		3,665
Foreign government		1,482		-		-		-		-		-		1,482
		4,395		-		-		-		752		-		5,147
Technology and communications
Communications		2,939		238		-		-		-		-		3,177
Technology		2,279		293		-		-		-		-		2,572
		5,218		531		-		-		-		-		5,749
Capital goods		4,420		295		-		-		-		-		4,715
Basic & other industries
Basic industry		2,442		184		-		-		-		-		2,626
Other industries (1)		734		-		-		-		-		-		734
		3,176		184		-		-		-		-		3,360
Transportation (1)		1,642		95		-		-		-		-		1,737
ABS other		2,096		-		-		-		-		-		2,096
Private equity		-		-		-		2,036		-		-		2,036
Emerging markets
Fixed income funds		-		543		-		-		-		-		543
Foreign government		342		-		-		-		-		-		342
Equity index based funds		-		547		-		-		-		-		547
		342		1,090		-		-		-		-		1,432
Other equity market index based funds		-		781		-		-		-		-		781
Other funds		-		-		-		92		-		-		92
Other (3)		-		-		-		-		1,641		2,772		4,413
Total investments	$	60,910	$	5,097	$	4,721	$	4,967	$	2,393	$	3,067	$	81,155

(1)	Includes municipal bonds
(2)	Direct ownership of timber was previously reported as a limited partnership.
(3)	Other includes derivatives, policy loans, agent loans, bank loans and short-term investments.

48

THE ALLSTATE CORPORATION

LIMITED PARTNERSHIP INVESTMENTS

($ in millions)

		As of or for the three months ended
		Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,		Sept. 30,		June 30,		March 31,
		2013		2013		2013		2013		2012		2012		2012		2012
Investment position
Accounting basis
Cost method	$	1,443	$	1,435	$	1,441	$	1,425	$	1,406	$	1,456	$	1,363	$	1,278
Equity method (1)		3,524		3,656		3,500		3,506		3,516		3,518		3,331		3,359
Total	$	4,967	$	5,091	$	4,941	$	4,931	$	4,922	$	4,974	$	4,694	$	4,637
Cost method-fair value (2)	$	1,835	$	1,806	$	1,795	$	1,748	$	1,714	$	1,756	$	1,656	$	1,534
Underlying investment
Private equity / debt funds	$	2,562	$	2,485	$	2,457	$	2,423	$	2,351	$	2,300	$	2,072	$	1,995
Real estate funds		1,687		1,666		1,658		1,635		1,563		1,524		1,358		1,230
Other (3)		718		940		826		873		1,008		1,150		1,264		1,412
Total	$	4,967	$	5,091	$	4,941	$	4,931	$	4,922	$	4,974	$	4,694	$	4,637
Segment
Property-Liability	$	2,898	$	3,043	$	2,991	$	2,994	$	2,991	$	3,106	$	2,877	$	2,889
Allstate Financial		2,064		2,044		1,946		1,933		1,924		1,860		1,806		1,729
Corporate and Other		5		4		4		4		7		8		11		16
Total	$	4,967	$	5,091	$	4,941	$	4,931	$	4,922	$	4,974	$	4,694	$	4,637
Total Income
Accounting basis
Cost method	$	80	$	48	$	45	$	26	$	58	$	17	$	23	$	13
Equity method		122		58		81		81		52		5		84		96
Total (3)	$	202	$	106	$	126	$	107	$	110	$	22	$	107	$	109
Underlying investment
Private equity / debt funds	$	140	$	68	$	58	$	68	$	83	$	18	$	73	$	72
Real estate funds		61		49		77		34		36		17		39		31
Other (4)		1		(11)		(9)		5		(9)		(13)		(5)		6
Total	$	202	$	106	$	126	$	107	$	110	$	22	$	107	$	109
Segment
Property-Liability	$	130	$	69	$	89	$	77	$	68	$	11	$	68	$	41
Allstate Financial		71		37		37		30		42		11		39		67
Corporate and Other		1		-		-		-		-		-		-		1
Total	$	202	$	106	$	126	$	107	$	110	$	22	$	107	$	109

(1)As of December 31, 2013, valuations of EMA limited partnerships include approximately $450 million of cumulative pre-tax appreciation that has been recognized in earnings but has not been distributed to investors.

(2)The fair value of cost method limited partnerships is determined using reported net asset values of the underlying funds.

(3)Higher EMA limited partnership income resulted from favorable equity and real estate valuations which increased the carrying value of the partnerships, while cost method limited partnerships experienced an increase in earnings distributed by the partnerships.

49

THE ALLSTATE CORPORATION

UNREALIZED NET CAPITAL GAINS AND LOSSES ON SECURITY PORTFOLIO BY TYPE

($ in millions)

		December 31, 2013					September 30, 2013					June 30, 2013
		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	$	122	$	2,913	104.4	$	156	$	2,881	105.7	$	203	$	3,204	106.8
Municipal		277		8,723	103.3		365		9,611	103.9		496		10,716	104.9
Corporate		1,272		40,603	103.2		1,412		39,697	103.7		1,647		47,616	103.6
Foreign government		88		1,824	105.1		108		1,939	105.9		125		2,224	106.0
Asset-backed securities (“ABS”)		27		4,518	100.6		32		3,421	100.9		9		3,476	100.3
Residential mortgage-backed securities (“RMBS”)		71		1,474	105.1		57		1,844	103.2		62		2,485	102.6
Commercial mortgage-backed securities (“CMBS”)		41		829	105.2		31		875	103.7		18		1,291	101.4
Redeemable preferred stock		4		26	118.2		5		27	122.7		4		27	117.4
Total fixed income securities		1,902		60,910	103.2		2,166		60,295	103.7		2,564		71,039	103.7
Equity securities		624		5,097	114.0		442		4,812	110.1		268		4,505	106.3
Short-term investments		-		2,393	100.0		-		2,694	100.0		-		2,646	100.0
Derivatives		(18)		269	n/a		(19)		217	n/a		(12)		200	n/a
EMA limited partnership interests (2)		(3)		n/a	n/a		(3)		n/a	n/a		-		n/a	n/a
Investments classified as held for sale		190		n/a	n/a		244		n/a	n/a		-		n/a	n/a
Unrealized net capital gains and losses, pre-tax	$	2,695				$	2,830				$	2,820
Amounts recognized for:
Insurance reserves (3)		-					-					(76)
DAC and DSI (4)		(158)					(189)					(199)
Amounts recognized		(158)					(189)					(275)
Deferred income taxes		(891)					(927)					(894)
Unrealized net capital gains and losses, after-tax	$	1,646				$	1,714				$	1,651

		March 31, 2013					December 31, 2012					September 30, 2012
		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	$	297	$	4,257	107.5	$	326	$	4,713	107.4	$	371	$	4,772	108.4
Municipal		929		11,862	108.5		930		13,069	107.7		922		13,970	107.1
Corporate		3,300		49,567	107.1		3,594		48,537	108.0		3,810		48,154	108.6
Foreign government		200		2,365	109.2		227		2,517	109.9		240		2,255	111.9
ABS		18		3,597	100.5		1		3,624	100.0		(30)		3,673	99.2
RMBS		65		2,750	102.4		32		3,032	101.1		4		3,348	100.1
CMBS		36		1,381	102.7		(12)		1,498	99.2		(25)		1,530	98.4
Redeemable preferred stock		4		27	117.4		4		27	117.4		5		27	122.7
Total fixed income securities		4,849		75,806	106.8		5,102		77,017	107.1		5,297		77,729	107.3
Equity securities		662		4,439	117.5		460		4,037	112.9		447		3,876	113.0
Short-term investments		-		3,169	100.0		-		2,336	100.0		-		2,825	100.0
Derivatives		(19)		223	n/a		(22)		133	n/a		(19)		251	n/a
EMA limited partnership interests (2)		8		n/a	n/a		7		n/a	n/a		6		n/a	n/a
Investments classified as held for sale		-		n/a	n/a		-		n/a	n/a		-		n/a	n/a
Unrealized net capital gains and losses, pre-tax	$	5,500				$	5,547				$	5,731
Amounts recognized for:
Insurance reserves (3)		(623)					(771)					(876)
DAC and DSI (4)		(404)					(412)					(420)
Amounts recognized		(1,027)					(1,183)					(1,296)
Deferred income taxes		(1,568)					(1,530)					(1,555)
Unrealized net capital gains and losses, after-tax	$	2,905				$	2,834				$	2,880

(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.

50

THE ALLSTATE CORPORATION

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,
		2013			2013			2013			2013			2012			2012			2012			2012			2013			2012
NET INVESTMENT INCOME
Fixed income securities	$	698		$	721		$	740		$	762		$	793		$	817		$	818		$	806		$	2,921		$	3,234
Equity securities		55			30			39			25			53			29			24			21			149			127
Mortgage loans		82			99			93			98			97			92			92			93			372			374
Limited partnership interests		202			106			126			107			110			22			107			109			541			348
Short-term		1			1			1			2			2			2			1			1			5			6
Other		41			44			39			37			35			33			34			30			161			132
Sub-total		1,079			1,001			1,038			1,031			1,090			995			1,076			1,060			4,149			4,221
Less:  Investment expense		(53)			(51)			(54)			(48)			(57)			(55)			(50)			(49)			(206)			(211)
Net investment income	$	1,026		$	950		$	984		$	983		$	1,033		$	940		$	1,026		$	1,011		$	3,943		$	4,010
PRE-TAX YIELDS (1)
Fixed income securities		4.1	%		4.2	%		4.2	%		4.3	%		4.4	%		4.5	%		4.4	%		4.4	%		4.2	%		4.4	%
Equity securities		4.9			2.8			3.9			2.8			6.1			3.4			2.8			2.2			3.6			3.5
Mortgage loans		5.3			6.2			5.8			6.0			5.7			5.4			5.2			5.2			5.9			5.4
Limited partnership interests		15.9			8.6			10.2			8.7			8.9			1.8			9.2			9.3			10.9			7.3
Total portfolio		4.8			4.5			4.6			4.5			4.7			4.3			4.6			4.6			4.6			4.6
REALIZED CAPITAL GAINS AND LOSSES (PRE-TAX) BY TRANSACTION TYPE
Impairment write-downs	$	(11)		$	(18)		$	(33)		$	(10)		$	(54)		$	(43)		$	(49)		$	(39)		$	(72)		$	(185)
Change in intent write-downs		(19)			(70)			(27)			(27)			-			(3)			(1)			(44)			(143)			(48)
Net other-than-temporary impairment losses recognized in earnings		(30)			(88)			(60)			(37)			(54)			(46)			(50)			(83)			(215)			(233)
Sales		180			59			408			172			261			(24)			70			229			819			536
Valuation of derivative instruments		(5)			-			3			(4)			(12)			-			(10)			11			(6)			(11)
Settlements of derivative instruments		(3)			(12)			11			-			9			(2)			17			11			(4)			35
Total	$	142		$	(41)		$	362		$	131		$	204		$	(72)		$	27		$	168		$	594		$	327
TOTAL RETURN ON INVESTMENT PORTFOLIO (2)		1.1	%		1.0	%		(1.5)	%		1.2	%		1.1	%		2.4	%		1.8	%		2.0	%		1.8	%		7.3	%
AVERAGE INVESTMENT BALANCES (in billions) (3)	$	78.3		$	83.7		$	90.7		$	91.8		$	92.2		$	92.9		$	93.2		$	93.1		$	84.5		$	92.7

(1)Pre-tax yields are calculated as annualized investment income before investment expense (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 and include investments classified as held for sale.  Excluding investments classified as held for sale, pre-tax yield was 4.8% for the three months ended December 31, 2013.

(2)Total return on investment portfolio is calculated from GAAP results including the total of net investment income, realized capital gains and losses, the change in unrealized net capital gains and losses, and the change in the difference between fair value and carrying value of mortgage loans and cost method limited partnerships, divided by the average fair value balances. For purposes of the total return calculation, investments classified as held for sale are included.  Excluding investments classified as held for sale, total return on investment portfolio was 1.2% for the three months ended December 31, 2013.

(3)Average investment balances for the quarter are calculated as the average of the current and prior quarter investment balances. Year-to-date average investment balances are calculated as the average of investment balances at the beginning of the year and the end of each quarter during the year.  For purposes of the average investment balances calculation, unrealized capital gains and losses are excluded and investments classified as held for sale are included.

51

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,		Dec. 31,		Dec. 31,
		2013			2013		2013		2013			2012			2012		2012		2013		2012
NET INVESTMENT INCOME
Fixed income securities:
Tax-exempt	$	35		$	44	$	53	$	61		$	71		$	81	$	82	$	193	$	321
Taxable		178			175		178		188			188			194		192		719		752
Equity securities		51			26		36		23			49			28		22		136		118
Mortgage loans		4			6		5		5			5			5		5		20		21
Limited partnership interests (1)		130			69		89		77			68			11		68		365		188
Short-term		1			1		-		1			2			-		1		3		4
Other		11			11		8		8			5			4		3		38		14
Subtotal		410			332		369		363			388			323		373		1,474		1,418
Less: Investment expense		(28)			(23)		(26)		(22)			(26)			(24)		(21)		(99)		(92)
Net investment income	$	382		$	309	$	343	$	341		$	362		$	299	$	352	$	1,375	$	1,326
Net investment income, after-tax	$	273		$	225	$	259	$	241		$	258		$	220	$	254	$	998	$	964
PRE-TAX YIELDS (2)
Fixed income securities:
Tax-exempt		2.8	%		3.2	%	3.6	%	3.7	%		3.9	%		4.2	%	4.4	%	3.4	%	4.3	%
Equivalent yield for tax-exempt		4.1			4.7		5.2		5.4			5.7			6.1		6.4		5.0		6.3
Taxable		3.0			3.2		3.3		3.5			3.6			3.7		3.7		3.2		3.7
Equity securities		5.3			2.8		4.0		2.8			6.1			3.3		2.7		3.8		3.5
Mortgage loans		4.1			4.4		4.2		4.3			4.1			4.3		4.2		4.2		4.3
Limited partnership interests		17.4			9.3		11.8		10.4			8.9			1.5		9.5		12.2		6.3
Total portfolio		4.3			3.6		4.0		4.0			4.3			3.6		4.2		4.0		3.9
REALIZED CAPITAL GAINS AND LOSSES
(PRE-TAX) BY ASSET TYPE
Fixed income securities:
Tax-exempt	$	35		$	14	$	39	$	47		$	23		$	8	$	(4)	$	135	$	52
Taxable		44			21		17		43			98			1		15		125		109
Equity securities		58			(56)		252		28			25			(14)		13		282		183
Limited partnership interests		(1)			2		(5)		5			1			-		1		1		13
Derivatives and other		(8)			(7)		2		(11)			(4)			(11)		(6)		(24)		(22)
Total	$	128		$	(26)	$	305	$	112		$	143		$	(16)	$	19	$	519	$	335
REALIZED CAPITAL GAINS AND LOSSES
(PRE-TAX) BY TRANSACTION TYPE
Impairment write-downs	$	(6)		$	(8)	$	(17)	$	(8)		$	(41)		$	(31)	$	(43)	$	(39)	$	(134)
Change in intent write-downs		(15)			(63)		(26)		(20)			-			(2)		(1)		(124)		(31)
Net other-than-temporary impairment losses recognized in earnings		(21)			(71)		(43)		(28)			(41)			(33)		(44)		(163)		(165)
Sales		157			52		346		151			187			27		60		706		511
Valuation of derivative instruments		(5)			5		(3)		-			(2)			3		1		(3)		5
Settlements of derivative instruments		(3)			(12)		5		(11)			(1)			(13)		2		(21)		(16)
Total	$	128		$	(26)	$	305	$	112		$	143		$	(16)	$	19	$	519	$	335
AVERAGE INVESTMENT BALANCES (in billions) (3)	$	37.9		$	37.0	$	36.7	$	36.5		$	36.3		$	36.1	$	35.8	$	37.3	$	35.9

(1)As of December 31, 2013, Property-Liability has commitments to invest in additional limited partnership interests totaling $1.48 billion.

(2)Pre-tax yields are calculated as annualized investment income before investment expense (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)Average investment balances for the quarter are calculated as the average of the current and prior quarter investment balances. Year-to-date average investment balances are calculated as the average of investment balances at the end of each quarter during the year.  For purposes of the average investment balances calculation, unrealized capital gains and losses are excluded.

52

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,
		2013			2013		2013		2013			2012			2012		2012		2012		2013		2012
NET INVESTMENT INCOME
Fixed income securities	$	480		$	497	$	503	$	506		$	527		$	532	$	534	$	531	$	1,986	$	2,124
Equity securities		4			4		3		2			4			1		2		2		13		9
Mortgage loans		78			93		88		93			92			87		87		87		352		353
Limited partnership interests (1)		71			37		37		30			42			11		39		67		175		159
Short-term		-			-		-		1			-			1		-		-		1		1
Other		28			28		30		28			29			29		29		27		114		114
Subtotal		661			659		661		660			694			661		691		714		2,641		2,760
Less:  Investment expense		(24)			(26)		(28)		(25)			(29)			(29)		(28)		(27)		(103)		(113)
Net investment income	$	637		$	633	$	633	$	635		$	665		$	632	$	663	$	687	$	2,538	$	2,647
Net investment income, after-tax	$	424		$	423	$	422	$	424		$	440		$	420	$	437	$	455	$	1,693	$	1,752
PRE-TAX YIELDS (2)
Fixed income securities		5.0	%		5.1	%	5.0	%	4.8	%		5.0	%		4.9	%	4.9	%	4.8	%	5.0	%	4.9	%
Equity securities		2.8			2.4		3.0		2.6			6.2			4.5		5.2		3.9		2.7		4.8
Mortgage loans		5.4			6.4		5.9		6.2			5.9			5.5		5.3		5.2		6.0		5.5
Limited partnership interests		13.8			7.4		7.8		6.1			8.9			2.4		8.8		16.0		8.8		8.9
Total portfolio		5.3			5.2		5.1		5.0			5.2			4.9		5.0		5.2		5.1		5.1
REALIZED CAPITAL GAINS AND LOSSES (PRE-TAX) BY ASSET TYPE
Fixed income securities	$	8		$	(12)	$	23	$	(18	)	$	54		$	(59)	$	(5)	$	(49)	$	1	$	(59)
Equity securities		8			5		31		1			1			(1)		-		-		45		-
Mortgage loans		1			(6)		(6)		31			3			(3)		9		(1)		20		8
Limited partnership interests		(3)			-		(3)		-			(1)			-		2		(1)		(6)		-
Derivatives and other		-			(3)		12		5			(1)			7		2		30		14		38
Total	$	14		$	(16)	$	57	$	19		$	56		$	(56)	$	8	$	(21)	$	74	$	(13)
REALIZED CAPITAL GAINS AND LOSSES (PRE-TAX) BY TRANSACTION TYPE
Impairment write-downs	$	(5)		$	(10)	$	(16)	$	(2)		$	(13)		$	(12)	$	(6)	$	(20)	$	(33)	$	(51)
Change in intent write-downs		(4)			(7)		(1)		(7)			-			(1)		-		(16)		(19)		(17)
Net other-than-temporary impairment losses recognized in earnings		(9)			(17)		(17)		(9)			(13)			(13)		(6)		(36)		(52)		(68)
Sales		23			6		62		21			69			(51)		10		(8)		112		20
Valuation of derivative instruments		-			(5)		6		(4)			(10)			(3)		(11)		8		(3)		(16)
Settlements of derivative instruments		-			-		6		11			10			11		15		15		17		51
Total	$	14		$	(16)	$	57	$	19		$	56		$	(56)	$	8	$	(21)	$	74	$	(13)
AVERAGE INVESTMENT BALANCES (in billions) (3)	$	37.8		$	44.3	$	51.9	$	53.2		$	53.7		$	54.5	$	55.0	$	55.3	$	44.8	$	54.6

(1)	As of December 31, 2013, Allstate Financial has commitments to invest in additional limited partnership interests totaling $1.37 billion.
(2)	Pre-tax yields are calculated as annualized investment income before investment expense (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 and include investments classified as held for sale. Excluding investments classified as held for sale, pre-tax yield was 5.5% for the three months ended December 31, 2013.
(3)	Average investment balances for the quarter are calculated as the average of the current and prior quarter investment balances. Year-to-date average investment balances are calculated as the average of investment balances at the end of each quarter during the year. For purposes of the average investment balances calculation, unrealized capital gains and losses are excluded and investments classified as held for sale are included.

53

THE ALLSTATE CORPORATION

INVESTMENT 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,
		2013				2013				2013				2013				2012				2012				2012				2012				2013				2012
Consolidated investment portfolio
Interest-bearing (1)	$	70,796			$	70,423			$	82,729			$	87,890			$	88,194			$	89,558			$	88,836			$	88,390			$	70,796			$	88,194
Equity/owned (2)		10,359				10,060				9,586				9,492				9,084				8,958				8,484				8,619				10,359				9,084
Total	$	81,155			$	80,483			$	92,315			$	97,382			$	97,278			$	98,516			$	97,320			$	97,009			$	81,155			$	97,278
Consolidated portfolio total return (3)
Interest-bearing		0.6		%		0.8		%		(1.4	)	%		0.8		%		0.9		%		2.3		%		1.8		%		1.4		%		0.8		%		6.4		%
Equity/owned		0.6				0.3				-				0.4				0.3				0.2				-				0.6				1.3				1.1
Investment Expenses		(0.1	)			(0.1	)			(0.1	)			-				(0.1	)			(0.1	)			-				-				(0.3	)			(0.2	)
Total		1.1				1.0				(1.5	)			1.2				1.1				2.4				1.8				2.0				1.8				7.3
Consolidated portfolio total return (3)
Income		1.1		%		1.0		%		1.0		%		1.0		%		1.1		%		1.0		%		1.0		%		1.0		%		4.1		%		4.1		%
Valuation		-				-				(2.5	)			0.2				-				1.4				0.8				1.0				(2.3	)			3.2
Total		1.1				1.0				(1.5	)			1.2				1.1				2.4				1.8				2.0				1.8				7.3
Consolidated net investment income
Interest-bearing (4)	$	819			$	861			$	868			$	895			$	924			$	940			$	941			$	927			$	3,443			$	3,732
Equity/owned		260				140				170				136				166				55				135				133				706				489
Investment expenses		(53	)			(51	)			(54	)			(48	)			(57	)			(55	)			(50	)			(49	)			(206	)			(211	)
Total	$	1,026			$	950			$	984			$	983			$	1,033			$	940			$	1,026			$	1,011			$	3,943			$	4,010
Consolidated Interest-bearing pre-tax yield (5)		4.1		%		4.3		%		4.3		%		4.3		%		4.4		%		4.4		%		4.4		%		4.4		%		4.2		%		4.4		%
Property-Liability net investment income
Interest-bearing excluding prepayment premiums and litigation proceeds	$	218			$	229			$	234			$	246			$	260			$	275			$	279			$	273			$	927			$	1,087
Prepayment premiums and litigation proceeds		9				4				10				15				10				7				3				-				38				20
Total Interest-bearing		227				233				244				261				270				282				282				273				965				1,107
Equity/owned		183				99				125				102				118				41				91				61				509				311
Investment expenses		(28	)			(23	)			(26	)			(22	)			(26	)			(24	)			(21	)			(21	)			(99	)			(92	)
Total		382				309				343				341				362				299				352				313				1,375				1,326
Less: prepayment premiums and litigation proceeds		9				4				10				15				10				7				3				-				38				20
Total excluding prepayment premiums and litigation proceeds	$	373			$	305			$	333			$	326			$	352			$	292			$	349			$	313			$	1,337			$	1,306
Property-Liability interest-bearing pre-tax yield		2.9		%		3.1		%		3.2		%		3.5		%		3.6		%		3.8		%		3.8		%		3.8		%		3.2		%		3.8		%
Property-Liability interest-bearing pre-tax yield excluding prepayment premiums and litigation proceeds		2.8		%		3.0		%		3.1		%		3.3		%		3.5		%		3.7		%		3.8		%		3.8		%		3.1		%		3.7		%
Allstate Financial net investment income
Interest-bearing excluding prepayment premiums and litigation proceeds	$	569			$	584			$	591			$	599			$	619			$	630			$	640			$	643			$	2,343			$	2,532
Prepayment premiums and litigation proceeds		15				32				27				27				27				17				7				-				101				51
Total interest-bearing		584				616				618				626				646				647				647				643				2,444				2,583
Equity/owned		77				43				43				34				48				14				44				71				197				177
Investment expenses		(24	)			(26	)			(28	)			(25	)			(29	)			(29	)			(28	)			(27	)			(103	)			(113	)
Total		637				633				633				635				665				632				663				687				2,538				2,647
Less: prepayment premiums and litigation proceeds		15				32				27				27				27				17				7				-				101				51
Total excluding prepayment premiums and litigation proceeds	$	622			$	601			$	606			$	608			$	638			$	615			$	656			$	687			$	2,437			$	2,596
Allstate Financial interest-bearing pre-tax yield		5.0		%		5.2		%		5.0		%		4.9		%		5.0		%		4.9		%		4.9		%		4.8		%		5.0		%		4.9		%
Allstate Financial interest-bearing pre-tax yield excluding prepayment premiums and litigation proceeds		4.8		%		4.9		%		4.8		%		4.7		%		4.8		%		4.8		%		4.8		%		4.8		%		4.8		%		4.8		%

(1)Includes fixed income securities, mortgage loans, short-term and other investments.

(2)Includes limited partnership interests, equity securities and real estate.

(3)Total return on investment portfolio is calculated from GAAP results including the total of net investment income, realized capital gains and losses, the change in unrealized net capital gains and losses, and the change in the difference between fair value and carrying value of mortgage loans and cost method limited partnerships, divided by the average fair value balances. For purposes of the total return calculation, investments classified as held for sale are included.

(4)Consolidated interest-bearing net investment income excluding investments classified as held for sale totaled $691 million for the three months ended December 31, 2013.

(5)Pre-tax interest-bearing yield is calculated as annualized interest-bearing investment income before investment expense divided by the average of interest-bearing investment balances at the end of each quarter during the year.  Interest-bearing investment balances, for purposes of the pre-tax yield calculation, exclude unrealized capital gains and losses and include investments classified as held for sale.  Excluding investments classified as held for sale, pre-tax consolidated interest-bearing yield was 4.1% for the three months ended December 31, 2013.

54

Definitions of Non-GAAP Measures

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

Operating income is net income available to common shareholders, 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,

- 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 available to common shareholders is the GAAP measure that is most directly comparable to operating income.   We use operating income 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 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 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, 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 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 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 is used by management along with the other components of net income available to common shareholders to assess our performance.  We use adjusted measures of operating income and operating income per diluted common share in incentive compensation.  Therefore, we believe it is useful for investors to evaluate net income available to common shareholders, operating income 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 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 as the denominator.  Operating income should not be considered as a substitute for net income available to common shareholders and does not reflect the overall profitability of our business.  A reconciliation of operating income to net income available to common shareholders is provided in the schedule, “Contribution to Income”.

Underwriting income 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 available to common shareholders is the most directly comparable GAAP measure.  Underwriting income should not be considered as a substitute for net income available to common shareholders and does not reflect the overall profitability of our business.  A reconciliation of Property-Liability underwriting income to net income available to common shareholders 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, business combination expenses and the amortization of purchased intangible assets.  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 as a substitute for the combined ratio and does not reflect the overall underwriting profitability of our busines, “Allstate Brand Profitability Measures”, “Encompass Brand Profitability Measures” , “Esurance Brand Profitability Measures”, “Auto Profitability Measures” and “Homeowners Profitability Measures”.

Operating income return on common 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 common 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 common 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 common shareholders’ equity excluding the effect of unrealized net capital gains and losses for the denominator as a representation of common 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 available to common shareholders and return on common 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 common 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 common shareholders’ equity from return on common shareholders’ equity is the transparency and understanding of their significance to return on common 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 common shareholders’ equity and return on common 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 common 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 common shareholders’ equity should not be considered as a substitute for return on common shareholders’ equity and does not reflect the overall profitability of our business.  A reconciliation of return on common shareholders’ equity and operating income return on common shareholders’ equity can be found in the schedule, “Return on Common Shareholders’ Equity”.

Book value per common 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 common 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 common shares outstanding plus dilutive potential common shares outstanding.  We use the trend in book value per common share, excluding the impact of unrealized net capital gains and losses on fixed income securities, in conjunction with book value per common 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 common 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 common share is the most directly comparable GAAP measure.  Book value per common 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 common share, and does not reflect the recorded net worth of our business.  A reconciliation of book value per common share, excluding the impact of unrealized net capital gains on fixed income securities, and book value per common share can be found in the schedule, “Book Value per Common Share”.

55